HOYA Corporation and its Subsidiaries
Consolidated Financial Statements under IFRSs
and Independent Auditor’s Report
For the year ended 31 March 2023

HOYA Corporation

Contents

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

3

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

7

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

9

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

11

Consolidated Statement of Cash Flows.......................................................................................................................

16

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

18

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

18

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

18

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

19

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

29

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

30

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

34

7． Leases..........................................................................................................................................................

38

8． Goodwill and intangible assets....................................................................................................................

40

9． Impairment losses........................................................................................................................................

43

10． Investments in associates.............................................................................................................................

46

11． Deferred taxes and income taxes.................................................................................................................

47

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

52

13． Other assets and liabilities...........................................................................................................................

54

14． Inventories...................................................................................................................................................

55

15． Trade and other receivables.........................................................................................................................

55

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

56

17． Retirement benefit plans..............................................................................................................................

58

18． Provisions....................................................................................................................................................

62

19． Trade and other payables.............................................................................................................................

62

20． Share capital and other equity items............................................................................................................

63

21． Financial instruments...................................................................................................................................

66

22． Share-based payments..................................................................................................................................

80

23． Revenue........................................................................................................................................................

83

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

85

25． Finance income and costs............................................................................................................................

87

26． Other comprehensive income......................................................................................................................

88

27． Earnings per share.......................................................................................................................................

90

28． Non-cash transactions..................................................................................................................................

91

29． Subsidiaries..................................................................................................................................................

92

30． Related party disclosures.............................................................................................................................

102

31． Business combinations.................................................................................................................................

104

32． Contingent liabilities....................................................................................................................................

105

33． Commitments for expenditure.....................................................................................................................

105

34.

105

Assets held for sale or a disposal group..........................................................................................................

35． Subsequent events........................................................................................................................................

107

36． Approval of financial statements.................................................................................................................

107

- 2 -

Consolidated Statement of Financial Position
HOYA Corporation and its Subsidiaries
As at 31 March 2023

(Thousands of U.S.

(Millions of Yen)

(Millions of Yen)

As at 31 March 2022

As at 31 March 2023

As at 31 March 2023

6, 9, 33

169,665

178,648

1,337,889

8, 9

39,64846,818350,619

Notes

Dollars (Note 2))

ASSETSNON-CURRENT ASSETS:
Property, plant and equipment—net
Goodwill
Intangible assets

8, 9, 33

35,76835,732

Investments in associates

10

930

971

267,595
7,270

Long-term financial assets

7, 12, 21

54,07845,303

339,269

Other non-current assets

13

688

747

5,591

Deferred tax assets
Total non-current assets

11

9,098

9,953

74,535309,874

318,171

2,382,768

CURRENT ASSETS:
Inventories

14

91,441

105,150

787,4627, 15, 21
12, 21

134,174
7,223

143,194
20,379

1,072,373
152,620

Income taxes receivable
Other current assets
Cash and cash equivalents
Subtotal

13
21

2,526
28,197419,404

3,798
30,622405,888

28,445229,325
3,039,675

682,965

709,0315,309,899

Assets held for sale34

Trade and other receivables
Other short-term financial assets

―

1,124

8,421

Total current assets

682,965

710,155

5,318,320

Total assets

992,839

1,028,326

7,701,089- 7 -(Thousands of U.S.

(Millions of Yen)

(Millions of Yen)

As at 31 March 2022

As at 31 March 2023

As at 31 March 2023

20(1)
20(1)

6,264
15,8996,264
15,89946,912
119,064

20(2)
20(2)
20(3), 35(68,310)(11,570)
802,815(41,374)(12,800)
752,999(309,849)(95,861)5,639,173

58,753

97,334

728,928

Notes

Dollars (Note 2))

EQUITY AND LIABILITIESEQUITY
Share capital
Capital reserves
Treasury shares
Other capital reserves
Retained earnings
Accumulated other comprehensive income
Equity attributable to owners of the Company
Non-controlling interests
Total equity

20(4), 29

803,851

818,321

6,128,367(14,795)(3,717)(27,835)

789,056

814,604

6,100,532

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

7, 16, 21

13,763

15,997

119,801

Other long-term financial liabilities
Retirement benefit liabilities

12, 21
17

23,863
3,766

21,523
4,028

161,187
30,163

18
13
11

2,671
2,262
10,0793,153
2,820
10,102

23,611
21,11975,65756,40457,623

431,538

7,837
61,984647
23,126

8,585
64,621
264
21,54664,292483,945
1,977
161,354

Provisions
Other non-current liabilities
Deferred tax liabilities
Total non-current liabilities
CURRENT LIABILITIES:Interest-bearing short-term debt
Trade and other payables
Other short-term financial liabilities
Income tax payables

7, 16, 21
19, 21
12, 21

Provisions

18

1,474

1,558

11,667

Other current liabilities

13

52,31259,394

444,796

147,380

155,967

1,168,031

Subtotal
Liabilities directly associated withassets held for sale

34

―

132

987

Total current liabilities

147,380

156,099

1,169,018

Total liabilities

203,783

213,7221,600,556

Total equity and liabilities

992,839

1,028,326

7,701,089- 8 -Consolidated Statement of Comprehensive Income
HOYA Corporation and its Subsidiaries
For the year ended 31 March 2023

(Millions of Yen)
Notes

Revenue:
Sales
Finance income
Share of profit of associates
Other income
Total revenue(Millions of Yen)

(Thousands of U.S.

Dollars (Note 2))

For the year ended For the year ended For the year ended
31 March 2022

31 March 2023

31 March 2023

23
7, 25

661,466
1,718

723,582
7,666

5,418,869
57,413

10
21, 24

－
7,141

83
2,764

620
20,701

670,325734,095

5,497,603(3,422)
106,464(1,953)
104,193(14,627)
780,294

Expenses:
Changes in goods, products and work in progress
Raw materials and consumables used
Employee benefits expense

17, 22, 24

143,250

160,698

1,203,462

Depreciation and amortisation
Subcontracting cost
Advertising and promotion expense

6, 7, 8, 24

43,0194,356
13,186

49,615
4,674
16,004

371,565
35,004
119,853

24

37,58943,974

329,320

9
7, 17, 25
10

1,078
1,664
45

1,082
1,816

8,106
13,603－(408)

Commissions expense
Impairment losses
Finance costs
Share of loss of associates
Foreign exchange (gain)/loss, net
Other expenses
Total expenses

24(5,838)－(55)

6, 7, 8, 24

118,228

138,213

1,035,072

459,619518,2633,881,246

210,706

215,832

1,616,358

Profit before tax
Income tax expense

11

Profit for the year
Other comprehensive income:

45,38447,044352,312

165,322

168,788

1,264,045

3,060(5,711)(42,773)

290
(832)

152
1,708

1,136
12,7932,517(3,852)(28,845)
325,629

26

Items that will not be reclassified subsequently to profit or loss:
Financial assets measured at fair value through other comprehensive income

Remeasurements of the net defined benefit asset and liability, net

17

Income tax relating to components of other comprehensive income

11

Subtotal
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations

46,85043,481

Share of other comprehensive income of associates

10

142

2

14

Income tax relating to components of other comprehensive income

11

(11)

(17)

(126)

46,981

43,466

325,516

Subtotal
Total other comprehensive income

49,49839,615

296,672

Total comprehensive income for the year

214,821

208,4031,560,717- 9 -Notes(Thousands of U.S.

(Millions of Yen)

(Millions of Yen)

For the year ended

For the year ended

For the year ended

31 March 2022

31 March 2023

31 March 2023

Dollars (Note 2))

Profit attributable to:
Owners of the Company

164,507

168,638

1,262,918

Non-controlling interests

815

150

1,127

165,322

168,788

1,264,045

Owners of the Company

214,130

207,342

1,552,778

Non-controlling interests

691

1,060

7,939

214,821

208,4031,560,717

Total
Total comprehensive income attributable to:

Total

Notes

(Yen)

(Yen)

(U.S. Dollars (Note 2))

For the year ended

For the year ended

For the year ended

31 March 2022

31 March 2023

31 March 2023

Basic earnings per share27

446.45469.76

3.52

Diluted earnings per share27

445.93469.47

3.52- 10 -

Consolidated Statement of Changes in Equity
HOYA Corporation and its Subsidiaries
For the year ended 31 March 2023
(Millions of Yen)
Notes

Balance at 1 April 2021

Share capital

Capital reserves

Treasury shares

6,264

15,899(43,560)

Other capitalreserves(10,354)

Retained earnings

710,274

Total comprehensive income for the year
Profit for the year
Other comprehensive income

164,507
26

Total comprehensive income for the year

164,507

Transactions with owners
Contributions by and distributions to owners
Acquisition of treasury shares20(2)(65,764)(0)

Disposal of treasury shares

20(2)

1,921

(1,314)

Cancellation of treasury shares20(2)39,093

Dividends, 90 yen per share

20(3)Change in non-controlling interests

20(4)

－

Share-based payments (stock options)22

98(39,093)(33,220)

Transfer to retained earnings

347

Total contributions by and distributions to－－(24,750)(1,217)(71,966)

Total transactions with owners

owners－－(24,750)(1,217)(71,966)

Balance at 31 March 2022

6,264

15,899(68,310)(11,570)

802,815

Total comprehensive income for the year
Profit for the year
Other comprehensive income

168,638
26

Total comprehensive income for the year

168,638

Transactions with owners
Contributions by and distributions to owners
Acquisition of treasury shares20(2)(153,964)(9)

Disposal of treasury shares

20(2)

2,143

(1,374)

178,757

Cancellation of treasury shares

20(2)Dividends, 110 yen per share

20(3)Increase (decrease) by business combination

20(4)(178,757)(39,822)

Change in scope of consolidation

20(4)

－

Change in non-controlling interests

20(4)

－

Share-based payments

22

153

Transfer to retained earnings

125

Total contributions by and distributions to－－

26,936(1,230)(218,454)

Total transactions with owners

owners－－26,936(1,230)(218,454)

Balance at 31 March 2023

6,264

15,899(41,374)(12,800)

752,999- 11 -

(Millions of Yen)

Financial assets

Notes

Remeasurements of
Exchange differences

measured at fair value
through otherAccumulated othercomprehensive

income of associates

incomebenefit liability
foreign operations

comprehensive income

Balance at 1 April 2021

Share of othercomprehensive

the net definedon translation of(asset)

7,527

4,002

－

(2,053)

9,477

2,285

46,958238

142

49,623

2,285

46,958238

142

49,623

Total comprehensive income for the year
Profit for the year
Other comprehensive income

26

Total comprehensive income for the year
Transactions with owners
Contributions by and distributions to owners
Acquisition of treasury shares20(2)Disposal of treasury shares

20(2)Cancellation of treasury shares

20(2)Dividends, 90 yen per share

20(3)Change in non-controlling interests

20(4)Share-based payments (stock options)

22

Transfer to retained earnings

(109)

(238)

(347)

Total contributions by and distributions to
(109)

－

(238)

－

(347)

Total transactions with owners

owners

(109)

－

(238)

－

(347)

Balance at 31 March 2022

9,703

50,960－(1,910)58,753(3,943)42,55393

238,705(3,943)42,55393

238,705

Total comprehensive income for the year
Profit for the year
Other comprehensive income

26

Total comprehensive income for the year
Transactions with owners
Contributions by and distributions to owners
Acquisition of treasury shares20(2)Disposal of treasury shares

20(2)Cancellation of treasury shares

20(2)Dividends, 110 yen per share

20(3)Increase (decrease) by business combination

20(4)Change in scope of consolidation

20(4)Change in non-controlling interests

20(4)Share-based payments

22

Transfer to retained earnings

(31)

(93)

(125)

Total contributions by and distributions toowners

(31)

－

(93)

－

(125)

Total transactions with owners

(31)

－

(93)

－

(125)

Balance at 31 March 2023

5,729

93,513－(1,908)97,334- 12 -

(Millions of Yen)
EquityNotes

Non-controlling
attributable to owners

Total equity
interestsof the Company

Balance at 1 April 2021

688,000(15,589)

672,412

164,507815

165,322

49,623(125)

49,498214,130691

214,821

Total comprehensive income for the year
Profit for the year
Other comprehensive income

26

Total comprehensive income for the year
Transactions with owners
Contributions by and distributions to owners
Acquisition of treasury shares20(2)(65,764)(65,764)

Disposal of treasury shares

20(2)

607

607

Cancellation of treasury stock

20(2)

－

Dividends, 90 yen per share20(3)(33,220)(89)(33,309)

Change in non-controlling interests

20(4)

－

191

191

Share-based payments (stock options)

22

98

98

－

－

Transfer to retained earnings－

Total contributions by and distributions toowners(98,279)

103(98,177)

Total transactions with owners(98,279)

103(98,177)

Balance at 31 March 2022

803,851(14,795)

789,056

168,638150

168,788

38,705910

39,615

207,342

1,060

208,403

Total comprehensive income for the year
Profit for the year
Other comprehensive income

26

Total comprehensive income for the year
Transactions with owners
Contributions by and distributions to owners
Acquisition of treasury shares20(2)(153,973)(153,973)
769

Disposal of treasury shares

20(2)

769

Cancellation of treasury stock

20(2)

－

Dividends, 110 yen per share20(3)(39,822)－(171)(39,993)

Increase (decrease) by business combination

20(4)

－

2,646

2,646

Change in scope of consolidation

20(4)

－

7,772

7,772

Change in non-controlling interests

20(4)

－

(228)

(228)

Share-based payments

22

153

153

－

－

Transfer to retained earnings
Total contributions by and distributions toowners(192,872)

10,018(182,854)

Total transactions with owners(192,872)

10,018(182,854)

Balance at 31 March 2023

818,321(3,717)

814,604- 13 -

Consolidated Statement of Changes in Equity
HOYA Corporation and its Subsidiaries
For the year ended 31 March 2023-Continued(Thousands of U.S. Dollars (Note 2))
Notes

Balance at 31 March 2022

Share capital

Capital reserves

Treasury shares

46,912

119,064(511,571)

Other capitalreserves(86,648)

Retained earnings

6,012,244

Total comprehensive income for the year
Profit for the year
Other comprehensive income

1,262,918
26

Total comprehensive income for the year

1,262,918

Transactions with owners
Contributions by and distributions to owners
Acquisition of treasury shares20(2)Disposal of treasury shares
Cancellation of treasury shares
Dividends, 110 yen per share20(3)(1,153,028)

(71)

20(2)

16,051(10,291)20(2)1,338,700(1,338,700)(298,223)

Increase (decrease) by business combination

20(4)Change in scope of consolidation

20(4)Change in non-controlling interests

20(4)

－
－

Share-based payments (stock options)

22

1,149

Transfer to retained earnings

933

Total contributions by and distributions toowners－－201,722(9,213)(1,635,990)

Total transactions with owners－－

201,722(9,213)(1,635,990)

46,912

119,064(309,849)(95,861)5,639,173

Balance at 31 March 2023

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

Financial assets

Notes

Remeasurements of
Exchange differences

measured at fair value
through otherAccumulated othercomprehensive

income of associates

incomebenefit liability
foreign operations

comprehensive income

Balance at 31 March 2022

Share of othercomprehensive

the net definedon translation of(asset)72,669381,639－(14,306)

440,001(29,526)

318,674697

14

289,859(29,526)

318,674697

14

289,859

Total comprehensive income for the year
Profit for the year
Other comprehensive income

26

Total comprehensive income for the year
Transactions with owners
Contributions by and distributions to owners
Acquisition of treasury shares20(2)Disposal of treasury shares

20(2)Cancellation of treasury shares

20(2)Dividends, 110 yen per share

20(3)Increase (decrease) by business combination

20(4)Change in scope of consolidation

20(4)Change in non-controlling interests

20(4)Share-based payments (stock options)

22

Transfer to retained earnings

(235)

(697)

(933)

Total contributions by and distributions toowners

(235)

－

(697)

－

(933)

Total transactions with owners

(235)

－

(697)

－

(933)

Balance at 31 March 2023

42,908700,313－(14,293)

728,928- 14 -

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

Non-controlling
attributable to owners

Total equity
interestsof the Company

Balance at 31 March 2022

6,020,003(110,802)

5,909,201

1,262,918

1,127

1,264,045

289,859

6,813

296,672

1,552,778

7,939

1,560,717

Total comprehensive income for the year
Profit for the year
Other comprehensive income

26

Total comprehensive income for the year
Transactions with owners
Contributions by and distributions to owners
Acquisition of treasury shares20(2)(1,153,099)(1,153,099)

Disposal of treasury shares

20(2)

5,760

5,760

Cancellation of treasury shares

20(2)

－

Dividends, 110 yen per share

20(3)(298,223)(1,280)(299,503)

Increase (decrease) by business combination

20(4)

－

19,814

19,814－

Change in scope of consolidation

20(4)

－

58,20458,204

Change in non-controlling interests

20(4)

－

(1,710)(1,710)Share-based payments (stock options)

22

1,149

1,149

－

－

Transfer to retained earnings
Total contributions by and distributions toowners(1,444,413)

75,028(1,369,385)

Total transactions with owners(1,444,413)

75,028(1,369,385)

Balance at 31 March 2023

6,128,367(27,835)

6,100,532- 15 -

Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows
HOYA Corporation and its Subsidiaries
For the year ended 31 March 2023

(Millions of Yen)

(Millions of Yen)

(Thousands of U.S.

For the year ended

For the year ended

For the year ended

31 March 2022

31 March 2023

31 March 2023

Profit before tax

210,706

215,832

1,616,358

Depreciation and amortisation
Impairment losses
Finance income

43,0191,078(1,718)49,615
1,082(7,666)

371,565
8,106(57,413)

Finance costs
Share of (profit)/loss of associates

1,664
45

1,816
(83)

13,603(620)(Gain)/loss on sales of property, plant and equipment
Loss on disposal of property, plant and equipment
Gain on sale of businesses

(704)
120
(1,656)(468)
127(3,504)948

Foreign exchange (gain)/loss
Others(4,882)(2,001)

－
(157)
5,122

－
(1,173)38,357

Cash generated from operations (before movements in working capital)

245,671265,221

1,986,226

Decrease/(increase) in inventories
Decrease/(increase) in trade and other receivables(7,092)(8,696)(9,216)(2,967)(69,019)(22,220)

Increase/(decrease) in trade and other payables

5,700(6,507)(48,728)

702

(88)

(656)

Notes

Dollars (Note 2))

Cash flows from operating activities

Movements in working capital

Increase/(decrease) in retirement benefit liabilities and provisions
Subtotal

236,284

246,443

1,845,603

Interest received

955

5,928

44,391Dividends received
Interest paid

42
(366)

63
(524)

468
(3,926)

Income taxes paid

(47,291)(51,304)(384,211)

431

1,224

9,164

190,055

201,829

1,511,490

212
(217)

3,946
(12,632)

29,552(94,602)

1,469(28,872)

2,639(33,473)

19,760(250,677)

219

86

648

Payments for acquisition of investment
Proceeds from sale of subsidiaries

(195)
2,040

(108)
(340)

(805)
(2,547)

Payments for acquisition of subsidiaries(120)(4,747)(35,550)

Proceeds from sale of businesses
Payments for business transfer

1,588(2,102)－(757)－(5,667)

Other proceeds
Other payments

277(3,597)279(2,390)2,093(17,896)

Net cash used in investing activities(29,298)(47,496)(355,693)

Income taxes refunded
Net cash generated from operating activities
Cash flows from investing activities
Withdrawals of time deposits
Payments for time deposits
Proceeds from sales of property, plant and equipment
Payments for acquisition of property, plant and equipment
Proceeds from sales of investment- 16 -

Consolidated Statement of Cash Flows
HOYA Corporation and its Subsidiaries
For the year ended 31 March 2023-Continued

Notes

Cash flows from financing activities
Dividends paid to owners of the Company
Dividends paid to non-controlling interests(Millions of Yen)

(Millions of Yen)

(Thousands of U.S.

For the year ended

For the year ended

For the year ended

31 March 2022

31 March 2023

31 March 2023

(33,201)(89)(39,794)(171)(298,019)(1,280)Dollars (Note 2))

Net decrease in short-term borrowings

16

(200)

(200)

(1,498)

Repayments of long-term borrowings

16

(23)

(169)

(1,268)

Repayments of lease liabilities

16(8,217)(8,618)(64,542)

Proceeds from sale of treasury shares

20(2)

0

1

5

Payments for purchase of treasury shares20(2)(65,764)(153,973)(1,153,099)

607
164
－

769
7,772
(208)

5,755
58,204(1,556)(106,722)(194,593)(1,457,297)

Net increase/(decrease) in cash and cash equivalents

54,034(40,259)(301,500)

Cash and cash equivalents at the beginning of the year

334,897

419,404

3,140,900

Proceeds from exercise of stock options
Proceeds from share issuance to non-controlling shareholders
Repayments to non-controlling interests

20(4)
20(4)

Net cash used in financing activities

Effects of exchange rate changes on the balance of cash and cash
equivalents in foreign currencies

30,473

26,743200,275

Cash and cash equivalents at the end of the year

419,404

405,8883,039,675

Note:
Non-cash transactions are stated in Note 28 “Non-cash transactions”.
There are no short-term investments within three months as at 31 March 2023.

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Notes to the Consolidated Financial Statements
HOYA Corporation and its Subsidiaries
For the year ended 31 March 2023

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 https://www.hoya.com/en/). 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.
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 ¥133.53 to $1, the foreign exchange rate at 31 March 2023. 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 yen and one thousand U.S. dollars in thepresentation 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 adopting new IFRSs
IFRSs

IAS 12(Revised)

Income taxes

Subject of amendments

The introduction of a temporary exception to the accounting and disclosure requirements
for income taxes arising from tax law enacted or substantively enacted to implement the
Pillar Two model rules published by the Organisation for Economic Co-operation andDevelopment (“OECD”).

The impact of the above standards for this fiscal year is immaterial.

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(3) Standards and interpretations in issue but not yet adopted by the GroupAt the date of approval of the consolidated financial statements, the main standards and interpretations that were issued but not yet
effective for mandatory adoption are as follows. There are no standards and interpretations that were early adopted by the Group.

The impact of the adoption of IAS 12 (Revised) has not yet been fully assessed by the Group.
The impact of the adoption of other standards on the consolidated financial statements of the Group is immaterial.
Mandatory
adoption

To be adopted
by the Group
from the year
endingSubject of new standards/amendments

Not determined

Not determined

Amendments to the accounting treatment for sale orcontribution of assets between an investor and its
associate or joint venture

1 January 2023

Fiscal Year 2023

IFRSs

IFRS 10(Revised)

Consolidated Financial
Statements

IAS 28(Revised)

Investments in Associates
and Joint Ventures

IAS 12(Revised)

Income taxes(fromthe yearbeginning)

The disclosure of income taxes arising from tax law
enacted or substantively enacted to implement the
Pillar Two model rules published by the OECD.

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 and financial
instruments measured at revalued amounts or fair value. 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. An investor controls an investee when it is exposed or has rights to variable returns from its involvementwith the investee and has the ability to affect those returns through its power over the investee. The Group reassesses whether it
controls an investee if facts and circumstances indicate that there are changes to elements of control.

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 other members of theGroup. All intragroup transactions, balances, income and expenses are eliminated in full in preparing the consolidated financial
statements.
Changes in the 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 of 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; and2. 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.

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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 of and the investments in associates are incorporated in the consolidated financial statements using the equity

method of accounting, except when the investment is classified as an asset 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 and thenadjusted for post-acquisition changes in the Group’s share of the net assets of the associates, less any impairment in the value of theinvestments.
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 and the excess of those losses is no longer recognised.
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.
③ Joint arrangements
The Group classifies joint arrangements as either joint operations (having rights to assets and obligations for liabilities accounted foraccordingly) or joint ventures (having rights to net assets and equity accounted). The classification depends upon the rights andobligations of the parties to the arrangement.
Joint operators shall account for the assets, liabilities, revenues and expenses relating to their interests in joint operations. Joint
ventures shall apply the equity method. The Group has neither joint operations nor joint ventures.

(3) Business combinations
Acquisitions of businesses are accounted for using the acquisition method. Acquisition-related costs are generally recognised in profit
or loss as incurred. The acquiree’s identifiable assets acquired and liabilities assumed are recognised at their fair values at theacquisition date, except for the following:・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 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.
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 is not remeasured and any subsequent settlement is accounted for in equity; or(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 IFRS 9, “Financial Instruments”, or other IFRSs as appropriate. The changes in the fair value
are recognised in profit or loss.

- 20 -

Goodwill is measured on the basis of the excess of the sum of the consideration transferred, the amount of any non-controlling interestsin the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree over the fair value of identifiable
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 the fairvalue 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 carrying amount in accordance with theprevious GAAP (i.e., Japanese GAAP) after performing an impairment test.

(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 (i.e., its functional currency). For the purpose of the consolidated financial statements, the financial results, financial
position 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 translated at the rates prevailing at that date.
Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the datewhen the fair value was determined. Exchange differences are recognised in profit or loss during the period.
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 of thereporting period. The revenues and expenses of foreign operations are translated into Japanese yen at the average rates of exchange forthe year. Where there are material fluctuations in exchange rates, the exchange rate at the transaction date is used. Foreign exchange
differences arising from translation are initially recognised as exchange differences on translation of foreign operations in othercomprehensive income and accumulated in ‘accumulated other comprehensive income’, which are reclassified from equity to profit orloss on disposal of the net investment and included in ‘other expenses’ and ‘other income’ in the consolidated statement ofcomprehensive income.

(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 impairment losses. Properties in the course of
construction for production, supply or administrative purposes, or for purposes not yet determined, are carried at cost, less any
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 projects. 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 suchcomponents as individual assets to be depreciated with specific useful lives. All other repair and maintenance costs are recognised in
profit or loss as incurred.

- 21 -

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: 2-10 years(6) Leases
As a lessee, the Group recognises a right-of-use asset and a lease liability at the commencement date. The lease liability is measured at
the present value of the lease payments that are not paid at the commencement date. The right-of-use asset is measured at cost
comprised of the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, any
initial direct costs incurred and an estimate of costs, such as the cost to dismantle and remove the underlying asset to the original
condition required by the terms and conditions of lease contracts.
After the commencement date, the right-of-use asset is depreciated on a straight-line basis over the useful life or lease term, whicheveris shorter.
The lease payments comprise interest expense recognised as finance costs in the consolidated statement of comprehensive income andrepayments of the lease liability that are calculated by the interest method.
The Group does not recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or lessand for leases of low-value assets. The Group recognises the lease payments associated with these leases as expenses on straight-line
basis over the lease term or other systematic basis.
Right-of-use assets are included in ‘Property, plant and equipment—net’ and ‘Intangible assets’ in the consolidated statement offinancial position at cost less accumulated depreciation and impairment losses. Lease liabilities are included in ‘Interest-bearing longterm debt’ and ‘Interest-bearing short-term debt’ in the consolidated statement of financial position.
As a lessor, the Group classifies each of its leases as either an operating lease or a finance lease. A lease is classified as a finance lease
if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset. A lease is classified as an operatinglease if it does not transfer substantially all the risks and rewards incidental to ownership of an underlying asset.
At the commencement date, the asset held under a finance lease is recognised on the consolidated statement of financial position andpresented as a receivable at an amount equal to the net investment in the lease.
The assets held under an operating lease are on the consolidated statement of financial position and the lease payments received arerecognised as income on a straight-line basis over the lease term in the consolidated statements of comprehensive income.

(7) Intangible assets
The Group uses the cost model for measuring intangible assets. Intangible assets are carried at cost less accumulated amortisation andimpairment losses.
① Intangible assets acquired separately and/or acquired in a business combination
Intangible assets acquired separately are carried at cost at initial recognition. Intangible assets acquired in a business combination arerecognised separately from goodwill at their fair value at the acquisition date, when they are satisfied with the definition of intangible
assets, identifiable, and their fair value is reasonably measured.
② Internally-generated intangible assets—research and development (“R&D”) costs

Expenditures on research activities are recognised as expenses in the period in which they are 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 followings have been demonstrated:(a) the technical feasibility of completing the intangible asset so that it will be available for use or sale;- 22 -

(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 all of 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 carrying amount is expensed.
Subsequent to initial recognition, internally-generated intangible assets are reported at cost less accumulated amortisation andimpairment losses. Where no internally-generated intangible asset can be recognised, development costs are recognised as an expensein the period in which they are incurred.
③ Amortisation of intangible assets

Amortisation is recognised on a straight-line basis over the estimated useful lives below. The Group does not have any intangible
assets with indefinite useful lives.
Technology: 5-20 years
Customer related assets: 5-16 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 or losses
arising from derecognition of an intangible asset are recognised in profit or loss when the asset is derecognised.

(8) Goodwill
Goodwill arising from the acquisition of a business is recognised as an asset at the date that control is acquired (i.e., the acquisitiondate). Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in theacquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the acquisition-date amounts of
the net fair value 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 on the consolidated statement offinancial position.
For the purposes of impairment testing, goodwill is allocated to each of the Group’s cash-generating units (or groups of cashgenerating units) that is expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been
allocated are tested for impairment annually, 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 on a pro-rata basis of the carrying amountof each asset in the unit. Impairment losses recognised for goodwill are not reversed in subsequent periods. Upon disposal of a cashgenerating unit, goodwill attributed to the unit is included in the determination of the profit or loss upon 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.

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(9) Impairment of property, plant and equipment and intangible assets other than goodwill
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 are any indications 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 (i.e., assets other than goodwill that contributeto 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, but so that the increased carrying amount does not exceed the carrying amount that would havebeen 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.

(10) Derivative financial instruments
Derivatives are initially recognised at fair value at the date the derivative contract is entered into and are subsequently remeasured attheir fair value at the end of each reporting period.

(11) Financial assets other than derivative financial instruments① Initial recognition and measurement
Financial assets are classified as “financial assets measured at amortised cost,” “financial assets measured at fair value through othercomprehensive income” (“FVTOCI”) or “financial assets measured at fair value through profit or loss” (“FVTPL”). The classification
is determined at the time of initial recognition

The Group recognises a financial asset on the trade date when it becomes party to the contract of the financial asset.
All financial assets are measured at the fair value plus transaction costs, except for FVTPL.
② Financial assets measured at amortised cost
Such financial assets are held within a business model whose objective is to hold financial assets to collect contractual cash flows, andthe contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and intereston the principal amount outstanding.

After initial recognition, “Financial assets measured at amortised cost” are measured at amortised cost by using the effective interest
method, less the cumulative amount of impairment losses.
③ Financial assets classified as FVTOCISuch financial assets are measured at fair value through other comprehensive income if both of the following conditions are met:(i) the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling
financial assets; and(ii) the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal andinterest on the principal amount outstanding.
The change in fair value is recognised in other comprehensive income.

- 24 -

The fair value of a particular asset in an equity instrument for which the Group makes an irrevocable election at initial recognition topresent in other comprehensive income subsequent changes in its fair value is recognised in other comprehensive income.
④ Financial assets classified as FVTPL
Any other securities not included in the classifications above are classified into financial assets measured at fair value through profit orloss. The change in fair value is recognised in profit or loss.
⑤ Impairment of financial assets
The Group recognises a loss allowance for expected credit losses on “financial assets measured at amortised cost”.

The Group assesses whether the credit risk on a financial instrument has increased significantly since initial recognition. If the credit
risk on a financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that
financial instrument at an amount equal to 12-month expected credit losses. If the credit risk on a financial instrument has increased
significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to thelifetime expected credit losses. For trade receivables, the Group always measures the loss allowance at an amount equal to the lifetime
expected credit losses. The Group assesses the expected credit losses by using the change in the risk of a default or ageing of tradereceivables, etc. The impairment of financial assets is recognised in profit or loss.
⑥ 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 collateralised borrowing for the proceeds received.

(12) Inventories
Inventories are measured 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 their present locationand condition, are assigned to inventories mainly by the weighted-average method. The production costs include an appropriate portionof fixed and variable overhead expenses.

(13) Cash and cash equivalents
Cash and cash equivalents are composed of cash on hand and bank deposits including short-term investments. The short-term
investments with original maturities of three months or less are deemed as cash equivalents since they are readily convertible to cashwithout restriction and with low risk of fluctuation of values.

(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 continuing 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.

- 25 -

(15) Treasury shares
The Group’s own equity instruments, which are reacquired (i.e., treasury shares), are recognised at cost and deducted from equity. No
gain or 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
The Company has established share-based payments plans as an incentive plans for the Group’s directors, officers and certain
employees, which are accounted for separately as equity-settled type or cash-settled type.
➀Equity-settled share-based payment transactions
Equity-settled share-based payments are granted to directors, executive officers and certain employees. The corresponding increase incapital is measured at the grant date fair value of the equity instruments granted and recorded as an expense over the vesting period,
with the same amount recognized as an increase in capital.
②Cash-settled share-based payment transactions
Cash-settled share-based payments are granted to certain employees. The corresponding liabilities are measured by the fair value of theliabilities and recorded as an expense over the vesting period, with the same amount recognized as an increase in liabilities. The

Company remeasures the fair value of the liabilities on the closing date and recognise changes in fair value as profit or loss.
Details regarding the determination of the fair value of equity-settled share-based transactions are set out in Note 22 “Share-based
payments”.

(17) Dividend distributions
Dividend distributions to the Company’s shareholders are recognised as liabilities in the consolidated financial statements in the period
in which the dividends are approved by the Company’s board of directors.

(18) Financial liabilities issued by the Group excluding derivative instruments① Financial liabilities
Financial liabilities are classified as either financial liabilities classified as FVTPL or financial liabilities measured at amortised cost.
This classification is determined at initial recognition.
② Financial liabilities classified as FVTPL
Financial liabilities classified as FVTPL are either held for trading or designated as FVTPL at initial recognition. They are measured atfair value, and the subsequent changes are recognised in profit or loss.
③ Financial liabilities measured at amortised cost

Financial liabilities measured at amortised cost are measured at fair value minus transaction costs at initial recognition. After the initialrecognition, they are measured at amortised cost by using the effective interest method. The gain or loss on cease of amortisation orderecognition is recognised in profit or loss as part of financial costs.
④ Derecognition of financial liabilities

The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or expired.
⑤ Financial guarantee contracts

Financial guarantee contracts are initially measured at their fair values and subsequently measured at the higher of:· the amount of loss allowance for expected credit losses, as determined in accordance with IFRS 9, “Financial Instruments”; and· the amount initially recognised less cumulative amortisation recognised in accordance with IFRS 15, “Revenue from Contracts with
Customers”.

- 26 -

(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.
Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return onplan assets (other than interest), is reflected immediately in the consolidated statement of financial position with a charge or credit
recognised in other comprehensive income in the period in which they occur. Remeasurement recognised in other comprehensive
income is reflected immediately in retained earnings and will not be reclassified to profit or loss.
Past service cost is recognised in profit or loss in the period of a plan amendment.
Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset.
Defined benefit costs are categorised as follows:- Service cost (including current service cost, past service cost, as well as gains or losses on curtailments and settlements);- Net interest expense or income; or- Remeasurement.
The Group presents the first two components of defined benefit cost in profit or loss as “Employee benefits expense” or “Financecosts”.
The retirement benefit liabilities recognised in the consolidated statement of financial position represent the actual deficit or surplus in
the Group’s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits
available in the form of refunds from the plans or reductions in future contributions to the plans.
Payments to defined contribution retirement benefit plans are recognised as an expense when employees have rendered service to theGroup.

(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 can bemade of the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to settle
the present obligation at the end of the reporting period (i.e., future cash outflow), taking into account the risks and uncertainties
surrounding the obligation.
Where time value of money is material, a provision is measured at the present value to which estimated future cash flows are
discounted using a pre-tax discount rate that reflects the risks specific to the obligation. Interest cost associated with the passage oftime is recognised as finance cost.
The types of provisions are as follows:① Asset retirement obligation

The Group recognises provisions for an asset retirement obligation for estimated costs arising from a contractual obligation to alandlord to dismantle and remove leasehold improvements from a leased office at the end of the lease contract, and estimated costs todecontaminate certain fixed assets. An asset retirement obligation is provided based on past experience of actual cost and each asset isconsidered individually. The discount rate depends on the useful life of the corresponding assets and the country in which such assets
are located. Future expected timing of outflow of economic benefits is mainly more than one year from each reporting period.
② Warranties provision

Warranties provision is estimated and recognised based on past experience of the occurrence of defective goods and the expected after
service costs in the warranty period. Expected outflow of economic benefits in the future is within one year from each reporting period.

- 27 -

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 toinitial recognition, such contingent liabilities are remeasured considering expected future payments, possible occurrence and timing of

payments at each reporting period.

(21) Revenue
The Group recognises revenue based on the five-step approach below:
Step 1: Identify the contracts with customers
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognise revenue when the entity satisfies a performance obligation
The Group sells health care related products, medical related products, electronics related products, imaging related products, etc. andrecognises revenue when the control of products is transferred to the customer and the performance obligation is satisfied by the Groupon the shipping or delivery date. For service contracts such as maintenance contracts for medical related products, revenue isrecognised equally over the contract period because the performance obligation is considered to be satisfied over time. Revenue ismeasured at the transaction price of the consideration received or receivable less discount, rebate and consumption taxes.

(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 asrevenue in the same accounting period when the expense is incurred. Government grants for purchase of assets are recognised asdeferred revenue in the consolidated statement of financial position and transferred to profit or loss on a systematic basis over theuseful lives of the related assets.

(23) Income taxes
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 asset and liability method on temporary differences, tax loss carryforwards and tax credits at thereporting date.
Deferred tax assets or liabilities are not recognised for:· Temporary differences arising from the initial recognition of goodwill· Temporary differences arising from the initial recognition of assets and liabilities in transactions that do not affect either accounting
profit or taxable profit (excluding business combinations)· 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 thebenefits of the temporary differences can be utilised and they are expected to reverse in the foreseeable future.

- 28 -

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 the current tax assets against the 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
The Group applies the exception to recognising and disclosing information about deferred tax assets and liabilities related to income
taxes arising from tax law enacted or substantively enacted to implement the Pillar Two model rules published by the OECD.

(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.

- 29 -

4. Critical accounting judgements and key sources of estimation uncertainty(1) Application of estimates and judgements
In preparing the consolidated financial statements, management uses estimates and judgments.

Management's estimates and judgments affect the amounts of assets and liabilities as of the reporting date of the consolidated financial
statements and the amounts reported as revenues and expenses.
The following are items that require estimates and judgements and are considered significant:· Determination of net realisable value of obsolete inventory (Note 14 “Inventories”)· Expected cash flow from overdue trade and other receivables (Note 21 “Financial instruments”)· Useful lives of property, plant and equipment, right-of-use assets and intangible assets (Note 3 “Significant accounting policies”, (5)“Property, plant and equipment”, (6) “Leases” and (7) “Intangible assets”)· Lease period of right-of-use assets (Note 3 “Significant accounting policies”, (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 9 “Impairment losses”)· Financial asset measured at fair value (Note 21 “Financial instruments”)· Recoverability of suspense payments of income taxes (Note 11 “Deferred taxes and income taxes” and Note 13 “Other assets andliabilities”)· Recoverability of deferred tax assets (Note 11 “Deferred taxes and income taxes”)· Assumptions used for treatment of retained earnings of overseas subsidiaries and associates for tax purposes (Note 11 “Deferred taxes
and income taxes”)· Assumptions used to calculate retirement benefit obligations (Note 17 “Retirement benefit plans”)· Asset retirement obligations arising from legal obligations and constructive obligations (Note 18 “Provisions”)· Fair value of share-based payments plans (Note 22 “Share-based payments”)
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 accounting estimates will affect 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 markets in which the Group operates· Development of new products and timing of development· Changes in the political, economic, and regulatory environment, shortage of labour, labour strikes, natural disasters, pandemic andimpacts of unexpected international affairs in the countries in which the Group is located and operates· The effect of deferred taxes and income taxes on transactions between locations in different tax jurisdictions with different tax rates,or transactions between taxable and tax-exempt businesses(including discrepancies in opinion between the Company and the tax authority)· Fluctuations of currency exchange rates· The trend of environmental and governmental regulations
Global economic stagnation and the occurrence of natural disasters 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 9 “Impairment losses”)· Recoverability of deferred tax assets (Note 11 “Deferred taxes and income taxes”)- 30 -

5. Operating segment information(1) Overview of major products and services of reportable segments
Reportable segments are components of the Group for which separate financial information is obtained and examined on a regularbasis by the board of directors and 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 “life and culture” and “information technology” 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: Life Care business, Information Technology business and Other
business, which are consistent with the above business domains.
In the Life Care business, the Group produces and sells health care related products that are used routinely in health maintenancefields, and medical related products including medical equipment and medical supplies used in medical treatment. Some uniquefeatures of this business segment are that approvals and permits are required from relevant authorities in each country and that
advanced technological strength and reliable quality control systems are the key requirements.
In the Information Technology business, the Group produces and sells essential items for digital devices. Included are electronics
related products that are indispensable for today's digital information and communication technology, and imaging related productsthat are necessary to capture images as digital data based on optical technologies.
Other business includes the business that provides mainly speech synthesis software and information system services.
The main products and services for each reportable segment described above are as follows:
Reportable Segment
Life Care

Major Products and Services

Health Care related products

Eyeglass lenses and Contact lenses

Medical related products

Medical endoscopes, Medical accessories, Automated endoscope
reprocessors (AERs), Intraocular lenses, Ophthalmic medical
equipment, Artificial bone, Metallic implants for orthopedics,
Chromatography carriers

Information Technology

Other

Electronics related products

Photomasks and Maskblanks for semiconductors,
Photomasks for FPD, Glass disks for hard disk drives (HDDs)

Imaging related products

Optical lenses, Optical glass material, Laser equipment, Light source
Speech synthesis software, Design of information systems- 31 -

(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 31 March
2022
Revenue from externalcustomers
Inter-segment sales
Total
Interest income
Interest expense
Depreciation and amortisation

Life Care

Information
Technology

Other

Total

407,5493

248,403
82

5,514
822

407,552

248,485

6,336

Adjustments

Consolidated

661,466
906

－
(906)

661,466

662,372(906)

661,466

－

309

539

7

855

852

1,707

(1,065)(24,784)(259)(17,339)

(1)
(376)

(1,325)(42,499)

481
(520)

(844)
(43,019)

126(1,078)5

131(1,078)(176)(406,315)－(1,166)(45)(1,078)(407,481)

Share of profit (loss) of
associates
Impairment losses
OthersSegment profit before tax(294,790)－(108,545)－－(2,980)86,269122,886

2,986

212,141(1,435)

210,706

19,55014,08164

33,695740

34,435

Other disclosure
Capital expenditure

Note:
Adjustments to segment profit before tax of (1,435) million yen for the year ended 31 March 2022 consist of profit or loss of theCompany’s headquarters (after elimination of dividend income from Group companies) of (1,435) million yen.
(Millions of Yen)
For the year ended 31 March
2023
Revenue from externalcustomers

Life Care

Information
Technology

474,628

244,338

Other

Total

4,615

723,582

Adjustments

Consolidated

723,582

Inter-segment sales

3

213

19

235

－
(235)

Total

474,631244,552

4,634

723,816(235)

723,582

2,387(2,039)

1,586
(683)

7
(3)

3,979
(2,725)

3,678
1,795

7,657
(930)

Depreciation and amortisation
Share of profit (loss) of
associates(28,140)(20,630)(321)(49,092)(524)(49,615)

71

32

－

102

(20)

83

Impairment losses
Others(524)(352,066)(558)(104,630)－(3,379)(1,082)(460,076)－(3,786)(1,082)(463,862)

94,319119,667

938

214,923909

215,832

24,48017,500197

42,177

1,291

43,468Interest income
Interest expense

Segment profit before tax－

Other disclosure
Capital expenditure- 32 -

(Thousands of U.S. Dollars (Note 2))
For the year ended 31 March
2023

Life Care

Information
Technology

Other

Total

3,554,468
20

1,829,839
1,599

34,561
139

5,418,869
1,759

3,554,489

1,831,438

34,70017,873(15,270)(210,739)

11,875(5,118)(154,500)54(19)(2,405)

Share of profit (loss) of
associates
Impairment losses
Others528(3,924)(2,636,608)

239(4,182)(783,573)

Segment profit before tax

706,349
183,327

Revenue from externalcustomers
Inter-segment sales
Total
Interest income
Interest expense
Depreciation and amortisation

Adjustments

Consolidated－(1,759)5,418,869

5,420,627(1,759)5,418,869

29,802(20,407)(367,644)

27,543
13,443(3,921)

57,345(6,964)(371,565)－－(25,308)767(8,106)(3,445,489)(147)－(28,352)620(8,106)(3,473,841)

896,180

7,022

1,609,550

6,807

1,616,358

131,057

1,478

315,863

9,668

325,530－

Other disclosure
Capital expenditure
Note:
Adjustments to segment profit before tax of 909 million yen (6,807 thousand U.S. dollars) for the year ended 31 March 2023 consist of(30) million yen of inter-segment transaction elimination ((223) thousand U.S. dollars) and the profit or loss of the Company’s
headquarters (after elimination of dividend income from Group companies) of 939 million yen (7,030 thousand U.S. dollars).
(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 2022 and 2023:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))For the year ended
31 March 2022

For the year ended
31 March 2023

For the year ended
31 March 2023

Life Care
Health Care related products

299,823

351,617

2,633,246

Medical related products

107,726

123,011921,222

Life Care total

407,549474,628

3,554,468

Electronics related products
Imaging related products

209,726
38,677208,199
36,1401,559,191
270,649

Information Technology total

248,403244,338

1,829,839

5,514

4,615

34,561

661,466

723,582

5,418,869

Information Technology

Other
Total revenue from externalcustomers- 33 -

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

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))For the year ended
31 March 2022

For the year ended
31 March 2023

For the year ended
31 March 2023

Japan

164,663

170,056

1,273,542

U.S.A.
Singapore

83,342
77,401

105,168
76,521

787,598
573,064

China

62,82572,246541,048

TaiwanOthers44,068229,168

48,430251,160

362,689
1,880,928

Total

661,466

723,582

5,418,869

Note:Geographical areas are based on the location of the customers.
The amount of non-current assets in Taiwan is insignificant; therefore, it is included in Others.
Non-current assets(Millions of Yen)

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))For the year ended
31 March 2022

For the year ended
31 March 2023

For the year ended
31 March 2023

U.S.A.

59,81763,961

479,002

Japan

33,79837,457

280,517

China
SingaporeLaos21,67821,997
21,83734,29920,842
18,489256,863
156,083
138,461

Others

86,006

86,201

645,558

Total

245,133

261,249

1,956,484

Note:(i) Geographical areas are based on the physical location of non-current assets.
(ii) Financial instruments, deferred tax assets, and pension plan assets are not included.
Revenue from external customers in Laos is insignificant; therefore, it is included in Others.
(5) Information about major customers
Information is omitted because there are no external customers whose revenue from transactions with a single external customer
exceeds 10% of the Group's revenue.

- 34 -

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

Balance at 1 April 2021
Additions
Acquisitions through businesscombinations
Disposals (i)Buildings and Machinery
structuresand carriers

Tools,
equipment
and fixtures

Land

Construction Right-of-use
in progress
assetsTotal

113,213

312,299

70,4958,296

28,44033,063565,805

414

2,207

1,942

－

20,4528,401

33,416

34

242

12

－

－

－

287

(313)

(5,033)(3,218)

(45)

(62)

(4,812)(13,483)

Transfer from construction inprogress
Effect of foreign currency

2,451

22,6383,126

65(28,280)－－

exchange differences
Others

6,698
(436)

16,811(5,873)

4,801
1,112

163
－

1,129
1,210

1,557
14

31,159(3,974)122,061

343,290

78,271

8,478

22,88838,222

613,210

Balance at 31 March 2022
Additions

705

2,947

2,370

－

26,473

10,19442,690Acquisitions through businesscombinations
Disposals (i)79(2,098)

1,092(4,273)59(2,258)

－
(743)

1,390
(32)

202
(6,167)

2,822(15,573)

Transfer to assets held for sale

76

71

18

－

－

－

165

3,164

14,728

2,736－(20,628)

－

－

6,080

14,412

2,757

214

929

1,240

25,633(226)(2,115)

1,164

－

372

221

(585)

129,842

370,151

85,118

7,949

31,391

43,912

668,363

Transfer from construction inprogress
Effect of foreign currency
exchange differences
OthersBalance at 31 March 2023

- 35 -

(Millions of Yen)
Accumulated depreciation and Buildings and Machinery
impairment losses
structuresand carriers

Tools,
equipment
and fixtures

Land

Construction Right-of-use
in progress
assets

Total

Balance at 1 April 2021

(72,961)(269,661)(44,929)

(954)

(1)

(12,343)(400,848)

Depreciation expense
Impairment losses (ii)

(4,087)(20,989)(83)(4,713)
(39)

－
(7)

(7,689)(13)(37,477)
(143)

4,961

2,322

－
－
38

－

4,269

11,861(3,918)(14,067)(2,698)

134

3,778

522

－
－

Disposals (i)Effect of foreign currency
exchange differences
Others

－
271

(0)

(635)

(21,319)

－

(55)

4,379

Balance at 31 March 2022

(80,561)(296,061)(49,535)

(916)

(8)

(16,466)(443,546)

Depreciation expense
Impairment losses (ii)(4,549)(335)(25,105)(31)(5,064)
(0)

－
－

－
(564)

(8,327)(151)(43,045)(1,081)

Disposals (i)

1,737

4,239

2,086

6,116

14,185

(7)

(7)

－
－

7

(29)

－

－

(42)

exchange differences
Others(3,629)75(12,331)
1,865(2,149)
456

－

(17)

－

－

(538)
81

(18,664)2,478

Balance at 31 March 2023

(87,290)(327,432)(54,211)

(916)

(582)

(19,284)(489,715)

Transfer to assets held for sale
Effect of foreign currency(Millions of Yen)
Carrying amount

Buildings and Machinery
structuresand carriers

Tools,
equipment
and fixtures

Land

Construction Right-of-use
in progress
assets

Total

Balance at 1 April 2021

40,252

42,63825,567

7,342

28,43820,720164,957

Balance at 31 March 2022

41,501

47,23028,736

7,561

22,88021,756

169,665

Balance at 31 March 2023

42,552

42,72030,906

7,033

30,81024,627

178,648- 36 -

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

Balance at 31 March 2022

Buildings and Machinery
structuresand carriers

Tools,
equipment
and fixtures

Land

Construction Right-of-use
in progress
assetsTotal

914,1132,570,886

586,167

63,489171,408

286,243

4,592,305

Additions
Acquisitions through business

5,283

22,07017,752－

198,255

76,341

319,702

combinations
Disposals (i)Transfer to assets held for sale591
(15,714)572

8,177(32,004)529

443(16,912)137－(5,563)

10,406(242)

1,516(46,188)－－－

21,133(116,622)
1,238

Transfer from construction inprogress

23,696110,297

20,489－(154,481)－－

exchange differences
Others45,534(1,692)

107,931(15,838)

20,650
8,716

1,603
－

6,959
2,784

9,286
1,653

191,962(4,378)

Balance at 31 March 2023

972,383

2,772,047

637,441

59,529235,089

328,852

5,005,341

Effect of foreign currency(Thousands of U.S. Dollars (Note 2))
Accumulated depreciation and Buildings and Machinery
impairment losses
structuresand carriers

Tools,
equipment
and fixtures

Land

Construction Right-of-use
in progress
assetsBalance at 31 March 2022

(603,316)(2,217,185)(370,962)

Depreciation expense(34,068)(188,011)(37,922)(6,862)－

Impairment losses (ii)
Disposals (i)(2,508)13,009(232)
31,744(0)
15,622(59)(123,311)(3,321,695)－(4,222)
53(62,358)(322,360)(1,134)45,806(8,096)106,234

－

－

(317)
(139,775)
18,557(3,667,452)

(215)

(53)

(49)

－
－
－

Effect of foreign currency
exchange differences
Others(27,179)565(92,349)
13,967(16,091)
3,418

－
－

(129)
－

(4,027)
607

Balance at 31 March 2023

(653,712)(2,452,120)(405,984)(6,862)(4,357)(144,418)

Transfer to assets held for sale

Total

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

Balance at 31 March 2023

Buildings and Machinery
structuresand carriers
318,672

319,927

Tools,
equipment
and fixtures

Land

231,457

52,667

Construction Right-of-use
in progress
assets230,732

184,434

Total

1,337,889

Note:(i) Gain and loss arising from the sale or disposal of property, plant and equipment for the years ended 31 March 2022 and 2023, are
set out in Note 24 “Revenue and expenses (excluding finance income and costs)”. Gain and loss on sale of assets held for sale areincluded in ‘gain on sale of property, plant and equipment’ and ‘loss on sale of property, plant and equipment’ in Note 24.
(ii) Details of impairment losses are set out in Note 9 “Impairment losses”.
(iii) Property, plant and equipment under construction are included in “construction in progress” in the table above.
Details of commitments for the acquisition of property, plant and equipment are set out in Note 33 “Commitments for expenditure”.
There is no borrowing cost capitalised and included in the cost of acquisition of property, plant and equipment.

- 37 -

The following are carrying amounts for property, plant and equipment and intangible assets under Right-of-use assets:(Millions of Yen)
Right-of-use assets

Tools,
Buildings and Machinery andequipment andstructures
carriers
fixtures

Land

Others

Total

Balance at 31 March 2022

16,534

934

451

3,837

3

21,759Balance at 31 March 2023

18,735

1,084

238

4,571

1

24,629(Thousands of U.S. Dollars (Note 2))
Right-of-use assets

Tools,
Buildings and Machinery andequipment andstructures
carriers
fixtures

Balance at 31 March 2023

140,304

8,117

1,782

Land

Others34,230Total
8

184,442

7. Leases(Lessee)
As a lessee, the Group leases buildings mainly for offices and stores. Certain lease contracts include renewals or options and escalation
clauses (clauses that increase the lease contract amount). There are no restrictions imposed by lease contracts (such as restrictions on
dividends, additional borrowings and additional leases).
Details of expenses relating to leases are as follows:(Millions of Yen)

(Millions of Yen)

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

For the year ended 31
March 2022

For the year ended 31
March 2023

For the year ended 31
March 2023

Buildings and structures

6,605

7,202

53,939Machinery and carriers

559

631

4,729

Tools, equipment and fixtures

352

293

2,198

Land

174

199

1,493

2

2

13

7,690

8,328

62,371

Interest expense on lease liabilities

338

402

3,010

Expense relating to short-term leases

1,397

1,396

10,458

Expense relating to leases of low-value assets

454

518

3,877

Expense relating to variable lease payments (Note)

885

1,034

7,741

Depreciation of right-of-use assets

Software
Total(Note) The expense is not included in the measurement of lease liabilities.
Expense relating to variable lease payments is linked with sales revenue stipulated in the lease contracts of the store operated
in shopping center, etc.
Depreciation of right-of-use assets is included in the line item ‘Depreciation and amortisation’, interest expense on lease liabilities isin ‘Finance costs’ and expenses relating to short-term leases, leases of low-value assets and variable lease payments are in ‘Other
expenses’ in the consolidated statement of comprehensive income.
For the year ended 31 March 2022 and 2023, total cash outflows for leases are 10,953 million yen and 11,566 million yen (86,618
thousand U.S. dollars) for each period.
A maturity analysis of lease liabilities is set out in Note 21 “Financial instruments”.

- 38 -

(Lessor)①Finance leases
The Group leases its products and merchandises as a lessor.
Profit from finance lease contracts is as follows:(Millions of Yen)

(Millions of Yen)

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

For the year ended 31
March 2022

For the year ended 31
March 2023

For the year ended 31
March 2023

42

39

289

Finance income on the net investment in the lease

A maturity analysis of the receivable under finance lease contracts is as follows:(Millions of Yen)

(Millions of Yen)

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

As at 31 March 2022

As at 31 March 2023

As at 31 March 2023

Not later than one year

535

574

4,299

Later than one year but not later than two years

420

464

3,474

Later than two years but not later than three years

331

343

2,567

Later than three years but not later than four years

221

219

1,644

Later than four years but not later than five years

114

139

1,039

Later than five years

200

259

1,937

1,822

1,998

14,960

Unearned finance income

(78)

(94)

(701)

Net investment on the lease

1,744

1,904

14,259Total- 39 -

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

Intangible assets

Goodwill
SoftwareTechnology

Customer
related assets

Others (i)49,661

24,511

21,34331,043

5,915

82,811

Additions

－

873

－

－

147

1,020

Acquisitions through businesscombinations
Disposals

551

2
(222)

－
(4)

1,351

－

－

59
(3)

1,412
(229)

Effect of foreign currency
exchange differences
Others

5,576
(0)

819
(789)

2,058
(48)

3,237
(221)

526
30

6,640
(1,027)

Balance at 31 March 2022

55,78825,194

23,34835,411

6,674

90,626

－

682

－

－

96

778

5,027

16

11

3,207

(1,148)
31

－
(304)

3,180

(235)
815

－

－
－

(95)
19

(1,548)
49

2,595

941

1,993

2,487

442

5,863

Balance at 1 April 2021

Additions
Acquisitions through businesscombinations
Disposals
Transfer to assets held for sale
Effect of foreign currency
exchange differences
OthersBalance at 31 March 2023

Total

－

(133)

－

82

(293)

(345)

63,991

25,58225,036

41,1606,853

98,632(Millions of Yen)

Accumulated amortisation andimpairment losses

Intangible assets

Goodwill
SoftwareTechnology

Customer
related assets

Others

Total

Balance at 1 April 2021

(13,973)(20,260)(8,902)(12,537)(4,002)(45,702)

Amortisation expense (ii)
Impairment losses (iii)

－
(178)

(1,167)(4)(1,548)(184)(2,496)
(433)

(331)
(136)

(5,542)(758)

Disposals
Effect of foreign currency
exchange differences

－

215

4

－

－

220

(1,990)

(668)

(975)

(1,536)(378)(3,557)

－

172

(0)

221

87

480

OthersBalance at 31 March 2022

(16,141)(21,712)(11,605)(16,781)(4,760)(54,859)

Amortisation expense (ii)－

(1,138)(1,783)(3,328)(321)(6,570)

Impairment losses (iii)
Disposals

－
235

(1)
925

－
304

－
－

－
93

(1)
1,322

Transfer to assets held for sale

－

(9)

－

－

(8)

(17)

Effect of foreign currency
exchange differences
Others(1,267)
－

(785)
(4)

(970)
38

(1,055)
30

(322)
293

(3,132)
357

Balance at 31 March 2023

(17,173)(22,724)(14,016)(21,135)(5,025)(62,900)- 40 -

(Millions of Yen)
Carrying amount

Intangible assets

Goodwill
SoftwareTechnology

Customer
related assets

Others

Total

Balance at 1 April 2021

35,6884,252

12,44018,506

1,912

37,110

Balance at 31 March 2022

39,648

3,482

11,743

18,6301,913

35,768

Balance at 31 March 2023

46,8182,858

11,021

20,025

1,828

35,732(Thousands of U.S. Dollars (Note 2))
Cost

Balance at 31 March 2022

Intangible assets

Goodwill
SoftwareTechnology

Customer
related assets

Others (i)417,796

188,675

174,854

265,190

49,978678,697

－

5,110

－

－

718

5,828

－
(2,280)23,816

83

24,018

－
－

(713)
139

(11,590)369

3,312(2,192)

43,907(2,580)51,325

738,649

Additions
Acquisitions through businesscombinations

37,647

119

Disposals
Transfer to assets held for sale

(1,758)6,103(8,597)230

Effect of foreign currency
exchange differences
Others

19,436

14,922

－

7,045
(999)

－

18,627
611

Balance at 31 March 2023

479,225

191,584

187,496308,244－

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

Intangible assets

Goodwill
SoftwareTechnology

Customer
related assets

Others

Total

Balance at 31 March 2022

(120,877)(162,599)(86,913)(125,674)(35,648)(410,834)

Amortisation expense (ii)
Impairment losses (iii)－－(8,526)(9)(13,350)(24,925)(2,404)－－－(49,205)
(9)

1,758

6,929

2,280

－

695

9,903

－

(69)

－

－

(57)

(126)

(9,486)(5,879)(7,263)(7,903)(2,410)(23,455)

Disposals
Transfer to assets held for sale
Effect of foreign currency
exchange differences
OthersBalance at 31 March 2023

－

(28)

282

225

2,192

2,672

(128,606)(170,181)(104,964)(158,277)(37,633)(471,054)(Thousands of U.S. Dollars (Note 2))
Carrying amount

Balance at 31 March 2023

Intangible assets

Goodwill

350,619

SoftwareTechnology

Customer
related assets

21,40382,532

149,968

Others13,692

Total
267,595

Note:(i) There were no significant internally generated intangible assets for the years ended 31 March 2022 and 2023.
(ii) Amortisation expense is included in the line item ‘Depreciation and amortisation’ in the consolidated statement of comprehensive
income.
(iii) Details of impairment losses are set out in Note 9 “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 33 “Commitments for expenditure”. Details of intangible assets
in the consolidated statement of financial position are as follows:- 41 -

As at 31 March 2022

As at 31 March 2023

Carrying amount Remaining useful Carrying amount(Millions of Yen) lives (Years) (Millions of Yen)

Carrying amount(Thousands of Remaining useful
U.S. Dollars
lives (Years)(Note 2))

Health Care related
Technology

products

1,391

6

1,212

9,075

5

10,333

7

9,805

73,4316

products

12,726

8

14,520108,740

8

Medical related
products

4,323

11

4,102

30,721

10

Medical related
products
Health Care related

Customer related
assets

9. 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)
For the year ended 31 March 2022

(Millions of Yen)
For the year ended 31 March 2023

(Thousands of U.S. Dollars (Note 2))
For the year ended 31 March 2023

Buildings and structures

－

335

2,509

Machinery and equipment

83

31

232

Tools, equipment and fixtures

39

0

0

Construction in progress

7

564

4,222

Right-of-use assets

13

151

1,134

Total impairment losses onproperty, plant and equipment

143

1,081

8,097

Goodwill

178

－

－

Software4

1

9Technology

184

－

－

Customer related assets

433

－

－

Others136－－

Total impairment losses on
intangible assets

758

1

9

Total impairment losses

1,078

1,082

8,106

(1) Cash-generating units
The Group identifies each strategic business unit (“SBU”) as a 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, theasset is individually tested for impairment.

- 42 -

(2) Impairment losses on assets in business units
For the year ended 31 March 2022
In Life Care business, the book value of the asset group was reduced to the recoverable amount and the corresponding impairment lossof 1,078 million yen was recognised in European subsidiaries due to the decision on withdrawing from production and sales of acertain ophthalmic medical equipment. The recoverable amount of the asset group was measured at fair value less related selling costs,
which is mainly based on market approach and categorised within Level 3 of the fair value hierarchy as it contains unobservable inputs
such as third party's valuation.
(Millions of Yen)
Impairment lossesLife Care
Medical related products(Ophthalmic medical equipment)
Property, plant and equipment
Machinery and carriers

83

Tools, equipment and fixtures

39

Construction in progress

7

Right-of-use assets

13

Total impairment losses onproperty, plant and equipment

143

Goodwill

178

Intangible assets
Software4

Technology

184

Customer related assets

433

Others136

Total impairment losses on
intangible assets

758

Total

1,078

- 43 -

For the year ended 31 March 2023
In the corresponding year, the impairment loss of 1,082 million yen (8,106 thousand U.S. dollars) was recognized. The asset group forthe products of the Asian subsidiaries of Ophthalmic medical equipment and Medical endoscopes in the Life care business has been
reduced to the recoverable amount due to plant closures and other dormant operations resulting from the recollection of manufacturingsite. The asset group for the products of the Asian subsidiaries of Glass disks for hard disk drives in Information Technology businesshas been reduced to the recoverable amount due to idle manufacturing facilities. The recoverable amount of the asset group was
measured at fair value less related selling costs, which is mainly based on market approach and categorised within Level 3 of the fairvalue hierarchy as it contains unobservable inputs such as third party's valuation.
(Millions of Yen)

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

Impairment losses

Impairment lossesLife Care
Medical related products:(Ophthalmic medical equipment)
Property, plant and equipment
Buildings and structures

208

1,555

Machinery and carriers

1075Construction in progress

5

41

151

1,134

Buildings and structures

127

954

Machinery and carriers

21

156

0

0

558

4,181

1,081

8,096

1

9

Right-of-use assets(Medical endoscopes)
Property, plant and equipment

Information Technology
Electronics related products:(Glass disks for hard disk drives(HDDs))
Property, plant and equipment
Tools, equipment and fixtures
Construction in progress
Total impairment losses onproperty, plant and equipment
Life Care
Medical related products:(Ophthalmic medical equipment)
Intangible assets
SoftwareTotal impairment losses on
intangible assets
Total- 44 -

1

9

1,082

8,106

(3) 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. The recoverable amountof goodwill allocated to cash-generating units was measured at the value in use and it was determined using cash flow projections
based on the financial budgets that had been approved by the Group’s management and applying a discount rate of 6.0% to 17.6% perannum which is the cash-generating units’ pre-tax WACC. Cash flow projections during the budgeted period are based on the expected
gross margins and taking into account inflation. The cash flows beyond the budget period have been extrapolated using a steady annum
growth rate which is the projected long-term average growth rate for the main products market. Management believes that any
reasonably possible change in the key assumptions (e.g., profit ratio, inflation, the projected long-term average growth rate and the pretax WACC) on which the recoverable amount is based would not cause the aggregate carrying amount to exceed the aggregate
recoverable amount of the cash-generating unit.
The carrying amount of goodwill was allocated to the cash-generating units as follows:(Millions of Yen)
As at 31 March 2022

Life Care

Japan
Americas
EuropeAsia
Total

Health Care related
products

Medical related products

Eyeglass lenses

Medical accessories

Other

Total

812
29,151
749

733
6,444
879

－
－
577

1,545
35,595
2,205

303

－

－

303

31,016

8,055

577

39,648(Millions of Yen)

As at 31 March 2023

Life Care
Health Care related
products

Medical related products

Eyeglass lenses

Medical accessories

Other

Total

Japan
Americas
Europe808
31,517
788

733
7,115
937

－
615

1,541
38,632
2,340

Asia

4,306

－

－

4,306

37,4198,785

615

46,818

Total－(Thousands of U.S. Dollars (Note 2))
As at 31 March 2023

Life Care
Health Care related
products

Medical related products

Eyeglass lenses

Medical accessories

Other

Total

Japan
Americas

6,054
236,026

5,488
53,287

EuropeAsia

5,902
32,244

7,016

－
－
4,603

－

－

17,521
32,244

280,226

65,7904,603

350,619

Total- 45 -

11,541
289,313

10. Investments in associates
A summary of the Group’s associates, which are not individually significant, is as follows:(Millions of Yen)

(Millions of Yen)

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

As at / for the year
ended 31 March 2022

As at / for the year
ended 31 March 2023

As at / for the year
ended 31 March 2023

The Group’s share of net income (loss)
The Group’s share of other comprehensive income (loss)

(45)
142

83
2

620
14

The Group’s share of comprehensive income (loss)
The Group’s share of net assets

98
930

85
971

634
7,270

Details of the Group’s major associates, which are not individually significant, are as follows:
Name of associate
AVANSTRATE, INC.

Ownership interest (%)

Place ofPrincipal activity incorporation andoperation
Production andsale of glass
substrate for

Segment

As at
31 March 2022

As at
31 March 2023

JAPAN

Corporate

46.6

46.6

thin filmtransistor (TFT)
liquid crystal
EYE-Q VISION PRIVATELIMITED

Medical services
related toophthalmology

INDIA

Corporate

24.3

24.3

HTK LENTES OFTALMICASLTDASale of opticallens

BRAZIL

Life Care

35.9

35.6

JIASHAN CANDEO OPTICALGLASS CO., LTD.

Production andsale of special
glass, such as

CHINA

Information
Technology

49.0

49.0

coloured glass
The Group’s unrecognised share of loss on associates is as follows:(Millions of Yen)

(Millions of Yen)

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

As at / for the year
ended 31 March 2022

As at / for the year
ended 31 March 2023

As at / for the year
ended 31 March 2023－
16,662

3,125
19,787

23,402
148,183

The Group’s unrecognised share of net loss
The Group’s unrecognised share of accumulated net loss

- 46 -

11. Deferred taxes and income taxes(1) Deferred taxes
Details of deferred tax assets and liabilities are as follows:(Millions of Yen)
As at
1 April 2021

Recognised
Recognised inin other
As atprofit or loss comprehensive 31 March 2022
incomeTemporary differences
Enterprise tax payable
Write-down of inventories

681
1,532

218
80

－
－

899
1,613

Allowance for doubtful
accounts
Provisions
Accrued expenses

551
1,440
2,943

(51)
53
431

－
－
－

499
1,493
3,373

Unrealised profit on inventories
Depreciation and amortisation

2,780
2,517

1,244
116

－
－

4,024
2,633

508

(82)

－

426

Exchange differences ontranslating foreign operations
Lease liabilities
Others

(153)
2,677
2,798

－
312
1,316

(11)
－
(52)

(165)
2,989
4,062

Subtotal

18,273

3,637

(63)

21,846

Undistributed retained earningsof subsidiaries(5,110)(2,508)－(7,618)Depreciation and amortisation
Right-of-use assets(7,759)(2,822)

(784)
(340)

－
－

(8,543)(3,162)Financial assets measured atfair value through othercomprehensive income(3,052)(781)(3,832)

Impairment losses(1,416)

－
(361)

－

(1,776)

Subtotal(20,158)(3,993)(781)(24,932)

Tax loss carryforwards and tax
credits
Tax loss carryforwards

2,488

(400)

－

2,088

15

1

－

16

Subtotal

2,504

(399)

－

2,104

Total

618

(756)

(844)

(981)

OthersTax credits

Note:
The difference between the total amount of “Recognised in profit or loss” as above and “Deferred tax expenses” in Note 11 “Deferred
tax and income taxes” (2) Income taxes is due to foreign exchange fluctuations.

- 47 -

(Millions of Yen)
As at
1 April 2022
Temporary differences
Enterprise tax payable
Write-down of inventories
Allowance for doubtful
accounts

899
1,613

Recognised
Recognised inin other
As atprofit or loss comprehensive 31 March 2023
income

(70)
92

－
－

829
1,704

499

2

Provisions
Accrued expenses
Unrealised profit on inventories

1,493
3,373
4,024

170
856
334

－
－
－
－

1,662
4,229
4,358

502

Depreciation and amortisation
Impairment losses

2,633
426

81
(30)

－
－

2,714
396

translating foreign operations
Lease liabilities
Others

(165)
2,989
4,062

－
75
(456)

(17)
－
(58)

(181)
3,064
3,547

Subtotal

21,846

1,053

(75)

22,824

Undistributed retained earningsof subsidiaries

Exchange differences on(7,618)(1,516)－(9,134)

Depreciation and amortisation
Right-of-use assets
Financial assets measured atfair value through other(8,543)(3,162)

(86)
(48)

－
－

(8,629)(3,210)comprehensive income(3,832)

1,767(2,066)(1,776)

－
(539)

－

(2,315)(24,932)(2,189)1,767(25,353)

2,088
16

160
116

－
－

2,248
132

Subtotal

2,104

276

－

2,380

Total

(981)

(860)

1,691

(150)

OthersSubtotal
Tax loss carryforwards and tax
credits
Tax loss carryforwards
Tax credits

Note:
The difference between the total amount of “Recognised in profit or loss” as above and “Deferred tax expenses” in Note 11 “Deferred
tax and income taxes” (2) Income taxes is due to foreign exchange fluctuations.

- 48 -

(Thousands of U.S. Dollars (Note 2))
As at
1 April 2022
Temporary differences
Enterprise tax payable
Write-down of inventories

6,735
12,076

Recognised
Recognised inin other
As atprofit or loss comprehensive 31 March 2023
income

(527)
687

－
－

6,207
12,763

Allowance for doubtful
accounts

3,741

17

Provisions
Accrued expenses
Unrealised profit on inventories

11,17725,26430,137

1,273
6,410
2,498

－
－
－
－

12,45031,674
32,636

Depreciation and amortisation
Impairment losses

19,717
3,187

608
(222)

－
－

20,325
2,964translating foreign operations
Lease liabilities
Others(1,232)
22,38230,421－562(3,418)

(126)
－
(438)

(1,358)22,94426,565

Subtotal

163,604

7,888

(564)

170,928

Undistributed retained earningsof subsidiaries

3,758

Exchange differences on(57,051)(11,353)－(68,404)

Depreciation and amortisation
Right-of-use assets
Financial assets measured atfair value through other(63,978)(23,680)

(646)
(358)

－
－

(64,624)(24,038)

comprehensive income(28,701)

13,231(15,470)(13,302)－(4,033)－(17,336)(186,712)(16,390)

13,231(189,871)

15,638
120

1,195
869

－
－

16,833989

Subtotal

15,7582,064－

17,821

Total(7,350)(6,439)12,667(1,122)OthersSubtotal
Tax loss carryforwards and tax
credits
Tax loss carryforwards
Tax credits

Note:
The difference between the total amount of “Recognised in profit or loss” as above and “Deferred tax expenses” in Note 11 “Deferredtaxes and income taxes” (2) Income taxes is due to foreign exchange fluctuations.

- 49 -Tax loss carryforwards 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
31 March 2022

As at
31 March 2023

As at
31 March 2023

Tax loss carryforwards
Deductible temporary differences
Total

14,640
5,475

10,003
2,567

74,913
19,227

20,115

12,571

94,140The expiration date and amounts of tax loss carryforwards for which deferred tax assets are not recognised are as follows:(Millions of Yen)

(Millions of Yen)

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

As at
31 March 2022

As at
31 March 2023

As at
31 March 2023

Year 1

1,439

104

776

Year 2
Year 3
Year 4
Year 5 or later

210
1,104
1,281
10,606

840
1,220
399
7,441

6,286
9,133
2,991
55,724

14,64010,00374,913Total

The 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 2022 and 2023, were 370,329 million yen and 395,586 million yen (2,962,522
thousand U.S. dollars) for each period. No liability has been recognised in respect of these differences because the Group is in aposition to control the timing of the reversal of the temporary differences, and it is probable that such differences will not reverse in theforeseeable future.

(2) Income taxes
In Japan, the normal effective statutory tax rates are 30.5% for each of the years ended 31 March 2022 and 2023.
Current or deferred taxes in 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:(Millions of Yen)

(Millions of Yen)

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

For the year ended
31 March 2022

For the year ended
31 March 2023

For the year ended
31 March 2023

45,06446,949351,600

(323)

167

1,251

44,741

47,116352,851

401
241

(26)
(46)

(196)
(343)

Total deferred tax expense

643

(72)

(539)

Total income tax expense

45,38447,044352,312Current tax expense: (i)Current year
Prior years
Total current tax expense
Deferred tax expense: (ii)
Origination and reversal of temporary difference
Changes in tax rates

Note:(i) “Current tax expense” includes previously unrecognised tax benefits from tax loss carryforwards, tax credits and deductible
temporary differences. These benefits were 641 million yen and 91 million yen (681 thousand U.S. dollars) for the years ended 31
March 2022 and 2023 for each period.

- 50 -

(ii) “Deferred tax expense” includes previously unrecognised tax benefits from tax loss carryforwards, tax credits, deductible
temporary differences, and expenses or benefits arising from write-downs of deferred tax assets or the reversal of previous write-downsof deferred tax assets. These effects increased the deferred tax expense by 66 million yen and 182 million yen (1,364 thousand U.S.
dollars) for the years ended 31 March 2022 and 2023, for each period.
(iii) On 26 June 2013, the Company received a reassessment notice from the Tokyo Regional Taxation Bureau (“TRTB”) for additional
tax on the transfer pricing taxation for the transactions with overseas subsidiaries that develop and manufacture electronics-related
products for the five financial years ended 31 March 2007 to 2011. The Company has lodged an objection with TRTB seeking
withdrawal of the assessment in accordance with the relevant law.
On 29 March 2018, the Company received a written verdict from the National Tax Tribunal (the “Tribunal”), which partially cancelled
the reassessments. The Company disagrees with the remaining findings of the Tribunal’s verdict that maintains portions of thereassessment and the Company expects to appeal the findings in court to seek cancellation of all the reassessments by the tax
authorities. Consequently, the paid amount of 7,916 million yen was included in “Other current assets” as a suspense payment.
On 27 June 2018, the Company received a reassessment notice from TRTB for additional tax on the transfer pricing taxation for thetransactions with overseas subsidiaries that develop and manufacture electronics-related products for the three financial years ended 31
March 2012, 2013 and 2014. The Company has lodged an objection with TRTB seeking withdrawal of the assessment in accordancewith the relevant law.
On November 11, 2020, the Company received a written verdict from the Tribunal, which partially cancelled the reassessments. The
Company disagrees with the remaining findings of the Tribunal’s verdict that maintains portions of the reassessment and the Company
expects to appeal the findings in court to seek cancellation of all the reassessments by the tax authorities. Consequently, the paid
amount of 4,544 million yen was included in “Other current assets” as a suspense payment.
On 29 June 2021, the Company received a reassessment notice from the TRTB for additional tax on the transfer pricing taxation for thetransactions with overseas subsidiaries that develop and manufacture electronics-related products for the four financial years ended 31
March 2015 to 2018. The Company disagrees with the findings of the reassessment notice and expects to appeal the findings in court toseek cancellation of all the reassessments by the tax authorities. Consequently, the paid amount of 8,000 million yen was included in“Other current assets” as a suspense payment.
A reconciliation of the normal effective statutory tax rate with the actual tax rate is as follows. The actual tax rate represents the ratio
of income tax expense and profit before tax from continuing operations.
For the year ended
31 March 2022

For the year ended
31 March 2023

Effective statutory tax rate

30.5%

30.5%

Expenses not deductible for tax purposes
Income not taxable for tax purposes
Effect of unrecognised deferred tax assets
Impact of different tax rates applied to overseas subsidiaries

0.5%(0.1%)
0.0%(12.8%)

0.5%(0.0%)
0.2%(12.3%)

Profits and losses on investments in associates
Adjustment on deferred tax assets and liabilities due to the change of corporate tax
rate

0.0%

(0.0%)

0.0%(0.0%)Tax rate difference due to the elimination of unrealised profit on inventories
Increase/decrease in deferred tax liabilities related to undistributed earnings offoreign subsidiaries

0.0%

0.1%

1.2%

1.1%

Prior year income taxes
Foreign withholding tax arising from dividends from subsidiaries(0.2%)
1.1%

0.1%
0.9%

Others1.3%

0.7%

Actual tax rate

21.5%

21.8%

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

- 51 -

12. Other financial assets and liabilities(1) Details of 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 (Note 2))

As at
31 March 2022

As at
31 March 2023

As at
31 March 2023

Other financial assets
Other financial assets measured at amortised cost
FVTOCI financial assets

19,304
41,997

29,46936,213

220,690
271,199

Total

61,30065,682491,889

Total non-current assets (long-term financial assets)

54,07845,303

339,269

7,223

20,379152,620

Total current assets (other short-term financial
assets)(Millions of Yen)

(Millions of Yen)

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

As at
31 March 2022

As at
31 March 2023

As at
31 March 2023

Other financial liabilities
FVTPL financial liabilities

101

Other financial liabilities measured at amortised cost

24,409－21,787

Total

24,51021,787

163,163

23,863

21,523

161,187

647

264

1,977

Total non-current liabilities (other long-term
financial liabilities)
Total current liabilities (other short-term financial
liabilities)－
163,163(2) Details of FVTOCI financial assets
Details of FVTOCI financial assets are as follows:

KIOXIA Holdings Corporation(Millions of Yen)

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))As at 31 March 2022

As at 31 March 2023

As at 31 March 2023

38,941

33,576

251,449

The asset above is designated as FVTOCI because its profit or loss is not related to the business profit or loss, while there is apossibility of selling it in the future.

- 52 -

(3) Derecognition of FVTOCI financial assets
The Group derecognises FVTOCI financial assets when they are partially sold, considering the capital efficiency, reconsideration ofbusiness relationships and so on.
Details of fair value and cumulative gain or loss in other comprehensive income at the time of selling in the year ended 31 March 2022
and 2023 are as follows:
Fair value

Cumulative gain or loss

(Millions of Yen)

(Millions of Yen)

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

(Millions of Yen)

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

For the year ended
31 March 2022

For the year ended
31 March 2023

For the year ended
31 March 2023

For the year ended
31 March 2022

For the year ended
31 March 2023

For the year ended
31 March 2023

219

86

648

157

45

338

Cumulative gain or loss in other comprehensive income is transferred to retained earnings when FVTOCI assets are derecognised. The
amount of cumulative other comprehensive income or loss (after deduction of tax) which was transferred to retained earnings were 109
million yen and 31 million yen (235 thousand U.S. dollars) in the year ended 31 March 2022 and 2023.
Details of dividends income recognised from equity instruments are as follows:
Derecognised investment

Investment held as at end of fiscal year

(Millions of Yen)

(Millions of Yen)

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

(Millions of Yen)

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

For the year ended
31 March 2022

For the year ended
31 March 2023

For the year ended
31 March 2023

For the year ended
31 March 2022

For the year ended
31 March 2023

For the year ended
31 March 2023

－

－

－

11

9

69

- 53 -

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

(Millions of Yen)

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

As at 31 March 2022

As at 31 March 2023

As at 31 March 2023

488
201

458
288

3,432
2,159

Total

688

747

5,591

Suspense payment (Note)

20,46020,460153,227

Prepaid expenses
Refundable consumption taxes
Others

3,114
2,207
2,416

4,172
2,387
3,602

31,246
17,874
26,97728,19730,622

229,325

Non-current: Other assets
Long-term prepaid expenses
OthersCurrent: Other assets

Total(Millions of Yen)

(Millions of Yen)

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

As at 31 March 2022

As at 31 March 2023

As at 31 March 2023

Deposit received and long-term advance revenue,
etc.

2,262

2,820

21,119

Total

2,262

2,820

21,119Accrued salary/bonus/vacation pay

18,763

21,119158,159

Other accrued expenses
Advance received/deferred revenue
Accrued consumption taxes

24,7495,312
2,132

27,9506,047
2,683

209,31345,282
20,095

Non-current: Other liabilities

Current: Other liabilities

Others
Total

1,357

1,595

11,94652,31259,394

444,796

Note:
On 26 June 2013, the Company received a reassessment notice from the TRTB for additional tax on the transfer pricing taxation
for the transactions with overseas subsidiaries that develop and manufacture electronics-related products for the five financial
years ended 31 March 2007 to 2011. The Company has lodged an objection with TRTB seeking withdrawal of the assessment inaccordance with the relevant law.
On 29 March 2018, the Company received a written verdict from the Tribunal, which partially cancelled the reassessments. The
Company disagrees with the remaining findings of the Tribunal’s verdict that maintains portions of the reassessment and theCompany expects to appeal the findings in court to seek cancellation of all the reassessments by the tax authorities.
Consequently, the paid amount of 7,916 million yen was included in “Other current assets” as a suspense payment.
On 27 June 2018, the Company received a reassessment notice from the TRTB for additional tax on the transfer pricing taxation
for the transactions with overseas subsidiaries that develop and manufacture electronics-related products for the three financial
years ended 31 March 2012, 2013 and 2014. The Company has lodged an objection with TRTB seeking withdrawal of theassessment in accordance with the relevant law.
On 11 November 2020, the Company received a written verdict from the Tribunal, which partially cancelled the reassessments.
The Company disagrees with the remaining findings of the Tribunal’s verdict that maintains portions of the reassessment and theCompany expects to appeal the findings in court to seek cancellation of all the reassessments by the tax authorities.
Consequently, the paid amount of 4,544 million yen was included in “Other current assets” as a suspense payment.

- 54 -

On 29 June 2021, the Company received a reassessment notice from the TRTB for additional tax on the transfer pricing taxation
for the transactions with overseas subsidiaries that develop and manufacture electronics-related products for the four financial
years ended 31 March 2015 to 2018. The Company disagrees with the findings of the reassessment notice and expects to appeal
the findings in court to seek cancellation of all the reassessments by the tax authorities. Consequently, the paid amount of 8,000
million yen was included in “Other current assets” as a suspense payment.

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

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))As at 31 March 2022

As at 31 March 2023

As at 31 March 2023

Goods and products
Work in progress
Raw materials

45,274
10,872
22,203

Supplies
Total

53,241
10,511
26,365

398,72078,720
197,447

13,093

15,032

112,576

91,441

105,150

787,462

36

48

363

Inventories expected to be soldafter more than 12 months

The cost of inventories recognised as an expense during the years ended 31 March 2022 and 2023, was 283,675 million yen and
306,818 million yen (2,297,745 thousand U.S. dollars) for each period.
The cost of inventories recognised as an 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
31 March 2022

For the year ended
31 March 2023

For the year ended
31 March 2023

Amount of write-down
Amount of reversal of writedown

1,439

2,063

15,453－－－

The reversal of write-down was due to an increase in net realisable value, as a result of an increase in new orders with positive sales
activities.

15. Trade and other receivables
Details of trade and other receivables are as follows:

Accounts receivable(Millions of Yen)

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))As at 31 March 2022

As at 31 March 2023

As at 31 March 2023

127,580

138,359

1,036,166

Notes receivable andelectronically recordedmonetary claims-operating

5,557

5,498

41,176

Other receivables

4,002

2,406

18,017

Allowance for doubtful
accounts(2,965)(3,069)(22,986)

134,174

143,194

1,072,373

Total

The credit terms for customers are set between 30 days and 90 days for health care related products, between 15 days and 120 days for
medical related products, between 10 days and 90 days for electronics related products, between 30 days and 180 days for imaging
related products, and between 45 days and 60 days for other business products.
Refer to Note 21 “Financial instruments” for credit risk management and fair value of trade and other receivables.

- 55 -

16. Interest-bearing debt
Details of interest-bearing debt are as follows:(Millions of
Yen)(Millions ofYen)(Thousands of
U.S. Dollars(Note 2))Averageinterest rate(%)(i)

As at 31 March As at 31 March As at 31 March
2022
2023
2023
Long-term bank loans (excluding current portion)
Current portion of long-term bank loans

1,043
22

1,166
770

8,732
5,766

Short-term bank loans
Long-term lease liabilities
Short-term lease liabilities

655
12,7207,160

455
14,831
7,360

3,407
111,069
55,119Total Interest-bearing debt

21,59924,582

184,093

Total Interest-bearing long-term debt

13,763

15,997

119,801

Total Interest-bearing short-term debt

7,837

8,585

64,292Due

2.992024-2035

－
1.21
1.80
2.04

－
－
2024-2073－

Note:(i) Interest rates are based on the weighted-average rates that applied to the balances at the end of each fiscal year.
The obligations under leases are secured by the leased assets for which the lessor has ownership.
There is no debt with covenants as at 31 March 2023.
Details of the remaining contractual maturity for long-term borrowings and its fair values are set out in Note 21 “Financial
instruments”.
The changes in liabilities arising from financial activities are as follows:(Millions of Yen)
Non-cash changes

As at 1 April 2021

Short-term bankloans

Exchange differenceson translation offoreign operations

Cash flow

855

(200)

As at 31 March 2022

Others－655－Long-term bank
loans

1,017

(23)

70

－

1,065

Lease liabilities

18,877(8,217)

662

8,558

19,87920,749(8,440)

732

8,558

21,599Total(Millions of Yen)
Non-cash changes

As at 1 April 2022

Cash flow

Change of scopeof consolidation

Exchangedifferences ontranslation offoreign operations

As at 31 March2023

OthersShort-term bank
loans

655

(200)

－

－

－

455

Long-term bank
loans

1,065

(169)

981

60

－

1,936

Lease liabilities

19,879(8,618)204589

10,13722,191

21,599(8,988)

1,185

649

10,137

24,582Total- 56 -

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

Non-cash changes
As at 1 April
2022

Short-term bankloans

Cash flow

4,905

Exchangedifferences ontranslation offoreign operations

As at 31 March2023

Others(1,498)－

7,976(1,268)

7,344

446

－

14,498148,876(64,542)

1,528

4,413

75,913

166,188(67,307)

8,872

4,858

75,913

184,093Long-term bankloans
Lease liabilities

161,758

Total

Change of scopeof consolidation

－

－

3,407

17. Retirement benefit plans
The Group has contributory defined contribution plans and defined benefit plans, and non-contributory defined benefit plans. The
accounting policies adopted by the Group for retirement benefit plans are stated in Note 3 “Significant accounting policies (19)Retirement benefit costs”.
The Company and its domestic subsidiaries mainly have defined contribution plans. Overseas subsidiaries have benefit plans requiredby the local laws and regulations of each country. Unless a defined benefit plan is required by the laws of the country in which theoverseas subsidiaries operate, a defined contribution plan has been put into place. The plan in the U.K. represents a substantial portionof the pension plans of the Group, where it is the closed plan that stopped new registrations. Management believes that general risks,such as investment, credit and salary risks are not significant in the plan.
The Group does not have retirement benefit plans other than pension plans and lump-sum retirement allowances.
(1) Defined benefit plans
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 2022

As at 31 March 2023

As at 31 March 2023

Present value of funded defined benefit obligation

8,322

7,949

59,532

Fair value of plan assets(4,584)(4,113)(30,799)

3,738

Total

3,837

28,732

Effect of changes to the asset ceiling
Net liability arising from defined benefit plansobligations

11

83

625

3,749

3,920

29,357

Balance in the consolidated statement of financial
position
Liability

3,766

4,028

30,163

18

108

806

Asset (Other non-current assets)- 57 -

Amounts recognised in the consolidated statement of comprehensive income 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
31 March 2022

For the year ended
31 March 2023

For the year ended
31 March 2023

Service cost
Current service cost
Past service cost
Net interest expense
Components of defined benefit costs
recognised in profit or loss

479

649

4,858

434
115

81
80

610
600

1,028

810

6,068

99

762

5,705

19

(30)

(226)

(330)

(994)

(7,443)Remeasurement of net defined benefit
liability
Return on plan assets
Actuarial gains and losses arising fromchanges in demographic assumptions
Actuarial gains and losses arising fromchanges in financial assumptions
Actuarial gains and losses arising fromexperience adjustments

(22)

56

419

Adjustments for restrictions on thedefined benefit asset

(56)

55

410

Components of defined benefit costs
recognised in other comprehensive
income

(290)

(152)

(1,136)

739

659

4,933

Total

Service cost and net interest expense are included in ‘Employee benefits expense’ and ‘Finance costs’ in the consolidated statement ofcomprehensive income.
Movements in the present value of the defined benefit obligations are as follows:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))For the year ended
31 March 2022

For the year ended
31 March 2023

For the year ended
31 March 2023

Beginning balance

7,575

8,322

62,320Current service cost

479

649

4,858

Interest costRemeasurement (gains)/losses

195

204

1,527

Actuarial gains and losses arising fromchanges in demographic assumptions

19

(30)

(226)

Actuarial gains and losses arising fromchanges in financial assumptions

(330)

(994)

(7,443)

Actuarial gains and losses arising fromexperience adjustments
Past service cost
Decrease due to settlements

(22)
434
(29)

56
81
(151)

419
610
(1,130)Benefits paid

(463)

(532)

(3,984)

Effect of foreign currency exchange
differences
Ending balance

463

345

2,581

8,322

7,949

59,532- 58 -

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

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))For the year ended
31 March 2022

For the year ended
31 March 2023

For the year ended
31 March 2023

Beginning balance

4,399

4,584

34,330Interest income

80

124

927

(99)

(762)

(5,705)

324
(363)
－

508
(304)
(49)

3,805
(2,274)
(369)

243

11

85

4,584

4,113

30,799Remeasurement gain (loss)
Return on plan assets (excluding amounts
included in net interest expense)
Contributions from the employer
Benefits paid
Reduction and liquidation
Effect of foreign currency exchange
differences
Ending balance

Movements in the effect of changes to the asset ceiling are as follows:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))For the year ended
31 March 2022

For the year ended
31 March 2023

For the year ended
31 March 2023

Beginning balance

65

11

86

Interest cost

－

－

－

Effect of changes in the asset ceiling
Effect of foreign currency exchange
differences

(56)

55

410

3

17

129

Ending balance

11

83

625

Remeasurement gain (loss)

The fair values of major categories of plan assets as at 31 March 2022 and 2023 are as follows:

Cash and cash equivalents
Equity instruments - Foreign equity
instruments
Debt instruments - Foreign governmental
bonds
Debt instruments - Foreign bonds
Others
Total(Millions of Yen)

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))As at 31 March 2022

As at 31 March 2023

As at 31 March 2023

1,027

1,637

12,259

1,061

714

5,345

6

5

35

743

641

4,800

1,747

1,116

8,360

4,584

4,113

30,799The fair values of financial instruments are measured at quoted market price in active markets. No transferable instrument is includedin plan assets.
The principal assumptions used for the purposes of the actuarial valuations were as follows:
As at 31 March 2022
Discount rate

As at 31 March 2023
2.8%

4.8%

The Group believes there is no material impact on the operating results, financial positions and cash flows due to the defined benefit
plan of the Group, including the amount, timing and uncertainly of future cash flows.

- 59 -

(2) Defined contribution plans
The total expense recognised was 2,538 million yen and 2,953 million yen (22,112 thousand U.S. dollars) for the years ended 31
March 2022 and 2023 for each period.
(3) Severance payments
Under certain circumstances (such as retirement before the predetermined retirement date), additional payments are made uponretirement. The total expense recognised was 629 million yen and 1,218 million yen (9,122 thousand U.S. dollars) for the years ended
31 March 2022 and 2023 for each period.

18. Provisions
Details of provisions are as follows:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))As at 31 March 2022

As at 31 March 2023

As at 31 March 2023

Asset retirement obligation
Warranties provision

2,699
1,446

3,171
1,540

23,746
11,532

Total

4,145

4,711

35,278Non-current liabilities

2,671

3,153

23,611

Current liabilities

1,474

1,558

11,667

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

Warranties provision

Balance at 1 April 2022

2,699

1,446

4,145

Provision for the year

421
18

577

998
18

(51)

(171)
(405)

Interest cost associated with passage of time
Reduction resulting from settlement for theyear
Reduction resulting from reversal
Reduction due to asset sales

Total

－

－

(222)
(405)
(6)

90

93

183

3,171

1,540

4,711

Asset retirement obligation

Warranties provision

Balance at 1 April 2022

20,20910,832

31,042

Provision for the year

3,155
133

4,322
－

7,477
133

(383)

(1,283)(1,666)－(46)(3,033)(3,033)
(46)

－
(6)

Effect of foreign currency exchange
differences
Balance at 31 March 2023

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

Interest cost associated with passage of time
Reduction resulting from settlement for theyear
Reduction resulting from reversal
Reduction due to asset sales
Effect of foreign currency exchange
differences
Balance at 31 March 2023

－

Total

677

693

1,370

23,746

11,53235,278Note:
Refer to Note 3 “Significant accounting policies (20) Provisions and contingent liabilities assumed in a business combination” fordetails of each provision.

- 60 -

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

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))As at 31 March 2022

As at 31 March 2023

As at 31 March 2023

Accounts payable
Notes payable, trade39,165
6,668

35,5004,694

265,862
35,153

Processing cost payable
Other payables

955
14,610781
23,296

5,851
174,461

Notes payable for capital investment

586

350

2,619

Total

61,98464,621

483,945

Notes payable, trade are due 120 days.
Accounts payable are due 30 to 60 days from the invoice date in Asia except for Japan, and due 30 to 150 days from the invoice date inJapan. Accounts payable in Europe and the U.S.A. are mainly payables related to intragroup transactions; thus, upon consolidation,these trade accounts payable are eliminated. The Group arranges cash pooling for Japan, Europe and the U.S.A. to ensure that all
payables are paid within the agreed-upon credit terms.

- 61 -

20. Share capital and other equity items(1) Share capital and capital reserves
Number of
Number of
Number of issued
Share capital
outstanding
authorised sharessharesshares(Ordinary shares (Ordinary shares(Millions of(Ordinary shareswith no par value) with no par value)
Yen)with no par value)
Balance at
1 April 2021

CapitalShare capital
Capitalreserves
reserves(Millions of (Thousands of (Thousands of
Yen)
U.S. Dollars U.S. Dollars(Note 2))
(Note 2))

1,250,519,400

372,833,220

369,305,799

6,264

15,89946,912

119,064－

3,131,200

4,197,505

－

－

－

－

31 March 2022

1,250,519,400

369,702,020

365,108,294

6,264

15,89946,912

119,064

Decrease (i), (ii)－

12,741,500

11,119,843

－

－

－

－

Balance at
31 March 2023

1,250,519,400

356,960,520

353,988,451

6,264

15,89946,912

119,064

Decrease (i), (ii)
Balance at

Note:(i) Decrease in number of issued shares is due to cancellation of treasury shares.
(ii) 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
Amount(Millions of Yen)

Numbers of shares
Balance at 1 April 2021

3,527,421

43,560

Repurchase of treasury shares
Cancellation of treasury shares
Repurchase of odd-lot shares
Disposal of odd-lot shares

4,345,500(3,131,200)
409(4)

65,757(39,093)6(0)Decrease on exercise of stock options(148,400)(1,921)

Balance at 31 March 2022

4,593,726

68,31011,271,100(12,741,500)

153,958(178,757)

Repurchase of odd-lot shares
Disposal of odd-lot shares
Decrease on exercise of stock options

393
(50)
(151,600)

5(1)(2,143)

Balance at 31 March 2023

2,972,069

41,374

Repurchase of treasury shares
Cancellation of treasury shares

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

Numbers of shares
Balance at 31 March 2022
Repurchase of treasury shares
Cancellation of treasury shares
Repurchase of odd-lot shares

4,593,726

511,571

11,271,100(12,741,500)

1,152,987(1,338,700)

393

41

Disposal of odd-lot shares
Decrease on exercise of stock options(50)(151,600)(5)(16,045)

Balance at 31 March 2023

2,972,069

309,849- 62 -

② Other capital reserves
Gain (loss) on
disposal of treasury
sharesStock option (i)Others

Total(Millions of Yen)

(Millions of Yen)

(Millions of Yen)

(Millions of Yen)

Balance at 1 April 2021

(11,774)

2,614(1,194)(10,354)

Repurchase of treasury shares
Disposal of treasury shares－(1,178)－(136)

Share-based payments (i)－Balance at 31 March 2022
Repurchase of treasury shares
Disposal of treasury shares

(0)

(0)
(1,314)98－－(12,952)

2,576(1,194)(11,570)－(1,208)

－
(167)

(9)

Share-based payments (i)

－

33

－
121

(9)
(1,374)

Balance at 31 March 2023

(14,160)

2,442(1,083)Gain (loss) on
disposal of treasury
sharesStock option (i)Others

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

Balance at 31 March 2022

(97,001)

19,294(8,941)(86,648)

Repurchase of treasury shares－(1,247)

(71)

(71)

Disposal of treasury shares－(9,043)
－

245

－
904

(10,291)

Share-based payments (i)Balance at 31 March 2023

(106,044)

18,291(8,109)(95,861)98

153(12,800)

1,149(i) Refer to Note 22 “Share-based payments” for details of share-based payments (stock option).
(3) Retained earnings and dividends
Amount(Millions of Yen)
Balance at 1 April 2021

710,274

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

164,507

Cancellation of treasury shares(39,093)

Dividends(33,220)

Transfer to retained earnings from other comprehensive income

347

Balance at 31 March 2022

802,815

Profit for the year (attributable to owners of the Company)
Cancellation of treasury shares

168,638(178,757)

Dividends
Transfer to retained earnings from other comprehensive income(39,822)
125

Balance at 31 March 2023

752,999- 63 -

Amount(Thousands of U.S. Dollars (Note 2))
Balance at 31 March 2022

6,012,244

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

1,262,918

Cancellation of treasury shares
Dividends
Transfer to retained earnings from other comprehensive income(1,338,700)(298,223)
933

Balance at 31 March 2023

5,639,173

Details of dividends are as follows:

Date of resolution

Dividends per
share
(Yen)

Dividends per
Total dividends
Total dividends
share(Thousands of(Millions of(U.S. Dollars
U.S. Dollars
Yen)(Note 2))
(Note 2))

Record date

Effective date

28 May 2021

45

0.34

16,619124,457

31 March 2021

1 June 2021

28 October 2021

45

0.34

16,602

124,329

30 September 2021

30 November 2021

26 May 2022

65

0.49

23,732

177,72831 March 2022

1 June 2022

27 October 2022

45

0.34

16,090120,494

30 September 2022

30 November 2022

24 May 2023

65

0.49

23,009172,31531 March 2023

1 June 2023

Dividends payable are included in the line item ‘Other short-term financial liabilities’ in the consolidated statement of financial
position.
(4) Non-controlling interests
Amount(Millions of Yen)
Balance at 1 April 2021

(15,589)

Profit for the year, attributable to non-controlling interests
Other comprehensive income
Dividends

815
(125)
(89)

Increase due to share issuance to non-controlling interests

164

Increase due to liquidation of subsidiaries

27

Balance at 31 March 2022

(14,795)

Profit for the year, attributable to non-controlling interests
Other comprehensive income

150
910

Dividends
Increase (decrease) by business combination

(171)
2,646

Change in scope of consolidation

7,772

Change in non-controlling interests(228)

Balance at 31 March 2023

(3,717)
Amount(Thousands of U.S. Dollars (Note 2))

Balance at 31 March 2022

(110,802)

Profit for the year, attributable to non-controlling interests
Other comprehensive income

1,127
6,813

Dividends
Increase (decrease) by business combination(1,280)19,814

Change in scope of consolidation

58,204

Change in non-controlling interests(1,710)

Balance at 31 March 2023

(27,835)- 64 -

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

(Millions of Yen)

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

As at
31 March 2022

As at
31 March 2023

As at
31 March 2023

Interest-bearing debt

21,59924,582

184,093

Less: Cash and cash equivalents

419,404

405,8883,039,675

Net debt(397,805)(381,306)(2,855,582)

Equity789,056

814,604

6,100,532

In order to maximise the corporate value of the Group, cash flows have been a priority of the Group management. As at 31 March 2022
and 2023, the Group maintained cash and cash equivalent balances in excess of interest-bearing debt balances. The Group is not
subject to any externally imposed capital regulations as at 31 March 2023.
Details of interest-bearing debt and equity are described in Note 16 “Interest-bearing debt” and Note 20 “Share capital and other equity
items”, respectively.

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

- 65 -

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

(Millions of Yen)

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

As at
31 March 2022

As at
31 March 2023

As at
31 March 2023

Financial assets
Financial assets measured at amortised cost
Trade and other receivables
Other financial assets (ii)
FVTOCI financial assets (iv)
Other financial assets (ii)Cash and cash equivalents

134,174

143,194

1,072,373

19,30429,469220,690

41,997419,404

36,213405,888271,199
3,039,675

－
101

363

2,721

－

－

61,984
21,59964,25824,582481,224
184,093

24,40921,787

163,164

Financial liabilities
FVTPL financial liabilities (v)Trade and other payables
Other financial liabilities (iii)
Financial liabilities measured at amortised cost
Trade and other payables
Interest-bearing debt
Other financial liabilities (iii)Note:(i) The items above are not included in disposal groups held for sale. The Group does not have derivative instruments designated as
hedging instruments. Likewise, the Group does not have financial assets or financial liabilities using the fair value option.
(ii) Other financial assets are included in ‘Long-term financial assets’ or ‘Other short-term financial assets’ in the consolidated
statement of financial position.
(iii) Other financial liabilities are included in ‘Other long-term/short-term financial liabilities’ in the consolidated statement of financial
position.
(iv) FVTOCI financial assets mainly consist of unlisted shares.
(v) FVTPL financial liabilities mainly consist of contingent considerations resulting from business combinations.
(vi) Financial assets or liabilities to be offset as at 31 March 2022 and 2023, are immaterial.

(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 sources 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. In
certain cases, 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 exchange rates, interest rates, 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 from the Thai Baht, the Euro and the
U.S. dollar, have a significant impact on the Group’s financial results. If the Japanese yen appreciates against these currencies, bothsales and profit stated in the Japanese yen might decrease even though sales and profits stated in local currencies have increased.
The Group intends to marry major currencies the Group uses (i.e., 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.
In contrast, as the Company has multiple SBUs and conducts its own finance and dividend payments to the Company’s shareholders,
and the holding companies under the Company receive dividends from their subsidiaries and distribute them to the Company and/or
other group companies, the Group’s foreign currency-dominated balances in receivables, liabilities and/or bank deposits may not fully
offset each other. This might cause significant gains or losses on foreign exchange differences when the Yen appreciates or depreciates
against the U.S. dollar or the Euro, or when the Euro appreciates or depreciates against the U.S. dollar.
2) Foreign currency sensitivity analysis
The chart below shows the impact on profit and equity of a 1% appreciation of the Yen against the Thai Baht, the Euro and the U.S.
dollar with the assumption that the exchange rates for other currencies are constant.
For the year ended 31 March 2022

For the year ended 31 March 2023

3.45
131.11

3.84
141.62113.04136.00

(257)

(284)

Average exchange rate
(Yen per each currency)
Thai Baht
Euro
U.S. dollar
Impact on profit for the year
(Millions of Yen)
Thai Baht
Euro

(66)

(34)

U.S. dollar

(463)

(463)

Impact on equity(Millions of Yen)
Thai Baht

(441)

(550)

Euro

(363)

(464)

U.S. dollar(912)(1,169)For the year ended 31 March 2023
Impact on profit for the year
(Thousands of U.S. Dollars (Note 2))
Thai Baht(2,125)Euro
U.S. dollar(254)(3,469)Impact on equity(Thousands of U.S. Dollars (Note 2))
Thai Baht(4,117)Euro
U.S. dollar(3,478)(8,757)- 67 -

Note:
Numbers in parentheses are the amounts of negative impact on profit and equity resulting from a 1% appreciation of the Yen. The
amounts above represent the impact on the consolidated financial statements of the Group resulting from foreign currency conversion
and not the impact on the Group’s cash flows or operations themselves.
Likewise, the tables below show the impact of a 1% appreciation of functional currencies of the Company and its holding company
within the Group on their receivables/liabilities and bank deposits denominated in foreign currencies on the assumption that exchange
rates for other currencies are constant. The information about the holding companies with immaterial risk is not included in the tables
below.
2)-1. Parent company (the Company)(Millions of Yen)Euro
31 March 2022

U.S. dollar
31 March 2023

31 March 2022

31 March 2023

Trade and other receivables

(35)

(29)

(105)

(69)

Trade and other payables
Short-term financial assets
Cash and cash equivalents

1
(0)
(4)

1
0
(5)

21
(0)
(52)

14
(0)
(62)

(38)

(34)

(136)

(117)

Total

(Thousands of U.S. Dollars (Note 2))Euro
31 March 2023

U.S. dollar
31 March 2023

Trade and other receivables

(220)

(514)

Trade and other payables

6

103

Short-term financial assets

0

(1)

(39)

(461)

(254)

(873)

Cash and cash equivalents
Total
Note:

Numbers in parentheses are the amounts of negative impact on profit and equity resulting from a 1% appreciation of the Yen. A 1%
depreciation of the Yen has a positive impact in the same amount.
Intercompany receivables/payables are included in the calculation of the impact as they cause foreign exchange gain or loss in theprocess of translation.
2)-2. Holding company (Europe)(Millions of Yen)
Yen
31 March 2022
Cash and cash equivalents
Total

U.S. dollar
31 March 2022
31 March 2023

31 March 2023
(0)

(0)

(4)

(1)

(0)

(0)

(4)

(1)

(Thousands of U.S. Dollars (Note 2))
Yen
31 March 2023
Cash and cash equivalents
Total

U.S. dollar
31 March 2023
(0)

(8)

(0)

(8)

Note:
Numbers in parentheses are the amounts of negative impact on profit and equity resulting from a 1% appreciation of the Euro. A 1%
depreciation of the Euro has a positive impact in the same amount.
Intercompany receivables/payables are included in the calculation of the impact as they cause foreign exchange gain or loss in theprocess of translation.

- 68 -

3) Currency derivatives
The Group’s policy prohibits the use of derivative instruments such as forward foreign exchange contracts, except in certain
circumstances in which the use of such derivatives is determined to be beneficial. In such case, the Group can enter into contracts upon
obtaining formal approval from the Chief Financial Officer (“CFO”) of the Group in accordance with its Group 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 that stated above is adhered to.
Details of the forward foreign exchange contracts at the end of each reporting period are as follows:(Millions of Yen)

For the year ended
31 March 2022

Average
Foreignexchange rate currency (mil)Notional
amountFair value

N/A(Millions of Yen)

For the year ended
31 March 2023

Average
Foreignexchange rate currency (mil)Notional
amountFair value(Thousands of U.S. Dollars (Note 2))

Notional
amountFair value

N/A② Interest rate risk management
The Group’s cash and cash equivalents exceed the interest-bearing debt, and currently, the impact of interest expense on the Group’s
profit/loss is immaterial. Therefore, the Group considers the interest rate risk to be immaterial and has not performed sensitivity
analyses such as Basis Point Value.
③ Price risks management in equity instruments
The Group is exposed to equity price risks arising from equity instruments (i.e., listed shares). These investments are held from aviewpoint of business strategy, not for short-term trading purposes. The Group does not sell these investments frequently and theGroup 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 46 million
yen and 17 million yen (126 thousand U.S. dollars) as at 31 March 2022 and 2023 for each period as a result of changes in fair value ofthe equity instruments.

- 69 -

(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 that are approved by the authorised personnel of each SBU.
The main customers for the Information Technology business are globalised companies that have relatively large-scale and stablefinancial conditions. In contrast, credit losses were incurred on a sporadic basis in the Life Care business as those products were sold torelatively small and diversified customers, such as end consumers, retailers, and medical institutions. Accordingly, no significant credit
losses were incurred in the past. A division in the Life Care business that sells goods to medical institutions and operates wholesale
businesses in certain countries has some past-due receivables due to the financial conditions of those medical institutions or customers.
Credit limits have been set for those customers to minimise the loss from a failure to collect the receivables.
Trade receivables consist of a large number of customers across a diverse range of 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
risk over 5% of total financial assets as at 31 March 2023.
The carrying amounts after impairment presented in the consolidated financial statements are the maximum exposure for the Group’s
credit risk without considering the appraised value of the related collateral.
The Group continuously monitors the financial status of customers that 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.
Each financial asset should be recognised as a credit-impaired financial asset if the debtor claims legal proceedings such as bankruptcy,
company reorganization, civil rehabilitation and special liquidation in cases of overdue payments despite performance by enforcement.
The Group directly writes off an asset by reducing the total carrying amount in cases where collection of contractual cashflow is notreasonably expected, entirely or partially.

- 70 -

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 2022

Overdue amounts

Total

Within due
dateTrade and other receivables(gross)Allowance for doubtful accounts

137,139(2,965)

123,309
(117)

7,052
(122)

1,693
(97)

762
(176)

1,241
(771)

3,082
(1,682)

Trade and other receivables (net)134,174

123,192

6,930

1,596

586

470

1,400

Other financial assets (gross)

19,68919,268

7

－

1

－

412

(385)

(0)

－

－

(1)

－

(384)

19,304

19,268

7

－

－

－

28

Allowance for doubtful accounts
Other financial assets (net)Within 30
91 to 120
31 to 60 days 61 to 90 days
days
days

Over 120
days(Millions of Yen)
Balance at 31 March 2023

Overdue amounts

Total

Within due
dateTrade and other receivables(gross)146,263

125,526

11,338

4,627

969

914

2,889

Allowance for doubtful accounts(3,069)

(105)

(199)

(431)

(314)

(464)

(1,556)

Trade and other receivables (net)143,194

125,421

11,138

4,197

655

451

1,332

Other financial assets (gross)
Allowance for doubtful accounts

29,866(398)

29,314
(1)

－

18

－

－

－

－

－

－

534
(396)

Other financial assets (net)29,46929,312

－

18

－

－

138

Within 30
91 to 120
31 to 60 days 61 to 90 days
days
days

Over 120days(Thousands of U.S. Dollars (Note 2))
Balance at 31 March 2023

Overdue amounts

Total

Within due
dateTrade and other receivables(gross)Allowance for doubtful accounts

1,095,359(22,986)

940,061(787)

84,907(1,493)34,655(3,225)

7,256(2,354)

6,848(3,471)

21,632(11,657)

Trade and other receivables (net)1,072,373

939,274

83,41531,430

4,902

3,376

9,975

Other financial assets (gross)
Allowance for doubtful accounts

223,668(2,978)219,530
(11)

－
－

138
－

－
－

－
－

4,000
(2,967)

Other financial assets (net)

220,690

219,520

－

138

－

－

1,033

Within 30
91 to 120
31 to 60 days 61 to 90 days
days
days

Over 120days

The Group does not hold any collateral or other credit enhancements on the above financial assets, excluding the following:
As at 31 March 2022
Loans to subsidiaries and affiliates of 8,887 million yen
As at 31 March 2023
Loans to subsidiaries and affiliates of 9,111 million yen (68,232 thousand U.S. dollars)
Details of collaterals are described in Note 30 “Related party disclosures”.

- 71 -

In case of impairment of financial assets, the Group does not directly write off such assets by reducing the carrying amount; instead, it
records an allowance for doubtful accounts. Movement in the allowance for doubtful accounts is as follows:(Millions of Yen)
Loss
allowance at
an amountequal to 12month
expected
credit losses

Loss allowance at an amount equal tolifetime expected credit losses

Total

Non-creditimpaired
financialassetsCreditimpaired
financialassetsTrade andotherreceivables

Balance at 1 April 2021

－

28

341

2,797

3,166

Provision for the year

－

(0)

20

969

988

Reduction resulting from settlement for the year

－

0

(5)

(501)

(506)

Reduction for the year (reversal)

－

(0)

(0)

(515)

(516)

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

－

1

0

215

217

Balance at 31 March 2022

－

29

356

2,965

3,350

(Millions of Yen)
Loss
allowance at
an amountequal to 12month
expected
credit losses
Balance at 1 April 2022－

Loss allowance at an amount equal tolifetime expected credit losses

Total

Non-creditimpaired
financialassetsCreditimpaired
financialassetsTrade andotherreceivables

29

356

2,965

3,350

1,053

1,075

Provision for the year

－

－

23

Reduction resulting from settlement for the year

－

(0)

(11)

(710)

(721)

Reduction for the year (reversal)

－

－

(1)

(298)

(299)

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

－

1

1

60

62

Balance at 31 March 2023

－

29

368

3,069

3,467

(Thousands of U.S. Dollars (Note 2))
Lossallowance at
an amountequal to 12month
expected
credit losses

Loss allowance at an amount equal tolifetime expected credit losses
Non-creditimpaired
financialassetsCreditimpaired
financialassetsTrade andotherreceivables

Total

Balance at 1 April 2022

－

214

2,667

22,20525,086

Provision for the year

－

－

170

7,884

8,054

Reduction resulting from settlement for the year

－

(0)

(80)

5,320

5,400

Reduction for the year (reversal)

－

－

(8)

2,229

2,237

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

－

5

11

447

463

Balance at 31 March 2023

－

219

2,759

22,98625,964- 72 -

(7) Liquidity risk management
The 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.
The credit lines for commercial paper are secured for temporary cash shortages due to dividends or bonus payments.
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 2022

Carrying Contractual Less than 1 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years More than 5amount cash flows
year
years

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

61,984
1,065

61,984
1,274

61,984
49

－
220

－
43

－
43

－
213

－
706

Short-term bank loans
Long-term lease liabilities

655
12,720662
13,660

662

－
5,258

－
2,976

－
1,798

－
1,140

－
2,488

Short-term lease liabilities

7,160

7,160

－

－

－

－

－
5,019

－
16,836

3,019

1,840

6,372

20,030

Other financial liabilities
Total

－
7,160

24,51027,755

647

－
5,253

108,093

112,494

70,502

10,731(Millions of Yen)
Balance at 31 March 2023

Carrying Contractual Less than 1 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years More than 5amount cash flows
year
years

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

64,621
1,936

64,621
2,146

64,621
823

－
463

－
19

－
206

－
14

－
620

Short-term bank loans
Long-term lease liabilities

455
14,831

460
16,415

460

－
5,546

－
3,541

－
2,147

－
1,453

－
3,730

Short-term lease liabilities

7,360

7,360

－
7,360

24,361

264

－

－
5,476

－

21,787－
253－

Other financial liabilities－－
18,368110,990

115,364

73,528

6,262

3,560

7,828

1,467

22,718

Total(Thousands of U.S. Dollars (Note 2))
Balance at 31 March 2023

Carrying Contractual Less than 1 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years More than 5amount cash flows
year
years

Non-derivative liabilities
Trade and other payables

483,945483,945483,945

Long-term bank loans
Short-term bank loans

14,4983,407

16,069
3,447

6,161
3,447

Long-term lease liabilities
Short-term lease liabilities

111,069
55,119122,935
55,119－55,119Other financial liabilities

163,163

182,441

831,202

863,956

Total

－
3,468

－
144

－
1,544

－
107

－
4,644

－
41,530－26,518－16,076－
10,878－27,932

－
1,897

－
－

－
41,007

－

1,977

－

－
137,561

550,649

46,896

26,66358,627

10,985

170,136- 73 -

The Company secures the financing methods below for temporary cash shortages due to dividends or bonus payments.
Details of financing methods and status are as follows:

Bank overdraft
Used
UnusedTotal(Millions of Yen)

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))As at 31 March 2022

As at 31 March 2023

As at 31 March 2023－
85,000－85,000－636,561

85,00085,000636,561－
50,000－50,000－374,448

50,00050,000374,448

Commercial paper
Used
UnusedTotal- 74 -

(8) Fair value of financial assets and liabilities that are measured at fair value on a recurring basis
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 derived from quoted prices in active markets for identical assets or liabilities.
Level 2: Fair value derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (i.e., as prices) or indirectly (i.e., derived from prices).
Level 3: Fair value derived from inputs for the asset or liability that are not based on observable market data (i.e., unobservable inputs).
· FVTOCI financial assets classified as Level 3 mainly consist of unlisted shares and are measured using valuation techniquessuch as net asset approach, discount cash flow method or comparable company method.
· FVTPL financial liabilities classified as Level 3 consist of contingent considerations and are measured based on theachievement of milestones considering time value of money.
① Financial instruments that are measured at fair value(Millions of Yen)
As at 31 March 2022

Level 1

Level 2

Level 3Total

FVTOCI financial assets

923－

41,073

41,997

Total

923

－

41,073

41,997

FVTPL financial liabilities

－

－

101

101

Total

－

－

101

101
(Millions of Yen)

As at 31 March 2023

Level 1

Level 2

Level 3Total

FVTOCI financial assets

335－

35,87836,213

Total

335

－

35,87836,213

FVTPL financial liabilities

－

－

363

363

Total

－

－

363

363

(Thousands of U.S. Dollars (Note 2))
As at 31 March 2023

Level 1

Level 2

Level 3Total

FVTOCI financial assets

2,512

－

268,688271,199

Total

2,512

－

268,688271,199

FVTPL financial liabilities

－

－

2,721

2,721

Total

－

－

2,721

2,721

Note:
As at 31 March 2022
No transfers occurred between Levels 1, 2 and 3 during the year ended 31 March 2022.
As at 31 March 2023
No transfers occurred between Levels 1, 2 and 3 during the year ended 31 March 2023.

- 75 -

② Reconciliation of financial assets categorised at Level 3 from beginning balance to ending balance(Millions of Yen)
For the year ended
31 March 2022

Fair value measurement as at the end of the reporting period
FVTOCI financial assets

FVTPL financial liabilities

Opening balance

37,117229

Total gains or losses recognised:

3,956

(8)

- in profit or loss (i)- in other comprehensive income (i)

－
3,956

(13)
5

－

(120)

41,073

101

Settlement
Closing balance(Millions of Yen)
For the year ended
31 March 2023

Fair value measurement as at the end of the reporting period
FVTOCI financial assets

FVTPL financial liabilities

Opening balance

41,073

101

Total gains or losses recognised:(5,195)(5,195)
－
－

35
35
777
(550)

35,878363- in other comprehensive income (i)Increase by acquisition
Settlement
Closing balance(Thousands of U.S. Dollars (Note 2))
For the year ended
31 March 2023

Fair value measurement as at the end of the reporting period
FVTOCI financial assets

FVTPL financial liabilities

Opening balance

307,596759

Total gains or losses recognised:(38,908)(38,908)

264
264

－
－

5,816
(4,118)

268,688

2,721- in other comprehensive income (i)Increase by acquisition
Settlement
Closing balance

Note:
As at 31 March 2022
(i) For total gains or losses included in profit or loss, the difference by settlement of the contingent consideration arising from thebusiness combination is recorded at 13 million yen. It is included in the line item ‘Other income’ in the consolidated statement ofcomprehensive income.
For total gains or losses included in other comprehensive income, gains or losses related to FVTOCI assets are included in‘Financial assets measured at fair value through other comprehensive income’ or ‘Exchange differences on translation of foreign
operations’ in the consolidated statement of comprehensive income. Gains or losses related to FVTPL liabilities are included in‘Exchange differences on translation of foreign operations’ in the consolidated statement of comprehensive income.
As at 31 March 2023
(i) For total gains or losses included in other comprehensive income, gains or losses related to FVTOCI assets are included in‘Financial assets measured at fair value through other comprehensive income’ or ‘Exchange differences on translation of foreign
operations’ in the consolidated statement of comprehensive income. Gains or losses related to FVTPL liabilities are included in‘Exchange differences on translation of foreign operations’ in the consolidated statement of comprehensive income.

- 76 -

(9) Fair value of financial assets and liabilities that are measured at fair value on a non-recurringbasis① Carrying amounts and fair value(Millions of Yen)

(Millions of Yen)

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

As at 31 March 2022

As at 31 March 2023

As at 31 March 2023

Carrying
amountFair value

Carrying
amountFair value

Carrying
amountFair value(excluding current portion)
Lease deposits
Long-term guarantee deposits

3,558
5,746
1,064

3,540
5,739
1,003

－
5,806
1,177

－
5,786
1,097

－
43,484
8,812－
43,329
8,213

Total

10,368

10,282

6,983

6,882

52,296

51,542

Liabilities
Financial liabilities measured at amortised cost
Long-term bank loans (excluding current portion)

1,043

1,024

1,166

1,043

8,732

7,809

AssetsFinancial assets measured at amortised cost
Long-term loans to subsidiaries and affiliates

Long-term guarantee deposits

387

387

253

253

1,897

1,897

Long-term other payables

23,375

21,425

21,27017,662

159,289

132,267

Total

24,80522,836

22,68918,958

169,919

141,972② Fair value hierarchy
Level 1: Fair value derived from quoted prices in active markets for identical assets or liabilities.
Level 2: Fair value derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (i.e., as prices) or indirectly (i.e., derived from prices).
· Fair value of long-term loans to subsidiaries and affiliates and lease deposits are measured by the present value of future cash
flows of each loan categorised according to a certain range of term and discounted by the risk-free rate, etc.
· Fair value of interest-bearing debt, long-term guarantee deposits and long-term other payables is measured by the present
value of future cash flows of each debt categorised according to a certain range of term and discounted by the interest rate thatreflects the remaining period to the maturity and credit risk.
Level 3: Fair value derived from inputs for the asset or liability that are not based on observable market data (unobservable inputs).
(Millions of Yen)
As at 31 March 2022

Level 1

Level 2

Level 3

Total

AssetsFinancial assets measured at amortised cost
Long-term loans to subsidiaries and affiliates
Lease deposits－－

Long-term guarantee deposits

3,540
5,739

－
－

－

1,003

－

1,003

－

10,282－

10,282Long-term bank loans (excluding current portion)

－

1,024

－

1,024

Long-term guarantee deposits
Long-term other payables

－
－

387
21,425－－387
21,425

Total－

22,836－

22,836

Total

3,540
5,739

Liabilities
Financial liabilities measured at amortised cost

- 77 -

(Millions of Yen)
As at 31 March 2023

Level 1

Level 2

Level 3

Total

AssetsFinancial assets measured at amortised cost
Lease deposits

－
－

5,786
1,097

－
－

5,786

Long-term guarantee deposits
Total

－

6,882

－

6,882

Liabilities
Financial liabilities measured at amortised cost
Long-term bank loans (excluding current portion)

－

1,043

－

1,043

Long-term guarantee deposits
Long-term other payables

－
－

253
17,662－－

253
17,662

Total－

18,958－18,958

1,097(Thousands of U.S. Dollars (Note 2))
As at 31 March 2023

Level 1

Level 2

Level 3

Total

AssetsFinancial assets measured at amortised cost
Lease deposits－

43,329－43,329Long-term guarantee deposits

－

8,213

－

8,213

Total

－

51,542－

51,542

7,809
1,897
132,267

－
－
－

7,809

Long-term guarantee deposits
Long-term other payables

－
－
－

1,897
132,267

Total－

141,972－

141,972

Liabilities
Financial liabilities measured at amortised cost
Long-term bank loans (excluding current portion)- 78 -

22. Share-based payments
The Company has a performance-based stock compensation plan (Performance Share Unit), a phantom stock option plan and a stock
option plan. The purpose of the plans is to increase the value of the Group and to improve the financial results of the Group by
motivating members such as directors, officers, employees of the Group, as well as to retain valuable employees.
Beginning the current fiscal year, the Company has introduced the Non-performance share unit (Restricted stock unit) to replace thestock option plan.
(1) Non-performance Share Unit
① Details of plan
Restricted stock unit (RSU) is a plan which the number of shares will be distributed to the directors according to the enrollment period.
Every year, the Company announces a basic deliverable number of shares equivalent to fixed remuneration to Independent Directors
for a three-year period starting from that year. After the end of the three-year subject period, the Company determines, for each
Independent Director, a basic compensation amount, which is the market value of the Company’s shares for the basic deliverable
number of shares.
The Company will pay the Independent Directors 50% of the basic compensation amount as claims for monetary remuneration.
Independent Directors shall invest the monetary claims in kind and shall be granted a number of Company shares, which is equal to theamount of monetary claims in question divided by paid-in amount per Company share. From the viewpoint of ensuring payment of tax,
the Company shall pay the remainder of the basic compensation amount in cash.
RSU granted to Independent Directors are accounted for separately as equity-settled share-based payment transaction and cash-settled
share-based payment transaction (50%:50%). Expense recorded in the consolidated statement of comprehensive income fromundertaking equity-settled share-based payment transactions was 7 million yen (52 thousand U.S. dollars) and cash-settled share-based
payment transactions was 9 million yen (65 thousand U.S. dollars) .
Details of RSU that are outstanding for the year ended 31 March 2023 are as follows:No.

Number of shares

1

4,800

Grant date

Fair value at grant date(Yen)

1 July 2022

11,610② Determination of fair value
The fair value of the RSU granted during the years ended 31 March 2023, was 11,610 yen and was determined based on the Company's
share price of the grant day for each period.
(2) Performance Share Unit
① Details of plan
The Company has adopted Performance Share Unit (PSU) for officers instead of a stock option plan since the year ended 31 March
2020. The variable number of shares will be distributed to the granted officers based on the achievement of pre-determined
performance goal during the three years subsequent to the grant date. The number of distributed shares is variable from 0% to 200%
based on the achievement of the performance goal that consists of consolidated sales, earnings per share (EPS) and ROE.
Every year, the Company announces basic deliverable numbers of shares according to the office and responsibility of each Executive
Officer and medium- to long-term performance targets for a three-year period starting from that year. After the end of the three-yeartarget period, the Company determines, for each Executive Officer, a basic compensation amount which is the market value of theCompany’s shares for the basic deliverable number of shares multiplied by a coefficient representing the degree of achievement of
medium- to long-term performance targets. The Company shall pay the Executive Officer 50% of the basic compensation amount asclaims for monetary remuneration. Executive Officers shall invest the monetary claims in kind and shall be granted a number ofCompany shares, which is equal to the amount of monetary claim in question divided by paid-in amount per Company share. From theviewpoint of ensuring payment of tax, the Company shall pay the remainder of the basic compensation amount in cash.
PSU granted to the officers are accounted for as equity-settled share-based payment transactions and cash-settled share-based paymenttransactions (50%:50%) . During the year ended 31 March 2022, expenses recorded in the consolidated statement of comprehensive
income from undertaking cash-settled share-based payment transactions were 164 million yen. During the year ended 31 March 2023,
expenses recorded in the consolidated statement of comprehensive income were 114 million yen (851 thousand U.S. dollars) for
equity-settled share-based payment transactions and (73) million yen ((544) thousand U.S. dollars) for cash-settled share-based
payment transactions including reversal for retired director.

- 79 -

Details of PSU that are outstanding for the year ended 31 March 2022 and 2023, are as follows:No.

Number of shares

Grant date

Fair value at grant date
(Yen)

1
2
3

15,50011,4007,900

1 July 2019
1 July 2020
1 July 2021

8,045
10,26014,730

4

18,1001 July 2022

11,610② Determination of fair value
The fair value of the PSU granted during the years ended 31 March 2022 and 2023 was 14,730 yen and 11,610 yen and was determinedbased on the Company's share price of the grant day for each period.

(3) Phantom Stock Option Plan
① Details of transactions
Phantom Stock Option (PSO) is granted to eligible individuals chosen from those who have been employed or are newly hired by theGroup on the condition that they render services over the vesting period, that is, subsequent to the grant date, if a member terminates
his or her employment prior to the vesting date, the options will expire. The exercise period of the options is the period determinedwhen each option is granted. The options not exercised within this exercise period will expire.
PSO granted to eligible grantees are accounted for as cash-settled share-based payment transactions. Expense recorded in the
consolidated statement of comprehensive income from undertaking shared-based payment transactions was 647 million yen and 1,064
million yen (7,972 thousand U.S. dollars) for the year ended 31 March 2022 and 2023 for each period.
Details of PSO that are outstanding for the year ended 31 March 2022 and 2023, are as follows:No.

Number of shares

Grant date

Fair value at grant date
(Yen)

1
2

107,600
4,500

1 October 2020
1 January 2021

5,930
7,135

3
4
5

3,000
216,100
3,600

1 July 2021
1 October 2021
1 January 2022

7,365
8,737.5
8,555

6
7
8

3,900
338,700
6,800

1 July 2022
1 October 2022
1 January 2023

5,792.5
6,940
6,352.5② Determination of fair value
The weighted-average fair value of the PSO granted during the years ended 31 March 2022 and 2023 was 8,716 yen and 6,916 yen foreach period. The fair values of the options were determined based on the Company's share prices of the grant days.
(4) Stock Option Plan
① Details of transactions
After the details and eligible members are approved at the meeting of the board of directors, options are granted to individuals on thecondition that they render services over the vesting period, that is, subsequent to the grant date, if a member terminates his or her
employment prior to the vesting date, the options will expire. The exercise period of the options is the period determined in each option
contract. The options not exercised within this exercise period will expire. The option contract includes a clause that limits the
maximum number of stock options a member can exercise each year during the exercisable periods.
Stock options granted to members are accounted for as share-settled share-based payment transactions. Expense recorded in the
consolidated statement of comprehensive income from undertaking shared-based payment transactions was 98 million yen and 33
million yen (245 thousand U.S. dollars) for the years ended 31 March 2022 and 2023, for each period.
No stock options were granted as of the current consolidated fiscal year.

- 80 -

Details of the stock options that are outstanding for the years ended 31 March 2022 and 2023, are as follows
No.

Number of shares

Grant date

Expiry date

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

12
13
14

680,800
560,800
758,800

17 January 201216 January 201315 January 2014

30 September 2021
30 September 2022
30 September 2023

1,616
1,648
2,846

357
427
785

15

582,400

14 January 2015

30 September 2024

3,972.5

896

16
17

460,400
386,800

13 January 201617 January 201730 September 2025
30 September 2026

4,928
4,839

852
935

18
19

40,400123,600

13 February 2018
2 October 2018

30 September 2027
30 September 2028

5,765
6,590

1,002
1,586

20
21

20,00024,000

13 August 201911 August 2020

30 September 2029
30 September 2030

8,542
10,490

1,911
2,477

22

40,00017 August 2021

30 September 2031

15,0805,151② Determination of stock option value
The weighted-average fair value of the stock options granted during the years ended 31 March 2022, was 5,151 yen.
In determining the expense of the stock options, the options were priced using the Black-Scholes model. The following table details theassumptions used in the Black-Scholes model for the options granted in the year ended 31 March 2022.
Expected volatility was determined based on recent historical daily share price volatility from the grant date to the forecasted
remaining period.
No. 22
Share price at grant date (Yen)

16,945

Exercise price (Yen)
Expected volatility

15,08029.24%

Expected remaining option life (Years)
Dividends yield
Risk free rate

6.4
0.53
(0.13%)- 81 -

③ The number and weighted-average exercise prices of stock options
The weighted average exercise price of unexercised stock options was 4,038 yen and 5,994 yen as at the years ended 31 March 2022
and 2023 for each period. Weighted average remaining contract life was 4.5 years and 3.6 years as the years ended 31 March 2022 and2023 for each period.
For the year ended 31 March 2022
Number of shares

For the year ended 31 March 2023

Weighted-average
exercise price(Yen)

Number of shares

Weighted-average
exercise price(Yen)

Outstanding at the beginning of the period

695,600

4,600

527,200

4,038

GrantedForfeited (i)Exercised

40,000(23,600)(141,600)

15,080
3,450
4,209

－
(40,000)(151,600)

－
5,889
5,069

Expired(43,200)

1,616(19,200)

1,648

Outstanding at the end of the period

527,200

4,038

316,400

5,994

Exercisable at the end of the period

435,300

5,579

283,400

5,102

Note:
(i) Stock options forfeited were due to employee retirements.
Stock options exercised during the year ended 31 March 2022, were as follows:No.

Number of shares exercised

Exercise period

Weighted-average of share price at
exercise date (Yen)

13
14
15

5,600
51,20014,000

May 2021 to July 2021
April 2021 to March 2022
April 2021 to February 2022

14,62015,41016,084

16
17
18
19

24,00027,6007,600
6,400

June 2021 to March 2022
June 2021 to January 2022
October 2021 to November 2021
November 2021

17,086
15,89817,098
17,940

20
21

3,600
1,600

November 2021
November 2021

17,94017,940

Total

141,600

16,122Note:
The number of shares exercised and the amount paid by key management personnel are 58,000 shares and 229 million yen.
Stock options exercised during the year ended 31 March 2023, were as follows:No.

Number of shares exercised

Exercise period

Weighted-average of share price at
exercise date (Yen)

13

13,200

May 2022 to September 2022

13,11514

1,600

October 2022 to February 2023

13,59015
1621,60034,400

May 2022 to February 2023
May 2022 to February 2023

13,394
13,34917
18

32,800800

April 2022 to March 2023
September 2022

13,296
13,33119

42,800

May 2022 to November 2022

13,179

20
21

2,400
2,000

September 2022 to November 2022
May 2022 to November 2022

13,482
13,377

Total

151,600

13,281Note:
The number of shares exercised and the amount paid by key management personnel are 96,800 shares and 554 million yen.

- 82 -

23. Revenue(1) Disaggregation of revenue
The relationship between the major geographical areas and the Group’s revenue from its major products and services for the year
ended 31 March 2022 and 2023 is as follows:(Millions of Yen)
For the year ended 31 March 2022

Japan

Asia

Americas111,784

35,436

65,111

Medical related products

20,68618,488Life Care total

132,470

53,924

Electronics related products

20,540

Imaging related products
Information Technology total

EuropeOthers

Total

Life Care
Health Care related products

82,714

4,778

299,823

22,591

43,317

2,645

107,726

87,702126,030

7,423

407,549

175,562

10,692

2,932－

209,726

8,824

28,510

746

597

1

38,67729,364

204,072

11,4383,529

1

248,403

2,829

684

767

1,235

－

5,514

164,663258,679

99,907130,794

7,424

661,466

Information Technology

Other
Total revenue from externalcustomers(Millions of Yen)
For the year ended 31 March 2023

Japan

Asia

Americas

EuropeOthers

Total

Health Care related products

121,641

50,64482,24290,657

6,432

351,617

Medical related products

22,877

20,22827,002

48,5884,316

123,011

Life Care total

144,518

70,872

109,244

139,246

10,748474,628

Electronics related products

13,943

175,629

15,4553,172

1

208,199

Imaging related products

9,863

23,912

1,688

676

0

36,140Information Technology total

23,806

199,541

17,1433,848

1244,338

1,732

702

858

1,323

－

4,615

170,056

271,115

127,245

144,417

10,749723,582

Life Care

Information Technology

Other
Total revenue from externalcustomers(Thousands of U.S. Dollars (Note 2))
For the year ended 31 March 2023

Japan

Asia

Americas910,967

379,274

615,909

Medical related products

171,322

151,483

Life Care total

1,082,289

530,757

104,417

1,315,275

EuropeOthers

Total

Life Care
Health Care related products

678,930

48,1672,633,246

202,217363,875

32,325921,222

818,125

1,042,805

80,492

3,554,468

115,741

23,754

4

1,559,191

Information Technology
Electronics related products
Imaging related products

73,867179,077

12,6405,062

2270,649

Information Technology total

178,285

1,494,352

128,381

28,817

6

1,829,839

12,969

5,256

6,426

9,910

－

34,561

1,273,542

2,030,365

952,932

1,081,532

80,4985,418,869

Other
Total revenue from externalcustomers

Note:
Geographical areas are based on the location of the customers.

- 83 -

(2) Contract balances
Receivables from contracts with customers and contract liabilities are as follows. Contract liabilities consist mainly of advancereceived and advance received profit from customers. Contract liabilities increase by the receipt of consideration from a customer
before the transfer of control of good or service to the customer and decrease by satisfaction of the performance obligation.
(Millions of Yen)

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))As at 31 March 2022

As at 31 March 2023

As at 31 March 2023

Receivables from contracts
with customers

130,172

140,788

1,054,356

Contract liabilities

5,312

6,047

45,282

Note:
Revenues recognised in the years ended 31 March 2022 and 2023 that were included in the contract liability balances as at 1 April
2022 and 2023 were 3,122 million yen and 3,432 million yen (25,699 thousand U.S. dollars) for each period. Amount of revenue
recognised in the years ended 31 March 2022 and 2023 from performance obligations satisfied (or partially satisfied) in previous
periods is immaterial.
(3) Transaction price allocated to the remaining performance obligations
The Group uses the practical expedient of omitting the disclosure of information on the remaining performance obligations because it
has no significant transactions with individual expected contractual terms exceeding one year. In addition, considerations fromcontracts with customers do not include a significant amount, which is not included in the transaction price and significant financing
components.
(4) Assets recognised from the costs to obtain a contract with a customer
If the amortisation period of the assets is one year or less, the Group uses the practical expedient of recognising the incremental costsof obtaining the contract as an expense when incurred.

- 84 -

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

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))For the year ended
31 March 2022

For the year ended
31 March 2023

For the year ended
31 March 2023

Commission

63

123

917

Rent
Government grants
Gain on sale of plant, property and equipment

121
498

180
240

1,345
1,800

and intangible assets
Gain on business transfer

713
1,656

537

4,018

Insurance proceeds
Gain on sale of shares of subsidiaries

79
2,135

－
166

－
1,246

Others

1,875

－
1,519

－
11,375

7,141

2,764

20,701

Total other income(2) R&D expenses recognised as incurred(Millions of Yen)

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))For the year ended
31 March 2022

For the year ended
31 March 2023

For the year ended
31 March 2023

Employee benefits expense

10,953

13,26799,358Depreciation and amortisation
Commission expenses

3,696
3,667

4,075
4,032

30,51630,192Other expenses

7,060

8,042

60,225

Total R&D expenses recognised as incurred

25,376

29,415220,291

Note:
The above items are included in the corresponding line items in the consolidated statement of comprehensive income.
(3) Employee benefits expense
The following is an analysis of the Group’s employee benefits expense:

Salary, bonuses and others(Millions of Yen)

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))For the year ended
31 March 2022

For the year ended
31 March 2023

For the year ended
31 March 2023

131,424

147,390

1,103,795

914

730

5,468

Retirement benefit
Defined benefit
Defined contribution
Retirement benefit total

2,538

2,953

22,112

3,451

3,683

27,580

909
629

1,154
1,218

8,642
9,122

6,836

7,254

54,324

143,250

160,698

1,203,462

Share-based payments
Severance payments
OthersTotal employee benefits expense(4) Foreign exchange gains or losses
Foreign exchange gains or losses include gains or losses resulting from changes in fair value of currency derivatives.

- 85 -

(5) Other expenses
The following is an analysis of the Group’s other expenses:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))For the year ended
31 March 2022

For the year ended
31 March 2023

For the year ended
31 March 2023

Packaging/shipping/transportation

12,813

14,936

111,855

TravelUtilities
Repair and maintenance

3,695
12,55912,588

6,167
16,20913,514

46,182
121,388
101,202

8

69

514

120
76,443

127
87,193948
652,983

118,228

138,213

1,035,072

Loss on sales of property, plant and equipment
Loss on disposal of property, plant andequipment
OthersTotal other expenses

25. Finance income and costs(Millions of Yen)

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))For the year ended
31 March 2022

For the year ended
31 March 2023

For the year ended
31 March 2023

Finance income
Interest income
Cash and cash equivalents, financial
assets measured at amortized cost
Dividend income
FVTOCI financial assets
Total finance income

1,707

7,657

57,345

11

9

69

1,718

7,666

57,413Finance costs
Interest costs
Interest-bearing debt

373

467

3,501

Retirement benefits liabilities
Provisions
Other financial liabilities
Impairment losses
Financial assets measured at amortised
cost

115
17
339

80
18
367

600
133
2,746

820

884

6,623

Total finance costs

1,664

1,816

13,603- 86 -

26. Other comprehensive income
For the years ended 31 March 2022 and 2023, items that may be reclassified subsequently to profit or loss comprise the following:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))For the year ended
31 March 2022

For the year ended
31 March 2023

For the year ended
31 March 2023

Items that may be reclassified subsequently
to profit or loss:① Exchange differences on translation offoreign operations (i)Gains (losses) arising during the year

46,952

43,581

326,374

Reclassification adjustments to profit orloss for the year

(101)

(99)

(745)

Total

46,85043,481

325,629② Share of other comprehensive income ofassociates
Gains (losses) arising during the year
Reclassification adjustments to profit orloss for the year

142

2

13

1

0

1

Total

142

2

14

Other comprehensive income/(loss) before
tax

46,993

43,483

325,643

Income tax relating to components of othercomprehensive income

(11)

(17)

(126)

46,981

43,466

325,516

Total other comprehensive income/(loss)(net of tax)Note:(i) ‘Exchange differences on translation of foreign operations’ consist of differences on foreign currency conversion for financial
statements of foreign operations.

- 87 -

Deferred and current taxes on each item of other comprehensive income for the years ended 31 March 2022 and 2023, are as follows:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))For the year ended
31 March 2022

For the year ended
31 March 2023

For the year ended
31 March 2023

Total

Tax

Net of tax

Total

Tax

Net of tax

Total

Tax

Net of tax

3,065

(781)

2,285

(5,709)1,767(3,943)(42,757)

13,231(29,526)

46,969(11)

46,95842,569(17)42,553

318,800(126)

318,674

290

(52)

238

152

(58)

93

1,136

(438)

697

Other comprehensive
income attributable toowners of the Company①FVTOCI financial assets② Exchange differences ontranslation of foreign
operations③ Remeasurements of the
net defined benefit
liability (asset)④ Share of othercomprehensive incomeof associates

142

－

142

2

－

2

14

－

14

Subtotal

50,467(844)

49,62337,013

1,691

38,705277,192

12,667

289,859

(6)

－

(6)

(2)

－

(2)

(16)

－

(16)

Other comprehensive
income attributable tonon-controlling interests① FVTOCI financial assets② Exchange differences ontranslation of foreign
operations

(119)

－

(119)

912

－

912

6,829

－

6,829

Subtotal

(125)

－

(125)

910

－

910

6,813

－

6,813

Total other comprehensive
income/(loss)

50,342(844)

49,49837,923

1,691

39,615

284,005

12,667

296,672- 88 -

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

(Yen)

(U.S. Dollars (Note 2))

For the year ended
31 March 2022

For the year ended
31 March 2023

For the year ended
31 March 2023

Basic earnings per share

446.45469.76

3.52

Diluted earnings per share

445.93469.47

3.52(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(Note 2))For the year ended
31 March 2022
Profit used in the calculation of basic
earnings per share

For the year ended
31 March 2023

164,507

For the year ended
31 March 2023

168,638

1,262,918(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 2022
Weighted-average number of ordinary
sharesFor the year ended 31 March 2023

368,482358,986② 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 2))For the year ended
31 March 2022

For the year ended
31 March 2023

For the year ended
31 March 2023

Profit used in the calculation of diluted
earnings per share

164,507

168,638

1,262,918(b) Weighted-average number of ordinary shares used in the calculation of diluted earnings per share(Shares in thousands)
For the year ended
31 March 2022
Weighted-average number of ordinary shares
Shares deemed to be issued for no consideration in respect of:
Stock options

For the year ended
31 March 2023

368,482358,986426

220

368,908359,207

Weighted-average number of ordinary shares used in the calculation of diluted
earnings per share

28. Non-cash transactions
Non-cash transactions for the years ended 31 March 2022 and 2023, consisted of acquiring property, plant and equipment through newlease arrangements in the amount of 8,402 million yen and 9,287 million yen (69,552 thousand U.S. dollars) for each period.

- 89 -

29. Subsidiaries(1) Composition of the Group
Information about the composition of the Group as at 31 March 2022 and 2023, is as follows:

Reportable Segment
Life Care

Information Technology

Number of wholly-owned subsidiaries
As at 31 March 2022
As at 31 March 2023

Location
U.S.A.

5

5

ARGENTINA

1

1

UNITED KINGDOM

4

4

ITALY

2

2

INDIA

3

3

INDONESIA

3

3

AUSTRALIA

2

2

NETHERLANDS

44

CANADA

7

7

COLOMBIA

1

1

SINGAPORE

3

3

SWITZERLAND

1

1SWEDEN

1

1

SPAIN

2

2

THAILAND

3

4

CZECH REPUBLIC

1

1

DENMARK

1

1

GERMANY

6

4

TURKEY

1

1

HUNGARY

22

PHILIPPINES

2

2

FINLAND

1

1

BRAZIL

2

2

FRANCE

3

4

BULGARIA

1

1

VIETNAM

1

1

BELGIUM

1

1

POLAND1

1

MALAYSIA

44

SOUTH AFRICA

1

1

MEXICO

1

1

RUSSIA

2

2

SOUTH KOREA

34

TAIWAN

1

1

CHINA

8

8

JAPAN

3

3

U.S.A.

1

1

SINGAPORE

1

1

THAILAND

2

1

PHILIPPINES

2

2

VIETNAM

3

3

MALAYSIA

1

1

LAOS

1

1

SOUTH KOREA

1

1

TAIWAN

1

1

CHINA

5

5

- 90 -

Reportable Segment
Other

U.S.A.

2

2

UNITED KINGDOM

1

1

AUSTRALIA

1

1

NETHERLANDS

44SINGAPORE

1

1

SWEDEN

1

1

SPAIN

1

1

GERMANY

1

1

FRANCE

1

1

SOUTH KOREA

1

1

JAPAN

1

1

Reportable Segment
Life Care

Information Technology

Number of wholly-owned subsidiaries
As at 31 March 2022
As at 31 March 2023

Location

Number of non-wholly-owned subsidiaries
As at 31 March 2022
As at 31 March 2023

Location
IRELAND

1

1

U.S.A.

2

2

UNITED KINGDOM

1

1

NETHERLANDS

1

1

SINGAPORE

1

1

GERMANY2

2

FRANCE

2

2

VIETNAM

1

1

BELGIUM

1

1

CHINA

5

5

JAPAN

1

1

PHILIPPINES

1

1

CHINA

1

1

- 91 -

(2) Details of the non-wholly-owned subsidiaries that have material non-controlling interests
Details of the non-wholly-owned subsidiaries that have material non-controlling interests are as follows:

Name ofsubsidiaries

Location

Profit (loss) allocated to nonAccumulated non-controlling interests
Proportion of ownershipcontrolling interests
interests and voting(Thousands(Thousands
rights held by non(Millions of (Millions of(Millions of (Millions ofcontrolling interestsof U.S.
of U.S.
Yen)
Yen)
Yen)
Yen)
Dollars)
Dollars)
As at 31
As at 31
As at 31
As at 31
As at 31
As at 31
As at 31
As at 31
March 2022 March 2023 March 2022 March 2023 March 2023 March 2022 March 2023 March 2023

WASSENBURG MEDICALNETHER
LANDS

B.V. and sevenother companies

and othercountries

49.0%

49.0%

204

212

1,587

3,417

3,879

29,051

50.0%

50.0%

200

282

2,111

1,488

2,123

15,902(142)(1,063)－

7,554

56,575

Individually immaterial subsidiaries with non-controlling interests(19,700)(17,274)(129,362)

Total(14,795)(3,717)(27,835)SEIKO
OPTICAL
PRODUCTS
CO., LTD. andthree otherJAPANand othercountries

companies
CHONGQINGMASTEK
ELECTRONIC

CHINA

－

40.0%

－

S CO., LTD.

Summarised financial information in respect of each of the Group’s subsidiaries that have material non-controlling interests is set out
below. The summarised financial information below represents amounts before intragroup eliminations.
(Millions of Yen)
As at / for the year
ended 31 March 2022

(Millions of Yen)
As at / for the year
ended 31 March 2023

(Thousands of U.S. Dollars)
As at / for the year
ended 31 March 2023

Non-current assets

3,493

3,415

25,577

Current assets

5,931

7,722

57,831

WASSENBURG MEDICAL B.V. and sevenother companies

Non-current liabilities

(314)

(385)

(2,881)

Current liabilities(2,137)(2,836)(21,240)

Equity attributable to owner of the Company

3,556

4,037

30,236

Non-controlling interests

3,417

3,879

29,051

Revenue

8,485

10,77280,668

Expenses(8,068)(10,339)(77,429)

Profit/(loss) for the year

416

433

3,239

Other comprehensive income/(loss)

360

511

3,828

Comprehensive income/(loss)

776

944

7,067

Dividends paid to non-controlling interests

－

－

－

Net cash flow from operating activities

748

373

2,795

Net cash flow from investing activities

(912)

(152)

(1,136)

Net cash flow from financing activities

(189)

(72)

(541)

Net cash flow

(354)

149

1,118

- 92 -

(Millions of Yen)
As at / for the year
ended 31 March 2022

(Millions of Yen)
As at / for the year
ended 31 March 2023

(Thousands of U.S. Dollars)
As at / for the year
ended 31 March 2023

899

899

6,732

11,355

12,221

91,523

(233)

(300)

(2,250)Current liabilities(8,742)(8,630)(64,628)

Equity attributable to owner of the Company

1,639

2,095

15,688

SEIKO OPTICAL PRODUCTS CO., LTD.
and three other companies
Non-current assets
Current assets
Non-current liabilities

Non-controlling interests

1,639

2,095

15,688

Revenue

29,57733,004

247,169

Expenses(29,119)(32,505)(243,425)

Profit/(loss) for the year

457

500

3,744

Other comprehensive income/(loss)

472

411

3,081

Comprehensive income/(loss)

930

911

6,825

Dividends paid to non-controlling interests

－

－

－

Net cash flow from operating activities

378

2,014

15,086

Net cash flow from investing activities

(52)

(55)

(414)

Net cash flow from financing activities

(474)

(446)

(3,337)

Net cash flow

(149)

1,514

11,336Note:
The Company holds less than a majority of the voting rights of SEIKO OPTICAL PRODUCTS CO., LTD. (“SOP”); however, theCompany has the power to appoint a majority of its board of directors. Thus, the Company is considered to control SOP and includes it
in its subsidiaries.
(Millions of Yen)
As at / for the year
ended 31 March 2022

(Thousands of U.S.
Dollars)
As at / for the year
ended 31 March 2023

(Millions of Yen)
As at / for the year
ended 31 March 2023

CHONGQING MASTEK ELECTRONICS
CO., LTD.
Non-current assets

－

4,503

33,719Current assets－

14,601

109,347

Non-current liabilities

－

－

－

Current liabilities

－

(218)

(1,629)Equity attributable to owner of the Company－

11,332

84,862

Non-controlling interests

－

7,554

56,575

Revenue

－

223

1,672

Expenses－(578)(4,330)

Profit/(loss) for the year

－

(355)

(2,657)

Other comprehensive income/(loss)

－

(189)

(1,416)Comprehensive income/(loss)

－

(544)

(4,073)

Dividends paid to non-controlling interests

－

－

－

Net cash flow from operating activities

－

(503)

(3,765)

Net cash flow from investing activities－(12,799)(95,851)

Net cash flow from financing activities－

19,430145,510

Net cash flow

－

6,128

45,894- 93 -

(3) Details of the material subsidiaries
Details of the Company’s material subsidiaries are as follows:

Name of subsidiary

HOYA LENSMANUFACTURING
MALAYSIA SDN.BHD.

Reportablesegment

Major products/
services in the

Location

reportable segment

Proportion ofshares held

Proportion ofshares held

As at 31 March2022

As at 31 March
2023

Life Care

Health Care related
products

MALAYSIA

100.0%

100.0%HOYA LENS THAILAND LTD. Life Care

Health Care related
products

THAILAND

100.0%

100.0%HOYA LENS GUANGZHOULTD.

Life Care

Health Care related
products

CHINA

100.0%

100.0%HOYA LENS AUSTRALIA
PTY.LTD.

Life Care

Health Care related
products

AUSTRALIA

100.0%

100.0%

INDIA

100.0%

100.0%HOYA LENS INDIA PRIVATELIMITEDHOYA LENS COLOMBIA
S.A.S.

Life Care

Health Care related
products

Life Care

Health Care related
products

COLOMBIA

100.0%

100.0%HOYA LENS VIETNAM LTD. Life Care

Health Care related
products

VIETNAM

100.0%

100.0%

CHINA

100.0%

100.0%DAEJEON DAEMYUNG
OPTICAL (HANGZHOU) CO., Life Care
LTD.

Health Care related
products

VISION EASE LENS(THAILAND) CO., LTD

Life Care

Health Care related
products

THAILAND

100.0%

100.0%

PT.VISION-EASE ASIA

Life Care

Health Care related
products

INDONESIA

100.0%

100.0%PERFORMANCE OPTICS
KOREA, LTD.

Life Care

Health Care related
products

SOUTH KOREA

100.0%

100.0%

Health Care related
products and EU
headquarters

NETHERLANDS

100.0%

100.0%HOYA HOLDINGS N.V.

Life Care andCorporate

HOYA LENSDEUTSCHLAND GMBH

Life Care

Health Care related
products

GERMANY

100.0%

100.0%HOYA LENS U.K. LTD.

Life Care

Health Care related
products

UNITED
KINGDOM

100.0%

100.0%HOYA LENS ITALIA S.P.A.

Life Care

Health Care related
products

ITALY

100.0%

100.0%HOYA LENS IBERIA S.A.

Life Care

Health Care related
products

SPAIN

100.0%

100.0%HOYA TURKEY OPTIK LENSLife Care
SANAYI VE TICARET A.S.

Health Care related
products

TURKEY

100.0%

100.0%HOYA LENS CANADA, INC.

Life Care

Health Care related
products

CANADA

100.0%

100.0%SEIKO OPTICAL PRODUCTS
Life Care
OF AMERICA, INC.

Health Care related
products

U.S.A.

50.0%

50.0%

SEIKO OPTICAL PRODUCTS

Health Care related

JAPAN

50.0%

50.0%

CO., LTD.

Life Care

products- 94 -Name of subsidiary

Reportablesegment

PENTAX EUROPE GMBH

Life CarePENTAX ITALIA S.R.L

Life CarePENTAX U.K. LTD.

Life CarePENTAX OF AMERICA, INC. Life Care

Major products/
services in the

Proportion ofshares held

Proportion ofshares held

As at 31 March2022

As at 31 March
2023

GERMANY

100.0%

100.0%

ITALY

100.0%

100.0%

100.0%

100.0%U.S.A.

100.0%

100.0%

Location

reportable segment
Medical related
products
Medical related
products
Medical related

UNITEDproducts

KINGDOM

Medical related
products

PENTAX CANADA, INC.

Life Care

Medical related
products

CANADA

100.0%

100.0%PENTAX MEDICAL(PENANG) SDN. BHD.

Life Care

Medical related
products

MALAYSIA

100.0%

100.0%HOYA SURGICAL OPTICS,
INC.

Life Care

Medical related
products

U.S.A.

100.0%

100.0%MICROLINE SURGICAL, INC. Life Care

Medical related
products

U.S.A.

100.0%

100.0%HOYA LAMPHUN LTD.

Life Care
Information
Technology

Health Care related
products and Medical THAILAND
related products

100.0%

100.0%PENTAX MEDICALSINGAPORE PTE. LTD.

Life Care

Medical related
products

SINGAPORE

100.0%

100.0%HOYA GLASS DISKPHILIPPINES, INC.

Information
Technology

Electronics related
products

PHILIPPINES

100.0%

100.0%HOYA GLASS DISKVIETNAM LTD.

Information
Technology

Electronics related
products

VIETNAM

100.0%

100.0%HOYA GLASS DISKVIETNAM Ⅱ LTD.

Information
Technology

Electronics related
products

VIETNAM

100.0%

100.0%HOYA MICROELECTRONICS Information
TAIWAN CO., LTD.
Technology

Electronics related
products

TAIWAN

100.0%

100.0%HOYA ELECTRONICS
KOREA CO., LTD.

Information
Technology

Electronics related
products

SOUTH KOREA

100.0%

100.0%HOYA ELECTRONICS
MALAYSIA SDN.BHD.

Information
Technology

Electronics related
products

MALAYSIA

100.0%

100.0%HOYA ELECTRONICS
SINGAPORE PTE. LTD.

Information
Technology

Electronics related
products

SINGAPORE

100.0%

100.0%HOYA CORPORATION USA

Information
Technology

100.0%

100.0%CHONGQING MASTEKELECTRONICS CO., LTD.

Information
Technology

Electronics related
products

CHINA

－

60.0%

HOYA OPTICS (THAILAND)
LTD.

Information
Technology

Imaging related
products

THAILAND

100.0%

100.0%HOYA OPTO-ELECTRONICS Information
QINGDAO LTD.
Technology

Imaging related
products

CHINA

100.0%

100.0%

Information
Technology

Imaging related
products

CHINA

100.0%

100.0%HOYA OPTICAL (ASIA) CO., Information

Imaging relatedLTD.

products

CHINA

100.0%

100.0%HOYA OPTICALTECHNOLOGY (SUZHOU)LTD.

Technology

Electronics related
products and Imaging U.S.A.
related products- 95 -Name of subsidiary

HOYA OPTICALTECHNOLOGY (WEIHAI)CO., LTD.

Reportablesegment

Major products/
services in the

Location

reportable segment

Proportion ofshares held

Proportion ofshares held

As at 31 March2022

As at 31 March
2023

Information
Technology

Imaging related
products

CHINA

100.0%

100.0%PENTAX CEBU PHILIPPINES Information
CORPORATION
Technology

Imaging related
products

PHILIPPINES

100.0%

100.0%HOYA HOLDINGS ASIA
PACIFIC PTE LTD

Corporate

Asia and Oceania
headquarters

SINGAPORE

100.0%

100.0%HOYA HOLDINGS (ASIA)
B.V.

Corporate

Asia and Oceania
holding company

NETHERLANDS

100.0%

100.0%HOYA FINANCE B.V.

Corporate

NETHERLANDS

100.0%

100.0%HOYA HOLDINGS, INC.

Corporate

U.S.A.

100.0%

100.0%

Asia and Oceania
financing company
North America
headquarters- 96 -

30. 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 related partiesare disclosed as follows:(1) Transactions with related parties, and receivables and payables balances
The Group has transactions with related parties as follows:
As at/for the year ended 31 March 2022:
Name ofassociates

Associates

AvanStrate, Inc.

Nature of related party transactions

Transaction amount

Outstanding balance(Millions of Yen)

(Millions of Yen)

Incorporation of deferred interests
receivable into principal (Note)

219－

Current portion of long-term loans
receivable from subsidiaries andaffiliates

－

8,887

Interest received

－

727

Note
Interest rates on loans are determined considering market rates.
The deferred interest receivable, which is calculated on the unpaid principal based on deferred interest rates, is incorporated into
principal.
The due date of the loan is 27 December 2023. It will be repaid in six installments after a certain period of deferment, and deferredinterests will be paid by batch payment on the due date. Of the unsettled amount, the balance to be collected within one year is 5,328
million yen. Platinum owned by a subsidiary of the affiliate is pledged as collateral.

As at/for the year ended 31 March 2023:
Name ofassociates

Nature of related
party transactions

Transaction
amountOutstandingbalance

Transaction
amountOutstandingbalance(Millions of
Yen)(Millions ofYen)(Thousands of
U.S. Dollars(Thousands of
U.S. Dollars(Note 2))

(Note 2))

Incorporation ofdeferredinterests

224

－

1,678

－

－

9,111

－

68,232

－

1,652

－

12,371

receivable into
principal (Note)
Associates

AvanStrate, Inc.

Current portion of
long-term loans
receivable fromsubsidiaries andaffiliates
Interest received

NoteInterest rates on loans are determined considering market rates.
The deferred interest receivable, which is calculated on the unpaid principal based on deferred interest rates, is incorporated into
principal.
The due date of the loan is 27 December 2023. It will be repaid in six installments after a certain period of deferment, and deferredinterests will be paid by batch payment on the due date. The total outstanding balance is to be collected within one year.
Platinum owned by a subsidiary of the affiliate is pledged as collateral.

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(2) Remuneration of key management personnel
Remuneration of directors and other 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
31 March 2022

For the year ended
31 March 2023

For the year ended
31 March 2023

Short-term benefits
Share-based payments

603
262

585
89

4,381
667

Total remuneration of key management personnel

865

674

5,048

Note
1. The remuneration of directors and key management personnel is determined by the remuneration committee based on the businessenvironment of the Company, the remuneration of other companies and performance.
2. As for the year ended 31 March 2023, the stock option expense for retired directors is reversed.

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31. Business combinations
The main business combination is as follows.
(1) Overview of acquired company①Name of acquiree②Primary business

Jiangsu Sigo Optical Co., Ltd.
Sale and production of optical lens

③Reportable segment④Acquisition date

Health care related products
1 July 2022

⑤Percentage of voting equity interests acquired.
⑥Total consideration transferred (Million yen)

60.7524%
8,198⑦Total consideration transferred

61,392(Thousands of U.S.dollars (Note 2))⑧Acquisition method

Acquisition of shares(2) Primary reasons for business combination
From the acquisition of Jiangsu Sigo Optical Co., Ltd., the Group will be able to offer a broader range of high-quality plastic andpolycarbonate single focus lens, strengthening the product portfolio. Through this acquisition, the Group will have more stablesupply of products to the customers.
(3) Consideration for the acquisition(Millions of Yen)

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

AmountAmountCash and cash equivalents
Current liabilities (Note)
Total

4,919
3,279

36,83524,557

8,198

61,392

Note: The amount is unsettled on 31 March 2023.
(4) Expense related to acquisition
Expenses of 36 million yen (268 thousand U.S. dollars) related to the acquisition are included in “Commission expense” in the
consolidated statement of comprehensive income for the year ended March 31, 2022.
(5) The amounts of assets acquired, and liabilities assumed at the acquisition date is as follows:(Millions of Yen)

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

AmountAmountNon-current assets
Property, plant, and equipment-net
Intangible assets (Note)
Subtotal
Current assets
Inventory

2,717
3,088

20,34623,1285,805

43,474

2,163

16,201

Trade and other receivables(Before deducting allowance for doubtful accounts)

1,266

9,484

Cash and cash equivalents
Current assets other than the above

1,011
293

7,571
2,193

Subtotal

4,733

35,449Total Assets

10,53978,923

Non-current liabilities (Note)

1,734

12,984Current liabilities

2,064

15,455

Total liabilities

3,797

28,4396,741

50,484

Fair value of identifiable acquired net assets

Note: Intangible assets mainly consist of “Customer related assets”. Deferred tax liabilities are recognised on temporary differences
arising from recognition of identifiable intangible assets.

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(6) Goodwill arising from the acquisition(Millions of Yen)

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

AmountAmountConsideration for acquisition
Addition: Non-controlling interests (Note)
Less: Fair value of identifiable acquired net assets

8,198

61,392

2,646(6,741)

19,814(50,484)

4,102

30,722

Goodwill arising from the acquisition

Note: Non-controlling interests were measured at the proportion of shares held by the non-controlling shareholders to the fair valueof identifiable net assets of the acquiree.
Recognised goodwill consists of “control premium”, “expected synergy” and “human resources”. Goodwill arising from theacquisition is not tax-deductible.
(7) Net cash outflows for the acquisition of subsidiary(Millions of Yen)

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

AmountAmountConsideration for the acquisition paid in cash

4,919

36,835

Less: Cash and cash equivalents owned by subsidiaryacquired(1,011)(7,571)

Net cash outflows for the acquisition of subsidiary

3,908

29,264(8) Impact of the Business combination on the Group’s financial results
Profit and loss information after the date of acquisition related to the business combination and the pro forma information assumingthat the business was carried out at 1 April 2022 are not disclosed because the impact on sales and profit for the year is immaterial.

32. Contingent liabilities
There are no significant contingent liabilities for the Group.

33. Commitments for expenditure
Payment commitments after the reporting date are as follows:

Commitments for the acquisition ofproperty, plant and equipment andintangible assets(Millions of Yen)

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))As at 31 March 2022

As at 31 March 2023

As at 31 March 2023

13,418- 100 -

48,222

361,13434. Assets held for sale or a disposal group
The following are the assets held for sale and the liabilities directly associated with assets held for sale.
(Millions of yen)
As at 31 March 2023

(Thousands of U.S. Dollars (Note 2))
As at 31 March 2023

Assets held for sale:
Property, plant and equipment-net

123

921

Goodwill
Intangible assets
Other non-current assets

815
32
5

6,103
243
41

Trade and other receivables
Other short-term financial assets
Cash and cash equivalents

13
14
61

101
106
460

Other current assets

60

446

1,124

8,421

Interest-bearing long-term debt
Trade and other payables
Income tax payables

53
51
5

399
380
36

Other current liabilities

23

171

Total liabilities directly associated withassets held for sale

132

987

Total assets held for sale
Liabilities directly associated with assets
held for sale:

The assets held for sale and the liabilities directly associated with assets held for sale for the year ended in 31 March 2023 are held by
the subsidiary in the Life care business. During the year ended in 31 March 2023, they were classified as assets held for sale andliabilities directly associated with assets held for sale, due to the high probability of immediate sale within one year.

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35. Subsequent events
Share Cancellation
The Board of Directors made a resolution to cancel certain shares held as the Company’s treasury shares on 8 May 2023 pursuant to

Article 178 of the Companies Act.
1. Reason for cancellation of treasury shares
The Company decided on the cancellation of treasury shares with the aim of increasing capital efficiency as well as enhancing
shareholder benefit by decreasing the total number of outstanding shares. The Company cancelled 2,872,000 shares on 17 May 2023,
which were repurchased under its repurchase plan approved by resolution of the Board of Directors on 31 January 2023.
2. Outline of cancellation(1) Class of shares: Common stock(2) Number of shares to be cancelled: 2,872,000 shares(0.81% of total shares outstanding, excluding treasury shares)(3) Date of cancellation: 17 May 2023
(4) Total number of issued and outstanding shares after the cancellation: 354,088,520 shares

Resolution on cash dividends
On 24 May 2023, a resolution was made by the Company’s board of directors for the payment of a cash dividend to shareholders ofrecord on 31 March 2023 of 23,009 million yen (172,315 thousand U.S. dollars) (65 yen per common share).

36. Approval of financial statements
The consolidated financial statements for the year ended 31 March 2023, were approved by Mr. Ryo Hirooka, the director and chief
financial officer of the Group, on 23 June 2023.

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