(TRANSLATION)
This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy
between this translated document and the Japanese original, the original shall prevail. The Company assumes noresponsibility for this translation or for direct, indirect or any other forms of damages arising from the translation.
(Securities code: 6954)
June 3, 2021

To Our Shareholders

Kenji Yamaguchi
Representative Director
President

FANUC CORPORATION

3580, Shibokusa Aza-Komanba, Oshino-mura,
Minamitsuru-gun, Yamanashi Prefecture

Dear Shareholders,

Notice of Convocation of
The 52nd Ordinary General Meeting of Shareholders

We are pleased to announce that the 52nd Ordinary General Meeting of Shareholders of FANUC CORPORATION will
be held as described below.
We strongly request that you exercise your voting rights by the Voting Rights Exercise Form or via the Internet inadvance if possible, and refrain from attending the meeting in person, regardless of your health status,.
Please review the Reference Materials for the Ordinary General Meeting of Shareholders and exercise yourvoting rights by 5:00 p.m. (Japan time), Wednesday, June 23, 2021.
[Exercise of voting rights by Voting Rights Exercise Form]
Please indicate your votes for or against each of the proposals in the enclosed Voting Rights Exercise Form and return the form
to us by the above-mentioned deadline.
[Exercise of voting rights by electronic methods (the Internet)]
Please access the website (https://www.tosyodai54.net) and enter your votes for or against each of the proposals in accordancewith the guidance on the screen by the above-mentioned deadline. If you have any questions, please contact the administratorof FANUC CORPORATION’s shareholder register, Tokyo Securities Transfer Agent Co., Ltd. (Phone: 0120-88-0768).
Description
1. Date:Thursday, June 24, 2021, 10:00 a.m.

2. Place:

FANUC Forum, FANUC Headquarters, 3580, Shibokusa Aza-Komanba, Oshino-mura,
Minamitsuru-gun, Yamanashi Prefecture

3. Agenda of the Meeting
Matters to be reported:

Report on the business report, the consolidated financial statements, the non-consolidated
financial statements and the results of audit of the consolidated financial statements by
the Accounting Auditors and the Audit & Supervisory Board for the 52nd fiscal year (from
April 1, 2020 to March 31, 2021).

Matters to be resolved:
Item 1: Dividends of Surplus
Item 2: Amendments to Parts of the Articles of Incorporation
Item 3: Election of Six (6) Directors (except for Directors Who Are Audit and Supervisory Committee Members)
Item 4: Election of Five (5) Directors Who Are Audit and Supervisory Committee Members
Item 5: Determination of the Amount of Remuneration, etc. for Directors (except for Directors Who Are Audit andSupervisory Committee Members)
Item 6: Determination of the Amount of Remuneration, etc. for Directors Who Are Audit and Supervisory Committee
Members
Item 7: Determination of Remuneration for the Allotment of Restricted Stock to Directors (except for Directors Who Are
Audit and Supervisory Committee Members and Outside Directors)
4. Other Matters Determined Concerning the General Meeting of Shareholders(1) If voting rights are exercised by both the enclosed Voting Rights Exercise Form and the electronic method, the votes
exercised by the electronic method shall be effective.
(2) If voting rights are exercised twice or more by electronic methods, the votes last exercised shall be effective.
1

* Part of the Attachments to the Notice of Convocation of the General Meeting of Shareholders to be provided to you shall bedeemed to be delivered to you by posting them on our Internet website (https://www.fanuc.co.jp).
* In the event of any revision of the Attachments to the Notice of Convocation of the General Meeting of Shareholders and theReference Materials for the Ordinary General Meeting of Shareholders, it will be posted on our Internet website(https://www.fanuc.co.jp).

2Reference Material for the Ordinary General Meeting of Shareholders
Item 1Dividends of Surplus

Our basic policy of distributing profits to shareholders is as follows:(Announced on April 24, 2019)1.

Dividends
Our basic policy is to implement, in principal, a consolidated payout ratio of 60%.

2.

Share buybacks
We aim to buy back our own shares in a flexible manner depending on the level of our stock prices, taking into account thebalance with our investment in growth.

3.

Cancellation of treasury shares
We aim to limit the number of our treasury shares that we hold to a maximum of 5% of the total number of issued shares. We
will, as a general rule, cancel any portion exceeding that limit every fiscal year.

Based on the above basic policy, we propose to pay the year-end dividend for this fiscal year as follows, which makes theconsolidated payout ratio, including the interim dividend paid in December 2020, at 60%.
The dividend for the full fiscal year will be ¥294.07 per share, in total with the dividend for the first half of the fiscal year that has
been paid in December, 2020 (¥87.93 per share), resulting in ¥206.14 per share for the second half.

(1) Type of dividend asset
Cash(2) Allocation of dividend assets to shareholders and total amount of allocation¥206.14 per share of common stock (dividend payout ratio (Consolidated): 60.0%)
Total amount of payout: ¥39,540,523,118(3) Effective date of dividend payment
June 25, 2021

3

Item 2 Amendments to Parts of the Articles of Incorporation
We propose amendments to parts of the Articles of Incorporation as follows:(1) Reason for Amendments[1] FANUC has always worked on enhancing corporate governance based on our Basic Principles of “Strict Preciseness andTransparency.” As we proceed in separating our supervisory and executive functions, in order to further strengthen the
supervisory functions of the Board of Directors and speed up management decisions, we will transition to Company with
an Audit and Supervisory Committee, that allows us to establish an Audit and Supervisory Committee consisting of the
Directors who are Audit and Supervisory Committee Members and to expand the delegation of decision-making authority
for business execution from the Board of Directors to Directors. Thus, we will further endeavor to enhance corporate
governance and increase corporate value.
In association with this transition, amendments will be made to establish new rules regarding the Audit and Supervisory
Committee and its members required for the transition to a Company with an Audit and Supervisory Committee, todelegate authority to Directors for decisions regarding execution of important business, and to delete the rules concerning
Audit & Supervisory Board Member and Board of Audit & Supervisory Board Member.

[2] Changes will be made to the scope of the Directors with whom we can execute our liability limitation agreement so that
non-executive Directors may be included. This will allow us to hire capable and diverse talent as well as create anenvironment where they can fully demonstrate their expected roles.

[3] In addition to establishing new rules regarding Managing Officers to clarify their positions and responsibilities, a new rule
will be established to enable the election of a President from among not just Directors (except for Directors who are Audit
and Supervisory Committee Members) but also from among Manging Officers as well, enabling more flexible
organizational operations.

[4] Other required amendments such as amending of article numbering in association with the above amendments will also
be made.

(2) Amendment Details
Amendment details are as follows:(Amended sections underlined.)
Proposed Amendments

Current Text
Article 14. (Convocation)
Unless otherwise provided for in laws and regulations, aGeneral Meeting of Shareholders shall be convened by the
President according to the resolution of the Board of
Directors. In case the President is prevented from so acting,one of the other Directors in the order previously determinedby the Board of Directors shall act in his place.

Article 14. (Convocation)
Unless otherwise provided for in laws and regulations, a General
Meeting of Shareholders shall be convened by a Director in theorder previously determined by the Board of Directors.

Article 19. (Minutes)
A summary of the process and results, as well as other mattersprovided for by laws and ordinances, of the General Meetingsof Shareholders shall be recorded in the minutes, which shallbe signed and sealed by the chairman and Directors inattendance and kept by the Company.

Article 19. (Minutes)
A summary of the process and results, as well as other mattersprovided for by laws and ordinances, of the General Meetings ofShareholders shall be recorded in the minutes, which shall be
kept by the Company.

Article 21. (Number)
The number of Members of the Board of Directors of theCompany shall be no more than eighteen (18).

Article 21. (Number)(1) The number of Members of the Board of Directors of theCompany (except for Directors who are Audit and Supervisory
Committee Members) shall be no more than thirteen (13).

4Current Text

Proposed Amendments(Newly established)(2) The number of Members of the Board of Directors of theCompany who are also Audit and Supervisory Committee
Members shall be no more than five (5).

Article 22. (Election)
Directors shall be elected at a General Meeting of
Shareholders. For the election of Directors, it is necessary forshareholders who have one-third or more of the voting rights
of shareholders entitled to exercise voting rights to attend theGeneral Meeting of Shareholders. Resolutions for the electionof Directors shall not be made by cumulative voting.

Article 22. (Election)
Directors shall be elected at a General Meeting of Shareholders
by separating those who are Audit and Supervisory Committee
Members and those who are not. For the election of Directors, itis necessary for shareholders who have one-third or more of thevoting rights of shareholders entitled to exercise voting rights toattend the General Meeting of Shareholders. Resolutions for theelection of Directors shall not be made by cumulative voting.

Article 23. (Term of Office)The term of office of Directors shall be until the conclusion of
the Ordinary General Meeting of Shareholders relating to thelast fiscal year that ends within one year after they are elected.
The Directors who are appointed as substitutes or appointed
due to an increased number of seats on the board shall serve
until the end of the other incumbent Directors’ term.

Article 23. (Term of Office)(1) The term of office of Directors (except for Directors who are
Audit and Supervisory Committee Members) shall be until theconclusion of the Ordinary General Meeting of Shareholders
relating to the last fiscal year that ends within one year after they
are elected.

(Newly established)(2) The term of office of Directors who are Audit andSupervisory Committee Members shall be until the conclusionof the Ordinary General Meeting of Shareholders relating to thelast fiscal year that ends within two years after they are elected.

(Newly established)(3) The term of office of Directors who are appointed as
substitutes to replace a member of the Audit and Supervisory
Committee who retires before the end of their term of office shallbe until the end of the term of office of the retired Director.

Article 24. (Compensation and Other Benefits)Compensation, bonuses, and other economic benefits payable
to Directors by the Company as compensation for the
performance of duties (hereinafter called “compensation andothers”) shall be set by a resolution at a General Meeting of
Shareholders.

Article 24. (Compensation and Other Benefits)Compensation, bonuses, and other economic benefits payable to
Directors by the Company as compensation for the performanceof duties shall be set by a resolution at a General Meeting of
Shareholders by separating Directors who are Audit andSupervisory Committee Members and those who are not.

5

Current Text

Proposed Amendments

Article 25. (Representative Director and Directors with
Executive Powers)
The Board of Directors, by its resolution and from among
Directors, shall appoint one President and, if necessary for theCompany’s business, may appoint one Chairman of the Boardof Directors, one Vice Chairman, several Senior Managing
Directors and Senior Vice Managing Directors. Among them,a few Directors including the President, and the Chairman (ifany), shall be elected as Representative Directors.

Article 25. (Representative Director and Managing Officers,
Etc.)(1) The Board of Directors by its resolution and from among
Directors (except for Directors who are Audit and Supervisory
Committee Members) shall elect a few Directors as
Representative Directors.

(Newly established)(2) The Board of Directors by its resolution and from among
Directors (except for Directors who are Audit and Supervisory
Committee Members) may appoint one Chairman of the Boardof Directors.

(Newly established)(3) The Board of Directors by its resolution may appoint
Managing Officers and have them split and execute business.

(Newly established)(4) The Board of Directors by its resolution and from among
Directors (except for Directors who are Audit and Supervisory
Committee Members) and Managing Officers shall appoint one
President.

Article 26. (Notice of Convocation of a Meeting of the Boardof Directors)
The notice of convocation of a Meeting of the Board of
Directors shall be dispatched to each Director and Audit &Supervisory Board Member at least three (3) days prior to thedate of the meeting. However, this period may be shortened inurgent cases.

Article 26. (Notice of Convocation of a Meeting of the Board of
Directors)
The notice of convocation of a Meeting of the Board of Directors
shall be dispatched to each Director at least three (3) days prior
to the date of the meeting. However, this period may be
shortened in urgent cases.

Article 29. (Release of Directors’ Liabilities)(1) (Text omitted)

Article 29. (Release of Directors’ Liabilities)(1) (No change)(2) In compliance with Paragraph 1, Article 427, of theCompanies Act, the Company can conclude a contract with
Outside Directors to reduce their liabilities to compensate fordamages caused by the negligence of duty within the limits set
by laws and ordinances. However, the maximum amount of
their liabilities after reduction under the relevant contract shallbe the statutory minimum amount set by Paragraph 1, Article
425, of the Companies Act.

(2) In compliance with Paragraph 1, Article 427, of theCompanies Act, the Company can conclude a contract with
Directors (except for Executive Directors) to reduce their
liabilities to compensate for damages caused by the negligenceof duty within the limits set by laws and ordinances. However,
the maximum amount of their liabilities after reduction under the
relevant contract shall be the statutory minimum amount set by
Paragraph 1, Article 425, of the Companies Act.

6

Current Text

Proposed Amendments(Newly established)

Article 30. (Delegation of Decisions on the Execution ofImportant Business)
In compliance with Paragraph 6, Article 399-13, of theCompanies Act, the Company can delegate part or all of thedecisions on the execution of important business (except for
those matters listed in Paragraph 5 of the same Article) to
Directors by a resolution of the Board of Directors.

Chapter V
Audit & Supervisory Board Members
and the Board of Audit & Supervisory Board Members

Chapter V
Audit and Supervisory Committee

Article 30. (Audit & Supervisory Board Members and Board
of Audit & Supervisory Board Members)
The Company shall have Audit & Supervisory Board
Members and a Board of Audit & Supervisory Board
Members.

(Deleted)

Article 31. (Number)
The number of Audit & Supervisory Board Members of theCompany shall not be more than five (5).

(Deleted)

Article 32. (Election)
Audit & Supervisory Board Members shall be elected at a
General Meeting of Shareholders. For the election of Audit &Supervisory Board Members, it is necessary for shareholders
who have one-third or more of the voting rights ofshareholders entitled to exercise voting rights to attend theGeneral Meeting of Shareholders.

(Deleted)

Article 33. (Term of Office)The term of office of Audit & Supervisory Board Members
shall be until the end of the Ordinary General Meeting of
Shareholders relating to the last fiscal year that ends in thefour (4) years after they are elected. The term for Audit &Supervisory Board Members who are appointed as a substitutefor a Audit & Supervisory Board Member retiring before theexpiry of the term of office shall be until the date of expiry of
the term of the retired Audit & Supervisory Board Member.

(Deleted)

Article 34. (Compensation and Others)
Compensation and others payable to Auditors shall be set bya resolution at a General Meeting of Shareholders.

(Deleted)

Article 35. (Standing Audit & Supervisory Board Members)
The Board of Auditors shall elect a standing Audit &Supervisory Board Member by a resolution of the Board ofAudit & Supervisory Board Members.

(Deleted)

7

Current Text

Proposed Amendments

Article 36. (Notice of Convocation of a Meeting
The notice of convocation of a Meeting of the Board of Audit& Supervisory Board Members shall be dispatched to each
Audit & Supervisory Board Member at least three (3) days
prior to the date of the meeting. However, this period may be
shortened in urgent cases.

(Deleted)

Article 37. (Rules Governing the Board of Audit &Supervisory Board Members)
Matters relating to the Board of Auditors shall be regulated byrules governing the Board of Auditors determined at a meetingof the Board of Auditors unless otherwise provided by laws,
ordinances, or the Articles of Incorporation.

(Deleted)

Article 38. (Release of Audit & Supervisory Board Members’Liabilities)(1) In compliance with Paragraph 1, Article 426, of theCompanies Act, the Company can release a part of theliabilities of Audit & Supervisory Board Members (including
former Audit & Supervisory Board Members) to compensate
for damages caused by negligence of duty within the limits set
by laws and ordinances and in compliance with a resolutionof the Board of Directors.

(Deleted)(2) In compliance with Paragraph 1, Article 427, of theCompanies Act, the Company can conclude a contract with
Outside Audit & Supervisory Board Members to reduce their
liabilities to compensate for damages caused by the
negligence of duty within the limits set by laws andordinances. However, the maximum amount of their liabilities
after reduction under the relevant contract shall be thestatutory minimum amount set by Paragraph 1, Article 425, of
the Companies Act.

(Deleted)（Newly established）

Article 31. (Audit and Supervisory Committee)
The Company shall have an Audit and Supervisory Committee.

（Newly established）

Article 32. (Standing Audit and Supervisory Committee
Members)
The Audit and Supervisory Committee, by its resolution andfrom among its members, may elect standing Audit andSupervisory Committee Members.

8Current Text

Proposed Amendments（Newly established）

Article 33. (Notice of Convocation of Meeting of the Audit andSupervisory Committee)
The notice of convocation of a meeting of the Audit andSupervisory Committee shall be dispatched to each Audit andSupervisory Committee Member at least three (3) days prior to
the date of the meeting. However, this period may be shortenedin urgent cases.

（Newly established）

Article 34. (Rules Governing the Audit and Supervisory
Committee)
Matters relating to the Audit and Supervisory Committee shallbe regulated by rules governing the Audit and Supervisory
Committee determined at a meeting of the Audit andSupervisory Committee unless otherwise provided by laws, andregulations, or the Articles of Incorporation.

Article 39 ~ 45 (Text omitted)

Article 35 ~ 41 (No change)
Supplementary Provisions
Article 1 (Transitional Measures for Release of Audit &Supervisory Board Members’ Liabilities, Etc. before theTransition to a Company with an Audit and Supervisory
Committee)
Article 38 of the previous Articles of Incorporation that are
effective prior to the conclusion of the 52nd Ordinary General
Meeting of Shareholders to be held in June 2021 shall apply tothe release of Audit & Supervisory Board Members’ (including
those who were previously Audit & Supervisory Board
Members) liabilities and Agreement Limiting Liability with
Outside Auditors (including those who were previously Outside
Auditors), regarding their actions prior to the conclusion of thesaid Ordinary General Meeting of Shareholders, which aredescribed in Paragraph 1, Article 423, of the Companies Act.

（Newly established）

9

Item 3 Election of Six (6) Directors (except for Directors Who Are Audit and Supervisory Committee Members)
On the condition that Item 2 “Amendments to Parts of the Articles of Incorporation” is approved as proposed, the Company
will transition to a Company with an Audit and Supervisory Committee and the term of office of the twelve (12) Directors will
expire at the conclusion of the meeting. Therefore, we propose to elect six (6) Directors (except for Directors who are Audit
and Supervisory Committee Members).
This proposal, however, can only take effect on the condition that Item 2 “Amendments to Parts of the Articles of Incorporation”
takes effect.
The six (6) candidates for Directors (except for Directors who are Audit and Supervisory Committee Members) are as follows:

Candidates’
numberName

1

Yoshiharu Inaba

Renominated2

Kenji Yamaguchi

Renominated3

Michael J. Cicco

Renominated4

Kazuo Tsukuda

Renominated5

6

Position and responsibilities at the Company

Attendanceat the Boardof Directors
meetings

Representative Director, Chairman

100%(12 of 12)

Representative Director, President,
CEO and CIO
Director of the Company
President and CEO, FANUC America
Corporation100%(12 of 12)100%(10 of 10)

Outside Director
Independent Director

Director

92%(11 of 12)

Masaharu Sumikawa Newly nominatedOutside Director
Independent Director

Audit & Supervisory Board Member

100%(12 of 12)

Naoko Yamazaki

Outside Director
Independent Director

Director100%(10 of 10)

Renominated10Candidates’
numberName(Date of birth)

Personal history, position and responsibilities
April 1973
September 1983
June 1989
June 1992
June 1995

1

May 2001
June 2003
June 2016
Yoshiharu Inaba(July 23, 1948)
RenominatedApril 2019

Joined Isuzu Motors Limited
Joined the Company
Appointed Director of the Company
Appointed Senior Vice President (Director) of the Company
Appointed Executive Vice President (Director) of theCompany
Appointed Senior Executive Vice President (Representative
Director) of the Company
Appointed President and CEO (Representative Director) of
the Company
Appointed Chairman and CEO (Representative Director) of
the Company
Appointed Chairman (Representative Director) of theCompany (to the present)

Number of sharesof the Company
held by candidate
5,000 shares(Significant concurrent posts of other entities)
Outside Director, TOPCON CORPORATION(Attendance at the Board of Directors meetings held during this period)
100% (12 of 12)(Reason for nomination as candidate)
Yoshiharu Inaba has led the management of the Company since he wasappointed President and CEO (Representative Director) in June 2003, andhas served as Chairman (Representative Director) since 2016. In order tobenefit from his experiences and deep insights in management decisionmaking and supervision of the Company, his reappointment as Director is
proposed.
April 1993
October 2000

2

June 2003
April 2007
June 2008
February 2012
October 2013
Kenji Yamaguchi(August 6, 1968)
RenominatedJune 2016
April 2019
April 2020

Joined the Company
Manager, Section 1, Dept.1, Robot Laboratory of theCompany
General Manager, Manufacturing Technology of the Company
General Manager, Headquarters Factories of the Company
General Manager, Factories Division of the Company
Appointed Executive Vice President (Director) of the Company
Appointed Senior Executive Vice President (Director) of theCompany
Appointed Senior Executive Vice President (Representative
Director) of the Company
Appointed President and COO (Representative Director) of theCompany
General Manager, FA Business Division of the Company
Appointed President and CEO (Representative Director) of theCompany
Appointed President, CEO and CIO (Representative Director)of the Company (to the present)(Attendance at the Board of Directors meetings held during this period)
100% (12 of 12)(Reason for nomination as candidate)
Kenji Yamaguchi has been involved in research and development,
manufacturing, production technologies and sales, and by having played an
important role in each of these fields, he is rich in experience. He currently
leads the management of the Company as President, CEO and CIO*
(Representative Director). In order to benefit from his experiences anddeep insights in management decision-making and supervision of theCompany, his reappointment as Director is proposed.
(*) CIO: Chief Information Officer

11

2,000 shares

Candidates’
numberName(Date of birth)

Personal history, position and responsibilities
August 1999
November 2015
April 2016
June 2016
July 2016
June 2017
June 2020

3

Michael J. Cicco(October 16, 1976)
RenominatedJoined FANUC America Corporation (“FAC”)
Appointed Vice President of FAC
Appointed President and COO of FAC
Appointed Managing Officer of the Company
Appointed President and CEO of FAC (to the present)
Appointed Senior Managing Officer of the Company
Appointed Director of the Company (to the present)(Attendance at the Board of Directors meetings held during this period)
100% (10 of 10)(Reason for nomination as candidate)
Michael J. Cicco currently serves as President and CEO of FANUC
America Corporation, a subsidiary responsible for the Company’s business in
the Americas, and has contributed to its growth and development. As it
would be beneficial to employ his experiences and deep insights inmanagement decision-making and supervision of the Company, his
appointment as Director is proposed.

12

Number of sharesof the Company
held by candidate
0 sharesCandidates’
numberName(Date of birth)

Personal history, position and responsibilities
April 1968
June 1999

4

April 2002
June 2003
April 2008
April 2013
Kazuo Tsukuda(September 1, 1943)
Outside Director
Independent Director
RenominatedJune 2013
June 2015
June 2019

Joined Mitsubishi Heavy Industries, Ltd.
Appointed Director (Member of the Board) of Mitsubishi
Heavy Industries, Ltd.
Appointed Managing Director (Member of the Board) of
Mitsubishi Heavy Industries, Ltd.
Appointed President (Member of the Board) of Mitsubishi
Heavy Industries, Ltd.
Appointed Chairman (Member of the Board) of Mitsubishi
Heavy Industries, Ltd.
Appointed Senior Executive Advisor (Member of the Board)of Mitsubishi Heavy Industries, Ltd.
Appointed Senior Corporate Advisor of Mitsubishi Heavy
Industries, Ltd.
Appointed Director of the Company (to the present)
Appointed Executive Corporate Advisor of Mitsubishi
Heavy Industries, Ltd. (to the present)(Significant concurrent posts of other entities)
Executive Corporate Advisor of Mitsubishi Heavy Industries, Ltd.
Outside Director of Mitsubishi Research Institute, Inc.
Outside Director (Audit and Supervisory Committee Member) of
Yamaguchi Financial Group, Inc.
Outside Director, Internet Initiative Japan Inc.
(Attendance at the Board of Directors meetings held during this period)
92% (11 of 12)(Reason for nomination as candidate and expected role)
Kazuo Tsukuda has an outstanding knowledge of manufacturing andextensive experience in corporate management. He also has a deep
understanding of the Company’s business. He has appropriately executed
his duties as Outside Director in providing the Company with supervision
over and advice on the Company’s business. We expect that he willcontinue to contribute to the Company’s Board of Directors from an
independent position.
Although the Company has business transactions with Mitsubishi Heavy
Industries, Ltd., at which Kazuo Tsukuda currently serves as Executive
Corporate Adviser and served as Chairman and President in the past, thetransaction value accounts for less than 0.5% of consolidated net sales ofboth of the company and the Company. Therefore, there is no risk of his
independence being affected by that position.
We propose the reelection of Kazuo Tsukuda, who has continued tocontribute to the Company’s Board of Directors from an independent
position as Outside Director.
In addition, the Company has appointed Outside Director Kazuo Tsukuda
as an Independent Director as defined by the Tokyo Stock Exchange andhas duly notified the Tokyo Stock Exchange.
His term of office as Outside Director of the Company will have been six(6) years at the conclusion of the coming shareholder meeting.

13

Number of sharesof the Company
held by candidate
0 sharesCandidates’
numberName(Date of birth)

Personal history, position and responsibilities
April 1972
June 1995
April 1999

5

October 2004
April 2006
April 2010
Masaharu Sumikawa(July 2, 1943)
Outside Director
Independent Director
Newly nominatedJune 2010
June 2012
June 2012
June 2014
June 2015
June 2020

Joined Hitachi, Ltd.
Deputy General Manager, Hitachi Works of Hitachi, Ltd.
General Manager, Thermal & Hydroelectric Systems
Division, Power and Industrial Systems Group of Hitachi,
Ltd.
Appointed Executive Vice President and Executive Officer
of Hitachi, Ltd..
Appointed President and Chief Executive Officer ofHitachi Plant Technologies, Ltd.
Appointed Chairman of the Board of Hitachi Plant
Technologies,Ltd.
Appointed Director of Hitachi, Ltd.
Appointed Adviser of Hitachi Plant Technologies, Ltd.
Non-regular employee for specialized duties of Hitachi,
Ltd.
Appointed Audit & Supervisory Board Member of theCompany (to the present)
Appointed Chairman of Tsukuba Global Innovation
Promotion Agency (to the present)
Appointed President and Representative Director of Mito
Country Club Co., Ltd. (to the present)(Significant concurrent posts of other entities)
Chairman of Tsukuba Global Innovation Promotion Agency
President and Representative Director of Mito Country Club Co., Ltd(Attendance at the Board of Directors meetings held during this period)
100% (12 of 12)(Attendance at the Audit & Supervisory Board meetings held during thisperiod)100% (12 of 12)(Reason for nomination as candidate and expected role)
Masaharu Sumikawa has been involved in the management of the
manufacturing industry for many years and has extensive knowledge,
and played an appropriate role in auditing business execution as an
Outside Auditor. We expect that he will continue to contribute to theCompany’s Board of Directors from an independent position.
Although the Group has business transactions with Hitachi, Ltd., atwhich Masaharu Sumikawa served as Representative Executive Officer,
Executive Vice President and Executive Officer, the transaction value
accounts for less than 0.5% of consolidated net sales of both of thecompanies. Also, the Company has no business transactions with
Tsukuba Global Innovation Promotion Agency, at which he serves
Chairman, and Mito Country Club Co., Ltd., at which he serves as
Representative Director. Therefore, there is no risk of his independence
being affected by this position.
We propose the election of Masaharu Sumikawa, who has continued tocontribute to the Company’s Board of Directors and the Audit &Supervisory Board from an independent position as Outside Director.
In addition, the Company has appointed Outside Audit & Supervisory
Board Member Masaharu Sumikawa as an Independent Auditor as
defined by the Tokyo Stock Exchange and has duly notified the Tokyo
Stock Exchange.
His term of office as Outside Audit & Supervisory Board Member of theCompany will have been seven (7) years at the conclusion of the coming
shareholder meeting.

14

Number of sharesof the Company
held by candidate
0 sharesCandidates’
numberName(Date of birth)

Personal history, position and responsibilities
April 1996

6

September 2001
April 2010
September 2011
April 2012
Naoko Yamazaki(December 27, 1970)
Outside Director
Independent
Director
RenominatedJuly 2012
May 2013
July 2015
December 2015
March 2016
April 2016
September 2017
June 2018
July 2018
June 2020

Joined the National Space Development Agency of Japan(currently Japan Aerospace Exploration Agency (JAXA))
Authorized as an astronaut to board the International Space
StationServed as a mission specialist on the Space Shuttle Discovery,
and engaged the mission of assembling the International Space
Station (STS-131(19A))
Appointed Honorary Chairman of the Japan Abacus Education
Association (to the present)
Appointed Visiting Professor, Ritsumeikan University (to thepresent)
Appointed Member of the Committee on National Space Policy
under the Cabinet Office (to the present)
Appointed Visiting Professor, Joshibi University of Art and
Design (to the present)
Appointed Director of the Japanese Rocket Society and
Chairman of the “Sorajo” Board (to the present)
Appointed Member of the Executive Committee and theAdvisory Board for the International Robot Competition (to thepresent)
Appointed Outside Director of Nabtesco Corporation
Appointed Specially Appointed Associated Professor, Graduate
School of Advanced Integrated Studies in Human Survivability
of Kyoto University
Appointed Outside Director of OPTORUN Co., Ltd. (to thepresent)
Appointed Outside Director of TOPCON CORPORATION (tothe present)
Appointed Representative Director of Space Port Japan
Association (to the present)
Appointed Director of the Company (to the present)(Significant concurrent posts of other entities)
Representative Director of Space Port Japan Association
Member of the Committee on National Space Policy under the Cabinet
OfficeOutside Director of OPTORUN Co., Ltd.
Outside Director of TOPCON CORPORATION(Attendance at the Board of Directors meetings held during
this period)
100% (10 of 10)(Reason for nomination as candidate and expected role)
Naoko Yamazaki has extensive knowledge of advanced aerospaceengineering and manned spacecraft systems, including robotic arms, as anengineer. She is well versed in science and technology, as well as risk
management including crisis management, and has experienced extremely
challenging environments as an astronaut. With her wealth of experienceand insight, she has appropriately executed her duties as Outside Director
in providing the Company with supervision over and advice on the
Company’s business. We expect that she will continue to contribute to theCompany’s Board of Directors from an independent position.
The Company has no business transactions with Space Port Japan
Association, at which Naoko Yamazaki serves as Representative Director.
Therefore, there is no risk of her independence being affected by thisposition.
As mentioned above, Naoko Yamazaki has continued to contribute to theCompany’s Board of Directors from an independent position. Thus her
reappointment as Outside Director is proposed.
In addition, the Company has appointed Outside Director Naoko Yamazaki
as an Independent Director as defined by the Tokyo Stock Exchange andhas duly notified the Tokyo Stock Exchange.
Her term of office as Outside Director of the Company will have been one (1)year at the conclusion of the coming shareholder meeting.

15

Number of sharesof the Company
held by candidate
0 sharesNotes:1. Kazuo Tsukuda, Masaharu Sumikawa, and Naoko Yamazaki are candidates for Outside Directors.
2. We have entered into an agreement with Kazuo Tsukuda, Masaharu Sumikawa, and Naoko Yamazaki limiting their liability for damages
as defined under Article 423, Paragraph 1 of the Companies Act, in accordance with Article 427, Paragraph 1 of the Companies Act. We
intend to enter into a liability limitation agreement with Masaharu Sumikawa with the same content if Item 3 is approved as originallyproposed.
3. We have entered into a directors and officers liability insurance agreement with an insurance company. The agreement covers damages
that may arise due to the insured directors and officers assuming liability for their execution of duties, or receiving a claim for the pursuitof such liability. All candidates for Directors shall be included as an insured under the said insurance agreement, which is to be retainedwith the same terms and conditions at the next renewal.

16

Item 4

Election of Five (5) Directors Who Are Audit and Supervisory Committee Members

If Item 2 “Amendments to Parts of the Articles of Incorporation” is approved as proposed, the Company will transition to a
Company with an Audit and Supervisory Committee. Accordingly, the election of the following five (5) Directors who are
Audit and Supervisory Committee Members are proposed.
The resolution regarding this proposal, however, can only take effect after Item 2 “Amendments to Parts of the Articles ofIncorporation” takes effect.
The candidates for Directors who are Audit and Supervisory Committee Members are as follows.
The Audit & Supervisory Board has consented to the submission of this item.

Candidates’
numberPosition andresponsibilities at theCompany

Name

Attendance at
the Board of
Directors
meetings

Attendance at
the Audit &Supervisory
Board
meetings

1

Katsuo Kohari

Newly nominatedStanding Audit &Supervisory Board
Member100%(12 of 12)100%(12 of 12)

2

Katsuya Mitsumura

Newly nominatedAudit & Supervisory
Board Member

100%(12 of 12)100%(12 of 12)

3

Yasuo Imai

Newly nominatedOutside Director
Independent Director

Director100%(12 of 12)—

4

Hidetoshi Yokoi

Newly nominatedOutside Director
Independent Director

Audit & Supervisory
Board Member

100%(12 of 12)100%(12 of 12)

5

Mieko Tomita

Newly nominatedOutside Director
Independent Director

Audit & Supervisory
Board Member

100%(10 of 10)100%(10 of 10)

17

Candidates’
numberName(Date of birth)

Personal history, position and responsibilities
April 1968
May 1976
April 2003

1

June 2003
June 2012
October 2013
May 2014
Katsuo Kohari(August 12, 1942)

October 2014
June 2016

Newly nominatedJune 2019

Joined Fujitsu Limited
Transferred to the Company
Assistant to General Manager for Sales and Service of theCompany
Appointed Director of the Company
Appointed Senior Vice President (Director) of theCompany
Appointed Executive Vice President (Director) of theCompany
Vice General Manager (Sales), FA Business Division of theCompany
General Manager, Service Division of the Company
Appointed Executive Managing Officer (Director) of theCompany
Appointed Standing Audit & Supervisory Board Member (tothe present)(Attendance at the Board of Directors meetings held during this period)
100% (12 of 12)(Attendance at the Audit & Supervisory Board meetings held during thisperiod)100% (12 of 12)(Reason for nomination as candidate)
Katsuo Kohari has been involved in research and development, sales andservices, having played an important role in each of these fields, he isrich in experience. He currently serves as a Standing Audit &Supervisory Board Member of the Company. In order to benefit from his
experiences and deep insights in audits and supervision of the Company,
his appointment as Director who is an Audit and Supervisory Board
Member is proposed.

18

Number of sharesof the Company
held by candidate
5,116 shares

Candidates’
numberName(Date of birth)

Personal history, position and responsibilities
April 1974

2

March 1977
January 1982
June 2019

Joined Showa Audit Corporation (current Ernst & Young
ShinNihon LLC)
Registered as Certified Public Accountant (to the present)
Founder and head of Katsuya Mitsumura C.P.A. and Tax
Accountant Office (to the present)
Appointed Audit & Supervisory Board Member (to thepresent)

Katsuya Mitsumura(June 18, 1951)
Newly nominated(Significant concurrent posts of other entities)
Founder and Head of Katsuya Mitsumura C.P.A. and Tax Accountant
OfficeDirector (Audit & Supervisory Committee Member) of AXELL
CORPORATION
Outside Director of INABA SEISAKUSHO Co., Ltd.
(Attendance at the Board of Directors meetings held during this period)
100% (12 of 12)(Attendance at the Audit & Supervisory Board meetings held during thisperiod)100% (12 of 12)(Reason for nomination as candidate)
Katsusya Mitsumura has a wealth of business experience as a certified
public accountant and currently serves as Audit &Supervisory Board
Member of the Company. In order to benefit from his experiences anddeep insights in audits and supervision at the Company, his appointment
as Director who is an Audit and Supervisory Board Member is proposed

19

Number of sharesof the Company
held by candidate
0 sharesCandidates’
numberName(Date of birth)

Personal history, position and responsibilities
July 1971

3

July 2002
July 2003
July 2004
July 2006
April 2007
Yasuo Imai
(October 22, 1948)
Outside Director
Independent Director
Newly nominatedJune 2007
April 2008
June 2011
June 2015
April 2017
June 2018

Joined the Ministry of International Trade and Industry(currently the Ministry of Economy, Trade and Industry)
Appointed Director - General, Manufacturing Industries Bureauof the ministry
Appointed Commissioner of Japan Patent OfficeAppointed Adviser of Japan Industrial Policy Research InstituteAppointed Senior Managing Executive Officer, Executive Vice
President of Pipe & Tube Company, of Sumitomo Metal
Industries, Ltd (currently NIPPON STEEL CORPORATION)
Appointed Senior Managing Executive Officer, President of
Pipe & Tube Company of the company
Appointed Director & Senior Managing Executive Officer(Member of the Board), President of Pipe & Tube Company of
the company
Appointed Director & Executive Vice President (Member of theBoard), President, Pipe & Tube Company of the company
Appointed President, Chief Operating Officer (Member of theBoard) of AIR WATER INC.
Appointed Director of the Company (to the present)
Appointed Director, Vice Chairman of the Board of AIR
WATER INC. (to the present)
Appointed Chairman of Japan Industrial and Medical Gases
Association (to the present)(Significant concurrent posts of other entities)
Director, Vice Chairman of the Board of AIR WATER INC.
Chairman, Japan Industrial and Medical Gases Association(Attendance at the Board of Directors meetings held during this period)
100% (12 of 12)(Reason for nomination as candidate and expected role)
After joining in the Ministry of International Trade and Industry (currently,
the Ministry of Economy, Trade and Industry), Yasuo Imai had experienceof being posted overseas as General Manager of the Washington Office ofJapan National Oil Corporation. He successfully held a number of
positions starting from the post of Deputy Director-General, DirectorGeneral of the Petroleum Department of Agency for Natural Resources
and Energy. Subsequently he moved to the post of Director-General of the
Manufacturing Industries Bureau, and then to the post of Commissioner of
the Japan Patent Office. Based on these experiences, Yasuo Imai, being
familiar with foreign affairs, has a global perspective and extensive
knowledge concerning the manufacturing industry and the protection of
intellectual property, etc. At the same time, he is currently an active
corporate executive and is also knowledgeable about corporate
management due to having more than 14 years’ experience in business. He
has appropriately executed his duties as Outside Director in providing theCompany with supervision over and advice on the Company’s businesswith his extensive experience in various fields and from his broad vision.
We expect that he will continue to contribute to the Board of Directors
from an independent position.
Although the Company has business transactions with Air Water Inc., atwhich Yasuo Imai serves as Director, Vice Chairman of the Board, thetransaction value accounts for less than 0.5% of consolidated net sales ofboth of the companies. Also, the Company has no business transactions
with Japan Industrial and Medical Gases Association, at which Yasuo Imaiserves as Chairman. Therefore, there is no risk of his independence being
affected by that position.
We propose the election of Yasuo Imai, who has continued to contributeto the Company’s Board of Directors from an independent position as
Outside Director who is an Audit and Supervisory Committee Member.
In addition, the Company has appointed Outside Director Yasuo Imai as
an Independent Director as defined by the Tokyo Stock Exchange and has
duly notified the Tokyo Stock Exchange.
His term of office as Outside Director of the Company will have been six(6) years at the conclusion of the coming shareholder meeting.

20

Number of shares of
the Company
held by candidate
0 sharesCandidates’
numberName(Date of birth)

Personal history, position and responsibilities
April 1983

4

January 1985
July 1997
July 1998
April 2005
Hidetoshi Yokoi(August 29, 1953)
Outside Director
Independent Director
Newly nominatedApril 2008
May 2015
March 2019
June 2019

Lecturer, Institute of Industrial Science of University ofTokyo
Assistant Professor, Institute of Industrial Science ofUniversity of Tokyo
Professor, Institute of Industrial Science of University of
Tokyo
Professor, Center for Collaborative Research of Universityof Tokyo
Director, Center for Collaborative Research of Universityof Tokyo
Professor, Institute of Industrial Science of University ofTokyo
Field II Program Officer, Adaptable and Seamless
Technology Transfer Program through Target-driven R&D
of Japan Science and Technology Agency (to the present)
Retired as Professor, Institute of Industrial Science ofUniversity of Tokyo
Professor Emeritus of the University of Tokyo (to the present)
Appointed Audit & Supervisory Board Member of theCompany (to the present)(Significant concurrent posts of other entities)
Professor Emeritus of the University of Tokyo
Field II Program Officer, Adaptable and Seamless Technology Transfer
Program through Target-driven R&D of Japan Science and Technology
Agency(Attendance at the Board of Directors meetings held during this period)
100% (12 of 12)(Attendance at the Audit & Supervisory Board meetings held during thisperiod)100% (12 of 12)(Reason for nomination as candidate and expected role)
Hidetoshi Yokoi has extensive knowledge in manufacturing, having been
engaged in research and education at the university and in activities at
the Japan Science and Technology Agency to solve problems in society
to meet its demands. He has played an appropriate role in audits ofbusiness execution as Outside Audit & Supervisory Board Member. We
expect that he will continue to contribute to the Board of Directors andthe Audit and Supervisory Committee from an independent position.
The Company has no business transactions with the Japan Science andTechnology Agency, at which Hidetoshi Yokoi serves as Program
Officer. Therefore, there is no risk of his independence being affected bythis position.
Therefore, we propose the election of Hidetoshi Yokoi, who has
continued to contribute to the Company’s Board of Directors and the
Audit & Supervisory Board from an independent position as Outside
Director who is an Audit and Supervisory Committee Member.
In addition, the Company has appointed Outside Audit &Supervisory
Board Member Hidetoshi Yokoi as an Independent Auditor as definedby the Tokyo Stock Exchange and has duly notified the Tokyo Stock
Exchange.
His term of office as Outside Audit & Supervisory Board Member of theCompany will have been two (2) years at the conclusion of the coming
shareholder meeting.

21

Number of sharesof the Company
held by candidate
0 sharesCandidates’
numberName(Date of birth)
April 1980

5

April 1995
April 2001
April 2004
October 2007
Mieko Tomita(August 15, 1954)

June 2012
April 2017

Outside Director
Independent Director

June 2019

Newly nominatedJune 2020

Personal history
and position
Registered as lawyer (to the present)
Joined Nishi and Iseki Law Office (currently Nishi & Partners
Attorneys and Counselors at Law)
Appointed Auditor of Kanagawa Learning Disability Research
Association
Appointed Civil Conciliation Commissioner, Tokyo District
Court (to the present)
Appointed Instructor, Showa Women’s University
Appointed a member of the National Bar Examination
Commission, Code of Civil Procedure
Appointed External Audit & Supervisory Board Member of
MORINAGA MILK INDUSTRY CO., LTD.
Senior Partner, Nishi & Partners Attorneys and Counselors at
Law (to the present)
Appointed Outside Director (Member of the Audit &Supervisory Committee) of Nisshin Seifun Group Inc. (to thepresent)
Appointed Audit & Supervisory Board Member of the Company(to the present)(Significant concurrent posts of other entities)
Senior Partner, Nishi & Partners Attorneys and Counselors at Law
Outside Director (Member of the Audit & Supervisory Committee) of
Nisshin Seifun Group Inc.
(Attendance at the Board of Directors meetings held during this period)
100% (10 of 10)(Attendance at the Audit & Supervisory Board meetings held during thisperiod)100% (10 of 10)(Reason for nomination as candidate and expected role)
Mieko Tomita has specialized knowledge and broad insights cultivated as alawyer. She provides advice on strengthening the audits and supervision of
the Company’s business and corporate governance, as well as maintaining
and improving compliance. She has also played an appropriate role inaudits of business execution as Outside Audit & Supervisory Board
Member. We expect that she will continue to contribute to the Board of
Directors and the Audit and Supervisory Committee from an independent
position.
The Company has no business transactions with Nishi & Partners
Attorneys and Counselors at Law, at which Mieko Tomita serves as SeniorPartner. Therefore, there is no risk of her independence being affected bythis position.
Therefore, we propose the election of Mieko Tomita, who has continued
to contribute to the Company’s Board of Directors and the Audit &Supervisory Board from an independent position as Outside Director who
is an Audit and Supervisory Committee Member.
In addition, the Company has appointed Outside Audit &Supervisory
Board Member Mieko Tomita as an Independent Auditor as defined by
the Tokyo Stock Exchange and has duly notified the Tokyo Stock
Exchange.
Her term of office as Outside Audit & Supervisory Board Member of theCompany will have been one (1) year at the conclusion of the coming
shareholder meeting.

22

Number ofshares of theCompany
held by candidate
0 sharesNotes:
1. Yasuo Imai, Hidetoshi Yokoi, and Mieko Tomita are candidates for Outside Directors who are Audit and Supervisory Committee
Members.
2. We have entered into an agreement with Yasuo Imai, Hidetoshi Yokoi, and Mieko Tomita limiting their liability for damages as defined
under Article 423, Paragraph 1 of the Companies Act, in accordance with Article 427, Paragraph 1 of the Companies Act. If this item isapproved as proposed, we will enter into the same agreement with Yasuo Imai, Hidetoshi Yokoi, and Mieko Tomita limiting their liability
for damages.
3. We have entered into a directors and officers liability insurance agreement with an insurance company. The agreement covers damages
that may arise due to the insured directors and officers assuming liability for their execution of duties, or receiving a claim for the pursuitof such liability. All candidates for Directors who are Audit and Supervisory Committee Members shall be included as an insured under
the said insurance agreement, which is to be retained with the same terms and conditions at the next renewal.

23

(For Reference) Criteria for Independence of Outside Directors and Outside Audit & Supervisory Board Members
With regard to Independent Outside Directors and Outside Audit & Supervisory Board Members, the Company nominates candidates who
do not have any certain interest in the Company, and who can be expected to make frank comments without hesitation at Board of Directors
meetings, etc. Furthermore, in order to ensure such real independence, as minimum requirements, candidates must meet each of the following
conditions.
1. Business transactions between the Company and the company from which the candidate comes must amount to less than 2% of therespective consolidated sales of both companies.
2. The Company must not have any loans from the company from which the candidate comes (if the candidate comes from a bank.)
3. The Company must not have any important transactions such as advisory contracts with the candidate or the firm he works for (if thecandidate is a lawyer or other professional.)
4. The candidate must not come from the audit firm that is the Company’s Accounting Auditor.
5. There must be no other particular reasons that could give rise to a conflict of interest with the Company.
6. The candidate must not be the spouse or a relative within the second degree of anyone who does not meet the above conditions 1 through 5.
(For Reference) Expertise and Experience of Candidates for Items 3 and 4 (Skills Matrix)
GenderCorporate
Management

Research &Development

Internationality

Legal/Risk
Management

Male

●

●

●

●

Male

●

●

●

●

Male

●

●

●

Outside

Male

●

●

●

●

Outside

Male

●

●

●

●

OutsideFemale

●

●

●

Male

●

●

Name

Yoshiharu
Inaba
Kenji
Yamaguchi
Michael J.
Cicco
Kazuo
TsukudaMasaharu
Sumikawa
Naoko
YamazakiKatsuoKohari
KatsusyaMitsumuraYasuo Imai
Hidetoshi
Yokoi
Mieko
TomitaAudit andSupervisory
Committee Member
Audit andSupervisory
Committee Member
Audit andSupervisory
Committee Member
Audit andSupervisory
Committee Member
Audit andSupervisory
Committee Member

Male
OutsideMale

OutsideMale

OutsideFemaleFinance/
Accounting

●
●

●
●

●

●
●

24

Item 5Determination of the Amount of Remuneration, etc. for Directors (except for Directors Who Are Audit andSupervisory Committee Members)

The upper limit of the total annual remuneration, etc. for the Directors of the Company was set at the total amount of followings
by resolution of the 37th Ordinary General Meeting of Shareholders of June 28, 2006 and remains the same to date.
1) Fixed annual aggregate ceiling amount of ¥1 billion
2) Variable aggregate ceiling amount, which is set at the consolidated net income of each half year multiplied by 1/25 of thedividend payout ratio (%). (It should be noted, however, that the variable amount for the first half of the fiscal year shall be
paid in the second half of the relevant fiscal year and that for the second half shall be paid in the first half of the following
fiscal year.)
Note: The payout ratio (%) shall be calculated in accordance with the following
formula for each half year:
Payout ratio for the first half of the fiscal year (April to September)= Amount of interim dividend per share for said period
÷ Consolidated net income per share for said period × 100
Payout ratio for the second half of the fiscal year (October to March next year)= Amount of year-end dividend per share for said fiscal year÷ (Consolidated net income per share for said fiscal year
－ consolidated net income per share for first half of said fiscal year) × 100
If Item 2 “Amendments to Parts of the Articles of Incorporation” is approved as proposed, the Company will transition to a
Company with an Audit and Supervisory Committee.
Therefore, in accordance with the provisions of Article 361, Paragraphs 1 and 2 of the Companies Act, we propose to set theupper limit of the total annual remuneration, etc. for the Directors (except for Directors who are Audit and Supervisory Committee
Members) at the total of 1) fixed annual remuneration ceiling amount and 2) performance-based remuneration ceiling amount asstated below:
1) Fixed annual remuneration ceiling amount of ¥800 million (including ceiling amount of ¥100 million for Outside
Directors)
2) Performance-based remuneration ceiling amount, which is set at 0.7% of net income attributable to owners of parent
for the fiscal year prior to the General Meeting of Shareholders at which they are elected or reelected (provided,
however, it shall not exceed a three-year amount of fixed remuneration)
The amount was determined after comprehensively taking into account a decreased number of Directors, the current economic
environment, and other circumstances. In addition, the performance-based remuneration continues to enable the benefits ofincreased performance and the risk of declining performance to be shared with shareholders. Therefore, we believe that the amountis reasonable.
The current number of Directors is twelve (12), including four (4) Outside Directors. If Item 2 and Item 3 are approved as proposed,
the number of Directors (except for Directors who are Audit and Supervisory Committee Members) will be six (6), including
three (3) Outside Directors.
Remuneration for Internal Directors (except for Directors who are Audit and Supervisory Committee Members) is planned toconsist of 1) “fixed remuneration,” which is paid in a fixed amount, 2) “performance-based remuneration,” which is determinedby business performance, etc., and 3) “stock-based remuneration,” which requires an approval of Item 7 “Determination of
Remuneration for the Allotment of Restricted Stock to Directors (except for Directors Who Are Audit and Supervisory
Committee Members and Outside Directors).” The amount of “stock-based remuneration” shall be set aside separately from theamount of remuneration, etc., described in 1) and 2) above. Outside Directors (except for Directors who are Audit and Supervisory
Committee Members) are compensated with “fixed remuneration” payable in a fixed amount only, considering an independent
position from the Company's business operation.
The resolution regarding this proposal can only take effect after the amendments to the Articles of Incorporation proposed as Item
2 take effect.
25

Item 6

Determination of the Amount of Remuneration, etc.
Committee Members

for Directors Who Are Audit and Supervisory

If Item 2 “Amendments to Parts of the Articles of Incorporation” is approved as proposed, the Company will transition to a
Company with an Audit and Supervisory Committee.
Therefore, in accordance with the provisions of Article 361, Paragraphs 1 and 2 of the Companies Act, we propose that the annual
remuneration, etc. for Directors who are Audit and Supervisory Committee Members be up to ¥200 million.
As this takes into consideration the economic environment and other circumstances, we believe that the amount is reasonable.
If Item 2 and Item 4 are approved as proposed, the number of Directors who are Audit and Supervisory Committee Members will
be five (5), including three (3) Outside Directors.
The resolution regarding this proposal can only take effect after the amendments to the Articles of Incorporation proposed as Item
2 take effect.
Item 7

Determination of Remuneration for the Allotment of Restricted Stock to Directors (except for Directors Who
Are Audit and Supervisory Committee Members and Outside Directors)

If Item 2 “Partial Amendments to the Articles of Incorporation” and Item 5 “Determination of the Amount of Remuneration, etc. for
Directors (except for Directors who are Audit and Supervisory Committee Members),” pertaining to the transition to a Company with
an Audit and Supervisory Committee, are approved as proposed, the upper limit of the total annual remuneration, etc. for Directors(except for Directors who are Audit and Supervisory Committee Members) of the Company will be set as follows:
1) Fixed annual remuneration ceiling amount of ¥800 million (including ceiling amount of ¥100 million for Outside
Directors)
2) Performance-based remuneration ceiling amount, which is set at 0.7% of net income attributable to owners of parent
for the fiscal year prior to the General Meeting of Shareholders at which they are elected or reelected (provided,
however, it shall not exceed a three-year amount of fixed remuneration)
In order for Directors of the Company (except for Directors who are Audit and Supervisory Committee Members and Outside
Directors; hereinafter “Eligible Directors”) to share the benefits and risks of changes in stock prices with our shareholders, as wellas to be further motivated to contribute to increasing stock prices and improving corporate value, we propose to allot to Eligible
Directors shares of the Company’s common stock which are subject to a transfer restriction period and conditions for theacquisition of allotted shares by the Company without consideration (hereinafter “Restricted Stock”), as described below, on thecondition that Item 2 “Partial Amendments to the Articles of Incorporation” and Item 5 “Determination of the Amount of
Remuneration, etc. for Directors (except for Directors who are Audit and Supervisory Committee Members)” are approved as
proposed.
Accordingly, comprehensively taking into account various aspects such as contributions made by Eligible Directors, we propose,
separately from the abovementioned amount of remuneration, etc. for Directors, that the total amount of monetary compensation
claims to be paid as remuneration for Eligible Directors for Restricted Stock be set at not more than ¥350 million per year.
In addition, the details of the allotment of Restricted Stock, including the abovementioned amount of remuneration and theinformation stated in “Specific Details and the Maximum Number of Shares of Restricted Stock to Be Granted to Eligible
Directors” below, are determined after thorough consideration of various factors such as contributions made by Eligible Directors
and the policy for determining details of remunerations, etc. for individual Directors of the Company (if this Item is approved as
proposed, the said policy will be modified in order to be consistent with the content of the proposal approved), and we believethat those details are reasonable.
Currently, the Company has twelve (12) Directors, including four (4) Outside Directors. If Item 2 and Item 3 are approved as
proposed, the number of Eligible Directors will be three (3).

26Specific Details and the Maximum Number of Shares of Restricted Stock to Be Granted to Eligible Directors
1. Allotment of and payment for Restricted Stock
The Company shall grant Eligible Directors monetary compensation claims as remuneration pertaining to Restricted Stock within
the annual limit mentioned above, based on the resolution of the Company’s Board of Directors. Each Eligible Director shallreceive the allotment of Restricted Stock by making in-kind contribution of all of the monetary compensation claims granted.
The amount of Restricted Stock to be compensated shall be determined by the Board of Directors, within a range that is notparticularly advantageous to the Eligible Directors who receive the Restricted Stock, based on the closing price of the Company’scommon stock on the Tokyo Stock Exchange on the trading day prior to the date of the Board of Directors’ resolution concerning
the issuance or disposal of the Restricted Stock (or the closing price on the trading day immediately before the said day if notransaction is made on such business day).
The abovementioned claims on Restricted Stock shall be granted on the condition that the Eligible Directors have consented tothe in-kind contribution described above and entered into a Restricted Stock allotment agreement which includes the detailsprescribed in section 3. below.
2. Total number of shares of Restricted Stock
The total number of shares of Restricted Stock to be allotted to the Eligible Directors is no more than 28,000 in each fiscal year.
However, on or after the date of the approval of this Item, this total number of shares of Restricted Stock may be adjusted withinreasonable limits if a stock split (including an allotment of the Company’s common stock without consideration) or a reverse
stock split of the Company’s common stock takes place, or if other similar circumstances arise in which adjustments become
necessary to the total number of shares of the Company’s Restricted Stock to be allotted.
3. Details of the Restricted Stock allotment agreement
In the allotment of Restricted Stock, the Company and each of the Eligible Directors who receive Restricted Stock shall enter into a
Restricted Stock allotment agreement based on the resolution of the Company’s Board of Directors. Broadly speaking, such agreement
shall include the following provisions:(1) Details of transfer restrictions
An Eligible Director who has received an allotment of Restricted Stock shall be restricted from transferring, establishing asecurity interest or mortgage on, giving as a gift during life or a bequest to the third party, or otherwise disposing of, theRestricted Stock allotted (the “Allotted Shares”), during the period from the date of allotment of the Restricted Stock until
he/she resigns or retires from all of Director, Managing Officer, and a permanent employee of the Company and all of its
subsidiaries (the said restrictions shall be hereinafter referred to “Transfer Restrictions,” and the said restriction period shallbe referred to “Transfer Restriction Period”).
(2) Acquisition of Restricted Stock without consideration
In the event that an Eligible Director who has received an allotment of Restricted Stock resigns or retires from all of Director,
Managing Officer, and a permanent employee of the Company and all of its subsidiaries during the period from the startdate of the Transfer Restriction Period until the day before the date of the first Ordinary General Meeting of Shareholdersof the Company after the start of the Transfer Restriction Period, the Company shall rightfully acquire the Allotted Shares
without consideration, except in cases where the Board of Directors of the Company finds a valid reason. In addition, theCompany shall rightfully acquire the Allotted Shares without consideration at the expiration of the Transfer Restriction
Period described in section (1) above if there are any Allotted Shares for which the Transfer Restrictions have not been liftedpursuant to the provisions of the conditions for lifting Transfer Restrictions, described in section (3) below.

27

(3) Lifting of Transfer Restrictions
The Company shall lift the Transfer Restrictions of all of the Allotted Shares at the expiration of the Transfer Restriction
Period on the condition that the relevant Eligible Director has served continuously in Director, Managing Officer, or apermanent employee of the Company or any of its subsidiaries during the period from the start date of the Transfer
Restriction Period until the date of the first Ordinary General Meeting of Shareholders of the Company after the start of theTransfer Restriction Period.
However, if the Eligible Director resigns or retires from all of Director, Managing Officer, and a permanent employee of theCompany and all of its subsidiaries before the expiration of the Transfer Restriction Period due to a reason that theCompany’s Board of Directors deems reasonable, the Company shall adjust the number of the Allocated Shares whose
Transfer Restrictions are to be lifted as well as the timing of the lifting of the Transfer Restrictions in a reasonable manner,as necessary.
(4) Handling in cases of organizational restructuring, etc.
If, during the Transfer Restriction Period, a merger agreement under which the Company becomes the disappearing company,a share exchange agreement, or a share transfer plan under which the Company becomes a wholly-owned subsidiary, or any
other matter relating to organizational restructuring, etc. is approved at an Ordinary General Meeting of Shareholders of theCompany (or at a meeting of the Company’s Board of Directors, if such organizational restructuring, etc. does not require
the approval of the Company’s Ordinary General Meeting of Shareholders), provided that the effective date of suchorganizational restructuring, etc. comes before the expiration of the Transfer Restriction Period (hereinafter the “Time ofApproval of Organizational Restructuring, etc.”), and also if the Director who has received an allotment of Restricted Stockresigns or retires from all of Director, Managing Officer, and a permanent employee of the Company and all of its
subsidiaries in association with the organizational restructuring, etc., the Company shall lift the Transfer Restrictions before
the effective date of the said organizational restructuring, etc., with respect to the number of Allotted Shares reasonably
determined in consideration of the period from the start date of the Transfer Restriction Period until the date of approval ofsuch organizational restructuring, etc., based on the resolution of the Company’s Board of Directors.
In addition, at the Time of Approval of Organizational Restructuring, etc., the Company shall rightfully acquire, without
consideration, the Allotted Shares for which the Transfer Restrictions have not been lifted on and as of the business day
prior to the effective date of the said organizational restructuring, etc.
(For Reference)

After the conclusion of this Ordinary General Meeting of Shareholders, the Company plans to grant to its Managing Officers(except for those who are Directors) a type of restricted stock that is similar to the Restricted Stock described above.

- END -

28

Attachments to the Notice of Convocation of the General Meeting of Shareholders
BUSINESS REPORT(April 1, 2020 through March 31, 2021)
1.

Summary of Current Status of the FANUC Group(1) Business trends and achievements
Regarding the business environment surrounding the FANUC Group during this period (April 1, 2020 – March 31, 2021), themarket conditions became harsh owing to factors including an ongoing global trend of reduction in capital investment due tothe impact of the spread of the coronavirus (COVID-19). However, in addition to recovery first taking place in China, otherregions also rebounded gradually from around the second quarter.
Under these circumstances, the FANUC Group strived to maintain the delivery of products and service activities for ourcustomers while placing utmost priority on preventing the spread of COVID-19. In addition, to deal with changing market
conditions, we fortified our corporate structure by reducing expenses and optimizing business operations, among other measures.
During the fiscal year ended March 31, 2021, FANUC posted consolidated net sales totaling ¥551,287 million, up 8.5%,
consolidated ordinary income totaling ¥128,744 million, up 25.2%, and net income attributable to owners of parent totaling¥94,012 million, up 28.1%, compared with the previous fiscal year.
During this period, the new collaborative robot “FANUC Robot CRX Series”, which is equipped with all of “Safety,” “Ease ofUse,” and “High Reliability,” won the “METI Minister's Award in METI’s Ninth Robot Awards program,” the “Nikkan Kogyo
Shimbun Best 10 New Product Awards 2020/Main Award,” and the “Nikkei Business Daily Awards/2020 Nikkei Superior
Products and Services Awards.”
The following is a summary of the results for each business division:[FA Division]
In the FA Division, demand from the machine tool industry, the primary market for CNC systems, recovered earlier andremained strong in China. Demand in India is also undergoing a recovery, especially for agricultural machinery andmotorcycles. Although demand in Japan, Europe, South Korea, and Taiwan had remained sluggish, these countries are seeing
gradual increases in demand with machine exports to the Chinese market and other markets. As a result, net sales of CNC
systems of the FANUC Group increased compared with the previous fiscal year.
In terms of development, we added a high-speed model, equipped with a state-of-the-art multi-core CPU, to our high-end CNC,
“FANUC Series 30i/31i/32i-B Plus,” whose high machining performance has been further refined. We also added a new
package containing axis extension for incorporating peripheral axes and a 15-inch display to standard CNC “FANUC Series
0i-F Plus.” For servo, we proceeded with the improvement of “Servo Learning Oscillation” that achieves secure chip shredding.
In addition, we enhanced our lineup and developed new functions with the aim of expanding sales into various markets.
With regard to our lasers, the Chinese market and the European market are on a recovery trend, but competition from overseas
manufacturers remains fierce.
In terms of development, we developed a function for connecting fiber lasers with laser output of up to 12 kW to robots to meetthe requirements of the welding market for high-output fiber lasers, whose applications are expanding. There are expectations
for sales expansion into the welding market going forward.
The FA Division posted consolidated sales totaling ¥149,240 million, up 4.2% compared with the previous fiscal year, and FA
Division sales accounted for 27.1% of consolidated net sales.

29

[ROBOT Division]
In the ROBOT Division, sales to the general industries were strong, and sales to the automobile industry also increased due toEV-related demand in the Americas. In China, in addition to IT-related sales, sales for EVs, construction machinery, heavymachinery, and other machining applications were also strong. In Europe, sales to the general industrial sector were strong, but
sales to the automobile industry declined year on year due to a trough in capital investment, and sales were sluggish in Japan.
In terms of development, we developed and launched the “FANUC Robot CRX Series,” which has a function that uses inbuilt
sensors to make the arm stop safely if it comes into contact with operators, and features direct teaching for direct operation of
the arm and intuitive drag-and-drop programming using a tablet. These features will make it easier for customers who havenever used robots before to introduce them. We have also added new models with larger payloads of 12kg and 20 kg to our
SCARA robot line-up, “FANUC Robot SR Series.” We also developed the “3D Vision Sensor 3DV/1600,” which can measurewider ranges at higher speeds than previous sensors. These and other new products and functions are expected to further expand
the range of applications of FANUC robots.
The ROBOT Division posted consolidated sales totaling ¥210,024 million, up 3.7% compared with the previous fiscal year.
ROBOT Division sales accounted for 38.1% of consolidated net sales.
[ROBOMACHINE Division]
In the ROBOMACHINE Division, sales of the ROBODRILLs (compact machining centers) increased due to a sharp increasein demand from the latter part of the period, mainly in China, for use in the computer, tablet, and smartphone markets. Sales of
ROBOSHOTs (electric injection molding machines) also recovered from the latter part of the period due to an increase indemand from IT-related and medical markets, mainly in China, Europe, and the United States. With regard to the ROBOCUTs(wire-cut electric discharge machines), sales recovered from the latter part of the fiscal year, but declined year on year.
In terms of development, in ROBODRILL, we developed a new “FANUC ROBODRILL α-DiB Plus series” that offers reduced
machining cycle time, improved ease of use, and higher reliability. For ROBOSHOT, we developed the “FANUC ROBOSHOT
α-SiB series,” which, in addition to improved molding performance, features a 21.5-inch landscape wide-screen display for
improved operability. For ROBOCUT, we revamped the structural design for stronger rigidity and developed the “FANUC
ROBOCUT α-CiC series,” achieving improvements in machined surface roughness and reduced machining time. With regard
to ROBONANO (ultra-precision machine), we have worked to improve ease of use with developments such as “Smart MForm,” which enables the functional upgrades for direct operation of peripheral equipment from the operating screen, as wellas on-machine measurement and compensated machining of workpiece forms without removing the workpiece.
The ROBOMACHINE Division posted consolidated sales totaling ¥114,518 million, up 52.9% compared with the previous
fiscal year. ROBOMACHINE Division sales accounted for 20.8% of consolidated net sales.
[Service Division]
The Service Division received fewer requests for the Company’s services on account of suspended operations at customers’
factories and falling factory operating rates, among others, due to the impact of lockdowns in countries throughout the world in
the first quarter. However, requests for the Company’s services recovered thereafter.
The Service Division posted consolidated sales totaling ¥77,505 million, down 11.5% compared with the previous fiscal year.
Service Division sales accounted for 14.0% of consolidated net sales.
【Approaches to IoT and AI】
In our efforts to utilize IoT technology, we developed “PMA-Monitor,” an application for monitoring equipment such asmachine tools in the factory for our FIELD system, which is an open platform that connects machines, sensors and other devicesof various companies in manufacturing sites, and allows a wide range of companies to participate in the development ofapplication software. We also established DUCNET Co., Ltd. together with Fujitsu Limited and NTT Communications
Corporation, aimed at realizing “Digital Utility Cloud,” which will offer a cloud services platform to support digitaltransformation (DX) in the machine tool industry and other industries in the manufacturing sector. Our aims are to contributeto the further strengthening of the manufacturing capabilities of the companies that use “Digital Utility Cloud” and to create an30

ecosystem in which machinery manufacturers, users of machinery, trading companies, IT vendors and other participatingcompanies can be both service providers and service users.
With regard to AI, we are promoting the development of more practical AI functions for use in all products of the FA, ROBOT,ROBOMACHINE, and FIELD system. For example, the AI servo tuning (FA), AI path control (ROBOT), and AI thermal
displacement compensation (ROBODRILL, ROBOCUT) functions that we have recently developed have already been releasedin the markets of each product group, where they are contributing to improvements in the operating rate, ease of use, andmachining precision of manufacturing equipment in actual manufacturing sites. In addition, our Next-Generation Technology
Laboratory is currently developing new AI functions that will be launched in the market over the next few years, and has begun
research on fundamental AI technologies that will lay the foundations for the future. We also utilize AI technologies to makeall products of the FA, ROBOT, ROBOMACHINE, and FIELD system more intelligent, in order to differentiate ourselvesfrom our competitors.
【Research and Development】
In an effort to contribute to automating and increasing efficiency in customers’ manufacturing, FANUC’s CNC Hardware
Research and Development Division, CNC Software Research and Development Division, SERVO Research and Development
Division, LASER Research and Development Division, ROBOT Mechanical Research and Development Division, ROBOTSoftware Research and Development Division, ROBODRILL Research and Development Division, ROBOSHOT Researchand Development Division, ROBOCUT Research and Development Division, and ROBONANO Research and Development
Department focused on developing various new competitive products and features by raising the level of “high performance”
and ease of use, rooted in high reliability, and successfully launched them in the market.
FANUC’s Next-Generation Technology Laboratory engaged in research and development of next-generation element
technologies applicable to FANUC products.
In addition, the IoT Business Division progressed in the development of FIELD system and Digital Utility Cloud, among
others.
(2) Capital Investment
In terms of capital investment during the fiscal year under review, we took measures such as postponing non-urgent capital
investments in the beginning of the fiscal year, taking the harsh business environment into consideration. Due to a sudden
upturn in orders received in the second half of the fiscal year, we urgently engaged in capital investment aimed at building
systems for increased production. Total capital investment during the fiscal year under review was down from the previous
fiscal year at ¥18,553 million.
(3) Financing
No external funding was required since FANUC met all of its funding requirements in the fiscal year under review with its own
resources.
(4) Challenges
As FANUC products are production goods that are significantly affected by economic changes, we continue management froma long-term perspective without being affected by short-term events.
The trade friction between the U.S. and China has prolonged, and with the impacts of the global spread of COVID-19, it isanticipated that the situation will remain difficult and unpredictable for some time. On the other hand, the demand for factory
automation is expected to grow over the medium to long-term.
Guided by the slogan “one FANUC,” the FANUC Group will take maximum advantage of our unique strength in uniting ourFA, ROBOT, and ROBOMACHINE Divisions to jointly provide total solutions and take care of customers throughout theworld. In particular, we perceive collaboration between CNC machine tools and ROBOTs, and between ROBOMACHINEs
31

and ROBOTs, as one of our key themes, and will develop products accordingly.
In addition, the FANUC Group will adhere to its origins as a producer of production goods to be used at manufacturing sites,
and will be thorough in implementing our slogan “Reliable, Predictable, Easy to Repair” in product development, to minimize
downtime in our customers’ factories and improve their operating rates. Moreover, we will develop products with an evengreater focus on ease of use, in order to respond to the increase in demands for factory automation, as acquiring skilled workers
becomes more difficult.
Furthermore, we will practice our basic policy of “Service First” in providing high-level maintenance services pursuant to
FANUC’s global standard anywhere in the world, and “lifetime maintenance” for as long as our customers use our products. In
particular, we will continue to focus on “lifetime maintenance,” as it is one of the core strengths of the FANUC Group, which
is difficult for competitors to imitate.
The FANUC Group believes that IoT and AI are indispensable technologies for FANUC to continue developing and launching
highly competitive products to the market. By aggressively adopting these technologies in all areas of FA, ROBOT, andROBOMACHINE products, we will further promote customers’ production efficiency. We will continue to develop IoTtechnologies, such as the “FIELD system” open platform. With regard to AI technologies, we will develop functions that will
be useful in actual manufacturing sites. For technologies that the Company does not possess, we will continue to actively
collaborate with other companies, and strive to engage in speedy development.
We will pursue measures to strengthen our corporate structure from a long-term perspective, such as reinforcing productcompetitiveness, strengthening sales and service activities, promoting automization and robotization in factories, and enhancing
administrative efficiency. In addition, as a supplier of production goods, we are establishing multiple production sites and service
centers in order to fulfill our responsibilities as a supplier and maintain service activities under any circumstance. Furthermore,
we are also fortifying our supply chain by increasing the number of parts suppliers and maintaining appropriate inventory levels
for parts.
Along with such activities, the FANUC Group is also striving to maintain its strong corporate structure by reducing expenses
and time, and streamlining business operations. In addition, we consider human resources as being most vital for achieving
medium and long-term growth. From this perspective, we will work on the key issues of creating better working environmentsfor our employees and further improving employee motivation.
With regard to management, we will focus even more on the fact that FANUC’s products can make major contributions to theachievement of SDGs. In addition to the operating income ratio, ordinary income ratio, and ROE, market shares will also be
considered to be an important business indicator, and decisions will be made comprehensively with these in mind.
As a pressing issue, the FANUC Group is prioritizing the prevention of COVID-19 infection among its customers, partners,
employees, and family members, along with containing its spread, while striving to continue to provide products and services
to customers.
The FANUC Group will continue to thoroughly practice our basic principles of “Strict Preciseness and Transparency,” andpromote such measures united as one group in all aspects, in order to gain more customer confidence and trust in the FANUC
Group while adapting to dramatic changes in the environment, in our efforts to become a company that will continue forever.
Thank you for your continued support and assistance to FANUC.

32

(5) Assets and Profits
1) The FANUC GroupItem
Net sales
Ordinary income
Net income
Net income per share (Yen)
Total assets
Net assets

FY 2017(49th term)
726,596249,525
181,957
938.66
1,728,227
1,467,630

FY 2018(50th term)
635,568
183,459
154,163795.34
1,625,340
1,445,146

FY 2019(51st term)
508,252
102,816
73,371381.891,512,499
1,362,865(Millions of yen)
FY 2020(52nd term)
551,287
128,744
94,012490.11
1,625,191
1,435,554

Note: The “Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ Statement No. 28, February 16,2018), etc. have been applied from the beginning of the fiscal year ended March 31, 2019. The standards are retroactively
applied to adjust figures for the fiscal year ended March 31, 2018.
2) The Company
Item
Net sales
Ordinary income
Net income
Net income per share (Yen)
Total assets
Net assets

FY 2017(49th term)
572,963
196,196
147,664761.75
1,397,384
1,215,001

FY 2018(50th term)
470,644
147,956
136,326
703.31
1,292,323
1,173,464

FY 2019(51st term)
352,407
67,58654,697284.691,177,585
1,084,633(Millions of yen)
FY 2020(52nd term)
415,939
87,88970,451367.281,236,223
1,116,242

Note: The “Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ Statement No. 28, February 16,2018), etc. have been applied from the beginning of the fiscal year ended March 31, 2019. The standards are retroactively
applied to adjust figures for the fiscal year ended March 31, 2018.

(6) Principal Businesses
The principal businesses of the FANUC Group are the development, manufacture, sale, and maintenance service of the
products described in the following table:
Division
FA Division
ROBOT Division
ROBOMACHINE Division

Main products
CNC systems (CNC and servo motors), lasers
Robots (including robot systems)
ROBODRILL (compact machining center), ROBOSHOT (electric injection molding
machine), ROBOCUT (wire-cut electric discharge machine), ROBONANO (ultra
precision machine)

In addition to the above, we also engaged in business related to the FIELD system, an open IoT platform for manufacturing
sites.

33

(7) Principal Sites
Head office
Research and Development

Branches

Factories
Training Centers

Oshino-mura, Minamitsuru-gun, Yamanashi Prefecture
CNC Hardware Research and Development Division, CNC Software Research andDevelopment Division, SERVO Research and Development Division, LASER Researchand Development Division, ROBOT Mechanical Research and Development Division,
ROBOT Software Research and Development Division, ROBODRILL Research andDevelopment Division, ROBOSHOT Research and Development Division, ROBOCUT
Research and Development Division, ROBONANO Research and Development
Department, Next-Generation Technology Laboratory (Oshino-mura andYamanakako-mura, Minamitsuru-gun, Yamanashi Prefecture)
Hino Branch (Hino City), Nagoya Branch (Komaki City), Osaka Branch (Osaka City),
Hokkaido Branch (Ebetsu City), Tohoku Branch (Sendai City), Tsukuba Branch (Tsukuba
City), Maebashi Branch (Maebashi City), Echigo Branch (Mitsuke City), Hakusan
Branch (Hakusan City), Chugoku Branch (Okayama City), Hiroshima Branch (HiroshimaCity), Kyushu Branch (Kikuyo-machi, Kikuchi-gun, Kumamoto
Prefecture)
Headquarters Factory (Oshino-mura and Yamanakako-mura, Minamitsuru-gun,
Yamanashi Prefecture), Mibu Factory (Mibu-machi, Shimotsuga-gun, Tochigi
Prefecture), Tsukuba Factory (Chikusei City), Hayato Factory (Kirishima City)
FANUC ACADEMY (Oshino-mura, Minamitsuru-gun, Yamanashi Prefecture)(8) Employees
Number of employees

The Company
The FANUC Group

4,105
8,256

34

(9) Principal Subsidiaries and Affiliated Companies
1) Principal Subsidiaries
Percentage of equity
Company name
Capital stock
participation (%)
FANUC America
Corporation

US$ 157,300
thousand100

FANUC Europe
Corporation€ 110,961
thousand100

KOREA FANUCCORPORATION

Won 32,364 million

95

TAIWAN FANUCCORPORATION

NT$ 1,448 million

100

FANUC INDIA
PRIVATE LIMITED

Rupee 290 million

100

SHANGHAI-FANUC
Robomachine CO.,
LTD.
FANUC
PERTRONICS LTD

US$ 21,000
thousand51¥327 million

100

FANUC SERVO LTD¥450 million

1002) Principal Affiliated Companies

Principal businesses
Development, manufacture, sale and maintenanceservices of robots and robot systems as well as saleand
maintenance services of CNC systems, lasers
and ROBODRILL
Sale and maintenance services of CNC systems, lasers,
robots, ROBODRILL, ROBOSHOT and ROBOCUT
as well as manufacture, sale and maintenance servicesof robot systems
Sale and maintenance services of CNC systems, lasers,
robots, ROBODRILL, ROBOSHOT and ROBOCUT
as well as manufacture, sale and maintenance servicesof robot systems
Knock-down manufacture, sale and maintenanceservices of CNC systems, sale and maintenanceservices of lasers and robots, as well as manufacture,sale and maintenance services of robot systems
Sale and maintenance services of CNC systems, lasers,
robots, ROBODRILL, ROBOSHOT and ROBOCUT,
as well as manufacture, sale and maintenance servicesof robot systems
Sale and maintenance services of ROBODRILL,ROBOSHOT and ROBOCUT
Manufacture of parts of CNC systems, lasers, robots,
ROBODRILL, ROBOSHOT and ROBOCUT
Manufacture of servo motors

Company name

Capital stock

Percentage of equity
participation (%)

BEIJING-FANUC
Mechatronics CO.,LTD.

US$ 11,300
thousand50

SHANGHAI-FANUC
Robotics CO., LTD.

US$ 12,000
thousand50

Principal businesses
Knock-down manufacture, sale and maintenanceservices of CNC systems as well as sale andmaintenance services of lasers
Sale and maintenance services of robots, as well as
manufacture, sale and maintenance services of robot
systems

35

2.

Matters Concerning the Shares of the Company(1) Total number of shares authorized to be issued by the Company:

400,000,000 shares(2) Total number of issued shares:

201,922,097 shares(3) Number of shareholders:

52,693(4) The ten largest shareholders:Number of shares(In thousands)

Percentage of equity
participation(%)

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

32,663

17.0

Custody Bank of Japan, Ltd. (Trust Account)

15,0487.8

SSBTC Client Omnibus Account

5,405

2.8

4,343

2.3

JPMorgan Chase Bank 380055

3,958

2.1

State Street Bank West Client - Treaty 505234

2,956

1.5

2,935

1.5

The Bank of New York Mellon 140044

2,828

1.5

Government of Norway

2,728

1.4

Custody Bank of Japan, Ltd. (Trust Account 5)

2,691

1.4

Name

Citibank, N.A. - NY, as Depositary Bank for Depositary
Shareholders

Custody Bank of Japan, Ltd. (Securities Investment Trust
Account)

Note:

The percentages of equity participation are calculated after subtracting the number of treasury shares (10,108 thousand
shares) from the total number of issued shares.

36

3. Directors and Audit & Supervisory Board Members(1) Names of Directors and Audit & Supervisory Board Members, etc.
Position

Responsibilities
or significant concurrent posts of other entities

Name

Representative Director, Chairman

Yoshiharu Inaba

Representative Director,
President, CEO and CIO

Kenji Yamaguchi

Representative Director,
Senior Executive Vice President and CTO

Hiroyuki Uchida

General Manager, ROBOMACHINE Business Division

Representative Director,
Senior Executive Vice President and CFO

Yoshihiro Gonda

General Manager, Corporate Administration Division

Director,
Senior Executive Vice President and CISO

Yutaka Saito

General Manager, IoT Business Division

Director,
Executive Managing Officer

Kiyonori Inaba

General Manager, ROBOT Business Division

Director,
Executive Managing Officer

Hiroshi Noda

General Manager, FA Business Division

Director

Michael J. Cicco

President and CEO, FANUC America Corporation

Director

Kazuo Tsukuda

Executive Corporate Advisor of Mitsubishi Heavy Industries, Ltd.

Director

Yasuo Imai

Director, Vice Chairman of the Board of AIR WATER INC.

Director

Masato Ono

Director of authorized NPO, the Gold Ribbon Network

Director

Naoko Yamazaki

Representative Director, Space Port Japan Association

Standing Audit & Supervisory Board
MemberKatsuo Kohari

Audit & Supervisory Board Member

Katsuya Mitsumura

Founder and head of Katsuya Mitsumura C.P.A. and Tax Accountant
OfficeAudit & Supervisory Board Member

Masaharu Sumikawa

President of Tsukuba Global Innovation Promotion Agency

Audit & Supervisory Board Member

Hidetoshi Yokoi

Professor Emeritus of the University of Tokyo
Field II Program Officer, Adaptable and Seamless Technology Transfer
Program through Target-driven R&D of Japan Science and Technology
AgencyAudit & Supervisory Board Member

Mieko Tomita

Senior Partner, Nishi & Partners Attorneys and Counselors at Law

President and Representative Director of Mito Country Club Co., Ltd.

Notes:

1. Directors Kazuo Tsukuda, Yasuo Imai, Masato Ono and Naoko Yamazaki are Outside Directors.
2. Audit & Supervisory Board Members Masaharu Sumikawa, Hidetoshi Yokoi and Mieko Tomita are Outside Audit &Supervisory Board Members.
3. Audit & Supervisory Board Member Katsuya Mitsumura is a certified public accountant and possesses commensurate
knowledge regarding finances and accounting.
4. Other significant concurrent posts:
Representative Director and Chairman Yoshiharu Inaba is also an Outside Director of TOPCON CORPORATION.
Outside Director Kazuo Tsukuda is also an Outside Director of Mitsubishi Research Institute, Inc., Outside Director(Audit and Supervisory Committee Member) of Yamaguchi Financial Group, Inc., and Outside Director of Internet
Initiative Japan Inc.
Outside Director Yasuo Imai is also a Chairman of Japan Industrial and Medical Gases Association.
Outside Director Masato Ono is also an Outside Director of Nippon Light Metal Holdings Company, Ltd.
Outside Director Naoko Yamazaki is also a Member of the Committee on National Space Policy under the Cabinet Office,Outside Director of OPTORUN Co., Ltd., and Outside Director of TOPCON CORPORATION.
Audit & Supervisory Board Member Katsuya Mitsumura is also an Outside Director (Audit & Supervisory Committee
Member) of AXELL CORPORATION and Outside Director of INABA SEISAKUSHO Co., Ltd.
Outside Audit & Supervisory Board Member Mieko Tomita is also an Outside Director (Member of the Audit &Supervisory Committee) of Nisshin Seifun Group Inc.
None of the companies in which the Outside Directors or Outside Audit & Supervisory Board Members concurrently
hold posts have special relations with FANUC CORPORATION.

37

5. The Company has named the four Outside Directors Kazuo Tsukuda, Yasuo Imai, Masato Ono and Naoko Yamazaki as
Independent Directors and the three Outside Audit & Supervisory Board Members Masaharu Sumikawa, Hidetoshi
Yokoi and Mieko Tomita as Independent Auditors as defined by the Tokyo Stock Exchange and has duly notified theTokyo Stock Exchange.

(2) Outline of the Directors and Officers Liability Insurance Contract
The Company has concluded a directors and officers liability insurance contract provided for in Article 430-3, Paragraph
1 of the Companies Act with an insurance company. The insurance contract covers any damages, etc. that may arise due
to insured Directors, etc. assuming liability for the execution of their duties or receiving a claim for the pursuit of suchliability.
The insured under the directors and officers liability insurance contract are the Directors, Audit & Supervisory Board
Members, Managing Officers, key employees, and the Company. The insurance premiums are fully paid by theCompany for all insured parties.

(3) Remuneration, etc., payable to the Directors and Audit & Supervisory Board Members in the fiscal year underreview
1) Matters concerning the policy for determination of Directors’ individual remuneration
The Company has established a policy for determining Directors’ individual remuneration (hereinafter, “determination
policy”), the outline of which is as follows.
• Fixed remuneration is determined according to the position of each Director.
• Performance-linked remuneration is linked, in principle, to net income and dividend payout ratio, in the same way
as for shareholder returns.
• Directors’ remuneration is composed of fixed remuneration and performance-linked remuneration. In setting thepercentages of these two types of remuneration, factors such as position, duties, and performance are taken into
comprehensive account.
• Performance-linked remuneration is not paid to Outside Directors.
• The President is authorized to determine the Directors’ individual remuneration, based on the advice of theNomination and Remuneration Committee, which is chaired by an Outside Director and the majority of which iscomposed of Independent Outside Directors.
The determination policy is decided by resolution of the Board of Directors.
2) Matters concerning resolutions of the General Meeting of Shareholders regarding the remuneration, etc. of Directors
and Audit & Supervisory Board Members.
The upper limit of the total annual remuneration, etc. for Directors was set at the total amount of followings by resolutionof the 37th Ordinary General Meeting of Shareholders of June 28, 2006.
(i) Fixed annual aggregate ceiling amount of ¥1 billion(ii) Variable aggregate ceiling amount, which is set at the consolidated net income of each half year multiplied by 1/25of the dividend payout ratio (%). (It should be noted, however, that the variable amount for the first half of the fiscal
year shall be paid in the second half of the relevant fiscal year and that for the second half shall be paid in the firsthalf of the following fiscal year.)
Note: The payout ratio (%) shall be calculated in accordance with the following formulafor each half year:
Payout ratio for the first half of the fiscal year (April to September)= Amount of interim dividend per share for said period
÷ Consolidated net income per share for said period × 100
Payout ratio for the second half of the fiscal year (October to March next year)= Amount of year-end dividend per share for said fiscal year÷ (Consolidated net income per share for said fiscal year
— consolidated net income per share for first half of said fiscal year) × 100

38

The number of Directors at the conclusion of that Ordinary General Meeting of Shareholders was 15.
The upper limit of the total annual remuneration, etc. for Audit & Supervisory Board Members was set at ¥250 million
by resolution of the 45th Ordinary General Meeting of Shareholders of June 27, 2014. The number of Audit &Supervisory Board Members at the conclusion of that Ordinary General Meeting of Shareholders was five.
3) Matters concerning the delegation of determination of Directors’ individual remuneration, etc.
Based on authority resolved by the Board of Directors, President, CEO and CIO, Kenji Yamaguchi, determines the
specific content of Directors’ individual remuneration.
The nature of this authority is that the amount of individual Directors’ remuneration is to be decided within the upper
limit approved by the General Meeting of Shareholders described in 2) above, based on the advice of the Nomination
and Remuneration Committee.
The reason for delegating this authorization is that the President has a comprehensive view of the Company’s overall
performance and is the most suited to evaluating the respective businesses for which the individual Directors are
responsible.
To ensure that this authorization is exercised appropriately by the President, the Board of Directors seeks the advice of
the Nomination and Remuneration Committee, which is chaired by an Outside Director and the majority of which iscomposed of Independent Outside Directors, before taking measures including the above-mentioned decisions.
Because the Directors’ individual remuneration amounts are determined after these procedures have been undertaken,
the Board of Directors judges that the content of those determinations is in line with the determination policy.
4) Total amounts, etc. of Directors’ and Audit & Supervisory Board Members’ remuneration, etc.
Total amount by remuneration type(million yen)
Total amount of
Number of
Officer category
remuneration, etc.
Performanceeligible officers
Fixed(million yen)
linkedremuneration
remuneration, etc.
Directors
938
247
13
1,185
(of which, Outside
(68)
(68)
(—)
(4)
Directors)
Audit & Supervisory Board
Members
153
153
6—(of which, Outside Audit &
(54)
(54)
(4)
Supervisory Board
Members)
Note: Directors are paid bonuses as performance-linked remuneration. The performance indicators selected as thebasis for calculation of amounts of performance-linked remuneration are net income and dividend payout ratio.
These performance indicators were chosen so that Directors could share with shareholders the benefits of
upturns in performance and the risks of downturns in performance. Position, duties and other factors arecomprehensively considered in the calculation of the amounts of performance-based remuneration.
Trends in net income, including for the fiscal year under review, are as shown in (5) Assets and Profits. Trends
in dividend payout ratios are shown below.

Dividend payout ratio

FY 2017

FY 2018

FY 2019

FY 202060.0%

126.1%(of which, special
dividend: 66.1%)

78.6%(of which, special
dividend: 18.6%)

60.0%

39

(4) Matters concerning the Outside Directors and Outside Audit & Supervisory Board Members
Major activities
Name
Kazuo Tsukuda

Yasuo Imai

Masato Ono

Naoko Yamazaki

Masaharu Sumikawa

Hidetoshi Yokoi

Mieko Tomita

Major activities
He attended 11 of 12 meetings of the Board of Directors. He possesses wide experienceand knowledge obtained as a long-serving corporate executive, and the Company expects
him to serve a supervisory function from those perspectives. He fulfilled an appropriaterole as an Outside Director of the Company, including supervising and providing advice
about the execution of the Company’s business, such as speaking out whenever necessary
from those perspectives in meetings of the Board of Directors. He also attended theNomination and Remuneration Committee as Chair and expressed his opinions whenevernecessary.
He attended all of 12 meetings of the Board of Directors. He possesses wide experienceand knowledge obtained as a long-serving government official and corporate executive, andthe Company expects him to serve a supervisory function from those perspectives. He
fulfilled an appropriate role as an Outside Director of the Company, including supervisingand providing advice about the execution of the Company’s business, such as speaking out
whenever necessary from those perspectives in meetings of the Board of Directors. He also
attended the Nomination and Remuneration Committee as a Committee Member andexpressed his opinions whenever necessary.
He attended all of 12 meetings of the Board of Directors. He possesses wide experienceand knowledge obtained as a long-serving corporate executive, and the Company expects
him to serve a supervisory function from those perspectives. He fulfilled an appropriaterole as an Outside Director of the Company, including supervising and providing advice
about the execution of the Company’s business, such as speaking out whenever necessary
from those perspectives in meetings of the Board of Directors. He also attended theNomination and Remuneration Committee as a Committee Member and expressed his
opinions whenever necessary.
She attended all of 10 meetings of the Board of Directors held after her appointment as
Outside Director on June 26, 2020. She possesses wide experience and knowledge obtained
as an engineer and astronaut, and the Company expects her to serve a supervisory function
from those perspectives. She fulfilled an appropriate role as an Outside Director of theCompany, including supervising and providing advice about the execution of theCompany’s business, such as speaking out whenever necessary from those perspectives inmeetings of the Board of Directors. She also attended the Nomination and Remuneration
Committee as a Committee Member and expressed her opinions whenever necessary.
He attended all of 12 meetings of the Board of Directors and all of 12 meetings of the Audit& Supervisory Board. He asked questions and provided advice whenever necessary, basedon his wide experience and knowledge he had obtained as a long-serving corporate
executive.
He attended all of 12 meetings of the Board of Directors and all of 12 meetings of the Audit& Supervisory Board. He asked questions and provided advice whenever necessary, basedon his wide experience and knowledge he had obtained as a university professor.
She attended all of 10 meetings of the Board of Directors and all of 10 meetings of the
Audit & Supervisory Board held after her appointment as Outside Audit & Supervisory
Board Member on June 26, 2020. She asked questions and provided advice whenevernecessary, based on her wide experience and knowledge she had obtained as a lawyer.

40Consolidated Balance Sheet(As of March 31, 2021)
Titles of Account(Total Assets)
Current assets
Cash and bank deposits
Notes and accounts receivable,
tradeMarketable securities
Finished goods
W ork in process
Raw materials and supplies
Other
Allowance for doubtful accounts

Amount
1,625,191
889,694
429,784
128,171

Noncurrent assets
Property, plant and equipment, atcost
Buildings
Machinery and equipment
Land
Construction in progress
Other
Intangible assets
Investments and other assets
Investment securities
Deferred income taxes
Net defined benefit asset
OthersAllowance for doubtful accounts
Total

735,497
576,846

157,000
81,25352,00831,007
11,253(782)

309,11359,863
148,389
44,40815,073
9,952
148,699
109,212
31,141
4,772
3,998
(424)
1,625,191(Millions of yen)Amount189,637
135,118
44,015
22,131
8,860
60,11254,51949,3795,140

Titles of Account(Liabilities)
Current liabilities
Notes and accounts payable, trade
Accrued income taxes
W arranty reserves
Other current liabilities
Long-term liabilities
Net defined benefit liability
Other long-term liabilities(Net assets)
Shareholders' equity
Common stock
Capital surplus
Retained earnings
Treasury stock, at cost
Accumulated other comprehensive
incomeValuation difference on
available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit
plans
Non-controlling interests

1,435,554
1,432,019
69,014
95,995
1,373,018(106,008)(6,540)Total

1,625,191

16,910(4,849)(18,601)
10,075

Consolidated Statement of Income(April 1, 2020 through March 31, 2021)(Millions of yen)
Titles of AccountAmountNet sales
Cost of goods sold
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest and dividends income
Miscellaneous income
Non-operating expenses
Miscellaneous expenses
Ordinary income
Income before income taxes
Total taxes and others
Income taxes – current
Income taxes – deferred
Net income
Net income attributable to non-controlling interests
Net income attributable to ow ners of parent

551,287349,327
201,960
89,446
112,514
18,3973,427
14,9702,167
2,167
128,744
128,744
32,48632,385101
96,2582,246
94,01241

Non-Consolidated Balance Sheet(As of March 31, 2021)
Titles of AccountTitles of Account(Millions of yen)Amount1,236,223(Liabilities)

119,981532,790
186,849
8,980
78,950155,000
20,27245,55929,266
8,137(223)

Current liabilities
Accounts payable
Accrued expenses
Accrued charge
Accrued income taxes
W arranty reserves
Other current liabilities
Long-term liabilities
Allowance for employees’ retirement benefits
Other long-term liabilities

84,92134,759
9,687
15,276
17,2314,640
3,328
35,06032,907
2,153(Net assets)
Shareholders' equity
Common stock
Capital surplus
Legal capital surplus
Retained earnings
Legal retained earnings
Other retained earnings
Reserve for research and development
Reserve for reduction entry
General reserve
Retained earnings brought forward
Treasury stock, at cost
Valuation and translation adjustment
Net unrealized holding gain on othersecurities
Total

1,116,242
1,099,704
69,014
96,057
96,0571,040,641
8,252
1,032,389
311,80035
303,580
416,974(106,008)
16,538
16,538Amount(Total Assets)
Current assets
Cash and bank deposits
Notes receivable, trade
Accounts receivable, tradeMarketable securities
Finished goods
W ork in progress
Raw materials and supplies
Other
Allowance for doubtful accounts
Noncurrent assets
Property, plant and equipment, atcost
Buildings
Machinery and equipment
Land
Construction in progress
Other
Intangible assets
Investments and other assets
Investment securities
Stocks of subsidiaries and affiliates
Deferred income taxes
Prepaid pension cost
OthersAllowance for doubtful accounts
Total

703,433
510,611264,276
54,659128,682
40,16522,829
7,855
184,967
37,526
110,519
28,232
7,717
1,341
(368)
1,236,223

Non-Consolidated Statement of Income(April 1, 2020 through March 31, 2021)(Millions of yen)Amount415,939
301,198
114,741
51,26063,481
26,65424,073
2,581
2,246
2,246
87,88987,88917,43821,123(3,685)70,451

Titles of AccountNet sales
Cost of goods sold
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest and dividends income
Miscellaneous income
Non-operating expenses
Miscellaneous expenses
Ordinary income
Income before income taxes
Total taxes and others
Income taxes – current
Income taxes – deferred
Net income

42

1,236,223

Copy of the Accounting Auditors’ Report Related to the Consolidated Financial Statements(Translation)
REPORT OF INDEPENDENT AUDITORSMay 20, 2021

The Board of Directors
FANUC CORPORATION

OpinionPursuant to Article 444, Paragraph 4 of the Companies Act of Japan, we have audited the accompanying
consolidated financial statements, which comprise the consolidated balance sheet, the consolidated statement ofincome, the consolidated statement of changes in net assets and the notes to the consolidated financial statements of
FANUC CORPORATION (the “Company”) for the fiscal year from April 1, 2020 through March 31, 2021.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, thefinancial position and results of operations of the corporate group, which consists of the Company and its
consolidated subsidiaries, for the period covered by the consolidated financial statements in conformity withaccounting principles generally accepted in Japan.
Basis for the Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibility
under the auditing standards is stated in “Auditor’s Responsibility for the Audit of the Consolidated Financial
Statements.” We are independent of the Company and its consolidated subsidiaries in accordance with theprovisions related to professional ethics in Japan, and are fulfilling other ethical responsibilities as an auditor. We
believe that we have obtained sufficient and appropriate audit evidence to provide a basis for our audit opinion.
Responsibilities of Management, Audit & Supervisory Board Members and the Audit & Supervisory Board for theConsolidated 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 designing and operating such internal
control as management determines is necessary to enable the preparation and fair presentation of the 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 whether it isappropriate to prepare the consolidated financial statements in accordance with the premise of a going concern, andfor disclosing matters relating to going concern when it is required to do so in accordance with accounting
principles generally accepted in Japan.
Audit & Supervisory Board Members and the Audit & Supervisory Board are responsible for monitoring theexecution of Directors’ duties related to designing and operating the financial reporting process.
Auditor’s Responsibility for the Audit of the Consolidated Financial Statements
Our responsibility is to obtain reasonable assurance about whether the consolidated financial statements as awhole are free from material misstatement, whether due to fraud or error, and to express an opinion on the
consolidated financial statements from an independent standpoint in an audit report, based on our audit.
Misstatements can occur as a result of fraud or error, and are deemed material if they can be reasonably expected to,either individually or collectively, influence the decisions of users taken on the basis of the consolidated financial
statements.
We make professional judgment in the audit process in accordance with auditing standards generally accepted inJapan, and perform the following while maintaining professional skepticism.
• Identify and assess the risks of material misstatement, whether due to fraud or error. Design and implement audit
procedures to address the risks of material misstatement. The audit procedures shall be selected and applied asdetermined by the auditor. In addition, sufficient and appropriate audit evidence shall be obtained to provide abasis for the audit opinion.
• In making those risk assessments, the auditor considers internal control relevant to the entity’s audit in order todesign audit procedures that are appropriate in the circumstances, although the purpose of the audit of theconsolidated financial statements is not to express an opinion on the effectiveness of the entity’s internal control.
• Assess the appropriateness of accounting policies adopted by management and the method of their application,
as well as the reasonableness of accounting estimates made by management and the adequacy of related notes.
• Determine whether it is appropriate for management to prepare the consolidated financial statements on thepremise of a going concern and, based on the audit evidence obtained, determine whether there is a significant

43

uncertainty in regard to events or conditions that may cast significant doubt on the entity’s ability to continue as agoing concern. If there is a significant uncertainty concerning the premise of a going concern, the auditor isrequired to call attention to the notes to the consolidated financial statements in the audit report, or if the notes tothe consolidated financial statements pertaining to the significant uncertainty are inappropriate, issue a modified
opinion on the consolidated financial statements. While the conclusions of the auditor are based on the audit
evidence obtained up to the date of the audit report, depending on future events or conditions, an entity may beunable to continue as a going concern.
• Besides assessing whether the presentation of and notes to the consolidated financial statements are in accordancewith accounting principles generally accepted in Japan, assess the presentation, structure, and content of theconsolidated financial statements including related notes, and whether the consolidated financial statements
fairly present the transactions and accounting events on which they are based.
• Obtain sufficient and appropriate audit evidence regarding the financial information of the Company and its
consolidated subsidiaries in order to express an opinion on the consolidated financial statements. The auditor is
responsible for instructing, supervising, and implementing the audit of the consolidated financial statements, andis solely responsible for the audit opinion.
The auditor reports to Audit & Supervisory Board Members and the Audit & Supervisory Board regarding thescope and timing of implementation of the planned audit, material audit findings including material weaknesses ininternal control identified in the course of the audit, and other matters required under the auditing standards.
The auditor reports to Audit & Supervisory Board Members and the Audit & Supervisory Board regarding theobservance of provisions related to professional ethics in Japan as well as matters that are reasonably considered tohave an impact on the auditor’s independence and any safeguards that are in place to reduce or eliminate obstacles.
Interest
Our firm and engagement partners have no interests in the Company or its consolidated subsidiaries requiring
disclosure under the provisions of the Certified Public Accountants Act of Japan.
Ernst & Young ShinNihon LLC
Tokyo office
Hitoshi Yonemura (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Junichiro Tsuruta (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant

44

Copy of the Accounting Auditors’ Report Related to the Non-Consolidated Financial Statements(Translation)
REPORT OF INDEPENDENT AUDITORSMay 20, 2021

The Board of Directors
FANUC CORPORATION

OpinionPursuant to Article 436, Paragraph 2, Item 1 of the Companies Act of Japan, we have audited the accompanying
financial statements, which comprise the balance sheet, the statement of income, the statement of changes in net
assets and the related notes, and the accompanying supplementary schedules of FANUC CORPORATION (the“Company”) for the 52nd fiscal year from April 1, 2020 through March 31, 2021.
In our opinion, the financial statements and the accompanying supplementary schedules referred to above present
fairly, in all material respects, the financial position of the Company as of March 31, 2021, and the results of its
operations for the year then ended in conformity with accounting principles generally accepted in Japan.
Basis for the Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibility
under the auditing standards is stated in “Auditor’s Responsibility for the Audit of the Financial Statements and the
Accompanying Supplementary Schedules.” We are independent of the Company in accordance with the provisions
related to professional ethics in Japan, and are fulfilling other ethical responsibilities as an auditor. We believe that
we have obtained sufficient and appropriate audit evidence to provide a basis for our audit opinion.
Responsibilities of Management, Audit & Supervisory Board Members and the Audit & Supervisory Board for the
Financial Statements and the Accompanying Supplementary Schedules
Management is responsible for the preparation and fair presentation of the financial statements and theaccompanying supplementary schedules in accordance with accounting principles generally accepted in Japan, andfor designing and operating such internal control as management determines is necessary to enable the preparationand fair presentation of the financial statements and the accompanying supplementary schedules that are free frommaterial misstatement, whether due to fraud or error.
In preparing the financial statements and the accompanying supplementary schedules, management is
responsible for assessing whether it is appropriate to prepare the financial statements and the accompanying
supplementary schedules in accordance with the premise of a going concern, and for disclosing matters relating togoing concern when it is required to do so in accordance with accounting principles generally accepted in Japan.
Audit & Supervisory Board Members and the Audit & Supervisory Board are responsible for monitoring theexecution of Directors’ duties related to designing and operating the financial reporting process.
Auditor’s Responsibility for the Audit of the Financial Statements and the Accompanying Supplementary
Schedules
Our responsibility is to obtain reasonable assurance about whether the financial statements and the accompanying
supplementary schedules as a whole are free from material misstatement, whether due to fraud or error, and to
express an opinion on the financial statements and the accompanying supplementary schedules from an
independent standpoint in an audit report, based on our audit. Misstatements can occur as a result of fraud or error,
and are deemed material if they can be reasonably expected to, either individually or collectively, influence thedecisions of users taken on the basis of the financial statements and the accompanying supplementary schedules.
We make professional judgment in the audit process in accordance with auditing standards generally accepted inJapan, and perform the following while maintaining professional skepticism.
• Identify and assess the risks of material misstatement, whether due to fraud or error. Design and implement audit
procedures to address the risks of material misstatement. The audit procedures shall be selected and applied asdetermined by the auditor. In addition, sufficient and appropriate audit evidence shall be obtained to provide abasis for the audit opinion.
• In making those risk assessments, the auditor considers internal control relevant to the entity’s audit in order todesign audit procedures that are appropriate in the circumstances, although the purpose of the audit of thefinancial statements and the accompanying supplementary schedules is not to express an opinion on theeffectiveness of the entity’s internal control.
• Assess the appropriateness of accounting policies adopted by management and the method of their application,
as well as the reasonableness of accounting estimates made by management and the adequacy of related notes.

45• Determine whether it is appropriate for management to prepare the financial statements and the accompanying
supplementary schedules on the premise of a going concern and, based on the audit evidence obtained, determine
whether there is a significant uncertainty in regard to events or conditions that may cast significant doubt on theentity’s ability to continue as a going concern. If there is a significant uncertainty concerning the premise of agoing concern, the auditor is required to call attention to the notes to the financial statements and theaccompanying supplementary schedules in the audit report, or if the notes to the financial statements and theaccompanying supplementary schedules pertaining to the significant uncertainty are inappropriate, issue amodified opinion on the financial statements and the accompanying supplementary schedules. While theconclusions of the auditor are based on the audit evidence obtained up to the date of the audit report, depending
on future events or conditions, an entity may be unable to continue as a going concern.
• Besides assessing whether the presentation of and notes to the financial statements and the accompanying
supplementary schedules are in accordance with accounting principles generally accepted in Japan, assess thepresentation, structure, and content of the financial statements and the accompanying supplementary schedules
including related notes, and whether the financial statements and the accompanying supplementary schedules
fairly present the transactions and accounting events on which they are based.
The auditor reports to Audit & Supervisory Board Members and the Audit & Supervisory Board regarding thescope and timing of implementation of the planned audit, material audit findings including material weaknesses ininternal control identified in the course of the audit, and other matters required under the auditing standards.
The auditor reports to Audit & Supervisory Board Members and the Audit & Supervisory Board regarding theobservance of provisions related to professional ethics in Japan as well as matters that are reasonably considered tohave an impact on the auditor’s independence and any safeguards that are in place to reduce or eliminate obstacles.
Interest
Our firm and engagement partners have no interests in the Company requiring disclosure under the provisions of
the Certified Public Accountants Act of Japan.
Ernst & Young ShinNihon LLC
Tokyo office
Hitoshi Yonemura (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Junichiro Tsuruta (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant

46

Copy of the Audit Report of the Audit & Supervisory Board (Translation)
AUDIT REPORT
We, the Audit & Supervisory Board, based on the audit report prepared by each Audit & Supervisory Board Member
on the performance by the Directors of their duties during the 52nd fiscal year from April 1, 2020 to March 31, 2021,
prepared this audit report upon deliberation and hereby report as follows:
1. Method of Audit by the Audit & Supervisory Board Members and the Audit & Supervisory Board and the Particulars
thereof:(1) The Audit & Supervisory Board determined the audit policy, audit plans, etc. and received from each Audit &Supervisory Board Member reports on the state of his or her performance of audits and the results thereof. The Board
also received reports from the Directors, etc. and the Accounting Auditors on the state of performance of their duties,
and sought explanations as necessary.
(2) Each Audit & Supervisory Board Member, in accordance with the auditing standards of Audit & Supervisory Board
Members established by the Audit & Supervisory Board and the assignment of duties, etc. determined by the Audit &Supervisory Board, maintained constant communication with the Directors, Internal Auditing Section and other
employees, etc. utilizing methods such as those via telephone lines or the Internet, etc., in an effort to collectinformation and improve the environment for auditing, conducted audit in accordance with the following methods.
(i) Each Audit & Supervisory Board Member attended meetings of the Board of Directors and other important
meetings, received from the Directors and employees, etc. reports on the state of performance of their duties,
sought explanations as necessary, inspected important decision documents, etc., and made investigation into thestate of activities and property at the head office and principal business offices of the Company. With regard to its
subsidiaries, we maintained constant communication, and exchanged information with the directors, Audit &Supervisory Board Members, etc. thereof, and requested the subsidiaries to render reports on their business
operations as necessary.
(ii) We also received regular reports from the Directors and employees, etc., sought explanations as necessary, andexpressed opinions regarding the details of the resolutions of the Board of Directors for the development ofsystems necessary to ensure that the execution of the duties by the Directors, as described in the business report,
complies with the laws and regulations and the Articles of Incorporation, and other systems provided for in
Article 100, Paragraphs 1 and 3 of the Ordinance for Enforcement of the Companies Act of Japan as systems
necessary to ensure the adequacy of operations of corporate groups consisting of a stock company and its
subsidiaries, and on the status of the development and operation of the systems developed pursuant to thoseresolutions (internal control systems).
With regard to the internal control on financial reporting, we received from the Directors, etc. and Accounting
Auditors reports on the assessment of such internal control and auditing thereof, and sought explanations asnecessary. With regard to its subsidiaries, we maintained constant communication, and exchanged information
with the directors, Audit & Supervisory Board Members, etc. thereof, and requested the subsidiaries to renderreports on their business operations as necessary. In accordance with such methods, we investigated the business
report and its supplementary schedules for the fiscal year under review.
(iii) We also monitored and verified whether the Accounting Auditors had maintained an independent positionand conducted adequate audits, received from the Accounting Auditors reports on the state of performance of
their duties, and requested explanations as necessary. In addition, we received from the Accounting Auditors a
notice that the “systems to secure adequate performance of duties” (as listed in the items of Article 131 of theOrdinance for Corporate Accounting) had been established in accordance with the “Standard for Quality Control
Concerning Audits” (the Business Accounting Council, October 28, 2005), and requested explanations as necessary.
We also discussed major audit matters with the Accounting Auditors, received reports on the status of their audit
implementation, and requested explanations as necessary.
In accordance with such methods, we investigated the business report and its supplementary schedules, nonconsolidated financial statements (the non-consolidated balance sheet, the non-consolidated statement of income, the nonconsolidated statement of changes in shareholders’ equity, etc. and the notes to non-consolidated financial statements) andthe supplementary financial schedules, as well as the consolidated financial statements (the consolidated balance sheet, theconsolidated statement of income, the consolidated statement of changes in shareholders’ equity, etc. and the notes toconsolidated financial statements), for the fiscal year under review.

472. Results of Audit:(1) Results of audit of the business report, etc.:
We are of the opinion:(i)That the business report and its supplementary schedules fairly present the state of the Company in accordancewith laws and ordinances and the Articles of Incorporation;(ii) That in connection with the performance by the Directors of their duties, no dishonest act or material fact ofviolation of laws and ordinances and the Articles of Incorporation exists; and(iii) That the details of the resolutions of the Board of Directors on internal control systems are proper and that thecontents of business report and performance by the Directors of their duties concerning such internal control
systems, including internal control system on financial reporting, contains nothing to be pointed out.
(2) Results of audit of the non-consolidated financial statements and the supplementary financial schedules:
We are of the opinion that the method and results of the audit made by the Account Auditors, Ernst & Young
ShinNihon LLC, are proper.
(3) Results of audit of the consolidated financial statements:
We are of the opinion that the method and results of the audit made by the Account Auditors, Ernst & Young
ShinNihon LLC, are proper.
May 21, 2021
Audit & Supervisory Board
FANUC CORPORATION
Katsuo Kohari(seal)
Standing Audit & Supervisory Board Member
Katsuya Mitsumura
Audit & Supervisory Board Member(seal)

Masaharu Sumikawa(seal)
Outside Audit & Supervisory Board Member
Hidetoshi Yokoi(seal)
Outside Audit & Supervisory Board Member
Mieko Tomita(seal)
Outside Audit & Supervisory Board Member

48