HOYA Corporation and its Subsidiaries
Consolidated Financial Statements under IFRSs
and Independent Auditor’s Report
For the year ended 31 March 2021

HOYA Corporation

Contents

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

3

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

7

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

9

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

11

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

16

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

18

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

18

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

18

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

19

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

29

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

30

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

34

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

38

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

40

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

43

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

46

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

47

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

52

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

54

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

55

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

55

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

56

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

58

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

62

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

62

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

63

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

66

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

80

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

83

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

85

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

87

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

88

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

90

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

91

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

92

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

99

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

101

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

101

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

101

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

101

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

101

- 2 -

Consolidated Statement of Financial Position
HOYA Corporation and its Subsidiaries
As at 31 March 2021

(Thousands of U.S.

(Millions of Yen)

(Millions of Yen)

Notes

As at 31 March 2020

As at 31 March 2021

As at 31 March 2021

6, 9, 33

152,302

164,957

1,489,989

Dollars (Note 2))

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

8, 9

42,08235,688322,358

Intangible assets

8, 9, 33

39,796

37,110335,198

Investments in associates
Long-term financial assets

10
7, 12, 21

1,007
45,975661
52,005

5,970
469,743

Other non-current assets
Deferred tax assets

13
11

685
7,990

797
7,488

7,198
67,633289,836

298,705

2,698,089

Total non-current assets
CURRENT ASSETS:
Inventories

14

78,13077,367

698,824

7, 15, 21
12, 21

103,3391,303

117,251
3,897

1,059,079
35,196

Income taxes receivable
Other current assets

13

510
19,907

1,218
19,956

10,998180,255

Cash and cash equivalents

21

Trade and other receivables
Other short-term financial assets

317,982

334,897

3,024,991

Total current assets

521,171554,584

5,009,341

Total assets

811,008

853,290

7,707,430- 7 -(Thousands of U.S.

(Millions of Yen)

(Millions of Yen)

Notes

As at 31 March 2020

As at 31 March 2021

As at 31 March 2021

EQUITY
Share capital

20(1)

6,264

6,264

56,582

Capital reserves
Treasury shares

20(1)
20(2)

15,899(27,963)

15,899(43,560)

143,606(393,462)

20(2)20(3), 34(8,428)676,058(10,354)710,274(93,520)
6,415,628(16,788)

9,477

85,603645,042(15,777)

688,000(15,589)6,214,436(140,805)

629,265

672,412

6,073,631

7, 16, 21
12, 21

14,472
23,923

13,234
21,874

119,536
197,579

Retirement benefit liabilities
Provisions

17
18

3,203
2,539

3,248
2,587

29,342
23,369Other non-current liabilities
Deferred tax liabilities

13
11

1,363
3,851

1,455
6,870

13,14062,05149,35049,268445,016

Dollars (Note 2))

EQUITY AND LIABILITIESOther capital reserves
Retained earnings
Accumulated other comprehensive income/(loss)
Equity attributable to owners of the Company
Non-controlling interests

20(4), 29

Total equity
LIABILITIESNON-CURRENT LIABILITIES:Interest-bearing long-term debt
Other long-term financial liabilities

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

7, 16, 21

7,494

7,515

67,882

Trade and other payables
Other short-term financial liabilities

19, 21
12, 21

62,8952,824

57,354
2,598

518,052
23,466

Income tax payables
Provisions

18

17,765
1,234

17,041
1,161

153,923
10,482Other current liabilities

13

40,18145,942414,978

Total current liabilities

132,393

131,610

1,188,783

Total liabilities

181,743

180,878

1,633,799

Total equity and liabilities

811,008

853,290

7,707,430- 8 -Consolidated Statement of Comprehensive Income
HOYA Corporation and its Subsidiaries
For the year ended 31 March 2021
(Thousands of(Millions of Yen) (Millions of Yen) U.S. Dollars (Note
2))
Notes

For the year ended For the year ended For the year ended
31 March 2020

31 March 2021

31 March 2021

23

576,546547,921

4,949,152

7, 25
21, 24

3,461
2,463

2,204
8,139

19,90673,520582,470

558,264

5,042,578

1,003
93,381

3,898
79,39035,205717,103

133,734
34,374

120,004
36,336

1,083,952
328,211

4,657
12,214

4,082
9,999

36,86990,32124
933,723300

30,475
8,166

275,270
73,760Finance costs
Share of loss of associates

7, 17, 25
10

791
1,652

2,010
369

18,1593,330

Foreign exchange (gain)/loss, net
Other expenses

24
6, 7, 8, 24

1,606
117,768(330)
104,646(2,982)945,229435,202

399,046

3,604,427

147,268

159,218

1,438,151

32,681

33,997

307,083

Profit for the year from continuing operations

114,587

125,221

1,131,068

Profit for the year

114,587

125,221

1,131,068

933

8,363

75,536

Continuing operations
Revenue:
Sales
Finance income
Other income
Total revenue
Expenses:
Changes in goods, products and work in progress
Raw materials and consumables used
Employee benefits expense
Depreciation and amortisation

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

Subcontracting cost
Advertising and promotion expense
Commissions expense
Impairment losses

Total expenses
Profit before tax
Income tax expense

11

Other comprehensive income/(loss):

26

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

Remeasurements of the net defined benefit asset and liability, net

17

(50)

280

2,531

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

11

(212)

(2,562)(23,144)

670

6,081

54,923

Subtotal
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations
Share of other comprehensive income/(loss) of associates

10(16,806)
76

21,093(144)

190,526(1,301)

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

11

(203)

(78)

(701)

Subtotal(16,932)

20,871

188,524

Total other comprehensive income/(loss)(16,262)

26,952

243,447

Total comprehensive income/(loss) for the year

98,325

152,173

1,374,515- 9 -Notes(Thousands of U.S.

(Millions of Yen)

(Millions of Yen)

For the year ended

For the year ended

For the year ended

31 March 2020

31 March 2021

31 March 2021

Dollars (Note 2))

Profit attributable to:
Owners of the Company

114,406

125,446

1,133,102

Non-controlling interests

181

(225)

(2,034)

114,587

125,221

1,131,068

Owners of the Company

98,364

151,984

1,372,814

Non-controlling interests

(39)

188

1,701

98,325

152,173

1,374,515

Total
Total comprehensive income/(loss) attributable to:

Total

Notes

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

(Yen)

(Yen)

For the year ended

For the year ended

For the year ended

31 March 2020

31 March 2021

31 March 20212))

27303.27

Discontinued operations
Basic earnings per share
Diluted earnings per share

335.77

3.03

－

－

－

303.27335.77

3.03

302.74335.25

3.03

27

Continuing operations
Discontinued operations
Diluted earnings per share- 10 -－－－

302.74335.25

3.03

Consolidated Statement of Changes in Equity
HOYA Corporation and its Subsidiaries
For the year ended 31 March 2021
(Millions of Yen)
Notes
Balance at 1 April 2019

Share capital

Capital reserves

Treasury shares

6,264

15,899(8,319)Other capitalreserves(7,434)Retained earnings
617,459
533

Cumulative effect of accounting change
6,264

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

617,992

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

114,406
26
114,406

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

Disposal of treasury shares

20(2)

2,309

(1,032)

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

20(3)Change in non-controlling interests

20(4)

(65)

Share-based payments (stock options)

22

125

(22,308)(34,064)

32

Transfer to retained earnings
Total contributions by and distributions toowners－－Total transactions with owners－－

Balance at 31 March 2020

6,264

15,899(19,644)(994)(56,340)(19,644)(994)(56,340)(27,963)(8,428)676,058

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

125,44626
125,446

Total comprehensive income/(loss) for the year
Transactions with owners
Contributions by and distributions to owners
Acquisition of treasury shares20(2)(76,671)(4)

Disposal of treasury shares
Cancellation of treasury shares

20(2)

3,312

(2,007)20(2)57,762

Dividends, 90 yen per share

20(3)Share-based payments (stock options)22(57,762)(33,741)86
274

Transfer to retained earnings
Total contributions by and distributions toowners－－(15,597)(1,926)(91,230)

Total transactions with owners－－(15,597)(1,926)(91,230)

Balance at 31 March 2021

6,264

15,899(43,560)(10,354)710,274- 11 -

(Millions of Yen)

Financial assets

Notes

Remeasurements of
Exchange differences

measured at fair value
on translation ofthrough otherAccumulated othercomprehensive

comprehensive

income of associates

income/(loss)

benefit liability
foreign operations

comprehensive income

Balance at 1 April 2019

Share of otherthe net defined(asset)

1,070

201

－

(1,985)

(713)

1,070

201

－

(1,985)

(713)

715

(16,805)(29)

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

76(16,042)

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

26

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

20(2)Cancellation of treasury shares

20(2)Dividends, 90 yen per share

20(3)Change in non-controlling interests

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

22
(61)

Transfer to retained earnings

29

(32)

Total contributions by and distributions toowners

(61)

－

29

－

(32)

Total transactions with owners

(61)

－

29

－

(32)

Balance at 31 March 2020

1,724

(16,604)－(1,909)(16,788)

5,813

20,606264

144

26,5395,813

20,606264

144

26,539Total comprehensive income/(loss) for the year
Profit for the year
Other comprehensive income/(loss)

26

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

20(2)Cancellation of treasury shares

20(2)Dividends, 90 yen per share

20(3)Share-based payments (stock options)

22

Transfer to retained earnings

(10)

(264)

(274)

Total contributions by and distributions toowners

(10)

－

(264)

－

(274)

Total transactions with owners

(10)

－

(264)

－

(274)

Balance at 31 March 2021

7,527

4,002

－

(2,053)9,477- 12 -

(Millions of Yen)
EquityNotes

Non-controlling
attributable to owners

Total equity
interestsof the Company

623,155

Balance at 1 April 2019

4,552

533

Cumulative effect of accounting change
Restated balance at April 1, 2019627,707533

623,688

4,552

628,240

114,406

181

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

98,364(39)

98,325

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

26

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

Disposal of treasury shares

20(2)

1,277

1,277

Cancellation of treasury stock

20(2)

－

－

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

Change in non-controlling interests

20(4)

(65)

(20,289)(20,354)

Share-based payments (stock options)

22

125

125

－

－

Transfer to retained earnings
Total contributions by and distributions toowners(77,011)(20,289)(97,300)

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

Balance at 31 March 2020

645,042(15,777)

629,265

125,446(225)

125,221

26,539413

26,952

151,984

188

152,173

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

26

Total comprehensive income/(loss) for the year
Transactions with owners
Contributions by and distributions to owners
Acquisition of treasury shares20(2)(76,675)(76,675)

Disposal of treasury shares

20(2)

1,304

1,304

Cancellation of treasury stock

20(2)

－

－

Dividends, 90 yen per share20(3)(33,741)

Share-based payments (stock options)

22

86

86

－

－

Transfer to retained earnings－(33,741)

Total contributions by and distributions toowners(109,026)－(109,026)

Total transactions with owners(109,026)－(109,026)

Balance at 31 March 2021

688,000(15,589)

672,412- 13 -

Consolidated Statement of Changes in Equity
HOYA Corporation and its Subsidiaries
For the year ended 31 March 2021-Continued(Thousands of U.S. Dollars (Note 2))
Notes
Balance at 31 March 2020

Share capital

Capital reserves

Treasury shares

56,582

143,606(252,582)

Other capitalreserves(76,127)

Retained earnings
6,106,567

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

1,133,102
26
1,133,102

Total comprehensive income/(loss) for the year
Transactions with owners
Contributions by and distributions to owners
Acquisition of treasury shares20(2)(692,535)(40)

Disposal of treasury shares
Cancellation of treasury shares20(2)29,912(18,132)20(2)521,743

Dividends, 90 yen per share

20(3)Share-based payments (stock options)22(521,743)(304,770)
778
2,472

Transfer to retained earnings
Total contributions by and distributions toowners－－(140,880)(17,394)(824,041)

Total transactions with owners－－(140,880)(17,394)(824,041)

56,582

143,606(393,462)(93,520)

6,415,628

Balance at 31 March 2021

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

Financial assets

Notes

Remeasurements of
Exchange differences

measured at fair value
on translation ofthrough otherAccumulated othercomprehensive

comprehensive

income of associates

income/(loss)

benefit liability
foreign operations

comprehensive income

Balance at 31 March 2020

Share of otherthe net defined(asset)15,575(149,973)－(17,240)(151,638)

52,506

186,126

2,382(1,301)

239,71252,506

186,126

2,382(1,301)

239,712

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

26

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

20(2)Cancellation of treasury shares

20(2)Dividends, 90 yen per share

20(3)Share-based payments (stock options)

22

Transfer to retained earnings(90)(2,382)(2,472)

Total contributions by and distributions toowners(90)－(2,382)－(2,472)

Total transactions with owners

(90)

－

(2,382)－(2,472)

Balance at 31 March 2021

67,991

36,152－(18,541)

85,603- 14 -

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

Non-controlling
attributable to owners

Total equity
interestsof the Company

Balance at 31 March 2020

5,826,409(142,506)

5,683,903

1,133,102(2,034)

1,131,068

239,712

3,735

243,447

1,372,814

1,701

1,374,515

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

26

Total comprehensive income/(loss) for the year
Transactions with owners
Contributions by and distributions to owners
Acquisition of treasury shares20(2)(692,575)(692,575)

Disposal of treasury shares20(2)11,78011,780Cancellation of treasury shares

20(2)

－

－

Dividends, 90 yen per share20(3)(304,770)

Share-based payments (stock options)

22

778

778

－

－

Transfer to retained earnings－(304,770)

Total contributions by and distributions toowners(984,787)－(984,787)

Total transactions with owners(984,787)－(984,787)

Balance at 31 March 2021

6,214,436(140,805)

6,073,631- 15 -

Consolidated Statement of Cash Flows
HOYA Corporation and its Subsidiaries
For the year ended 31 March 2021
(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 2020

31 March 2021

31 March 2021

Profit before tax
Depreciation and amortisation

147,268
34,374

159,218
36,336

1,438,151
328,211

Impairment losses
Finance income

300(3,461)

8,166(2,204)73,760(19,906)

Finance costs
Share of (profits)/losses of associates

791
1,652

2,010
369

18,1593,330(Gain)/loss on sales of property, plant and equipment
Loss on disposal of property, plant and equipment

(258)
375

(1,266)
147(11,435)
1,331

Foreign exchange (gain)/loss
Others(567)(4,265)(357)(4,957)(3,227)(44,770)

Cash generated from operations (before movements in working capital)

176,209

197,463

1,783,603

Notes

Cash flows from operating activities

Movements in working capital
Decrease/(increase) in inventories(2,300)4,017

36,283

Decrease/(increase) in trade and other receivables
Increase/(decrease) in trade and other payables

4,186
5,152

(9,788)(6,352)(88,412)(57,379)

433

(69)

(623)

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

183,680

185,270

1,673,471

Interest received

3,201

1,286

11,618Dividends received
Interest paid

14
(511)

8
(580)

73
(5,239)

Income taxes paid
Income taxes refunded(23,169)
152(34,875)703(315,015)
6,352

Net cash generated from operating activities
Cash flows from investing activities

163,366

151,812

1,371,261

Withdrawals of time deposits

2,804

560

5,058

Payments for time deposits
Proceeds from sales of property, plant and equipment(2,367)
472

(12)
2,077

(106)
18,765

Payments for acquisition of property, plant and equipment
Proceeds from sales of investment(45,177)
1,948(31,246)665(282,230)
6,009

Payments for acquisition of investment
Payments for acquisition of subsidiaries(1,562)
(969)

(163)
(335)

(1,470)(3,025)

(542)
226

(800)
2,300

(7,226)
20,771

Payments for business transfer
Other proceeds
Other payments(2,217)(2,837)(25,625)

Net cash used in investing activities(47,384)(29,790)(269,081)- 16 -

Consolidated Statement of Cash Flows
HOYA Corporation and its Subsidiaries
For the year ended 31 March 2021-Continued(Millions of Yen)

(Millions of Yen)

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

Notes

Cash flows from financing activities
Dividends paid to owners of the Company

For the year ended

For the year ended

For the year ended

31 March 2020

31 March 2021

31 March 2021

(304,582)(34,042)(33,720)

Net decrease in short-term borrowings

16

(775)

(27)

(245)

Proceeds from long-term borrowings

16

－

738

6,663

Repayments of long-term borrowings

16

(134)

(20)

(180)

Repayments of lease liabilities

16

Payments for purchase of treasury shares20(2)(7,547)(44,283)(7,273)(76,675)(65,690)(692,575)

1,277
187

1,304
－

11,780
－

(149)

－

－

Net cash used in financing activities(85,468)(115,673)(1,044,829)

Net increase/(decrease) in cash and cash equivalents

30,514

6,349

57,351

Cash and cash equivalents at the beginning of the year

293,397

317,982

2,872,203

Effects of exchange rate changes on the balance of cash and cash
equivalents in foreign currencies(5,930)10,56695,437

Cash and cash equivalents at the end of the year

317,982

334,897

3,024,991

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

20(4)
20(4)

Note:
Non-cash transactions are stated in Note 28 “Non-cash transactions”.
There are no short-term investments within three months as at 31 March 2021.

- 17 -

Notes to the Consolidated Financial Statements
HOYA Corporation and its Subsidiaries
For the year ended 31 March 2021

1. General information
HOYA Corporation (the “Company”) is a limited company incorporated in Japan. The addresses of its registered office and principal
place of business are disclosed on the Company’s website (URL https://www.hoya.co.jp/english). The principal activities of theCompany, 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 ¥110.71 to $1, the foreign exchange rate at 31 March 2021. Such translations should not be construed as
representations that the Japanese yen amounts could be converted into U.S. dollars at that or any other rate. Amounts of less than one
million yen and one thousand U.S. dollars have been rounded to the nearest million yen and one thousand U.S. dollars in thepresentation of the accompanying consolidated financial statements. As a result, the totals in yen and U.S. dollars do not necessarily
agree with the sum of the individual amounts.
The Company and its domestic subsidiaries maintain their books and prepare their financial statements in accordance with accounting
principles generally accepted in Japan (“Japanese GAAP”) while its foreign subsidiaries maintain their books and prepare theirfinancial statements in conformity with accounting principles generally accepted in the countries of their domicile. Certain
adjustments and reclassifications have been incorporated in the accompanying consolidated financial statements to conform to IFRSs.
These adjustments were not recorded in their statutory books and ledgers.
(2) Effects of applying new accounting standards
The Group adopted the following IFRS for the year ended 31 March 2021:
IFRSs
IFRS 16(Revised)

Subject of new standards/amendments
The amendment that permits lessees, as a practical expedient, not to assess
whether particular rent abatements and deferral of payments meeting certain
criteria are lease modifications.

Leases

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

IFRSs

Mandatory
adoption（fromthe yearbeginning)

IFRS 10(Revised)

Consolidated Financial
Statements

IAS 28(Revised)

Investments in Associates
and Joint Ventures

Not determined

To be adopted
by the Group
from the year

Subject of new standards/amendments

endingNot determined

Amendments to the accounting treatment for sale orcontribution of assets between an investor and its
associate or joint venture- 18 -

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

(2) Basis of consolidation① Subsidiaries
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company as
at 31 March of each year. An investor controls an investee when it is exposed or has rights to variable returns from its involvementwith the investee and has the ability to affect those returns through its power over the investee. The Group reassesses whether it
controls an investee if facts and circumstances indicate that there are changes to elements of control.
The operating results of the subsidiaries are included in the consolidated statement of comprehensive income from the effective datethe Group obtained control of the subsidiaries to the effective date the Group lost control, as appropriate. Where necessary,adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by othermembers of the Group. All intragroup transactions, balances, income and expenses are eliminated in full in preparing the consolidated
financial statements.
Changes in an interest of a subsidiary without losing control are accounted for as equity transactions. The carrying amounts of thecontrolling and non-controlling interests are adjusted to reflect the changes in their respective percentage of interests in the subsidiary.
If there is a difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration
paid or received, the difference is recognised directly in equity and attributed to the owners of the parent.
If loss in control of a subsidiary occurs, the Group recognises in profit or loss any resulting difference of the following:
1. sum of the fair value of any consideration received and any investment retained in the former subsidiary at its fair value; and2. previous carrying amounts of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests.
Non-controlling interests in subsidiaries are identified separately from the Group’s equity therein. Non-controlling interests consist of
those interests at the date of the original business combination and the non-controlling share of changes in equity since the date of the
combination. Total comprehensive income is attributed to the owners of the Company and to the non-controlling interests even if thisresults in the non-controlling interests having a deficit balance.
② Investments in associates
An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an interest in a joint
venture. The results of and the investments in associates are incorporated in the consolidated financial statements using the equity
method of accounting, except when the investment is classified as an asset held for sale, in which case it is accounted for inaccordance with IFRS 5 “Non-current Assets Held for Sale and Discontinued Operations”.
Under the equity method, investments in associates are carried in the consolidated statement of financial position at cost and thenadjusted for post-acquisition changes in the Group’s share of the net assets of the associates, less any impairment in the value of theinvestments.
Losses of an associate in excess of the Group’s interest in that associate (which includes any long-term interests that, in substance,
form part of the Group’s net investment in the associate) are recognised only to the extent that the Group has incurred legal orconstructive obligations or made payments on behalf of the associate and the excess of those losses is no longer recognised.
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.

- 19 -

③ Joint arrangements
The Group classifies joint arrangements as either joint operations (having rights to assets and obligations for liabilities accounted foraccordingly) or joint ventures (having rights to net assets and equity accounted). The classification depends upon the rights andobligations of the parties to the arrangement.
Joint operators shall account for the assets, liabilities, revenues and expenses relating to their interests in joint operations. Joint
ventures shall apply the equity method. The Group has neither joint operations nor joint ventures.

(3) Business combinations
Acquisitions of businesses are accounted for using the acquisition method. Acquisition-related costs are generally recognised in profit
or loss as incurred. The acquiree’s identifiable assets acquired and liabilities assumed are recognised at their fair values at theacquisition date, except for the following:
・ a deferred tax asset or liability arising from the assets acquired and liabilities assumed, and a liability (or asset, if any) related to theacquiree’s employee benefit arrangements;
・ a liability or an equity instrument related to the replacement of an acquiree’s share-based payment awards with share-based payment
awards of the acquirer; and・ an asset or disposal group that is classified as held for sale at the acquisition date in accordance with IFRS 5 “Non-current Assets
Held for Sale and Discontinued Operations”.
When the consideration transferred by the Group in a business combination includes assets or liabilities resulting from a contingent
consideration arrangement, the contingent consideration is measured at its acquisition-date fair value and included as part of theconsideration transferred in a business combination. Changes in the fair value of the contingent consideration that qualify as
measurement period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period
adjustments are adjustments that arise from additional information obtained during the “measurement period” (which cannot exceed
one year from the acquisition date) about facts and circumstances that existed at the acquisition date.
Changes in the fair value of the contingent consideration resulting from events after the acquisition date are accounted for as follows:(a) Contingent consideration classified as equity is not remeasured and any subsequent settlement is accounted for in equity; or(b) Contingent consideration classified as an asset or a liability is accounted for in accordance with IAS 37, “Provisions, Contingent
Liabilities and Contingent Assets”, and IFRS 9, “Financial Instruments”, or other IFRSs as appropriate. The changes in the fair value
are recognised in profit or loss.
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 carrying amount in accordance with theprevious GAAP (i.e., Japanese GAAP) after performing an impairment test.

- 20 -

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

(5) Property, plant and equipment
The Group applies the cost model for measuring property, plant and equipment.
Property, plant and equipment are stated at cost, net of accumulated depreciation and impairment losses. Properties in the course of
construction for production, supply or administrative purposes, or for purposes not yet determined, are carried at cost, less any
recognised impairment losses. Cost includes the expenses directly attributable to the assets; the initial estimated costs relating to scrap,
removal and retirement; and, for qualifying assets, the borrowing cost for long-term projects. Depreciation of these assets commences
when the assets are available for their intended use.
When significant components of property, plant and equipment are required to be replaced periodically, the Group recognises suchcomponents as individual assets to be depreciated with specific useful lives. All other repair and maintenance costs are recognised in
profit or loss as incurred.
Property, plant and equipment other than land and construction in progress are depreciated mainly on a straight-line basis over thefollowing estimated useful lives. The estimated useful lives, residual values and depreciation method are reviewed at each year-end,
with the effect of any changes in estimate being accounted for on a prospective basis.
Buildings and structures: 3-50 years
Machinery and carriers: 3-10 years
Tools, equipment and fixtures: 2-10 years(6) Leases
As a lessee, the Group recognises a right-of-use asset and a lease liability at the commencement date. The lease liability is measured at
the present value of the lease payments that are not paid at the commencement date. The right-of-use asset is measured at cost
comprised of the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, any
initial direct costs incurred and an estimate of costs, such as the cost to dismantle and remove the underlying asset to the original
condition required by the terms and conditions of lease contracts.
After the commencement date, the right-of-use asset is depreciated on a straight-line basis over the useful life or lease term, whicheveris shorter.

- 21 -

The lease payments comprise of interest expense recognised as finance costs in the consolidated statement of comprehensive income
and repayments of the lease liability that are calculated by the interest method.
The Group does not recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or lessand for leases of low-value assets. The Group recognises the lease payments associated with these leases as expense on straight-line
basis over the lease term or other systematic basis.
Right-of-use assets are included in ‘Property, plant and equipment—net’ and ‘Intangible assets’ in the consolidated statement offinancial position at cost less accumulated depreciation and impairment losses. Lease liabilities are included in ‘Interest-bearing longterm debt’ and ‘Interest-bearing short-term debt’ in the consolidated statement of financial position.
As a lessor, the Group classifies each of its leases as either an operating lease or a finance lease. A lease is classified as a finance lease
if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset. A lease is classified as an operatinglease if it does not transfer substantially all the risks and rewards incidental to ownership of an underlying asset.
At the commencement date, the asset held under a finance lease is recognised on the consolidated statement of financial position andpresented as a receivable at an amount equal to the net investment in the lease.
The assets held under an operating lease are on the consolidated statement of financial position and the lease payments received arerecognised as income on a straight-line basis over the lease term in the consolidated statements of comprehensive income.

(7) Intangible assets
The Group uses the cost model for measuring intangible assets. Intangible assets are carried at cost less accumulated amortisation andimpairment losses.
① Intangible assets acquired separately and/or acquired in a business combination
Intangible assets acquired separately are carried at cost at initial recognition. Intangible assets acquired in a business combination arerecognised separately from goodwill at their fair value at the acquisition date, when they are satisfied with the definition of intangible
assets, identifiable, and their fair value is reasonably measured.
② Internally-generated intangible assets—research and development (“R&D”) costs
Expenditures on research activities are recognised as expense in the period in which they are incurred.
An internally-generated intangible asset arising from development (or from the development phase of an internal project) is
recognised if, and only if, all of the followings have been demonstrated:(a) the technical feasibility of completing the intangible asset so that it will be available for use or sale;(b) the intention to complete the intangible asset and use or sell it;(c) the ability to use or sell the intangible asset;(d) how the intangible asset will generate probable future economic benefits;(e) the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible
asset; and(f) the ability to measure reliably the expenditure attributable to the intangible asset during its development.
The amount initially recognised for internally-generated intangible assets is the sum of the expenses incurred from the date when theintangible assets first meet all of the recognition criteria listed above. The assets are amortised over the estimated period in which thedevelopment costs are expected to be recovered. If no future economic benefit is expected before the end of the life of assets, theresidual carrying amount is expensed.
Subsequent to initial recognition, internally-generated intangible assets are reported at cost less accumulated amortisation andimpairment losses. Where no internally-generated intangible asset can be recognised, development costs are recognised as an expensein the period in which they are incurred.
③ Amortisation of intangible assets
Amortisation is recognised on a straight-line basis over the estimated useful lives below. The Group does not have any intangible
assets with indefinite useful lives.

- 22 -

Technology: 5-20 years
Customer related assets: 5-16 years
Software: 3-5 years④ Derecognition of intangible assets
An intangible asset is derecognised on disposal or when no future economic benefits are expected from use or disposal. Gains orlosses arising from derecognition of an intangible asset are recognised in profit or loss when the asset is derecognised.

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

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

- 23 -

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

(11) Financial assets other than derivative financial instruments① Initial recognition and measurement
Financial assets are classified as “financial assets measured at amortised cost,” “financial assets measured at fair value through othercomprehensive income” (“FVTOCI”) or “financial assets measured at fair value through profit and loss” (“FVTPL”). The
classification is determined at the time of initial recognition
The Group recognises a financial asset on the trade date when it becomes party to the contract of the financial asset.
All financial assets are measured at the fair value plus transaction costs, except for FVTPL.
② Financial assets measured at amortised cost
Such financial assets are held within a business model whose objective is to hold financial assets to collect contractual cash flows, andthe contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and intereston the principal amount outstanding.
After initial recognition, “Financial assets measured at amortised cost” are measured at amortised cost by using the effective interest
method, less the cumulative amount of impairment losses.
③ Financial assets classified as FVTOCISuch financial assets are measured at fair value through other comprehensive income if both of the following conditions are met:(i) the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling
financial assets; and(ii) the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal andinterest on the principal amount outstanding.
The change in fair value is recognised in other comprehensive income.
The fair value of a particular asset in an equity instrument for which the Group makes an irrevocable election at initial recognition topresent in other comprehensive income subsequent changes in its fair value is recognised in other comprehensive income.
④ Financial assets classified as FVTPL
Any other securities not included in the classifications above are classified into financial assets measured at fair value through profit
and loss. The change in fair value is recognised in profit or loss.
⑤ Impairment of financial assets
The Group recognises a loss allowance for expected credit losses on “financial assets measured at amortised cost”.
The Group assesses whether the credit risk on a financial instrument has increased significantly since initial recognition. If the credit
risk on a financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that
financial instrument at an amount equal to 12-month expected credit losses. If the credit risk on a financial instrument has increased
significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to thelifetime expected credit losses. For trade receivables, the Group always measures the loss allowance at an amount equal to the lifetime
expected credit losses. The Group assesses the expected credit losses by using the change in the risk of a default or ageing of tradereceivables, etc. The impairment of financial assets is recognised in profit or loss.
⑥ Derecognition of financial assets
The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers
the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group retains
substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset
and a collateralised borrowing for the proceeds received.

- 24 -

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

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

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

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

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

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

- 25 -

(18) Financial liabilities issued by the Group excluding derivative instruments① Financial liabilities
Financial liabilities are classified as either financial liabilities classified as FVTPL or financial liabilities measured at amortised cost.
This classification is determined at initial recognition.
② Financial liabilities classified as FVTPL
Financial liabilities classified as FVTPL are either held for trading or designated as FVTPL at initial recognition. They are measured
at fair value, and the subsequent changes are recognised in profit and loss.
③ Financial liabilities measured at amortised cost
Financial liabilities measured at amortised cost are measured at fair value minus transaction costs at initial recognition. After the initialrecognition, they are measured at amortised cost by using the effective interest method. The gain or loss on cease of amortisation orderecognition is recognised in profit and loss as part of financial costs.
④ Derecognition of financial liabilities
The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or expired.
⑤ Financial guarantee contracts
Financial guarantee contracts are initially measured at their fair values and subsequently measured at the higher of:· the amount of loss allowance for expected credit losses, as determined in accordance with IFRS 9, “Financial Instruments”; and· the amount initially recognised less cumulative amortisation recognised in accordance with IFRS 15, “Revenue from Contracts with
Customers”.

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

- 26 -

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

(21) Revenue
The Group recognises revenue based on the five-step approach below:
Step 1: Identify the contracts with customers
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognise revenue when the entity satisfies a performance obligation
The Group sells health care related products, medical related products, electronics related products and imaging related products, etc.
Revenue is recognised at the fair value of the consideration received or receivable less discount, rebate and consumption taxes on the
shipping or delivery date, or upon the completion of inspection by customers when the control of products is transferred to thecustomer and the performance obligation is satisfied by the Group.

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

- 27 -

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

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

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

- 28 -

4. Critical accounting judgements and key sources of estimation uncertainty(1) Application of estimates and judgements
Preparation of consolidated financial statements requires management to make estimates and judgements in order to determine thereported amounts of certain assets, liabilities, income and expense items. As the impact of the novel coronavirus on items that require
estimates and judgements was limited in the consolidated fiscal year, a reasonable estimate was made based on the assumption that
impact on the following consolidated fiscal year and beyond will also be limited.
The following are items that require estimates and judgements and are considered significant:· Determination of net realisable value of obsolete inventory (Note 14 “Inventories”)· Expected cash flow from overdue trade and other receivables (Note 21 “Financial instruments”)· Useful lives of property, plant and equipment, right-of-use assets and intangible assets (Note 3 “Significant accounting policies”, (5)“Property, plant and equipment”, (6) “Leases” and (7) “Intangible assets”)· Lease period of right-of-use assets (Note 3 “Significant accounting policies”, (6) “Leases”)· Assumptions used to estimate future cash flows of cash-generating units to assess the recoverability of property, plant and equipment
and intangible assets, including goodwill (Note 9 “Impairment losses”)· Financial asset measured at fair value (Note 21 “Financial instruments”)· Recoverability of suspense payments of income taxes (Note 11 “Deferred taxes and income taxes” and Note 13 “Other assets andliabilities”)· Recoverability of deferred tax assets (Note 11 “Deferred taxes and income taxes”)· Assumptions used for treatment of retained earnings of overseas subsidiaries and associates for tax purposes (Note 11 “Deferredtaxes and income taxes”)· Assumptions used to calculate retirement benefit obligations (Note 17 “Retirement benefit plans”)· Asset retirement obligations arising from legal obligations and constructive obligations (Note 18 “Provisions”)· Fair value of stock options (Note 22 “Share-based payments”)
The estimates and underlying assumptions are based on historical experience and other factors that are considered to be relevant.
Actual results may differ from those estimates. The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions of accounting estimates will affect current and/or future periods.
(2) Key sources of risk and estimation uncertainty
The Group’s financial position, financial performance and cash flows are exposed to the following risks and uncertainties:· Tough competition and excess-supply of inventory in markets in which the Group operates· Development of new products and timing of development· Changes in the political, economic and regulatory environment, shortage of labour, labour strikes, natural disasters, pandemic andimpacts of unexpected international affairs in the countries in which the Group is located and operates· The effect of deferred taxes and income taxes on transactions between locations in different tax jurisdictions with different tax rates,or transactions between taxable and tax-exempt businesses(including discrepancies in opinion between the Company and the tax authority)· Fluctuations of currency exchange rates· The trend of environmental and governmental regulations
Global economic stagnation and the occurrence of natural disasters may have a significant impact on future profitability of the Group.
Future profitability of the Group may affect the estimates for the following:· Impairment of property, plant and equipment and intangible assets including goodwill (Note 9 “Impairment losses”)· Recoverability of deferred tax assets (Note 11 “Deferred taxes and income taxes”)- 29 -

5. Operating segment information(1) Overview of major products and services of reportable segments
Reportable segments are components of the Group for which separate financial information is obtained and examined on a regularbasis by the board of directors and the chief operating decision maker to determine the allocation of management resources andevaluate the business performance.
In accordance with its management philosophy, the Group has categorised “life and culture” and “information technology” as its
business domains. To achieve sustainable growth in corporate value in these business domains, the Group has been making decisions
on the allocation of management resources and monitoring the operating results.
As a result, the Group consists of three reportable business segments: Life Care business, Information Technology business and Other
business, which are consistent with the above business domains.
In the Life Care business, the Group produces and sells health care related products that are used routinely in health maintenancefields, and medical related products including medical equipment and medical supplies used in medical treatment. Some uniquefeatures of this business segment are that approvals and permits are required from relevant authorities in each country and that
advanced technological strength and reliable quality control systems are the key requirement.
In the Information Technology business, the Group produces and sells essential items for digital devices. Included are electronics
related products that are indispensable for today's digital information and communication technology, and imaging related productsthat are necessary to capture images as digital data based on optical technologies.
Other business includes the business that provides mainly speech synthesis software and information system services and new
businesses.
The main products and services for each reportable segment described above are as follows:
Reportable Segment
Life Care

Major Products and Services

Health Care related products

Eyeglass lenses and Contact lenses

Medical related products

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

Information Technology

Electronics related products

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

Imaging related products
Other

Optical lenses, Optical glass material, Laser equipment, Light source
Speech synthesis software, Design of information systems- 30 -

(2) Segment revenues and results
The following is an analysis of the Group’s revenue and results from continuing operations by reportable segment.
The accounting policies of the reportable segments are the same as the Group’s accounting policies described in Note 3 “Significant
accounting policies”.
（Millions of Yen）
For the year ended 31 March
2020
Revenue from externalcustomers

Life Care

Information
Technology

Total

576,546

－

3

26

1,148

1,177

(1,177)

Total

375,051

196,757

5,915

577,723(1,177)

576,546

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

4,766

Consolidated

Inter-segment sales

Interest expense
Depreciation and amortisation

196,731

Adjustments

576,546－

Interest income

375,049

Other

529

944

11

1,484

1,967

3,452

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

1,154
(486)

(612)
(34,374)

69

17

86

(300)
(99,314)(5,399)(300)(392,942)(1,739)－(1,652)(1)(288,230)－－

62,23088,13532

24,94428,93970(2,849)(300)(395,791)

150,397(3,129)147,268

53,952

196

54,148Other disclosure
Capital expenditure
Note:
Adjustments to segment profit before tax of (3,129) million yen for the year ended 31 March 2020 consist of elimination of intersegment transactions of 1 million yen, and profit or loss of the Company’s headquarters, the R&D department and overseas holding
companies (after elimination of dividend income from Group companies) of (3,130) million yen .
（Millions of Yen）
For the year ended 31 March
2021
Revenue from externalcustomers

Life Care

Information
Technology

Other

Total

Adjustments

Consolidated

341,801

200,965

5,154

547,921－

Inter-segment sales

165

79

1,162

1,406

(1,406)547,921－

Total

341,965

201,0456,317

549,327(1,406)547,921

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

295

633

0

928

616

1,544

(1,120)(23,806)(360)(11,566)

(2)
(412)

(1,482)(35,784)

757
(553)

(725)
(36,336)

(446)
－

72

5

－

78

(7,803)(246,058)(363)(94,489)－(5,098)(8,166)(345,645)

994(8,166)(344,651)(369)

63,544

94,905806

159,256(38)

159,218

12,64427,053

188

39,886

207

40,093

Other disclosure
Capital expenditure- 31 -

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

Life Care

2021

Information

Other

Total

Adjustments

Consolidated－

Technology

Revenue from externalcustomers
Inter-segment sales

3,087,352
1,486

1,815,241
718

46,558
10,4994,949,152
12,703(12,703)4,949,152－

Total

3,088,838

1,815,959

57,057

4,961,855(12,703)4,949,152

2,660(10,118)

5,718(3,256)

4
(14)

8,383
(13,388)

5,564
6,840

13,947(6,547)

Depreciation and amortisation
Share of profit (loss) of(215,033)(104,469)(3,718)(323,220)(4,992)(328,211)

associates
Impairment losses

653(70,485)50(3,275)－－

703(73,760)(4,033)－(3,330)(73,760)(2,222,546)(853,485)(46,046)(3,122,078)

8,978(3,113,100)

573,970

857,2427,283

1,438,496(345)

1,438,151

114,210244,3621,700

360,272

1,872

362,145

Interest income
Interest expense

OthersSegment profit before tax
Other disclosure
Capital expenditure

Note:
Adjustments to segment profit before tax of (38) million yen ((345) thousand U.S. dollars) for the year ended 31 March 2021 consistof elimination of inter-segment transactions of (23) million yen ((209) thousand U.S. dollars), and profit or loss of the Company’s
headquarters, the R&D department and overseas holding companies (after elimination of dividend income from Group companies) of(15) million yen ((136) thousand U.S. dollars).
(3) Revenue from major products and services
The following is an analysis of the Group’s revenue from continuing operations from its major products and services for the years
ended 31 March 2020 and 2021:(Millions of Yen)

(Millions of Yen)

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

For the year ended
31 March 2021

For the year ended
31 March 2021

Life Care
Health Care related products
Medical related products

277,798
97,251

251,626
90,1752,272,835
814,518

Life Care total

375,049

341,801

3,087,352

Electronics related products

162,655

171,887

1,552,588

Imaging related products
Information Technology total

34,07629,078262,654

196,731200,965

1,815,241

4,766

5,154

46,558－－－576,546547,921

4,949,152

Information Technology

Other
Corporate (R&D)
Total revenue from externalcustomers- 32 -

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

(Millions of Yen)

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

For the year ended

For the year ended

31 March 2020

31 March 2021

31 March 2021

Japan
U.S.A.

163,045
83,816

144,680
68,3781,306,834
617,635

Singapore
China

54,65644,83557,64047,804

520,635
431,795

South Korea
Others

31,702
198,492

34,833
194,586

314,6311,757,621

Total

576,546547,921

4,949,152

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

(Millions of Yen)

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

For the year ended
31 March 2021

For the year ended
31 March 2021

U.S.A.
Japan

66,76336,63456,47035,310510,069
318,942SingaporeLaos17,21011,65422,97921,541

207,565
194,567

Thailand
Others

20,21381,752

19,03982,463

171,975
744,857

Total

234,224

237,8022,147,974

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

- 33 -

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

Buildings and Machinery
structuresand carriers

Tools,
equipment

Land

Construction Right-of-use
in progress
assetsTotal

and fixtures
Balance at 1 April 2019

101,418

282,687

64,465

9,233

16,348－474,150

(780)

(15)

(635)

－

－

25,90324,473

100,637

282,672

63,8299,233

16,34825,903498,624

543

1,797

2,495

－

42,026

5,925

52,786

combinations
Disposals (i)33(1,751)－－－(8,004)16(2,297)

(38)

(301)

116
(1,019)165(13,410)

Transfer from construction inprogress

3,198

16,526

1,949－(21,673)－－

Effect of foreign currency
exchange differences(3,112)(8,844)(2,415)

(136)

(572)

(1,039)(16,119)

Cumulative effect ofaccounting change
Restated balance at 1 April
2019
Additions
Acquisitions through business

Others

(597)

79

1,009

(199)

986

200

1,478

Balance at 31 March 2020

98,951

284,225

64,5868,860

36,81530,087

523,524

502

1,011

1,486

－

31,1105,016

39,124

Additions
Acquisitions through businesscombinations

－

3

－

－

－

135

138

Disposals (i)Transfer from construction in(2,066)(5,680)(1,611)

(725)

(41)

(2,995)(13,118)

progress
Effect of foreign currency

12,32824,873

2,194－(39,395)－－

exchange differences
Others

3,630
(132)

9,996
(2,128)

3,304
537

182
(22)

624
(674)

886
(66)

18,622(2,485)

Balance at 31 March 2021

113,213

312,299

70,4958,296

28,44033,063565,805- 34 -

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

Tools,

Land

Construction Right-of-use

structuresand carriers

equipment
and fixtures(67,966)(254,395)(39,472)(1,082)(159)－(363,074)

416

10

346

－

－

(772)

－

Restated balance at 1 April
2019(67,551)(254,385)(39,125)(1,082)

(159)

(772)

(363,074)

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

－

(61)
584

(223)
7,382

(16)
2,072

－

(7,028)
－

35

0
－
－

(28,697)

Impairment losses (ii)
Disposals (i)

523

(300)
10,596

Effect of foreign currency
exchange differences

2,006

7,480

1,428

0

1

269

11,183

Balance at 1 April 2019
Cumulative effect ofaccounting change

Othersin progressTotal

assets

324

(151)

(871)

(35)

115

(311)

(930)

Balance at 31 March 2020

(68,473)(253,767)(40,537)(1,082)(43)(7,320)(371,222)

Depreciation expense(4,025)(15,393)

－

(408)
5,559

－

1,244

128

(23)
23

(7,244)－(31,179)

(0)
1,949

(4,516)－－

Impairment losses (ii)
Disposals (i)Effect of foreign currency
exchange differences(2,359)(8,721)(2,010)－(3)

OthersBalance at 31 March 2021

2,415

(431)
11,319(331)(13,424)

(52)

3,069

891

－

45

136

4,088

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

(954)

(1)

(12,343)(400,848)（Millions of Yen）
Carrying amount

Buildings and Machinery
structuresand carriers

Tools,
equipment

Land

Construction Right-of-use
in progress
assetsTotal

and fixtures
Restated balance at 1 April

33,08728,287

24,704

8,151

16,18925,131

135,550

Balance at 31 March 2020

30,47830,45824,0497,778

36,772

22,767

152,302

Balance at 31 March 2021

40,252

42,63825,567

7,342

28,43820,720164,957

2019- 35 -

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

Balance at 31 March 2020
Additions
Acquisitions through business

Buildings and Machinery

Tools,

Land

Construction Right-of-use
in progressTotal

structuresand carriers

equipment
and fixtures

assets893,787

2,567,291

583,378

80,031

332,538

271,7634,728,788

4,531

9,131

13,422－

281,00345,309353,396－

combinations
Disposals (i)24(51,305)－－－(18,665)(14,553)(6,548)

(367)

1,219
(27,055)

1,243(118,493)

Transfer from construction inprogress

111,354

224,667

19,817－(355,838)－－

Effect of foreign currency
exchange differences

32,79290,28929,842

1,645

5,635

8,001

168,203

Others(1,193)(19,222)

4,849

(196)

(6,088)(593)(22,442)

1,022,606

2,820,875

636,756

74,931

256,883

298,644

5,110,696

Tools,

Land

Balance at 31 March 2021

(Thousands of U.S. Dollars (Note 2))
Accumulated depreciation and Buildings and Machinery

Construction Right-of-use
in progress

Total

impairment losses

structuresand carriers

equipment
and fixtures

assetsBalance at 31 March 2020

(618,493)(2,292,176)(366,154)(9,773)(393)(66,115)(3,353,104)

Depreciation expense
Impairment losses (ii)

(36,358)(1)(139,039)(3,682)(40,795)
－

－
－

－
(205)

(65,432)－(281,625)(3,889)

Disposals (i)Effect of foreign currency

17,60550,214

11,2401,157

205

21,816102,237

exchange differences
Others(21,307)(474)(78,777)
27,718(18,159)
8,047

－
－

(24)
406

(2,987)
1,231(121,255)
36,928

Balance at 31 March 2021

(659,029)(2,435,742)(405,822)(8,616)(10)(111,488)(3,620,707)(Thousands of U.S. Dollars (Note 2))
Carrying amount

Balance at 31 March 2021

Buildings and Machinery

Tools,

structuresand carriers

equipment
and fixtures

363,577

385,133

230,934

Land

Construction Right-of-use
in progress

66,315

256,873

Total

assets187,156

1,489,989

Note:(i) Gain and loss arising from the sale or disposal of property, plant and equipment for the years ended 31 March 2020 and 2021, are
set out in Note 24 “Revenue and expenses (excluding finance income and costs)”. Gain and loss on sale of assets held for sale areincluded in ‘gain on sale of property, plant and equipment’ and ‘loss on sale of property, plant and equipment’ in Note 24.
(ii) Details of impairment losses are set out in Note 9 “Impairment losses”.
(iii) Property, plant and equipment under construction are included in “construction in progress” in the table above.
Details of commitments for the acquisition of property, plant and equipment are set out in Note 33 “Commitments for expenditure”.
There is no borrowing cost capitalised and included in the cost of acquisition of property, plant and equipment.

- 36 -

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

Buildings and Machinery andstructures

carriers

Tools,
equipment andLand

OthersTotal

fixtures

Balance at 31 March 2020

17,244

947

918

3,654

5

22,767

Balance at 31 March 2021

15,525

909

704

3,583

－

20,720(Thousands of U.S. Dollars (Note 2))
Right-of-use assets

Buildings and Machinery andstructures

Balance at 31 March 2021

140,230carriers

Tools,
equipment andfixtures

8,209- 37 -

6,355

Land
32,362OthersTotal－

187,156

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

(Millions of Yen)

For the year ended 31
March 2020

For the year ended 31
March 2021

(Thousands of U.S.
Dollars (Note 2))
For the year ended 31
March 2021

Buildings and structures

5,967

6,185

55,863

Machinery and carriers

564

562

5,079

Tools, equipment and fixtures

354

334

3,018

Land

134

163

1,472

9

1

7

7,028

7,245

65,439Interest expense on lease liabilities

407

338

3,052

Expense relating to short-term leases

1,548

1,307

11,803

461

437

3,949

1,190

628

5,670

Depreciation of right-of-use assets

Software
Total

Expense relating to leases of low-value assets
Expense relating to variable lease payments (Note)(Note) The expense is not included in the measurement of lease liabilities.
Expense relating to variable lease payments is linked with sales revenue stipulated in the lease contracts of the store operated
in shopping center, etc.
Depreciation of right-of-use assets is included in the line item ‘Depreciation and amortisation’, interest expense on lease liabilities isin ‘Finance costs’ and expenses relating to short-term leases, leases of low-value assets and variable lease payments are in ‘Other
expenses’ in the consolidated statement of comprehensive income.
For the year ended 31 March 2020 and 2021, total cash outflows for leases are 10,746 million yen and 9,644 million yen (87,111
thousand U.S. dollars) for each period.
A maturity analysis of lease liabilities is set out in Note 21 “Financial instruments”.

- 38 -

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

(Millions of Yen)

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

For the year ended 31
March 2020

For the year ended 31
March 2021

For the year ended 31
March 2021

45

47

427

Finance income on the net investment in the lease

A maturity analysis of the receivable under finance lease contracts is as follows:(Thousands of U.S.

(Millions of Yen)

(Millions of Yen)

As at 31 March 2020

As at 31 March 2021

As at 31 March 2021

Not later than one year

371

436

3,940

Later than one year but not later than two years

319

334

3,013

Later than two years but not later than three years

223

261

2,356

Later than three years but not later than four years

146

158

1,427

Later than four years but not later than five years

70

81

735

Later than five years

95

121

1,089

1,224

1,391

12,560

Unearned finance income

(66)

(66)

(600)

Net investment on the lease

1,158

1,324

11,960Total- 39 -

Dollars (Note 2))

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

Goodwill

Intangible assets
SoftwareBalance at 1 April 2019Technology

Customer
related assets

Others (i)Total

51,13622,342

21,33931,887

7,462

83,031

Additions
Acquisitions through business

－

1,288

4

－

70

1,362

combinations
Disposals

28
－

－

－
(15)

1,473
(27)

－

(341)

(3)

1,473
(386)

(1,676)

(607)

(530)

(2,826)(1,130)(5,093)

Effect of foreign currency
exchange differences
Others

(58)

510

(37)

(107)

15

381

49,43023,193

20,76230,4006,413

80,767

－

865

－

－

104

969

28
－

－

－

805

－

805

(182)

－

(292)

(808)

(1,282)exchange differences
Others

180
23

838
(202)

579
2

136
(6)

194
11

1,747
(195)

Balance at 31 March 2021

49,661

24,511

21,34331,043

5,915

82,811

Balance at 31 March 2020
Additions
Acquisitions through businesscombinations
Disposals
Effect of foreign currency（Millions of Yen）
Accumulated amortisation andGoodwill

impairment losses

Intangible assets
SoftwareTechnology

Customer
related assets

Others

Total

Balance at 1 April 2019(8,293)(17,896)(5,818)(10,249)(4,760)(38,723)

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

Disposals
Effect of foreign currency

－

335

－

－

1

335

exchange differences
Others

909
35

459
(448)

141
59

1,880
18

1,008
(23)

3,488
(395)

Balance at 31 March 2020

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

Amortisation expense (ii)
Impairment losses (iii)－(1,113)(4)(1,458)－(2,189)－(398)－(5,158)
(4)

172

－

292

801

1,265

Disposals
Effect of foreign currency(7,732)－exchange differences
Others

1,107
－

(629)
0

(251)
－

171
－

(118)
(8)

(827)
(7)

Balance at 31 March 2021

(13,973)(20,260)(8,902)(12,537)(4,002)(45,702)（Millions of Yen）
Carrying amount

Goodwill

Intangible assets
SoftwareTechnology

Customer
related assets

Others

Total

Balance at 1 April 201942,843

4,446

15,521

21,6392,702

44,308

Balance at 31 March 2020

42,082

4,506

13,567

19,5892,133

39,796

Balance at 31 March 2021

35,6884,252

12,44018,506

1,912

37,110- 40 -

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

Goodwill

Intangible assets
SoftwareBalance at 31 March 2020

Technology

Customer
related assets

Others (i)Total

446,482

209,490

187,531274,589

57,925729,534

Additions
Acquisitions through business

－

7,813

－

－

936

8,748

combinations
Disposals

255
－

－

－
－

7,274
(2,638)－(1,645)(7,294)

7,274(11,577)

1,625

7,565

5,232

1,231

1,755

15,783207(1,824)

18

(56)

103

(1,760)448,568

221,399

192,781280,399

53,425748,003

Effect of foreign currency
exchange differences
OthersBalance at 31 March 2021

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

Goodwill

Intangible assets
SoftwareTechnology

Customer
related assets

Others

Total

Balance at 31 March 2020

(66,371)(168,789)(64,983)(97,650)(38,655)(370,077)

Amortisation expense (ii)－

(10,053)
(33)
1,555

(13,166)－－(19,775)－(3,593)－(46,586)(69,838)
－

2,638

7,232

(33)
11,424

9,999－(5,680)(2,264)－

1,543－(1,067)(7,467)

4

(70)

(66)

(126,210)(182,996)(80,412)(113,244)(36,153)(412,805)

Impairment losses (iii)
Disposals
Effect of foreign currency
exchange differences
OthersBalance at 31 March 2021

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

Goodwill

Intangible assets
SoftwareBalance at 31 March 2021

322,358

Technology

38,403112,368

Customer
related assets

Others167,155

17,272

Total
335,198

Note:(i) There were no significant internally generated intangible assets for the years ended 31 March 2020 and 2021.
(ii) Amortisation expense is included in the line item ‘Depreciation and amortisation’ in the consolidated statement of comprehensive
income.
(iii) Details of impairment losses are set out in Note 9 “Impairment losses”.
No intangible assets have been pledged as collateral to secure the debt. There is no restriction on legal title of these assets. Details ofcommitments for the acquisition of intangible assets are set out in Note 33 “Commitments for expenditure”.

- 41 -

Details of intangible assets in the consolidated statement of financial position are as follows:
As at 31 March 2020

As at 31 March 2021
Carrying amount

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

(Thousands of
U.S. Dollars

Remaining useful
lives (Years)(Note 2))

Technology

Health Care related
products

1,683

8

1,522

13,7507

Medical related
products

11,772

910,853

98,0278

12,36810

11,850107,033

9

5,292

12

4,915

44,39812

Health Care related
Customer related
assetsproducts
Medical related
products- 42 -

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

(Millions of Yen)

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

For the year ended 31 March 2020

For the year ended 31 March 2021

For the year ended 31 March 2021

Buildings and structures

61

0

1

Machinery and equipment

223

408

3,682

Tools, equipment and fixtures

16

－

－

Construction in progress

－

23

205

Total impairment losses onproperty, plant and equipment

300

431

3,889

Goodwill－

7,732

69,838

Software－4

33

Total impairment losses on
intangible assets

－

4

33

Total impairment losses

300

8,166

73,760(1) Cash-generating units
The Group identifies each strategic business unit (“SBU”) as a cash-generating unit for impairment testing purposes. Each business
unit has been set based on the production and sale of product lines. For any asset expected to be sold or disposed, or any idle asset, theasset is individually tested for impairment.
(2) Impairment losses on assets in business units
For the year ended 31 March 2020
No impairment losses on assets were recognised in business units.
For the year ended 31 March 2021
As a result of impairment test for the goodwill in Life Care business which the Group performed during the year ended 31 March
2021, the Group recognised impairment losses on goodwill of two companies.
For one of these companies, which is located in the U.S.A and operates in medical endoscopes business, the book value of the asset
group was reduced to the recoverable amount and an impairment loss of ¥2,984 million (26,956 thousand U.S. dollars) was recognized
due to expected delays in the timing of the introduction of new products to the market and the difficulty in achieving the plan at thetime of acquisition because of the impact of the novel coronavirus and other factors. The recoverable amount of the asset group ismeasured at the vale in use, and cash flows projections are discounted to the present value using the pre-tax weighted-average cost ofcapital (WACC) of the SBU, 5.5%.
For another company, which is also located in the U.S.A and operates in ophthalmic medical equipment business, its profitability was
originally high and sales and profits were extremely favorable at the time of the acquisition. However, in the current situation, its
performance is sluggish due to decrease in customer sales and inventory adjustments triggered by the impact of the novel coronavirus,
etc. and there are many uncertainties during the slow recovery. As a result, the book value of this asset group was reduced to therecoverable amount and an impairment loss of ¥4,747 million (42,882 thousand U.S. dollars) was recognised. The recoverable amountis measured at the value in use, and cash flows projections are discounted to the present value using the pre-tax WACC of the SBU,
6.7%.
(Millions of Yen)

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

Impairment losses

Impairment lossesLife Care
Medical related products (Medical endoscopes)
Goodwill
Medical related products(Ophthalmic medical equipment)
Goodwill
Total- 43 -

2,984

26,956

4,747

42,882

7,732

69,838

(3) Impairment losses on idle assets
For the year ended 31 March 2020, the carrying amount of the related assets, which were not expected to be used in the future due tobusiness restructuring, was written down to the recoverable amount which was measured at fair value less related selling costs, and thecorresponding impairment loss was recognised. The fair value is mainly based on market approach and categorised within Level 3 ofthe fair value hierarchy as it contains unobservable inputs such as third party's valuation.
Impairment losses were recognised as follows for the year ended 31 March 2020:(Millions of Yen)
Impairment lossesLife Care
Tools, equipment and fixtures

1

Life Care Total

1

Information Technology
Buildings and structures
Machinery and carriers

61
223

Tools, equipment and fixtures

16

Information Technology Total

300

Total

300

For the year ended 31 March 2021, the carrying amount of the related assets, which were not expected to be used in the future due tobusiness restructuring, was written down to the recoverable amount which was measured at fair value less related selling costs, and thecorresponding impairment loss was recognised. The fair value is mainly based on market approach and categorised within Level 3 ofthe fair value hierarchy as it contains unobservable inputs such as third party's valuation.

Impairment losses were recognised as follows for the year ended 31 March 2021:(Millions of Yen)

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

Impairment losses

Impairment lossesLife Care
Machinery and carriers

68

614

Software

4

33

72

647

Buildings and structures01

Machinery and carriers
Construction in progress

340
23

3,069
205

Information Technology Total

363

3,275

Total

434

3,922

Life Care Total
Information Technology- 44 -

(4) Goodwill allocated to cash-generating units
When the recoverable amount of the goodwill specifically associated with a cash-generating unit is lower than the carrying amount ofsuch goodwill, an impairment loss is recognised and the goodwill is written down to the recoverable amount. The recoverable amountof goodwill allocated to cash-generating units was measured at the value in use and it was determined using cash flow projections
based on the financial budgets that had been approved by the Group’s management and applying a discount rate of 5.5% to 16% perannum which is the cash-generating units’ pre-tax WACC. Cash flow projections during the budgeted period are based on the
expected gross margins and taking into account inflation. The cash flows beyond the budget period have been extrapolated using a
steady annum growth rate which is the projected long-term average growth rate for the main products market. Management believes
that any reasonably possible change in the key assumptions (e.g., profit ratio, inflation, the projected long-term average growth rate
and the pre-tax WACC) on which the recoverable amount is based would not cause the aggregate carrying amount to exceed theaggregate recoverable amount of the cash-generating unit.
The carrying amount of goodwill was allocated to the cash-generating units as follows:（Millions of Yen）
As at 31 March 2020

Life Care
Health Care related

Medical related products

products
Eyeglass lenses
Japan
Americas
Europe

Total

Medical accessories
849

733

－

1,582

25,444
551

－
504
－

38,425
1,823

252

12,981
769－

27,096

14,482

504

Asia
Total

Other

252
42,082（Millions of Yen）

As at 31 March 2021

Life Care
Health Care related

Medical related products

products
Eyeglass lenses
Japan
Americas
Europe

Total

Medical accessories
842

733

－

1,575

26,308
663

－
547
－

31,791
2,045

278

5,483
834
－

28,091

7,050

547

Asia
Total

Other

278
35,688(Thousands of U.S. Dollars (Note 2))
As at 31 March 2021

Life Care

Japan
Americas
EuropeAsia
Total

Health Care related
products

Medical related products

Eyeglass lenses

Medical accessories

Other

Total

7,607

6,619

－

14,225

237,629
5,986

－
4,945
－

287,154
18,4692,510

49,525
7,537－

253,732

63,681

4,945- 45 -

2,510
322,358

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

(Millions of Yen)

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

As at / for the year
ended 31 March 2020

As at / for the year
ended 31 March 2021

As at / for the year
ended 31 March 2021

(1,652)(369)(3,330)

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

76

(144)

(1,301)(1,576)
1,007

(513)
661

(4,631)
5,970

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

Place of
Name of associate
AVANSTRATE, INC.

Principal activity incorporation andoperation

Segment

As at
31 March 2020

As at
31 March 2021

Production andsale of glass

JAPAN

Corporate

46.6

46.6

INDIA

Corporate

24.3

24.3

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

Medical services

LIMITEDrelated toophthalmology

HTK LENTES OFTALMICASLTDASale of opticallens

BRAZIL

Life Care

37.6

36.2

JIASHAN CANDEO OPTICAL

Production and

CHINA

Information

49.0

49.0

GLASS CO., LTD.

sale of special
glass, such as

Technology

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

(Millions of Yen)

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

As at / for the year
ended 31 March 2020

As at / for the year
ended 31 March 2021

As at / for the year
ended 31 March 2021

The Group’s unrecognised share of net loss

6,392

2,341

21,149The Group’s unrecognised share of accumulated net loss

14,394

16,736

151,165- 46 -

11. Deferred taxes and income taxes(1) Deferred taxes
Details of deferred tax assets and liabilities are as follows:（Millions of Yen）
Cumulative
As at
1 April 2019

effect ofaccounting

As at
1 April 2019change(Restated)

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

353
1,511

Allowance for doubtful
accounts

737

Provisions
Accrued expenses

817
4,504

Unrealised profit on inventories
Depreciation and amortisation

3,187
1,437

Impairment losses
Exchange differences ontranslating foreign operations
Lease liabilities

748
127

－
－
－
－
－
－
－
－

353
1,511

340
(61)

737

(326)

817
4,504

330
(929)

3,187
1,437

(300)
690

748
127

(156)
－

－

－
－
－
－
－
－
－
－

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

(203)

592
(75)

2,772
－

2,772

－

－

2,772

1,590

1,590

1,053

(5)

2,638

Subtotal

15,0102,772

17,783641(208)

18,216

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

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

(300)

(300)

－

(207)

(507)

Others－(2,948)－comprehensive income
(444)

－

(444)

30

－

(414)

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

(699)

(207)

(16,040)

2,392
29

－

2,392
29

(477)
18

－

－

－

1,915
47

Subtotal

2,421

－

2,421

(459)

－

1,962

Total

5,246

(176)

5,070

(516)

(415)

4,139

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

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

- 47 -

（Millions of Yen）
Recognised

As at
1 April 2020
Temporary differences
Enterprise tax payable

Recognised in profit orin other comprehensive
loss
incomeAs at
31 March 2021

693

(12)

Write-down of inventories
Allowance for doubtful

1,450
411

82
140

accounts
Provisions

1,147

293

Accrued expenses
Unrealised profit on inventories

3,575
2,887

(633)
(107)

Depreciation and amortisation
Impairment losses

2,126
592

－

2,517
508

Exchange differences ontranslating foreign operations

(75)

390
(84)
－

(78)

(153)

Lease liabilities

2,772
2,638

(96)
176

－
(17)

2,677
2,798

Subtotal

18,216150(94)

18,273

Undistributed retained earnings(3,852)(1,258)－(5,110)of subsidiaries
Depreciation and amortisation(8,319)560－(7,759)Lease liabilities
Financial assets measured at(2,948)
(507)

127
－

－
(2,546)(2,822)(3,052)(414)(1,001)－(1,416)(16,040)(1,573)(2,546)(20,158)

1,915

573

－

2,488

47

(32)

－

15

Subtotal

1,962

542

－

2,504

Total

4,139

(881)

(2,640)618

Others

－
－
－
－
－
－
－

681
1,532
551
1,440
2,943
2,780

fair value through othercomprehensive income
OthersSubtotal
Tax loss carryforwards and tax
credits
Tax loss carryforwards
Tax credits

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

- 48 -

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

As at
1 April 2020

Recognised in profit orin other comprehensive
loss
incomeAs at
31 March 2021

Temporary differences
Enterprise tax payable

6,255

(104)

Write-down of inventories
Allowance for doubtful

13,097
3,711

745
1,262

accounts
Provisions

10,3592,646

Accrued expenses
Unrealised profit on inventories

32,29526,078(5,714)(967)

Depreciation and amortisation
Impairment losses

19,206
5,351－

22,733
4,588

Exchange differences ontranslating foreign operations

(682)

3,526
(763)
－

(701)

(1,383)

Lease liabilities

25,04323,828

(864)
1,592

－
(150)

24,17925,270Subtotal

164,542

1,359

(851)

165,050

Undistributed retained earnings(34,794)(11,363)－(46,157)of subsidiaries
Depreciation and amortisation(75,141)

5,056－(70,085)

Lease liabilities
Financial assets measured at(26,630)(4,576)

1,144－－(22,995)(25,486)(27,571)(3,739)(9,043)－(12,782)(144,880)(14,206)(22,995)(182,081)

17,296

5,178－

22,474

425

(285)

－

140

Subtotal

17,721

4,893－

22,614

Total

37,383(7,954)(23,846)

5,583

Others

－
－
－
－
－
－
－

6,151
13,842
4,973
13,005
26,581
25,111

fair value through othercomprehensive income
OthersSubtotal
Tax loss carryforwards and tax
credits
Tax loss carryforwards
Tax credits

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

- 49 -Tax loss carryforwards and deductible temporary differences for which deferred tax assets have not been recognised are as follows:(Millions of Yen)

(Millions of Yen)

As at
31 March 2020

As at
31 March 2021

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

Tax loss carryforwards
Deductible temporary differences
Total

As at
31 March 2021

11,1204,226

10,6804,739

96,47042,802

15,346

15,419139,272

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

(Millions of Yen)

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

As at
31 March 2020

As at
31 March 2021

As at
31 March 2021

Year 1

1,329

459

4,147

Year 2
Year 3

611
820

566
377

5,116
3,403

Year 4

403
7,956

435
8,843

3,930
79,874

11,12010,68096,470Year 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 2020 and 2021, were 327,573 million yen and 393,353 million yen (3,553,001
thousand U.S. dollars) for each period. No liability has been recognised in respect of these differences because the Group is in aposition to control the timing of the reversal of the temporary differences and it is probable that such differences will not reverse in theforeseeable future.

(2) Income taxes
In Japan, the normal effective statutory tax rates are 30.5% for each of the years ended 31 March 2020 and 2021.
Current or deferred taxes in other tax jurisdictions are calculated by the tax rates generally applied to those tax jurisdictions.
Details of current tax expense and deferred tax expense are as follows:(Millions of Yen)

(Millions of Yen)

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

For the year ended
31 March 2020

For the year ended
31 March 2021

For the year ended
31 March 2021

31,948454

32,055
177

289,543
1,601

32,402

32,233291,144

252
27

1,651
114

14,913
1,026

Total deferred tax expense

279

1,765

15,939Total income tax expense

32,681

33,997

307,083

32,681－

33,997－

307,083－

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

Continuing operations
Discontinued operations

Note:(i) “Current tax expense” includes previously unrecognised tax benefits from tax loss carryforwards, tax credits and deductible
temporary differences. These benefits were 15 million yen and 169 million yen (1,530 thousand U.S. dollars) for the years ended 31
March 2020 and 2021 for each period.

- 50 -

(ii) “Deferred tax expense” includes previously unrecognised tax benefits from tax loss carryforwards, tax credits, deductible
temporary differences, and expenses or benefits arising from write-downs of deferred tax assets or the reversal of previous writedowns of deferred tax assets. These effects increased the deferred tax expense by 660 million yen and 381 million yen (3,445 thousand
U.S. dollars) for the years ended 31 March 2020 and 2021, for each period.
(iii) On 26 June 2013, the Company received a reassessment notice from the Tokyo Regional Taxation Bureau (“TRTB”) for
additional tax on the transfer pricing taxation of transactions with overseas subsidiaries that develop and manufacture electronicsrelated products for the five financial years ended 31 March 2007 to 2011. The Company has lodged an objection with TRTB seeking
withdrawal of the assessment in accordance with the relevant law.
On 29 March 2018, the Company received a written verdict from the National Tax Tribunal (the “Tribunal”), which partially cancels
the reassessments. The Company disagrees with the remaining findings of the Tribunal’s verdict that maintains portions of thereassessment and the Company expects to appeal the findings in court to seek cancellation of all the reassessments by the tax
authorities. Consequently, the paid amount of 7,916 million yen (71,505 thousand U.S. dollars) is included in “Other current assets” asa suspense payment.
On 27 June 2018, the Company received a reassessment notice from TRTB for additional taxes on the transfer pricing taxation oftransactions with overseas subsidiaries that developed and manufactured electronics-related products for the three financial years
ended 31 March 2012, 2013 and 2014. The Company has lodged an objection with TRTB seeking withdrawal of the assessment inaccordance with the relevant law.
On November 11, 2020, the Company received a written verdict from the Tribunal, which partially cancels the reassessments. The
Company disagrees with the remaining findings of the Tribunal’s verdict that maintains portions of the reassessment and the Company
expects to appeal the findings in court to seek cancellation of all the reassessments by the tax authorities. Consequently, the paid
amount of 4,544 million yen (41,046 thousand U.S. dollars) is included in “Other current assets” as a suspense payment.
A reconciliation of the normal effective statutory tax rate with the actual tax rate is as follows. The actual tax rate represents the ratio
of income tax expense and profit before tax from continuing operations.
For the year ended
31 March 2020

For the year ended
31 March 2021

Effective statutory tax rate
Expenses not deductible for tax purposes

30.5%
1.1%

30.5%
1.3%

Income not taxable for tax purposes
Effect of unrecognised deferred tax assets(0.6)%
0.1%(0.4)%(0.0)%

Impact of different tax rates applied to overseas subsidiaries
Profits and losses on investments in associates(12.0)%
0.1%(12.0)%
0.2%

Adjustment on deferred tax assets and liabilities due to the change of corporate tax
rate(0.0)%(0.0)%Tax rate difference due to the elimination of unrealised profit on inventories
Increase/decrease in deferred tax liabilities related to undistributed earnings of foreign(0.2)%

0.2%

subsidiaries
Prior year income taxes

0.5%
0.3%

0.8%
0.1%

Foreign withholding tax arising from dividends from subsidiaries
Others

0.0%
2.4%

0.6%
0.1%

Actual tax rate

22.2%

21.4%

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

- 51 -

12. Other financial assets and liabilities(1) Details of other financial assets and liabilities
Details of other financial assets and liabilities are as follows:(Millions of Yen)

(Millions of Yen)

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

As at
31 March 2020

As at
31 March 2021

As at
31 March 2021

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

16,49030,78916,76039,141

151,390353,549

Total

47,27855,902504,939

Total non-current assets (long-term financial
assets)45,97552,005

469,743

Total current assets (other short-term financial
assets)

1,303

3,897

35,196(Millions of Yen)

(Millions of Yen)

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

As at
31 March 2020
Other financial liabilities
FVTPL financial liabilities

As at
31 March 2021

As at
31 March 2021

542

96

869

26,20524,376

220,176

26,74624,472

221,045

Total non-current liabilities (other long-term
financial liabilities)

23,923

21,874

197,579

Total current liabilities (other short-term financial
liabilities)

2,824

2,598

23,466

Other financial liabilities measured at amortised
cost
Total

(2) Details of FVTOCI financial assets
Details of FVTOCI financial assets are as follows:

KIOXIA Holdings Corporation(Millions of Yen)

(Millions of Yen)

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

As at 31 March 2021

As at 31 March 2021

28,20035,507

320,721

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

- 52 -

(3) Derecognition of FVTOCI financial assets
The Group derecognises FVTOCI financial assets when they are partially sold, considering the capital efficiency, reconsideration ofbusiness relationships and so on.
Details of fair value and cumulative gain or loss in other comprehensive income at the time of selling in the year ended 31 March 2020
and 2021 are as follows:
Fair value(Millions of Yen)

Cumulative gain or loss

(Millions of Yen)

(Thousands of U.S.

(Millions of Yen)

(Millions of Yen)

(Thousands of U.S.

Dollars (Note 2))

Dollars (Note 2))

For the year ended
31 March 2020

For the year ended
31 March 2021

For the year ended
31 March 2021

For the year ended
31 March 2020

For the year ended
31 March 2021

For the year ended
31 March 2021

357

23

205

88

11

95

Cumulative gain or loss in other comprehensive income is transferred to retained earnings when FVTOCI assets are derecognised. The
amount of cumulative other comprehensive income or loss (after deduction of tax) which was transferred to retained earnings were 61
million yen and 10 million yen (90 thousand U.S. dollars) in the year ended 31 March 2020 and 2021.
Details of dividends income recognised from equity instruments are as follows:
Derecognised investment

Investment held as at end of fiscal year

(Millions of Yen)

(Millions of Yen)

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

(Millions of Yen)

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

For the year ended
31 March 2020

For the year ended
31 March 2021

For the year ended
31 March 2021

For the year ended
31 March 2020

For the year ended
31 March 2021

For the year ended
31 March 2021

－

－

－

10

8

73

- 53 -

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

(Millions of Yen)

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

As at 31 March 2020

As at 31 March 2021

As at 31 March 2021

Long-term prepaid expenses
Others

412
274

404
393

3,650
3,548

Total

685

797

7,198

Suspense payment (Note)

13,09012,460112,550

Prepaid expenses
Refundable consumption taxes

2,368
1,457

3,057
1,831

27,60916,538Non-current: Other assets

Current: Other assets

Others
Total

2,992

2,608

23,557

19,907

19,956180,255(Millions of Yen)

(Millions of Yen)

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

As at 31 March 2020

As at 31 March 2021

As at 31 March 2021

1,363

1,455

13,140

1,363

1,455

13,140Accrued salary/bonus/vacation pay
Other accrued expenses

15,894
16,504

16,292
21,055

147,159
190,180

Advance received/deferred revenue
Accrued consumption taxes

4,410
1,536

5,045
1,678

45,57315,158Others

2,107

1,872

16,90840,18145,942414,978

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

Total
Note:

On 26 June 2013, the Company received a reassessment notice from the TRTB for additional tax on the transfer pricing taxationof transactions with overseas subsidiaries that develop and manufacture electronics-related products for the five financial years
ended 31 March 2007 to 2011. The Company has lodged an objection with TRTB seeking withdrawal of the assessment inaccordance with the relevant law.
On 29 March 2018, the Company received a written verdict from the Tribunal, which partially cancels the reassessments. The
Company disagrees with the remaining findings of the Tribunal’s verdict that maintains portions of the reassessment and theCompany expects to appeal the findings in court to seek cancellation of all the reassessments by the tax authorities.
Consequently, the paid amount of 7,916 million yen is included in “Other current assets” as a suspense payment.
On 27 June 2018, the Company received a reassessment notice from the TRTB for additional taxes on the transfer pricing
taxation of transactions with overseas subsidiaries that developed and manufactured electronics-related products for the threefinancial years ended 31 March 2012, 2013 and 2014. The Company has lodged an objection with TRTB seeking withdrawal of
the assessment in accordance with the relevant law.
On 11 November 2020, the Company received a written verdict from the Tribunal, which partially cancels the reassessments. The
Company disagrees with the remaining findings of the Tribunal’s verdict that maintains portions of the reassessment and theCompany expects to appeal the findings in court to seek cancellation of all the reassessments by the tax authorities.
Consequently, the paid amount of 4,544 million yen (41,046 thousand U.S. dollars) is included in “Other current assets” as asuspense payment.

- 54 -

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

(Millions of Yen)

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

As at 31 March 2021

As at 31 March 2021

Goods and products

39,042

37,122

335,304

Work in progress
Raw materials

7,791
18,506

9,412
18,07585,018163,263

Supplies

12,791

12,758115,237

78,13077,367

698,824

4

46

419

Total
Inventories expected to be soldafter more than 12 months

The cost of inventories recognised as an expense during the years ended 31 March 2020 and 2021, was 252,630 million yen and
235,558 million yen (2,127,702 thousand U.S. dollars) for each period.
The cost of inventories recognised as an expense in respect of write-down and the reversal of such write-down is as follows:(Millions of Yen)

(Millions of Yen)

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

For the year ended

For the year ended

31 March 2020

31 March 2021

Amount of write-down

31 March 2021

1,960

2,163

19,538－－－Amount of reversal of writedown

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

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

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))As at 31 March 2020
Accounts receivable
Notes receivable andAs at 31 March 2021

As at 31 March 2021

97,422
5,694

111,226
5,427

1,004,660
49,022Other receivables
Allowance for doubtful accounts

3,078(2,855)

3,395(2,797)30,662(25,266)

Total

103,339

117,251

1,059,079

electronically recordedmonetary claims-operating

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

- 55 -

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

Yen)

Yen)

U.S. Dollars(Note 2))As at 31 March As at 31 March As at 31 March
2020
2021
2021

Averageinterest rate

Due

(%)
(i)

Long-term bank loans (excluding current portion)

234

995

8,986

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

19
864

23
855

203
7,723

1.20%

2023-2035－－

14,237
6,610

12,2396,638

110,549
59,955

1.79%
1.51%

2023‐2049－

Long-term lease liabilities
Short-term lease liabilities
Total Interest-bearing debt

21,966

20,749187,417

Total Interest-bearing long-term debt

14,472

13,234

119,536

Total Interest-bearing short-term debt

7,494

7,515

67,882

2.23%
－

Note:
(i) Interest rates are based on the weighted-average rates that applied to the balances at the end of each fiscal year.
The obligations under leases are secured by the leased assets for which the lessor has ownership.
There is no debt with covenants as at 31 March 2021.
Details of the remaining contractual maturity for long-term borrowings and its fair values are set out in Note 21 “Financial
instruments”.
The changes in liabilities arising from financial activities are as follows:(Millions of Yen)
Non-cash changes
As at 1 April
2019

Change inaccounting

As at 1 April
2019

policy(IFRS 16)

(afteradjustment)

Exchange
Cash flow

differences ontranslation of

As at 31 March2020

Othersforeign
operations

Short-term bank
loans

1,648

－

1,648

(775)

(9)

－

864

Long-term bank

328

－

328

(134)

59

－

253

862

21,37522,237(7,547)

(630)

6,787

20,8482,838

21,37524,214(8,456)

(579)

6,787

21,966loans
Lease liabilities
Total(Millions of Yen)
Non-cash changes
As at 1 April
2020

Cash flow

Change of scope

Exchangedifferences onof consolidationtranslation offoreign operations

As at 31 March
2021

OthersShort-term bank
loans

864

(27)

－

18

－

855

Long-term bank

253

718

－

46

－

1,017

20,848(7,273)

135

625

4,541

18,877

21,966(6,582)

135

690

4,541

20,749loans
lease liabilities
Total- 56 -

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

Non-cash changes
As at 1 April
2020

Exchange
Cash flow

Change of scopeof consolidationdifferences ontranslation of

As at 31 March
2021

Othersforeign operations
7,806

(245)

－

162

－

7,723

Long-term bank
loans

2,289

6,483

－

417

－

9,190

lease liabilities

188,311(65,690)

1,219

5,649

41,016

170,505

198,406(59,452)

1,219

6,228

41,016

187,417

Short-term bank
loans

Total

- 57 -

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

(Millions of Yen)

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

As at 31 March 2020

As at 31 March 2021

As at 31 March 2021

7,036
(3,889)7,575(4,399)68,421(39,731)

3,147
56

3,176
65

28,690
587

3,203

3,241

29,277

3,203
－

3,248
7

29,342
65

Present value of funded defined benefit obligation
Fair value of plan assets
Total
Effect of changes to the asset ceiling
Net liability arising from defined benefit plansobligations
Balance in the consolidated statement of financial
position
Liability
Asset (Other non-current assets)- 58 -

Amounts recognised in the consolidated statement of comprehensive income in respect of these defined benefit plans are as follows:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S. Dollars

For the year ended

For the year ended

For the year ended

31 March 2020

31 March 2021

31 March 2021

(Note 2))Service cost
Current service cost

1,192

572

5,170

Past service cost
Net interest expense

(274)
47

274
59

2,479
534

Components of defined benefit costs
recognised in profit or loss

966

906

8,183

Return on plan assets
Actuarial gains and losses arising from

81
(24)

(178)
(59)

(1,605)(530)

changes in demographic assumptions
Actuarial gains and losses arising from

(105)

178

1,612

changes in financial assumptions
Actuarial gains and losses arising from

102

(219)

(1,975)experience adjustments
Adjustments for restrictions on the

(5)

(4)

(33)

defined benefit asset
Components of defined benefit costs

50

(280)

(2,531)

1,015

626

5,651

Remeasurement of net defined benefit
liability

recognised in other comprehensive
income
Total

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

(Millions of Yen)

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

For the year ended
31 March 2021

For the year ended
31 March 2021

Beginning balance

6,610

7,036

63,553Current service cost
Interest cost

1,192
116

572
129

5,170
1,167

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

(24)

(59)

(530)

changes in demographic assumptions
Actuarial gains and losses arising from

(105)

178

1,612

changes in financial assumptions
Actuarial gains and losses arising from

102

(219)

(1,975)experience adjustments
Past service cost

(274)

274

2,479

Decrease due to settlements
Benefits paid

(12)
(190)

(151)
(882)

(1,361)(7,967)

Effect of foreign currency exchange
differences

(380)

694

6,273

Ending balance

7,036

7,575

68,421- 59 -

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

(Millions of Yen)

(Thousands of U.S. Dollars

For the year ended

For the year ended

For the year ended

31 March 2020

31 March 2020

31 March 2021

(Note 2))Beginning balance

3,907

3,889

35,129Interest income

69

75

678

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

(81)

178

1,605

included in net interest expense)
Contributions from the employer

283

329

2,971

Benefits paid
Effect of foreign currency exchange

(212)
(76)

(580)
508

(5,240)4,587

differences
Ending balance

3,889

4,399

39,731

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

(Millions of Yen)

(Thousands of U.S. Dollars

For the year ended
31 March 2020

For the year ended
31 March 2021

For the year ended
31 March 2021

(Note 2))Beginning balance

66

56

504

Interest cost

－

5

45

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

(5)

(4)

(33)

differences
Ending balance

(6)

8

70

56

65

587

Remeasurement gain (loss)

The fair values of major categories of plan assets as at 31 March 2020 and 2021, are as follows:(Millions of Yen)

(Millions of Yen)

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

As at 31 March 2021

As at 31 March 2021

Cash and cash equivalents

1,240

1,481

13,375Equity instruments - Foreign equity
instruments

1,768

1,402

12,662

Debt instruments - Foreign governmental
bonds

167

5

44

Debt instruments - Foreign bonds
Others

688
25

765
746

6,909
6,741

3,889

4,399

39,731Total

The fair values of financial instruments are measured at quoted market price in active markets. No transferable instrument is includedin plan assets.
The principal assumptions used for the purposes of the actuarial valuations were as follows:
As at 31 March 2020
Discount rate

As at 31 March 2021
2.4%

2.2%

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

- 60 -

(2) Defined contribution plans
The total expense recognised was 2,371 million yen and 2,414 million yen (21,805 thousand U.S. dollars) for the years ended 31
March 2020 and 2021 for each period.
(3) Severance payments
Under certain circumstances (such as retirement before the predetermined retirement date), additional payments are made uponretirement. The total expense recognised was 1,770 million yen and 3,696 million yen (33,386 thousand U.S. dollars) for the years
ended 31 March 2020 and 2021 for each period.

- 61 -

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

(Millions of Yen)

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

As at 31 March 2021

As at 31 March 2021

Asset retirement obligation

2,559

2,604

23,519Warranties provision

1,214

1,144

10,333

3,773

3,748

33,852Total
Non-current liabilities

2,539

2,587

23,369Current liabilities

1,234

1,161

10,482An analysis of the change in provisions is as follows:(Millions of Yen)
Asset retirement obligation

Warranties provision

Total

Balance at 1 April 2020

2,559

1,214

3,773

Provision for the year

32

904

Acquisitions through business combinations
Interest cost associated with passage of time

10
17

872
－
－

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

(45)
30

(977)
35

(1,022)
65

Balance at 31 March 2021

2,604

1,144

3,748

10
17

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

Warranties provision

Total

Balance at 1 April 2020

23,113

10,96834,080

Provision for the year
Acquisitions through business combinations

291
94

7,873
－

8,164
94

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

158
(408)

－

158
(9,230)Effect of foreign currency exchange differences

272

314

586

23,51910,33333,852

Balance at 31 March 2021

(8,821)

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

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

(Millions of Yen)

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

As at 31 March 2021

As at 31 March 2021

Accounts payable

31,29631,893

288,073

Notes payable, trade
Processing cost payable

5,943
830

6,159
876

55,628
7,916

Other payables
Notes payable for capital investment

23,968858

18,105321

163,538
2,897

Total

62,89557,354

518,052

Trade notes payable are due 120 days on average.
Accounts payable are due 30 to 60 days from the invoice date in Asia except for Japan, and due 90 to 120 days from the invoice datein Japan. Accounts payable in Europe and U.S.A. are mainly payables related to intragroup transactions; thus, upon consolidation,these trade accounts payable are eliminated. The Group arranges cash pooling for Japan, Europe and U.S.A. to ensure that all payables
are paid within the agreed-upon credit terms.
- 62 -

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

Number of issued

Number of

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

CapitalShare capital

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

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

Balance at
1 April 2019

1,250,519,400

381,436,420

379,967,603

6,264

15,89956,582

143,606－

3,085,200

4,967,819

－

－

－

－

31 March 2020

1,250,519,400

378,351,220

374,999,784

6,264

15,89956,582

143,606

Decrease (i), (ii)－

5,518,000

5,693,985

－

－

－

－

1,250,519,400

372,833,220

369,305,799

6,264

15,89956,582

143,606

Decrease (i), (ii)
Balance atBalance at
31 March 2021

Note:(i) Decrease in number of issued shares is due to cancellation of treasury shares.
(ii) Increase or decrease in number of outstanding shares is due to increase or decrease in treasury shares.
(2) Treasury shares and other capital reserves① Treasury shares
Numbers of shares

Amount(Millions of Yen)

Balance at 1 April 2019

1,468,817

8,319

Repurchase of treasury shares
Cancellation of treasury shares

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

44,256(22,308)

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

519(328,400)

5(2,309)Balance at 31 March 2020

3,351,436

27,963

Repurchase of treasury shares
Cancellation of treasury shares

6,015,800(5,518,000)

76,664(57,762)

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

585(322,400)

7(3,312)

Balance at 31 March 2021

3,527,421

43,560
AmountNumbers of shares(Thousands of U.S. Dollars(Note 2))

Balance at 31 March 2020

3,351,436

252,582

Repurchase of treasury shares
Cancellation of treasury shares

6,015,800(5,518,000)

692,473(521,743)

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

585(322,400)

62(29,912)

Balance at 31 March 2021

3,527,421

393,462- 63 -

② Other capital reserves
Gain (loss) on

Balance at 1 April 2019

disposal of treasury
sharesStock option (i)Others

Total(Millions of Yen)

(Millions of Yen)

(Millions of Yen)

(Millions of Yen)

(9,272)

2,940(1,102)(7,434)(22)－

Repurchase of treasury shares－－

Disposal of treasury shares
Share-based payments (i)

(771)
－
－

(261)
125
－

(65)

(65)

(10,043)

2,804(1,189)(8,428)(4)－

Change in non-controlling interests (ii)
Balance at 31 March 2020
Repurchase of treasury shares－－

Disposal of treasury shares
Share-based payments (i)(1,731)
－

(276)
86

Balance at 31 March 2021

(11,774)2,614

Gain (loss) on
disposal of treasury(22)(1,032)
125

－

(4)

－

(2,007)86(1,194)(10,354)

Stock option (i)Others

Total(Thousands of U.S.

(Thousands of U.S.

(Thousands of U.S.

(Thousands of U.S.

Dollars (Note 2))

Dollars (Note 2))

Dollars (Note 2))

Dollars (Note 2))(90,713)

25,327(10,741)(76,127)－－

Disposal of treasury shares
Share-based payments (i)(15,637)－(2,495)
778

(40)
－
－

(18,132)
778

Balance at 31 March 2021

(106,350)

23,610(10,781)(93,520)

sharesBalance at 31 March 2020
Repurchase of treasury shares(40)(i) Refer to Note 22 “Share-based payments” for details of share-based payments (stock option).
(ii) The Group acquired 5.0% of outstanding shares in HOYA LENS GUANGZHOU LTD. As a result, the ownership interest of theGroup increased to 100%. 65 million yen, which is the difference between the decrease of non-controlling interests (i.e., proportional
interests of the carrying amount of the net assets) and the consideration paid for the shares, is included in ‘Other capital reserves’ inthe consolidated statement of financial position.
(3) Retained earnings and dividends
Amount(Millions of Yen)
Balance at 1 April 2019

617,459

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

533
114,406

Cancellation of treasury shares
Dividends(22,308)(34,064)

Transfer to retained earnings from other comprehensive income

32

Balance at 31 March 2020

676,058

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

125,446

Cancellation of treasury shares
Dividends(57,762)(33,741)

Transfer to retained earnings from other comprehensive income
Balance at 31 March 2021

274
710,274- 64 -

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

6,106,567

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

1,133,102(521,743)

Dividends
Transfer to retained earnings from other comprehensive income(304,770)
2,472

Balance at 31 March 2021

6,415,628

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

share
(Yen)

Dividends per
share(U.S. Dollars

Total dividends(Note 2))

(Millions of
Yen)

Total dividends(Thousands of
U.S. Dollars

Record date

Effective date

(Note 2))23 May 2019

45

0.41

17,099154,444

31 March 20193 June 201929 October 2019

45

0.41

16,966

153,246

30 September 201929 November 201920 May 2020

45

0.41

16,875

152,425

31 March 2020

8 June 2020

27 October 2020

45

0.41

16,866

152,345

30 September 2020

30 November 2020

28 May 2021

45

0.41

16,619150,11131 March 2021

1 June 2021

Dividends payable are included in the line item ‘Other short-term financial liabilities’ in the consolidated statement of financial
position.
(4) Non-controlling interests
Amount(Millions of Yen)
Balance at 1 April 2019

4,552

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

181
(220)

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

187
(84)

Put option granted to non-controlling interests, etc.(i)(20,392)

Balance at 31 March 2020

(15,777)

Profit for the year, attributable to non-controlling interests(225)

Other comprehensive income

413

Balance at 31 March 2021

(15,589)
Amount(Thousands of U.S. Dollars (Note 2))

Balance at 31 March 2020

(142,506)

Profit for the year, attributable to non-controlling interests
Other comprehensive income(2,034)
3,735

Balance at 31 March 2021

(140,805)(i) The Group recognised a financial liability at the present value of the expected future payment for the acquisition of additional
shares of the joint venture based on the contract with the non-controlling shareholder.

- 65 -

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

(Millions of Yen)

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

As at

As at

As at

31 March 2020

31 March 2021

31 March 2021

Interest-bearing debt
Less: Cash and cash equivalents

21,966
317,982

20,749334,897

187,417
3,024,991

Net debt(296,016)(314,148)(2,837,574)

Equity629,265

672,412

6,073,631

In order to maximise the corporate value of the Group, cash flows have been a priority of the Group management. As at 31 March
2020 and 2021, the Group maintained cash and cash equivalent balances in excess of interest-bearing debt balances. The Group is not
subject to any externally imposed capital regulations as at 31 March 2021.
Details of interest-bearing debt and equity are described in Note 16 “Interest-bearing debt” and Note 20 “Share capital and other
equity items”, respectively.

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

- 66 -

(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 2020

31 March 2021

31 March 2021

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

103,339

117,251

1,059,079

Other financial assets (ii)

16,49016,760151,390

30,789317,982

39,141
334,897353,549
3,024,991

3,460
542

133
96

1,201
869

59,43557,221

516,852

21,966
26,20520,74924,376

187,417
220,176

FVTOCI financial assets (iv)
Other financial assets (ii)Cash and cash equivalents
Financial liabilities
FVTPL financial liabilities (v)Trade and other payables
Other financial liabilities (iii)
Financial liabilities measured at amortised cost
Trade and other payables
Interest-bearing debt
Other financial liabilities (iii)Note:(i) The items above are not included in discontinued operations and disposal groups held for sale. The Group does not have derivative
instruments designated as hedging instruments. Likewise, the Group does not have financial assets or financial liabilities using the fairvalue option.
(ii) Other financial assets are included in ‘Long-term financial assets’ or ‘Other short-term financial assets’ in the consolidated
statement of financial position.
(iii) Other financial liabilities are included in ‘Other long-term/short-term financial liabilities’ in the consolidated statement offinancial position.
(iv) FVTOCI financial assets mainly consist of unlisted shares.
(v) FVTPL financial liabilities mainly consist of contingent considerations resulting from business combinations.
(vi) Financial assets or liabilities to be offset as at 31 March 2020 and 2021, are immaterial.

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

- 67 -

(5) Market risk management
The Group is exposed to risks arising from changes in the economic environment and financial markets. The factors of the risk
relating to financial markets are fluctuation risk of foreign currency exchange rates, interest rates, and fair value of equity instruments.
① Foreign currency risk
1) Foreign currency risk management
As the Group’s businesses have expanded globally, foreign exchange fluctuations, in particular from the Thai Baht, the Euro and the
U.S. dollar, have a significant impact on the Group’s financial results. If the Japanese yen appreciates against these currencies, bothsales and profit stated in the Japanese yen might decrease even though sales and profits stated in local currencies have increased.
The Group intends to marry major currencies the Group uses (i.e., Euro, U.S. dollar and Yen) in settlements of receivables/payables
resulting from operating activities. Specifically, the subsidiaries that continuously conduct import or export transactions retain foreign
currencies obtained from exports of goods for payables on imported supplies. This enables the Group to mitigate foreign currency risk.
In contrast, as the Company has multiple SBUs and conducts its own finance and dividend payments to the Company’s shareholders,
and the holding companies under the Company receive dividends from their subsidiaries and distribute them to the Company and/or
other group companies, the Group’s foreign currency-dominated balances in receivables, liabilities and/or bank deposits may not fully
offset each other. This might cause significant gains or losses on foreign exchange differences when the Yen appreciates ordepreciates against the U.S. dollar or the Euro, or when the Euro appreciates or depreciates against the U.S. dollar.
2) Foreign currency sensitivity analysis
The chart below shows the impact on profit and equity of a 1% appreciation of the Yen against the Thai Baht, the Euro and the U.S.
dollar with the assumption that the exchange rates for other currencies are constant.
For the year ended 31 March 2020

For the year ended 31 March 2021

Average exchange rate
(Yen per each currency)
Thai Baht

3.51

3.42

120.85108.95124.07105.94

Thai Baht
Euro

(202)
(50)

(206)
(62)

U.S. dollar

(325)

(325)

Thai Baht
Euro

(294)
(380)

(340)
(319)

U.S. dollar

(581)

(527)

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

Impact on equity(Millions of Yen)

For the year ended 31 March 2021
Impact on profit for the year
(Thousands of U.S. Dollars (Note 2))
Thai Baht（1,858)Euro
U.S. dollar(561)(2,933)

Impact on equity(Thousands of U.S. Dollars (Note 2))
Thai Baht
Euro(3,075)(2,884)

U.S. dollar(4,763)- 68 -

Note:
Numbers in parentheses are the amounts of negative impact on profit and equity resulting from a 1% appreciation of the Yen. The
amounts above represent the impact on the consolidated financial statements of the Group resulting from foreign currency conversion
and not the impact on the Group’s cash flows or operations themselves.
Likewise, the tables below show the impact of a 1% appreciation of functional currencies of the Company and its holding company
within the Group on their receivables/liabilities and bank deposits denominated in foreign currencies on the assumption that exchange
rates for other currencies are constant. The information about the holding companies with immaterial risk is not included in the tables
below.
2)-1. Parent company (the Company)(Millions of Yen)Euro
31 March 2020

U.S. dollar
31 March 2021

31 March 2020

31 March 2021

Trade and other receivables
Trade and other payables

(28)
1

(22)
1

(74)
13

(79)
13

Short-term financial assets
Cash and cash equivalents

(0)
(3)

(0)
(3)

(0)
(51)

(0)
(39)

(29)

(23)

(113)

(105)

Total

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

U.S. dollar

31 March 2021

31 March 2021

Trade and other receivables

(195)

(710)

Trade and other payables
Short-term financial assets

12
(0)

118
(0)

Cash and cash equivalents

(25)

(356)

(207)

(948)

Total
Note:

Numbers in parentheses are the amounts of negative impact on profit and equity resulting from a 1% appreciation of the Yen. A 1%
depreciation of the Yen has a positive impact in the same amount.
Intercompany receivables/payables are included in the calculation of the impact as they cause foreign exchange gain or loss in theprocess of translation.
2)-2. Holding company (Europe)(Millions of Yen)
Yen
31 March 2020
Cash and cash equivalents
Total

U.S. dollar
31 March 2021

31 March 2020

31 March 2021

(0)

(0)

(35)

(1)

(0)

(0)

(35)

(1)

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

U.S. dollar

31 March 2021
Cash and cash equivalents
Total

31 March 2021
(0)

(7)

(0)

(7)

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

- 69 -

3) Currency derivatives
The Group’s policy prohibits the use of derivative instruments such as forward foreign exchange contracts, except in certain
circumstances in which the use of such derivatives is determined to be beneficial. In such case, the Group can enter into contracts
upon obtaining formal approval from the Chief Financial Officer (“CFO”) of the Group in accordance with its Group headquarters
approval process.
In order to economically hedge foreign currency exposures on intercompany receivables, payables and dividends, forward foreignexchange contracts are occasionally entered into. In these cases, the same approval policy as that stated above is adhered to.
Details of the forward foreign exchange contracts at the end of each reporting period are as follows:(Millions of Yen)

For the year ended
31 March 2020

Average
Foreignexchange rate currency (mil)Notional
amountFair value

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

For the year ended
31 March 2021

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

Notional
amountFair value

Forward foreign exchange contracts
N/A② Interest rate risk management
The Group’s cash and cash equivalents exceed the interest-bearing debt, and currently, the impact of interest expense on the Group’s
profit/loss is immaterial. Therefore, the Group considers the interest rate risk to be immaterial and has not performed sensitivity
analyses such as Basis Point Value.
③ Price risks management in equity instruments
The Group is exposed to equity price risks arising from equity instruments (i.e., listed shares). These investments are held from aviewpoint of business strategy, not for short-term trading purposes. The Group does not sell these investments frequently and theGroup periodically reviews the fair value of these instruments as well as the financial condition of investees.
The sensitivity analysis has been based on the exposure to the price of equity instruments (listed shares) at the end of the reporting
period. If equity prices increase or decrease by 5%, accumulated other comprehensive income (pre-tax) would change by 51 million
yen and 101 million yen (914 thousand U.S. dollars) as at 31 March 2020 and 2021 for each period as a result of changes in fair valueof the equity instruments.

- 70 -

(6) Credit risk management
Credit risk is the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Group. The Groupmanages its credit risk by setting credit limits that are approved by the authorised personnel of each SBU.
The main customers for the Information Technology business are globalised companies that have relatively large-scale and stablefinancial conditions. In contrast, credit losses were incurred on a sporadic basis in the Life Care business as those products were soldto relatively small and diversified customers, such as end consumers, retailers, and medical institutions. Accordingly, no significant
credit losses were incurred in the past. A division in the Life Care business that sells goods to medical institutions and operates
wholesale businesses in certain countries has some past-due receivables due to the financial conditions of those medical institutions or
customers. Credit limits have been set for those customers to minimise the loss from a failure to collect the receivables.
Trade receivables consist of a large number of customers across a diverse range of industries and geographical areas. The Group has
neither significant credit risk exposure for a specific customer or customer group categorised by similarity, nor concentration of credit
risk over 5% of total financial assets as at 31 March 2021.
The carrying amounts after impairment presented in the consolidated financial statements are the maximum exposure for the Group’s
credit risk without considering the appraised value of the related collateral.
The Group continuously monitors the financial status of customers that appear to represent a credit risk in collecting receivables,
including restructured receivables. Based on this monitoring, the Group sets the allowance for doubtful accounts considering thecollectability of the receivables.
Each financial asset should be recognised as a credit-impaired financial asset if the debtor claims legal proceedings such as
bankruptcy, company reorganization, civil rehabilitation and special liquidation in cases of overdue payments despite performance by
enforcement. The Group directly writes off an asset by reducing the total carrying amount in cases where collection of contractual
cashflow is not reasonably expected, entirely or partially.

- 71 -

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 2020
Total

Overdue amounts

Within due
dateWithin 30days

31 to 60 days 61 to 90 days

91 to 120

Over 120

days

days

Trade and other receivables(gross)Allowance for doubtful accounts

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

7,709
(154)

2,482
(135)

1,099
(105)

1,077
(262)

3,997
(1,682)

Trade and other receivables (net)103,339

89,312

7,555

2,347

994

815

2,316

Other financial assets (gross)
Allowance for doubtful accounts

16,889(399)

16,449
(2)

－
－

－
－

－
－

1
(1)

439
(396)

Other financial assets (net)16,49016,447

－

－

－

－

43

(Millions of Yen)
Balance at 31 March 2021
Total

Overdue amounts

Within due
dateWithin 30days

31 to 60 days 61 to 90 days

91 to 120

Over 120

days

days

Trade and other receivables(gross)Allowance for doubtful accounts

120,048(2,797)

106,991
(414)

6,022
(33)

1,857
(73)

1,501
(86)

981
(326)

2,696
(1,866)

Trade and other receivables (net)117,251

106,578

5,989

1,784

1,415

655

830

Other financial assets (gross)
Allowance for doubtful accounts

17,129(369)

16,751
－

6
－

－
－

－
－

－
－

372
(369)

Other financial assets (net)

16,76016,751

6

－

－

－

4

(Thousands of U.S. Dollars (Note 2))
Balance at 31 March 2021

Overdue amounts

Total

Within due
date(gross)Allowance for doubtful accounts

1,084,345(25,266)

966,409(3,736)54,391(296)

16,770(658)

13,559(776)

8,865(2,947)

24,351(16,853)

Trade and other receivables (net)1,059,079

962,673

54,095

16,111

12,783

5,918

7,499

Other financial assets (gross)
Allowance for doubtful accounts

154,722(3,332)

151,304
－

53
－

－
－

－
－

－
－

3,364
(3,332)Other financial assets (net)151,390

151,304

53

－

－

－

32

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

Over 120days

Trade and other receivables

The Group does not hold any collateral or other credit enhancements on the above financial assets, excluding the following:
As at 31 March 2020
Loans to subsidiaries and affiliates of 8,454 million yen
As at 31 March 2021
Loans to subsidiaries and affiliates of 8,668 million yen (78,293 thousand U.S. dollars)
Details of collaterals are described in Note 30 “Related party disclosures”.

- 72 -

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

Loss allowance at an amount equal tolifetime expected credit losses

Total

an amountequal to 12-

Non-creditimpaired

Creditimpaired

Trade and
other

month
expectedfinancialassetsfinancialassetsreceivables

credit losses
Balance at 1 April 2019

－

219

509

3,061

3,790

Provision for the year

－

－

6

626

632

Reduction resulting from settlement for the year

－

(185)

(70)

(495)

(751)

Reduction for the year (reversal)

－

－

(70)

(133)

(203)

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

－

(7)

(3)

(203)

(214)

Balance at 31 March 2020

－

27

372

2,855

3,255

(Millions of Yen)
Loss
allowance at
an amountequal to 12month
expected

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

Credit-Trade and

impairedfinancial

impairedfinancialotherreceivables

assetsassetsTotalcredit losses
Balance at 1 April 2020

－

27

372

2,855

3,255

Provision for the year

－

－

4

490

494

Reduction resulting from settlement for the year

－

－

(33)

(486)

(519)

Reduction for the year (reversal)

－

(2)

(3)

(239)

(244)

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

－

2

1

177

180

Balance at 31 March 2021

－

28

341

2,797

3,166

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

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

equal to 12month
expected
credit losses

Non-credit-

Credit-Trade and

impairedfinancial

impairedfinancialotherreceivables

assetsassetsBalance at 1 April 2020－

246

Provision for the year

－

－

38

4,427

4,465

Reduction resulting from settlement for the year

－

－

(297)

(4,389)(4,686)

Reduction for the year (reversal)

－

(19)

(26)

(2,160)(2,205)

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

－

22

6

1,599

1,626

Balance at 31 March 2021

－

249

3,083

25,26628,599- 73 -

3,362

25,790Total

29,398

(7) Liquidity risk management
The ultimate responsibility for liquidity risk management rests with the CFO of the Group who is appointed by the board of directors.
Based on the instructions from the CFO, the financial headquarters of the Group mainly manages the Group’s liquidity risk by
maintaining an appropriate level of retained earnings and credit facilities, and monitors the actual cash flows and forecasted cash
flows. The credit lines for commercial paper are secured for temporary cash shortages due to dividends or bonus payments.
The following table details the contractual maturity of its financial liabilities, including derivative financial instruments but
excluding guarantee liabilities:(Millions of Yen)
Balance at 31 March 2020

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

year

years

Trade and other payables
Long-term bank loans (excluding

62,895234

62,895234

62,895
－

－

－

－

－

－

38

19

19

19

140

current portion)
Current portion of long-term bank

19

19

19

－

－

－

－

－

864
－

Non-derivative liabilities

loans
Short-term bank loans

864

864

Long-term lease liabilities
Short-term lease liabilities

14,2376,610

14,9096,610

Other financial liabilities

26,74629,709111,607

115,242

Total

－

－

－

－

－

6,610

5,170
－

3,398
－

2,169
－

2,863
－

2,824

2,922

522

4,125

1,309
－
－

19,31873,212

8,129

3,939

6,312

1,328

22,321(Millions of Yen)
Balance at 31 March 2021

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

year

Trade and other payables
Long-term bank loans

57,354
1,017

57,354
1,231

57,35445

Short-term bank loans
Long-term lease liabilities

855
12,239865
12,874865－

Short-term lease liabilities
Other financial liabilities

6,638
24,472

6,638
27,178

6,638
2,598

102,574

106,140

67,499years

Non-derivative liabilities

Total

－

－

－

－

－

67
－

200
－

40
－

40
－

839
－

4,992
－

2,847
－
4,194

908
－
－

2,442
－

735

1,685
－
－

19,651

5,795

7,240

1,725

948

22,932(Thousands of U.S. Dollars (Note 2))
Balance at 31 March 2021
Non-derivative liabilities
Trade and other payables

Carrying Contractual Less than 1 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years More than 5amount cash flows
year
years
518,052

518,052

518,052

－

－

－

－

－

9,190
7,723

11,123
7,811

610
－

1,803
－

362
－

358
－

7,580
－

Long-term lease liabilities
Short-term lease liabilities

110,549
59,955116,287
59,955410
7,811－
59,95545,093－25,714－

15,221－

8,204－

22,056－

Other financial liabilities

221,045

245,490

23,466

6,643

37,880－－177,502926,515

958,720

609,694

52,34565,397

15,583

8,562

207,139

Long-term bank loans
Short-term bank loans

Total- 74 -

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

(Millions of Yen)

(Thousands of U.S. Dollars

As at 31 March 2020

As at 31 March 2021

As at 31 March 2021

(Note 2))
Bank overdraft
Used
Unused
Total

－

－

－

65,00085,000767,772

65,00085,000767,772

Commercial paper
Used
Unused
Total

－

－

－

50,00050,000451,630

50,00050,000451,630- 75 -

(8) Fair value of financial assets and liabilities that are measured at fair value on a recurring basis
The following table provides an analysis of financial instruments that have been measured at fair value subsequent to initialrecognition.
The fair values are categorised into Levels 1 to 3.
Level 1: Fair value derived from quoted prices in active markets for identical assets or liabilities.
Level 2: Fair value derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (i.e., as prices) or indirectly (i.e., derived from prices).
Level 3: Fair value derived from inputs for the asset or liability that are not based on observable market data (i.e., unobservable
inputs).
· FVTOCI financial assets classified as Level 3 mainly consist of unlisted shares and are measured using valuation techniquessuch as net asset approach, discount cash flow method or comparable company method.
· FVTPL financial liabilities classified as Level 3 consist of contingent considerations and are measured based on theachievement of milestones considering time value of money.
① Financial instruments that are measured at fair value(Millions of Yen)
As at 31 March 2020

Level 1

Level 2

Level 3Total

FVTOCI financial assets

1,028

－

29,76130,789

Total

1,028

－

29,76130,789FVTPL financial liabilities

－

－

4,001

4,001

Total

－

－

4,001

4,001
(Millions of Yen)

As at 31 March 2021

Level 1

Level 2

Level 3Total

FVTOCI financial assets

2,024

－

37,117

39,141

Total

2,024

－

37,117

39,141FVTPL financial liabilities

－

－

229

229

Total

－

－

229

229

(Thousands of U.S. Dollars (Note 2))
As at 31 March 2021

Level 1

Level 2

Level 3Total

FVTOCI financial assets

18,286－335,263353,549

Total

18,286－335,263353,549

FVTPL financial liabilities

－

－

2,069

2,069

Total

－

－

2,069

2,069

Note:
As at 31 March 2020
No transfers occurred between Levels 1, 2 and 3 during the year ended 31 March 2020.
As at 31 March 2021
No transfers occurred between Levels 1, 2 and 3 during the year ended 31 March 2021.

- 76 -

② Reconciliation of financial assets categorised at Level 3 from beginning balance to ending balance(Millions of Yen)
For the year ended
31 March 2020

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

FVTPL financial liabilities

Opening balance

28,364

Total gains or losses recognised:

1,753
－

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

4,268
3
96
(92)
－

1,753

Purchase
Increase

0
－

Sale

20
－

Settlement

(357)
－

(289)

Closing balance

29,761

4,001(Millions of Yen)

For the year ended
31 March 2021

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

FVTPL financial liabilities

Opening balance

29,761

4,001

Total gains or losses recognised:

7,356
－

(3,456)(3,440)

Settlement

7,356
－

(16)
(316)

Closing balance

37,117229- in profit or loss (i)- in other comprehensive income (i)(Thousands of U.S. Dollars (Note 2))
For the year ended
31 March 2021

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

FVTPL financial liabilities

Opening balance

268,819

36,143

Total gains or losses recognised:

66,445－(31,216)(31,069)

Settlement

66,445－(148)(2,858)

Closing balance

335,2632,069- in profit or loss (i)- in other comprehensive income (i)Note:
As at 31 March 2020(i) Total gains or losses included in profit or loss are included in the line item ‘Finance costs’ in the consolidated statement ofcomprehensive income.
In total gains or losses included in other comprehensive income, gains or losses related to FVTOCI assets are included in ‘Financial
assets measured at fair value through other comprehensive income’ or ‘Exchange differences on translation of foreign operations’ inthe consolidated statement of comprehensive income. Gains or losses related to FVTPL liabilities are included in ‘Exchange
differences on translation of foreign operations’ in the consolidated statement of comprehensive income.
As at 31 March 2021
(i) In total gains or losses included in profit or loss, the difference by settlement of the contingent consideration arising from businesscombination is recorded at 3,442 million yen (31,091 thousand U.S. dollars). It is included in the line item ‘Other income’ in the
consolidated statement of comprehensive income. Gains or losses due to changes in the fair value is included in ‘Finance costs’ in the
consolidated statement of comprehensive income.
In total gains or losses included in other comprehensive income, gains or losses related to FVTOCI assets are included in ‘Financial
assets measured at fair value through other comprehensive income’ or ‘Exchange differences on translation of foreign operations’ inthe consolidated statement of comprehensive income. Gains or losses related to FVTPL liabilities are included in ‘Exchange
differences on translation of foreign operations’ in the consolidated statement of comprehensive income.

- 77 -

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

(Millions of Yen)

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

As at 31 March 2021

As at 31 March 2021

Carrying
amountFair value

Carrying
amountFair value

Carrying
amountFair value

Long-term loans to subsidiaries and affiliates(excluding current portion)

8,454

8,742

6,004

6,080

54,22954,922

Lease deposits

5,304

5,304

5,351

5,351

48,331

48,331

Total

13,75814,046

11,354

11,431

102,560

103,253

234

243

995

1,018

8,986

9,192

2,974
－

768

768

6,939

6,935

Long-term other payables

2,989
－

21,01020,772

189,772

187,625

Total

3,224

3,217

22,77322,557

205,697

203,752

AssetsFinancial assets measured at amortised cost

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

② Fair value hierarchy
Level 1: Fair value derived from quoted prices in active markets for identical assets or liabilities.
Level 2: Fair value derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (i.e., as prices) or indirectly (i.e., derived from prices).
· Fair value of long-term loans to subsidiaries and affiliates and lease deposits are measured by the present value of future cash
flows of each loan categorised according to a certain range of term and discounted by the risk-free rate, etc.
· Fair value of interest-bearing debt, long-term guarantee deposits and long-term other payables is measured by the present
value of future cash flows of each debt categorised according to a certain range of term, and discounted by the interest rate thatreflects the remaining period to the maturity and credit risk.
Level 3: Fair value derived from inputs for the asset or liability that are not based on observable market data (unobservable inputs).
(Millions of Yen)
As at 31 March 2020

Level 1

Level 2

Level 3

Total

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

－
－

8,742
5,304

－

Lease deposits

－

8,742
5,304

Total

－

14,046－

14,046

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

－

243

－

243

Long-term guarantee deposits

－

2,974

－

2,974

Total

－

3,217

－

3,217

Liabilities(Millions of Yen)
As at 31 March 2021

Level 1

Level 2

Level 3

Total

AssetsFinancial assets measured at amortised cost
Long-term loans to subsidiaries and affiliates(excluding current portion)

－

6,080

－

6,080

Lease deposits

－

5,351

－

5,351

Total

－

11,431－

11,431Long-term bank loans (excluding current portion)
Long-term guarantee deposits

－

1,018

－

1,018

－

768

－

768

Long-term other payables－

20,772－

20,772

Total－

22,557－22,557

Liabilities
Financial liabilities measured at amortised cost(Thousands of U.S. Dollars (Note 2))
As at 31 March 2021

Level 1

Level 2

Level 3

Total

AssetsFinancial assets measured at amortised cost
Long-term loans to subsidiaries and affiliates(excluding current portion)－

54,922－

54,922

Lease deposits－

48,331－

48,331

Total－

103,253－

103,253

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

－

9,192

－

9,192

Long-term guarantee deposits

－

6,935

－

6,935

Long-term other payables－

187,625－

187,625

Total－

203,752－

203,752

Liabilities- 79 -

22. Share-based payments
The Company has a performance-based stock compensation plan (Performance Share Unit), a phantom stock option plan and a stock
option plan. The purpose of the plans is to increase the value of the Group and to improve the financial results of the Group by
motivating members such as directors, officers, employees of the Group, as well as to retain valuable employees.
(1) Performance Share Unit
① Details of transactions
The Company has adopted Performance Share Unit (PSU) for officers instead of a stock option plan since the year ended 31 March
2020. The variable number of shares will be distributed to the granted officers based on the achievement of pre-determined
performance goal during the three years subsequent to the grant date. The number of distributed shares is variable from 0% to 200%
based on the achievement of the performance goal that consists of consolidated sales, earnings per share (EPS) and ROE.
PSU granted to officers are accounted for as cash-settled share-based payment transactions. Expense recorded in the consolidated
statement of comprehensive income from undertaking shared-based payment transactions was 31 million yen and 81 million yen (732thousand U.S. dollars) for the year ended 31 March 2020 and 2021 for each period.
Details of PSU that are outstanding for the year ended 31 March 2020 and 2021, are as follows:No.

Number of shares

Grant date

Fair value at grant date
(Yen)

1

15,5001 July 2019

8,045

2

11,4001 July 2020

10,260② Determination of fair value
The fair value of the PSU granted during the years ended 31 March 2020 and 2021, was 8,045 yen and 10,260 yen and wasdetermined based on the Company's share price of the grant day for each period.
(2) Phantom Stock Option Plan
① Details of transactions
Phantom Stock Option (PSO) is granted to eligible individuals chosen from those who have been employed or are newly hired by theGroup on the condition that they render services over the vesting period, that is, subsequent to the grant date, if a member terminates
his or her employment prior to the vesting date, the options will expire. The exercise period of the options is the period determinedwhen each option is granted. The options not exercised within this exercise period will expire.
PSO granted to eligible grantees are accounted for as cash-settled share-based payment transactions. Expense recorded in the
consolidated statement of comprehensive income from undertaking shared-based payment transactions was 251 million yen (2,266
thousand U.S. dollars) for the year ended 31 March 2021.
Details of PSO that are outstanding for the year ended 31 March 2021, are as follows:No.

Number of shares

Grant date

Fair value at grant date
(Yen)

1

107,600

1 October 2020

5,930

2

4,500

1 January 2021

7,135

② Determination of fair value
The weighted-average fair value of the PSO granted during the years ended 31 March 2021, was 5,978 yen. The fair values of theoptions were determined based on the Company's share prices of the grant days.
(3) Stock Option Plan
① Details of transactions
After the details and eligible members are approved at the meeting of the board of directors, options are granted to individuals on thecondition that they render services over the vesting period, that is, subsequent to the grant date, if a member terminates his or her
employment prior to the vesting date, the options will expire. The exercise period of the options is the period determined in each
option contract. The options not exercised within this exercise period will expire. The option contract includes a clause that limits the
maximum number of stock options a member can exercise each year during the exercisable periods.
Stock options granted to members are accounted for as share-settled share-based payment transactions. Expense recorded in the
consolidated statement of comprehensive income from undertaking shared-based payment transactions was 125 million yen and 86
million yen (778 thousand U.S. dollars) for the years ended 31 March 2020 and 2021, for each period.
- 80 -

Details of the stock options that are outstanding for the years ended 31 March 2020 and 2021, are as follows
No.

Number of shares

Grant date

Expiry date

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

11

1,225,600

7 December 2010

30 September 2020

1,947

465

12
13

680,800
560,800

17 January 201216 January 2013

30 September 2021
30 September 2022

1,616
1,648

357
427

14
15

758,800
582,400

15 January 201414 January 2015

30 September 2023
30 September 2024

2,846
3,972.5

785
896

16
17

460,400
386,800

13 January 201617 January 201730 September 2025
30 September 2026

4,928
4,839

852
935

18
19

40,400123,600

13 February 2018
2 October 2018

30 September 2027
30 September 2028

5,765
6,590

1,002
1,586

20
21

20,00024,000

13 August 201911 August 2020

30 September 2029
30 September 2030

8,542
10,490

1,911
2,477

② Determination of stock option value
The weighted-average fair value of the stock options granted during the years ended 31 March 2020 and 2021, was 1,911 yen and
2,477 yen for each period.
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 2020 and 2021.
Expected volatility was determined based on recent historical daily share price volatility from the grant date to the forecasted
remaining period.
No. 20Share price at grant date (Yen)
Exercise price (Yen)
Expected volatility
Expected remaining option life (Years)
Dividends yield
Risk free rate

No. 21

8,515

10,2508,542
27.69%

10,49028.98%

6.4
1.06

6.4
0.88

(0.35%)(0.09%)③ The number and weighted-average exercise prices of stock options
The weighted-average exercise price of the outstanding options was 4,078 yen and 4,600 yen as at the years ended 31 March 2020 and
2021 for each period. Weighted-average remaining contractual life was 4.8 years and 4.6 years as at 31 March 2020 and 2021 for eachperiod.
For the year ended 31 March 2020

For the year ended 31 March 2021

Weighted-average
Number of shares

exercise price(Yen)

Weighted-average
Number of shares

exercise price(Yen)

1,510,000

3,911

1,098,000

4,078

20,000

8,542

24,00010,490Forfeited (i)(31,200)

5,184(12,000)

3,901

Exercised(328,400)

3,888(322,400)

4,045

Expired(72,400)

2,215(92,000)

1,947

Outstanding at the end of the period

1,098,000

4,078

695,600

4,600

Exercisable at the end of the period

890,600

3,623

587,700

4,038

Outstanding at the beginning of the period
GrantedNote:(i) Stock options forfeited were due to employee retirements.

- 81 -

Stock options exercised during the year ended 31 March 2020, were as follows:No.

Number of shares exercised

Exercise period

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

11

10,400

May 2020 to September 2020

10,400121314,800800

April 2020 to January 2021
August 2020 to September 2020

11,740
10,39814
15

90,00039,600April 2020 to March 2021
June 2020 to February 2021

12,56812,19016
1771,60075,600

May 2020 to March 2021
June 2020 to March 2021

12,11912,146

18
18

8,800
8,400

August 2020 to November 2020
August 2020 to November 2020

11,73012,22418

2,400

November 2020 to November 2020

12,420

Total

322,400

12,176Note:
The number of shares exercised and the amount paid by key management personnel are 120,800 shares and 494 million yen.
Stock options exercised during the year ended 31 March 2021, were as follows:No.

Number of shares exercised

Exercise period

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

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

7,936
8,181

12
13

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

8,080
8,393

14
15

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

8,093
8,074

16
17

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

8,077
8,039

18
19

9,200
6,400

May 2019 to November 2019
November 2019 to February 2020

8,169
8,730

Total

328,400

Note:
The number of shares exercised and the amount paid by key management personnel are 80,000 shares and 286 million yen.

- 82 -

23. Revenue(1) Disaggregation of revenue
The relationship between the major geographical areas and the Group’s revenue from continuing operations from its major products
and services for the year ended 31 March 2020 and 2021 is as follows:(Millions of Yen)
For the year ended 31 March 2020

Japan

Asia

Americas

EuropeOthers

Total

Life Care
Health Care related products

113,541

27,10964,516

68,392

4,240

Medical related products

20,647

13,525

Life Care total

134,188

40,633

Electronics related products

17,068

Imaging related products

8,845

Information Technology total

277,798

22,16037,8193,101

97,251

86,676106,2107,341

375,049

134,515

9,002

2,071

1

162,655

23,696

937

597

1

34,07625,913

158,211

9,939

2,667

1

196,731

2,944

561

579

683

-

4,766

163,045

199,405

97,194

109,561

7,343

576,546

Information Technology

Other
Total revenue from externalcustomers(Millions of Yen)
For the year ended 31 March 2021

Japan

Asia

Americas

EuropeOthers

Total

Life Care
Health Care related products

102,191

27,40851,74066,668

3,619

Medical related products

18,59014,658Life Care total

120,781

42,066

14,367

145,678

251,626

17,46837,457

2,002

90,17569,208104,125

5,621

341,801

9,573

2,269

0

171,887

Information Technology
Electronics related products
Imaging related products

6,677

21,200

710

490

1

29,078

Information Technology total

21,043

166,878

10,2832,759

2200,965

2,855

617

658

1,024

－

5,154

144,680

209,560

80,150107,909

5,623

547,921

Other
Total revenue from externalcustomers(Thousands of U.S. Dollars (Note 2))
For the year ended 31 March 2021

Japan

Asia

Americas

EuropeOthersTotal

923,050

247,565

467,351

602,184

32,685

Medical related products

167,917

132,400

157,780

338,336

18,085814,518

Life Care total

1,090,967

379,965

625,130

940,520

50,7703,087,352

129,770

1,315,853

86,46820,494

3

1,552,588

Life Care
Health Care related products

2,272,835

Information Technology
Electronics related products
Imaging related products

60,307

191,489

6,416

4,429

13

262,654

Information Technology total

190,077

1,507,341

92,88424,92316

1,815,241

Other
Total revenue from externalcustomers

25,790

5,569

5,947

9,252

－

46,5581,306,834

1,892,875

723,962

974,695

50,786

4,949,152

Note:Geographical areas are based on the location of the customers.
- 83 -

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

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))As at 31 March 2020
Receivables from contracts
with customers
Contract liabilities

As at 31 March 2021

As at 31 March 2021

100,262

113,856

1,028,416

2,904

3,509

31,695

Note:
Revenues recognised in the years ended 31 March 2020 and 2021 that were included in the contract liability balances as at 1 April
2019 and 2020 were 1,710 million yen and 1,183 million yen (10,687 thousand U.S. dollars) for each period.
(3) Transaction price allocated to the remaining performance obligations
The Group uses the practical expedient of omitting the disclosure of information on the remaining performance obligations because it
has no significant transactions with individual expected contractual terms exceeding one year. In addition, no significant financing
components are included in consideration from contracts with customers.
(4) Assets recognised from the costs to obtain a contract with a customer
If the amortisation period of the assets is one year or less, the Group uses the practical expedient of recognising the incremental costsof obtaining the contract as an expense when incurred.

- 84 -

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

(Millions of Yen)

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

For the year ended
31 March 2021

For the year ended
31 March 2021

Commission

377

85

764

Rent
Government grants

130
423

89
92

803
834

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

438

3,286

29,684

92
1,003

71
4,517

639
40,796

2,463

8,139

73,520Insurance proceeds
Others (Note)
Total other income

Note:
The difference by settlement of the contingent consideration arising from business combination is recorded at 3,442 million yen(31,091 thousand U.S. dollars).
(2) R&D expenses recognised as incurred(Millions of Yen)

(Millions of Yen)

(Thousands of U.S. Dollars

For the year ended
31 March 2020

For the year ended
31 March 2021

For the year ended
31 March 2021

(Note 2))

Employee benefits expense
Depreciation and amortisation

10,053
2,743

9,081
3,477

82,02831,405

Commission expenses
Other expenses

3,423
10,633

3,178
7,520

28,70467,928

Total R&D expenses recognised as incurred

26,851

23,256210,066

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

- 85 -

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

Salary, bonuses and others(Millions of Yen)

(Millions of Yen)

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

For the year ended

For the year ended

31 March 2020

31 March 2021

31 March 2021

122,370

107,607971,974

918

847

7,649

2,371

2,414

21,805

3,290

3,261

29,453Retirement benefit
Defined benefit
Defined contribution
Retirement benefit total
Share-based payments

157

418

3,776

Severance payments
Others

1,770
6,147

3,696
5,022

33,38645,362

133,734

120,004

1,083,952

Total employee benefits expense(4) Foreign exchange gains or losses

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

(Millions of Yen)

(Thousands of U.S. Dollars

For the year ended

For the year ended

For the year ended

31 March 2020

31 March 2021

31 March 2021

(Note 2))

Packaging/shipping/transportation
Travel11,3186,596

11,0452,525

99,76322,808

Utilities
Repair and maintenance

11,92813,185

10,72012,031

96,832
108,669

180

20

184

375
74,186

147
68,1581,331
615,642

117,768

104,646945,229

Loss on sales of property, plant and equipment
Loss on disposal of property, plant andequipment
OthersTotal other expenses- 86 -

25. Finance income and costs(Millions of Yen)

(Millions of Yen)

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

For the year ended

For the year ended

31 March 2020

31 March 2021

31 March 2021

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

3,452

1,544

13,947

10

8

73

－

652

5,886

3,461

2,204

19,906

431

373

3,372

47
18

59
17

534
158

116

275

2,483

Financial assets measured at amortised
cost

178

1,286

11,612

Total finance costs

791

2,010

18,159Dividend income
FVTOCI financial assets
Changes in fair value
FVTPL financial assets
Total finance income
Finance costs
Interest costs
Interest-bearing debt
Retirement benefits liabilities
Provisions
Other financial liabilities
Impairment losses- 87 -

26. Other comprehensive income
For the years ended 31 March 2020 and 2021, items that may be reclassified subsequently to profit or loss comprise the following:(Millions of Yen)

(Millions of Yen)

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

For the year ended

For the year ended

31 March 2020

31 March 2021

31 March 2021

Items that may be reclassified subsequently
to profit or loss:① Exchange differences on translation offoreign operations (i)Gains (losses) arising during the year
Reclassification adjustments to profit or(17,072)

207,761

187,530

266

332

2,997

(16,806)

21,093

190,526

76(147)(1,326)

－

3

25

76

(144)

(1,301)tax
Income tax relating to components of other(16,729)

20,949189,225

comprehensive income
Total other comprehensive income/(loss)

(203)

(78)

(701)

(16,932)(20,871)(188,524)

loss for the year
Total
② Share of other comprehensive income ofassociates
Gains (losses) arising during the year
Reclassification adjustments to profit orloss for the year
Total
Other comprehensive income/(loss) before(net of tax)Note:(i) ‘Exchange differences on translation of foreign operations’ consist of differences on foreign currency conversion for financial
statements of foreign operations.

- 88 -

Deferred and current taxes on each item of other comprehensive income for the years ended 31 March 2020 and 2021, 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 2020

31 March 2021

31 March 2021

(Note 2))

Total

Tax

Net of tax

Total

Tax

Net of tax

Total

Tax

Net of tax

Other comprehensive
income attributable toowners of the Company①FVTOCI financial assets

949

(234)

715

8,359

(2,546)

5,813

75,501(22,995)

52,506(16,602)(203)(16,805)

20,684(78)

20,606

186,827(701)

186,126

(50)

22

(29)

280

(17)

264

2,531

(150)

2,382

76

－

76

(144)

－

(144)

(1,301)－(1,301)(15,627)(415)(16,042)

29,179(2,640)26,539263,558(23,846)

239,712

(16)

－

(16)

4

－

4

36

－

36

(203)

－

(203)

410

－

410

3,699

－

3,699

(220)

－

(220)

413

－

413

3,735

－

3,735

(15,847)(415)(16,262)

29,592(2,640)26,952

267,293(23,846)

243,447② Exchange differences ontranslation of foreign
operations③ Remeasurements of the
net defined benefit
liability (asset)④ Share of othercomprehensive incomeof associates
Subtotal
Other comprehensive
income attributable to non-controlling interests① FVTOCI financial assets② Exchange differences ontranslation of foreign
operations
Subtotal
Total other comprehensive
income/(loss)- 89 -

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

(Yen)

(U.S. Dollars (Note 2))

For the year ended

For the year ended

For the year ended

31 March 2020

31 March 2021

31 March 2021

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

303.27－335.77－3.03－

303.27335.77

3.03

302.74335.25

3.03

－

－

－

302.74335.25

3.03

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

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))For the year ended
31 March 2020
Profit attributable to owners of theCompany from continuing operations

For the year ended
31 March 2021

114,406

125,446

1,133,102－－－

114,406

125,446

1,133,102

Profit attributable to owners of theCompany from discontinued operations
Profit used in the calculation of basic
earnings per share

For the year ended
31 March 2021(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 2020
Weighted-average number of ordinary
shares377,238- 90 -For the year ended 31 March 2021
373,602

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

(Millions of Yen)

(Thousands of U.S. Dollars

For the year ended
31 March 2020

For the year ended
31 March 2021

For the year ended
31 March 2021

(Note 2))

Profit attributable to owners of theCompany from continuing operation
after dilution
Profit attributable to owners of the114,406

125,446

1,133,102－－－

114,406

125,446

1,133,102

Company 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)
For the year ended
31 March 2020
Weighted-average number of ordinary shares

For the year ended
31 March 2021

377,238

373,602669

586

377,907374,188

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

28. Non-cash transactions
Non-cash transactions for the years ended 31 March 2020 and 2021, consisted of acquiring property, plant and equipment through newlease arrangements in the amount of 5,925 million yen and 5,020 million yen (45,342 thousand U.S. dollars) for each period.

- 91 -

29. Subsidiaries(1) Composition of the Group
Information about the composition of the Group as at 31 March 2020 and 2021, is as follows:

Reportable Segment
Life Care

Information Technology

Number of wholly-owned subsidiaries

Location

As at 31 March 2020

As at 31 March 2021

U.S.A.

5

5

ARGENTINA

1

1

UNITED KINGDOM

4

4

ITALY

2

2

INDIA

3

3

INDONESIA

3

3

AUSTRALIA

2

2

NETHERLANDS

44

CANADA

7

7

SINGAPORE

3

3

SWITZERLAND

1

1SWEDEN

1

1

SPAIN

2

2

THAILAND

3

3

CZECH REPUBLIC

1

1

DENMARK

1

1

GERMANY

6

6

TURKEY

1

1

HUNGARY

22

PHILIPPINES

2

2

FINLAND

1

1

BRAZIL

2

2

FRANCE

3

3

BULGARIA

1

1

VIETNAM

1

1

BELGIUM

1

1

POLAND1

1

MALAYSIA

44

SOUTH AFRICA

1

1

MEXICO

1

1

RUSSIA

2

2

SOUTH KOREA

3

3

TAIWAN

1

1

CHINA

9

8

JAPAN

5

3

U.S.A.

1

1

SINGAPORE

1

1

THAILAND

2

2

PHILIPPINES

2

2

VIETNAM

4

3

MALAYSIA

1

1

LAOS

1

1

SOUTH KOREA

1

1

TAIWAN

1

1

CHINA

5

5

- 92 -

Reportable Segment
Other

Information Technology

As at 31 March 2020

As at 31 March 2021

U.S.A.

3

3

UNITED KINGDOM

1

1

AUSTRALIA

1

1

NETHERLANDS

44SINGAPORE

1

1

SWEDEN

1

1

SPAIN

1

1

THAILAND－1

GERMANY

1

1

FRANCE

1

1

SOUTH KOREA

1

1

JAPAN

2

2

Reportable Segment
Life Care

Number of wholly-owned subsidiaries

Location

Number of non-wholly-owned subsidiaries

Location

As at 31 March 2020

As at 31 March 2021

IRELAND

1

1

U.S.A.

1

1

UNITED KINGDOM

1

1

NETHERLANDS

1

1

SINGAPORE

1

1

GERMANY2

2

FRANCE

2

2

VIETNAM

1

1

BELGIUM

1

1

CHINA

3

4

JAPAN

2

2

PHILIPPINES

1

1

CHINA

2

2

- 93 -

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

Proportion of ownership
Name of

Locationsubsidiaries

interests and voting
rights held by noncontrolling interests

Profit (loss) allocated to noncontrolling interests(Millions of (Millions of
Yen)

Yen)

(Thousandsof U.S.
Dollars)

Accumulated non-controlling interests(Millions of (Millions of
Yen)

Yen)

(Thousandsof U.S.
Dollars)

As at 31
As at 31
As at 31
As at 31
As at 31
As at 31
As at 31
As at 31
March 2020 March 2021 March 2020 March 2021 March 2021 March 2020 March 2021 March 2021
WASSENBURG MEDICALNETHER
LANDS

49.0%

49.0%

(56)

(2)

(15)

2,790

3,037

27,430

50.0%

50.0%

173

(58)

(521)

1,023

1,052

9,501

Individually immaterial subsidiaries with non-controlling interests(19,590)(19,677)(177,736)

Total(15,777)(15,589)(140,805)

B.V. and six
and otherother companies countries
SEIKO
OPTICAL
PRODUCTS
CO., LTD. andfour otherJAPANand othercountries

companies

Summarised financial information in respect of each of the Group’s subsidiaries that have material non-controlling interests is set out
below. The summarised financial information below represents amounts before intragroup eliminations.
(Millions of Yen)

(Millions of Yen)

(Thousands of U.S. Dollars)

As at / for the year
ended 31 March 2020

As at / for the year
ended 31 March 2021

As at / for the year
ended 31 March 2021

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

3,305

3,276

29,594Current assets

4,511

5,214

47,094Non-current liabilities

(499)

(386)

(3,489)Current liabilities(1,623)(1,907)(17,222)Equity attributable to owner of the Company

2,904

3,161

28,548Non-controlling interests

2,790

3,037

27,428

Revenue

6,505

6,528

58,968

Expenses(6,618)(6,532)(59,000)

Profit/(loss) for the year

(114)

(3)

(32)

Other comprehensive income/(loss)

(250)

507

4,576

Comprehensive income/(loss)

(363)

503

4,544

－

－

－

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

727

521

4,708

Net cash flow from investing activities

(161)

(79)

(717)

Net cash flow from financing activities

(208)

(188)

(1,701)

Net cash flow

357

254

2,290

- 94 -

(Millions of Yen)

(Millions of Yen)

(Thousands of U.S. Dollars)

As at / for the year
ended 31 March 2020

As at / for the year
ended 31 March 2021

As at / for the year
ended 31 March 2021

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

1,042

884

7,986

Current assets

9,262

10,10091,228Non-current liabilities

(219)

(144)

(1,301)

Current liabilities(7,826)(8,491)(76,696)

Equity attributable to owner of the Company

1,129

1,174

10,609Non-controlling interests

1,129

1,174

10,609

Revenue

29,48824,521

221,490

Expenses(29,256)(24,605)(222,246)

Profit/(loss) for the year

232

(84)

(756)

Other comprehensive income/(loss)

(129)

174

1,568

Comprehensive income/(loss)

103

90

813

Dividends paid to non-controlling interests

－

－

－

Net cash flow from operating activities

739

388

3,507

Net cash flow from investing activities

(42)

(9)

(86)

Net cash flow from financing activities(2,175)

291

2,627

Net cash flow

(1,478)

670

6,048

Note:
The Company holds less than a majority of the voting rights of SEIKO OPTICAL PRODUCTS CO., LTD. (“SOP”); however, theCompany has the power to appoint a majority of its board of directors. Thus, the Company is considered to control SOP and includes
it in its subsidiaries.

- 95 -

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

Name of subsidiary

HOYA LENSMANUFACTURING

Reportablesegment

Life Care

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

Major products/
services in the

Proportion of

Proportion ofshares held

shares held

As at 31 March

As at 31 March

2020

2021

MALAYSIA

100.0%

100.0%THAILAND

100.0%

100.0%

Location

reportable segment
Health Care related
products
Health Care related
products

HOYA LENS GUANGZHOULTD.

Life Care

Health Care related
products

CHINA

100.0%

100.0%HOYA LENS AUSTRALIA
PTY.LTD.

Life Care

Health Care related
products

AUSTRALIA

100.0%

100.0%

INDIA

100.0%

100.0%VIETNAM

100.0%

100.0%

CHINA

100.0%

100.0%THAILAND

100.0%

100.0%HOYA LENS INDIA PRIVATELIMITEDLife Care

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

Life Care

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

PT.VISION-EASE ASIA

Life Care

Health Care related
products

INDONESIA

100.0%

100.0%PERFORMANCE OPTICS
KOREA, LTD.

Life Care

Health Care related
products

SOUTH KOREA

100.0%

100.0%

Life Care and

Health Care related
products and EU

NETHERLANDS

100.0%

100.0%HOYA HOLDINGS N.V.

Corporate

headquarters

HOYA LENSDEUTSCHLAND GMBH

Life Care

Health Care related
products

GERMANY

100.0%

100.0%HOYA LENS U.K. LTD.

Life Care

Health Care related
products

UNITED
KINGDOM

100.0%

100.0%HOYA LENS ITALIA S.P.A.

Life Care

ITALY

100.0%

100.0%HOYA LENS FRANCE S.A.S.

Life Care

FRANCE

100.0%

100.0%HOYA LENS IBERIA S.A.

Life Care

Health Care related
products

SPAIN

100.0%

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

Health Care related
products

TURKEY

100.0%

100.0%CANADA

100.0%

100.0%U.S.A.

100.0%

100.0%U.S.A.

50.0%

50.0%

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

Life Care
Life Care
Life Care

Health Care related
products
Health Care related
products

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

SEIKO OPTICAL PRODUCTS
Life Care
CO., LTD.

Health Care related
products

JAPAN

50.0%

50.0%

PENTAX EUROPE GMBH

Medical related
products

GERMANY

100.0%

100.0%

Life Care- 96 -Name of subsidiary

Reportablesegment

Major products/
services in the

Proportion of
Location

reportable segment

Proportion ofshares held

shares held

As at 31 March

As at 31 March

2020

2021

PENTAX ITALIA S.R.L

Life Care

Medical related
products

ITALY

100.0%

100.0%PENTAX U.K. LTD.

Life Care

Medical related
products

UNITED
KINGDOM

100.0%

100.0%PENTAX CANADA, INC.

Life Care

CANADA

100.0%

100.0%

MALAYSIA

100.0%

100.0%PENTAX MEDICAL(PENANG) SDN. BHD.
HOYA SURGICAL OPTICS,
INC.

Life Care

Medical related
products
Medical related
products

Life Care

Medical related
products

U.S.A.

100.0%

100.0%MICROLINE SURGICAL, INC. Life Care

Medical related
products

U.S.A.

100.0%

100.0%

100.0%

100.0%PHILIPPINES

100.0%

100.0%VIETNAM

100.0%

100.0%VIETNAM

100.0%－VIETNAM

100.0%

100.0%

Health Care relatedLife Care
Information

products and Medical
related products
THAILAND

Technology

Electronics related
products

HOYA GLASS DISKPHILIPPINES, INC.

Information
Technology

Electronics related
products

HOYA GLASS DISKInformation

Electronics related

VIETNAM LTD.

Technology

products

Information

Electronics related

Technology

products

Information

Electronics related

Technology

products

HOYA LAMPHUN LTD.

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

HOYA MICROELECTRONICS Information
TAIWAN CO., LTD.
Technology

Electronics related
products

TAIWAN

100.0%

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

Electronics related
products

SOUTH KOREA

100.0%

100.0%HOYA ELECTRONICS

Information

Electronics related

MALAYSIA SDN.BHD.

Technology

products

MALAYSIA

100.0%

100.0%HOYA ELECTRONICS

Information

Electronics related

SINGAPORE PTE. LTD.

Technology

products

SINGAPORE

100.0%

100.0%HOYA CORPORATION USA

Information
Technology

U.S.A.

100.0%

100.0%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%

Electronics andImaging related
products

HOYA OPTICS (THAILAND)

Information

Imaging related

LTD.

Technology

products

HOYA OPTO-ELECTRONICS Information
QINGDAO LTD.
Technology

Imaging related
products

HOYA OPTICALTECHNOLOGY (SUZHOU)

Information

Imaging related

Technology

products

LTD.

HOYA OPTICAL (ASIA) CO., Information

Imaging relatedLTD.

products

Technology

HOYA OPTICAL
Information
TECHNOLOGY (WEIHAI) CO.,Technology
LTD.

Imaging related
products- 97 -Name of subsidiary

Reportablesegment

services in thereportable segment

PENTAX CEBU PHILIPPINES Information

Imaging related

CORPORATION

products

HOYA HOLDINGS ASIA
PACIFIC PTE LTD

Technology
Corporate

Proportion ofshares held

Proportion ofshares held

As at 31 March
2020

As at 31 March
2021

PHILIPPINES

100.0%

100.0%

SINGAPORE

100.0%

100.0%

Major products/

Asia and Oceania
headquarters

Location

HOYA HOLDINGS (ASIA) B.V. Corporate

Asia and Oceania
holding company

NETHERLANDS

100.0%

100.0%HOYA FINANCE B.V.

Corporate

Asia and Oceania
financing company

NETHERLANDS

100.0%

100.0%HOYA HOLDINGS, INC.

Corporate

U.S.A.

100.0%

100.0%

North America
headquarters- 98 -

30. Related party disclosures
Transactions between the Company and its subsidiaries which are related parties of the Company, have been eliminated inconsolidation and are not disclosed in this note. Details of the balances and transactions between the Company and other relatedparties are disclosed as follows:(1) Transactions with related parties, and receivables and payables balances
The Group has transactions with related parties as follows:
As at/for the year ended 31 March 2020:
Name of affiliates

Nature of related party transactions

Transaction amount

Outstanding balance(Millions of Yen)

(Millions of Yen)

Incorporation of deferred interests
Affiliates

receivable into principal (Note)

AvanStrate, Inc.

Interest received

206

8,454

237

36

Note:
Interest rates on loans are determined considering market rates.
The deferred interest receivable, which is calculated on the unpaid principal based on deferred interest rates, is incorporated into
principal.
The due date of the loan is 27 December 2023. It will be repaid in six installments after a certain period of deferment, and deferredinterests will be paid by batch payment on the due date.
Platinum owned by a subsidiary of the affiliate is pledged as collateral.
As at/for the year ended 31 March 2021:
Name ofaffiliates

Nature of related
party transactions

Transaction
amountOutstandingbalance

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

Yen)

Yen)

U.S. Dollars(Note 2))

U.S. Dollars(Note 2))

Incorporation ofdeferredinterests
receivable into

213

6,004

1,927

54,229

－

2,664

－

24,064

53

211

476

1,904

principal (Note)
Affiliates

AvanStrate, Inc.

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

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

- 99 -

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

(Millions of Yen)

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

For the year ended

For the year ended

31 March 2020

31 March 2021

31 March 2021

Short-term benefits
Share-based payments

402
128

521
157

4,707
1,419

Total remuneration of key management personnel

530

678

6,126

The remuneration of directors and key management personnel is determined by the remuneration committee based on the businessenvironment of the Company, the remuneration of other companies and performance.

- 100 -

31. Business combinations
The information of business combinations is omitted due to lack of materiality for the Group.

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

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

(Millions of Yen)

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

As at 31 March 2021

As at 31 March 2021

Commitments for the acquisition ofproperty, plant and equipment andintangible assets

28,111

19,222

173,629

34. Subsequent events
Share Cancellation
The Board of Directors made a resolution to cancel certain shares held as the Company’s treasury shares on 30 April 2021 pursuant
to Article 178 of the Companies Act.
1. Reason for cancellation of treasury shares
The Company decided on the cancellation of treasury shares with the aim of increasing capital efficiency as well as enhancing
shareholder benefit by decreasing the total number of outstanding shares. The Company cancelled the shares repurchased under its
repurchase plan approved by resolution of the board of directors on 28 January 2021.
2. Outline of cancellation(1) Class of shares: Common stock(2) Number of shares to be cancelled: 3,131,200 shares(0.85% of total shares outstanding, excluding treasury shares)(3) Date of cancellation: 14 May 2021
(Reference)
Total number of issued and outstanding shares after the cancellation: 369,702,020 shares
Resolution on cash dividends
On 28 May 2021, a resolution was made by the Company’s board of directors for the payment of a cash dividend to shareholders ofrecord on 31 March 2021 of 16,619 million yen (150,111 thousand U.S. dollars) (45 yen per common share).

35. Approval of financial statements
The consolidated financial statements for the year ended 31 March 2021, were approved by Mr. Ryo Hirooka, the chief financial
officer of the Group on 3 June 2021.

- 101 -