Fuji Electric Report Financials

Page

01

Fuji Electric Report Financials 2013

Consolidated Financial Highlights

Millions of yen

Thousands of
U.S. dollars*1

2008

2009

2010

2011

2012

2012

Operating Results
Net sales
Japan
Overseas
Operating income (loss)
Net income (loss)¥766,637
585,596
181,040(18,855)(73,306)¥691,223
513,616
177,607
924
6,757¥689,065
510,843
178,221
11,917
15,104¥703,534
525,096
178,437
19,252
11,801¥745,781
567,314
178,466
21,992
26,368$7,933,841
6,035,257
1,898,584
233,967
280,512

R&D and Capital Investment
R&D expenditures
Plant and equipment investment*2
Depreciation and amortization*3¥ 30,394
33,457
23,919¥ 24,296
19,124
26,053¥ 32,568
27,22327,945¥ 32,247
24,98929,755¥ 31,160
31,771
31,054$  331,492
337,992
330,370

Cash Flows
Cash flows from operating activities
Cash flows from investing activities
Free cash flow
Cash flows from financing activities¥ 23,101(12,278)
10,82353,753¥ 11,923(528)
11,395(62,575)¥ 53,853
84,241138,094(93,468)¥ 28,314(13,489)
14,825(32,593)¥ 55,342(24,286)
31,055(56,827)$  588,749(258,370)
330,379(604,550)

Financial Position
Total assets
Total net assets
Interest-bearing debt

¥908,941
146,113416,083¥908,938
196,134
359,790¥805,797
174,935
274,019¥792,848
183,217
255,865¥765,563
215,672
226,717$8,144,296
2,294,392
2,411,893(2.5)(38.1)
(7.5)
14.3
2.5
3.2

0.1
4.4
0.7
19.7
1.8
2.0

1.7
9.0
1.8
19.3
1.2
1.8

2.7
7.4
1.5
20.6
1.2
1.6

2.9
14.7
3.4
25.4
1.0
1.2

—
—
—
—
—
—

Yen

U.S. dollars*1¥(102.57)
182.374.00¥  9.46250.281.50¥ 21.14217.404.00¥ 16.52228.91
4.00¥ 36.90272.295.00$0.3932.897
0.053

22,79919,008
3,791

23,524
18,692
4,832

24,56218,002
6,560

24,973
17,933
7,040

Fiscal year

Financial Indicators
Ratio of operating income (loss) to
Net sales (%)
ROE (Return on equity) (%)
ROA (Return on assets) (%)
Total net assets ratio (%)
Net debt-equity ratio (times)*4
Debt-equity ratio (times)*5
Per Share Data
Net income (loss)
Net assets
Cash dividends
OthersEmployees
Japan
Overseas

Headcount

24,956
18,2716,685*1 The U.S. dollar amounts represent the arithmetic results of translating yen into dollars at ¥94 = U.S. $1, the approximate exchange rate at March 31, 2013.
*2 Plant and equipment investment is the total of investment in tangible fixed assets, including acquisition amounts for lease contracts.
*3 Depreciation and amortization expense is the total of the depreciation of tangible fixed assets and amortization of intangible assets.
*4 Net debt-equity ratio: Net interest-bearing debt (interest-bearing debt – cash and cash equivalents) / Net assets*5 Debt-equity ratio: Interest-bearing debt / Net assets

Contents
Consolidated Financial Highlights ���������������������������������������01
Management’s Discussion and Analysis������������������������������02
Consolidated Balance Sheets ��������������������������������������������09
Consolidated Statements of Income ����������������������������������11
Consolidated Statements of Comprehensive Income ����������12
Consolidated Statements of Changes in Net Assets ����������13
Consolidated Statements of Cash Flows ����������������������������14
Notes to the Consolidated Financial Statements ����������������15
Independent Auditor’s Report ��������������������������������������������36———

Fuji Electric Report Financials 2013

Management’s Discussion and Analysis
Overview

Cost of Sales, Selling, General and Administrative
Expenses, Operating Income

In fiscal 2012, ended March 31, 2013, the operating environ-

Cost of sales increased 7.5% year on year, to ¥587,458 million.

ment for Fuji Electric proved to be difficult for its power electron-

Cost of sales as a percentage of net sales increased 1.1 per-ics and semiconductor operations overseas due to market

centage points, to 78.8%.
Selling, general and administrative expenses decreased 0.9%

stagnation that stemmed from the sovereign debt crisis in
Europe and the delayed recovery in demand, which was par-year on year, to ¥136,331 million. Selling, general and adminis-

ticularly prominent in China. Domestically, economic conditions

trative expenses as a percentage of net sales decreased 1.3

started to decelerate in the summer as a result of sluggish

percentage points, to 18.3%.

conditions in the global economy. However, government mea-

Operating income improved ¥2,740 million year on year, tosures implemented at the end of 2012 brought hope for eco-¥21,992 million. This was because the benefits of thorough cost

nomic recovery, and we are gradually seeing signs of a positive

reduction measures as well as the business restructuring initia-

turn in conditions.

tives implemented in the previous fiscal year outweighed theIn this environment, the Company pushed forward with initia-

impacts of intensified cost competition.

tives for advancing its management policy of “expand energyrelated businesses.” At the same time, we worked to reinforce

Non-Operating Income (Expenses) and Ordinary Income

management foundations by strengthening manufacturingNon-operating income (net) was ¥3,722 million, an improve-capabilities and increasing earning power through rigorous cost

ment of ¥4,420 million compared to the non-operating

reduction, improving cash flows by rigorously reducing invento-

expenses (net) of ¥698 million in the previous fiscal year. Thisries, and building sales and manufacturing bases for expanding

improvement was mainly due to a recording of ¥1,446 million inbusiness overseas.

foreign exchange gains compared to foreign exchange losses of¥1,026 million recorded in the previous fiscal year, and a ¥1,208
million decrease in interest expense.

Financial Performance

As a result, ordinary income was ¥25,714 million, an
improvement of ¥7,160 million from the previous fiscal year.

Net Sales
In fiscal 2012, net sales increased 6.0% year on year, toExtraordinary Income (Loss), Income Before Income¥745,781 million. Domestic net sales were up 8.0% year on

Taxes and Minority Interests

year, to ¥567,314 million. Meanwhile, overseas net sales

Extraordinary income was ¥1,044 million due to gain on sales ofwere ¥178,466 million, largely unchanged from the previous

noncurrent assets, gain on sales of investment securities andfiscal year.

insurance income. Extraordinary income decreased ¥1,327
million year on year, mainly due to a decline in gain on sales of
noncurrent assets.

Net Sales / Ratio of Overseas
Sales to Net Sales(Billions of yen)
800.0

(%)

766.6

745.8

40

Operating Income (Loss) / Ratio of
Operating Income (Loss) to Net Sales

Net Income (Loss) / Ratio of
Net Income (Loss) to Net Sales(Billions of yen)

(Billions of yen)

(%)

30.0

6

691.2 689.1 703.5

600.0

30

25.9

25.4

40.0

11.9

23.9

23.6
20

4

15.1

20.0

6.8

2.2

1.0

11.8

3.5

3

1.7

0

0

–20.0

–3

–40.0

–6

2

0.9
0.1

0

200.0

2.7

2.9

1.7

10.0

400.0

0

10
–2

–10.0

–2.5

–60.0

–18.9
0

6

26.4

22.0
19.3

20.0

25.7

(%)

09/3

10/3

11/3

12/3

13/3

n Net Sales (left)
Ratio of Overseas Sales to Net Sales (right)

0

–20.0

09/3

10/3

11/3

12/3

13/3

–4

n Operating Income (Loss) (left)
Ratio of Operating Income (Loss) to Net Sales (right)

–80.0

–9

–9.6
–73.3
09/3

10/3

11/3

12/3

13/3

n Net Income (Loss) (left)
Ratio of Net Income (Loss) to Net Sales (right)

–12

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02

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03

Fuji Electric Report Financials 2013

In fiscal 2012, orders received (Power and Social Infrastructure

Extraordinary loss was ¥10,140 million, reflecting loss on
disposal of noncurrent assets, loss on devaluation of investment

segment of Fuji Electric Co., Ltd., non-­consolidated-basis) was

securities, impairment loss, loss on liquidation of subsidiaries,¥122,200 million. Sales in the power generation business weresettlement package and other items. Extraordinary loss

up year on year due to large-scale orders for thermal power

decreased ¥5,437 million year on year, mainly due to theplants, but operating results worsened due to the heavy impact

absence of a loss on disappearance of pension assets recordedof intensified cost competition. In the social infrastructure busi-

in the previous fiscal year.

ness, the energy distribution business drove year-on-year

As a result, income before income taxes and minority inter-

improvements in net sales and operating results as demand forests increased ¥11,269 million year on year to ¥16,617 million.

solar power generation systems rose following the launch of thefeed-in tariff scheme for renewable energy.

Net Income
Starting with income before income taxes and minority inter-Industrial Infrastructure

ests, the addition of reimbursement of tax expenses of

Net sales rose 5% year on year, to ¥115,629 million, and¥11,427 million, mainly arising from the recording of deferred­operating income improved ¥657 million year on year, totax assets, and the subtraction of minority interests in net¥5,042 million.
In fiscal 2012, orders received (Industrial Infrastructure seg-

income of consolidated subsidiaries of ¥1,676 million resulted
in net income of ¥26,368 million. This represented a ¥14,567

ment of Fuji Electric Co., Ltd. non-consolidated-basis) was

million year-on-year increase in net income compared to the¥89,200 million.

previous fiscal year, when tax expenses of ¥7,897 million, due

In the industrial plant business, sales increased year on year

principally to the reversal of deferred tax assets, and minority

due to relatively firm replacement demand in Japan. Sales alsointerests in net income of consolidated subsidiaries of ¥1,444

increased in the facilities business, which benefited frommillion were subtracted from income before income taxes anddomestic replacement demand and revenues from large-scaleminority interests.

projects overseas. While operating results in both businesses
were impacted by intensified cost competition, these impacts
were outweighed by the benefits of the higher sales and lower

Results by Business Segment

costs, and overall operating results improved year on year forthis business segment accordingly.

Power and Social Infrastructure
Net sales rose 27% year on year, to ¥198,860 million, andPower Electronics

operating income worsened ¥388 million year on year, toNet sales decreased 6% year on year, to ¥141,649 million, and¥11,631 million.

operating income worsened ¥1,177 million year on year, to¥2,601 million.

Cash Dividends per Share /Net Income (Loss) per ShareNet Sales by Segment*

Operating Income (Loss)by Segment*(Yen)(Billions of yen)(Billions of yen)

60.0

900.0

36.90
21.14

30.0

9.46
4.00 1.50
4.00

703.5
750.0

4.00

5.00

112.1

115.5

600.0

0

112.2

141.6 n PowerElectronics

300.0

150.0
–90.0

09/3

10/3

11/3

n Cash Dividends per Sharen Net Income (Loss) per Share

12/3

13/3

–150.0

198.9

–54.7

0

–102.57–120.0Infrastructure

156.6

12/3

n Others

6.4

n Food andBeverageDistribution

3.8

2.6

n Power
Electronics

4.4

5.0

n Industrial
Infrastructure

12.0

11.6

n Power andSocialInfrastructure

–0.2
–5.6

–1.4

n Electronic
Devices

10.0

115.6 n Industrial

110.5

–60.0

20.0

Devices

150.8

–30.0

n Food andBeverageDistribution

113.6 n Electronic

450.0

2.9
2.6
2.3

19.3

116.9 n Others

112.6

16.52

22.0

30.0

745.8

n Power andSocialInfrastructure0–52.9 n Elimination

–5.2

and
Corporate

13/3

–10.0

12/3

13/3

* Based on figures prior to reflecting the change in subsegments that took effect from April 1, 2013n Elimination
andCorporate

Fuji Electric Report Financials 2013

Food and Beverage Distribution

In fiscal 2012, orders received (sum of Power Electronics
segment of Fuji Electric Co., Ltd. and Fuji Electric FA

Net sales decreased 3% year on year, to ¥112,086 million, andComponents & Systems Co., Ltd., non-consolidated-basis)

operating income improved ¥4,161 million year on year, towere ¥112,000 million.

¥6,423 million.
In fiscal 2012, orders received (Food and Beverage

In the drive business, sales decreased year on year following
sluggish demand in China and other overseas markets.

Distribution segment of Fuji Electric Co., Ltd., non-consolidated-

However, the benefits of lower costs and general expenses

basis) was ¥71,000 million.

resulted in improvements in operating results. In the power

In the vending machine business, there was strong replace-

supply business, sales and operating results worsened due toment demand for energy-saving environmentally friendly vend-

decreased demand for power supplies for the manufacturing

ing machines, and demand for coffee machines for convenience

industry and for use in IT equipment. Meanwhile, lower demand

stores as a newly launched product. However, sales declined

from machinery manufacturers in the Japanese market led toyear on year after sales of the food and beverage items sold in

the deterioration of sales and operating results in the ED&C

vending machines were stopped. In the store distribution busi-

components business.

ness, sales rose as a result of automatic change dispenser
replacement demand as well as increased orders for freezing,

Electronic Devices

refrigerating, and energy-saving facilities for convenience stores

Net sales increased 1% year on year, to ¥113,591 million, andand other establishments. Operating income improved for theoperating loss worsened ¥1,209 million year on year, tooverall segment due to the benefits from the business restruc-¥1,416 million.

turing initiatives implemented in the previous fiscal year as wellas cost reductions and the introduction of new products.

In fiscal 2012, orders received (total of Electronic Devices
segment of Fuji Electric Co., Ltd. and Fuji Electric (Malaysia)

OthersSdn. Bhd., non-consolidated-basis) were ¥91,600 million.
In the semiconductor business, demand in the automotive

Net sales rose 4% year on year, to ¥116,892 million, andelectronics business was relatively firm, while demand in theoperating income improved ¥241 million year on year, toindustrial and power supply application businesses was down.

¥2,880 million.

As a result, both sales and operating results worsened. In the(Note) The classification of reportable segments has been changed from fiscal 2012.
Therefore, year-on-year comparisons in each segment were calculated by restating
the previous fiscal year’s figures under the new segment classification.

magnetic disk business, sales increased year on year following
the depreciation of the Japanese yen and operating results
improved due to benefits of the business restructuring initiatives
implemented in the previous fiscal year.

R&D Expenditures / Ratio of
R&D Expenditures to Net Sales(Billions of yen)

(%)

40.0

8

32.6

32.2

30.4

4.6

4.0

(Billions of yen)(Billions of yen)

40.0

31.8 31.1

30.0

27.2
26.1

27.9

150.0

25.0

4.2

215.7
196.1

200.0

29.8

23.9

20.0

(%)

250.0

33.5

6

4.7

Total Net Assets / ROE

31.2

30.0

24.3

Plant and Equipment Investment /Depreciation and Amortization

174.9

80

146.1

60

100.0
4

40

19.1

20.0

3.5

50.0

4.4
10.0

183.2

2

100

9.0

14.7
7.4

0

10.0

20

0

–20

0

09/3

10/3

11/3

12/3

13/3

n R&D Expenditures (left)
Ratio of R&D Expenditures to Net Sales (right)

0

0

09/3

10/3

11/3

12/3

n Plant and Equipment Investment (left)
n Depreciation and Amortization (right)

13/3

–38.1
09/3

10/3

n Total Net Assets (left)
ROE (right)

11/3

12/3

13/3

–40

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05

Fuji Electric Report Financials 2013

R&D Investment andPlant and Equipment Investment

processing in Shenzhen, China, in order to realize local produc-

R&D Expenditures

tion facilities for miniature molded-case circuit breakers andtion for local consumption in China and the rest of Asia.
In the ED&C components segment, we invested in produc-

Fuji Electric’s R&D is focused on developing products that leadto a responsible and sustainable society through the pursuit of
cutting-edge energy technologies. The Company has also been
advancing the globalization of its R&D functions, and is stepping
up open innovation initiatives with universities, research insti-

miniature thermal relays, aiming to help expand sales for thebusiness. To meet reconstruction demand following the Great
East Japan Earthquake, we also invested in production facilities
for high-voltage breakers to enhance production capacity.
In the Food and Beverage Distribution segment, we invested

tutes, and other companies.

in molding equipment for developing new vending machine

For fiscal 2012, Fuji Electric’s total R&D expenditures
amounted to ¥31,160 million. R&D results and expenditures bymodels and in streamlining of facilities in the Mie area.
All of these investments were funded mainly using thesegment are as follows.
The number of industrial property rights held by Fuji ElectricCompany’s own funds.

in Japan and overseas was 9,514 as of March 31, 2013.
Capital Expenditure

Financial Position

In fiscal 2012, the Company’s capital expenditure, including
leases, totaled ¥31,771 million, resulting from strategic investment focused on the field of “energy and environment.”

Total Assets
Total assets at the end of the fiscal year stood at ¥765,563

Key investments were as follows.
In the Power Electronics segment, we purchased a site in
Thailand and began construction of a new factory, aiming to
expand sales overseas, mainly in Asia. We also invested inmillion, a decrease of ¥27,285 million from the end of the previous fiscal year.

production facilities for inverters for China and the rest of Asia,

Current Assets and Current Liabilities

at Wuxi Fuji Electric FA Co., Ltd. and in production facilities for

Total current assets amounted to ¥424,706 million as of Marchglobal PCS for mega solar power generation in Japan.

31, 2013, down ¥28,491 million from the previous fiscal year-

In the Electronic Devices segment, to reinforce production

end. This was attributable to decreases from the previous fiscal

capacity of power semiconductors, which are used in new

year-end of ¥24,573 million in cash and cash equivalents andenergy-related products and eco-friendly products, we invested¥25,592 million in inventories, which outweighed an increase of

in facilities for front-end processing mainly in the Yamanashi¥17,175 million in trade receivables.

area. We also established a production base for back-end

Total Assets / ROA(Billions of yen)

(%)

1,200.0

15

Total Net Assets Ratio

Interest-bearing Debt /Debt-equity Ratio(%)(Billions of yen)

30.0

500.0

25.4

908.9 908.9
805.8 792.8 765.6

800.0

19.7

3.4
1.8
0.7

5

416.1
400.0

10

20.0
400.0

(Times)

19.3

4

359.8
3.2

20.6
300.0

5

274.0

1.5

226.7

14.3

0

3

255.9

200.0

0

2.0

1.8

2

1.6

10.0

1.2

100.0

–5

–400

1

–7.5
–800

09/3

10/3

n Total Assets (left)
ROA (right)

11/3

12/3

13/3

–10

0

09/3

10/3

11/3

12/3

13/3

0

09/3

10/3

11/3

n Interest-bearing Debt (left)
Debt-equity Ratio (right)

12/3

13/3

0

Fuji Electric Report Financials 2013

Total current liabilities stood at ¥380,466 million, down

Cash Flows¥85,348 million from the previous fiscal year-end. This stemmed
principally from a decrease of ¥96,459 million in current portionof long-term debt, which outweighed an increase of ¥18,990
million in short-term debt.

In fiscal 2012, consolidated free cash flow (cash flows fromoperating activities + cash flows from investing activities) was apositive ¥31,055 million, an improvement of ¥16,231 million
compared with ¥14,825 million in the previous fiscal year.

Noncurrent Assets
Net property, plant and equipment stood at ¥168,442 million,
an increase of ¥10,003 million from the previous fiscal year-end.

Cash Flows from Operating Activities

Further, total investments and other assets amounted to

Net cash provided by operating activities was ¥55,342 million,¥172,415 million, down ¥8,797 million from the previous fiscal

compared with ¥28,314 million for the previous fiscal year. This

year-end. This was attributable to a decrease of ¥6,127 million

was mainly due to a decrease in inventories. This was anin investment securities.

improvement of ¥27,028 million year on year.

Long-term Liabilities

Cash Flows from Investing Activities

Total long-term liabilities were ¥169,425 million, an increase of

Net cash used in investing activities was ¥24,286 million, com-

¥25,608 million from the previous fiscal year-end. This reflected

pared with ¥13,489 million in the previous fiscal year. This was

an increase of ¥48,321 million in long-term debt, which outweighed a decrease of ¥19,188 million in deferred tax liabilities.

primarily related to purchase of property, plant and equipment
and purchase of investments in subsidiaries. Year on year, thiswas an increase in cash used of ¥10,797 million.

Net Assets
Total net assets as of March 31, 2013, were ¥215,672 million,up ¥32,455 million from the previous fiscal year-end. This was

Cash Flows from Financing Activities

mainly due to an increase of ¥24,182 million in retained earn-

Net cash used in financing activities was ¥56,827 million, com-

ings from the previous fiscal year-end. As a result, the total net

pared with ¥32,593 million in the previous fiscal year. This wasassets ratio was 25.4%, an increase of 4.8 percentage points

principally due to an increase in repayment of long-term loans

from the previous fiscal year-end.

payable accompanying the redemption of bonds.
As a result, consolidated cash and cash equivalents at fiscal

Debt

year-end amounted to ¥39,688 million, down ¥24,573 million,

Interest-bearing debt as of March 31, 2013, was ¥226,717

or 38.2%, from the previous fiscal year-end.

million, down ¥29,148 million from the previous fiscal year-end.
The ratio of interest-bearing debt to total assets was 29.6%, adecrease of 2.7 percentage points from the previous fiscal
year-end.

Cash Flows

Free Cash Flow /Cash and Cash Equivalents(Billions of yen)(Billions of yen)

100.0

150.0

84.2

75.0

53.8

55.3

53.9

138.1

120.0

50.0

25.0

28.3

23.1
11.9

0

90.0

85.4

81.8

–0.5
–12.3

64.3

–13.5

–25.0

–32.6

–50.0

–24.3

39.7
31.1

37.3

–56.8

–62.6

60.0

30.0

–75.0

10.8

14.8

11.4

–93.5
–100.0

09/3

10/3

11/3

12/3

n Cash Flows from Operating Activitiesn Cash Flows from Investing Activitiesn Cash Flows from Financing Activities

13/3

0

09/3

10/3

11/3

n Free Cash Flown Cash and Cash Equivalents

12/3

13/3

Page

06

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07

Fuji Electric Report Financials 2013

Risk Factors(2) Risks Related to Product Quality
Fuji Electric has put in place a quality assurance system

Fuji Electric works to mitigate business risk and other risks indesigned to ensure the highest level of quality for all of the prod-a systematic and methodical manner. However, there areucts that it manufactures and sells. Although the Company has

various risks, such as those listed below, which could have ataken precautions in the form of product liability insurance tonegative effect on the operating results and financial position

provide compensation for product liability claims, in the eventof Fuji Electric.

that major defects are found in any Fuji Electric products due to

As of March 31, 2013, the following factors were judged to

unforeseen factors, there could be a negative effect on thehave a potential future effect on the operations of Fuji Electric.

Company’s operating results and financial position.

(1) Risks Related to Changes in the Operating Environment(3) Risks Related to Investments(a) In addition to increasing raw material and components prices

Fuji Electric concentrates its management resources on quickly

against the background of a weak yen, such changes as theidentifying potential business growth areas and conducts invest-

drastically increasing demand in emerging nations may result

ment in facilities and R&D with the objective of expanding andin tightened supply and demand as regards materials anddeveloping the Company’s business. The large-scale invest-

raw materials. Consequently, although Fuji Electric strives toment necessary and short product cycles in the magnetic disks

lessen the risk of rising raw material prices through com-and semiconductors fields, in particular, as well as shifts inmodity swap transactions, significant increases in theseproduct demand and intensifying competition increase theprices could have a negative effect on the operating results

possibility that the Company might not be able to recoup itsof Fuji Electric.

investments. Such events could thereby have a negative effect(b) Fuji Electric is developing operations actively in overseas

on the Company’s operating results.

markets, focusing particularly on expanding sales in China
and other Asian markets. In addition, economic trends in(4) Risks Related to Technology Development

Japan, such as private sector capital investment and public

Fuji Electric makes a concerted effort to develop technology thatinvestment affect the Company significantly. In order to mini-

matches the needs of the market. However, there is a possibility

mize the effect on operating results of overseas and domes-that competing companies will gain an advantage through fastertic market trends, the Company is implementing overall costdevelopment, or that the Company will be unable to bring prod-

and expense reductions. However, a deterioration of theucts to market in a timely manner should development not prog-business climate or a change of economic policy in China, aress according to plan. Such events could thereby have adramatic change in product supply and demand or intensi-

negative effect on the Company’s operating results.

fied competition in the market, or a steep decrease in pricelevels as a result of such factors could affect Fuji Electric’s(5) Risks Related to Overseas Business Activities

operating results.

Fuji Electric is seeking to expand its overseas presence, with a(c) Based on an established set of management criteria, Fuji

particular focus on Asia, including China. Consequently, theElectric systematically employs forward-exchange con-Company is exposed to the following risks, which could have a

tracts to minimize the risk of exchange rate fluctuations on

negative effect on the Company’s operating results and finan-

its operating results. However, the forward-exchange con-cial position:

tract policy is not capable of entirely mitigating exchange- Unforeseen changes in laws and regulations as well as tax

rate risk. Consequently, fluctuations in exchange rates,

systems that could have a detrimental effect on the Company

primarily between the yen and the U.S. dollar, could have a- Disadvantages arising from political conditions

negative effect on the operating results and financial posi-- Social turmoil related to terrorist incidents, war, and other eventstion of the Company.
(d) Fuji Electric’s interest-bearing debt totaled ¥226,717 million(6) Risks Related to Intellectual Property

as of March 31, 2013. A higher-than-anticipated increase in

Fuji Electric effectively manages its intellectual property rights

interest rates could lead to a significant additional interestand develops new products and technologies in a manner thatpayment burden, which could have a negative effect on thedoes not infringe on third-party patent rights. However, since

operating results of the Company.

the pace of technological innovation is accelerating and the(e) Trends in the financial markets or deterioration in Fuji

Company’s operations are becoming more global, the possibility

Electric’s financial indicators could impact on Fuji Electric’sof disputes over intellectual property rights is increasing. A

fund procurement or interest payments, for example bydispute of this nature could have a negative effect on theprompting early repayment due to infringement on financial

Company’s operating results and financial position.

covenants relating to certain loans. Such an event could
affect Fuji Electric’s operating results and financial position.

Fuji Electric Report Financials 2013

(7) Risks Related to Business Alliances(12) Risks Related to Retirement Benefit Liabilities

Fuji Electric actively collaborates with third-party entities in

Fuji Electric has a lump-sum payment plan and a corporate

mergers, tie-ups, and other forms of alliances with the objec-

pension plan for its employees when they retire. Retirement

tive of enhancing competitiveness in each of its fields ofbenefit costs and liabilities are calculated on the assumption­business. Cooperative relations are essential to the success ofthat they are accepted as reasonable on the basis of actuarial

such collaborations.

calculations. Fuji Electric and certain domestic consolidated

However, differences in business systems, corporate cul-

subsidiaries have also entrusted listed marketable securities totures, or other aspects could impede the smooth integration of

employee retirement benefit trusts. Consequently, changes inbusiness strategies, technologies, products, personnel, or

the discount rate, the expected rate of return on pension

other elements necessary for a successful collaboration. Suchassets and stock prices that are used as the basis of comput-

circumstances could thereby have a negative effect on theing pension benefit obligations, differences between theseCompany’s operating results.

expectations and actual performance, changes in the prices of
entrusted listed marketable securities, and other items could(8) Risks Related to Human Resources

have a negative effect on the operating results and financial

The business activities of Fuji Electric depend heavily on its

position of Fuji Electric.

human resources. Retaining and training superior personnel insuch fields as technology, production, sales, and administration(13) Risks Related to Complianceis essential to the growth of the Company. Should the Company

Fuji Electric conducts business in a variety of fields and regions

be unable to retain and/or train such necessary humanthroughout the world, and as such is subject to the laws andresources, this could have a negative effect on the Company’s

regulations of numerous countries. The Company has put in

operating results.

place an appropriate internal control system to ensure com­pliance, but the possibility of legal violations cannot be dis-

(9) Risks Related to the Leakage of Personal Information

counted entirely. Should such a violation occur, this could have

As a part of its business activities, Fuji Electric handles personala negative effect on the Company’s social credibility and/or

information about numerous individuals, including customers,

operating results.

suppliers, and employees. Fuji Electric has formulated andstrictly enforces thorough internal regulations regarding thegathering, use, and management of personal information.
However, the Company cannot entirely rule out the possibility(14) Risks Related to Lawsuits and Other Legal
Proceedings
Fuji Electric, in the course of its business, could become thethat such information could be leaked due to unforeseen cir-subject of a lawsuit or other legal proceeding, and could as a

cumstances. Any leak of this kind could damage trust in Fuji

result unexpectedly become liable for the payment of large

Electric and thereby have a negative effect on the Company’s

amounts of compensation. Depending on the content of such a

operating results.

decision, this could have a negative effect on the Company’s
operating results.

(10) Risks Related to Major Natural Disasters
Fuji Electric has a network of bases throughout the world. In theevent of a major natural disaster, production facilities could bedamaged, operations at manufacturing facilities could be halted,
shipments of products could be delayed, and other related
problems could occur. These events could thereby have anegative effect on the operating results and financial position of
the Company.
(11) Risks Related to Soil Contamination
Based on the international standards for environmental protection systems, the Company works to prevent, measure, andmonitor soil contamination at its operating sites. Prior to selling
any land, the Company carries out soil surveys and takes otherappropriate steps in accordance with relevant laws and regulations. However, as a result of these measurements and surveys,
the Company may incur costs for soil remediation measures,
which could have a negative effect on the operating results of
the Company.

Page

08

Page

09

Fuji Electric Report Financials 2013

Consolidated Balance Sheets
As of March 31, 2013 and 2012

Thousands of
U.S. dollars(Note 3)

Millions of yen

2013

2013

2012

AssetsCurrent Assets:
Cash and cash equivalents (Notes 5 and 6)¥  39,688¥  64,261

Short-term investments (Notes 5, 6 and 7)

61

61

657

216,852

199,677

2,306,944

Trade receivables (Note 6)$  422,218

(401)

(836)

(4,272)Inventories (Note 4)

107,722

133,314

1,145,982

Deferred tax assets (Note 17)

18,047

20,131

191,993

Other current assets

42,73736,589454,631424,706

453,197

4,518,153

Land

36,201

26,623385,119

Buildings and structures

209,738

201,804

2,231,266

Machinery and equipment

174,099

160,628

1,852,126

Lease assets (Note 21)

47,822

44,998508,755

Construction in progress

9,386

4,900

99,829477,246438,953

5,077,095(308,804)(280,514)(3,285,158)

168,442

158,439

1,791,937

Allowance for doubtful accounts

Total Current Assets

Property, Plant and Equipment (Note 5):Less accumulated depreciation
Net Property, Plant and Equipment

Investments and Other Assets:
Investment securities (Notes 5, 6 and 7):
Unconsolidated subsidiaries and affiliates

22,20330,127236,211

Other

97,261

95,464

1,034,693

1,259

1,530

13,404Long-term loans receivable
Deferred tax assets (Note 17)

4,381

4,319

46,607

Other investments and other assets

49,10951,254522,419

Allowance for doubtful accounts
Total Investments and Other Assets
Total Assets
The accompanying Notes to the Consolidated Financial Statements are an integral part of these statements.

(1,798)(1,482)(19,128)

172,415

181,212

1,834,206¥ 765,563¥ 792,848$ 8,144,296

Fuji Electric Report Financials 2013

Thousands of
U.S. dollars(Note 3)

Millions of yen

2013

2012

2013

$  823,548

Liabilities and Net Assets
Current Liabilities:¥ 77,413¥ 58,423

Current portion of long-term debt (Notes 5, 6 and 9)

23,180

119,639

246,606

Trade payables (Notes 5 and 6)

129,934

136,466

1,382,283

Lease obligations (Notes 6 and 10)

11,832

11,102

125,878

Advances received

39,62046,575421,500

Short-term debt (Notes 5, 6 and 9)

Income taxes payable (Note 17)

2,918

1,905

31,048Other current liabilities (Note 24)

95,56991,704

1,016,657

Total Current Liabilities

380,466

465,8144,047,520

Long-term debt (Notes 5, 6 and 9)

126,123

77,802

1,341,739

Lease obligations (Notes 6 and 10)

18,55522,521

197,395

Provision for retirement benefits (Note 11)

11,681

10,849124,276

Provision for directors’ retirement benefits

266

375

2,832

Deferred tax liabilities (Note 17)

7,626

26,814

81,138Other long-term liabilities (Note 25)

5,174

5,456

55,004

Total Long-term Liabilities

169,425

143,817

1,802,384

Total Liabilities

549,891

609,6315,849,904

47,586—506,235

Long-term Liabilities:

Contingent Liabilities (Note 20):
Net Assets
Shareholders’ Equity:
Capital stock (Note 12):
Authorized— 1,600,000,000 shares
Issued—746,484,957 shares as of March 31, 2013		746,484,957 shares as of March 31, 2012—

47,586—

Capital surplus

46,73446,734

497,172

Retained earnings

87,62063,438932,132(7,115)—(75,702)

Treasury stock at cost (Note 12):
		

31,912,522 shares as of March 31, 2013—

(7,110)—174,825

150,648

1,859,837

Valuation difference on available-for-sale securities

20,383

18,848

216,842

Deferred gains or losses on hedges (Notes 6 and 8)

(83)

(81)

(889)

		

31,888,102 shares as of March 31, 2012
Total Shareholders’ Equity

Accumulated Other Comprehensive Income (Loss)

Foreign currency translation adjustments
Total Accumulated Other Comprehensive Income
Minority Interests in Consolidated Subsidiaries(553)(5,838)(5,870)19,747

12,929210,083

21,10019,640224,472

Total Net Assets

215,672

183,217

2,294,392

Total Liabilities and Net Assets¥765,563¥792,848$8,144,296

Page

10

Page

11

Fuji Electric Report Financials 2013

Consolidated Statements of Income
Years ended March 31, 2013 and 2012

Thousands of
U.S. dollars(Note 3)

Millions of yen

2013

2012

2013

Net Sales¥745,781¥703,534$7,933,841

Cost of Sales (Note 13)

587,458

546,689

6,249,546

158,323

156,845

1,684,295

136,331

137,593

1,450,328

21,992

19,252233,967

Gross Profit
Selling, General and Administrative Expenses (Notes 13 and 14)
Operating Income
Non-Operating Income (Expenses):
Interest and dividend income

2,880

2,643

30,648Interest expense(3,729)(4,937)(39,677)

Foreign exchange gains (losses)

1,446(1,026)

15,393Equity in earnings of affiliates

2,562

2,382

27,259

563

240

5,970

3,722

(698)

39,59325,714

18,554

273,560(9,097)(13,206)(96,773)

16,617

5,348

176,787(11,427)(7,897)(121,560)

28,044

13,245

298,347

Other, net
Ordinary Income
Extraordinary Loss, Net (Notes 15 and 16)
Income Before Income Taxes and Minority Interests
Income Taxes (Note 17)
Income Before Minority Interests
Minority Interests in Net Income of Consolidated Subsidiaries
Net Income(1,676)(1,444)(17,835)¥ 26,368¥ 11,801$  280,512
U.S. dollars(Note 3)

Yen

2013

2012

2013

Basic

¥36.90¥16.52$0.393

Diluted

36.87

16.49

0.392

Per Share of Common Stock:

The accompanying Notes to the Consolidated Financial Statements are an integral part of these statements.

Fuji Electric Report Financials 2013

Consolidated Statements of Comprehensive Income
Years ended March 31, 2013 and 2012

Thousands of
U.S. dollars(Note 3)

Millions of yen

Income Before Minority Interests

2013

2012

2013

¥28,044¥13,245$298,347

1,554(1,085)

16,536

(2)

(86)

(23)

5,762

370

61,294

Other Comprehensive Income (Loss) (Note 18)
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustments
Share of other comprehensive income of associates accounted for using
equity method
Total Other Comprehensive Income (Loss)
Comprehensive Income

35

34

373

7,349

(767)

78,180¥35,393¥12,478$376,527¥33,187¥10,967$353,059

2,206

1,511

23,468Comprehensive Income Attributable to:Shareholders of the Company
Minority interests
The accompanying Notes to the Consolidated Financial Statements are an integral part of these statements.

Page

12

Page

13

Fuji Electric Report Financials 2013

Consolidated Statements of Changes in Net Assets
Years ended March 31, 2013 and 2012

Thousands
Number ofshares ofcapital stock

Balance at March 31, 2011

Millions of yen

Capital stock Capital surplus

Retainedearnings

Valuationdifference on Deferred gains
or losses onavailable-forhedges
sale securities

Foreigncurrencytranslation
adjustments

Treasury stock

Total

Minority
interests inconsolidated
subsidiaries

Total
net assets

746,484¥47,586¥46,734¥54,378¥19,895¥  4¥(6,136)¥(7,106)¥155,355¥19,580¥174,935

Net income for the year

—

—

—

11,801————

11,801—

11,801

Change of scope of
consolidation

—

—

—

117

—

—

—

—

117

—

117

Cash dividends

—

—

—

(2,858)

—

—

—

—

(2,858)—(2,858)Purchase of treasury stock

—

—

—

—

—

—

—

(5)

(5)

—

(5)

Sale of treasury stock

—

—

(0)

—

—

—

—

0

0

—

0

Net change in the year

—

—

—

—

(1,047)

(85)

299

—

(833)

60

(773)

746,484¥47,586¥46,734¥63,438¥18,848¥(81)¥(5,838)¥(7,110)¥163,577¥19,640¥183,217

Net income for the year

—

—

—

26,368————26,368—26,368Change of scope ofequity method

—

—

—

672

—

—

—

—

672

—

672

Cash dividends

—

—

—

(2,858)

—

—

—

—

(2,858)—(2,858)Purchase of treasury stock

—

—

—

—

—

—

—

(5)

(5)

—

(5)

Sale of treasury stock

—

—

(0)

—

—

—

—

0

0

—

0

Net change in the year

—

—

—

—

1,535

(2)

5,285

—

6,818

1,460

8,278

Balance at March 31, 2013 746,484¥47,586¥46,734¥87,620¥20,383¥(83)¥ (553)¥(7,115)¥194,572¥21,100¥215,672

Balance at March 31, 2012

$506,235$497,173$674,879$200,513$(869)$(62,108)

Net income for the year——

280,512

—

—

—

—

280,512—

Change of scope of equity method

—

—

7,149

—

—

—

—

7,149

—

7,149

Cash dividends——(30,408)

—

—

—

—

(30,408)—(30,408)

Purchase of treasury stock

—

—

—

—

—

—

(61)

(61)

—

(61)

Sale of treasury stock

—

(1)

—

—

—

—

7

6

—

6

—

72,547

15,52888,075

Balance at March 31, 2012

Thousands of U.S. do lars (Note 3)

Net change in the year
Balance at March 31, 2013

—

—

—

16,329(20)

56,238$506,235$497,172$932,132$216,842$(889)$ (5,870)

The accompanying Notes to the Consolidated Financial Statements are an integral part of these statements.

$(75,648) $1,740,175 $208,944 $1,949,119
280,512$(75,702) $2,069,920 $224,472 $2,294,392

Fuji Electric Report Financials 2013

Consolidated Statements of Cash Flows
Years ended March 31, 2013 and 2012

Thousands of
U.S. dollars(Note 3)

Millions of yen

2013

Cash Flows from Operating Activities:
Income before income taxes and minority interests
Depreciation and amortization
Increase (decrease) in allowance for doubtful accounts
Interest and dividend income
Interest expense
Foreign exchange losses (gains)
Gain on sales of noncurrent assets
Gain on sales of investment securities
Loss on disposal of noncurrent assets
Loss on devaluation of investment securities
Impairment loss
Loss on liquidation of subsidiaries
Loss on disappearance of pension assets
Changes in operating assets and liabilities:
Notes and accounts receivable-trade
Inventories
Notes and accounts payable-trade
Advances received
Other, net
Cash generated from operations
Interest and dividends received
Interest expenses paid
Income taxes paid
Net cash provided by operating activities
Cash Flows from Investing Activities:
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of investment securities
Proceeds from sales of investment securities
Purchase of investments in subsidiaries
Purchase of investments in subsidiaries resulting in change in scope of­consolidation (Note 19)
Payments of loans receivableCollection of loans receivable
Other, net
Net cash used in investing activities
Cash Flows from Financing Activities:
Net increase in short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Proceeds from issuance of bonds
Repayments of lease obligations
Proceeds from sales of treasury stock
Purchase of treasury stock
Cash dividends paid
Cash dividends paid to minority shareholders
Other, net
Net cash used in financing activities
Effect of Exchange Rate Changes on Cash and Cash Equivalents
Net Decrease in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year
Increase in Cash and Cash Equivalents Resulting from
Change of Scope of Consolidation
Increase in Cash and Cash Equivalents Resulting from Merger with
Unconsolidated Subsidiaries
Cash and Cash Equivalents at End of Year
The accompanying Notes to the Consolidated Financial Statements are an integral part of these statements.

2013

2012

¥  16,617
31,054(135)(2,880)
3,729
(256)
(29)
(750)
404
520
6,446
827
—

¥  5,348
29,755332(2,643)4,937
203(2,081)
(290)
459
207
—
—
6,987

$  176,787
330,370(1,443)(30,648)
39,677(2,731)(310)(7,988)4,305
5,540
68,5808,805—(11,034)
36,873(10,643)(9,553)
131
61,321
2,859(4,096)(4,742)
55,342(2,034)(23,476)
2,110
9,030
6,389
35,2332,920(5,371)(4,468)28,314(117,384)
392,268(113,226)(101,636)
1,392
652,358
30,417(43,575)(50,451)
588,749(17,912)510(7,688)
8,628
(321)

(15,014)
4,418
(275)
312
—

(190,564)
5,427(81,791)
91,795(3,415)(3,823)(4,535)4,294(3,439)(24,286)—(3,103)
3,163(2,990)(13,489)(40,676)(48,249)
45,681(36,578)(258,370)

9,668
52,224(123,071)
20,000(12,431)0(5)(2,858)(262)(92)(56,827)
1,196(24,575)
64,261

21,18430,956(90,264)
20,000(11,319)0(5)(2,858)(191)(96)(32,593)(56)(17,824)
81,796

102,861555,577(1,309,270)
212,766(132,253)6(61)(30,408)(2,791)(977)(604,550)
12,726(261,445)
683,638

—

289

—

2
¥  39,688—¥ 64,261

25$  422,218

Page

14

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15

Fuji Electric Report Financials 2013

Notes to the Consolidated Financial Statements
Note 1. Basis of Preparing Consolidated Financial Statements
The accompanying consolidated financial statements of Fuji ElectricCo., Ltd. (the “Company”) and consolidated subsidiaries (together,
the “Companies”) are prepared on the basis of accounting principles generally accepted in Japan, which are different in certain
respects as to application and disclosure requirements of International Financial Reporting Standards, and are compiled from theconsolidated financial statements prepared by the Company as
required by the Financial Instruments and Exchange Law of Japan.
In preparing these statements, certain reclassifications andrearrangements have been made to the consolidated financial
statements prepared domestically in Japan in order to present
these statements in a form that is more familiar to readers outside Japan.
In addition, the notes to the consolidated financial statements
include additional information which is not required under accounting principles generally accepted in Japan.
Certain amounts in the prior years’ financial statements havebeen reclassified to conform to the current year’s presentation.

Note 2. Summary of Significant Accounting Policies
a. Principles of Consolidation
The consolidated financial statements for the year ended March 31,
2013 include the accounts of the Company and its 47 significant
subsidiaries and its 5 subsidiaries and affiliates are accounted forby the equity method (47 and 4 in 2012).
Under the control or influence concept, the accompanying
consolidated financial statements include the accounts of the Company and, with minor exceptions, those of its subsidiaries, whether
directly or indirectly controlled, and those companies over which
the Companies have the ability to exercise significant influence areaccounted for by the equity method. All significant intercompany
balances and transactions have been eliminated in consolidation.
All material unrealized profit included in assets resulting from transactions within the Companies is eliminated. The Company does notconsolidate nor apply the equity method to subsidiaries or affiliates
whose gross assets, net sales, net income (loss) and retained
earnings are not significant to the consolidated financial
statements.
Investments in unconsolidated subsidiaries and affiliates arestated at cost.
The balance sheet date of certain consolidated subsidiaries is
December 31. The financial statements of such subsidiaries weretentatively prepared in accordance with the fiscal year of the Company, and those were consolidated.
In the elimination of investments in subsidiaries, the assets andliabilities of the subsidiaries, including the portion attributable tominority shareholders, are evaluated using the fair value at the time
the Company acquired control of the respective subsidiaries.
Goodwill and negative goodwill (incurred before March 31, 2010)
resulting from the difference between the cost and the underlying
net assets at the respective dates of acquisition are being amortized over a period of 5 years, except that immaterial amounts arecharged to income as incurred.

b. Cash Equivalents
For the purpose of the consolidated statements of cash flows, theCompanies consider all short-term, highly liquid instruments with amaturity of three months or less to be cash equivalents.

c. Inventories
Raw materials are mainly stated at cost, determined by the mostrecent purchase price method. Finished goods and work in process
are mainly stated at actual cost determined by accumulated production cost for contract items or average cost for regular production items, except that finished goods of certain consolidated

subsidiaries are priced by the most recent purchase price method.
In accordance with accounting practices generally accepted in theheavy electric industry, inventories include items with a manufacturing period exceeding one year.
Inventories with lower profitability were written down and thelosses on valuation were included in cost of sales.

d. Securities
Marketable securities classified as other securities are stated at fairvalue. Unrealized gains and losses, net of taxes, are reported in a
separate component of net assets.
Nonmarketable securities classified as other securities are statedat cost determined by the moving-average method.

e. Derivatives and Hedging Activities
The Companies enter into derivative financial instruments (“derivatives”), including foreign currency forward contracts to hedge foreign exchange risk associated with certain assets and liabilities
denominated in foreign currencies and interest rate swap agreements as a means of managing its interest rate exposures on certain liabilities. In addition, the Companies enter into commodity
swap agreements to hedge the risk of fluctuation of commodity
prices for raw materials.
Derivative financial instruments and foreign currency transactions
are classified and accounted for as follows:a) Except as described in the following paragraph b) and c), allderivatives are recognized as either assets or liabilities andmeasured at fair value, and forward contracts applied forforecasted transactions are measured at fair value but theunrealized gains/losses are deferred until the underlying
transactions are completed if the forward contracts qualify forhedge accounting.
b) Trade receivables and trade payables denominated in foreign
currencies for which foreign exchange forward contracts areused to hedge the foreign currency fluctuations are translated
at the contracted rate if the forward contracts qualify forhedge accounting.
c) The interest rate swaps which qualify for hedge accounting
and meet specific matching criteria are not remeasured atmarket value but the differentials paid or received under theswap agreements are recognized and included in interest
expense or income.

Fuji Electric Report Financials 2013

f. Depreciation
1) Tangible fixed assets (excluding leased assets)
Depreciation is computed by the declining-balance method at rates
based on the estimated useful lives of the assets, while the straightline method is applied to the buildings of the Company and its
domestic consolidated subsidiaries acquired after April 1, 1998.
The range of useful lives is from 7 to 50 years for buildings and from
5 to 12 years for machinery and equipment.
(Changes in accounting policies)
In accordance with an amendment to the Corporation Tax Law
effective April 1, 2012, the Company and its domestic consolidated
subsidiaries have changed their depreciation method for tangible
fixed asset acquired on or after April 1, 2012, to reflect the methods
prescribed in the amended Corporation Tax Law.
The effect of this change on the consolidated financial statements and on the Segment Information (Note 22) is minor.
2) Leased assets
Depreciation is computed by the straight-line method over the lease
period assuming no residual value. Finance leases other than thosethat were deemed to transfer the ownership of the leased assets tothe lessees and contracted before April 1, 2008, are accounted forby the method that is applicable to ordinary operating leases.

percentage of the cost incurred to date to the estimated total cost.
When the outcome of the construction contracts can not be estimated reliably, the completed-contract method is adopted.

l. Income Taxes
The provision for income taxes is computed based on the pretax
income included in the consolidated statements of income. The
Company filed a consolidated tax return, which allows companies
to file tax payments on the combined basis of profits or losses ofthe parent company and its wholly owned domestic subsidiaries.
The asset and liability approach is used to recognize deferred tax
assets and liabilities for the expected future tax consequences of
temporary differences between the carrying amounts and the tax
bases of assets and liabilities. Deferred taxes are measured byapplying currently enacted tax laws to the temporary differences.

m. Foreign Currency Transactions
All monetary receivables and payables denominated in foreign
currencies are translated into Japanese yen at the exchange rates
at the balance sheet date. The foreign exchange gains and losses
from translation are recognized in the consolidated statements ofincome to the extent that they are not hedged by forward exchange
contracts.

n. Foreign Currency Financial Statements
g. Allowance for Doubtful Accounts
The allowance for doubtful accounts is stated in amounts considered to be appropriate based on the Companies’ past credit loss
experience and an evaluation of potential losses in the receivables
outstanding.

h. Provision for Retirement Benefits
The Company and its domestic consolidated subsidiaries have apension fund, contract-type corporate pension plans and lumpsum payment plans as defined benefit plans and defined contribution pension plans.
The Companies accounted for the liability for retirement benefits
based on the projected benefit obligations and plan assets at thebalance sheet date.
The prior service cost is amortized by the straight-line method
over the expected remaining working lives of the then-active
employee participants.
The actuarial gains and losses are amortized by the straight-line
method over the expected remaining working lives of the thenactive employee participants from the next period in which theyarise, respectively.

i. Provision for Directors’ Retirement Benefits
For certain consolidated subsidiaries, the accrued retirement benefits for directors were provided mainly at an amount to be requiredat the year-end according to internal regulations.

j. Research and Development Costs
Research and development costs are charged to income as
incurred.

k. Recognition for Revenue and Costs
For long-term construction contracts whose outcome can be estimated reliably, the percentage-of-completion method is adopted.
The stage of completion of a contract is determined by the

Assets, liabilities, and revenue and expense accounts of the foreign
consolidated subsidiaries are translated into Japanese yen at thecurrent exchange rate as of the balance sheet date except forshareholders’ equity, which is translated at the historical rate.
Differences arising from such translation are included in foreign
currency translation adjustments and minority interests in consolidated subsidiaries as a separate component of net assets.

o. Accounting for Consumption Taxes
The Japanese consumption taxes withheld and consumption taxes
paid are not included in the accompanying consolidated statements of income.

p. Net Income per Share
Net income per share is computed by dividing net income available
to common shareholders by the weighted average number ofcommon shares outstanding for the period, retroactively adjusted
for stock splits.

q. Standards Issued But Not Yet Effective
On May 17, 2012, Accounting Standards Board of Japan (“ASBJ”)
issued “Accounting Standard for Retirement Benefits” (ASBJ Statement No. 26) and “Guidance on Accounting Standard for Retirement Benefits” (ASBJ Guidance No. 25), which replaced the
Accounting Standard for Retirement Benefits that had been issued
by Business Accounting Council in 1998 with an effective date ofApril 1, 2000, and the other related practical guidance, being followed by partial amendments from time to time through 2009. The
major changes are as follows:(1) Actuarial gains and losses and prior service cost that have
yet to be recognized in profit or loss shall be recognizedwithin net assets (accumulated other comprehensive
income), after adjusting for tax effects, and the deficit or
surplus shall be recognized as a liability (liability for retirement
benefits) or asset (asset for retirement benefits).

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Fuji Electric Report Financials 2013(2) The Accounting Standard allows the choice of the benefit
formula basis (the expected benefit attributed to periods ofservice under the plan’s benefit formula would be deemed asarising in each period) in addition to the straight-line basis asa method of attributing the expected benefit to periods.
(3) The discount rate shall be required to reflect the estimatedtiming of each benefit payment.

This standard and related guidance are effective as of the end of
fiscal years beginning on or after April 1, 2013 except amendmentsin the method of attributing the expected benefit to periods and thediscount rate. They are effective in fiscal years beginning on or after
April 1, 2014. The Company is currently evaluating the effect thesemodifications will have on its consolidated results of operations andfinancial position.

Note 3. U.S. Dollar Amounts
The U.S. dollar amounts included in the accompanying consolidated financial statements and notes thereto represent the arithmetic results of translating yen into dollars at ¥94=U.S.$1, theapproximate exchange rate as of March 31, 2013. The U.S. dollar
amounts are presented solely for the convenience of the readers
outside Japan.

Note 4. Inventories
Inventories as of March 31, 2013 and 2012 comprised the following:Thousands of
U.S. dollars(Note 3)

Millions of yen

2013

2012

¥ 42,464¥ 40,860$  451,749

Work in process

39,294

62,129418,027

Raw materials

25,96430,325276,206

Inventories¥107,722¥133,314$1,145,982

Merchandise and finished goods

2013

Losses (gains) on valuation of inventories with lower profitability were ¥(266) million ($(2,834) thousand) and ¥2,238 million for the years
ended March 31, 2013 and 2012, respectively. These were included in cost of sales.

Note 5. Pledged Assets and Financial Assets Accepted as Collateral
The amounts of assets pledged as collateral for trade payables, short-term debt and long-term debt as of March 31, 2013 and 2012 wereas follows:
Thousands of
U.S. dollars(Note 3)

Millions of yen

Time deposits

2013

2012

2013

¥    60¥    60$    638

297

252

3,163

16,491

16,815

175,443¥16,848¥17,127$179,244

Investment securities
Property, plant and equipment
Total

Collateralized debt and other as of March 31, 2013 and 2012 were as follows:
Thousands of
U.S. dollars(Note 3)

Millions of yen

2013

2012

2013

¥    15¥    5$    164

Short-term debt

3,900

4,700

41,489Long-term debt

7,665

4,371

81,543¥11,580¥9,076$123,196

Notes and trade payables

Total

Fuji Electric Report Financials 2013

Note 6. Financial Instruments
1. Status of financial instruments(1) Policy regarding financial instruments
The Companies limit the scope of their cash and fund management
activities to short-term deposits. When raising funds, the Companies have a policy of relying principally on bank borrowings, bonds
payable and commercial paper. The Companies mainly raise theoperating funds through short-term loans payable and commercial
paper, and the funds relating to capital investments through longterm loans payable and bonds payable. The Companies make useof derivatives to reduce risk, as explained below, and have a policyof not engaging in derivative transactions for speculative purposes.
(2) Details of financial instruments and associated risk
In the course of its business activities, trade receivables are
exposed to customer credit risk.
In addition, trade receivables denominated in foreign currencies
arising from international business are exposed to exchange risk.
The Companies hedge the exchange risk, by using foreignexchange forward contracts within the range prescribed relating to
the net amount of the trade receivables denominated in foreign
currencies, offset by the amount of the trade payables denominated in the same currencies.
Short-term investments and investment securities are comprised
primarily of stocks of companies with which the Companies havebusiness relation and are exposed to market price risk.
Trade payables are mostly payable within one year. Some trade
payables are denominated in foreign currencies and exposed to
exchange risk. The Companies hedge the exchange risk of the trade
payables denominated in foreign currencies in principle, except for
the amount within that of trade receivables denominated in the same
currencies, by using foreign exchange forward contracts.
Short-term loans payable and commercial paper are primarilyraised for the purpose of maintaining operating funds. Bonds
payable, long-term loans payable and lease obligations on
finance lease transactions are primarily raised for the purpose of
preparing capital investment. The maturities of these bonds
payable, long-term loans payable and lease obligations on
finance lease transactions are up to10.5 years at the longest after
the balance sheet date. Some are exposed to interest rate fluctuation risk and the Companies hedge such risk by interest rate
swap transactions.
Regarding derivatives, the Companies employ foreign exchange
forward contracts to reduce the risk of foreign currency exchange
movements that arise from the previously mentioned receivables
and payables denominated in foreign currencies. In addition, theCompanies use interest rate swap transactions to reduce the interest rate fluctuation risk of loans, and use commodity swap transactions to reduce the risk of fluctuation of commodity prices for raw
materials. As hedging instruments under hedge accounting, theCompanies enter into these derivative transactions in accordancewith the Companies’ policies to reduce the corresponding risk toeach hedged item. The Companies compare the market change ofhedged items and hedging instruments or the cash flow changes.
Assessment of effectiveness for hedging activities depends on theratio of the amount of change.

(3) Systems for management of financial instruments riska) Credit risk management (the risk that transaction partners
may default on their obligations to the Companies)
The credit risk in relation to trade receivables from customers, pursuant to criteria for managing credit exposure, is managed by controlling due dates and balances of each customer. In addition, theCompanies manage to identify doubtful receivables earlier and mitigate their risk caused by aggravation of the financing position, etc.
Because the counterparties to derivative transactions are limited
to authentic financial institutions, the Companies do not anticipate
any losses arising from credit risk.
b) Market risk management (the risks arising from fluctuations in
exchange rates, interest rates and other indicators)
The Companies, in principle, employ foreign exchange forward
contracts to reduce the risk of foreign currency exchange movements that arise from the previously mentioned receivables andpayables denominated in foreign currencies. In addition, the Companies use interest rate swap transactions to reduce the interest rate
fluctuation risk of loans, and use commodity swap transactions to
reduce the risk of fluctuation of commodity prices for raw materials.
Regarding investment securities, the Companies periodicallyreview the market value of such financial instruments and the financial position of the issuer (the company having business transactions with the Companies). In addition, other than debt securities tobe held until maturity, the Companies review the status of theseinvestments on a continuing basis.
Derivative transactions have been entered into in accordancewith the Companies’ policies. The execution of derivatives, which isbased on the application of each section, is mainly controlled by
the Finance Department of each company, or by the Material Section regarding commodity swap transactions. In addition, theFinance Department periodically reports to the management andeach section, and strictly performs risk management relating toderivative transactions.
c) Liquidity risk management (the risk that the Companies may not
be able to meet its payment obligations on the scheduled date)
The Companies reduce the liquidity risk by having each company
review and revise cash management plans monthly or timely.
(4) Supplementary explanation of the estimated fair value offinancial instruments and related matters
The estimated fair value of financial instruments is their price basedon their market price and other indicators. When there is no market
price available, it includes prices which are reasonably computed.
Since variable factors are taken into account in computing theprice, this price may fluctuate depending on different assumptions
adopted. In addition, the contract (notional) amount of derivatives in“Note 8. Derivatives” is not an indicator of the actual market risk
involved in derivative transactions.

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Fuji Electric Report Financials 2013

2. Estimated fair value and other matters related to financial instruments
Carrying amounts on the consolidated balance sheets as of March 31, 2013 and 2012, estimated fair value and the variance between them
are shown in the following table. Financial instruments whose estimated fair value is deemed to be extremely difficult to obtain are notincluded (Please refer to Note 2).
Millions of yen

2013
Carrying amounts

Fair value

Variance¥  39,688¥  39,688¥ —Trade receivables

216,852

216,820(32)

Investment securities

90,06590,065—Trade payables(129,934)(129,934)—

Short-term debt

(77,413)(77,413)—

Current portion of long-term debt

(23,180)(23,180)—

Lease obligations (Current Liabilities)(11,832)(11,832)—

Long-term debt

(126,123)(126,322)

199

Lease obligations (Long-term Liabilities)(18,555)(18,665)110

Derivative transactions to which hedge accounting is not applied

(232)

(232)

—

Derivative transactions to which hedge accounting is applied

(129)

(129)

—

Cash and cash equivalents

Derivatives

Millions of yen
2012
Carrying amounts

Cash and cash equivalents

Fair value

Variance¥  64,261¥  64,261¥ —Trade receivables

199,677

199,677—

Investment securities

89,88889,888—Trade payables(136,466)(136,466)—

Short-term debt

(58,423)(58,423)—

Current portion of long-term debt

(119,639)(119,887)

248

Lease obligations (Current Liabilities)(11,102)(11,102)—

Long-term debt

(77,802)(77,856)

54

Lease obligations (Long-term Liabilities)(22,521)(22,543)

22

Derivatives
Derivative transactions to which hedge accounting is not applied

(62)

(62)

—

Derivative transactions to which hedge accounting is applied

125

125

—

Thousands of U.S. dollars (Note 3)

2013
Carrying amounts

Fair value

Variance$  422,218$  422,218$   —

2,306,944

2,306,601(343)

958,145958,145—

Trade payables(1,382,283)(1,382,283)—

Short-term debt

(823,548)(823,548)—

Current portion of long-term debt

(246,606)(246,606)—

Lease obligations (Current Liabilities)(125,878)(125,878)—(1,341,739)(1,343,852)

2,113(197,395)(198,565)

1,170

Derivative transactions to which hedge accounting is not applied(2,471)(2,471)—

Derivative transactions to which hedge accounting is applied(1,373)(1,373)—

Cash and cash equivalents
Trade receivables
Investment securities

Long-term debt
Lease obligations (Long-term Liabilities)
Derivatives(*1) Figures shown in parentheses are liability items.
(*2) The value of assets and liabilities arising from derivatives is shown at net value, and a net liability position is shown in parentheses.
Notes: 1. Methods for computing the estimated fair value of financial instruments and securities and derivative transactions
		 (1) Cash and cash equivalents			
Since these items are settled in a short period of time, estimated fair values are virtually the same as the carrying amounts.
		 (2) Trade receivables
			Fair values of trade receivables, classified by each maturity, are based on the present value discounted by the interest rate determined taking into account the term until
maturity and the credit risk.
		 (3) Investment securities
			
Stocks are valued at the exchange trading price. For information on securities classified by the purpose of holding, please refer to “Note 7. Securities.”

Fuji Electric Report Financials 2013

		 (4) Trade payables, (5) Short-term debt, (6) Current portion of long-term debt (except bonds) and (7) Lease obligations
			(Current Liabilities) Since these items are settled in a short period of time, estimated fair values are virtually the same as the carrying amounts.
		 (6) Current portion of long-term debt (bonds) and (8) Long-term debt (bonds)
			
Fair values of bonds issued by the Company are based on each market price.
		 (8) Long-term debt (except bonds) and (9) Lease obligations (Long-term Liabilities)
			Fair values of these items are based on the present value of the total of principal and interest discounted by the interest rate applied if similar new borrowings and newlease transactions were entered into.
		 (10) Derivatives
			Please refer to “Note 8. Derivatives.”
2. Items for which obtaining an estimated fair value is deemed to be extremely difficult
Thousands of
U.S. dollars(Note 3)

Millions of yen
Carrying amounts

Carrying amounts

2013

2012

2013

¥29,399¥35,703$312,762

Unlisted stocks (including stocks of unconsolidated subsidiaries and affiliates)

Carrying amounts		‌  Because the items in the preceding table do not have market price and obtaining the estimated fair values of these items is deemed to be extremely difficult, fair value has notbeen disclosed in (3) Investment securities.
3. Redemption schedule for monetary assets and securities with maturity dates as of March 31, 2013 and 2012:
Millions of yen
2013
Within 1 year

Between 1 and5 years

Between 5 and10 years

Over 10 years

Cash and cash equivalents¥ 39,688¥    —¥—¥—

Trade receivables

213,793

3,060

—

—

Investment securities
Debt securities with maturity date classified as other securities
0

—

—

—

¥253,481¥3,060¥—¥—Between 1 and5 years

Between 5 and10 years

Over 10 years(Public bonds)
Total

Millions of yen
2012
Within 1 year

Cash and cash equivalents¥ 64,261

¥—

¥—

¥—

Trade receivables

199,677———

Investment securities
Debt securities with maturity date classified as other securities(Public bonds)
Total

0

—

—

—

¥263,938

¥—

¥—

¥—

Between 1 and5 years

Between 5 and10 years

Over 10 years

Thousands of U.S. dollars (Note 3)
2013
Within 1 year

Cash and cash equivalents$  422,218$    —$—$—

Trade receivables

2,274,387

32,557——

Investment securities
Debt securities with maturity date classified as other securities
2

—

—

—

$2,696,607$32,557$—$—

Carrying amounts

Unrealized gains

Unrealized losses¥4,549(Public bonds)
Total

4. Repayment schedule for long-term debt and lease obligations:
		 Please refer to “Note 9. Short-term Debt and Long-term Debt” and “Note 10. Lease Obligations.”

Note 7. Securities
1. Other securities
Millions of yen

2013
March 31, 2013

Cost

Marketable securities classified as other securities
Equity securities¥59,364¥90,065¥35,250

Debt securities

0

0

—

—

Others

—

—

—

—

Total

¥59,364¥90,065¥35,250¥4,549

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Fuji Electric Report Financials 2013

Millions of yen
2012
March 31, 2012

Cost

Carrying amounts

Unrealized gains

Unrealized losses¥1,847

Marketable securities classified as other securities
Equity securities¥60,121¥89,888¥31,614

Debt securities

0

0

—

—

Others

—

—

—

—

Total

¥60,121¥89,888¥31,614¥1,847

Thousands of U.S. dollars (Note 3)

2013
March 31, 2013

Cost

Carrying amounts

Unrealized gains

Unrealized losses$48,394

Marketable securities classified as other securities
Equity securities$631,531$958,142$375,005

Debt securities

2

2

—

—

Others

—

—

—

—

Total

$631,533$958,144$375,005$48,394

Note: ‌The following is not included in the preceding tables because it does not have market price and obtaining an estimated fair value is deemed to be extremely difficult:
Unlisted stocks (Values in the consolidated balance sheets as of March 31, 2013 and 2012 were ¥7,195 million ($76,552 thousand) and ¥5,576 million, respectively.)

2. Sales of other securities
Thousands of
U.S. dollars(Note 3)

Millions of yen

2013

2013

2012

¥1,216¥312$12,943

Gain on sales

750

290

7,988

Loss on sales

1

—

11

Proceed from sales

3. Impairment of other securities
Thousands of
U.S. dollars(Note 3)

Millions of yen

2013

2013

2012

¥511

Impairment losses$5,436¥139

4. Investments in unconsolidated subsidiaries and affiliates
Thousands of
U.S. dollars(Note 3)

Millions of yen

Investments in the stock of jointly controlled companies included in investments inunconsolidated subsidiaries and affiliates

2013

2012

2013

¥13,087¥22,624$139,232

Note 8. Derivatives
1. Derivative transactions to which hedge accounting is not applied
Millions of yen

2013
Contract amountContract amountover 1 year

Unrealized
gain/loss

U.S. dollars¥3,391¥—¥(182)¥(182)

Euro

1,409

—

(47)

(47)

163

—

(2)

(2)

Singapore dollars

92

—

(1)

(1)

Vietnamese Dong

1

—

0

0

¥5,056¥—¥(232)¥(232)

Fair value

Foreign currency forward contracts:
Receivables:

Korean Won
Payables:Total

Fuji Electric Report Financials 2013

Millions of yen

2012
Contract amountContract amountover 1 year

Unrealized
gain/loss

U.S. dollars¥1,877

¥—

¥(12)

¥(12)

Euro

1,316

—

(53)

(53)

343

—

3

3

¥3,536

¥—

¥(62)

¥(62)

Fair value

Foreign currency forward contracts:
Receivables:

Korean Won
Total

Thousands of U.S. dollars (Note 3)2013
Contract amountContract amountover 1 year

Unrealized
gain/loss

U.S. dollars$36,056$—$(1,930)$(1,930)Euro

15,000

—

(504)

(504)

Korean Won

1,743

—

(23)

(23)
(14)

Fair value

Foreign currency forward contracts:
Receivables:

Payables:Singapore dollars

980

—

(14)

Vietnamese Dong

13

—

(0)

(0)

$53,792$—$(2,471)$(2,471)

Total
Note: ‌The fair value is estimated based on forward exchange rates.

2. Derivative transactions to which hedge accounting is applied(1) Currency-related contacts
Millions of yen

2013
Hedge accounting
methodContract amountContract amountover 1 year

U.S. dollars¥  705¥ —¥ (74)

Canadian dollars

1,157

627

(112)

Type of derivative

Principal items hedged

Fair value

Foreign currency forward contracts:
Receivables:

Deferral hedge
methodPayables:Accounts receivable–trade

Accounts payable–trade

U.S. dollars

169

—

3

Euro

726

13

34

Swedish krona

56

—

5

Pounds sterling

47

—

(0)

U.S. dollars¥  614¥ —Total¥3,474¥640

Foreign currency forward contracts:
Allocation method

Receivables:(Note 2)

Accounts receivable–trade¥(144)

Millions of yen

2012
Hedge accounting
methodType of derivative

Principal items hedged

Contract amountContract amountover 1 year

¥3,227¥1,445¥(150)

46—

0Fair value

Foreign currency forward contracts:
Receivables:
Deferral hedge
methodAccounts receivable–trade

U.S. dollars
Euro
Payables:Accounts payable–trade

U.S. dollars

197

—

4

Euro

890

328

10

U.S. dollars¥  866¥           —Total¥5,226¥1,773Foreign currency forward contracts:
Allocation method

Receivables:

Accounts receivable–trade(Note 2)¥(136)

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Fuji Electric Report Financials 2013

Thousands of U.S. dollars (Note 3)

2013
Hedge accounting
methodContract amountContract amountover 1 year

U.S. dollars$ 7,506$     —$  (791)

Canadian dollars

12,3106,678(1,197)

Type of derivative

Principal items hedged

Fair value

Foreign currency forward contracts:
Receivables:

Deferral hedge
methodAccounts receivable–trade

Payables:Accounts payable–trade

U.S. dollars

1,805

—

34

Euro

7,728

138

364

Swedish krona

598

—

56

Pounds sterling

481

—

(6)

U.S. dollars$ 6,534$     —

Total

$36,962$6,816

Foreign currency forward contracts:
Allocation method

Receivables:(Note 2)

Accounts receivable–trade$(1,540)

Notes: 1. The fair value is estimated based on forward exchange rates.
2.	Since amounts in foreign currency forward contracts treated by the allocation method are handled together with accounts receivable–trade and accounts payable–trade that are
subject to hedging, the estimated fair value of such contracts is included in the fair value of accounts receivable–trade or accounts payable–trade.

(2) Interest-rate-related contracts
Millions of yen

2013
Hedge accounting method

Specific treatment forinterest rate swaps

Type of derivative

Interest rate swaps
Receive floating pay fixed

Principal items hedged

Contract amountContract amountover 1 year

¥24,500¥24,500

Fair value

Long-term loans payable(Note 2)Millions of yen

2012
Hedge accounting method

Specific treatment forinterest rate swaps

Type of derivative

Interest rate swaps
Receive floating pay fixed

Principal items hedged

Contract amountContract amountover 1 year

¥7,500¥7,500Fair value

Long-term loans payable(Note 2)Thousands of U.S. dollars (Note 3)

2013
Hedge accounting method

Specific treatment forinterest rate swaps

Type of derivative

Interest rate swaps
Receive floating pay fixed

Principal items hedged

Contract amountContract amountover 1 year

$260,638$260,638

Fair value

Long-term loans payable(Note 2)

Notes: 1. The fair value is principally based on the quotes obtained from the correspondent financial institutions.
2.	Since amounts in interest rate swaps which qualify for hedge accounting and meet specific matching criteria are handled together with long-term loans payable that are subject
to hedging, the estimated fair value of such interest rate swaps is included in the fair value of the long-term loans payable.

(3) Commodity-related contracts
Millions of yen

2013
Hedge accounting method

Deferral hedge method

Type of derivative

Commodity swap
Receive floating pay fixed

Principal items hedged

Contract amountContract amountover 1 year

¥250

¥—

Fair value

Raw materials¥15

Millions of yen

2012
Hedge accounting method

Deferral hedge method

Type of derivative

Commodity swap
Receive floating pay fixed

Principal items hedged

Contract amountContract amountover 1 year

¥443

¥—

Fair value

Raw materials¥11Fuji Electric Report Financials 2013

Thousands of U.S. dollars (Note 3)

2013
Hedge accounting method

Deferral hedge method

Type of derivative

Commodity swap
Receive floating pay fixed

Principal items hedged

Contract amountContract amountover 1 year

$2,670$—Fair value

Raw materials$167

Note: The fair value is principally based on the quotes obtained from the correspondent financial institutions.

Note 9. Short-term Debt and Long-term Debt
Short-term debt as of March 31, 2013 and 2012 consisted of the following:Thousands of
U.S. dollars(Note 3)

Millions of yen

2013

2012

2013

¥49,413¥48,423$525,676

Loans, principally from banks
Commercial paper

28,00010,000297,872

Short-term Debt

¥77,413¥58,423$823,548

The weighted average interest rates on short-term debt as of March 31, 2013 and 2012 were 0.73% and 0.96%, respectively.

Long-term debt as of March 31, 2013 and 2012 consisted of the following:Thousands of
U.S. dollars(Note 3)

Millions of yen

Loans, principally from banks and insurance companies

2013

2012

¥ 98,803¥106,431

2013$1,051,111

Bonds issued by the Companies:
1.48% Yen unsecured straight bonds due 2012—

20,000

—1.62% Yen unsecured straight bonds due 2012—

20,000—1.34% Yen unsecured straight bonds due 2013—

20,000

—1.44% Yen unsecured straight bonds due 2013

10,00010,000106,383

0.79% Yen unsecured straight bonds due 2015

15,000—159,574

0.86% Yen unsecured straight bonds due 2016

20,00020,000212,766

1.00% Yen unsecured straight bonds due 2017

5,000

—

53,191

500

1,010

5,320

149,303

197,441

1,588,345

Zero coupon convertible bonds with stock acquisition rights due 2016

23,180

119,639

246,606¥126,123¥ 77,802$1,341,739

Less: Portion due within one year
Long-term Debt

The weighted average interest rates on loans, principally from banks and insurance companies, as of March 31, 2013 and 2012 were 0.93% and 1.21%, respectively.

As of March 31, 2013, the aggregate annual maturities of long-term debt were as follows:

Years ended March 31,

Millions of yen

Thousands of
U.S. dollars(Note 3)2015

¥ 23,310$  247,979

2016

34,526367,3042017

36,423

387,4862018

29,717316,146

2019 thereafter

2,147

22,824¥126,123$1,341,739

Total

Note 10. Lease Obligations
Lease obligations as of March 31, 2013 and 2012 consisted of the following:Thousands of
U.S. dollars(Note 3)

Millions of yen

Short-term

2013

2012

2013

¥11,832¥11,102$125,878

Long-term

18,55522,521

197,395

Total¥30,387¥33,623$323,273

The weighted average interest rates on lease obligations as of March 31, 2013 and 2012 were 2.24% and 2.30%, respectively.

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24

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25

Fuji Electric Report Financials 2013

As of March 31, 2013, the aggregate annual maturities of lease obligations were as follows:

Millions of yen

Thousands of
U.S. dollars(Note 3)2015

¥ 9,844$104,733

2016

5,309

56,488

2017

2,185

23,250

2018

855

9,106

2019 thereafter

362

3,818

¥18,555$197,395

Years ended March 31,

Total

Note 11. Retirement Benefits
The Company and its domestic consolidated subsidiaries have a pension fund, and contract-type corporate pension plans and lump-sum
payment plans as defined benefit plans and defined contribution pension plans.
In certain cases, the Companies pay additional retirement benefits other than the above plans.
The liability (asset) for employees’ retirement benefits as of March 31, 2013 and 2012 consisted of the following:Thousands of
U.S. dollars(Note 3)

Millions of yen

2013

2012

Projected benefit obligation¥(204,703)¥(203,149)$(2,177,701)

2013

Fair value of plan assets

156,182

150,606

1,661,518

Excess projected benefit obligation over plan assets(48,521)(52,543)(516,183)

Unrecognized actuarial loss

62,84571,241

668,574

Unrecognized prior service cost

1,879

1,911

19,984

16,203

20,609172,375

Carrying amountPrepaid pension expense
Net liability

27,884

31,458296,651¥ (11,681)¥ (10,849)$  (124,276)

Note: Certain domestic consolidated subsidiaries adopted a simplified method in the calculation of their retirement benefit obligations.

The components of net periodic benefit costs for the years ended March 31, 2013 and 2012 were as follows:
Thousands of
U.S. dollars(Note 3)

Millions of yen

Service cost

2013

2012

2013

¥ 5,192¥ 5,264$ 55,242

Interest cost

5,056

5,009

53,797

Expected return on plan assets(3,518)(3,565)(37,429)

Recognized actuarial loss

9,386

9,262

99,859

35

(37)

352

16,151

15,933

171,821

Loss on disappearance of pension assets

—

6,987

—

Loss on end of retirement benefits plans

—

1,426

—

1,443

1,275

15,356¥17,594¥25,621$187,177

Amortization of prior service cost
Net periodic benefit costs

Contributory portion to a defined contribution pension plan
Total

Notes: 1.	Special additional termination benefits which have not been included in the amounts shown in the preceding table were ¥924 million ($9,831 thousand) and ¥913 million for theyears ended March 31, 2013 and 2012, respectively, and were charged to income as paid.
2. Retirement benefit expenses for domestic consolidated subsidiaries adopting the simplified method are included in “Service cost.”

Assumptions used for the years ended March 31, 2013 and 2012 were as follows:
2013

2012

Discount rates

mainly 2.5%

mainly 2.5%

Expected rates of return on plan assets

mainly 2.5%

mainly 2.5%

The prior service cost is amortized by the straight-line method
over the expected remaining working lives of the then-active
employee participants.

The actuarial gains and losses are amortized by the straight-line
method over the expected remaining working lives of the thenactive employee participants from the next period in which theyarise, respectively.

Fuji Electric Report Financials 2013

Note 12. Shareholders’ Equity
1. Shares issued and outstanding / Treasury stock
The Corporation Law of Japan (“the Law”) provides that an amount equal to 10% of the amount to be disbursed as distributions of capitalsurplus (other than the capital reserve) and retained earnings (other than the legal reserve) be transferred to the capital reserve and the legal
reserve, respectively, until the sum of the capital reserve and the legal reserve equals 25% of the capital stock account. Such distributions
can be made at any time by resolution of the shareholders or by the Board of Directors if certain conditions are met.
Movements in shares outstanding and treasury stock during the years ended March 31, 2013 and 2012 were as follows:
Thousands of shares
Increase in
the yearMarch 31, 2012

Decrease in
the yearMarch 31, 2013

Shares outstanding:Common stock
Total

746,484——

746,484

746,484——

746,484

31,88827

331,912

31,88827

331,912

Treasury stock:
Common stock
Total

Thousands of shares
Increase in
the yearMarch 31, 2011

Decrease in
the yearMarch 31, 2012

Shares outstanding:Common stock
Total

746,484——

746,484

746,484——

746,484

31,86722

131,88831,86722

131,888Treasury stock:
Common stock
Total

The increases of treasury stock were due to purchase of shares of less than one voting unit and the decreases of treasury stock were
due to sales of shares at requests of shareholders who own less than one voting unit for the years ended March 31, 2013 and 2012.

2. Dividends(1) Dividends paid
For the year ended March 31, 2013
Type ofsharesTotal
dividends(millions of yen)

Total dividends(thousands of U.S. dollars(Note 3))

Meeting of the Board of
Directors on May 24, 2012

Common
stock

1,429

15,2042.0

Meeting of the Board of
Directors on
October 25, 2012

Common
stock

1,429

15,2042.0

Resolution

Dividends per
Dividends
share (U.S.
per share (yen) dollars (Note 3))

Cut-off date

Effective date

0.02

March 31, 2012

June 5, 20120.02

September 30,
2012

December 3,
2012

For the year ended March 31, 2012
Resolution

Meeting of the Board of
Directors on May 27, 2011

Type ofsharesTotal Dividends (millions of yen)

Dividends per share (yen)Cut-off date

Effective dateCommon
stock

1,429

2.0

March 31, 2011

June 7, 2011

2.0

September 30,
2011

December 1,
2011

Meeting of the Board of
CommonDirectors on October 27, 2011 stock

1,429(2) Dividends with the cut-off date in the year ended March 31, 2013 and effective date in the year ending March 31, 2014
Resolution

Meeting of the Board of
Directors on May 23, 2013

Type ofsharesCommonstock

Total
Total dividends
dividends(thousands of U.S.
(millions of yen)dollars (Note 3))2,143

22,805

Source ofdividends

Retained
Earnings

Dividends per
Dividends
share (U.S.
per share (yen) dollars (Note 3))

3.0

0.03

Cut-off date

Effective date

March 31, 2013

June 4, 2013

Dividends with the cut-off date in the year ended March 31, 2012 and effective date in the year ended March 31, 2013
Resolution

Meeting of the Board of
Directors on May 24, 2012

Type ofsharesCommonstock

Total dividends (millions of yen)

Source ofdividends

Dividends per share (yen)Cut-off date

Effective date

1,429

Retained
Earnings

2.0

March 31, 2012

June 5, 2012

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Fuji Electric Report Financials 2013

Note 13. Research and Development Costs
Research and development costs charged to income were ¥31,160 million ($331,492 thousand) and ¥32,247 million for the years ended
March 31, 2013 and 2012, respectively.

Note 14. Selling, General and Administrative Expenses
Major components of Selling, General and Administrative Expenses for the years ended March 31, 2013 and 2012 were as follows:
Thousands of U.S.
dollars (Note 3)

Millions of yen

2013

2012

2013

Salaries and wages¥67,657¥66,775$719,764

Research and development costs

25,747

27,526273,913

Note 15. Extraordinary Loss, Net
Extraordinary loss, net, for the years ended March 31, 2013 and 2012 were as follows:
Thousands of
U.S. dollars(Note 3)

Millions of yen

2013

2013

2012

Extraordinary income¥   29¥  2,081$   310Gain on sales of investment securities

750

290

7,988

Insurance income

265

—

2,821

Loss on disposal of noncurrent assets

(404)

(459)

(4,305)

Loss on devaluation of investment securities

(520)

(207)

(5,540)(6,446)—(68,580)

Loss on liquidation of subsidiaries

(827)

—

(8,805)

Settlement package

(700)

—

(7,447)

Loss on disappearance of pension assets—(6,987)—

Office / Factory integration costs—(2,642)—

Loss on disaster—(1,139)—(1,244)(4,143)(13,215)¥(9,097)¥(13,206)$(96,773)

Gain on sales of noncurrent assets

Extraordinary loss

Impairment loss

OthersExtraordinary Loss, Net

The Companies recognized a loss on disappearance of pension assets mainly as a deduction from the prepaid pension expense at theamount reasonably estimated for the pension funds expected to have been lost and for the unamortized balance of the actuarial difference
based on the judgment that the majority of the pension funds related to a particular investment advisory firm had disappeared.

Note 16. Impairment Loss
The Companies determine the asset group by considering the division of management accounting.
For the year ended March 31, 2013, the Companies recognized an impairment loss on the following asset groups:

Description

Location

Classification

Business assets (Solar cells business)

Kumamoto prefecture

Leased assets, buildings,
land and other assets

Idle assets and assets to be disposed

Yamanashi prefecture and four others Leased assets and other assets

Millions of yen

Thousands of
U.S. dollars(Note 3)

¥6,164$65,582

282

2,998

The Companies recognized an impairment loss up to the recoverable amount of idle assets and assets to be disposed as they are notexpected to be used, and business assets for solar cells business as a result of reconsidering the future plan based on the current businessenvironment.
The impairment loss consisted of ¥3,135 million ($33,350 thousand) for leased assets, ¥1,457 million ($15,500 thousand) for buildings
and structures and ¥1,854 million ($19,730 thousand) for other assets.
The recoverable amount of the above assets was measured by the net realizable value or the value in use. The net realizable value wasmeasured nil related to those of which selling or diversion was deemed difficult. The value in use was calculated by discounting future cash
flows at a rate of 5.0%.

Fuji Electric Report Financials 2013

Note 17. Income Taxes
The components of income taxes for the years ended March 31, 2013 and 2012 were as follows:
Thousands of
U.S. dollars(Note 3)

Millions of yen

Current
DeferredIncome Taxes

2013

2012

2013

¥  5,725¥  3,950$  60,908(17,152)(11,847)(182,468)¥(11,427)¥ (7,897)$(121,560)

The Company and its domestic consolidated subsidiaries are subject to corporate income tax, prefectural and municipal inhabitants’taxes and enterprise tax, based on income.
The significant components of deferred tax assets and liabilities as of March 31, 2013 and 2012 were as follows:
Thousands of
U.S. dollars(Note 3)

Millions of yen

2013

2012

2013

Deferred tax assets¥ 24,311¥ 24,271$ 258,637

The investment deduction of the foreign consolidated subsidiaries

19,414

17,811

206,542

Tax loss carryforwards

9,653

15,453

102,692

Investment securities

8,443

8,390

89,827

Accrued employees’ bonuses

6,640

6,208

70,640

Tangible fixed assets

5,850

3,795

62,235Inventories

4,582

4,587

48,749

Other

7,604

8,427

80,861

86,497

88,942920,183(32,905)(49,192)(350,052)

53,59239,750570,131

Gain on securities contribution to employee retirement benefit trust(20,853)(22,279)(221,841)

Unrealized gain on other securities(11,458)(11,197)(121,894)

Investment securities(5,718)(7,385)(60,839)(761)(1,251)(8,095)Gross deferred tax liabilities(38,790)(42,112)(412,669)

Net deferred tax assets (liabilities)¥ 14,802¥ (2,362)$ 157,462

Employees’ retirement benefits

Gross deferred tax assets
Less: Valuation allowance
Total deferred tax assets
Deferred tax liabilities

Other

The reconciliation between the statutory income tax rate and the effective income tax rate for the years ended March 31, 2013 and 2012
was as follows:
2013

2012

Statutory income tax rate

38.0%

Valuation allowance(97.4)(155.2)

Permanent difference resulting from non-taxable income, including dividends received(10.0)(28.3)Tax rate difference of overseas consolidated subsidiaries(3.6)(13.8)Tax credits

(3.3)

(0.5)

Decrease in deferred tax liabilities due to the revision of statutory tax rate

—

(8.7)

Permanent difference resulting from expenses not deductible for income tax purposes

5.1

19.5

Foreign taxes

2.2

(0.0)

Other

0.2

(1.4)

(68.8)%(147.7)%

Effective income tax rate

40.7%

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Fuji Electric Report Financials 2013

Note 18. Consolidated Statements of Comprehensive Income
Amounts reclassified to net income (loss) in the current period that were recognized in other comprehensive income in the current or previous periods and the tax effects for each component of other comprehensive income were as follows:
Thousands of
U.S. dollars(Note 3)

Millions of yen

2013

2013

2012

Valuation difference on available-for-sale securities:
Amount arising during this year
Reclassification adjustments
Before tax effect¥1,864¥(4,727)42(67)$19,834447

1,906(4,794)

20,281

Tax effect

(352)

3,709

(3,745)

Valuation difference on available-for-sale securities

1,554(1,085)

16,536

Amount arising during this year

(26)

(200)

(277)

Asset acquisition cost adjustments

23

60

240

Before tax effect

(3)

(140)

(37)

Tax effect

1

54

14

Deferred gains or losses on hedges

(2)

(86)

(23)

5,762

320

61,294

—

50

0

5,762

370

61,294

Deferred gains or losses on hedges:

Foreign currency translation adjustments:
Amount arising during this year
Reclassification adjustments
Before tax effectTax effectForeign currency translation adjustments

—

—

—

5,762

370

61,294

Share of other comprehensive income of associates accounted for using equity method:Amount arising during this year
Total Other Comprehensive Income (Loss)

35

34

373

¥7,349¥  (767)$78,180

Note 19. Supplementary Cash Flow Information
The summary of assets acquired and liabilities assumed through the acquisition of shares of Fuji Electric Tsugaru Semiconductor Co., Ltd.
for the year ended March 31, 2013, related acquisition costs and net disbursement consisted of the following:
Millions of yen

2013

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

Current Assets¥  763$  8,120

Fixed Assets

4,071

43,314279

2,976

Goodwill

(9)

(97)

Long-term Liabilities(1,280)(13,626)

Acquisition Value of Shares

3,824

40,687

Cash and Cash Equivalents

(1)

(11)

3,823

40,676

Current Liabilities

Net Disbursement due to the Share Acquisition

Related to the merger with Fuji Electric T&D Succession Co., Ltd., the summary of assets and liabilities succeeded for the year ended
March 31, 2013 consisted of the following:
Millions of yen

Thousands of
U.S. dollars(Note 3)

2013

2013

Current Assets¥ 9,585$101,969

Fixed Assets

12,286

130,704

Total Assets

21,871

232,673

Current Liabilities

13,851

147,357

Long-term Liabilities

1,846

19,636

Total Liabilities

15,697

166,993

Fuji Electric Report Financials 2013

Note 20. Contingent Liabilities
Contingent liabilities as of March 31, 2013 and 2012 were as follows:
Thousands of
U.S. dollars(Note 3)

Millions of yen

2013

Guarantees

2013

2012

¥3,584¥3,445$38,132

Note 21. Leases
1. Finance leases other than those that were deemed to transfer the ownership of the leased assets to the lessees and contracted before
April 1, 2008 are accounted for by the method that is applicable to ordinary operating leases.
Pro forma information of those leased property such as acquisition cost, accumulated depreciation, accumulated impairment loss,­obligations under finance leases, lease expense, depreciation expense, interest expense and impairment loss on an “as if capitalized” basis
for the years ended March 31, 2013 and 2012 were as follows:
Acquisition cost, accumulated depreciation and accumulated impairment loss under finance leases:
Thousands of
U.S. dollars(Note 3)

Millions of yen

2013

2012

2013

Machinery andequipment

Machinery andequipment

Machinery andequipment¥11,598¥35,131$123,391

Accumulated depreciation

8,030

26,38785,426

Accumulated impairment loss

1,132

114

12,049¥ 2,436¥ 8,630$ 25,916

Acquisition cost

Net leased property

Obligations under finance leases:
Thousands of
U.S. dollars(Note 3)

Millions of yen

2013

2013

2012

Due within one year

¥2,462¥4,407

Due after one year

1,650

5,008

17,554¥4,112¥9,415$43,748

Total$26,194

Lease expense, reversal of accumulated impairment loss on leased assets, depreciation expense, interest expense and impairment loss
under finance leases:
Thousands of
U.S. dollars(Note 3)

Millions of yen

2013

2013

2012

¥3,696¥8,488

113

528

1,209

3,518

7,777

37,431

Interest expense

131

299

1,402

Impairment loss

1,132

—

12,049Lease expense
Reversal of accumulated impairment loss on leased assets
Depreciation expense$39,327

2. The minimum rental commitments under noncancellable operating leases as of March 31, 2013 and 2012 were as follows:
Thousands of
U.S. dollars(Note 3)

Millions of yen

2013

2012

2013

Due within one year¥  831¥  831

Due after one year

416

1,247

4,423

¥1,247¥2,078$13,268

Total$ 8,845

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Fuji Electric Report Financials 2013

Note 22. Segment Information
1. Segment information(1) Outline of reporting segments
The Companies’ reporting segments are components for which
separate financial information is available and whose operating
results are reviewed regularly by the board of directors of the Company in order to make decisions about resource allocation and toassess performance. The Company has business headquarters by
products and services at its head office. The business headquarters
prepare comprehensively global strategies related to their products
and services and control their business activities. Accordingly, theCompanies have five reporting segments, principally based on thebusiness headquarters, that take into account the similarity of
category and nature of products and services: Power and Social

Infrastructure, Industrial Infrastructure, Power Electronics, Electronic
Devices and Food and Beverage Distribution. These segments
consist of 2 or more business segments.
As of April 1, 2012, the Companies reclassified the reporting
segments from the existing seven reporting segments of Energy,
Industrial Systems, Social Systems, Power Electronics, Electronic
Devices, ED&C Components and Vending Machines to the fivereporting segments described above along with the change of theCompanies’ organization structure. The reporting segment information for the year ended March 31, 2012 has been reclassified toreflect this change.

Main products and services of each reporting segment consisted of the following:
Reporting segments

Main products and services

Power and Social Infrastructure

Thermal/geothermal/hydroelectric power generation, nuclear power-related equipment, energy management systems, substation equipments, watt-hour meters, radiation monitoring systems, transport systems

Industrial Infrastructure

Industrial drive systems, plant control systems, measurement instruments, industrial power supplies,
power receiving and distribution substation equipment for industry

Power Electronics

Inverters/servo systems, motors, EV systems, uninterruptible power supply systems (UPSs), power
conditioners (PCSs), power distribution and control equipment

Electronic Devices

Power semiconductors, photoconductive drums, solar cells, magnetic disks

Food and Beverage Distribution

Food and beverage vending machines, retail distribution systems, showcases, currency handling equipment(2) Calculation method of net sales, profit or loss, assets,
liabilities and other items on each reporting segment
The accounting policies applied by each reporting segment areconsistent with those described in Note 2. “Summary of Significant

Accounting Policies.” Segment profit or loss presented in segment
information is calculated based on operating income in the consolidated statements of income. Intersegment sales and transfer are
determined by market value.

(3) Information on net sales, profit or loss, assets, liabilities and other items by each reporting segment
Reporting segment information as of March 31, 2013 and 2012 and for the years then ended were as follows:
Millions of yen

Year ended March 31, 2013

Power andSocialIndustrial
Infrastructure Infrastructure

PowerElectronics

Electronic
Devices

Food andBeverageDistribution

Others

Total

Adjustments

Consolidated¥133,831¥110,584¥111,891¥79,590¥745,781¥—¥745,781

Sales, profits or losses andassets by reporting segments
Net Sales
Sales to third parties
Inter-segment sales andtransfers¥197,488¥112,397

1,372

3,232

7,818

3,007

195

37,302

52,926(52,926)—

198,860

115,629

141,649

113,591

112,086

116,892

798,707(52,926)

745,781

Segment profits (losses)¥11,631¥5,042¥2,601¥(1,416)¥6,423¥2,880¥27,161¥(5,169)¥21,992

Segment assets¥154,625¥90,483¥118,088¥160,771¥64,421¥62,236¥650,624¥114,939¥765,563

Depreciation and amortization¥2,602¥1,664¥3,675¥18,661¥2,613¥1,026¥30,241¥813¥31,054

Investments for companies
applied equity method¥13,946

¥70

¥—

¥—

¥—

¥541

¥14,558¥—¥14,558

Capital expenditures¥3,167¥2,812¥7,161¥8,515¥2,750¥792¥25,197¥947¥26,144

Total sales

Other items

Fuji Electric Report Financials 2013

Millions of yen

Year ended March 31, 2012

Power andSocialIndustrial
Infrastructure Infrastructure

PowerElectronics

Electronic
Devices

Food andBeverageDistribution

Others

Total

Adjustments

Consolidated¥142,745¥109,799¥115,354¥74,606¥703,534¥—¥703,534

Sales, profits or losses andassets by reporting segments
Net Sales
Sales to third parties¥154,356

Inter-segment sales
and transfers¥106,674

2,247

3,820

8,081

2,436

108

37,96254,654(54,654)—

156,603

110,494

150,826

112,235

115,462

112,568

758,188(54,654)703,534

Segment profits (losses)¥12,019¥4,385¥3,778¥(207)¥2,262¥2,639¥24,876¥(5,624)¥19,252

Segment assets¥170,136¥82,410¥114,334¥159,191¥73,643¥55,660¥655,374¥137,474¥792,848

Depreciation and amortization¥2,493¥1,165¥3,668¥18,274¥2,406¥1,141¥29,147¥608¥29,755

Investments for companies
applied equity method¥11,742¥10,881

¥—

¥—

¥—

¥496

¥23,119¥—¥23,119

Capital expenditures¥2,387¥1,971¥4,775¥13,022¥2,339¥865¥25,359¥1,466¥26,825

Total

Adjustments

Consolidated

Total sales

Other items

Thousands of U.S. dollars (Note 3)

Year ended March 31, 2013

Power andSocialIndustrial
Infrastructure Infrastructure

PowerElectronics

Electronic
Devices

Food andBeverageDistribution

OthersSales, profits or losses andassets by reporting segments
Net Sales
Sales to third parties
Inter-segment sales
and transfers
Total sales$2,100,938 $1,195,722 $1,423,737 $1,176,426 $1,190,335 $846,683 $7,933,841 $— $7,933,841
14,59634,37983,16931,997

2,078

396,828563,047

2,115,534

1,230,101

1,506,906

1,208,423

1,192,413

1,243,511

8,496,888(563,047)—(563,047) 7,933,841

Segment profits (losses)$123,735 $53,639 $27,672 $(15,073) $68,336 $30,639 $288,948 $(54,981) $233,967

Segment assets$1,644,951 $962,588 $1,256,262 $1,710,340 $685,333 $662,067 $6,921,541 $1,222,755 $8,144,296

Other items
Depreciation and amortization$27,689 $17,710 $39,101 $198,524 $27,799 $10,898 $321,721 $8,649 $330,370

Investments for companies
applied equity method$148,366 $750 $— $— $— $5,765 $154,881 $— $154,881

Capital expenditures$33,695 $29,917 $76,181 $90,592 $29,263 $8,407 $268,055 $10,073 $278,128

Notes: 1.	‌Others segment consisted of business segments not attributable to reporting segments and included electrical equipment installation work, water supply/drainage installation
work, financial services, real estate operations, insurance agency services, travel agency services, printing and information services, and etc.
2. The adjustments for segment information above were as follows:
Thousands of
U.S. dollars (Note 3)

Millions of yen

Corporate expense*
Elimination of intersegment sales
Total

2013

2012

2013

¥(5,581)¥(5,815)$(59,378)

412

191

4,397

¥(5,169)¥(5,624)$(54,981)* Corporate expense mainly consisted of administration costs of the Company

Thousands of
U.S. dollars (Note 3)

Millions of yen

Corporate assets*
Elimination of intersegment transactions
Total

2013

2012

2013

¥ 230,387¥ 289,837$  2,450,934(115,448)(152,363)(1,228,179)¥ 114,939¥ 137,474$  1,222,755* Corporate assets mainly consisted of invested cash surpluses (cash and cash equivalents), long-term invested assets (investment securities), assets relating to administration
department and assets of financing subsidiary company.
3. Segment profits (losses) were reconciled to operating income (loss) in the consolidated statements of income.

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Fuji Electric Report Financials 2013

2. Related information
Related information as of March 31, 2013 and 2012 and for the years then ended were as follows:
Geographic information(a) Sales
Thousands of
U.S. dollars(Note 3)

Millions of yen

2013

2012

¥567,314¥525,096$6,035,257

Asia (except for China), Others

95,782

97,5981,018,928

China

54,55354,807580,361

Europe14,355

14,455

152,722

America

13,777

11,578

146,573¥745,781¥703,534$7,933,841

Japan

Consolidated

2013

Note: Net sales information above is based on customer location.

(b) Tangible fixed assets
Thousands of
U.S. dollars(Note 3)

Millions of yen

2013

2012

¥121,878¥113,166$1,296,582

Asia (except for China), Others

34,74235,826

369,571

China

11,394

9,142

121,218

Europe

299

200

3,186

America

129

105

1,380

¥168,442¥158,439$1,791,937

Japan

Consolidated

2013

3. Information on impairment loss of fixed assets by each reporting segment
Information on loss on impairment of fixed assets by each reporting segment for the years ended March 31, 2013 and 2012 were as follows:
Thousands of
U.S. dollars(Note 3)

Millions of yen

2013

2013

2012

¥    0¥—Power Electronics

5

—

63

Electronic Devices

6,408

—

68,172

Industrial Infrastructure

OthersConsolidated$    10

33

—

335

¥6,446¥—$68,580

4. Information on amortization of goodwill and unamortized balance by each reporting segment
Information on amortization of goodwill and unamortized balance by each reporting segment has not been disclosed because it does nothave significant impact on the consolidated financial statements.

5. Information on gain on negative goodwill by each reporting segment
NoneFuji Electric Report Financials 2013

Note 23. Information on Transactions with Related Parties
Note to a significant affiliate
Summarized financial information of a significant affiliate
METAWATER Co., Ltd. was a significant affiliate for the years ended March 31, 2013 and 2012, and its summarized financial information
were as follows:
Thousands of
U.S. dollars(Note 3)

Millions of yen

METAWATER Co., Ltd.

2013

2012

Total Current Assets¥69,454¥64,583$  738,879

2013

Total Fixed Assets

10,667

9,351

113,482

Total Current Liabilities

43,89240,477466,936

Total Long-term Liabilities

1,957

2,025

20,829Total Net Assets

34,272

31,432364,596

Net Sales

96,733

92,7781,029,085

Income Before Income Taxes and Minority Interests

7,696

7,472

81,879Net Income

4,737

4,256

50,401

Note 24. Business Combinations
For the year ended March 31, 2013

I. Transactions under common control
1. Summary of transactions(1) Name and business lines of absorbed company
Name: Fuji Electric T&D Succession Co., Ltd. (“T&D Succession”)
Business lines: Preparation and other relevant activities relating to the acquisition of certain businesses from Japan AE Power Systems
Corporation (“AE Power”) by the Company in accordance with the final agreement on the dissolution of their joint venture in the power transmission and distribution (“T&D”) field by the Company, Hitachi, Ltd. (“Hitachi”) and Meidensha Corporation (“Meiden”).
(2) Date of business combination
April 1, 2012
(3) Legal form of business combination
This was an absorption merger, whereby Fuji Electric Co., Ltd. was the surviving company and T&D Succession was the dissolving company.
(4) Name of company after business combination
Fuji Electric Co., Ltd.
(5) Other information
AE Power, the joint venture by joint contribution of the Company, Hitachi and Meiden was established on July 1, 2001 by the consolidationof the three companies’ T&D businesses and has been developing its business globally. In recent years, the market for these T&D systems
has seen growing demand, particularly from emerging markets. Going forward, higher growth rate is expected by the progress of the smart
energy in social infrastructure and the industrial field, such as the use of the renewable energy resources and the smart grid.
Under such circumstance, the parties had the discussions on the AE Power growth strategy taking into account various factors and theycame to reach a same conclusion that there was a need to fundamentally review its growth strategy. The parties recently reached a basic
framework agreement that the parties would dissolve AE Power for a better organization and they would rebuild and explore the growth of
T&D business in each company level.
On December 26, 2011, the parties reached a final agreement and determined the merger method that T&D Succession, a wholly
owned subsidiary of the Company, would succeed the part of AE Power’s business, then, on the same day, the Company would merge
T&D Succession.

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34

Page

35

Fuji Electric Report Financials 2013

2. Accounting method
This merger was treated as a transaction under common control based on “Accounting Standard for Business Combinations” (ASBJ Statement No. 21 issued on December 26, 2008) and “Guidance on Accounting Standard for Business Combinations and Accounting Standard
for Business Divestitures” (ASBJ Guidance No. 10 issued on December 26, 2008).

II. Transactions under common control
1. Summary of transactions(1) Name and business lines of absorbed company
Name: Fuji Electric Retail Systems Co., Ltd. (“FRS”)
Business lines: Development, manufacturing, sales and services of vending machines.
(2) Date of business combination
October 1, 2012
(3) Legal form of business combination
This was an absorption merger, whereby Fuji Electric Co., Ltd. was the surviving company and FRS was the dissolving company.
(4) Name of company after business combination
Fuji Electric Co., Ltd.
(5) Other information
The merger was decided with the goal of strengthening systems for expanding energy-related businesses. This would be accomplished by
combining the Company’s power electronics and other energy-saving equipment with FRS’s cooling and heating technologies as well asother basic technologies.

2. Accounting method
This merger was treated as a transaction under common control based on “Accounting Standard for Business Combinations” (ASBJ Statement No. 21 issued on December 26, 2008) and “Guidance on Accounting Standard for Business Combinations and Accounting Standard
for Business Divestitures” (ASBJ Guidance No. 10 issued on December 26, 2008).

Note 25. Asset Retirement Obligations
Asset retirement obligations recorded on the consolidated balance sheets
1. Outline of asset retirement obligations
The Companies record asset retirement obligations related to the expenses to remove asbestos from company-owned buildings upon theirdismantlement and the obligations to restore head offices, sales offices and other premises to their original condition upon termination of
their lease contracts.
Regarding some of the obligations to restore head offices, sales offices and other premises to their original condition, the Companies
estimate nonrecoverable amounts of deposits for those premises and record the portion attributable to the current year as expenses,
instead of recording asset retirement obligations.

2. Calculation method of asset retirement obligations
In calculating the amounts of asset retirement obligations, the Companies estimate a period of use between 7 and 49 years and use a discount rate equivalent to the interest rate of government bonds corresponding to the use period (0.4% to 2.3%).

3. Changes in the total amounts of asset retirement obligations
Changes in the total amounts of asset retirement obligations for the years ended March 31, 2013 and 2012 were as follows:
Thousands of
U.S. dollars(Note 3)

Millions of yen

2013

2013

2012

¥2,293¥2,315$24,398

Increase due to change in scope of consolidation

19

—

211

Increase due to acquisition of property, plant and equipment

68

13

733

Adjustment due to passage of time

8

7

94

(18)

(42)

(213)

¥2,370¥2,293$25,223

Balance at beginning of year

Decrease due to fulfillment of obligations
Balance at end of year

Note 26. Subsequent Events
For the year ended March 31, 2013
None

Fuji Electric Report Financials 2013

Independent Auditor’s Report
Ernst & Young ShinNihon LLC
Hibiya Kokusai Bldg.
2-2-3 Uchisaiwai-cho
Chiyoda-ku, Tokyo, Japan 100-0011
Tel: +81 3 3503 1100
Fax: +81 3 3503 1197
The Board of Directors
Fuji Electric Co., Ltd.
We have audited the accompanying consolidated financial statements of Fuji Electric Co., Ltd. and its consolidated subsidiaries,
which comprise the consolidated balance sheet as at March 31, 2013, and the consolidated statements of income, comprehensive
income, changes in net assets, and cash flows for the year then ended and a summary of significant accounting policies and otherexplanatory information, all expressed in Japanese yen.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordancewith accounting principles generally accepted in Japan, and for designing and operating such internal control as management
determines is necessary to enable the preparation and fair presentation of the consolidated financial statements that are freefrom material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit
in accordance with auditing standards generally accepted in Japan. Those standards require that we plan and perform the audit toobtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial
statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material
misstatement of the consolidated financial statements, whether due to fraud or error. The purpose of an audit of the consolidated
financial statements is not to express an opinion on the effectiveness of the entity’s internal control, but in making these risk
assessments the auditor considers internal controls relevant to the entity’s preparation and fair presentation of the consolidated
financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made bymanagement, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
OpinionIn our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated
financial position of Fuji Electric Co., Ltd. and its consolidated subsidiaries as at March 31, 2013, and their consolidated financial
performance and cash flows for the year then ended in conformity with accounting principles generally accepted in Japan.
Convenience Translation
We have reviewed the translation of these consolidated financial statements into U.S. dollars, presented for the convenience ofreaders, and, in our opinion, the accompanying consolidated financial statements have been properly translated on the basis
described in Note 3.

June 25, 2013
Tokyo, Japan

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36

Gate City Ohsaki, East Tower,
11-2, Osaki 1-chome, Shinagawa-ku, Tokyo 141-0032, Japan
Contacts: Public and Investor Relations Dept.
TEL: +81-3-5435-7111 http://www.fujielectric.com/

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