HOYA Corporation and its subsidiaries
Consolidated Financial Statements under IFRSs
and Independent Auditor's Report
For the year ended 31 March 2012HOYA Corporation

Contents

Independent Auditor’s Report............................................................................................................................................................

3

Consolidated Statement of Financial Position....................................................................................................................................

4

Consolidated Statement of Comprehensive Income...........................................................................................................................

6

Consolidated Statement of Changes in Equity...................................................................................................................................

8

Consolidated Statement of Cash Flows (including discontinued operations)....................................................................................

11

Notes to the Consolidated Financial Statements................................................................................................................................

13

1． General information............................................................................................................................................................

13

2． Basis of consolidated financial statements..........................................................................................................................

13

3． Significant accounting policies...........................................................................................................................................

17

4． Critical accounting judgements and key sources of estimation uncertainty.......................................................................

32

5． Operating segment information...........................................................................................................................................

33

6． Property, plant and equipment............................................................................................................................................

37

7． Goodwill and intangible assets............................................................................................................................................

40

8． Impairment losses................................................................................................................................................................

42

9． Investments in associates....................................................................................................................................................

45

10． Deferred taxes and Income taxes.........................................................................................................................................

46

11． Other financial assets and liabilities....................................................................................................................................

51

12． Other assets and liabilities...................................................................................................................................................

52

13． Inventories...........................................................................................................................................................................

53

14． Trade and other receivables.................................................................................................................................................

53

15． Cash and cash equivalents..................................................................................................................................................

53

16． Interest-bearing debt...........................................................................................................................................................

54

17． Finance lease obligations....................................................................................................................................................

55

18． Operating lease arrangements.............................................................................................................................................

56

19． Retirement benefit plans.....................................................................................................................................................

57

20． Other provisions..................................................................................................................................................................

60

21． Trade and other payables....................................................................................................................................................

61

22． Share capital and other equity items...................................................................................................................................

62

23． Financial instruments..........................................................................................................................................................

65

24． Assets held for sale.............................................................................................................................................................

80

25． Share-based payments.........................................................................................................................................................

81

26． Revenue and expenses (excluding finance income and costs)............................................................................................

84

27． Finance income and costs....................................................................................................................................................

86

28． Discontinued operations......................................................................................................................................................

87

29． Other comprehensive income..............................................................................................................................................

89

30． Earnings per share...............................................................................................................................................................

91

31． Non-cash transactions........................................................................................................................................................

93

32． Main subsidiaries................................................................................................................................................................

94

33． Related party disclosures.....................................................................................................................................................

96

34． Business combinations........................................................................................................................................................

97

35． Sale of subsidiary................................................................................................................................................................

97

36． Contingent liabilities...........................................................................................................................................................

97

37． Commitments for expenditure............................................................................................................................................

98

38． Subsequent events...............................................................................................................................................................

98

39． Approval of financial statements........................................................................................................................................

98

2

3

Consolidated Statement of Financial Position
HOYA Corporation and its subsidiaries
As at 31 March 2012
(Thousands of(Millions of Yen)

(Millions of Yen)

U.S.Dollars

Notes

As at 31 March 2011

As at 31 March 2012

As at 31 March 2012

6,8,37

118,574

108,404

1,318,939(Note 2))ASSETSNON-CURRENT ASSETS:
Property, plant and equipment—net
Goodwill

7,8

2,629

1,431

17,413

Intangible assets

7,8,3715,157

13,164160,169

9

11,247

12,935

157,378

Long-term financial assets

11,23

19,043

8,442

102,708

Other non-current assets

8,12,19

1,634

2,119

25,786

1035,901

25,066

304,975

204,185

171,561

2,087,369

63,66562,972

766,172

Investments in associates

Deferred tax assets
Total non-current assets
CURRENT ASSETS:
Inventories

13

Trade and other receivables

14,23

86,45475,691

920,924

Other short-term financial assets

11,23

26,96447,272575,152

Income tax receivables

2,273

874

10,632

9,848

6,738

81,977

Other current assets

12

Cash and cash equivalents

15,23

185,252

204,772

2,491,450

398,318

4,846,307

24

374,456－

5,356

65,169Sub total
Assets held for sale
Total current assets

374,456

403,674

4,911,476

Total assets

578,641575,235

6,998,846

4

(Thousands of(Millions of Yen)

(Millions of Yen)

U.S.Dollars

As at 31 March 2011

As at 31 March 2012

As at 31 March 2012

(Note 2))Notes

EQUITY AND LIABILITIESEQUITY
Share capital

22(1)

6,264

6,264

76,216

Capital reserves22(1)15,89915,899193,438

Treasury shares22(2)(10,964)(10,928)(132,962)

Other capital reserves22(2),25(2,496)(2,505)(30,481)

Retained earnings

22(3),38

5,388,714

427,722442,898

Accumulated other comprehensive income/(loss)(59,590)(66,826)(813,066)

Equity attributable to owners of the Company

376,836

384,8024,681,859

Non-controlling interests

22(4)Total equity

705

(149)

(1,812)

377,541

384,653

4,680,047

60,821－740,001－

LIABILITIESNON-CURRENT LIABILITIES:Interest-bearing long-term debt

16,17,23

100,769

Other long-term financial liabilities

11,23

197

Retirement benefit obligations

19

8,121

5,533

67,319Other provisions

20

1,461

1,662

20,224

Other non-current liabilities

12

1,198

1,251

15,222

Deferred tax liabilities

10

214

360

4,377

111,961

69,627

847,143

Total non-current liabilities
CURRENT LIABILITIES:Interest-bearing short-term debt

16,17,23

2,415

41,224

501,570

Trade and other payables

21,23

51,43342,138

512,685

Other short-term financial liabilities

11,23

Income tax payables

823

642

7,812

3,110

2,509

30,532Other provisions

20

803

612

7,443

Other current liabilities

12

30,556

33,830411,613

89,140120,955

1,471,656

Total current liabilities
Total liabilities

201,100

190,5822,318,799

Total equity and liabilities

578,641575,235

6,998,846

5

Consolidated Statement of Comprehensive Income
HOYA Corporation and its subsidiaries
For the year ended 31 March 2012
(Thousands of(Millions of Yen)

(Millions of Yen)
U.S.Dollars (Note 2))

For the year ended

For the year ended

For the year ended

31 March 2011

31 March 2012

31 March 2012

Notes

Continuing operations
Revenue:Sales

26

373,586

360,673

Finance income

27

907

1,582

4,388,284
19,244

Share of profit of associates

9

1,605

1,864

22,676

Other income

6,26

3,361

3,546

43,142

379,458

367,664

4,473,345

Changes in inventories of goods, products and work in progress(3,777)(4,166)(50,683)

Raw materials and consumables used

84,47277,446942,274

Total Revenue
Expense:Employee benefits expense

19,25,26

88,32487,395

1,063,323

Depreciation and amortisation

6,7,26

335,729

29,11927,594

Subcontracting cost

5,616

4,622

56,234Advertising and promotion expense

9,648

9,621

117,056

26

19,59921,140257,207

Impairment losses

8

1,944

831

10,111

Finance costs

27

2,027

24,661

Loss on disaster

26

2,533
－

5,909

71,890

Other expenses

6,7,18,26

78,736

81,226988,274

Total Expense

316,214313,643

3,816,077

Profit before tax

63,24554,021

657,268

13,688

14,231

173,142

49,55739,790484,126

Commission expense

Income tax expense

10

Profit for the year from continuing operations
Discontinued Operations
Profit for the year from discontinued operations28

10,0222,890

35,162

59,57942,680519,288

406

(319)

(3,882)(14,188)(6,982)(84,951)

241

(113)

(1,380)

512

128

1,560

Total other comprehensive income/(loss)(13,030)(7,286)(88,653)

Total comprehensive income for the year

46,54935,394

430,634

Profit for the year
Other comprehensive income:29

Net gain on revaluation of available-for-sale financial assets
Exchange differences on translation of foreign operations
Share of other comprehensive income of associates
Income tax relating to components of other comprehensive

10

incomeProfit attributable to:
Owners of the Company

59,744

43,219525,839

Non-controlling interests

(166)

(538)

(6,552)

Total

59,57942,680519,288

Owners of the Company

46,75735,983437,798

Non-controlling interests

(208)

(589)

(7,163)

Total

46,54935,394

430,634

Total comprehensive income attributable to:6

(Yen)(Yen)(U.S.Dollars(Note 2))

For the year ended

For the year ended

For the year ended

31 March 2011

31 March 2012

31 March 2012

Notes

Basic earnings per share

30

Continuing operations

115.26

93.48

1.14

Discontinued operations

23.23

6.70

0.08

138.49100.181.22

115.19

93.46

1.14

Basic earnings per share
Diluted earnings per share

30

Continuing operations
Discontinued operations
Diluted earnings per share

7

23.22

6.70

0.08

138.41

100.16

1.22

Consolidated Statement of Changes in Equity
HOYA Corporation and its subsidiaries
For the year ended 31 March 2012
(Millions of Yen)
Other capital
Notes

Capital reserves

Share capital

Retained earnings

reserves

6,264

Balance at 1 April 2010

Treasury shares

15,899(11,010)(3,014)

Profit for the year
Other comprehensive income/(loss)

396,019

59,74429
59,744

Total comprehensive income/(loss) for the year
Transactions with owners
Contributions by and distributions to owners
Acquisition of treasury shares(6)

Disposal of treasury shares
Dividends, 65 Yen per share

52

(26)

22(3)

(28,041)

Change in non-controlling interests
Share-based payments (Stock option)

544

25

Total contributions by and distributions to

47

518

(28,041)47

518(28,041)(10,964)(2,496)

427,722ownersTotal transactions with owners
6,264

Balance at 31 March 201115,899Total comprehensive income/(loss) for the year
Profit for the year
Other comprehensive income/(loss)

43,21929
43,219Total comprehensive income/(loss) for the year
Transactions with owners
Contributions by and distributions to owners
Acquisition of treasury shares(2)

Disposal of treasury shares
Dividends, 65 Yen per share

37(28,042)(393)

Change in non-controlling interests
Share-based payments (Stock option)

(18)

22(3)

402

25

Total contributions by and distributions to

35

(10)

(28,042)35(10)(28,042)(10,928)(2,505)442,898

ownersTotal transactions with owners
Balance at 31 March 2012

6,264

8

15,899(Millions of Yen)
EquityNet gain/(loss)

Exchange
Share of otherAccumulated

attributable tocomprehensive

otherownersNon-controllingincome ofcomprehensiveof theinterests

associates

income/(loss)

Company

on revaluation of differences on

Notes
available-translation offor-sale financial

foreignassetsBalance at 1 April 2010

Total equity

operations

148(44,480)(2,271)(46,603)357,555

1,194

358,749

59,744(166)

59,579213(13,441)

241(12,987)(12,987)(43)(13,030)

213(13,441)

241(12,987)

46,757(208)

46,549Total comprehensive income/(loss) for the year
Profit for the year
Other comprehensive income/(loss)

29

Total comprehensive income/(loss) for the year
Transactions with owners
Contributions by and distributions to owners
Acquisition of treasury shares(6)

Disposal of treasury shares

27

Dividends, 65 Yen per share22(3)(28,041)25

544

Total contributions by and distributions to

27
(69)

(28,110)

(212)

(212)

(27,476)(281)(27,757)

Change in non-controlling interests
Share-based payments (Stock option)

(6)

544

owners(27,476)(281)(27,757)361(57,921)(2,030)(59,590)376,836705

377,541

43,219(538)

42,680(175)(6,948)(113)(7,236)(7,236)(50)(7,286)(175)(6,948)(113)(7,236)35,983(589)

35,394

Total transactions with owners
Balance at 31 March 2011
Total comprehensive income/(loss) for the year
Profit for the year
Other comprehensive income/(loss)

29

Total comprehensive income/(loss) for the year
Transactions with owners
Contributions by and distributions to owners
Acquisition of treasury shares(2)

Disposal of treasury shares

19

Dividends, 65 Yen per share

22(3)Change in non-controlling interests
Share-based payments (Stock option)(2)
19(28,042)(1)(28,044)

(393)

(264)

(657)

(28,016)(265)(28,282)(28,016)(265)(28,282)

384,802(149)

384,653402

25

Total contributions by and distributions to402

ownersTotal transactions with owners
Balance at 31 March 2012

186

(64,869)9(2,143)(66,826)

Consolidated Statement of Changes in Equity
HOYA Corporation and its subsidiaries
For the year ended 31 March 2012-Continued(Thousands of U.S.Dollars (Note 2))
Other capital
Notes

Share capital

Capital reserves

Treasury shares

Retained earnings
reserves

76,216

Balance at 31 March 2011

193,438(133,394)(30,365)

5,204,063

Total comprehensive income/(loss) for the year
Profit for the year
Other comprehensive income/(loss)

525,83929
525,839

Total comprehensive
income/(loss) for the year
Transactions with owners
Contributions by and distributions to owners
Acquisition of treasury shares(21)

Disposal of treasury shares

452

Dividends, 65 Yen per share

(221)

22(3)

(341,188)(4,781)

Change in non-controlling interests
Share-based payments (Stock option)

4,886

25

Total contributions by and distributions to owners

432

(116)

(341,188)

Total transactions with owners

432

(116)

(341,188)(132,962)(30,481)

5,388,714

Balance at 31 March 2012

76,216

193,438(Thousands of U.S.Dollars (Note 2))
EquityNet gain/(loss)

Exchange
Share of otherAccumulated

attributable tocomprehensive

otherownersNon-controllingon revaluation of differences on

Notes
available-translation offor-sale financial

foreignassetsBalance at 31 March 2011

Total equity
interests

income ofcomprehensiveof theassociates

income/(loss)

Company

operations

4,390(704,720)(24,694)(725,024)

4,584,933

8,579

4,593,512

525,839(6,552)519,288(2,129)(84,532)(1,380)(88,042)(88,042)(612)(88,653)(2,129)(84,532)(1,380)(88,042)437,798(7,163)

430,634

Total comprehensive income/(loss) for the year
Profit for the year
Other comprehensive income/(loss)

29

Total comprehensive income/(loss) for the year
Transactions with owners
Contributions by and distributions to owners
Acquisition of treasury shares(21)

Disposal of treasury shares

232

Dividends, 65 Yen per share

22(3)Change in non-controlling interests
Share-based payments (Stock option)

232(341,188)(18)(341,205)(4,781)(3,210)(7,991)(340,872)(3,227)(344,099)(340,872)(3,227)(344,099)

4,681,859(1,812)4,680,047

4,886

25

Total contributions by and distributions to owners
Total transactions with owners
Balance at 31 March 2012

(21)

2,261

(789,253)10(26,074)(813,066)

4,886

Consolidated Statement of Cash Flows (including discontinued operations)
HOYA Corporation and its subsidiaries
For the year ended 31 March 2012
(Millions of Yen)

(Millions of Yen)

(Thousands of
U.S.Dollars (Note 2))

For the year ended

For the year ended

For the year ended

31 March 2011

31 March 2012

31 March 2012

Notes

Cash flows from operating activities
Profit before tax

63,245

Profit before tax from discontinued operations

28

54,021

657,268

10,675

4,509

54,863

Depreciation and amortisation

31,29427,927339,786

Impairment losses

831

10,111

Reversal of impairment losses

1,944
－

(1,854)(22,557)

Finance income(923)(1,589)(19,333)

Finance costs

2,585

2,043

24,854

Share of profits of associates(1,605)(1,864)(22,676)(Gain)/loss on sales of property, plant and equipment

(177)

766

9,314

Loss on disposal of property, plant and equipment

539

1,136

13,823Gain on business transfer

28

OthersCash generated from operations (before movements in working(10,343)(3,617)(44,004)

4,083(3,515)(42,761)

101,31778,795

958,689(58,397)

capital)Movements in working capital
Decrease/(increase) in inventories(10,126)(4,800)Decrease/(increase) in trade and other receivables

2,671

10,791

131,292

Increase in trade and other payables

7,007(6,728)(81,854)

Decrease in retirement benefit obligations and other provisions

(306)

(48)

(589)

100,563

78,010949,141

Interests received

791

1,502

18,279Dividends received

56

69

839

Interests paid

(1,894)(1,765)(21,470)

Income taxes paid

(8,370)(5,809)(70,677)

Sub total

Income taxes refunded

1,368

1,712

20,827

Net cash generated from operating activities

92,51473,719896,940

Cash flows from investing activities
Withdrawals of time deposit

1,548

16,618202,185

Deposits for time deposit(5,366)(65,290)

Proceeds from withdrawals of certificate of deposit(2,959)－10,000121,669

Payments for purchase of certificate of deposit(20,000)(30,000)(365,008)

1,140

562

6,835

(36,041)(31,184)－(379,417)
－

(80)

(972)

Proceeds from sales of property, plant and equipment
Payments for acquisition of property, plant and equipment
Payments for purchase of investment securities
Net cash outflow on acquisition of subsidiary

(569)
－

Payments to minority shareholders on merger

(21)

(7)

(91)

20,654

12,537

152,534

Proceeds from business transfer

28,35

Other proceeds

596

6,567

79,897

Other payments(2,839)(2,142)(26,060)

Net cash used in investing activities(38,491)(22,497)(273,718)11Consolidated Statement of Cash Flows (including discontinued operations)
HOYA Corporation and its subsidiaries
For the year ended 31 March 2012-Continued(Millions of Yen)

(Millions of Yen)

(Thousands of
U.S.Dollars (Note 2))

For the year ended

For the year ended

For the year ended

31 March 2011

31 March 2012

31 March 2012

Notes

Cash flows from financing activities
Dividends paid to owners of the Company(27,971)(28,003)(340,716)

Dividends paid to non-controlling interests

(69)

(1)

(18)

Increase (decrease) in short-term debt

112

(313)

(3,814)

Repayments of long-term borrowings(3,337)(300)(3,651)

Proceeds from disposal of treasury shares

0

0

5

Payments for purchase of treasury shares

(6)

(2)

(21)

Proceeds from exercise of stock options

27
－

19

227

(658)

(8,004)

Net cash used in financing activities(31,244)(29,259)(355,992)

Net increase/(decrease) in cash and cash equivalents

22,77821,964

267,230

Cash and cash equivalents at the beginning of the year

167,938

185,252

2,253,945

Effects of exchange rate changes on the balance of cash and cash

(5,465)(2,443)(29,724)

185,252

204,772

2,491,450

Payments for purchase of non-controlling interests

equivalents in foreign currencies
Cash and cash equivalents at the end of the year

15

Note:
Cash flows from discontinued operations are stated in Note 28 “Discontinued operations” and Note 35 “Sale of subsidiary”.
Non-cash transactions are stated in Note 31 “Non-cash transactions”.

12Notes to the Consolidated Financial Statements

1.General information
HOYA Corporation (the “Company”) is a limited company incorporated in Japan. The addresses of its registered office and principal
place of business are disclosed on the Company’s website (URL http://www.hoya.co.jp). The principal activities of the Company, its
subsidiaries and its associates (the “Group”) are described in Note 5 “Operating segment information”.

2.Basis of consolidated financial statements(1) Basis of consolidated financial statements
The accompanying consolidated financial statements have been prepared in accordance with International Financial ReportingStandards (“IFRSs”).
The accompanying consolidated financial statements are stated in Japanese Yen and rounded to the nearest million yen.
The translations of Japanese yen amounts into U.S. dollar amounts are included solely for the convenience of readers outside Japan
using the rate of ¥82.19 to $1, the foreign exchange rate at 31 March 2012. Such translations should not be construed as
representations that the Japanese yen amounts could be converted into U.S.dollars at that or any other rate.Amounts of less than one
million yen and one thousand U.S. dollars have been rounded to the nearest million in the presentation of the accompanying
consolidated financial statements. As a result, the totals in yen and U.S. dollars do not necessarily agree with the sum of the individual
amounts.
The Company and its domestic subsidiaries maintain their books and prepare their financial statements in accordance with accounting
principles generally accepted in Japan (“Japanese GAAP”) while its foreign subsidiaries maintain their books and prepare theirfinancial statements in conformity with accounting principles generally accepted in the countries of their domicile. Certain
adjustments and reclassifications have been incorporated in the accompanying consolidated financial statements to conform to IFRSs.
These adjustments were not recorded in their statutory books and ledgers.
(2) Effects of applying new accounting standards
The Group adopted the following IFRSs and IFRIC interpretations for the year ended 31 March 2012:

IFRSs
IAS 1

Presentation of Financial Statements

IAS 24

Related Party Disclosures

IAS 27

Consolidated and Separate Financial(2008)

Statements

IAS 34

Interim Financial Reporting

IFRS 3Business Combinations

Subject of new standards/amendments and transitional provisions- Clarification on the presentation of each component of equity in the statement ofchanges in equity- Partial exemption of disclosure for government-related entities- Revision of the definition of related party- Clarification on the transition requirements for amendments to IAS 21, IAS 28,
and IAS 31 arising as a result of revised IAS 27 (2008)- Amendments to emphasise the disclosure principles and to add further guidance,
including additional examples, to illustrate how to apply these principles- Revision to measurement of non-controlling interests- Revision to un-replaced and voluntarily replaced share-based payments
transactions- Transition requirements for contingent consideration from a businesscombination that occurred before the effective date of revised IFRS 3 (2008)

13

IFRS 7IFRIC 13IFRIC 14

- Revision to disclosures of the nature and extent of risks associated with financial
instruments- Clarification that when the fair value of award credits is measured on the basis of
Customer Loyalty Programmes
the redemption value of the awards. The fair value of the award credits should take
into account the expected forfeitures as well as the discounts or incentives thatwould otherwise be offered to customers who have not earned award credits froman initial sale
IAS 19 - The limit on a Defined Benefit - Amendment that an early payment of contribution to cover minimum funding
requirements should be deemed as economic benefits
Asset, Minimum Funding

Financial Instruments: Disclosures

Requirements and their Interaction
IFRIC 19

Extinguishing Financial Liabilities with - Guidance on “debt-equity swap”
Equity Instruments

These standards and interpretations were applied in accordance with respective transitional provisions. There are no standards thatwere early adopted by the Group.
These standards and interpretations have no significant impact for the year ended 31 March 2012.
(3) Standards and interpretations in issue not yet adopted by the GroupAt the date of approval of the consolidated financial statements, the main standards and interpretations that were in issue but not yet
effective for mandatory adoption are as follows:
Mandatory
IFRSs

To be adopted

adoption（from by the Groupthe yearfrom the year

beginning)

ending1 July 2012

March 2014

Subject of new standards/amendment- Revision to the presentation of other comprehensive income- Clarification of the following requirements for comparative
information:
1.Additional comparative information is not necessary forperiods beyond the minimum comparative financial statement
requirements of IAS 1
2. If additional comparative information is provided, theinformation should be presented in accordance with IFRSs,

IAS 1

including disclosure of comparative information for any

Presentation of

additional statements included beyond the minimum

Financial Statements
1 January 2013

March 2014

comparative financial statement requirement
3. An entity that changes accounting policies retrospectively, or
makes a retrospective restatement or reclassification which has amaterial effect on the information in the statement of financial
position at the beginning of the preceding period would present
the statement of financial position at the end of the current
period and the beginning and end of the preceding period
4. Other than disclosure of certain specified information, related
notes are not required to accompany the opening statement offinancial position as at the beginning of the preceding period- Introduction of a presumption, in measuring the deferred tax

IAS 12

Income Taxes

1 January 2012

March 2013

relating to an asset, that recovery of the carrying amount will,
normally be, be through sale14

- Classification of servicing equipment that spare parts, stand-by
IAS 16

Property, Plant, andEquipment

equipment and servicing equipment should be classified as
1 January 2013

Mar 2014

property, plant and equipment when they meet the definition ofproperty, plant and equipment in IAS 16 and as inventory
otherwise- Revision to the treatment of actuarial gains or losses
eliminating the use of the ‘corridor’ approach and all
remeasurement results be recognised in other comprehensive
income (OCI)

IAS 19

Employee Benefits

1 January 2013

March 2014

- Revision to recognition of actuarial gains and losses to berecognised in other comprehensive income- Revision to the calculation method for interest cost with theremoval of expected return on plan assets- Introduction of enhanced disclosures for defined benefit plans

IAS 27

Separate Financial
Statements

1 January 2013

March 2014

1 January 2013

March 2014

Investments in
IAS 28

Associates andJoint Ventures- Transitional provisions for consolidated financial statements to
IFRS 10- Amendments based on the publication of IFRS 10, IFRS11
and IFRS 12- Clarification that income tax relating to distributions to holders
1 January 2013

March 2014of an equity instrument and to transaction costs of an equity
transaction should be accounted for in accordance with IAS 12

Financial
IAS 32- Clarification that to result in offset of a financial asset and a

Instruments:

financial liability, a right to set-off must be available today

Presentation

rather than being contingent on a future event and must be
exercisable by any of the counterparties, both in the normal
1 January 2014

March 2015

course of business and in the event of default, insolvency orbankruptcy- Clarification on which settlement processes would meet therequirement for offsetting that an entity has the intention tosettle a financial asset and a financial liability net or
simultaneously- Revision that the total assets and total liabilities for a particular
reportable segment would be separately disclosed in interim

IAS 34

Interim Financial
Reporting

1 January 2013

March 2014

financial reporting only when the amounts are regularly
provided to the chief operating decision maker and there has
been a material change from the amounts disclosed in the last
annual financial statements for that reportable segment

Financial
IFRS 7

1 July 2011

March 2013

1 January 2013

March 2014

Instruments:
Disclosures- Amendment on enhancing disclosures for transferred financial
assets- Disclosure requirement of information about rights of offset
and related arrangements for financial instruments under anenforceable master netting agreement or similar arrangement

15

- Replacement of IAS 39 for classification of financial assets
measured either at amortised cost or fair value on the basis of
the business model and contractual cash flows of the financial
assets- Amendment to IAS 39 where investments in equity
instruments are measured at fair value through othercomprehensive income, only dividends on the investments arerecognised in profit or loss. Where financial instruments
measured at fair value through profit or loss or amortised cost,
IFRS 9Financial
Instruments

1 January 2015

all relating gains or losses are recognised in profit or loss

March 2016

- Amendment that the changes in fair value of financial
liabilities designated at fair value through profit or loss
(FVTPL) due to
1. changes in the own credit risk
2. othershould be recognised directly in other comprehensive income
and in profit or loss, respectively- Prohibition on the recycling of amount presented in othercomprehensive income to profit or loss

Consolidated
IFRS 10

Financial

1 January 2013

- Guidance for consolidated financial statements to include theMarch 2014

definition of control

Statements- Classification of joint arrangements as either joint operations(combining the existing concepts of jointly controlled assets andjointly controlled operations) or joint ventures (equivalent to theexisting concept of a jointly controlled entity)
IFRS 11

Joint Arrangements

1 January 2013

- Requirement of the use of the equity method of accounting for

March 2014

interests in joint ventures and the elimination of the
proportionate consolidation method- The investor of a joint operation must include in its financial
statements its share of assets, liabilities, revenues and expenses
relating to the joint operation

Disclosure of
IFRS 12Interests in Other

1 January 2013

- Guidance for consolidated financial statements to include theMarch 2014

definition of control

Entities- Classification of joint arrangements as either joint operations
IFRS 13

Fair Value
Measurement

1 January 2013(combining the existing concepts of jointly controlled assets andMarch 2014

jointly controlled operations) or joint ventures (equivalent to theexisting concept of a jointly controlled entity)

The Group will apply the aforementioned standards and interpretations for the respective fiscal years.
The implications from adoption of these standards and interpretations have not yet been fully assessed by the Group, however, thesestandards and interpretations should have no significant impact on the future consolidated financial statements of the Group, except
for IAS 19 “Employee Benefits” and IFRS 9 “Financial Instruments”.

16

3.Significant accounting policies(1) Basis of preparation
The consolidated financial statements have been prepared on the historical cost basis except for certain non-current assets andfinancial instruments measured at revalued amounts or fair value in principle. The principal accounting policies are set out below.

(2) Basis of consolidation① Subsidiaries
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company as
at 31 March of each year. Control is achieved where the Company has the power to govern the financial and operating policies of anentity so as to obtain benefits from its activities.
The operating results of the subsidiaries are included in the consolidated statement of comprehensive income from the effective datethe Group obtained control of the subsidiaries to the effective date the Group lost control, as appropriate. Where necessary,adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by othermembers of the Group. All intra-group transactions, balances, income and expenses are eliminated in full in preparing consolidated
financial statements.
Changes in an interest of a subsidiary without losing control are accounted for as equity transactions. The carrying amounts of thecontrolling and non-controlling interests are adjusted to reflect the changes in their respective percentage interests in the subsidiary. If
there is a difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration
paid or received, the difference is recognised directly in equity and attributed to the owners of the parent.
If loss in control of a subsidiary occurs, the Group recognises in profit or loss any resulting difference of the following:
1. sum of the fair value of any consideration received and any investment retained in the former subsidiary at its fair value;
2. previous carrying amounts of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests.
Non-controlling interests in subsidiaries are identified separately from the Group’s equity therein. Non-controlling interests consist of
those interests at the date of the original business combination and the non-controlling share of changes in equity since the date of the
combination. Total comprehensive income is attributed to the owners of the Company and to the non-controlling interests even if thisresults in the non-controlling interests having a deficit balance.
② Investments in associates
An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an interest in a joint
venture.The results, and assets and liabilities of associates are incorporated in the consolidated financial statements using the equity
method of accounting, except when the investment is classified as assets held for sale, in which case it is accounted for in accordancewith IFRS 5 “Non-current Assets Held for Sale and Discontinued Operations”.
Under the equity method, investments in associates are carried in the consolidated statement of financial position at cost as adjusted
for post-acquisition changes in the Group’s share of the net assets of the associates, less any impairment in the value of individual
investments.
Losses of an associate in excess of the Group’s interest in that associate (which includes any long-term interests that, in substance,
form part of the Group’s net investment in the associate) are recognised only to the extent that the Group has incurred legal orconstructive obligations or made payments on behalf of the associate.
Any excess of the cost of acquisition over the Group’s share of the net fair value of the identifiable assets, liabilities and contingent
liabilities of the associate recognised at the date of acquisition is tested for impairment. Any excess of the Group’s share of the net fairvalue of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition is recognised immediately in profit orloss.
When a group entity transacts with an associate of the Group, profits and losses are eliminated to the extent of the Group’s interest in
the relevant associate.

17

(3) Business combination
Business combinations are accounted for on the basis of IFRS 3 (2008) “Business Combination”, and acquisitions of subsidiaries andbusinesses are accounted for using the acquisition method. Any costs directly attributable to the business combination are expensed as
incurred. The acquiree's identifiable assets and liabilities are measured at their fair values at the acquisition date except for thefollowing:
・ a deferred tax asset or liability arising from the assets acquired and liabilities assumed, and a liability (or asset, if any) related to theacquiree's employee benefit arrangements;
・ a liability or an equity instrument related to the replacement of an acquiree’s share-based payment awards with share-based payment
awards of the acquirer; and・ an acquired non-current asset or disposal group that is classified as held for sale at the acquisition date in accordance with IFRS 5“Non-current Assets Held for Sale and Discontinued Operations”.
When the consideration transferred by the Group in a business combination includes assets or liabilities resulting from a contingent
consideration arrangement, the contingent consideration is measured at its acquisition-date fair value and included as part of theconsideration transferred in a business combination. Changes in the fair value of the contingent consideration that qualify as
measurement period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period
adjustments are adjustments that arise from additional information obtained during the ‘measurement period’ (which cannot exceed
one year from the acquisition date) about facts and circumstances that existed at the acquisition date.
The changes in the fair value of the contingent consideration resulting from events after the acquisition date are accounted for as
follows:(a) Contingent consideration classified as equity shall not be remeasured and any subsequent settlement shall be accounted for inequity.
(b) Contingent consideration classified as an asset or a liability is accounted for in accordance with IAS 37 “Provisions, Contingent
Liabilities and Contingent Assets” and IAS 39 “Financial Instruments: Recognition and Measurement” or other IFRSs as appropriate.
Goodwill is measured on the basis of the excess of the sum of the consideration transferred, the amount of any non-controllinginterests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree over the fair value ofidentifiable assets acquired, net of liabilities assumed at acquisition date. Negative goodwill is recognised immediately in profit or loss
as a bargain purchase gain.
Non-controlling interests in subsidiaries are reported in equity separately from the equity attributable to owners of the Company. Noncontrolling interests are initially measured either at fair value or at the non-controlling interests’ proportionate share of the recognised
amounts of the acquiree’s identifiable net assets on a transaction-by-transaction basis.
When a business combination is achieved in stages, the Group’s previously held equity interest in the acquiree is remeasured to thefair value at the acquisition date (i.e. the date when the Group obtains control) and the resulting gain or loss, if any, is recognised in
profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that were previously recognised in othercomprehensive income are reclassified to profit or loss where such treatment would be appropriate if that interest were disposed of.
Goodwill arising from business combinations before the IFRSs transition date is measured at their carrying amount after performing
an impairment test in accordance with the previous Japanese GAAP.

18

(4) Foreign currencies① Foreign currency transactions
The individual financial statements of each group entity are presented in the currency of the primary economic environment in which
the entity operates (its functional currency). For the purpose of the consolidated financial statements, the financial position, financial
results and cash flows of each group entity are presented in Japanese Yen which is the functional currency of the Company and thepresentation currency for the consolidated financial statements.
In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s functional currency(foreign currencies) are translated at the rates of exchange prevailing at the dates of the transactions.
At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that
date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at thedate when the fair value was determined. Exchange differences are recognised in profit or loss in the period. The exchange gain or loss
is included in ‘other expenses’ in the consolidated statement of comprehensive income.
② Financial statements of foreign operations
The assets and liabilities of foreign operations are translated into Japanese Yen at the foreign exchange rates prevailing at the end ofreporting period. The revenues and expenses of foreign operations are translated into Japanese Yen at the average rates of exchange
for the year. Where there are material fluctuations in exchange rates, the exchange rate at the transaction date is used. Foreignexchange differences arising from translation are initially recognised as exchange differences on translation of foreign operations inother comprehensive income and accumulated in equity, which are reclassified from equity to profit or loss on disposal of the net
investment and included in ‘other expenses’ in the consolidated statement of comprehensive income.

19

(5) Property, plant and equipment
The Group applies the cost model for measuring property, plant and equipment.
Property, plant and equipment are stated at cost, net of accumulated depreciation and accumulated impairment losses. Properties in thecourse of construction for production, supply or administrative purposes, or for purposes not yet determined, are carried at cost, lessany recognised impairment losses. Cost includes the expenses directly attributable to the assets, the initial estimated costs relating to
scrap, removal and retirement, and, for qualifying assets, the borrowing cost for long-term project. Depreciation of these assets
commences when the assets are available for their intended use.
When significant components of property, plant and equipment are required to be replaced periodically, the Group recognises suchparts as individual assets to be depreciated with specific useful lives. All other repair and maintenance costs are recognised in profits
or losses as incurred.
Property, plant and equipment other than land and construction in progress are depreciated mainly on a straight-line basis over thefollowing estimated useful lives. The estimated useful lives, residual values and depreciation method are reviewed at each year end,
with the effect of any changes in estimate being accounted for on a prospective basis.
Buildings and structures 3-50 years
Machinery and carriers 3-10 years
Tools, equipment and fixtures 2-20 years
Leased assets where the transfer of the title of the assets by the end of the lease term is certain are depreciated over their estimateduseful lives. Leased assets where the transfer of the title of the assets by the end of the lease term is not certain are depreciated overtheir estimated useful lives or lease terms whichever is shorter.

(6) Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership tothe lessee. All other leases are classified as operating leases.
Assets held by the Group under finance leases such as machinery and carriers, furniture and fixtures, tools, equipment and fixtures, areinitially recognised as assets of the Group at their fair value at the inception of the lease or the present value of the minimum lease
payments, whichever is lower. The corresponding liability to the lessor is included in the consolidated statement of financial position
as ‘Interest-bearing short-term debt’ or ‘Interest-bearing long-term debt’. Lease payments are apportioned between finance costs andreduction of the lease obligation so as to achieve a constant rate of interest on the declining balance of the liability.
Operating lease payments are recognised as an expense on a straight-line basis over the lease term.
Contingent rent is recognised as an expense in the period in which it is incurred.

20

(7) Intangible assets
The Group uses the cost model for measuring intangible assets. Intangible assets are carried at cost less accumulated amortisation andaccumulated impairment losses.
① Intangible assets acquired separately and intangible assets acquired in a business combination
Intangible assets acquired separately are carried at cost at the time of initial recognition. Intangible assets acquired in a businesscombination and recognised separately from goodwill are initially recognised at their fair value at the acquisition date (which isregarded as their cost), when these are identifiable and their fair value is reasonably measured.
② Internally-generated intangible assets—research and development expenses
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
An internally-generated intangible asset arising from development (or from the development phase of an internal project) is
recognised if, and only if, all of the following have been demonstrated:(a) the technical feasibility of completing the intangible asset so that it will be available for use or sale;(b) the intention to complete the intangible asset and use or sell it;(c) the ability to use or sell the intangible asset;(d) how the intangible asset will generate probable future economic benefits;(e) the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible
asset; and(f) the ability to measure reliably the expenditure attributable to the intangible asset during its development.
The amount initially recognised for internally-generated intangible assets is the sum of the expenses incurred from the date when theintangible assets first meet the recognition criteria listed above. The assets are amortised over the estimated period in which thedevelopment costs are expected to be recovered. If no future economic benefit is expected before the end of the life of assets, theresidual book value is expensed.
Subsequent to initial recognition, internally-generated intangible assets are reported at cost less accumulated amortisation andaccumulated impairment losses. Where no internally-generated intangible asset can be recognised, development costs are recognised
as an expense in the period in which they are incurred.
③ Amortisation of intangible assets
Amortisation is recognised on a straight-line basis over their estimated useful lives as follows. The Group does not have any intangible
assets with indefinite useful lives.
Patents 7-12 years
Technology 10-15 years
Customer list 5-8 years
Software 3-5 years④ Derecognition of intangible assets
An intangible asset is derecognised on disposal or when no future economic benefits are expected from use or disposal. Gains orlosses arising from derecognition of an intangible asset are recognised in profit or loss when the asset is derecognised.

21

(8) Goodwill
Goodwill arising from a business combination is measured as the excess of the sum of the consideration transferred, the amount of any
non-controlling interests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) overthe net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed.
Goodwill is not amortised but is reviewed for impairment at least annually. Goodwill is recorded at cost less accumulated impairment
losses in the consolidated statement of financial position.
For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units, or groups of cash-generating
units, that are expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated
are tested for impairment at each reporting date, or more frequently when there is an indication that the unit may be impaired. If therecoverable amount of the cash-generating unit is less than its carrying amount, the impairment losses are allocated first to reduce thecarrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying
amount of each asset in the unit. Impairment losses recognised for goodwill are not reversed in a subsequent period. On disposal of a
subsidiary, the attributable amount of goodwill is included in the determination of profit or loss on disposal.
The Group’s accounting policy for goodwill arising on the acquisition of an associate is described at “(2) Basis of consolidation – ②
Investments in associates” above.

(9) Impairment of property, plant and equipment and intangible assets
At the end of each reporting period, the Group reviews the carrying amounts of its property, plant and equipment and intangible assets
to determine whether there is any indication that those assets have suffered impairment losses. If any such indication exists, therecoverable amount of the cash-generating unit to which the asset belongs is estimated in order to determine the extent of theimpairment losses (if any).
Where a reasonable and consistent basis of allocation can be identified, corporate assets (assets other than goodwill that contribute to
the future cash flows of both the cash-generating unit under review and other cash-generating units) are also allocated to individual
cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable andconsistent allocation basis can be identified.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash
flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value ofmoney and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of
the asset (or cash-generating unit) is reduced to its recoverable amount.
Where impairment losses subsequently reverse, the carrying amount of the asset (or cash-generating unit) is increased to the revised
estimate of its recoverable amount, such that the increased carrying amount does not exceed the carrying amount that would have been
determined had no impairment losses been recognised for the asset (or cash-generating unit) in prior years. A reversal of impairment
losses is recognised immediately in profit or loss.

22

(10) Derivative financial instruments
Derivatives are initially recognised at fair value at the date the derivative contract is entered into and are subsequently remeasured totheir fair value at the end of each reporting period.
The Group uses forward exchange contracts to manage the foreign exchange exposure of recognised financial assets or liabilities, orfirm future transactions. Hedge accounting does not apply to these derivative transactions.
Details of derivative transactions are set out in Note 23 “Financial instruments”.

(11) Financial assets other than derivative financial instruments① Initial recognition and measurement
All regular way purchases or sales of financial assets, that require delivery of assets within the time frame established by regulation orconvention in the marketplace, are recognised and derecognised on the trade date, and are initially measured at fair value, plustransaction costs.
Financial assets are classified into the following specified categories:· financial assets at fair value through profit or loss (FVTPL),· held-to-maturity investments,· loans and receivables and· available-for-sale financial assets
The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.
② Financial assets as FVTPL
Financial assets are classified as FVTPL when the financial assets are either held for trading or are designated as an FVTPL.
A financial asset other than a financial asset held for trading may be designated as an FVTPL upon initial recognition if:(a) such designation eliminates or significantly reduces a measurement or recognition inconsistency (accounting mismatch) that would
otherwise arise; or(b) the financial asset forms part of a group of financial assets or financial liabilities or both, which is managed and its performance isevaluated on a fair value basis, in accordance with the Group's documented risk management or investment strategy, andinformation about the grouping is provided internally on that basis; or(c) it forms part of a contract containing one or more embedded derivatives, and IAS 39 “Financial Instruments: Recognition andMeasurement” permits the entire combined contract (asset or liability) to be designated as an FVTPL.
Financial assets as FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. The
net gain or loss recognised in profit or loss incorporates any dividend, interest or fair value gain or loss from evaluation on thefinancial assets and is included in the consolidated statement of comprehensive income.
As at 31 March 2011 and 2012, the Group did not have financial assets as FVTPL other than derivative financial instruments
designated as FVTPL.
③ Held-to-maturity investments
Financial assets except derivatives for which the Group has the positive intent and ability to hold to maturity are classified as held-tomaturity investments. Held-to-maturity investments are measured at amortised cost using the effective interest method less any
impairment, with revenue recognised on an effective yield basis. As at 31 March 2011 and 2012, the Group did not have held-tomaturity investments.
The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over
the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (the calculation reflects
effective interest method including premium or discount between the counterparty) through the expected life of the financial assets, or(where appropriate) a shorter period, to the net carrying amount on initial recognition.

23

④ Loans and receivables
Trade receivables, loans, and other receivables that are not quoted in an active market are classified as loans and receivables. Loans
and receivables are measured at amortised cost using the effective interest method, less any impairment. Principally, interest income isrecognised by applying the effective interest rate.
⑤ Available-for-sale financial assets
Financial assets except derivatives, either designated as available-for-sale financial assets or not classified as FVTPL, held-to-maturity
investments or loans and receivables, are classified as available-for-sale financial assets.
Listed shares and listed redeemable notes held by the Group that are traded in an active market are classified as available-for-salefinancial assets and are stated at fair value. The Group also has investments in unlisted shares that are not traded in an active market
but that are also classified as available-for-sale financial assets and stated at fair value. Fair value is determined in the manner
described in Note 23 “Financial instruments”. Gains and losses arising from changes in fair value are recognised in othercomprehensive income and accumulated in accumulated other comprehensive income (net gain or loss on revaluation of available-forsale financial assets), with the exception of impairment losses and foreign exchange gains and losses on monetary assets, which arerecognised in profit or loss.
Where the investment is disposed of or is determined to be impaired, the cumulative gain or loss, that were previously accumulated inaccumulated other comprehensive income (net gain on revaluation of available-for-sale financial assets), is reclassified to profit orloss.
Dividends on available-for-sale financial assets (equity instruments) are recognised in profit or loss when the Group’s right to receive
the dividends is established. The fair value of available-for-sale financial assets (monetary assets) denominated in a foreign currency isdetermined in that foreign currency and translated at the spot rate at the end of the reporting period. The foreign exchange gains andlosses that were recognised in profit or loss are determined based on the amortised cost of the monetary asset. Other foreign exchange
gains and losses are recognised in other comprehensive income.

24

⑥ Impairment of financial assets
Financial assets, other than FVTPL, are assessed for indicators of impairment at the end of each reporting period. Financial assets are
considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initialrecognition of the financial asset, the estimated future cash flows of the investment have been affected.
For listed and unlisted equity investments classified as available-for-sale financial assets, a significant or prolonged decline in the fairvalue of the security below its cost is considered to be objective evidence of impairment.
For all other financial assets, including redeemable notes classified as available-for-sale financial assets and finance lease receivables,
objective evidence of impairment could include:(a) significant financial difficulties of the debtor; or(b) default or delinquency in interest or principal payments; or(c) a probability that the borrower will enter bankruptcy or financial re-organisation.
For certain categories of financial assets, such as trade receivables, assets that are assessed not to be impaired individually are, in
addition, assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could include
the Group’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average
credit period of 90 days to 120 days, as well as observable changes in national or local economic conditions that correlate with default
on receivables.
For financial assets carried at amortised cost, the amount of the impairment loss recognised is the difference between the asset’s
carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of tradereceivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable, including pastdue receivable, is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts
previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account arerecognised in profit or loss.
With the exception of available-for-sale financial assets (equity instruments), if, in a subsequent period, the amount of the impairment
loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously
recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date theimpairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.
In respect of equity instruments classified as available-for-sale financial assets, impairment losses previously recognised in profit orloss are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss is recognised in othercomprehensive income.
⑦ Derecognition of financial assets
The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers
the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group retains
substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset
and also recognises a collateralised borrowing for the proceeds received.

25

(12) Inventories
Inventories are valued at the lower of cost and net realisable value. Net realisable value represents the estimated selling price for theinventories in the ordinary course of business, less all estimated costs of completion and costs necessary to make the sale. Costs,
including purchase costs, process costs, storage costs and all other costs incurred in bringing the inventories to present location andcondition, are assigned to inventories by mainly the weighted-average method. The production costs include an appropriate portion of
fixed and variable overhead expenses.

(13) Cash and cash equivalents
Cash and cash equivalents are composed of cash on hand and bank deposits including term deposits. The term deposits with original
maturities of three months or less are deemed as cash equivalents since they are readily convertible to cash without restriction.

(14) Assets held for saleNon-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered principally through asale transaction rather than through continued use. This condition is regarded as met only when the sale is highly probable and thenon-current asset (or disposal group) is available for immediate sale in its present condition. Management must be committed to thesale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.
When the Group is committed to a sale plan involving loss of control of a subsidiary, all of the assets and liabilities of that subsidiary
are classified as held for sale when the criteria described above are met, regardless of whether the Group will retain a non-controllinginterest in its former subsidiary after the sale.
Assets classified as held for sale are measured at the lower of their previous carrying amount and fair value less costs to sell. Property,
plant and equipment and intangible assets classified as held for sale are not depreciated or amortised after their classification.

26

(15) Treasury shares
The Group’s own equity instruments which are reacquired (treasury shares) are recognised at cost and deducted from equity. No gainor loss is recognised on the purchase, disposal or cancellation of the Group’s own equity instruments. Any difference between the
carrying amount and the consideration given is recognised in other capital reserves.

(16) Share-based payments
Equity-settled share-based payments (stock option), which are incentive plans to Group’s directors, officers and certain employees, aremeasured at the fair value of the equity instruments at the grant date. Details regarding the determination of the fair value of equitysettled share-based transactions are set out in Note 25 “Share-based payments”.
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over thevesting period and other capital reserve is recognised, based on the Group’s estimate of equity instruments that will eventually vest. At
the end of each reporting period, the Group revises its estimate of the number of equity instruments expected to vest. The impact of
the revision of the original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects the revised
estimate, with a corresponding adjustment to other capital reserve.
Accounting policies described above are applied to share-based payments which were granted after 7 November 2002 and vested on
or after 1 April 2008.

(17) Dividend Distribution
Dividend distribution to the Company's shareholders is recognised as a liability in the consolidated financial statements in the period
in which the dividends are approved by the Company's Board of Directors.

27

(18) Equity instruments and financial liabilities issued by the Groupexcluding derivative instruments① Equity instruments (shares)
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.
② Financial liabilities
Financial liabilities are classified as either financial liabilities as FVTPL or other financial liabilities.
③ Financial liabilities as FVTPL
Financial liabilities classified as FVTPL are either held for trading or designated as an FVTPL.
A financial liability is classified as held for trading if:(a) it has been acquired principally for the purpose of selling or redeeming it in the near term; or(b) on initial recognition it is part of a portfolio of identified financial instruments that the Group manages together and has a recent
actual pattern of short-term profit-taking; or(c) it is a derivative that is not a financial guarantee contract and is not designated as a hedging instrument.
A financial liability other than a financial liability held for trading may be designated as an FVTPL upon initial recognition if:(a) such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or(b) the financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and its performanceis evaluated on a fair value basis, in accordance with the Group's documented risk management or investment strategy, andinformation about the grouping is provided internally on that basis; or(c) it forms part of a contract containing one or more embedded derivatives, and IAS 39 “Financial Instruments: Recognition andMeasurement” permits the entire combined contract (asset or liability) to be designated as FVTPL.
Financial liabilities as FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss.
The net gain or loss recognised in profit or loss is included in finance costs in the consolidated statement of comprehensive income.
Fair value is determined in the manner described in Note 23 “Financial instruments”.
As at 31 March 2011 and 2012, the Group did not have financial liabilities as FVTPL.
④ Other financial liabilities
Other financial liabilities, including bank loans, are initially measured at fair value, net of transaction costs. Other financial liabilities
are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yieldbasis.
⑤ Derecognition of financial liabilities
The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or they expire.
⑥ Financial guarantee contract liabilities
Financial guarantee contract liabilities are initially measured at their fair values and subsequently measured at the higher of:· the amount of the obligation under the contract, as determined in accordance with IAS 37 “Provisions, Contingent Liabilities andContingent Assets”; and· the amount initially recognised less cumulative amortisation recognised in accordance with IAS 18 “Revenue”.

28

(19) Retirement benefit costs
For defined benefit plans, the cost of providing retirement benefits is determined using the projected unit credit method, with actuarial
valuations being carried out at the end of each reporting period.
Actuarial gains and losses as at the end of the prior year are amortised over the expected average remaining working lives (mainly 10
years) of the participating employees.
Past service cost is recognised immediately to the extent that the benefits are already vested. The Group’s defined benefit plans aremostly closed pension funds and benefits are already vested. Accordingly, past service costs for those funds are immediately
recognised in profit or loss.
The retirement benefit obligation recognised in the consolidated statement of financial position represents the present value of thedefined benefit obligations as adjusted for unrecognised actuarial gains and losses, and as reduced by the fair value of plan assets.
Contributions to defined contribution plans are recognised as an expense when these are paid.

(20) Provisions, and contingent liabilities assumed in a business combination
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that
the Group will be required to settle the obligation by outflow of resources embodying economic benefits, and a reliable estimate canbe made of the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required tosettle the present obligation at the end of the reporting period (future cash outflow), taking into account the risks and uncertainties
surrounding the obligation.
Where time value of money is important, a provision is measured by its present value to which estimated future cash flows are
discounted using a pre-tax discount rate that reflects the risks specific to the provision. Interest cost associated with the passage oftime is recognised as finance cost.
The types of provisions are as follows:① Asset retirement obligation reserve
The Group recognises provisions for an asset retirement obligation reserve for estimated costs arising from a contractual obligation toa landlord to dismantle and remove leasehold improvements from a leased office at the end of the lease contract, and estimated costs
to decontaminate certain fixed assets. Provision is provided based on past experience of actual cost and considers each property
individually. The discount rate is mainly 2.25% and depends on the useful life and the country. Future expected timing of outflow of
economic benefits is mainly more than one year from each reporting period.
② Warranties provision
The provision is estimated and recognised based on past experience of the occurrence of defective goods such as glasses and the
expected after service costs in the warranty period. Expected outflow of economic benefits in the future is within one year from eachreporting period.
.
③ Contingent liabilities assumed in a business combination
Contingent liabilities resulting from a business combination are initially measured at fair value at the date of acquisition. Subsequent
to initial recognition, such contingent liabilities are remeasured considering expected future payments, possible occurrence and timingof payments at each reporting period.

29

(21) Revenue
Revenue is recognised at fair value of the consideration received or receivable less discount, rebate and consumption taxes.
As for customers’ earning points upon their purchase under customer loyalty programmes, fair value of the points earned is estimatedand accounted for as a reduction in revenue.
① Sale of goods
Revenue from the sale of goods is recognised when all of the following conditions are satisfied:(a) the Group has transferred to the buyer the significant risks and rewards of ownership of the goods;(b) the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control
over the goods sold;(c) the amount of revenue can be measured reliably;(d) it is probable that the economic benefits associated with the transaction will flow to the Group; and(e) the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Specifically, revenue is recognised when the risks and rewards of ownership of the goods transfers from the Group to the customer at
the time of shipment, customer receipt, or upon customer approval depending on the terms of sale.
② Rendering of services
Services provided by the Group are mainly related to the products sold by the Group, including repairs and short term maintenance.
Generally, revenue from rendering of services is recognised when the services have been provided to the customer.
③ Dividend and interest income
Dividend income from investments is recognised when the shareholder’s right to receive payment has been established. Interest
income is recognised based on principal and effective interest rate on an accrual basis.

(22) Government grants
Government grants are measured and recognised at fair value when there is reasonable assurance that the Group will comply with theconditions attached to them and that the grants will be received.
Government grants associated with an expense are recognised as revenue in the same accounting period when the expense is incurred.
Government grants for purchase of assets are recognised as deferred revenue in the consolidated statement of financial position andtransferred to profit or loss on a systematic basis over the useful lives of the related assets.

30

(23) Taxation
Income tax expense represents the sum of the current tax and deferred tax. Current and deferred taxes are recognised in profit or loss,
except when they relate to items that are recognised directly in other comprehensive income or equity, or where they arise from theinitial accounting for a business combination.
The current tax is calculated based on estimated refund or payment from/to taxation authorities. The Group’s current tax liability is
calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period based on the taxable profit
or loss for the Group’s operating activity in each country.
Deferred tax is provided using the liability method on temporary differences, tax loss carry forward and tax credits at the reporting
date.
Deferred tax assets or liabilities are not recognised for the following:· Temporary differences of goodwill· Temporary differences resulted from initial recognition of transactions that do not affect accounting income and taxable income(exclude business combination) of assets/liabilities· Taxable temporary differences associated with investments in subsidiaries and associates where the timing of the reversal of thetemporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable
future.
Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets arising from deductible
temporary differences are only recognised to the extent that it is probable that there will be sufficient taxable profits against which toutilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Unrecognised deferred tax
assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits willallow the deferred tax assets to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled
or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting
period.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same tax authority.
In the case of a business combination, the tax effect is included in the accounting for the business combination, when measuring theamount of goodwill or determining negative goodwill.

(24) Earnings per share
Basic earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary equity holders of the parent
by the weighted-average number of ordinary shares outstanding during the year. Diluted earnings per share amounts are calculated byadjusting profit or loss attributable to ordinary equity holders of the parent and the weighted-average number of ordinary shares
outstanding, for the effect of all potential dilutive ordinary shares.

(25) Reclassification
Certain reclassifications have been made to prior year amounts to conform to the current year presentation.

31

4.Critical accounting judgements and key sources of estimation uncertainty(1) Application of estimates and assumptions
Preparation of consolidated financial statements requires management to make estimates and assumptions in order to determine thereported amounts of certain assets, liabilities, income and expense items, as well as certain amounts disclosed in the notes to theconsolidated financial statements relating to contingent liabilities.
The following are items that require estimates and assumptions and are considered significant:· Determination of net realisable value of obsolete inventory (Note 13 “Inventories”)· Expected cash flow from overdue trade and other receivables (Note 23 “Financial instruments”)· Useful lives of property, plant and equipment, including assets under finance lease (Note 3 “Significant accounting policies”, Note 3(5) “Property, plant and equipment” and Note 3 (6) “Leases”)· Assumptions used to estimate future cash flows of cash-generating units to assess the recoverability of property, plant and equipment
and intangible assets, including goodwill (Note 8 “Impairment losses”)· Valuation techniques used to value available-for-sale financial assets without an active market (Note 23 “Financial instruments”)· Recoverability of deferred tax assets (Note 10 “Income taxes”)· Assumptions used for treatment of retained earnings of overseas subsidiaries and associates for tax purposes (Note 10 “Income
taxes”)· Discrepancy in opinion with a tax authority relating to tax calculations (Note 10 “Income taxes”)· Assumptions used to calculate retirement benefit obligations (Note 19 “Retirement benefit plans”)· Asset retirement obligations arising from legal obligations and constructive obligations (Note 20 “Other provisions”)· Fair value of stock options (Note 25 “Share-based payments”)· Possibility of outflow of resources embodying economic benefits on contingent liabilities (Note 36 “Contingent liabilities”)
The estimates and underlying assumptions are based on historical experience and other factors that are considered to be relevant.
Actual results may differ from those estimates. The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions of the accounting estimates will impact current and/or future periods.
(2) Key sources of risk and estimation uncertainty
The Group’s financial position, financial performance and cash flows are exposed to the following risks and uncertainties:· Tough competition and excess-supply of inventory in the markets the Group belongs to· Development of new products and timing of development· Changes in the political, economic and regulatory environment, shortage of labour, labour strike, natural disasters, and impact of
unexpected international affair in the countries the Group belongs to and operates in· Fluctuation of currency exchange rates· The trend of environmental and governmental regulation
Estimated loss on disaster arising from the flood in Thailand is based on the information and knowledge obtained by the Group. Dueto uncertainty, actual losses of the following may differ from the current estimate:· Loss on physical damage of property, plant and equipments (Note 6 “Property, plant and equipment”)· Inspection costs and removal costs of damaged assets (Note 26 “Revenue and expenses (excluding finance income and costs)”)· Restoration costs of damaged assets (Note 26 “Revenue and expenses (excluding finance income and costs)”)
Loss on disaster arising from the flood in Thailand is set out in Note 26 “Revenue and expenses (excluding finance income andcosts)”.
The global economic stagnation and disaster may have a significant impact on future profitability of the Group. Future profitability of
the Group may affect the estimates for the following:· Impairment of property, plant and equipment and intangible assets including goodwill (Note 8 “Impairment losses”)· Recoverability of deferred tax assets (Note 10 “Income taxes”)

32

5.Operating segment information(1) Overview of major products and services of reportable segments
The reportable segments are constituent units of the Group for which separate financial information is obtained and examined on aregular basis by the Board of Directors, the chief operating decision maker, to determine the allocation of management resources andevaluate the business performance.
In accordance with its management philosophy, the Group has categorised “information technology” and “life and culture” as its
business domains. To achieve sustainable growth in corporate value in these business domains, the Group has been making decisions
on the allocation of management resources and monitoring the operating results.
As a result, the Group consists of three reportable business segments: the Information Technology business, the Life Care businessand Other business, which are consistent with the above business domains.
In the Information Technology business, the Group has developed an extensive range of products following the digitalisation of
information and the emergence of the internet. The Group produces and sells a broad array of I/O (Input/Output Device) related
products in the information and communication sector, including electronics related products that are essential for the modern digital
information and communication technologies, and imaging related products that are necessary to import pictures and video images asdigital information based on optical technologies.
In the Life Care business, the Group produces and sells health care related products that are used in the health care and medical sectors
and medical related products, including medical equipment and medical materials that are used in medical treatments. In operating thisbusiness, it is typically required to obtain approvals and permissions in accordance with the Pharmaceutical Affairs Act in Japan andother regulations, and sophisticated technologies and highly reliable quality control systems represent the critical elements for
operating this business.
Other business mainly includes the business that provides information system services and new businesses.
The main products and services for each “reportable segment” described above are as follows:
Reportable Segment
Information Technology

Major Products and Services

Electronics related products (i) Photomasks and Maskblanks for semiconductors,
Masks and Devices for liquid-crystal displays (LCDs)
Glass disks for hard disk drives (HDDs).
Imaging related products (ii)

Optical lenses, Optical glasses,
Digital camera modules, Optical devices, Laser equipments.

Life Care

Health Care related products

Eyeglass lenses, Contact lenses.

Medical related products

Endoscopes, Medical accessories, Intraocular lenses, Artificial bone.

Other

Design of information systems, other services.

Note:(i) On 28 April 2010, the Company reached and concluded an agreement with Western Digital Corporation, and on 30 June 2010,
executed the transfer of its Media business that manufactures glass media for hard disks. Consequently, the business was classified as
discontinued operations in the year ended 31 March 2011.
(ii) On 1 July 2011, the Company reached and concluded an agreement with Ricoh Co., Ltd. to transfer the PENTAX Imaging
Systems Business, and on 1 October 2011, executed the transfer of the business. Consequently, the business was classified as
discontinued operations in the year ended 31 March 2012, and certain reclassification have been made to the amounts for the year
ended 31 March 2011.

33

(2) Segment revenues and results
The following is an analysis of the Group’s revenue and results from continuing operations by reportable segment.
The accounting policies of the reportable segments are the same as the Group’s accounting policies described in Note 3 “Significant
accounting policies”.
（Millions of Yen）
For the year ended March 2011

Information

Life Care

Other

Total

Adjustments

Consolidated

Technology
Revenue from external

168,971203,006

1,585

373,56124

373,586

455

12

3,568

4,035

(4,035)－

169,426

203,018

5,153

377,597(4,011)

373,586

327

175

9

511

340

851

customers
Inter-segment
Total
Interest income
Interest expense
Depreciation and amortisation
Share of profit (loss) of

(189)

(311)

(0)

(501)

(1,438)(1,939)(17,861)(10,661)(28,632)(487)(29,119)

(8)

185

(110)
－

177

1,428

1,605

associates
Impairment losses
OthersSegment profit before tax－(1,944)－(1,944)－(1,944)(155,702)(153,718)(4,105)(273,525)(6,270)(279,795)

35,99336,743946

73,682(10,438)

63,24526,8849,371

85

36,340917

37,257

Other disclosure
Capital expenditure（Millions of Yen）
For the year ended March 2012

Information

Life Care

Other

Total

Adjustments

Consolidated

360,6721

360,673

Technology
Revenue from external

165,822

192,947

1,903

215

4

3,243

3,463

△3,463－

166,037

192,951

5,146

364,135△3,462360,673

customers
Inter-segment
Total
Interest income

378

301

9

688

824

1,513

Interest expense

(242)

(70)

(5)

(317)

(1,432)(1,749)(17,650)(9,514)(262)(27,594)

115

(167)
－

(27,332)

8

123

1,741

1,864

Depreciation and amortisation
Share of profit (loss) of
associates
Impairment losses
OthersSegment profit before tax

(222)

(609)

－

(831)

－

(831)

(115,292)(158,605)(4,210)(278,107)(1,748)(279,855)

33,01824,568774

58,360(4,339)54,021

19,952

11,780137

31,869795

32,664

Other disclosure
Capital expenditure34

（Thousands of U.S.Dollars (Note 2)）
For the year ended March 2012

Information

Life Care

Other

Total

Adjustments

Consolidated

Technology
Revenue from external

2,017,547

2,347,573

23,156

4,388,275

8

4,388,284

2,615

54

39,461

42,130(42,130)－
4,388,284

customers
Inter-segment
Total

2,020,162

2,347,627

62,6174,430,406(42,122)

Interest income

4,602

3,664

111

8,376

10,02918,405Interest expense(2,944)

(852)

(57)

(3,853)(17,422)(21,275)(214,751)(115,761)(3,187)(335,729)

1,396(2,030)－(332,542)

97

1,493

21,183

22,676(2,698)(7,413)－(10,111)－(10,111)(1,402,746)(1,929,737)(51,227)(3,383,711)(21,271)(3,404,982)

401,722298,923

9,413

710,057(52,790)657,268

242,758

143,321

1,669

387,747

9,669

397,416

Depreciation and amortisation
Share of profit (loss) of
associates
Impairment losses
OthersSegment profit before tax
Other disclosure
Capital expenditure
Note:(i) Adjustments to revenue from external customers of 24 million yen and 1 million yen (8 thousand U.S.dollars) for the years ended
March 2011 and 2012, respectively, represent revenue by R&D department which is not included in any reportable segment.
(ii) Adjustments to segment profit before tax of (10,438) million yen consist of the elimination of an inter-segment transaction of 23
million yen, and profit or loss of the Company’s headquarters, R&D department and overseas holding companies (after elimination ofdividend income from group companies) of (10,460) million yen for the year ended March 2011 and (4,339) million yen ((52,790)
thousand U.S.dollars) consist of elimination of inter-segment transaction of 41 million yen (495 thousand U.S.dollars), and profit orloss of the Company’s headquarters, R&D department and overseas holding companies (after elimination of dividend income fromgroup companies) of (4,379) million yen ((53,284) thousand U.S.dollars) for the year ended March 2012.
(iii) Transfer prices between operating segments are on an arm’s length basis for the years ended 31 March 2011 and 2012,
respectively.
(iv) In addition to the above, capital expenditures in discontinued operations for the years ended March 2011 and 2012 are 1,230
million and 521 million yen (6,343 thousand U.S. dollars), respectively, and the total capital expenditures in the Group for the years
ended March 2011 and 2012 are 38,488 million yen and 33,185 million yen (403,759 thousand U.S.dollars), respectively.
(v) Loss on disaster amounting to 5,909 million yen (71,890 thousand U.S.dollars) is included in Others in Life Care for the year
ended March 2012.
(3) Revenue from major products and services
The following is an analysis of the Group’s revenue from continuing operations from its major products and services for the years
ended 31 March 2011 and 2012:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S.Dollars

For the year ended

For the year ended

For the year ended

31 March 2011

31 March 2012

31 March 2012

(Note 2))

Information Technology
Electronics related products

110,737

105,566

1,284,410

Imaging related products

58,23460,257733,137

Information Technology total

168,971

165,8222,017,547
1,706,728

Life Care
Health Care related products

152,271

140,276

Medical related products

50,73452,671

640,844

Life Care total

203,006

192,947

2,347,573

1,585

1,903

23,15624

1

8373,586

360,673

4,388,284

Other
Corporate (R&D)
Total revenue from externalcustomers

35

(4) Information about geographical areas
Revenue from external customers(Millions of Yen)

(Millions of Yen)

(Thousands of U.S.Dollars

For the year ended

For the year ended

For the year ended

31 March 2011

31 March 2012

31 March 2012

(Note 2))

Japan

146,324

138,892

1,689,888

U.S.A.

38,40036,097439,191

China

44,77350,163

610,331

Others144,089

135,521

1,648,874

Total

373,586

360,673

4,388,284

Note:Geographical areas are based on the location of the customers.
Non-current assets(Millions of Yen)

(Millions of Yen)

(Thousands of U.S.Dollars

For the year ended

For the year ended

For the year ended

31 March 2011

31 March 2012

31 March 2012

(Note 2))

Japan

58,60347,091Thailand

19,555

18,547572,947
225,661

Philippines

17,20914,595

177,571

Others

41,042

43,057

523,869

Total

136,409123,289

1,500,048

Note:(i) Geographical areas are based on the physical location where non-current assets are located.
(ii) Financial instruments, deferred tax assets, and pension plan assets are not included.
Revenue from external customers in Thailand and Philippines is insignificant; therefore the amount is included in Others.
Non-current assets located in U.S.A.and China are insignificant; therefore the balance is included in Others.
(5) Information about major customers
The Group has no revenue from transactions with a single external customer that amounts to 10 percent or more of revenue of theGroup.

36

6.Property, plant and equipment
The following are the cost, accumulated depreciation and impairment losses of property, plant and equipment:（Millions of Yen）
Cost

Buildings and Machinery andstructures

carriers

Land

Tools,

Construction in

Total

progress

equipment andfixtures

Balance at 1 April 2010

81,877250,755

45,25816,254

12,320406,463

Additions

1,085

3,495

3,369

2,940
－

28,762－39,651(82)(24,692)(8,606)－(562)(32,962)(114)

Disposals

Business transfer(1,241)(4,464)(2,111)

Transfer from construction in

3,543

19,662

1,487

(708)
－

(33,638)(3,097)(7,935)(1,879)

(152)

(688)

(13,751)578(1,234)(266)(1,377)(810)(3,110)387,009

progress
Effect of foreign currency
exchange differences
OthersBalance at 31 March 201182,182

227,31745,744

16,957

14,809Additions

1,117

5,088

3,158

628

21,686

31,677

Business transfer(2,348)(2,711)(4,527)(1,771)(5)(11,361)

Disposals(6,981)－(19,082)－(3,040)
－

(275)

(270)
－

(29,649)(5,356)

4,398

16,441

1,414－(22,253)－(933)(3,183)

(740)

(83)

(442)

(5,381)

Reclassification to assets held

(5,356)for saleTransfer from construction inprogress
Effect of foreign currency
exchange differences
OthersBalance at 31 March 2012

498

(2,454)

472

－

(417)

(1,901)

77,933

221,416

42,48010,10013,108365,038（Millions of Yen）
Accumulated depreciation andimpairment losses

Buildings and Machinery andstructures

carriers

Land

Tools,

Construction in

Total

progress

equipment andfixtures－(284,260)－－(27,473)

(58)

－

(58)

Balance at 1 April 2010

(43,433)(211,337)(29,186)(304)

Depreciation expense(3,852)－(19,066)－(4,555)－

Impairment losses

175

25,725106－－

26,006

Disposals

1,205

4,298

1,709

－

7,251

Effect of foreign currency

1,317

6,187

1,367

39
－

－

8,870

Business transfer

exchange differences
(60)

640

651

－

－

1,230

Balance at 31 March 2011

(44,649)(193,553)(29,910)(323)－(268,435)

OthersDepreciation expense(3,451)(4,429)－－(24,331)(222)(16,451)－－

Impairment losses

－

－

(222)

Reversal of impairment losses

425

3

35

－

－

462

Business transfer

984

2,246

3,876

－

－

7,107

4,756
－

15,700
－

2,736
－

58
－

－
－

23,250
－

544

2,775

561

－

－

3,880

(29)

1,610

73

－

－

1,653

(264)

－

(256,634)

Disposals
Reclassification to assets held
for saleEffect of foreign currency
exchange differences
OthersBalance at 31 March 2012

(41,642)(187,670)(27,057)37

（Millions of Yen）
Carrying amount

Buildings and Machinery andstructures

carriers

Land

Tools,

Construction in

Total

progress

equipment andfixtures

Balance at 1 April 2010

38,44339,417

16,071

15,951

12,320122,203

Balance at 31 March 201137,53333,764

15,834

16,63514,809118,574

Balance at 31 March 2012

36,292

33,745

15,423

9,836

13,108108,404(Thousands of U.S.Dollars (Note 2))
Cost

Buildings and Machinery andstructures

carriers

Land

Tools,

Construction in

Total

progress

equipment andfixtures

Balance at 31 March 2011

999,9022,765,745

556,570

206,319

180,178

Additions

13,587

61,906

38,4197,642

263,857

385,411

Business transfer(28,562)(32,987)(55,080)(21,549)(55)(138,233)

Disposals(84,943)－(232,169)－(36,987)－(3,349)(3,288)－(360,736)(65,169)

53,514200,040

17,199－(270,753)－(11,352)(38,733)(9,007)(1,006)(5,372)(65,470)

6,065(29,856)

5,739－(5,078)(23,131)

948,2112,693,947

516,852

122,888

159,487

4,441,386

Transfer from construction in

4,708,714(65,169)

progress
Reclassification to assets held
for saleEffect of foreign currency
exchange differences
OthersBalance at 31 March 2012

(Thousands of U.S.Dollars (Note 2))
Accumulated depreciation andimpairment losses

Buildings and Machinery andstructures

carriers

Land

Tools,

Construction in

Total

progress

equipment andfixtures

Balance at 31 March 2011

(543,244)(2,354,946)(363,913)(3,924)－(3,266,027)

Depreciation expense(41,983)(53,885)－－(296,029)(2,698)(200,161)－－

Impairment losses－－(2,698)

Reversal of impairment losses

5,170

31

424

－

－

5,626

Business transfer

11,97827,32847,164－－86,470

Disposals

57,864

191,02133,288282,880

6,615

33,769

6,830

707
－

－

Effect of foreign currency－

47,214(354)

19,585887－－

20,118(506,653)(2,283,372)(329,205)(3,217)－(3,122,447)

exchange differences
OthersBalance at 31 March 2012

38

(Thousands of U.S.Dollars (Note 2))
Carrying amount

Buildings and Machinery andstructures

carriers

Land

Tools,

Construction in

Total

progress

equipment andfixtures

Balance at 31 March 2012

441,558

410,575

187,647

119,671

159,487

1,318,939

Note:(i) Gain and loss arising from sale or disposal of property, plant and equipment for the years ended 31 March 2011 and 2012 are set
out in Note 26 “Revenue and expenses (excluding finance income and costs).” Gain and loss on sale of assets held for sale were
included in the above ‘gain on sale of property, plant and equipment’ and ‘loss on sale of property, plant and equipment’ in Note 26.
(ii) Details of impairment losses and reversal of impairment losses are set out in Note 8 “Impairment losses” and details of business
transfer are set out in Note 28 “Discontinued operations”.
(iii) The damage on plant equipment of certain subsidiaries of the Group due to the massive flooding in Thailand is included in'Disposals'. The details of the loss on disaster are set out in Note 26 “Revenue and expenses (excluding finance income and costs).”(iv) Property, plant and equipment under construction are included in ‘construction in progress’ in the table above.
(v) Building with carrying amount of 29 million yen (350 thousand U.S.dollars) has been pledged as collateral to secure 14 million
yen (174 thousand U.S.dollars) ‘Interest-bearing long-term debt’ and 3 million yen (39 thousand U.S.dollars) ‘Interest-bearing shortterm debt’ as at 31 March 2012. Refer to Note 16 “Interest-bearing debt” for details.
(vi) Details of commitments for the acquisition of property, plant, and equipment are set out in Note 37 “Commitments for
expenditure”.
(vii) There is no borrowing cost capitalised and included in the cost of acquisition of property, plant and equipment.
The following are carrying amounts for property, plant and equipment under finance leases as at 31 March 2011 and 2012, which areincluded in each corresponding amount in the table above. Impairment losses are recognised on a part of leased assets:(Millions of Yen）
Buildings and structures Machinery and carriers

Tools, equipment andfixtures

Total

Balance at 31 March 2011

345

209

137

690

Balance at 31 March 2012

101

26

211

338

(Thousands of U.S.Dollars (Note 2))
Buildings and structures Machinery and carriers
Balance at 31 March 2012

1,227

317

Tools, equipment andfixtures

Total

2,570

The obligation under finance lease (Note 17 “Finance lease obligations”) is secured by the leased assets on which the lessor has
ownership.

39

4,114

7.Goodwill and intangible assets
The following are the cost, accumulated amortisation and impairment losses of goodwill and intangible assets:（Millions of Yen）
Cost

Goodwill

Intangible assets
SoftwareBalance at １April 2010

Technology

Patents

Others (i)

Total

5,484

12,717

8,235

11,946

5,423

38,321

Additions

－

1,206

－

－

94

1,300

Disposals (ii)

－

(299)

－

－

(94)

(393)

(504)

(399)

－

(26)

(327)

(753)

Others

(923)

96

－

－

923

1,018

Balance at 31 March 2011

4,057

13,321

8,235

11,9206,019

39,494

－

1,294
－

－

4
－

63

1,360

31

31

Effect of foreign currency
exchange differences

Additions
Acquisitions through business

124－

combinations
Disposals (ii)

－

(598)

－

－

(33)

(632)

Business transfer(94)(1,661)－(1,379)(67)(3,107)

Effect of foreign currency

(182)

(198)

2

0

(493)

(688)

(0)

8

2,554

46

(2,222)

385

3,905

12,166

10,791

10,591

3,297

36,844exchange differences
OthersBalance at 31 March 2012

（Millions of Yen）
Accumulated amortisation andGoodwill

impairment losses

Intangible assets
SoftwareTechnology

Patents

Others

Total

Balance at 1 April 2010－

(8,878)(4,566)(5,058)(2,038)(20,539)

Amortisation expense (iii)－(1,381)－(489)－(1,296)－(654)(3,821)

(458)

(458)

274

－

－

94

368

280

－

68

27

376

Impairment loss (iv)
Disposals (ii)
Effect of foreign currency(1,428)－－exchange differences
OthersBalance at 31 March 2011
Amortisation expense (iii)
Impairment loss (iv)
Reversal of impairment loss

－

(41)

－

－

(223)

(264)

(1,428)(9,746)(5,055)(6,286)(3,251)(24,338)－(1,308)－(695)－(1,240)－(353)－(3,596)
－

371

－

782

21

1,174

(609)
－

(iv)
Business transfer

－

1,273

－

1,965

－

593

－

644
－

48

Disposals (ii)

12

605

Effect of foreign currency

22

115

(14)

0

440

542

exchange differences
OthersBalance at 31 March 2012

(458)

(91)

(1,171)

(72)

1,302

(32)

(2,474)(8,793)(6,934)(6,172)(1,781)(23,679)（Millions of Yen）
Carrying amount

Goodwill

Intangible assets
SoftwareTechnology

Patents

Others

Total

Balance at 1 April 2010

5,484

3,839

3,669

6,888

3,385

17,782

Balance at 31 March 2011

2,629

3,575

3,180

5,634

2,768

15,157

Balance at 31 March 2012

1,431

3,373

3,856

4,419

1,516

13,16440

(Thousands of U.S.Dollars (Note 2))
Cost

Goodwill

Intangible assets
SoftwareBalance at 31 March 2011

Technology

Patents

Others (i)Total

49,360162,071

100,192

145,030

73,229480,522－

15,740－－16,552

－

47
－

765

1,510

371

371

0

(7,281)

－

－

(404)

(7,685)Business transfer(1,138)(20,204)－(16,784)(810)(37,797)

Effect of foreign currency(2,217)(2,407)27

4(5,999)(8,374)

Additions
Acquisitions through businesscombinations
Disposals (ii)exchange differences
OthersBalance at 31 March 2012－

97

31,070560(27,039)

4,687

47,514148,017

131,289

128,856

40,113448,276(Thousands of U.S.Dollars (Note 2))
Accumulated amortisation andGoodwill

impairment losses

Intangible assets
SoftwareTechnology

Patents

Others

Total

Balance at 31 March 2011(17,376)(118,580)(61,503)(76,480)(39,550)(296,114)

Amortisation expense (iii)－(15,917)－(8,452)－(15,084)－(4,298)－(43,751)
－

4,513

－

9,511

259

14,283

Impairment loss (iv)
Reversal of impairment loss

(7,413)－(iv)
Business transfer－

15,491

－

7,833

580

23,903

Disposals (ii)

－

7,220

－

144

7,365

Effect of foreign currency

265

1,403

(165)

－
8

5,352

6,598

exchange differences
Others(5,576)(1,111)(14,249)(877)

15,846(391)

Balance at 31 March 2012

(30,101)(106,981)(84,368)(75,090)(21,668)(288,107)(Thousands of U.S.Dollars (Note 2))
Carrying amount

Goodwill

Intangible assets
SoftwareBalance at 31 March 2012

17,413

Technology

41,03646,921Patents

Others

53,76718,445

Total
160,169

Note:(i) There were no significant internally-generated intangible assets for the years ended 31 March 2011 and 2012.
(ii) Loss on disposal of intangible assets is set out in Note 26 “Revenue and expenses (excluding finance income and costs)” (5) Other
expenses.
(iii) Amortisation expense is included in the line item ‘Depreciation and amortisation’ in the consolidated statement of comprehensive
income.
(iv) Refer to Note 8 “Impairment losses” for details of impairment losses and reversal of impairment losses.
No intangible assets have been pledged as collateral to secure the debt. There is no restriction on legal title of these assets. Details ofcommitments for the acquisition of intangible assets are set out in Note 37 “Commitments for expenditure”.
The Group owns technology and patents for manufacturing of the medical related products. The carrying amount of technology is
2,691 million yen (32,737 thousand U.S.dollars) as at 31 March 2012 (as at 31 March 2011: 3,180 million yen). The carrying amountof patents is 3,802 million yen (46,255 thousand U.S.dollars) as at 31 March 2012 (as at 31 March 2011: 4,883 million yen). The
remaining useful lives of technology are five years as at 31 March 2012 (as at 31 March 2011: six years). The remaining useful livesof patents are three years as at 31 March 2012 (as at 31 March 2011: four years).

41

8.Impairment losses
The following are the details of impairment losses recognised.
Impairment losses have been included in the line item ‘Impairment losses’ in the consolidated statement of comprehensive income.
(Millions of Yen)

(Millions of Yen)

(Thousands of U.S.Dollars (Note 2))

For the year ended 31 March 2011

For the year ended March 2012

For the year ended March 2012

Buildings and structures

－

222

2,698

Land

58

－

－

58

222

2,698

1,428

609

7,413

458

－

－

1,944

831

10,111

Subtotal losses on property, plantand equipment
Goodwill
Intangible assets
Total impairment losses
The following are the details of impairment losses reversed.

Reversal of impairment losses have been included in the line item ‘Profit for the year from discontinued operations’ in the
consolidated statement of comprehensive income.
(Millions of Yen)

(Thousands of U.S.Dollars (Note 2))

For the year ended 31 March 2012

For the year ended 31 March 2012

Buildings and structures

425

5,170

Machinery and carriers

331

Tools, equipment and fixtures

35

424

Sub total - property, plant and equipment

462

5,626

Software

371

4,513

Patents

782

9,511

Others
Sub total - intangible assets
Other non-current assets

21

259

1,174

14,283

218

2,648

1,854

22,557(Long-term prepaid expenses)
Total reversal of impairment losses(Discontinued operations)(1) Cash-generating units
The Group identifies each strategic business unit (“SBU”) as cash-generating unit for impairment testing purposes. Each business unit
has been set based on the production and sale of product lines. For any asset expected to be sold or disposed, or any idle asset, an
individual asset is tested for the necessity of impairment.
(2) Impairment losses on assets in business units
The Group performed impairment test on the goodwill and intangible assets acquired from the purchase of Starion in April 2009. The
impairment test was based on the latest business plan and the following impairment losses were recognised for the year ended 31
March 2011.
Recoverable amount was measured at the value in use and determined using cash flow projections based on the financial budgets forthe following five fiscal years which had been approved by the Group’s management, and a discount rate of 15% per annum which is
the SBU’s pre-tax weighted average capital cost (WACC).
Impairment losses (Millions of Yen)

Life Care
Medical related products (Medical instruments for hemostasis)
Goodwill

1,428

Other intangible assets

458
Life Care Total

1,886

42

The Group performed impairment test on the goodwill and intangible assets acquired from the purchase of Starion in April 2009. The
impairment test was based on the latest business plan and the following impairment losses were recognised for the year ended 31
March 2012.
Recoverable amount was measured at the value in use and determined using cash flow projections based on the financial budgets forthe following five fiscal years which had been approved by the Group’s management, and a discount rate of 14% per annum which is
the SBU’s pre-tax weighted average capital cost (WACC).
(Millions of Yen)

(Thousands of U.S.Dollars (Note 2))

Impairment losses

Impairment lossesLife Care
Medical related products (Medical instruments for hemostasis)
GoodwillLife Care Total

609

7,413

609

7,413

The Group reversed impairment losses that had been recognized for the year ended 31 March 2009. The impairment test is based on
the latest business plan.
Recoverable amount was measured at fair value less costs to sell, as adjusted for incremental costs that would be directly attributable
to the disposal of the asset. Fair value less costs to sell is based on the best information available to reflect the amount that the Group
could obtain.
(Millions of Yen)

(Thousands of U.S.Dollars (Note 2))

Reversal of impairment losses

Reversal of impairment losses

Information Technology
Imaging related products (Digital cameras)
Property, plant and equipment
Intangible assets
Other non-current assets
Information Technology Total (Discontinued operations)

462

5,626

1,174

14,283

218

2,648

1,854

22,557(3) Impairment losses on assets to be sold or disposed, and idle assets
The carrying amount of assets to be sold or disposed of, and idle assets resulting from business restructuring, which were not expected
to be used in the future, was written down to the estimated recoverable amount which was measured at fair value less related selling
costs, and the corresponding impairment loss was recognised. The fair value was based on appraisal or publicly posted land price. For
any asset to be disposed of, its recoverable amount was considered to be zero.
Impairment losses were recognised as follows for the year ended 31 March 2011:
Impairment losses (Millions of Yen)

Life Care
Land

58
Life Care Total

58

Total

58

Note:
Refer to Note 24 “Assets held for sale”. The Group decided the sale of the land subsequent to the year ended 31 March 2011. The sale
was completed prior to the approval of the consolidated financial statements for the year ended 31 March 2011.
Impairment losses were recognised as follows for the year ended 31 March 2012:(Millions of Yen)

(Thousands of U.S.Dollars (Note 2))

Impairment losses

Impairment losses

Information Technology
Building and structures

222

2,698

Information Technology Total

222

2,698

Total

222

2,698

43

(4) Goodwill allocated to cash-generating units
When the recoverable amount of the goodwill specifically associated with a cash-generating unit is lower than the carrying amount ofsuch goodwill, an impairment loss is recognised and the goodwill is written down to the recoverable amount. Recoverable amount of
goodwill allocated to cash-generating units was measured at the value in use and it was determined using cash flow projections basedon the financial budgets for the following five fiscal years which had been approved by the Group’s management, and a discount rateof 11% to 15% per annum which is the cash-generating units’ pre-tax weighted average capital cost (WACC).
The carrying amount of goodwill was allocated to the cash-generating units as follows:（Millions of Yen）
As at 31 March 2011

Information

Life Care

Technology

Adjustments

Imaging related

Health Care related

Medical related

products

products

products

Laser equipments, etc.

Eyeglass lenses

Medical accessories

R&D

Total

Japan

－

－

－

－

－

Americas

96
－

150

1,121
－

31
－

1,398

Europe
Asia
Total

776

776

－

455

－

－

455

96

1,381

1,121

31

2,629
（Millions of Yen）

As at 31 March 2012

Information

Life Care

Technology

Adjustments

Imaging related

Health Care related

Medical related

products

products

products

Laser equipments, etc.

Eyeglass lenses

Medical accessories

R&D

Total

Japan

－

－

－

－

－

Americas

－

148

59

31
－

238

Europe

－

637

Asia

－

446

110
－

－

446

－

1,232

169

31

1,431

Total

747

(Thousands of U.S.Dollars (Note 2))
As at 31 March 2012

Information

Life Care

Technology
Imaging related

Health Care related

Medical related

products

products

products

Laser equipments, etc.

Eyeglass lenses

R&D

Total

Medical accessories

Japan

－

－

Americas－

Europe

－

Asia

－
－

Total

Adjustments

－

－

－

1,804

718

5,426

1,337
－

372
－

2,894

7,756

－

5,426

14,9862,055

372

17,413

9,093

Note:
Impairment losses on goodwill of Medical related products (Medical accessories) were recognised in the amount of 1,428 million
yen and 609 million yen (7,413 thousand U.S.dollars) for the year ended 31 March 2011 and 2012, respectively.

44

9.Investments in associates
Details of the Group’s main associates are as follows:
Ownership interest (%)

Place of
Name of associate

Principal activity incorporation andSegment

operation
AVAN STRATE INC.

Production and

As at

As at

31 March 2011

31 March 2012

JAPAN

Corporate

46.6

46.6

BRAZIL

Life care

25.0

25.0

sale of glass
substrate for thinfilm transistor(TFT) liquid
crystalOPTOTAL HOYA S.A.

Production andsale of eyeglass
lensesPRIMEOPTICS CO.,LTD.(i)

Other

JAPAN

Corporate

50.0－

JIASHAN CANDEO OPTICAL

Production and

CHINA

Information

49.0

49.0

GLASS CO.,LTD.

sale of special

Technology

glass, such ascolored glass
Note:(i) The Group sold all shares of PRIMEOPTICS CO.,LTD. on 31 August 2011, therefore, the Group has no voting rights of thecompany as at 31 March 2012.
Summarised financial information in respect of the Group’s associates is set out below.
(Millions of Yen)

(Millions of Yen)

(Thousands of U.S.Dollars(Note 2))As at / for the year

As at / for the year

As at / for the year

ended 31 March 2011

ended 31 March 2012

ended 31 March 2012

Total assets

173,199

177,6072,160,931

Total liabilities(1,597,650)(130,229)(131,311)

Net assets

42,97046,296563,281Group’s share of net assets of associates

11,247

12,935

157,378

Total revenue

56,88459,054

718,508
668,073

Total expense

52,97054,909Total profit/(loss) for the period

3,914

4,145

50,435

Group’s share of profit/(loss) of associates

1,605

1,864

22,676

Note:
There are no quoted stock prices available for associates.

45

10.Deferred taxes and Income taxes(1) Deferred taxes
Details of deferred tax assets and liabilities are as follows:（Millions of Yen）
As at

Recognised in profit or

1 April 2010

loss

Recognisedin other comprehensive
incomeAs at
31 March 2011

Temporary differences
Enterprise tax payable

87

(63)

－

24

Written down inventories

2,113

(409)

－

1,704

Allowance for doubtful

323

(114)

－

209

592

22

－

615
4,004

accounts
Other provision
Accrued expenses

3,945

59

－

Unrealised profit on inventories

1,883

(589)

－

1,294

Depreciation expense

3,912

1,082

－

4,994

Tax goodwill

9,177(4,117)－

5,060

Impairment losses

1,859

(813)
－

－

1,046

17

704

721

3,922

737

－

4,659

Sub total

27,829(4,203)704

24,330

Undistributed retained earnings

(530)

29

－

(501)

(2,944)313－－(2,632)

(53)

(193)

(246)

(365)

(923)

－

(1,288)(3,892)

(582)

(193)

(4,667)

20,732(4,707)

－

6

(6)

－

16,024－

Sub total

20,737(4,713)－16,024

Total

44,674(9,498)512

35,687

Exchange differences ontranslating foreign operations
Othersof subsidiaries
Depreciation expense
Net gain/(loss) on revaluationof available-for-sale financial
assetsOthers
Sub total
Tax losses carry forward and tax
credits
Tax losses carry forward
Tax credits

Note:
The difference between the amount of “Recognised in profit or loss” recognised in the above and “Deferred tax expenses” recognised
in Note 10 “Income taxes” (2) Income taxes, is due to foreign exchange fluctuations.

46

（Millions of Yen）
Recognised in
As at

Recognised inother

1 April 2011

profit or loss

comprehensive

Business Transfer

As at
31 March 2012

incomeTemporary differences
Enterprise tax payable

24

15

－

－

39

Written down inventories

1,704

(827)

－

－

878

Allowance for doubtful

209

266

－

(3)

471

accounts
Other provision

615

60

－

(3)

672

Accrued expenses

4,004

388

－

(4)

4,389

Unrealised profit on inventories

1,294

1,064

－

(110)

2,248

Depreciation expense

4,994(1,275)－

3,716

Tax goodwill

5,060(4,963)

－

(3)
－
－

1,127

721

81
－

－
(16)

－

705

4,659

(1,296)

－

(14)

3,349

Sub total

24,330(6,487)

(16)

(137)

17,689

Undistributed retained earnings

(501)

(104)

－

－

(605)

(2,632)

(969)
－

－

－

(3,601)

144

－

(102)

Impairment losses
Exchange differences on

1,046

96

translating foreign operations
Othersof subsidiaries
Depreciation expense
Net gain/(loss) on revaluation(246)

of available-for-sale financial
assets(1,288)

781

－

－

(507)

(4,667)

(292)

144

－

(4,814)

16,024－(5,034)－－

10,990

841

－

－

841

Sub total

16,024(4,193)－－

11,831

Total

35,687(10,972)

128

(137)

24,706

Others
Sub total
Tax losses carry forward and tax
credits
Tax losses carry forward
Tax credits

Note:
The difference between the amount of “Recognised in profit or loss” recognised in the above and “Deferred tax expenses” recognised
in Note 10 “Income taxes” (2) Income taxes, is due to foreign exchange fluctuations.

47

(Thousands of U.S.Dollars (Note 2))
Recognised in
As at

Recognised inother

1 April 2011

profit or loss

comprehensive

Business Transfer

As at
31 March 2012

incomeTemporary differences
Enterprise tax payable

291

183

－

－

474

Written down inventories

20,737(10,058)－－

10,679Allowance for doubtful

2,537

3,237

－

(42)

5,733

accounts
Other provision

7,480

730

－

(36)

8,174

Accrued expenses

48,719

4,724

－

(46)

53,396

Unrealised profit on inventories

15,742

12,947－(1,334)27,355

Depreciation expense

60,757(15,511)－45,210Tax goodwill

61,563(60,389)

－

(36)
－

Impairment losses

12,728980－－

13,708Exchange differences on

8,773

－

(193)

－

8,580

1,173

translating foreign operations
56,691(15,774)－(173)

40,744

Sub total

296,018(78,932)(193)(1,667)215,226

Undistributed retained earnings(6,096)(1,265)－－(7,361)

Depreciation expense(32,018)－－(43,810)

Net gain/(loss) on revaluation(2,993)(11,793)
－

1,754

－

(1,239)(15,672)

9,508

－

－

(6,164)(56,778)(3,550)1,754－(58,574)

194,966－(61,247)－－

133,719

10,228－－

10,228Sub total

194,966(51,019)－－

143,947

Total

434,206(133,500)

1,560(1,667)

300,599

Othersof subsidiaries

of available-for-sale financial
assetsOthers
Sub total
Tax losses carry forward and tax
credits
Tax losses carry forward
Tax credits

Note:
The difference between the amount of “Recognised in profit or loss” recognised in the above and “Deferred tax expenses” recognised
in Note 10 “Income taxes” (2) Income taxes, is due to foreign exchange fluctuations.

48

Tax losses carry forward and deductible temporary differences for which deferred tax assets have not been recognised are as follows:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S.Dollars(Note 2))

As at

As at

As at

31 March 2011

31 March 2012

31 March 2012

Tax losses carry forward

12,603

6,775

Deductible temporary differences

1,446

1,791

21,794

14,0488,566

104,222

Total

82,429The expiration date and amounts of tax losses carry forward for which deferred tax assets are not recognised are as follows:(Thousands of U.S.Dollars(Millions of Yen)

(Millions of Yen)

As at

As at

As at

31 March 2011

31 March 2012

31 March 2012

Note 2))

Year 1

547

560

6,813

Year 2639

888

10,800Year 3

1,654

825

10,033

Year 4
Year 5 or later
Total

700

966

11,754

9,063

3,537

43,02912,603

6,775

82,429The aggregate amounts of temporary differences associated with undistributed retained earnings of the subsidiaries for which deferred
tax liabilities have not been recognised at 31 March 2011 and 2012 were 176,124 million yen and 186,795 million yen (2,272,720
thousand U.S.dollars), respectively. No liability has been recognised in respect of these differences because the Group is in a position
to control the timing of the reversal of the temporary differences and it is probable that such differences will not reverse in theforeseeable future.
For the years ended 31 March 2011 and 2012, the Company incurred tax losses. The Company recognised deferred tax assets on the
tax losses as at 31 March 2011 and 31 March 2012 of 15,155 million yen, and 9,292 million yen (113,061 thousand U.S.dollars),
respectively.
Both of these tax losses were incurred from the same business combination which was a temporary factor. The Company concluded
that the entire amount of the deferred tax assets relating to the business combination are recoverable using the estimated future taxable
income based on the financial budgets for the following five fiscal years which had been approved by the Group’s management.

49

(2) Income taxes
In Japan, the normal effective statutory tax rate is approximately 40.5% for the years ended 31 March 2011 and 2012.
Current or deferred taxes at other tax jurisdictions are calculated by the tax rates generally applied to those tax jurisdictions.
Details of current tax expense and deferred tax expense are as follows:(Thousands of(Millions of Yen)

(Millions of Yen)

For the year ended

For the year ended

For the year ended

31 March 2011

31 March 2012

31 March 2012

U.S.Dollars (Note 2))

Current tax expense:(i)Current year

5,441

4,889

59,485

Prior years

180

1

7

5,621

4,890

59,493

Total current tax expense
Deferred tax expense:(ii)Origination and reversal of temporary difference

8,781

9,336

113,588

Changes in tax rates

(61)

1,624

19,763

Total deferred tax expense

8,720

10,960133,351

Total income tax expense

14,341

15,850

192,843

Continuing operations

13,688

14,231

173,142

Discontinued operations

653

1,619

19,702Note:(i) ‘Current tax expense’ includes previously unrecognised tax benefits from tax losses carry forward, tax credits and deductible
temporary differences. These benefits were 794 million yen and 489 million yen (5,946 thousand U.S.dollars) for the years ended
March 2011 and 2012, respectively.
(ii) ‘Deferred tax expense’ includes previously unrecognised tax benefits from tax losses carry forward, tax credits, deductible
temporary differences, and expenses or benefits arising from write-downs of deferred tax assets or the reversal of previous writedowns of deferred tax assets. These effects increased/decreased the deferred tax expense by 820 million yen and (72) million yen ((873) thousand U.S.dollars) for the years ended March 2011 and 2012, respectively.
Adjustments from normal effective statutory tax rate to actual tax rate are as follows: the actual tax rate represents the ratio of income
tax expense and profit before tax for continuing operations.

Effective statutory tax rate

For the year ended

For the year ended

31 March 2011

31 March 2012

40.5%

40.5%

Expenses not deductible for tax purposes

2.9%

2.0%

Effect of unrecognised deferred tax assets

0.7%(0.7)%

Impact of different tax rates applied to overseas subsidiaries(21.4)%(21.2)%

Profits and losses on investments in associates(1.3)%(1.3)%

Impact of different tax rates for elimination of unrealised profits on inventory(0.6)%

0.0%

Adjustment on deferred tax assets and liabilities due to the change of corporate tax
rate(0.1)%

3.0%

Others0.9%

4.0%

Actual tax rate

21.6%

26.3%

There was no effect on income tax resulting from dividends paid to shareholders.

50

11.Other financial assets and liabilities
Details of other financial assets and liabilities are as follows:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S.Dollars

As at

As at

As at

31 March 2011

31 March 2012

31 March 2012

(Note 2))Other financial assets
－

1,058

12,878

3,591

2,982

36,280Loans and receivables

42,90952,462

638,301

Allowance for doubtful accounts

(493)

(789)

(9,599)FVTPL financial assets (derivative instruments)
Available-for-sale financial assets
Loans and receivables

Loans and receivables –net
Total

42,416

51,673628,702

46,00755,713

677,860

19,043

8,442

102,708

26,96447,272575,152

Non-current assets total (Long-term financial
assets)Current assets total (Other short-term financial
assets)(Millions of Yen)

(Millions of Yen)

(Thousands of U.S.Dollars

As at

As at

As at

31 March 2011

31 March 2012

31 March 2012

(Note 2))Other financial liabilities
FVTPL financial liabilities (derivative instruments)

763

383

4,656

Other financial liabilities measured at amortised

257

259

3,156

1,020

642

7,812

197

－

－

823

642

7,812

cost
Total
Non-current liabilities total (Other long-term
financial liabilities)
Current liabilities total (Other short-term financial
liabilities)

51

12.Other assets and liabilities
Details of other assets and liabilities are as follows:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S.Dollars

As at 31 March 2011

As at 31 March 2012

As at 31 March 2012

1,603

1,907

23,204

31

212

2,582

1,634

2,119

25,786

2,554

2,234

27,180(Note 2))
Non-current: Other assets
Long-term prepaid expenses
Others
Total
Current: Other assets
Prepaid expenses
Advance payment

4,072

570

6,938

Refundable consumption taxes

2,182

3,354

40,812Others

1,040

579

7,047

9,848

6,738

81,977

Total(Millions of Yen)

(Millions of Yen)

(Thousands of U.S.Dollars

As at 31 March 2011

As at 31 March 2012

As at 31 March 2012

(Note 2))
Non-current: Other liabilities
Deposit received and other

1,198

1,251

15,222

Total

1,198

1,251

15,222

10,67010,191

123,993

Current: Other liabilities
Accrued salary/Accrued bonus/Accrued vacation
pay
Other accrued expenses

12,50010,900132,624

Advance received/Deferred revenue (i)

4,188

3,531

42,965

Accrued consumption taxes

1,339

1,155

14,054

Others (ii)

1,858

8,053

97,97730,556

33,830411,613

Total
Note:
(i) Details of advance received and deferred revenue are as follows:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S.Dollars(Note 2))As at 31 March 2011

As at 31 March 2012

As at 31 March 2012

Customer loyalty programmes

646

110

1,337

Government grants

188

103

1,253

3,354

3,318

40,375

4,188

3,531

42,965

Advance received/Deferred revenue

OthersTotal(ii) Proceed from insurance claim of 5,476 million yen (66,622 thousand U.S. dollars) for the massive flooding in Thailand in October
2011 is included in ‘Others’.

52

13.Inventories
Details of inventories are as follows:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S.Dollars

As at 31 March 2011

As at 31 March 2012

As at 31 March 2012

(Note 2))
Goods and products

30,89728,404Work in progress

7,138

6,636

345,584
80,736

Raw materials

15,022

18,134

220,638

Supplies

10,608

9,798

119,215

Total

63,66562,972

766,172

Inventories expected to be sold

590

1

9

after more than 12 months
No inventories were pledged as collateral to secure debt.
The cost of inventories recognised as expense during the years ended 31 March 2011 and 2012 was 194,211 million yen and 192,092
million yen (2,337,175 thousand U.S.dollars), respectively.
The cost of inventories recognised as expense in respect of write-down and the reversal of such write-down is as follows:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S.Dollars(Note 2))For the year ended

For the year ended

31 March 2011

31 March 2012

Amount of write-down

For the year ended
31 March 2012

1,302

1,743

21,210－－－

Amount of reversal of writedown

14.Trade and other receivables
Details of trade and other receivables are as follows:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S.Dollars(Note 2))As at 31 March 2011

As at 31 March 2012

As at 31 March 2012

Accounts receivable

78,781

69,671

847,687

Notes receivable

8,669

6,478

78,814

Other receivables

999

1,415

17,216

Allowance for doubtful accounts(1,995)(1,873)(22,792)

Total

86,45475,691

920,924

The credit terms for customers are set between 90 days to 120 days on average.
Refer to Note 23 “Financial instruments” for credit risk management and fair value of trade and other receivables.

15.Cash and cash equivalents
Details of cash and cash equivalents are as follows:(Millions of Yen)

(Millions of Yen)

(Thousands of
U.S.Dollars(Note 2))As at 31 March 2011 As at 31 March 2012 As at 31 March 2012
Cash and cash equivalents
Cash and deposit

201,530

210,4542,560,575

less time deposit over three months(16,278)(5,681)(69,125)(Total) Cash and cash equivalents at consolidated statement of

185,252

204,772

2,491,450

185,252

204,772

2,491,450

financial position
Cash and cash equivalents at consolidated statement of cash flows

53

16.Interest-bearing debt
Details of interest-bearing debt are as follows:(Millions of(Millions of(Thousands of

Average

Yen)

Yen)

U.S.Dollars

interest rate

(Note 2))(%)

As at 31 March As at 31 March As at 31 March
2011

(i)

2012

456

441

5,365

0.14

2013-2020

1,259

905

11,016

2.99－

Long-term bank loans (excluding current portion)
Current portion of long-term bank loans

2012

Due date

816

137

1,661

3.94

－

99,839－59,899728,781－－

39,988486,534－－

Long-term finance lease obligations (Note 17)

474

481

5,855

－

2013-2018

Short-term finance lease obligations (Note 17)

340

194

2,360

－

－

Interest-bearing debt Total

103,184

102,045

1,241,571

Non-current debt total

100,769

60,821740,001

Current debt total

2,415

41,224

501,570

Short-term bank loans
Bonds (ii)Current portion of bonds (ii)

Note:(i) Interest rates are based on the weighted-average rates that applied to the balances at the end of each fiscal year.
(ii) The summary of issuance conditions for bonds is as follows:(Millions of (Millions ofCompany

Item

Yen)

Issue Date

As at 31

Yen)
As at 31

(Thousands of
U.S.Dollars(Note 2))As at 31

Interest rate(%)

Collateral(Millions of

Due

Yen)

March 2011 March 2012 March 2012
HOYA

Unsecured

CORPORATION

bond(No.1)

HOYA

Unsecured

CORPORATION

bond(No.2)

HOYA

Unsecured

CORPORATION

bond(No.3)

Total

－

11

20

September

39,96539,988486,534

1.42

－

2007

September
2012

11

19

September

24,95424,967

303,767

1.62

－

2007

September
2014

11

20

September

34,92034,932425,015

1.93

－

2007

September
2017－

99,83999,8871,215,315－－－

The obligations under finance lease are secured by the leased assets for which the lessor has ownership. Refer to Note 17 “Financelease obligations”.
There is no debt with covenants as at 31 March 2012.
Details of the remaining contractual maturity for long-term borrowings and bonds, and fair values are set out in Note 23 “Financial
instruments”.

54

17.Finance lease obligations
Details of finance lease obligations are as follows:
Minimum lease payments

Present Value of Minimum
Lease Payments(Millions of Yen) (Millions of Yen)

(Thousands of(Millions of Yen) (Millions of Yen)

(Thousands of

U.S.Dollars

U.S.Dollars(Note 2))

(Note 2))As at 31 March

As at 31 March

As at 31 March

As at 31 March

As at 31 March

As at 31 March

2011

2012

2012

2011

2012

2012

Amounts payable under financeleases:No later than one year

345

203

2,475

340

194

2,360

Later than one year but not later

460

473

5,756

421

402

4,895

63

111

1,350

52

79

960

813

675

8,215

813

675

8,215

340

194

2,360

474

481

5,855

than five years
Later than five years
Total

868

787

9,581

Less future finance charges

(55)

(112)

(1,366)

Present value of lease

813

675

8,215

obligations
Less amount due for settlement
within 12 months
Amount due for settlement after
12 months
Basically, the Group has not entered into any new finance lease contract. The Group enters into a lease contract only when it
concludes that it has a number of advantages of having a lease arrangement in respect of cost reduction or the avoidance of the risk
associated with product obsolescence. The average remaining lease term is approximately three to four years as at 31 March 2012.
Some lease contracts include renewal options or purchase options. However, there is no sub-lease contract, contingent rent, escalation
payments and specific limitations (such as dividends, additional borrowing, and additional lease contract), included in these lease
contracts.
The Group’s fair values of lease obligations are set out in Note 23 “Financial instruments”.

55

18.Operating lease arrangements
Details of minimum lease payments and contingent lease payments for the period under operating lease arrangements are as follows:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S.Dollars

For the year ended

For the year ended

For the year ended

31 March 2011

31 March 2012

31 March 2012

(Note 2))

Minimum lease payments

6,090

6,003

73,044

239

338

4,114

6,328

6,342

77,157

Contingent rent
Total

The amounts above are included in the line item ‘Other expenses’ in the consolidated statement of comprehensive income.
Contingent rent related to rent contracts for stores at shopping malls are based on the stores’ sales amounts.
As at 31 March 2011 and 2012, the maturity periods of the outstanding commitments under non-cancellable operating leases are as
follows:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S.Dollars(Note 2))For the year ended

For the year ended

For the year ended

31 March 2011

31 March 2012

31 March 2012

No later than 1 year
Later than 1 year but not later than 5 years
Later than 5 years
Total

765

832

10,117

1,138

1,098

13,358200

1,003

12,207

2,103

2,933

35,682

Operating lease payments represent rentals payable by the Group for the land used for an office, building and machinery. The averageremaining operating lease terms for those assets as at 31 March 2012 are 12 years, two years and two years, respectively.
Some lease contracts include renewal options. However, there is no purchase option, sub-lease contract, escalation payments or
restrictions (such as dividends, additional borrowing, and additional lease contract), included in these lease contracts.

56

19.Retirement benefit plans
The Group has contributory defined contribution plans and defined benefit plans, and non-contributory defined benefit plans. For theaccounting policies adopted by the Group for retirement benefit plans, refer to Note 3 “Significant accounting policies (19) Retirement
benefit costs”.
The Company and its domestic subsidiaries mainly have defined contribution plans. However, the plans, taken over from PENTAXCORPORATION as a result of the merger, are closed defined benefit plans and represent a significant portion of the Group’s
retirement benefit obligations. Overseas subsidiaries have benefit plans required by local law and regulations of each country. Unless adefined benefit plan is required by the laws of the country in which the overseas subsidiaries operate, a defined contribution plan has
been put into place.
The Group does not have retirement benefit plans other than pension plans and retirement allowances.
(1) Defined benefit plans
Pension plans carried forward from the merger with PENTAX CORPORATION included the following two plans as at 31 March2012:
Details of each of the plans are as follows:①Retirement allowances②Defined benefit plans

Based on accumulated points earned taking Based on accumulated points earned

Pension benefits

into account qualification and employment during the duration of membership,
period. One time retirement payment.

accumulated title point and accumulated
working point

Option for pension plans－

Selection available for a member with 20
years or more participation. For others, aone-time retirement payment or transfer toanother plan.

Survivors pension benefits－

None (one-time payment to survivor)-The portion of Tax Qualified Pension
Plans (TQPP) as of 1 October 2009 is
paid as survivors' pension benefits.

－

Promised rate of return

2.5% per annum- 5.5% per annum for vested employee
benefits of TQPP as of 1 October 2009.

Benefit payment frequency－

Six times annually

The amounts included in the consolidated statement of financial position arising from the Group’s obligations in respect of its defined
benefit plans are as follows:(Millions of Yen)

(Millions of Yen)

(Thousands of
U.S.Dollars (Note 2))

As at 31 March 2011

As at 31 March 2012

As at 31 March 2012

Obligations under defined benefit plans (funded)

14,314

12,041

146,506

Fair value of plan assets(8,135)(7,757)

94,374

Total

6,179

4,285

52,132

Obligations under defined benefit plans (unfunded)

4,262

2,932

35,674

Net actuarial gains not recognised(2,334)(1,864)(22,685)

Net liability arising from defined benefit plans

8,108

5,352

65,121

Liability

8,121

5,533

67,319Asset (Other non-current assets)

(13)

(181)

(2,198)obligations
Balance in the consolidated statement of financial
position

57

Amounts recognised in profit or loss in respect of these defined benefit plans are as follows:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S.Dollars(Note 2))For the year ended

For the year ended

31 March 2011

31 March 2012

Current service cost

For the year ended
31 March 2012

665

560

6,812

Interest cost

360

335

4,077

Expected return on plan assets

(115)

(215)

(2,615)

Actuarial losses

351

4,275

Gain on business transfer

383
－

(166)

(2,017)

Total

1,293

866

10,532

946

701

8,535

Discontinued operations

347

164

1,997

Actual return on plan assets

(194)

194

2,365

Continuing operations

Movements in the present value of the defined benefit obligations are as follows:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S.Dollars

For the year ended

For the year ended

For the year ended

31 March 2011

31 March 2012

31 March 2012

(Note 2))

Opening defined benefit plans obligations

19,031

18,576226,014

Current service cost

665

560

6,812

Interest cost

360

335

4,077

Actuarial (gains) losses

(142)
－

201

2,441

(3,395)(41,309)(14,931)

Decrease due to business transfer
Benefits paid

(1,154)(1,227)

Foreign currency translation gain (loss)

(184)

(76)

(925)

Closing defined benefit plans obligations

18,576

14,973

182,180

Movements in the present value of the plan assets are as follows:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S.Dollars

For the year ended

For the year ended

For the year ended

31 March 2011

31 March 2011

31 March 2012

(Note 2))

Opening fair value of plan assets

8,418

8,135

98,977

Expected return on plan assets

115

215

2,615

Actuarial gains (losses)

(310)

(21)

(250)

Contributions from employer

543

6,611

Decrease due to business transfer

500
－

(364)

(8,619)(4,425)

Benefits paid

(469)

(708)

Foreign currency translation gain (loss)

(120)

(44)

(535)

Closing fair value of plan assets

8,135

7,757

94,374The Group expects to make a contribution of 433 million yen (5,268 thousand U.S.dollars) to the defined benefit plans for the year
ending 31 March 2013.

58

The major categories of plan assets are as follows:
As at 31 March 2011

As at 31 March 2012

Domestic equity instruments

23%

16%

Overseas equity instruments

37%

23%

Domestic debt instruments

8%9%Overseas debt instruments

18%

20%

General accounts at life insurance

11%

10%

0%

21%

companies (guaranteed return)Cash and deposits
Others
Total

3%

1%

100%

100%

The principal assumptions used for the purposes of the actuarial valuations were as follows:
As at 31 March 2011

As at 31 March 2012

Discount rate

1.6%

1.5%

Expected rate of return on plan assets

0.0%

1.6%

Expected rate of salary increase

7.3%

7.3%

For funded defined benefit plan, the overall long-term expected rate of return is determined based on the current and the future
portfolio of the plan assets as well as the expected return and risk based on historical return trends of various long-term investments.
Adjustments for fund status in the past four years were as follows:(Millions of Yen) (Millions of Yen) (Millions of Yen) (Millions of Yen) (Thousands of
U.S.Dollars(Note 2))
As at

As at

As at

As at

As at

31 March 2009

31 March 2010

31 March 2011

31 March 2012

31 March 2012

21,473

19,031

18,576

14,973

182,180

Fair value of plan assets(8,567)(8,418)(8,135)(7,757)(94,374)

Present value of defined benefit plansobligations
Fund deficit

12,906

10,613

10,4417,217

87,806

Adjustments on plan liabilities

1,338

172

(142)

201

2,441

Adjustments on plan assets(1,738)

1,127

(310)

(21)

(250)

(2) Defined contribution plans
The total expense recognised was 1,485 million yen including 26 million yen for discontinued operations, and 1,377 million yen(
16,752 thousand U.S. dollars) including 17 million yen (208 thousand U.S. dollars) for discontinued operations, for the years ended 31
March 2011 and 2012, respectively.
(3) Severance payments
Under certain circumstances (such as retirement before the normal retirement date), additional payments are made upon retirement.
The total expense recognised was 2,172 million yen including 2 million yen from discontinued operations, and 1,493 million yen (18,164 thousand U.S.dollars) including 10 million yen ( 126 thousand U.S. dollars) for discontinued operations, for the years ended 31
March 2011 and 2012, respectively.

5920.Other provisions
Details of other provisions are as follows:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S.Dollars

As at 31 March 2011

As at 31 March 2012

As at 31 March 2012

(Note 2))
Asset retirement obligation reserve
Warranties provision
Total
Non-current liabilities
Current liabilities

1,473

1,677

791

597

20,399
7,268

2,264

2,274

27,667

1,461

1,662

20,224

803

612

7,443

An analysis of the change in provisions is as follows:(Millions of Yen)
Asset retirement obligation

Warranty provision

Total

reserve
Balance at 1 April 2011

1,473

791

2,264

Provision for the year

298
18

597
－

896

Interest cost associated with passage of time
Reduction resulting from settlement for the year

(97)

(666)

(764)

Business transfer

(22)

(327)

(349)

5

203

208

1,677

597

2,274

Effect of foreign currency exchange differences
Balance at 31 March 2012

18

(Thousands of U.S.Dollars (Note 2))
Asset retirement obligation

Warranty provision

Total

reserve
Balance at 1 April 2011

17,926

9,619

27,545

Provision for the year

3,628

7,268
－

10,896222(1,183)(8,107)(9,290)(263)(3,978)(4,241)

67

2,465

2,532

20,3997,268

27,667

Interest cost associated with passage of time
Reduction resulting from settlement for the year
Business transfer
Effect of foreign currency exchange differences
Balance at 31 March 2012

222

Note:
Refer to Note 3 “Significant accounting policies (20) Provisions, and contingent liabilities assumed in a business combination” forexplanation for each provision.

60

21.Trade and other payables
Details of trade and other payables are as follows:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S.Dollars

As at 31 March 2011

As at 31 March 2012

As at 31 March 2012

(Note 2))
Accounts payable

34,27026,354

320,646

Notes payable, trade

1,837

1,199

14,583

Processing cost payable

612

497

6,042

14,706

14,057

171,025

Other payables
Notes payable for capital investment
Total

7

32

389

51,43342,138

512,685

Trade notes payable are due 120 days on average.
Accounts payable are due 30 to 60 days from the invoice date in Asia except for Japan, and due 90 to 120 days from the invoice datein Japan. Accounts payable in Europe and U.S.A. are mainly payable to the Group entities, thus upon consolidation these tradeaccounts payable are eliminated. The Group maintains the global fund pool at Japan, Europe and the U.S.A. to make payments within
the due date.

61

22.Share capital and other equity items(1) Share capital and capital reserves
Number of

Number of issued

Number of

Share capitalauthorised sharessharesoutstanding shares(Ordinary shares (Ordinary shares (Ordinary shares

Share capital

Capitalreserves(Millions ofreserves(Millions of (Thousands of (Thousands of

Yen)

Yen)

with no par-with no par-with no par-value）

value）

value）

1,250,519,400

435,017,020

431,399,756

6,264

Increase (i)－－14,416

Balance at

1,250,519,400

435,017,020

Increase (i)－Balance at

1,250,519,400

Balance at 1

CapitalU.S.Dollars

U.S.Dollars(Note 2))

(Note 2))

15,89976,216

193,438

－

－

－

－

431,414,172

6,264

15,89976,216

193,438－

11,248－－－－435,017,020

431,425,420

6,264

15,89976,216

193,438

April 2010

31 March 2011

31 March 2012
Note:(i) Increase or decrease in number of outstanding shares is due to increase or decrease in treasury shares.
(2) Treasury shares and other capital reserves① Treasury shares
AmountNumbers of shares
Balance at 1 April 2010

(Millions of Yen)

3,617,264

11,0102,816

6Repurchase of odd-lot shares
Disposal of odd-lot shares to shareholders with odd-lot shares

(32)

(0)

Decrease on exercise of stock option(17,200)(52)

Balance at 31 March 2011

3,602,848

10,964

Repurchase of odd-lot shares

972

2

Disposal of odd-lot shares to shareholders with odd-lot shares

(220)

(1)

Decrease on exercise of stock option(12,000)(37)

Balance at 31 March 2012

3,591,600

10,928AmountNumbers of shares(Thousands of U.S.Dollars(Note 2))

Balance at 31 March 2011

3,602,848

133,394

Repurchase of odd-lot shares

972

21

Disposal of odd-lot shares to shareholders with odd-lot shares

(220)

(8)

Decrease on exercise of stock option(12,000)(444)

Balance at 31 March 2012

3,591,600

132,96262

② Other capital reserves
Gain (loss) on resaleof treasury shares

Stock option (i)Others

Total(Millions of Yen)

(Millions of Yen)

(Millions of Yen)

(Millions of Yen)

Balance at 1 April 2010

(4,863)

1,849－(3,014)

Disposal of treasury shares

(22)
－

(4)

－

(26)

544

－

544

Balance at 31 March 2011

(4,885)2,389－(2,496)

Disposal of treasury shares
Change in non-controlling interests (ii)

(15)
－

(3)
－

Share-based payments－(4,900)Share-based payments

Balance at 31 March 2012

Gain (loss) on resale

－

(18)
(393)

402

(393)
－

2,788

(393)

(2,505)

Stock option (i)Others

Total(Thousands of(Thousands of(Thousands of(Thousands of

U.S.Dollars

U.S.Dollars

U.S.Dollars

U.S.Dollars(Note 2))

(Note 2))

(Note 2))of treasury shares

Balance at 31 March 2011

(59,431)

29,066

Disposal of treasury shares

(186)
－

(34)
－

－
(59,618)

Change in non-controlling interests (ii)
Share-based payments
Balance at 31 March 2012

402

(Note 2))－(30,365)－(221)(4,781)(4,886)(4,781)－

33,918(4,781)(30,481)(4,886)Note:(i) Refer to Note 25 “Share-based payments” for details of stock option.
(ii) The Group acquired 49 percent of shares in HOYA OPTICS SA (PTY) LTD., a consolidated subsidiary in the year ended 31
March 2012, and the ownership interest of the Group has increased to 100 percent.
The difference between the decrease of non-controlling interests (propotional interests of the carrying amount of the net assets)
and the consideration paid in the amount of 393 million yen (4,781 thousand U.S. dollars) is included in 'Other capital reserves' in the
consolidated statement of financial position.
(3) Retained earnings and dividends
Amount(Millions of Yen)
396,019

Balance at 1 April 2010
Profit for the year (attributable to owners of the Company)

59,744

Dividends(28,041)

Balance at 31 March 2011

427,722

Profit for the year (attributable to owners of the Company)

43,219Dividends(28,042)

Balance at 31 March 2012

442,898

63

Amount(Thousands of U.S.Dollars (Note 2))
5,204,063

Balance at 31 March 2011
Profit for the year (attributable to owners of the Company)

525,839

Dividends(341,188)

Balance at 31 March 2012

5,388,714

Details of dividends are as follows:
Date of resolution

Dividends per
share

Dividends per
share

Total Dividends(U.S.Dollars(Yen)(Note 2))

(Millions of
Yen)

Total Dividends(Thousands of
U.S.Dollars

Record date

Effective date

31 March 2010

2 June 2010

30 September 2010

30 November 2010

(Note 2))31 May 201035

15,0995 November 201030

31 May 2011

35

0.43

15,099183,708

31 March 2011

2 June 2011

31 October 2011

30

0.37

12,943

157,473

30 September 2011

30 November 2011

30 May 2012

35

0.43

15,100183,71931 March 2012

1 June 2012

12,942

Dividends payable are included in the line item of ‘Other current liabilities’ in the consolidated statement of financial Position.
(4) Non-controlling interests
Amount(Millions of Yen)
Balance at 1 April 2010

1,194

Profit for the year (attributable to non-controlling interests)(166)

Translation differences for foreign operations (other comprehensive income)(43)

Dividends(69)

Decrease arising from a liquidation of subsidiaries(212)

Balance at 31 March 2011

705

Profit for the year (attributable to non-controlling interests)(538)

Translation differences for foreign operations (other comprehensive income)(50)

Dividends(1)

Decrease arising on additional acquisition of shares by the Company(264)

Balance at 31 March 2012(149)
Amount(Thousands of U.S.Dollars (Note 2))

Balance at 31 March 2011

8,579

Profit for the year (attributable to non-controlling interests)(6,552)

Translation differences for foreign operations (other comprehensive income)(612)

Dividends(18)

Decrease arising on additional acquisition of shares by the Company(3,210)

Balance at 31 March 2012

(1,812)64

23.Financial instruments(1) Capital risk management
The Group manages its capital for its continuous growth and to maximise the corporate value of the Group.
The net debt and equity of the Group is as follows:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S.Dollars(Note 2))

As at

As at

As at

31 March 2011

31 March 2012

31 March 2012

Interest-bearing debt

103,184

102,045

1,241,571

Less: Cash and cash equivalents

185,252

204,772

2,491,450

Net debt(82,067)(102,727)(1,249,879)

Equity377,541

384,653

4,680,047

In order to maximise the corporate value of the Group, cash flows have been a priority of the Group management. As at 31 March2011 and 2012, the Group maintained cash and cash equivalents balances in excess of interest-bearing debt balances. The Group is not
subject to any externally imposed capital regulation as at 31 March 2012.
Details of interest-bearing debt, cash and cash equivalents and equity are described in Note 16 “Interest-bearing debt”, Note 15 “Cashand cash equivalents”, and Note 22 “Share capital and other equity items”, respectively.

(2) Significant accounting policies
Accounting policies and criteria for recognition of financial assets, financial liabilities and equity instruments, basis of measurement
and recognition of income and expenses are described in Note 3 “Significant accounting policies”.

65

(3) Categories of financial instruments(Millions of Yen)

(Millions of Yen)

(Thousands of

As at

As at

As at

31 March 2011

31 March 2012

31 March 2012

U.S.Dollars (Note 2))

Financial assets
－

1,058

Trade and other receivables

86,45475,691

920,924

Other financial assets (ii)42,416

51,673628,702

3,591

2,982

36,280185,252

204,772

2,491,450

763

383

4,656

FVTPL financial assets(derivative instruments) (ii)12,878Loans and receivables

Available-for-sale financial assets (ii)Cash and cash equivalents
Financial liabilities
FVTPL financial liabilities (derivative instruments) (iii)
Financial liabilities measured at amortised cost
Trade and other payables

51,43342,138

512,685

Interest-bearing debt

103,184

102,045

1,241,571

257

259

3,156

Other financial liabilities (iii)Note:(i) The items above are not included in discontinued operations and disposal group held for sale. The Group does not have held-tomaturity investments and derivative instruments designated as hedging instruments. Likewise, the Group does not have financial
assets or financial liabilities valued using the fair value option.
(ii) FVTPL financial assets (derivative instruments), other financial assets and available-for-sale financial assets are included in‘Long-term financial assets’ or ‘Other short-term financial assets’ in the consolidated statement of financial position.
(iii) FVTPL financial liabilities (derivative instruments) and other financial liabilities are included in ‘Other long-term/short-term
financial liabilities’ in the consolidated statement of financial position.

(4) Financial risk management
In its operations, the Group is exposed to various financial risks. The Group undertakes risk management steps to minimise the effectsof these financial risks. In an effort to manage these risks, the Group’s risk management approach is to eliminate the source of theserisks or to minimise the risks that are not avoidable.
The Group does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.
There are certain cases in which the Group obtains additional borrowings from financial institutions to react to temporary cash
shortages or uses forward foreign exchange contracts to sustain cash flows. The above financial risks are managed by the financial
department of the Group.

66

(5) Market risk management
The Group is exposed to risks arising from changes in the economic environment and financial markets. The factors of the risk
relating to financial markets are fluctuation risk of foreign currency, interest rate, and fair value of equity instruments.
① Foreign currency risk
1) Foreign currency risk management
As the Group’s businesses have expanded globally, foreign exchange fluctuations in particular Thai Baht, Euro and U.S. dollar, have asignificant impact on the Group’s financial results. If the Japanese yen appreciates against these currencies, both sales and profit statedin Japanese yen might decrease even though sales and profit stated in local currencies have increased.
The Group intends to marry major currencies the Group uses (Euro, U.S. dollar and Yen) in settlements of receivables/payables
resulting from operating activities. Specifically, the subsidiaries that continuously conduct import or export transactions retain foreign
currencies obtained from exports of goods for payables on imported supplies. This enables the Group to mitigate foreign currency risk.
On the other hand, the Company having multiple SBU and conducting finance and dividend, and holding companies receiving
dividends from their subsidiaries and distributing it to the Company and/or other group companies, sometimes fall into disparity offoreign currency debt-credit balances in receivables, liabilities and/or bank deposits. This might cause significant gains or losses on
foreign exchange differences when the Yen appreciates or depreciates against U.S. dollars or Euro, or when Euro appreciates ordepreciates against U.S. dollar.
2) Foreign currency sensitivity analysis
The chart below shows the impact on the profit and equity in a case of a 1% appreciation of Yen against the Thai Baht, Euro and U.S.
dollar on the assumption that other currencies are held constant.
For the year ended 31 March 2011

For the year ended 31 March 2012

Average of exchange rate
(Yen per each currency)
2.74

2.58

Euro

Thai Baht

112.61109.55

U.S. dollar

85.22

78.98

Thai Baht

(13)

(27)

Euro

(64)

(27)

5

(124)

Thai Baht

(80)

(109)

Euro

(447)

(444)

U.S. dollar

(91)

(195)

Profit for the year
(Millions of Yen)

U.S. dollar
Equity(Millions of Yen)

For the year ended 31 March 2012
Profit for the year
(Thousands of U.S.Dollars (Note 2))
Thai Baht

(332)

Euro

(323)

U.S. dollar(1,513)Equity(Thousands of U.S.Dollars (Note 2))
Thai Baht(1,329)Euro(5,407)

U.S. dollar(2,372)

Note:
Numbers in brackets mean the amount of negative impact on profit and equity resulting from a 1% appreciation of Yen. The amounts
above represent the impact on the consolidated financial statements of the Group resulting from foreign currency conversion, not the
impact on Group’s cash flows or operations themselves.

67Likewise, the charts below show the impact in case of a 1% appreciation of functional currencies of the Company and a holding
company in the Group on their receivables/liabilities and bank deposits denominated in foreign currency on the assumption that othercurrencies are held constant.The information of holding companies with minor risk is not included in the below chart.
2)-1. Parent company (the Company)(Millions of Yen)Euro
31 March 2011

U.S. dollar
31 March 2012

31 March 2011

31 March 2012

Trade and other receivables

(60)

(20)

(216)

Trade and other payables

0
－

1

77

85

(0)

(2)

Long-term financial assets(201)

Short-term financial assets

－

(0)

(35)
－

Cash and cash equivalents

(61)

(53)

(358)

(332)

Total

(121)

(72)

(533)

(457)

(7)

(Thousands of U.S.Dollars (Note 2))

Trade and other receivables

Euro

U.S. dollar

31 March 2012

31 March 2012

(241)

(2,449)Trade and other payables

6

1,038

Long-term financial assets

0

(23)

Short-term financial assets

0

(81)

Cash and cash equivalents(643)(4,040)

Total

(877)

(5,555)

Note:
Numbers in brackets mean the amount of negative impact on profit and equity resulting from a 1% appreciation of Yen. The 1%
depreciation of Yen has a positive impact in the same amount.
Intercompany receivables/payables are included in the calculation of the impact since they cause foreign exchange gain or loss in theprocess of translation.
2)-2. Holding company (Europe)(Millions of Yen)
Yen
31 March 2011

U.S. dollar
31 March 2012

31 March 2011

31 March 2012

Trade and other receivables

(6)

－

(2)

(3)

Trade and other payables

0105

Long-term financial assets

9
－

(0)

(1)

2
－

Cash and cash equivalents

(5)

(44)

(65)

(54)

(3)

(44)

38

(55)

Total

68

(Thousands of U.S.Dollars (Note 2))
Yen

U.S. dollar

31 March 2012

31 March 2012

Trade and other receivables

－

(35)

Trade and other payables

2

Long-term financial assets

(0)

29
－

(534)

(661)

(532)

(666)

Cash and cash equivalents
Total
Note:

Numbers in brackets mean the amount of negative impact on profit and equity resulting from a 1% appreciation of Euro. The 1%
depreciation of Euro has a positive impact in the same amount.
Intercompany receivables/payables are included in the calculation of the impact since they cause foreign exchange gain or loss in theprocess of translation.
3) Currency derivatives
The Group’s policy generally does not permit the use of derivative instruments such as forward foreign exchange contracts. However,in certain circumstances in which the use of such derivatives is determined to be beneficial, the Group can enter into contracts upon
obtaining formal approval from the Chief Financial Officer (“CFO”) of the Group in accordance with its global headquarters approval
process.
In order to economically hedge foreign currency exposures on intercompany receivables, payables and dividends, forward foreignexchange contracts are occasionally entered into. In these cases, the same approval policy as stated above is adhered to.
The following are the details of the forward foreign exchange contracts at the end of each reporting period:(Millions of Yen)

For the year ended

Average

31 March 2011

Notional value

Fair value

$49.0

4,301

(197)

$112.9

9,944

(550)

€ 5.9

656

(15)

Foreignexchange rate currency (mil)Forward foreign exchange contracts
Over one year
US$Sell

0.75(€Buy)(€/US$)

US$Sell

0.75(€Buy)(€/US$)

Within one year

€Buy

1.35

(US$ Sell)(US$/€)(Millions of Yen)

For the year ended

Average

31 March 2012

Foreign

Notional value(Thousands of U.S.Dollars (Note 2))

Fair value Notional value

Fair value

exchange rate currency (mil)Forward foreign exchange contracts
Over one year
US$Sell

0.75(€Buy)(€/US$)

$47.0

3,850

10

46,847126$200.2

16,062(383)

195,429(4,656)$200.015,3881,048

187,220

12,752

Within one year
US$Sell

0.73(€Buy)(€/US$)US$Buy76.94(Yen Sell)(Yen/US$)Note:
The fair values of forward foreign exchange contracts at the end of each reporting period are determined based on the forward
exchange rate at market.

69

② Interest rate risk management
The majority of the interest-bearing debt is bonds with fixed interest rates. The Group’s cash and cash equivalents exceed the interestbearing debt, and currently the impact of interest expense on the Group’s profit/loss is insignificant. Therefore, the Group considers
the interest rate risk not to be significant and has not performed a sensitivity analysis such as Basis Point Value.
Under the interest rate swap contracts, the Group pays fixed interest and receives floating interest based on the notional principal
amounts. Considering the payment of interest on floating interest-bearing debt, receipt of floating interest of interest rate swap
contracts and payment of fixed interest rate, the long-term debt was considered to be provided at a fixed interest rate which minimises
the risk of interest rate fluctuations. The only interest rate swaps the Group holds were the ones assumed through the businesscombination, and those have expired in the year ended 31 March 2012.
The fair values of the interest rate swaps at the end of the reporting period were determined by discounting future net cash flows using
market interest rates as at 31 March 2011.
The following table details the notional principal amounts of interest rate swaps, remaining terms of the contracts and the averageinterest rate at the end of each reporting period:
Average contracted fixed rate of

Notional principal amount

Fair valueinterest rate swaps(Millions of Yen)

(Millions of Yen)

31 March 2011

31 March 2011

31 March 2011

Less than one year

2.96%

125

(1)

The interest rate swaps are settled on a semi-annual basis. The floating rate on the interest rate swaps is based on TIBOR (Tokyo InterBank Offered Rate). The Group settles the net of the fixed and the floating interest rate. Hedge accounting has not been adopted forthe interest rate swaps.
As at 31 March 2012, the Group has no interest rate swaps contract.
③ Price risks management in equity instruments
The Group is exposed to equity price risks arising from equity instruments (listed shares). These investments are held from aviewpoint of business strategy, not for short term trading purpose. The Group does not sell these investments frequently and the Group
periodically reviews the fair value of these instruments as well as the financial condition of investees.
The sensitivity analysis has been based on the exposure to the price of equity instruments (listed shares) at the end of the reporting
period. If equity prices increase or decrease by 5%, accumulated other comprehensive income (pre-tax) would change by 129 million
yen and 115 million yen (1,401 thousand U.S.dollars) as at 31 March 2011 and 2012, respectively, as a result of changes in fair valueof the equity instruments (listed shares).

70(6) Credit risk management
Credit risk is the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Group. The Groupmanages its credit risk by setting credit limits which are approved by the authorised personnel of each SBU.
Credit losses incurred in the past were very rare for the Information technology business. Likewise, significant credit losses were notincurred in the past by the Life Care business since it sells goods and manufactured products to end consumers and medical
institutions. A division in the Life Care business of selling goods to medical institutions and operating wholesale business in certain
countries has some past-due receivables due to the financial conditions of those medical institutions or customers. Credit limits havebeen set for those customers to minimise the loss from a failure to collect the receivables.
Trade receivables consist of large number of customers across diverse industries and geographical areas. The Group has neither
significant credit risk exposure for a specific customer or customer group categorised by similarity, nor concentration of credit riskover 5% of total financial assets as at 31 March 2012.
① Financial assets and other credit exposures
Except for the items below, the carrying amounts after impairment losses presented in the consolidated financial statements are themaximum exposure for the Group’s credit risk without considering the appraised value of the related collateral.
Maximum credit risk
(Millions of Yen)

(Millions of Yen)

(Thousands of U.S.Dollars

As at 31 March 2011

As at 31 March 2012

As at 31 March 2012

(Note 2))

Guarantee liabilities

1,405

982

The Group does not hold any collateral or other credit enhancements to cover the risks disclosed above.
Details of guarantee liabilities are described in Note 36 “Contingent liabilities”.

71

11,946

② Impaired or past-due financial assets
The following table provides the ageing details of the financial assets not yet due and the financial assets past-due but not impaired at
the end of the reporting period:(Millions of Yen)
Balance at 31 March 2011
Total
Trade and other receivables

88,449Within due
date
80,294

Overdue amounts
Within 30
days
3,216

31 to 60 days 61 to 90 days

91 to 120

Over 120

days

days

1,495

538

566

2,340

(gross)Allowance for doubtful accounts(1,995)

(396)

(24)

(45)

(62)

(207)

(1,261)

Trade and other receivables (net)86,454

79,8983,191

477

42,90942,575

1

Allowance for doubtful accounts

(493)

(165)

2
－

359
－

1,078

Other financial assets (gross)

1,451
－
－

(1)

－

(327)

Other financial assets (net)42,41642,411

2

－

－

－

4

331

(Millions of Yen)
Balance at 31 March 2012
Total
Trade and other receivables

Within due
date

Overdue amounts
Within 30days

31 to 60 days 61 to 90 days

91 to 120

Over 120

days

days

77,564

69,760

3,664

800

475

642

2,224

Allowance for doubtful accounts(1,873)

(472)

(43)

(29)

(37)

(152)

(1,139)Trade and other receivables (net)75,691

69,288

3,621

771

1,085

52,46251,801

110

250

438
－

489

Other financial assets (gross)1

300

Allowance for doubtful accounts

(789)

(205)

(93)

(250)

－

(1)

(239)

Other financial assets (net)51,67351,596

17

－

－

－

60

(gross)(Thousands of U.S.Dollars (Note 2))
Balance at 31 March 2012
Total
Trade and other receivables

943,716

Within due
date
848,763

Overdue amounts
Within 30
days
44,57731 to 60 days 61 to 90 days
9,733

91 to 120

Over 120

days

days

5,779

7,808

27,057(gross)Allowance for doubtful accounts(22,792)(5,743)

(525)

(354)

(455)

(1,855)(13,860)

Trade and other receivables (net)920,924

843,02044,052

9,379

5,952

13,197

Other financial assets (gross)638,301

630,257

1,335

3,047

5,324
－

17

3,645

Allowance for doubtful accounts(9,599)(2,498)(1,127)(3,047)－(17)(2,910)

Other financial assets (net)628,702627,759

209

－

－

－

734

72

The Group does not hold any collateral or other credit enhancements on the above financial assets.
In case of impairment on financial assets, the Group does not directly write off such assets by reducing the carrying amount, butinstead records an allowance for doubtful accounts. Movement in the allowance for doubtful accounts is as follows:(Millions of Yen)
Allowance for doubtful Allowance for doubtful
accounts (Current)

Total

accounts (Non-current)

Balance at 1 April 2010

1,826

628

2,453

Provision for the year

1,043

48

1,090

Reduction resulting from settlement for the year

(479)

(211)

(690)

Reduction for the year (reversal)

(311)

(50)

(361)

Other (foreign exchange translation gain or losses, etc.）

(84)

79

(5)

Balance at 31 March 2011

1,995

493

2,488

Provision for the year

539

386

926

Reduction resulting from settlement for the year

(197)

(78)

(275)

Reduction for the year (reversal)

(146)

(16)

(162)

Business transfer

(211)

－

(211)

Other (foreign exchange translation gain or losses, etc.）

(107)

4

(103)

Balance at 31 March 2012

1,873

789

2,662

(Thousands of U.S.Dollars (Note 2))
Allowance for doubtful Allowance for doubtful
accounts (Current)
Balance at 31 March 2011

Total

accounts (Non-current)

24,268

6,002

30,270

Provision for the year

6,563

4,698

11,261

Reduction resulting from settlement for the year

(2,391)(954)(3,344)

Reduction for the year (reversal)(1,781)(194)(1,975)Business transfer(2,572)－(2,572)Other (foreign exchange translation gains or losses）(1,300)47(1,254)

Balance at 31 March 2012

22,792

9,599

32,391

73

The Group continuously monitors the financial status of customers which appear to represent a credit risk in collecting receivables
including restructured receivables. Based on this monitoring, the Group sets the allowance for doubtful accounts considering thecollectability of the receivables.
Because the Group operations are global, the credit risk is widely diversified among customers and the Group does not depend on
specific customers. Therefore the possibility of a chain-reaction of bankruptcies at a certain customer is considered to be remote and
the Group does not set additional general allowance for doubtful accounts resulting from the consideration of this credit risk.
③ Transfer of financial assets
The Group transferred some of its notes receivable to financial institutions before maturity on a discounted basis. The Group isrequired to repurchase these notes in the event of a default. Accordingly, the Group continues to recognise the full carrying amount of
the notes receivable until maturity and the cash proceeds received on the sale of the notes receivable is accounted for as a secured
borrowing.
Notes receivable transferred that were outstanding at the end of the reporting period are as follows:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S.Dollars(Note 2))As at 31 March 2011
Notes receivable transferred

628

74

As at 31 March 2012－

As at 31 March 2012－

(7) Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the CFO of the Group who is appointed by the Board of Directors.
Based on the instructions from the CFO, the financial headquarters of the Group mainly manages the Group’s liquidity risk by
maintaining an appropriate level of retained earnings and credit facilities, and monitors the actual cash flows and forecasted cash
flows. Temporary cash shortages due to dividends or bonus payments are funded through the issuance of commercial paper.
The following table details the contractual maturity of its financial liabilities (including derivative financial instruments) but
excluding guarantee liabilities:(Millions of Yen)
Balance at 31 March 2011

Carrying Contractual Less than 1 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years

Over 5amountcash flows

year

years

51,43351,43351,433

456

456

1,259

Non derivative liabilities
Trade and other payables
Long-term bank loans (excluding

－

－
64

－
59

－
57

－
57

－
218

1,259

1,259

－

－

－

－

－

－

－
25,000－－35,000current portion)
Current portion of long- term bankloans
Short-term bank loans
Bonds
Long-term finance lease

816

816

816

99,839100,000－－
40,000

474

474

－

194

－
111

340

340

340

－

257

257

257

762

762

1

1

155,638

155,799

72

－
45

－

－

－

－

－

－

－

－

－

565

197

－

－

－

－

1

－

－

－

－

－

54,67140,456

170

25,129102

35,27152

obligations
Short-term finance leaseobligations
Other financial liabilities
Derivative liabilities
Currency derivative instruments
Interest rate swaps
Total(Millions of Yen)
Balance at 31 March 2012

Carrying Contractual Less than 1 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years

Over 5amountcash flows

year

years

42,13842,138

－

－

－

－

441

42,138
－

－

441

58

57

57

57

212

905

905

905

－

－

－

－

－

137
－

－

－

－

－

－

－

－

－

Non derivative liabilities
Trade and other payables
Long-term bank loans (excluding
current portion)
Current portion of long- term bankloans
Short-term bank loans

137

137

Bonds

59,89960,000Current portion of bonds

39,98840,000－－－35,000－Long-term finance lease

481

481

40,000－25,000
－

152

123

73

54

79

194

194

194

－

－

－

－

－

259

259

259

－

－

－

－

－

383

383

383

－

－

－

－

－

144,824

144,938

84,016

210

25,180130

111

35,291obligations
Short-term finance leaseobligations
Other financial liabilities
Derivative liabilities
Currency derivative instruments
Total

75

(Thousands of U.S.Dollars(Note 2))
Balance at 31 March 2012

Carrying Contractual Less than 1 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years

Over 5amountcash flows

year

years

512,685

512,685

－

－

－

－

－

5,365

5,365

512,685
－

708

689

690

692

2,585

11,016

11,016

11,016

－

－

－

－

－

1,661

1,661

－

－

－

－

－

Bonds

728,781730,016

1,661
－

－

－

486,534

486,677－－－

425,843－

Long-term finance lease

5,855

5,855

486,677－

304,173－－

Current portion of bonds

1,847

1,502

886

661

960

2,360

2,360

2,360

－

－

－

－

－

3,156

3,156

3,156

－

－

－

－

－

4,656

4,656

4,656

－

－

－

－

－

1,762,068

1,763,446

1,022,211

2,556

306,364

1,576

1,353

429,387

Non derivative liabilities
Trade and other payables
Long-term bank loans (excluding
current portion)
Current portion of long- term bankloans
Short-term bank loans

obligations
Short-term finance leaseobligations
Other financial liabilities
Derivative liabilities
Currency derivative instruments
Total
Note:
Guarantee liabilities have been excluded from the above table as the likelihood of execution has been determined to be low.
Assets and liabilities recognised as a result of undertaking derivative instrument transactions are presented on a net basis.
Temporary cash shortages due to dividends or bonus payments are funded through the following ways.
The following are the details of financing method and financing status:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S.Dollars

As at 31 March 2011

As at 31 March 2012

As at 31 March 2012

(Note 2))
Loan commitment
Used

－

－

－

Unused－50,000608,347－

50,000608,347

－

－

－

Total
Bank overdraft
Used
UnusedTotal

56,00056,003681,385

56,00056,003681,385

Commercial paper limit
Used
Unused
Total

－

－

－

50,00050,000608,347

50,00050,000608,34776

(8) Fair value of financial instruments(Thousands of(Millions of Yen)

(Millions of Yen)

As at 31 March 2011
Carrying

U.S.Dollars (Note 2))

As at 31 March 2012

Fair value

Carrying

amount

As at 31 March 2012

Fair value

amountCarrying

Fair value

amountAssetsFVTPL financial assets (derivative

－

－

1,058

1,058

12,87812,878

instruments)
Loans and receivables
Other financial assets

42,41642,402

51,67351,650628,702628,425

Available-for-sale financial assets

3,591

3,591

2,982

2,982

36,28036,280Total

46,00745,99355,71355,691

677,860

677,583

763

763

383

383

4,656

4,656

456

424

441

422

5,365

5,137

1,259

1,262

905

905

11,016

11,016

99,839－102,474－

59,89963,067

728,781

767,326

Current portion of bonds

39,98840,238486,534

489,577

Long-term finance lease

474

503

481

547

5,855

6,658

340

347

194

202

2,360

2,456

103,131

105,774

102,291

105,764

1,244,567

1,286,827

Liabilities
FVTPL financial liabilities(derivative instruments)
Financial liabilities measured atamortised cost
Long-term bank loans (excluding
current portion)
Current portion of long-term bankloans
Bonds(excluding current portion)

obligations
Short-term finance leaseobligations
Total
Note:
Of FVTPL financial assets and financial liabilities (derivatives), the fair values of forward foreign exchange contracts at the end ofeach reporting period were determined based on the forward exchange rate at market.
The fair values of interest rate swaps were determined by discounting future net cash flows using a risk-free rate at the end of thereporting period taking into account the duration to maturity.
The fair values of loan receivables and other assets were determined by discounting future net cash flows using rates taking into
account the estimated timing of payments and credit risk.
The fair values of listed shares included in available-for-sale financial assets were determined based on market prices at the end ofeach reporting period. The fair values of shares of private companies included in available-for-sale financial assets were calculated byusing a reasonable method.
The fair values of long-term bank loans, bonds and finance lease obligations were determined by discounting future cash flows using
rates taking into account the estimated timing of payments and credit risk.

77

(9) Fair value measurements recognised in the consolidated statement of financial position
The following table provides an analysis of financial instruments that have been measured at fair value subsequent to initialrecognition:
The fair values are categorised into Levels 1 to 3.
Level 1; fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2; fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observablefor the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3; fair value measurements are those derived from inputs for the asset or liability that are not based on observable market data
(unobservable inputs).
Financial instruments valued at fair value are as follows:(Millions of Yen)
As at 31 March 2011
Available-for-sale financial assets

Level 1

Level 2

Level 3

Total

2,332

242

1,016

3,591

Total

2,332

242

1,016

3,591

FVTPL financial liabilities (derivative instruments)

－

763

－

763

Total

－

763

－

763
(Millions of Yen)

As at 31 March 2012

Level 1

Level 3

Total

－

1,058

－

1,058

2,064

239

680

2,982

FVTPL financial assets (derivative instruments)
Available-for-sale financial assets

Level 2

Total

2,064

1,297

680

4,040

FVTPL financial liabilities (derivative instruments)

－

383

－

383

Total

－

383

－

383

(Thousands of U.S.Dollars (Note 2))
As at 31 March 2012

Level 1

Available-for-sale financial assets
Total

Level 2

Level 3

Total－

12,878－12,87825,108

2,903

8,270

36,280FVTPL financial assets (derivative instruments)

25,10815,781

8,270

49,159FVTPL financial liabilities (derivative instruments)

－

4,656

－

4,656

Total

－

4,656

－

40,937Note:
No transfers occurred between Levels 1, 2 and 3 during the years ended 31 March 2011 and 2012.

78

Reconciliation of financial assets categorised at Level 3 from opening balance to closing balance.

For the year ended 31 March 2011

Fair value measurement as at the end of the reporting period(Millions of Yen)
Available-for-sale financial assets
Total

Opening balance

654

654

Total gains or losses:

(91)

(91)

- in profit or loss (i)

(93)

(93)

- in other comprehensive income (ii)
Purchase

2

2

488

488

Others(34)(34)

Closing balance

1,016

1,016

For the year ended 31 March 2012

Fair value measurement as at the end of the reporting period(Millions of Yen)
Available-for-sale financial assets
Total

Opening balance

1,016

1,016

Total gains or losses:

(337)

(337)

- in profit or loss (i)

(260)

(260)

- in other comprehensive income (ii)
Purchase

(78)
－

(78)
－

OthersClosing balance

1

1

680

680

For the year ended 31 March 2012

Fair value measurement as at the end of the reporting period(Thousands of U.S.Dollars (Note 2))
Available-for-sale financial assets
Total

Opening balance

12,366

12,366

Total gains or losses:(4,104)(4,104)- in profit or loss (i)(3,160)(3,160)

(944)
－

(944)
－

9

9

8,270

8,270

- in other comprehensive income (ii)
Purchase
OthersClosing balance
Note:(i) Of the total gains or losses for the years ended 31 March 2011 and 2012 included in profit or loss, (93) million yen and (260)
million yen ((3,160) thousand U.S.dollars), respectively, relates to available-for-sale financial assets at the end of the reporting period.
Related profit or loss of these assets is included in the line item of ‘Finance costs’ in the consolidated statement of comprehensive
income. Refer to Note 27 “Finance income and costs”.
(ii) Of the total gains or losses for the years ended 31 March 2011 and 2012 included in other comprehensive income, 2 million yen
and (78) million yen ((944) thousand U.S.dollars), respectively, relates to the shares not traded in the market. Related profit or loss is
included in the line item of ‘Net gain/ (loss) on revaluation of available-for-sale financial assets’ in Note 29 “Other comprehensive
income”.

7924.Assets held for sale
The Group has no assets held for sales as at 31 March 2011.
Details for carrying amounts of assets held for sales as at 31 March 2012 are as follows:(Millions of Yen)

(Thousands of U.S.Dollars

As at 31 March 2012

As at 31 March 2012

Land

Land

(Note 2))

Corporate

5,356

65,169Note:
The sale of the above land of Itabashi 1st Plant was approved, and is planned to be sold within 12 months as at 31 March 2012.

80

25.Share-based payments(1) Detail of share-based payments
The Group has a stock option plan. The purpose of the plan is to increase the value of the Group and to improve the financial result of
the Group by motivating the members such as directors, officers employees of the Group, and as well as to retain valuable employees.
After overall approval at the shareholders meeting, options are granted to individuals that are proposed and approved at the Group’s
Board of Directors’ meeting. The options are granted at no cost. The exercise period of the options is the period determined in theoptions contract and options not exercised within this exercise period will expire. Subsequent to the grant date, if a member terminates
his or her employment prior to the vesting date, the options will expire. The option contract includes a clause that limits the maximum
number of stock options a member can exercise each year during the exercise periods.
Stock options granted to members are accounted for as share-based payments transactions. Expenses recorded to other comprehensive
income from undertaking shared-based payments transactions were 544 million yen and 402 million yen (4,886 thousand U.S.dollars)
for the years ended 31 March 2011 and 2012, respectively.
Details of the stock options that are outstanding for the years ended 31 March 2011 and 2012 are as follows:No.

Number of shares

Grant date

Expiry date

Exercise price (Yen)Fair value at grant date
(Yen)

5

445,000

1 Jan 2006

30 Sep 2015

4,150

2,917

6

585,600

7 Nov 2006

30 Sep 2016

4,750

3,961
3,357

7

77,60014 Nov 2007

30 Sep 2017

4,230

8

1,036,000

28 Nov 2008

30 Sep 2018

1,556

952

9

60,00024 Feb 2009

30 Sep 2018

1,704

1,521

10

1,247,600

8 Dec 2009

30 Sep 2019

2,215

2,784

11

1,225,600

7 Dec 2010

30 Sep 2020

1,947

1,861

12

680,800

17 Jan 2012

30 Sep 2021

1,616

1,427

Note:
The fair value of the stock options at grant date does not include the fair value of stock options to which IFRS 2 “Share-based
Payments” does not apply, as mentioned in (4) below.
(2) Determination of stock option value
Weighted average fair value of the stock option granted during the years ended 31 March 2011 and 2012 was 1,861 yen and 1,427
yen, respectively.
In determining the expense of the stock options, the options were priced using the Black- Scholes model. The following table details
the assumptions used in the Black-Scholes model for the options granted in the years ended 31 March 2011 and 2012:
Expected volatility was determined based on recent historical daily share price volatility from the grant date to forecasted remaining
period.
No.11

No.12

Share price at grant date (Yen)

1,945

1,611

Exercise price (Yen)

1,947

1,616

Expected volatility

36.56%

37.26%

Expected remaining option life (years)

6.1

6.0

Dividends yield

3.34%

4.04%

Risk free rate

0.57%

0.45%

81

(3) The number and weighted average exercise prices of stock options
Weighted average exercise price of the outstanding options was 2,502 yen and 2,402 yen as at the years ended 31 March 2011 and2012, respectively. Weighted average remaining contractual life was 7.8 years and 7.2 years as at 31 March 2011 and 2012,
respectively.
For the year ended 31 March 2011

For the year ended 31 March 2012
Weighted average

Weighted average
exercise price

Number of shares

Number of shares

exercise price
(Yen)

(Yen)
Outstanding at the beginning of the period

3,229,000

2,701

4,263,000

2,502

Granted

1,225,600

1,947

680,800

1,616

Forfeited (i)(174,400)

2,379(434,300)

2,177

Exercised(17,200)

1,556(12,000)

1,556

Outstanding at the end of the period

4,263,000

2,502

4,497,500

2,402

Exercisable at the end of the period

1,657,400

3,322

2,275,000

2,920

Note:
(i) Stock options forfeited were due to employee retirements.
Stock options exercised during the year ended 31 March 2012 were as follows:No.
8

Number of shares exercised

Exercise date

1,200

Share price at exercise date (Yen)

10 Aug 2011

1,698

8

8,800

12 Sep 2011

1,669

8

2,000

12 Mar 2012

1,851

Total

12,000Stock options exercised during the year ended 31 March 2011 were as follows:No.

Number of shares exercised

Exercise date

Share price at exercise date (Yen)

8800

12 Apr 2010

2,525

8

2,000

10 May 2010

2,444

8

2,800

14 May 2010

2,373

8

1,200

10 Jun 2010

2,076

8

800

10 Nov 2010

1,958

8

2,000

10 Dec 2010

1,980

8

2,400

10 Feb 2011

1,985

8

5,200

10 Mar 2011

1,937

Total

17,20082

(4) Stock options to which IFRS 2 is not applied
The following are details of the stock options granted after 7 November 2002 and vested before 1 April 2008, the date of transition to
IFRSs, resulting in IFRS 2 not being applied:No

NumberGrant date

Expiry date

Exercise price

Fair value at grant date

(Yen)

(Yen)

5

445,000

1 Jan 2006

30 Sep 2015

4,150

2,518

6

195,200

7 Nov 2006

30 Sep 2016

4,750

1,113

Weighted average exercise price of the outstanding options was 4,336 yen and 4,338 yen as at 31 March 2011 and 2012, respectively.
Weighted average remaining contractual life was 4.8 years and 3.8 years as at 31 March 2011 and 2012, respectively.
For the year ended 31 March 2011

For the year ended 31 March 2012

Weighted average
Number of shares

exercise price

Weighted average
Number of shares(Yen)

exercise price(Yen)

Outstanding at the beginning of the period

553,400

4,340

545,400

4,336

Forfeited (i)(8,000)4,600(30,500)

4,298

－

－

－

－

Outstanding at the end of the period

545,400

4,336

514,900

4,338

Exercisable at the end of the period

545,400

4,336

514,900

4,338

Exercised

Note:(i) Stock options forfeited were due to employee retirements.
There were no stock options exercised during the years ended 31 March 2011 and 2012.

83

26.Revenue and expenses (excluding finance income and costs)(1) Sales from continuing operations
The following is an analysis of the Group’s sales from continuing operations:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S.Dollars

For the year ended

For the year ended

For the year ended

31 March 2011

31 March 2012

31 March 2012

(Note 2))

Sales of goods and products

373,165

360,388

4,384,812

421

285

3,472

373,586

360,673

4,388,284

Service revenue
Total sales(2) Other income from continuing operations

The following is an analysis of the Group’s other income from continuing operations:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S.Dollars(Note 2))For the year ended

For the year ended

For the year ended

31 March 2011

31 March 2012

31 March 2012

Commission

611

531

6,467

Rent

107

138

1,681

Government grants

159

192

2,336

Gain on sale of plant, property and equipment

203

174

2,119

－
2,281

351

4,274

2,159

26,265

3,361

3,546

43,142

Proceed from insurance
OthersTotal other income(3) Research and development expenses recognised as incurred(Millions of Yen)

(Millions of Yen)

(Thousands of U.S.Dollars

For the year ended

For the year ended

For the year ended

31 March 2011

31 March 2012

31 March 2012

(Note 2))

Employee benefits expenses

7,299

7,082

86,166

Depreciation and amortisation

1,684

1,370

16,668Commission expenses

1,753

1,800

21,906

Other expenses

5,267

5,706

69,431

16,003

15,959194,170

Total research and development expenses
recognised as incurred
Note:

The above items are included in the corresponding line items in the consolidated statement of comprehensive income.

84

(4) Employee benefits expense
The following is an analysis of the Group’s employee benefits expense from continuing operations:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S.Dollars

For the year ended

For the year ended

For the year ended

31 March 2011

31 March 2012

31 March 2012

(Note 2))

Salary, bonus and others

79,596

79,719969,932

Retirement benefit (Note 19）
Defined benefit (Note 19)

946

701

8,535

Defined contribution (Note 19）

1,458

1,360

16,544Retirement benefit total

2,404

2,061

25,079

Share-based payments (stock option) (Note 25）

544

402

4,886

Severance payments (Note 19）

2,169

1,483

18,038Others

3,610

3,730

45,38888,32487,395

1,063,323

Total employee benefits expense(5) Other expenses

The following is an analysis of the Group’s other expenses from continuing operations:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S.Dollars(Note 2))For the year ended

For the year ended

For the year ended

31 March 2011

31 March 2012

31 March 2012

Packaging/shipping/transportation

7,232

6,624

80,593

Travel

4,874

4,989

60,697

Rent

5,299

4,906

59,694

Utilities

8,562

8,496

103,371

Repair and maintenance

7,969

7,744

94,216

Foreign exchange loss (i)

5,244

20

241

Loss on sales of property, plant and equipment

81

947

11,520Loss on disposals of property, plant and

507

1,109

13,494equipment
Loss on disposals of intangible assets
OthersTotal other expenses

25

26

320

38,94446,366564,127

78,736

81,226988,274

Note:(i) Foreign exchange loss above included (gains) or losses resulting from fluctuations in currency derivatives of 391 million yen and(1,438) million yen ((17,494) thousand U.S.dollars) of losses for the years ended 31 March 2011 and 2012, respectively.
(6) Loss on disasterDue to the massive flooding in Thailand in October 2011, buildings, plant equipment and inventories at a subsidiary were flooded. As
a result, the subsidiary temporally stopped its operation. The loss comprises the aggregate loss on damage of plant equipment in theamount of 4,013 million yen (48,830 thousand U.S. dollars) , loss on damage on inventories in the amount of 974 million yen (11,853
thousand U.S. dollars) and other related loss in the amount of 921 million yen (11,208 thousand U.S. dollars).
The Group recognised a loss on disaster due to the Great East Japan Earthquake on 11 March 2011 in the amount of 774 million
yen for the year ended 31 March 2011. The loss comprises the aggregate loss on physical damage to property, plants and equipment,
loss on physical damage of inventories, losses due to suspension of operations, and donations.The loss on disaster is included in theline item ‘Depreciation and amortisation’ and ‘Other expenses’ in the consolidated statement of comprehensive income.

85

27.Finance income and costs(Millions of Yen)

(Millions of Yen)

(Thousands of U.S.Dollars

For the year ended

For the year ended

For the year ended

31 March 2011

31 March 2012

31 March 2012

(Note 2))Finance income
Interest income
Cash and cash equivalents, loans and

851

1,513

18,405

56

69

839

Available-for-sale financial assets

1

－

－

Total finance income

907

1,582

19,244

receivables
Dividend income
Available-for-sale financial assets
Gain on sales

Finance costs
Interest costs
1,856

1,695

20,621Other provisions

Interest-bearing debt

18

18

222

Other liabilities

65

35

431

613

278

3,386

(19)

－

－

2,533

2,027

24,661

Impairment losses
Available-for-sales financial assets (ii)
Fair value gains /losses on derivatives
Interest rate swaps
Total finance costs
Note:(i) Loss resulting from the fair value measurement of currency derivatives is disclosed in the line item ‘Foreign exchange loss’ of Note
26 “Revenue and expenses (excluding finance income and costs), (5) Other expenses.”(ii) Impairment losses were recognised on listed shares and the shares of private companies categorised as available-for-sale financial
assets due to significant or prolonged decline in the fair values against acquisition cost.

8628.Discontinued operations
The Group classifies continuing and discontinued operations by SBU. Accordingly, when the Group disposes of a business thatcomprises a part of a SBU, the business remains classified as continuing operations.
The Group transferred its Media business that manufactures glass media for hard disks, and related assets to Western Digital
Corporation, a manufacturing company of hard disk drives for the year ended 31 March 2011. As a result, the business is classified as
discontinued operations for the year ended 31 March 2011.
On 1 July 2011, an agreement was reached and concluded between the Company and Ricoh Co., Ltd. to transfer the PENTAX
Imaging Systems Business to Ricoh and the transfer was executed on 1 October 2011. As a result, the business is classified as
discontinued operations for the year ended 31 March 2012, and the profit and loss for the year ended 31 March 2011 are presented
after rearrangement of profit and loss.
① Reporting Segment
Information Technology② The following is an analysis of revenue, expenses, profit/loss and cash flows of discontinued operations:(Thousands of U.S.Dollars

Note(Millions of Yen)

(Millions of Yen)

(Note 2))For the year ended

For the year ended

For the year ended

31 March 2011

31 March 2012

31 March 2012

Profit/loss for the year fromdiscontinued operations
Revenue:
Sales

(i)

50,97816,26716

789

10,966

5,592

68,035

Total revenue

61,95921,866

266,041

Change in merchandises, products,(1,270)(732)(8,902)

17,386

6,277

76,378

Employee benefits expense

6,402

2,905

35,348Depreciation and amortisation

2,175

333

4,056

Subcontracting cost

1,778

705

8,579

Advertising and promotion

2,440

892

10,8502,839

861

10,476

51

16

193

Finance income
Other income(ii)

197,918

Expense:work-in-process
Raw materials and consumables

(i)

used

expenseCommission expense
Finance costs
Other expenses
Total expense
Net gain from discontinued

19,483

6,099

74,201

51,284

17,357211,178

10,675

4,509

54,863operations before tax
Income tax
Net gain from discontinued

(iii)

653

1,619

19,702

10,0222,890

35,162operations (attributable to theshareholders of the Company)

87

Note:(i) ‘Sales’ and ‘Raw materials and consumables used’ above includes the following transactions:(Thousands of U.S.Dollars(Millions of Yen)

(Millions of Yen)

(Note 2))For the year ended

For the year ended

For the year ended

31 March 2011

31 March 2012

31 March 2012

Purchase from continuing operations

－

1,500

－

(ii) ‘Other income’ includes the gain of 10,343 million yen on business transfer to Western Digital Corporation on 30 June 2010 for
the year ended 31 March 2011, and also includes the reveral of impairment losses in the amount of 1,854 million yen (22,557
thousand U.S. dollars) recognised in the year ended 31 March 2009, and the gain on business transfer to Ricoh Co., Ltd. on 1
October 2011 in the amount of 3,617 million yen (44,004 thousand U.S.dollars) for the year ended 31 March 2012.
Details of net capital gain are as follows:(Thousands of U.S.Dollars

Consideration received(Millions of Yen)

(Millions of Yen)

(Note 2))For the year ended

For the year ended

For the year ended

31 March 2011

31 March 2012

31 March 2012

20,654

16,180196,860

Assets and liabilities transferred
Non-current assets(7,632)(6,224)(75,730)

Current assets(3,424)－(16,896)(205,576)

383

4,665

745

10,174

123,786

10,3433,617

44,004Non-current liabilities
Current liabilities
Net capital gain(iii) 'Income tax' includes the tax expense of 1,419 million yen (17,271 thousand U.S. dollars) on the business transfer for the year
ended 31 March 2012.
③The following is a cash flow analysis for discontinued operations:(Thousands of U.S.Dollars(Millions of Yen)

(Millions of Yen)

(Note 2))For the year ended

For the year ended

For the year ended

31 March 2011

31 March 2012

31 March 2012

Cash flows from discontinued operations
Cash flows from operating activities

5,887

2,143

26,069Cash flows from investing activities (i)18,914

11,929145,136

Cash flows from financing activities (ii)(21,597)(22,565)(274,542)

Total

3,203

(8,493)(103,337)

Note:(i) Cash flows from investing activities include the proceed from business transfer for the years ended 31 March 2011 and 2012.
(ii) Cash flows from financing activities for the year ended 31 March 2011 represent dividend payment to continuing
operations, and include dividend payment to continuing operations and fund transfer to continuing operations for the year
ended 31 March 2012.

88

29.Other comprehensive income
For the years ended 31 March 2011 and 2012, other comprehensive income comprises the following:(Thousands of U.S.Dollars(Millions of Yen)

(Millions of Yen)

(Note2))For the year ended

For the year ended

For the year ended

31 March 2011

31 March 2012

31 March 2012

Other comprehensive income:① Net gain/(loss) on revaluation ofavailable-for-sale financial assets (i)Gains (losses) arising during the year

(208)

(591)

(7,191)

Reclassification adjustments to profit or

613

272

3,308

406

(319)

(3,882)

Gains (losses) arising during the year

(14,081)(7,955)(96,790)

Reclassification adjustments to profit or

(108)

973

11,839(14,188)(6,982)(84,951)

241

(113)

(1,380)(13,542)(7,415)(90,214)

512

128

1,560

(13,030)(7,286)(88,653)

loss for the year
Total
② Exchange differences on translation offoreign operations (ii)loss for the year
Total
③ Share of other comprehensive income ofassociates
Other comprehensive income/(loss) before
tax
Income tax relating to components of othercomprehensive income
Total other comprehensive income/(loss)(net of tax)Note:(i) ‘Net gain/ (loss) on revaluation of available-for-sale financial assets’ represents unrealised gain or loss on available-for-salefinancial assets at the end of the reporting period.
(ii) ‘Exchange differences on translation of foreign operations’ consist of differences on foreign currency conversion for financial
statements of foreign operations.

89

Taxation on each item of other comprehensive income for the years ended 31 March 2011 and 2012 is as follows:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S.Dollars (Note 2))

For the year ended

For the year ended

For the year ended

31 March 2011

31 March 2012

Total

Tax

Net of tax

Total

Tax

31 March 2012

Net of tax

Total

Tax

Net of tax

Other comprehensive
income attributable toowners of the Company① Net gain/(loss) on

406

(193)

213

(319)

144

(175)

(3,882)

1,754(2,129)(14,146)704(13,441)(6,932)(16)(6,948)(84,339)(193)(84,532)

241

－

241

(113)

－

(113)

(1,380)－(1,380)(13,499)

512(12,987)(7,364)

128(7,236)(89,602)

1,560(88,042)

(43)

－

(43)

(50)

－

(50)

(612)

－

(612)

(43)

－

(43)

(50)

－

(50)

(612)

－

(612)

(13,542)512(13,030)(7,415)128(7,286)(90,214)1,560(88,653)

revaluation ofavailable-for-salefinancial assets② Exchange differences ontranslation of foreign
operations③ Share of othercomprehensive incomeof associates
Sub total
Other comprehensive
income attributable to Noncontrolling interests② Exchange differences ontranslation of foreign
operations
Sub total
Total other comprehensive
income90

30.Earnings per share(1) Basic earnings per share and diluted earnings per share
(Yen)

(Yen)

(U.S.Dollars (Note 2))

For the year ended

For the year ended

For the year ended

31 March 2011

31 March 2012

31 March 2012

Basic earnings per share
From continuing operations

115.26

93.48

1.14

From discontinued operations

23.23

6.70

0.08

138.49100.181.22

115.19

93.46

1.14

Total basic earnings per share
Diluted earnings per share
From continuing operations
From discontinued operations
Total diluted earnings per share

23.22

6.70

0.08

138.41

100.16

1.22(2) The basis of calculation of basic earnings per share and diluted earnings per share① Basic earnings per share(a) Profit for the year attributable to owners of the Company(Millions of Yen)

(Millions of Yen)

(Thousands of U.S.Dollars (Note2))

Profit attributable to owners of the

For the year ended

For the year ended

For the year ended

31 March 2011

31 March 2012

31 March 2012

49,72240,329490,677

10,0222,890

35,162

59,744

43,219525,839

Company from continuing operations
Profit attributable to owners of theCompany from discontinued operations
Profit used in the calculation of basic
earnings per share(b) Weighted average number of ordinary shares used in the calculation of basic earnings per share(Shares in thousands)
For the year ended 31 March 2011

For the year ended 31 March 2012

Weighted-average number of ordinary
shares431,40691

431,420

② Diluted earnings per share(a) Profit for the year attributable to owners of the Company(Millions of Yen)

(Millions of Yen)

(Thousands of U.S.Dollars (Note

For the year ended

For the year ended

For the year ended

31 March 2011

31 March 2012

31 March 2012

2))

Profit attributable to owners of the49,72240,329490,677

10,0222,890

35,162

59,744

43,219525,839

Company from continuing operation after
dilution
Profit attributable to owners of theCompany from discontinued operation
after dilution
Profit used in the calculation of diluted
earnings per share(b) Weighted average number of ordinary shares used in the calculation of diluted earnings per share(Shares in thousands)

Weighted-average number of ordinary shares

For the year ended

For the year ended

31 March 2011

31 March 2012

431,406

431,42021785431,623

431,505

Shares deemed to be issued for no consideration in respect of:stock options
Weighted average number of ordinary shares used in the calculation of diluted
earnings per share92

31.Non-cash transactions
Non-cash transactions for the years ended 31 March 2011 and 2012 consisted of acquiring property, plant and equipment through new
finance lease arrangements in the amount of 18 million yen and 124 million yen (1,512 thousand U.S.dollars), respectively.

9332.Main subsidiaries
Details of the Company's main subsidiaries are as follows:

Name of subsidiaries

Reportablesegment

services in the

Information

Electronics related(THAILAND) LTD.

Technology

products

HOYA GLASS DISKInformation

Electronics related

PHILIPPINES, INC.

Technology

products

HOYA GLASS DISKInformation

Electronics related

VIETNAM LTD.

Technology

products

HOYA GLASS DISKInformation

Electronics related

VIETNAM ⅡLTD.

Technology

products

HOYA MICROELECTRONICS Information

Electronics related

TAIWAN CO., LTD.

products

HOYA ELECTRONICS KOREA Information

Electronics relatedCO., LTD.

Technology

products

HOYA ELECTRONICS

Information

Electronics related

MALAYSIA SDN.BHD.

Technology

products

HOYA ELECTRONICS

Information

Electronics related

SINGAPORE PTE. LTD.

Technology

products

Information

Electronics related

Technology

products

EAST CHEER INVESTMENT

Information

Electronics related

LIMITED

Technology

products

SHENZHEN KTM GLASSInformation

Electronics related

SUBSTRATE CO., LTD.

Technology

products

HOYA OPTICS (THAILAND)

Information

Imaging related

LTD.

Technology

products

HOYA CORPORATION USA

HOYA OPTO-ELECTRONICS Information

Imaging related

QINGDAO LTD.

Technology

products

Information

Imaging related

Technology

products

HOYA OPTICALTECHNOLOGY (SUZHOU)LTD.

HOYA OPTICAL (ASIA) CO., Information

Imaging related

LTD.

Technology

products

Information

Imaging related

Technology

products

HOYA OPTICALTECHNOLOGY (WEIHAI) CO.,LTD.

PENTAX CEBU PHILIPPINES Information

Imaging related

CORPORATION

Technology

products

Information

Imaging related

Technology

products

Information

Imaging related

Technology

products

PENTAX VN CO., LTD.
HOYA PHOTONICS, INC.

Location

As at 31 March

As at 31 March

2011

2012

THAILAND

100.0%

100.0%PHILIPPINES

100.0%

100.0%VIETNAM

100.0%

100.0%VIETNAM

100.0%

100.0%TAIWAN

100.0%

100.0%

SOUTH KOREA

100.0%

100.0%

MALAYSIA

100.0%

100.0%

reportable segment

HOYA GLASS DISKTechnology

Proportion of shares held

Major products/

SINGAPORE(i)

100.0%U.S.A.

100.0%

100.0%

CHINA

100.0%

100.0%

CHINA

51.0%

51.0%

THAILAND

100.0%

100.0%

CHINA

100.0%

100.0%

CHINA

100.0%

100.0%

CHINA

100.0%

100.0%

CHINA

94

－

－
(ii)

PHILIPPINES

100.0%VIETNAM

100.0%U.S.A.

100.0%

100.0%

100.0%－(iii)
100.0%Name of subsidiaries

Reportablesegment

HOYA LENSMANUFACTURING

Life Care

MALAYSIA SDN.BHD.
HOYA LENS THAILAND LTD. Life Care
HOYA LENS GUANGZHOULTD.
HOYA LENS AUSTRALIA
PTY.LTD.
HOYA LENS INDIA PRIVATELIMITEDLife Care
Life Care
Life Care

HOYA LENS VIETNAM LTD. Life Care
HOYA LENSDEUTSCHLAND GMBH

Life Care

HOYA LENS U.K. LTD.

Life Care

HOYA LENS ITALIA S.P.A.

Life Care

HOYA LENS IBERIA S.A.

Life Care

HOYA LENS FRANCE S.A.S.

Life Care

HOYA LENS OF AMERICA,
INC.
HOYA HOLDINGS N.V.

Life Care
Life Care andCorporate

PENTAX CANADA, INC.

Life CarePENTAX EUROPE GMBH

Life CarePENTAX ITALIA S.R.L

Life CarePENTAX U.K. LTD.

Life Care

MICROLINE SURGICAL, INC. Life Care
HOYA HOLDINGS ASIA

Proportion of shares held

Major products/
services in the

Location

As at 31 March

As at 31 March

2011

2012

MALAYSIA

100.0%

100.0%THAILAND

100.0%

100.0%

CHINA

95.0%

95.0%

AUSTRALIA

100.0%

100.0%

INDIA

100.0%

100.0%VIETNAM

100.0%

100.0%GERMANY

100.0%

100.0%

100.0%

100.0%

ITALY

100.0%

100.0%

SPAIN

100.0%

100.0%FRANCE

100.0%

100.0%U.S.A.

100.0%

100.0%NETHERLANDS

100.0%

100.0%CANADA

100.0%

100.0%GERMANY

100.0%

100.0%

ITALY

60.0%

60.0%

100.0%

100.0%U.S.A.

100.0%

100.0%

reportable segment
Health Care related
products
Health Care related
products
Health Care related
products
Health Care related
products
Health Care related
products
Health Care related
products
Health Care related
products
Health Care related

UNITEDproducts

KINGDOM

Health Care related
products
Health Care related
products
Health Care related
products
Health Care related
products
Health Care related
products and EU
headquarters
Medical related
products
Medical related
products
Medical related
products
Medical related

UNITEDproducts

KINGDOM

Medical related
products

Corporate

Asia headquarters

SINGAPORE

100.0%

100.0%HOYA HOLDINGS(ASIA) B.V. Corporate

Holding company

NETHERLANDS

100.0%

100.0%HOYA HOLDINGS, INC.

U.S. headquarters

U.S.A.

100.0%

100.0%PACIFIC PTE. LTD.

CorporateNote:(i) HOYA ELECTRONICS SINGAPORE PTE. LTD. was incorporated on 10 June 2011.
(ii) HOYA OPTICAL TECHNOLOGY (WEIHAI) CO., LTD. was incorporated on 11 July 2011.
(iii) PENTAX VN CO., LTD. was transferred on 1 October 2011.

95

33.Related party disclosures
Transactions between the Company and its subsidiaries which are related parties of the Company, have been eliminated inconsolidation and are not disclosed in this note. Details of the balances and transactions between the Company and other relatedparties are disclosed as follows:(1) Transactions with related parties, and receivables and payables balances
The Group had the transactions with related parties as follows:
As at/ for the year ended 31 March 2011

(Millions of Yen)

Type of related party

Related party

Description of the related

Associate

AVAN STRATE INC.

Transaction amount

Outstanding balance

party transaction
Purchase of raw－

27materials
Associate

AVAN STRATE INC.

License fee received

98

23

Associate

AVAN STRATE INC.

Advance payment for

3,000

3,000

purchasing of raw
materials
As at/ for the year ended 31 March 2012
Advance payment of 3,000 million yen (36,501 thousand U.S. Dollars) for AVAN STRATE INC. was refunded for theyear ended 31 March 2012. There are no outstanding balances and no collateral or guarantees balances as at 31 March 2012.
(2) Remuneration of key management personnel
The remuneration of directors and other members of key management personnel during the year is as follows:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S.Dollars(Note 2))For the year ended

For the year ended

For the year ended

31 March 2011

31 March 2012

31 March 2012

Short-term benefits

374

302

Share-based payments

85

56

3,669
681

Total remuneration of key management

458

358

4,350

personnel
The remuneration of directors and key management personnel is determined by the remuneration committee based on the performanceof individuals and market trends.

96

34.Business combinations
The Group did not acquire any company through business combination during the year ended 31 March 2011.
The Group acquired some companies through business combination during the year ended 31 March 2012, however, the disclosure isomitted due to immateriality.

35.Sale of subsidiary
No subsidiary was sold in the year ended 31 March 2011.
PENTAX Imaging and other nine subsidiaries, which operated PENTAX Imaging system business, were sold to Ricoh Company,
Ltd. in the year ended 31 March 2012.
(Millions of Yen)

(Thousands of U.S.Dollars (Note 2))

For the year ended 31 March 2012

For the year ended 31 March 2012

Consideration received

16,180196,860

Cash and cash equivalents

15,575

189,500

Trade and other receivables

605

7,360

Non-current assets(6,224)(75,730)

Current assets(16,896)(205,576)

383

4,665

Current liabilities

10,174

123,786

Net capital gain

3,617

44,004

Assets and liabilities transferred

Non-current liabilities

Net cash and cash equivalents received
Consideration transferred

15,575

189,500

Cash and cash equivalents balances(3,038)(36,966)

12,537

152,534

possessed by the company transferred
Net cash and cash equivalents received

36.Contingent liabilities
Guarantee liabilities
The Group provides guarantees on borrowings of business partners and the Group’s employees from financial institutions as follows:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S.Dollars

As at 31 March 2011

As at 31 March 2012

As at 31 March 2012

(Note 2))Business partners

1,405

982

The Group’s employees

1

0

0

Total

1,405

982

11,946

97

11,946

37.Commitments for expenditure
Payment commitments after the reporting date are as follows:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S.Dollars

As at 31 March 2011

As at 31 March 2012

As at 31 March 2012

(Note 2))

Commitments for the acquisition of

3,471

21,165257,514property, plant and equipment andintangible assets

38.Subsequent events
Resolution on cash dividends
On 30 May 2012, a resolution was made by the Company's Board of Directors for the payment of a cash dividend to shareholders ofrecord on 31 March 2012 of 15,100 million yen (183,719 thousand U.S.dollars) (35 yen per common share).

39.Approval of financial statements
The consolidated financial statements for the year ended 31 March 2012 were approved by the Company’s Board of Directors andauthorised for issue on 20 June 2012.

98