Consolidated Financial Statements 2023
As of and for the Year Ended February 28, 2023,
and Independent Auditor’s ReportI n d e p e n d e n t A u d i t o r ’s R e p o r t

OpinionWe have audited the consolidated financial statements of Furuno Electric Co., Ltd. and its consolidated
subsidiaries (the “Group”), which comprise the consolidated balance sheet as of February 28, 2023, and theconsolidated statement of income, consolidated statement of comprehensive income, consolidated statement ofchanges in equity and consolidated statement of cash flows for the year then ended, and notes to the consolidated
financial statements, including a summary of significant accounting policies, all expressed in Japanese yen.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, theconsolidated financial position of the Group as of February 28, 2023, and its consolidated financial performance and its
consolidated cash flows for the year then ended in accordance with accounting principles generally accepted in Japan.
Convenience Translation
Our audit also comprehended the translation of Japanese yen amounts into U.S. dollar amounts and, in our
opinion, such translation has been made in accordance with the basis stated in Note 1 to the consolidated financial
statements. Such U.S. dollar amounts are presented solely for the convenience of readers outside Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated
Financial Statements section of our report. We are independent of the Group in accordance with the provisions of
the Code of Professional Ethics in Japan, and we have fulfilled our other ethical responsibilities as auditors. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matter
A key audit matter is a matter that, in our professional judgment, was of most significance in our audit of theconsolidated financial statements of the current period. The matter was addressed in the context of our audit of theconsolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide aseparate opinion on the matter.

1

Recoverability of Furuno Electric Co., Ltd.’s deferred tax assets
Key Audit Matter Description

How the Key Audit Matter Was Addressedin the Audit

The Group recorded deferred tax assets of 412 million

In testing the recoverability of deferred tax assets, we

yen in the consolidated balance sheet as of February

performed the following audit procedures, among28, 2023. As described in Note 12 “Income Taxes,” theothers:amount of deferred tax assets before offsetting against

1 Internal Control Testingdeferred tax liabilities was 1,194 million yen, which is• We tested the design and operating effectivenessthe amount calculated by deducting the valuationof the controls over the determination of theallowance of 5,347 million yen from the deferred tax

recoverability of deferred tax assets, including

assets of 6,542 million yen related to deductible

estimation of future taxable income.

temporary differences and tax loss carryforwards.

2 Assessment of the Reasonableness of Estimation

Among these amounts, Furuno Electric Co., Ltd., (theof Taxable Income“Company”) recognized the total amount of deferred
tax assets related to deductible temporary differences• With the assistance of our tax specialist, weand tax loss carryforwards of 3,956 million yen and theexamined whether the amounts of deductible

valuation allowance of 3,579 million yen, respectively.

temporary differences and tax loss carryforwards
were accurately calculated.

The deferred tax assets are recorded to the extent that• We tested the scheduling of the year in which

they have the effect of reducing future tax expenses byusing deductible temporary differences or offsetting

deductible temporary differences are expected to

tax loss carryforwards against taxable income.

be used and the operating loss carryforwards are
expected to be deducted for tax purposes by

As described in Note 3 “Significant Accounting

reviewing related documents.

Estimates - Recoverability of deferred tax assets,” the• We evaluated the consistency of future businessrecoverability of deferred tax assets is determinedbased on estimation of future taxable income and tax

plans used in estimating the future taxable income

planning. Future taxable income is estimated based onwith the business plans for the following year

the Company’s business plans. Forecasts of sales andapproved by the Board of Directors.

cost of sales used in the business plans include• Regarding the significant assumptions, such as

significant assumptions, such as amount of orders

amount of orders received and amounts ofreceived and amounts of production output that

production output that are included in future

involves uncertainties, and management’s judgments

business plans, we made inquiries of thehave a significant impact on the amount of deferred tax

management and the inspection of relevant

assets.

documentation and examined whether these

Based on the above, we determined that theassumptions are reasonably set in light of status

estimation of future taxable income with respect toof orders received and production plans of major

the recoverability of deferred tax assets is particularly

factories.

significant for the audit of the consolidated financial
statements for the current fiscal year. Therefore, we
identified it as a key audit matter.
Other Information
Management is responsible for the other information. Audit & Supervisory Board members and the Audit &Supervisory Board are responsible for overseeing the Directors’ execution of duties relating to the design andoperating effectiveness of the controls over the other information. The other information comprises the information
included in the Annual Report, but does not include the consolidated financial statements and our auditor’s report
thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do not express
any form of assurance conclusion thereon.

2

In connection with our audit of the consolidated financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent with the consolidated
financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this otherinformation, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Audit & Supervisory Board Members and the Audit & Supervisory
Board for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements inaccordance with accounting principles generally accepted in Japan, and for such internal control as management
determines is necessary to enable the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability tocontinue as a going concern, disclosing, as applicable, matters related to going concern in accordance withaccounting principles generally accepted in Japan and using the going concern basis of accounting unlessmanagement either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
Audit & Supervisory Board members and the Audit & Supervisory Board are responsible for overseeing the
Directors’ execution of duties relating to the design and operating effectiveness of the controls over the Group’s
financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes ouropinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted inaccordance with auditing standards generally accepted in Japan will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these
consolidated financial statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise professional
judgment and maintain professional skepticism throughout the audit. We also:• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due tofraud or error, design and perform audit procedures responsive to those risks. The procedures selected dependon the auditor’s judgment. In addition, we obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or theoverride of internal control.
• Obtain, when performing risk assessment procedures, an understanding of internal control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates andrelated disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may castsignificant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated
financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on
the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may
cause the Group to cease to continue as a going concern.

3• Evaluate whether the overall presentation and disclosures of the consolidated financial statements are inaccordance with accounting principles generally accepted in Japan, as well as the overall presentation, structure
and content of the consolidated financial statements, including the disclosures, and whether the consolidated
financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Group to express an opinion on the consolidated financial statements. We are responsible for the
direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with Audit & Supervisory Board members and the Audit & Supervisory Board regarding, among
other matters, the planned scope and timing of the audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
We also provide Audit & Supervisory Board members and the Audit & Supervisory Board with a statement that wehave complied with relevant ethical requirements regarding independence, and communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence, and whereapplicable, related safeguards.
From the matters communicated with Audit & Supervisory Board members and the Audit & Supervisory Board, we
determine those matters that were of most significance in the audit of the consolidated financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law
or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determinethat a matter should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Group which is required to bedisclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.

July 13, 2023

4

Consolidated Balance Sheet
FURUNO ELECTRIC CO., LTD. and Consolidated Subsidiaries
February 28, 2023

ASSETS

Millions of Yen
2023
2022

Thousands of
U.S. Dollars(Note 1)
2023

CURRENT ASSETS:
Cash and cash equivalents (Note 15)¥ 14,683

Short-term investments (Notes 4 and 15)

693

Notes receivable – trade (Notes 5, 15 and 20)¥13,864 $107,701
486

5,083

942

988

6,909

Accounts receivable – trade (Notes 5, 15 and 20)

16,747

14,092

122,841

Contract assets (Note 20)

3,847Electronically recorded receivables – operating (Note 15)

1,076

1,617

7,892

Allowance for doubtful receivables

(277)

(306)

(2,031)Inventories (Note 7)

40,694

27,693

298,496

Other current assets

3,872

3,574

28,401

82,28062,010603,535

Total current assets

28,218PROPERTY, PLANT AND EQUIPMENT – NET (Notes 8 and 9):
Land

3,596

3,598

26,377

Buildings and structures

17,884

17,242

131,181

Machinery and equipment

5,409

4,927

39,675

Furniture and fixtures

12,026

11,276

88,212Right-of-use assets

2,305

1,412

16,907

95

304

696
303,080

Construction in progress
Total
Accumulated depreciation
Property, plant and equipment – net

41,31938,762(27,404)(25,362) (201,012)

13,914

13,400102,061

2,349

1,981

17,230

737

1,199

5,406

INVESTMENTS AND OTHER ASSETS:
Investment securities (Notes 6 and 15)
Investments in unconsolidated subsidiaries andassociated companies
Goodwill

819

778

6,007

1,100

1,447

8,068

Insurance funds

407

458

2,985

Software (Note 8)

3,121

3,436

22,892

412

240

3,022

1,252

1,021

9,183

10,202

10,562

74,833

Asset for retirement benefits (Note 10)

Deferred tax assets (Notes 3 and 12)
Other assets (Note 8)
Total investments and other assets
TOTAL¥106,396

See notes to consolidated financial statements.

5¥85,973 $780,429

LIABILITIES AND EQUITY

Millions of Yen
2023
2022

Thousands of
U.S. Dollars(Note 1)
2023

CURRENT LIABILITIES:
Short-term bank loans (Note 9)¥  8,009

Current portion of long-term debt (Notes 9 and 15)

202

Notes payable – trade¥     2 $ 58,747
1,300

1,481

2

172

14

Accounts payable – trade

6,433

3,877

47,186

Electronically recorded obligations – operating

9,693

8,458

71,099912

332

Income taxes payable
Contract liabilities (Note 20)

2,756

6,689
20,215

Accrued employees’ bonuses

2,193

2,026

Accrued product warranty costs

872

1,098

6,396

Other current liabilities (Note 9)

6,448

7,755

47,29637,52525,023

275,251

Total current liabilities

16,085

LONG-TERM LIABILITIES:Long-term debt (Notes 9 and 15)

11,1068,300

81,464

Liability for retirement benefits – employees (Note 10)

3,154

2,942

23,135Long-term accounts payable

154

154

1,129

Deferred tax liabilities (Note 12)

363

536

2,662

Other long-term liabilities (Note 9)

1,589

1,134

11,655

16,36813,068120,061

7,534

7,534

55,262

Total long-term liabilities
COMMITMENTS AND CONTINGENT LIABILITIES (Note 16)
EQUITY (Note 11):
Common stock – authorized,
120,000 thousand shares; issued,
31,894 thousand shares for both 2023 and 2022
Capital surplus

9,289

9,295

68,136

Retained earnings

33,37532,152244,810

(175)

(187)

(1,283)

975

654

7,151

Foreign currency translation adjustments

1,974(1,169)14,479Defined retirement benefit plans

(860)

(399)

(6,308)52,11347,880382,256

47,880385,116

Treasury stock – at cost,
330 thousand shares and 352 thousand shares in 2023 and 2022
Accumulated other comprehensive income:Unrealized gain on available-for-sale securities

Total
Noncontrolling interests

389

Total equity

52,503

TOTAL¥106,396

6

2,853¥85,973 $780,429

Consolidated Statement of Income
FURUNO ELECTRIC CO., LTD. and Consolidated Subsidiaries
Year Ended February 28, 2023

Thousands of
U.S. Dollars(Note 1)
2023

Millions of Yen
2023
2022

NET SALES (Note 20)¥91,325¥84,783 $669,881

COST OF SALES

56,94753,145

417,714Gross profit

34,377

31,638252,160

32,853

29,105240,981

1,523

2,532

11,171

Interest and dividend income

180

149

1,320

Interest expense

(104)

(81)

(762)

Equity in earnings of an associate accounted for by the equity method

86

89

630

Foreign exchange gain

366

114

2,684

Subsidy income

228

682

1,672

Gain on sales of property, plant and equipment

12

35

88

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (Notes 13 and 14)
Operating income
OTHER INCOME (EXPENSES):

Gain on sales of investment securities

3

Loss on sales of shares of subsidiaries

(86)

(630)

Loss on sales of property, plant and equipment(2)

Loss on disposal of property, plant and equipment

(18)

(19)

(132)

Loss on impairment of long-lived assets (Note 8)

(24)

(39)

(176)

Surrender value of insurance

56

28

410

Consignment research (loss) income

(1)

35

(7)

(14)

Gain on redemption of investment securities

34

Loss on revaluation of investment securities

(43)

(17)

(315)

Other – net

271

185

1,987

919

1,203

6,740

2,443

3,735

17,919Current

1,496

612

10,973

Deferred

(469)

281

(3,440)

1,027

893

7,533

1,416

2,841

10,386

67

27

491

Other income – net
INCOME BEFORE INCOME TAXESINCOME TAXES (Note 12):

Total income taxes
NET INCOME
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTSNET INCOME ATTRIBUTABLE TO OWNERS OF THE PARENT¥ 1,348

PER SHARE OF COMMON STOCK (Note 18):

¥ 2,814 $  9,887

Yen

Basic net income
Cash dividends applicable to the year2022

¥ 42.72¥ 89.24 $   0.31

25.00

See notes to consolidated financial statements.

7

U.S. Dollars
2023

2023

40.00

0.18

Consolidated Statement of Comprehensive Income
FURUNO ELECTRIC CO., LTD. and Consolidated Subsidiaries
Year Ended February 28, 2023

Thousands of
U.S. Dollars(Note 1)
2023

Millions of Yen
2023
2022

NET INCOME¥1,416¥2,841$10,386

OTHER COMPREHENSIVE INCOME (Note 17):
Unrealized gain on available-for-sale securities

321

180

2,354

Foreign currency translation adjustments

3,064

1,672

22,474

Defined retirement benefit plans

(460)

118

(3,374)

45

88

330

2,970

2,059

21,785¥4,386¥4,901$32,171

Owners of the parent¥4,282¥4,873$31,409

Noncontrolling interests

104

27

762

Share of other comprehensive income of an associateaccounted for by the equity method
Total other comprehensive income
COMPREHENSIVE INCOME
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO:

See notes to consolidated financial statements.

8

Consolidated Statement of Changes in Equity
FURUNO ELECTRIC CO., LTD. and Consolidated Subsidiaries
Year Ended February 28, 2023

Thousands

Millions of Yen

Number of
Shares ofCommonStockCommonOutstanding Stock

BALANCE, MARCH 1, 2021
Net income attributable to owners of the parent
Cash dividends, ¥50.0 per share
Purchase of treasury stock
Restricted-share-based compensation
Change in ownership interest of parent due
to transactions with noncontrolling interests
Net change in the year
BALANCE, FEBRUARY 28, 2022
Cumulative effects of changes inaccounting policies
RESTATED BALANCE
Net income attributable to owners of the parent
Cash dividends, ¥30.0 per share
Change in scope of consolidation
Purchase of treasury stock
Restricted-share-based compensation
Change in ownership interest of parent due
to transactions with noncontrolling interests
Net change in the year

31,523BALANCE, FEBRUARY 28, 2023

31,563¥7,534

Accumulated Other Comprehensive
IncomeUnrealized
Foreign
Gain onAvailable-for- Currency
DefinedTreasury
Translation Retirement
Sale
Securities Adjustments Benefit Plans
Stock

CapitalSurplusRetained
Earnings¥10,080¥30,914
2,814(1,576)(0)
18¥(196)¥474¥(2,930)(0)99¥(517) ¥45,359
2,814(1,576)
(0)
18

(794)
31,541

7,534

9,295

9,295

(15)
(0)
22

32,15232,753
1,348
(946)
220

(187)

180
654

1,760
(1,169)118(399)¥ 9,289

(187)

¥332

¥33,375¥(175)

2,059
47,880

Total
Equity¥45,692
2,814(1,576)
(0)
18
(794)

(332)

1,726
47,880600

600
48,481
1,348
(946)
204
(0)
21

654

(1,169)(399)

48,481
1,348
(946)
204
(0)
21

321

3,143

(460)

3,003

389

3,393

¥975

¥ 1,974¥(860) ¥52,113¥389¥52,503

Noncontrolling
Interests

Total
Equity(0)
11

9¥7,534

Noncontrolling
Interests

(794)

600
7,534

Total

Thousands of U.S. Dollars (Note 1)

CommonStockCapitalSurplusRetained
Earnings

BALANCE, FEBRUARY 28, 2022
Cumulative effects of changes inaccounting policies
RESTATED BALANCE
Net income attributable to owners of the parent
Cash dividends, $0.22 per share
Change in scope of consolidation
Purchase of treasury stock
Restricted-share-based compensation
Change in ownership interest of parent due
to transactions with noncontrolling interests
Net change in the year

$55,262$68,180 $235,839

BALANCE, FEBRUARY 28, 2023

$55,262

Accumulated Other Comprehensive
IncomeUnrealized
Foreign
Gain onCurrency
DefinedTreasury Available-for-Sale Translation Retirement
Securities Adjustments Benefit Plans
Stock$(1,371)$4,797$ (8,574)$(2,926) $351,206$351,206

4,401

4,401
355,615
9,887(6,939)
1,496
(0)
154

4,401
55,262

68,180240,247
9,887(6,939)
(110)
1,613

(1,371)

66

(0)
80

$68,136 $244,810

See notes to consolidated financial statements.

9$(1,283)

Total

4,797

(8,574)(2,926) 355,615
9,887(6,939)
1,496
(0)
154

2,354

23,054(3,374)$7,151$14,479$(6,308) $382,256

22,027$2,85324,888$2,853 $385,116

Consolidated Statement of Cash Flows
FURUNO ELECTRIC CO., LTD. and Consolidated Subsidiaries
Year Ended February 28, 2023

Millions of Yen
2023
2022

OPERATING ACTIVITIES:
Income before income taxes
Adjustments for:
Income taxes – paid
Depreciation and amortization
Loss on impairment of long-lived assets
Changes in assets and liabilities:
Decrease in trade receivables
Increase in trade receivables and contract assets
Increase in inventories
Increase in asset for retirement benefits
Increase in trade payables
Decrease in accrued product warranty costs
Increase (decrease) in liability for retirement benefits
Increase in consumption taxes receivable
Increase in contract liabilities
Increase in liabilities on chargeable supply
Other – net
Total adjustments
Net cash (used in) provided by operating activities
INVESTING ACTIVITIES:
Proceeds from sales of property, plant and equipment
Purchases of property, plant and equipment
Purchases of intangible assets
Payments for sale of shares of a subsidiary resulting in a change in scope of consolidation(Increase) decrease in other assets
Net cash used in investing activities
FINANCING ACTIVITIES:
Increase in short-term bank loans – net
Proceeds from long-term debt
Repayments of long-term debt
Dividends paid
Purchases of shares of a subsidiary not resulting in changes in scope of consolidation
Repayments of finance lease obligations
Other
Net cash provided by (used in) financing activities
FOREIGN CURRENCY TRANSLATION ADJUSTMENTS ON CASH AND CASH EQUIVALENTS
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
INCREASE IN CASH AND CASH EQUIVALENTS RESULTING FROM NEW CONSOLIDATION
INCREASE IN CASH AND CASH EQUIVALENTS RESULTING FROMMERGER OF NONCONSOLIDATED SUBSIDIARIESCASH AND CASH EQUIVALENTS, END OF YEAR
See notes to consolidated financial statements.

10¥ 2,443
(765)
3,061
24

Thousands of
U.S. Dollars(Note 1)2023

¥ 3,735 $ 17,919(1,343)
3,161
39(5,611)
22,452
176

3,414(1,769)(13,155)
(61)
2,507
(238)
1
(109)
464
712
392
(8,935)(6,492)23(1,616)
(963)
(191)
(278)
(3,027)

8,007
3,000
(1,308)
(946)
(420)
(68)
8,263
1,397
141
13,864575(3,015)
(49)
1,285
(17)
(26)
(396)

(593)
2,457
6,193

45
(3,133)(1,361)60(4,389)400(760)(1,576)(1,245)(315)(19)(3,518)774(940)
14,804(12,975)(96,493)(447)
18,389(1,745)
7
(799)
3,403
5,222
2,875
(65,539)(47,619)168(11,853)(7,063)(1,401)(2,039)(22,203)58,73222,005(9,594)(6,939)(3,080)(498)
60,610
10,247
1,034
101,694
4,217

102

748

¥14,683¥13,864 $107,701

Notes to Consolidated Financial Statements
FURUNO ELECTRIC CO., LTD. and Consolidated Subsidiaries
Year Ended February 28, 2023

1. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements have been prepared in accordance with theprovisions set forth in the Japanese Financial Instruments and Exchange Act and its related
accounting regulations and in accordance with accounting principles generally accepted in Japan(“Japanese GAAP”), which are different in certain respects as to the application and disclosure
requirements of International Financial Reporting Standards (“IFRS”).
In preparing these consolidated financial statements, certain reclassifications andrearrangements have been made to the consolidated financial statements issued domestically inorder to present them in a form which is more familiar to readers outside Japan. In addition,certain reclassifications have been made in the 2022 consolidated financial statements toconform to the classifications used in 2023.
The consolidated financial statements are stated in Japanese yen, the currency of the country
in which Furuno Electric Co., Ltd. (the “Company”) is incorporated and operates. The translationsof Japanese yen amounts into U.S. dollar amounts are included solely for the convenience ofreaders outside Japan and have been made at the rate of ¥136.33 to $1, the approximate rate ofexchange at February 28, 2023. Such translations should not be construed as representations
that the Japanese yen amounts could be converted into U.S. dollars at that or any other rate.
As permitted under the Financial Instruments and Exchange Act of Japan, figures less than
one million yen have been omitted. As a result, the totals shown in the accompanying
consolidated financial statements do not necessarily agree with the sum of the individual
amounts.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESa. Consolidation – The consolidated financial statements as of February 28, 2023 include theaccounts of the Company and its 36 significant (33 in 2022) subsidiaries (together, the“Group”).
Under the control and influence concepts, those companies in which the Company, directly
or indirectly, is able to exercise control over operations are fully consolidated, and thosecompanies over which the Group has the ability to exercise significant influence are accounted
for by the equity method.
Investments in an associated company are accounted for by the equity method.
Investments in 1 (7 in 2022) unconsolidated subsidiary and 1 (1 in 2022) associatedcompany are stated at cost. If the equity method of accounting had been applied to theinvestments in these companies, the effect on the accompanying consolidated financial
statements would not be material.
Goodwill represents the excess of the cost of an acquisition over the fair value of the net
assets of the acquired subsidiary company at the date of acquisition. Goodwill is reported in
the balance sheet and is amortized using the straight-line method over reasonably estimatedperiods (mainly 18 years) in which economic benefits are expected to be realized.
All significant intercompany balances and transactions have been eliminated inconsolidation. All material unrealized profit included in assets resulting from transactions within
the Group is also eliminated.
The fiscal year-end dates of 30 consolidated subsidiaries are different from the consolidatedbalance sheet date of February 28th or 29th. The fiscal year-end dates of FURUNO U.S.A.,
Inc., FURUNO PANAMA, S.A. and ELECTRONIC NAVIGATION LIMITED are November 30thand 27 other subsidiaries’ fiscal year-end dates are December 31st.
b. Unification of Accounting Policies Applied to Foreign Subsidiaries for the Consolidated
Financial Statements – Under Accounting Standards Board of Japan (“ASBJ”) Practical Issues
Task Force (“PITF”) No. 18, “Practical Solution on Unification of Accounting Policies Applied toForeign Subsidiaries for the Consolidated Financial Statements,” the accounting policies andprocedures applied to a parent company and its subsidiaries for similar transactions and events
under similar circumstances should in principle be unified for the preparation of the consolidated
financial statements. However, financial statements prepared by foreign subsidiaries inaccordance with either IFRS or generally accepted accounting principles in the United States ofAmerica (Financial Accounting Standards Board Accounting Standards Codification) (“U.S.
GAAP”) tentatively may be used for the consolidation process, except for the following items thatshould be adjusted in the consolidation process so that net income is accounted for in11

accordance with Japanese GAAP, unless they are not material; (a) amortization of goodwill; (b)scheduled amortization of actuarial gain or loss of pensions that has been recorded in equity
through other comprehensive income; (c) expensing capitalized development costs of R&D; (d)cancellation of the fair value model of accounting for property, plant and equipment andinvestment properties and incorporation of the cost model of accounting; and (e) recording again or loss through profit or loss on the sale of an investment in an equity instrument for thedifference between the acquisition cost and selling price, and recording impairment loss throughprofit or loss for other-than-temporary declines in the fair value of an investment in an equity
instrument, where a foreign subsidiary elects to present in other comprehensive income
subsequent changes in the fair value of an investment in an equity instrument.
c. Unification of Accounting Policies Applied to Foreign Associated Companies for the
Equity Method – ASBJ Statement No. 16, “Accounting Standard for Equity Method of
Accounting for Investments,” requires adjustments to be made to conform the associate’s
accounting policies for similar transactions and events under similar circumstances to those of
the parent company when the associate’s financial statements are used in applying the equity
method, unless it is impracticable to determine such adjustments. In addition, financial
statements prepared by foreign associated companies in accordance with either IFRS or U.S.
GAAP tentatively may be used in applying the equity method if the following items are adjusted
so that net income is accounted for in accordance with Japanese GAAP, unless they are notmaterial: (a) amortization of goodwill; (b) scheduled amortization of actuarial gain or loss ofpensions that has been recorded in equity through other comprehensive income; (c) expensing
capitalized development costs of R&D; (d) cancellation of the fair value model of accounting forproperty, plant and equipment and investment properties and incorporation of the cost model ofaccounting; and (e) recording a gain or loss through profit or loss on the sale of an investment in
an equity instrument for the difference between the acquisition cost and selling price, andrecording impairment loss through profit or loss for other-than-temporary declines in the fairvalue of an investment in an equity instrument, where a foreign associate elects to present inother comprehensive income subsequent changes in the fair value of an investment in an equity
instrument.
d. Business Combinations – Business combinations are accounted for using the purchasemethod. Acquisition-related costs, such as advisory fees or professional fees, are accounted foras expenses in the periods in which the costs are incurred. If the initial accounting for a businesscombination is incomplete by the end of the reporting period in which the business combination
occurs, an acquirer shall report in its financial statements provisional amounts for the items forwhich the accounting is incomplete. During the measurement period, which shall not exceed
one year from the acquisition, the acquirer shall retrospectively adjust the provisional amounts
recognized at the acquisition date to reflect new information obtained about facts andcircumstances that existed as of the acquisition date and that would have affected themeasurement of the amounts recognized as of that date. Such adjustments shall be recognized
as if the accounting for the business combination had been completed at the acquisition date.
The acquirer recognizes any bargain purchase gain in profit or loss immediately on theacquisition date after reassessing and confirming that all of the assets acquired and all of theliabilities assumed have been identified after a review of the procedures used in the purchaseprice allocation. A parent’s ownership interest in a subsidiary might change if the parent
purchases or sells ownership interests in its subsidiary. The carrying amount of noncontrollinginterest is adjusted to reflect the change in the parent’s ownership interest in its subsidiary while
the parent retains its controlling interest in its subsidiary. Any difference between the fair value ofthe consideration received or paid and the amount by which the noncontrolling interest is
adjusted is accounted for as capital surplus as long as the parent retains control over its
subsidiary.
e. Cash Equivalents – Cash equivalents are short-term investments that are readily convertible
into cash and exposed to insignificant risk of changes in value. Cash equivalents include time
deposits, certificates of deposit, commercial paper and bond funds, all of which mature or
become due within three months of the date of acquisition.

12

f. Allowance for Doubtful Accounts – The allowance for doubtful accounts is stated inamounts considered to be appropriate based on the Group’s past credit loss experience andan evaluation of potential losses in the receivables outstanding.
g. Inventories – Inventories are stated at the lower of cost, principally determined by the averagemethod, or net selling value.
h. Investment Securities – The Company and its domestic consolidated subsidiaries categorize
their existing securities as available-for-sale securities.
Securities other than shares, etc. that do not have a market price, are reported at fair value,with unrealized gains and losses, net of applicable taxes, reported in a separate component ofequity. The cost of securities sold is mainly calculated using the moving-average method.
Shares, etc. that do not have a market price are stated at cost, determined by the movingaverage method.
i. Property, Plant and Equipment – Property, plant and equipment are carried at cost.
Depreciation of property, plant and equipment is computed principally by the decliningbalance method, while the straight-line method is applied to building improvements andstructures acquired on or after April 1, 2016.
j. Long-Lived Assets – The Group reviews its long-lived assets for impairment whenever eventsor changes in circumstance indicate the carrying amount of an asset or asset group may not
be recoverable. An impairment loss is recognized if the carrying amount of an asset or asset
group exceeds the sum of the undiscounted future cash flows expected to result from thecontinued use and eventual disposition of the asset or asset group. The impairment loss
would be measured as the amount by which the carrying amount of the asset exceeds its
recoverable amount, which is the higher of the discounted cash flows from the continued use
and eventual disposition of the asset or the net selling price at disposition.
k. Product Warranty Costs – The Group establishes a liability for estimated product warranty
costs at the time of sale. Estimates for accrued product warranty costs are primarily based on
historical experience.
l. Significant Revenue and Expenses – The details of the main performance obligations in the
major businesses related to revenue from contracts with the Company’s customers and thetiming at which the Company typically satisfied these performance obligations (when it typicallyrecognizes revenue) are as follows:(1) “Marine” businessIn the “Marine” business, the Group mainly manufactures and sells navigation equipment,
fishing equipment and radio communication equipment, etc.
(2) “Industrial” businessIn the “Industrial” business, the Group mainly manufactures and sells medical equipment, ITS
equipment, GPS equipment, and avionics electronic equipment, etc.
(3) “Wireless LAN/Handy Terminal” businessIn the “Wireless LAN/Handy Terminal” business, the Group mainly manufactures and sells
handy terminals.
(4) “Other” businessIn the “Other” business, the Group is mainly engaged in the electromagnetic environmental
testing business.
In each business, revenue is generally recognized when these products are delivered to thecustomers or accepted by the customers, with the exception of domestic sales where revenue
is recognized upon shipment since the time period from shipment until the transfer of control
over the products to the customers is typically a short period.
For repairing services and construction contracts related to ship hulls in the marine
business, and jobbing production transactions in the industrial business, performanceobligations are deemed to be satisfied over time and revenue is recognized based on thepercentage of completion method. The outcome of construction contracts is measured based13

on the proportion of construction costs incurred by the end of the reporting period to the total
expected construction costs. In some cases, the Group may not be able to reasonably
measure the outcome of the performance obligation, but expects to recover the costs incurred
to satisfy the performance obligations. In those circumstances, the Company recognizes
revenue only to the extent of the costs incurred. For a construction contract whose
performance obligations are expected to be satisfied within a short period, the Company
applies an alternative method and recognizes revenue when the performance obligations arecompletely satisfied instead of recognizing revenue over time.
For any of the above businesses, if the delivery of products involves installation,
performance obligations are identified for the installation and delivery of products separately
and revenue is recognized as mentioned above.
m. Retirement and Pension Plans – The Company and certain consolidated subsidiaries havelump-sum severance indemnity plans, defined contribution pension plans and contributory
funded defined benefit pension plans, which are pursuant to the Japanese Welfare Pension
Insurance Law.
The Company accounts for liabilities for retirement benefits based on the projected benefit
obligations and plan assets at the balance sheet date. The projected benefit obligations are
attributed to periods on a benefit formula basis. Actuarial gains and losses are amortized on astraight-line basis over 10 years within the average remaining service period of employees
commencing from the following year after incurrence.
Certain consolidated subsidiaries adopt a simplified method under which the retirement
benefit amount required to be paid if all the employees retired on the balance sheet date isconsidered as the projected benefit obligations in computing liabilities for retirement benefits
and net periodic benefit costs.
n. Asset Retirement Obligations – An asset retirement obligation is defined as a legal obligation
imposed either by law or contract that results from the acquisition, construction, development,
and normal operation of a tangible fixed asset and is associated with the retirement of suchtangible fixed asset. The asset retirement obligation is recognized as the sum of the discounted
cash flows required for the future asset retirement and is recorded in the period in which the
obligation is incurred if a reasonable estimate can be made. If a reasonable estimate of the asset
retirement obligation cannot be made in the period the asset retirement obligation is incurred,
the liability should be recognized when a reasonable estimate of the asset retirement obligation
can be made. Upon initial recognition of a liability for an asset retirement obligation, an asset
retirement cost is capitalized by increasing the carrying amount of the related fixed asset by theamount of the liability. The asset retirement cost is subsequently allocated to expense throughdepreciation over the remaining useful life of the asset. Over time, the liability is accreted to its
present value each period. Any subsequent revisions to the timing or the amount of the original
estimate of undiscounted cash flows are reflected as an adjustment to the carrying amount of
the liability and the capitalized amount of the related asset retirement cost.
o. Research and Development Costs – Research and development costs are charged to income
as incurred.
p. Income Taxes – The provision for income taxes is computed based on the pretax income
included in the consolidated statements of income. The asset and liability approach is used torecognize deferred tax assets and liabilities for the expected future tax consequences of
temporary differences between the carrying amounts and the tax bases of assets and liabilities.
Deferred taxes are measured by applying currently enacted income tax rates to the temporary
differences.
The Group files a tax return under the consolidated corporate-tax system, which allows
companies to base tax payments on the combined profits or losses of the parent company andits wholly owned domestic subsidiaries.
q. Foreign Currency Transactions – All short-term and long-term monetary receivables andpayables denominated in foreign currencies are translated into Japanese yen at the exchange
rates at the balance sheet date. The foreign exchange gains and losses from translation arerecognized in the consolidated statements of income to the extent that they are not hedged byforward exchange contracts.
14

r. Foreign Currency Financial Statements – The balance sheet accounts of the consolidated
foreign subsidiaries are translated into Japanese yen at the current exchange rate as of thebalance sheet date except for equity, which is translated at the historical rate. Differences arisingfrom such translation were shown as “Foreign currency translation adjustments” and also
allocated to “Noncontrolling interests” in a separate component of equity. Revenue and expense
accounts of consolidated foreign subsidiaries are translated into yen at the average exchange
rate.
s. Derivatives and Hedging Activities – The Group uses derivative financial instruments tomanage exposures to fluctuations in interest rates. Interest rate swaps are utilized to reduce theinterest rate risks of long-term debt. The Group does not enter into derivatives for trading or
speculative purposes.
Derivative financial instruments are classified and accounted for as follows: a) all derivatives
are recognized as either assets or liabilities and measured at fair value, and gains or losses onderivative transactions are recognized in the consolidated statements of income; and b) for
derivatives used for hedging purposes, if such derivatives qualify for hedge accounting becauseof high correlation and effectiveness between the hedging instruments and the hedged items,
gains or losses on derivatives are deferred until maturity of the hedged transactions in principle.
The interest rate swaps which qualify for hedge accounting and meet specific matching
criteria are not remeasured at market value but the differential paid or received under the swap
agreements are recognized and included in interest expense or income.
t. Per Share Information – Basic net income per share is computed by dividing net income
attributable to common shareholders by the weighted-average number of common shares
outstanding for the period.
Cash dividends per share presented in the accompanying consolidated statements of income
are dividends applicable to the respective fiscal years, including dividends to be paid after theend of the year.
u. Changes in Accounting Policies
Accounting Standard for Revenue Recognition
The Group has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement
No. 29, March 31, 2020; hereinafter “Revenue Recognition Standard”) and other standards fromthe beginning of the reporting period. In general, the Group recognizes revenue when control ofa promised good or service is transferred to a customer in an amount that reflects theconsideration to which the Group expects to be entitled to in exchange for those goods andservices.
Specifically, when control of a promised good or service is transferred to a customer overtime, the Group recognizes revenue over time as the performance obligation to transfer a goodor service to a customer is satisfied. Measurement of the progress of satisfying a performanceobligation is based on the proportion of costs incurred by the end of the reporting period to theestimated total costs. In cases where the progress of satisfying the performance obligation
cannot be reasonably estimated at the inception of the contract, but the costs incurred are
expected to be recovered, the Group recognizes revenue to the extent of the costs incurred.
With respect to construction contracts whose construction period from the commencement of
the contract to the completion is short, revenue is not recognized over time, but instead is
recognized when the performance obligation is completely satisfied.
With respect to delivery of products involving installation, the Group identifies the performanceobligation for installation works and for delivery of products separately and recognize revenue
over time. For delivery of products, for those transactions where the time of shipment to whencontrol of the products is transferred to a customer is short, the Group recognizes revenue atthe time of shipment.
With respect to construction contracts involving ship hulls in the marine business, theCompany had previously recognized revenue at the time of delivery, but changed to the methodof recognizing revenue over time as above mentioned.
With respect to jobbing production transactions in the industrial business, the Company had
previously recognized revenue when they are completed and delivered, but also changed to themethod of recognizing revenue over time as mentioned above.
15

With respect to chargeable supply transactions, the Company had previously recognizedextinction of chargeable supplies, but changed to the method of non-extinction of thechargeable supplies when repurchase obligation exists.
The Group applies the Revenue Recognition Standard, etc. in accordance with the transitional
treatment provided in the proviso to Paragraph 84 of the Revenue Recognition Standard. The
cumulative effects of retrospectively applying the new accounting policies to prior periods areadjusted to retained earnings at the beginning of the reporting period, with the new accounting
policies applied from the beginning balance. However, the Group applies the method provided
for in provision (1) to Paragraph 86 of the Revenue Recognition Standard, and contract
modifications that occurred prior to the beginning of the year ended February 28, 2023 were
accounted for based on the terms of the contract after reflecting all contract modifications, withthe cumulative effects adjusted to retained earnings at the beginning of the year ended February
28, 2023.
As a result, compared with the amounts before applying the Revenue Recognition Standard,etc., in the consolidated balance sheet as of February 28, 2023, “Notes receivable – trade,”“Accounts receivable – trade” and “Contract assets” increased by ¥3,309 million ($24,271
thousand), and “Inventories (raw materials and supplies)” and “Other current liabilities” increasedby ¥1,790 million ($13,129 thousand), and “Inventories (merchandise and finished products andwork in process),” “Other current assets” and “Contract liabilities” decreased by ¥2,542 million($18,645 thousand), ¥238 million ($1,745 thousand) and ¥644 million ($4,723 thousand),
respectively. In the consolidated statement of income for the year ended February 28, 2023,“Net sales,” “Cost of sales,” “Operating income” and “Income before income taxes” increased by¥626 million ($4,591 thousand), ¥330 million ($2,420 thousand), ¥295 million ($2,163 thousand)and ¥349 million ($2,559 thousand), respectively.
In the consolidated statement of cash flows for the year ended February 28, 2023, “Income
before income taxes” increased by ¥349 million ($2,559 thousand), “Trade receivables andcontract assets,” “Inventories,” “Contract liabilities” and “Other – net” under “Net cash used inoperating activities” decreased by ¥291 million ($2,134 thousand), ¥1,178 million ($8,640
thousand), ¥452 million ($3,315 thousand) and ¥39 million ($286 thousand), respectively, and“Consumption taxes receivable” and “Liabilities on chargeable supply” increased by ¥44 million($322 thousand) and ¥1,568 million ($11,501 thousand), respectively.
The beginning balance of “Retained Earnings” of the consolidated statement of changes inequity as of March 1, 2022 increased by ¥600 million ($4,401 thousand) since accumulated
effects are reflected in the beginning balance of net equity as of March 1, 2022.
Impacts on per share information are included in the relevant note.
In accordance with the transitional treatment set forth in Paragraph 89-3 of the Revenue
Recognition Standard, notes pertaining to the fiscal year ended February 28, 2022 are notpresented.
Accounting Standard for Fair Value Measurement
The Group has applied the “Accounting Standard for Fair Value Measurement” (ASBJ Statement
No. 30, July 4, 2019; hereinafter “Fair Value Measurement Standard”) and other standards fromthe beginning of the reporting period, and will prospectively apply the new accounting policies
stipulated by the Fair Value Measurement Standard, etc. in accordance with the transitional
treatment provided in Paragraph 19 of the Fair Value Measurement Standard and Paragraph44-2 of the “Accounting Standard for Financial Instruments” (ASBJ Statement No. 10, July 4,2019). The impact of these changes on the consolidated financial statements for the fiscal year
ended February 28, 2023 is immaterial.
In addition, the Group will include notes on fair value information by level within the fair value
hierarchy in the notes on financial instruments. However, in accordance with the transitional
treatment provided in Paragraph 7-4 of the “Implementation Guidance on Disclosures about Fair
Value of Financial Instruments” (ASBJ Guidance No. 19, July 4, 2019), notes pertaining to theprevious period are not presented.

16

v. New Accounting Pronouncements:
Implementation Guidance on Accounting Standard for Fair ValueOn June 17, 2021, the ASBJ issued “Implementation Guidance on Accounting Standard for Fair
Value Measurement” (ASBJ Guidance No. 31).
(1) Overview
ASBJ Guidance No. 31 defines the measurement of the fair value of investment trust and its
treatment on the notes as well as the treatment concerning the notes about the fair value ofinvestments in partnerships, etc. to be recorded in a net amount of the amount equivalent to
the equity interest on the balance sheet.
(2) Date of adoption
The Company expects to adopt the implementation guidance from the beginning of the year
ending February 29, 2024.
(3) Impact of the adoption of the accounting standards, etc.
The impact of the adoption of the implementation guidance is under evaluation at the time of
preparation of the accompanying consolidated financial statements.
Accounting Standard for Current Income Taxes, etc., Accounting Standard for
Presentation of Comprehensive Income and Guidance on Accounting Standard for Tax
Effect Accounting
On October 28, 2022, the ASBJ issued the following statements and guidance:
Accounting Standard for Current Income Taxes, etc. (ASBJ Statement No. 27, October 28,
2022)
Accounting Standard for Presentation of Comprehensive Income (ASBJ Statement No. 25,
October 28, 2022)
Implementation Guidance on Accounting Standard for Tax Effect Accounting (ASBJ Guidance
No. 28, October 28, 2022)(1) Overview
These standards and guidance define the accounting classifications for current income
taxes, etc. when other comprehensive income is subject to income taxes and tax effectaccounting for sales of shares of subsidiaries when the group taxation system is applied.
(2) Date of adoption
The Group expects to adopt these accounting standards, etc. from the beginning of the year
ending February 28, 2026.
(3) Impact of the adoption of the accounting standards, etc.
The impact of the adoption of these accounting standards, etc. is under evaluation at thetime of preparation of the accompanying consolidated financial statements.
For the subsidiaries adopting U.S. GAAP;
Accounting Standard for Leases(1) Overview
The Financial Accounting Standards Board (“FASB”) issued ASU 2016-02 “Leases,” requiring
the lessee to recognize all lease assets and liabilities on the balance sheet in principle.

17

(2) Scheduled date of adoption
Certain overseas subsidiaries that apply U.S. GAAP expect to apply this accounting standard
from the beginning of the year ending February 29, 2024.
(3) Impact of the adoption of the accounting standard
The impact of the adoption of this accounting standard is under evaluation at the time of
preparation of the accompanying consolidated financial statements.

3. SIGNIFICANT ACCOUNTING ESTIMATES
Accounting estimates are recorded at the reasonable amounts computed based on information
available at the time of preparation of the consolidated financial statements.
The item whose amounts were recorded based on accounting estimates in the consolidated
financial statements for the year ended February 28, 2023 that may have a significant impact on
the consolidated financial statements for the following fiscal year is as follows:
Recoverability of deferred tax assets(1)	Amounts recorded in the consolidated financial statements for the year ended February 28,
2023
Deferred tax assets

Millions ofYen

Thousands of
U.S. Dollars¥412$3,022

The amount recorded as deferred tax assets refers to the amount after offsetting against deferred
tax liabilities and deducting valuation allowance.
(2)	Information about the details of significant accounting estimates on the identified item
Deferred tax assets are recognized to the extent that it is considered to have effects to reduce
future tax burdens through the reversal of deductible temporary differences or the offsetting oftax loss carryforwards against taxable income.
	 Recoverability of deferred tax assets is determined based on estimation of future taxable
income and tax planning. Future taxable income is estimated based on the Group’s businessplans. Forecasts of sales and cost of sales used in the business plans include significant
assumptions, such as amount of orders received and amounts of production output.
Therefore, when the assessment of recoverability of deferred tax assets changes due to any
variations in these significant assumptions, it might have an impact on the consolidated
financial statements for the following fiscal year.

4. SHORT-TERM INVESTMENTS
Short-term investments as of February 28, 2023 and 2022, consisted of the following:
Millions of Yen
2023
2022

Time deposits other than cash equivalents

¥693

¥486

Thousands of
U.S. Dollars
2023$5,083

5. RECEIVABLES FROM CONTRACTS WITH CUSTOMERS
Receivables from contracts with customers included in “Notes receivable – trade” and “Accounts
receivable – trade” as of February 28, 2023 are as follows:
Millions of
Yen

Notes receivable – trade
Accounts receivable – trade

Thousands of
U.S. Dollars¥   942 $  6,909
16,747
122,84118

6. INVESTMENT SECURITIESInvestment securities as of February 28, 2023 and 2022, consisted of the following:Thousands of
U.S. Dollars
2023

Millions of Yen
2023
2022

Non-current:
Marketable equity securities
Other
Total

¥2,162187¥2,349¥1,781199¥1,981$15,858
1,371$17,230

The costs and aggregate fair values of investment securities at February 28, 2023 and 2022,
were as follows:
February 28, 2023
Securities classified as:

Cost

Millions of Yen
Unrealized
Unrealized
Gains
LossesFair
Value

Available-for-sale:
Equity securities
Other

¥916
43

¥1,24934¥4(0)¥2,16278¥916
43¥  86932¥4¥1,78176

February 28, 2022

Securities classified as:
Available-for-sale:
Equity securities
Other

February 28, 2023
Securities classified as:

Cost

Thousands of U.S. Dollars
Unrealized
Unrealized
Gains
LossesFair
Value

Available-for-sale:
Equity securities
Other$6,718315$9,161
249

$29
(0)

$15,858
572

Available-for-sale securities whose fair value is not readily determinable as of February 28, 2023
and 2022, were as follows:
Carrying AmountThousands ofMillions of Yen
U.S. Dollars
2023
2022
2023

Available-for-sale:
Equity securities

¥109

¥123

$799

For the years ended February 28, 2023 and 2022, the Company recognized loss on revaluationof investment securities (equity securities classified as available-for-sale) in an amount of ¥43
million ($315 thousand) and ¥17 million, respectively.

19

7. INVENTORIESInventories at February 28, 2023 and 2022, consisted of the following:
Millions of Yen
2023
2022

Merchandise and finished products¥19,705

Thousands of
U.S. Dollars
2023¥14,255 $144,538

Work in process

4,229

3,955

31,020Raw materials and supplies

16,7599,482

122,929

Total¥40,694¥27,693 $298,496

8. LONG-LIVED ASSETSThe Group reviewed its long-lived assets for impairment as of February 28, 2023 and 2022. As aresult, the Group recognized impairment losses of ¥24 million ($176 thousand) and ¥39 million,
respectively, as other expenses. These impairment losses primarily related to long-lived assets of
the Marine Business and the Industrial Business for the years ended February 28, 2023 and2022 due to continuing operating losses in the divisions. Recoverable amounts of these assets
were measured in terms of the value in use. However, since future cash flows are not expected,
the value in use is calculated as zero.

9. SHORT-TERM BANK LOANS, LONG-TERM DEBT AND LEASE OBLIGATIONS
Short-term bank loans at February 28, 2023 and 2022, consisted of notes to banks and bankoverdrafts. The weighted-average interest rates applicable to the short-term bank loans were0.34% and -% at February 28, 2023 and 2022, respectively.
Long-term debt at February 28, 2023 and 2022, consisted of the following:
Millions of Yen
2023
2022

Loans from banks and insurance companies, due serially to 2028 with weighted¥11,308
average interest rates from 0.45% to 0.52% (2023) and from 0.31% to 0.49% (2022)
Less current portionLong-term debt, less current portion¥9,600

Thousands of
U.S. Dollars
2023$82,945(202)(1,300)(1,481)¥11,106¥8,300$81,464

Lease obligations with due dates leading up to March 2067 with an average interest rate of
3.06% are included in “Other long-term liabilities,” excluding current portion which is included in“Other current liabilities.”
Annual maturities of long-term debt and lease obligations at February 28, 2023, were as
follows:
Millions of Yen
Long-term
Lease
Debt
Obligations

Thousands of
U.S. Dollars
Long-term
Lease
Debt
Obligations¥   202¥  387$ 1,481$2,838

2025

3,202

309

23,487

2,266

2026

3,002

285

22,020

2,090

2027

1,402

46

10,283

337

2028

3,500

20

25,672

Year Ending February 28 or 29
2024

2029 and thereafter

218

Total

¥11,30820¥1,267

146
1,599$82,945$9,293

The carrying amounts of assets pledged as collateral for bank loans at February 28, 2023 and2022 were as follows, although there were no corresponding obligations:Thousands of
U.S. Dollars
2023

Millions of Yen
2023
2022

Land and buildings, net of accumulated depreciation

¥103

¥107

$755

As is customary in Japan, the Company maintains substantial deposit balances with bankswith which it has borrowings. Such deposit balances are not legally or contractually restricted as
to withdrawal.
General agreements with respective banks provide, as is customary in Japan, that additional
collateral must be provided under certain circumstances if requested by such banks and thatcertain banks have the right to offset cash deposited with them against any long-term or shortterm debt or obligation that becomes due and, in case of default and certain other specified
events, against all other debt payable to the banks. The Company has never been requested toprovide any additional collateral.

10. RETIREMENT AND PENSION PLANS
The Company and certain consolidated subsidiaries have severance payment plans for
employees. Under most circumstances, employees terminating their employment are entitled toretirement benefits determined based on the rate of pay at the time of termination, years ofservice and certain other factors. Such retirement benefits are made in the form of a lump-sum
severance payment from the Company or from certain consolidated subsidiaries and annuity
payments from a trustee. Employees are entitled to receive additional payments if the termination
is by voluntary retirement at earlier ages prior to the mandatory retirement age.
The Company and certain consolidated subsidiaries have contributory funded defined benefit
pension plans and unfunded retirement benefit plans for employees. Certain overseas
consolidated subsidiaries have defined retirement benefit plans or defined retirement contributionplans.
Certain consolidated subsidiaries adopt the simplified method in determining retirement benefit
obligations.
1. Defined benefit plans (including plans to which the simplified method is applied)(1)	The changes in defined benefit obligations for the years ended February 28, 2023 and2022, were as follows:
Thousands of
U.S. Dollars
2023

Millions of Yen
2023
2022

Balance at beginning of year

¥14,526¥15,100 $106,550

Current service cost

530

526

3,887

Interest cost

143

148

1,048

Actuarial losses

192

2

1,408

Benefits paid

(1,319)(1,317)(9,675)

60

65

440

OthersBalance at end of year

¥14,134

21¥14,526 $103,674

(2)	The changes in plan assets for the years ended February 28, 2023 and 2022, were as
follows:
Thousands of
U.S. Dollars
2023

Millions of Yen
2023
2022

Balance at beginning of year

¥13,030¥13,335$95,576

Expected return on plan assets

271

277

1,987

Actuarial (losses) gains

(529)

105

(3,880)Contributions from the employer

310

305

2,273

Benefits paid
Balance at end of year

(1,002)(993)(7,349)¥12,081¥13,030$88,615(3)	Reconciliations between the liability recorded in the consolidated balance sheet and thebalances of defined benefit obligations and plan assets were as follows:
Millions of Yen
2023
2022

Thousands of
U.S. Dollars
2023

Funded defined benefit obligation¥10,980 ¥11,583$80,539

Plan assets(12,081)(13,030)(88,615)

Total(1,100)(1,447)(8,068)

3,154

2,942

23,135¥2,053 ¥ 1,495$15,059

Millions of Yen
2023
2022

Thousands of
U.S. Dollars
2023

Unfunded defined benefit obligation
Net liability arising from defined benefit obligation

Liability for retirement benefits¥3,154¥2,942$23,135

Asset for retirement benefits(1,100)(1,447)(8,068)Net liability arising from defined benefit obligation¥2,053¥1,495$15,059(4)	The components of net periodic benefit costs for the years ended February 28, 2023 and2022, were as follows:
Thousands of
U.S. Dollars
2023

Millions of Yen
2023
2022

Service cost

¥530

¥526

$3,887

Interest cost

143

148

1,048

Expected return on plan assets

(271)

(277)

(1,987)

Amortization of actuarial differences

135

140

990

Amortization of prior service cost(47)

Periodic benefit cost calculated by the simplified method
OthersNet periodic benefit costs

65

60

440

46

45

337

¥646

¥602

$4,731(5)	Amounts recognized in other comprehensive income (before income tax effect) in respect ofdefined retirement benefit plans for the years ended February 28, 2023 and 2022, were as
follows:
Millions of Yen
2023
2022

Prior service costThousands of
U.S. Dollars
2023¥(47)

Actuarial differences¥(585)

243$(4,291)

Total¥(585)¥196$(4,291)22

(6)	Amounts recognized in accumulated other comprehensive income (before income tax
effect) in respect of defined retirement benefit plans as of February 28, 2023 and 2022,
were as follows:
Millions of Yen
2023
2022

Thousands of
U.S. Dollars
2023

Unrecognized actuarial differences¥1,023¥438$7,503

Total¥1,023¥438$7,503(7) Plan assets
a. Components of plan assets
Plan assets as of February 28, 2023 and 2022, consisted of the following:
2023

2022

Debt investments

43%

40%

Equity investments

24

22

Cash and cash equivalents

1

4

General account assets of life insurance

27

29

Others

5

5

Total

100%

100%

b. Method of determining the expected rate of return on plan assets
The expected rate of return on plan assets is determined by considering the long-term
rates of return which are expected currently and in the future from the various
components of the plan assets.
(8)	Assumptions used for the years ended February 28, 2023 and 2022, were set forth asfollows:
2023

2022

Discount rate

1.0%

1.0%

Expected rate of return on plan assets

2.1%

2.1%

Expected rate of salary increase

2.8%

2.8%

2. Defined contribution plans
The amount of required contribution to the defined contribution plans of the Company andcertain consolidated subsidiaries for the years ended February 28, 2023 and 2022 was ¥425
million ($3,117 thousand) and ¥293 million, respectively.

2311. EQUITY
Japanese companies are subject to the Companies Act of Japan (the “Companies Act”). The
significant provisions in the Companies Act that affect financial and accounting matters are
summarized below:(a) Dividends
Under the Companies Act, companies can pay dividends at any time during the fiscal year in
addition to the year-end dividend upon resolution at the shareholders’ meeting. Additionally,for companies that meet certain criteria including (1) having a Board of Directors, (2) having
independent auditors, (3) having an Audit & Supervisory Board, and (4) the term of service ofthe directors being prescribed as one year rather than the normal two-year term by its articles
of incorporation, the Board of Directors may declare dividends (except for dividends-in-kind)at any time during the fiscal year if the company has prescribed so in its articles ofincorporation. However, the Company does not meet all the above criteria.
Semiannual interim dividends may also be paid once a year upon resolution by the Boardof Directors if the articles of incorporation of the company so stipulate. The Companies Act
provides certain limitations on the amounts available for dividends or the purchase of treasury
stock. The limitation is defined as the amount available for distribution to the shareholders,
but the amount of net assets after dividends must be maintained at no less than ¥3 million.
(b) Increases/decreases and transfer of common stock, reserve and surplus
The Companies Act requires that an amount equal to 10% of dividends must be appropriatedas a legal reserve (a component of retained earnings) or as additional paid-in capital (acomponent of capital surplus), depending on the equity account charged upon the paymentof such dividends until the aggregate amount of legal reserve and additional paid-in capitalequals 25% of the common stock. Under the Companies Act, the total amount of additional
paid-in capital and legal reserve may be reversed without limitation. The Companies Act also
provides that common stock, legal reserve, additional paid-in capital, other capital surplus
and retained earnings can be transferred among the accounts within equity under certain
conditions upon resolution of the shareholders.
(c) Treasury stock and treasury stock acquisition rights
The Companies Act also provides for companies to purchase treasury stock and dispose ofsuch treasury stock by resolution of the Board of Directors. The amount of treasury stock
purchased cannot exceed the amount available for distribution to the shareholders which isdetermined by a specific formula. The Companies Act also provides that companies canpurchase both treasury stock acquisition rights and treasury stock.

2412. INCOME TAXESThe Company and its domestic subsidiaries are subject to Japanese national and local income
taxes which, in the aggregate, resulted in a normal effective statutory tax rate of approximately
30.6% for the years ended February 28, 2023 and 2022.
The tax effects of significant temporary differences and tax loss carryforwards which resulted indeferred tax assets and liabilities at February 28, 2023 and 2022, are as follows:
Thousands of
U.S. Dollars
2023

Millions of Yen
2023
2022

Deferred tax assets:
Unrealized profit¥1,873¥988$13,738
7,056

Liability for retirement benefits

962

905

Loss on impairment of long-lived assets

77

107

564

Inventories

701

669

5,141

Investment securities

230

221

1,687

Accrued bonuses

447

452

3,278

Accrued product warranty costs

245

313

1,797

Tax loss carryforwards (Note 2)

1,215

1,717

8,912

787

563

5,772
47,986

Other

6,542

5,940

Less valuation allowance for tax loss carryforwards (Note 2)(1,210)(1,548)(8,875)Less valuation allowance for temporary differences(4,137)(3,540)(30,345)

Total valuation allowance (Note 1)(5,347)(5,088)(39,221)

1,194

851

8,758

Accelerated depreciation in overseas subsidiaries

116

113

850

Unrealized gain on available-for-sale securities

302

243

2,215

Undistributed earnings of overseas subsidiaries

302

283

2,215

Asset for retirement benefits

327

432

2,398

Deferred tax assets
Deferred tax liabilities:

Other
Deferred tax liabilities
Net deferred tax assets (liabilities)

96

76

704

1,145

1,148

8,398

¥48

¥(296) $352

Notes:
1.	Valuation allowance increased by ¥259 million ($1,899 thousand) mainly because thevaluation allowance relating to elimination of unrealized profit increased by ¥641 million($4,701 thousand) and the valuation allowance relating to tax loss carryforwards of theCompany decreased by ¥337 million ($2,471 thousand).

25

2.	The expiration of tax loss carryforwards, the related valuation allowances and the resulting net
deferred tax assets as of February 28, 2023 and 2022 were as follows:

February 28, 2023
Deferred tax assets relating to
tax loss carryforwards *aLess valuation allowance fortax loss carryforwards
Net deferred tax assets
relating to tax loss
carryforwards

February 28, 2022
Deferred tax assets relating to
tax loss carryforwards *aLess valuation allowance fortax loss carryforwards
Net deferred tax assets
relating to tax loss
carryforwards

February 28, 2023
Deferred tax assets relating to
tax loss carryforwards *aLess valuation allowance fortax loss carryforwards
Net deferred tax assets
relating to tax loss
carryforwards

Millions of Yen
After
After
After
Two Years Three Years Four Years
throughthroughthroughThree Years Four Years Five Years

One Yearor LessAfter
One Yearthrough
Two Years

¥9

¥ 921

¥ 38

¥ 21

¥ 16

¥ 209

¥ 1,215

(9)

(921)

(38)

(21)

(16)

(203)

(1,210)After
Five Years

Total

5

Millions of Yen
After
After
After
Two Years Three Years Four Years
throughthroughthroughThree Years Four Years Five Years

5 *b

One Yearor LessAfter
One Yearthrough
Two Years

¥ 471

¥9

¥ 921

¥ 38

¥ 21

¥ 255

¥ 1,717

(353)

(9)

(921)

(38)

(21)

(203)

(1,548)117

After
Five Years

52

Thousands of U.S. Dollars
After
After
After
Two Years Three Years Four Years
throughthroughthroughThree Years Four Years Five Years

Total

169 *b

One Yearor LessAfter
One Yearthrough
Two Years$ 66$ 6,755

$ 278

$ 154

$ 117

$ 1,533$ 8,912(66)(6,755)

(278)

(154)

(117)

(1,489)(8,875)After
Five Years

36

Total

36 *b

*a	Deferred tax assets relating to tax loss carryforwards are computed by multiplying the normal
effective statutory tax rate.
*b	Net deferred tax assets recorded as of February 28, 2023 and 2022 at ¥5 million ($36
thousand) and ¥169 million are recognized for tax loss carryforwards of ¥1,215 million($8,912 thousand) and ¥1,717 million (computed by multiplying the normal effective statutory
tax rate), respectively. These deferred tax assets as of February 28, 2023 and 2022 arerecognized for tax loss carryforwards of ¥1,215 million ($8,912 thousand) and ¥1,717 million
mainly recorded by the Company and FURUNO SYSTEMS CO., LTD., which is a
consolidated subsidiary, and no valuation allowance is provided for the portion that is deemed
to be recoverable based on expected future taxable income.

26

A reconciliation between the normal effective statutory tax rates and the actual effective tax rates
reflected in the accompanying consolidated statements of income for the years ended February
28, 2023 and 2022, is as follows:
Normal effective statutory tax rate
Lower income tax rates applicable to income in certain foreign countries

2023

2022

30.6%

30.6%

(14.5)

(7.3)

3.0

0.8

Expenses not deductible for income tax purposes
Per capita inhabitant tax

1.5

0.8

Nontaxable dividends and other income

(0.6)

(0.6)

Undistributed earnings of overseas subsidiaries

0.8

1.3

Valuation allowance for deferred tax assets

8.2

(3.5)

Other – net

13.0

1.8

42.0%

23.9%

Actual effective tax rate

13. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses in the accompanying consolidated statement ofincome for the years ended February 28, 2023 and 2022, mainly consisted of the following:Thousands of
U.S. Dollars
2023

Millions of Yen
2023
2022

Employees’ salaries and wages
Employees’ bonuses¥10,785¥9,161$79,109

1,371

1,289

10,056

(0)

(3)

(0)

1,217

1,065

8,926

610

552

4,474

Provision for allowance for doubtful receivables
Provision for employees’ bonuses
Retirement benefit expenses
Travel and communication expenses

1,197

839

8,780

Depreciation and amortization

1,286

1,117

9,432

14. RESEARCH AND DEVELOPMENT COSTS
Research and development costs included in “SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES” were ¥5,694 million ($41,766 thousand) and ¥5,458 million for the years ended
February 28, 2023 and 2022, respectively.

15. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES
1. Status of financial instruments(1) Group policy for financial instruments
The Group raises necessary funds to support its principal business plans to produce andsell marine electronic equipment and industrial electronic equipment. Cash surpluses, ifany, are invested in low-risk financial assets. Short-term bank loans are used to fundongoing operations. Derivatives are not used for speculative purposes, but to manage
exposure to financial risks as described below.
(2) Nature and extent of risks arising from financial instruments
Trade receivables, such as notes receivable and accounts receivable, are exposed tocustomer credit risk.
Foreign currency denominated trade receivables arising from global activities are exposedto the market risk of fluctuations in foreign currency exchange rates.
Investment securities, mainly equity instruments of customers and suppliers of the Group
held for business or capital alliance purposes, are exposed to the risk of market pricefluctuation.
Payment terms of trade payables, such as notes payable and accounts payable, are lessthan one year. Certain trade payables arising from import of raw materials, which are27

denominated in foreign currencies, are exposed to the market risk of fluctuations in foreign
currency exchange rates.
Maturities of bank loans, mainly for the purpose of financing necessary working funds, areless than four years after the balance sheet date. Certain bank loans are exposed to themarket risk of fluctuations in variable interest rates. Those risks are mitigated by using
derivatives such as interest rate swaps.
Derivatives mainly consist of interest rate swaps which are used to avoid or mitigate themarket risks from changes in interest rates. For hedging instruments and hedged items
concerning hedge accounting and hedging policies and hedge effectiveness, please see
Note 2.s “Derivatives and Hedging Activities” under “SUMMARY OF SIGNIFICANTACCOUNTING POLICIES.”(3) Risk management for financial instruments
Credit Risk Management
Credit risk is the risk of economic loss arising from a counterparty’s failure to repay orservice debt according to the contractual terms.
The Company manages its credit risk from trade receivables by monitoring payment
terms and balances of major customers and identifying the default risk of counterparties at
an early stage in accordance with the credit control policy. The consolidated subsidiaries
have similar control policies pursuant to the Company’s credit control policy. Derivatives areentered into with only high-credit rating financial institutions and, accordingly, credit risk
arising from default of the counterparties is kept at a minimum. The maximum credit risk
exposure of financial assets as of the consolidated balance sheet date is represented bytheir carrying values exposed to credit risk.
Market Risk Management (foreign exchange risk and interest rate risk)
The Group hedges foreign currency trade receivables and payables against market risk
from fluctuations in foreign currency exchange rates identified by currency and by monthusing principally forward foreign currency contracts. Depending on exchange market
conditions, the Group makes forward foreign currency contracts for foreign currency tradereceivables and payables that are certainly expected to occur. In addition, the Grouputilizes interest rate swaps to mitigate the risk from changes in interest rates associatedwith bank loans.
Investment securities are managed by monitoring market values and financial position ofissuers on a regular basis and continuously reviewing the holding status by taking into
consideration the relationship with the counterparties.
Derivative transactions are executed and controlled based on internal guidelines, whichprescribe the transaction limits and procedures of the finance department of eachcompany, and the positions are identified on a regular basis. In addition, the responsible
division of the Company is informed of the status of transactions by each Group company
on a regular basis to control and confirm the positions.
Liquidity Risk Management
Liquidity risk comprises the risk that the Group cannot meet its contractual obligations infull on maturity dates.
The Group manages its liquidity risk by preparing and updating the financial plans of the
Accounting Department based on the reports from each division.
(4) Supplementary explanation about fair values of financial instruments
In determining fair values of financial instruments, variable factors are incorporated andtherefore, such values may change by adopting different presumptions.

28

2. Fair value of financial instruments
Millions of Yen

February 28, 2023
Investment securities:

Carrying Amount

Available-for-sale securities
Total assets
Long-term debt, including current portion
Total liabilities
Derivatives (*3)

Fair Value

Unrealized Gain

¥2,240¥2,240¥2,240¥2,240¥11,308¥11,287¥(20)¥11,308¥11,287

¥(20)

¥21

¥21
Millions of Yen

February 28, 2022
Investment securities:

Carrying Amount

Available-for-sale securities
Total assets
Long-term debt, including current portion
Total liabilities
Derivatives (*3)

Fair Value

Unrealized Gain

¥1,858¥1,858¥1,858¥1,858¥9,600¥9,572¥(27)¥9,600¥9,572¥(27)¥   12¥   12Thousands of U.S. Dollars

February 28, 2023
Investment securities:

Carrying Amount

Available-for-sale securities
Total assets
Long-term debt, including current portion
Total liabilities
Derivatives (*3)

Fair Value

Unrealized Gain

$16,430$16,430$16,430$16,430$82,945$82,791$(146)$82,945$82,791$(146)$   154$   154*1 “Cash and cash equivalents,” “Notes receivable – trade,” “Accounts receivable – trade,” “Electronically recorded receivables –operating,” “Notes payable – trade,” “Accounts payable – trade,” “Electronically recorded obligations – operating” and “Shortterm bank loans” are omitted as they either comprise cash or are settled in a short period, and their carrying amountapproximates their fair value.
*2 Shares that do not have a market price, etc. as of February 28, 2023 and financial instruments whose fair value cannot be reliably
determined as of February 28, 2022, which are not included in “Investment securities,” are as follows:
Carrying AmountThousands ofMillions of Yen
U.S. Dollars
February 28
2023
2022
2023
Unlisted equity securities¥847¥1,322$6,212*3 Net receivables or payables arising from derivative transactions to which hedge accounting is not applied and deferral hedge
accounting is applied are presented in a net amount, and net payables are presented in parentheses.

29

(Note) Maturity analysis for financial assets and securities with contractual maturities
Millions of Yen
Due in One Year Due after One Year Due after Five Yearsor Less
through Five Years through Ten Years¥14,683

February 28, 2023
Cash and cash equivalents
Short-term investments

Due after
Ten Years

693

Notes receivable – trade942

Accounts receivable – trade

16,747

Electronically recorded receivables – operating

1,076

Total

¥34,142Millions of Yen
Due in One Year Due after One Year Due after Five Yearsor Less
through Five Years through Ten Years¥13,864

February 28, 2022
Cash and cash equivalents
Short-term investments

Due after
Ten Years

486

Notes receivable – trade988

Accounts receivable – trade

14,092

Electronically recorded receivables – operating

1,617

Total

¥31,048
Thousands of U.S. Dollars
Due in One Year Due after One Year Due after Five Yearsor Less
through Five Years through Ten Years$107,701

February 28, 2023
Cash and cash equivalents
Short-term investments

Due after
Ten Years

5,083

Notes receivable – trade

6,909

Accounts receivable – trade122,841

Electronically recorded receivables – operating

7,892

Total

$250,436

Please see Note 9 for annual maturities of long-term debt.

3. Fair value information by level within the fair value hierarchy
The fair value of financial instruments is classified into the following three levels according to theobservability and materiality of inputs used to measure fair value.
Level 1 fair value: Fair value measured using observable inputs, i.e. quoted prices in active
markets for assets or liabilities that are the subject of the measurement.
Level 2 fair value: Fair value measured using observable inputs other than Level 1 inputs.
Level 3 fair value: Fair value measured using unobservable inputs.
If multiple inputs are used that are significant to the fair value measurement, the fair value
measurement is categorized in its entirety in the level of the lowest level input that is significant
to the entire measurement.

30

(1) Financial instruments measured at fair value
Millions of Yen
Fair Value

February 28, 2023
Investment securities:

Level 1

Level 2

Level 3

Total

Available-for-sale securities:
Equity securities
Other¥2,162¥2,162

78

78

Derivatives:
Currency related
Total assets¥2,240

¥21

21

¥21

¥2,261¥ 0¥    0¥ 0¥    0Derivatives:
Currency related
Total liabilities

Thousands of U.S. Dollars
Fair Value

February 28, 2023
Investment securities:

Level 1

Level 2

Level 3

Total

Available-for-sale securities:
Equity securities
Other$15,858$15,858572

572

Derivatives:
Currency related
Total assets$16,430

$154

154

$154

$16,584$  0$     0$  0$     0Derivatives:
Currency related
Total liabilities(2) Financial instruments other than those measured at fair value
Millions of Yen
Fair Value

February 28, 2023
Long-term debt

Level 1

Total liabilities

Level 2

Level 3

Total

¥11,287¥11,287¥11,287¥11,287

Thousands of U.S. Dollars
Fair Value

February 28, 2023
Long-term debt

Level 1

Total liabilities

Level 2

Level 3

Total

$82,791$82,791$82,791$82,791(Note) A description of the valuation technique(s) and inputs used in the fair value measurements
Investment securities
The fair value of listed shares and investment trust is measured using quoted prices. The fair value is classified as Level 1
as they are traded in active markets.
Derivatives
The fair value of derivatives is determined based on the prices presented by the financial institutions as counterparties andclassified as Level 2.

31

Long-term debt
The fair value of long-term debt is measured by discounting the sum of the principal and interest using the remaining life of
the debt and interest rate reflecting credit risk and classified as Level 2.

16. DERIVATIVESThe Group enters into foreign currency forward contracts to hedge foreign exchange risk
associated with certain assets and liabilities denominated in foreign currencies. The Group also
enters into interest rate swap contracts to manage its interest rate exposures on certain liabilities.
All derivative transactions are entered into to hedge interest and foreign currency exposuresincorporated within the Group’s business. Accordingly, market risk in these derivatives is basicallyoffset by opposite movements in the value of hedged assets or liabilities.
Because the counterparties to these derivatives are limited to major international financial
institutions, the Group does not anticipate any losses arising from credit risk.
Derivative transactions entered into by the Group have been made in accordance with internal
policies which regulate the authorization and credit limit amount.
Derivative transactions to which hedge accounting is not applied at February 28, 2023 and2022(1) Currency-related derivatives
Contract
AmountFebruary 28, 2023
Foreign currency forward contracts:

Selling NOK¥ 16Millions of Yen
Contract AmountDue after One Year Fair Value

Unrealized
Gain (Loss)

¥ 0

¥ 0

Buying USD

1

0

0

GBP

601

21

21

EUR

57

(0)

(0)

Selling EUR

¥116

¥ 1

¥ 1

Buying GBP

575

11

11

Thousands of U.S. Dollars
Contract AmountDue after One Year Fair Value

Unrealized
Gain (Loss)

February 28, 2022

Foreign currency forward contracts:

Contract
AmountFebruary 28, 2023
Foreign currency forward contracts:

Selling NOK$  117$  0$  0

Buying USD

7

0

0

GBP

4,408

154

154

EUR

418

(0)

(0)

32

Derivative transactions to which hedge accounting is applied at February 28, 2023 and
2022(1) Interest-related derivatives
February 28, 2023
Interest rate swaps:
Receivable floating rate/Payable fixed rate

Hedged Item

Long-term
debt

February 28, 2022
Interest rate swaps:
Receivable floating rate/Payable fixed rate

Hedged Item

Long-term
debtMillions of Yen
Contract
Contract AmountAmountDue after One Year

¥2,700Millions of Yen
Contract
Contract AmountAmountDue after One Year

¥2,700Thousands of U.S. Dollars
Contract
Contract Amount
Hedged Item
AmountDue after One Year

February 28, 2023
Interest rate swaps:
Receivable floating rate/Payable fixed rateLong-term
debt$19,804

Fair Value

Note 1

Fair Value

Note 1

Fair Value

Note 1(Note 1) The fair values of interest rate swaps, which are accounted for together with the long-term debt as the hedged item, areincluded in the fair values of the relevant long-term debt, if they qualify for hedge accounting.

33

17. OTHER COMPREHENSIVE INCOME
The components of other comprehensive income for the years ended February 28, 2023 and2022, were as follows:
Thousands of
U.S. Dollars
2023

Millions of Yen
2023
2022

Unrealized gain on available-for-sale securities:¥423¥  261

Reclassification adjustments to profit or loss

(43)

(20)

(315)

Amount before income tax effect

380

241

2,787

Gains arising during the year

Income tax effectTotal$3,102

(59)

(60)

(432)

¥ 321¥  180$2,354¥3,064¥1,672$22,474

3,064

1,672

22,474¥3,064¥1,672$22,474

Foreign currency translation adjustments:
Adjustments arising during the year
Reclassification adjustments to profit or loss
Amount before income tax effect
Income tax effect
Total
Defined retirement benefit plans:
Adjustments arising during the year¥(721)¥  103$(5,288)

Reclassification adjustments to profit or loss

135

92

990

Amount before income tax effect

(585)

196

(4,291)

Income tax effect

124

(77)

909

¥ (460)¥  118$(3,374)¥45¥   88

$330

Total

¥

45

¥   88$330

Total other comprehensive income¥2,970¥2,059$21,785

Total
Share of other comprehensive income in an associate accounted for by the equity method —Gains arising during the year34

18. NET INCOME PER SHARE
The financial data for the computation of basic net income per share for the years ended
February 28, 2023 and 2022, is as follows:
Thousands
Millions of Yenof Shares
Net Income Attributable
Weightedto Owners of the Parent Average Shares

Yen

U.S. Dollars
EPS

Year ended February 28, 2023:
Basic earnings per share (EPS)
Net income available to common shareholders¥1,34831,555¥42.72¥2,814

31,534¥89.24$0.31

Year ended February 28, 2022:
Basic earnings per share (EPS)
Net income available to common shareholders

Diluted EPS is not disclosed because the Company did not issue dilutive securities for the years
ended February 28, 2023 and 2022.
As disclosed in “Changes in accounting policies,” the Group applied the Revenue Recognition
Standard, etc. from the consolidated financial statements for the year ended February 28, 2023.
As a result, net income per share increased by ¥18.11 ($0.13) for the year ended February 28,
2023.

19. SUBSEQUENT EVENTSAppropriations of Retained Earnings
The following appropriation of retained earnings at February 28, 2023, was approved at theCompany’s shareholders’ meeting held on May 25, 2023:
Year-end cash dividends, ¥15 ($0.11) per share

Millions ofYen

Thousands of
U.S. Dollars¥473$3,469Business Combination by Acquisition
The Company decided at a meeting of its Board of Directors held on June 21, 2023 to have
FURUNO FRANCE S.A.S., a consolidated subsidiary, acquire all shares of SARL ROBIN MARINE
to make it a subsidiary. FURUNO FRANCE S.A.S. concluded a share transfer agreement on July4, 2023 and acquired all shares of SARL ROBIN MARINE on the same date.
1. Outline of the business combination(1) Name of the acquired company and its business
SARL ROBIN MARINE
Name of the acquired company:
Business of the acquired company: Sales and services of marine electronic equipment(2) Main reasons for the business combination
SARL ROBIN MARINE has sales and technological capacity to design systems and installand perform maintenance of equipment with high level of expertise. The Company decided
to acquire SARL ROBIN MARINE, which had many contracts directly with shipbuilders, withexpectations that the acquisition would produce complementary and synergetic effects withFURUNO FRANCE S.A.S.
(3) Date of the business combination
July 4, 2023
(4) Legal form of the business combination
Share acquisition by cash(5) Ratio of voting rights after the acquisition
100.00%(6) Basis for determining the acquirer
It is based on the fact that FURUNO FRANCE S.A.S. acquired shares of the acquiredcompany by cash.
35

2. Acquisition cost and its details
Millions ofYen

Thousands of
U.S. Dollars

Cash

¥527

$3,868

Total acquisition cost

¥527

$3,8683. Major acquisition-related costs
Advisory fees, etc.: ¥9 million ($66 thousand)
4.	Amount of goodwill incurred, reason for the goodwill incurred, and the method and period ofamortization
They have not been determined yet.
5.	Amount and details of assets acquired and liabilities assumed on the business combination
date
They have not been determined yet.

20. REVENUE RECOGNITION
1. Disaggregation of revenue from contracts with customers
Millions of Yen

Year ended February 28, 2023
Japan

MarineReportable Segment
Wireless LAN/
Industrial Handy Terminal

Total¥19,337¥ 8,727¥32,219¥4,155

Other(Note)

¥341

Total

¥32,561

Americas

9,893

20

9,913

9,913

Europe22,6991,326

24,02524,025

Asia

18,163

1,028

19,192

19,192Other regions
Revenue arising from contracts with customers
Other revenue
Sales to external customers

5,319¥75,412

5,319¥11,102¥4,155313¥90,670

5,319
¥341

313

¥75,725¥11,102¥4,155

MarineReportable Segment
Wireless LAN/
Industrial Handy Terminal¥90,983¥91,012313¥341¥91,325

Thousands of U.S. Dollars

Year ended February 28, 2023
Japan

$141,839$64,013

Total$30,477 $236,330

Other(Note)

Total$2,501 $238,839

Americas72,566

146

72,71372,713

Europe166,500

9,726

176,226

176,226

Asia

133,2287,540

140,776

140,776

Other regions

39,01539,01539,015$81,434$30,477 $665,077$2,501 $667,586

2,295

2,295

$30,477 $667,373$2,501 $669,881

Revenue arising from contracts with customers $553,157
Other revenue
Sales to external customers

2,295$555,453$81,434(Note) “Other” includes the electromagnetic environmental testing business, etc. which do not belong to any reportable segment.

2. Basic information for understanding revenue from contracts with customers
Basic information for understanding revenue from contracts with customers is as described in
Note 2.l “Significant Revenue and Expenses.”36

3.	Reconciliation of satisfaction of performance obligations within contracts with customers andcash flows arising from such contracts, and the amount and timing of revenue arising from
customers existing at the end of the reporting period that are expected to be recognized in orafter the following reporting period(1) Balance of contract assets and contract liabilities
February 28, 2023
Receivables from contracts with customers (beginning balance)

Millions ofYen

Thousands of
U.S. Dollars¥15,080 $110,613

Receivables from contracts with customers (ending balance)

17,689129,751

Contract assets (beginning balance)

3,017

22,130Contract assets (ending balance)

3,847

28,218Contract liabilities (beginning balance)

2,526

18,528Contract liabilities (ending balance)

2,756

20,215Contract assets are primarily related to the unbilled rights of the Group concerning
considerations for revenue recognized in accordance with the satisfaction of performanceobligations and are reclassified to receivables from contracts with customers when the rights
of considerations become billable.
Contract liabilities are primarily related to advances received from customers. Contract
liabilities are reversed as revenue is recognized. In the consolidated balance sheet, contract
liabilities are included in “Other” under current liabilities.
Revenue recognized in the fiscal year ended February 28, 2023 that was included in thecontract liability balance at the beginning of the period was ¥2,293 million ($16,819
thousand). There was no significant change in the balances of contract assets and contract
liabilities.
The amount of revenue recognized in the fiscal year ended February 28, 2023 fromperformance obligations that were satisfied (or partially satisfied) in previous periods is
immaterial (primarily related to changes in transaction prices).
(2) Transaction prices allocated to the remaining performance obligations
The Group has applied the practical expedient on contracts with an original expected
duration of one year or less for the purpose of this note “Transaction prices allocated to theremaining performance obligations,” and has not included such contracts in this note. The
total amount of transaction prices allocated to the remaining performance obligations by theBusiness is as follows: These contracts are expected to be recognized as revenue withinapproximately two years.
Year ended February 28, 2023
Marine BusinessIndustrial BusinessWireless LAN/Handy Terminal BusinessMillions ofYen

Thousands of
U.S. Dollars¥ 8,251$60,522

4,025

29,5231

7¥12,278$90,060

Other
Total

37

21. SEGMENT INFORMATION
Under ASBJ Statement No. 17, “Accounting Standard for Segment Information Disclosures,” andASBJ Guidance No. 20, “Guidance on Accounting Standard for Segment Information
Disclosures,” an entity is required to report financial and descriptive information about its
reportable segments. Reportable segments are operating segments or aggregations of operating
segments that meet specified criteria. Operating segments are components of an entity about
which separate financial information is available and such information is evaluated regularly by thechief operating decision maker in deciding how to allocate resources and in assessing
performance. Generally, segment information is required to be reported on the same basis as isused internally for evaluating operating segment performance and deciding how to allocate
resources to operating segments.
1. Description of reportable segments
The Group’s reportable segments are those for which separate financial information isavailable and regular evaluation by the Company’s management is being performed inorder to decide how resources are allocated among the Group.
The principal business of the Group is manufacturing and sales of marine equipment,
industrial electronics equipment, wireless LAN system and handy terminals. The Company
consists of divisions separated by product and service, and each division designs
comprehensive strategies for its products and services and develops relevant businessactivities. Each subsidiary develops business activities from a management perspective
within the Group. Accordingly, the Group consists of business segments by product andservice, which are the “Marine” business, the “Industrial” business, and the “Wireless LAN/
Handy Terminal” business, as the reportable segments.
The major products in the “Marine” business are navigation equipment, fishingequipment and radio communication equipment, etc. The major products in the “Industrial”
business are medical equipment, ITS equipment, GPS equipment, and avionics electronicequipment, etc. The major products in the “Wireless LAN/Handy Terminal” business arewireless LAN system and handy terminals, etc.
2.	Methods of measurement for the amounts of sales, profit, assets, liabilities and other items
for each reportable segment
The accounting policies of each reportable segment are consistent with those disclosed in
Note 2 “SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.”
Segment profit corresponds to the figure based on “operating income” in the
consolidated statement of income.
Intersegment sales or transfers are based on the arm’s-length price.
As disclosed in Note 2.u “Changes in Accounting Policies,” the Group applied the
Revenue Recognition Standard, etc. from the consolidated financial statements for thereporting period, and changed the accounting method for revenue recognition. Accordingly,
the Group also changed the method for calculating segment profit or loss of operating
segments. As a result of this change, compared with the previous method, net sales
increased by ¥450 million ($3,300 thousand) and segment profit increased by ¥366 million($2,684 thousand) in the “Marine” business segment; net sales increased by ¥139 million($1,019 thousand) and segment profit decreased by ¥96 million ($704 thousand) in the“Industrial” business segment; and net sales increased by ¥36 million ($264 thousand) andsegment profit increased by ¥25 million ($183 thousand) in the “Wireless LAN/Handy
Terminal” business segment in the reporting period.

38

3. Information about sales, profit, assets, liabilities and other items:
Millions of Yen
2023

MarineReportable Segment
Wireless LAN/
Industrial Handy Terminal

Other(Note 1)

Total

Reconciliations Consolidated(Note 2)
(Note 3)

Total

Sales:
Sales to external customers ¥75,725 ¥11,102
Intersegment sales
or transfers

50

58¥4,155 ¥90,983
216¥  341 ¥91,325

324

607

¥ 91,325932 ¥  (932)

Total¥75,776 ¥11,161¥4,371 ¥91,308¥  948 ¥92,257 ¥  (932)¥ 91,325

Segment profit (loss)¥ 1,248 ¥   128¥  514 ¥ 1,891¥  (88) ¥ 1,803 ¥  (279)¥  1,523

Segment assets

66,653

9,099

3,653

79,406

1,026

80,433

2,306

160

173

2,640

37

2,677

25,963 106,396

Other:
Depreciation

383

3,061

Equity in earnings of an
associate accounted forby the equity method

86

86

86

86

Investment of an associateaccounted for by theequity method

219

219

219

219

Increase in property,
plant and equipment
and intangible assets

1,503

198

106

1,808

11

1,819

387

2,207

Millions of Yen
2022

MarineReportable Segment
Wireless LAN/
Industrial Handy Terminal

Other(Note 1)

Total

Reconciliations Consolidated(Note 2)
(Note 3)

Total

Sales:
Sales to external customers ¥70,535 ¥10,381
Intersegment sales
or transfers

22

45¥3,552 ¥84,469
163

231

¥  313 ¥84,783
534¥84,783765 ¥  (765)

Total¥70,557 ¥10,427¥3,716 ¥84,701¥  847 ¥85,549 ¥  (765) ¥84,783

Segment profit (loss)¥ 2,772 ¥(23)¥  446 ¥ 3,195¥(359) ¥ 2,836 ¥  (304) ¥ 2,532

Segment assets

51,191

7,940

3,155

62,287

1,058

63,346

22,62685,973

2,366

163

158

2,689

49

2,738

423

3,161

Other:
Depreciation
Equity in earnings of an
associate accounted forby the equity method

89

89

89

89

Investment of an associateaccounted for by theequity method

219

219

219

219

Increase in property,
plant and equipment
and intangible assets

1,698

228

145

39

2,072

75

2,147

2,522

4,670

Thousands of U.S. Dollars
2023

MarineReportable Segment
Wireless LAN/
Industrial Handy Terminal

Total

Other
(Note 1)

Reconciliations Consolidated(Note 2)
(Note 3)

Total

Sales:
Sales to external customers $555,453 $81,434 $30,477 $667,373$2,501 $669,881

Intersegment sales
or transfers

4,452

366

425

1,584

2,376

$669,881

6,836 $(6,836)

Total$555,827 $81,867 $32,061 $669,757$6,953 $676,718 $(6,836)$669,881

Segment profit (loss)$  9,154 $   938 $ 3,770 $ 13,870$ (645)$ 13,225 $(2,046)$ 11,171

Segment assets

488,909

66,742

26,795 582,454

16,914

1,173

1,268

7,525 589,987 190,442 780,429

Other:
Depreciation

19,364271

19,6362,809

22,452Equity in earnings of an
associate accounted forby the equity method

630

630

630

630

Investment of an associateaccounted for by theequity method

1,606

1,606

1,606

1,606

Increase in property,
plant and equipment
and intangible assets

11,0241,452

777

13,26180

13,342

2,838

16,188Notes:
1.	“Other” is a business segment which is not included in reportable segments and includes the electromagnetic environmental
testing business and other businesses.
2.	The nature of “Reconciliations” is as follows:(1)	“Reconciliations” of “Segment profit (loss)” includes general and administrative expenses of the head office administration
departments which do not belong to any reportable segment.
(2)	“Reconciliations” of “Segment assets” includes assets of the head office administration departments, which do not belong to
any reportable segment, mainly consisting of common use assets, investments and other assets.
(3)	“Reconciliations” of “Increase in property, plant and equipment and intangible assets” includes capital investments, which do
not belong to any reportable segment.
3. Segment profit (loss) is reconciled with operating income in the consolidated statement of income.

Other Related Information:
1. Information by product and service
	Information by product and service is omitted since similar information is disclosed in thesegment information.
2. Information by geographic region(1) Sales
Millions of Yen
2023
Japan

¥32,561

Americas¥9,913

EuropeAsia¥24,338¥19,192

Other Regions¥5,319Total¥91,325

Millions of Yen
2022
Japan

¥31,904

Americas¥9,184

EuropeAsia¥21,808¥17,725

Other Regions¥4,159

Total¥84,783

Thousands of U.S. Dollars
2023
Japan

$238,839

Americas$72,713

Europe$178,522

Asia$140,776

Other Regions$39,015

Note: Sales are classified by country or region based on the location of customers.

40

Total

$669,881

(2) Property, plant and equipment
Millions of Yen
2023
Japan

¥10,243

Americas

Europe¥520

Asia¥1,727

Other Regions¥1,214

Total

¥209

¥13,914

Millions of Yen
2022
Japan

¥10,402

Americas

Europe¥453

Asia¥1,649Other Regions

Total

¥894

¥13,400

Thousands of U.S. Dollars
2023
Japan

$75,133

Americas$3,814

EuropeAsia$12,667$8,904

Other Regions$1,533

Total$102,061

3. Information by major customer
	Information by customer is omitted, since there is no customer to whom net sales
accounts for more than 10% of total net sales recorded in the consolidated statement ofincome.
4. Information about loss on impairment of long-lived assets
Millions of Yen
2023

MarineLoss on impairment¥8

Reportable Segment
Wireless LAN/
Industrial Handy Terminal

¥16

Total

Other

¥24

Total

Reconciliations

¥24

Total

¥24

Millions of Yen
2022

MarineLoss on impairment¥14

Reportable Segment
Wireless LAN/
Industrial Handy Terminal

¥24

Total

Other

¥39

Total

Reconciliations

¥39

Total

¥39

Thousands of U.S. Dollars
2023

MarineLoss on impairment$58

Reportable Segment
Wireless LAN/
Industrial Handy Terminal

$117

Total

$176

41

Other

Total

$176

Reconciliations

Total

$176

5. Information about amortization and unamortized balance of goodwill
Millions of Yen
2023

MarineReportable Segment
Wireless LAN/
Industrial Handy Terminal

Total

Other

Total

Reconciliations

Total

Amortization

¥115

¥115

¥115

¥115

Unamortized balance

819

819

819

819

Millions of Yen
2022

MarineAmortization¥ 98

Unamortized balance

778

Reportable Segment
Wireless LAN/
Industrial Handy Terminal

¥25

Total

Other

Total

Reconciliations

Total

¥124

¥124

¥124

778

778

778

Thousands of U.S. Dollars
2023

MarineReportable Segment
Wireless LAN/
Industrial Handy Terminal

Total

Other

Total

Reconciliations

Total

Amortization$  843$  843$  843$  843

Unamortized balance

6,007

6,007

6,007

6,007

22. SUPPLEMENTARY INFORMATION TO THE CONSOLIDATED STATEMENTS OF CASH FLOWS
1.	Major components of assets and liabilities of consolidated subsidiary disposed of by sale ofsharesThe Company sold its shares of FURUNO EURUS LLC. As a result, FURUNO EURUS LLC was
excluded from the scope of consolidation.
The assets and liabilities of FURUNO EURUS LLC at the time of sales and a reconciliation
between the selling price and the payment for the sales of shares are as follows:
February 28, 2023
Current assets

Millions ofYen

Thousands of
U.S. Dollars¥879$6,447

Long-lived assets

27

198

Current liabilities(571)(4,188)Long-term liabilities

(13)

(95)

Foreign currency translation adjustments

(4)

(29)

Loss on sales of shares

(79)

(579)

¥239

$1,753(204)(1,496)

Selling priceNon-trade receivables
Other

(12)

(88)

Cash and cash equivalents(215)(1,577)¥(192)$(1,408)

Net payment for sales of shares resulting in a change in scope of consolidation42

2. Description of significant transactions not requiring use of cash or cash equivalents
Former unconsolidated subsidiaries FURUNO (DALIAN) TECHNOLOGY CO., LTD.,
ELECTRONIC NAVIGATION LIMITED, FUNOTEC (DALIAN) CO., LTD., TELKO AS and TELKOINTERNATIONAL AB have been included in the scope of consolidation from the fiscal year
ended February 28, 2023 due to their increased significance. The amounts of increase in
assets and liabilities as a result of the inclusion of the subsidiaries in the scope of consolidation
were as follows:
February 28, 2023
Current assets

Long-lived assets

Millions ofYen

Thousands of
U.S. Dollars¥1,829$13,415

370

2,714

Total assets¥2,200$16,137

Current liabilities¥  895$ 6,564

Long-term liabilities

172

1,261

¥1,068$ 7,833

Total liabilities

Current assets included ¥575 million ($4,217 thousand) of Cash and cash equivalents at the
beginning of consolidation, which is presented under “INCREASE IN CASH AND CASH
EQUIVALENTS RESULTING FROM NEW CONSOLIDATION.”******

43

Subsidiaries
As of February 28, 2023

Consolidated Subsidiaries

EquityOwnership (%)

Country

Company Name

Main BusinessJapan

KYORITSU RADIO SERVICE CO., LTD.
FURUNO KYUSHU HANBAI CO., LTD.
FURUNO KANSAI HANBAI CO., LTD.
FURUNO SYSTEMS CO., LTD.
FURUNO LIFEBEST CO., LTD.
LABOTECH INTERNATIONAL CO., LTD.

Clearing of communication charges
Sales and services of marine electronic equipment
Sales and services of marine electronic equipment
Sales of industrial electronic products
Insurance agent and leasing of marine electronic equipment
EMC and environmental test laboratory

100
100
100
100
100
100

U.S.A.

FURUNO U.S.A., INC.

Sales and services of marine electronic equipment

100

U.K.

FURUNO (UK) LTD.
FURUNO LEASING LTD.

Sales and services of marine electronic equipment
Leasing and sales of marine electronic equipment

100
100

Germany

FURUNO DEUTSCHLAND GmbH

Sales and services of marine electronic equipment

100

Holland

FURUNO EUROPE B. V.

Logistic services for Europe

100

Denmark

FURUNO DANMARK A/SEMRI A/S

Sales and services of marine electronic equipment
Sales and services of marine electronic equipment

100
100

SwedenFURUNO SVERIGE ABTELKO INTERNATIONAL AB

Sales and services of marine electronic equipment
Sales and services of marine electronic equipment

100
51

PolandFURUNO POLSKA Sp. zo. o.

Sales and services of marine electronic equipment

100

FranceFURUNO FRANCE S.A.S.

Sales and services of marine electronic equipment

100

Italy

FURUNO ITALIA S.R.L.

Sales and services of marine electronic equipment

100

Spain

FURUNO ESPAÑA, S.A.

Sales and services of marine electronic equipment

70

NorwayFURUNO NORGE A/STELKO AS

Sales and services of marine electronic equipment
Manufacturing of marine electronic equipment

100
51

GreeceFURUNO HELLAS S.A.

Sales and services of marine electronic equipment

100

CyprusFURUNO (CYPRUS) LTD

Sales and services of marine electronic equipment

100

Finland

FURUNO FINLAND OYSales and services of marine electronic equipment

100

China

FURUNO HONG KONG CO., LTD.
FURUNO CHINA CO., LIMITEDFURUNO SHANGHAI CO., LTD.
FURUNO (DALIAN) TECHNOLOGY CO., LTD.
FUNOTEC (DALIAN) CO., LTD.
FURUNO DONGGUAN CO., LTD.

Manufacturing of marine electronic equipment
Sales and services of marine electronic equipment
Sales and services of marine electronic equipment
Software development and service
Sales and services of marine electronic equipment
Manufacturing of marine electronic equipment

100
100
100
90.43
90.43
100

Singapore

FURUNO SINGAPORE PTE LTD

Sales and services of marine electronic equipment

100

PanamaFURUNO PANAMA, S.A.

Sales and services of marine electronic equipment

100

Indonesia

PT.FURUNO ELECTRIC INDONESIA

Sales and services of marine electronic equipment

100

Korea

FURUNO KOREA CO., LTD.

Sales and services of marine electronic equipment

100

Malaysia

FURUNO ELECTRIC (MALAYSIA) SDN. BHD.

Sales and services of marine electronic equipment

100

New Zealand

ELECTRONIC NAVIGATION LIMITED

Sales and services of marine electronic equipment

60

Unconsolidated Subsidiaries
Country

Company Name

Main BusinessJapan

FURUNO SOFTECH CO., LTD.

Software development and service

Equity method Subsidiaries
Country

Company Name

Main BusinessFranceSIGNET S.A.S

Sales and software development

44

EquityOwnership (%)

100
EquityOwnership (%)

49.28

F i v e - Ye a r S u m m a r y
FURUNO ELECTRIC CO., LTD. and Consolidated Subsidiaries
Years ended the last day of February

2019

2020

Millions of Yen
2021

2022

2023

Thousands of
U.S. Dollars(Note 1)
2023

¥82,108¥83,066¥82,255¥84,783¥91,325$669,881

Operating income

4,771

2,411

3,740

2,532

1,523

11,171

Income before income taxes and minority interests

4,877

2,699

4,742

3,735

2,443

17,919Net income (loss)

4,026

2,041

3,946

2,814

1,348

9,887

127.7764.78

125.20

89.24

42.72

0.31

For the year:
Net sales:

Per share of common stock (Notes 2) (yen and U.S. dollars):
Basic net income (loss)

25.00

20.00

40.00

40.00

25.00

Weighted average number of shares outstanding (thousands)

Cash dividends applicable to the year

31,511

31,511

31,51931,53431,555

Research and development cost

4,707

4,266

5,303

5,458

5,694

41,766

Capital expenditure

1,271

1,887

2,542

3,133

1,616

11,853

Depreciation and amortization

3,093

3,246

3,160

3,161

3,061

22,452

Net cash provided by operating activities

4,903

8,041

8,512

6,193

(6,492)(47,619)

Net cash used in investing activities(2,912)(3,175)(4,553)(4,389)(3,027)(22,203)

Net cash provided by (used in) financing activities(1,251)(4,194)(850)(3,518)

8,263

60,610Total assets¥79,672¥76,133¥82,248¥85,973 ¥106,396$780,429

Interest-bearing debt

12,982

9,906

9,956

9,602

19,317

141,692

Shareholders’ equity

41,191

41,92545,35947,88052,113382,256

Number of employees

2,957

2,926

2,978

3,065

3,310

North America¥ 8,348¥8,092¥8,113¥9,184¥9,913$72,713

Europe20,047

19,407

18,22121,80824,338

178,522Asia

18,354

19,29617,145

17,72519,192

140,776

At year-end:

Overseas sales:

Other

2,949

2,686

2,852

4,159

5,319

39,015

Total

49,69949,482

46,33352,87858,764

431,042

4.90%

2.46%

4.80%

3.32%

1.48%

Return on assets

6.50

3.50

6.00

4.40

2.70%

Return on equity

10.14

4.91

9.04

6.04

2.70%

Key ratio (%):
Return on sales

Debt equity ratio

31.52

23.63

21.95

20.05

37.07%

Equity ratio

51.70

55.10

55.10

55.70

49.00%

Note: 1. U.S. dollar amounts have been converted from Japanese yen, for convenience only, at the rate of ¥136.33=U.S. $1, the approximate rate of exchange
prevailing at February 28, 2023.
2. See Note 2.s and Note 16 of the Notes to the Consolidated Financial Statements.

45

FURUNO ELECTRIC CO., LTD.
9-52 Ashihara-cho, Nishinomiya, 662-8580, Japanwww.furuno.co.jp