65th Fiscal Term

Annual Report

From April 1, 2011 to March 31, 2012

HIROSE ELECTRIC CO., LTD.

HIROSEELECTRIC
CO.,LTD.

To Our Shareholders

We are pleased to report the results of operations for fiscal 2011,
the year ended March 31, 2012 (the 65th fiscal term, from April 1,
2011 to March 31, 2012).

Chairman and
Representative Director

Business Overview
During the year ended March 31, 2012, the production activities ofmany corporations, which became sluggish due to the impact of theGreat East Japan Earthquake, somewhat rallied due to early
restoration of their supply chains. However, economic uncertainty
surrounding Japanese companies remained harsh with suchnegative factors as adverse effects of the enormous flooding in
October 2011 in Thailand where the production bases of the
manufacturing industry are concentrated, financial concerns
triggered by the sovereign debt crisis in Europe, slowing
economies in emerging nations and the lingering undertone of yen
appreciation despite a slight backlash toward depreciation since thesecond half of February 2012.
In this adverse business environment, the Hirose Electric Groupdiligently promoted efforts to recover production levels, which once
dropped considerably from the impact of the aforementioned
earthquake. At the same time, the Group was active in expanding
its global business while enhancing the alliance with HIROSE
KOREA CO., LTD., which the Company converted into a
consolidated subsidiary in December 2010, in diverse aspects ofsales, development and production.
Meanwhile, we consolidated the Product Development,
Engineering, Sales & Marketing Divisions and other functions,

President andVice Chairman and
Representative Director Representative Director

Tatsuro Nakamura Kazunori Ishii

Sakae Kushida

Financial Highlights■ Net sales■ Ordinary income■ Net income

Millions of yen
120,000 118,043

Millions of yen
45,000Millions of yen
25,00022,597100,000

89,872

84,46892,44094,79080,00037,97620,00035,00030,00025,00060,00020,77620,00040,00021,99922,73915,00020,91913,306

13,266

2009

2010

11,714

12,82410,00015,00010,00020,000

5,000

5,000

0

0
2008

1

40,000

2009

2010

2011

2012

0

2008

2009

2010

2011

2012

2008

2011

2012

which were previously dispersed in Yokohama and the Tokyo
metropolitan area, into the Yokohama Center, a new company
building located in Tsuzuki-ku, Yokohama. Thus, we are promoting
initiatives to reinforce our development and sales systems for highvalue-added products in the pursuit of swifter responses toincreasingly sophisticating market needs.
As a result, consolidated net sales for the year under review
amounted to ¥94,790 million, an increase of 2.5% from a year
earlier. Operating income decreased 11.2% to ¥19,554 million andordinary income declined 8.0% to ¥20,919 million, whereas net
income increased 9.5% to ¥12,824 million. These results reflected anincrease in sales due to the conversion of HIROSE KOREA into a
consolidated subsidiary despite negative impacts such as stagnant
business activities at several mobile phone and smartphone
manufacturers, sluggish orders in the industrial machinery field
and the aftereffect of the Thai flooding.
Although a trend of gradual recovery is anticipated in the
future financial environment, the business environment in which
the Group operates is forecast to remain uncertain against a
backdrop of lingering yen appreciation and the debt crisis in
Europe.
Yet, the quantitative expansion of mobile phones, smartphones
and tablet PCs, further sales growth in the automobile market due
to an expansion in automotive electronics, and the growth of theindustrial machinery and communications markets are anticipated.
On the other hand, intensifying competition due to customers’
preference for lower-priced products is expected to accelerate.

■ Net income per share
yen
700
600

In this tough business environment, the Group intends topursue leading-edge technologies, conduct more efficient
distribution and concentration of resources and consistently carryout reforms and innovations. Such aggressive initiatives also
include the reinforcement of high-value-added product development
capabilities to meet market needs, and the promotion of
manufacturing efficiency and further improvement of productq ua l i t y , a l l o f w h i c h w o u ld s er ve t o i m pr o ve o ur c o s tcompetitiveness. At the same time, we are determined tostrengthen our management foundations toward profitable growthand improve our corporate value through efforts to promote
globalization, including the initiative to focus on the diversificationof risk at production bases, and exploit domestic and overseas sales
channels.
We look forward to your continued support andencouragement.
June 2012

Tatsuro Nakamura
Chairman and Representative Director■ Equity ratio & Ordinary income ratio to sales■ Net assets per share

%
100

yen
7,000

Equity ratio

Ordinary income ratio to sales

90

587.36

80

500

70

5,000

400

60

4,000

356.59363.15330.23366.11

300
200

50
40

3,000

30

2,000

20

100

0
2008

2009

2010

2011

2012

6,649

2008

2009

2010

2011

2012

1,000

10

0

6,271

6,463

6,837

6,277

6,000

0

2008

2009

2010

2011

2012

2

Overview by Product Segment

Multi-Pin Connectors

Our flagship multi-pin connectors include avariety of connector types such as circular andrectangular connectors, connectors for ribbon
cables, connectors used for printed circuitboards including FPCs (flexible printed circuitboards) and nylon connectors.
The major applications of these connectors
include a wide range of fields such as mobile
phones and smartphones, digital information
consumer electronics, PCs, communications
equipment and automotive electronics, as wellas industrial fields such as measuring andcontrol equipment, FA equipment and medical
electronics equipment. Further expansion indemand is expected along with the further3

development of a sophisticated information andcommunications networked society and an ecofriendly, energy conservation-oriented society.
Consolidated segment sales for the year
under review increased 1.0% year over year to¥75,699 million, whereas operating income
decreased 13.3% to ¥15,756 million. These
results reflected an increase in sales due to theconversion of HIROSE KOREA into a
consolidated subsidiary despite negative
impacts such as stagnant business activities atseveral mobile phone and smartphone
manufacturers, and the aftereffect of the Thai
flooding, etc.

Coaxial Connectors

Coaxial connectors are a special type of highperformance connector used primarily for
microwave and other high-frequency signals. Theirapplications mainly include microwave
communications devices, satellite
communications equipment, electronic measuring
instruments, mobile phones and smartphones,

and switching and transmission equipment.
Optical fiber connectors and coaxial switches arealso included in this segment.
Consolidated segment sales for the year
under review increased 7.2% year over year to¥14,942 million and operating income rose 3.1%
to ¥3,761 million.

Other Products

The other products segment includes medical electronics
equipment such as interference wave EMSs, micro switches andinstruments for connectors.
Consolidated segment sales for the year under review increased
1 6.6% year over year to ¥4,1 4 8 million and operating income
declined 81.4% to ¥36 million.
According to the change to the management standards of theGroup, high-frequency devices such as directional couplers, fixed
attenuators and coaxial switches, which were previously categorizedunder the“Other Products”segment, have been collectively
categorized under the“Coaxial Connectors”segment effective fromthe fiscal year under review.
As a result of this change, the relevant figures for the fiscal year
under review were calculated based on the new segmentation
method after the change.
4Consolidated Financial Statements
Consolidated Balance Sheets
Account item

(Millions of yen)

Consolidated Statements of Income

As of March 31, 2012 As of March 31, 2011

(Assets)
Current assets

172,064

167,599

Fixed assets

89,421

92,537

26,44824,464

Property, plant and equipment

From April 1, 2011 From April 1, 2010
to March 31, 2012 to March 31, 2011

Account item
Net sales

94,79092,440

Cost of sales

56,166

52,615Gross profit

38,62339,825

19,06917,799Selling, general and administrative expenses

19,55422,026

Other income

Operating income

1,450

1,560

Other expenses

85

846
22,739Intangible assets

1,511

1,884

Investments and other assets

61,461

66,187

Ordinary income

20,919261,486

260,136

Extraordinary Income

1,025

234

Extraordinary Loss

385

2,501

Total assets(Liabilities)

Income before income taxes

21,55920,472Current liabilities

19,231

20,474

Provision for income taxes―Current

7,269

8,506

Long-term liabilities

2,652

2,100

Provision for income taxes―Deferred

1,070

260

Total liabilities

21,884

22,574

Income before minority interests

13,22011,706(Net assets)
Shareholders’equity

238,704

236,511

Common stock

9,404

9,404

Additional paid-in capital

14,371

14,371Retained earnings

269,620

262,056

Treasury stock, at cost

△54,692△49,321

Accumulated other comprehensive income

395

△8

12,824

11,714

Minority interest in income (loss)
Net income
Note: Amounts less than ¥1 million are truncated.

Consolidated Statements of Cash Flows (Millions of yen)
From April 1, 2011 From April 1, 2010
to March 31, 2012 to March 31, 2011

Account item
Operating activities

21,05022,193

Investing activities△10,852△28,006

Financing activities△10,679△7,581△76△1,042△2,101△1,69663

64

Effect of exchange rate change on cash and cash equivalents
Net increase/decrease in cash and cash equivalents△558△14,438

Cash and cash equivalents, beginning of the year

42,43556,836

Increase in cash and cash equivalents from newly consolidated subsidiary

115

37

Cash and cash equivalents, end of the year

41,99242,435

Stock acquisition rights
Minority interests

2,936

2,682

Total net assets

239,601

237,562

Total liabilities and net assets

261,486

260,136

Note: Amounts less than ¥1 million are truncated.

Note: Amounts less than ¥1 million are truncated.

Consolidated Statement of Changes in Net Assets (From April 1, 2011 to March 31, 2012)	(Millions of yen)

Accumulated other comprehensive income
Stock
CommonAdditional
Retained
Treasury
Total shareholders’ Valuation difference Foreign currency Total accumulated acquisition
on available-fortranslation
other comprehensive
rightsstock
paid-in capital earnings stock, at costequitysale securities
adjustment
income9,404
14,371
262,056△49,321236,5112,124△3,820△1,69664
Shareholders’equity

Item
Balance at April 1, 2011
Amount of changes during the period
Dividends from surplus
Net income for the period
Acquisition of treasury stock
Change of scope of consolidation
Net amount of changes during theperiod other than shareholders’equity
Total amount of changes during the period
Balance at March 31, 2012

△5,262
12,824△5,371

3
―
9,404

―
14,371

Note: Amounts less than ¥1 million are truncated.

5(Millions of yen)

7,564
269,620△5,371△54,692△5,262
12,824△5,371
3

Minority
interests

Total net
assets

2,682

237,562――――△5,262
12,824△5,371
3

―

269

△675

△405

△1

253

△153

2,192
238,704

269
2,394

△675
△4,496△405△2,101

△1
63

253
2,936

2,039
239,601

Nonconsolidated Financial Statements
Nonconsolidated Balance Sheets
Account item

(Millions of yen)

As of March 31, 2012 As of March 31, 2011

(Assets)
Current assets

98,336

97,870

Fixed assets

53,84955,820Property, plant and equipment

14,78813,231Intangible assets

1,104

1,176

Investments and other assets

37,956

41,412

152,186

153,691

Current liabilities

10,521

10,212Long-term liabilities

799

386

11,32010,599Total assets

Nonconsolidated Statements of Income (Millions of yen)
From April 1, 2011
to March 31, 2012

From April 1, 2010
to March 31, 2011

Net sales

76,05582,632

Cost of sales

51,10756,582Gross profit

24,94826,05014,18814,005

10,75912,045

Other income

4,196

4,202

Other expenses

1,666

2,246

Ordinary income

13,28914,001

Extraordinary Income

933

234

Extraordinary Loss

273

411

Income before income taxes

13,94813,824

Provision for income taxes―Current

5,143

5,629

Provision for income taxes―Deferred

663

△29

8,141

8,223

Account item

Selling, general and administrative expenses

Operating income(Liabilities)

Total liabilities(Net assets)
Shareholders’equity

138,426

140,918

Common stock

9,404

9,404

Additional paid-in capital

14,371

14,371Retained earnings

169,342

166,463

Treasury stock, at cost

△54,692△49,321

2,376

2,109

63

64

Total net assets

140,865

143,092

Total liabilities and net assets

152,186

153,691

Valuation, translation adjustments and others
Stock acquisition rights

Note: Amounts less than ¥1 million are truncated.

Net income

Note: Amounts less than ¥1 million are truncated.

6

Introduction of Our New ProductsNew
products

The Company launches many new products every year into the market. The following product series are
typical of our recent introductions.
FH54
This backflip connector was developed to reduce the area occupied
by substrates, which is required to comply with high-performancecompact devices such as mobile phones, smartphones and digital stillcameras (DSCs). Its original flexible printed circuit board (FPC) holding
configuration ensures high operability with excellent FPC-holding
strength realized from its high density specifications of 0.2 mm inpitch, 3.2 mm in depth and 0.9 mm in height.

TQ Series
These BtoW connectors have a 4-lined, 40-core space-saving configurationand can be mounted on the VME standard racks developed for railway rollingstock. The simple, one-touch center-lock system of these connectors excels in
operability, and the three-point-contact configuration of terminals ensures highreliability even when exposed to vehement vibrations generated from rollingstock. Abundant variations are available with the latest key system to prevent
mistaken insertions.

7

PS2 Series

The PS2 Series connectors are composite plug-in connectors
composed of a power source and signal terminals, which were developedfor use in power supplies for batteries and UPSs that are indispensable
to create a so-called smart grid society. Heat generation by turning onelectricity is minimized with numerous contacts located on the
300A-compliant power supply terminal. Signal terminals are designed forsafety in a sequential configuration to detect half-fitted errors.

GT21
For the connection of automobile antenna, this newly developed GT21 small
connector allows easy wire connection of coaxial cables at once. The
connector meets the stringent automobile specifications to ensure safety inconnecting cables with a retainer equipped as a device to prevent half
insertion of terminals. Boasting high-frequency performance of less than
VSWR1.3 for up to 2.5 GHz, the connector is available for many applications
such as GPS, satellite radios and Bluetooth-based communications.

Group Network■ Overseas bases(Branches, production subsidiaries,
sales subsidiaries and affiliates)■ Overseas agencies■ Major exporting destinations● HIROSE ELECTRIC
MALAYSIA SDN.
BHD. (Malaysia)● Head office● Kikuna Office● Yokohama Center● Head office● Yokohama Center● Kikuna Office● Kansai Branch● Chubu Sales Office

5-23, Osaki 5-chome, Shinagawa-ku, Tokyo
6-3, Nakagawachuo 2-chome, Tsuzuki-ku,
Yokohama
3-13, Kikuna 7-chome, Kohoku-ku, Yokohama
Shinosaka Iida Bldg., 5-33, Nishimiyahara
1-chome, Yodogawa-ku, Osaka
Nakato Marunouchi Bldg., 17-6,
Marunouchi 3-chome, Naka-ku, Nagoya● P.T. HIROSE
ELECTRIC INDONESIA(Indonesia)● Subsidiaries● HIROSE ELECTRIC(DONGGUAN) CO.,LTD. (China)(Domestic)

TOHOKU HIROSE ELECTRIC CO., LTD. (Miyako, Iwate)
KORIYAMA HIROSE ELECTRIC CO., LTD. (Koriyama, Fukushima)
ICHINOSEKI HIROSE ELECTRIC CO., LTD. (Ichinoseki, Iwate)
HST CO., LTD. (Yokohama, Kanagawa)(Overseas)
HIROSE ELECTRIC (U.S.A.), INC. (U.S.A.)HIROSE ELECTRIC UK LTD. (U.K.)
HIROSE ELECTRIC EUROPE B.V. (The Netherlands)
HIROSE ELECTRIC MALAYSIA SDN. BHD. (Malaysia)
HIROSE KOREA CO., LTD. (South Korea)
HIROSE ELECTRIC SINGAPORE PTE. LTD. (Singapore)
HIROSE ELECTRIC TAIWAN CO., LTD. (Taiwan)
P.T. HIROSE ELECTRIC INDONESIA (Indonesia)
HIROSE ELECTRIC HONG KONG CO., LTD. (Hong Kong)
HIROSE ELECTRIC HONG KONG TRADING CO., LTD. (Hong Kong)
HIROSE ELECTRIC (DONGGUAN) CO., LTD. (Dongguan, China)
HIROSE ELECTRIC (SHANGHAI) CO., LTD. (Shanghai, China)
HIROSE ELECTRIC (SUZHOU) CO., LTD. (Suzhou, China)
HST (HONG KONG) LTD. (Hong Kong)
HIROSE ELECTRIC TECHNOLOGIES (SHENZHEN) CO., LTD. (Shenzhen, China)
WEIHAI HIROSEKOREA ELECTRIC CO., LTD. (Weihai, China)
WEIHAI HIROSE TRADING CO., LTD. (Weihai, China)

8

Corporate Data

Company Profile

Stock Information (As of March 31, 2012)

Trade name

HIROSE ELECTRIC CO., LTD.

Date of incorporation

June 15, 1948

Number of employees

728 (excluding part-timers)

Paid-in capital￥9,404,379,401

Directors and Corporate Auditors (As of June 28, 2012)
Chairman and Representative Director
Vice Chairman and Representative Director
President and Representative Director
Managing Director
Director
Director
Director
Director
Outside Director
Full-time Corporate Auditor
Outside Corporate Auditor
Outside Corporate Auditor
Outside Corporate Auditor

Tatsuro Nakamura
Sakae Kushida
Kazunori Ishii
Yoshikazu Yoshimura
Kazuhisa Nikaido
Kazuyuki Iizuka
Makoto Kondo
Mitsuo Nakamura
Kensuke Hotta
Toshio Matsubara
Terukazu Sugishima
Akira Seshimo
Tsukasa Yunoki

Notes:
1.	Director Kensuke Hotta is the outside director as
stipulated in Article 2, Item 15, of the Corporation Law.
2.	Corporate Auditors Terukazu Sugishima, Akira Seshimo
and Tsukasa Yunoki are outside corporate auditors as
stipulated in Article 2, Item 16, of the Corporation Law.

Accounting auditor

9

KPMG AZSA LLC

Total number of shares issued
34,604,218 shares(Excluding 5,416,518 shares of treasury stock)
Number of shareholders

5,216

Major Shareholders (Top 10)
Number of
Ratio ofshares held shareholding

NameHundred shares％

The Master Trust Bank of Japan, Ltd. (Trust account)

36,17628,55018,121
12,455
12,166
12,117
10,340
8,697

10.45
8.25
5.23
3.59
3.51
3.50
2.98
2.51

Japan Trustee Services Bank, Ltd. (Re-trust account of The Sumitomo Trust & Banking Co.,
Ltd., and the retirement benefit trust account of Sumitomo Mitsui Banking Corporation)

8,162

2.35

Mizuho Trust & Banking Co., Ltd. 0700028

7,898

2.28

State Street Bank and Trust Company
Hirose International Scholarship Foundation
Japan Trustee Services Bank, Ltd. (Trust account No. 4)
JPMorgan Chase Bank 380055
Japan Trustee Services Bank, Ltd. (Trust account)
State Street Bank and Trust Company 505223
State Street Bank and Trust Company

Note: In addition to the 10 major shareholders above, the Company owns
54,165 hundred shares of treasury stock. The ratio of shareholding is
calculated after excluding the shares of treasury stock.

Distribution of Shares
Distribution of Shares by Shareholder Type
Individuals, etc./4,629 persons
81,386 hundred shares（20.34％）

Financial institutions/59 persons
109,772 hundred shares（27.43％）

Securities companies/
34 persons
4,857 hundred shares（1.21％）
Foreign corporations, etc./286 persons
152,850 hundred shares（38.19％）Other corporations/208 persons
51,340 hundred shares（12.83％）

Shareholder information
Fiscal term

April 1 of a calendar year to March 31 of the next calendar year

Ordinary General
Meeting of Shareholders

June every year

Record dateOrdinary General Meeting of Shareholders: March 31 every year
Year-end dividend:
March 31 every year
Interim dividend: September 30 every year
(As required, another record date may be
decided with prior public notice.)[Share-related notifications and inquiries regarding change of address, etc.]
Shareholders who have accounts at securities companies are requested todirect their notifications and inquiries regarding change of address, etc. totheir respective securities companies where shareholders have theiraccounts. Shareholders who do not have accounts at securities companies
are requested to call the telephone referral line as stated below.
Number of sharesin one voting unit

100 shares

Method of public notice

The Company’s Web site below shall be used for its public notices.
〈http://www.hirose.co.jp/investor/index.htm〉
If an electronic public notice should fail due to accident
or any other unavoidable circumstances, the Company
shall post a public notice in the Nihon Keizai Shimbun.

Shareholders’register manager andaccount management
institution for special
accounts

Sumitomo Mitsui Trust Bank, Limited
1-4-1, Marunouchi, Chiyoda-ku, Tokyo

Paperwork
processing officeof shareholders’register manager

Securities Agency Department,
Sumitomo Mitsui Trust Bank, Limited
1-4-1, Marunouchi, Chiyoda-ku, Tokyo(Mailing address)

Securities Agency Department,
Sumitomo Mitsui Trust Bank, Limited
1-10, Nikko-cho, Fuchu-shi, Tokyo 183-8701
Phone: 0120-176-417 (Toll-free)(Telephone referral)

The Company’s Web site

http://www.hirose.co.jp

Web site

URL: http://www.smtb.jp/personal/agency/
index. html
[Special accounts]
The Company has opened accounts (special accounts) at The Sumitomo
Mitsui Trust Bank, Limited the shareholders’register manager statedabove, for shareholders who did not use JASDEC (Japan Securities
Depository Center, Inc.) prior to the transition to the electronic sharecertificate system. Shareholders who have inquiries about the special
accounts and notifications regarding change of address, etc. are requested
to call the telephone referral line as stated above.
10

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