HOYA Corporation and its Subsidiaries
Consolidated Financial Statements under IFRSs
and Independent Auditor’s Report
For the year ended 31 March 2020HOYA Corporation

Contents

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

3

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

6

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

8

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

10

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

15

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

17

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

17

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

18

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

20

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

34

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

35

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

40

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

44

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

47

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

50

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

53

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

54

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

59

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

61

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

62

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

62

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

63

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

65

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

69

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

70

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

71

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

75

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

91

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

94

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

96

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

98

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

99

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

101

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

102

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

103

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

110

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

112

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

112

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

112

34． Subsequent events........................................................................................................................................

112

35． Approval of financial statements.................................................................................................................

113

- 2 -

INDEPENDENT AUDITOR'S REPORTTo the Board of Directors of HOYA CORPORATION:

OpinionWe have audited the consolidated financial statements of HOYA CORPORATION and its subsidiaries (the"Group"), which comprise the consolidated statement of financial position as of March 31, 2020, and theconsolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated
statement of cash flows for the year then ended, and notes to the consolidated financial statements, including asummary of significant accounting policies, all expressed in Japanese yen.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, theconsolidated financial position of the Group as of March 31, 2020, and its consolidated financial performance andits consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards("IFRSs").
Convenience Translation
Our audit also comprehended the translation of Japanese yen amounts into U.S. dollar amounts and, in our opinion,such translation has been made in accordance with the basis stated in Note 2 to the consolidated financial
statements. Such U.S. dollar amounts are presented solely for the convenience of readers outside Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities
under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated
Financial Statements section of our report. We are independent of the Group in accordance with the provisions of
the Code of Professional Ethics in Japan, and we have fulfilled our other ethical responsibilities as auditors. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Responsibilities of Management and the Audit Committee
Management is responsible for the preparation and fair presentation of the consolidated financial statements inaccordance with IFRSs, and for such internal control as management determines is necessary to enable thepreparation of consolidated financial statements that are free from material misstatement, whether due to fraud or
error.
In preparing the consolidated financial statements, management is responsible for assessing the Group's ability tocontinue as a going concern, disclosing, as applicable, matters related to going concern in accordance with IFRSs
and using the going concern basis of accounting unless management either intends to liquidate the Group or tocease operations, or has no realistic alternative but to do so.
The Audit Committee is responsible for overseeing the Officers and Directors' execution of duties relating to thedesign and operating effectiveness of the controls over the Group's financial reporting process.
Auditor's Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes ouropinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted inaccordance with auditing standards generally accepted in Japan will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these
consolidated financial statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise professional
judgment and maintain professional skepticism throughout the audit. We also:• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due tofraud or error, design and perform audit procedures responsive to those risks. The procedures selected depend on
the auditor's judgement. In addition, we obtain audit evidence that is sufficient and appropriate to provide a basis
for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or theoverride of internal control.
- 3 -• Obtain, when performing risk assessment procedures, an understanding of internal control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Group's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates andrelated disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on theaudit evidence obtained, whether a material uncertainty exists related to events or conditions that may castsignificant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated
financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on
the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may
cause the Group to cease to continue as a going concern.
• Evaluate whether the overall presentation and disclosures of the consolidated financial statements are inaccordance with IFRSs, as well as the overall presentation, structure and content of the consolidated financial
statements, including the disclosures, and whether the consolidated financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or businessactivities within the Group to express an opinion on the consolidated financial statements. We are responsible forthe direction, supervision and performance of the group audit. We remain solely responsible for our audit
opinion.
We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of theaudit and significant audit findings, including any significant deficiencies in internal control that we identify during
our audit.
We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements
regarding independence, and communicate with it all relationships and other matters that may reasonably bethought to bear on our independence, and where applicable, related safeguards.

- 4 -Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Group which is required to bedisclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.

23 June 2020

- 5 -Consolidated Statement of Financial Position
HOYA Corporation and its Subsidiaries
As at 31 March 2020

(Thousands of U.S.

(Millions of Yen)

(Millions of Yen)

Notes

As at 31 March 2019

As at 31 March 2020

As at 31 March 2020

6,9,33111,077

152,302

1,399,448

Goodwill

8,942,84342,082

386,677

Intangible assets

8,33

44,30839,796

365,667

Investments in associates
Long-term financial assets

10
12,21

349
44,103

1,007
45,9759,250
422,448

Other non-current assets
Deferred tax assets

13
11

2,960
10,162

685
7,990

6,297
73,415

255,802289,836

2,663,203

Dollars (Note 2))

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

Total non-current assets
CURRENT ASSETS:
Inventories

14

78,97378,130717,910

Trade and other receivables
Other short-term financial assets

15,21
12,21

110,847
3,131

103,3391,303

949,547
11,976

Income taxes receivable
Other current assets

13820
20,946510
19,907

4,687
182,918

Cash and cash equivalents

21

293,397

317,982

2,921,820

Total current assets

508,113521,1714,788,857

Total assets

763,915

811,008

7,452,060- 6 -(Thousands of U.S.

(Millions of Yen)

(Millions of Yen)

Notes

As at 31 March 2019

As at 31 March 2020

As at 31 March 2020

EQUITY
Share capital

20(1)

6,264

6,264

57,560Capital reserves
Treasury shares

20(1)
20(2)

15,899(8,319)15,899(27,963)

146,087(256,945)

Other capital reserves
Retained earnings

20(2),22
20(3),34(7,434)
617,459(8,428)676,058(77,442)
6,212,056(713)(16,788)(154,257)

623,1554,552

645,042(15,777)

5,927,058(144,968)

627,707629,265

5,782,090

7,16,2112,21904
10,936

14,472
23,923

132,977
219,817Retirement benefit liabilities
Provisions

17
18

2,770
2,607

3,203
2,539

29,42823,327

Other non-current liabilities
Deferred tax liabilities

13
11

2,303
4,917

1,363
3,851

12,52635,38624,43649,350453,461

Dollars (Note 2))

EQUITY AND LIABILITIES

Accumulated other comprehensive income/(loss)
Equity attributable to owners of the Company
Non-controlling interests

20(4)Total equity
LIABILITIESNON-CURRENT LIABILITIES:Interest-bearing long-term debt
Other long-term financial liabilities

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

7,16,21

1,934

7,494

68,857

Trade and other payables
Other short-term financial liabilities

19,21
12,21

54,887646

62,8952,824

577,922
25,944

Income tax payables
Provisions

18

8,872
1,261

17,765
1,234

163,235
11,342Other current liabilities

13

44,17140,181

369,209

Total current liabilities

111,772

132,393

1,216,509

Total liabilities

136,208

181,743

1,669,970

Total equity and liabilities

763,915

811,008

7,452,060- 7 -Consolidated Statement of Comprehensive Income
HOYA Corporation and its Subsidiaries
For the year ended 31 March 2020
(Thousands of(Millions of Yen) (Millions of Yen) U.S. Dollars (Note
2))
Notes

For the year ended For the year ended For the year ended
31 March 2019

31 March 2020

31 March 2020

Continuing operations
Revenue:Sales

23

565,810576,546

5,297,677

Finance income
Other income

25
24

2,773
3,775

3,461
2,463

31,806
22,627572,359

582,470

5,352,111(2,763)
86,977

1,003
93,381

9,215
858,042132,006
26,416

133,734
34,3741,228,834
315,848

5,376
12,7194,657
12,21442,796112,23124
934,051
1,099

33,723300

309,865
2,760

Finance costs
Share of loss of associates

7,17,25
10

391
1,113

791
1,652

7,264
15,182Foreign exchange (gain)/loss ,net
Other expenses

24
6,7,8,24

2,307
128,010

1,606
117,768

14,755
1,082,127

427,702435,2023,998,919

144,657

147,268

1,353,192

22,58432,681

300,295

Profit for the year from continuing operations

122,072

114,587

1,052,898

Profit for the year

122,072

114,587

1,052,898

809

933

8,570

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

17,22,24
6,7,8,24

Subcontracting cost
Advertising and promotion expense
Commissions expense
Impairment losses

Total expenses
Profit before tax
Income tax expense

11

Other comprehensive income/(loss):

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
Income tax relating to components of other comprehensive income/

17

(293)

(50)

(463)

(loss)
Subtotal

11

(146)

(212)

(1,949)

371

670

6,158

10

6,612
(16)

(16,806)76(154,420)
701

11

124

(203)

(1,863)6,720(16,932)(155,583)

7,091(16,262)(149,424)

129,164

98,325

903,473

Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations
Share of other comprehensive income of associates
Income tax relating to components of other comprehensive income
Subtotal
Total other comprehensive income/(loss)
Total comprehensive income/(loss) for the year

- 8 -

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 2019

31 March 2020

31 March 2020

Dollars (Note 2))

Profit attributable to:
Owners of the Company

122,103

114,406

1,051,239

Non-controlling interests

(31)

181

1,659

122,072

114,587

1,052,898

Owners of the Company

129,334

98,364

903,833

Non-controlling interests

(171)

(39)

(360)

129,164

98,325

903,473

Total
Total comprehensive income/(loss) attributable to:

Total

Notes

Basic earnings per share
Continuing operations(U.S. Dollars (Note

(Yen)

(Yen)

For the year ended

For the year ended

For the year ended

31 March 2019

31 March 2020

31 March 20202))

27
321.55

Discontinued operations
Basic earnings per share
Diluted earnings per share

303.27

2.79

－

－

－

321.55303.272.79

320.96302.74

2.78

27

Continuing operations
Discontinued operations
Diluted earnings per share

- 9 -

－

－

－

320.96302.74

2.78

Consolidated Statement of Changes in Equity
HOYA Corporation and its Subsidiaries
For the year ended 31 March 2020
(Millions of Yen)
Notes
Balance at 1 April 2018

Share capital

Capital reserves

Treasury shares

6,264

15,899(10,886)

Other capitalreserves(6,660)Retained earnings
529,818

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

122,10326
122,103

Total comprehensive income/(loss) for the year
Transactions with owners
Contributions by and distributions to owners
20(2)

(2)

－

Disposal of treasury shares

20(2)

2,569

(969)

Dividends, 90 yen per share

20(3)Change in non-controlling interests

20(4)

－

Share-based payments (stock options)

22

195

Acquisition of treasury shares(34,164)(297)

Transfer to retained earnings
Total contributions by and distributions toowners

－

－

2,567

(774)

(34,462)

Total transactions with owners

－

－

2,567

(774)

(34,462)

Balance at 31 March 2019

6,264

15,899(8,319)(7,434)

617,459
533

Cumulative effect of accounting change
6,264

Restated balance at April 1, 201915,899(8,319)(7,434)

617,992

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

114,406
26
114,406

Total comprehensive income/(loss) for the year
Transactions with owners
Contributions by and distributions to owners
Acquisition of treasury shares20(2)(44,261)(22)

Disposal of treasury shares

20(2)

2,309

(1,032)

Cancellation of treasury shares20(2)22,308Dividends, 90 yen per share

20(3)Change in non-controlling interests

20(4)

(65)

Share-based payments (stock options)

22

125

(22,308)(34,064)

32

Transfer to retained earnings
Total contributions by and distributions toowners－－(19,644)(994)(56,340)

Total transactions with owners－－(19,644)(994)(56,340)

Balance at 31 March 2020

6,264

15,899(27,963)(8,428)676,058- 10 -

(Millions of Yen)

Financial assets

Notes

Remeasurements of
Exchange differences

measured at fair value
on translation ofthrough otherAccumulated othercomprehensive

comprehensive

income of associates

income/(loss)

benefit liability
foreign operations

comprehensive income

Balance at 1 April 2018

Share of otherthe net defined(asset)378(6,652)－(1,969)(8,242)

697

6,853

(303)

(16)

7,231

697

6,853

(303)

(16)

7,231

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

26

Total comprehensive income/(loss) for the year
Transactions with owners
Contributions by and distributions to owners
Acquisition of treasury shares20(2)Disposal 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(6)Transfer to retained earnings

303

297

Total contributions by and distributions toowners

(6)

－

303

－

297

Total transactions with owners

(6)

－

303

－

297

1,070

201

－

(1,985)

(713)

1,070

201

－

(1,985)

(713)

715

(16,805)(29)

76(16,042)715(16,805)(29)

76(16,042)

Balance at 31 March 2019
Cumulative effect of accounting change
Restated balance at April 1, 2019
Total comprehensive income/(loss) for the year
Profit for the year
Other comprehensive income/(loss)

26

Total comprehensive income/(loss) 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

(61)

29

(32)

Total contributions by and distributions toowners

(61)

－

29

－

(32)

Total transactions with owners

(61)

－

29

－

(32)

Balance at 31 March 2020

1,724

(16,604)－(1,909)(16,788)- 11 -

(Millions of Yen)
EquityNotes

Non-controlling
attributable to owners

Total equity
interestsof the Company

526,193

Balance at 1 April 2018

4,484

530,677

122,103(31)

122,072

7,231

(140)

7,091

129,334(171)

129,164

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

26

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

20(2)

(2)

(2)

Disposal of treasury shares

20(2)

1,600

1,600

Dividends, 90 yen per share20(3)(34,164)(30)(34,195)

Change in non-controlling interests

20(4)

－

269

269

Share-based payments (stock options)

22

195

195

－

－

Transfer to retained earnings
Total contributions by and distributions toowners(32,372)238(32,134)

Total transactions with owners(32,372)238(32,134)

Balance at 31 March 2019

623,1554,552

627,707

533

Cumulative effect of accounting change
Restated balance at April 1, 2019

533

623,688

4,552

628,240

114,406

181

114,587(16,042)(220)(16,262)

98,364(39)

98,325

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

26

Total comprehensive income/(loss) for the year
Transactions with owners
Contributions by and distributions to owners
Acquisition of treasury shares20(2)(44,283)(44,283)

Disposal of treasury shares

20(2)

1,277

1,277

Cancellation of treasury stock

20(2)

－

－

Dividends, 90 yen per share20(3)(34,064)－

Change in non-controlling interests

20(4)

(65)

(20,289)

Share-based payments (stock options)

22

125

125

－

－

Transfer to retained earnings(34,064)(20,354)

Total contributions by and distributions toowners(77,011)(20,289)(97,300)

Total transactions with owners(77,011)(20,289)(97,300)

Balance at 31 March 2020

645,042(15,777)

629,265- 12 -

Consolidated Statement of Changes in Equity
HOYA Corporation and its Subsidiaries
For the year ended 31 March 2020-Continued(Thousands of U.S. Dollars (Note 2))
Notes
Balance at 31 March 2019

Share capital

Capital reserves

Treasury shares

57,560146,087(76,441)

Other capitalreserves(68,311)Retained earnings
5,673,614
4,895

Cumulative effect of accounting change
57,560

Restated balance at April 1, 2019

146,087(76,441)(68,311)

5,678,509

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

1,051,239
26
1,051,239

Total comprehensive income/(loss) for the year
Transactions with owners
Contributions by and distributions to owners
Acquisition of treasury shares20(2)(406,700)(203)

Disposal of treasury shares20(2)21,214(9,483)Cancellation of treasury shares20(2)204,982

Dividends, 90 yen per share

20(3)Change in non-controlling interests

20(4)

(597)

Share-based payments (stock options)

22

1,153

(204,982)(313,006)

296

Transfer to retained earnings
Total contributions by and distributions toowners－－(180,504)(9,131)(517,692)

Total transactions with owners－－(180,504)(9,131)(517,692)

57,560146,087(256,945)(77,442)

6,212,056

Balance at 31 March 2020

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

Financial assets

Notes

Remeasurements of
Exchange differences

measured at fair value
on translation ofthrough otherAccumulated othercomprehensive

comprehensive

income of associates

income/(loss)

benefit liability
foreign operations

comprehensive income

Balance at 31 March 2019

Share of otherthe net defined(asset)

9,832

1,851

－

(18,238)(6,556)

9,832

1,851

－

(18,238)(6,556)

6,571(154,415)

(263)

701

(147,406)

6,571(154,415)

(263)

701

(147,406)

Cumulative effect of accounting change
Restated balance at April 1, 2019
Total comprehensive income/(loss) for the year
Profit for the year
Other comprehensive income/(loss)

26

Total comprehensive income/(loss) 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 interest20(4)Share-based payments (stock options)

22

Transfer to retained earnings

(559)

263

(296)

Total contributions by and distributions toowners

(559)

－

263

－

(296)

Total transactions with owners

(559)

－

263

－

(296)

Balance at 31 March 2020

15,844(152,564)－(17,538)(154,257)- 13 -

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

Non-controlling
attributable to owners

Total equity
interestsof the Company

5,725,953

Balance at 31 March 201941,824

5,767,777

41,824

5,772,672

1,051,239

1,659

1,052,898(147,406)(2,019)(149,424)

903,833(360)

903,473

4,895

Cumulative effect of accounting change

5,730,848

Restated balance at April 1, 2019

4,895

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

26

Total comprehensive income/(loss) for the year
Transactions with owners
Contributions by and distributions to owners
Acquisition of treasury shares20(2)(406,904)(406,904)

Disposal of treasury shares20(2)11,731

11,731

Cancellation of treasury shares

20(2)

－

－

Dividends, 90 yen per share20(3)(313,006)－(313,006)

Change in non-controlling interest

20(4)

(597)

(186,432)(187,030)

Share-based payments (stock options)

22

1,153

1,153

－

－

Transfer to retained earnings
Total contributions by and distributions toowners(707,623)(186,432)(894,055)

Total transactions with owners(707,623)(186,432)(894,055)

Balance at 31 March 2020

5,927,058(144,968)

5,782,090- 14 -

Consolidated Statement of Cash Flows
HOYA Corporation and its Subsidiaries
For the year ended 31 March 2020
(Millions of Yen)

(Millions of Yen)

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

For the year ended

For the year ended

For the year ended

31 March 2019

31 March 2020

31 March 2020

Profit before tax
Depreciation and amortisation

144,657
26,416147,268
34,374

1,353,192
315,848

Impairment losses
Finance income

1,099(2,773)300(3,461)

2,760(31,806)

Finance costs
Share of (profits)/loss of associates

391
1,113

791
1,652

7,264
15,182(Gain)/loss on sales of property, plant and equipment
Loss on disposal of property, plant and equipment

(492)
609

Gain on business transfer
Foreign exchange (gain)/loss

(3)
342

(258)
375
－

(2,367)
3,444
－

(567)

(5,209)7,936(4,265)(39,188)

capital)Movements in working capital

179,294

176,2091,619,121

Decrease/(increase) in inventories(6,128)(2,300)(21,137)

Decrease/(increase) in trade and other receivables
Increase/(decrease) in trade and other payables(3,066)
4,985

4,186
5,152

38,46747,337

Notes

Cash flows from operating activities

OthersCash generated from operations (before movements in working

Increase/(decrease) in retirement benefit liabilities and provisions

428

433

3,978

175,512

183,680

1,687,766

Interests received

2,435

3,201

29,413

Dividends received
Interest paid

5
(261)

14
(511)

125
(4,700)

Income taxes paid
Income taxes refunded(31,637)
533(23,169)
152(212,891)
1,395

Net cash generated from operating activities
Cash flows from investing activities

146,588

163,366

1,501,108

Subtotal

Withdrawals of time deposits

21,8152,804

25,763

Payments for time deposits
Proceeds from sales of property, plant and equipment(18,223)2,340(2,367)472(21,748)
4,337

Payments for acquisition of property, plant and equipment
Proceeds from sales of investment(26,672)10(45,177)
1,948(415,116)
17,901

Payments for acquisition of investment
Proceeds from sales of subsidiaries(27,777)
260(1,562)－(14,355)－

Payments for acquisition of subsidiaries
Proceeds from business transfer(19,742)
4

(969)
－

(8,903)
－

(421)
427

(542)
226

(4,976)
2,072

Other payments(2,164)(2,217)(20,370)

Net cash used in investing activities(70,144)(47,384)(435,395)

Payments for business transfer
Other proceeds- 15 -

Consolidated Statement of Cash Flows
HOYA Corporation and its Subsidiaries
For the year ended 31 March 2020-Continued(Millions of Yen)

(Millions of Yen)

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

Notes

For the year ended

For the year ended

For the year ended

31 March 2019

31 March 2020

31 March 2020

Cash flows from financing activities
Dividends paid to owners of the Company(34,141)

Dividends paid to non-controlling interests
Net decrease in short-term borrowings(34,042)－(312,803)
－

16

(30)
－

(775)

(7,121)

Repayments of long-term borrowings

16

(271)

(134)

(1,232)

Repayments of lease liabilities

16－(7,547)(69,346)

Payments for redemption of bonds

16

(14)

－

－

Proceeds from disposal of treasury shares

20(2)

－

－

Payments for purchase of treasury shares

20(2)

0
(2)

(44,283)(406,904)

1,600

1,277

11,731

67

187

1,715

Proceeds from exercise of stock options
Proceeds from share issuance to non-controlling shareholders
Payments for acquisition of non-controlling interests

20(4)
20(4)

－

(149)

(1,372)

Net cash used in financing activities(32,792)(85,468)(785,332)

Net increase/(decrease) in cash and cash equivalents

43,65230,514

280,381

Cash and cash equivalents at the beginning of the year

245,835

293,397

2,695,923

Effects of exchange rate changes on the balance of cash and cash
equivalents in foreign currencies
Cash and cash equivalents at the end of the year
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 2020.

- 16 -

3,910(5,930)(54,484)

293,397

317,982

2,921,820

Notes to the Consolidated Financial Statements
HOYA Corporation and its Subsidiaries
For the year ended 31 March 2020

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

- 17 -

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 ¥108.83 to $1, the foreign exchange rate at 31 March 2020. 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 applying new accounting standards
The Group adopted the following IFRS for the year ended 31 March 2020:
IFRSs
IFRS 16

LeasesSubject of new standards/amendments and transition provisions
Amendment to the accounting treatment for lease arrangements

The cumulative effect of initially applying IFRS 16 was recognised at the date of initial application pursuant to a transition method
permitted by the standard.
In regard to reassessment, whether a contract is or contains a lease at the date of initial application, the Group chose the practical
expedient in paragraph C3 of IFRS 16 and applied IFRS 16 to contracts that had been previously identified as leases applying IAS 17,
Leases (hereinafter referred as to “IAS 17”), and IFRIC 4, Determining whether an arrangement contains a lease, and did not apply
IFRS16 to contracts that had not. On or after the date of initial application, a lease is identified in accordance with IFRS 16.
A lease liability and a right-of-use asset were recognised at the date of initial application for leases previously classified as operatingleases applying IAS 17. A lease liability was measured at the present value of the remaining lease payments, discounted using thelessee’s incremental borrowing rate at the date of initial application. This weighted average lessee’s incremental borrowing rate is
1.8%. A right-of-use asset was measured at an amount equal to the lease liability, adjusted by the amount of prepaid lease payments
for that lease.
The carrying amounts of right-of-use assets and lease liabilities that were previously classified as finance leases applying IAS 17 were
measured at the book value immediately before that date of initial application of IFRS16.
The following table shows difference between operating lease commitments disclosed applying IAS 17 at the end of the previous
annual reporting period and lease liabilities recognised on the consolidated statement of financial position at the date of initial
application.
(millions of yen)AmountOperating lease commitments disclosed at 31 March 2019

6,442

Lease liabilities of finance lease (31 March 2019)862

Non-cancelable operating leases etc.

14,933

Lease liabilities at 1 April 201922,237Right-of-use assets recognised on the consolidated statement of financial position at the date of initial application are ¥25,131 million.
The Group used the following practical expedient when applying IFRS 16;
・Initial direct costs are excluded from the measurement of the right-of-use assets at the date of initial application.

- 18 -

(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
implication from the adoption of the revision of IFRS 16 has not yet been fully assessed by the Group. Except for the revision of IFRS
16, the impact of the adoption of these standards and interpretations on the consolidated financial statements of the Group isimmaterial.

IFRSs

Mandatory
adoption（fromthe yearbeginning)

IFRS 10

Consolidated Financial(Revised)
IAS 28

Statements
Investments in Associates(Revised)

and Joint Ventures

IFRS 16(Revised)

LeasesNot determined

To be adopted
by the Group
from the year

Subject of new standards/amendments

endingNot determined

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

1 June 2020

31 March 2021

- 19 -

Amendments to provide lessees with a practical
expedient that relieves a lessee from assessing
whether a rent concession is a lease modification in acertain condition3. Significant accounting policies(1) Basis of preparation
The consolidated financial statements have been prepared on the historical cost basis except for certain non-current assets andfinancial instruments measured at revalued amounts or fair value. 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 othermembers of the Group. All intragroup transactions, balances, income and expenses are eliminated in full in preparing the consolidated
financial statements.
Changes in an interest of a subsidiary without losing control are accounted for as equity transactions. The carrying amounts of thecontrolling and non-controlling interests are adjusted to reflect the changes in their respective percentage 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.
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 inaccordance with 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.

- 20 -

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.
Goodwill is measured on the basis of the excess of the sum of the consideration transferred, the amount of any non-controllinginterests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree over the fair value ofidentifiable assets acquired, net of liabilities assumed at acquisition date. Negative goodwill is recognised immediately in profit or loss
as a bargain purchase gain.

- 21 -

Non-controlling interests in subsidiaries are reported in equity separately from the equity attributable to owners of the Company. Noncontrolling interests are initially measured either at fair value or at the non-controlling interests’ proportionate share of the recognised
amounts of the acquiree’s identifiable net assets on a transaction-by-transaction basis.
When a business combination is achieved in stages, the Group’s previously held equity interest in the acquiree is remeasured to thefair value at the acquisition date (i.e., the date when the Group obtains control) and the resulting gain or loss, if any, is recognised in
profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that were previously recognised in othercomprehensive income are reclassified to profit or loss where such treatment would be appropriate if that interest were disposed of.
Goodwill arising from business combinations before the IFRSs transition date is measured at 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 the presentation 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 thedate when 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
the reporting period. The revenues and expenses of foreign operations are translated into Japanese yen at the average rates of exchange
for the year. Where there are material fluctuations in exchange rates, the exchange rate at the transaction date is used. Foreignexchange differences arising from translation are initially recognised as exchange differences on translation of foreign operations inother comprehensive income and accumulated in ‘accumulated other comprehensive income’, which are reclassified from equity to
profit or loss on disposal of the net investment and included in ‘other expenses’ in the consolidated statement of comprehensive
income.

- 22 -

(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.
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 of interest expense recognised as finance costs in the consolidated statement of comprehensive income
and repayments of the lease liability that are calculated by the interest method. The Group does not recognise right-of-use assets andlease liabilities for short-term leases that have a lease term of 12 months or less and for leases of low-value assets. The Group
recognises the lease payments associated with these leases as expense on straight-line basis over the lease term or other systematic
basis.
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.

- 23 -

(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 expense 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 following have been demonstrated:(a) the technical feasibility of completing the intangible asset so that it will be available for use or sale;(b) the intention to complete the intangible asset and use or sell it;(c) the ability to use or sell the intangible asset;(d) how the intangible asset will generate probable future economic benefits;(e) the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible
asset; and(f) the ability to measure reliably the expenditure attributable to the intangible asset during its development.
The amount initially recognised for internally-generated intangible assets is the sum of the expenses incurred from the date when theintangible assets first meet 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 orlosses arising from derecognition of an intangible asset are recognised in profit or loss when the asset is derecognised.

- 24 -

(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 inthe acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the acquisition-dateamounts 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.

(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, such that the increased carrying amount does not exceed the carrying amount that would have been
determined had no impairment losses been recognised for the asset (or cash-generating unit) in prior years. A reversal of impairment
losses is recognised immediately in profit or loss.

- 25 -

(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 and 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(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.
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
and loss. 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. It 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 a collateralised borrowing for the proceeds received.

- 26 -

(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
portion of fixed and variable overhead expenses.

(13) Cash and cash equivalents
Cash and cash equivalents are composed of cash on hand and bank deposits including 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.

- 27 -

(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
Equity-settled share-based payments (i.e., stock options), which are incentive plans to the Group’s directors, officers and certain
employees, are measured at the fair value of the equity instruments at the grant date. Details regarding the determination of the fairvalue of equity-settled share-based transactions are set out in Note 22 “Share-based payments”.
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over thevesting period while the corresponding amount to other capital reserves is recognised, based on the Group’s estimate of equity
instruments that will eventually vest. At the end of each reporting period, the Group revises its estimate of the number of equity
instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in profit or loss such that the
cumulative expense reflects the revised estimate, with a corresponding adjustment to other capital reserves.

(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.

- 28 -

(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
at fair value, and the subsequent changes are recognised in profit and loss.
③ Financial liabilities measured at amortised cost
Financial liabilities measured at amortised cost are measured at fair value minus transaction costs at initial recgnition. 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 and 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”.

- 29 -

(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 “Financecost”.
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.

- 30 -

(20) Provisions and contingent liabilities assumed in a business combination
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that
the Group will be required to settle the obligation by outflow of resources embodying economic benefits, and a reliable estimate canbe made of the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required tosettle the present obligation at the end of the reporting period (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.
③ Contingent liabilities assumed in a business combination
Contingent liabilities resulting from a business combination are initially measured at fair value at the date of acquisition. Subsequent
to initial recognition, such contingent liabilities are remeasured considering expected future payments, possible occurrence and timingof payments at each reporting period.

- 31 -

(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 and imaging related products, etc.
Revenue is recognised at the fair value of the consideration received or receivable less discount, rebate and consumption taxes on the
shipping or delivery date, or upon the completion of inspection by customers when the control of products is transferred to thecustomer and the performance obligation is satisfied by the Group.

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

- 32 -

(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.
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.

(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.

- 33 -

4. Critical accounting judgements and key sources of estimation uncertainty(1) Application of estimates and assumptions
Preparation of consolidated financial statements requires management to make estimates and assumptions in order to determine thereported amounts of certain assets, liabilities, income and expense items. Regarding the impact of novel coronavirus, the result of Life
Care segment is estimated based on the assumption that it will recover after a while later in the end. The result of Information
Technology segment is estimated based on the assumption that the impact is short-term.
The following are items that require estimates and assumptions 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”,
Note 3 (5) “Property, plant and equipment”, Note 3 (6) “Leases” and Note 3 (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 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 “Deferredtaxes 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 stock options (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, and impacts 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 withdifferent 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”)- 34 -

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: the Life Care business, the Information Technology businessand 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 in the health care and medical sectors
and medical related products, including medical equipment and medical materials that are used in medical treatments. In operating thisbusiness, it is typically a requirement to obtain approvals and permissions in accordance with the Pharmaceutical Affairs Act of Japanand other regulations, and sophisticated technologies and highly reliable quality control systems represent critical elements for
operating this business.
In the Information Technology business, the Group has developed an extensive range of products following the digitalisation of
information and the emergence of the Internet. The Group produces and sells a broad array of I/O (Input/Output Device) related
products in the information and communication sector, including electronics related products that are essential for the modern digital
information and communication technologies, and imaging related products that are necessary to import pictures and video images asdigital information based on optical technologies.
Other business mainly includes the business that provides information system services and new businesses.
The main products and services for each reportable segment described above are as follows:
Reportable Segment
Life Care

Information Technology

Major Products and Services

Health Care related products

Eyeglass lenses and Contact lenses

Medical related products

Endoscopes, Medical accessories, Intraocular lenses, Artificial bone,
Metallic implants for orthopedics

Electronics related products

Photomasks and Maskblanks for semiconductors,
Masks and Devices for liquid-crystal displays (LCDs)
Glass disks for hard disk drives (HDDs)

Imaging related products
Other

Optical lenses, Optical glasses, Laser equipment
Design of information systems and other services- 35 -

(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
2019
Revenue from externalcustomers

Life Care

Information
Technology

Total

565,810

－

3

96

1,511

1,610

(1,610)

Total

373,391

187,6436,386

567,420(1,610)565,810

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

4,875

Consolidated

Inter-segment sales

Interest expense
Depreciation and amortisation

187,546

Adjustments

565,810－

Interest income

373,388

Other

665

708

3

1,376

1,387

2,763

(1,475)(17,349)(330)(8,478)(0)(411)(1,806)(26,238)

1,415
(178)

(391)
(26,416)

39

20

59

(1,172)(1,113)(690)(285,291)(281)(98,685)－－(5,240)(971)(389,216)(128)(5,682)(1,099)(394,897)

69,29080,596

737

150,623(5,967)

144,657

19,1089,933

52

29,092

112

29,204

Other disclosure
Capital expenditure
Note:
Adjustments to segment profit before tax of (5,967) million yen for the year ended 31 March 2019 consist of elimination of intersegment transactions of (1) million yen, and profit or loss of the Company’s headquarter, the R&D department and overseas holding
companies (after elimination of dividend income from Group companies) of (5,966) million yen .
（Millions of Yen）
For the year ended 31 March
2020
Revenue from externalcustomers

Life Care

Information
Technology

Other

Total

Adjustments

Consolidated

375,049

196,7314,766

576,546－

Inter-segment sales

3

26

1,148

1,177

(1,177)

576,546－

Total

375,051

196,757

5,915

577,723(1,177)

576,546

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

529

944

11

1,484

1,967

3,452

(1,343)(23,845)(422)(9,548)(1)(494)(1,766)(33,888)

1,154
(486)

(612)
(34,374)(1,739)－(1,652)

69

17

－

86

(1)
(288,230)(300)(99,314)－(5,399)(300)(392,942)(2,849)(300)(395,791)

62,23088,13532

150,397(3,129)147,268

24,94428,93970

53,952

196

54,148Other disclosure
Capital expenditure- 36 -

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

Life Care

2020

Information

Other

Total

Adjustments

Consolidated－

Technology

Revenue from externalcustomers
Inter-segment sales

3,446,191
23

1,807,690
239

43,797
10,552

5,297,677
10,815(10,815)

5,297,677－

Total

3,446,214

1,807,929

54,3495,308,492(10,815)

5,297,677

4,859(12,344)8,678(3,874)102(12)

13,639(16,231)

18,076
10,60531,715(5,625)(219,107)(87,738)(4,535)(311,380)(4,468)(315,848)

638
(6)

155
(2,754)－－793(2,760)(15,975)－(15,182)(2,760)(2,648,440)(912,559)(49,606)(3,610,605)(26,179)(3,636,784)

571,814809,837297

1,381,948(28,755)

1,353,192

229,197

265,906

645

495,7481,801

497,549

Interest income
Interest expense
Depreciation and amortisation
Share of profit (loss) of
associates
Impairment losses
OthersSegment profit before tax
Other disclosure
Capital expenditure

Note:
Adjustments to segment profit before tax of (3,129) million yen ((28,755) thousand U.S. dollars) for the year ended 31 March 2020
consist of elimination of inter-segment transactions of 1 million yen (9 thousand U.S. dollars), and profit or loss of the Company’s
headquarters, the R&D department and overseas holding companies (after elimination of dividend income from Group companies) of(3,130) million yen ((28,765) thousand U.S. dollars).

- 37 -

(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 2019 and 2020:(Millions of Yen)

(Millions of Yen)

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

For the year ended

For the year ended

31 March 2019

31 March 2020

31 March 2020

Life Care
Health Care related products
Medical related products

281,613
91,775

277,798
97,2512,552,586
893,605

Life Care total

373,388375,0493,446,191

Electronics related products

146,623

162,655

1,494,580

Imaging related products
Information Technology total

40,92434,076313,109

187,546

196,731

1,807,690

4,875

4,766

43,797－－－565,810576,546

5,297,677

Information Technology

Other
Corporate (R&D)
Total revenue from externalcustomers(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 2019

For the year ended
31 March 2020

For the year ended
31 March 2020

Japan

163,821163,045

1,498,158

U.S.A.
Singapore

85,47342,47383,81654,656770,157
502,214China
South Korea

46,43927,09944,83531,702411,975
291,299

Others200,505

198,492

1,823,874

Total

565,810576,546

5,297,677

Note:Geographical areas are based on the location of the customers.
Non-current assets in China and South Korea are insignificant; therefore, the amount is included in Others.

- 38 -

Non-current assets(Millions of Yen)

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))For the year ended
31 March 2019

For the year ended
31 March 2020

For the year ended
31 March 2020

U.S.A.

67,02066,763

613,458

Japan
Thailand

26,816
19,51036,634
20,213

336,612
185,730

VietnamSingapore

10,272
6,844

17,434
17,210160,195
158,134

OthersTotal

68,46575,971

698,072

198,926

234,224

2,152,201

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 Thailand and Vietnam is insignificant; therefore, the amount is included in Others.
(5) Information about major customers
The Group has no revenue from transactions with a single external customer that amounts to 10% or more of revenue of the Group.

- 39 -

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

Buildings and Machinery
structuresand carriers

Tools,
equipment

Land

Construction Right-of-use
in progress
assetsTotal

and fixtures
Balance at 1 April 2018
Additions
Acquisitions through businesscombinations

101,448

283,897

63,872

9,576

5,955

－

464,749

938

1,489

2,639

－

22,694－27,759

566

439

406

48

382

－

1,841

Disposals (i)Transfer from construction in(3,037)(11,147)(4,238)

(479)

(118)

－

(19,019)

progress
Effect of foreign currency

1,490

8,649

1,141

0

(11,280)－－

exchange differences
Others

104
(92)

1,457
(2,097)(1,644)
2,289

49
39

87
(1,372)－－54(1,232)

101,418

282,687

64,465

9,233

16,348－474,150

(780)

(15)

(635)

－

－

25,90324,473

100,637

282,672

63,8299,233

16,34825,903498,624

543

1,797

2,495

－

42,026

5,925

52,786

Balance at 31 March 2019
Cumulative effect ofaccounting change
Restated balance at 1 April
2019
Additions
Acquisitions through businesscombinations

33

－

16

－

－

116

165

Disposals (i)Transfer from construction in(1,751)(8,004)(2,297)

(38)

(301)

(1,019)(13,410)

progress
Effect of foreign currency

3,198

16,526

1,949－(21,673)－－

exchange differences
Others(3,112)(597)(8,844)79(2,415)
1,009

(136)
(199)

(572)
986

(1,039)200(16,119)
1,478

Balance at 31 March 2020

98,951

284,225

64,5868,860

36,81530,087

523,524- 40 -

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

Tools,

Land

Construction Right-of-use

structuresand carriers

equipment
and fixturesin progress

Balance at 1 April 2018(66,738)(252,152)(39,339)(978)Depreciation expense
Impairment losses (ii)

(3,856)(51)(12,700)(370)(4,303)(360)

Disposals (i)Effect of foreign currency

2,824

9,910

4,058

exchange differences
Others122(267)(1,600)
2,516

1,518
(1,045)

Balance at 31 March 2019(67,966)(254,395)

416

Restated balance at 1 April
2019

Total

assets(49)－(359,256)

－

－

(128)

(113)

－
－

(20,858)(1,023)3

0－

16,795

－
21

(1)
4

－
－

38
1,229

(39,472)(1,082)(159)－(363,074)

10

346

－

－

(772)

－

(67,551)(254,385)(39,125)(1,082)

(159)

(772)

(363,074)

Depreciation expense(3,776)(13,869)(4,025)

－

(61)
584

(223)
7,382

(16)
2,072

－

(7,028)
－

35

0
－
－

(28,697)

Impairment losses (ii)
Disposals (i)

523

(300)
10,596

Effect of foreign currency
exchange differences

2,006

7,480

1,428

0

1

269

11,183Cumulative effect ofaccounting change

OthersBalance at 31 March 2020

324

(151)

(871)

(35)

115

(311)

(930)

(68,473)(253,767)(40,537)(1,082)(43)(7,320)(371,222)（Millions of Yen）
Carrying amount

Buildings and Machinery
structuresand carriers

Tools,
equipment

Land

Construction Right-of-use
in progress
assetsTotal

and fixtures
Balance at 1 April 2018

34,71031,74524,533

8,598

5,907

－

105,493

Balance at 31 March 201933,451

28,292

24,993

8,151

16,189－111,077

Balance at 31 March 2020

30,47830,45824,0497,778

36,772

22,767

152,302- 41 -

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

Buildings and Machinery

Tools,

Land

Construction Right-of-use

structuresand carriers

equipment
and fixtures

Balance at 31 March 2019

931,8902,597,510

592,342

84,841150,216－

4,356,799

Cumulative effect ofaccounting change(7,169)(135)(5,837)－－238,016

224,875

Restated balance at 1 April
2019

924,7212,597,375

586,505

84,841150,216

238,016

4,581,674

4,986

16,51322,926－386,166

54,445

485,036

Additions
Acquisitions through businesscombinationsin progressTotal

assets

300

－

148

－

－

1,065

1,513

Disposals (i)Transfer from construction in(16,088)(73,550)(21,109)(346)(2,761)(9,361)(123,216)

progress
Effect of foreign currency

29,384

151,848

17,910－(199,142)－－

exchange differences
Others(28,593)(5,482)(81,268)721(22,195)
9,272(1,253)(1,829)(5,254)
9,058(9,547)
1,838(148,110)
13,579Balance at 31 March 2020

909,227

2,611,640

593,456

81,413

338,283

276,457

4,810,476(Thousands of U.S. Dollars (Note 2))
Accumulated depreciation and Buildings and Machinery
impairment losses
structuresand carriers

Tools,
equipment

Land

Construction Right-of-use
in progress
assetsTotal

and fixtures
Balance at 31 March 2019

(624,519)(2,337,546)(362,692)(9,940)(1,458)－(3,336,156)

3,822

91

3,183

－

－

(7,095)－

Restated balance at 1 April
2019(620,698)(2,337,455)(359,509)(9,940)(1,458)(7,095)(3,336,156)

Depreciation expense
Impairment losses (ii)(34,698)(557)(127,433)(2,053)(36,980)
(150)

－
－

(1)
－

(64,578)－(263,691)(2,760)

Disposals (i)Effect of foreign currency

5,370

67,827

19,042

320

－

4,804

97,363exchange differences
Others

18,4292,975

68,732(1,390)13,118(7,999)

(1)
(320)

6
1,054

2,469
(2,857)102,753(8,537)

Balance at 31 March 2020

(629,178)(2,331,772)(372,479)(9,942)(400)(67,258)(3,411,028)

Cumulative effect ofaccounting change(Thousands of U.S. Dollars (Note 2))
Carrying amount

Buildings and Machinery
structuresand carriers

Tools,
equipment

Land

Construction Right-of-use
in progress
assetsTotal

and fixtures
Balance at 31 March 2020

280,049

279,868

220,977

71,471

337,883

209,200

1,399,448

Note:(i) Gain and loss arising from the sale or disposal of property, plant and equipment for the years ended 31 March 2019 and 2020, 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.

- 42 -

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.

The following are carrying amounts for property, plant and equipment under Right-of-use assets as at 31 March 2020( Lease assets offinance lease as at 31 March 2019, which were included in each corresponding amount) in the preceding table:(Millions of Yen）
Lease assets of finance lease

Buildings and structures Machinery and carriers

Balance at 31 March 2019

Tools, equipment and

5

－

Total

fixtures289

294(Millions of Yen）

Right-of-use assets

Tools,
Buildings and Machinery andequipment andstructures
carriers
fixtures

Land

Others

Total

Balance at 1 April 201919,238

1,008

1,006

3,869

10

25,131

Balance at 31 March 2020

17,244

947

918

3,654

5

22,767(Thousands of U.S. Dollars (Note 2))
Right-of-use assets

Tools,
Buildings and Machinery andequipment andstructures
carriers
fixtures

Land

Others

Total

Balance at 1 April 2019

176,771

9,263

9,246

35,54894

230,921

Balance at 31 March 2020

158,450

8,700

8,434

33,571

44

209,200- 43 -

7. Leases(Lessee)
As a lessee, the Group leases buildings mainly for offices and stores. Certain lease contracts include renewals or options andescalation 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).
The fiscal year ended 31 March 2019
① Finance lease obligations
Details of finance lease obligations are as follows:(Millions of Yen)
Present value of minimum

Minimum lease payments

lease payments

As at 31 March 2019

As at 31 March 2019

Amounts payable under finance leases:
Not later than one year

312

285

Later than one year but not later than five years

596

577

908

862

Total
Less future finance charges(46)

Present value of lease obligations

862

862

Less amount due for settlement within 12 months

285

Amount due for settlement after 12 months

577

The Group has not entered into any new finance lease contracts as part of its policy, except for cases when it concludes that it has anumber of advantages of having a lease arrangement in respect of cost reduction or the avoidance of the risk associated with productobsolescence. The average remaining lease term is approximately two to four years as at 31 March 2019.
②Operating lease arrangements
Details of minimum lease payments and contingent lease payments for the period under operating lease arrangements are as follows:(Millions of Yen)
For the year ended 31 March 2019
Minimum lease payments

8,972

Contingent rent

1,062
Total

10,034

The amounts above are included in the line item ‘Other expenses’ in the consolidated statement of comprehensive income.
Contingent rent, which is determined in rent contracts for stores at shopping malls, is the rent based on the stores’ sales amounts.
As at 31 March 2019, the maturity periods of the outstanding commitments under non-cancellable operating leases are as follows:(Millions of Yen)
As at 31 March 2019
Not later than one year

1,770

Later than one year but not later than five years

4,225

Later than five years

763
Total

6,758

Operating lease payments represent rentals payable by the Group for the land used for offices, buildings, etc. The average remaining
operating lease terms for those assets as at 31 March 2019, are 26 years and four years, respectively.

- 44 -

The fiscal year ended 31 March 2020
Details of expenses relating to leases are as follows:(Millions of Yen)

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

For the year ended 31 March 2020

For the year ended 31 March 2020

Buildings and structures

5,967

54,830Machinery and carriers

564

5,184

Tools, equipment and fixtures

354

3,249

Land

134

1,233

9

82

7,028

64,578Interest expense on lease liabilities

407

3,740

Expense relating to short-term leases

1,548

14,225

461

4,238

1,190

10,935

Depreciation of right-of-use assets

Software
Total

Expense relating to leases of low-value assets
Expense relating to variable lease payments (Note)(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 leaseliabilities is in ‘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 2020, total cash outflow for leases is 10,746 million yen (98,745 thousand U.S. dollars).
A maturity analysis of lease liabilities is set out in Note 21 “Financial instruments”- 45 -

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

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

For the year ended 31 March 2020

For the year ended 31 March 2020

45

415

Finance income on the net investment in the lease
A maturity analysis of the receivable under finance lease contracts is as follows:(Thousands of U.S. Dollars (Note(Millions of Yen)2))

As at 31 March 2020

As at 31 March 2020

Not later than one year

371

3,405

Later than one year but not later than two years

319

2,933

Later than two years but not later than three years

223

2,046

Later than three years but not later than four years

146

1,339

Later than four years but not later than five years

70

648

Later than five years

95

874

1,224

11,245

Unearned finance income

(66)

(605)

Net investment on the lease

1,158

10,641Total- 46 -

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

Goodwill

Intangible assets
SoftwareBalance at 1 April 2018
Additions
Acquisitions through businesscombinations
Disposals
Effect of foreign currency
exchange differences

Technology

Customer
related assets

Others (i)Total

40,596

21,91815,316

27,765

6,847

71,846

－

1,394

－

－

51

1,445

9,628
－

1
(1,090)

5,498
－

4,939
－

456
(10)

10,893(1,100)

659

43

(43)

51

577

253

77

526
－

(773)

68

(629)

51,13622,342

21,33931,887

7,462

83,031

－

1,288

4

－

70

1,362

28
－

－

－

1,473

－

1,473

(341)

(15)

(27)

(3)

(386)

exchange differences
Others(1,676)
(58)

(607)
510

(530)
(37)

(2,826)(107)(1,130)15(5,093)
381

Balance at 31 March 2020

49,43023,193

20,76230,4006,413

80,767

OthersBalance at 31 March 2019
Additions
Acquisitions through businesscombinations
Disposals
Effect of foreign currency（Millions of Yen）
Accumulated amortisation andGoodwill

impairment losses

Intangible assets
SoftwareTechnology

Customer
related assets

Others

Total

Balance at 1 April 2018

(8,704)(17,647)(4,390)(8,791)(4,155)(34,983)

Amortisation expense (ii)
Impairment loss (iii)－－(1,246)(76)(1,276)－(2,521)－(514)－(5,558)(76)

Disposals
Effect of foreign currency

－

1,016

－

－

－

1,016

exchange differences
Others

380
32

(23)
81

(153)
－

206
857

(83)
(8)

(52)
930

Balance at 31 March 2019(8,293)(17,896)(5,818)(10,249)(4,760)(38,723)

Amortisation expense (ii)
Impairment loss (iii)－－(1,136)－(1,575)－(2,460)－(504)－(5,676)－

Disposals
Effect of foreign currency

－

335

－

－

1

335

exchange differences
Others

909
35

459
(448)

141
59

1,880
18

1,008
(23)

3,488
(395)

(7,348)(18,687)(7,194)(10,811)(4,280)(40,971)

Balance at 31 March 2020

- 47 -

（Millions of Yen）
Carrying amount

Goodwill

Intangible assets
SoftwareTechnology

Customer
related assets

Others

Total

Balance at 1 April 2018

31,892

4,270

10,926

18,974

2,693

36,863

Balance at 31 March 201942,843

4,446

15,521

21,6392,702

44,308

Balance at 31 March 2020

42,082

4,506

13,567

19,5892,133

39,796(Thousands of U.S. Dollars (Note 2))
Cost

Goodwill

Intangible assets
SoftwareBalance at 31 March 2019Technology

Customer
related assets

Others (i)Total

469,869

205,296

196,079

293,00268,564

762,942

Additions
Acquisitions through business－

11,83241－

640

12,513

combinations
Disposals

258
－

－

－

－

(3,133)(137)

13,533(250)(29)

13,533(3,550)(15,397)(5,573)(4,870)(25,968)(10,387)(46,798)

Effect of foreign currency
exchange differences
OthersBalance at 31 March 2020

(536)

4,687

(343)

(985)

138

3,497

454,194

213,109

190,770279,332

58,925742,137(Thousands of U.S. Dollars (Note 2))
Accumulated amortisation andGoodwill

impairment losses

Intangible assets
SoftwareTechnology

Customer
related assets

Others

Total

Balance at 31 March 2019

(76,198)(164,444)(53,463)(94,172)(43,737)(355,816)

Amortisation expense (ii)
Impairment loss (iii)－(10,441)－(22,606)－－(4,635)－(52,157)－

3,076(14,474)
－
－

6

3,083

Disposals
Effect of foreign currency－－

exchange differences
Others

8,356
324

4,219
(4,115)

1,292
540

17,277
164

9,259
(216)

32,047(3,627)

Balance at 31 March 2020

(67,518)(171,705)(66,105)(99,337)(39,323)(376,470)- 48 -

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

Goodwill

Intangible assets
SoftwareBalance at 31 March 2020

386,677

Technology

Customer
related assets

124,665

179,996

41,405

OthersTotal

19,602

365,667

Note:(i) There were no significant internally generated intangible assets for the years ended 31 March 2019 and 2020.
(ii) Amortisation expense is included in the line item ‘Depreciation and amortisation’ in the consolidated statement of comprehensive
income.
(iii) Refer to Note 9 “Impairment losses” for details of impairment losses.
No intangible assets have been pledged as collateral to secure the debt. There is no restriction on legal title of these assets. Details ofcommitments for the acquisition of intangible assets are set out in Note 33 “Commitments for expenditure”.
Details of intangible assets in the consolidated statement of financial position are as follows:
As at 31 March 2019

As at 31 March 2020
Carrying amount

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

(Thousands of
U.S. Dollars

Remaining useful
lives (Years)(Note 2))

Technology

Health Care related
products

1,997

9

1,683

15,461

8

Medical related
products

13,353

10

11,772

108,166

9

13,676

11

12,368113,647

10

6,088

13

5,292

48,622

12

Health Care related
Customer related
assetsproducts
Medical related
products- 49 -

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)

(Millions of Yen)

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

For the year ended 31 March 2019

For the year ended 31 March 2020

For the year ended 31 March 2020

Buildings and structures

51

61

557

Machinery and equipment

370

223

2,053

Tools, equipment and fixtures

360

16

150

Land

128

－

－

Construction in progress

113

－

－

Total impairment losses onproperty, plant and equipment

1,023

300

2,760

Software76－－

Total impairment losses on
intangible assets

76

－

－

Total impairment losses

1,099

300

2,760

(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.
(2) Impairment losses on assets in business units
For the year ended 31 March 2019No impairment losses on assets were recognised in business units.
For the year ended 31 March 2020
No impairment losses on assets were recognised in business units.

- 50 -

(3) Impairment losses on idle assets
For the year ended 31 March 2019, the carrying amount of the related assets, which were not expected to be used in the future due tobusiness restructuring, was written down to the recoverable amount which was measured at fair value less related selling costs, and thecorresponding impairment loss was recognised.
Impairment losses were recognised as follows for the year ended 31 March 2019:(Millions of Yen)
Impairment lossesLife Care
Buildings and structures

35

Machinery and carriers
Tools, equipment and fixtures

105
360

Construction in progress
Software113
76
Total Life Care

690

Information Technology
Buildings and structures

16

Machinery and carriers

265

Total Information Technology

281

Corporate
Land

128
Total Corporate

128

Total

1,099

For the year ended 31 March 2020, the carrying amount of the related assets, which were not expected to be used in the future due tobusiness restructuring, was written down to the recoverable amount which was measured at fair value less related selling costs, and thecorresponding impairment loss was recognised.
Impairment losses were recognised as follows for the year ended 31 March 2020:

Life Care
Tools, equipment and fixtures(Millions of Yen)

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

Impairment losses

Impairment losses

1

6

1

6

Buildings and structures
Machinery and carriers

61
223

557
2,053

Tools, equipment and fixtures

Total Life Care
Information Technology

16

144

Total Information Technology

300

2,754

Total

300

2,760

- 51 -

(4) Goodwill allocated to cash-generating units
When the recoverable amount of the goodwill specifically associated with a cash-generating unit is lower than the carrying amount ofsuch goodwill, an impairment loss is recognised and the goodwill is written down to the recoverable amount. 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 5% to 19% 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 before tax, WACC) on which the recoverable amount is based would not cause the aggregate carrying amount to exceed theaggregate 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 2019

Life Care
Health Care related

Other

Medical related products

Other

Total

products
Eyeglass lenses
Japan
Americas
Europe

791

733

－

1,524

26,303
623

－
525
－

39,1281,950

242

12,824801－

27,96014,358

525

Asia
Total

Medical accessories

242
42,843（Millions of Yen）

As at 31 March 2020

Life Care
Health Care related

Other

Medical related products

Other

Total

products
Eyeglass lenses
Japan
Americas
Europe

733

－

1,582

25,444
551

－
504
－

38,425
1,823

252

12,981
769－

27,096

14,482

504

Asia
Total

Medical accessories
849

252
42,082(Thousands of U.S. Dollars (Note 2))
As at 31 March 2020

Life Care

Japan
Americas
Europe
Asia
Total

Other

Health Care related
products

Medical related products

Eyeglass lenses

Medical accessories

Other

Total

7,803

6,733

－

14,536

233,796
5,059

－
4,633
－

353,074
16,753

2,314

119,278
7,061－

248,972

133,072

4,633- 52 -

2,314
386,677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 2019

As at / for the year
ended 31 March 2020

As at / for the year
ended 31 March 2020

(1,113)(1,652)(15,182)

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

(16)

76

701

(1,129)349(1,576)
1,007(14,481)
9,250

Details of the Group’s major associates, which are not individually significant, are as follows:
Ownership interest (%)

Place of
Name of associate
AVANSTRATE, INC.

Principal activity incorporation andoperation

Segment

As at
31 March 2019As at
31 March 2020

Production andsale of glass

JAPAN

Corporate

46.6

46.6

INDIA

Corporate

24.3

24.3

substrate for thinfilm transistor(TFT) liquid
crystalEYE-Q VISION PRIVATE

Medical services

LIMITEDrelated toophthalmology

HTK LENTES OFTALMICASLTDASale of opticallens

BRAZIL

Life Care

37.6

37.6

JIASHAN CANDEO OPTICAL

Production and

CHINA

Information

49.0

49.0

GLASS CO., LTD.

sale of special
glass, such as

Technology

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 2019

As at / for the year
ended 31 March 2020

As at / for the year
ended 31 March 2020

608

6,392

58,736

8,002

14,394132,262

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

- 53 -

11. Deferred taxes and income taxes(1) Deferred taxes
Details of deferred tax assets and liabilities are as follows:（Millions of Yen）
Recognised
As at
1 April 2018

Recognised in
profit or loss

in othercomprehensive

Business
combinations

As at
31 March 2019

incomeTemporary differences
Enterprise tax payable
Write-down of inventories

573
1,033

(221)
345

Allowance for doubtful
accounts

588

149

Provisions
Accrued expenses

805
3,665

12
566

Unrealised profit on inventories
Depreciation and amortisation

2,521
1,349

666
88

546
3

Impairment losses
Exchange differences on

－

－

－
－

132
－

－

－

－
－

274
－

202
－

－
－

－
－

124

－

353
1,511
737
817
4,504
3,187
1,437
748
127

translating foreign operations
3,184(1,584)

(10)

－

1,590

Subtotal

14,267

223

114

406

15,010

Undistributed retained earnings(2,192)

(861)

－

－

(3,053)of subsidiaries
Depreciation and amortisation(6,154)

767
－

－
(135)

(3,001)－(8,389)

(164)

(421)

(23)

－

－

(444)

(8,932)

(117)

(135)

(3,001)(12,185)

2,716
8

(324)
21

－

－

－

－

2,392
29

Subtotal

2,724

(303)

－

－

2,421

Total

8,059

(197)

(21)

(2,595)

5,246

OthersFinancial assets measured atfair value through other(300)

comprehensive income
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.

- 54 -

（Millions of Yen）
Cumulative
As at
1 April 2019

effect ofaccounting

As at
1 April 2019change(Restated)

Recognised
Recognised inin other
As atprofit or loss comprehensive 31 March 2020
incomeTemporary differences
Enterprise tax payable
Write-down of inventories

353
1,511

Allowance for doubtful
accounts

737

Provisions
Accrued expenses

817
4,504

Unrealised profit on inventories
Depreciation and amortisation

3,187
1,437

Impairment losses
Exchange differences on

748
127

translating foreign operations
Lease obligations

－

－
－
－
－
－
－
－
－
－

353
1,511

340
(61)

737

(326)

817
4,504

330
(929)

3,187
1,437

(300)
690

748
127

(156)
75

(203)

592
－

2,772

－

－

2,772

－
－
－
－
－
－
－
－

693
1,450
411
1,147
3,575
2,887
2,126

1,590

2,772
－

1,590

951

22

2,563

Subtotal

15,0102,772

17,783615(181)

18,216

Undistributed retained earningsof subsidiaries(3,053)－(3,053)(799)－(3,852)

Depreciation and amortisation
Lease obligations(8,389)－(8,389)(2,948)70－－－(8,319)(2,948)Financial assets measured atfair value through other(300)(2,948)
－

(300)

299

(234)

(234)

Otherscomprehensive income
(444)

－

(444)

(242)

－

(686)

(12,185)(2,948)(15,134)

(672)

(234)

(16,040)

2,392
29

－

2,392
29

(477)
18

－

－

－

1,915
47

Subtotal

2,421

－

2,421

(459)

－

1,962

Total

5,246

(176)

5,070

(516)

(415)

4,139

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.

- 55 -

(Thousands of U.S. Dollars (Note 2))
Cumulative
As at
1 April 2019

effect ofaccounting

As at
1 April 2019change(Restated)

Recognised
Recognised inin other
As atprofit or loss comprehensive 31 March 2020
incomeTemporary differences
Enterprise tax payable
Write-down of inventories

3,240
13,882

Allowance for doubtful
accounts

6,771

Provisions
Accrued expenses

7,508
41,389Unrealised profit on inventories
Depreciation and amortisation

29,283
13,200

Impairment losses
Exchange differences on

6,873
1,170

translating foreign operations
Lease obligations

－
－
－
－
－
－
－
－
－

3,240
13,882

3,123
(558)

6,771

(2,996)

7,508
41,3893,031(8,536)29,283
13,200(2,754)
6,338

6,873
1,170

(1,430)693(1,863)

5,443－

25,475－－25,475

－
－
－
－
－
－
－
－

6,363
13,324
3,775
10,53832,853
26,52919,538

14,611

25,475－

14,611

8,736

200

23,546

Subtotal

137,926

25,475

163,401

5,647(1,663)

167,385

Undistributed retained earningsof subsidiaries(28,053)－(28,053)(7,342)－(35,395)

Depreciation and amortisation
Financial assets measured at(77,082)(2,752)－－(77,082)(2,752)

643
2,749

－
(2,149)(76,439)(2,153)－(27,090)(4,080)－(4,080)(27,090)－(2,228)－－(27,090)(6,308)(111,967)(27,090)(139,056)(6,178)(2,149)(147,383)

21,978264－

21,978264(4,383)
169

－

－

－

17,595432

Subtotal

22,242－

22,242(4,214)－18,027

Total

48,201(1,615)46,586(4,745)(3,812)38,029Others－fair value through othercomprehensive income
Lease obligations
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.

- 56 -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)

As at
31 March 2019As at
31 March 2020

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

Tax loss carryforwards
Deductible temporary differences
Total

As at
31 March 2020

13,1304,128

11,1204,226

102,179
38,82917,25815,346141,008

The 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 2019As at
31 March 2020

As at
31 March 2020

Year 1

1,890

1,329

12,216

Year 2
Year 3

1,750
1,134

611
820

5,614
7,535

Year 4

513
7,843

403
7,956

3,706
73,107

13,13011,120102,177

Year 5 or later
Total

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 2019 and 2020, were 322,017 million yen and 327,573 million yen (3,009,954
thousand U.S. dollars), respectively. No liability has been recognised in respect of these differences because the Group is in a position
to control the timing of the reversal of the temporary differences and it is probable that such differences will not reverse in theforeseeable future.

(2) Income taxes
In Japan, the normal effective statutory tax rates are 30.5% for each of the years ended 31 March 2019 and 2020.
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 2019

For the year ended
31 March 2020

For the year ended
31 March 2020

22,915(690)

31,948454

293,560
4,169

22,22532,402

297,729

318
41

252
27

2,314
251

Total deferred tax expense

359

279

2,566

Total income tax expense

22,58432,681

300,295

22,584－32,681－

300,295－

Current 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

Continuing operations
Discontinued operations

Note:(i) “Current tax expense” includes previously unrecognised tax benefits from tax loss carryforwards, tax credits and deductible
temporary differences. These benefits were 194 million yen and 15 million yen (142 thousand U.S. dollars) for the years ended 31
March 2019 and 2020, respectively.

- 57 -

(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 writedowns of deferred tax assets. These effects increased the deferred tax expense by 471 million yen and 660 million yen (6,061 thousand
U.S. dollars) for the years ended 31 March 2019 and 2020, respectively.
(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 of transactions with overseas subsidiaries that develop and manufacture electronicsrelated 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 cancels
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 (72,740 thousand U.S. dollars) is included in “Other current assets” asa suspense payment.
On 27 June 2018, the Company received a reassessment notice from TRTB for additional taxes on the transfer pricing taxation oftransactions with overseas subsidiaries that developed and manufactured 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 inaccordance with the relevant law. The additional tax assessment of 5,174 million yen (47,544 thousand U.S. dollars) is 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

For the year ended

31 March 2019

31 March 2020

Effective statutory tax rate

30.5%

30.5%

Expenses not deductible for tax purposes
Income not taxable for tax purposes

0.5%(3.1)%

1.1%(0.6)%

Effect of unrecognised deferred tax assets
Impact of different tax rates applied to overseas subsidiaries

0.3%(15.2)%

0.1%(12.0)%

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

0.2%

0.1%

rate
Tax rate difference due to the elimination of unrealised profit on inventories

0.0%
0.2%

(0.0)%(0.2)%

Increase/decrease in deferred tax liabilities related to undistributed earnings of foreignsubsidiaries

0.6%

0.5%

Prior year income taxes
Foreign withholding tax arising from dividends from subsidiaries(0.5)%
1.0%

0.3%
0.0%

Others

1.1%

2.4%

Actual tax rate

15.6%

22.2%

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

- 58 -

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 2019As at
31 March 2020

As at
31 March 2020

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

17,37029,863

16,49030,789151,518
282,906

Total

47,23347,278434,424

Total non-current assets (long-term financial
assets)44,10345,975422,448

Total current assets (other short-term financial
assets)

3,131

1,303

11,976(Millions of Yen)

(Millions of Yen)

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

As at
31 March 2019
Other financial liabilities
FVTPL financial liabilities
Other financial liabilities measured at amortised
cost
Total
Total non-current liabilities (other long-term
financial liabilities)

As at
31 March 2020

As at
31 March 2020

3,082

542

4,976

8,500

26,205

240,785

11,582

26,746

245,761

10,93623,923219,817

646

2,824

25,944

Total current liabilities (other short-term financial
liabilities)(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 2019

As at 31 March 2020

As at 31 March 2020

27,00028,200259,123

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

- 59 -

(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 2019and 2020 are as follows:
Fair value(Millions of Yen)

Cumulative gain or loss

(Millions of Yen)

(Thousands of U.S.

(Millions of Yen)

(Millions of Yen)

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

For the year ended
31 March 2019

For the year ended
31 March 2020

For the year ended
31 March 2020

For the year ended
31 March 2019

For the year ended
31 March 2020

For the year ended
31 March 2020

11

357

3,280

6

88

804

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 6
million yen and 61 million yen (559 thousand U.S. dollars) in the year ended 31 March 2019 and 2020.
Details of dividends income recognised from equity instruments are as follows:
Derecognised investment

Investment held as at 31 March 2020

(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 2019

For the year ended
31 March 2020

For the year ended
31 March 2020

For the year ended
31 March 2019

For the year ended
31 March 2020

For the year ended
31 March 2020

0

－

－

10

10

92

- 60 -

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 2019

As at 31 March 2020

As at 31 March 2020

Long-term prepaid expenses
Others

2,187
773

412
274

3,784
2,513

Total

2,960

685

6,297

Suspense payment (Note)

13,09013,090120,283

Prepaid expenses
Refundable consumption taxes

4,131
1,406

2,368
1,457

21,762
13,383

Non-current: Other assets

Current: Other assets

Others
Total

2,319

2,992

27,48820,946

19,907

182,918(Millions of Yen)

(Millions of Yen)

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

As at 31 March 2019

As at 31 March 2020

As at 31 March 2020

2,303

1,363

12,526

2,303

1,363

12,526

Accrued salary/bonus/vacation pay
Other accrued expenses

16,357
17,793

15,894
16,504

146,040
151,653

Advance received/deferred revenue
Accrued consumption taxes

5,356
1,897

4,140
1,536

38,042
14,115

Others

2,769

2,107

19,35944,17140,181

369,209

Non-current: Other liabilities
Deposit received and long-term advancerevenue, etc.
Total
Current: Other liabilities

Total
Note:

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 of transactions with overseas subsidiaries that develop and manufacture electronicsrelated 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 partiallycancels the reassessments. The Company disagrees with the remaining findings of the Tribunal’s verdict that maintains portionsof 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 7,916 million yen is included in “Other current assets” as a suspense payment.
On 27 June 2018, the Company received a reassessment notice from the TRTB for additional taxes on the transfer pricing
taxation of transactions with overseas subsidiaries that developed and manufactured electronics-related products for the threefinancial years ended 31 March 2012, 2013 and 2014. The Company has lodged an objection with TRTB seeking withdrawal of
the assessment in accordance with the relevant law. The additional tax assessment of 5,174 million yen is included in ‟Other
current assets” as a suspense payment.

- 61 -

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 2019

As at 31 March 2020

As at 31 March 2020

Goods and products

40,33039,042358,744

Work in progress
Raw materials

8,566
18,953

7,791
18,506

71,586
170,048

Supplies

11,124

12,791

117,532

78,97378,130717,910

7

4

35

Total
Inventories expected to be soldafter more than 12 months

The cost of inventories recognised as an expense during the years ended 31 March 2019 and 2020, was 250,891 million yen and252,630 million yen (2,321,324 thousand U.S. dollars), respectively.
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

For the year ended

For the year ended

31 March 2019

31 March 2020

Amount of write-down

31 March 2020

1,756

1,960

18,008－－－Amount of reversal of writedown

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
Notes receivable andelectronically recordedmonetary claims-operating
Other receivables(Millions of Yen)

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))As at 31 March 2019

As at 31 March 2020

As at 31 March 2020

104,305

97,422895,180

6,908

5,694

52,322

2,694

3,078

28,280Allowance for doubtful accounts(3,061)(2,855)(26,235)

Total

110,847

103,339

949,547

The credit terms for customers are set between 90 days and 120 days on average.
Refer to Note 21 “Financial instruments” for credit risk management and fair value of trade and other receivables.

- 62 -

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

Yen)

Yen)

U.S. Dollars(Note 2))As at 31 March As at 31 March As at 31 March
2019
2020
2020
Long-term bank loans (excluding current portion)
Current portion of long-term bank loans
Short-term bank loans
Long-term lease obligations
Short-term lease obligations
Total interest-bearing debt

Averageinterest rate

327

234

2,154

－

1
1,648

19
864

175
7,941

－

577
285

14,2376,610

130,823
60,741

2,838

21,966

201,834

Total non-current debt

904

14,472

132,977

Total current debt

1,934

7,494

68,857

Due

(%)
(i)

1.48%
－
－

2022-2032－－
2022‐2049－

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 2020.
Details of the remaining contractual maturity for long-term borrowings and its fair values are set out in Note 21 “Financial
instruments”.

- 63 -

The changes in liabilities arising from financial activities are as follows:(Millions of Yen)
Non-cash changes
Exchange
As at 1 April 2018

Cash flow

Change of scopeof consolidationdifferences ontranslation of

As at 31 March2019

Othersforeign operations
Short-term bank
loans

1,658

－

－

(10)

－

1,648

Long-term bank
loans

9

(20)

340

(0)

－

328

Bond

14

(14)

－

－

－

－

Finance leaseobligations

672

(251)

－

(35)

476

862

Total

2,353

(284)

340

(46)

476

2,838
(Millions of Yen)

Non-cash changes
As at 1 April
2019

Change inaccounting

As at 1 April
2019

policy(IFRS 16)

(afteradjustment)

Exchange
Cash flow

differences ontranslation of

As at 31 March2020

Othersforeign
operations

Short-term bank
loans

1,648

－

1,648

(775)

(9)

－

864

Long-term bank
loans

328

－

328

(134)

59

－

253

Lease obligations

862

21,37522,237(7,547)

(630)

6,787

20,848

Total

2,838

21,37524,214(8,456)

(579)

6,787

21,966(Thousands of U.S. Dollars (Note 2)

Non-cash changes
As at 1 April
2019

Change inaccounting

As at 1 April
2019

policy(IFRS 16)

(afteradjustment)

Cash flow

Exchangedifferences ontranslation offoreign

As at 31 March2020

Othersoperations
Short-term bankloans

15,143－

15,143(7,123)

(79)

－

7,941

Long-term bank
loans

3,015

－

3,015

(1,231)

545

－

2,329

Lease obligations

7,922

196,410204,332(69,346)(5,789)62,367

191,564

Total

26,080196,410

222,490(77,700)(5,323)62,367

201,834- 64 -

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 2019

As at 31 March 2020

As at 31 March 2020

6,610
(3,907)

7,036(3,889)64,651(35,736)

2,704
66

3,147
56

28,915
513

2,770

3,203

29,428

2,770
－

3,203
－

29,428－Present value of funded defined benefit obligation
Fair value of plan assets
Total
Effect of changes to the asset ceiling
Net liability arising from defined benefit plansobligations
Balance in the consolidated statement of financial
position
Liability
Asset (Other non-current assets)- 65 -

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

For the year ended

For the year ended

For the year ended

31 March 2019

31 March 2020

31 March 2020

(Note 2))Service cost
Current service cost

626
－

1,192

10,954

36

(274)
47

(2,514)
432

662

966

8,872

Return on plan assets
Actuarial gains and losses arising from

138
(8)

81
(24)

743
(216)

changes in demographic assumptions
Actuarial gains and losses arising from

158

(105)

(964)

changes in financial assumptions
Actuarial gains and losses arising from

(58)

102

934

experience adjustments
Adjustments for restrictions on the

61

(5)

(42)

defined benefit asset
Components of defined benefit costs

293

50

456

955

1,015

9,328

Past service cost
Net interest expense
Components of defined benefit costs
recognised in profit or loss
Remeasurement of net defined benefit
liability

recognised in other comprehensive
income
Total

Service cost and net interest expense are included in ‘Employee benefits expense’ and ‘Finance cost’ 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 2019

For the year ended
31 March 2020

For the year ended
31 March 2020

Beginning balance

6,033

6,610

60,738Current service cost
Interest cost

626
125

1,192
116

10,954
1,065

Remeasurement (gains)/losses
Actuarial gains and losses arising from

(8)

(24)

(216)

changes in demographic assumptions
Actuarial gains and losses arising from

158

(105)

(964)

changes in financial assumptions
Actuarial gains and losses arising from

(58)

102

934

experience adjustments
Past service cost

－

(274)

(2,514)

Decrease due to settlements
Benefits paid

－
(267)

(12)
(190)

(111)
(1,743)1(380)(3,492)

6,610

7,036

64,651

Effect of foreign currency exchange
differences
Ending balance
Movements in the present value of the plan assets are as follows:- 66 -

(Millions of Yen)

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))For the year ended
31 March 2019

For the year ended
31 March 2020

For the year ended
31 March 2020

Beginning balance

3,906

3,907

35,896

Interest income

89

69

632

Return on plan assets (excluding amounts
included in net interest expense)

(138)

(81)

(743)

Contributions from the employer
Benefits paid

344
(210)

283
(212)

2,603
(1,950)Effect of foreign currency exchange
differences

(84)

(76)

(703)

Ending balance

3,907

3,889

35,736

Remeasurement gain (loss)

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

For the year ended

For the year ended

31 March 2019

31 March 2020

31 March 2020

Beginning balance

－

66

606

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

61

(5)

(42)

differences
Ending balance

5

(6)

(51)

66

56

513

Remeasurement gain (loss)

The fair values of major categories of plan assets as at 31 March 2019 and 2020, are as follows:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S. Dollars

As at 31 March 2019

As at 31 March 2020

As at 31 March 2020

(Note 2))
Cash and cash equivalents

959

1,240

11,397

1,966

1,768

16,244

Debt instruments - Foreign governmental
bonds

181

167

1,539

Debt instruments - Foreign bonds
Others

779
20

688
25

6,324
232

3,907

3,889

35,736Equity instruments - Foreign equity
instruments

Total

The 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 2019
Discount rate

As at 31 March 2020
2.3%

2.4%

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

- 67 -

(2) Defined contribution plans
The total expense recognised was 2,416 million yen and 2,371 million yen (21,787 thousand U.S. dollars) for the years ended 31
March 2019 and 2020, respectively.
(3) Severance payments
Under certain circumstances (such as retirement before the predetermined retirement date), additional payments are made uponretirement. The total expense recognised was 1,924 million yen and 1,770 million yen (16,264 thousand U.S. dollars) for the years
ended 31 March 2019 and 2020, respectively.

- 68 -

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 2019

As at 31 March 2020

As at 31 March 2020

Asset retirement obligation

2,620

2,559

23,512Warranties provision

1,249

1,214

11,157

3,868

3,773

34,669Total
Non-current liabilities

2,607

2,539

23,327

Current liabilities

1,261

1,234

11,342An analysis of the change in provisions is as follows:(Millions of Yen)
Asset retirement obligation

Warranties provision

Total

Balance at 1 April 2019

2,620

1,249

3,868

Provision for the year

77

908

Acquisitions through business combinations
Interest cost associated with passage of time

20
18

832
－
－

Reduction resulting from settlement for the year
Effect of foreign currency exchange differences

(146)
(28)

(822)
(44)

(968)
(73)

Balance at 31 March 2020

2,559

1,214

3,773

20
18

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

Warranties provision

Total

Balance at 1 April 201924,07011,47335,542

Provision for the year

705
182

7,642
－

8,347
182

Interest cost associated with passage of time
Reduction resulting from settlement for the year161
(1,343)－161(8,896)

Effect of foreign currency exchange differences

(262)

(405)

(667)

Balance at 31 March 2020

23,512

11,157

34,669Acquisitions through business combinations(7,553)

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

- 69 -

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 2019

As at 31 March 2020

As at 31 March 2020

Accounts payable

29,871

31,296

287,571

Notes payable, trade
Processing cost payable

6,903
849

5,943
830

54,605
7,629

Other payables
Notes payable for capital investment

16,823442

23,968858

220,232
7,885

Total

54,88762,895577,922

Trade notes payable are due 120 days on average.
Accounts payable are due 30 to 60 days from the invoice date in Asia except for Japan, and due 90 to 120 days from the invoice datein Japan. Accounts payable in Europe and U.S.A. are mainly payables related to intragroup transactions; thus, upon consolidation,these trade accounts payable are eliminated. The Group arranges cash pooling for Japan, Europe and U.S.A. to ensure that all payables
are paid within the pre-agreed credit terms.

- 70 -

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

Number of issued

Number of

Share capitalauthorised sharessharesoutstanding shares(Ordinary shares (Ordinary shares (Ordinary shares (Millions ofwith no par value） with no par value） with no par value）
Yen)

CapitalShare capital

Capitalreserves
reserves(Millions of (Thousands of (Thousands of
Yen)

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

Balance at
1 April 2018

1,250,519,400

381,436,420

379,514,346

6,264

15,89957,560146,087

Increase (ii)－－453,257

－

－

－

－

31 March 2019

1,250,519,400

381,436,420

379,967,603

6,264

15,89957,560146,087

Decrease (i), (ii)－

3,085,200

4,967,819

－

－

－

－

1,250,519,400

378,351,220

374,999,784

6,264

15,89957,560146,087

Balance atBalance at
31 March 2020

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 2018

1,922,074

10,886

347
(4)

2
(0)

Decrease on exercise of stock options(453,600)(2,569)Balance at 31 March 2019

1,468,817

8,319

Repurchase of odd-lot shares
Disposal of odd-lot shares

Repurchase of treasury shares

5,295,700

44,256

Cancellation of treasury shares
Repurchase of odd-lot shares(3,085,200)
519(22,308)5

Decrease on exercise of stock options(328,400)(2,309)Balance at 31 March 2020

3,351,436

27,963- 71 -

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

Balance at 31 March 2019

1,468,817

76,441

Repurchase of treasury shares
Cancellation of treasury shares

5,295,700(3,085,200)

406,656(204,982)

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

519(328,400)

45(21,214)

Balance at 31 March 2020

3,351,436

256,945② Other capital reserves
Gain (loss) on
disposal of treasury

Stock option (i)OthersTotalshares(Millions of Yen)

(Millions of Yen)

(Millions of Yen)

(Millions of Yen)

Balance at 1 April 2018

(8,672)

3,114(1,102)(6,660)

Disposal of treasury shares

(600)
－

(370)

－

(969)

Share-based payments (i)

195

－

195

Balance at 31 March 2019(9,272)

2,940(1,102)(7,434)

Repurchase of treasury shares

－

－

(22)

Disposal of treasury shares
Share-based payments (i)

(771)
－

(1,032)
125

－

(261)
125
－

(22)
－
－
(65)

(65)

(10,043)

2,804(1,189)(8,428)Change in non-controlling interests (ii)
Balance at 31 March 2020

Gain (loss) on
disposal of treasury

Stock option (i)Others

Total(Thousands of U.S.

(Thousands of U.S.

(Thousands of U.S.

(Thousands of U.S.

Dollars (Note 2))

Dollars (Note 2))

Dollars (Note 2))

Dollars (Note 2))(85,197)

27,012(10,126)(68,311)－－(7,082)
－

(203)
－
－

(9,483)
1,153－(2,400)1,153－(92,280)

25,764

sharesBalance at 31 March 2019
Repurchase of treasury shares
Disposal of treasury shares
Share-based payments (i)Change in non-controlling interests (ii)
Balance at 31 March 2020

(203)

(597)

(597)

(10,926)(77,442)(i) Refer to Note 22 “Share-based payments” for details of stock options.
(ii) The Group acquired 5.0% of outstanding shares in HOYA LENS GUANGZHOU LTD. As a result, the ownership interest of theGroup increased to 100%. 65 million yen (597 thousand U.S. dollars), the difference between the decrease of non-controlling interests(i.e., proportional interests of the carrying amount of the net assets) and the consideration paid for the shares is included in ‘Other
capital reserves’ in the consolidated statement of financial position.

- 72 -

(3) Retained earnings and dividends
Amount(Millions of Yen)
Balance at 1 April 2018

529,818

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

122,103(34,164)

Transfer to retained earnings(297)

Balance at 31 March 2019

617,459

Cumulative effect of change in accounting policy

533

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

114,406(22,308)

Dividends
Transfer to retained earnings from other comprehensive income(34,064)
32

Balance at 31 March 2020

676,058
Amount(Thousands of U.S. Dollars (Note 2))

Balance at 31 March 2019

5,673,614

Cumulative effect of change in accounting policy
Profit for the year (attributable to owners of the Company)

4,895
1,051,239

Cancellation of treasury shares
Dividends(204,982)(313,006)

Transfer to retained earnings from other comprehensive income

296

Balance at 31 March 2020

6,212,056

Details of dividends are as follows:
Dividends per
Date of resolution

share
(Yen)

Dividends per
share(U.S. Dollars(Note 2))

Total dividends(Millions of
Yen)

Total dividends(Thousands of
U.S. Dollars

Record date

Effective date

(Note 2))24 May 2018

45

0.41

17,078

156,925

31 March 2018

1 June 2018

31 October 2018

45

0.41

17,086

157,000

30 September 2018

30 November 201823 May 2019

45

0.41

17,099157,11231 March 20193 June 201929 October 2019

45

0.41

16,966

155,894

30 September 201929 November 201920 May 2020

45

0.41

16,875155,058

31 March 2020

8 June 2020

Dividends payable are included in the line item ‘Other short-term financial liabilities’ in the consolidated statement of financial
position.

- 73 -

(4) Non-controlling interests
Amount(Millions of Yen)
Balance at 1 April 2018

4,484

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

(31)
(140)

Dividends
Increase due to acquisition of subsidiaries

(30)
202

Increase

67

Balance at 31 March 2019

4,552

Profit for the year, attributable to non-controlling interests

181

Other comprehensive income
Increase due to establishment of subsidiaries

(220)
187

Decrease due to acquisition of non-controlling interests
Put option granted to non-controlling interests, etc.(i)(84)(20,392)

Balance at 31 March 2020

(15,777)
Amount(Thousands of U.S. Dollars (Note 2))

Balance at 31 March 201941,824

Profit for the year, attributable to non-controlling interests

1,659

Other comprehensive income
Increase due to establishment of subsidiaries(2,019)1,715

Decrease due to acquisition of non-controlling interests
Put option granted to non-controlling interests, etc.(i)(775)(187,372)

Balance at 31 March 2020

(144,968)(i) The Group recognised a financial liability at the present value of the expected future payment for the acquisition of additional
shares of the joint venture which was established in this fiscal year based on the contract with the non-controlling shareholder.

- 74 -

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

As at

As at

31 March 2019

31 March 2020

31 March 2020

Interest-bearing debt

2,838

21,966

201,834

Less: Cash and cash equivalents

293,397

317,982

2,921,820

Net debt(290,559)(296,016)(2,719,986)

Equity627,707629,265

5,782,090

In order to maximise the corporate value of the Group, cash flows have been a priority of the Group management. As at 31 March
2019 and 2020, 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 2020.
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”.

- 75 -

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

(Millions of Yen)

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

As at

As at

As at

31 March 2019

31 March 2020

31 March 2020

Financial assets
Financial assets measured at amortised cost
Trade and other receivables

110,847

103,339

949,547

Other financial assets (ii)17,37016,490151,518

29,863
293,397

30,789317,982

282,906
2,921,820

1,186
3,082

3,460
542

31,792
4,976

FVTOCI financial assets (iv)
Other financial assets (ii)Cash and cash equivalents
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)

53,701

59,435546,131

2,838
8,500

21,966
26,205201,834
240,785

Note:(i) The items above are not included in discontinued operations and 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 fairvalue 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 offinancial 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 2019 and 2020, 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.

- 76 -

(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.
On the other hand, 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 theCompany and/or other group companies, the Group’s foreign currency-dominated balances in receivables, liabilities and/or bankdeposits 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 2019

For the year ended 31 March 2020

Average exchange rate
(Yen per each currency)
Thai Baht

3.43

3.51

128.26110.07120.85108.95

Thai Baht
Euro

(227)
(9)

(202)
(50)

U.S. dollar

(414)

(325)

Thai Baht
Euro

(353)
(330)

(294)
(380)

U.S. dollar

(649)

(581)

Euro
U.S. dollar
Impact on profit for the year
(Millions of Yen)

Impact on equity(Millions of Yen)

For the year ended 31 March 2020
Impact on profit for the year
(Thousands of U.S. Dollars (Note 2))
Thai Baht（1,858)Euro
U.S. dollar(458)(2,985)

Impact on equity(Thousands of U.S. Dollars (Note 2))
Thai Baht
Euro(2,702)(3,494)

U.S. dollar(5,335)- 77 -

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 2019

U.S. dollar
31 March 2020

31 March 2019

31 March 2020

Trade and other receivables
Trade and other payables

(26)
2

(28)
1

(70)
10

(74)
13

Short-term financial assets
Short-term interest-bearing debt

(0)
－

(0)
－

(0)
128

(0)
－

Cash and cash equivalents

(12)

(3)

(108)

(51)

(36)

(29)

(40)

(113)

Total

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

U.S. dollar

31 March 2020
Trade and other receivables
Trade and other payables

31 March 2020

(254)
14

(681)
116

Short-term financial assets
Short-term interest-bearing debt

(0)
－

(1)
－

Cash and cash equivalents

(25)

(472)

(265)

(1,038)

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 2019
Cash and cash equivalents
Total

U.S. dollar
31 March 2020

31 March 2019

31 March 2020

(3)

(0)

(1)

(35)

(3)

(0)

(1)

(35)

- 78 -

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

U.S. dollar

31 March 2020

31 March 2020

Cash and cash equivalents
Total

(0)

(318)

(0)

(318)

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.
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 2019

Average
Foreignexchange rate currency (mil)Notional
amountFair value

Forward foreign exchange contracts
N/A(Millions of Yen)

For the year ended
31 March 2020

Average

Foreignexchange rate currency (mil)Forward foreign exchange contracts
N/A- 79 -

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

Notional
amountFair value② Interest rate risk management
The majority of the interest-bearing debt consists of bonds with fixed interest rates. The Group’s cash and cash equivalents exceed theinterest-bearing debt, and currently, the impact of interest expense on the Group’s profit/loss is immaterial. Therefore, the Groupconsiders 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 75 million
yen and 51 million yen (463 thousand U.S. dollars) as at 31 March 2019 and 2020, respectively, as a result of changes in fair value ofthe equity instruments.

- 80 -

(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. On the other hand, credit losses were incurred on a sporadic basis in the Life Care business as those products
were sold to relatively 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 andoperates 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 2020.
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 not reasonably expected, entirely or partially.

- 81 -

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 2019
Total

Overdue amounts

Within due
dateWithin 30days

31 to 60 days 61 to 90 days

91 to 120

Over 120

days

days

Trade and other receivables(gross)Allowance for doubtful accounts

113,908(3,061)

97,373
(431)

8,185
(76)

2,742
(99)

1,035
(89)

647
(253)

3,926
(2,114)

Trade and other receivables (net)

110,847

96,942

8,109

2,643

946

394

1,812

Other financial assets (gross)
Allowance for doubtful accounts

18,099(729)

17,309
(2)

1
－

5
(5)

78
(78)

130
(130)

575
(513)

Other financial assets (net)

17,37017,307

1

－

－

－

61

(Millions of Yen)
Balance at 31 March 2020
Total

Within due
date

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

Over 120days

Trade and other receivables(gross)Allowance for doubtful accounts

106,194(2,855)89,830
(518)

7,709
(154)

2,482
(135)

1,099
(105)

1,077
(262)

3,997
(1,682)

Trade and other receivables (net)103,339

89,312

7,555

2,347

994

815

2,316

Other financial assets (gross)

16,88916,449
(2)

－
－

－
－

439

(399)

－
－

1

Allowance for doubtful accounts

(1)

(396)

Other financial assets (net)16,49016,447

－

－

－

－

43

(Thousands of U.S. Dollars (Note 2))
Balance at 31 March 2020
Total

Within due
date

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

Over 120days

Trade and other receivables(gross)975,783

825,418

70,83422,808

10,102

9,892

36,729Allowance for doubtful accounts(26,235)(4,759)(1,413)(1,239)(966)(2,406)(15,453)

Trade and other receivables (net)949,547820,658

69,422

21,569

9,136

7,486

21,276

Other financial assets (gross)

155,188

151,143
(19)

－
－

4,032

(3,670)－－13

Allowance for doubtful accounts

－
－

(13)

(3,638)Other financial assets (net)151,518

151,124

－

－

－

－

394

The Group does not hold any collateral or other credit enhancements on the above financial assets, excluding the following:
As at 31 March 2019
Current portion of long-term loans to subsidiaries and affiliates of 8,248 million yen
As at 31 March 2020
Long-term loans to subsidiaries and affiliates of 8,454 million yen (77,685 thousand U.S. dollars)
Details of collaterals are described in Note 30 “Related party disclosures”.

- 82 -

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

Loss allowance at an amount equal to

Total

allowance at
an amountNon-credit-

lifetime expected credit losses
Credit-Trade andequal to 12month

impairedfinancial

impairedfinancialotherreceivables

expected
credit losses

assetsassetsBalance at 1 April 2018

－

258

316

2,970

3,544

Provision for the year

－

－

246

636

882

Reduction resulting from settlement for the year

－

(3)

(6)

(254)

(264)

Reduction for the year (reversal)

－

(25)

(45)

(145)

(215)

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

－

(11)

(1)

(145)

(157)

Balance at 31 March 2019

－

219

509

3,061

3,790

(Millions of Yen)
Loss

Loss allowance at an amount equal toallowance at
an amountlifetime expected credit losses
Non-credit-

Credit-Trade andequal to 12month

impairedfinancial

impairedfinancialotherreceivables

expected
credit losses

assetsassets

Total

Balance at 1 April 2019

－

219

509

3,061

3,790

Provision for the year

－

－

6

626

632

Reduction resulting from settlement for the year

－

(185)

(70)

(495)

(751)

Reduction for the year (reversal)

－

－

(70)

(133)

(203)

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

－

(7)

(3)

(203)

(214)

Balance at 31 March 2020

－

27

372

2,855

3,255

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

Loss allowance at an amount equal toallowance at
an amountlifetime expected credit losses

equal to 12month
expected
credit losses

Non-credit-

Credit-Trade and

impairedfinancial

impairedfinancialotherreceivables

assetsassetsBalance at 1 April 2019－

Provision for the year

－

－

58

5,754

5,812

Reduction resulting from settlement for the year－

(1,701)(646)(4,549)(6,896)

Reduction for the year (reversal)

－

－

(640)

(1,226)(1,866)

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

－

(63)

(31)

(1,869)(1,964)

Balance at 31 March 2020

－

251

3,420

26,23529,906- 83 -

2,015

4,679

28,126

Total

34,821

(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 2019

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 (excluding

54,887327

54,887327

54,887
－

－

－

－

－

－

52

19

19

19

216

current portion)
Current portion of long-term bank

1

1

1

－

－

－

－

－

1,648
－

loans
Short-term bank loans

1,648

1,648

Long-term lease obligations
Short-term lease obligations

577
285

577
285

Other financial liabilities

11,582
69,308

Total

－

－

－

－

－

285

259
－

187
－

105
－

26
－

－
－

11,582

646

8,875

1,933

129

－

－

69,30857,467

9,186

2,139

254

46

216

(Millions of Yen)
Balance at 31 March 2020
Non-derivative liabilities
Trade and other payables

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
62,89562,895

－

－

－

－

－

234

62,895－Long-term bank loans (excluding
current portion)

234

38

19

19

19

140

Current portion of long-term bank
loans

19

19

19

－

－

－

－

－

Short-term bank loans
Long-term lease obligations

864
14,237864
14,909

864
－

－

－

－

－

－

Short-term lease obligations
Other financial liabilities

6,610
26,746

6,610
29,709

6,610
2,824

5,170
－

3,398
－

2,169
－

2,863
－

2,922

522

4,125

1,309
－
－

19,318111,607

115,242

73,212

8,129

3,939

6,312

1,328

22,321

Total- 84 -

(Thousands of U.S. Dollars (Note 2))
Balance at 31 March 2020
Non-derivative liabilities
Trade and other payables

Carrying Contractual Less than 1 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years More than 5amountcash flows

year

years

577,922577,922

－

－

－

－

2,154

2,154

577,922－－Long-term bank loans (excluding
current portion)

347

172

172

172

1,288

Current portion of long-term bank
loans

175

175

175

－

－

－

－

－

Short-term bank loans
Long-term lease obligations

7,941
130,823

7,941
136,992

7,941－

Short-term lease obligations
Other financial liabilities

60,741
245,761

60,741
272,989

60,741
25,944

1,025,517

1,058,914

672,723

Total

－

－

－

－

－

47,501－

31,227－

19,928－26,308－26,846

4,796

37,90012,028－－

177,50274,69436,19658,00012,199205,098

Note:
Guarantee liabilities have been excluded from the above table as the likelihood of execution has been determined as low.
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:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S. Dollars

As at 31 March 2019

As at 31 March 2020

As at 31 March 2020

(Note 2))
Bank overdraft
Used
Unused
Total

－

－

－

65,00065,000597,262

65,00065,000597,262－－－

50,00050,000459,432

50,00050,000459,432

Commercial paper
Used
UnusedTotal- 85 -

(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 2019

Level 1

Level 2

Level 3Total

FVTOCI financial assets

1,499

－

28,36429,863

Total

1,499

－

28,36429,863

FVTPL financial liabilities

－

－

4,268

4,268

Total

－

－

4,268

4,268
(Millions of Yen)

As at 31 March 2020

Level 1

Level 2

Level 3Total

FVTOCI financial assets

1,028

－

29,76130,789

Total

1,028

－

29,76130,789FVTPL financial liabilities

－

－

4,001

4,001

Total

－

－

4,001

4,001

(Thousands of U.S. Dollars (Note 2))
As at 31 March 2020

Level 1

Level 2

Level 3Total

FVTOCI financial assets

9,444

－

273,462

282,906

Total

9,444

－

273,462

282,906

FVTPL financial liabilities－－

36,76836,768

Total

－

－

36,76836,768Note:
As at 31 March 2019
No transfers occurred between Levels 1, 2 and 3 during the year ended 31 March 2019.
As at 31 March 2020
No transfers occurred between Levels 1, 2 and 3 during the year ended 31 March 2020.

- 86 -

② Reconciliation of financial assets categorised at Level 3 from beginning balance to ending balance(Millions of Yen)
For the year ended
31 March 2019

Fair value measurement as at the end of the reporting period
Available-for-sale financial assets

FVTPL financial liabilities

Opening balance

618

4,289

Total gains or losses recognised:

382
－

(165)

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

(277)
112
－

382

Purchase(ii)Increase

27,376－

Sale
Settlement
Closing balance

234
－

(11)
－

(89)

28,364

4,268(Millions of Yen)

For the year ended
31 March 2020

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

FVTPL financial liabilities

Opening balance

28,364

4,268

Total gains or losses recognised:

1,753
－

3
96

1,753
0
－

(92)
－

- in profit or loss (i)- in other comprehensive income (i)Purchase
Increase
Sale

20
－

Settlement

(357)
－

(289)

Closing balance

29,761

4,001(Thousands of U.S. Dollars (Note 2))
For the year ended
31 March 2020

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

FVTPL financial liabilities

Opening balance

260,630

39,218

Total gains or losses recognised:16,110－30
878

16,110
3
－

(848)
－

- in profit or loss (i)- in other comprehensive income (i)Purchase
Increase
Sale

180
－

Settlement(3,280)－(2,660)

Closing balance

273,462

36,768Note:
As at 31 March 2019(i) Total gains or losses included in profit or loss are included in the line item ‘Other income’ or ‘Finance costs’ in the consolidated
statement of comprehensive income.
In 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.
(ii) On 1 June 2018, the Group invested 27,000 million yen in K.K. Pangea (KIOXIA Holdings Corporation).

- 87 -

As at 31 March 2020(i) Total gains or losses included in profit or loss are included in the line item ‘Finance costs’ in the consolidated statement ofcomprehensive income.
In 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’ inthe 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.

- 88 -

(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 2019

As at 31 March 2020

As at 31 March 2020

Carrying
amountFair value

Carrying
amountFair value

Carrying
amountFair value

Lease deposits

8,248
5,100

8,676
5,100

8,454
5,304

8,742
5,304

77,685
48,73680,331
48,736

Total

13,348

13,775

13,75814,046

126,421129,067

327

368

234

243

2,154

2,237

Long-term guarantee deposits

7,855

7,665

2,989

2,974

27,46927,331

Total

8,183

8,035

3,224

3,217

29,622

29,568AssetsFinancial assets measured at amortised cost
Long-term loans to subsidiaries and affiliates

Liabilities
Financial liabilities measured at amortised cost
Long-term bank loans (excluding current
portion)- 89 -

② Fair value hierarchy
Level 1: Fair value derived from quoted prices (unadjusted) 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 other than bonds 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 that reflects the remaining period to thematurity 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 2019

Level 1

Level 2

Level 3

Total

AssetsLoans and receivables
Long-term loans to subsidiaries and affiliates

－
－

8,676
5,100

－

Lease deposits

－

8,676
5,100

Total

－

13,775－

13,775

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

－

368

－

368

Long-term guarantee deposits

－

7,665

－

7,665

Total

－

8,033

－

8,033

Liabilities(Millions of Yen)
As at 31 March 2020

Level 1

Level 2

Level 3

Total

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

－
－

8,742
5,304

－
－

8,742
5,304

Total

－

14,046－

14,046

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

－

243

－

243

Long-term guarantee deposits

－

2,974

－

2,974

Total

－

3,217

－

3,217

Liabilities(Thousands of U.S. Dollars (Note 2))
As at 31 March 2020

Level 1

Level 2

Level 3

Total

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

80,331－

Lease deposits
Total

80,331－

48,736－

48,736－129,067－

129,067

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

－

2,237

－

2,237

－

27,331－

27,331

Total－

29,568－29,568- 90 -

22. Share-based payments
The Company has a performance-based stock compensation plan (Performance Share Unit) 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.
(1) Performance Share Unit
① Details of transactions
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.
PSU granted to officers 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 31 million yen (286 thousand U.S.
dollars) for the year ended 31 March 2020.
Details of PSU that are outstanding for the year ended 31 March 2020, are as follows:No.

Number of shares

Grant date

Fair value at grant date
(Yen)

1

15,5001 Jul 2019

8,045

② Determination of fair value
The fair value of the PSU granted during the years ended 31 March 2020, was 8,045 yen and was determined based on the share priceof the grant day.
(2) 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 195 million yen and 125
million yen (1,153 thousand U.S. dollars) for the years ended 31 March 2019 and 2020, respectively.
Details of the stock options that are outstanding for the years ended 31 March 2019 and 2020, are as follows:No.

Number of shares

Grant date

Expiry date

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

10

1,247,600

8 Dec 2009

30 Sep 2019

2,215

2,784

11
12

1,225,600
680,800

7 Dec 201017 Jan 2012

30 Sep 2020
30 Sep 2021

1,947
1,616

1,861
1,427

13
14

560,800
758,800

16 Jan 201315 Jan 2014

30 Sep 2022
30 Sep 2023

1,648
2,846

1,707
3,141

15
16

582,400
460,400

14 Jan 201513 Jan 2016

30 Sep 2024
30 Sep 2025

3,972.5
4,928

3,585
3,407

17
18

386,800
40,40017 Jan 201713 Feb 2018

30 Sep 2026
30 Sep 2027

4,839
5,765

3,740
4,009

19
20

123,600
20,0002 Oct 2018
13 Aug 201930 Sep 2028
30 Sep 2029

6,590
8,542

6,345
7,645

- 91 -

② Determination of stock option value
The weighted-average fair value of the stock options granted during the years ended 31 March 2019 and 2020, was 6,345 yen and
7,645 yen, respectively.
In determining the expense of the stock options, the options were priced using the Black-Scholes model. The following table details
the assumptions used in the Black-Scholes model for the options granted in the years ended 31 March 2019 and 2020.
Expected volatility was determined based on recent historical daily share price volatility from the grant date to the forecasted
remaining period.
No. 19
Share price at grant date (Yen)
Exercise price (Yen)No. 20

6,855
6,590

8,515
8,542

Expected volatility
Expected remaining option life (Years)

26.46%
6.2

27.69%
6.4

Dividends yield
Risk free rate

1.09
(0.01%)

1.06(0.35%)- 92 -

(3) The number and weighted-average exercise prices of stock options
The weighted-average exercise price of the outstanding options was 3,911 yen and 4,078 yen as at the years ended 31 March 2019 and2020, respectively. Weighted-average remaining contractual life was 5.4 years and 4.8 years as at 31 March 2019 and 2020,
respectively.
For the year ended 31 March 2019

For the year ended 31 March 2020

Weighted-average
Number of shares

exercise price(Yen)

Weighted-average
Number of shares

exercise price(Yen)

1,924,400

3,604

1,510,000

3,911

123,600

6,590

20,0008,542

Forfeited (i)(41,600)

4,279(31,200)

5,184

Exercised(453,600)

3,527(328,400)

3,888

Expired(42,800)

1,556(72,400)

2,215

Outstanding at the end of the period

1,510,000

3,911

1,098,000

4,078

Exercisable at the end of the period

1,086,400

3,316

890,600

3,623

Outstanding at the beginning of the period
GrantedNote:(i) Stock options forfeited were due to employee retirements.
Stock options exercised during the year ended 31 March 2020, were as follows:No.

Number of shares exercised

Exercise period

Weighted-average of share price at
exercise date (Yen)1011

16,40025,600April 2019 to September 2019
April 2019 to February 2020

7,936
8,181

12
13

23,60013,200April 2019 to February 2020
May 2019 to February 2020

8,080
8,393

14
15

34,00044,000April 2019 to March 2020
April 2019 to January 2020

8,093
8,074

16
17

101,200
54,800April 2019 to March 2020
April 2019 to January 2020

8,077
8,039

18
19

9,200
6,400

May 2019 to November 2019
November 2019 to February 2020

8,169
8,730

Total

328,400

Note:
The number of shares exercised and the amount paid by key management personnel are 80,000 shares and 286 million yen,respectively.
Stock options exercised during the year ended 31 March 2019, were as follows:No.

Number of shares exercised

Exercise period

Weighted-average of share price at
exercise date (Yen)8
10

13,60042,800July 2018 to September 2018
April 2018 to February 2019

6,216
6,176

11
12

5,200
19,600June 2018 to November 2018
August 2018 to February 2019

6,173
6,282

13
14

11,200112,400

May 2018 to March 2019
April 2018 to March 2019

6,272
6,194

15
16

128,800
67,600April 2018 to February 2019
June 2018 to February 2019

6,381
6,259

17
18

46,8005,600

June 2018 to March 2019
October 2018 to November 2018

6,309
6,310

Total

453,600

Note:
The number of shares exercised and the amount paid by key management personnel are 154,400 shares and 565 million yen,respectively.
- 93 -

23. Revenue(1) Disaggregation of revenue
The relationship between the major geographical areas and the Group’s revenue from continuing operations from its major products
and services for the year ended 31 March 2019 and 2020 is as follows:(Millions of Yen)
For the year ended 31 March 2019

Japan

Asia

Americas

EuropeOthers

Total

Life Care
Health Care related products

109,824

28,937

67,842

70,2394,771

Medical related products

19,335

13,154

Life Care total

129,159

42,090Electronics related products

20,606

Imaging related products

11,286

Information Technology total

281,613

21,02935,394

2,864

91,77588,871

105,633

7,635

373,388

114,649

9,155

2,212

0

146,623

28,624

598

415

1

40,92431,892

143,273

9,753

2,627

1

187,546

2,770

595

494

1,016

－

4,875

163,821

185,959

99,118109,277

7,636

565,810

Information Technology

Other
Total revenue from externalcustomers(Millions of Yen)
For the year ended 31 March 2020

Japan

Asia

Americas

EuropeOthers

Total

Life Care
Health Care related products

113,541

27,10964,516

68,392

4,240

Medical related products

20,647

13,525

Life Care total

134,188

40,633

17,068

134,515

277,798

22,16037,8193,101

97,251

86,676106,2107,341

375,049

9,002

2,071

1

162,655

Information Technology
Electronics related products
Imaging related products

8,845

23,696

937

597

1

34,076

Information Technology total

25,913

158,211

9,939

2,667

1

196,731

2,944

561

579

683

-

4,766

163,045

199,405

97,194

109,561

7,343

576,546

Other
Total revenue from externalcustomers(Thousands of U.S. Dollars (Note 2))
For the year ended 31 March 2020

Japan

Asia

Americas

EuropeOthersTotal

1,043,289

249,092

592,819

628,425

38,961

Medical related products

189,715

124,273

203,620

347,501

28,495

893,605

Life Care total

1,233,004

373,365

796,439

975,926

67,4573,446,191

156,831

1,236,006

82,712

19,025

5

1,494,580

Life Care
Health Care related products

2,552,586

Information Technology
Electronics related products
Imaging related products

81,275

217,734

8,612

5,483

6

313,109

Information Technology total

238,106

1,453,740

91,32424,50911

1,807,690

Other
Total revenue from externalcustomers

27,048

5,152

5,318

6,278

-

43,797

1,498,158

1,832,258

893,0811,006,713

67,4685,297,677

Note:Geographical areas are based on the location of the customers.
- 94 -

(2) Contract balances
Receivables from contracts with customers and contract liabilities are as follows. Contract liabilities consist mainly of advancereceived from customers.
(Millions of Yen)

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))As at 31 March 2019
Receivables from contracts
with customers
Contract liabilities

As at 31 March 2020

As at 31 March 2020

108,152

100,262921,267

4,011

2,904

26,681

Note:
Revenues recognised in the years ended 31 March 2019 and 2020 that were included in the contract liability balances as at 1 April
2019 and 2020 were 2,401 million yen and 1,710 million yen (15,717 thousand U.S. dollars), respectively.
(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, no significant financing
components are included in consideration from contracts with customers.
(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.

- 95 -

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 from continuing operations:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))For the year ended
31 March 2019

For the year ended
31 March 2020

For the year ended
31 March 2020

Commission

320

377

3,465

Rent
Government grants

121
398

130
423

1,199
3,885

Gain on sale of plant, property and equipment
and intangible assets

674

438

4,021

35
2,227

92
1,003

845
9,213

3,775

2,463

22,627

Insurance proceeds
OthersTotal 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

For the year ended

For the year ended

31 March 2019

31 March 2020

31 March 2020

Employee benefits expense

9,551

10,05392,376

Depreciation and amortisation
Commission expenses

2,023
3,445

2,743
3,423

25,20031,454

Other expenses

11,081

10,633

97,699Total R&D expenses recognised as incurred

26,10026,851

246,729Note:
The above items are included in the corresponding line items in the consolidated statement of comprehensive income.

- 96 -

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

Salary, bonuses and others(Millions of Yen)

(Millions of Yen)

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

For the year ended

For the year ended

31 March 2019

31 March 2020

31 March 2020

121,016

122,370

1,124,417

626

918

8,439

2,416

2,371

21,787

3,043

3,290

30,226Retirement benefit
Defined benefit
Defined contribution
Retirement benefit total
Share-based payments (stock option)

195

157

1,439

1,924
5,829

1,770
6,147

16,26456,487132,006

133,734

1,228,834

Severance payments
OthersTotal employee benefits expense(4) Foreign exchange gains or losses

Foreign exchange gains or losses include gains resulting from changes in fair value of currency derivatives.
(5) Other expenses
The following is an analysis of the Group’s other expenses from continuing operations:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S. Dollars

For the year ended

For the year ended

For the year ended

31 March 2019

31 March 2020

31 March 2020

(Note 2))

Packaging/shipping/transportation
Travel11,268
6,647

Rent
Utilities

8,056
12,160

Repair and maintenance
Loss on sales of property, plant and equipment

13,378182

Loss on disposal of property, plant andequipment
Others (Note)
Total other expenses

11,318
6,596－

103,999
60,611－

11,928109,600

13,185
180

121,152
1,654

609

375

3,444

75,71074,186681,667

128,010

117,768

1,082,127

Note:
In April 2015, the U.S. Department of Justice issued a subpoena to Pentax of America, Inc. (“Pentax”), a U.S. subsidiary of theCompany. The subpoena sought information with respect to duodenoscopes that Pentax and its affiliated companies manufactured andsold. The Company and Pentax cooperated with the U.S. Department of Justice (“DOJ”) and responded to its requests. In April 2020,
the Company and Pentax finalised a Deferred Prosecution Agreement with DOJ and the Group recorded an accrual for a fine andforfeiture totaling 4,680 million yen (43,000 thousand U.S. dollars).

- 97 -

25. Finance income and costs(Millions of Yen)

(Millions of Yen)

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

For the year ended

For the year ended

31 March 2019

31 March 2020

31 March 2020

Finance income
Interest income
Cash and cash equivalents, financial
assets measured at amortized cost

2,763

3,452

31,715

10

10

92

2,733

3,461

31,806

76

431

3,963

36
18

47
18

432
164

262

116

1,065

Financial assets measured at amortised
cost

－

178

1,639

Total finance costs

391

791

7,264

Dividend income
FVTOCI financial assets
Total finance income
Finance costs
Interest costs
Interest-bearing debt
Retirement benefits liabilities
Provisions
Other liabilities
Impairment losses- 98 -

26. Other comprehensive income
For the years ended 31 March 2019 and 2020, 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

For the year ended

For the year ended

31 March 2019

31 March 2020

31 March 2020

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

7,059(17,072)(156,868)

(447)

266

2,447

6,612

(16,806)(154,420)

(17)

76

701

0

－

－

(16)

76

701

tax
Income tax relating to components of other

6,596(16,729)(153,719)

comprehensive income
Total other comprehensive income/(loss)

124

(203)

(1,863)6,720(16,932)(155,583)

loss for the year
Total
② Share of other comprehensive income ofassociates
Gains (losses) arising during the year
Reclassification adjustments to profit orloss for the year
Total
Other comprehensive income/(loss) before(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.

- 99 -

Deferred and current taxes on each item of other comprehensive income for the years ended 31 March 2019 and 2020, are as follows:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S. Dollars

For the year ended

For the year ended

For the year ended

31 March 2019

31 March 2020

31 March 2020

(Note 2))

Total

Tax

Net of tax

Total

Tax

Net of tax

Total

Tax

Net of tax

8,720(2,149)

6,571

Other comprehensive
income attributable toowners of the Company①FVTOCI financial assets

839

(142)

697

949

(234)

715

6,729

124

6,853

(16,602)

(203)

(293)

(10)

(303)

(50)

22

(29)

(463)

200

(263)

(16)

－

(16)

76

－

76

701

－

701

7,259

(28)

7,231

(15,627)

(415)

(30)

7

(23)

(16)

－

(16)

(150)

－

(150)

(117)

－

(117)

(203)

－

(203)

(1,869)－(1,869)

(147)

7

(140)

(220)

－

(220)

(2,019)－(2,019)

7,113

(21)

7,091

(15,847)(415)② Exchange differences ontranslation of foreign
operations③ Remeasurements of the(16,805) (152,552)(1,863) (154,415)

net defined benefit
liability (asset)④ Share of othercomprehensive incomeof associates
Subtotal(16,042) (143,593)(3,812) (147,406)

Other comprehensive
income attributable to non-controlling interests① FVTOCI financial assets② Exchange differences ontranslation of foreign
operations
Subtotal
Total other comprehensive
income/(loss)- 100 -

(16,262) (145,612)(3,812) (149,424)

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

For the year ended

For the year ended

31 March 2019

31 March 2020

31 March 2020

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

321.55－303.27－2.79－

321.55303.272.79

320.96302.74

2.78

－

－

－

320.96302.74

2.78

From discontinued operations
Total diluted earnings per share(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 2019
Profit attributable to owners of theCompany from continuing operations
Profit attributable to owners of theCompany from discontinued operations
Profit used in the calculation of basic
earnings per share

For the year ended
31 March 2020

For the year ended
31 March 2020

122,103

114,406

1,051,239－－－

122,103

114,406

1,051,239(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 2019
Weighted-average number of ordinary
shares379,735- 101 -For the year ended 31 March 2020
377,238

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

(Millions of Yen)

(Thousands of U.S. Dollars

For the year ended
31 March 2019

For the year ended
31 March 2020

For the year ended
31 March 2020

(Note 2))

Profit attributable to owners of theCompany from continuing operation
after dilution
Profit attributable to owners of theCompany from discontinued operation
after dilution
Profit used in the calculation of diluted
earnings per share

122,103

114,406

1,051,239－－－

122,103

114,406

1,051,239(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 2019
Weighted-average number of ordinary shares

For the year ended
31 March 2020

379,735

377,238701

669

380,435

377,907

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

28. Non-cash transactions
Non-cash transactions for the years ended 31 March 2019 and 2020, consisted of acquiring property, plant and equipment through newlease arrangements in the amount of 476 million yen and 5,925 million yen (54,445 thousand U.S. dollars), respectively.

- 102 -

29. Subsidiaries(1) Composition of the Group
Information about the composition of the Group as at 31 March 2019 and 2020, is as follows:

Reportable Segment
Life Care

Information Technology

Number of wholly-owned subsidiaries

Location

As at 31 March 2019

As at 31 March 2020

U.S.A.

6

5

ARGENTINA

1

1

UNITED KINGDOM

4

4

ITALY

2

2

INDIA

3

3

INDONESIA

3

3

AUSTRALIA

1

2

NETHERLANDS

44

CANADA

7

7

SINGAPORE

3

3

SWITZERLAND

1

1SWEDEN

1

1

SPAIN

2

2

THAILAND

3

3

CZECH REPUBLIC

1

1

DENMARK

1

1

GERMANY

6

6

TURKEY

1

1

HUNGARY

22

PHILIPPINES

2

2

FINLAND

1

1

BRAZIL

2

2

FRANCE

3

3

BULGARIA

1

1

VIETNAM

1

1

BELGIUM

1

1

POLAND1

1

MALAYSIA

44

SOUTH AFRICA

1

1

MEXICO－1

RUSSIA

2

2

SOUTH KOREA

3

3

TAIWAN

1

1

CHINA

8

9

JAPAN

6

5

U.S.A.

1

1

SINGAPORE

1

1

THAILAND

2

2

PHILIPPINES

2

2

VIETNAM

4

4MALAYSIA

1

1

LAOS

1

1

SOUTH KOREA

1

1

TAIWAN

1

1

CHINA

6

5

JAPAN

1

－

- 103 -

Reportable Segment
Other

Information Technology

As at 31 March 2019

As at 31 March 2020

U.S.A.

3

3

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

2

2

Reportable Segment
Life Care

Number of wholly-owned subsidiaries

Location

Number of non-wholly-owned subsidiaries

Location

As at 31 March 2019

As at 31 March 2020

IRELAND

1

1

U.S.A.

1

1

UNITED KINGDOM

1

1

NETHERLANDS

1

1

SINGAPORE－

1

GERMANY2

2

FRANCE

2

2

VIETNAM

1

1

BELGIUM

1

1

CHINA

4

3

JAPAN

2

2

PHILIPPINES

1

1

CHINA

2

2

- 104 -

(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:
Profit (loss) allocated to noncontrolling interests

Proportion of ownershipinterests and voting
Name ofsubsidiaries

Locationrights held by noncontrolling interests(Millions of (Millions of
Yen)

Yen)

Accumulated non-controlling interests(Thousands(Thousands(Millions of (Millions ofof U.S.
of U.S.
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 2019 March 2020 March 2019 March 2020 March 2020 March 2019 March 2020 March 2020
WASSENBURG MEDICALNETHER
LANDS

B.V. and six
and otherother companies countries

49.0%

49.0%

4

(56)

(512)

2,968

2,790

25,638

50.0%

50.0%

(71)

173

1,594

914

1,023

9,397

670

(19,590)(180,003)

4,552(15,777)(144,968)

SEIKO
OPTICAL
PRODUCTS
CO., LTD. andfour otherJAPANand othercountries

companies
Individually immaterial subsidiaries with non-controlling interests
Total

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)

(Millions of Yen)

(Thousands of U.S. Dollars)

As at / for the year
ended 31 March 2019

As at / for the year
ended 31 March 2020

As at / for the year
ended 31 March 2020

WASSENBURG MEDICAL B.V. and six
other companies
Non-current assets

3,014

3,305

30,366

Current assets

4,871

4,511

41,453

Non-current liabilities

(340)

(499)

(4,586)

Current liabilities(1,488)(1,623)(14,912)Equity attributable to owner of the Company

3,089

2,904

26,683

Non-controlling interests

2,968

2,790

25,637

Revenue

6,638

6,505

59,768

Expenses(6,630)(6,618)(60,812)

8

(114)

1,044

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

(279)

(250)

(2,295)Comprehensive income/(loss)

(271)

(363)

(3,339)Dividends paid to non-controlling interests

－

－

－

Net cash flow from operating activities

(180)

727

6,680

Net cash flow from investing activities

(133)

(161)

(1,484)

(7)

(208)

(1,915)

(321)

357

3,281

Net cash flow from financing activities
Net cash flow

- 105 -

(Millions of Yen)

(Millions of Yen)

(Thousands of U.S. Dollars)

As at / for the year
ended 31 March 2019

As at / for the year
ended 31 March 2020

As at / for the year
ended 31 March 2020

SEIKO OPTICAL PRODUCTS CO., LTD.
and four other companies
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Equity attributable to owner of the Company

923

1,042

9,574

12,4199,262

85,108

(78)

(219)

(2,015)(11,108)(7,826)(71,911)

1,078

1,129

10,378Non-controlling interests

1,078

1,129

10,378

Revenue

31,45429,488

270,951

Expenses(31,555)(29,256)(268,818)

(102)

232

2,132

Other comprehensive income/(loss)

11

(129)

(1,189)Comprehensive income/(loss)

(90)

103

944

Dividends paid to non-controlling interests

－

－

－

Profit/(loss) for the year

Net cash flow from operating activities

804

739

6,789

Net cash flow from investing activities

(40)

(42)

(382)

Net cash flow from financing activities

31(2,175)(19,989)

Net cash flow

795

(1,478)(13,581)Note:
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.

- 106 -

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

Name of subsidiary

HOYA LENSMANUFACTURING

Reportablesegment

Life Care

MALAYSIA SDN.BHD.
HOYA LENS THAILAND LTD. Life Care

Major products/
services in the

Proportion of

Proportion ofshares held

shares held

As at 31 March

As at 31 March

2019

2020

MALAYSIA

100.0%

100.0%THAILAND

100.0%

100.0%

Location

reportable segment
Health Care related
products
Health Care related
products

HOYA LENS GUANGZHOULTD.

Life Care

Health Care related
products

CHINA

95.0%

100.0%HOYA LENS AUSTRALIA
PTY.LTD.

Life Care

Health Care related
products

AUSTRALIA

100.0%

100.0%

INDIA

100.0%

100.0%VIETNAM

100.0%

100.0%

CHINA

100.0%

100.0%THAILAND

100.0%

100.0%HOYA LENS INDIA PRIVATELIMITEDLife Care

HOYA LENS VIETNAM LTD. Life Care
DAEJEON DAEMYUNG
OPTICAL (HANGZHOU) CO., Life CareLTD.
VISION EASE LENS(THAILAND) CO., LTD

Life Care

Health Care related
products
Health Care related
products
Health Care related
products
Health Care related
products

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%

Life Care and

Health Care related
products and EU

NETHERLANDS

100.0%

100.0%HOYA HOLDINGS N.V.

Corporate

headquarters

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

ITALY

100.0%

100.0%HOYA LENS FRANCE S.A.S.

Life Care

FRANCE

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%CANADA

100.0%

100.0%U.S.A.

100.0%

100.0%U.S.A.

50.0%

50.0%

HOYA LENS CANADA, INC.
HOYA OPTICAL LABS OF
AMERICA, INC.
SEIKO OPTICAL PRODUCTS
OF AMERICA, INC.

Life Care
Life Care
Life Care

Health Care related
products
Health Care related
products

Health Care related
products
Health Care related
products
Health Care related
products

SEIKO OPTICAL PRODUCTS
Life Care
CO., LTD.

Health Care related
products

JAPAN

50.0%

50.0%

PENTAX EUROPE GMBH

Medical related
products

GERMANY

100.0%

100.0%

Life Care- 107 -Name of subsidiary

Reportablesegment

PENTAX ITALIA S.R.L

Life CarePENTAX U.K. LTD.

Life CarePENTAX CANADA, INC.
PENTAX MEDICAL(PENANG) SDN. BHD.
HOYA SURGICAL OPTICS,
INC.

Major products/
services in thereportable segment
Medical related
products

Location

ITALY

Proportion ofshares held

Proportion ofshares held

As at 31 March2019

As at 31 March
2020

100.0%

100.0%

100.0%

100.0%

Medical related

UNITEDproducts

KINGDOM

Life Care

Medical related
products

CANADA

100.0%

100.0%

Life Care

Medical related
products

MALAYSIA

100.0%

100.0%U.S.A.

100.0%

100.0%U.S.A.

100.0%

100.0%

Life Care

MICROLINE SURGICAL, INC. Life Care

Medical related
products
Medical related
products

HOYA LAMPHUN LTD.

Information
Technology

Electronics related
products

THAILAND

100.0%

100.0%HOYA GLASS DISKPHILIPPINES, INC.

Information
Technology

Electronics related
products

PHILIPPINES

100.0%

100.0%HOYA GLASS DISKInformation

Electronics related

VIETNAM LTD.

Technology

products

VIETNAM

100.0%

100.0%

Information

Electronics related

Technology

products

VIETNAM

100.0%

100.0%

Information

Electronics related

Technology

products

VIETNAM

100.0%

100.0%

HOEV CO., LTD.
HOYA GLASS DISKVIETNAM Ⅱ LTD.

HOYA MICROELECTRONICS Information
TAIWAN CO., LTD.
Technology

Electronics related
products

TAIWAN

100.0%

100.0%HOYA ELECTRONICS KOREA Information
CO., LTD.
Technology

Electronics related
products

SOUTH KOREA

100.0%

100.0%HOYA ELECTRONICS

Information

Electronics related

MALAYSIA SDN.BHD.

Technology

products

MALAYSIA

100.0%

100.0%HOYA ELECTRONICS

Information

Electronics related

SINGAPORE PTE. LTD.

Technology

products

SINGAPORE

100.0%

100.0%HOYA CORPORATION USA

Information
Technology

Electronics related
products

U.S.A.

100.0%

100.0%HOYA OPTICS (THAILAND)
LTD.

Information
Technology

Imaging related
products

THAILAND

100.0%

100.0%HOYA OPTO-ELECTRONICS Information

Imaging related

QINGDAO LTD.

Technology

products

CHINA

100.0%

100.0%

Information
Technology

Imaging related
products

CHINA

100.0%

100.0%HOYA OPTICAL (ASIA) CO., Information
LTD.
Technology

Imaging related
products

CHINA

100.0%

100.0%

CHINA

100.0%

100.0%PHILIPPINES

100.0%

100.0%HOYA OPTICALTECHNOLOGY (SUZHOU)LTD.

HOYA OPTICAL

Information
TECHNOLOGY (WEIHAI) CO.,Technology
LTD.

Imaging related

PENTAX CEBU PHILIPPINES Information
CORPORATION
Technology

Imaging related
products

products- 108 -Name of subsidiary

HOYA HOLDINGS ASIA
PACIFIC PTE LTD

Reportablesegment

Major products/
services in the

Proportion of
Location

reportable segment

Proportion ofshares held

shares held

As at 31 March

As at 31 March

2019

2020

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%NETHERLANDS

100.0%

100.0%U.S.A.

100.0%

100.0%HOYA FINANCE B.V.

Corporate

HOYA HOLDINGS, INC.

Corporate

Asia and Oceania
financing company
North America
headquarters- 109 -

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 relatedparties are 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 2019:
Name ofaffiliates

Nature of related party transactions

Transaction amount

Outstanding balance(Millions of Yen)

(Millions of Yen)

Incorporation of deferred interests
Affiliates

receivable into principal (Note)

AvanStrate, Inc.

Interest received

201

8,248

214

56

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.
Platinum owned by a subsidiary of the affiliate is pledged as collateral.
As at/for the year ended 31 March 2020:
Name ofaffiliates

Nature of related
party transactions

Transaction
amountOutstandingbalance

Transaction
amountOutstandingbalance(Millions of(Millions of(Thousands of(Thousands of

Yen)

Yen)

U.S. Dollars(Note 2))

U.S. Dollars(Note 2))

Incorporation ofdeferredAffiliates

AvanStrate, Inc.

interests
receivable into

206

8,454

1,896

77,685

237

36

2,175

327

principal (Note)
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.
Platinum owned by a subsidiary of the affiliate is pledged as collateral.

- 110 -

(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

For the year ended

For the year ended

31 March 2019

31 March 2020

31 March 2020

Short-term benefits
Share-based payments

520
98

402
128

3,692
1,173

Total remuneration of key management personnel

618

530

4,864

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.

- 111 -

31. Business combinations
The information of business combinations is omitted due to lack of materiality for HOYA CORPORATION and its subsidiaries.

32. Contingent liabilities
There are no significant contingent liabilities for HOYA CORPORATION and its subsidiaries.

33. Commitments for expenditure
Payment commitments after the reporting date are as follows:(This note has been revised from the previous reporting. Both tables before and after the revision are presented for clarification.)(Millions of Yen)

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))As at 31 March 2019

As at 31 March 2020

As at 31 March 2020

as Restatedas Restated

Commitments for the acquisition ofproperty, plant and equipment andintangible assets

23,37828,111

258,298(Millions of Yen)

(Millions of Yen)

(Thousands of U.S. Dollars

As at 31 March 2019

As at 31 March 2020

As at 31 March 2020

as Previouly Reported

as Previously Reported(Note 2))

Commitments for the acquisition ofproperty, plant and equipment andintangible assets

23,37824,485

224,98134. Subsequent events
Share Repurchase
The Board of Directors made a resolution to cancel certain shares held as the Company’s treasury shares on 8 May 2020 pursuant to
Article 178 of the Companies Act.
1. Reason for cancellation of treasury shares
The Company decided 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 the shares repurchased under its repurchaseplan approved by resolution of the board of directors on 29 October 2019.
2. Outline of cancellation(1) Class of shares: Common stock(2) Number of shares to be cancelled: 2,470,100 shares(0.66% of total shares outstanding, excluding treasury shares)(3) Date of cancellation: 20 May 2020
(Reference)
Total number of issued and outstanding shares after the cancellation: 375,881,120 shares
Resolution on cash dividends
On 20 May 2020, a resolution was made by the Company’s board of directors for the payment of a cash dividend to shareholders ofrecord on 31 March 2020 of 16,875 million yen (155,058 thousand U.S. dollars) (45 yen per common share).

- 112 -

35. Approval of financial statements
The consolidated financial statements for the year ended 31 March 2020, were approved by Mr. Ryo Hirooka, the chief financial
officer of the Group on 23 June 2020.

- 113 -