Murata Manufacturing : Annual Securities Report 2023

Disclaimer: This document is a translation of the audited Japanese original, which has been filed with the Director of the Kanto Local Finance Bureau of Japan pursuant to the Financial Instruments and Exchange Act of Japan. This document does not contain or constitute any guarantee and the Company will not compensate any losses and/or damage stemming from actions taken based on this translation. In the case that there is any discrepancy between the Japanese original and this document, the Japanese original is assumed to be correct.

Annual Securities Report

(The 88th Fiscal Year)

From April 1, 2023 to March 31, 2024

Murata Manufacturing Co., Ltd.

No. E01914

Cover			Contents
Part I	Corporate Information	1
I	Overview of the Company	1
1.	Key financial data	1
	(1)	Consolidated financial data, etc	1
	(2)	Management indicators of reporting company	3
2.	History	.................................................................................................................................................................................	4
3.	Description of business	6
4.	Information on subsidiaries and associates	8
5.	Employees	16
II	Business Overview	19
1.	Management policies, business environment and issues to be addressed, etc	19
2.	Concept and initiatives regarding sustainability	33
3.	Business and other risks	46
4.	Analysis of financial position, business results and cash flow status by management	56
5.	Material contracts	61
6.	Research and development activities	62
III	Information on Facilities	63
1.	Overview of capital investments	63
2.	Major facilities	63
3.	Plan for the installation and disposal of facilities	66
IV	Information on Reporting Company	67
1.	Information on the Company's stock	67
	(1)	Total number of shares and other related information	67
	(2)	Information on stock acquisition rights and others	67
	(3)	Status of exercise of moving strike convertible bonds	67
	(4)	Changes in the total number of issued shares, share capital, etc	67
	(5)	Shareholding by shareholder category	68
	(6)	Status of major shareholders	69
	(7)	Information on voting rights	71
2.	Status of the acquisition of treasury stock	72
3.	Dividend policy	74
4.	Status of corporate governance	75
	(1)	Overview of corporate governance	75
	(2)	Officers	83
	(3)	Audit status	92
	(4)	Remuneration for officers	95
	(5)	Information on shareholdings	100
V.	Financial Information	104
1.	Consolidated Financial Statements, etc	105
	(1)	Consolidated Financial Statements	105
		1) Consolidated Statement of Financial Position	105
		2) Consolidated Statement of Profit or Loss and Consolidated Statement of Comprehensive Income	107
		3) Consolidated Statement of Changes in Equity	109
		4) Consolidated Statement of Cash Flows	110
	(2)	Others	166
2.	Non-consolidated Financial Statements, etc	167
	(1)	Non-consolidated Financial Statements	167
		1)	Non-consolidated Balance Sheet	167
		2) Non-consolidated Statement of Income	169
		3)	Non-consolidated Statement of Shareholders' Equity	170
		4)	Supplementary schedules	177
	(2)	Components of major assets and liabilities	177
	(3)	Others	177
VI. Outline of Share-related Administration of Reporting Company	178
VII. Reference Information of Reporting Company	179
1.	Information about parent of reporting company	179
2.	Other reference information	179
Part II	Information about Reporting Company's Guarantor, etc	180

Audit Report

Cover
Document filed	Annual Securities Report
Applicable law	Article 24, Paragraph (1) of the Financial Instruments and Exchange Act
Filed to	Director-General of the Kanto Local Finance Bureau
Filing date	June 27, 2024
Fiscal year	The 88th Fiscal Year (From April 1, 2023 to March 31, 2024)
Company name	Kabushiki Kaisha Murata Seisakusho
Company name in English	Murata Manufacturing Co., Ltd.
Title and name of representative	Norio Nakajima, President and Representative Director
Address of head office	10-1, Higashikotari 1-chome,Nagaokakyo-shi, Kyoto, Japan
Phone No.	[phone]
Contact person	Masanori Minamide, Representative Director, Executive Vice President, Director
	of Corporate Unit
Contact address	10-1, Higashikotari 1-chome,Nagaokakyo-shi, Kyoto, Japan
Phone No.	[phone]
Contact person	Masanori Minamide, Representative Director, Executive Vice President, Director
	of Corporate Unit
Place where available for public inspection	Tokyo Stock Exchange, Inc.
	(2-1 Nihonbashi Kabuto-cho,Chuo-ku, Tokyo, Japan)

Part I Corporate Information

I Overview of the Company 1. Key financial data

(1) Consolidated financial data, etc.
			IFRS
Fiscal year
	As of	87th	88th
		transition date
Year end		April 1, 2022	March 2023	March 2024
Revenue	(Millions	-	1,686,796	1,640,158
of yen)
Profit before tax	(Millions	-	302,683	239,404
of yen)
Profit attributable to owners of parent	(Millions	-	243,946	180,838
of yen)
Comprehensive income attributable to	(Millions	-	292,168	290,454
owners of parent	of yen)
Equity attributable to owners of parent	(Millions	2,239,679	2,359,985	2,556,147
of yen)
Total assets	(Millions	2,804,081	2,858,303	3,037,895
of yen)
Equity attributable to owners of parent	(Yen)	1,166.81	1,249.22	1,353.01
per share
Basic earnings per share	(Yen)	-	128.64	95.72
Diluted earnings per share	(Yen)	-	-	-
Ratio of equity attributable to owners	(%)	79.9	82.6	84.1
of parent
Profit ratio to equity attributable to	(%)	-	10.6	7.4
owners of parent
Price earnings ratio	(Times)	-	20.83	29.50
Net cash provided by operating	(Millions	-	277,641	489,637
activities	of yen)
Net cash used in investing activities	(Millions	-	(151,416)	(201,571)
of yen)
Net cash used in financing activities	(Millions	-	(182,271)	(165,321)
of yen)
Cash and cash equivalents at end of	(Millions	512,072	469,406	622,007
year	of yen)
Number of employees	(Persons)	77,581	73,164	73,165

(Notes) 1. Amounts of less than one million yen are rounded to the nearest million yen.

1. The consolidated financial statements of the Companies have been prepared in accordance with IFRS Accounting Standards (hereinafter, "IFRS") since the 88th fiscal year.
2. Diluted earnings per share is not stated since there are no dilutive potential shares.
3. The Company implemented a three-for-one common stock split on October 1, 2023. Equity attributable to owners of parent per share and basic earnings per share were calculated on the assumption that the relevant stock split had been implemented on the transition date.

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Fiscal year			U.S. GAAP
	84th	85th	86th	87th
Year end		March 2020	March 2021	March 2022	March 2023
Net sales	(Millions	1,534,045	1,630,193	1,812,521	1,686,796
of yen)
Income before income taxes	(Millions	254,032	316,417	432,702	314,895
of yen)
Net income attributable to Murata	(Millions	183,012	237,057	314,124	253,690
Corporation	of yen)
Comprehensive income attributable to	(Millions	149,950	293,766	419,069	310,777
Murata Corporation	of yen)
Murata Corporation's shareholders'	(Millions	1,694,104	1,920,805	2,263,596	2,402,511
equity	of yen)
Total assets	(Millions	2,250,230	2,462,261	2,809,171	2,872,763
of yen)
Murata Corporation's shareholders'	(Yen)	882.63	1,000.71	1,179.27	1,271.73
equity per share
Net income attributable to Murata	(Yen)	95.35	123.50	163.65	133.78
Corporation per share
Diluted net income attributable to	(Yen)	-	-	-	-
Murata Corporation per share
Shareholders' equity ratio	(%)	75.3	78.0	80.6	83.6
Net income attributable to Murata	(%)	11.1	13.1	15.0	10.9
Corporation / Shareholders' equity
Price earnings ratio	(Times)	19.13	23.86	16.53	20.03
Net cash provided by operating	(Millions	350,334	373,571	421,458	276,278
activities	of yen)
Net cash used in investing activities	(Millions	(284,431)	(150,275)	(212,300)	(157,850)
of yen)
Net cash provided by (used in)	(Millions	17,650	(118,189)	(117,505)	(173,708)
financing activities	of yen)
Cash and cash equivalents at end of	(Millions	302,320	407,699	512,072	469,406
year	of yen)
Number of employees	(Persons)	74,109	75,184	77,581	73,164

(Notes) 1. Amounts of less than one million yen are rounded to the nearest million yen.

1. Until the 87th fiscal year, the consolidated financial statements of the Companies were prepared in conformity with accounting principles generally accepted in the United States of America.
2. Until the 87th fiscal year, the Companies adopted the "Accounting Standards Codification (ASC) 260: Earnings Per Share" published by the Financial Accounting Standards Board (FASB) of the United States of America, where diluted net income per share is computed if potential shares are dilutive. Diluted net income attributable to Murata Corporation per share is not stated since there are no dilutive shares.
3. In calculating Murata Corporation's shareholders' equity per share, the Company adopted the Guidance on Accounting Standard for Earnings Per Share (Accounting Standards Board of Japan (ASBJ) Guidance No. 4).
4. The Company implemented a three-for-one common stock split on October 1, 2023. Murata Corporation's shareholders' equity per share and net income attributable to Murata Corporation per share were calculated on the assumption that the relevant stock split had been implemented at the beginning of the 84th fiscal year.

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(2) Management indicators of reporting company

	Fiscal year		84th	85th	86th	87th	88th
	Year end		March 2020	March 2021	March 2022	March 2023	March 2024
	Revenue	(Millions of	1,044,772	1,107,863	1,233,464	1,069,417	1,069,763
	yen)
	Ordinary profit	(Millions of	68,629	90,872	213,786	146,625	103,760
	yen)
	Profit for the period	(Millions of	67,669	85,317	184,784	148,193	107,807
	yen)
	Share capital	(Millions of	69,444	69,444	69,444	69,444	69,444
	yen)
	Total number of issued shares	(Thousands	675,814	675,814	675,814	675,814	2,027,442
	of shares)
	Net assets	(Millions of	601,650	623,496	730,966	707,765	724,441
	yen)
	Total assets	(Millions of	1,147,829	1,268,960	1,425,313	1,311,948	1,414,724
	yen)
	Net assets per share	(Yen)	313.46	324.83	380.81	374.64	383.46
	Dividend per share	(Yen)	97.00	115.00	130.00	150.00	102.00
	[Interim dividend per share]	[47.00]	[55.00]	[60.00]	[75.00]	[75.00]
	Basic earnings per share	(Yen)	35.26	44.45	96.27	78.09	57.06
	Diluted earnings per share	(Yen)	-	-	-	-	-
	Shareholders' equity ratio	(%)	52.4	49.1	51.3	53.9	51.2
	Return on equity	(%)	11.3	13.9	27.3	20.6	15.1
	Price earnings ratio	(Times)	51.73	66.31	28.11	34.32	49.49
	Payout ratio	(%)	91.7	86.2	45.0	64.0	91.1
	Number of employees	(Persons)	9,199	9,528	9,771	10,089	10,401
	Total shareholders return	(%)	101.0	164.3	153.5	154.8	165.5
	[Benchmark: TOPIX total return]	(%)	[90.5]	[128.6]	[131.2]	[138.8]	[196.2]
	Highest stock price	(Yen)	6,920	10,835	10,535	8,811	8,736
	*3,141
	Lowest stock price	(Yen)	4,304	5,008	7,008	6,438	7,537
	*2,461
(Notes) 1. Amounts of less than one million yen are rounded down to the nearest million yen.

1. The Company implemented a three-for-one common stock split, effective October 1, 2023. Net assets per share and basic earnings per share are calculated as if the stock split had been conducted at the start of the 84th fiscal year. The asterisked figures are the highest and lowest stock prices after ex-rights due to the stock split.
2. The diluted earnings per share are not stated since there were no dilutive potential securities.
3. Effective from April 4, 2022, the highest and lowest stock prices were on the Tokyo Stock Exchange's Prime Market, and before then, they were on the Tokyo Stock Exchange's First Section.

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2. History

Month and year	History
October 1944	Akira Murata founded Murata Manufacturing as a personal venture in Kyoto-shi and started manufacturing
	ceramic capacitors.
December 1950	The venture was reorganized as a stock company with the capital stock of one million yen and its name
	changed to Murata Manufacturing Co., Ltd.
February 1961	Head Office was moved to Nagaokakyo-shi, Kyoto.
September 1962	Established Yokaichi Plant.
September 1962	Invested in Fukui Murata Manufacturing Co., Ltd. (currently wholly owned).
March 1963	Listed on the Second Section of the Osaka Stock Exchange (moved to the First Section in February 1970).
May 1965	Established a sales company in the U.S., current Murata Electronics North America, Inc.
December 1969	Listed on the Second Section of the Tokyo Stock Exchange (moved to the First Section in February 1970).
December 1972	Established a sales and manufacturing company in Singapore, Murata Electronics Singapore (Pte.) Ltd.
October 1973	Established a sales company in China, Murata Company Limited.
April 1978	Established the first European sales company in Germany.
November 1978	Acquired a manufacturing and sales company in Taiwan, current Taiwan Murata Electronics Co., Ltd.
September 1980	Acquired a multination corporation in Canada, Erie Technological Products, Ltd. (currently one of the
	subsidiaries in the U.S. and Europe).
May 1981	Established Komatsu Murata Manufacturing Co., Ltd.
October 1982	Established Toyama Murata Manufacturing Co., Ltd.
August 1983	Established Izumo Murata Manufacturing Co., Ltd.
August 1984	Established Kanazawa Murata Manufacturing Co., Ltd.
July 1987	Established Yasu Plant.
September 1988	Established a manufacturing company in Thailand, Murata Electronics (Thailand), Ltd.
October 1988	Established the European management company in Germany. (Its functions were transferred to the current
	Murata Electronics Europe B.V. that was established in the Netherlands in August 2004.)
November 1988	Established Yokohama R&D Center.
December 1989	Established a sales company in the Netherlands. (It was integrated to the current Murata Electronics Europe
	B.V. in April 2014.)
July 1990	Established a sales company in Brazil, Murata World Comercial Ltda.
April 1992	Established Okayama Murata Manufacturing Co., Ltd.
May 1993	Established a manufacturing and sales company in Malaysia, Murata Electronics (Malaysia) Sdn. Bhd.
December 1994	Established a manufacturing company in China, Wuxi Murata Electronics Co., Ltd.
May 1995	Established a sales company in China, Murata Electronics Trading (Shanghai) Co., Ltd.
March 1999	Established Tokyo Branch in Shibuya-ku, Tokyo.
December 2000	Established a sales company in Republic of Korea, Korea Murata Electronics Company, Limited.
July 2002	Established a sales company in Mexico, Murata Electronics Trading Mexico, S.A. de C.V.
October 2004	Head Office was moved to a new building constructed at the current location.
June 2005	Established a manufacturing company in China, Shenzhen Murata Technology Co., Ltd.
December 2005	Established the sales management company for Greater China in China, Murata (China) Investment Co.,
	Ltd.
August 2007	Acquired a development, manufacturing and sales company in the U.S., current Murata Power Solutions,
	Inc.
October 2010	Established a sales company in India, Murata Electronics (India) Private Limited.
October 2010	Established a sales company in Vietnam, Murata Electronics (Vietnam) Co., Ltd.
September 2011	Established a manufacturing company in the Philippines, Philippine Manufacturing Co. of Murata, Inc.
January 2012	Acquired a development and manufacturing company in Finland, current Murata Electronics Oy.
March 2012	Acquired the power amplifier business from Renesas Electronics Corporation.
August 2013	Acquired the current Iwate Murata Manufacturing Co., Ltd.
March 2014	Made the current Saitama Murata Manufacturing Co., Ltd. a subsidiary (a wholly owned subsidiary in May
	2016).

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Month and year	History
December 2014	Acquired a development, manufacturing and sales company in the U.S., current pSemi Corporation.
October 2016	Established a joint company with SHIZUKI ELECTRIC COMPANY INC., Murata Shizuki FC Solutions
	Co., Ltd.
October 2016	Acquired a development, manufacturing and sales company in France, current Murata Integrated Passive
	Solutions SAS.
September 2017	Acquired the battery business from Sony Corporation and Sony Group Corporation.
October 2017	Acquired a development and sales company in the U.S., current Murata Vios, Inc.
December 2020	Established Minato MIRAI Innovation Center in Nishi-ku,Yokohama-shi.
April 2022	After the Tokyo Stock Exchange restructured the market segments, the Company moved to the Prime
	Market of the Tokyo Stock Exchange from its First Section.

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3. Description of business

The main business of Murata Manufacturing Co., Ltd. (the "Company") and its subsidiaries and associates (collectively, the "Companies") is the development, manufacturing and sale of electronic components and related products, and this business is divided into three operating segments: Components (capacitors, inductors, EMI suppression filters, etc.), Devices and Modules (High-frequency Modules, Surface Wave Filters, Lithium Ion Secondary Batteries, Sensors, etc.) and Others (Healthcare Equipment, Solution Business, etc.).

The position of each company in the relevant business is as follows: [Manufacturing and sales of electronic components]

Reporting company

The Company manufactures semi-finished products that are intermediate products of various electronic components and supplies them to manufacturing companies in Japan and oversea. In addition, the Company sells finished products that are processed within the Companies to clients and sales companies at home and abroad.

Sales companies

Sales companies conduct sales and brokerage services of products manufactured within the Companies. Material sales companies, such as Murata Electronics North America, Inc. in the U.S., Murata Company Limited and Murata Electronics Trading (Shanghai) Co., Ltd. in China, and Murata Electronics Europe B.V. in the Netherlands, sell finished products manufactured by the Company and its subsidiaries and associates.

Manufacturing and sales companies

Manufacturing and sales companies principally process semi-finished products manufactured by the Company into finished products, which will be supplied to the Company and sales companies. They also sell products manufactured by the Company and its subsidiaries and associates to their clients. We have the following material manufacturing companies: In Japan, Fukui Murata Manufacturing Co., Ltd., Izumo Murata Manufacturing Co., Ltd., Toyama Murata Manufacturing Co., Ltd., Kanazawa Murata Manufacturing Co., Ltd., Okayama Murata Manufacturing Co., Ltd., Komoro Murata Manufacturing Co., Ltd., and Tohoku Murata Manufacturing Co., Ltd; in China, Wuxi Murata Electronics Co., Ltd., Shenzhen Murata Technology Co., Ltd., Murata Energy Device Wuxi Co., Ltd., and Foshan Murata Materials Co., Ltd.; in Singapore, Murata Electronics Singapore (Pte.) Ltd.; in the Philippines, Philippine Manufacturing Co. of Murata, Inc.; in Thailand, Murata Electronics (Thailand), Ltd; in France, Murata Integrated Passive Solutions SAS; in Vietnam, Murata Manufacturing Vietnam Co., Ltd.; and in the U.S., pSemi Corporation. These companies manufacture Components and Devices and Modules.

Management companies

The management company conducts marketing activities in the relevant region and administrates subsidiaries and associates. Material management company, Murata (China) Investment Co., Ltd. in China, conducts marketing and engineering activities in Greater China, and administrates Chinese sales companies.

[Others]

There are subsidiaries and associates that engage in employees' welfare, leasing of real estate, and the development and sales of products and software.

The above-mentioned business content is shown in the following diagram:

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Murata Manufacturing Co., Ltd.

Sales of products

Sales of products

Sales of products and supply of semi-finished products

Purchase of products and semi-finished products

Sales companies

(Overseas subsidiaries)
Murata Company Limited		(China)
Murata Electronics North America, Inc.		(U.S.A.)
Murata Electronics Europe B.V.		(The Netherlands)
Korea Murata Electronics Company, Limited	(South Korea)
Murata Electronics (Vietnam) Co., Ltd.		(Vietnam)
Murata World Comercial Ltda.		(Brazil)
Murata Electronics Trading (Shanghai) Co., Ltd.	(China)
Murata Electronics Trading (T ianjin) Co., Ltd.	(China)
T hai Murata Electronics Trading, Ltd.		(Thailand)
Murata Electronics Philippines Inc.		(T he Philippines)
Murata Electronics Trading (Shenzhen) Co., Ltd.	(China)
Murata Electronics Trading Mexico, S. A. de C.V.	(Mexico)
Murata Electronics (India) Private Limited		(India)
Sales of products
Manufacturing and sales companies
(Domestic subsidiaries)
Kanazawa Murata Manufacturing Co., Ltd.	Fukui Murata Manufacturing Co., Ltd.
Tohoku Murata Manufacturing Co., Ltd.	Izumo Murata Manufacturing Co., Ltd.
Toyama Murata Manufacturing Co., Ltd.	Okayama Murata Manufacturing Co., Ltd.
Komoro Murata Manufacturing Co., Ltd.	Sabae Murata Manufacturing Co., Ltd.
Komatsu Murata Manufacturing Co., Ltd.	Ise Murata Manufacturing Co., Ltd.
Iwate Murata Manufacturing Co., Ltd.	Hakui Murata Manufacturing Co., Ltd.
Ogaki Murata Manufacturing Co., Ltd.	Kanazu Murata Manufacturing Co., Ltd.
Tome Murata Manufacturing Co., Ltd.	Azumi Murata Manufacturing Co., Ltd.
Anamizu Murata Manufacturing Co., Ltd.	Himi Murata Manufacturing Co., Ltd.
Asuwa Murata Manufacturing Co., Ltd.	Wakura Murata Manufacturing Co., Ltd.
Murata Shizuki FC Solutions Co., Ltd.	Sendai Murata Manufacturing Co., Ltd.
(Overseas subsidiaries)
Murata Electronics Singapore (Pte.) Ltd.		(Singapore)
Murata Electronics (Thailand), Ltd.		(Thailand)
Philippine Manufacturing Co. of Murata, Inc.	(T he Philippines)
Murata Electronics (Malaysia) Sdn. Bhd.		(Malaysia)
Shenzhen Murata T echnology Co., Ltd.		(China)
Wuxi Murata Electronics Co., Ltd.		(China)
Murata Energy Device Wuxi Co., Ltd.		(China)
T aiwan Murata Electronics Co., Ltd.		(Taiwan)
Murata Electronics Oy		(Finland)
pSemi Corporation		(U.S.A.)
Murata Manufacturing Vietnam Co., Ltd.		(Vietnam)
Murata Power Solutions, Inc.		(U.S.A.)
Murata Integrated Passive Solutions SAS		(France)
Foshan Murata Materials Co., Ltd.		(China)
Management companies
(Overseas subsidiaries)
Murata (China) Investment Co., Ltd.		(China)
Others
(Domestic subsidiaries)
Saitama Murata Manufacturing Co., Ltd.	Murata Eiko Co., Ltd.
Murata Software Co., Ltd.	Murata Land & Building Co., Ltd.
MIRAISENS, Inc.	Murata Cosmos Co., Ltd.
PIECLEX Co., Ltd.
(Overseas subsidiaries)
Murata Vios, Inc.		(U.S.A.)
SyChip Electronic T echnology (Shanghai) Ltd.	(China)
Eta Wireless, Inc.		(U.S.A.)
Resonant Inc.		(U.S.A.)

(Equity-method associates) MF Material Co., Ltd.

Sales of products

Sales of products

Sales of products

Clients

(Note) Other than the companies in the diagram above, there are 22 subsidiaries.

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