Fujikura Ltd.
ANNUAL REPORT 2011
5-1, Kiba 1-chome, Koto-ku, Tokyo 135-8512, Japan
Tel: +81-3-5606-1030
Fax: +81-3-5606-1502
URL: http://www.fujikura.co.jp
Awabuki (Sweet Viburnum) tree
commemorating the founding of
the Company
Even after 130 years with Fujikura,
we still treat it with great care.
Printed in Japan
Annual Report
Year Ended March 31, 2011
“Tsunagu” Technology
Fujikura Ltd. was established as an electrical wiring company in 1885, when the founder
Zenpachi Fujikura overcame the difficulties inherent in wiring by insulating the wires with silk
and cotton windings for use in electrical generators—cutting-edge technology at the time.
Since then, the Company has always stayed ahead of the times with “Tsunagu“ (connection)
technologies, developed through the manufacture of electric wires and cables with the aim
of contributing to the advancement of society. Fujikura continues to deliver highly reliable
products to the telecommunications, electronics, automotive and energy fields through its
numerous advanced technologies.
In 2005, the Company’s 120th anniversary, we declared our intent to start anew with the
beginning of the “Third 60 Years of Leadership.” We stated our mission to contribute to
the creation of a richer society and to create value for customers through reforms to our
corporate culture, based on our new “Mission, Vision, Core Values” (MVCV).
Now, with our basic management policy centered on profitability, the Fujikura Group is
proceeding with its “Focus & Deep” strategy that reinforces craftsmanship in monozukuri
(manufacturing), and research as the source of its metabolism, and ensuring that every
person in the Fujikura Group works as one to realize the Group’s mission—to create customer
value while contributing to society.
01 A Message from the President & CEO
05 2015 Mid-Term Business Plan
10 Fujikura at a Glance
11 Telecommunications
12 Electronics & Auto
13 Metal Cable & Systems, Real Estate and others
14 At the Forefront of R&D
16 Corporate Governance
18 Directors, Corporate Auditors and Executive Officers
19 Financial Highlights
21Management’s Discussion and Analysis of Financial
Position and Operating Results
22 Consolidated Balance Sheets
24 Consolidated Statements of Income
25 Consolidated Statements of Comprehensive Income
26 Consolidated Statements of Changes in Net Assets
28 Consolidated Statements of Cash Flows
29 Notes to the Consolidated Financial Statements
50 Report of Independent Auditors
51 Global Network
52 Main Consolidated Subsidiaries, Investor Information
Fujikura Annual Report 2011
Forward-Looking Statements
This Annual Report contains future
estimates, targets, plans and strategies
by the Company and Fujikura Group.
They are based on judgments made
using information available at the time
of writing. For various reasons, actual
results may differ substantially from
these estimates. Fujikura disclaims any
obligation to update or publicly announce
any revisions to these forward-looking
statements to reflect future events,
conditions or circumstances.
The Great East Japan Earthquake that occurred
on March 11 caused damage to buildings and
facilities at the Company’s Sakura Plant, Group
company DDK Ltd., and the Koriyama Plant
of Yonezawa Electric Wire Company Ltd., but
fortunately it was not serious and there was no
human loss so we were able to recover quickly
in terms of production capacity.
Yoichi Nagahama
President & CEO
A Message from the President & CEO
The Great East Japan Earthquake
that occurred on March 11 caused
damage to buildings and facilities at
the Company’s Sakura Plant, Group
company DDK Ltd., and the Koriyama
Plant of Yonezawa Electric Wire
Company Ltd., but fortunately it was
not serious and there was no human
loss so we were able to recover
quickly in terms of production capacity.
However, actual operations were
affected by aftershocks and planned
blackouts, and the entire Group
operation was not restored to its
original state until the end of April.
We also donated approximately ¥91
million from domestic and foreign
Group companies and employees
for disaster relief sent through the
Japanese Red Cross Society. The
Fujikura Group is actively contributing
to post-earthquake reconstruction, and
is responding to customer demand by
increasing production.
I would now like to report on the
Group’s performance in FY2010 (the
year ended March 31, 2011).
In FY2010, the Japanese economy
showed signs of a rebound due
to economic growth in emerging
countries such as China and others,
and economic recovery in the United
States and Europe, but overall, the
strong impression of recovery was
dampened by the progression of the
strong yen and the rising price of crude
oil.
The Fujikura Group’s sales
increased in the Telecommunications
segment due to increasing demand
in Asia and North America, and in
the Metal Cable & Systems segment
due to rising copper prices, and in
the Auto segment due to healthy
market conditions in China as well
as in Europe. However, because of a
significant decline in flexible printed
circuits (FPCs) in the Electronics
segment along with the impact of the
strong yen, overall sales were ¥521.8
billion.
Although income rose in the
Telecommunications segment and
the Auto segment, and income also
rose in the Real Estate segment due
to the completion of the Fukagawa
GATHARIA complex, income fell in
the electronics and industrial cables
Fujikura Annual Report 2011 field. Operating income fell by 5.8%
compared with FY2009 to ¥16.8 billion
mostly because of the appreciation
of the Japanese yen and the Thai
baht against the US dollar, and net
income amounted to ¥9.3 billion after
accounting for gains on sales of fixed
assets and extraordinary losses, such
as loss on revaluation of investment
securities caused by the earthquake
disaster.
communications equipment in such
centers.
Although there was downward
pressure caused by the strong yen,
income rose significantly due to
increased sales of Arc Fusion Splicers
and optical components.
In the Electronics & Auto segment, net
sales were ¥195.1 billion and operating
losses were ¥100 million.
In the Electronics segment, both
sales and income for our mainstay
FPC products decreased significantly.
Net sales declined due to production
being unable to respond to intensely
fluctuating demand and because of
changes in our product mix, while
profitability deteriorated markedly due
to the appreciation of the currency
of Thailand against the US dollar,
Thailand being one of the Group’s
key production bases. Connectors
for industrial machinery have been
performing well, and increased
demand for smart phones has led
to significant increases in sales of
products aimed at mobile terminals.
Net sales increased in the Auto
segment due to continued good
performance in the Chinese market
and recovery in the European
market. European bases contributed
In regard to the overall conditions
in each segment, net sales in the
Telecommunications segment
increased 4.7% to ¥112.3 billion,
and operating income rose 43.1% to
¥12.3 billion.
Net sales of optical fiber cables
in Japan increased due to regional
informatization initiatives of local
governments to improve the
telecommunications infrastructure.
Investment in the construction of the
telecommunications infrastructure
is also continuing in China and North
America, resulting in a significant
increase in demand for Arc Fusion
Splicers. Furthermore, increase in
investments in data center facilities
in North America has resulted in
the solid performance of optical
components used in cabling between
Net Sales and Operating Income
In the Metal Cable & Systems
segment, net sales were ¥195.4
billion and operating losses were ¥200
million.
Steady income was recorded for
overhead power transmission lines
mainly due to the optical ground wire
(OPGW) business in overseas markets
such as North America. In the field of
industrial cables, the rise in the price
of copper used as raw material led
to an increase in net sales compared
with the previous fiscal year, but
profitability deteriorated because
domestic construction investment did
not recover and sale prices remained
low despite higher material costs.
Finally, in the Real Estate segment, net
sales amounted to ¥11.4 billion, while
operating income was ¥4.8 billion.
Sales and income both increased due
to the full operation of the Fukagawa
GATHARIA complex, a redevelopment
project completed last March on
the former site of the Company’s
Fukagawa Works.
Net Sales by Segment
(Billions of yen)
800
700
600
500
400
300
200
100
0
significantly to improvements in
profitability through structural reforms
of businesses, and the launch of wire
harnesses for new vehicle types.
(Billions of yen)
7.2
659.4
573.6
570.0
521.8
503.5
FY2009
107.3
208.4
174.5
11.4
FY2010
20.3
FY2007
Net Sales
Fujikura Annual Report 2011
0.2
FY2008
17.9
16.8
15.0
FY2009
FY2010
Actual
FY2011
Est.
Operating Income
112.3
195.1
Telecommunications
Electronics & Auto
Real Estate
Others
6.1
7.5
195.4
Metal Cable & Systems
In FY2011, the economic environment
remains unpredictable due to the
difficulty in assessing the severity of
damage caused by the Great East
Japan Earthquake on the economy
as a whole. Furthermore, there are
concerns about the rising yen and
increased prices of raw materials.
In addition, we regretfully forecast
significant declines in income
especially in the first half of the year
because some shipments have
already been delayed by cuts in the
supply chain. Although the economy
is expected to recover in the latter half
of the year, we are unable to make any
specific forecasts at this point in time,
and we are making plans based on
these conditions.
Looking at the measures being
implemented in each segment, in the
Telecommunications segment, we
will focus on establishing an integrated
production system in China where
there is demand for our products in
the optical fiber and optical fiber cable
business. We began mass production
in the early stages of FY2011 at our
optical fiber preform production base
(Fujikura FiberHome Opto-Electronics
Material Technology Co., Ltd.) and our
optical cable production base (Nanjing
Fujikura Fiberhome　Optical　Cable　Co.,
Ltd.), along with the communications
equipment production base (Shanghai
Fujikura Grandway Co., Ltd.) that was
made into a subsidiary in January,
we aim to secure demand in the
expanding Chinese market. Optical fiber
is primarily used in the long-distance
telecommunications infrastructure,
but progress is being made in the
application of optical interconnection
technology used in wiring within
computers as a new field. Moreover,
we are strengthening applied optical
fiber products in the medical field, such
as endoscopes, while also developing
our fiber laser business for metal
processing and laser markers, and so
on.
In the Electronics segment, it is crucial
to have a system that is able to rapidly
and flexibly adapt to the market, which
requires the launch of new products in
an extremely short cycle due to fastpaced changes in demand. We will
build an integrated system to manage
capital investment, production load
adjustments and the procurement
of materials by tracking the demand
trends in a timely manner. We are also
proceeding with the selection and
concentration of our product lineup.
In the Auto segment, we plan to
establish several new production
bases and launch new products
in FY2011. We will respond to our
customers’ needs by fully utilizing
our limited management resources
without waste.
In April this year, we reorganized
the Electronics & Auto segment
into the Electronics segment that
handles FPCs, etc., and the Auto
segment centered on automotive wire
harnesses and other products. Since
the customers and product life cycles
differ significantly, we have positioned
each of these as independent
management units and will proceed
to manage both with agility and
efficiency.
In the Metal Cable & Systems
segment, we will increase production
and enhance responsiveness to our
customers so as to contribute to
reconstruction in the aftermath of the
earthquake. In the industrial cable field,
we will promote structural reforms in
manufacturing, sales, and logistics,
with the aim of substantially improving
our cost structure. Furthermore, we
will proceed to expand our business
in China, Southeast Asia and South
America, where demand is expected
to grow significantly.
Under our consolidated business plan
for FY2011, we forecast net sales of
¥570 billion, operating income of ¥15
billion and net income of ¥6 billion.
We plan to pay ¥2.5 per share as
an interim dividend and ¥3.5 per share
as the year-end dividend for an annual
dividend of ¥6.0 per share.
We ask for your continued
understanding and support as we
forge ahead.
Yoichi Nagahama, President & CEO
Fujikura Annual Report 2011 2015 Mid-Term Business Plan
MAKE CHANGES
AND CHANGE OURSELVES!
Due to globalization, the shift to a low-carbon energy-efficient society, aging
populations and declining birthrates facing developed countries, the business
environment around us is changing drastically.
In such an environment, the Fujikura Group has been working to transform its
corporate culture to match the new age based on a new corporate philosophy
since 2005. Based on this, we have launched the new Group strategy, the "2015
Mid-Term Business Plan."
The Mid-Term Business Plan aims to change the entire Fujikura Group and
demands strong commitment to change from every employee and the
Company itself.
Outline of the 2015 Mid-Term Business Plan
Our RESPONSIBILITY is to our customers.
We help them sustain and develop their
business by providing superior products
and services through
"TSUNAGU" Technologies
Corporate
Philosophy
(Mission)
2015 Mid-Term Policies
“Make Changes and Change Ourselves !”
Customer-oriented & value-creating company
appreciated globally
Achieve sound growth by focusing on profitability and
accelerating differentiation & metabolism
1
Pave the way into
new business areas
Growth Strategies reform
integrated
2 Accelerate
3 Structural
4 Enhance
globalization
of business
Group management
Fujikura’s DNA "TSUNAGU" Technologies
Fujikura Annual Report 2011
I
Shrinking domestic markets and expanding overseas
markets
Shift to a low-carbon and more energy-efficient society
Changes in
Business
Environment
Severe price competition due to the rise of companies in
emerging countries
ging populations and decreasing birthrates in developed
A
countries
Rising resource prices and exchange rate risks
II
Achieve higher profitability and sound growth
Promote structural reform of business (“Focus & Deep”)
Enhance business flexibility and metabolism
Management
Challenges
III
Growth Strategies and Main Measures
1
Pave the way into new business areas
and Energy
■Cloud communications
■Medical care/Nursing/Health care
Sustainable growth
and flexibility to
respond to changes
■Environment
Enter into growth
markets such as
environment and energy, etc.
3
4
Structural reform of
business
■Streamline
domestic/overseas
locations
Metal
Cable &
Systems
Electronics
Differentiation and
metabolism
R&D
“TSUNAGU”
Technologies
Globalization and
expansion into
new markets
Auto
Enhance integrated Group
management
■Build the base (rules, Group
structure) to optimize integrated
Group management
■Increase efficiency with the use of IT
■Improve the environment for the
global utilization of human
resources
2
Telecommu- Expand into new
nications business areas and
emerging countries
2015
Mid-Term
Goal
hly le
Hig fitab y
pro pan
com
Accelerate globalization
infrastructure business
overseas
■Establish optimized global business
development structure
■Develop
Fujikura Annual Report 2011 1. Pave the way into new business areas
Environment and
Energy
Develop the “smart community” business
- Superconductivity business
- Renewable energy
- Smart housing
- Transportation (Railways, Vessels)
- Next-generation vehicles (EVs, HEVs)
- Thermal solutions
Cloud
communications
Expand the data center business
- Optical interconnection devices
- Server cooling systems
Expand the electronic devices business
-D
evices/Modules for cloud interface computer (High-speed/
High-density FPC boards, small pitch connectors, etc.)
Medical care/
Nursing/Health care
Expand the medical equipment business
- Devices for MRI and CT
- Vascular endoscopes
- Pressure/Oxygen sensors for medical use
2. Accelerate globalization
Infrastructure
business
Auto business
Entry into environment/energy markets and FTTH market
Focus areas: China, North America, South America,
Southeast Asia and India
Optimize the investment of resources in line with the
globalization of customers
F
ocus areas: China, Europe, North America and South America
Establish a global
business development
structure
stablish regional functions and organizations suitable to the
E
business
- Strengthen the function of regional headquarters in Thailand,
North America and China
- Enhance the global supply chain
xpand “craftsmanship in monozukuri (manufacturing)” to
E
compete in the global market
Overseas sales as a percentage of total sales 41% (FY2010)
Fujikura Annual Report 2011
60% (FY2015)
3. Structural reform of business
Streamline
domestic/Overseas
locations
Reorganize domestic structure
- Promote Groupwide structural reform of manufacturing,
sales and logistics
Streamline major overseas locations
Optimize manufacturing facilities in response to market/
customer needs
s
Main Manufacturing Facilities
Telecommunications
Electronics
Metal Cable & Systems
Auto
Focus areas
4. Enhance integrated Group management
Build the base (rules, Group structure) to optimize integrated
Group management
Increase efficiency with the use of IT
Improve the environment for the global utilization of human
resources
IV
Net Sales and Operating Income
(Billions of yen)
Net Sales
Operating Income
Business
Targets
Operating Income
Margin (%)
5.1%
16.8
FY2010
Actual
ROE (%)
Exchange rate (JPY/US$)
(Average for the year)
Copper price (thousand JPY/ton)
(Average for the year)
6.5%
570.0
521.8
3.2%
Overseas sales as a percentage
of total sales (%)
650.0
620.0
2.6%
32.0
42.5
15.0
FY2011
Est.
FY2013
Target
FY2015
Target
41.0%
50.0%
57.0%
60.0%
4.9
3.4
9.0
10.0
85.74
83.00
85.00
85.00
738
800
650
650
Fujikura Annual Report 2011 V
Business Strategy by Segment
1. Telecommunications
Pave the way into new business areas
FY2010 FY2011 FY2015
Actual
Est.
Target
xpand the infrastructure business (optical fibers/cables and
E
related components) overseas by utilizing our telecommunications
technologies
Secure substantial profit in the non-infrastructure business (cloud
communications, medical, fiber laser and other fields)
Net sales
(Billions of yen)
Operating
income
margin (%)
112.3
115.5
145.0
11.0%
5.5%
8.3%
2. Electronics
Attain sustainable growth of the electronics
components business
Improve customer satisfaction and enhance profitability (cost
savings, automation and semi-automation)
FY2010 FY2011 FY2015
Actual
Est.
Target
FPC: Measures for sustainable growth and highly
profitable business
Net sales
(Billions of yen)
romote customer intimacy and make more proposals to priority customers
P
Strengthen the manufacturing structure
Develop next-generation technologies
Operating
income
margin (%)
129.0
148.5
190.0
-1.5%
1.5%
6.8%
3. Auto
Capture new customers and new markets through
global expansion and development of products for
next-generation vehicles
FY2010 FY2011 FY2015
Actual
Est.
Target
Net sales
(Billions of yen)
Operating
income
margin (%)
66.1
71.8
110.0
2.8%
1.1%
5.5%
4. Metal Cable & Systems
Pave the way into new business areas
FY2010 FY2011 FY2015
Actual
Est.
Target
Environment and energy, transportation, and ubiquitous
Focus on overseas infrastructure business as a
primary revenue stream
Net sales
(Billions of yen)
Operating
income
margin (%)
Pursue the structural reform of domestic business
and secure profit
VI
Capex
Fujikura Annual Report 2011
195.4
215.6
190.0
-0.1%
0.6%
3.2%
Focus investments on the growth strategy
(Billions of yen)
FY2010
23.3
0.8
FY2011
Est.
32.5
FY2015
Target
29.0
Manufacturing
Real estate
24.1
2.5
1.0
30.0
35.0
FY2011-2015
¥150 billion in total: Of
¥150 billion 60% directed
toward growth strategies
Fujikura at a Glance
Telecommunications Electronics & Auto
FY2010
Net Sales
22%
Fujikura boasts the world’s top-rated manufacturing
technologies for Fiber-to-the-Home (FTTH) optical fibers.
Its strengths include optical fiber peripheral application
technologies, optical fiber cables, optical connectors and
connection components, Arc Fusion Splicers and other
products relating to the FTTH networks. In establishing
FTTH Japan and abroad, we are combining our accumulated
proprietary technologies with the latest technologies to
provide total optical solutions that satisfy the demands of
every aspect and application of optical networks including
optical fibers, optical devices, optical cables and connection
components and connectivity equipment.
Metal Cable &
Systems
FY2010
Net Sales
37%
In addition to supplying metal cables for telecommunications
including coaxial cables, telecommunications cables for
telephone use and plant instrumentation cables, Fujikura
provides a variety of other electric wire and cables, equipment
and eco products, such as the power and control cables used
inside buildings and factories and industrial appliance wire, as
well as the electric wire and cables used in elevators, shipping,
rail transportation and various other industrial applications.
Fujikura also enjoys a global reputation for the performance
and reliability of its ultra-high voltage (500 kV) underground and
submarine transmission cables, optical ground wire (OPGW),
and other products.
FY2010
Net Sales
37%
As a Global Wiring Solution Provider, Fujikura is the source for
one-stop solutions ranging from flexible printed circuits (FPCs) that
enable higher functionality and miniaturization in digital cameras and
mobile phones to a variety of other products, including electronic
wiring, hard disk drive (HDD) components, membrane switches,
semiconductor package products and thermal products such as
micro heat pipes, heat sinks, vapor chambers and other modular
products as parts for electronic devices such as digital consumer
appliances and portable devices.
In the automotive electronics business, we expanded sales of
wire harnesses, as well as automotive components incorporating
total wiring technology, such as automotive wire harnesses, in
each of the four key marketing regions of the world.
Real Estate and
others
FY2010
Net Sales
4%
Since 1997, we have been redeveloping the 70,000 m2
former site of the Fujikura plant in Kiba, Koto-ku, Tokyo,
into a zone made up of office buildings, a shopping mall,
a cinema complex, a fitness club and restaurants. The
completion of two office buildings at the end of March
2010 marked the final phase of the Fukagawa GATHARIA
complex as planned.
In the other segment, the Group is active in the sales of
manufacturing equipment and cargo transportation service,
and others.
Fujikura Annual Report 2011 10
Telecommunications
In FY2010, operating income increased, driven mainly by optical
components and Arc Fusion Splicers
In FY2011, net sales are expected to grow, mostly from overseas demand,
but profit margin is expected to fall due to intensifying competition
Focus on establishing overseas manufacturing companies
Net Sales and Operating Income Margin (%)
(Billions of yen)
107.3
112.3
35.1
115.5
32.8
34.8
11.0%
8.0%
57.6
Operating income margin (%)
57.1
50.7
5.5%
21.7
20.0
25.1
FY2009
FY2010
Actual
FY2011
Est.
Optical fibers/cables
Optical components
C-Slot SSW Optical Fiber Cables
Fujikura’s C-slot cables have been well received among
customers because they enable FTTH optical cable
work to be performed quickly and economically. We
have begun selling a self-supporting cable that can
be used between utility poles without the need for
suspension wires.
Engineering
Optical fibers/cables
FY2010 showed steady performance with contributions from
indefeasible right of user (IRU) businesses and others although there
was some year -on- year impact from a stronger yen and falling prices
In FY2011 we expect to see growth in sales from the newly established
manufacturing companies for optical fiber preforms and optical fiber
cables in China but also expect a tough domestic market
Optical components
Y2010 showed strong performance compared with the previous year,
F
especially with optical components for data centers, FTTH, and IRU
In FY2011 we expect to face a decrease in the profit margin due to
intensifying competition in the optical components business despite
the favorable sales of Arc Fusion Splicers
Engineering
In FY2010, net sales grew in North America, but were not sufficient to
offset the drop in domestic business
FY2011
we expect to see continued growth in net sales in North
America
New Arc Fusion Splicers
Today's splicing needs for factory, manufacturing, laboratory,
and R&D applications are expanding rapidly. In order to address
this, ARCMasterTM splicer family were released in the last year.
Fujikura's new "ARCMasterTM" splicers are engineered with
a robust set of features that offer customers technology and
reliability not available elsewhere.
11 Fujikura Annual Report 2011
Electronics & Auto
In FY2010 the business struggled with a drop in net sales of FPCs.
The automotive business was robust in China and North America, and
recovered in Europe
e expect to be hit by the impact of auto manufacturers’ cut in
W
production in the first half of FY2011
Net Sales and Operating Income Margin (%)
(Billions of yen)
220.3
195.1
208.4
81.4
68.2
89.9
28.8
23.1
34.4
1.8%
61.0
FY2009
31.8
66.1
32.2
34.9
71.8
Operating income margin (%)
High Speed Transmission Cable Assembly
Fujikura started providing the lineup of advanced high speed
digital cable assembly which comply to HDMI 1.4a and next
generation USB standard, USB 3.0 which realizes a rate of
5Gbps, while the data transmission demands are increasing
in the data storages, mobile & portable devices and display
products and so on. Fujikura cable assembly give you not only
higher transmission performance by own unique technology
but also comfort by a half diameter cable and light weight with
portability and wiring business with mobility.
FPCs
Connectors
Others
-0.1%
1.4%
FY2010
Actual
FY2011
Est.
Auto
FPCs
Net
sales dropped significantly due to production cuts by customers for their own reasons in the first
half of FY2010, and a production capacity shortage due to the rapid increase in demand later H2
In FY2011 we expect to see a further increase in net sales, especially driven by mobile products
Connectors
In FY2010, net sales grew dramatically, with the recovery in the industrial
equipment market and strong demand in the mobile products market
In FY2011 we expect to see a further increase in net sales, especially driven by
mobile products
Others
Net sales for micro coaxial cable assembly is expected to grow in FY2011
Auto
New overseas manufacturing bases started operating at full
capacity in FY2010, contributing to improvement in profitability
In FY2011 we expect to see increased net sales due to the
launch of wire harnesses for new vehicle types
Semi-Additive FPCs
As electronic equipment becomes increasingly smaller,
thinner, and more functionally advanced, FPCs are also
required to become finer and offer even higher performance.
FPCs made using a semi-additive method feature a super-fine
wiring pitch and high-precision impedance control that cannot
be achieved by conventional FPCs manufacturing method.
Fujikura's semi-additive FPCs supports the downsizing and
performance advancement of electronic equipment.
Fujikura Annual Report 2011 12
Metal Cable & Systems
ise in copper prices pushed up net sales in FY2010, but the Company
R
struggled with intensifying competition in the market
Profitability is expected to improve in FY2011 through better pricing
Wireless Broadband Leaky
Coaxial Cable
A Wireless Broadband Leaky Coaxial
Cable (WBLCX®) is a sophisticated
antenna based on a coaxial cable.
WBLCX® radiates electromagnetic
wave from many slots periodically
arranged on an outer conductor.
Therefore, WBLCX® are suitable
to use in an area placing many
conductive obstacles and in narrow
space which is hard to propagate
electromagnetic wave.
Net Sales and Operating Income Margin (%)
(Billions of yen)
215.6
195.4
174.5
Operating income
margin (%)
1.0%
0.6%
-0.1%
FY2009
FY2010
Actual
Metal Cable &
Systems
FY2011
Est.
Metal Cable & Systems
Quick Charging Connector for
Electric Vehicles
Fujikura has developed a connector with a cable that
links to an electric vehicle and a quick charger. This
newly developed connector comes as a single unit with
a cable that conveys power from charger to vehicle in a
short period of time. It is compliant with the CHAdeMO
Association's standards, and can be used for the Mitsubishi
iMiEV, as well as the Nissan Leaf. Because of the earnest demand for
electric vehicles that do not require gasoline in the areas affected by the
earthquake, we delivered Fujikura products to provide assistance in the
establishment of electric vehicle charging infrastructure.
In FY2010, net sales increased year-on-year with a slight
increase in copper cable shipments and a rise in copper
prices. However, operating income fell by intensifying price
competition
FY2011, we expect both net sales and operating income
In
to increase mainly from improvements in pricing
Copper price
(thousand JPY/ton)
(Average for the year)
FY2009
FY2010
FY2011 Est.
609
738
800
Real Estate and others
The redevelopment project on the former
site of the Fukagawa Works was completed
last March and the site is now known as
“Fukagawa GATHARIA.” It is fully operating,
with tenants acquired as planned. As a result,
net sales were ¥11.4 billion, up 59.7% year
on year, with operating income of ¥4.8 billion
which is up 41.6% year on year.
In the Others segment, sales of manufacturing
equipment and cargo transportation services,
and others, recorded net sales of ¥7.5 billion, up
23.4% from the previous year, and operating
income of ¥400 million, down 32.0%.
13 Fujikura Annual Report 2011
Fujikura Millenium Woods (Fukagawa GATHARIA)
In November 2010, we opened a biotope garden
dubbed Fujikura Millennium Woods in Kiba as part of the
redevelopment project. In addition to contributing to nature
conservation, the biotope garden is also a place where local
residents can drop by to relax and an educational resource
where children, who are our future, can learn about nature
and the environment.
At the Forefront of R&D
The Fujikura Group is developing
new products and new technologies
in the following business segments:
(1) Telecommunications, (2) Electronics & Auto, and (3) Metal Cable &
Systems. The Group has three corporate laboratories: the Environment
and Energy Laboratory, the Optics
and Electronics Laboratory, and the
Electron Device Laboratory. Also, the
Group has four R&D centers, each
aligned with a particular business
unit: the Electronics Components
R&D Center, the Optical Cable Sys-
tem R&D Center, the Optoelectronics Circuits & Systems R&D Center,
and the Power & Telecommunication
Cable System R&D Center.
During the fiscal year under
review, Fujikura conducted development of high temperature (high-Tc)
superconducting wires and dyesensitized solar cells as part of our
environmentally concious development. High-Tc superconducting wires
double the critical current Ic from
300 A to 600 A, and surpass the
world record for Ic L value (product
of critical current and wire length).
Moreover, with our dye-sensitized
solar cells, we succeeded in producing power under low illumination of
only 10 lux by utilizing their unique
properties, and we are undertaking
further development aimed at their
practical application. By segment, our
research and development activities
and their results are below, and consolidated research and development
expenses for the fiscal year under
review amounted to ¥13.9 billion.
•
R&D Activities and Achievements by Segment
Telecommunications
With the expansion of broadband
networks such as Fiber-to-the-Home
(FTTH) and next generation networks
(NGN), Fujikura is proceeding with
the development of a variety of technologies and products, such as cloud
computing, which will become a core
technology in the future.
We have achieved a certain level
of success with our development of
innovative optical cables focusing on
a smaller diameter and higher density,
which is the global trend in development, and we will put the technology
to practical application in FY2012. For
FTTH, we are developing and massproducing optical cables (new C-slot
cables, etc.) and new optical connectors, etc., for foreign markets where
800-Meter Class HighPerformance YBCO
Superconducting Wire
Highly Efficient Dye-Sensitized
Solar Cell Module for Energy
Harvesting Applications
In our latest accomplishment, we succeeded in
developing an 816.4 m superconducting wire with
a critical current (Ic) of 572 A. We have now beaten
our own record by developing a wire with the Ic·L
value of 466,981 Am.
We intend to endeavor to supply 1,000 m class
yttrium-based superconducting wire to accelerate
the further commercialization of a wide range
of superconducting devices including power
equipment with the aim of producing much longer
superconducting wire with higher performance at
a lower cost.
Fujikura has developed a low-illumination
dye-sensitized solar cell module fit for
indoor environments (with an illumination
of up to 500 lux) that are difficult for
existing solar cells to handle.
FTTH demand is on the rise. Additionally, we have developed a Photonic
Turn Multi-Fiber Optical Connector in
our development of an optical interconnection cable to meet high-speed
transfer needs, and are marketing it
primarily in foreign markets.
We also developed a multi-phase
shift optical transceiver with a transfer
speed of 40 Gbps in our development
300-W CW Single-Mode Fiber
Laser with Air Cooling
Fujikura has become the first Japanese
manufacturer to develop a 300-W
continuous wave (CW) single-mode fiber
laser equipment with air cooling.
Making the best use of our expertise
in optical fiber and related technologies
gained through the optical communication
business, the successful development
of this 300-W single-mode fiber laser
marks the first major step in our fiber laser
business development.
Fujikura Annual Report 2011 14
of optical systems and modules, and
have already begun to make available
samples. We have also released a new
VPN device called Flebo Next, which is
8 times faster than the existing product. We developed a total of 7 new
types of Arc Fusion Splicers, such as
special Arc Fusion Splicers for factory
use and Automatic Optical Fiber Preparation Machine with the aim of providing additional functionality in the field
of special optical fiber connections.
Electronics & Auto
In this segment, Fujikura is developing
flexible printed circuits (FPCs),
membrane products, electronic wires,
HDD carriages, connectors, sensor
products, and thermal products such
as heat pipes. We are also developing
various electrical components for the
automotive industry, beginning with
wire harnesses.
In the digital appliance and electronic
device industry, with advances being
made in cloud computing, there
is an accelerating trend of greater
functionality and smaller sizes in mobile
electronic devices such as FPCs,
membrane products, electronic wires,
antennas, HDD carriages, sensor
products and digital appliances. In
order to respond to such requirements,
the Fujikura Group is working on the
development of high-speed technology,
fine pattern technology, multi-layering
technology, and embedded integrated
circuit (IC) chips for FPCs. In products
that use printing technology, we are
developing fine pattern technology
utilizing new printing methods, while
working on improving the functionality
and increasing the added value of
membrane application products,
such as input devices and sensors,
and functional components such as
light guide panels for illumination.
Our electronic wire development
includes the development of highspeed cables such as USB 3.0 and
HDMI 1.4a, and compact antennas.
Development of thermal products
includes the development of ultra-thin
heat pipes with improved functionality
and development aimed at the
practical application of direct methanol
fuel cells (DMFCs). In automotive
electronics, we have been developing
power management systems and
next-generation passenger detection
sensors. Furthermore, we are also
developing automotive electronics
aimed for electric vehicles and hybrid
vehicles.
Metal Cable & Systems
In an effort to preserve the global
environment, Fujikura is actively
developing metal cables and systems
based on environmentally friendly
technologies that lead to a reduction in
carbon dioxide, a lower environmental
burden and more effective use
of resources. We are developing
environmentally friendly cables for use
with wind power to promote the use
of natural energy sources. We are also
developing rapid-charging cables to
support a recharging infrastructure for
electric vehicles. We are developing
a copper clad aluminum (CA) highfrequency conductor for use in
cables and coils to make them more
lightweight and energy efficient.
We are also proceeding with the
development of a leaky coaxial cable
to support wireless LAN and an ultrathin leaky coaxial cable for use in close
proximity wireless communication,
such as Radio Frequency Indentification
(RFID), aimed at the ubiquitous era.
2015 Mid-Term Business Plan
Develop new projects through synergies between the growth markets
(Environment and Energy, Cloud communications, Medical
care/Nursing/Health care) and “Tsunagu” technologies
Invest a total of ¥80.0 billion over five years
Develop a new business pillar
—Shifting towards launching a new business—
Contribution to
a sustainable society
Contribution to
a “cloud” society
15 Fujikura Annual Report 2011
Contribution to
a low-carbon society
Contribution to a
“High-speed”
cable society
Expand into new
business areas
High-Tc superconductors
EV Automotives harnesses
Fiber lasers
High-power LDs
Optical Interconnections
Silicon photonics
Substrates with built-in
components
Dye-sensitized solar cells
Fuel cells
Thermal solutions
Electronic endoscopy
Corporate Governance
1. Overview of the Corporate Governance System
Fujikura businesses constantly
face intense competition in their
respective fields, and it is vital that
the intentions of management
permeate to the farthest reaches
of the organization to ensure that
activities are implemented in a
consistent and timely manner
throughout the Company. Meetings
of the Management Committee,
consisting of Directors, are held
weekly to make key decisions
within the Company and the Group,
while simultaneously overseeing
general operations. Meetings of
the Board of Directors are held
almost monthly to decide upon
important matters in accordance
with the Regulations of the Board
of Directors, and to supervise the
general execution of operations
by Directors. The Executive
Committee reports and exchanges
information on the dissemination
and state of implementation of
matters decided upon by the
Management Committee.
Fujikura believes that being
aware of, incorporating and
managing legal issues and the
propriety of operations that span
from executive decision making to
everyday activities in the farthest
reaches of the organization is an
efficient way of monitoring and
supervising such activities.
Fujikura ensures executive
responsibilities are clarified by
the executive officer system,
and has adopted the corporate
auditor system to facilitate the
monitoring and supervision of
management and its decisionmaking process. Internal control
of daily operations designed to
ensure legal compliance and the
propriety of operational processes
is handled by the Audit Division,
the relevant departments at
headquarters, and administrative
organizations within each business
segment. We have established
rules for managing documents
and electronic information with
regard to the storage and handling
of important management
information. In addition, we review
Companywide risks, promote a
compliance system and operate
a whistleblowing system with
the help of the Risk Management
Committee and the Conduct Code
Promotion Committee.
In accordance with the provisions
of Article 427, paragraph 1 of the
Company Law, the corporation
has concluded contracts with all
outside corporate auditors to limit
their liability for damages pursuant
to Article 423, paragraph 1 of the
Company Law and the Minimum
Liability Amount stipulated in Article
425, paragraph 1 of the Company
Law.
General Meeting of Shareholders
Appointment
Cooperation
Appointment
Board of Auditors (Corporate Auditors)
Cooperation
Appointment
Audit
Board of Directors (Directors)
Supervision
Audit
Management Committee
Accounting Auditors
Executive
Segment
Audit
Audit Division
Appointment /
Supervision
Executive Officers
Risk Management
Committee
Compliance
Conduct Code
Promotion Committee
Audit
Audit
Business Segment / Relevant Departments
at Headquarters
Affiliated Companies
Corporate Auditors (Board of Auditors)
Accounting Auditors
Fujikura Annual Report 2011 16
2. Audit Stucture
The Company has appointed two
standing corporate auditors and
two outside corporate auditors to
audit the execution of operations
by Directors from the perspective
of legal compliance and propriety,
by conducting on-site inspections
of individual departments and
Group companies, viewing
important documents and
attending important meetings.
Auditors cooperate by providing
reports and holding discussions
at meetings of the Board of
Auditors that are held monthly.
Furthermore, Fujikura has adopted
a system whereby standing
corporate auditors are able to
attend important meetings
with regard to management’s
decisions on the execution of
business, such as meetings of
the Management Committee,
to state their opinions. We also
guarantee auditors’ participation
in management, including but
not limited to activities of legal
compliance in meetings of the
Board of Directors, etc., and we
set regular meetings to exchange
views with executive officers and
ensure opportunities are provided
for the auditors to request this
information.
The Audit Division, which
is a dedicated internal auditing
organization conducted a total of
64 audits of individual divisions
(mainly sales divisions) and Group
companies in FY2010.
The audit division periodically
exchanges information regarding
internal auditing with corporate
auditors; in addition, the audit
division conducts internal audit
operations under the instruction
of corporate auditors when
necessary, and periodically
reports the internal audit results to
corporate auditors.
At the beginning of every year,
corporate auditors receive an audit
plan from the accounting auditors,
and receive reports from the
accounting auditors on the results
of audits conducted during and at
the end of the period based on the
plan. Several times each year, the
corporate auditors and accounting
auditors meet to discuss and
exchange opinions on the details
and system used in financial
auditing.
knowledge concerning corporate
management and the ability to
appropriately implement his duties
as auditor due to his involvement
in corporate legal affairs for many
years.
The two outside corporate
auditors are independent from and
have no special interests in the
Company.
As outside corporate auditors,
the two audit the execution of
operations by Directors from the
perspective of legal compliance
and propriety by conducting
on-site inspections of individual
departments and Group
companies, viewing important
documents and attending
important meetings. They also
work with standing corporate
auditors by providing reports and
holding discussions in meetings of
the Board of Auditors that are held
monthly. The outside corporate
auditors are to receive materials
relating to meetings of the Board
of Directors and Board of Auditors
in advance.
The Audit Division, which
is a dedicated internal auditing
organization, provides support
as appropriate and conveys
information on internal audits
to outside corporate auditors as
appropriate.
3. Outside Corporate Auditors
Our corporate auditors include two
outside corporate auditors.
Hiroyoshi Ichisawa, an outside
corporate auditor, has considerable
knowledge concerning finance
and accounting based on many
years of experience in a key
position at a major commercial
bank. In addition, he has abundant
knowledge and insight concerning
corporate management, and is
deemed to be able to audit the
propriety, etc., of management
from an objective perspective.
Soichiro Sekiuchi, an outside
corporate auditor, is a highly
specialized attorney with excellent
character and judgment, and
is deemed to have sufficient
17 Fujikura Annual Report 2011
Directors, Corporate Auditors and
Executive Officers
As of June 29, 2011
(From left, front row) Yoichi Nagahama, Toshio Mizushima, Takashi Sato, Masato Koike, Takashi Kunimoto,
Hideo Naruse, Takamasa Kato, Noboru Sugiyama, Toshihide Kanai
Directors
President & CEO & Representative Director Executive Vice Presidents & Members of the Board Yoichi Nagahama
Takashi Sato
Senior Executive Vice President & Representative Director Senior Vice Presidents & Members of the Board
Toshio Mizushima
Masato Koike
Noboru Sugiyama
Takamasa Kato
Takashi Kunimoto
Toshihide Kanai
Hideo Naruse
Corporate Auditors
Standing Corporate Auditors
Corporate Auditors (from outside the Company) Takao Shiota
Hiroyoshi Ichisawa
Toshio Onuma
Soichiro Sekiuchi
Executive Officers Other than Members of the Board
Managing Executive Officers
Nobumasa Misaki
Hideo Shiwa
Masato Sugo
Akira Wada
Shigeru Watanabe
Izumi Ishikawa
Akio Miyagi
Toru Aizawa
Takatoshi Arai
Yasuo Ichikawa
Masahiro Ikegami
Yoshikazu Nomura
Jody E. Gallagher
Executive Officers
Yasuo Kumakawa
Naoto Kosone
Tadatoshi Kuge
Fujikura Annual Report 2011 18
Financial Highlights
Fujikura Ltd., and its Consolidated Subsidiaries
Description of Results
et sales increased by ¥18.3 billion to ¥521.8 billion in FY2010.
N
Despite fluctuations in copper prices and the foreign exchange rate, net sales
increased in the manufacturing business by ¥10.6 billion and by ¥4.3 billion in
the real estate business.
Operating income decreased by ¥1.0 billion to ¥16.8 billion in FY2010.
The decrease in Electronics & Auto and Metal Cable & Systems was partly
offset by the increase in Telecommunications and Real Estate.
Net income was ¥9.3 billion, partly due to the decrease in extraordinary losses.
Millions of
yen
Thousands of
U.S. dollars
FY2006
FY2007
FY2008
FY2009
FY2010
FY2010
¥645,984
¥659,482
¥573,657
¥503,527
¥521,832
$6,275,791
Operating Income
34,507
20,375
230
17,934
16,891
203,139
Net Income (Loss)
21,484
4,503
(19,020)
2,567
9,383
112,844
Capital Expenditures
32,412
36,418
31,201
34,598
21,255
255,619
R&D Expenditures
12,291
13,990
14,989
13,491
13,924
167,456
Total Assets
536,766
537,451
481,493
489,749
482,427
5,801,888
Total Net Assets
254,638
230,730
189,342
193,386
192,750
2,318,100
43,874
49,448
46,466
50,639
53,289
For the Year
Net Sales
At Year-End
Number of Employees
Yen
U.S. Dollars
Per Share Data
Net Income (Loss)—Primary
Net Income—Fully Diluted
Cash Dividends
¥57.3
¥12.3
¥(52.7)
¥7.1
¥26.0
$0.313
­­–
­­–
–
–
–
–
10.0
10.0
7.5
5.0
6.0
$0.072
Note: A
ll dollar figures herein refer to U.S. currency, which has been translated from yen amounts, for convenience only, at the rate of
¥83.15=US$1.00, the rate of exchange on March 31, 2011.
19 Fujikura Annual Report 2011
7,172
2010
107,319
208,446
6,079
174,508
11,453
2011
112,358
0
195.117
100,000
200,000
7,501
195,400
300,000
400,000
500,000
Net Sales
Operating Income, Operating Income Margin
(Billions of yen)
(Billions of yen)
800
700
40
659.4
645.9
500
30
521.8
503.5
20
300
15
200
10
100
5
0
0
FY2006
FY2007
FY2008
FY2009
FY2010
Operating income margin
34.5
25
400
Operating income
5.3
35
573.6
600
(%)
3.6
3.1
17.9
20.3
3.2
16.8
5
4
3
2
0.0
0.2
FY2006
6
FY2007
1
FY2008
FY2009
FY2010
0
Analysis of Operating Income
(Billions of yen)
7,172
6,079
-5.0
2010
107,319
208,446
17.9
2011
195.117
FY2009
100,000
0
200,000
400,000
16.8
-1.0 net change from FY2009
195,400
300,000
Changes in
product mix, etc.
Redevelopment of
Fukagawa
7,501
11,453
112,358
+2.6
+1.4
174,508
Forex effects
FY2010
500,000
Net Income (Loss)
Net Sales by Region
(Billions of yen)
(Billions of yen)
25
20
15
10
2010
5
0
-5
-10
-15
2011
-20
7,172
6,079
FY2009
264.9
156.5
82.0
21.4
107,319
208,446
174,508
4.5
2.5
9.3
11,453
7,501
-19.0
112,358
0
FY2006
195.117
FY2007
100,000
200,000
195,400
FY2008
300,000
FY2009
Asia
80.7
Other
Shareholders’ Equity to Total Assets
(%)
536.7
537.4
Total Assets
481.4
500
Total Net Assets
489.7
482.4
400
50
40
45.3
40.9
30
254.6
230.7
200
189.3
193.3
192.7
37.4
37.1
37.6
FY2008
FY2009
FY2010
20
10
100
0
133.5
500,000
(Billions of yen)
300
307.5
Japan
FY2010
400,000
Total Assets, Total Net Assets
600
FY2010
FY2006
FY2007
FY2008
FY2009
FY2010
Interest-Bearing Debt, Net Financial
Profit, and Free Cash Flows
0
FY2006
FY2007
Shareholder Return Policy
Ensured stable dividend payment
Dividend per share
(Billions of yen)
Interest-bearing debt
Net financial profit / loss
Free cash flows
FY2008 FY2009 FY2010
¥174.3 ¥152.1 ¥164.6
(1.8)
(1.4)
(1.5)
14.8
21.1
(11.5)
FY2009 ¥ 5.0/share
FY2010 ¥ 6.0/share
Dividend payout plan
FY2011 ¥ 6.0/share
(1H: ¥2.5/share, year-end: ¥ 3.5/share)
Fujikura Annual Report 2011 20
Management’s Discussion and Analysis of
Financial Position and Operating Results
Analysis of Operating
Results for the Fiscal Year
Ended March 31, 2011
Consolidated net sales for
the year under review stood
at ¥521.8 billion, up ¥18.3
billion compared with the
previous fiscal year, due
primarily to increases in the
Telecommunications and Metal
Cable & Systems segments.
Although the decline in income in
the Electronics & Auto segment
and the Metal Cable & Systems
segment was offset by the
Telecommunications segment
and the Real Estate segment,
exchange rates had a significant
impact, and operating income fell
by ¥1 billion to ¥16.8 billion, and
net income amounted to ¥9.3
billion.
Significant Factors
Affecting Results
The business environment
surrounding the Group’s
Telecommunications segment
has been good with regard to
optical components and Arc
Fusion Splicers. In the Electronics
& Auto segment, although the
Chinese and North American
markets were solid and the
auto industry recovered in the
European market, profitability
deteriorated because exchange
rates had a significant impact on
electronics. Moreover, although
net sales in the Metal Cable &
Systems segment increased
21 Fujikura Annual Report 2011
compared to the previous fiscal
year due to the rise in copper
prices, profitability deteriorated
because domestic construction
investment is yet to make a
recovery.
Analysis of Capital
Resources and Liquidity
Net cash provided by operating
activities totaled ¥17.2 billion,
down ¥26.6 billion over the
previous fiscal year. This included
pretax profit of ¥14.4 billion and
depreciation and amortization of
¥25.8 billion. Net cash used in
investing activities centering on
plant, property and equipment
investments totaled ¥31.7 billion,
up ¥6.3 billion from the previous
fiscal year. Net cash provided by
financing activities, focusing on
proceeds from loans payable,
amounted to ¥11.8 billion, up
¥37.1 billion.
As a result, cash and cash
equivalents at the end of the
term totaled ¥49.2 billion, a
decrease of ¥4.4 billion year on
year.
I ssues Facing
Management and Our
Future Direction
Our growth strategy involves
accelerating our metabolism
which is the source of the
continuation and growth of the
Company, by opening up new
and future markets through
the ongoing creation of new
technologies and new products,
and the rapid implementation of
businesses in the environment
and energy field, the cloud
communications field, and the
medical care/nursing/health care
fields, which are expected to
grow in the future.
To accelerate globalization, we
aim to expand business in rapidly
growing overseas markets,
establish an optimized global
business development structure
to achieve this, and make these
markets more profitable.
Structural reforms of business
will be carried out through the
strategy of “Focus & Deep”
whereby management resources
will be injected according
to changes in the business
environment, such as expanding
overseas markets and shrinking
domestic market.
Consolidated Balance Sheets
Fujikura Ltd. and its Consolidated Subsidiaries
At March 31, 2010 and 2011
Thousands of
U.S. dollars (Note 3)
2011
Assets
Millions of yen
2010
2011
Current assets:
Cash and deposits
Notes and accounts receivable,trade
Finished goods 䋨Note 12䋩
Goods in process䋨Note 12䋩
Raw materials and supplies䋨Note 12䋩
Deferred tax assets 䋨Note 18䋩
Other
Allowance for doubtful accounts
Total current assets
¥50,753
119,415
15,299
16,153
15,533
4,141
21,500
(1,099)
241,698
¥45,459
122,645
19,015
17,582
16,662
4,197
21,365
(1,175)
245,752
$546,711
1,474,985
228,683
211,449
200,385
50,475
256,945
(14,131)
2,955,526
Fixed assets 䋨Note 6 and 16䋩:
Tangible fixed assets
Buildings and structures, net
Machinery, equipment and vehicles, net
Land
Lease assets, net
Construction in progress
Other, net
䇭Total tangible fixed assets
Intangible fixed assets
64,685
31,405
19,398
944
28,347
10,079
154,861
4,833
83,180
28,452
19,269
744
7,827
9,658
149,133
4,878
1,000,361
342,177
231,738
8,948
94,131
116,152
1,793,542
58,665
Investments and other assets:
Investment securities 䋨Note 5䋩
Prepaid pension costs
Deferred tax assets 䋨Note 18䋩
Other 䋨Note 5䋩
Allowance for doubtful accounts
Allowance for investment loss
Total Investments and other assets
Total fixed assets
Total assets
54,617
24,148
3,088
8,048
(1,429)
(116)
88,356
248,051
¥489,749
49,104
23,950
2,789
8,582
(1,493)
(270)
82,662
236,675
¥482,427
590,547
288,034
33,542
103,211
(17,956)
(3,247)
994,131
2,846,362
$5,801,888
The accompanying notes to the consolidated financial statements are an integral part of these statements.
Fujikura Annual Report 2011 22
Thousands of
U.S. dollars (Note 3)
2011
Liabilities
Millions of yen
2010
2011
Current liabilities:
Notes and accounts payable, trade
Short-term borrowings 䋨Note 6䋩
Current portion of bonds 䋨Note 6䋩
Income taxes payable 䋨Note 18䋩
Provision for directors’ bonuses
Provision for surcharge䋨Note 8䋩
Other
Total current liabilities
¥74,575
52,373
2,262
34
4,400
39,397
173,043
¥72,702
58,360
10,000
1,754
28,026
170,844
$874,348
701,864
120,265
21,094
337,054
2,054,648
Noncurrent liabilities:
Bonds 䋨Note 6䋩
Long-term borrowings 䋨Note 6䋩
Deferred tax liabilities 䋨Note 18䋩
Provision for retirement benefits
Provision for directors’ retirement benefits
Provision for repairs
Provision for loss on guarantees
Other 䋨Note 7䋩
䇭Total noncurrent liabilities
䇭Total liabilities
30,000
69,829
2,197
6,809
76
32
18
14,356
123,319
296,363
20,000
76,305
1,808
7,397
70
30
42
13,177
118,832
289,677
240,529
917,679
21,744
88,960
842
361
505
158,473
1,429,128
3,483,788
Contingent liabilities (Note 18)
Net assets
Shareholders’ equity:
Common stock
Additional paid-in capital
Retained earnings
Treasury stock
Total shareholders’ equity (Note 21)
Millions of yen
2010
2011
Thousands of
U.S. dollars (Note 3)
2011
53,075
54,957
85,255
(137)
193,151
53,075
54,957
92,985
(154)
200,864
638,304
660,938
1,118,280
(1,852)
2,415,683
Accumulated other comprehensive income:
Unrealized gains on investment securities, net of taxes
Deferred gain (loss) on hedges, net of taxes
Foreign currency translation adjustments
Total accumulated other comprehensive income
1,997
(7)
(13,561)
(11,570)
42
305
(19,887)
(19,539)
505
3,668
(239,170)
(234,985)
Non-controlling interests
䇭Total net assets
䇭Total liabilities and net assets
11,805
193,386
489,749
11,425
192,750
482,427
The accompanying notes to the consolidated financial statements are an integral part of these statements.
23 Fujikura Annual Report 2011
137,402
2,318,100
$5,801,888
Consolidated Statements of Income
Fujikura Ltd. and its Consolidated Subsidiaries
For the Years Ended March 31, 2010 and 2011
Net sales
Cost of sales (Notes 9,10,11 and 12)
Gross profit
Selling, general and administrative expenses (Notes 9 and 10):
Packing and transportation
Salaries and benefits
Research and development
Other
Total selling, general and administrative expenses
Income from operations
Non-operating income:
Interest income
Dividend income
Foreign exchange gains
Equity in earnings of affiliates
Other
Total non-operating income
Non-operating expenses:
Interest expense
Loss on disposal of property, plant and equipment
Other
Total non-operating expenses
Ordinary income
Extraordinary gains:
Gain on sales of fixed assets (Note 14)
Gain on revision of retirement benefit plans
Reversal of allowance for doubtful accounts
Gain on liquidation of subsidiary
Gain on sales of investment securities
Other
Total extraordinary gains
Extraordinary losses䋺
Loss on devaluation of investment securities
Provision for surcharges (Note 8)
Loss from natural disaster
Business structure change (Note 11)
Effect from adoption of accounting standard for asset retirement obligations
Fixed asset maintenance and removal expenses (Note 13)
Loss on devaluation of investment in affiliates
Loss on devaluation of advance to unconsolidated subsidiar䌹
Loss on disposal of property, plant and equipment
Impairment losses (Note 16)
Other
Total extraordinary losses
Income before income taxes
Millions of yen
2010
2011
¥503,527
¥521,832
417,830
436,741
Thousands of
U.S. dollars (Note 3)
2011
$6,275,791
5,252,447
85,696
85,091
1,023,343
15,060
26,687
7,630
18,383
67,762
17,934
15,517
27,162
7,830
17,689
68,199
16,891
186,615
326,663
94,167
212,736
820,192
203,139
331
1,159
905
1,885
1,102
5,384
195
1,246
1,188
1,893
1,453
5,977
2,345
14,985
14,287
22,766
17,474
71,882
2,905
957
2,926
6,789
16,529
2,955
650
2,865
6,471
16,397
35,538
7,817
34,456
77,823
197,198
20
42
32
18
11
125
1,488
122
1,611
17,895
1,467
19,375
4,400
639
1,689
376
362
351
312
179
8,308
8,346
1,237
1,000
542
186
74
521
3,561
14,447
14,877
12,026
6,518
2,237
890
6,266
42,826
173,746
Income taxes: (Note 18)
Current
Deferred
Total income taxes
Income before non-controlling interests
Non-controlling interests in loss (income)
6,540
(1,202)
5,337
441
5,081
34
5,115
9,332
(50)
61,106
409
61,515
112,231
(601)
Net income
¥2,567
¥9,383
$112,844
Fujikura Annual Report 2011 24
Consolidated Statements of Comprehensive Income
Fujikura Ltd. and its Consolidated Subsidiaries
For the Years Ended March 31, 2010 and 2011
Income before non-controlling interests
Other comprehensive income
䇭Unrealized gains on investment securities, net of taxes
䇭Deferred gain (loss) on hedges, net of taxes
䇭Foreign currency translation adjustments
䇭Share of other comprehensive income of associates accounted for using equity method
Other comprehensive income
Comprehensive income
(Notes)
䇭Comprehensive income attributable to shares of the parent
䇭Comprehensive income attributable to minority interests
Millions of yen
2010 (Note14)
2011
¥9,332
The accompanying notes to the consolidated financial statements are an integral part of these statements.
25 Fujikura Annual Report 2011
Thousands of
U.S. dollars (Note 3)
2011
$112,233
-
(1,932)
113
(6,338)
(79)
(8,237)
1,094
(23,235)
1,359
(76,224)
(950)
(99,062)
13,157
-
1,414
(319)
17,005
(3,836)
Consolidated Statements of Changes in Net Assets
Fujikura Ltd. and its Consolidated Subsidiaries
㪝㫆㫉㩷㫋㪿㪼㩷㪰㪼㪸㫉㫊㩷㪜㫅㪻㪼㪻㩷㪤㪸㫉㪺㪿㩷㪊㪈㪃㩷㪉㪇㪈㪇㩷㪸㫅㪻㩷㪉㪇㪈㪈
Millions of yen
Shareholders' equity
Balance at March 31, 2009
Net income
Dividends paid
Purchase of treasury stock
Reissuance of treasury stock
Items other than changes in shareholders' equity
Balance at March 31, 2010
Net income
Dividends paid
Purchase of treasury stock
Reissuance of treasury stock
Change in scope of consolidation
Change in scope of affiliates under equity method
Items other than changes in shareholders' equity
Balance at March 31, 2011
Balance at March 31, 2009
Net income
Dividends paid
Purchase of treasury stock
Reissuance of treasury stock
Items other than changes in shareholders' equity
Balance at March 31, 2010
Net income
Dividends paid
Purchase of treasury stock
Reissuance of treasury stock
Change in scope of consolidation
Change in scope of affiliates under equity method
Items other than changes in shareholders' equity
Balance at March 31, 2011
Number of
shares issued
360,863,421
Common
stock
¥53,075
Additional
paid-in capital
¥54,957
-
360,863,421
53,075
54,957
360,863,421
¥53,075
Unrealized
gains (losses)
on investment
securities,
net of taxes
¥623
1,374
1,997
(1,955)
¥42
¥54,957
Total
Retained
Treasury shareholders'
earnings
stock
equity
¥84,491
(¥123)
¥192,402
2,567
2,567
(1,803) (1,803)
(16)
(16)
(0)
1
1
85,255
(137)
193,151
9,383
9,383
(1,803)
(1,803)
(17)
(17)
(0)
0
0
(92)
(92)
242
242
¥92,985
(¥154)
¥200,864
Millions of yen
Accumulated other comprehensive income
Total
Deferred gain
Foreign
accumulated
(loss) on
currency
other
Nonhedges,
translation
comprehensive controlling
net of taxes
adjustments
income
interests
(¥234)
(¥12,795)
(¥12,406)
¥9,346
227
(765)
835
2,459
(7)
(13,561)
(11,570)
11,805
312
(6,326)
(7,968)
(380)
¥305
(¥19,887)
(¥19,539)
¥11,425
Total net
assets
¥189,342
2,567
(1,803)
(16)
1
3,295
193,386
9,383
(1,803)
(17)
0
(92)
242
(8,349)
¥192,750
The accompanying notes to the consolidated financial statements are an integral part of these statements.
Fujikura Annual Report 2011 26
Thousands of U.S. dollars (Note 3)
Shareholders' equity
Balance at March 31, 2010
Net income
Dividends paid
Purchase of treasury stock
Reissuance of treasury stock
Change in scope of consolidation
Change in scope of affiliates under equity method
Items other than changes in shareholders' equity
Balance at March 31, 2011
Balance at March 31, 2010
Net income
Dividends paid
Purchase of treasury stock
Reissuance of treasury stock
Change in scope of consolidation
Change in scope of affiliates under equity method
Items other than changes in shareholders' equity
Balance at March 31, 2011
Number of
shares issued
360,863,421
Common
stock
$638,304
-
360,863,421
Unrealized
gains (losses)
on investment
securities,
net of taxes
$24,017
(23,512)
$505
$638,304
Retained
earnings
$1,025,316
112,844
(21,684)
Thousands of U.S. dollars (Note 3)
Accumulated other comprehensive income
Total
Deferred gain
Foreign
accumulated
(loss) on
currency
other
Nonhedges,
translation
comprehensive controlling
Total net
net of taxes
adjustments
income
interests
assets
($84)
($163,091)
($139,146)
$141,972 $2,325,749
112,844
(21,684)
(204)
0
(1,106)
2,910
3,752
(76,079)
(95,827)
(4,570)
(100,409)
$3,668
($239,170)
($234,985)
$137,402 $2,318,100
The accompanying notes to the consolidated financial statements are an integral part of these statements.
27 Fujikura Annual Report 2011
Total
Treasury shareholders'
stock
equity
($1,648) $2,322,922
112,844
(21,684)
(204)
(204)
(1)
0
0
(1,106) (1,106)
2,910
2,910
$660,938
$1,118,279
($1,852) $2,415,683
Additional
paid-in capital
$660,938
Consolidated Statements of Cash Flows
Fujikura Ltd. and its Consolidated Subsidiaries
For the Years Ended March 31, 2010 and 2011
Millions of yen
2010
2011
Cash flows from operating activities:
Income (loss) before income taxes
Depreciation and amortization
Loss on devaluation of investments in affiliates
Loss on devaluation of advance to unconsolidated subsidiaries and affiliates
Impairment losses
Amortization of goodwill
Increase in reserves and provisions
Interest and dividend income
Interest expenses
Equity in earnings of affiliates
Gain on sale of investment securities, net
Loss on devaluation of investment securities, net
Loss on disposal of property, plant and equipment
Gain on sale of property, plant and equipment, net
Changes in assets and liabilities:
Notes and accounts receivable, trade
Inventories
Notes and accounts payable, trade
Other, net
Sub-total
Interest and dividend income received
Interest paid
Surcharge paid
Income taxes paid
Net cash provided by operating activities
Cash flows from investing activities:
Payments for purchase of property, plant and equipment and other assets
Proceeds from sale of property, plant and equipment and other assets
Proceeds from sale of investment securities
Payments for purchases of investment securities
Payments for loans
Proceeds from collection of loan
Payments for acquisition of shares of entities newly consolidated
Acquisition, net of cash acquired
Payments for advance to unconsolidated subsidiaries and affiliates
Other, net
Net cash used in investing activities
Cash flows from financing activities:
Net increase (decrease) in short-term borrowings
Net increase (decrease䋩 in commercial paper
Proceeds from increase in long-term debt
Repayment of long-term debt
Payment for purchase of treasury stock
Cash dividends paid
Other, net
Net cash provided by (used in) financing activities
Effects of exchange rate changes on cash and cash equivalents
Changes in cash and cash equivalents
Cash and cash equivalents at beginning of year
Increase in cash and cash equivalents due to newly consolidated subsidiaries
Cash and cash equivalents at end of year 䋨Note17䋩
Thousands of
U.S. dollars
(Note 3)
2011
¥8,346
26,385
376
362
312
342
4,349
(1,490)
2,905
(1,885)
(11)
23
1,308
(20)
¥14,447
25,892
㧙
㧙
㧙
393
946
(1,441)
2,955
(1,893)
㧙
1,237
650
(1,488)
$173,746
311,389
㧙
㧙
㧙
4,726
11,377
(17,330)
35,538
(22,766)
㧙
14,877
7,817
(17,895)
335
(3,113)
9,718
419
48,664
2,037
(2,744)
㧙
(4,089)
43,867
(4,637)
(6,734)
(1,299)
(245)
28,782
2,678
(2,922)
(5,484)
(5,799)
17,255
(55,767)
(80,986)
(15,622)
(2,946)
346,146
32,207
(35,141)
(65,953)
(69,741)
207,517
(24,645)
1,201
78
(568)
(1,577)
2,133
㧙
(1,728)
(767)
416
(25,458)
(33,704)
2,380
㧙
(248)
(1,500)
1,926
(1,028)
㧙
(1,072)
1,478
(31,770)
(405,340)
28,623
㧙
(2,983)
(18,040)
23,163
(12,363)
㧙
(12,892)
17,775
(382,081)
(16,669)
(14,000)
10,000
(2,605)
(16)
(1,803)
(215)
(25,310)
(561)
(7,462)
60,232
901
¥53,671
2,457
㧙
15,585
(4,085)
(17)
(1,803)
(266)
11,869
(2,969)
(5,615)
53,671
1,160
¥49,216
29,549
187,432
(49,128)
(204)
(21,684)
(3,199)
142,742
(35,707)
(67,529)
645,472
13,951
$591,894
The accompanying notes to the consolidated financial statements are an integral part of these statements.
Fujikura Annual Report 2011 28
Notes to the Consolidated Financial Statements
Fujikura Ltd. and its Consolidated Subsidiaries
For the years ended March 31, 2010 and 2011
1. Basis of Presentation
Accounting principles
The accompanying Consolidated Financial Statements of Fujikura Ltd. (the “Company”) and its consolidated subsidiaries (together, the “Companies”)
are prepared on the basis of accounting principles generally accepted in Japan, which are different in certain respects, application and
disclosure requirements, from International Financial Reporting Standards, and are prepared by the Company as required by the Financial
Instruments and Exchange Act of Japan.
The Company adopted the “Practical Solution on Unification of Accounting Policies Applied to Foreign Subsidiaries for Consolidated Financial
Statements” (Accounting Standard Board of Japan ("ASBJ") PITF No. 18, May 17, 2006) effective for the fiscal year ended March 31, 2011
and made necessary adjustments for the preparation of the Consolidated Financial Statements.
In preparing the consolidated financial statements, certain reclassification and rearrangements have been made to the financial statements
filed with the Director of the Kanto Local Finance Bureau in Japan in order to present these statements in a form which is more familiar to readers of
these statements outside Japan.
2. Summary of Significant Accounting Policies
(a) Consolidation and investments in affiliates
The consolidated financial statements include the accounts of the Company and all significant subsidiaries (74 subsidiaries at March 31, 2010
and 71 subsidiaries at March 31, 2011). All significant intercompany transactions and accounts and unrealized intercompany profits are
eliminated in consolidation.
The difference between the cost and the underlying net equity of investment in consolidated subsidiaries at the time of acquisition is deferred
and amortized over a five-year period. Investments of 50% or less in companies over which the parent company does not have control but has the
ability to exercise significant influence, and investments in unconsolidated subsidiaries are generally accounted for by the equity method
(8 companies at March 31, 2010 and 9 companies at March 31, 2011). When the accounts of subsidiaries and affiliates are not significant in
relation to the Consolidated Financial Statements, they are carried at cost. The excess of the cost over the underlying net equity of investments
in unconsolidated subsidiaries and affiliates accounted for on an equity basis is deferred and amortized over a five-year period. Consolidated
net income includes the Company’s equity in current earnings of affiliates after elimination of unrealized intercompany profits.
Effective for the fiscal year ended March 31, 2011, the Company adopted, "Equity Method of Accounting for Investments" 䋨ASBJ Statement No.16,
March 10, 2008䋩 and "Practical Solution on Unification of Accounting Policies Applied to Associates Accounted for Using the Equity
Method"(PITF No.24, March 10, 2008). As a result, there was no financial impact on "Ordinary income" or "Income before income taxes"
in the Consolidated Statements of Income for the fiscal year ended March 31, 2011.
(b) Translation of foreign currency transactions and accounts
Foreign currency transactions are translated using the foreign exchange rates prevailing at the transaction dates. Current receivables
and payables denominated in foreign currencies are translated at the balance sheet date using current exchange rates. All asset and
liability accounts of foreign subsidiaries and affiliates are translated into Japanese Yen at current exchange rates at the respective
balance sheet date and all income and expense accounts of those subsidiaries are translated at the average exchange rate for
the fiscal year then ended.
Foreign currency financial statement translation differences are reported as a separate component of Net Assets in the Consolidated
Balance Sheets.
(c) Consolidated statement of cash flows
For the purpose of reporting cash flows, cash and cash equivalents include all highly liquid investments, with original maturities of
three months or less, that are readily convertible to known amounts of cash and are so near maturity that they present only an
insignificant risk of change in value because of changes in interest rates.
(d) Valuation of securities
Securities held by the Companies have been classified into the following categories depending on the purpose for which they are held:
Held-to-maturity debt securities:
These securities are carried at amortized cost. Any premium or discount arising on acquisition is amortized and recognized as an
adjustment to interest income / expense.
Available-for-sale securities:
These securities are investment securities expected to be held in the long term. Securities for which fair values are readily determinable
are carried at fair value with unrealized gains and losses, net of applicable income taxes being recorded in net assets. Securities for
which fair values are not readily determinable are recorded using the moving average cost.
(e) Inventories
Inventories are valued at the lower of cost or market, cost being determined mainly using the weighted average method.
Effective for the fiscal year ended March 31, 2011, the Company adopted, "Accounting Standard for Measurement of Inventories" 䋨ASBJ
Statement No.9, September 26, 2008䋩 for which the method applied todetermine cost of copper included in raw materials
has changed to the weighted average method from the Last-In First-Out method used previously .
As a result, "Income from operations" , "Ordinary income" and "Income before income taxes and minority interests" for the fiscal year
ended March 31, 2011 was increased by ¥12 million (US$144 thousand), respectively.
(f) Property, plant and equipment
Depreciation of property, plant and equipment is generally computed using the declining-balance method, except for buildings acquired on and
after April 1, 1998, which are depreciated using the straight-line method, using an estimate useful lives.
The estimated useful lives are generally as follows:
Buildings: mainly 50 years
Machinery and equipment: mainly 7 years
(g) Accounting for Lease
Finance leases are depreciated over their respective lease terms with no residual values.
(h) Allowance for doubtful accounts
Allowance for doubtful accounts provides for estimated uncollectible accounts at an amount specifically assessed and an amount
computed based on historical loss experience.
(i) Severance indemnities and pension plans
The severance indemnity plans of the Companies, which cover substantially all employees, provide for benefit payments determined
with reference to the employee’s current basic rate of pay, length of service, position in the respective Company and employment termination
circumstances. The plans also provide for additional benefits upon retirement at retirement age, death or for certain specified reasons.
The Company and certain consolidated subsidiaries have adopted non-contributory funded pension plans to provide the substituted
portion of the benefit payments established under the Companies' regulations for their employees. Under these pension plans, upon termination
of their employment, employees may elect for either a lump-sum payment or annuity payments.
The Company recognized and computed retirement benefits, including pension costs and the related liabilities, using an actuarial
appraisal approach known as the projected unit credit method. Under a defined benefit plan, the net pension cost for a period
includes the i) service costs, ii) interest costs, iii) expected return on plan assets, iv) amortization of unrecognized prior service costs and
v) amortization of unrecognized actuarial differences. Any difference between the net pension cost and the amount actually funded
for the period is reported as accrued severance indemnities or prepaid pension costs in the Consolidated Balance Sheets. In respect of
the policy for the amortization of prior service costs, the Companies amortize these over the period up to estimated remaining service period
of the employees.
Effective for the fiscal year ended March 31, 2010, the Company adopted, “Partial Amendments to Accounting Standard for Retirement Benefits
(Part3)”䋨ASBJ Statement No.19, July 31,2008). As a result, there was no financial impact on "income from operations" or "income before income
taxes and minority interests" in the Consolidated Statements of Income for the fiscal year ended March 31, 2010.
29 Fujikura Annual Report 2011
(j) Provision for directors' retirement benefits
The consolidated subsidiaries which have retirement benefit plan accrue the liabilities for their retirement benefits for directors and corporate auditors,
which is, in general, based upon the amounts required by the subsidiaries internal regulations .
(k) Provision for directors' bonuses
Provision for directors' bonuses is stated at the estimated amount of the bonuses to be paid to directors' based on services
provided for the fiscal year.
(l) Provision for repairs
Provision for repairs is recognized for future repair expenses based on annual production volumes.
(m) Allowance for investment loss
Allowance for investment loss is provided for anticipated losses due to decline of values associated with investment in affiliates,
considering financial conditions, etc.
(n) Provision for loss on guarantees
Provision for loss on guarantees is provided for anticipated losses by execution of guarantees, considering financial conditions in guaranteed companies.
(o) Provision for surcharge
Provision for surcharge is recorded at the expected loss resulting from the payment of the
surcharge due to the receipt of a (tentative) surcharge payment order based on the Antimonopoly Act.
(p) Accounting for long-term construction-type contracts
The percentage-of-completion method of accounting is applied for the construction contracts which fulfill the conditions that the outcome of the construction
activity is deemed certain during the course of the activity. Otherwise, the completed-contract method is applied.
(q) Derivative financial instruments
Derivative financial instruments, which include foreign currency forward exchange contracts and interest rate swap agreements are used as
a part of the Companies’ risk management of foreign currency and interest rate exposures underlying the normal course of the Companies'
operations.
Foreign currency exchange forward contracts:
The Companies enter into foreign currency forward exchange contracts to limit exposure to changes in foreign currency exchange rates
on accounts receivable and payable and cash flows generated from anticipated transactions denominated in foreign currencies.
For foreign currency forward exchange contracts, which are designated as hedges, the Company has adopted the accounting method where
by foreign currency denominated assets and liabilities are measured at the contract rate of the respective foreign currency forward exchange
contract. With respect to such contracts for anticipated transactions, the contracts are marked-to-market and the unrealized gains/losses are
deferred to the balance sheet and recorded in the income statement when the exchange gains/losses on the hedged items or transactions are
recognized.
Interest rate swap agreements:
The Companies enter into interest rate swap agreements in order to limit the Companies’ exposure in respect of adverse fluctuations in
interest rates underlying the debt instruments.
The related interest differentials paid or received under the interest rate swap agreements are recognized in interest expense over
the term of the agreements.
(r) Adoption of Accounting Standard for Asset Retirement Obligations and its Implementation Guidance
Effective the fiscal year ended March 31, 2011, the Company adopted, "Accounting Standard for Asset Retirement Obligations " 䋨ASBJ
Statement No.18, March 31, 2008䋩 and "the Guidance on Accounting Standard for Asset Retirement Obligations "(Guidance No.21, March 31,
2008).
As a result, "Income from operations" for the fiscal year ended March 31, 2011 was decreased by ¥10 million (US$120thousand),
Ordinary income for the fiscal year ended March 31, 2011 was decreased by ¥12 million (US$144 thousand) and "Income before income taxes"
for the fiscal year ended March 31, 2011 was decreased by ¥86 million (US$1,034 thousand).
(s) Adoption of Accounting Standards for Business Combinations, etc.
Effective for the fiscal year ended March 31, 2011, the Company adopted "Accounting Standard for Business Combinations " 䋨ASBJ Statement
No.21, December 26, 2008䋩, "Accounting Standard for Consolidated Financial Statements "(ASBJ Statement No.22, December 26, 2008),
"Partial amendments to Accounting Standard for Research and Development Costs "(ASBJ Statement No.23, December 26, 2008),
"Revised Accounting Standard for Business Divestitures"(ASBJ Statement No.7, December 26, 2008), "Revised Accounting Standard for
Equity Method of Accounting for Investments "(ASBJ Statement No.16, December 26, 2008) and "Revised Guidance on Accounting Standard for
Business Combinations and Accounting Standard for Business Divestitures"(ASBJ Guidance No.10, December 26, 2008).
(t) Income taxes
Income taxes are computed using the asset and liability approach. Under this approach, deferred tax assets and liabilities are recognized
for the expected future tax consequences of temporary differences between the financial reporting basis and tax basis of assets and liabilities.
Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that the tax benefits will not be realized.
The Company files its return under the consolidated tax filing system.
(u) Appropriations of retained earnings
Appropriations of retained earnings reflected in the accompanying Consolidated Financial Statements are recorded upon approval by
the shareholders.
(v) Reclassification
Certain accounts in the Consolidated Financial Statements for the year ended March 31, 2010 have been reclassified to conform to
the 2011 presentation.
(w) Changes in presentation
Effective for the fiscal year ended March 31, 2011, based on the “Accounting Standard for Consolidated Financial Statements”(ASBJ Statement
No.22 of December 26, 2008), the Company adopted "Cabinet Office Ordinance Partially Revising Regulation on Terminology, Forms and
Preparation of Financial Statements" (Cabinet Office Ordinance No.5, March 24, 2009). As a result, "Income before minority interests" is
included in the consolidated financial statements for the fiscal year ended March 31, 2011.
(x) Other basis for presentation of consolidated financial statements
Amounts less than 䎂1 million have been omitted. As a result, the total shown in the consolidated financial statements and notes thereto do
not necessarily agree with the sum of the individual account balances.
Fujikura Annual Report 2011 30
3. United States Dollar Amounts
Amounts in U.S. dollars are included solely for the convenience of readers outside Japan. The rate of exchange on March 31, 2011
(¥83.15=U.S.$1.00), has been used for translation purpose. The inclusion of such amounts is not intended to imply that Japanese Yen
have been or could be readily converted, realized or settled in U.S. dollars at this rate or any other rate.
4.Financial instruments
(a) Information on financial instruments
Policies
The Companies enter into financing arrangements (mainly through bank loans or corporate bonds) based on the planned capital expenditures
of the Metal Cables and the Optical Fiber Cables manufacturing businesses. The Companies invest in highly secured financial assets
using available cash and finance their short-term working capital needs through bank loans. The Companies use derivative transactions within
predetermined transaction volumes to limit the risk of significant fluctuations in foreign currency exchange rates and interest rates. The
Companies do not enter into derivative transactions for speculative purposes.
Details of financial instruments and related risks
Trade notes and accounts receivable are exposed to customer credit risk. Also, trade receivables denominated in foreign currencies, which
are derived from the global business expansion, are exposed to fluctuation in foreign currency exchange rates, however, the exposure is
mitigated by entering into foreign forward exchange contracts.
Investment securities consist mainly of equity securities, which are exposed to market price fluctuation risks.
Trade notes and accounts payable have payment terms within one year. Also, within these accounts there are foreign currency
denominated balances derived from the import of raw materials and therefore the balances are exposed to fluctuations in foreign currency
exchange rates. However, such balances are typically offset by the accounts receivable balances denominated in the same currencies.
Borrowings and Corporate Bonds are used primarily for capital expenditures and have maturity dates within five years subsequent to the
balance sheet date. Certain borrowing contracts are based on variable, or floating, interest rates, which are exposed to fluctuation risk and
are hedged via interest rate swap agreements.
Derivative transactions are comprised primarily of foreign forward exchange contracts aiming to hedge foreign currency exchange rate
fluctuation risk in trade receivables/payables denominated in foreign currencies and of interest rate swap agreements aiming to hedge
interest rate fluctuation risk in bank loans.
Risk management over financial instruments
㽲Credit risk management (risk of customers' default risk, etc.)
The Company periodically monitors major customers' financial conditions and performs customer specific aging analyses. In addition,
the Company monitors doubtful accounts due to the current economic difficulities in accordance with the " credit management policy".
The consolidated subsidiaries and affiliates are also required to conform with the " credit management policy" of the Company.
In order to mitigate credit risks to the greatest extent possible when dealing with derivative transactions, the Companies trade with
financial institutes that maintain high credit ratings.
The financial assets being exposed to credit risks recorded in the Consolidated Balance Sheets represent amounts of maximum
exposures to credit risk as of March 31, 2010 and March 31, 2011.
㽳Market risk management (risk of fluctuations in foreign currency rates, interest rates, etc.)
The Company and certain consolidated subsidiaries generally use foreign forward exchange contracts to limit foreign currency exchange
rate fluctuation risk in trade receivables/payables denominated in foreign currencies. Depending on the foreign currency market condition,
the Companies use forward exchange contracts for trade receivables denominated in foreign currencies generated from highly probable
forecast export transactions. Also, the Company and certain consolidated subsidiaries use interest rate swap agreements to limit interest
rate fluctuation risk associated with bank loans.
In relation to investment securities, the Companies continuously monitors the related market values and financial condition of the
issuers while also taking into consideration their business relationships with the issuers.
In executing and managing the daily operations of derivative transactions, the Companies and certain consolidated subsidiaries regularly
monitor transaction balances/volumes and profit/loss status. Such information is periodically reported to the responsible management team
and is audited by certain administration divisions. Also, prior approvals by an Executive Officer of the Company are generally required to
enter into significant transactions, transaction modifications or applications for the use of new financial instruments.
㽴Liquidity risk management for financing activities (risk of inability to repay on due date)
The Company manages liquidity risk by preparing/updating cash flow forecasts (led by the finance division) based on relevant information
reported from the individual divisions and by entering into commitment line agreements.
Supplementary information on the fair value of financial instruments
The fair value of financial instruments is based on market values as well as reasonably determined values in situations where the market fair
value is unavailable. The determination of such values is based on certain assumptions, which may result in different outcomes if other
assumptions are applied. Also, the following information 䇸(b) Fair values of Financial Instruments 䇹 does not include market risk of derivative
transactions.
31 Fujikura Annual Report 2011
(b) Fair values of Financial Instruments
The fair value of financial instruments at March 31, 2010 and 2011, their associated book value as recorded in the Consolidated Financial Statements and
the net differences are as follow:
Millions of yen
2010
Cash and deposits
Consolidated
Fair
amount
value
50,753
-
118,343
118,343
-
Securities and investment securities
35,013
33,795
(1,218)
Notes and accounts payable, trade
74,575
74,575
-
Short-term borrowings
49,149
49,149
-
Income taxes payable
2,262
2,262
Bond
30,000
30,417
417
Long-term borrowings(*1)
73,053
73,803
749
109
(211)
109
(211)
Notes and accounts receivable, trade
Less: Allowance for doubtful accounts
Total
Derivative Instruments(*2)
Non-hedge derivative instruments
Designated hedge instruments
50,753
Difference
119,415
(1,072)
-
-
(*1)䇭¥3,223 million (US$34,644 thousand) of the Long-term borrowings which matures within 1 year and are recorded in "Short-term borrowings"
in the consolidated balance sheets are included in "Long-term borrowings" above.
(*2)䇭Net receivables and liabilities related to the derivative transactions are presented net and items with a net liability position are presented in ( ).
Millions of yen
2011
Cash and deposits
Consolidated
Fair
amount
value
45,459
Notes and accounts receivable, trade
122,645
Less: Allowance for doubtful accounts
(1,149)
Total
121,495
Thousands of U.S. dollars
Difference
45,459
Consolidated
Fair
amount
value
-
546,711
Difference
546,711
-
1,474,985
(13,818)
121,495
-
1,461,155
1,461,155
-
Securities and investment securities
31,834
29,789
(2,045)
382,850
358,256
(24,594)
Notes and accounts payable, trade
72,702
72,702
-
874,348
874,348
-
Short-term borrowings
50,321
50,321
-
605,183
605,183
-
Income taxes payable
1,754
1,754
-
21,094
21,094
-
Bond(*1)
30,000
30,720
720
360,794
369,453
8,659
Long-term borrowings(*2)
84,345
85,067
721
1,014,372
1,023,055
8,671
30
(53)
30
(53)
361
(637)
361
(637)
Derivative Instruments(*3)
Non-hedge derivative instruments
Designated hedge instruments
-
-
(*1)䇭¥10,000 million (US$120,265 thousand) of the bonds which matures within 1 year and are recorded in "Current Portion of Bonds"
in the consolidated balance sheets are included in "Bond" above.
(*2)䇭¥8,039 million (US$96,686 thousand) of the Long-term borrowings which matures within 1 year and are recorded in "current portion of Short-term borrowings"
in the consolidated balance sheets are included in "Long-term borrowings" above.
(*3)䇭Net receivables and liabilities related to the derivative transactions are presented net and items with a net liability position are presented in ( ).
Note 1: Method used to determine fair value of financial instruments, securities and derivative transactions:
(1)Cash and deposits
The fair values of these items approximate cost due to their short term maturities.
(2)Notes and accounts receivable, trade
The fair values of these items approximate cost because of their short term maturities. For certain accounts receivables, the Companies enter into
foreign exchange forward contracts for which a simplified method of determinig fair value is applied and allowable under JGAAP. The fair values
of such receivables are determined on a aggregate basis with the related foreign exchange forward contract.
(3)Securities and investment securities
The fair value of equity securities are determined using quoted market prices for those securities. The fair value of debt securities are determined
using quoted market prices or the prices provided by the financial institutions with which the related transactions are entered.
(4)Notes and accounts payable, trade, (5) Short-term borrowings and (6) Income taxes payable
The fair values of these items approximate cost due to their short term maturities.
Fujikura Annual Report 2011 32
(2)Notes and accounts receivable, trade
The fair values of these items approximate cost because of their short term maturities. For certain accounts receivables, the Companies enter into
foreign exchange forward contracts for which a simplified method of determinig fair value is applied and allowable under JGAAP. The fair values
of such receivables are determined on a aggregate basis with the related foreign exchange forward contract.
(3)Securities and investment securities
The fair value of equity securities are determined using quoted market prices for those securities. The fair value of debt securities are determined
using quoted market prices or the prices provided by the financial institutions with which the related transactions are entered.
(4)Notes and accounts payable, trade, (5) Short-term borrowings and (6) Income taxes payable
The fair values of these items approximate cost due to their short term maturities.
(7) Bond
The fair value of bonds issued by the Company is determined using quoted market prices.
(8) Long-term borrowings
The fair value of these items are determined based on the present value of the principal and interest discounted at the interest rate to be charged
for a newly entered into similar borrowing. For certain long-term debt with a floating interest rate, the Companies enter into interest swaps for
which a simplified method is applied and allowable under JGAAP. Such Long-term borrowings is combined with the related interest swaps and their fair
values are determined based on the present value of the principal and interest after the swap is discounted at the interest rate to be charged for
a similar new entered into borrowing.
(9) Derivative instruments
The Companies use a forward exchange rate for foreign exchange forward contracts. Foreign exchange forward contracts are combined with
the accounts receivable designated as hedged items and are treated as one unit. Their fair values are included in related accounts receivable.
Also, interest swaps for which a simplified method allowed under JGAAP is applied are combined with the long-term debts designated as
hedged item and are treated as one unit. Their fair values are included in long-term debt.
Note 2 : Financial instruments for which estimation of the fair value is extremely difficult
2010
Millions of yen
Description
Amount recorded in consolidated
balance sheets
Non-public companies
2011
Description
Non-public companies
¥23,603
Millions of yen
Thousands of U.S. dollars
Amount recorded in consolidated
Amount recorded in consolidated
balance sheets
balance sheets
¥21,756
$261,648
These items are not included in "(3) Security and Investment securities" because it is extremely difficult to determine their fair value as
there is no quoted market price for these companies available and there is an inability to estimate the future cash flows of these companies.
33 Fujikura Annual Report 2011
Note 3 : Receivable and held-to-maturity investment securities 2010 and 2011 are recorded in balance sheet securities of which the aggregate
annual maturities are as follows:
1year
Year ended March 31, 2010
Cash and deposits
Notes and accounts receivable, trade
Securities and investment securities
Held-to-maturity investment securities
Total
50,753
119,415
Millions of yen
Due after 1
Due after 5
year through years through
5 years
10 years
-
4,039
¥174,208
-
65
¥65
Due after 10
years
59
¥59
The annual maturities of bonds and long-term debts during the five years ending March 31, 2015 are as follows:
Bonds
Millions of yen
Year ending March 31,
2011
¥10,000
2012
10,000
2013
2014
2015
¥10,000
Long-term borrowings
Millions of yen
Year ending March 31,
2011
2012
2013
2014
2015
¥6,484
16,036
22,895
5,667
¥18,745
1year
Year ended March 31, 2011
Cash and deposits
Notes and accounts receivable, trade
Securities and investment securities
Held-to-maturity investment securities
Total
45,459
122,429
4,000
¥171,889
1year
Year ended March 31, 2011
Cash and deposits
Notes and accounts receivable, trade
Securities and investment securities
Held-to-maturity investment securities
Total
546,711
1,472,387
48,106
$2,067,216
Millions of yen
Due after 1
Due after 5
year through years through
5 years
10 years
215
53
¥269
The annual maturities of bonds and Long-term borrowings during the five years ending March 31, 2016 are as follows:
Bonds
Millions of yen
Year ending March 31,
2012
¥10,000
2013
2014
2015
2016
¥10,000
Long-term borrowings
Millions of yen
Year ending March 31,
2012
2013
2014
2015
2016
¥17,653
23,867
5,867
18,803
¥10,113
-
-
Thousands of U.S. dollars
Due after 5
Due after 1
year through years through
10 years
5 years
2,586
637
$3,235
Due after 10
years
-
Due after 10
years
-
-
-
Thousands of
U.S. dollars
$120,265
$120,265
Thousands of
U.S. dollars
$212,303
287,035
70,559
226,133
$121,624
Fujikura Annual Report 2011 34
5. Investment Securities
Held-to-maturity investment securities at March 31, 2010 and 2011 whose aggregate cost,
gross unrealized losses , gross unrealized losses and fair values are as follows:
Cost
Gross unrealized losses
Fair value
Millions of yen
2010
2011
¥4,164
¥4,053
(10)
¥4,164
(¥10)
Thousands of
U.S. dollars
2011
$48,743
(120)
($120)
Available-for-sale investment securities at March 31, 2010 and 2011 consist primarily of equity securities whose aggregate cost,
gross unrealized gains, gross unrealized losses and fair values are as follows:
Cost
Gross unrealized gains
Gross unrealized losses
Fair value
Millions of yen
2010
2011
¥21,686
¥20,620
3,660
2,742
(1,067)
(2,727)
¥24,279
¥20,635
Thousands of
U.S. dollars
2011
$247,986
32,977
(32,796)
$248,166
Available-for-sale investment securities sold during the year ended March 31, 2010 and 2011 are immaterial.
Available-for-sale investment securities losses on valuation during the year ended March 31, 2010 are immaterial.
Available-for-sale investment securities losses on valuation during the year ended March 31, 2011
are ¥1,237 million(US$14,878 thousand).
Investments in unconsolidated subsidaries and affiliates at March 31, 2010 and 2011 are as follows:
Investments securities
Investments and other assets,other
Millions of yen
2010
2011
¥27,118
¥25,197
4,502
4,739
¥31,620
¥29,936
Thousands of
U.S. dollars
2011
$303,031
56,993
$360,024
Millions of yen
2010
2011
Thousands of
U.S. dollars
2011
6. Short-term Borrowings, Long-term Debt
Short-term borrowings at March 31, 2010 and 2011 are as follows:
Loans, principally from banks, with weighted-average interest rates of
1.8% and 1.9% per year at March 31, 2010 and 2011, respectively .
35 Fujikura Annual Report 2011
¥49,149
¥49,149
¥50,321
¥50,321
$605,183
$605,183
Long-term debt at March 31, 2010 and 2011 are as follows:
Thousands of
U.S. dollars
2011
Millions of yen
2010
2011
Loans from banks and other financial institutions with mortgage, or
other collateral and/or guarantees by other banks, due date from 2011 to 2028
with weighted-average interest rates of 1.6% and 1.7 % at March 31,
2010 and 2011, respectively
¥73,054
¥84,345
$1,014,372
1,014
711
8,551
30,000
104,068
30,000
115,056
360,794
1,383,716
(3,223)
(377)
(3,600)
¥100,468
(8,039)
(10,000)
(326)
(18,366)
¥96,690
(96,686)
(120,265)
(3,921)
(220,878)
$1,162,838
Lease obligation
Unsecured straight bonds issued from March 19, 2007 to January 31, 2008
with interest rates ranging from 1.2% to 1.8% due date from March 19, 2012
to January 31, 2018
Less: portion due date within one year
Long term borrowings
Bond
Lease obligation
Total
Losses on impaired assets during the fiscal year ended March 31, 2011 are immaterial.
The Companies’ assets pledged as collateral for short-term borrowings and other interest-bearing debts at March 31,
2010 and 2011 are as follows:
Thousands of
U.S. dollars
2011
Millions of yen
2010
2011
Carrying values of property, plant and equipment:
Buildings and structures
Machinery, equipment and vehicles
Land
Investment securities
¥916
304
1,178
65
¥602
250
1,002
$7,240
3,007
12,051
-
-
The annual maturities of long-term debts 䇭during the five years ending March 31, 2016 are as follows:
Long term borrowings
Year ending March 31,
2013
2014
2015
2016
Millions of yen
Lease obligation
Year ending March 31,
2013
2014
2015
2016
Millions of yen
Lease obligation
Year ending March 31,
2013
2014
2015
2016
Millions of yen
¥17,653
23,867
5,867
18,803
Thousands of
U.S. dollars
$212,303
287,035
70,559
226,133
¥217
122
32
11
Thousands of
U.S. dollars
$2,610
1,467
385
132
¥10,000
Thousands of
U.S. dollars
$120,265
-
-
7. Other Long-term Liabilities
Other than the loans and debts included in note 6 , interest-bearing debts, which consisted of guarantee money received amounting to
¥5,776 million (US$69,465 thousand), were recorded as a part of other long-term liabilities in the Consolidated Balance Sheets as of March 31, 2011.
8.Provision for Surcharge
Provision for surcharge is recorded for expected loss resulting from the payment of the surcharge due to the receipt
of a (tentative) surcharge payment order based on the Antimonopoly Act .
9. Research and Development Costs
Research and development costs included in Selling, general and administrative expenses and Cost of sales, in aggregate, for the years ended
March 31, 2010 and 2011, amounted to ¥13,491million and ¥13,924 million (US$167,456 thousand), respectively.
Fujikura Annual Report 2011 36
10. Severance indemnities and Pension Plans
Accrued severance indemnities for employees:
Benefit obligations
Fair value of plan assets
Un䌦unded status
Millions of yen
2010
2011
¥(67,129)
¥(65,976)
44,618
43,669
(22,510)
(22,306)
Thousands of
U.S. dollars
2011
$(793,458)
525,183
(268,262)
Unrecognized actuarial loss, net
Unrecognized prior service costs, net
Trust funds for severance plans
Net amount recognized
24,271
(2,852)
18,430
17,339
23,335
(2,596)
18,119
16,552
280,637
(31,221)
217,907
199,062
Prepaid pension costs included in the consolidated balance sheet
Accrued severance indemnity reported
in the consolidated balance sheet
24,148
23,950
288,034
¥(6,809)
¥(7,397)
$(88,960)
The components of net period pension costs for employees for the years ended March 31, 2010 and 2011 are as follows:
Service costs
Interest costs
Expected return on plan assets
Amortization of unrecognized prior service costs
Amortization of unrecognized actuarial losses
Total
Gain on revision of retirement benefit plan
Net periodic pension costs
Millions of yen
2010
2011
¥2,155
¥2,212
1,248
1,249
(604)
(666)
(232)
(239)
2,767
2,504
5,335
5,060
(42)
¥5,292
¥5,060
Thousands of
U.S. dollars
2011
$26,603
15,021
(8,010)
(2,874)
30,114
60,854
$60,854
Assumptions used in the calculation of the above net periodic pension costs as of March 31, 2010 and 2011 are as follows:
Method of attributing the projected benefits
to periods of service
Discount rates
Rates of expected return on plan assets
Amortization period for unrecognized prior service costs
Amortization period for unrecognized actuarial differences
2010
Term straight-line
basis
Mainly 1.9%
Mainly 1.6%
Mainly 15 years
Mainly 15 years
2011
Term straight-line
basis
Mainly 1.9%
Mainly 1.6%
Mainly 15 years
Mainly 15 years
11. Business structure change
Business restructuring charges recorded as a component of extraordinary losses are comprised of ¥375 million of expenses resulting
from the introduction of an early retirement program primarily in the Electronics & Auto segment for the year ended March 31, 2010,
and ¥186 million(US$2,236 thousand) of expenses from recognization of the business structure in the Electronics & Auto segment
for the year ended March 31,2011.
12.Inventories
Inventories are valued at the lower of cost or market and the associated losses on inventory devaluation have been included
in "Cost of sales" for the years ended March 31 2010 and 2011 in the amounts of ¥404 million and ¥421 million(US$5,064 thousand),
respectively.
13.Fixed asset maintenance and removal expenses
The amount recorded in "Fixed asset maintenance and removal expenses "as acomponent of extraordinary losses for the year ended March 31,2010
is comprised of maintenance and removal costs incurred as a result of canges in the use of fixed assets located in the Fukagawa area.
14.Gain on sales of fixed assets
A gain a sale of land totaling 1,488 million yen has been recorded during the year ended March 31,2011.
37 Fujikura Annual Report 2011
15.Consolidated Statements of Comprehensive Income
For the Year Ended March 31, 2010
䋨Additional䇭information䋩
Effective for the fiscal year ended March 31, 2011, the Company adopted, "Accounting Standard for Presentation of Comprehensive Income"
䋨ASBJ Statement No.25, June 30, 2010䋩.
Millions of yen
2010
Comprehensive income
䇭Comprehensive income attributable to shares of the parent
䇭Comprehensive income attributable to minority interests
Other comprehensive income
‫ޓ‬Unrealized gains on investment securities, net of taxes
‫ޓ‬Deferred gain (loss) on hedges, net of taxes
‫ޓ‬Foreign currency translation adjustments
‫ޓ‬Share of other comprehensive income of associates accounted for using equity method
Other comprehensive income
¥3,403
458
¥3,861
¥1,305
(107)
(769)
423
¥852
16. Impairment of Fixed Assets
For the Year Ended March 31, 2010
(1) Location: Fujikura Electronics Wuxi Ltd. (Jiangsu, China)
Use: HDD manufacturing equipment
Type: Machinery, others
Asset-impairment losses: Machinery and Others 䎂110 million
Background leading to the recognition of asset-impairment losses : Certain equipment had become idle due to the realignment of the production
base among the group entities.
Recoverable amount: Net salable value
Calculation method for recoverable amount: Stated at net salable value or nil due to difficulty of conversion or sale.
(2) Location: Yonezawa Electric Wire(Guangzhou) Co.,Ltd.(Guangdong, China)
Use: Electric wire manufacturing equipment
Type: Machinery, others
Asset-impairment losses: Machinery and Others 䎂181 million
Background leading to the recognition of asset-impairment losses: Expected future cash flow had fallen substantially below book values.
Recoverable amount: Utility value
Calculation method for recoverable amount: Stated at utility value or nil.
Grouping method:
The Companies grouped long-lived assets into asset groups by merchandise category.
Losses on impaired assets during the fiscal year ended March 31, 2011 is immaterial.
17. Supplementary Cash Flow Information
A reconciliation of cash and cash equivalents in the Consolidated Statement of Cash Flows and account balances in the Consolidated
Balance Sheets at March 31, 2010 and 2011 are as follows:
Cash and deposits
Negotiable certificates of deposits reported in securities
Deposits with maturity of over three months
Cash and cash equivalents
Millions of yen
2010
2011
¥50,753
¥45,459
4,000
4,000
(1,082)
(242)
¥53,671
¥49,216
Thousands of
U.S. dollars
2011
$546,711
48,106
(2,910)
$591,894
Fujikura Annual Report 2011 38
18. Income Taxes
The Company and its domestic subsidiaries are subject to a number of different income taxes which, in aggregate, indicate a nominal
statutory tax rate in Japan of approximately 40% for the years ended March 31, 2010 and 2011.
A reconciliation between the nominal statutory income tax rate and the effective income tax rate in the accompanying consolidated
statements of income for the years ended March 31, 2010 and 2011 are as follows:
Nominal statutory tax rate
Increase in taxes resulting from permanent differences
Provision for surcharge payment
Foreign tax credit and payment
Intercompany elimination of dividends
Equity earnings
Tax exemption in foreign tax jurisdiction
Valuation allowance
Effect of lower tax rates at overseas subsidiaries
Tax credit
Other
Effective income tax rate
2010
40.0 %
8.9
20.8
8.2
6.8
(9.1)
(10.5)
13.7
(12.0)
(1.4)
(1.6)
63.8 %
2011
40.0 %
0.0
2.8
0.1
2.1
(5.2)
(2.1)
8.4
(8.3)
(1.6)
(0.7)
35.5 %
The significant components of deferred tax assets and liabilities at March 31, 2010 and 2011 are as follows:
Millions of yen
2010
2011
Deferred tax assets:
Inventory revaluation
Bonus accrual
Elimination of intercompany profits on inventories
Enterprise taxes
Net operating losses carried forward
Loss on devaluation of investment securities
Depreciation
Allowance for doubtful accounts
Impairment losses
Elimination of intercompany profits on fixed assets
Loss on disposal of fixed assets
Foreign tax credit carried forward
Other
Gross deferred tax assets
Less: valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Special tax-purpose reserve for deferred gain on sale of property
Unrealized gains on investment securities
Prepaid pension costs
Other
Total deferred tax liabilities
Net deferred tax assets
Thousands of
U.S. dollars
2011
¥655
2,088
208
202
7,484
3,823
1,561
358
2,303
629
1,287
4,264
5,448
30,317
(22,012)
8,305
¥696
2,157
325
225
7,950
4,369
963
432
1,632
629
1,158
4,243
4,790
29,577
(22,101)
7,475
$8,370
25,941
3,909
2,706
95,610
52,544
11,581
5,195
19,627
7,565
13,927
51,028
57,607
355,707
(265,797)
89,898
1,167
631
1,039
493
3,331
¥4,974
1,058
12,724
805
618
2,482
¥4,993
9,681
7,432
29,850
$60,048
-
Net deferred tax assets (liabilities) included in the consolidated balance sheets are as follows:
Current assets-Deferred tax assets
Fixed assets-Deferred tax assets
Current liabilities—Other
Non-current liabilities—Deferred tax liabilities
Net deferred tax assets
Millions of yen
2010
2011
¥4,141
¥4,197
3,088
2,789
(57)
(184)
(2,197)
(1,808)
¥4,974
¥4,993
Thousands of
U.S. dollars
2011
$50,475
33,542
(2,213)
(21,744)
$60,050
19. Contingent Liabilities
Thousands of
U.S. dollars
Millions of yen
Guarantees for loans borrowed / notes issued by:
2010
2011
2011
Employees
¥759
¥667
$8,022
Viscas corporation, affiliated company
7,178
8,165
98,196
3,054
¥10,993
1,917
¥10,750
23,055
$129,284
Other unconsolidated subsidiaries and affiliates
39 Fujikura Annual Report 2011
20. Derivative Instruments
For the Year Ended March 31, 2010
ԘDerivative no hedges
Notional
amount
2010
Foreign forward exchange contracts
Sell
USD
JPY
EUR
䇭 Others
Buy
USD
MXN
䇭 Others
Total
Interest Rate Swaps
Pay Fixed interest / Rec. Floating interest
Total
Millions of yen
More than
Fair
one year of
value
Notional
amount
Gain
(loss)
2,389
678
247
219
-
14
23
2
(3)
14
23
2
(3)
5,615
864
787
¥10,799
-
149
(27)
(15)
¥143
149
(27)
(15)
¥143
780
¥780
209
¥209
(32)
(¥32)
(32)
(¥32)
ԙDesignated‫ޓ‬instrument hedges
Notional
amount
2010
Special treatment of interest rate swaps
Interest Rate Swaps
Long-term debt
Pay Fixed interest / Rec. Floating interest
Transfer process of foreign forward exchange contracts
Foreign forward exchange contracts
Accounts receivable, trade
Sell
USD
EUR
Processing method in principle
Foreign forward exchange contracts
Accounts receivable, trade
Sell
USD
EUR
Total
Millions of yen
More than
one year of
Notional
amount
Fair
value
46,000
45,000
-
15,760
511
-
-
7,492
243
¥70,008
261
¥45,261
(210)
(0)
(¥211)
For the Year Ended March 31, 2011
ԘDerivative no hedges
Notional
amount
2011
Foreign forward exchange contracts
Sell
USD
UAE dirham
䇭㩷㪦㫋㪿㪼㫉㫊
Buy
USD
MXN
䇭㩷㪦㫋㪿㪼㫉㫊
Currency Swaps
Pay TB / Rec USD
Pay MR / Rec USD
Total
Interest Rate Swaps
Pay Fixed interest / Rec. Floating interest
Total
Millions of yen
More than
Fair
one year of
value
Notional
amount
Gain
(loss)
Notional
amount
Thousands of U.S. dollars
More than
Fair
one year of
value
Notional
amount
Gain
(loss)
3,400
504
260
-
24
2
(4)
24
2
(4)
40,890
6,061
3,127
-
289
24
(48)
289
24
(48)
6,149
1,404
541
-
47
16
5
47
16
5
73,951
16,885
6,506
-
565
192
60
565
192
60
3,006
793
¥16,061
1,803
¥1,803
(19)
(36)
¥35
(19)
(36)
¥35
36,152
9,537
$193,157
-
(229)
(433)
$421
(229)
(433)
$421
117
¥117
-
(4)
(¥4)
(4)
(¥4)
1,407
$1,407
-
(48)
($48)
(48)
($48)
21,684
$21,684
Fujikura Annual Report 2011 40
ԙDesignated‫ޓ‬instrument hedges
Notional
amount
2011
Special treatment of interest rate swaps
Interest Rate Swaps
Long-term debt
Pay Fixed interest / Rec. Floatin
Millions of yen
More than
one year of
Notional
amount
54,000
3,828
480
¥76,413
Fair
value
Fair
value
49,000
-
649,429
589,296
-
-
-
210,812
6,915
-
-
-
(38)
(15)
(¥53)
46,037
5,773
$918,978
-
(457)
(180)
($637)
Transfer process of foreign forward exchange contracts
Foreign forward exchange contracts
Accounts receivable, trade
Sell
USD
17,529
EUR
575
Processing method in principle
Foreign forward exchange contracts
Accounts receivable, trade
Sell
USD
EUR
Total
Thousands of U.S. dollars
More than one
Notional
year of Notional
amount
¥49,000
$589,296
21. Supplementary Information for the Consolidated Statements of Net Assets
For the Year Ended March 31, 2010
(a) Type and number of outstanding shares
Year ended March 31, 2010
Balance at
beginning of year
Increase in shares
during the year
Type of shares
Issued stock:
360,863
Common stock
360,863
Total
Treasury stock:
Common stock (* 1,2)
254
Total
254
(*1) Treasury stock increased due to the repurchase of 37,000 shares.
(*2) Treasury stock decreased due to the sale of shares of 3,000 shares.
Thousands of shares
Balance at end
of year
Decrease in shares
during the year
䋭
䋭
䋭
䋭
37
37
3
3
360,863
360,863
288
288
(b) Dividends
(1) Dividends paid to shareholders:
Resolution
Date of approval
June 26, 2009
November 2, 2009
approved by
Annual general meeting
of shareholders
Board of directors
Type of
Amount
(Millions of
shares
Yen)
Common
901
stock
Common
stock
901
Amount
Shareholders'
Effective
per share
cut-off date
date
(Yen)
March 31,
2.5
2009
June 29, 2009
2.5
September
30, 2009
December
2,2009
(2) Dividends with a shareholders' cut-off date during the current fiscal year but an effective date subsequent to the current fiscal year:
Type of
Amount
Paid from
Amount
Shareholders'
Resolution
per share
(Millions of
approved by
cut-off date
Date of approval
shares
(Yen)
Yen)
June 29, 2010
Common
901
Retained
2.5
Annual general meeting
March 31, 2010
stock
of shareholders
earnings
41 Fujikura Annual Report 2011
Effective
date
June 30,
2010
For the Year Ended March 31, 2011
(a) Type and number of outstanding shares
Year ended March 31, 2011
Balance at
beginning of year
Increase in shares
during the year
Type of shares
Issued stock:
Common stock
360,863
Total
360,863
Treasury stock:
Common stock (* 1,2)
287
Total
287
(*1) Treasury stock increased due to the repurchase of 42,000 shares.
(*2) Treasury stock decreased due to the sale of 1,000 shares.
Thousands of shares
Balance at end
of year
Decrease in shares
during the year
䋭
䋭
䋭
䋭
42
42
1
1
360,863
360,863
329
329
(b) Dividends
(1) Dividends paid to shareholders:
Date of approval
June 29, 2010
November 1, 2010
Resolution
Type of
approved by
shares
Annual general meeting
of shareholders
Board of directors
Amount
Amount
(Millions of (Thousands of
U.S. dollars)
Yen)
Common
901
$10,836
stock
Common
stock
901
$10,836
Amount
per share
(Yen)
2.5
2.5
Amount
Shareholders'
per share
cut-off date
(U.S.dollars)
March 31,
$0.03
2010
$0.03
September
30, 2010
Effective
date
June 30,
2010
December
2,2010
(2) Dividends with a shareholders' cut-off date during the current fiscal year but an effective date subsequent to the current fiscal year:
Type of
Amount
Amount
Paid from
Amount
Amount
Shareholders'
Resolution
per share
(Millions of (Thousands of
approved by
per share (Yen)
cut-off date
Date of approval
shares
U.S. dollars)
(U.S.dollars)
Yen)
June 29, 2011
Common
1,262
$15,177
Retained
3.5
$0.04 March 31,
Annual general meeting
2011
stock
earnings
of shareholders
Effective
date
June 30,
2011
22. Investment and Rental Property
For the Year Ended March 31, 2010
Effective for the fiscal year ended March 31,2011, the Companies adopted the"Accounting Standard for Disclosures about Fair Value"(ASBJ Statement No.20,
November 28,2008) and "Guidance on Accounting Standard for Disclosures about Fair Value of Investment and Rental Property"(ASBJ Guidance
No.23,November 28, 2008)
The Companies own office buildings (including land) for rent in Tokyo and other districts. Gains and losses generated from these investments
and rental properties were ¥3,445 million for the fiscal year ended March 31, 2010. Majority of rental revenues were recorded in Net Sales and majority
of rental costs were recorded in Cost of sales in the Consolidated Statements of Income.
The investment and rental property at March 31,2010, including in the Consolidated Balance Sheets and respective increases and decreases fair value
are as follows;
Millions of yen
Amounts in the consolidated balance sheet(*1)
Balance at
Increase and decrease in
Balance at end
Fair value at end
beginning of year
property during the year(*2)
of year
of year(*3)
¥32,721
¥13,551
¥46,273
¥110,474
(*1) Amounts in the consolidated balance sheet were computed based on acquisition costs after deducting accumulated depreciation and
impairment charges.
(*2) The primarily increase in property during the year includes the Acquisition of office buildings for rent (¥14,184 million).
(*3) Fair value at end of year was primarily based on "Real Estate Appraisal Standards".
For the Year Ended March 31, 2011
The Companies own office buildings (including land) for rent in Tokyo and other districts. Gains and losses generated from these investments
and rental properties were ¥5,146 million ($61,888 thousand) for the fiscal year ended March 31, 2011. Majority of rental revenues were recorded
in Net Sales and majority of rental costs were recorded in Cost of sales in the Consolidated Statements of Income.
The investment and rental property at March 31,2011, including in the Consolidated Balance Sheets and respective increases and decreases fair value
are as follows;
Millions of yen
Amounts in the consolidated balance sheet(*1)
Balance at
Increase and decrease in
beginning of year
property during the year(*2)
¥46,273
(¥2,048)
Balance at end
of year
¥44,225
Fair value at end
of year(*3)
¥107,371
Thousands of U.S. dollars
Amounts in the consolidated balance sheet(*1)
Balance at
Increase and decrease in
Balance at end
Fair value at end
beginning of year
property during the year(*2)
of year
of year(*3)
$556,500
(¥24,630)
$531,870
$1,291,293
(*1) Amounts in the consolidated balance sheet were computed based on acquisition costs after deducting accumulated depreciation and
impairment charges.
(*2) The primarily decrease in property during the year includes the depreciation of office buildings for rent (¥2,658 million(US$31,966 thousand)).
(*3) Fair value at end of year was primarily based on "Real Estate Appraisal Standards".
Fujikura Annual Report 2011 42
23. Business Combinations
Effective April 1, 2010, a business combination involving the subsidiaries listed below was completed
in accordance with the laws of Kingdom of Thailand, under which the six subsidiaries other than FIMT Ltd.
listed below have been merged into Fujikura Electronics Thailand Ltd. ("FETL"), a newly established
wholly-owned subsidiary of the Company, which has succeeded all of the assets and liabilities of these
six subsidiaries. Certain assets and liabilities of FIMT Ltd. have also been transaferred to FETL which have
been accounted for as purchase transactons.
Subsidiaries
Fujikura (Thailand) Ltd.
PCTT Ltd.
LTEC Ltd.
Fujikura Engineering (Thailand) Ltd.
FMOT Ltd.
Fujikura Shoji (Thailand)Co., Ltd.
FIMT Ltd.
Major businesses
Manufacturing and distribution of
electronics parts
Manufacturing and distribution of FPCs
Manufacturing and distribution of
electronics parts and optical devices
Manufacturing and distribution of molds
Providing Infra-structure shared services
to the Fujikura Group companies in
Thailand
Distribution of materials used in
electronics parts
Distribution of electronics parts and
financing
The Company has completed this business combination and integrated the operations of the seven subsidiaries
located in Thailand, representing major manufacturing facilities of the Companies in order to strengthen
competitive edge of its technologies and cost controls in the electronics and automotive businesses which the
global competitions have been intensified.
These merger and business transfer tranactions have been accounted for as a business combination under
a common control.
43 Fujikura Annual Report 2011
24. Segment Information
(Business segments)
As of March 31, 2010, the Real Estate business previously included in “Other” was reported as a separate business segment, which
reflects increasing significance of the business.
Definitions of the five segments for the year ended March 31, 2010 are as follows:
The Telecommunications segment deals with optical fiber cables, splicers, etc.
The Electronics & Auto segment deals with FPCs, electric wire, automobile parts, etc.
The Metal Cable & Systems segment deals with telecommunication cables, power cables, control/instrumentation cables, magnetic wire,
construction, etc.
The Real estate segment deals with real estate, rentals of commercial properties, etc.
The Other segment deals with new products, etc.
The segment information of the Companies for the year ended March 31, 2010 is presented below.
For the year ended March 31, 2010
Millions of yen
Business segments
Sales to outside
customers
Inter-segment sales
Total sales
Operating expenses
Operating profit 䋨loss䋩
Total assets
Depreciation and
amortization
Impairment loss
Capital expenditures
Telecommuni- Electronics Metal Cable
cations
& auto
& Systems Real estate
¥107,319
112
107,432
98,799
8,633
80,257
5,034
¥7,390
¥208,446
73
208,520
204,827
3,693
133,583
¥174,508
3,145
177,654
175,976
1,678
110,993
14,356
312
¥8,565
3,228
¥7,172
6
7,179
3,761
3,417
45,942
¥2,519
¥503,527
8,557
512,084
494,018
18,066
380,717
443
-
¥14,741
Total
¥6,079
5,218
11,298
10,654
643
9,939
1,059
-
Other
¥232
Elimination of
inter-segment
sales/profit or Consolidated
common assets
total
24,122
312
¥33,449
¥503,527
(8,557)
(8,557)
(8,425)
(131)
109,032
2,262
¥1,149
503,527
485,592
17,934
489,749
26,385
312
¥34,598
Notes:
Common assets included in "Elimination of inter-segment sales/profit or common assets" for the years ended March 31, 2010
amounted to ¥142,552 million.
Common assets mainly consisted of investment securities , assets related to research and development and administrative divisions
of the Company.
Fujikura Annual Report 2011 44
(Geographical segments)
The operations of the Companies are classified into geographical areas as follows:
Japan, Asia (Thailand, Singapore, Malaysia, China and other ) and Other (U.S.A., U.K, Spain.).
For the year ended March 31, 2010
Asia
Other
Millions of yen
Elimination of
inter-segment
sales/profit or
Total
common assets
Geographic segments
Sales to external
customers
Japan
¥295,618
¥136,525
¥71,383
¥503,527
Inter-segment sales
Total sales
Operating expenses
Operating profit 䋨loss䋩
Total assets
102,316
397,934
389,921
8,013
¥324,216
89,432
225,957
218,661
7,295
¥114,182
1,353
72,736
69,995
2,741
¥40,804
193,101
696,628
678,578
18,050
¥479,202
Consolidated
total
¥503,527
(193,101)
(193,101)
(192,985)
(116)
¥10,546
503,527
485,592
17,934
¥489,749
Notes:
Common assets included in "Elimination of inter-segment sales/profit or common assets" for the years ended March 31, 2010
amounted to ¥142,552 million.
Common assets mainly consisted of investment securities and assets related to the research and development and administrative divisions
of the Company.
(Overseas sales)
Export sales by the Companies and sales by overseas subsidiaries (after elimination of inter-company sales) for the years ended March 31,
2010 are summarized as follows:
2010
Overseas sales
Consolidated net sales
Percentage of overseas sales to
consolidated net sales
45 Fujikura Annual Report 2011
Asia
¥156,501
31.1%
Millions of yen
Others
Total
¥82,051
¥238,552
503,527
16.3%
47.4%
(Segment Information)
The Company has applied “Accounting Standard for Disclosures about Segments of an Enterprise and the Related Information” (ASBJ Statement No. 17,
issued on March 27, 2009) and “Guidance on Accounting Standard for Disclosures about Segments of an Enterprise and Related Information”
(ASBJ Guidance No. 20, issued on March 21, 2008) from the fiscal year ended March 31, 2011.
1.Summary of reporting segments
The Group’s reporting segments are components of the Group for which separate financial statements are available that are regularly evaluated
by the management in deciding how to allocate the management resources and in assessing performance.
The Group classifies its reporting segments into the five categories of “Telecommunications,” “Electronics & Auto,” “Metal Cable & Systems,”
“Real Estate” and “Other Business,” taking into consideration the similarities of production etc.
Definitions of the five segments for the year ended March 31, 2011 are as follows:
The Telecommunications segment deals with optical fiber cables, splicers, etc.
The Electronics & Auto segment deals with FPCs, electric wire, automobile parts, etc.
The Metal Cable & Systems segment deals with telecommunication cables, power cables, control/instrumentation cables, magnetic wire, construction, etc.
The Real estate segment deals with real estate, rentals of commercial properties, etc.
The Other segment deals with warehousing/transportation, other services, etc.
2.Basis of calculation for sales, profits or losses, assets, liabilities and other items by reporting segments
“Notes to the consolidated financial statements.”
Profits by reporting segment are based on operating income.
Inter-segment sales / transfers are based on actual market prices.
3.Information on sales, profit or loss, assets, liabilities, and other items byreporting segment
For the year ended March 31, 2010
Reporting segments
Sales to outside
customers
Inter-segment sales
Total sales
Segment profit (loss)
Segment total assets
Depreciation and
amortization
Impairment loss
Capital expenditures
Telecommunications
¥107,319
112
107,432
8,633
80,257
5,034
¥7,390
Millions of yen
Electronics Metal Cable
& auto
& Systems Real estate
¥208,446
73
208,520
3,693
133,583
¥174,508
3,145
177,654
1,678
110,993
14,356
312
¥8,565
¥2,519
¥7,172
6
7,179
3,417
45,942
3,228
Total
¥6,079
5,218
11,298
643
9,939
1,059
-
Other
443
-
¥14,741
¥232
Consolidated
total
adjustment
¥503,527
8,557
512,084
18,066
380,717
(8,557)
(8,557)
(131)
109,032
¥503,527
24,122
312
¥33,449
¥1,149
2,262
-
503,527
17,934
489,749
26,385
312
¥34,598
Notes:
The adjustment of a loss of 131 million yen in “Segment profit (loss)”
The adjustment of 109,032 million yen in “Segment total assets” represents elimination of inter-segment transactions common assets not allocated
to each reporting segment 142,552 million yen elimination of inter-segment transactions 33,520 million yen.
Common assets mainly consisted of assets related to investment securities, research and development and administrative divisions of Compay.
The adjustment of 2,262 million yen to “Depreciation and amortization” represents depreciation and amortization associated with common assets.
The adjustment of 1,149 million yen to “Capital expenditures” represents increase in common assets.
Segment profit (loss) is reconciled with operating income reported in the Consolidated Statements of Income.
For the year ended March 31, 2011
Reporting segments
Sales to outside
customers
Inter-segment sales
Total sales
Segment profit 䋨loss䋩
Segment total assets
Depreciation and
amortization
Impairment loss
Capital expenditures
Telecommunications
¥112,358
193
112,551
12,357
74,268
4,715
18
¥5,698
Millions of yen
Electronics Metal Cable
& auto
& Systems Real estate
¥195,117
107
195,227
(175)
133,577
12,582
139
¥10,229
¥195,400
2,672
198,073
(257)
105,936
3,122
¥11,453
8
11,462
4,840
43,358
¥2,105
Total
¥7,501
7,352
14,854
437
10,298
2,845
-
Other
445
-
¥839
¥327
adjustment
Consolidated
total
¥521,832
10,334
532,166
17,203
367,439
(10,334)
(10,334)
(311)
114,988
¥521,832
521,832
16,891
482,427
23,710
157
¥19,201
2,181
18
¥2,054
25,892
176
¥21,255
-
Thousands of U.S. dollars
Business segments
Sales to outside
customers
Inter-segment sales
Total sales
Operating profit 䋨loss䋩
Total assets
Depreciation and
amortization
Impairment loss
Capital expenditures
Telecommunications
Electronics Metal Cable
& auto
& Systems Real estate
$1,351,269 $2,346,566 $2,349,970
2,321
1,287
32,135
1,353,590
2,347,889
2,382,117
148,611
(2,105)
(3,091)
893,181
1,606,458
1,274,035
56,705
216
$68,527
151,317
1,672
$123,019
37,547
$137,739
96
137,847
58,208
521,443
$6,275,791
124,281
6,400,072
206,891
4,418,990
5,352
-
$10,090
Total
$90,210
88,419
178,641
5,256
123,848
34,215
-
$25,316
Other
$3,933
285,147
1,888
$230,920
adjustment
Consolidated
total
$6,275,791
(124,281)
(124,281)
(3,740)
1,382,898
6,275,791
203,139
5,801,888
-
26,230
216
$24,702
311,389
2,117
$255,622
Notes:
Adjustment of a loss of 311 million yen(US$ 3,745 thousand) in “Segment profit (loss)” represents elimination of inter-segment transactions.
The adjustment of 114,988 million yen (US$ 1,382,898 thousand) in "Segment total assets" represents common assets not allocated
to each reporting segment䇭156,581 million yen(US$ 1,883,115 thousand) and elimination of inter-segment transactions
41,593 million yen(US$ 500,216 thousand).
Common assets mainly consisted of assets related to investment securities, research and development and administrative divisions of Compay.
The adjustment of 2,181 million yen(US$ 26,230 thousand) to “Depreciation and amortization” represents depreciation and amortization associated with common assets.
The adjustment of 18 million yen(US$ 216 thousand) to an increase in common assets.
The adjustment of 2,054 million yen(US$ 24,7102 thousand) to“Capital expenditures” represents an increase in common assets.
Segment profit (loss) is reconciled with operating income reported in the Consolidated Statements of Income.
Fujikura Annual Report 2011 46
(Geographical segment information)
Sales
2011
Sales to external customers
Japan
¥307,595
Millions of yen
Asia
Others
¥133,521
¥80,715
Total
¥521,832
Japan
$3,699,278
Thousands of U.S. dollars
Asia
Others
$1,605,785
$970,716
Total
$6,275,791
Japan
¥102,378
Millions of yen
Thailand
Others
¥25,903
¥20,851
Total
¥149,133
Japan
$1,231,245
Thousands of U.S. dollars
Asia
Others
$311,521
$250,764
Total
$1,793,542
Tangible fixed assets
2011
Tangible fixed assets
(Major customer information)
This information has been omitted as there were no customers whom the Group individually recorded external sales representing 10% or more of consolidated net sales for the year ended March 31,2011
47 Fujikura Annual Report 2011
25. Related Party Transactions
The tables below summarilzes the related part transactions with unconsolidated affiliated companies and affiliated companies accounted for
using the equity method for the year ended March 31:
2010
(Millions of yen)
Financial
Amount
Relations with Description of Amount of
Description of
Share of
Relationship
Name of
Location
Paid-intransaction transactions
statement outstanding at
related
company
Capital or
business
voting rights
end of year
(Note 4)
line-item
(%)
parties
Advance
(Note 4)
Affiliated
VISCAS
Shinagawa,
12,100 Metal cable
Directly
Supply of raw Supply of raw
8,386 Other current
4,796
company
Corporation Tokyo
and systems owned (50%) materials
materials for
assets
value (Note
from the
8,989 Accounts
3,708
and sales of Purchase of
raw materials
payable
products to
the Company (Note 2)
Concurrent
Guarantees
7,178
(Note 3)
service as
director
5,696 Accounts
3,619
Affiliated
Unimac Ltd. Inabe, Mie
480 Metal cable
Directly
Supply of raw Supply of raw
materials
receivable
company
and systems owned (45%) materials
(Note 2)
from the
Company and
sales of
products to
the Company
2011
Relationship
Affiliated
company
Affiliated
company
2011
Relationship
Affiliated
company
Affiliated
company
Name of
company
Location
VISCAS
Corporation
Shinagawa,
Tokyo
Unimac Ltd.
Inabe, Mie
Name of
company
Location
VISCAS
Corporation
Shinagawa,
Tokyo
Unimac Ltd.
Inabe, Mie
Paid-inCapital or
Advance
12,100 Metal cable
and systems
480 Metal cable
and systems
Paid-inCapital or
Advance
(Millions of yen)
Amount
outstanding at
end of year
(Note 4)
7,967 Other current
4,727
assets
Relations with Description of Amount of
Description of
Share of
related
transaction transactions
business
voting rights
parties
(Note 4)
(%)
Directly
Supply of raw
owned (50%) materials
from the
and sales of
products to
the Company
Concurrent
service as
director
Directly
Supply of raw
owned (45%) materials
from the
Company and
sales of
products to
the Company
Supply of raw
materials for
value (Note
Purchase of
raw materials
(Note 2)
Guarantees
(Note 3)
Supply of raw
materials
(Note 2)
Financial
statement
line-item
9,026 Accounts
payable
8,165
3,871
7,202 Accounts
receivable
-
3,746
䋨Thousands of U.S. dollars䋩
Financial
Amount
statement outstanding at
line-item
end of year
(Note 4)
95,815 Other current
56,849
assets
Description of
Share of
Relations with Description of Amount of
business
voting rights
related
transaction transactions
(%)
parties
(Note 4)
145,520 Metal cable
and systems
5,773 Metal cable
and systems
Directly
Supply of raw
owned (50%) materials
from the
and sales of
products to
the Company
Concurrent
service as
director
Directly
Supply of raw
owned (45%) materials
from the
Company and
sales of
products to
the Company
Supply of raw
materials for
value (Note
Purchase of
raw materials
(Note 2)
Guarantees
(Note 3)
Supply of raw
materials
(Note 2)
108,551 Accounts
payable
98,196
86,615 Accounts
receivable
46,554
-
45,051
Terms and conditions of the above transactions and the policy to determine the terms and conditions:
(Note) 1.
For supply of raw materials for value, terms and conditions were determined with consideration of market prices.
2.
For purchase and supply of raw materials, terms and conditions were determined based on calculation reference to
market prices and negotiation for each transactions.
3.
The Company provided guarantees for borrowings from banks and for fulfillment of contracts.
4.
Consumption taxes are not included in the amounts of transactions but is included in the amount outstanding at year-end.
Fujikura Annual Report 2011 48
26. Per share information
Per share:
Net income (loss) - primary
Net income (loss) - fully diluted
Cash dividends
Net assets per share
Basis for computation of per share data:
Net income (loss)
Net income (loss) attributable to common shareholders
Number of weighted average shares
Yen
2010
¥7.1
5.0
503.5
2011
¥26.0
6.0
502.9
Millions of yen
2010
2011
¥2,567
¥2,567
¥9,383
¥9,383
360,590,310
360,556,617
U.S. dollars
2011
$0.313
0.072
6.05
Thousands of
U.S. dollars
2011
$112,844
$112,844
27. Subsequent Events
In February 2010, the Japan Fair Trade Commission completed its on-site inspection at the Company for suspicion of violating antitrust law with
respect to the production and sales of automotive wire harnesses. The U.S. antitrust authority has also started its investigation around the same time.
On June 30, 2011, the Company received from the Japan Fair Trade Commission the draft cease and desist order and the draft order for payment of
surcharge for this matter and has recorded 1,180 million yen (US$14,191 thousand) of the surcharge during the first quarter period ended June 30, 2011.
49 Fujikura Annual Report 2011
Fujikura Annual Report 2011 50
Global Network
U.S.A. & Mexico
Europe & Others
Asia
8
3
1
2
17
12
22
18
20
4
7
19
6
5
10
9 11
21
13
16
14
15
Region
U.S.A.
Mexico
Company Name
Region
1
Fujikura America, Inc.
Thailand
2
America Fujikura Ltd.
DDK (Thailand) Ltd.
AFL Telecommunications LLC.
Fujikura SHS Ltd.
3
Fujikura Automotive America LLC.
Yoneden (Thailand) Ltd.
4
Fujikura Automotive Mexico, S. de R.L. de C.V.
Southeast
Asia
AFL Telecommunications de Mexico, S. de R.L. de C.V.
China
5
Fujikura (China) Co., Ltd.
13
14
Fujikura Electronics (Thailand) Ltd.
Fujikura Federal Cables Sdn. Bhd.
Fujikura Malaysia Sdn. Bhd.
15
Fujikura Asia Ltd.
16
Fujikura Fiber Optics Vietnam Ltd.
Fujikura Electronics Shanghai Ltd.
DDK VIETNAM LTD.
DDK (Shanghai) Co., Ltd.
YONEZAWA VIETNAM LTD.
Fujikura Hengtong Aerial Cable System Ltd.
Korea
Company Name
6
Nanjing Fujikura Fiberhome Optical Cable Co., Ltd.
7
Fujikura FiberHome Opto-Electronics Material Technology Co,.Ltd.
8
Fujikura Changchun Ltd.
9
Fujikura Zhuhai Co., Ltd.
10
Yonezawa Electric Wire (Guangzhou) Co., Ltd.
11
Fujikura Hong Kong Ltd.
12
Fujikura Korea Automotive Ltd.
Europe
17
Fujikura Europe Ltd.
AFL Telecommunications Europe Ltd.
18
Fujikura Europe GmbH
Fujikura Automotive Europe GmbH
AFL Telecommunications GmbH
Fujikura Automotive Europe S.A.U.
Fujikura Automotive Romania, S.R.L.
Fujikura Automotive Morocco, S.A.
Joint Stock Company Moskabel-Fujikura
*Please refer to the following for information about Fujikura's Global Network:
http://www.fujikura.co.jp/eng/corporate/network-o1.html
51 Fujikura Annual Report 2011
Main Consolidated Subsidiaries
Percentage of Equity
Ownership including
Indirect Ownership
Company Name
Paid-in Capital
(Millions)
As of March 31, 2011
Major Lines of Business
Nishi Nippon Electric Wire & Cable
Co., Ltd.
60.7%
¥960
Yonezawa Electric Wire Co., Ltd.
92.8%
¥1,022
Optical fiber cables and optical connection parts,
automotive wire harnesses, electric wires and
cables, and power distribution equipment
DDK Ltd.
86.6%
¥1,075
Connectors
Optical fiber cables, optical fiber cables with
connectors, electric wires and cables
US$102
Optical fiber cables, Arc Fusion Splicers, optical
measuring instruments, optical fibers and cables
with connectors and optical parts, automotive
wire harnesses, OPGWs and engineering
100.0%
THB5,552
FPCs, various electronic wires, tape wires, metal
domes, heat sinks, micro heat pipes, optical
connectors, optical couplers, HDD components,
membrane switches and coil assemblies
96.5%
RMB84
Automotive wire harnesses and components
Fujikura Electronics Shanghai Ltd.
100.0%
RMB97
Assembling of FPCs
Fujikura Automotive Europe S.A.U.
100.0%
EUR10
Automotive wire harnesses and components
DDK (Thailand) Ltd.
86.6%
THB730
Shinshiro Cable, Ltd.
60.7%
¥480
America Fujikura Ltd.
Fujikura Electronics (Thailand) Ltd.
Fujikura Zhuhai Co., Ltd.
100.0%
Investor Information
Connectors
Electric wires and cables
As of March 31, 2011
Major Shareholders
Head Office
5-1, Kiba 1-chome, Koto-ku, Tokyo 135-8512, Japan
URL: www.fujikura.co.jp/eng/
Number of
Ratio of
Shares Held Shareholding
(Thousands)
(%)
Japan Trustee Services Bank, Ltd. (Trust account)
35,886
9.94
The Master Trust Bank of Japan, Ltd. (Trust account)
19,682
5.45
Mitsui Life Insurance Company Limited
10,192
2.82
Japan Trustee Services Bank, Ltd.
(Account of Retirement Benefit Trust for the Chuo
Mitsui Trust and Banking Company, Limited)
9,777
2.71
Number of Shareholders
BBH Boston Custodian for Vanguard
International Value Fund
9,385
2.60
Independent Auditors
National Mutual Insurance Federation of
Agricultural Cooperatives
8,600
2.38
Sumitomo Mitsui Banking Corporation
8,456
2.34
The Shizuoka Bank, Ltd.
7,713
2.14
Japan Trustee Services Bank, Ltd. (Trust account 9)
6,897
1.91
Mitsui Sumitomo Insurance Co., Ltd.
6,891
1.91
Year of Foundation
1885
Date of Incorporation
March 18, 1910
Common Stock
Authorized:
Issued:
Capital:
1,190,000,000 shares
360,863,421 shares
¥53,075,807,507
34,315
PricewaterhouseCoopers Aarata
Further Information
For further information on this annual report, please
contact the Investor Relations Group at the Head Office.
Contact
Investor Relations Group
Tel: +81-03-5606-1112
Fax: +81-03-5606-1539
E-mail: wwwadmin@fujikura.co.jp
Fujikura Annual Report 2011 52
Fujikura Ltd.
ANNUAL REPORT 2011
5-1, Kiba 1-chome, Koto-ku, Tokyo 135-8512, Japan
Tel: +81-3-5606-1030
Fax: +81-3-5606-1502
URL: http://www.fujikura.co.jp
Awabuki (Sweet Viburnum) tree
commemorating the founding of
the Company
Even after 130 years with Fujikura,
we still treat it with great care.
Printed in Japan
Annual Report
Year Ended March 31, 2011