(Translation)
This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between
this translated document and the Japanese original, the original shall prevail.

Annual Securities Report
For the 202nd Fiscal Year
(April 1, 2023 through March 31, 2024)

Furukawa Electric Co., Ltd.

1The 202nd Fiscal Year (April 1, 2023 through March 31, 2024)

Annual Securities Report
1. This is an English translation of the Annual Securities Report (Yukashoken Hokokusho), which was produced basedon Article 24, Paragraph 1 of the Financial Instruments and Exchange Act of Japan and filed via the Electronic
Disclosure for Investors’ NETwork (EDINET) system as set forth in Article 27-30-2 of the same act. The translation
includes a table of contents and pagination that are not included in the electronic filing.
2. Appended to the back of this document are English translations of the independent auditors’ report attached to theAnnual Securities Report when it was filed using the aforementioned method, and the internal control report andthe confirmation note that were filed at the same time as the Annual Securities Report.

2

Table of Contents
Annual Securities Report for the 202nd Fiscal Year Ended March 31, 2024

Page

Cover ......................................................................................................................................................................................................... 2
Section 1 Company Information................................................................................................................................................................. 3
Item 1. Overview of Company ................................................................................................................................................................... 3
1. Key Financial Data ......................................................................................................................................................................... 3
2. History ........................................................................................................................................................................................... 5
3. Description of Business .................................................................................................................................................................. 6
4. Subsidiaries and Other Affiliated Entities...................................................................................................................................... 8
5. Employees .................................................................................................................................................................................... 12
Item 2. Overview of Business .................................................................................................................................................................. 14
1. Management Policy, Business Environment, and Issues to Be Addressed .................................................................................. 14
2. Approach and Initiatives toward Sustainability ........................................................................................................................... 20
3. Business Risks ............................................................................................................................................................................. 46
4. Management’s Discussion and Analysis of Financial Position, Operating Results and Cash Flows ........................................... 52
5. Material Contracts, etc. ................................................................................................................................................................ 56
6. Research and Development Activities ......................................................................................................................................... 56
Item 3. Information about Facilities ......................................................................................................................................................... 59
1. Overview of Capital Expenditures ............................................................................................................................................... 59
2. Major Facilities ............................................................................................................................................................................ 60
3. Planned Addition, Retirement, and Other Changes of Facilities .................................................................................................. 62
Item 4. Information about Reporting Company ....................................................................................................................................... 63
1. Company’s Shares, etc................................................................................................................................................................. 63
2. Acquisition and Disposal of Treasury Shares .............................................................................................................................. 68
3. Dividend Policy ........................................................................................................................................................................... 69
4. Corporate Governance ................................................................................................................................................................. 70
Item 5. Financial Information ................................................................................................................................................................. 123
1. Consolidated Financial Statements, etc. .................................................................................................................................... 124
2. Non-consolidated Financial Statements, etc. ............................................................................................................................. 178
Item 6. Outline of Share-related Administration of Reporting Company................................................................................................ 192
Item 7. Reference Information of Reporting Company .......................................................................................................................... 193
1. Information about Parent of Reporting Company ...................................................................................................................... 193
2. Other Reference Information ..................................................................................................................................................... 193
Section 2 Information about Reporting Company’s Guarantor, etc......................................................................................................... 194
Independent Auditor’s Report
Internal Control Report
Confirmation Note1

CoverDocument title

Annual Securities Report

Clause of stipulation

Article 24, Paragraph 1 of the Financial Instruments and Exchange Act

Place of filing

Director, Kanto Local Finance Bureau

Filing dateJune 24, 2024

Fiscal year

The 202nd fiscal year (April 1, 2023 through March 31, 2024)

Company name

Furukawa Denki Kogyo Kabushiki Kaisha

Company name in English

Furukawa Electric Co., Ltd.

Title and name of representative

Hideya Moridaira, President

Address of registered headquarters

2-6-4 Otemachi Chiyoda-ku, Tokyo

Telephone number+81-3-6281-8500

Name of contact person

Shu Sano, Manager, Corporate Accounting Section, Finance & Accounting
Department, Finance & Accounting Division

Nearest place of contact

2-6-4 Otemachi Chiyoda-ku, Tokyo

Telephone number+81-3-6281-8500

Name of contact person

Shu Sano, Manager, Corporate Accounting Section, Finance & Accounting
Department, Finance & Accounting Division

Place for public inspection

Tokyo Stock Exchange, Inc.
(2-1 Nihonbashi Kabutocho, Chuo-ku, Tokyo)

2Section 1 Company Information
Item 1. Overview of Company
1. Key Financial Data
(1) Consolidated financial data
Fiscal year

198th

199th

200th

201st

202nd

Year ended March 31,

2020

2021

2022

2023

2024

Net sales(million yen)

914,439

811,600

930,496

1,066,326

1,056,528

Ordinary profit(million yen)

22,771

5,189

19,666

17,258

10,267

Profit attributable to owners ofparent(million yen)

17,63910,001

10,093

15,894

6,508

Comprehensive income (loss)(million yen)

(2,060)27,941

27,76027,27434,989Net assets(million yen)

273,030

291,617314,062

329,095

358,038

Total assets(million yen)794,616

832,044935,876

933,469

985,007

Net assets per share(yen)

3,408.86

3,686.36

3,967.08

4,285.15

4,656.93

Basic earnings per share(yen)

250.25141.88143.40225.8092.40

Diluted earnings per share

(yen)

–

–

–

–

–

Equity capital ratio

(%)

30.2

31.2

29.8

32.3

33.3

Return on equity (ROE)

(%)

7.23

4.00

3.74

5.46

2.07

Price-earnings ratio(times)

7.85

20.93

15.17

10.90

35.03

(million yen)

41,942(479)(13,269)

36,51631,896(million yen)

(33,119)(1,908)(40,074)(21,677)(24,794)(million yen)(171)

35,14035,020(34,475)(9,322)(million yen)

55,05587,18967,632

51,95053,098(persons)

50,232

48,44950,86751,31452,757

Net cash provided by (used in)operating activities
Net cash provided by (used in)investing activities
Net cash provided by (used in)financing activities
Cash and cash equivalents
at end of period
Number of employees

Notes: 1. The figures of diluted earnings per share are not presented because the Company had no potential shares.
2. The Company has established the Board Benefit Trust (BBT) for the stock remuneration plan for Directors, etc. Accordingly, for the purposeof determining net assets per share and basic earnings per share, the number of treasury shares at the end of the period and the number oftreasury shares to be deducted in calculating the average number of shares outstanding during the period include the Company’s shares heldby the BBT trust account.
3. The Group has applied the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020), etc. from the beginningof the 200th fiscal year. Accordingly, the key financial data for the 200th fiscal year and thereafter are those after applying the said accounting
standard, etc.
4. UACJ Corporation, an equity-method associate of the Company, has adopted International Financial Reporting Standards (IFRS) in placeof the previously adopted Japanese GAAP from the beginning of the 202nd fiscal year. Accordingly, the key financial data for the 201st
fiscal year are those after the retrospective application, reflecting the change in accounting policy.
The cumulative effect on the 200th fiscal year and before has been reflected on the beginning balance of net assets for the 201st fiscal
year.

3

(2) Financial data of reporting company (non-consolidated)
Fiscal year

198th

199th

200th

201st

202nd

Year ended March 31,

2020

2021

2022

2023

2024

Net sales(million yen)

440,675

392,616

292,424

305,835

296,766

Ordinary profit(million yen)

11,991

5,591

6,461

8,686

330

Profit (loss)(million yen)

18,177

24,333(525)

25,235

1,913

Share capital(million yen)

69,39569,39569,39569,39569,395(shares)

70,666,917

70,666,917

70,666,917

70,666,917

70,666,917

Net assets(million yen)

167,901

190,070

183,515

201,845

199,212

Total assets(million yen)473,935

570,121608,376593,768

632,447

Net assets per share(yen)

2,381.45

2,695.56

2,606.69

2,866.61

2,826.62

Dividend per share[Of which, interim dividend
per share]

(yen)

85.00

60.00

60.00

80.00

60.00

(yen)

[–]

[–]

[–]

[–]

[–]

Basic earnings (loss) per share(yen)

257.82345.10(7.47)

358.4027.15

Diluted earnings per share

(yen)

–

–

–

–

–

Equity capital ratio

(%)

35.4

33.3

30.2

34.0

31.5

Return on equity (ROE)

(%)

10.95

13.59

(0.28)

13.10

0.95

Price-earnings ratio(times)

7.62

8.61

–

6.87

119.22

Dividend payout ratio

(%)

33.0

17.4

–

22.3

221.0

Number of employees(persons)

3,925

4,084

4,201

4,267

4,335

Total shareholder return

(%)

73.5

111.6

85.3

98.4

128.3

[Benchmark: TOPIX Total
Return Index](%)[88.2][122.8][122.3][125.9][173.9]Highest share price

(yen)

3,305

3,115

3,110

2,668

3,290

Lowest share price

(yen)

1,620

1,746

2,050

2,033

2,134

Total number of shares issued

Notes: 1. The figures of diluted earnings per share, price-earnings ratio, and dividend payout ratio are not presented for the fiscal years for which loss
was reported or the Company had no potential shares.
2. The Company has established the Board Benefit Trust (BBT) for the stock remuneration plan for Directors, etc. Accordingly, for the purposeof determining net assets per share and basic earnings (loss) per share, the number of treasury shares at the end of the period and the numberof treasury shares to be deducted in calculating the average number of shares outstanding during the period include the Company’s shares
held by the BBT trust account.
3. The Company has applied the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020), etc. from the
beginning of the 200th fiscal year. Accordingly, the key financial data for the 200th fiscal year and thereafter are those after applying thesaid accounting standard, etc.
4. The highest and lowest share prices are those on the First Section of the Tokyo Stock Exchange on or before April 3, 2022 and on the Prime
Market of the Tokyo Stock Exchange on and after April 4, 2022.

4

2. History
Month and year
June 1896

Event
Established as Yokohama Electric Cable Manufacturing Company.

April 1920

May 1949

Acquires Nikko Copper Electrolyzing Refinery (currently Nikko Works of the Company) from Furukawa
Kogyo Co., Ltd. (currently Furukawa Co., Ltd.) and the Company is renamed as current Furukawa ElectricCo., Ltd.
Acquires Kyushu Electric Cable Manufacturing Company located in Moji-shi (currently Moji-ku, Kitakyushushi), Fukuoka Prefecture, and renames its plant as Kyushu Cable Works (formerly Kyushu Works of theCompany and currently Kyushu Plant of Furukawa Electric Industrial Cable Co., Ltd.).
Establishes Osaka Copper Works (formerly Osaka Works and later the copper tube division of the Company)in Amagasaki-shi, Hyogo Prefecture.
Lists the Company’s shares on the Tokyo Stock Exchange.

September 1950

Establishes The Furukawa Battery Co., Ltd. to spin off the battery division.

September 1958

Establishes Hiratsuka Cable Works (currently Hiratsuka Works of the Company) in Hiratsuka-shi, Kanagawa
Prefecture.
Establishes Chiba Cable Works (currently Chiba Works of the Company) in Ichihara-cho, Ichihara-gun(currently Ichihara-shi), Chiba Prefecture.
Establishes Mie Plant (currently Mie Works of the Company) in Kameyama-shi, Mie Prefecture.
Lists shares of The Furukawa Battery Co., Ltd. on the First Section* of the Tokyo Stock Exchange.
(*The shares of The Furukawa Battery Co., Ltd. are currently listed on the Prime Market.)Merges Furukawa Metal Industries Co., Ltd. to ensure future growth as a comprehensive nonferrous metal
manufacturer.
Establishes Yokohama R&D Laboratory in Nishi-ku, Yokohama-shi, Kanagawa Prefecture.

December 1921
November 1938

March 1961
March 1971
August 1972
April 1981
February 1987
October 1993
November 2001
October 2003
January 2005
December 2005
February 2007
March 2012
October 2013

April 2015
October 2016
December 2018
April 2020
June 2020
October 2020
April 2022
December 2022

Merges Furukawa Aluminium Industries Co., Ltd. and Fukui Rolling Co., Ltd. to strengthen and expand thebusiness foundation by integrating manufacturing and selling functions of the light metal business.
Acquires the optical fiber cable division (currently OFS Fitel, LLC) of Lucent Technologies Inc. (back then).
Spins off the light metals company to have Sky Aluminium Co., Ltd. succeed to it and changes the trade namefrom Sky Aluminium Co. Ltd. to Furukawa-Sky Aluminium Corporation (currently UACJ Corporation).
Transfers the power cable business to VISCAS Corporation.
Lists shares of Furukawa-Sky Aluminium Corporation (currently UACJ Corporation) on the First Section* of
the Tokyo Stock Exchange.
(*The shares of UACJ Corporation are currently listed on the Prime Market.)
Lists shares of FCM Co., Ltd. on the Hercules Market of the Osaka Stock Exchange.
Subscribes for new shares of TOTOKU ELECTRIC CO., LTD. (currently TOTOKU INC.) issued through thethird-party allotment and makes it a consolidated subsidiary of the Company.
Furukawa-Sky Aluminium Corporation merges Sumitomo Light Metal Industries, Ltd. and is renamed as
UACJ Corporation (listed on the First Section* of the Tokyo Stock Exchange). The merger results in UACJ
Corporation becoming an equity-method associate of the Company.
(*The shares of UACJ Corporation are currently listed on the Prime Market.)Takes over the overseas power cable business from VISCAS Corporation, an equity-method associate of theCompany.
Takes over the domestic power cable business from VISCAS Corporation, an equity-method associate of theCompany.
Transfers shares of FCM Co., Ltd., resulting in FCM Co., Ltd. being excluded from the scope of consolidationof the Company.
Spins off the copper tube division to have Daishin P&T Corporation, a newly established, wholly owned
subsidiary of the Company, to succeed to it.
Transfers shares of Daishin P&T Corporation, resulting in Daishin P&T Corporation being excluded from thescope of consolidation of the Company.
Restructures a part of the wire business by having Essex Furukawa Magnet Wire LLC succeed to the
manufacturing operations of heavy magnet wires and others and making it an equity-method associate of theCompany.
Moves from the First Section to the Prime Market, following the restructuring of the Tokyo Stock Exchange
market segments.
Transfers shares of TOTOKU ELECTRIC CO., LTD. (currently TOTOKU INC.), resulting in TOTOKUELECTRIC CO., LTD. being excluded from the scope of consolidation of the Company.

Note: As a result of the transfer of shares of Essex Furukawa Magnet Wire LLC held by a wholly owned subsidiary of the Company on April 30,
2024, the company was excluded from the scope of consolidation of the Company.

53. Description of Business
Furukawa Electric Co., Ltd. and its subsidiaries and associates (“Furukawa Electric Group”) is mainly engaged in manufacture andsale of products based on development and application of technologies cultivated in the Infrastructure, Electronics & Automotive
Systems, and Functional Products businesses, as well as in business activities such as research and other services related to eachbusiness.
Furukawa Electric Group’s lines of business, its subsidiaries and associates involved in each of these businesses, and the relationshipwith the reportable segments as of the end of the fiscal year ended March 31, 2024 (the “current fiscal year” or “FY2023”) aresummarized as follows:
Segment nameInfrastructure

Companies involved
The Company, OFS Fitel, LLC, Furukawa Electric LatAm S.A., Furukawa ElectricIndustrial Cable Co., Ltd., SHENYANG FURUKAWA CABLE CO., LTD., and others
are engaged in manufacture and sale.

Electronics & Automotive Systems

The Company, The Furukawa Battery Co., Ltd., Furukawa Automotive Systems Inc..,
Furukawa Magnet Wire Co., Ltd., and others are engaged in manufacture and sale.

Functional Products

The Company, Trocellen GmbH, Furukawa Electric Copper Foil Taiwan Co., Ltd.,
Furukawa Circuit Foil Taiwan Corporation, and others are engaged in manufacture andsale.

Services and Development, etc.

The Company, Furukawa Nikko Power Generation Inc., and others are engaged mainly
in various service businesses and research and development of new products.

Note that sales companies are classified into relevant segments based on the type of products they mainly handle. The following
diagram summarizes the structure of Furukawa Electric Group’s businesses as shown above.

6

Business Structure Diagram

Customers

Furukawa Sangyo Kaisha, Ltd.
Sales
Furukawa Elecom Co., Ltd.
subsidiaries Furukawa Electric Europe Ltd. and others

Finished goods, etc.

Finished goods, etc.

Finished goods

Subsidiaries and Associates

Businesssegments

Contract
processing

Furukawa Electric Co., Ltd.

Electronics &Automotive Systems

Materials
Finished goods

Contract
processing

Functional
Products

Materials
Finished goods
Contract
processing

Services andDevelopment, etc.

Provision ofservices, etc.

OFS Fitel, LLC; Furukawa Electric LatAm S.A.;
Miharu Communications Inc.; Okano Cable Co., Ltd.; Shoden
Seiwa Co., Ltd.; Furukawa FITEL Optical Device Co., Ltd.;FURUKAWA NETWORK SOLUTION CORPORATION;
Riken Electric Wire Co., Ltd.; Furukawa Electric Industrial
Cable Co., Ltd.; Furukawa Electric Power Systems Co., Ltd.;KANZACC CO., LTD., Ltd.; SHENYANG FURUKAWACABLE CO., LTD., and others

The Furukawa Battery Co., Ltd.; FURUKAWA AUTOMOTIVESYSTEMS INC.; American Furukawa Inc.; Furukawa Electric(Shenzhen) Co., Ltd.; Furukawa Automotive Parts (Vietnam)Inc.; PT Tembaga Mulia Semanan Tbk; Furukawa Magnet Wire
Co., Ltd.; TAIWAN FURUKAWA MAGNET WIRE CO.,
LTD.; Furukawa Precision Engineering Co., Ltd.; FURUKAWATECHNO MATERIAL CO., LTD.; Furukawa Precision(Thailand) Co., Ltd. and others

Furukawa UACJ Memory Disk Co., Ltd.; Furukawa Industrial
Plastics Co., Ltd.; Foam Kasei Co., Ltd.; Trocellen GmbH;
Furukawa Electric Copper Foil Taiwan Co., Ltd.; Furukawa
Circuit Foil Taiwan Corporation; and others

Furukawa Electric Institute of Technology Ltd.; Furukawa
Electric Business & Life Support Inc.; Furukawa Nikko Power
Generation Inc.; Furukawa Electric Advanced Engineering Co.,Ltd.

7

Provision of services, etc.

Infrastructure

Materials
Finished goods

4. Subsidiaries and Other Affiliated Entities

Company name

Address

Share capitalor investments
in capital(millions ofyen, unlessotherwise
stated)As of March 31, 2024

Main line ofbusiness(Consolidated subsidiaries)
The Furukawa Battery Co.,
Ltd.
Note 4

Hodogaya-ku,
Yokohama

Electronics &1,640 Automotive
Systems

Ratio of voting
rights held (orowned) (%)

The Company supplies themwith some of the raw materials
58.1 and purchases some of their(0.8) products. The Company alsoleases real estate and facilities.
Officers serve concurrently.

Furukawa Sangyo Kaisha,
Ltd.
Note 7

Minato-ku, Tokyo

700

Sales
subsidiary

100.0

Okano Cable Co., Ltd.
Note 5

Yamato, Kanagawa
Pref.

489 Infrastructure

49.2

Furukawa Electric Industrial
Cable Co., Ltd.
Arakawa-ku, Tokyo
Note 7450 Infrastructure

100.0

FURUKAWA ELECTRIC
POWER SYSTEMS CO.,LTD.
Note 7

Aoba-ku, Yokohama

450 Infrastructure

100.0

KANZACC CO., LTD.
Note 7Chuo-ku, Osaka

310 Infrastructure

100.0

FURUKAWA
INDUSTRIAL PLASTICS
CO., LTD.
Note 7.

Mihama-ku, Chiba

300

Functional
Products

100.0

FURUKAWA TECHNO
MATERIAL CO., LTD.
Note 7

Hiratsuka,
Kanagawa Pref.

Electronics &300 Automotive
Systems

100.0

8

Description of relationship

They sell the Company’s
products and purchase some of
the raw materials from theCompany. The Company alsoleases real estate. Officers serve
concurrently. The Company
lends and borrows funds (CMS).
The Company supplies themwith some of the raw materials
and sells some of their products.
Officers serve concurrently. The
Company borrows funds.
The Company supplies themwith some of the raw materials
and purchases and sells some of
their products. The Company
also leases real estate andfacilities. Officers serve
concurrently. The Company
lends funds (CMS).
The Company supplies themwith some of the raw materials
and purchases and sells some of
their products. The Company
also leases real estate. Officers
serve concurrently. The
Company lends and borrows
funds (CMS).
The Company supplies themwith some of the raw materials
and purchases some of theirproducts. The Company alsoleases real estate and facilities.
Officers serve concurrently. The
Company lends funds (CMS).
The Company supplies themwith some of the raw materials
and purchases some of theirproducts. The Company alsoleases real estate. Officers serve
concurrently. The Company
lends funds (CMS).
The Company supplies themwith some of the raw materials
and sells their products. Officers
serve concurrently. The
Company lends funds (CMS).

Company name

Address

Share capital(millions ofyen, unlessotherwise
stated)Main line ofbusiness

Furukawa Nikko Power
Generation Inc.
Note 7

Nikko, Tochigi Pref.

Services and
300 Developments,
etc.

FURUKAWA NETWORKSOLUTIONCORPORATION
Note 7

Hiratsuka,
Kanagawa Pref.

150 Infrastructure

Furukawa Automotive
Systems Inc.
Notes 3 and 7

Inugami, Shiga Pref.

Electronics &100 Automotive
Systems

Ratio ofvoting rights
held (orowned) (%)

The Company purchases someof their electricity. The
100.0 Company also leases real estate.
Officers serve concurrently. The
Company lends and borrows
funds (CMS).
The Company procures andmanufactures on consignmentand sells their products. The
100.0 Company also leases realestate. Officers serve
concurrently. The Company
borrows funds (CMS).
The Company supplies themwith some of the raw materials
and sells their products. The
100.0 Company also leases realestate. Officers serve
concurrently. The Company
lends funds (CMS).

Furukawa FITEL Optical
Device Co., Ltd.
Note 7

Ichihara, Chiba Pref.

100 Infrastructure

70.6

Furukawa Precision
Engineering Co., Ltd.
Note 7

Nikko, Tochigi Pref.

Electronics &100 Automotive
Systems

100.0

Riken Electric Wire Co.,
Ltd.
Note 7Chuo-ku, Tokyo

100 Infrastructure

100.0

Furukawa Elecom Co., Ltd.
Note 7

Chiyoda-ku, Tokyo

98

Sales
subsidiary

100.0

Furukawa Magnet Wire Co.,Ltd.
Chiyoda-ku, Tokyo
Note 7

Miharu Communications
Inc.
Note 7

Kamakura,
Kanagawa Pref.

Description of relationship

The Company supplies themwith some of the raw materials
and sells their products. The
Company also leases real estate.
Officers serve concurrently. The
Company lends funds (CMS).
The Company supplies themwith some of the raw materials
and sells their products. The
Company also leases and rents
real estate. Officers serve
concurrently. The Company
lends funds (CMS).
The Company supplies themwith some of the raw materials
and sells their products. The
Company also leases real estate.
Officers serve concurrently. The
Company lends and borrows
funds (CMS).
They sell the Company’s
products. The Company alsoleases real estate. Officers serve
concurrently. The Company
borrows funds (CMS).

Electronics &96 Automotive
Systems

The Company supplies themwith some of the raw materials
and sells their products. The
100.0 Company also leases realestate. Officers serve
concurrently. The Company
lends funds (CMS).

90 Infrastructure

The Company supplies themwith some of the raw materials
and sells their products. The
100.0 Company also leases real estate.
Officers serve concurrently. The
Company lends and borrows
funds (CMS).

9

Company name

Address

Share capital(millions ofyen, unlessotherwise
stated)Main line ofbusiness

Ratio ofvoting rights
held (orowned) (%)

Description of relationship

OFS Fitel, LLC
Note 3

USA

USD 362
Infrastructure
million

The Company supplies themwith some of the raw materials
and purchases and sells some of
100.0
their products. Officers serve
concurrently. The Company
lends funds.

Furukawa Electric LatAm
S.A.
Note 3

Brazil

BRL 149
Infrastructure
million

The Company supplies them
100.0 with some of the raw materials.
Officers serve concurrently.

Electronics &USD 109
Automotive
million
Systems

They sell the Company’s
subsidiary’s products. The
Company’s subsidiary supplies
100.0
them with some of the raw(0.1)
materials. Officers serve
concurrently. The Company
lends funds.

CNY 768
Infrastructure
million

The Company supplies themwith some of the raw materials
and sells some of their
100.0
products. Officers serve
concurrently. The Company
lends funds.

American Furukawa, Inc.
Note 3USA

SHENYANG FURUKAWACABLE CO., LTD.
China
Note 3
Furukawa Electric Copper
Foil Taiwan Co., Ltd.

TaiwanNWD 1,555 Functional
million Products

TaiwanNWD 1,475 Functional
million Products

The Company sells some of
100.0 their products. Officers serve
concurrently.

USD 3 Sales
million subsidiary

The Company’s subsidiary
supplies them with some of the81.9 raw materials. Officers serve
concurrently. The Company
lends funds.
They sell the Company’s
100.0 products. Officers serve
concurrently.

ThailandElectronics &THB 169
Automotive
million
Systems

The Company supplies them
100.0with some of the raw materials.
(50.0)
Officers serve concurrently.

Thailand

THB 104
Infrastructure
million

The Company’s subsidiary
91.8 supplies them with some of the(42.8) raw materials. Officers serve
concurrently.

Furukawa Automotive Parts
Vietnam(Vietnam) Inc.

Electronics &USD 18Automotive
million
Systems

The Company’s subsidiary
supplies them with some of the
100.0
raw materials. Officers serve(100.0)concurrently. The Company
lends funds.

P.T. Tembaga Mulia
Semanan, Tbk
Note 5Indonesia

Electronics &USD 12
Automotive
million
Systems

The Company’s subsidiary
supplies them with some of the42.4
raw materials. Officers serve
concurrently.

Trocellen GmbHGermany

EUR 8 Functional
million Products

100.0

Indonesia

Electronics &IDR 899,732
Automotive
million
Systems

Furukawa Circuit Foil
Taiwan Corporation

Furukawa Electric Singapore
Singapore
Pte. Ltd.
Furukawa Precision(Thailand) Co., Ltd.
Thai Furukawa Unicomm
Engineering Co., Ltd.

P.T. Furukawa Indomobil
Battery Manufacturing
Note 379 other companies

10

Officers serve concurrently.
The Company lends funds.

The Company’s subsidiary
51.0 supplies them with some of the
raw materials. The Company’s(51.0) subsidiary purchases some of
the raw materials from them.

Company name

Address

Share capital(millions ofyen, unlessotherwise
stated)Main line ofbusiness

Ratio ofvoting rights
held (orowned) (%)

Description of relationship(Equity-method associates)
FUJI FURUKAWAENGINEERING &CONSTRUCTION CO.
LTD.
Note 4

Kawasaki,Kanagawa Pref.

1,970 Infrastructure

They undertake construction
20.2 work from the Company.
Officers serve concurrently.

UACJ Corporation
Note 4

Chiyoda-ku, Tokyo

Services and52,276 Developments,
etc.

The Company supplies themwith some of the raw materials
and purchases some of the raw
materials from them. They
25.0
entrust a part of their businessto the Company. The Company
also leases and rents real estateand facilities.

YAMAKIN (JAPAN) CO.,LTD.
Note 4

Chiyoda-ku, Tokyo

Electronics &600 Automotive
Systems

The Company purchases some25.0 of the raw materials. They sell
the Company’s products.

VISCAS Corporation

Ota-ku, Tokyo

10 Infrastructure

50.0

Asia Vital Components Co.,Ltd.
TaiwanNote 6NWD 3,833 Functional
million Products

Officers serve concurrently.
The Company lends funds.

15.0
Officers serve concurrently.
(2.5)

9 other companies
Notes: 1. The “Main line of business” column shows the segment names.
2. The figure in parentheses in the “Ratio of voting rights held (or owned) (%)” column shows the ratio of the voting rights the Company
holds indirectly, which is included in the figure without parentheses.
3. Furukawa Automotive Systems Inc...; OFS Fitel, LLC; Furukawa Electric LatAm S.A.; American Furukawa, Inc.; SHENYANGFURUKAWA CABLE CO., LTD.; and P.T. Furukawa Indomobil Battery Manufacturing fall under specified subsidiaries defined in the
Cabinet Office Order on Disclosure of Corporate Affairs.
4. The Furukawa Battery Co., Ltd.; FUJI FURUKAWA ENGINEERING & CONSTRUCTION CO., LTD.; UACJ Corporation; andYAMAKIN (JAPAN) CO., LTD. have submitted Securities Registration Statements or Annual Securities Reports.
5. Okano Cable Co., Ltd. and P.T. Tembaga Mulia Semanan, Tbk are considered as subsidiaries as they are substantially controlled by theCompany, although the Company’s equity share is no more than 50/100.
6. Asia Vital Components Co., Ltd. is considered as an associate as it is substantially controlled by the Company, although the Company’s
equity share is less than 20/100.
7. The Company and some of its subsidiaries and associates have adopted a cash management system (CMS) to ensure efficient use of funds.

115. Employees(1) Information about the GroupAs of March 31, 2024

Segment name

Number of employees (persons)

Infrastructure

8,982Electronics & Automotive Systems

39,240Functional Products

2,333Services and Development, etc.

2,202

Total

52,757

Notes: 1. Number of employees does not include the number of temporary employees and loan employees assigned to companies outside
Furukawa Electric Group.
2. Number of employees in the Services and Developments, etc. Business segment includes the number of personnel engaged in corporate
operations such as the Head Office departments of the Company.

(2) Information about reporting company (non-consolidated)

As of March 31, 2024

Number of employees (persons)Average age

Average length of service

Average annual salary (yen)4,335

43 years and 8 months

19 years and 7 months

6,783,723

Segment name

Number of employees (persons)

Infrastructure

1,516Electronics & Automotive Systems

515

Functional Products

735

Services and Development, etc.

1,569

Total

4,335

Notes: 1. Number of employees does not include the number of temporary employees and loan employees.
2. Average annual salary includes bonuses and extra wages paid for unscheduled work.
3. Number of employees in the Services and Developments, etc. Business segment includes the number of personnel engaged incorporate operations such as the Head Office departments of the Company.

(3) Labor unions
Furukawa Electric Group has labor unions, including Furukawa Electric Labor Union, which belong to the Japan Federation ofElectric Wire Workers’ Unions (affiliated with the Japanese Trade Union Confederation) and other organizations. There are no
special matters to be noted as to the relationship with the labor unions.

12(4) Ratio of female workers in managerial positions, ratio of male workers taking childcare leave, and differences in wages
between male and female workers(i) Reporting company
Ratio of female
Ratio of maleworkers inmanagerial positions workers taking
childcare leave (%)(%)(Note 2)
(Note 1)
5.4

Current fiscal year
Differences in wages between male and female workers (%)(Note 1)
All workers

103.0

Regular employment
workers

Part-time and fixedterm workers

70.8

57.9

70.6

Notes: 1. The calculation is based on the provisions of the “Act on the Promotion of Women’s Active Engagement in Professional Life” (ActNo. 64 of 2015).
2. The calculation was made according to the method for the percentage of workers taking childcare leave, etc. as stipulated in Article
71-4, Item (i) of the “Ordinance for Enforcement of the Act on Childcare Leave, Caregiver Leave, and Other Measures for the Welfareof Workers Caring for Children or Other Family Members” (Ordinance of the Ministry of Labor No. 25 of 1991), based on theprovisions of the “Act on Childcare Leave, Caregiver Leave, and Other Measures for the Welfare of Workers Caring for Children or
Other Family Members” (Act No. 76 of 1991).

(ii) Consolidated subsidiaries

Company nameCurrent fiscal year
Differences in wages between male and female workers
Ratio of female
Ratio of male(%) (Note 1)
workers inworkers taking
managerial positions
Regularchildcare leave (%)
Part-time and(%)
All workers
employment(Note 2)
fixed-term workers(Note 1)
workers

The Furukawa Battery Co.,Ltd.
Furukawa Automotive
Systems Inc..
Furukawa Electric Power
Systems Co., Ltd.
Furukawa ElectricBusiness & Life Support
Inc.

4.5

18.5

79.9

83.5

56.0

2.2

71.0

59.9

68.9

58.3

4.5

66.6

81.7

82.1

81.0

28.6

–

74.6

63.8

67.8

Notes: 1. The calculation is based on the provisions of the “Act on the Promotion of Women’s Active Engagement in Professional Life” (ActNo. 64 of 2015).
2. The calculation was made according to the method for the percentage of workers taking childcare leave, etc. as stipulated in Article 714, Item (i) of the “Ordinance for Enforcement of the Act on Childcare Leave, Caregiver Leave, and Other Measures for the Welfare ofWorkers Caring for Children or Other Family Members” (Ordinance of the Ministry of Labor No. 25 of 1991), based on the provisionsof the “Act on Childcare Leave, Caregiver Leave, and Other Measures for the Welfare of Workers Caring for Children or Other Family
Members” (Act No. 76 of 1991).

(iii) Reporting company and consolidated subsidiaries group in Japan
Current fiscal year
Differences in wages between male and female workers (%)
Ratio of female
Ratio of male
(Note 1)
workers in managerial workers taking
Regularpositions (%)
childcare leave (%)
Part-time andAllworkers
employment(Note 1)
(Note 2)
fixed-term workers
workers
4.4

59.4

64.5

70.7

62.4

Notes: 1. The calculation is based on the provisions of the “Act on the Promotion of Women’s Active Engagement in Professional Life” (ActNo. 64 of 2015).
2. The calculation was made according to the method for the percentage of workers taking childcare leave, etc. as stipulated in Article 714, Item (i) of the “Ordinance for Enforcement of the Act on Childcare Leave, Caregiver Leave, and Other Measures for the Welfare ofWorkers Caring for Children or Other Family Members” (Ordinance of the Ministry of Labor No. 25 of 1991), based on the provisionsof the “Act on Childcare Leave, Caregiver Leave, and Other Measures for the Welfare of Workers Caring for Children or Other Family
Members” (Act No. 76 of 1991).

13

Item 2. Overview of Business
1. Management Policy, Business Environment, and Issues to Be Addressed

The forward-looking statements contained in the descriptions below are based on Furukawa Electric Group’s estimates andassumptions made as of the end of the current fiscal year.
(1) Basic management policy[Structure of Furukawa Electric Group Philosophy]
We have revised the structure of the Group’s Corporate Philosophy and established a Purpose (raison dʼêtre) statement that serves as theaxis of management decision-making, that each and every employee understands and empathizes with, and that leads to pride in working
at the Group.
The Furukawa Electric Group Purpose (hereinafter, the “Purpose”) is a statement of the Group’s raison dʼêtre, which has been establishedto ensure that the Group is recognized by its diverse stakeholders as a corporate group that contributes to creating a truly prosperous andsustainable society, and to ensure that its employees continue to take on challenges with pride. We have defined the values that we wish
to particularly emphasize and enhance in order to achieve sustainable growth as our “Core Values.”
The Furukawa Electric Group Vision 2030 defines the visionary outlook of the Group, with the time frame set to 2030, based on ourconception of broad aspects of the future society and the Purpose. The 2025 Medium-term Management Plan defines the vision for
FY2025, as the halfway point, by backcasting from the ideal state defined in the Vision 2030.
The Furukawa Electric Group CSR Code of Conduct sets forth the basic code of conduct for the group’s officers and employees fromthe perspective of the company’s social responsibility when conducting corporate activities based on the Purpose and the Core Values.

14◼ The Furukawa Electric Group Purpose**The Furukawa Electric Group Purpose was established in March 2024 and was put into effect on April 19, 2024.
◼ Core Values
We have set the values we wish to particularly emphasize and enhance even further for the achievement of Furukawa Electric Group
Philosophy and the sustainable growth of Furukawa Electric Group, as the Core Values, which comprised of five integral elementsof Integrity, Innovation, Addressing Reality, Ownership and Speed, and Collaboration.

15

◼ Furukawa Electric Group Vision 2030
Based on the Furukawa Electric Group Purpose, we have formulated Furukawa Electric Group Vision 2030 (hereinafter, the “Vision2030”), which defines its ideal state in 2030 and specifies target timeline and scope, with an eye to solving the social issues outlinedin the Sustainable Development Goals (SDGs*) adopted by the United Nations.
Under the Vision 2030, Furukawa Electric Group aims at addressing social issues in each or in combination of the following areas:
information, energy and mobility. Furthermore, in new areas as well, the Group will work on solving social issues through creating
new businesses.

In order to build a sustainable world and make people’s life safe, peaceful and rewarding,
Furukawa Electric Group will create solutions for the new generation of global infrastructure
combining information, energy and mobility.
Furthermore, Furukawa Electric Group has defined significant management issues as “material issues,” which the Group should
address in order to achieve the Vision 2030, and identified the material issues as below from the perspective of revenue opportunities
and risks. By addressing the material issues, we will achieve the Vision 2030 and contribute to achieving SDGs* as well.

*

SDGs is an abbreviated name for Sustainable Development Goals, which are global goals adopted by the United Nations, consisting of 17 goals
and 169 targets.

(2) Business environment, medium- to long-term management strategies, and issues to be addressed
In FY2022, we have formulated a new four-year Medium-term Management Plan “Road to the Vision 2030: Transformation andChallenge” (hereinafter, the “2025 Medium-term Plan”) toward achieving a goal for FY2025, the final year of the 2025 Medium-term
Plan. In formulating the plan, we used backcasting to get us to the goal for FY2025, a halfway point to the Vision 2030.

<Business Environment>
We consider that the business environment surrounding Furukawa Electric Group, which is a premise of the 2025 Medium-term Plan,
16will be changing in a discontinuous and irreversible manner. For example, expected changes include the following: ESG/SDGs will
become a management challenge which is critical for the survival of companies; in the era of the 100-year life, a new lifestyle will
emerge and become common; the domestic market will shrink due to a declining and aging population; and we will see the rapid progressof digital transformation (DX).
In such an environment, there will be growing expectations for addressing social issues, including the realization of B5G*; realizationof carbon neutrality; realization of the next-generation infrastructure enabling free flow of people and goods in a safe, secure andcomfortable manner; an increase in healthy life span; and the realization of the circular economy.
* B5G (Beyond 5G) is the next generation of mobile communication systems with such features as scalability (expansion of communication areas tosky, sea, and space), ultra-low power consumption, and ultra security and reliability, in addition to the further advancement of 5G’s characteristicfeatures (high speed and high capacity, low latency, and multiple simultaneous connections). It is also called 6G (the 6th generation mobile
communication system).

<Outlook for Market Environment in Each Business Domain>
The global economy appeared to be heading for a soft landing, with inflation steadily declining while growth continued. Although the
future outlook is expected to remain uncertain, with the pace of economic expansion being slow and uncertainty remaining over inflation
trends and geopolitical shocks, we anticipate continued market growth in the medium to long term in the infrastructure(communications/energy) and automotive sectors, which we have positioned as priority areas, as well as in the functional products sector
related to semiconductors, which we regard as a focus business.
In the communications sector, cloud-based services such as 5G and IoT have been growing in various fields, especially in generative AI.
Construction of optical networks related to data centers that support these services is expected to continue. The global supply-demandbalance for optical fiber is on the mend, and continued market growth is expected in the medium to long term.
In the energy sector, demand for renewable energy, mainly offshore wind power, and demand from electric power companies due to theirreplacement needs is expected in Japan in line with the government’s energy policy; whereas overseas, strong demand is expected tocontinue in Europe, the U.S., and emerging economies.
In the automotive sector, demand for automobiles remains strong under the current economic expansion., and continued growth isexpected in the future.
In the functional products sector, the market is expected to continue to expand and grow in the medium to long term. The generative AIrelated market performing well, and demand for smartphones, personal computers, and HDDs is expected to gradually recover.
<Efforts to Achieve the 2025 Medium-term Plan (Issues to Be Addressed)>
Under the 2025 Medium-term Plan, we place an emphasis on enhancing/creating businesses that solve social issues in each or
combination of Information, Energy and Mobility areas; and, as measures to increase revenue, we will work on “Maximizing revenues
in existing businesses through a focus on capital efficiency” and “Building a foundation for creating new businesses by strengthening
development and proposal capabilities.” We will also work on “Strengthening the foundation for ESG management” to support theabove-mentioned priority measures.

17

(i) Maximizing revenues in the existing businesses through a focus on capital efficiency
To achieve the goals of the medium-term management plan, from the perspective of profitability and growth potential, we will continue
optimizing the allocation of investments and accelerate business management and decision-making, including review of our businessportfolios, with further focus on the cost of capital.
In the area of optical fiber and optical components, we will work to secure profits by focusing on expanding sales of high-value-added
products, acquiring new customers, improving manufacturing capacity and productivity, and promoting the expansion of our networking
systems globally. In the area of power cable systems, we aim to increase earnings by enhancing productivity through capital investment
and upgrades, expanding construction work capabilities, and actively pursuing orders for domestic extra-high-voltage undergroundcables, as well as submarine and underground cables for renewable energy projects. In the area of automotive wiring harnesses, we willcontinue to work to expand sales of aluminum wiring harnesses, which lighten vehicles and thus contribute to CO 2 reduction. We will
also continue to develop and promote orders for high-voltage products to meet the growing demand associated with increasing
electrification of automobiles. In the area of tapes for semiconductor process, we are building a new factory to increase production
capacity and provide higher-performance, higher-quality products, as demand for semiconductors is expected to grow in the future. We
are also promoting trial production. Furthermore, in response to the growing demand for generative AI, we are striving to expand salesof heat dissipation products that meet various needs of our customers.
(ii) Building a foundation for creating new businesses by strengthening development and proposal capabilities
The Group is committed to developing a foundation for creating new businesses designed to solve social issues. Specifically, we draw
four core technologies: metal, polymer, photonics, and high-frequency, based on our long-standing expertise in the development andfabrication of such advanced materials, as well as foster co-creation with external partners, promote the use of digital technology anddata, and develop and provide products and services that start with solving problems.
To respond to the Beyond 5G era, we will contribute to realizing all-optical network and fostering a highly efficient energy society. To
achieve this goal, we will harness photonics and high-frequency technologies to develop opto-semiconductor devices and other productsthat facilitate photoelectric fusion required for the next-generation information and communications environment. We will also promotejoint research and development of fusion power generation-related products that contribute to the supply of safe and sustainable energy.
Furthermore, towards achieving carbon neutrality, we will continue the research and development of Green LP Gas*, which does notuse fossil resources. In addition, we will continue to make proposals to our customers on digital solutions for maintaining and managing
social infrastructure while aiming to upgrade these solutions even further.
*Green LP gas: LLP gas produced from biogas (methane gas and carbon dioxide produced by fermenting livestock waste and foodscraps).
(iii) Strengthening the foundation for ESG management
In the 2025 Medium-term Plan, we defined the ideal state in FY2025 for each identified material issue, formulated measures to realize
them, and set sustainability indictors/targets to measure the progress. By working on achieving such targets, we will strengthen thefoundation of ESG management. For “developing business activities that consider climate change,” which is essential for ourtransformation into a sustainable company, we have formulated a climate transition plan: a series of goals and actions that support thetransition to a low-carbon economy. We will accelerate our efforts to achieve carbon neutrality based on this plan. In order to strengthen
human capital, based on “Furukawa Electric Group People Vision,” which is the shared beliefs on human capital at both Group andglobal levels, we will strive to strengthen “human capital organizational execution abilities.” Specifically, we take surveys of humancapital/organizational execution abilities, including elements related to employee engagement, and by using the survey as a monitoring
tool, we will strengthen our efforts in human capital management. “Building a governance structure to strengthen risk management”
involves strengthening not only risk management within the Group but also initiatives related to supply chain and human rights
management. Specifically, we are gradually expanding the implementation of the Self-Assessment Questionnaire (SAQ) based on“Furukawa Electric Group CSR Procurement Guidelines” from the Company to major suppliers of domestic and overseas groupcompanies. As for “human rights due diligence,” we regard employees and suppliers as the primary stakeholders, identify presumed
human right issues to each of them, and take measures to solve and/or prevent such issues.

18

(3) Numerical management targets
To strengthen and create businesses through a focus on capital efficiency, we place emphasis on ROIC and ROE as management
indicators. The target levels to be reached in the final year of the 2025 Medium-term Plan, the fiscal year ending March 31, 2026, are
ROIC (after tax) of 6% or more, ROE of 11% or more, consolidated net sales of ¥1.1 trillion or more, consolidated operating profit of¥58.0 billion or more, and consolidated profit attributable to owners of parent of ¥37.0 billion or more. In addition to these financial
targets, the 2025 Medium-term Plan sets targets based on sustainability indicators (e.g., GHG emissions reduction rate, employee
engagement score, and implementation rate of human rights training for managerial positions) to realize our ideal state in FY2025 ineach material issue.
We will steadily promote the 2025 Medium-term Plan to realize the Vision 2030.
FY2025 Financial Targets

ROIC (after tax)
ROE
Net D/E ratio
Equity capital ratio
Consolidated net sales
Consolidated operating profit
Profit attributable to owners of parent

6% or more
11% or more
0.8 or less
35% or more
¥1.1 trillion or more
¥58.0 billion or more
¥37.0 billion or more
FY2025 Sustainability Targets

Sales ratio of environment-friendly products
70%
R&D expense growth rate for new businesses (compared to FY2021)
125%
Implementation rate of IP landscaping for strengthening businesses and100% (*1)
themes for creating new businesses
GHG emissions reduction rate (Scopes 1&2) (compared to FY2021)-18.7%
Ratio of renewable energy use to total electricity consumption
30%
Employee engagement score
80 (*2)
Ratio of female managers (non-consolidated)
7%
Ratio of mid-career hires to total new staff hires (non-consolidated)
30%
Ratio of follow-up on risk management activities for all risk domains
100%
Ratio of SAQ implementation based on CSR Procurement Guidelines for
100%
major suppliers
Implementation rate of human rights risk training for managerial positions
100%(*1) This indicates that all of the themes set for FY2022 have been implemented.
(*2) The scope of the target was broadened to include domestic and overseas group companies in FY2023, changing the target
from non-consolidated to Group target.

19

2. Approach and Initiatives toward Sustainability

Furukawa Electric Group’s approach and initiatives toward sustainability are as follows.
The forward-looking statements contained in the descriptions below are based on the Group’s judgments made as of the end of thecurrent fiscal year.
(1) Sustainability in general
We have defined Furukawa Electric Group Vision 2030 (hereinafter, the “Vision 2030”) as the ideal state of the Group in 2030. In
order to achieve the Vision 2030, we are promoting ESG management, which aims sustainable growth of Furukawa Electric Groupand medium- to long-term growth of corporate value.
In FY2023, for each and every employee to continue to work with pride and take on challenges, we reviewed our Group’s philosophy
and established the Furukawa Electric Group Purpose, which articulates the Group’s raison dʼêtre. This was implemented on April 19,
2024. In FY2022, we established a Purpose Establishment Project Team led by young employees, and have so far had dialogue withmore than 100 employees on a total of 30 occasions, not only in Japan but also at overseas group companies (in the US, Europe, SouthAmerica, China, and Southeast Asia). Also, the Board of Directors had several discussions on this matter. Moving forward, throughactivities to instill our purpose, we will aim to improve employee engagement and organizational capabilities by having each and every
employee understand the content and significance of our purpose and by promoting initiatives to foster a sense of empathy for our
purpose throughout the entire group.
For the text of the Purpose, please refer to “1. Management Policy, Business Environment, and Issues to Be Addressed, (1) Basicmanagement policy.”(i) Governance
Sustainability Committee was established to consolidate discussions on sustainability within Furukawa Electric Group and further
enhance the quality and speed of implementation thereof. Sustainability Committee, chaired by the President, vice-chaired by theGeneral Manager of Strategy Division, and composed of members of top management, deliberates on issues on sustainability within
Furukawa Electric Group, including sustainability-related basic policy, basic matters on material issues related to revenue opportunities
and risks, and disclosure of basic information related to sustainability; checks on progress on such matters; and submits proposals andreports to the Board of Directors. Corporate Sustainability Office serves as the organizer, and the committee will generally meet twicea year. As risk-related material issues are closely related to management strategy risks of Furukawa Electric Group, they are therefore
handled in collaboration with Risk Management Committee.
In addition, the status of operations related to sustainability, including climate change, human capital, and intellectual property, isreported and shared to the Board of Directors on a quarterly basis. The agenda for the Sustainability Committee and the Management
Committee is set based on, amongst other things, the results of the evaluation of the effectiveness of the Board of Directors and feedback
from shareholders and institutional investors.

<Key Discussions on Sustainability within Furukawa Electric Group (FEG)>
November 2018
Formulated the FEG Vision 2030
November 2018
Formulated the FEG Vision for Our People; medium-term measures of HR Management
Dept.
Nov. 2018–Dec. 2019
Identified material issues
April 2019
Revised the FEG CSR Code of Conduct
Board ofFebruary 2021
Formulated the FEG Environmental Vision 2050
Directors
July 2021–Aug. 2021
Established the FEG Basic Policy on Sustainability
May 2022
Set sustainability indicators and targets; reviewed the material issues, added Human Rights
and Labor Practices to material issues
December 2022

Status and direction of personnel measures in the 2025 Medium-term Management Plan

Mar. 2023–Mar. 2024

Established FEG Purpose

20

October 2018
Nov. 2018–May 2019Nov. 2018–Sept. 2020
January 2019

Management
Committee

April 2019
January 2020
Dec. 2020–Feb. 2021
July.–Aug. 2021
Nov. 2021–Feb. 2022
November 2022
Nov.–Dec. 2022
February 2023

March 2022
Sustainability
Committee September 2022
Sept. 2022–Mar. 2024

Medium-term measures of HR Management Dept.; formulated the FEG Vision for Our
PeopleFormulated the FEG Vision 2030
Identified material issues and disclosed themSet the Environmental Targets 2030; applied for an SBT (2℃ Targets) initiativecertification
Revised the FEG CSR Code of Conduct
Signed the United Nations Global Compact; Formulated the FEG Human Rights Policy;
Expressed support for the recommendations of TCFD
Formulated the FEG Environmental Vision 2050
Established the FEG Basic Policy on Sustainability
Revised the Environmental Targets 2030; applied for an SBT (WB 2℃ Targets) initiativecertification
Direction of personnel measures based on the concept of human capital management
Revised the Environmental Targets 2030; applied for an SBT (1.5℃ Targets) initiativecertification; purchased renewable energy certificates
Activities to reinforce human capital and organizational execution abilities; disclosed
human capital indicators
Set sustainability indicators and targets; reviewed the material issues; added Human Rights
and Labor Practices to material issues
Established the FEG Responsible Minerals Sourcing Policy
Established the FEG Purpose<ESG-linked Remuneration>
The Company established the Nomination/Compensation Committee, which is a voluntary committee consisting of the majority of
Outside Directors and chaired by one of the Outside Directors for the purposes of appointing/removing and evaluating Directors aswell as discussing remuneration for the management. In FY2023, the committee met six times. The Company has partially amended
the remuneration system for Directors, etc. mainly for the purpose of the remuneration for Directors, etc. other than the Outside
Directors and Audit & Supervisory Board Members more explicitly reflecting the results of initiatives toward ESG-related matters, andbegan applying the new system from July 2023. The revised elements of remuneration include base salary, short-term performancelinked remuneration (individual), short-term performance-linked remuneration (company level), ESG-linked remuneration, andmedium-to-long-term performance-linked remuneration. The ESG-linked remuneration is based on the achievement status ofsustainability targets in the key management issues (material issues) that the Group must address. When the total of the standard
remuneration levels set for each remuneration element is 100%, the proportion of the ESG-linked remuneration to the total
remuneration is set at 2-3% depending on the post.
In FY2023, the first year for this arrangement, the item subject to evaluation is the achievement of targets concerning “GHG emissions
reduction rate (Scopes 1&2)”—a 21.2% reduction compared to FY2017. The evaluation metrics used to determine ESG-linked
remuneration are periodically confirmed and reviewed by the Nomination/Compensation Committee.
For details, refer to “4. Corporate Governance, (4) Remuneration for Directors, etc.”

21

(ii) Strategy<Furukawa Electric Group’s ESG Management and Material Issues>
In order to achieve Furukawa Electric Group’s Vision 2030, we arepromoting ESG management, which aims sustainable growth of theGroup and medium- to long-term growth of corporate value. We havedefined material issues (*) as important management issues that theGroup should address in order to achieve the Vision 2030, and we
defined material issues in terms of both revenue opportunities and risks,in accordance with the process of identifying material issues asmentioned below. We aim to achieve the Vision 2030 by working on
the material issues we have identified, considering that addressing thematerial issues in terms of revenue opportunities help improve capitalefficiency whereas addressing the material issues on risks help reducethe cost of capital. We will also contribute to the achievement of theSDGs, which are closely related to the material issues.
* In Furukawa Electric Group’s ESG management, “material issues” are defined as important management issues that Furukawa Electric Group must
address in order to achieve the Vision 2030, and are used as a term with a meaning different from those used in the finance and accounting context,
which are issues that may have an impact on business performance, financial position, etc.

<Identifying Material Issues>
From the perspective of revenue opportunities, in order to help solve various social issues through the business activities of Furukawa
Electric Group, we found it indispensable to devise a transformation from the emphasis on “product-out” to the “market-in" and further
to the “outside-in” approach, and identified the “creation of businesses that solve social issues” as a material issue. Examples of theseinclude the “creation of businesses that support the next generation infrastructure,” which will serve as the foundation of the society
anticipated in the Vision 2030, and the “creation of environment-friendly businesses,” which contribute to the realization of a carbonfree society and a recycling-based society. We are focusing on the two kinds of examples as sub-material issues of the materiality on
revenue opportunities. In addition, we have identified as material issues the slogan “Open, Agile, Innovative,” which reflects the desire
to become a company that actively transforms itself and the creation of continuous innovation through utilizing intellectual property
and other measures, and the “Building partnerships with various stakeholders,” focusing on co-creation with others, as key management
issues toward creating businesses that solve social issues.
On the other hand, from a risk perspective, in order to achieve sustainable growth, it is essential that companies develop businessactivities that take into account climate change, and we see this as a material issue for environment (E) risks. In addition, in order tobecome a company that actively transforms itself, we set the “strengthening of human capital and organizational execution abilities” asa material issue for social (S) risks. As for materiality of governance (G) risks, we focus on “building a governance system forstrengthening risk management” including corporate governance, group governance, supply chain management as well as human rights
and labor practices as sub-material issues.

22

<Process of Identifying Material Issues>
Identification and review of material issues was conducted through a process of Step 1 through Step 3. First, in Step 1, we identifiedsocial issues by referring to “external factors” and “internal factors,” adjusted duplicate items, and created a list of items (currently
organized into 29 items). In Step 2, the two axes of “importance to shareholders and investors” and “importance to achieving the
Vision 2030” are evaluated for importance (high, medium, low) and prioritized. In Step 3, high-priority items are identified as material
issues. The identified material issues are categorized by revenue opportunity and risk aspects and rearranged as important issues forachieving the Vision 2030, and expressed as the material issues in terms of revenue opportunities and the material issues in terms of
the E (Environmental), S (Social) and G (Governance) risks.
In FY2023, “biodiversity (land area/marine and river)” was re-evaluated from a low area to a medium area of “importance to achieving
the Vision 2030” in response to the increasing social demands for biodiversity and natural capital in recent years.

23

<Value Creation Process Directed at Achieving the Vision 2030>
Furukawa Electric Group conducts corporate activities based on the Furukawa Electric Group Purpose, the Core Values, and Furukawa
Electric Group CSR Code of Conduct. We will surely execute the Medium-term Management Plan 2022–2025 (the “2025 Medium-termPlan”), which is formulated by the dual approach of backcasting from Furukawa Electric Group Vision that defines the ideal state of theGroup in 2030 (the “Vision 2030”) and forward-looking from the present. In the 2025 Medium-term Plan, we defined the ideal state in
FY2025 for each identified material issue, formulated measures to realize them, and set sustainability indicators/targets to measure theprogress.
For realizing sustainable growth of Furukawa Electric Group and medium- to long-term growth of corporate value, we will strengthen
and create businesses mindful of capital efficiency and strengthen the management foundation directed at reducing capital costs.
Furukawa Electric Group has enhanced capabilities for development and making proposals, without being limited to specific markets
and with its four core technologies—metals, polymers, photonics and high-frequency—centered on capabilities to handle materials.
Through these capabilities, we have gained the trust of customers. In an “Open, Agile, Innovative” manner, we will promote to build a
new business model by enhancing our strengths, including utilization of intellectual property, and cocreating with our partners.
Toward 2025, we will stabilize earnings in information, energy and mobility sectors, and realize growth through the strengthening ofbusinesses that solve the social issues, whereby contributing to building a society with infrastructure integrating information, energy andmobility. Specifically, to achieve the targets specified in the 2025 Medium-term Plan, and to expand profits in each business, while
focusing on Communications Solutions business in particular, we will continue to optimize allocation of investments from theperspective of profitability and growth potential, and accelerate business management and decision-making, including the review of ourbusiness portfolio, with a further focus on the cost of capital.
In addition, toward 2030, we realize a leap through the creation of businesses that solve the social issues including the “creation ofbusinesses that support the next generation infrastructure,” which would serve as the foundation of the integrated society of the Vision
2030, and the “creation of environment-friendly businesses,” which contributes to the realization of carbon neutrality and a circular
economy. Specifically, to address the needs of the Beyond 5G society, we will take advantage of our photonics and high-frequency
technologies to develop optical semi-conductor devices towards the realization of photoelectric fusion which is essential in the nextgeneration information communication environment, thus contributing to realizing the all-optical network and a society with highly
efficient energy. We will also proceed with joint R&D of products for nuclear fusion power generation, which contributes to the safe
and sustainable energy supply. Furthermore, to contribute to realizing the carbon neutrality, we will continue our R&D activities
concerning Green LP gas* which does not use fossil resources. In addition, we will suggest the adoption of our digital solutions for
operating/maintaining social infrastructure to our customers, and work on the sophistication of such solutions.
* Green LP gas: LP gas produced from biogas (a mixture of methane gas, which is from the fermentation of animal manure and food waste, and carbon
dioxide).

On the other hand, as for “developing business activities that consider climate change,” we formulate a climate-related transition plan
which is a series of targets and actions to support the transition to a low-carbon economy. Based on the plan, we will implement initiatives
toward the carbon neutrality. In addition, as for “strengthening of human capital and organizational execution abilities, we conduct asurvey on human capital and organizational execution abilities, including elements related to employee engagement; and by using it asa monitoring tool, we will strengthen our efforts of human capital management based on “Furukawa Electric Group Vision for Our
People” which is shared beliefs on human capital at both Group and global levels. As for “Building a governance system to strengthenrisk management,” we will strengthen the initiatives related to not only the Furukawa Electric Group’s overall risk management, but also
supply chain management and human rights management.

24

Furukawa Electric Group Purpose / Core Values

Today2025 Mid-term Plan
(Financial targets /Sustainability targets)

2025

Forward-looking
Revenue Opportunities

Revenue Opportunities

2

business modeland strengths

４ core technologies※1
Development and proposal
capabilities not limited to
specific markets
Trusted by customers

Strengthen the
managementfoundation
directed at
reducing
capital costs

3

Furukawa Electric Group
Vision 2030

Social issues
Information

Businesses that support next
generation infrastructure
Environmentally friendly businesses

Form partnerships withdiverse stakeholders

Realize a B5G ※3society

Become carbon
neutralEnergyNew businessmodelsGrowth through strengthening thebusinesses designed
to solve social issues

Reinforce thestrengths※2

Stabilize profits in information, energy and mobility
Contribute to realizing a society that combines these
domains

Mobility

Risks S

Risks E

Develop business activities thatconsider climate change

Risks G

2030

Strengthen human capital andorganizational execution abilities

Build a governance system to strengthen risk management

Corporate governance / Group governance / Supply chain management / Human rights & labor practices

NewdomainRealize next generation
Infrastructure thatenjoys universal
mobility

Realize longer
healthy life expectancy

Realize a circular economy

Create andstrengthenbusinesses
based on anawareness of
Furukawa Electric Group’s capital efficiency

1

Leap forward through thecreation of businesses designed
to solve social issues

Open, Agile, Innovative
Revenue Opportunities

Backcasting

Partnerships with multiple
stakeholders

The Furukawa Electric Group CSR Code of Conduct*1 4 core technologies: metals, polymers, photonics, and high-frequency*2 Including enhanced utilization of intellectual property*3 B5G (Beyond 5G)(iii) Risk management<Sustainability-related Opportunities and Risk Management>
In the 2025 Medium-term Plan, we have set sustainability indicators (KPIs) and sustainability targets for FY2025 to realize our ideal
state in FY2025 in each material issue.
The handling status of material issues on revenue opportunities and risks and the progress on sustainability indicators are reported andshared to the Board of Directors and Sustainability Committee semiannually. In addition, the General Manager of Corporate
Sustainability Office regularly (twice a year in principle) holds a dialogue on the progress of material issues and sustainability indicators,
the validity of sustainability indicators and targets, and other issues with each division in charge, and encourages a division that is notexpected to meet the target to set and implement handling measures and improvement measures.
Material issues of revenue opportunities:
We have set the “R&D expense growth rate for new businesses” and “implementation rate of IP landscaping for strengthening businesses
and themes” as sustainability indicators to measure the progress of the slogan “Open, Agile, Innovative” and “Building partnerships withvarious stakeholders” to promote building a foundation for creating new businesses. For more information on “Implementation rate of
IP landscaping for strengthening businesses and themes,” please refer to “(4) Intellectual property.”
For more information on the “creation of businesses that solve social issues/creation of environment-friendly businesses,” please referto “(2) Climate Change.”
Material issues of risks (governance):
We have set “the ratio of follow-up on risk management activities for all risk domains” that contains items of the business-related risk
as a sustainability indicator to measure the progress toward “Building a governance system to strengthen risk management” to promote
the improvement through the control activity. In addition, as for supply chain management and human rights management identified as
sub-material issues to be specially strengthened, we set the “ratio of SAQ (*) implementation based on the CSR Procurement Guidelines
for major suppliers” and the “implementation rate of human rights training for managerial positions” respectively as a sustainability
indicator, to follow up the progress and responses.
As for supply chain management, we issued a SAQ for 56 major business partners in accordance with the contents of our CSR
Procurement Guidelines in FY2021. Since FY2022, we have expanded the scope of coverage to include partners of domestic and overseas
group companies. For partners falling under the categories of any of the survey items that we have identified as high-risk, we reconfirm
the situation through interviews and other means, and encourage the partner(s) in question to correct the situation as necessary.

25

As for human rights management, we have implemented human rights due diligence, setting “employees” and “suppliers” as the target
stakeholders to be prioritized in terms of human rights issues tackled by our Group in FY 2021. With regard to employees, we have set
harassment in the workplace as an issue to be resolved, analyze the results of instances of whistleblowing and compliance awarenesssurveys, and make necessary improvement measures be implemented. As one of the improvement measures, we have implemented“Discrimination and Harassment Education” for individuals working in management positions at our Company and at our groupcompanies in Japan and overseas since FY2022. With this, we have set the “implementation rate of human rights risk training for
managerial positions” as a sustainability indicator. In FY2024, we plan to analyze the results of the compliance awareness survey
conducted in FY2023 and verify the effects of the improvement measures. Meanwhile, we have issued SAQs to our major suppliers
based on the CSR Procurement Guidelines, to catch any suppliers falling under the categories of any of the survey items that we haveidentified as risk on supply chain. At present, the results of these surveys have not identified any serious issues presenting adverse
impacts on human rights.
* SAQ (Self-Assessment Questionnaire)
Material issues of risks (environment):
For more information on the “Developing business activities that consider climate change,” please refer to “(2) Climate Change.”
Material issues of risks (society):
For more information on the “Strengthening human capital and organizational execution abilities,” please refer to “(3) Human capital(including diversity of personnel).”<Integration into company-wide management strategy (under MTMP 2025) and company-wide risk management>
In order to strengthen and create businesses that solve social issues, we have established the Business Portfolio Review Committee since
FY2022 with the aim of promoting business portfolio transformation with an emphasis on capital efficiency. The Business Portfolio
Review Committee, composed of the General Manager of the Strategy Division as chair, the General Manager of the Finance &Accounting Division as vice chair and the General Manager of Global Marketing Sales Division, deliberates on important matters related
to business portfolio transformation, such as the positioning of each business in the Medium-term Management Plan, makes proposals
and reports to the Management Committee. The General Manager of the Corporate Planning Department is in charge of the secretariat,
and it is held three times a year in principle. In FY2023, we started examining our desired business portfolio to achieve the Vision 2030,
and we continue to work to materialize the Vision 2030.
In order to promote management that emphasizes capital efficiency, we have introduced return on invested capital (ROIC) and Furukawa
Value Added (FVA)(*1) as management indicators to evaluate each business. Toward optimizing the business portfolio, taking into
account our current position made visible from the viewpoint of growth (average sales growth rate) and profitability (ROIC spread), ourpotential for future growth, our competitive status among competitors, and our carbon efficiency (GHG(*2) emissions per unit of sales),we will swiftly take necessary actions, such as exploring growth opportunities (including M&A) and determining whether or not towithdraw from certain businesses. Furthermore, to calculate the cost of capital in FVA for each business, we have also incorporated ESG
factors such as “Climate change” (*3) and “Labor practice” in addition to financial factors. FVA of each business are reflected andreviewed every year and reported to the Management Committee, where it is utilized for business portfolio optimization and allocationof management resources.
*1. Furukawa Value Added (FVA): EVA was customized for our company and introduced as an internal management indicator in FY2022.
*2 GHG (Greenhouse Gas)
*3 Specifically, we take into account GHG emissions and GHG emissions per unit of sales for each business.

As for the Group-wide risk management, we have established the Risk Management Committee, which comprises management as
members, with the President as chair and the General Manager of the Risk Management Division as vice chair. The committee is
structured to supervise and promote risk management, internal control and compliance. The Committee conducts regular risk assessment
to determine what risks exist, and define important risks that require a companywide response. We recognize “climate change,” “humanresources and organizations” and “human rights and labor practices” related to material issues of risks as key risks from the management
perspective and counter these risks.
For more information, please refer to “Item 2. Overview of Business, 3. Business Risks.”(iv) Indicators and targets<Sustainability Indicators and Targets>
As for our sustainability indicators for FY2023, we will or expect to achieve our FY2023 targets, except for sales ratio of environmentfriendly products, R&D expense growth rate for new businesses, and employee engagement scores (Furukawa Electric).
The result of sales ratio of environment-friendly products in FY2023 was 65.9%. The total sales of environment-friendly products,
mainly the products related with automotive parts increased compared with the result of the previous year. However, the 66% target forthis year was slightly missed due to a sales decline resulted from the reduced demand of communication related products mainly in the
North American market. We will continue to expand the sales of environment-friendly products that contribute to reducing environmental
impacts or which have positive effects on the environment from FY2024 onward.
26

The FY2023 result of R&D expense growth rate for new businesses (compared to FY2021) was 121%, up from 116% in the previous
fiscal year, but short of the 125% target for the current fiscal year. This was due to the concentration of demonstration and verification
processes for new businesses and the launch of projects through co-creation, which we decided to prioritize. In FY2024 and beyond, we
will continue to promote R&D activities necessary to establish a foundation for the creation of new businesses.
The FY2023 result of employee engagement scores (Furukawa Electric) was 63, which did not meet this fiscal year’s target of 65. Having
employee engagement scores of the entire Group enabled to monitor since FY2023, we have expanded all of the targets in and after
FY2024 which used to be set only for Furukawa Electric to the entire Group. With the target to be reached in FY2025 set to be 80, we
will aim to keep high employee engagement not only in Furukawa Electric but also throughout the Group.

Revenue opportunity

Material issue

Sustainability indicator

Creating businesses thatsolve the social issues

Sales ratio of environmentfriendly products
R&D expense growth rate fornew businesses(compared to FY2021)
Implementation rate of IP
landscaping for strengthening
the businesses and themes forcreating new businesses

Open, Agile, Innovative/
Building partnerships withvarious stakeholders

Developing businessactivities that consider
climate change

Strengthening human capitaland organizational execution
abilities
Risk
Building a governancesystem to strengthen risk
management

Scope

Target (Reference value)

FY2022

FY2023

FY2023

FY2024FY2025

Group

65.0%

65.9%

66%

68%

70%

Group

116%

121%

125%

125%

125%

Group

40%

77%

45% 100%*1,*2

100%*1(Compared to
GHG
FY2017)emissions
reduction rate (Compared to(Scopes 1&2)
FY2021)

Group

Ratio of renewable energy use
to total consumption

Group

Employee engagementscores*4

Result-46%-36.8% (estimate)-21.2%(-39%)*3(-42%)*3–––-14.0%-18.7%

20.2%

12%

25%

30%

Furukawa
Electric

31%(estimate)

65

63

65

–

–

Group

–

76

–

77

80

4.8%

5.4%

5%

6%

7%

45.7%

48.8%

30%*6

30%*6

30%*6

100%

100%

100%

100%

100%

34%

65%

40%

70%

100%

100%

100%

100%*7

100%*7

100%*7

Furukawa
Electric
Ratio of mid-career hires in Furukawa
total new hires*5
Electric
Ratio of follow-up on risk
management activities for all Grouprisk domains
Ratio of SAQ
implementation based on
the CSR Procurement
Group
Guidelines for major
suppliers
Implementation rate of humanrights training for managerial Grouppositions
Ratio of female managers*1 This means that all projects have been implemented with respect to the business enhancement and new business creation themes set as of 2022.
*2 Target value for 2025 has been brought forward.
*3 Base year in and after FY2024 was updated to FY2021; the reduction target value when applied to the former base year of FY2017 is also shown forreference purposes.
*4 The scope was expanded to cover all group companies in Japan and abroad in FY2023, and the target was changed from the Company’s target to theGroup’s target.
*5 New hires represent new graduates and mid-career hires, covering management, career-track, and clerical positions.
*6 This means that about 30% will be maintained in each fiscal year.
*7 This means that 100% globally for each fiscal year will be continued.

27

(2) Climate change
In January 2020, recognizing that climate-related risks and opportunities are an importantmanagement issue, Furukawa Electric Group declared its endorsement of the Climaterelated Financial Information Disclosure Task Force (TCFD). In addition, based on the“Guidance on Metrics, Targets, and Transition Plans” published by TCFD in October
2021, we started formulating a climate-related transition plan which is a series of targets
and actions to support the transition to a low-carbon economy in FY2023.We will
promote disclosure in line with the TCFD recommendations to strengthen our
relationships of trust with our stakeholders.
(i) Governance
As issues on “Developing business activities that consider climate change,” risk-related material issues, are closely related to
management strategy risks of Furukawa Electric Group, they are handled in collaboration with Sustainability Committee, Risk
Management Committee, and its special committee, Furukawa Electric Group Environmental Committee (hereinafter, “Environmental
Committee”) and Central Disaster Prevention and BCM Promotion Committee.
In considering climate-related risks such as those posed by climate change and natural disasters as the priority issue for environmental
risk, we regularly discuss preliminary strategies for climate-related risks mainly at Environmental Committee and business continuity
measures after the occurrence of risks are discussed mainly at Central Disaster Prevention and BCM Promotion Committee.
Environmental Committee, chaired by the General Manager of Risk Management Division and composed of top management including
general managers of each business division and corporate division, meets every three months to discuss issues related to climate change
among others, and submits proposals and reports to Management Committee and the Board of Directors.
Central Disaster Prevention and BCM Promotion Committee, chaired by the General Manager of Risk Management Division andcomposed of general managers of each business division, divisional representatives, etc., meets every three months to establish BusinessContinuity Management (BCM), identify business continuity risks, including natural disasters, and promote and manage theidentification process.
Furthermore, the status of business execution on climate change is reported to and shared with the Board of Directors on a quarterly
basis.
Board of Directors
Submit proposals and reports

Submit proposals and reports

Sustainability Committee

Risk Management Committee

Chair：President
Vice chair：General Manager,
Strategy Division
Committee members：Top Management
Organizer：General Manager,
Corporate Sustainability Office

Chair：President
Vice chair：General Manager,
Risk Management Division
Committee members：Top Management
Organizer：General Manager,
Risk Management Department

Colabration

Furukawa Electric Group
Environment Committee

Central Disaster Prevention
and BCM Promotion Committee

Chair： General Manager,
Risk Management Division
Vice Chair： General Manager,
MONOZUKURI Innovation
Division
Committee
members： Management
Organizer： General Manager,
Environment Department,
and General Manager,
Facility Strategy Department,
Production Technology &Engineering Department

Chair：General Manager,
Risk Management Division
Vice Chair：General Manager,
Strategy Division,and General Manager,
MONOZUKURI Innovation
Division
Committee
members：General Managers
of each business division,
divisional representatives, etc.
Organizer：General Manager,
Risk Management Department<Key Discussions on Climate Change within Furukawa Electric Group (FEG)>
Board of Directors

Management
Committee

February 2021
January 2019
January 2020
Dec. 2020–Feb. 2021
Nov. 2021–Feb. 2022
Nov.– Dec. 2022

Formulated the FEG Environmental Vision 2050
Set the Environmental Targets 2030; applied for an SBT (2℃ Targets)
initiative certification
Expressed support for the recommendations of TCFD
Formulated the FEG Environmental Vision 2050
Revised the Environmental Targets 2030; applied for an SBT (WB 2℃
Targets) initiative certification
Revised the Environmental Targets 2030; applied for an SBT (1.5℃ Targets)
initiative certification; and purchased a renewable energy certificate
28

(ii) Strategy<Businesses for Analysis of Climate-related Risks and Opportunities>
In order to show our “resilience of an organization’s strategy, taking into consideration of different climate-related scenarios, including
a 2℃ or lower scenario” provided by TCFD recommendation, Furukawa Electric Group has identified climate-related risks (transition
risks and physical risks) and opportunities and conducted scenario analysis related to different climates, including a “2℃ or lower
scenario,” setting Medium-Term Management Plan as a baseline since FY2019.
In FY2019, we participated in the Scenario Analysis Support Project for Climate-related risks and opportunities in line with the TCFD,
conducted by the Ministry of the Environment. We conducted scenario analysis for the Infrastructure business (optical fiber and cableproducts of the Communications Solutions business and power cables of the Energy Infrastructure business). We then conducted ascenario analysis for the Automotive Products business in FY2020 and for the AT & Functional Plastics business and the Copper &High-performance Material Products business in FY2021, for the Fiber Cable business and the Electric Power business in FY2022, andthe Copper Foil business, the Battery business, and FITEL Products in FY2023. We continue to expand the target business in eachbusiness field step-by-step.
<Process of Identifying Climate-related Risks and Opportunities>
Identification of climate-related risks and opportunities is conducted through a process of Step 1 through Step 3. First, in Step 1, we
create a list of climate-related risks and opportunities, including not only in our Group but also in the upstream and downstream
operations of supply chain by referring to “external information” and “internal information.” In Step 2, the identified items are evaluatedwith scores in terms of “impact on Furukawa Electric Group” and prioritized. In Step 3, high-priority items are identified as climaterelated risks and opportunities. For the identified climate-related risks and opportunities, assessment of impact on business in FY2030
is conducted with impact parameters in a 1.5°C scenario and a 4°C scenario.
<Selection of Scenario Group>
Through FY2021, in examining the “different climate-related scenarios, including a 2℃ or lower scenario” recommended by the TCFD,
we examined a “2℃ or lower scenario” and a “4℃ scenario” step-by-step for each business field by referring to several existing
scenarios published by the International Energy Agency (IEA) and the Intergovernmental Panel on Climate Change (IPCC). In FY2022,
to accelerate our efforts toward achieving carbon neutrality by 2050, we revised the Environmental Targets 2030 and applied for an
SBT (1.5℃ Targets) initiative certification. Accordingly, the scenarios for the business fields, for which we had been conducting
scenario analysis, were revised to the “1.5°C scenario” and the “4°C scenario.”<Definition of the Period for Climate-related Risks and Opportunities>
Short-term

Up to FY2025

Period up to achieving the 2025 Medium-term Plan and sustainability targets

Medium-term

Up to FY2030

Period up to achieving the Vision 2030 and the Environmental Targets 2030

Long-term

Up to FY2050

Period up to achieving the Environmental Vision 2050

29

<Overview of Scenario Analysis>
Category

Transition
risks

Risks
Physicalrisks

Identified climate-related risks and opportunities

Policies and• Carbon tax on GHG emissions
regulations• Increase in procurement costs of renewable energy
Markets• Increase in procurement costs of materials (copper, aluminum,
plastics) due to carbon taxation• Damage to buildings due to large-scale disasters (large typhoons,heavy rains, heavy snow, lightning strikes) caused by abnormal
weather• Supply chain disruption of customers or suppliers caused byAcuteweather disaster• Shut-down of coastal factories caused by flooding and drought
Chronic

Opportunities

Markets

Products and services

Period to
manifest
Medium tolong term

Business impact in
2030
1.5℃
4℃
Major

Minor

Medium tolong term

Major

Minor

Medium tolong term

Minor

Minor

Medium to
Mediumlong term
Medium to
Mediumlong term• Increase in air conditioning costs due to a rise in averagetemperature• Increase in revenue and profit from accelerating development of
5G/B5G along with the construction of smart cities and the surgeof communications traffic• Increase in revenue and profit from demand growth for products
related to telecommunications, semiconductor memory, 5G andShort tosmartphones
Major
medium term
• Increase in revenue and profit from demand growth for submarine
cables and the enhanced core transmission network along with theincrease in renewable energy generation• Increase in revenue and profit from demand growth for products
along with automotive electrification and weight reduction• Increase in sales from demand growth for low-carbon and carbonMedium tofree products and recycled products in response to requests for
Majorlong termcaron neutrality and circular economy• Technology development toward expanding introduction of nextLong term–
generation energy

Major
Major

MediumMedium–<Furukawa Electric Group’s Efforts toward Achieving Carbon Neutrality and Formulation of a Climate-related Transition Plan>
We identify climate-related opportunities and risks and work to achieve carbon neutrality by both capturing revenue opportunities andmitigating risks. Based on the “Guidance on Metrics, Targets, and Transition Plans” published by TCFD in October 2021, we started
formulating a climate-related transition plan which is a series of targets and actions to support the transition to a low-carbon economy
in FY2023.
As for the measures to deal with risks, we have established the Environmental Vision 2050 as our super-long-term goal, with thechallenge target of reducing GHG emissions (Scopes 1&2) in our business activities to zero by 2050, as well as another target of
reducing GHG emissions throughout the value chain. Backcasting from these targets, we have set targets for reducing GHG emissions
in the Environmental Targets 2030 and the sustainability targets in the 2025 Medium-term Plan to work toward achieving these
reductions. In our efforts to reduce greenhouse gas emissions from business activities (Scopes 1&2), we are promoting energy saving
and fuel conversion at our factories. We have set the “Ratio of renewable energy use to total electricity consumption” as a sustainability
indicator to work toward improving the ratio of renewable energy use (usage of hydroelectric power, installation of solar power system,
and introduction of electricity derived from renewable energy.) In FY2023, we began to work on creating an energy road map as a partof formulating a climate-related transition plan toward achieving the Environmental Vision 2050 and the Environmental Targets 2030.
As for the measures to deal with revenue opportunities, we will continue to stabilize revenue from existing businesses and develop afoundation for new business creation during the period of the 2025 Medium-term Plan. We will solve social issues in each businessfield and contribute to achieving carbon neutrality by 2030. For example, for accelerating development of 5G/B5G along with thesurge of communications traffic, we will create new photonics products with strengths of development and proposal capabilities in thecommunications field and contribute to the simultaneous realization of a high-capacity information communications and a highefficiency energy society. For technology development to contribute to realizing carbon neutrality through supply and installation ofsubmarine and underground cables indispensable toward expanding the use of renewable energy such as offshore wind power, andexpanding the introduction of next-generation energy, we are working to achieve carbon neutrality, contribute to building a social
infrastructure that enables “Succession of local resources and local culture for the future”(*) through the use of green LP gas, andpromote nuclear fusion energy, which is expected to be a next energy source to take the place of fossil fuels, by developing hightemperature superconducting materials.
* Succession of local resources and local culture for the future: This expresses passing on regional resources and cultures to the next generation in
addition to local production for local consumption.

30

(iii) Risk management<Climate-related Risks and Opportunities>
We have set “GHG emissions reduction rate (Scopes 1&2)”, “Ratio of renewable energy use to total electricity consumption” and “Sales
ratio of environment-friendly products” as sustainability indicators that measure the progress of addressing material issues of“Developing business activities that consider climate change” and “Creating environment-friendly businesses.” Sustainability
Committee follows up the progress of these indicators semiannually.
We have also set the GHG emissions targets for each business division in accordance with the Targets 2030 since FY2020, and GHG
emissions per unit of sales targets for each business division since FY2022. Management Committee follows up the progress of “GHG
emissions” and “GHG emissions per unit of sales” quarterly.
As for Internal carbon pricing (using a shadow price), setting GHG emissions of each business division calculated using carbon prices(applying 20,000 yen/t-CO2e in FY2023) since FY2019, we encourage each business division to be prepared to avoid climate changerisks for decarbonization based on the quarterly evaluation and posting effects at the Environmental Committee. In addition, formulatingof a renewable energy introduction plan is being promoted for any division that does not meet the target, having established a rule thateach business division will bear the increase in procurement costs of renewable energy if the targets are not met since FY2023.
<Integration into company-wide management strategy (under MTMP 2025) and company-wide risk management>
In addition to financial factors, we utilize ESG factors, “GHG emissions” and “GHG emissions per unit of sales (carbon efficiency),” inthe process of business portfolio optimization and calculating the cost of capital in FVA for each business.
For more information, please refer to “(1) Sustainability in general, (iii) Risk Management.”
In risk management of the entire Furukawa Electric Group, we identify “Climate Change (carbon neutral)” as a management perspectiverisk.
For more information, please refer to “Item 2. Overview of Business, 3 Business Risks.”

31

(iv) Indicators and targets<Furukawa Electric Group Environmental Vision 2050> (Formulated in March 2021)
Environmental Vision 2050 embraces the contribution to the realization of a sustainable society throughout the value chain through theprovision of environment-friendly products and services and recycling-based production activities. As part of our contribution to therealization of a carbon-free society, we aim to reduce GHG emissions throughout the value chain, and have set the challenge target ofzero GHG emissions from our business activities (Scopes 1&2) by 2050.
<Environmental Targets 2030> (Revised in November 2022)
We have set the Environmental Targets 2030, a milestone toward the realization of the Environmental Vision 2050. To contribute to therealization of a carbon-free society, we identify our 2030 target as follows.
(1) Greenhouse gas emissions from business activities (Scopes 1&2): Reduce by at least 42% compared to FY2021(2) Greenhouse gas emissions in the value chain (Scope 3): Reduce by at least 25% compared to FY2021
Scope 1: Direct emissions from own factories and offices
Scope 2: Indirect emissions from the use of electricity, heat, etc. purchased by the company
Scope 3: Indirect emissions other than Scopes 1 and 2 (emissions by other companies related to the activities of the business
operator)
Furukawa Electric Group’s GHG reduction targets of 2030 obtained SBT (Science
Based Targets) below 1.5℃ certification in July 2023. This certifies that our Group’s
targets are based on scientific evidence in achieving the “efforts to limit the temperature
increase to 1.5℃ above re-industrial level” aimed in the Paris Agreement.
*Paris Agreement: An international agreement adopted at the Conference of the Parties
to the United Nations Framework Convention on Climate Change (UNFCCC) in 2015
(COP21) to reduce greenhouse gas emissions and other emissions in and after 2020.
<Results and Targets> ★: Sustainability Indicator
In FY2023, we further promoted the introduction of renewable energy which we have been actively promoting since FY2022. The
annual reduction of GHG emissions (Scope 2) from the use of electricity derived from substantial renewable energy introduced in our
optical fiber and cable factory at the Mie Works is expected to be over 20,000 CO2e. We also promote to install solar power systems
and switch to procuring renewable energy in other business sites of our company and production sites in Japan and overseas. As a result,
we expect to achieve the FY2023 targets, “GHG emissions reduction rate (Scopes 1&2)” and “Ratio of renewable energy use to total
electricity consumption.
Scope

Base
year

★Sales ratio ofenvironment-friendly Group
products

Indicator★GHG emissions
Group
reduction rate
(Scopes 1&2) ※1★Ratio of renewableenergy use to total Group
consumption
GHG emissions
reduction rate
(Scope 3)

Group

ResultChallenge
targetTarget (Reference value)

FY2021

FY2022

FY2023

FY2023

FY2024FY2025

FY2030FY2050

–

61.9%

65.0%

65.9%

66%

68%

70%

–

–

2017

-29.0%-36.8%-46%(Estimate)-21.2%(-39%)※2(-42%)※2(-59%)※2

2021

–

–

–

–

-14.0%-18.7%

-42%

–

10.9%

20.2%

31%
(Estimate)

12.0%

25%

30%

–

–

2019

-1.0%

-6%

(Undercalculation)

-6%

–

–

–

–

2021

–

–

–

–

-8.3%

-11%

-25%

–

Zero
emissions*1 The greenhouse gas emissions produced by our Group are mainly energy-derived carbon dioxide (CO2) and sulfur hexafluoride (SF6).
*2 Starting from FY2024, base year is updated to FY2021; the reduction target value when applied to the former base year of FY2019 is also shown
for reference purposes.

32(3) Human capital (including diversity of personnel)<Basic Policy in Human Capital and the Organization (Furukawa Electric Group People Vision)>
In order for each and every employee to continue to take challenges with pride, our Group has updated Furukawa Electric Group’s
philosophy system and established “Furukawa Electric Group Purpose” which showed our raison dʼêtre in March 2024. We havepositioned “Furukawa Electric Group Vision for Our People” as our ideal state of people and organization toward achieving this Purpose.
The growth of each and every one of our diverse personnel is the driving force behind the success of our Group, and we aim for thegrowth of both individual and the organization through teamwork to produce results.
For the text of the Purpose, please refer to "1. Management Policy, Business Environment, and Issues to Be Addressed, (1) Basicmanagement policy.”(i) Governance
As issues on “strengthening human capital and organizational execution ability,” risk-related material issues, are not only management
risks for our Group, but also the most important key management issues directly related to management strategy, we have established asystem for executing personnel strategies, headed by the General Manager of the Strategy Division (CSO). The issues are executed,
discussed and resolved at the Management Committee. In FY2023, the Management Committee reported and discussed 14 topics related
to personnel policies including engagement, reskilling measures, introduction of internal recruitment from the viewpoint of self-directed
career development, the ideal state of organizations, including a review of the standards for establishing organizations.
For individual theme directly related to management issues, we establish committees chaired by the president or CSO to formulate
strategies, determine activity plans, and promote implementation of measures“—Professional Appointment Committee” to certify highly
specialized personnel, “HK(*) and D&I Committees” to promote work-style reform, diversity & inclusion and other measures, and“Furukawa Electric Group Occupational Health and Safety Committee” on occupational health and safety.
The status of these operations is regularly reported to and shared with the Board of Directors.
* HK: Hatarakikata Kaikaku, or work-style reform

33

<Key Discussions on People & Organization within Furukawa Electric Group (FEG)>
November 2018
Formulated the FEG Vision for Our People; medium-term measures of HR Management
Dept.
May 2022
Added “Human rights and labor practices” to material issues
Board ofDirectors
December 2022
Status and direction of personnel measures in the 2025 Medium-term Management Plan
Mar. 2023–Mar. 2024
Established the Furukawa Electric Group’s Purpose
February 2024
Activities to reinforce human capital and organizational execution abilities (engagement)
October 2018
Medium-term measures of HR Management Dept.; formulated the FEG Vision for Our
PeopleJanuary 2020
Formulated the FEG Human Rights Policy
Direction of personnel measures based on the concept of human capital management
Management November 2022
Committee February 2023
Activities to reinforce human capital and organizational execution abilities; disclosed
human capital indicators
June 2023
Introduction of internal recruitment system
Jul. 2023, Feb. 2024
Introduction of reskilling measures
Added “Human rights and labor practices” to material issues
Sustainability March 2022
Committee Sep. 2022–Mar. 2024
Established the Furukawa Electric Group’s Purpose(ii) Strategy<Human resource management strategy in the MTMP 2025>
In the implementation of our management and business strategies, we will coordinate our growth vectors through dialogue so that bothindividuals and organizations can improve their performance, grow, solve social issues, and achieve the Vision 2030. (Figure 1)(Figure 1) Furukawa Electric Group’s Human Resource Management Strategy

Have individuals and organizations grow together andimprove upon their execution abilities->Solve social issues -> Achieve Vision 2030

Individuals

Grow significantly through work
experience and self-directed
learning after envisioning clear
career goals

Improve"Will"

Increase
"Can"

Share
“Needs"Companies andorganizations

Increase competitiveness byacquiring and developing
appropriate talent for
executing business strategies

Improving productivity byaligning growth vectors through dialogue
Changes in values• Increasing of diversity• 100-year lives• Company-focused tojob-focused

Taking into consideration the "four perspectives and six
elements of human capital and organizational execution
abilities," to deploy multi-faceted measures

Changes in external environment• VUCA• Globalization• Job mobility

Prepared by the Company in reference to “Essential Competencies for the 100-year Life” issued by the Ministry of Economy, Trade andIndustry in 201834

To develop individuals and organizations, being attractive individuals and organization are indispensable. An organization creates
workplaces where individuals motivate their abilities and pass them on to others, and supports their development so that they can play
active roles in the organization. We aim to make individuals feel attracted to the place (organization and working environment) andcontinue to excel at work, leading to the sustainable growth and success of the organization. To achieve these goals, we will work on
people and organization based on six perspectives, grasping the overall image of our activities and promoting conscious remedial
measures in the course of our daily business activities (Figure 2).
(Figure 2) Framework of specific activities to develop people and organization
To sustainablesuccess

Attractive
individuals

Attractive
organizations

Elements of people
and organizations

Achieve goals and improve performance

Individual
perspective/
activities

Engagement

Feel motivatedin the workplace

Dialogue

Leadership/Team mindset

Build a team where everyone is united and works toward the same goal.

Organizational Culture/Communication

Retain personnel by enhancing team and organizational attractiveness

Can

Deliver personalcapability

Dialogue

Abilities/Skills

Supportpersonal growth

Equip personnel and organizations with competencies and skills

Flow of Information, coordination, and decision-making mechanism
Break down issues, assign roles, make decisions, and follow through with implementation.

Needs

Know/Choose
the workplace

Dialogue

Preparethe workplace

6 elements for individuals and organizations

Will

Create a motivational structure and environment for positive work

Maintain andstrengthen
the workplace

Organizational
perspective/
activities

Importantactivities

Design of the organization/Personnel composition

Clarify and assign human resource requirements for a maximally functional organization.

Business process design

Clarify the functions and business processes required to execute the strategy

Goals/Medium-term plans/Strategies

Develop a medium-term plan and strategy with competitive advantages<Specific activities>◼ Organization structure, personnel composition, hiring, and staff assignments
We implement initiatives for succession planning and personnel management to maintain the organizational structure and hire andretain human resources that are necessary for our management and business strategies.
(1) Formulating succession plans and development plans
To develop management personnel and candidates for general manager positions in each organization, we formulate succession plansand development plans. Regarding management personnel, we are building a pool of candidates by utilizing external assessments,
providing external training programs, and promoting well-planned transfers, including tough assignments, based on development plans.
In addition, the Nominating/Compensation Committee, in which outside directors hold a majority, monitors the appropriateness andoperational status of the management personnel development system and works methodically over multiple years on the appointmentof executive officers and succession plans for the CEO. We also completed formulating succession plans and development plans forgeneral manager level throughout the organizations in FY2023. In FY2024, we will promote periodic discussions between each divisionand HR division on the formulation of succession plans and the development of manager levels, taking the human resource pipeline ofgeneral manager candidates into account.
(2) Improvement of hiring(i) Mid-career hiring
From the viewpoint of securing diverse human resources to execute management and business strategies, we continue to focus on
hiring mid-careers.
(ii) New graduates hiring
In addition to changes in the hiring environment, students’ attitudes toward employment are also changing. The talent competitionis also becoming more intense. As part of our efforts to make our company more appealing to students, we have introduced a“course-based hiring” system which limits to some extent the jobs available at the time of initial assignment. Limiting the types
of jobs to which we assign new hires serves to enhance the clarity of their career paths. We do this to make it easier for employees
to have an image of their individual growth and promote the acquisition of talented individuals with diverse sets of ideas.

35◼ Flow of information, coordination, and decision-making mechanism(1) Reviewing the operation of the target management system and following up
In revising the personnel system in 2021, we reviewed the operation of the target management system based on the concepts of“promotion of a culture to take on challenge,” “simplicity & openness,” and “human resource development.” Aiming to align theachievement of individual goals with the achievement of higher-level policies and performance improvement, we reinforce the alignment
between departmental and divisional policies and individual goal management. Specifically, members attend meetings when settingorganizational goals, “degree of importance” and “qualification requirement levels” are set based on the expected roles for eachqualification, and coordination meetings are held to calibrate criteria for goal ranking within departments. According to the survey
conducted in FY2023 on the FY2022 initial target-setting meeting, more than 90% of employees responded positively, saying that they
were able to "understand" or "almost understand" the goal levels required to achieve.
(2) “Human rights and labor practice” and responses to risks in the area of labor
Regarding risks associated with “human rights and labor practices,” to fulfill the company’s responsibility to respect human rights, we
promote business activities that respect human rights based on FEG Human Rights Policy and conducts human rights due diligence. In
addition, we analyze the results of whistleblowing and compliance awareness surveys to take remediation measures when necessary.
To reduce risks in the area of labor, we prepared checklists to assess the labor compliance undertaken in accordance with the laws andregulations of the countries where our group operates, establishing a system to periodically check the labor risks across the Group. We
also take improvement measures based on the results. Furthermore, individuals responsible for human resources at group companies inJapan meet twice a year to share information on policies and issues related to human resources and labor within our Group and strive tostrengthen the Group’s cooperation on various issues.
◼ Job skills and work performance
We implement various measures in light of achievement management and business strategies as well as supporting diverse humanresources that takes on challenges and is eager to grow.
(1) Human development(i) Reskilling
In FY2023, the managerial levels and each organization had discussions on visualizing the gap between the current status and theabilities and skills needed from the perspective of the growth of both the company and individual levels to achieve businessstrategies. As a result, we defined reskilling as “voluntary learning of knowledge and skills necessary for executing work, whether
those are new or existing.”
Specifically, to support the process of individual skill acquisition and development (Figure 3), we changed the learning
environment in which “some individuals learn a uniform set of skills at a predetermined timing, frequency, and location" to"individuals can learn a wide variety of skills anytime, anywhere, and as often as they want. Based on the above, we designed to
introduce a new e-learning system that will enable to offer such learning opportunities across the Company in FY2024. This systemprovides content that allows individuals to learn diverse skills at any time. We will also help individuals learn voluntarily byaligning various training curricula and providing cross-sectional and cross-organizational learning opportunities.
(Figure 3) Process of individual skill acquisition and development

Can

Deliver personalcapability

Realize
needs

Decidewhat andhow to learn

36

Learn

PracticeCheck
the effect(ii) Global Human Resources Training System
We started our Global Business Leader (GBL) training in FY2006, and in FY2013, this was reformed into the Global Mindset
Program (GMP), with an extra emphasis being placed on global human resource education. We have also operated a Global
Development Program (GDP) for overseas local employees since FY2010 with the aim of strengthening links within Furukawa
Electric Group, with the curriculum being partly shared with the GMP.
Furthermore, in FY2014, we launched the Global Challenge Program (GCP). This program involves the dispatch of younger
employees to foreign countries for certain periods of time, allowing us to secure diverse talent and provide opportunities for growth.
(2) Support for career development(i) Career Support Office
The Career Support Office was established in FY2021. With this office, we are making efforts to support employees’ self-directed
career development in tandem with existing personnel systems, including career design training provided for each age group andclass, seminars to help employees develop their careers, and individual career-related consultation meetings.
(ii) Mechanisms for individuals to choose their careers
Since FY2021, we have been operating an in-house secondary job system (F Career Challenge). This system allows employees touse up to 20% of their workload to volunteer for participation in projects that interest them and constitutes a mechanism serving
to contribute to their own growth, fulfillment, and career development. Since the inception of the system, 112 employees haveparticipated in 48 projects. This has served as a source of great stimulation for the departments taking on the volunteering
employees, improved the motivation of the volunteering employees themselves, and has had a positive impact on the departments
sending volunteering employees to participate in such projects.
In FY2023, in order to accelerate the realization of more self-directed careers for our employees, we introduced an internal open
recruitment system on a trial basis, which allows employees to volunteer for organizational transfers. There were 34 applicantsand 10 matches for 57 internal job openings. Based on these results, we have decided to introduce this system in FY2024.
◼ Communication / organizational culture(1) Promoting diversity & inclusion (D&I)
Positioning D&I as an important element in “strengthening human capital and organizational execution abilities,” we have established
HK / D&I Committee under the direct supervision of the President, and are developing proactive initiatives across the company.
(i) Promoting women’s careers
We consider it particularly important to ensure diversity in the decision-making level as a foundation for corporate growth, and,setting the ratio of female managers as a sustainability indicator in the 2025 Medium-term Plan, we have been implementing suchinitiatives. Positioning the low number of female employees as the most important issue, we are persistently working to maintainand enhance our human resource pipeline starting from the hiring phase to developing and promoting core personnel. Concurrently,
we are working to improve the company-wide organizational culture and environment by reforming the leadership of superiors,
improving feedback, providing flexible work styles, and supporting autonomous career formation so that women themselves andtheir superiors can look forward to their career advancement.
In FY2023, each division and HR division deepened mutual recognition of the pool of candidates
and the possibility of post assignments through dialogue, and each division began to create
individual development plans for female candidates for managers. In addition, mindset measures
such as lectures by female executives and round tables for those on the first step toward
management positions were also implemented. In recognition of these efforts, the Company has
been recognized as an excellent company of “Eruboshi” (highest ranking) based on the Act on
Promotion of Women’s Participation and Advancement in the Workplace. Furthermore, in
FY2023, the Company received the Achievement Grand Prize in the Basic Category of theDiversity Award sponsored by NPO J-Win.
Logo symbol of“Eruboshi”

37

(ii) Work-style reform
We are promoting a variety of measures, both in terms of “work-style reform” aimed at improving productivity and job satisfaction,and in terms of “organizational culture reform” aimed at promoting the embodiment of Furukawa Electric Group’s Core Values.
As measures to support our employees’ personal ambitions and growth, and to enable each one of them tobetter demonstrate their abilities, we are enhancing the systems to support balancing various life events suchas pregnancy, childbirth, childcare, and nursing care with work, a variety of leave systems, flextime system,and teleworking system among others, to improve the work-life balance of our employees. We have beenproactively working to enhance our childcare support since 2007 as a business with a “Kurumin” certification,a certification for companies that are proactively working to support balancing work and childcare.
In May 2023, following the recategorization of COVID-19 to a Class 5 infectious disease, we formulated apolicy on how to work after the COVID-19 pandemic. We will continue to promote a hybrid work style thatmaximizes the benefits of both remote work and face-to-face work to improve employee job satisfaction andproductivity.

Logo symbol of“Kurumin”(iii) Promoting employment of people with disabilities
Not only to fulfill our social responsibilities, but also from the perspective of D&I, which pursues the potential of diverse personnel
and organizations as a foundation for corporate growth, we are proactively working to expand the environment in which people
with disabilities can work.
In addition to expanding recruitment through the group companies and our special-purpose subsidiary, Furukawa New Leaf Co.,
Ltd., we will further improve the workplace environment and work styles by offering an option to work from home, barrier-freeaccess, etc., to create a more desirable environment for people with disabilities to work in.
We are working to expand the application of these initiatives to the entire Group. In FY2023, since the limited number of jobs heldby people with disabilities was a priority issue, we added FURUKAWA ELECTRIC BUSINESS & LIFE SUPPORT INC. as anapplicable company for expanding the range of jobs for people with disabilities.
(2) Promoting health and safety and Health and Productivity Management(i) Employee health and safety
Recognizing the risks of an employee suffering death, inability to work, permanent disability, long-term leave of absence or healthimpairment primarily due to an occupational accident, traffic accident or illness, we are developing various measures based on theidea of “prioritizing safety and health over everything” as the basic premise for business continuity. We are promoting safety
activities based on three approaches to achieve zero accidents: (1) provide and implement safety related knowledge through thetraining of safety conscious persons, (2) make the facilities safer through activities to promote fundamental safety, and (3) establish
a safety-oriented organization by improving the level of safety management.
(ii) Promoting Health and Productivity Management
We define “Health and Productivity Management” as the aim for each employee to achieve good physical, mental and social
conditions (well-being). Based on the belief that improving the vitality and performance of employees will lead to the growth oforganizations and companies, we are promoting various Health and Productivity Management measures as a unified organization.
From the managerial viewpoint, “Furukawa Electric Group Health and Productivity Management Declaration” was established in2017, in order to promote “Health and Productivity Management” which strategically strives for the Health and Productivity
Management and the health promotion of the employees. We assist our employees in raising their health consciousness and actively
engaging in their own health promotion. Specifically, we carry out the following unique initiatives:
 Formulated the “Five-Year Medium-term Plan for Occupational Health” toward 2025, backing up employee health promotion
activities by implementing various measures at each site, including measures for health literacy improvement, smoking,metabolic syndrome, mental health, improving physical function, heat stroke, and the establishment of a chemical substancemanagement system.
 Say “Stay healthy!” along with the manufacturing industry’s beloved greetings, “Stay safe!” among employees to raise each
employee’s awareness of health.
 Established the “Five-Year Plan for Smoking Prevention” in 2015 and achieved a total smoking ban on premises throughout thecompany by 2020.
In recognition of these activities, the company has been recognized as a “Certified Health & Productivity Management Outstanding
Organization” for eight consecutive years since 2017.
(3) Instilling our philosophy
We have defined the value that we wish to particularly emphasize and enhance even more in order to achieve sustained growth as our“Core Values.” We hold workshops on a regular basis to instill the Group Philosophy and the “Core Values” as well as review them atroutine meetings, thereby continuing our efforts toward achieving this goal.
In order for each and every employee to continually take on challenges with pride, the Furukawa Electric Group reviewed its Philosophy
system and established the “Furukawa Electric Group Purpose,” which expresses the Group’s reason for being, in March 2024. Goingforward, we will work on activities to promote the Purpose so that it resonates throughout the entire Group.

38◼ Leadership and team mind
Aiming to become an organization that achieves results as a team, in 2020, we have established the Furukawa Electric way of Seven
Principles for Leaders (Furukawa Seven), which consists of one basic mindset and six action principles for a leader to build a goodworking team. To put these to work, officers and department and section managers declare that they are committed to follow theseprinciples and act according to them every day. Furthermore, our efforts on leadership transformation include 360-degree feedback
surveys of the target personnel with an aim to lead to further behavioral changes. After four years of the initiative, we have seen positivechanges in the awareness and actions of leaders and improved relationships among team members. Going forward, we will accelerate
our efforts to further strengthen team capabilities by focusing more on the link between team activities and results.
◼ Engagement(1) Measurement and utilization of employee engagement
In FY2022, we launched the Furukawa E-Survey as a survey for gauging employee engagement scores. We set targets based on the scoreof “sustainable engagement” in the Furukawa E-Survey as a sustainability indicator in the 2025 Medium-term Plan, and will steadily
implement a variety of measures.
(2) Overhaul of our compensation system and improvement of satisfaction with evaluations
In December 2021, we revised our personnel treatment system based on the concepts of “promotion of the taking on of challenges,”“simplicity and openness,” and “human resource development,” and we are working to overhaul the compensation system and strengthen
its operation to increase job satisfaction for individuals.
(a) In order to provide a spark for the motivation of each employee when it comes to taking on challenges and healthy competition
within the company, the salary system was revised from a seniority-based system of gradual accumulation to a zone-based salarystructure with salary increases and decreases based on evaluation of the abilities and attitudes currently being demonstrated.
(b) We will redefine the communication processes related to our personnel evaluations, and have superiors increase the extent to which
individuals are satisfied with their evaluations by conducting evaluations alongside the provision of responsible feedback on areasof improvement, thereby leading to individual growth.
(3) Strengthening feedback
In the revision of the human resource system in 2021, we reviewed the operation of the target management system. Specifically, at the
beginning of the fiscal year, each employee was encouraged to set a challenging target, and during the fiscal year, we raised awarenessamong supervisors regarding the need for more frequent support and feedback. We have made changes to the operation of that system,so that it now involves positive impacts on both in terms of the nurturing of talent and the improvement of performance, which isachieved by frequently providing feedback through shorter PDCA cycles. At the fiscal year-end, supervisors meet with team members
to provide individual feedback based on their daily work, including both positive points and things that can be improved, thereby
providing motivation for the next fiscal year.
Starting from the FY2022 results, all employees are notified of their personnel evaluation scores. According to the results of monitoring
undertaken during FY2023 (collection rate: 76%), the rate of participation in the FY2022 year-end meetings was 98%, and more than
90% of respondents reported that they “agreed” or “somewhat agreed” that they felt that “feedback was fact-based” and they were“satisfied with year-end evaluation,” which confirmed to us that feedback is being provided. We will continue to monitor the
implementation of target management and improve its operation. In addition, we will enhance our follow-up activities such as providing
HR advice on operational concerns and sharing good practices so that individuals can proactively take on the challenge of higher targets
and get a sense for both their own growth and organizational contributions.
(iii) Risk management<Management of risks and opportunities related to people and organizations>
Since FY2022, Furukawa Electric Group has conducted the Furukawa E-Survey to visualize human capital and organizational execution
abilities, and the results are reported and discussed at the Management Committee’s annual meetings. We then promote the reduction ofrisks and capturing of revenue opportunities through the PDS cycle*, in which we reflect improvement measures based on the results inour business activities.
The score of “sustainable engagement” in the Furukawa E-Survey is set as a sustainability indicator, “employee engagement score,” andthe Sustainability Committee follows up on progress and response measures, including “ratio of female managers” and “ratio of midcareer hires to total new staff hires.”We appropriately execute such risk assessments on a regular basis and reflect the results in our initiatives for various measures whilerevising our risk perception each time. As for our current risk perception, we recognize “people and organizations” and “human rights
and labor practices” as important management perspective risks. In addition, we recognize “employee health and safety” as an important
operational perspective risk. We have incorporated measures for these in the “(ii) Strategy <Specific activities>” section above and areworking on them.
* PDS cycle: Plan Do See cycle

39

(iv) Indicators and targets<Results and targets>◼ Organizational structure, personnel composition, hiring, and assigning
We are continuously focusing our efforts on the ratio of mid-career hires in total new hires (management, career-track, and clerical
positions) while matching the hiring requirements of each organization, from the perspective of securing diverse personnel to execute
management and business strategies and strengthen growth businesses. The result for FY2023 was 48.8%, exceeding the target of 30%.
Sustainability indicator

Scope

Ratio of mid-career hires in total
new hires (management, careertrack, and clerical positions)

Furukawa
Electric

FY2022

FY2023

FY2024FY2025

FY2030Result

45.7%

48.8%

－

－

－

Target

30%

30%

30%

30%

－

◼ Engagement
The overall employee engagement score for FY2023 was 76 for the entire Group and 63 on a non-consolidated basis. In addition to theimpact of expanding the scope to include direct workers and overseas affiliates from FY2023, some divisions’ scores rose and otherdivisions’ scores fell depending on the business environment and the progress of improvement activities, so there was no significant
change overall.
In FY2024, we will prioritize improvement activities at the Company and group companies in Japan, and based on the analysis of thesurvey results, we will accelerate efforts at the Company, with the priority issue of ensuring that general managers and supervisors
clearly communicate strategies and targets and that each and every employee is able to make his or her work a personal matter.
The scope of the employee engagement score has been expanded to grasp the status of the entire Group, so the target for FY2024 andbeyond, which had been set only for the Company, has been expanded to include the Group. The FY2025 target for the Group is set at
80, with the aim of achieving a high level of engagement throughout the entire Group.
Sustainability indicator

Scope
Furukawa
Electric

Employee engagement scoreGroup

FY2022

FY2023

FY2024FY2025

FY2030Result

65

63

－

－

－

TargetStartmeasuring

65

－

－

－

Result

－

76

－

－

－

Target

－

－

77

80

85

◼ Organizational culture / communication
In 2023, the ratio of female workers in managerial positions was 5.4%, achieving the target of 5.0%. To maintain and strengthen thepipeline from recruitment to development and promotion, in FY2023 we engaged in dialogue with each division, compiled a list of
candidate personnel, and began preparing individual development plans.
Sustainability indicator

Scope

Ratio of female workers inmanagerial positions

Furukawa
Electric

FY2022

FY2023

FY2024FY2025

FY2030Result

4.8%

5.4%

－

－

－

Target

4.5%

5.0%

6%

7%

15%

<Reference indicators>◼ Business skills / ability to perform duties
Sustainability indicator

Scope

Research and education expenses
per capita

Furukawa
Electric

FY2022 Result

FY2023 Result¥70,000¥90,000◼ Engagement
Sustainability indicator

Scope

Turnover rate

Furukawa
Electric

FY2022 Result

FY2023 Result
3.5%

40

3.4%

◼ Organizational culture / communication
Indicator
Share of women in employees

FY2022 Result
Furukawa
Domestic group
Electric
companies*1
12.1%
17.8%

FY2023 Result
Furukawa
Domestic group
Electric
companies*1
12.9%
18.9%

Share of women in managers

4.8%

3.6%

5.4%

4.3%

Share of women in manager candidates

12.0%

–

13.8%

–

Share of women in new hires
Male / Ratio of childcare leave
taken
Male / Number of persons who
had newborns
Male / Number of persons who
took childcare leave
Male / Average number of days of
Ratio of childcare leave leave*3
taken*2
Female / Ratio of childcare leave
taken
Female / Number of persons who
had newborns
Female / Number of persons who
took childcare leave
Female / Average number of daysof leave*3
Average of all workers

19.3%

–

21.1%

–

60.0%

50.0%

103.0%

45.8%

75 persons

176 persons

66 persons

212 persons

45 persons

88 persons

68 persons

97 persons

38 days–

25 days–100.0%

127.2%

93.8%

98.1%

10 persons

33 persons

16 persons

53 persons

10 persons

42 persons

15 persons

52 persons

417 days–

345 days–¥6,750,000–¥6,707,000–

Average of male workers¥7,015,000–¥6,972,000–

Average of female workers¥4,850,000–¥4,922,000

–

69.1%

60.1%

70.6%

65.0%

Regular employment¥6,845,000–¥6,783,000–

Average of male workers¥7,110,000–¥7,050,000–

Average of female workers¥4,943,000–¥4,988,000–

Female / Male
Average wages by
employment category

69.5%

64.2%

70.8%

71.2%

Non-regular employment

Female / Male

¥4,704,000–¥4,426,000–

Average of male workers¥4,964,000–¥4,652,000–

Average of female workers¥2,912,000–¥2,694,000

–

58.7%

42.6%

57.9%

61.6%

Regular employees

19.9 years–

19.7 years

–

Male

20.3 years–

20.3 years–

FemaleEmployment rate of people with disabilities (as of June 1st ofeach year)
Ratio of non-Japanese employees

16.8 years–

16.2 years

–

2.35%

–

2.42%

–

0.5%

–

0.5%

–

66.0%

–

68.5%

–

Number of days granted

23.6 days–

23.5 days–

Number of days taken

15.6 days–

16.1 days–

23.8 hours–

22.4 hours–

Female / Male
Average years of service

Leave taken(regular employees)

Ratio of leave taken

Average monthly overtime hours of regular employees
*1
*2

*3

Figures for domestic group companies include figures for the Company. Figures do not include some figures for employees loaned from othercompanies at subsidiaries and associates.
From FY2023, the ratio of childcare leave taken is calculated as “the number of persons who started taking childcare leave during the current
fiscal year / the number of persons who had newborns.” Until FY2022, it was calculated as “the number of persons currently taking childcare
leave / the number of persons who have newborns,” so the FY2022 results in the table have been revised to conform to the FY2023 calculation
standard. In addition, persons who took maternity leave are not included in the number of persons who took childcare leave.
Figures from FY2023 present “the average number of days of leave taken by persons who returned to work in the current fiscal year.” Since thefigures for FY2022 presented “the average number of days of childcare leave taken by persons in the current fiscal year,” the FY2022 results inthe table have been revised to conform to the FY2023 calculation standard.

41

(4) Intellectual property
Furukawa Electric Group has positioned intellectual property such as patent and know-how, and intellectual assets that are our strengths
including human assets, organizational capabilities and customer network, as important management resources. To enhance utilizationof them, we have formulated our Group’s basic policy with the following three pillars. We promote group and global intellectual property
activities by integrating business, R&D, and intellectual property.
<Intellectual Property Strategy of Furukawa Electric Group>
Three basic policies:(1) Reinforcing management and business strategy planning capabilities by IP landscaping:
Reinforce management and business strategy planning capabilities by IP landscaping that incorporates, analyzes and utilizes
intellectual property information into strategy planning processes.
(2) Utilizing intellectual assets with Open & Closed strategies:
Strengthen business competitiveness by using Open and Closed strategy to utilize intellectual assets; and then, running an activity
cycle of creating and accumulating intellectual assets and protecting business and core technology, while using IP landscaping toanalyze environments for change.
(3) Stabilizing business by reducing intellectual property risks:
Identify four categories of risks, which are infringement risk, technology outflow risk, contract risk, and technology counterfeit
risk, as frequent risks with a significant impact, and continuously reduce such risks to stabilize business.
(i) Governance
Our Group has established the Corporate-wide Intellectual Property Promotion Committee (in principle, held once a year), which ischaired by the General Manager of the Research & Development Division. This committee determines corporate-wide intellectual
property activity policies and promotes activities led by intellectual property managers who are assigned to each business and researchdivision.
Corporate-wide intellectual property strategies are proposed and reported to executives who supervise business execution—including
the President—at an Intellectual Property Strategy Meeting (in principle, held at least twice a year) hosted by the General Manager ofthe Research & Development Division. Activities aligned with the corporate-wide intellectual property strategies are determined at anIntellectual Property Manager Meeting (in principle, held once a year) hosted by the Intellectual Property General Manager. Intellectual
property strategies of individual business divisions are subject to co-creation and shared with business division general managers throughIntellectual Property Strategy Dialogues (in principle, held twice a year) hosted by the Intellectual Property General Manager.
Such business execution statuses are reported quarterly to and shared with the Board of Directors.
Board of Directors
Reporton businessexecution
statusManagement strategy

CTO

Management

Executives

Strategy
dialogue

Business strategy

GeneralManager

Formulation
Hosts theCorporate-wide
Intellectual
Property
Promotion
Committee(annually)

Corporate-wide
Intellectual
Property
Strategy

Business
divisionIntellectual
Property
Managers

Formulation
Intellectual
Property
Strategy
Meeting

Intellectual
Property
Strategy
Dialogue(several times
a year)(biannually)

Business
DivisionIntellectual
Property
Strategy

Hosts theIntellectual
Property
Manager
Meeting(annually)

ProposalSupportResearch & Development Division and Intellectual Property Department

42

<Key Discussions on Intellectual Property within Furukawa Electric Group>
Board of Directors
Management CommitteeIntellectual Property
Strategy Meeting

February 2021 Intellectual Property Strategy of Furukawa Electric Group
November 2023 Issues regarding activities for Chance Maximization and Risk Minimization
August 2021 Activity plan and status based on corporate-wide intellectual property activity policies
February 2021 Intellectual Property Strategy of Furukawa Electric Group
September 2021 Revision of Japan’s Corporate Governance Code(ii) Strategy
Based on the three basic policies of our Intellectual Property Strategy, the Furukawa Electric Group is promoting intellectual property
activities from the two perspectives of Chance Maximization (expansion of business opportunities) and Risk Minimization (businessstabilization) in order to achieve the Furukawa Electric Group Vision 2030.
<Chance Maximization: IP Landscaping*>
The Furukawa Electric Group lists “Reinforcing management and business strategy planning capabilities using IP landscaping” as thefirst pillar of its intellectual property strategy. To promote activities to seek new business fields and business models, we analyze thecompetitive environment and market environment using the intellectual property information of our own and other companies.
As shown in the figure below, in the domain of existing markets and products (Domain A), we aim to maximize profits in existing
businesses through a focus on capital efficiency, and we are determining the soundness of our strategies in IP landscaping. On the other
hand, in the domains related to new markets and products (Domains B, C, and D), we aim to build a foundation for creating new
businesses by strengthening development and proposal capabilities, and we use IP landscaping to reinforce our ability to formulate
strategies. In this way, we are utilizing IP landscaping from the perspective of Chance Maximization in addition to the perspective of
Risk Minimization.
* IP landscaping: When formulating management or business strategies, (1) conduct an analysis that incorporates IP information into
management and business information, and (2) share the results (including a broad view of the current status and future perspectives)with management and business managers (quoted from the Japan Patent Office “Survey Research Report on Analysis and Utilizationof Intellectual Property Information that Contributes to Management Strategies”
Risk Minimization

C

Domain A:
Maximize profits in existing businesses
through a focus on capital efficiency⇒ Determine the soundness of ourstrategies in IP landscaping

Markets

New

D

Existing

Chance Maximization

A

Domains B, C and D:
Build a foundation for creating new
businesses by strengthening development
and proposal capabilities⇒ Reinforce our ability to formulate
strategies by IP landscaping

B
Existing

New
Products

43

<Risk minimization: Intellectual property portfolio>
We minimize business risks by protecting our unique technologies that differentiate our products from others with intellectual property
rights and technical know-how.
In the domains of information, energy, and mobility, we develop and thoroughly use the intellectual property portfolio on the basis ofdetailed competitor analysis in order to grow by enhancing businesses that solve social issues. We also support maximizing the revenueof existing businesses with a focus on capital efficiency toward 2025.
Approximately half of the intellectual property rights (patent rights, utility model rights, design rights, and trademark rights) held by theCompany are related to optical fiber cables (Optical Fiber and Cable Products Division), power cable systems (Power Cable Division),
wire harnesses (Automotive Products Division), and tape for semiconductor manufacturing (AT & Functional Plastics Division) portfolio.
In these businesses, we will utilize intellectual property through the Open and Close strategy and stabilize business execution by reducing
intellectual property risks.
(iii) Risk management<Intellectual property risk management system>
Our CSR Code of Conduct includes two components: (1) protection of intellectual property rights and (2) management of confidential
information.
In accordance with the CSR Code of Conduct, we develop and thoroughly use the intellectual property portfolio based on detailed
competitor analysis (see above) while promoting global intellectual property risk reduction activities such as the prevention of technicalinformation leakage. As a risk minimization mechanism, we have introduced an intellectual property risk management system based on
the following three steps.
We conduct the intellectual property risk assessment by reviewing the key IP activity products of each business unit mainly from theviewpoints of (1) whether there is an IP network to prevent interference with business, (2) whether other companies' rights are not being
used, and (3) whether measures to prevent leakage of technological know-how are in place. In principle, we review these issues annuallyand report them to the Risk Management Committee as part of our risk management activity plan.
2Intellectual property risk communication
Dialogue based on
evaluation

1Intellectual property
risk evaluation

3+

Determine countermeasurescooperatively− Intellectual Property Department

Intellectual property
risk management− Business divisions prioritize countermeasures

evaluates intellectual property risks− General managers of business divisions determine− Intellectual Property Department

implementation of countermeasures

proposes risk countermeasures− Business divisions and Intellectual Property

Department implement countermeasuresIntellectual property risks are classified into the following four categories. We stabilize our business execution by continuously
stimulating risk responses.
Infringement risk

Conduct periodic and continuous reviews of othercompanies' rights information to ensure that our products
do not infringe on their intellectual property rights.

Avoid the risk of direct damage or lost
opportunities in the business.

Technology outflow risk

Strengthen information preservation through technicalsecrecy at development and production sites andintroduce a time stamping system. Check news releases
and other external announcements on a daily basis.

Avoid risks such as inadvertent
disclosure of confidential information.

Contract risk

In technology contracts with other companies, theIntellectual Property Department checks the contract
before conclusion.

Avoid the risk of disputes regarding theterms of agreements, such as nondisclosure agreements, joint research
agreements, and purchase agreements.

Technology counterfeit risk

Obtain patent rights, utility model rights, design rights,
and trademark rights to protect our products. Demand an
injunction and compensation for damages in the event ofimitation by other companies.

Avoid the risk of losses, such as adecline in market share.

44

(iv) Indicators and targets<Chance maximization: IP landscaping>
To ensure that the perspective of chance maximization to utilize intellectual assets is implemented at the management level, we have set
the “IP landscape implementation rate for business enhancement and new business creation themes” as a sustainability indicator for themateriality of profit opportunity, aiming for implementation in all cases (100%).
The IP landscape implementation rate has reached 77% as of the end of FY2023. Specifically, we conducted the following themes, whichwere judged to have high priority in terms of confirming business strategies, developing commercialization concepts, and gaining afoothold in customer access: “maximizing the profitability of existing business (e.g., fiber optic cables, power cable systems) with afocus on capital efficiency toward 2025” and “establishing a foundation for creating new business (e.g., green LP gas) by 2030.”
Sustainability Indicator
IP landscape implementation rate forbusiness enhancement and new businesscreation themes

Scope
Group

FY2021ResultFY2022

FY2023

FY2023

17%

40%

77%

45%

TargetFY2024FY2025100%*1, *2100%*1*1 This means that all projects with respect to the business reinforcing and/or new business creating themes set as of 2022 have been implemented.
*2 The FY2025 target has been moved forward.

<Risk minimization: Intellectual property portfolio>
Number of intellectual property rights held
Number of rights held in Japan
Research
4 business units (*3)
Number of foreign rights held
Research
4 business units (*3)

ScopeResult
FY2019Furukawa
Electric
Furukawa
Electric

FY2020

FY2021
5,175

FY20225,106

FY2023(estimate)
5,228

5,288

5,107

–

–

475

509

577

–

–

2,964

2,864

2,959

3,625

3,725

3,869

3,893

3,968

–

–

327

400

440

–

–

1,995

1,998

2,072

*3 Total of Optical Fiber and Cable Products Division, Optical Power Cable Division, Automotive Products Division, and AT & Functional Plastics
Division, including optical fiber cables, power cable systems, wire harnesses, and tape for semiconductor manufacturing<Reference indicators>
Number of intellectual property rights held
Number of patents held in Japan
Patents
Designs
Trademarks
Utility models
Number of foreign patents heldPatents
Designs
Trademarks
Utility models

Scope

Result
FY2019
5,288
4,523
386
375
4
3,625
2,910
267
394
54

Furukawa
Electric

Furukawa
Electric45

FY2020
5,107
4,388
369
347
3
3,725
2,976
274
404
71

FY2021
5,175
4,423
375
372
5
3,869
3,160
228
408
73

FY2022
5,106
4,364
365
372
5
3,893
3,225
187
411
70

FY2023(estimate)
5,228
4,480
367
379
2
3,968
3,339
161
411
57

3. Business Risks
Furukawa Electric Group’s financial results and financial situation are affected by the economic conditions in the various markets inwhich the Group sells its products and provides services.
The important risks that have the potential to affect the Group’s financial results and financial situation are listed, as shown below. Risk
items are defined as those with a medium or higher likelihood of occurrence and magnitude of impact, and, based on how the risks areperceived, they have been broadly categorized into “Management perspective risks” and “Operational perspective risks.” When
implementing responses to each risk, particularly for the management perspective risks, rather than being independent risks, they arerecognized to be mutually related. The forward-looking statements contained in the descriptions below are based on the Group’s estimatesand assumptions made as of the end of the current fiscal year.

46

Main responses

Management perspective risks

 Stagnation or deterioration of profitability and  Regularly check and verify the appropriateness of thegrowth due to an inability of the businessbusiness portfolio structure at the Management Meeting
structure to respond to changes in economic
and the Board of Directors, and deliberate andtrends and market environment
implement revisions as necessary Suffering from less-than-expected Established Business Portfolio Review Committee as an
performance or effect due to deterioration oforganization to promote the transformation of themarket environment following the conclusionbusiness portfolioof an M&A transaction or external alliance Determine whether to continue, downsize, or exit abusiness based on internal criteria such as return on
Business
invested capital (ROIC), value added to invested capital
portfolio(Furukawa Value Added, FVA), average annual growthrate of net sales, etc.
 Clarify the objective of the acquisition or alliance andget a complete picture of assets and risks in advance Make an acquisition or form an alliance with appropriate
invested capital by considering risk and return Recover invested capital at an earlier stage following theconclusion of an acquisition or alliance Delayed or suspended creation of new Integrate the sales organization and the organization
Creation ofbusinesses due to insufficient cooperation
dedicated to creating new businesses, and accelerate conew
between the sales organization and thecreation with customers in the thematic areabusinesses
planning and development organizations of
the new business As a transition risk, higher raw material
 Establish the Environmental Vision 2050, set a challenge
procurement costs and manufacturing costs
target of eliminating GHG emissions and raise or reset
due to carbon taxes enacted based on
the Environmental Target 2030
government policies or GHG emissions
 Endorsed the Task Force on Climate-related Financial
targets in each country
Disclosures (TCFD) recommendations and conductedClimate change  Exclusion from the supply chain or products,
scenario analysis(carbon neutral) services and labor markets due to an In addition to using hydroelectric power in the Nikko
insufficient response to climate changearea, install solar power and switch to procuring
 Suspension of factory operations due to an
renewable energy in Japan and overseas
unforeseen risk of flooding or drought linked  Grasp the risk of flooding and drought linked to climate
to climate changechange, and formulate responses
 Lack of specialist personnel for creating new
businesses and personnel capable ofmanaging the business portfolio
 Lack of personnel numbers and sufficiently
skilled personnel due to insufficient hiring,assimilation into the company and training Decline in employee engagement, which is
Human capitalthe driver of sustainable corporate growthandorganizations

Political andeconomicsituation

 Based on the Furukawa Electric Group Vision for Our
People, implement measures to strengthen human capitaland organizational execution abilities, which will enable
individuals and the organization to grow together byaligning their growth vectors and enhancing theattractiveness of our human resources and organization
 Strengthen various personnel management initiatives(recruitment, placement, and training) to achieve both
the realization of management and business strategies
and individual growth Monitor through surveys of human capital andorganizational execution abilities including elements of
employee engagement
 Continue and evolve leadership transformation activities
 Promote diversity and inclusion activities including
work-style reform Supply chain disruptions caused by the impact  Add redundancy within the supply chain (multipleof economic sanctions between groups of
suppliers and decentralization of manufacturing sites),
nations following the heightened
optimization of inventory quantity, and stable
repercussions of international conflicts, etc.;
procurement through long-term contracts
and supply shortages and suspensions due to  Grasp the potential risks within the main international
dependence on supply from specific suppliers
logistics routes
 Review of international division of labor due  Formulate a contingency response policy
to the impact of economic security policies
 Strengthen the foundation of key businesses to enhance Decline in earnings due to the overall
their resistance to economic downturns, and establish abusiness impact of reduced demand caused bysystem that can respond to rapid changes in demand by
the economic downturn and changes inregularly monitoring and verifying customer trends andcustomers’ policy and measures for capitalorder intake status
expenditures and purchasing Promote efficient and rational manufacturing systems to Decrease in competitive advantage of ourmaintain and strengthen price competitiveness, produce
products and services due to intensified
high value-added products, and proactively take oncompetition
initiatives to optimize product portfolio

47

Likelihoodofoccurrence

Details of the risk

Magnitudeof impact

Category

Risk item

High

High

High

High

High

High

High

High

High

High

Main responses

 Exclusion from the supply chain or products,
services and labor markets due to a potential
or actual negative impact on human rights
resulting from an inability to fulfill the
responsibility as a company to respect humanrights Promote initiatives in line with the three requirements of
the UN Guiding Principles on Business and Human
Rights for companies: “Establish a human rights policy,”“Conduct human rights due diligence,” and “Establish a
remedy mechanism.” Promote business activities that respect human rights
based on Furukawa Electric Group’s human rights
policy Provide education on human rights risks andimprovement measures based on the results ofcompliance surveys, etc., to employees of the Group Conduct the self-assessment questionnaire (SAQ) for
major suppliers based on the Furukawa Electric GroupCSR procurement guidelines
 Utilize the whistleblower system and Japan Center for
Engagement and Remedy on Business and Human
Rights (JaCER) as a remedy mechanism
 Promote business continuity management (BCM) in
accordance with ISO22301
 Develop and refine a business continuity plan andeffectively utilize a safety confirmation system
 Establish data centers in facilities that are earthquake
resistant and have a stable communications environment Add redundancy to the supply chain Survey manufacturing sites of customers and suppliers Permit employees to work from home and utilize remotemeetings, etc.

Human Rights
and Labor
Practices

Impact ofdisasters or
infectious
diseaseQuality
management

Operational perspective risks
Legalviolations(Note)

 Suspension of operations at manufacturing
sites due to flooding or building damage
caused by a large typhoon, etc. linked toclimate change Disruption of a customer’s or supplier’s
supply chain due to a large earthquake,tsunami, fire or infectious disease Inability to continue business operations dueto the occurrence of a large cluster of
infections among employees

 Unexpected future claims for damage
 Aim to realize the quality expected by customers, strive
compensation due to a defect in products andto prevent defects and continue the activities to improve
services, etc. (in particular, additional costs
problem solving ability
could be large depending on the type of defect  Continue strengthening the quality management systemfor products related to power cable,
based on the guidelines for quality control
telecommunications cable and automotive
 In preparation for damage compensation claims, enroll
products)
in product liability insurance and product recall
insurance
 Compliance violation of a law or regulation in  Establish a compliance system based on ethical andthe countries in which the group operates
legal compliance through Furukawa Electric Group
Purpose, the Core Values and Furukawa Electric Group Increased costs and business restrictions due
CSR Code of Conduct
to the revision of applicable laws andregulations and the stricter interpretation of Along with conducting a compliance self-check every
existing laws and new regulations by theyear, provide education within Furukawa Electric Groupregulatory authorities in the countries inon themes including the regulations related tocompetition laws and preventing bribery throughwhich the group operates
compliance seminars and e-learning programs Following the occurrence of a legal violation,
administrative actions or sanctions are levied  Conduct internal audits and provide education to theby the regulatory authorities, claim for
related division in regards to security export controls
damage compensation is received from an
and tariffs; coordinate with a specialist attorney for
associated party such as a business partner oroverseas export control laws
there is a negative impact on the company’s Through the regional headquarters in Southeast Asia andsocial reputation
China, integrate the procurement, accounting and HR
operations at the locations in each region
 Risk of administrative action after exportingto an embargoed country, violation of the Conduct oversight through financial analysis using data
foreign exchange law or application of export
analytics
control regulations or laws outside the region  Raise awareness of tax compliance by establishing a
in the United States or China due to thebasic tax policy
deteriorating relationship between the United  Comply with tax laws and implement responses toStates and Chinachanges in tax systems and tax administration in each Improper accounting or accounting fraud at an
country
overseas site
 Tax costs due to changes in tax systems fordomestic and international transactions ineach country, transfer pricing taxation, etc.
 Additional tax costs due to differences inviews with tax authorities in each country, etc.

48

LikelihoodofoccurrenceManagement perspective risks

Details of the risk

Magnitudeof impact

Category

Risk item

High

Med.

High

Med.

High

Med.

High

Med.

Main responses

 Rapid fluctuations in the price of non-ferrous
metals such as copper and aluminum, plastics
such as polyethylene and fuels such as heavy
fuel oil, LPG and LNG due to changes insupply and demand, speculative transactions
and global affairs

Operational perspective risks

 Reflect the market prices for non-ferrous metals, plastics
and fuels in the product sales priceRaw material Implement hedges using futures contracts
and fuel price Reduce costs and conserve energy in the production
activities
fluctuations
 Disperse the risk of price fluctuations throughprocurement from multiple sources
Information
 Unauthorized use or system failure resulting  Based on the basic policy for information security,
systems andfrom a data leak caused by an external or
strengthen security governance for the entire group,
information
human factor, such as a cyberattack orprovide education and conduct support activities
security
unauthorized access Protect information assets through measures such as
Increased security risks caused by the use ofenhancing network security from a zero-trust perspective
legacy systems
 Implement medium-term initiatives to update the legacy
systems Fluctuations in the yen-denominated value of  Utilize forward exchange contracts
overseas transactions including import and Achieve a proper balance between yen-denominated andexport and foreign-denominated monetaryforeign-denominated transactions
claims and debt
 Limit the increase in capital procurement costs resulting Fluctuations in the yen-denominated balancesfrom higher interest rates by procuring capital centeredin the non-consolidated financial statements
on long-term fixed interest rates
prepared in local currency at overseas
 Reduce interest-bearing debt based on the policy forconsolidated subsidiaries
improving the financial situation and improved capital
Exchange rate,(Annual profit is expected to decline by about
efficiency through the cash management system (CMS)
interest rate
¥0.2 billion for every ¥1 appreciation in the Structure the asset management portfolio withand share price
JPY/USD exchange rate)consideration for reducing asset management risk
fluctuations
 Increased capital procurement costs due torising interest rates(Interest-bearing debt as of the end of thecurrent fiscal year is ¥333.0 billion)
 Increased retirement benefit costs andadditional capital infusions from the company
due to lower market value of the pension
assets Delays to technology development and Secure and train personnel with a high level of expertiseappearance of alternative products developed  Secure superiority in technology development throughthrough new technology by other companies
co-creation with external partners
 Litigation, decertification or decreased
 Acquire intellectual property rights from the design andreputation of the company and its products
development stage, investigate the patents held by otherdue to falsification of the research andcompanies and file counter-patents to limit the use of
Research &development data
rights by other companies
development
 Direct damage or lost opportunities in a Create technology assets and safeguard them (byand intellectual
business due to a legal dispute with a thirdclassifying them into classified, confidential & intraproperty
party following conclusion of an insufficientcompany use only, and confidential & intra-division use
technology licensing agreement, or a dispute
only; and thoroughly managing information including
or negotiations regarding violation of a third
electronic data); provide education for ensuring legal
party’s intellectual property rights
and regulatory compliance in relation to intellectual
property; and conclude confidentiality and other Decreased competitive advantages due to theleak of technology
agreements
 An employee suffers death, inability to work,  Definitely implement the three pillars of the safety
permanent disability, long-term leave ofpromotion activity (provide and implement safety
absence or health impairment due to an
related knowledge through the training of safety
occupational accident, traffic accident orconscious persons, make the facilities safer throughactivities to promote fundamental safety and establish a
illness
safety-oriented organization by improving the level of Disasters associated with breakdowns due tosafety management)
aging equipment, caused by delays in making
Employeedecisions to invest in manufacturing facilities  Implement measures for improving health literacy,
health andsmoking, metabolic syndrome, mental health, improving
safetyphysical function, heat stroke, as well as measures forestablishing a chemical substance management systemat each site through the health management policy set
forth every year based on the medium-term occupational
health and safety plan Improve facility maintenance level and optimize
maintenance and renewal plans

49

Likelihoodofoccurrence

Details of the risk

Magnitudeof impact

Category

Risk item

Med.

High

Med.

High

Med.

High

Med.

High

Med.

Med.

(Domestic and overseas) Change in design, soaring of construction
material and labor costs during construction.
 Incurrence of additional costs during asubmarine cable laying project due todisasters, infectious diseases, and adverse
ocean or weather conditions caused, forexample, by a typhoon
 Payment of repair costs or compensation fordamages and long-term extension of thedefect warranty in the event of the occurrence
Deteriorated
of a serious defect or an accident and the
profitability of
resulting delay in construction
construction
 Unexpectedly large increase in costs or
projects
incurrence of additional costs due to a lack ofconsortium partners’ capability to carry out aproject or non-performance of tasks assigned
to them(Overseas) Changes in legal regulations, politicalinstability, and exchange rate fluctuations in acountry overseas where a construction projectis carried out

Main responses
 Strengthen activities to conclude contracts underreasonable conditions by strictly identifying ademarcation point, specifications and warranty coveragefor each of goods and construction service, and byanalyzing project-specific risks
 Mitigate risks by appropriately monitoring progress andprofitability of ongoing projects
 Transfer risks through purchase of builder’s risk
insurance Clarify responsibility relations in a contract upon
formation of a consortium, and thoroughly manage
construction progress for the entire project including theshare of partner companies

Operational perspective risks

 Occurrence of a problem in relation to At Furukawa Electric Group’s manufacturing sites,
environmental conservation due to the leak of
based on the environmental management system
toxic substances during the manufacturing(ISO14001), thoroughly comply with the various
process, and new capital expenditures or costs
environmental regulations related to the businessfollowing a revision to an environmental law
activities and implement conservation measuresor regulation
 Concerning the regulations for chemical substancecontent in products, issue CSR procurement guidelines
 Restrictions on the use or disposal of land
and green procurement guidelines, confirm the status of Additional costs following the enactment ofEnvironmental
compliance by business partners and conduct regularstricter laws or regulations concerning thepollution andchecks within Furukawa Electric Group in response tohandling of soil contamination and toxic
environmental
the enactment of stricter regulations
substances such as asbestos and PCBs that
regulations
occurred during past manufacturing activities
 Losses and expenses incurred for a productrecall or suspended production and sales due
to a violation of a country’s regulations
concerning the content of chemical substancesin products, such as the RoHS Directive and
REACH regulation.
Impairment of
non-current
assetsCashmanagement

 Impairment of a non-current asset due to Deliberate the appropriateness of investment plan atdecreased profitability caused by deteriorating
Investment Committee meeting and Management
market conditions or business environment
Meeting Regular monitoring and follow-up after the investment(Funds procurement)
 Deteriorating procurement terms andconditions or potential inability to procure
capital due to deteriorating capital market
environment
 Deteriorating procurement terms andconditions and potential enactment of
restrictions on capital procurement due todecreased credit standing following
deterioration in the financial situation of thecompany(Credit management) Occurrence of bad debt loss due to an
inability to collect accounts receivablefollowing deterioration in the financial
situation or cash position of a business partner

 Secure diverse means of capital procurement, and breakup the repayment timing
 Establish commitment lines and secure a certain amountof cash on hand
 Increase the ratio of long-term debt while balancing with
reductions to capital procurement costs
 Improve the financial situation
 Minimize the risk of delayed collection or inability tocollect accounts receivable by regularly monitoring thecredit status of each client in accordance with the credit
management regulations and sharing credit information
between the companies affiliated with Furukawa Electric
Group

50

Likelihoodofoccurrence

Details of the risk

Magnitudeof impact

Category

Risk item

Med.

Med.

Med.

Med.

Med.

Med.

Med.

Med.

Main responses

 Reduced trust due to lack of appropriate
information disclosure Lost recognition opportunities and image
enhancement opportunities due to lack ofconsistent communication

Likelihoodofoccurrence

Details of the risk

Magnitudeof impact

Category

Risk item Establish an appropriate management system anddisclose information in a timely and appropriate manner,
including the centralized knowledge and management of
information deemed to have a significant impact on
Disclosure
management and the selection of disclosure methods
Med.
Med.
and brand
appropriate to the scale and nature of the information
 Strengthen the delivery of a unified message through theuse of multiple media
 Consider a concept, slogan and logo to unify the brands
Note: We have been under investigation by the Brazilian competition law authorities concerning auto-parts cartel. In addition, the Company and its
consolidated subsidiaries are the defendant in a series of class actions that seek compensation for damages caused by the auto-parts cartel in the
United States. It may also be possible that the Company and its associates pay compensation for civil damages to their customers including
automobile manufacturers. However, the Company has reached settlement with some plaintiff and customers concerning the above-mentioned
on-going cases, and thus believes that it will have limited monetary impact on its financial results. We will continue to work with our corporate
lawyers to resolve the issue early and minimize losses. Note that above on-going cases are all related to past violations of competition law
including auto-parts cartel, and there are no such violation committed at this point in time.

51

4. Management’s Discussion and Analysis of Financial Position, Operating Results and Cash FlowsAs the Group changed the accounting policies from the beginning of the current fiscal year, the figures after the retroactive application
are used to perform the comparative analysis with the previous fiscal year. For details, refer to “Item 5. Financial Information, 1.
Consolidated Financial Statements, etc., (1) Consolidated Financial Statements, Notes—Changes in accounting policies.”
Overview of operating results, etc.
(1) Operating results
Looking at the global economy in the current fiscal year, although the United States saw demand-restraining effects of tightenedmonetary policy, the U.S. economy has remained strong as consumer spending was underpinned by steady employment and increased
real income, and strong corporate capital expenditure was observed due to the government’s industrial support package among others.
In Europe, although the improvement of real income supported consumer spending, the economy has slowed down because there wasstill strong downward pressure on the economy due to inflation and continued monetary policy tightening, as well as remaining impactof rising prices due to energy price hike and supply constraint. In China, even though infrastructure investments as a part of growthoriented policy underpinned the economy, in addition to the real estate market stagnation, there was no sign of consumer spending
recovery. Accordingly, the Chinese economy has slowed down. Moreover, the global economic environment has remained uncertain
due to the constant state of insecurity such as the Russia-Ukraine situation and the military clash in the Middle East.
In Japan, despite a sign of consumer spending recovery backed by the improvement of employment and income environment, theeconomy has remained on a moderate recovery path due to downward effects of rising prices on consumption and the delay in capital
expenditure due to shortage in labor, among others.
Under such circumstances, the Group defined its ideal state in 2030 and specified relevant target timeline and scope in “Furukawa
Electric Group Vision 2030” (hereinafter, the “Vision 2030”); and then formulated the Medium-term Management Plan “Road to the
Vision 2030: Transformation and Challenges” (hereinafter, “MTMP 2025”), looking forward from its ideal state in 2025 by backcastingfrom the Vision 2030. Based on the MTMP 2025, the Group has been working on “maximizing revenue from existing businesses byfocusing on capital efficiency” and “strengthening the foundation for the creation of new businesses by strengthening development andproposal capabilities.” Furthermore, the Group has also strived for “strengthening the foundation for ESG management” as it supports
the above-mentioned two initiatives.
With respect to “maximizing revenue from existing businesses by focusing on capital efficiency,” based on the positioning of eachbusiness which was visualized from the perspective of growth potential and profitability, the Group has promoted management with afocus on capital efficiency. As for Communications Solutions business, the Group has worked on increasing the profit margin throughthe improvement of the product mix by increasing a percentage of sales of high-value-added products. As for Automotive Products &Batteries business, the Group has continued to improve the system in a way to flexibly adapt to any change of customers’ productionplans, and also worked on optimizing selling prices.
With respect to “strengthening the foundation for the creation of new businesses by strengthening development and proposal capabilities,”
the Group has supplied superconductive wire rods to a UK client company, which works on development of nuclear fusion* power
generation that is expected to be a next-generation energy source, and moved forward to strengthen the partnership with the company
by making a new investment in the company. In Japan, the Group participated in a council, which was established for creating businesses
related to clean energy, including nuclear fusion power generation. Furthermore, while Japan’s social infrastructure, such as roads andrailroads, are aging and labor population is declining, the Group has strived to take orders for digital solutions for operation andmaintenance of social infrastructure.
*Nuclear fusion: The energy is released from nuclear fusion reactions by trapping high-temperature plasma (at several hundred million degrees), using
strong superconducting magnet. The fuel of nuclear fusion comes from seawater (deuterium=2H), so it is possible to generate power without CO2
emissions, with reduced environmental burdens. Therefore, nuclear fusion power generation is attracting expectations as a next-generation energy source.

With respect to “strengthening the foundation for ESG management”, the Group has been working on achieving “Furukawa ElectricGroup Environmental Targets 2030”, aiming at contributing to realizing a carbon-free society and a recycling-based society for waterand resources; and reduced CO2 emission by realizing the use of virtually renewable energy source for all electric power at some factories.
Furthermore, the Group has implemented initiatives for “strengthening human capital management and organizational execution abilities”
in order for each employee and organization to improve their execution abilities and grow, the Group conducted research to monitor thecurrent situation, and incorporate improvement measures into business activities based on the results. In addition, as a mechanism toenable the management team to further promote ESG initiatives, a new compensation system for officers that include ESG-linked
compensation was launched.
With regard to the current year’s financial results, net sales of the entire Group declined due to a downturn in demand for optical fibers
attributable to customers’ reduction in investments in Communications Solutions business, despite an increase in sales from automotive
products such as wire harnesses in Electronics & Automotive Systems business. In terms of profits and losses, despite the efforts for
optimizing selling prices, profits declined due to a decrease in sales and hike of raw material and fuel prices.
As a result, the Company recorded consolidated net sales of ¥1,056.5 billion (down 0.9% year-on-year), consolidated operating profitof ¥11.2 billion (down 27.7% yoy), and consolidated ordinary profit of ¥10.3 billion (down 40.5% yoy). Furthermore, a gain on sales ofinvestment securities of ¥12.0 billion, etc. was recorded as extraordinary profit, and a loss on disposal of non-current assets of ¥1.5
billion, etc. was recorded as extraordinary loss. Accordingly, profit attributable to owners of parent amounted to ¥6.5 billion (down
59.1% yoy). Overseas sales amounted to ¥545.2 billion (down 0.7% yoy), and the overseas sales ratio was 51.6% (up 0.1 percentage
52points yoy).
On a non-consolidated basis, the Company recorded net sales of ¥296.8 billion (down 3.0% yoy), operating loss of ¥9.1 billion(deteriorated by ¥7.3 billion), ordinary profit of ¥0.3 billion (down 96.2% yoy), and net income of ¥1.9 billion (down 92.4% yoy).
Operating results by segment are as follows:
InfrastructureWith respect to Communications Solutions business, while demand for optical fibers and optical components declined due to customer’s
reduction in investments and prolonged inventory adjustments, and sales in Latin America declined due to the slowing networking
market, the Company has worked on increasing the profit margin through the improvement of the product mix and optimizing selling
prices in response to the hike of raw material and fuel prices. However, affected by the sales decrease, it recorded declines in both net
sales and profit.
With respect to Energy Infrastructure business, industrial cables & power cable accessories division fared well due to the sales expansionof functional cables, such as light-weight and flexible aluminum CV cables that contribute to power-saving and increased efficiency atconstruction sites. Power cable division saw strong demand for extra-high voltage underground cables in Japan, and steady growth ofsubmarine and underground cables for renewable energy. However, largely affected by the slowdown of the Chinese market, Energy
Infrastructure business as a whole recorded an increase in net sales and a decline in profit.
As a result, this segment recorded consolidated net sales of ¥278.2 billion (down 14.1% yoy), and consolidated operating loss of ¥11.3
billion (deteriorated by ¥19.9 billion yoy). On a non-consolidated basis, the segment reported net sales of ¥77.4 billion (down 13.8%
yoy).
As for Communications Solutions business, in addition to continuing to further improve the percentage of sales of high-value-added
products, we will expand sales of products for FTTx/data centers mainly in the North American market, and strengthen global expansionof networking system that provides a whole package consisting of optical fiber product sales, support in network design/operations, andafter-the-sales services, aiming to increase net sales. We will also move ahead with the improvement of the production system inpreparation for the recovery of demand for optical fibers and optical components among others. As for Energy Infrastructure business,
we will continue to focus on the key areas where the market expansion is expected, including domestic extra-high voltage undergroundcables, as well as submarine and underground cables for renewable energy, and reinforce our cable production capacity and construction
capacity. We will also promote order-taking activities with an emphasis on securing profits and optimize selling prices, while securing
net sales through marketing activities toward further sales expansion of products for power transmission and distribution and functional
cables such as aluminum cables.
Electronics & Automotive Systems
Automotive Products business has focused on expanding sales of lightweight aluminum wire harnesses which contribute to promoting
carbon neutrality, and wire harnesses which can carry high voltage, for which demand is expected to grow due to the expansion of theelectric vehicles market. It has also strived to improve productivity while focusing on preparing a system that can flexibly respond to
any sudden change in automotive production plan. Furthermore, it has worked on optimizing selling prices in response to the hike ofraw material and fuel prices. Accordingly, both net sales and profit increased.
With respect to Electronics Component Material business, while auto components have been on the recovery track, demand forelectronics-related products has remained sluggish. Despite the efforts for improving the product mix through the sales expansion ofhigh-value-added products and optimizing selling prices in response to the hike of raw material and fuel prices, profit decreased while
net sales increased.
As a result, this segment recorded consolidated net sales of ¥653.7 billion (up 7.1% yoy), and consolidated operating profit of ¥18.7
billion (increased by ¥14.0 billion yoy). On a non-consolidated basis, the segment reported net sales of ¥141.5 billion (down 7.3% yoy).
As for Automotive Products business, we will continue to work on sales expansion of aluminum wire harnesses, and wire harnesses thatcan carry high voltage; reduce costs by improving the productivity through the improvement of operational processes, the leveling ofproduction, and optimization of inventory level; and promote the development of products toward the expansion of the electric vehicles
market, aiming at securing net sales. As for Electronics Component Material business, we will continue to improve the product mix
through upgrading the product line-up of resistant material for the auto component market and expanding sales of heat-resistant, oxygenfree copper strips for power semiconductors and heat radiation components, along with the optimization of selling prices.

53

Functional Products
With respect to Functional Products business, net sales from broad-ranging products declined, because of the downturn in global demandfor products for smartphones, personal computers, and hard disk drives since the second half of FY2022, along with the associatedadverse effect of prolonged inventory adjustments in the supply chain. However, due to strong sales of high-value-added products backed
by the rapid growth of generative AI-related demand, profit increased, while net sales decreased.
As a result, this segment recorded consolidated net sales of ¥115.4 billion (down 8.7% yoy), and consolidated operating profit of ¥5.5
billion (up 31.8% yoy). On a non-consolidated basis, the segment reported net sales of ¥73.4 billion (up 22.2% yoy).
As for Functional Products business, we will improve the production system in anticipation of further growth of demand from generative
AI-related markets, etc. and bring in new customers by proceeding with further sales expansion of high-value-added products, aiming at
the business growth.
Services and Developments etc.
This segment supports the Group’s businesses through hydropower generation, R&D of new products, real estate leasing, and various
services. In our Nikko Works, most of its necessary electric power comes from a renewable energy source (hydropower). Thishydropower generation plays a role toward achieving our sustainability target “ratio of renewable energy use to total consumption: 30%”
defined in the MTMP2025.
This segment recorded consolidated net sales of ¥31.6 billion (down 0.5% yoy), and consolidated operating loss of ¥1.9 billion (improvedby ¥0.2 billion yoy). On a non-consolidated basis, the segment reported net sales of ¥4.3 billion (up 32.8% yoy).
(2) Cash flows
Cash and cash equivalents at the end of the current fiscal year were ¥53.1 billion (up ¥1.1 billion from the end of the previous fiscal
year).
(Cash flows from operating activities)
Net cash provided by operating activities amounted to ¥31.9 billion (down ¥4.6 billion from the previous fiscal year) mainly due to therecording of profit before income taxes of ¥20.1 billion, depreciation of ¥39.0 billion, loss (gain) on sale of short-term and long-term
investment securities of ¥(11.3) billion, and income taxes refund (paid) of ¥(11.1) billion.
(Cash flows from investing activities)
Net cash used in investing activities amounted to ¥24.8 billion (up ¥3.1 billion from the previous fiscal year) mainly due to purchase ofproperty, plant and equipment of ¥(36.4) billion and proceeds from sale and redemption of investment securities of ¥13.0 billion.
(Cash flows from financing activities)
Net cash used in financing activities amounted to ¥9.3 billion (down ¥25.2 billion from the previous fiscal year) mainly due to proceedsfrom long-term borrowings ¥29.6 billion, repayments of long-term borrowings of ¥(25.4) billion, net increase (decrease) in short-termborrowings of ¥(12.0) billion, and net increase (decrease) in commercial papers of ¥7.5 billion.
Status of production, orders received and sales
Items produced/sold by Furukawa Electric Group are wide-ranging and diverse. Even the products of the same type are not necessarily
uniform in capacity, construction, form or other respects. In addition, as many of its products are not produced on a made-to-order basis,
we do not indicate production volume and order volume in monetary amounts or quantities by segment.
Analysis of financial position, operation results, and cash flows(1) Financial position
Total assets at the end of the current fiscal year increased ¥51.5 billion from the end of the previous fiscal year to ¥985.0 billion. This isbecause of increases in notes and accounts receivable - trade, and contract assets of ¥16.2 billion; inventories of ¥11.4 billion; property,
plant and equipment of ¥9.4 billion; and investment securities of ¥12.1 billion.
Working capital, which is current assets less current liabilities, increased ¥11.1 billion from the end of the previous fiscal year to ¥116.9
billion.
Property, plant and equipment, and intangible assets fluctuated mainly due to an increase of ¥39.0 billion in capital expenditures, adecrease of ¥39.0 billion in depreciation, and decreases due to sale and retirement.
Total liabilities increase ¥22.6 billion from the end of the previous fiscal year to ¥627.0 billion, with interest-bearing debt, including
borrowings, bonds, and commercial papers, having increased ¥9.2 billion compared to the end of previous fiscal year to ¥333.0 billion.
Total net assets increased ¥28.9 billion from the end of the previous fiscal year to ¥358.0 billion. Accumulated other comprehensive

54

income increased ¥25.2 billion. As a result, the equity capital ratio rose 1.0 percentage point to 33.3%.
For overview of cash flows, refer to “4. Management’s Discussion and Analysis of Financial Position, Operating Results, and Cash Flows,
Overview of operating results, (2) Cash flows.”(2) Operating results
During FY2023, consolidated net sales decreased 0.9% year on year to ¥1,056.5 billion, and consolidated operating profit decreased
27.7% year on year to ¥11.2 billion. Specifically, net sales of the entire Group declined due to a downturn in demand for optical fibers
attributable to customers’ reduction in investments in Communications Solutions business, despite an increase in sales from automotive
products such as wire harnesses in Electronics & Automotive Systems business. In terms of profits and losses, despite the efforts for
optimizing selling prices, profits declined due to a decrease in sales and hike of raw material and fuel prices.
Among non-operating income or expenses, interest expenses increased ¥2.9 billion year on year, whereas share of profit of entities
accounted for using equity method improved by ¥2.7 billion. As a result, consolidated ordinary profit decreased 40.5% year on year to¥10.3 billion.
Extraordinary income, net of extraordinary losses, came in at ¥9.8 billion. Specifically, the Group recognized gain on sale of investment
securities of ¥12.0 billion in extraordinary income, and loss on disposal of non-current assets of ¥1.5 billion and others in extraordinary
losses.
As a result of the above, profit attributable to owners of parent decreased 59.1% year on year to ¥6.5 billion.
For overview of operating results by segment, refer to “4. Management’s Discussion and Analysis of Financial Position, Operating
Results, and Cash Flows, Overview of operating results, etc., (1) Operating results.”(3) Funding sources of capital and liquidity of funds
Furukawa Electric Group has funded its growth investments for continuing and developing its business activities, as well as its working
capital needs through a variety of funding sources. Such sources include cash flows from operating activities, borrowings from financial
institutions, debt financing through the issuance of corporate bonds and commercial papers, and securitization of assets. We determine
specific methods of funding in view of market environments and the Group’s balance sheet and with a view to ensuring economic
rationality and stabilizing financial structure.
In Japan, China, and Thailand, we have introduced Cash Management Systems (CMS) to ensure efficient use of funds.
We have also secured a level of liquidity on hand sufficient enough to cover short-term repayments with cash on hand and committedlines of credit.
Significant accounting estimates and underlying assumptions
The consolidated financial statements of the Group are prepared in compliance with accounting principles generally accepted in Japan.
In preparing the financial statements, we use estimates and assumptions that affect the reported amounts of assets, liabilities, revenues,
and expenses. These estimates and figures based on these assumptions, however, may differ from actual results.
For details of significant estimates and assumptions used in preparation of financial statements, refer to “Item 5. Financial Information,
1 Consolidated Financial Statements, etc., Notes to Consolidated Financial Statements (Significant accounting estimates).”55

5. Material Contracts, etc.
Not applicable.

6. Research and Development Activities
Aiming to achieve “Furukawa Electric Group Vision 2030,” the Group is actively engaging in research and development to solve social
issues in an area overlapping the information, energy, and mobility. During the current fiscal year, the Group’s laboratories anddepartments in Japan including Sustainable Technology Laboratory, Electronics Laboratory, Photonics Laboratory, Material Laboratory,
Digital Transformation & Innovation Center, as well as those overseas including OFS Laboratories, LLC (United States), Furukawa
Electric Institute of Technology Ltd. (Hungary), SuperPower Inc. (United States), and Silicon Valley Innovation Laboratories, Furukawa
Electric (United States) formed the core of the Group’s research and development structure.
Research and development costs for the current fiscal year increased 5.2% year-on-year to ¥24,539 million. The following are the main
results and achievements of each segment.
(1) Infrastructure(i) To realize next-generation network switch devices with high capacity and low electricity consumption, we have developed externallaser source products for Co-Packaged Optics (CPO) with excellent energy efficiency and started mass production in January 2024.
The product is embedded with high output DFB laser diode chip that offers higher wall-plug efficiency while realizing both increasein transmission speed and decrease in power consumption.
We also developed a 19-core multi-core fiber by increasing just the number of cores in the conventional single mode fiber, withoutchanging the outer diameter. This is to accommodate the expectations toward application of multi-core fibers in opticalcommunication at data centers and on land. We reported our achievement at the 2024 Optical Fiber Communications Conference
and Exhibition (OFC).
Our research activity also includes O-band, which could increase channel capacity of optical fiber communication. Though it had
been considered difficult to accelerate speed and increase capacity further under the conventional direct-modulation method, we
achieved the world’s first success in large-capacity coherent high-density wavelength division multiplexing transmission
experiment in a joint research with KDDI Research, Inc. In this experiment, we used ultrawideband bismuth-doped fiber amplifiersfor O-band, a product that uses our proprietary technology, to compensate the weakness in O-band, which is its high transmission
loss.
Furthermore, after being selected to participate in New Energy and Industrial Technology Development Organization (NEDO)’s
project, “Research and Development Project of the Enhanced Infrastructures for Post 5G Information and Communications
Systems/Development of Manufacturing Technologies for Advanced Semiconductors” in February 2024, we have accelerated our
research and development for creating an optical semiconductor device that realizes photonics-electronics convergence. In addition,
in relation to the “Research and Development for Advanced Optical Transmission Technology Contributing to Green Society”
project consigned from Ministry of Internal Affairs and Communications, we laid down hollow core fiber cables, which are expected
to realize low-latency, high-capacity information transmission, within the campus of Keio University and are conducting experiment
aimed for commercialization.
(ii) As our initiative to support electrification in mobility, we sell the “BRACE® series” Blue-IR hybrid laser equipped with a highbrightness blue laser diode module, as part of our lineup of high-power laser for processing. As a new addition to the” BRACE®
series,” we worked together with NICHIA CORPORATION in developing a blue laser diode module with an increased output thatexceeds 500W, more than double the current performance. This product contributes to improving the productivity (with improved
quality and processing speed) in the process of welding copper, which is a conductor in lithium-ion batteries, motors, inverters, andother key components of electric mobility products, as well as labor saving in the manufacturing process.
(iii) As our initiative aimed toward carbon neutrality, we are pushing forward with the development of bipolar storage batteries jointlywith The Furukawa Battery Co., Ltd. in a bid to contribute to stable supply of electricity generated from renewable energy sources.
The bipolar storage batteries are electricity storage batteries with simple structure and thus are easy to achieve high capacity, andcan reduce air conditioning costs during operation like the conventional lead storage batteries. Since April 2023, we have been
conducting performance verification tests jointly with KANDENKO CO., LTD. and The Furukawa Battery Co., Ltd. Through thisexperiment, we are working on co-creation project to implement bipolar storage batteries in society.
Consequently, research and development costs for the segment amounted to ¥12,876 million.
(2) Electronics & Automotive Systems(i) As our initiative toward meeting growing demand in the EV market amid the trend for carbon neutrality, we have continued tofocus on developing high-voltage harnesses and high-voltage components. As a result, we have mass-produced and delivered the
newly developed converter box for EVs to customers, and the EVs equipped with this product has been on the market since July2023.
For connectors and electrical wires for EVs, we are continuing the development of next generation products and materials forterminals such as those for surface treatment. For automotive wiring harnesses, we are working on expanding the range of56

applications of aluminum wires using our proprietary ɑ terminals to meet the growing needs for weight reduction of vehicles.
We are pushing ahead with expanding sales of and orders for BSS® (lead battery state detection sensor) developed by our Company,in anticipation of an expected increase in in-vehicle electronics and software updates since BSS® helps improve fuel efficiency bycontrolling overcharge and prevent batteries from dying due to over-discharge.
In addition, we have succeeded in world’s leading transmission of 9.1kW of power using the electric resonance coupling method,which is lightweight and tend not to heat foreign metals. We have developed a wireless port charger for electric kick scooters
employing the method jointly with OBAYASHI CORPORATION and is continuing the process of demonstration test.
As for materials development, we have continued to develop copper alloy and precious metal plating with high strength,
conductivity, and function. Through this development, we will meet a growing demand for multi-polar, high-density, and heatgeneration control in connecting parts (e.g. connectors and terminals) for electronics, higher-performing resistors (e.g. chip resistors
and shunt resistors) that detect and control electric current, and higher-voltage and higher-current electrical components (e.g. wire
harnesses).
Furthermore, for materials used in high-power laser for processing, we have realized a high level of quality, depth, and welding
speed in processing pure copper, a material considered difficult to process due to its extremely high optical reflectivity.
(ii) As our initiative toward autonomous driving, we are mass-producing in-vehicle 24GHz perimeter monitoring radars, which provide
stable detection of obstacles even in bad weather conditions such as snow and rain, and perimeter monitoring radars with upgradedfunctions that enable forward monitoring as well as rear monitoring to respond to sophistication of advanced safe driving assistancesystems, while reducing the size and weight by about 30%. We have also started the mass production of perimeter monitoring radars
for construction/agricultural machineries, taking advantage of their strong resistance against stains and dust.
(iii) As our initiative toward simulation and analysis technologies, we are further enhancing the efficiency of research and developmentby making effective use of advanced analytical equipment at universities and public institutions. We used deformation and stresssimulations for automotive components, such as wiring harnesses; and vibration, thermal fluid, and electromagnetic field
simulations for development of electronic devices. Furukawa Electric Institute of Technology Ltd. (Hungary) has worked to develop
advanced simulation technologies, and carried out molecular dynamics simulations for catalyst structure analysis.
Consequently, research and development costs for the segment amounted to ¥5,219 million.
(3) Functional Products(i) In accordance with the “Furukawa Electric Group Environmental Vision 2050,” we are making efforts to contribute to carbon-freesociety, recycling-based society for water and resources, and society that is in harmony with nature. To press ahead with the use ofrecycled materials throughout the entire value chain to reduce CO2 emissions, we have developed RC grade of “EFCELL,” a noncross-linked polypropylene sheet with low foaming ratio, which increased that ratio of recycled polypropylene used from theconventional 50% to 100%, and wood flour-mixed, landscape-matching color for GREEN TROUGH, which is made by adding
discharged wood flour to recycled plastic.
As our initiative toward carbon neutrality, we are pushing ahead with the development of cellulose fiber reinforced resin, “CELRe®.”
This product applies the high-dispersion technology for cellulose fiber to satisfy both strength and impact resistance while realizing
lower production cost. Furthermore, we are developing technologies for mass-production of cellulose fiber reinforced resin, whichis expected to be used in various applications, including vehicles. We are also conducting verification of the application of cellulose
fiber in plastic recycling technology. As part of our initiative outside the Company, we participate in Plastics Smart initiative led
by Ministry of the Environment.
Further, we are focusing on developing heat pipe type heat sink to address higher heat generation of products and meet the need forthinner and lighter products, in addition to products that help control higher heat generation density at data centers, products that
help control higher heat generation of electronics and adapt to their lighter weight, and products using thermal technologies catering
to next-generation mobility.
(ii) In the field of information, given that printed circuit boards (PCBs) used in routers, switches, and antennas for telecom base stations,and servers, etc. for generative AIs and data centers, are becoming increasingly high-frequency, and the demand for copper foil,
which constitutes a high-frequency PCB, is on the rise, we have developed and is mass-producing FOX-WS. This copper foil fornext-generation high-frequency PCBs is capable of catering to higher frequency.
Consequently, research and development costs for the segment amounted to ¥1,869 million.
(4) Service and Developments, etc.
(i) In the field of superconductivity, we are leveraging our development and production resources for low-temperature superconducting
wire materials and high-temperature superconducting wire materials to push forward the new product development and proposals
to customers.
Superconducting Products Department has developed and mass-produced low-temperature superconducting wire materials, and isselling new product with self-welding feature that help customers improve the production efficiency of coils.
SuperPower Inc. (US) carries out research and development and production of yttrium-based, high-temperature superconducting
wire materials. By combining with low-temperature superconducting wire materials made by the Company, the high-temperature
superconducting wire materials are used in high-field magnets essential to the development of new materials and advanced
pharmaceuticals. Further, in the field of advanced prototype fusion devices, we have been strengthening ties with high-profile57

customers overseas through the supply of high-temperature superconducting wire materials. Among such customers, we enteredinto an investment agreement with Tokamak Energy (UK) to invest approximately 10 million pounds, strengthening partnershipwith the company to push forward commercial fusion energy.
In addition, we serve as a director of Japan Fusion Energy Council, established in March 2024 by Cabinet Office. We are committing
to fostering fusion industry through activities undertaken by the council. Moreover, through joint research with Kyoto University
carried out as part of JST-Mirai Program by Japan Science and Technology Agency (JST), we developed high-temperature
superconducting collected cable that can reduce AC loss in a kiloampere-level.
(ii) Silicon Valley Innovation Laboratories, Furukawa Electric (US) has pushed forward with open innovation jointly with stakeholdersof the innovation ecosystem, consisting primarily of start-ups, with the aim of creating new technologies and businesses that solve
social issues. Specifically, the company has partnered with a local accelerator to establish a co-creation function, whereby we aim
to create new customer experience and new value by integrating Furukawa Electric Group’s core technologies with technologies
and business models of companies flocking in Silicon Valley. Through cooperation with universities in US, we also began exploring
new technologies for solving not only technical challenges of our Company but social issues as well. Moreover, by carrying out
marketing activities including the gathering of VOC (Voice of Customer) through the local network and ecosystem survey andanalysis in North America, the Laboratory is functioning as the North American incubation base of our technologies.
(iii) Social Design & New Business Development Department, which is responsible for the development of both technologies andbusinesses, has worked to develop new businesses by leveraging the Company’s technologies in each of the following fields among
others: social infrastructure maintenance and management, life science, and aerospace. In the field of social infrastructure
maintenance and management, we are accelerating market development and steadily implementing our infrastructure-related digitaltransformation services, mainly “Michiten” and “Tetsuten,” and infrastructure lasers using our laser technology, for use in society.
In the field of life science, we are continuing the co-creation with MFOPTEX Co., Ltd., founded in December 2022, to develop
parts for medical devices by using optical technology and to expand their market. In the field of aerospace, we are leveraging thesocial collaboration course that began in FY 2023 with the School of Engineering, the University of Tokyo to fuel the creation of
new businesses.
(iv) To realize carbon neutrality by 2050 and to stably supply sustainable energy, we are working towards implementing green LPG
that is free of fossil fuels, in society. With the target of producing green LPG in the scale of several million tons annually aroundthe world, in November 2023, we signed a memorandum of understanding on collaboration in green LPG with Astomos Energy
Corporation and Futuria Fuels (the Netherlands). These companies have know-how on commercialization as well as international
LPG supply network.
Additionally, through our engagements to develop plant for demonstration test in Shikaoi Town, Hokkaido, as well as co-creation
with Hokkaido University, we are forging ahead with the development of technologies toward realizing a decarbonized, recycleoriented society by making maximum use of various regional resources while also committing to develop specialists.
(v) To address the intensifying natural disasters in recent years, we developed “Minnan Support,” a service offered to municipalities tohelp the voluntary evacuation of residents during wind and flooding events. To date, demonstration tests were carried out at seven
districts including Satsumasendai City in Kagoshima, Misato Town in Shimane, and Nagano City in Nagano. The results werehighly regarded and the Company was awarded the Excellence Award at Japan Resilience Award 2023, which recognizes andcommends organizations for their advanced initiatives in creating resilient society for next generation. We began the implementationof this service at Misato Town in Shimane in June 2023, through our support in assisting the formulation of district disasterprevention plan. We are contributing to the creation of stronger coordination between self-help, mutual aid, and public assistance.
Consequently, research and development costs for the segment amounted to ¥4,574million.

58

Item 3. Information about Facilities
1. Overview of Capital Expenditures
During FY2023, the Group (the Company and its consolidated subsidiaries) made capital expenditures totaling ¥38,953
million, down 11.0% compared to the previous fiscal year.
Overview of our capital expenditures by business segment is as follows.
In the Infrastructure segment, we invested primarily in expanding production capacity of optical communications devices andupgrading the testing equipment for power cables. As a result, capital expenditures during the current fiscal year came in at¥9,757 million. In the Electronics & Automotive Systems segment, we invested primarily in expanding production capacities
of automotive electronic components and enamel wires for electronic component materials. As a result, capital expendituresduring the current fiscal year came in at ¥15,523 million. In the Functional Products segment, we invested primarily in
expanding production capacity of tapes for semiconductor process and heat sinks for data centers. As a result, capital
expenditures during the current fiscal year came in at ¥9,117 million. Also, in the Services and Development, etc. segment, weinvested primarily in seismic reinforcement of buildings and upgrading common infrastructure such as the Group’s ERP
systems. As a result, capital expenditures came in at ¥1,898 million, with corporate or adjusted amount of ¥2,655 million.
Major capital investment projects completed during the current fiscal year include the replacement of ERP systems in theautomotive products business and the expansion of production capacity for automotive electronic components.

59

2. Major Facilities
Major facilities for the Group (the Company and its consolidated subsidiaries) are as follows.
(1) Reporting company

As of March 31, 2024
Carrying amount (million yen)

Names of office(location)

Name of segment Description of facilities Land area
(thousandm2)

Buildings Machinery, Tools, etc.
(incl.
andequipment,
construction
structures
vehiclesin progress)

Leasedassets

Total

Number of
employees(persons)

Chiba Works(Ichihara-shi, Chiba
Pref.)

Infrastructure,
Services andDevelopment, etc.

Manufacturing and
R&D facilities for
optic-related devices,
power cables, etc.

3,097
(658)

11,399

8,303

3,737

2

26,539885

Nikko Works(Nikko-shi, Tochigi
Pref.)

Functional
Products,
Electronics &Automotive
Systems, Services
and Development,
etc.

Manufacturing and
R&D facilities forcopper alloys,
aluminum substrates
for memory disks,
etc.

445
(685)

8,090

4,661

2,533

–

15,731

583

Hiratsuka Works(Hiratsuka-shi,
Kanagawa Pref.)Infrastructure,
Functional
Products, Services
and Development,
etc.

Manufacturing and
R&D facilities for
products, such asfunctional plastics,
information andcommunications
equipment, heatdissipation products,
etc.

493
(213)

4,316

3,097

1,684

–

9,591

742

Mie works(Kameyama-shi, Mie
Pref.)

Infrastructure,
Functional
Products,
Electronics &Automotive
Systems

Facilities for
manufacturing
optical fiber cables,
copper wires, copper
alloys, tapes forsemiconductor
process

1,004
(532)

12,633

5,605

4,439

–

23,682

584

Copper Foil Division(Nikko-shi, Tochigi
Pref.)

Functional
Products

Facilities for
manufacturing
electrodeposited
copper foils

1,057
(154)

598

645

157

30

2,489

151

Head Office and officereporting directly tothe head office(Chiyoda-ku, Tokyo)

Corporate(corporate
administration
operations, sales
operations)

Corporate
administration, saleof products, etc.

5,862
(68)

3,801

265

894

57

10,882

1,130

Services andDevelopment, etc.
(R&D)

R&D facilities andequipment for
infrastructure,functional products,
electronics &automotive systems

0
(7)

1,195

165

240

－

1,600

236

Yokohama Works(Nishi-ku, Yokohamashi)60

(2) Subsidiaries in Japan

As of March 31, 2024
Carrying amount (million yen)Company name
(Location)

Name of segment Description of facilities Land area
(thousandm2)

Buildings Machinery, Tools, etc.
(incl.
equipment,
andvehicles construction
structuresin progress)

Leasedassets

Total

Number of
employees(persons)

The Furukawa BatteryCo., Ltd.
(Iwaki-shi, Fukushima
Pref.)

Electronics &Automotive
Systems

Facilities for
manufacturingstoragebatteries/power
supply units

1,161
(104)

2,157

1,364

269

283

5,236

438

Furukawa Automotive
Systems Inc..
(Inugami-gun, Shiga
Pref.)

Electronics &Automotive
Systems

Facilities for
manufacturing
automotive
components

647
(72)

2,058

159

230

5

3,101

741

Furukawa Nikko
Power Generation Inc.
(Nikko-shi, Tochigi
Pref.)

Services andDevelopment, etc.

Facilities for electric
power generationand transmission

650
(267)

3,376

3,370

111

–

7,508

38

(3) Overseas subsidiaries

As of March 31, 2024
Carrying amount (million yen)Company name
(Location)

OFS Fitel, LLC(Norcross, USA)
Furukawa Circuit Foil
Taiwan Corporation(Yunlin County,
Taiwan)Furukawa Automotive
Systems Lima
Philippines, Inc.
(Lipa City, Philippines)
Furukawa Electric
LatAm S.A.
(Curitiba, Brazil)

Name of segment Description of facilities Land area
(thousandm2)

Infrastructure
Functional
Products
Electronics &Automotive
Systems
Infrastructure

Furukawa Automotive
Electronics &Parts (Vietnam) Inc.
Automotive(Ho Chi Minh, Vietnam) Systems

Facilities for
manufacturing
optical fibers
Facilities for
manufacturing
electrodeposited
copper foils

Total

Number of
employees(persons)

1,051
(270)

8,739

4,763

632

274

15,461

256

1,301
(40)

2,270

6,700

576

159

11,009

257

–
(–)

3,972

3,045

221

995

8,234

5,972

645
(282)

1,238

3,271

3,824

32

9,013

1,233

–
(–)

1,858

4,440

240

928

7,468

6,705

Facilities for
manufacturing wire
harnesses
Facilities for
manufacturingcommunication
cablesFacilities formolding
wire harnesses andelectric cables

Buildings Machinery, Tools, etc.
(incl.
Right-ofequipment,
andstructures vehicles construction use assets
in progress)

Note: Among all subsidiaries, only major ones are listed above.

61

3. Planned Addition, Retirement, and Other Changes of Facilities
The Company plans to spend ¥48,000 million in capital expenditure for one year following the end of the current fiscal year. The amountplanned to be spent for each segment is as follows.
Segment nameAmount planned
as of March 31, 2024
(million yen)

Description/major uses of facilities, etc.

Infrastructure

15,200

Expanding production capacity of optical communications devices
Expanding production facilities of power cables

Electronics & Automotive Systems

18,100

Expanding production capacity of automotive electronic components

Functional Products

6,600

Expanding production capacity of heat sinks

Services and Development, etc.

8,100

Upgrading electrical infrastructure
Establishing development environment for advanced semiconductor
manufacturing technology

Total

48,000Note: We have no plans to retire or sell important facilities other than retirement or sale in the ordinary course of updating facilities.

62

Item 4. Information about Reporting Company
1.

Company’s Shares, etc.

(1)

Total number of shares(i)Authorized shares
Class

Total number of shares authorized to be issued (shares)

Common stock

250,000,000

Total

250,000,000(ii) Issued shares
Name of financial instruments
Number of issued shares
Number of issued
exchange on which securities are
as of fiscal year end
shares as of filing datelisted or authorized financial(March 31, 2024)(June 24, 2024)
instruments business association to(shares)(shares)which securities are registeredClass

Description

Common stock

70,666,917

70,666,917

Prime Market of the Tokyo Stock
Exchange

These are standard shares of
the Company with fullvoting rights and norestrictions on shareholders’rights. The number of shareunit is 100 shares.

Total

70,666,917

70,666,917

–

–

(2)

Share acquisition rights(i)

Employee share option plans
Not applicable.

(ii)

Rights plans
Not applicable.

(iii) Share acquisition rights for other uses
Not applicable.
(3)

Exercises of moving strike convertible bonds, etc.
Not applicable.

(4) Changes in total number of issued shares, share capital and legal capital surplus

Date

Change in total Balance of total
number of shares number of sharesissuedissued(Thousands ofshares)

October 1, 2016 (Note)(636,002)

Change inBalance of

Change in legal Balance of legal
capital surplus capital surplus

share capitalshare capital(Thousands of (Millions of yen) (Millions of yen) (Millions of yen) (Millions of yen)shares)70,666–

69,395––

Note: As the Company carried out a 1-for-10 reverse stock split with the effective date of October 1, 2016, the total number of sharesissued decreased by 636,002,262 shares to 70,666,917 shares.

63

(5) Shareholding by shareholder category

As of March 31, 2024

Shareholding status (Number of shares constituting one unit: 100 shares)
Category

National and
Financial
local
institutions
governments

FinancialserviceprovidersOther
corporations

Foreign investors
Nonindividuals

Individuals

Individuals
and others

Total

Shares lessthan one unit
(shares)Number ofshareholders(persons)

–

56

44

506

255

54

40,534

41,449–Number of shares
held (units)–

297,367

16,05343,022

177,947202

170,958

705,549

112,017

Percentage ofshareholdings
–
42.15
2.28
6.10
25.22
0.03
24.23
100
(%)
Notes: 1. Out of 50,535 shares of treasury shares, 505 share units are included in “Individuals and others” and 35 shares in “Shares less than one
unit.” Note that 139,300 shares held by the trust account for the Board Benefit Trust (BBT) are not treated as treasury shares.
2. “Other corporations” includes five share units held in the name of Japan Securities Depository Center, Incorporated.

(6) Major shareholders

Name

Address–

As of March 31, 2024
Shareholding ratio
Number of shares(excluding
held (shares)
treasury shares)(%)

The Master Trust Bank of Japan,
Ltd. (Trust Account)

1-8-1 Akasaka, Minato-ku, Tokyo

11,582,300

16.40

Custody Bank of Japan, Ltd. (Trust
Account)

1-8-12 Harumi, Chuo-ku, Tokyo

5,402,220

7.65

BNYMSANV AS AGENT/
CLIENTS LUX UCITS NON
TREATY 1

VERTIGO BUILDING - POLARIS 2-4 RUE
EUGENE RUPPERT L-2453 LUXEMBOURG
GRAND DUCHY OF LUXEMBOURG

3,744,700

5.30

Custody Bank of Japan, Ltd.
(Mizuho Trust & Banking Co., Ltd.;
Employee Retirement Benefit Trust,
Mizuho Bank, Ltd. Account)

1-8-12 Harumi, Chuo-ku, Tokyo

2,413,500

3.42

Custody Bank of Japan, Ltd. (Trust
Account 4)

1-8-12 Harumi, Chuo-ku, Tokyo

2,269,800

3.21

Asahi Mutual Life Insurance
Company

1-6-1 Yotsuya, Shinjuku-ku, Tokyo

1,365,050

1.93

FURUKAWA CO., LTD.

2-6-4 Otemachi, Chiyoda-ku, Tokyo

1,329,045

1.88

2-2-2 Otemachi, Chiyoda-ku, Tokyo

1,221,000

1.73

1-8-12 Harumi, Chuo-ku, Tokyo

1,091,900

1.55

1-8-12 Harumi, Chuo-ku, Tokyo

1,050,000

1.49

31,469,515

44.56

The Nomura Trust and Banking Co.,
Ltd. (Trust Account)
Custody Bank of Japan, Ltd.
(Mizuho Trust & Banking Co., Ltd.;
Employee Retirement Benefit Trust,
FURUKAWA CO., LTD. Account)
Custody Bank of Japan, Ltd.
(Mizuho Trust & Banking Co., Ltd.;
Employee Retirement Benefit Trust,
Asahi Mutual Life Insurance
Company Account)
Total

–

Notes 1. In addition to the 2,413,500 shares in a retirement benefits trust mentioned above, Mizuho Bank, Ltd. has a further 173 shares in the
Company.

64

2. While the Change Report pertaining to large-volume holdings, which was disclosed to the public on December 22, 2020, states that it holds
the following shares as of December 15, 2020, it is not possible for us to confirm the actual status of their shareholding as of March 31,
2024.
Number of shares
owned (shares)

Holding ratio (%)

2,413,673

3.42

Mizuho Securities Co., Ltd.

350,100

0.50

Mizuho Trust & Banking Co., Ltd.

354,900

0.50

Asset Management One Co., Ltd.

2,099,200

2.97

5,217,873

7.38

Name of large-volume holders
Mizuho Bank, Ltd.

Total

3. While the Change Report pertaining to large-volume holdings, which was disclosed to the public on November 7, 2023, states that it holds
the following shares as of October 31, 2023, it is not possible for us to confirm the actual status of their shareholding as of March 31, 2024.
Number of shares
owned (shares)

Holding ratio (%)

Sumitomo Mitsui Trust Asset Management Co., Ltd.

4,546,900

6.43

Nikko Asset Management Co., Ltd.

1,481,100

2.10

6,028,000

8.53

Name of large-volume holders

Total

4. While the Change Report pertaining to large-volume holdings, which was disclosed to the public on December 6, 2023, states that it holds
the following shares as of November 30, 2023, it is not possible for us to confirm the actual status of their shareholding as of March 31,
2024.
Number of shares
owned (shares)

Holding ratio (%)

Nomura Securities Co., Ltd.

20,2000.03

Nomura International plc

266,9940.38

5,491,000

7.77

5,778,194

8.18

Name of large-volume holders

Nomura Asset Management Co., Ltd.
Total

5. While the Change Report pertaining to large-volume holdings, which was disclosed to the public on February 6, 2024, states that it holds thefollowing shares as of January 31, 2024, it is not possible for us to confirm the actual status of their shareholding as of March 31, 2024.
Name of large-volume holders
Eastspring Investments (Singapore) Limited
Total

65

Number of shares
owned (shares)

Holding ratio (%)

4,853,500

6.87

4,853,500

6.87

(7) Voting rights(i)Issued shares
Category

Number of shares (shares)
–

–

–

–

–

–

–

–

–

–

–

–

–

Shares with no voting rights
Shares with restricted voting rights(treasury shares, etc.)
Shares with restricted voting rights(other)Shares with full voting rights(treasury shares, etc.)
Shares with full voting rights(other) (Notes 1, 2)
Shares less than one unit
(Notes 3, 4)

As of March 31, 2024

Number of voting rights(units)(Treasury shares)
Common stock(Reciprocal holding)Common stock

50,50073,000Description

Common stock

70,431,300

Common stock

112,117––70,666,917––

Total number of issued shares
Number of voting rights held by all
shareholders

704,313––704,313–

Notes 1. “Shares with full voting rights (other)” includes 500 shares of the Company held in the name of Japan Securities Depository Center,
Incorporated and “Number of voting rights” includes five units of voting rights for the shares with full voting rights held in the name ofsaid organization.
2. “Shares with full voting rights (other)” includes 139,300 shares of the Company held by the trust account for the Board Benefit Trust(BBT), which was established to operate the stock remuneration system for Directors, etc., and “Number of voting rights” includes 1,393
units of voting rights for the shares with full voting rights held in the name of said trust.
3. “Shares less than one unit” includes 35 treasury shares.
4. Out of 122 shares held by YAMAKIN (JAPAN) CO., LTD., which does not have voting rights subject to reciprocal holding restriction,
through the Company’s share ownership association for business partners (Furukawadenko Kyoei Mochikabukai), 100 shares areincluded in the column “Reciprocal holding” and 22 shares, which are less than one share unit, are included in “Shares less than one unit”
together with 78 shares held by said share ownership association, which were to have no voting rights in conjunction with the above five
shares. Accordingly, the number of shares described in “Shares less than one unit” is 100 shares more than the number of shares describedin “Shares less than one unit (shares)” in the table of (5) “Shareholding by shareholder category” above.

(ii)

Treasury shares, etc.

Name of shareholder

Number ofshares held in
own name(shares)

Address of shareholder

As of March 31, 2024
Number of
Total number ofshares held in
Shareholding
shares held
other’ nameratio (%)
(shares)(shares)(Treasury shares)
Furukawa Electric Co., Ltd.

2-6-4 Otemachi, Chiyoda-ku,
Tokyo50,500–50,5000.07(Reciprocal holding)
YAMAKIN (JAPAN) CO., LTD.
(Note)

1-8-11 Iwamotocho,
Chiyoda-ku, Tokyo

72,900100

73,0000.10

123,400

100

123,500

0.17

Total
Note

–

Out of 122 shares held by YAMAKIN (JAPAN) CO., LTD. in the name of the Company’s share ownership association for business partners(Name: Furukawadenko Kyoei Mochikabukai; Address: 2-6-4 Otemachi, Chiyoda-ku, Tokyo), 22 shares are included in “Shares less than
one unit” in (i) “Issued shares” above.

66

(8) Share ownership plan for Directors, etc. and employees
The Company introduced the performance-linked stock remuneration system for Directors, etc. upon the resolution of the 194th Annual
Shareholders Meeting held on June 27, 2016 and partially amended it upon the resolution of the 197th Annual Shareholders Meeting
held on June 27, 2019. (The performance-linked stock remuneration system for Directors, etc. (as partially amended) is hereinafterreferred to as the “System.”) The Company also established the Board Benefit Trust (hereinafter, “Trust”) to operate the System.
1)

Overview of the System
The System is designed so that the Company’s shares of common stock (hereinafter, “Company’s shares”) are acquired through theTrust using the money which the Company contributed to the Trust, and the Company’s shares, etc. are granted to Directors
excluding Outside Directors, as well as Corporate Vice Presidents and Senior Fellows excluding Directors (hereinafter, collectively“Directors, etc.”) in accordance with the Stock Benefit Regulations for Directors, etc. predetermined by the resolution of the Boardof Directors.
Directors, etc. are granted a pre-determined number of points depending on their titles/positions during their term of office every
year as the basis of their rights to receive the Company’s shares, etc. The number of points to be granted to qualifying Directors,
etc. for receiving the Company’s shares are finalized after an adjustment for certain cases, according to the performance evaluation
criteria with a performance period of pre-determined three fiscal years. The total points granted to Directors, etc. during theperformance period of three fiscal years is limited to 180,000 points (equivalent to 180,000 Company’s shares). In principle, upon
their retirement, Directors, etc. receive the Company’s shares, etc. from the Trust, and the number of such shares corresponds to thenumber of points finalized during their term of office.

Note: The details of the Company’s stock remuneration system for Directors, etc. including the System are described in “4. Corporate Governance,(4) Remuneration for Directors, etc.”2)

Overview of the Trust<At the time of introduction of the System (with the performance period of three fiscal years from April 1, 2016 to March 31, 2019)>(i)
Name: Board Benefit Trust (BBT)(ii) Trustor: The Company(iii) Trustee: Mizuho Trust & Banking Co., Ltd. (Re-trustee: Trust & Custody Services Bank, Ltd. (currently Custody Bank ofJapan, Ltd.))(iv) Beneficiaries: Retired Directors, etc. who fulfill beneficiary requirements under the Stock Benefit Regulations for Directors,
etc.
(v) Trust administrator: A third party with no conflicts of interest with the Company (lawyer)(vi) Exercise of voting rights for shares in the Trust: The voting rights of the Company’s shares in the Trust shall not be exercised
as per the instructions of the trust administrator(vii) Type of Trust: Trust of money other than money trust (third party benefit trust)(viii) Date of conclusion of the Trust Agreement: August 8, 2016(ix) Date of establishment of the Trust: August 8, 2016(x) Trust term: From August 8, 2016 to the termination of the Trust (An expiry date is not set for the Trust term, and the Trust
will be maintained as long as the System is maintained.)(xi) Acquisition of the Company’s shares by the Trust: The Company’s shares shall be acquired using the money not more thana total of ¥350 million for three fiscal years, which the Company contributes to the Trust<After the partial amendment of the System (with the performance period of three fiscal years from April 1, 2019 to March 31,
2022 and each subsequent period of three fiscal years after the lapse of said three fiscal years)>(i)Name: Board Benefit Trust (BBT)(ii) Trustor: The Company(iii) Trustee: Mizuho Trust & Banking Co., Ltd. (Re-trustee: Trust & Custody Services Bank, Ltd. (currently Custody Bank ofJapan, Ltd.))(iv) Beneficiaries: Retired Directors, etc. who fulfill beneficiary requirements under the Stock Benefit Regulations for Directors,
etc.
(v) Trust administrator: A third party with no conflicts of interest with the Company (lawyer)(vi) Exercise of voting rights for shares in the Trust: The voting rights of the Company’s shares in the Trust shall not be exercised
as per the instructions of the trust administrator(vii) Type of Trust: Trust of money other than money trust (third party benefit trust)(viii) Date of conclusion of the Trust Agreement: August 8, 2016(ix) Date of establishment of the Trust: August 8, 2016(x) Trust term: From August 8, 2016 to the termination of the Trust (An expiry date is not set for the Trust term, and the Trust
will be maintained as long as the System is maintained.)(xi) Acquisition of the Company’s shares by the Trust: The Company’s shares shall be acquired using the money not more thana total of ¥450 million for three fiscal years, which the Company contributes to the Trust

3)

Number of the Company’s shares acquired through the System
The Trust held 139,300 shares as of March 31, 2024.

4)

Scope of those eligible to receive beneficiary rights and other rights under the System
Retired Directors, etc. who fulfill beneficiary requirements under the Stock Benefit Regulations for Directors, etc.

67

2. Acquisition and Disposal of Treasury SharesClass of shares, etc.: Acquisition of common stock under Article 155, item (vii) of the Companies Act(1) Acquisition by resolution of Shareholders meeting
Not applicable.
(2) Acquisition by resolution of Board of Directors meeting
Not applicable.
(3) Acquisition not based on resolution of Shareholders meeting or Board of Directors meeting
Acquisition of common stock under Article 155, item (vii) of the Companies Act
Category

Number of shares (shares)

Number of treasury shares acquired during the current
fiscal year
Number of treasury shares acquired during the current
periodTotal value (yen)82

208,590––

Note: 1. The “current period” refers to the period from the next day of the balance sheet date of the current fiscal year through the filing date ofthis Annual Securities Report.
2. “Number of treasury shares acquired during the current period” does not include treasury shares acquired through purchase of sharesless than one unit during the period from June 1, 2024 until the filing date of this Annual Securities Report.

(4) Disposal of acquired treasury shares and number of treasury shares held
Category
Treasury shares acquired for which
subscribers were solicited

Current fiscal year
Total amount ofdisposal (yen)Number of shares(shares)

Total amount ofdisposal (yen)

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

50,535–50,535–

Treasury shares acquired that were canceled
Treasury shares acquired that weretransferred for merger, share exchange, stock
issuance or company split
Other(Sold upon request for additional purchase ofshares less than one unit)
Number of treasury shares held

Current period

Number of shares(shares)

Note: 1. The “current period” refers to the period from the next day of the balance sheet date of the current fiscal year through the filing date ofthis Annual Securities Report.
2. “Number of treasury shares held” during the current period does not include shares less than one unit purchased and sold during theperiod from June 1, 2024 until the filing date of this Annual Securities Report.

68

3. Dividend Policy
The Company’s capital allocation policy is to strike a balance among investments in growth and new business opportunity, improvementof balance sheet and shareholder returns, with management priority.
Based on this policy, as its shareholder return policy during the period of the Medium-term Management Plan (MTMP) “Road to the
Vision 2030: Transform and Challenge” ending in FY2025, the Company will focus its investment in growth segments in order toincrease corporate value through profit growth, and provide a return to shareholders in a stable and continuous manner. Specifically, theCompany will make performance-linked dividend distribution, which is projected to be roughly 30% of profit attributable to owners ofparent.
Based on the above policy, the Company will distribute the year-end dividends of ¥60 per share when the proposal of “Dividends fromsurplus” (as a matter to be resolved) is approved and resolved as originally proposed at the 202nd Annual Shareholders Meeting to beheld on June 26, 2024.
For interim dividends, the Articles of Incorporation have a provision to the effect that it may be paid by resolution of the Board of
Directors to shareholders listed in the Company’s register of shareholders with the record date of September 30 each year. For year-end
dividends, the decision-making body is the shareholders meeting.
Dividends of surplus for FY2023 are as follows:
Date of resolution

Total amount of dividends(millions of yen)

Resolution (to be made) at the Annual Shareholders
Meeting to be held on June 26, 2024

4,236

69

Dividend per share
(yen)
60

4.

Corporate Governance(1) Overview of corporate governance1)

Basic view on corporate governance
Based on the “Furukawa Electric Group Purpose” and the “Core Values,” Furukawa Electric and Furukawa Electric Group enhance
our management performance responding appropriately to changes in the business and market environment by prompt businessdecision making as well as with transparency and fairness. At the same time, we ensure sound management by developing andestablishing an effective internal control system. With these, we will expand and develop our business on a sustainable basis andincrease our corporate value. Furthermore, we seek to strengthen and enhance our corporate governance, in accordance with thefollowings:(i) We secure the rights and equal treatment of shareholders;(ii) We consider interests of stakeholders including shareholders, and cooperate appropriately with them;(iii) We ensure appropriate information disclosure and transparency;(iv) Given its fiduciary responsibility and accountability to shareholders, Board of Directors carries out effective oversight ofmanagement from objective standpoint, respecting the independent Directors’ role for the oversight;(v) We engage in constructive dialogue with shareholders who have investment policies in accordance with interests of mediumto-long-term shareholders.

2)

Corporate governance system(i)

Overview of the corporate governance system and reasons for adopting such corporate governance system
a. Overview of the corporate governance system
As of June 24, 2024 (filing date of this Annual Securities Report), the Board of Directors of the Company consists of 11 Directors,
five of whom are Outside Directors (all of them are registered at the Tokyo Stock Exchange as independent officers). The Board of
Directors is chaired by non-executive Chairperson of the Board who does not have representative rights.
Note: The Company will make a proposal of “Election of eleven (11) Directors” as a matter to be resolved at the 202nd Annual Shareholders
Meeting to be held on June 26, 2024. Even after this proposal is approved and resolved as originally proposed, the Board of Directors will
still consist of 11 Directors (including five Outside Directors, all of whom are registered with the Tokyo Stock Exchange as independent
officers). Note that, if this proposal is approved and resolved as originally proposed and subsequently approved at the Board of Directors
meeting to be held immediately after the end of the 202nd Annual Shareholders Meeting, the duties of Chairperson of the Board willcontinue to be discharged by Chairman and Director.

In light of its fiduciary responsibility and accountability to shareholders, the Board of Directors of the Company fulfills its
responsibilities to promote sustainable corporate growth and the increase of corporate value over the medium-to-long-term, andenhance earnings power and capital efficiency; and therefore, do the following:
(i)
(ii)
(iii)
(iv)

Determination of corporate governance-related matters;
Establishment and amendment of business strategies and oversight of execution of such strategies and plans;
Setting capital allocation policy;
Appointment and removal of the Management including Representative Director and Corporate Vice Presidents, anddetermination of the remuneration of them (including delegating these to Nominating/Compensation Committee); (Note)(v) Establishment of an internal control system relating to compliance and financial reporting and risk management systems,
and oversight of them;(vi) Decision on important business matters;(vii) Others prescribed by the applicable laws and regulations etc.
Note: Upon a request or delegation from Board of Directors, Nominating/Compensation Committee deliberates, determines and reports
matters of nominating candidates for Directors and Compensation for Directors etc. The details are disclosed in “Matters to bedeliberated by Nominating/Compensation Committee” to be described later in this report.

The Outside Officers of the Company have extensive experience in financial institutions, trading companies, and businesscorporations or expert knowledge and experience in such areas as laws, finance/accounting, and industrial policies, etc. The
Board of Directors, in making decisions, respects Outside Directors’ opinions and suggestions from diverse viewpoints based on
their experience.
At the Company, in order to facilitate timely and decisive decision-making on business execution, on the premise that corporate
governance mechanisms, including the Board of Directors’ supervision of business execution, are working adequately, decisionmaking on certain matters related to business execution is delegated to the management within the scope permitted by laws andregulations. The specific scope of such delegation is defined in the standards for deliberation with respect to the Board of Directors
and Management Committee, depending on the degree of significance.
Furukawa Electric Group’s business consists of 12 operating divisions; and business divisions were established for directing andoverseeing multiple operating divisions which are closely related to each other. As for our business execution, under the control of
President being the chief executive, operations are directed by General Managers of such business divisions as Communications
Solutions Division, Energy Infrastructure Division, Electronics Component Material Division, Functional Products Division andAutomotive Products Division. In addition, the Company has divisions to perform such head office functions as developing andimplementing the Group’s business strategies/management plans, establishing and maintaining corporate governance, risk
70management, and other management systems, and conducting marketing and sales activities; and General Managers of respective
divisions lead such functions. These General Managers, in the capacity of executive officers, serve as members of Management
Committee, which is the highest decision-making body of business execution. Management Committee deliberates and determines
major operational matters. Furthermore, the Committee members report the status of business execution on a quarterly basis toensure effective communications among the executive officers, thus achieving integrated business execution. Furthermore, thestatus of business execution is reported to the Board of Directors on a quarterly basis.
In order to ensure functional interactions between the Board of Directors’ supervision over business execution and executive
initiatives for developing the internal control system, the Company established Risk Management Committee and Sustainability
Committee chaired by President. Risk Management Committee manages risks in implementing Furukawa Electric Group’s businessstrategies, as well as strives to establish and strengthen compliance and an internal control system. The internal control status isregularly reported to the Board of Directors. Sustainability Committee deliberates Furukawa Electric Group’s basic policy onsustainability, basic points concerning materiality of revenue opportunities/risks, disclosures of basic information on sustainability,
and community and social activities; and also checks the progress of such matters. As for materiality of risks which are closely
related to Furukawa Electric Group’s business risk management, Risk Management Committee and Sustainability Committee work
together for deliberations.
While Auditing Department is responsible for internal audits in the Group, the Company established a framework for adequate andobjective audits of the entire Furukawa Electric Group’s internal control system through close cooperation between Auditing
Department and Audit & Supervisory Board Members.
The Company has established Nominating/Compensation Committee to ensure the objectivity and transparency of deliberations
and decision-making procedures concerning the nomination of Directors, etc. and their remuneration, etc. The Committee shallconsist of at least five members (the majority being Outside Directors) appointed from Directors by resolution of the Board of
Directors. As of June 24, 2024 (filing date of this Annual Securities Report), the Committee has seven members; namely Osamu
Tsukamoto (Outside Director), Takashi Tsukamoto (Outside Director), Yoshiro Miyokawa (Outside Director), Yukiko Yabu
(Outside Director), Tamotsu Saito (Outside Director), Keiichi Kobayashi (Chairman and Director), and Hideya Moridaira(President and Representative Director).
Note that the Company will make a proposal of “Election of eleven (11) Directors” as a matter to be resolved at the 202nd Annual
Shareholders Meeting to be held on June 26, 2024. If this proposal is approved and resolved as originally proposed and subsequently
approved at the Board of Directors meeting to be held immediately after the end of the 202nd Annual Shareholders Meeting, theCommittee members will have seven members, namely Takashi Tsukamoto (Outside Director), Yoshiro Miyokawa (Outside
Director), Yukiko Yabu (Outside Director), Tamotsu Saito (Outside Director), Takeo Hoshino (Outside Director), Keiichi
Kobayashi (Chairman and Director), and Hideya Moridaira (President and Representative Director). In addition,
Nominating/Compensation Committee will continue to be chaired by Takashi Tsukamoto (Outside Director) upon approval at
Nominating/Compensation Committee to be held immediately after the Board of Directors meeting as mentioned above.
The following are the matters deliberated by Nominating/Compensation Committee.
<Matters to be deliberated by Nominating/Compensation Committee>(1) Nominating/Compensation Committee deliberates the following matters in response to inquiries from the Board of Directors,
and reports the results to the Board:(i)
Proposal for shareholders’ meeting concerning election/removal of Directors and Audit & Supervisory Board Members(ii) Appointment/dismissal of Representative Director, Chairman of the Board, and President(iii) Appointment/removal of Corporate Vice Presidents(iv) Appointment/dismissal of senior Corporate Vice Presidents (Corporate Senior Executive Vice President, Corporate
Executive Vice President, and Corporate Senior Vice President)(v) Policy about Remuneration of Directors and Corporate Vice Presidents(2) Nominating/Compensation Committee deliberates and determines the following matters delegated by the Board of Directors:(i)
Evaluation of Directors and Corporate Vice Presidents(ii) System concerning remuneration, etc. for Directors and Corporate Vice Presidents based on the policy decided by the
Board of Directors following the report set forth in item (v) of the above section (1)(iii) Details of remuneration, etc. for individual Directors and Corporate Vice Presidents based on the policy decided by the
Board of Directors following the report set forth in item (v) of the above section (1)(iv) Proposal for shareholders’ meeting concerning remuneration, etc. for Directors and Audit & Supervisory Board
Members(v) Guidelines on remuneration, etc. for representatives of affiliated companies(vi) Policy on the term of office for Directors and Corporate Vice Presidents and the treatment after they leave office(vii) Content of draft proposal on appointment/removal of Special Advisers/Honorary Advisers and their remuneration(viii) Content of succession plans for the management(3) Nominating/Compensation Committee deliberates and determines program details and policies on training for Directors, Audit& Supervisory Board Members, and Corporate Vice Presidents.
As of June 24, 2024 (filing date of this Annual Securities Report), the Audit & Supervisory Board of the Company consists of 6
Audit & Supervisory Board Members, three of whom are Outside Audit & Supervisory Board Members (all of them are registeredat the Tokyo Stock Exchange as independent officers). The Company will make a proposal of “Election of one (1) Audit &Supervisory Board Member” as a matter to be resolved at the 202nd Annual Shareholders Meeting to be held on June 26, 2024.
71

Even after this proposal is approved and resolved as originally proposed, the Audit & Supervisory Board will still consist of 6 Audit& Supervisory Board Members (including three Audit & Supervisory Board Members, all of whom are registered with the Tokyo
Stock Exchange as independent officers).
Audit & Supervisory Board Members conduct audits in accordance with the audit policy and audit plan decided by the Audit &Supervisory Board, and regularly report audit results to the Board of Directors and President. Regular meetings of the Audit &Supervisory Board are generally held at least once in every two months. Audit & Supervisory Board Members request
Directors/employees of the Company and its subsidiaries to report on matters related to business operations, as necessary. Businessdivisions report to Audit & Supervisory Board Members about the status of establishing/implementing internal control, and thestatus of compliance and risk management, including those of subsidiaries, as necessary. Furthermore, each Audit & Supervisory
Board Member attends the meetings of the Board of Directors, has interviews with the President and Representative Director and
key Directors and Corporate Vice Presidents, and conduct on-site inspections (including remote auditing by using a web conference
system) at each division of the Company, its business locations/branches, and R&D laboratories in accordance with the audit policy
and audit plan decided by the Audit & Supervisory Board; and reports audit details and results to the Audit & Supervisory Board.
Furthermore, full-time Audit & Supervisory Board Members attend Management Committee meetings, Risk Management
Committee meetings, Sustainability Committee meetings, and other important meetings; and review requests for management
approval and other important requests for approval, conduct on-site inspections (including remote auditing by using a web
conference system) at group companies in Japan and abroad; and report details and results of such inspections to the Audit &Supervisory Board. Auditing Department, which is responsible for internal auditing, monitors and verifies the
management/operating system for overall management activities as well as the status of execution of duties from the perspectiveof legitimacy and efficiency; and based on such internal audit results, Auditing Department provides internal divisions and thegroup companies with information, and offers advice and makes recommendations for the improvement and streamlining. In
addition, to enhance audit functions, Audit & Supervisory Board Members, Accounting Auditor, and Auditing Department
collaborate with each other, and exchange information and opinions. Upon request from Audit & Supervisory Board Members, theCompany appointed two employees, whose independence from the management is secured, to assist Audit & Supervisory Board
Members.

72

<Schematic Diagram of Corporate Governance System as of June 24, 2024 (filing date of this Annual Securities Report)>
Shareholders’ Meeting
Monitoring andsupervising function

Appoints

Appoints

Board of Directors
11 Directors(including 5 Outside Directors)
Consults anddelegates

Performs accounting audit
Performs
audit

Provides opinions
and reports

Nominating/Compensation
Committee
7 Directors(including 5 Outside Directors)
Appoints

Business
executionfunction
Submits
proposals
andreports

Audit & Supervisory Board
6 Audit & Supervisory Board
Members(3 members are outside andindependent.)
Employees assisting Audit &Supervisory Board Members

Supervises

Reports

President and Representative Director
Submits
proposals
andreports

Reports

Performs
audit

Accounting Auditor

Performs
accounting
audit

Collaborates

Internal Auditing Division(Auditing Department)

Management Committee
Directs
Directs

Risk Management
Committee

Appoints

Sustainability
Committee

Collaborates

Monitors

GuidesMonitors

Headquarters
Strategy Div.
Risk Management Div.
Finance & Accounting Div.
Research & Development Div.
MONOZUKURI Innovation Div.
Global Marketing Sales Div.

GuidesSupports andguidesOperations
Communications Solutions Div.

Optical and Cable Products Div
FITEL Products Div.
Broadband Solutions Business Div.
Power Cable Div.
Industrial Cable & Power Cable Accessories Div.

Functional Products Div.
AT & Functional Plastics Div.
Thermal Management Solution &Products Div.
Memory Disk Div.
Copper Foil Div.

Electronics Component Material Div.

Automotive Products Div.

Energy Infrastructure Div.

Electric Conductor Div.
Copper & High Performance Material Products Div.

Group companies

Note: The Company will make proposals of “Election of eleven (11) Directors” and “Election of one (1) Audit & Supervisory Board Member” asmatters to be resolved at the 202nd Annual Shareholders Meeting to be held on June 26, 2024. Even after these proposals are approved andresolved as originally proposed and subsequently approved at the Board of Directors meeting to be held immediately after the end of the202nd Annual Shareholders Meeting, there will be no change in Directors and Audit & Supervisory Board Members as well as the number ofNominating/Compensation Committee members as shown in the schematic diagram above.

73

b. Reason for adopting the above corporate governance system
The Company adopted the current corporate governance system (in the organizational form of Company with the Audit &Supervisory Board), believing that the effectiveness of auditing Directors’ execution of duties is secured by institutionally
maintaining the independence of the Audit & Supervisory Board and its Members from the Board of Directors, while ensuring theircooperation with Accounting Auditor and internal audit division. Furthermore, to complement the supervisory function of the Boardof Directors, the Company established Nominating/Compensation Committee. The Committee consists of at least five members(where Outside Directors comprises a majority) who are chosen among Directors by resolution of the Board of Directors; and theCommittee Chair is, in principle, selected from Outside Directors by the Committee members.
(ii) Status of development of internal control system
The Company believes that internal control is intended for maintaining/improving the efficiency of execution of duties, ensuring
compliance, risk management, information management and group company management, and established and implements theinternal control system as follows:a. Efficient execution of duties
After management targets are set in budgets, each executive officer fulfills his/her duties to achieve such targets, and regularly
reports the progress to the Board of Directors. Such achievements are adequately reflected in his/her remuneration. As for mattersto be decided by the Board of Directors or Management Committee, or by means of requests for management approval, theCompany established detailed and specific standards for deliberations. The Company has in place internal rules to clarify
administrative authorities of executive officers and General Managers, as well as division of duties; and also has a mechanism toconstantly review them upon an organizational change and the like.
b. Compliance system
The Company regards “Furukawa Electric Group Purpose,” the “Core Values,” and “Furukawa Electric Group CSR Code of
Conduct” as the basis for complying with ethical standards as well as laws and regulations; and according to the “Compliance
Regulations”, the Company promotes such compliance activities as internal education and programs to prevent/detect legal
violations, while Risk Management Committee chaired by President and Risk Management Division play central roles. Eachdivision appoints a risk management officer, who is responsible for effectively promoting risk management activities, including
compliance, within the division. Especially, to prevent a recurrence of cartel behavior, the Company has reinforced the control overcontacts with other companies in the same industry and the pricing procedures, and strengthened oversight by receiving advice fromexternal experts from time to time. The Company also introduced a whistleblowing system, aiming at early detection and correctionof compliance violations. Furthermore, Auditing Department, which is responsible for internal audits, monitors the execution ofduties in each division, verifies whether the internal control system, including the compliance system, is working effectively, andreports the results to the management.
c. Risk management system
The Company stipulated its risk management system and management method in the “Basic Regulations on Risk Management andInternal Control”, and Risk Management Committee identifies overall risks associated with Furukawa Electric Group’s business
operations, and verifies the adequacy of such risk assessment and risk management methods. The Committee focuses mainly on
addressing major risks associated with compliance at affiliated companies and internal divisions, large-scale disasters, information
security, etc., while putting emphasis on managing significant risks in such areas as disaster prevention & business continuity
management, quality management, health & safety, and environment preservation by establishing special committees. In addition
to the above-mentioned framework, when an important decision is to be made by the Board of Directors or Management Committee,
or by means of requests for management approval, expected risks associated with the subject in question are clarified in the referencematerial, and the decision is made only upon recognizing such risks.
d. Information management system
Records and documents related to important decisions by the Board of Directors, Management Committee, or via requests for
management approval are properly managed/retained in accordance with laws and regulations as well as the Company’s“Regulations on Retention of Documents”. As for other information on the execution of duties, from the perspective of theimportance as information assets and the necessity for protection, the Company established uniform standards and has implemented
an information management system.
e. Group company management
In accordance with the “Regulations on Group Management Control”, an administrative manager is appointed at each Group
company; and the Company requests the group companies to regularly report information necessary for grasping their businessconditions, provides guidance on business management, and requires them to obtain the Company’s approval before making
decisions on certain matters. Budgets are prepared for the entire Group, setting specific management targets to be achieved bysubsidiaries. As for the risk management at subsidiaries, Risk Management Division plays a central role to provide training, advice,and guidance on risk management, internal control, and compliance. Subsidiaries are required to appoint their own complianceofficers. The Company sends part-time officers to key group companies, and monitors overall management, including complianceand risk management, of the group companies through audits by the Company’s Audit & Supervisory Board Members and Auditing
Department.
f. Securing appropriateness of financial reportingIn accordance with the “Basic Regulations on Risk Management and Internal Control”, the Company established “Furukawa
Electric Group Basic Policy for the development and evaluation of an internal control system, to ensure the appropriateness of74

financial reporting” (J-SOX Core Policy), and clarified the establishment, development, and operation of the internal control system,
monitoring mechanism, and responsibilities. As for preparation and submission of the Internal Control Reports stipulated in the
Financial Instruments and Exchange Act, the Company established J-SOX Council for deliberations of important matters, aiming
at maintaining and improving the reliability of the Group’s financial reporting.
(iii) Status of the development of risk management system
Refer to “(ii) Status of development of internal control system, c. Risk management system” as described above.
(iv) Basic views on eliminating anti-social forces
a. Basic views
As described in “Furukawa Electric Group CSR Code of Conduct”, the Company’s basic views are as follows: “Adopt a resolute
approach to and cut off all relations with antisocial individuals or groups.”b. Establishment of relevant structure
As mentioned above, the Company described its basic approach in “Furukawa Electric Group CSR Code of Conduct” and ensuresthat all officers and employees follow the approach. The Company designated Administration Department, Risk Management
Division as the department in charge, and appointed an officer in charge of preventing unreasonable demands, who completed thetraining course sponsored by the Tokyo Metropolitan Public Safety Commission. Moreover, the Company is a member of theFederation on Prevention of Special Organized Crimes (TOKUBOREN) under the Tokyo Metropolitan Police Department, andcollects information through TOKUBOREN bulletins and TOKUBOREN news. In addition, the officer in charge of preventing
unreasonable demand participates in TOKUBOREN’s national workshop, and regional workshop and regular meetings in order tocollect the latest information and closely collaborate with TOKUBOREN and neighboring companies.
(v) Outline of the limited liability agreements
The Company has agreements to limit liabilities under Article 423, paragraph (1) of the Companies Act with Outside Directors andOutside Audit & Supervisory Board Members. The upper limit of liabilities under this agreement is the statutory lower limit.
(vi) Overview of indemnity agreement
The Company has concluded an indemnity agreement set forth in Article 430-2, paragraph (1) of the Companies Act with each of
Directors and Audit & Supervisory Board Members.
The indemnity agreement specifies that the Company shall compensate for expenses set forth in item (i) and losses set forth in item(ii) of paragraph (1) of the above-mentioned Article to the extent prescribed by laws and regulations. However, in the indemnity
agreement, if bad faith or gross negligence on the part of officers was found in relation to their execution of duties, the Company
may claim refund of compensation; as such, the Company has taken measures for maintaining the adequacy of the execution ofduties of officers.
(vii) Overview of directors and officers liability insurance agreement
The Company purchased a Directors and Officers Liability Insurance (D&O Insurance) policy, which covers Directors, Audit &Supervisory Board Members, and Corporate Vice Presidents, etc. (including those who retired on March 31, 1994 and thereafter)
and their successors.
This insurance policy covers claims against insured Directors, etc. on the basis of their legal liability for damages caused by theiractions (including failure to act) relating to their execution of duties, and litigation expenses that are incurred due to the liability
claims against Directors, etc. However, there are some exclusions, for example, a case where the insured knowingly committed anillegal act. The Company bears all of the insurance premium.
3)

Number of directors and requirements for resolution to elect Directors
The Articles of Incorporation have a provision to the effect that the Company shall have no more than twenty (20) directors. In
addition, the Articles of Incorporation have provisions to the effect that the resolutions for the election of directors shall be adopted
when shareholders who are able to exercise their voting rights possessing one-third or more of total voting rights are present, andby the votes of a majority of voting rights of shareholders present; and that the election of directors shall not be made by cumulative
vote.

4)

Matters to be resolved at Shareholders Meeting that may be resolved by the Board of Directors and reasons therefor as well as
details of changes in requirements for special resolution at Shareholders Meeting and reasons therefor(i)

Acquisition of treasury shares
The Articles of Incorporation have a provision to the effect that, in accordance with the provisions of Article 165, paragraph (2), of
the Companies Act, the Company may acquire its own shares through market transactions and other methods by resolution by the
Board of Directors pursuant to paragraph (1) of said Article for the purpose of enabling the Company to implement a flexible capital
policy.

(ii) Interim dividends
The Articles of Incorporation have a provision to the effect that, in accordance with the provisions of Article 454, paragraph (5) of75

the Companies Act, the Company may be paid interim dividends by resolution of the Board of Directors to such shareholders andregistered share pledgees as are entered or recorded in the latest register of shareholders on September 30 each year for the purposeof enabling the Company to implement flexible shareholder return measures.
(iii) Exemption of liability for Directors and Audit & Supervisory Board Members
The Articles of Incorporation have a provision to the effect that, pursuant to the provisions of Article 426, paragraph (1), of theCompanies Act, the Company may indemnify Directors (including those who have served as directors in the past) and Audit &Supervisory Board Members (including those who have served as Audit & Supervisory Board Members in the past) for liabilities
for damages for negligence of duty within the scope permitted by laws and regulations and upon a resolution by the Board of
Directors for the purpose of enabling Directors and Audit & Supervisory Board Members to fulfill their expected roles in performing
their duties.
(iv) Requirements for special resolution at Shareholders Meeting
The Articles of Incorporation have a provision to the effect that the special resolution provided in Article 309, paragraph (2) of theCompanies Act shall be adopted when shareholders who are able to exercise their voting rights possessing one-third or more of total
voting rights are present, and by the votes of two-thirds or more of voting rights of shareholders present for the purpose of operating
shareholders meeting more smoothly by relaxing the quorum for special resolution at a shareholders meeting.
5)

Activities of Board of Directors and Nominating/Compensation Committee (FY2023)(i)

Activities of Board of Directors
During FY2023, Board of Directors met 16 times to make decisions on important business execution, check the progress of themedium-term business plan and achievement of management targets, including fiscal budgets, and also have deliberations on
corporate governance and other fundamental matters related to business management. The official title or position, name andattendance to the Board of Directors meetings of each Director were as shown below.
Official title or position

Name

Chairman and Director
President and Representative Director
Outside Director
Outside Director
Outside Director
Outside Director
Outside Director
Director and Corporate Executive Vice President, General
Manager of Strategy Division
Director and Corporate Senior Vice President, General
Manager of Finance & Accounting Division
Director and Corporate Senior Vice President, General
Manager of Global Marketing Sales Division
Director and Corporate Vice President, General Manager
of Risk Management Division

Keiichi Kobayashi
Hideya Moridaira
Osamu Tsukamoto
Takashi Tsukamoto
Yoshiro Miyokawa
Yukiko Yabu
Tamotsu Saito

Attendance to Board of Directors meetings(number/rate of attendance)
16 out of 16 (100%)
16 out of 16 (100%)
15 out of 16 (93.8%)
16 out of 16 (100%)
16 out of 16 (100%)
16 out of 16 (100%)
16 out of 16 (100%)

Satoshi Miyamoto

16 out of 16 (100%)

Akihiro Fukunaga

16 out of 16 (100%)

Yoshio Masutani

16 out of 16 (100%)

Toshio Yanagi

12 out of 12 (100%)Note:

Since Mr. Toshio Yanagi was newly elected at the 201st Annual Shareholders Meeting held on June 23, 2023, the number of the eligible
Board of Directors meetings is different from that for other members of the Board of Directors.

(ii) Activities of Nominating/Compensation Committee
During FY2023, Nominating/Compensation Committee met five times. The primary matters deliberated at the Committee meetings
were the management execution system from April 2024 for Nomination and the executive compensation system for Compensation.
The official title or position, name and attendance to the Committee meetings of each member were as shown below.
Chair〇

Official title or position
Outside Director
Outside Director
Outside Director
Outside Director
Outside Director
Chairman and Director
President and Representative Director

Name
Osamu Tsukamoto
Takashi Tsukamoto
Yoshiro Miyokawa
Yukiko Yabu
Tamotsu Saito
Keiichi Kobayashi
Hideya Moridaira

76

Attendance to Nominating/Compensation
Committee meetings(number/rate of attendance)
5 out of 5 (100%)
5 out of 5 (100%)
5 out of 5 (100%)
5 out of 5 (100%)
5 out of 5 (100%)
5 out of 5 (100%)
5 out of 5 (100%)

(2) Directors and other officers
1) List of officers(i) Directors and Audit & Supervisory Board Members as of June 24, 2024 (filing date of this Annual Securities Report) are as follows:
Male: 15, Female: 2 (Ratio of female officers: 11.8%)
Official title orposition

Name

Date of birth

Career summary
April 1985

Term ofofficeNumber ofshares held
(hundreds ofshares)(Note 3)98

(Note 3)55

Joined Furukawa Electric Co., Ltd.

April 2014

Chairman and
Director

Keiichi Kobayashi

Corporate Vice President and General Manager of
Copper & High Performance Material Products
Division
April 2015
Corporate Senior Vice President, Adviser ofAutomotive Electronics Material Business, and General
Manager of Copper & High Performance Material
Products Division
June 2015
Director and Corporate Senior Vice President, Adviserof Automotive Electronics Material Business, andJune 24, 1959
General Manager of Copper & High Performance
Material Products Division
April 2016
Representative Director and Corporate Executive Vice
President, General Manager of Global Marketing Sales
Division
April 2017
President and Representative Director
April 2023
Chairman and Director (present post)
Important Concurrent Post
Director (Outside) of NTT DATA Japan Corporation
April 1990
April 2014
April 2016
April 2017
Feb. 2020

President andRepresentative
Director

April 2020
Hideya Moridaira

July 13, 1965
April 2021

May 2021
April 2022
June 2022
April 2023

Joined Furukawa Electric Co., Ltd.
Section Chief of Corporate Planning Section, Strategy
Division
General Manager of Planning & Administration
Department, Communications Solutions Division
Deputy General Manager of Communications Solutions
Division, General Manager of Planning &Administration Department (concurrent posts)
General Manager of Optical Fiber & Cable Products
Division in Communications Solutions DivisionCorporate Vice President, General Manager of OpticalFiber & Cable Products Division in Communications
Solutions DivisionCorporate Vice President, General Manager ofCommunications Solutions Division, General Manager
of Optical Fiber & Cable Products Division (concurrent
posts)
Corporate Vice President, General Manager ofCommunications Solutions DivisionCorporate Senior Vice President, General Manager ofCommunications Solutions Division
Director and Corporate Senior Vice President, General
Manager of Communications Solutions Division
President and Representative Director (present post)77

Official title orposition

Name

Date of birth

Career summary
April 1977
July 2003
June 2004
July 2006
July 2008
July 2009

Director

Osamu Tsukamoto June 11, 1953

July 2010
Oct. 2010

Term ofofficeJoined the Ministry of International Trade and Industry(currently Ministry of Economy, Trade and Industry)
Deputy Director-General for Regional Economic andIndustrial Policy Group, and Agency for Natural
Resources and Energy
Director-General for Manufacturing Industries Bureau
Deputy Director-General for Technology Policy
Coordination
Director-General, Kanto Bureau for Economy, Trade andIndustry
Director-General for Regional Economic and Industrial
Policy(Note 3)Retire from officeDistinguished Professor of Tokyo University of Science

Adviser of Furukawa Electric Co., Ltd. (part-time)
Director (Outside) of Furukawa Electric Co., Ltd.
(present post)
March 2014 Retire from Distinguished Professor of Tokyo Universityof Science
June 2014
President of Japan Coal Energy Center (currently JAPANCARBON FRONTIER ORGANIZATION, present post)
Important Concurrent Post
President of JAPAN CARBON FRONTIER ORGANIZATION
June 2013

78

Number ofshares held
(hundreds ofshares)5

Official title orposition

Name

Date of birth

Career summary
April 1974

Nov. 2013
April 2014

Joined The Dai-Ichi Kangyo Bank., Ltd.（currently
Mizuho Bank, Ltd.）
Executive Officer / General Manager of Human
Resources Division of Mizuho Corporate Bank, Ltd.
(currently Mizuho Bank, Ltd.)Managing Executive Officer / Head of Risk
Management Group and Head of Human ResourcesGroup of Mizuho Financial Group, Inc.
Managing Executive Officer / Head of Europe, Middle
East and Africa of Mizuho Corporate Bank, Ltd.
Managing Director / Chief Strategy Officer and Chief
Financial Officer of Mizuho Corporate Bank, Ltd.
Deputy President of Mizuho Corporate Bank, Ltd.
Deputy President-Executive Officer / Head of Financial
Control and Accounting Group of Mizuho Financial
Group, Inc.
Deputy President / Head of Financial Control andAccounting Group of Mizuho Financial Group, Inc.
President & CEO of Mizuho Financial Group, Inc.
Chairman of Mizuho Financial Group, Inc. andPresident & CEO of Mizuho Bank, Ltd.
Chairman of Mizuho Financial Group, Inc. andChairman of Mizuho Bank, Ltd.
Chairman of Mizuho Financial Group, Inc.
Senior Adviser of Mizuho Financial Group

April 2017

Honorary Adviser of Mizuho Financial Group

April 2002
March 2003
April 2004
March 2006
April 2007
April 2008
June 2008
Director

Takashi Tsukamoto

August 2,
1950

April 2009
June 2011
July 2013

June 2017

Audit & Supervisory Board Member (Outside) of
Furukawa Electric Co., Ltd.
June 2021
Director (Outside) of Furukawa Electric Co., Ltd.
(present post)
July 2023
Senior Adviser of Mizuho Financial Group, Inc.
(present post)
Important Concurrent Post
Senior Adviser of Mizuho Financial Group, Inc.
Director (Outside) of Asahi Mutual Life Insurance Company
Director (Outside) of AEON CO., LTD.
Director (Outside) of Internet Initiative Japan Inc.

79

Term ofofficeNumber ofshares held
(hundreds ofshares)(Note 3)52

Official title orposition

Name

Date of birth

Career summary
April 1975
Jan. 2003
Sept. 2004
April 2005
Sept. 2005

Director

Yoshiro Miyokawa

December28, 1952

April 2006
April 2008
June 2008
June 2011
June 2013
June 2017
June 2019
April 1981
Jan. 2006
Jan. 2011
April 2012
April 2013

Director

Yukiko Yabu

June 23, 1958 March 2014

June 2014
June 2015
June 2016
June 2019
June 2021

Joined Yamanouchi Pharmaceutical Co., Ltd. (currently
Astellas Pharma Inc.)
General Manager, Business Process Innovation
Promotion Department, Yamanouchi Pharmaceutical
Leader, Integration Secretariat, Merger Preparatory
Committee, Group Strategy Planning Department,
Yamanouchi Pharmaceutical
General Manager, Integration Promotion Department,
Astellas Pharma Inc.
Executive Officer and General Manager, Business
Innovation Department, Astellas Pharma Inc.
Executive Officer and General Manager, Human
Resources Department, Astellas Pharma Inc.
Executive Officer and Chief Administrative Officer,
Astellas Pharma Inc.
Senior Executive Officer and Chief Administrative
Officer, Astellas Pharma Inc.
Vice President, Executive Officer and Chief
Administrative Officer, Astellas Pharma Inc.
Representative Director & Vice President, Chief
Administrative Officer, and Chief Compliance Officer,
Astellas Pharma Inc.
Retired from Astellas Pharma Inc.
Director (Outside) of Furukawa Electric Co., Ltd.
(present post)
Joined Matsushita Electric Industrial Co., Ltd.
(currently Panasonic Holdings Corporation)
Director of Lifestyle Value Research Laboratory, R&D
Headquarters, Home Appliances Company, Matsushita
Electric Industrial Co., Ltd.
Director of Global Consumer Research Center,
Corporate Brand Strategy Division, PanasonicHoldings Corporation
Director of Consumer Research Center, Global
Consumer Marketing Sector, Panasonic Holdings
Corporation
Director and Group Manager responsible for consumer
research at the Global Marketing Planning Center,
Appliances Company, Panasonic Holdings Corporation
Retired from Panasonic Holdings Corporation
Director (Outside) of DUSKIN CO., LTD.
Director (Outside) of TAKARA HOLDINGS INC.
Director (Outside) of DAIWA HOUSE INDUSTRY
CO., LTD. (present post)
Director (Outside) of Furukawa Electric Co., Ltd.
(present post)
Director (Outside), Audit & Supervisory Committee
Member of IBIDEN CO., LTD. (present post)

Important Concurrent Post
Director (Outside) of DAIWA HOUSE INDUSTRY CO., LTD.
Director (Outside), Audit & Supervisory Committee Member of
IBIDEN CO., LTD.

80

Term ofofficeNumber ofshares held
(hundreds ofshares)(Note 3)31

(Note 3)21

Official title orposition

Name

Date of birth

Career summary
April 1975
June 2006
Jan. 2008
April 2008
April 2009

Director

Tamotsu Saito

July 13, 1952

April 2011
April 2012
April 2016
April 2017
April 2020
June 2020
June 2021
April 2024

Joined Ishikawajima-Harima Heavy Industries Co., Ltd(currently IHI Corporation)
Executive Officer, Vice President of Aero-Engine &Space Operations of Ishikawajima-Harima Heavy
Industries Co., Ltd.
Executive Officer, President of Aero-Engine & Space
Operations of IHI Corporation
Director, Executive Officer, President of Aero-Engine& Space Operations of IHI Corporation
Director, Managing Executive Officer, President of
Aero-Engine & Space Operations of IHI Corporation
Executive Vice President of IHI Corporation
President, Chief Executive Officer of IHI Corporation
Chairman of the Board, Chief Executive Officer of IHI
Corporation
Chairman of the Board of IHI Corporation
Director of IHI Corporation
Senior Counselor of IHI Corporation
Director (Outside) of Furukawa Electric Co., Ltd.
(present post)
Senior Adviser of IHI Corporation (present post)

Term ofofficeNumber ofshares held
(hundreds ofshares)(Note 3)12(Note 3)40

Important Concurrent Post
Senior Adviser of IHI Corporation
Director (Outside) of Oki Electric Industry Company, Limited
Director (Outside) of KAJIMA CORPORATION
Chairman of New Energy and Industrial Technology Development
Organization (NEDO)
April 1984
July 1999
June 2001
June 2004
April 2006
June 2010

Director andCorporate
Executive Vice
President, and Satoshi Miyamoto
General Manager
of Strategy
Division

April 2011
Feb. 2012
February 20,
1962

June 2013
Oct. 2015
June 2016
July 2017
Nov. 2017
April 2018
April 2019
June 2019
April 2021
April 2022

Joined Ministry of International Trade and Industry(currently Ministry of Economy, Trade and Industry)
Director, Information Disclosure Promotion Office,Public Relations Office, Minister’s Secretariat,
Ministry of International Trade and Industry
Deputy Director, Japan External Trade Organization(JETRO) New York Center
Director, Commodity Derivatives Division, Commerceand Information Policy Bureau, Ministry of Economy,
Trade and Industry
CANON Inc. (exchange via Act on Personnel
Exchange Between the Government Sector and Private
Enterprises)
Counselor to the Commissioner of the Small andMedium Enterprise Agency, Ministry of Economy,
Trade and Industry
Councilor for Policy Evaluation, Minister’s Secretariat,
Ministry of Economy, Trade and Industry
Councilor, Minister’s Secretariat, Ministry of
Economy, Trade and Industry (Manufacturing
Industries Bureau)
Deputy Chairman, JETRO
Deputy Commissioner of the Small and Medium
Enterprise Agency, Ministry of Economy, Trade andIndustry
Commissioner of the Small and Medium Enterprise
Agency, Ministry of Economy, Trade and Industry
Retired from Ministry of Economy, Trade and Industry
Adviser (full-time), Furukawa Electric Co., Ltd.
Corporate Vice President, and General Manager of
Administration & CSR DivisionCorporate Senior Vice President, and General Manager
of Administration & CSR Division
Director and Corporate Senior Vice President, andGeneral Manager of Administration & CSR Division
Director and Corporate Senior Vice President, andGeneral Manager of Business Basis Transformation
Division
Director and Corporate Executive Vice President, andGeneral Manager of Strategy Division (present post)81

Official title orposition

Name

Date of birth

Career summary
April 1989
July 1993

Joined Okura & Co., Ltd.
Okura & Co. UK Ltd.

Oct. 1998

Joined Furukawa Electric Co., Ltd.

April 2011

General Manager of Overseas Sales Department,
Communications Company
General Manager of Overseas Sales Department,
Environment/Infrastructure Sales Division, Sales
Marketing Division
General Manager of Overseas Sales Department,
Global Business Division, and General Manager ofOverseas Sales Department,
Environment/Infrastructure Sales Division, Sales
Marketing Division
Deputy General Manager of Copper Foil Division, andGeneral Manager of Sales Department, Copper Foil
Division
General Manager of Planning & Administration
Department, Global Marketing Sales Division
General Manager of Group Marketing Department,
Global Marketing Sales DivisionCorporate Vice President, General Manager ofBusiness Innovation Design Department, Global
Marketing Sales DivisionCorporate Vice President, Deputy General Manager ofCorporate Strategy & Direction Division, General
Manager of Social Design & New Business
Development Department, General Manager of OneF
Mobility Business Development Team
Corporate Senior Vice President, General Manager of
Global Marketing Sales Division
Director and Corporate Senior Vice President, General
Manager of Global Marketing Sales Division (present
post)
Joined Furukawa Electric Co., Ltd.
Senior Manager of Planning Unit, Copper Foil
Division
General Manager of Corporate Planning Department,
Strategy Division
General Manager of Corporate Planning Department,
Strategy DivisionCorporate Vice President, General Manager of Copper
Foil Division, Functional Products DivisionCorporate Vice President, General Manager of Risk
Management Division
Director and Corporate Vice President, General
Manager of Risk Management Division (present post)

April 2013
April 2015

Director andCorporate SeniorVice President,
and General
Manager of
GlobalMarketing Sales
Division

July 2015
Yoshio Masutani

September
29, 1965

April 2017
April 2018
April 2020
April 2021

April 2022
June 2022
April 1988
April 2013
Director andCorporate Vice
President, andGeneralManager, Risk
Management
Division

April 2016
Toshio Yanagi

January 26,
1966

April 2018
April 2020
April 2021
June 2023

82

Term ofofficeNumber ofshares held
(hundreds ofshares)(Note 3)44

(Note 3)39

Official title orposition

Name

Date of birth

Career summary
April 1986
Nov. 2005
Aug. 2009
Aug. 2011
June 2013
Nov. 2013

Director

Akihiro Fukunaga

January 29,
1964

April 2016
April 2018
April 2019
June 2019
April 2021
April 2022
April 2024
April 1980
June 2004
June 2008
March 2009

Audit &
Supervisory
Board Member(full-time)

Nozomu Amano

June 2010
July 15, 1956 April 2012
April 2013
April 2014
April 2018
June 2018

Joined Furukawa Electric Co., Ltd.
Senior Vice President and Chief Financial Officer of
OFS Fitel, LLC
Manager of Corporate Tax Section, Finance &Accounting Department
Manager of Corporate Accounting Section, Finance &Accounting Department
Manager of Corporate Accounting and Tax Section,
Finance & Accounting Department, Finance &Procurement Division
General Manager of Global Group Management
Office, Global Group Management Division
General Manager of Finance & Accounting
Department, Finance & Procurement DivisionCorporate Vice President and General Manager of
Global Management DivisionCorporate Vice President and General Manager ofFinance & Global Management Division
Director and Corporate Vice President and General
Manager of Finance & Global Management Division
Director and Corporate Senior Vice President andGeneral Manager of Finance & Global Management
Division
Director and Corporate Senior Vice President andGeneral Manager of Finance & Accounting Division
Director (present post)
Joined Furukawa Electric Co., Ltd.
General Manager of Legal Department
General Manager of HR & Administration Department
General Manager of HR & Administration Department
and General Manager of Corporate Business Research
Department
Director and Corporate Vice President, CSO
Director and Corporate Vice President, CSRO
Director and Corporate Vice President, General
Manager of Administration & CSR Division
Director and Corporate Senior Vice President, General
Manager of Administration & CSR Division
Director
Audit & Supervisory Board Member (full-time)(present post)

83

Term ofofficeNumber ofshares held
(hundreds ofshares)(Note 3)60(Note 4)63

Official title orposition

Name

Date of birth

Career summary

Number ofshares held
(hundreds ofshares)(Note 4)48

(Note 5)200

April 1984
Oct. 2006

Audit &
Supervisory
Board Member(full-time)

Masao Terauchi

Audit &
Supervisory
Board Member(full-time)

Hiroyuki Ogiwara

Joined Furukawa Electric Co., Ltd.
Production Control Group Manager of Semiconductor
Devices Department, FITEL Products Division,Communications Company
May 2009
Assistant Manager of Procurement Department
June 2009
General Manager of Procurement Department
April 2013
Assistant Manager of Planning Unit, Electric
Conductor Division
June 2013
President of PT Tembaga Mulia Semanan Tbk
Corporate Vice President, President of PT Tembaga
October 28, April 2017
Mulia Semanan Tbk
1961
June 2017
Corporate Vice President, General Manager of Electric
Conductor Division, Electronics Component Material
Division
April 2018
Corporate Vice President, General Manager of Electric
Conductor Division, Electronics Component Division
April 2020
Corporate Vice President, General Manager ofElectronics Component Material Division
April 2022
Adviser of Electronics Component Material Division
June 2022
Audit & Supervisory Board Member (full-time)(present post)
April 1983
Joined Furukawa Electric Co., Ltd.
Dec. 2003
Vice President and Chief Financial Officer of OFS
Fitel, LLC
Nov. 2005
Manager of Tax & Accounting Department
June 2009
General Manager of Finance & Accounting
Department
April 2013
General Manager of Finance & Accounting
Department, Finance & Procurement Division
April 2014
Corporate Vice President General Manager of Finance& Procurement Division
June 2014
Director and Corporate Vice President, General
Manager of Finance & Procurement Division
April 2016
Director and Corporate Senior Vice President, General
Manager of Finance & Procurement Division andGeneral Manager of Global Group Management
Division
April 2017
Director and Corporate Executive Vice President,
General Manager of Finance & Procurement Division
February 18,
and General Manager of Global Group Management
1961
Division
April 2018
Director and Corporate Executive Vice President,
General Manager of Finance & Procurement Division
April 2019
Representative Director and Corporate Senior
Executive Vice President, Chief of Transformation
Division
April 2021
Representative Director and Corporate Senior
Executive Vice President, General Manager ofCorporate Strategy & Direction Division
April 2022
Director and Corporate Senior Executive Vice
President
June 2022
Corporate Senior Executive Vice President
April 2023
AdviserJune 2023
Audit & Supervisory Board Member (full-time)(present post)
Important Concurrent Post
Director (Outside) of ASAHI-SEIKI MANUFACTURING CO., LTD.

Term ofoffice84

Official title orposition

Name

Date of birth

Career summary
April 1979
July 1998
April 2000

April 2002
July 2005
July 2006

Term ofofficeNumber ofshares held
(hundreds ofshares)(Note 4)23

(Note 6)

17

Public Prosecutor, Tokyo District Public Prosecutors
OfficeSenior Counsel, Minister’s Secretariat of Ministry ofJusticePublic Prosecutor of Tokyo High Public Prosecutors
Office and Assistant Director, Public Security
Department of Tokyo District Public Prosecutors
OfficeDirector, the United Nations Asia and Far East Institutefor the Prevention of Crime and the Treatment of
Offenders
Director, Trial Department of Tokyo High Public
Prosecutors OfficePublic Prosecutor, Supreme Public Prosecutors Office

June 2007

Audit &
Supervisory
Board Member

Kunihiko Sakai

March 4,1954

Chief Public Prosecutor, Nara District Public
Prosecutors Office
July 2008
Director of General Affairs Department, Supreme
Public Prosecutors Office
June 2010
Director, Lay Judge Trial Department of Supreme
Public Prosecutors’ Office
Oct. 2010
Chief Public Prosecutor of Nagoya District Public
Prosecutors Office
June 2012
President, Research and Training Institute, Ministry ofJustice
July 2014
Superintending Prosecutor, Takamatsu District Public
Prosecutors Office
Sept. 2016
Superintending Prosecutor, Hiroshima District Public
Prosecutors Office
March 2017
Resigned Above
April 2017
Adviser Attorney, TMI Associates (present post)
June 2018
Audit & Supervisory Board Member (Outside) of
Furukawa Electric Co., Ltd. (present post)
June 2019
Director (Outside), Audit & Supervisory Committee
Member of HONDA MOTOR CO., LTD.
June 2021
Director (Outside) of HONDA MOTOR CO., LTD.
(present post)
Important Concurrent Post
Adviser Attorney of TMI Associates
Director (Outside) of HONDA MOTOR CO., LTD.
Oct. 1984
May 1988

Joined Asahi Accounting Company (currently, KPMG
AZSA LLC)
Registered as Certified Public Accountant

May 2006

Partner, KPMG AZSA LLC

Aug. 2007

Chairperson of Audit Standards Committee, The
Japanese Institute of Certified Public Accountants
Executive Board Member (in charge of Quality Control
Standards and Audit Standards), The Japanese Instituteof Certified Public Accountants
Board Member, International Auditing and AssuranceStandards Board (IAASB), International Federation of
Accountants (IFAC)
Member of the Business Accounting Council in the
Financial Services Agency
Resigned from KPMG AZSA LLC

July 2010

Audit &
Supervisory
Board Member

Jan. 2015
Sayaka Sumida

January 28,
1961

Feb. 2017
March 2020
June 2020

Audit & Supervisory Board Member (Outside) of
Furukawa Electric Co., Ltd. (present post)
Important Concurrent Post
Audit & Supervisory Board Member (Outside) of The Nisshin OilliO
Group, Ltd.
Director (Outside) of Audit & Supervisory Committee Member of
ADVANTEST CORPORATION
Director (Outside) of Japan Exchange Group, Inc.

85

Official title orposition

Name

Date of birth

Career summary
April 1975

Joined ITOCHU Corporation

April 2000

General Manager of Automotive Business Strategy
Office of ITOCHU Corporation
General Manager of Corporate Planning Department,
Finance/ Real Estate/ Insurance/ Logistics Company of
ITOCHU Corporation
Executive Officer and General Manager of Logistics
Division of ITOCHU Corporation
Executive Officer and General Manager of Finance
Division of ITOCHU Corporation
Managing Director, and President, Finance /Real
Estate / Insurance/ Logistics Company of ITOCHU
Corporation
Retired from ITOCHU Corporation

Feb. 2001
June 2004
April 2005
June 2006
May 2008
June 2008
Audit &
Supervisory
Board Member

Takao Shiomi

November25, 1952

March 2012
April 2012
June 2012
April 2014
March 2016
April 2016
June 2016
June 2018
Aug. 2018
June 2021
Aug. 2021

Term ofofficeNumber ofshares held
(hundreds ofshares)(Note 7)–

Executive Vice President and Representative Directorof Orient Corporation
Retired from Orient Corporation
Managing Executive Officer and President, Machinery
Company of ITOCHU Corporation
Representative Director, Managing Executive Officer
and President, Machinery Company of ITOCHU
Corporation
Representative Director, Senior Managing Executive
Officer and President, Machinery Company of
ITOCHU Corporation
Retired from ITOCHU Corporation
Managing Executive Officer of ISUZU MOTORSLIMITED
Executive Vice President of ISUZU MOTORSLIMITED
Retired from ISUZU MOTORS LIMITED
President, ITOCHU Corporate Pension Fund
Audit & Supervisory Board Member (Outside) of
Furukawa Electric Co., Ltd. (present post)
Retired from President, ITOCHU Corporate Pension
Fund

808

Total

Notes 1. Directors Mr. Osamu Tsukamoto, Mr. Takashi Tsukamoto, Mr. Yoshiro Miyokawa, Ms. Yukiko Yabu, and Mr. Tamotsu Saito are Outside
Directors under Article 2, item (xv) of the Companies Act.
2. Audit & Supervisory Board Members Mr. Kunihiko Sakai, Ms. Sayaka Sumida, and Mr. Takao Shiomi are Outside Audit & Supervisory
Board Members under Article 2, item (xvi)of the Companies Act.
3. The term of office is from the end of the Annual Shareholders Meeting for FY2022 to the end of the Annual Shareholders Meeting for
FY2023.
4. The term of office is from the end of the Annual Shareholders Meeting for FY2021 to the end of the Annual Shareholders Meeting for
FY2025.
5. The term of office is from the end of the Annual Shareholders Meeting for FY2022 to the end of the Annual Shareholders Meeting for
FY2026.
6. The term of office is from the end of the Annual Shareholders Meeting for FY2019 to the end of the Annual Shareholders Meeting for
FY2023.
7. The term of office is from the end of the Annual Shareholders Meeting for FY2020 to the end of the Annual Shareholders Meeting for
FY2024.
8. The Company has introduced the executive officer system with 27 Corporate Vice Presidents (consisting of one Corporate Executive Vice
President, seven Corporate Senior Vice Presidents, and 19 Corporate Vice Presidents), of which three serve concurrently as Directors.
Among the Corporate Vice Presidents, two are female and two are non-Japanese.

869. To ensure that the Company will not lack the mandatory number of Outside Audit & Supervisory Board Members, one reserve Outside
Audit & Supervisory Board Member has been elected. The career summary of the reserve Outside Audit & Supervisory Board Member is
as follows.

Name

Date of birth

Career summary
April 1967
April 1993
Dec. 1993
Jan. 1996
Dec. 1997

Kenji Koroyasu

April 16, 1942

Public Prosecutor
Public Prosecutor, Supreme Public Prosecutors Office
Chief Public Prosecutor, Otsu District Public Prosecutors Office
Chief Secretary, Ministry of JusticeDirector of General Affairs Department, Supreme Public Prosecutors
OfficeApril 1999
Director of Criminal Affairs Department, Supreme Public Prosecutors
OfficeDec. 1999
Director General, Research and Training Institute of Ministry of Justice
May 2001
Superintending Prosecutor, Sapporo High Public Prosecutors Office
June 2002
Superintending Prosecutor, Nagoya High Public Prosecutors OfficeFeb. 2003
Superintending Prosecutor, Osaka High Public Prosecutors Office
June 2004
Retired as Superintending Prosecutor
July 2004
Joined Tokyo Eiwa Attorneys at Law
July 2008
Adviser Attorney, TMI Associates (present post)
June 2010
Audit & Supervisory Board Member (Outside) of Furukawa ElectricCo., Ltd.
June 2018
Retired as Audit & Supervisory Board Member (Outside) of
Furukawa Electric Co., Ltd.
Important Concurrent Post

Number ofshares held
(hundreds ofshares)Adviser Attorney of TMI Associates

87

20

(ii) The Company will make proposals of the “Election of eleven (11) Directors” and “Election of one (1) Audit & Supervisory Board
Member” as matters to be resolved at the 202nd Annual Shareholders Meeting to be held on June 26, 2024. If these proposals areapproved and resolved as originally proposed, the members of the Board of Directors and the Audit & Supervisory Board of theCompany will be as follows. Note that their official titles or positions and career summaries reflect matters to be resolved at theBoard of Directors meeting and the Audit & Supervisory Board meeting to be held immediately after the end of the 202nd Annual
Shareholders Meeting.
Male: 15, Female: 2 (Ratio of female officers: 11.8%)
Official title orposition

Name

Date of birth

Career summary
April 1985

Joined Furukawa Electric Co., Ltd.

April 2014

Corporate Vice President and General Manager of
Copper & High Performance Material Products
Division
Corporate Senior Vice President, Adviser ofAutomotive Electronics Material Business, and General
Manager of Copper & High Performance Material
Products Division
Director and Corporate Senior Vice President, Adviserof Automotive Electronics Material Business, andGeneral Manager of Copper & High Performance
Material Products Division
Representative Director and Corporate Executive Vice
President, General Manager of Global Marketing Sales
Division
President and Representative Director
Chairman and Director (present post)

April 2015

Chairman and
Director

June 2015
Keiichi Kobayashi

June 24, 1959

April 2016
April 2017
April 2023

Term ofofficeNumber ofshares held
(hundreds ofshares)(Note 3)98

(Note 3)55

Important Concurrent Post
Director (Outside) of NTT DATA Japan Corporation
April 1990
April 2014
April 2016
April 2017
Feb. 2020
President andRepresentative
Director

April 2020
Hideya Moridaira

July 13, 1965
April 2021

May 2021
April 2022
June 2022
April 2023

Joined Furukawa Electric Co., Ltd.
Section Chief of Corporate Planning Section, Strategy
Division
General Manager of Planning & Administration
Department, Communications Solutions Division
Deputy General Manager of Communications Solutions
Division, General Manager of Planning &Administration Department (concurrent posts)
General Manager of Optical Fiber & Cable Products
Division in Communications Solutions DivisionCorporate Vice President, General Manager of OpticalFiber & Cable Products Division in Communications
Solutions DivisionCorporate Vice President, General Manager ofCommunications Solutions Division, General Manager
of Optical Fiber & Cable Products Division (concurrent
posts)
Corporate Vice President, General Manager ofCommunications Solutions DivisionCorporate Senior Vice President, General Manager ofCommunications Solutions Division
Director and Corporate Senior Vice President, General
Manager of Communications Solutions Division
President and Representative Director (present post)88Official title orposition

Name

Date of birth

Career summary
April 1974

Nov. 2013
April 2014

Joined The Dai-Ichi Kangyo Bank., Ltd.（currently
Mizuho Bank, Ltd.）
Executive Officer / General Manager of Human
Resources Division of Mizuho Corporate Bank, Ltd.
(currently Mizuho Bank, Ltd.)Managing Executive Officer / Head of Risk
Management Group and Head of Human ResourcesGroup of Mizuho Financial Group, Inc.
Managing Executive Officer / Head of Europe, Middle
East and Africa of Mizuho Corporate Bank, Ltd.
Managing Director / Chief Strategy Officer and Chief
Financial Officer of Mizuho Corporate Bank, Ltd.
Deputy President of Mizuho Corporate Bank, Ltd.
Deputy President-Executive Officer / Head ofFinancial Control and Accounting Group of Mizuho
Financial Group, Inc.
Deputy President / Head of Financial Control andAccounting Group of Mizuho Financial Group, Inc.
President & CEO of Mizuho Financial Group, Inc.
Chairman of Mizuho Financial Group, Inc. andPresident & CEO of Mizuho Bank, Ltd.
Chairman of Mizuho Financial Group, Inc. andChairman of Mizuho Bank, Ltd.
Chairman of Mizuho Financial Group, Inc.
Senior Adviser of Mizuho Financial Group

April 2017

Honorary Adviser of Mizuho Financial Group

April 2002
March 2003
April 2004
March 2006
April 2007
April 2008
June 2008
Director

Takashi Tsukamoto

August 2,
1950

April 2009
June 2011
July 2013

June 2017

Audit & Supervisory Board Member (Outside) of
Furukawa Electric Co., Ltd.
June 2021
Director (Outside) of Furukawa Electric Co., Ltd.
(present post)
July 2023
Senior Adviser of Mizuho Financial Group, Inc.
(present post)
Important Concurrent Post
Senior Adviser of Mizuho Financial Group, Inc.
Director (Outside) of Asahi Mutual Life Insurance Company
Director (Outside) of AEON CO., LTD.
Director (Outside) of Internet Initiative Japan Inc.

89

Term ofofficeNumber ofshares held
(hundreds ofshares)(Note 3)52

Official title orposition

Name

Date of birth

Career summary
April 1975
Jan. 2003
Sept. 2004
April 2005
Sept. 2005

Director

Yoshiro Miyokawa

December28, 1952

April 2006
April 2008
June 2008
June 2011
June 2013
June 2017
June 2019
April 1981
Jan. 2006
Jan. 2011
April 2012
April 2013

Director

Yukiko Yabu

June 23, 1958

March 2014
June 2014
June 2015
June 2016
June 2019
June 2021

Joined Yamanouchi Pharmaceutical Co., Ltd.
(currently Astellas Pharma Inc.)
General Manager, Business Process Innovation
Promotion Department, Yamanouchi Pharmaceutical
Leader, Integration Secretariat, Merger Preparatory
Committee, Group Strategy Planning Department,
Yamanouchi Pharmaceutical
General Manager, Integration Promotion Department,
Astellas Pharma Inc.
Executive Officer and General Manager, Business
Innovation Department, Astellas Pharma Inc.
Executive Officer and General Manager, Human
Resources Department, Astellas Pharma Inc.
Executive Officer and Chief Administrative Officer,
Astellas Pharma Inc.
Senior Executive Officer and Chief Administrative
Officer, Astellas Pharma Inc.
Vice President, Executive Officer and Chief
Administrative Officer, Astellas Pharma Inc.
Representative Director & Vice President, Chief
Administrative Officer, and Chief Compliance Officer,
Astellas Pharma Inc.
Retired from Astellas Pharma Inc.
Director (Outside) of Furukawa Electric Co., Ltd.
(present post)
Joined Matsushita Electric Industrial Co., Ltd.
(currently Panasonic Holdings Corporation)
Director of Lifestyle Value Research Laboratory, R&D
Headquarters, Home Appliances Company, Matsushita
Electric Industrial Co., Ltd.
Director of Global Consumer Research Center,
Corporate Brand Strategy Division, PanasonicHoldings Corporation
Director of Consumer Research Center, Global
Consumer Marketing Sector, Panasonic Holdings
Corporation
Director and Group Manager responsible for consumer
research at the Global Marketing Planning Center,
Appliances Company, Panasonic Holdings
Corporation
Retired from Panasonic Holdings Corporation
Director (Outside) of DUSKIN CO., LTD.
Director (Outside) of TAKARA HOLDINGS INC.
Director (Outside) of DAIWA HOUSE INDUSTRY
CO., LTD. (present post)
Director (Outside) of Furukawa Electric Co., Ltd.
(present post)
Director (Outside), Audit & Supervisory Committee
Member of IBIDEN CO., LTD. (present post)

Important Concurrent Post
Director (Outside) of DAIWA HOUSE INDUSTRY CO., LTD.
Director (Outside), Audit & Supervisory Committee Member of
IBIDEN CO., LTD.

90

Term ofofficeNumber ofshares held
(hundreds ofshares)(Note 3)31

(Note 3)21

Official title orposition

Name

Date of birth

Career summary
April 1975
June 2006
Jan. 2008
April 2008
April 2009

Director

Tamotsu Saito

July 13, 1952

April 2011
April 2012
April 2016
April 2017
April 2020
June 2020
June 2021
April 2024

Joined Ishikawajima-Harima Heavy Industries Co.,Ltd (currently IHI Corporation)
Executive Officer, Vice President of Aero-Engine &Space Operations of Ishikawajima-Harima Heavy
Industries Co., Ltd.
Executive Officer, President of Aero-Engine & Space
Operations of IHI Corporation
Director, Executive Officer, President of Aero-Engine& Space Operations of IHI Corporation
Director, Managing Executive Officer, President of
Aero-Engine & Space Operations of IHI Corporation
Executive Vice President of IHI Corporation
President, Chief Executive Officer of IHI Corporation
Chairman of the Board, Chief Executive Officer of IHI
Corporation
Chairman of the Board of IHI Corporation
Director of IHI Corporation
Senior Counselor of IHI Corporation (present post)
Director (Outside) of Furukawa Electric Co., Ltd.
(present post)
Senior Adviser of IHI Corporation (present post)

Important Concurrent Post
Senior Adviser of IHI Corporation
Director (Outside) of Oki Electric Industry Company, Limited
Director (Outside) of KAJIMA CORPORATION
Chairman of New Energy and Industrial Technology Development
Organization (NEDO)

91

Term ofofficeNumber ofshares held
(hundreds ofshares)(Note 3)12

Official title orposition

Name

Date of birth

Career summary
April 1987
June 2003
July 2004
July 2007
July 2009
July 2011
July 2012
Feb. 2013
June 2014

Director

Takeo Hoshino

May 16,
1962

April 2015
July 2016

July 2017
July 2018
Nov. 2018
April 2019
Sep. 2019
June 2024

Joined Ministry of International Trade and Industry(currently Ministry of Economy, Trade and Industry)
Officer, Policy Planning and Research Office,
Personnel Division, Ministry of International Tradeand Industry
Deputy Director of the San Francisco Office andManager of the Business Innovation Center, Japan
External Trade Organization (JETRO)
Director for Electronic Devices, Commerce andInformation Policy Bureau, Ministry of Economy,
Trade and Industry
Director, Technology Cooperation Division, Tradeand Economic Cooperation Bureau, Ministry of
Economy, Trade and Industry
Director, Nonferrous Metals Division, Manufacturing
Industries Bureau, Ministry of Economy, Trade andIndustry
Commissioner and Director-General for Information,
National Institute of Technology and Evaluation
Director for Nuclear Incident Recovery,
Reconstruction Agency
Director, Regional Economic and Industrial Policy
Division, Regional Economic and Industrial Group,
Ministry of Economy, Trade and Industry
Deputy Director-General for Industrial Technology
and Standards Certification, Ministry of Economy,
Trade and Industry
Deputy Director-General for Regional Economic andIndustrial Policy, Ministry of Economy, Trade andIndustry
Deputy Director-General, Town/People/Work
Revitalization Headquarters, Cabinet Secretariat
Deputy Secretary General, Office for the Promotionof Regional Revitalization Cabinet Office
Deputy Director-General, Nuclear Incident Disaster
Response, Ministry of Economy, Trade and Industry
Retired from Ministry of Economy, Trade andIndustry
Research Fellow, Department of Materials
Engineering, Graduate School of Engineering, The
University of Tokyo
Project Professor, Department of Materials
Engineering, Graduate School of Engineering, The
University of Tokyo (present post)
Deputy General Manager, Division of University
Corporate Relations, The
University of Tokyo
Director (Outside) of Furukawa Electric Co., Ltd.
(scheduled)

92

Term ofofficeNumber ofshares held
(hundredsof shares)(Note 3)–

Official title orposition

Name

Date of birth

Career summary
April 1984
July 1999
June 2001
June 2004
April 2006
June 2010
April 2011

Director andCorporate
Executive Vice
President, andGeneralManager ofStrategy
Division

Feb. 2012
Satoshi Miyamoto

February 20,
June 2013
1962
Oct. 2015
June 2016
July 2017
Nov. 2017
April 2018
April 2019
June 2019
April 2021
April 2022

Joined Ministry of International Trade and Industry(currently Ministry of Economy, Trade and Industry)
Director, Information Disclosure Promotion Office,Public Relations Office, Minister’s Secretariat,
Ministry of International Trade and Industry
Deputy Director, Japan External Trade Organization(JETRO) New York Center
Director, Commodity Derivatives Division,
Commerce and Information Policy Bureau, Ministryof Economy, Trade and Industry
CANON INC. (exchange via Act on Personnel
Exchange Between the Government Sector andPrivate Enterprises)
Counselor to the Commissioner of the Small andMedium Enterprise Agency, Ministry of Economy,
Trade and Industry
Councilor for Policy Evaluation, Minister’s
Secretariat, Ministry of Economy, Trade and Industry
Councilor, Minister’s Secretariat, Ministry of
Economy, Trade and Industry (Manufacturing
Industries Bureau)
Deputy Chairman, JETRO
Deputy Commissioner of the Small and Medium
Enterprise Agency, Ministry of Economy, Trade andIndustry
Commissioner of the Small and Medium Enterprise
Agency, Ministry of Economy, Trade and Industry
Retired from Ministry of Economy, Trade andIndustry
Adviser (full-time), Furukawa Electric Co., Ltd.
Corporate Vice President, and General Manager of
Administration & CSR DivisionCorporate Senior Vice President, and General
Manager of Administration & CSR Division
Director and Corporate Senior Vice President, andGeneral Manager of Administration & CSR Division
Director and Corporate Senior Vice President, andGeneral Manager of Business Basis Transformation
Division
Director and Corporate Executive Vice President,
and General Manager of Strategy Division (present
post)

93

Term ofofficeNumber ofshares held
(hundreds ofshares)(Note 3)40

Official title orposition

Name

Date of birth

Career summary
April 1989
July 1993
Oct. 1998
April 2011
April 2013
April 2015

Director andCorporate SeniorVice President,
and General
Manager of
GlobalMarketing Sales
Division

July 2015
Yoshio Masutani

September 29,
April 2017
1965
April 2018
April 2020
April 2021

April 2022
June 2022

Joined Okura & Co., Ltd.
Okura & Co. UK Ltd.
Joined Furukawa Electric Co., Ltd.
General Manager of Overseas Sales Department,
Communications Company
General Manager of Overseas Sales Department,
Environment/Infrastructure Sales Division, Sales
Marketing Division
General Manager of Overseas Sales Department,
Global Business Division, and General Manager ofOverseas Sales Department,
Environment/Infrastructure Sales Division, Sales
Marketing Division
Deputy General Manager of Copper Foil Division,and General Manager of Sales Department, Copper
Foil Division
General Manager of Planning & Administration
Department, Global Marketing Sales Division
General Manager of Group Marketing Department,
Global Marketing Sales DivisionCorporate Vice President, General Manager ofBusiness Innovation Design Department, Global
Marketing Sales DivisionCorporate Vice President, Deputy General Manager
of Corporate Strategy & Direction Division, General
Manager of Social Design & New Business
Development Department, General Manager of OneF
Mobility Business Development Team
Corporate Senior Vice President, General Manager of
Global Marketing Sales Division
Director and Corporate Senior Vice President,
General Manager of Global Marketing Sales Division(present post)

94

Term ofofficeNumber ofshares held
(hundredsof shares)(Note 3)44

Official title orposition

Name

Date of birth

Career summary
April 1988
April 2013

Director andCorporate Vice
President, andGeneral Manager
of RiskManagement
Division

April 2016
Toshio Yanagi

January 26,
1966

April 2018
April 2020
April 2021
June 2023
April 1992
March 2011
June 2013

Director andCorporate Vice
President, andGeneralManager,
Finance &Accounting
Division

Nov. 2013

Koji Aoshima

March 4,
1969

April 2018
April 2021
April 2022
April 2024
June 2024
April 1980
June 2004
June 2008
March 2009

Audit &
Supervisory
Board
Member(full-time)

Nozomu Amano

July 15,1956

June 2010
April 2012
April 2013
April 2014
April 2018
June 2018

Joined Furukawa Electric Co., Ltd.
Senior Manager of Planning Unit, Copper Foil
Division
General Manager of Corporate Planning Department,
Strategy Division
General Manager of Corporate Planning Department,
Strategy DivisionCorporate Vice President, General Manager of Copper
Foil Division, Functional Products DivisionCorporate Vice President, General Manager of Risk
Management Division
Director and Corporate Vice President, General
Manager of Risk Management Division (present post)
Joined Furukawa Electric Co., Ltd.
Manager of Accounting Group, Copper Foil Business
Department, Metals Company
Manager of Accounting Section 2, Corporate
Accounting Department, Finance & Procurement
DivisionManager of Accounting Section, Corporate
Accounting Department, Finance & Procurement
Division
General Manager of Corporate Accounting
Department, Business Management Division,
Furukawa Automotive Systems Inc
General Manager of Finance & Accounting
Department, Finance & Global Management Division,
Furukawa Electric Co., Ltd.
General Manager of Finance & Accounting
Department, Finance & Accounting DivisionCorporate Vice President, General Manager ofFinance & Accounting Division (present post)
Director and Corporate Vice President, and General
Manager of Finance & Accounting Division(scheduled)
Joined Furukawa Electric Co., Ltd.
General Manager of Legal Department
General Manager of HR & Administration Department
General Manager of HR & Administration Department
and General Manager of Corporate Business Research
Department
Director and Corporate Vice President, CSO
Director and Corporate Vice President, CSRO
Director and Corporate Vice President, General
Manager of Administration & CSR Division
Director and Corporate Senior Vice President, General
Manager of Administration & CSR Division
Director
Audit & Supervisory Board Member (full-time)(present post)

95

Term ofofficeNumber ofshares held
(hundreds ofshares)(Note 3)39

(Note 3)8(Note 4)63

Official title orposition

Name

Date of birth

Career summary
April 1984
Oct. 2006
May 2009
June 2009
April 2013

Audit &
Supervisory
Board Member(full-time)

Masao Terauchi

October 28,
1961

June 2013
April 2017
June 2017
April 2018
April 2020
April 2022
June 2022
April 1983
Dec. 2003
Nov. 2005
June 2009
April 2013
April 2014
June 2014
April 2016

Audit &
Supervisory
Board Member(full-time)

April 2017
Hiroyuki Ogiwara

February 18,
1961
April 2018
April 2019
April 2021
April 2022
June 2022
April 2023
June 2023

Joined Furukawa Electric Co., Ltd.
Production Control Group Manager of
Semiconductor Devices Department, FITEL Products
Division, Communications Company
Assistant Manager of Procurement Department
General Manager of Procurement Department
Assistant Manager of Planning Unit, Electric
Conductor Division
President of PT Tembaga Mulia Semanan Tbk
Corporate Vice President, President of PT Tembaga
Mulia Semanan Tbk
Corporate Vice President, General Manager ofElectric Conductor Division, Electronics Component
Material DivisionCorporate Vice President, General Manager ofElectric Conductor Division, Electronics Component
Division
Corporate Vice President, General Manager ofElectronics Component Material Division
Adviser of Electronics Component Material Division
Audit & Supervisory Board Member (full-time)(present post)
Joined Furukawa Electric Co., Ltd.
Vice President and Chief Financial Officer of OFS
Fitel, LLC
Manager of Tax & Accounting Department
General Manager of Finance & Accounting
Department
General Manager of Finance & Accounting
Department, Finance & Procurement DivisionCorporate Vice President General Manager of Finance& Procurement Division
Director and Corporate Vice President, General
Manager of Finance & Procurement Division
Director and Corporate Senior Vice President, General
Manager of Finance & Procurement Division andGeneral Manager of Global Group Management
Division
Director and Corporate Executive Vice President,
General Manager of Finance & Procurement Division
and General Manager of Global Group Management
Division
Director and Corporate Executive Vice President,
General Manager of Finance & Procurement Division
Representative Director and Corporate Senior
Executive Vice President, Chief of Transformation
Division
Representative Director and Corporate Senior
Executive Vice President, General Manager ofCorporate Strategy & Direction Division
Director and Corporate Senior Executive Vice
President
Corporate Senior Executive Vice President
Adviser
Audit & Supervisory Board Member (full-time)(present post)

Important Concurrent Post
Director (Outside) of ASAHI-SEIKI MANUFACTURING CO., LTD.

96

Term ofofficeNumber ofshares held
(hundreds ofshares)(Note 4)48

(Note 5)200

Official title orposition

Name

Date of birth

Career summary
April 1979
July 1998
April 2000

April 2002
July 2005
July 2006
June 2007

Audit &
Supervisory
Board Member

Kunihiko Sakai

March 4,
1954

March 2017
April 2017

Adviser Attorney, TMI Associates (present post)

June 2010
Oct. 2010
June 2012
July 2014
Sept. 2016

Number ofshares held
(hundreds ofshares)(Note 4)23

(Note 6)

17

Public Prosecutor, Tokyo District Public Prosecutors
OfficeSenior Counsel, Minister’s Secretariat of Ministry ofJusticePublic Prosecutor of Tokyo High Public Prosecutors
Office and Assistant Director, Public Security
Department of Tokyo District Public Prosecutors
OfficeDirector, the United Nations Asia and Far East
Institute for the Prevention of Crime and theTreatment of Offenders
Director, Trial Department of Tokyo High Public
Prosecutors OfficePublic Prosecutor, Supreme Public Prosecutors Office
Chief Public Prosecutor, Nara District Public
Prosecutors OfficeDirector of General Affairs Department, Supreme
Public Prosecutors OfficeDirector, Lay Judge Trial Department of Supreme
Public Prosecutors’ Office
Chief Public Prosecutor of Nagoya District Public
Prosecutors Office
President, Research and Training Institute, Ministryof Justice
Superintending Prosecutor, Takamatsu District Public
Prosecutors Office
Superintending Prosecutor, Hiroshima District Public
Prosecutors Office
Resigned Above

July 2008

Term ofofficeJune 2018

Audit & Supervisory Board Member (Outside) of
Furukawa Electric Co., Ltd. (present post)
June 2019
Director (Outside), Audit & Supervisory Committee
Member of HONDA MOTOR CO., LTD.
June 2021
Director (Outside) of HONDA MOTOR CO., LTD.
(present post)
Important Concurrent Post
Adviser Attorney of TMI Associates
Director (Outside) of HONDA MOTOR CO., LTD.
Oct. 1984
Joined Asahi Accounting Company (currently, KPMG
AZSA LLC)
May 1988
Registered as Certified Public Accountant
May 2006

Partner, KPMG AZSA LLC

Aug. 2007

Chairperson of Audit Standards Committee, The
Japanese Institute of Certified Public Accountants
Executive Board Member (in charge of Quality
Control Standards and Audit Standards), The
Japanese Institute of Certified Public Accountants
Board Member, International Auditing and AssuranceStandards Board (IAASB), International Federationof Accountants (IFAC)
Member of the Business Accounting Council in the
Financial Services Agency
Resigned from KPMG AZSA LLC

July 2010

Audit &
Supervisory
Board Member

Jan. 2015
Sayaka Sumida

January 28,
1961

Feb. 2017
March 2020
June 2020

Audit & Supervisory Board Member (Outside) of
Furukawa Electric Co., Ltd. (present post)
Important Concurrent Post
Audit & Supervisory Board Member (Outside) of The Nisshin OilliO
Group, Ltd.
Director (Outside) of Audit & Supervisory Committee Member of
ADVANTEST CORPORATION
Director (Outside) of Japan Exchange Group, Inc.

97

Official title orposition

Name

Date of birth

Career summary
April 1975
April 2000
Feb. 2001
June 2004
April 2005
June 2006
May 2008
June 2008

Audit &
Supervisory
Board Member

Takao Shiomi

November25, 1952

March 2012
April 2012
June 2012
April 2014
March 2016
April 2016

Joined ITOCHU Corporation
General Manager of Automotive Business Strategy
Office of ITOCHU Corporation
General Manager of Corporate Planning Department,
Finance/ Real Estate/ Insurance/ Logistics Companyof ITOCHU Corporation
Executive Officer and General Manager of Logistics
Division of ITOCHU Corporation
Executive Officer and General Manager of Finance
Division of ITOCHU Corporation
Managing Director, and President, Finance /Real
Estate / Insurance/ Logistics Company of ITOCHU
Corporation
Retired from ITOCHU Corporation
Executive Vice President and Representative Directorof Orient Corporation
Retired from Orient Corporation
Managing Executive Officer and President,
Machinery Company of ITOCHU Corporation
Representative Director, Managing Executive Officer
and President, Machinery Company of ITOCHU
Corporation
Representative Director, Senior Managing Executive
Officer and President, Machinery Company of
ITOCHU Corporation
Retired from ITOCHU Corporation

June 2018

Managing Executive Officer of ISUZU MOTORSLIMITED
Executive Vice President of ISUZU MOTORSLIMITED
Retired from ISUZU MOTORS LIMITED

Aug. 2018

President, ITOCHU Corporate Pension Fund

June 2021

Audit & Supervisory Board Member (Outside) of
Furukawa Electric Co., Ltd. (present post)
Retired from President, ITOCHU Corporate Pension
Fund

June 2016

Aug. 2021

Term ofofficeNumber ofshares held
(hundreds ofshares)(Note 7)

–

588

Total

Notes 1. Directors Mr. Takashi Tsukamoto, Mr. Yoshiro Miyokawa, Ms. Yukiko Yabu, Mr. Tamotsu Saito, and Mr. Takeo Hoshino will be Outside
Directors under Article 2, item (xv) of the Companies Act.
2. Audit & Supervisory Board Members Mr. Kunihiko Sakai, Ms. Sayaka Sumida, and Mr. Takao Shiomi will be Outside Audit &Supervisory Board Members under Article 2, item(xvi) of the Companies Act.
3. The term of office will be from the end of the Annual Shareholders Meeting for FY2023 to the end of the Annual Shareholders Meeting for
FY2024.
4. The term of office will be from the end of the Annual Shareholders Meeting for FY2021 to the end of the Annual Shareholders Meeting for
FY2025.
5. The term of office will be from the end of the Annual Shareholders Meeting for FY2022 to the end of the Annual Shareholders Meeting for
FY2026.
6. The term of office will be from the end of the Annual Shareholders Meeting for FY2023 to the end of the Annual Shareholders Meeting for
FY2027.
7. The term of office will be from the end of the Annual Shareholders Meeting for FY2020 to the end of the Annual Shareholders Meeting for
FY2024.
8. The Company has introduced the executive officer system with 27 Corporate Vice Presidents (consisting of one Corporate Executive Vice
President, seven Corporate Senior Vice Presidents, and 19 Corporate Vice Presidents), of which four serve concurrently as Directors.
Among the Corporate Vice Presidents, two are female and two are non-Japanese.

989. To ensure that the Company will not lack the mandatory number of Outside Audit & Supervisory Board Members, it will make the proposalof “Election of one (1) Reserve Audit & Supervisory Board Member” as a matter to be resolved at the 202nd Annual Shareholders Meeting
to be held on June 26, 2024. If this proposal is approved and resolved as originally proposed, the career summary and other information of
the reserve Audit & Supervisory Board Member will be as follows.

Name

Date of birth

Career summary
April 1967
April 1993
Dec. 1993
Jan. 1996
Dec. 1997

Kenji Koroyasu

April 16, 1942

Public Prosecutor
Public Prosecutor, Supreme Public Prosecutors Office
Chief Public Prosecutor, Otsu District Public Prosecutors Office
Chief Secretary, Ministry of JusticeDirector of General Affairs Department, Supreme Public Prosecutors
OfficeApril 1999
Director of Criminal Affairs Department, Supreme Public Prosecutors
OfficeDec. 1999
Director General, Research and Training Institute of Ministry of Justice
May 2001
Superintending Prosecutor, Sapporo High Public Prosecutors Office
June 2002
Superintending Prosecutor, Nagoya High Public Prosecutors OfficeFeb. 2003
Superintending Prosecutor, Osaka High Public Prosecutors Office
June 2004
Retired as Superintending Prosecutor
July 2004
Joined Tokyo Eiwa Attorneys at Law
July 2008
Adviser Attorney, TMI Associates (present post)
June 2010
Audit & Supervisory Board Member (Outside) of Furukawa ElectricCo., Ltd.
June 2018
Retired as Audit & Supervisory Board Member (Outside) of
Furukawa Electric Co., Ltd.
Important Concurrent Post

Number ofshares held
(hundreds ofshares)Adviser Attorney of TMI Associates

99

20

2)

Status of Outside Officers(i)Numbers of Outside Officers
The Company has five Outside Directors and three Outside Audit & Supervisory Board Members as of June 24, 2024 (filing dateof this Annual Securities Report). The Company will make proposals of “Election of eleven (11) Directors” and “Election of one(1) Audit & Supervisory Board Member” as matters to be resolved at the 202nd Annual Shareholders Meeting to be held on June
26, 2024, but even after these proposals will be approved and resolved as originally proposed, the above numbers will remainunchanged.

(ii) The Company’s views on functions and roles of outside officers to be fulfilled in corporate governance, standards and policies fortheir independence, and their appointment
Outside Directors and Outside Audit & Supervisory Board Members of the Company have fulfilled their functions and roles offurther strengthening management supervision by the Board of Directors and auditing by Audit & Supervisory Board Members bymeans of actively expressing their opinions and making recommendations based on their extensive knowledge at the Board of
Directors, the Audit & Supervisory Board, and other occasions.
The Company has set forth the independence standards to appoint outside officers as follows.
<Independence Standards for Outside Officers>
If none of the following attributes are applicable to the relevant outside Directors and outside Audit & Supervisory Board Members(including candidates), the Company considers that they are independent Directors and Audit & Supervisory Board Members
without the possibility of creating any conflict of interest with general shareholders.
(a) Person belonging to a company whose main clients include the Company (a client who provides products or services to theCompany and whose amount of transactions with the Company is equivalent to more than 2% of the client’s annualized total
net sales in the most recent fiscal year) or who engages in such operations.
(b) Person belonging to a company which is one of the Company’s main clients (a client to whom the Company provides products
or services and whose amount of transactions with the Company is equivalent to more than 2% of the Company’s annualized
total net sales in the most recent fiscal year) or who engages in such operations.
(c) Person who engages in operations at a financial institution which is a main lender to the Company (a lender whose amount ofloans is equivalent to more than 2% of the Company’s total assets in the most recent years).
(d) Person who receives monetary or other economic benefits from the Company of JPY 10 million or more a year, over and above
officer’s remuneration, in the capacity of such an expert as a consultant, accountant, lawyer, or who belongs to any legal entity
which receives JPY 100 million a year from the Company.
(e) Person who has fallen under any of the items (a) to (d) during any period within the past three years.
(f) Relative of the person who falls under any of the items (a) to (e) above, within the second degree of kinship.
(g) Any other person in breach of standards for independence set out by Tokyo Stock Exchange, Inc.
* Even if any of the items (a) to (g) is not applicable, the Company may determine that the person is not independent dependingon factors such as the amount of transactions at subsidiaries of the Company or those of the relevant client to which theperson belongs.

100

(iii) Outside Officers and their relationship with the Company
The status of outside officers and their relationship with the Company as of June 24, 2024 (filing date of this Annual Securities
Report) are as follows.

Outside Director
Osamu Tsukamoto

Mr. Osamu Tsukamoto has many years of experience especially in the environment and energy fields at the
Ministry of Economy, Trade and Industry as well as his extensive knowledge since he appointed outside
Director, despite the fact that he has not been involved in corporate management other than serving as an
outside director of the Company. Since he assumed the position of Outside Director of the Company, he has
actively provided advice and suggestions mainly on research & development, business strategy, and productquality, taking into account the government’s economic policies and market trends. His advice andrecommendations backed by his in-depth insights into industry policies, especially in the environment andenergy areas, will be extremely useful for the Group to further focus on developing new technologies andnew businesses. In addition, the Company expects that he will contribute to strengthening the oversightfunction of the Board of Directors from an independent viewpoint. Therefore, the Company appointed him
as an Outside Director, believing that he is qualified for the position.
An advisory contract was entered into by and between Mr. Tsukamoto and the Company in October 2010.
Since then, the Company has been receiving professional advice from him on the business fields of Furukawa
Electric Group. After he became an Outside Director in June 2013, the Company continued to pay
compensations for his advice in his area of expertise in addition to the remuneration for Outside Director andwill continue to do so after he is re-elected as a Director. The amount of the compensation which the Company
has paid to him so far is less than ¥5 million, which is lower than the threshold specified in the Company’s
Independence Standards.
In light of the independence standards for outside officers specified by the Tokyo Stock Exchange and theCompany, it is our judgement that he is independent from the Company.

Outside Director
Takashi Tsukamoto

Mr. Takashi Tsukamoto has held several leadership positions, including Director in charge of Finance andRepresentative Director, in a financial institution, and has a wealth of experience and extensive knowledge ofoverall corporate management, including finance and accounting. Since he assumed the position of Outside
Director of the Company in 2021, he has actively provided advice and recommendations mainly on businessstrategy, group management, financial policies and investor relations from the perspectives of Furukawa
Electric Group’s global management as well as shareholders and other stakeholders. Furthermore, he has
demonstrated his leadership as the chairperson of Nominating/Compensation Committee as well as Outside
Officers Committee, while taking initiative as the lead outside officer by sharing the recognition of theCompany’s management challenges among outside officers and by ensuring cooperation between outside
officers and the management/Audit & Supervisory Board (Members). As such, he has significantly
contributed to improving the Company’s corporate governance. His advice and recommendations on
corporate management and finance/accounting based on his experience and expertise, as well as hisleadership, will be extremely beneficial for the Group to work on strengthening the corporate governancesystem and promoting global corporate management. In addition, the Company expects that he will contributeto strengthening the oversight function of the Board of Directors from an independent viewpoint. Therefore,
the Company appointed him as an Outside Director, believing that he is qualified for the position.
Mizuho Bank, Ltd., where Mr. Takashi Tsukamoto served as President & CEO in the past, and Furukawa
Electric Group borrowed ¥63,263 million as of March 31, 2024. Mr. Tsukamoto, however, retired from theexecutive position in June 2013.
In light of the independence standards for outside officers specified by the Tokyo Stock Exchange and theCompany, it is our judgement that he is independent from the Company.

Outside Director
Yoshiro Miyokawa

Mr. Yoshiro Miyokawa assumed prominent administrative positions and served as Representative Director &Vice President at a large pharmaceutical company and has extensive experience and in-depth insight incorporate management, human resources policy, and compliance. Since he assumed the position of Outside
Director of the Company, he has actively provided advice and recommendations mainly on corporate
governance, business strategy, and personnel development to improve governance of the entire Furukawa
Electric Group. His advice and recommendations on corporate management and compliance based on his
experience and expertise will be extremely useful for the Group to work on enhancing the group governancesystem for the entire Group. In addition, the Company expects that he will contribute to strengthening theoversight function of the Board of Directors from an independent viewpoint. Therefore, the Company
appointed him as an Outside Director, believing that he is qualified for the position.
In light of the independence standards for outside officers specified by the Tokyo Stock Exchange and theCompany, it is our judgement that he is independent from the Company.

101

Outside Director
Yukiko Yabu

Ms. Yukiko Yabu has served as outside director of several listed companies including our Company, although
she has not engaged in corporate management in any other capacity; and has a wealth of experience andadvanced knowledge of customer-oriented marketing and product development based on her experience witha leading electrical appliance manufacturer. Since she assumed the position of Outside Director of theCompany, she has actively provided advice and recommendations mainly on business strategy, marketing,and diversity from a broad perspective. Her advice and recommendations based on her experience andexpertise in marketing and product development, among others, will be extremely useful for the Group toaccelerate global sales expansion. In addition, the Company expects that she will contribute to strengthening
the oversight function of the Board of Directors from an independent viewpoint. Therefore, the Company
appointed her as an Outside Director, believing that she is qualified for the position.
In light of the independence standards for outside officers specified by the Tokyo Stock Exchange and theCompany, it is our judgement that she is independent from the Company.

Outside Director
Tamotsu Saito

Mr. Tamotsu Saito has held several leadership positions including President & Representative Director andChairperson of one of Japan’s leading heavy industry manufacturers and has a wealth of experience andextensive expertise of global corporation management and overall manufacturing (monozukuri). Since heassumed the position of Outside Director of the Company, he has actively provided advice andrecommendations mainly on business strategy, manufacturing (monozukuri), and financial policies from theperspective of the Group’s global management. His advice and recommendations based on his experienceand expertise in corporate management and manufacturing will be extremely useful for the Group to further
expand business as a manufacturer. In addition, the Company expects that he will contribute to strengthening
the oversight function of the Board of Directors from an independent viewpoint. Therefore, the Company
appointed him as an Outside Director, believing that he is qualified for the position.
Between the Company and IHI Corporation, for which Mr. Tamotsu Saito served as Chairman and
Representative Director until March 2020, there is a business relationship where the Company sells specialpurpose cables, components, etc. to IHI Corporation. However, the total trading amount in FY2023 wasapprox. ¥53 million, and therefore, the amount is quite small.
In light of the independence standards for outside officers specified by the Tokyo Stock Exchange and theCompany, it is our judgement that he is independent from the Company.

Outside Audit &Supervisory Board
MemberKunihiko Sakai

Although Mr. Kunihiko Sakai does not have direct experience in corporate management other than serving
as an outside officer, he has long years of experience as a legal professional including overseas experienceand has significant insights into such areas as corporate governance, legal risk management, and compliance.
Since he assumed the position of Outside Audit & Supervisory Board Member of the Company, he has
actively expressed his opinions mainly on legal regulations and corporate governance in various countries at
Board of Directors meetings and Audit & Supervisory Board meetings from the perspective of risk
management. Furthermore, through his experience as an Outside Audit & Supervisory Board Member of theCompany, he has profound knowledge of how Furukawa Electric Group’s compliance system was establishedand the current situation of our business operations. Accordingly, the Company expects that he will makeappropriate points and express appropriate opinions for maintaining/improving its internal control system,
including risk management, and maintaining sound management. The Company expects that he will provide
appropriate advice and opinions to contribute to strengthening the Company’s audit system. Therefore, theCompany appointed him as Outside Audit & Supervisory Board Member, believing that he is qualified forthe position.
Mr. Sakai has served as Advisor Attorney of TMI Associates since April 2017. There is a transaction related
to legal consultation between the Company and TMI Associates in the amount of approximately ¥2 million
per year for FY2023, which is lower than the threshold specified in the Company’s Independence Standards.
The transaction was of a one-time nature related to legal consultation rather than of a continuous nature underan adversary contract, and Mr. Sakai was not involved in the transaction.
In light of the independence standards for outside officers specified by the Tokyo Stock Exchange and theCompany, it is our judgement that he is independent from the Company.

102Outside Audit &Supervisory Board
MemberSayaka Sumida

Although Ms. Sayaka Sumida does not have direct experience in corporate management other than serving
as an outside officer, she has extensive familiarity with audits of financial statements and audits of internal
control from her long experience as a certified public accountant. Besides, she served as Executive Board
Member of the Japanese Institute of Certified Public Accountants, International Auditing and AssuranceStandards Board (IAASB) Member under International Federation of Accountants (IFAC), and BusinessAccounting Council Member under the Financial Services Agency. As such, she has a wealth of experiencein and extensive knowledge of finance and accounting. Since she assumed the position of Outside Audit &Supervisory Board Member of the Company, she has actively expressed her opinion mainly on groupcompany management and finance/accounting at Board of Directors meetings and Audit & Supervisory
Board meetings from the perspective of risk management. The Company expects that her experience andknowledge will contribute to strengthening the Company’s audit system, and therefore, appointed her as
Outside Audit & Supervisory Board Member, believing that she is qualified for the position.
In light of the independence standards for outside officers specified by the Tokyo Stock Exchange and theCompany, it is our judgement that she is independent from the Company.

Outside Audit &Supervisory Board
MemberTakao Shiomi

Mr. Takao Shiomi has experience in corporate management in various industries, including a large trading
company, financial institution, and manufacturer. He has a wealth of experience in and profound knowledgeof overall corporate management, including finance and accounting. Since he assumed the position of
Outside Audit & Supervisory Board Member of the Company, he has actively expressed his opinions mainly
on corporate group management at Board of Directors meetings and Audit & Supervisory Board meetingsfrom the perspective of risk management. The Company expects that his experience and knowledge willcontribute to strengthening the Company’s audit system, and therefore, appointed him as Outside Audit &Supervisory Board Member, believing that he is qualified for the position.
Mr. Takao Shiomi served as a director of ITOCHU Corporation (“ITOCHU”) from June 2012 to March 2016.
Between ITOCHU and the Company, there is a business relationship where our subsidiary sells its products
to overseas customers using ITOCHU as its agent, but the annual trade value in FY2023 was as small as
approx. ¥1,178 million. In addition, Mr. Takao Shiomi served as a director of ISUZU MOTORS LIMITED(“ISUZU”) from June 2016 to June 2018. Between ISUZU and the Company, there is a business relationshipwhere the Company sells automotive parts, etc. to ISUZU. The annual trade value in FY2023 was approx.
¥12,403 million. Furthermore, Mr. Mitsuyoshi Shibata, who served as Director of the Company from June2018 through June 2023, has assumed an office of an outside director of ISUZU, where Mr. Shiomi used toserve as a director.
In light of the independence standards for outside officers specified by the Tokyo Stock Exchange and theCompany, it is our judgement that he is independent from the Company.

Note: The Company will make proposals of “Election of eleven (11) Directors” and “Election of one (1) Audit & Supervisory Board Member” asmatters to be resolved at the 202nd Annual Shareholders Meeting to be held on June 26, 2024. If these proposals will be approved andresolved as originally proposed, the status of each outside director and their relationship with the Company are as follows.

Outside Director
Takashi Tsukamoto

Mr. Takashi Tsukamoto has held several leadership positions, including Director in charge of Finance andRepresentative Director, in a financial institution, and has a wealth of experience and extensive knowledge ofoverall corporate management, including finance and accounting. Since he assumed the position of Outside
Director of the Company in 2021, he has actively provided advice and recommendations mainly on businessstrategy, group management, financial policies and investor relations from the perspectives of Furukawa
Electric Group’s global management as well as shareholders and other stakeholders. Furthermore, he has
demonstrated his leadership as the chairperson of Nominating/Compensation Committee as well as Outside
Officers Committee, while taking initiative as the lead outside officer by sharing the recognition of theCompany’s management challenges among outside officers and by ensuring cooperation between outside
officers and the management/Audit & Supervisory Board (Members). As such, he has significantly
contributed to improving the Company’s corporate governance. His advice and recommendations on
corporate management and finance/accounting based on his experience and expertise, as well as hisleadership, will be extremely beneficial for the Group to work on strengthening the corporate governancesystem and promoting global corporate management. In addition, the Company expects that he will contributeto strengthening the oversight function of the Board of Directors from an independent viewpoint. Therefore,
the Company appointed him as an Outside Director, believing that he is qualified for the position.
Mizuho Bank, Ltd., where Mr. Takashi Tsukamoto served as President & CEO in the past, and Furukawa
Electric Group borrowed ¥63,263 million as of March 31, 2024. Mr. Tsukamoto, however, retired from theexecutive position in June 2013.
In light of the independence standards for outside officers specified by the Tokyo Stock Exchange and theCompany, it is our judgement that he is independent from the Company.

103

Outside Director
Yoshiro Miyokawa

Mr. Yoshiro Miyokawa assumed prominent administrative positions and served as Representative Director &Vice President at a large pharmaceutical company and has extensive experience and in-depth insight incorporate management, human resources policy, and compliance. Since he assumed the position of Outside
Director of the Company, he has actively provided advice and recommendations mainly on corporate
governance, business strategy, and personnel development to improve governance of the entire Furukawa
Electric Group. His advice and recommendations on corporate management and compliance based on his
experience and expertise will be extremely useful for the Group to work on enhancing the group governancesystem for the entire Group. In addition, the Company expects that he will contribute to strengthening theoversight function of the Board of Directors from an independent viewpoint. Therefore, the Company
appointed him as an Outside Director, believing that he is qualified for the position.
In light of the independence standards for outside officers specified by the Tokyo Stock Exchange and theCompany, it is our judgement that he is independent from the Company.

Outside Director
Yukiko Yabu

Ms. Yukiko Yabu has served as outside director of several listed companies including our Company, although
she has not engaged in corporate management in any other capacity; and has a wealth of experience andadvanced knowledge of customer-oriented marketing and product development based on her experience witha leading electrical appliance manufacturer. Since she assumed the position of Outside Director of theCompany, she has actively provided advice and recommendations mainly on business strategy, marketing,and diversity from a broad perspective. Her advice and recommendations based on her experience andexpertise in marketing and product development, among others, will be extremely useful for the Group toaccelerate global sales expansion. In addition, the Company expects that she will contribute to strengthening
the oversight function of the Board of Directors from an independent viewpoint. Therefore, the Company
appointed her as an Outside Director, believing that she is qualified for the position.
In light of the independence standards for outside officers specified by the Tokyo Stock Exchange and theCompany, it is our judgement that she is independent from the Company.

Outside Director
Tamotsu Saito

Mr. Tamotsu Saito has held several leadership positions including President & Representative Director andChairperson of one of Japan’s leading heavy industry manufacturers and has a wealth of experience andextensive expertise of global corporation management and overall manufacturing (monozukuri). Since heassumed the position of Outside Director of the Company, he has actively provided advice andrecommendations mainly on business strategy, manufacturing (monozukuri), and financial policies from theperspective of the Group’s global management. His advice and recommendations based on his experienceand expertise in corporate management and manufacturing will be extremely useful for the Group to further
expand business as a manufacturer. In addition, the Company expects that he will contribute to strengthening
the oversight function of the Board of Directors from an independent viewpoint. Therefore, the Company
appointed him as an Outside Director, believing that he is qualified for the position.
Between the Company and IHI Corporation, for which Mr. Tamotsu Saito served as Chairman and
Representative Director until March 2020, there is a business relationship where the Company sells specialpurpose cables, components, etc. to IHI Corporation. However, the total trading amount in FY2023 wasapprox. ¥53 million, and therefore, the amount is quite small.
In light of the independence standards for outside officers specified by the Tokyo Stock Exchange and theCompany, it is our judgement that he is independent from the Company.

Outside Director
Takeo Hoshino

Although Mr. Takeo Hoshino does not have direct experience in corporate management other than serving asan outside officer, he has held prominent positions, including Deputy Director-General, at the Ministry of
Economy, Trade and Industry, and has a wealth of experience and advanced knowledge in industrial policies,
especially in environment and energy fields, as well as materials engineering. While the Group plans topromote climate-conscious business activities and focus on developing new businesses, the Company expects
that his advice and recommendations based on his experience and expertise will contribute to stimulating
strategic discussion at the Board of Directors and strengthening its oversight function from an independent
viewpoint. Therefore, the Company requests his election as a new Outside Director.
In light of the independence standards for outside officers specified by the Tokyo Stock Exchange and theCompany, it is our judgement that he is independent from the Company.

104

Outside Audit &Supervisory Board
MemberKunihiko Sakai

Although Mr. Kunihiko Sakai does not have direct experience in corporate management other than serving
as an outside officer, he has long years of experience as a legal professional including overseas experienceand has significant insights into such areas as corporate governance, legal risk management, and compliance.
Since he assumed the position of Outside Audit & Supervisory Board Member of the Company, he has
actively expressed his opinions mainly on legal regulations and corporate governance in various countries at
Board of Directors meetings and Audit & Supervisory Board meetings from the perspective of risk
management. Furthermore, through his experience as an Outside Audit & Supervisory Board Member of theCompany, he has profound knowledge of how Furukawa Electric Group’s compliance system was establishedand the current situation of our business operations. Accordingly, the Company expects that he will makeappropriate points and express appropriate opinions for maintaining/improving its internal control system,
including risk management, and maintaining sound management. The Company expects that he will provide
appropriate advice and opinions to contribute to strengthening the Company’s audit system. Therefore, theCompany appointed him as Outside Audit & Supervisory Board Member, believing that he is qualified forthe position.
Mr. Sakai has served as Advisor Attorney of TMI Associates since April 2017. There is a transaction related
to legal consultation between the Company and TMI Associates in the amount of approximately ¥2 million
per year for FY2023, which is lower than the threshold specified in the Company’s Independence Standards.
The transaction was of a one-time nature related to legal consultation rather than of a continuous nature underan adversary contract, and Mr. Sakai was not involved in the transaction.
In light of the independence standards for outside officers specified by the Tokyo Stock Exchange and theCompany, it is our judgement that he is independent from the Company.

Outside Audit &Supervisory Board
MemberSayaka Sumida

Although Ms. Sayaka Sumida does not have direct experience in corporate management other than serving
as an outside officer, she has extensive familiarity with audits of financial statements and audits of internal
control from her long experience as a certified public accountant. Besides, she served as Executive Board
Member of the Japanese Institute of Certified Public Accountants, International Auditing and AssuranceStandards Board (IAASB) Member under International Federation of Accountants (IFAC), and BusinessAccounting Council Member under the Financial Services Agency. As such, she has a wealth of experiencein and extensive knowledge of finance and accounting. Since she assumed the position of Outside Audit &Supervisory Board Member of the Company, she has actively expressed her opinion mainly on groupcompany management and finance/accounting at Board of Directors meetings and Audit & Supervisory
Board meetings from the perspective of risk management. The Company expects that her experience andknowledge will contribute to strengthening the Company’s audit system, and therefore, appointed her as
Outside Audit & Supervisory Board Member, believing that she is qualified for the position.
In light of the independence standards for outside officers specified by the Tokyo Stock Exchange and theCompany, it is our judgement that she is independent from the Company.

Outside Audit &Supervisory Board
MemberTakao Shiomi

Mr. Takao Shiomi has experience in corporate management in various industries, including a large trading
company, financial institution, and manufacturer. He has a wealth of experience in and profound knowledgeof overall corporate management, including finance and accounting. Since he assumed the position of
Outside Audit & Supervisory Board Member of the Company, he has actively expressed his opinions mainly
on corporate group management at Board of Directors meetings and Audit & Supervisory Board meetingsfrom the perspective of risk management. The Company expects that his experience and knowledge willcontribute to strengthening the Company’s audit system, and therefore, appointed him as Outside Audit &Supervisory Board Member, believing that he is qualified for the position.
Mr. Takao Shiomi served as a director of ITOCHU Corporation (“ITOCHU”) from June 2012 to March 2016.
Between ITOCHU and the Company, there is a business relationship where our subsidiary sells its products
to overseas customers using ITOCHU as its agent, but the annual trade value in FY2023 was as small as
approx. ¥1,178 million. In addition, Mr. Takao Shiomi served as a director of ISUZU MOTORS LIMITED(“ISUZU”) from June 2016 to June 2018. Between ISUZU and the Company, there is a business relationshipwhere the Company sells automotive parts, etc. to ISUZU. The annual trade value in FY2023 was approx.
¥12,403 million. Furthermore, Mr. Mitsuyoshi Shibata, who served as Director of the Company from June2018 through June 2023, has assumed an office of an outside director of ISUZU, where Mr. Shiomi used toserve as a director.
In light of the independence standards for outside officers specified by the Tokyo Stock Exchange and theCompany, it is our judgement that he is independent from the Company.

(iv) Mutual cooperation between supervision or auditing by outside officers and internal auditing, and their relationship with internal
control division
The Company has full-time Audit & Supervisory Board Members, Outside Audit & Supervisory Board Members and Auditing
Department conduct on-site inspections (including remote auditing by using a web conference system). Outside Audit &Supervisory Board Members receive reports from full-time Audit & Supervisory Board Members on the outline of the on-site
inspections and also the outline of important meetings at which Outside Audit & Supervisory Board Members were not present.
Furthermore, Outside Audit & Supervisory Board Members receive an annual audit plan, results of quarterly reviews, an audit
report and other documents from Accounting Auditor and actively exchange opinions with them.
105

To help Outside Directors perform their supervisory duties or Outside Audit & Supervisory Board Members to perform theirauditing duties, results of audits by Audit & Supervisory Board Members and Auditing Department are regularly reported to theBoard of Directors. In addition, in cases where, for example, deficiencies in the internal control system are detected, results ofmonitoring by Risk Management Department and Auditing Department are also reported to the Board of Directors. Opinions
expressed by outside officers at the Board of Directors meetings are fully considered in improving the internal control system andimplementing subsequent audits.

106

(3) Audits
1)

Audit by Audit & Supervisory Board Members(i)Organization, staffing and procedures for audits by Audit & Supervisory Board Members<Organization and staffing for audits by Audit & Supervisory Board Members>
The organization and staffing for audits by Audit & Supervisory Board Members as of June 24, 2024 (filing date of this Annual
Securities Report) are as follows. The Company has six Audit & Supervisory Board Members, of which three are Outside Audit &Supervisory Board Members. Among the six Audit & Supervisory Board Members, four members have considerable expertise infinance and accounting. Specifically, one member has the experience of engaging in tax and accounting services as an employee of
the Company, another member has the experience of serving as an officer in charge of the finance division of the Group, anothermember has the professional experience in the field of finance and accounting with a certified public accountant designation, andyet another member has the experience of corporate management including financial and accounting. Also, the Company has
assigned two staff members who assist Audit & Supervisory Board Members in performing their duties.
The name and career history of each Audit & Supervisory Board Member are as follows.
Name

Career history, etc.
Mr. Nozomu Amano has held key posts such as General Manager of Legal Department and General
Nozomu Amano
Manager of Administration & CSR Division. He has significant insight into the Company’s corporate(Audit & Supervisory
governance and compliance, as well as expertise in finance and accounting based on his experience
Board Member (full-time))in accounting services.
Mr. Masao Terauchi has worked in divisions in charge of production control/business planning and
Masao Terauchi
procurement, and also served as President of a listed subsidiary in Asia and General Manager of(Audit & Supervisory
Electronics Component Material Division. As such, he has experience and expertise in overseas
Board Member (full-time))business management as well as energy segment.
Mr. Hiroyuki Ogiwara has held various positions in Furukawa Electric Group, including CFO of our
U.S. subsidiary, General Manager of Finance & Accounting Department of the Company, and General
Hiroyuki Ogiwara
Manager of Finance & Procurement Division of the Company. He has garnered a wealth of experience(Audit & Supervisory
and advanced knowledge in finance/accounting and the Group management through his experience
Board Member (full-time))
leading the Group’s transformation activities and serving as Corporate Senior Executive Vice
President.
Kunihiko Sakai
Mr. Kunihiko Sakai has a wealth of experience and advanced knowledge in areas such as corporate(Outside Audit &governance, management of legal risks, and compliance through long years of experience includingSupervisory Board
experience overseas as a legal professional.
Member)Ms. Sayaka Sumida has extensive familiarity with audits of financial statements and internal control,
Sayaka Sumidafrom her long years of experience as a certified public accountant. Besides, she served as Executive(Outside Audit &Board Member of the Japanese Institute of Certified Public Accountants, International Auditing andSupervisory Board
Assurance Standards Board (IAASB) Member under International Federation of Accountants (IFAC),
Member)and Business Accounting Council Member under the Japan Financial Services Agency. As such, she
has a wealth of experience in and advanced knowledge of finance and accounting.
Takao Shiomi
Mr. Takao Shiomi has experience in corporate management in various industries, including a large(Outside Audit &trading company, financial institutions, and a manufacturer. He has a wealth of experience in andSupervisory Board
advanced knowledge of overall corporate management, including finance and accounting.
Member)Note: The Company will make a proposal “Election of one (1) Audit & Supervisory Board Member” as a matter to be resolved atthe 202nd Annual Shareholders Meeting to be held on June 26, 2024. Even after this proposal is approved and resolved asoriginally proposed, the organization and staffing for audits by Audit & Supervisory Board Members will be unchanged.
<Procedures for audits by Audit & Supervisory Board Members>
Each Audit & Supervisory Board Member performs audit based on the auditing policy and plan set forth by the Audit & Supervisory
Board and reports its details and results to the Audit & Supervisory Board. The auditing policy and plan of the Audit & Supervisory
Board are explained at the Board of Directors and the results and status of audit are also reported regularly to the Board of Directors
and President.

107

(ii) Activities of Audit & Supervisory Board Members and Audit & Supervisory Board (for FY2023)<Activities of Audit & Supervisory Board Members>(Audit & Supervisory Board Member (full-time): ◆ Outside Audit & Supervisory Board Member: ◇)Activities
Attendanceof important
meetings

Roles

Board of Directors◆◇

Management Committee◆

Outside Officers Committee◇

Risk Management Committee, Sustainability Committee, etc.

◆

Hearing with individual officers
Information sharing and exchange of opinions with Chairman and Director (non-executive director without
representative rights) and President (chief executive officer)
Information sharing and exchange of opinions with Accounting Auditor◆◇

Information sharing and exchange of opinions with Auditing Department
Debriefing from and exchange of opinions with General Manager of Risk Management Department, Risk
Management Division
Debriefing from part-time Audit & Supervisory Board Members of group companies in Japan
Information sharing and exchange of opinions with Audit & Supervisory Board Members, etc. of major subsidiaries
in Japan
Review important requests for approval
On-site inspection (including remote auditing by using a web conference system) of each department at eachdivision of the Company, its business locations/branches, and R&D laboratories
On-site inspection (including remote auditing by using a web conference system) of group companies in Japan andabroadAttendance of regular meetings with Accounting Auditor and an internal audit function (Auditing Department) andan internal control function (Risk Management Department, Risk Management Division) for the purpose ofreinforcing the three-way audit system
Review in cases where audit or other firms within the Deloitte Tohmatsu Group to which Accounting Auditor of theCompany belong provide non-audit services to Furukawa Electric Group companies

◆◇

◆
◆◇

◆
◆
◆
◆
◆◇
◆
◆
◆

Note: For matters assigned to full-time Audit & Supervisory Board Members only, full-time Audit & Supervisory Board Members reportresults, etc. of audit implementation at the Audit & Supervisory Board for Outside Audit & Supervisory Board Members to share
information.

<Attendance status of individual Audit & Supervisory Board Members to the Audit & Supervisory Board meetings and the Boardof Directors meetings (in FY2023)>
The Company held 9 Audit & Supervisory Board meetings and 16 Board of Directors meetings in FY2023.
Attendance at the Audit &Attendance at the Board
Supervisory Boardof Directors meetingsNamemeetings(number of attendance(number of attendance
and attendance ratio)
and attendance ratio)
Nozomu Amano(Audit & Supervisory Board Member (full-time))

9 out of 9 (100%)

16 out of 16 (100%)

Masao Terauchi(Audit & Supervisory Board Member (full-time))

9 out of 9 (100%)

16 out of 16 (100%)

Hiroyuki Ogiwara(Audit & Supervisory Board Member (full-time))

7 out of 7 (100%)

12 out of 12 (100%)

Kunihiko Sakai(Outside Audit & Supervisory Board Member)

9 out of 9 (100%)

16 out of 16 (100%)

Sayaka Sumida(Outside Audit & Supervisory Board Member)

9 out of 9 (100%)

16 out of 16 (100%)

Takao Shiomi(Outside Audit & Supervisory Board Member)

9 out of 9 (100%)

16 out of 16 (100%)

Note: Mr. Hiroyuki Ogiwara was newly elected at the 201st Annual Shareholders Meeting held on June 23, 2023, and thus, the numbers of theeligible Board of Directors meetings and the Audit & Supervisory Board meetings are different from other Audit & Supervisory Board
Members.

108

<Specific matters deliberated on at Audit & Supervisory Board meetings>
Month

May

June

AugustSeptember

November

DecemberFebruary

March

Overview
 Debriefing from and exchange of opinions with Accounting Auditor on results of year-end accounting audit
 Evaluation of Accounting Auditor and judgment on appropriateness of audit by Accounting Auditor Debriefing from and exchange of opinions with Accounting Auditor on the final draft of Key Audit Matters(KAM)
 Judgment on whether to reappoint Accounting Auditor
 Review of the results of audit regarding internal control system Report from full-time Audit & Supervisory Board Members on their audit activities
 Submission of audit reports by Audit & Supervisory Board Members
 Preparation of audit report of the Audit & Supervisory Board Judgment on whether to consent to the proposal for election of Audit & Supervisory Board Members
 Discussions about the treatment of proposals submitted to Annual Shareholders Meeting Election of Chair of Audit & Supervisory Board Election of full-time Audit & Supervisory Board Members
 Determination of the audit policies as well as audit plan and job assignment for FY2023
 Discussions about the remuneration for Audit & Supervisory Board Members
 Debriefing from and exchange of opinions with Accounting Auditor on the audit plan and quarterly review
plan Debriefing from and exchange of opinions with Accounting Auditor on results of the first quarter closing
review
 Report on the status of the non-audit services contract from Accounting Auditor
 Judgment on whether to consent to the proposed compensation for Accounting Auditor Decision on which officers to invite for an individual hearing Report from full-time Audit & Supervisory Board Members on their audit activities
 Report from full-time Audit & Supervisory Board Members on their audit activities
 Debriefing from and exchange of opinions with Accounting Auditor on results of the second quarter closing
review
 Discussion with Accounting Auditor about KAM
 Report on the status of the non-audit services contract from Accounting Auditor
 Report from full-time Audit & Supervisory Board Members on their audit activities
 Report from full-time Audit & Supervisory Board Members on their audit activities Determination of schedule for Audit & Supervisory Board meetings and hearing with individual officers in
FY2024
 Debriefing from and exchange of opinions with Accounting Auditor on results of the third quarter closing
review
 Discussion with Accounting Auditor about KAM
 Report on the status of the non-audit services contract from Accounting Auditor
 Report from full-time Audit & Supervisory Board Members on their audit activities
 Debriefing from and exchange of opinions with Accounting Auditor on the year-end audit plan
 Debriefing from and exchange of opinions with Accounting Auditor on the drafted document of KAM
 Interim evaluation on Accounting Auditor
 Report from full-time Audit & Supervisory Board Members on their audit activities

109

2)

Internal audit<Organization, staffing and procedures for internal audit>
Internal audits are performed by Auditing Department, which directly reports to the President. Auditing Department, consisting offive full-time staff and seven concurrent staff, monitors each department’s status of business execution regularly and whenevernecessary depending on changes in environment and reports the results to the relevant department and management. Whenmonitoring each department, Auditing Department perform monitoring from the perspectives of the internal control system and risk
management. More specifically, Auditing Department engages in internal auditing activities by focusing on status of compliance,
departmental risk management, and group-wide risk management as well as effectiveness and efficiency of operations at eachdepartment in the Company, status of control and storage of documents and information used for decision-making, status ofdevelopment, effectiveness and compliance of internal regulations.
<Cooperation among internal audit, audit by Audit & Supervisory Board Members and accounting audit and relationship withinternal control division>
Audit & Supervisory Board Members, Auditing Department and Accounting Auditor work closely with each other through regular
information sharing and discussion on annual audit planning and audit reports to reinforce the three-way audit system. Audit &Supervisory Board Members hold liaison meetings with their counterparts of major group companies to improve the auditing
function of the Group as a whole through mutual information sharing.
Risk Management Department of Risk Management Division, which is responsible for managing and promoting internal control
activities over financial reporting (in conformity with J-SOX), closely communicates with Accounting Auditor on matters such as
the status of internal audit, and also report the progress of establishment and development of the internal control system and relevant
issues whenever necessary to Audit & Supervisory Board Members and Auditing Department.
<Initiatives for securing the effectiveness of internal audit>
To secure the effectiveness of internal audit, Auditing Department is placed under the direct control of the President as describedabove. We have also built a scheme whereby Auditing Department periodically reports the results of audit to the Board of Directors
and Audit & Supervisory Board Members. In cases where the management (Executive Directors including Representative Director,
and Corporate Vice Presidents) is suspected of being involved in a fraud, deficiency, or problem, reporting to Audit & Supervisory
Board Members shall be given priority.

3)

Accounting audit
a. Name of Accounting Auditor
Deloitte Touche Tohmatsu LLC
b. Years of continuous auditing
Six years starting from FY2018
c. Certified public accountants who performed the audit engagement
Mr. Tsutomu Hirose, Mr. Takahiro Ikeda, and Mr. Daijiro Furutani
d. Composition of assistants of audit engagement
Besides the certified public accountants described in Item c. above, the audit engagement for the Company was assisted by 18
certified public accountants and 48 other individuals.
e. Policy and reasons for appointing the audit firm
The Audit & Supervisory Board comprehensively reviewed the number of years of continuous auditing by the current audit firm,
as well as its independence, expertise, appropriateness and quality management system in accordance with the standards
prescribed by the Audit & Supervisory Board. As a result of the review, the Audit & Supervisory Board decided to reappoint
Deloitte Touche Tohmatsu LLC as Accounting Auditor because it was assessed to be the most appropriate audit firm.
The Audit & Supervisory Board has determined the following policies on making decisions on dismissing or not reappointing
Accounting Auditor.
The Audit & Supervisory Board shall, based on the consent of all Audit & Supervisory Board Members, dismiss the Accounting
Auditor after reviewing a case if it determines that the circumstance falls under any of the items set forth in Article 340,
paragraph (1) of the Companies Act. In this case, an Audit & Supervisory Board Member designated by the Audit & Supervisory
Board shall report the dismissal of the Accounting Auditor and the reasoning at the first Annual Shareholders Meeting convenes
following the dismissal.
In the event that the Audit & Supervisory Board determines that the execution of duties by the Accounting Auditor has been
disrupted due to incomplete independence, audit structure and quality control structure, etc., or it is appropriate to further
enhance the reliability/appropriateness of an audit, the Board shall consider the dismissal or non-reappointment of the
Accounting Auditor and determine proposals related to the dismissal and non-reappointment of the Accounting Auditor to besubmitted to the Annual Shareholders Meeting if determined necessary.

110f. Evaluation of audit firm by Audit & Supervisory Board Members and the Audit & Supervisory Board
In accordance with the evaluation standards prescribed by a resolution of the Audit & Supervisory Board, Audit & Supervisory
Board Members and the Audit & Supervisory Board of the Company evaluate Accounting Auditor from the viewpoints of quality
management of the audit engagement by the audit firm as Accounting Auditor, cooperation with the auditors of our groupcompanies, and response to fraud risks, in addition to the independence, expertise, and appropriateness of Accounting Auditor.
As a result of the evaluation, the Audit & Supervisory Board of the Company has resolved not to submit a proposal for theselection or dismissal of Accounting Auditor since the accounting audit by the audit firm as Accounting Auditor for FY2023
was deemed to have been conducted appropriately and its audit system was deemed to be functioning effectively.
4)

Details of audit fees, etc.
a. Audit fees paid to auditing certified public accountants
Classification

Previous fiscal year
Audit fees
(million yen)

Current fiscal year

Non-audit fees
(million yen)

Audit fees
(million yen)

Non-audit fees
(million yen)

Reporting company

129

–

129

–

Consolidated subsidiaries

135

–

112

–

Total

265

–

241

–

b. Audit fees paid to Deloitte Touche Tohmatsu Limited and its group firms that belong to the same network as auditing certified
public accountants, etc. (excluding fees specified in the item a. above)
Classification
Reporting company

Previous fiscal year
Audit fees
(million yen)

Current fiscal year

Non-audit fees
(million yen)

Audit fees
(million yen)

Non-audit fees
(million yen)

–

3

–

2

Consolidated subsidiaries

149

55

158

54

Total

149

58

158

57

Notes: 1. Fees for non-audit services were those for database usage during the previous fiscal year and for assisting with trade operations during
the current fiscal year.
2. The details of non-audit services provided to the Company’s consolidated subsidiaries are tax advisory service and other for both theprevious and current fiscal years.

c. Details of fees for other significant audit certification services(Previous fiscal year)
Not applicable.
(Current fiscal year)
Not applicable.
d. Policy for determining audit fees
Regarding the policy for determining the amount of fee to be paid to auditing certified public accountants, etc., the amount of
fee is reasonably calculated in consideration of the business type, business scale, and characteristics of the Company and its
group companies, and is based on an audit man-hour estimate that has been thoroughly discussed and verified with the businessexecution departments in consideration of past results and statistical indicators. Finally, the amount is determined after approvalby the Board of Directors and consent by the Audit & Supervisory Board under Article 399 of the Companies Act.
e. Reason for Audit & Supervisory Board to have agreed to remuneration of Accounting Auditors
Audit & Supervisory Board received explanations from Accounting Auditors regarding the overview of their audit plan,
including estimated audit time and audit fees, and checked the adequacy and appropriateness of the estimated audit time andestimated unit price of audit fees. Consequently, the Board judged that sufficient audit time is secured for high-quality auditing
services, and that audit fees and the level of the unit price are rational and appropriate in light of the fees paid in the previous
fiscal year, and therefore, expressed agreement as set forth in Article 399, paragraph (1) of the Companies Act.

111

(4) Remuneration for Directors, etc.
1)

Policies for determining remuneration, etc. for Directors, etc.
The Company’s policies for determining remuneration, etc. for Directors, etc. are as stated below:(i)

Policy for determining remuneration for Directors, etc.
The remuneration for Directors, etc. shall be determined in a way that encourages individual Directors, etc. to exert his/her abilities
to the maximum level and proactively fulfill his/her duties so that Furukawa Electric Group will increase its corporate value andachieve sustainable growth while contributing to the society through its business activities.

(ii) Policy for determining remuneration for individual officer by element
In accordance with the above-mentioned policy, the Board of Directors resolved to approve the policy for determining remuneration
for individual Directors, etc. (hereinafter, “Individual Remuneration Policy”). Nominating/Compensation Committee confirms
adequacy, effectiveness and appropriateness of plan design and level of remuneration every year, by means of outside survey that iscomparing the Company’s remuneration level with those of other similar size 30 manufacturing companies.
The Company’s remuneration for Directors, etc. consists of base salary, Short-term performance-linked remuneration (on an
individual level), Short-term performance-linked remuneration (on the company level), ESG-linked remuneration, and Medium-tolong-term performance-linked remuneration; and the Individual Remuneration Policy for determining an amount of eachremuneration element is as follows:
Recipient
Element of
remuneration

Base salary

Short-term
performance-linked
remuneration(individual)

Short-term
performance-linked
remuneration(company level)
ESG-linked
remuneration
Medium-to-longterm performancelinked remuneration

Overview

This element is paid in cash in a fixed amount every
month, and the amount is determined depending on
his/her role (e.g. management oversight or businessexecution) and official position.
This element is paid in cash every month, and theamount paid to individual Directors, etc. is determinedby Nominating/Compensation Committee upon
comprehensively evaluating the degree of achievementof the relevant business plan in the previous fiscal
year, such as Furukawa Value Added (FVA) and otherperformance measures that contribute to its
improvement (strategic KPIs) in the division(s) he/she
is in charge of, and the status of relevant measures.
This element is paid in cash once a year, and theamount is fixed according to the evaluation criterion
based on consolidated operating profit, as defined by
Nominating/Compensation Committee. (Note 1)
This element is to be paid in cash every month. The
amount is to be determined upon evaluating the
progress toward achieving the sustainability targets ofkey management issues (materiality) to be addressedby the Group. (Note 2)This is the stock remuneration program, under which
Directors, etc. are paid with the Company’s stocks
acquired by the Trust that was funded by theCompany. (Note 3)

112

Director
exceptOutsideDirector

OutsideDirector

Corporate Vice
Audit &
President and Supervisory
Senior Fellow,
Board
except Director
Member

●

●

●

●

●

－

●

－

●

－

●

－

●

－

●

－

●

－

●

－

Notes: 1. For Short-term performance-linked remuneration (on the company level), we adopted consolidated operating profit as an indicator for
ensuring the Company’s performance in a relevant fiscal year is appropriately and clearly reflected to the remuneration. The following
table shows remuneration amount corresponding to consolidated operating profit, which is the evaluation criterion here, and official
position. Nominating/Compensation Committee regularly checks and reviews this table to ensure the remuneration levels are adequate,
taking into account consolidated operating profit in the past several years.
■ Short-term performance-linked remuneration table corresponding to consolidated operating profit and official position (on thecompany level)(Unit: JPY thousand per year)
Consolidated operating profit
650–
550–650
450–550
350–450
250–350
150–250–150Classification of Director, etc.
(JPY 100(JPY 100(JPY 100(JPY 100(JPY 100(JPY 100(JPY 100
million)million)million)million)million)million)million)
Chairman of the Board

15,10012,458

9,815

7,550

6,040

3,775

–

President (Representative)

29,60024,42019,24014,80011,8407,400–

18,00014,85011,700

9,000

7,200

4,500

–

14,100

11,633

9,165

7,050

5,640

3,525

–

8,200

6,765

5,330

4,100

3,280

2,050

–

4,200

3,465

2,730

2,100

1,680

1,050

–

Corporate Senior Executive
Vice President
Corporate Executive Vice
President
Corporate Senior Vice
President
Corporate Vice Presidents /Senior Fellows

2. For ESG-linked remuneration, we adopted sustainability indicators (whether or not achieved) in order to ensure that it functions as an
appropriate incentive toward achieving sustainability targets. In the current fiscal year, we adopted GHG emissions reduction rate,
where the target reduction rate is 21.2% compared to the emissions in FY2017. An indicator to be adopted as an evaluation indicatorfor ESG-linked remuneration is regularly checked/reviewed by the Nominating/Compensation Committee.
3. For Medium-to-long-term performance-linked remuneration, we adopted the Company’s stock price as an indicator, in order toappropriately reflect increased corporate value to remuneration amounts, and to share incentives for increasing corporate value withshareholders. In this stock remuneration program, three fiscal years constitute a performance period and the Company contributes
funds up to the maximum amount of ¥450 million per performance period to the Trust as remuneration for Directors, etc. Directors,
etc. are granted a pre-determined number of points depending on their titles/positions every year as the basis of their rights to receive
the Company’s stocks. After the end of each performance period, the number of points qualifying Directors, etc. for receiving theCompany’s stocks are finalized after an adjustment for certain cases, according to the criteria for comparing changes in the
Company’s stock prices with those of TOPIX during the period. (The actual points to be granted are calculated by multiplying thepayout ratio, which is determined by multiplying the degree of divergence of the volatility of the Company’s stock price andvolatility of TOPIX by the cumulative total points granted during the evaluation period.) In case any of Directors, etc. retire from theposition during the period, in principle, an adjustment is to be made in a similar manner.
■ Medium-to-long-term performance-linked remuneration: point table by official position (from April 1, 2022 to March 31, 2025)
The maximum total number of points granted to Directors, etc. in a performance period is 180,000, and 1 point is convertible into 1
share unit of the Company’s common stock.
Classification of Directors, etc.

Number of Point Granted

Number of Stock
Granted per period

Chairman of the Board

7,640

29,796

President (Representative)

9,340

36,426

Corporate Senior Executive Vice President (Director)

4,800

18,720

Corporate Senior Executive Vice President

3,930

15,327

Corporate Executive Vice President (Director)

3,930

15,327

Corporate Executive Vice President

3,060

11,934

Corporate Senior Vice President(Director)

2,190

8,541

Corporate Senior Vice President

1,310

5,109

Corporate Vice President (Director)

1,310

5,109

660

2,574

Corporate Vice President / Senior Fellow[Medium-to-long-term performance-linked remuneration: Formula for calculating the degree of divergence]
Degree of divergence = Volatility of the Company’s stock price / Volatility of TOPIX
Volatility of the Company’s stock price = average stock price of the Company in the final year of the evaluation period / averagestock price of the Company in the year prior to the start of the evaluation period
Volatility of TOPIX = average TOPIX in the final year of the evaluation period / average TOPIX in the year prior to the start of theevaluation period113

■ Medium-to-long-term performance-linked remuneration: Rate correspondence table for each degree of deviation
Deviation (Scope)
Rate (%)
130
X≧1.3
120
1.2≦X<1.3
110
1.1≦X<1.2100
0.95≦X<1.1900.85≦X<0.9580
0.75≦X<0.8570
0.65≦X<0.75
60
0.55≦X<0.65
50
0.2≦X<0.55
0.2 >X
0■ Medium-to-long-term performance-linked remuneration: Formula for determining the number of points granted to individuals
during a performance period
Finalized points = (cumulative total points granted to each Director, etc. during the evaluation period) x (payout ratio for theevaluation period)“Payout ratio” represents the percentage of change in the actual remuneration amount as a result of performance evaluation, where thestandard amount of the Medium-to-long-term performance-linked remuneration is 100%.
At the time of their retirement, Directors, etc. receive the Company’s stocks and money calculated by the following formula as the
Medium-to-long-term performance-linked remuneration from the Trust.
⚫ Number of the Company’s shares to be granted = (cumulative total points as of the vesting date x payout ratio – number of points
corresponding to a fraction of shares) x 0.7
 If there is a fraction of shares of the Company upon calculation by the above formula, such shares will be disregarded.
⚫ Amount of money to be paid = (Number of points convertible into share units x 0.3 + number of points corresponding to a fractionof shares) x market value of the Company’s stock as of the vesting date “The number of points convertible into share units” is defined as (cumulative total points as of the vesting date x payout ratio– the number of points corresponding to a fraction of shares).
 If there are any points corresponding to a fraction of shares upon calculation by the formula “the number of points convertible
into share units x 0.3”, such a fraction will be rounded up to a share unit and added to the number of share units.
 The vesting date is defined as the first end date of June after the retirement of Directors, etc., and after the closing of the last
fiscal year, in which he/she is eligible for receiving points.

(iii) Policy of Determining the Percentage of Remuneration Paid to Each Individual for Each Remuneration System
In terms of a percentage of each component of remuneration, it is designed as follows: the higher the rank of Directors, etc., thelarger the percentage of performance-linked remuneration. When the aggregate total of the standard percentage of eachcomponent is 100%, the percentage of each component is shown below:

Classification of Directors, etc.

Base salary

Short-term performancelinked remuneration

ESG-linked(Individual (the Company remunerationlevel)
level)

Medium-tolong-term
performancelinked
remuneration

Total

Chairman of the Board

55%

12%

9%

3%

21%

100%

President (Representative)
Director and Corporate Senior
Executive Vice President
Director and Corporate Executive
Vice President
Director and Corporate SeniorVice President
Director and Corporate Vice
President
Corporate Senior Executive Vice
President
Corporate Executive Vice
President
Corporate Senior Vice President
Corporate Vice President / Senior
Fellow

51%

15%

13%

2%

19%

100%

55%

15%

13%

2%

15%

100%

58%

14%

12%

2%

14%

100%

68%

11%

9%

2%

11%

100%

72%

13%

5%

2%

8%

100%

54%

16%

14%

2%

14%

100%

56%

15%

13%

2%

14%

100%

67%

13%

11%

2%

8%

100%

71%

16%

6%

2%

5%

100%

114

2) Matters concerning the delegation of the determination of remuneration by resolution of the Board of Directors
At the Company, the Board of Directors determines the Individual Renumeration Policy for determining remuneration for individual
Directors, etc. From the perspective of ensuring the objectivity, fairness and transparency, the Board of Directors partially delegates theauthorities related to the matters for deliberation, including the determination of remuneration for individual Directors, etc., toNominating/Compensation Committee comprising a majority of Outside Directors. The details of the authorities delegated to said
committee are described in Item (2) of “<Matters to be deliberated by Nominating/Compensation Committee>” included in “(1)Overview of corporate governance, 2) Corporate governance system, (i) Overview of the corporate governance system and reasons for
adopting such corporate governance system, a. Overview of the corporate governance system.”
The Committee comprises seven members, and five members, including the chairperson, are Outside Directors.
The following table shows the Committee composition as of the date when remuneration for individual Directors and Corporate Vice
Presidents was determined for the current fiscal year (June 23, 2023).
Name
Osamu Tsukamoto
Takashi Tsukamoto
Yoshiro Miyokawa
Yukiko Yabu
Tamotsu Saito
Keiichi Kobayashi
Hideya Moridaira

Position
Outside Director
Outside Director (Chairman of Nominating/Compensation Committee)
Outside Director
Outside Director
Outside Director
Chairman of the Board and Director
President and Representative Director

The activities of the Board of Directors and Nominating/Compensation Committee in the process of determining the amount of
remuneration of Directors, etc. during the fiscal year under review are as follows
Meeting Date / Body
Overview
June 8, 2023
Discussed/evaluated performance of Directors, etc. during FY2022
Nominating/Compensation Committee
June 23, 2023
Resolved on delegating the decision on a remuneration amount for each Director andBoard of Directors
Corporate Vice President to Nominating/Compensation Committee
June 23, 2023
Determined the remuneration amount for each Director and Corporate Vice President
Nominating/Compensation Committee
for the fiscal year ending March 31, 2024
The Board of Directors has received a report from Nominating/Compensation Committee that the content and method of determining
individual director remuneration, etc. determined by the Committee are in line with the decision policy. We have determined that thecontent of remuneration for each individual is in line with the decision policy.
3) Remuneration for Directors and Audit & Supervisory Board Members in the fiscal year under review
The total amount of remuneration for Directors and Audit & Supervisory Board Members for the fiscal year under review is asfollows.
Total remuneration by type (JPY millions)Short-term
Short-term
Medium-to- Number of
Total
subject
performance- performancelong-term
Officer classification
remunerationBase
officers
linkedlinkedperformance(JPY millions)salary(persons)
remuneration remuneration
linked(individual) (company level) remuneration
Directors
340
229
11
24
74
7
(excluding outside directors)
Audit & Supervisory Board Members(excluding outside Audit &
92
92
–
–
–
4
Supervisory Board Members)
Outside Officers
110
110
–
–
–
8
Of which Outside Directors
74
74
–
–
–
5
Of which Outside Audit &
36
36
–
–
–
3
Supervisory Board Members

Notes: 1. The amounts and numbers of officers in the above table include one Director and one Audit & Supervisory Board Member who retired fromthe positions due to the expiry of their terms at the end of the 201st Annual Shareholders Meeting held on June 23, 2023 as well as amountsof their remuneration.
2. The column of Short-term performance-linked remuneration (company level) shows the payment amount which was determined in June 2023
as compensation for execution of duties in FY2022. The amount for the current fiscal year is not yet fixed at the time of filing this Annual
Securities Report, and therefore not included in the above table.
3. The amount of Medium-to-long-term performance-linked remuneration in the above table is calculated by deeming the number of sharescorresponding to the number of points granted for the current fiscal year under the stock remuneration program as the remuneration for theyear.
4. Short-term performance-linked remuneration (on the company level) falls under the category of performance-linked remuneration. For thisremuneration, the Company adopted consolidated operating profit as an indicator to appropriately and clearly reflect the Company’s businessperformance during a relevant fiscal year to the remuneration. The Company’s consolidated operating profit in FY2022 was ¥15,441 million.
5. Medium-to-long-term performance-linked remuneration falls under the categories of performance-linked remuneration as well as non-115monetary remuneration. For this remuneration, the Company adopted its stock price, in order to appropriately reflect increased corporate value
to remuneration amounts, and to share incentives for increasing corporate value with shareholders. Actual deviation was 0.82 (a reference
value calculated by using numerical value in FY2023).
6. With respect to ESG-linked remuneration (introduced in July 2023), the compensation amount for the current fiscal year is not yet determinedat the time of filing this Annual Securities Report, and therefore not included in the above table.

4)

Matters concerning the resolution of remuneration, etc. for Directors, etc. at Annual Shareholders Meeting
The resolutions of remuneration, etc. for Directors, etc. at Annual Shareholders Meeting is as follows.
[Directors, etc.]
Date of resolutionof shareholders
meeting

Detail of resolution

184th Annual
Shareholders
Meeting (held on
June 29, 2006)

Directors’ remuneration shall not exceed ¥600
million per year. The above-mentioned
maximum amount does not include salaries for
employees who serve as Director.

11・ Base salary・ Short-term performancelinked remuneration(individual)・ Short-term performancelinked remuneration(company level)

197th Annual
Shareholders
Meeting(held on June 27,
2019)

The maximum amount, which the Company
can additionally contribute to the Trustestablished under the performance-linked stock
remuneration program for Directors (excluding
Outside Directors) as well as Corporate Vice
Presidents and Senior Fellows who are notdirectors, shall be ¥450 million in every threefiscal years.

26(7 Directors,
17 Corporate Vice
Presidents, and2 Senior Fellows)・ Medium-to-long-term
performance-linked
remuneration

Resolution about
Directors numbers

Remuneration typeunder the current system

Notes 1. The determination on the amount of remuneration for each director is delegated by the Board of Directors to
Nominating/Compensation Committee.
2. The number of Directors, etc. subject to the resolutions in the above table is the number of those at the end of the respective Annual
Shareholders Meetings concerned. The Company will make a proposal of “Election of eleven (11) Directors” as a matter to beresolved at the 202nd Annual Shareholders Meeting to be held on June 26, 2024. If this proposal is approved and resolved as originallyproposed, the number of eligible Directors, etc. about each remuneration type at the end of 202nd Annual Shareholders Meeting is asfollows.
Number of eligible directors about each remuneration type
Remuneration type under the current systemat the end of 202nd Annual Shareholders Meeting
Base salary
Short-term performance-linked remuneration (individual)
11
Short-term performance-linked remuneration (company level)
32
Medium-to-long-term performance-linked remuneration(6 Directors, 24 Corporate Vice Presidents, and 2 Senior Fellows)[Audit & Supervisory Board Members]
Date of resolution ofshareholders meeting
192nd Annual
Shareholders Meeting(held on June 25, 2014)

Detail of resolution
Directors’ remuneration shall not exceed ¥130 million per year,
and an amount of remuneration for each Audit & Supervisory
Board Member is determined by mutual agreement of the Board ofAudit & Supervisory Board Members.

Resolution about Audit &Supervisory Board Members
numbers6

Note: The number of Audit & Supervisory Board Members subject to the resolution in the above table is the number of those at the end of theAnnual Shareholders Meeting concerned. The Company will make a proposal of “Election of one (1) Audit & Supervisory Board
Member” as a matter to be resolved at the 202nd Annual Shareholders Meeting to be held on June 26, 2024. If this proposal is approved
and resolved as originally proposed, the number of eligible Audit & Supervisory Board Members at the end of 202nd Annual Shareholders
Meeting is 6.

5)

Total amount of consolidated remuneration by Director, etc.
The disclosure is omitted since no one received the consolidated remuneration exceeding ¥100 million.

116

(5) Shareholdings(i)Standards for and views on classification of investment shares

The Company classifies investment shares held for the purpose of gaining returns from share price fluctuations or dividends fromshares as “investment shares held for pure investment purposes,” and those not held for purposes of gaining returns from share pricefluctuations or dividends from shares, but held for policy purposes due to quantitative or qualitative reasons other than the above as“investment shares held for purposes other than pure investment.”(ii) Shareholding policy of investment shares held for purposes other than pure investment and details of verification of
the rationale for shareholdinga. Shareholding policy, method for verifying the rationale for shareholdings, and details of verification by the Board of Directors,
etc. of the appropriateness of shareholdings in individual issues
We hold the shares if they are deemed to be significant from the viewpoint of improving capital efficiency or from need for theCompany's business activities, and reduce the shares if they are deemed to be unsuitable for holding.
Each year, the Board of Directors shall conduct a verification of the validity of holding all listed shares among “investment
shares held for purposes other than pure investment.” The verification shall be conducted from a comprehensive perspective,
including the creation of business opportunities, the maintenance and strengthening of business relationships and cooperative
relationships in business, as well as the comparison of quantitative benefits derived from the holdings of shares with the market
value of the shares and cost of capital. For details of verification by the Board of Directors, etc. of the appropriateness ofshareholdings in individual stocks, refer to “Overview of purposes of shareholdings, business alliances, etc.; quantitative effectof shareholdings; and reasons why the number of shares increased” in “c. Number and carrying amount by issue of specified
investment shares and shares deemed to be held by the Company” as described later in this report.
We exercise all the voting rights of shares we hold after examining details of each proposal and determining whether or not the
proposal contributes to improving the issuer’s shareholder value. In cases where a proposal could undermine its shareholder
value, we may consider voting against the proposal.
b. Number of issues and carrying amount

Number ofissues(issues)

Total carrying amounton balance sheet(million yen)

Shares not listed

75

5,406

Shares other than those not listed

16

19,408Issues whose number of shares increased during the current fiscal year
Number ofshares(issues)

Total cost
(million yen)

Reason for acquisition

Shares not listed

3657

Because the Company determined that theinvestment would contribute to enhancing its
corporate value from a medium-to-long-term
perspective after fully examining the rationale
and necessity of the investment

Shares other than those not listed

–

–

–

Issues whose number of shares decreased during the current fiscal year
Number ofissues(issues)

Total proceeds fromsale(million yen)

Shares not listed––

Shares other than those not listed

8

3,916

117

Changes in carrying amount and number of issues of listed shares
held for purposes other than pure investment

Fair-value
impactc.

Cost

Number of issues

Number and carrying amount by issue of specified investment shares and shares deemed to be held by the Company
Specified investment shares
Current fiscal year Previous fiscal year
Holding of
Number of shares
Number of shares
Overview of purposes of shareholdings, businessthe(shares)(shares)Issueralliances, etc.; quantitative effect of shareholdings; andCompany’s
Carrying amount on Carrying amount on
reasons why the number of shares increased
sharesbalance sheet
balance sheet(million yen)(million yen)
As a result of verifying the rationale for holding the565,540
565,540 shares at the Board of Directors meeting held in
December 2023 and other meetings, we determined tocontinue holding the shares because we quantitatively
AICHI
and qualitatively assessed that it was necessary to
ELECTRIC CO.,maintain and strengthen the business relationship andYesLTD.
cooperative relationship with the issuer to strengthen
2,341
2,041
business in our Electronics & Automotive Systems
segment and the Functional Products segment.
However, quantitative holding effects are not described
due to the nature of the relationship with the issuer.
The rationale for holding the shares was verified at the564,366
564,366 Board of Directors meeting held in December 2023 andother meetings, and we determined that the holding of
the shares was significant from a comprehensive
The Yokohama
perspective though it is difficult to describe the
Rubber Company,
Yes
quantitative holding effect. We will continue toLimited
2,272
1,578 determine the appropriateness of holding the sharesfrom the perspectives of the significance and effect ofholding the shares.

PT SUPREMECABLE
MANUFACTURING &COMMERCE
Tbk (Note)

97,102,560

1,920

24,275,640

1,814

As a result of verifying the rationale for holding theshares at the Board of Directors meeting held in
December 2023 and other meetings, we determined tocontinue holding the shares because we quantitatively
and qualitatively assessed that it was necessary tomaintain and strengthen the business relationship andcooperative relationship with the issuer to strengthenbusiness in our Electronics & Automotive Systems
segment and the Infrastructure segment and to further
expand sales in the global markets. However,quantitative holding effects are not described due to thenature of the relationship with the issuer.

118

No

Current fiscal year Previous fiscal year
Holding of
Number of shares Number of shares
Overview of purposes of shareholdings, businessthe(shares)(shares)Issueralliances, etc.; quantitative effect of shareholdings;
Company’s
Carrying amount on Carrying amount on and reasons why the number of shares increased
sharesbalance sheet
balance sheet(million yen)(million yen)
The rationale for holding the shares was verified at the575,200
575,200 Board of Directors meeting held in December 2023
and other meetings, and we determined that theholding of the shares was significant from a
Mizuho Financial
comprehensive perspective though it is difficult toYesGroup, Inc.
describe the quantitative holding effect. We will
1,752
1,080
continue to determine the appropriateness of holding
the shares from the perspectives of the significanceand effect of holding the shares.
The rationale for holding the shares was verified at the511,792
511,792 Board of Directors meeting held in December 2023 andother meetings, and we determined that the holding of
the shares was significant from a comprehensive
ADEKA
perspective though it is difficult to describe theYes
CORPORATION
quantitative
holding
effect.
We
will
continue
to
1,650
1,155
determine the appropriateness of holding the sharesfrom the perspectives of the significance and effect ofholding the shares.
As a result of verifying the rationale for holding the
187,500
250,000 shares at the Board of Directors meeting held in
December 2023 and other meetings, we determined tocontinue holding the shares because we quantitatively
East Japanand qualitatively assessed that it was necessary to
RailwayNomaintain and strengthen the business relationship andCompany
1,641
1,833 cooperative relationship with the issuer to strengthenbusiness in our Infrastructure segment. However,quantitative holding effects are not described due tothe nature of the relationship with the issuer.
The rationale for holding the shares was verified at the877,727
877,727 Board of Directors meeting held in December 2023
and other meetings, and we determined that theholding of the shares was significant from a
FURUKAWA
comprehensive perspective though it is difficult toYesCO., LTD.
describe the quantitative holding effect. We will
1,589
1,120
continue to determine the appropriateness of holding
the shares from the perspectives of the significanceand effect of holding the shares.
The rationale for holding the shares was verified at the931,500
1,831,500 Board of Directors meeting held in December 2023
and other meetings, and we determined that theholding of the shares was significant from a
ZEON
comprehensive perspective though it is difficult toYes
CORPORATION
describe the quantitative holding effect. We will
1,230
2,562 continue to determine the appropriateness of holding
the shares from the perspectives of the significanceand effect of holding the shares.
As a result of verifying the rationale for holding the455,800
455,800 shares at the Board of Directors meeting held in
December 2023 and other meetings, we determined tocontinue holding the shares because we quantitatively
and qualitatively assessed that it was necessary to
ASAHI-SEIKI
maintain and strengthen the business relationship and
MANUFACTURING
No
cooperative relationship with the issuer to strengthenCO., LTD.
business in our Electronics & Automotive Systems
993
1,094
segment. However, quantitative holding effects are notdescribed due to the nature of the relationship with theissuer.

119

IssuerCurrent fiscal year Previous fiscal year
Number of shares
Number of shares(shares)(shares)
Carrying amount on Carrying amount onbalance sheet
balance sheet(million yen)(million yen)
275,200

INABADENKI
SANGYO CO.,LTD.

KANTO DENKA
KOGYO CO.,LTD.

275,200

964

795

750,000

750,000

756

773

760,000

920,000

TOKAI Holdings
Corporation

NIPPONDENSETSU
KOGYO CO.,LTD.

Shibusawa
Logistics
Corporation

750

803

307,871

307,871656

487

203,360

223,360

629

496

Overview of purposes of shareholdings, businessalliances, etc.; quantitative effect of shareholdings;
and reasons why the number of shares increased
As a result of verifying the rationale for holding theshares at the Board of Directors meeting held in
December 2023 and other meetings, we determined tocontinue holding the shares because we quantitatively
and qualitatively assessed that it was necessary tomaintain and strengthen the business relationship andcooperative relationship with the issuer to strengthenbusiness in our Functional Products segment.
However, quantitative holding effects are notdescribed due to the nature of the relationship with theissuer.
The rationale for holding the shares was verified at theBoard of Directors meeting held in December 2023
and other meetings, and we determined that theholding of the shares was significant from acomprehensive perspective though it is difficult to
describe the quantitative holding effect. We willcontinue to determine the appropriateness of holding
the shares from the perspectives of the significanceand effect of holding the shares.
As a result of verifying the rationale for holding theshares at the Board of Directors meeting held in
December 2023 and other meetings, we determined tocontinue holding the shares because we quantitatively
and qualitatively assessed that it was necessary tomaintain and strengthen the business relationship andcooperative relationship with the issuer to strengthenbusiness in our Infrastructure segment. However,quantitative holding effects are not described due tothe nature of the relationship with the issuer.
As a result of verifying the rationale for holding theshares at the Board of Directors meeting held in
December 2023 and other meetings, we determined tocontinue holding the shares because we quantitatively
and qualitatively assessed that it was necessary tomaintain and strengthen the business relationship andcooperative relationship with the issuer to strengthenbusiness in our Infrastructure segment. However,quantitative holding effects are not described due tothe nature of the relationship with the issuer.
The rationale for holding the shares was verified at theBoard of Directors meeting held in December 2023
and other meetings, and we determined that theholding of the shares was significant from acomprehensive perspective though it is difficult to
describe the quantitative holding effect. We willcontinue to determine the appropriateness of holding
the shares from the perspectives of the significanceand effect of holding the shares.

120

Holding oftheCompany’s
shares

Yes

Yes

Yes

Yes

Yes

IssuerCurrent fiscal year Previous fiscal year
Number of shares
Number of shares(shares)(shares)
Carrying amount on Carrying amount onbalance sheet
balance sheet(million yen)(million yen)
76,900–Aidemy Inc.
164–

129,132

129,132

Transphorm Inc
95

68

–

207,775

Holding of
Overview of purposes of shareholdings, businessthealliances, etc.; quantitative effect of shareholdings; andCompany’s
reasons why the number of shares increased
sharesAs a result of verifying the rationale for holding theshares at the Board of Directors meeting held in
December 2023 and other meetings, we determined tohold the shares because we quantitatively andqualitatively assessed that it was necessary to maintainand strengthen the business relationship andcooperative relationship with the issuer as acollaborative partner for the promotion of digitaltransformation. However, quantitative holding effects
are not described due to the nature of the relationshipwith the issuer.
As a result of verifying the rationale for holding theshares at the Board of Directors meeting held in
December 2023 and other meetings, we determined tocontinue holding the shares because we quantitatively
and qualitatively assessed that it was necessary tomaintain and strengthen the business relationship andcooperative relationship with the issuer in order tomaintain the license contract with the issuer. However,quantitative holding effects are not described due tothe nature of the relationship with the issuer.

FUJI ELECTRIC
CO., LTD.

LONGWELLCOMPANY

–

1,080

–

839,678

–

252

–

9,466

Fujitsu Limited

Nuburu Inc

–

168

–

1,897

–

0

No

No

—

—

—

—

—

—

—

—

Notes 1. PT SUPREME CABLE MANUFACTURING & COMMERCE Tbk conducted a 4-for-1 stock split of common shares during the current
fiscal year. As a result, the number of shares has increased compared to the previous fiscal year, but there is no change in the in-substancenumber of shares held.
2. The en dash (–) indicates that the Company does not hold any shares of the issuer, or the shares are classified as those other than specified
investment shares.

121

Deemed holdings of investment shares
Current fiscal year Previous fiscal year
Holding of
Number of shares
Number of shares
Overview of purposes of shareholdings, businessthe(shares)(shares)Issueralliances, etc.; quantitative effect of shareholdings; andCompany’s
Carrying amount on Carrying amount on
reasons why the number of shares increased
sharesbalance sheet
balance sheet(million yen)(million yen)
We hold the authority to give instructions on the
1,321,200
1,321,200 exercise of voting rights for the shares of the issuer.
The rationale for holding the shares was verified at theBoard of Directors meeting held in December 2023
The Yokohama
and other meetings, and we determined that the
Rubber Company,
Yesholding of the shares was significant from a
Limitedcomprehensive perspective though it is difficult to
5,319
3,695 describe the quantitative holding effect. We willcontinue to determine the appropriateness of holding
the shares from the perspectives of the significanceand effect of holding the shares.
We hold the authority to give instructions on the336,720
936,720 exercise of voting rights for the shares of the issuer.
The rationale for holding the shares was verified at theBoard of Directors meeting held in December 2023
and other meetings, and we determined that the
FUJI ELECTRIC
Yesholding of the shares was significant from aCO., LTD.
comprehensive perspective though it is difficult to
3,451
4,870 describe the quantitative holding effect. We willcontinue to determine the appropriateness of holding
the shares from the perspectives of the significanceand effect of holding the shares.
We hold the authority to give instructions on the
1,953,000
1,953,000 exercise of voting rights for the shares of the issuer.
The rationale for holding the shares was verified at theBoard of Directors meeting held in December 2023
and other meetings, and we determined that theZEON
Yesholding of the shares was significant from a
CORPORATION
comprehensive perspective though it is difficult to
2,579
2,732 describe the quantitative holding effect. We willcontinue to determine the appropriateness of holding
the shares from the perspectives of the significanceand effect of holding the shares.
We hold the authority to give instructions on the
410,000
82,000 exercise of voting rights for the shares of the issuer.
The rationale for holding the shares was verified at theBoard of Directors meeting held in December 2023
Central Japanand other meetings, and we determined that the
RailwayNoholding of the shares was significant from a
Company (Note)comprehensive perspective though it is difficult to
1,527
1,296 describe the quantitative holding effect. We willcontinue to determine the appropriateness of holding
the shares from the perspectives of the significanceand effect of holding the shares.

Note: 1. Specified investment shares and shares deemed to be held by the Company are not included in the above carrying amount when selecting
high-ranking issues in terms of the carrying amount.
2. Central Japan Railway Company conducted a 5-for-1 stock split of common shares during the current fiscal year. As a result, the numberof shares has increased compared to the previous fiscal year, but there is no change in the in-substance number of shares held.

(iii) Investment shares held for pure investment purposes
The Company does not hold investment shares held for pure investment purposes.

122Item 5. Financial Information
1.

Basis for Preparation of Consolidated and Non-consolidated Financial Statements(1) The consolidated financial statements of Furukawa Electric Co., Ltd. (the “Company”) are prepared in accordance with the“Ordinance on Terminology, Forms, and Preparation Methods of Consolidated Financial Statements” (Ordinance of the Ministryof Finance No. 28 of 1976).
(2) The non-consolidated financial statements of the Company are prepared in accordance with the “Ordinance on the Terminology,
Forms, and Preparation Methods of Financial Statements, etc.” (Ordinance of the Ministry of Finance No. 59 of 1963;
hereinafter, the “Ordinance on Financial Statements, etc.”)
The Company falls under the company allowed to file specified financial statements and prepares its financial statements
pursuant to the provision of Article 127 of the Ordinance on Financial Statements, etc.

2.

Audit Certificate
The Company’s consolidated and non-consolidated financial statements for the fiscal year from April 1, 2023 to March 31, 2024
were audited by Deloitte Touche Tohmatsu LLC in accordance with the provisions of Article 193-2, Paragraph 1 of the Financial
Instruments and Exchange Act.

3.

Special Efforts to Ensure the Appropriateness of Consolidated Financial Statements, etc.
The Company has made special efforts to ensure the appropriateness of the consolidated financial statements, etc. Specifically, theCompany is a member of the Financial Accounting Standards Foundation and participates in seminars and training programs
organized by external organizations in order to develop a system that allows the Company to understand accounting standards andother pronouncements properly and adapt to their changes appropriately.

123

1.

Consolidated Financial Statements, etc.

(1) Consolidated financial statements(i) Consolidated balance sheets(Millions of yen)Previous fiscal year
(as of March 31, 2023)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade, and contract
assetsSecurities
Merchandise and finished goods
Work in process
Raw materials and supplies
Other

Current fiscal year
(as of March 31, 2024)

47,432

48,895*1 229,550*1, *5 245,712

5,127
65,755

4,747
73,08838,556
67,98533,80343,89966,65935,974

Allowance for doubtful accounts(1,389)(1,210)Total current assets

486,821517,767

Buildings and structures
Machinery, equipment and vehicles
Tools, furniture and fixtures

247,121491,387
76,458263,129
517,262
80,522

Land
Leased assets

33,473
1,169

33,971
1,072

Right-of-use assets
Construction in progress
Accumulated depreciation

23,09923,069(626,488)

25,144
20,788(663,250)

Total property, plant and equipment

269,288278,640

211
20,02450
20,234

20,236

20,284*2 119,552*2 131,694*2 4,262*2 1,290

9,428
8,900

8,563
11,241Other
Allowance for doubtful accounts

15,894(915)

16,464(939)

Total investments and other assets

157,122

168,315446,647

467,240

933,469

985,007

Non-current assets
Property, plant and equipment

Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Investments in capital
Deferred tax assets
Retirement benefit asset

Total non-current assets
Total assets

124

(Millions of yen)Previous fiscal year
(as of March 31, 2023)

Current fiscal year
(as of March 31, 2024)

Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term borrowings

125,409141,281*5 128,780

Commercial papers
Income taxes payable
Provision for product warranties

28,0004,730
2,238

35,500
4,451
5,264

Other

*3 79,365*3 89,526

Total current liabilities

381,025

400,894

40,00040,000Long-term borrowings
Provision for environmental measures
Retirement benefit liability
Lease liabilities
Asset retirement obligations
Other

114,547
9,284
38,23912,5481,588
7,140

120,168
9,224
29,23912,517
1,717
13,207

Total non-current liabilities

Non-current liabilities
Bonds payable

137,371

223,348

226,074

Total liabilities

604,373

626,968

Net assets
Shareholders’ equity
Share capital
Capital surplus

69,39523,17969,39523,178Retained earnings
Treasury shares

191,763(871)

192,856(691)

Total shareholders’ equity

283,467

284,738

10,66912,218191
9,606(2,282)

1,195
25,286
4,682

Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans

18,18543,383

Non-controlling interests

Total accumulated other comprehensive income

27,442

29,916

Total net assets

329,095

358,038

933,469

985,007

Total liabilities and net assets

125

(ii) Consolidated statements of income and consolidated statements of comprehensive income
Consolidated statements of income(Millions of yen)
Current fiscal year
(From April 1, 2023
to March 31, 2024)

Previous fiscal year
(From April 1, 2022
to March 31, 2023)
Net sales
Cost of sales*1 1,066,326*1 1,056,528*2, *4 909,622*2, *4 897,535

Gross profit

156,703

158,993

Selling, general and administrative expenses
Selling expenses

47,73249,016

General and administrative expenses*4 93,530*4 98,805*3 141,262*3 147,821

15,441

11,171

Interest income
Dividend income
Share of profit of entities accounted for using equity
methodForeign exchange gains
Other

1,095
1,423

1,875
1,150

3,610

6,323

1,668
3,267

–
2,592

Total non-operating income

11,066

11,940

6,334

9,238

Total selling, general and administrative expenses
Operating profit
Non-operating income

Non-operating expenses
Interest expenses
Foreign exchange losses

–

96

Other

2,914

3,509

Total non-operating expenses

9,248

12,844

17,258

10,267

Ordinary profit
Extraordinary income
Gain on change in equity–*5 1,247

Gain on disposal of non-current assets*6 1,158*6 592Gain on sale of investment securities
Settlement income
Other*7 15,279*7 11,983

800
404

–
1,084

17,642

14,908*8 1,187*8 1,453

0
356

714
771

–
5,434

*9 540Total extraordinary income
Extraordinary losses
Loss on disposal of non-current assets
Loss on sale of investment securities
Loss on valuation of investment securities
Extra retirement payments
Other
Total extraordinary losses

1,631

6,979

5,110

Profit before income taxes

27,921

20,064

Income taxes - current

9,455

9,262

Income taxes - deferred

833

2,325

Total income taxes

10,28911,587

Profit17,631

8,476

Profit attributable to non-controlling interests

1,737

1,968

Profit attributable to owners of parent

15,894

6,508

126

Consolidated statements of comprehensive income
Previous fiscal year
(From April 1, 2022
to March 31, 2023)
17,631

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges(Millions of yen)
Current fiscal year
(From April 1, 2023
to March 31, 2024)
8,476(2,329)941(2,639)
10,168613

1,025
10,770
6,532

3,829

7,242

*1, *2 9,643*1, *2 26,512

Comprehensive income

27,27434,989Comprehensive income attributable to:
Owners of parent
Non-controlling interests

24,8152,459

31,7063,282

Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income127

(iii) Consolidated statements of changes in equity
Previous fiscal year (From April 1, 2022 to March 31, 2023)(Millions of yen)
Shareholders’ equity
Share capital
Balance at beginning of period
Cumulative effects of changes
in accounting policies
Restated balance

69,395

Capital surplus

Retainedearnings

Treasury shares

Total
shareholders’equity174,346(901)

266,018

23,178

4,933
69,39523,178179,279

4,933
(901)

270,951

Changes during period
Dividends of surplus
Profit attributable to ownersof parent
Net effect of increase inconsolidated subsidiaries
Purchase of treasury shares
Disposal of treasury shares
Change in ownership interestof parent due to transactions
with non-controlling interests
Net changes in items other thanshareholders’ equity
Total changes during period
Balance at end of period(4,237)(4,237)

15,894

15,894

826

826

(0)

(4)

(4)

34

34

0

0

–

0

12,48430

12,516

69,39523,179191,763(871)

283,467

Accumulated other comprehensive income
Valuationdifference on
available-forsale securities
Balance at beginning of period
Cumulative effects of changes
in accounting policies
Restated balance

Deferred gains
or losses onhedgesForeigncurrencytranslation
adjustment

Total
Remeasurements accumulated Non-controlling Total net assetsinterestsof definedotherbenefit plans comprehensive
income(3,024)
13,201
34,843314,062

12,446

2,963

817

109

24

(3,941)(231)(4,038)12,555

2,988(3,124)(3,256)

9,163

894
34,843314,957

Changes during period
Dividends of surplus
Profit attributable to ownersof parent
Net effect of increase inconsolidated subsidiaries
Purchase of treasury shares
Disposal of treasury shares
Change in ownership interestof parent due to transactions
with non-controlling interests
Net changes in items otherthan shareholders’ equity
Total changes during period
Balance at end of period(4,237)
15,894826(4)34
0(1,885)(2,796)

12,730973

9,022(7,400)1,621(1,885)(2,796)

12,730973

9,022(7,400)14,137

10,669191

9,606(2,282)

18,18527,442

329,095

128

Current fiscal year (From April 1, 2023 to March 31, 2024)(Millions of yen)
Shareholders’ equity
Share capital
Balance at beginning of period

69,395

Capital surplus

Retainedearnings

Treasury shares

Total
shareholders’equity191,763(871)

283,467

23,179Changes during period
Dividends of surplus
Profit attributable to ownersof parent
Net effect of increase inconsolidated subsidiaries
Purchase of treasury shares
Disposal of treasury shares
Change in ownership interestof parent due to transactions
with non-controlling interests
Net changes in items other thanshareholders’ equity
Total changes during period
Balance at end of period(5,649)(5,649)

6,508

6,508

232

232
(182)

(182)

361

361

(0)

(0)

–

(0)

1,092

179

1,271

69,39523,178

192,856(691)

284,738

Accumulated other comprehensive income
Valuationdifference on
available-forsale securities
Balance at beginning of period

10,669Deferred gains
or losses onhedgesForeigncurrencytranslation
adjustment

191

9,606

Total
Remeasurements accumulated Non-controlling Total net assetsinterestsof definedotherbenefit plans comprehensive
income(2,282)

18,18527,442

329,095

Changes during period
Dividends of surplus
Profit attributable to ownersof parent
Net effect of increase inconsolidated subsidiaries
Purchase of treasury shares(5,649)

Disposal of treasury shares
Change in ownership interestof parent due to transactions
with non-controlling interests
Net changes in items otherthan shareholders’ equity
Total changes during period

361

Balance at end of period

6,508
232
(182)

(0)
1,548

1,003

15,6806,964

25,1972,474

27,671

1,548

1,003

15,6806,964

25,1972,474

28,943

12,218

1,195

25,286

4,682

43,38329,916

358,038129

(iv) Consolidated statements of cash flows
Previous fiscal year
(From April 1, 2022
to March 31, 2023)
Cash flows from operating activities
Profit before income taxes
Depreciation
Interest and dividend income
Interest expenses
Share of loss (profit) of entities accounted for using
equity method
Foreign exchange losses (gains)
Loss (gain) on change in equity
Loss (gain) on disposal of non-current assets
Loss (gain) on sale of short-term and long-term investment
securities
Settlement income
Loss (gain) on valuation of investment securities
Extra retirement payments
Loss on valuation of inventories
Decrease (increase) in trade receivables and contract
AssetsDecrease (increase) in inventories
Increase (decrease) in trade payables
Increase (decrease) in retirement benefit liability
Increase (decrease) in provision for product warranties
Other, net(Millions of yen)
Current fiscal year
(From April 1, 2023
to March 31, 2024)

27,92139,098(2,519)6,334

20,06438,951(3,025)
9,238(3,610)(6,323)(1,612)112
29(4,651)(1,247)860(15,279)(11,269)

(800)
356
–
725

–
771
540
1,450

5,775

(5,909)(3,419)(8,656)(3,997)
(986)
3,921

(5,020)(3,884)
2,037
2,882
10,796

Subtotal

43,392

46,262

Interest and dividends received
Interest paid
Income taxes refund (paid)
Settlement received
Extra retirement payments paid

5,296
(6,442)(6,529)
800
–

6,478
(9,306)(11,136)–(401)

Net cash provided by (used in) operating activities

36,51631,896179(1,200)
6,613

88
(691)
13,042*2 11,943*2 4,539(35,878)(3,378)2,302(155)(2,104)(36,419)(3,844)351
1,066(2,928)(21,677)(24,794)

Cash flows from investing activities
Decrease (increase) in time deposits
Purchase of investment securities
Proceeds from sale and redemption of investment securities
Proceeds from sale of shares of subsidiaries resulting
in change in scope of consolidation
Purchase of property, plant and equipment
Purchase of intangible assets
Proceeds from sale of non-current assets
Decrease (increase) in short-term loans receivable
Other, net
Net cash provided by (used in) investing activities

130Previous fiscal year
(From April 1, 2022
to March 31, 2023)(Millions of yen)
Current fiscal year
(From April 1, 2023
to March 31, 2024)

Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Net increase (decrease) in commercial papers
Proceeds from long-term borrowings
Repayments of long-term borrowings
Dividends paid
Dividends paid to non-controlling interests
Repayments of lease liabilities
Other, net

1,857(26,000)
10,568(13,000)(4,234)(1,204)(2,464)
1(12,025)
7,500
29,566(25,351)(5,636)(611)(2,805)42

Net cash provided by (used in) financing activities(34,475)(9,322)

Effect of exchange rate change on cash and cash equivalents

2,750

3,018

Net increase (decrease) in cash and cash equivalents(16,885)798

Cash and cash equivalents at beginning of period
Increase in cash and cash equivalents resulting from inclusion ofsubsidiaries in consolidation
Increase in cash and cash equivalents resulting from merger

67,632

51,950

1,197

275

6

73

*1 51,950*1 53,098

Cash and cash equivalents at end of period

131

Notes to Consolidated Financial Statements
Significant accounting policies for preparing consolidated financial statements
1. Scope of consolidation(1) Number of consolidated subsidiaries: 109 companies
Names of significant consolidate subsidiaries are omitted as they are presented in “Item 1, Overview of Company, 4.
Subsidiaries and Other Affiliated Entities.”
Ibaraki Okano Kiden Co., Ltd. is included in the scope of consolidation due to its increased materiality, whereas
THAI FIBER OPTICS CO., LTD. and OFS UTD2 ApS were excluded from the scope of consolidation due totransfer of all shares held, and FURUKAWA C&B CO., LTD. excluded due to liquidation.
(2) Unconsolidated subsidiaries
Furukawa New Leaf Co., Ltd., and other companies
Reason for excluding the companies from the scope of consolidation
Unconsolidated subsidiaries are excluded because they are small in terms of total assets, net sales, profit and loss
(amount corresponding to the Company’s equity interest) and retained earnings (amount corresponding to theCompany’s equity interest) and do not have a material impact on the consolidated financial statements as a whole.
2. Application of equity method(1) Number of associates accounted for using the equity method: 14 companies
Names of significant associates accounted for using the equity method are omitted for they are presented in“Item 1. Overview of Company, 4. Subsidiaries and Other Affiliated Entities.”
Furukawa Electric Xi’an Optical Communication Co., Ltd. was excluded from the scope of application of the equity
method due to transfer of all shares held.
(2) Unconsolidated subsidiaries and associates not accounting for using the equity method
NTT DevIces Optech Corporation, and other companies
Reason for excluding the companies from the scope of application of the equity method
Unconsolidated subsidiaries and associates not accounting for using the equity method are excluded because they
are small in terms of profit and loss (amount corresponding to the Company’s equity interest) and retained earnings(amount corresponding to the Company’s equity interest) and do not have a material impact on the consolidated
financial statements as a whole.
3. Fiscal years of consolidated subsidiaries
Of the consolidated subsidiaries, Taiwan Furukawa Electric Co., Ltd., Furukawa FITEL (Thailand) Co., Ltd., Tianjin
Jinhe Electric Engineering Co., Ltd., Polifoam Plastic Processing, Co. Ltd., Furukawa AVC Electronics (Suzhou) Co.,
Ltd., Shenyang Furukawa Cable Co., Ltd., Furukawa (Thailand) Co., Ltd., Furukawa Thai Holdings Co., Ltd., Furukawa
Electric Singapore Pte. Ltd., American Furukawa Inc., Furukawa Precision (Thailand) Co., Ltd., Furukawa Auto Parts(Huizhou) Co. Ltd., and 37 other companies have a fiscal year ending December 31 and are consolidated using theirfinancial statements as of December 31. Adjustments necessary for consolidation are made for significant transactions
that occurred between December 31 and March 31, the consolidated balance sheet date.
Four of the associates accounted for using the equity method have a different closing date from that of the Company,
but their financial statements as of their respective closing dates are used. Adjustments necessary for consolidation are
made for significant transactions that occurred between the closing dates of those companies and the consolidatedbalance sheet date.
4. Accounting policies applied to foreign subsidiaries and associates
The Group applies the “Revised Practical Solution on Accounting for Unification of Accounting Policies Applied toForeign Subsidiaries for Consolidated Financial Statements” (ASBJ PITF No. 18 issued on June 28, 2019) and Practical
Solution on Unification of Accounting Policies Applied to Associates Accounted for Using the Equity Method (ASBJ
PITF No. 24 issued on September 14, 2018) and makes necessary adjustments to consolidate foreign subsidiaries andassociates.

132

5. Accounting policies(1) Valuation basis and method for significant assets(i) Inventories
Stated primarily at cost determined using the weighted average method (with the amount of inventories in the
consolidated balance sheets being written down based on a decrease in profitability).
(ii) Securities
Held-to-maturity debt securities:
Stated primarily at amortized cost.
Available-for-sale securities:
Securities other than equity securities, etc. that do not have a quoted market price in an active market:
Stated at fair value (with any unrealized gain or loss being recognized directly in net assets and the cost of
securities sold being determined using the moving-average method).
Equity securities, etc. that do not have a quoted market price in an active market:
Stated primarily at cost using the moving-average method.
(iii) Derivatives
Stated at fair value.
(2) Accounting policy for depreciation/amortization of significant assets(i) Property, plant and equipment (excluding leased assets and right-of-use assets)
Depreciated on a straight-line basis.
(ii) Intangible assets (excluding leased assets and right-of-use assets)
Amortized on a straight-line basis.
Software for internal use is amortized on a straight-line basis over the estimated useful life as internallydetermined (5 to 10 years).
(iii) Leased assets
Leased assets in finance lease transactions that transfer ownership:
Depreciated using the same method as applied for owned property, plant and equipment.
Leased assets in finance lease transactions that do not transfer ownership:
Depreciated on a straight-line basis using the lease term as the useful life and with zero residual value.
(iv) Right-of-use assets
Depreciated on a straight-line basis using the shorter of the lease term or the useful life of the asset as the useful life.
(3) Accounting policy for significant deferred assets(i) Share issuance costs
The full amount is expensed when incurred.
(ii) Bond issuance costs
The full amount is expensed when incurred.
(4) Accounting policy for significant allowances and provisions(i) Allowance for doubtful accounts
To provide for possible bad debt losses on monetary receivables, allowance for doubtful accounts is provided for theestimated uncollectible amount based mainly on the historical bad debt loss ratio for general receivables and on an
individual assessment of collectability for specific receivables such as doubtful receivables.
(ii) Provision for product warranties
Provision for product warranties is provided at an amount deemed necessary to cover possible compensation costs.

133

(iii) Provision for environmental measures
Provision for environmental measures, mainly to remove Poly Chlorinated Biphenyl (PCB) and to improve soil
conservation, is provided to cover estimated future costs.
(5) Accounting policy for retirement benefits(i) Method of attributing estimated retirement benefits to accounting periods
In calculating retirement benefit obligations, the benefit formula basis is used to attribute the estimated amount of
retirement benefits to periods up to the end of the current fiscal year.
(ii) Method of accounting for actuarial gains and losses and prior service cost
Prior service cost is being amortized as incurred by the straight-line method over periods (mainly 1 year through 10
years), which are shorter than the average remaining years of service of the employees.
Actuarial gains and losses are amortized in the year following the year in which the gains and losses are recognizedprimarily by the straight-line method over periods (mainly 1 year through 10 years), which are shorter than the averageremaining years of service of the employees.
Unrecognized actuarial gains and losses and unrecognized prior service cost are recorded as adjustments for retirement
benefits in accumulated other comprehensive income within net assets after adjusting for tax effects.
(6) Accounting policy for significant revenues and expenses
The details of the main performance obligations in the major businesses related to revenue from contracts with the customersof the Company and its subsidiaries (hereinafter, the “Group”) and the timing at which the Group typically satisfies these
performance obligations (when it typically recognizes revenue) are as follows:(i) Manufacture and sale of products
The main business of the Group is the manufacture and sale of infrastructure products, such as information andtelecommunications network components and power cables, electrical and electronics products such as automobile partsand copper products for electronic equipment materials, and functional products processed from resin and nonferrous
metals.
The Group has determined that its main performance obligation is to deliver finished products to customer. The Grouphas comprehensively determined that legal title to the asset, the significant risks and rewards of ownership of the assets,transfer of physical possession of the assets, and the right to receive payment of consideration for the asset shall arise at
the time of delivery of the product to the customer. For domestic transactions, control over products is transferred tocustomer at the time of delivery of the product to the customer, and a performance obligation is considered to have beensatisfied. However, since the period from the date of shipment of the product to the date of delivery is a normal period oftime, the Group recognizes revenue when the product is shipped based on its significance as selecting the alternative
treatment. For trade transactions, the Group recognizes revenue when the risk-bearing is transferred to customer, mainly
based on the terms of trade stipulated by Incoterms and other agreements.
For buy-sell transaction, no inventories are recognized because the Group does not obtain control over raw materials andother products, but only record the net amount equivalent to the processing fees as sales. The Group deducts the amountof the consideration to be paid to customer, such as volume discount and sales incentive, from the transaction price,
unless such a consideration to be received from the customer is related to distinct goods or services received from thecustomers.
(ii) Maintenance services
The Group provides chargeable maintenance support services after sales of products, in mainly the Infrastructure business.
For maintenance services, the Group has determined that it has a performance obligation to always have the services
available and on standby so that customer can utilize the maintenance services when the customer desires throughout theperformance period. The Group recognizes revenue at the percentage of time elapsed to the period in which the services
are to be provided because the maintenance services are identified as distinct performance obligations and are performed
over a certain period of time, including standby status period.
(iii) Construction contract
The Group performs construction works, such as design, construction, installation, and other work based on contracts
with customer in the Infrastructure business. Since the Group transfers control over underlying goods and services overtime and satisfies a performance obligation, it recognizes revenue over time. Measuring progress towards satisfaction of aperformance obligation is based on the proportion that the cost incurred by the end of each reporting period to the total
expected costs incurred (input method).
In cases where the Group may not be able to reasonably measure the outcome of a performance obligation, but expects
to recover the costs incurred in satisfying the performance obligation, the Group recognizes revenue only to the extent of
the costs incurred until such time that it can reasonably measure the outcome of the performance obligation.
For construction contracts with short durations, the Group recognizes revenue at the point of time when a performanceobligation is fully satisfied.
134

(iv) Transactions entered into as an agent
The Group does not manufacture products and only makes transactions of procurement arrangements on behalf of its
customers. If the Group does not control products before transferring it to customer, revenue is recognized on the net
amount received from the customer less the amount paid to supplier. The following are considered in determining whether
the Group controls over products or services before these are provided to customer.
(a) Its primary responsibility for the performance of its promise to provide goods or services(b) The inventory risk before goods or services are provided to customer or after control has been transferred tocustomer(c) Discretion in establishing the price of goods or services.
The payment after satisfying the Group’s performance obligation does not include any significant financing component
since the payment will be made generally within one year from that time when such a satisfaction.
(7) Accounting policy for translating significant assets and liabilities denominated in foreign currency into Japanese yen
Monetary receivables and payables denominated in foreign currency are translated into Japanese yen at the spot exchange rateon the consolidated balance sheet date, and exchange differences are accounted for as profit or loss. Meanwhile, assets andliabilities of foreign subsidiaries are translated into Japanese yen at the spot exchange rates on the consolidated balance sheet
date whereas their revenue and expenses are translated into Japanese yen at average exchange rates for their respective fiscal
years, and translation adjustments are included in “Foreign currency translation adjustment” and “Non-controlling interests”
under net assets.
(8) Hedge accounting(i) Hedge accounting method
Deferred hedge accounting is applied. Assignment accounting (special treatment for foreign exchange forward contracts)
is applied to currency and interest rate swap transactions, and special treatment is applied to interest rate swaps, if theymeet the requirements.
(ii) Hedging instruments and the hedged items
Interest rate swap: borrowings
Currency swap: borrowings
Foreign exchange forward contracts: Receivables and payables denominated in foreign currency, etc.
Metal forward contracts: Raw materials and work in process(iii) Hedging policy
The Group hedges its borrowing obligations and definitive trading contracts and the like to avoid risks associated withfluctuations in interest rates, foreign exchange rates, and raw material prices.
(iv) Assessments of hedge effectiveness
Cumulative market fluctuations or cash flow fluctuations of hedged items are compared with cumulative market
fluctuations or cash flow fluctuations of hedging instruments, and effectiveness is determined based on the amounts offluctuation of both, excluding the portion not attributable to the basic value of price.
(9) Accounting policy for goodwill
Goodwill is amortized evenly over the period in which its effects are expected to be realized (within 20 years after
recognition). However, if the amount of goodwill is immaterial, it is amortized at once in the year in which it arises.
(10) Scope of cash and cash equivalents in consolidated statements of cash flows
Cash and cash equivalents consist of cash on hand; deposits that can be withdrawn on demand; and short-term investmentsthat are readily convertible to cash, averse to price fluctuation risk, and redeemable within three months from the date ofacquisition.
(11) Application of group tax sharing system
The Group applies a group tax sharing system.

135

Significant accounting estimates
1. Recoverability of deferred tax assets(i) Amount recorded in consolidated financial statements as of March 31, 2023 and 2024
Millions of yen
2023
Deferred tax assets

¥

9,428

2024
¥

8,563

(ii) Details of significant accounting estimates of recognized items
Deferred tax assets are recognized based on future taxable income estimated by the future business plan. Specifically, it isestimated with major assumptions including sales volume, unit sales prices, and market forecasts, all of which are the basis
for the business plan, together with market trends, the Group’s recent business performance, and other factors.
The timing and amount of taxable income may be affected by uncertain future fluctuations in economic conditions. If thetiming and amount of the deferred tax are different from the estimation, this may have a significant impact on the amount ofdeferred tax assets recognized in the following fiscal year.
2. Impairment of non-current assets(i) Amount recorded in consolidated financial statements as of March 31, 2023 and 2024
Millions of yen
2023
Property, plant and equipment and intangible assets(total amount reported on consolidated balance
sheets)of which asset group included in (ii) below¥

289,525
10,8652024¥

298,925
9,242(ii) Details of significant accounting estimates of recognized items
If any impairment indicators exist based on the operating profit/loss at the end of each reporting year, the Group assesses
whether to recognize an impairment loss.
The Group groups its assets based on the business unit and recognizes an impairment loss by reducing the carrying amountto the recoverable amount if the carrying amount of an asset or asset group exceeds the total amount of the undiscounted
future cash flows generated from the asset or asset group under the business plan formulated based on the remaining economic
useful life and the net selling price at some future point in time. The net selling value is calculated based on the amountobtained from outside experts, such as the real estate appraisal value in a real estate appraisal report.
In light of the deteriorated business performance for the current fiscal year primarily due to restraints of investment bycustomers and the impact of prolonged inventory adjustments, the Group assessed whether any indication of impairment
existed. As a result, the Group determined that an indication of impairment existed in the certain asset group of theCommunications Solutions business (consisting of property, plant and equipment and intangible assets of ¥9,242 million).
However, based upon a future supply and demand trends and production planning assumptions, the Group concluded that therecognition of impairment loss was not necessary since the total amount of the undiscounted future cash flows generated
from the asset group exceeded the carrying amount.
The total undiscounted future cash flows are estimated with major assumptions including sales volume, unit sales prices,market forecasts, and disposal value of the non-current assets at some future point in time, all of which are the basis for thebusiness plan, together with market trends, the Group’s recent business performance, and other factors. If uncertain futurechanges in economic conditions cause the demand forecast to deviate, necessitating business plans and disposal value of the
non-current assets to be revised, an impairment loss may be recognized in the next fiscal year.

136

3. Provision for product warranties(i) Amount recorded in consolidated financial statements
Millions of yen¥

Provision for product warranties

2023
2,238

¥

2024
5,264

(ii) Details of significant accounting estimates of recognized items
Provision for product warranties is provided at an amount deemed necessary to cover possible compensation costs. In
particular, the provision for vehicle recalls is recognized based on the reasonably estimated loss to be incurred if thecustomer repairs a malfunction of the vehicle in which some parts manufactured by the Company’s consolidated
subsidiaries in the past are used.
This amount is calculated by multiplying each of the following factors:(a) Number of target vehicles(b) Repair costs per unit(c) Expected rate of market recovery measures (recall)(d) Repair cost sharing ratio with customers
Items (b) and (c) are estimated based on past recall results and Item (d) is estimated based on the status of negotiations
with customers. These estimates contain uncertainty, and as a result of the situation changes, an additional or reversal ofprovision may be required.

Changes in accounting policies
Application of accounting in accordance with International Financial Reporting Standards in equity-method associates
UACJ Corporation (UACJ), an equity-method associate of the Company, has started preparing its consolidated financial statementsin accordance with International Financial Reporting Standards (IFRS) from the beginning of the current fiscal year, whereas it had
previously prepared its consolidated financial statements in accordance with Japanese GAAP. Accordingly, the Company has applied
the equity method to UACJ based on its consolidated financial statements prepared in accordance with IFRS from the beginning of
the current fiscal year. This change in accounting policy has been applied retrospectively, and the consolidated financial statements
for the previous fiscal year have been prepared after the retrospective application. The purpose of this change is for UACJ to improvecomparability of its financial statements in the capital markets, to enhance disclosure, and to further promote global management
through unification of accounting standards within the group.
As a result of the retrospective application, the following changes have occurred to the amounts of the consolidated financial
statements for the fiscal year ended March 31, 2023. In the consolidated balance sheet as of March 31, 2023, “Investment securities”
decreased by ¥1,367 million. In the consolidated statement of income for the fiscal year ended March 31, 2023, “Share of profit ofentities accounted for using equity method,” “Income taxes - deferred,” and “Profit attributable to owners of parent” decreased by¥2,381 million, ¥364 million, and ¥2,016 million, respectively. In the consolidated statement of cash flows for the fiscal year ended
March 31, 2023, “Profit before income taxes” decreased by ¥2,381 million and “Share of loss (profit) of entities accounted for using
equity method” increased by the same amount.
In addition, as a result of the cumulative effect being reflected on the beginning balance of net assets for the fiscal year ended March
31, 2023, “Retained earnings,” “Valuation difference on available-for-sale securities,” and “Deferred gains or losses on hedges” asof April 1, 2022 increased by ¥4,933 million, ¥109 million, and ¥24 million, respectively, whereas “Foreign currency translation
adjustment” and “Remeasurements of defined benefit plans” as of April 1, 2022 decreased by ¥3,941 million and ¥231 million,
respectively.
The impact on per-share information is stated in the relevant section.

137

Standards issued but not yet adopted
 Accounting Standard for Current Income Taxes (ASBJ Statement No. 27 issued on October, 28, 2022)
 Accounting Standard for Presentation of Comprehensive Income (ASBJ Statement No. 25 issued on October 28, 2022)
 Guidance on Accounting Standard for Tax Effect Accounting (ASBJ Guidance No. 28 issued on October 28, 2022)(1) Overview
The standards and guidance establish the classification of income taxes to be charged against other comprehensive income andthe treatment of tax effects on sale of shares of subsidiaries and other securities under a group taxation regime.
(2) Scheduled date of adoption
The Group is scheduled to adopt the standards and guidance from the beginning of the fiscal year ending March 31, 2025.
(3) Impact of adoption of the accounting standards and guidance
The impact of the adoption is currently being evaluated in preparing these consolidated financial statements.
Changes in presentation
Consolidated balance sheets“Lease liabilities,” which was included in “Other” under “Non-current liabilities” in the previous fiscal year, is separately presented
in the current fiscal year due to its increased materiality of the amount. To reflect this change in presentation, the consolidated balance
sheet for the previous fiscal year has been reclassified. As a result, “Other” of ¥19,689 million under “Non-current liabilities” in the
consolidated balance sheet as of March 31, 2023 has been reclassified as “Lease liabilities” of ¥12,548 million and “Other” of ¥7,140
million.
Consolidated statements of income“Impairment losses,” “Loss on business of subsidiaries and associates,” and “Business restructuring expenses” under “Extraordinary
losses,” which were separately presented for the previous fiscal year, are included in “Other” for the current fiscal year due to theirdecreased materiality of the amount. On the other hand, “Loss on sale of investment securities” and “Loss on valuation of investment
securities,” which were included in “Other” under “Extraordinary losses” in the previous fiscal year are separately presented in thecurrent fiscal year due to their increased materiality of the amounts. To reflect these changes in presentation, the consolidated
statement of income for the previous fiscal year has been reclassified. As a result, “Impairment losses” of ¥402 million, “Loss on
business of subsidiaries and associates” of ¥2,322 million, “Business restructuring expenses” of ¥1,307 million, and “Other” of¥1,758 million, which were presented under “Extraordinary losses” in the consolidated statement of income for the previous fiscal
year, have been reclassified as “Loss on sale of investment securities” of ¥0 million, “Loss on valuation of investment securities” of¥356 million, and “Other” of ¥5,434 million.
Consolidated statements of cash flows
1. “Impairment losses,” “Loss on business of subsidiaries and associates,” “Business restructuring expenses,” and “Payments ofbusiness restructuring expenses,” which were separately presented under “Cash flows from operating activities” in the previous
fiscal year are included in “Other” for the current fiscal year due to their decreased materiality of the amount. On the other hand,“Loss (gain) on change in equity” and “Loss (gain) on valuation of investment securities,” which were included in “Other” under“Cash flows from operating activities” in the previous fiscal year are separately presented in the current fiscal year due to theirincreased materiality of the amounts. To reflect these changes in presentation, the consolidated statement of cash flows for theprevious fiscal year has been reclassified. As a result, “Impairment losses” of ¥402 million, “Loss on business of subsidiaries
and associates” of ¥2,322 million, “Business restructuring expenses” of ¥1,307 million, “Payments of business restructuring
expenses” of ¥(359) million, and “Other” of ¥717 million presented under “Cash flows from operating activities” for the previous
fiscal year have been reclassified as “Loss (gain) on change in equity” of ¥112 million, “Loss (gain) on valuation of investment
securities” of ¥356 million, and “Other” of ¥3,921 million.
2. “Purchase of treasury shares,” which was separately presented under “Cash flows from financing activities” in the previous fiscal
year is included in “Other” for the current fiscal year due to its decreased materiality of the amount. On the other hand,“Repayments of lease liabilities,” which was included in “Other” under “Cash flows from financing activities” in the previous
fiscal year is separately presented in the current fiscal year due to their increased materiality of the amount. To reflect thesechanges in presentation, the consolidated statement of cash flows for the previous fiscal year has been reclassified. As a result,“Purchase of treasury shares” of ¥(1) million and “Other” of ¥(2,461) million presented under “Cash flows from financing
activities” for the previous fiscal year have been reclassified as “Repayments of lease liabilities” of ¥(2,464) million and “Other”
of ¥1 million.
Additional information
Board Benefit Trust (BBT)
Based upon a resolution of the 194th Ordinary General Meeting of Shareholders on June 27, 2016, the Company has introduced
a Performance-Linked Stock Compensation System (Board Benefit Trust, hereafter the “BBT”) to a part of remuneration for
Directors (excluding Outside Directors), Corporate Vice Presidents other than Directors, and Senior Fellows (collectively“Directors, etc.”) to have Directors, etc. contribute to higher corporate value on a medium- to long-term basis by making stronger

138

linkage of their compensation to the Company’s business performance.
(1) Overview
In accordance with the Stock Benefit Regulations for Directors, etc. (hereinafter, the “Regulation”), previously set out by theCompany, points are granted to Directors, etc. during their term in office and the number of shares equivalent to theaccumulated points that are granted at the time of their retirement, are provided after adjusting down points linked to theCompany’s business performance. If Directors, etc. who receive the benefits meet the requirements of the Regulation, money
in an amount equivalent to a certain portion of those points granted to the Directors shall be provided to them instead of theCompany’s shares.
The shares to be provided to Directors, etc. including the shares to be provided for their future services, have been acquired
using monetary assets contributed previously by the Company to the BBT. Those shares are managed separately as an asset
in BBT.
(2) Accounting treatment
The Gross method has been applied in accordance with “Practical Solution on Transactions of Delivering the Company’s
Own Stock to Employees etc. through Trusts” (PITF No. 30 issued on March 26, 2015).
(3) The Company’s shares remaining in the BBTThe Company’s shares owned by the BBT are accounted for as treasury shares under net assets at the carrying amounts in
the BBT (excluding acquisition-related costs). The book value and the number of shares on treasury stock are ¥571 million
and 203,700 shares as of March 31, 2023, and ¥391 million and 139,300 shares as of March 31, 2024.
Consolidated balance sheets*1. Of notes and accounts receivable – trade, and contract assets, receivables and contract assets arising from contracts withcustomers as of March 31, 2023 and 2024 were as follows:
Millions of yen
2023
Notes receivable - trade¥

Accounts receivable - trade
Contract assets
*2.

2024
20,172¥22,001

203,724
5,654

217,346
6,364

Assets related to unconsolidated subsidiaries and associates as of March 31, 2023 and 2024 were as follows:
Millions of yen
2023
Investment securities (equity securities)¥

91,901
4,149

Investments in capital
*3.

2024
¥

103,461
1,203

Contract liabilities included in “Other” of current liabilities as of March 31, 2023 and 2024 were as follows:
Millions of yen
2023
Contract liabilities

¥

3,051

139

2024
¥

7,562

4. Contingent liabilities(1) Guarantee obligations
The Group provides debt guarantees for borrowings and the like from financial institutions for companies other thanits consolidated subsidiaries. Contingent liabilities as of March 31, 2023 and 2024 were as follows:(Millions of yen)
2023

Furukawa Electric (Xi’an)
Optical Communication
Co., Ltd.
Essex Furukawa Magnet
Wire Japan Co., Ltd.
Birla Furukawa Fibre Optics
Private Ltd.

2024

AmountTotal amount guaranteed byguaranteed
Furukawa
Electric Group

Total amount
guaranteed

Amountguaranteed by
Furukawa
Electric Group

1,903

Essex Furukawa Magnet
Wire LLC

1,170

1,147

Essex Furukawa Magnet
Wire Japan Co., Ltd.

2,574

2,573

1,057

1,057

VISCAS Corporation

1,150

1,150

1,030

1,030

863

863

Furukawa Sangyo Kaisha
Philippines Inc.

291

291

257

257

Other

43

43

Other

12

12

5,473

Total

¥

VISCAS Corporation

Total

¥

1,903

5,495

¥

¥

¥

Birla Furukawa Fibre Optics
Private Ltd.
Furukawa Sangyo Kaisha
Philippines Inc.
¥

2,876

7,735

¥

¥

2,876

7,735

Notes: 1. For the debt guarantees for Essex Furukawa Magnet Wire LLC, the total amounts are the guarantee obligation in the form ofstand-by L/C issued by financial institutions upon the Company’s request for the company’s borrowing obligations to financial
institutions.
2. For the debt guarantees for Essex Furukawa Magnet Wire Japan Co., Ltd., the total amount as of March 31, 2023 and part of theamount as of March 31, 2024 are the guarantee obligation in the form of stand-by L/C issued by financial institutions upon the
Company’s request for the company’s borrowing obligations to financial institutions.
3. The debt guarantees for VISCAS Corporation include guarantee obligations for bonds and the like related to construction, whichwere ¥1,026 million and ¥1,150 million as of March 31, 2023 and 2024, respectively.

(2) Repurchase obligation of the securitization of receivables as of March 31, 2023 and 2024
Millions of yen
2023
Repurchase obligation of the securitization of receivables

¥

2024

5,141

¥

4,737

(3) Other(i) The Company and its subsidiaries and associates are now negotiating compensations for damage with a part ofautomobile manufacturers in connection with the violation of the Competition Act by automobile wire harness cartels.
(ii) The Company has made a provision for repair costs that can be reasonably estimated at this time for a defect that has
occurred in part of the products for a large electric power project delivered by the Company in the past. The cause andscope of the defect are currently under investigation, and depending on the results of the investigation, additional
repair costs may be incurred; however, it is difficult to make a reasonable estimate of the impact at this time.
*5.

Accounting for notes maturing at the consolidated balance sheet date
As the last day of the current fiscal year was a bank holiday, the notes were treated as if they were settled on the maturity date.
The notes matured at the end of the current fiscal year are as follows.
Millions of yen
2023
Notes receivable
Notes payable

¥

140

2024
–
–

¥

671
1,217

Consolidated statement of income*1. Revenues from contracts with customers
Revenues from contracts with customers and other revenues are not separately presented under net sales. Revenues
from contracts with customers are presented in “Notes to Consolidated Financial Statements, Revenue recognition, 1.
Revenues from contracts with customers on a disaggregated basis.”*2.

The amount of inventories for normal sales that were written down due to a decrease of profitability for the fiscal years
ended March 31, 2023 and 2024 were as follows:
Millions of yen
For the fiscal year
For the fiscal year
ended March 31,
ended March 31,
2023
2024
Cost of sales
¥
725
¥
1,430

*3.

The main components of selling, general and administrative expenses for the fiscal years ended March 31, 2023 and 2024
were as follows:
Millions of yen
For the fiscal year
For the fiscal year
ended March 31,
ended March 31,
2023
2024
Packing and transportation costs
Sales commissions
Salaries and allowances and welfare expenses
Retirement benefit expenses
Depreciation
Research and development costs*4¥

25,891
2,567
51,008
1,578
5,172
19,304¥

21,8782,801
53,781
1,542
5,421
20,956

Total research and development costs
Research and development costs included in general and administrative expenses and manufacturing costs for the fiscal
years ended March 31, 2023 and 2024 were as follows:
Millions of yen
For the fiscal year
For the fiscal year
ended March 31,
ended March 31,
2023
2024
¥
23,324¥24,539*5.

Gain on change in equity
For the fiscal year ended March 31, 2024:
Mainly due to the capital increase of the Company’s associates accounted for using the equity method.

*6.

Gain on disposal of non-current assets
For the fiscal year ended March 31, 2023:
Mainly due to the sale of land by the Company
For the fiscal year ended March 31, 2024:
Mainly due to the sale of land by the Company*7.

Gain on sale of investment securities
For the fiscal year ended March 31, 2023:
Mainly due to transfer of all shares of TOTOKU ELECTRIC CO., LTD., a consolidated subsidiary, to TTC Holdings Inc.
For the fiscal year ended March 31, 2024:
Mainly due to the sale of securities listed overseas and certain cross-held shares.

141

*8.

Loss on disposal of non-current assets
For the fiscal year ended March 31, 2023:
Loss on disposal of buildings and structures of ¥183 million, and machinery, equipment and vehicles of ¥143 million.
For the fiscal year ended March 31, 2024:
Loss on disposal of buildings and structures of ¥274 million, and machinery, equipment and vehicles of ¥143 million.

*9.

Extra retirement payments
For the fiscal year ended March 31, 2024:
The Communications Solutions business recorded extra retirement payments in conjunction with personnel reduction
at an overseas consolidated subsidiary to optimize the production system in view of the demand trend for fibers inNorth America.

Consolidated statements of comprehensive income*1.

Reclassification adjustments relating to other comprehensive income for the fiscal years ended March 31, 2023 and 2024
Millions of yen
For the fiscal
For the fiscal
year ended
year ended
March 31, 2023
March 31, 2024
Valuation difference on available-for-sale securities:
Amount arising during the year¥

Reclassification adjustments

722¥(4,089)

Total

6,831
(5,449)¥(3,367)¥¥(2,691)¥

1,381

Deferred gains or losses on hedges:
Amount arising during the year
Adjustments for amounts transferred to assets’ acquisition costs
Total(1,198)79,432(77,894)¥(3,890)

¥

1,538

¥

6,856

¥

11,107

Foreign currency translation adjustment:
Amount arising during the year
Reclassification adjustments

3,311

Total

(336)

¥

10,168¥

10,770

¥

520

¥

8,403

Remeasurements of defined benefit plans:
Amount arising during the year
Reclassification adjustments

358

Total
Share of other comprehensive income of entities accounted for using equity
method:Amount arising during the year

427

¥

878

¥

8,831

¥

4,104

¥

7,408

Reclassification adjustments

(274)

Total
Subtotal before tax effects

(166)

¥

3,829

¥

7,242

¥

7,619

¥

29,763¥

26,512

Tax effects

2,023

Total other comprehensive income

¥

142

9,643

(3,251)

*2.

Tax effects relating to other comprehensive income for the fiscal years ended March 31, 2023 and 2024
Millions of yen
For the fiscal
For the fiscal
year ended
year ended
March 31, 2023
March 31, 2024
Valuation difference on available-for-sale securities:
Before tax effect adjustment¥

Tax effect(3,367)¥

1,037

After tax effect adjustment

1,381
(440)

¥

(2,329)¥941¥(3,890)¥

1,538

Deferred gains (losses) on hedges:
Before tax effect adjustment
Tax effect

1,251

After tax effect adjustment

(512)

¥

(2,639)¥1,025

Before tax effect adjustment¥

10,168¥

10,770After tax effect adjustment¥

10,168¥

10,770

¥

878

¥

8,831

Foreign currency translation adjustment:

Remeasurements of defined benefit plans:
Before tax effect adjustment
Tax effect(264)

After tax effect adjustment
Share of other comprehensive income of entities accounted for using equity
method:Before tax effect adjustment
After tax effect adjustment(2,298)

¥

613

¥

6,532

¥

3,829

¥

7,242

¥

3,829

¥

7,242

¥

7,619

¥

29,763

Total other comprehensive income
Before tax effect adjustment

2,023

Tax effect
After tax effect adjustment

¥

143

9,643

(3,251)¥

26,512

Consolidated statements of changes in equity
For the fiscal year ended March 31, 2023:
1. Shares issued
Thousand shares
Number of shares at
beginning of year
Common stock

Increase

70,666

Number of shares at endof yearDecrease––

70,666

2. Treasury shares
Thousand shares
Number of shares at
beginning of year
Common stock

Increase

282

Number of shares at endof yearDecrease
1

11

272

Notes: 1. The increase of 1 thousand shares of common stock represents repurchases of 0 thousand shares through compulsory acquisition of
odd-lot shares upon request and an increase of 0 thousand shares of treasury stock (the Company’s shares) held by YAMAKIN (Japan)
Co., Ltd. that is attributable to the Company.
2. The decrease of 11 thousand shares of common stock represents stock transfers from the Stock Benefit Trust (BBT) to eligible persons.
3. The number of shares of treasury stock at end of the fiscal year includes 203 thousand shares of the Company held in Board Benefit
Trust (BBT).

3. Share acquisition rights
Not applicable
4. Dividends(1) Dividend payment
Resolution
Annual Shareholders
Meeting held on June23, 2022

Type of shares
Common stock

Total amount ofdividends(Millions of yen)
¥4,237

Dividends per share(Yen)¥60.00Record date

Effective date

March 31, 2022

June 24, 2022

Note: The total amount of dividends revolved at the Annual Shareholders Meeting held on June 23, 2022 includes dividends of¥12 million paid for the Company’s shares held by the trust account for the Board Benefit Trust (BBT).

(2) Dividends with a record date in the current fiscal year, but an effective date in the following fiscal year
Total amount of Dividends per
Funds forResolution
Type of shares
Record datedividends
share
dividends(Millions of yen)
(Yen)
Annual Shareholders
Meeting held on June Common stock Retained earnings¥5,649¥80.00March 31, 2023
23, 2023

Note:

The total amount of dividends revolved at the Annual Shareholders Meeting held on June 23, 2023 includes dividends of¥16 million paid for the Company’s shares held by the trust account for the Board Benefit Trust (BBT).

144

Effective dateJune 26, 2023

For the fiscal year ended March 31, 2024:
1. Shares issued
Thousand shares
Number of shares at
beginning of year
Common stock

Increase

Number of shares at
end of year

Decrease

70,666––70,666

2. Treasury shares
Thousand shares
Number of shares at
beginning of year
Common stock

Increase

272

Number of shares at
end of year

Decrease
0

64

208

Notes: 1. The increase of 0 thousand shares of common stock represents repurchases of 0 thousand shares through compulsory acquisition of oddlot shares upon request and an increase of 0 thousand shares of treasury stock (the Company’s shares) held by YAMAKIN (Japan) Co.,
Ltd. that is attributable to the Company.
2. The decrease of 64 thousand shares of common stock represents a stock transfer from the Stock Benefit Trust (BBT) to eligible persons.
3. The number of shares of treasury stock at end of the fiscal year includes 139 thousand shares of the Company held in Board Benefit
Trust (BBT).

3. Share acquisition rights
Not applicable.
4. Dividends(1) Dividend payment
Resolution

Type of shares

Dividends per share(Yen)

Record date

Effective date

Annual Shareholders
Meeting held on June23, 2023

Total amount ofdividends(Millions of yen)

Common stock¥5,649¥80.00March 31, 2023

June 26, 2023

Note:

The total amount of dividends revolved at the Annual Shareholders Meeting held on June 23, 2023 includes dividends of¥16 million paid for the Company’s shares held by the trust account for the Board Benefit Trust (BBT).

(2) Dividends with a record date in the current fiscal year, but an effective date in the following fiscal year
Resolution
Annual Shareholders
Meeting held on June
26, 2024
Note:

Type of shares

Funds fordividends

Total amount ofdividends(Millions of yen)

Dividends per
share
(Yen)

¥4,236¥60.00Common stock Retained earnings

Record date

Effective date

March 31, 2024 June 27, 2024

The total amount of dividends revolved at the Annual Shareholders Meeting held on June 26, 2024 includes dividends of ¥8 million
paid for the Company’s shares held by the trust account for the Board Benefit Trust (BBT).

145

Consolidated statements of cash flows*1.

The reconciliation of ending balance of cash and cash equivalents with account balances per consolidated balance
sheets as of March 31, 2023 and 2024 is as follows:
Millions of yen
For the fiscal year
For the fiscal year
ended March 31,
ended March 31,
2023
2024
Cash and bank deposits¥
47,432¥
48,895Time deposits with an original maturity of more than 3 months

(609)

(544)

Securities

5,127

4,747

Cash and cash equivalents*2.

¥

51,950¥53,098

Summary of assets and liabilities of the companies which ceased to be consolidated subsidiaries as a result of saleof shares
For the fiscal year ended March 31, 2023:(1)

The following is the summary of the assets and liabilities of TOTOKU ELECTRIC CO., LTD. and its
subsidiaries, TOTOKU (ZHEJIANG) Co., Ltd. and TOKUDENPROSELL Co., Ltd., at the time of sale ofshares, whereby they ceased to be consolidated subsidiaries, and the selling price and the proceeds from thesale of shares.
Millions of yen

Current assets¥

16,378Non-current assets

10,925Current liabilities(4,991)

Non-current liabilities(2,347)

Foreign currency translation adjustment(551)

Valuation difference on available-for-sale securities(140)

Remeasurements of defined benefit plans126

Non-controlling interests(8,391)Gain on sale of shares of subsidiaries and associates

10,846

Selling price of shares¥

21,855¥

12,371

Cash and cash equivalents(9,483)

Proceeds from sale of shares(2)

The following is the summary of the assets and liabilities of Jiangsu OFS Hengtong Optical Technology Co.,
Ltd., at the time of sale of shares, whereby it ceased to be a consolidated subsidiary, and the selling price andthe proceeds from the sale of shares.
Millions of yen

Current assets

¥

1,711

Non-current assets

357

Current liabilities(100)

Foreign currency translation adjustment(26)

Non-controlling interests(953)

Gain on sale of shares of subsidiaries and associates

78

Selling price of shares¥

Cash and cash equivalents

1,068(1,496)

Proceeds from sale of shares

¥

146

(428)

For the fiscal year ended March 31, 2024:(1)

The following is the summary of the assets and liabilities of THAI FIBER OPTICS CO., LTD. at the time ofsale of shares, whereby it ceased to be a consolidated subsidiary, and the selling price and the proceeds fromthe sale of shares.
Millions of yen

Current assets¥

117

Non-current assets

413

Current liabilities(34)

Non-current liabilities

(2)
(146)

Foreign currency translation adjustment
Valuation difference on available-for-sale securities

0
(413)

Non-controlling interests

285

Gain on sale of shares of subsidiaries and associates
Selling price of shares

¥

220

¥

130

(89)

Cash and cash equivalents
Proceeds from sale of shares(2)

The following is the summary of the assets and liabilities of OFS UTD2 ApS at the time of sale of shares,
whereby it ceased to be a consolidated subsidiary, and the selling price and the proceeds from the sale of shares.
Millions of yen

Current assets¥

543

Non-current assets

2,733

Current liabilities(275)

Non-current liabilities(151)

Foreign currency translation adjustment(2)

Incidental expenses for sale of shares

179
1,423

Gain on sale of shares of subsidiaries and associates
Selling price of shares

¥

4,450
(41)

Cash and cash equivalents
Proceeds from sale of shares

¥

4,408

Leases
1. Finance leases
Finance lease transactions that do not transfer ownership:(i) Leased assets
Property, plant and equipment (mainly machinery, equipment and vehicles)(ii) Depreciation method of leased assets
Leased assets in finance lease transactions that do not transfer ownership are depreciated on a straight-line basis using thelease term as the useful life and with zero residual value.
2. Operating leases
Future lease payments under non-cancellable operating leases:
Millions of yen
For the fiscal year
For the fiscal year
ended March 31,
ended March 31,
2023
2024
¥
1,064
¥
1,309

Due within one year
Due after one year

8,412

8,252
Total

¥

9,317

¥

9,721

Notes: 1. Since the foreign subsidiaries comply with International Financial Reporting Standards (IFRS) apply IFRS 16 Leases, operatingleases are presented in “Right-of-use assets” of “Non-current assets” in the consolidated balance sheets.

147

2. Since the foreign subsidiaries that comply with U.S. GAAP apply ASU No. 2016-02 Leases, operating leases are presented in“Right-of-use assets” of “Non-current assets” in the consolidated balance sheets.
3. The above minimum lease payments include amounts equivalent to the stipulated damages.

Financial instruments
1. Status of financial instruments(1) Policy on financial instruments
The Group has basic policy of safe fund management with no loss of principal. The necessary fund is obtained throughborrowings from banks and other financial institutions and issuances of commercial papers and corporate bonds. The Groupshall not enter into derivative transactions for speculative purposes.
(2) Nature and risk of financial instruments and risk management system
Notes and accounts receivable - trade arising from operations are exposed to credit risk of customers. The Group carries out
the practice of keeping track of due dates and outstanding balances of each customer under the credit management rules, aswell as monitoring major customers’ credit status on a regular basis in order to minimize credit risk.
Marketable securities and investment securities are mainly equity securities and exposed to the risk of changes in market
price. These securities are primarily the shares of companies with which the Group has business relationship, and the fair valueof these securities are evaluated on a regular basis.
Trade notes and accounts payable arising from operations normally have payment terms of less than one year.
Short-term and long-term borrowings, commercial paper, and bonds are mainly utilized for working and capital investments.
The interest rate risk of a certain portion of those borrowings is hedged using interest rate swaps as hedging instruments.
Derivative transactions include foreign exchange forward contracts used to hedge foreign currency risk associated with tradereceivables and payables denominated in foreign currency, interest rate swaps used to hedge interest rate risk associated withborrowings, metal forward contracts used to hedge price fluctuation risk of raw materials and work in process. Details ofhedge accounting, including hedging instruments and hedged items, hedging policy, and effectiveness of hedge transactions
are explained in “5. Accounting policies, (8) Hedge accounting” above. Execution and management of derivative transactions
are subject to related internal rules.
Although trade payables and borrowings are exposed to liquidity risk, they are managed by such means as cash flow
projections prepared in a timely manner.
(3) Supplementary information on the fair value of financial instruments
The estimated fair values of financial instruments would not be fixed due to variety of factors and assumptions. In addition,
the contractual amounts of the derivative transactions set out in the notes to “Derivatives” are not in themselves an indicatorof the market risk associated with derivative transactions.

148

2. Fair value of financial instruments
Carrying amount and fair value of financial instruments and their difference as of March 31, 2023 and 2024 were as follows:
As of March 31, 2023
Millions of yen
2023
Carrying amount (*3)

Fair value (*3)

Difference(1) Marketable securities and investment securities(i)

Held-to-maturity debt securities¥(ii) Available-for-sale securities(iii) Shares of unconsolidated subsidiaries andassociates (*6)

5,127

¥

5,127

¥

–

21,983

21,983–

81,991

78,029(3,962)

Total assets¥

109,102¥

105,139¥(3,962)(1) Bonds payable¥(40,000)¥(39,257)¥742(2) Long-term borrowings
Total liabilities(114,547)(113,632)

915¥(154,547)¥(152,889)

¥

1,657

¥

(350)

¥

(350)

¥

–

Derivative transactions (*4)(i)

Derivative transactions to which hedge
accounting is not applied(ii) Derivative transactions to which hedge
accounting is applied
Total derivative transactions

304
¥

(46)

304
¥

(46)

–
¥

–

(*1) “Cash” is omitted because its fair value is always equal to the carrying amount, and “Deposits,” “Notes and accounts receivable - trade,”“Notes and accounts payable - trade,” “Short-term borrowings,” and “Commercial papers” are also omitted because they are settled in ashort period of time and their fair values approximate their carrying amounts.
(*2) Equity securities, etc. that do not have a quoted market price in an active market are not included in (1) Marketable securities andinvestment securities. Carrying amount of such equity instruments were as follows:
Millions of yen
2023
Unlisted equity securities¥

15,578Investments in capital
4,262(*3) Carrying amounts and fair values of items reported in liabilities are shown in parentheses.
(*4) Receivables and payables arising from derivative transactions are shown in net amounts, and those with negative net totals are shown inparentheses.
(*5) Investments in associations and equivalent entities in which the Group has a net equity interest on the consolidated balance sheets are notincluded in (1) Marketable securities and investment securities in accordance with the treatment prescribed in paragraph 24-16 of the“Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance No. 31 issued on June 17, 2021).
The amount of such investments in the consolidated balance sheet were ¥745 million.
(*6) As stated in “Notes—Changes in Accounting Policies,” UACJ Corporation, an equity-method associate of the Company, has adopted
International Financial Reporting Standards (IFRS) from the beginning of the fiscal year ended March 31, 2024. As the changes inaccounting policies due to this adoption have been applied retrospectively, and the figures for the fiscal year ended March 31, 2023 arethose after the retrospective application.

149

As of March 31, 2024
Millions of yen
2024
Carrying amount (*3)

Fair value (*3)

Difference(1) Marketable securities and investment securities(i)

Held-to-maturity debt securities¥(ii) Available-for-sale securities(iii) Shares of unconsolidated subsidiaries andassociates

4,747

¥

4,747

¥

–

22,764

22,764–92,722

205,723

113,001

Total assets¥

120,234¥

233,235¥

113,001(1) Bonds payable¥(40,000)¥(39,050)¥949(2) Long-term borrowings
Total liabilities(120,168)(119,119)

1,048

¥

(160,168)¥(158,170)

¥

1,997

¥

(949)

¥

(949)

¥

–

Derivative transactions (*4)(i)

Derivative transactions to which hedge
accounting is not applied(ii) Derivative transactions to which hedge
accounting is applied
Total derivative transactions

1,839
¥

890

1,839
¥

890

–
¥

–

(*1) “Cash” is omitted because its fair value is always equal to the carrying amount, and “Deposits,” “Notes and accounts receivable - trade,”“Notes and accounts payable - trade,” “Short-term borrowings,” and “Commercial papers” are also omitted because they are settled in ashort period of time and their fair values approximate their carrying amounts.
(*2) Equity securities, etc. that do not have a quoted market price in an active market are not included in (1) Marketable securities andinvestment securities. The carrying amounts of such equity instruments were as follows:
Millions of yen
2024
Unlisted equity securities¥

16,207

Investments in capital
1,290(*3) Carrying amounts and fair values of items reported in liabilities are shown in parentheses.
(*4) Receivables and payables arising from derivative transactions are shown in net amounts, and those with negative net totals are shown inparentheses.
(*5) Investments in associations and equivalent entities in which the Group has a net equity interest on the consolidated balance sheets are notincluded in (1) Marketable securities and investment securities in accordance with the treatment prescribed in paragraph 24-16 of the“Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance No. 31 issued on June 17, 2021). The
amount of such investments in the consolidated balance sheet were ¥930 million.

150

Note 1: Redemption schedule of monetary receivables and securities with contractual maturities after the consolidated balance sheet date as ofMarch 31, 2023 and 2024 is as follows:
As of March 31, 2023
Millions of yen

Deposits¥

41,228Notes and accounts receivable - trade2023

Over 1 year to
5 years

Within 1 year¥–

Over 5 years to
10 years¥

Over 10 years–¥–

223,912

–

–

–

5,127

–

–

–

Marketable securities and investment securities
Government bonds, municipal bonds and other
Total

¥

270,268

¥

–

¥

–

¥

–

As of March 31, 2024
Millions of yen
2024
Over 1 year to
5 years

Within 1 year
Deposits¥

41,827

Notes and accounts receivable - trade¥

Over 5 years to
10 years–

239,348¥

Over 10 years
–

–

¥

–

–

–

Marketable securities and investment securities
Government bonds, municipal bonds and other
Total

4,747
¥

285,922

–
¥

–

–

¥

–

–

¥

–

Note 2: Repayment schedule of commercial papers, bonds payable and long-term borrowings after the consolidated balance sheets date as ofMarch 31, 2023 and 2024 is as follows:
As of March 31, 2023
Millions of yen
2023

Commercial papers

Within 1 year

Over 1 year to
2 years

Over 2 years to
3 years

Over 3 years to
4 years

Over 4 years to
5 years

Over 5 years

¥

¥

¥

¥

¥

¥

28,000

–

–

–

–

–

Bonds payable

–

–

–

10,00010,00020,000Long-term borrowings–

24,30030,646

17,30018,80023,500Total¥

28,000¥24,300¥30,646¥27,300¥28,800¥43,500

As of March 31, 2024
Millions of yen
2024

Commercial papers

Within 1 year

Over 1 year to
2 years

Over 2 years to
3 years

Over 3 years to
4 years

Over 4 years to
5 years

Over 5 years

¥

¥

¥

¥

¥

¥

35,500

–

–

–

–

–

Bonds payable––

10,00010,000–20,000Long-term borrowings–

33,497

19,77018,10026,00022,800Total¥

35,500¥33,497¥

151

29,770¥28,100¥26,000¥42,8003. Financial Instruments categorized by fair value hierarchy
The fair value of financial instruments is categorized into the following three levels, depending on the observability andsignificance of the inputs for measuring fair value:
Level 1 fair value:

Fair value determined by using quoted prices (unadjusted) in active markets for identical assets or
liabilities as the inputs for measuring observable fair value

Level 2 fair value:

Fair value determined by using inputs for measuring observable fair value other than Level 1 inputs

Level 3 fair value:

Fair values determined by using inputs for measuring unobservable fair value

If multiple inputs are used that have a significant impact on the measurement of fair value, the fair value is categorized at thelowest level in the fair value measurement among the levels to which each of these inputs belongs.
(1) Financial assets and liabilities measured at fair value as of March 31, 2023 and 2024
As of March 31, 2023
Millions of yen
2023
Level 1

Level 2

Level 3

Total

Marketable securities and investment securities:
Available-for-sale securities:
Equity securities¥

21,983

¥

–

¥

–

¥

21,983

Derivative transactions:
Currency

–

213

–

213

Commodity

–

793

–

793

Total assets¥

21,983

¥

1,006

¥

–

¥

22,989

¥

–

¥

(939)

¥

–

¥

(939)

Derivative transactions:
Currency
Commodity–
Total liabilities

¥

–

(113)
¥

–

(1,053)

¥

–

(113)
¥

(1,053)(*) Items reported in liabilities are shown in parentheses.
As of March 31, 2024
Millions of yen
2024
Level 1

Level 2

Level 3

Total

Marketable securities and investment securities:
Available-for-sale securities:
Equity securities¥

22,764

¥

–

¥

–

¥

22,764

Derivative transactions:
Currency

–

950

–

950

Commodity

–

1,965

–

1,965

Total assets¥

22,764

¥

2,916

¥

–

¥

25,681¥–¥(1,985)¥–¥(1,985)Derivative transactions:
Currency
Commodity–
Total liabilities¥–(*) Items reported in liabilities are shown in parentheses.

152

(41)
¥

(2,026)

–
¥

–

(41)
¥

(2,026)

(2) Financial assets and liabilities not measured at fair value as of March 31, 2023 and 2024
As of March 31, 2023

Millions of yen
2023
Level 1

Level 3

Level 2

Total

Marketable securities and investment securities:
Held-to-maturity debt securities
Government bonds, municipal bonds
and other
Shares of unconsolidated subsidiaries andassociates¥

Total assets¥

78,029

¥

5,127

¥

–

¥

83,156¥–¥(39,257)¥–¥(39,257)

Bonds payable

–

5,127

78,029Long-term borrowings
Total liabilities

¥

–

–

–

–
¥

¥

–

(113,632)¥(152,889)¥

78,029

–
¥

–

5,127

(113,632)¥(152,889)(*) Fair values of items reported in liabilities are shown in parentheses.
As of March 31, 2024
Millions of yen
2024
Level 1

Level 3

Level 2

Total

Marketable securities and investment securities:
Held-to-maturity debt securities:
Government bonds, municipal bonds
and other
Shares of unconsolidated subsidiaries andassociates¥

Total assets¥

205,723

¥

4,747

¥

–

¥

210,470¥－¥(39,050)¥–¥(39,050)

Bonds payable－
205,723

Long-term borrowings
Total liabilities

¥

－

¥

(119,119)¥(158,170)

–

¥

–

－

－
¥

4,747

205,723

–
¥

–

4,747

(119,119)¥(158,170)(*) Fair values of items reported in liabilities are shown in parentheses.
Note: A description of the valuation techniques and inputs used in the fair value measurements:
Marketable securities and investment securities
The fair values of listed equity securities are measured at the quoted market prices. Since listed equity securities are traded in active
markets, the fair values of listed equity securities are categorized as Level 1. As the municipal bonds and corporate bonds are notconsidered to be in active markets due to low market transactions, the fair values of municipal bonds and corporate bonds are measured
by using discounted present value techniques considering observable inputs such as interest rates, and categorized as Level 2.
Derivatives
The fair values of interest rate swaps, foreign currency forward contracts, foreign currency swaps, and commodity forward contracts aremeasured by using prices quoted by counterparty financial institutions and brokers, and are categorized as Level 2.
Bonds payable
Bonds issued by the Company are measured by using discounted present value techniques considering assumptions including expected
future cash flows and discount rates taking into account maturity and credit risk, and are categorized as Level 2.
Long-term borrowings
The fair values of long-term borrowing are measured by using discounted present value techniques considering assumptions including
expected future cash flows and discount rates taking into account maturity and credit risk, and are categorized as Level 2.

153

Securities
1. Held-to-maturity debt securities as of March 31, 2023 and 2024
As of March 31, 2023
Millions of yen
2023
Carrying
amountFair value

Difference

Securities whose fair value does not exceed the carrying amount:
Government bonds, municipal bonds and other
Total

¥

5,127

¥

5,127

–

¥

5,127

¥

5,127

–

As of March 31, 2024
Millions of yen
2024
Carrying
amountFair value

Difference

Securities whose fair value does not exceed the carrying amount:
Government bonds, municipal bonds and other
Total

¥

4,747

¥

4,747

–

¥

4,747

¥

4,747

–

2. Available-for-sale securities as of March 31, 2023 and 2024
As of March 31, 2023
Millions of yen
2023
Carrying
amountCost

Difference

Securities whose carrying amount exceeds the cost:
Equity securities¥

21,928

7,001

14,9275

5

0

21,934

7,006

14,927

48

58

(9)

7,065

14,917

Other
Subtotal¥

Securities whose carrying amount does not exceed the cost:
Equity securities
Total

¥

21,983¥As of March 31, 2024
Millions of yen
2024
Carrying
amountCost

Difference

Securities whose carrying amount exceeds the cost:
Equity securities

¥

Other
Subtotal

22,715

6,447

16,267–¥––22,715

6,447

16,267

48

54

(6)

6,502

16,261

Securities whose carrying amount does not exceed the cost:
Equity securities
Total

¥

154

22,764¥

3. Securities sold during the fiscal years ended March 31, 2023 and 2024
For the fiscal year ended March 31, 2023
Millions of yen
For the fiscal year ended March 31, 2023
Class

Selling price

Gross realized gain

Gross realized loss

Equity securities

¥

5,682

¥

4,074

¥

(0)

Total

¥

5,682

¥

4,074

¥

(0)

For the fiscal year ended March 31, 2024
Millions of yen
For the fiscal year ended March 31, 2024
Class

Selling price

Gross realized gain

Gross realized loss

Equity securities

¥

8,400

¥

4,815

¥

(101)

Total

¥

8,400

¥

4,815

¥

(101)

4. Securities for which impairment losses were recognized
In the fiscal year ended March 31, 2023, impairment losses of ¥356 million were recognized for securities (¥356 million forequity securities classified as investment securities).
In the fiscal year ended March 31, 2024, impairment losses of ¥771 million were recognized for securities (¥771 million forequity securities classified as investment securities).

155

Derivatives
1. Derivative transactions to which hedge accounting is not applied(1) Foreign currency related transactions as of March 31, 2023 and 2024
As of March 31, 2023
Millions of yen
2023
PortionFair value
over 1 year

Notional amount
Off-market transactions:
Foreign currency forward contracts:
Sell:
U.S. dollar
Japanese yen
Euro
Taiwan dollar
Indonesian rupiah
Thai baht
Chinese yuan
Other
Buy:
U.S. dollar
Euro
Other
Currency Swaps:
Receiving yen, paying Philippine peso
Total

¥

¥

14,606
4,002
4,861
4,596
4,374
36
1,117
167

¥

–
–
–
–
–
–
–
–

¥

(25)
9
(100)
(91)
(94)
(0)
(21)
3

Unrealized gain
(loss)

¥

(25)
9
(100)
(91)
(94)
(0)
(21)
3

3,525
7
676

–
–
–

28
–
7

28
–
7

867
38,840

–
–

(22)
(306)

(22)
(306)

¥

¥

¥

As of March 31, 2024
Millions of yen
2024
PortionFair value
over 1 year

Notional amount
Off-market transactions:
Foreign currency forward contracts:
Sell:
U.S. dollar
Japanese yen
Euro
Taiwan dollar
Indonesian rupiah
Thai baht
Chinese yuan
Other
Buy:
U.S. dollar
Euro
Other
Currency Swaps:
Receiving yen, paying Philippine peso
Total

¥

¥

24,379
4,394
4,996
7,649
4,577
1,438
1,332
1,012

¥

–
–
–
–
–
–
–
–

¥

(1,129)
256
(109)
(70)
35
(6)
(0)
(19)

Unrealized gain
(loss)¥(1,129)
256
(109)
(70)
35
(6)
(0)
(19)

4,680
1,222
315

–
–
–

162
52
(2)

162
52
(2)

867
56,867

867
867

(105)
(936)

(105)
(936)

¥

¥

¥

Notes 1. “Thai baht” that was included in “Other" under “Sell” in the previous fiscal year is separately presented in the current fiscal year
due to its increased materiality of the amount. As a result, “Other” under “Sell” in the previous fiscal year has been reclassified
and presented as “Thai baht” and “Other.”
2. “Euro” that was included in “Other” under “Buy” in the previous fiscal year is separately presented in the current fiscal year due toits increased materiality of the amount. As a result, “Other” under “Buy” in the previous fiscal year has been reclassified andpresented as “Euro” and “Other.”156

(2) Commodity related transactions as of March 31, 2023 and 2024
As of March 31, 2023
Millions of yen
2023
Portionover 1 year

Notional amount

Fair value

Unrealized gain
(loss)

Market transactions:
Forward contracts:
Sell:

¥

Buy:

9,983

¥

5,231
Total

¥

15,214

–

¥

(163)

–
¥

–

¥

119
¥

(44)

(163)
119

¥

(44)

As of March 31, 2024
Millions of yen
2024
Portionover 1 year

Notional amount

Fair value

Unrealized gain
(loss)

Market transactions:
Forward contracts:
Sell:

¥

Buy:

7,863

¥

3,583
Total

¥

11,446

157

–

¥

–
¥

–

(105)

¥

92
¥

(12)

(105)
92

¥

(12)

2. Derivative transactions to which hedge accounting is applied(1) Foreign currency related transactions as of March 31, 2023 and 2024
As of March 31, 2023
Millions of yen
2023
Hedged items

Notional amountPortion over 1 year

Fair value (Note)

Normal accounting method:
Foreign currency forward contracts:
Sell:
U.S. dollar
Euro
Taiwan dollar
Thai baht
Other

Trade receivables(Forecast transactions)
Trade receivables(Forecast transactions)
Trade receivables(Forecast transactions)
Trade receivables(Forecast transactions)
Trade receivables(Forecast transactions)¥

16,160

¥

367

¥

(277)

209

–

(25)

5,658

–

(1)

200

–

(1)

894

–

26

557

(105)

–

5

–

–

–

–

–

(40)

Buy:
Trade payables
21,237(Forecast transactions)
Trade payables
Euro
1,199
(Forecast transactions)
Trade payables
Philippine peso–
(Forecast transactions)
Trade payables
U.K. pound–(Forecast transactions)
Trade payables
Other
8,335
(Forecast transactions)
Assignment accounting (special treatment for foreign exchange forward contracts):
U.S. dollar

Foreign currency forward contracts:
Sell:
U.S. dollar

Trade receivables

1,174

–

–

Other

Trade receivables

–

–

–

U.S. dollar

Trade payables

392

–

–

Euro

Accrued expenses

–

–

–

Other

Trade payables

Buy:

Total

–
¥

55,463

–
¥

924

–
¥

(419)

Note: The fair value of foreign currency related transactions subject to the assignment accounting (special treatment for foreign exchange
forward contracts) is accounted for together with the underlying trade receivables or trade payables subject to hedging.

158

As of March 31, 2024
Millions of yen
2024
Hedged items

Notional amountPortion over 1 year

Fair value (Note 1)

Normal accounting method:
Foreign currency forward contracts:
Sell:
U.S. dollar
Euro
Taiwan dollar
Thai baht
Other

Trade receivables(Forecast transactions)
Trade receivables(Forecast transactions)
Trade receivables(Forecast transactions)
Trade receivables(Forecast transactions)
Trade receivables(Forecast transactions)¥

16,637¥–¥(1,107)

33

–

(0)

–

–

–

65

–

(0)

9

–

0

259

771

–

20

–

214

447

10

–

(5)

Buy:
Trade payables
13,419(Forecast transactions)
Trade payables
Euro
258(Forecast transactions)
Trade payables
Philippine peso
7,527
(Forecast transactions)
Trade payables
U.K. pound
1,373(Forecast transactions)
Trade payables
Other
141
(Forecast transactions)
Assignment accounting (special treatment for foreign exchange forward contracts):
U.S. dollar

Foreign currency forward contracts:
Sell:
U.S. dollar

Trade receivables

95

–

–

Other

Trade receivables

35

–

–

U.S. dollar

Trade payables

16

–

–

Euro

Accrued expenses

140

–

–

Other

Trade payables

15

–

–

Buy:

Total

¥

39,771

¥

706

¥

(97)

Note: 1. The fair value of foreign currency related transactions subject to the assignment accounting (special treatment for foreignexchange forward contracts) is accounted for together with the underlying trade receivables or trade payables subject to hedging.
2. “Thai baht” that was included in “Other” under “Sell” in the previous fiscal year is separately presented in the current fiscal year
due to its increased materiality of the amount. As a result, “Other” under “Sell” in the previous fiscal year has been reclassified
and presented as “Thai baht” and “Other.”
3. “Taiwan dollar” under “Buy” that was separately presented in the previous fiscal year is presented by including in “Other” in thecurrent fiscal year due to its decreased materiality of the amount. As a result, “Taiwan dollar” under “Buy” in the previous fiscal
year has been reclassified and presented as “Other.”159

(2) Commodity related transactions as of March 31, 2023 and 2024
As of March 31, 2023
Millions of yen
2023
Hedged items

Notional amountPortion over 1 year

Fair value

Normal accounting method:
Metal forward contracts:
Raw materials and work in
Sell:
process
Raw materials and work in
Buy:process
Total

¥

5,712

¥

–

25,340¥31,052

¥

(104)

162
¥

162

828
¥

723

As of March 31, 2024
Millions of yen
2024
Hedged items

Notional amountPortion over 1 year

Fair value

Normal accounting method:
Metal forward contracts:
Raw materials and work in
Sell:
process
Raw materials and work in
Buy:process
Total¥

14,050¥32,004¥46,055

160

–

¥

965
¥

965

(894)
2,832

¥

1,937

Retirement benefits
1. Overview of retirement benefit plans adopted by the GroupThe Company and its consolidated subsidiaries (hereinafter, the “Group”) have funded and/or unfunded defined benefit pension
plans and/or defined contribution plans. The defined benefit plans consist of Employees’ Pension Fund Plan, defined benefit
corporation pension plan and lump-sum payment plan.
There are cases where additional retirement benefits are paid at the time of retirement of employees. The Company has establishedan employees’ retirement benefit trust and certain consolidated subsidiaries have joined multi-employer employees’ pension fund.
The plans, which are not possible to reasonably compute the amounts of plan assets corresponding to their own contribution
amounts, are accounted for in the same way as the defined contribution plan.
On the defined benefit pension plans and lump-sum payment plans of certain consolidated subsidiaries, retirement benefit liability
and retirement benefit expenses are calculated by using the simplified method.
2. Defined benefit plans(1) Reconciliation of opening and ending balances of retirement benefit obligations (excluding plans using the simplified
method) for the fiscal years ended March 31, 2023 and 2024
Millions of yen
For the fiscal year
For the fiscal year
ended March 31,
ended March 31,
2023
2024
Balance at beginning of year¥
103,702¥
94,503Service cost
3,838
3,418
Interest cost
1,126
1,248
Actuarial gains and losses(2,885)(978)Benefits paid
(8,389)(12,221)
Net effect resulting from business combinations(3,229)–Foreign currency translation adjustment
340
2,213
Balance at end of year¥
94,503¥88,185(2) Reconciliation of opening and ending balances of plan assets (excluding plans using the simplified method) for the fiscal
years ended March 31, 2023 and 2024
Millions of yen
For the fiscal year
For the fiscal year
ended March 31,
ended March 31,
2023
2024
Balance at beginning of year¥
69,580¥66,661
Expected return on plan assets
682
1,764
Actuarial gains and losses(1,175)
7,947
Contributions from the Company
1,503
1,155
Benefits paid
(3,382)(7,884)Net effect resulting from business combinations(1,199)–Foreign currency translation adjustment
651
1,981
Balance at end of year¥
66,661¥
71,625(3) Reconciliation of opening and ending balances of retirement benefit liability under the plans using a simplified
method for the fiscal years ended March 31, 2023 and 2024
Millions of yen
For the fiscal year
For the fiscal year
ended March 31,
ended March 31,
2023
2024
Balance at beginning of year
¥
1,556
¥
1,496
437
Retirement benefit expenses
759
(343)
Benefits paid
(654)
(202)
Contributions to fund(199)
Net effect resulting in change in scope of consolidation–50

Net effect resulting from business combinations

34–

Balance at end of year

¥

161

1,496

¥

1,438

(4) Reconciliation of the ending balances of retirement benefit obligations and plan assets and defined benefit liability andasset recorded in the consolidated balance sheet as of March 31, 2023 and 2024
Millions of yen
2023
2024
Funded retirement benefit obligation¥
88,443¥86,466
Plan assets(70,493)(75,698)
17,95010,767
Unfunded retirement benefit obligation
11,3897,230
Net liability for defined benefit obligation
29,33917,997Retirement benefit liability
Retirement benefit asset
Net liability for defined benefit obligation¥

38,239(8,900)29,339¥29,239(11,241)
17,997

Note: The above items include plans using the simplified method.

(5) The components of retirement benefit expenses for the fiscal years ended March 31, 2023 and 2024
Millions of yen
For the fiscal year
For the fiscal year
ended March 31,
ended March 31,
2023
2024
Service cost
¥
3,838
¥
3,418
Interest cost
1,126
1,248
Expected return on plan assets(682)(1,764)
Amortization of actuarial gains and losses
346
406
Amortization of prior service cost
26
25
Retirement benefit expenses calculated on a simplified method
759
437
Total retirement benefit expenses
¥
5,415
¥
3,772
(6) Remeasurements of defined benefit plans under other comprehensive income
The components of remeasurements of defined benefit plans (before tax) under other comprehensive income for the fiscal
years ended March 31, 2023 and 2024 were as follows:
Millions of yen
For the fiscal year
For the fiscal year
ended March 31,
ended March 31,
2023
2024
Service cost
¥
76
¥
59
Interest cost

802

Total retirement benefit expenses

¥

878

8,771
¥

8,831

(7) Remeasurements of defined benefit plans under accumulated other comprehensive income
The components of remeasurements of defined benefit plans (before tax) under accumulated other comprehensive income
as of March 31, 2023 and 2024 were as follows:
Millions of yen
For the fiscal year
For the fiscal year
ended March 31,
ended March 31,
2023
2024
Unrecognized prior service cost
¥
(196)
¥
(255)
Unrecognized actuarial gains and losses

2,889

Total

¥

162

2,693

(5,882)¥(6,138)(8) Plan assets(i) Major components of plan assets
The components of plan assets as of March 31, 2023 and 2024 were as follows:
2023

2024

Equity securities
Debt securities
Assets in a life-insurer’s general accountCash and deposits
Other

37 %
30 %
16 %
2%
15 %

47 %
17 %
14 %
6%
17 %

Total

100 %

100 %

Note: The above plan assets included 18% and 12% of assets held by the retirement benefit trust set up for the retirement
benefit plan as of March 31, 2023 and 2024, respectively.

(ii) Method of determining the expected rate of return on plan assets
The expected rate of return on plan assets is determined considering the long-term rates of return, which are expectedcurrently and in the future from the various components of the plan assets.
(9) Actuarial assumptions
Major actuarial assumptions used for the fiscal years ended March 31, 2023 and 2024 are as follows:
For the fiscal year
ended March 31, 2023
0.4%–7.3 %Discount rateLong-term expected rate of return on plan assets

For the fiscal year
ended March 31, 2024
0.4%–6.4 %

1.0%–5.0 %

1.0%–5.8 %3. Defined contribution plans
Required contributions for defined contribution plans (including multi-employer employees’ pension fund plans that are
accounted for in the same manner as a defined contribution plan) for the fiscal years ended March 31, 2023 and 2024 were ¥542
million and ¥5,119 million, respectively.
4. Multi-employer plan
Amounts related to the multi-employer plan for which required contributions are accounted for as retirement benefit expenses
are as follows.
(1) The funded status of the multi-employer plan as of March 31, 2023 and 2024, was as follows:
Millions of yen
2023
Plan assets
Sum of actuarial liabilities of pension plan and minimum
actuarial reserve
Net balance¥

86,0862024¥

88,763¥(2,676)

83,25987,342¥(4,083)(2) The contribution ratio of the Group in the multi-employer plan for the fiscal years ended March 31, 2023 and 2024
2023
2024
Contribution ratio of the Group in the multi-employer plan

0.7 %

0.7 %

(3) Supplementary explanation
The above net balance resulted mainly from past service cost under the plan in pension actuarial valuation and special
reserve.
The ratios above do not represent the actual actuarial liability ratio of the Group.

163

Tax effect accounting
As stated in “Notes—Changes in Accounting Policies,” UACJ Corporation, an equity-method associate of the Company, has
adopted International Financial Reporting Standards (IFRS) from the beginning of the fiscal year ended March 31, 2024. As
the changes in accounting policies due to this adoption have been applied retrospectively, and the amounts and effective tax
rates for the fiscal year ended March 31, 2023 are those after the retrospective application.
1. Significant components of deferred tax assets and liabilities as of March 31, 2023 and 2024
Millions of yen
2023
Deferred tax assets
Retirement benefits liability
Provision for environmental measures
Unrealized profits on non-current assets
Tax loss carryforward (Note 2)
Excess amount over limitation of taxable provisions for bonuses
Accrued enterprise tax
Excess amount over limitation of non- current assets depreciation
Impairment losses
Loss on valuation of inventories
Unrealized profits on inventories
Retirement benefits for Directors and other officers
Loss on valuation of securities
Provision for product warranties
Other
SubtotalLess valuation allowance for tax loss carryforward (Note 2)Less valuation allowance for total of future deductible temporary
differences, etc.
Total valuation allowance (Note 1)
Total deferred tax assets
Deferred tax liabilities
Valuation difference on available-for-sale securities
Reserve for tax purpose reduction entry of non-current assets
Revaluation difference on land
Undistributed earnings of subsidiaries and associates
Deferred gains on hedges
Other
Total deferred tax liabilities
Deferred tax assets (liabilities), net

¥

¥
¥

2024

14,3952,844
787
48,888
2,961
453
3,086
7,894
1,091
580
144
1,432
724
14,432
99,719(42,515)¥¥¥(28,558)

11,2332,824
781
45,968
3,207
230
4,505
8,569
1,562
1,068
116
1,385
1,357
17,08899,898(39,960)(32,386)¥¥(71,073)
28,646¥¥(72,347)
27,551¥(4,440)(28)(181)(12,446)(163)(5,549)(22,809)
5,836¥(4,870)(28)(181)(13,482)(622)(7,411)(26,595)
955¥¥

Note 1: There were no material changes in the valuation allowance.
Note 2: Tax loss carryforward and the related deferred tax assets by time to expiration as of March 31, 2023 and 2024 were as follows:
As of March 31, 2023
Millions of yen
Over 1 year
to 2 years

Within 1 year
Deferred tax assets
relating to tax loss¥
carryforward (*1)
Less valuation allowancefor tax loss carryforward
Deferred tax assets

4,513

¥

6,725

2023
Over 3 year
to 4 years

Over 2 years
to 3 years
¥

5,378

¥

Over 4 years
to 5 years

955 ¥

3,051

Over 5 years¥

28,263

Total¥

48,888(2,420)(5,432)(4,247)(362)(2,254)(27,797)(42,515)

2,093

1,293

1,131

592

796

466

(*2) 6,373(*1) Tax loss carryforward is calculated by applying the effective statutory tax rate.
(*2) Net deferred tax assets of ¥6,373 million were recognized for tax loss carryforward of ¥48,888 million (calculated by applying the effective
statutory tax rate). Valuation allowances have not been recognized for the part of the tax loss carryforward expected to be collectible
considering future taxable income. Assumptions for estimating future taxable income is stated in “Item 5 Financial Information, 1.
Consolidated Financial Statements, etc., (1) Consolidated financial statements, Notes to Consolidated Financial Statements, Significant
accounting estimates.”164

As of March 31, 2024
Millions of yen
Over 1 year
to 2 years

Within 1 year
Deferred tax assets
relating to tax loss¥
carryforward (*1)
Less valuation allowancefor tax loss carryforward
Deferred tax assets

5,397

¥

1,395

2024
Over 3 year
to 4 years

Over 2 years
to 3 years
¥

3,727

¥

Over 4 years
to 5 years

394 ¥

3,908

Over 5 years¥

31,145

Total¥

45,968(5,232)(1,171)(2,390)(195)(2,137)(28,832)(39,960)

164

224

1,336

198

1,770

2,312

(*2) 6,008(*1) Tax loss carryforward is calculated by applying the effective statutory tax rate.
(*2) Net deferred tax assets of ¥6,008 million were recognized for tax loss carryforward of ¥45,968 million (calculated by applying the effective
statutory tax rate). Valuation allowances have not been recognized for the part of the tax loss carryforward expected to be collectible
considering future taxable income. Assumptions for estimating future taxable income is stated in “Item 5 Financial Information, 1.
Consolidated Financial Statements, etc., (1) Consolidated financial statements, Notes to Consolidated Financial Statements, Significant
accounting estimates.”

2. Reconciliation between the normal effective statutory tax rate and the actual effective tax rate after applying tax effect for the
fiscal years ended March 31, 2023 and 2024
2023
Normal effective statutory tax rate

30.6

2024
%

30.6

%

Expenses not deductible for income tax purposes (e.g. entertainment expenses)

3.0 %

1.7

%

Dividend income not taxable for income tax purposes

0.1 %

1.1

%

Share of profits (losses) of investments accounted for using the equity method(5.4) %

(12.7) %Tax credits of experimentation and research expenses(4.1) %

(5.7) %

Valuation allowance

3.5 %

38.7

Tax rate differences with foreign consolidated subsidiaries(1.0) %

(1.8) %

Amortization of goodwill

0.4 %

0.2

%

Undistributed earnings of subsidiaries and associates

2.4 %

5.4

%

Unrecognized tax effects relating to unrealized profits(0.8) %

(1.0) %

Consolidation adjustments relating to sale of businesses

8.3 %

1.0

Other

(0.1) %

(0.1) %

36.9

57.8

Adjustments:

Actual effective tax rate after applying tax effect accounting

%

%

%
%

Change in presentation“Dividend income not taxable for income tax purposes,” which was included in “Other” in the fiscal year ended March 31, 2023,
is separately presented from the fiscal year ended March 31, 2024 due to its increased materiality, whereas “Expired tax loss
carryforward” that was separately presented in the fiscal year ended March 31, 2023 is presented by including in “Other” fromthe fiscal year ended March 31, 2024 as it is no longer material. To reflect the change in presentation, the reconciliation has
been reclassified from that of the fiscal year ended March 31, 2023.
As a result, the (0.2)% presented in “Other” and the 0.2% presented in “Expired tax loss carryforward” for the fiscal year ended
March 31, 2023 have been reclassified as “Dividend income not taxable for income tax purposes” of 0.1% and “Other” of (0.1)%.
3. Accounting for income taxes and local income taxes or the related tax effects
The Company and some of its subsidiaries in Japan apply the group tax sharing system and, in accordance with “Practical Solution
on the Accounting and Disclosure Under the Group Tax Sharing System” (ASBJ Practical Solution No. 42 issued on August 12,2021), account for and disclose income taxes and local income taxes or the related tax effects.

165

Revenue recognition
1. Revenues from contracts with customers on a disaggregated basis for the fiscal years ended March 31, 2023 and 2024
Fiscal year ended March 31, 2023
Millions of yen
For the fiscal year ended March 31, 2023
Infrastructure
CommuniEnergy
cations
infrastructure
Solutions

Subtotal¥214,797¥105,242¥320,039

41

–

41

¥214,838¥105,242¥320,080

Revenues fromcontracts withcustomers
Other revenue (*)
Net sales to externalcustomers

Electronics & Automotive Systems
Automotive Electronics
Products & Component Subtotal
Batteries
Material¥345,075 ¥254,122

Functional
products¥599,198¥120,239

–

297

50

¥345,373 ¥254,122¥599,496¥120,289

297

Service andDevelopment,
etc.

Total

¥26,201 ¥1,065,678
258

647

¥26,459 ¥1,066,326(*) Rent income of real estate

Fiscal year ended March 31, 2024
Millions of yen
For the fiscal year ended March 31, 2024
Infrastructure
CommuniEnergy
cations
infrastructure
Solutions

Revenues fromcontracts withcustomers
Other revenue (*)
Net sales to externalcustomers

Subtotal

Electronics & Automotive Systems
Automotive Electronics
Products & Component Subtotal
Batteries
Material¥165,044 ¥109,380 ¥274,424
31–Functional
products¥386,578 ¥257,216 ¥643,795

31

289

¥165,075 ¥109,380 ¥274,455–

Service andDevelopment,
etc.

¥110,968289

15¥386,868 ¥257,216 ¥644,084¥110,983

Total¥26,759 ¥1,055,947
245¥27,004 ¥1,056,528(*) Rent income of real estate

2. Basis for understanding revenue from contracts with customers
Notes are omitted because the same information is presented in “Item 5 Financial Information, 1. Consolidated Financial
Statements, etc., (1) Consolidated financial statements, Notes to Consolidated Financial Statements, Significant accounting
policies for preparing consolidated financial statements, 5. Accounting policies, (6) Accounting policy for significant revenues
and expenses.”
3. Information about the relationship between the satisfaction of performance obligations under contracts with customers and cash
flows arising from such contracts, and the amount and timing of revenue expected to be recognized in subsequent periods fromcontracts with customers that existed at the end of current fiscal year
(1) Balances of contract assets and liabilities
Millions of yen
2023
Receivables from contract with customers at beginning of year
Receivables from contract with customers at end of year¥

223,5202024¥

223,897

223,897239,348

Contract assets at beginning of year

6,797

5,654

Contract assets at end of year

5,654

6,364

Contract liabilities at beginning of year

2,807

3,051

Contract liabilities at end of year

3,051

7,562

Contract assets is a right to the consideration in exchange for performance obligations satisfied, which are calculated bydegree of progress, as of the end of the reporting period in connection mainly with construction contracts, excluding receivables.
Contract assets is reclassified to receivables at the time when the right to considerations of the Group become unconditional
only with the passage of time.
Contract liabilities is the portion of a liability for which consideration has been received from customers, but performance
166

581

obligations have not been satisfied. It increases when consideration is received from customer before transferring goods orservices to customer under contracts with customer, such as construction contracts, and decreases when the performanceobligations are satisfied.
The amount of revenue recognized in the previous fiscal year that was included in the contract liability balance at beginningof year was ¥1,714 million. The main reason for the decrease in contract assets in the previous fiscal year was due to theprogress and completion of work under construction contracts. There were no material changes in contract liabilities during
the previous fiscal year.
The amount of revenue recognized in the previous fiscal year resulting from performance obligations satisfied in prior periods
was ¥759 million.
The amount of revenue recognized in the current fiscal year included in the balance of contract liabilities at beginning ofyear was ¥1,268 million. The main reason for the increase in contract assets in the current fiscal year was due to the amountrecognized as revenue resulting from the satisfaction of performance obligations of construction contracts exceeding theamount transferred to receivables arising from contracts with customers upon completion of work under construction
contracts. The main reason for the increase in contract liabilities was due to an increase in advances received from customers
for products in the Automotive Products business.
The amount of revenue recognized in the current fiscal year from performance obligations satisfied in past periods was¥1,618 million.
(2) Transaction amount allocated to remaining performance obligations
The Group do not subject contracts with an original expected contract term of one year or less to notes, applying thepractical expedient in noting the transaction price allocated to the remaining performance obligations.
The total transaction amount allocated to performance obligations that are unsatisfied as of March 31, 2023 was ¥42,508
million, which is expected to be recognized as revenue generally within 10 years.
The total transaction amount allocated to performance obligations that are unsatisfied as of March 31, 2024 was ¥77,817
million, which is expected to be recognized as revenue generally within 9 years.

167Segment information, etc.
Segment information
1. Outline of reportable segments
The reportable segments of the Company are components for which the financial information can be obtained separately fromits other components, and the Board of Directors reviews such reportable segments on a regular basis in order to decide allocationsof managerial resources and evaluate business performance.
The Group establishes divisions by type of product and service, and each division draws up their comprehensive strategy on the
products sold and services performed in domestic and overseas market.
Products and services of main business on each segment are as follows:(1) Infrastructure
Optical fiber, optical fiber cable, metal communication cable, optical components, semiconductor optical devices, opticalfiber fusion splicer, industrial lasers, network equipment, CATV system, radio products, power transmission cable andconnecting components, industrial wire, transmission components, etc.
(2) Electronics & Automotive Systems
Automotive components (wire harness, steering roll connector, battery state sensor, perimeter monitoring radar, etc.),
automotive batteries / batteries for industrial use, copper/aluminum wires, magnet wires, copper and copper alloy products,
functional surface products (plating), processed products for electronic parts, special metal materials (shape-memory/superelastic alloys), etc.
(3) Functional Products
Cable conduits, foaming products, UV tapes for semiconductor manufacturing, electronic components materials, heatdissipation products, hard disc drive (HDD) aluminum blank materials, electrodeposited copper foils, etc.
(4) Service and Development, etc.
Supporting service for each business of the Group such as hydraulic power generation, driving of R&D for new products,
and real-estate leasing
2. Method for calculating net sales, income or loss, assets and other items by reportable segment
Segment profit (loss) is based on operating profit.
In addition, intersegment sales or transfers are based mainly on market prices.
As stated in “Notes—Changes in Accounting Policies,” UACJ Corporation, an equity-method associate of the Company, has
adopted International Financial Reporting Standards (IFRS) from the beginning of the fiscal year ended March 31, 2024. As thechanges in accounting policies due to this adoption have been applied retrospectively, the segment information for the fiscal year
ended March 31, 2023 is presented after the retrospective application. As a result of this change, the amount of “Investments inentities accounted for using equity method” of “Services, Development, etc.” for the previous fiscal year is ¥1,367 million lower
than that prior to the retrospective application, and consequently, segment assets decreased by the same amount.

168

3. Information on net sales, income or loss, assets and other items for each reportable segment as of March 31, 2023 and 2024
Fiscal year ended March 31, 2023
Millions of yen

Infrastructure

For the fiscal year ended March 31, 2023
Reportable segments
Electronics &Service andFunctional
Automotive
Development,
Total
Products
Systemsetc.

Adjustment
Total (Note 2)(Notes 1, 3, 4, 5)

Net sales
Net sales to external customers ¥

320,080

Inter-segment sales or transfers

3,827

Total
Segment profit (loss)¥

599,496¥

120,289

10,850¥6,191

26,459¥5,275

1,066,326¥

26,146– ¥¥323,908¥

610,347¥

126,481¥

31,735¥

1,092,472¥(26,146) ¥

¥

8,609

¥

4,694

¥

4,179

¥

(2,109) ¥15,374¥66 ¥Segment assets

1,066,326(26,146)–
1,066,326
15,441

296,652

364,255

96,213

120,615877,737

55,732

933,469

12,341

16,575

5,896

1,427

36,2402,857

39,098

–

–

16

341

358

–

358

10,776

7,591

12,52462,037

92,929–92,92912,921

17,822

5,997

4,351

41,094

2,698

43,792OthersDepreciation
Amortization of goodwill
Investments in entities
accounted for using equity
methodIncrease in property, plant andequipment and intangible
assets
Notes:

1. Adjustment of ¥66 million for segment profit (loss) includes mainly elimination of unrealized profit.
2. Segment profit (loss) is adjusted with operating profit in the consolidated statements of income.
3. Adjustment of ¥55,732 million for segment assets includes corporate assets of ¥63,176 million, which are not allocated to each reportablesegment and offsetting elimination of receivables and payables of negative ¥7,443 million.
4. Adjustment of ¥2,857 million for depreciation includes depreciation relating to corporate assets.
5. Adjustment of ¥2,698 million for increase in property, plant and equipment and intangible assets includes increase in corporate property,
plant and equipment and intangible assets.

Fiscal year ended March 31, 2024
Millions of yen

Infrastructure

For the fiscal year ended March 31, 2024
Reportable segments
Electronics &Service andFunctional
Automotive
Development,
Total
Products
Systemsetc.

Adjustment
Total (Note 2)(Notes 1, 3, 4, 5)

Net sales
Net sales to external customers ¥274,455

Inter-segment sales or transfers

3,729

Total
Segment profit (loss)
Segment assets¥

644,084¥

110,983

9,616

¥

4,439

27,004¥ 1,056,528

4,570

22,355¥ 1,078,884¥– ¥1,056,528(22,355)–¥

278,184¥

653,700¥

115,423¥

31,575¥(22,355) ¥1,056,528¥(11,252) ¥18,702

¥

5,509

¥

(1,904) ¥11,055¥116 ¥

11,171

293,322

380,982

119,404

112,059

905,769

79,238985,007

12,762

16,034

5,570

1,514

35,882

3,069

38,951

–

–

16

143

160

–

160

11,226

5,888

15,82868,991

101,935–

101,935

9,757

15,523

9,117

1,898

36,297

2,655

38,953

OthersDepreciation
Amortization of goodwill
Investments in entities
accounted for using equity
methodIncrease in property, plant andequipment and intangible
assets
Notes:

1. Adjustment of ¥116 million for segment profit (loss) includes mainly elimination of unrealized profit.
2. Segment profit (loss) is adjusted with operating profit in the consolidated statements of income.
3. Adjustment of ¥79,238 million for segment assets includes corporate assets of ¥80,252 million, which are not allocated to eachreportable segment and offsetting elimination of receivables and payables of negative ¥1,014 million.
4. Adjustment of ¥3,069 million for depreciation includes depreciation relating to corporate assets.
5. Adjustment of ¥2,655 million for increase in property, plant and equipment and intangible assets includes increase in corporate
property, plant and equipment and intangible assets.

169

Information on reportable segments
Fiscal year ended March 31, 2023
1. Information for each product or service
This information is omitted as the same information is presented in “Segment information.”
2. Information for each region(1) Net sales
Millions of yen
Japan¥517,358

Asia(excluding China)¥224,931

For the fiscal year ended March 31, 2023
North and Central
China
America¥127,793¥104,326

Other

Total

¥91,915¥1,066,326

Note: Net sales are classified by country or region based on the location of customers.

(2) Property, plant and equipment
Millions of yen
As of March 31, 2023
Japan

Asia

America

Other

Total

¥141,416¥76,739¥38,902¥12,230¥269,288

3. Information for each of main customers
This information is omitted because no external customer accounts for 10 or more of net sales in the consolidated statement ofincome.
Fiscal year ended March 31, 2024
1. Information for each product or service
This information is omitted as the same information is presented in “Segment information.”
2. Information for each region(1) Net sales
Millions of yen
Japan¥511,296

Asia(excluding China)¥242,820

For the fiscal year ended March 31, 2024
North and Central
China
America¥120,569¥103,443

Other

Total

¥78,400¥1,056,528

Note: Net sales are classified by country or region based on the location of customers.

(2) Property, plant and equipment
Millions of yen
As of March 31, 2024
Japan

Asia

¥148,051¥78,550

America¥37,910

Other

Total

¥14,127¥278,640

3. Information for each of main customers
This information is omitted because no external customer accounts for 10 or more of net sales in the consolidated statement ofincome.

170

Information on impairment losses on non-current assets for each reportable segment
Fiscal year ended March 31, 2023
Millions of yen
For the fiscal year ended March 31, 2023

Impairment loss

Reportable segments
Electronics &Service andFunctional
Infrastructure Automotive
Development, Subtotal
Products
Systems
etc.
¥
224 ¥
177 ¥
– ¥
– ¥
402

Adjustments
¥

–

Total
¥

402

Fiscal year ended March 31, 2024
Millions of yen
For the fiscal year ended March 31, 2024

Impairment loss

Reportable segments
Electronics &Service andFunctional
Infrastructure Automotive
Development, Subtotal
Products
Systems
etc.
¥
179 ¥
5 ¥
– ¥
– ¥
184

Adjustments
¥

–

Total
¥

184

Information on amortized and unamortized balances of goodwill for each reportable segment
Fiscal year ended March 31, 2023
Millions of yen
For the fiscal year ended March 31, 2023

Depreciation/Amortization
for the year
Balance at end of year

Reportable segments
Electronics &Service andFunctional
Infrastructure Automotive
Development,
Products
Systems
etc.
¥

–

¥

–

–

¥

16

–

¥

67

Subtotal

341 ¥

358

144

211

Adjustments
¥

–

Total
¥

–

358
211

Fiscal year ended March 31, 2024
Millions of yen
For the fiscal year ended March 31, 2024

Depreciation/Amortization
for the year
Balance at end of year

Reportable segments
Electronics &Service andFunctional
Infrastructure Automotive
Development,
Products
Systems
etc.
¥

–
–

¥

–

¥

16

–

50

Information on gain on bargain purchase for each reportable segment
Fiscal year ended March 31, 2023
Not applicable.
Fiscal year ended March 31, 2024
Not applicable.

171¥

Subtotal

143 ¥

160

0

50

Adjustments
¥

–
–

Total
¥

160
50

Related parties
1. Related party transactions
Fiscal year ended March 31, 2023
(1) Transactions between the Company filing consolidated financial statements and related parties(a) Officers and major shareholders (limited to individuals) of the Company filing consolidated financial statements
None.
(b) Unconsolidated subsidiaries and associates of the Company filing consolidated financial statements
None.
(2) Transactions between the Company filing consolidated financial statements and its consolidated subsidiaries and associates
Officers and major shareholders (limited to individuals) of the Company filing consolidated financial statements
None.
Fiscal year ended March 31,2024(1) Transactions between the Company filing consolidated financial statements and related parties(a) Officers and major shareholders (limited to individuals) of the Company filing consolidated financial statements
None.
(b) Unconsolidated subsidiaries and associates of the Company filing consolidated financial statements
None.
(2) Transactions between the Company filing consolidated financial statements and its consolidated subsidiaries and associates
Officers and major shareholders (limited to individuals) of the Company filing consolidated financial statements
None.

172

2. Information on the parent company and significant associates(1) Parent company information
Not applicable.
(2) Summarized financial information of significant associates
The summarized financial information of significant associates, UACJ Corporation and Asia Vital Components
Co., Ltd. as of March 31, 2023 and 2024 is as follows:
UACJ Corporation:

Millions of yen
2023

Total current assets

¥

2024

437,650¥

431,188

Total non-current assets

458,081483,242

Total current liabilities

371,617359,284

Total non-current liabilities

256,127

253,100

Total net assets

267,987

302,046

Net sales

955,717892,781

Profit before income taxes

1,699

21,969Profit attributable to owners of parent(1,315)

13,858Asia Vital Components Co., Ltd.:

Millions of yen
2023

Total current assets¥

196,9542024¥

253,601

Total non-current assets

64,89777,500Total current liabilities

142,369

170,169

Total non-current liabilities

44,04041,519Total net assets

75,441

119,413

Net sales

246,943

267,025

Profit before income taxes

28,60536,201

Profit attributable to owners of parent

18,34823,929173

Per share information
Yen

Net assets per share

For the fiscal year
ended March 31,2023

For the fiscal year
ended March 31,
2024

¥

¥

4,285.15

Basic earnings per share

225.804,656.93
92.40

Notes: 1. Diluted earnings per share is not presented because there are no dilutive potential shares.
2. The Company’s shares held by the Trust Account for the Stock Benefit Trust (BBT) are included in treasury shares, which are deductedfrom the number of shares at end of year and the average number of shares during the year, in the calculation of net assets per share andbasic earnings per share. The number of such treasury shares excluded from the calculation of net assets per share and basic earnings per
share and the average number of shares during the year were 203,700 shares and 206,650 shares, respectively, for the fiscal year ended
March 31, 2023, and 139,300 shares and 155,400 shares, respectively, for the fiscal year ended March 31, 2024.
3. As stated in “Notes—Changes in Accounting Policies,” UACJ Corporation, an equity-method associate of the Company, has adopted
International Financial Reporting Standards (IFRS) from the beginning of the fiscal year ended March 31, 2024. As the changes inaccounting policies due to this adoption have been applied retrospectively, the per-share information for the fiscal year ended March 31,
2023 is presented after the retrospective application. As a result of this change, the amounts of “Net assets per share” and of “Basicearnings per share” for the previous fiscal year is ¥26.92 and ¥28.65 lower compared to the amounts prior to the retrospective application.
4. Basis for calculation of basic earnings per share is as follows.
Millions of yen
For the fiscal year
For the fiscal year
ended March 31,
ended March 31,
2023
2024
Profit attributable to owners of parent¥

15,894

Profit not attributable to common shareholders
Profit attributable to common shareholders of parent

¥

6,508

－

－

15,894

6,508

Thousand shares
For the fiscal year
For the fiscal year
ended March 31,
ended March 31,
2023
2024
70,39270,442Average number of shares of common stock during the year
5. Basis for calculation of net assets per share

Millions of yen
2023

Total net assets

¥

2024

329,095¥

358,038

Deduction from total net assets

27,442

29,916[of which non-controlling interests][27,442][29,916]

Net assets applicable to common stock at end of year¥

301,652¥

328,121

Thousand shares
2023
Number of shares of commons stock at end of year used for the calculation of net assets
per share

174

70,3942024
70,458Significant subsequent events
Sale of shares in an equity-method associate
The Company sold part of shares of UACJ Corporation (UACJ), its equity-method associate. As a result of the sale of shares,
UACJ will no longer be the Company’s equity-method associate from the fiscal year ending March 31, 2025.
1. Purpose
Under the Medium-term Management Plan “Road to the Vision 2030 - Transform and Challenge” released in May 2022, theCompany has been focusing on improving the efficiency of management resources while being conscious of cost of capital,
and working on increasing the efficiency of funds and assets. As a result of examining the Company’s holding of shares in
UACJ to this end, the Company executed the sale based on a judgment that the sale is consistent with its financial strategy and
the Group strategy.
2. Method of the sale of shares
Sold to a securities firm
3. Schedule of the sale(1) June 10, 2024: Contract date for the sale of shares(2) June 12, 2024: Share delivery date
4. Name, business outline of the associate to be transferred and business relationship with the Company(1) Name
UACJ Corporation(2) Business outline

Manufacture and sale of rolling products, casting products, forgedproducts and precision-machined products of nonferrous metals,
including aluminum and alloys thereof.

(3) Business relationship with theCompany

The Company supplies part of raw materials to and purchases some
raw materials from the said associate and is commissioned todeliver some services. The Company also rents out/leases realestates and facilities.

5. Number of shares sold, gain (loss) on sale and shareholding ratio after the sale(1) Number of shares sold2,600,000 shares(2) Gain (loss) on sale

Approx. ¥6.0 billion (non-consolidated)
Approx. ¥(1.2) billion (consolidated)(3) Shareholding ratio after the sale

19.75%

175

(v) Consolidated supplementary schedules
Schedule of corporate bonds

Issuing company

Name of bondIssue date

The Company

46th Unsecured Bond

July 15, 2016

The Company

47th Unsecured Bond

July 14, 2017

The Company

48th Unsecured Bond

The Company
Total(Millions of yen, unless otherwise stated)
Balance atInterest
Balance at
beginning ofrate Security Redemption dateend of year
year
(%)
¥

10,0000.43

NoneJuly 15, 2026

10,00010,0000.53

NoneJuly 14, 2027

July 25, 201910,00010,0000.44

NoneJuly 25, 2029

49th Unsecured Bond

September 16, 2021

10,00010,0000.30

None

September 16, 2031––

40,000–––¥10,000¥40,000¥Note: Scheduled repayment amounts within five years of the consolidated balance sheet date are as follows:

Over 1 year to
2 years

Within 1 year–

Over 2 years to
3 years¥10,000–

Over 3 years to
4 years¥10,000(Millions of yen)Over 4 years to
5 years–

Schedule of borrowings and other debts(Millions of yen, unless otherwise stated)
Balance at
Average interest
Payment due
end of year
rate (%)

Balance at
beginning of year
Short-term borrowings¥

112,821¥110,762

4.5–

Commercial papers

28,00035,5000.0–

Current portion of long-term borrowings

28,45926,6092.2–

Current portion of lease obligations

113

113

–

–

Current portion of lease liabilities

2,526

3,259

3.9

–

114,547

120,168

1.3

2025–2031

Lease obligations (excluding current portion)

401

388

–

2025–2031

Lease liabilities (excluding current portion)

12,146

12,1284.0

2025–2049

308,930––

Long-term borrowings (excluding current portion)

¥

Total

299,016¥

Notes: 1. Average interest rate is based on the interest rate and balance at end of year.
2. Average interest rate of lease obligations is not stated because lease obligations are recorded in the consolidated balance sheet at theamount before deducting the amount equivalent to interest included in total lease payments.
3. The scheduled repayment amounts of long-term borrowings, lease obligations, and lease liabilities (excluding current portion) within 5
years from the consolidated balance sheet date are as follows:

Over 1 year to
2 years
Long-term borrowings¥

33,497

Over 2 years to
3 years¥

19,770(Millions of yen)Over 3 years toOver 4 years to
4 years
5 years¥

18,100¥26,000

Lease obligations

106

83

74

57

Lease liabilities

2,275

1,684

1,469

1,110

Schedule of asset retirement obligations
This information is omitted as the beginning and ending balances of asset retirement obligations for the fiscal year ended
March 31, 2024 were one percent or less of the total beginning and ending balances of liabilities and net assets of the fiscal
year.

176

(2) Other information
Quarterly information of the fiscal year ended March 31, 2024

(Millions of yen, unless otherwise stated)(Cumulative period)
Net sales

Q1
¥

Q2

246,414

Profit before income taxes¥

Q3

503,110¥

Fiscal year

765,299¥

1,056,528

815

(91)

(210)

20,064

Profit attributable to owners of parent(1,708)(4,146)(6,525)

6,508

Basic earnings per share (Yen)(24.27)(58.88)(92.65)92.40(Accounting period)
Basic earnings (loss) per share (Yen)

Q1
¥

Q2

(24.27)177¥(34.61)

Q3¥(33.76)

Q4¥

184.992.

Non-consolidated Financial Statements, etc.

(1) Non-consolidated financial statements(i) Balance sheets(Millions of yen)

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

178

Previous fiscal year
(as of March 31, 2023)

Current fiscal year
(as of March 31, 2024)

6,850

3,797

*1 922*1, *3 356

9,433

11,767*1 96,514*1 111,610

4,294–
10,265
17,205
14,759*1 1,612*1 84,562*1 21,831
1,302
(17)
269,540

4,888
1,465
14,197
20,560
16,546*1 1,189*1 80,278*1
36,4472,742(23)
305,827

32,384
3,763
22,048149
3,181
12,01357
11,94585,54438,0493,984
22,617
127
3,416
11,961
90
10,27090,51812,438243
12,681

11,788214
12,00224,804
95,31844,89924,814
91,95642,056

68,72876,3026,245
5,081*1 5,184(24,259)
226,003324,228
593,768

6,692
3,964
*1 5,478(27,167)
224,098
326,619
632,447

Previous fiscal year
(as of March 31, 2023)
Liabilities
Current liabilities
Notes payable - trade
Electronically recorded obligations - operating
Accounts payable - trade
Short-term borrowings
Commercial papers
Accounts payable - otherAccrued expenses
Contract liabilities
Provision for product warranties
Provision for environmental measures
Provision for loss on construction contracts
Income taxes payable
Other
Total current liabilities
Non-current liabilities
Bonds payable
Long-term borrowings
Provision for retirement benefits
Provision for environmental measures
Provision for loss on business of subsidiaries andassociates
Provision for share awards for directors and otherofficers
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Other capital surplus
Total capital surplus
Retained earnings
Legal retained earnings
Other retained earnings
Retained earnings brought forward
Total retained earnings
Treasury shares
Total shareholders’ equity
Valuation and translation adjustments
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Total valuation and translation adjustments
Total net assets

941–*1 76,939*1 71,307
28,000*1 11,487*1 17,167
1,747
387
6
397
2,539
4,118
215,041

Total liabilities and net assets

179(Millions of yen)
Current fiscal year
(as of March 31, 2024)*3 156*1 16,224*1 76,171*1 73,913

35,500*1 15,255*1 17,294

5,556
387
–
211
–
5,425
246,096

40,000107,000
18,4949,280

40,000112,500
20,844
9,223

492

2,960

452

380

500

500

*1 662*1 730176,881
391,922

187,138
433,235

69,39569,395

21,466
21,466

21,466
21,466

3,919
98,763
98,763
102,682(829)
192,715

4,484
94,462
94,462
98,946(648)
189,159

9,179
(48)
9,130
201,845

9,718
333
10,052
199,212593,768

632,447

(ii) Statements of income
Previous fiscal year
(From April 1, 2022
to March 31, 2023)*2 305,835

Net sales(Millions of yen)
Current fiscal year
(From April 1, 2023
to March 31, 2024)*2 296,766

Cost of sales*2 264,176

Gross profit

41,65836,494*1 43,420*1 45,581(1,761)(9,087)

Interest income*2 2,823*2 4,419

Dividend income*2 11,318*2 10,721

Selling, general and administrative expenses
Operating profit (loss)*2 260,271

Non-operating income

Foreign exchange gains

608

–

Other

357

1,636

15,108

16,778*2 1,868*2 2,701

Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses

–

117

2,003

4,235

789

306

4,660

7,360

8,686

330

Gain on disposal of non-current assets*2 432*2 473Gain on sale of shares of subsidiaries and associates

17,854

7,742

Gain on sale of investment securities

3,958

3,273

820

0

23,065

11,489524

713

Provision for loss on business of subsidiaries and associates

–

2,524

Loss on valuation of shares of subsidiaries and associates

327

4,576

Loss on valuation of investment securities

–

771

Other

73

260

Total extraordinary losses

925

8,845

Profit before income taxes

30,826

2,974

Income taxes - current

5,351

351

Income taxes - deferred

239

709

Total income taxes

5,590

1,061

Profit (loss)

25,235

1,913

Provision of allowance for doubtful accounts
Other
Total non-operating expenses
Ordinary profit
Extraordinary income

Other
Total extraordinary income
Extraordinary losses
Loss on disposal of non-current assets

180

(iii) Statements of changes in equity
Previous fiscal year (From April 1, 2022 to March 31, 2023)(Millions of yen)
Shareholders’ equity
Capital surplus

Balance at beginning of period

Retained earnings

Share capital

Other capitalsurplus

Total capitalsurplus

Legal retained
earnings

69,395

21,466

21,466

3,495

Other retained
earnings
Total retained
Retainedearnings
earnings
brought forward
78,18881,684(4,237)(4,237)(423)–

25,23525,235

Changes during period
Dividends of surplus
Provision of legal retained
earnings
Profit423

Purchase of treasury shares
Disposal of treasury shares
Net changes in items other thanshareholders’ equity
Total changes during period
Balance at end of period

(0)

(0)

–

(0)

(0)

423

20,57420,99869,395

21,466

21,466

3,919

98,763

102,682

Valuation and translation adjustments

Shareholders’ equity
TreasurysharesBalance at beginning of period

(860)

Total
shareholders’equityValuationdifference on
available-forsale securities

171,685

10,833

Deferred gains Total valuation Total net assets
or losses on and translation
adjustments
hedges996

11,829183,515

Changes during period
Dividends of surplus
Provision of legal retained
earnings
Profit(4,237)(4,237)––

25,23525,235Purchase of treasury shares

(1)

(1)

(1)

Disposal of treasury shares
Net changes in items otherthan shareholders’ equity
Total changes during period

33

33

33

Balance at end of period(1,654)(1,044)(2,698)(2,698)31

21,029(1,654)(1,044)(2,698)18,330(829)

192,715

9,179

(48)

9,130

201,845181

Current fiscal year (From April 1, 2023 to March 31, 2024)(Millions of yen)
Shareholders’ equity
Capital surplus

Balance at beginning of period

Retained earnings

Share capital

Other capitalsurplus

Total capitalsurplus69,395

21,466

21,466

Other retained
earnings
Legal retained
Total retained
Retainedearnings
earnings
earnings
brought forward
3,919
98,763
102,682

Changes during period
Dividends of surplus
Provision of legal retained
earnings

564

Profit(5,649)(5,649)

(564)

–

1,913

1,913

Purchase of treasury shares
Disposal of treasury shares
Net changes in items other thanshareholders’ equity
Total changes during period
Balance at end of period

–

–

–

564

(4,301)(3,736)

69,395

21,466

21,466

4,484

94,462

98,946

Valuation and translation adjustments

Shareholders’ equity
TreasurysharesBalance at beginning of period

(829)

Total
shareholders’equity192,715

Valuationdifference on
available-forsale securities
9,179

Deferred gains Total valuation Total net assets
or losses on and translation
adjustments
hedges(48)

9,130

201,845

Changes during period
Dividends of surplus
Provision of legal retained
earnings(5,649)(5,649)––Profit

1,913

1,913

Purchase of treasury shares

(0)

(0)

(0)

Disposal of treasury shares
Net changes in items otherthan shareholders’ equity

180

180

180
539

382

921

921

Total changes during period

180(3,555)

539

382

921

(2,633)

Balance at end of period(648)

189,159

9,718

333

10,052

199,212182

Notes to Non-consolidated Financial Statements
Significant accounting policies
1. Valuation basis and method for securities(1) Held-to-maturity debt securities
Stated at amortized cost.
(2) Shares of subsidiaries and associates
Stated at cost using the moving average method.
(3) Available-for-sale securities
Securities other than equity securities, etc. that do not have a quoted market price:
Stated at fair value (with any unrealized gain or loss being recognized directly in net assets and the cost of securities soldbeing determined using the moving-average method).
Equity securities, etc. that do not have a quoted market price in an active market:
Stated at cost using the moving-average method.
2.

Valuation basis and method for derivatives
Stated at fair value.

3.

Valuation basis and method for inventories
Stated at cost determined mainly using the weighted average method (with the amount of inventories in the non-consolidatedbalance sheets being written down based on a decrease in profitability).

4. Depreciation method for non-current assets(1) Property, plant and equipment (excluding leased assets)
Depreciated on a straight-line basis.
(2) Intangible assets (excluding leased assets)
Amortized on a straight-line basis.
Software for internal use is amortized on a straight-line basis over the estimated useful life as internally determined (5 to 10
years).
(3) Leased assets (leased assets in finance lease transactions that do not transfer ownership)
Depreciated on a straight-line basis using the lease term as the useful life and with zero residual value.
5.

Accounting for deferred assets
Bond issuance costs
The full amount is expensed when incurred.

6. Accounting for provision(1) Allowance for doubtful accounts
To provide for possible bad debt losses on monetary receivables, allowance for doubtful accounts is provided for the estimateduncollectible amount based on the historical bad debt loss ratio for general receivables and on an individual assessment ofcollectability for specific receivables such as doubtful receivables.
(2) Provision for product warranties
Provision for product warranties is provided at an amount deemed necessary to cover possible compensation costs.
(3) Provision for environmental measures
Provision for environmental measures, mainly to remove Poly Chlorinated Biphenyl (PCB) and to improve soil conservation,is provided to cover estimated future costs.
(4) Provision for loss on construction contracts
To provide for losses on construction projects, the Company recognizes estimated losses in the following fiscal year andthereafter on construction projects that have not been delivered as of the end of the current fiscal year and for which losses are
expected to incur and the amount of such losses can be reasonably estimated as of the end of the current fiscal year.
(5) Provision for retirement benefits183

To provide for retirement benefits for employees, the Company recognizes estimated amount that is deemed to be incurred as ofthe end of the current fiscal year based on the estimated amounts of retirement benefit obligations and pension assets as of theend of the current fiscal year.
(i) Method of attributing estimated retirement benefits to accounting periods
In calculating retirement benefit obligations, the benefit formula basis is used to attribute the estimated amount of retirement
benefits to periods up to the end of the current fiscal year.
(ii) Method of accounting for actuarial gains and losses
Actuarial gains and losses are amortized in the year following the year in which the gains and losses are recognized primarily
by the straight-line method over periods (10 years), which are shorter than the average remaining years of service of theemployees.
(6) Provision for loss on business of subsidiaries and associates
To provide for expected losses associated with business engaged by subsidiaries and associates, the Company recognizes theamount of deficiency of net assets that exceeds the amount of allowance for doubtful accounts provided for the relevant
subsidiaries and associated in consideration of their financial situation.
(7) Provision for share awards for directors and other officers
To provide for award of the Company’s shares to Directors, etc. of the Company in accordance with the Stock Benefit
Regulations for Directors, etc., the Company recognizes estimated amount of share awards obligation as of the end of the current
fiscal year.
7. Accounting policy for revenues and expenses
The details of the main performance obligations in the major businesses related to revenue from contracts with the customers of theCompany and the timing at which the Company typically satisfies these performance obligations (when it typically recognizes
revenue) are as follows:(1) Manufacture and sale of products
The main business of the Company is the manufacture and sale of infrastructure products, such as information andtelecommunications network components and power cables, electrical and electronics products such as automobile parts andcopper products for electronic equipment materials, and functional products processed from resin and nonferrous metals.
The Company has determined that its main performance obligation is to deliver finished products to customer. The Company
has comprehensively determined that legal title to the asset, the significant risks and rewards of ownership of the assets, transferof physical possession of the assets, and the right to receive payment of consideration for the asset shall arise at the time ofdelivery of the product to the customer. For domestic transactions, control over products is transferred to customer at the time ofdelivery of the product to the customer, and a performance obligation is considered to have been satisfied. However, since theperiod from the date of shipment of the product to the date of delivery is a normal period of time, the Company recognizes
revenue when the product is shipped based on its significance as selecting the alternative treatment. For trade transactions, theCompany recognizes revenue when the risk-bearing is transferred to customer, mainly based on the terms of trade stipulated by
Incoterms and other agreements.
For buy-sell transaction, no inventories are recognized because the Company does not obtain control over raw materials andother products, but only record the net amount equivalent to the processing fees as sales. The Company deducts the amount of
the consideration to be paid to customer, such as volume discount and sales incentive, from the transaction price, unless such aconsideration to be received from the customer is related to distinct goods or services received from the customers.
(2) Maintenance services
The Company provides chargeable maintenance support services after sales of products, in mainly the Infrastructure business.
For maintenance services, the Company has determined that it has a performance obligation to always have the services available
and on standby so that customer can utilize the maintenance services when the customer desires throughout the performance
period. The Company recognizes revenue at the percentage of time elapsed to the period in which the services are to be provided
because the maintenance services are identified as distinct performance obligations and are performed over a certain period oftime, including standby status period.
(3) Construction contract
The Company performs construction works, such as design, construction, installation, and other work based on contracts withcustomer in the Infrastructure business. Since the Company transfers control over underlying goods and services over time andsatisfies a performance obligation, it recognizes revenue over time. Measuring progress towards satisfaction of a performanceobligation is based on the proportion that the cost incurred by the end of each reporting period to the total expected costs incurred(input method). In cases where the Company may not be able to reasonably measure the outcome of a performance obligation,but expects to recover the costs incurred in satisfying the performance obligation, the Company recognizes revenue only to theextent of the costs incurred until such time that it can reasonably measure the outcome of the performance obligation. For
construction contracts with short durations, the Company recognizes revenue at the point of time when a performance obligation
is fully satisfied.
(4) Transactions entered into as an agent
The Company does not manufacture products and only makes transactions of procurement arrangements on behalf of its
184

customers. If the Company does not control products before transferring it to customer, revenue is recognized on the net amountreceived from the customer less the amount paid to supplier. The following are considered in determining whether the Company
controls over products or services before these are provided to customer.
(a) Its primary responsibility for the performance of its promise to provide goods or services(b) The inventory risk before goods or services are provided to customer or after control has been transferred to customer(c) Discretion in establishing the price of goods or services.
The payment after satisfying the Company’s performance obligation does not include any significant financing component since thepayment will be made generally within one year from that time when such a satisfaction.
8. Accounting policy for translating assets and liabilities denominated in foreign currency into Japanese yen
Monetary receivables and payables denominated in foreign currency are translated into Japanese yen at the spot exchange rate on
the balance sheet date, and exchange differences are accounted for as profit or loss.
9. Hedge accounting(1) Hedge accounting method
Deferred hedge accounting is applied. Assignment accounting (special treatment for foreign exchange forward contracts) isapplied to currency and interest rate swap transactions, and special treatment is applied to interest rate swaps, if they meet therequirements.
(2) Hedging instruments and the hedged items
Interest rate swap: borrowings
Currency swap: borrowings
Foreign exchange forward contracts: Receivables and payables denominated in foreign currency, etc.
Metal forward contracts: Raw materials and work in process(3) Hedging policy
The Company hedges its borrowing obligations and definitive trading contracts and the like to avoid risks associated withfluctuations in interest rates, foreign exchange rates, and raw material prices.
(4) Assessments of hedge effectiveness
Cumulative market fluctuations or cash flow fluctuations of hedged items are compared with cumulative market fluctuations or
cash flow fluctuations of hedging instruments, and effectiveness is determined based on the amounts of fluctuation of both,
excluding the portion not attributable to the basic value of price.

185

10. Accounting for retirement benefits
The method of accounting for unrecognized actuarial gains or losses for retirement benefits differs from that used toprepare the consolidated financial statements.
11. Group tax sharing system
The Company applies the group tax sharing system.
Significant accounting estimates
1.

Recoverability of deferred tax assets(i) Amount recorded in non-consolidated financial statements as of March 31, 2023 and 2024
Millions of yen
2023
Deferred tax assets

¥

2024

5,081

¥

3,964

(ii) Details of significant accounting estimates of recognized items
The description is omitted as the same information is disclosed in “Notes to Consolidated Financial Statements,
Significant accounting estimates, 1. Recoverability of deferred tax assets.”2.

Impairment of non-current assets(i) Amount recorded in non-consolidated financial statements as of March 31, 2023 and 2024
Millions of yen
2023
Property, plant and equipment and intangible assets(total amount reported on balance sheets)of which asset group included in (ii) below

¥

2024

98,225¥102,521

10,865

9,242(ii) Details of significant accounting estimates of recognized items
The description is omitted as the same information is disclosed in “Notes to Consolidated Financial Statements,
Significant accounting estimates, 2. Impairment of non-current assets.”
Additional information
Board Benefit Trust (BBT)The description is omitted as the same information is disclosed in “Notes to Consolidated Financial Statements, Additional
information.”
Balance sheets*1.

Assets and liabilities associated with subsidiaries and associates as of March 31, 2023 and 2024
Other than separately presented items, the following amounts are included in each of the items below.
Millions of yen
2023

Short-term monetary claims¥

Long-term monetary claims
Short-term monetary obligations
Long-term monetary obligations

186

2024

137,073¥

155,2540

5465,945070,7030*2. Contingent obligations(1) Guarantee obligation as of March 31, 2023 and 2024
Millions of yen
Debt guarantees for borrowings from financial institutions[of which guaranteed by the Company]
Debt guarantees for lease transactions
Debt guarantees for bonds related to construction¥

2023
69,846[53,356]
1,553
1,026

¥

2024
69,817[56,794]
1,789
1,150

(2) Repurchase obligation of the securitization of receivables as of March 31, 2023 and 2024
Millions of yen
2023
Repurchase obligation of the securitization of receivables

¥

2024
5,141

¥

4,737

(3) Other(i) The Company is now negotiating compensations for damage with a part of automobile manufacturers in connection withthe violation of the Competition Act by automobile wire harness cartels.
(ii) The Company has made a provision for repair costs that can be reasonably estimated at this time for a defect that has
occurred in part of the products for a large electric power project delivered by the Company in the past. The cause andscope of the defect are currently under investigation, and depending on the results of the investigation, additional repair
costs may be incurred; however, it is difficult to make a reasonable estimate of the impact at this time.
*3.

Accounting for notes maturing at the consolidated balance sheet date
As the last day of the current fiscal year was a bank holiday, the notes were treated as if they were settled on the maturity date.
The notes matured at the end of the current fiscal year are as follows.
Millions of yen
2023

Notes receivable
Notes payable

¥

2024
–
–

¥

9
30

Statements of income*1. Selling, general and administrative expenses
The composition rates of selling expenses and general and administrative expenses were 22.3% versus 77.7% for the previous fiscal
year and 19.6% versus 80.4% for the current fiscal year.
The main components of selling, general and administrative expenses for the fiscal years ended March 31, 2023 and 2024 were as
follows:

Packing and transportation costs

Millions of yen
For the fiscal year
For the fiscal year
ended March 31,
ended March 31,
2023
2024
¥
8,489
¥
7,659

Salaries and allowances and welfare expenses

11,287

11,561

Research and development costs
Outsourcing expenses

8,735
4,460

9,943
5,525

187

*2. Transactions with subsidiaries and associates
Transactions with subsidiaries and associates for the fiscal years ended March 31, 2023 and 2024 were as follows:
Millions of yen
For the fiscal year
For the fiscal year
ended March 31,
ended March 31,
2023
2024
Amount of operating transactions
Net sales¥

Purchases
Amount of non-operating transactions

127,594¥

123,451

224,881
13,264239,460
14,666

Securities
Shares of subsidiaries and associates as of March 31, 2023
Millions of yen
Classification

2023
Carrying amount

Shares of subsidiaries¥

Fair value

1,247

Shares of associates¥

22,21927,291

Total¥

Difference¥

71,391

28,539¥93,611

20,97244,099¥65,072

Shares of subsidiaries and associates as of March 31, 2024
Millions of yen
Classification

2024
Carrying amount

Shares of subsidiaries

¥

1,247

Shares of associates
Total

Fair value¥

26,911¥

22,034

Difference¥

188,246

28,158¥210,280

20,786
161,335¥

182,122

Note: Carrying amounts of shares, etc. without a quoted market price that are not included in the shares above as of March 31, 2023 and 2024
Millions of yen
2023
Shares of subsidiaries¥

2024
63,165¥60,191

Shares of associates

3,613

3,606

Investments in capital

44,92842,085188

Tax effect accounting
1.

Significant components of deferred tax assets and liabilities as of March 31, 2023 and 2024
Millions of yen
2023

2024

Deferred tax assets
Excess amount over limitation of provision for doubtful accounts

¥

7,433

Provision for loss on business of subsidiaries and associates

¥

8,325

150

906

1,375

1,416

Excess amount over limitation of provision for retirement benefits

9,710

10,450Loss on valuation of shares of subsidiaries and associates
Excess amount over limitation of non-current assets depreciation(including impairment losses)
Other

26,726

27,724

3,450

3,341

5,792

5,664

Provisions for bonuses

SubtotalLess valuation allowance for total of future deductible temporary differences,etc.
Total valuation allowance¥

54,639¥¥(40,826)¥(43,852)

Total deferred tax assets¥

13,813¥

13,977¥(4,051)¥(4,289)(40,826)

57,829(43,852)

Deferred tax liabilities
Valuation difference on available-for-sale securities
Other(4,680)(5,723)

Total deferred tax liabilities¥(8,731)¥(10,013)

Deferred tax assets (liabilities), net

¥

5,081

¥

3,964

2. Reconciliation between the normal effective statutory tax rate and the actual effective tax rate after applying tax effectfor the fiscal years ended March 31, 2023 and 2024
2023

2024

Normal effective statutory tax rate

30.6 %

30.6 %

Adjustments:
Expenses not deductible for income tax purposes (e.g. entertainment
expenses)
Tax credits of experimentation and research expenses

1.2 %13.6 %(2.5) %

(35.0) %(9.0) %
(1.6) %

(83.1) %Income not taxable for income tax purposes (e.g. dividends received)
Valuation allowance

109.2 %

Inhabitant tax on per capita basis

0.1 %

1.3 %

Other

(0.7) %

(1.0) %

18.1 %

35.7 %

Actual effective tax rate after applying tax effect accounting

3. Accounting for income taxes and local income taxes or the related tax effects
As the Company applies the group tax sharing system, it accounts for and discloses income taxes and local income taxes or the
related tax effects in accordance with “Practical Solution on the Accounting and Disclosure Under the Group Tax Sharing System”(ASBJ Practical Solution No. 42 issued on August 12, 2021).
Revenue recognition
Notes on the basis for understanding revenue from contracts with customers are omitted as the same information isdisclosed in “Notes to Consolidated Financial Statements, Revenue recognition.”
Significant subsequent events
Sale of shares in an equity-method associate
For details, please refer to the notes to the consolidated financial statements on “Significant subsequent events—Sale of shares inan equity-method associate.”

189

(iv) Non-consolidated supplementary schedules
Schedule of non-current assets(Millions of yen)Classification

Type of asset
Buildings

Property, plant and equipment

Increaseduring period

Decreaseduring period

Depreciation Balance at end Accumulated
during periodof yeardepreciation

¥

¥

¥

¥

110,222

8,479

1,428

2,716

¥

117,273¥

79,224Structures

13,790

615

167

361

14,238

10,254

Machinery andequipment

186,362

6,171

2,319

5,294

190,214167,597

Vehicles

1,687

39

21

60

1,704

1,577

Tools, furniture andfixtures21,553

1,667

657

1,367

22,562

19,145Land

12,013–52–

11,961

–

231

74

138

41

167

77

11,945

15,332

17,007–

10,270–

Leased assets
Construction inprogress
Total property, plantand equipment

Intangible
assets
Notes

Balance at
beginning ofyear

Software¥357,806¥

32,379¥21,792

¥

9,841

¥

368,393¥

277,875¥

17,045

¥

1,553

¥

609

¥

2,201

¥

17,989

¥

6,200

Other

258

Total intangible
assets¥17,303

–
¥

27

1,553

¥

636

1
¥

2,202

231
¥

18,220

16
¥

6,217

1. “Balance at beginning of year” and “Balance at end of year” are stated at cost.
2. Major causes for “Increase during period” of “Construction in progress” are investments in facilities at Mie Works (¥6,605 million),
Chiba Works (¥3,689 million), Nikko Works (¥2,646 million), and Hiratsuka Works (¥1,401 million).
3. Major causes for “Decrease during period” of “Construction at progress” are a transfer to “Buildings” (at Mie Works, Chiba Works,etc.) and transfers to “Machinery and equipment” (at Chiba Works, Nikko Works, etc.)
4. A major cause for “Increase during period” of “Software” is costs related to an enterprise system (¥650 million).

Schedule of allowances and provisions

Line item
Allowance for doubtful accounts

Balance atIncrease
beginning of year
during period¥
24,276¥
4,242

Provision for product warranties
Provision for environmental measures

Decreaseduring period¥
1,328(Millions of yen)
Balance at
end of year¥
27,190

387

–

–

387

9,286

–

63

9,223

397

163

348

211

492

2,524

56

2,960

452

124

196

380

Provision for loss on construction contracts
Provision for loss on business of subsidiaries andassociates
Provision for share awards for directors and otherofficers

190

(2) Details of major assets and liabilities
The description is omitted as the Company prepares the consolidated financial statements.

(3) Other

Not applicable.

191

Item 6. Outline of Share-related Administration of Reporting Company
Fiscal year

From April 1 to March 31

Annual Shareholders Meeting

To be held in June

Record date

March 31

Record dates of dividends of surplus

March 31 and September 30

Number of shares constituting one unit

100 shares

Purchase or additional purchase ofshares of less than one unit
Handling office(Special Account)
Corporate Agency Division, Mizuho Trust & Banking Co., Ltd.
1-3-3 Marunouchi, Chiyoda-ku, Tokyo

Shareholder register administrator(Special Account)
Mizuho Trust & Banking Co., Ltd.
1-3-3 Marunouchi, Chiyoda-ku, Tokyo

Forwarding office–

Purchase or additional purchase fee

Free of charge

Method of public notice

The method of public notice by the Company shall be electronic public notice; provided,
however, that when electronic public notice cannot be used due to an accident or any otherunavoidable reason, the public notices shall be given in The Nihon Keizai Shimbun publishedin Tokyo.

Special benefits for shareholders

Not applicable.

192

Item 7. Reference Information of Reporting Company
1. Information about Parent of Reporting Company
The Company does not have a parent company, etc. as prescribed in Article 24-7, paragraph (1) of the Financial Instruments andExchange Act.

2. Other Reference Information
From the beginning of this fiscal year until the filing date of this Annual Securities Report, the Company filed the following
documents:(1) Annual Securities Report, attached document thereof and Confirmation Letter
For the 201st fiscal year ended March 31, 2023
(from April 1, 2022 to March 31, 2023)(2) Internal Control Report

Filed with the Director-General of the Kanto
Local Finance Bureau on June 21, 2023

For the 201st fiscal year ended March 31, 2023
(from April 1, 2022 to March 31, 2023)(3) Quarterly Securities Reports and Confirmation Letter

Filed with the Director-General of the Kanto
Local Finance Bureau on June 21, 2023

For the first quarter of the 202nd fiscal year ended March 31, 2024
(from April 1, 2023 to June 30, 2023)
For the second quarter of the 202nd fiscal year ended March 31, 2024
(from July 1, 2023 to September 30, 2023)
For the third quarter of the 202nd fiscal year ended March 31, 2024
(from October 1, 2023 to December 31, 2023)(4) Shelf Registration Statements (share certificates, bond certificates, etc.) andattached documents thereof

Filed with the Director-General of the Kanto
Local Finance Bureau on August 8, 2023
Filed with the Director-General of the Kanto
Local Finance Bureau on November 14, 2023
Filed with the Director-General of the Kanto
Local Finance Bureau on February 14, 2024
Filed with the Director-General of the Kanto
Local Finance Bureau on August 10, 2023

(5) Amended Shelf Registration Statements
Filed with the Director-General of the Kanto
Local Finance Bureau on January 24, 2024
(6) Extraordinary Reports
Extraordinary Report pursuant to the provisions of Article 19, paragraph(2), item (ix)-2 of the Cabinet Office Ordinance on Disclosure of
Corporate Affairs (result of the resolution made at the Annual
Shareholders Meeting)
Extraordinary Report pursuant to the provisions of Article 19, paragraph(2), items (xii) of the Cabinet Office Ordinance on Disclosure of
Corporate Affairs (an event which may have significant effects on thefinancial position, operating results and cash flow status of a reporting
company)193

Filed with the Director-General of the Kanto
Local Finance Bureau on June 30, 2023
Filed with the Director-General of the Kanto
Local Finance Bureau on January 24, 2024

Section 2 Information about Reporting Company’s Guarantor, etc.
Not applicable.

194

(TRANSLATION)

INDEPENDENT AUDITOR'S REPORT
June 24, 2024

To the Board of Directors of
Furukawa Electric Co., Ltd.:
Deloitte Touche Tohmatsu LLC
Tokyo office
Designated Engagement Partner,
Certified Public Accountant:
Tsutomu Hirose
Designated Engagement Partner,
Certified Public Accountant:
Takahiro Ikeda
Designated Engagement Partner,
Certified Public Accountant:
Daijiro Furutani<Audit of Consolidated Financial Statements>
OpinionPursuant to the first paragraph of Article 193-2 of the Financial Instruments and Exchange Act, we haveaudited the consolidated financial statements of Furukawa Electric Co., Ltd. and its consolidated
subsidiaries (the "Group") included in the Financial Section, namely, the consolidated balance sheet as ofMarch 31, 2024, and the consolidated statement of income, consolidated statement of comprehensive
income, consolidated statement of changes in equity and consolidated statement of cash flows for the fiscal
year from April 1, 2023 to March 31, 2024, and a summary of significant accounting policies and otherexplanatory information, and the consolidated supplementary schedules.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects,
the consolidated financial position of the Group as of March 31, 2024, and its consolidated financial
performance and its consolidated cash flows for the year then ended in accordance with accounting
principles generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of
the Consolidated Financial Statements section of our report. We are independent of the Group inaccordance with the provisions of the Code of Professional Ethics in Japan, and we have fulfilled our otherethical responsibilities as auditors. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.

-1-Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the consolidated financial statements of the current period. These matters were addressed in thecontext of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.
We had stated that "Assessment of impairment loss recognition regarding fixed assets classified to acertain asset group in the Infrastructure segment " and "Recoverability of deferred tax assets related to theApplicable Group under the Group Tax Sharing System" were identified as key audit matters in our audit of
the consolidated financial statements for the previous fiscal year.
The deterioration of profitability caused by a decline in sales due to difficulties in procuring semiconductors
and a rise in raw material and fuel prices for the previous fiscal year has improved to some extent during
the current year. However, there still is deterioration in profitability for a certain asset group in theCommunications Solutions business for the year ended March 31, 2024, due to the facts that customers
have been keeping the level of their investment low and reducing their excess inventories for a longer
period.
As a result, Furukawa Electric Co., Ltd. (the "Company") has recorded an operating loss in the current
period continuing from the previous year. As the degree of uncertainty regarding the future taxable incomeof the Group still remains high.
Therefore, we identified "Assessment of impairment loss recognition regarding fixed assets classified to acertain asset group in the Communications Solutions business" and "Recoverability of deferred tax assets
related to the Applicable Group under the Group Tax Sharing System" as key audit matters in our audit of
the consolidated financial statements for the current fiscal year.
Assessment of impairment loss recognition regarding fixed assets classified toa certain asset group in the Communications Solutions business
How the Key Audit Matter Was
Addressed in the Audit

Key Audit Matter Description
As of March 31, 2024, tangible fixed assets
balance was 278,640 million yen and intangible
fixed asset balance was 20,284 million. Fixed
assets classified to a certain asset group in theGroup's Communications Solutions business ("theasset group") was 9,242 million yen.
Such fixed assets are depreciated and amortizedconsistently. If any impairment indicators exist, theGroup assesses whether to recognize an
impairment loss by comparing the total amount of
undiscounted future cash flows generated fromthe asset group to the carrying amount. If
recognition of impairment loss is deemednecessary, the carrying amount is reduced to therecoverable amount and the reduction is recorded
as an impairment loss.

-2-

Our audit procedures related to testing theappropriateness of the assessment of impairment loss
recognition regarding the fixed assets classified to acertain asset group that are included in the asset
group included the following, among others:(1) Evaluation of controls• We evaluated the design and operating
effectiveness of controls related to theassessment of impairment loss recognition for
fixed assets, specifically focusing on controls
over the estimation of the undiscounted future
cash flows.

As stated in "2 Impairment of non-current assets" (2) Evaluation of the reasonableness of the estimatedof "Notes to Consolidated Financial Statements
undiscounted future cash flows(Significant Accounting Estimates)," the Company
identified an impairment indicator and tested
We tested whether the methods used to estimate
whether an impairment loss should be recognized
the undiscounted future cash flows as well as
for the asset group based on the deterioration insignificant assumptions and data used in
profitability due to the facts that customers havedeveloping the future business plans andbeen keeping the level of their investment low andcalculating the disposal value of fixed assets werereducing their excess inventories for a longer
in accordance with the applied financial
period. As a result, the Group concluded that theframework. We also tested whether management
recognition of impairment loss was not necessary
appropriately addressed the estimation
since the total amount of the undiscounted future
uncertainty in the undiscounted future cash flows
cash flows generated from the asset groupby performing the following:
exceeded the carrying amount.
• We assessed the consistency of the approved
The estimated undiscounted future cash flows
future business plans used as a basis for theused for testing whether an impairment loss
undiscounted future cash flows. We also
needs to be recognized were based on the futureevaluated the degree of reliability inbusiness plans which include significant
management's estimates with uncertainty byassumptions made by management involving
comparing the budgets and the future businessuncertainties, such as sales volume, sales priceplans in past years with the actual results.
per unit, market forecast, and disposal value ofthe fixed assets.
• To evaluate the degree of reliability inmanagement's estimates with uncertainty, we
We identified the assessment of impairment loss
performed a stress test on the estimatedrecognition on the fixed assets in the asset group
undiscounted future cash flows.
as a key audit matter because (1) the fixed assets
in the asset group were quantitatively material and• For sales volume and sales price per unit,(2) significant assumptions used in the estimation
which are significant assumptions used in theof the undiscounted future cash flows involve
estimation of the future business plans, we
uncertainties and significant judgments made byinquired of management and the employees
management.
responsible for preparing the future businessplans. As part of the sales order testing, we
examined sales contracts and orders received
to be fulfilled in future periods. Further, we also
inspected the consistency of the informationsuch as sales volume and sales price per unit
on the sales contracts against other relevant
data and information from the customers suchas price lists. For the market forecast, we
performed a comparison of the forecast withavailable external data and peer companies
and analyzed the historical trend of the financial
results.
• With the assistance of our valuation specialists,
we tested the valuation methodology andresults of management's valuation of thedisposal value of fixed assets.

-3-

Recoverability of deferred tax assets related to the Applicable Group under theGroup Tax Sharing System
How the Key Audit Matter Was
Addressed in the Audit

Key Audit Matter Description
The amount of deferred tax assets recorded on
the consolidated balance sheet as of March 31,
2024, was 8,563 million yen. As stated in the"Notes to Consolidated Financial Statements (Tax
Effect Accounting)," the amount of deferred tax
assets before offsetting deferred tax liabilities was
27,551 million yen and a valuation allowance of
99,898 million yen was recorded to reduce thegross amount of deferred tax assets related todeductible temporary differences and loss
carryforwards was 72,347 million yen. The Groupapplies the Group Tax Sharing System to its
domestic affiliates in Japan, so the recorded
amount of deferred tax assets related to theapplicable domestic companies under the GroupTax Sharing System (hereinafter "ApplicableGroup") was 17,554 million yen, a net of avaluation allowance and before offsetting deferred
tax liabilities.

Our audit procedures evaluated the reasonableness ofthe estimated future taxable income of the Company
related to the Applicable Group's recoverability of thedeferred tax, which was approximately half of the total
amount of the estimated future taxable income of the
Applicable Group, included the following, among
others:The Group records the amount of deferred tax
assets expected to be recovered based on theestimated future taxable income (before
considering tax loss carryforwards) over the next
five years. In determining the recoverability of the
Applicable Group's deferred tax assets, theestimated future taxable income of the Company
has a significant impact on this determination as it
is approximately half of the total future taxable
income of the Applicable Group.

With respect to major business units that are
expected to have significant impacts on the
Company's future taxable income, we tested
whether the methods and significant assumptions
used to estimate the future taxable income andthe data used in developing the future businessplans were appropriate in accordance with theapplied financial framework. We also tested
whether management appropriately addressed
the uncertainty in estimation of the future taxable
income by performing the followings:

The estimated future taxable income of theCompany includes significant assumptions usedby management, such as sales volume, sales
price per unit, and market forecast within the
future business plans, and such assumptions
involve uncertainties.
Moreover, the Company has recorded an
operating loss in the current period as a result of adeterioration in profitability due to the facts that
customers have been keeping the level of theirinvestment low and reducing their excess
inventories for a longer period. Thus, the degreeof uncertainty regarding the future taxable incomeof the Company is getting comparatively higher.

-4-(1) Evaluation of controls• We evaluated the design, implementation, andoperating effectiveness of the controls related
to the estimation of future taxable income of theCompany, specifically focusing on controls
related to the determination of the recoverabilityof deferred tax assets.
(2) Evaluation of the reasonableness of estimatedfuture taxable income• We assessed the consistency of the approved
future business plans used as a basis for theestimated future taxable income. We also
evaluated the degree of reliability anduncertainty in management's estimates bycomparing the budgets and the future businessplans for past years with the actual results.
• To evaluate the degree of reliability anduncertainty in management's estimates, we
performed a stress test on the estimated futuretaxable income.

We identified the recoverability of deferred tax
assets related to the Applicable Group under theGroup Tax Sharing System as a key audit matterbecause (1) the recorded amount of deferred tax
assets related to the Applicable Group wasquantitatively material and (2) significant
assumptions used in the estimation of the futuretaxable income involve uncertainties andsignificant judgments made by management.

• For the sales volume and sales price per unit,
which are significant assumptions used in theestimation of the future business plans, we
inquired of management and employees
responsible for preparing the future businessplans. As part of the sales order testing, we
examined sales contracts and orders received
to be fulfilled in future periods. Further, we also
inspected the consistency of the informationsuch as sales volume and sales price per unit
on the sales contracts against other relevant
data and information from the customers suchas price lists. For the market forecast, we
performed a comparison of the forecast withavailable external data and peer companies
and analyzed the historical trend of the financial
results.

Other Information
Management is responsible for the other information. Audit & Supervisory Board members and the Audit &Supervisory Board are responsible for overseeing the Directors' execution of duties relating to the designand operating effectiveness of the controls over the other information. The other information comprises theinformation included in the Annual Securities Report, but does not include the consolidated financial
statements and our auditor's report thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent with theconsolidated financial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this otherinformation, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Audit & Supervisory Board Members and the Audit &Supervisory Board for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with accounting principles generally accepted in Japan, and for such internal
control as management determines is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group's
ability to continue as a going concern, disclosing, as applicable, matters related to going concern inaccordance with accounting principles generally accepted in Japan.
Audit & Supervisory Board members and the Audit & Supervisory Board are responsible for overseeing the
Directors' execution of duties relating to the design and operating effectiveness of the controls over theGroup's financial reporting process.
Auditor's Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as
a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's reportthat includes our opinion. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions ofusers taken on the basis of these consolidated financial statements.

-5-

As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:• Identify and assess the risks of material misstatement of the consolidated financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks. The procedures
selected depend on the auditor's judgment. In addition, we obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion.
• Obtain, when performing risk assessment procedures, an understanding of internal control relevant tothe audit in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the Group's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and,based on the audit evidence obtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Group's ability to continue as a going concern. If weconclude that a material uncertainty exists, we are required to draw attention in our auditor's report to therelated disclosures in the consolidated financial statements or, if such disclosures are inadequate, tomodify our opinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However, future events or conditions may cause the Group to cease to continue as agoing concern.
• Evaluate whether the overall presentation and disclosures of the consolidated financial statements are inaccordance with accounting principles generally accepted in Japan, as well as the overall presentation,
structure and content of the consolidated financial statements, including the disclosures, and whether the
consolidated financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or businessactivities within the Group to express an opinion on the consolidated financial statements. We areresponsible for the direction, supervision and performance of the group audit. We remain solely
responsible for our audit opinion.
We communicate with Audit & Supervisory Board members and the Audit & Supervisory Board regarding,among other matters, the planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during our audit.
We also provide Audit & Supervisory Board members and the Audit & Supervisory Board with a statementthat we have complied with relevant ethical requirements regarding independence, and communicate withthem all relationships and other matters that may reasonably be thought to bear on our independence, andwhere applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with Audit & Supervisory Board members and the Audit & Supervisory
Board, we determine those matters that were of most significance in the audit of the consolidated financial
statements of the current period and are therefore the key audit matters. We describe these matters in our
auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremelyrare circumstances, we determine that a matter should not be communicated in our report because theadverse consequences of doing so would reasonably be expected to outweigh the public interest benefitsof such communication.
<Audit of Internal Control>
OpinionPursuant to the second paragraph of Article 193-2 of the Financial Instruments and Exchange Act, we haveaudited management's report on internal control over financial reporting of Furukawa Electric Co., Ltd. as ofMarch 31, 2024.

-6-

In our opinion, management's report on internal control over financial reporting referred to above, which
represents that the internal control over financial reporting of Furukawa Electric Co., Ltd. as of March 31,
2024, is effectively maintained, presents fairly, in all material respects, the results of the assessment ofinternal control over financial reporting in accordance with assessment standards for internal control overfinancial reporting generally accepted in Japan.
Basis for Opinion
We conducted our internal control audit in accordance with auditing standards for internal control overfinancial reporting generally accepted in Japan. Our responsibilities under those standards are further
described in the Auditor's Responsibilities for the Internal Control Audit section of our report. We are
independent of the Group in accordance with the provisions of the Code of Professional Ethics in Japan,
and we have fulfilled our other ethical responsibilities as auditors. We believe that the audit evidence wehave obtained is sufficient and appropriate to provide a basis for our opinion.
Responsibilities of Management and Audit & Supervisory Board Members and the Audit &Supervisory Board for Report on Internal Control
Management is responsible for designing and operating effective internal control over financial reportingand for the preparation and fair presentation of its report on internal control in accordance with assessment
standards for internal control over financial reporting generally accepted in Japan. Audit & Supervisory
Board members and the Audit & Supervisory Board are responsible for overseeing and verifying the designand operating effectiveness of internal control over financial reporting. There is a possibility thatmisstatements may not be completely prevented or detected by internal control over financial reporting.
Auditor's Responsibilities for the Internal Control Audit
Our objectives are to obtain reasonable assurance about whether management's report on internal control
over financial reporting is free from material misstatement and to issue an auditor's report that includes ouropinion.
As part of an audit in accordance with auditing standards for internal control over financial reporting
generally accepted in Japan, we exercise professional judgment and maintain professional skepticism
throughout the audit. We also:• Perform audit procedures to obtain audit evidence regarding the results of the assessment of internal
control over financial reporting in management's report on internal control. The procedures selected
depend on the auditor's judgment, including the significance of effects on reliability of financial reporting.
• Examine representations on the scope, procedures and results of the assessment of internal control overfinancial reporting made by management, as well as evaluating the overall presentation of management's
report on internal control.
• Obtain sufficient appropriate audit evidence regarding the results of the assessment of internal control
over financial reporting. We are responsible for the direction, supervision and performance of the internal
control audit. We remain solely responsible for our audit opinion.
We communicate with Audit & Supervisory Board members and the Audit & Supervisory Board regarding,among other matters, the planned scope and timing of the internal control audit, result of the internal
control audit, including any identified material weakness which should be disclosed and the result ofremediation.
We also provide Audit & Supervisory Board members and the Audit & Supervisory Board with a statementthat we have complied with relevant ethical requirements regarding independence, and communicate withthem all relationships and other matters that may reasonably be thought to bear on our independence, andwhere applicable, actions taken to eliminate threats or safeguards applied.

-7-

<Fee-Related Information>
Fees for audit and other services for the year ended March 31, 2024, which were charged by us and our
network firms to Furukawa Electric Co., Ltd. and its subsidiaries are disclosed in paragraph (3) titled"Audits" in "Corporate Governance" included in "Information on the Company Submitting Financial Reports"of the Annual Securities Report.
Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Group which is required tobe disclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.

Notes to the Readers of Independent Auditor's Report
This is an English translation of the independent auditor's report as required by the Financial Instruments
and Exchange Act of Japan for the conveniences of the reader.
-8-

(TRANSLATION)
INDEPENDENT AUDITOR'S REPORT
June 24, 2024
To the Board of Directors of
Furukawa Electric Co., Ltd.:
Deloitte Touche Tohmatsu LLC
Tokyo office
Designated Engagement Partner,
Certified Public Accountant:
Tsutomu Hirose
Designated Engagement Partner,
Certified Public Accountant:
Takahiro Ikeda
Designated Engagement Partner,
Certified Public Accountant:
Daijiro Furutani<Audit of Nonconsolidated Financial Statements>
OpinionPursuant to the first paragraph of Article 193-2 of the Financial Instruments and Exchange Act, we haveaudited the nonconsolidated financial statements of Furukawa Electric Co., Ltd. (the "Company") includedin the Financial Section, namely, the nonconsolidated balance sheet as of March 31, 2024, and thenonconsolidated statement of income and nonconsolidated statement of changes in equity for the 202nd
fiscal year from April 1, 2023 to March 31, 2024, and a summary of significant accounting policies andother explanatory information, and the supplementary schedules.
In our opinion, the accompanying nonconsolidated financial statements present fairly, in all material
respects, the financial position of the Company as of March 31, 2024, and its financial performance for theyear then ended in accordance with accounting principles generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of
the Nonconsolidated Financial Statements section of our report. We are independent of the Company inaccordance with the provisions of the Code of Professional Ethics in Japan, and we have fulfilled our otherethical responsibilities as auditors. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.

-1-Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the nonconsolidated financial statements of the current period. These matters were addressed in
the context of our audit of the nonconsolidated financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
Assessment of impairment loss recognition regarding fixed assets classified to a certain asset group in theCommunications Solutions businessWe have omitted descriptions on this due to overlap with the key audit matter ("Assessment of impairment
loss recognition regarding fixed assets classified to a certain asset group in the Communications Solutions
business") described in our audit report on the consolidated financial statements.
Recoverability of deferred tax assets
We have omitted descriptions on this due to overlap with the key audit matter ("Recoverability of deferred
tax assets related to the Applicable Group under the Group Tax Sharing System") described in our audit
report on the consolidated financial statements.
Other Information
Management is responsible for the other information. Audit & Supervisory Board members and the Audit &Supervisory Board are responsible for overseeing the Directors' execution of duties relating to the designand operating effectiveness of the controls over the other information. The other information comprises theinformation included in the Annual Securities Report, but does not include the nonconsolidated financial
statements and our auditor's report thereon.
Our opinion on the nonconsolidated financial statements does not cover the other information and we do
not express any form of assurance conclusion thereon.
In connection with our audit of the nonconsolidated financial statements, our responsibility is to read theother information and, in doing so, consider whether the other information is materially inconsistent with thenonconsolidated financial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this otherinformation, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Audit & Supervisory Board Members and the Audit &Supervisory Board for the Nonconsolidated Financial Statements
Management is responsible for the preparation and fair presentation of the nonconsolidated financial
statements in accordance with accounting principles generally accepted in Japan, and for such internal
control as management determines is necessary to enable the preparation of nonconsolidated financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the nonconsolidated financial statements, management is responsible for assessing theCompany's ability to continue as a going concern, disclosing, as applicable, matters related to going
concern in accordance with accounting principles generally accepted in Japan.
Audit & Supervisory Board members and the Audit & Supervisory Board are responsible for overseeing the
Directors' execution of duties relating to the design and operating effectiveness of the controls over theCompany's financial reporting process.

-2-

Auditor's Responsibilities for the Audit of the Nonconsolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the nonconsolidated financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor'sreport that includes our opinion. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions ofusers taken on the basis of these nonconsolidated financial statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:• Identify and assess the risks of material misstatement of the nonconsolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks. The
procedures selected depend on the auditor's judgment. In addition, we obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion.
• Obtain, when performing risk assessment procedures, an understanding of internal control relevant tothe audit in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the Company's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and,based on the audit evidence obtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Company's ability to continue as a going concern. If weconclude that a material uncertainty exists, we are required to draw attention in our auditor's report to therelated disclosures in the nonconsolidated financial statements or, if such disclosures are inadequate, tomodify our opinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However, future events or conditions may cause the Company to cease to continue as agoing concern.
• Evaluate whether the overall presentation and disclosures of the nonconsolidated financial statements
are in accordance with accounting principles generally accepted in Japan, as well as the overall
presentation, structure and content of the nonconsolidated financial statements, including thedisclosures, and whether the nonconsolidated financial statements represent the underlying transactions
and events in a manner that achieves fair presentation.
We communicate with Audit & Supervisory Board members and the Audit & Supervisory Board regarding,among other matters, the planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during our audit.
We also provide Audit & Supervisory Board members and the Audit & Supervisory Board with a statementthat we have complied with relevant ethical requirements regarding independence, and communicate withthem all relationships and other matters that may reasonably be thought to bear on our independence, andwhere applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with Audit & Supervisory Board members and the Audit & Supervisory
Board, we determine those matters that were of most significance in the audit of the nonconsolidated
financial statements of the current period and are therefore the key audit matters. We describe thesematters in our auditor's report unless law or regulation precludes public disclosure about the matter orwhen, in extremely rare circumstances, we determine that a matter should not be communicated in ourreport because the adverse consequences of doing so would reasonably be expected to outweigh the
public interest benefits of such communication.
<Fee-Related Information>
Fee-related information is disclosed in independent auditor's report on the consolidated financial
statements as of and for the year ended March 31, 2024.

-3-

Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Company which is required
to be disclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.

Notes to the Readers of Independent Auditor's Report
This is an English translation of the independent auditor's report as required by the Financial Instruments andExchange Act of Japan for the conveniences of the reader.

-4-

CoverDocument title

Internal Control Report

Clause of stipulation

Article 24-4-4, Paragraph 1 of the Financial Instruments and Exchange Act

Place of filing

Director, Kanto Local Finance Bureau

Filing dateJune 24, 2024

Company name

Furukawa Denki Kogyo Kabushiki Kaisha

Company name in English

Furukawa Electric Co., Ltd.

Title and name of representative

Hideya Moridaira, President

Title and name of chief financial officer

Koji Aoshima, Corporate Vice President, General Manager, Finance &Accounting Division

Address of registered headquarters

2-6-4 Otemachi Chiyoda-ku, Tokyo

Place for public inspection

Tokyo Stock Exchange, Inc.
(2-1 Nihonbashi Kabutocho, Chuo-ku, Tokyo)207

(Translation)
This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between
this translated document and the Japanese original, the original shall prevail.
1. Basic Framework of Internal Control over Financial Reporting
Hideya Moridaira, Representative Director, President; and Koji Aoshima, Corporate Vice President, General Manager,
Finance & Accounting Division are responsible for the development and operation of internal control over financial
reporting of Furukawa Electric Co., Ltd. (the “Company”).
The Company has developed and operated internal control over financial reporting in accordance with “On the Revision of
the Standards and Practice Standards for Management Assessment and Audit concerning Internal Control Over Financial
Reporting (Council Opinions)” published by the Business Accounting Council.
Internal control over financial reporting may not completely prevent or detect misstatements of financial reporting.
2. Scope, Date and Procedures of Evaluation
We evaluated the effectiveness of our internal control as of March 31, 2024, the end of the fiscal year under review. In
evaluating internal control over financial reporting, we followed the evaluation standards for internal control over financial
reporting generally accepted in Japan.
Based on the Furukawa Electric Group Basic Policy for the Development and Evaluation of Internal Control Over Financial
Reporting (resolved by the Board of Directors on January 31, 2007) and the FY2023 Policy for Response to J-SOX (resolvedby the Board of Directors on June 8, 2023), we evaluated the development and operation status of company-level controls.
Given the results of the evaluation, we analyzed the business processes within the scope of internal controls to be evaluated,
identified key controls that may have a material impact on the reliability of financial reporting, and evaluated whether thebasic components of internal control are operating with regard the identified key controls.
We determined the required scope of evaluation of internal controls over financial reporting in light of the degree of impact
on the reliability of financial reporting.
Regarding the procedures and methods for determining the scope of evaluation, we first identified company-level controls
with a material impact on overall financial reporting and period-end financial reporting processes to be evaluated from acompany-wide perspective. We then performed procedures, such as inquiries to relevant personnel and verification ofrecords, covering all the business locations other than those that do not have a material impact, after appropriately
understanding and analyzing the internal controls as a whole. In doing so, we evaluated the development and operation
status of the internal control, as well as the degree of their impact on process-level controls.
In evaluating process-level controls, we selected significant business locations subject to evaluation based on theirconsolidated sales in light of their degree of quantitative and qualitative materiality for financial reporting, and the result of
the above-mentioned evaluation of the company-level controls. Specifically, significant business locations were selected indescending order of sales until their combined amount reached approximately two-thirds of total consolidated sales. Then,in the selected business locations, we included in the scope of evaluation of process-level controls all the business processes
that affect the accounts (namely sales, accounts receivable, and inventory) that are closely associated with our businessobjectives. In addition, business processes with a significant impact on financial reporting were individually added to thescope of evaluation.
For business processes subject to evaluation, we first analyzed each of the business processes, and selected risks that would
have a material impact on the reliability of financial reporting and corresponding control activities and other key controls.
We then applied procedures including inquiries to appropriate staff personnel on internal controls, review of relevant records,
observation of the application of specific controls, and examination of records regarding the operation of internal controls.
In doing so, we evaluated development and operation status of the internal control.
Furthermore, where automated internal controls using IT are in place in the business processes subject to evaluation, we
first understood the IT infrastructure and identified evaluation units. We then applied procedures including inquiries toappropriate staff personnel on internal controls, review of relevant records and data, and examination of records regarding
the operation of internal controls, with respect to IT general controls and IT application controls. In doing so, we evaluateddevelopment and operation status of the internal control.
3. Result of Evaluation
Based on the evaluation procedures described above, the management concluded that the internal control over financial
reporting of the Company as of March 31, 2024 was effective.

208

4. Supplementary Information
Not applicable.
5. Other Information for Special Attention
Not applicable.

209

CoverDocument title

Confirmation Note

Clause of stipulation

Article 24-4-2, Paragraph 1 of the Financial Instruments and Exchange Act

Place of filing

Director, Kanto Local Finance Bureau

Filing dateJune 24, 2024

Company name

Furukawa Denki Kogyo Kabushiki Kaisha

Company name in English

Furukawa Electric Co., Ltd.

Title and name of representative

Hideya Moridaira, President

Title and name of chief financial officer

Koji Aoshima, Corporate Vice President, General Manager, Finance &Accounting Division

Address of registered headquarters

2-6-4 Otemachi Chiyoda-ku, Tokyo

Place for public inspection

Tokyo Stock Exchange, Inc.
(2-1 Nihonbashi Kabutocho, Chuo-ku, Tokyo)210

(Translation)
This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between
this translated document and the Japanese original, the original shall prevail.

1. Matters Related to Adequacy of Statements Contained in the Annual Securities Report
Hideya Moridaira, Representative Director, President and Koji Aoshima, Corporate Vice President, General Manager, Finance &Accounting Division, confirmed that statements contained in the Annual Securities Report for the 202nd fiscal year (From April 1,
2023 to March 31, 2024) were adequate under the Financial Instruments and Exchange Act of Japan.
2.

Special Notes

Not applicable.

211