HOYA Corporation and its Subsidiaries
Consolidated Financial Statements under IFRSs
and Independent Auditor’s Report
For the year ended 31 March 2019HOYA Corporation

Contents

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

3

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

4

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

6

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

8

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

13

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

15

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

15

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

16

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

18

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

32

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

33

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

38

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

42

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

45

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

49

10． Deferred taxes and income taxes.................................................................................................................

50

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

55

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

57

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

58

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

58

15． Interest-bearing debt....................................................................................................................................

59

16． Finance lease obligations.............................................................................................................................

61

17． Operating lease arrangements......................................................................................................................

62

18． Retirement benefit plans...............................................................................................................................

63

19． Provisions.....................................................................................................................................................

67

20． Trade and other payables.............................................................................................................................

68

21． Share capital and other equity items............................................................................................................

69

22． Financial instruments...................................................................................................................................

73

23． Share-based payments..................................................................................................................................

90

24． Revenue........................................................................................................................................................

92

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

94

26． Finance income and costs............................................................................................................................

96

27． Other comprehensive income......................................................................................................................

97

28． Earnings per share.......................................................................................................................................

99

29． Non-cash transactions..................................................................................................................................

100

30． Subsidiaries..................................................................................................................................................

101

31． Related party disclosures.............................................................................................................................

108

32． Business combinations.................................................................................................................................

110

33． Contingent liabilities....................................................................................................................................

112

34． Commitments for expenditure.....................................................................................................................

112

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

112

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

112

- 2 -

Consolidated Statement of Financial Position
HOYA Corporation and its Subsidiaries
As at 31 March 2019

(Thousands of U.S.

(Millions of Yen)

(Millions of Yen)

Notes

As at 31 March 2018

As at 31 March 2019

As at 31 March 2019

Property, plant and equipment—net
Goodwill

6,8,347,8

105,493
31,892

111,077
42,8431,000,780
386,009

Intangible assets

7,34

36,86344,308399,203

Investments in associates
Long-term financial assets

9
11,22

1,476
15,595349
44,1033,144
397,358

Other non-current assets
Deferred tax assets

12
10

2,302
10,8342,960
10,162

26,672
91,562

204,455

255,8022,304,728

Dollars (Note 2))

ASSETSNON-CURRENT ASSETS:

Total non-current assets
CURRENT ASSETS:
Inventories

13

71,341

78,973

711,530

Trade and other receivables
Other short-term financial assets

14,22
11,22

107,632
4,955

110,847
3,131

998,708
28,207

Income taxes receivable
Other current assets

12

1,228
15,198820
20,946

7,387
188,720

Cash and cash equivalents

22

245,835

293,397

2,643,457

Total current assets

446,190

508,113

4,578,009

Total assets

650,645763,915

6,882,737- 4 -(Thousands of U.S.

(Millions of Yen)

(Millions of Yen)

Notes

As at 31 March 2018

As at 31 March 2019

As at 31 March 2019

EQUITY
Share capital

21(1)

6,264

6,264

56,439

Capital reserves
Treasury shares

21(1)
21(2)

15,899(10,886)

15,899(8,319)143,244(74,954)

Other capital reserves
Retained earnings

21(2),23
21(3),35(6,660)529,818(7,434)
617,459(66,982)
5,563,199(8,242)(713)(6,428)526,193
4,484

623,1554,552

5,614,519
41,010530,677

627,7075,655,529

15,16,22
11,22

451
6,983

904
10,936

8,145
98,535Retirement benefit liabilities
Provisions

18
19

2,127
2,398

2,770
2,607

24,95323,485

Other non-current liabilities
Deferred tax liabilities

12
10

956
2,774

2,303
4,917

20,74844,29915,69024,436

220,165

Dollars (Note 2))

EQUITY AND LIABILITIES

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

21(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

15,16,22

1,901

1,934

17,427

Trade and other payables
Other short-term financial liabilities

20,22
11,22

46,555643

54,887646

494,526
5,816

Income tax payables
Provisions

19

12,355
1,280

8,872
1,261

79,935
11,366

Other current liabilities

12

41,542

44,171

397,974

Total current liabilities

104,277

111,772

1,007,044

Total liabilities

119,967

136,208

1,227,208

Total equity and liabilities

650,645763,915

6,882,737- 5 -Consolidated Statement of Comprehensive Income
HOYA Corporation and its Subsidiaries
For the year ended 31 March 2019
(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 2018

31 March 2019

31 March 2019

Continuing operations
Revenue:Sales

24535,612565,810

5,097,847

Finance income
Other income

26
25

1,562
3,999

2,773
3,775

24,98634,015541,173572,359

5,156,848

534(2,763)(24,893)

83,924
127,820

86,977132,006

783,648
1,189,353

28,711
4,919

26,416
5,376

238,000
48,434

12,71934,051

114,594306,790

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

18,23,25

Depreciation and amortisation
Subcontracting cost

6,7,25Advertising and promotion expense
Commissions expense25

13,08532,506

Impairment losses
Finance costs

8
18,26

5,798
771

1,099
391

9,902
3,524

Share of loss of associates
Foreign exchange (gain)/loss

9
25

44
268

1,113
2,307

10,027
20,788

118,543

128,010

1,153,348

416,925

427,7023,853,516

124,248

144,657

1,303,332

25,026

22,584203,482

Profit for the year from continuing operations

99,222122,072

1,099,850

Profit for the year

99,222122,072

1,099,850

Financial assets measured at fair value through other comprehensive income－

Remeasurements of the net defined benefit liability (asset)

88

809
(293)

7,292
(2,637)10(146)(1,312)

98

371

3,344

Other expenses

6,7,17,25

Total expenses
Profit before tax
Income tax expense

10

Other comprehensive income/(loss):
Items that will not be reclassified subsequently to profit or loss:

Income tax relating to components of other comprehensive income/(loss)

27

10

Subtotal
Items that may be reclassified subsequently to profit or loss:
Net gain/(loss) on revaluation of available-for-sale financial assets
Exchange differences on translation of foreign operations
Share of other comprehensive income of associates

9

423

－

－

(2,712)
(9)

6,612
(16)

59,572
(145)

(112)

124

1,119

(2,410)6,720

60,547

Total other comprehensive income/(loss)(2,312)

7,091

63,891

Total comprehensive income for the year

96,910129,164

1,163,741

Income tax relating to components of other comprehensive income
Subtotal

- 6 -

10

NotesProfit attributable to:
Owners of the Company(Thousands of U.S.

(Millions of Yen)

(Millions of Yen)

For the year ended

For the year ended

For the year ended

31 March 2018

31 March 2019

31 March 201999,494

122,103

Dollars (Note 2))

1,100,125

Non-controlling interests

(272)

(31)

(275)

Total

99,222122,072

1,099,850

Total comprehensive income/(loss) attributable to:
Owners of the Company

96,833

129,334

1,165,277

77

(171)

(1,537)

96,910129,164

1,163,741

Non-controlling interests
Total

Notes

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

(Yen)

(Yen)

For the year ended

For the year ended

For the year ended

31 March 2018

31 March 2019

31 March 2019

2))

28

Continuing operations
Discontinued operations
Basic earnings per share
Diluted earnings per share

258.46321.55

2.90

－

－

－

258.46321.552.90

257.88320.96

2.89

－

－

－

257.88320.96

2.89

28

Continuing operations
Discontinued operations
Diluted earnings per share- 7 -Consolidated Statement of Changes in Equity
HOYA Corporation and its Subsidiaries
For the year ended 31 March 2019
(Millions of Yen)
Notes
Balance at 1 April 2017

Share capital

Capital reserves

Treasury shares

6,264

15,899(6,816)

Other capitalreserves(5,345)Retained earnings
506,367

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

99,49427
99,494

Total comprehensive income/(loss) for the year
Transactions with owners
Contributions by and distributions to owners
Acquisition of treasury shares21(2)(55,007)(27)

Disposal of treasury shares
Cancellation of treasury shares

21(2)

3,819

(1,579)21(3)47,118Dividends, 75 yen per share

21(3)Change in non-controlling interests

21(4)

(26)

Share-based payments (stock options)

23

317

(47,118)(29,024)

98

Transfer to retained earnings
Total contributions by and distributions toowners－－(4,070)(1,315)(76,043)

Total transactions with owners－－(4,070)(1,315)(76,043)

Balance at 31 March 2018

6,264

15,899(10,886)(6,660)529,818

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

122,10327
122,103

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

21(2)

(2)

－

Disposal of treasury shares

21(2)

2,569

(969)

Dividends, 90 yen per share

21(3)Change in non-controlling interests

21(4)

－

Share-based payments (stock options)

23

195

(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- 8 -(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 2017

Share of otherthe net defined(asset)106(3,629)－(1,960)(5,482)272(3,023)98(9)(2,661)272(3,023)98(9)(2,661)

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

27

Total comprehensive income/(loss) for the year
Transactions with owners
Contributions by and distributions to owners
Acquisition of treasury shares21(2)Disposal of treasury shares21(2)Cancellation of treasury shares

21(3)Dividends, 75 yen per share

21(3)Change in non-controlling interests

21(4)Share-based payments (stock options)

23
(98)

Transfer to retained earnings(98)

Total contributions by and distributions toowners

－

－

(98)

－

Total transactions with owners

－

－

(98)

－

(98)

Balance at 31 March 2018

378

(6,652)－(1,969)(8,242)

697

6,853

(303)

(16)

7,231

697

6,853

(303)

(16)

7,231

(98)

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

27

Total comprehensive income/(loss) for the year
Transactions with owners
Contributions by and distributions to owners
Acquisition of treasury shares21(2)Disposal of treasury shares

21(2)Dividends, 90 yen per share

21(3)Change in non-controlling interests

21(4)Share-based payments (stock options)23

Transfer to retained earnings

(6)

303

297

Total contributions by and distributions toowners

(6)

－

303

－

297

Total transactions with owners

(6)

－

303

－

297

Balance at 31 March 2019

1,070

201

－

(1,985)

(713)

- 9 -

(Millions of Yen)
EquityNotes

Non-controlling
attributable to owners

Total equity
interestsof the Company

Balance at 1 April 2017

510,887

4,518

515,405

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

27

Total comprehensive income/(loss) for the year

99,494(272)

99,222(2,661)349(2,312)

96,83377

96,910Transactions with owners
Contributions by and distributions to owners
Acquisition of treasury shares21(2)(55,034)(55,034)

Disposal of treasury shares

21(2)

2,240

2,240

Cancellation of treasury shares

21(3)

－

Dividends, 75 yen per share21(3)(29,024)(34)(29,058)

Change in non-controlling interests

21(4)

(26)

(77)

(103)

Share-based payments (stock options)

23

317

317

－

－

Transfer to retained earnings－

Total contributions by and distributions toowners(81,526)(111)(81,638)

Total transactions with owners(81,526)(111)(81,638)

Balance at 31 March 2018

526,193

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)

27

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

21(2)

(2)

(2)

Disposal of treasury shares

21(2)

1,600

Dividends, 90 yen per share

21(3)(34,164)(30)(34,195)

Change in non-controlling interests

21(4)

－

269

269

Share-based payments (stock options)

23

195

195

－

－

Transfer to retained earnings

1,600

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- 10 -

Consolidated Statement of Changes in Equity
HOYA Corporation and its Subsidiaries
For the year ended 31 March 2019-Continued(Thousands of U.S. Dollars (Note 2))
Notes
Balance at 31 March 2018

Share capital

Capital reserves

Treasury shares

56,439143,244(98,080)

Other capitalreserves(60,006)

Retained earnings
4,773,568

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

1,100,125
27
1,100,125

Total comprehensive income/(loss) for the year
Transactions with owners
Contributions by and distributions to owners
21(2)

(21)

－

Disposal of treasury shares21(2)23,147(8,734)

Dividends, 90 yen per share

21(3)Change in non-controlling interests

21(4)

－

Share-based payments (stock options)

23

1,758

Acquisition of treasury shares(307,815)(2,679)Transfer to retained earnings
Total contributions by and distributions toowners－－23,126(6,976)(310,495)

Total transactions with owners－－

23,126(6,976)(310,495)

56,439143,244(74,954)(66,982)

5,563,199

Balance at 31 March 2019

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

Financial assets

Notes

Remeasurements of
Exchange differences

measured at fair value
through otherAccumulated othercomprehensive

income of associates

income/(loss)

benefit liability
foreign operations

comprehensive income

Balance at 31 March 2018

Share of othercomprehensive

the net definedon translation of(asset)3,410(59,931)－(17,739)(74,260)

6,282

61,746(2,731)(145)

65,152

6,282

61,746(2,731)(145)

65,152

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

27

Total comprehensive income/(loss) for the year
Transactions with owners
Contributions by and distributions to owners
Acquisition of treasury shares21(2)Disposal of treasury shares

21(2)Dividends, 90 yen per share

21(3)Change in non-controlling interest21(4)Share-based payments (stock options)23

Transfer to retained earnings

(51)

2,731

2,679

Total contributions by and distributions toowners

(51)

－

2,731

－

2,679

Total transactions with owners

(51)

－

2,731

－

2,679

Balance at 31 March 2019

9,641

1,815

－

(17,883)(6,428)- 11 -

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

Non-controlling
attributable to owners

Total equity
interestsof the Company

Balance at 31 March 2018

4,740,907

40,402

4,781,308

1,100,125(275)

1,099,850

65,152(1,261)

63,891

1,165,277(1,537)

1,163,741

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

27

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

21(2)

(21)

(21)

Disposal of treasury shares21(2)14,413

14,413

Dividends, 90 yen per share

21(3)(307,815)(275)(308,090)

Change in non-controlling interest

21(4)

－

2,420

2,420

Share-based payments (stock options)

23

1,758

1,758

－

－

Transfer to retained earnings
Total contributions by and distributions toowners(291,665)

2,145(289,520)

Total transactions with owners(291,665)

2,145(289,520)

Balance at 31 March 2019

5,614,519

41,0105,655,529- 12 -

Consolidated Statement of Cash Flows
HOYA Corporation and its Subsidiaries
For the year ended 31 March 2019
(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 2018

31 March 2019

31 March 2019

Profit before tax
Depreciation and amortisation

124,248
28,711

144,657
26,416

1,303,332
238,000

Impairment losses
Finance income

5,798(1,562)

1,099(2,773)

9,902(24,986)

Finance costs
Share of (profits)/loss of associates

771
44

391
1,113

3,524
10,027(Gain)/loss on sales of property, plant and equipment
Loss on disposal of property, plant and equipment

(438)
432
－

(492)
609

(4,434)
5,487

Notes

Cash flows from operating activities

Gain on business transfer
Foreign exchange (gain)/loss(1,447)

(3)
342

(29)
3,081

Others

4,631

7,936

71,502

161,189

179,294

1,615,407

Decrease/(increase) in inventories

1,763(6,128)(55,216)

Decrease/(increase) in trade and other receivables
Increase/(decrease) in trade and other payables(6,562)
4,052(3,066)
4,985(27,620)
44,910Cash generated from operations (before movements in working
capital)Movements in working capital

Increase/(decrease) in retirement benefit liabilities and provisions

(234)

428

3,852

160,209

175,512

1,581,333

Interests received

1,499

2,435

21,941Dividends received
Interest paid

8
(456)

5
(261)

49
(2,348)

Income taxes paid
Income taxes refunded(26,425)664(31,637)533(285,043)
4,802

Net cash generated from operating activities
Cash flows from investing activities

135,499

146,588

1,320,734

Subtotal

Withdrawals of time deposits

11,025

21,815

196,552

Payments for time deposits
Proceeds from sales of property, plant and equipment(6,186)559(18,223)
2,340(164,182)
21,085

Payments for acquisition of property, plant and equipment
Proceeds from sales of investment(17,974)959(26,672)10(240,310)
88

Payments for acquisition of investment
Proceeds from sales of subsidiaries(1,333)
5(27,777)
260(250,266)
2,340

Payments for acquisition of subsidiaries
Payments to non-controlling interests upon merger(54,018)(2)－(19,742)－(177,874)－
32(3,798)Proceeds from business transfer
Payments for business transfer

(251)

4
(421)

Other proceeds
Other payments

759(2,076)427(2,164)

3,844(19,495)

Net cash used in investing activities(68,533)(70,144)(631,985)- 13 -

Consolidated Statement of Cash Flows
HOYA Corporation and its Subsidiaries
For the year ended 31 March 2019-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 2018

31 March 2019

31 March 2019

Cash flows from financing activities
Dividends paid to owners of the Company(29,042)(34,141)(307,605)

Dividends paid to non-controlling interests
Repayments of long-term borrowings

15

(34)
(339)

(30)
(271)

(275)
(2,440)

Payments for redemption of bonds

15

(14)

(122)

Proceeds from disposal of treasury shares
Payments for purchase of treasury shares

21(2)
21(2)

(35,021)
－

0
(2)

0
(21)
14,413600－(55,034)

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

21(4)

2,240
45

Payments for acquisition of non-controlling interests

21(4)

(148)

1,600
67
－

Net cash used in financing activities(117,333)(32,792)(295,449)

Net increase/(decrease) in cash and cash equivalents(50,367)

43,652

393,300

Cash and cash equivalents at the beginning of the year

296,851

245,835

2,214,933

(649)

3,910

35,224

245,835

293,397

2,643,457

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 29 “Non-cash transactions”.
There are no short-term investments within three months as at 31 March 2019.

- 14 -

Notes to the Consolidated Financial Statements
HOYA Corporation and its Subsidiaries
For the year ended 31 March 2019

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”.

- 15 -

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 ¥110.99 to $1, the foreign exchange rate at 31 March 2019. 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 IFRSs for the year ended 31 March 2019:
IFRSs

Subject of new standards/amendments and transition provisions

IFRS 9Financial Instruments

Amendment to the accounting treatment for financial instruments

IFRS 15

Revenue from Contracts with
Customers

Amendment to the accounting treatment for revenue recognition

These standards and interpretations were applied in accordance with their respective transition provisions and had no significant
impact on the consolidated financial statements of the Group.
IFRS 9 Financial Instruments(1) Classification and measurement of financial instruments
The financial instruments that have been classified as available-for-sale financial assets, are reclassified as financial assets measured atfair value through other comprehensive income. In the consolidated statement of changes in equity, available-for-sale financial assets
are reclassified as financial assets measured at fair value through other comprehensive income at the beginning of the year ended 31
March 2019. The Group did not apply IFRS 9 retrospectively in accordance with the transition provisions.
(2) Impairment losses of financial assets
The Group recognises a loss allowance for the expected credit losses on a financial asset measured at amortised cost.
IFRS 15 Revenue from Contracts with Customers
The Group recognises revenue based on the five-step approach below:
Step 1: Identify the contracts with customers
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognise revenue when the entity satisfies a performance obligation
The Group sells health care related products, medical related products, electronics related products ,imaging related products, etc.
Revenue is recognized 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.

- 16 -

(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
main impact of this adoption on the Group's consolidated financial statements is expected to increase by approximately 19 billion yen(171,187 thousand U.S. dollars) in right-of-use assets and lease liabilities on the consolidated statement of financial position at the
beginning of the year ending 31 March 2020. The impacts on the consolidated statement of comprehensive income are immaterial.
The impact of the adoption of other standards and interpretations on the consolidated financial statements of the Group is immaterial.
Mandatory
IFRSs

adoption（fromthe yearbeginning)

IFRS 16

LeasesIFRS 10

Consolidated Financial(Revised)
IAS 28

Statements
Investments in Associates(Revised)

and Joint Ventures

To be adopted
by the Group
from the year
ending1 January 2019

31 March 2020

Not determined

Not determined

Subject of new standards/amendments

Amendment to the accounting treatment for leasearrangements
Amendments to the accounting treatment for sale or- 17 -

contribution of assets between an investor and its
associate or joint venture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.

- 18 -

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.

- 19 -

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.

- 20 -

(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: 2-10 years
Tools, equipment and fixtures: 2-10 years
Leased assets are depreciated over their estimated useful lives where the transfer of the title of the assets is certain by the end of thelease term. Leased assets where the transfer of the title of the assets is not certain by the end of the lease term are depreciated over the
shorter of their estimated useful lives or their lease terms.

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

- 21 -

(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.

- 22 -

(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.

- 23 -

(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.

- 24 -

(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.

- 25 -

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

(16) Share-based payments
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 23 “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.

- 26 -

(18) Financial liabilities issued by the Groupexcluding 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”.

- 27 -

(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.

- 28 -

(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.

- 29 -

(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.

- 30 -

(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.

- 31 -

4. Critical accounting judgements and key sources of estimation uncertainty(1) Application of estimates and assumptions
Preparation of consolidated financial statements requires management to make estimates and assumptions in order to determine thereported amounts of certain assets, liabilities, income and expense items, as well as certain amounts disclosed in the notes to theconsolidated financial statements relating to contingent liabilities.
The following are items that require estimates and assumptions and are considered significant:· Determination of net realisable value of obsolete inventory (Note 13 “Inventories”)· Expected cash flow from overdue trade and other receivables (Note 22 “Financial instruments”)· Useful lives of property, plant and equipment, including assets under finance lease (Note 3 “Significant accounting policies”, Note 3(5) “Property, plant and equipment” and Note 3 (7) “Intangible assets”)· Assumptions used to estimate future cash flows of cash-generating units to assess the recoverability of property, plant and equipment
and intangible assets, including goodwill (Note 8 “Impairment losses”)· Financial asset measured at fair value (Note 22 “Financial instruments”)· Recoverability of deferred tax assets (Note 10 “Deferred taxes and income taxes”)· Assumptions used for treatment of retained earnings of overseas subsidiaries and associates for tax purposes (Note 10 “Deferredtaxes and income taxes”)· Discrepancy in opinion with a tax authority relating to tax calculations (Note 10 “Deferred taxes and income taxes”)· Assumptions used to calculate retirement benefit obligations (Note 18 “Retirement benefit plans”)· Asset retirement obligations arising from legal obligations and constructive obligations (Note 19 “Provisions”)· Fair value of stock options (Note 23 “Share-based payments”)· Possibility of outflow of resources embodying economic benefits on contingent liabilities (Note 33 “Contingent liabilities”)
The estimates and underlying assumptions are based on historical experience and other factors that are considered to be relevant.
Actual results may differ from those estimates. The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions of 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 8 “Impairment losses”)· Recoverability of deferred tax assets (Note 10 “Deferred taxes and income taxes”)- 32 -

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- 33 -

(2) Segment revenues and results
The following is an analysis of the Group’s revenue and results from continuing operations by reportable segment.
The accounting policies of the reportable segments are the same as the Group’s accounting policies described in Note 3 “Significant
accounting policies”.
（Millions of Yen）
For the year ended 31 March

Life Care

2018

Information

Other

Total

Adjustments

Consolidated－

Technology

Revenue from externalcustomers
Inter-segment sales

352,8723

178,480
256

4,260
1,679

535,612
1,938(1,938)535,612－

Total

352,876

178,736

5,939

537,550(1,938)535,612

273
(849)

360
(270)

2
(0)

635
(1,120)

918
421

1,554
(699)

Depreciation and amortisation
Share of profit (loss) of(18,041)(10,080)(303)(28,424)(287)(28,711)associates
Impairment losses

22(5,638)

(2)
(160)

－
－

20
(5,798)

(64)
－

(44)
(5,798)(272,194)(98,601)(4,774)(375,570)(2,096)(377,665)

56,44869,982

864

127,294(3,046)124,248

10,727

8,413

112

19,25336

19,289Interest income
Interest expense

OthersSegment profit before tax
Other disclosure
Capital expenditure（Millions of Yen）
For the year ended 31 March

Life Care

2019

Information

Other

Total

Adjustments

Consolidated－

Technology

Revenue from externalcustomers
Inter-segment sales

373,3883

187,546
96

4,875
1,511

565,8101,610(1,610)565,810－

Total

373,391

187,6436,386

567,420(1,610)565,810665(1,475)

708
(330)

3
(0)

1,376
(1,806)

1,387
1,415

2,763
(391)

(17,349)(8,478)(411)(26,238)(178)(26,416)

39
(690)

20
(281)

－
－

59
(971)

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

69,29080,596

737

150,623(5,967)

144,657

19,1089,933

52

29,092

112

29,204

Interest income
Interest expense
Depreciation and amortisation
Share of profit (loss) of
associates
Impairment losses
OthersSegment profit before tax
Other disclosure
Capital expenditure- 34 -

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

Life Care

2019

Information

Other

Total

Adjustments

Consolidated－

Technology

Revenue from externalcustomers
Inter-segment sales

3,364,163
24

1,689,760
867

43,923
13,612

5,097,847
14,502(14,502)

5,097,847－

Total

3,364,187

1,690,627

57,535

5,112,349(14,502)

5,097,847

5,990(13,293)

6,378(2,976)26(4)12,394(16,272)

12,49912,74824,893(3,524)(156,308)(76,387)(3,706)(236,401)(1,599)(238,000)

354(6,216)178(2,532)－－532(8,748)(10,559)(1,154)(10,027)(9,902)(2,570,420)(889,132)(47,213)(3,506,765)(51,190)(3,557,955)

624,294

726,156

6,639

1,357,089(53,757)

1,303,332

172,157

89,493466

262,116

1,006

263,122

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 (3,046) million yen for the year ended 31 March 2018 consist of elimination of intersegment transactions of 3 million yen, 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 (3,049) million yen.
Adjustments to segment profit before tax of (5,967) million yen ((53,757) thousand U.S. dollars) for the year ended 31 March 2019consist of elimination of inter-segment transactions of (1) million yen ((6) 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(5,966) million yen ((53,751) thousand U.S. dollars).

- 35 -

(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 2018 and 2019:(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 2018

31 March 2019

31 March 2019

Life Care
Health Care related products
Medical related products

265,645
87,228281,613
91,7752,537,287
826,877

Life Care total

352,872

373,388

3,364,163

Electronics related products

134,878

146,623

1,321,043

Imaging related products
Information Technology total

43,60240,924

368,717

178,480

187,546

1,689,760

4,260

4,875

43,923－－－535,612565,810

5,097,847

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 2018

For the year ended
31 March 2019

For the year ended
31 March 2019Japan

156,164

163,8211,475,995

U.S.A.
China

75,36549,41385,473
46,439770,096
418,405

Others254,670

270,078

2,433,350

Total

535,612565,810

5,097,847

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

- 36 -

Non-current assets(Millions of Yen)

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))For the year ended
31 March 2018

For the year ended
31 March 2019

For the year ended
31 March 2019

U.S.A.

49,66467,020603,835

Japan
Thailand

29,916
15,95026,816
19,510241,607
175,780

China
Vietnam

16,6097,999

17,011
10,272

153,266
92,545

OthersTotal

54,11058,298525,256

174,249

198,926

1,792,289

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.

- 37 -

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

Buildings and Machinery andTools,
structures
carriers
equipment andLandConstruction inprogressTotal

fixtures
Balance at 1 April 2017
Additions

97,074

272,323

61,028

9,179

8,451

448,055

681

1,605

2,294

－

13,077

17,657

Acquisitions through businesscombinations

2,267

4,135

595

538

508

8,042

Disposals (i)Transfer from construction in(1,550)2,309(5,604)
12,820(2,464)
734

(282)
2

(182)
(15,865)(10,082)
－

253

276

671

127

44

1,370

progress
Effect of foreign currency
exchange differences
Others414(1,658)

1,013

13

(78)

(295)

101,448

283,897

63,872

9,576

5,955

464,749

938

1,489

2,639

－

22,69427,759combinations
Disposals (i)566(3,037)439(11,147)406(4,238)

48
(479)

382
(118)

Transfer from construction inprogress

1,490

8,649

1,141

0

(11,280)

1,841(19,019)－

Effect of foreign currency
exchange differences

104

1,457

(1,644)

49

87

54

Others(92)(2,097)2,289

39(1,372)(1,232)

101,418

282,687

64,465

9,233

16,348474,150

Balance at 31 March 2018
Additions
Acquisitions through business

Balance at 31 March 2019

- 38 -

（Millions of Yen）
Accumulated depreciation andimpairment losses

Buildings and Machinery andstructures

carriers

Tools,

Land

Construction inequipment andfixturesTotal

progress

Balance at 1 April 2017

(62,472)(243,628)(37,064)(1,114)(48)(344,326)

Depreciation expense
Impairment losses (ii)

(4,315)(356)(15,005)(8)(4,101)
－

－
－

－
－

(23,420)(364)

Disposals (i)Effect of foreign currency

1,363

5,162

1,920

162

－

8,607

exchange differences
Others

(529)
(428)

(253)
1,580

(584)
488

－
(26)

(2)
2

(1,368)
1,616

Balance at 31 March 2018(66,738)(252,152)(39,339)

(978)

(49)

(359,256)

Depreciation expense
Impairment losses (ii)

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

－

－

(128)

(113)

(20,858)(1,023)

Disposals (i)Effect of foreign currency

2,824

9,910

4,058

3

0

16,795exchange differences
Others122(267)(1,600)
2,516

1,518
(1,045)

－
21

(1)
4

38
1,229

Balance at 31 March 2019(67,966)(254,395)(39,472)(1,082)(159)(363,074)（Millions of Yen）
Carrying amount

Buildings and Machinery andstructures

carriers

Tools,

Land

equipment andfixtures

Construction in

Total

progress

Balance at 1 April 201734,602

28,69523,965

8,064

8,403

103,729

Balance at 31 March 2018

34,71031,74524,533

8,598

5,907

105,493

Balance at 31 March 201933,451

28,292

24,993

8,151

16,189111,077- 39 -

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

Buildings and Machinery andstructures

Balance at 31 March 2018carriers

Tools,

Land

Construction inequipment andfixturesTotal

progress

914,0312,557,859

575,475

86,28253,654

4,187,301

8,447

13,41823,7740204,470

250,108

combinations
Disposals (i)5,101(27,363)

3,953(100,436)

3,660(38,183)428(4,315)3,440(1,064)

16,583(171,360)

Transfer from construction inprogress

13,42877,926

10,277

1(101,632)－

Additions
Acquisitions through business

Effect of foreign currency
exchange differences

938

13,131(14,813)

440

787

484

Others(829)(18,891)

20,624353(12,362)(11,104)

913,7542,546,960

580,814

83,190147,293

4,272,011

Balance at 31 March 2019

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

Buildings and Machinery andstructures

carriers

Tools,

Land

Construction inequipment andfixturesTotal

progress

Balance at 31 March 2018

(601,296)(2,271,842)(354,441)(8,812)(437)(3,236,828)

Depreciation expense
Impairment losses (ii)(34,739)(463)(114,422)(3,335)(38,766)(3,246)0(1,154)0(1,018)(187,928)(9,216)

Disposals (i)Effect of foreign currency

25,44189,29036,56031(1)151,321exchange differences
Others

1,096(2,405)(14,415)
22,66913,675(9,415)

0
188

(10)
36

347
11,073

Balance at 31 March 2019

(612,366)(2,292,055)(355,634)(9,747)(1,430)(3,271,230)(Thousands of U.S. Dollars (Note 2))
Carrying amount

Buildings and Machinery andstructures

Balance at 31 March 2019

301,388

carriers

Tools,

Land

equipment andfixtures254,905

225,181Construction in

Total

progress
73,443

145,863

1,000,780

Note:(i) Gain and loss arising from the sale or disposal of property, plant and equipment for the years ended 31 March 2018 and 2019, are
set out in Note 25 “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 25.
(ii) Details of impairment losses are set out in Note 8 “Impairment losses”.
(iii) Property, plant and equipment under construction are included in ‘construction in progress’ in the table above.

- 40 -

Details of commitments for the acquisition of property, plant and equipment are set out in Note 34 “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 finance leases as at 31 March 2018 and 2019, which areincluded in each corresponding amount in the preceding table:(Millions of Yen）
Buildings and structures Machinery and carriers

Tools, equipment andfixtures

Total

Balance at 31 March 2018

33

30

317

380

Balance at 31 March 2019

－

5

289

294

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

Balance at 31 March 2019

Buildings and structures Machinery and carriers

Tools, equipment andfixtures

44

2,603

－

Total

The obligation under finance lease (Note 16 “Finance lease obligations”) is secured by the leased assets on which the lessor has
ownership.

- 41 -

2,647

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

Goodwill

Intangible assets
SoftwareBalance at 1 April 2017

Technology

Customer
related assets

Others (i)Total

18,03918,94021,436

16,704

6,778

63,857

－

1,561

－

－

71

1,632

combinations
Disposals (ii)

24,489
－

166
(196)

2,495
(8,235)

10,700
－

1,405
(192)

14,765(8,622)

Effect of foreign currency
exchange differences(1,915)

239

(569)

(733)

(106)

(1,169)Additions
Acquisitions through business

Others

(15)

1,208

189

1,094

(1,109)1,383

40,596

21,91815,316

27,765

6,847

71,846

－

1,394

－

－

51

1,445

9,628
－

1

4,939
－

456

10,893(1,090)

5,498
－

(10)

(1,100)exchange differences
Others

659
253

43
77

526
－

(43)
(773)

51
68

577
(629)

Balance at 31 March 2019

51,13622,342

21,33931,887

7,462

83,031

Balance at 31 March 2018
Additions
Acquisitions through businesscombinations
Disposals (ii)
Effect of foreign currency（Millions of Yen）
Accumulated amortisation andGoodwill

impairment losses
Balance at 1 April 2017

Intangible assets
SoftwareTechnology

Customer
related assets

OthersTotal(3,449)(15,419)(11,539)(6,222)(4,264)(37,445)－(1,305)－(1,282)－(2,264)－(440)－(5,291)
－

179

8,235

－

191

8,605

186
(7)

(190)
(913)

200
(3)

188
(492)

128
230

326
(1,178)

Balance at 31 March 2018

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

Amortisation expense (iii)
Impairment loss (iv)－－

(1,246)(76)(1,276)－(2,521)－(514)－(5,558)(76)

Disposals (ii)
Effect of foreign currency

－

1,016

－

－

－

1,016

exchange differences
Others

380
32

(23)
81

(153)
－

206
857

(83)
(8)

(52)
930

(8,293)(17,896)(5,818)(10,249)(4,760)(38,723)

Amortisation expense (iii)
Impairment loss (iv)
Disposals (ii)
Effect of foreign currency
exchange differences
OthersBalance at 31 March 2019

(5,434)－- 42 -

（Millions of Yen）
Carrying amount

Goodwill

Intangible assets
SoftwareTechnology

Customer
related assets

Others

Total

Balance at 1 April 2017

14,590

3,521

9,897

10,482

2,513

26,412

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

Goodwill

Intangible assets
SoftwareBalance at 31 March 2018

Technology

Customer
related assets

Others (i)Total

365,767

197,474

137,995

250,155

61,692

647,317－

12,559－－456

13,015

combinations
Disposals (ii)

86,746－

10(9,822)49,532－44,501
－

4,105
(93)

98,148(9,915)

Effect of foreign currency
exchange differences

5,933

388

(388)

460

5,196

(6,969)610(5,668)287,300

67,230748,094

Additions
Acquisitions through business

OthersBalance at 31 March 2019

2,278

691

4,736
－

460,724

201,301

192,263(Thousands of U.S. Dollars (Note 2))
Accumulated amortisation andGoodwill

impairment losses

Intangible assets
SoftwareTechnology

Customer
related assets

Others

Total

Balance at 31 March 2018

(78,421)(159,001)(39,551)(79,204)(37,433)(315,188)

Amortisation expense (iii)
Impairment loss (iv)－

(11,228)(686)(22,718)－－(4,634)－－(50,073)
(686)

9,158

(11,493)－－

Disposals (ii)
Effect of foreign currency

－
－

9,158

exchange differences
Others

3,422
285

(206)
719

(1,379)
－

1,860
7,723

(744)
(76)

(468)
8,366

Balance at 31 March 2019(74,715)(161,244)(52,423)(92,339)(42,886)(348,891)- 43 -

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

Goodwill

Intangible assets
SoftwareBalance at 31 March 2019

386,009

Technology

Customer
related assets

139,841

194,961

40,057

Others
24,344

Total
399,203

Note:(i) There were no significant internally generated intangible assets for the years ended 31 March 2018 and 2019.
(ii) Loss on disposal of intangible assets is set out in Note 25 “Revenue and expenses (excluding finance income and costs)”.
(iii) Amortisation expense is included in the line item ‘Depreciation and amortisation’ in the consolidated statement of comprehensive
income.
(iv) Refer to Note 8 “Impairment losses” for details of impairment losses.
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 34 “Commitments for expenditure”.
Details of intangible assets in the consolidated statement of financial position are as follows:
As at 31 March 2018

As at 31 March 2019

Carrying amount
Carrying amount Remaining useful Carrying amount (Thousands of Remaining useful(Millions of Yen)

lives (Years)(Millions of Yen)

U.S. Dollars(Note 2))

lives (Years)

2,197

10

1,997

17,995

9

8,492

12

13,353

120,306

10

Health Care related
products

15,354

12

13,676123,215

11

Medical related
products

1,462

8

6,088

54,85213

Health Care related
Technology

products
Medical related
products

Customer related
assets- 44 -

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

Buildings and structures(Millions of Yen)

(Millions of Yen)

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

For the year ended 31 March 2018

For the year ended 31 March 2019

For the year ended 31 March 2019

356

51

463

Machinery and equipment

8

370

3,335

Tools, equipment and fixtures

－

360

3,246

Land

－

128

1,154

Construction in progress

－

113

1,018

Total impairment losses onproperty, plant and equipment

364

1,023

9,216

Software

－

76

686

Goodwill

5,434

－

－

Total impairment losses on
goodwill and intangible assets

5,434

76

686

Total impairment losses

5,798

1,099

9,902

(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.

- 45 -

(2) Impairment losses on assets in business units
For the year ended 31 March 2018
The Group performed an impairment test for the goodwill in Life Care during the year ended 31 March 2018 based on the latest
business plan. As a result, the following impairment losses, mainly for a subsidiary in Brazil, were recognised, as the profitability inthe initial plan is no longer achievable due to a hike in purchase costs along with devaluation of Brazil real.
Recoverable amount was measured at the value in use and determined using cash flow projections based on the financial budgets for a
maximum of five years approved by the Group's management, and a discount rate of 19.8% to 20.9% per annum, which is the SBU's
pre-tax WACC.
(Millions of Yen)
Impairment lossesLife Care
Health Care related products (Eyeglass lenses)
Goodwill

5,434

Total

5,434

For the year ended 31 March 2019No impairment losses on assets were recognised in business units.

- 46 -

(3) Impairment losses on idle assets
For the year ended 31 March 2018, 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 2018:(Millions of Yen)
Impairment lossesLife Care
Buildings and structures

203

Machinery and carriers

0
Total Life Care

204

Information Technology
Buildings and structures
Machinery and carriers

153
7

Total Information Technology

160

Total

364

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)

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

Impairment losses

Impairment lossesLife Care
Buildings and structures
Machinery and carriers

35
105

317
950

Tools, equipment and fixtures
Construction in progress

360
113

3,246
1,018

Software

76

686

690

6,216

Buildings and structures

16

146

Machinery and carriers

265

2,385

281

2,532

128

1,154

Total Corporate

128

1,154

Total

1,099

9,902

Total Life Care
Information Technology

Total Information Technology
CorporateLand- 47 -

(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 16% 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 2018

Life Care
Health Care related

Other

Medical related products

Other

Total

products
Eyeglass lenses

Medical accessories

Japan
Americas791
24,989

733
3,065

－
－

1,524
28,054

Europe
Asia

680
245

839
－

551
－

2,070
245

26,7054,637

551

31,892

Total（Millions of Yen）
As at 31 March 2019

Life Care
Health Care related

Other

Medical related products

Other

Total

products
Eyeglass lenses

Medical accessories

Japan
Americas791
26,303733
12,824－－

1,524
39,128Europe
Asia

623
242

801
－

525
－

1,950
242

27,96014,358525

42,843

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

Life Care

Japan

Other

Health Care related
products

Medical related products

Eyeglass lenses

Medical accessories

7,129

6,602

Americas236,987

Europe
Asia

5,617
2,180
251,913

Total- 48 -

Other

Total

－

13,731

115,546－

352,533

7,214
－

4,733
－

17,5652,180

129,362

4,733

386,009

9. 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 2018

As at / for the year
ended 31 March 2019

As at / for the year
ended 31 March 2019(44)

(1,113)(10,027)

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

(9)

(16)

(145)

(54)
1,476

(1,129)349(10,172)
3,144

Details of the Group’s 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 2018

As at
31 March 2019

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

38.3

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 2018

As at / for the year
ended 31 March 2019

As at / for the year
ended 31 March 2019

The Group’s unrecognised share of net loss (income)

4,420

608

5,481

The Group’s unrecognised share of accumulated net loss

7,394

8,002

72,095- 49 -

10. 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 2017

Recognised in
profit or loss

in othercomprehensive

Business
combinations

As at
31 March 2018

incomeTemporary differences
Enterprise tax payable
Write-down of inventories

543
1,223

30
(190)

Allowance for doubtful
accounts

535

51

Provisions
Accrued expenses

950
3,546

(145)
119

Unrealised profit on inventories
Depreciation and amortisation

2,985
1,931

(464)
(686)

570
－

(24)
－

Impairment losses
Exchange differences on

－

－

－
－

－

573
1,033

2

588

－

－

－
－

－
－

805
3,665

－
－

104
－

3

－

2,521
1,349
546
3

translating foreign operations
2,932

242

10

－

3,184

Subtotal

15,216(1,067)13

106

14,267

Undistributed retained earnings(2,737)545－－(2,192)of subsidiaries
Depreciation and amortisation(7,849)

3,462
－

－
(115)

(1,768)－(6,154)

(50)

(457)

35

－

－

(421)

(11,092)

4,043

(115)

(1,768)(8,932)

2,402
17

(104)
(9)

－
－

419
－

2,716
8

Subtotal

2,418

(113)

－

419

2,724

Total

6,542

2,862

(102)

(1,243)

8,059

OthersNet gain/(loss) on revaluationof available-for-sale financial(164)

assetsOthersSubtotal
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 10 “Deferred
tax and income taxes” (2) Income taxes is due to foreign exchange fluctuations.

- 50 -

（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

202
－

3,184
Subtotal

－

－

－
－

132
－

353
1,511
737
817
4,504

－

－

－
－

274
－

－
－

－
－

124

－

748
127

(1,584)

(10)

－

1,590

14,267

223

114

406

15,010

Undistributed retained earnings(2,192)

(861)

－

－

(3,053)of subsidiaries
Depreciation and amortisation(6,154)767－－(3,001)－(8,389)Impairment losses
Exchange differences on

3,187
1,437

translating foreign operations
OthersFinancial assets measured atfair value through other

(164)

(135)

(300)

comprehensive income
(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

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 10 “Deferredtaxes and income taxes” (2) Income taxes is due to foreign exchange fluctuations.

- 51 -

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

5,164
9,309

(1,987)
3,111

Allowance for doubtful
accounts

5,295

1,344

Provisions
Accrued expenses

7,254
33,020108
5,098

Unrealised profit on inventories
Depreciation and amortisation

22,713
12,151

6,000
792

Impairment losses
Exchange differences on

4,922
28

1,817
－

28,690Subtotal

－

－

－
－

1,191
－

3,177
13,612
6,639
7,361
40,584

－

－

－
－

2,466
－

－
－

－
－

1,119

－

6,739
1,147

(14,270)(94)－

14,326

128,546

2,013

1,025

3,657

135,242

Undistributed retained earnings(19,750)(7,757)－－(27,507)of subsidiaries
Depreciation and amortisation(55,448)

6,907
－

－

(27,040)－(75,582)

28,713
12,943translating foreign operations
OthersFinancial assets measured atfair value through other(1,481)(1,218)(2,699)comprehensive income(3,796)

(204)

－

－

(4,000)(80,475)(1,055)(1,218)(27,040)(109,788)

24,47270(2,922)
188

－

－

－

－

21,551
258

Subtotal

24,543(2,734)－－21,809Total

72,614(1,776)(192)(23,383)

47,263

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 10 “Deferredtaxes and income taxes” (2) Income taxes is due to foreign exchange fluctuations.

- 52 -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 2018

As at
31 March 2019

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

Tax loss carryforwards
Deductible temporary differences
Total

As at
31 March 2019

12,972
4,494

13,1304,128

118,301
37,192

17,466

17,258155,492

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 2018

As at
31 March 2019As at
31 March 2019Year 1680

1,890

17,028Year 2
Year 3

1,819
2,162

1,750
1,134

15,767
10,217

Year 4

1,004
7,308

513
7,843

4,626
70,664

12,972

13,130118,301

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 2018 and 2019, were 290,558 million yen and 322,017 million yen (2,901,312
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.
The Company recognised no deferred tax assets on the tax losses as at 31 March 2018 and 2019.
(2) Income taxes
In Japan, the normal effective statutory tax rates are 30.5% for each of the years ended 31 March 2018 and 2019.
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

For the year ended

For the year ended

31 March 2018

31 March 2019

31 March 2019

Current tax expense: (i)Current year

27,340Prior years
Total current tax expense
Deferred tax expense: (ii)
Origination and reversal of temporary difference
Changes in tax rates

22,915

206,46042(690)(6,214)

27,382

22,225200,246(1,819)

318

2,862

(537)

41

374

Total deferred tax expense(2,356)

359

3,236

Total income tax expense

25,026

22,584203,482

25,026－

22,584－203,482－

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 77 million yen and 194 million yen (1,749 thousand U.S. dollars) for the years ended 31
March 2018 and 2019, respectively.

- 53 -

(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 357 million yen and 471 million yen (4,246 thousand
U.S. dollars) for the years ended 31 March 2018 and 2019, respectively.
(iii) On June 26, 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 March 31, 2007 to 2011. The Company has lodged an objection with TRTB seeking
withdrawal of the assessment in accordance with the relevant law.
On March 29, 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 (71,324 thousand U.S. dollars) is included in “Other current assets” asa suspense payment.
On June 27, 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 March 31 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 (46,618 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 2018

31 March 2019

Effective statutory tax rate

30.5%

30.5%

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

2.0%(0.0)%

0.5%(3.1)%

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

0.2%(15.8)%－

0.3%(15.2)%

rate
Tax rate difference due to the elimination of unrealised profit on inventories(0.4)%(0.0)%

0.0%
0.2%

Increase/decrease in deferred tax liabilities related to undistributed earnings of foreignsubsidiaries(0.4)%

0.6%

Prior year income taxes
Foreign withholding tax arising from dividends from subsidiaries(0.0)%
3.9%(0.5)%
1.0%

Others0.1%

1.1%

Actual tax rate

20.1%

15.6%

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

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

- 54 -

0.2%

11. Other financial assets and liabilities(1) 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

As at

As at

31 March 2018

31 March 2019

31 March 2019

Other financial assets
Available-for-sale financial assets

1,689

－

－

19,434（574)－－

Allowance for doubtful accounts－－

Loans and receivables–net

Loans and receivables
Loans and receivables

18,861－－Other financial assets measured at amortised cost－

17,370156,502

FVTOCI financial assets－

29,863

269,063

20,55047,233425,565

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

15,595

44,103397,358

Total current assets (other short-term financial
assets)

4,955

3,131

28,207

Total(Millions of Yen)

(Millions of Yen)

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

As at

As at

As at

31 March 2018

31 March 2019

31 March 2019

Other financial liabilities
FVTPL financial liabilities
Other financial liabilities measured at amortised

3,171

cost
Total

3,082

27,767

4,455

8,500

76,584

7,626

11,582

104,351

6,983

10,936

98,535

643

646

5,816

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

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

As at 31 March 2019

As at 31 March 2019

Toshiba Memory Holdings Corporation

27,000243,265

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.

- 55 -

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

Cumulative gain or loss

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

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

(Note 2))For the year ended
31 March 201911

For the year ended
31 March 201996

For the year ended
31 March 2019
651

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 was 6
million yen (51 thousand U.S. dollars) in the year ended 31 March 2019.
Details of dividends income recognised from equity instruments are as follows:
Derecognised investment

Investment held as at 31 March 2019

(Millions of Yen)

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

(Millions of Yen)

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

For the year ended
31 March 2019

For the year ended
31 March 2019

For the year ended
31 March 201902

- 56 -

1092

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

(Millions of Yen)

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

As at 31 March 2018

As at 31 March 2019

As at 31 March 2019

Long-term prepaid expenses
Others

2,246
56

2,187
773

19,705
6,967

Total

2,302

2,960

26,672

Suspense payment (Note)

7,916

13,090117,943

Prepaid expenses
Refundable consumption taxes

2,984
2,024

4,131
1,406

37,217
12,667

Non-current: Other assets

Current: Other assets

Others
Total

2,274

2,319

20,893

15,19820,946

188,720(Millions of Yen)

(Millions of Yen)

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

As at 31 March 2018

As at 31 March 2019

As at 31 March 2019

956

2,303

20,748956

2,303

20,748

Accrued salary/bonus/vacation pay
Other accrued expenses

15,32817,08816,357
17,793

147,370
160,309

Advance received/deferred revenue
Accrued consumption taxes

4,437
1,804

5,356
1,897

48,261
17,088Others

2,884

2,769

24,94541,542

44,171

397,974

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.

- 57 -

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

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))As at 31 March 2018

As at 31 March 2019

As at 31 March 2019

Goods and products

36,83540,330363,365

Work in progress
Raw materials

7,521
15,976

8,566
18,953

77,176
170,760

Supplies

11,00911,124

100,229

71,341

78,973

711,530

6

7

66

Total
Inventories expected to be soldafter more than 12 months

The cost of inventories recognised as an expense during the years ended 31 March 2018 and 2019, was 244,443 million yen and
250,891 million yen (2,260,483 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 2018

31 March 2019

31 March 2019

Amount of write-down

1,421

1,756

15,821

Amount of reversal of write-

(31)

－

－

down
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.

14. 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 2018

As at 31 March 2019

As at 31 March 2019

101,145

104,305

939,773

6,782

6,908

62,240

2,675

2,694

24,274

Allowance for doubtful accounts(2,970)(3,061)(27,579)

Total

107,632

110,847

998,708

The credit terms for customers are set between 90 days and 120 days on average.
Refer to Note 22 “Financial instruments” for credit risk management and fair value of trade and other receivables.

- 58 -

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

Yen)

Yen)

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

As at 31 March As at 31 March As at 31 March
2018
2019
2019
Long-term bank loans (excluding current portion)
Current portion of long-term bank loans
Short-term bank loans

1

327

2,944

－

7
1,658

1
1,648
－

12
14,848
－

－

577

5,201

1.15%
－
－
－

Current portion of bonds (ii)Long-term finance lease obligations (Note 16)

14
450

Short-term finance lease obligations (Note 16)
Total interest-bearing debt

222

285

2,567

2,353

2,838

25,572

Total non-current debt

451

904

8,145

Total current debt

1,901

1,934

17,427

Due

(%)
(i)
2021-2032－－－
2020-2024－

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

Item

Issue Date

(Note 2))As at 31

As at 31

As at 31

CollateralInterest rate
(Millions of
(%)
Yen)

Due

March 2018 March 2019 March 2019
HOYA
1 Private
Technosurgical, Inc. Note
Total

－

5
November
2011

14

－

－

－

－

4 April 2018

－

14

－

－

－

－

－

The obligations under finance leases are secured by the leased assets for which the lessor has ownership. Refer to Note 16 “Financelease obligations”. There is no debt with covenants as at 31 March 2019.
Details of the remaining contractual maturity for long-term borrowings and bonds and fair values are set out in Note 22 “Financial
instruments”.

- 59 -

The changes in liabilities arising from financial activities are as follows:(Millions of Yen)
Non-cash changes
As at 1 April 2017

Short-term bankExchange differences

Cash flowon translation offoreign operations

As at 31 March 2018

Others

1,640

－

19

－

1,658

15

(7)

1

－

9

35,028(35,021)

－

6

14

735

(332)

57

212

672

37,418(35,360)

77

218

2,353

loans
Long-term bank
loans
Bond
Finance leaseobligations
Total(Millions of Yen)
Non-cash changes
Exchange

As at 1 April

Cash flow

2018

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

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

Non-cash changes
As at 1 April
2018

Short-term bank

Cash flow

Change of scope

Exchangedifferences onof consolidationtranslation offoreign operations

As at 31 March2019

Others14,942

－

－

(94)

－

14,848

78

(181)

3,061

(1)

－

2,956

loans
Long-term bank
loans
Bond
Finance lease

122

(122)

－

－

－

－

6,054

(2,258)

－

(315)

4,286

7,768

21,916(2,561)

3,061

(410)

4,286

25,572

obligations
Total- 60 -

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

Present value of minimum
lease payments(Millions of Yen) (Millions of Yen) (Thousands of U.S. (Millions of Yen) (Millions of Yen) (Thousands of U.S.
Dollars (Note 2))

Dollars (Note 2))

As at 31 March

As at 31 March

As at 31 March

As at 31 March

As at 31 March

As at 31 March

2018

2019

2019

2018

2019

2019

Amounts payable under financeleases:
Not later than one year
Later than one year but not

258

312

2,807

222

285

2,567

later than five years
Total

488

596

5,373

450

577

5,201

746
(74)

908
(46)

8,180
(413)

672

862

7,768

Less future finance charges
Present value of leaseobligations

672

862

7,768

672

862

7,768

Less amount due for settlement
within 12 months

222

285

2,567

Amount due for settlement after
12 months

450

577

5,201

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.
Certain lease contracts include renewal options or purchase options. However, there are no sub-lease contracts, contingent rents,
escalation payments or specific limitations (such as dividends, additional debt, and further leasing) included in these lease contracts.
The Group’s fair values of lease obligations are set out in Note 22 “Financial instruments”.

- 61 -

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

(Millions of Yen)

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

For the year ended

For the year ended

31 March 2018

31 March 2019

31 March 2019

Minimum lease payments
Contingent rent

8,722
900

8,972
1,062

80,832
9,571

Total

9,622

10,03490,403

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 2018 and 2019, the maturity periods of the outstanding commitments under non-cancellable operating leases are as
follows:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))As at 31 March 2018

As at 31 March 2019

As at 31 March 2019

Not later than one year
Later than one year but not later than five years

1,333
3,194

Later than five years

2,638

763

6,875

7,165

6,758

60,891

Total

1,770
4,225

15,94838,069Operating 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.
Certain lease contracts include renewal options, purchase options or escalation payments. However, there are no sub-lease contracts or
restrictions (such as dividends, additional debt, and further leasing), included in these contracts.

- 62 -

18. 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 2018

As at 31 March 2019

As at 31 March 2019

6,033
(3,906)

6,610(3,907)59,556(35,198)

2,127
－

2,704
66

24,358
595

2,127

2,770

24,953

2,127
－

2,770
－

24,953－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)- 63 -

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 2018

31 March 2019

31 March 2019

(Note 2))Service cost
Current service cost

349

626

5,643

Net interest expense

30

36

322

Components of defined benefit costs

379

662

5,964

27

138

1,248

Actuarial gains and losses arising fromchanges in demographic assumptions

(35)

(8)

(69)

Actuarial gains and losses arising fromchanges in financial assumptions

54

158

1,427

Actuarial gains and losses arising fromexperience adjustments

(135)

(58)

(521)

Adjustments for restrictions on thedefined benefit asset

(0)

61

552

Components of defined benefit costs
recognised in other comprehensive

(88)

293

2,637

291

955

8,601

recognised in profit or loss
Remeasurement of net defined benefit
liability
Return on plan assets

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

For the year ended

For the year ended

For the year ended

31 March 2018

31 March 2019

31 March 2019

(Note 2))Beginning balance

5,539

Business combination

238

－

－

Current service cost
Interest cost

349
116

626
125

5,643
1,122

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

(35)

(8)

(69)

changes in demographic assumptions
Actuarial gains and losses arising from

54

158

1,427

changes in financial assumptions
Actuarial gains and losses arising from

(135)

(58)

(521)

experience adjustments
Benefits paid

(292)

(267)

(2,407)

199

1

5

6,033

6,610

59,556

Effect of foreign currency exchange
differences
Ending balance- 64 -

6,033

54,356

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

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))For the year ended
31 March 2018

For the year ended
31 March 2019

For the year ended
31 March 2019

Beginning balance

3,543

3,906

35,191Business combination

40
85

－

－

Interest income

89

800

Remeasurement gain (loss)
Return on plan assets (excluding amounts

(27)

(138)

(1,248)included in net interest expense)
Contributions from the employer

245

344

3,096

Benefits paid
Effect of foreign currency exchange

(124)
144

(210)
(84)

(1,889)(753)

differences
Ending balance

3,906

3,907

35,198

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

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))For the year ended
31 March 2018

For the year ended
31 March 2019

For the year ended
31 March 2019

Beginning balance

0

－

－

Interest expense

0

－

－

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

(0)

61

552

differences
Ending balance

(0)

5

42

－

66

595

Remeasurement gain (loss)

The fair values of major categories of plan assets as at 31 March 2018 and 2019, are as follows:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))As at 31 March 2018
Cash and cash equivalents

As at 31 March 2019

As at 31 March 2019

745

959

8,642

1,986

1,966

17,718Debt instruments - Foreign governmental
bonds

557

181

1,633

Debt instruments - Foreign bonds
Others

585
33

779
20

7,021
185

3,906

3,907

35,198Equity 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 2018
Discount rate

As at 31 March 2019
2.6%

2.3%

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.

- 65 -

(2) Defined contribution plans
The total expense recognised was 2,341 million yen and 2,416 million yen (17,335 thousand U.S. dollars) for the years ended 31
March 2018 and 2019, 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 2,307 million yen and 1,924 million yen (17,335 thousand U.S. dollars) for the years
ended 31 March 2018 and 2019, respectively.

- 66 -

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

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))As at 31 March 2018

As at 31 March 2019

As at 31 March 2019

Asset retirement obligation

2,423

2,620

23,601

Warranties provision

1,255

1,249

11,249

3,679

3,868

34,851

Total
Non-current liabilities

2,398

2,607

23,485Current liabilities

1,280

1,261

11,366

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

Warranties provision

Total

Balance at 1 April 2018

2,423

1,255

3,679

Provision for the year

230
－

891

1,121

18

8
－

8
18

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

(83)
31

(908)
3

(991)
34

Balance at 31 March 2019

2,620

1,249

3,868

Acquisitions through business combinations
Interest cost associated with passage of time(Thousands of U.S. Dollars (Note 2))
Asset retirement obligation

Warranties provision

Total

Balance at 1 April 2018

21,834

11,31033,145

Provision for the year
Acquisitions through business combinations

2,076
－

10,102
68

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

159
(747)

8,026
68
－

Effect of foreign currency exchange differences

278

26

304

23,601

11,24934,851

Balance at 31 March 2019(8,181)

159(8,928)Note:
Refer to Note 3 “Significant accounting policies (20) Provisions and contingent liabilities assumed in a business combination” fordetails of each provision.

- 67 -

20. 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 2018

As at 31 March 2019

As at 31 March 2019

Accounts payable

26,03629,871

269,132

Notes payable, trade
Processing cost payable

6,286
697

6,903
849

62,1907,645

Other payables
Notes payable for capital investment

13,087449

16,823
442

151,573
3,986

Total

46,55554,887494,526

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.

- 68 -

21. 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 2017

1,250,519,400

389,779,920

388,093,771

6,264

15,89956,439143,244－

8,343,500

8,579,425

－

－

－

－

1,250,519,400

381,436,420

379,514,346

6,264

15,89956,439143,244－－453,257

－

－

－

－

1,250,519,400

381,436,420

379,967,603

6,264

15,89956,439143,244

Decrease (i), (ii)
Balance at
31 March 2018
Increase (ii)
Balance at
31 March 2019

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 2017

1,686,149

6,816

Repurchase of treasury shares
Cancellation of treasury shares

9,334,600(8,343,500)

54,999(47,118)

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

1,225(756,400)

7(3,819)Balance at 31 March 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- 69 -

Amount
Numbers of shares
Balance at 31 March 2018

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

1,922,074

98,080

347
(4)

21
(0)

Decrease on exercise of stock options(453,600)(23,147)

Balance at 31 March 2019

1,468,817

74,954

Repurchase of odd-lot shares
Disposal of odd-lot shares② Other capital reserves
Gain (loss) on
disposal of treasury
sharesStock option (i)Others

Total(Millions of Yen)

(Millions of Yen)

(Millions of Yen)

(Millions of Yen)

(7,603)

3,307(1,049)(5,345)

－

－
(509)

(27)
(1,579)

Share-based payments (i)Change in non-controlling interests (ii)

(1,069)
－
－

(27)
－

317
－

－
(26)

317
(26)

Balance at 31 March 2018

(8,672)

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

Disposal of treasury shares
Share-based payments (i)

(600)
－

(370)
195

－
－

(969)
195

Balance at 31 March 2019(9,272)

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

Balance at 1 April 2017
Repurchase of treasury shares
Disposal of treasury shares

Gain (loss) on
disposal of treasury
sharesStock option (i)Others

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

Balance at 31 March 2018(78,137)

28,060(9,929)(60,006)

Disposal of treasury shares
Share-based payments (i)(5,402)－(3,332)
1,758－－(8,734)
1,758

Balance at 31 March 2019(83,539)

26,487(9,929)(66,982)(i) Refer to Note 23 “Share-based payments” for details of stock options.
(ii) The Group acquired 8.3% of outstanding shares in SISTEMAS INTEGRALES DE MEDICINA, S.A. As a result, the ownershipinterest of the Group increased to 100%. 26 million yen, 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 capitalreserves' in the consolidated statement of financial position.

- 70 -

(3) Retained earnings and dividends
Amount(Millions of Yen)
Balance at 1 April 2017

506,367

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

99,494(47,118)

Dividends
Transfer to retained earnings(29,024)
98

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

Balance at 31 March 2018

4,773,568

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

1,100,125

Dividends
Transfer to retained earnings(307,815)(2,679)Balance at 31 March 2019

5,563,199

Details of dividends are as follows:

Date of resolution

Dividends per
share
(Yen)

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

Record date

Effective date

23 May 2017

45

0.41

17,464

157,349

31 March 2017

1 June 201727 October 2017

30

0.27

11,559104,149

30 September 201730 November 201724 May 2018

45

0.41

17,078

153,871

31 March 2018

1 June 2018

31 October 2018

45

0.41

17,086

153,944

30 September 2018

30 November 201823 May 2019

45

0.41

17,099154,055

31 March 20193 June 2019

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

- 71 -

(4) Non-controlling interests
Amount(Millions of Yen)
Balance at 1 April 2017

4,518

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

(272)
349

Dividends
Increase due to establishment of subsidiaries

(34)
45

Decrease due to acquisition of non-controlling interests(123)

Balance at 31 March 2018

4,484

Profit for the year, attributable to non-controlling interests(31)

Other comprehensive income
Dividends

(140)
(30)

Increase due to acquisition of subsidiaries
Decrease due to acquisition of non-controlling interests

202
67

Balance at 31 March 2019

4,552
Amount(Thousands of U.S. Dollars (Note 2))

Balance at 31 March 2018

40,402

Profit for the year, attributable to non-controlling interests(275)

Other comprehensive income
Dividends(1,261)(275)

Increase due to acquisition of subsidiaries
Decrease due to acquisition of non-controlling interests

1,820
600

Balance at 31 March 2019

41,010- 72 -

22. 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 2018

31 March 2019

31 March 2019

Interest-bearing debt

2,353

2,838

25,572

Less: Cash and cash equivalents

245,835

293,397

2,643,457

Net debt(243,483)(290,559)(2,617,885)

Equity530,677

627,7075,655,529

In order to maximise the corporate value of the Group, cash flows have been a priority of the Group management. As at 31 March2018 and 2019, 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 2019.
Details of interest-bearing debt and equity are described in Note 15 “Interest-bearing debt” and Note 21 “Share capital and other
equity items”, respectively.

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

- 73 -

(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 2018

31 March 2019

31 March 2019

Financial assets
Loans and receivables
Trade and other receivables
Other financial assets (ii)107,632
18,861－－－－

Available-for-sale financial assets
Other financial assets (ii)

1,689

－

－

Trade and other receivables－

110,847

998,708

Other financial assets (ii)－17,370156,502

Financial assets measured at amortised cost

FVTOCI financial assets (iv)
Other financial assets (ii)－29,863

269,063

245,835

293,397

2,643,457

1,117

1,186

10,688

3,171

3,082

27,767

Trade and other payables
Interest-bearing debt

45,4382,353

53,701
2,838

483,838
25,572Other financial liabilities (iii)

4,455

8,500

76,584

Cash and cash equivalents
Financial liabilities
FVTPL financial liabilities (v)Trade and other payables
Other financial liabilities (iii)
Financial liabilities measured at amortised cost

Note:(i) The items above are not included in discontinued operations and disposal groups held for sale. The Group does not have held-tomaturity investments and derivative instruments designated as hedging instruments. Likewise, the Group does not have financial
assets or financial liabilities using the fair value option.
(ii) Other financial assets are included in ‘Long-term financial assets’ or ‘Other short-term financial assets’ in the consolidated
statement of financial position.
(iii) Other financial liabilities are included in ‘Other long-term/short-term financial liabilities’ in the consolidated statement 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 2018 and 2019, 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.

- 74 -

(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 2018

For the year ended 31 March 2019

Average exchange rate
(Yen per each currency)
Thai Baht

3.36

3.43

130.25110.70128.26111.07

Thai Baht
Euro

(152)
(30)

(227)
(9)

U.S. dollar

(404)

(414)

Thai Baht
Euro

(261)
(275)

(353)
(330)

U.S. dollar

(682)

(649)

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 2019
Impact on profit for the year
(Thousands of U.S. Dollars (Note 2))
Thai Baht（2,041)Euro
U.S. dollar(78)(3,730)

Impact on equity(Thousands of U.S. Dollars (Note 2))
Thai Baht
Euro(3,185)(2,977)

U.S. dollar(5,849)- 75 -

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 2018
Trade and other receivables
Trade and other payables
Long-term financial assets
Short-term financial assets

31 March 2018

(28)
2
－

(26)
2
－

(0)
－

(0)
－

(1)
(28)

Short-term interest-bearing debt
Cash and cash equivalents
Total

U.S. dollar
31 March 2019

31 March 2019

(73)
16
－

(70)
10
－

(0)

(0)

(12)

122
(57)

128
(108)

(36)

9

(40)

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

U.S. dollar

31 March 2019

31 March 2019

Trade and other receivables

(234)

(628)

Trade and other payables
Long-term financial assets

18
－

91
－

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

(1)
－

(2)
1,150

Cash and cash equivalents
Total

(107)

(972)

(324)

(361)

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 2018

31 March 2019

Trade and other receivables－

Trade and other payables
Long-term financial assets

0－－

Short-term financial assets
Cash and cash equivalents
Total

U.S. dollar
31 March 2018

31 March 2019

－
－

－
－

－
－

－
－

－
－

－
－

－

(3)

(11)

(1)

0

(3)

(11)

(1)

- 76 -

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

U.S. dollar

31 March 2019
Trade and other receivables
Trade and other payables
Long-term financial assets
Short-term financial assets
Cash and cash equivalents
Total

31 March 2019
－

－

－
－

－
－

－

－

(24)

(5)

(24)

(5)

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 2018

Average
Foreignexchange rate currency (mil)Notional
amountFair value

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

For the year ended
31 March 2019

Average

Foreignexchange rate currency (mil)Forward foreign exchange contracts
N/A- 77 -

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 53 million
yen and 75 million yen (675 thousand U.S. dollars) as at 31 March 2018 and 2019, respectively, as a result of changes in fair value ofthe equity instruments.

- 78 -

(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 2019.
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 recognized 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.

- 79 -

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 2018
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

110,602(2,970)95,642
(369)

7,057
(122)

2,840
(95)

1,029
(127)

805
(206)

3,228
(2,050)Trade and other receivables (net)107,632

95,273

6,935

2,745

902

599

1,178

Other financial assets (gross)
Allowance for doubtful accounts

19,434(574)

18,551
(46)

23
(23)

－
－

14
－

1
－

845
(505)

Other financial assets (net)18,861

18,505

1

－

14

1

340

(Millions of Yen)
Balance at 31 March 2019
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

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)

18,09917,309

78

130

575

(729)

(2)

1
－

5

Allowance for doubtful accounts

(5)

(78)

(130)

(513)

Other financial assets (net)

17,37017,307

1

－

－

－

61

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

Within due
date

Overdue amounts
Within 30days

31 to 60 days 61 to 90 days

91 to 120

Over 120

days

days

Trade and other receivables(gross)

1,026,287

Allowance for doubtful accounts(27,579)(3,880)(683)

Trade and other receivables (net)998,708

873,433

73,064

Other financial assets (gross)

163,066

155,954

702

1,170

5,178

(6,564)

(17)

13
－

49

Allowance for doubtful accounts

(49)

(702)

(1,170)(4,625)

Other financial assets (net)156,502

155,937

13

－

－

－

552

877,31373,747

24,705

9,324

5,828

35,369

(891)

(801)

(2,277)(19,047)

23,814

8,523

3,551

16,322The Group does not hold any collateral or other credit enhancements on the above financial assets, excluding the following:
As at 31 March 2018
Current portion of long-term loans to subsidiaries and affiliates of 8,047 million yen
As at 31 March 2019
Long-term loans to subsidiaries and affiliates of 8,248 million yen (74,315 thousand U.S. dollars)
Details of collaterals are described in Note 31 “Related party disclosures”.

- 80 -

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)
Allowance for doubtful Allowance for doubtful
accounts (Current)
Balance at 31 March 2017

Total

accounts (Non-current)

2,499

559

3,058

Provision for the year

465

65

529

Reduction resulting from settlement for the year

(110)

(32)

(141)

Reduction for the year (reversal)

(41)

(44)

(84)

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

156

26

182

2,970

574

3,544

Balance at 31 March 2018

(Millions of Yen)
Loss

Loss allowance at an amount equal toallowance at
an amountNon-credit-

Credit-Trade andequal to 12month

impairedfinancial

impairedfinancialotherreceivables

expected
credit losses

assetsassetsTotal

lifetime expected credit losses

Balance at 31 March 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

(Thousands of U.S. Dollars (Note 2))
Lossallowance at
an amountequal to 12month
expected
credit losses
Balance at 31 March 2018－

Provision for the year
Reduction resulting from settlement for the year

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

Creditimpaired

Trade andother

financialassetsfinancialassetsreceivables

2,323

2,848

－

－

2,215

5,728

7,943

－

(26)

(57)

(2,293)(2,375)

Reduction for the year (reversal)

－

(222)

(409)

(1,304)(1,935)

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

－

(98)

(9)

(1,310)(1,417)

Balance at 31 March 2019

－

1,976

4,588

27,57934,143- 81 -

26,757

Total

31,928

(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. Temporary cash shortages due to dividends or bonus payments are funded through the issuance of commercial paper, etc.
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 2018

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

46,555
1

46,555
1

46,555
－

－
1

－
－

－
－

－
－

－
－

current portion)
Current portion of long-term bank

7

7

7

－

－

－

－

－

loans
Short-term bank loans

1,658

1,658

1,658

－

－

－

－

－

Current portion of bonds
Long-term finance lease

14
450

14
450

14
－

－

－

－

－

189

152

90

19

－
－

obligations
Short-term finance lease

222

222

222

－

－

－

－

－

obligations
Other financial liabilities

7,626

7,626

1,802

3,409

1,900

459

56

－

56,53356,53350,259

3,599

2,052

549

75

－

Total

(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 5amountcash flows

year

years

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

1,648

－

－

－

－

－

Long-term finance leaseobligations

577

577

1,648
－

259

187

105

26

－

Short-term finance leaseobligations

285

285

285

－

－

－

－

－

Other financial liabilities

11,582

11,582

646

8,875

1,933

129

－

－

69,30869,30857,467

9,186

2,139

254

46

216

Non-derivative liabilities

loans
Short-term bank loans

Total- 82 -

(Thousands of U.S. Dollars (Note 2))
Balance at 31 March 2019Non-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

494,526

494,526

－

－

－

－

2,944

2,944

494,526－－

Long-term bank loans (excluding
current portion)

471

175

175

175

1,947

Current portion of long-term bank
loans

12

12

12

－

－

－

－

－

Short-term bank loans
Long-term finance lease

14,8485,201

14,8485,201

14,848
－

－

－

－

－

2,334

1,681

949

237

－
－

obligations
Short-term finance lease

2,567

2,567

2,567

－

－

－

－

－

obligations
Other financial liabilities

104,351

104,351

5,816

79,96017,413

1,162

－

－

624,449

624,449

517,769

82,765

19,269

2,287

412

1,947

Total

Note:
Guarantee liabilities have been excluded from the above table as the likelihood of execution has been determined as low.
Temporary cash shortages due to dividends or bonus payments are funded in the following ways.
Details of financing methods and status are as follows:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S. Dollars

As at 31 March 2018

As at 31 March 2019

As at 31 March 2019

(Note 2))
Bank overdraft
Used
Unused
Total

－

－

－

65,00065,000585,638

65,00065,000585,638

Commercial paper
Used
Unused
Total

－

－

－

50,00050,000450,491

50,00050,000450,491- 83 -

(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 categorized 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 2018

Level 1

Level 2

Level 3Available-for-sale financial assets

1,072

－

Total

Total
618

1,689

1,072

－

618

1,689

FVTPL financial liabilities

－

－

4,289

4,289

Total

－

－

4,289

4,289
(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

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

Level 1

Level 2

Level 3Total

FVTOCI financial assets

13,505－

255,558

269,063

Total

13,505－

255,558

269,063

FVTPL financial liabilities－－

38,45538,455

Total

－

－

38,45538,455Note:
As at 31 March 2018
No transfers occurred between Levels 1, 2 and 3 during the year ended 31 March 2018.
As at 31 March 2019
No transfers occurred between Levels 1, 2 and 3 during the year ended 31 March 2019.

- 84 -

② Reconciliation of financial assets categorised at Level 3 from beginning balance to ending balance(Millions of Yen)
For the year ended
31 March 2018

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

FVTPL financial liabilities

Opening balance

666

3,771

Total gains or losses recognised:

(48)

(36)

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

(73)
25

Purchase
Increase

0
－

174
(210)
－
802

Settlement

－

(248)

Closing balance

618

4,289
(Millions of Yen)

For the year ended
31 March 2019

Fair value measurement as at the end of the reporting period
FVTOCI 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(Thousands of U.S. Dollars (Note 2))
For the year ended
31 March 2019

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

FVTPL financial liabilities

Opening balance

5,567

38,639Total gains or losses recognised:

3,437
－

(1,487)- in profit or loss (i)- in other comprehensive income (i)3,437Purchase (ii)
Increase

246,649
－

Sale

(96)
－

Settlement
Closing balance

255,558(2,497)
1,010
－
2,109
－
(806)
38,455Note:
As at 31 March 2018(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, losses related to available-for-sale financial assets are included in‘Net gain or loss on revaluation of available-for-sale financial assets’ in the consolidated statement of comprehensive income. Net
gain or loss on FVTPL liabilities are included in ‘Exchange differences on translation of foreign operations’ in the consolidated
statement of comprehensive income.
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.

- 85 -

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.
(ii) On 1 June 2016, the Group invested 27,000 million yen (243,265 thousand U.S. dollars.) in K.K. Pangea (Toshiba Memory
Holdings Corporation).

- 86 -

(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 2018

As at 31 March 2019

As at 31 March 2019

Carrying
amountFair value

Carrying
amountFair value

Carrying
amountFair value

8,047
4,985

8,185
4,985

－

－

－

－

－

－

－

－

－
－

－
－

8,248

8,676

74,31578,167

5,100

5,100

45,94845,94813,032

13,17013,348

13,775120,262

124,114

1

1

327

368

2,944

3,315

1
－

1
－

12
－

12
－

577

6,186

AssetsLoans and receivables
Long-term loans to subsidiaries and affiliates
Lease deposits
Financial assets measured at amortised cost
Long-term loans to subsidiaries and affiliates
Lease deposits
Total
Liabilities
Financial liabilities measured at amortised cost
Long-term bank loans (excluding current
portion)Current portion of long-term bank loans

77Current portion of bonds
Long-term finance lease obligations

14
450

14
537

687

5,201

Short-term finance lease obligations
Long-term guarantee deposits

222
－

236
－

285

303

2,567

2,726

7,855

7,665

70,76869,063

Total

694

795

9,045

9,024

81,49281,302- 87 -

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 bonds issued by the Company is measured by discounting the total of principal and interest using an interest ratethat reflects each bond’s credit risk.
· 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 2018

Level 1

Level 2

Level 3

Total

AssetsLoans and receivables
Long-term loans to subsidiaries and affiliates

－
－

8,185
4,985

－

Lease deposits

－

8,185
4,985

Total

－

13,170－13,170Financial liabilities measured at amortised cost
Long-term bank loans (excluding current portion)

－

1

－

1

Current portion of long-term bank loans
Current portion of bonds

－
－

7
14

－
－

7
14

Long-term finance lease obligations
Short-term finance lease obligations

－
－

537
236

－
－

537
236

Total

－

795

－

795

Liabilities(Millions of Yen)
As at 31 March 2019

Level 1

Level 2

Level 3

Total

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

－

8,676

－

Lease deposits
Total

8,676

－

5,100

－

5,100

－

13,775－

13,775Long-term bank loans (excluding current portion)
Current portion of long-term bank loans

－
－

368
1

－
－

368
1

Long-term finance lease obligations
Short-term finance lease obligations

－
－

687
303

－
－

687
303

Long-term guarantee deposits

－

7,665

－

7,665

Total

－

9,024

－

9,024

Liabilities
Financial liabilities measured at amortised cost

- 88 -

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

Level 1

Level 2

Level 3

Total

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

78,167－

Lease deposits
Total

78,167－45,948－45,948－124,114－124,114

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

－

3,315

－

3,315

Current portion of long-term bank loans
Long-term finance lease obligations

－
－

12
6,186

－
－

12
6,186

Short-term finance lease obligations
Long-term guarantee deposits

－

2,726

－

2,726

－

69,063－69,063

Total－

81,302－81,302

Liabilities- 89 -

23. Share-based payments(1) Details of share-based payments
The Company has a stock option plan. The purpose of the plan 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.
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-based payment transactions. Expense recorded in the consolidated
statement of comprehensive income from undertaking shared-based payment transactions was 317 million yen and 195 million yen(1,758 thousand U.S. dollars) for the years ended 31 March 2018 and 2019, respectively.
Details of the stock options that are outstanding for the years ended 31 March 2018 and 2019, are as follows:No.

Number of shares

Grant date

Expiry date

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

8

1,036,000

28 Nov 2008

30 Sep 2018

1,556

952

10
11

1,247,600
1,225,600

8 Dec 2009
7 Dec 2010

30 Sep 201930 Sep 2020

2,215
1,947

2,784
1,861

12
13

680,800
560,800

17 Jan 201216 Jan 2013

30 Sep 2021
30 Sep 2022

1,616
1,648

1,427
1,707

14
15

758,800
582,400

15 Jan 201414 Jan 2015

30 Sep 2023
30 Sep 2024

2,846
3,972.5

3,141
3,585

16
17

460,400
386,800

13 Jan 201617 Jan 201730 Sep 2025
30 Sep 2026

4,928
4,839

3,407
3,740

18
19

40,400123,600

13 Feb 2018
2 Oct 2018

30 Sep 2027
30 Sep 2028

5,765
6,590

4,009
6,345

(2) Determination of stock option value
The weighted-average fair value of the stock options granted during the years ended 31 March 2018 and 2019, was 4,009 yen and
6,345 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 2018 and 2019.
Expected volatility was determined based on recent historical daily share price volatility from the grant date to the forecasted
remaining period.
No. 18
Share price at grant date (Yen)
Exercise price (Yen)
Expected volatility
Expected remaining option life (Years)
Dividends yield
Risk free rate

No. 19

5,421

6,855

5,765
26.63%

6,590
26.46%

5.9
1.38

6.2
1.09

(0.06)%(0.01%)- 90 -

(3) The number and weighted-average exercise prices of stock options
The weighted-average exercise price of the outstanding options was 3,604 yen and 3,911 yen as at the years ended 31 March 2018 and2019, respectively. Weighted-average remaining contractual life was 5.9 years and 5.4 years as at 31 March 2018 and 2019,respectively.
For the year ended 31 March 2018

For the year ended 31 March 2019

Weighted-average
Number of shares

exercise price(Yen)

Weighted-average
Number of shares

exercise price(Yen)

2,741,200

3,415

1,924,400

3,604

40,4005,765

123,600

6,590

Forfeited (i)(56,400)

4,071(41,600)

4,279

Exercised(756,400)

2,962(453,600)

3,527

Expired(44,400)

4,230(42,800)

1,556

Outstanding at the end of the period

1,924,400

3,604

1,510,000

3,911

Exercisable at the end of the period

1,260,900

3,003

1,086,400

3,316

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 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.
Stock options exercised during the year ended 31 March 2018, were as follows:No.

Number of shares exercised

Exercise period

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

7
8

5,200
48,400April 2017
June 2017 to March 2018

5,274
6,120

10
11

54,80069,200April 2017 to March 2018
April 2017 to February 2018

5,918
5,763

12
13

52,80054,400April 2017 to February 2018
April 2017 to March 2018

6,006
6,122

14
15

203,600
195,200

April 2017 to March 2018
April 2017 to February 2018

5,930
6,037

16
17

53,60019,200July 2017 to February 2018
October 2017 to January 2018

6,173
6,169

Total

756,400

Note:
The number of shares exercised and the amount paid by key management personnel are 450,000 shares and 1,274 million yen,respectively.
- 91 -

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

Japan

Asia

Americas

EuropeOthersTotal

989,496

260,716

611,249

632,844

42,983

Medical related products

174,201

118,512

189,467

318,893

25,804

826,877

Life Care total

1,163,696

379,227

800,716

951,737

68,7873,364,163

Electronics related products

185,656

1,032,965

82,48819,934－

1,321,043

Imaging related products

101,685

257,897

5,385

3,738

12

368,717

Information Technology total

287,342

1,290,862

87,873

23,67212

1,689,760

24,958

5,364

4,447

9,155

－

43,923

1,475,995

1,675,453

893,035

984,563

68,7995,097,847

Life Care
Health Care related products

2,537,287

Information Technology

Other
Total revenue from externalcustomers

Note:
Geographical areas are based on the location of the customers.
(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 1 April 2018
Receivables from contracts
with customers
Contract liabilities

As at 31 March 2019

As at 31 March 2019104,957

108,152

974,434

3,308

4,011

36,139

Note:
Revenue recognised in the year ended 31 March 2019 that was included in the contract liability balance as at 1 April 2018 was 2,401
million yen (21,635 thousand U.S. dollars).

- 92 -

(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.

- 93 -

25. 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 2018

For the year ended
31 March 2019

For the year ended
31 March 2019

Commission

399

320

2,886

Rent
Government grants

135
159

121
398

1,093
3,586

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

462

674

6,071

Insurance proceeds
Settlement proceeds

27
1,697

35
－

318
－

Others

1,119

2,227

20,062

3,999

3,775

34,015

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

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))For the year ended
31 March 2018

For the year ended
31 March 2019

For the year ended
31 March 2019

Employee benefits expense
Depreciation and amortisation

9,014
2,056

9,551
2,023

86,04918,226

Commission expenses
Other expenses

2,420
9,800

3,445
11,081

31,03899,839Total R&D expenses recognised as incurred

23,29026,100235,152

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

- 94 -

(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 2018

31 March 2019

31 March 2019

116,431

121,016

1,090,328

349

626

5,643

2,341

2,416

21,771

2,690

3,043

27,414Retirement benefit
Defined benefit
Defined contribution
Retirement benefit total
Share-based payments (stock option)

317

195

1,758

2,307
6,076

1,924
5,829

17,33552,518

127,820132,006

1,189,353

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 2018

31 March 2019

31 March 2019

(Note 2))

Packaging/shipping/transportation
Travel10,6396,670

11,268
6,647

101,52259,893Rent
Utilities

7,604
12,038

8,056
12,16072,585109,557

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

12,86724

13,378
182

120,533
1,637

Loss on disposal of property, plant andequipment

415

Loss on disposal of intangible assets
Others17
68,269

609
－

5,487
－

75,710682,134

118,543

128,010

1,153,348

Total other expenses- 95 -

26. 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 2018

31 March 2019

31 March 2019

Finance income
Interest income
Cash and cash equivalents, loans andreceivables

1,554

－

－

Cash and cash equivalents, financial
assets measured at amortized cost

－

2,763

24,893

Dividend income
Available-for-sale financial assets

8

－

－

－

10

92

1,562

2,773

24,986

409

76

687

30
19

36
18

322
159

241

262

2,356

Available-for-sales financial assets (i)

73

－

－

Total finance costs

771

391

3,524

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

Note:(i) Impairment losses were recognised on listed shares and the shares of private companies categorised as available-for-sale financial
assets due to significant or prolonged decline in the fair values against the carrying amount.

- 96 -

27. Other comprehensive income
For the years ended 31 March 2018 and 2019, 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 2018

31 March 2019

31 March 2019

Items that may be reclassified subsequently
to profit or loss:① Net gain/(loss) on revaluation ofavailable-for-sale financial assets (i)Gains (losses) arising during the year
Reclassification adjustments to profit orloss for the year
Total

350

－

－

73

－

－

423

－

－

(2,680)7,059

63,599

(32)

(447)

(4,027)(2,712)

6,612

59,572

(9)

(17)

(149)

② Exchange differences on translation offoreign operations (ii)
Gains (losses) arising during the year
Reclassification adjustments to profit orloss for the year
Total
③ Share of other comprehensive income ofassociates
Gains (losses) arising during the year
Reclassification adjustments to profit orloss for the year

0

0

4

Total

(9)

(16)

(145)

tax
Income tax relating to components of other(2,299)6,596

59,427comprehensive income
Total other comprehensive income/(loss)

(112)

124

1,119

(2,410)6,720

60,547

Other comprehensive income/(loss) before(net of tax)Note:(i) ‘Net gain/(loss) on revaluation of available-for-sale financial assets’ represents unrealised gain or loss on available-for-salefinancial assets at the end of the reporting period.
(ii) ‘Exchange differences on translation of foreign operations’ consist of differences on foreign currency conversion for financial
statements of foreign operations.

- 97 -

Deferred and current taxes on each item of other comprehensive income for the years ended 31 March 2018 and 2019, 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 2018

31 March 2019

31 March 2019

(Note 2))

Total

Tax

Net of tax

Total

Tax

Net of tax

Total

Tax

Net of tax

Other comprehensive
income attributable toowners of the Company① Net gain/(loss) onrevaluation ofavailable-for-salefinancial assets② FVTOCI financial assets

380
－

(108)
－

272
－

－

－

－

－

－

－

839

(142)

697

7,560

(1,278)6,282(3,026)

3(3,023)

6,729

124

6,853

60,627

1,119

61,746

88

10

98

(293)

(10)

(303)

(2,637)(94)(2,731)

(9)

－

(9)

(16)

－

(16)

(145)

－

(145)

(2,566)(95)(2,661)

7,259

(28)

7,231

65,405(252)

65,152

43
－

(7)
－

36
－

－

－

－

－

－

－

(30)

7

(23)

(267)

60

(207)

313

－

313

(117)

－

(117)

(1,054)－(1,054)

356

(7)

349

(147)

7

(140)

(1,322)60(1,261)(2,210)(102)(2,312)

7,113

(21)

7,091

64,083(192)

63,891③ Exchange differences ontranslation of foreign
operations④ Remeasurements of the
net defined benefit
liability (asset)⑤ Share of othercomprehensive incomeof associates
Subtotal
Other comprehensive
income attributable to non-controlling interests① Net gain/(loss) onrevaluation ofavailable-for-salefinancial assets② FVTOCI financial assets③ Exchange differences ontranslation of foreign
operations
Subtotal
Total other comprehensive
income/(loss)- 98 -

28. 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 2018

31 March 2019

31 March 2019

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

258.46－321.55－2.90－

258.46321.552.90

257.88－320.96－2.89－

257.88320.96

2.89(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

For the year ended

For the year ended

For the year ended

31 March 2018

31 March 2019

31 March 2019

(Note 2))

Profit attributable to owners of theCompany from continuing operations

99,494

122,103

1,100,125－－－

99,494

122,103

1,100,125

Profit attributable to owners of theCompany from discontinued operations
Profit used in the calculation of basic
earnings per share(b) Weighted-average number of ordinary shares used in the calculation of basic earnings per share(Shares in thousands)
For the year ended 31 March 2018

For the year ended 31 March 2019

Weighted-average number of ordinary
shares384,946- 99 -

379,735

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 2018

For the year ended
31 March 2019

For the year ended
31 March 2019

(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

99,494

122,103

1,100,125－－－

99,494

122,103

1,100,125(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 2018
Weighted-average number of ordinary shares

For the year ended
31 March 2019

384,946

379,735865

701

385,811

380,435

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

29. Non-cash transactions
Non-cash transactions for the years ended 31 March 2018 and 2019, consisted of acquiring property, plant and equipment through new
finance lease arrangements in the amount of 212 million yen and 476 million yen (4,286 thousand U.S. dollars), respectively.

- 100 -

30. Subsidiaries(1) Composition of the Group
Information about the composition of the Group as at 31 March 2018 and 2019, is as follows:

Reportable Segment
Life Care

Information Technology

Number of wholly-owned subsidiaries

Location

As at 31 March 2018

As at 31 March 2019

U.S.A.

14

9

ARGENTINA

1

1

UNITED KINGDOM

4

4

ITALY

2

2

INDIA

3

3

INDONESIA

3

3

AUSTRALIA

1

1

NETHERLANDS

44

CANADA

6

4

SINGAPORE

3

3

SWITZERLAND

1

1SWEDEN

1

1

SPAIN

2

2

THAILAND

3

3

CZECH REPUBLIC

1

1

DENMARK

1

1

GERMANY

4

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

44RUSSIA

2

2

SOUTH KOREA

3

3

TAIWAN

1

1

CHINA

7

8

SOUTH AFRICA

1

1

JAPAN

6

6

U.S.A.

1

1

SINGAPORE

1

1

THAILAND

2

2

PHILIPPINES

3

2

VIETNAM

4

4MALAYSIA

1

1

LAOS

－

1

SOUTH KOREA

1

1

TAIWAN

1

1

CHINA

6

6

JAPAN

1

1

- 101 -

Reportable Segment
Other

Information Technology

As at 31 March 2018

As at 31 March 2019

U.S.A.

3

3

UNITED KINGDOM

1

1

AUSTRALIA

1

1

NETHERLANDS

34SINGAPORE

1

1

SWEDEN

1

1

SPAIN

1

1

GERMANY

1

1

FRANCE

1

1

SOUTH KOREA

1

1

JAPAN

1

2

Reportable Segment
Life Care

Number of wholly-owned subsidiaries

Location

Number of non-wholly-owned subsidiaries

Location

As at 31 March 2018

As at 31 March 2019IRELAND

1

1

U.S.A.

1

1

UNITED KINGDOM

1

1

NETHERLANDS

1

1

GERMANY2

2

FRANCE

1

2

VIETNAM

1

1

BELGIUM

1

1

CHINA

4

4

JAPAN

3

2

PHILIPPINES

1

1

CHINA

2

2

- 102 -

(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 2018 March 2019 March 2018 March 2019 March 2019 March 2018 March 2019 March 2019
WASSENBURG MEDICALNETHER
LANDS

B.V. and six
and otherother companies countries

49.0%

49.0%

(47)

4

36

3,101

2,968

26,744

50.0%

50.0%

(232)

(71)

(644)

980

914

8,234

SEIKO
OPTICAL
PRODUCTS
CO., LTD. andfour otherJAPANand othercountries

companies
Individually immaterial subsidiaries with non-controlling interests
Total

404

670

6,033

4,484

4,552

41,010

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 2018

As at / for the year
ended 31 March 2019

As at / for the year
ended 31 March 2019

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

3,511

3,014

27,156

Current assets

4,749

4,871

43,890Non-current liabilities

(471)

(340)

(3,060)Current liabilities(1,461)(1,488)(13,411)Equity attributable to owner of the Company

3,227

3,089

27,834Non-controlling interests

3,101

2,968

26,742

Revenue

6,434

6,638

59,810

Expenses(6,530)(6,630)(59,738)

(96)

8

72

Other comprehensive income/(loss)

518

(279)

(2,512)Comprehensive income/(loss)

422

(271)

(2,440)

Profit/(loss) for the year

Dividends paid to non-controlling interests

－

－

－

Net cash flow from operating activities

243

(180)

(1,626)

Net cash flow from investing activities

(229)

(133)

(1,198)Net cash flow from financing activities

(10)

(7)

(64)

3

(321)

(2,888)Net cash flow

- 103 -

(Millions of Yen)

(Millions of Yen)

(Thousands of U.S. Dollars)

As at / for the year
ended 31 March 2018

As at / for the year
ended 31 March 2019

As at / for the year
ended 31 March 2019

SEIKO OPTICAL PRODUCTS CO., LTD.
and four other companies
Non-current assets

1,328

923

8,318

Current assets

12,131

12,419111,897

(13)

(78)

(704)

(11,199)(11,108)(100,084)

1,123

1,078

9,714

Non-current liabilities
Current liabilities
Equity attributable to owner of the Company
Non-controlling interests

1,123

1,078

9,714

Revenue

32,481

31,454283,390

Expenses(32,970)(31,555)(284,306)

Profit/(loss) for the year

(488)

(102)

(916)

Other comprehensive income/(loss)

169

11

104

Comprehensive income/(loss)

(319)

(90)

(812)

－

－

－

Dividends paid to non-controlling interests
Net cash flow from operating activities

337

804

7,243

Net cash flow from investing activities

(60)

(40)

(359)

Net cash flow from financing activities

268

31

276

Net cash flow

546

795

7,160

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.

- 104 -

(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

2018

2019

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%

95.0%

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%INDONESIA

100.0%

100.0%HOYA LENS INDIA PRIVATELIMITEDLife Care

HOYA LENS VIETNAM LTD. Life Care
DAEJEON DAEMYUNG
OPTICAL (HANGZHOU) CO., Life Care
LTD.

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

PT.VISION-EASE ASIA

Life CarePERFORMANCE OPTICS
KOREA, LTD.

Life Care

Health Care related
products

SOUTH KOREA

100.0%

100.0%HOYA HOLDINGS N.V.

Health Care relatedLife Care andproducts and EU
Corporate
headquarters

NETHERLANDS

100.0%

100.0%GERMANY

100.0%

100.0%HOYA LENSDEUTSCHLAND GMBH

Life Care

products

Health Care related
products

HOYA LENS U.K. LTD.

Life Care

Health Care related
products

UNITED
KINGDOM

100.0%

100.0%HOYA LENS ITALIA S.P.A.

Life Care

Health Care related
products

ITALY

100.0%

100.0%HOYA LENS IBERIA S.A.

Life Care

SPAIN

100.0%

100.0%HOYA LENS FRANCE S.A.S.

Life Care

FRANCE

100.0%

100.0%

Health Care related
products
Health Care related
products

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

Health Care related
products

TURKEY

100.0%

100.0%HOYA LENS CANADA, INC.

Health Care related
products

CANADA

100.0%

100.0%U.S.A.

100.0%

100.0%U.S.A.

50.0%

50.0%

JAPAN

50.0%

50.0%

－

100.0%HOYA OPTICAL LABS OF
AMERICA, INC.
SEIKO OPTICAL PRODUCTS
OF AMERICA, INC.
SEIKO OPTICAL PRODUCTS
CO., LTD.
PENTAX MEDICAL(PENANG) SDN. BHD.

Life Care
Life Care
Life Care
Life Care
Life Care

Health Care related
products
Health Care related
products
Health Care related
products
Medical related
products- 105 -

MALAYSIA

Name of subsidiary

Reportablesegment

Proportion ofshares held

Proportion ofshares held

As at 31 March2018

As at 31 March2019

GERMANY

100.0%

100.0%

ITALY

100.0%

100.0%

Major products/
services in thereportable segment
Medical related

Location

PENTAX EUROPE GMBH

Life CarePENTAX ITALIA S.R.L

Life CarePENTAX U.K. LTD.

Life Care

Medical related
products

UNITED
KINGDOM

100.0%

100.0%PENTAX CANADA, INC.

Life Care

Medical related
products

CANADA

100.0%

100.0%U.S.A.

100.0%

100.0%U.S.A.

100.0%

100.0%MICROLINE SURGICAL, INC. Life Care
HOYA SURGICAL OPTICS,
INC.

Life Care

products
Medical related
products

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- 106 -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

2018

2019

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- 107 -

31. 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 2018:
Name ofaffiliates

Nature of related party transactions

Transaction amount

Outstanding balance(Millions of Yen)

(Millions of Yen)

Incorporation of deferred interests
Affiliates

AvanStrate, Inc.

55

receivable into principal (Note)
Partial repayment of loans (Note)

173

8,047

Interest received

264

58

Advance paid

196

－

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 2019:
Name of

Nature of related

Transaction

Outstanding

Transaction

Outstanding

affiliates

party transactions

amountbalanceamountbalance(Millions of
Yen)(Millions of Yen)

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

(Note 2))

Incorporation ofdeferredinterests
Affiliates

AvanStrate, Inc.

201

8,248

1,812

74,315

214

56

1,924

507

receivable into
principal (Note)
Interest received

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.

- 108 -

(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 2018

31 March 2019

31 March 2019

Short-term benefits
Share-based payments

536
102

520
98

4,688
881

Total remuneration of key management personnel

638

618

5,569

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.

- 109 -

32. Business combinations
The Group acquired certain companies through business combinations during the year ended 31 March 2019 as follows:(1) Overview of acquired companies

Reportablesegments

Name of acquirees Primary business

Percentage of

Total

Total
consideration

voting equity
interests

considerationtransferredtransferred(Thousands ofacquired(Million Yen)

U.S. Dollars(Note 2))15 Jan 2019100%

20,204

182,030

15 Jan 2019

100%

－

－

Acquisitiondate

Acquisition
methodResearch,development
Mid labs Ltd.

and sales ofophthalmic

Medical related
products

Acquisition ofsharesmedicalsurgical devices
MedicalResearch,

Instrument
Development

development
and sales ofLaboratories andthree otherophthalmic
medicalcompanies

surgical devices

Medical related
products

Acquisition ofshares(indirect)(2) Primary reasons for business combinations
The acquisition of Mid Labs will help to broaden our product portfolio and enable us to better serve our customers’ broader needs
for high-quality ophthalmic products, equipment and services. Through this, the Group aims to accelerate the growth of IOL sales
and further solidify its position as the fastest growing IOL company globally.
(3) Consideration for the acquisitions(Millions of Yen)

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

AmountCash and cash equivalents
Trade and other receivables (Note)
Non-current liabilities (Note)
Total
Note:
The amount is unsettled as at 31 March 2019.

- 110 -

Amount20,651(549)

186,060(4,945)102

915

20,204

182,030

(4) Expenses related to acquisition
Expenses of 185 million yen (1,670 thousand U.S. dollars) related to the acquisition for the year ended March 31, 2019 is included
in “Commission expense” in the consolidated statement of comprehensive income.
(5) The amounts of assets acquired and liabilities assumed at the acquisition dates are as follows:(Millions of Yen)

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

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

586
10,0295,280
90,358Deferred tax assets
Non-current assets other than above

406
4

3,657
38

11,02599,333

1,278

11,518Sub-total
Current assets
Inventory
Trade and other receivables(Before deducting allowance for doubtful accounts)
Cash and cash equivalents
Current assets other than above
Sub-total
Total assets
Non-current liabilities (Note)
Current liabilities

693

6,241

1,427
791

12,854
7,127

4,189

37,74015,214137,074(3,410)(30,725)(903)(8,138)

Total liabilities(4,313)(38,863)

Fair value of identifiable acquired net assets

10,90098,211Note:
Intangible assets mainly consist of “Technology” and “Customer related assets”.
Deferred tax liabilities are mainly recognised on temporary differences arising from recognition of identifiable intangible assets.
(6) Goodwill arising from the acquisitions(Millions of Yen)

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

AmountConsideration for acquisitions
Less: Fair value of identifiable acquired net assets

Amount20,204(10,900)

182,030(98,211)9,303

83,820Goodwill arising in acquisitions

Note:
Goodwill recognised consists of “control premium”, “expected synergy” and “human resources”.
Goodwill arising from the acquisitions are not tax-deductible.
(7) Net cash outflows for the acquisitions of subsidiaries(Millions of Yen)
(Millions of Yen)

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

AmountConsideration for the acquisitions paid in cash
Less: Cash and cash equivalents owned bysubsidiaries acquired
Net cash outflows for the acquisitions of subsidiaries

Amount20,651

186,060(1,427)(12,854)

19,224

173,207(8) Impact of the Business combinations on the Group’s financial results
The disclosure of revenue and profit included in the consolidated comprehensive income, and of the pro forma revenue and profit asthough the acquisition date for these business combinations had been on 1 April 2018, are omitted due to immateriality.

- 111 -

33. Contingent liabilities
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 seeks information with respect to duodenoscopes that Pentax and its affiliated companies manufactured
and sold. The Company and Pentax are cooperating with the U.S. Department of Justice and responding to its requests.
Depending on future developments, there is a possibility that this may impact on the consolidated financial results, however, it is notpossible to make a reasonable estimate of this impact at present.

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

(Millions of Yen)

(Thousands of U.S. Dollars

As at 31 March 2018

As at 31 March 2019

As at 31 March 2019

(Note 2))
Commitments for the acquisition ofproperty, plant and equipment andintangible assets

10,64923,378210,631

35. Subsequent events
Share Repurchase
The Board of Directors made a resolution to purchase the Company’s treasury stock on 7 May 2019 based on Article 39 of the
Articles of Incorporation pursuant to the first paragraph of Article 459 of the Companies Act.
1. Reason for purchase of treasury stock
The Company decided to acquire its own shares with the aim of shareholders benefit, improving capital efficiency and ensuring aflexible capital policy.
2. Outline of repurchase(1) Class of shares: Common stock issued by Hoya Corporation(2) Total number of shares: Up to 8.6 million shares (2.26% of total shares outstanding, excluding treasury stock)(3) Total purchase cost: Up to 60 billion yen (54,059 thousand U.S. dollars)(4) Period for purchase: 8 May 2019 to 28 October 2019(5) Method of purchase: Purchase at the Tokyo Stock Exchange based on discretionary investment contract(6) Others: Purchased stocks are planned to be cancelled with the aim of shareholders benefit
Resolution on cash dividends
On 23 May 2019, a resolution was made by the Company’s board of directors for the payment of a cash dividend to shareholders ofrecord on 31 March 2019 of 17,099 million yen (154,055 thousand U.S. dollars) (45 yen per common share).

36. Approval of financial statements
The consolidated financial statements for the year ended 31 March 2019, were approved by Mr. Ryo Hirooka, the chief financial
officer of the Group on 7 June 2019.

- 112 -