Fuji Electric Report Finacials

Consolidated Financial Highlights
Millions of yen

Thousands of
U.S. dollars*1

Years ended March 31

2011

2012

2013

2014

2015

2015

Operating Results
Net sales
Japan
Overseas
Operating income
Net income¥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¥759,911
582,223
177,688
33,136
19,582¥810,678
605,763
204,915
39,31627,978$6,755,657
5,048,026
1,707,631
327,641
233,151

R&D and Capital Investment
R&D expenditures
Plant and equipment investment*2
Depreciation and amortization*3¥ 32,568
27,22327,945¥ 32,247
24,98929,755¥ 31,160
31,771
31,054¥ 32,029
26,91630,849¥ 35,023
29,041
33,615$  291,865
242,014280,132

Cash Flows
Cash flows from operating activities
Cash flows from investing activities
Free cash flow
Cash flows from financing activities¥ 53,853
84,241138,094(93,468)¥ 28,314(13,489)
14,825(32,593)¥ 55,342(24,286)
31,055(56,827)¥ 53,651(9,649)44,002(50,570)¥ 51,459(22,750)
28,709(33,827)$  428,828(189,587)
239,241(281,906)

Financial Position
Total assets
Total net assets
Interest-bearing debt

¥805,797
174,935
274,019¥792,848
183,217
255,865¥765,563
215,672
226,717¥810,774
251,225
199,504¥904,522
319,636
191,225$7,537,686
2,663,636
1,593,546

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

4.4
9.3
2.5
28.0
0.7
0.9

4.8
10.8
3.3
32.1
0.5
0.7

—
—
—
—
—
—

Yen

U.S. dollars*1¥ 39.16406.39
9.00

$0.33
3.39
0.08

Financial Indicators
Ratio of operating income to net sales (%)
ROE (Return on equity) (%)
ROA (Return on assets) (%)
Equity ratio (%)
Net debt-equity ratio (times)*4
Debt-equity ratio (times)*5
Per Share Data
Net income
Net assets
Cash dividends¥ 21.14217.404.00¥ 16.52228.91
4.00¥ 36.90272.295.00¥ 27.41317.96
7.00

OthersEmployees
Japan
Overseas

24,56218,002
6,560

24,973
17,933
7,040

24,956
18,271
6,685

25,52418,022
7,502

Headcount

25,74017,814
7,926*1 The U.S. dollar amounts represent the arithmetic results of translating yen into dollars at ¥120 = U.S. $1, the approximate exchange rate at March 31, 2015.
*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 ��������������������������������������������������38

01 Fuji Electric Report 2015———

Management’s Discussion and Analysis
Overview

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

In fiscal 2014, the year ended March 31, 2015, the operating

Cost of sales increased 5.1% year on year, to ¥609,376 million.

environment for Fuji Electric saw a modest recovery trend in the

The cost of sales to net sales ratio decreased 1.1 percentage

domestic economy. While there was a fallback from the demand

points to 75.2%.

rush that preceded the April 2014 consumption tax hike, thisSelling, general and administrative expenses increased

was offset by positive factors including the recovery of corpo-

10.3% year on year, to ¥161,986 million. Selling, general andrate performance. Overseas, activity was weak in certain mar-administrative expenses as a percentage of net sales increased

kets, but the overall trend was that of gradual improvement

0.7 percentage points to 20.0%.
Operating income improved ¥6,180 million year on year, tosupported by the recovery of the United States and other major¥39,316 million. This was due to higher net sales and the effects

developed nations.

of structural improvements, such as cost reduction measures.

In response to these conditions, Fuji Electric concentrated
on advancing the management policies of expanding energyrelated businesses and globalizing operations. At the same

Non-Operating Income (Expenses) and Ordinary Income

time, we positioned the fiscal year under review as a year for

Non-operating income (net) was ¥3,823 million, an increase ofaggressive management expansion, in a step forward from

¥228 million compared to the non-operating income (net) of

the previous fiscal year, which was designated as the first¥3,595 million in the previous fiscal year. The increase wasyear for aggressive management. As such, we worked tomainly due to a ¥1,055 million increase in interest and dividend

boost profitability focused on businesses in the Industrial

income and a ¥1,894 million increase in foreign exchanges

Infrastructure and Power Electronics segments while

gains from the previous fiscal year, which were partially offset bystrengthening overseas operations.

a ¥1,317 million decrease in equity in earnings of affiliates.
As a result, ordinary income was ¥43,139 million, an
improvement of ¥6,408 million from the previous fiscal year.

Financial Performance

Extraordinary Income (Loss), Income Before Income

Net Sales

Taxes and Minority Interests

In fiscal 2014, net sales increased 6.7% year on year, toExtraordinary income was ¥7,703 million due to recording gain

¥810,678 million. Domestic net sales were up 4.0% year on

on sales of noncurrent assets, gain on sales of investment

year, to ¥605,763 million. Meanwhile, overseas net sales weresecurities, and gain on change in equity. Extraordinary income

up 15.3% year on year, to ¥204,915 million.

increased ¥6,790 million year on year, mainly due to recordingof gain on change in equity.

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

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

1,000.040(Billions of yen)

Net Income /Ratio of Net Income to Net Sales
(%)

4.8

50.0

5

(Billions of yen)

(%)

40.0

4

4.4

810.7
750.0

689.1 703.5
25.9

25.4

745.8 759.9

39.3

40.0
30

23.9

23.4

25.3

500.0

4

2.7

20

26.4

2.9

1.7

19.6

20.0

19.3

15.1

2

3

2.6

2.2

3

22.0
20.0

28.0

30.0

33.1
30.0

3.5

3.5

2

1.7
11.8

250.0

11.9

10

10.0

0

11/3

12/3

13/3

14/3

15/3

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

0

0

1

1

10.0

11/3

12/3

13/3

14/3

15/3

■ Operating Income (left)
Ratio of Operating Income to Net Sales (right)

0

0

11/3

12/3

13/3

14/3

15/3

0

■ Net Income (left)
Ratio of Net Income to Net Sales (right)

Fuji Electric Report 201502

Extraordinary loss was ¥5,123 million, reflecting loss on

the rise in activities targeting small- to medium-scale orders.

disposal of noncurrent assets, loss on devaluation of invest-

Overall, the segment saw improved operating results due toment securities, impairment loss, settlement packages andhigher net sales.

other items. Extraordinary loss increased ¥1,216 million year on
year, mainly due to an increase in impairment loss from theIndustrial Infrastructure

previous fiscal year.

Net sales increased 4% year on year, to ¥198,035 million, andAs a result, income before income taxes and minority inter-

operating income improved ¥1,799 million year on year, toests increased ¥11,982 million year on year to ¥45,719 million.

¥11,423 million.

Net Income

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

Net income was ¥27,978 million, after deducting ¥14,919 mil-

¥125,800 million.

In fiscal 2014, orders received (Industrial Infrastructure seg-lion for income taxes and ¥2,822 million for minority interests

In the transmission and distribution business, sales were up

from income before income taxes and minority interests. The

year on year, reflecting a rise in large-scale orders in Japan. In

net income result increased by ¥8,396 million year on year.

the industrial plant business, sales increased following strong
domestic replacement demand. In the industrial and instrumentation equipment business, sales were relatively unchanged year

Results by Business Segment

on year. In the equipment construction business, sales increased

Power and Social Infrastructureand solar power generation system construction. The segment’s

Net sales increased 15% year on year to ¥175,213 million, andoverall operating results improved year on year due to the higher

operating income improved ¥607 million year on year to ¥8,266

net sales and the benefits of cost reduction efforts.

due to a rise in orders for air-conditioning facility construction

million.
In fiscal 2014, orders received (Power and Social Infrastructure

Power Electronics

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

Net sales increased 5% year on year, to ¥184,110 million, and¥214,000 million.

operating income improved ¥1,491 million year on year, toIn the power plant business, sales were up year on year due¥6,822 million.
In fiscal 2014, orders received (sum of Power Electronics

to a rise in orders for solar power generation systems, which
offset the decline in large-scale orders for hydropower genera-segment of Fuji Electric Co., Ltd. and Fuji Electric FAtion facilities. In the social engineering systems business, sales

Components & Systems Co., Ltd., non-consolidated-basis)

were up due to higher sales centered on power systems andwere ¥149,200 million.

other items in the power grid field as well as smart meters. In

In the drive business, sales and operating results improved

the social information business, sales increased as a result ofyear on year following a rise in demand for mainstay inverters andCash Dividends per Share /Net Income per Share
(Yen)

39.16

40.0

36.90

Net Sales by Segment*

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

1,000.0

50.0

759.9

21.14

Devices

198.0

152.3

175.2

■ Power andSocialInfrastructure–59.7–64.1 ■ Elimination

189.5
200.0

9.00
7.00
4.00

0

11/3

4.00

5.00

12/3

13/3

■ Cash Dividends per Share■ Net Income per Share

03 Fuji Electric Report 2015

0

14/3

15/3

–200.0

14/3

andCorporate

15/3■ Food andBeverageDistribution

8.1■ Electronic
Devices

6.8■ Power
Electronics

11.4■ Industrial
Infrastructure

7.7

8.3

■ Power andSocialInfrastructure

–5.9

–5.7

6.5
5.3

20.0
■ Industrial
Infrastructure■ Others

1.9
8.5

1.9
8.0

30.0

Electronics

400.0

10.0

33.1

184.1 ■ Power

174.7
16.52

40.0

39.3

BeverageDistribution

137.2 ■ Electronic

123.0

600.0

■ Others

119.1 ■ Food and

120.1

27.41

20.0

61.2

60.0

800.0
30.0

810.7

9.6
10.0

0

–10.0

14/3

15/3

* Based on figures reflecting the change in subsegments that took effect from April 1, 2014

■ Elimination
andCorporateservos. In the power supply business, sales and operating results

In fiscal 2014, orders received (Food and Beverage

were up year on year as a result of increased overseas demandDistribution segment of Fuji Electric Co., Ltd., non-consolidated

for power supply equipment coupled with the robust demand forbasis) were ¥110,800 million.

power conditioning sub-systems for mega solar facilities inIn the vending machines business, sales decreased year on

Japan. In the ED&C components business, sales and operating

year as sales increases in overseas markets focusing on China

results improved year on year due to strong demand for machine

were offset by the impacts of detracting factors in the domestic

tools and solar power generation-related equipment.

market, namely the unseasonable weather, the decrease invending machine demand following the consumption tax hike,Electronic Devices

and the fact that demand for convenience store coffee

Net sales increased 11% year on year, to ¥137,189 million, andmachines returned to normal levels. In the store distribution

operating income improved ¥1,599 million year on year, tobusiness, sales were down year on year as customer demand¥8,071 million.

for automatic change dispensers declined, counteracting the

In fiscal 2014, orders received (sum of Electronic Devices

benefits of higher sales of freezing and refrigerating facilities forsegment of Fuji Electric Co., Ltd. and Fuji Electric (Malaysia)

convenience stores, refrigeration facilities for the distribution

Sdn. Bhd., non-consolidated-basis) were ¥107,500 million.

sector, and equipment and systems for plant factories. Despite

In the semiconductors business, sales were up year on year

the decrease in net sales, the segment’s overall operating

due to strong demand for inverters, servos, and other industrial

results improved year on year due to the benefits of cost reduc-machinery in the industrial business and recovered demand fortion efforts.

products for telecommunications equipment in the power
supply application business. These factors outweighed a

Othersdecrease in demand in the automotive electronics businessNet sales increased 2% year on year, to ¥61,208 million, andfollowing the consumption tax hike in Japan. Operating results

operating income was ¥1,884 million, relatively unchanged from

improved due to higher sales and the benefits of cost reduction

the previous fiscal year.

efforts. In the magnetic disks business, sales increased, but
operating results were unchanged year on year due to the negspecific models.

R&D Investment and Plant andEquipment Investment

Food and Beverage Distribution

R&D Expenditures

Net sales decreased 1% year on year, to ¥119,113 million,

Fuji Electric’s R&D is focused on developing products that leadand operating income improved ¥480 million year on year, toto a responsible and sustainable society through the pursuit of¥8,527 million.

cutting-edge energy technologies. The Company has also

ative impacts of changes in prices and the ratios of sales for

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

(%)

40.0

8

Plant and Equipment Investment /Depreciation and Amortization

Total Net Assets / ROE(Billions of yen)(Billions of yen)

40.0

400.0

35.0
32.6

32.2

31.2

6

4.7

4.6
4.2

4.2

40

33.6

32.0

30.0

(%)

30.0

31.8
31.1 30.8
29.8
29.0

27.2 27.9
25.0

26.9

319.6
30

300.0

251.2

4.3

20.0

215.7
4

20.0

200.0

174.9

183.2

20

14.7

10.8
10.0

0

2

11/3

12/3

13/3

14/3

15/3

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

0

100.0

10.0

0

11/3

12/3

13/3

14/3

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

15/3

0

9.0

11/3

10

9.3
7.4

12/3

13/3

14/3

15/3

0

■ Total Net Assets (left)
ROE (right)

Fuji Electric Report 201504

been realizing companywide synergies and advancing theline at our Suzuka Factory for mass production of a new model

globalization of its R&D functions, as well as stepping up open

of inverter. In the ED&C components business, we established ainnovation initiatives with universities, research institutes, andnew development center to bolster our development capabili-

other companies.

ties, and made additional investments in evaluation facilities.

For fiscal 2014, Fuji Electric’s total R&D expenditures

In the Electronic Devices segment, we commenced con-amounted to ¥35,023 million.

struction of a development center at the Matsumoto Factory to

The number of industrial property rights held by Fuji Electricin Japan and overseas was 10,838 as of March 31, 2015.

accelerate development of new power semiconductor technologies and products, as well as new production technologies.
Furthermore, we invested in development facilities for next-

Capital Expenditure

generation IGBTs, and made investments in our assembly pro-

In fiscal 2014, the Company’s capital expenditure, including

cesses to bolster production of pressure sensors as well as toleases, totaled ¥29,000 million. We bolstered investment in the

expand the variety of industrial IGBTs produced.

Power Electronics and Industrial Infrastructure segments tostrengthen their bases in Asia.
We also conducted intensive capital expenditure for mass
production and development of new products, aiming to

Financial Position
Total Assets

expand sales.
Key investments were as follows.

Total assets as of March 31, 2015 stood at ¥904,522 million, an

We commenced construction work on a core R&D center atincrease of ¥93,748 million from the previous fiscal year-end.

our Tokyo Factory in order to bolster development of electrical
Current Assets and Current Liabilities

and thermal energy solutions.
In the Power and Social Infrastructure segment, we invested

Total current assets amounted to ¥462,969 million as of Marchin the construction of new assembly lines and test lines for

31, 2015, up ¥33,631 million from the previous fiscal year-end.

mass production of smart meters.

This was mainly due to increases from the previous fiscal year-

In the Industrial Infrastructure segment, we invested in highpower testing facilities at our Chiba Factory to accelerate

end of ¥15,150 million in trade receivables and ¥16,171 million
in inventories.

development of electrical switchgears. Moreover, at Fuji Electric
Manufacturing (Thailand) Co., Ltd. (FMT) we invested in pro-

Total current liabilities stood at ¥404,748 million, up ¥45,291
million from the previous fiscal year-end.

duction facilities for electrical switchgear.

This was due to increases from the previous fiscal year-end

In the Power Electronics segment, we invested in testingof ¥19,000 million in commercial paper and ¥15,000 million in

facilities at FMT for equipment such as uninterruptible power

current portion of bonds.

systems. In addition, we invested in an automated assembly

Total Assets / ROA(Billions of yen)

(%)

1,000.05Equity Ratio

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

40.0

300.0

904.5
805.8 792.8
800.0

4

3.4

600.0

3
20.0

1.8

226.7
199.5

25.4

2.5
400.0

255.9

28.0

30.0

3.3

3

274.0

32.1

810.8
765.6

(Times)

19.3

200.0

1.8

2

1.6

20.6

1.2

2

0.9

100.0

1.5

0.7

10.0

1

1

200.0

0

191.2

11/3

12/3

■ Total Assets (left)
ROA (right)

05 Fuji Electric Report 2015

13/3

14/3

15/3

0

0

11/3

12/3

13/3

14/3

15/3

0

11/3

12/3

13/3

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

14/3

15/3

0

Cash Flows

Noncurrent Assets
Net property, plant and equipment stood at ¥174,953 million,
an increase of ¥2,334 million from the previous fiscal year-end.

In fiscal 2014, consolidated free cash flow (cash flows from

Further, total investments and other assets amounted tooperating activities + cash flows from (used in) investing activi-¥266,600 million, up ¥57,783 million from the previous fiscalties) was a positive ¥28,709 million, a deterioration of ¥15,293

year-end. This was attributable to an increase of ¥46,525 million

million compared with ¥44,002 million in the previous fiscal year.

in investment securities, owing to factors such as the rise in thevalue of available-for-sale securities following differences in

Cash Flows from Operating Activities

mark-to-market valuation.

Net cash provided by operating activities was ¥51,459 million,
compared with ¥53,651 million for the previous fiscal year. This

Long-term Liabilities

was due to the recording of income before income taxes and an

Total long-term liabilities were ¥180,138 million, a decrease ofincrease in advances received, which outweighed increases in¥19,954 million from the previous fiscal year-end. This reflected

inventories and trade receivables.

decreases from the previous fiscal year-end of ¥15,000 inThis was a deterioration of ¥2,192 million year on year.

bonds payable, and ¥18,963 in long-term loans payable, while
deferred tax liabilities increased by ¥14,665 million.

Cash Flows from (Used in) Investing Activities
Net cash used in investing activities was ¥22,750 million, com-

Net Assets

pared with ¥9,649 million in the previous fiscal year. This was

Total net assets as of March 31, 2015, were ¥319,636 million,

primarily related to purchase of property, plant and equipmentup ¥68,411 million from the previous fiscal year-end. This riseand purchase of investment securities.

was mainly due to the increases in valuation difference on­available-for-sale securities of ¥24,760 million and remeasure-Year on year, this was an increase in cash used of ¥13,101
million.

ments of defined benefit plans of ¥24,279 million from the­previous fiscal year-end. As a result, the equity ratio was 32.1%,

Cash Flows from (Used in) Financing Activities

an increase of 4.1 percentage points from the previous fiscal

Net cash used in financing activities was ¥33,827 million,

year-end.

compared with ¥50,570 million in the previous fiscal year. Thiswas principally due to repayment of long-term loans payable.

Debt

As a result, consolidated cash and cash equivalents at fiscal

Interest-bearing debt as of March 31, 2015, was ¥191,225

year-end amounted to ¥31,895 million, down ¥1,517 million, or

million, down ¥8,279 million from the previous fiscal year-end.

4.5%, from the previous fiscal year-end.

The ratio of interest-bearing debt to total assets was 21.1%, adecrease of 3.5 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

138.1

75.0

55.3

53.9

53.7

51.5

120.0

50.0

28.3
25.0

90.0

81.8

0

–25.0

–32.6

–50.0

64.3

–9.6

–13.5

–22.8
–33.8

–24.3

–56.8

60.0

39.7
31.1

–50.6

44.0
33.4

28.7

30.0

31.9

14.8

–75.0

–93.5
–100.0

11/3

12/3

13/3

14/3

15/3

(FY)

■ Cash Flows from Operating Activities■ Cash Flows from (Used in) Investing Activities■ Cash Flows from (Used in) Financing Activities

0

11/3

12/3

13/3

14/3

15/3

■ Free Cash Flow
■ Cash and Cash Equivalents

Fuji Electric Report 201506

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

Fuji Electric takes appropriate measures to minimize the impact

designed to ensure the highest level of quality for all of the prod-of business risks and other risks by managing them in a sys-

ucts that it manufactures and sells. Although the Company has

tematic and methodical manner. Currently, the main risks thattaken precautions in the form of product liability insurance tocould have a negative effect on the operating results and finan-

provide compensation for product liability claims, in the event

cial position of Fuji Electric are as follows. These are the factorsthat major defects are found in any Fuji Electric products due tothat the Company judged to have a potential future effect as of

unforeseen factors, there could be a negative effect on the

March 31, 2015.

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 the rapid

modity swap transactions and other measures, significant

shifts in product demand and intensifying competition, increase

increases in these prices could have a negative effect on thethe possibility that the Company might not be able to recoup its

Company’s operating results.

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

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

investment affect the Company significantly. In order to mini-that matches the needs of the market. However, there is amize the effect on operating results of overseas and domes-

possibility that competing companies will gain an advantage

tic market trends, the Company is implementing overall costthrough faster development, or that the Company will be unable

and expense reductions. However, a deterioration of theto bring products to market in a timely manner should develop-

business climate or a change of economic policy in China, ament not progress according to plan. Such events could 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 have a negative effect(5) Risks Related to Overseas Business Activities

on the Company’s 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 contracts

Company is exposed to the following risks, which could have ato minimize the risk of exchange rate fluctuations on its

negative effect on its operating results and financial position:

operating results. However, the forward-exchange contract- Unforeseen changes in laws and regulations as well as tax

policy is not capable of entirely mitigating exchange rate risk.

systems that could have a detrimental effect on the Company

Consequently, fluctuations in yen exchange rates, primarily- Disadvantages arising from political conditions

against the U.S. dollar, could have a negative effect on the- Social turmoil related to social unrest, terrorist incidents, war,

Company’s operating results and financial position.

and other events(d) Fuji Electric’s interest-bearing debt totaled ¥191,225 million
as of March 31, 2015. A higher-than-anticipated increase in(6) Risks Related to Intellectual Property

interest rates could lead to a significant additional interest

Fuji Electric effectively manages its intellectual property rights

payment burden, which could have a negative effect on theand develops new products and technologies in a manner that

Company’s operating results.

does not infringe on third-party patent rights. However, since(e) Trends in the financial markets or deterioration in Fuji

the pace of technological innovation is accelerating and theElectric’s financial indicators could impact on Fuji Electric’s

Company’s operations are becoming more global, the possibility

fund procurement or interest payments, for example byof disputes over intellectual property rights is increasing. A

prompting early repayment due to infringement on financial

dispute of this nature could have a negative effect on thecovenants relating to certain loans. Such an event could

Company’s operating results and financial position.

have a negative effect on the Company’s operating results
and financial position.

07 Fuji Electric Report 2015

(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. The Company

tive of enhancing competitiveness in each of its fields of busi-

records retirement benefit costs and liabilities calculated on

ness. Cooperative relations are essential to the success ofassumptions accepted as reasonable for actuarial calculations.

such collaborations. However, differences in business systems,

Fuji Electric and certain domestic consolidated subsidiaries

corporate cultures, or other aspects could impede the smooth

have also entrusted listed marketable securities to employee

integration of business strategies, technologies, products,

retirement benefit trusts. Consequently, when differences occur

personnel, or other elements necessary for a successful col-between the expected and actual values of the discount ratelaboration. Such circumstances could have a negative effect on

and the expected rate of return on pension assets, and when

the Company’s operating results.

changes occur in the stock prices that are used as the basis ofcomputing pension benefit obligations, differences between(8) Risks Related to Human Resources

these expectations and actual performance, changes in the

The business activities of Fuji Electric depend heavily on its

prices of entrusted listed marketable securities, and other items

human resources. Retaining and training superior personnel in

could have a negative effect on the Company’s operating results

such fields as technology, production, sales, and administration isand financial position.

essential to the growth of the Company. Should the Company beunable to retain and/or train such necessary human resources,(13) Risks Related to Compliance

there could be a negative effect on its operating results.

Fuji Electric conducts business in a variety of fields and regions
throughout the world, and as such is subject to the laws and(9) Risks Related to the Leakage of Personal Information

regulations of numerous countries. The Company has put inAs a part of its business activities, Fuji Electric handles personal

place an appropriate internal control system to ensure compli-

information about numerous individuals, including customers,

ance, but the possibility of legal violations cannot be dis-

suppliers, and employees. Fuji Electric has formulated andcounted entirely. Should such a violation occur, this could havestrictly enforces thorough internal regulations regarding thea negative effect on the Company’s social credibility and/or

gathering, use, and management of personal information.

operating results.

However, the Company cannot entirely rule out the possibility
that such information could be leaked due to unforeseen circumstances. Any leak of this kind could damage trust in Fuji

(14) Risks Related to Lawsuits andOther Legal Proceedings

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

Fuji Electric, in the course of its business, could become theoperating results.

subject of a lawsuit or other legal proceeding, and could as aresult unexpectedly become liable for the payment of large(10) Risks Related to Major Natural Disasters

amounts of compensation. Depending on the content of such a

Fuji Electric has a network of bases throughout the world. In thedecision, this could have a negative effect on the Company’s

event of a major natural disaster, production facilities could be

operating results.

damaged, operations at manufacturing facilities could be halted,
shipments of products could be delayed, and other related
problems could occur. These events could have a negative
effect on the Company’s operating results and financial position.
(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 its operating results.

Fuji Electric Report 201508

Consolidated Balance Sheets
As of March 31, 2015 and 2014
Thousands of
U.S. dollars(Note 3)

Millions of yen

2015

2014

2015

¥   31,895
59
237,631(777)
137,614
17,24639,301
462,969¥   33,412
613
222,481(532)
121,443
17,55434,367429,338$   265,792
493
1,980,263(6,482)
1,146,785
143,721327,504
3,858,076

Less accumulated depreciation
Net Property, Plant and Equipment

35,080225,183
204,12165,838
7,603
537,825(362,872)
174,953

35,199218,327
186,283
59,651
4,551
504,011(331,392)
172,619292,339
1,876,528
1,701,012
548,653
63,346
4,481,878(3,023,930)
1,457,948

Investments and Other Assets:
Investment securities (Notes 5, 6 and 7):
Unconsolidated subsidiaries and affiliates
Other
Long-term loans receivable
Net defined benefit asset (Note 11)
Deferred tax assets (Note 17)
Other investments and other assets
Allowance for doubtful accounts
Total Investments and Other Assets
Total Assets

31,274
164,118
1,407
44,103
2,518
24,355(1,175)
266,600¥ 904,522

13,750135,117
1,893
31,263
4,519
23,019(744)
208,817¥ 810,774

260,6211,367,656
11,729367,526
20,985
202,941(9,796)2,221,662$ 7,537,686

AssetsCurrent Assets:
Cash and cash equivalents (Note 6)
Short-term investments (Notes 5, 6 and 7)
Trade receivables (Note 6)
Allowance for doubtful accounts
Inventories (Note 4)
Deferred tax assets (Note 17)
Other current assets
Total Current Assets

Property, Plant and Equipment (Note 5):Land
Buildings and structures
Machinery and equipment
Lease assets (Note 20)
Construction in progress

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

09 Fuji Electric Report 2015

Thousands of
U.S. dollars(Note 3)

Millions of yen

Liabilities and Net Assets
Current Liabilities:
Short-term debt (Notes 5, 6 and 9)
Current portion of long-term debt (Notes 5, 6 and 9)
Trade payables (Notes 5 and 6)
Lease obligations (Notes 6 and 10)
Advances received
Income taxes payable (Note 17)
Other current liabilities (Note 24)
Total Current Liabilities
Long-term Liabilities:
Long-term debt (Notes 5, 6 and 9)
Lease obligations (Notes 6 and 10)
Net defined benefit liability (Note 11)
Provision for directors’ retirement benefits
Deferred tax liabilities (Note 17)
Other long-term liabilities (Note 24)
Total Long-term Liabilities
Total Liabilities

2015

2014

2015

¥ 67,080
35,015
150,648
12,98838,303
5,905
94,809404,748¥ 52,713
23,698142,087
13,52133,933
4,543
88,962359,457$  559,005
291,793
1,255,408
108,237
319,193
49,209790,061
3,372,906

89,12922,26032,518236
32,576
3,419
180,138
584,886

123,092
20,72634,236215
17,911
3,912
200,092
559,549

742,748
185,502
270,984
1,969
271,475
28,466
1,501,144
4,874,050

47,586—
46,735109,543—
47,586
46,734
102,631396,551—
389,464
912,861(7,184)—
196,680—(7,148)
189,803(59,873)—
1,639,003

69,528(513)
10,98013,66593,66029,296319,636¥904,522

44,76820
3,205(10,614)37,37924,043
251,225¥810,774

579,408(4,280)91,491
113,877
780,496244,137
2,663,636$7,537,686

Contingent Liabilities (Note 19):
Net Assets (Note 25)
Shareholders’ Equity:
Capital stock (Note 12):
Authorized—1,600,000,000 shares
Issued—746,484,957 shares as of March 31, 2015
		746,484,957 shares as of March 31, 2014
Capital surplus
Retained earnings
Treasury stock at cost (Note 12):		
32,057,107 shares as of March 31, 2015
		
31,985,886 shares as of March 31, 2014
Total Shareholders’ Equity
Accumulated Other Comprehensive Income (Loss):
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges (Notes 6 and 8)
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total Accumulated Other Comprehensive Income
Minority Interests in Consolidated Subsidiaries
Total Net Assets
Total Liabilities and Net Assets

Fuji Electric Report 201510

Consolidated Statements of Income
Years ended March 31, 2015 and 2014
Thousands of
U.S. dollars(Note 3)

Millions of yen

2015

2014

2015

Net Sales
Cost of Sales (Note 13)
Gross Profit¥810,678
609,376
201,302¥759,911
579,856
180,055$6,755,657
5,078,140
1,677,517

Selling, General and Administrative Expenses (Notes 13 and 14)
Operating Income

161,986
39,316

146,919
33,136

1,349,876
327,6412,526(2,551)
3,666
1,031
(849)
3,823
43,1391,471(2,855)
1,772
2,348
859
3,595
36,73121,051(21,262)
30,555
8,594(7,087)31,851
359,492

Extraordinary Income (Loss), Net (Notes 15 and 16)
Income Before Income Taxes and Minority Interests

2,580
45,719(2,994)33,73721,501
380,993

Income Taxes (Note 17)
Income Before Minority Interests

14,91930,80011,98321,754

124,319
256,674

2,822¥ 27,9782,172¥ 19,582

23,523$  233,151

Non-Operating Income (Expenses):
Interest and dividend income
Interest expense
Foreign exchange gains
Equity in earnings of affiliates
Other, net
Ordinary Income

Minority Interests in Net Income of Consolidated Subsidiaries
Net Income (Note 25)
The accompanying Notes to the Consolidated Financial Statements are an integral part of these statements.

11 Fuji Electric Report 2015

Consolidated Statements of Comprehensive Income
Years ended March 31, 2015 and 2014
Thousands of
U.S. dollars(Note 3)

Millions of yen

Income Before Minority Interests

2015

2014

2015

¥30,800¥21,754$256,674

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

24,731(531)
8,785
24,141

24,46897
4,351—

206,097(4,427)73,214
201,176519
57,645¥88,44530
28,946¥50,700

4,310
480,370$737,044

Comprehensive Income Attributable to:Shareholders of the Company
Minority interests¥84,260
4,185¥47,826
2,874$702,175
34,869The accompanying Notes to the Consolidated Financial Statements are an integral part of these statements.

Fuji Electric Report 201512

Consolidated Statements of Changes in Net Assets
Years ended March 31, 2015 and 2014
Thousands

Millions of yen
Foreign
RemeasureValuationdifference on Deferred gains currency
ments ofavailable-for- or losses on translation
definedhedgessale securities
adjustments benefit plans

Number ofshares ofcapital stock

Capitalstock

CapitalsurplusRetainedearnings

746,484¥47,586¥46,734¥ 87,620¥20,383¥   (83)———

19,582——

Balance at March 31, 2013
Net income for the year¥   (553) ¥      —
—

—

Total

Minority
interests inconsolidated
subsidiaries

Total
net assets¥ (7,115)¥194,572¥21,100¥215,672—

19,582—

19,582

Treasurystock

Change of scope of
consolidation

—

—

—

(285)

—

—

—

—

—

(285)

—

(285)

Cash dividends

—

—

—

(4,286)

—

—

—

—

—

(4,286)—(4,286)(34)

Purchase of treasury stock

—

—

—

—

—

—

—

—

(34)

(34)

—

Sale of treasury stock

—

—

0

—

—

—

—

—

1

1

—

1

Net change in the year

—

—

—

—

24,385

103

3,758(10,614)—

17,632

2,943

20,575746,484¥47,586¥46,734¥102,631¥44,768¥   20¥ 3,205¥(10,614)¥ (7,148)¥227,182¥24,043¥251,225

Balance at March 31, 2014
Cumulative effect of changes
in accounting policies

—

—

—

(16,026)

—

—

—

—

—

(16,026)(180)(16,206)

Restated balance—

47,586

46,73486,60544,76820

3,205(10,614)(7,148)211,156

23,863

235,019

Net income for the year

—

—

—

27,978

—

—

—

—

—

27,978—27,978Change of scope of
consolidation

—

—

—

675

—

—

—

—

—

675

—

675

Cash dividends

—

—

—

(5,715)

—

—

—

—

—

(5,715)—(5,715)(37)

Purchase of treasury stock

—

—

—

—

—

—

—

—

(37)

(37)

—

Sale of treasury stock

—

—

1

—

—

—

—

—

1

2

—

2

Net change in the year

—

—

—

—

24,760

(533)

7,775

24,279—56,281

5,433

61,714

Balance at March 31, 2015 746,484¥47,586¥46,735¥109,543¥69,528¥(513)¥10,980¥ 13,665¥(7,184)¥290,340¥29,296¥319,636

Balance at March 31, 2014

$396,551 $389,457$  855,264 $373,073$   168

Thousands of U.S. dollars (Note 3)

Cumulative effect of changes in­accounting policies
Restated balance$26,689 $ (88,458) $(59,567) $1,893,177 $200,366 $2,093,543——(133,554)

—

—

—

—

396,551

389,457

721,710373,073

168

26,689(88,458)(133,554)(1,497)(135,051)(59,567) 1,759,623—

198,869

1,958,492
233,151

Net income for the year——

233,151

—

—

—

—

—

233,151—

Change of scope of consolidation

—

—

5,631

—

—

—

—

—

5,631

—

5,631

Cash dividends——(47,631)

—

—

—

—

—

(47,631)—(47,631)(311)

Purchase of treasury stock

—

—

—

—

—

—

—

(311)

(311)

—

Sale of treasury stock

—

7

—

—

—

—

—

5

12

—

12

Net change in the year

—

—

—

206,335(4,448)64,802

202,335—

469,024

45,268514,292$  912,861 $579,408$(4,280)$91,491 $113,877

Balance at March 31, 2015

$396,551 $389,464

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

13 Fuji Electric Report 2015$(59,873) $2,419,499 $244,137 $2,663,636

Consolidated Statements of Cash Flows
Years ended March 31, 2015 and 2014
Thousands of
U.S. dollars(Note 3)

Millions of yen

Cash Flows from Operating Activities:
Income before income taxes and minority interests
Depreciation and amortization
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
Gain on change in equity
Loss on disposal of noncurrent assets
Loss on devaluation of investment securities
Impairment loss
Changes in operating assets and liabilities:
Trade receivables
Inventories
Trade payables
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 (Used in) 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
Payments of loans receivableCollection of loans receivable
Other, net
Net cash used in investing activities
Cash Flows from (Used in) Financing Activities:
Net increase (decrease) 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
Cash and Cash Equivalents at End of Year

2015

2014

2015

¥ 45,719
33,615657(2,526)
2,551
610
(81)
(2,778)(4,843)
880
447
2,830

¥ 33,737
30,849(941)(1,471)
2,855
1,125
(543)
(370)
—
1,304
1,134
641

$ 380,993
280,132
5,476(21,051)
21,262
5,089(682)(23,153)(40,361)
7,341
3,727
23,584(8,646)(12,572)
3,410
3,958
(4,456)
58,7752,572(2,536)(7,352)51,459(1,185)(9,964)8,290(6,445)3,545
62,561
1,451(2,958)(7,403)53,651(72,053)(104,767)
28,42032,986(37,147)
489,796
21,441(21,140)(61,269)
428,828(15,248)868(10,253)
6,233(6,530)5,578(3,398)(22,750)(13,823)
2,280(3,666)9,464(6,939)6,986(3,951)(9,649)(127,072)
7,235(85,450)
51,950(54,421)46,488(28,317)(189,587)

11,073751(24,357)—(14,562)1(37)(5,715)(981)—(33,827)
1,718(3,400)33,412(26,595)
95(23,798)
20,000(15,214)1(32)(4,286)(645)(96)(50,570)(76)(6,644)
39,68892,2796,261(202,975)—(121,357)13(311)(47,631)(8,185)—(281,906)
14,318(28,347)
278,440

1,883¥ 31,895

368¥ 33,412

15,699$ 265,792

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

Fuji Electric Report 201514

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 year’s 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,
2015 include the accounts of the Company and its 48 significant
subsidiaries and its 5 subsidiaries and affiliates are accounted forby the equity method (48 and 5 in 2014).
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 theCompanies 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 or 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

15 Fuji Electric Report 2015

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 foreignexchange risk associated with certain assets and liabilities denominated in foreign currencies and interest rate swap agreements as ameans 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.

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.

April 1, 2014. In addition, operating income increased by ¥1,372
million ($11,434 thousand), and ordinary income and income before
income taxes and minority interests each increased by ¥1,380
million ($11,502 thousand) for the year ended March 31, 2015. The
effect of this change on segment information and amounts per
share is noted in “Note 21. Segment Information” and “Note 25.
Amounts Per Share,” respectively.

i. Provision for Directors’ Retirement Benefits
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.

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.

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. Retirement Benefits(1) ‌The retirement benefit obligation for employees is attributed toeach period by the benefit formula method over the estimatedyears of service of the eligible employees.
(2) ‌The prior service costs are amortized by the straight-line method
within the average remaining years of service of the employee
participants. The actuarial gains and losses are amortized by thestraight-line method within the average remaining years of service of the employee participants from the next period in which
they arise, respectively.
(Changes in accounting policies)
Effective April 1, 2014, the Company has adopted the main clausesof paragraph 35 of “Accounting Standard for Retirement Benefits”(Accounting Standards Board of Japan (”ASBJ”) Statement No. 26
of May 17, 2012) and paragraph 67 of “Guidance on AccountingStandard for Retirement Benefits” (ASBJ Guidance No. 25 of March
26, 2015). Accordingly, the calculation methods for retirement
benefit obligation and service cost have been amended as follows:
The method of attributing expected benefit to the periods has beenchanged from a straight-line basis to the benefit formula basis, andthe method of determining the discount rate has been changed
from the one based on the average period up to the expected
timing of benefit payment to the use of a single weighted average
discount rate reflecting the estimated timing and amount of benefit
payments. In accordance with transitional treatment as stipulated inparagraph 37 of the Accounting Standard for Retirement Benefits,
the effect of the change in the calculation methods of retirement
benefit obligation and service cost is recognized as an adjustment
to retained earnings at the beginning of the year ended March 31,
2015. As a result, net defined benefit asset decreased by ¥15,600
million ($130,006 thousand), net defined benefit liability increasedby ¥9,051 million ($75,426 thousand), deferred tax liabilities
decreased by ¥7,869 million ($65,579 thousand), and retained
earnings decreased by ¥16,026 million ($133,554 thousand) as ofk. 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 percentage of the cost incurred to date to the estimated total cost. Whenthe outcome of the construction contracts can not be estimatedreliably, 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
Assets, liabilities, and revenue and expense accounts of the foreign
consolidated subsidiaries are translated into Japanese yen at thecurrent exchange rates 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.

Fuji Electric Report 201516

p. Amounts Per Share
Basic net income per share is computed based on the net income
available for distribution to shareholders of common stock and theweighted average number of shares of common stock outstanding
during the year, and diluted net income per share is computed
based on the net income available for distribution to theshareholders and weighted average number of shares of common
stock outstanding during each year after giving effect to the dilutive
potential of shares of common stock to be issued upon the exercise of warrants and stock subscription rights.
Net assets per share are computed based on the net assets
excluding share subscription rights and minority interests and thenumber of shares of common stock outstanding at the year end.

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 U.S. dollars at ¥120=U.S.$1,

the approximate exchange rate as of March 31, 2015. The U.S.
dollar amounts are presented solely for the convenience of thereaders outside Japan.

Note 4. Inventories
Inventories as of March 31, 2015 and 2014 consisted of the following:Thousands of
U.S. dollars(Note 3)

Millions of yen

Merchandise and finished goods
Work in process
Raw materials
Inventories

2015

2014

¥ 54,495
48,78734,332¥137,614¥ 43,180
48,03030,233¥121,443

2015$  454,129
406,566
286,090$1,146,785

Losses (gains) on valuation of inventories with lower profitability were ¥663 million ($5,532 thousand) and ¥(522) million for the years
ended March 31, 2015 and 2014, 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, 2015 and 2014 wereas follows:
Thousands of
U.S. dollars(Note 3)

Millions of yen

2015Time deposits¥    60

23

418

197

3,984

16,32533,196¥4,007¥16,803$33,393

Investment securities
Property, plant and equipment
Total

2015

2014

¥       —

$        —Collateralized liabilities as of March 31, 2015 and 2014 were as follows:
Thousands of
U.S. dollars(Note 3)

Millions of yen

2015

2015

2014

Trade payables¥ 45¥   12

Short-term debt

—

3,200

—

Long-term debt

501

859

4,175

¥546

¥4,071$4,554Total

17 Fuji Electric Report 2015$  379

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, bonds­payable 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 thesame 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 financelease transactions are primarily raised for the purpose of preparing
capital investment. The maturities of these bonds payable, longterm loans payable and lease obligations on finance lease transactions are up to 12 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 arises 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 bycontrolling 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 arises from the previously mentioned receivables andpayables denominated in foreign currencies. In addition, the­Companies use interest rate swap transactions to reduce the­interest 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 Material­Section 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 thescheduled 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.

Fuji Electric Report 201518

2. Estimated fair value and other matters related to financial instruments
Carrying amounts on the consolidated balance sheets as of March 31, 2015 and 2014, 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

2015
Carrying amounts

Cash and cash equivalents
Trade receivables¥  31,895
237,631

Fair value

Variance¥   31,895
237,596¥       —(35)Investment securities

168,374

175,9637,589

Trade payables(150,648)(150,648)—

Short-term debt

(67,080)(67,080)—

Current portion of long-term debt

(35,015)(35,015)—

Lease obligations (Current Liabilities)(12,988)(12,988)—

Long-term debt

(89,129)(90,193)

1,064

Lease obligations (Long-term Liabilities)
Derivatives
Derivative transactions to which hedge accounting is not applied
Derivative transactions to which hedge accounting is applied(22,260)(22,428)

168

4
(767)

4
(767)

—
—

Millions of yen

2014
Carrying amounts

Cash and cash equivalents
Trade receivables

Fair value

Variance¥  33,412
222,481¥  33,412
222,449¥       —(32)Investment securities

127,601

127,601——

Trade payables(142,087)(142,087)

Short-term debt

(52,713)(52,713)—

Current portion of long-term debt

(23,698)(23,698)—

Lease obligations (Current Liabilities)(13,521)(13,521)—Long-term debt

(123,092)(124,107)

1,015

Lease obligations (Long-term Liabilities)
Derivatives
Derivative transactions to which hedge accounting is not applied
Derivative transactions to which hedge accounting is applied(20,726)(20,810)

84

(61)
27

(61)
27

—
—

Thousands of U.S. dollars (Note 3)

2015

Cash and cash equivalents
Trade receivables

Carrying amounts

Fair value$   265,792
1,980,263$   265,792
1,979,974

Variance$        —(289)Investment securities

1,403,119

1,466,360

63,241

Trade payables(1,255,408)(1,255,408)—

Short-term debt

(559,005)(559,005)—

Current portion of long-term debt

(291,793)(291,793)—

Lease obligations (Current Liabilities)(108,237)(108,237)—

Long-term debt

(742,748)(751,611)

8,863

Lease obligations (Long-term Liabilities)
Derivatives
Derivative transactions to which hedge accounting is not applied
Derivative transactions to which hedge accounting is applied(185,502)(186,905)

1,403

39
(6,399)39(6,399)——(*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.

19 Fuji Electric Report 2015

Notes: 1. Methods for computing the estimated fair value of financial instruments, and information on securities and derivatives		 (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.”		 (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

Unlisted stocks (including stocks of unconsolidated subsidiaries and affiliates)

2015

2014

2015

Carrying amounts

Carrying amounts

Carrying amounts¥27,019¥21,266$225,166		‌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, 2015 and 2014:
Millions of yen

2015
Within 1 year

Between 1 and5 years

Between 5 and10 years

Over 10 years

Cash and cash equivalents¥ 31,895¥       —

¥   —

¥—

Trade receivables

232,510

5,090

31

—

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

1

—

—

—

¥264,406¥5,090¥31¥—

Within 1 year

Between 1 and5 years

Between 5 and10 years

Over 10 years¥ 33,412
218,615¥       —
3,866

¥—
—

¥—
—

0
¥252,027—¥3,866—¥——¥—

Millions of yen

2014

Cash and cash equivalents
Trade receivables
Investment securities
Debt securities with maturity date classified as other securities(Public bonds)  TotalThousands of U.S. dollars (Note 3)
2015

Cash and cash equivalents
Trade receivables
Investment securities
Debt securities with maturity date classified as other securities(Public bonds)  TotalWithin 1 year

Between 1 and5 years

Between 5 and10 years

Over 10 years$  265,792
1,937,575$        —42,423$    —
265$——

9$2,203,376—$42,423

—
$265

—
$—

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.”

Fuji Electric Report 201520

Note 7. Securities
1. Other securities as of March 31, 2015 and 2014 were as follows:
Millions of yen

2015
Cost

Carrying amounts

Unrealized gains

Unrealized losses¥628

Marketable securities classified as other securities
Equity securities¥55,548¥157,534¥102,614

Debt securities

1

1

—

—

Others

—

—

—

—

Total

¥55,549¥157,535¥102,614¥628

Carrying amounts

Unrealized gains

Unrealized losses¥572

Millions of yen

2014
Cost

Marketable securities classified as other securities
Equity securities¥58,693¥127,601¥69,480

Debt securities

0

0

—

—

Others

—

—

—

—

Total

¥58,693¥127,601¥69,480¥572

Thousands of U.S. dollars (Note 3)

2015
Cost

Carrying amounts

Unrealized gains

Unrealized losses$5,230Marketable securities classified as other securities
Equity securities$462,901$1,312,788$855,117

Debt securities

9

9

—

—

Others

—

—

—

—

Total

$462,910$1,312,797$855,117$5,230Note: T he 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, 2015 and 2014 were ¥6,584 million ($54,867 thousand) and ¥6,507 million, respectively.)

2. Sales of other securities for the years ended March 31, 2015 and 2014 were as follows:
Thousands of
U.S. dollars(Note 3)

Millions of yen

2015

2015

2014

Proceed from sales¥5,743¥767$47,858

Gain on sales

2,732

359

22,769Loss on sales

7

9

66

3. Impairment of other securities for the years ended March 31, 2015 and 2014 were as follows:
Thousands of
U.S. dollars(Note 3)

Millions of yen

2015

Impairment losses

2014

¥447

¥1,1342015$3,727

4. Investments in unconsolidated subsidiaries and affiliates as of March 31, 2015 and 2014 were as follows:
Thousands of
U.S. dollars(Note 3)

Millions of yen

2015

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

21 Fuji Electric Report 2015

2014

¥—

¥5,1102015$—

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

2015
Contract amountContract amountover 1 year

Unrealized
gain/loss

U.S. dollars¥2,258¥     —¥  (53)¥  (53)

Euro

1,434

—

103

103

Korean Won

270

—

(4)

(4)

Canadian dollars

286

—

(33)

(33)

Korean Won

544

260

(7)

(7)

Yen

29

—

(2)

(2)

¥4,821¥260¥     4¥     4

Fair value

Foreign currency forward contracts:
Receivables:

Payables:Total

Millions of yen

2014
Contract amountContract amountover 1 year

Unrealized
gain/loss

U.S. dollars¥2,358

¥—

¥(23)

¥(23)

Euro

1,465

—

(27)

(27)

Korean Won

175

—

(3)

(3)

Canadian dollars

71

—

(8)

(8)

Fair value

Foreign currency forward contracts:
Receivables:

Payables:Korean Won
Total

8

—

0

0

¥4,077

¥—

¥(61)

¥(61)

Thousands of U.S. dollars (Note 3)

2015
Contract amountContract amountover 1 year

Unrealized
gain/loss

U.S. dollars$18,791$    —$(423)$(423)

Euro

11,955

—

861

861

Korean Won

2,256

—

(37)

(37)

Canadian dollars

2,387

—

(281)

(281)

4,539

2,173

(61)

(61)

249

—

(20)

(20)

$40,177$2,173$   39$  39

Fair value

Foreign currency forward contracts:
Receivables:

Payables:Korean Won
Yen
Total
Note: The fair value is estimated based on forward exchange rates.

Fuji Electric Report 201522

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

2015
Hedge accounting
methodType of derivative

Principal items hedged

Contract amountContract amountover 1 year

¥ 4,972¥   603¥  (404)

553

—

17

Fair value

Foreign currency forward contracts:
Receivables:

Accounts receivable–trade

U.S. dollars
Deferral hedge
methodEuro
Payables:Accounts payable–trade

U.S. dollars

8,366

1,014

1,069

Euro

20,732

16,897(1,451)78

38

2¥   924¥        —12

—U.S. dollars

127

—

Euro

24

—

Singapore dollars

3—¥35,791¥18,552

Swiss franc
Foreign currency forward contracts:
Receivables:

Accounts receivable–trade

U.S. dollars
Allocation method

Euro
Payables:(Note 2)

Accounts payable–tradeTotal¥  (767)

Millions of yen

2014
Hedge accounting
methodType of derivative

Principal items hedged

Contract amountContract amountover 1 year

Fair value

Foreign currency forward contracts:
Receivables:

Accounts receivable–trade

U.S. dollars
Deferral hedge
method¥ 3,069

¥363

Euro

607

—

(2)

Canadian dollars

702

123

(88)

Payables:¥   (80)

Accounts payable–trade

U.S. dollars

9,495

—

187

Euro

211

—

20

Singapore dollars

26

—

1

U.S. dollars¥ 1,782¥    —

Total¥15,892¥486

Foreign currency forward contracts:
Allocation method

23 Fuji Electric Report 2015

Receivables:

Accounts receivable–trade(Note 2)¥ 38

Thousands of U.S. dollars (Note 3)

2015
Hedge accounting
methodType of derivative

Principal items hedged

Contract amountContract amountover 1 year

$ 41,437$  5,028$ (3,367)

4,608

—

143

Fair value

Foreign currency forward contracts:
Receivables:

Accounts receivable-trade

U.S. dollars
Deferral hedge
methodEuro
Payables:Accounts payable-trade

U.S. dollars

69,721

8,455

8,916

Euro

172,770

140,815(12,098)

617

304

10

$  7,707$        —107

—Swiss franc
Foreign currency forward contracts:
Receivables:

Accounts receivable-trade

U.S. dollars
Allocation method

Euro
Payables:(Note 2)

Accounts payable-trade
1,066

—

Euro

200

—

Singapore dollars

30—$298,263$154,602

U.S. dollars

Total$ (6,396)

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

2015
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

¥20,132¥11,500

Fair value

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

2014
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

¥28,735¥25,897

Fair value

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

2015
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

$167,769$95,833

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.

Fuji Electric Report 201524

(3) Commodity-related contracts
Millions of yen

2015
Hedge accounting method

Deferral hedge method

Type of derivative

Commodity swap
Receive floating pay fixed

Principal items hedged

Contract amountContract amountover 1 year

¥245

¥—

Fair value

Raw materials¥(0)Millions of yen

2014
Hedge accounting method

Deferral hedge method

Type of derivative

Commodity swap
Receive floating pay fixed

Principal items hedged

Contract amountContract amountover 1 year

¥233

¥—

Fair value

Raw materials¥(10)

Thousands of U.S. dollars (Note 3)

2015
Hedge accounting method

Deferral hedge method

Type of derivative

Commodity swap
Receive floating pay fixed

Principal items hedged

Contract amountContract amountover 1 year

$2,050$—Fair value

Raw materials$(2)

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, 2015 and 2014 consisted of the following:Thousands of
U.S. dollars(Note 3)

Millions of yen

2015

2014

¥48,080¥52,713Loans, principally from banks

2015$400,671

Commercial paper

19,000—158,334

Short-term Debt

¥67,080¥52,713$559,005

The weighted average interest rates on short-term debt as of March 31, 2015 and 2014 were 0.80% and 1.16%, respectively.

Long-term debt as of March 31, 2014 and 2013 consisted of the following:Thousands of
U.S. dollars(Note 3)

Millions of yen

2015

2014

¥ 63,644¥ 86,290$  530,375

0.79% Yen unsecured straight bonds due 2015

15,00015,000125,000

0.86% Yen unsecured straight bonds due 2016

20,00020,000166,667

1.00% Yen unsecured straight bonds due 2017

5,000

5,000

41,667

0.90% Yen unsecured straight bonds due 2018

20,00020,000166,667

Loans, principally from banks and insurance companies

2015

Bonds issued by the Company:

Zero coupon convertible bonds with stock acquisition rights due 2016

500

4,165

146,790

1,034,541

35,01523,698291,793¥ 89,129¥123,092$  742,748

Less: Portion due within one year
Long-term Debt

500
124,144

The weighted average interest rates on loans, principally from banks and insurance companies, as of March 31, 2015 and 2014 were 0.71% and 0.79%, respectively.

As of March 31, 2015, the aggregate annual maturities of long-term debt were as follows:
Millions of yen

Thousands of
U.S. dollars(Note 3)

2017

¥36,730$306,088

2018

29,907249,227

201920,228

168,573

2020

2,158

17,989Years ended March 31

2021 thereafterTotal

25 Fuji Electric Report 2015

106

871

¥89,129$742,748

Note 10. Lease Obligations
Lease obligations as of March 31, 2015 and 2014 consisted of the following:Thousands of
U.S. dollars(Note 3)

Millions of yen

Short-term

2015

2014

2015

¥12,988¥13,521$108,237

Long-term

22,26020,726

185,502

Total¥35,248¥34,247$293,739

The weighted average interest rates on lease obligations as of March 31, 2015 and 2014 were 2.17% and 2.28%, respectively.

As of March 31, 2015, the aggregate annual maturities of lease obligations were as follows:
Millions of yen

Thousands of
U.S. dollars(Note 3)

2017

¥7,829$ 65,246

2018

5,814

48,454

2019

4,177

34,810

2020

2,619

21,8302021 thereafter

1,821

15,161¥22,260$185,501

Years ending March 31

Total

Note 11. Retirement Benefits
1. Outline of retirement benefits for employees
The Company and most of its consolidated subsidiaries have either
funded or unfunded defined benefit plans and defined contribution
pension plans.
Defined benefit corporate pension plans are all funded andcover substantially all employees who are entitled to lump-sum or
annuity payments determined by reference to their basic rates of
pay and length of service. As of March 31, 2014, the Company
and certain domestic consolidated subsidiaries revised defined
benefit corporate pension plans and transferred all benefit accrual
occurred after April 1,2014 to defined contribution pension plans.
In addition, retirement benefit trust has been established in certain
pension plans.

Lump-sum payment plans are either unfunded or funded as aresult of establishing retirement benefit trust. They cover substantially all employees who are entitled to lump-sum payments determined by reference to either points obtained with interest credits ortheir basic rates of pay and length of service.
Certain domestic consolidated subsidiaries adopted a simplified
method in the calculation of net defined benefit liability and retirement benefit expense. Certain domestic consolidated subsidiaries
have multiemployer pension plans accounted for by the same
methods used for defined contribution pension plans because theycannot reasonably calculate their portion of pension assets corresponding to their contributions.

2. Information on defined benefit pension plans(1) The changes in the retirement benefit obligation except for plans accounted for by a simplified method during the years
ended March 31, 2015 and 2014 were as follows:
Thousands of
U.S. dollars(Note 3)

Millions of yen

Retirement benefit obligation at the beginning of the year

2015

2014

¥187,555¥199,254

2015$1,562,961

24,427—

203,563

211,982

199,254

1,766,524

Service cost

3,211

4,764

26,762

Interest cost

2,903

4,903

24,199Actuarial loss

769

1,148

6,409

(13,958)(12,818)(116,324)

Prior service cost—

(9,730)—

Others

19

34

153

¥204,926¥187,555$1,707,723

Cumulative effect of changes in accounting policies
Restated retirement benefit obligation at the beginning of the year

Retirement benefits paid

Retirement benefit obligation at the end of the year
Note: Prior service cost occurred due to the revision of defined benefit plans as of March 31, 2014.

Fuji Electric Report 201526

(2)	The changes in plan assets at fair value except for plans accounted for by a simplified method during the years ended
March 31, 2015 and 2014 were as follows:
Thousands of
U.S. dollars(Note 3)

Millions of yen

Plan assets at fair value at the beginning of the year

2015

2014

¥186,844¥153,278

2015$1,557,040

Expected return on plan assets

3,469

2,535

28,909Actuarial gain

30,716

31,429255,967

Contributions by the Companies

7,277

9,395

60,648Retirement benefits paid

(9,521)(9,821)(79,349)

4

28

34

¥218,789¥186,844$1,823,249

OthersPlan assets at fair value at the end of the year(3)	The changes in net defined benefit liability calculated by a simplified method during the years ended March 31, 2015 and2014 were as follows:
Thousands of
U.S. dollars(Note 3)

Millions of yen

2015

2015

2014

Net defined benefit liability at the beginning of the year

¥2,262¥2,545

Cumulative effect of changes in accounting policies

224

—

1,869

2,486

2,545

20,723
1,267

Restated net defined benefit liability at the beginning of the year

$18,854

Retirement benefit expenses

151

5

Retirement benefits paid

(66)

(80)

(552)

Contributions

(295)

(292)

(2,464)284

10¥2,278¥2,262$18,984

OthersNet defined benefit liability at the end of the year(4)	The reconciliation of retirement benefit obligation and plan assets at fair value with net defined benefit liability and net
defined benefit asset recognized in consolidated balance sheet were outlined as follows:
Thousands of
U.S. dollars(Note 3)

Millions of yen

2015

2014

2015

Funded retirement benefit obligation¥  205,188¥ 188,014$   1,709,903

Plan assets at fair value(222,422)(190,101)(1,853,524)(17,234)(2,087)(143,621)

5,649

5,060

47,079¥ (11,585)¥   2,973$   (96,542)

Unfunded retirement benefit obligation
Net amount of liabilities and assets recognized in the consolidated balance sheet
Net defined benefit liability

32,51834,236

270,984

Net defined benefit asset(44,103)(31,263)(367,526)¥ (11,585)¥   2,973$   (96,542)

Net amount of liabilities and assets recognized in the consolidated balance sheet
Note: Pension plans accounted for by a simplified method are included.

(5) The components of retirement benefit expenses for the years ended March 31, 2015 and 2014 were as follows:
Thousands of
U.S. dollars(Note 3)

Millions of yen

Service cost

2015

2014

2015

¥ 3,211¥ 4,764$ 26,762Interest cost

2,903

4,903

24,199

Expected return on plan assets(3,469)(2,535)(28,909)

Amortization of actuarial loss

7,096

9,485

59,134

Amortization of prior service cost

(607)

33

(5,066)Retirement benefit expenses calculated by simplified method

151

5

1,267

Others

241

754

2,001

¥ 9,526¥17,409$ 79,388

Retirement benefit expenses

27 Fuji Electric Report 2015

(6)	The components of remeasurements of defined benefit plans included in other comprehensive income (before tax effect)
for the years ended March 31, 2015 and 2014 were as follows:
Thousands of
U.S. dollars(Note 3)

Millions of yen

2015

Prior service cost
Actuarial gain and loss
Total

2015

2014

¥    607$   5,066¥—(37,032)—(308,612)¥(36,425)¥—$(303,546)(7)	The components of remeasurements of defined benefit plans included in accumulated other comprehensive income(before tax effect) as of March 31, 2015 and 2014 were as follows:
Thousands of
U.S. dollars(Note 3)

Millions of yen

Unrecognized prior service cost
Unrecognized actuarial gain and loss
Total

2015

2014

2015

¥ (7,321)¥  (7,884)$ (61,010)(13,909)

23,079(115,908)¥(21,230)¥15,195$(176,918)

2015

2014

(8) The breakdown of plan assets by major category as of March 31, 2015 and 2014 were as follows:
Equity securities

60%

54%

Debt securities

29

31
12

General accounts at life insurance companies

10

Others

1

3

Total

100%

100%

Note: Retirement benefit trust established for the corporate pension plans is included and equivalent to 27% of total amount of plan assets as of March 31, 2015 and 24% as ofMarch 31, 2014.

The long-term expected rates of return on plan assets have been determined as a result of consideration of both the portfolio allocation atpresent and in the future, and long-term rates of return from multiple plan assets at present and in the future.
(9) The assumptions used in accounting for the defined benefit plans as of March 31, 2015 and 2014 were as follows:
Discount rates
Long-term expected rates of return on plan assets
Expected rates of salary increase

2015

2014

0.99%–1.50%
mainly 2.5%
2.1%–8.5%

mainly 2.5%
mainly 2.5%
2.1%–8.5%

3. Information on defined contribution pension plans
Contributions of defined contribution pension plans for the years ended March 31, 2015 and 2014 were ¥4,406 million ($36,719 thousand)and ¥1,563 million, respectively.

4. Information on multiemployer pension plans
Contributions to multiemployer pension plans accounted for by the same methods used for defined contribution plans for the years ended
March 31, 2015 and 2014 were ¥76 million ($637 thousand) and ¥68 million, respectively.

Fuji Electric Report 201528

Note 12. Shareholders’ Equity
1. Shares issued and outstanding / Treasury stock
The Companies Act of Japan provides that an amount equal to 10% of the amount to be disbursed as distributions of capital surplus (otherthan 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 bemade 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, 2015 and 2014 were as follows:
Thousands of shares
Increase in
the yearMarch 31, 2014

Decrease in
the yearMarch 31, 2015

Shares outstanding:Common stock
Total

746,484——

746,484

746,484——

746,484

31,98574

2

32,05731,98574

2

32,057

Treasury stock:
Common stock
Total

Thousands of shares
Increase in
the yearMarch 31, 2013

Decrease in
the yearMarch 31, 2014

Shares outstanding:Common stock
Total

746,484——

746,484

746,484——

746,484

31,91276

331,98531,91276

331,985

Treasury 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 the request of shareholders who own less than one voting unit for the years ended March 31, 2015 and 2014.

2. Dividends(1) Dividends paid
For the year ended March 31, 2015
Resolution

Meeting of the Board of
Directors on May 27, 2014

Type ofsharesTotal
dividends(millions of yen)

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

Commonstock¥2,857$23,817

Meeting of the Board of
CommonDirectors on October 30, 2014 stock

2,857

23,817

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

¥4.0
4.0

Cut-off date

Effective date

$0.03

March 31, 2014

June 9, 20140.03

September 30,
2014

December 3,
2014

For the year ended March 31, 2014
Resolution

Type ofsharesTotal Dividends (millions of yen)

Dividends per share (yen)Cut-off date

Effective date

¥2,143

¥3.0

2,143

3.0

March 31, 2013
September 30,
2013

June 4, 2013
December 3,
2013

Meeting of the Board of
CommonDirectors on May 23, 2013
stock
Meeting of the Board of
CommonDirectors on October 24, 2013 stock(2) Dividends with the cut-off date in the year ended March 31, 2015 and effective date in the year ending March 31, 2016
Resolution

Meeting of the Board of
Directors on May 26, 2015

Type ofsharesCommonstock

Total
Total dividends(thousands of U.S.
dividends(millions of yen)dollars (Note 3))¥3,572$29,768

Source ofdividends

Retained
Earnings

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

¥5.0

$0.04

Cut-off date

Effective date

March 31, 2015

June 8, 2015

Dividends with the cut-off date in the year ended March 31, 2014 and effective date in the year ended March 31, 2015
Resolution

Meeting of the Board of
Directors on May 27, 2014

29 Fuji Electric Report 2015

Type ofsharesCommonstock

Total dividends (millions of yen)

Source ofdividends

Dividends per share (yen)Cut-off date

Effective date

¥2,857Retained
Earnings¥4.0

March 31, 2014

June 9, 2014

Note 13. Research and Development Costs
Research and development costs charged to income were ¥35,023 million ($291,865 thousand) and ¥32,029 million for the years ended
March 31, 2015 and 2014, respectively.

Note 14. Selling, General and Administrative Expenses
Major components of Selling, General and Administrative Expenses for the years ended March 31, 2015 and 2014 were as follows:
Thousands of
U.S. dollars(Note 3)

Millions of yen

Salaries and wages

2015

2014

¥71,558¥67,8912015$596,318

Retirement benefit expenses

5,367

6,944

44,726

Research and development costs

29,421

25,969245,181

Note 15. Extraordinary Loss, Net
Extraordinary loss, net, for the years ended March 31, 2015 and 2014 were as follows:
Thousands of
U.S. dollars(Note 3)

Millions of yen

2015

2014

2015

Gain on sales of noncurrent assets¥     81¥   543$    682

Gain on sales of investment securities

2,778

370

23,153Gain on change in equity

4,843

—

40,361

Loss on disposal of noncurrent assets(880)(1,304)(7,341)

Loss on devaluation of investment securities(447)(1,134)(3,727)(2,830)(641)(23,584)

Settlement package

(810)

(420)

(6,755)

Others

(155)

(408)

(1,288)¥ 2,580¥(2,994)$ 21,501

Extraordinary income

Extraordinary loss

Impairment loss

Extraordinary Loss, Net

Note 16. Impairment Loss
The Companies determine the asset group by considering the division of management accounting.
For the year ended March 31, 2015, the Companies recognized an impairment loss on the following asset groups:
Usage

Location

Classification

Idle assets

Kulim, Kedah (Malaysia) and
one other

Lease assets and other assets

Assets to be disposed

Shanghai (China) and six others

Buildings, machinery and equipment
and other assets

Millions of yen

Thousands of
U.S. dollars(Note 3)

¥2,205$18,377

625

5,207

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.
The impairment loss consisted of ¥2,160 million ($18,004 thousand) for lease assets and ¥670 million ($5,580 thousand) for other assets.
The recoverable amount of the above assets was measured by the net realizable value. The net realizable value was measured as zero for
assets of which selling or diversion was deemed difficult.
For the year ended March 31, 2014, notes to impairment loss were not disclosed because it didn’t have significant impact on the consolidated financial statements.

Fuji Electric Report 201530

Note 17. Income Taxes
1. The components of income taxes for the years ended March 31, 2015 and 2014 were as follows:
Thousands of
U.S. dollars(Note 3)

Millions of yen

Current
DeferredIncome Taxes

2015

2014

2015

¥ 9,612¥ 9,005$ 80,104

5,307

2,978

44,215¥14,919¥11,983$124,319

The Company and its domestic consolidated subsidiaries are subject to corporate income tax, prefectural and municipal inhabitants’taxes and enterprise tax, based on income.

2. The significant components of deferred tax assets and liabilities as of March 31, 2015 and 2014 were as follows:
Thousands of
U.S. dollars(Note 3)

Millions of yen

2015

2014

2015

Deferred tax assets¥ 20,934¥ 28,760$ 174,451

The investment deduction of the foreign consolidated subsidiaries

19,741

20,952

164,513

Investment securities

7,727

8,501

64,396

Accrued employees’ bonuses

6,496

6,574

54,137

Inventories

5,596

5,458

46,634

Tax loss carryforwards

3,747

6,872

31,226

Tangible fixed assets

2,641

3,693

22,010

Other

5,788

6,247

48,21972,67087,057605,586(28,894)(32,318)(240,784)

43,77654,739364,802

Unrealized gain on other securities(33,007)(24,561)(275,059)

Gain on securities contribution to employee retirement benefit trust(17,030)(19,422)(141,923)

Investment securities(5,188)(5,717)(43,233)

Other(1,363)(877)(11,356)

Gross deferred tax liabilities(56,588)(50,577)(471,571)

Net deferred tax assets (liabilities)¥(12,812)¥   4,162$(106,769)

Net defined benefit liability

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

3. The reconciliation between the statutory income tax rate and the effective income tax rate for the years ended
March 31, 2015 and 2014 were as follows:
2015

2014

Statutory income tax rate

35.6%

Tax credits

(5.9)

(4.8)

Valuation allowance

(4.1)

(6.9)

38.0%

Tax rate difference of overseas consolidated subsidiaries

(1.7)

(2.2)

Permanent difference resulting from non-taxable income, including dividends received

(1.3)

(2.0)

Decrease in deferred tax assets due to the revision of statutory income tax rate

5.0

4.4

Permanent difference resulting from expenses not deductible for income tax purposes

2.9

3.7

Foreign taxes

0.4

0.6

Other

1.7

4.7

Effective income tax rate

32.6%

35.5%

31 Fuji Electric Report 2015

4. Revision of the amount of deferred tax assets /­liabilities by change in Corporate Tax Rate
The “Act for Partial Amendment of the Income Tax Act, etc.” (ActNo. 9 of 2015) and the “Act for Partial Amendment of the Local Tax
Act, etc.” (Act No. 2 of 2015) were promulgated on March 31,
2015. The Corporate tax rates are to be lowered from the fiscal
year beginning April 1, 2015. Accordingly, the effective statutory tax
rate for the calculation of deferred tax assets and liabilities will belowered from 35.6% to 33.1% for temporary differences expected
to be utilized in the fiscal year beginning April 1, 2015 and 32.3%
for fiscal years beginning April 1, 2016 and onwards.

As a result of these changes, deferred tax liabilities (after
deducting deferred tax assets) as of March 31, 2015 decreasedby ¥1,676 million ($13,971 thousand). Deferred income taxes,
valuation difference on available-for-sale securities and remeasurements of defined benefit plans included in accumulated othercomprehensive income increased by ¥2,307 million ($19,233
thousand), ¥3,311 million ($27,595 thousand) and ¥692 million($5,771 thousand), respectively.

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

2015

2014

2015

Amount arising during the year

¥ 35,727¥ 37,567

Reclassification adjustments(2,537)(12)(21,137)

33,19037,555276,590

Tax effect(8,459)(13,087)(70,493)

Valuation difference on available-for-sale securities

24,731

24,468206,097

(796)

170

(6,638)

1

(14)

12

(795)

156

(6,626)

Tax effect

264

(59)

2,199

Deferred gains or losses on hedges

(531)

97

(4,427)

8,785

4,279

73,214

—

72

—

8,785

4,351

73,214

Valuation difference on available-for-sale securities:

Before tax effect$ 297,727

Deferred gains or losses on hedges:
Amount arising during the year
Asset acquisition cost adjustments
Before tax effectForeign currency translation adjustments:
Amount arising during the year
Reclassification adjustments
Before tax effect

—

—

—

8,785

4,351

73,214249,478

Tax effectForeign currency translation adjustments
Remeasurements of defined benefit plans:
Amount arising during the year

29,937—

Reclassification adjustments

6,488

—

54,068Before tax effect36,425—

303,546

Tax effect(12,284)—(102,370)

24,141—

201,176

Amount arising during the year

392

30

3,270

Reclassification adjustments

127

—

1,040

Remeasurements of defined benefit plans
Share of other comprehensive income of associates accounted for using equity method:

Share of other comprehensive income of associates accounted forusing equity method
Total Other Comprehensive Income

519

30

4,310

¥ 57,645¥ 28,946$ 480,370

Note 19. Contingent Liabilities
Contingent liabilities as of March 31, 2015 and 2014 were as follows:
Thousands of
U.S. dollars(Note 3)

Millions of yen

2015

Guarantees¥13,718

2014¥9,705

2015$114,323

Fuji Electric Report 201532

Note 20. Leases
1. Finance lease transactions(1) Leased assets
Leased assets primarily consist of machinery and equipment and software.
(2) Depreciation method for leased assets
Depreciation is computed by the straight-line method over the lease period assuming no residual value.
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 theyears ended March 31, 2015 and 2014 were as follows:(a) Acquisition cost and accumulated depreciation under finance leases:
Thousands of
U.S. dollars(Note 3)

Millions of yen

2015

2015

2014

Acquisition cost

¥2,324¥5,518

Accumulated depreciation

1,693

4,114

$19,372
14,106Net leased property¥  631¥1,404$ 5,266(b) Obligations under finance leases:
Thousands of
U.S. dollars(Note 3)

Millions of yen

2015

2015

2014

Due within one year¥214¥  710Due after one year

529

863

4,409

¥743

¥1,573$6,195

Total$1,786(c) Lease expense, depreciation expense and interest expense under finance leases:
Thousands of
U.S. dollars(Note 3)

Millions of yen

2015

2015

2014

Lease expense¥599¥2,202$4,998Depreciation expense

408

1,132

3,401

Interest expense

31

77

263

(d) Method of calculating estimated depreciation expense
Depreciation is computed by the straight-line method over the lease period assuming no residual value.
(e) Method of calculating estimated interest expense
Interest expense is computed and allocated to each period using the interest method assuming interest expense to be the excess of totallease payments over the acquisition cost.

2. Operating lease transactions
The minimum rental commitments under noncancellable operating leases as of March 31, 2015 and 2014 were as follows:
Thousands of
U.S. dollars(Note 3)

Millions of yen

2015

2015

2014

Due within one year

¥1,490¥  759Due after one year

3,135

729

26,124¥4,625¥1,488$38,543

Total

33 Fuji Electric Report 2015

$12,419

Note 21. 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 the­Company in order to make decisions about resource allocation andto assess performance. The Company has business headquarters
by products and services at its head office. The business headquarters prepare comprehensive global strategies related to theirproducts and services and control their business activities. Accordingly, the Companies have five reporting segments, principally
based on the business headquarters, that take into account thesimilarity of category and nature of products and services: Powerand Social Infrastructure, Industrial Infrastructure, Power Electronics, Electronic Devices and Food and Beverage Distribution. Thesesegments consist of 2 or more business segments.
As of April 1, 2014, reflecting change of organization structure,
the reporting segments were reclassified in Power and Social Infrastructure, Industrial Infrastructure, Power Electronics and Electronic
Devices, and the content of Others was changed. The reporting
segment information for the year ended March 31, 2014 has been
reclassified to reflect 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, solar power
generation systems, fuel cells, energy management systems, watt-hour meters, smart meter,
information systems

Industrial Infrastructure

Power distribution substation equipment, industrial power supply equipment, industrial drive systems,
heating and induction furnace equipment, factory energy management systems, data centers, plant
control systems, measurement system, radiation control systems, electrical equipment and air
conditioning construction

Power Electronics

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

Electronic Devices

Power semiconductors, photoconductive drums, magnetic disks

Food and Beverage Distribution

Food and beverage vending machines, retail distribution systems, showcases, currency handlingequipment(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 are consistent 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.
(Changes in accounting policies)
Effective April 1, 2014, the Company has adopted the main clauses of paragraph 35 of “Accounting Standard for Retirement Benefits” (ASBJ
Statement No. 26 of May 17, 2012) and paragraph 67 of “Guidance on Accounting Standard for Retirement Benefits” (ASBJ Guidance No. 25
of March 26, 2015). Accordingly, the calculation methods for retirement benefit obligation and service cost have been amended as follows:
The method of attributing expected benefit to the periods has been changed from a straight-line basis to the benefit formula basis, and themethod of determining the discount rate has been changed from the one based on the average period up to the expected timing of benefit
payment to the use of a single weighted average discount rate reflecting the estimated timing and amount of benefit payments.
As a result, segment profits for the year ended March 31, 2015 increased in each segment as follows: Power and Social Infrastructure¥199 million ($1,665 thousand), Industrial Infrastructure ¥375 million ($3,131 thousand), Power Electronics ¥246 million ($2,052 thousand),Electronic Devices ¥172 million ($1,435 thousand), Food and Beverage Distribution ¥212 million ($1,773 thousand) and Others ¥57 million($482 thousand).

Fuji Electric Report 201534

(3) Information on net sales, profit or loss, assets, liabilities and other items by each reporting segment
Reporting segment information as of March 31, 2015 and 2014 and for the years then ended were as follows:
Millions of yen

Year ended March 31, 2015

Power andSocialIndustrial
Infrastructure Infrastructure

PowerElectronics

Electronic
Devices

Food andBeverageDistribution

Others¥162,243¥130,772¥118,824¥32,218

Total

Adjustments

Consolidated¥810,678¥        —¥810,678

Sales, profits or losses andassets by reporting segments
Net Sales
Sales to third parties
Inter-segment sales andtransfers
Total sales¥173,502¥193,119

1,711

4,916

21,867

6,417

289

28,99064,190(64,190)—

175,213

198,035

184,110

137,189

119,113

61,208874,868(64,190)810,678

Segment profits (losses)¥  8,266¥ 11,423¥  6,822¥  8,071¥  8,527¥ 1,884¥ 44,993¥    (5,677)¥ 39,316

Segment assets¥144,896¥175,030¥156,834¥166,063¥ 70,480¥34,413¥747,716¥156,806¥904,522¥  2,132¥  2,792¥  5,205¥ 18,944¥  2,877¥   768¥ 32,718¥    897¥ 33,615

Other items
Depreciation and amortization
Investments for companies
applied equity method¥ 11,573¥  1,435¥        —¥        —¥        —¥        —¥ 13,008¥        —¥ 13,008

Capital expenditures¥  2,829¥  3,390¥ 10,184¥ 10,849¥  3,069¥   685¥ 31,006¥  2,667¥ 33,673

PowerElectronics

Electronic
DevicesMillions of yen
Food andBeverageDistribution

Total

Adjustments

Consolidated¥155,927¥115,547¥119,830¥759,911¥        —¥759,911

Year ended March 31, 2014

Power andSocialIndustrial
Infrastructure Infrastructure

OthersSales, profits or losses andassets by reporting segments
Net Sales
Sales to third parties
Inter-segment sales andtransfers
Total sales¥150,590¥186,153¥31,864

1,731

3,395

18,8187,502

226

28,13659,808(59,808)—

152,321

189,548

174,745

123,049

120,056

60,000819,719(59,808)

759,911

Segment profits (losses)¥  7,659¥  9,624¥  5,331¥  6,472¥  8,047¥ 1,912¥ 39,045¥   (5,909)¥ 33,136

Segment assets¥121,047¥158,092¥136,436¥158,033¥ 65,909¥33,749¥673,266¥137,508¥810,774¥  2,027¥  2,615¥  4,189¥ 17,841¥  2,574¥   753¥ 29,999¥    850¥ 30,849¥  6,107¥  1,977¥    683¥  2,908¥       —
¥  8,738¥        —¥ 15,153¥        —
¥  3,412¥        —
¥   531¥  6,790¥ 32,719¥        —¥    931¥  6,790¥ 33,650

PowerElectronics

Thousands of U.S. dollars (Note 3)
Food andElectronic
Beverage
Devices
Distribution
Others

Total

Adjustments

Consolidated

Other items
Depreciation and amortization
Investments for companies
applied equity method
Capital expenditures

Year ended March 31, 2015

Power andSocialIndustrial
Infrastructure Infrastructure

Sales, profits or losses andassets by reporting segments
Net Sales
Sales to third parties
Inter-segment sales andtransfers$1,445,854 $1,609,332 $1,352,027 $1,089,775$990,204$268,465 $6,755,657 $        — $6,755,657

14,26240,967

182,230

53,474

2,410

241,567

534,9101,460,116

1,650,299

1,534,257

1,143,249

992,614510,032

7,290,567

Segment profits (losses)$   68,885 $   95,194 $   56,854 $   67,263$ 71,062$ 15,688 $  374,946 $    (47,305) $  327,641

Segment assets$1,207,467 $1,458,591 $1,306,953 $1,383,866$587,336$286,753 $6,230,966 $1,306,720 $7,537,686$   17,775 $   23,267 $   43,383 $  157,870$ 23,975$  6,385 $  272,655 $    7,477 $  280,132$   96,442 $   11,966 $        — $          —
$   23,579 $   28,252 $   84,872 $   90,410$        —$ 25,580$        — $  108,408 $        — $  108,408$  5,698 $  258,391 $   22,224 $  280,615

Total sales(534,910)—(534,910) 6,755,657

Other items
Depreciation and amortization
Investments for companies
applied equity method
Capital expenditures

Notes: 1.	Others segment consisted of business segments not attributable to reporting segments and included financial services, real estate operations, insurance agency services, travel
agency services, printing and information services, etc.

35 Fuji Electric Report 2015

2. The adjustments for segment information above were as follows:
Thousands of
U.S. dollars (Note 3)

Millions of yen

2015

Corporate expense*
Elimination of intersegment sales
Total

2015

2014

¥(5,739)62¥(5,677)¥(5,894)(15)¥(5,909)$(47,827)
522$(47,305)* Corporate expense mainly consisted of administration cost of the Company.
Thousands of
U.S. dollars (Note 3)

Millions of yen

Corporate assets*
Elimination of intersegment transactions
Total

2015

2014

¥ 314,852(158,046)¥ 156,806¥ 256,485(118,977)¥ 137,508

2015$ 2,623,767(1,317,047)$ 1,306,720* 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 a financing subsidiary company.
3. Segment profits (losses) were reconciled to operating income (loss) in the consolidated statements of income.

2. Related information
Related information as of March 31, 2015 and 2014 and for the years then ended were as follows:
Geographic information(a) Sales
Thousands of
U.S. dollars(Note 3)

Millions of yen

2015

2014

¥605,763¥582,223$5,048,026

Asia (except for China), Others

85,181

77,260709,841

China

87,733

68,401

731,113

Europe16,51917,362

137,660

America

15,482

14,665129,017¥810,678¥759,911$6,755,657

Japan

Consolidated

2015

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

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

Millions of yen

2015

2014

¥131,374¥126,032$1,094,791

Asia (except for China), Others

27,96832,674233,050

China

14,815

13,368

123,467

Europe

624

414

5,203

America

172

131

1,437

¥174,953¥172,619$1,457,948

Japan

Consolidated

2015

3. Information on impairment loss of fixed assets by each reporting segment
Information on impairment loss of fixed assets by each reporting segment for the year ended March 31, 2015 and 2014 were as follows:
Thousands of
U.S. dollars(Note 3)

Millions of yen

2015

2015

2014

¥    7¥—$    62

373

—

3,112

Power Electronics

1

—

16

Electronic Devices

2,265

—

18,881

Power and Social Infrastructure
Industrial Infrastructure

Others

184

—

1,513

Total

¥2,830¥—$23,584

Note: Information for the year ended March 31, 2014 was not disclosed because it didn’t have significant impact on the consolidated financial statements.

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 201536

Note 22. Information on Transactions with Related Parties
For the year ended March 31, 2015
None

Note 23. Business Combinations
For the year ended March 31, 2015, business combinations have not been disclosed because they do not have significant impact on the
consolidated financial statements.

Note 24. 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 for removing asbestos from company-owned buildings upon
their dismantlement and the obligations to restore head offices, sales offices and other premises to their original condition upon terminationof 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 4 and 49 years and use a discount rate equivalent to the interest rate of government bonds corresponding to the use period (0.2% 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, 2015 and 2014 were as follows:
Thousands of
U.S. dollars(Note 3)

Millions of yen

2015

2015

2014

¥2,204¥2,370

Increase due to acquisition of property, plant and equipment

—

49

—

Adjustment due to passage of time

8

8

69

Balance at the beginning of the year

(55)

(223)

(462)

¥2,157¥2,204$17,975

Decrease due to fulfillment of obligations
Balance at the end of the year

$18,368

Note 25. Amounts Per ShareInformation of amounts per share as of March 31, 2015 and 2014 and for the years then ended were as follows:
U.S. dollars(Note 3)

Yen

2015

2014

Net assets per share¥406.39¥317.962015$3.387

Net income per share

39.16

27.41

0.326

Diluted net income per share

39.13

27.39

0.326

(Changes in accounting policies)
As described in the “Changes in Accounting Policies” in “h. Retirement Benefits, Note 2. Summary of Significant Accounting Policies,” theCompany has applied transitional treatment as stipulated in paragraph 37 of “Accounting Standard for Retirement Benefits.”
As a result, net assets per share as of March 31, 2015 decreased by ¥22.43 ($0.19), net income and diluted net income per share for theyear ended March 31, 2015 increased by ¥1.93 ($0.02), respectively.

Note 26. Subsequent Events
For the year ended March 31, 2015
None

37 Fuji Electric Report 2015

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, 2015, 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, 2015, 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 24, 2015
Tokyo, Japan

Fuji Electric Report 201538

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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