HOYA Corporation and its subsidiaries
Consolidated Financial Statements under IFRSs
and Independent Auditor's Report
For the year ended 31 March 2013HOYA Corporation

Contents

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

3

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

4

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

6

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

8

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

11

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

13

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

13

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

13

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

17

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

32

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

33

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

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...........................................................................................................................

56

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

57

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

57

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

58

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

59

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

60

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

61

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

62

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

65

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

66

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

67

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

70

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

85

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

86

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

89

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

91

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

92

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

94

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

96

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

98

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

99

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

101

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

102

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

107

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

107

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

108

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

108

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

108

3

Consolidated Statement of Financial Position
HOYA Corporation and its subsidiaries
As at 31 March 2013
(Thousands of(Millions of Yen)

(Millions of Yen)

U.S.Dollars

Notes

As at 31 March 2012

As at 31 March 2013

As at 31 March 2013

Property, plant and equipment—net

6,8,37

108,404

140,747

1,496,508

Goodwill

7,8,34(6)

1,431

8,367

88,959Intangible assets

204,031(Note 2))ASSETSNON-CURRENT ASSETS:

7,8,34(5),37

13,164

19,189Investments in associates

912,935534

5,682Long-term financial assets

11,23

8,442

9,150

97,287

Other non-current assets

8,12,19

2,119

2,467

26,228Deferred tax assets

10

Total non-current assets

25,066

15,464

164,424

171,561

195,917

2,083,120

CURRENT ASSETS:
Inventories

13

62,972

66,720709,412Trade and other receivables

14,23

75,691

88,824944,431

Other short-term financial assets

11,23

47,272

9,210

97,924

874

722

7,672

Other current assets

12

6,738

7,786

82,785

Cash and cash equivalents

15,23

204,772

248,8962,646,421

398,318

422,157

4,488,644

5,356

－

－

Income tax receivables

Sub total
Assets held for sale

24

Total current assets

403,674

422,157

4,488,644

Total assets

575,235

618,074

6,571,7644

(Thousands of(Millions of Yen)

(Millions of Yen)

U.S.Dollars

As at 31 March 2012

As at 31 March 2013

As at 31 March 2013

(Note 2))Notes

EQUITY AND LIABILITIESEQUITY
Share capital

22(1)

6,264

6,264

66,605

Capital reserves22(1)15,89915,899169,045(113,895)

Treasury shares22(2)(10,928)(10,712)

Other capital reserves22(2),25(2,505)(2,313)(24,588)

Retained earnings

22(3),38

442,898

485,953

5,166,966(66,826)(24,220)(257,523)

384,802

470,872

5,006,608

(149)

(187)

(1,984)

384,653

470,685

5,004,624

646,863

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

22(4)Total equity
LIABILITIESNON-CURRENT LIABILITIES:Interest-bearing long-term debt

16,17,2311,2360,821－

60,837

Other long-term financial liabilities

149

1,581

Retirement benefit obligations

19

5,533

1,309

13,922Other provisions

20

1,662

1,975

21,005

12

1,251

2,224

23,647

10,34(5)

360

2,160

22,961

69,62768,655729,979

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

16,17,23

41,224

1,891

20,111

Trade and other payables

21,23

42,13840,415

429,718

Other short-term financial liabilities

11,23

Income tax payables
Other provisions

20

Other current liabilities

12

642

385

4,092

2,509

5,680

60,388

612

800

8,508

33,83029,564314,343

Total current liabilities

120,955

78,735

837,160

Total liabilities

190,582

147,389

1,567,140

Total equity and liabilities

575,235

618,074

6,571,764

5

Consolidated Statement of Comprehensive Income
HOYA Corporation and its subsidiaries
For the year ended 31 March 2013
(Thousands of(Millions of Yen)

(Millions of Yen)

For the year ended

For the year ended

For the year ended

31 March 2012

31 March 2013

31 March 2013

U.S.Dollars (Note 2))
Notes

Continuing operations
Revenue:Sales

26

360,673

372,494

3,960,593

Finance income
Share of profit of associates

27

1,582

965

10,263

9

1,864

6,26

3,546

－
38,809Other income－
412,637

367,664

412,268

4,383,494(4,166)

7,379

78,454

Total Revenue
Expense:Changes in inventories of goods, products and work in progress

77,446

70,634751,029

Employee benefits expense

Raw materials and consumables used
19,25,26

87,39594,982

1,009,908

Depreciation and amortisation

6,7,26

27,59430,872

328,253

4,622

4,707

50,052

Subcontracting cost
Advertising and promotion expense
Commission expense

26

9,621

10,310109,627

21,14021,357227,083

Impairment losses

8

831

1,119

11,896

Finance costs

27

2,086

22,180Share of loss of associates

9

2,027
－

Foreign exchange (gain)/loss

26

20

Loss on disaster

26

5,909

Other expenses

6,7,18,26

11,912

126,652(12,539)－(133,318)－

81,20680,080851,463

Total Expense

313,643

322,900

3,433,281

Profit before tax

54,02189,368950,213

14,231

18,125

192,722

39,79071,242757,491

Income tax expense

10

Profit for the year from continuing operations
Discontinued Operations

2,890

－

－

42,68071,242757,491

Net gain on revaluation of available-for-sale financial assets

(319)

594

6,312

Exchange differences on translation of foreign operations(6,982)42,045447,046

(113)

171

1,818

128

(203)

(2,157)

Profit for the year from discontinued operations

8,28

Profit for the year
Other comprehensive income:29

Share of other comprehensive income of associates
Income tax relating to components of other comprehensive

10

incomeTotal other comprehensive income/(loss)(7,286)42,606453,019

Total comprehensive income for the year

35,394

113,848

1,210,510

6

(Thousands of(Millions of Yen)

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

For the year ended

For the year ended

For the year ended

31 March 2012

31 March 2013

31 March 2013

Notes

Profit attributable to:
Owners of the Company

43,21971,099755,975

Non-controlling interests

(538)

143

1,516

Total

42,68071,242757,491

Owners of the Company

35,983

113,705

1,208,987

Non-controlling interests

(589)

143

1,523

Total

35,394

113,848

1,210,510

Total comprehensive income attributable to:

(Yen)

(Yen)

(U.S.Dollars(Note 2))

For the year ended

For the year ended

For the year ended

31 March 2012

31 March 2013

31 March 2013

Notes

Basic earnings per share

30

Continuing operations

93.48

164.78Discontinued operations

6.70

－

－

100.18164.78

1.75

Continuing operations

93.46

164.75

1.75

Discontinued operations

6.70

－

－

100.16164.75

1.75

Basic earnings per share
Diluted earnings per share

1.75

30

Diluted earnings per share7Consolidated Statement of Changes in Equity
HOYA Corporation and its subsidiaries
For the year ended 31 March 2013
(Millions of Yen)
Other capital
Notes

Share capital
6,264

Balance at 1 April 2011

Capital reserves

Treasury shares

Retained earnings
reserves

15,899(10,964)(2,496)

427,722

Total comprehensive income/(loss) for the year
43,219Profit for the year
Other comprehensive income/(loss)

29
43,219Total comprehensive income/(loss) for the year
Transactions with owners
Contributions by and distributions to owners
Acquisition of treasury shares

22(2)

(2)

Disposal of treasury shares

22(2)

37

Dividends, 65 Yen per share

22(3)Change in non-controlling interests

22

(393)

Share-based payments (Stock option)

25

402

(18)
(28,042)

Total contributions by and distributions to

35

(10)

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

ownersTotal transactions with owners
6,264

Balance at 31 March 2012

15,899Total comprehensive income/(loss) for the year
71,099Profit for the year
Other comprehensive income/(loss)

29
71,099Total comprehensive income/(loss) for the year
Transactions with owners
Contributions by and distributions to owners
Acquisition of treasury shares

22(2)

(2)
218

Disposal of treasury shares

22(2)Dividends, 65 Yen per share

22(3)Change in non-controlling interests

22

Share-based payments (Stock option)

25

(106)
(28,045)299

Total contributions by and distributions to

216

193

(28,045)216

193(28,045)(10,712)(2,313)

485,953

ownersTotal transactions with owners
Balance at 31 March 2013

6,264

8

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

Exchange
Share of otherAccumulated

attributable tocomprehensive

otherownersNon-controllingincome ofcomprehensiveof theinterests

associates

income/(loss)

Company

on revaluation of differences on

Notes
available-

Balance at 1 April 2011

Total equity

translation offor-sale financial

foreignassetsoperations

361(57,921)(2,030)(59,590)376,836705

377,541

43,219(538)

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

35,394

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

29

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

22(2)

(2)

(2)

Disposal of treasury shares

22(2)

19

Dividends, 65 Yen per share22(3)(28,042)(1)(28,044)

Change in non-controlling interests

22

(393)

(264)

(657)

Share-based payments (Stock option)

25

402

Total contributions by and distributions to

19

402

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

384,802(149)

384,653

71,242ownersTotal transactions with owners
Balance at 31 March 2012

186

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

71,099143384

42,051

171

42,60642,606

1

42,606384

42,051

171

42,606

113,705143

113,848

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

29

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

22(2)

(2)

Disposal of treasury shares

22(2)

112

Dividends, 65 Yen per share22(3)(28,045)

Change in non-controlling interests

22

Share-based payments (Stock option)

25

(2)
112
(134)

(28,178)

(47)

(47)

299

Total contributions by and distributions to299(27,636)(181)(27,817)(27,636)(181)(27,817)

470,872(187)

470,685

ownersTotal transactions with owners
Balance at 31 March 2013

569

(22,817)9(1,972)(24,220)

Consolidated Statement of Changes in Equity
HOYA Corporation and its subsidiaries
For the year ended 31 March 2013-Continued(Thousands of U.S.Dollars (Note 2))
Other capital
Notes

Share capital

Capital reserves

Treasury shares

Retained earnings
reserves

66,605

Balance at 31 March 2012

169,045(116,195)(26,637)

4,709,180

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

755,97529
755,975

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

22(2)

(17)

Disposal of treasury shares

22(2)

2,317

Dividends, 65 Yen per share

22(3)Change in non-controlling interests

22

Share-based payments (Stock option)

25(1,132)(298,190)

3,180

Total contributions by and distributions to owners

2,300

2,049

(298,190)

Total transactions with owners

2,300

2,049

(298,190)(113,895)(24,588)

5,166,966

66,605

Balance at 31 March 2013

169,045(Thousands of U.S.Dollars (Note 2))
EquityNet gain/(loss)

Exchange
Share of otherAccumulated

attributable tocomprehensive

otherownersincome ofcomprehensiveof theassociates

income/(loss)

Company

4,091,462(1,584)4,089,878

Non-controllingon revaluation of differences on

Notes
available-

Balance at 31 March 2012

for-sale financial

foreignassetsoperations

Total equity
interests

translation of

1,976(689,726)(22,786)(710,536)

755,975

1,516

757,491

4,078

447,116

1,818

453,012453,0126

453,019

4,078

447,116

1,818

453,0121,208,987

1,523

1,210,510

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

29

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

22(2)

(17)

(17)

Disposal of treasury shares

22(2)

1,186

1,186

Dividends, 65 Yen per share

22(3)(298,190)

Change in non-controlling interests

22

Share-based payments (Stock option)

25

(502)
3,180

Total contributions by and distributions to owners
Total transactions with owners
Balance at 31 March 2013

(1,421)

6,054(242,610)10(20,968)(257,523)(299,611)
(502)
3,180

(293,841)(1,923)(295,764)(293,841)(1,923)(295,764)

5,006,608(1,984)

5,004,624

Consolidated Statement of Cash Flows (including discontinued operations)
HOYA Corporation and its subsidiaries
For the year ended 31 March 2013
(Millions of Yen)

(Millions of Yen)

(Thousands of

For the year ended

For the year ended

For the year ended

31 March 2012

31 March 2013

31 March 2013

U.S.Dollars (Note 2))
Notes

Cash flows from operating activities
Profit before tax

54,021

Profit before tax from discontinued operations

28

Depreciation and amortisation
Impairment losses

4,509

89,368－950,213－27,92730,872

328,253831

11,896－(10,263)

Reversal of impairment losses(1,854)

1,119－

Finance income(1,589)(965)

Finance costs

2,043

2,086

22,180Share of (profits)/loss of associates(1,864)

11,912

126,652(Gain)/loss on sales of property, plant and equipment

766(1,973)(20,982)

Loss on disposal of property, plant and equipment

1,136

7,812
－

Gain on business transfer

28(3,617)735－

Others26(2)(3,515)(22,771)(242,114)

78,795

110,381

1,173,646(4,800)5,030

53,481

Cash generated from operations (before movements in working
capital)Movements in working capital
Decrease/(increase) in inventories
Decrease/(increase) in trade and other receivables

10,791(8,216)(87,362)

Increase/(decrease) in trade and other payables(6,728)(7,692)(81,785)(48)(4,188)(44,525)

Sub total

78,01095,316

1,013,457

Interests received

1,502

1,000

10,635

Increase/(decrease) in retirement benefit obligations and otherprovisions

Dividends received

69

59

632

Interests paid

(1,765)(1,544)(16,420)

Income taxes paid

(5,809)(6,073)(64,569)

Income taxes refunded

1,712

232

2,469

Net cash generated from operating activities

73,71988,991

946,204

Cash flows from investing activities
Withdrawals of time deposit

16,618

1,656

17,612

Deposits for time deposit(5,366)(1,721)(18,297)

Proceeds from withdrawals of certificate of deposit

10,000

Payments for purchase of certificate of deposit(30,000)

40,000－425,306－

Proceeds from sales of property, plant and equipment

562

7,573

80,526(31,184)(43,049)(457,728)

34

(80)

(10,127)(107,678)

(7)

(4)

(42)

Proceeds from business transfer

28,35

568

6,039

Payments for business acquisition

34

12,537－(3,150)(33,495)

6,567

9,050

96,229Other payments(2,142)(1,745)(18,552)

Net cash used in investing activities(22,497)(948)(10,081)

Payments for acquisition of property, plant and equipment
Net cash outflow on acquisition of subsidiary
Payments to non-controlling interests on merger

Other proceeds

11Consolidated Statement of Cash Flows (including discontinued operations)
HOYA Corporation and its subsidiaries
For the year ended 31 March 2013-Continued(Millions of Yen)

(Millions of Yen)

(Thousands of

For the year ended

For the year ended

For the year ended

31 March 2012

31 March 2013

31 March 2013

U.S.Dollars (Note 2))
Notes

Cash flows from financing activities
Dividends paid to owners of the Company(28,003)(28,071)(298,470)

Dividends paid to non-controlling interests

(1)

(134)

(1,421)

Increase/(decrease) in short-term debt

(313)

(380)

(4,043)

Repayments of long-term borrowings

(300)
－

(235)

(2,495)(40,287)(428,354)

Proceeds from disposal of treasury shares

0

0

1

Payments for purchase of treasury shares

(2)

(2)

(17)

Proceeds from exercise of stock options

19
(658)

111
－

1,185
－

Payments for redemption of bonds

Payments for purchase of non-controlling interests
Net cash used in financing activities(29,259)(68,997)(733,615)

Net increase/(decrease) in cash and cash equivalents

21,964

19,046

202,508

Cash and cash equivalents at the beginning of the year

185,252

204,772

2,177,270

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

(2,443)25,078266,642

204,772

248,8962,646,421

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

15

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

12Notes to the Consolidated Financial Statements

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

2.Basis of consolidated financial statements(1) Basis of consolidated financial statements
The accompanying consolidated financial statements have been prepared in accordance with International Financial ReportingStandards (“IFRSs”).
The accompanying consolidated financial statements are stated in Japanese Yen.
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 ¥94.05 to $1, the foreign exchange rate at 31 March 2013. 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 2013:

IFRSs
IAS 12

Income TaxesIFRS 7

Financial Instruments: Disclosures

Subject of new standards/amendments and transitional provisions- Introduction of a presumption, in measuring the deferred tax relating to an asset,that recovery of the carrying amount will, normally, be through sale
- Amendment on enhancing disclosures for transferred financial assets

These standards were applied in accordance with respective transitional provisions. There are no standards that were early adopted by
the Group.
These standards have no significant impact for the year ended 31 March 2013.

13

(3) Standards and interpretations in issue not yet adopted by the GroupAt the date of approval of the consolidated financial statements, the main standards and interpretations that were in issue but not yet
effective for mandatory adoption are as follows:
Mandatory
IFRSs

To be adopted

adoption（from by the Groupthe yearfrom the year

beginning)

ending1 July 2012

March 2014

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

IAS 1

including disclosure of comparative information for any

Presentation of

additional statements included beyond the minimum

Financial Statements
1 January 2013

March 2014

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

IAS 16

Property, Plant, andEquipment

equipment and servicing equipment should be classified as
1 January 2013

Mar 2014

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

IAS 19

Employee Benefits

1 January 2013

- Revision to recognition of actuarial gains and losses to be

March 2014

recognised in other comprehensive income- Revision to the calculation method for interest cost with theremoval of expected return on plan assets- Introduction of enhanced disclosures for defined benefit plans

IAS 27

1 January 2013

March 2014

1 January 2014

March 2015

- Only apply to separate financial statements

Separate Financial
Statements- Amendments based on the application of "Investment Entities"
to IFRS 10

14

Investments in
IAS 28

Associates and

1 January 2013

March 2014

1 January 2013

March 2014

- Amendments based on the publication of IFRS 10, IFRS11
and IFRS 12

Joint Ventures- Clarification that income tax relating to distributions to holdersof an equity instrument and to transaction costs of an equity
transaction should be accounted for in accordance with IAS 12

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

Instruments:

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

Presentation

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

course of business and in the event of default, insolvency orMarch 2015

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

IAS 34

Interim Financial
Reporting

1 January 2013

financial reporting only when the amounts are regularly

March 2014provided to the chief operating decision maker and there has
been a material change from the amounts disclosed in the last
annual financial statements for that reportable segment

Financial
IFRS 7

Instruments:- Disclosure requirement of information about rights of offset
1 January 2013

March 2014

and related arrangements for financial instruments under an

Disclosures

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

IFRS 9Financial
Instruments

1 January 2015

all relating gains or losses are recognised in profit or loss

March 2016

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

15

1 January 2013

- Guidance for consolidated financial statements to include theMarch 2014

definition of control

Consolidated
IFRS 10- Provision of an exception of the requirements of consolidation

Financial
Statementsof subsidiaries for entities which meet the definition of an
1 January 2014

investment entity and instead requiring investment entities toMarch 2015

measure their investments in particular subsidiaries at fair value
through profit or loss in accordance with IFRS 9 or IAS 39.
- Classification of joint arrangements as either joint operations(combining the existing concepts of jointly controlled assets andjointly controlled operations) or joint ventures (equivalent to theexisting concept of a jointly controlled entity)
IFRS 11

Joint Arrangements

1 January 2013

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

March 2014

interests in joint ventures and the elimination of the
proportionate consolidation method- The investor of a joint operation must include in its financial
statements its share of assets, liabilities, revenues and expenses
relating to the joint operation- Integration of the disclosure requirements on the nature of andDisclosure of
IFRS 12IFRIC 21

March 2014

risks associated with its interests in other entities and the effectsof those interests on its financial statements

Interests in Other
Entities

IFRS 13

1 January 2013

Fair Value
Measurement

Levies

1 January 2014

March 2015

1 January 2013

March 2014

1 January 2014

March 2015

- Amendments as a result of addition of "Investment Entities" to
IFRS 10- New guidance for both financial and non-financial items
measured at fair value- The timing of the recognition of levies

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

16

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

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

17

(3) Business combination
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.
The changes in the fair value of the contingent consideration resulting from events after the acquisition date are accounted for as
follows:(a) Contingent consideration classified as equity shall not be remeasured and any subsequent settlement shall be accounted for inequity.
(b) Contingent consideration classified as an asset or a liability is accounted for in accordance with IAS 37 “Provisions, Contingent
Liabilities and Contingent Assets” and IAS 39 “Financial Instruments: Recognition and Measurement” or other IFRSs as appropriate.
Goodwill is measured on the basis of the excess of the sum of the consideration transferred, the amount of any non-controllinginterests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree over the fair value ofidentifiable assets acquired, net of liabilities assumed at acquisition date. Negative goodwill is recognised immediately in profit or loss
as a bargain purchase gain.
Non-controlling interests in subsidiaries are reported in equity separately from the equity attributable to owners of the Company. Noncontrolling interests are initially measured either at fair value or at the non-controlling interests’ proportionate share of the recognised
amounts of the acquiree’s identifiable net assets on a transaction-by-transaction basis.
When a business combination is achieved in stages, the Group’s previously held equity interest in the acquiree is remeasured to thefair value at the acquisition date (i.e. the date when the Group obtains control) and the resulting gain or loss, if any, is recognised in
profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that were previously recognised in othercomprehensive income are reclassified to profit or loss where such treatment would be appropriate if that interest were disposed of.
Goodwill arising from business combinations before the IFRSs transition date is measured at their carrying amount in accordance withthe previous Japanese GAAP after performing an impairment test (Note 8).

18

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

19

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

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

20

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

21

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

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

22

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

(11) Financial assets other than derivative financial instruments① Initial recognition and measurement
All regular way purchases or sales of financial assets, that require delivery of assets within the time frame established by regulation orconvention in the marketplace, are recognised and derecognised on the trade date, and are initially measured at fair value, plustransaction costs.
Financial assets are classified into the following specified categories:· financial assets at fair value through profit or loss (FVTPL),· held-to-maturity investments,· loans and receivables, and· available-for-sale financial assets
The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.
② Financial assets as FVTPL
Financial assets are classified as FVTPL when the financial assets are either held for trading or are designated as an FVTPL.
A financial asset is classified as held for trading if:(a) it has been acquired principally for the purpose of selling it in the near term; or(b) on initial recognition it is part of a portfolio of identified financial instruments that the Group manages together and has a recent
actual pattern of short-term profit-taking; or(c) it is a derivative that is not designated and effective as a hedging instrument.
A financial asset other than a financial asset held for trading may be designated as an FVTPL upon initial recognition if:(a) such designation eliminates or significantly reduces a measurement or recognition inconsistency (accounting mismatch) that would
otherwise arise; or(b) the financial asset forms part of a group of financial assets or financial liabilities or both, which is managed and its performance isevaluated on a fair value basis, in accordance with the Group's documented risk management or investment strategy, andinformation about the grouping is provided internally on that basis; or(c) it forms part of a contract containing one or more embedded derivatives, and IAS 39 “Financial Instruments: Recognition andMeasurement” permits the entire combined contract (asset or liability) to be designated as an FVTPL.
Financial assets as FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. The
net gain or loss recognised in profit or loss incorporates any dividend, interest or fair value gain or loss from evaluation on thefinancial assets and is included in the consolidated statement of comprehensive income.
As at 31 March 2012 and 2013, the Group did not have financial assets as FVTPL other than derivative financial instruments
designated as FVTPL.

23

③ Held-to-maturity investments
Financial assets except derivatives for which the Group has the positive intent and ability to hold to maturity are classified as held-tomaturity investments. Held-to-maturity investments are measured at amortised cost using the effective interest method less any
impairment, with revenue recognised on an effective yield basis. As at 31 March 2012 and 2013, the Group did not have held-tomaturity investments.
The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over
the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (the calculation reflects
effective interest method including premium or discount between the counterparty) through the expected life of the financial assets, or(where appropriate) a shorter period, to the net carrying amount on initial recognition.
④ Loans and receivables
Trade receivables, loans, and other receivables that are not quoted in an active market are classified as loans and receivables. Loans
and receivables are measured at amortised cost using the effective interest method, less any impairment. Principally, interest income isrecognised by applying the effective interest rate.
⑤ Available-for-sale financial assets
Financial assets except derivatives, either designated as available-for-sale financial assets or not classified as FVTPL, held-to-maturity
investments or loans and receivables, are classified as available-for-sale financial assets.
Listed shares and listed redeemable notes held by the Group that are traded in an active market are classified as available-for-salefinancial assets and are stated at fair value. The Group also has investments in unlisted shares that are not traded in an active market
but that are also classified as available-for-sale financial assets and stated at fair value. Fair value is determined in the manner
described in Note 23 “Financial instruments”. Gains and losses arising from changes in fair value are recognised in othercomprehensive income and accumulated in accumulated other comprehensive income (net gain or loss on revaluation of available-forsale financial assets), with the exception of impairment losses and foreign exchange gains and losses on monetary assets, which arerecognised in profit or loss.
Where the investment is disposed of or is determined to be impaired, the cumulative gain or loss, that were previously accumulated inaccumulated other comprehensive income (net gain on revaluation of available-for-sale financial assets), is reclassified to profit orloss.
Dividends on available-for-sale financial assets (equity instruments) are recognised in profit or loss when the Group’s right to receive
the dividends is established. The fair value of available-for-sale financial assets (monetary assets) denominated in a foreign currency isdetermined in that foreign currency and translated at the spot rate at the end of the reporting period. The foreign exchange gains andlosses that were recognised in profit or loss are determined based on the amortised cost of the monetary asset. Other foreign exchange
gains and losses are recognised in other comprehensive income.

24

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

25

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

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

26

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

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

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

27

(18) Equity instruments and financial liabilities issued by the Groupexcluding derivative instruments① Equity instruments (shares)
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.
② Financial liabilities
Financial liabilities are classified as either financial liabilities as FVTPL or other financial liabilities.
③ Financial liabilities as FVTPL
Financial liabilities classified as FVTPL are either held for trading or designated as an FVTPL.
A financial liability is classified as held for trading if:(a) it has been acquired principally for the purpose of selling or redeeming it in the near term; or(b) on initial recognition it is part of a portfolio of identified financial instruments that the Group manages together and has a recent
actual pattern of short-term profit-taking; or(c) it is a derivative that is not a financial guarantee contract and is not designated as a hedging instrument.
A financial liability other than a financial liability held for trading may be designated as an FVTPL upon initial recognition if:(a) such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or(b) the financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and its performanceis evaluated on a fair value basis, in accordance with the Group's documented risk management or investment strategy, andinformation about the grouping is provided internally on that basis; or(c) it forms part of a contract containing one or more embedded derivatives, and IAS 39 “Financial Instruments: Recognition andMeasurement” permits the entire combined contract (asset or liability) to be designated as FVTPL.
Financial liabilities as FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss.
The net gain or loss recognised in profit or loss is included in finance costs in the consolidated statement of comprehensive income.
Fair value is determined in the manner described in Note 23 “Financial instruments”.
As at 31 March 2012 and 2013, the Group did not have financial liabilities as FVTPL.
④ Other financial liabilities
Other financial liabilities, including bank loans, are initially measured at fair value, net of transaction costs. Other financial liabilities
are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yieldbasis.
⑤ Derecognition of financial liabilities
The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or they expire.
⑥ Financial guarantee contract liabilities
Financial guarantee contract liabilities are initially measured at their fair values and subsequently measured at the higher of:· the amount of the obligation under the contract, as determined in accordance with IAS 37 “Provisions, Contingent Liabilities andContingent Assets”; and· the amount initially recognised less cumulative amortisation recognised in accordance with IAS 18 “Revenue”.

28

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

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

29

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

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

30

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

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

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

31

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

32

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

Electronics related products

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

Imaging related products

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

Life Care

Health Care related products

Eyeglass lenses, Contact lenses.

Medical related products

Endoscopes, Medical accessories, Intraocular lenses, Artificial bone,
Metallic implant for orthopedics.

Other

Design of information systems, 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 March 2012

Information

Life Care

Other

Total

Adjustments

Consolidated

360,6721

360,673

Technology
Revenue from external

165,822

192,947

1,903

customers
Inter-segment sales

215

4

3,243

3,463

(3,463)－

Total

166,037

192,951

5,146

364,135(3,462)360,673

Interest income

378

301

9

688

824

1,513

Interest expense

(242)

(70)

(5)

(317)

(1,432)(1,749)(17,650)(9,514)(27,332)(262)(27,594)

8

115

(167)
－

123

1,741

1,864

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

(222)

(609)

－

(831)

－

(831)

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

33,01824,568774

58,360(4,339)54,021

19,952

11,780137

31,869795

32,664

Other disclosure
Capital expenditure（Millions of Yen）
For the year ended March 2013

Information

Life Care

Other

Total

Adjustments

Consolidated

Technology
Revenue from external

161,216

208,968

2,269

372,45341

372,494

Inter-segment sales

159

1

2,670

2,831

(2,831)－

Total

372,494

customers
161,375

208,969

4,940

375,284(2,790)Interest income

302

289

10

600

305

906

Interest expense

(294)

(260)

(1)

(556)

(983)

(1,539)(18,103)(12,408)
－

(142)
－

(30,653)(219)(30,872)2

2(11,914)(11,912)

(805)

(314)

－

(1,119)－(1,119)(110,637)(132,322)(4,178)(247,137)

8,546(238,591)

31,841

63,954628

96,423(7,055)89,36824,771

20,01864

44,853

158

45,011

Depreciation and amortisation
Share of profit (loss) of
associates
Impairment losses
OthersSegment profit before tax
Other disclosure
Capital expenditure34

（Thousands of U.S.Dollars (Note 2)）
For the year ended March 2013

Information

Life Care

Other

Total

Adjustments

Consolidated

431

3,960,593

Technology
Revenue from external

1,714,156

2,221,877

24,1303,960,163

customers
Inter-segment sales

1,692

15

28,39330,099(30,099)－

Total

1,715,848

2,221,892

52,5233,990,262(29,669)

3,960,593

Interest income

3,213

3,070

102

6,385

3,246

9,631

Interest expense(3,131)(2,769)(6)(5,907)(10,453)(16,359)(192,479)(131,925)－(1,515)－(325,919)(2,333)(328,253)

27(126,679)(126,652)

Depreciation and amortisation
Share of profit (loss) of

27

associates
Impairment losses
OthersSegment profit before tax(8,557)(3,339)－(11,896)－(11,896)(1,176,366)(1,406,928)(44,425)(2,627,720)

90,868(2,536,851)

338,553

680,000

6,679

1,025,232(75,019)

950,213

263,381

212,843684

476,907

1,680

478,587

Other disclosure
Capital expenditure
Note:(i) Adjustments to revenue from external customers of 1 million yen and 41 million yen (431 thousand U.S.dollars) for the years
ended March 2012 and 2013, respectively, represent revenue by R&D department which is not included in any reportable segment.
(ii) Adjustments to segment profit before tax of (4,339) million yen consist of the elimination of an inter-segment transaction of 41
million yen, and profit or loss of the Company’s headquarters, R&D department and overseas holding companies (after elimination ofdividend income from group companies) of (4,379) million yen for the year ended March 2012 and (7,055) million yen ((75,019)
thousand U.S.dollars) consist of elimination of inter-segment transaction of (1) million yen ((11) thousand U.S.dollars), and profit orloss of the Company’s headquarters, R&D department and overseas holding companies (after elimination of dividend income fromgroup companies) of (7,054) million yen ((75,007) thousand U.S.dollars) for the year ended March 2013.
(iii) Transfer prices between operating segments are on an arm’s length basis for the years ended 31 March 2012 and 2013,
respectively.
(iv) In addition to the above, capital expenditures in discontinued operations for the years ended March 2012 are 521million and thetotal capital expenditures in the Group for the year ended March 2012 is 33,185 million yen.
(v) Loss on disaster in the amount of 5,909 million yen is included in Others in Life Care for the year ended March 2012.
(vi) Insurance Proceeds pertaining to the flood in Thailand in the amount of 32,187 million yen (342,234 thousand U.S.dollars) and
Gains related to the step acquisition of shares of subsidiary in the amount of 2,238 million yen (23,794 thousand U.S.dollars) are
included in Others in Life Care for the year ended March 2013.
(vii) Foreign exchange gain in the amount of 10,329 million yen (109,829 thousand U.S.dollars) is included in Others in Adjustments
for the year ended March 2013.

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 2012 and 2013:(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 2012

31 March 2013

31 March 2013

Information Technology
Electronics related products

105,566

108,756

1,156,359

Imaging related products

60,25752,461

557,797

Information Technology total

165,822

161,216

1,714,156

140,276

150,100

1,595,955

Life Care
Health Care related products
Medical related products

52,671

58,868625,922

Life Care total

192,947

208,968

2,221,877

1,903

2,269

24,130

Other
Corporate (R&D)
Total revenue from external

1

41

431

360,673

372,494

3,960,593

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

(Millions of Yen)

(Thousands of U.S.Dollars

For the year ended

For the year ended

For the year ended

31 March 2012

31 March 2013

31 March 2013

(Note 2))

Japan

138,892

136,896

1,455,566

U.S.A.

36,09737,316

396,763

China

50,16348,921

520,162

Others135,521

149,361

1,588,102

Total

360,673

372,494

3,960,593

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

For the year ended

For the year ended

31 March 2012

31 March 2013

31 March 2013

Japan

47,091

43,552

463,074

Thailand

18,54732,546

346,051

Vietnam

9,858

18,125

192,721

Philippines

14,595

15,486

164,661

Others33,19959,117

628,569

Total

123,289

168,827

1,795,075

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

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 andstructures

carriers

Land

Tools,

Construction in

Total

progress

equipment andfixtures

Balance at 1 April 201182,182

227,31745,744

16,957

14,809387,009

Additions

1,117

5,088

3,158

628

21,686

31,677

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

Disposals (i) (v)(6,981)－(19,082)－(3,040)
－

(275)

(270)
－

(29,649)(5,356)

4,398

16,441

1,414－(22,253)－(933)(3,183)

(740)

(83)

(442)

(5,381)498(2,454)

472

－

(417)

(1,901)

Reclassification to assets held

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

77,933

221,416

42,48010,10013,108365,038

Additions

1,345

3,505

2,154

－

37,05644,060Business combinations (iv)

1,155

2,380

131

117

816

4,599

Disposals (i)(1,090)(5,582)(2,142)

(117)

(215)

(9,146)

(324)

－

－

(310)

－

(634)

6,513

21,397

1,189－(29,099)－

7,544

20,923

3,577

405

2,562

35,012

(46)

312

193

332

(1,312)(521)

93,031

264,352

47,581

10,527

22,916438,407

Reclassification to assets held
for saleTransfer from construction inprogress
Effect of foreign currency
exchange differences
OthersBalance at 31 March 2013

38

（Millions of Yen）
Accumulated depreciation andimpairment losses

Buildings and Machinery andstructures

carriers

Land

Tools,

Construction in

Total

progress

equipment andfixtures

Balance at 1 April 2011

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

Depreciation expense(3,451)－(24,331)(222)(4,429)－－Impairment losses (ii)

(16,451)
－

－

－

(222)

3

35

－

－

462

Reversal of impairment losses

425

(ii)
984

2,246

3,876

－

－

7,107

4,756

15,7002,736－

23,250

544

2,775

561

58
－

－

3,880

(29)

1,610

73

－

－

1,653

Balance at 31 March 2012

(41,642)(187,670)(27,057)(264)－(256,634)

Depreciation expense(4,227)(18,656)(3,896)

(289)

(243)

(46)

－
(112)

(26,778)

Impairment losses (ii)

－
(286)

Disposals (i)

896

5,311

1,404

7,611

287

－

－

－
286

－

Reclassification to assets held－573

(3,141)(14,854)(2,866)－－(20,862)

Business transfer (iii)
Disposals (i)Effect of foreign currency
exchange differences
Others(975)

for saleEffect of foreign currency
exchange differences
OthersBalance at 31 March 2013

(512)

(518)

436

－

－

(594)

(48,628)(216,630)(32,025)

(264)

(112)

(297,660)（Millions of Yen）
Carrying amount

Buildings and Machinery andstructures

carriers

Tools,

Land

Construction in

Total

progress

equipment andfixtures

Balance at 1 April 201137,53333,764

15,834

16,63514,809118,574

Balance at 31 March 2012

36,292

33,745

15,423

9,836

13,108108,404

Balance at 31 March 2013

44,40247,721

15,556

10,26322,804

140,747

39

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

Buildings and Machinery andstructures

carriers

Land

Tools,

Construction in

Total

progress

equipment andfixtures

Balance at 31 March 2012

828,6392,354,232

451,676

107,391

139,375

3,881,313

Additions

14,29637,27022,901

394,002468,469

Business combinations (iv)

12,28125,305

1,396

－
1,241

8,671

48,895

Disposals (i)(11,587)(59,354)(22,775)(1,243)(2,288)(97,247)

Reclassification to assets held

(3,446)－－(3,292)－(6,738)69,253

227,511

12,639－(309,404)－

80,217

222,468

38,0304,311

27,246372,272

(491)

3,322

2,048

3,526

(13,947)(5,542)

989,1632,810,755

505,915

111,935

243,655

4,661,423

for saleTransfer from construction inprogress
Effect of foreign currency
exchange differences
OthersBalance at 31 March 2013

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

Buildings and Machinery andstructures

carriers

Land

Tools,

Construction in

Total

progress

equipment andfixtures

Balance at 31 March 2012

(442,762)(1,995,432)(287,691)(2,811)－(2,728,697)

Depreciation expense(44,945)(198,359)(41,421)(3,069)(2,581)(492)－(3,039)－(1,189)(284,724)

Impairment losses (ii)
Disposals (i)9,52356,472

14,929－80,923

Reclassification to assets held

3,051

－

－

－
3,039

－

6,090

(33,399)(157,938)(30,478)－－(221,816)(5,446)(5,513)

4,639

－

－

(6,320)(517,049)(2,303,351)(340,515)(2,811)(1,189)(3,164,915)(10,370)for saleEffect of foreign currency
exchange differences
OthersBalance at 31 March 2013

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

Buildings and Machinery andstructures

carriers

Tools,

Land

Construction in

Total

progress

equipment andfixtures

Balance at 31 March 2013

472,114507,404

165,400

109,124

242,466

1,496,508

Note:(i) Gain and loss arising from sale or disposal of property, plant and equipment for the years ended 31 March 2012 and 2013 are set
out in Note 26 “Revenue and expenses (excluding finance income and costs).” Gain and loss on sale of assets held for sale were
included in ‘gain on sale of property, plant and equipment’ and ‘loss on sale of property, plant and equipment’ in Note 26.
(ii) Details of impairment losses and reversal of impairment losses are set out in Note 8 “Impairment losses” .
(iii) Details of business transfer are set out in Note 28 “Discontinued operations”.
(iv) Details of business combination are set out in Note 34 “Business combinations”.
(v) The damage on plant equipment of certain subsidiaries of the Group due to the massive flood in Thailand is included in 'Disposals'.
The details of the loss on disaster are set out in Note 26 “Revenue and expenses (excluding finance income and costs).”(vi) Property, plant and equipment under construction are included in ‘construction in progress’ in the table above.

40

Building with carrying amount of 29 million yen (308 thousand U.S.dollars) has been pledged as collateral to secure 12 million yen (128 thousand U.S.dollars) ‘Interest-bearing long-term debt’ and 4 million yen (39 thousand U.S.dollars) ‘Interest-bearing short-term
debt’ as at 31 March 2013. Refer to Note 16 “Interest-bearing debt” for details. Besides the above, Buildings in the amount of 101
million yen (1,075 thousand U.S. dollars) and Land in the amount of 1 million yen (11 thousand U.S. dollars) were provided ascollateral for the conditional obligation in the amount of 83 million yen (878 U.S.dollars) associated with the government grant.
Details of commitments for the acquisition of property, plant, and equipment are set out in Note 37 “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 2012 and 2013, which areincluded in each corresponding amount in the table above.
(Millions of Yen）
Buildings and structures Machinery and carriers

Tools, equipment andfixtures

Total

Balance at 31 March 2012

101

26

211

338

Balance at 31 March 2013

92

71

522

685

(Thousands of U.S.Dollars (Note 2))
Buildings and structures Machinery and carriers
Balance at 31 March 2013

980

753

Tools, equipment andfixtures

Total

5,547

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

41

7,280

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

Intangible assets
Goodwill

SoftwareTechnology

Customer

Patents

related assets

Others (i)

Total

4,057

13,321

8,235

11,920－6,019

39,494

Additions

－

－

63

1,360

124

4
－

－

Acquisitions through business

1,294
－

－

31

31

Balance at 1 April 2011－combinations
Disposals (ii)

－

(598)

－

－

－

(33)

(632)

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

Effect of foreign currency

(182)

(198)

2

0

－

(493)

(688)

exchange differences
(0)

8

2,554

46

－

(2,222)

385

Balance at 31 March 2012

3,905

12,166

10,791

10,591－

3,297

36,844

Additions

－
6,382

867

－

29

938

－

1

－
6,417

42

107

1,506

8,031

(414)

－
337

(130)

－
565

(0)

(544)

363

2,309

OthersAcquisitions through businesscombinations (iii)
Disposals (ii)
Effect of foreign currency

－
910

1,044

0

exchange differences
OthersBalance at 31 March 2013

－

255

－

－

514

(501)

268

11,19814,025

11,128

10,491

7,497

4,706

47,847（Millions of Yen）
Accumulated amortisation andGoodwill

impairment losses

Intangible assets
SoftwareTechnology

Customer

Patents

related assets

Others

Total

Balance at 1 April 2011

(1,428)(9,746)(5,055)(6,286)－(3,251)(24,338)

Amortisation expense (iv)－

(1,308)－(695)－(1,240)
－

－
－

(353)
－

(3,596)－

Impairment loss (v)

(609)
－

371

－

782

－

21

1,174

Business transfer

－

1,273

－

－

48

1,965

Disposals (ii)

－

593

－

644
－

－

12

605

Effect of foreign currency

22

115

(14)

0

－

440

542

Reversal of impairment loss (v)exchange differences
(458)

(91)

(1,171)

(72)

－

1,302

(32)

Balance at 31 March 2012

(2,474)(8,793)(6,934)(6,172)－(1,781)(23,679)

Amortisation expense (iv)－

(1,272)(800)(1,259)

(542)

(221)

(4,094)

Impairment loss (v)

－

(22)

－

(108)

－

(130)

－
(357)

381

77

(747)

－
(207)

(2)

－
(89)

－
0
(151)

(1,196)

－

(17)

－

－

(214)

214

(17)

(2,831)(10,470)(7,940)(7,464)(845)(1,939)(28,658)

Others

Disposals (ii)
Effect of foreign currency

458

exchange differences
OthersBalance at 31 March 201342

（Millions of Yen）
Carrying amount

Goodwill

Intangible assets
SoftwareTechnology

Customer

Patents

related assets

Others

Total

－

2,768

15,157

4,419

－

1,516

13,164

3,027

6,652

2,767

19,189Balance at 1 April 2011

2,629

3,575

3,180

5,634

Balance at 31 March 2012

1,431

3,373

3,856

Balance at 31 March 2013

8,367

3,555

3,187

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

Goodwill

Intangible assets
SoftwareTechnology

Patents

Customer
related assets

Others (i)Total

Balance at 31 March 2012

41,522

129,352

114,733

112,607－

35,055Additions－
67,859

9,219

－

313

446

9,978

1,143

－

8

－
68,23416,01085,395－
9,678(4,399)－3,583(1,383)

－
6,008

(2)

(5,784)

3,856

24,551

Acquisitions through business

391,747

combinations (iii)
Disposals (ii)
Effect of foreign currency

11,1003exchange differences
OthersBalance at 31 March 2013

－

2,709

－

－

5,468

(5,324)2,853

119,059

149,123

118,316

111,549

79,71150,041

508,741(Thousands of U.S.Dollars (Note 2))
Accumulated amortisation andGoodwill

impairment losses
Balance at 31 March 2012

Intangible assets
SoftwareTechnology

Patents(26,305)(93,490)(73,729)(65,621)

CustomerOthersTotal－(18,936)(251,776)(2,354)－(43,528)2

4,868

related assets

Amortisation expense (iv)－

(13,524)(5,763)－(233)(8,502)－(13,386)

Impairment loss (v)(1,145)－

Disposals (ii)

－

4,052

－

814

(3,796)(7,945)(2,196)

(21)

－
(941)

(1,609)(12,712)

－

(183)

－

－

(2,278)

2,278

(183)

(30,101)(111,324)(84,427)(79,358)(8,982)(20,619)(304,709)

Effect of foreign currency(1,379)exchange differences
OthersBalance at 31 March 2013

43

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

Balance at 31 March 2013

Goodwill

88,959Intangible assets
SoftwareTechnology

37,80033,890Patents
32,190

Customer
related assets

Others70,72929,422

Total
204,031

Note:(i) There were no significant internally-generated intangible assets for the years ended 31 March 2012 and 2013.
(ii) Loss on disposal of intangible assets is set out in Note 26 “Revenue and expenses (excluding finance income and costs)” (7) Other
expenses.
(iii) Refer to Note 34 “Business combinations” for details of acquisitions through business combinations.
(iv) Amortisation expense is included in the line item ‘Depreciation and amortisation’ in the consolidated statement of comprehensive
income.
(v) Refer to Note 8 “Impairment losses” for details of impairment losses and reversal of impairment losses.
No intangible assets have been pledged as collateral to secure the debt. There is no restriction on legal title of these assets. Details ofcommitments for the acquisition of intangible assets are set out in Note 37 “Commitments for expenditure”.
The Group owns customer related assets for mainly distribution of the health care related products and technology and patents for
manufacturing of the medical related products. The carrying amount of the customer related assets is 5,636 million yen (59,931
thousand U.S. dollars) as at 31 March 2013. The carrying amount of technology is 2,201 million yen (23,407 thousand U.S.dollars) as
at 31 March 2013 (as at 31 March 2012: 2,691 million yen). The carrying amount of patents is 2,673 million yen (28,418 thousand
U.S.dollars) as at 31 March 2013 (as at 31 March 2012: 3,802 million yen). The remaining useful lives of technology are four years as
at 31 March 2013 (as at 31 March 2012: five years). The remaining useful lives of patents are two years as at 31 March 2013 (as at 31
March 2012: three years).

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.
(Millions of Yen)

(Millions of Yen)

For the year ended March 2012

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

For the year ended March 2013

For the year ended March 2013

Buildings and structures

222

289

3,069

Machinery and equipment

－

243

2,581

Tools, equipment and fixtures

－

46

492

Land

－

286

3,039

Construction in progress

－

112

1,189

Subtotal losses on property, plant

222

975

10,370609－－

Intangible assets

－

130

1,379

Other non-current assets(Long-

－

14

147

831

1,119

11,896and equipment
Goodwillterm prepaid expense)
Total impairment losses
The following are the details of impairment losses reversed.
Reversal of impairment losses have been included in the line item ‘Profit for the year from discontinued operations’ in the
consolidated statement of comprehensive income.
(Millions of Yen)
For the year ended 31 March 2012

Buildings and structures

425

Machinery and carriers

3

Tools, equipment and fixtures

35

Sub total - property, plant and equipment

462

Software371

Patents

782

Others21
Sub total - intangible assets

1,174

Other non-current assets

218(Long-term prepaid expenses)
Total reversal of impairment losses

1,854(Discontinued operations)(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, an
individual asset is tested for the necessity of impairment.

45

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

609
Life Care Total

609

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

Information Technology
Imaging related products (Digital cameras)
Property, plant and equipment

462

Intangible assets

1,174

Other non-current assets (Long-term prepaid expenses)

218

Information Technology Total (Discontinued operations)

1,854

For the year ended 31 March 2013
There were indications of impairment due to the decline in the Optical device market caused by a decrease of demand in PCs and the
spread of downloading data via the internet. The impairment test is based on the latest business plan, and the following impairment
losses were recognised:
Recoverable amount was measured at the value in use and determined using cash flow projections based on the financial budgets forthe following five fiscal years approved by the Group’s management, and a discount rate of 10% per annum which is the SBU’s pretax weighted average capital cost (WACC).
(Millions of Yen)

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

Impairment losses

Impairment losses

Information Technology
Imaging related products (Optical Devices)
Buildings and structures

212

2,252

Machinery and carriers

231

2,457

Tools, equipment and fixtures

46

492

Construction in progress

112

1,189

601

6,391

22

233

Property, plant and equipment Total
SoftwarePatents
Intangible assets Total
Other non-current assets (Long-term prepaid expenses)
Information Technology Total

46

108

1,145

130

1,379

14

147

745

7,916

(3) Impairment losses on assets to be sold or disposed, and idle assets
The carrying amount of assets to be sold or disposed of, and idle assets resulting from business restructuring, which were not expected
to be used in the future, was written down to the estimated recoverable amount which was measured at fair value less related selling
costs, and the corresponding impairment loss was recognised. The fair value was based on an appraisal or publicly posted land price.
For any asset to be disposed of, its recoverable amount was considered to be zero.
Impairment losses were recognised as follows for the year ended 31 March 2012:
Impairment losses (Millions of Yen)

Information Technology
Buildings and structures

222

Information Technology Total

222

Total

222

Impairment losses were recognised as follows for the year ended 31 March 2013:(Millions of Yen)

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

Impairment losses

Impairment losses

Information Technology
Buildings and structures
Information Technology Total

60

641

60

641

17

176

Life Care
Buildings and structures
Machinery and carriers

12

124

Land

286

3,039

Life Care Total

314

3,339

Total

374

3,979

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. Recoverable amount of
goodwill allocated to cash-generating units was measured at the value in use and it was determined using cash flow projections basedon the financial budgets for the following five fiscal years which had been approved by the Group’s management, and a discount rateof 5% to 8% per annum which is the cash-generating units’ pre-tax weighted average capital cost (WACC).
The carrying amount of goodwill was allocated to the cash-generating units as follows:（Millions of Yen）
As at 31 March 2012

Life Care
Health Care related
products
Eyeglass lenses

Adjustments

Medical related products

R&D

Total

Medical accessories

Japan

－

－

－

－

Americas

148

59

238

Europe

637

747

Asia

446

110
－

31
－
－

446

1,232

169

31

1,431

Total

（Millions of Yen）
As at 31 March 2013

Life Care
Health Care related
products
Eyeglass lenses

Adjustments

Medical related products

R&D

Total

Medical accessories

－
6,301

733

Americas

66

－
35

6,402

Europe

655

69

－

724

508

－

－

508

7,464

868

35

8,367

Japan

Asia
Total

733

(Thousands of U.S.Dollars (Note 2))
As at 31 March 2013

Life Care
Health Care related
products
Eyeglass lenses
Japan

Adjustments

Medical related products

Total

Medical accessories
－

7,791

－

7,791

372
－

68,071

－

5,401

372

88,959Americas66,996703

Europe

6,961

Asia

5,401

735
－

79,358

9,229

Total

R&D

7,695

Note:
Impairment loss on goodwill of Medical related products (Medical accessories) was recognised in the amount of 609 million yen forthe year ended 31 March 2012.

48

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

Place of
Name of associate

Principal activity incorporation andSegment

operation
AvanStrate Inc.

Production and

As at

As at

31 March 2012

31 March 2013

JAPAN

Corporate

46.6

46.6

BRAZIL

Life Care

25.0

－

CHINA

Information

49.0

49.0

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

Production andsale of eyeglass
lensesJIASHAN CANDEO OPTICAL

Production and

GLASS CO.,LTD.

sale of special

Technology

glass, such ascolored glass
Note:
OPTOTAL HOYA LIMITADA.(former OPTOTAL HOYA S.A.) became a subsidiary of the Group on 2 April 2012 due to theadditional acquisition of shares which resulted in 100% ownership by the Group.
Summarised financial information in respect of the Group’s associates is set out below.
(Millions of Yen)

(Millions of Yen)

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

As at / for the year

As at / for the year

ended 31 March 2012

ended 31 March 2013

ended 31 March 2013

Total assets

177,607

134,429

1,429,341

Total liabilities

131,311

115,6121,229,263

Net assets

46,296

18,817200,077

Group’s share of net assets of associates

12,935534

5,682

Total revenue

59,05443,006457,262

Total expense

54,90968,579729,173

Total profit/(loss) for the period

4,145(25,573)(271,910)

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

1,864(11,912)(126,652)

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

49

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

Recognised inother

1 April 2011

profit or loss

comprehensive

Business Transfer

As at
31 March 2012

incomeTemporary differences
Enterprise tax payable

24

15

－

－

39

－

878

Written down inventories

1,704

(827)

－

Allowance for doubtful

209

266

－

(3)

471

Other provision

615

60

－

(3)

672

Accrued expenses

4,004

388

－

(4)

4,389

Unrealised profit on inventories

1,294

1,064

－

(110)

2,248

Depreciation and amortisation

4,994(1,275)－

3,716

Tax goodwill

5,060(4,963)－(3)－

Impairment losses

1,046

81
－

－

－

1,127

721

(16)

－

705

4,659

(1,296)

－

(14)

3,349

Sub total

24,330(6,487)

(16)

(137)

17,689

Undistributed retained earnings

(501)

(104)

－

－

(605)

Depreciation and amortisation(2,632)－(3,601)

(246)

(969)
－

－

Net gain/(loss) on revaluation

144

－

(102)

(1,288)

781

－

－

(507)

(4,667)

(292)

144

－

(4,814)

16,024－(5,034)－－

10,990

841

－

－

841

Sub total

16,024(4,193)－－

11,831

Total

35,687(10,972)

128

(137)

24,706accounts

Exchange differences on

96translating foreign operations
Othersof subsidiaries

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

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

50

（Millions of Yen）
Recognised
As at

Recognised inin otherBusiness

As at

1 April 2012

profit or loss

comprehensive

Combinations

31 March 2013

incomeTemporary differences
Enterprise tax payable

39

325

－

0

364

Written down inventories

878

(418)

－

35

495

Allowance for doubtful

471

179

－

3

652

accounts
Other provision

672

46

－

116

834

Accrued expenses

4,389

565

－

5,002

Unrealised profit on inventories

2,248

224

－

49
－

Depreciation and amortisation

3,716

1,650

－

－

5,366

96

(96)

－

－

(0)

－

1,146

705

19
－

－
7

－

712

3,349

(10)

－

44

3,382

Sub total

17,689

2,484

7

246

20,426

Undistributed retained earnings

(605)

(501)

－

－

(1,106)

Depreciation and amortisation(3,601)(210)(2,409)－(7,920)(102)(1,910)－－Net gain/(loss) on revaluation

Tax goodwill
Impairment losses
Exchange differences on

1,127

2,472

translating foreign operations
Othersof subsidiaries(312)of available-for-sale financial
assets
(507)

110

－

(190)

(586)

(4,814)(2,301)(210)(2,599)(9,924)

10,990(8,376)

－

－

2,615

841

(653)

－

－

188

Sub total

11,831(9,029)

－

－

2,802

Total

24,706(8,846)(203)(2,353)

13,305

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

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

51

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

Recognised inotherBusiness

As at

1 April 2012

profit or loss

comprehensive

Combinations

31 March 2013

incomeTemporary differences
Enterprise tax payable

414

3,454

－

3

3,871

Written down inventories

9,332(4,441)

－

370

5,260

Allowance for doubtful

5,010

1,900

－

27

6,936

accounts
Other provision

7,143

487

－

1,235

8,866

Accrued expenses

46,663

6,005

－

518

53,186

Unrealised profit on inventories

23,905

2,383

－

－

26,289Depreciation and amortisation

39,50917,547－－57,056

Tax goodwill

1,025(1,025)－－(0)

Impairment losses

11,979204

12,183

7,498

－

－
76

－

Exchange differences on

－

7,574

35,606

(107)

－

465

35,964

Sub total

188,085

26,40776

2,618

217,186

Undistributed retained earnings(6,433)(5,327)－－(11,760)

Depreciation and amortisation(38,286)(20,313)(84,212)(1,083)－－(2,234)(25,613)

Net gain/(loss) on revaluation－(3,317)translating foreign operations
Othersof subsidiaries

of available-for-sale financial
assets(5,386)

1,175－(2,019)(6,231)(51,188)(24,466)(2,234)(27,632)(105,520)

116,857(89,056)－－

27,801

8,938(6,943)

－

－

1,995

Sub total

125,795(95,999)－－

29,796

Total

262,692(94,057)(2,157)(25,014)

141,463

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

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

52

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

(Millions of Yen)

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

As at

As at

As at

31 March 2012

31 March 2013

31 March 2013

Tax losses carry forward

6,775

Deductible temporary differences

1,791

942

10,0138,566

11,286

120,004

Total

10,345

109,991

The expiration date and amounts of tax losses carry forward 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

As at

As at

31 March 2012

31 March 2013

31 March 2013

Year 1560

1,094

11,630Year 2888

1,460

15,528Year 3

825

922

9,804

Year 4966

2,056

21,863

3,537

4,812

51,165

6,775

10,345

109,991

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 2012 and 2013 were 186,795 million yen and 250,948 million yen (2,668,244
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 deferred tax assets on the tax losses of 9,292 million yen as at 31 March 2012 . The Company recognised nodeferred tax assets on the tax losses as at 31 March 2013, because such tax losses were fully utilised in the current year and theCompany does not have any tax losses as at 31 March 2013.

53

(2) Income taxes
In Japan, the normal effective statutory tax rates are approximately 40.5% and 38.0 % for the years ended 31 March 2012 and 2013,
respectively.
Current or deferred taxes at other tax jurisdictions are calculated by the tax rates generally applied to those tax jurisdictions.
Details of current tax expense and deferred tax expense are as follows:(Thousands of(Millions of Yen)

(Millions of Yen)

For the year ended

For the year ended

For the year ended

31 March 2012

31 March 2013

31 March 2013

U.S.Dollars (Note 2))

Current tax expense: (i)Current year

4,889

9,116

Prior years

1

(27)

(289)

4,890

9,089

96,640

Origination and reversal of temporary difference

9,336

9,036

96,081

Changes in tax rates

1,624
10,960－9,036－
96,081

Total current tax expense

96,929Deferred tax expense: (ii)

Total deferred tax expense
Total income tax expense

15,85018,125

192,722

Continuing operations

14,231

18,125

192,722

Discontinued operations

1,619

－

－

Note:
(i) ‘Current tax expense’ includes previously unrecognised tax benefits from tax losses carry forward, tax credits and deductible
temporary differences. These benefits were 489 million yen and 135 million yen (1,435 thousand U.S.dollars) for the years ended
March 2012 and 2013, respectively.
(ii) ‘Deferred tax expense’ includes previously unrecognised tax benefits from tax losses carry forward, tax credits, deductible
temporary differences, and expenses or benefits arising from write-downs of deferred tax assets or the reversal of previous writedowns of deferred tax assets. These effects increased/decreased the deferred tax expense by (72) million yen and (135) million yen ((1,438) thousand U.S.dollars) for the years ended March 2012 and 2013, respectively.
Adjustments from normal effective statutory tax rate to actual tax rate are as follows: the actual tax rate represents the ratio of income
tax expense and profit before tax from continuing operations.
For the year ended

For the year ended

31 March 2012

31 March 2013

Effective statutory tax rate

40.5%

38.0%

Expenses not deductible for tax purposes

2.0%

0.7%
(4.7)%

Revenue not taxable for tax purposes(1.4)%

Effect of unrecognised deferred tax assets(0.7)%

0.4%

Impact of different tax rates applied to overseas subsidiaries(21.2)%(17.5)%

Profits and losses on investments in associates(1.3)%

5.1%

Adjustment on deferred tax assets and liabilities due to the change of corporate tax
rate

3.0%

－%

Others5.4%(1.7)%

Actual tax rate

26.3%

20.3%

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

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

(Millions of Yen)

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

As at

As at

As at

31 March 2012

31 March 2013

31 March 2013

Other financial assets
FVTPL financial assets (derivative instruments)

1,058

3,555

37,795

Available-for-sale financial assets

2,982

3,281

34,887Loans and receivables
Loans and receivables

52,462

12,514133,054

Allowance for doubtful accounts

(789)

(990)

(10,525)

Loans and receivables –net

51,673

11,524

122,52955,71318,360195,211

8,442

9,150

97,28747,272

9,210

97,924Total
Non-current assets total (Long-term financial
assets)Current assets total (Other short-term financial
assets)(Millions of Yen)

(Millions of Yen)

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

As at

As at

As at

31 March 2012

31 March 2013

31 March 2013

Other financial liabilities
FVTPL financial liabilities (derivative instruments)

383

349

3,710

Other financial liabilities measured at amortised

259

185

1,963

642

534

5,673

－

149

1,581

642

385

4,092

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

55

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 2012

As at 31 March 2013

As at 31 March 2013

1,907

1,853

19,706

Non-current: Other assets
Long-term prepaid expenses
Others
Total

212

613

6,522

2,119

2,467

26,228Current: Other assets
Prepaid expenses

2,234

2,196

23,352

Refundable consumption taxes

3,354

4,796

50,993

Others

1,149

794

8,440

6,738

7,786

82,785

Total(Millions of Yen)

(Millions of Yen)

(Thousands of U.S.Dollars

As at 31 March 2012

As at 31 March 2013

As at 31 March 2013

－
1,251

1,009

10,724

1,215

12,923

1,251

2,224

23,647

10,191

11,159118,654

Other accrued expenses

10,90012,146

129,148

Advance received/Deferred revenue (i)

3,531

1,785

18,982

Accrued consumption taxes

1,155

1,567

16,659Others (ii)

8,053

2,906

30,90033,83029,564314,343(Note 2))
Non-current: Other liabilities
Consideration payable for business acquisition
Deposit received and Long-term advancerevenue, etc
Total
Current: Other liabilities
Accrued salary/Accrued bonus/Accrued vacation
pay

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

(Millions of Yen)

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

As at 31 March 2013

As at 31 March 2013

110

－

－

Advance received/Deferred revenue
Customer loyalty programmes
Government grants
Others
Total

103

250

2,655

3,318

1,536

16,328

3,531

1,785

18,982(ii) Proceed from insurance claim of 5,476 million yen for the massive flood in Thailand in October 2011 is included in‘Others' as at 31 March 2012.

56

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 2012

As at 31 March 2013

As at 31 March 2013

Goods and products

28,40428,766

305,856

Work in progress

6,636

6,393

67,977

Raw materials

18,134

20,273

215,552

Supplies

9,798

11,289120,027

62,972

66,720709,412

1

1

7

Total
Inventories expected to be soldafter more than 12 months
No inventories were pledged as collateral to secure debt.

The cost of inventories recognised as expense during the years ended 31 March 2012 and 2013 was 192,092 million yen and 201,701
million yen (2,144,614 thousand U.S.dollars), respectively.
The cost of inventories recognised as expense in respect of write-down and the reversal of such write-down is as follows:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S.Dollars

For the year ended

For the year ended

For the year ended(Note 2))31 March 2012

31 March 2013

Amount of write-down

31 March 2013

1,743

2,272

24,158－－－Amount of reversal of writedown

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

(Millions of Yen)

(Thousands of U.S.Dollars

As at 31 March 2012

As at 31 March 2013

As at 31 March 2013

(Note 2))
Accounts receivable

69,671

73,416

Notes receivable

6,478

6,526

780,602
69,388Other receivables

1,415

10,874

115,621

Allowance for doubtful accounts(1,873)(1,992)(21,181)

Total

75,691

88,824944,431

The credit terms for customers are set between 90 days to 120 days on average.
Refer to Note 23 “Financial instruments” for credit risk management and fair value of trade and other receivables.
Other receivables as at 31 March 2013 include insurance proceeds receivable of 9,652 million yen (102,626 thousand U.S.dollars)
for the damaged fixed assets and business interruptions caused by the flood in Thailand in October 2011. This amount is included in"Other income (Insurance proceeds)" in Consolidated Statement of Comprehensive Income for the year ended 31 March 2013.

57

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

(Millions of Yen)

(Thousands of
U.S.Dollars(Note 2))As at 31 March 2012 As at 31 March 2013 As at 31 March 2013
Cash and cash equivalents
Cash and deposit within three months
Short-term investments within three months
Total

58

204,772－

239,498
9,398

2,546,493
99,928204,772

248,8962,646,421

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

Yen)

Yen)

U.S.Dollars

Averageinterest rate

(Note 2))As at 31 March As at 31 March As at 31 March
2012

2013

2013

Due date(%)(i)

Long-term bank loans (excluding current portion)

441

12

128

4.00

Current portion of long-term bank loans

905

1,477

15,702

2.14

2015-2017
－

3.62
－

－

Short-term bank loans

137

6

60

Bonds (ii)59,89960,126639,299

Current portion of bonds (ii)39,988234

2,491

Long-term finance lease obligations (Note 17)

481

699

7,436

1.10
－

Short-term finance lease obligations (Note 17)

194

175

1,857

－

Interest-bearing debt Total

102,045

62,729666,974

Non-current debt total

60,821

60,837646,863

Current debt total

41,224

1,891

20,111－－
2014-2019－

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

Item

Yen)

Yen)

As at 31

As at 31

Issue Date

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

Interest rate(%)

Collateral(Millions of

Due

Yen)

March 2012 March 2013 March 2013
HOYA

Unsecured

CORPORATION

bond (No.1)

HOYA

Unsecured

CORPORATION

bond (No.2)

HOYA

Unsecured

CORPORATION

bond (No.3)

Japan Universal

9 Private

Technologies, Inc.

Notes

Total

－

11
September

20－

39,988

－

1.42

－

2007

2012

11
September

19
24,96724,980265,601

1.62

－

2007

20
34,932

34,944

371,545

1.93

－

2007
2009-2012－

September
2014

11
September

September

September
2017

－

437

4,644

1.29

－

2013-201899,88760,360641,790－－－

The obligations under finance lease are secured by the leased assets for which the lessor has ownership. Refer to Note 17 “Financelease obligations”.
There is no debt with covenants as at 31 March 2013.
Details of the remaining contractual maturity for long-term borrowings and bonds, and fair values are set out in Note 23 “Financial
instruments”.

59

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

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

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

(Thousands of

U.S.Dollars

U.S.Dollars(Note 2))

(Note 2))As at 31 March

As at 31 March

As at 31 March

As at 31 March

As at 31 March

As at 31 March

2012

2013

2013

2012

2013

2013

Amounts payable under financeleases:
Not later than one year

203

201

2,137

194

175

1,857

Later than one year but not later

473

725

7,704

402

662

7,041

than five years
Later than five years

111

43

462

79

37

395

Total

787

969

10,303

675

874

9,293

Less future finance charges

(112)

(95)

(1,010)Present value of lease

675

874

9,293

675

874

9,293

194

175

1,857

481

699

7,436

obligations
Less amount due for settlement
within 12 months
Amount due for settlement after
12 months
Basically, the Group has not entered into any new finance lease contracts. The Group enters into a lease contract only when it
concludes that it has a number of advantages of having a lease arrangement in respect of cost reduction or the avoidance of the risk
associated with product obsolescence. The average remaining lease term is approximately four to five years as at 31 March 2013.
Some lease contracts include renewal options or purchase options. However, there is no sub-lease contract, contingent rent, escalation
payments and specific limitations (such as dividends, additional borrowing, and additional lease contract), included in these lease
contracts.
The Group’s fair values of lease obligations are set out in Note 23 “Financial instruments”.

60

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

(Millions of Yen)

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

For the year ended

For the year ended

31 March 2012

31 March 2013

31 March 2013

Minimum lease payments

6,003

Contingent rent
Total

6,547

69,609

338

446

4,741

6,342

6,993

74,350

The amounts above are included in the line item ‘Other expenses’ in the consolidated statement of comprehensive income.
Contingent rent related to rent contracts for stores at shopping malls are based on the stores’ sales amounts.
As at 31 March 2012 and 2013, 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

For the year ended

For the year ended

For the year ended

31 March 2012

31 March 2013

31 March 2013

(Note 2))

832

1,218

12,946Later than 1 year but not later than 5 years

Not later than 1 year

1,098

2,449

26,040Later than 5 years

1,003

417

4,429

2,933

4,083

43,416

Total

Operating lease payments represent rentals payable by the Group for the land used for an office, building and machinery. The averageremaining operating lease terms for those assets as at 31 March 2013 are four years, two years and two years, respectively.
Some lease contracts include renewal options. However, there is no purchase option, sub-lease contract, escalation payments or
restrictions (such as dividends, additional borrowing, and additional lease contract), included in these lease contracts.

61

19.Retirement benefit plans
The Group has contributory defined contribution plans and defined benefit plans, and non-contributory defined benefit plans. For theaccounting policies adopted by the Group for retirement benefit plans, refer to Note 3 “Significant accounting policies (19) Retirement
benefit costs”.
The Company and its domestic subsidiaries mainly have defined contribution plans. Overseas subsidiaries have benefit plans requiredby local law and regulations of each country. Unless a defined benefit plan is required by the laws of the country in which the overseas
subsidiaries operate, a defined contribution plan has been put into place.
Defined benefit plans taken over from PENTAX CORPORATION as a result of the merger had a significant portion of retirement
benefit plans of the Group, however, the plans were settled in the year ended 31 March 2013.
The Group does not have retirement benefit plans other than pension plans and retirement allowances.
(1) Defined benefit plans
Pension plans carried forward from the merger with PENTAX CORPORATION included the following two plans settled in the year
ended 31 March 2013:
Details of each of the plans were as follows:① Retirement allowances
Pension benefits

Option for pension plans

Survivors pension benefits② Defined benefit plans

Based on accumulated points earned taking Based on accumulated points earned
into account qualification and employment during the duration of membership,
period. One time retirement payment.
accumulated title point and accumulated
working point－
Selection available for a member with 20
years or more participation. For others, aone-time retirement payment or transfer toanother plan.
－
None (one-time payment to survivor)-The portion of Tax Qualified Pension
Plans (TQPP) as of 1 October 2009 is
paid as survivors' pension benefits.

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

Benefit payment frequency－

Six times annually

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

(Millions of Yen)

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

As at 31 March 2012

As at 31 March 2013

Obligations under defined benefit plans (funded)

12,041

3,273

As at 31 March 2013
34,797

Fair value of plan assets(7,757)(2,442)(25,965)
8,832

Total

4,285

831

Obligations under defined benefit plans (unfunded)

2,932

598

6,353

Net actuarial gains not recognised(380)(4,036)Upper limit of plan assets(1,864)
－

258

2,741

Net liability arising from defined benefit plans

5,352

1,306

13,890Liability

5,533

1,309

13,922

Asset (Other non-current assets)

(181)

(3)

(33)

obligations
Balance in the consolidated statement of financial
position

62

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

(Millions of Yen)

(Thousands of U.S.Dollars

For the year ended

For the year ended

For the year ended(Note 2))31 March 2012

31 March 2013

31 March 2013

Current service cost

560

466

4,956

Interest cost

335

262

2,782

Expected return on plan assets

(215)

(205)

(2,176)

Actuarial losses

211

2,239

Losses on settlement

351
－

616

6,552

Effect of upper limit of plan assets

－

258

2,741

Gain on business transfer

(166)

－

－

Total

866

1,608

17,094

Continuing operations

701

1,608

17,094

Discontinued operations

164

－

－

Actual return on plan assets

194

289

3,072

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 2012

31 March 2013

31 March 2013

(Note 2))

Opening defined benefit plans obligations

18,576

14,973

159,206

Current service cost

560

466

4,956

Interest cost

335

262

2,782

Actuarial (gains) losses

201
－

183

1,942

5

58

Increase due to acquisition of subsidiaries－(11,371)(120,907)

Decrease due to business transfer(3,395)

Benefits paid

(1,227)－(1,065)－(11,327)

Decrease due to settlement

Foreign currency translation gain (loss)

(76)

418

4,441

Closing defined benefit plans obligations

14,9733,870

41,150Movements 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

For the year ended

For the year ended

31 March 2012

31 March 2013

31 March 2013

Opening fair value of plan assets

8,135

7,757

82,473

Expected return on plan assets

215

205

2,176

Actuarial gains (losses)

(21)

84

896

Contributions from employer

543
－

365

3,884

Decrease due to settlement(5,581)(59,342)

Decrease due to business transfer(364)

Benefits paid

(708)

－
(611)

－
(6,496)

Foreign currency translation gain (loss)

(44)

223

2,375

Closing fair value of plan assets

7,757

2,442

25,965The Group expects to make a contribution of 84 million yen (892 thousand U.S.dollars) to the defined benefit plans for the year
ending 31 March 2014.

63

The major categories of plan assets are as follows:
As at 31 March 2012

As at 31 March 2013

Domestic equity instruments

16%

－%

Overseas equity instruments

23%

57%

Domestic debt instruments

9%－%Overseas debt instruments

20%

35%

General accounts at life insurance

10%

－%

Cash and deposits

21%

1%

Others

1%

7%

100%

100%

companies (guaranteed return)Total

The principal assumptions used for the purposes of the actuarial valuations were as follows:
As at 31 March 2012

As at 31 March 2013

Discount rate

1.5%

4.4%

Expected rate of return on plan assets

1.6%

6.5%

Expected rate of salary increase

7.3%

－%

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

Yen)

Yen)

Yen)

Yen)

(Millions of (Thousands of
Yen)

U.S.Dollars(Note 2))Present value of defined benefit plans

As at

As at

As at

As at

As at

As at

31 March

31 March

31 March

31 March

31 March

31 March

2009

2010

2011

2012

2013

2013

21,473

19,031

18,576

14,9733,870

41,150Fair value of plan assets(8,567)(8,418)(8,135)(7,757)(2,442)(25,965)

Fund deficit

12,906

10,613

10,441

7,217

1,428

15,185Adjustments on plan liabilities

1,338

172

(142)

201

183

1,942

Adjustments on plan assets(1,738)

1,127

(310)

(21)

84

896

obligations(2) Defined contribution plans
The total expense recognised was 1,377 million yen including 17 million yen for discontinued operations, and 1,451 million yen (15,428 thousand U.S.dollars), for the years ended 31 March 2012 and 2013, respectively.
(3) Severance payments
Under certain circumstances (such as retirement before the normal retirement date), additional payments are made upon retirement.
The total expense recognised was 1,493 million yen including 10 million yen from discontinued operations, and 2,465 million yen (26,209 thousand U.S.dollars), for the years ended 31 March 2012 and 2013, respectively.

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

(Millions of Yen)

(Thousands of U.S.Dollars(Note 2))As at 31 March 2012
Asset retirement obligation
Warranties provision
Total
Non-current liabilities
Current liabilities

As at 31 March 2013

As at 31 March 2013

1,677

2,071

22,024

597

704

7,489

2,274

2,776

29,512

1,662

1,975

21,005

612

800

8,508

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

Warranty provision

Total

Balance at 1 April 2012

1,677

597

2,274

Provision for the year

74

717

Business Combination

318

643
－

318

Interest cost associated with passage of time

16

－

16

Reduction resulting from settlement for the year

(92)

(600)

(691)

Effect of foreign currency exchange differences

78

64

142

2,071

704

2,776

Balance at 31 March 2013

(Thousands of U.S.Dollars (Note 2))
Asset retirement obligation
Balance at 1 April 2012

Warranty provision

Total

17,826

6,352

24,178Provision for the year

790
3,383

6,834
－

7,624

Business Combination
Interest cost associated with passage of time

167

－

167

Reduction resulting from settlement for the year(973)

(6,376)(7,349)Effect of foreign currency exchange differences

831

679

1,510

22,024

7,489

29,512

Balance at 31 March 2013

3,383

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

65

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

(Millions of Yen)

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

As at 31 March 2013

As at 31 March 2013

Accounts payable

26,354

20,572

218,731

Notes payable, trade

1,199

373

3,967

Processing cost payable
Other payables
Notes payable for capital investment
Total

497

399

4,242

14,057

19,045

202,497

32

27

282

42,13840,415

429,718

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

66

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

Number of issued

Number of

authorised sharessharesoutstanding shares

Share capital(Ordinary shares (Ordinary shares (Ordinary shares(Millions ofShare capital

Capitalreserves(Millions of (Thousands of (Thousands of

Yen)

Yen)

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

value）

value）

1,250,519,400

435,017,020

431,414,172

6,264

Increase (i)－－11,248

Balance at

1,250,519,400

435,017,020

Increase (i)－Balance at

1,250,519,400

Balance at

Capitalreserves

U.S.Dollars

U.S.Dollars(Note 2))

(Note 2))

15,89966,605

169,045

－

－

－

－

431,425,420

6,264

15,89966,605

169,045－

70,721－－－－

435,017,020

431,496,141

6,264

15,89966,605

169,045

1 April 2011

31 March 2012

31 March 2013
Note:(i) Increase or decrease in number of outstanding shares is due to increase or decrease in treasury shares.
(2) Treasury shares and other capital reserves① Treasury shares
AmountNumbers of shares
Balance at 1 April 2011

(Millions of Yen)

3,602,848

10,964972

2

Repurchase of odd-lot shares

(220)

(1)

Decrease on exercise of stock option

Disposal of odd-lot shares to shareholders with odd-lot shares(12,000)(37)

Balance at 31 March 2012

3,591,600

10,928

Repurchase of odd-lot shares

911

2

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

(32)

(0)

Decrease on exercise of stock option(71,600)(218)

Balance at 31 March 2013

3,520,879

10,712
AmountNumbers of shares(Thousands of U.S.Dollars(Note 2))

Balance at 31 March 2012

3,591,600

116,195

Repurchase of odd-lot shares

911

17

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

(32)

(1)

Decrease on exercise of stock option(71,600)(2,316)

Balance at 31 March 2013

3,520,879

113,895

67

② Other capital reserves
Gain (loss) on resale

Stock option (i)Others

Total(Millions of Yen)

(Millions of Yen)

(Millions of Yen)

(Millions of Yen)

Balance at 1 March 2011

(4,885)2,389－(2,496)

Disposal of treasury shares

(15)
－

(3)
－

－

(18)
(393)

of treasury shares

Change in non-controlling interests (ii)

－

402

(393)
－

Balance at 31 March 2012

(4,900)

2,788

(393)

(2,505)

Disposal of treasury shares

(89)
－

(17)

－

(106)

299

－

299

(4,989)

3,070

(393)

(2,313)

Share-based payments

Share-based payments
Balance at 31 March 2013

Gain (loss) on resale

402

Stock option (i)Others

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

U.S.Dollars

U.S.Dollars

U.S.Dollars

U.S.Dollars(Note 2))

(Note 2))

(Note 2))

(Note 2))of treasury shares

Balance at 31 March 2012

(52,100)

29,641(4,178)(26,637)

Disposal of treasury shares

(949)

(182)

－

(1,132)

－

3,180

－

3,180

(53,049)

32,639(4,178)(24,588)

Share-based payments
Balance at 31 March 2013
Note:(i) Refer to Note 25 “Share-based payments” for details of stock option.
(ii) The Group acquired 49 percent of shares in HOYA HILL OPTICS SA (PTY) LTD., a consolidated subsidiary and the ownershipinterest of the Group has increased to 100 percent.
The difference between the decrease of non-controlling interests (proportional interests of the carrying amount of the net assets)
and the consideration paid in the amount of 393 million yen is included in 'Other capital reserves' in the consolidated statement offinancial position.
(3) Retained earnings and dividends
Amount(Millions of Yen)
Balance at 1 April 2011

427,722

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

43,219Dividends(28,042)

Balance at 31 March 2012

442,898

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

71,099Dividends(28,045)

Balance at 31 March 2013

485,953

68

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

4,709,180

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

755,975

Dividends(298,190)

Balance at 31 March 2013

5,166,966

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

share

Dividends per
share

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

(Millions of
Yen)

Total Dividends(Thousands of
U.S.Dollars

Record date

Effective date

(Note 2))31 May 2011

35

0.37

15,099160,542

31 March 2011

2 June 2011

31 October 2011

30

0.32

12,943

137,61530 September 2011

30 November 2011

30 May 2012

35

0.37

15,100160,552

31 March 2012

1 June 2012

31 October 2012

30

0.32

12,945

137,638

30 September 2012

30 November 2012

30 May 2013

35

0.37

15,102

160,578

31 March 2013

3 June 2013

Dividends payable are included in the line item of ‘Other current liabilities’ in the consolidated statement of financial Position.
(4) Non-controlling interests
Amount(Millions of Yen)
Balance at 1 April 2011

705

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

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

Dividends(1)

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

Balance at 31 March 2012

(149)

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

143

Translation differences for foreign operations (other comprehensive income)1

Dividends(134)

Decrease due to liquidation of subsidiaries(47)

Balance at 31 March 2013

(187)
Amount(Thousands of U.S.Dollars (Note 2))

Balance at 31 March 2012

(1,584)

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

1,516

Translation differences for foreign operations (other comprehensive income)
Dividends

6(1,421)

Decrease due to liquidation of subsidiaries(502)

Balance at 31 March 2013

(1,984)69

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

(Millions of Yen)

(Thousands of U.S.Dollars

As at

As at

As at

31 March 2012

31 March 2013

31 March 2013

(Note 2))

Interest-bearing debt

102,045

62,729666,974

Less: Cash and cash equivalents

204,772

248,8962,646,421

Net debt(102,727)(186,167)(1,979,447)

Equity384,653

470,685

5,004,624

In order to maximise the corporate value of the Group, cash flows have been a priority of the Group management. As at 31 March2012 and 2013, the Group maintained cash and cash equivalents balances in excess of interest-bearing debt balances. The Group is not
subject to any externally imposed capital regulation as at 31 March 2013.
Details of interest-bearing debt, cash and cash equivalents and equity are described in Note 16 “Interest-bearing debt”, Note 15 “Cashand cash equivalents”, and Note 22 “Share capital and other equity items”, respectively.

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

70(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 2012

31 March 2013

31 March 2013

Financial assets
FVTPL financial assets (derivative instruments) (ii)

1,058

3,555

37,795Trade and other receivables

75,691

88,824944,431

Other financial assets (ii)

51,673

11,524

122,529

Loans and receivables

Available-for-sale financial assets (ii)

2,982

3,281

34,887204,772

248,8962,646,421

383

349

3,710

Trade and other payables

42,13840,415

429,718

Interest-bearing debt

102,045

62,729666,974

259

185

1,963

Cash and cash equivalents
Financial liabilities
FVTPL financial liabilities (derivative instruments) (iii)
Financial liabilities measured at amortised cost

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

(4) Financial risk management
In its operations, the Group is exposed to various financial risks. The Group undertakes risk management steps to minimise the effectsof these financial risks. In an effort to manage these risks, the Group’s risk management approach is to eliminate the 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.
There are certain cases in which the Group obtains additional borrowings from financial institutions to react to temporary cash
shortages or uses forward foreign exchange contracts to sustain cash flows. The above financial risks are managed by the financial
department of the Group.

71

(5) Market risk management
The Group is exposed to risks arising from changes in the economic environment and financial markets. The factors of the risk
relating to financial markets are fluctuation risk of foreign currency, interest rate, and fair value of equity instruments.
① Foreign currency risk
1) Foreign currency risk management
As the Group’s businesses have expanded globally, foreign exchange fluctuations in particular Thai Baht, Euro and U.S. dollar, have asignificant impact on the Group’s financial results. If the Japanese yen appreciates against these currencies, both sales and profit statedin Japanese yen might decrease even though sales and profit stated in local currencies have increased.
The Group intends to marry major currencies the Group uses (Euro, U.S. dollar and Yen) in settlements of receivables/payables
resulting from operating activities. Specifically, the subsidiaries that continuously conduct import or export transactions retain foreign
currencies obtained from exports of goods for payables on imported supplies. This enables the Group to mitigate foreign currency risk.
On the other hand, the Company, having multiple SBU and conducting finance and dividend, and holding companies receiving
dividends from their subsidiaries and distributing it to the Company and/or other group companies, sometimes falls into disparity offoreign currency debt-credit balances in receivables, liabilities and/or bank deposits. This might cause significant gains or losses on
foreign exchange differences when the Yen depreciates or appreciates against U.S. dollars or Euro, or when Euro appreciates ordepreciates against U.S. dollar.
2) Foreign currency sensitivity analysis
The chart below shows the impact on the profit and equity in a case of a 1% appreciation of Yen against the Thai Baht, Euro and U.S.
dollar with the assumption that other currencies are held constant.
For the year ended 31 March 2012

For the year ended 31 March 2013

Average exchange rate
(Yen per each currency)
Thai Baht

2.58

2.72

Euro

109.55107.39U.S. dollar

78.98

83.32

Thai Baht

(27)

(349)

Euro

(27)

(14)

U.S. dollar

(124)

(162)

Impact on profit for the year
(Millions of Yen)

Impact on equity(Millions of Yen)
Thai Baht

(109)

(403)

Euro

(447)

(321)

U.S. dollar

(240)

(291)

For the year ended 31 March 2013
Impact on profit for the year
(Thousands of U.S.Dollars (Note 2))
Thai Baht(3,706)

Euro

(149)

U.S. dollar(1,723)

Impact on equity(Thousands of U.S.Dollars (Note 2))
Thai Baht(4,285)Euro(3,416)

U.S. dollar(3,096)72

Note:
Numbers in brackets mean the amount of negative impact on profit and equity resulting from a 1% appreciation of Yen. The amounts
above represent the impact on the consolidated financial statements of the Group resulting from foreign currency conversion, not the
impact on Group’s cash flows or operations themselves.
Likewise, the charts below show the impact in case of a 1% appreciation of functional currencies of the Company and a holding
company in the Group on their receivables/liabilities and bank deposits denominated in foreign currency on the assumption that othercurrencies are held constant. The information of holding companies with minor risk is not included in the below chart.
2)-1. Parent company (the Company)(Millions of Yen)Euro
31 March 2012
Trade and other receivables

U.S. dollar
31 March 2013(20)

31 March 2012

(26)

31 March 2013

(201)

(188)

Trade and other payables

1

0

85

56

Long-term financial assets

(0)

(0)

(2)

Short-term financial assets

(0)

(7)

－
(282)

Cash and cash equivalents

(53)

－
(8)

(332)

(559)

Total

(72)

(35)

(457)

(973)

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

U.S. dollar

31 March 2013
Trade and other receivables

31 March 2013(277)

(1,995)Trade and other payables

0600

Long-term financial assets(0)

Short-term financial assets－(3,000)Cash and cash equivalents

－
(90)

Total

(368)

(5,948)(10,343)

Note:
Numbers in brackets mean the amount of negative impact on profit and equity resulting from a 1% appreciation of Yen. The 1%
depreciation of Yen has a positive impact in the same amount.
Intercompany receivables/payables are included in the calculation of the impact since they cause foreign exchange gain or loss in theprocess of translation.
2)-2. Holding company (Europe)(Millions of Yen)
Yen
31 March 2012

U.S. dollar
31 March 2013

31 March 2012

31 March 2013

Trade and other receivables

－

－

(3)

(3)

Trade and other payables

02Long-term financial assets

(0)

(0)

2
－

2
－

Cash and cash equivalents

(44)

(48)

(54)

(71)

(44)

(46)

(55)

(72)

Total

73

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

U.S. dollar

31 March 2013

31 March 2013(32)

Trade and other payables－
18

Long-term financial assets(0)Cash and cash equivalents

(508)

－
(752)

(490)

(767)

Trade and other receivables

Total

17

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

For the year ended

Average

31 March 2012

Notional value

Fair value

$47.0

3,850

10

$200.2

16,062(383)$ 200.0

15,3881,048

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

0.75(€Buy)(€/US$)

Within one year
US$Sell

0.73(€Buy)(€/US$)US$Buy76.94(Yen Sell)(Yen/US$)(Millions of Yen)

For the year ended

Average

31 March 2013

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

Notional value

Fair value

Notional value

Fair value$185.2

17,157(149)

182,424(1,581)$139.2

12,897(200)

137,129(2,128)$300.024,6253,555

261,826

37,795exchange rate currency (mil)Forward foreign exchange contracts
Over one year
US$Sell

0.77(€Buy)(€/US$)

Within one year
US$Sell

0.77(€Buy)(€/US$)US$Buy82.08(Yen Sell)(Yen/US$)Note:
The fair values of forward foreign exchange contracts at the end of each reporting period are determined based on the forward
exchange rate at market.

74

② Interest rate risk management
The majority of the interest-bearing debt is bonds with fixed interest rates. The Group’s cash and cash equivalents exceed the interestbearing debt, and currently the impact of interest expense on the Group’s profit/loss is insignificant. Therefore, the Group considers
that the interest rate risk is not significant and has not performed a sensitivity analysis such as Basis Point Value.
③ Price risks management in equity instruments
The Group is exposed to equity price risks arising from equity instruments (listed shares). These investments are held from aviewpoint of business strategy, not for short term trading purpose. The Group does not sell these investments frequently and the Group
periodically reviews the fair value of these instruments as well as the financial condition of investees.
The sensitivity analysis has been based on the exposure to the price of equity instruments (listed shares) at the end of the reporting
period. If equity prices increase or decrease by 5%, accumulated other comprehensive income (pre-tax) would change by 115 million
yen and 129 million yen (1,376 thousand U.S.dollars) as at 31 March 2012 and 2013, respectively, as a result of changes in fair valueof the equity instruments (listed shares).

75

(6) Credit risk management
Credit risk is the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Group. The Groupmanages its credit risk by setting credit limits which are approved by the authorised personnel of each SBU.
Credit losses incurred in the past were very rare for the Information technology business. Likewise, significant credit losses were notincurred in the past by the Life Care business since it manufactured products and sold to end consumers and medical institutions. A
division in the Life Care business of selling goods to medical institutions and operating wholesale business in certain countries has
some past-due receivables due to the financial conditions of those medical institutions or customers. Credit limits have been set for
those customers to minimise the loss from a failure to collect the receivables.
Trade receivables consist of large number of customers across diverse industries and geographical areas. The Group has neither
significant credit risk exposure for a specific customer or customer group categorised by similarity, nor concentration of credit riskover 5% of total financial assets as at 31 March 2013.
① Financial assets and other credit exposures
Except for the items below, the carrying amounts after impairment losses presented in the consolidated financial statements are themaximum exposure for the Group’s credit risk without considering the appraised value of the related collateral.
Maximum credit risk
(Millions of Yen)

(Millions of Yen)

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

982

As at 31 March 2013
527

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

76

As at 31 March 2013
5,603

② Impaired or past-due financial assets
The following table provides the ageing details of the financial assets not yet due and the financial assets past-due but not impaired at
the end of the reporting period:(Millions of Yen)
Balance at 31 March 2012
Total
Trade and other receivables

Within due
date

Overdue amounts
Within 30days

31 to 60 days 61 to 90 days

91 to 120

Over 120

days

days

77,564

69,760

3,664

800

475

642

2,224

Allowance for doubtful accounts(1,873)

(472)

(43)

(29)

(37)

(152)

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

69,288

3,621

771

1,085

52,46251,801

110

250

438
－

489

Other financial assets (gross)1

300

Allowance for doubtful accounts

(789)

(205)

(93)

(250)

－

(1)

(239)

Other financial assets (net)51,67351,596

17

－

－

－

60

(gross)(Millions of Yen)
Balance at 31 March 2013
Total
Trade and other receivables

90,816

Within due
date
80,189Overdue amounts
Within 30
days
4,764

31 to 60 days 61 to 90 days

91 to 120

Over 120

days

days

1,678

926

596

2,662

(gross)Allowance for doubtful accounts(1,992)

(628)

(11)

(31)

(66)

(78)

(1,178)Trade and other receivables (net)88,82479,561

4,753

1,647

861

518

1,484

Other financial assets (gross)

12,514

11,642

7

－

－

－

864

Allowance for doubtful accounts

(990)

(235)

－

－

－

－

(755)

Other financial assets (net)

11,524

11,407

7

－

－

－

109

(Thousands of U.S.Dollars (Note 2))
Balance at 31 March 2013
Total
Trade and other receivables

Within due
date

Overdue amounts
Within 30days

31 to 60 days 61 to 90 days

91 to 120

Over 120

days

days

965,611852,624

50,658

17,843

9,849

6,337

28,300(21,181)(6,682)

(119)

(326)

(697)

(829)

(12,527)
15,774(gross)Allowance for doubtful accounts
Trade and other receivables (net)944,431845,942

50,54017,517

9,151

5,507

Other financial assets (gross)

133,054

123,787

78

－

－

－

9,190

Allowance for doubtful accounts(10,525)(2,496)

－

－

－

－

(8,029)Other financial assets (net)122,529

121,291

78

－

－

－

1,161

77

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

Total

accounts (Non-current)

Balance at 1 April 2011

1,995

493

2,488

Provision for the year

539

386

926

Reduction resulting from settlement for the year

(197)

(78)

(275)

Reduction for the year (reversal)

(146)

(16)

(162)

Business transfer

(211)

－

(211)

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

(107)

4

(103)

Balance at 31 March 2012

1,873

789

2,662

Provision for the year

260

202

461

Reduction resulting from settlement for the year

(159)

(10)

(170)

Reduction for the year (reversal)

(183)

(26)

(209)

Business combinations

38

－

38

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

163

36

199

1,992

990

2,982

Balance at 31 March 2013

(Thousands of U.S.Dollars (Note 2))
Allowance for doubtful Allowance for doubtful
accounts (Current)
Balance at 31 March 2012

Total

accounts (Non-current)

19,918

8,388

28,306

Provision for the year

2,760

2,147

4,906

Reduction resulting from settlement for the year

(1,694)(111)(1,805)

Reduction for the year (reversal)(1,943)(278)(2,221)

408

－

408

Other (foreign exchange translation gains or losses）

1,732

379

2,111

Balance at 31 March 2013

21,181

10,52531,705Business combinations

78

The Group continuously monitors the financial status of customers which appear to represent a credit risk in collecting receivables
including restructured receivables. Based on this monitoring, the Group sets the allowance for doubtful accounts considering thecollectability of the receivables.
Because the Group operations are global, the credit risk is widely diversified among customers and the Group does not depend on
specific customers. Therefore the possibility of a chain-reaction of bankruptcies at a certain customer is considered to be remote and
the Group does not set additional general allowance for doubtful accounts resulting from the consideration of this credit risk.
③ Transfer of financial assets
The Group transferred some of its notes receivable to financial institutions before maturity on a discounted basis. The Group isrequired to repurchase these notes in the event of a default. Accordingly, the Group continues to recognise the full carrying amount of
the notes receivable until maturity and the cash proceeds received on the sale of the notes receivable is accounted for as a secured
borrowing.
There were no notes receivable transferred that were outstanding as at 31 March 2012 and 2013.

79

(7) Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the CFO of the Group who is appointed by the Board of Directors.
Based on the instructions from the CFO, the financial headquarters of the Group mainly manages the Group’s liquidity risk by
maintaining an appropriate level of retained earnings and credit facilities, and monitors the actual cash flows and forecasted cash
flows. Temporary cash shortages due to dividends or bonus payments are funded through the issuance of commercial paper.
The following table details the contractual maturity of its financial liabilities (including derivative financial instruments) but
excluding guarantee liabilities:(Millions of Yen)
Balance at 31 March 2012

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

Over 5amountcash flows

year

years

42,13842,138

－

－

－

－

441

42,138
－

－

441

58

57

57

57

212

905

905

905

－

－

－

－

－

137
－

－

－

－

－

－

－

－

－

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

137

137

Bonds (excluding current portion)

59,89960,000Current portion of bonds

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

481

481

40,000－25,000
－

152

123

73

54

79

194

194

194

－

－

－

－

－

259

259

259

－

－

－

－

－

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

383

383

383

－

－

－

－

－

144,824

144,938

84,016

210

25,180130

111

35,291(Millions of Yen)
Balance at 31 March 2013

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

Over 5amountcash flows

year

years

40,41540,415

－

－

－

－

12

40,415
－

－

12

4

4

4

－

－

1,477

1,477

1,477

－

－

－

－

－

6

6

6
－

－

－

－

－

－

25,126
－

21
－

21
－

35,021
－

14
－

230

184

150

99

37

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

60,12660,203Current portion of bonds

Bonds (excluding current portion)

234

234

Long-term finance lease

699

699

234
－

175

175

175

－

－

－

－

－

185

185

185

－

－

－

－

－

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

349

349

200

12

48

23

66

－

103,677

103,754

42,691

25,371

256

198

35,18651

80

(Thousands of U.S.Dollars(Note 2))
Balance at 31 March 2013

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

Over 5amountcash flows

year

years

429,718

429,718

429,718
－

－
43

－
44

－

128

－
41

－

128

－

－

15,702

15,702

15,702

－

－

－

－

－

－
267,156

－
223

－
223

－
372,366－
144

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

60

60

60

639,299

640,112Current portion of bonds

2,491

2,491

－
2,491

Long-term finance lease

7,436

7,436

－

－
2,442

－
1,953

－
1,594

－
1,052

－
395

1,857

1,857

1,857

－

－

－

－

－

1,963

1,963

1,963

－

－

－

－

－

Bonds (excluding current portion)

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

3,710

3,710

2,128

124

506

248

702

－

1,102,365

1,103,178

453,921269,763

2,725

2,110

374,120538

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

(Millions of Yen)

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

As at 31 March 2013

As at 31 March 2013

Loan commitment
Used
Unused
Total

－

－

－

50,000－－50,000－－Bank overdraft
Used
Unused
Total

－

－

－

56,00365,000691,12256,00365,000691,122－－－

Commercial paper limit
Used
UnusedTotal

50,00050,000531,632

50,00050,000531,63281

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

(Millions of Yen)

As at 31 March 2012

As at 31 March 2013

Carrying

Fair value

Carrying

amountU.S.Dollars (Note 2))
As at 31 March 2013

Fair value

amountCarrying

Fair value

amountAssetsFVTPL financial assets (derivative

1,058

1,058

3,555

3,555

37,79537,795

122,283

instruments)
Loans and receivables
Other financial assets

51,67351,65011,524

11,501

122,529

Available-for-sale financial assets

2,982

2,982

3,281

3,281

34,88734,887

Total

55,71355,691

18,36018,336

195,211

194,965

383

383

349

349

3,710

3,710

441

422

12

12

128

132

905

905

1,477

1,476

15,702

15,695

Bonds(excluding current portion)

59,89963,067

60,126

63,210639,299

672,086

Current portion of bonds

39,98840,238

234

237

2,491

2,521

Long-term finance lease

481

547

699

766

7,436

8,148

194

202

175

207

1,857

2,196

102,291

105,764

63,072

66,257

670,623

704,488

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

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

82

(9) Fair value measurements recognised in the consolidated statement of financial position
The following table provides an analysis of financial instruments that have been measured at fair value subsequent to initialrecognition:
The fair values are categorised into Levels 1 to 3.
Level 1: fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observablefor the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: fair value measurements are those derived from inputs for the asset or liability that are not based on observable market data
(unobservable inputs).
Financial instruments valued at fair value are as follows:(Millions of Yen)
As at 31 March 2012

Level 1

Available-for-sale financial assets

Level 2－FVTPL financial assets (derivative instruments)

Level 3

Total

1,058

－

1,058

2,064

239

680

2,982

Total

2,064

1,297

680

4,040

FVTPL financial liabilities (derivative instruments)

－

383

－

383

Total

－

383

－

383
(Millions of Yen)

As at 31 March 2013

Level 1

Level 2

Level 3

Total

－

3,555

－

3,555

2,237

352

693

3,281

Total

2,237

3,906

693

6,836

FVTPL financial liabilities (derivative instruments)

－

349

－

349

Total

－

349

－

349

FVTPL financial assets (derivative instruments)
Available-for-sale financial assets(Thousands of U.S.Dollars (Note 2))
As at 31 March 2013
FVTPL financial assets (derivative instruments)
Available-for-sale financial assets
Total

Level 1

Level 2

Level 3

Total－
23,78137,795
3,740

－
7,366

34,88737,79523,781

41,535

7,366

72,682FVTPL financial liabilities (derivative instruments)

－

3,710

－

3,710

Total

－

3,710

－

3,710

Note:
No transfers occurred between Levels 1, 2 and 3 during the years ended 31 March 2012 and 2013.

83

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

For the year ended 31 March 2012

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

Opening balance

1,016

1,016

Total gains or losses:

(337)

(337)

- in profit or loss (i)

(260)

(260)

- in other comprehensive income (ii)

(78)
－

(78)
－

1

1

680

680

Purchase
OthersClosing balance

For the year ended 31 March 2013

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

Opening balance

680

680

Total gains or losses:

(237)

(237)

- in profit or loss (i)

(292)

(292)

Purchase

55
－

55
－

Others250

250

Closing balance

693

693

- in other comprehensive income (ii)

For the year ended 31 March 2013

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

Opening balance

7,228

7,228

Total gains or losses:(2,519)(2,519)- in profit or loss (i)(3,105)(3,105)

585
－

585
－

2,658

2,658

7,374

7,374

- in other comprehensive income (ii)
Purchase
OthersClosing balance
Note:(i) In the total gains or losses for the years ended 31 March 2012 and 2013 included in profit or loss, (260) million yen and (292)
million yen ((3,105) thousand U.S.dollars), respectively, relate to available-for-sale financial assets at the end of the reporting period.
Related loss of these assets is included in the line item of ‘Finance costs’ in the consolidated statement of comprehensive income.
Refer to Note 27 “Finance income and costs”.
(ii) In the total gains or losses for the years ended 31 March 2012 and 2013 included in other comprehensive income, (78) million yen
and 55 million yen (585 thousand U.S.dollars), respectively, relate to the shares not traded in the market. Related loss and profit isincluded in the line item of ‘Net gain/ (loss) on revaluation of available-for-sale financial assets’ in Note 29 “Other comprehensive
income”.

8424.Assets held for sale
Details for carrying amounts of assets held for sales as at 31 March 2012 are as follows:(Millions of Yen)
As at 31 March 2012Land
Corporate

5,356

Note:
The sale of the above land of Itabashi 1st Plant was approved in the year ended 31 March 2012, and was sold in the year ended 31
March 2013.
The Group has no assets held for sales as at 31 March 2013.

85

25.Share-based payments(1) Detail of share-based payments
The Group has a stock option plan. The purpose of the plan is to increase the value of the Group and to improve the financial result of
the Group by motivating the members such as directors, officers, and employees of the Group, and as well as to retain valuable
employees.
After overall approval at the shareholders meeting, options are granted to individuals that are proposed and approved at the Group’s
Board of Directors’ meeting. The options are granted at no cost. The exercise period of the options is the period determined in theoptions contract and options not exercised within this exercise period will expire. Subsequent to the grant date, if a member terminates
his or her employment prior to the vesting date, the options will expire. The option contract includes a clause that limits the maximum
number of stock options a member can exercise each year during the exercise periods.
Stock options granted to members are accounted for as share-based payments transactions. Expenses recorded to other comprehensive
income from undertaking shared-based payments transactions were 402 million yen and 299 million yen (3,180 thousand U.S.dollars)
for the years ended 31 March 2012 and 2013, respectively.
Details of the stock options that are outstanding for the years ended 31 March 2012 and 2013 are as follows:No.

Number of shares

Grant date

Expiry date

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

5

445,000

1 Jan 2006

30 Sep 2015

4,150

2,917

6

585,600

7 Nov 2006

30 Sep 2016

4,750

3,961
3,357

7

77,60014 Nov 2007

30 Sep 2017

4,230

8

1,036,000

28 Nov 2008

30 Sep 2018

1,556

952

9

60,00024 Feb 2009

30 Sep 2018

1,704

1,521

10

1,247,600

8 Dec 2009

30 Sep 2019

2,215

2,784
1,861

11

1,225,600

7 Dec 2010

30 Sep 2020

1,947

12

680,800

17 Jan 2012

30 Sep 2021

1,616

1,427

13

560,800

16 Jan 2013

30 Sep 2022

1,648

1,707

Note:
The fair value of the stock options at grant date does not include the fair value of stock options to which IFRS 2 “Share-based
Payments” does not apply, as mentioned in (4) below.
(2) Determination of stock option value
Weighted average fair value of the stock option granted during the years ended 31 March 2012 and 2013 was 1,427 yen and 1,707
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 2012 and 2013:
Expected volatility was determined based on recent historical daily share price volatility from the grant date to forecasted remaining
period.
No.12

No.13

Share price at grant date (Yen)

1,611

1,771

Exercise price (Yen)

1,616

1,648

Expected volatility

37.26%

36.34%

Expected remaining option life (years)

6.0

6.0

Dividends yield

4.04%

3.67%

Risk free rate

0.45%

0.28%

86

(3) The number and weighted average exercise prices of stock options
Weighted average exercise price of the outstanding options was 2,402 yen and 2,323 yen as at the years ended 31 March 2012 and2013, respectively. Weighted average remaining contractual life was 7.2 years and 6.7 years as at 31 March 2012 and 2013,
respectively.
For the year ended 31 March 2012

For the year ended 31 March 2013

Weighted average
Number of shares

exercise price

Weighted average
Number of shares

(Yen)

(Yen)

4,263,000

2,502

Granted

680,800

Forfeited (i)(434,300)

Outstanding at the beginning of the period

exercise price

4,497,500

2,402

1,616

560,800

1,648

2,177

(383,900)

2,404

Exercised(12,000)

1,556(71,600)

1,557

Outstanding at the end of the period

4,497,500

2,402

4,602,800

2,323

Exercisable at the end of the period

2,275,000

2,920

2,824,100

2,654

Note:
(i) Stock options forfeited were due to employee retirements.
Stock options exercised during the year ended 31 March 2013 were as follows:No.

Number of shares exercised

Exercise date

Share price at exercise date (Yen)

8400

10 Apr 2012

1,798

8

70,00010 Jul 2012

1,750

8

400

10 Sep 2012

1,728

12

800

11 Mar 2013

1,822

Total

71,600Stock options exercised during the year ended 31 March 2012 were as follows:No.

Number of shares exercised

Exercise date

Share price at exercise date (Yen)

8

1,200

10 Aug 2011

1,698

8

8,800

12 Sep 2011

1,669

8

2,000

12 Mar 2012

1,851

Total

12,00087

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

NumberGrant date

Expiry date

Exercise price

Fair value at grant date

(Yen)

(Yen)

5

445,000

1 Jan 2006

30 Sep 2015

4,150

2,518

6

195,200

7 Nov 2006

30 Sep 2016

4,750

1,113

Weighted average exercise price of the outstanding options was 4,338 yen and 4,333 yen as at 31 March 2012 and 2013, respectively.
Weighted average remaining contractual life was 3.8 years and 2.8 years as at 31 March 2012 and 2013, respectively.
For the year ended 31 March 2012

For the year ended 31 March 2013

Weighted average
Number of shares

exercise price

Weighted average
Number of shares(Yen)

exercise price(Yen)

Outstanding at the beginning of the period

545,400

4,336

514,900

4,338

Forfeited (i)(30,500)

4,298(38,500)

4,407

－

－

－

－

Outstanding at the end of the period

514,900

4,338

476,400

4,333

Exercisable at the end of the period

514,900

4,338

476,400

4,333

Exercised

Note:(i) Stock options forfeited were due to employee retirements.
There were no stock options exercised for these plans during the years ended 31 March 2012 and 2013.

88

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

(Millions of Yen)

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

For the year ended

For the year ended

31 March 2012

31 March 2013

31 March 2013

Sales of goods and products

360,388372,220

285

274

2,912

360,673

372,494

3,960,593

Service revenue
Total sales

3,957,681(2) Other income from continuing operations
The following is an analysis of the Group’s other income from continuing operations:(Millions of Yen)

(Millions of Yen)

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

For the year ended

For the year ended

31 March 2012

31 March 2013

31 March 2013

Commission

531

Rent

138

65

689

Government grants

192

174

1,848

Gain on sale of plant, property and equipment

174

2,134

22,686

Insurance proceeds (i)351－

32,327343,7222,238

23,794

2,159

1,480

15,736

3,546

38,809412,637

Gains related to the step acquisition of shares of

391

4,161

subsidiary (ii)
OthersTotal other income
Note:(i) Of the proceeds from insurance of 32,327 million yen, 32,187 million yen (342,234 thousand U.S.dollars) is related to the damaged
fixed assets and business interruptions caused by the flood in Thailand in October 2011. The tentative receipt of 5,476 million yen
included in "Other current liabilities" in the Consolidated Statement of Financial Position as at 31 March 2012, is included in"Insurance proceeds" for the year ended 31 March 2013. The decrease in "Other current liabilities" is included in "Others" in Cashflows from operating activities in Consolidated Statement of Cash Flows for the year ended 31 March 2013.
(ii) Details of "Gains related to the step acquisition of shares of subsidiary" are set out in Note. 34 "Business combinations".
(3) Research and development expenses recognised as incurred(Millions of Yen)

(Millions of Yen)

(Thousands of U.S.Dollars

For the year ended

For the year ended

For the year ended

31 March 2012

31 March 2013

31 March 2013

(Note 2))

Employee benefits expenses

7,082

6,513

69,245

Depreciation and amortisation

1,370

1,680

17,862
18,077

Commission expenses

1,800

1,700

Other expenses

5,706

5,811

61,784

15,95915,703

166,967

Total research and development expenses
recognised as incurred
Note:

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

89

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

(Millions of Yen)

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

For the year ended

For the year ended

31 March 2012

31 March 2013

31 March 2013

Salary, bonuses and others

79,71985,094

904,772

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

701

1,608

17,094

Defined contribution (Note 19）

1,360

1,451

15,428Retirement benefit total

2,061

3,059

32,522

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

402

299

3,180

Severance payments (Note 19）

1,483

2,465

26,209Others

3,730

4,065

43,22587,39594,982

1,009,908

Total employee benefits expense(5) Foreign exchange gains or losses

Foreign exchange gains or losses include gains resulting from fluctuations in currency derivatives of 1,438 million yen and 2,530
million yen (26,901 thousand U.S.dollars) for the years ended 31 March 2012 and 2013, respectively. Foreign exchange gains orlosses, which was included in "Other expenses" of 20 million yen in the previous year, is presented as a separate line item because ofits materiality.
(6) Loss on disasterFor the year ended 31 March 2012, due to the massive flood in Thailand in October 2011, buildings, plant equipment and inventories
at a subsidiary were flooded. As a result, the subsidiary temporally stopped its operation. The loss comprises the aggregate loss ondamage of plant equipment in the amount of 4,013 million yen, loss on damage on inventories in the amount of 974 million yen andother related loss in the amount of 921 million yen.
(7) Other expenses
The following is an analysis of the Group’s other expenses from continuing operations:(Millions of Yen)

(Millions of Yen)

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

For the year ended

For the year ended

31 March 2012

31 March 2013

31 March 2013

Packaging/shipping/transportation

6,624

6,873

73,07952,023

Travel

4,989

4,893

Rent

4,906

5,235

55,665

Utilities

8,496

9,820

104,414

Repair and maintenance

7,744

8,235

87,557

947

160

1,704

1,109

649

6,896

Loss on sales of property, plant and equipment
Loss on disposals of property, plant andequipment
Loss on disposals of intangible assets
OthersTotal other expenses

90

26

86

916

46,36644,129469,210

81,20680,080851,463

27.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 2012

31 March 2013

31 March 2013

Finance income
Interest income
Cash and cash equivalents, loans and

1,513

906

9,631

Available-for-sale financial assets

69

59

632

Total finance income

1,582

965

10,263

receivables
Dividend income

Finance costs
Interest costs
1,695

1,511

16,071Other provisions

Interest-bearing debt

18

17

176

Other liabilities

35

11

113

Impairment losses
Available-for-sales financial assets (ii)

278

547

5,821

Total finance costs

2,027

2,086

22,180Note:(i) Loss resulting from the fair value measurement of currency derivatives is disclosed in the line item ‘Foreign exchange loss’ of Note
26 “Revenue and expenses (excluding finance income and costs), (5) Foreign exchange gains or losses.”(ii) Impairment losses were recognised on listed shares and the shares of private companies categorised as available-for-sale financial
assets due to significant or prolonged decline in the fair values against acquisition cost.

91

28.Discontinued operations
The Group classifies continuing and discontinued operations by SBU. Accordingly, when the Group disposes of a business thatcomprises a part of a SBU, the business remains classified as continuing operations.
On 1 July 2011, an agreement was reached and concluded between the Company and Ricoh Co., Ltd. to transfer the PENTAX
Imaging Systems Business to Ricoh and the transfer was executed on 1 October 2011. As a result, the business is classified as
discontinued operations for the year ended 31 March 2012.
① Reporting Segment
Information Technology② The following is an analysis of revenue, expenses, profit/loss and cash flows of discontinued operations:(Thousands of U.S.Dollars

Note(Millions of Yen)

(Millions of Yen)

(Note 2))For the year ended

For the year ended

For the year ended

31 March 2012

31 March 2013

31 March 2013

Profit/loss for the year fromdiscontinued operations
Revenue:
16,267

－

－

7

－

－

5,592

－

－

Total revenue

21,866－－

Change in merchandises, products,

(732)

－

－

6,277

－

－

Employee benefits expense

2,905

－

－

Depreciation and amortisation

333

－

－

Subcontracting cost

705

－

－

Advertising and promotion

892

－

－

Sales
Finance income
Other income(i)

Expense:work-in-process
Raw materials and consumables
used

expenseCommission expense

861

－

－

Finance costs

16

－

－

Other expenses

6,099

－

－

17,357

－

－

4,509

－

－

Total expense
Net gain from discontinued
operations before tax
Income tax
Net gain from discontinued

(ii)

1,619

－

－

2,890

－

－

operations (attributable to theshareholders of the Company)

92

Note:(i) ‘Other income’ includes the reversal of impairment losses in the amount of 1,854 million yen recognised in the year ended 31
March 2009, and the gain on business transfer to Ricoh Co., Ltd. on 1 October 2011 in the amount of 3,617 million yen for the year
ended 31 March 2012.
Details of net capital gain are as follows:(Thousands of U.S.Dollars(Millions of Yen)

(Millions of Yen)

(Note 2))For the year ended

For the year ended

For the year ended

31 March 2012

31 March 2013

31 March 201316,180－－Non-current assets(6,224)－－Current assets(16,896)

－

－

383

－

－

10,174

－

－

3,617

－

－

Consideration received
Assets and liabilities transferred

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

(Millions of Yen)

(Note 2))For the year ended

For the year ended

For the year ended

31 March 2012

31 March 2013

31 March 2013

Cash flows from discontinued operations
2,143

－

－

Cash flows from investing activities (i)11,929－－Cash flows from financing activities (ii)(22,565)－－(8,493)－－

Cash flows from operating activities

Total
Note:

(i) Cash flows from investing activities include the proceeds from business transfer.
(ii) Cash flows from financing activities include dividend payment to continuing operations and fund transfer
to continuing operations.

9329.Other comprehensive income
For the years ended 31 March 2012 and 2013, other comprehensive income comprises the following:(Thousands of U.S.Dollars(Millions of Yen)

(Millions of Yen)

(Note2))For the year ended

For the year ended

For the year ended

31 March 2012

31 March 2013

31 March 2013

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

(591)

93

984

Reclassification adjustments to profit or

272

501

5,328

(319)

594

6,312

(7,955)41,940445,933

973

105

1,113

(6,982)42,045447,046

(113)
－

41

434

130

1,384

loss for the year
Total
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
Total

(113)

171

1,818

Other comprehensive income/(loss) before(7,415)42,809455,176

128

(203)

(2,157)(7,286)42,606453,019

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

94

Taxation on each item of other comprehensive income for the years ended 31 March 2012 and 2013 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 2012

31 March 2013

31 March 2013

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) on

(319)

144

(175)

594

(210)

384

6,312

(2,234)

4,078(6,932)(16)(6,948)42,044

7

42,051

447,03976

447,116

(113)

－

(113)

171

－

171

1,818

－

1,818

(7,364)

128(7,236)42,809(203)

42,606455,170(2,157)453,012

(50)

－

(50)

1

－

1

6

－

6

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

(50)

－

(50)

1

－

1

6

－

6

Total other comprehensive(7,415)128(7,286)42,809(203)

42,606455,176(2,157)453,019

income95

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

(Yen)

(U.S.Dollars (Note 2))

For the year ended

For the year ended

For the year ended

31 March 2012

31 March 2013

31 March 2013

Basic earnings per share
From continuing operations

93.48

From discontinued operations

6.70

164.78－1.75－

100.18164.78

1.75

From continuing operations

93.46

From discontinued operations

6.70

164.75－1.75－

100.16164.75

1.75

Total basic earnings per share
Diluted earnings per share

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

(Millions of Yen)

(Thousands of U.S.Dollars (Note

For the year ended

For the year ended

For the year ended

31 March 2012

31 March 2013

31 March 2013

2))

Profit attributable to owners of the

40,32971,099755,975

2,890

－

－

43,21971,099755,975

Company from continuing operations
Profit attributable to owners of theCompany from discontinued operations
Profit used in the calculation of basic
earnings per share(b) Weighted average number of ordinary shares used in the calculation of basic earnings per share(Shares in thousands)
For the year ended 31 March 2012

For the year ended 31 March 2013

Weighted-average number of ordinary
shares431,42096

431,476

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 (Note2))

For the year ended

For the year ended

For the year ended

31 March 2012

31 March 2013

31 March 2013

Profit attributable to owners of the

40,32971,099755,975

2,890

－

－

43,21971,099755,975

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

Weighted-average number of ordinary shares

For the year ended

For the year ended

31 March 2012

31 March 2013

431,420

431,47685

83

431,505

431,559

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 share97

31.Non-cash transactions
Non-cash transactions for the years ended 31 March 2012 and 2013 consisted of acquiring property, plant and equipment through new
finance lease arrangements in the amount of 124 million yen and 14 million yen (147 thousand U.S.dollars), respectively.

98

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

Name of subsidiaries

Reportablesegment

services in the

Information

Electronics related(THAILAND) LTD.

Technology

products

HOYA GLASS DISKInformation

Electronics related

PHILIPPINES, INC.

Technology

products

HOYA GLASS DISKInformation

Electronics related

VIETNAM LTD.

Technology

products

HOYA GLASS DISKInformation

Electronics related

VIETNAM ⅡLTD.

Technology

products

HOYA MICROELECTRONICS Information

Electronics related

TAIWAN CO., LTD.

products

HOYA ELECTRONICS KOREA Information

Electronics relatedCO., LTD.

Technology

products

HOYA ELECTRONICS

Information

Electronics related

MALAYSIA SDN.BHD.

Technology

products

HOYA ELECTRONICS

Information

Electronics related

SINGAPORE PTE. LTD.

Technology

products

Information

Electronics related

Technology

products

HOYA CORPORATION USA
EAST CHEER INVESTMENT

Information

Electronics related

LIMITED

Technology

products

SHENZHEN KTM GLASSInformation

Electronics related

SUBSTRATE CO., LTD.

Technology

products

HOYA OPTICS (THAILAND)

Information

Imaging related

LTD.

Technology

products

HOYA OPTO-ELECTRONICS Information

Imaging related

QINGDAO LTD.

Technology

products

Information

Imaging related

Technology

products

HOYA OPTICALTECHNOLOGY (SUZHOU)LTD.

HOYA OPTICAL (ASIA) CO., Information

Imaging related

LTD.

Technology

products

Information

Imaging related

Technology

products

HOYA OPTICALTECHNOLOGY (WEIHAI) CO.,LTD.

PENTAX CEBU PHILIPPINES Information

Imaging related

CORPORATION

Technology

products

Information

Imaging related

Technology

products

HOYA PHOTONICS, INC.

Proportion ofshares held

shares held

As at 31 March

As at 31 March

2012

2013

THAILAND

100.0%

100.0%PHILIPPINES

100.0%

100.0%VIETNAM

100.0%

100.0%VIETNAM

100.0%

100.0%TAIWAN

100.0%

100.0%

SOUTH KOREA

100.0%

100.0%

MALAYSIA

100.0%

100.0%

SINGAPORE

100.0%

100.0%U.S.A.

100.0%

100.0%

CHINA

100.0%

100.0%

CHINA

51.0%

51.0%

THAILAND

100.0%

100.0%

CHINA

100.0%

100.0%

CHINA

100.0%

100.0%

CHINA

100.0%

100.0%

CHINA

100.0%

100.0%PHILIPPINES

100.0%

100.0%U.S.A.

100.0%

100.0%

Location

reportable segment

HOYA GLASS DISKTechnology

Proportion ofMajor products/

99Name of subsidiaries

Reportablesegment

HOYA LENSMANUFACTURING

Life Care

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

HOYA LENS VIETNAM LTD. Life Care
HOYA LENSDEUTSCHLAND GMBH

Life Care

HOYA LENS U.K. LTD.

Life Care

HOYA LENS ITALIA S.P.A.

Life Care

HOYA LENS IBERIA S.A.

Life Care

HOYA LENS FRANCE S.A.S.

Life Care

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

Life Care
Life Care andCorporate

PENTAX CANADA, INC.

Life CarePENTAX EUROPE GMBH

Life CarePENTAX ITALIA S.R.L

Life CarePENTAX U.K. LTD.

Life Care

MICROLINE SURGICAL, INC. Life Care
HOYA HOLDINGS ASIA

Proportion ofMajor products/
services in theshares held

shares held

As at 31 March

As at 31 March

2012

2013

MALAYSIA

100.0%

100.0%THAILAND

100.0%

100.0%

CHINA

95.0%

95.0%

AUSTRALIA

100.0%

100.0%

INDIA

100.0%

100.0%VIETNAM

100.0%

100.0%GERMANY

100.0%

100.0%

100.0%

100.0%

ITALY

100.0%

100.0%

SPAIN

100.0%

100.0%FRANCE

100.0%

100.0%U.S.A.

100.0%

100.0%NETHERLANDS

100.0%

100.0%CANADA

100.0%

100.0%GERMANY

100.0%

100.0%

ITALY

60.0%

60.0%

100.0%

100.0%U.S.A.

100.0%

100.0%

Location

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

UNITEDproducts

KINGDOM

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

Proportion of

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

UNITEDproducts

KINGDOM

Medical related
products

Corporate

Asia headquarters

SINGAPORE

100.0%

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

Holding company

NETHERLANDS

100.0%

100.0%HOYA HOLDINGS, INC.

U.S. headquarters

U.S.A.

100.0%

100.0%PACIFIC PTE. LTD.

Corporate100

33.Related party disclosures
Transactions between the Company and its subsidiaries which are related parties of the Company, have been eliminated inconsolidation and are not disclosed in this note. Details of the balances and transactions between the Company and other relatedparties are disclosed as follows:(1) Transactions with related parties, and receivables and payables balances
The Group had the transactions with related parties as follows:
As at/ for the year ended 31 March 2012:
Advance payment of 3,000 million yen for AvanStrate Inc. was refunded in the year ended 31 March 2012.
There are no outstanding balances and no collateral or guarantees balances as at 31 March 2012.
As at/ for the year ended 31 March 2013:
Name of affiliates

Nature of related party

Transaction amounttransactions(Millions of Yen)

Outstanding balance(Thousands of(Millions of Yen)

U.S.Dollars (Note 2))

Affiliates

AvanStrate Inc.

Purchase of material

27

－

287

(2) Remuneration of key management personnel
The remuneration of directors and other members of key management personnel during the year is as follows:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S.Dollars

For the year ended

For the year ended

For the year ended(Note 2))31 March 2012

31 March 2013

31 March 2013

Short-term benefits

302

345

3,671

Share-based payments

56

22

236

Total remuneration of key management

358

367

3,907

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

101

34.Business combinations
The Group acquired some companies and businesses through business combination during the year ended 31 March 2013 as follows:(1) Overview of acquired companies(businesses)
Total

Name of acquirees Primary businessconsideration

Percentage of

Total

Reportable

Acquisition

voting equity

considerationtransferred

Acquisition

segments

dateinterests

transferred(Thousands ofmethodacquired(Million Yen)

U.S.Dollars(Note 2))

OPTOTAL

Manufacturing

HOYA

and sales of

LIMITADA.

ophthalmic（Note）

lensesLife Care(Health Care

2 Apr 2012

75％

8,073

85,840(Medical related 30 May 2012

100％

2,000

21,265－4,800

51,036

Acquisition ofsharesrelated products)

Manufacturing
Life Care

Japan Universal

and sales ofTechnologies,

MetallicInc.

implant for

Seiko Epson

Development

Corporation

andLife Care

Eyeglass lensmanufacturing(Health Caredevelopment andof ophthalmic

related products)

manufacturinglensesAcquisition ofsharesproducts)

orthopedics

1 Feb 2013

Acquisition ofbusiness

Note:
OPTOTAL HOYA S.A. changed its company form after the acquisition.
(2) Primary reasons for business combinations① OPTOTAL HOYA LIMITADA.
OPTOTAL HOYA LIMITADA. (OPTOTAL) operates the largest prescription lens (Rx) laboratory and has one of the largest
wholesale distribution networks in Brazil. HOYA’s cooperation with OPTOTAL started in 1992 with a distributorship agreement
and established Rx manufacturing joint-venture in 2007 (Voting equity interests of the Group: 25%). Since then, OPTOTAL has
become a significant market player in Brazil with a leading position in the market segment of premium progressive lenses. With theacquisition of OPTOTAL, HOYA will have a strong footprint in South America and will aggressively pursue expansion
opportunities in the fast-growing Brazilian market.
② Japan Universal Technologies, Inc.
The Group is leading in the ceramic artificial bone market in Japan, however, the market is quite small among the orthopedics
implants market in Japan. The Group will seek to enhance its business base by adding products and services of Japan Universal
Technologies, a manufacturer and distributor of implants for the internal fixation of humeral fractures.
③ Seiko Epson Corporation Eyeglass lens development and manufacturing (EPSON eyeglass)
The Group will seek to enlarge its range of products as well as services with the accumulated and unique expertise and knowledge
on the development, manufacturing and sales of the eyeglasses and related products obtained from the EPSON eyeglass business.

102

(3) Consideration for the acquisitions(Millions of Yen)
OPTOTAL

Japan Universal

EPSON eyeglass

Total

Technologies, Inc.
Cash and cash equivalents
Non-current liabilities other than Deferred

8,073
－

2,000
－

3,150

13,223

1,009

1,009

－

－

(291)

(291)

tax liabilities (i)Trade and other receivables (ii)

－

－

932

932

8,073

2,000

4,800

14,873

Japan Universal

EPSON eyeglass

Trade and other payables (ii)
Total

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

Total

Technologies, Inc.
Cash and cash equivalents
Non-current liabilities other than Deferred

85,840－21,265－33,495

140,600

10,724

10,724tax liabilities (i)Trade and other receivables (ii)－－

(3,098)(3,098)Trade and other payables (ii)

－

－

9,914

9,914

85,84021,26551,036

158,141

Total
Note:

(i) The amount represents a part of the consideration which will be paid when the royalties for the four years after the closing date will
be determined.
(ii) The amounts represent unsettled amounts as at 31 March 2013, which are the adjustments of the fluctuations of net assets until theclosing date and the amounts that should be paid immediately after the conditions in the agreement are met.
(4) Expenses related to acquisition
Expenses related to acquisition in the amount of 240 million yen (2,554 thousand U.S.dollars) are included in "Commission
expense" in the Consolidated Statement of Comprehensive Income.

103

(5) The amount of assets acquired and liabilities assumed at the acquisition dates are as follows:(Millions of Yen)
OPTOTAL

Japan Universal

EPSON eyeglass

Total

Technologies, Inc.
Intangible assets (i)

6,100

854

1,077

8,031

Non-current assets other than intangible

1,717

280

2,828

4,825

accounts)

1,214

488

－

1,702

Allowance for doubtful accounts

(34)

(4)

－

(38)

Cash and cash equivalents

41

644

－

685

815

248

1,284

2,348

9,852

2,510

5,190

17,552

assetsTrade and other receivables(Before deducting allowance for doubtful

Current assets other than above
Total assets(2,067)(287)－(2,354)

(239)

(501)

(290)

(1,030)(2,432)

(455)

(100)

(2,987)

Total liabilities(4,737)(1,243)(390)(6,370)Fair value of identifiable acquired net assets

5,115

1,267

4,800

11,182

Deferred tax liabilities (ii)
Non-current liabilities other than deferred tax
liabilities
Current liabilities(Thousands of U.S.Dollars (Note 2))
OPTOTAL

Japan Universal

EPSON eyeglass

Total

Technologies, Inc.
Intangible assets (i)64,8599,084

11,45285,395

Non-current assets other than intangible

18,256

2,975

30,07351,30418,097

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

12,906

5,191－

Allowance for doubtful accounts

(364)

(44)

－

(408)

Cash and cash equivalents

433

6,847

7,281

8,667

2,638

－
13,655Current assets other than above
Total assets

24,960104,757

26,692

55,180186,629

Deferred tax liabilities (ii)(21,974)(3,051)(25,025)

Non-current liabilities other than deferred tax(2,543)(5,324)－(3,083)(10,950)(25,854)(4,843)(1,062)(31,759)

Total liabilities(50,371)(13,218)(4,144)(67,733)

Fair value of identifiable acquired net assets

54,385

13,47451,036

118,895

liabilities
Current liabilities

Note:(i) Intangible assets mainly consist of "Customer related assets" and "Intellectual properties".
(ii) Deferred tax liabilities are mainly recognised on temporary differences arising in recognition of identifiable intangible assets.

104

(6) Goodwill arising from the acquisitions(Millions of Yen)
OPTOTAL

Japan Universal

EPSON eyeglass

Total

Technologies, Inc.
Consideration for acquisition

8,073

2,000
－

4,800
－

14,873

2,691(5,115)(1,267)(4,800)(11,182)

5,649

733

－

6,382

Japan Universal

EPSON eyeglass

Add: Fair value of current equity interests

2,691(Note)
Deduct: Fair value of identifiable acquired
net assets
Goodwill arising in acquisition(Thousands of U.S.Dollars (Note 2))
OPTOTAL

Total

Technologies, Inc.
Consideration for acquisition
Add: Fair value of current equity interests

85,84021,26551,036

158,141

28,613－－

28,613(54,385)(13,474)(51,036)(118,895)

7,791

－

67,859(Note)
Deduct: Fair value of identifiable acquired
net assets
Goodwill arising in acquisition

60,068Note:
Remeasurement of fair value in the step acquisition
The previously held 25% of equity interests in OPTOTAL accounted for under the equity method in the amount of 323 million yen,were remeasured at fair value. The method of remeasurement was the same as that of the measurement of the newly acquired 75%
shares on 2 April 2012.
The difference in the amount of 2,238 million yen (23,794 thousand U.S.dollars) between the fair value of the shares of 2,691 million
yen (28,613 thousand U.S.dollars), and the book value under the equity method is included in "Other income" in theConsolidated Statement of Comprehensive Income and "Others" in the Consolidated Statement of Cash Flows.
Goodwill recognised consists of "Control premium", "Expected synergy", and "Human resources".
Goodwill arising from these acquisitions is not tax-deductible.

105

(7) Net cash outflows for the acquisitions of subsidiaries(Millions of Yen)
OPTOTAL

Japan Universal

EPSON eyeglass

Total

Technologies, Inc.
Consideration for the acquisitions paid in

8,073

2,000

3,150

13,223by subsidiaries acquired

(41)

－

(685)

Add: Dividend payable assumed to current

739

(644)
－

－

739

8,771

1,356

3,150

13,277

cash
Deduct: Cash and cash equivalents owned

shareholders
Net cash outflows for the acquisitions ofsubsidiaries(Thousands of U.S.Dollars (Note 2))
OPTOTAL

Japan Universal

EPSON eyeglass

Total

Technologies, Inc.
Consideration for the acquisitions paid in

85,84021,26533,495

140,600

by subsidiaries acquired

(433)

－

(7,281)

Add: Dividend payable assumed

7,853(6,847)
－

－

7,853

93,26014,41833,495

141,173

cash
Deduct: Cash and cash equivalents owned

Net cash outflows for the acquisitions ofsubsidiaries(8) Impact on the Group's financial results of the Business combinations
As the effect on sales and profit before tax of all the acquisitions in the year ended 31 March 2013 are relatively small, pro
forma information according to IFRS 3 is omitted. Sales and profit for the year included in the Consolidated Statement ofComprehensive Income are 8,203 million yen (87,215 thousand U.S.dollars) and 75 million yen (800 thousand U.S.dollars),
respectively.

106

35.Sale of subsidiary
PENTAX Imaging and other nine subsidiaries, which operated PENTAX Imaging system business, were sold to Ricoh Company,
Ltd. in the year ended 31 March 2012.
(Millions of Yen)
For the year ended 31 March 2012
Consideration received

16,180Cash and cash equivalents

15,575Trade and other receivables

605

Assets and liabilities transferred
Non-current assets(6,224)Current assets(16,896)383

Non-current liabilities
Current liabilities

10,174

Net capital gain

3,617

Net cash and cash equivalents received
Consideration transferred

15,575

Cash and cash equivalents balances(3,038)possessed by the company transferred
Net cash and cash equivalents received

12,537

No subsidiary was sold in the year ended 31 March 2013.

36.Contingent liabilities
Guarantee liabilities
The Group provides guarantees to financial institutions on borrowings of business partners as follows:(Millions of Yen)

(Millions of Yen)

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

As at 31 March 2013

As at 31 March 2013

982

527

5,603

The Group’s employees

0

－

－

Total

982

527

5,603

107

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

(Millions of Yen)

(Thousands of U.S.Dollars(Note 2))As at 31 March 2012
Commitments for the acquisition of

21,165As at 31 March 2013

As at 31 March 2013

4,915

52,261property, plant and equipment andintangible assets

38.Subsequent events
Resolution on cash dividends
On 30 May 2013, a resolution was made by the Company's Board of Directors for the payment of a cash dividend to shareholders ofrecord on 31 March 2013 of 15,102 million yen (160,578 thousand U.S.dollars) (35 yen per common share).
Alliance in marketing and distribution to promote eyewear including transferring the partial ownership
On 16 November 2012, the Company entered into an agreement with Seiko Holdings Corporation ("SEIKO") to acquire 50% of theshares of Seiko Optical Products Co., Ltd. ("SOP"), a wholly owned subsidiary of SEIKO and is responsible for the sales of theeyeglass-related products. 30% of the shares were to be acquired on 1 February 2013 and 20% of the shares on 31 March 2014. The
purpose of this investment was to form a strategic alliance in marketing and distribution to globally promote eyewear and related
products.
The 30% acquisition was originally scheduled on 1 February 2013, however, it was delayed due to the review by the antitrust
authority of People's Republic of China taking longer than we anticipated.
The aforementioned review was completed and the Company and SEIKO executed the contemplated share transfer of SOP on 1 June
2013.

39.Approval of financial statements
The consolidated financial statements for the year ended 31 March 2013 were approved by the Company’s Board of Directors andauthorised for issue on 30 May 2013.

108