CONSOLIDATED FINANCIAL STATEMENTSFURUKAWA ELECTRIC CO., LTD. AND
ITS SUBSIDIARIESMarch 31, 2013 and 2012



CONSOLIDATED BALANCE SHEETSFURUKAWA ELECTRIC CO., LTD. AND
ITS SUBSIDIARIESAt March 31, 2013 and 2012

Millions of yen
2013
2012
ASSETS
Current assets:
Cash and bank deposits (Notes 4 and 9)
Marketable securities (Note 5)
Trade receivable
Inventories (Note 6)
Deferred income taxes (Note 16)
Other current assets
Allowance for doubtful accounts
Total current assets?

Non-current assets:
Investments and long-term loans(Notes 5, 7 and 9)
Property, plant and equipment, net ofaccumulated depreciation (Notes 8, 9 and 15)
Deferred income taxes (Note 16)
Other assets
Allowance for doubtful accounts
Total non-current assets
?

Total

㻞

Thousands of
U.S. dollars(Note 3)2013

31,293 ?
17
222,431104,249
6,312
29,562(1,220)392,644

33,246 $114
221,998
94,8896,732
34,014(897)
390,096

332,904
181
2,366,287
1,109,032
67,149314,489(12,978)
4,177,064

117,709103,368

1,252,223

280,087
5,895
25,811(2,444)
427,058

262,126
10,681
26,312(2,468)400,0192,979,649
62,713
274,585(26,000)
4,543,170

819,702?

790,115$8,720,234

Millions of yen
2013
2012
LIABILITIES AND NET ASSETS
Current liabilities:
Short-term debt (Note 9)
Current portion of bonds (Note 9)
Trade payable
Customers' advances
Accrued income taxes
Deferred income taxes (Note 16)
䚷 Provision for product defect䚷 compensation(Note 2h)Provision for loss on disaster(Note 2䡆)Other current liabilities
Total current liabilities
Long-term liabilities :Bonds(Note 9)Long-term debt (Note 9)
Accrued retirement benefits (Note 10)
Provision for environmental costs (Note 2i)
Asset retirement obligation
Deferred income taxes (Note 16)
Other long-term liabilities
Total long-term liabilities?

125,050
2,333
133,125
3,161
2,847
42

?

141,857
16,562122,000
3,463
1,117
30

Thousands of
U.S. dollars(Note 3)2013$

1,330,319
24,8191,416,223
33,62830,287
447

1,397
144
59,769327,868

1,587
262
58,828345,706

14,862
1,532
635,840
3,487,957

30,284
162,831
52,294
12,048
1,214
1,307
9,012
268,990

22,547
144,254
57,566
12,141
1,214
746
8,372
246,840

322,170
1,732,245
556,319
128,170
12,915
13,904
95,8732,861,596

69,395
21,46876,12569,395
21,46872,482738,245
228,383
809,840(275)
166,713(274)
163,071(2,925)
1,773,543

18,160

11,548

193,191

419

590

4,457

(4,206)(15,346)(973)
57,104(4,057)(26,457)(18,376)
52,874(44,744)(163,255)(10,351)
607,489

Contingent liabilities (Note 12)
Net assets
Shareholders' equity (Note 11)
Common stock䚷 Authorized shares,
2,500,000 thousand in 2013 and 2012
䚷 Issued shares,
䚷706,669 thousand in 2013 and 2012
Capital surplus
Retained earnings
Common treasury stock, at cost
596 thousand in 2013
590 thousand in 2012
Total shareholders' equity
Accumulated other comprehensive income
Unrealized gain on
available-for-sale securities (Note 5)
Deferred gain on derivatives
under hedge accounting (Note 2c)
Adjustments for retirement benefitsof an overseas subsidiary
Foreign currency translation adjustments
Total accumulated other comprehensive income
Minority interests
Total net assets

222,844
197,569
Total?
819,702 ? 790,115
See accompanying notes to consolidated financial statements.
㻟$2,370,681
8,720,234

CONSOLIDATED STATEMENTS OF OPERATIONSFURUKAWA ELECTRIC CO., LTD. AND
ITS SUBSIDIARIESFor the years ended March 31, 2013 and 2012

Net sales?
Cost of sales (Note 14)
Gross profit
Selling, general and administrative
expenses (Note 14)
Operating income
Other income (expenses):
Interest and dividend income
Interest expense
Foreign exchange income (loss), net
Equity in income of non-consolidated
subsidiaries and affiliates
Gain on sales of investment securities(Note 5)
Loss on write-down of investment securities
Reversal of provision for doubtful accounts
Gain on disposal of property, plant andequipment
Loss on disposal of property, plant andequipment
Impairment loss (Notes 2r and 15)
䚷 Charges for violating U.S. antitrust law
Business restructuring costs
Gain from insurance proceeds
Cartel-related costs
Other, net
Income before income taxes
and minority interests
Income taxes (Note 16) :Current
Deferred
Net income (loss) before minority interests
Minority interests in earning of
consolidated subsidiaries
Net income (loss)?

Millions of yen
2013
2012
924,717 ?
918,808
786,826
786,952
137,891
131,856

Thousands of
U.S. dollars(Note 3)
2013$
9,837,415
8,370,489
1,466,926

120,128
17,763

115,909
15,947

1,277,958
188,968

2,139(5,067)
2,678

2,312
(5,240)(86)

22,755(53,904)
28,489

112

126

1,191

3
(170)
61

5,655
(575)
364

32
(1,809)
649

166

8,371

1,766

(839)
(2,582)(1,709)1,783(1,099)(408)(4,932)(1,419)(2,025)(15,296)(1,740)1,303(654)(5,108)(14,012)(8,926)(27,468)(18,181)
18,968(11,691)(4,340)(52,469)

12,831

1,935

136,500

4,823
2,217
7,040
5,791

5,608
5,889
11,497(9,562)51,30923,58574,89461,606

2,214

1,561

23,553?

3,577(11,123)

$

Yen
2013
Per common share (Notes 2p and q)
Basic net income (loss)
Diluted net income
Cash dividends

?
?

5.07
3.00

?

(15.75)2.50

See accompanying notes to consolidated financial statements.

㻠

U.S. dollars
2013

2012
?

38,053

$
$

0.05
0.03

CONSOLIDATED STATEMENTS OF COMPREHEMSIVE INCOMEFURUKAWA ELECTRIC CO., LTD. AND
ITS SUBSIDIARIESFor the years ended March 31, 2013 and 2012
Thousands of
U.S. dollars(Note 3)2013

Millions of yen
2013
2012
Net income (loss) before minority interests
Other comprehensive income
Unrealized gain or loss on available-for-salesecurities
Deferred gain or loss on derivatives under hedge
accounting
Adjustments for retirement benefits of an overseas
subsidiary
Foreign currency translation adjustments
Share of other comprehensive income of affiliates
accounted for by the equity method
Total other comprehensive income (Note 17)
Comprehensive income (Note 17)
Attributable to :Shareholders of the parent company
Minority interests?

5,791 ?

(9,562) $61,606

6,702(2,655)71,298(151)

34(1,606)(141)
11,288(444)(3,440)(1,500)120,085?

2,138
19,83625,627 ?

(912)(7,417)(16,979) $22,744211,021272,627?
?

21,001 ?
4,626 ?

(17,743) $764 $223,415
49,212

See accompanying notes to consolidated financial statements.

㻡CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETSFURUKAWA ELECTRIC CO., LTD. AND
ITS SUBSIDIARIES(For the years ended March 31, 2013)
Millions of yen
Shareholders' equity

Balance at April 1, 2012
Net income
Net effect of increase in consolidated
subsidiaries
Net effect of decrease in affiliates
accounted for by the equity method
Acquisition of treasury stock
Disposal of treasury stock
Net change during the year
Balance at March 31, 2013

Commonstock㼈
69,395-㼈

Capitalsurplus㼈
21,468---69,395-㼈Retainedearnings
72,482
3,577

21,468

106

-

(40)

-

-

(0)
㼈

㼈

Commontreasury
stock
(274)
-

㼈

䚷䚷 Total
Shareholders'equity㼈
163,071
3,577
106
(40)
(1)
0

(1)
0
76,125

㼈

(275)

166,713㼈Millions of yen

Balance at April 1, 2012
Net income
Net effect of increase in consolidated
subsidiaries
Net effect of decrease in affiliates
accounted for by the equity method
Acquisition of treasury stock
Disposal of treasury stock
Net change during the year
Balance at March 31, 2013

Accumulated other comprehensive income
Adjustments
Unrealized
Foreign
Deferred gain
gain onfor retirement
on derivatives
currency
available-forunder hedgetranslation
benefits of an overseas
sale securities accounting
subsidiaryadjustments
㼈
11,548㼈
590
㼈
(4,057) 㼈(26,457)
-

㼈

-

-

-

6,612
18,160

-

(171)
419

㼈

Minority
interests
52,874
-

-

-

-

(149)
(4,206)

㼈Totalaccumulated othercomprehensive
income㼈(18,376) 㼈-

11,111(15,346)

㼈

17,403
(973)

㼈

4,230
57,104

Total
accumulated othercomprehensive
income㻐(195,489) 㻐-

Minority
interests
562,489
-

-

-

㼈

㼈

Total net
assets197,569
3,577
106

㼈

(40)
(1)
0
21,633
222,844

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

Commonstock
Balance at April 1, 2012
Net income
Net effect of increase in consolidated
subsidiaries
Net effect of decrease in affiliates
accounted for by the equity method
Acquisition of treasury stock
Disposal of treasury stock
Net change during the year㻐Balance at March 31, 2013

㻐738,245-

Capitalsurplus㻐

228,383-㻐

771,085
38,053

㻐

(2,915)
-

-

-

1,128

-

-

-

(426)

-

738,245-(0)㻐

228,383㻐䚷䚷TotalShareholders'equityCommontreasurystock

Retainedearnings

㻐1,734,798
38,053
1,128
(426)
(10)
0

(10)
0
-

809,840

㻐

(2,925)

㻐

1,773,543

Thousands of U.S. dollars (Note 3)

Balance at April 1, 2012
Net income
Net effect of increase in consolidated
subsidiaries
Net effect of decrease in affiliates
accounted for by the equity method
Acquisition of treasury stock
Disposal of treasury stock
Net change during the year
Balance at March 31, 2013

Accumulated other comprehensive income
Unrealized
Foreign
Deferred gain
Adjustments
gain onon derivatives
for retirement
currency
under hedge
benefits of an overseas translation
available-foraccounting
subsidiaryadjustments
sale securities(43,159) 㻐(281,457)
㻐122,851
㻐
6,276
㻐
-

㻐

70,340
193,191

㻐

-

-

-

(1,819)4,457-

118,202(163,255)(1,585)(44,744)㻐

See accompanying notes to consolidated financial statements.

㻢

㻐

㻐

185,138(10,351)

㻐

45,000607,489㻐

Total net
assets2,101,798
38,053
1,128

㻐

(426)
(10)
0
230,138
2,370,681

㼈21,468-

Capitalsurplus㼈
21,468-㼈㼈Millions of yen

(274)

(3)

Millions of yen

㼈

-

(1)

72,482-

㼈Commontreasury
stock
(271)
-

483

Retainedearnings
87,007(3,884)(11,123)

Shareholders' equity

㼈(2,674)
11,548

-

㼈

(48)
590

-

-

㼈

㻣

-

-

(440)
(4,057)

㼈

(3,584)(26,457)-

Accumulated other comprehensive income
Deferred gain
Unrealized
Foreign
Adjustments
on derivatives
for retirement
currency
gain onbenefits of an overseas
translation
available-for- under hedge
subsidiaryadjustments
sale securities accounting(3,617) 㼈(22,873)㼈
14,222
㼈
638
㼈
-

㼈

69,395-

Commonstock㼈
69,395-

See accompanying notes to consolidated financial statements.

Balance at April 1, 2011
Cash dividends paid
Net loss
Net effect of increase in consolidated
subsidiaries
Net effect of increase in affiliates
accounted for by the equity method
Acquisition of treasury stock
Net change during the year
Balance at March 31, 2012

Balance at April 1, 2011
Cash dividends paid
Net loss
Net effect of increase in consolidated
subsidiaries
Net effect of increase in affiliates
accounted for by the equity method
Acquisition of treasury stock
Net change during the year
Balance at March 31, 2012

(For the years ended March 31, 2012)

163,071

㼈

(6,746)(18,376)

-

-

㼈

Total
accumulated othercomprehensive
income㼈(11,630) 㼈
-

㼈

(1)
(3)

483

䚷䚷 Total
Shareholders'equity㼈
177,599(3,884)(11,123)

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETSFURUKAWA ELECTRIC CO., LTD. AND
ITS SUBSIDIARIES

2,938
52,874-

Minority
interests
49,936
-

㼈

(1)
(3)
(3,808)
197,569

483

Total net
assets㼈 215,905(3,884)(11,123)

CONSOLIDATED STATEMENTS OF CASH FLOWSFURUKAWA ELECTRIC CO., LTD. AND
ITS SUBSIDIARIESFor the years ended March 31, 2013 and 2012

Millions of yen
2013
2012
Cash flows from operating activities:
Income before income taxes
and minority interests
Adjustments for:
Depreciation and amortization
Gain or loss on sales of marketable securities
and investment securities
Equity in income of non-consolidated
subsidiaries and affiliates
Gain or loss on disposal of property, plantand equipment, net
Loss on write-down of inventories
Loss on write-down of investment securities
Impairment loss
Interest and dividend income
Interest expense
Foreign exchange (income) loss, net
Decrease in trade receivable(Increase) decrease in inventories
Increase (decrease) increase in trade payable
Decrease in accrued retirement benefits
Decrease in provision for environmental costs
Other, net
SubtotalInterest and dividend income received
Interest expense paid
Income taxes paid
Net cash provided by operating activities?

Cash flows from investing activities:
Proceeds from sales of marketable securities
Purchase of property, plant andequipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Proceeds from sales of non-current assets
Decrease in short-term loan, net
Decrease in time deposit, net
OtherNet cash used in investing activities

㻤

1,935

䠁 136,500

35,347

39,216

376,032

4(4,973)

43

(112)

(126)

(1,191)

672
1,770
170
2,582
(2,139)
5,067
(432)
9,023
(6,284)
5,003(5,567)(92)
2,268
60,111
2,706(2,657)(5,212)
54,948(6,952)
1,594
575
2,025
(2,312)
5,240
71
4,728
3,547
(833)
(4,822)(1,276)
4,505
42,1422,810(5,357)(8,821)
30,774

7,149
18,8301,809
27,468(22,755)
53,904(4,596)
95,989(66,851)
53,223(59,223)(979)
24,127
639,479
28,787(28,266)(55,447)
584,553

100

100

1,064

(45,754)(2,202)(4,740)
306
508
4,685
2,504
(347)
(44,940)(30,641)(2,266)(20,586)
8,595
13,113
11,280698(545)(20,252)(486,745)(23,425)(50,425)
3,255
5,404
49,84026,638(3,691)(478,085)

12,831?

Thousands of
U.S. dollars(Note 3)2013

Thousands of
U.S. dollars(Note 3)2013

Millions of yen
2013
2012
Cash flows from financing activities:
Decrease in short-term debt, net
Proceeds from long-term debt
Repayment of long-term debt
Proceeds from issuance of bonds
Repayment of redemption of bonds
Proceeds from minority shareholders
Cash dividends paid
Cash dividends paid to minority shareholders
Payments for purchase of common treasury stock
Proceeds from sales and leaseback of property,
and equipment
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
Net increase in cash and cash equivalents from mergers
Cash and cash equivalents at end of year (Note 4)?

(12,145)
52,298(45,177)
10,070(16,562)517(22)(1,257)(1)(1,234)25,260(28,500)
10,270(24,227)
1,133(3,887)(1,175)(1)(129,202)
556,362(480,606)
107,127(176,191)
5,500
(234)
(13,372)
(11)

1,507
(630)
(11,402)(484)(22,845)

16,032(6,703)(121,298)

1,671
277
30,084(790)(13,113)37,647

17,777
2,947
320,042110
630,477

5,550

1,170
64
䠁 324,223?

See accompanying notes to consolidated financial statements.

㻥

30,084 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") and its subsidiaries are prepared on the basis of accounting principles
generally accepted in Japan, which are different in certain respects as to application anddisclosure requirements from International Financial Reporting Standards (hereinafter“IFRSs”), and are compiled from the consolidated financial statements prepared by theCompany as required by the Financial Instruments and Exchange Law of Japan.
The accompanying consolidated financial statements include the accounts of the Company
and significant companies controlled by directly or indirectly by the Company.
Companies over which the Company exercises significant influence in terms of theiroperating and financial policies have been accounted for by the equity method.
The company applies the Practical Solution on Unification of Accounting Policies Applied
to Foreign Subsidiaries for Consolidated Financial Statements (ASBJ Practical issues task
Force (PITF) No.18) and the Practical Solution on Unification of Accounting Policies
Applied to Associates Accounted for using Equity Method (PITF No.24).
In accordance with these PITF, the accompanying consolidated financial statements havebeen prepared based on the financial statements of foreign consolidated subsidiaries andaffiliates prepared in accordance with either IFRSs or accounting principles generally
accepted in the United States of America as adjusted for certain items including goodwill,
actuarial differences and capitalized development costs.
Certain reclassifications have been made to the prior year's consolidated financial
statement to conform to the current year presentations.

2.

Significant Accounting Policiesa)Basis of consolidation
1) The consolidated financial statements include the accounts of the Company andits 115 major subsidiaries in 2013. All significant intercompany accounts andtransactions have been eliminated in consolidation.
Investments in its 18 major affiliates in 2013, are accounted for by the equity method.
The excess of purchase price over the value of net assets of businesses acquired, whichis included in “Other assets”, is in principle, amortized over a five-year period or the10

estimated useful lives, if the useful life, over which future economic benefits are
expected, can reasonably be estimated, using the straight-line method.
2) Effective from the year ended March 31, 2013, FURUKAWA INDUSTRIAL S.A.
PRODUTOS ELETRICOS and its three subsidiaries, OFS Fitel, LLC and its eightsubsidiaries, and Furukawa Circuit Foil Taiwan Corporation have changed its fiscal
year end from December 31 to March 31 to further enhance appropriate disclosure of
consolidated financial information. The financial statements of Furukawa Electric(Shenzhen) Co., Ltd. and FURUKAWA METAL (THAILAND) PUBLIC CO., LTD
whose statutory financial year end was December 31, have been consolidated by using
their financial statements as of the parent fiscal year end which are prepared solely forconsolidation purpose to further enhance appropriate disclosure of consolidated
financial information.
Accordingly, consolidated financial statements have been prepared based on financial
statements for the fifteen months fiscal period, from January 1, 2012 to March 31,
2013 of those sixteen consolidated subsidiaries.
As a result of this change, net sales, operating income, income before income taxes
and minority interests and net income increased by ¥23,920 million ($254,468
thousand), ¥793 million ($8,436 thousand), ¥800 million ($8,511 thousand), ¥791
million ($8,415 thousand), respectively.

b)

Cash and cash equivalents
Cash and cash equivalents in the consolidated statements of cash flows are composedof 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
risk of 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 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 the purpose of computing gain and loss on securities sold, the cost of thesesecurities is determined using the moving average method. Securities that do not havereadily determinable fair values are recorded at cost. The Company and its
consolidated subsidiaries do not hold any trading securities.
Debt securities due within one year are presented as “Marketable securities” undercurrent assets, and all other securities are presented as “Investments and long-termloans” in the accompanying balance sheets.
Additional information with respect to marketable debt and equity securities is
included in Note 5.

112) Derivatives
Derivative financial instruments are measured at fair value, if determinable, andresulting gain or loss is included in net income, with the exception that gain or loss oncertain qualified hedging instruments may be deferred as an a part of “Net assets”
until the gain and loss on the hedged items is recognized. The Company’s hedging
activities for interest rate risk on outstanding debt, foreign currency risk andfluctuation risk in market prices are considered qualified hedge transactions.
Additional information on derivatives is presented in Note 19.

d)Allowance for doubtful accounts
Allowance for doubtful accounts is provided at the amount of estimatednon-recoverable receivables on an individual account basis, plus the amountcalculated by applying the historical bad debt loss ratios to the remaining receivables.

e)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.

f)

Property, plant and equipment, and depreciation
Property, plant and equipment, including significant capital expenditures andadditions, are stated at cost. Repairs and maintenance expense are charged to income
as incurred.
Buildings owned by the Company and its significant domestic consolidated
subsidiaries are depreciated using the straight-line method and the remaining
properties of these companies are depreciated using the declining-balance method.
Foreign consolidated subsidiaries’ properties are depreciated principally using thestraight-line method.

g) Accrued 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 jobclassification and performance. The liability for these severance indemnities is notfunded.
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 ormore years of service may elect to receive benefits in the form of pensions. These plans,
which are non-contributory and funded, generally provide for an annuity payable overa ten-year period subsequent to retirement. The annual contributions for pension

12benefits include current service costs, amortization of prior service costs and intereston the unfunded portion of past service costs.
The Company and its domestic consolidated subsidiaries accrue retirement benefits
based on the estimated amounts of projected benefit obligation reduced by the fairvalue of the pension plan assets at each fiscal year-end. Certain assumptions used inaccounting for the benefit plans are described in Note 10.
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 allowableintangible assets, is directly charged to retained earnings, net of tax benefit, in theaccompanying consolidated financial statements.
In addition, retirement benefits to directors and statutory auditors of the Company’s
consolidated subsidiaries are provided at the amount which would be required if all
directors and statutory auditors were to retire at the balance sheet date according tointernal regulations.

h) Provision for product defect compensation
Provision for product defect compensation is provided at an amount deemed necessary
to cover 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)Provision for loss on disaster
Provision for loss on disaster is provided to cover estimated future costs in order toundertake the restoration of damaged assets due to the Great East Japan Earthquake.

k) Leases
Depreciation of finance lease assets that transfer ownership of the assets, mainly
office equipment in the copper foil business division, is calculated by the same method
applied for property, plant and equipment.
Depreciation of finance lease assets, which do not transfer ownership of the assets at
the end of the lease term, is calculated by the straight-line method over the lease
periods, which are deemed as the useful lives, assuming no residual value.
However, finance lease transactions entered before March 31, 2008, which do notsubstantially transfer ownership of the assets, are continuously accounted for as
operating leases.

l)

Revenue recognition

13

Operating revenue is mainly recorded upon shipment of goods.
Revenue is recognized by the percentage-of-completion method for construction
contracts of which the outcome of the progress performed by the end of the year isdeemed to be certain. The construction progress is estimated based on the percentage
of construction costs incurred for the work performed to date compared to theestimated total construction costs (“cost-comparison method”). For other construction
contracts, such revenue is recognized by the completed-construction method.

m) 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 toincome when incurred, 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.

n) Income taxes
Accrued income taxes are recorded based on the Company’s income tax returns.
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 and the amounts used for income tax purposes, and measured
using the enacted tax rates and laws which will be in effect when differences are
expected to reverse.
The Company has elected to file its tax return under the consolidated tax filingsystem.

o)Translation of foreign currency accounts
Current and non-current monetary items denominated in foreign currencies aretranslated into Japanese yen at exchange rates in effect at the respective balance
sheet dates. Monetary items denominated in foreign currencies, for which foreignexchange forward contracts are used to hedge the foreign currency fluctuation, aretranslated 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 minority interests in the overseas
consolidated subsidiaries and affiliates accounted for by the equity method, aretranslated into Japanese yen at the rates of exchange in effect at the respectivebalance sheet date. The components of net assets excluding minority interests in theoverseas consolidated subsidiaries and affiliates accounted for by the equity method
are translated at their historical exchange rates. Differences arising from translation

14

where two exchange rates have been used are presented under translation
adjustments as a component of net assets.
p) Cash dividends  
Dividends paid out of earnings are, in principle, approved by the shareholders’meeting. Interim dividends can be paid at any time during the fiscal year byresolution of the board of directors, if the Article of Incorporation set out for such
dividends under the Corporate Law of Japan.
The Corporate Law of Japan provides certain limitations on the amount available fordividends.

q) Net income (loss) per common share
The consolidated statements of operations include “basic” and “diluted” per share
information. Basic per share income (loss) is calculated by dividing net income (loss)by the weighted average number of shares of common stock outstanding during therespective years. The weighted average number of shares used in the calculation ofbasic net income per common share was 706,075 thousand and 706,084 thousand forthe years ended March 31, 2013 and 2012, respectively. Diluted net income per share
has not been presented for the years ended March 31, 2013 and 2012, since theCompany has issued no dilutive potential shares.

r)

Impairment of property, plant and equipment
Property, plant and equipment are periodically reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset may
not be recoverable. 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 therecoverable 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.
Additional information on impairment of property, plant and equipment, anddepreciation is presented in Note 15.

s)

Accounting Change
In accordance with an amendment to the Corporation Tax Law effective April 1, 2012,
the Company and its domestic consolidated subsidiaries have changed theirdepreciation method for the property, plant and equipment acquired on or after April 1,
2012, other than certain buildings, to reflect the methods prescribed in the amended
Corporation Tax Law. The effect of this change was immaterial to operating income
and income before income taxes and minority interests.

15

t)

Standards issued but not yet effective
࣭“Accounting Standard for Retirement Benefits” (ASBJ Statement No.26, May 17,
2012)
࣭“Guidance on Accounting Standard for Retirement Benefits” (ASBJ Guidance No.25,
May 17, 2012)(1) Overview
The new accounting standard and related guidance have been developed inconsideration to improvement of financial reporting and international trends. Those
have also been revised, mainly based upon treatment of unrecognized actuarial gains
and losses and unrecognized prior service costs, the calculation method of retirement
benefit obligation and service costs, and enhancing disclosures.
(2) Scheduled date for adoption 
The Company and its domestic consolidated subsidiaries expect to apply theaccounting standard and related guidance effective the fiscal year ended March 31,
2014. However, the Company and its domestic consolidated subsidiaries expect toapply the revision for the calculation method of retirement benefit obligation andservice costs effective the fiscal year beginning on or after April 1, 2014.
(3)Effects of adoption of this accounting standards and related guidance
The Company is currently evaluating the effect of these revisions in preparation of its
consolidated financial statements.

3㸬U.S. Dollar Amounts
Amounts in U.S. dollars are included solely for the convenience of readers outside Japan.
The rate of ¥94 =U.S. $ 1, the approximate rate of exchange for the year ended March 31,
2013, has been used for the purpose of the translation. The inclusion of such amounts is
not intended to imply that Japanese yen have been or could be readily converted, realized
or settled in U.S. dollars at this rate or any other rate.

4.

Cash Flow Information
Cash and cash equivalents at March 31, 2013 and 2012 consisted of:Millions of yen
2013
2012
Cash and bank deposits
Less, time deposits with an
original maturity of more than 3monthsThousands
ofU.S. dollars
2013¥31,293¥33,246$ 332,904(833)(3,175)(8,862)16

Highly liquid securities
Cash and cash equivalents
5.

17

13

181

¥30,477¥30,084$324,223

Debt and Equity Securities
Investments in debt and equity securities that have a readily determinable fair value
at March 31, 2013 and 2012 included in “Marketable securities” (Current assets) andin “Investments and long-term loans” (Non-current assets) are summarized as follows:
Millions of yen
2013
Cost

Fair valueGrossunrealized
gain

Gross
unrealized
loss

㸫
120

¥ 㸫
5

¥ 㸫
㸫

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

¥

㸫
115

¥

¥ 115

¥ 120

¥

5

  ¥ 㸫¥ 21,540
7¥ 49,9395¥ 30,103㸫¥ (1,704)(2)

Total available-for-sale securities ¥ 21,547¥ 49,944¥ 30,103¥ (1,706)

Available-for-sale securities:
Marketable equity securities
Other securities

Thousands of U.S. dollars
2013
Fair valueGrossunrealized
gain

Gross
unrealized
loss

$ 㸫

$ 㸫

$ 㸫

$ 㸫

1,223
$ 1,223

1,276$ 1,276

53
$ 53

㸫
$ 㸫

Available-for-sale securities:
Marketable equity securities$ 229,149
Other securities
74
Total available-for-sale securities $ 229,223$ 531,26653$ 320,245㸫$ (18,128)(21)$ 531,319$ 320,245$ (18,149)

Cost

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

17Millions of yen
2012
Cost

Fair valueGrossunrealized
gain

Gross
unrealized
loss

Held-to-maturity debt securities:
Government bonds, municipal bonds
and other
Other debt securities

¥1
211

¥1
213

¥ 㸫
2

¥ 㸫
㸫

Total held-to-maturity debt securities

¥ 212

¥ 214

¥ 2

  ¥ 㸫Available-for-sale securities:
Marketable equity securities
Other securities
Total available-for-sale securities¥ 21,803
7¥ 21,810¥ 39,8275¥ 39,832¥ 20,076㸫¥ 20,076¥ (2,052)(2)¥ (2,054)

ceeds from sales of available-for-sale securities for the years ended March 31, 2013
and 2012 were ¥685 million ($7,287 thousand) and ¥ 6,957 million, respectively.
The gross realized gains on those sales for the years ended March 31, 2013 and 2012were ¥3 million ($32 thousand) and ¥5,355 million, respectively, and gross realized
losses were ¥8 million ($85 thousand) and ¥0 million, respectively.
Impairment loss on available-for-sale securities with fair value amounted to ¥570
million was recorded for the year ended March 31, 2012.

6.

Inventories
Inventories at March 31, 2013 and 2012 consisted of the following:

Millions of yen
2013
2012
Finished goods
Work in process
Raw materials and supplies¥ 30,715
31,593
41,941¥ 104,249

18¥ 28,072
28,60938,208¥ 94,889

Thousands of
U.S. dollars
2013$ 326,755
336,096446,181$ 1,109,032

P
r
o

7.

Investments and Long-term Loans
Investments and long-term loans at March 31, 2013 and 2012 consisted of the following:

Millions of yen
2013
2012
Non-consolidated subsidiaries
and affiliates
Other

8.

¥ 63,908
53,801¥ 117,709¥ 59,412
43,956¥ 103,368

Thousands of
U.S. dollars
2013$ 679,872
572,351$ 1,252,223

Property, Plant and Equipment
Property, plant and equipment at March 31, 2013 and 2012 consisted of the following:

Millions of yen
2013
2012
Land
Buildings
Machinery and equipment
Leased assets
Construction in progress
Accumulated depreciation¥86,154261,521748,429
1,876
20,264
1,118,244(838,157)¥ 280,087

19¥ 84,938
252,843
719,298
1,579
10,932
1,069,590(807,464)¥ 262,126

Thousands of
U.S. dollars
2013$ 916,532
2,782,138
7,962,011
19,957
215,575
11,896,213(8,916,564)$ 2,979,649

9.

Short-term Debt, Long-term Debt and Bonds
Short-term debt represents notes payable to banks, most of which are unsecured, bankoverdrafts commercial papers issued by the Company, and bearing interest at rates
ranging from 0.020% to 13.750% and from 0.339% to 10.700% per annum at March 31,
2013 and 2012, respectively.
Bonds and Long-term debt at March 31, 2013 and 2012 consisted of the following:Thousands of
U.S. dollars
2013

Millions of yen
2013
2012
1.76% unsecured bonds due 2012
1.28% unsecured bonds due 2012
1.56% unsecured bonds due 2014
0.69% unsecured bonds due 2015
0.77% unsecured bonds due 2016
0.74% unsecured bonds due 2017
Secured bonds issued by consolidated
subsidiaries, due from 2013 to 2016
with interest rates ranging from
0.93% to 1.97%
Loans, principally from banks and
insurance companies, due from 2013
to 2020 with interest rates ranging
from 0.230% to 10.300% andpredominantly collateralized
Less: portion due within one year

㸫
㸫
2,000
10,00010,00010,000¥ 10,000
5,000
2,000
10,00010,000㸫㸫㸫
21,277
106,383
106,383
106,383

617

2,109

6,564

197,523
230,140
37,025¥ 193,115

188,111227,220
60,419¥ 166,801

2,101,308
2,448,298
393,883$ 2,054,415¥$

At March 31, 2013, the following assets were pledged as collateral for short-term debt of¥2,046 million ($21,766 thousand), long-term debt of ¥1,923 million ($20,457 thousand),bonds of ¥268 million ($2,851 thousand) and others of ¥438 million ($4,660 thousand) :Millions ofyen
2013
Property, plant and equipment
Investments in securities¥ 13,424
986¥14,410

20

Thousands of
U.S. dollars
2013$ 142,809
10,489$ 153,298

At March 31, 2012, the following assets were pledged as collateral for short-term debt of¥3,460 million, long-term debt of ¥2,455 million, bonds of ¥422 million and others of ¥409
million :Millions ofyen
2012
Property, plant and equipment
Investments in securities
Cash and bank deposits¥ 13,449
703
154¥ 14,306

The aggregate annual maturities of the non-current portion of long-term debt and bonds
at March 31, 2013 were as follows.
Thousands ofYear ending March 31
Millions of yen
U.S. dollars
2015
2016
2017
2018
2019 and thereafter¥ 58,009
30,052
44,715
26,63233,707¥ 193,115$ 617,117
319,702475,692
283,319
358,585$ 2,054,415

10. Severance and Retirement Plans
The following table sets forth the retirement benefit obligation, plan assets and funded
status of the Company and its domestic consolidated subsidiaries at March 31, 2013 and2012:

Millions of yen
2013
2012
Projected benefit obligation
Fair value of plan assets
Benefit obligation in excess
of plan assets
Unrecognized actuarial net loss
Unrecognized prior service costs
Net amount recognizedPrepaid pension costs
Accrued retirement benefits
recognized in the consolidatedbalance sheets

Thousands of
U.S. dollars
2013¥ 118,306¥114,105$ 1,258,574(57,722)(42,909)(614,064)

60,584(7,752)(859)
51,973644,510(82,468)

321

71,196(12,614)(1,016)57,566
㸫¥ 52,294¥ 57,566$ 556,319

21(9,138)552,904
3,415

The severance and retirement benefit expenses of the Company and its consolidated
subsidiaries included the following components for the years ended March 31, 2013 and2012.

Millions of yen
2013
2012

Thousands of
U.S. dollars
2013

Service costs¥ 6,420¥ 6,577$ 68,298Interest costs

2,362

2,270

25,128

Expected return on plan assets(1,541)(1,243)(16,394)

Amortization of actuarial differences

2,937

2,778

31,245

Amortization of prior service costs

157

155

1,670

¥ 10,335¥ 10,537$ 109,947

Retirement benefit expense

Assumptions used in accounting for the employees’ retirement benefit plans for the years
ended March 31, 2013 and 2012 were as follows:
1.2̺6.0% for 2013
Discount rateand 1.2̺4.3% for 2012
2.0̺7.5% for 2013
Expected rate of return on plan assets
and 2.0̺8.6% for 2012
Method of attributing the projected benefits
Straight-line basis
to periods of service
1 - 15 years for 2013
Amortization of unrecognized prior service costs
and for 2012
Amortization of unrecognized actuarial
1 - 15 years for 2013
differences (amortization starts from theand for 2012
year following that year in which they arise)

11.

Shareholders’ Equity
Under the Corporate Law of Japan, cash dividends may be paid at any time during the
fiscal year with certain conditions. An amount equal to 10% of dividends is required to beappropriated as additional paid-in capital (a component of “Capital surplus”) or legal
reserve (a component of “Retained earnings”) until the amount of additional paid-in
capital and legal reserve equals 25% of common stock. The cash dividends paid out ofadditional paid-in capital and/or legal reserve are recorded in the financial year in which
the proposed appropriation of retained earnings is approved by the board of directors
and/or the shareholders. The maximum amount that the Company can distribute as cash
dividends is calculated based on the non-consolidated fiscal statements of the Company.

(Dividends)
Dividends whose record date is attributable to the year ended March 31, 2013 but tobe effective in the following year.
Approvals by shareholders’ meeting held on June 25, 2013 are as follows:

22

Type of shares
Total amount of dividends
Funds for dividends
Dividends per share
Record date
Effective date

12.

Common stock¥2,119 million ($22,543 thousand)
Retained earnings¥3.0 ($0.03)
March 31, 2013
June 26, 2013

Contingent Liabilities
Contingent liabilities at March 31, 2013 and 2012 are as follows.
Thousands of
U.S. dollars
2013

Millions of yen
2013
2012
Loans guaranteed (principally for
non-consolidated subsidiaries andaffiliates)
Repurchase obligation of the
securitization of receivables

¥

¥

5,046

Total

13.

17,750¥22,796

15,936$

4,469¥

188,830
53,681

20,405$242,511

Leases1) Finance lease transactions entered before March 31, 2008, which do not transfer
ownership of the assets
Lease rental expense for the years ended March 31, 2013 and 2012 is summarized asfollows:
Thousands of
U.S. dollars
2013

Millions of yen
2013
2012
Lease rental expense

¥

53

¥

170

$

564

The amounts of outstanding future lease payments at March 31, 2013 and 2012, which
included the portion of interest thereon, are as follows:
Thousands of
U.S. dollars
2013

Millions of yen
2013
2012
Future lease payments:
Within one year
Over one year
Total

¥

6
13
19

¥

23

¥
¥

53
19
72

$
$

64
138
202

Acquisition cost, accumulated depreciation and net book value of the leased assets at
March 31, 2013 and 2012, and depreciation expense for the years ended March 31, 2013
and 2012, assuming capitalization, are summarized as follows:
Thousands of
U.S. dollars
2013

Millions of yen
2013
2012
Acquisition cost
Accumulated depreciation
Net book value
Depreciation

¥ 680
(661)
¥ 19
¥ 53

¥ 1,411(1,339)
¥ 72
¥ 170

$

7,234
(7,032)
202
564

$
$

Depreciation is based on the straight-line method over the lease term of leased assets withzero residual value.
2) Operating lease transactions(Lessees)
The amounts of outstanding future lease payments at March 31, 2013, under
non-cancelable operating lease are as follows:
Thousands of
U.S. dollars
2013

Millions of yen
2013
2012
Future lease payments:
Within one year
Over one year
Total

¥

11
㸫
11

¥

¥
¥

49
11
60

$
$

117
㸫
117

14. Research and Development Expenses
Research and development costs charged to income for the years ended March 31, 2013
and 2012 amounted to ¥ 20,211 million ($215,011 thousand) and ¥18,949 million,
respectively.

15. Impairment Loss
For the purpose of determining whether impairment loss has occurred, the Company andits subsidiaries classify property, plant and equipment into groups by company, businessor business unit, each of which is deemed to generate independent cash flows, and idle
properties into individual independent groups.
(For the year ended March 31, 2013)
Impairment loss by type of assets for the year ended March 31, 2013 consisted of thefollowing:

24

1)

The Company
Usage and Location

Manufacturing equipment and building
for Industrial equipment businesslocated in Hiratsuka city, Kanagawa
prefecture (Idle properties)

Manufacturing equipment for fiber
cable business located in Ichihara-city,
Chiba prefecture (Idle properties)

Manufacturing equipment for copper
foil business located in Nikko-city,
Tochigi prefecture (Idle properties)

Type of asset

Thousands of
U.S. dollars

Building¥ 268$ 2,851

Machinery andequipment

758

8,064

Other

3

32

Building

 120

1,277

Machinery andequipment

89

946

Other

24

255

Building

39415

Machinery andequipment

11

117

Other

4

43

Land

447

4,755

¥ 1,763$ 18,755

Idle properties located inHachinohe-city, Aomori prefecture

Total

2)

Millionsof yenThe consolidated subsidiaries
Usage and Location

Type of asset
Building

Manufacturing equipment and building forfiber cable business located in
Hachinohe-city, Aomori prefecture

Millionsof yenThousands of
U.S. dollars¥ 369$ 3,926

Machinery andequipment

46

489

Other

13

138

Fixed assets for business use located in
Iga-city, Mie prefecture

Land and building

 198

2,107

Fixed assets for business use and otherMachinery,equipment and
other

193

2,053

¥ 819

$ 8,713Total

It has been decided that recoverable amounts of fixed assets for business use were lessthan their carrying amounts due to continuing negative cash flow generated fromoperating activities and the likelihood of the carrying amount not being recoverable byfuture cash flows. Accordingly, the carrying amounts of such assets were reduced to therecoverable amounts. The recoverable amounts of the asset groups were mainly evaluatedbased on the value in use, which was calculated by discounting future cash flows at aninterest rate.

25

The carrying amounts of certain assets forming parts of idle properties were written down
to their recoverable amounts, due to the fact that the carrying amounts were less thantheir fair market value. Recoverable amount of each idle property was mainly evaluatedbased on the net selling value (fair value less costs to sell). Recoverable amount of such
asset group was mainly determined based on either appraisal value prepared by realestate appraisers or assessed value used for property tax purpose. The recoverable
amounts of these assets were reduced to ¥0 because such assets cannot be sold or diverted
to other usage.

(For the year ended March 31, 2012)
1) The Company
Impairment loss by type of assets for the year ended March 31, 2012 consisted of thefollowing:
Usage and Location

Type of asset

Manufacturing equipment for
grass substrates for hard disk
drive business, located in Ichihara
city, Chiba prefecture

Machinery
Other
Total

2)

Millionsof yen¥ 1,795
139¥ 1,934

The consolidated subsidiaries

Impairment loss for land and other for ¥91 million charged to income for the year ended
March 31, 2012.
It has been decided that recoverable amounts of fixed assets for business use were lessthan their carrying amounts due to continuing negative cash flow generated fromoperating activities and the likelihood of the carrying amount not being recoverable byfuture cash flows. Accordingly, the carrying amounts of such assets were reduced to therecoverable amounts. The recoverable amounts of the asset groups were mainly evaluatedbased on the value in use, which was calculated by discounting future cash flows at aninterest rate.

16. Income Taxes
Income taxes applicable to the Company and its domestic consolidated subsidiaries consistof corporation tax, inhabitants’ tax and enterprise tax, which in the aggregate would resultin a statutory income tax rate of approximately 38.0% and 40.6% for the years ended
March 31, 2013 and 2012, respectively. Overseas consolidated subsidiaries are subject toincome taxes in the countries in which they operate.
Summarized below is reconciliation at March 31, 2013 and 2012.

26

Japanese statutory income tax rate
Tax benefits of net operating loss notrecognizedEntertainment expense and other
Dividend income no- taxable
Equity in income of non-consolidated
subsidiaries and affiliates
Valuation allowance
Difference of applicable tax rate of overseas
consolidated subsidiaries
Utilization of loss carried forward
Charges for violating U.S. antitrust law
Amortization of goodwill
Undistributed earnings of overseas
consolidated subsidiaries
Adjustment of deferred tax assets due to change inthe effective statutory income tax rate
Other, net
Effective income tax rate

2013
38.0%

2012
40.6%

2.6
5.9
(4.5)

29.4
18.7
(35.5)

(0.3)
9.3

(2.6)
127.7

(7.8)
2.8

(75.9)(64.1)
348.4
27.1

3.8

3.8

4.9
54.9%

174.2
2.3
594.1%

Deferred tax assets (liabilities) at March 31, 2013 and 2012 consisted of the following:
Millions of yen

Accrued retirement benefits
Loss carried forwards
Accrued bonus
Depreciation
Impairment loss
Other
Gross deferred tax assets
Valuation allowance
Total deferred tax assets
Unrealized gain on
available-for-sale securities
Special reserve fordeferred capital gain
Revaluation difference on land
Other
Total deferred tax liabilities
Net deferred tax assets

Thousands of
U.S. dollars
2013

2013

2012

¥ 16,258
101,449
3,951
4,954
21,024
15,748163,384(134,583)
28,801¥ 18,383
89,891
3,998
4,178
20,991
17,798155,239(124,769)
30,470$ 172,957
1,079,245
42,03252,702
223,660
167,532
1,738,128(1,431,734)
306,394(10,148)(6,388)(107,957)(359)(3,500)(3,936)(17,943)¥ 10,858(436)(3,645)(3,365)(13,834)¥ 16,636(3,819)(37,234)(41,873)(190,883)$115,511

27

17.

Other Comprehensive Income(For the year ended March 31, 2013)1)

The following table presents components of recycled amounts of other comprehensive
income for the year ended March 31, 2013:

Millions of yen
Unrealized gain or loss on available-for-salesecurities
Amount arising during the year
Reclassification adjustments for gains andlosses included in net income
Deferred gain or loss on derivatives underhedge accounting
Amount arising during the year
Reclassification adjustments for gains and losses
included in net income
Adjustments for amounts transferred toassets’ acquisition costs
Adjustments for retirement benefits of an
overseas subsidiary
Amount arising during the year
Reclassification adjustments for gains and losses
included in net income
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 and losses
included in net income
Adjustments for amounts transferred toassets’ acquisition costs
Subtotal before tax effects
Tax effects
Total other comprehensive income

28¥ 10,41737¥ 10,454

852
(391)
(693)

(232)

(725)
584

(141)

11,288

11,288

2,121
(21)
¥ 38

2,138
23,507(3,671)¥ 19,836

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 net income
Deferred gain or loss on derivatives underhedge accounting
Amount arising during the year
Reclassification adjustments for gains and losses
included in net income
Adjustments for amounts transferred toassets’ acquisition costs
Adjustments for retirement benefits of an
overseas subsidiary
Amount arising during the year
Reclassification adjustments for gains and losses
included in net income
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 and losses
included in net income
Adjustments for amounts transferred toassets’ acquisition costs
Subtotal before tax effects
Tax effects
Total other comprehensive income2)$ 110,819
394$ 111,213

9,064(4,160)(7,372)(2,468)(7,713)
6,213(1,500)120,085

120,085

22,564(224)
404

22,744250,074(39,053)$ 211,021

Deferred tax of other comprehensive income for the year ended March 31, 2013:
Millions of yen
Tax
Before-tax
Net-of-tax(expense)amounts
amounts
benefits

Unrealized gain or loss on available-for-salesecurities
Deferred gain or loss on derivatives underhedge accounting
Adjustments for retirement benefits of an
overseas subsidiary
Foreign currency translation adjustments
Share of other comprehensive income ofaffiliates accounted for by the equity method
Total other comprehensive income

29¥ 10,454¥ (3,752)¥ 6,702

(232)

81

(151)

(141)

-

(141)

11,288-

11,288

2,138

-

2,138

¥ 23,507¥ (3,671)¥ 19,836

Thousands of U.S. dollars
Tax
Before-tax
Net-of-tax(expense)amounts
amounts
benefits
Unrealized gain or loss on available-for-salesecurities
Deferred gain or loss on derivatives underhedge accounting
Adjustments for retirement benefits of an
overseas subsidiary
Foreign currency translation adjustments
Share of other comprehensive income ofaffiliates accounted for by the equity method
Total other comprehensive income$ 111,213$ (39,915)$ 71,298(2,468)862(1,606)(1,500)㸫(1,500)120,085㸫

120,085

22,744$ 250,074㸫$ (39,053)

22,744$ 211,021(For the year ended March 31, 2012)
1) The following table presents components of recycled amounts of other comprehensive
income for the year ended March 31, 2012:
Millions of yen
Unrealized gain on available-for-sale securities
Amount arising during the year
Reclassification adjustments for gains andlosses included in net income
Deferred gain or loss on derivatives underhedge accounting
Amount arising during the year
Reclassification adjustments for gains and losses
included in net income
Adjustments for amounts transferred toassets’ acquisition costs
Adjustments for retirement benefits of an
overseas subsidiary
Amount arising during the year
Reclassification adjustments for gains and losses
included in net income
Foreign currency translation adjustments
Amount arising during the year
Reclassification adjustments for gains and losses
included in net income
Share of other comprehensive income ofaffiliates accounted for by the equity method
Amount arising during the year
Reclassification adjustments for gains and losses
included in net income
Adjustments for amounts transferred toassets’ acquisition costs
Subtotal before tax effects
Tax effects
Total other comprehensive income30¥ (1,378)(4,682)¥ (6,060)(2,529)
316
2,232

19

(705)
261

(444)

(3,906)466(3,440)(891)
6¥ (27)(912)(10,837)
3,420¥ (7,417)

2)

Deferred tax of other comprehensive income for the year ended March 31, 2012:

Unrealized gain on available-for-sale securities
Deferred gain or loss on derivatives underhedge accounting
Adjustments for retirement benefits of an
overseas subsidiary
Foreign currency translation adjustments
Share of other comprehensive income ofaffiliates accounted for by the equity method
Total other comprehensive income

18.

Millions of yen
Tax
Before-tax
Net-of-tax(expense)amounts
amounts
benefits¥ (6,060)¥ 3,405¥ (2,655)
19

15

34

(444)
(3,440)-(444)(3,440)(912)¥ (10,837)¥ 3,420(912)¥ (7,417)

Financial Instruments
1. 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 frombanks 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.

31

In relation to accounting for hedge transactions, hedging instruments and hedged items,
hedging policy, and effectiveness of hedge transactions are set out in its 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.
2.

Fair value of financial instruments

The carrying amounts on the consolidated balance sheets, fair value, and differences as ofMarch 31, 2013 and 2012 are as follows. In addition, financial instruments, of which it isextremely difficult to measure the fair value, are not included in the following table.
(Please see “Financial instruments of which the fair value is extremely difficult tomeasure”)(At March 31, 2013)(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) Bonds (including current
portion)(4) 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

32

Millions of yen
Carrying
Fair value
amount (*1)(*1)
¥ 31,293¥ 31,293
222,431
222,431

Difference¥-

115
49,944120
49,944

5-

7,348
311,131(133,125)(125,050)

6,919
310,707(133,125)(125,050)

(429)
(424)
-

(32,617)(162,831)(453,623)(32,862)(165,079)(456,116)(245)(2,248)(2,493)

51

51

458

458

¥ 509

¥ 509

¥ -

(At March 31, 2013)(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

Thousands of U.S. dollars
Carrying
Fair value
Difference
amount (*1)(*1)
$ 332,904$ 332,904$2,366,287
2,366,287-

1,223
531,319

1,276
531,31953-

78,171
3,309,904

73,6073,305,393(4,564)(4,511)(1) Trade payable(1,416,223)(1,416,223)-(2) Short-term debt

(1,330,319)(1,330,319)-(346,989)(349,595)(2,606)(1,732,245)(1,756,160)(23,915)(4,825,776)(4,852,297)(26,521)(3) Bonds (including current
portion)(4) Long-term debt
Total of liabilities
Derivative transactions (*2)
(1) Derivative transactions forwhich hedge accounting does
not apply(2) Derivative transactions forwhich hedge accounting apply

543

543

-

4,872

4,872

-

Total of derivative transactions$ 5,415$ 5,415$ -(*1); Items recorded in liabilities are put in parentheses.
(*2); Assets and liabilities arising from derivative transactions are presented on a net basis
and net liabilities’ items are put in parentheses.

33

(At March 31, 2012)(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) Bonds (including current
portion)(4) 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

Millions of yen
Carrying
Fair value
amount (*1)(*1)
¥ 33,246¥ 33,246
221,998
221,998

Difference¥-

212
39,833

214
39,8332-

6,627
301,916(122,000)(141,857)

6,526
301,817(122,000)(141,857)

(101)
(99)
-

(39,109)(39,173)(64)(144,254)(447,220)(146,636)(449,666)(2,382)(2,446)

(6)

(6)

-

618

618

-

Total of derivative transactions
¥ 612
¥ 612
¥ (*1); Items recorded in liabilities are put in parentheses.
(*2); Assets and liabilities arising from derivative transactions are presented on a net
basis and net liabilities’ items are put in parentheses.

I. Fair value of financial instruments
Assets(1) Cash and deposits
The carrying amount approximates fair value due to the short maturity of these
instruments.
(2) Trade receivable
The carrying amount approximates fair value due to the short maturity of these
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 andthe 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 priceby financial institutions. Marketable securities and investment securities by34

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 toapplying the special treatment of foreign currency exchange contracts and thecarrying amount approximates fair value.
(2) Short-term debt
The carrying amount approximates fair value because of the short maturity ofthese instruments.
(3) Bonds
Fair value of bonds is based on quoted market price, if available. If not, the fairvalue is based on present value by discounting total cash flows of principles andinterest to be paid at the rate considering remaining periods of those bonds and therelated credit risk.
(4) Long-term debt
Fair value of long-term debts is based on the price provided by a financial
institution or the present value of future cash flows discounted using the current
debt rate for similar debt of a comparable maturity. Interest rate swaps subject tospecial treatment are used for long-term floating rate debt. Principle and interestof the debt in which these interest rate swaps are embedded, are discounted using
the current debt rate, which is estimated reasonably for similar debt of acomparable maturity.
Derivative Transactions
Notional amount, fair value, unrealized gain or loss, and others are described in“Note 19. 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 ¥49,617 million ($527,840 thousand) and ¥46,010 million
as of March 31, 2013 and 2012 are not included in (3) Marketable securities andinvestments securities above, because market value are not available and their
future cash flow are not estimated, accordingly it is not practicable to estimate thefair value.

III. The redemption schedule for money claim and held-to-maturity debt securities withmaturity date subsequent to the consolidated balance sheets date:35

(At March 31, 2013)
Millions of yen
Thousands of U.S. dollars
From 1
From 1
Within 1
Within 1
year to 5
year to 5
year
year
years
years
 ¥ 30,449¥ $ 323,926$
222,4312,366,287-

Bank deposits
Trade receivable
Marketable securities andinvestments securities
Held-to-maturity debt securities:a) National bonds, local
bonds and otherb) Other debt securities
16
Total ¥ 252,896¥

170- $ 2,690,383$-(At March 31, 2012)
Millions of yen
From 1
Within 1
year to 5
year
years
 ¥ 32,921¥ 221,998-

Bank deposits
Trade receivable
Marketable securities andinvestments securities
Held-to-maturity debt securities:a) National bonds, local
bonds and other1b) Other debt securities
113
Total ¥ 255,033¥-

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

19.

Additional Information on Derivatives

1. At March 31, 2013
1) Derivative transactions for which hedge accounting does not applya) Foreign currency related transactions

36

Notional
AmountForeign currency:
Sell ¥ 4,760
Buy
2,260
Total ¥ 7,020b)Millions of yen
2013
PortionFair
over 1
value
year
¥
¥

-

Unrealizedgain(loss)¥ (81)41¥ (40)

Thousands of U.S. dollars
2013
PortionNotional
Fair
Unrealized
over 1
Amountvalue
gain(loss)year¥ (81)41¥ (40)$ 50,638
24,043$74,681$-$$ (862)436$(426)$ (862)436$(426)

Commodity related transactions

Notional
AmountMillions of yen
2013
PortionFair
over 1value
year

Unrealizedgain(loss)

Thousands of U.S. dollars
2013
PortionFair
Unrealized
Notional
over 1value
gain(loss)
Amountyear

Forward contracts:
Sell
Buy
Total

¥5,926
2,668¥ 8,594

¥
¥

-

¥ 85
6
¥ 91

¥ 85
6
¥ 91

$ 63,043
28,383$ 91,426

$
$

-

$ 904
64
$ 968

$ 904
64
$ 968

2) Derivative transactions for which hedge accounting applya) Foreign currency related transactions
Millions of yen
2013
Hedgeditem

Notional
AmountPortionover 1
year

Fair
value
㸨

Calculation
method offair value

Thousands of U.S. dollars
2013
Fair
Notional Portion
over 1value
Amountyear
㸨Normal accounting method
Foreign currency:
Sell

Trade
receivable¥4,960Buy

Tradepayable

7,021

¥

-

¥ (258)-426

Forwardrate of
Foreigncurrency
Forwardrate of
Foreigncurrency$ 52,766$-$ (2,745)

74,691-

4,532

Assignment Accounting (special treatment for foreign exchange forward contract)
Foreign currency:
Trade
Sell
4,564
48,553
receivable
Trade
Buy
581
6,181
payableTotal¥ 17,126

¥

-

¥ 168
37

$ 182,191$-$ 1,787

㸨The fair value of foreign currency related transactions subject to assignment
accounting (special treatment for foreign exchange forward contract) embeds inaccounting subject to hedging included in the fair value of the corresponding
trade receivable and trade payable.
b)Interest-rate related transactions

Hedgeditem

Millions of yen

Thousands of U.S. dollars

2013

2013

Notional
AmountPortionover 1year

Normal accounting method (*1):
Receivingfloating
Longrates and term
payingdebt
fixed rates¥3,000¥3,000Special treatment interest rate swap (*2):
Receiving
fixed rates Longand paying
term
floating rates debt
6,142
4,704
Receivingfloating
rates andLongpaying
term
fixed rates
debt
86,86974,548
Receivingfloating
rates andLongpaying
term
floating rates debt
1,000
Total

¥97,011¥82,252

Portionover 1 year

Fair
value

$ 31,915$ 31,915$(330)

65,34050,042

924,128

793,064

10,638-¥(31) $ 1,032,021$875,021

Fair
value

Notional
Amount¥(31)$(330)

㸦Calculation method of fair value㸧
(*1)
The fair value was prices which were provided by financial institutions .
(*2)
The fair value of interest rate swaps subject to special treatment embeds inlong-term debt subject to hedging included in the fair value of thecorresponding long-term debt.

38

c)

Commodity related transactions

Millions of yen
2013
Portion
Fair
HedgedNotional
over 1
item
Amountvalue
year
Normal accounting method:
Forward contracts for metal materials:
Raw
Sell¥1,102¥¥ 156
materials
and work Buy
in process

Total

9,597

2

164

¥ 10,699

¥2

¥ 320

Calculation
method offair value

Forwardrate ofmetalmaterial

Thousands of U.S. dollars
2013
PortionNotional
Fairover 1
Amountvalue
year$ 11,723-$ 1,659

102,096

21

1,745$ 113,819$ 21$ 3,404

2. At March 31, 20121)

Derivative transactions for which hedge accounting does not applya) Foreign currency related transactions

Notional
AmountMillions of yen
2012
Portionover 1
Fair value
year

Unrealizedgain(loss)

Foreign currency:

b)

Sell
Buy

¥ 1,138
654

¥

-

¥ (4)
(4)

¥ (4)
(4)

Total

¥ 1,792

¥

-

¥ (8)

¥ (8)

Commodity related transactions

Notional
AmountForward contracts:
Sell¥ 5,479
Buy
1,539
Total
¥ 7,018

Millions of yen
2012
Portionover 1
Fair value
year
¥
¥

-

¥ (5)
6
¥1

39

Unrealizedgain(loss)
¥ (5)
6
¥1

$

2)

Derivative transactions for which hedge accounting applya) Foreign currency related transactions
Millions of yen
2012
Hedgeditem

Notional
AmountPortionover 1
year

Fair
value
*

Calculation
method offair value

Normal accounting method:
Foreign currency:
Forwardrate of¥ 1,469 ¥ ¥ (27)Sellforeigncurrency
ForwardTrade
rate of
Buy
6,220
391
payableforeigncurrency
Assignment Accounting (special treatment for foreign exchange
forward contract)
Foreign currency:
Trade
3,929
Sell
receivable
Trade
591
Buy
payableTradereceivable

Total¥ 12,209

¥

-

¥ 364

㸨 The fair value of foreign currency related transactions subject toassignment accounting (special treatment for foreign exchange forward
contract) embeds in accounting subject to hedging included in the fair valueof the corresponding trade receivable and trade payable.
b)Interest-rate related transactions

Millions of yen
2012
Fair
PortionHedgedNotional
value
over 1
Amountitem
㸨year
Special treatment interest rate swap:
Receiving fixed rates Longand paying
term
floating rates
debt¥ 3,064¥ Receiving floating
Longrates and paying
term
fixed rates
debt
77,703
47,915
Receiving floating
Longrates and paying
term
floating rates
debt
1,000
Total
¥ 81,767 ¥47,915

40

Calculation
method offair value--㸨The fair value of interest rate swaps subject to special treatment embeds
in long-term debt subject to hedging included in the fair value of thecorresponding long-term debt.
c)Commodity related transactions

Hedgeditem

Notional
AmountMillions of yen
2012
PortionFair
over 1value
year

Normal accounting method:
Forward contracts for metal materials:
Raw
Sell
¥ 967
¥
material
Buy
Total

20.

s and
work inprocess¥ 94

11,4591,072

160¥ 12,426¥ 1,072¥ 254

Calculation
method offair value

Forwardrate ofmetalmaterial

Real estate for rental and others

The Company and certain consolidated subsidiaries have rentable land and rental officebuilding located in Tokyo and other prefecture. Net revenue of such real estate (mainrevenue of such real estate is included in operating revenue and main costs for such realestate are included in operating expenses) amounted to ¥1,542 million ($16,404 thousand)and ¥1,859 million for the year ended March 31, 2013 and 2012,respectively.
The carrying amount, fair value and changes in the value of real estate related to realestate for rental and others are as follows:(For the year ended March 31, 2013㸧
Millions of yen
Carrying amount in the consolidated balance sheets
Opening balance
Net changes
Closing balance¥ 20,001¥(220)¥19,781

Fair value

Thousands of U.S. dollars
Carrying amount in the consolidated balance sheets
Opening balance
Net changes
Closing balance$ 212,776$ (2,340)$ 210,436

Fair value¥ 38,677$411,457(For the year ended March 31, 2012)
Millions of yen
Carrying amount in the consolidated balance sheets
Opening balance Fair value
Opening balance¥24,048¥(4,047)¥20,001

41

Fair value¥38,952

1) The carrying amount is the amount of its acquisition costs less accumulated
depreciation and accumulated impairment losses.
2) The changes in the carrying amount are mainly an increase due to capital
expenditures and a decrease due to sales of real estate amounted to ¥287 million($3,053 thousand) and ¥3,579 million for the year ended March 31, 2013 and 2012,
respectively.
3) Fair value of March 31, 2013 and 2012 is primarily determined based on internal
assessed value according to the Real Estate Appraisal Standards, or amount based on
certain evaluated value and value based on the index appropriately affecting realestate market.

21.

Segment Information

1. Outline of reportable segments
The reportable segment of the Company is a company’s component for which thefinancial information can be obtained separately from its other components, and theBoard of Directors reviews such reportable segments on a regular basis in order todecide allocations of managerial resources and evaluate business performance.
After identifying the Company’s business by industry (hereinafter “unit”), theCompany has applied the company system covering both production and sales
department, and that its strategy of the whole group is worked out and performed, andthe business operations of each unit are monitored and supported by the Chief Officer
system.
The Company decided six reportable segments based on the unit, Furukawa-Sky andthe Chief Officer system, such as Telecommunications, Energy and industrial products,
Electronics and automotive systems, Metals, Light metals and Services and other.

(1) Telecommunications:
Manufacture and sale of optical fiber cable, optical related parts, opticalfiber cable-attached parts and construction, network equipment, etc.
(2) Energy and industrial products:
Manufacture and sale of bare wire, aluminum wire, insulated wire,
power cables, power cable-attached parts and construction, electric wire
tubing, plastic products, thermal engineering electric feeders, etc.
(3) Electronics and automotive systems:
Manufacture and sale of batteries, automobile parts and electric wire,magnet wire, heat pipes, aluminum plates for memory disks, electronic
components and parts, etc.
(4) Metals:
Manufacture and sale of copper products such as copper tubes, rolled
copper products, electrolytic copper foils, shape memory alloys, etc.
(5) Light metals:
Manufacture and sale of light metal products such as aluminum sheets,
aluminum plates, extruded products, etc.
42(6) Services and other:
Service businesses such as real estate, distribution, information, etc.

43

2. Segment information on sales and income (loss), identifiable assets and other items by business for the years ended March 31, 2013 and 2012 issummarized as follows:䠄For the year ended March 31, 2013䠅
Millions of yen
Telecommuni-cations

Net sales
Outside customers
Inter-segment sales
Total
Segment income(loss)
AssetsEnergy andindustrial
products

Electronics andautomotive
systems

MetalsLight
metalsServicesand other

Sub-total

Adjustments*

Total

.
㼈

㼈
㼈

OthersDepreciation㼈
Amortization of goodwill 㼈
Investments inaffiliates accounted forby the equity method㼈Tangible/intangible
fixed assets increased
㼈

140,966 㼈
5,179
146,145
1,902 㼈120,696 㼈

227,872 㼈
37,853
265,725
1,957 㼈163,647 㼈

236,759 㼈
6,948
243,7079,308 㼈175,874 㼈

124,936 㼈
4,510
129,446(1,267) 㼈
101,511 㼈

180,700 㼈
4,292
184,992
4,362 㼈221,221 㼈

13,484 㼈
23,492
36,976
1,508 㼈69,880 㼈

924,717 㼈
82,274
1,006,991
17,770 㼈
852,829 㼈㻙 㼈(82,274)(82,274)(7) 㼈(33,127) 㼈

924,717
䠉
924,717
17,763819,702

5,199 㼈172 㼈4,602 㼈559 㼈6,354 㼈111 㼈5,385 㼈䇲 㼈

10,732 㼈
203 㼈

1,733 㼈346 㼈34,005 㼈
1,391 㼈1,342 㼈̺ 㼈35,347
1,391

783 㼈

18,704 㼈

6,032 㼈4,525 㼈17,691 㼈䇲 㼈

47,735 㼈̺ 㼈47,735

7,396 㼈3,167 㼈9,457 㼈6,706 㼈18,690 㼈

1,478 㼈46,894 㼈878 㼈47,772

䠄For the year ended March 31, 2012䠅
Millions of yen
Telecommuni-cations

Net sales
Outside customers
Inter-segment sales
Total
Segment income(loss)
AssetsEnergy andindustrial
products

Electronics andautomotive
systems

MetalsLight
metalsServicesand other

Sub-total

Adjustments*

Total

.
㼈

㼈
㼈

OthersDepreciation㼈
Amortization of goodwill 㼈
Investments inaffiliates accounted forby the equity method㼈Tangible/intangible
fixed assets increased
㼈

138,794 㼈
5,723
144,517
4,058 㼈108,887 㼈

235,927 㼈
36,315272,242(781) 㼈156,467 㼈

204,461 㼈
7,541
212,002
5,107 㼈161,078 㼈

137,076 㼈
4,547
141,623(43) 㼈
93,443 㼈

190,095 㼈
5,472
195,567
5,710 㼈217,683 㼈

12,455 㼈
24,00836,463
1,696 㼈74,566 㼈

918,808 㼈
83,606
1,002,414
15,747 㼈
812,124 㼈㻙 㼈(83,606)(83,606)200 㼈(22,009) 㼈

918,808䠉
918,808
15,947790,115

5,071 㼈235 㼈6,538 㼈609 㼈5,747 㼈326 㼈6,178 㼈䇲 㼈

12,219 㼈
203 㼈

1,930 㼈346 㼈37,683 㼈
1,719 㼈1,533 㼈̺ 㼈

39,216
1,719

1,102 㼈19,603 㼈

5,483 㼈4,124 㼈15,810 㼈䇲 㼈

46,122 㼈̺ 㼈46,122

6,612 㼈2,928 㼈8,989 㼈2,459 㼈8,262 㼈2,673 㼈31,923 㼈

1,658 㼈33,581

㸦For the year ended March 31, 2013㸧
Thousands of U.S. dollars (Note 3)
Telecommuni-cations

Net sales
Outside customers
Inter-segment sales
Total
Segment income(loss)
AssetsEnergy andindustrial
products.
㻐 1,499,638 㻐 2,424,170 㻐
55,096402,692
1,554,734
2,826,862
㻐
20,234 㻐
20,819 㻐㻐 1,284,000 㻐 1,740,926 㻐Electronics andautomotive
systems

MetalsLight
metals2,518,713 㻐 1,329,106 㻐 1,922,341 㻐
73,91547,97945,6592,592,628
1,377,085
1,968,000
99,021 㻐(13,479) 㻐
46,404 㻐
1,871,000 㻐 1,079,904 㻐 2,353,415 㻐Servicesand other

Sub-total

143,447 㻐 9,837,415 㻐
249,915875,256
393,362
10,712,671
16,043 㻐
189,042 㻐
743,404 㻐 9,072,649 㻐Adjustments*

Total

㻙 㻐
(875,256)(875,256)(74) 㻐
(352,415) 㻐

9,837,415
䠉
9,837,415
188,968
8,720,234

OthersDepreciation㻐
Amortization of goodwill 㻐

55,309 㻐
1,830 㻐48,957 㻐
5,947 㻐67,596 㻐
1,181 㻐57,287 㻐䇲 㻐

114,170 㻐
2,160 㻐18,436 㻐
3,681 㻐361,755 㻐
14,799 㻐

14,277 㻐̺ 㻐

376,032
14,799Investments inaffiliates accounted forby the equity method

㻐8,330 㻐198,979 㻐

64,170 㻐

48,138 㻐

188,202 㻐䇲 㻐

507,819 㻐̺ 㻐

507,819

Tangible/intangible
fixed assets increased㻐

78,681 㻐

33,692 㻐100,606 㻐

71,340 㻐

198,830 㻐

15,723 㻐

498,872 㻐

9,340 㻐508,212

䠆 Inter-segment transactions are eliminated from the consolidated financial statements. Corporate assets areincluded in the consolidated financial statements. Adjustments include increase of tangible/intangible fixed
assets and depreciation related to the corporate assets.
(Change of fiscal year)
Effective from the year ended March 31, 2013, FURUKAWA INDUSTRIAL S.A. PRODUTOS ELETRICOS and
its three subsidiaries, OFS Fitel, LLC and its eight subsidiaries, and Furukawa Circuit Foil Taiwan
Corporation have changed its fiscal year end from December 31 to March 31 to further enhance appropriate
disclosure of consolidated financial information. The financial statements of Furukawa Electric (Shenzhen) Co.,
Ltd. and FURUKAWA METAL (THAILAND) PUBLIC CO., LTD whose statutory financial year end was
December 31, have been consolidated by using their financial statements as of the parent fiscal year end which
are prepared solely for consolidation purpose to further enhance appropriate disclosure of consolidated financial
information.
Accordingly, consolidated financial statements have been prepared based on financial statements for the fifteen
months fiscal period, from January 1, 2012 to March 31, 2013 of those sixteen consolidated subsidiaries.
As a result of this change, net sales of Telecommunications, Electronics and automotive systems and Metals
increased by 㼈14,573 million ($155,032 thousand), 㼈1,271 million ($13,521 thousand) and 㼈8,075 million ($85,904
thousand), respectively and segment income of Telecommunications, Electronics and automotive systems andMetals increased by 㼈712 million ($7,574 thousand), 㼈35 million ($372 thousand) and 㼈46 million ($489
thousand), respectively, compared with previous method had been applied.

44

<Relative information>
Information by regions
㻔For the year ended March 31, 2013)

Net sales㼈
Property, plant and equipment,
net of accumulated depreciation 㼈Japan

Millions of yen
Asia
Other areas

Total

579,004 㼈

237,742 㼈

107,971 㼈

924,717214,390 㼈

46,145 㼈

19,552 㼈

280,087

Japan

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

Net sales㻐 6,159,617 㻐 2,529,170 㻐
Property, plant and equipment,
net of accumulated depreciation 㻐 2,280,745 㻐
490,904 㻐

1,148,628 㻐

9,837,415

208,000 㻐

2,979,649

㻔For the year ended March 31, 2012)

Net sales㼈
Property, plant and equipment,
net of accumulated depreciation 㼈Japan

Millions of yen
Asia
Other areas

Total

591,057 㼈

230,314 㼈

97,437 㼈

918,808

220,469 㼈

28,200 㼈

13,457 㼈

262,126<Information of impairment loss by reportable segments>(For the year ended March 31, 2013)
Millions of yen

Impairment䚷loss

EnergyandTelecommuni-cations
industrial
products
㼈701 㼈
1,072 㼈Impairmentࠉloss㻐

7,455 㻐11,405 㻐Electronics
andautomotive
systemsLight
metals

Metals

248 㼈

54 㼈

59 㼈

Servicesand other

Sub-total

Adjustments

Total

448 㼈

2,582 㼈-㼈

2,582

Thousands of U.S. dollars (Note 3)
2,638 㻐575 㻐628 㻐4,767 㻐27,468 㻐-㻐

27,468(For the year ended March 31, 2012)
Millions of yen

Impairment䚷loss

EnergyandTelecommuni-cations
industrial
products㼈㼈㼈Electronics
andautomotive
systemsLight
metals

Metals1,938 㼈

10 㼈

77 㼈

Servicesand other- 㼈

Sub-total
2,025 㼈Adjustments

-㼈

Total
2,025

<Information of goodwill by reportable segments>(For the year ended March 31, 2013)
Millions of yen

Amortization of goodwill
Goodwill as of March 31

EnergyandTelecommuni-cations
industrial
products
㼈
172 㼈
559 㼈
㼈
272 㼈
560 㼈

Amortization of goodwill
Goodwill as of March 31

㻐㻐

1,830 㻐2,894 㻐5,947 㻐5,957 㻐Electronics
andautomotive
systemsLight
metals

Metals

111 㼈
214 㼈

- 㼈
- 㼈

203 㼈
264 㼈

Servicesand other

Sub-total

Adjustments

Total

346 㼈
3,600 㼈1,391 㼈4,910 㼈

-㼈
-㼈

1,391
4,910

Thousands of U.S. dollars (Note 3)
1,181 㻐- 㻐
2,159 㻐3,681 㻐2,277 㻐- 㻐
2,808 㻐38,298 㻐

14,798 㻐
52,234 㻐-㻐-㻐

14,79852,234(For the year ended March 31, 2012)
Millions of yen

Amortization of goodwill
Goodwill as of March 31

EnergyandTelecommuni-cations
industrial
products
㼈
235 㼈
609 㼈
㼈
410 㼈
1,059 㼈Electronics
andautomotive
systemsLight
metals

Metals

326 㼈
296 㼈

45

- 㼈
- 㼈

204 㼈
468 㼈

Servicesand other345 㼈
3,945 㼈Sub-total
1,719 㼈6,178 㼈Adjustments

-㼈
-㼈

Total
1,719
6,178

23. Related Party Transactions
䠄For the year ended March 31, 2013䠅
Transactions for the year ended March 31, 2013 and the respective balance as of March 31, 2013of the non-consolidated subsidiaries and affiliates of the Company were as follows:
Type of Related Party
Name
Address
CapitalType of business
Voting right share owing (share owed)
Business relationship
Description of transactions
Amounts of transactions
Accounts
Closing balances

Affiliate
VISCAS Corporation.
Shinagawa-ku Tokyo䢠12,100 million
Energy and industrial products
Direct䚷䚷50.0䠂
Sale of material, purchase of finished goods, lease
contracts of real estate, appointment of directors to othercompanies and providing financial support.
Loans guaranteed
䢠5,771 million ($61,394 thousand)䠉䠉䠄For the year ended March 31, 2012䠅
Transactions for the year ended March 31, 2012 and the respective balance as of March 31, 2012of the non-consolidated subsidiaries and affiliates of the Company were as follows:
Type of Related Party
Name
Address
CapitalType of business
Voting right share owing (share owed)

Description of transactions
Amounts of transactions
Accounts
Closing balances

Affiliate
VISCAS Corporation.
Shinagawa-ku Tokyo䢠12,100 million
Energy and industrial products
Direct䚷䚷50.0䠂
Sale of material, purchase of finished goods, lease
contracts of real estate, appointment of directors to othercompanies and providing financial support.
Loans guaranteed
䢠6,254 million
䠉䠉Type of Related Party
Name
Address
CapitalType of business
Voting right share owing (share owed)

Affiliate
Tri-Arrows Aluminum Holding Inc.
U.S.A
$357 million
Light metals
Indirect䚷䚷35.0䠂

Business relationshipAppointing directors of Furukawa-Sky Aluminum
Corp.,which is the consolidated subsidiary of theCompany, and Tri-Arrows Aluminum Holding Inc.

Description of transactions
Amounts of transactions
Accounts
Closing balances

Capital increase䢠10,192 million
䠉䠉Business relationship46

24. Subsequent events
1. Final agreement regarding Business Integration between Furukawa-Sky Aluminum
Corporation and Sumitomo Light Metal Industries, Ltd.
Furukawa-Sky Aluminum Corp. (“FSA”), as a consolidated subsidiary of theCompany and Sumitomo Light Metal Industries, Ltd. (“SLM”) jointly announced that,they have agreed to integrate their business on October 1, 2013 as the effective date(scheduled) (the “Business Integration”) and have entered into a Basic Integration
Agreement, with the spirit of their relationship being based on equality, as
announced in “Execution of Basic Integration Agreement between FSA and SLM”
dated August 29, 2012, FSA and SLM reached final agreement on the Business
Integration and executed the Merger Agreement on April 26, 2013.

2. Issuance of bonds made by the Company
The Company made a comprehensive resolution in the board of directors meeting on
May 9, 2013 to issue domestic unsecured bonds. As a result of this resolution,unsecured bonds were issued on May 28, 2013.
<Outline of this issuance>(1) Total amount of issue: ¥10 billion ($ 106 billion)(2) Issue price: ¥100 per share ($1.06)(3) Amount of redemption: ¥100 per share ($1.06)(4) Coupon rate: 0.79% per annum(5) Closing date: May 28, 2013
(6) Redemption at maturity: May 28, 2018
(7) Use of proceeds: Repayment of debt

47