Annual Securities Report
85th term (from April 1, 2014 to March 31, 2015)

F.C.C. CO., LTD.

Table of Contents
A.

Company information ........................................................................................................................... 3
Overview of the Company ................................................................................................................ 3
1. Trends in selected financial data .................................................................................................. 3
2. Company history ........................................................................................................................... 5
3. Description of business.................................................................................................................. 6
4. Overview of subsidiaries and other affiliates .............................................................................. 8
5. Information about employees ..................................................................................................... 11II.
Overview of business ................................................................................................................... 12
1. Overview of business results ....................................................................................................... 12
2. Overview of production, orders received and sales .................................................................. 18
3. Issues to address .......................................................................................................................... 19
4. Business risks ............................................................................................................................... 20
5. Critical contracts for operation .................................................................................................. 21
6. Research and development activities ......................................................................................... 21
7. Analysis of financial position, operating results and cash flows ............................................. 22
III.
Information about facilities ........................................................................................................ 24
1. Overview of capital investments, etc. ......................................................................................... 24
2. Major facilities ............................................................................................................................. 24
3. Planned additions, retirements, etc. of facilities ....................................................................... 26
IV.
Information about reporting company ...................................................................................... 27
1. Information about shares, etc. .................................................................................................... 27
2. Dividend policy ............................................................................................................................ 29
3. Information about officers.......................................................................................................... 30
4. Status of corporate governance, etc. .......................................................................................... 34
V. Financial information ..................................................................................................................... 41
1. Consolidated financial statements, etc. ...................................................................................... 42
2. Non-consolidated financial statements, etc. .............................................................................. 96
VI.
Overview of operational procedures for shares of the reporting company .......................... 107
I.

1

Cover Page
Document title
Clause of stipulation
Place of filing
Filing dateFiscal year
Company nameCompany name in English
Title and name of representative
Address of registered headquarters
Telephone number
Name of contact person
Nearest place of contact
Telephone number
Name of contact person
Place for public inspection

Annual Securities Report
Article 24, paragraph 1 of the Financial Instruments andExchange Act
Director-General of the Tokai Local Finance Bureau
June 24, 2015
85th term (from April 1, 2014 to March 31, 2015)
株式会社エフ・シー・シー (Kabushiki Kaisha F.C.C.)
F.C.C. CO., LTD.
Toshimichi Matsuda, President and Representative Director
7000-36 Nakagawa, Hosoe-cho, Kita-ku, Hamamatsu-shi,
Shizuoka+81-53-523-2400 (Main)
Ryujiro Matsumoto, Director, Head of Management andAdministration
7000-36 Nakagawa, Hosoe-cho, Kita-ku, Hamamatsu-shi,
Shizuoka+81-53-523-2400 (Main)
Ryujiro Matsumoto, Director, Head of Management andAdministration
Tokyo Stock Exchange, Inc.
(2-1 Nihombashi Kabutocho, Chuo-ku, Tokyo)

2

A. Company information
I. Overview of the Company
1. Trends in selected financial data
(1) Summary of consolidated financial data
IFRS

Fiscal year-end
Revenue

Transitiondate

84th term

85th term

April 1, 2013

March 31,2014

March 31,
2015

(Millions of yen)–

145,433

154,395

Profit before income taxes (Millions of yen)–

16,871

12,104

Profit(Millions of yen)–

13,012

8,042

Comprehensive income(Millions of yen)–

14,937

16,809Equity attributable to owners of the parent(Millions of yen)

90,507104,004

110,190

Total assets(Millions of yen)

124,924

139,195

163,819

Equity attributable to owners of parent per
share
(Yen)

1,803.34

2,072.27

2,195.52

Basic earnings per share

(Yen)

–

257.13144.07

Diluted earnings per share

(Yen)

–

–

–

Ratio of equity attributable to owners ofparent to total assets
(%)

72.45

74.72

67.26

–

13.27

6.75

Ratio of profit to equity attributable toowners of parent
Price earnings ratio (PER)(%)(Times)

–

7.14

13.03

Net cash flows from (used in) operating
activities(Millions of yen)–

15,53013,002

Net cash flows from (used in) investing
activities(Millions of yen)–

(17,665)(20,308)

Net cash flows from (used in) financing
activities(Millions of yen)–

(2,856)

4,106

Cash and cash equivalents at end of period(Millions of yen)

23,571

19,046

17,557

6,961

7,235

7,603

[3,641][3,489][3,647]

Number of employees[Separately, average number of temporary
employees]

Notes: 1. Effective from the 85th term, the consolidated financial statements are prepared based on International Financial
Reporting Standards (hereinafter “IFRS”).
2. Revenue does not include consumption taxes.
3. Information on diluted earnings per share is omitted due to an absence of potential shares.

3

Japanese GAAP

Term
Fiscal year-end

81st term

82nd term

83rd term

84th term

85th term

March 31,2011

March 31,2012

March 31,2013

March 31,2014

March 31,2015

Net sales(Millions of yen)

117,621117,068

126,245

144,890

153,939

Ordinary income(Millions of yen)

12,672

11,494

13,124

16,115

12,952

Net income(Millions of yen)

8,041

7,276

7,942

13,1486,760

Comprehensive income(Millions of yen)

5,518

6,244

17,707

16,26916,702

Net assets(Millions of yen)

77,26881,20897,491

111,099

115,948

Total assets(Millions of yen)

98,531103,937

122,258

137,909

162,348

Net assets per share(Yen)

1,412.95

1,497.72

1,780.34

2,075.83

2,195.73

Net income per share(Yen)

160.23144.98158.26261.99134.70

Diluted net income per share

(Yen)

–

–

–

–

–

(%)

71.97

72.32

73.09

75.54

67.88

Equity ratio
Return on equity (ROE)

(%)

11.60

9.96

9.66

13.59

6.31

(Times)

12.48

12.75

14.27

7.01

13.93

Net cash provided by (used in) operating
activities(Millions of yen)

14,991

12,36013,491

13,646

13,465

Net cash provided by (used in) investing
activities(Millions of yen)

(5,350)(10,309)(11,355)(15,120)(21,783)

Net cash provided by (used in) financing
activities(Millions of yen)

(1,657)(3,204)(2,176)(2,771)

4,129

Cash and cash equivalents at end of period(Millions of yen)

22,545

20,591

23,36920,147

17,403

5,701

5,946

7,011

7,214

7,564

[3,036][3,345][3,641][3,444][3,676]

Price earnings ratio (PER)

Number of employees[Separately, average number of temporary
employees]

Notes: 1. An audit pursuant to Article 193-2, paragraph 1 of the Financial Instruments and Exchange Act of Japan has notbeen conducted for the consolidated financial statements for the 85th term prepared in accordance with Japanese
GAAP.
2. Net sales do not include consumption taxes.
3. Information on diluted net income per share is omitted due to an absence of potential shares.

42. Company history
Year

Month

Event

1939

June

1943
1982

March
February

1984
1988

July
July

1989

March

1989
1992
1993

June
September
September

1994

October
AugustDecember

1995

March

1997

September
April

1998
2000

November
April

2001
2002

April
December

2003
2004
2005

February
May
March
June

2006

NovemberJanuary

2010
2012

November
September

2013

DecemberFebruary
June

2014

November

Fuji Lite Industries Co., Ltd. is established in Sato-cho, Hamamatsu-shi, Shizuoka.
The Company begins manufacturing clutch plates, gears and other products employing compression
molding of Bakelite resins.
Changes name to Fuji Chemical Co., Ltd.
Establishes Kyushu Fuji Chemical Industries Co., Ltd. (currently KYUSHU F.C.C. CO., LTD., aconsolidated subsidiary) in Matsubase-machi, Shimomashiki-gun, Kumamoto (currently Uki-shi,
Kumamoto).
Changes name to F.C.C. CO., LTD.
Establishes JAYTEC, INC. (currently FCC (INDIANA) LLC., a consolidated subsidiary) in Indiana,
U.S.A.
Establishes FCC (THAILAND) CO., LTD. (currently a consolidated subsidiary) in Bangkok,
Thailand.
Moves its corporate head office to the current address.
Makes equity investment in KWANG HWA SHING INDUSTRIAL CO., LTD. of Tainan, Taiwan.
Establishes FCC (PHILIPPINES) CORP. (currently a consolidated subsidiary) in Laguna,Philippines.
Acquires shares of TENRYU SANGYO CO., LTD. (currently a consolidated subsidiary)
Registers its shares for OTC trading with Japan Securities Dealers Association.
Establishes CHENGDU JIANG HUA. F.C.C. CLUTCHES. CO., LTD. (currently CHENGDUYONGHUA. F.C.C. CLUTCHES CO., LTD., a consolidated subsidiary) in Chengdu, Sichuan,
China.
Establishes CHU’S F.C.C. CO., LTD. (SHANGHAI) (currently a consolidated subsidiary) in
Shanghai, China.
Establishes FCC (EUROPE) LTD. in Milton Keynes, UK.
Establishes FCC RICO LTD. (currently FCC INDIA MANUFACTURING PRIVATE LTD., aconsolidated subsidiary) in Haryana, India.
Establishes FCC DO BRASIL LTDA. (currently a consolidated subsidiary) in Amazonas, Brazil.
Establishes FCC (North Carolina), INC. (currently FCC (North Carolina), LLC., a consolidated
subsidiary) in North Carolina, U.S.A.
Establishes PT. FCC INDONESIA (currently a consolidated subsidiary) in Karawang, Indonesia.
Establishes FCC (North America), INC. (currently a consolidated subsidiary) and FCC (INDIANA),
INC. (currently FCC (INDIANA) LLC., a consolidated subsidiary) in Indiana, U.S.A.
Lists its shares on the Second Section of the Tokyo Stock Exchange.
Establishes FCC (Adams), LLC. (currently a consolidated subsidiary) in Indiana, U.S.A.
Lists its shares on the First Section of the Tokyo Stock Exchange.
Increases investment in KWANG HWA SHING INDUSTRIAL CO., LTD. (currently FCC(TAIWAN) CO., LTD.), making the company a consolidated subsidiary.
Establishes FCC (VIETNAM) CO., LTD. (currently a consolidated subsidiary) in Hanoi, Vietnam.
Establishes CHINA FCC FOSHAN CO., LTD. (currently a consolidated subsidiary) in Foshan,
Guangdong, China.
Acquires 100% of Tohoku Chemical Industries, Ltd. (currently a consolidated subsidiary).
Establishes F.C.C. (China) Investment Co., Ltd. (currently a consolidated subsidiary) in Chengdu,
Sichuan, China.
Completes liquidation of FCC (EUROPE) LTD.
Establishes FCC SEOJIN CO., LTD. in Siheung, Gyeonggi-do, Korea.
Establishes FCC AUTOMOTIVE PARTS DE MEXICO, S.A. DE C.V. (currently a consolidated
subsidiary) in San Luis Potosi, Mexico.
Establishes FCC CLUTCH INDIA PRIVATE LTD. (currently a consolidated subsidiary) in Haryana,
India.
Acquires 100% of FCC RICO LTD. (currently FCC INDIA MANUFACTURING PRIVATE LTD., aconsolidated subsidiary).

December5

3. Description of business
The Group, comprising the Company, 26 subsidiaries and two associates, is engaged primarily in the
manufacture and sale of clutches for motorcycles and automobiles.
The following breaks down the Group’s businesses into operating segments and indicates in which
segment each company falls. These operating segments are the same as those in “V. Financial
information, 1. Consolidated financial statements, etc., (1) Consolidated financial statements, Notes toconsolidated financial statements, 4. Segment information.”
Motorcycle clutches
This segment is engaged primarily in the manufacture and sale of motorcycles, scooters, all-terrain
vehicles (ATVs) and general-purpose clutches; it also manufactures and sells components and parts formotorcycles and automobiles.
Business
category
Manufacture

Principal companies
KYUSHU F.C.C. CO., LTD.

Sales

PT. FCC PARTS INDONESIA [Indonesia]

Manufacture andsales

The Company, TENRYU SANGYO CO., LTD., Tohoku Chemical Industries, Ltd., FCC (North
Carolina), LLC. [U.S.], FCC (THAILAND) CO., LTD. [Thailand], FCC (PHILIPPINES) CORP.
[Philippines], CHENGDU YONGHUA. F.C.C. CLUTCHES CO., LTD. [China], CHU’S F.C.C. CO.,LTD. (SHANGHAI) [China], FCC (TAIWAN) CO., LTD. [Taiwan], FCC CLUTCH INDIA PRIVATE
LTD. [India], FCC INDIA MANUFACTURING PRIVATE LTD. [India], PT. FCC INDONESIA[Indonesia], FCC (VIETNAM) CO., LTD. [Vietnam], FCC DO BRASIL LTDA. [Brazil]

Automobile clutches
This segment is engaged primarily in the manufacture and sale of clutches for automatic and manualtransmission automobiles.
Business
category

Principal companies

Manufacturing

KYUSHU F.C.C. CO., LTD., FCC (North Carolina) , LLC. [U.S.], FCC (PHILIPPINES) CORP.
[Philippines]

Manufacture andsales

The Company, FCC (INDIANA), LLC. [U.S.], FCC (North Carolina), LLC. [U.S.], FCC (Adams),
LLC. [U.S.], FCC AUTOMOTIVE PARTS DE MEXICO, S.A. DE C.V. [Mexico], FCC (THAILAND)
CO., LTD. [Thailand], CHENGDU YONGHUA. F.C.C. CLUTCHES CO., LTD. [China], CHINA FCCFOSHAN CO., LTD. [China], FCC CLUTCH INDIA PRIVATE LTD. [India], FCC INDIA
MANUFACTURING PRIVATE LTD. [India], PT. FCC INDONESIA [Indonesia]

6Group business structure chart
The following Group business structure chart shows the matters described above.

Domestic* KYUSHU F.C.C. CO., LTD.
* TENRYU SANGYO CO., LTD.
* Tohoku Chemical Industries, Ltd.

<Administration company>* FCC (North America), INC.
* FCC (INDIANA), LLC.
* FCC (North Carolina), LLC.
* FCC (Adams), LLC.

The Company

Mexico* FCC AUTOMOTIVE PARTS DE MEXICO, S.A. DE C.V.
Thailand* FCC (THAILAND) CO., LTD.
Philippines* FCC (PHILIPPINES) CORP.
China<Administration company>* F.C.C.(China) Investment Co., Ltd.
* CHENGDU YONGHUA. F.C.C. CLUTCHES CO., LTD.
* CHINA FCC FOSHAN CO., LTD.
* CHU’S F.C.C. CO., LTD. (SHANGHAI)
Taiwan* FCC (TAIWAN) CO., LTD.
India
* FCC CLUTCH INDIA PRIVATE LTD.
* FCC INDIA MANUFACTURING PRIVATE LTD.
Indonesia* PT. FCC INDONESIA* PT. FCC PARTS INDONESIA
Vietnam* FCC (VIETNAM) CO., LTD.
Brazil* FCC DO BRASIL LTDA.

* Consolidated subsidiaries○ Other affiliated company

Receiving and supplying materials and parts
Supplying products
Leasing land

7

Domestic/Overseas customers (○ Honda Motor Co., Ltd. and others)US4. Overview of subsidiaries and other affiliates
Name

Address

Issued capital

Principal contentsof business

Ratio of voting
rights holding(held) (%)(Note 3)

Relationship<Consolidated
subsidiaries>
KYUSHU F.C.C. CO.,LTD.

Uki-shi,
Kumamoto

Motorcycle and¥30,000,000 automobile
clutches

TENRYU SANGYO
CO., LTD.

Higashi-ku,
Hamamatsu-shi,
ShizuokaMotorcycle¥22,500,000
clutches

Tohoku Chemical
Industries, Ltd.

Nasukarasuyamashi, Tochigi¥125,000,000

FCC (North America),
INC.
(Note 2)

Indiana, U.S.

Motorcycle
clutches

Manufacturing the Company’s
product components and products.
100Interlocking officers and leasing
land.
Purchasing motorcycle,
automobile and general-purpose
79.78
components.
Interlocking officers.
Purchasing Tohoku Chemical
100 Industries, Ltd.’s products.
Interlocking officers.

Administration of
US$42,800,000 subsidiaries in the
U.S.

100

FCC (INDIANA), LLC.
Indiana, U.S.
(Notes 2, 4)

Automobile
US$17,800,000
clutches

Selling the Company’s products,
components and raw materials.
100
Purchasing FCC (INDIANA),[100]
LLC.’s products and components.
Interlocking officers.

FCC (North Carolina),
LLC.
(Note 2)Motorcycle andUS$10,000,000 automobile
clutches

Selling the Company’s products,
components and raw materials.
100
Purchasing FCC (North Carolina),[100]
LLC.’s products and components.
Interlocking officers.

North Carolina,
U.S.

Interlocking officers and capitalassistance.

FCC (Adams), LLC.
(Note 2)

Indiana, U.S.

US$15,000,000

Automobile
clutches

Selling the Company’s products,
components and raw materials.
100
Purchasing FCC (Adams), LLC.’s[100]
products and components.
Interlocking officers.

FCC AUTOMOTIVEPARTS DE MEXICO,S.A. DE C.V.
(Note 2)

San Luis Potosi,
MexicoMex$300,000,000

Automobile
clutches

Selling the Company’s products,
100 components and raw materials.
[1] Interlocking officers and capitalassistance.

FCC (THAILAND) CO., Bangkok,
LTD.
ThailandMotorcycle and
THB60,000,000 automobile
clutches

Selling the Company’s products,
components and raw materials.
58 Purchasing FCC (THAILAND)[0.07] CO., LTD.’s products andcomponents.
Interlocking officers.

FCC (PHILIPPINES)
CORP.
(Note 2)

Laguna,Philippines

Motorcycle and
PHP200,000,000 automobile
clutches

Selling the Company’s products,
components and raw materials.
Purchasing FCC (PHILIPPINES)
100
CORP.’s products andcomponents.
Interlocking officers.

F.C.C. (China)
Investment Co., Ltd.
(Note 2)

Sichuan, China

Administration of
US$30,000,000 subsidiaries in
China

100 Interlocking officers.

CHENGDU
YONGHUA. F.C.C.
Sichuan, China
CLUTCHES CO., LTD.
(Note 2)

CHU’S F.C.C. CO.,LTD. (SHANGHAI)(Note 2)

Shanghai, China

Motorcycle andUS$28,000,000 automobile
clutches

US$9,800,000

Motorcycle
clutches8

Selling the Company’s products,
components and raw materials.
Purchasing CHENGDU
100 YONGHUA. F.C.C. CLUTCHES[71.43] CO., LTD.’s products andcomponents.
Interlocking officers and capitalassistance.
Selling the Company’s products,
components and raw materials.
Purchasing CHU’S F.C.C. CO.,100
LTD. (SHANGHAI)’s products
and components.
Interlocking officers.

Name

CHINA FCC FOSHAN
CO., LTD.
(Note 2)

FCC (TAIWAN) CO.,LTD.
(Note 2)FCC CLUTCH INDIA
PRIVATE LTD.
(Note 2)FCC INDIA
MANUFACTURING
PRIVATE LTD.
(Note 4)Address

Guangdong, China

Tainan, Taiwan

Haryana, India

Haryana, India

Issued capital

US$28,000,000

NT$195,000,000

Principal contentsof business

Ratio of voting
rights holding(held) (%)(Note 3)

Relationship

Automobile
clutches

Selling the Company’s products,
components and raw materials.
91.9 Purchasing CHINA FCC[53.33] FOSHAN CO., LTD.’s products
and components.
Interlocking officers.

Motorcycle
clutches

Selling the Company’s products,
components and raw materials.
70
Purchasing FCC (TAIWAN) CO.,
[15]
LTD.’s products and components.
Interlocking officers.

Motorcycle and
INR1,250,000,000 automobile
clutches

Selling the Company’s products,
components and raw materials.
Purchasing FCC CLUTCH
100 INDIA PRIVATE LTD.’s products
and components.
Interlocking officers and capitalassistance.

Motorcycle and
INR79,000,000 automobile
clutches

Selling the Company’s products,
components and raw materials.
Purchasing FCC INDIA100
MANUFACTURING PRIVATE[50]
LTD.’s products and components.
Interlocking officers and capitalassistance.

PT. FCC INDONESIA(Notes 2, 4)

Karawang,Indonesia

Motorcycle andUS$11,000,000 automobile
clutches

Selling the Company’s products,
components and raw materials.
100 Purchasing PT. FCC[0.55] INDONESIA’s products andcomponents.
Interlocking officers.

PT. FCC PARTSINDONESIA

Karawang,Indonesia

Motorcycle
US$300,000
clutches

Selling the Company’s products,
components and raw materials.
100
Purchasing PT. FCC PARTS[100]
INDONESIA’s products andcomponents.

FCC (VIETNAM) CO.,LTD.
(Note 2)

FCC DO BRASIL
LTDA.
(Note 2)

Hanoi, Vietnam

US$10,000,000

Motorcycle
clutches

Selling the Company’s products,
components and raw materials.
Purchasing FCC (VIETNAM)
90
CO., LTD.’s products andcomponents.
Interlocking officers.

Amazonas, Brazil

Motorcycle
BRL31,600,000
clutches

Selling the Company’s products,
components and raw materials.
100 Purchasing FCC DO BRASIL
LTDA.’s products andcomponents.

Minato-ku, Tokyo

Manufacture andsales of¥86,067,000,000
automobiles andengines<Other affiliate>
Honda Motor Co., Ltd.
(Note 5)

Selling the Company’s products
21.68
and purchasing raw materials and(held)
components.

Notes: 1. Descriptions in the “Principal contents of business” column are names of segments.
2. These companies are classified as “Specified Subsidiaries” under the Financial Instruments and Exchange Act ofJapan.
3. The figures in brackets in the “Ratio of voting rights holding” column are indirect holding ratio included in the
figures outside the brackets.

94. For FCC (INDIANA) LLC., PT. FCC INDONESIA and FCC INDIA MANUFACTURING PRIVATE LTD., thepercentage of their net sales (excluding internal sales between consolidated companies) to consolidated net sales
exceeded 10%. Key profit and loss information in each company’s financial statements prepared under thegenerally accepted accounting standards in Japan is as follows:
Key profit and loss information• FCC (INDIANA), LLC.
(1) Net sales¥32,895 million(2) Ordinary income¥1,036 million(3) Net income¥810 million(4) Net assets¥12,241 million(5) Total assets¥18,070 million• PT. FCC INDONESIA(1) Net sales¥27,921 million(2) Ordinary income¥1,239 million(3) Net income¥947 million(4) Net assets¥12,699 million(5) Total assets¥16,502 million• FCC INDIA MANUFACTURING PRIVATE LTD.
(1) Net sales¥19,541 million(2) Ordinary income¥1,381 million(3) Net income¥945 million(4) Net assets¥4,975 million(5) Total assets¥10,043 million
5. This company files its Annual Securities Report.
6. In addition to the above, there are seven affiliates.

10

5. Information about employees(1) Consolidated companies
As of March 31, 2015
Segment name

Number of employees

Motorcycle clutches

4,438

Automobile clutches

2,721

[682]

7,159

[3,600]Total of reportable segments
Corporate (common)
Total[2,918]

444

[47]

7,603

[3,647]

Notes: 1. The number of employees indicates the number of working employees, and the average number of temporary
employees during the fiscal year under review is given in brackets separately.
2. The number in the Corporate (common) segment indicates employees in the administration department, the R&D
Division and the Manufacturing Technology Center.
3. The number of employees in the Automobile clutches segment increased by 506 from the end of the previous
fiscal year due primarily to production capacity expansion in the U.S., Mexico and China.

(2) Reporting company
As of March 31, 2015
Number of employees

Average age

1,101 [140]Average years of service
38.8

Average annual salary (Yen)

14.7

Segment name6,417,464

Number of employees

Motorcycle clutches

213

[67]

Automobile clutches

444

[26]

Total of reportable segments

657

[93]

Administration (general operations)

444

[47]

1,101

[140]

Total

Notes: 1. The number of employees indicates the number of working employees, and the average number of temporary
employees during the fiscal year under review is given in brackets separately.
2. Average annual salary includes bonuses and surplus wages.
3. The number in the Administration (general operations) segment indicates employees in the administration
department, the R&D Division and the Manufacturing Technology Center.

(3) Status of labor union
The reporting company and some of its consolidated subsidiaries have labor unions. However, thesecompanies have no labor-management issues to note.

11II. Overview of business
1. Overview of business results
Effective from the fiscal year ended March 31, 2015, the Company has applied IFRS. Business results
for the previous fiscal year presented for comparison purposes have been restated in accordance with
IFRS.
(1) Business results
During the fiscal year ended March 31, 2015, a steady increase in sales of motorcycle clutches inIndia and growing sales of automobile clutches to customers outside the Honda Motor Group in the
U.S., coupled with a weaker yen, resulted in revenue expanding by 6.2% from the previous fiscal yearto ¥154,395 million, despite the negative effects of sluggish domestic automobile sales and weak
operating performance in Thailand. Operating profit declined by 39.7% from the previous fiscal yearto ¥8,746 million as a result of increases in depreciation expenses, selling expenses and expenses
associated with new product launches and recognition of an impairment loss accompanying areorganization of production facilities in Japan. Profit before income taxes decreased by 28.3% fromthe previous fiscal year to ¥12,104 million, reflecting foreign exchange gains. Profit attributable toowners of the parent fell by 44.0% from the previous fiscal year to ¥7,230 million, partly reflecting a
corporate tax refund related to transfer pricing taxation recognized in the previous fiscal year.
The following are the business results in each operating segment.
Motorcycle clutches
Sales revenue in this segment grew by 6.5% from the previous fiscal year to ¥82,961 million,
reflecting healthy sales of motorcycle clutches in India, despite sluggish operating performance inThailand and a slowdown in the motorcycle market in Indonesia during the second half of the year.
Operating profit declined by 3.5% from the previous fiscal year to ¥9,157 million, reflecting rises in
the cost of materials.
Automobile clutches
Sales revenue in this segment grew by 5.7% from the previous fiscal year to ¥71,434 million,
reflecting an increase in sales to customers outside the Honda Motor Group in the U.S. and the effects
of a weaker yen, despite the Honda Motor Group shifting to continuously variable transmissions(CVTs). Operating profit fell, with an operating loss recorded of ¥411 million (compared with
operating profit of ¥5,026 million in the previous fiscal year), reflecting increases in depreciation
expenses and expenses associated with new product launches and recognition of an impairment loss
accompanying a reorganization of production facilities in Japan.
(2) Cash flows
As of the end of the fiscal year under review, cash and cash equivalents (hereinafter “net cash”)
totaled ¥17,557 million, down ¥1,489 million compared with the end of the previous fiscal year.
Cash flow positions in the fiscal year under review and the factors thereof are as follows.
Cash flows from (used in) operating activities
Net cash flows from operating activities was ¥13,002 million, a decrease of ¥2,528 million comparedwith the previous fiscal year.
This is mainly due to a decrease in ¥4,766 million in profit before income taxes, in spite of an increaseof ¥2,350 million in depreciation and amortization expense and a decrease of ¥2,053 million in tradeand other receivables.
Cash flows from (used in) investing activities
Net cash used in investing activities was ¥20,308 million, an increase of ¥2,642 million comparedwith the previous fiscal year.
This is mainly due to an increase of ¥ 953 million in purchase of property, plant and equipment.

12Cash flows from (used in) financing activities
Net cash flows from financing activities was ¥4,106 million, an increase of ¥6,962 million comparedwith the previous fiscal year.
This is mainly due to an increase of ¥3,479 million in net increase (decrease) in short-term borrowings
and an increase of ¥12,733 million in proceeds from long-term borrowings, in spite of ¥9,367 millionof payments for acquisition of interests in subsidiaries from non-controlling interests.
(3) Parallel disclosure
The consolidated financial statements prepared in accordance with the Ordinance on Consolidated
Financial Statements of Japan (excluding Chapters 7 and 8; hereinafter “Japanese GAAP”) and thedifferences between the main items in the consolidated financial statements prepared in accordancewith IFRS, and the equivalent items in the consolidated financial statements prepared in accordancewith Japanese GAAP are as described below.
An audit pursuant to Article 193-2, paragraph 1 of the Financial Instruments and Exchange Act ofJapan has not been conducted for the summary of the consolidated financial statements for the fiscal
year under review prepared in accordance with Japanese GAAP.
1) Summary of consolidated balance sheet (Japanese GAAP)(Millions of yen)
As of March 31, 2014

As of March 31, 2015

AssetsCurrent assets
Non-current assets
Property, plant and equipment
Intangible assets
Investments and other assets

65,22071,97460,416
1,802
10,46976,274
2,186
11,913

Total non-current assets

72,68890,374

137,909

162,348

21,444
5,365

26,91819,482

26,81046,400102,232
1,950
6,915

99,87910,320
5,747

111,099

115,948

137,909

162,348

Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Accumulated other comprehensive income
Minority interests
Total net assets
Total liabilities and net assets

132) Summary of consolidated statement of income and summary of consolidated statement ofcomprehensive income (Japanese GAAP)
Summary of consolidated statement of income(Millions of yen)
Fiscal year ended
March 31, 2014

Fiscal year ended
March 31, 2015

Net sales
Cost of sales

144,890
118,277

153,939
129,989

Gross profit

26,61323,949Selling, general and administrative expenses

12,973

14,902

Operating profit

13,6399,047

Non-operating income
Non-operating expenses

2,720
245

4,192
287

Ordinary income

16,115

12,952Extraordinary income
Extraordinary losses

1,333
186

84
1,212

Income before income taxes and minority interests

17,263

11,824

Total income taxes

3,996

4,131

Income before minority interests

13,266

7,692

Minority interests in income
Net income

117

932

13,148

6,760

Summary of consolidated statement of comprehensive income(Millions of yen)
Fiscal year ended
March 31, 2014

Fiscal year ended
March 31, 2015

Income before minority interests
Total other comprehensive income

13,266
3,002

7,692
9,009

Comprehensive income

16,26916,702Comprehensive income attributable to
Owners of parent
Minority interests

16,308(39)

15,102
1,599

143) Summary of consolidated statement of changes in equity (Japanese GAAP)
Fiscal year ended March 31, 2014
(Millions of yen)
Shareholders’ equity

Accumulated othercomprehensive
incomeMinority interests

Balance at beginning ofcurrent period

90,991(1,638)8,138

97,491

Total changes of items during
period11,241

3,588(1,222)

13,607

Balance at end of current
period102,232

1,950

6,915

111,099

Total net assets

Fiscal year ended March 31, 2015
(Millions of yen)
Shareholders’ equity

Accumulated othercomprehensive
incomeMinority interests

Balance at beginning ofcurrent period

102,232

1,950

6,915

111,099

Cumulative effects ofchanges in accounting
policies

52

–

–

52

Restated balance

102,285

1,950

6,915

111,151

Total changes of items during
period(2,405)8,370(1,168)

4,797

Balance at end of current
period99,87910,3205,747

115,948

Total net assets4) Summary of consolidated statement of cash flows (Japanese GAAP)(Millions of yen)
Fiscal year ended
March 31, 2014
Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents

13,646(15,120)(2,771)
1,023

Fiscal year ended
March 31, 2015
13,465(21,783)
4,129
1,443

Net increase (decrease) in cash and cash equivalents(3,221)(2,744)

Cash and cash equivalents at beginning of period

23,36920,147

Cash and cash equivalents at end of period

20,147

17,4035) Changes in significant matters in preparing consolidated financial statements (Japanese GAAP)
Fiscal year ended March 31, 2014
Disclosure of scope of consolidation
FCC AUTOMOTIVE PARTS DE MEXICO, S.A. DE C.V. is newly established in the fiscal year
under review and included in the scope of consolidation.
Application of accounting standard for retirement benefits
The Company has applied the “Accounting Standard for Retirement Benefits” (ASBJ Statement No.
26, May 17, 2012) and “Guidance on Accounting Standard for Retirement Benefits” (ASBJ
Guidance No. 25, May 17, 2012), except for the provisions of the main clauses of paragraph 35 of
the Accounting Standard for Retirement Benefits and paragraph 67 of the Guidance on Accounting
15

Standard for Retirement Benefits, effective from the end of the fiscal year under review. Accordingly,
the Company has changed its accounting policy to one that recognizes the difference between
retirement benefit obligations and plan assets as defined benefit liability and asset and recorded
unrecognized actuarial gains or losses and unrecognized past service cost under defined benefit
liability and asset.
Application of the Accounting Standard for Retirement Benefits, etc. is in line with the transitional
measures provided in paragraph 37 of the Accounting Standard for Retirement Benefits. In
accordance with such measures, the effect of the change has been added to or deducted fromremeasurements of defined benefit plans under accumulated other comprehensive income as of theend of the fiscal year under review.
As a result of the change, as of the end of the fiscal year under review, defined benefit liability of¥1,229 million and defined benefit asset of ¥108 million were recorded and accumulated othercomprehensive income increased by ¥342 million.
Net assets per share increased by ¥6.83.
Fiscal year ended March 31, 2015
Disclosure of scope of consolidation
FCC CLUTCH INDIA PRIVATE LTD. and PT. FCC PARTS INDONESIA are newly established in
the fiscal year under review and included in the scope of consolidation.
Application of accounting standard for retirement benefits
Regarding the “Accounting Standard for Retirement Benefits” (ASBJ Statement No. 26, May 17,2012) and the “Guidance on Accounting Standard for Retirement Benefits” (ASBJ Guidance No. 25,
March 26, 2015), effective from the fiscal year under review, the Company has applied theprovisions of the main clauses of paragraph 35 of the Accounting Standard for Retirement Benefits
and paragraph 67 of the Guidance on Accounting Standard for Retirement Benefits, reviewed its
calculation method for retirement benefit obligations and service cost. Accordingly, the Company
changed the method of attributing expected retirement benefits to periods from the straight-line basis
to the benefit formula basis, and changed the method of determining the discount rate from a method
based on a maturity period of bonds decided depending on a period of years approximate to the
expected average remaining years of service of employees to one that uses a single weighted average
discount rate reflecting the estimated timing of retirement benefit payments and the amount for eachestimated timing.
In accordance with the transitional measures provided in paragraph 37 of the Accounting Standard
for Retirement Benefits, the effect of the change in the calculation method of retirement benefit
obligations and service cost has been added to or deducted from retained earnings as of the
beginning of the fiscal year under review.
As a result of the change, as of the beginning of the fiscal year under review, defined benefit liability
decreased by ¥80 million and retained earnings increased by ¥52 million.
The effect of this change on profit or loss is immaterial.
Application of accounting standard for business combinations
Effective from the beginning of the fiscal year starting on or after April 1, 2014, it has become
possible to apply the “Accounting Standard for Business Combinations” (ASBJ Statement No. 21,
September 13, 2013), “Accounting Standard for Consolidated Financial Statements” (ASBJ
Statement No. 22, September 13, 2013), “Accounting Standard for Business Divestitures” (ASBJ
Statement No. 7, September 13, 2013), etc. Accordingly, the Company has applied these accounting
standards (except for the provisions of paragraph 39 of the Accounting Standard for Consolidated
Financial Statements) effective from the fiscal year under review. As a result, the method ofrecording the amount of difference caused by changes in the Company’s ownership interests in
subsidiaries in the case of subsidiaries under ongoing control of the Company was changed to one in16which it is recorded as capital surplus, and the method of recording acquisition-related costs waschanged to one in which they are recognized as expenses for the fiscal year in which they are
incurred. Furthermore, for business combinations carried out on or after the beginning of the fiscal
year under review, the accounting method was changed to one in which the reviewed acquisition costallocation resulting from the finalization of the tentative accounting treatment is reflected in the
consolidated financial statements for the fiscal year in which the business combination occurs.
Application of the Accounting Standard for Business Combinations, etc. is in line with thetransitional measures provided in paragraph 58-2 (4) of the Accounting Standard for Business
Combinations, paragraph 44-5 (4) of the Accounting Standard for Consolidated Financial Statements
and paragraph 57-4 (4) of the Accounting Standard for Business Divestitures. Application of thesestandards commenced as of the beginning of the fiscal year under review, and will continue going
forward.
As a result, income before income taxes and minority interests for the fiscal year under review
decreased by ¥27 million. In addition, as of the end of the fiscal year under review, capital surplus
decreased by ¥4,566 million and retained earnings decreased by ¥2,592 million.
In the consolidated statement of changes in equity for the fiscal year under review, the year-end
balance of capital surplus decreased by ¥4,566 million and the year-end balance of retained earnings
decreased by ¥2,592 million.
Net assets per share decreased by ¥142.63 in the fiscal year under review.
6) Differences between main items in consolidated financial statements prepared in accordance withIFRS and equivalent items in consolidated financial statements if prepared in accordance withJapanese GAAP
Fiscal year ended March 31, 2014
Certain development expense that was expensed under Japanese GAAP is capitalized under IFRS.
Consequently, goodwill and intangible assets in the consolidated statement of financial position
increased by ¥1,105 million.
In the consolidated statement of income, cost of sales increased by ¥618 million, and research anddevelopment expense included in selling, general and administrative expenses decreased by ¥482
million.
Fiscal year ended March 31, 2015
Certain development expense that was expensed under Japanese GAAP is capitalized under IFRS.
Consequently, goodwill and intangible assets in the consolidated statement of financial position
increased by ¥1,527 million.
In the consolidated statement of income, cost of sales increased by ¥589 million, and research anddevelopment expense included in selling, general and administrative expenses decreased by ¥1,011
million.

17

2. Overview of production, orders received and sales(1) Production performance
Production performance by segment for the fiscal year under review is as shown below.
Segment nameFiscal year ended March 31, 2015

Year-on-year comparison (%)

Motorcycle clutches (Millions of yen)

83,554

106.0

Automobile clutches (Millions of yen)

72,278106.5

155,833

106.2

Total (Millions of yen)
Notes: 1. Amounts are based on sales prices.
2. Consumption taxes are not included in the above amounts.

(2) Status of orders received
Status of orders received by segment for the fiscal year under review is as shown below.
Orders received(Millions of yen)

Year-on-yearcomparison (%)

Order backlog(Millions of yen)

Year-on-yearcomparison (%)

Motorcycle clutches

83,627

107.5

6,996

110.5

Automobile clutches

72,016

105.3

6,369

110.1

155,644106.5

13,365110.3

Segment name

Total

Notes: 1. Amounts are based on sales prices.
2. Consumption taxes are not included in the above amounts.

(3) Sales performance
Sales performance by segment for the fiscal year under review is as shown below.
Segment nameFiscal year ended March 31, 2015

Motorcycle clutches (Millions of yen)

Year-on-year comparison (%)

82,961

Automobile clutches (Millions of yen)
Total (Millions of yen)

106.5

71,434

105.7

154,395

106.2

Notes: 1. The table below shows sales results by major transaction partner and the ratio of those sales results to total sales
results for the last two fiscal years.
Transaction partner
Honda Motor Co., Ltd.

Fiscal year ended March 31, 2014

Fiscal year ended March 31, 2015

Amount(Millions of yen)Amount(Millions of yen)

16,372

Ratio (%)
11.3

2. Consumption taxes are not included in the amounts in the above table.

18

12,558

Ratio (%)
8.13

3. Issues to address(1) Basic corporate management policy
The Group’s fundamental principle is to “give thoughtful attention to safety and the environment, anduse creative ideas and technology to contribute to society by supplying products that give joy tocustomers.”
In line with this corporate philosophy, the Group’s officers and employees “place safety and theenvironment first when conducting business,” “employ ingenuity and creative thinking for the greater
purpose of advancing our business,” “renew and improve ourselves and our business, every day,”“work in a speedy and timely manner” and “respect harmony among people and create workplaces
where people can enjoy what they do in a positive working atmosphere.”(2) Medium- and long-term business strategy of the Company
Although demand is expected to continue growing both in the motorcycle and automobile markets, it
is also expected that global competition among parts manufacturers will increase further. To improveits corporate value under such a management environment, the Group formulated the 9th MediumTerm Management Plan covering the three years starting from FY2014 and set the following priority
measures.
1) Improve customer satisfaction
2)
Promote sales expansion
3)
Develop new product and business4)
Increase cost competitiveness5)
Strengthen the Group’s business management centering on developing humanresources
6)
Promote corporate social responsibility (CSR) activities(3) Issues to address
The Company will ensure implementation of the priority measures set out in the 9th Medium-Term
Management Plan to display the Group’s comprehensive strengths and build foundations forsustainable growth. In particular, the Company will focus on increasing the production of automobile
clutches in the U.S. and China and improving profitability.
The following are the principal issues to be addressed by each operating segment.
Motorcycle clutches
Improve profitability by restructuring production
Expand production capacity in India
Automobile clutches
Increase production in the U.S. and smoothly launch mass production at the subsidiary in Mexico
Improve productivity in the U.S. and China
Launch new models in the U.S.

19

4. Business risks
Of the items related to the overview of business and financial information described in this Annual
Securities Report, the following may have a considerable impact on the investment decisions ofinvestors.
Please note that matters concerning the future in this article were determined by the Group as of thefiling date of this Annual Securities Report.
(1) Business development centered on clutch products
The Group continues to evolve as a specialist in clutch products. Although the clutch products
currently manufactured and sold by the Group are important functional components of drive trains forautomobiles and motorcycles driven by internal combustion engines, there is no guarantee that areplacement for a clutch product will not be developed and put into general use in the future.
In addition, clutch products may become unnecessary as drive train components in next-generation
automobiles and motorcycles that are not driven by internal combustion engines.
(2) Dependence on certain industries and customers
Most clutch products manufactured and sold by the Group are for the automobile and motorcycle
industries. As a result, the financial performance of the Group may be affected by future trends inthese industries. In addition, the Group’s sales revenue from the Honda Motor Group accounted forapproximately 55% of the Group’s sales revenue in the fiscal year ended March 31, 2015. The
financial performance of the Group could be significantly affected, therefore, by the Honda Motor
Group’s future business strategy, procurement policies and other decisions.
(3) Development of overseas business
The Group operates globally, centering on Japan, the U.S. and Asia. Accordingly, the Group’s
financial performance could be affected by following factors: political and economic trends in various
countries; fluctuations in foreign exchange markets; unforeseen changes in laws and regulations;international tax-related risks, such as transfer pricing taxation; and the occurrence of natural disasters.
(4) Competition faced by the GroupInternational competition in the automobile and motorcycle industries has become extremely fierce.
While the Group is endeavoring to sustain and strengthen its competitiveness in various areas, ranging
from product development and manufacturing to quality assurance, certain obstacles may make it
difficult to do so in the future, in which case the Group’s market share and earnings capability could
decline.
(5) Compensation for product defects
Although the Group is doing all it can to ensure sufficient quality control, it is not possible tocompletely prevent defects and deficiencies in all products. In addition, large recalls by final
assemblers caused by defects in products supplied by the Group could result in enormous costs to theGroup, as well as in serious damage to its reputation. In such an event, product defect liability could
have a serious impact on both the Group’s financial performance and financial condition.
(6) Impacts of natural disasters and earthquakes, etc.
The Group is implementing measures to minimize potential risks of disruptions to its production lines
caused by major natural disasters. There is no guarantee, however, that it will be able to completely
avoid or reduce damage. In this respect, the Group’s principal manufacturing facilities areconcentrated notably in western Shizuoka, and this area lies within a region that is likely to beaffected by the widely predicted Tokai and Tonankai earthquakes. The occurrence of such a majordisaster could have an enormous impact on the Group’s manufacturing facilities and cause asignificant reduction in its production capacity.

205. Critical contracts for operation
At a meeting of the Board of Directors held on September 25, 2014, the Company adopted a resolution
to dissolve a joint venture with Rico Auto Industries Ltd. (Head Office: Gurgaon, Haryana, India; “RicoAuto Industries”). Effective on the same day, the Company concluded a share transfer agreement with
Rico Auto Industries, under which the Group will acquire shares of FCC RICO LTD. (currently FCC
INDIA MANUFACTURING PRIVATE LTD.) held by Rico Auto Industries (50% of the total sharesissued). The details of the business combination based on the agreement are described in “V. Financial
information, 1. Consolidated financial statements, etc., (1) Consolidated financial statements, Notes toconsolidated financial statements, 5. Business combinations.”
6. Research and development activities
As a manufacturer of functional components for transportation vehicles, the Group has adopted thebasic R&D policy of identifying customer needs and providing products that give customers excellent
performance through the application of creative ideas and technologies. Accordingly, it carries out bothbasic research on friction materials for use in motorcycle, automobile and general-purpose clutches andR&D on the clutches themselves, including R&D on production technologies for use in their
manufacture.
The Group also develops new products by making improvements to existing products and using
technologies it has accumulated through experience in manufacturing clutches (and friction materials
employed in clutches). Among R&D activities aimed at protecting the environment, it is developing a
porous fiber catalytic sheet (paper catalyst), which it believes can be employed as a paper catalyst to
clean engine exhaust emissions.
During the fiscal year ended March 31, 2015, research and development expense (including expenses
recognized as development assets) amounted to ¥3,163 million.
The following is a summary of R&D activities by segment during the fiscal year ended March 31, 2015.
Motorcycle clutches
Research and development activities are underway to develop new wet friction materials formotorcycles and dry friction materials for scooters to improve product appeal, including clutch
operability, and reduce costs.
Principal achievements during the fiscal year ended March 31, 2015:
1) In ASEAN, began mass production of pulley assemblies and clutches for commuter-use
motorcycles targeting the global consumer market;
2) Began mass production of clutches for large-displacement sports model motorcycles incorporating
the Company’s proprietary A&S technology; and
3) Continued developing new friction materials that offer enhanced product appeal and durability.
In addition, the Company is conducting R&D activities aimed at expanding applications for paper
catalysts to clean engine exhaust emissions of general-purpose machinery, for which mass production
began in March 2011.
Research and development expense in the motorcycle clutches segment amounted to ¥1,206 million.
Automobile clutches
Research and development activities are underway with the aim of developing new wet friction
materials for automatic transmissions (including CVTs) and new dry friction materials for manualtransmissions to make clutches more compact and lightweight, less expensive to manufacture, andmore fuel efficient.
Principal achievements during the fiscal year ended March 31, 2015:
1) Began mass production of clutch assemblies for CVTs based on the following:• Elements of the Company’s proprietary segment method for manufacturing friction plates, and21• Elements of the Company’s proprietary technologies that increase fuel efficiency and achieve
weight reductions;2) Began mass production of lock-up clutches featuring a new damper structure with excellent
damping properties; and
3) Developed new friction materials with enhanced product appeal and durability.
Research and development expense in the automobile clutches segment amounted to ¥1,957 million.
7. Analysis of financial position, operating results and cash flows(1) Significant accounting policies and estimates
The consolidated financial statements of the Company have been prepared in accordance with IFRS
pursuant to the provisions of Article 93 of the Ordinance on Terminology, Forms and Preparation
Methods of Consolidated Financial Statements. Estimates that are deemed necessary have been madebased on reasonable criteria.
Significant accounting policies applied in the consolidated financial statements of the Company areprovided in “V. Financial information, 1. Consolidated financial statements, etc., (1) Consolidated
financial statements, Notes to consolidated financial statements, 3. Significant accounting policies.”(2) Analysis of financial position for the fiscal year ended March 31, 2015
1) Current assets
At the end of the fiscal year under review, current assets were ¥70,445 million, up ¥7,499 million
compared with the end of the previous fiscal year. This is mainly due to an increase of ¥3,349
million in trade and other receivables and an increase of ¥3,443 million in inventories, in spite of adecrease of ¥1,489 million in cash and cash equivalents.
2) Non-current assets
At the end of the fiscal year under review, non-current assets were ¥93,374 million, up ¥17,124
million compared with the end of the previous fiscal year. This is mainly due to an increase of¥14,410 million in property, plant and equipment.
3) Current liabilities
At the end of the fiscal year under review, current liabilities were ¥27,834 million, up ¥5,406 million
compared with the end of the previous fiscal year. This is mainly due to an increase of ¥4,271
million in borrowings.
4) Non-current liabilities
At the end of the fiscal year under review, non-current liabilities were ¥19,663 million, up ¥14,233
million compared with the end of the previous fiscal year. This is mainly due to an increase of¥12,139 million in borrowings.
5) Equity
At the end of the fiscal year under review, equity was ¥116,321 million, up ¥4,983 million comparedwith the end of the previous fiscal year.
This is mainly due to an increase of ¥3,154 million in retained earnings and an increase of ¥7,948
million in other components of equity, in spite of a decrease of ¥4,916 in share premium.
(3) Analysis of operating results for the fiscal year ended March 31, 2015
Please refer to “II. Overview of business, 1. Overview of business results, (1) Business results.”(4) Factors that may have a significant impact on the operating results
Please refer to “II. Overview of business, 4. Business risks.”
Regarding the Group’s response, please refer to “II. Overview of business, 3. Issues to address.”22

(5) Present conditions and outlook of business strategy
Please refer to “II. Overview of business, 3. Issues to address.”(6) Analysis of capital resources and funding liquidity
The Group’s financial policy is to maintain the sound balance sheet taking into account appropriate
liquidity, etc. in securing funds for business activities. Cash flows for the fiscal year under review areprovided in “II. Overview of business, 1. Overview of business results, (2) Cash flows.”
Note: Of information in (1) to (6) above, matters concerning the future were determined by the Group as of the filing dateof this Annual Securities Report.

23

III. Information about facilities
1. Overview of capital investments, etc.
During the fiscal year ended March 31, 2015, the Company made total capital investments (including
investments on intangible assets) of ¥20,276 million. The principal capital investment items were:expanding production capacity in the U.S. and China; starting up the Group’s first overseas paper-based
friction materials factory and a local subsidiary in Mexico; and investments accompanying areorganization of production facilities in Japan. The breakdown of capital investments by businesssegment is ¥3,603 million for motorcycle clutches, ¥15,501 million for automobile clutches, and¥1,171 million for the common segment.
(1) Reporting company
Expansion of factory and manufacturing facilities for clutches in Hamakita Factory accompanying areorganization of production facilities in Japan(2) Subsidiaries
Construction of factory and manufacturing facilities for clutches at FCC AUTOMOTIVE PARTS DE
MEXICO, S.A. DE C.V.
Manufacturing facilities to produce new models and production capacity expansion at FCC (North
Carolina), LLC.
Manufacturing facilities to produce new models and production capacity expansion at FCC(INDIANA), LLC.
Manufacturing facilities to produce new models and production capacity expansion at FCC (Adams),
LLC.
Manufacturing facilities to produce new models and production capacity expansion at PT. FCC
INDONESIA
Adoption of in-house manufacturing and expansion of production capacity at FCC INDIA
MANUFACTURING PRIVATE LTD.
2. Major facilities
Major facilities of the Group are as follows:(1) Reporting company
As of March 31, 2015
Carrying amount (Millions of yen)
Name
(Location)

Segment nameFacilities

Buildings
andstructures

Machinery,equipment
andvehicles

Land
(m2)

Other

Total

Number of
employees

Hosoe Factory(Kita-ku, Hamamatsushi, Shizuoka)

Motorcycle and Manufacturing
automobile
facilities forclutches
clutches

182

365

270
(18,080)

42

862

140
[4]

Hamakita Factory(Kita-ku, Hamamatsushi, Shizuoka)

Automobile
clutches

Manufacturing
facilities forclutches

518

588

676
(26,216)

1,493

3,276

51
[5]

Tenryu Factory(Iwata-shi, Shizuoka)

Motorcycle and Manufacturing
automobile
facilities forclutches
clutches

321

280

1,022
(32,511)

25

1,649

55

Suzuka Factory(Suzuka-shi, Mie)

Motorcycle and Manufacturing
automobile
facilities forclutches
clutches

2,480

1,215

1,292
(75,130)

290

5,279

220
[82]

Testing
apparatus andmeasuring
instruments

469

661

216
(12,093)

78

1,425

182
[46]

R&D Division(Kita-ku, Hamamatsushi, Shizuoka)

Common24

(2) Domestic subsidiaries
As of March 31, 2015
Carrying amount (Millions of yen)
Name
(Location)
KYUSHU F.C.C. CO.,LTD.
(Uki-shi, Kumamoto)

Segment nameFacilities

Buildings
andstructures

Machinery,equipment
andvehicles

Land
(m2)

161

182

11
(20,474)

Motorcycle and Manufacturing
automobile
facilities forclutches
clutches

Other

Total

61

417

Number of
employees

115
[35]

(3) Overseas subsidiaries
As of March 31, 2015
Carrying amount (Millions of yen)
Machinery,
Buildings
equipment
andandstructures
vehiclesSegment
nameFacilities

Motorcycle
andautomobile
clutches

Manufacturing
facilities forclutches

5,885

FCC (Adams), LLC. Indiana, U.S.

Manufacturing
Automobile
facilities forclutches
clutches

FCC (INDIANA),
LLC

Indiana, U.S.

Manufacturing
Automobile
facilities forclutches
clutches

PT. FCCINDONESIA

Karawang,Indonesia

Motorcycle
andautomobile
clutches

FCC (THAILAND)
CO., LTD.

Bangkok,Thailand

CHENGDU
YONGHUA. F.C.C.
CLUTCHES CO.,LTD.

Sichuan,
China

Name

Location

Number of
employees

Land
(m2)

Other

Total

6,680

34
(366,274)

2,923

15,524

404
[55]

1,867

6,292

55
(161,880)

2,155

10,371

341

1,312

5,685

88
(246,263)

544

7,631

774
[47]

Manufacturing
facilities forclutches

795

3,533

276
(72,812)

125

4,730

1,308
[900]

Motorcycle
andautomobile
clutches

Manufacturing
facilities forclutches

1,299

1,966

692
(87,890)

336

4,295

442
[299]

Motorcycle
andautomobile
clutches

Manufacturing
facilities forclutches

939

2,916

–
(27,826)

62

3,918

369

FCC AUTOMOTIVE
San Luis
PARTS DE
Potosi,
MEXICO, S.A. DE
MexicoC.V.

Manufacturing
Automobile
facilities forclutches
clutches

1,838

17

194
(81,837)

2,551

4,601

62

FCC INDIA
Haryana,
MANUFACTURING
India
PRIVATE LTD.

Motorcycle
andautomobile
clutches

504

2,139

375
(82,680)

645

3,664

636
[1,429]FCC (North
Carolina), LLC.

North
Carolina,
U.S.

Manufacturing
facilities forclutches

Notes: 1. The carrying amount of “Other” assets relates to tools, furniture and fixtures and intangible assets and includes
construction in progress. The amounts shown above do not include consumption taxes.
2. Of the land of KYUSHU F.C.C. CO., LTD., 19,174 m2 was leased from the reporting company.
3. Of the land of FCC (North Carolina), LLC. of 366,274 m2, 11,266 m2 was leased.
4. The number of employees shown in brackets is the number of temporary employees at the end of the period.

25

3. Planned additions, retirements, etc. of facilities(1) Planned additions, etc. of important facilities
During the next fiscal year (from April 1, 2015 to March 31, 2016), the Company plans to make total
capital investments of ¥23,230 million.
The principal capital investment items will be manufacturing facilities to produce new models andexpansion of production capacity in the U.S. and Japan, and investments accompanying expansion of
production capacity in India and Chengdu in China. The breakdown of planned capital investments bybusiness segment will be ¥4,785 million for motorcycle clutches, ¥17,750 million for automobile
clutches, and ¥695 million for the shared segment.
• Reporting company
Manufacturing facilities to produce new models and production capacity expansion at Tenryu
Factory and Hamakita Factory• Subsidiaries
Manufacturing facilities to produce new models and production capacity expansion at FCC(Adams), LLC.
Manufacturing facilities to produce new models and production capacity expansion at FCC(INDIANA), LLC.
Production capacity expansion at FCC (North Carolina), LLC.
Production capacity expansion at FCC INDIA MANUFACTURING PRIVATE LTD.
Production Capacity Expansion at CHENGDU YONGHUA. F.C.C. CLUTCHES CO., LTD.
(2) Retirement, etc. of important facilities
The Company has no plan for the disposal/retirement of important facilities, with the exception of
the regular upgrading of facilities.

26

IV. Information about reporting company
1. Information about shares, etc.
(1) Total number of shares, etc.
1) Total number of shares
Class

Total number of authorized shares (Shares)

Ordinary shares

90,000,000
Total

90,000,000(2) Changes in number of shares issued, issued capital, etc.

Date

Increase(decrease) in
total number ofshares issued(Shares)

April 1, 2006
(Note)

26,322,015

Balance of total
Increase
number of(decrease) inshares issued
issued capital(Shares)(Millions of yen)
52,644,030

Balance ofissued capital(Millions ofyen)

Increase(decrease) in
capital reserve(Millions ofyen)

Balance ofcapital reserve(Millions of
yen)

4,175

–

4,555

–

Note: This was due to a 2-for-1 share split.

(3) Shareholding by shareholder category
As of March 31, 2015
Shareholding status (Number of shares per share unit: 100 shares)
Category

Financial
Foreign investors
Financial instruments
Other
Individuals,
institutions
business corporations Companies, Individuals
etc.
etc.
operators

Publicsector

Total

Shares lessthan oneunit(Shares)Number ofshareholders

–

38

23

127

155

4

14,527

14,874–

Number ofshares held
(Units)–108,517

3,057

145,709

137,865

7

131,162

526,317

12,330Shareholding
ratio (%)

–

20.62

0.58

27.69

26.19

0.00

24.92

100.00–Notes: 1. 2,455,400 treasury shares are included in “Individuals, etc.” as 24,554 units.
2. “Other corporations” column above includes 37 units of shares held in the name of Japan Securities Depository
Center, Incorporated.

27

(4) Major shareholders
As of March 31, 2015
Number of shares
held(Thousands ofshares)Shareholding ratio(%)

2-1-1 Minami-Aoyama, Minato-ku,
Tokyo10,881

20.66

BNP Paribas Sec Service
Luxembourg Jasdec Aberdeen Global 33 RUE DE GASPERICH, L-5826
Client Assets
HOWALDHESPERANGE,(Standing Proxy: Custody Division, LUXEMBOURG
Tokyo branch of the Hong Kong and (3-11-1 Nihombashi, Chuo-ku,
Shanghai Banking Corporation
Tokyo)
Limited)

3,103

5.89

Japan Trustee Services Bank, Ltd.
(Sumitomo Mitsui Banking
Corporation Retirement Benefit Trust 1-8-11 Harumi, Chuo-ku, Tokyo
Account re-entrusted by Sumitomo
Mitsui Trust Bank, Limited)

2,508

4.76

Name

Honda Motor Co., Ltd.

Address

Y.A Co., Ltd.

38-28 Yamate-cho, Naka-ku,
Hamamatsu-shi, Shizuoka

2,019

3.83

NORTHERN TRUST CO. (AVFC)
ACCOUNT NON TREATY(Standing Proxy: Custody Division,
Tokyo branch of the Hong Kong andShanghai Banking Corporation
Limited)50 BANK STREET CANARY
WHARF LONDON E14 5NT, UK(3-11-1 Nihombashi, Chuo-ku,
Tokyo)

1,594

3.02

Yoshihide Yamamoto

Naka-ku, Hamamatsu-shi, Shizuoka

1,558

2.96

Japan Trustee Services Bank, Ltd.
(Trust Account)

1-8-11 Harumi, Chuo-ku, Tokyo

1,444

2.74

Trust & Custody Services Bank, Ltd.
as trustee for Mizuho Bank
Harumi Island Triton Square Office
Retirement Benefit Trust Account re- Tower Z, 1-8-12 Harumi, Chuo-ku,
entrusted by Mizuho Trust andTokyo
Banking Co., Ltd.

1,315

2.49

Ei Yamamoto

Naka-ku, Hamamatsu-shi, Shizuoka

1,300

2.47

The Master Trust Bank of Japan, Ltd. 2-11-3 Hamamatsu-cho, Minato-ku,(Trust Account)
Tokyo

1,160

2.20

26,885

51.07

Total

–

Notes: 1. In addition to the above, the Company held 2,455 thousand treasury shares.
2. Of the above number of shares held, the number of shares in association with fiduciary activities is as follows:
Japan Trustee Services Bank, Ltd. (Sumitomo Mitsui Banking Corporation Retirement
Benefit Trust Account re-entrusted by Sumitomo Mitsui Trust Bank, Limited)Japan Trustee Services Bank, Ltd. (Trust Account)
Trust & Custody Services Bank, Ltd. as trustee for Mizuho Bank Retirement Benefit
Trust Account re-entrusted by Mizuho Trust and Banking Co., Ltd.
The Master Trust Bank of Japan, Ltd. (Trust Account)

2,508 thousand shares
1,444 thousand shares
1,315 thousand shares
1,160 thousand shares

3. Mondrian Investment Partners Limited sent the Company a copy of the change report for the substantial
shareholding report as of March 27, 2014, reporting that this company held 4,297 thousand shares as of March 24,
2014. Since the Company could not confirm the actual number of shares held by this company at the year-end, it
was not included in the above major shareholders.
The content of the copy of the change report for the substantial shareholding report from Mondrian Investment
Partners Limited is as follows:
Copy of the change report for the substantial shareholding report as of March 27, 2014
Large volume holder:
Mondrian Investment Partners Limited
Address:
Fifth Floor, 10 Gresham Street, London EC2V 7JD, United Kingdom
Number of shares, etc. held: Shares 4,297,000 shares

28

Shareholding ratio :8.16%
4. Aberdeen Investment Management K.K. and its joint holder, Aberdeen Asset Management Asia Limited, sent theCompany a copy of the change report for the substantial shareholding report as of July 23, 2014, reporting thateach of these companies held shares as follows as of July 15, 2014. Since the Company could not confirm theactual number of shares held by them at the year-end, they were not included in the above major shareholders.
Name
Aberdeen Investment
Management K. K.

Number of shares,
etc. held(Shares)

Address

Toranomon Seiwa Building
Shares
1-2-3 Toranomon, Minato-ku, Tokyo

Aberdeen Asset Management 21 Church Street, #01-01 Capital
Asia Limited
Square 2 Singapore 049480

SharesShareholding ratio(%)

271,500

0.52

4,533,100

8.61

2. Dividend policy
The Company considers returning profits to shareholders to be one of the top management issues. Ourbasic policy is to continue to pay a stable dividend from a comprehensive point of view based on
consolidated financial performance and dividend payout ratio, etc., while striving to improve corporate
value by making capital investments and carrying out research and development activities necessary for
future growth and thus maintaining and strengthening its competitiveness.
The Company’s basic policy on dividend payments is to pay dividends twice a year in the form ofinterim dividends and year-end dividends.
Decisions on year-end dividends are made by the General Meeting of Shareholders, and decisions on
interim dividends are made by the Board of Directors.
Based on the foregoing policy, the Company paid a total dividend for the fiscal year under review of¥40 per share (of which ¥20 was paid out as an interim dividend). This resulted in a dividend payout
ratio of 27.8%.
The Company uses internal reserves to make investments for future business expansion, etc.
The Company stipulates in the Articles of Incorporation that it is able to pay an interim dividend, with
September 30 as the record date, based on a resolution of the Board of Directors.
Dividends for the fiscal year under review were as follows.
Total amount ofdividends(Millions of yen)

Dividends per share(Yen)

Resolution at a Board of Directors meeting
held on October 28, 2014

1,003

20

Resolution at the Annual General Meeting of
Shareholders held on June 23, 2015

1,003

20

Resolution date29

3. Information about officers
Men: 13, Women: – (Percentage of female officers: –%)Title

President andRepresentative
Director

Managing
Director

PositionName

Toshimichi
MatsudaHead of
Purchasing,
Head ofbusiness
Yoshitaka
operation in
Saito
China and Risk
Management
Officer

Date of birth

Career summary

Term ofofficeNumber ofshares held
(Hundreds ofshares)

December 9,
1952

Mar. 1975 Joined the Company
Apr. 1996 President and Director of FCC(EUROPE) LTD.
Jun. 2001 Director and General Manager ofSales Division of the Company
Jun. 2005 Director, in charge of Sales andPurchasing of the Company
Jun. 2006 Director, in charge of Sales andPurchasing and Risk Management
Officer of the Company
Apr. 2007 Director, Head of Sales andPurchasing, Head of business
operation in China and Risk
Management Officer of theCompany
Jun. 2008 Managing Director, Head of Sales
and Purchasing and Head of
business operation in China of theCompany
Jun. 2010 Managing Director, Head of Sales
and Purchasing and Compliance
Officer of the Company
Jun. 2011 Managing Director, Head of Sales
and Compliance Officer of theCompany
Jun. 2012 Senior Managing Director, Head of
Sales and Compliance officer of theCompany
Apr. 2013 Senior Managing Director of theCompany
Jun. 2013 President and Representative
Director of the Company(incumbent)(Note 3)90Feb. 2009 Joined the Company
Jan. 2011 President and Director of FCC(INDIANA) Mfg., LLC. (currently
FCC (INDIANA), LLC.) and
President and Director of FCC(INDIANA), INC. (currently FCC(INDIANA), LLC.)
Jun. 2011 Director of the Company
Apr. 2012 Director and Head of business
operation in North America of theCompany
November 29,
President and Director of FCC(Note 3)1973
(North America), INC.
Jun. 2012 Managing Director and Head of
business operation in North Americaof the Company
Apr. 2013 Managing Director and Head of
business operation of motorcycles
business of the Company
Apr. 2014 Managing Director, Head of
Purchasing, Head of business
operation in China and Risk
Management Officer of theCompany (incumbent)

70

30

TitleManaging
Director

Director

Position

Name

Career summary

Term ofofficeNumber ofshares held
(Hundreds ofshares)Mar. 1982 Joined the Company
Apr. 2009 General Manager of R&D Divisionof the Company
Jun. 2009 Director and General Manager of
R&D Division of the Company
Jun. 2010 Director, Head of Research andDevelopment and General Manager
of R&D Division of the Company
Jun. 2013 Managing Director, Head of
Research and Development andGeneral Manager of R&D Divisionof the Company
Apr. 2015 Managing Director, Head of
business operation of automobiles
business and Head of Research andDevelopment of Automobile
Components of the Company(incumbent)

Date of birth

Head ofbusiness
operation of
automobiles
business andKazuhiro
Head of
Itonaga
Research andDevelopmentof Automobile
Components

March 11,1960

(Note 3)13

Head ofbusiness
operation of
motorcycles
business, Headof business
Kazutooperation in
SuzukiASEAN andIndia and Headof business
operation inSouth America

Apr. 1984 Joined the Company
Apr. 2009 General Manager of Corporate
Planning Office of the Company
Jun. 2010 Director, Head of business operationin China and South America andGeneral Manager of Corporate
Planning Office of the Company
Jun. 2011 Director, Head of business operationin China and South America,
General Manager of Corporate
Planning Office and Risk
Management Officer of theCompany
Jan. 2012 Director, Head of business operationin China and South America andRisk Management Officer of theCompany
Apr. 2012 Director, Head of Production
Engineering, Head of business
May 27, 1961
operation in China and South(Note 3)
America and Risk Management
Officer of the Company
Jun. 2012 Director, Head of Production ofMotorcycle Components, Head of
Production Engineering and Head of
business operation in China andSouth America of the Company
Apr. 2013 Director, Head of business operationof motorcycles business in Japan,
Head of business operation in China
and South America and Risk
Management Officer of theCompany
Apr. 2014 Director, Head of business operationof motorcycles business, Head of
business operation in ASEAN and
India and Head of business
operation in South America of theCompany (incumbent)

23

31

TitleDirector

Director

Director

Director

Term ofofficeNumber ofshares held
(Hundreds ofshares)Head ofManagement
andAdministration,
RyujiroComplianceMatsumoto
Officer and
Chief
Information
OfficerJune 4, 1962

Jul. 2005 Joined the Company
Jan. 2011 General Manager of FCC(THAILAND) CO., LTD.
Jun. 2011 Director, Head of Production ofMotorcycle Components and Headof business operation in Asia of theCompany
Jun. 2012 Director and Head of business
operation in Asia of the Company(Note 3)Apr. 2013 Director, Head of Management andAdministration, General Manager ofCorporate Planning Office,Compliance Officer and Chief
Information Officer of the Company
Jun. 2013 Director, Head of Management andAdministration, Compliance Officer
and Chief Information Officer of theCompany (incumbent)

10

Head of
Production
Engineeringand Head ofEnvironment
and Safety

Apr. 1984 Joined the Company
Jan. 2011 Factory Manager of Ryuyo Factoryand Factory Manager of Tenryu
Factory of the Company
Apr. 2012 Head of Production of Automobile
Components of the Company
Jun. 2012 Director and Head of Production ofAutomobile Components of theJuly 31, 1963
(Note 3)Company
Apr. 2013 Director and Head of business
operation of automobiles business of
the Company
Apr. 2015 Director, Head of Production
Engineering and Head ofEnvironment and Safety of theCompany (incumbent)

14

March 17,1964

Apr. 1986 Joined the Company
Jan. 2012 General Manager of Corporate
Planning Office of the Company
Jun. 2012 Director, Head of Management andAdministration, General Manager ofCorporate Planning Office, Risk
Management Officer and Chief
Information Officer of the Company (Note 3)
Apr. 2013 Director, Head of business operationin North America of the Company
President and Director of FCC(North America), INC.
President and Director of FCC(INDIANA), LLC.
(incumbent)

41

May 3, 1957

Apr. 1978 Joined Honda Motor Co., Ltd.
Apr. 2011 Senior Vice President of Honda
Manufacturing of Alabama, LLC
Apr. 2013 Joined the Company, Assistant to
President and Head of Production
Engineering of the Company
Jun. 2013 Director and Head of Production
Engineering of the Company
Apr. 2014 Director, Head of Production
Engineering and Head ofEnvironment and Safety of theCompany
Apr. 2015 Director and Head of production in
North America of the Company(incumbent)

10

Position

Name

Atsuhiro
Mukoyama

Head ofbusiness
Satoshioperation in
NakayaNorth America

Head of
Kenichiproduction in
Inoue
North America

Date of birth

Career summary

32(Note 3)

TitleDirector

Audit &
Supervisory
Board
Member(full time)

Audit &
Supervisory
Board
Member(full time)

Audit &
Supervisory
Board
MemberAudit &
Supervisory
Board
MemberPosition

Name

Date of birth

Career summary

Term ofofficeNumber ofshares held
(Hundreds ofshares)Kazumoto
Sugiyama

Sep. 2006 Graduated from The Legal Training
and Research Institute of Japan
Oct. 2006 Registered as an attorney (Shizuoka
Bar Association)
Joined Toshio Sugiyama Law Office
May 27, 1969
(Note 3)(current Sugiyama Law Office)Sep. 2008 President of Sugiyama Law Office(to present)
Jun. 2014 Director of the Company(incumbent)–

Hiromichi
SuzukiMar. 1978 Joined the Company
Dec. 2004 General Manager of Oversea
Business Division of the Company
Jun. 2006 Director, Head of business operationin Asia, in charge of Production ofMotorcycle Components andGeneral-purpose Components and
September 20,
General Manager of Oversea(Note 4)
1952
Business Division of the Company
Apr. 2007 Director, Head of business operationin Asia and Head of Production ofMotorcycle Components of theCompany
Jun. 2011 Audit & Supervisory Board Member(full time) of the Company(incumbent)

46

Katsuyoshi
FukatsuMar. 1977 Joined the Company
Apr. 2009 President and Director of FCC(INDIANA) Mfg., LLC. (currently
FCC (INDIANA), LLC.)
Jun. 2009 Director and Head of business
operation in North America of theCompany
November 30,
President and Director of FCC(Note 5)
1954
(INDIANA), INC. (currently FCC(INDIANA), LLC.)
Jun. 2010 President and Director FCC (North
America), INC.
Jun. 2012 Audit & Supervisory Board Member(full time) of the Company(incumbent)

47

Yoshinori
Tsuji

Mar. 1986 Graduated from The Legal Training
and Research Institute of Japan
Apr. 1986 Registered as an attorney (Nagoya
Bar Association)
Apr. 1987 Transferred registration to theApril 17, 1959
Shizuoka Bar Association(Note 4)
Established Yoshinori Tsuji Law
Office(to present)
Jun. 2007 Audit & Supervisory Board Memberof the Company (incumbent)–

Masahide
SatoOct. 1992 Joined Showa Ota & Co. (currently
Ernst & Young ShinNihon LLC)
Apr. 1996 Registered as Certified Public
Accountant
Sep. 2005 Established Masahide Sato
(Note 5)
Accounting Firm
(to present)
Jun. 2006 Audit & Supervisory Board Memberof the Company (incumbent)

–

Total

364

February 10,
1964

Notes: 1. Mr. Kazumoto Sugiyama is an Outside Director.
2. Both Mr. Yoshinori Tsuji and Mr. Masahide Sato are Outside Audit & Supervisory Board Members.
3. One year from the conclusion of the Annual General Meeting of Shareholders held on June 23, 2015
4. Four years from the conclusion of the Annual General Meeting of Shareholders held on June 23, 2015
5. Four years from the conclusion of the Annual General Meeting of Shareholders held on June 25, 201233

4. Status of corporate governance, etc.
(1) Status of corporate governance*

Basic policy regarding corporate governance
The Group’s fundamental principle is to “give thoughtful attention to safety and the environment,
and use creative ideas and technology to contribute to society by supplying products that give joy tocustomers.” Consequently, the Company considers enhancing corporate governance to be one of the
top management issues, and is working actively on this with the aim of increasing the confidence ofvarious stakeholders, including shareholders, customers, employees, and local communities, andimproving corporate value.

1) System of corporate governancei) Summary of the system of corporate governance
The Board of Directors comprises nine Directors, of whom one is an Outside Director. In addition
to making decisions on important matters concerning operations and fulfilling functions requiredby law, the Board oversees the execution of the Company’s operations.
The Audit & Supervisory Board is composed of four Audit & Supervisory Board Members, ofwhom two are Outside Audit & Supervisory Board Members. In accordance with auditing policies
and division of responsibility established by the Audit & Supervisory Board, each Audit &Supervisory Board Member participates in meetings of the Board of Directors and other important
meetings, and audits the execution of duties of the Board of Directors by examining the status ofoperations and assets of the Company.
Candidates for Directors are determined by resolution of the Board of Directors, while candidates
for Audit & Supervisory Board Members are determined by resolution of the Board of Directors
upon consent of the Audit & Supervisory Board.
The following diagram shows the relationships among the Company’s organizations and internal
control as of June 24, 2015.

Election/Dismissal

General Meeting of Shareholders
Election/Dismissal

Audit

Board of Directors
ReportAudit &
Supervisory Board
Audit

ReportReportPoint of contact for
accepting proposals
for corporate ethics
improvement

CorporateethicsproposalCompliance
Officer

Risk Management
OfficerCompliance
Committee

Risk Management
Committee

Compliance

Companywide CG
Secretariat

Audit Office

Risk Management

Audit
Each division
Division CG Secretariat

34

Accounting
Auditorii) Reasons for adopting the system of corporate governance described above
As a company with an Audit & Supervisory Board, the Company has a Board of Directors and an
Audit & Supervisory Board to oversee and audit the execution of operations. The Board of
Directors comprises Directors who are well versed in the operations of the Company and one
Outside Director with an objective, broad-ranging and in-depth perspective. The Audit &Supervisory Board is independent of the Board of Directors and a majority of whose members are
Outside Audit & Supervisory Board Members. The Company judges that the present system ofcorporate governance enables oversight and audits of the execution of operations to function
properly.
iii) Other matters regarding corporate governance
The Company resolved the following basic policy regarding the internal control system at a
meeting of the Board of Directors.
• System to ensure that the execution of duties by Directors and employees of the Company andGroup companies complies with laws and regulations and the Articles of Incorporation.
The Company shall establish a code of conduct that is shared by the entire Group and implement
it thoroughly to ensure that the execution of duties by Directors and employees complies withlaws and regulations and the Articles of Incorporation and earns the trust of society.
The Company shall establish a Compliance Committee in which a Compliance Officer serves as
Chairman as an organization to control compliance. In addition, the Company shall establish aninternal reporting system to promote compliance.
• System for storing and managing information on the execution of duties by the Company’s
Directors
The Company shall establish various regulations based on the basic policy for information
management, and appropriately store and manage information regarding the execution of duties
by the Directors.
• Regulations and other systems for managing risk of losses of the Company and Group companies
The management risk of the entire Group shall be acknowledged and evaluated at a meeting of theCompany’s Board of Directors. The Board of Directors of the Company shall elect Directors tomanage the acknowledged and evaluated management risk.
The Company shall establish a Risk Management Committee in which a Risk Management
Officer serves as Chairman as an organization that controls risk management. The Risk
Management Committee shall manage risks in daily operations and cross-functional risks of theentire Group.
• System to ensure the efficient execution of duties by Directors of the Company and Group
companies.
A meeting of the Board of Directors of the Company shall be held once a month, in principle, andon an extraordinary basis whenever necessary to take decisions on legally required matters andimportant operations, and oversee the execution of operations by the Directors.
The Company shall expedite and increase the efficiency of the management decision-making
process using meetings such as management meetings and the executive officer system.
The Company shall draw up a medium-term management plan and annual business plan to
manage the progress of operations and promote the effective use of management resources of theentire Group.
The Company shall establish segregation of duties, reporting lines, and other organizational
standards in the regulations for executing duties, etc.
• System for reporting from Group companies to the Company and other systems to ensure theproper execution of operations within the corporate group comprising the Company and Group
companies

35

The Company shall establish subsidiary management regulations, with the aim of properly
managing Group companies in accordance with their scale of business and significance, etc.
The Company shall oblige Group companies to report to it on a regular basis and develop asystem for having them report specified important matters promptly.
The internal audit department of the Group shall audit the Company and Group companies
regularly or whenever necessary.
• Matters concerning employees who assist Audit & Supervisory Board Members of the Company
in their duties
If an Audit & Supervisory Board Member requests that an employee be assigned as an audit
assistant to assist him/her in his/her duties, the Company shall assign employees to assist him/her.
Audit & Supervisory Board Members have responsibility for employees who assist with theirduties, and the appointment, dismissal, personnel change, and revision of wages of such
employees shall be determined by the Board of Directors upon consent of the Audit &Supervisory Board.
• System for reporting to Audit & Supervisory Board Members of the Company
Audit & Supervisory Board Members shall attend meetings of the Board of Directors and otherimportant meetings, and be allowed to request Directors and employees of the Company andGroup companies to report to them whenever necessary.
Upon receiving a request from Audit & Supervisory Board Members for a report, the Director or
employee shall report to them promptly and appropriately.
The Company shall establish an internal reporting system to ensure an appropriate system forreporting to Audit & Supervisory Board Members.
The Company shall develop a system to prohibit unfavorable treatment of a reporting party in its
operation rules for the internal reporting system.
• Matters regarding the policy for handling expenses and debts incurred for executing duties by the
Audit & Supervisory Board Members of the Company
If an Audit & Supervisory Board Member requests payment of expenses needed for executing
his/her duties, the Company shall pay such expenses promptly.
Audit & Supervisory Board Members shall factor expenses deemed necessary for executing theirduties into the budget in advance. Provided, however, that Audit & Supervisory Board Members
shall be allowed to request reimbursement of emergency or extraordinary expenses after the fact.
• Other systems to ensure audits by the Audit & Supervisory Board Members of the Company are
conducted effectively
Audit & Supervisory Board Members shall exchange opinions with Representative Director,
Directors and Accounting Auditor regularly or whenever necessary.
Audit & Supervisory Board Members shall conduct audits effectively by cooperating closely with
the internal audit department.
iv) Overview of limited liability agreements
In accordance with the provisions of Article 427, paragraph 1 of the Companies Act of Japan(hereinafter the “Companies Act”), the Company has concluded agreements limiting the extent of
any liability for statutory compensation as stipulated in Article 423, paragraph 1 of the said Act
with the Outside Director and Outside Audit & Supervisory Board Members. The limits oncompensation stipulated in these agreements are the minimum amounts prescribed in Article 425,
paragraph 1 of the said Act.
2) Internal audits and audits by the Audit & Supervisory Board Members• Internal audits
The Company has established the internal audit office under the President to develop and operate
the internal control system appropriately, with the aim of improving the effectiveness and36

efficiency of operations, increasing the reliability of financial reporting, ensuring compliance withlaws and regulations relating to business activities, and protecting the Company’s assets. This
office verifies the status of development and operations of internal controls of the entire Group.
This office’s six staff members, including the General Manager, carry out periodic and unscheduledaudits in collaboration with the Audit & Supervisory Board.
• Audits by the Audit & Supervisory Board Members
The Company’s four Audit & Supervisory Board Members, of whom two are Outside Audit &Supervisory Board Members, audit the execution of duties by the Directors, the development andoperation of the Company’s internal control system, and other aspects of operations by, among
other things, attending meetings of the Board of Directors and other important meetings, andexamining the operations and assets of the Company. Such audits are carried out in accordance
auditing policies, plans, and division of responsibility established by the Audit & Supervisory
Board based on the regulations of the Audit & Supervisory Board and the auditing standards ofAudit & Supervisory Board Members. The Company has a system where Audit & Supervisory
Board Members exchange opinions with Representative Director, Directors, and Accounting
Auditor regularly or whenever necessary, and collaborate with the internal audit office to ensure theeffectiveness of audits.
Outside Audit & Supervisory Board Member Masahide Sato is a licensed CPA with considerable
knowledge of finance and accounting.
3) Accounting audits
The Company’s Accounting Auditor is Yasumori Audit Corporation. The following information
covers the names of the certified public accountants involved in accounting audits of the operationsof the Company and the number of assistant accountants who participated in audits.
• Names of CPAs who conducted audits:
Engagement partner: Masakazu Wakabayashi
Engagement partner: Makoto Tsukura• Assistant accountants who participated in accounting audits:
Eight CPAs
4) Outside Director and Outside Audit & Supervisory Board Members
The Company has one Outside Director and two Audit & Supervisory Board Members.
No conflict of interest of any personal, financial, or commercial nature exists between the Company
and Outside Director Kazumoto Sugiyama.
The function and role of the Outside Director in corporate governance is to provide managementwith objective advice related to corporate management from the standpoint of experts and objective
viewpoints based on extensive experience.
Mr. Kazumoto Sugiyama was elected as an Outside Director in the light of his specialized expertiseand extensive experience of corporate legal affairs acquired as a lawyer.
No conflict of interest of any personal, financial, or commercial nature exists between the Company
and Outside Audit & Supervisory Board Members Yoshinori Tsuji and Masahide Sato.
The function and role of Outside Audit & Supervisory Board Members in corporate governance is toaudit the legality of duties executed by the Directors from the standpoint of experts and objective
viewpoints based on extensive experience.
Mr. Yoshinori Tsuji was elected as an Outside Audit & Supervisory Member in the light of his
specialized expertise and extensive experience of corporate legal affairs acquired as a lawyer.
Mr. Masahide Sato was elected as an Outside Audit & Supervisory Member in the light of his
specialized expertise and extensive experience of corporate finance and accounting affairs acquired
as a certified public accountant.

37

While the Company has not established any specific standards or policy regarding independence
when electing Outside Director and Outside Audit & Supervisory Board Members, the Company
gives due consideration to ensure that no conflict of interest exists between them and the Company’s
ordinary shareholders and that there is independence from the Company in view of the Companies
Act, the standards set by financial instruments exchanges, and the like.
In accordance with the requirements of the Tokyo Stock Exchange, Outside Director Kazumoto
Sugiyama and Outside Audit & Supervisory Board Members Yoshinori Tsuji and Masahide Sato aredesignated as independent officers and are registered with the said stock exchange as such.
5) Remuneration, etc. for officersi) Total amount of remuneration, etc., total amount of remuneration, etc. by type and number to be
paid by Director and Supervisory Board Member category
Category

Total amount of remuneration, etc.
by type (Millions of yen)

Total amount of
remuneration, etc.
(Millions of yen)

Directors (excluding Outside Directors)

Remuneration

BonusesNumber ofpayees

228

171

57

11

Outside Directors

2

2

–

1

Audit & Supervisory Board Members(excluding Outside Audit & Supervisory
Board Members)

47

35

11

2

Outside Audit & Supervisory Board
Members

7

7

–

2

Notes: 1. The amount of remuneration, etc. of Directors does not include employee salaries paid to persons who areconcurrently Directors and employees.
2. At the 78th Annual General Meeting of Shareholders held on June 19, 2008, Directors’ remuneration was cappedat ¥500 million per year (which, however, does not include salaries paid for work performed as employees).
3. At the 76th Annual General Meeting of Shareholders held on June 22, 2006, Audit & Supervisory Board Members’
remuneration was capped at ¥90 million per year.

ii) Policy for determining remuneration amounts paid to officers and the method of calculating suchamount as well as the method of determination thereof
The amounts paid to the officers comprise the remuneration paid in exchange for executing duties
and bonuses paid in consideration of the Company’s financial performance and economic andindustry trends during the relevant fiscal year. The amounts paid will be within the limit approved byresolution of the General Meeting of Shareholders. Those paid to Directors will be based on a
resolution of the Board of Directors. Those paid to Audit & Supervisory Board Members will bebased on deliberations among the Audit & Supervisory Board Members.
6) Share ownershipi) Number of issues and total amount of balance sheet amount for investment shares whose purposeof holding is other than for net investment
Number of issues:
Total amount of balance sheet amount:20¥1,084 million

38ii) Type of holding, issue, number of shares, balance sheet amount and purpose of holding forinvestment shares whose purpose of holding is other than for net investment
Fiscal year ended March 31, 2014
Specified investment shares
Issue

Number of shares(Shares)

Balance sheet amount(Millions of yen)

SUZUKI MOTORCORPORATION

52,500141

To maintain and strengthen business
relationships

KANEMATSU
CORPORATION

821,000131

To maintain and strengthen business
relationships

Mizuho Financial Group, Inc.

178,68836

To maintain and strengthen business
relationships

Sumitomo Mitsui Financial
Group, Inc.

5,755

25

To maintain and strengthen business
relationships

SHIMIZU CORPORATION

39,00020

To maintain and strengthen business
relationships

MUSASHI SEIMITSU
INDUSTRY CO., LTD.

6,000

12

To maintain and strengthen business
relationships

Nissin Kogyo Co., Ltd.

4,500

8

To maintain and strengthen business
relationships

TANAKA SEIMITSU
KOGYO CO., LTD.

4,000

3

To maintain and strengthen business
relationships663

2

To maintain and strengthen business
relationships

Yutaka Giken Company
Limited1,000

2

To maintain and strengthen business
relationships

G-TEKT CORPORATION

1,200

1

To maintain and strengthen business
relationships

YAMABIKOCORPORATION

Purpose of holding

Fiscal year ended March 31, 2015
Specified investment shares
Issue

Number of shares(Shares)

Balance sheet amount(Millions of yen)

Reason for shareholding

KANEMATSU
CORPORATION

3,701,000

647

To maintain and strengthen business
relationships

SUZUKI MOTORCORPORATION

52,500189

To maintain and strengthen business
relationships

Mizuho Financial Group, Inc.

178,68837

To maintain and strengthen business
relationships

SHIMIZU CORPORATION

39,00031

To maintain and strengthen business
relationships

Sumitomo Mitsui Financial
Group, Inc.

5,755

26

To maintain and strengthen business
relationships

MUSASHI SEIMITSU
INDUSTRY CO., LTD.

6,000

15

To maintain and strengthen business
relationships

Nissin Kogyo Co., Ltd.

4,500

8

To maintain and strengthen business
relationships

810

4

To maintain and strengthen business
relationships

TANAKA SEIMITSU
KOGYO CO., LTD.

4,000

3

To maintain and strengthen business
relationships

Yutaka Giken Company
Limited1,000

2

To maintain and strengthen business
relationships

G-TEKT CORPORATION

2,400

2

To maintain and strengthen business
relationships

YAMABIKOCORPORATION

39

7) Matters normally requiring adoption of a resolution by the General Meeting of Shareholders, which
may be decided by the Board of Directors• Acquisition of own shares
To carry out capital policy in a flexible and timely manner in response to changes in the economic
environment, the Company provides in its Articles of Incorporation that, in accordance with theprovisions of Article 165, paragraph 2 of the Companies Act, it may acquire own shares throughmarket transactions, etc. based on a resolution of the Board of Directors.
• Interim dividends
To make a flexible return of profits to shareholders, the Company provides in its Articles ofIncorporation that, in accordance with Article 454, paragraph 5 of the Companies Act, it may pay
dividends of surplus (interim dividends) based on a resolution of the Board of Directors.
• Exemption of Directors and Audit & Supervisory Board Members from liability
To create an environment where Directors and Audit & Supervisory Board Members are able tofulfill their expected roles adequately, the Company provides in its Articles of Incorporation that,
pursuant to the provisions of Article 426, paragraph 1 of the Companies Act, it may exempt
Directors (including former Directors) and Audit & Supervisory Board Members (including former
Audit & Supervisory Board Members) from liability as set forth in Article 423, paragraph 1 of theCompanies Act within the limits stipulated by laws and regulations based on a resolution of theBoard of Directors.
8) Number of Directors
The Company states in its Articles of Incorporation that it shall have no more than 15 Directors.
9) Requirements for election of Directors
The Company states in its Articles of Incorporation that adoption of resolutions for the election of
Directors shall require that at least one-third of the shareholders entitled to execute voting rights bepresent, and that an affirmative vote be cast by a majority of such shareholders present. The
Company also states in its Articles of Incorporation that cumulative voting shall not be used for theelection of Directors.
10) Requirements for the adoption of special resolutions by the General Meeting of Shareholders
With the aim of ensuring the smooth operation of the General Meeting of Shareholders, theCompany states in its Articles of Incorporation that the adoption of a special resolution based on
Article 309, paragraph 2 of the Companies Act shall require that at least one-third of theshareholders entitled to execute voting rights be present, and that an affirmative vote be cast by atleast two-thirds of such shareholders present.
(2) Details of audit fee, etc.
1) Details of remuneration to independent auditors
Category

Fiscal year ended March 31, 2014
Fees for audit
certification services(Millions of yen)

Fiscal year ended March 31, 2015

Fees for non-audit
services(Millions of yen)

Fees for audit
certification services(Millions of yen)

Fees for non-audit
services(Millions of yen)

Reporting company

53

–

53

3

Consolidated
subsidiaries

–

–

–

–

Total

53

–

53

3

40

V. Financial information
1. Preparation policy of the consolidated and non-consolidated financial statements(1) The consolidated financial statements of the Company are prepared in accordance with International
Financial Reporting Standards (hereinafter “IFRS”) pursuant to the provisions of Article 93 of theOrdinance on Terminology, Forms and Preparation Methods of Consolidated Financial Statements(Ordinance of the Ministry of Finance No. 28 of 1976).
(2) The non-consolidated financial statements of the Company are prepared in accordance with theOrdinance on Terminology, Forms, and Preparation Methods of Financial Statements, etc. (Ordinanceof the Ministry of Finance No. 59 of 1963; hereinafter the “Ordinance on Financial Statements, etc.”).
The Company is qualified as a company submitting financial statements prepared in accordance withspecial provision and has prepared financial statements pursuant to the provisions of Article 127 of theOrdinance on Financial Statements, etc.
2. Audit certification
In accordance with the provisions of Article 193-2, paragraph 1 of the Financial Instruments andExchange Act of Japan, the consolidated financial statements and the non-consolidated financial
statements for the fiscal year ended March 31, 2015 were audited by Yasumori Audit Corporation.
3. Special efforts to ensure the appropriateness of consolidated financial statements, etc., anddevelopment of a system for fair preparation of consolidated financial statements, etc. inaccordance with IFRSThe Company is making special efforts to ensure the appropriateness of consolidated financial
statements, and developing a system for the appropriate preparation of consolidated financial
statements, in accordance with IFRS. The content thereof is as follows:(1) To develop a system for ensuring correct understanding of accounting standards, etc. andappropriate responses to any changes in accounting standards, etc., the Company has joined the
Financial Accounting Standards Foundation and attends seminars held by the foundation and audit
corporations.
(2) For the adoption of IFRS, the Company keeps up with the latest accounting standards by obtainingpress releases and standards published by the International Accounting Standards Board as needed.
To prepare appropriate consolidated financial statements, etc. under IFRS, the Company has
developed accounting policies of the Group in accordance with IFRS and performs accounting
procedures based on these policies.

411. Consolidated financial statements, etc.
(1) Consolidated financial statements
1) Consolidated statement of financial position(Millions of yen)

AssetsCurrent assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Inventories
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Goodwill and intangible assets
Investments accounted for using the equity
methodOther financial assets
Deferred tax assets
Other non-current assets

Notes

As of
April 1, 2013
(Transition
date)

As of
March 31, 2014

As ofMarch 31, 2015

6, 26
7, 26
8, 26
9
10

23,571
19,035
1,816
15,5152,028

19,046
22,675
1,458
17,6292,135

17,55726,024
1,190
21,073
4,599

61,967

62,94570,445

11, 13, 29
12, 13, 29

47,9282,184

61,0562,705

75,467
3,748

14

774

692

604

8, 26
15
10

8,964
2,560
544

9,001
2,211
581

10,175
2,638
740

Total non-current assets
Total assets

42

62,95676,25093,374

124,924

139,195

163,819

(Millions of yen)

Liabilities and equity
Liabilities
Current liabilities
Trade and other payables
Borrowings
Income taxes payable
Other current liabilities
Total current liabilities
Non-current liabilities
Borrowings
Other financial liabilities
Defined benefit liability
Provisions
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities
EquityIssued capital
Share premium
Retained earnings
Treasury shares
Other components of equity
Total equity attributable to owners of parent
Non-controlling interests
Total equity

Notes

As of
April 1, 2013
(Transition
date)

As of
March 31, 2014

As ofMarch 31, 201517, 2616, 2615
1012,315
90
2,811
4,661

14,900
–
3,004
4,522

15,103
4,271
3,090
5,368

19,87922,427

27,83416, 26
8, 26
18
19
15
10

–
99
1,732
41
3,773
239
5,887
25,766

–
26
1,248
41
3,869
244
5,430
27,857

12,139
26
1,486
36
5,748
227
19,66347,498

20
20
20
20

4,175
4,566
81,228(3,407)
3,945
90,5078,650
99,158

4,175
4,916
92,709(3,407)5,610
104,004
7,332
111,337

4,175–
95,864(3,408)13,558110,190
6,131
116,321

124,924

139,195

163,819

Total liabilities and equity(Note) The accompanying notes are an integral part of these financial statements.

432) Consolidated statement of income(Millions of yen)
Notes
Sales revenue
Cost of sales

Fiscal year ended
March 31, 2014
145,433(119,391)

154,395(131,084)21
22
13, 22

26,042(12,283)
996(243)

23,311(13,812)567(1,320)4
23
23

14,512
2,502
(42)

8,746
3,569
(47)

14

(101)

(163)

15

16,871(3,858)

12,104(4,061)

Profit13,012

8,042

Profit attributable to
Owners of parent
Non-controlling interests

12,905
107

7,230
811

13,012

8,042

257.13–144.07–Gross profit
Selling, general and administrative expenses
Other income
Other expense
Operating profit
Finance income
Finance costs
Share of profit (loss) in investments accounted forusing the equity method
Profit before income taxes
Income tax expense

4

Fiscal year ended
March 31, 2015

ProfitEarnings per share(Attributable to owners of parent)
Basic earnings per share (Yen)
Diluted earnings per share (Yen)25
25(Note) The accompanying notes are an integral part of these financial statements.

443) Consolidated statement of comprehensive income(Millions of yen)
Note

Fiscal year ended
March 31, 2014

ProfitOther comprehensive income
Components that will not be reclassified to profit
or loss
Remeasurements of defined benefit plans

13,012

8,042

503

151

503

151

24

34

622

24

1,401

8,000

24

(14)

(7)

1,421

8,615

24

Total
Components that may be reclassified to profit orloss
Changes in fair value of available-for-salefinancial assets
Exchange differences of foreign operations
Share of other comprehensive income ofassociates accounted for using equity method

Fiscal year ended
March 31, 2015

Total
Total other comprehensive income

1,924

8,766

Comprehensive income

14,937

16,809Comprehensive income attributable to
Owners of parent
Non-controlling interests

15,053(116)

15,351
1,457

14,937

16,809Comprehensive income(Note) The accompanying notes are an integral part of these financial statements.

454) Consolidated statement of changes in equity
Equity attributable to owners of parent
Other components of equity
IssuedcapitalSharepremium

Retainedearnings

TreasurysharesExchangedifferencesof foreign
operations

Changes infair value ofavailablefor-salefinancialassetsMillionsof yenMillionsof yenMillionsof yenMillionsof yenMillions ofyenMillions of
yen

4,175
–
–

4,566
–
–

81,22812,905–(3,407)
–
–

–
–
1,630

3,945
–
34

–
–
–

–
–
–

12,905–(1,907)

–
(0)
–

1,630
–
–

34
–
–

–

350

–

–

–

–

–

–

483

–

–

–

Total transactions with theowners–350(1,423)(0)––Balance as of March 31, 2014
ProfitOther comprehensive income

4,175
–
–

4,916
–
–

92,7097,230–(3,407)
–
–

1,630
–
7,330

3,979
–
617

–
–
–

–
–
–

7,230
–
(2,007)

–
(0)
–

7,330
–
–

617
–
–

–

(4,916)(2,241)

–

–

–

–

–

172

–

–

–

Total transactions with theowners–(4,916)(4,076)(0)––Balance as of March 31, 2015

4,175

–

95,864(3,408)

8,960

4,597

Note

Balance as of April 1, 2013
ProfitOther comprehensive income
Total comprehensive income
Purchase of treasury shares
Dividends
Increase (decrease) throughchanges in interests
Transfer from other componentsof equity

Total comprehensive income
Purchase of treasury shares
Dividends
Increase (decrease) throughchanges in interests
Transfer from other componentsof equity

20
20

20
20

46

Equity attributable to owners of parent
Other components of equity
Remeasurements ofNote
definedbenefit plans

Total

Total

Noncontrollinginterests

Total equity

Millions ofyenMillions ofyenMillions ofyenMillions ofyenMillions of
yen

–
–
483

3,945
–
2,148

90,507
12,905
2,148

8,650
107
(223)

99,15813,012
1,924

483
–
–

2,148
–
–

15,053(0)(1,907)

(116)
–
(540)

14,937(0)(2,448)

–

–

350

(660)

(309)

(483)

(483)

–

–

–

Total transactions with theowners

(483)

(483)

(1,556)(1,201)(2,757)

Balance as of March 31, 2014
ProfitOther comprehensive income

–
–
172

5,610
–
8,120

104,004
7,230
8,120

7,332
811
645

111,337
8,042
8,766

172
–
–

8,120
–
–

15,351(0)(2,007)

1,457
–
(607)

16,809(0)(2,615)––(7,158)(2,051)(9,209)

(172)

(172)

–

–

–

Total transactions with theowners

(172)

(172)

(9,166)(2,659)(11,825)

Balance as of March 31, 2015–

13,558110,190

6,131

116,321

Balance as of April 1, 2013
ProfitOther comprehensive income
Total comprehensive income
Purchase of treasury shares
Dividends
Increase (decrease) throughchanges in interests
Transfer from other componentsof equity

Total comprehensive income
Purchase of treasury shares
Dividends
Increase (decrease) throughchanges in interests
Transfer from other componentsof equity

20
20

20
20

(Note) The accompanying notes are an integral part of these financial statements.

475) Consolidated statement of cash flows
Note

Fiscal year ended
March 31, 2014

Cash flows from (used in) operating activities
Profit before income taxes
Depreciation and amortization expense
Impairment loss
Finance income and finance costs
Share of loss (profit) in investments accounted forusing the equity method
Loss (gain) on sales and retirement of non-current
assets(Increase) decrease in inventories(Increase) decrease in trade and other receivables
Increase (decrease) in trade and other payables
Increase (decrease) in defined benefit liability
Other
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Income taxes refund and interest on refund
received
Net cash flows from (used in) operating activities
Cash flows from (used in) investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant andequipment
Purchase of intangible assets
Proceeds from sales of intangible assets
Payments of loans receivableCollection of loans receivable
Purchase of investments
Proceeds from sales of investments
Other
Net cash flows from (used in) investing activities
Cash flows from (used in) financing activities
Net increase (decrease) in short-term borrowings
Proceeds from long-term borrowings
Payments for acquisition of interests in
subsidiaries from non-controlling interests
Purchase of treasury shares
Cash dividends paid
Cash dividends paid to non-controllingshareholders
Net cash flows from (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Effect of exchange rate change on cash and cash
equivalents
Cash and cash equivalents at end of period

20

6

6

(Note) The accompanying notes are an integral part of these financial statements.

48(Millions of yen)
Fiscal year ended
March 31, 2015

16,871
7,956
–
(980)

12,104
10,307
987
(554)

101

163

(354)

153

(1,812)(3,196)
1,738
352(1,722)
18,954622(30)(5,538)(2,341)(1,143)(662)
529(2,149)17,394463(28)(4,827)

1,522–

15,53013,002(2,878)2,566(17,943)(2,049)2,330(18,896)

511

346(1,191)399(3,402)
4,039
(48)
323
(40)

(1,685)0(1,546)
1,812
(562)
–
(56)

(17,665)(20,308)

(98)
–

3,380
12,733(309)(9,367)(0)(1,907)(0)(2,006)

(540)

(633)

(2,856)(4,991)
23,571

4,106(3,199)19,046466

1,710

19,046

17,557

[Notes to consolidated financial statements]
1. Reporting entity
F.C.C. CO., LTD. (hereinafter the “Company”) is a public company incorporated under the laws ofJapan. The addresses of the registered headquarters and major business offices have been disclosed on
the website (http://www.fcc-net.co.jp/). The Company’s consolidated financial statements wereprepared with the end of the financial year on March 31, 2015 and consist of accounts of the Company
and its subsidiaries as well as interests in its associates (hereinafter the “Group”).
The Group is principally engaged in the sales and manufacture of motorcycle and automobile clutches.
2. Basis of preparation(1) Applicable accounting standards and first-time adoption
The consolidated financial statements of the Group have been prepared in accordance with IFRS as
pursuant to the provisions of Article 93 of the Ordinance on Terminology, Forms and Preparation
Methods of Consolidated Financial Statements (Ordinance of the Ministry of Finance No. 28 of 1976),
since all the requirements of a “Specified Company” set forth in Article 1-2 of this Ordinance havebeen fulfilled.
These consolidated financial statements were approved by the Board of Directors on June 23, 2015.
The Group first adopted IFRS for the fiscal year under review (from April 1, 2014 to March 31, 2015)
and the consolidated annual financial statements for the fiscal year under review are the Group’s first
consolidated financial statements prepared in accordance with IFRS. The date of transition to IFRS is
April 1, 2013. In the transition to IFRS, the Group applied IFRS 1 “First-time Adoption ofInternational Financial Reporting Standards” (hereinafter “IFRS 1”).
The impact of the transition to IFRS on financial position, operating results and cash flows is provided
in the note “31. First-time adoption.”(2) Basis of measurement
As described in the note “3. Significant accounting policies,” the consolidated financial statements of
the Group have been prepared on the basis of cost, except for certain financial instruments, etc. thatare measured at fair value.
(3) Functional currency and presentation currency
The consolidated financial statements of the Group are presented in Japanese yen, which is theCompany’s functional currency. All financial information presented is rounded down to the nearest
million yen.
(4) Accounting standards and interpretations that have been published but not yet applied.
The following accounting standards and interpretations were newly established or amended by theapproval date of the consolidated financial statements. The Group has not early applied thesestandards and interpretations.
The impact of application of these standards and interpretations is under consideration and cannot be
estimated at this point.
Mandatory
effective date(fiscal year
beginning on the
date)

IFRS

IFRS 9Financial
instruments

January 1, 2018

IFRS 15

Revenue fromcontracts withcustomers

January 1, 2017

Timing ofapplication by theGroup
Fiscal year
ending March 31,
2019
Fiscal year
ending March 31,
2018

49

Overview of the new standard oramendment
Amendment concerning classification,measurement and recognition offinancial instruments
Amendment concerning accounting
treatment for revenue recognition

January 1, 2016

Fiscal year
ending March 31,
2017

Clarification of the permissible
method for depreciation

IAS 19

Employeebenefits

July 1, 2014

Fiscal year
ending March 31,
2016

Clarification of accounting treatment
for defined benefit plans with
contributions from employees or third
parties

IAS 38Intangible assets

January 1, 2016

Fiscal year
ending March 31,
2017

Clarification of the permissible
method for amortization

IAS 16

Property, plantand equipment(5) Significant accounting estimates and judgments
In preparing IFRS-compliant consolidated financial statements, the management makes judgments,
estimates and assumptions that may affect the application of accounting policies and the reported
amounts of assets, liabilities, revenue and expenses. Because actual results may differ from theseestimates, such estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognized in the accounting period in which the estimate isrevised and future periods that are affected.
Of items for which the management made estimates and judgments, those that have significant effects
on the amounts recognized in the consolidated financial statements are as follows:
Note 5. Business combinations
Note 13. Impairment loss
Note 15. Income taxes
Note 18. Employee benefits
3. Significant accounting policies(1) Basis of consolidation
1) Subsidiaries
Subsidiaries are entities that are controlled by the Group. The Group is deemed to control an entity
when the Group has exposures or rights to variable returns arising from the Group’s involvement in
the investee and has an ability to affect those returns through power over the investee.
The acquisition date is the date when the Group obtained control, and the entity is consolidated fromthat date to the date when the Group loses the control.
If any accounting policies applied by a subsidiary differ from those applied by the Group,
adjustments are made to the subsidiary’s financial statements where needed.
The Group’s balances of payables and receivables and transactions as well as unrealized gains orlosses arising from intra-group transactions are offset in preparing the consolidated financial
statements. Comprehensive income of subsidiaries is attributable to owners of the parent and noncontrolling interests, even if the balance of non-controlling interests is negative.
Accounts of all subsidiaries that comprise the Group were reflected in the consolidated financial
statements with March 31 as the reporting date.
2) Associates
Associates are entities over which the Group has significant influence in terms of financial andmarketing policies but which the Group does not control or jointly control.
Investments in associates are recognized at cost at the time of acquisition and subsequently
accounted for using equity method.
(2) Business combinations
Business combinations are accounted for using the acquisition method. Considerations for acquisition
are measured as the total of fair values of assets transferred and liabilities assumed in exchange for the50

control over the acquired entity and equity financial instruments on the acquisition date. If theconsideration for acquisition exceeds fair values of identifiable assets and liabilities, the excess isrecorded as goodwill in the consolidated statement of financial position. If the consideration for
acquisition is less than those fair values, the shortfall is immediately recorded as revenue. Any change
in ownership interests in subsidiaries that does not result in a loss of control is accounted for as equity
transaction.
Adopting the exemption of IFRS 1, the Company has not applied IFRS 3 “Business combinations”
retrospectively to business combinations that were conducted prior to April 1, 2013 (date of transition
to IFRS). Goodwill arising from business combinations that were conducted prior to the date oftransition to IFRS was recorded at the carrying amount after performing an impairment test of theamount recognized under the previous accounting standards (Japanese GAAP) that was taken over asof the transition date.
(3) Foreign currency translation
1) Foreign currency transactions
Foreign currency transactions are translated into the functional currency of each entity in the Group
using the exchange rates at the date of the transactions. Monetary assets and liabilities denominatedin foreign currencies at the end of each fiscal year are translated into the functional currencies using
the exchange rates at that date.
Foreign exchange differences arising from the translation or settlement are recognized as profit orloss.
2) Financial statements of foreign operations
To prepare consolidated financial statements, assets and liabilities of the Group’s foreign subsidiaries,
etc. are translated into Japanese yen using exchange rates at the end of the fiscal year. Profit or loss
items are translated using the average exchange rate during the fiscal period, unless exchange rates
fluctuate significantly during that period. If there is any significant fluctuation in exchange rates, theexchange rate on the transaction date is used.
Exchange differences on translation are recognized as other comprehensive income in the
consolidated statement of comprehensive income and cumulative translation differences are included
in other components of equity in the consolidated statement of financial position.
Cumulative translation differences of a foreign operation are reclassified to profit or loss when theGroup loses control and significant influence over the foreign operation.
Adopting the exemption of IFRS 1, the Company has transferred all the cumulative translationdifferences as of the date of transition to IFRS to retained earnings.
(4) Financial instruments
1) Financial assets(i) Initial recognition and measurement
The Group recognizes financial assets when the Group becomes a relevant contracting party andclassifies the financial assets into “financial assets at fair value through profit or loss,” “held-tomaturity investments,” “loans and receivables” or “available-for-sale financial assets.” This
classification is determined at initial recognition according to the nature and purpose for theacquisition.
Financial assets are measured at fair value at the time of initial recognition, and transaction costs
that are directly attributable to the acquisition are added except for financial assets at fair value
through profit or loss.
(a) Financial assets at fair value through profit or loss
When financial assets are designated as financial assets held for trading or at fair value throughprofit or loss, these financial assets are classified as “financial assets at fair value through profit orloss.”

51

Financial assets classified as “financial assets at fair value through profit or loss” are measured atfair value and any related changes are recognized as profit or loss.
The Group holds no financial assets classified as “financial assets at fair value through profit orloss.”(b) Held-to-maturity investments
Non-derivative financial assets with fixed or determinable payments and fixed maturities that theGroup has clear intention and ability to hold to maturity are classified as “held-to-maturity
investments.”
Held-to-maturity investments are measured by deducting impairment loss from amortized costusing the effective interest method, and interest income calculated using the effective interest
method is recognized in profit or loss.
The Group holds no financial assets classified as “held-to-maturity investments.”(c) Loans and receivables
Non-derivative financial assets with fixed or determinable payments for which there is no quoted
price in active markets are classified as “loans and receivables.”Loans and receivables are measured by deducting impairment loss from amortized cost using theeffective interest method, and interest income calculated using the effective interest method isrecognized in profit or loss.
(d) Available-for-sale financial assets
Non-derivative financial assets that are designated as “available-for-sale financial assets” or notclassified as any of “financial assets at fair value through profit or loss,” “held-to-maturity
investments” and “loans and receivables” are classified as “available-for-sale financial assets.”
Available-for-sale financial assets are measured at fair value with changes in fair value recognizedas other comprehensive income.
Dividend income on available-for-sale financial assets is recognized as profit or loss. When an
available-for-sale financial asset is derecognized or impairment loss is recognized, cumulative
gains or losses that were recorded as other comprehensive income are reclassified to profit or loss.
(ii) Impairment of financial assets
For financial assets other than “financial assets at fair value through profit or loss,” the Groupconsiders in each period whether there is objective evidence of impairment. When objective
evidence for a financial asset indicates that a loss event arose after the initial recognition andnegative effects of the loss event on estimated future cash flows of the financial asset can bereasonably predicted, impairment loss is recognized.
Objective evidence indicating that a financial asset is impaired includes significant financial
difficulties of the issuer or debtor, default or delinquency in interest or principal payments, and ahigher probability of bankruptcy or financial reorganization of the debtor. For equity financial
instruments classified as “available-for-sale financial assets,” in cases where the fair value falls
below the cost significantly or over a long period of time, it is also deemed that there is objective
evidence of impairment.
When there is objective evidence of impairment for “loans and receivables” or “held-to-maturity
investments,” a difference between the carrying amount of the asset and the present value after
discounting estimated future cash flows at the initial effective interest rate is recognized as
impairment loss in profit or loss.
For loans and receivables, impairment loss is recognized using allowance for credit losses. Whensubsequently the receivables are considered uncollectible, the carrying amount is directly reduced
by offsetting it with allowance for credit losses. If any event that reduces impairment loss occurs
after recognition of impairment loss, reversal of impairment loss is recognized in profit or loss.
When there is objective evidence of impairment for “available-for-sale financial assets,”
cumulative losses that were recognized as other components of equity are reclassified to profit or52loss. If fair value of an equity financial instrument that was classified as “available-for-salefinancial assets” recovers after impairment, the amount of recovery is fully recognized as othercomprehensive income.
(iii) Derecognition of financial assets
If contractual rights to cash flows arising from a financial asset are extinguished, or if a financial
asset is transferred and substantially all risks and economic rewards relating to ownership of theasset are transferred, the financial asset is derecognized.
2) Financial liabilities
Financial liabilities are initially measured at fair value after the deduction of transaction costs, andsubsequently measured at amortized cost using the effective interest method.
When a financial liability is extinguished, that is, the debt is dismissed, cancelled or expired, theGroup derecognizes the financial liability.
3) Derivatives
As a general rule, the Group does not conduct derivative transactions.
(5) Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, demand deposits, and short-term investments withmaturities or repayment terms of three months or less from the date of acquisition that are readily
convertible to cash and subject to an insignificant risk of changes in value.
(6) Inventories
Inventories are measured at cost, or if lower, at net realizable value. Net realizable value is calculated
by deducting estimated costs and estimated costs to sell required up to the completion from theestimated selling price in the normal course of business. The cost is calculated principally based on
the progressive average inventory method and includes material costs, labor costs and manufacturing
expenses.
(7) Property, plant and equipment
The cost model is applied in measurement of property, plant and equipment. Property, plant andequipment are recorded at the value calculated as cost less any accumulated depreciation and any
accumulated impairment loss.
The cost of property, plant and equipment includes cost directly incidental to the acquisition of assets,
and the initial estimated costs of dismantling and removing the assets and restoration costs for theplaces where the assets were located. Depreciation of these assets is started when the assets become
available for use.
Maintenance costs arising on a daily basis for property, plant and equipment are recognized in profit
or loss when incurred.
Depreciation expense for assets except for land and construction in progress is recorded by thestraight-line method over the following estimated useful lives.
Buildings and structures

5 to 31 years

Machinery, equipment and vehicles

3 to 9 years

Tools, furniture and fixtures

2 to 6 years(8) Goodwill and intangible assets
1) Goodwill
Goodwill is recorded at the value calculated as cost less any accumulated impairment loss. Goodwill
is not amortized. As a result of impairment test performed each fiscal year, impairment loss isrecorded if necessary. Impairment loss of goodwill is recognized in the consolidated statement ofincome and not reversed subsequently.

532) Intangible assets
The cost model is applied in measurement of intangible assets. Intangible assets are recorded at thevalue calculated as cost less any accumulated amortization and any accumulated impairment loss.
(i) Properties for development
Expenditure incurred in development activities are capitalized only if it can be verified that all thefollowing conditions are met:
• Technical practicability of completing the intangible asset so that the asset can be used or sold
• The entity’s intention to complete the intangible asset and then use or sell the asset• Ability to use or sell the intangible asset• Highly probable method for the intangible asset to generate future economic benefits• Usability of appropriate technical, financial and other resources necessary to complete
development of the intangible asset and then use or sell the asset• Ability to reliably measure expenditure attributable to the intangible asset during thedevelopment period
The amount of initial recognition of properties for development is the total of expenses arising in
the period from the date when an intangible asset meets all the above recognition requirements forthe first time to the completion of development. Properties for development are amortized using thestraight-line method over a period in which funds spent for the development are expected to be
recovered. The amortization method and useful life are reviewed at the end of each fiscal year andrevised as needed.
(ii) Other intangible assets
Other intangible assets mainly consist of software. Software is amortized using the straight-line
method over its estimated useful life of five years from the time when it becomes usable. The
amortization method and useful life are reviewed at the end of each fiscal year and revised asneeded.
(9) Impairment
The Group assesses whether there is any indication of impairment at the end of each fiscal year for the
carrying amounts of non-financial assets except for inventories and deferred tax assets. If any such
indication exists, the recoverable amount of the asset is estimated. The recoverable amount of
goodwill is estimated at the same time in each fiscal period.
The recoverable amount of an asset or a cash-generating unit is the higher of its value in use or its fairvalue less costs to sell. In calculation of value in use, estimated future cash flows are discounted to thepresent value using the pretax discount rate that reflects time value of money and risks inherent to theasset. Assets that are not individually tested for impairment are integrated in the smallest cashgenerating unit that generates cash inflow substantially independent of cash inflow of other assets orasset groups through continued use. Impairment loss is recognized in profit or loss when the carrying
amount of the asset or cash-generating unit exceeds the estimated recoverable amount.
For previously recognized impairment loss, the Group assesses whether there is any indication of adecrease or disappearance of the loss at each end of fiscal year.
For assets or cash-generating units for which there is any indication of reversal of impairment loss, therecoverable amount is estimated, and the impairment loss is reversed if the recoverable amountexceeds the carrying amount. Reversal of impairment loss is recognized in profit or loss to the extent
that the carrying amount assuming that impairment loss recognized for the asset in the past period had
not existed is not exceeded. Impairment loss relating to goodwill is not reversed.
(10) Employment benefits
1) Defined benefit plans
For defined-benefit retirement benefit plans, the net amount of the present value of defined benefit
obligations and the fair value of plan assets is recognized as liabilities or assets. The present value of54

defined benefit obligations and related service costs are, as a general rule, calculated using the
projected unit credit method. The discount rate used to the present value of defined benefit
obligations is, as a general rule, determined by reference to the market yield on high quality
corporate bonds as of the end of the fiscal year.
The Group recognizes remeasurements arising from defined-benefit retirement benefit plans as othercomprehensive income and immediately transfers the amounts to retained earnings.
2) Defined contribution plans
Expenses for defined-contribution retirement benefits are recognized as current expenses at theamount of contributions required.
3) Multi-employer plans
Multi-employer plans, for which the amount of plan assets corresponding to the entity’s own
contributions cannot be calculated reasonably, are accounted for in the same manner as defined
contribution plans.
4) Short-term employee benefits
Short-term employee benefits are expensed when an employee renders the related service.
Bonus accrual and paid absences are recognized as liabilities when the Group has legal orconstructive obligations to pay them and when a reliable estimate of the amount of obligations canbe made.
(11) Provisions
When there are present legal or constructive obligations as a result of past events, it is highly probablethat outflows of resources with economic benefits will be required to settle the obligations, andreliable estimates can be made of the amount of obligations, provisions are recognized by estimating
expenditure necessary to settle the present obligations taking into account uncertainties related to the
obligations at the end of the fiscal year.
If the time value of money for provisions is significant, the provisions are measured at discounted
present value.
(12) Revenue
The Group is principally engaged in the sales and manufacture of motorcycle and automobile clutches.
Revenue from the sales of these goods is recognized when the significant risks and economic value
incidental to ownership of the goods have been transferred to the buyer, the Group retains neither
continuing involvement nor effective control over the goods, it is probable that the future economic
benefits will flow to the Group, and such benefits and the corresponding cost can be measured reliably.
Normally, revenue is recognized at the time of delivery of goods.
Revenue is measured at fair value of the consideration received or receivable net of discounts, rebates
and consumption taxes, etc.
(13) Government grants
Government grants are measured at fair value and recognized when there is reasonable assurance that
the Group will comply with the conditions attached to the grants and that the grants will be received.
Grants for expenses incurred are recorded as revenue in the fiscal year during which the expenses
occurred. Grants for the acquisition of an asset are recorded as other income regularly over the usefullife of the asset, and unearned grant income is recorded as deferred income in liabilities.
(14) Finance income and finance costs
Finance income principally consists of interest income, dividend income, gains on sales of financial
assets and foreign exchange gains.
Interest income is recognized using the effective interest method when the income arises. Dividend
income is recognized when the Group’s right to receive the income is established.
Finance costs principally consist of interest expense, losses on sales of financial assets and foreignexchange losses. Interest expense is recognized using the effective interest method when incurred.
55

(15) Income taxes
Income taxes consist of current taxes and deferred taxes. These taxes are recognized in profit or loss,
except for those related to business combinations and items recognized directly in equity or othercomprehensive income.
Current taxes are measured at the amount of expected tax payment to or expected tax refund from tax
authorities. The amount of taxes is computed in accordance with tax rates and tax laws that are ineffect or substantially in effect by the end of the fiscal year in countries where the Group conducts
business activities and earns taxable profits or losses.
Deferred taxes are recognized for temporary differences between accounting carrying amounts ofassets and liabilities and amounts of them for tax purposes, unused tax losses and unused tax credits.
Deferred tax assets are recognized for deductible temporary differences to the extent that it is highly
probable that taxable profits will be available against which the deductible temporary differences
could be utilized. Deferred tax liabilities are recognized for taxable temporary differences.
The carrying amount of deferred tax assets is reviewed in every period, and reduced by the amount ofdeferred tax assets for which taxable profit sufficient to use all or part of the deferred tax assets areunlikely to be earned. Unrecognized deferred tax assets are reassessed in every fiscal period andrecognized to the extent that it is highly probable that deferred tax assets are realizable with futuretaxable profit.
Deferred tax assets and liabilities are not recorded for the following temporary differences:• Temporary differences arising from initial recognition of goodwill• Temporary differences arising from initial recognition of assets and liabilities which occur throughtransactions that affect neither accounting profit nor taxable profit for tax purposes, except forbusiness combinations• In cases where, for taxable temporary differences associated with investments in subsidiaries andassociates, timing of reversal can be controlled and it is highly probable that such temporary
differences are not reversed in a foreseeable period
Deferred tax assets and liabilities are measured in accordance with tax rates and tax laws expected tobe applied in the period in which the assets are realized or the liabilities are settled based on tax rates
and tax laws that are in effect or substantially in effect at the end of the fiscal year.
Deferred tax assets and liabilities are offset if the Group has a legally enforceable right to offset
current tax assets against current tax liabilities, and they are related to income taxes levied by thesame taxation authority on the same taxable entity.
(16) Earnings per share (attributable to owners of parent)
Basic earnings per share are calculated by dividing profit or loss for the year attributable to ordinary
equity holders of the parent, by the weighted average number of ordinary shares issued during theperiod that is adjusted by the number of treasury shares. Diluted earnings per share are not calculated
because there are no potential ordinary shares with dilutive effects.
(17) Shareholders’ equity
1) Ordinary shares
Ordinary shares issued by the Company are recorded at the issuance value in issued capital and sharepremium.
2) Treasury shares
When treasury shares are acquired, the consideration paid is recognized as deduction from equity.
When treasury shares are sold, the difference between the carrying amount and consideration at thetime of the sale is recognized as share premium.

56

4. Segment information(1) Overview of reportable segments
The Group’s reportable segments are components of the Group for which discrete financial
information is available, and whose operating results are regularly reviewed by the Board of Directors
to make decisions about managerial resources to be allocated to the segments and assess theirperformances. In the Group, principally the Head of business operation of motorcycles business andthe Head of business operation of automobiles business develop domestic and overseas
comprehensive strategies and build businesses for the motorcycle clutches business and theautomobile clutches business, respectively. Thus the Group has two reportable segments: “motorcycle
clutches” and “automobile clutches.” The motorcycle clutches segment manufactures clutches formotor cycles, scooters and ATVs and other products, while the automobile clutches segment
manufactures clutches for manual and automatic transmission automobiles and other products.

57

(2) Revenue and performance for reportable segments
Fiscal year ended March 31, 2014
Reportable segments
Motorcycle
clutches

Automobile
clutches

Total

Adjustments

Consolidated

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Millions of yen

77,869–67,564–145,433–––

145,433–

77,86967,564145,433–

145,433(3,797)(4,159)(7,956)–(7,956)(64,586)(58,377)(122,964)–(122,964)

9,485

5,026

14,512–

14,512

Revenue
External revenue
Intersegment revenue
Total
Depreciation and amortization
expenseOther profit (loss)
Operating profit
Finance income
Finance costs
Share of profit (loss) in investments
accounted for using the equity method

2,502
(42)

Profit before income taxes

16,871(101)

Fiscal year ended March 31, 2015
Reportable segments

Revenue
External revenue
Intersegment revenue
Total
Depreciation and amortization
expenseOther profit (loss)
Operating profit

Motorcycle
clutches

Automobile
clutches

Total

Adjustments

Consolidated

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Millions of yen

82,961–

71,434–

154,395–––

154,395–

82,961

71,434

154,395–

154,395(4,172)(6,134)(10,307)–(10,307)(69,631)(65,710)(135,342)–(135,342)

9,157

(411)

8,746

–

8,746

Finance income
Finance costs
Share of profit (loss) in investments
accounted for using the equity method

3,569
(47)

Profit before income taxes

12,104(163)

Note: Other profit (loss) for automobile clutches includes ¥987 million of impairment loss.

58

(3) Geographic information
The regional breakdown of revenue and non-current assets is as follows:
Revenue from external customers
Fiscal year ended March 31, 2014

Fiscal year ended March 31, 2015

Millions of yen

Millions of yen

Japan
U.S.
Indonesia
India
Other
Total

23,88845,82623,057
15,34537,315

19,78654,03922,253
18,68339,633

145,433

154,395

Notes: 1. Revenue is classified by country based on the location of customers.
2. Major countries belonging to “Other” category are Thailand, China, Brazil and Vietnam.

Non-current assets
As ofApril 1, 2013
(Transition date)

As ofMarch 31, 2014

As ofMarch 31, 2015

Millions of yen

Millions of yen

Millions of yen

Japan
U.S.
China
Other
Total

18,454
12,647
7,720
11,835

18,777
24,1297,037
14,295

20,38032,6197,360
19,38850,65864,24079,748Notes: 1. Non-current assets are classified based on the location of assets and do not include financial assets, deferred tax
assets and defined benefit assets.
2. Main countries belonging to “Other” category are Indonesia, Thailand, India and Vietnam.

(4) Information about major customers
Counterparties of which revenue accounts for 10% or more of revenue of the entire Group

Honda Motor Co., Ltd. and its group
Ford and its group

Related segment

Fiscal year ended
March 31, 2014

Fiscal year ended
March 31, 2015

Millions of yen

Millions of yen

Millions of yen

Motorcycle clutches
Automobile clutches
Automobile clutches

59

40,34349,34913,12842,53942,60017,1005. Business combinations
Fiscal year ended March 31, 2014
Not applicable
Fiscal year ended March 31, 2015
(1) Summary of business combinations
Due to the additional acquisition of 50% of shares in FCC RICO LTD. (currently FCC INDIA
MANUFACTURING PRIVATE LTD.), a consolidated subsidiary of the Company, the Group has
held 100% of shares in this company. The purpose of this acquisition is to strengthen the Group’sbusiness foundation in the Indian market as well as to further increase business efficiency andenhance and speed up the management system. At the end of the fiscal year under review, sharepremium and retained earnings decreased by ¥4,916 million and ¥2,268 million, respectively.

6. Cash and cash equivalents
As ofApril 1, 2013
(Transition date)

As ofMarch 31, 2014

As ofMarch 31, 2015

Millions of yen

Millions of yen

Millions of yen

Cash and cash equivalents

23,571

19,046

17,557

Note: Cash and cash equivalents recorded in the consolidated statement of financial position are equal to cash and cash
equivalents recorded in the consolidated statement of cash flows.

7. Trade and other receivables
Breakdown of trade and other receivables
As ofApril 1, 2013
(Transition date)

As ofMarch 31, 2014

As ofMarch 31, 2015

Millions of yen

Millions of yen

Millions of yen

Notes and accounts receivable - trade
Accounts receivable - other
Allowance for credit losses
Total

18,273770(8)21,1581,532(15)

23,4952,547(17)19,03522,67526,024

Note: Information on management of credit risk and liquidity risk to “notes and accounts receivable – trade” is provided in
the note “26. Financial instruments.”60

8. Other financial assets and other financial liabilities
Breakdown of other financial assets
As ofApril 1, 2013
(Transition date)

As ofMarch 31, 2014

As ofMarch 31, 2015

Millions of yen

Millions of yen

Millions of yen

Other current financial assets
Loans and receivables

1,816

1,458

1,190

Other non-current financial assets
Loans and receivables
Allowance for credit losses
Available-for-sale financial assets

1,477
(45)
7,532

1,442
(41)
7,600

1,436
(54)
8,794

8,964

9,001

10,175

As ofApril 1, 2013
(Transition date)

As ofMarch 31, 2014

As ofMarch 31, 2015

Millions of yen

Millions of yen

Millions of yen

Total

Breakdown of other financial liabilities

Other non-current financial liabilities
Financial liabilities measured at amortized
cost

99

26

26

As of
April 1, 2013
(Transition date)

As ofMarch 31, 2014

As ofMarch 31, 2015

Millions of yen

Millions of yen

Millions of yen

9. Inventories
Breakdown of inventories

Finished goods
Work in process
Raw materials and supplies

2,076
2,903
10,535

2,549
3,249
11,8303,734
4,170
13,167

Total

15,515

17,62921,073

The amounts of write-down of inventories recognized as expenses and inventories recognized as
expenses
Fiscal year ended
March 31, 2014

Fiscal year ended
March 31, 2015

Millions of yen

Millions of yen

Amount of write-down
Amount of inventories

552
119,31161

835
131,018

10. Other assets and liabilities
Breakdown of other assets
As ofApril 1, 2013
(Transition date)

As ofMarch 31, 2014

As ofMarch 31, 2015

Millions of yen

Millions of yen

Millions of yen

Other current assets
Accrued income taxes
Prepaid expenses
Suspense payments
Other

571
478
203
774

859
542
69
663

2,778
1,206
163
451

2,028

2,135

4,599

497
46
–

455
22
103

506
26
207

544

581

740

As of
April 1, 2013
(Transition date)

As ofMarch 31, 2014

As ofMarch 31, 2015

Millions of yen

Millions of yen

Millions of yen

Total
Other non-current assets
Land use rights
Long-term prepaid expenses
Other
Total

Breakdown of other liabilities

Other current liabilities
Accruals
Accrued bonuses
Other

1,907
1,427
1,326

2,094
1,536
891

2,486
1,613
1,267

Total

4,661

4,522

5,368

Other non-current liabilities
Deferred income
Other

206
33

198
45

188
39

Total

239

244

227

62

11. Property, plant and equipment
Changes in cost and accumulated depreciation and impairment loss of property, plant and equipment,
and carrying amount thereof(1) Cost

Balance as of April 1,
2013
Acquisition
Disposal
Transfer of line items
Exchange differences ontranslation
Other

Buildings
andstructures

Machinery,equipment
and vehicles

Tools,
furniture andfixtures

Land

Constructionin progress

Total

Millions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyen

27,181

72,132

12,021

7,465

6,871

125,671

985
(860)
829

3,022
(1,888)
9,139

1,043
(634)
197

218
(80)
–

15,834(790)(10,166)

21,104(4,254)
–

647

2,216

166

(3)

442

3,469

–

–

–

–

(394)

(394)

March 31, 2014
Acquisition
Disposal
Transfer of line items
Exchange differences ontranslation
Other

28,783
6,738
(120)
222

84,622
3,680(2,673)
10,844

12,794
947
(488)
897

7,599
1
(1)
–

11,796
10,508(1,748)(11,964)

145,597
21,876(5,031)
–

1,979

8,300

761

194

1,761

12,997

–

–

–

–

(379)

(379)

March 31, 2015

37,603

104,775

14,912

7,794

9,974

175,060(2) Accumulated depreciation and impairment loss
Buildings
andstructures

Machinery,equipment
and vehicles

Tools,
furniture andfixtures

Land

Constructionin progress

Total

Millions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyen

April 1, 2013
Depreciation expense
DisposalExchange differences ontranslation

13,6901,054(522)

53,805
5,219(1,779)10,247
1,012
(504)

–
–
–

–
–
–

77,7427,286(2,807)

134

1,997

187

–

–

2,318

March 31, 2014
Depreciation expense
Impairment loss
DisposalExchange differences ontranslation

14,356
1,635
–
(81)

59,241
6,843–(2,406)

10,942
1,177
–
(489)

–
–
987
–

–
–
–
–

84,5409,656
987(2,976)

671

5,866

847

–

–

7,385

March 31, 2015

16,58369,544

12,477987–

99,59363

(3) Carrying amounts

Balance as of April 1,
2013
Balance as of March 31,
2014
Balance as of March 31,
2015

Buildings
andstructures

Machinery,equipment
and vehicles

Tools,
furniture andfixtures

Land

Constructionin progress

Total

Millions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyen

13,491

18,327

1,774

7,465

6,871

47,92814,42625,381

1,852

7,599

11,796

61,05621,01935,230

2,435

6,806

9,974

75,467

Notes: 1. Depreciation expense of property, plant and equipment is recorded in “cost of sales” and “selling, general andadministrative expenses” in the consolidated statement of income.
2. Information on commitments related to purchase of property, plant and equipment is provided in the note “29.
Commitments.”6412. Goodwill and intangible assets
Changes in cost and accumulated amortization and impairment loss of goodwill and intangible assets,
and carrying amount thereof(1) Cost
Intangible assets
Goodwill
Millions of yen

SoftwareProperties fordevelopment

Total

Millions of yen

Millions of yen

Millions of yen

April 1, 2013
Acquisition
Increase due to internal
development
DisposalExchange differences ontranslation
Other

756
–

501
711

2,519
–

3,777
711

–

–

482

482

–

–

(620)

(620)

–

0

–

0

–

(2)

–

(2)

March 31, 2014
Acquisition
Increase due to internal
development
DisposalExchange differences ontranslation
Other

756
–

1,208
676

2,381
–

4,347
676

–

–

1,011

1,011

–

–

(625)

(625)

–

22

–

22

–

(1)

–

(1)

March 31, 2015

756

1,906

2,767

5,431

(2) Accumulated amortization
Intangible assets
Goodwill

SoftwareMillions of yen

April 1, 2013
Amortization expense
DisposalExchange differences ontranslation
March 31, 2014
Amortization expense
DisposalExchange differences ontranslation
March 31, 2015

Millions of yen

Properties fordevelopment

Total

Millions of yen

Millions of yen

–
–
–

314
51
–

1,278
618
(620)

1,593
670
(620)

–

–

–

–

–
–
–

365
61
–

1,276
589
(625)

1,642
651
(625)

–

15

–

15

–

443

1,240

1,683

(3) Carrying amounts
Intangible assets
Goodwill
Millions of yen

April 1, 2013
March 31, 2014
March 31, 2015

SoftwareProperties fordevelopment

Total

Millions of yen

Millions of yen

Millions of yen

756
756
756

186
842
1,463

65

1,241
1,105
1,527

2,184
2,705
3,748

Notes: 1. Amortization expense of software is recorded in in “cost of sales” and “selling, general and administrative
expenses” in the consolidated statement of income, while amortization expense of properties for development isrecorded in “cost of sales.”
2. Information on commitments related to purchase of intangible assets is provided in the note “29. Commitments.”

13. Impairment loss
(1) Breakdown of assets for which impairment loss is recognized by type
Fiscal year ended
March 31, 2014

Fiscal year ended
March 31, 2015

Millions of yen

Millions of yen

Land (Ryuyo Factory)
Total property, plant and equipment

–

987

–

987

Note: The impairment loss is included in “other expense” in the consolidated statement of income.

(2) Cash-generating unit
The Group groups assets based on the smallest unit of asset groups identifiable as a unit generating
cash inflow that is substantially independent of cash inflow of other assets or asset groups, bycompany and type of business. Idle assets that are not expected to be used in the future are determinedby individual asset unit.
(3) Impairment loss of assets to be sold and retired and idle assets
The Group has reorganized domestic business units to increase production efficiency and for risk
management, in the wake of the Great East Japan Earthquake.
As a result, due to transfer of the major manufacturing process to other production bases, land for
Ryuyo Factory was reduced to the recoverable amount and the amount of reduction was recorded as
impairment loss (¥987 million) in other expense.
The recoverable amount was measured at fair value and assessed by deducting costs of disposal fromthe appraisal value of real estate.

14. Investments accounted for using the equity method
Summary of financial information aggregating accounts of associates accounted for using the equity
methodAs ofApril 1, 2013
(Transition date)

As ofMarch 31, 2014

As ofMarch 31, 2015

Millions of yen

Millions of yen

Millions of yen

Total carrying amount

774

692

Fiscal year ended
March 31, 2014

604
Fiscal year ended
March 31, 2015

Millions of yen

Millions of yen

ProfitOther comprehensive income

(101)
(14)

(163)
(7)

Comprehensive income

(116)

(171)

Note: There is no associate that has quoted market prices of its shares.

6615. Income taxes(1) Deferred tax assets and liabilities
Breakdown of and changes in deferred tax assets and deferred tax liabilities by major cause
Fiscal year ended March 31, 2014
April 1,2013

Recognizedthrough
profit orloss

Recognizedin othercomprehensive income

Recognizeddirectly inequityOther

March 31,
2014

Millions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyen

Deferred tax assets
Inventories
Accrued bonuses
Accruals
Non-current assets
Defined benefit liability
Other

506
444
203
1,600
399
492

69
(11)
21
465
(202)
(39)

–
–
–
–
(213)
–

–
–
–
–
–
–

13
–
7
–
28
31

589
433
232
2,066
11
484

Total

3,647

302

(213)

–

81

3,817

(2,525)

(255)

–

–

(330)

(3,111)(2,241)

–

44

–

–

(2,197)

(93)

(75)

–

–

1

(166)

(4,860)

(330)

44

–

(328)

(5,475)

April 1,
2014

Recognizedthrough
profit orloss

Recognizedin othercomprehensive income

Recognizeddirectly inequityOther

March 31,
2015

Millions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyen

Deferred tax assets
Inventories
Accrued bonuses
Accruals
Non-current assets
Defined benefit liability
Other

589
433
232
2,066
11
484

194
(33)
(18)
355
289
(170)

–
–
–
–
(60)
–

–
–
–
–
–
–

(13)
–
–
9
13
67

770
400
215
2,431
253
380

Total

3,817

618

(60)

–

77

4,451

(3,111)(1,491)

–

–

(449)

(5,052)(2,197)

–

55

–

–

(2,141)

Deferred tax liabilities
Non-current assets
Available-for-salefinancial assets
Other
Total

Fiscal year ended March 31, 2015

Deferred tax liabilities
Non-current assets
Available-for-salefinancial assets
Other
Total

(166)

(178)

–

–

(22)

(368)

(5,475)(1,670)

55

–

(471)

(7,562)

67

The amounts of unused tax losses and deductible temporary differences for which deferred tax assets
have not been recognized are as follows:
As ofApril 1, 2013
(Transition date)

As ofMarch 31, 2014

As ofMarch 31, 2015

Millions of yen

Millions of yen

Millions of yen

Unused tax losses
Deductible temporary differences
Total

–
256

22
303

1,348
574

256

325

1,922

Expiration of unused tax losses for which deferred tax assets have not been recognized is as follows:
As ofApril 1, 2013
(Transition date)

As ofMarch 31, 2014

As ofMarch 31, 2015

Millions of yen

Millions of yen

Millions of yen

1st year
2nd year
3rd year
4th year
5th year and onward
Total

–
–
–
–
–

–
–
–
–
22

–
–
–
–
1,348

–

22

1,348

The total amount of taxable temporary differences associated with investments in subsidiaries, etc. forwhich deferred tax liabilities have not been recognized were ¥54,040 million as of the transition date,¥55,697 as of March 31, 2014 and ¥56,979 million as of March 31, 2015. For these taxable
differences, deferred tax liabilities have not been recognized since the Group may control timing of
their reversal and there is high possibility that the temporary differences will not be reversed within aforeseeable period.
(2) Breakdown of income tax expense
Fiscal year ended
March 31, 2014

Fiscal year ended
March 31, 2015

Millions of yen

Millions of yen

Current tax expense
Deferred tax expense
Total

3,830
27

3,009
1,052

3,858

4,061

Note: Current tax expense for the previous fiscal year includes refund of income taxes due to reassessment based on theagreement under the mutual agreement procedure regarding the transfer pricing taxation (¥1,340 million).

68

(3) Factors of differences between the effective statutory tax rate and the effective tax rate
Fiscal year ended
March 31, 2014

Fiscal year ended
March 31, 2015%%

Effective statutory tax rate
Non-deductible expenses in calculation of
taxable profits
Unrecognized deferred tax assets
Tax credits
Difference from the applicable tax rate ofoverseas subsidiaries
Refund of income taxes
Other

37.2

34.8

0.7

1.9

1.8
(2.1)

4.8
(2.0)

(7.3)

(6.5)

(7.4)
0.0

–
0.6

Effective tax rate

22.9

33.6

Note: Adjustment of the amount of deferred tax assets and deferred tax liabilities due to a change of income tax rate
The “Act for Partial Revision of the Income Tax Act, etc.” (Act No. 9 of 2015) and the “Act for Partial Revision of
the Local Tax Act, etc.” (Act No. 2 of 2015) were promulgated on March 31, 2015, and income tax rates, etc. are to
be lowered from fiscal years beginning on or after April 1, 2015. In line with this, the effective statutory tax rate used
for the calculation of deferred tax assets and liabilities was changed from the previously used rate at 34.83% to32.34% for temporary differences expected to be reversed in the fiscal year beginning on April 1, 2015 and to 31.57%
for temporary differences expected to be reversed in the fiscal year beginning on April 1, 2016.
Due to this change in the tax rate, the amount of deferred tax assets (the amount after deducting the amount ofdeferred tax liabilities) increased by ¥123 million, income tax expense increased by ¥65 million, and changes in fairvalue of available-for-sale financial assets increased by ¥188 million.

16. Borrowings
Breakdown of borrowings
As ofApril 1, 2013
(Transition date)

As ofMarch 31, 2014

As ofMarch 31, 2015

Averageinterest
rate

Millions of yen

Millions of yen

Millions of yen

%

90

–

3,604

0.80

–

–

–

667

0.30

–

90

–

4,271

Long-term borrowings––

12,1390.67

May 2016
to March
2019

Total

–

–

12,139Current
Financial liabilities measured
at amortized cost
Current borrowings
Current portion of longterm borrowings
Total

Due

Non-current
Financial liabilities measured
at amortized cost

Notes: 1. “Average interest rate” shows weighted average interest rate on the balance as of March 31, 2015.
2. “Due” shows the repayment due for the balance as of March 31, 2015.
3. For the breakdown of the balance of borrowings by due date, refer to the note “26. Financial instruments, (3)Financial risk management, 2) Liquidity risk management.”6917. Trade and other payables
Breakdown of trade and other payables
As ofApril 1, 2013
(Transition date)

As ofMarch 31, 2014

As ofMarch 31, 2015

Millions of yen

Millions of yen

Millions of yen

Notes and accounts payable - trade
Factoring payables
Accounts payable - other
Total

8,479
2,003
1,832

9,567
2,583
2,749

11,1382,170
1,794

12,315

14,90015,103

18. Employee benefits
To provide for retirement benefits of employees, the Group has adopted funded and unfunded defined
benefit plans and defined contribution plans and has joined Nihon Jidosha Buhin Kogyo Kosei Nenkin
Kikin, which is a multi-employer corporate pension fund.
(1) Defined benefit plans
Under defined benefit plans, a lump-sum benefit or pension is granted based on salaries and periodsof service.
1) Amounts recognized in the consolidated statement of financial position
The year-end balances of defined benefit obligations and plan assets, and defined benefit
liabilities and defined benefit assets recognized in consolidated statement of financial position
As ofApril 1, 2013
(Transition date)

As ofMarch 31, 2014

As ofMarch 31, 2015

Millions of yen

Millions of yen

Millions of yen

Funded defined benefit obligations
Plan assets

6,539(5,522)

6,921(6,362)

7,515(7,056)

Subtotal
Unfunded defined benefit obligations

1,016
715

558
586

459
819

Net amount of liabilities and assets recognizedin consolidated statement of financial position

1,732

1,144

1,278

Defined benefit liability
Defined benefit asset

1,732
–

1,248
(103)

1,486
(207)

Net amount of liabilities and assets recognizedin consolidated statement of financial position

1,732

1,144

1,278

Note: Defined benefit assets are included in “other non-current assets” in the consolidated statement of financial position.

2) Amounts recognized as retirement benefit expenses
Fiscal year ended
March 31, 2014

Fiscal year ended
March 31, 2015

Millions of yen

Millions of yen

Retirement benefit expenses for defined benefit
plans

754

70

703

3) Reconciliation of defined benefit obligations
Fiscal year ended
March 31, 2014

Fiscal year ended
March 31, 2015

Millions of yen

Millions of yen

Defined benefit obligations at beginning of
periodService cost
Interest costRemeasurement
Past service cost
Retirement benefits paid
Exchange differences on translation
Defined benefit obligations at end of period

7,254

7,507

721
104
(271)
11
(275)
(37)

663
123
486
–
(478)
32

7,507

8,334

Note: The weighted average duration of defined benefit obligations was 13.8 years as of March 31, 2014 and 13.6 years asof March 31, 2015.

4) Reconciliation of plan assets
Fiscal year ended
March 31, 2014

Fiscal year ended
March 31, 2015

Millions of yen

Millions of yen

Plan assets at beginning of period
Interest income
Remeasurement
Contributions by the employer
Retirement benefits paid
Exchange differences on translation

5,522
71
441
469
(141)
0

6,362
83
535
345
(290)
18

Plan assets at end of period

6,362

7,056

5) Composition of plan assets
As ofApril 1, 2013
(Transition date)

As ofMarch 31, 2014

As ofMarch 31, 2015

Millions of yen

Millions of yen

Millions of yen

Debentures
Shares
Other

2,467
2,122
932

2,663
2,720
979

3,378
1,934
1,743

5,522

6,362

7,056

As of
April 1, 2013
(Transition date)

As ofMarch 31, 2014

As ofMarch 31, 2015

%

%

%

1.1
3.3 to 8.3

1.2
4.7 to 9.0

0.8
4.0 to 9.0

Total6) Major actuarial assumptions

Discount rate (Japan)
Discount rate (Overseas)7) Sensitivity analysis
The impact of 0.5% changes in the key actuarial assumption on defined benefit obligations is asfollows:

71

As ofMarch 31, 2014

As ofMarch 31, 2015

Millions of yen

Millions of yen

0.5% increase in the discount rate
0.5% decrease in the discount rate

(486)
534

(516)
577

Note: The sensitivity analysis is calculated in a manner that keeps assumptions other than variable factors constant and does
not take into account interdependencies between the assumptions.

(2) Defined contribution plans
Amounts recognized as expenses for defined contribution plans
Fiscal year ended
March 31, 2014

Fiscal year ended
March 31, 2015

Millions of yen

Amount recorded as expenses

Millions of yen

104

178

(3) Multi-employer plan
To the multi-employer plan, the amount calculated by multiplying salaries in the period employees
rendered services by a constant rate is contributed and contributions during the fiscal period arerecognized as retirement benefit expenses in profit or loss.
The total amount of expenses recognized for the employees’ pension fund that is a multi-employer
plan, which is accounted for in the same manner as defined contribution plans, was ¥490 million in
the previous fiscal year and ¥493 million in the fiscal year under review.
1) Latest funding position of multi-employer plan
As of March 31, 2012

As of April 30, 2013

As of March 31, 2014

Millions of yen

Millions of yen

Millions of yen

Plan assets
Total of actuarial obligations for the purpose ofpension financing calculation and minimum
liability reserve
Difference

140,010

172,882

176,930

164,426

188,621

189,167(24,416)(15,738)(12,237)

2) Proportion of contributions by the Group to total contributions of the multi-employer plan
As of March 31, 2012

As of April 30, 2013

As of March 31, 2014

%

%

%

Proportion of contributions by the Group

4.6

72

6.1

5.9

19. Provisions
Breakdown of and changes in provisions
Asset retirement
obligations
Millions of yen

April 1, 2013
Interest expense during the period in
discounting
Decrease during the period (intended use)
Decrease during the period (reversal)

41

March 31, 2014
Interest expense during the period in
discounting
Decrease during the period (intended use)
Decrease during the period (reversal)

41

March 31, 2015

36

0
–
–
0
(5)
–

Note: To prepare for removal of toxic substances related to buildings, the Group recognizes and measures the provision by
estimating asset retirement obligations based on the period in which the building is expected to be used in light ofuseful lives of fixtures inside the building and other factors, taking into account the status of each property
individually and specifically. The payment is made in a period after one year or more passed from the end of eachfiscal year.

20. Equity and other equity items(1) Equity and share premium
Breakdown of changes in number of shares authorized, number of shares issued, issued capital andshare premium
Number of sharesauthorized

Number of sharesissuedIssued capital

Share premium

SharesSharesMillions of yen

Millions of yen

90,000,000

52,644,030

4,175

4,566

–

–

–

350

As of March 31, 2014
Change during the period(Note 2)90,000,000

52,644,030

4,175

4,916

–

–

–

(4,916)

As of March 31, 2015

90,000,000

52,644,030

4,175

–

As of April 1, 2013
(Transition date)
Change during the period

Notes: 1. All shares issued by the Company are ordinary shares with no rights limitations and without par value. Issued
shares are fully paid up.
2. As a result of the acquisition of shares in FCC RICO LTD. (currently FCC INDIA MANUFACTURING
PRIVATE LTD.), etc., share premium decreased by ¥4,916 million.

(2) Retained earnings
Retained earnings consist of earned reserve and unappropriated retained surplus. Retained earnings
include the amount of remeasurements of defined benefit plans recognized in other comprehensive
income when the amount arose and immediately transferred to retained earnings, and cumulativetranslation differences of foreign operations as of the date of transition to IFRS.

73

(3) Treasury shares
Changes in the number and the amount of treasury shares are as follows:
Number of shares

AmountSharesMillions of yen

As of April 1, 2013
(Transition date)
Change during the period

2,455,138

3,407

84

0

As of March 31, 2014
Change during the period

2,455,222
178

3,407
0

As of March 31, 2015

2,455,400

3,408

Note: Changes during the period are due to purchase of shares less than one unit.

(4) Dividends• Amount of dividends paid
Fiscal year ended March 31, 2014
Resolution dateJune 24, 2013
Annual General Meetingof Shareholders
October 28, 2013
Board of Directors
meeting

Total amount ofdividends

Dividends per share

Millions of yen

Yen

Record date

Effective date

903

18.00

March 31, 2013

June 25, 2013

1,003

20.00

September 30, 2013

November 26, 2013

Record date

Effective dateFiscal year ended March 31, 2015
Resolution dateJune 24, 2014
Annual General Meetingof Shareholders
October 28, 2014
Board of Directors
meeting

Total amount ofdividends

Dividends per share

Millions of yen

Yen

1,003

20.00

March 31, 2014

June 25, 2014

1,003

20.00

September 30, 2014

November 26, 2014

• Dividends for which record date is in the current fiscal year with effective date in the following fiscal
year
Fiscal year ended March 31, 2014
Resolution dateJune 24, 2014
Annual General Meetingof Shareholders

Total amount ofdividends

Dividends per share

Millions of yen

Yen

1,003

Record date

20.00

March 31, 2014

Total amount ofdividends

Dividends per share

Record dateMillions of yen

Yen

Effective dateJune 25, 2014

Fiscal year ended March 31, 2015
Resolution dateJune 23, 2015
Annual General Meetingof Shareholders

1,003

20.00

74

March 31, 2015

Effective dateJune 24, 2015

21. Selling, general and administrative expenses
Breakdown of selling, general and administrative expenses
Fiscal year ended
March 31, 2014

Fiscal year ended
March 31, 2015

Millions of yen

Millions of yen

Packing and shipping expenses
Personnel expenses
Depreciation and amortization expense
Research and development expense
Other
Total

1,378
4,057
220
2,685
3,941

1,625
4,379
308
2,151
5,347

12,283

13,812

22. Other income and expense(1) Breakdown of other income
Fiscal year ended
March 31, 2014

Fiscal year ended
March 31, 2015

Millions of yen

Gain on sales of non-current assets
Subsidy income
Other
Total

Millions of yen

507
9
480

81
3
482

996

567

(2) Breakdown of other expense
Fiscal year ended
March 31, 2014

Fiscal year ended
March 31, 2015

Millions of yen

Millions of yen

Loss on sales and retirement of non-current
assetsImpairment loss
Other
Total
Note: Refer to the note “13. Impairment loss” for impairment loss.

75

152

234

–
90

987
98

243

1,320

23. Finance income and finance costs(1) Breakdown of finance income
Fiscal year ended
March 31, 2014

Fiscal year ended
March 31, 2015

Millions of yen

Millions of yen

Interest income
Cash and cash equivalents, loans andreceivables
Dividend income
Available-for-sale financial assets
Foreign exchange gains
Gain on sales
Available-for-sale financial assets
Interest on refund of income taxes
Total

382

409

164
1,480

192
2,967

294
181

–
–

2,502

3,569

(2) Breakdown of finance costs
Fiscal year ended
March 31, 2014

Fiscal year ended
March 31, 2015

Millions of yen

Millions of yen

Interest expense
Borrowings
Other
Total

76

38
3

47
0

42

47

24. Other comprehensive income
Amount arising during year, reclassification adjustments to profit or loss and tax effects for eachcomponent of other comprehensive income
Fiscal year ended March 31, 2014
Amountarising

Reclassification
adjustments

Before tax
effects

Tax effects

Net of tax
effects

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Millions of yen

722

–

722

(218)

503

722

–

722

(218)

503

(10)

–

(10)

44

34

1,401

–

1,401

–

1,401

(14)

–

(14)

–

(14)

Subtotal

1,377

–

1,377

44

1,421

Total

2,099

–

2,099

(174)

1,924

Amountarising

Reclassification
adjustments

Before tax
effects

Tax effects

Net of tax
effects

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Millions of yen

206

–

206

(55)

151

206

–

206

(55)

151

566

–

566

55

622

8,000

–

8,000

–

8,000

(7)

–

(7)

–

(7)

Subtotal

8,559

–

8,559

55

8,615

Total

8,766

–

8,766

0

8,766

Components that will not bereclassified to profit or loss
Remeasurements of defined benefit
plans
SubtotalComponents that may be reclassified
to profit or loss
Changes in fair value of availablefor-sale financial assets
Exchange differences of foreign
operations
Share of other comprehensive
income of associates accounted forusing equity method

Fiscal year ended March 31, 2015

Components that will not bereclassified to profit or loss
Remeasurements of defined benefit
plans
SubtotalComponents that may be reclassified
to profit or loss
Changes in fair value of availablefor-sale financial assets
Exchange differences of foreign
operations
Share of other comprehensive
income of associates accounted forusing equity method7725. Earnings per share
Basis of calculating basic earnings per share attributable to ordinary equity holders
Fiscal year ended
March 31, 2014

Fiscal year ended
March 31, 2015

Millions of yen

Millions of yen

Profit attributable to ordinary equity holders ofparent (Millions of yen)
Weighted-average number of ordinary shares(Thousands of shares)
Basic earnings per share (Yen)

12,905

7,230

50,18850,188257.13144.07

Note: Information on diluted net income per share is omitted due to an absence of potential shares.

26. Financial instruments(1) Capital management
The Group’s basic policy for capital risk management is to build and maintain the stable financialbase in order to firmly maintain soundness and efficiency of the management and achieve sustainablegrowth. In line with this policy, the Group returns profits to shareholders through investments in effect,
dividends and other means based on operating cash flows.
(2) Classification of financial assets and financial liabilities
As ofApril 1, 2013
(Transition date)

As ofMarch 31, 2014

As ofMarch 31, 2015

Millions of yen

Millions of yen

Millions of yen

Financial assets
Loans and receivables
Trade and other receivables
Other financial assets
Available-for-sale financial assets
Other financial assets
Cash and cash equivalents

19,035
3,249

22,6752,859

26,024
2,571

7,532
23,571

7,600
19,046

8,794
17,557

Total financial assets
Financial liabilities
Financial liabilities at amortized cost
Trade and other payables
Borrowings
Other financial liabilities

53,38852,181

54,94812,31590
99

14,900–26

15,103
16,41026

Total financial liabilities

12,506

14,92731,540(3) Financial risk management
The Group is exposed to financial risks (credit risks, liquidity risks and market risks) in the course
business activities. In order to avoid or mitigate these risks, the Group conducts risk management
under certain policies. As its policy, the Group does not carry out derivative transactions in principle.
1) Credit risk management
Credit risks are risks that result in financial losses incurred by the Group when a customer
becomes in default for contractual obligations.
Most clutch products manufactured and sold by the Group are for the automobile and motorcycle
industries.
The certain customer group accounts for a large percentage of the Group’s revenue. For the risks,
the Group has a system where it manages due dates and outstanding balances for each business78

partner and periodically grasps information on the credit status of major business partners inaccordance with its credit management regulations.
The carrying amount of financial assets after impairment loss presented in the consolidated
financial statements is the maximum amount of exposure to credit risks to financial assets of theGroup when the appraisal value of collateral obtained is not taken into account.
Age analysis of financial assets that were past due but not impaired as of the end of fiscal year
As of
April 1, 2013
(Transition date)

As ofMarch 31, 2014

As ofMarch 31, 2015

Millions of yen

Millions of yen

Millions of yen

Within one month past due
Over one month and within six months past due
Over six months and within one year past due
Over one year past due

59
32
28
3

36
105
41
7

47
126
29
77

Total

124

191

280

The Group examines recoverability of trade receivables, etc. according to the credit status ofbusiness partners and recognizes allowance for credit losses. Changes in allowance for credit
losses are as follows:
Fiscal year ended
March 31, 2014

Fiscal year ended
March 31, 2015

Millions of yen

Millions of yen

Balance at beginning of period
Increase during the period
Decrease during the period (intended use)
Decrease during the period (reversal)
Other changes

54
11
(0)
(9)
0

56
17
(1)
(4)
3

Balance at end of period

56722) Liquidity risk management
Liquidity risks are risks of failure to make payments on the due date in situations when the Groupis required to fulfill its repayment obligations for financial liabilities due. The Group manages
liquidity risks by securing credit lines available at any time in financial institutions andcontinuously monitoring a cash flow plan and actual performance while raising appropriate funds
for repayment.
Breakdown of the balances of financial liabilities by due date
As of April 1, 2013 (Transition date)

Trade and otherpayablesBorrowings
Other financial
liabilities
Total

Carrying
amountContractual
amountDue within
one year

Due after
one yearwithintwo years

Due after
two years
withinthree years

Due after
three years
withinfour years

Due after
four years
withinfive years

Due after
five years

Millions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyen

12,315

12,315

12,315

–

–

–

–

–

90

93

93

–

–

–

–

–

99

105

–

–

–

–

–

105

12,506

12,513

12,408

–

–

–

–

105

79

As of March 31, 2014

Trade and otherpayablesBorrowings
Other financial
liabilities
Total

Carrying
amountContractual
amountDue within
one year

Due after
one yearwithintwo years

Due after
two years
withinthree years

Due after
three years
withinfour years

Due after
four years
withinfive years

Due after
five years

Millions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyen

14,90014,90014,900

–

–

–

–

–

–

–

–

–

–

–

–

–

26

27

–

–

–

–

–

27

14,927

14,92814,900

–

–

–

–

27

Carrying
amountContractual
amountDue within
one year

Due after
one yearwithintwo years

Due after
two years
withinthree years

Due after
three years
withinfour years

Due after
four years
withinfive years

Due after
five years

Millions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyen

15,103

15,103

15,103

–

–

–

–

–

16,41016,640

4,377

5,142

3,912

3,208

–

–

26

27

–

–

–

–

–

27

31,54031,772

19,481

5,142

3,912

3,208

–

27

As of March 31, 2015

Trade and otherpayablesBorrowings
Other financial
liabilities
Total3) Market risk management(i) Exchange risks
Because the Group has business operations on a global basis, it is exposed to risks thattransactions denominated in currencies other than its functional currency may affect profit andloss and cash flows and risks that equity and profit or loss may be affected when equity andprofit or loss denominated in currencies other than its functional currency are translated into thefunctional currency, both due to currency fluctuations. The Group strives to mitigate these risks
due to currency fluctuations by monitoring currency fluctuations.
• Foreign exchange sensitivity
For financial instruments held by the Group as of the reporting date, the impact of a 1%
depreciation of Japanese yen against US dollars and renminbi on profit before income taxes in
the consolidated statement of income is as follows.
The effects of translation of financial instruments denominated in the functional currency,
assets and liabilities and revenue and expenses of foreign operations into yen are not included.
This analysis is based on the assumption that other variable factors are constant.
Fiscal year ended
March 31, 2014

Fiscal year ended
March 31, 2015

Millions of yen

Millions of yen

US dollar
RMB

107
48

142
48

(ii) Price fluctuation risks
Although the Group is exposed to risks of fluctuations in share prices, which arising from equity
financial instruments (shares), these instruments are shares in companies with which the Grouphas business relationships and the Group grasps information on market prices of the sharesquarterly.
• Sensitivity analysis on market prices
80

The impact of a 10% fluctuation in market prices of equity financial instruments held by theGroup as of the end of fiscal year on other comprehensive income (before tax effects) was¥695 million in the previous fiscal year and ¥810 million in the fiscal year under review.
This analysis is based on the assumption that other variable factors are constant.
(iii) Interest rate risks
Since borrowings are raised with fixed interest rates and interest rate risks are consideredinsignificant to the Group, the sensitive analysis of interest rates has not been performed.
(4) Fair value of financial instruments
1) Method of fair value measurement
Loans and receivables
The carrying amounts of loans and receivables approximate the fair values, since the period tomaturity is short or there is no significant difference between the contracted interest rate and the rate
assumed if a similar contract is newly executed.
Available-for-sale financial assets
The fair values of listed shares are measured based on market prices at the end of the fiscal year. The
fair values of unlisted shares are measured by a reasonable method.
Cash and cash equivalents
The carrying amounts of cash and cash equivalents approximate the fair values, since the period tomaturity is short.
Financial liabilities measured at amortized cost
The fair values of borrowings are measured by the discounted cash flow method using the interest
rate for the case where funds are borrowed under the same conditions with the same remaining
period. The carrying amounts of liabilities other than the above reasonably approximate the fairvalues since they are principally settled in a short period of time.
2) Fair value hierarchy
The fair value hierarchy of financial instruments is categorized as follows:
Level 1:

Fair value measured at the quoted price in active markets

Level 2:

Fair value, other than Level 1, that is determined by directly or indirectly using theobservable price

Level 3:

Fair value that is determined using a valuation technique including unobservable inputs

When multiple inputs are used for fair value measurement, the level of the fair value is determinedbased on the lowest level of significant input in the entire measurement of the fair value.
Transfers between levels of the fair value hierarchy are recognized as if they had occurred at the
beginning of each quarter.

813) Carrying amount and fair value of financial instruments
As ofApril 1, 2013
(Transition date)
Carrying
Fair value
amountCarrying
amountFair value

Carrying
amountFair value

Millions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyenMillions of
yen

–

–

–

–

12,806

12,824Long-term borrowings(Note 1)As ofMarch 31, 2014

As ofMarch 31, 2015

Notes: 1. Include current portion of long-term borrowings.
The fair value of long-term borrowings is in Level 2.
2. Financial instruments measured at fair value and financial instruments of which the fair value extremely
approximates the carrying amount are not included in the above table.

4) Financial instruments measured at fair value on a recurring basis
Classification of financial instruments measured at fair value on a recurring basis based on the fairvalue hierarchy is as follows:
As of April 1, 2013 (Transition date)Financial assets
Available-for-salefinancial assets
Listed shares
Unlisted shares
Other
Total

Level 1

Level 2

Level 3

Total

Millions of yen

Millions of yen

Millions of yen

Millions of yen

6,916
–
–

–
–
–

–
610
4

6,916
610
4

6,916

–

615

7,532

As of March 31, 2014

Financial assets
Available-for-salefinancial assets
Listed shares
Unlisted shares
Other
Total

Level 1

Level 2

Level 3

Total

Millions of yen

Millions of yen

Millions of yen

Millions of yen

6,955
–
–

–
–
–

–
640
4

6,955
640
4

6,955

–

645

7,600

As of March 31, 2015

Financial assets
Available-for-salefinancial assets
Listed shares
Unlisted shares
Other
Total

Level 1

Level 2

Level 3

Total

Millions of yen

Millions of yen

Millions of yen

Millions of yen

8,101
–
–

–
–
–

–
687
4

8,101
687
4

8,101

–

692

8,794

Note: No transfers between Level 1, Level 2 and Level 3 were made in one year ended March 31, 2014 and one year ended
March 31, 2015.

82Changes in financial instruments classified as Level 3 are as follows:
Fiscal year ended
March 31, 2014

Fiscal year ended
March 31, 2015

Millions of yen

Millions of yen

Balance at beginning of period
Total gains and losses
Other comprehensive income

615

645

29

47

Balance at end of period

645

692

Notes: 1. Gains and losses included in other comprehensive income relate to shares, etc. held as of the reporting date thatwere not traded at a market. These gains and losses are included in “changes in fair value of available-for-salefinancial assets” and “exchange differences of foreign operations” in the consolidated statement of comprehensive
income.
2. Financial assets classified as Level 3 mainly consist of unlisted shares. The fair values of unlisted shares are
principally measured by valuation techniques based on net asset value, and results of the fair value measurement
are approved by an appropriate authorized person.

8327. Important subsidiaries
Status of important subsidiaries at the end of the fiscal year under review
Name

Location

Principal contents ofbusiness
Motorcycle andautomobile clutches
Motorcycle clutches
Motorcycle clutches
Administration ofsubsidiaries in theU.S.

KYUSHU F.C.C. CO., LTD.

JapanTENRYU SANGYO CO., LTD.
Tohoku Chemical Industries, Ltd.

Japan
Japan

FCC (North America), INC.

U.S.

FCC (INDIANA), LLC.

U.S.

Automobile clutches

FCC (North Carolina), LLC.

U.S.

Motorcycle andautomobile clutches

FCC Adams, LLC.

U.S.

Automobile clutches

FCC AUTOMOTIVE PARTS DE MEXICO, S.A. DE
C.V.

MexicoAutomobile clutches

FCC (THAILAND) CO., LTD.

ThailandFCC (PHILIPPINES) CORP.

Philippines

F.C.C. (China) Investment Co., Ltd.

China

China

Motorcycle andautomobile clutches
Motorcycle andautomobile clutches
Administration ofsubsidiaries in China
Motorcycle andautomobile clutches
Motorcycle clutches

CHINA FCC FOSHAN CO., LTD.

China

Automobile clutches

FCC (TAIWAN) CO., LTD.

TaiwanMotorcycle clutches

FCC INDIA MANUFACTURING PRIVATE LTD.

India

FCC CLUTCH INDIA PRIVATE LTD.

India

PT. FCC INDONESIA

Indonesia

FCC (VIETNAM) CO., LTD.
FCC DO BRASIL LTDA.

VietnamBrazilCHENGDU YONGHUA. F.C.C. CLUTCHES CO.,LTD.
CHU’S F.C.C. CO., LTD. (SHANGHAI)

China

Motorcycle andautomobile clutches
Motorcycle andautomobile clutches
Motorcycle andautomobile clutches
Motorcycle clutches
Motorcycle clutches

Ratio of voting rights
holding (%)
100
79.78
100
100
100
[100]
100
[100]
100
[100]
100
[1]
58
[0.07]
100
100
100[71.43]100
91.9[53.33]
70
[15]
100
[50]
100
100
[0.55]
90
100

Note: The figures in brackets in the “Ratio of voting rights holding” column are indirect holding ratio included in the
figures outside the brackets.

8428. Related parties(1) Related party transactions
Fiscal year ended March 31, 2014
Type

Other affiliate

Name

Honda Motor Co., Ltd.

Description of relationship with therelated party

Transaction
amountUnsettledamountMillions of yen

Millions of yen

16,372
2,858

1,825
305

Transaction
amountUnsettledamountMillions of yen

Millions of yen

12,585
2,196

1,247
241

Sale of the Company’s products
Purchase of raw materials and parts

Note: Related party transactions are conducted on the basis of arm’s length transactions.

Fiscal year ended March 31, 2015
Type

Other affiliate

Name

Honda Motor Co., Ltd.

Description of relationship with therelated party
Sale of the Company’s products
Purchase of raw materials and parts

Note: Related party transactions are conducted on the basis of arm’s length transactions.

(2) Remuneration for key management personnel
Fiscal year ended
March 31, 2014

Fiscal year ended
March 31, 2015

Millions of yen

Millions of yen

Remuneration and bonuses

362

285

Note: For the basic policy, etc. for remuneration of key management personnel, refer to “A. Company information, IV.
Information about reporting company, 4. Explanation about corporate governance, etc., (1) Explanation about
corporate governance, 5) Remuneration for officers.”

29. Commitments
Breakdown of commitments related to expenditures at and after the end of the fiscal year
As of
April 1, 2013
(Transition date)

As ofMarch 31, 2014

As ofMarch 31, 2015

Millions of yen

Millions of yen

Millions of yen

Property, plant and equipment and intangible
assets5,242

30. Subsequent events
Not applicable.

85

4,072

7,584

31. First-time adoption
The Group disclosed the consolidated financial statements under IFRS for the first time for the fiscal
year under review. The most recent consolidated financial statements prepared in accordance withJapanese GAAP are those for the fiscal year ended March 31, 2014. The date of transition to IFRS is
April 1, 2013.
Reconciliations that are required to be disclosed under the first-time adoption of IFRS are as follows:
Reconciliation of equity as of April 1, 2013 (the date of transition to IFRS)
Accounts under Japanese
GAAP

AssetsCurrent assets
Cash and deposits
Notes and accounts
receivable - trade
Inventories
Short-term loans
receivable
Deferred tax assets
Other
Allowance for doubtful
accounts
Total current assets
Non-current assets
Property, plant andequipment
Intangible assets

Investment securities
Long-term loans
receivable
Deferred tax assets
Other
Allowance for doubtful
accounts
Total non-current assets
Total assets

Japanese
GAAP

Reclassification

Differencesin recognition andmeasurement

IFRS

Millions ofyenMillions ofyenMillions ofyenMillions of
yen

Notes

Accounts under IFRS

24,198(828)

202

23,571(9)

AssetsCurrent assets
Cash and cash equivalents

17,554761

718

19,035(1)

Trade and other receivables–
16,023

1,816
–

–
(508)

1,816
15,515(9)

Other financial assets
Inventories

988

(988)

–

–

1,327
2,843

(1,330)
(770)

2
(45)

–
2,028

(8)

8

–

–

62,927(1,330)370

61,96747,299–629

47,928

1,422

(497)

1,260

2,184

–

774

–

774

7,823

(7,823)

–

–

532

(532)

0

–

–
1,306
992

8,486
1,330
(452)

478
(75)
4

8,964
2,560
544

(45)

45

–

–

59,330

1,330

2,296

62,956122,258–

2,666

124,924

86(9)Other current assets

Total current assets
Non-current assets
Property, plant and equipment(2)(3), (9)(5), (9)Goodwill and intangible
assetsInvestments accounted forusing the equity method

Other financial assets
Deferred tax assets
Other non-current assets

Total non-current assets
Total assets

Accounts under Japanese
GAAP

Liabilities
Current liabilities
Notes and accounts
payable - trade
Factoring payables
Short-term loans payable
Income taxes payable
Provision for bonuses
Other
Total current liabilities
Non-current liabilities
Provision for retirement
benefits
Deferred tax liabilities
Other
Total non-current
liabilities
Total liabilities
Net assets
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total accumulated othercomprehensive income

Minority interests

Japanese
GAAP

Reclassification

Differencesin recognition andmeasurement

Millions ofyenMillions ofyenMillions of
yen

IFRS

Millions of
yen

Notes

Accounts under IFRS

Liabilities and equity
Liabilities
Current liabilities
8,590

3,835

(110)

12,315

2,003
291
2,275
1,382
4,817

(2,003)–468(1,355)
(476)

–
(200)
67
(26)
319

–
90
2,811
–
4,661

19,360468

50

19,879

–

99

–

1,586

–

–
3,171
648

Trade and other payables(9)

Borrowings
Income taxes payable(6)

Other current liabilities

99

(9)

Total current liabilities
Non-current liabilities
Other financial liabilities

145

1,732

(4)

Defined benefit liability

41
–
(609)

–
602
201

41
3,773
239

(9)
(5), (9)

5,405

(468)

949

5,887

24,766–

999

25,766

4,175
4,566
85,657(3,407)

–
–
–
–

–
–
(4,428)
–

4,175
4,566
81,228(3,407)(1,638)

–

5,583

3,945

Total non-current liabilities

(8)
(7)

Total liabilities
EquityIssued capital
Share premium
Retained earnings
Treasury shares
Other components of equity

90,507

Total equity attributable toowners of parent
Non-controlling interests

8,138

–

512

8,650

Total net assets

97,491–

1,666

99,158

Total liabilities and net assets

122,258–

2,666

124,924

87

Provisions
Deferred tax liabilities
Other non-current liabilities

Total equity
Total liabilities andequityNotes on reconciliation of equity(1) Adjustments to trade and other receivables
Under Japanese GAAP, income for sale of goods was recognized at the time of shipping; however,under IFRS, such income is recognized at the time of delivery of goods to customers.
(2) Adjustments to intangible assets
Under Japanese GAAP, research and development expense was expensed in the consolidated
statement of income; however, under IFRS, research and development expense that is expenditure in
the development phase and meets capitalization requirements is capitalized.
(3) Adjustments to unlisted shares
Under Japanese GAAP, unlisted shares were measured based on the acquisition cost and impairment
loss is recognized where necessary; however, under IFRS, unlisted shares are measured as availablefor-sale financial assets based on the fair values.
(4) Adjustments to defined benefit liability
Under Japanese GAAP, for actuarial gains or losses arising from defined benefit plans, the amount
was amortized by the declining-balance method over a period within the average remaining service
period of eligible employees at the time of occurrence, beginning from the fiscal year of occurrence;
however, under IFRS, such actuarial gains or losses, except for certain actuarial gains or losses, arerecognized in other comprehensive income at the time of occurrence and immediately transferred toretained earnings.
(5) Adjustments to deferred tax assets and liabilities
Under Japanese GAAP, the tax rate for the seller was used to calculate tax effects due to eliminationof unrealized profits and losses; however, under IFRS, the tax rate for the buyer is used to calculate
such tax effects.
(6) Adjustments to unused paid absences
Unused paid vacations, which were not required under Japanese GAAP, are recognized in liabilities
under IFRS and the adjustments are made to retained earnings.
(7) Adjustments to other components of equity
The Company applied the exemption on first-time adoption of IFRS and transferred all of cumulativetranslation differences of foreign subsidiaries to retained earnings on April 1, 2013, the date oftransition to IFRS.
(8) Adjustments to retained earnings
As of April 1, 2013
(Transition date)Millions of yen

A
B
C
D
E
F
G
H

Adjustments to trade and other receivables [refer to (1)]Adjustments to intangible assets [refer to (2)]Adjustments to defined benefit liability [refer to (4)]Adjustments to deferred tax assets and liabilities [refer to (5)]Adjustments to unused paid absences [refer to (6)]Adjustments to other components of equity [refer to (7)]Other
Tax effects of adjustment entries

718
1,260
(133)
(342)
(310)
(4,625)
(660)
(336)

I

Total adjustments to retained earnings(4,428)88

(9) Reclassification
In addition to the above, the Group makes reclassifications to comply with provisions of IFRS. The
major reclassifications are as follows:• Time deposits with the deposit term of over three months, which were included in “cash anddeposits” under Japanese GAAP, are included in “other current financial assets” under IFRS.
• Financial assets and financial liabilities are presented separately in accordance with IFRS.
• All current portions of “deferred tax assets” and “deferred tax liabilities” are reclassified to noncurrent portions.
• “Provisions” are reclassified based on the definitions and requirements under IFRS.
• In accordance with the provision for presentation of IFRS, part of liabilities related to uncertain tax
position of overseas subsidiaries, which was recorded as “other” in non-current liabilities underJapanese GAAP, has been reclassified to “income taxes payable.”
Reconciliation of equity as of March 31, 2014 (the date of latest consolidated financial statements underJapanese GAAP)
Accounts under Japanese
GAAP

AssetsCurrent assets
Cash and deposits
Notes and accounts
receivable - trade
Inventories
Short-term loans
receivable
Deferred tax assets
Other
Allowance for doubtful
accounts
Total current assets
Non-current assets
Property, plant andequipment
Intangible assets

Investment securities
Long-term loans
receivable
Defined benefit asset
Deferred tax assets
Other
Allowance for doubtful
accounts
Total non-current assets
Total assets

Japanese
GAAP

Reclassification

Differencesin recognition andmeasurement

IFRS

Millions ofyenMillions ofyenMillions ofyenMillions of
yen

Notes

Accounts under IFRS

21,280(1,133)(1,101)

19,046(11)

AssetsCurrent assets
Cash and cash equivalents

20,9791,516

179

22,675(1)

Trade and other receivables–
17,864

1,458
–

–
(234)

1,458
17,629(11)

Other financial assets
Inventories

324

(324)

–

–

1,236
3,550

(1,257)(1,532)

21
117

–
2,135

(15)

15

–

–

65,220(1,257)(1,017)

62,94560,416–640

61,056

1,802

(455)

1,358

2,705

–

692

–

692

7,780

(7,780)

–

–

541

(541)

(0)

–

108
–
1,157
921

(108)
8,493
1,257
(340)

–
508
(204)
0

–
9,001
2,211
581

(41)

41

–

–

72,688

1,257

2,303

76,250137,909–

1,286

139,195

89

Other current assets

Total current assets
Non-current assets
Property, plant and equipment(2), (4)(3), (11)(6), (11)Goodwill and intangible
assetsInvestments accounted forusing the equity method

Other financial assets
Deferred tax assets
Other non-current assets

Total non-current assets
Total assets

Accounts under Japanese
GAAP

Liabilities
Current liabilities
Notes and accounts
payable - trade
Factoring payables
Income taxes payable
Provision for bonuses
Other
Total current liabilities
Non-current liabilities
Defined benefit liability
Deferred tax liabilities
Other
Total non-current
liabilities
Total liabilities
Net assets
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total accumulated othercomprehensive income

Minority interests

Japanese
GAAP

Reclassification

Differencesin recognition andmeasurement

Millions ofyenMillions ofyenMillions of
yen

IFRS

Millions of
yen

Notes

Accounts under IFRS

Liabilities and equity
Liabilities
Current liabilities
9,531

5,333

36

14,900

2,583
2,400
1,582
5,347

(2,583)605(1,536)(1,212)

–
(1)
(45)
387

–
3,004
–
4,522

21,444605

376

22,427

–
1,229
–
3,416
720

26
–
41
–
(673)

–
19
–
453
197

26
1,248
41
3,869
244

5,365

(605)

670

5,430

26,810–1,047

27,857

4,175
4,566
96,898(3,407)

–
–
–
–

–
350
(4,189)
–

4,175
4,916
92,709(3,407)

(8)
(10)

1,950

–

3,659

5,610

(9)

(11)

Income taxes payable(7)

Other current liabilities

(11)
(5)
(11)
(6), (11)Total current liabilities
Non-current liabilities
Other financial liabilities
Defined benefit liability
Provisions
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities
EquityIssued capital
Share premium
Retained earnings
Treasury shares
Other components of equity

104,004

Total equity attributable toowners of parent
Non-controlling interests

6,915

–

417

7,332

Total net assets

111,099–238

111,337

Total liabilities and net assets

137,909–

1,286

139,195

90

Trade and other payables

Total equity
Total liabilities andequityNotes on reconciliation of equity(1) Adjustments to trade and other receivables
Under Japanese GAAP, income for sale of goods was recognized at the time of shipping; however,under IFRS, such income is recognized at the time of delivery of goods to customers.
(2) Adjustments to intangible assets
Under Japanese GAAP, research and development expense was expensed in the consolidated
statement of income; however, under IFRS, research and development expense that is expenditure in
the development phase and meets capitalization requirements is capitalized.
(3) Adjustments to unlisted shares
Under Japanese GAAP, unlisted shares were measured based on the acquisition cost and impairment
loss is recognized where necessary; however, under IFRS, unlisted shares are measured as availablefor-sale financial assets at fair value.
(4) Adjustments to goodwill
Under Japanese GAAP, goodwill was regularly amortized over a certain period; however, under IFRS,
goodwill is not amortized and impairment test of goodwill is required. Consequently, ¥275 million ofamortization of goodwill, which was expensed under Japanese GAAP, has been reversed under IFRS.
(5) Adjustments to defined benefit liability (asset)
Under Japanese GAAP, for actuarial gains or losses arising from defined benefit plans, the amount
was amortized by the declining-balance method over a period within the average remaining service
period of eligible employees at the time of occurrence, beginning from the fiscal year of occurrence;
however, under IFRS, such actuarial gains or losses, except for certain actuarial gains or losses, arerecognized in other comprehensive income at the time of occurrence and immediately transferred toretained earnings.
(6) Adjustments to deferred tax assets and liabilities
Under Japanese GAAP, the tax rate for the seller was used to calculate tax effects due to eliminationof unrealized profits and losses; however, under IFRS, the tax rate for the buyer is used to calculate
such tax effects.
(7) Adjustments to unused paid absences
Unused paid absences, which were not required under Japanese GAAP, are recognized in liabilities
under IFRS and the adjustments are made to retained earnings.
(8) Adjustments to negative goodwill
Under Japanese GAAP, negative goodwill arose as a result of additional acquisition of shares in aconsolidated subsidiary that was controlled by the Group even before the acquisition, and wasrecognized as extraordinary income; however, under IFRS, such an acquisition is treated as an equity
transaction and recognized as an increase in share premium.
(9) Adjustments to other components of equity
The Company applied the exemption on first-time adoption of IFRS and transferred all of cumulativetranslation differences of foreign subsidiaries to retained earnings on April 1, 2013, the date oftransition.

91

(10) Adjustments to retained earnings
As of March 31, 2014
Millions of yen

A
B
C
D
E
F
G
H
I

Adjustments to trade and other receivables [refer to (1)]Adjustments to goodwill and intangible assets [refer to (2) and (4)]Adjustments to defined benefit liability (asset) [refer to (5)]Adjustments to deferred tax assets and liabilities [refer to (6)]Adjustments to unused paid absences [refer to (7)]Adjustments to negative goodwill [refer to (8)]Adjustments to other components of equity [refer to (9)]Other
Tax effects of adjustment entries

179
1,358
350
(314)
(314)
(350)
(4,625)
(130)
(343)

J

Total adjustments to retained earnings(4,189)(11) Reclassification
In addition to the above, the Company makes reclassifications to comply with provisions of IFRS.
The major reclassifications are as follows:• Time deposits with the deposit term of over three months, which were included in “cash anddeposits” under Japanese GAAP, are included in “other current financial assets” under IFRS.
• Financial assets and financial liabilities are presented separately in accordance with IFRS.
• All current portions of “deferred tax assets” and “deferred tax liabilities” are reclassified to noncurrent portions.
• “Provisions” are reclassified based on the definitions and requirements under IFRS.
• Part of liabilities related to uncertain tax position of overseas subsidiaries, which was recorded as“other” in non-current liabilities under Japanese GAAP, has been reclassified to “income taxes
payable.”92

Reconciliation of profit or loss and comprehensive income for the fiscal year ended March 31, 2014 (thelatest fiscal year of consolidated financial statements prepared under Japanese GAAP)(1) Reconciliation of profit or loss
Accounts under Japanese
GAAP

Net sales
Cost of sales
Gross profit
Selling, general andadministrative expenses

Operating income
Non-operating income
Non-operating expenses
Ordinary income
Extraordinary income
Extraordinary losses

Income before income taxes
and minority interests
Income taxes

Japanese
GAAP

Reclassification

Differencesin recognition andmeasurement

Millions ofyenMillions ofyenMillions ofyenMillions ofyen

144,890(118,277)––

543(1,114)145,433(119,391)

26,613–(570)

26,042

IFRS

Notes

Accounts under IFRS

(1)(3), (5)

Revenue
Cost of sales
Gross profit
Selling, general andadministrative expenses
Other income
Other expense(12,973)–689(12,283)

–
–

1,339
(243)

(343)
–

996
(243)

(3), (4)(5), (6)(6)(6)

13,6392,720(245)
16,115
1,333
(186)
–
–

1,096
(2,497)230(15,883)(1,343)
152
2,500
(38)

(223)
(223)
14
(232)
9
33
2
(3)

14,512
–
–
–
–
–
2,502
(42)

(6)
(6)
(6)
(6)
(6)
(6)
(6)

–

(101)

–

(101)

17,263–(391)

16,871

Profit before income taxes

Operating profit

Finance income
Finance costs
Share of profit (loss) ininvestments accounted for using
the equity method(3,996)–138(3,858)

Income tax expense

Income before minority
interests

13,266–(253)

13,012

Profit

Net income

13,148–(243)

12,905

117

–

(9)

107

Minority interests in income

93

Profit attributable to owners ofparentProfit attributable to noncontrolling interests

(2) Reconciliation of comprehensive income
Accounts under Japanese
GAAP

Income before minority
interests

Valuation difference on
available-for-salesecurities
Foreign currencytranslation adjustment
Share of othercomprehensive income ofentities accounted forusing equity method
Total other comprehensive
incomeComprehensive income
Comprehensive income
attributable to owners ofparentComprehensive income
attributable to minority
interests

Japanese
GAAP

Reclassification

Differencesin recognition andmeasurement

IFRS

Millions ofyenMillions ofyenMillions ofyenMillions ofyen

13,266–(253)

13,012

–

–

503

503

13

–

20

34

3,003

–

(1,602)

1,401

(14)

–

–

(14)

3,002

–

(1,078)

1,924

16,269–(1,331)

14,937

16,308–(1,254)

15,053

(39)

–

(76)

(116)

Notes

Accounts under IFRSProfit(2)

Other comprehensive income
Components that will not bereclassified to profit or loss
Remeasurements ofdefined benefit plans
Components that may bereclassified to profit or loss
Changes in fair value ofavailable-for-sale financial
assetsExchange differences offoreign operations
Share of othercomprehensive income ofassociates accounted forusing equity method
Total other comprehensive
incomeComprehensive income
Comprehensive income
attributable to owners ofparentComprehensive income
attributable to non-controllinginterests

Notes on reconciliation of profit or loss and comprehensive income(1) Adjustments to revenue
Under Japanese GAAP, income for sale of goods was recognized at the time of shipping; however,under IFRS, such income is recognized at the time of delivery of goods to customers.
(2) Adjustments to remeasurements of defined benefit plans
Under Japanese GAAP, for actuarial gains or losses arising from defined benefit plans, the amountdivided proportionally by a period equal to or less than the average remaining service period of
eligible employees at the time of occurrence, using the declining-balance method was amortized;
however, under IFRS, such actuarial gains or losses, except for certain actuarial gains or losses, arerecognized in other comprehensive income at the time of occurrence.
(3) Adjustments to intangible assets
Certain development expense that was expensed under Japanese GAAP is capitalized under IFRS. As
a result, “cost of sales” increased by ¥618 million, and “research and development expense” included
in selling, general and administrative expenses decreased by ¥482 million.
(4) Adjustments to goodwill
Under Japanese GAAP, goodwill is amortized; however, goodwill is not amortized under IFRS, andconsequently, “selling, general and administrative expense” decreased by ¥275 million.
(5) Adjustments to unused paid absences
Unused paid absences, which were not accounted for under Japanese GAAP, are recognized in “costof sales” and “selling, general and administrative expenses” under IFRS.

94

(6) Reclassification
Items that were presented “non-operating income,” “non-operating expenses,” “extraordinary income”
and “extraordinary losses” under Japanese GAAP are presented in “finance income” or “finance costs”
for finance related items and “selling, general and administrative expenses,” and “other income” and“other expense” for other items.
Reconciliation of cash flows for the fiscal year ended March 31, 2014 (the latest fiscal year of consolidated
financial statements prepared under Japanese GAAP)
Under Japanese GAAP, expenditures related to development expense were classified as cash flows fromoperating activities; however, under IFRS, expenditures related to capitalized development expense areclassified as cash flows from investment activities. Consequently, cash flows from investing activities
decreased by ¥482 million, while cash flows from operating activities increased by the same amount.

Opinion of independent auditors
Auditors: Yasumori Audit Corporation
Opinion: unqualified

95

2. Non-consolidated financial statements, etc.
(1) Non-consolidated financial statements
1) Non-consolidated balance sheet(Millions of yen)

AssetsCurrent assets
Cash and deposits
Notes receivable - trade
Electronically recorded monetary claims operating
Accounts receivable - trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Prepaid expenses
Deferred tax assets
Short-term loans receivable from subsidiaries andassociates
Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings
Structures
Machinery and equipment
VehiclesTools, furniture and fixtures
Land
Construction in progress
Total property, plant and equipment
Intangible assets
Software
Software in progress
Other
Total intangible assets
Investments and other assets
Investment securities
Shares of subsidiaries and associates
Bonds of subsidiaries and associates
Investments in capital
Investments in capital of subsidiaries andassociates
Long-term loans to employees
Long-term loans receivable from subsidiaries
and associates
Long-term prepaid expenses
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

96

As of March 31, 2014

As of March 31, 2015

3,940
55

1,692
31

59

86

8,418
786
1,033
3,064
50
707

7,998
731
1,759
2,520
59
619

9,577

14,517

2,876
30,571

2,941
32,959

3,962
435
3,748
25
443
5,327
576
14,519

3,860
402
3,922
30
685
4,340
1,859
15,101

111
653
5
769

115
1,269
5
1,390

498
21,625–
4

1,084
24,395
5,846
4

5,587

5,587

158

143

766

6,554

9
697
(33)
29,31444,60375,174–707(46)
44,27860,77093,730(Millions of yen)

Liabilities
Current liabilities
Notes payable - trade
Accounts payable - trade
Factoring liabilities
Short-term loans payable
Accounts payable - otherAccrued expenses
Income taxes payable
Advances received
Deposits received
Provision for bonuses
Other
Total current liabilities
Non-current liabilities
Long-term loans payable
Deferred tax liabilities
Provision for retirement benefits
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Legal capital surplus
Other capital surplus
Total capital surpluses
Retained earnings
Legal retained earnings
Other retained earnings
Reserve for dividends
Reserve for advanced depreciation of noncurrent assets
General reserve
Retained earnings brought forward
Total retained earnings
Treasury shares
Total shareholders’ equity
Valuation and translation adjustments
Valuation difference on available-for-salesecurities
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

97

As of March 31, 2014

As of March 31, 2015

864
3,680
2,496
–
733
322
1,210
2
46
1,149
0
10,506

529
2,959
2,116
1,868
644
342
1,291
–
44
1,157
0
10,954

–
1,908
530
37
27
2,503
13,00912,139
1,740
474
32
27
14,41225,367

4,175

4,175

4,555
10
4,566

4,555
10
4,566

1,043

1,043

1,600

1,600

903

948

38,50011,30653,354(3,407)
58,68843,50011,92859,021(3,408)64,355

3,476

4,007

3,476
62,16475,174

4,007
68,36293,730

2) Non-consolidated statements of income(Millions of yen)
Fiscal year ended
March 31, 2014
Net sales
Cost of sales
Beginning finished goods
Cost of products manufactured
Purchase of finished goods
Total
Ending finished goods
Cost of finished goods sold
Gross profit
Selling, general and administrative expenses
Packing and delivery expenses
Salaries and allowances
Provision for bonuses
Retirement benefit expenses
Depreciation
Research and development expenses
Other
Total selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Interest on capital receivable
Interest on securities
Dividend income
Rental income
Commissions on equipment sales
Foreign exchange gains
Technical advisory fee
Other
Total non-operating income
Non-operating expenses
Interest expenses
Rent expenses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Transfer pricing taxation adjustment
Interest on refund of income taxes and otherTotal extraordinary income
Extraordinary losses
Loss on sales and retirement of non-current assets
Impairment loss
Total extraordinary losses
Income before income taxes
Income taxes - current
Refund of income taxes
Income taxes - deferred
Total income taxes
Net income

98

Fiscal year ended
March 31, 2015

45,48542,560809
31,292
2,225
34,327786
33,54011,944786
29,8081,601
32,196731
31,465
11,095

739
1,600
237
189
40
3,168
1,669
7,646
4,298

805
1,629
242
205
42
3,163
1,936
8,024
3,070

157
137
–
1,907
1
1,483
817
202
68
4,776

250
130
209
3,299
7
945
3,100
412
58
8,414

–
0
0
0
9,074

26
1
0
28
11,455

93
294
3,001
181
3,571

0
–
–
–
0

42
–
42
12,603
2,887
(855)
3
2,034
10,568

154
987
1,141
10,314
2,793
–
(101)
2,692
7,622

3) Non-consolidated statements of changes in shareholders’ equity
Fiscal year ended March 31, 2014
(Millions of yen)
Shareholders’ equity
Capital surplus

Retained earnings
Other retained earnings

Capitalstock

Balance at beginningof current period
Cumulative effects
of changes inaccounting policies
Restated balance

Legalcapitalsurplus

4,175

Other
capitalsurplus

4,555

10

Total
capitalsurplusLegalretainedearnings

4,566

1,043

Reservefordividends

Reserve foradvanceddepreciationof noncurrent
assetsGeneralreserve

Retainedearnings
brought
forward

1,600

904

36,5004,644

44,692
–

4,175

4,555

10

4,566

1,043

1,600

Changes of items
during period
Reversal of reserve
for advanced
depreciation of
non-current assets
Provision of reserve
for advanced
depreciation of
non-current assets
Provision ofgeneral reserve
Dividends ofsurplus904

36,500(0)4,644

44,692

0

–

–
2,000

Net income
Purchase oftreasury shares
Net changes of
items other thanshareholders’ equity
Total changes of
items during period
Balance at end ofcurrent period

Total
retainedearnings(2,000)–(1,907)(1,907)

10,568

10,568

–

–

–

–

–

–

(0)

2,000

6,661

8,661

4,175

4,555

10

4,566

1,043

1,600

903

38,50011,30653,35499

Shareholders’ equity

Balance at beginningof current period
Cumulative effects
of changes inaccounting policies
Restated balance

TreasurysharesTotalshareholders’equity(3,407)50,027

3,476

Total net
assets3,476

53,503–(3,407)

Changes of items
during period
Reversal of reserve
for advanced
depreciation of noncurrent assets
Provision of reserve
for advanced
depreciation of noncurrent assets
Provision of generalreserve
Dividends ofsurplus
Net income
Purchase oftreasury shares
Net changes of
items other thanshareholders’ equity
Total changes of
items during period
Balance at end ofcurrent period

Valuation and translation
adjustments
Valuation
Total
difference
valuationonandavailabletranslation
for-saleadjustments
securities(0)50,027

–
3,476

3,476

53,503

–

–

–

–

–

–

(1,907)(1,907)

10,568

10,568

(0)

(0)
(0)

(0)

(0)

(0)

8,660

(0)

(0)

8,660

(3,407)

58,688

3,476

3,476

62,164100

Fiscal year ended March 31, 2015
(Millions of yen)
Shareholders’ equity
Capital surplus

Retained earnings
Other retained earnings

Capitalstock

Balance at beginningof current period
Cumulative effects
of changes inaccounting policies
Restated balance

Other
capitalsurplusLegalcapitalsurplus

4,175

4,175

4,555

4,555

Total
capitalsurplus

10

10

Legal
retainedearnings

4,566

1,043

4,566

1,043

Reservefordividends

Reserve foradvanceddepreciationof noncurrent
assetsGeneralreserve

Retainedearnings
brought
forward

1,600

903

38,50011,30653,35452

52

11,35853,406

(0)

0

–

45

(45)

–

(5,000)–(2,007)(2,007)

7,622

7,622

1,600

Changes of items
during period
Reversal of reserve
for advanced
depreciation of
non-current assets
Provision of reserve
for advanced
depreciation of
non-current assets
Provision ofgeneral reserve
Dividends ofsurplus903

38,5005,000

Net income
Purchase oftreasury shares
Net changes of
items other thanshareholders’equityTotal changes of
items during period
Balance at end ofcurrent period

Total
retainedearnings

–

–

–

–

–

–

44

5,000

570

5,614

4,175

4,555

10

4,566

1,043

1,600

948

43,50011,92859,021

101

Valuation and translation
adjustments
Valuation
Total
difference
Totalvaluationonshareholders’andavailableequity
translation
for-saleadjustments
securities

Shareholders’ equity

TreasurysharesBalance at beginningof current period
Cumulative effects
of changes inaccounting policies
Restated balance(3,407)

3,476

3,476

62,16452

52(3,407)

Changes of items
during period
Reversal of reserve
for advanced
depreciation of
non-current assets
Provision of reserve
for advanced
depreciation of
non-current assets
Provision ofgeneral reserve
Dividends ofsurplus
Net income
Purchase oftreasury shares
Net changes of
items other thanshareholders’equityTotal changes of
items during period
Balance at end ofcurrent period

58,688

Total net
assets(0)58,740

3,476

3,476

62,216

–

–

–

–

–

–

(2,007)(2,007)

7,622

7,622

(0)

(0)
531

531

531

(0)

5,614

531

531

6,146

(3,408)64,355

4,007

4,007

68,362102

[Notes to non-consolidated financial statements]
Significant accounting policies
1. Valuation basis and methods for assets(1) Valuation basis and methods for securities
Shares of subsidiaries and associates
Stated at cost determined by the weighted-average method
Available-for-sale securities (securities classified as other securities under Japanese GAAP)
Securities with readily determinable fair value
Stated at fair value based on market price and others as of the fiscal year-end date (unrealized
gains and losses, net of applicable taxes, are recognized in a separate component of net assets,
and costs of securities sold are determined by the weighted-average method).
Securities without readily determinable fair value
Stated at cost determined by the weighted-average method.
(2) Valuation basis and methods for inventories
Finished goods and work in process
Stated at cost determined by the weighted-average method (the carrying amounts in the nonconsolidated balance sheet are calculated by the method in which carrying amounts are written
down due to a decline in profitability of assets)
Raw materials and supplies
Stated at cost determined by the first-in, first-out method (the carrying amounts in the nonconsolidated balance sheet are calculated by the method in which carrying amounts are written
down due to a decline in profitability of assets)
2. Depreciation methods for non-current assets(1) Property, plant and equipment
The straight-line method is applied.
Major useful lives are as follows:
Buildings

10 to 38 years

Machinery and equipment

9 years(2) Intangible assets
The straight-line method is applied.
For software for internal use, the straight-line method based on the estimated usable period (fiveyears) in the Company is applied.
3. Recognition of reserves(1) Allowance for doubtful accounts
To cover losses from bad debts for trade receivables, loans, etc., allowance for doubtful accounts isprovided in the amount expected to be uncollectible based on historical experience of bad debts forgeneral receivables and individual collectability for specific receivables such as doubtful receivables.
(2) Provision for bonuses
To prepare for bonus payments to employees, provision for bonuses is provided based on theestimated amount of payments.
103

(3) Provision for retirement benefits
To prepare for payment of retirement benefits to employees, provision for retirement benefits isprovided based on the estimated amounts of retirement benefit obligations and plan assets at the endof the fiscal year under review.
1) Method of attributing expected retirement benefits to periods
In calculation of retirement benefit obligations, the benefit formula basis is applied to attributeexpected retirement benefits to periods up to the end of the fiscal year under review.
2) Amortization of actuarial gains or losses and past service cost
Past service cost is amortized on a straight-line basis from the fiscal year in which the cost
occurred over a period equal to or less than the average remaining service period of eligible
employees (five years) at the time of occurrence.
Actuarial gains or losses are amortized by the declining-balance method from the fiscal year inwhich the gains or losses occurred over a period equal to or less than the average remaining
service period of eligible employees (18 years) at the time of occurrence in each fiscal year.
4. Other significant matters for preparing financial statements(1) Accounting for retirement benefits
Accounting treatment for unrecognized actuarial gains or losses and unrecognized past service costfor retirement benefits are different from accounting treatment for them in the consolidated financial
statements.

1044) Supplementary statements[Detailed schedule of property, plant and equipment and others](Millions of yen)
Balance at
beginning of
periodIncrease in
the period

Decrease in
the period

Depreciation
during theperiodBalance at
end of period

Accumulated
depreciation

Category

Type of assets

Property,plant andequipment,
buildings

Buildings

3,962

260

22

340

3,860

6,414

Structures

435

52

1

83

402

1,172

Machineryandequipment

3,748

1,267

184

908

3,922

17,949Vehicles

25

12

0

7

30

136

Tools,
furniture andfixtures

443

448

8

198

685

4,897

5,327

–

987
[987]

–

4,340

–

Construction
work-inprogress

576

2,629

1,346

–

1,859

–

Land

Intangible
assetsTotal

14,519

4,670

2,550

1,537

15,101

30,569Software

111

43

–

38

115

209

Softwarework-inprogress

653

623

6

–

1,269

–

Other

5

–

–

0

5

2

769

666

6

39

1,390

212

Total
(Note 1)
(Note 2)

The figure in brackets in the “Decrease in the period” column, which shows the number included in the figure
outside the brackets, represents the amount of impairment loss recorded in the fiscal period.
Principal increases and decreases in the period are as follows:[Increase]
Buildings

Hamakita Factory

Solar power generating equipment¥132 million

Machinery and equipment

R&D Division

Testing and measuring instruments¥397 million

Suzuka Factory

Manufacturing facilities forclutches¥238 million

Hamakita Factory

New establishment of Hamakita
Factory

Ryuyo Factory

Impairment loss in accordance withthe accounting standard for
impairment loss of non-current
assetsConstruction work-inprogress¥1,198 million[Decrease]Land¥987 million[Detailed schedule of allowances]
Category
Allowance for
doubtful accounts
Provision for bonuses

Balance at beginning of
periodIncrease in the period

Decrease in the period

33

16

4

46

1,149

1,157

1,149

1,157

105

Balance at end of
periodOpinion of independent auditors
Auditors: Yasumori Audit Corporation
Opinion: unqualified

106

VI. Overview of operational procedures for shares of the reporting company
Fiscal year

From April 1 to March 31

Annual General Meeting of
Shareholders

June

Record date

March 31

Record dates for dividends ofsurplus

September 30
March 31

Number of shares per share unit

100 shares

Purchase of shares less than one
unit
Office for handlingbusiness
Shareholder register
administrator
Forwarding officeHandling charge for purchase(Special account)
1-2-1 Yaesu, Chuo-ku, Tokyo
Securities Agent Department, Head Office, Mizuho Trust & Banking Co., Ltd.
(Special account)
1-2-1 Yaesu, Chuo-ku, Tokyo
Mizuho Trust & Banking Co., Ltd.
—The amount separately stipulated as the amount equivalent to share brokerage fees

Method of public noticeElectronic public notice will be made. However, if it is impossible to publish public
notices electronically because of an accident or other unavoidable circumstances, thepublic notices shall be made by publication in the Nihon Keizai Shimbun.
The Company’s URL for public notice: http://www.fcc-net.co.jp/

Special benefits for shareholders• Content of the shareholder special benefit plan
Regional goodies worth ¥2,500 are offered to each shareholder holding 200 shares ormore who is on the list of shareholders as of March 31 and September 30 every year.

Note: Pursuant to the provision of the Company’s Articles of Incorporation, the Company’s shareholders may not exercise
any right, in relation to their holding shares less than one unit, other than rights set forth in each item of Article 189,
paragraph 2 of the Companies Act.

107