Consolidated Financial Results
for the Fiscal Year Ended December 31, 2018
[IFRS]March 28, 2019
Company name: NIPPON PAINT HOLDINGS CO., LTD.
Stock exchange listing: Tokyo Stock Exchange
Code number: 4612
URL: http://www.nipponpaint-holdings.com/
Representative: Tetsushi Tado, President & CEO, Representative Director of the Board
Contact: Yukiko Mochida, Manager of Investor Relations Office
Phone: +81-6-6455-9140(Amounts of less than one million yen are rounded down.)
1. Consolidated Financial Results for the Fiscal Year Ended December 31, 2018 (January 1, 2018 to
December 31, 2018)(1) Consolidated Operating Results(% indicates changes from the previous corresponding period.)
Revenue
Operating profit
Profit before tax
ProfitFiscal year ended
Million yen%
Million yen%
Million yen%
Million yen%
627,670
2.9
86,542
1.3
89,075
1.5
66,316 (5.4)
December 31, 2018
December 31, 2017
610,178－
85,430－87,790－70,080－Fiscal year ended
December 31, 2018
December 31, 2017

Profit attributable toowners of parent

Comprehensive
incomeMillion yen%

Million yen%

45,351
49,312(8.0)－

36,08378,694(54.1)－

Basic earnings
per share

Fiscal year ended
December 31, 2018
December 31, 2017

Diluted earnings
per share

Return on
equityProfit before tax
to total assets

Operating profit
to revenue

Yen

Yen

%

%

%

141.41
153.77141.39153.74

8.8
10.1

9.5
10.1

13.8
14.0

Reference: Share of profit of investments accounted for using equity method: Fiscal year ended December 31, 2018: ¥1,235 million
Fiscal year ended December 31, 2017: ¥1,203 million(2) Consolidated Financial Position

Total assets

As of December 31, 2018
As of December 31, 2017

Equityattributable toowners ofparentTotal equity

Equityattributable toowners ofparent to total
assetsEquity per
share
attributable toowners ofparentMillion yen

Million yen

Million yen%

Yen953,988926,098

647,618
636,941

520,047
511,392

54.5
55.2

1,621.54
1,594.60(3) Consolidated Cash Flows

Fiscal year ended
December 31, 2018
December 31, 2017

Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash
equivalents at endof period

Million yen

Million yen

Million yen

Million yen

61,53376,530(37,439)(100,301)

6,228(8,914)

129,633
101,8761

2. Dividends
Annual dividends
1stquarter-end

2ndquarterend

Yen

Yen

Yen

Yen

Yen

－

20.00

－

22.00

42.00

13,469

27.3

2.7

－

22.00

－

23.00

45.00

14,431

31.8

2.8

－

22.00

－

23.00

45.00

Fiscal year ended
December 31, 2017
Fiscal year ended
December 31, 2018
Fiscal year ending
December 31, 2019
(Forecast)

3rd
quarter- Year-end
end

Consolidated
Consolidated dividend on
Total
dividend
equitydividends
payoutattributable
paid
ratio
to owners ofparentMillion yen
%
%

Total

37.0

3. Consolidated Financial Results Forecast for the Fiscal Year Ending December 31, 2019 (January 1, 2019 to
December 31, 2019)(% indicates changes from the previous corresponding period.)
Basic
Profit attributable
Revenue
Operating profit
Profit before tax
earnings
to owners of parent
per share
Million yen

First half
Full year

310,000
640,000%－
2.0

Million yen%

39,500－77,000 (11.0)

Million yen%

40,000－78,000 (12.4)

Million yen

20,00039,000%－(14.0)

Yen

62.36
121.60* Notes:(1) Changes in significant subsidiaries during the period under review: No(2) Changes in accounting policies and changes in accounting estimates
1) Changes in accounting policies required by IFRS: No
2) Changes in accounting policies other than 1) above: No
3) Changes in accounting estimates: No(3) Total number of issued shares (common shares)
1) Total number of issued shares at the end of the period (including treasury shares):December 31, 2018: 325,402,443 shares
December 31, 2017: 325,402,443 shares2) Total number of treasury shares at the end of the period:
December 31, 2018: 4,689,703 shares
December 31, 2017: 4,700,301 shares
3) Average number of shares during the period:
Fiscal year ended December 31, 2018: 320,704,276 sharesFiscal year ended December 31, 2017: 320,702,897 shares*These consolidated financial results are outside the scope of audit by Certified Public Accountants or auditing
corporations.
*Explanation of the proper use of financial results forecast and other notes(Adoption of International Financial Reporting Standards (“IFRS”))
The Group has adopted IFRS starting from the fiscal year under review. The consolidated financial statements forthe previous fiscal year are also presented in accordance with IFRS.
(Caution concerning forward-looking statements)
The earnings forecasts and other forward-looking statements herein are based on information currently available to
the Company and certain assumptions that are judged to be reasonable, and the Company does not in any way
guarantee the achievement of the projections. Actual results, etc. may differ greatly from the forecast figuresdepending on various factors.

Table of Contents
1. Consolidated Financial Statements and Primary Notes .................................................................... 2(1) Consolidated Statements of Profit or Loss and Comprehensive Income ....................................... 2(2) Consolidated Statement of Financial Position .............................................................................. 4(3) Consolidated Statement of Changes in Equity ............................................................................. 6(4) Consolidated Statement of Cash Flows ........................................................................................ 7(5) Notes to Consolidated Financial Statements ................................................................................ 8(Segment information) ........................................................................................................... 8(Per-share information) ......................................................................................................... 10
2. Disclosure on Transition to IFRS .................................................................................................... 111

1. Consolidated Financial Statements and Primary Notes(1) Consolidated Statements of Profit or Loss and Comprehensive Income
Consolidated Statement of Profit or Loss
(Million yen)
For the fiscal year ended
December 31, 2017
Revenue
Cost of sales
Gross profit
Selling, general and administrative expenses
Other income
Other expenses
Operating profit
Finance income
Finance costs
Share of profit of investments accounted forusing equity method
Profit before tax
Income taxes
ProfitProfit attributable to
Owners of parent
Non-controlling interests
ProfitEarnings per share
Basic earnings per share
Diluted earnings per share2

For the fiscal year ended
December 31, 2018

610,178(363,990)
246,188(158,416)
3,240(5,581)85,4303,600(2,443)627,670(385,506)
242,164(164,142)
10,700(2,179)86,542
4,432(3,134)

1,203

1,235

87,790(17,710)70,08089,075(22,758)
66,31649,312
20,76770,08045,351
20,96566,316

153.77
153.74141.41141.39

Consolidated Statement of Comprehensive Income(Million yen)
For the fiscal year ended
December 31, 2017

For the fiscal year ended
December 31, 201870,08066,316

2,031(4,895)514(1,353)

2,545(6,248)

5,412(23,070)

655

(914)

6,067

(23,985)

Comprehensive income

8,613
78,694(30,233)
36,083Comprehensive income attributable to
Owners of parent
Non-controlling interests
Comprehensive income

55,15723,536
78,69422,752
13,33036,083

ProfitOther comprehensive income
Items that will not be reclassified subsequently to profit
or loss
Financial assets measured at fair value through othercomprehensive income
Remeasurements of defined benefit plans
Total of items that will not be reclassified subsequently
to profit or loss
Items that may be reclassified subsequently to profit orloss
Exchange differences on translation of foreign
operations
Share of other comprehensive income of entities
accounted for using equity method
Total of items that may be reclassified subsequently to
profit or loss
Total other comprehensive income3(2) Consolidated Statement of Financial Position(Million yen)
As of January 1, 2017
(Date oftransition to IFRS)

As ofDecember 31, 2017

As ofDecember 31, 2018

135,667
55,903
149,969
53,64912,031
407,221727
407,949

101,876
68,646
175,185
40,891
9,743
396,343
1,267
397,611

129,633
65,807179,269
59,7759,456
443,941272
444,214103,383
166,416
80,293

138,676
208,999
103,353

140,550
203,722
95,496

11,202

12,212

11,61235,521
12,7892,516
412,123820,072

46,955
14,8203,469
528,487926,098

40,942
14,374
3,075
509,774
953,988

AssetsCurrent assets
Cash and cash equivalents
Inventories
Trade and other receivables
Other financial assets
Other current assets
Subtotal
Assets held for sale
Total current assets
Non-current assets
Property, plant and equipment
Goodwill
Other intangible assets
Investments accounted for using equity
methodOther financial assets
Other non-current assets
Deferred tax assets
Total non-current assets
Total assets

4

(Million yen)
As of January 1, 2017
(Date oftransition to IFRS)

As ofDecember 31, 2017

As ofDecember 31, 2018

Current liabilities
Trade and other payables
Bonds and borrowings
Other financial liabilities
Income taxes payable
Provisions
Other current liabilities
Total current liabilities

113,915
30,529
6,954
7,933
197
30,396
189,927

126,175
27,926
6,091
6,091
3,145
31,920201,351

121,999
51,583
5,050
4,735
992
31,415
215,776

Non-current liabilities
Bonds and borrowings
Other financial liabilities
Retirement benefit liability
Provisions
Other non-current liabilities
Deferred tax liabilities
Total non-current liabilities

3,474
6,608
19,355354
1,377
17,403
48,57431,802
5,502
18,012383
3,446
28,65987,80537,881
5,558
19,572385
1,209
25,98690,593

Total liabilities

238,501

289,157

306,370

78,86263,451(6,444)323,230
10,11578,862
63,262(6,454)360,249
15,471

78,862
63,247(6,444)
390,287(5,905)469,215

511,392

520,047

112,355
581,570820,072

125,549
636,941926,098

127,570647,618
953,988－

Liabilities and equity
Liabilities

EquityShare capital
Capital surplus
Treasury shares
Retained earnings
Other components of equity
Total equity attributable to owners ofparentNon-controlling interests
Total equity
Total liabilities and equity5(3) Consolidated Statement of Changes in Equity(Million Yen)
Equity attributable to owners of parent

Share capital

Balance as of January 1, 2017

CapitalsurplusTreasurysharesRetainedearnings

Other
components ofequityTotal

Noncontrollinginterests

Total equity

78,86263,451(6,444)323,230

10,115469,215

112,355

581,570

Profit－－－49,312－

49,312

20,76770,080

Other comprehensive income

－

－

－

－

5,844

5,844

2,768

8,613

Comprehensive income

－

－

－

49,312

5,844

55,15723,536

78,694Purchase of treasury shares

－

－

(10)

－

－

(10)

－

(10)

Disposal of treasury shares

－

0

0

－

(1)

0

－

0

Dividends－－－(12,828)－(12,828)(12,514)(25,342)

Share-based payment transactions

－

－

－

－

52

52

－

52

Changes in ownership interest in
subsidiaries

－

(190)

－

－

－

(190)

1

(188)

Change in scope of consolidation

－

－

－

－

－

－

1,990

1,990

Transfer from other componentsof equity to retained earnings

－

－

－

534

(534)

－

－

－

Other

－

－

－

(0)

(5)

(5)

179

174

Total transactions with owners

－

(189)

(9)

(12,293)(488)(12,980)(10,342)(23,323)

Balance as of December 31, 201778,862

63,262(6,454)360,249

15,471

511,392

125,549

636,941

Profit－－－45,351－45,351

20,96566,316

Other comprehensive income

－

－

－

－

(22,599)(22,599)(7,634)(30,233)

Comprehensive income

－

－

－

45,351(22,599)

22,752

13,33036,083Purchase of treasury shares

－

－

(7)

－

－

(7)

－

(7)

Disposal of treasury shares

－

18

16

－

(35)

0

－

0

Dividends－－－(14,110)－(14,110)(12,325)(26,436)

Share-based payment transactions

－

－

－

－

54

54

－

54

Changes in ownership interest in
subsidiaries

－

(33)

－

－

－

(33)

(197)

(231)

Change in scope of consolidation

－

－

－

－

－

－

521

521

Transfer from other componentsof equity to retained earnings

－

－

－

(1,202)

1,202

－

－

－

Capital increase of subsidiaries

－

－

－

－

－

－

790

790

Other

－

－

－

－

－

－

(97)

(97)

Total transactions with owners

－

(15)

9

(15,313)1,222(14,096)(11,309)(25,406)

Balance as of December 31, 201878,862

63,247(6,444)

390,287(5,905)520,047

127,570647,6186

(4) Consolidated Statement of Cash Flows(Million yen)
For the fiscal year ended
December 31, 2017
Cash flows from operating activities
Profit before tax
Depreciation and amortization
Interest and dividend income
Interest expenses
Share of loss (profit) of investments accounted forusing equity method
Loss (gain) on sale and retirement of property, plantand equipment, and intangible assets
Decrease (increase) in inventories
Decrease (increase) in trade and other receivables
Increase (decrease) in trade and other payables
Increase (decrease) in retirement benefit liability
Increase (decrease) in provisions
Other
SubtotalInterest received
Dividends received
Interest paid
Income taxes paid
Income taxes refund
Net cash provided by operating activities
Cash flows from investing activities
Net decrease (increase) in short-term investment
securities
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Purchase of investments in subsidiaries
Proceeds from sale of investments in subsidiaries
Payments into time deposits
Proceeds from withdrawal of time deposits
Other
Net cash used in investing activities
Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Redemption of bonds
Proceeds from issuance of shares
Dividends paid
Dividends paid to non-controlling interests
Other
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

7

For the fiscal year ended
December 31, 201887,79017,894(2,068)
1,083

89,075
18,390(2,432)
1,261(1,203)(1,235)318(5,158)(4,780)(17,265)
7,431
(905)
2,954
7,666
98,916
1,100
1,697(1,095)(28,209)
4,122
76,5301,220(9,176)(1,625)(121)(2,128)(3,982)
84,0871,384
1,930(1,348)(24,968)447
61,533

13,471

12,333(20,807)
1,484(2,820)(8,395)(82,606)
55(4,244)
3,997(435)(100,301)(18,399)
6,202(1,676)(63)(1,868)－(37,021)2,549
505(37,439)(10,392)
35,432(3,798)(2,558)－(12,828)(14,180)(588)(8,914)22,354
16,995(7,104)－689(14,110)(12,038)
(558)
6,228

(1,106)(2,565)(33,791)
135,667
101,876

27,757
101,876
129,633

(5) Notes to Consolidated Financial Statements(Segment information)(1) Summary of reportable segments
The reportable segments of the Company categorize the business composition of the Company for which
separate financial information is available and are subject to periodical evaluation by the Board of Directors,
which is the chief operating decision maker, in order to make decisions regarding management resource allocationand performance assessment.
The Group’s primary business is the manufacture and sale of paint for automotive, general, industrial, andother uses, and fine chemicals. The Company and separate local companies are responsible for domestic activities,
and overseas, separate local companies are responsible for the Asia, North America and other regions.
Each company is an individual management unit, and concerning which items to carry, comprehensive
strategic proposals are made for each region to foster business growth.
As a result, the Group consists of segments divided by region with manufacture and sales structure as a base,and the three reportable segments are “Japan,” “Asia,” and “Americas.”“Other” contains business activities by overseas subsidiaries in Europe, etc. Those business activities aremanaged individually, but are not material enough to be disclosed separately as an independent segment of theGroup.
(2) Information on reportable segments
Previous fiscal year (from January 1, 2017 to December 31, 2017)(Million yen)
Reportable segment
Other

Total

Adjustment(Note 1)

Consolidated
financialstatements

Japan

Asia

Americas

Subtotal

Revenue from external customers

180,833

347,033

68,229596,096

14,082

610,178－

610,178

Intersegment revenue

33,6174,665

162

38,446934

39,381(39,381)－

214,451

351,699

68,392

634,542

15,016

649,559(39,381)

610,178

41,201

51,408

4,979

97,588425

98,014(12,583)

85,430

Revenue

Total
Segment profit
Finance income

3,600

Finance costs
Share of profit of investments
accounted for using equity method(2,443)

Profit before tax

87,7901,203

Other items
Depreciation and amortization

3,819

11,256

2,618

17,695

198

17,894－

17,894

Capital expenditures (Note 2)

6,663

14,205

3,213

24,082872

24,954－

24,954Note 1: Adjustments to “intersegment revenue” and “segment profit” are primarily due to intersegment eliminations.
Note 2: These mainly consist of expenditures for property, plant, and equipment and intangible assets.

8

Fiscal year ended December 31, 2018 (January 1, 2018 – December 31, 2018)(Million yen)
Reportable segment
Other

Total

Adjustment(Note 1)

Consolidated
financialstatements

Japan

Asia

Americas

Subtotal

Revenue from external customers

182,817355,746

75,207613,770

13,900627,670－

627,670

Intersegment revenue

34,9113,480

217

38,609738

39,348(39,348)－

217,729359,226

75,424652,380

14,638667,018(39,348)627,670

43,63652,418

4,989

101,044(529)

100,514(13,972)

86,542

Revenue

Total
Segment profit
Finance income

4,432

Finance costs(3,134)

Share of profit of investments
accounted for using equity method

1,235

Profit before tax

89,075

Other items
Depreciation and amortization

3,815

11,5072,850

18,174216

18,390－18,390Capital expenditures (Note 2)

3,990

13,1292,608

19,7282,725

22,453－22,453Note 1: Adjustments to “intersegment revenue” and “segment profit” are primarily due to intersegment eliminations.
Note 2: These mainly consist of expenditures for property, plant, and equipment and intangible assets.

(3) Information on products and services(Million yen)Previous
fiscal year
(From January 1, 2017
to December 31, 2017)

Current
fiscal year
(From January 1, 2018
to December 31, 2018)591,299608,280

Automotive paint148,437

160,182

Trade-use paint313,900

322,511

Industrial paint72,96568,764

Other paint55,99556,822

18,87919,390610,178

627,670

Paint business

Fine chemical business
Total

9

(Per-share information)
The basis of calculations of basic earnings per share and diluted earnings per share is as below.
Previous
fiscal year
(From January 1, 2017
to December 31, 2017)49,312Current
fiscal year
(From January 1, 2018
to December 31, 2018
45,351－－

Diluted earnings (million yen)

49,31245,351

Weighted-average number of common shares issued(thousands of shares)

320,702

320,704

49

50

49

50

Weighted-average number of common shares usedin the calculation of diluted earnings per share(thousands of shares)

320,752

320,754

Basic earnings per share (yen)153.77141.41

Diluted earnings per share (yen)153.74141.39Profit attributable to owners of parent (million yen)
Adjustment to profit used in the calculation ofdiluted earnings per share (million yen)

Increase in the number of common shares used in
the calculation of diluted earnings per share(thousands of shares)
Increase due to exercise of stock options(thousands of shares)10

2. Disclosure on Transition to IFRSFirst-time adoption
Starting from the current fiscal year, the Group has disclosed its consolidated financial statements in accordancewith IFRS. The most recent consolidated financial statements prepared in accordance with the generally accepted
accounting principles in Japan (“Japanese GAAP”) are for the fiscal year ended December 31, 2017. The date oftransition to IFRS is January 1, 2017.
(1) Exemptions from retrospective application
IFRS 1 requires a first-time adopter to apply IFRS retrospectively; however, certain exemptions are permitted.
The Group has applied the following exemptions:
1) Business combinations
The Group has elected not to apply IFRS 3 “Business combinations” retrospectively to businesscombinations that occurred before the date of transition to IFRS, as permitted by IFRS 1. As a result, thecarrying amount of goodwill arising from business combinations before the date of transition is stated attransition date carrying amount under Japanese GAAP. The Group tests goodwill for impairment at the dateof transition, irrespective of whether there is any indication of impairment.
2) Fair value as deemed cost
IFRS 1 permits a first-time adopter to measure property, plant and equipment, investment property, andintangible assets at their fair value at the date of transition and use that fair value as their deemed cost at that
date. For certain property, plant and equipment, the Group has used their fair value at the date of transition as
their deemed cost at that date. In applying IFRS for property, plant and equipment and intangible assets, theGroup has adopted the cost model instead of the revaluation model. The previous carrying amount of property,
plant and equipment for which deemed cost is applied as of the date of transition was ¥43,371 million andtheir fair value was ¥38,413 million.
3) Exchange differences on translation of foreign operations
The Group has elected to deem the cumulative exchange differences on translation of foreign operations tobe zero as of the date of transition to IFRS, as permitted by IFRS 1.
4) Designation of financial instruments recognized before the date of transition
IFRS 1 permits a first-time adopter to determine the classification in accordance with IFRS 9 on the basisof the facts and circumstances that exist at the date of transition instead of those that exist at initial recognition.
In addition, changes in the fair value of equity financial assets may be designated as financial assets measured
at fair value through other comprehensive income on the basis of the facts and circumstances that exist at thedate of transition. The Group has determined the classification in accordance with IFRS 9 on the basis of thefacts and circumstances that existed at the date of transition, and has designated certain equity financial assets
as financial assets measured at fair value through other comprehensive income.

11

(2) Reconciliations
Reconciliations required under IFRS to be disclosed by a first-time adaptor are as follows. In the reconciliationtables, “Reclassifications” include items that do not affect retained earnings or comprehensive income, and“Differences in recognition and measurement” include items that affect retained earnings and comprehensive
income.
Reconciliations of equity as of January 1, 2017 (date of transition to IFRS)(Million yen)Line items
under Japanese GAAP

Japanese
GAAP

Differences in
Rerecognition andclassifications
measurement

IFRS

AssetsAssetsCurrent assets
Cash and deposits
Notes and accounts
receivable - trade
Electronically recordedmonetary claims operating
Securities
Merchandise and finished
goodsWork in process
Raw materials andsupplies
Deferred tax assets

Line items
under IFRS

Note136,778(2,262)

1,151

135,667

135,139

14,543286

149,969

13,713(13,713)－－50,787(50,787)－－

31,041

24,552309

55,903

3,639(3,639)－－20,912(20,912)

－

－

7,553

(7,553)53,635－
13－
53,649(5,114)92

12,031－
17,052Current assets
Cash and cash
equivalents
Trade and otherreceivables

Inventories

3)
Other financial assets

Other
Allowance for doubtful
accounts
Subtotal

Other current assets(3,698)

3,698

－

－

412,920(7,553)

1,854

407,221

－

727

－

727

Assets held for sale

Total current assets

412,920(6,825)

1,854

407,949

Total current assets

Subtotal

Non-current assets
Property, plant andequipment
Intangible assets

107,669(727)(3,558)103,383

Goodwill

166,362

166,416

Goodwill

44,279－(44,279)

54

Trademark right
Other
Investments and otherassetsInvestment securities

47,05533,224－
13－
80,293

Other intangible assets

45,418(45,418)－－－

11,061140

11,202－35,758(236)

35,521

154

(154)

－

－

3,096

9,637

55

12,789

1,210

7,553

(6,247)

2,516

(170)

170

－

－

415,076

6,825(9,778)412,123

827,996－(7,923)820,072

Net defined benefit
asset
Other
Deferred tax assets
Allowance for doubtful
accounts
Total non-current assets
Total assets

12

1)

2)

Non-current assets
Property, plant andequipment

Investments accounted
for using equity
methodOther financial assets

Other non-current assets
3)

Deferred tax assets

Total non-current assets
Total assets

(Million yen)Line items
under Japanese GAAP

Japanese
GAAP

Differences in
Rerecognition andclassifications
measurement

IFRS

Line items
under IFRS

Note

Liabilities and net assets

Liabilities and equity

Liabilities

Liabilities

Current liabilities
Notes and accounts
payable - trade
Electronically recorded
obligations - operating
Short-term loans payable
Current portion of longterm loans payable

70,732

42,185997

113,915

21,512(21,512)－－29,548947

33

30,529

947

(947)

－

－

－

6,918

36

6,954

7,866

－
197

66

7,933

－

－

197

Other

57,325(27,802)874

30,396

Total current liabilities

187,932

(13)

2,008

189,927

3,457

－

16

3,474

883

5,696

29

6,608

23,27013(5,879)17,403

19,124142

88

19,355

142

(142)

－

－

294

59

－

354

Income taxes payable

Current liabilities
Trade and otherpayablesBonds and borrowings

Other financial
liabilities
Income taxes payable
Provisions
4)

Total current liabilities

Non-current liabilities
Long-term loans payable
Lease obligations
Deferred tax liabilities
Net defined benefit
liability
Provision for directors’
retirement benefits
Provision forenvironmental measures

Non-current liabilities

Other

7,133

(5,755)－

1,377

Total non-current liabilities

54,30613(5,745)48,574242,238－(3,737)

238,501

78,862－－

78,862

Capital surplus

63,451－Retained earnings

361,074－－(37,844)

323,230

Treasury shares
Accumulated othercomprehensive income
Share acquisition rights(6,444)－－(6,444)(23,606)85

33,636

10,115

85

(85)

－

－

Total liabilities

3)

Bonds and borrowings
Other financial
liabilities
Deferred tax liabilities
Retirement benefit
liability

Provisions
Other non-current
liabilities
Total non-current
liabilities
Total liabilities

Net assets
Capital stock

Other current liabilities

EquityShare capital

63,451

Capital surplus
5)
6)

Retained earnings
Treasury shares
Other components ofequity112,334－

20

112,355

Total equity attributable toowners of parent
Non-controlling interests

Total net assets

585,757－(4,186)

581,570

Total equity

Total liabilities and net assets

827,996－(7,923)820,072

469,215
Non-controlling interests

13

Total liabilities and equity

(Notes to reconciliation of equity as of January 1, 2017 (date of transition to IFRS))
1) Property, plant and equipment
Under IFRS, the Group has applied deemed cost to certain property, plant and equipment, as permitted by
IFRS 1. The carrying amount of those property, plant and equipment before the application of deemed costwas ¥43,371 million and their fair value was ¥38,413 million. As a result, property, plant and equipment havedecreased.
2) Other financial assets (non-current assets)
Under Japanese GAAP, the Group measured unlisted equity securities mainly based on the moving-averagemethod. Under IFRS, they are measured at fair value. As a result, other financial assets (non-current assets)
have decreased.
3) Deferred tax assets and deferred tax liabilities
Under Japanese GAAP, the Group offset deferred tax assets and liabilities in each of the “current” and “noncurrent” categories. Under IFRS, deferred tax assets and liabilities are all classified into the “non-current”
category, resulting in an increase in the offset amount. As a result, deferred tax assets and deferred liabilities
have decreased.
4) Other current liabilities
The Group recognizes employees’ unused paid absences, etc., which were not recognized under Japanese
GAAP, as liabilities under IFRS. As a result, other current liabilities have increased.
5) Retained earnings(Million yen)
As of January 1, 2017
(Date of transition to IFRS)Japanese GAAP
361,074
Reconciliation of exchange differences ontranslation of foreign operations(28,512)Reconciliation for retirement benefit plans(5,214)Deemed cost

(4,256)

Review of scope of consolidation

1,033

Reconciliation of liabilities for paidabsences(757)

Reconciliation of tax effects associatedwith elimination of unrealized gains andlosses(138)

Write-off of negative goodwill

194

Reconciliation of cost of inventories

31

Other

0
Subtotal(37,619)

Reconciliation due to tax effects(203)

Reconciliation of non-controlling interests

(20)

IFRS

323,230

146) Other components of equity
The Group elected the exemptions permitted by IFRS 1 and reclassified the cumulative exchange differenceson translation of foreign operations in their entirety to retained earnings as of January 1, 2017 (the date oftransition).
Remeasurements of defined benefit plans recognized under Japanese GAAP were also reclassified in their
entirety to retained earnings as of January 1, 2017 (the date of transition).
7) Reclassifications
In addition to the above, the Group made reclassifications to comply with the provisions of IFRS. Major
reclassifications are as follows:a. Deferred tax assets and liabilities classified as current have been reclassified in their entirety as non-current.
b. Assets whose sale is highly probable and which are available for immediate sale in their present condition
are separately presented as “assets held for sale.”c. “Share acquisition rights,” which were presented separately under Japanese GAAP, are included in “othercomponents of equity” under IFRS.
8) Difference in scope of consolidation
Certain insignificant subsidiaries which were not included in the scope of consolidation under Japanese
GAAP are included in the scope of consolidation under IFRS. The major effects of this change are as follows:(Million yen)
As of January 1, 2017
(Date of transition to IFRS)Cash and cash equivalents
1,151
Property, plant and equipment

671

15

Reconciliations of profit or loss and comprehensive income
for the previous fiscal year (from January 1, 2017 to December 31, 2017)(Million yen)Line items
under Japanese GAAP

Japanese
GAAPNet sales

605,252

Cost of sales
Gross profit
Selling, general andadministrative expenses

Differences in
Rerecognition andclassifications
measurement

IFRS

Note

1)

Line items
under IFRS

(109)

5,035

610,178(360,055)－(3,934)(363,990)

Cost of sales

245,196

(109)

1,101

246,188(170,239)(122)

11,946(158,416)

－

3,242

(2)

3,240

Gross profit
Selling, general andadministrative expenses
Other income

2)

Revenue－(5,770)188(5,581)Other expenses

74,957(2,759)13,23385,430Operating profit

Non-operating income

7,000(7,000)－－Non-operating expenses(5,137)

5,137

－

－

Extraordinary income

1,127(1,127)－－Extraordinary losses(3,175)

3,175

－
3,600

3)

Finance income

3)

Finance costs
Share of profit ofinvestments accounted forusing equity method
Profit before tax

4)

Income taxes

Operating profit

－

3,675

－
(75)

－

(2,441)(1)(2,443)

－

1,217

(14)

1,203

Profit before income taxes

74,771(122)

13,142

87,790Total income taxes(17,452)

122

(380)

(17,710)

Profit57,318－12,76270,0801)

ProfitProfit attributable toProfit attributable toowners of parent
Profit attributable to noncontrolling interests
Other comprehensive income

Valuation difference on
available-for-salesecurities
Remeasurements ofdefined benefit plans, netof tax37,123－

12,18949,312

Owners of parent

20,195－572

20,767

Non-controlling interests

2,024

－

6

2,031

5)

1,843

－

(1,328)

514

5)

－

－

－

－

2,545

Foreign currencytranslation adjustment
Share of othercomprehensive income ofentities accounted forusing equity method

5,140

－

272

5,412

644

－

10

655

6,067
Total other comprehensive
incomeComprehensive income

9,652

－

(1,038)

8,613

66,970－11,72378,694

16

Other comprehensive income
Items that will not bereclassified subsequently to
profit or loss
Financial assets measured
at fair value throughother comprehensive
incomeRemeasurements ofdefined benefit plans
Share of othercomprehensive income ofentities accounted forusing equity method
Total of items that will not
be reclassified
subsequently to profit orloss
Items that may bereclassified subsequently to
profit or loss
Exchange differences ontranslation of foreign
operations
Share of othercomprehensive income ofentities accounted forusing equity method
Total of items that may bereclassified subsequently
to profit or loss
Total other comprehensive
incomeComprehensive income

(Notes to reconciliations of profit or loss and comprehensive income)1) Revenue
Under Japanese GAAP, the Group included and presented certain payments such as rebates in “nonoperating expenses.” Under IFRS, they are deducted from “revenue” and therefore not presented separately.
2) Selling, general and administrative expenses
a. Goodwill, which was amortized over a certain period under Japanese GAAP, is not amortized under IFRS.
As a result, selling, general and administrative expenses have decreased.
b. Under Japanese GAAP, actuarial gains and losses and past service costs were recognized in othercomprehensive income as incurred and amortized on a straight-line basis over a certain period within the
average remaining service period of employees, the amortized amounts of which were recognized in profit
or loss from the fiscal year of incurrence. Under IFRS, actuarial gains and losses are fully recognized inother comprehensive income as incurred and then immediately reclassified to retained earnings, while past
service costs are recognized in profit or loss as incurred.
c. Under Japanese GAAP, the Group recognized as retirement benefit expenses the interest expenses
determined by multiplying retirement benefit obligations by the discount rate and the expected return onplan assets determined by multiplying plan assets by the expected rate of return. Under IFRS, the net interest
amount determined by multiplying the net amount of retirement benefit obligations and plan assets by thediscount rate is recognized. As a result, retirement benefit expenses have increased.
3) Finance income and finance costs
Under Japanese GAAP, the Group recognized gains and losses on the sale of equity financial assets in profit
or loss. Under IFRS, for equity financial assets that are designated as measured at fair value through othercomprehensive income, changes in the fair value are recognized in other comprehensive income. As a result,finance income and finance costs have decreased.
4) Income taxes
The amount of income taxes is adjusted for temporary differences arising on the reconciliations fromJapanese GAAP to IFRS.
5) Other comprehensive income
a. Under Japanese GAAP, gains and losses on the sale of equity instruments were recognized as profit or loss.
Under IFRS, certain equity instruments are designated as financial assets measured at fair value throughother comprehensive income and hence not recognized in profit or loss. As a result, “financial assets
measured at fair value through other comprehensive income” have increased.
b. Under Japanese GAAP, actuarial gains and losses were recognized in other comprehensive income as
incurred and amortized on a straight-line basis over a certain period within the average remaining service
period of employees, the amortized amounts of which were recognized in profit or loss. Under IFRS,
remeasurements of defined benefit plans including actuarial gains and losses are recognized in othercomprehensive income as incurred, but are not amortized and recognized in profit or loss. As a result,“remeasurements of defined benefit plans” have increased.
6) Other reclassifications
In addition to the above, reclassifications are made to comply with the provisions of IFRS. Major
reclassifications are as follows. Of the items that were presented in “non-operating income,” “non-operating
expenses,” “extraordinary income” and “extraordinary losses” under Japanese GAAP, finance-related items
and foreign exchange gains and losses are presented in “finance income” or “finance costs,” and other items
are presented in “other income,” “other expenses” or “share of profit of investments accounted for using equity
method.”17

7) Difference in scope of consolidation
Certain insignificant subsidiaries which were not included in the scope of consolidation under Japanese
GAAP are included in the scope of consolidation under IFRS. The major effects of this change are as follows:(Million yen)Previous fiscal year
(From January 1, 2017
to December 31, 2017)
Revenue
5,035
Cost of sales(3,610)18

Reconciliation of equity as of the end of the previous fiscal year (December 31, 2017)(Million yen)Line items
under Japanese GAAP

Japanese
GAAP

Differences in
Rerecognition andclassifications
measurement

IFRS

Line items
under IFRS

NoteAssetsAssetsCurrent assets
Cash and deposits

Current assets
Cash and cash
equivalents
Trade and otherreceivables

103,007(2,447)

1,316

101,876

153,922

21,098164

175,185

15,402(15,402)－－38,19830,207239

68,646Work in process

4,032(4,032)－－

Raw materials andsupplies

26,174(26,174)－－

Deferred tax assets

7,278(7,278)－－

Securities

37,4773,393

20

40,891Other financial assets

Other

20,800(11,038)

(19)

9,743

Other current assets

Allowance for doubtful
accounts(4,394)

4,394

－

－

Subtotal

401,900(7,278)1,721

396,343

Subtotal

－

1,267

－

1,267

Assets held for sale

401,900(6,010)1,721

397,611

Total current assets

Notes and accounts
receivable - trade
Electronically recordedmonetary claims operating
Merchandise and finished
goods

Total current assets

Inventories

4)

Non-current assets
Property, plant andequipment

Non-current assets
142,880(727)(3,475)

138,6761)

Property, plant andequipment

Goodwill

197,051－

11,948208,9992)

Goodwill

Trademark right

61,870(61,870)

－

－

Other

54,29549,046

11

103,353

Other intangible assets

57,619(45,532)

125

12,212

Investments accounted
for using equity
method－47,210(255)

46,955

77

(77)

－

－

Other

3,834

10,601385

14,820

Deferred tax assets

1,143

7,278

(4,952)

3,469

(82)

82

－

－

518,690

6,010

3,786

528,487

920,591－5,507

926,098

Intangible assets

Investments and otherassetsInvestment securities

Net defined benefit asset

Allowance for doubtful
accounts
Total non-current assets
Total assets

19

3)

Other financial assets

Other non-current assets
4)

Deferred tax assets

Total non-current assets
Total assets

(Million yen)Line items
under Japanese GAAP

Japanese
GAAP

Differences in
Rerecognition andclassifications
measurement

IFRS

Line items
under IFRS

Note

Liabilities and net assets

Liabilities and equity

Liabilities

Liabilities

Current liabilities
Notes and accounts
payable - trade
Electronically recorded
obligations - operating

Current liabilities
Trade and otherpayables

79,94045,177

1,058

126,175

22,380(22,380)－－

Short-term loans payable

18,274

9,594

57

27,926

Current portion of longterm loans payable

7,080(7,080)

－

－

－

6,056

34

6,091

Other financial
liabilities

Income taxes payable

6,046

21

23

6,091

Income taxes payable

Provision for productcompensation

2,340

805

－

3,145

Provisions

Other

63,150(32,196)967

31,920Total current liabilities

199,212

(2)

2,141

201,351

Bonds and borrowings

5)

Total current liabilities

Non-current liabilities
Long-term loans payable
Lease obligations
Deferred tax liabilities
Net defined benefit
liability
Provision for directors’
retirement benefits
Provision forenvironmental measures

Non-current liabilities
31,741－60

31,802

Bonds and borrowings

846

4,626

29

5,502

Other financial
liabilities

33,3372(4,680)28,65917,398191423

18,012

191

(191)

－

－

264

118

－

383

Other

8,190

(4,744)0

3,446

Total non-current liabilities

91,9702(4,167)87,805291,182－(2,025)289,157

Total liabilities

Other current liabilities

4)

Deferred tax liabilities
Retirement benefit
liability

Provisions
Other non-current
liabilities
Total non-current
liabilities
Total liabilities

Net assets

EquityCapital stock

78,862－－

78,862

Share capital

Capital surplus

63,262－－

63,262

Capital surplus

Retained earnings

385,369－(25,119)

360,249

Treasury shares(6,454)－－(6,454)

Accumulated othercomprehensive income(16,703)

136

32,03815,471

Share acquisition rights

136

(136)

－

－

6)

Retained earnings
Treasury shares

7)

Other components ofequity511,392

Total equity attributable toowners of parent

124,934－614

125,549

Non-controlling interests

Total net assets

629,408－

7,533

636,941

Total equity

Total liabilities and net assets

920,591－5,507

926,098

Non-controlling interests

20

Total liabilities and equity

(Notes to reconciliation of equity as of the end of the previous fiscal year (December 31, 2017))
1) Property, plant and equipment
Under IFRS, the Group has applied deemed cost to certain property, plant and equipment, as permitted by
IFRS 1. The carrying amount of those property, plant and equipment before the application of deemed costwas ¥44,334 million and their fair value was ¥39,375 million. As a result, property, plant and equipment havedecreased.
2) Goodwill
The Group amortized goodwill over substantively estimated amortization periods under Japanese GAAP,
but has discontinued amortizing goodwill since the date of transition under IFRS.
3) Other financial assets (non-current assets)
Under Japanese GAAP, the Group measured unlisted equity securities mainly based on the moving-averagemethod. Under IFRS, they are measured at fair value. As a result, other financial assets (non-current assets)
have increased.
4) Deferred tax assets and deferred tax liabilities
Under Japanese GAAP, the Group offset deferred tax assets and liabilities in each of the “current” and “noncurrent” categories. Under IFRS, deferred tax assets and liabilities are all classified into the “non-current”
category, resulting in an increase in the offset amount. As a result, deferred tax assets and deferred liabilities
have decreased.
5) Other current liabilities
The Group recognizes employees’ unused paid absences, etc., which were not recognized under Japanese
GAAP, as liabilities under IFRS. As a result, other current liabilities have increased.
6) Retained earnings(Million yen)Previous fiscal year
(As of December 31, 2017)
Japanese GAAP
385,369
Reconciliation of exchange differences ontranslation of foreign operations(28,512)Reconciliation of goodwill

11,601

Reconciliation for retirement benefit plans(2,810)Deemed cost

(4,383)

Review of scope of consolidation

1,030

Reconciliation of liabilities for paidabsences(845)

Reconciliation of tax effects associatedwith elimination of unrealized gains andlosses(157)

Write-off of negative goodwill

194

Reconciliation of cost of inventories

26

Other

0
Subtotal(23,855)

Reconciliation due to tax effects(665)

Reconciliation of non-controlling interests

(598)

IFRS

360,24921

7) Other components of equity
The Group elected the exemptions permitted by IFRS 1 and reclassified the cumulative exchange differenceson translation of foreign operations in their entirety to retained earnings as of January 1, 2017 (the date oftransition).
Remeasurements of defined benefit plans recognized under Japanese GAAP were also reclassified in their
entirety to retained earnings as of January 1, 2017 (the date of transition).
8) Reclassifications
In addition to the above, the Group made reclassifications to comply with the provisions of IFRS. Major
reclassifications are as follows:a. Deferred tax assets and liabilities classified as current have been reclassified in their entirety as non-current.
b. Assets whose sale is highly probable and which are available for immediate sale in their present condition
are separately presented as “assets held for sale.”c. “Share acquisition rights,” which were presented separately under Japanese GAAP, are included in “othercomponents of equity” under IFRS.
9) Difference in scope of consolidation
Certain insignificant subsidiaries which were not included in the scope of consolidation under Japanese
GAAP are included in the scope of consolidation under IFRS. The major effects of this change are as follows:(Million yen)Previous fiscal year
(As of December 31, 2017)
Cash and cash equivalents
1,316
Property, plant and equipment

754(Reconciliation of cash flows for the previous fiscal year)
There are no material differences between the consolidated statement of cash flows in accordance withJapanese GAAP and the consolidated statement of cash flows in accordance with IFRS.

22