CONSOLIDATED FINANCIAL STATEMENTSFURUKAWA ELECTRIC CO., LTD. AND
SUBSIDIARIESMarch 31, 2020 and 20191

CONSOLIDATED BALANCE SHEETSFURUKAWA ELECTRIC CO., LTD. AND
SUBSIDIARIESAt March 31, 2020 and 2019

Millions of yen
2020
2019
ASSETS
Current assets:
Cash and bank deposits (Note 4)
Marketable securities (Note 5)
Notes and accounts receivable
Inventories (Note 6)
Other current assets
Allowance for doubtful accounts
Total current assets

Thousands of
U.S. dollars(Note 3)2020

54,357 \899
192,513
115,862
23,801(1,254)
386,179

44,628 $2,371
219,347
122,890
32,365(1,090)420,513503,306
8,324
1,782,528
1,072,796
220,380(11,611)3,575,731

Property, plant and equipment
Land
Buildings
Machinery and equipment
Leased assets
Right-of-use assets
Construction in progress
Total
Accumulated depreciation
Net property, plant and equipment

36,354
229,611550,564
1,261
10,93434,529863,256(609,037)
254,219

36,777
216,932
539,225
3,444
36,444
832,823(603,463)
229,360

336,6112,126,028
5,097,815
11,676
101,241
319,713
7,993,111(5,639,231)
2,353,880

Investments and other assets:
Investments and long-term loans (Notes 5 and 7)
Deferred tax assets (Note 15)
Asset for retirement benefits (Notes 2g and 9)
Other non-current assets
Allowance for doubtful accounts
Total investments and other assets

109,310
14,726
5,899
25,346(1,065)
154,217

127,141
13,644
5,633
22,898(1,172)
168,148

1,012,130
136,352
54,620234,685(9,861)
1,427,935

Total

\

\

2

794,616\

818,021$7,357,556

Thousands of
U.S. dollars(Note 3)2020

Millions of yen
2020
2019
LIABILITIES AND NET ASSETS
Current liabilities:
Short-term debt (Note 8)
Commercial paper (Note 8)
Notes and accounts payable
Accrued income taxes
Provision for product defectcompensation (Note 2h)
Other current liabilities
Total current liabilities
Long-term liabilities :Bonds (Note 8)Long-term debt (Note 8)
Liability for retirement benefits (Notes 2g and 9)
Provision for environmental costs (Note 2i)
Asset retirement obligations
Deferred tax liabilities (Note 15)
Other long-term liabilities
Total long-term liabilities\

110,515
15,000111,586
2,785\

106,710
131,422
3,893$-

1,023,287
138,889
1,033,204
25,787

17,711
62,048319,647

28,40061,193331,621

163,991
574,519
2,959,694

30,00095,57353,460
10,396
1,304
391
10,811201,937

20,000119,298
47,731
10,691
1,246
1,547
5,972
206,488

277,778
884,935
495,000
96,25912,074
3,620
100,1021,869,787

69,39522,787
165,101

69,39522,535
151,744642,546
210,991
1,528,713(598)
256,685(600)
243,074(5,537)
2,376,713

10,95021,788101,389(1,691)(12,810)(12,853)(16,405)
32,750124(8,391)(8,937)
4,584
32,252(15,657)(118,611)(119,009)(151,898)
303,241

Contingent liabilities (Note 11)
Net assets
Shareholders' equity (Note 10)
Common stock
Authorized shares,
250,000 thousand in 2020 and 2019
Issued shares,
70,666 thousand in 2020 and 2019
Capital surplus
Retained earnings
Common treasury stock, at cost
49,400 in 2020
48,900 in 2019
Total shareholders' equity
Accumulated other comprehensive income
Unrealized gain on
available-for-sale securities (Note 5)
Deferred gain (loss) on derivatives
under hedge accounting (Note 2c)
Adjustments for retirement benefits
Foreign currency translation adjustments
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total

\

273,030
794,616\

See accompanying notes to consolidated financial statements.

3279,911
818,021$2,528,056
7,357,556

CONSOLIDATED STATEMENTS OF INCOMEFURUKAWA ELECTRIC CO., LTD. AND
SUBSIDIARIESFor the years ended March 31, 2020 and 2019

Net sales
Cost of sales (Notes 6 and 12)Gross profit
Selling, general and administrative
expenses (Note 12)
Operating income
Other income (expenses):
Interest and dividend income
Interest expense
Foreign exchange loss, net
Equity in income of non-consolidated
subsidiaries and affiliates
Gain on sales of investment securities
Gain on disposal of property, plant andequipment
Loss on disposal of property, plant andequipment
Impairment loss on investment securities
Restructuring costs
Loss on disaster
Other, net
Profit before income taxes
Income taxes (Note 15) :Current
Deferred
Total income taxes
Profitattributable to non-controlling interests
attributable to owners of parent\\

Millions of yen
2020
2019
914,439\
991,590764,200
824,481150,239
167,108

Thousands of
U.S. dollars(Note 3)2020$
8,467,028
7,075,926
1,391,102

126,674
23,565

126,266
40,842

1,172,907
218,194

2,652(4,326)(1,014)3,373(4,075)(1,100)24,556(40,056)(9,389)

2,458
7,494

1,685
4,952

22,75969,389

5,848

3,779

54,148(798)(1,102)(931)(958)(2,136)30,751(2,779)(168)(34)(10,718)
35,757(7,389)(10,204)(8,620)(8,870)(19,778)
284,731

7,793
3,960
11,75418,997
1,357
17,6398,811(5,500)3,310
32,446
3,338
29,10872,15736,667
108,833
175,898
12,565
163,324\$

U.S. dollars

Yen

Per share of common stock( Notes 2p and 17)
Basic profit
Diluted profit
Cash dividends applicable to the year\\\

250.25
85.00

\
\
\

See accompanying notes to consolidated financial statements.

4412.98
85.00

$
$
$

2.32
0.79

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOMEFURUKAWA ELECTRIC CO., LTD. AND
SUBSIDIARIESFor the years ended March 31, 2020 and 2019
Thousands of
U.S. dollars(Note 3)2020

Millions of yen
2020
2019
Profit\Other comprehensive income
Unrealized gain (loss) on available-for-salesecurities
Deferred gain (loss) on derivatives under hedge
accounting
Adjustments for retirement benefits (Notes 2g and 9)
Foreign currency translation adjustments
Share of other comprehensive income of affiliates
accounted for by the equity method
Total other comprehensive income (Note 16)
Total comprehensive income
Attributable to :Owners of parent
Non-controlling interests

18,997\$

175,898(10,119)(8,055)(93,694)(1,604)(3,942)(3,905)733(1,787)(2,792)(14,852)(36,500)(36,157)\(1,485)(21,058)(2,060)\(1,408)(13,309)
19,137 $(13,750)(194,981)(19,074)\\(3,272)
1,211\\

16,1942,943(30,296)
11,213

See accompanying notes to consolidated financial statements.

532,446$$

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETSFURUKAWA ELECTRIC CO., LTD. AND
SUBSIDIARIES(For the year ended March 31, 2020)

Balance at March 31, 2019
Cash dividends paid
Profit attributable to owners of parent
Net effect of increase in consolidated
subsidiaries
Net effect of increase in an affiliated company
accounted for by the equity method due tochange in scope of equity method
Acquisition of treasury stock
Disposal of treasury stock
Net effect of change in parent's equity
due to transaction with non-controlling interests
Net change in items other than thosein shareholders' equity
Net change during the year
Balance at March 31, 2020

Thousands
Number ofshares ofCommon stock
outstanding
70,486

Millions of yen
Shareholders' equity
Commonstock\
69,395-\

Capitalsurplus22,535
-

-

128

-

(0)
1

1
70,487

Balance at March 31, 2019
Cash dividends paid
Profit attributable to owners of parent
Net effect of increase in consolidated
subsidiaries
Net effect of increase in an affiliated company
accounted for by the equity method due tochange in scope of equity method
Acquisition of treasury stock
Disposal of treasury stock
Net effect of change in parent's equity
due to transaction with non-controlling interests
Net change in items other than thosein shareholders' equity
Net change during the year
Balance at March 31, 2020\

69,395

\

-

1,160

-

(2)
4

688
(2)
4

-

-

123

\

688

123

-

Total
shareholders'equity\243,074(6,002)
17,639

1,031

-

-

Commontreasury
stock
(600)
-

Retainedearnings\ 151,744(6,002)
17,639252
22,787\

13,356
165,101

1
(598)

\

\

13,611
256,685

Millions of yen
Accumulated other comprehensive income
Adjustment
Foreign
Total
for retirement
currency
accumulated othertranslation
comprehensive
benefits(Note 9)adjustments
income124\(8,391) \(8,937) \4,584-

Unrealized
gain onavailable-forsale securities\
21,788-Deferred gain (loss)
on derivatives
under hedge
accounting

-

-

-

-

-

-

1,160

-

-

-

-

-

-

688
(2)
4

\

\

-

-

-

-

-

(10,838)(10,838)
10,950(1,816)(1,816)(1,691)(4,419)(4,419)(12,810)(3,915)(3,915)(12,853)(20,989)(20,989)(16,405)

\

\

\

\

\

Non-controllinginterests
32,252
-

\

-

\

497
497
32,750Total net
assets279,911(6,002)
17,639123\(20,492)(6,880)273,030

Thousands of U.S. dollars (Note 3)
Shareholders' equity

Commonstock
Balance at March 31, 2019
Cash dividends paid
Profit attributable to owners of parent
Net effect of increase in consolidated
subsidiaries
Net effect of increase in an affiliated company
accounted for by the equity method due tochange in scope of equity method
Acquisition of treasury stock
Disposal of treasury stock
Net effect of change in parent's equity
due to transaction with non-controlling interests
Net change in items other than thosein shareholders' equity
Net change during the year$

Balance at March 31, 2020$

Capitalsurplus642,546$

208,657

-

-

-

$

2,333

123,667

210,991$ 1,528,713

Total
shareholders'equity(5,556)-$2,250,685(55,574)
163,324-

10,741

-

(19)
37

6,370
(19)
37

-

-

1,139

-

-

6,370

1,139

-

$

9,546

-

-

642,546$ 1,405,037(55,574)
163,324

1,185-

CommonTotal
treasurystock
equityRetainedearnings-

9$126,028(5,537)$

2,376,713

Thousands of U.S. dollars (Note 3)

Balance at March 31, 2019
Cash dividends paid
Profit attributable to owners of parent
Net effect of increase in consolidated
subsidiaries
Net effect of increase in an affiliated company
accounted for by the equity method due tochange in scope of equity method
Acquisition of treasury stock
Disposal of treasury stock
Net effect of change in parent's equity
due to transaction with non-controlling
Net change in items other than thosein shareholders' equity
Net change during the year
Balance at March 31, 2020

Accumulated other comprehensive income
Unrealized Deferred gain (loss)
Adjustment
Foreign
gain onon derivatives
for retirement
currency
available-forunder hedgetranslation
benefits
sale securities
accounting(Note 9)adjustments$ 201,741$
1,148$(77,694) $(82,750)
-

$

Total
accumulated othercomprehensive
income$42,444-$Non-controllinginterests
298,630-$

Total net
assets2,591,769(55,574)
163,324

-

-

-

-

-

-

10,741

-

-

-

-

-

-

6,370
(19)
37

-

-

-

-

-

-

1,139

(100,352)(100,352)
101,389$(16,815)(16,815)(15,657)

See accompanying notes to consolidated financial statements.

6$(40,917)(40,917)(118,611)$(36,250)(36,250)(119,009)$(194,343)(194,343)(151,898)

$

4,602
4,602
303,241$(189,741)(63,704)
2,528,056

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETSFURUKAWA ELECTRIC CO., LTD. AND
SUBSIDIARIES(For the year ended March 31, 2019)

Balance at March 31, 2018
Cash dividends paid
Profit attributable to owners of parent
Net effect of increase in consolidated
subsidiaries
Net effect of decrease in an affiliated company
accounted for by the equity method due tochange in scope of equity method
Acquisition of treasury stock
Disposal of treasury stock
Net effect of change in parent's equity
due to transaction with non-controlling interests
Net change in items other than thosein shareholders' equity
Net change during the year
Balance at March 31, 2019

Thousands
Number ofshares ofCommon stock
outstanding
70,481Millions of yen
Shareholders' equity

(0)
5

5
70,486

Balance at March 31, 2018
Cash dividends paid
Profit attributable to owners of parent
Net effect of increase in consolidated
subsidiaries
Net effect of decrease in an affiliated company
accounted for by the equity method due tochange in scope of equity method
Acquisition of treasury stock
Disposal of treasury stock
Net effect of change in parent's equity
due to transaction with non-controlling interests
Net change in items other than thosein shareholders' equity
Net change during the year
Balance at March 31, 2019

Capitalsurplus22,271-Retainedearnings\
128,130(5,649)29,108

Commontreasury
stock
\
(613)
-

Total
shareholders'equity\219,182(5,649)29,108

-

-

198

-

198

-

-

(43)
-

(1)
15

(43)
(1)
15

-

264

-

-

264

69,395264
22,53523,613
151,74413(600)

23,891
243,074

Commonstock\
69,395
-

\

\

\

\

\

\

Millions of yen
Accumulated other comprehensive income
Unrealized
Deferred gain (loss)
Adjustment
Foreign
Total
gain onon derivatives
for retirement
currency
accumulated otheravailable-forunder hedgetranslation
comprehensive
benefits
sale securities
accounting(Note 9)adjustments
income\30,020\(495) \
(6,525) \(5,664) \17,335-\

Non-controllinginterests\
35,552-\

Total net
assets272,071(5,649)29,108

-

-

-

-

-

-

198

-

-

-

-

-

-

(43)
(1)
15

-

-

-

-

-

-

264

(8,232)(8,232)
21,788

620
620
124

(1,866)(1,866)(8,391)(3,273)(3,273)(8,937)(12,750)(12,750)
4,584(3,300)(3,300)32,252(16,050)
7,840
279,911\\

See accompanying notes to consolidated financial statements.

7

\

\

\

\

CONSOLIDATED STATEMENTS OF CASH FLOWSFURUKAWA ELECTRIC CO., LTD. AND
SUBSIDIARIESFor the years ended March 31, 2020 and 2019

Cash flows from operating activities:
Profit before income taxes
Adjustments for:
Depreciation
Equity in income of non-consolidated
subsidiaries and affiliates
Gain on sales of marketable securities
and investment securities, net
Impairment loss on investment securities
Gain on disposal of property, plantand equipment, net
Impairment loss
Loss on disaster
Loss on write-down of inventories
Interest and dividend income
Interest expense
Foreign exchange gain, net
Decrease in trade receivable
Decrease (increase) in inventories(Decrease) increase in trade payable
Increase in liability for retirement benefits(Decrease) increase in provision for productdefect compensation
Other, net
SubtotalInterest and dividend income received
Interest expense paid
Income taxes paid
Loss on disaster paid
Net cash provided by operating activities\

Cash flows from investing activities:
Decrease in time deposits, net
Purchases of investment securities
Proceeds from sales and redemptionof investment securities
Proceeds from sales of investments in subsidiaries
resulting in change in scope of consolidation (Note 4)
Purchases of property, plant andequipment
Purchases of intangible assets
Proceeds from sales of non-current assets
Decrease in short-term loans, net
OtherNet cash used in investing activities

8

Millions of yen
2020
2019

Thousands of
U.S. dollars(Note 3)2020

30,75135,757＄ 284,731

29,423

26,271

272,435(2,458)(1,685)(22,759)(7,462)
1,102(4,954)
168(69,093)
10,204(5,050)623
958
388(2,652)
4,326(591)
23,4994,071(17,252)387(1,000)2,627
1,366(3,373)
4,075
(111)
1,196
(11,479)
6,009
2,165

(46,759)
5,769
8,870
3,593
(24,556)
40,056(5,472)
217,583
37,694(159,741)
3,583(10,667)
1,873
51,273
4,682(4,344)(8,952)(717)
41,942

5,785(7,549)55,271
4,732(4,152)(9,390)46,460(98,769)
17,343474,750
43,352(40,222)(82,889)(6,639)388,352

39(1,543)767(2,924)361(14,287)

10,916

9,051

101,074

\

-

1,829

-

(47,312)(6,550)
6,789
4,950

(43,053)(3,997)
5,515
2,182

(438,074)(60,648)
62,86145,833

(408)

(412)

(3,778)(33,119)(31,042)(306,657)

Thousands of
U.S. dollars(Note 3)2020

Millions of yen
2020
2019
Cash flows from financing activities:
Increase in short-term debt, net
Increase in commercial paper, net
Proceeds from long-term debt
Repayments of long-term debt
Proceeds from issue of bonds
Repayments of redemption of bonds
Proceeds from non-controlling shareholders
Payments for purchase of common treasury stock
Payments for purchase of common treasury stockby subsidiaries
Cash dividends paid
Cash dividends paid to non-controlling shareholders
Other
Net cash used in financing activities
Effect of exchange rate changes on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents of newly consolidated
subsidiaries
Cash and cash equivalents at end of year (Note 4)

\

1,735
15,0008,935(27,390)
10,000728(1)26,186(31,421)(10,000)(1)

16,065
138,889
82,731(253,611)
92,593
6,741
(9)

(151)
(5,998)(1,379)(8)(5,647)(2,291)(1,398)(55,537)(12,769)(1,649)
(171)

(372)
(19,414)(15,269)(1,583)

(928)
7,722
46,838853(3,142)49,758(8,593)71,500433,685

223
46,8384,574＄ 509,769

494
55,055

See accompanying notes to consolidated financial statements.

9

4,140

\

-

NOTES TO CONSOLIDATED FINANCIAL STATEMENTSFURUKAWA ELECTRIC CO., LTD. AND
ITS SUBSIDIARIES

1.

Basis of Presenting Consolidated Financial Statements
The accompanying consolidated financial statements of Furukawa Electric Co., Ltd. (the"Company") have been prepared in accordance with the provisions set forth in the Japanese
Financial Instruments and Exchange Act and its related accounting regulations and inaccordance with accounting principles generally accepted in Japan ("Japanese GAAP"), which
are different in certain respects as to the application and disclosure requirements ofInternational Financial Reporting Standards (“IFRS”).
In preparing these consolidated financial statements, certain reclassifications andrearrangements have been made to the consolidated financial statements issued domesticallyin order to present them in a form which is more familiar to readers outside Japan. In addition,certain reclassifications have been made in the 2019 consolidated financial statements toconform to the classifications used in 2020.
Japanese yen figures less than a thousand yen are rounded down to the nearest thousand yen,
except where otherwise indicated.

2.

Significant Accounting Policiesa) Basis of consolidation(1) The consolidated financial statements as of March 31, 2020, include the accounts of theCompany and its 112 (109 in 2019) significant subsidiaries (together, the "Group").
Under the control and influence concepts, those companies in which the Company, directly
or indirectly, is able to exercise control over operations are fully consolidated, and thosecompanies over which the Group has the ability to exercise significant influence areaccounted for by the equity method.
Investments in 13 (12 in 2019) unconsolidated subsidiaries and associated companies areaccounted for by the equity method.
Investments in the remaining unconsolidated subsidiaries and associated companies arestated at cost. If the equity method of accounting had been applied to the investments inthese companies, the effect on the accompanying consolidated financial statements would
not be material.
The excess of the cost of acquisition over the fair value of the net assets of an acquired
subsidiary at the date of acquisition is amortized over a period of 20 years.
10All significant intercompany balances and transactions have been eliminated inconsolidation. All material unrealized profit included in assets resulting from transactions
within the Group is also eliminated.
(2) Fiscal year-end of the consolidated subsidiaries
There are 50 subsidiaries' fiscal year-ends differ from that of the Company due to local
statutory requirements. Those 50 subsidiaries' fiscal year-end is December 31 and theCompany makes necessary adjustments if there are any significant transactions. There
have been no significant transactions, which would materially affect the Company's
financial position and results of operations, with such subsidiaries during the period fromtheir closing date to March 31.
(3) Unification of Accounting Policies Applied to Foreign Subsidiaries for the Consolidated
Financial Statements
Under Accounting Standards Board of Japan ("ASBJ") Practical Issues Task Force("PITF") No. 18, "Practical Solution on Unification of Accounting Policies Applied toForeign Subsidiaries for the Consolidated Financial Statements," the accounting policies
and procedures applied to a parent company and its subsidiaries for similar transactions
and events under similar circumstances should in principle be unified for the preparationof the consolidated financial statements. However, financial statements prepared byforeign subsidiaries in accordance with either International Financial ReportingStandards or generally accepted accounting principles in the United States of America(Financial Accounting Standards Board Accounting Standards Codification) tentatively
may be used for the consolidation process, except for the following items that should be
adjusted in the consolidation process so that net income is accounted for in accordance withJapanese GAAP, unless they are not material: (a) amortization of goodwill; (b) scheduled
amortization of actuarial gain or loss of pensions that has been recorded in equity throughother comprehensive income; (c) expensing capitalized development costs of R&D; and (d)cancellation of the fair value model of accounting for property, plant and equipment andinvestment properties and incorporation of the cost model of accounting.
(4) Unification of Accounting Policies Applied to Foreign Associated Companies for the
Equity Method
ASBJ Statement No. 16, "Accounting Standard for Equity Method of Accounting forInvestments," requires adjustments to be made to conform the associate's accounting
policies for similar transactions and events under similar circumstances to those of theparent company when the associate's financial statements are used in applying the equity
method, unless it is impracticable to determine such adjustments. In addition, financial
statements prepared by foreign associated companies in accordance with either
International Financial Reporting Standards or generally accepted accounting principles
in the United States of America tentatively may be used in applying the equity method if
the following items are adjusted so that net income is accounted for in accordance withJapanese GAAP, unless they are not material: (a) amortization of goodwill; (b) scheduled
amortization of actuarial gain or loss of pensions that has been recorded in equity throughother comprehensive income; (c) expensing capitalized development costs of R&D; and (d)cancellation of the fair value model of accounting for property, plant and equipment andinvestment properties and incorporation of the cost model of accounting.

11b) Cash and cash equivalents
Cash and cash equivalents in the consolidated statements of cash flows are composed of
cash on hand, bank deposits capable of being withdrawn on demand and short-term
investments with an original maturity of three months or less and subject to a minor riskof fluctuation in value.
c) Financial instruments(1) Debt and equity securities
Debt securities for which the Company and its consolidated subsidiaries have both thepositive intent and ability to hold to maturity are classified as “held-to-maturity debt
securities” and mainly carried at amortized cost. Securities other than held-to-maturity
debt securities and investments in equity securities of non-consolidated subsidiaries andaffiliates are classified as “available-for-sale securities” and carried at fair value withunrealized gain and loss, net of tax, reported as a separate component of net assets. For
computing gain and loss on securities sold, the cost of these securities is determined using
the moving average method. Securities that do not have readily determinable fair values
are recorded at cost. For other-than-temporary declines in fair value, investment securities
are reduced to net realizable value by a charge to income. The Company and its
consolidated subsidiaries do not hold any trading securities.
Debt securities due within one year are presented as “Marketable securities” under current
assets, and all other securities are presented as “Investments and long-term loans” in theaccompanying balance sheets.
Additional information with respect to marketable debt and equity securities is includedin Note 5.
(2) Derivatives and Hedging Activities
The Group uses derivative financial instruments to manage its exposures to fluctuations
in foreign exchange, interest rates and prices. Foreign exchange forward contracts,
currency swap, interest rate swaps and forward contracts for metal materials are utilized
by the Group to reduce foreign currency exchange and interest rate risks and pricefluctuation risk of raw materials. The Group does not enter into derivatives for trading or
speculative purposes.
Derivative financial instruments are classified and accounted for derivatives used forhedging purposes, if such derivatives qualify for hedge accounting because of highcorrelation and effectiveness between the hedging instruments and the hedged items,
gains or losses on derivatives are deferred until maturity of the hedged transactions.
Foreign currency forward contracts employed to hedge foreign exchange exposures forexport sales and purchases are measured at fair value and the unrealized gains/losses arerecognized in income.
Forward contracts applied for forecasted (or committed) transactions used are alsomeasured at fair value but the unrealized gains/losses are deferred until the underlying
transactions are completed.
Trade receivable and trade payable denominated in foreign currencies for which foreign

12exchange forward contracts are used to hedge the foreign currency fluctuations istranslated at the contracted rate if the forward contracts qualify for hedge accounting.
Long-term debt denominated in foreign currencies for which currency swap are used tohedge the foreign currency fluctuations is translated at the contracted rate if the forward
contracts qualify for hedge accounting. Also, those long-term debt with interest rate swaps
which qualify for hedge accounting and meet specific matching criteria are not remeasured
at market value but the differential paid or received under the swap agreements is
recognized and included in interest expense.
Additional information on derivatives is presented in Note 18.
d) Inventories
Inventories are stated principally at cost determined using the average method, which
requires the amount of the inventories on the balance sheets be written down when there
is a decrease in profitability.
e) Allowance for doubtful accounts
Allowance for doubtful accounts is provided at the amount of estimated non-recoverable
receivables on an individual account basis, plus the amount calculated by applying thehistorical bad debt loss ratios to the remaining receivables.
f) Property, plant and equipment
Property, plant and equipment, including significant capital expenditures and additions,
are stated at cost. Repairs and maintenance expense are charged to income as incurred.
Properties except for leased assets are depreciated principally using the straight-line
method.
g) Retirement benefits
Employees who terminate their service with the Company or its domestic consolidated
subsidiaries are entitled to lump-sum severance indemnities determined based on
accumulated points allocated to employees each year according to their job classificationand performance. The liability for these severance indemnities is not funded.
The retirement benefit plans of the Company and its domestic consolidated subsidiaries
have features whereby employees who retire at age 55 or over with 20 or more years ofservice may elect to receive benefits in the form of pensions. These plans, which are noncontributory and funded, generally provide for an annuity payable over a ten-year period
subsequent to retirement. The annual contributions for pension benefits include current
service costs, amortization of prior service costs and interest on the unfunded portion of
past service costs.
The Company and its domestic consolidated subsidiaries recognize retirement benefits
based on the estimated amounts of projected benefit obligation reduced by the fair value ofthe pension plan assets at each fiscal year-end.
The retirement benefit obligation for employees is attributed to each period by the benefit
formula method.
Prior service cost is being amortized as incurred by the straight-line method over periods(mainly 1 year through 10 years), which are shorter than the average remaining years of13

service of the employees.
Actuarial gain or loss is amortized in the year following the year in which the gain or loss
is recognized primarily by the straight-line method over periods (mainly 1 year through 10
years), which are shorter than the average remaining years of service of the employees.
Unrecognized actuarial gain or loss and unrecognized prior service cost are recorded as
adjustments for retirement benefits in accumulated other comprehensive income within
net assets after adjusting for tax effects.
A minimum pension liability adjustment is required for the Company’s consolidated
subsidiaries in the U.S., generally when the accumulated benefit obligation exceeds plan
assets under U.S. GAAP. The minimum liability adjustment, less allowable intangible
assets, is directly charged to retained earnings, net of tax benefit, in the accompanying
consolidated financial statements.
Certain consolidated subsidiaries use a simplified method for calculating retirement
benefit expenses and liabilities based on the assumption that the benefits payable, which
are calculated as if all eligible employees voluntarily terminated their employment at fiscal
year-end, approximates the retirement benefit obligation at year-end.
h) Provision for product defect compensation
Provision for product defect compensation is provided at an amount deemed necessary tocover possible compensation costs.
i) Provision for environmental costs
Provision for environmental costs, mainly to remove Poly Chlorinated Biphenyl (“PCB”)
and to improve soil conservation, is provided to cover estimated future costs.
j) Research and development costs, and computer software
Research and development expenditure is charged to income when incurred. Expenditure
relating to computer software developed for internal use is charged to income whenincurred, except when it contributes to the generation of income or to future cost savings.
Such expenditure is capitalized as an asset and amortized using the straight-line method
over its estimated useful life of 5 years.
k) Leases
Finance lease transactions are capitalized by recognizing lease assets and lease obligationsin the balance sheet.
Depreciation of finance lease assets that transfer ownership of the assets is calculated by
the same method applied for property, plant and equipment.
Depreciation of finance lease assets, that do not transfer ownership of the assets, at theend of the lease term, mainly machinery and equipment, and vehicles, is calculated by thestraight-line method over the lease periods, which are deemed as the useful lives, assuming
no residual value.
All other leases are accounted for as operating leases.
Right-of-use assets are depreciated on a straight-line basis over the shorter of theirestimated useful lives and lease terms.

14l) Construction Contracts
Construction revenue and construction costs are recognized by the percentage-ofcompletion method if the outcome of a construction contract can be estimated reliably.
When total construction revenue, total construction costs and the stage of completion of
the contract at the balance sheet date can be reliably measured, the outcome of aconstruction contract is deemed to be estimated reliably. If the outcome of a construction
contract cannot be reliably estimated, the completed-contract method should be applied.
When it is probable that the total construction costs will exceed total construction revenue,
an estimated loss on the contract should be immediately recognized by providing for a loss
on such construction contracts.
m) Income taxes
The provision for income taxes is computed based on the pretax income included in the
consolidated statement of income.
Deferred income taxes are recognized to reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting purposes andthe amounts used for income tax purposes, and measured using the enacted tax rates andlaws, which will be in effect when differences are expected to reverse.
The Company has elected to file its tax return under the consolidated tax filing system.
As for the items subjected to the transition to the group tax sharing system establishedunder the “Act on Partial Revision of the Income Tax Act, etc.” (Act No. 8 of 2020), as wellas the items reviewed under the non-consolidated taxation system in conjunction with thetransition to the group tax sharing system, domestic consolidated companies excluding a
few exceptions have not adopted the provisions of Paragraph 44 of the “Implementation
Guidance on Tax Effect Accounting” (ASBJ Guidance No. 28, issued on February 16, 2018)
in accordance with the treatment under Paragraph 3 of the “Practical Solution on theTreatment of Tax Effect Accounting for the Transition from the Consolidated Taxation
System to the Group Tax Sharing System” (PITF No. 39, issued on March 31, 2020). The
amounts of deferred tax assets and deferred tax liabilities are calculated based on theprovisions of the Income Tax Act before the revision.
n) Translation of foreign currency accounts
Current and non-current monetary items denominated in foreign currencies are translated
into Japanese yen at exchange rates in effect at the respective balance sheet dates.
Monetary items denominated in foreign currencies, for which foreign exchange forward
contracts are used to hedge the foreign currency fluctuation, are translated into Japanese
yen at the contracted rates. Exchange gain or loss is credited or charged to current
operations.
The Company translates the revenue and expense accounts of the overseas consolidated
subsidiaries and affiliates accounted for by the equity method at the average rates of
exchange in effect during the year. The balance sheet accounts except for the components
of net assets excluding non-controlling interests in the overseas consolidated subsidiaries
and affiliates accounted for by the equity method, are translated into Japanese yen at therates of exchange in effect at the respective balance sheet date. The components of net
assets excluding non-controlling interests in the overseas consolidated subsidiaries and15

affiliates accounted for by the equity method are translated at their historical exchange
rates. Differences arising from translation where two exchange rates have been used arepresented under translation adjustments and non-controlling interests as a component of
net assets.
o) Impairment of property, plant and equipment
Property, plant and equipment are periodically reviewed for impairment whenever eventsor changes in circumstances indicate that the carrying amount of an asset may not berecoverable. An impairment loss shall be recognized in the statements of income by
reducing the carrying amount of impaired assets or a group of assets to the recoverable
amount, to be measured as the higher of net selling price or value in use.
Accumulated loss of impairment is deducted directly from the acquisition costs of therelated assets in accordance with the revised disclosure requirements.
p) Per Share Information
Basic net income per share is computed by dividing net income attributable to commonshareholders by the weighted-average number of common shares outstanding for theperiod, retroactively adjusted for stock splits.
Diluted net income per share is not presented as the effect of including potential commonshares is anti-dilutive.
Cash dividends per share presented in the accompanying consolidated statement of income
are dividends applicable to the respective fiscal years, including dividends to be paid after
the end of the year.
q) Accounting change
Consolidated subsidiaries outside Japan adopting IFRS have adopted IFRS 16 “Leases”
from the beginning of the fiscal year under review. In applying IFRS 16, the cumulative
effect of applying this standard is recognized at the date of initial application inaccordance with the transitional treatment of the standard.
Accordingly, “Right-of-use assets” and lease obligations are recognized in all leases inprinciple, for lease transactions as lessees. Certain assets included in “Other non-current
assets” were reclassified to “Right-of-use assets”.
As a result, the ending balances of“Right-of-use assets”, “Accumulated depreciation”,“Other current liabilities” and “Other long-term liabilities” for the fiscal year ended March
31, 2020 increased by ¥10,934 million ($101,241 thousand), ¥2,826 million ($26,167
thousand), ¥1,268 million ($11,741 thousand) and ¥5,784 million ($53,556 thousand),
respectively. In addition, “Other non-current assets” decreased by ¥759 million ($7,028
thousand).
The application of IFRS 16 had a immaterial impact on earnings and per-share information
for the fiscal year ended March 31, 2020.
In Consolidated Statement of Cash flows, cash flows from operating activities increased by¥1,502 million ($13,907 thousand), as cash flows from financing activities decreased by¥1,502 million ($13,907 thousand).

16r) Standards issued but not yet effective(1) The Company and its consolidated subsidiaries(a) Accounting Standard for Revenue Recognition (ASBJ Statement No 29)
Implementation Guidance on Accounting Standard for Revenue Recognition (ASBJ
Guidance No.30)(i) Overview
The International Accounting Standard Board (“IASB”) and the Financial
Accounting Standard Board (“FASB”) jointly developed comprehensive accounting
standard for revenue recognition and the Revenue from Contracts with Customers
was issued in May 2014, (IFRS No.15 by IASB and Topic 606 by FASB).
IFRS No.15 was applied for annual reporting periods beginning on or after January
1, 2018, Topic 606 was also applied from annual reporting periods beginning
December 15, 2017. Based on such a situation, the ASBJ developed thecomprehensive accounting standard for revenue recognition/the implementation
guidance and issued them together.
On the ASBJ’s basic policy for development of accounting standard for revenue
recognition, the basic principles of IFRS No.15 were incorporated into the ASBJ
Statement No.29 as a starting points, the Statement was set out, from the view pointof comparability among financial statements, which is one of merits for consistency
with IFRS No.15. If there are any items which should be considered in current
practices in Japan, alternative treatments are added to the extent to not losing thecomparability.
(ii) Schedule date of adoption
This standard will be applied from the beginning of the accounting reporting period
for the year ending March 31, 2022.
(iii) Impact of adoption of accounting standard and implementation guidance
The effect amount is currently being evaluated in preparing its consolidated
financial statements.
(b) Accounting Standard for Disclosures of Accounting Estimates (ASBJ Statement No31)(i) Overview“Sources of estimation uncertainty” (the “Source”) is required to be disclosed under
IAS 1 “Presentation of Financial Statements”, paragraph 125, which was issued by
IASB in 2003. Comment providers requested ASBJ to include an additional
requirement for disclosure of the Source in notes to the financial statements, which
are useful for the users of the financial statements prepared under accounting
principles generally accepted in Japan.
As a result, ASBJ developed “Accounting Standard for Disclosures of Accounting
Estimates” (the “Disclosure Standard”) and published it.
When ASBJ developed this Disclosure Standard, a basic policy was set up, which isthat each note to the financial statements should not be described in detail, but
only the principle (purpose of disclosure) should be provided. Specific contents of thisprinciple should be determined by reference to the Company’s purpose of the17disclosure. The Disclosure Standard has been developed referring to IAS 1,
paragraph 125.
(ii) Schedule date of adoption
This standard will be applied from the year-end date of the accounting reporting
period for the year ending March 31, 2021.
(c) Accounting Standard for Accounting Policy Disclosures, Accounting Changes andError Corrections (ASBJ Statement No 24)(i) Overview
Standards Advisory Council requested ASBJ to improve footnote information
related to “accounting principle and procedure developed by management in theabsence of an accounting standard that specifically applies to a transaction”. As such,
ASBJ made necessary revisions of this standard and published it as “AccountingStandard for Accounting Policy Disclosures, Accounting Changes and Error
Corrections”.
In improving such footnote information, Business Accounting Principles
Interpretive Note 1-2 has continuously been applied in order not to effect anaccounting practice where an accounting standard specifically applied to atransaction is clearly be determined.
(ii) Schedule date of adoption
This standards will be applied from the year-end date of the accounting reporting
period for the year ending March 31, 2021.
(2) Overseas consolidated subsidiaries
Leases (US GAAP ASU 2016-02)(i) Overview
US GAAP generally requires the recognition of right-of-use assets and leaseliabilities for all leases on the financial statements.
(ii) Schedule date of adoption
This standard will be applied from the beginning of the accounting reporting period
for the year ending March 31, 2023.
(iii) Impact of adoption of accounting standard and implementation guidance
The Company is currently evaluating the impact of the adoption on this standard
on its consolidated financial statements.
s) Additional information(1) Board Benefit Trust
Based upon a resolution of the 194th Ordinary General Meeting of Shareholders on June27, 2016, the Company has introduced a Performance-Linked Stock Compensation System(Board Benefit Trust, hereafter the “BBT”) to a part of remuneration for the Directors
excluding the Outside Directors, and the Executive Officers other than the Directors andthe Senior Fellow (collectively the “Directors, etc.”) in order to make stronger linkage to18the Company’s business performance and contribute to higher corporate value on a
medium - to long-term basis.
(a) Overview
In accordance with the Stock Benefit Regulations for Executives (the “Regulation”),
previously set out by the Company, points are granted to the Directors, under the
BBT during their term in office and the number of shares equivalent to theaccumulated points that are granted at the time of their retirement, are provided
after adjusting down points linked to the Company’s business performance. If the
Directors, who receive the benefits meet the requirements of the Regulation, money
in an amount equivalent to a certain portion of those points granted to the Directors,
shall be provided to them instead of the Company’s shares.
The shares to be provided to the Directors, including the shares to be provided fortheir future services, have been acquired using monetary assets contributed
previously by the Company to the BBT. Those shares are managed separately as an
asset in BBT.
(b) Accounting treatment
The Gross method has been applied in accordance with “Practical Solution on
Transactions of Delivering the Company’s Own Stock to Employees etc. throughTrusts” (PITF No. 30 issued on March 26, 2015).
(c) The Company’s shares remaining in the BBTThe Company’s shares owned by the BBT are accounted for as treasury stock in the
Net assets section at book value recorded by the BBT (excluding acquisition-related
costs). The book value and the number of shares on treasury stock are ¥303 million($2,806 thousand) and 113,500 shares at March 31, 2020, and ¥307 million and
115,000 shares at March 31, 2019, respectively.
(2) Concerning Company Split (absorption-type split) Accompanying the Transfer of Heavy
Magnet Wire Business, and Transfer of Shares of Succeeding Company in Absorption-type
Split
The Company hereby resolved, as set forth below, that it has resolved at its meeting of theBoard of Directors held on September 26, 2019, to transfer (hereinafter referred to as the“Transfer”, and the “Transaction” as it relates to the combination with the transfer bySuperior Essex Holding Corp. (“SPSX”) business engaged in the development,
manufacturing, and sales of the heavy magnet wire business and polyimide tube (“PIT”)
conducted by the Company and its wholly-owned subsidiary, Furukawa Magnet Wire Co.,
Ltd. (“FMGW”) (collectively, the “Japanese Business”, and the business belonging toCompany, the “Furukawa Business”), as well as all shares issued by FE Magnet Wire
(Malaysia) Sdn. Bhd. (“FEMM”), which is a wholly-owned subsidiary of the Company, andall equity interest (49%) the Company has in Essex Furukawa Magnet Wire Europe GmbH(collectively with the Japanese Business, the “Business”), to a joint venture (newly
established company) Essex Furukawa Magnet Wire LLC (the“Joint Venture”) establishedwith SPSX via Furukawa Electric Magnet Wire America, Inc., which is a wholly-owned
subsidiary of the Company.
In addition, the Company resolved that the newly established wholly-owned Japanesesubsidiary (the “New Company”) will succeed the Japanese Business through anabsorption-type split method (collectively, the “Japanese Business Company Split”, andthe “Company Split” which results in the split of the Company), and concluded basic

19

agreement which provides the respective boards of directors of the Company and SPSX
have approved and the parties will conclude contribution agreement and joint ventureagreement (Collectively, the “Definitive Agreements”) regarding the Transaction on
September 27, 2019.
(a) Transaction Purpose
In its mid-term management plan “Furukawa G Plan 2020” formulated in 2016, theCompany positioned the infrastructure (communications solutions, energy) andautomotive fields and their united areas as priority segments and have worked tostrengthen our focus on these businesses and products. In addition, we have beenreviewing our overall business portfolio. As a result of the comprehensive
consideration of business synergies amongst the Company’s focus businesses /products and the Business, and the further enhancement of the competitiveness of
the Business, the Company will make a transfer to a joint venture with SPSX, awholly-owned subsidiary of Superior Essex Inc., (Atlanta, GA) which the Company
has been in a business partnership with for a significant amount of time, since weconsidered that a transfer to the Joint Venture with SPSX would contribute to thesustainable growth of the Business.
(b) Method of Company Split
An absorption-type Company Split in which the Company and FMGW are the Split
Company and the New Company is the Succeeding Company.
(c) Details of allocation related to the Absorption-type Company Split
The New Company will issue one share of common stock upon the Company Split
and allot all to the Company.
(d) Rights and Obligations transferred to the Succeeding Company
In accordance with the provisions of the absorption-type Company Split agreement
between the Company and the New Company, the New Company will inherit all of
the assets, liabilities, contractual statuses and associated rights and obligations
relating to the Company's business.
(e) The result of operation and the financial position of Furukawa Business to be
split (For the year ended March 31, 2020)
Net sales¥27,159 million ($251,472 thousand)Assets¥ 5,742 million ($ 53,167 thousand)Liabilities¥ 4,544 million ($ 42,074 thousand)Note: In addition to this company split, FMGW will contribute its business ofdevelopment, manufacturing, and sales of the heavy magnet wire business and PIT
to the New Company by absorption-type corporate split.
(f) Outline of Company Split

Company Name
Location

Split Company(Company)
Furukawa Electric Co.,Ltd.
2-3, Marunouchi 2chome, Chiyoda-ku,
Tokyo, Japan

20

Succeeding Company(New Company)
EFMJ Co., Ltd.
16-8, Uchikanda 2chome, Chiyoda-ku,
Tokyo , Japan

Name and title ofRepresentative
Business Description

Capital stock
Date of establishment

Keiichi Kobayashi,
President
Development,
manufacturing andsales of optical fiber
cables, power cables,
automotive wire
harnesses¥69,395 million($642,546 thousand)June 25, 1896

Mikinori Maekawa,
President
Development,
manufacturing, andsales of heavy magnet
wires and PIT¥1($0.01)
September 24, 2019(g) Situation after Company Split
The Company Split does not affect the Company's name, location, name/title ofrepresentative, business description, capital stock, and fiscal year end. New
company will operate the succeeded Furukawa Business after Company Split. In
addition, all issued shares of New Company will be transferred to FEMA and further
to the Joint Venture on the condition that Company Split takes effect.
What the Company transfers to the Joint Venture is all outstanding shares issued
by the New Company and FEMM and all equity interest (49%) held by the Company.
A capital contribution in kind is planned as a transfer method and shareholding
ratio of the Joint Venture (FEMA, SPSX) is 39% and 61%, respectively.
(h) Schedule
Board resolution
Execution of the Definitive
Agreements
Establishment of the New
Company
Date of execution of absorptiontype Company Split agreement
Effective date of absorption-type
Company Split
Transaction execution date(i) Overview of SPSX
Name
Location
Name and title of representative
Business description
Relationship between theconcerned companies

September 26, 2019
December 17, 2019
September 24, 2019
February 1, 2020
Scheduled for October 1,2020
Scheduled for October 1,2020
Superior Essex Holding Corp.
5570 Powers Ferry Road, NW,
Suite 300 Atlanta, GA 30327,
USA
Director Brian Kim
Holding company
The Company and SPSX do nothave any capital relations,personal relations, and business
relations to be stated.

(3) Accounting estimate (View on an effect of the novel coronavirus)(a) Items of the effect on its consolidated financial statements for the next fiscal year
21

out of those accounting estimates which have been recorded on its consolidated
financial statements
The novel coronavirus has had a large effect on the economy and corporate activities
and it is assessed that a material uncertainty is included in the Company’s future
plan prepared on the assumption of recoverability of deferred tax assets.
(b) Amounts reported in its consolidated financial statements for this fiscal year
Deferred tax assets ¥14,726 million ($136,352 thousand)(c) Other information for users of its consolidated financial statements in terms ofaccounting estimates(i) Calculation methods of amounts reported in its consolidated financial
statements for this fiscal year
Deferred tax assets are recorded based on future taxable income by estimating thefuture business plan.
(ii) Major assumptions to calculated amount reported in its consolidated financial
statements for this fiscal year
As for the impact of the novel coronavirus, there is no consensus on when the virus
will be contained. Although it is extremely difficult to forecast when economic
activity will return to normal and effect on the result of the Group, the Company
has developed a number of scenarios and evaluated them, taking into accountinformation from outside source. Certain assumptions were used by the Company
in order to come up with the best estimate using one of the scenarios analyzed. In
estimating the future taxable income, the Company used the assumption that thenovel coronavirus will be contained in September this year and economic activity
will return to normal for the next six months.
(iii) Effects on its consolidated financial statements for the next fiscal year
Uncertainties in future economic activities may impact the amount of estimatedfuture taxable income and schedule of temporary difference reversals. If theestimate of amount and such a schedule are different from actual, it is possible thatamounts of deferred tax assets will have material impact on its consolidated
financial statements for the next fiscal year and afterwards.
Therefore, major assumptions in (ii) above are based on the best estimate. However,there may be differences between the above estimates and the results, dependingon the situation of the future economic activity and situation of the novel
coronavirus.

3.

U.S. Dollar Amounts
The consolidated financial statements are stated in Japanese yen, the currency of the country
in which the Company is incorporated and operates. The translations of Japanese yen amountinto U.S. dollar amounts are included solely for the convenience of readers outside Japan and22have been made at the rate of ¥ 108 to $1, the approximate rate of exchange as of March 31,
2020. Such translations should not be construed as representations that the Japanese yenamounts could be converted into U.S. dollars at that or any other rate.

4.

Cash Flow Information(1) Cash and cash equivalents as of March 31, 2020 and 2019 consisted of:Millions of yen
2020
2019
Cash and bank deposits
Less, time deposits with an
original maturity of more than 3monthsHighly liquid securities
Cash and cash equivalents

Thousands
ofU.S. dollars
2020¥ 54,357¥ 44,628$ 503,306

（100)

(142)

(926)

799

2,352

7,398

¥ 55,055¥46,838$ 509,769(2) The followings are the summary of assets and liabilities which were transferred due tobusiness transfer(For the year ended March 31, 2020)
None(For the year ended March 31, 2019)
The following are the summary of FCM Corporation and costs of shares and proceeds fromsales of investments in the subsidiary.
Millions of yen

5.

Current assets

2019¥ 7,691

Non-current assets
Current liabilities
Non-current liabilities
Non-controlling interests
Gain on sale of shares of the subsidiary
Sales amount of those shares
Cash and cash equivalents
Proceeds from sales of those shares

4,552(5,431)(2,153)(2,084)293¥ 2,866(1,037)¥ 1,829

Debt and Equity Securities

23

Investments in debt and equity securities that have a readily determinable fair value as ofMarch 31, 2020 and 2019 included in “Marketable securities” (Current assets) and in“Investments and long-term loans” (Non-current assets) are summarized as follows:
Millions of yen
2020
Fair valueGrossunrealized
gain

Gross
unrealized
loss

¥ 798

¥ 798

¥ -

¥ -

99
¥ 898

100
¥ 898

0
¥ 0

¥ -

¥ 10,364
7¥ 10,372¥ 27,2146¥ 27,221¥ 16,966¥ 16,966¥ (117)(1)¥ (118)

Cost

Held-to-maturity debt securities:
Government bonds, municipal bonds
and other
Other debt securities
Total held-to-maturity debt securities
Available-for-sale securities:
Marketable equity securities
Other securities
Total available-for-sale securities

Thousands of U.S. dollars
2020

Held-to-maturity debt securities:
Government bonds, municipal bonds
and other
Other debt securities
Total held-to-maturity debt securities
Available-for-sale securities:
Marketable equity securities
Other securities
Total available-for-sale securities

Cost

Fair valueGrossunrealized
gain

Gross
unrealized
loss$ 7,389$ 7,389

$ -

$ -

917

926

0

-

$ 8,315$ 8,315$ 0$ -$ 95,963
65$ 96,037$ 251,981
56$ 252,046$ 157,093$ 157,093$ (1,083)(9)$ (1,093)

Millions of yen
2019
Cost

Fair valueGrossunrealized
gain

Held-to-maturity debt securities:
Government bonds, municipal bonds
and other¥ 2,370¥ 2,370¥ -¥-Other debt securities
Total held-to-maturity debt securities

99¥ 2,469101¥ 2,471

1
¥ 1

¥ -

Available-for-sale securities:
24

Gross
unrealized
lossMarketable equity securities
Other securities
Total available-for-sale securities¥ 13,913
0¥ 13,914¥ 45,4820¥ 45,483¥ 31,623¥ (53)--¥ 31,623¥ (53)

Proceeds from sales of available-for-sale securities for the years ended March 31, 2020 and2019 were ¥10,347 million ($95,806 thousand) and ¥6,660 million, respectively.
The gross realized gains on those sales for the years ended March 31, 2020 and 2019 were
¥7,492 million ($69,370 thousand) and ¥4,657 million, respectively. The gross realized losseson those sales for the year ended March 31, 2020 and 2019 were ¥65 million ($602 thousand)and zero, respectively.
Impairment loss on available-for-sale securities with fair value for the years ended March 31,
2020 and 2019 amounted to ¥1,102 million ($10,204 thousand) and ¥168 million, respectively.

6.

Inventories
Inventories as of March 31, 2020 and 2019 consisted of the following:
Millions of yen
2020
2019
Merchandise and finished goods
Work in process
Raw materials and supplies¥ 34,550
33,84947,462¥ 115,862¥ 40,169
36,95645,764¥ 122,890

Thousands of
U.S. dollars
2020$ 319,907
313,417439,463$ 1,072,796

The amounts of inventories for normal sales be written down due to a decrease of profitability
are ¥388 million ($3,593 thousand), and ¥1,366 million for the years ended March 31, 2020
and 2019, respectively, and are charged to cost of sales.

7.

Investments and Long-term Loans
Investments and long-term loans as of March 31, 2020 and 2019 consisted of the following:
Millions of yen
2020
2019
Non-consolidated subsidiaries
and affiliates
Other

8.

¥ 77,755
31,555¥ 109,310¥ 77,938
49,203¥ 127,141

Short-term Debt, Commercial paper, Bonds and Long-term Debt

25

Thousands of
U.S. dollars
2020$ 719,954
292,176$ 1,012,130

Short-term debt, commercial paper, long-term debt and bonds as of March 31, 2020 and 2019consisted of the following:Thousands ofMillions of yen
U.S. dollars
2020
2019
2020
Short-term loans, principally from banks,
the weighted average effective interest
rate 2.6%¥ 79,113¥ 79,349$ 732,528
Commercial paper, the weighted average
effective interest rate 0.0%
15,000138,889
0.43% unsecured bonds due 2026
10,00010,00092,593
0.53% unsecured bonds due 2027
10,00010,00092,593
0.44% unsecured bonds due 2029
10,00092,593
Unsecured Loans, principally from banks,
due from 2021 to 2030, the weighted
average effective interest rate 0.8%
126,975
146,658
1,175,694
251,088
246,0072,324,889
Less: portion due within one year
(125,515)(106,710)(1,162,176)¥ 125,573¥ 139,298$ 1,162,713
As of March 31, 2020, the following assets were pledged as collateral for short-term debt of¥875 million ($8,102 thousand):Millions of yen
2020¥ 1,230¥ 1,230

Current assets
Property, plant and equipment

Thousands of
U.S. dollars
2020$ 11,389$ 11,389

As of March 31, 2019, the following assets were pledged as collateral for short-term debt of¥638 million, long-term debt of ¥750 million, and others of ¥1,684 million:
Millions of yen
2019
Current assets*¥ 2,366
Property, plant and equipment
1,757¥ 4,123*) Collateral for guarantee on the extension of the deadline to pay import consumption tax
The aggregate annual maturities of the non-current portion of long-term debt and bonds as ofMarch 31, 2020 were as follows:Year ending March 31

Millions of yen¥ 25,946
7,996
17,6295,500
68,500¥ 125,573

2022
2023
2024
2025
2026 and thereafter

26

Thousands of
U.S. dollars$ 240,241
74,037
163,23150,926634,259$ 1,162,713

9.

Severance and Retirement Plans
The Company and its consolidated subsidiaries have funded and/or unfunded defined benefit
pension plans and/or defined contribution plans. The defined benefit plans consist of
Employees’ Pension Fund Plan, defined benefit corporation pension plan and lump-sum
severance indemnity plan.
There are cases where additional retirement benefits are paid at the time of retirement of
employees. The Company has established an employees’ retirement benefit trust and certain
consolidated subsidiaries have joined multi-employer employees’ pension fund.
The plans, which are not possible to reasonably compute the amounts of plan assets
corresponding to their own contribution amounts, are accounted for in the same way as thedefined contribution plan.
Liability for retirement benefits and net periodic benefit costs are, however, calculated by thesimplified method under the defined benefit corporation pension plans and the lump-sum
severance indemnity plans set up by a part of consolidated subsidiaries.
a) Defined benefit plans(1) The changes in defined benefit obligation for the years ended March 31, 2020 and 2019were as follows:
Thousands ofMillions of yen
U.S. dollars
2020
2019
2020
Balance at beginning of year
¥ 104,271¥ 103,760$ 965,472
Current service cost
4,251
3,915
39,361
Interest cost
1,116
1,196
10,333
Actuarial gain and loss
659
1,585
6,102
Unrecognized prior service cost328
Benefits paid
(5,530)(6,353)(51,204)
Foreign currency transaction
adjustments
458
167
4,241
Balance at end of year
¥ 105,230¥ 104,271$ 974,352(2) The changes in plan assets for the years ended March 31, 2020 and 2019, were as
follows:
Thousands ofMillions of yen
U.S. dollars
2020
2019
2020
Balance at beginning of year
¥ 63,681¥ 67,779$ 589,639
Expected return on plan assets
1,766
1,792
16,352
Actuarial gain and loss
(4,891)(1,944)(45,287)
Contributions from the Company
3,449
1,221
31,935
Benefits paid
(4,251)(5,238)(39,361)
Foreign currency transaction
adjustments(381)
71(3,528)27

Balance at end of year

¥ 59,373¥ 63,681$ 549,750(3) The changes in net liability for retirement benefits using a simplified method for theyears ended March 31, 2020 and 2019, were as follows:
Millions of yen
2020
2019
¥ 1,508¥ 2,049
799
502
(431)
(290)
(280)
(249)

Balance at beginning of year
Retirement benefit expenses
Benefits paid
Contributions to fundNet effect resulting in change inscope of consolidation
Balance at end of year107
¥ 1,704(502)¥ 1,508

Thousands of
U.S. dollars
2020$ 13,963
7,398(3,991)(2,593)991$ 15,778(4) Reconciliation between the liabilities recorded in the consolidated balance sheet andthe balances of defined benefit obligation and plan assets as of March 31, 2020 and 2019,were as follows:
Thousands ofMillions of yen
U.S. dollars
2020
2019
2020
Funded defined benefit obligation¥ 99,788¥ 99,875$ 923,963
Plan assets(63,644)(68,039)(589,296)
36,144
31,836334,667
Unfunded defined benefit obligation
11,416
10,261
105,704
Net liability for defined benefit
obligation
47,56042,097440,370
Liability for retirement benefits
53,46047,731
Asset for retirement benefits(5,899)(5,633)Net liability for defined benefit
obligation¥ 47,560¥ 42,097
Note: The above items include the part used a simplified method.

495,000(54,620)$ 440,370(5) The components of retirement benefit expenses for the years ended March 31, 2020 and
2019, were as follows:
Thousands ofMillions of yen
U.S. dollars
2020
2019
2020
Service cost
¥ 4,251¥ 3,915$ 39,361
Interest cost
1,116
1,196
10,333
Expected return on plan assets(1,766)(1,792)(16,352)
Amortization of actuarial gain and
1,413
1,484
13,083loss
Amortization of prior service cost
61
60
565
Retirement benefit expenses
calculated on a simplified method
799
502
7,398
Total retirement benefit expenses¥ 5,876¥ 5,366$ 54,40728

(6) The components of adjustments for retirement benefits in other comprehensive income(before tax effects) for the years ended March 31, 2020 and 2019, were as follows:
Millions of yen
2020
2019
¥ 63
¥ 58
(5,015)(2,448)¥ (4,952)¥ (2,390)

Prior service cost
Actuarial gain and loss
Total

Thousands of
U.S. dollars
2020
$ 583
(46,435)$ (45,852)(7) The components of adjustments for retirement benefits in accumulated othercomprehensive income (before tax effects) for the years ended March 31, 2020 and 2019,were as follows:
Thousands ofMillions of yen
U.S. dollars
2020
2019
2020
Unrecognized prior service cost
¥ 41
¥ 104
$ 380
Unrecognized actuarial gain and loss
14,793
9,778
136,972
Total¥ 14,834¥ 9,882$ 137,352(8) Plan assets as of March 31, 2020 and 2019a) Components of plan assets
Plan assets consisted of the followings:
2020
2019
Equity investments
34%
37%
Debt investments
26%
25%
Assets in a life-insurer's general account20%
19%
Cash and deposits
2%
3%
Others18%
16%
Total*
100%
100%(*): The above plan assets included 12% and 14% of assets held by the retirement
benefit trust set up for the retirement benefit plan as of March 31, 2020 and 2019,respectively.
b) Method of determining the expected rate of return on plan assets
The expected rate of return on plan assets is determined considering the long-term
rates of return, which are expected currently and in the future from the various
components of the plan assets.
(9) Assumptions used for the years ended March 31, 2020 and 2019 were set forth asfollows:
Discount rate
Expected rate of return on plan assets

29

2020
0.1-7.2%
1.0-6.2%

2019
0.4-8.5%
1.0-6.2%b) Defined contribution plans
Required contributions for defined contribution plans for the years ended March 31, 2020
and 2019 were ¥514 million ($4,759 thousand) and ¥520 million, respectively.
c) The multi-employer plan which contributions necessary is treated as net periodic pension
costs is as follows:(1) The funded status of the multi-employer plan as of March 31, 2020 and 2019, was asfollows:

Plan assets
Sum of actuarial liabilities of pension
plan and minimum actuarial reserve
Net balance

Millions of yen
2020
2019
¥ 78,774¥ 205,822

Thousands of
U.S. dollars
2020$ 729,389

92,789(188,665)

859,157¥ (14,015)¥ 17,156$ (129,769)(2) The contribution ratio of the Group in the multi-employer plan for the years ended
March 31, 2020 and 2019, was as follows:
2020
2019
The contribution ratio of the Group in the
0.7%
0.4%
multi-employer plan
(3) Supplementary explanation
The above net balance resulted mainly from past service cost under the plan in pension
actuarial valuation and special reserve.
The ratios above do not represent the actual actuarial liability ratio of the Group.
10. Shareholders’ Equity
Japanese companies are subject to the Companies Act of Japan (the "Companies Act").
Under the Companies Act, companies can pay dividends at any time during the fiscal year in
addition to the year-end dividend upon resolution at the shareholders' meeting. Additionally,for companies that meet certain criteria including (1) having a Board of Directors, (2) having
independent auditors, (3) having an Audit & Supervisory Board, and (4) the term of service ofthe directors being prescribed as one year rather than the normal two-year term by its articles
of incorporation, the Board of Directors may declare dividends (except for dividends-in-kind)at any time during the fiscal year if the company has prescribed so in its articles ofincorporation.
Semiannual interim dividends may also be paid once a year upon resolution by the Board of
Directors if the articles of incorporation of the company so stipulate. The Companies Act
provides certain limitations on the amounts available for dividends or the purchase of treasury
stock. The limitation is defined as the amount available for distribution to the shareholders,
but the amount of net assets after dividends must be maintained at no less than ¥3 million.

30

The Companies Act also provides for companies to purchase treasury stock and dispose of suchtreasury stock by resolution of the Board of Directors. The amount of treasury stock purchased
cannot exceed the amount available for distribution to the shareholders which is determinedby a specific formula.
(Dividends)
Dividends whose record date is attributable to the year ended March 31, 2019 but to beeffective in the following year.
(1) Dividend payment
Approvals by shareholders’ meeting held on June 27, 2019 are as follows:
Type of shares
Common stock
Total amount of dividends¥6,002 million
Funds for dividends
Retained earnings
Dividends per share¥85.00Record date
March 31, 2019
Effective dateJune 28, 2019
(Note) Total amount of dividend payments includes dividends of ¥9 million paid for
the Company’s shares held in BBT.
(2) Dividends whose record date is attributable to the year ended March 31, 2020 but to beeffective in the following year.
Approvals by shareholders’ meeting held on June 23, 2020 are as follows:
Type of shares
Common stock
Total amount of dividends¥6,002 million ($55,574 thousand)Funds for dividends
Retained earnings
Dividends per share¥85.00 ($0.79)
Record date
March 31, 2020
Effective dateJune 24, 2020
(Note) Total amount of dividend payments includes dividends of ¥9 million ($83thousand) paid for the Company’s shares held in BBT.

11. Contingent Liabilitiesa) Contingent liabilities as of March 31, 2020 and 2019 are as follows:
Millions of yen
2020
2019
Loans guaranteed (principally for
non-consolidated subsidiaries andaffiliates)
Repurchase obligation of the
securitization of receivables
Totalb) Other31

Thousands of
U.S. dollars
2020¥ 4,156¥ 6,004$ 38,481

5,780

5,931

53,519¥ 9,936¥ 11,935$ 92,000

(1) The Company and its related companies are now negotiating compensations fordamage with a part of automobile manufacturers in connection with violation of theCompetition Act by automobile wire harness cartels.
(2) In reference to the automotive parts manufactured by its consolidated
subsidiaries, vehicles in which such parts have been incorporated were being
recalled, the Company and its consolidated subsidiaries were requested tocompensate a part of such costs by TOKAI RIKA Co., LTD. (“TOKAI”), a purchaserof such parts, and had carried on negotiations, but have not yet reached anagreement.
In terms of the above case, American Furukawa, Inc., a consolidated subsidiary of
the Company, is the subject of litigation filed by TRAM, Inc. and TRMI, Inc.,
subsidiaries of TOKAI, with the Michigan court of justice in the U.S. (Delivery dateof legal complaint; June 15, 2017 (local time)). Compensation costs have reasonably
been estimated and provided, however, as the result of continued negotiations andthe case progresses, etc., those may be effected to the consolidated results of theCompany.
Separately from the above, automobiles incorporated parts that are manufactured
by consolidated subsidiaries, are being recalled, the Company and its consolidated
subsidiaries are requested to compensate a part of such costs by the purchaser of
those parts. As the result of continued negotiations and the case progresses, etc.,
those may be effected to the consolidated results of the Company. At present, it is
impossible to estimate reasonably such additional amount.

12. Selling, General and Administrative Expenses
The components of selling, general and administrative expenses for the years ended March 31,
2020 and 2019 were as follows:

Freightage and packing expenses ¥Sales commissions
Salaries and wages
Retirement benefit expenses
Depreciation
Research and development costs
Other
Total

¥

Millions of yen
2020
2019
20,698 ¥21,1801,992
1,969
45,99545,585
2,398
2,118
3,362
2,665
17,17917,25835,05035,491
126,674¥

126,266

Thousands of
U.S. dollars
2020$
191,648
18,444425,880
22,204
31,130159,065
324,537$

1,172,907

Research and development costs charged to“Selling, general and administrative expenses”
and manufacturing costs for the years ended March 31, 2020 and 2019 amounted to ¥21,650
million ($200,463 thousand) and ¥21,141 million, respectively.

13. Leases

32

The minimum rental commitments under noncancelable operating leases for the years ended
March 31, 2020 were as follows:
Thousands ofMillions of yen
U.S. dollars
2020
2019
2020
Due within one year¥764¥
1,038 $
7,074
Due after one year
1,640
2,413
15,185
Total

¥

2,405

¥

3,451

$

22,269

14. Other expensesa) Restructuring costs
Restructuring costs, which mainly consist of special retirement allowance, are related tothe downsizing staff in its consolidated subsidiary as part of the business restructuring.
b) Loss on disaster
Loss on disaster, which consists of loss of inventories and property, plant and equipment,
recovery costs and others, is related to damage caused by fire accident in its consolidated
subsidiary, Furukawa Circuit Foil Taiwan Corporation.

15. Income Taxes
Income taxes applicable to the Company and its domestic consolidated subsidiaries consist of
corporation tax, inhabitants’ tax and enterprise tax, which in the aggregate would result in astatutory income tax rate of approximately 30.6% for the years ended March 31, 2020 and2019. Overseas consolidated subsidiaries are subject to income taxes in the countries in which
they operate.
Summarized below is a reconciliation of the statutory income tax rate and the effective income
tax rate for the years ended March 31, 2020 and 2019:Japanese statutory income tax rate
Entertainment expense and other
Equity in income (loss) of non-consolidated
subsidiaries and affiliates
Research and development cost
Valuation allowance
Difference of applicable tax rate of overseas
consolidated subsidiaries
Utilization of loss carryforwards
Amortization of goodwill
Undistributed earnings of subsidiaries andaffiliates
Other, net
Effective income tax rate
33

2020
30.6%
2.9

2019
30.6%
1.7

(2.4)
(1.6)
3.8

(1.4)
(1.8)
8.1

(0.9)
0.6

(6.2)
(19.7)
0.5

3.5
1.6
38.2%

0.3
(2.8)
9.3%

Deferred tax assets (liabilities) as of March 31, 2020 and 2019 consisted of the following:Thousands ofMillions of yen
U.S. dollars
2020
2019
2020
Liability for retirement benefits¥ 16,698¥ 16,007$ 154,611
Provision for environmental costs
3,183
3,277
29,472
Loss carryforwards
45,041
46,621
417,046
Accrued bonus
3,348
3,327
31,000Depreciation
2,075
3,305
19,213
Provision for product defect compensation
5,835
9,422
54,028
Impairment loss
7,167
6,853
66,361
Loss on write-down of inventories
1,030
1,001
9,537
Other
11,1108,970
102,870
Gross deferred tax assets
95,493
98,787884,194
Less valuation allowance for loss
carryforwards(39,163)(40,580)(362,620)
Less valuation allowance for total of
future deductible temporary differences,etc.
(22,825)(21,938)(211,343)
Valuation allowance(61,989)(62,518)(573,972)
Total deferred tax assets
33,50336,268310,213
Unrealized gain on available-for-salesecurities(5,179)(9,773)(47,954)
Undistributed earnings of subsidiaries
and affiliates(9,870)(9,309)(91,389)
Revaluation difference on land
(720)
(720)
(6,667)
Other(3,398)(4,366)(31,463)
Total deferred tax liabilities(19,168)(24,170)(177,481)
Net deferred tax assets¥ 14,334¥ 12,097$ 132,722(For the year ended March 31, 2020)
The expiration of loss carryforwards, the related valuation allowances and the resulting net
deferred tax assets as of March 31, 2020 was as follows:

March 31, 2020
Deferred tax assets
relating to loss
carryforwards (*1)
Less valuation
allowances for loss
carryforwards
Net deferred tax
assets relating to loss
carryforwards (*2)

1 Year or
Less

After
1 Yearthrough
2 Years

Millions of Yen
After
After
After
2 Years 3 Years
4 Years
through through through3 Years 4 Years
5 Years

After
5 Years

Total¥ 1,852¥ 1,721¥ 2,824¥ 7,332¥ 6,110¥ 25,201¥ 45,041(978)(1,283)(1,675)(5,431)(4,619)(25,175)(39,163)

¥ 874

¥ 437

¥ 1,148¥ 1,900¥ 1,490¥ 26¥ 5,87734

March 31, 2020

1 Year or
Less

After
1 Yearthrough
2 Years

Thousands of
U.S. dollars
After
After
After
2 Years 3 Years
4 Years
through through through3 Years 4 Years
5 Years

After
5 Years

Total

Deferred tax assets
relating to loss
carryforwards (*1)
$ 17,148 $ 15,935 $ 26,148 $ 67,889 $ 56,574 $ 233,343 $ 417,046
Less valuation
allowances for loss
carryforwards(9,056) (11,880) (15,509) (50,287) (42,769) (233,102) (362,620)
Net deferred tax
assets relating to loss
carryforwards (*2)
$ 8,093 $ 4,046 $ 10,630 $ 17,593 $ 13,796$ 241 $ 54,417(*1): Deferred tax assets relating to loss carryforwards are calculated using effective
income tax rate.
(*2): In terms of deferred tax assets relating to loss carryforwards of ¥45,041 million($417,046), net deferred tax assets relating to loss carryforwards of ¥5,877 million ($54,417
thousand) were recognized. No valuation allowance was recognized on a recoverable partof it, based on the estimated future taxable income. The estimates and assumptions usedin determining future taxable income is consistent with those described in 3) Accounting
estimate (View on an effect of the novel coronavirus) in the section 2.Significant Accounting
Policies(For the year ended March 31, 2019)
The expiration of loss carryforwards, the related valuation allowances and the resulting net
deferred tax assets as of March 31, 2019 was as follows:

March 31, 2019
Deferred tax assets
relating to loss
carryforwards
Less valuation
allowances for loss
carryforwards
Net deferred tax
assets relating to loss
carryforwards

Millions of Yen
After
After
After
2 Years
3 Years
4 Years
through through through3 Years
4 Years
5 Years

1 Year or
Less

After
1 Yearthrough
2 Years¥ 1,309¥ 1,385

6,240¥ 7,062

(778)

(937)

(2,558)

¥ 530

¥ 447

¥ 3,681

16. Other Comprehensive Income (Loss）

35

After
5 Years

Total¥ 6,268¥24,355¥46,621(6,112)(6,171)(24,021)(40,580)

¥ 949

¥ 97

¥ 333

¥ 6,041

(For the year ended March 31, 2020)
1)

The following table presents components of recycled amounts of other comprehensive
income for the year ended March 31, 2020:
Millions of yen
Unrealized gain or loss on available-for-salesecurities
Amount arising during the year
Reclassification adjustments for gains andlosses included in profit
Deferred gain or loss on derivatives underhedge accounting
Amount arising during the year
Reclassification adjustments for gains andlosses included in profit
Adjustments for amounts transferred toassets’ acquisition costs
Adjustments for retirement benefits
Amount arising during the year
Reclassification adjustments for gains andlosses included in profit
Foreign currency translation adjustments
Amount arising during the year
Reclassification adjustments for gains andlosses included in profit
Share of other comprehensive income ofaffiliates accounted for by the equity method
Amount arising during the year
Reclassification adjustments for gains andlosses included in profit
Subtotal before tax effects
Tax effects
Total other comprehensive income¥ (7,550)(7,163)¥ (14,713)(3,049)802(2,246)(6,369)1,417(4,952)(3,929)23(3,905)(1,413)¥ (72)(1,485)(27,303)
6,245¥ (21,058)

Thousands of U.S. dollars
Unrealized gain or loss on available-for-salesecurities
Amount arising during the year
Reclassification adjustments for gains andlosses included in profit
Deferred gain or loss on derivatives underhedge accounting
Amount arising during the year
Reclassification adjustments for gains andlosses included in profit
Adjustments for amounts transferred toassets’ acquisition costs
Adjustments for retirement benefits
Amount arising during the year36

$ (69,907)(66,324)$ (136,231)(28,231)7,426(58,972)(20,796)

Reclassification adjustments for gains andlosses included in profit
Foreign currency translation adjustments
Amount arising during the year
Reclassification adjustments for gains andlosses included in profit
Share of other comprehensive income ofaffiliates accounted for by the equity method
Amount arising during the year
Reclassification adjustments for gains andlosses included in profit
Subtotal before tax effects
Tax effects
Total other comprehensive income

13,120(45,852)(36,380)
213(36,157)(13,083)(667)(13,750)(252,806)
57,824(194,981)

2)

Deferred tax of other comprehensive income for the year ended March 31, 2020:
Millions of yen
Tax
Before-tax
Net-of-tax(expense)amounts
amounts
Benefits
Unrealized gain or loss on available-for-salesecurities¥ (14,713)¥ 4,593 ¥ (10,119)
Deferred gain or loss on derivatives underhedge accounting(2,246)641(1,604)
Adjustments for retirement benefits(4,952)
1,010(3,942)Foreign currency translation adjustments(3,905)(3,905)
Share of other comprehensive income ofaffiliates accounted for by the equity method(1,485)(1,485)
Total other comprehensive income ¥ (27,303)¥ 6,245 ¥ (21,058)
Thousands of U.S. dollars
Tax
Before-tax
Net-of-tax
benefits
amounts
amounts(expense)
Unrealized gain or loss on available-for-salesecurities$ (136,231)
Deferred gain or loss on derivatives underhedge accounting(20,796)
Adjustments for retirement benefits(45,852)
Foreign currency translation adjustments(36,157)
Share of other comprehensive income ofaffiliates accounted for by the equity method(13,750)
Total other comprehensive income $ (252,806)$ 42,528$ (93,694)

5,935
9,352

(14,852)(36,500)(36,157)$ 57,824(13,750)$ (194,981)(For the year ended March 31, 2019)1)

The following table presents components of recycled amounts of other comprehensive
income for the year ended March 31, 2019:
Millions of yen
Unrealized gain or loss on available-for-salesecurities
37

Amount arising during the year
Reclassification adjustments for gains andlosses included in profit
Deferred gain or loss on derivatives underhedge accounting
Amount arising during the year
Reclassification adjustments for gains andlosses included in profit
Adjustments for amounts transferred toassets’ acquisition costs
Adjustments for retirement benefits
Amount arising during the year
Reclassification adjustments for gains andlosses included in profit
Foreign currency translation adjustments
Amount arising during the year
Share of other comprehensive income ofaffiliates accounted for by the equity method
Amount arising during the year
Reclassification adjustments for gains andlosses included in profit
Adjustments for amounts transferred toassets’ acquisition costs
Subtotal before tax effects
Tax effects
Total other comprehensive income¥ (5,792)(4,571)¥ (10,363)

887
(165)
355

1,077

(3,924)
1,534(2,390)(2,792)(2,792)(1,409)10¥ (9)(1,408)(15,875)
2,566¥ (13,309)

2)

Deferred tax of other comprehensive income for the year ended March 31, 2019:
Millions of yen
Tax
Before-tax
Net-of-tax(expense)amounts
amounts
Benefits
Unrealized gain or loss on available-for-sale¥ (10,363)¥ 2,307¥ (8,055)
securities
Deferred gain or loss on derivatives under
1,077
(344)
733
hedge accounting
Adjustments for retirement benefits(2,390)602(1,787)
Foreign currency translation adjustments(2,792)(2,792)
Share of other comprehensive income of(1,408)(1,408)affiliates accounted for by the equity method
Total other comprehensive income ¥ (15,875)¥ 2,566 ¥ (13,309)

17. Amount Per Share
Yen
2020

38

2019

U.S. dollars
2020

Profit attributable to owners ofparent per share:
Basic
Diluted¥ 250.25¥ -¥ 412.98¥ -$ 2.32$ -Yen
Net assets per share

2020

2019

¥ 3,408.86¥ 3,513.58

U.S. dollars
2020$ 31.56

Basic profit attributable to owners of parent per common stock (the “Basic profit per share”)
is calculated by dividing profit attributable to owners of parent by the weighted average
number of shares of common stock outstanding during the respective years (the “Weighted
average number of shares”), adjusted for treasury stock held.
Diluted profit attributable to owners of parent per common stock has not been presented forthe years ended March 31, 2020 and 2019, since the Company has issued no dilutive potential
shares.
Net assets per share are computed based on the net assets excluding non-controlling interests,
and the number of shares of common stock outstanding at the year end.
The Company’s shares held in Board Benefit Trust (See in Note 2. (s)), which are treated astreasury stock, are deducted from the number of shares at the end of the fiscal year, used in
the calculation of the net asset per share, and also deducted from the weighted average
number of shares used in the calculation of basic profit per share.
The number of shares of the above treasury stock deducted as of March 31, 2020 and 2019 are
113,500 and 115,000 shares, respectively. The weighted average number of shares of the above
treasury stock deducted during the fiscal year ended March 31, 2020 and 2019 are 113,875
and 116,450 shares, respectively.
The bases for “Amount Per Share” calculation are as follows:a) Basic profit attributable to owners of parent per share
Thousands of shares
2020
2019
Weighted average number of shares of common stockduring the fiscal year

70,487

Thousands of
U.S. dollars
2020

Millions of yen
2020
2019
Profit attributable to owners ofparentProfit not attributable to owners ofparentProfit attributable to owners ofparent related to common stock

70,485¥ 17,639¥ 29,108$ 163,324---¥ 17,639¥ 29,108$ 163,324b) Net assets per share39

Thousands of shares
2020
2019
Number of shares of common stock at the end of the
fiscal year

Total net assets
Amounts deducted from total net
assets:Non-controlling interests
Net assets attributable to shares ofcommon stock

70,487

Millions of yen
2020
2019
¥ 273,030¥ 279,911

70,486
Thousands of
U.S. dollars
2020$ 2,528,056(32,750)(32,252)(303,241)¥ 240,280¥ 247,659$ 2,224,815

18. Financial Instruments and Related Disclosuresa) Conditions of Financial instruments(1) Policy for financial instruments
The fund management policy of the Group (the Company and its consolidated subsidiaries)
has been set up to put its operating funds in deposits or investments that are assured of
no impairment in the principal and the necessary fund is obtained through borrowings
from banks and other financial institutions and bond issuances.
Derivative transactions are not entered into for speculative purposes.
(2) Details of financial instruments and associated risks and risk management system
Trade notes and accounts receivable arising from operation are exposed to credit risk ofcustomers. The Group carries out the practice of keeping track of due dates andoutstanding balances of each customer under the credit management rules, as well as
monitoring major customers’ credit status on a regular basis in order to minimize credit
risk.
Marketable securities and investment securities are mainly equity securities and exposedto the risk of changes in market value. These securities are primarily the shares ofcompanies with which the Group has business relationship, and the fair value of thesesecurities are evaluated on a regular basis.
Trade notes and accounts payable arising from operations normally have payment termsof less than one year.
Short-term and long-term debt are mainly utilized for working capital and capital
investments. The interest rate risk of a certain portion of those loans payable is hedgedusing interest rate swaps as hedging instruments.
On derivative transactions, foreign exchange forward contracts are used for hedge of
foreign currency risk associated with receivables and payables arising from operations anddenominated in foreign currency, interest rate swaps are used for hedge of interest raterisk associated with loans payable, metal forward contracts are used for hedge of price riskof raw materials and work in process. Execution and management of derivativetransactions are subject to related internal rules.
In relation to accounting for hedge transactions, hedging instruments and hedged items,

40

hedging policy, and effectiveness of hedge transactions are set out in the Company’s
internal rules.
Although trade payable and short-term and long-term debt are exposed to liquidity risk,these payables are managed by such means as cash flow projections prepared on a timely
manner.
(3) Supplementary information on the fair value of financial instruments
The fair value of financial instruments is based upon the market prices or reasonableestimates of fair value of these instruments if these fair values are not available. The
estimated fair values would not be fixed due to variety of factors and assumptions. In
addition, the contractual amounts of the derivative transactions set out in “2. Fair value offinancial instruments” as below are not an indicator of the market risk associated with
derivative transactions.
b) Fair value of financial instruments
The carrying amounts on the consolidated balance sheets, fair value, and differences as ofMarch 31, 2020 and 2019 are as follows. In addition, financial instruments, of which it isextremely difficult to measure the fair value, are not included in the following table. (Pleasesee “Financial instruments of which the fair value is extremely difficult to measure”)(As of March 31, 2020)(1) Cash and bank deposits(2) Trade receivable(3) Marketable securities andinvestments securities
a. Held-to-maturity debt securities
b. Available-for-sale securitiesc. Unconsolidated subsidiaries
and affiliated companies
Total of assets(1) Trade payable(2) Short-term debt
(3) Commercial paper(4) Bonds (including current portion)(5) Long-term debt
Total of liabilities
Derivative transactions (*2)
(1) Derivative transactions for which
hedge accounting does not apply(2) Derivative transactions for which
hedge accounting apply
Total of derivative transactions

Millions of yen
Carrying
Fair value
amount (*1)(*1)
¥ 54,357¥ 54,357
192,513
192,513Difference898
27,221

898
27,2210-60,28730,659(29,628)

335,277(111,586)(110,515)(15,000)(30,000)(95,573)

305,650(111,586)(110,515)(15,000)(29,895)(96,156)(29,627)104(582)(362,675)(363,154)

(478)

768

768

-

(1,785)(1,785)-¥ (1,017)¥ (1,017)¥ -Thousands of U.S. dollars

41

¥ -

(1) Cash and bank deposits(2) Trade receivable(3) Marketable securities andinvestments securities
a. Held-to-maturity debt securities
b. Available-for-sale securitiesc. Unconsolidated subsidiaries andaffiliated companies
Total of assets(1) Trade payable(2) Short-term debt
(3) Commercial paper(4) Bonds (including current portion)(5) Long-term debt
Total of liabilities
Derivative transactions (*2)
(1) Derivative transactions for which
hedge accounting does not apply(2) Derivative transactions for which
hedge accounting apply

Carrying
amount (*1)
$ 503,306
1,782,528

Fair value(*1)$ 503,306
1,782,528

8,315
252,046

8,315
252,0460-558,213283,880(274,333)

3,104,417(1,033,204)(1,023,287)(138,889)(277,778)(884,935)

2,830,093(1,033,204)(1,023,287)(138,889)(276,806)(890,333)(274,324)
963(5,389)(3,358,102)(3,362,537)(4,426)

7,111

7,111

-

(16,528)(16,528)-

Difference$ -Total of derivative transactions$ (9,417)$ (9,417)$ (*1); Liabilities are included in parentheses.
(*2); Assets and liabilities arising from derivative transactions are presented on a net
basis and net liabilities are included in parentheses.
(As of March 31, 2019)(1) Cash and bank deposits(2) Trade receivable(3) Marketable securities andinvestments securities
a. Held-to-maturity debt securities
b. Available-for-sale securitiesc. Unconsolidated subsidiaries andaffiliated companies
Total of assets(1) Trade payable(2) Short-term debt
(3) Bonds (including current portion)(4) Long-term debt
Total of liabilities
42

Millions of yen
Carrying
Fair value
amount (*1)(*1)
¥ 44,628¥ 44,628
219,347
219,347

Difference
¥ -

2,469
45,4832,471
45,483

1-

59,878371,809(131,422)(106,710)(20,000)(119,298)(377,432)

38,379350,311(131,422)(106,710)(20,130)(119,994)(378,258)(21,499)(21,497)
(130)
(695)
(826)

Derivative transactions (*2)
(1) Derivative transactions for which
hedge accounting does not apply(2) Derivative transactions for which
hedge accounting apply

(146)

(146)

-

697

697

-

Total of derivative transactions
¥ 551
¥ 551
¥ (*1); Liabilities are included in parentheses.
(*2); Assets and liabilities arising from derivative transactions are presented on a net
basis and net liabilities are included in parentheses.
I. Fair value of financial instruments
Assets(1) Cash and bank deposits
The carrying amount approximates fair value due to the short maturity ofthese instruments.
(2) Trade receivable
The carrying amount approximates fair value due to the short maturity ofthese instruments.
A part of trade receivable is treated as receivable denominated in Japanese
yen due to applying the special treatment of foreign currency exchange
contracts and the carrying amount approximates fair value.
(3) Marketable securities and investment securities
The fair value of equity securities is based on quoted market price, if available.
The fair value of debt securities is based on quoted market price or provided
price by financial institutions. Marketable securities and investment
securities by holding purpose are set out in “Note 5. Debt and Equity
Securities”.
Liabilities(1) Trade payable
The carrying amount approximates fair value because of the short maturity ofthese instruments.
A part of trade payable is treated as payable denominated in Japanese yen due
to applying the special treatment of foreign currency exchange contracts andthe carrying amount approximates fair value.
(2) Short-term debt
The carrying amount approximates fair value because of the short maturity ofthese instruments.
(3) Commercial paper
The carrying amount approximates fair value because of the short maturity ofthese instruments.
(4) Bonds
Fair value of bonds is based on quoted market price, if available. If not, thefair value is based on present value by discounting total cash flows of principal
43

and interest to be paid at the rate considering remaining periods of those bonds
and the related credit risk.
(5) Long-term debt
Fair value of long-term debts is based on the price provided by financial
institutions or the present value of future cash flows discounted using thecurrent interest rate for similar debt of a comparable maturity. Interest rate
swaps subject to special treatment are used for long-term floating rate debt.
Principal and interest of the interest in which these interest rate swaps areembedded, are discounted using the current interest rate, which is estimatedreasonably for similar debt of a comparable maturity.
Derivative Transactions
Notional amount, fair value, unrealized gain or loss, and others are describedin Note 18. “Additional Information on Derivatives”.
II. Financial instruments of which the fair value is extremely difficult to measure
Unlisted investment securities of unconsolidated subsidiaries and affiliatedcompanies amounted to ¥13,425 million ($124,306 thousand) and ¥13,727 million asof March 31, 2020 and 2019 are not included in (3) Marketable securities andinvestments securities a. Held-to-maturity debt securities and c. Unconsolidated
subsidiaries and affiliated companies above, because market value is not available
and their future cash flow are difficult to estimate, accordingly it is not practicableto estimate the fair value.
III. The redemption schedule for money claim and held-to-maturity debt securities
with maturity date subsequent to the consolidated balance sheets date:(As of March 31, 2020)
Within 1
year
Bank deposits¥ 52,805
Trade receivable
192,513
Marketable securities andinvestments securities
Held-to-maturity debt securities:
1) Government bonds,
municipal bonds and other798
2) Other debt securities
99
Total ¥ 246,218

Bank deposits
Trade receivable
Marketable securities andinvestments securities

Millions of yen
Over 1
Over 5year to 5 year to 10
years
years
¥ ¥ -

Over 10
years
¥ -

-

-

-

¥ -

¥ -

¥ -

Thousands of U.S. dollars
Over 1
Over 5
Within 1
Over 10year to 5 year to 10
year
years
years
years
$ 488,935$ $ $ 1,782,528-

44

Held-to-maturity debt securities:
1) Government bonds,
municipal bonds and other
7,3892) Other debt securities
917
Total $ 2,279,796

$ -

$ -

$ -

(As of March 31, 2019)
Within 1
year
Bank deposits¥ 43,305
Trade receivable
219,347
Marketable securities andinvestments securities
Held-to-maturity debt securities:
1) Government bonds,
municipal bonds and other
2,3702) Other debt securities
Total ¥ 265,023

Millions of yen
Over 1
Over 5year to 5 year to 10
years
years
¥ ¥ -

99
¥ 99

Over 10
years
¥ -

¥-

¥-

IV. The redemption schedule for long-term debt and other interest bearing debt withmaturity date subsequent to the consolidated balance sheets date are described in“Note 8. Short-term Debt, Long-term Debt and Bonds”.

19. Additional Information on Derivatives(1) Derivative transactions for which hedge accounting does not apply(a) Foreign currency related transactions(As of March 31, 2020)
Millions of yen
2020
Notional
AmountPortionover 1year

Non-market transaction
Foreign currency:
Sell
U.S.$ ¥ 8,143
Yen
1,113
Qatari Riyal
619
Bahraini Dinar
3,599
Indonesian

Fair
value
(*)

¥-

¥ (21)
39(0)60

Thousands of U.S. dollars
2020
Unrealized
gain(loss)

Notional
AmountPortionover 1
year

Fair
value
(*)

Unrealized
gain(loss)¥ (21) $ 75,398
39
10,306(0)
5,731
60
33,324$-$ (194)
361
(0)
556

$ (194)
361
(0)
556

Other

2,601
4,896

-

312
10

312
10

24,08345,333

-

2,889
93

2,889
93

U.S.$

766

19

31

31

7,093

176

287

287

Rupiah

Buy

45

Yen
434
Other
165
Currency Swaps

-

3
(2)

3
(2)

4,019
1,528

-

28
(19)

28
(19)

Receiving Yen,
payingPhilippine
peso

747
747
(28)
(28)
6,917
6,917
(259)
(259)
Total ¥23,088
¥ 766
¥ 405
¥ 405 $213,778 $ 7,093 $ 3,750$ 3,750(*) Fair value is determined by prices obtained from foreign exchange market.

(As of March 31, 2019)
Millions of yen
2019Portionover
1 yearNotional
Amount

Fair
value
(*)

Unrealized
gain(loss)

Sell
U.S.$
Yen
Qatari Riyal
Bahraini Dinar
Indonesian Rupiah
Other¥ 2,185
1,019
1,213
4,991
2,911
73

622
-

¥ (16)
38
(51)
(131)
(56)
(0)

¥ (16)
38
(51)
(131)
(56)
(0)

Buy
U.S.$
3,465
16
16
Yen
1,554
5
5
Other
666
18
18
Total
¥18,081¥ 622¥ (177)¥ (177)(*) Fair value is determined by prices obtained from foreign exchange market.
(b) Commodity related transactions(As of March 31, 2020)
Millions of yen
2020
Notional
AmountPortionover 1year

Market transaction
Forward contracts:
Sell ¥ 8,004
Buy
13,937

Fair
value
(*)

¥ 517

¥ 290
70

Thousands of U.S. dollars
2020
Unrealized
gain(loss)¥ 290
70

Notional
AmountPortionover 1
year

Fair
value
(*)

Unrealized
gain(loss)$ 74,111
129,046$ 4,787$ 2,685648$ 2,685648

Total ¥ 21,942¥ 517 ¥ 360¥ 360 $ 203,167 $ 4,787$ 3,333$ 3,333(*) Fair value is determined by prices obtained from commodity exchange market.
(As of March 31, 2019)
Millions of yen
2019
Notional
AmountPortionover 1
year

Fair
value
(*)

Unrealized
gain(loss)

46

Market transaction
Forward contracts:
Sell ¥ 9,322¥ - ¥ (98)
¥ (98)
Buy
5,260
127
127
Total ¥ 14,583
¥¥ 28
¥ 28
(*) Fair value is determined by prices obtained from commodity exchange market.
(2) Derivative transactions for which hedge accounting apply(a) Foreign currency related transactions(As of March 31, 2020)
Millions of yen
2020
Hedgeditem

Notional
AmountNormal accounting method
Foreign currency:
Sell
Trade
U.S.$
¥10,460
Receivable
Euro
88(Forecast
931
Other transactions)
Buy
U.S.$
11,452
Trade
Euro payable
692(Forecast
4,130
Other transactions)

Portionover 1year

Thousands of U.S. dollars
2020
Calculati-onmethodof fair
value

Fair
value
(*)

Notional
AmountPortionover 1
year

Fair
value
(*)

¥223
-

¥24
0
(0)

Forwardrate offoreigncurrency$ 96,852815
8,620$ 2,065
-

$ 222
-

393
57
-

90
(10)
(38)

Forwardrate offoreigncurrency

106,037
6,407
38,241

3,639
528
-

833
(93)
(352)

Assignment accounting (special treatment for foreign exchange forward contracts)
Foreign currency:
Sell
U.S.$
2,501
23,157
Trade
Other receivable
185
1,713
Buy
U.S.$
276
2,556
Trade
payableOther
Currency swap
Receiving
U.S.$,
Paying Yen

Long-term
debt

2,000

-

-

Total

18,519

-

-

-

-

-

-

¥ 32,720¥ 674¥ 65$ 302,963$ 6,241$ 602(*) The fair value of foreign currency related transactions subject to assignment
accounting (special treatment for foreign exchange forward contract) is accounted fortogether with the underlying trade receivable or trade payable or long-term debt
subject to hedging.
(As of March 31, 2019)47

Millions of yen
2019
Hedgeditem

Portionover 1year

Notional
AmountNormal accounting method
Foreign currency:
Sell
Trade
U.S.$
¥6,739Receivable
Euro
365(ForecastOther transactions)
150
Buy
U.S.$
11,941Trade
payable
Euro
75
Other

(Forecasttransactions)

Calculati-onmethodof fair
value

Fair
value
(*)

¥ 268
77
-

¥ (18)
10
(1)

19
-

(12)
0

-

(26)

3,597

Forwardrate offoreigncurrency

Forwardrate offoreigncurrency

Assignment accounting (special treatment for foreign exchange
forward contracts)
Foreign currency:
Sell
U.S.$
15,015
Trade
Other receivable
383
Buy
U.S.$
489
Trade
payableOther
Currency swap
Receiving
U.S.$,
Paying Yen

Long-term
debt

2,000

2,000

-

Total

¥40,757¥2,365¥ (47)(*) The fair value of foreign currency related transactions subject to assignment
accounting (special treatment for foreign exchange forward contract) is accounted fortogether with the underlying trade receivable or trade payable or long-term debt
subject to hedging.
(b) Interest-rate related transactions(As of March 31, 2020)
Millions of yen
2020
Hedgeditem

Notional
AmountThousands of U.S. dollars
2020

Portionover 1
year

Fair
value
(*)

Notional
AmountPortionover 1
year

Fair
value
(*)

Special treatment interest rate swap:
Receiving fixed
rates and paying
Longfloating rates
term debt
Receiving floating
rates and paying
Longfixed rates
term debt

Total

¥983

¥798

¥ -

$ 9,102$ 7,389$ -29,100¥30,083

10,500¥11,298¥ -269,444$ 278,546

97,222$ 104,611$ -48

(*) The fair value of interest rate swaps subject to special treatment embeds in longterm debt subject to hedging included in the fair value of the corresponding longterm debt.
(As of March 31, 2019)
Millions of yen
2019
Hedgeditem

Portionover 1year

Notional
Amount

Fair
value
(*)

Special treatment interest rate swap:
Receiving fixed
rates and paying
floating rates
Receiving floating
rates and paying
fixed rates

Longterm debt

¥ -

¥ -

¥-

Longterm debt

46,10026,100Total¥ 46,100 ¥ 26,100¥(*) The fair value of interest rate swaps subject to special treatment embeds in longterm debt subject to hedging included in the fair value of the corresponding longterm debt.
(c) Commodity related transactions(As of March 31, 2020)
Millions of yen
2020
Hedgeditem

Notional
AmountPortionover 1year

Thousands of U.S. dollars
2020
Calculation
method offair value

Fair
value

Normal accounting method:
Forward contracts for metal materials:
Raw
Sell materials¥ 2,558¥ ¥ 275
and work
Buy in process
17,556
1,413(2,126)
Total ¥ 20,115 ¥ 1,413 ¥ (1,851)

Forwardrate ofmetalmaterial

Notional
Amount$ 23,685
162,556$ 186,250(As of March 31, 2019)
Millions of yen
2019
Hedgeditem

Notional
AmountPortionover 1
year

Fair
value

Normal accounting method:
Forward contracts for metal materials:
Raw
Sell materials¥ 2,466¥ and work
Buy in process
17,479837
49¥ (53)
799

Calculation
method offair value

Forwardrate ofmetalmaterial

Portionover 1
year

$ -

Fair
value

$ 2,546

13,083(19,685)$ 13,083 $ (17,139)

Total¥ 19,946

¥ 837

¥ 745

20. Subsequent events
Company split in the copper tube business and transfer of shares of succeeding company
The Company resolved at the Board of Directors meeting held on September 27, 2019,
to transfer the business related to the development, manufacture and sales of copper
tubes, copper tube components and copper plates (hereinafter the “Business”), and all of
the outstanding shares issued by Okumura Metals Co., Ltd. (hereinafter “Okumura
Metals”), the wholly-owned subsidiary of the Company to a newly established by theCompany (hereinafter “New Company”) through an absorption-type company split(hereinafter “Company Split”), and to transfer all of the outstanding shares issued by
the New Company and the Company’s equity share in the consolidated subsidiary
Furukawa Metal (Thailand) Public Co., Ltd. (hereinafter “FMT”) to CTJ Holdings 2 LLC(hereinafter “CTJ”), which is SPC and indirectly capitalized by Japan Industry No. 5
Investment Limited Partnership managed by Japan Industrial Partners, Inc.
(hereinafter “Stock Transfer” and “Transaction” incases including the Company Split) .
The stock transfer agreement was conducted with CTJ on the same day.
In addition, assets owned by the Company will also be transferred (hereafter, the “Asset
Transaction”) upon completion of the Stock Transfer, as approved at the board of
directors meeting on March 26, 2020.
(1) Objective of the Transaction
In its mid-term management plan “Furukawa G Plan 2020” formulated in 2016, theCompany have worked to strengthen focus on these businesses and products. In
addition, the Company has been reviewing its overall business portfolio. As a resultof the comprehensive consideration of business synergies amongst the Company's
focus businesses / products and the Business, and the further enhancement of thecompetitiveness of the Business, it was determined that transfer to CTJ, which isaiming to achieve business growth and integration with other copper tube companies,
will contribute to the sustainable growth of the Business. Thus, the Company decided
to conduct the Transaction with CTJ.
(2) Method of the company split
It is an absorption-type company split in which the Company is the split company
and the New Company is the succeeding company. And the Company succeeded allof the outstanding shares issued by Okumura Metals, a wholly-owned subsidiary of
the Company for the New Company.
(3) Schedule of the Transaction
Approval for the Transaction by the Boardof directors
Conclusion of a stock transfer agreement
Establishment of the New Company
Conclusion of an absorption-type company
split agreement
50

September 27, 2019
September 27, 2019
December 2, 2019
January 23, 2020

Scheduled date of the company split(effective date)
Effective date of the stock transfer

April 1, 2020
June 1, 2020

(4) Share allotments relating to the company split
The New Company issued 9,999 shares of common stock at the time of the Company
Split and allot all of those shares to the Company.
(5) Rights and obligations assumed by the succeeding company
In accordance with the provisions of the absorption-type company split agreement
concluded between the New Company and the Company, the New Company
succeeded all of the outstanding shares issued by Okumura Metals, as well as theassets, liabilities and contractual status of the Business and the rights andobligations relating thereto.
(6) The financial position and the result of its division to be spited (the fiscal year
ended March 31, 2020)
Net sales
AssetsLiabilities¥9,170 million ($84,907 thousand)¥1,680 million ($15,556 thousand)-And overview of Okumura Metals, the succeeding company is as follows;
Name
Address

Okumura Metals Co., Ltd.
6, Doicho 7-chome , Amagasaki-shi, Hyogo
prefecture

The result of operations andthe financial position of thecurrent year
Fiscal year
Net assets
Net sales

March 31, 2020
¥1,820 million ($16,852 thousand)¥3,228 million ($29,889 thousand)(7) Overview of the companies concerned to the company split

Name
Address
Name and title of therepresentative
Business description

Capital stock

Split company (theCompany)
Furukawa Electric Co.,Ltd.
2-3 , Marunouchi 2-chome,
Chiyoda- ku, Tokyo
Keiichi Kobayashi,
President
Development, manufactureand sales of optical fiber
cables, power cables,
automotive wire harnesses¥69,395 million($642,546 thousand)51

Succeeding company (NewCompany)
Daishin P&T Co., Ltd.
6, Doicho 7-chome,
Amagasaki-shi, Hyogo
Prefecture
Takeshi Nishizawa,
President
Development, manufactureand sales of copper tubes,
copper tube components
and copper plates¥5,000($46)

Date established
Outstanding sharesissuedJune 25, 1896
70,666,917 shares (as ofMarch31, 2020)

December 2, 20191 share (as of March31,
2020)(8) Summary of the Stock Transfer(a) The Stock Transfer method
All outstanding shares of the New Company and the Company’s equity share in the
FMT were transferred to CTJ.
(b) Summary of the subsidiaries to be transferred(i) New Company
Please refer to the details in the “Succeeding company (New Company)”column in (7) Overview of the companies concerned to the company split above.
(ii) FMT (As of December 31, 2019)
Name
Address
The Company’s shareholding
ratio
The result of operation andfinancial position in the latest
fiscal year
Fiscal year
Net assets
Net sales

Furukawa Metal (Thailand) Public Co.,Ltd
183 Regent House Building, 14th Floor,
Rajdamri Road, Lumpini, Pathumwan,,
Bangkok 10330
44.0% (including indirect ownership 1.7%)

Year ended December 31, 2019
1,605 million Baht
6,066 million Baht(iii) Summary of the transfer recipient
Name
Address
Name and title of therepresentative
Business description
Relationship with theCompany

CTJ Holdings2LLC
1-1, Marunouchi 2-chome, Chiyoda-ku,
Tokyo
Representative Partner of T.J Holdings
Co., Ltd.
Executor of Managing Partner ,Koji
MuranakaAcquisition and holding securities, andrelated business operations
The Company has no capital relationships,
personnel relationships or transactional
relationships with this company thatdeserve mention.

(iv) Number of shares to be transferred, transfer amount and status ofshareholding after the transfer

Shareholding prior to

Daishin P&T Co., Ltd.
10,000 shares
52

FMT
21,120,000 shares

the transfer(Shareholding ratio:
100%)(Shareholding
ratio:44.0%, including
indirect ownership)

Number of sharestransferred
Shareholding after
the transfer

10,000 shares

20,280,280 shares

0 shares(Shareholding ratio: 0%)839,720 shares(Shareholding
ratio:1.7%, including
indirect ownership)

Transfer amount
Loss on transfer ofstock

No disclosure requested by the transfer recipient¥3,705
million($34,306
thousand)(estimated)
Since final transfer amount will be
determined by adjusting the transfer amountafter the deal closingin accordance withthe stock transfer agreement, loss on transferof stock would be changed.

(v) Schedule of the Stock Transfer
Please refer to (3) Schedule of the Transaction above.
(9) Summary of the Asset Transfer(a) Purpose of the Asset Transfer
The Company reviewed its assets held to utilize management resources effectively
and to strengthen its financial condition, the following assets will be transferred. The
Company transferred the Business which operates on the site described (c) below to
CTJ, this asset transfer is subject to the execution condition of this transfer of theBusiness.
(b) Overview of the transfer recipientThis overview is not disclosed by the intention of the transfer recipient. The Company
has no capital relationships, personnel relationships or transactional relationships
with this company and this transfer recipient is not its related parties.
.
(c) Description of the assets to be transferred
Name of asset and address
Current status
6, Doicho 7-chome,
Factory site, etc.
Amagasaki-shi, Hyogo Prefecture(Note) The transfer amount and book value are discoursed in accordance with
the intention of the transfer recipient(d) Schedule of the Asset Transfer
Date of the resolution of board of
directors meeting
Date of conclusion of theagreement
53

March 26, 2020
March 26, 2020

Date to be delivered

June 30, 2020

21. Segment Information
1. Outline of reportable segments
The reportable segments of the Company are components for which the financial
information can be obtained separately from its other components, and the Board of
Directors reviews such reportable segments on a regular basis in order to decide
allocations of managerial resources and evaluate business performance.
The Group establishes divisions by type of product and service, and each division draws
up their comprehensive strategy on the products sold and services performed in domestic
and overseas market.
Products and services of main business on each segment are as follows;(1) Infrastructure
Optical fiber, optical fiber cable, optical components, semiconductor
optical devices, material communication cable, fusion splicer, industrial
lasers, network equipment, CATV system, radio products, powertransmission cable, power transmission cable accessories andinsulations, insulated wires, electrical insulation tape, electronicmaterial products, etc.
(2) Electronics & Automotive Systems
Automotive components (wire harness, steering roll connector, battery
state sensor, perimeter monitoring radar, etc.), automaticbatteries/batteries for industrial use, copper/aluminum wires, magnet
wires, copper and copper alloy products, functional surface products(plating), processed products for electronic parts (leading frame, etc.),
special metal materials (shape-memory/super-elastic alloys), etc.
(3) Functional Products
Cable conduits, water-feeding pipe materials, foaming products, UV
tapes for semiconductor manufacturing, electronic components materials,
heat-dissipation products, hard disc drive (HDD) aluminum substrates,
electrodeposited copper foils, etc.
(4) Service and Development, etc.
Logistics, supporting service for each business of the Group as businessin trust etc., real-estate leasing, hydraulic power generation, driving of
R&D for new products, etc.
To further accelerate the development, some operation, which was previously classified
as “Electronics & Automotive Systems” segment, was changed to “(4)ServiceandDevelopment, etc.”.
The last year’s segment information was retroactively revised based on the current
classification.
54

2. Segment information on sales and income (loss), identifiable assets and other items by business for the years ended March 31,
2020 and 2019 is summarized as follows:(For the year ended March 31, 2020)

Millions of yen

Infrastructure

Net sales
Outside customers
Inter-segment sales
Total
Segment income(loss)
AssetsOthersDepreciation
Amortization of goodwill
Investments in affiliates
accounted for by the equity
methodTangible/intangible fixed
assets increased.

Electronics &Automotive
Systems

Service andDevelopment,etc.

Functional
products

Sub-total

Total

Adjustments*

493,734 \
15,566509,300
14,818 \
320,802 \110,478 \
5,398
115,877
7,467 \
100,616 \34,187 \16,13150,318(349) \
148,366 \914,439 \
41,988956,428
23,645 \831,005 \- \(41,988)(41,988)(80) \(36,389) \914,439\\

276,039 \
4,892
280,932
1,710 \
261,220 \\\9,043 \
70 \

13,035 \122 \4,496 \
115 \

1,458 \
345 \

28,034 \654 \1,389 \
- \29,423654\

8,081 \

6,875 \

7,267 \

48,194 \70,419 \- \70,419\18,428 \21,505 \4,772 \

2,599 \

47,305 \5,838 \

53,144\914,439
23,565
794,616-

Thousands of U.S. dollars (Note 3)
Infrastructure

Net sales
Outside customers
Inter-segment sales
Total
Segment income(loss)
Assets.

Electronics &Automotive
Systems

Functional
products

Sub-total

316,546 $149,361465,907(3,231) $1,373,759 $

8,467,028 $
388,7788,855,815
218,935 $7,694,491 $- $(388,778)(388,778)(741) $
(336,935) $8,467,028

Adjustments*

Total

$
$

2,555,917 $
45,2962,601,222
15,833 $2,418,704 $OthersDepreciation
Amortization of goodwill$$

83,731 $648 $120,694 $
1,130 $

41,630 $1,065 $

13,500 $3,194 $

259,574 $6,056 $

12,861 $- $272,435
6,056

Investments in affiliates
accounted for by the equity
method$74,824 $63,657 $67,287 $446,241 $

652,028 $- $652,028

Tangible/intangible fixed
assets increased$

170,630 $

199,120 $44,185 $24,065 $438,009 $54,056 $492,074$

4,571,611 $ 1,022,944 $
144,130
49,981
4,715,741
1,072,935
137,204 $69,139 $2,970,389 $ 931,630 $Service andDevelopment,
etc.

(For the year ended March 31, 2019)

OthersDepreciation
Amortization of goodwill
Investments in affiliates
accounted for by the equity
methodTangible/intangible fixed
assets increased.

Electronics &Automotive
Systems

Functional
products

Service andDevelopment,
etc.

Sub-total

Adjustments*

Total

535,659 \25,995561,655
19,469 \339,075 \

140,748 \8,551
149,300
13,539 \102,879 \

32,931 \15,64948,580292 \
140,313 \991,590 \
55,9201,047,511
40,731 \845,555 \- \(55,920)(55,920)
111 \(27,534) \991,590\\282,250 \5,723
287,9737,430 \
263,288 \\\7,632 \
114 \

11,703 \9 \4,416 \
119 \

1,312 \
345 \

25,064 \588 \1,207 \
- \26,271588\

7,082 \

7,091 \

6,983 \

48,895 \70,052 \- \70,052\

23,986 \16,115 \5,247 \

1,710 \

47,060 \2,976 \

50,036\-

Millions of yen

Infrastructure

Net sales
Outside customers
Inter-segment sales
Total
Segment income(loss)
Assets8,467,028
218,194
7,357,556

991,590
40,842
818,021＊ Inter-segment transactions are eliminated from the consolidated financial statements. Corporate
assets are included in the consolidated financial statements. Adjustments include increase of
tangible/intangible fixed assets and depreciation related to the corporate assets.

55-

<Related information>
Information by regions(For the year ended March 31, 2020)

Net sales\

Property, plant and equipment,
net of accumulated depreciation

\

China

495,658 \

75,059 \

Japan

Asia

142,846 \

67,362 \$Property, plant and equipment,
net of accumulated depreciation$

183,033 \Millions of yen
America

78,302 \34,506 \9,502 \

4,589,426 $

694,991 $Japan

Thousands of U.S. dollars (Note 3)
Asia
Other
America

1,694,750 $

1,322,648 $

623,722 $

319,500 $

Other

Total

82,386 \914,439

Total

Other

Thousands of U.S. dollars (Note 3)
North
Other
China
middleAsian areas
AmericaJapan
Net sales

Millions of yen
North
middleAmerica

Other
Asian areas

Japan

725,019 $

254,219

Other

Total

762,833 $ 8,467,028
Total

87,981 $ 2,353,880(For the year ended March 31, 2019)

Net sales\

Property, plant and equipment,
net of accumulated depreciation\

Millions of yen
North
middleAmerica

Other
Asian areas

Japan

China

521,281 \94,006 \

Japan

Asia

131,647 \

56,394 \213,260 \Millions of yen
America

72,677 \Total

90,364 \991,590

Total

Other

32,035 \Other

9,283 \

229,360<Information of impairment loss by reportable segments>(For the year ended March 31, 2020)
Millions of yen
Infrastructure

Electronics &Automotive
Systems

Impairment loss

\

236 \

368 \

Impairment$

2,185 $

3,407 $

loss

Service andDevelopment,etc.

Functional
products

18 \Sub-total- \Adjustment

Total

623 \

-\

623

Thousands of U.S. dollars (Note 3)
167 $
- $
5,769 $

- $

5,769

(For the year ended March 31, 2019)
Millions of yen
Infrastructure

Impairment loss\

2,465 \

Electronics &Automotive
Systems

Service andDevelopment,etc.

Functional
products

161 \

- \

Sub-total- \2,627 \

Adjustment

-\

Total

2,627

<Information of goodwill by reportable segments>(For the year ended March 31, 2020)
Millions of yen
Infrastructure

Electronics &Automotive
Systems

Service andDevelopment,etc.

Functional
products

Amortization of goodwill
Goodwill as of March 31

\
\

70 \
43 \

122 \
707 \

Amortization of goodwill
Goodwill as of March 31

$
$

648 $
398 $

1,130 $
6,546 $

115 \
140 \

345 \
1,180 \

Sub-total

Adjustment

Total

654 \
2,072 \

- \
- \

654
2,072

Thousands of U.S. dollars (Note 3)
1,065 $
3,194 $
6,056 $
1,296 $
10,926 $19,185 $

- $
- $

6,056
19,185(For the year ended March 31, 2019)
Millions of yen
Infrastructure

Amortization of goodwill
Goodwill as of March 31

\
\

114 \
133 \

Electronics &Automotive
Systems

Functional
products

9 \
830 \

56

119 \
261 \

Service andDevelopment,
etc.

345 \
1,526 \

Sub-total

588 \2,751 \

Adjustment

- \
- \

Total

588
2,751

21. Related Party Transactions
1. 1) Transactions of the Company with related companies and others(For the year ended March 31, 2020)
None.
(For the year ended March 31, 2019)a) Officers and major shareholders of the Company (only in the case of individuals), etc.
Directors
Type of Related Party
Tatsuo Teratani
Name
Address
Capital
Director
Type of businessDirect 0.0％
Voting right share owing (share owned)
Conclusion of engineering guidanceBusiness relationshipcontact
Payment of engineering guidance fee
Description of transactions￥6 million
Amounts of transactionsb) Transactions of the non-consolidated subsidiaries and affiliates of the Company
Non-consolidated subsidiary
Type of Related Party
Tohoku Access Cable Company
Name
Hachinohe-city Aomori prefecture
Address￥20 million
CapitalManufacturing
Type of businessDirect 100.0％
Voting right share owing (share owned)
Business relationship
Description of transactions

Supply of raw materials and sales of
it's products
Distribution of residual assets as aresult of liquidation￥349 million

Amounts of transactions(Note)
Since Tohoku Access Cable Company completed liquidation procedures in
December, 2018, the above amounts were transaction amounts of the period when
it was a related party and the above voting right share owing (share owned) was
at a point of time when it did not correspond to a related party.
In terms of distribution of residual assets due to liquidation, it consideredfinancial condition of the subsidiary and others.

2) Transactions of the subsidiaries with related companies and others（For the year ended March 31, 2020）
None.
(For the year ended March 31, 2019)
Type of Related Party

Directors

Name

Tatsuo Teratani

Address
CapitalType of business
Voting right share owing (share owned)
Business relationship
1) Description of transactions
Amounts of transactions
Accounts
Year-end balances

Director
Non-direct
0.0％
Conclusion of engineering guidance
Payment of engineering guidance fee￥9 million
Accrued expense-

2. Information on the parent company and significant affiliate companies(For the years ended March 31, 2020 and 2019)1) Information on the parent company
None.
2) Financial statements of a significant affiliate company
A significant affiliate company is UACJ Corporation (hereafter “UACJ”).
Summarized aggregate financial statement data of UACJ is as follows.
Thousands of U.S.
dollars (Note 3)
2019
2020
¥348,291$2,675,176¥458,933$4,295,056¥273,269$2,448,463¥327,751$2,644,769¥206,204$1,877,000

Millions of yen
Total current assets
Total non-current assets
Total current liabilities
Total non-current liabilities
Net assets

2020¥288,919¥463,866¥264,434¥285,635¥202,716

Sales
Profit before income taxes
Profit attributable to owners of parent¥615,150(¥1,622)¥2,03857¥661,330¥10,041¥1,116$5,695,833($15,019)$18,870