Annual Securities Report
Fiscal year 94th term (from April 1, 2023 to March 31, 2024)

F.C.C. CO., LTD.

Table of Contents
A.

Company information ........................................................................................................................... 3
Overview of the Company ................................................................................................................ 3
1. Trends in selected financial data .................................................................................................. 3
2. Company history ........................................................................................................................... 4
3. Description of business.................................................................................................................. 5
4. Overview of subsidiaries and other affiliates .............................................................................. 7
5. Information about employees ..................................................................................................... 10
II. Overview of business ....................................................................................................................... 12
1. Management policy, management environment, issues to address, etc. ................................. 12
2. Approach and initiatives on sustainability ................................................................................ 14
3. Business risks ............................................................................................................................... 19
4. Management analysis of financial position, operating results and cash flows ....................... 21
5. Critical contracts for operation .................................................................................................. 24
6. Research and development activities ......................................................................................... 24
III. Information about facilities ............................................................................................................ 26
1. Overview of capital investments, etc. ......................................................................................... 26
2. Major facilities ............................................................................................................................. 26
3. Planned additions, retirements, etc. of facilities ....................................................................... 28
IV. Information about reporting company.......................................................................................... 29
1. Information about shares, etc. .................................................................................................... 29
2. Dividend policy ............................................................................................................................ 31
3. Status of corporate governance, etc. .......................................................................................... 32
V. Financial information ..................................................................................................................... 53
1. Consolidated financial statements, etc. ...................................................................................... 54
2. Non-consolidated financial statements, etc. ............................................................................ 106
VI. Overview of operational procedures for shares of the reporting company .............................. 120
I.

1

Cover Page
Document title
Clause of stipulation
Place of filing
Date of filingFiscal year
Company nameCompany name in English
Title and name of representative
Address of registered headquarters
Telephone number
Name of contact person
Nearest place of contact
Telephone number
Name of contact person
Place for public inspection

Annual Securities Report
Article 24, paragraph 1 of the Financial Instruments andExchange Act
Director-General of the Tokai Local Finance Bureau
June 20, 2024
94th term (from April 1, 2023 to March 31, 2024)
株式会社エフ・シー・シー (Kabushiki Kaisha F.C.C.)
F.C.C. CO., LTD.
Yoshitaka Saito
President and Representative Director
7000-36 Nakagawa, Hosoe-cho, Hamana-ku, Hamamatsu-shi,
Shizuoka+81-53-523-2400 (Main)
Mikinobu Nagasaka, Senior Operating Officer, Head ofManagement and Administration
7000-36 Nakagawa, Hosoe-cho, Hamana-ku, Hamamatsu-shi,
Shizuoka+81-53-523-2400 (Main)
Mikinobu Nagasaka, Senior Operating Officer, Head ofManagement and Administration
Tokyo Stock Exchange, Inc.
(2-1 Nihombashi Kabutocho, Chuo-ku, Tokyo)

2

A. Company information
I. Overview of the Company
1. Trends in selected financial data
Summary of consolidated financial dataTerm

90th term

91st term

92nd term

93rd term

94th term

Fiscal year-end

March 31,2020

March 31,2021

March 31,2022

March 31,2023

March 31,2024

Revenue(Millions of yen)

171,060

146,157

170,971

218,939240,283

Profit before income taxes (Millions of yen)

6,653

8,313

11,944

13,641

19,169Profit attributable to owners of parent(Millions of yen)

3,921

4,462

8,551

9,566

12,231

Comprehensive income(Millions of yen)

(2,068)12,06718,92916,30028,778Equity attributable to owners of parent(Millions of yen)

120,869

130,239

146,625

160,055

185,322

Total assets(Millions of yen)

161,727

175,644

195,364

210,626

245,004

Equity attributable to owners of parent per
share
(Yen)

2,432.56

2,621.16

2,950.09

3,218.63

3,725.39

Basic earnings per share

(Yen)

78.92

89.81

172.07

192.41245.91

Diluted earnings per share

(Yen)

–

–

–

–

–

Ratio of equity attributable to owners ofparent to total assets
(%)

74.74

74.15

75.05

75.99

75.64

Ratio of profit to equity attributable toowners of parent

3.18

3.55

6.18

6.24

7.08

(Times)

20.01

20.69

7.81

8.06

9.34

Net cash flows from (used in) operating
activities(Millions of yen)

25,07912,971

15,45621,01435,383

Net cash flows from (used in) investing
activities(Millions of yen)

(10,597)(8,522)(9,627)(10,307)(7,433)

Net cash flows from (used in) financing
activities(Millions of yen)

(8,990)(3,175)(4,202)(3,232)(4,824)

Cash and cash equivalents at end of period(Millions of yen)

35,35039,60744,62753,73882,028

8,718[3,777]8,360[3,369]

8,115

7,970

7,819

[3,425][3,793][4,088]

Price earnings ratio (PER)(%)

Number of employees[Separately, average number of temporary
employees]

Note: Information on diluted earnings per share is omitted due to an absence of potential shares.

32. Company history
Year

Month

Event

1939

June

1943
1982

March
February

1984
1988

July
July

1989

March
June
September
September
October
AugustDecember

Fuji Lite Industries Co., Ltd. is established in Sato-cho, Hamamatsu-shi, Shizuoka.
The Company begins manufacturing clutch plates, gears and other products employing compression
molding of Bakelite resins.
Changes name to Fuji Chemical Co., Ltd.
Establishes Kyushu Fuji Chemical Industries Co., Ltd. (currently KYUSHU F.C.C. CO., LTD., aconsolidated subsidiary) in Matsubase-machi, Shimomashiki-gun, Kumamoto (currently Uki-shi,
Kumamoto).
Changes name to F.C.C. CO., LTD.
Establishes JAYTEC, INC. (currently FCC (INDIANA), LLC, a consolidated subsidiary) in Indiana,
U.S.A.
Establishes FCC (THAILAND) CO., LTD. (currently a consolidated subsidiary) in Bangkok, Thailand.
Moves its corporate head office to the current address.
Makes equity investment in KWANG HWA SHING INDUSTRIAL CO., LTD. of Tainan, Taiwan.
Establishes FCC (PHILIPPINES) CORP. (currently a consolidated subsidiary) in Laguna, Philippines.
Acquires shares of TENRYU SANGYO CO., LTD. (currently a consolidated subsidiary).
Registers its shares for OTC trading with Japan Securities Dealers Association.
Establishes CHENGDU JIANG HUA. F.C.C. CLUTCHES. CO., LTD. (currently CHENGDUYONGHUA. F.C.C. CLUTCHES CO., LTD., a consolidated subsidiary) in Chengdu, Sichuan, China.
Establishes CHU’S F.C.C. (SHANGHAI) CO., LTD. (currently a consolidated subsidiary) in Shanghai,
China.
Establishes FCC (EUROPE) LTD. in Milton Keynes, UK.
Establishes FCC RICO LTD. (currently FCC CLUTCH INDIA PRIVATE LIMITED, a consolidated
subsidiary) in Haryana, India.
Establishes FCC DO BRASIL LTDA. (currently a consolidated subsidiary) in Amazonas, Brazil.
Establishes FCC (North Carolina), INC. (currently FCC (North Carolina), LLC, a consolidated subsidiary)in North Carolina, U.S.A.
Establishes PT. FCC INDONESIA (currently a consolidated subsidiary) in Karawang, Indonesia.
Establishes FCC (North America), INC. (currently a consolidated subsidiary) and FCC (INDIANA), INC.
(currently FCC (INDIANA), LLC, a consolidated subsidiary) in Indiana, U.S.A.
Lists its shares on the Second Section of the Tokyo Stock Exchange.
Establishes FCC (Adams), LLC (currently a consolidated subsidiary) in Indiana, U.S.A.
Lists its shares on the First Section of the Tokyo Stock Exchange.
Increases investment in KWANG HWA SHING INDUSTRIAL CO., LTD. (currently FCC (TAIWAN)
CO., LTD.), making the company a consolidated subsidiary.
Establishes FCC (VIETNAM) CO., LTD. (currently a consolidated subsidiary) in Hanoi, Vietnam.
Establishes CHINA FCC FOSHAN CO., LTD. (currently a consolidated subsidiary) in Foshan,
Guangdong, China.
Acquires 100% of shares of Tohoku Chemical Industries, Ltd.
Establishes F.C.C. (CHINA) INVESTMENT CO., LTD. (currently a consolidated subsidiary) in Chengdu,
Sichuan, China.
Completes liquidation of FCC (EUROPE) LTD.
Establishes FCC SEOJIN CO., LTD. in Siheung, Gyeonggi-do, Korea.
Establishes FCC AUTOMOTIVE PARTS DE MEXICO, S.A. DE C.V. (currently a consolidated
subsidiary) in San Luis Potosi, Mexico.
Establishes FCC CLUTCH INDIA PRIVATE LIMITED (currently a consolidated subsidiary) in Haryana,
India.
Acquires 100% of shares of FCC RICO LTD. (currently FCC CLUTCH INDIA PRIVATE LIMITED, aconsolidated subsidiary).
FCC INDIA MANUFACTURING PRIVATE LIMITED has been merged by FCC CLUTCH INDIA
PRIVATE LIMITED.
Acquires 100% of shares of FLINT CO., LTD. (currently a consolidated subsidiary).
Transferred all of the shares of Tohoku Chemical Industries, Ltd.
Transitioned from the First Section of the Tokyo Stock Exchange to the Prime Market due to the revisionof the Tokyo Stock Exchange market divisions
Completed liquidation of FCC SEOJIN CO., LTD.

1992
1993
1994

1995

March

1997

September
April

1998
2000

November
April

2001
2002

April
December

2003
2004
2005

February
May
March
June

2006

NovemberJanuary

2010
2012

November
September

2013

DecemberFebruary
June

2014

November
December

2015

November

2017
2018
2022

September
December
April

2022

November4

3. Description of business
The Group, comprising the Company, 22 subsidiaries and one associate, is engaged primarily in the
motorcycle business, the automobiles business, and the non-mobility business.
The following breaks down the Group’s businesses into operating segments and indicates in which
segment each company falls. These operating segments are the same as those in “V. Financial information,
1. Consolidated financial statements, etc., (1) Consolidated financial statements, Notes to consolidated
financial statements, 4. Segment information.”
In addition, the Company has made changes to its reportable segments, effective from the fiscal year
ended March 31, 2024. Refer to “V. Financial information, 1. Consolidated financial statements, etc., (1)Consolidated financial statements, Notes to consolidated financial statements, 4. Segment information”
for the details of these changes.
Motorcycles BusinessThis segment is engaged primarily in the manufacture and sales of clutches for motorcycles, scooters,
all-terrain vehicles (ATVs), and other vehicles, as well as products in the EV/CASE area.
Business
category

Principal companies

Sales

PT. FCC PARTS INDONESIA [Indonesia]

Manufacture andsales

The Company, KYUSHU F.C.C. CO., LTD., TENRYU SANGYO CO., LTD., FLINT CO., LTD., FCC(North Carolina), LLC [U.S.], FCC (THAILAND) CO., LTD. [Thailand], FCC (PHILIPPINES) CORP.
[Philippines], CHENGDU YONGHUA. F.C.C. CLUTCHES CO., LTD. [China], CHU’S F.C.C.
(SHANGHAI) CO., LTD. [China], FCC (TAIWAN) CO., LTD. [Taiwan], FCC CLUTCH INDIA
PRIVATE LIMITED [India], PT. FCC INDONESIA [Indonesia], FCC (VIETNAM) CO., LTD.
[Vietnam], FCC DO BRASIL LTDA. [Brazil]

Automobiles BusinessThis segment is engaged primarily in the manufacture and sales of clutches for automatic and manualtransmission automobiles, as well as products in the EV/CASE area.
Business
category

Principal companies

Manufacture andsales

The Company, KYUSHU F.C.C. CO., LTD., TENRYU SANGYO CO., LTD., FLINT CO., LTD., FCC(INDIANA), LLC [U.S.], FCC (North Carolina), LLC [U.S.], FCC (Adams), LLC [U.S.], FCC
AUTOMOTIVE PARTS DE MEXICO, S.A. DE C.V. [Mexico], FCC (THAILAND) CO., LTD.
[Thailand], FCC (PHILIPPINES) CORP. [Philippines], CHENGDU YONGHUA. F.C.C. CLUTCHES
CO., LTD. [China], CHINA FCC FOSHAN CO., LTD. [China], FCC CLUTCH INDIA PRIVATELIMITED [India], PT. FCC INDONESIA [Indonesia], FCC (VIETNAM) CO., LTD. [Vietnam], FCC
DO BRASIL LTDA. [Brazil]

Non-mobility businessThis segment is engaged primarily in the manufacture and sales of products and the provision of services
in the environmental/energy sector.
Business
category
Manufacture,sales, andprovision ofservices

Principal companies

The Company

5Group business structure chart
The following Group business structure chart shows the matters described above.

Domestic* KYUSHU F.C.C. CO., LTD.
* TENRYU SANGYO CO., LTD.
* FLINT CO., LTD.

<Administration company>* FCC (North America), INC.
* FCC (INDIANA), LLC* FCC (North Carolina), LLC* FCC (Adams), LLC

The Company

Mexico* FCC AUTOMOTIVE PARTS DE MEXICO, S.A. DE C.V.
Thailand* FCC (THAILAND) CO., LTD.
Philippines* FCC (PHILIPPINES) CORP.
China<Administration company>* F.C.C. (CHINA) INVESTMENT CO., LTD.
* CHENGDU YONGHUA. F.C.C. CLUTCHES CO., LTD.
* CHINA FCC FOSHAN CO., LTD.
* CHU’S F.C.C. (SHANGHAI) CO., LTD.
Taiwan* FCC (TAIWAN) CO., LTD.
India
* FCC CLUTCH INDIA PRIVATE LIMITED
Indonesia* PT. FCC INDONESIA* PT. FCC PARTS INDONESIA
Vietnam* FCC (VIETNAM) CO., LTD.
Brazil* FCC DO BRASIL LTDA.

* Consolidated subsidiaries○ Other affiliated company

Receiving and supplying materials and parts
Supplying products
Leasing land

6

Domestic/Overseas customers (○ Honda Motor Co., Ltd. and others)US4. Overview of subsidiaries and other affiliates
Name

Address

Issued capital

Principal contentsof business

Ratio of voting
rights holding(held) (%)(Note 3)

Relationship<Consolidated
subsidiaries>
KYUSHU F.C.C. CO.,LTD.

Uki-shi,
Kumamoto

Motorcycles
business¥30,000,000
Automobiles
business

Manufacturing the Company’s
product components and products.
100Interlocking officers and leasing
land.

TENRYU SANGYO
CO., LTD.

Iwata-shi,
ShizuokaMotorcycles
business¥22,500,000
Automobiles
business

Purchasing motorcycle,
automobile and general-purpose
80.22
components. Interlocking officers
and capital assistance.

FLINT CO., LTD.

Okagaki town,
Onga-gun,Fukuoka

Motorcycles
business¥10,000,000
Automobiles
business

Purchasing FLINT CO., LTD.’s
products.
100
Interlocking officers and capitalassistance.

FCC (North America),
INC.
(Note 2)

Indiana, U.S.

Administration of
US$42,800,000 subsidiaries in the
U.S.

100

Interlocking officers and capitalassistance.

Indiana, U.S.

US$17,800,000

Automobiles
business

Selling the Company’s products,
components and raw materials.
100
Purchasing FCC (INDIANA),[100]
LLC’s products and components.
Interlocking officers.

North Carolina,
U.S.

Motorcycles
business
US$10,000,000
Automobiles
business

Selling the Company’s products,
components and raw materials.
100
Purchasing FCC (North Carolina),[100]
LLC’s products and components.
Interlocking officers.

FCC (Adams), LLC(Notes 2, 4)

Indiana, U.S.

Automobiles
US$15,000,000
business

Selling the Company’s products,
components and raw materials.
100
Purchasing FCC (Adams), LLC’s[100]
products and components.
Interlocking officers.

FCC AUTOMOTIVEPARTS DE MEXICO,S.A. DE C.V.
(Note 2)

San Luis Potosi,
MexicoAutomobiles
MXN1,000,000,000
business

Selling the Company’s products,
100 components and raw materials.
[45.30] Interlocking officers and capitalassistance.

FCC (THAILAND) CO., Bangkok,
LTD.
ThailandMotorcycles
business
THB60,000,000
Automobiles
business

Selling the Company’s products,
components and raw materials.
100
Purchasing FCC (THAILAND)[0.07]
CO., LTD. ’s products andcomponents. Interlocking officers.

FCC (PHILIPPINES)
CORP.
(Note 2)

Laguna,Philippines

Motorcycles
business
PHP200,000,000
Automobiles
business

Selling the Company’s products,
components and raw materials.
100 Purchasing FCC (PHILIPPINES)
CORP.’s products andcomponents. Interlocking officers.

F.C.C. (CHINA)INVESTMENT CO.,LTD.
(Note 2)

Sichuan, China

Administration of
US$30,000,000 subsidiaries in
China

100 Interlocking officers.

FCC (INDIANA), LLC(Notes 2, 4)

FCC (North Carolina),
LLC(Note 2)

CHENGDU
YONGHUA. F.C.C.
Sichuan, China
CLUTCHES CO., LTD.
(Note 2)

CHU’S F.C.C.
(SHANGHAI) CO.,LTD.
(Note 2)

Shanghai, China

Motorcycles
business
US$45,000,000
Automobiles
business

Selling the Company’s products,
components and raw materials.
Purchasing CHENGDU100
YONGHUA. F.C.C. CLUTCHES[82.22]
CO., LTD.’s products andcomponents. Interlocking officers
and capital assistance.

Motorcycles
business

Selling the Company’s products,
components and raw materials.
Purchasing CHU’S F.C.C.
100(SHANGHAI) CO., LTD.’s
products and components.
Interlocking officers.

US$9,800,000

7

Name

CHINA FCC FOSHAN
CO., LTD.
(Note 2)

FCC (TAIWAN) CO.,LTD.
(Note 2)FCC CLUTCH INDIA
PRIVATE LIMITED(Notes 2, 4)

Address

Guangdong, China

Tainan, Taiwan

Haryana, India

Issued capital

US$28,000,000

NT$195,000,000

INR3,875,000,000

Principal contentsof business

Ratio of voting
rights holding(held) (%)(Note 3)

Relationship

Automobiles
business

Selling the Company’s products,
components and raw materials.
100 Purchasing CHINA FCC[61.43] FOSHAN CO., LTD.’s products
and components. Interlocking
officers.

Motorcycles
business

Selling the Company’s products,
components and raw materials.
70
Purchasing FCC (TAIWAN) CO.,
[15]
LTD.’s products and components.
Interlocking officers.

Motorcycles
business
Automobiles
business

Selling the Company’s products,
components and raw materials.
Purchasing FCC CLUTCH
100 INDIA PRIVATE LIMITED’s
products and components.
Interlocking officers and capitalassistance.
Selling the Company’s products,
components and raw materials.
100
Purchasing PT. FCC[0.55]INDONESIA’s products andcomponents. Interlocking officers.

PT. FCC INDONESIA(Notes 2, 4)

Karawang,Indonesia

Motorcycles
business
US$11,000,000
Automobiles
business

PT. FCC PARTSINDONESIA

Karawang,Indonesia

Motorcycles
US$300,000
business

Selling the Company’s products,
components and raw materials.
100
Purchasing PT. FCC PARTS[100]
INDONESIA’s products andcomponents.

Hanoi, Vietnam

Motorcycles
business
US$25,000,000
Automobiles
business

Selling the Company’s products,
components and raw materials.
100 Purchasing FCC (VIETNAM)
CO., LTD.’s products andcomponents. Interlocking officers.

Amazonas, Brazil

Motorcycles
business
BRL31,600,000
Automobiles
business

Selling the Company’s products,
components and raw materials.
100 Purchasing FCC DO BRASIL
LTDA.’s products andcomponents. Capital assistance.

Minato-ku, Tokyo¥86,067,000,000

FCC (VIETNAM) CO.,LTD.
(Note 2)

FCC DO BRASIL
LTDA.
(Note 2)<Other affiliate>
Honda Motor Co., Ltd.
(Note 5)

Manufacture andsales ofautomobiles andengines

Selling the Company’s products
21.88
and purchasing raw materials and(held)
components.

Notes: 1. Descriptions in the “Principal contents of business” column are names of segments.
2. These companies are classified as “Specified Subsidiaries” under the Financial Instruments and Exchange Act ofJapan.
3. The figures in brackets in the “Ratio of voting rights holding” column are indirect holding ratio included in the
figures outside the brackets.
4. For FCC (INDIANA), LLC, FCC (Adams), LLC, PT. FCC INDONESIA and FCC CLUTCH INDIA PRIVATELIMITED, the percentage of their net sales (excluding internal sales between consolidated companies) toconsolidated net sales exceeded 10%.
Key profit and loss information• FCC (INDIANA), LLC(1) Net sales(2) Profit before income taxes(3) Profit(4) Net assets(5) Total assets¥46,857 million¥2,950 million¥2,302 million¥23,701 million¥30,360 million• FCC (Adams), LLC(1) Net sales(2) Profit before income taxes¥57,786 million¥6,136 million8(3) Profit(4) Net assets(5) Total assets¥4,695 million¥18,999 million¥26,535 million• PT. FCC INDONESIA(1) Net sales(2) Profit before income taxes(3) Profit(4) Net assets(5) Total assets¥32,118 million¥1,966 million¥1,641 million¥17,585 million¥22,582 million• FCC CLUTCH INDIA PRIVATE LIMITED(1) Net sales¥33,624 million(2) Profit before income taxes¥1,629 million(3) Profit¥1,202 million(4) Net assets¥6,668 million(5) Total assets¥20,656 million
5. This company files its Annual Securities Report.
6. In addition to the above, there are three affiliates.

95. Information about employees(1) Consolidated companies
As of March 31, 2024
Segment name

Number of employees

Motorcycles business

4,585[3,647]

Automobiles business

3,098

[391]

Non-mobility business

136

[50]

7,819

[4,088]

7,819[4,088]

Total of reportable segments
Total

Note: The number of employees indicates the number of working employees, and the average number of temporary
employees during the fiscal year under review is given in brackets separately.

(2) Reporting company
As of March 31, 2024
Number of employees

Average age

1,049 [259]

Average years of service
43.6

Average annual salary (Yen)

19.1

Segment name7,113,878

Number of employees

Motorcycles business

435

[128]

Automobiles business

478

[81]

Non-mobility businessTotal of reportable segments
Total

136

[50]

1,049

[259]

1,049

[259]

Notes: 1. The number of employees indicates the number of working employees, and the average number of temporary
employees during the fiscal year under review is given in brackets separately.
2. Average annual salary includes bonuses and surplus wages.

(3) Status of labor union
The reporting company and some of its consolidated subsidiaries have labor unions. However, thesecompanies have no labor-management issues to note.
(4) Female workers as a percentage of management positions, uptake of childcare leave by male workers,
and wage differential between male and female workers
1) Reporting company
Fiscal year ended March 31, 2024
Percentage of
Uptake offemale workers childcare leavein managementby malepositions (%)
workers (%)(Note 1)
(Note 2)
0.6

51.7

Wage differential between male and female
workers (%)(Note 1)
All workers

Permanent,
full-time
workers

Part-time andfixed-term
workers

77.7

80.4

71.4

Supplementary explanation

Notes: 1. Calculated in accordance with the provisions of the Act on the Promotion of Women’s Active Engagement inProfessional Life (Act No. 64 of 2015)
2. Childcare leave uptake, etc. calculated as in Article 71-4, item 1 of the Ordinance for Enforcement of the Act onChildcare Leave, Caregiver Leave, and Other Measures for the Welfare of Workers Caring for Children or Other
Family Members (Ordinance of the Ministry of Labor No. 25 of 1991) in accordance with the provisions 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).

102) Consolidated subsidiaries
Fiscal year ended March 31, 2024

Name

KYUSHU
F.C.C. CO.,LTD.

Percentage
of femaleworkers inmanagement
positions(%)(Note 1)
0.0

Uptake of childcare leave by male workers (%)

All workers

Permanent,
full-time
workers

Part-timeand fixedterm
workers

0.0

0.0

–

(Note 1)

Wage differential between male andfemale workers (%)(Note 1)
All workers

Permanent,
full-time
workers

Part-timeand fixedterm
workers

72.8

73.5

100.2

Supplementary
explanation

Note: 1. Calculated in accordance with the provisions of the Act on the Promotion of Women’s Active Engagement inProfessional Life (Act No. 64 of 2015)11

II. Overview of business
1. Management policy, management environment, issues to address, etc.
Please note that matters concerning the future in this article were determined by the Group as of the filingdate of this Annual Securities Report.
(1) Basic corporate management policy
The Group’s basic policy of corporate philosophy is to “make a contribution to society by supplying
products and services that make the best of ideas and technology to satisfy customers in every way.”
In line with this corporate philosophy, it is the course of action for the Group’s officers and employees
to “place safety and the environment first when conducting business,” “employ ingenuity and creative
thinking for the greater purpose of advancing our business,” “renew and improve ourselves and ourbusiness, every day,” “carry out our work in a speedy and timely manner” and “honor harmony amongpeople and make our offices a place where people enjoy what they do in a bright working atmosphere.”(2) Management environment, business strategy, issues to address, etc.
The Group expects a moderate economic recovery will continue, due in part to the effects of various
government policies. However, it is important to heed downward risks, including the impacts associatedwith global monetary tightening, concerns over the outlook for the Chinese economy, rising commodity
prices, international instability, and fluctuations in financial and capital markets. As such, the outlook
remains uncertain.
Over the medium to long term, it is expected that growing awareness of sustainability and advances indigital technology will accelerate further in the future, requiring corporate and business transformationthat will enable the provision of value in the era of CASE, and electrification in particular.
In this business environment, under the basic policy of “Second Founding: towards the brand-new FCC,”
set out in the 12th Medium-Term Management Plan which began in fiscal 2023, the Group will strive
to continuously enhance its corporate value by transforming its business structure and strengthening its
management base.
 Progress of the Medium-Term Management Plan
Under the basic policy of “Second Founding: towards the brand-new FCC,” set out in the 12th
Medium-Term Management Plan, the Group has been working to enhance the profitability of its
core clutch business and to create new businesses.
Going forward, the Group will strive to continually enhance its corporate value by steadilystrengthening its management base and transforming its business portfolio.
 Overview by business〇 Motorcycles businessIn the Group’s core clutch business, demand has remained strong, primarily in India andIndonesia. The tasks for the future will be to carry out further activities to expand sales,
including in emerging countries, and develop high value added technology to strengthen our
position as a market leader and maximize revenue.
In new businesses, the Group completed preparations for mass production of motor key
components including motor cores in India. The Group also worked to develop its production
technology system with preparations for mass production of motor assemblies in India and theinstallation of the mass-production test line for motor assemblies in Japan. Going forward, theGroup will aim for the maturing of mass production in India and work toward the expansion of
its production sites, particularly in ASEAN countries. It will also promote sourcing activities
with the aim of further enhancing value added, mainly in the data business.

12

〇 Automobiles businessIn the core clutch business, the Group maximized revenue due to the market recovery primarily
in North America and business structure enhancements. The tasks for the future will be to workto establish an optimal structure and to shift resources, in anticipation of a decline in production
owing to the trend toward EVs.
In new businesses, the Group started preparations for mass production of motor core
submodules in China. The Group also continued developing differentiated technology for motor
core submodules, mainly in Japan, expanding its mass-production test line, and approachingcustomers to secure further orders across the entire Group. Going forward, the Group willachieve local production, leveraging the strengths of its global operations.
〇 Non-mobility businessIn the non-mobility business, the Group primarily worked on preparations of mass-productionlines for ceramic setters with mass production scheduled to start in 2024 and conductive
auxiliary agents for lithium ion batteries (LiBs) with mass production scheduled to start in 2025.
Going forward, the Group will work for further business expansion by blending FCC’s coretechnologies and proactively promoting collaboration and alliances.
 Financial indicators and shareholder returns
In fiscal 2023, the higher profitability of the core clutch business led to an improvement in thefinancial indicators. The Group will continue to allocate cash generated in the core clutch businessto growth investment as a priority while also enhancing shareholder returns.
 Sustainability initiatives〇 Climate change
In fiscal 2023, performance on reducing greenhouse gas (GHG) emissions was 2,730t-CO2
based on energy conservation and 3,667t-CO2 based on renewable energy. Measures toconserve energy and use renewable energy are being implemented across the entire Group withthe aim of realizing carbon neutrality in 2050.
〇 Human capital
The Group will define the necessary human resource requirements and begin to formulate a
portfolio of human resources in order to transform its entire organization into one thatconsistently offers new value in the mobility and non-mobility areas. The Group will also
pursue measures based on the three central themes of improvement in employee engagement,
promotion of diversity, and development of human resources and skills in order to develop
human resources who work to bring about “the new FCC” of their own accord, building thefoundation for generating innovation.

13

2. Approach and initiatives on sustainability
The Group’s approach and initiatives on sustainability are as follows.
Please note that matters concerning the future in this article were determined by the Group as of the endof the fiscal year ended March 31, 2024.
・ Governance
The Group considers its impact on the environment, society, and the economy and is implementing
various initiatives as part of its long-term corporate strategy to fulfill its social responsibility and resolve
social issues. Sustainability-related matters are broken down in the medium-term management plans andthe annual business plans based on the corporate philosophy and long-term vision, and the Board of
Directors provides appropriate supervision of progress.
・ Risk management
We identify the risks of sustainability-related matters that impact the Group, and these risks are monitoredby the Sustainability Committee and others.
(Climate change)
・ Strategy
The Group’s analysis and response based on the TCFD recommendations is as follows.

14

Decarbonized economy transition risks (mainly risks leading to 1.5°C scenario)
DegreeofimpactCategory

When risk
manifests

Main risks
Increase in burden of business costs associated with
the introduction of carbon taxes, taxes on fuel andenergy consumption, emissions trading, etc.
Increase in raw material procurement costs due tochanges to environmentally friendly raw materials by
suppliers and cost increases due to carbon taxes, etc.
being passed on to prices

High

Government
policyLegalregulations

Promoting decarbonization during
production and transport, including for
suppliers・ Streamlining production, transport,
and other areas
・ Using decarbonized and low carbon
energy・ Promoting introduction of highefficiency facilities
・ Considering introduction of internal
Short to longcarbon pricing to stimulate energy
term
conservation and encourage
installation of energy-saving
facilities
・ Collecting and considering
information on options such as
renewable energy/non-fossil
certificates and credits in Japan andoverseas・ Continually promoting energy
conservation activities, including for
suppliers

Loss of sales opportunities due to delays indevelopment of technology for products and services

Providing new value for theelectrification of mobility leveraging
FCC’s core technologies

Cost of equipment and other measures for
decarbonizationHigh

Medium tolong term

Technology

Main responses

・ Starting preparations for mass
production in the motorcycle
EV/CASE business areas
・ Starting preparations for mass
production in the automobile motor
core submodule business area
・ Developing a variety of aluminum
die cast products to meet nextgeneration mobility needs
Promoting decarbonization through the
installation of energy-saving facilities
・ Minimizing energy consumption byincreasing labor savings andefficiency in production
Encouraging environmentally-friendly
design・ Reducing raw material use byimplementing “environmentallyfriendly design,” including reducing
weight and use of chemicals during
design of products and services

Increase in possibility that customers will selectprocurement products from a Life Cycle Assessment(LCA) perspective will lead to decrease in customer
demand due to delays in LCA compliance.
Increase in life cycle CO2 reduction requirementsfrom automobile manufacturers
Medium Market trends Increase in costs due to securing power sources andelectric power volume by shifting from fossil fuels to
renewable energy (tight demand and supply withhigher demand for renewable energy) and rising
renewable energy prices

15

Medium tolong term

Strengthening action on CO2 reduction
from the LCA perspective in light ofmarket trends and customer demands
・ Strengthening LCA response
throughout the supply chain andimplementing energy conservation to
reduce CO2 emissions
・ Implementing introduction of clean
energy and renewable energy on a
global basis, including solar power
generation that takes advantage ofthe regional characteristics of FCC
base locations
・ Expanding sales of products that
contribute to carbon neutrality
through energy solutions

DegreeofimpactCategory

When risk
manifests

Main risks
Impact on sales due to evaluation of approach toaddressing climate change issues and changes inmarket values

MediumMonitoring the achievement of targets
based on the roadmap
Medium tolong term

Reputation

Main responses

Implementing the roadmap established(efforts to save energy associated withproduction activities, introducing
renewable energy, reducing CO2
emissions through products andcontributing to the environment)

Risks related to physical impact of climate change (risks leading to 4°C scenario)
DegreeofimpactHigh

Category

When risk
manifests

Main risks(Acute risks)
Increasingly severe typhoons, floods, and droughts,
etc.
Changes in climate patterns(Chronic risks)
Acute and Business continuity risk due to weather related
chronic
disasters thought to be the impact of climate change
physical risks such as rising sea levels and temperatures

Main responses

Developing response plans andstrengthening responses based on eachrisk scenario
・ Considering location, layout of
equipment, and changing climate
patterns bearing in mind flood
Short to longdamage when establishing new
termplants・ Strengthening measures to addressrisks for each manufacturing base
based on results of risk assessment
・ Strengthening supply chain BCP

Climate change-related opportunities
DegreeofimpactCategory

Main risks

When risk
manifests

Main responses

Medium tolong term

Developing new products that contributeto carbon neutrality based on the
Company’s core technologies andcollaboration and alliances with othercompanies
・ Developing reformer-based
integrated SOFC with highgenerating efficiency that cangenerate power from bio-fuels
・ Contributing to higher battery
efficiency using carbon nanotubes(conductive auxiliary agents, etc.)
・ Developing air purification
technologies, such as gas (CO2, etc.)
adsorption, utilizing proprietary
technologies for extraction, coating
and catalysts (honeycomb structure),
and thermally efficient firing jigs
・ Developing highly efficient anddurable water treatment membranes(UF/RO membranes)
・ Providing technology that
contributes to energy saving by
reducing weight and cycle times invehicles and other applications
through bonding of dissimilarmaterials utilizing bonding
technologies cultivated in corebusinesses

Enhancement of market value and increase inearnings through expansion in sales of innovative
products (services) that help mitigate and adapt toclimate change Expansion in demand for related products due topromotion of electrification
 Increase in need for air purification products,
including for CO2, to achieve carbon neutrality
 Expansion in renewable energy business Expansion in demand for low-carbon and energysaving productsHigh

Products
Services
Markets

・ Metrics and targets
The Group will aim for a 50% reduction of CO2 emissions in business activities by 2030 (compared tofiscal 2013) as a milestone toward the realization of carbon neutrality in 2050.

16

Fiscal 2023 performance on greenhouse gas (GHG) emissions
Category

FY2023 performance

Scope 1 *Direct GHG emissions from a company’s own use of fuel and other activities

36,574t-CO2

Scope 2 *Indirect GHG emissions from a company’s own use of electricity supplied by othercompanies

112,479t-CO2

Total (Scope 1 + 2)

149,054t-CO2

Note: 1. The Group’s CO2 emissions have obtained third party verification from SGS Japan Inc. since 2018. Fiscal 2023
CO2 emissions are scheduled to obtain third party verification from SGS Japan Inc. in December 2024.

Fiscal 2023 performance on reducing greenhouse gas (GHG) emissions
Category

FY2023 performance

Reduction in energy conservation

2,730t-CO2

Reduction in use of renewable energy

3,667t-CO2

Total (energy saving + renewable energy)

6,397t-CO2(Human capital)
・ Strategy
As the business environment undergoes major changes, the Group will strive to transform itself into anorganization that continues to provide new value in the mobility and non-mobility areas in order toachieve sustainable growth. The Group will start formulating a portfolio of human resources in order todefine the necessary human resource requirements to develop new businesses and expand market share
while maintaining competitiveness in the core businesses and to clarify the gaps with the current situation.
This will be the starting point for identifying the personnel issues to be addressed in order to realize themedium-term strategy and taking the appropriate measures to address them. The Group will also pursue
measures based on the three central themes of improvement in employee engagement, promotion ofdiversity, and development of human resources and skills in order to develop human resources who work
to bring about “the new FCC” of their own accord, building the foundation for generating innovation.
・ Metrics and targets
Three central themes for generating innovation
1) Improving engagement
The Company has positioned improving employee engagement as an important metric for“building the foundation for generating innovation” and began conducting an engagement survey infiscal 2023. It is planned to set targets and determine the direction of measures based on the resultsof the survey.
Furthermore, in order to develop an environment in which employees are healthy, energetic, andcan deliver high performance, the Company has started full-scale initiatives utilizing the CertifiedHealth & Productivity Management Outstanding Organizations Recognition Program framework.
The Company has been certified as an outstanding organization for two years in a row from fiscal
2022.
2) Promotion of diversity
In terms of “diversity,” female employees have traditionally tended to account for a small
proportion of core human resources at the Company. Therefore, first we will focus on “women’s
success in the workforce” and set a target under which the proportion of female employees
promoted to one position higher on the career ladder will be equal to the proportion of male
employees promoted to such positions by fiscal 2026, in order to foster an organizational culture inwhich women can play active roles.
3) Development of human resources and skills
The Company has established a systematic human resources training system in order to develop thenecessary human resources to accurately understand changes in the business environment and bringabout “the new FCC.” In fiscal 2024, new company-wide DX training will be introduced with theobjective of transforming the quality of value added.
17Moreover, in order to build the human resource foundation that will drive innovation, the Company
will first review the evaluation criteria for the role behavior required of management with the aimof creating a workplace environment in which employees are highly motivated, achieve their fullpotential, and take on challenges.
Going forward, the Company will gradually consider setting Group-wide metrics and targets for themeasures outlined above in conjunction with the transformation of the business portfolio.
For more details on human capital, please refer to the Sustainability Report(https://www.fccnet.co.jp/sustainability/efforts/report/)18

3. Business risks
Of the items related to the overview of business and financial information described in this Annual
Securities Report, the following are major risks that management recognizes could have significant effecton the financial position, operating results and cash flows of consolidated companies. Please note thatmatters concerning the future in this article were determined by the Group as of the filing date of thisAnnual Securities Report.
(1) Business development centered on clutch products
Under the basic policy of “Second Founding: towards the brand-new FCC,” set out in the 12th MediumTerm Management Plan, the Group has been working to enhance the profitability of its core clutchbusiness and to create new businesses. However, at present, the Group’s business operations are
centered on clutch products in its core businesses. Although clutch products are important functional
components of drive trains for automobiles and motorcycles driven by internal combustion engines,
clutch products may not be required in future with the spread of automobiles and motorcycles, etc. thatare not driven by internal combustion engines.
The automotive industry is currently facing an era of significant structural change. Near-term growth isanticipated for both motorcycle clutches and automobile clutches, so the Group is definitely respondingby evolving the core businesses. The Group is also proactively proceeding with new businessdevelopment based on themes of electrified products, energy solutions, and environmental purification.
(2) Dependence on certain industries and customers
Most clutch products manufactured and sold by the Group are for the automobile and motorcycle
industries. As a result, the financial performance of the Group may be affected by future trends in theseindustries. In addition, the Group’s revenue from the Honda Motor Group accounted for approximately
38% of the Group’s revenue in the fiscal year ended March 31, 2024. The financial performance of theGroup could be significantly affected, therefore, by the Honda Motor Group’s future business strategy,
procurement policies and other decisions.
The Group is striving to acquire new customers through sales expansion in addition to sales to the
Honda Motor Group, which has led to the receipt of orders, and the Group continues to actively makeproposals to customers.
(3) Development of overseas business
The Group operates globally, centering on Japan, the U.S. and Asia. Accordingly, the Group’s financial
performance could be affected by following factors: political and economic trends in various countries;
fluctuations in foreign exchange markets; unforeseen changes in laws and regulations; international taxrelated risks, such as transfer pricing taxation; and the occurrence of natural disasters.
To conduct business while having an appropriate understanding and reducing country risk, the Group
strives to collect and appropriately address local information through overseas subsidiaries, etc. while
utilizing a system of mutual synergies within the Group.
(4) Competition faced by the GroupInternational competition in the automobile and motorcycle industries has become extremely fierce.
While the Group is endeavoring to sustain and strengthen its competitiveness in various areas, ranging
from product development and manufacturing to quality assurance, certain obstacles may make it
difficult to do so in the future, in which case the Group’s market share and earnings capability could
decline.
The Group strives for further expansion of its global share by improving product competitiveness inareas such as quality, cost, and delivery.
(5) Compensation for product defects
Although the Group is doing all it can to ensure sufficient quality control, it is not possible to completely
prevent defects and deficiencies in all products. In addition, large recalls by final assemblers caused by
defects in products supplied by the Group could result in enormous costs to the Group, as well as in19

serious damage to its reputation. In such an event, product defect liability could have a serious impact
on both the Group’s financial performance and financial condition.
The Group aims to further improve quality throughout all business activities and is taking initiatives tostrengthen the quality assurance structure.
(6) Impacts of natural disasters and earthquakes, etc.
The Group is implementing measures to minimize potential risks of disruptions to its production lines
caused by major natural disasters. There is no guarantee, however, that it will be able to completely
avoid or reduce damage. In this respect, the Group’s principal manufacturing facilities are concentrated
notably in western Shizuoka, and this area lies within a region that is likely to be affected by the widely
predicted Tokai and Tonankai earthquakes. The occurrence of such a major disaster could have anenormous impact on the Group’s manufacturing facilities and cause a significant reduction in its
production capacity.
The Group has taken action necessary to continue operations in emergencies triggered by major natural
disasters. This includes the preparation of a risk response manual and the creation of a business
continuity plan (BCP). In response to COVID-19, initiatives have been implemented to prevent the
spread of infection, prioritizing the safety of employees and their families as well as related person.
Measures have also been taken to minimize the impact on business in light of requests from eachcountry’s government and local government bodies, etc.

20

4. Management analysis of financial position, operating results and cash flows(1) Overview of operating results, etc.
The Group’s financial position, operating results and cash flows (hereinafter “operating results, etc.”)
for the fiscal year ended March 31, 2024 were as follows.
1) Financial position and operating results
Observing the economic status as of the fiscal year ended March 31, 2024, the outlook remained
uncertain due to rising commodity prices, and fluctuations in financial and capital markets. In Japan,
there was a moderate recovery in the economy, despite some signs of standstill. Overseas, the U.S.
economy remained strong. In Asia, while the Chinese economy recovered but lacked strength and theASEAN region economies slowed, the Indian economy continued to enjoy high growth.
In the automotive industry, the impact from soaring prices of raw materials remained, but production
recovered as semiconductor shortages eased. In the automotive market, new car sales in Japan
increased year-on-year for the full year despite a decline in the fourth quarter due in part to supply side
factors as production overall recovered. Overseas, the U.S. market remained strong. In China, althoughcompetition for sales remained intense, market growth was driven by an increase in sales of newenergy vehicles. In the motorcycle market, demand remained solid in Indonesia and India.
In this situation, under the 12th Medium-Term Management Plan starting in fiscal 2023, the Group
worked to maximize revenue in the core clutch business to strengthen its management base and toproactively develop new businesses in the EV/CASE area and the non-mobility sector to transformthe business portfolio.
As a result, during the fiscal year ended March 31, 2024, revenue increased by 9.7% from the previous
fiscal year to ¥240,283 million due to the increase in sales in India, Indonesia, and the U.S., in addition
to the impact of depreciation in the yen. Operating profit increased by 26.9% from the previous fiscal
year to ¥15,102 million and profit before income taxes increased by 40.5% from the previous fiscal
year to ¥19,169 million. Profit attributable to owners of parent increased by 27.9% from the previous
fiscal year to ¥12,231 million.
The following are the business results in each operating segment. Starting from the fiscal year ended
March 31, 2024, the Company changed its reportable segments from the previous two segments,“Motorcycle clutches” and “Automobile clutches,” to three segments, “Motorcycles business,”“Automobiles business,” and “Non-mobility business.” The figures for the fiscal year ended March
31, 2023 have been reclassified reflecting the reportable segments following the above segmentchanges for comparison.
Motorcycles Business
An increase in sales of motorcycle clutches in India and Indonesia, in addition to the impact ofdepreciation of the yen, led to revenue increasing by 5.9% from the previous fiscal year to ¥106,925
million. Operating profit decreased by 1.9% from the previous fiscal year to ¥9,547 million mainly
due to higher research and development expense.
Automobiles Business
An increase in sales of automobile clutches in the U.S. and the impact of depreciation of the yen led
to revenue increasing by 13.0% from the previous fiscal year to ¥133,340 million. Operating profit
increased by 85.4% from the previous fiscal year to ¥8,287 million.
Non-mobility business
Revenue increased by 45.3% from the previous fiscal year to ¥17 million, and the segment recorded a¥2,732 million operating loss compared to a ¥2,296 million operating loss recorded in the previous
fiscal year.
2) Cash flows
As of the end of the fiscal year under review, cash and cash equivalents (hereinafter “net cash”) totaled¥82,028 million.
Cash flow positions in the fiscal year under review and the factors thereof are as follows.
21

Cash flows from (used in) operating activities
Net cash from operating activities was ¥35,383 million. The reasons for the increase are mainly due
to profit before income taxes of ¥19,169 million and depreciation and amortization expense of ¥12,861
million. The reasons for the decrease are mainly due to finance income and finance costs of ¥3,747
million and income taxes paid of ¥7,085 million.
Cash flows from (used in) investing activities
Net cash used in investing activities was ¥7,433 million. This is mainly due to purchase of property,
plant and equipment of ¥8,370 million.
Cash flows from (used in) financing activities
Net cash used in financing activities was ¥4,824 million. This is mainly due to payments for acquisitionof interests in subsidiaries from non-controlling interests of ¥1,292 million and cash dividends paid of¥2,981 million.
3) Performance of production, orders received and sales(i) Production performance
Production performance by segment for the fiscal year under review is as shown below.
Segment nameFiscal year ended March 31, 2024

Year-on-year comparison (%)

Motorcycles business (Millions of yen)

107,032

105.6

Automobiles business (Millions of yen)

133,613

113.0

17

145.3

240,662

109.6

Non-mobility business (Millions of yen)
Total (Millions of yen)
Note: Amounts are based on sales prices.

(ii) Performance of orders received
Performance of orders received by segment for the fiscal year under review is as shown below.
Segment name

Orders received(Millions of yen)

Year-on-yearcomparison (%)

Motorcycles business

107,689

Automobiles business

135,011
17

145.3

–

–

242,717110.5

20,800113.3

Non-mobility business
Total

Order backlog(Millions of yen)

Year-on-yearcomparison (%)

106.5

8,528

109.8

113.9

12,271115.8

Note: Amounts are based on sales prices.

(iii) Sales performance
Sales performance by segment for the fiscal year under review is as shown below.
Segment nameFiscal year ended March 31, 2024

Year-on-year comparison (%)

Motorcycles business (Millions of yen)

106,925

Automobiles business (Millions of yen)

133,340

113.0

Non-mobility business (Millions of yen)

17

145.3

240,283

109.7

Total (Millions of yen)

105.9

Note: The table below shows sales results by major transaction partner and the ratio of those sales results to total sales results
for the last two fiscal years.
Transaction partner

Fiscal year ended March 31, 2023

Fiscal year ended March 31, 2024

Amount(Millions of yen)Amount(Millions of yen)

Ratio (%)

Ratio (%)

Ford Motor Company

40,08518.3

45,028

18.7

General Motors Company

22,133

10.1

24,63010.3

Honda Motor Co., Ltd.

8,988

4.1

10,086

4.2

22

(2) Details of analysis and considerations regarding the status of operating results etc., from management’s
perspective
The details of recognition as well as analysis and considerations regarding the status of operating results
etc. of the Group, from management’s perspective are as follows. Please note that matters concerning
the future in this article were determined as of the filing date of this Annual Securities Report.
1) Recognition as well as analysis and considerations of status of financial position and operating results
Analysis of operating results(Revenue)
Revenue for the fiscal year under review increased by 9.7% from the previous fiscal year to ¥240,283
million.
Revenue increased due to the currency exchange impact of the weaker yen in addition to the increasein sales of motorcycle clutches in India and Indonesia and the increase in sales of automobile clutches
in the U.S.
(Operating profit)
Operating profit for the fiscal year under review increased by 26.9% from the previous fiscal year to¥15,102 million.
Operating profit increased due in part to the effect of revenue growth, despite increases in researchand development expense and other SG&A expenses.
(Profit before income taxes)
Profit before income taxes for the fiscal year under review increased by 40.5% from the previous fiscal
year to ¥19,169 million.
(Profit attributable to owners of parent)
Profit attributable to owners of parent for the fiscal year under review increased by 27.9% from theprevious fiscal year to ¥12,231 million.
Analysis of financial position(Current assets)
At the end of the fiscal year under review, current assets were ¥162,833 million, up ¥30,644 million
compared with the end of the previous fiscal year. This is mainly due to an increase of ¥28,289 million
in cash and cash equivalents.
(Non-current assets)
At the end of the fiscal year under review, non-current assets were ¥82,171 million, up ¥3,733 million
compared with the end of the previous fiscal year. This is mainly due to an increase of ¥4,158 million
in other financial assets in spite of a decrease of ¥500 million in goodwill and intangible assets.
(Current liabilities)
At the end of the fiscal year under review, current liabilities were ¥46,183 million, up ¥7,880 million
compared with the end of the previous fiscal year. This is mainly due to increases of ¥4,902 million inprovisions, ¥1,980 million in trade and other payables and ¥892 million in other current liabilities.
(Non-current liabilities)
At the end of the fiscal year under review, non-current liabilities were ¥12,218 million, up ¥2,019
million compared with the end of the previous fiscal year. This is mainly due to an increase of ¥2,355
million in deferred tax liabilities in spite of a decrease of ¥392 million in defined benefit liability.
(Equity)
At the end of the fiscal year under review, equity was ¥186,602 million, up ¥24,478 million comparedwith the end of the previous fiscal year. This is mainly due to increases of ¥15,552 million in othercomponents of equity and ¥9,685 million in retained earnings.

232) Details of analysis and considerations regarding cash flows and information pertaining to capital
resources and funding liquidity
Analysis of cash flows
Cash flows for the fiscal year under review are provided in “II. Overview of business, 4. Management
analysis of financial position, operating results and cash flows, (1) Overview of operating results, etc.,
2) Cash flows.”
Analysis of capital resources and funding liquidity
The Group’s financial policy is to maintain the sound balance sheet taking into account appropriate
liquidity, etc. in securing funds for business activities. The Group procures working funds, funds forcapital investment and funds for research and development investment from internal funds, mainly
sourced from cash flows from operating activities, and bank borrowings. The Group considers that it
has sufficiently secured the level of funds currently required.
3) Significant accounting estimates and assumptions used in such estimates
The consolidated financial statements of the Group have been prepared in accordance with IFRS
pursuant to the provisions of Article 93 of the Ordinance on Terminology, Forms and Preparation
Methods of Consolidated Financial Statements. Estimates that are deemed necessary in order toprepare for the consolidated financial statements have been made based on reasonable criteria.
Note that the material accounting policy information, accounting estimates and assumptions used insuch estimates applied in the consolidated financial statements of the Group are provided in “V.
Financial information, 1. Consolidated financial statements, etc., (1) Consolidated financial statements,
Notes to consolidated financial statements, 2. Basis of preparation, (6) Significant accounting
estimates and judgments, and 3. Material accounting policy information.”
5. Critical contracts for operation
Not applicable.
6. Research and development activities
As a manufacturer of functional components for transportation vehicles, the Group has adopted the basic
R&D policy of identifying customer needs and providing products that give customers excellent
performance through the application of creative ideas and technologies. Accordingly, it carries out bothbasic research on friction materials for use in motorcycle, automobile and general-purpose clutches andR&D on the clutches themselves as component, including R&D on production technologies for use in
their manufacture.
The Group has conducted research on porous fiber catalytic sheet (paper catalyst) and R&D on its
application as a paper catalyst to clean engine exhaust emissions, using technologies it has accumulated
through experience in manufacturing clutches (and friction materials employed in clutches) and in
making improvements to existing products. The Group is currently taking initiatives in new businessdevelopment in areas such as electrified products, energy solutions, and environmental purification withthe aim of expanding into business areas other than clutches.
During the fiscal year ended March 31, 2024, research and development expense (including expenses
recognized as development assets) amounted to ¥7,551 million.
The following is a summary of research and development expense by segment during the fiscal year
ended March 31, 2024.
Motorcycles BusinessIn the core clutch business, research and development activities are underway to improve product appeal,
including clutch operability, and reduce costs. Research and development of wet friction materials formotorcycles and dry friction materials for scooters provided a foundation for these activities.

24

In new businesses, research and development activities are underway to commercialize power units forsmall EVs in the EV/CASE area, including the motor key components such as motor cores and, motor
assemblies, as well as PCUs.
Research and development expense in the motorcycles business amounted to ¥2,166 million.
Automobiles BusinessIn the core clutch business, research and development activities are underway to make clutches morecompact and lightweight, less expensive to manufacture, and more fuel efficient. Research anddevelopment for automatic transmissions, CVTs and wet friction materials for hybrids provided afoundation for these activities.
In new businesses, research and development activities are underway to commercialize motor core
submodules in the EV/CASE area.
Research and development expense in the automobiles business amounted to ¥2,655 million.
Non-mobility businessResearch and development activities are underway for products that lead to the cleansing of the waterand atmosphere or to recycling systems in the environmental sector as well as fuel cells and catalysts inthe energy sector.
Research and development expense in the non-mobility business amounted to ¥2,729 million.

25

III. Information about facilities
1. Overview of capital investments, etc.
During the fiscal year ended March 31, 2024, the Company made total capital investments (including
investments on intangible assets) of ¥8,273 million. The principal capital investment details were:acquisition of buildings in Japan; expanding production capacity for automobile clutches in the U.S.; thenew motor core business in China; and expanding production capacity for motorcycle clutches and the
new motor core and motor assembly businesses in India. The breakdown of capital investments bybusiness segment is ¥3,297 million for the motorcycles business, ¥4,074 million for the automobiles
business, and ¥902 million for the non-mobility business.
(1) Reporting company
Acquisition of buildings(2) Subsidiaries
New businesses and production capacity expansion at FCC CLUTCH INDIA PRIVATE LIMITED
Production capacity expansion at FCC (Adams), LLC
Production capacity expansion at FCC (VIETNAM) CO., LTD.
New businesses and production capacity expansion at CHINA FCC FOSHAN CO., LTD.
Production capacity expansion at PT. FCC INDONESIA
2. Major facilities
Major facilities of the Group are as follows:(1) Reporting company
As of March 31, 2024
Carrying amount (Millions of yen)
Name
(Location)

Segment nameFacilities

Buildings
andstructures

Machinery,equipment
andvehicles

Land
(m2)

Other

Total

Number of
employees

Motorcycles
business
Automobile
business

Manufacturing
facilities forclutches and
EV-related
products

1,061

886

534
(26,216)

407

2,889

140
[13]

Motorcycles
Watagashima Factorybusiness(Tenryu-ku, HamamatsuAutomobiles
shi, Shizuoka)
business

Manufacturing
facilities forclutches and
EV-related
products

1,282

991

766
(61,268)

223

3,263

191
[30]

Suzuka Factory(Suzuka-shi, Mie)

Motorcycles
business
Automobiles
business

Manufacturing
facilities forclutches

1,353

532

1,228
(50,477)

126

3,240

157
[70]

R&D Center(Hamana-ku,
Hamamatsu-shi,
Shizuoka)Motorcycles
business
Automobiles
business
Non-mobility
business

Testing
apparatus andmeasuring
instruments

488

557

216
(12,093)

186

1,447

194
[89]

Hamakita Factory(Hamana-ku,
Hamamatsu-shi,
Shizuoka)26

(2) Domestic subsidiaries
As of March 31, 2024
Carrying amount (Millions of yen)
Name
(Location)

FLINT CO., LTD.
(Okagaki town, Ongagun, Fukuoka)

Segment name

Motorcycles
business
Automobiles
business

Facilities

Buildings
andstructures

Machinery,equipment
andvehicles

Land
(m2)

1,448

662

269
(28,704)

Manufacturing
facilities formolds for EVrelated products

Other

Total

35

2,416

Number of
employees

45[3](3) Overseas subsidiaries
As of March 31, 2024
Carrying amount (Millions of yen)
Name

Location

Segment
nameFacilities

Machinery,
Buildings
equipment
andandstructures
vehicles

Land
(m2)

Other

Total

Number of
employees

FCC (INDIANA),
LLC

Indiana, U.S.

Manufacturing
Automobiles
facilities forbusinessclutches

1,667

2,868

110
(246,263)

123

4,771

529
[33]

FCC (North
Carolina), LLC

North
Carolina,
U.S.

Motorcycles
Manufacturingbusinessfacilities for
Automobiles
clutchesbusiness

3,255

345

42
(366,274)

20

3,665

257
[3]

FCC (Adams), LLC

Indiana, U.S.

Manufacturing
Automobiles
facilities forbusinessclutches

4,199

5,401

70
(161,880)

571

10,242432[50]

FCC AUTOMOTIVE
San Luis
PARTS DE
Potosi,
MEXICO, S.A. DE
MexicoC.V.

Manufacturing
Automobiles
facilities forbusinessclutches

610

70

108
(81,837)

78

868

295

FCC (THAILAND)
CO., LTD.

Bangkok,ThailandMotorcycles
Manufacturingbusinessfacilities for
Automobiles
clutchesbusiness

409

387

776
(87,890)

278

1,852

414
[337]

FCC CLUTCHINDIA PRIVATELIMITED

Haryana,
India

Manufacturing
Motorcycles
facilities forbusinessclutches andAutomobiles
EV-related
business
products

1,000

2,065

580
(114,619)

2,116

5,763

726
[2,585]

PT. FCCINDONESIA

Karawang,Indonesia

Motorcycles
Manufacturingbusinessfacilities for
Automobiles
clutchesbusiness

430

1,557

–
(72,812)

297

2,286

1,155
[504]

FCC (VIETNAM)
CO., LTD.

Hanoi,
VietnamMotorcycles
Manufacturingbusinessfacilities for
Automobiles
clutchesbusiness

764

1,869

–
(45,816)

798

3,432

1,259

Manufacturing
facilities for
CHINA FCC
Guangdong, Automobiles
clutches and
FOSHAN CO., LTD. China
business
EV-related
products

213

1,886

–
(59,108)

1,042

3,142

303
[87]

Notes: 1. The carrying amount of “Other” assets relates to tools, furniture and fixtures, right-of-use assets and intangible assets
and includes construction in progress. The amounts shown above do not include consumption taxes.
2. Of the land of FCC (North Carolina), LLC of 366,274 m2, 11,266 m2 was leased.
3. The number of employees shown in brackets is the number of temporary employees at the end of the period.

27

3. Planned additions, retirements, etc. of facilities(1) Planned additions, etc. of important facilities
During the next fiscal year (from April 1, 2024 to March 31, 2025), the Company plans to make total
capital investments of ¥15,210 million. The principal capital investment items will be acquisition ofbuildings and new businesses in Japan as well as new businesses and expansion of production capacity
in India and China. The breakdown of planned capital investments by business segment will be ¥4,540
million for the motorcycles business, ¥7,210 million for the automobiles business, and ¥3,460 million
for the non-mobility business.
・Reporting company
Acquisition of buildings and new businesses
・Subsidiaries
New businesses and production capacity expansion at FCC CLUTCH INDIA PRIVATE LIMITEDNew businesses and production capacity expansion at CHINA FCC FOSHAN CO., LTD.
(2) Retirement, etc. of important facilities
The Company has no plan for the sales/retirement of important facilities, with the exception of theregular upgrading of facilities.

28

IV. Information about reporting company
1. Information about shares, etc.
(1) Total number of shares, etc.
Total number of shares
Class

Total number of authorized shares (Shares)

Ordinary shares

90,000,000
Total

90,000,000(2) Changes in number of shares issued, issued capital, etc.

Date

Increase(decrease) in
total number ofshares issued(Shares)

April 1, 2006
(Note)

26,322,015

Balance of total
Increase
number of(decrease) inshares issued
issued capital(Shares)(Millions of yen)
52,644,030

Balance ofissued capital(Millions ofyen)

Increase(decrease) in
capital reserve(Millions ofyen)

Balance ofcapital reserve(Millions of
yen)

4,175

–

4,555

–

Note: This was due to a 2-for-1 share split.

(3) Shareholding by shareholder category
As of March 31, 2024
Shareholding status (Number of shares per share unit: 100 shares)
Category

Financial
Foreign investors
Financial instruments
Other
Individuals,
institutions
business corporations Companies, Individuals
etc.
etc.
operators

Publicsector

Total

Shares lessthan oneunit(Shares)Number ofshareholders

–

28

22

178

193

37

27,77828,236–

Number ofshares held
(Units)–

112,538

9,421

152,017

112,80768

139,388526,239

20,130Shareholding
ratio (%)

–

21.39

1.79

28.89

21.44

0.01

26.49

100.00–Notes: 1. 2,898,297 treasury shares are included in “Individuals, etc.” as 28,982 units and “Shares less than one unit” as 97
shares.
2. “Other corporations” column above includes 37 units of shares held in the name of Japan Securities Depository
Center, Incorporated.

29

(4) Major shareholders
As of March 31, 2024
Number of shares
held(Thousands ofshares)Shareholding ratio(excluding treasury
shares) (%)

2-1-1 Minami-Aoyama, Minato-ku,
Tokyo10,881

21.87

The Master Trust Bank of Japan, Ltd. AKASAKA INTERCITY AIR, 1-8-1(Trust Account)
Akasaka, Minato-ku, Tokyo

5,247

10.55

Name

Address

Honda Motor Co., Ltd.

Y.A Co., Ltd.

38-28 Yamate-cho, Chuo-ku,
Hamamatsu-shi, Shizuoka

2,556

5.14

SMBC Trust Bank Ltd. (Sumitomo
Mitsui Banking Corporation
Retirement Benefit Trust Account)

1-3-2 Marunouchi, Chiyoda-ku,
Tokyo

2,483

4.99

Custody Bank of Japan, Ltd. (Trust
Account)

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

2,090

4.20

7000-36 Nakagawa, Hosoe-cho,
Hamana-ku, Hamamatsu-shi,
Shizuoka

884

1.78

Ei Yamamoto

Chuo-ku, Hamamatsu-shi, Shizuoka

800

1.61

STATE STREET BANK AND
TRUST COMPANY 505223(Standing Proxy: Settlement &Clearing Services Department,
Mizuho Bank, Ltd.)

P.O. BOX 351 BOSTONMASSACHUSETTS 02101 U.S.A.
(Shinagawa Intercity Building A, 215-1 Konan, Minato-ku, Tokyo)

608

1.22

JP MORGAN CHASE BANK
385781(Standing Proxy: Settlement &Clearing Services Department,
Mizuho Bank, Ltd.)

25 BANK STREET, CANARY
WHARF, LONDON, E14 5JP,
UNITED KINGDOM(Shinagawa Intercity Building A, 215-1 Konan, Minato-ku, Tokyo)

531

1.07

Japan Philanthropic Foundation

9th Floor Saiwai Building, 1-3-1
Uchisaiwaicho, Chiyoda-ku, Tokyo

500

1.01

–

26,585

53.44

F.C.C. Supplier Stock Ownership
Association

Total

Notes: 1. In addition to the above, the Company held 2,898 thousand treasury shares.
2. Of the above number of shares held, the number of shares in association with fiduciary activities is as follows:
The Master Trust Bank of Japan, Ltd. (Trust Account)
SMBC Trust Bank Ltd. (Sumitomo Mitsui Banking Corporation Retirement Benefit
Trust Account)
Custody Bank of Japan, Ltd. (Trust Account)

5,247 thousand shares
2,483 thousand shares
2,090 thousand shares

3. SMBC Nikko Securities Inc. and its joint holders, Sumitomo Mitsui Banking Corporation and Sumitomo Mitsui DS
Asset Management Company, Limited, made the change report for the substantial shareholding report available forpublic inspection as of May 11, 2022, describing that each of these companies held shares as follows as of April 29,
2022. Since the Company could not confirm the actual number of shares held by them as of March 31, 2024, they
were not included in the above major shareholders.
Name

Address

Number of shares,
etc. held(Shares)

Shareholding ratio(%)

SMBC Nikko Securities Inc.

3-3-1 Marunouchi, Chiyoda-ku,
Tokyo

Shares209,360

0.40

Sumitomo Mitsui Banking
Corporation

1-1-2 Marunouchi, Chiyoda-ku,
Tokyo

Shares2,483,600

4.72

Sumitomo Mitsui DS AssetManagement Company,
LimitedToranomon Hills Business Tower
26F, 1-17-1 Toranomon, Minato-ku,
TokyoShares117,100

0.22

4. Mizuho Bank, Ltd. and its joint holders, Mizuho Securities Co., Ltd., Mizuho Trust & Banking Co., Ltd. and AssetManagement One Co., Ltd. made the change report for the substantial shareholding report available for public
inspection as of November 8, 2023, describing that each of these companies held shares as follows as of October30

31, 2023. Since the Company could not confirm the actual number of shares held by them as of March 31, 2024,
they were not included in the above major shareholders.
Name
Mizuho Bank, Ltd.

Number of shares,
etc. held(Shares)

Address

Shareholding ratio(%)

1-5-5 Otemachi, Chiyoda-ku, Tokyo

Shares979,300

1.86

Mizuho Securities Co., Ltd.

1-5-1 Otemachi, Chiyoda-ku, Tokyo

Shares

6,800

0.01

Mizuho Trust & Banking
Co., Ltd.

1-3-3 Marunouchi, Chiyoda-ku,
Tokyo

Shares429,000

0.81

Asset Management One Co.,Ltd.

1-8-2 Marunouchi, Chiyoda-ku,
Tokyo

Shares754,800

1.43

2. Dividend policy
The Company considers returning profits to shareholders to be one of the top management issues. Ourbasic policy is to continue to pay a stable dividend from a comprehensive point of view based on
consolidated financial performance and dividend payout ratio, etc., while striving to improve corporate
value by making capital investments and carrying out research and development activities necessary for
future growth and thus maintaining and strengthening its competitiveness.
The Company’s basic policy on dividend payments is to pay dividends twice a year in the form of interim
dividends and year-end dividends.
Based on the foregoing policy, the Company paid a total dividend for the fiscal year under review of ¥74
per share (of which ¥30 was paid out as an interim dividend). This resulted in a dividend payout ratio of
30.1%.
The Company uses internal reserves to make investments for future business expansion, etc.
The Articles of Incorporation were amended at the 91st Ordinary General Meeting of Shareholders heldon June 22, 2021 to allow for dividends from surplus in accordance with a resolution of the Board of
Directors based on the provisions of Article 459, paragraph 1 of the Companies Act.
Dividends for the fiscal year under review were as follows.
Total amount ofdividends(Millions of yen)

Dividends per share(Yen)

Resolution at a Board of Directors meeting
held on November 2, 2023

1,492

30

Resolution at a Board of Directors meeting
held on May 10, 2024

2,188

44

Resolution date31

3. Status of corporate governance, etc.
(1) Overview of corporate governance1) Basic policy regarding corporate governance
Based on its corporate philosophy, the Company endeavors to enhance its corporate governance as
one of the top management issues, aiming to build trust of its stakeholders, including shareholders,customers, employees, and local communities, conduct an agile and decisive decision-making in a fair
and transparent way and pursue its continuous growth and an increase in corporate value over the
medium- to long-term.
< Corporate philosophy >“F.C.C. Co., Ltd. is committed to making a contribution to society by supplying products and services
that make the best of ideas and technology to satisfy customers in every way.”2) Summary of system of corporate governance and reasons for adopting the system(i) Summary of the system of corporate governance
The Company has adopted an institutional design of a company with an Audit and Supervisory
Committee.
The Board of Directors comprises ten Directors, of whom five are Outside Directors, and thePresident and Representative Director serves as its chairperson. In addition to making decisions on
matters prescribed by laws and regulations and execution of important operations, the Board of
Directors oversees the execution of duties of the Directors. The Audit and Supervisory Committee iscomposed of four Directors who are Audit and Supervisory Committee Members, of whom three are
Outside Directors, and the Audit and Supervisory Committee Member (full time) serves as its
chairperson. In accordance with auditing policies, plans and division of responsibility established by
the Audit and Supervisory Committee, each Audit and Supervisory Committee Member participates
in meetings of the Board of Directors and other important meetings, and audits and oversees theexecution of duties of the Directors and the development and operation of the Company’s internal
control system by examining the status of operations and assets of the Company. As for the
Accounting Auditor, the Company has concluded an audit contract with Yasumori Audit Corporation
to undergo accounting audits in compliance with the Companies Act and Financial Instruments andExchange Act. In addition, the Nomination and Remuneration Advisory Committee comprises six
Directors, of whom five are Outside Directors and the President and Representative Director serves
as its chairperson, and deliberates and reports on findings pertaining to the nomination andremuneration of Directors, etc.
The following diagram shows the relationships among the Company’s organizations and internal
control as of June 20, 2024.

32

Note: The names of the Members of the Board of Directors and the Audit and Supervisory Committee are provided in “(2)Information about officers, 1) Officers.”
The Nomination and Remuneration Advisory Committee is comprised of the President and Representative Director andOutside Directors.

(ii) Reasons for adopting the system of corporate governance described above
With the aim of strengthening the oversight function of the Board of Directors, improving thetransparency and soundness of management and accelerating decision-making, the Company has
adopted an institutional design of a company with an Audit and Supervisory Committee. The
Company has a Board of Directors to oversee the execution of duties of the Directors. The Board of
Directors comprises Directors who are well versed in the operations of the Company and Outside
Directors with an objective, broad-ranging and in-depth perspective. The Nomination andRemuneration Advisory Committee has been established to strengthen the independence andobjectivity of the Board of Directors’ functions pertaining to the nomination and remuneration of
Directors, etc. and the accountability of the Board of Directors. In light of its business contents andscale, the Company considers its current corporate structure as appropriate.
3) Other matters regarding corporate governance
Basic policy regarding the internal control system
The Company resolved the following basic policy regarding the systems to ensure the proper
execution of operations prescribed in the Companies Act at a meeting of the Board of Directors.
• System to ensure that the execution of duties by Directors and employees of the Company andGroup companies complies with laws and regulations and the Articles of Incorporation
The Company shall establish a charter of corporate conduct that is shared by the entire Group andimplement it thoroughly to ensure that the execution of duties by Directors and employees complies
with laws and regulations and the Articles of Incorporation and earns the trust of society.
Apart from appointing the Compliance Officer, who is in control of compliance, the Company shallestablish an internal reporting system to promote compliance.
• System for storing and managing information on the execution of duties by the Company’s
Directors
The Company shall establish the information management policy and various regulations, andappropriately store and manage information regarding the execution of duties by the Directors.
33• Regulations and other systems for managing risk of losses of the Company and Group companies
The Company shall appoint a Risk Management Officer, who is in control of risk management,
identify risk in the Group’s business activities and develop a system for the appropriate managementof the identified risk.
The Company’s Board of Directors shall evaluate the management risk of important matters for theentire Group and determine the response.
• System to ensure the efficient execution of duties by Directors of the Company and Group
companies
A meeting of the Board of Directors of the Company shall be held once or more in three months
and on an extraordinary basis whenever necessary to take decisions on legally required matters andimportant operations, and oversee the execution of duties by the Directors.
The Company shall expedite and increase the efficiency of the management decision-making
process using meetings such as management meetings and the executive officer system.
The Company shall draw up a medium-term management plan and annual business plan to manage
the progress of operations and promote the effective use of management resources of the entire
Group.
The Company shall establish segregation of duties, reporting lines, and other organizational
standards in the regulations for executing duties, etc.
• System for reporting from Group companies to the Company and other systems to ensure the proper
execution of operations within the corporate group comprising the Company and Group companies
The Company shall establish the charter of corporate conduct, group policies, group guidelines andvarious regulations with the aim of properly managing Group companies in accordance with theirscale of business and significance, etc.
The Company shall oblige Group companies to report to it on a regular basis and develop a system
for having them report specified important matters promptly.
The Internal Audit Division of the Company shall audit the Company and Group companies
regularly or whenever necessary.
• Matters concerning Directors and employees who assist the Audit and Supervisory Committee of
the Company in its duties
The Company shall establish the Internal Audit Division as an organization to assist the duties of
the Audit and Supervisory Committee. The Audit and Supervisory Committee shall have
responsibility for the Internal Audit Division, and the appointment, dismissal, personnel change,
and revision of wages of employees in the Internal Audit Division shall be determined by the Boardof Directors upon consent of the Audit and Supervisory Committee. The Company shall not have
Directors who assist the Audit and Supervisory Committee in its duties.
• System for reporting to the Audit and Supervisory Committee of the Company
Audit and Supervisory Committee Members shall attend meetings of the Board of Directors andother important meetings, and be allowed to request Directors and employees of the Company andGroup companies to report to them whenever necessary.
Upon receiving a request from the Audit and Supervisory Committee for a report, the Director or
employee shall report to it promptly and appropriately.
The Company shall establish an internal reporting system to ensure an appropriate system forreporting to the Audit and Supervisory Committee.
The Company shall develop a system to prohibit unfavorable treatment of a reporting party in its
operation rules for the internal reporting system.
• Matters regarding the policy for handling expenses and debts incurred for executing duties by the
Audit and Supervisory Committee Members of the Company

34

If the Audit and Supervisory Committee requests payment of expenses needed for executing its
duties, the Company shall pay such expenses promptly.
The Audit and Supervisory Committee shall factor expenses deemed necessary for executing its
duties into the budget in advance. Provided, however, that the Audit and Supervisory Committee
shall be allowed to request reimbursement of emergency or extraordinary expenses after the fact.
• Other systems to ensure audits by the Audit and Supervisory Committee of the Company are
conducted effectively
The Audit and Supervisory Committee shall exchange opinions with Representative Director,
Directors and Accounting Auditor regularly or whenever necessary.
The Audit and Supervisory Committee shall conduct audits effectively by cooperating closely with
the Internal Audit Division.
Overview of limited liability agreements
In accordance with the provisions of Article 427, paragraph 1 of the Companies Act, the Company has
concluded agreements limiting the extent of any liability for statutory compensation as stipulated in
Article 423, paragraph 1 of the said Act with the Outside Directors and the Directors who are Audit
and Supervisory Committee Members. The limits on compensation stipulated in these agreements are
the minimum amounts prescribed in Article 425, paragraph 1 of the said Act.
Overview of a directors and officers liability insurance policy
The Company has concluded a Directors and Officers liability insurance agreement with an insurancecompany, as prescribed in Article 430-3, paragraph 1 of the Companies Act, and the Company bears
the total amount of premiums. Under this agreement the insurance company covers damages that may
arise from the insured persons assuming responsibility for the execution of their duties or receiving
claims related to the pursuit of such responsibility and the agreement is renewed annually. The
Company plans to renew the agreement under the same terms and conditions when it is next renewed.
Matters normally requiring adoption of a resolution by the General Meeting of Shareholders, which
may be decided by the Board of Directors• Decision-making body for dividends of surplus
To enable flexible return of profits to shareholders, the Company provides in its Articles ofIncorporation that, except as otherwise prescribed by laws and regulations, it may make decisions on
dividends of surplus and other matters set forth in each item of Article 459, paragraph 1 of theCompanies Act by resolution of the Board of Directors.
• Exemption of Directors from liability
To create an environment where Directors are able to fulfill their expected roles adequately, theCompany provides in its Articles of Incorporation that, pursuant to the provisions of Article 426,
paragraph 1 of the Companies Act, it may exempt Directors (including former Directors) fromliability as set forth in Article 423, paragraph 1 of the said Act within the limits stipulated by laws
and regulations based on a resolution of the Board of Directors.
Number of Directors
The Company states in its Articles of Incorporation that it shall have no more than 12 Directors (ofwhich, no more than 5 Directors are Audit and Supervisory Committee Members).

35Requirements for election of Directors
The Company states in its Articles of Incorporation that adoption of resolutions for the election of
Directors shall require that at least one-third of the shareholders entitled to execute voting rights bepresent, and that an affirmative vote be cast by a majority of such shareholders present. The Company
also states in its Articles of Incorporation that cumulative voting shall not be used for the election of
Directors.
Requirements for the adoption of special resolutions by the General Meeting of Shareholders
With the aim of ensuring the smooth operation of the General Meeting of Shareholders, the Company
states in its Articles of Incorporation that the adoption of a special resolution based on Article 309,
paragraph 2 of the Companies Act shall require that at least one-third of the shareholders entitled to
execute voting rights be present, and that an affirmative vote be cast by at least two-thirds of suchshareholders present.
Activity Status of the Board of Directors
In the fiscal year under review, the Company convened nine meetings of the Board of Directors andthe status of attendance of each individual Director is as follows.
Name

Number of committee
meetings held

Number of committee
meetings attended

Yoshitaka Saito

99

Kazuto Suzuki

99Atsuhiro Mukoyama

99Satoshi Nakaya

7

7

Kunihiro Koshizuka

99Kazunori Kobayashi

99Ryujiro Matsumoto99Masahide Sato99Kazumoto Sugiyama

9

9Mayumi Yamamoto

99Note: Satoshi Nakaya was appointed from the 93rd Ordinary General Meeting of Shareholders held on June 20,2023 and the table lists the number of committee meetings he attended following appointment.

The specific matters for consideration at the Board of Directors included supervision of the executionof duties by Directors, compliance, risk management, and the systems of Group companies. With
regard to the 12th Medium-Term Management Plan, with its first year in fiscal 2023, the Board of
Directors worked to achieve the targets set out in the annual business plan and reported regularly on
progress at meetings of the Board of Directors.
Activity Status of the Nomination and Remuneration Advisory Committee
In the fiscal year under review, the Company convened four meetings of the Nomination andRemuneration Advisory Committee and the status of attendance of each individual Nomination andRemuneration Advisory Committee Member is as follows.

36

Number of committee

Number of committee

meetings held

meetings attended

Yoshitaka Saito

4

4

Kunihiro Koshizuka

4

4

Kazunori Kobayashi

44Masahide Sato

44Kazumoto Sugiyama

4

4Mayumi Yamamoto

4

4

Name

The specific matters for consideration at the Nomination and Remuneration Advisory Committee
included the preparation of the draft proposal for the election of Directors to be submitted to theGeneral Meeting of Shareholders and a review of remuneration for officers.

37(2) Information about officers
1) Officers
Men: 8, Women: 2 (Percentage of female officers: 20.0%)
Title and position

President and Representative
Director

Name

Yoshitaka
Saito

Date of birth

Career summary

Term ofofficeFeb. 2009 Joined the Company
Jan. 2011 President and Director of FCC(INDIANA) Mfg., LLC (currently
FCC (INDIANA), LLC) President
and Director of FCC (INDIANA),
INC. (currently FCC (INDIANA),
LLC)
Jun. 2011 Director of the Company
Apr. 2012 Director, Head of business operationin North America of the Company
President and Director of FCC(North America), INC.
Jun. 2012 Managing Director, Head of
business operation in North Americaof the Company
November 29, Apr. 2013 Managing Director, Head of(Note 2)
1973
business operation of motorcycles
business of the Company
Apr. 2014 Managing Director, Head of
Purchasing, Head of business
operation in China and Risk
Management Officer of theCompany
Jun. 2018 Senior Managing Director, in chargeof Sales and Head of business
operation in China of the Company
Apr. 2019 Vice President and Representative
Director and in charge of Alliance of
the Company
Jun. 2020 President and Representative
Director of the Company(incumbent)

38

Number ofshares held
(Hundreds ofshares)345

Title and position

Name

Date of birth

Career summary
Apr. 1984
Jun. 2010

Jun.

2011

Jun.

2012

Apr. 2013

Apr. 2014

Apr. 2016

Senior Managing Director,
Overall business management,
Head of Development, Risk
KazutoManagement Officer and in
Suzukicharge of Racing of theCompany

Jun.

2017

May 27, 1961

Jun.

2018

Apr. 2019

Aug. 2022
Apr. 2023

Jun.

2023

Jun.

2024

39

Term ofofficeJoined the Company
Director, Head of business operation in
China and South America and General
Manager of Corporate Planning Officeof the Company
Director, Head of business operation in
China and South America, General
Manager of Corporate Planning Officeand Risk Management Officer of theCompany
Director, Head of Production ofMotorcycle Components, Head of
Production Engineering and Head of
business operation in China and SouthAmerica of the Company
Director, Head of business operation of
motorcycles business in Japan, Head of
business operation in China and SouthAmerica and Risk Management
Officer of the Company
Director, Head of business operation of
motorcycles business, Head of
business operation in ASEAN and
India and Head of business operation
in South America of the Company
Director, Head of business operation of
motorcycles business, Head of
Production of Motorcycle
Components, Head of business
operation in ASEAN and Head of
business operation in South America of
the Company
Managing Director, Head of business
operation of motorcycles business,
Head of Production of Motorcycle
Components, Head of business(Note 2)operation in ASEAN and Head of
business operation in South America of
the Company
Managing Director, Head of business
operation of motorcycles business,
Head of Production of Motorcycle
Components, Head of business
operation in ASEAN and SouthAmerica and Risk Management
Officer of the Company
Managing Director, Head of business
operation of motorcycles business,
Head of business operation in ASEAN,
Head of business operation in SouthAmerica, Risk Management Officer
and in charge of Racing of theCompany
Head of business operation in India of
the Company
Managing Director, Overall business
management, Head of Development,
Head of business operation in Japan,
Risk Management Officer and in
charge of Racing of the Company
Senior Managing Director, Overallbusiness management, Head ofDevelopment, Head of business
operation in Japan, Risk Management
Officer and in charge of Racing of theCompany
Senior Managing Director, Overallbusiness management, Head ofDevelopment, Risk Management
Officer and in charge of Racing of theCompany (incumbent)

Number ofshares held
(Hundreds ofshares)137

Title and position

Managing Director Head of
business operation of
automobiles business of theCompanyName

Atsuhiro
Mukoyama

Date of birth

Career summary

Term ofofficeApr. 1984 Joined the Company
Apr. 2012 Head of Production of Automobile
Components of the Company
Jun. 2012 Director, Head of Production ofAutomobile Components of theCompany
Apr. 2013 Director, Head of business operationof automobiles business of theCompany
Apr. 2015 Director, Head of Production
July 31, 1963
(Note 2)Engineering and Head ofEnvironment and Safety of theCompany
Apr. 2019 Director, Head of business operationof automobiles business and in
charge of Stacked Mold Technology
Development of the Company
Jun. 2021 Managing Director, Head of
business operation of automobiles
business of the Company(incumbent)

40

Number ofshares held
(Hundreds ofshares)123

Title and position

Name

Managing Director, Head of
business operation of
motorcycles business, Head of
business operation in China,
SatoshiHead of business operation in
NakayaIndia and ASEAN of theCompany, and President of
F.C.C. (CHINA)INVESTMENT CO., LTD.

Date of birth

March 17,
1964

Career summary

Term ofofficeApr. 1986 Joined the Company
Jan. 2012 General Manager of Corporate
Planning Office of the Company
Jun. 2012 Director, Head of Management andAdministration, General Manager ofCorporate Planning Office, Risk
Management Officer and Chief
Information Officer of the Company
Apr. 2013 Director, Head of business operationin North America of the Company
President and Director of FCC(North America), INC.
President and Director of FCC(INDIANA), LLC
Apr. 2017 Director and Head of business
operation in North America of theCompany
President and Director of FCC(North America), INC.
Apr. 2019 Director, Head of Purchasing, Headof Environment and Safety andHead of business operation in Chinaof the Company
Jun. 2021 Managing Officer, Head of
Purchasing and Head of business(Note 2)operation in China of the Company
Apr. 2023 Managing Officer, Head of business
operation of motorcycles business,
Head of Purchasing, Head of
business operation in China, Head of
business operation in India and
ASEAN of the Company, andPresident of F.C.C. (CHINA)INVESTMENT CO., LTD.
Jun. 2023 Managing Director, Head of
business operation of motorcycles
business, Head of Purchasing, Headof business operation in China, Headof business operation in India and
ASEAN of the Company, andPresident of F.C.C. (CHINA)INVESTMENT CO., LTD.
Jun. 2024 Managing Director, Head of
business operation of motorcycles
business, Head of business operationin China, Head of business operationin India and ASEAN of theCompany, and President of F.C.C.
(CHINA) INVESTMENT CO.,LTD. (incumbent)

41

Number ofshares held
(Hundreds ofshares)129

Title and position

Director

Director

Director,
Audit and Supervisory
Committee Member(full time)

Name

Date of birth

Career summary

Term ofofficeNumber ofshares held
(Hundreds ofshares)Kunihiro
Koshizuka

Apr. 1981 Joined Konishiroku Photo Industry
Co., Ltd. (currently KONICAMINOLTA, INC.)
Apr. 2012 Executive Officer, General Manager
of Technology Strategy Division of
KONICA MINOLTA, INC.
Apr. 2014 Executive Vice President &Executive Officer, General Manager
of Corporate R&D Headquarters of
KONICA MINOLTA, INC.
Apr. 2015 Executive Vice President &Executive Officer, General Manager
of Business Development
Headquarters of KONICAMINOLTA, INC.
Jun. 2015 Director, Executive Vice President& Executive Officer, and General
September 30,
Manager of Business Development (Note 2)
1955
Headquarters of KONICAMINOLTA, INC.
Apr. 2016 Director, Executive Vice President& Executive Officer of KONICAMINOLTA, INC.
Jun. 2019 Senior Technical Advisor of
KONICA MINOLTA, INC. (retired
in March 2021)
May 2020 Outside Director of AEON MALL
Co., Ltd. (incumbent)
Jun. 2021 External Director of TOKYUCONSTRUCTION CO., LTD.
(incumbent)
Jun. 2022 Outside Director of WILL GROUP,
INC. (incumbent)
Jun. 2022 Director of the Company(incumbent)–

Kazunori
Kobayashi

June 2, 1958

Apr. 1981 Joined Nippon Gakki Co., Ltd.
(currently Yamaha Corporation)
Jun. 2013 Operating Officer, General Manager
of Professional Audio Business
Department of Electronics Business
Headquarters of Yamaha
Corporation
Aug. 2013 Operating Officer, General Manager
of Business Development of Yamaha
Corporation(Note 2)
Jul. 2016 Operating Officer of Yamaha
Corporation
Representative Director andPresident of YAMAHA MUSICJAPAN CO., LTD.
Jun. 2018 Advisor of Yamaha Corporation(retired in June 2020)
Jun. 2022 Director of the Company(incumbent)–

August 13,
1964

Jan. 1994 Joined the Company
Apr. 2016 Operating Officer, Head of Researchand Development of Automobile
Components
Jul. 2019 Operating Officer, Deputy Head of
business operation in China
Sep. 2019 Operating Officer, Deputy Head of
business operation in China and(Note 3)President of F.C.C. (China)
Investment Co., Ltd.
Jan. 2023 Operating Officer, Head of Quality
Control and Quality Assurance
RepresentativeJun. 2024 Director, Audit and Supervisory
Committee Member (full time) of
the Company (incumbent)

60

Akira Tsuboi

42Title and position

Director,
Audit and Supervisory
Committee Member

Director,
Audit and Supervisory
Committee Member

Director,
Audit and Supervisory
Committee Member

Name

Date of birth

Career summary

Term ofofficeNumber ofshares held
(Hundreds ofshares)Kazumoto
Sugiyama

Sep. 2006 Graduated from The Legal Training
and Research Institute of Japan
Oct. 2006 Registered as an attorney (Shizuoka
Bar Association)
Joined Toshio Sugiyama Law Office(currently Sugiyama Law Office)May 27, 1969
(Note 3)
Sep. 2008 President of Sugiyama Law Office(to present)
Jun. 2014 Director of the Company
Jun. 2016 Director, Audit and Supervisory
Committee Member of the Company(incumbent)–

Mayumi
Yamamoto

Oct. 2001 Joined Shin Nihon & Co. (currently
Ernst & Young ShinNihon LLC)
Apr. 2005 Registered as Certified Public
Accountant
Aug. 2006 Established Mayumi Yamamoto
Certified Public Accountant Office
July 28, 1971
(to present)(Note 3)
Jul. 2008 Joined Tokiwa Audit Corporation
Jul. 2016 Representative Partner of Tokiwa
Audit Corporation (incumbent)
Jun. 2022 Director, Audit and Supervisory
Committee Member of the Company(incumbent)–

Tae
Kawashima

Sep. 2007 Graduated from The Legal Training
and Research Institute of Japan
Registered as an attorney (Shizuoka
Bar Association)
Joined Yasutomo Ohishi Law Office
Aug. 2014 President of Tae Kawashima Law
April 22, 1979
(Note 3)
Office (to present)
Jun. 2022 Outside Director of Tenryu Saw
Mfg. Co., Ltd. (incumbent)
Jun. 2024 Director, Audit and Supervisory
Committee Member of the Company(incumbent)

–

Total

796

Notes: 1. Kunihiro Koshizuka, Kazunori Kobayashi, Kazumoto Sugiyama, Mayumi Yamamoto, and Tae Kawashima are
Outside Directors.
2. One year from the conclusion of the Ordinary General Meeting of Shareholders held on June 18, 2024
3. Two years from the conclusion of the Ordinary General Meeting of Shareholders held on June 18, 2024

2) Outside Officers
The Company has five Outside Directors.
Directors (excluding Directors who are Audit and Supervisory Committee Members)
Kunihiro Koshizuka, Kazunori Kobayashi
Directors who are Audit and Supervisory Committee Members
Kazumoto Sugiyama, Mayumi Yamamoto, Tae Kawashima
No conflict of interest of any personal, financial, or commercial nature exists between the Company
and these officers.
The function and role of the Outside Directors in corporate governance of the Company is to supervise
overall management and the decision process for the nomination and remuneration of Directors, etc.
from the standpoint of experts and objective viewpoints based on extensive experience.
Mr. Kunihiro Koshizuka was elected as an Outside Director in the light of his extensive experienceand knowledge of technological strategy, new business creation, and digital and scientific technology
at global companies.
43

Mr. Kazunori Kobayashi was elected as an Outside Director in the light of his extensive experienceand knowledge related to sales, business planning, and new business creation at global companies.
Mr. Kazumoto Sugiyama was elected as an Outside Director in the light of his specialized expertiseand extensive experience of corporate legal affairs acquired as a lawyer.
Ms. Mayumi Yamamoto was elected as an Outside Director in the light of her specialized expertiseand extensive experience of corporate finance and accounting affairs acquired as a Certified Public
Accountant.
Ms. Tae Kawashima was elected as an Outside Director in the light of her specialized expertise andextensive experience of corporate legal affairs acquired as a lawyer.
While the Company has not established any specific standards or policy regarding independence whenelecting Outside Directors, the Company gives due consideration to ensure that no conflict of interest
exists between them and the Company’s ordinary shareholders and that there is independence fromthe Company in view of the Companies Act, the standards set by financial instruments exchanges, andthe like.
In accordance with the requirements of the Tokyo Stock Exchange, the officers are designated as
independent officers and are registered with the said stock exchange as such.
3) Coordination between supervision or auditing by Outside Directors and internal audits, audits by the
Audit and Supervisory Committee and accounting audits, and relationship with divisions involved ininternal control
The Company has established the Internal Audit Division as an organization to assist the duties of the
Audit and Supervisory Committee. Outside Directors who are Audit and Supervisory Committee
Members are performing audits and supervision in sufficient cooperation with the Internal Audit
Division, the Audit and Supervisory Committee and the Accounting Auditor, receiving periodic reports
from them and asking them for explanations as needed.
(3) Audits
1) Audits by the Audit and Supervisory Committee
The Audit and Supervisory Committee is composed of four Directors who are Audit and Supervisory
Committee Members, of whom three are Outside Directors, and the Audit and Supervisory Committee
Member (full time) serves as its chairperson.
In the fiscal year under review, the Company convened 12 meetings of the Audit and Supervisory
Committee and the status of attendance of each individual Audit and Supervisory Committee Member
is as follows.
Number of committee

Number of committee

meetings held

meetings attended

Ryujiro Matsumoto

1212Masahide Sato

12

12Kazumoto Sugiyama

12

11

Mayumi Yamamoto

12

12

Name

The specific matters for consideration at the Audit and Supervisory Committee include auditing
policies, auditing plans, development of the internal control system and its operational status, the
Accounting Auditor’s method of audit and reasonableness of results.
In terms of the activities of the Audit and Supervisory Committee, in accordance with auditing policies,
plans and division of responsibility established by the Audit and Supervisory Committee, each Audit
44

and Supervisory Committee Member participates in meetings of the Board of Directors and otherimportant meetings, and audits and oversees the execution of duties of the Directors and thedevelopment and operation of the Company’s internal control system by examining the status ofoperations and assets of the Company. The Company has a system where Audit and Supervisory
Committee Members exchange opinions with Representative Director, Directors, and Accounting
Auditor regularly or whenever necessary, and collaborate with the Internal Audit Division to ensure
the effectiveness of audits.
The Company appoints a full time Audit and Supervisory Committee Member with the aim ofenhancing the collection of information and improving the effectiveness of the Audit and Supervisory
Committee.
Outside Director Mayumi Yamamoto is a licensed CPA with considerable knowledge of finance andaccounting.
2) Internal audits
The Company has established the Internal Audit Division as an organization to assist the duties of the
Audit and Supervisory Committee. The Audit and Supervisory Committee has responsibility for theInternal Audit Division, and the appointment, dismissal, personnel change, and revision of wages of
employees in the Internal Audit Division are determined by the Board of Directors upon consent of
the Audit and Supervisory Committee.
The Internal Audit Division audits the status of development and operations of internal controls of theentire Group with the aim of improving the effectiveness and efficiency of operations, increasing thereliability of financial reporting, ensuring compliance with laws and regulations relating to businessactivities, and protecting the Company’s assets.
This office’s eight staff members, including the General Manager, carry out periodic and unscheduledaudits in collaboration with the Audit and Supervisory Committee.
3) Accounting auditsa. Name of the audit corporation
Yasumori Audit Corporationb. Length of continuous tenure
36 yearsc. CPAs who conducted audits
Nobuko Inaba, Ryuta Arakawa
d. Assistant accountants who participated in audits
Assistant accountants who participated in accounting audits of the Company are ten CPAs, one
person who has passed the Certified Public Accountant examination, and one system auditor.
e. Policy and reason for selecting the audit corporation
The Company has selected Yasumori Audit Corporation, taking factors, including the Audit
Corporation’s specialization, independence and suitability as the Accounting Auditor, quality
control systems and thorough knowledge of the Company’s operations, comprehensively into
consideration. The policy on decisions concerning the dismissal or non-reappointment of the
Accounting Auditor is as follows.
In the event that there is an obstacle preventing the Accounting Auditor from performing its duties,
the Audit and Supervisory Committee, if it is deemed necessary, will determine the content of a45

proposal to be proposed to the General Meeting of Shareholders concerning the dismissal or nonreappointment of the Accounting Auditor.
Also, the Audit and Supervisory Committee will dismiss the Accounting Auditor if it judges thatany of the items stipulated in Article 340, paragraph 1 of the Companies Act is applicable to the
Accounting Auditor, based on the consent of all members of the Audit and Supervisory Committee.
In this case, an Audit and Supervisory Committee Member appointed by the Audit and Supervisory
Committee will report the fact of dismissal and the reasons thereof at the first General Meeting of
Shareholders convened after the dismissal.
f. Evaluation of the audit corporation conducted by the Audit and Supervisory Committee
The Audit and Supervisory Committee decides on the propriety of the reappointment of the
Accounting Auditor by evaluating the suitability and validity of audits conducted by the
Accounting Auditor based on the policy on decisions concerning the dismissal or nonreappointment of the Accounting Auditor.
4) Details of audit fee, etc.
a. Remuneration to independent auditors
Fiscal year ended March 31, 2023
Category

Fees for audit
certification services(Millions of yen)

Fiscal year ended March 31, 2024

Fees for non-audit
services(Millions of yen)

Fees for audit
certification services(Millions of yen)

Fees for non-audit
services(Millions of yen)

Reporting company

50

–

53

–

Consolidated
subsidiaries

–

–

–

–

Total

50

–

53

–

b. Remuneration to the same network as independent auditors (excluding a.)
Not applicable.
c. Details of other major remuneration for audit certification services
Not applicable.
d. Policy on determining audit fee
The Company has not formulated a policy on determining fees for audits conducted by independent
auditors. However, the Company has implemented procedures for deciding the remuneration byobtaining the approval of the Audit and Supervisory Committee, taking factors, such as audit plans,
audit details and the number of days spent on audits submitted by the Audit Corporation, into
consideration.
e. Reasons for approval of the Accounting Auditor’s remuneration, etc. by the Audit and Supervisory
Committee
The Audit and Supervisory Committee has approved remuneration for the Accounting Auditor
based on the scale and characteristics of the Company’s businesses, and the content of documents
submitted by the Audit Corporation including the summaries of audit plans.

46

(4) Remuneration, etc. for officers
1) Policy for determining remuneration amounts paid to officers and the method of calculating suchamount as well as the method of determination thereof
Policy regarding the determination of details of remuneration, etc. for individual Directors is asfollows.
1. Basic policy
The Company’s remuneration for Directors is a remuneration system that is linked to businessperformance and shareholder benefit so that it can function as a sound and appropriate incentive forsustainable growth. The Company’s basic policy on remuneration for individual Directors is to pay
reasonable levels based on factors such as work responsibilities. Remuneration for Directors(excluding Outside Directors and Directors who are Audit and Supervisory Committee Members)
comprises basic remuneration, remuneration based on individual assessment, performance-based
bonus, and share-based remuneration. Remuneration for Outside Directors and Directors who are
Audit and Supervisory Committee Members comprises only basic remuneration considering the duties
involved in this role.
2. Basic remuneration
Basic remuneration is a fixed monthly remuneration paid in cash and is determined comprehensively
taking into account factors including position, work responsibilities, and levels at other companies.
3. Remuneration based on individual assessment and performance-based bonus
Remuneration based on individual assessment is cash remuneration based on factors such as aqualitative assessment of the individual Director’s contribution to business performance which is paid
monthly as an addition to basic remuneration in the following business year.
Performance-based bonus is cash remuneration that reflect key performance indicators (KPI) aimed atenhancing awareness regarding improving business performance each business year. An amountcalculated in accordance with consolidated business profit for each business year is paid as bonus at a
fixed time each year. The Nomination and Remuneration Advisory Committee deliberates on any
special factors that should be taken into consideration.
4. Share-based remuneration
Share-based remuneration is the granting of common shares subject to transfer restrictions (“restricted
shares”) until the time of retirement at a fixed time each year with the purpose of promoting sharedvalue with shareholders.
5. Ratio of remuneration
This is considered by the Nomination and Remuneration Advisory Committee using remunerationlevels, etc. at companies of a similar size and that belong in the same sector and business category as
the Company as benchmarks. The target ratio of different types of remuneration, etc. at standard times
is basic remuneration : remuneration based on individual assessment : performance-based bonus :share-based remuneration = 65:10:10:15.
6. Method for determining details of remuneration, etc.
Regarding items related to remuneration for officers, remuneration for Directors (excluding Directors
who are Audit and Supervisory Committee Members) is decided by resolution of the Board of
Directors within the scope of the maximum amount approved by the General Meeting of Shareholders
after receiving recommendations from the Nomination and Remuneration Advisory Committee, of
which Outside Directors form a majority, to ensure appropriateness and the objectivity andtransparency of the decision making process. Remuneration for Directors who are Audit andSupervisory Committee Members is determined through discussions among Directors who are Audit
and Supervisory Committee Members within the scope of the maximum amount approved by theGeneral Meeting of Shareholders.
The determination of the specific amount of remuneration for individual Directors has been entrusted
to the President and Representative Director by resolution of the Board of Directors and the President

47

and Representative Director makes these decisions based on recommendations from the Nomination
and Remuneration Advisory Committee.
The Board of Directors decides the above policy after receiving reports from the Nomination andRemuneration Advisory Committee. Also, the Board of Directors confirms that the reports from theNomination and Remuneration Advisory Committee about the remuneration for individual Directors
in that fiscal year are respected and judges that the details and method of deciding remuneration, etc.
are in line with the policy.
In the fiscal year under review the Nomination and Remuneration Advisory Committee convened fourtimes. The Nomination and Remuneration Advisory Committee referred to office remuneration survey
data from an external research institution and deliberated and reported the findings after considering
the size of the Company’s business, etc.
Performance-based bonus
The performance indicator for performance-based bonuses are consolidated business profit,
appropriately reflecting the profit generated from the business. Targets for payment decisions are notset, but performance on this fiscal year was ¥15,540 million.
The Company shall pay performance-based bonus corresponding to profit-related remuneration
provided for in Article 34, paragraph 1, item 3 of the Corporation Tax Act for the fiscal year ending
March 31, 2025 as follows.
• Eligible Persons
Directors and Managing Officers corresponds to “executive officers” provided for in Article 34,
paragraph 1, item 3 of the Corporation Tax Act Excludes Outside Directors and Directors who are
Audit and Supervisory Committee Members.
• Method of calculating
The specific calculation method for each position shall be as follows. However, the amount paid shallbe 0 if consolidated business profit does not exceed ¥6.0 billion.
President and Representative Director (Consolidated business profit - ¥6.0 billion) ×0.115%
Senior Managing Director (Consolidated business profit - ¥6.0 billion) ×0.06517%
Managing Director (Consolidated business profit - ¥6.0 billion) ×0.05367%
Managing Officer (Consolidated business profit - ¥6.0 billion) ×0.03833%
Notes: 1. “Index indicating the status of profit” prescribed in Article 34, paragraph 1, item 3 (a) of
the Corporation Tax Act shall be the “consolidated business profit” for the fiscal year
ending March 31, 2025.
2. “Consolidated business profit” used in the above calculation shall be “gross profit SG&A expenses” in the consolidated statement of income.
3. The “consolidated business profit” used in the above calculation shall be the amount ofsuch payment amount before accounting for a loss.
4. The payment amount in the above formula shall be rounded down to the nearest ¥10,000.
• Defined amount“Defined amount” prescribed in Article 34, paragraph 1, item 3 (a) of the Corporation Tax Act shallhave a ceiling of ¥50 million.
• Other
The payment amount if a person retires during the term for unavoidable circumstances shall be theamount calculated on the basis that the person completed his or her term office with such amountproportionally calculated according to the number of months employed (rounded down to the nearest¥10,000). The number of months shall be calculated in accordance with the calendar, and if there are
fractions less than one month the calculation will be rounded up to the nearest number of months.

48

Share-based remuneration
Overview of the restricted share-based remuneration plan is as follows.
Eligible Persons

Directors (excluding Directors who are Audit and Supervisory Committee Members)

Share-based remuneration
allocation

Within ¥100 million per year Within 50,000 shares

Amount of payments

Determined at the Board of Directors based on the closing price of the Company’scommon stock on the Tokyo Stock Exchange on the business day preceding the day ofeach resolution of the Board of Directors, in a range that is not particularly beneficial
to eligible Directors

Transfer restriction period

The period until the day of retirement or resignation as a Company Director or otherposition determined by the Company’s Board of Directors

Conditions for removing thetransfer restrictions

Removed when the transfer restriction period expires
However, transfer restrictions are removed in the event of retirement or resignation
due to reasons deemed reasonable by the Company’s Board of Directors

Free acquisition by the Company

If there is a breach of laws and regulations, internal rules or the Allotment Agreement
or other reasons equivalent obtaining such stock free of charge, the Company shallobtain such stock free of charge if this corresponds to a reason determined by theCompany’s Board of Directors

2) Total amount of remuneration, etc., total amount of remuneration, etc. by type and number of payees
by category

Category

Total amount of remuneration, etc. by type(Millions of yen)
Total amount of
remuneration,
Remuneraetc.
Basiction based on Performance Share-based(Millions of yen) remuneration individual -based bonus remunerationassessment

Number ofpayeesDirectors (excluding
Directors who are Audit andSupervisory Committee
Members)[Outside Directors]

184
[14]

120
[14]

11
[–]

27
[–]

25
[–]

6
[2]

Directors, Audit andSupervisory Committee
Members[Outside Directors]

42
[18]

42
[18]

–
[–]

–
[–]

–
[–]

4
[3]

Total
[Outside Directors]

226
[32]

162
[32]

11
[–]

27
[–]

25
[–]

10
[5]

Notes: 1. The amount of remuneration, etc. of Directors (excluding Directors who are Audit and Supervisory Committee
Members) does not include employee salaries paid to persons who are concurrently Directors and employees.
2. Performance-based bonuses include the planned payment amount.
3. Share-based remuneration includes booking expenses for the current fiscal year.
4. At the 91st Ordinary General Meeting of Shareholders held on June 22, 2021, the amount of remuneration of
Directors (excluding Directors who are Audit and Supervisory Committee Members) was capped at ¥300 million
per year (which, however, does not include salaries paid for work performed as employees) and the amount of sharebased remuneration to grant restricted shares was capped at ¥100 million per year (number of Directors (excluding
Directors who are Audit and Supervisory Committee Members) at the conclusion of this Ordinary General Meetingof Shareholders: three).
5. At the 86th Ordinary General Meeting of Shareholders held on June 22, 2016, remuneration of Directors who are
Audit and Supervisory Committee Members was capped at ¥90 million per year (number of Directors who are Audit
and Supervisory Committee Members at the conclusion of this Ordinary General Meeting of Shareholders: five).
6. The President and Representative Director Yoshitaka Saito delegated by the Board of Directors based on its
resolution decided remuneration, etc. amounts for the fiscal year under review based on the policy on determining
remuneration for officers, taking factors such as job responsibilities by position, into consideration. The reason forthe delegation is that the Representative Director is judged to be appropriate in evaluating the business for which
each director is responsible while considering the performance of the Company. The Nomination and Remuneration
Advisory Committee confirmed beforehand that the details of delegated decisions were appropriate.
7. Basic remuneration includes premiums for the defined contribution pension plan.

49

(5) Share ownership
1) Policy and concept of the classification of investment shares
The Company has classified investment shares into shares held for the purpose of net investment aimed
entirely at achieving profits from fluctuations in their value or dividends on them and cross-held shares
owned from viewpoints, including the maintenance and strengthening of business relationships.
2) Investment shares whose purpose of holding is other than for net investment(i) Method for inspecting the holding policy and the rationality of ownership, and the details ofinspections by the Board of Directors and the like concerning the propriety of the ownership ofindividual issues
The Company may hold investment shares from viewpoints, including the maintenance andstrengthening of business relationships with customers and transaction partners, in cases where it
judges their ownership contributes to enhancing its corporate value in the medium and long term.
The Board of Directors inspects the propriety of owning cross-held shares every year, taking benefits,risks and the like involved in holding them into consideration, in addition to the nature and scale oftransactions.
As of the end of the fiscal year under review, cross-held shares accounted for less than 2.0% of total
equity, and the impact on the consolidated financial statements is recognized as insignificant.
(ii) Number of issues and total amount of balance sheet amount
Total amount of
Number of issues
balance sheet amount(Issues)(Millions of yen)
Unlisted shares

17

1,123

Shares other than unlisted shares

7

2,541

(Issues whose number of shares increased in the fiscal year ended March 31, 2024)
Total acquisition
costs associated with
Number of issues
increase in number of(Issues)shares(Millions of yen)
Unlisted shares
Shares other than unlisted shares

6

394

2

5

Reason for increase in number of shares

Capital investment in new businesses
Contributions to Supplier Stock Ownership
Association(Issues whose number of shares decreased in the fiscal year ended March 31, 2024)
Number of issues(Issues)

Total sale value
associated withdecrease in numberof shares(Millions of yen)

Unlisted shares––

Shares other than unlisted shares

–

–

50

(iii) Information about the numbers of specified investment shares by issue, balance sheet amounts, etc.
Specified investment sharesFiscal year ended Fiscal year ended
March 31, 2024
March 31, 2023
Issue

KANEMATSU
CORPORATIONSUZUKI MOTORCORPORATION

Number of shares Number of shares(Shares)(Shares)
Balance sheet
amount(Millions of yen)

Balance sheet
amount(Millions of yen)740,200

740,200

1,918

1,215

210,000

52,500365

252

53,21653,216

162

99

5,755

5,755

51

30

12,00012,00020

22Mizuho Financial Group, Inc.

Sumitomo Mitsui Financial
Group, Inc.

MUSASHI SEIMITSU
INDUSTRY CO., LTD.

51

Purpose of holding, overview ofbusiness alliance, etc., quantitative
effect of holding and reason forincrease in number of shares (Note)

Holding oftheCompany’s
sharesPrincipally engaged in the sale ofmotorcycle clutches to U.S. andEuropean customers through thisGroup, which accounted for 2.5% ofrevenue in the fiscal year underreview. Although held to maintainand strengthen the transactional
relationship in the business, this is
not limited to a transactional
relationship and we consider that theexchange of personnel andtechnologies and the stable
relationship of trust is contributing to
improvement in the Company’s
corporate value.

Yes

A customer for motorcycle clutches,
etc. with sales to this Groupaccounting for 2.0% of revenue inthe fiscal year under review.
Although held to maintain andstrengthen the transactional
relationship in the business, this is
not limited to a transactional
relationship and we consider that theexchange of personnel andtechnologies and the stable
relationship of trust is contributing to
improvement in the Company’s
corporate value.

No

Held to maintain and strengthensmooth financial transactions such as
investment and procurement of funds
as a main financial institution.

No

Held to maintain and strengthensmooth financial transactions such as
investment and procurement of funds
as a main financial institution.

No

Purchase clutch components fromthis Group and although held tomaintain and strengthen thetransactional relationship in thebusiness, this is not limited to atransactional relationship and we
consider that the exchange of
personnel and technologies and thestable relationship of trust iscontributing to improvement in the
Company’s corporate value.

YesFiscal year ended Fiscal year ended
March 31, 2024
March 31, 2023
Issue

YAMABIKOCORPORATION

Kawasaki Heavy Industries,
Ltd.

Note:

Number of shares Number of shares(Shares)(Shares)
Balance sheet
amount(Millions of yen)

Balance sheet
amount(Millions of yen)

9,393

8,614

18

11

1,050

–

5

–

Purpose of holding, overview ofbusiness alliance, etc., quantitative
effect of holding and reason forincrease in number of shares (Note)

Holding oftheCompany’s
shares

A customer for general-purpose
exhaust gas purification catalysts andalthough held to maintain andstrengthen the transactional
relationship in the business, this is
not limited to a transactional
relationship and we consider that theexchange of personnel andtechnologies and the stable
relationship of trust is contributing to
improvement in the Company’s
corporate value. Number of shares
increased due to contributions to
Supplier Stock Ownership
Association.

No

A customer for motorcycle clutches
and although newly acquired andheld to maintain and strengthen thetransactional relationship in thebusiness, this is not limited to atransactional relationship and we
consider that the exchange of
personnel and technologies and thestable relationship of trust iscontributing to improvement in the
Company’s corporate value.

No

The quantitative effects of holding the specified investment shares are difficult to state, but the rationality of theirownership is inspected as stated in the above item i).

52

V. Financial information
1. Preparation policy of the consolidated and non-consolidated financial statements(1) The consolidated financial statements of the Company are prepared in accordance with International
Financial Reporting Standards (hereinafter “IFRS”) pursuant to the provisions of Article 93 of theOrdinance on Terminology, Forms and Preparation Methods of Consolidated Financial Statements(Ordinance of the Ministry of Finance No. 28 of 1976).
(2) The non-consolidated financial statements of the Company are prepared in accordance with theOrdinance on Terminology, Forms and Preparation Methods of Financial Statements, etc. (Ordinanceof the Ministry of Finance No. 59 of 1963; hereinafter the “Ordinance on Financial Statements, etc.”).
The Company is qualified as a company submitting financial statements prepared in accordance withspecial provision and has prepared financial statements pursuant to the provisions of Article 127 of theOrdinance on Financial Statements, etc.
2. Audit certification
In accordance with the provisions of Article 193-2, paragraph 1 of the Financial Instruments andExchange Act, the consolidated financial statements and the non-consolidated financial statements forthe fiscal year ended March 31, 2024 were audited by Yasumori Audit Corporation.
3. Special efforts to ensure the appropriateness of consolidated financial statements, etc., anddevelopment of a system for fair preparation of consolidated financial statements, etc. inaccordance with IFRSThe Company is making special efforts to ensure the appropriateness of consolidated financial statements,
and developing a system for the appropriate preparation of consolidated financial statements, inaccordance with IFRS. The content thereof is as follows:(1) To develop a system for ensuring correct understanding of accounting standards, etc. and appropriate
responses to any changes in accounting standards, etc., the Company has joined the Financial
Accounting Standards Foundation and attends seminars held by the foundation and audit
corporations.
(2) For the adoption of IFRS, the Company keeps up with the latest accounting standards by obtainingpress releases and standards published by the International Accounting Standards Board as needed.
To prepare appropriate consolidated financial statements, etc. under IFRS, the Company has
developed accounting policies of the Group in accordance with IFRS and performs accounting
procedures based on these policies.

531. Consolidated financial statements, etc.
(1) Consolidated financial statements
1) Consolidated statement of financial position(Millions of yen)

AssetsCurrent assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Inventories
Other current assets

Notes

As of March 31,2023

As of March 31,
2024

6,29
7,29
8,29
9
10

53,73838,7393,902
32,715
3,091

82,02840,1984,181
32,8093,615

132,189

162,833

57,48357,234

3,447

2,946

14

161

127

8,29
15
10,20

14,3952,554
394

18,5542,768
540

78,437

82,171

210,626

245,004

Total current assets
Non-current assets
Property, plant and equipment
Goodwill and intangible assets
Investments accounted for using the equity
methodOther financial assets
Deferred tax assets
Other non-current assets

11,13,17,
32
12,32

Total non-current assets
Total assets

54

(Millions of yen)

Liabilities and equity
Liabilities
Current liabilities
Trade and other payables
Borrowings
Other financial liabilities
Income taxes payable
Provisions
Other current liabilities
Total current liabilities
Non-current liabilities
Other financial liabilities
Defined benefit liability
Provisions
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities
EquityIssued capital
Retained earnings
Treasury shares
Other components of equity
Total equity attributable to owners of parent
Non-controlling interests
Total equity

Notes

As of March 31,2023

As of March 31,
2024

19,29
16,29
8,29
15
21
10

18,204
6,100
313
2,019
3,478
8,187

20,184
6,100
458
1,981
8,380
9,079

38,302

46,183

8,29
20
21
15
10

1,096
1,527
14
7,087
472
10,19948,502

1,100
1,135
14
9,442
525
12,21858,402

22
22
22

4,175
139,639(4,723)
20,963160,055
2,069
162,124

4,175
149,324(4,694)36,515
185,322
1,280
186,602210,626

245,004

Total liabilities and equity(Note) The accompanying notes are an integral part of these financial statements.

552) Consolidated statement of income(Millions of yen)
Notes
Revenue
Cost of sales

Fiscal year ended
March 31, 2023
218,939(185,944)

240,283(198,231)

23
24
13,24

32,994(21,669)
1,125
(546)

42,051(26,511)740(1,178)4
25
25

11,9031,820(74)

15,102
4,097
(22)

14

(9)

(8)

15

13,641(3,838)

19,169(6,713)

Profit9,802

12,456

Profit attributable to
Owners of parent
Non-controlling interests

9,566
236

12,231
224

9,802

12,456

192.41–245.91–Gross profit
Selling, general and administrative expenses
Other income
Other expense
Operating profit
Finance income
Finance costs
Share of profit (loss) in investments accounted forusing the equity method
Profit before income taxes
Income tax expense

4,5

Fiscal year ended
March 31, 2024

ProfitEarnings per share
Basic earnings per share (Yen)
Diluted earnings per share (Yen)27
27(Note) The accompanying notes are an integral part of these financial statements.

563) Consolidated statement of comprehensive income(Millions of yen)
Notes

Fiscal year ended
March 31, 2023

ProfitOther comprehensive income
Components that will not be reclassified to profit
or loss
Remeasurements of defined benefit plans
Changes in the fair value of financial assets
measured at fair value through othercomprehensive income

9,802

12,456

26

411

598

26

304

3,488

715

4,086

26

5,782

12,251

14,26

(0)

(15)

Total
Components that may be reclassified to profit orloss
Exchange differences of foreign operations
Share of other comprehensive income ofassociates accounted for using equity method

Fiscal year ended
March 31, 2024

5,781

12,236

Total other comprehensive income

Total

6,497

16,322Comprehensive income

16,30028,778Comprehensive income attributable to
Owners of parent
Non-controlling interests

15,980319

28,382396

16,30028,778Comprehensive income(Note) The accompanying notes are an integral part of these financial statements.

574) Consolidated statement of changes in equity
Equity attributable to owners of parent
Other
componentsof equity

IssuedcapitalCapitalsurplusRetainedearnings

TreasurysharesMillions ofyenMillions ofyenMillions ofyenMillions of
yen

4,175
–
–

–
–
–

132,252
9,566–(4,764)––

10,480
–
5,700

–
–
–
–

–
–
–
–

9,566
–
(7)
(2,585)

–
(0)
41
–

5,700
–
–
–

–

–

–

–

–

–

–

–

–

–

–

–

412

–

–

Total transactions with theowners––(2,179)41–

Balance as of March 31, 2023
ProfitOther comprehensive income

4,175
–
–

–
–
–

139,639
12,231–(4,723)––

16,180–12,099

–
–
–
–

–
–
3
–

12,231––(2,984)

–
(0)
29
–

12,099
–
–
–

–

(163)

–

–

–

–

160

(160)

–

–

–

–

598

–

–

Total transactions with theowners––(2,546)

29–

Balance as of March 31, 2024

4,175

–

149,324(4,694)28,280

Notes

Balance as of April 1, 2022
ProfitOther comprehensive income
Total comprehensive income
Purchase of treasury shares
Disposal of treasury shares
Dividends
Increase (decrease) due tochanges in equity
Transfer from retained earnings
to capital surplus
Transfer from other componentsof equity

Total comprehensive income
Purchase of treasury shares
Disposal of treasury shares
Dividends
Increase (decrease) due tochanges in equity
Transfer from retained earnings
to capital surplus
Transfer from other componentsof equity

22
22
22

22
22
22

58

Exchangedifferencesof foreign
operations
Millions ofyenEquity attributable to owners of parent
Other components of equity
Changesin the fairvalue offinancialassetsmeasured
at fairvaluethroughothercomprehensive
incomeRemeasurementsof defined
benefit
plans

Total

Millions ofyenMillions ofyenMillions of
yen

4,481
–
302

–
–
411

302
–
–
–

Noncontrollinginterests

Total
equityMillions ofyenMillions ofyenMillions ofyen

14,962–
6,413

146,625
9,566
6,413

1,906
236
83

148,532
9,802
6,497

411
–
–
–

6,413
–
–
–

15,980(0)33(2,585)

319
–
–
(157)

16,300(0)33(2,742)

–

–

–

–

–

–

–

–

–

–

–

–

(1)

(411)

(412)

–

–

–

Total transactions with theowners

(1)

(411)

(412)

(2,551)(157)(2,708)

Balance as of March 31, 2023
ProfitOther comprehensive income

4,782
–
3,452

–
–
598

20,963–
16,150160,055
12,231
16,150

2,069
224
172

162,124
12,456
16,322

3,452
–
–
–

598
–
–
–

16,150–––28,382(0)
32(2,984)

396
–
–
(55)

28,778(0)
32(3,039)

–

–

–

(163)

(1,130)(1,293)

–

–

–

–

–

–

–

(598)

(598)

–

–

–

Total transactions with theowners

–

(598)

(598)

(3,115)(1,185)(4,300)

Balance as of March 31, 2024

8,235

–

36,515

185,322

1,280

186,602

Notes

Balance as of April 1, 2022
ProfitOther comprehensive income
Total comprehensive income
Purchase of treasury shares
Disposal of treasury shares
Dividends
Increase (decrease) due tochanges in equity
Transfer from retained
earnings to capital surplus
Transfer from othercomponents of equity

Total comprehensive income
Purchase of treasury shares
Disposal of treasury shares
Dividends
Increase (decrease) due tochanges in equity
Transfer from retained
earnings to capital surplus
Transfer from othercomponents of equity

22
22
22

22
22
22

(Note) The accompanying notes are an integral part of these financial statements.

59

Total

5) Consolidated statement of cash flows
Notes
Net cash flows from (used in) operating activities
Profit before income taxes
Depreciation and amortization expense
Impairment loss
Finance income and finance costs
Share of loss (profit) in investments accounted forusing the equity method
Loss (gain) on sales and retirement of non-current
assetsDecrease (increase) in inventories
Decrease (increase) in trade and other receivables
Increase (decrease) in trade and other payables
Increase (decrease) in defined benefit liability
Increase (decrease) in provisions
Other
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Income taxes refund and interest on refund
received
Net cash flows from (used in) operating activities
Net cash flows from (used in) investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant andequipment
Purchase of intangible assets
Payments of loans receivableCollection of loans receivable
Purchase of investments
Proceeds from sales and redemption of
investments
Other
Net cash flows from (used in) investing activities
Net cash flows from (used in) financing activities
Repayments of lease liabilities
Payments for acquisition of interests in
subsidiaries from non-controlling interests
Purchase of treasury shares
Cash dividends paid
Cash dividends paid to non-controllingshareholders
Net cash flows from (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Effect of exchange rate change on cash and cash
equivalents
Cash and cash equivalents at end of period

22

6

6

(Note) The accompanying notes are an integral part of these financial statements.

60(Millions of yen)
Fiscal year ended
March 31, 2024

Fiscal year ended
March 31, 2023
13,641
13,358315(1,645)

19,16912,861735(3,747)

9

8

12

139

(352)
(2,861)
(820)
316
1,808
1,489
25,270923(20)(5,235)

3,185
2,452
(109)
264
4,902
430
40,2922,173(14)(7,085)75

1721,01435,383(2,665)
1,492(7,776)(5,224)
5,744(8,370)

170

217

(770)
(74)
102
(711)

(499)
(80)
152
(458)

2

1,319

(76)

(234)

(10,307)(7,433)

(489)

(495)

–

(1,292)(0)(2,585)(0)(2,981)

(157)

(55)

(3,232)
7,474
44,627(4,824)
23,12553,738

1,637

5,164

53,73882,028

[Notes to consolidated financial statements]
1. Reporting entity
F.C.C. CO., LTD. (hereinafter the “Company”) is a public company incorporated under the laws of Japan.
The addresses of the registered headquarters and major business offices have been disclosed on thewebsite (https://www.fcc-net.co.jp/). The Company’s consolidated financial statements were preparedwith the end of the fiscal year on March 31, 2024 and consist of accounts of the Company and its
subsidiaries as well as interests in its associates (hereinafter the “Group”).
The Group is principally engaged in the motorcycles business, the automobile business, and the nonmobility business.
2. Basis of preparation(1) Applicable accounting standards
The consolidated financial statements of the Group have been prepared in accordance with IFRS as
pursuant to the provisions of Article 93 of the Ordinance on Terminology, Forms and Preparation
Methods of Consolidated Financial Statements (Ordinance of the Ministry of Finance No. 28 of 1976),
since all the requirements of a “Specified Company under Designated International AccountingStandards” set forth in Article 1-2 of this Ordinance have been fulfilled.
These consolidated financial statements were approved by the Board of Directors on June 18, 2024.
(2) Basis of measurement
As described in the note “3. Material accounting policy information,” the consolidated financial
statements of the Group have been prepared on the basis of cost, except for certain financial instruments,
etc. that are measured at fair value.
(3) Functional currency and presentation currency
The consolidated financial statements of the Group are presented in Japanese yen, which is theCompany’s functional currency. All financial information presented is rounded down to the nearest
million yen.
(4) Impact of application of new accounting standards
Effective from the fiscal year ended March 31, 2024, the Group has applied the following accounting
standards.
Standardbook
IAS 12Standard
name

Description of revision

IncomeClarification of accounting treatment for deferred taxes related to assets and liabilities

taxes

generated from a single transaction(5) Accounting standards and interpretations that have not yet been applied
The main new standards and interpretations that were either newly established or revised by the date of
approval of the consolidated financial statements and which the Group has not applied early are as
follows. The impact on the consolidated financial statements from the application of this standard bookis being considered.
StandardbookStandard
name

Period of mandatory
application (beginningfiscal year)

Fiscal year of adoption by
the GroupandDisclosure inestablished/revised
standards
A new standard that

Presentation
IFRS 18

Overview of newly

Fiscal year ending
March 31, 2028

January 1, 2027

Financial
Statements

61

replaces IAS 1, the current
accounting standard forpresentation and disclosurein financial statements

(6) Significant accounting estimates and judgments
In preparing IFRS-compliant consolidated financial statements, the management makes judgments,
estimates and assumptions that may affect the application of accounting policies and the reported
amounts of assets, liabilities, revenue and expenses. Because actual results may differ from theseestimates, such estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognized in the accounting period in which the estimate isrevised and future periods that are affected.
Of items for which the management made estimates and judgments, those that have significant effects
on the amounts recognized in the consolidated financial statements are as follows:
Note 13. Impairment loss
Note 15. Income taxes
Note 20. Employee benefits
Note 21. Provisions and contingent liabilities
Information concerning uncertainty in the process and estimates that are risks that could causesignificant adjustments for the following fiscal year is as follows:
Impairment on non-current assets (Note 13. Impairment loss)
Recoverability of deferred tax assets (Note 15. Income taxes)
Estimate of provision for product warranty (Note 21. Provisions and contingent liabilities)
3. Material accounting policy information(1) Basis of consolidation
1) Subsidiaries
Subsidiaries are entities that are controlled by the Group. The Group is deemed to control an entity
when the Group has exposures or rights to variable returns arising from the Group’s involvement in
the investee and has an ability to affect those returns through power over the investee.
The acquisition date is the date when the Group obtained control, and the entity is consolidated fromthat date to the date when the Group loses the control.
If any accounting policies applied by a subsidiary differ from those applied by the Group, adjustments
are made to the subsidiary’s financial statements where needed.
The Group’s balances of payables and receivables and transactions as well as unrealized gains or losses
arising from intra-group transactions are offset in preparing the consolidated financial statements.
Comprehensive income of subsidiaries is attributable to owners of parent and non-controlling interests,
even if the balance of non-controlling interests is negative.
Accounts of all subsidiaries that comprise the Group were reflected in the consolidated financial
statements with March 31 as the reporting date.
2) Associates
Associates are entities over which the Group has significant influence in terms of financial andmarketing policies but which the Group does not control or jointly control.
Investments in associates are recognized at cost at the time of acquisition and subsequently accounted
for using equity method.
(2) Business combinations
Business combinations are accounted for using the acquisition method. Considerations for acquisition
are measured as the total of fair values of assets transferred and liabilities assumed in exchange for thecontrol over the acquired entity and equity financial instruments on the acquisition date. If the62consideration for acquisition exceeds fair values of identifiable assets and liabilities, the excess isrecorded as goodwill in the consolidated statement of financial position. If the consideration for
acquisition is less than those fair values, the shortfall is immediately recorded as revenue. Any change
in ownership interests in subsidiaries that does not result in a loss of control is accounted for as equity
transaction.
(3) Foreign currency translation
1) Foreign currency transactions
Foreign currency transactions are translated into the functional currency of each entity in the Group
using the exchange rates at the date of the transactions. Monetary assets and liabilities denominated inforeign currencies at the end of each fiscal year are translated into the functional currencies using theexchange rates at that date.
Foreign exchange differences arising from the translation or settlement are recognized as profit or loss.
2) Financial statements of foreign operations
To prepare consolidated financial statements, assets and liabilities of the Group’s foreign subsidiaries,
etc. are translated into Japanese yen using exchange rates at the end of the fiscal year. Profit or loss
items are translated using the average exchange rate during the fiscal period, unless exchange rates
fluctuate significantly during that period. If there is any significant fluctuation in exchange rates, theexchange rate on the transaction date is used.
Exchange differences on translation are recognized as other comprehensive income in the consolidated
statement of comprehensive income and cumulative translation differences are included in othercomponents of equity in the consolidated statement of financial position.
Cumulative translation differences of a foreign operation are reclassified to profit or loss when theGroup loses control and significant influence over the foreign operation.
(4) Financial instruments
1) Financial assets(i) Initial recognition and measurement
The Group classifies the financial assets into financial assets measured at fair value through profit orloss (hereinafter “financial assets at FVTPL”), financial assets measured at fair value through othercomprehensive income (hereinafter “financial assets at FVTOCI”), and financial assets measured atamortized cost. This classification is determined at initial recognition. The Group recognizes therelevant financial instruments on the transaction date when it became a party to the contract related
to the financial assets.
All financial assets are initially measured at fair value plus transaction costs, except for the case ofbeing classified as financial assets at FVTPL. Trade receivables that do not involve a significant
financing component are measured at the transaction price.
Financial assets are classified as financial assets measured at amortized cost, on the condition thatthey meet both of the following conditions:• Assets are held based on the business model to hold assets for the purpose of collecting contractual
cash flows.
• Contractual terms associated with financial assets giving rise to cash flows on specified dates,consisting only of payment of the principal and interest on the principal balance.
Financial assets not classified as those measured at amortized cost are classified as financial assets
measured at fair value. Among them, equity financial instruments held for purposes other than trading
for which ex post facto fair value changes are selected to be presented through other comprehensive
income at the time of initial recognition are classified as financial assets at FVTOCI.
For equity financial instruments measured at fair value through other comprehensive income,changes in the fair value are recognized as other comprehensive income, and when the equity
financial instruments are derecognized, the accumulated other comprehensive income is transferred
to retained earnings.
63

(ii) Subsequent measurement
Financial assets are subsequently measured as follows in accordance with their respectiveclassifications.
(a) Financial assets measured at amortized cost
They are measured based on amortized cost using the effective interest method.
(b) Financial assets at FVTPL and financial assets at FVTOCI
They are measured at fair value.
For financial assets at FVTOCI, changes in the fair value are recognized as other comprehensive
income, and when the equity financial instruments are derecognized, the accumulated othercomprehensive income is transferred to retained earnings.
(iii) Impairment of financial assets
For financial assets measured at amortized cost, the Group has adopted the method of recognizing
allowance for doubtful accounts to deal with such losses expected in relation to the concerned
financial assets. In this method, the Group evaluates, at the end of each fiscal year, whether credit
risk of each financial asset has significantly increased since the initial recognition. If credit risk of afinancial asset has not increased significantly since the initial recognition, 12-month expected credit
losses on the financial asset are recognized as allowance for doubtful accounts.
On the other hand, if credit risk of a financial asset has increased significantly since the initialrecognition, an amount equal to the lifetime expected credit losses is recognized as allowance for
doubtful accounts.
However, with regard to trade receivables that do not contain a significant financing component,
allowance for doubtful accounts is always recognized at an amount equal to the lifetime expectedcredit losses, regardless of whether credit risk has increased significantly since the initial recognition.
(iv) Derecognition of financial assets
If contractual rights to cash flows arising from a financial asset are extinguished, or if a financial
asset is transferred and substantially all risks and economic rewards relating to ownership of the asset
are transferred, the financial asset is derecognized.
2) Financial liabilities
Financial liabilities are initially measured at fair value after deducting transaction expenses. Afterinitial recognition, they are measured at amortized cost using the effective interest method.
When a financial liability is extinguished, that is, the debt is dismissed, cancelled or expired, the Groupderecognizes the financial liability.
3) Offsetting financial instruments
Financial assets and liabilities are offset, with the net amount presented in the consolidated statementof financial position, if the Group holds a legal right to offset the balance and intends either to settle
on a net basis, or to realize the asset and settle the liability simultaneously.
4) Derivatives
As its policy, the Group does not conduct derivative transactions for speculative purposes.
Derivatives to which hedge accounting is not applied are classified as either “financial assets measured
at fair value through profit or loss” or “financial liabilities measured at fair value through profit or loss”
and they are accounted for in accordance with the aforesaid classification.
(5) Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, demand deposits, and short-term investments withmaturities or repayment terms of three months or less from the date of acquisition that are readily
convertible to cash and subject to an insignificant risk of changes in value.

64

(6) Inventories
Inventories are measured at cost, or if lower, at net realizable value. Net realizable value is calculated
by deducting estimated costs and estimated costs to sell required up to the completion from theestimated selling price in the normal course of business. The cost is calculated principally based on the
progressive average inventory method and includes material costs, labor costs and manufacturing
expenses.
(7) Property, plant and equipment
The cost model is applied in measurement of property, plant and equipment. Property, plant andequipment are recorded at the value calculated as cost less any accumulated depreciation and any
accumulated impairment loss.
The cost of property, plant and equipment includes cost directly incidental to the acquisition of assets,
and the initial estimated costs of dismantling and removing the assets and restoration costs for the places
where the assets were located. Depreciation of these assets is started when the assets become available
for use.
Maintenance costs arising on a daily basis for property, plant and equipment are recognized in profit orloss when incurred.
Depreciation expense for assets except for land and construction in progress is recorded by the straightline method over the following estimated useful lives.
Buildings and structures

5 to 31 years

Machinery, equipment and vehicles

3 to 9 years

Tools, furniture and fixtures

2 to 6 years(8) Goodwill and intangible assets
1) Goodwill
Goodwill is recorded at the value calculated as cost less any accumulated impairment loss. Goodwill
is not amortized. As a result of impairment test performed each fiscal year, impairment loss is recorded
if necessary. Impairment loss of goodwill is recognized in the consolidated statement of income andnot reversed subsequently. Information on measurement on initial recognition is provided in (2)Business combinations.
2) Intangible assets
The cost model is applied in measurement of intangible assets. Intangible assets are recorded at thevalue calculated as cost less any accumulated amortization and any accumulated impairment loss.
(i) Properties for development
Expenditure incurred in development activities are capitalized only if it can be verified that all thefollowing conditions are met:
• Technical practicability of completing the intangible asset so that the asset can be used or sold
• The entity’s intention to complete the intangible asset and then use or sell the asset• Ability to use or sell the intangible asset• Highly probable method for the intangible asset to generate future economic benefits• Usability of appropriate technical, financial and other resources necessary to complete
development of the intangible asset and then use or sell the asset• Ability to reliably measure expenditure attributable to the intangible asset during the development
periodThe amount of initial recognition of properties for development is the total of expenses arising in the
period from the date when an intangible asset meets all the above recognition requirements for the
first time to the completion of development. Properties for development are amortized using thestraight-line method over a period in which funds spent for the development are expected to be65

recovered. The amortization method and useful life are reviewed at the end of each fiscal year andrevised as needed.
(ii) Other intangible assets
Other intangible assets consist of software. Software is amortized using the straight-line method overits estimated useful life of five years from the time when it becomes usable. The amortization method
and useful life are reviewed at the end of each fiscal year and revised as needed.
(9) Leases
The Group judges whether a contract is a lease or contains a lease when entering into the contract. If
the contract conveys the right to control the use of identified assets for a period of time in exchange forconsideration, the Group judges whether such contract is a lease or contains a lease.
If the contract is judged to be a lease or contains a lease, the right-of-use assets and lease liabilities arerecognized as of the commencement date of the lease. Lease liabilities are measured at the present valueof the total amount of accrued lease payments and right-of-use assets are measured at cost, which
comprises the amount of the initial measurement of the lease liability adjusted for initial direct costs,
etc.
Following initial recognition, right-of-use assets are depreciated on a systematic basis over the leaseterm.
In the consolidated statement of financial position, right-of-use assets are presented in “property, plantand equipment” and lease liabilities are presented in “other financial liabilities.”
Lease payments are allocated to finance costs and repayments of lease liabilities based on the effective
interest method with finance costs recognized in the consolidated statement of income.
However, right-of-use assets and lease liabilities are not recognized for short-term leases with leaseterms of 12 months or less and leases where the underlying assets are of low value, and lease payments
are recognized as an expense over the lease term using the straight-line method.
(10) Impairment
The Group assesses whether there is any indication of impairment at the end of each fiscal year for the
carrying amounts of non-financial assets except for inventories and deferred tax assets. If any such
indication exists, the recoverable amount of the asset is estimated. The recoverable amount of goodwill
is estimated at the same time in each fiscal period.
The recoverable amount of an asset or a cash-generating unit is the higher of its value in use or its fairvalue less costs to sell. In calculation of value in use, estimated future cash flows are discounted to thepresent value using the pretax discount rate that reflects time value of money and risks inherent to theasset. Assets that are not individually tested for impairment are integrated in the smallest cashgenerating unit that generates cash inflow substantially independent of cash inflow of other assets orasset groups through continued use. Impairment loss is recognized in profit or loss when the carrying
amount of the asset or cash-generating unit exceeds the estimated recoverable amount.
For previously recognized impairment loss, the Group assesses whether there is any indication of adecrease or disappearance of the loss at the end of each fiscal year. For assets or cash-generating units
for which there is any indication of reversal of impairment loss, the recoverable amount is estimated,
and the impairment loss is reversed if the recoverable amount exceeds the carrying amount. Reversalof impairment loss is recognized in profit or loss to the extent that the carrying amount assuming that
impairment loss recognized for the asset in the past period had not existed is not exceeded. Impairment
loss relating to goodwill is not reversed.
(11) Employee benefits
1) Defined-benefit retirement benefit plans
For defined-benefit retirement benefit plans, the net amount of the present value of defined benefit
obligations and the fair value of plan assets is recognized as liabilities or assets. The present value of
defined benefit obligations and related service costs are, as a general rule, calculated using the
projected unit credit method. The discount rate used to calculate the present value of defined benefit

66

obligations is, as a general rule, determined by reference to the market yield on high quality corporate
bonds as of the end of the fiscal year.
The Group recognizes remeasurements arising from defined-benefit retirement benefit plans as othercomprehensive income and immediately transfers the amounts to retained earnings.
2) Defined-contribution retirement benefits
Expenses for defined-contribution retirement benefits are recognized as current expenses at theamount of contributions required.
3) Multi-employer plans
Multi-employer plans, for which the amount of plan assets corresponding to the entity’s own
contributions cannot be calculated reasonably, are accounted for in the same manner as defined
contribution plans.
4) Short-term employee benefits
Short-term employee benefits are expensed when an employee renders the related service.
Bonus accrual and paid absences are recognized as liabilities when the Group has legal or constructive
obligations to pay them and when a reliable estimate of the amount of obligations can be made.
(12) Share-based remuneration
The Group has adopted a restricted share-based remuneration plan for the Company’s Directors(excluding Directors who are Audit and Supervisory Committee Members) as equity-settled sharebased remuneration. Consideration for services received is measured at fair value of the Company’s
shares on the vesting date. It is recognized as an expense on the consolidated statement of income overthe vesting period, and the same amount is recognized as an increase in capital on the consolidated
statement of financial position.
(13) Provisions and contingent liabilities
When there are present legal or constructive obligations as a result of past events, it is highly probablethat outflows of resources with economic benefits will be required to settle the obligations, and reliable
estimates can be made of the amount of obligations, provisions are recognized by estimating
expenditure necessary to settle the present obligations taking into account uncertainties related to the
obligations at the end of the fiscal year.
If the time value of money for provisions is significant, the provisions are measured at discounted
present value.
If there is a potential liability as of the end of the period and it is not possible to determine whether it isa liability as of the end of the period, or if it does not meet the criteria for recognizing a provision, it isnoted as a contingent liability.
(14) Revenue
The Group recognizes revenues based on the following five-step approach:
Step 1: Identify the contract(s) with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when the entity satisfies a performance obligation
The Group is principally engaged in the motorcycles business, the automobile business, and the nonmobility business. With regard to the sales of these products, the Company recognizes revenue at thetime of delivery of a product since it considers that the customer obtains control over the product andperformance obligations are satisfied at the time of delivery of the product. Revenue is measured at theamount of consideration promised in contracts with customers less discounts, etc.

67

(15) Government grants
Government grants are measured at fair value and recognized when there is reasonable assurance that
the Group will comply with the conditions attached to the grants and that the grants will be received.
Grants for expenses incurred are recorded as revenue in the fiscal year during which the expenses
occurred. Grants for the acquisition of an asset are recorded as other income regularly over the usefullife of the asset, and unearned grant income is recorded as deferred income in liabilities.
(16) Finance income and finance costs
Finance income mainly consists of interest income, dividend income, gain on sale of financial assets,changes in the fair value of financial assets measured at fair value through profit and loss, and foreignexchange gains.
Interest income is recognized using the effective interest method when the income arises. Dividend
income is recognized when the Group’s right to receive the income is established.
Finance costs mainly consist of interest expense, loss on sale of financial assets, changes in the fairvalue of financial assets measured at fair value through profit and loss, and foreign exchange losses.
Interest expense is recognized using the effective interest method when incurred.
(17) Income taxes
Income taxes consist of current taxes and deferred taxes. These taxes are recognized in profit or loss,
except for those related to business combinations and items recognized directly in equity or othercomprehensive income.
Current taxes are measured at the amount of expected tax payment to or expected tax refund from tax
authorities. The amount of taxes is computed in accordance with tax rates and tax laws that are in effector substantially in effect by the end of the fiscal year in countries where the Group conducts businessactivities and earns taxable profits or losses.
Deferred taxes are recognized for temporary differences between accounting carrying amounts of assets
and liabilities as of the reporting date and amounts of them for tax purposes, unused tax losses andunused tax credits.
Deferred tax assets are recognized for deductible temporary differences to the extent that it is highly
probable that taxable profits will be available against which the deductible temporary differences could
be utilized. Deferred tax liabilities are recognized for taxable temporary differences.
The carrying amount of deferred tax assets is reviewed in every fiscal period, and reduced by the amountof deferred tax assets for which taxable profit sufficient to use all or part of the deferred tax assets areunlikely to be earned. Unrecognized deferred tax assets are reassessed in every fiscal period andrecognized to the extent that it is highly probable that deferred tax assets are realizable with futuretaxable profit.
Deferred tax assets and liabilities are not recorded for the following temporary differences:• Temporary differences arising from initial recognition of goodwill• Temporary differences arising from initial recognition of assets and liabilities which occur throughtransactions that affect neither accounting profit nor taxable profit for tax purposes, except forbusiness combinations and transactions that give rise to an equal amount of taxable temporary
differences and deductible temporary differences• In cases where, for taxable temporary differences associated with investments in subsidiaries, timingof reversal can be controlled and it is highly probable that such temporary differences are not reversed
in a foreseeable period
Deferred tax assets and liabilities are measured in accordance with tax rates and tax laws expected tobe applied in the period in which the assets are realized or the liabilities are settled based on tax rates
and tax laws that are in effect or substantially in effect at the end of the fiscal year.
Deferred tax assets and liabilities are offset if the Group has a legally enforceable right to offset current
tax assets against current tax liabilities, and they are related to income taxes levied by the same taxation
authority on the same taxable entity.
68

The Group has applied the temporary exceptions provided for in IAS 12 Income Taxes and does notrecognize any deferred tax assets or liabilities for income taxes arising from global minimum tax, nor
are they included in the disclosed amounts.
The Company and some of its domestic subsidiaries have applied the group profit and loss sharing
regime (the group relief system).
(18) Earnings per share (attributable to owners of parent)
Basic earnings per share are calculated by dividing profit or loss for the year attributable to ordinary
equity holders of parent, by the weighted-average number of ordinary shares issued during the periodthat is adjusted by the number of treasury shares. Diluted earnings per share are not calculated because
there are no potential ordinary shares with dilutive effects.
(19) Shareholders’ equity
1) Ordinary shares
Ordinary shares issued by the Company are recorded at the issuance value in issued capital and sharepremium.
2) Treasury shares
When treasury shares are acquired, the consideration paid is recognized as deduction from equity.
When treasury shares are sold, the difference between the carrying amount and consideration at thetime of the sale is recognized as share premium.
4. Segment information(1) Overview of reportable segments
The Group’s reportable segments are components of the Group for which discrete financial information
is available, and whose operating results are regularly reviewed by the Board of Directors to makedecisions about managerial resources to be allocated to the segments and assess their performances. In
the Group, the Head of business operation of motorcycles business and the Head of business operationof automobiles business develop domestic and overseas comprehensive strategies and build operationsin the motorcycle business and the automobile business, respectively. The Head of business strategy
performs the same role for the non-mobility business. Thus the Group has three reportable segments:
the “motorcycles business,” the “automobiles business,” and the “non-mobility business.” Themotorcycles business manufactures clutches for motorcycles, scooters and ATVs and other products,
while developing new businesses in the EV/CASE area. The automobile business manufactures clutches
for manual and automatic transmission automobiles and other products, while developing new
businesses in the EV/CASE area. The non-mobilities business develops new businesses, primarily inthe environmental and energy sectors.
(Change in classification of business segments)
The Group has been working on transformation of its business portfolio and strengthening its
management base in order to adapt to recent changes in the business environment. Under the 12th
Medium-Term Management Plan announced in May 2023, the Group’s growth strategy is to enhance
the profitability of its existing clutch business through selection and concentration of management
resources while promoting initiatives for the creation of new businesses to transform the entire
organization into one that consistently offers new value in the mobility and non-mobility areas.
As a result of considering performance evaluation, the decision-making process and other factors
involved in the Group’s management and administration in conjunction with this, the reportablesegments were changed from the previous two segments of “Motorcycle clutches” and “Automobile
clutches” to the three segments of “Motorcycle business,” “Automobiles business,” and “Non-mobility
business” from the fiscal year ended March 31, 2024. Segment information for the fiscal year ended
March 31, 2023 has been prepared and disclosed based on the reportable segment classifications
following the changes to business segments outlined above.

69

(2) Revenue and performance for reportable segments
Fiscal year ended March 31, 2023
Reportable segments
Consolidated

Motorcycles
business

Automobiles
business

Non-mobility
business

Total

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Millions of yen

100,967–

117,960–

11–

218,939–

218,939–

100,967

117,960

11

218,939

218,939(5,401)(7,825)(131)(13,358)(13,358)(85,837)(105,663)(2,176)(193,677)(193,677)

9,729

4,470

(2,296)

11,903

11,903

Revenue
External revenue
Intersegment revenue
Total
Depreciation and amortization
expenseOther profit (loss)
Operating profit (loss)
Finance income
Finance costs
Share of profit (loss) in investments
accounted for using the equity method

1,820
(74)

Profit before income taxes

13,641(9)Notes: 1. Other profit (loss) includes ¥315 million of impairment loss (¥315 million for the automobiles business).
2. The breakdown of capital investments by business segment is ¥2,590 million for the motorcycles business, ¥5,050
million for the automobiles business, and ¥679 million for the non-mobility business.

Fiscal year ended March 31, 2024
Reportable segments

Revenue
External revenue
Intersegment revenue
Total
Depreciation and amortization
expenseOther profit (loss)
Operating profit (loss)

Consolidated

Motorcycles
business

Automobiles
business

Non-mobility
business

Total

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Millions of yen

106,925–

133,340–17–

240,283–

240,283–

106,925

133,34017

240,283

240,283(5,261)(7,465)(133)(12,861)(12,861)(92,116)(117,587)(2,615)(212,320)(212,320)

9,547

8,287

(2,732)

15,102

15,102Finance income
Finance costs
Share of profit (loss) in investments
accounted for using the equity method

4,097
(22)
(8)

Profit before income taxes

19,169Notes: 1. Other profit (loss) includes ¥735 million of impairment loss (¥735 million for the automobiles business).
2. The breakdown of capital investments by business segment is ¥3,297 million for the motorcycles business, ¥4,074
million for the automobiles business, and ¥902 million for the non-mobility business.

70(3) Geographic information
The regional breakdown of revenue and non-current assets is as follows:
Revenue from external customers
Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2024

Millions of yen

Japan
U.S.
Indonesia
India
Other
Total

Millions of yen

17,98892,324
23,51927,51657,59017,899102,452
27,88632,411
59,632

218,939240,283

Notes: 1. Revenue is classified by country based on the location of customers.
2. Major countries belonging to “Other” category are Thailand, China, Brazil and Vietnam.

Non-current assets
As of March 31, 2023

As of March 31, 2024

Millions of yen

Millions of yen

Japan
U.S.
China
Other
Total

23,01919,816
3,194
15,056

22,464
18,317
3,780
15,76561,08660,327

Notes: 1. Non-current assets are classified based on the location of assets and do not include financial assets, deferred tax
assets and defined benefit assets, etc.
2. Main countries belonging to “Other” category are Indonesia, Thailand, India and Vietnam.

(4) Information about major customers
Counterparties of which revenue accounts for 10% or more of revenue of the entire Group
Related segment

Honda Motor Co., Ltd. and its group
Ford and its group
General Motors

Motorcycles business
Automobiles business
Automobiles business
Automobiles business

Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2024

Millions of yen

Millions of yen

48,39833,09340,257
22,13350,10340,85645,02824,630

5. Revenue
The Group is principally engaged in the motorcycles business, the automobiles business, and the nonmobility business. With regard to the sales of these products, the Company recognizes revenue at thetime of delivery of a product since it considers that the customer obtains control over the product andperformance obligations are satisfied at the time of delivery of the product. Revenue is measured at theamount of consideration promised in contracts with customers less discounts, etc.
The statement of disclosed information about disaggregated revenue is omitted on the basis of judgmentthat information stated in “4. Segment information” fulfills disclosure requirements prescribed in IFRS
15.
(1) Balance of contracts
Balance of contract liability is as follows:71

Fiscal year ended March 31, 2023
As of April 1, 2022

As of March 31, 2023

Millions of yen

Millions of yen

Contract liability

11

27

Fiscal year ended March 31, 2024
As of April 1, 2023

As of March 31, 2024

Millions of yen

Contract liability

Millions of yen

27

61

The amount of revenue recognized in the balance of contract liability at the beginning of the period
was ¥11 million in the previous fiscal year and ¥27 million in the fiscal year under review.
Note: Contract liability is included in “other current liabilities” in the consolidated statement of financial position.

(2) Transaction price allocated to the remaining performance obligations
The statement of information about remaining performance obligations is omitted because there isno significant transaction whose predicted individual term of contract exceeds one year in the Group.
Considerations arising from contracts with customers contain no significant amount not included intransaction prices.
(3) Performance obligations
1) Point in time at which performance obligations are satisfied
Unless set forth otherwise in contracts, in principle, the point in time at which performanceobligations are satisfied is the point in time at which products are delivered to customers.
There is no contract for fulfilling performance obligations over a fixed period in step with theprovision of services.
2) Conditions for the payment of considerations
Payments normally become due one month to five months after the fulfillment of performanceobligations. They do not include any significant financial component.
3) Content of goods or services transferred to customers
The goods transferred to customers are principally motorcycle and automobile clutches.
The Group does not conduct transactions as an agent.
4) Transaction price allocated to the remaining performance obligations at the end of the fiscal year
The statement of allocated transaction prices and their breakdown by forecasted net sales recording
period is omitted because no unfulfilled performance obligation existed as of the last day of the
fiscal year under review.
5) Product warranties and related obligations
Product sales agreements with customers include clauses in which the products are guaranteed tomeet the agreed specifications, and the Company recognizes provision for product warranty forcosts related to these guarantees. Refer to the “21. Provisions and contingent liabilities” in Notes toconsolidated financial statements for details on these provisions.
(4) Assets recognized from the costs to obtain or fulfill a contract with a customer
There was no asset recognized from the costs of contracts as of the end of the previous fiscal year
and as of the end the fiscal year under review.

726. Cash and cash equivalents
Breakdown of cash and cash equivalents
As of March 31, 2023

As of March 31, 2024

Millions of yen

Millions of yen

Cash and deposits

53,73882,028

Note: Cash and cash equivalents recorded in the consolidated statement of financial position are equal to cash and cash
equivalents recorded in the consolidated statement of cash flows.

7. Trade and other receivables
Breakdown of trade and other receivables
As of March 31, 2023

As of March 31, 2024

Millions of yen

Millions of yen

Notes and accounts receivable - trade
Accounts receivable - other
Allowance for doubtful accounts
Total

34,8863,861(8)36,6083,597(8)38,73940,198

Note: Information on management of credit risk and liquidity risk to “trade and other receivables” is provided in the note “29.
Financial instruments.”

8. Other financial assets and other financial liabilities
Breakdown of other financial assets
As of March 31, 2023

As of March 31, 2024

Millions of yen

Millions of yen

Other current financial assets
Financial assets measured at amortized cost
Time deposits
Bonds
Loans
Total
Other non-current financial assets
Financial assets measured at fair value
through profit or loss
Investments in limited liability investment
partnerships
Financial assets measured at fair value
through other comprehensive income
Shares of subsidiaries and associates
Investment securities
Investments in capital
Financial assets measured at amortized cost
Time deposits
Long-term deposits
Loans
Other
Total

73

2,799
1,031
71

4,116
–
64

3,902

4,181

785

756

6,676
3,507
4

10,844
4,733
4

1,959
648
286
526

556
648
232
778

14,395

18,554

Breakdown of other financial liabilities
As of March 31, 2023

As of March 31, 2024

Millions of yen

Millions of yen

Other current financial liabilities
Financial liabilities measured at amortized
cost
Lease liabilities

313

458

313

458

1,096

1,100

1,096

1,100

Total
Other non-current financial liabilities
Financial liabilities measured at amortized
cost
Lease liabilities
Total

9. Inventories
Breakdown of inventories
As of March 31, 2023

As of March 31, 2024

Millions of yen

Millions of yen

Finished goods
Work in process
Raw materials and supplies

5,503
4,674
22,5385,409
4,750
22,649Total

32,71532,809The amounts of write-down of inventories recognized as expenses and inventories recognized as
expenses
Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2024

Millions of yen

Millions of yen

Amount of write-down
Amount of inventories

1,312
185,944

1,406
198,231

10. Other assets and liabilities
Breakdown of other assets
As of March 31, 2023

As of March 31, 2024

Millions of yen

Millions of yen

Other current assets
Accrued income taxes
Advances paid
Prepaid expenses
Suspense payments
Other
Total
Other non-current assets
Long-term prepaid expenses
Defined benefit asset
Total

74

1,220
945
440
33
451

1,652
1,171
546
36
207

3,091

3,615

155
239

146
394

394

540

Breakdown of other liabilities
As of March 31, 2023

As of March 31, 2024

Millions of yen

Millions of yen

Other current liabilities
Accrued expense
Accrued bonuses
Other

2,927
2,058
3,201

3,536
2,023
3,519

Total

8,187

9,079

Other non-current liabilities
Deferred income
Other

271
200

254
271

Total

472

525

11. Property, plant and equipment
Changes in cost and accumulated depreciation and impairment loss of property, plant and equipment, andcarrying amounts thereof(1) Cost
Buildings
andstructures

Machinery,equipment
and vehicles

Tools,
furnitureandfixtures

Land

Right-ofuse assets

Construction inprogress

Total

Millions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyen

April 1, 2022
Acquisition
Disposal
Transfer of line items
Exchange differenceson translation
Other

43,301
158
(71)
1,679

145,698
2,074(1,866)
2,784

21,428935(1,668)
1,117

8,110
7
–
–

4,345
296
(524)
–

3,266
4,721
–
(5,581)

226,150
8,193(4,130)
–

2,094

8,324

752

81

142

119

11,515

–

–

–

–

(243)

(407)

(651)

March 31, 2023
Acquisition
Disposal
Transfer of line items
Exchange differenceson translation
Other

47,162
182
(245)
1,721

157,015
1,517(4,715)
3,068

22,566778(1,759)
1,113

8,200
–
–
–

4,015
559
(161)
–

2,118
5,794
–
(5,904)

241,078
8,832(6,882)–

3,480

14,407

1,483

168

343

158

20,041

–

–

–

–

–

(83)

(83)

March 31, 2024

52,301

171,292

24,182

8,368

4,756

2,082

262,98575

(2) Accumulated depreciation and impairment loss
Buildings
andstructures

Machinery,equipment
and vehicles

Tools,
furnitureandfixtures

Land

Right-ofuse assets

Construction inprogress

Total

Millions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyen

April 1, 2022
Depreciation
Impairment loss
DisposalExchange differenceson translation
Other

26,149
1,328
31
(53)

118,7318,792
144(1,761)

18,6161,604
81(1,477)

1,408
–
–
–

1,126
556
–
(525)

88
–
53
–

166,121
12,280310(3,818)

1,179

6,885

661

–

32

–

8,758

–

–

–

–

(58)

–

(58)

March 31, 2023
Depreciation
Impairment loss
DisposalExchange differenceson translation
Other

28,635
1,418
146
(161)

132,790
7,920
235(4,449)19,4862,009
45(1,713)

1,408
–
298
–

1,130
559
–
(155)

141
–
10
–

183,594
11,908735(6,480)2,071

12,604

1,246

–

71

–

15,993

–

0

–

–

–

–

0

March 31, 2024

32,110149,101

21,073

1,706

1,606

152

205,750

Buildings
andstructures

Machinery,equipment
and vehicles

Tools,
furnitureandfixtures

Land

Right-ofuse assets

Construction inprogress

Total

Millions ofyenMillions ofyenMillions ofyenMillions ofyenMillionsof yenMillions ofyenMillions ofyen

17,151

26,967

2,811

6,702

3,218

3,177

60,02918,527

24,224

3,079

6,792

2,884

1,976

57,483

20,191

22,191

3,109

6,662

3,150

1,929

57,234(3) Carrying amount

Balance as of April 1,
2022
Balance as of March
31, 2023
Balance as of March
31, 2024

Notes: 1. Depreciation expense of property, plant and equipment is recorded in “cost of sales” and “selling, general andadministrative expenses” in the consolidated statement of income.
2. Information on commitments related to purchase of property, plant and equipment is provided in the note “32.
Commitments.”

7612. Goodwill and intangible assets
Changes in cost and accumulated amortization and impairment loss of goodwill and intangible assets,
and carrying amounts thereof(1) Cost
Goodwill

Intangible assets

Total

SoftwareProperties
fordevelopment

Water
facilities
usage
right

Patent
right

Other

Millions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyen

April 1, 2022
Acquisition
Increase due to internal
development
Disposal
Transfer of line items
Exchange differenceson translation
Other

489
–

2,290
104

6,241
–

0
–

109
–

–
2

9,131
106

–

–

664

–

–

–

664

–
–

(46)
–

(1,204)
–

–
–

–
–

–
–

(1,250)
–

–

22

–

–

–

–

22

–

–

–

–

–

–

–

March 31, 2023
Acquisition
Increase due to internal
development
Disposal
Transfer of line items
Exchange differenceson translation
Other

489
–

2,370
123

5,701
–

0
–

109
0

2
–

8,674
123

–

–

375

–

–

–

375

–
–

(64)
–

(917)
–

–
–

–
–

–
–

(981)
–

–

46

–

–

–

–

46

–

–

–

–

–

–

–

March 31, 2024

489

2,476

5,159

0

109

2

8,238

(2) Accumulated amortization and impairment loss
Goodwill

Intangible assets

Total

SoftwareProperties
fordevelopment

Water
facilities
usage
right

Patent
right

Other

Millions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyen

April 1, 2022
Amortization expense
Impairment loss
DisposalExchange differenceson translation
Other

489
–
–
–

1,892
162
4
(46)

2,928
954
–
(1,204)

0
0
–
–

14
13
–
–

–
0
–
–

5,325
1,131
4
(1,250)

–

15

–

–

–

–

15

–

–

–

–

–

–

–

March 31, 2023
Amortization expense
Impairment loss
DisposalExchange differenceson translation
Other

489
–
–
–

2,029
157
0
(64)

2,679
836
–
(917)

0
0
–
–

28
13
–
–

0
0
–
–

5,226
1,008
0
(981)

–

37

–

–

–

–

37

–

–

–

–

–

–

–

March 31, 2024

489

2,160

2,599

0

42

0

5,291

77

(3) Carrying amount
Goodwill

Intangible assets

Total

SoftwareProperties
fordevelopment

Water
facilities
usage
right

Patent
right

Other

Millions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyenMillions of
yen

–
–
–

398
341
316

3,312
3,021
2,560

0
0
0

94
81
67

–
2
1

3,805
3,447
2,946

April 1, 2022
March 31, 2023
March 31, 2024

Notes: 1. Amortization expense of software is recorded in “cost of sales” and “selling, general and administrative expenses”
in the consolidated statement of income, while amortization expense of properties for development is recorded in“cost of sales.”
2. Information on commitments related to purchase of intangible assets is provided in the note “32. Commitments.”

13. Impairment loss
(1) Breakdown of assets for which impairment loss is recognized by type
Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2024

Millions of yen

Millions of yen

Buildings and structures
Machinery, equipment and vehicles
Tools, furniture and fixtures
Construction in progress
Land

31
144
81
53
–

146
235
45
10
298

Total property, plant and equipment
Software

310
5

735
0

Total intangible assets

50Total impairment loss

315

735

Notes: 1. The impairment loss is included and recorded in “other expense” in the consolidated statement of income.
2. The reportable segment with impaired assets in the fiscal year ended March 31, 2023 and the fiscal year ended
March 31, 2024 is the automobile business.

(2) Cash-generating unit
The Group groups assets based on the smallest unit of asset groups identifiable as a unit generating cash
inflow (cash-generating unit) that is substantially independent of cash inflow of other assets or asset
groups, by company and type of business. Idle assets that are not expected to be used in the future aregrouped by individual asset unit.
(3) Impairment loss
Fiscal year ended March 31, 2023
In consideration of a deterioration of business environment and profitability, the Company has
conducted an impairment test with regard to CHENGDU YONGHUA. F.C.C. CLUTCHES CO., LTD.,a subsidiary of the Company, based on the latest plan. Consequently, the carrying amount of the assets
held by the subsidiary was reduced to the recoverable amount and recorded as impairment loss (¥315
million) in “other expense.”
The recoverable amount is calculated with the value in use, obtained by discounting the estimatedamount of cash flows based on the future business plan approved by management to the present value
using the pretax weighted average cost of capital (2.43%) for the cash-generating unit.

78

Fiscal year ended March 31, 2024
In consideration of a deterioration of business environment and profitability, the Company has
conducted an impairment test with regard to FLINT CO., LTD. and CHENGDU YONGHUA. F.C.C.
CLUTCHES CO., LTD., subsidiaries of the Company, based on the latest plan. Consequently, thecarrying amount of the assets held by each of the subsidiaries was reduced to the recoverable amountand recorded as impairment loss (¥735 million) in “other expense.”
The recoverable amount is calculated with the value in use, obtained by discounting the estimatedamount of cash flows based on the future business plan approved by management to the present value
using the pretax weighted average cost of capital for the cash-generating unit.
The pretax weighted average cost of capital for the cash-generating unit for the relevant Group
companies is 2.17% for FLINT CO., LTD. and 2.23% for CHENGDU YONGHUA. F.C.C. CLUTCHES
CO., LTD.
(4) Significant accounting estimates and assumptions
1) The amount recorded in the consolidated financial statements for the fiscal year ended March 31, 2024
Fiscal year ended
March 31, 2023

(Millions of yen)
Fiscal year ended
March 31, 2024

Impairment loss
315
735
Note: Of “property, plant and equipment” in the fiscal year ended March 31, 2024, ¥298 million relates to FLINT
CO., LTD. and ¥437 million relates CHENGDU YONGHUA. F.C.C. CLUTCHES CO., LTD., which areconsolidated subsidiaries, and “intangible assets” relate to CHENGDU YONGHUA. F.C.C. CLUTCHES
CO., LTD. Of impairment loss of ¥735 million, ¥298 million relates to FLINT CO., LTD. and ¥437 million
relates to CHENGDU YONGHUA. F.C.C. CLUTCHES CO., LTD.

2) Information for understanding the details of accounting estimates(i) Calculation method
Impairment is measured for assets indicating impairment and asset groups, and if the recoverable
amount is below the carrying amount, such difference is recorded as impairment loss. The Groupmeasures the recoverable amount of such asset groups by value in use and such value in use iscalculated as the discounted present value of the estimated future cash flows.
The above impairment amount includes assets scheduled to be sold and under such circumstances if
the net estimated selling price of such assets is below the carrying amount, such difference is recorded
as impairment loss.
(ii) Major assumption
It is very hard to forecast the impact that changes in the Japanese economy and business environment
will have on the Group’s performance, but considering the business environment of companies
subject to the above impairment based on certain assumptions with improved estimates, the Company
calculates the future cash flows using a revised business plans with somewhat conservative views forthe amount of orders relative to the initial plan.
(iii) Impact on the consolidated financial statements for the next fiscal year
The future performance of the companies subject to the above impairment may be affected by the
future uncertain economic conditions and change in the business environment. If the recoverabilityof the impairment loss recorded in the fiscal year ended March 31, 2024 increases, there could be an
impact on the consolidated financial statements of subsequent fiscal years due to reversal of such
impairment loss, etc.

7914. Investments accounted for using the equity method
Summary of financial information aggregating accounts of associates accounted for using the equity
methodAs of March 31, 2023

As of March 31, 2024

Millions of yen

Total carrying amountMillions of yen

161

127

Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2024

Millions of yen

Millions of yen

ProfitOther comprehensive income

(9)
(0)

(8)
(15)

Comprehensive income

(9)

(23)

Note: There is no associate that has quoted market prices of its shares.

15. Income taxes(1) Deferred tax assets and liabilities
Breakdown of and changes in deferred tax assets and deferred tax liabilities by major cause
Fiscal year ended March 31, 2023
April 1,
2022

Recognizedthrough
profit orloss

Recognizedin othercomprehensive income

Recognizeddirectly inequityOther

March 31,
2023

Millions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyen

Deferred tax assets
Inventories
Accrued bonuses
Accrued expense
Non-current assets
Defined benefit liability
Other

1,167
427
248
1,321
442
1,091

(16)
3
(41)
(10)
153
656

–
–
–
–
(143)
–

–
–
–
–
–
–

(7)
–
(2)
(2)
0
(22)

1,143
430
204
1,308
454
1,725

Total

4,699

744

(143)

–

(33)

5,267

(3,615)

724

–

–

(117)

(3,008)(1,916)

–

(117)

–

–

(2,033)(4,438)

(113)

–

–

–

(4,551)

(106)

(104)

–

–

4

(206)

(10,077)

507

(117)

–

(112)

(9,800)

Deferred tax liabilities
Non-current assets
Valuation difference ofequity financial
instruments measured atfair value through othercomprehensive income
Retained surplus ofoverseas consolidated
subsidiaries
Other
Total

80

Fiscal year ended March 31, 2024
April 1,
2023

Recognizedthrough
profit orloss

Recognizedin othercomprehensive income

Recognizeddirectly inequityOther

March 31,2024

Millions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyen

Deferred tax assets
Inventories
Accrued bonuses
Accrued expense
Non-current assets
Defined benefit liability
Other

1,143
430
204
1,308
454
1,725

(79)
(288)
(26)
(73)
72
(446)

–
–
–
–
(213)
–

–
–
–
–
–
–

(1)
–
(1)
(8)
0
(16)

1,062
142
176
1,227
312
1,263

Total

5,267

(841)

(213)

–

(26)

4,185

(3,008)

532

–

–

(25)

(2,500)(2,033)–(1,467)––(3,500)(4,551)

(152)

–

–

–

(4,703)

(206)

54

–

–

(2)

(153)

(9,800)435(1,467)–(27)(10,859)

Deferred tax liabilities
Non-current assets
Valuation difference ofequity financial
instruments measured atfair value through othercomprehensive income
Retained surplus ofoverseas consolidated
subsidiaries
Other
Total

The amounts of unused tax losses and deductible temporary differences for which deferred tax assets
have not been recognized are as follows:
As of March 31, 2023

As of March 31, 2024

Millions of yen

Millions of yen

Unused tax losses
Deductible temporary differences
Total

8,244
428

6,920
2,562

8,673

9,483

Expiration of unused tax losses for which deferred tax assets have not been recognized is as follows:
As of March 31, 2023

As of March 31, 2024

Millions of yen

Millions of yen

1st year
2nd year
3rd year
4th year
5th year and onward
Total

970
1,684
1,759
1,032
2,796

1,684
1,759
1,032
1,380
1,063

8,244

6,920

The total amount of taxable temporary differences associated with investments in subsidiaries for which
deferred tax liabilities have not been recognized was ¥51,229 million as of March 31, 2023 and ¥53,654
million as of March 31, 2024. For these taxable differences, deferred tax liabilities have not beenrecognized since the Group may control timing of their reversal and there is high possibility that thetemporary differences will not be reversed within a foreseeable period.

81

(2) Significant accounting estimates and assumptions pertaining to the recoverability of deferred tax assets
1) The amount recorded in the consolidated financial statements for the fiscal year ended March 31, 2024
Fiscal year ended
March 31, 2023

(Millions of yen)
Fiscal year ended
March 31, 2024

2,554

2,768

Deferred tax assets

2) Information for understanding the details of accounting estimates(i) Calculation method
Deferred tax assets are recorded as the tax amount pertaining to deductible temporary differences
and unused tax losses (hereinafter, deductible temporary differences, etc.) after deducting the amountof taxes thought unlikely to be recovered in future fiscal years.
The amount deducted as thought unlikely to be recovered is judged to be the amount of suchdeductible temporary differences, etc. that cannot be scheduled from forecast taxable income basedon the future business plan.
(ii) Major assumption
It is very hard to forecast the impact that changes in the Japanese economy will have on the Group’s
performance, but we presume that the economic conditions will gradually recover as a certain
assumption for making an improved estimate, and estimate the future taxable income, while
estimating the recoverability of deferred tax assets for accounting purposes.
(iii) Impact on the consolidated financial statements for the next fiscal year
We record deferred tax assets based on the currently anticipated forecast improvements, but future
tax income could be substantially affected by future changes in economic conditions and the businessenvironment, etc., which could have a major impact on the recoverability of deferred tax assets.
(3) Breakdown of income tax expense
Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2024

Millions of yen

Current tax expense
Deferred tax expense
Total

Millions of yen

5,090(1,252)

6,307
406

3,838

6,713

(4) Factors of differences between the effective statutory tax rate and the effective tax rate
Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2024%%

Effective statutory tax rate
Non-deductible expenses in calculation of
taxable profits
Unrecognized deferred tax assets
Tax credits
Difference from the applicable tax rate ofoverseas subsidiaries
Retained surplus of overseas subsidiaries
Other

29.9
2.9

29,9
3.1

1.5
(0.8)
(8.0)

(0.6)
(3.1)
(7.8)

0.8
1.8

0.8
12.7

Effective tax rate

28.1

35.0

82

Notes: 1. The Group is mainly liable for corporation, inhabitant, and enterprise taxes, and the effective statutory tax rate
calculated on this basis was 29.9% in the fiscal years ended March 31, 2023 and March 31, 2024. However, overseas
subsidiaries are liable for corporation tax in the country where they are located.
2. In Japan’s 2023 tax reform, a tax reform act (Act for Partial Revision of the Income Tax Act, etc. (Act No. 3 of2023)) (hereinafter referred to as the “Revised Corporation Tax Act”), which established a corporate tax
corresponding to global minimum tax including provisions related to it, was enacted on March 28, 2023. The
Revised Corporation Tax Act introduces the income inclusion rule (IIR), which is one of the BEPS global minimum
tax rules. This means that from fiscal years beginning on or after April 1, 2024, parent companies located in Japan
will be subject to an additional top-up tax until the tax burden of subsidiaries, etc. of a parent company located inJapan reaches the minimum tax rate (15%). This has no significant impact on the Group’s consolidated financial
statements. In addition, the Group has applied the temporary exceptions provided for in IAS 12 Income Taxes anddoes not recognize any deferred tax assets or liabilities for income taxes arising from global minimum tax, nor are
they included in the disclosed amounts.

16. Borrowings
Breakdown of borrowings
As of March 31, 2023

As of March 31, 2024

Average interest
rate

Millions of yen

Millions of yen%

Current
Financial liabilities measured
at amortized cost
Short-term borrowings

6,100

6,100

Total

6,100

6,100

Due

0.30

–

Notes: 1. “Average interest rate” shows weighted average interest rate on the balance as of March 31, 2024.
2. “Due” shows the repayment due for the balance as of March 31, 2024.
3. For the breakdown of the balance of borrowings by due date, refer to the note “29. Financial instruments, (3)Financial risk management, 2) Liquidity risk management.”

17. Leases
Breakdown of the expense relating to leases is as follows.
Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2024

Millions of yen

Millions of yen

Depreciation expense for right-of-use assets
Land, buildings and structures
Machinery, equipment and vehicles
Tools, furniture and fixtures
Total
Interest expense for lease liabilities
Expense for short-term leases
Expense for low-value asset leases
Total

83

461
66
28

465
63
30

556

559

7
8
2

12
21
1

18

35

The breakdown of the carrying amounts of right-of-use assets is as follows.
As of March 31, 2023

As of March 31, 2024

Millions of yen

Millions of yen

Right-of-use assets
Land, buildings and structures
Machinery, equipment and vehicles
Tools, furniture and fixtures
Total

2,627
133
123

2,916
116
116

2,884

3,150

Notes: 1. The amount of increase in the right-of-use assets was ¥296 million in the fiscal year ended March 31, 2023 and ¥559
million in the fiscal year ended March 31, 2024.
2. The total cash outflow for leases was ¥489 million in the fiscal year ended March 31, 2023 and ¥495 million in thefiscal year ended March 31, 2024.
3. The amount of lease liabilities was ¥313 million (current) and ¥1,096 million (non-current) in the fiscal year ended
March 31, 2023 and ¥458 million (current) and ¥1,100 million (non-current) in the fiscal year ended March 31,
2024. Lease liabilities are respectively included in the consolidated statement of financial position under “otherfinancial liabilities” of current liabilities and non-current liabilities.
4. The breakdown of the balances of lease liabilities by due date are provided in “29. Financial instruments, (3)Financial risk management, 2) Liquidity risk management.”

18. Information on cash flows(1) Changes in liabilities arising from financing activities
Changes in liabilities arising from financing activities are as follows.
Fiscal year ended March 31, 2023
(Millions of yen)
April 1, 2022

Changes not associated with cash flows

Changes
associated withcash flows

Foreign exchange
fluctuations andotherNew leases

March 31, 2023

Short-termborrowings
Lease liabilities

6,100
1,645

(489)

294

(39)

1,410

Total

7,745

(489)

294

(39)

7,510

–

–

–

6,100

Fiscal year ended March 31, 2024
(Millions of yen)
April 1, 2023
Short-termborrowings
Lease liabilities

6,100

Total

Changes not associated with cash flows

Changes
associated withcash flows

Foreign exchange
fluctuations andotherNew leases

March 31, 2024
6,100

–

–

–

1,410

(495)

559

83

1,558

7,510

(495)

559

83

7,658

(2) Significant non-cash transactions
Fiscal year ended March 31, 2023
The increase in right-of-use assets is stated in the note “17. Leases.”
Fiscal year ended March 31, 2024
The increase in right-of-use assets is stated in the note “17. Leases.”84

19. Trade and other payables
Breakdown of trade and other payables
As of March 31, 2023

As of March 31, 2024

Millions of yen

Millions of yen

Notes and accounts payable - trade
Electronically recorded obligations - operating
Accounts payable - other

15,141907
2,155

17,390
1,020
1,774

Total

18,204

20,184

20. Employee benefits
To provide for retirement benefits of employees, the Group has adopted funded and unfunded defined
benefit plans and defined contribution plans and has joined Nihon Jidosha Buhin Kogyo Kigyo Nenkin
Kikin, which is a multi-employer corporate pension fund.
(1) Defined benefit plans
The pension and retirement plans of the Company and certain of its subsidiaries generally entitle
employees to receive a retirement lump sum or pension payments calculated on the basis of salaryand years of service, or points based on these, at the time of retirement. The minimum payment in
the case of retirement before the retirement age is generally an amount based on retirement for
personal reasons.
Due to its defined benefit plans, the Company is exposed to actuarial risks, including price fluctuation
risks, interest rate risks, and life expectancy risks.
1) Amounts recognized in the consolidated statement of financial position
The year-end balances of defined benefit obligations and plan assets, and defined benefit liability
and defined benefit asset recognized in consolidated statement of financial position
As of March 31, 2023

As of March 31, 2024

Millions of yen

Millions of yen

Funded defined benefit obligations
Plan assets

9,349(9,682)

9,479(10,556)

Subtotal
Unfunded defined benefit obligations

(332)
1,621

(1,077)
1,818

Net amount of liabilities and assets recognizedin consolidated statement of financial position

1,288

740

Defined benefit liability
Defined benefit asset

1,527
(239)

1,135
(394)

Net amount of liabilities and assets recognizedin consolidated statement of financial position

1,288

740

Note: Defined benefit assets are included in “other non-current assets” in the consolidated statement of financial position.

2) Amounts recognized as retirement benefit expenses
Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2024

Millions of yen

Millions of yen

Retirement benefit expenses for defined benefit
plans

837

85

883

3) Reconciliation of defined benefit obligations
Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2024

Millions of yen

Millions of yen

Defined benefit obligations at beginning of
periodService cost
Interest cost
Past service costRemeasurement
Retirement benefits paid
Exchange differences on translation
Defined benefit obligations at end of period

11,244

10,970754
174
68(1,477)
112
95

798
230
(51)
(1,130)304
175

10,97011,297

Note: The weighted average duration of defined benefit obligations was 10.5 to 16.2 years as of March 31, 2023 and 9.8 to
15.2 years as of March 31, 2024.

4) Reconciliation of plan assets
Fiscal year ended March 31, 2023

Fiscal year ended March 31, 2024

Millions of yen

Millions of yen

Plan assets at beginning of period
Interest income
Remeasurement
Contributions by the employer
Retirement benefits paid
Exchange differences on translation

9,698
86
(177)
492
(427)
9

9,682
140
763
457
(555)
68

Plan assets at end of period

9,682

10,556

5) Composition of plan assets
As of March 31, 2023

As of March 31, 2024

Millions of yen

Millions of yen

Debentures
Shares
Other
Total

4,725
1,592
3,364

3,475
2,444
4,636

9,682

10,556

Note: A portion of plan assets is invested in jointly managed money trusts at trust banks. Jointly managed money trusts do
not have quoted prices in active markets, but the investments within jointly managed money trusts include listed sharesand debentures with quoted prices in active markets.

6) Major actuarial assumptions
As of March 31, 2023

As of March 31, 2024%%

Discount rate (Japan)
Discount rate (Overseas)

1.1
2.9 to 7.3

86

1.2
2.9 to 7.3

7) Sensitivity analysis
The impact of 0.5% changes in the key actuarial assumption on defined benefit obligations is asfollows:
As of March 31, 2023

As of March 31, 2024

Millions of yen

Millions of yen

0.5% increase in the discount rate
0.5% decrease in the discount rate

(487)
522

(482)
497

Note: The sensitivity analysis is calculated in a manner that keeps assumptions other than variable factors constant and does
not take into account interdependencies between the assumptions.

8) Cash flows
The amount of contributions to plan assets by the Company and certain of its consolidated
subsidiaries is determined based on various factors, including employees’ compensation levels
and years of service, the funded status of plan assets and actuarial calculations. The Company
and certain of its consolidated subsidiaries may make the necessary contributions if the amountof the reserve falls below the minimum reserve threshold. The Company and certain of its
consolidated subsidiaries estimate the amount to be contributed in the next fiscal year to be ¥496
million.
(2) Defined contribution plans
Amounts recognized as expenses for defined contribution plans
Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2024

Millions of yen

Millions of yen

Amount recorded as expenses

299

327

(3) Multi-employer plans
To the multi-employer plan, the amount calculated by multiplying salaries in the period employees
rendered services by a constant rate is contributed and contributions during the fiscal period arerecognized as retirement benefit expenses in profit or loss.
The total amount of expenses recognized for the corporate pension fund that is a multi-employer plan,
which is accounted for in the same manner as defined contribution plans, was ¥191 million in theprevious fiscal year and ¥188 million in the fiscal year under review.
1) Latest funding position of multi-employer plan

Plan assets
Total of actuarial obligations for the purpose ofpension financing calculation and minimum
liability reserve

As of March 31, 2023

As of March 31, 2024

Millions of yen
69,380Millions of yen
68,64152,78650,73016,593

17,910Difference

2) Proportion of contributions by the Group to total contributions of the multi-employer plan
As of March 31, 2023

As of March 31, 2024%%

Proportion of contributions by the Group

6.7

87

7.1

21. Provisions and contingent liabilities
Breakdown of and changes in provisions
Provision for productwarranty

Asset retirement
obligations

Total

Millions of yen

Millions of yen

Millions of yen

March 31, 2022
Increase during the period
Interest expense during the period in
discounting
Decrease during the period (intended use)
Decrease during the period (reversal)

1,669
1,808

14
–

1,684
1,808

–

0

0

–
–

–
–

–
–

March 31, 2023
Increase during the period
Interest expense during the period in
discounting
Decrease during the period (intended use)
Decrease during the period (reversal)

3,478
4,902

14
–

3,493
4,902

–

0

0

–
–

–
–

–
–

March 31, 2024

8,380

14

8,395

Current
Non-current

8,380
–

–
14

8,380
14

(1) Provision for product warranty
The amount expected to occur has been recorded as a provision in order to prepare for future repair
expenses for some products delivered by the Company.
(2) Asset retirement obligations
To prepare for removal of toxic substances related to buildings, the Group recognizes and measures theprovision by estimating asset retirement obligations based on the period in which the building is
expected to be used in light of useful lives of fixtures inside the building and other factors, taking into
account the status of each property individually and specifically. The payment is made in a period after
one year or more passed from the end of each fiscal year.
(3) Significant accounting estimates and assumptions related to provision for product warranty
1) The amount recorded in the consolidated financial statements for the fiscal year ended March 31, 2024
Fiscal year ended
March 31, 2023
Provision for product warranty(Millions of yen)
Fiscal year ended
March 31, 2024

3,478

8,380

2) Information for understanding the details of accounting estimates(i) Calculation method
Repair expenses for defects in some products delivered to certain customers in the United States havebeen recorded based on currently available information and the judgment that said information isreasonable and based on fact.
(ii) Major assumption
The provision for product warranty pertaining to this defect countermeasure is calculated bymultiplying (1) number of cases by (2) per unit repair cost. It is an estimated amount based on
currently available information.

88

(iii) Impact on the consolidated financial statements for the next fiscal year and contingent liabilities
Provisions are recorded based on the best estimate of expenditures required to settle the obligation,
taking into account the risks and uncertainties associated with the obligation at the balance sheet date.
The amount of expenditures required to settle obligations is calculated by comprehensively taking
into account possible future outcomes. However, it may be affected by the occurrence of unforeseen
events or changes in circumstances. If the actual amount of payment differs from the estimate, it may
have a significant impact on the amount recognized in the consolidated financial statements for the
next fiscal year or later.
22. Equity and other equity items(1) Issued capital
Breakdown of changes in number of shares authorized, number of shares issued and issued capital
Number of sharesauthorized

Number of sharesissuedIssued capitalMillions of yen

SharesShares

As of April 1, 2022
Change during the period

90,000,000–

52,644,030
–

4,175
–

As of March 31, 2023
Change during the period

90,000,000–

52,644,030
–

4,175
–

As of March 31, 2024

90,000,000

52,644,030

4,175

Note: All shares issued by the Company are ordinary shares with no rights limitations and without par value. Issued sharesare fully paid up.

(2) Retained earnings
Retained earnings consist of earned reserve and unappropriated retained surplus. Retained earnings
include the amount of remeasurements of defined benefit plans recognized in other comprehensive
income when the amount arose and immediately transferred to retained earnings, and cumulative
exchange differences of foreign operations as of the date of transition to IFRS.
(3) Treasury shares
Changes in the number and the amount of treasury shares are as follows:
Number of shares

AmountSharesMillions of yen

As of April 1, 2022
Change during the period

2,941,879(25,515)

4,764
(41)

As of March 31, 2023
Change during the period

2,916,364(18,067)

4,723
(29)

As of March 31, 2024

2,898,297

4,694

Note: Changes during the previous fiscal year are due to the disposal of 25,551 treasury shares for the restricted share-based
remuneration plan and purchase of shares less than one unit of 36 shares.
Changes during the fiscal year under review are due to the disposal of 18,287 treasury shares for the restricted sharebased remuneration plan and purchase of shares less than one unit of 220 shares.

89

(4) Dividends• Cash dividends paid
Fiscal year ended March 31, 2023
Resolution date

Total amount ofdividends

Dividends per share

Millions of yen

Yen

May 11, 2022
Board of Directors
meetingNovember 4, 2022
Board of Directors
meeting

Record date

Effective date

1,292

26.00

March 31, 2022

June 22, 2022

1,292

26.00

September 30, 2022

November 28, 2022

Total amount ofdividends

Dividends per share

Record date

Effective dateMillions of yen

Yen

Fiscal year ended March 31, 2024
Resolution date
May 12, 2023
Board of Directors
meetingNovember 2, 2023
Board of Directors
meeting

1,491

30.00

March 31, 2023

June 21, 2023

1,492

30.00

September 30, 2023

November 27, 2023

• Dividends for which record date is in the current fiscal year with effective date in the following fiscal
year
Fiscal year ended March 31, 2023
Resolution date

Total amount ofdividends

Dividends per share

Millions of yen

Yen

May 12, 2023
Board of Directors
meeting

1,491

30.00

Total amount ofdividends

Dividends per share

Millions of yen

Yen

Record date

Effective date

March 31, 2023

June 21, 2023

Record date

Effective date

March 31, 2024

June 19, 2024

Fiscal year ended March 31, 2024
Resolution date
May 10, 2024
Board of Directors
meeting

2,188

44.00

90

23. Selling, general and administrative expenses
Breakdown of selling, general and administrative expenses
Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2024

Millions of yen

Millions of yen

Packing and shipping expenses
Personnel expenses
Depreciation and amortization expense
Research and development expense
Provision for product warranty
Other
Total

2,399
5,794
571
5,572
1,486
5,844

1,965
6,162
656
7,176
4,242
6,309

21,66926,511

24. Other income and expense(1) Breakdown of other income
Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2024

Millions of yen

Millions of yen

Gain on sales of non-current assets
Grant income
Other
Total

68
7
1,049

94
41
604

1,125

740

(2) Breakdown of other expense
Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2024

Millions of yen

Millions of yen

Loss on sales and retirement of non-current
assetsImpairment loss
Other
Total

81

234

315
149

735
208

546

1,178

Note: 1. Refer to the note “13. Impairment loss” for impairment loss.

25. Finance income and finance costs(1) Breakdown of finance income
Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2024

Millions of yen

Millions of yen

Interest income
Cash and cash equivalents, financial assets
measured at amortized cost
Dividend income
Financial assets measured at fair value
through other comprehensive income
Foreign exchange gains
Gain on valuation of financial instruments
Financial assets measured at fair value
through profit or loss
Other
Total

91

651

1,593

329

398

839

1,894

–

124

–

87

1,820

4,097

(2) Breakdown of finance costs
Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2024

Millions of yen

Millions of yen

Interest cost
Borrowings
Lease liabilities
Loss on valuation of financial instruments
Financial assets measured at fair value
through profit or loss
Total

17
7

10
12

49

–

74

22

26. Other comprehensive income
Amount arising during year, reclassification adjustments to profit or loss and tax effects for eachcomponent of other comprehensive income
Fiscal year ended March 31, 2023
Amountarising

Reclassification
adjustments

Before tax
effects

Tax effects

Net of tax
effects

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Millions of yen

554

–

554

(143)

411

421

–

421

(117)

304

976

–

976

(260)

715

5,782

–

5,782

–

5,782

(0)

–

(0)

–

(0)

Total

5,781

–

5,781

–

5,781

Total

6,758

–

6,758

(260)

6,497

Components that will not bereclassified to profit or loss
Remeasurements of defined benefit
plans
Changes in the fair value offinancial assets measured at fairvalue through other comprehensive
incomeTotal
Components that may be reclassified
to profit or loss
Exchange differences of foreign
operations
Share of other comprehensive
income of associates accounted forusing equity method

92

Fiscal year ended March 31, 2024
Amountarising

Reclassification
adjustments

Before tax
effects

Tax effects

Net of tax
effects

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Millions of yen

811

–

811

(213)

598

4,955

–

4,955

(1,467)

3,488

5,767

–

5,767

(1,680)

4,086

12,251–

12,251–

12,251

(15)

–

(15)

–

(15)

Components that will not bereclassified to profit or loss
Remeasurements of defined benefit
plans
Changes in the fair value offinancial assets measured at fairvalue through other comprehensive
incomeTotal
Components that may be reclassified
to profit or loss
Exchange differences of foreign
operations
Share of other comprehensive
income of associates accounted forusing equity method
Total

12,236–

12,236–

12,236

Total

18,003–18,003(1,680)16,322

27. Earnings per share
Basis of calculating basic earnings per share attributable to ordinary equity holders
Fiscal year ended
March 31, 2023
Profit attributable to ordinary equity holders ofparent (Millions of yen)
Weighted-average number of ordinary shares(Thousands of shares)
Basic earnings per share (Yen)

Fiscal year ended
March 31, 2024
9,566

12,231

49,71949,740192.41245.91

Note: Information on diluted earnings per share is omitted due to an absence of potential shares.

28. Share-based remuneration(1) Description of plan
The Company has adopted a restricted share-based remuneration plan to reflect the Group’s businessenvironment and short-, medium- and long-term performance, provide an incentive for ongoing
improvement of corporate value, and promote the further sharing of value with shareholders. Under thisplan, the Company’s Directors (excluding those who are Audit and Supervisory Committee Members;hereinafter referred to as “Eligible Directors”) are paid monetary remuneration claims for the grantingof restricted shares. All of these claims are paid in as property contributed in kind to receive ordinary
shares of the Company that are issued or disposed of by the Company. Eligible Directors may nottransfer, create a security interest on, or otherwise dispose of (collectively “Transfer Restrictions”) the
ordinary shares of the Company allotted under the restricted share allotment agreement (the “Allotment
Agreement”) for the period from the date the allotted shares are granted to the date that said Eligible
Director resigns or retires as a Director of the Company or any other such position stipulated by theCompany’s Board of Directors (the “Restriction Period”). The Transfer Restrictions are lifted on all
allotted shares at the end of the Restriction Period on the condition that the Eligible Director remainedin his or her position throughout the Restriction Period. In addition, if there is a breach of laws andregulations or any other reason specified by the Board of Directors of the Company during the
Restriction Period, the Company will acquire all of the allotted shares free of charge.
93

In addition to the Eligible Directors, the Company has also adopted a similar restricted share-based
remuneration plan for Managing Officers of the Company.
(2) Number of shares granted during period and fair value thereof
Fiscal year ended
March 31, 2023
Vesting date
Number of shares
Fair value on vesting date (Yen)

Fiscal year ended
March 31, 2024

July 20, 2022
25,551
1,323

July 19, 2023
18,287
1,792

Note: The fair value on the vesting date is calculated based on the market value of the Company’s stock.

(3) Expense related to share-based remuneration
The expense related to share-based remuneration was ¥30 million in the previous fiscal year and ¥33
million in the fiscal year under review and is included under “selling, general and administrative
expenses” in the consolidated statement of income.
29. Financial instruments(1) Capital management
The Group’s basic policy for capital risk management is to build and maintain the stable financial basein order to firmly maintain soundness and efficiency of the management and achieve sustainable growth.
In line with this policy, the Group returns profits to shareholders through investments in effect,
dividends and other means based on operating cash flows.
(2) Classification of financial assets and financial liabilities
As of March 31, 2023

As of March 31, 2024

Millions of yen

Millions of yen

Financial assets
Financial assets measured at fair value
through profit or loss
Other financial assets
Investments in limited liability
investment partnerships
Financial assets measured at fair value
through other comprehensive income
Other financial assets
Shares of subsidiaries and associates
Investment securities
Investments in capital
Financial assets measured at amortized cost
Trade and other receivables
Other financial assets
Time deposits
Bonds
Long-term deposits
Loans
Other
Cash and cash equivalents
Total financial assets

94

785

756

6,676
3,507
4

10,8444,733
438,73940,198

4,759
1,031
648
357
526
53,738

4,672
–
648
297
778
82,028110,777

144,962

As of March 31, 2023

As of March 31, 2024

Millions of yen

Millions of yen

Financial liabilities
Financial liabilities measured at amortized
cost
Trade and other payables
Borrowings
Other financial liabilities
Lease liabilities

18,204
6,100

Total financial liabilities

20,184
6,100

1,410

1,558

25,71527,843(3) Financial risk management
The Group is exposed to financial risks (credit risks, liquidity risks and market risks) in the course ofbusiness activities. In order to avoid or mitigate these risks, the Group conducts risk management undercertain policies. As its policy, the Group does not conduct derivative transactions for speculative
purposes.
1) Credit risk management
Credit risks are risks that result in financial losses incurred by the Group when a customer becomesin default for contractual obligations.
Most clutch products manufactured and sold by the Group are for the automobile and motorcycle
industries.
The certain customer group accounts for a large percentage of the Group’s revenue.
The credit risks on trade receivables from the customer group are always measured at an amountequal to lifetime expected credit losses. The Group considers significant increase in credit risk,
financial circumstances of debtors at year-end, history of recorded losses from past bad debts, andinformation on past overdue payments, etc. The Group classifies financial assets of “Debtors notexperiencing significant issues in operating conditions” and financial assets of “Debtors
experiencing significant issues in payment of their debt.” With respect to each of those categories,
the Group estimates the expected credit losses and records the allowance for doubtful accounts.
“Debtors not experiencing significant issues in operating conditions” are debtors that do not show
any indication of issues in payment of their debt or do not have issues in their ability to pay theirdebt. The allowance for doubtful accounts for the credit of the applicable debtors is recorded
collectively using a ratio taking into account future circumstances and the past bad debt rate.
“Debtors experiencing significant issues in payment of their debt” are debtors that are experiencing
significant issues in payment of their debt or show a high likelihood of experiencing such issues.
The allowance for doubtful accounts for the credit of the applicable debtors is recorded based on
the individually estimated recoveries related to the applicable assets.

95

Information about trade receivables
The carrying amounts of the allowance for doubtful accounts related to trade receivables past due
and credit are as follows.
Trade receivables past due
As of March 31, 2023
(Millions of yen)

Debtors not experiencing
significant issues inoperating conditions

Debtors experiencing
significant issues inoperating conditions

Balance at beginning of period

190

–

190

Balance at end of period

132

–

132

Debtors not experiencing
significant issues inoperating conditions

Debtors experiencing
significant issues inoperating conditions

Balance at beginning of period

132

–

132

Balance at end of period

127

–

127

Debtors not experiencing
significant issues inoperating conditions

Debtors experiencing
significant issues inoperating conditions

Balance at beginning of period

9

–

9

Increase in the period

–

–

–

Decrease in the period

(1)

–

(1)

Other

0

–

0

Balance at end of period

8

–

8

Total

As of March 31, 2024
(Millions of yen)

Total

Allowance for doubtful accounts
As of March 31, 2023
(Millions of yen)

96

Total

As of March 31, 2024
(Millions of yen)

Debtors not experiencing
significant issues inoperating conditions

Debtors experiencing
significant issues inoperating conditions

Balance at beginning of period

8

–

8

Increase in the period

0

–

0

Decrease in the period

(0)

–

(0)

Other

0

–

0

Balance at end of period

8

–

8

Total

2) Liquidity risk management
Liquidity risks are risks of failure to make payments on the due date in situations when the Groupis required to fulfill its repayment obligations for financial liabilities due. The Group manages
liquidity risks by securing credit lines available at any time in financial institutions and continuously
monitoring a cash flow plan and actual performance while raising appropriate funds for repayment.

97

Breakdown of the balances of financial liabilities by due date
As of March 31, 2023

Trade and otherpayablesBorrowings
Lease liabilities
Total

Carrying
amountContractual
amountDue within
one year

Due after
one yearwithintwo years

Due after
two years
withinthree years

Due after
three years
withinfour years

Due after
four years
withinfive years

Due after
five years

Millions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyen

18,204

18,204

18,204

–

–

–

–

–

6,100
1,410

6,100
1,449

6,100
324

–
278

–
160

–
136

–
118

–
432

25,71525,755

24,629

278

160

136

118

432

Carrying
amountContractual
amountDue within
one year

Due after
one yearwithintwo years

Due after
two years
withinthree years

Due after
three years
withinfour years

Due after
four years
withinfive years

Due after
five years

Millions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyenMillions ofyen

20,184

20,184

20,184

–

–

–

–

–

6,100
1,558

6,101
1,589

6,101
461

–
332

–
168

–
145

–
113

–
367

27,84327,87526,747

332

168

145

113

367

As of March 31, 2024

Trade and otherpayablesBorrowings
Lease liabilities
Total3) Market risk management(i) Exchange risks
Because the Group has business operations on a global basis, it is exposed to risks that transactions
denominated in currencies other than its functional currency may affect profit or loss and cash
flows and risks that equity and profit or loss may be affected when equity and profit or loss
denominated in currencies other than its functional currency are translated into the functional
currency, both due to currency fluctuations. The Group strives to mitigate these risks due tocurrency fluctuations by monitoring currency fluctuations.
• Sensitivity analysis of foreign exchange
For financial instruments held by the Group as of the reporting date, the impact of a 1%
depreciation of Japanese yen against US dollars and renminbi on profit before income taxes in
the consolidated statement of income is as follows.
The effects of translation of financial instruments denominated in the functional currency, assets
and liabilities and revenue and expenses of foreign operations into yen are not included. This
analysis is based on the assumption that other variable factors are constant.
Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2024

Millions of yen

Millions of yen

US dollar
RMB

79
6

160
3

(ii) Price fluctuation risks
Although the Group is exposed to risks of fluctuations in share prices, which arise from equity
financial instruments (shares), these instruments are shares in companies with which the Grouphas business relationships and the Group grasps information on market prices of the sharesquarterly.
• Sensitivity analysis on market prices
98The impact of a 10% fluctuation in market prices of equity financial instruments held by theGroup as of the end of fiscal year on other comprehensive income (before tax effects) was ¥836
million in the previous fiscal year and ¥1,347 million in the fiscal year under review.
This analysis is based on the assumption that other variable factors are constant.
(iii) Interest rate risks
Since borrowings are raised with fixed interest rates and interest rate risks are consideredinsignificant to the Group, the sensitive analysis of interest rates has not been performed.
(4) Equity financial instruments measured at fair value through other comprehensive income
The Group holds shares in listed companies with which it has business relationships. In light of the
purpose of holding to maintain and strengthen business relationships, those equity financial instruments
are designated as financial assets measured at fair value through other comprehensive income.
1) Major financial instruments and their fair value
Major financial instruments and their fair value are as follows:
As of March 31, 2023

As of March 31, 2024

Millions of yen

Millions of yen

Honda Motor Co., Ltd.
KANEMATSU CORPORATIONSUZUKI MOTOR CORPORATION
Mizuho Financial Group, Inc.
Kawasaki Heavy Industries, Ltd.
Sumitomo Mitsui Financial Group, Inc.

6,676
1,215
252
99
49
30

10,844
1,918
365
162
93
51

2) Derecognized equity financial instruments measured at fair value through other comprehensive
incomeDuring the period, the Company derecognized equity financial instruments measured at fair value
through other comprehensive income. The fair value and cumulative gain or loss at the date ofderecognition of those equity financial instruments measured at fair value through othercomprehensive income are as follows:
Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2024

Millions of yen

Fair value at the date of derecognition
Cumulative gain (loss) on disposal

Millions of yen

2
1

–
–

Notes: 1. Primarily with the purpose of reviewing business relationships, a portion of those equity financial instruments
measured at fair value through other comprehensive income was derecognized due to sale.
2. When equity financial instruments measured at fair value through other comprehensive income are derecognized,
the cumulative gain or loss of other comprehensive income is transferred to retained earnings.

993) Dividend income
The breakdown of dividend income recognized from those equity financial instruments measured
at fair value through other comprehensive income is as follows:
Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2024

Millions of yen

Millions of yen

Equity financial instruments derecognized
during the period
Equity financial instruments held at the end of
the period
Total

–

–

329

398

329

398

(5) Fair value of financial instruments
1) Fair value hierarchy
Fair value is defined as the price that would be received on the sale of an asset or paid to transfer aliability in an ordinary transaction between market participants on the measurement date. The fairvalue hierarchy of financial instruments is categorized as follows:
Level 1:

Fair value measured at the quoted price in active markets

Level 2:

Fair value, other than Level 1, that is determined by directly or indirectly using theobservable price

Level 3:

Fair value that is determined using a valuation technique including unobservable inputs

When multiple inputs are used for fair value measurement, the level of the fair value is determinedbased on the lowest level of significant input in the entire measurement of the fair value.
Transfers between levels of the fair value hierarchy are recognized as if they had occurred at the
beginning of each quarter.
For financial instruments classified as Level 3, the valuer determines the valuation method andmeasures the fair value of the financial instrument in accordance with the valuation policies andprocedures for fair value measurement established by the Group.
In addition, the results of fair value measurements are approved by the appropriate person withresponsibility.
2) Method of fair value measurement
Financial assets and liabilities measured at fair value through profit or loss
The fair value of investment in limited liability investment partnerships and partnerships of a similar
nature is measured using a valuation model based on net assets.
Financial assets measured at amortized cost
The carrying amounts of trade and other receivables and cash and cash equivalents reasonably
approximate the fair values, since the period to maturity is short.
Other financial assets are measured by the discounted cash flow method or other appropriate valuation
methods.
Financial assets measured at fair value through other comprehensive income
The fair values of listed shares are measured based on market prices at the end of the fiscal year. The
fair values of unlisted shares are principally measured by valuation techniques based on net asset value.
Financial liabilities measured at amortized cost
The carrying amounts of borrowings (current) approximate the fair values since they are settled in ashort period of time. Therefore, their fair values are determined based on their carrying amounts.

100

For borrowings (non-current), fair values are calculated by discounting expected future cash flows to
the present value based on the assumed interest rate for executing similar, new borrowings.
3) Financial instruments measured at fair value on a recurring basis
Classification of financial instruments measured at fair value on a recurring basis based on the fairvalue hierarchy is as follows:
As of March 31, 2023

Financial assets
Financial assets measured
at fair value through profit
or loss
Other (investments inlimited liability
investment
partnerships)
Financial assets measured
at fair value through othercomprehensive income
Listed shares
Unlisted shares
Other (investments incapital)
Total

Level 1

Level 2

Level 3

Total

Millions of yen

Millions of yen

Millions of yen

Millions of yen

–

–

785

785

8,360
–

–
–

–
1,823

8,360
1,823

–

–

4

4

8,360

–

2,613

10,974As of March 31, 2024

Financial assets
Financial assets measured
at fair value through profit
or loss
Other (investments inlimited liability
investment
partnerships)
Financial assets measured
at fair value through othercomprehensive income
Listed shares
Unlisted shares
Other (investments incapital)
Total

Level 1

Level 2

Level 3

Total

Millions of yen

Millions of yen

Millions of yen

Millions of yen

–

–

756

756

13,476
–

–
–

–
2,100

13,476
2,100

–

–

4

4

13,476–

2,861

16,338

Note: No transfers between Level 1, Level 2 and Level 3 were made in the fiscal year under review and the previous fiscal
year.

101

4) The adjustment table for the beginning balance to the ending balance of the fair value measurement
categorized as Level 3 is as follows:
Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2024

Millions of yen

Millions of yen

Balance at beginning of period
Acquisition
Distribution
Sale
Total gains and losses
Other comprehensive income
Profit or loss

1,966
703
(88)
0

2,613
420
(179)
–

82
(49)

(117)
124

Balance at end of period

2,613

2,861

Notes: 1. Gains and losses included in other comprehensive income relate to shares, etc. held as of the reporting date that were
not traded at a market. These gains and losses are included in “changes in the fair value of financial assets measured
at fair value through other comprehensive income” and “exchange differences of foreign operations” in the
consolidated statement of comprehensive income.
2. Gains and losses included in profit or loss relate to investment in limited liability investment partnerships, etc. held
as of the reporting date. These gains and losses are included in “finance income” and “finance costs” in the
consolidated statement of income.
3. Financial assets categorized as Level 3 are comprised mainly of unlisted shares (financial assets measured at fairvalue through other comprehensive income) and investment in limited liability investment partnerships, etc.
(financial assets measured at fair value through profit or loss).

5) Carrying amount and fair value of financial instruments
Most of the financial assets measured at amortized cost held by the Company are “trade and otherreceivables” and “borrowings (current).” As they are settled in a short period of time and their fairvalues are approximately equal to their carrying amounts, disclosure on comparison of the fair values
and carrying amounts has been omitted.

102

30. Important subsidiaries
Status of important subsidiaries at the end of the fiscal year under review
Name

Location

Principal contents ofbusiness
Motorcycles business
Automobiles business
Motorcycles business
Automobiles business
Motorcycles business
Automobiles business
Administration ofsubsidiaries in theU.S.

KYUSHU F.C.C. CO., LTD.

JapanTENRYU SANGYO CO., LTD.

Japan

FLINT CO., LTD.

Japan

FCC (North America), INC.

U.S.

FCC (INDIANA), LLC

U.S.

Automobiles business

FCC (North Carolina), LLC

U.S.

Motorcycles business
Automobiles business

FCC (Adams), LLC

U.S.

Automobiles business

FCC AUTOMOTIVE PARTS DE MEXICO, S.A. DE
C.V.

MexicoAutomobiles business

FCC (THAILAND) CO., LTD.

ThailandFCC (PHILIPPINES) CORP.

Philippines

F.C.C. (CHINA) INVESTMENT CO., LTD.

China

CHENGDU YONGHUA. F.C.C. CLUTCHES CO.,LTD.
CHU’S F.C.C. (SHANGHAI) CO., LTD.

China

Motorcycles business
Automobiles business
Motorcycles business
Automobiles business
Administration ofsubsidiaries in China
Motorcycles business
Automobiles business
Motorcycles business

CHINA FCC FOSHAN CO., LTD.

China

Automobiles business

FCC (TAIWAN) CO., LTD.

TaiwanMotorcycles business

FCC CLUTCH INDIA PRIVATE LIMITED

India

PT. FCC INDONESIA

Indonesia

FCC (VIETNAM) CO., LTD.

Vietnam

FCC DO BRASIL LTDA.

BrazilChina

Motorcycles business
Automobiles business
Motorcycles business
Automobiles business
Motorcycles business
Automobiles business
Motorcycles business
Automobiles business

Ratio of voting rights
holding (%)
100
80.22
100
100
100
[100]
100
[100]
100
[100]
100
[45.30]100[0.07]
100
100
100[82.22]100
100[61.43]
70
[15]
100
100
[0.55]
100
100

Note: The figures in brackets in the “Ratio of voting rights holding” column are indirect holding ratio included in the figuresoutside the brackets.

10331. Related parties(1) Related party transactions
Fiscal year ended March 31, 2023
Type
Other affiliate
Note:

Name
Honda Motor Co., Ltd.

Description of relationship with therelated party
Sale of the Company’s products

Transaction
amountUnsettledamountMillions of yen

Millions of yen

9,914

1,529

The method for determining the sales price is to create a quotation considering the economically rational market
price and the Company’s production technology, etc. with determination made by negotiation of the price following
submission of the quotation.

Fiscal year ended March 31, 2024
Type
Other affiliate
Note:

Name
Honda Motor Co., Ltd.

Description of relationship with therelated party
Sale of the Company’s products

Transaction
amountUnsettledamountMillions of yen

Millions of yen

11,054

1,504

The method for determining the sales price is to create a quotation considering the economically rational market
price and the Company’s production technology, etc. with determination made by negotiation of the price following
submission of the quotation.

(2) Remuneration for key management personnel
Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2024

Millions of yen

Millions of yen

Remuneration and bonuses
Share-based remuneration

163
18

201
25

Total

181

226

Note: For the basic policy, etc. for remuneration of key management personnel, refer to “A. Company information, IV.
Information about reporting company, 4. Status of corporate governance, etc., (4) Remuneration, etc. for officers.”

32. Commitments
Breakdown of commitments related to expenditures at and after the end of the fiscal year
As of March 31, 2023

As of March 31, 2024

Millions of yen

Millions of yen

Property, plant and equipment and intangible
assets

1,258

1,118

33. Subsequent events
Acquisition and cancellation of treasury shares
At the meeting of the Board of Directors held on May 10, 2024, the Company approved a resolution onmatters related to the acquisition of treasury shares pursuant to the provisions of Article 459, Paragraph
1 of Japan’s Companies Act and the Company’s Articles of Incorporation. A resolution on matters related
to the cancellation of treasury shares pursuant to the provisions of Article 178 of the Companies Act wasalso approved.
(1) Reasons for acquisition and cancellation of treasury shares
To improve capital efficiency and execute a flexible capital policy104(2) Details of matters related to acquisition
Class of shares to be acquired

Ordinary shares of the Company

Total number of shares to be acquired

650,000 (upper limit)(Ratio to the total number of outstanding shares(excluding treasury shares): 1.3%)

Total acquisition cost

¥1,300,000,000 (upper limit)

Period of acquisition

From May 13, 2024 to July 12, 2024

Method of acquisition

Market purchase on the Tokyo Stock Exchange

Date of acquisition

From May 13, 2024 to June 14, 2024

Other

As a result of the acquisition described above, 587,500
of the Company’s common shares were acquired for a
total acquisition cost of ¥1,299,851,100.

(3) Details of matters related to cancellation
Class of shares to be cancelled

Ordinary shares

Total number of shares to be cancelled

All treasury shares acquired as described in (2) above

Scheduled date of cancellation

July 19, 2024

Opinion of independent auditors
Auditors: Yasumori Audit Corporation
Opinion: unqualified

105

2. Non-consolidated financial statements, etc.
(1) Non-consolidated financial statements
1) Non-consolidated balance sheet(Millions of yen)

AssetsCurrent assets
Cash and deposits
Notes receivable - trade
Electronically recorded monetary claims operating
Accounts receivable - trade
Securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Prepaid expenses
Short-term loans receivable from subsidiaries andassociates
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
Construction in progress
Total property, plant and equipment
Intangible assets
Patent right
Software
Software in progress
Total intangible assets
Investments and other assets
Investment securities
Shares of subsidiaries and associates
Bonds of subsidiaries and associates
Investments in capital
Investments in capital of subsidiaries andassociates
Long-term loans to employees
Long-term loans receivable from subsidiaries
and associates
Long-term prepaid expenses
Prepaid pension expenses
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

106

As of March 31, 2023

As of March 31, 2024

9,792
7

19,181
–

804

960

7,403
1,031
951
946
2,640
45

7,675
–
825
827
2,644
55

4,807

4,985

2,136
(2)
30,5652,358(2)39,513

4,492
244
3,817
24
823
4,908
596
14,906

5,540
272
3,322
23
643
4,908
400
15,111

81
169
5
256

67
182
7
258

3,149
24,723
5,846
4

4,421
29,953
5,846
4

3,069

3,069

90

84

2,670

1,967

2
142
153
690
(1,509)39,03454,19784,762

31
216
–
689
(1,509)44,77560,14599,659(Millions of yen)

Liabilities
Current liabilities
Notes payable - trade
Accounts payable - trade
Short-term borrowings
Accounts payable - other
Electronically recorded obligations - operating
Accrued expense
Income taxes payable
Advances received
Deposits received
Provision for bonuses
Provision for officer bonuses
Provision for product warranty
Other
Total current liabilities
Non-current liabilities
Deferred tax liabilities
Asset retirement obligations
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Issued capital
Capital surplus
Legal capital surplus
Other capital surplus
Total capital surpluses
Retained earnings
Legal retained earnings
Other retained earnings
Reserve for dividends
Reserve for advanced depreciation of noncurrent assets
Reserve for open innovation promotion tax
systemGeneral reserve
Retained earnings brought forward
Total retained earnings
Treasury shares
Total shareholders’ equity
Valuation and translation adjustments
Valuation difference on available-for-salesecurities
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

107

As of March 31, 2023

As of March 31, 2024

1
2,633
6,100
548
907
447
81
15
61
1,259
13
3,478
48
15,598

–
3,171
6,100
385
1,020
529
312
26
139
1,250
28
8,380
44
21,389–14
1415,613

2,532
14
2,547
23,936

4,175

4,175

4,555
2
4,557

4,555
5
4,560

1,043

1,043

1,600

1,600

472

472

124

175

54,5003,310
61,051(4,723)65,06154,5006,416
64,207(4,694)
68,250

4,088

7,472

4,088
69,14984,762

7,472
75,722
99,6592) Non-consolidated statements of income(Millions of yen)
Fiscal year ended
March 31, 2023
Net sales
Cost of sales
Beginning finished goods
Cost of products manufactured
Purchase of finished goods
Total
Ending finished goods
Cost of finished goods sold
Gross profit
Selling, general and administrative expenses
Packing and delivery expenses
Salaries and allowances
Provision for bonuses
Retirement benefit expenses
Depreciation
Provision for product warranty
Research and development expense
Other
Total selling, general and administrative expenses
Operating loss
Non-operating income
Interest income
Interest on capital receivable
Interest on securities
Dividend income
Rental income
Commissions on equipment sales
Foreign exchange gains
Technical advisory fee
Gain on investment partnership management
Other
Total non-operating income
Non-operating expenses
Interest expenses
Rent expenses
Provision of allowance for doubtful accounts
Losses on investment partnership management
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Gain on liquidation of subsidiaries and associates
Grant income
Total extraordinary income
Extraordinary losses
Loss on sales and retirement of non-current assets
Loss on valuation of shares of subsidiaries andassociates
Total extraordinary losses

108

Fiscal year ended
March 31, 2024

38,70541,308853
26,588504
27,947951
26,996
11,709951
26,859565
28,376825
27,55013,758

790
1,721
280
223
62
1,486
6,236
1,906
12,708
(999)

737
1,686
268
206
107
4,242
7,500
2,113
16,862(3,104)

149
162
580
4,655
10
267
239
44
–
86
6,195

431
224
595
9,386
14
107
1,173
33
124
106
12,197

9
3
737
49
0
800
4,395

10
3
–
–
28
42
9,050

12
1
0
–
14

2
–
–
21
23

42

162

547

–

590

162

(Millions of yen)
Fiscal year ended
March 31, 2023
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Profit

3,819
1,007
(371)
635
3,184

109

Fiscal year ended
March 31, 2024
8,911
1,496
1,274
2,771
6,140

3) Non-consolidated statements of changes in shareholders’ equity
Fiscal year ended March 31, 2023
(Millions of yen)
Shareholders’ equity
Capital surplus

Retained earnings
Other retained earnings

IssuedcapitalBalance at beginningof current period
Changes of items
during period
Reversal of reserve
for advanced
depreciation of
non-current assets
Reserve for open
innovation
promotion tax
systemDividends ofsurplus

4,175

Legal
capitalsurplus

OthercapitalsurplusTotal
capitalsurpluses

Legalretainedearnings

4,555

9

4,565

1,043

Reservefordividends

Reserveforadvanceddepreciation of
noncurrent
assetsReservefor
open
innovation
promotion tax
systemGeneralreserve

Retainedearnings
brought
forward

1,600

483

–

54,5002,825

60,452

10

–

(124)

–

(2,585)(2,585)

3,184

3,184

(10)

124

ProfitPurchase oftreasury shares
Disposal oftreasury shares
Net changes of
items other thanshareholders’equityTotal changes of
items during period
Balance at end ofcurrent period

(7)

(7)

Total
retainedearnings

–

–

(7)

(7)

–

–

(10)

124

–

484

599

4,175

4,555

2

4,557

1,043

1,600

472

124

54,5003,310

61,051110

Valuation and translation
adjustments
Valuation
Total
difference
valuation
Total
on
and
shareholders’availabletranslation
equityfor-saleadjustments
securities

Shareholders’ equity

TreasurysharesBalance at beginningof current period
Changes of items
during period
Reversal of reserve
for advanced
depreciation of
non-current assets
Reserve for open
innovation
promotion tax
systemDividends ofsurplus(4,764)

3,854

3,854

68,283––––(2,585)(2,585)

3,184

3,184

(0)

(0)

(0)

41

33

33

ProfitPurchase oftreasury shares
Disposal of treasury
sharesNet changes of
items other thanshareholders’equityTotal changes of
items during period
Balance at end ofcurrent period

64,428

Total net
assets

233

233

233

41

632

233

233

866

(4,723)65,061

4,088

4,088

69,149111

Fiscal year ended March 31, 2024
(Millions of yen)
Shareholders’ equity
Capital surplus

Retained earnings
Other retained earnings

IssuedcapitalBalance at beginningof current period
Changes of items
during period
Reversal of reserve
for advanced
depreciation of
non-current assets
Reserve for open
innovation
promotion tax
systemDividends ofsurplus

4,175

Legal
capitalsurplus

OthercapitalsurplusTotal
capitalsurpluses

Legalretainedearnings

4,555

2

4,557

1,043

Reservefordividends

Reserveforadvanceddepreciation of
noncurrent
assetsReservefor
open
innovation
promotion tax
systemGeneralreserve

Retainedearnings
brought
forward

1,600

472

124

54,5003,310

61,051–

50

ProfitPurchase oftreasury shares
Disposal oftreasury shares
Net changes of
items other thanshareholders’equityTotal changes of
items during period
Balance at end ofcurrent period

Total
retainedearnings

3

3

(50)

–

(2,984)(2,984)

6,140

6,140

–

–

–

3

3

–

–

–

50

–

3,106

3,156

4,175

4,555

5

4,560

1,043

1,600

472

175

54,5006,416

64,207112

Valuation and translation
adjustments
Valuation
Total
difference
valuation
Total
on
and
shareholders’availabletranslation
equityfor-saleadjustments
securities

Shareholders’ equity

TreasurysharesBalance at beginningof current period
Changes of items
during period
Reversal of reserve
for advanced
depreciation of
non-current assets
Reserve for open
innovation
promotion tax
systemDividends ofsurplus(4,723)

4,088

4,088

69,149––––(2,984)(2,984)

6,140

6,140

(0)

(0)

(0)

29

32

32

ProfitPurchase oftreasury shares
Disposal of treasury
sharesNet changes of
items other thanshareholders’equityTotal changes of
items during period
Balance at end ofcurrent period

65,061

Total net
assets

3,383

3,383

3,383

29

3,188

3,383

3,383

6,572

(4,694)

68,250

7,472

7,472

75,722113

[Notes to non-consolidated financial statements]
Significant accounting policies
1. Valuation basis and methods for assets(1) Valuation basis and methods for securities
Shares of subsidiaries and associates
Stated at cost determined by the weighted-average method
Available-for-sale securities (securities classified as other securities under Japanese GAAP)
Items other than stock with no market value
Stated at fair value (unrealized gains and losses, net of applicable taxes, are recognized in a separate
component of net assets, and costs of securities sold are determined by the weighted-average method).
Stock with no market value
Stated at cost determined by the weighted-average method
The Company records investments in limited liability investment partnerships and similar
partnerships (deemed to be securities under the provisions set forth in Article 2, paragraph 2 of the
Financial Instruments and Exchange Act) using the net amount of ownership in such partnerships
computed based on the most recent financial statements available for the report date stipulated in thepartnership agreement.
(2) Valuation basis and methods for inventories
Finished goods and work in process
Stated at cost determined by the weighted-average method (the carrying amounts in the nonconsolidated balance sheet are calculated by the method in which carrying amounts are written down
due to a decline in profitability of assets).
Raw materials and supplies
Stated at cost determined by the first-in, first-out method (the carrying amounts in the nonconsolidated balance sheet are calculated by the method in which carrying amounts are written down
due to a decline in profitability of assets).
2. Depreciation methods for non-current assets(1) Property, plant and equipment
The straight-line method is applied.
Major useful lives are as follows:
Buildings

10 to 38 years

Machinery and equipment

9 years(2) Intangible assets
The straight-line method is applied.
For software for internal use, the straight-line method based on the estimated usable period (five years)
in the Company is applied.
3. Recognition of reserves(1) Allowance for doubtful accounts
To cover losses from bad debts for trade receivables, loans, etc., allowance for doubtful accounts isprovided in the amount expected to be uncollectible based on historical experience of bad debts forgeneral receivables and individual collectability for specific receivables such as doubtful receivables.
114

(2) Provision for bonuses
To prepare for bonus payments to employees, provision for bonuses is provided based on the estimatedamount of payments.
(3) Provision for officer bonuses
To prepare for bonus payments to officers, provision for bonuses is provided based on the estimatedamount of payments.
(4) Provision for retirement benefits
To prepare for payment of retirement benefits to employees, provision for retirement benefits isprovided based on the estimated amounts of retirement benefit obligations and plan assets at the end of
the fiscal year under review.
1) Method of attributing expected retirement benefits to periods
In calculation of retirement benefit obligations, the benefit formula basis is applied to attributeexpected retirement benefits to periods up to the end of the fiscal year under review.
2) Amortization of actuarial gains or losses and past service cost
Past service cost is amortized on a straight-line basis from the fiscal year in which the cost occurred
over a period equal to or less than the average remaining service period of eligible employees (fiveyears) at the time of occurrence.
Actuarial gains or losses are amortized by the declining-balance method from the fiscal year inwhich the gains or losses occurred over a period equal to or less than the average remaining service
period of eligible employees (mainly 14 years) at the time of occurrence in each fiscal year.
(5) Provision for product warranty
The amount expected to occur has been recorded as a provision in order to prepare for future repair
expenses for some products delivered by the Company.
4. Criteria for recording revenue and expenses
The Company recognizes revenues based on the following five-step approach:
Step 1: Identify the contract(s) with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when the entity satisfies a performance obligation
The Company is principally engaged in the motorcycles business, the automobiles business, and the nonmobility business. With regard to the sales of these products, the Company recognizes revenue at the timeof delivery of a product since it considers that the customer obtains control over the product andperformance obligations are satisfied at the time of delivery of the product. Revenue is measured at theamount of consideration promised in contracts with customers less discounts, etc.

115Significant accounting estimates
1. Recoverability of deferred tax assets(1) The amount recorded in the non-consolidated financial statement for the fiscal year under review
Fiscal year ended
March 31, 2023

(Millions of yen)
Fiscal year ended
March 31, 2024

Deferred tax assets

153–

Deferred tax liabilities

–

2,532

(2) Information for understanding the details of accounting estimates
This description is omitted because the relevant information is described in “15. Income taxes.”
2. Recording of provision for product warranties(1) The amount recorded in the non-consolidated financial statement for the fiscal year under review
Fiscal year ended
March 31, 2023

(Millions of yen)
Fiscal year ended
March 31, 2024

3,478

8,380

Provision for product warranty(2) Information for understanding the details of accounting estimates
This description is omitted because the relevant information is described in “21. Provisions andcontingent liabilities.”
3. Valuation of loans to and investments in subsidiaries and associates(1) The amount recorded in the non-consolidated financial statement for the fiscal year under review
Fiscal year ended
March 31, 2023

(Millions of yen)
Fiscal year ended
March 31, 2024

Short-term loans receivable fromsubsidiaries and associates

4,807

4,985

Long-term loans receivable fromsubsidiaries and associates

2,670

1,967

Allowance for doubtful accounts
related to aforementioned loans

1,484

1,484

Short-term loans receivable from subsidiaries and associates attributable to consolidated subsidiary
FCC AUTOMOTIVE PARTS DE MEXICO, S.A. DE C.V. were ¥1,513 million, and long-term loans
receivable from subsidiaries and allowance for doubtful accounts were wholly attributable to thissubsidiary.
(2) Information for understanding the details of accounting estimates
1) Calculation method
Valuation of loans to subsidiaries and associates is conducted individually based on the businessplans and recovery plans of such subsidiaries and associates to examine recoverability. In addition,
the entire amount of the difference between the present value, calculated by applying a certain
discount rate based on the recovery plan in light of the estimated future cash flows and cash
positions, etc. from such borrowers’ future business plans, and the carrying amount, in addition to
the scheduled recovery amount for the term beyond the production plan indicated by the customer,
is recorded as allowance for doubtful accounts as a type of suspended claim.

1162) Major assumption
Valuation of loans to subsidiaries and associates is based on the future business plans of the target
companies. Based on discrepancies between the plans and actual results to date, we examine therecoverability of loans to subsidiaries and associates based on certain revised figures in the futurebusiness plans. Future business plans are prepared based on key assumptions regarding sales
volume forecasts based on customers’ unofficial production plans, the impact of material priceincreases, and future plans for personnel and capital investment. Important assumptions are also
used in determining the discount rate to be used in calculating the amount expected to beuncollectible.
3) Impact on the non-consolidated financial statements for the next fiscal year
We carry out valuation of loans to subsidiaries and associates based on the currently anticipatedforecast improvements, but the acquisition of future cash flows could be substantially affected by
future changes in economic conditions and the business environment, which could have a major
impact on the recoverability of loans to subsidiaries and associates and the amount recorded forallowance for doubtful accounts on the non-consolidated financial statements for the next fiscal
year.
Accounting standards, etc. that have not yet been applied• Accounting Standard for Current Income Taxes (ASBJ Statement No. 27, October 28, 2022)• Accounting Standard for Presentation of Comprehensive Income (ASBJ Statement No. 25, October 28,
2022)• Guidance on Accounting Standard for Tax Effect Accounting (ASBJ Guidance No. 28, October 28,
2022)(1) Overview
These accounting standards and guidance establish the accounting classification for corporate taxes
when other comprehensive income is subject to taxation, as well as the treatment of tax effects related
to the sale of shares in subsidiaries, etc. when group taxation regime is applied.
(2) Planned date of application
These accounting standards and guidance will be applied from the beginning of the fiscal year ending
March 31, 2025.
(3) Impact of the application of the accounting standards, etc.
The amount of the impact is under evaluation at the time of preparation of the financial statements.

1174) Supplementary statements[Detailed schedule of property, plant and equipment and others](Millions of yen)
Increase in
the period

Decrease in
the period

Depreciation
during theperiodBalance at
end ofcurrent
period

4,492

1,351

13

289

5,540

7,836

244

65

–

37

272

1,367

Machineryandequipment

3,817

788

121

1,161

3,322

21,499Vehicles

24

13

0

14

23

167

Tools,
furniture andfixtures

823

170

10

340

643

5,843

Category

Type of assets

Property,plant andequipment

Buildings
Structures

Balance at
beginning ofcurrent period

Land

Intangible
assetsInvestments
and otherassetsNote:

Accumulated
depreciation

4,908

–

–

–

4,908

–

Constructionin progress

596

1,733

1,930

–

400

–

Total

14,906

4,124

2,076

1,842

15,111

36,715

Patent right

81

0

–

13

67

42

Software

169

87

–

74

182

207

Software in
progress

5

2

–

–

7

–

Total

256

90

–

88

258

249

Long-term
prepaid
expenses

2

36

6

–

31

–

Principal increases and decreases in the period are as follows:
Property, plant and equipment[Increase]
Buildings

Head officeConstruction of building for new
business¥1,219 million

Machinery and equipment

Watagashima Factory

Manufacturing facilities to produce
new models, etc.

¥407 million

Machinery and equipment

R&D Center

Testing apparatus and measuring
instruments¥117 million

Machinery and equipment

Hamakita Factory

Manufacturing facilities to produce
new models, etc.

¥108 million[Detailed schedule of allowances](Millions of yen)
Balance at end ofcurrent period

Balance at beginning ofcurrent period

Increase in the period

Decrease in the period

Allowance for
doubtful accounts

1,511

–

–

1,511

Provision forbonuses

1,259

1,250

1,259

1,250

Provision for officer
bonuses

13

35

19

28

Provision for productwarranty

3,478

4,902

–

8,380

Category118

(2) Components of major assets and liabilities
This information has been omitted as the consolidated financial statements have been prepared.
(3) Other
Not applicable.

Opinion of independent auditors
Auditors: Yasumori Audit Corporation
Opinion: unqualified

119

VI. Overview of operational procedures for shares of the reporting company
Fiscal year

From April 1 to March 31

Ordinary General Meeting of
Shareholders

June

Record date

March 31

Record dates for dividends ofsurplus

September 30
March 31

Number of shares per share unit

100 shares

Purchase of shares less than one
unit
Office for handling business
Shareholder register
administrator
Forwarding officeHandling charge for purchase(Special account)
1-3-3 Marunouchi, Chiyoda-ku, Tokyo
Securities Agent Department, Head Office, Mizuho Trust & Banking Co., Ltd.
(Special account)
1-3-3 Marunouchi, Chiyoda-ku, Tokyo
Mizuho Trust & Banking Co., Ltd.
—The amount separately stipulated as the amount equivalent to share brokerage fees

Method of public noticeElectronic public notice will be made. However, if it is impossible to publish public
notices electronically because of an accident or other unavoidable circumstances, thepublic notices shall be made by publication in the Nihon Keizai Shimbun.
The Company’s URL for public notice: https://www.fcc-net.co.jp/

Special benefits for shareholders• Content of the shareholder special benefit plan
Shareholders owning at least 200 shares for at least a year who are recorded or listedon the shareholder register as of March 31 and September 30 of each year (recorded
or listed on the shareholder register as of March 31 and September 30 at least threeconsecutive times under the same shareholder number) are gifted with a local
specialty product worth ¥2,500.

Note: Pursuant to the provision of the Company’s Articles of Incorporation, the Company’s shareholders may not exercise
any right, in relation to their holding shares less than one unit, other than rights set forth in each item of Article 189,
paragraph 2 of the Companies Act.

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