HOYA Corporation and its Subsidiaries
Consolidated Financial Statements under IFRSs
and Independent Auditor’s Report
For the year ended 31 March 2015

HOYA Corporation

Contents

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

3

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

4

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

6

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

8

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

13

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

15

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

15

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

15

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

23

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

39

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

40

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

45

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

49

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

52

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

56

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

57

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

62

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

63

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

65

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

65

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

66

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

67

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

68

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

69

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

70

20． Provisions.....................................................................................................................................................

74

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

75

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

76

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

79

24． Share-based payments..................................................................................................................................

95

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

98

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

100

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

101

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

103

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

104

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

105

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

111

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

111

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

112

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

112

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

112

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

112

- 2 -

Consolidated Statement of Financial Position
HOYA Corporation and its Subsidiaries
As at 31 March 2015

(Thousands of U.S.

(Millions of Yen)

(Millions of Yen)

Notes

As at 31 March 2014

As at 31 March 2015

As at 31 March 2015

6,8,34

129,513

128,191

1,066,749

Goodwill

7,8

10,961

9,970

82,967

Intangible assets

7,8,3423,947

19,661

163,607

9

140

186

1,544

Dollars (Note 2))

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

Investments in associates
Long-term financial assets

11,23

9,062

7,037

58,556

Other non-current assets

12,19

2,527

3,020

25,131

Deferred tax assets

10

Total non-current assets

13,421

12,102

100,705

189,571

180,166

1,499,261

CURRENT ASSETS:
Inventories

13

62,64768,925573,564

Trade and other receivables

14,23

95,52999,198825,480

Other short-term financial assets

11,23

10,492

20,071167,021

982

312

2,594

Other current assets

12

13,970

16,241

135,148

Cash and cash equivalents

15,23

331,094

348,819

2,902,715

Total current assets

514,712553,566

4,606,522

Total assets

704,283

733,732

6,105,783

Income tax receivables- 4 -Notes(Millions of Yen)

(Millions of Yen)

As at 31 March 2014

As at 31 March 2015

(Thousands of U.S.
Dollars (Note 2))
As at 31 March 2015

EQUITY AND LIABILITIESEQUITY
Share capital

22(1)

6,264

6,264

52,128

Capital reserves22(1)15,89915,899132,301

Treasury shares22(2)(8,890)(5,932)(49,363)

Other capital reserves22(2),24(2,839)(3,736)(31,093)

Retained earnings

22(3),35

516,243

547,162

4,553,236

Accumulated other comprehensive income/(loss)

9,850

30,357

252,617Equity attributable to owners of the Company

536,526

590,014

4,909,825

6,121

6,081

50,603542,648

596,095

4,960,428

Non-controlling interests

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

16,17,23

35,82935,528295,649

Other long-term financial liabilities

11,23

－

667

5,551

Retirement benefits liabilities

19

1,675

2,098

17,455

Provisions

20

2,155

2,262

18,827

Other non-current liabilities

12

2,188

1,010

8,407

Deferred tax liabilities

10

2,911

2,205

18,34644,75843,770364,235

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

16,17,23

27,4502,033

16,915Trade and other payables

21,23

40,291

41,247343,236

Other short-term financial liabilities

11,23

Income tax payables

152

2,896

24,09913,36910,91390,810

Provisions

20

955

1,063

8,847

Other current liabilities

12

34,66035,716297,213

Total current liabilities

116,877

93,867781,120

Total liabilities

161,635

137,637

1,145,355

Total equity and liabilities

704,283

733,732

6,105,783- 5 -Consolidated Statement of Comprehensive Income
HOYA Corporation and its Subsidiaries
For the year ended 31 March 2015

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 2014

31 March 2015

31 March 2015

Dollars (Note 2))

Continuing operations
Revenue:Sales

25

427,575

489,961

4,077,229

Finance income

26

1,849

2,296

19,107

Other income

25

5,453

3,476

28,926434,877495,733

4,125,262

Total revenue
Expenses:
Changes in inventories of goods, products and work in progress

7,038

(479)

(3,982)

Raw materials and consumables used

84,13591,862

764,433

Employee benefits expense

19,24,25

102,759

115,218

958,791

Depreciation and amortisation

6,7,2533,891

34,852290,021

Subcontracting cost

4,737

6,317

52,568Advertising and promotion expense

11,76912,363102,883

23,521

195,734

Commission expense

25

20,460

Impairment losses

8

4,770

286

2,379

19,26

1,309

1,209

10,060

9

268

10

80

25

(8,496)(11,840)(98,529)

6,7,18,25

86,749104,165

866,812

Total expenses

349,391

377,484

3,141,250

Profit before tax

85,486

118,249

984,01225,34725,308210,602

Profit for the year from continuing operations

60,14092,941

773,411

Profit for the year

60,14092,941

773,41181(206)(1,712)income/(loss)

(15)

39

322

Subtotal

66

(167)

(1,390)Finance costs
Share of loss of associates
Foreign exchange (gain)/loss
Other expenses

Income tax expense

10

Other comprehensive income/(loss):

27

Items that will not be reclassified subsequently to profit or loss:
Remeasurements of the net defined benefit liability (asset)
Income tax relating to components of other comprehensive

10

Items that may be reclassified subsequently to profit or loss:
Net gain/(loss) on revaluation of available-for-sale financial
assets

(185)

(698)

(5,809)Exchange differences on translation of foreign operations

34,48821,272

177,019

income

(89)

(236)

(1,960)Subtotal

34,214

20,339169,250

Total other comprehensive income/(loss)

34,281

20,172

167,860

Total comprehensive income for the year

94,420113,112941,270

Income tax relating to components of other comprehensive

10

- 6 -

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 2014

31 March 2015

31 March 2015

Dollars (Note 2))

Profit attributable to:
Owners of the Company

58,39092,804772,273

Non-controlling interests

1,750

137

1,137

Total

60,14092,941

773,411

Owners of the Company

92,548113,144941,533

Non-controlling interests

1,873

(32)

(262)

Total

94,420113,112941,270

Total comprehensive income/(loss) attributable to:

Notes

Basic earnings per share

(Yen)

(Yen)

(U.S. Dollars(Note 2))

For the year ended

For the year ended

For the year ended

31 March 2014

31 March 2015

31 March 2015

28

Continuing operations

135.26

Discontinued operations
Basic earnings per share
Diluted earnings per share

218.23

1.82

－

－

－

135.26218.231.82

135.04217.63

1.81

28

Continuing operations
Discontinued operations
Diluted earnings per share

- 7 -

－

－

－

135.04217.63

1.81

Consolidated Statement of Changes in Equity
HOYA Corporation and its Subsidiaries
For the year ended 31 March 2015
(Millions of Yen)
Notes
Balance at 1 April 2013

Share capital

Capital reserves

Treasury shares

6,264

15,899(10,712)

Other capitalreserves(2,313)Retained earnings
485,836

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

58,39027
58,390Total comprehensive income/(loss) for the year
Transactions with owners
Contributions by and distributions to owners
Acquisition of treasury shares

22(2)

(5)

Disposal of treasury shares

22(2)

1,827

Dividends, 65 yen per share

22(3)Change in non-controlling interests

22(4)Share-based payments (stock option)

24

(768)
(28,050)242
66

Transfer to retained earnings
Total contributions by and distributions to－owners

－

1,822

(527)

(27,983)

Total transactions with owners

－

－

1,822

(527)

(27,983)

Balance at 31 March 2014

6,264

15,899(8,890)(2,839)516,243

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

92,80427
92,804

Total comprehensive income/(loss) for the year
Transactions with owners
Contributions by and distributions to owners
Acquisition of treasury shares22(2)(30,005)(30)

Disposal of treasury shares

22(2)

3,390

(1,253)Cancellation of treasury shares22(2)29,573

Dividends, 75 yen per share

22(3)Share-based payments (stock option)

24(29,573)(32,145)386(167)

Transfer to retained earnings
Total contributions by and distributions toowners

－

－

2,958

(897)

(61,885)

Total transactions with owners

－

－

2,958

(897)

(61,885)

Balance at 31 March 2015

6,264

15,899(5,932)(3,736)547,162- 8 -(Millions of Yen)

Net gain/(loss)

Notes

Remeasurements of
Accumulated other

Exchange differences
on revaluation

the net definedcomprehensive

on translation ofof available-for-salebenefit liability
income/(loss)

foreign operations
financial assets

Balance at 1 April 2013(asset)555(24,797)－(24,241)(114)

34,205

66

34,158(114)

34,205

66

34,158(66)(66)

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

27

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

22(2)Disposal of treasury shares

22(2)Dividends, 65 yen per share

22(3)Change in non-controlling interests

22(4)Share-based payments (stock option)

24

Transfer to retained earnings
Total contributions by and distributions toowners

－

－

(66)

(66)

Total transactions with owners

－

－

(66)

(66)

442

9,408

－

9,850

(449)

20,956(167)

20,340(449)

20,956(167)

20,340167

167

Balance at 31 March 2014
Total comprehensive income/(loss) for the year
Profit for the year
Other comprehensive income/(loss)

27

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

22(2)Disposal of treasury shares

22(2)Cancellation of treasury shares

22(2)Dividends, 75 yen per share

22(3)Share-based payments (stock option)

24

Transfer to retained earnings
Total contributions by and distributions toowners

－

－

167

167

Total transactions with owners

－

－

167

167

Balance at 31 March 2015

(7)30,364－30,357- 9 -(Millions of Yen)
EquityNotes

Non-controlling
attributable to owners

Total equity
interestsof the Company

Balance at 1 April 2013

470,733(187)

470,547

58,3901,750

60,14034,158123

34,281

92,548

1,873

94,420Total comprehensive income/(loss) for the year
Profit for the year
Other comprehensive income/(loss)

27

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

22(2)

(5)

Disposal of treasury shares

22(2)

1,058

Dividends, 65 yen per share22(3)(28,050)

Change in non-controlling interests

22(4)Share-based payments (stock option)

24

Transfer to retained earnings

(5)
1,058
(6)

(28,055)

4,441

4,441

242

242

－

－

Total contributions by and distributions toowners(26,754)

4,435(22,319)

Total transactions with owners(26,754)

4,435(22,319)

Balance at 31 March 2014

536,5266,121

542,648

92,804

137

92,941

20,340(168)

20,172

113,144(32)

113,112

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

27

Total comprehensive income/(loss) for the year
Transactions with owners
Contributions by and distributions to owners
Acquisition of treasury shares22(2)(30,035)(30,035)

Disposal of treasury shares

22(2)

2,137

2,137

Cancellation of treasury shares

22(2)

－

－

Dividends, 75 yen per share

22(3)(32,145)

Share-based payments (stock option)

24

386

386

－

－

Transfer to retained earnings(9)(32,154)

Total contributions by and distributions toowners(59,657)(9)(59,665)

Total transactions with owners
Balance at 31 March 2015

(59,657)(9)(59,665)

590,0146,081

596,095- 10 -

Consolidated Statement of Changes in Equity
HOYA Corporation and its Subsidiaries
For the year ended 31 March 2015-Continued(Thousands of U.S. Dollars (Note 2))
Notes
Balance at 31 March 2014

Share capital

Capital reserves

Treasury shares

52,128132,301(73,979)

Other capitalreserves(23,627)

Retained earnings
4,295,938

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

772,27327
772,273

Total comprehensive income/(loss) for the year
Transactions with owners
Contributions by and distributions to owners
Acquisition of treasury shares22(2)(249,691)(250)

Disposal of treasury shares22(2)28,214(10,430)

Cancellation of treasury shares22(2)246,092

Dividends, 75 yen per share

22(3)Share-based payments (stock option)

24(246,092)(267,493)
3,214(1,390)Transfer to retained earnings
Total contributions by and distributions toowners－－24,615(7,466)(514,975)

Total transactions with owners－－

24,615(7,466)(514,975)

52,128132,301(49,363)(31,093)

4,553,236

Balance at 31 March 2015

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

Net gain/(loss)

Notes

Remeasurements of
Accumulated other

Exchange differences
on revaluation

the net definedcomprehensive

on translation ofof available-for-salebenefit liability
income/(loss)

foreign operations
financial assets

Balance at 31 March 2014(asset)3,675

78,292－

81,967(3,734)

174,384(1,390)169,259(3,734)

174,384(1,390)169,259

1,390

1,390

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

27

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

22(2)Disposal of treasury shares

22(2)Cancellation of treasury shares

22(2)Dividends, 75 yen per share

22(3)Share-based payments (stock option)

24

Transfer to retained earnings
Total contributions by and distributions toowners

－

－

1,390

1,390

Total transactions with owners

－

－

1,390

1,390

252,676－

252,617

Balance at 31 March 2015(59)

- 11 -

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

Non-controlling
attributable to owners

Total equity
interestsof the Company

Balance at 31 March 2014

4,464,728

50,9384,515,666

772,273

1,137

773,411

169,259(1,400)167,860

941,533(262)

941,270

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

27

Total comprehensive income/(loss) for the year
Transactions with owners
Contributions by and distributions to owners
Acquisition of treasury shares22(2)(249,941)(249,941)

Disposal of treasury shares22(2)17,784

17,784

Cancellation of treasury shares

22(2)

－

Dividends, 75 yen per share

22(3)(267,493)

Share-based payments (stock option)

24

3,214

3,214

－

－

Transfer to retained earnings－(74)(267,567)

Total contributions by and distributions toowners(496,436)(74)(496,509)

Total transactions with owners(496,436)(74)(496,509)

Balance at 31 March 2015

4,909,825

50,603

4,960,428- 12 -

Consolidated Statement of Cash Flows
HOYA Corporation and its Subsidiaries
For the year ended 31 March 2015
(Millions of Yen)

(Millions of Yen)

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

Notes

For the year ended

For the year ended

For the year ended

31 March 2014

31 March 2015

31 March 2015

Cash flows from operating activities
Profit before tax

85,486

118,249

984,012

Depreciation and amortisation

33,891

34,852290,021

Impairment losses

4,770

286

2,379

Finance income(1,849)(2,296)(19,107)

Finance costs

1,309

1,209

10,060Share of (profits)/loss of associates

268

10

80

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

(658)

(612)

(5,091)

Loss on disposal of property, plant and equipment

450

282

2,348

Foreign exchange (gain)/loss(6,822)(12,559)(104,510)

Others

3,921

4,776

39,741

120,767

144,196

1,199,933

Decrease/(increase) in inventories

11,785(701)(5,837)

Decrease/(increase) in trade and other receivables(4,548)(736)(6,129)

Increase/(decrease) in trade and other payables(2,171)(314)(2,612)

Cash generated from operations (before movements in working
capital)Movements in working capital

Increase/(decrease) in retirement benefits liabilities and provisions

215

(349)

(2,903)126,048

142,095

1,182,452

Interests received

1,065

1,399

11,645

Dividends received

56

53

444

SubtotalInterests paid

(1,238)(1,001)(8,329)

Income taxes paid

(24,492)(27,354)(227,630)

Income taxes refunded

1,231

187

1,559

102,670

115,380

960,141

Withdrawals of time deposits

6,098

14,082

117,184

Payments for time deposits(9,087)(14,988)(124,720)

950

2,118

17,629(16,546)(18,385)(152,989)

1,007

1,920

15,973

Net cash generated from operating activities
Cash flows from investing activities

Proceeds from sales of property, plant and equipment
Payments for acquisition of property, plant and equipment
Proceeds from sales of investment
Payments for acquisition of investment

－

(58)

(483)

Payments for acquisition of subsidiaries(6,390)(281)(2,340)

(4)

(2)

(14)

Payments to non-controlling interests upon merger
Payments for business transfer
Payments for loan to affiliates

31－(1,855)(15,437)(1,996)(8,500)(70,733)

Other proceeds

7,339

611

5,083

Other payments(2,254)(2,050)(17,056)

Net cash used in investing activities(20,882)(27,387)(227,902)- 13 -

Consolidated Statement of Cash Flows
HOYA Corporation and its Subsidiaries
For the year ended 31 March 2015-Continued(Millions of Yen)

(Millions of Yen)

(Thousands of U.S.

For the year ended

For the year ended

For the year ended

31 March 2014

31 March 2015

31 March 2015

Dollars (Note 2))
Notes

Cash flows from financing activities
Dividends paid to owners of the Company(28,101)(32,103)(267,145)

Dividends paid to non-controlling interests

(6)

(9)

(77)

Increase/(decrease) in short-term debt

(2)

(215)

(1,791)

Repayments of long-term borrowings

(505)

(578)

(4,808)(234)(25,126)(209,087)

Payments for redemption of bonds

16

Proceeds from disposal of treasury shares

22(2)

－

0

3

Payments for purchase of treasury shares

22(2)

(5)

(30,035)(249,941)

Proceeds from exercise of stock options
Net cash used in financing activities

1,058

2,137

17,780(27,794)(85,929)(715,064)

Net increase/(decrease) in cash and cash equivalents

53,994

2,064

17,175

Cash and cash equivalents at the beginning of the year

248,896

331,094

2,755,211

28,204

15,662

130,330

331,094

348,819

2,902,715

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

15

Note:
Non-cash transactions are stated in Note 29 “Non-cash transactions”.

- 14 -

Notes to the Consolidated Financial Statements

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

2.Basis of consolidated financial statements(1) Basis of consolidated financial statements
The accompanying consolidated financial statements have been prepared in accordance with International Financial ReportingStandards (“IFRSs”).
The accompanying consolidated financial statements are stated in Japanese yen.
The translations of Japanese yen amounts into U.S. dollar amounts are included solely for the convenience of readers outside Japan
using the rate of ¥120.17 to $1, the foreign exchange rate at 31 March 2015. 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.

- 15 -

(2) Effects of applying new accounting standards
The Group adopted the following IFRSs for the year ended 31 March 2015:

IFRSs

Subject of new standards/amendments and transitional provisions- Performance conditions and service conditions are defined in order to clarify

IFRS 2(Revised)

IFRS 3(Revised)

IFRS 10(Revised)
IFRS 12(Revised)

Share-based Payment

various issues, including the following:
1. A performance condition may be a market or non-market condition
2. A performance condition must contain a service condition- Contingent consideration in a business combination that is not classified as

Business Combinations

equity but as an asset or liability is subsequently measured at fair value throughprofit or loss

Consolidated Financial Statements- Exception of the requirements of consolidation of subsidiaries if an entity meetsthe definition of an investment entity, such as requiring to measure its investments
in certain subsidiaries at FVTPL in accordance with IFRS 9 or IAS 39- Amendments as a result of addition of “Investment Entities” to IFRS 10

Disclosure of Interests in Other Entities

IAS 27

Consolidated and Separate Financial(Revised)

Statements- Amendments based on the application of “Investment Entities” to IFRS 10- Clarification that in order to offset a financial asset and a financial liability, aright to set-off must be available today rather than being contingent on a future

IAS 32(Revised)

event and must be exercisable by any of the counterparties, both in the normal
Financial Instruments: Presentation

course of business and in the event of default, insolvency or bankruptcy- Clarification on which settlement processes would meet the requirement foroffsetting that an entity has the intention to settle a financial asset and a financial
liability net or simultaneously- Clarification of the requirement to disclose the recoverable amount foreach cash-generating unit for which the significant components of carrying

IAS 36(Revised)

IAS 39(Revised)

amount of goodwill or intangible assets with indefinite useful lives allocated to
Impairment of Assetsthat unit, only when an impairment loss has been recognised- Clarification of the disclosure requirement for the recoverable amounts of
impaired assets only when the amount is measured at fair value less costs ofdisposal- Amendments that the novation of a hedging instrument should not be considered
an expiration or termination giving rise to the discontinuation of hedge accounting
Financial Instruments: Recognition andwhen a hedging derivative is novated as a consequence of laws and regulations, orMeasurement
the introduction of laws and regulations, and one or more clearing counterparties
replace the original counterparty- Guidance on when to recognise a liability for a levy imposed by a government
when an obligating event has occurred- The liability is recognised progressively if the obligating event occurs over a

IFRIC 21

Leviesperiod of time
- If an obligation is triggered on reaching a minimum threshold (e.g., amounts ofsales or products), the liability is recognised when that minimum threshold isreached

These standards and interpretations were applied in accordance with respective transitional provisions and had no significant impacts
on the consolidated financial statements of the Group. There are no standards that were early adopted by the Group.

- 16 -

(3) Standards and interpretations in issue not yet adopted by the GroupAt the date of approval of the consolidated financial statements, the main standards and interpretations that were in issue but not yet
effective for mandatory adoption are as follows. There are no standards and interpretations that were early adopted by the Group.
The description of the standards related to the first-time adoption, IFRS 14 “Regulatory Deferral Accounts”, and the amendment of
IAS 41 “Agriculture” defining bearer plants are omitted.
Mandatory
adoption
IFRSs

（from
the yearbeginning)

To be adopted
by the Group

Subject of new standards/amendmentsfrom the year
ending- The amendment clarifies that:IFRS 3Business(Revised)

Combinations

1. Joint arrangements are outside the scope of IFRS 3, not just
1 July 2014

31 March 2016 joint ventures
2. The scope exception applies only to the accounting in thefinancial statements of the joint arrangement itself

Non-current Assets
IFRS 5

Held for Sale and(Revised)

Discontinued- The amendments introduce specific guidance for when an
1 January 2016 31 March 2017

Operations

entity reclassifies an asset (or disposal group) from held for saleto held for distribution to owners (or vice versa), or when heldfor-distribution accounting is discontinued- The amendments provide additional guidance to clarify
whether a servicing contract is continuing involvement in atransferred asset for the purposes of the disclosures required in

IFRS 7

Financial Statements:(Revised)

Disclosure

1 January 2016 31 March 2017

relation to transferred assets- The amendments were made to remove uncertainty as towhether the disclosure requirements on offsetting financial
assets and financial liabilities should be included in condensed
interim financial statements- Operating segments may be combined/aggregated if they are
consistent with the core principle of the standard, which
includes that the segments have similar economic
characteristics and that they are similar in other qualitative

IFRS 8(Revised)

Operating Segments

1 July 2014

31 March 2016

respects. If they are combined, an entity must disclose the basisof determination whether the segments are ‘similar’ or not.
- The reconciliation of segment assets to total assets is only
required to be disclosed if the reconciliation is regularly
provided to the chief operating decision maker, similar to thedisclosure requirement for segment liabilities- 17 -

Mandatory
adoption
IFRSs

（from
the yearbeginning)

To be adopted
by the Group

Subject of new standards/amendmentsfrom the year
ending- Replacement of IAS 39 for classification of financial assets
measured either at amortised cost or fair value on the basis of
the business model and contractual cash flows of the financial
assets- Amendment to IAS 39 where financial instruments measured
at FVTPL or amortised cost, all relating gains or losses arerecognised in profit or loss, and where investments in equity
instruments are designated to be measured at fair value throughother comprehensive income, all relating gains or losses arerecognised in other comprehensive income, except dividends on
the investments which are recognised in profit or loss
- Amendment that the changes in fair value of financial
liabilities designated at FVTPL are to be recognised in profit orloss, except changes in the entity’s own credit risk which arerecognised directly in other comprehensive income- Prohibition on the reclassification of the amount presented inother comprehensive income subsequently to profit or loss
- Enhancement of eligible hedged items and hedging
IFRS 9Financial
Instruments

instruments with an economic relationship to better reflect the
1 January 2018 31 March 2019 entity’s risk management activities in their financial statements- Introduction of flexibility of hedge effectiveness testing by
removing the effectiveness test in the subsequent period andquantitative threshold (within 80%-125%).
- Enhancement of disclosures about hedge accounting- Time value of options, and forwards, which quality for hedge
accounting are accounted for as hedging costs, by using asystematic and rational basis- Introduction of accounting for credit derivatives for hedging
purposes to be measured at FVTPL, if an entity manages thecredit risk of all or a portion of a credit exposure- Amendment to allow an entity to elect to account for certain
agreements to buy or sell a nonfinancial item for “own use” at
FVTPL if it eliminates or significantly reduces an accounting
mismatch- The impairment requirements relating to the accounting for anentity’s expected credit losses on its financial assets andcommitments to extend credit- Amendment to the measurement category of fair value throughother comprehensive income for certain simple debt instruments- 18 -

Mandatory
adoption
IFRSs

（from
the yearbeginning)

To be adopted
by the Group

Subject of new standards/amendmentsfrom the year
ending- On a sale or contribution of assets to a joint venture orassociate or a loss of control when joint control or significant
influence is retained in a transaction involving an associate or a
joint venture, the extent of any gain or loss recognised depends
on whether the assets or subsidiary constitute a business: when
the assets or subsidiary constitute a business, any gain or loss isrecognised in full; when the assets or subsidiary do notconstitute a business, the entity’s share of the gain or loss iseliminated- The exemption from preparing consolidated financial
IFRS 10

Consolidated(Revised)

Financial Statements

1 January 2016 31 March 2017

statements for an intermediate parent entity is available to aparent entity that is a subsidiary of an investment entity- The amendments clarify that the requirement for aninvestment entity to consolidate a subsidiary providing services
related to its investment activities applies only to subsidiaries
that are not themselves investment entities. The amendments
clarify that this exception only applies to subsidiaries that are
not themselves investment entities and whose main purpose isto provide services and activities that are related to theinvestment activities of the investment entity parent, all othersubsidiaries of an investment entity should be measured at fairvalue
- An acquirer of interests in a joint operation in which theactivity constitutes a business as defined in IFRS 3 is required
to apply all of the principles on business combinations
accounting in IFRS 3 and other IFRSs with the exception of

IFRS 11(Revised)

Joint Arrangements

1 January 2016 31 March 2017

those principles that conflict with the guidance in IFRS 11.
- The amendments apply not only to the acquisition of aninterest in an existing joint operation but also to the acquisitionof an interest in a joint operation on its formation, unless theformation of the joint operation coincides with the formation of
the business

IFRS 12(Revised)

Disclosure ofInterests in Other- The amendments clarify that an investment entity that
1 January 2016 31 March 2017 measures all its subsidiaries at fair value should provide theEntities

IFRS 12 disclosures related to investment entities- Clarification that the scope of the portfolio exception defined

IFRS 13

Fair Value(Revised)

Measurementsin paragraph 52 of IFRS 13 includes all contracts accounted for
1 July 2014

31 March 2016 within the scope of IAS 39 or IFRS 9, regardless of whether
they meet the definition of financial assets or financial
liabilities as defined in IAS 32- 19 -

Mandatory
adoption
IFRSs

（from
the yearbeginning)

To be adopted
by the Group

Subject of new standards/amendmentsfrom the year
ending- The core principle of IFRS 15 which consists of five steps isthat revenue is recognised to depict the transfer of promised
goods or services to customers in an amount that reflects the
Revenue fromIFRS 15

Contracts withconsideration to which the entity expects to be entitled in
1 January 2017 31 March 2018 exchange for those goods or services.

Customers- Extensive disclosures are required, including disaggregationof total revenue; information about performance obligations;changes in contract assets and liabilities between periods andkey judgements and estimates- Clarifications were made under the Disclosure Initiative as
follows:- Materiality and aggregation: useful information should not be
obscured by aggregating or disaggregating information, andthat materiality considerations apply to the primary statements,
notes and any specific disclosure requirements in IFRSs- Statement of financial position and statement of profit or loss
and other comprehensive income: the list of line items specified

IAS 1

Presentation of
Financial Statementsby IAS 1 for these statements can be disaggregated and
1 January 2016 31 March 2017 aggregated as relevant. Additional guidance has been added on
the presentation of subtotals in these statements- Presentation of items of other comprehensive income(“OCI”): an entity’s share of OCI of equity-accounted
associates and joint ventures should be presented in aggregate
as single line items based on whether or not it will subsequently
be reclassified to profit or loss
- Notes: regarding the structure of notes, an entity should
consider the understandability and comparability of its financial
statements- Proportionate restatement of accumulated depreciation forproperty, plant and equipment accounted for under the

IAS 16(Revised)
IAS 38(Revised)revaluation model
Property, Plant andEquipment- Clarification of revaluation for property, plant and equipment
1 July 2014

31 March 2016 accounted for under revaluation model by using observable

Intangible Assets

data with respect to the gross or net carrying amount- The amendment also clarifies that accumulated
depreciation/amortisation is the difference between the grossand the net carrying amounts of the asset- The amendments prohibit entities from using a revenue-based

IAS 16(Revised)
IAS 38(Revised)depreciation method for items of property, plant and equipment

Property, Plant andEquipment
Intangible Assets

1 January 2016 31 March 2017

- The amendments introduce a rebuttable presumption thatrevenue is not an appropriate basis for amortisation for an
intangible asset. This presumption can only be rebutted incertain limited circumstances.

- 20 -

Mandatory
adoption
IFRSs

（from
the yearbeginning)

To be adopted
by the Group

Subject of new standards/amendmentsfrom the year
ending- Clarification of the accounting requirements for contributions
from employees or third parties under defined benefit plans- Clarification that, if the amount of the contributions is
independent of the number of years of service, an entity may
IAS 19(Revised)recognise such contributions as a reduction in the service cost
Employee Benefits

1 July 2014

31 March 2016 in the period in which the service is rendered, which may affectremeasurement of defined benefit liabilities (assets)- If such contributions are linked to the period of service, it
shall be attributed to periods of service as a negative benefit,
similar to the allocation of the contributions to the periods ofservice- The amendments clarify that the high quality corporate bonds
used to estimate the discount rate for post-employment benefits
should be issued in the same currency as the benefits to be paid

IAS 19(Revised)(e.g. the euro):
Employee Benefits

1 January 2016 31 March 2017 - These amendments would result in the depth of the market forhigh quality corporate bonds being assessed at the currencylevel- In countries where there is no deep market for high quality
corporate bonds, the yield on government bonds should be used
- Clarification that a management entity, which provides key

IAS 24

Related Party(Revised)

Disclosuresmanagement personnel services, is a related party subject to the
1 July 2014

31 March 2016 related party disclosures- An entity which employs a management entity is required todisclose the expenses incurred for management services- On a sale or contribution of assets to a joint venture when
joint control or significant influence is retained in a transaction
involving an associate or a joint venture, the extent of any gainor loss recognised depends on whether the assets or subsidiary
constitute a business: when the assets or subsidiary constitute a

IAS 28Investments in(Revised)

Associates and Joint
Venturesbusiness, any gain or loss is recognised in full; when the assets
1 January 2016 31 March 2017 or subsidiary do not constitute a business, the entity’s share of
the gain or loss is eliminated- Application of the equity method by a non-investment entity
investor to an investment entity investor: in applying the equity
method to an associate or a joint venture that is an investment
entity, an investor may retain the fair value measurements thatthe associate or joint venture used for its subsidiaries- 21 -

Mandatory
adoption
IFRSs

（from
the yearbeginning)

To be adopted
by the Group

Subject of new standards/amendmentsfrom the year
ending- Clarification of the requirements relating to information
required by IAS 34 that is presented elsewhere within the
IAS 34

Interim Financial(Revised)

Reportinginterim financial report but outside the interim financial
1 January 2016 31 March 2017 statements: the amendments require that such information beincorporated by way of a cross-reference from the interim
financial statements to the other part of the interim financial
report- Clarification that determining whether a transaction meets thedefinition of business combination as defined in IFRS 3 on

IAS 40(Revised)

Investment Property

1 July 2014

31 March 2016

asset acquisition requires consideration of application of IFRS
3, not the incidental services under IAS 40, and consequently,
the separate application of both standards independently ofeach other may be required

The Group will apply the aforementioned standards and interpretations for the respective fiscal years.
The implications from adoption of these standards and interpretations have not yet been fully assessed by the Group; however, thesestandards and interpretations should have no significant impacts on the future consolidated financial statements of the Group, except
for IFRS 9 “Financial Instruments” and IFRS 15 “Revenue from Contracts with Customers”.

- 22 -

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 right, to variable returns from its involvementwith the investee and has ability to affect those returns through its power over the investee. The Group reassess 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 intra-group transactions, balances, income and expenses are eliminated in full in preparing consolidated
financial statements.
Changes in an interest of a subsidiary without losing control are accounted for as equity transactions. The carrying amounts of thecontrolling and non-controlling interests are adjusted to reflect the changes in their respective percentage 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.

- 23 -

Any excess of the cost of acquisition over the Group’s share of the net fair value of the identifiable assets, liabilities and contingent
liabilities of the associate recognised at the date of acquisition is tested for impairment. Any excess of the Group’s share of the net fairvalue of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition is recognised immediately in profit orloss. When a group entity transacts with an associate of the Group, profits and losses are eliminated to the extent of the Group’s
interest in the relevant associate.
③ Joint Arrangements
The Group classifies joint arrangements as either joint operations (having rights to assets and obligations for liabilities accounted foraccordingly) or joint ventures (having rights to net assets and equity accounted). The classification depends upon the rights andobligations of the parties to the arrangement.
Joint operators shall account for the assets, liabilities, revenues and expenses relating to their interests in joint operations. Joint
ventures shall apply the equity method. The Group does not have either joint operations or joint ventures.

(3) Business combination
Acquisitions of businesses are accounted for using the acquisition method. Acquisition-related costs are generally recognised in profit
or loss as incurred. The acquiree’s identifiable assets acquired and liabilities assumed are recognised at their fair values at theacquisition date, except for the following:
・ a deferred tax asset or liability arising from the assets acquired and liabilities assumed, and a liability (or asset, if any) related to theacquiree’s employee benefit arrangements;
・ a liability or an equity instrument related to the replacement of an acquiree’s share-based payment awards with share-based payment
awards of the acquirer; and・ an asset or disposal group that is classified as held for sale at the acquisition date in accordance with IFRS 5 “Non-current Assets
Held for Sale and Discontinued Operations”.
When the consideration transferred by the Group in a business combination includes assets or liabilities resulting from a contingent
consideration arrangement, the contingent consideration is measured at its acquisition-date fair value and included as part of theconsideration transferred in a business combination. Changes in the fair value of the contingent consideration that qualify as
measurement period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period
adjustments are adjustments that arise from additional information obtained during the ‘measurement period’ (which cannot exceed
one year from the acquisition date) about facts and circumstances that existed at the acquisition date.
The changes in the fair value of the contingent consideration resulting from events after the acquisition date are accounted for as
follows:(a) Contingent consideration classified as equity shall not be remeasured and any subsequent settlement shall be accounted for inequity; 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 IAS 39 “Financial Instruments: Recognition and Measurement” or other IFRSs as appropriate.
Goodwill is measured on the basis of the excess of the sum of the consideration transferred, the amount of any non-controllinginterests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree over the fair value ofidentifiable assets acquired, net of liabilities assumed at acquisition date. Negative goodwill is recognised immediately in profit or loss
as a bargain purchase gain.

- 24 -

Non-controlling interests in subsidiaries are reported in equity separately from the equity attributable to owners of the Company. Noncontrolling interests are initially measured either at fair value or at the non-controlling interests’ proportionate share of the recognised
amounts of the acquiree’s identifiable net assets on a transaction-by-transaction basis.
When a business combination is achieved in stages, the Group’s previously held equity interest in the acquiree is remeasured to thefair value at the acquisition date (i.e., the date when the Group obtains control) and the resulting gain or loss, if any, is recognised in
profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that were previously recognised in othercomprehensive income are reclassified to profit or loss where such treatment would be appropriate if that interest were disposed of.
Goodwill arising from business combinations before the IFRSs transition date is measured at their carrying amount in accordance withthe previous GAAP (i.e., Japanese GAAP) after performing an impairment test.

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

- 25 -

(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 project. Depreciation of these assets commences
when the assets are available for their intended use.
When significant components of property, plant and equipment are required to be replaced periodically, the Group recognises suchcomponents as individual assets to be depreciated with specific useful lives. All other repair and maintenance costs are recognised in
profit or loss as incurred.
Property, plant and equipment other than land and construction in progress are depreciated mainly on a straight-line basis over thefollowing estimated useful lives. The estimated useful lives, residual values and depreciation method are reviewed at each year-end,
with the effect of any changes in estimate being accounted for on a prospective basis.
Buildings and structures: 3-50 years
Machinery and carriers: 2-10 years
Tools, equipment and fixtures: 2-10 years
Leased assets are depreciated over their estimated useful lives where the transfer of the title of the assets is certain by the end of thelease term. Leased assets where the transfer of the title of the assets is not certain by the end of the lease term are depreciated over the
shorter of their estimated useful lives or their lease terms.

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

- 26 -

(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 the initial recognition. Intangible assets acquired in a business combination
are recognised 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 costs
Expenditures on research activities are recognised as expense in the period in which they are incurred.
An internally-generated intangible asset arising from development (or from the development phase of an internal project) is
recognised if, and only if, all of the following have been demonstrated:(a) the technical feasibility of completing the intangible asset so that it will be available for use or sale;(b) the intention to complete the intangible asset and use or sell it;(c) the ability to use or sell the intangible asset;(d) how the intangible asset will generate probable future economic benefits;(e) the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible
asset; and(f) the ability to measure reliably the expenditure attributable to the intangible asset during its development.
The amount initially recognised for internally-generated intangible assets is the sum of the expenses incurred from the date when theintangible assets first meet all of the recognition criteria listed above. The assets are amortised over the estimated period in which thedevelopment costs are expected to be recovered. If no future economic benefit is expected before the end of the life of assets, theresidual carrying amount is expensed.
Subsequent to initial recognition, internally-generated intangible assets are reported at cost less accumulated amortisation andimpairment losses. Where no internally-generated intangible asset can be recognised, development costs are recognised as an expensein the period in which they are incurred.
③ Amortisation of intangible assets
Amortisation is recognised on a straight-line basis over the estimated useful lives below. The Group does not have any intangible
assets with indefinite useful lives.
Patents: 7-12 years
Technology: 10-20 years
Customer related assets: 5-15 years
Software: 3-5 years④ Derecognition of intangible assets
An intangible asset is derecognised on disposal or when no future economic benefits are expected from use or disposal. Gains orlosses arising from derecognition of an intangible asset are recognised in profit or loss when the asset is derecognised.

- 27 -

(8) Goodwill
Goodwill arising in an acquisition of business is recognised as an asset at the date that control is acquired (i.e., the acquisition date).
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in theacquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the acquisition-date amountsof 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 of financial 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 pro-rata on the basis of the carrying
amount of each asset in the unit. Impairment losses recognised for goodwill are not reversed in subsequent periods. On disposal of acash-generating unit, goodwill attributed to the unit is included in the determination of the profit or loss on disposal.
The Group’s accounting policy for goodwill arising on the acquisition of an associate is described at “(2) Basis of consolidation – ②
Investments in associates” above.

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

- 28 -

(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.
The Group uses forward exchange contracts to manage the foreign exchange exposure of recognised financial assets or liabilities, or
future forecast transactions. Hedge accounting does not apply to these derivative transactions. Accordingly, derivative financial
instruments are classified as FVTPL.
Details of derivative transactions are set out in Note 23 “Financial instruments”.

(11) Financial assets other than derivative financial instruments① Initial recognition and measurement
All regular way purchases or sales of financial assets that require delivery of assets within the time frame established by regulation orconvention in the marketplace are recognised and derecognised on the trade date, and are initially measured at fair value plustransaction costs.
Financial assets are classified into the following specified categories:· financial assets at FVTPL;· held-to-maturity investments;· loans and receivables; and· available-for-sale financial assets.
The classification depends on the nature and holding purpose of the financial assets and is determined at the time of initial recognition.
② Financial assets classified as FVTPL
Financial assets are classified as FVTPL when the financial assets are either held for trading or are designated as an FVTPL.
A financial asset is classified as held for trading if:(a) it has been acquired principally for the purpose of selling it in the near term; or(b) on initial recognition it is part of a portfolio of identified financial instruments that the Group manages together and has a recent
actual pattern of short-term profit-taking; or(c) it is a derivative that is not designated and effective as a hedging instrument.
A financial asset other than a financial asset held for trading may be designated as FVTPL upon initial recognition if:(a) such designation eliminates or significantly reduces a measurement or recognition inconsistency (i.e., accounting mismatch) thatwould otherwise arise; or(b) the financial asset forms part of a group of financial assets or financial liabilities or both, which is managed and its performance isevaluated on a fair value basis, in accordance with the Group’s documented risk management or investment strategy, andinformation about the grouping is provided internally on that basis; or(c) it forms part of a contract containing one or more embedded derivatives, and IAS 39 “Financial Instruments: Recognition andMeasurement” permits the entire combined contract (asset or liability) to be designated as FVTPL.
Financial assets classified as FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit orloss. The net gain or loss recognised in profit or loss incorporates any dividends or interests earned on the financial asset and isincluded in the consolidated statement of comprehensive income.
As at 31 March 2014 and 2015, the Group did not have financial assets classified as FVTPL other than derivative financial
instruments designated as FVTPL.

- 29 -

③ Held-to-maturity investments
Financial assets except derivatives for which the Group has the positive intent and ability to hold to maturity are classified as held-tomaturity investments. Held-to-maturity investments are measured at amortised cost using the effective interest method less any
impairment, with income recognised on an effective yield basis. As at 31 March 2014 and 2015, the Group did not have held-tomaturity investments.
The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over
the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts, of which the calculationreflects effective interest method including premium or discount between counterparties through the expected life of the financial
assets, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.
④ Loans and receivables
Trade receivables, loans, and other receivables that are not quoted in an active market are classified as loans and receivables. Loans
and receivables are measured at amortised cost using the effective interest method, less any impairment losses. Principally, interest
income is recognised by applying the effective interest rate.
⑤ Available-for-sale financial assets
Financial assets other than derivatives, either designated as available-for-sale financial assets or not classified as FVTPL, held-tomaturity investments or loans and receivables, are classified as available-for-sale financial assets.
Available-for-sale equity investments that are listed and traded in an active market are classified as available-for-sale financial assets
and stated at fair value. The Group also has investments in unlisted equity investments that are not traded in an active market but alsoclassified as available-for-sale financial assets, which are stated at fair value using valuation techniques. Fair value is determined in
the manner described in Note 23 “Financial instruments”. Gains and losses arising from changes in fair value are recognised in othercomprehensive income, with the exception of impairment losses and foreign exchange gains and losses on monetary assets being
recognised in profit or loss.
Where the financial asset is derecognised or is determined to be impaired, the cumulative gain or loss that was previously accumulated
in accumulated other comprehensive income is reclassified to profit or loss.
Dividends on available-for-sale financial assets (equity instruments) are recognised in profit or loss when the Group’s right to receive
the dividends is established. The fair value of available-for-sale financial assets (monetary assets) denominated in a foreign currency isdetermined in that foreign currency and translated at the spot rate at the end of the reporting period. The foreign exchange gains andlosses that were recognised in profit or loss are determined based on the amortised cost of the monetary asset. Other foreign exchange
gains and losses are recognised in other comprehensive income.

- 30 -

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

- 31 -

(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.

- 32 -

(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 option), which are incentive plans to 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 24 “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.
Accounting policies described above are applied to share-based payments which were granted after 7 November 2002 and vested on
or after 1 April 2008.

(17) Dividend 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.

- 33 -

(18) Equity instruments and financial liabilities issued by the Groupexcluding derivative instruments① Equity instruments (shares)
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.
② Financial liabilities
Financial liabilities are classified as either financial liabilities classified as FVTPL or other financial liabilities.
③ Financial liabilities classified as FVTPL
Financial liabilities classified as FVTPL are either held for trading or designated as an FVTPL.
A financial liability is classified as held for trading if:(a) it has been acquired principally for the purpose of selling or redeeming it in the near term; or(b) on initial recognition it is part of a portfolio of identified financial instruments that the Group manages together and has a recent
actual pattern of short-term profit-taking; or(c) it is a derivative that is not a financial guarantee contract and is not designated as a hedging instrument.
A financial liability other than a financial liability held for trading may be designated as FVTPL upon initial recognition if:(a) such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or(b) the financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and its performanceis evaluated on a fair value basis, in accordance with the Group’s documented risk management or investment strategy, andinformation about the grouping is provided internally on that basis; or(c) it forms part of a contract containing one or more embedded derivatives, and IAS 39 “Financial Instruments: Recognition andMeasurement” permits the entire combined contract (asset or liability) to be designated as FVTPL.
Financial liabilities designated as FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in
profit or loss. The net gain or loss recognised in profit or loss is included in finance costs in the consolidated statement ofcomprehensive income. Fair value is determined in the manner described in Note 23 “Financial instruments”.
As at 31 March 2014 and 2015, the Group did not have financial liabilities as FVTPL other than derivative financial instruments
designated as FVTPL.
④ Other financial liabilities
Other financial liabilities, including bank loans, are initially measured at fair value, net of transaction costs. Other financial liabilities
are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yieldbasis.
⑤ Derecognition of financial liabilities
The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or they expire.
⑥ Financial guarantee contract
Financial guarantee contract are initially measured at their fair values and subsequently measured at the higher of:· the amount of the obligation under the contract, as determined in accordance with IAS 37 “Provisions, Contingent Liabilities andContingent Assets”; and· the amount initially recognised less cumulative amortisation recognised in accordance with IAS 18 “Revenue”.

- 34 -

(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.

- 35 -

(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.

- 36 -

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

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

- 37 -

(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 liability method on temporary differences, tax loss carry forward and tax credits at the reporting
date.
Deferred tax assets or liabilities are not recognised for:· 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 (exclude business combination)· Taxable temporary differences associated with investments in subsidiaries and associates where the timing of the reversal of thetemporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable
future.
Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets arising from deductible
temporary differences are only recognised to the extent that it is probable that there will be sufficient taxable profits against which toutilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Unrecognised deferred tax
assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits willallow the deferred tax assets to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled
or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting
period.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same tax authority.
In the case of a business combination, the tax effect is included in the accounting for the business combination, when measuring theamount of goodwill or determining negative goodwill.

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

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

- 38 -

4.Critical accounting judgements and key sources of estimation uncertainty(1) Application of estimates and assumptions
Preparation of consolidated financial statements requires management to make estimates and assumptions in order to determine thereported amounts of certain assets, liabilities, income and expense items, as well as certain amounts disclosed in the notes to theconsolidated financial statements relating to contingent liabilities.
The following are items that require estimates and assumptions and are considered significant:· Determination of net realisable value of obsolete inventory (Note 13 “Inventories”)· Expected cash flow from overdue trade and other receivables (Note 23 “Financial instruments”)· Useful lives of property, plant and equipment, including assets under finance lease (Note 3 “Significant accounting policies”, Note 3(5) “Property, plant and equipment” and Note 3 (7) “Intangible assets”)· Assumptions used to estimate future cash flows of cash-generating units to assess the recoverability of property, plant and equipment
and intangible assets, including goodwill (Note 8 “Impairment losses”)· Valuation techniques used to value available-for-sale financial assets without an active market (Note 23 “Financial instruments”)· Recoverability of deferred tax assets (Note 10 “Deferred taxes and income taxes”)· Assumptions used for treatment of retained earnings of overseas subsidiaries and associates for tax purposes (Note 10 “Deferredtaxes and income taxes”)· Discrepancy in opinion with a tax authority relating to tax calculations (Note 10 “Deferred taxes and income taxes”)· Assumptions used to calculate retirement benefit obligations (Note 19 “Retirement benefit plans”)· Asset retirement obligations arising from legal obligations and constructive obligations (Note 20 “Provisions”)· Fair value of stock options (Note 24 “Share-based payments”)· Possibility of outflow of resources embodying economic benefits on contingent liabilities (Note 33 “Contingent liabilities”)
The estimates and underlying assumptions are based on historical experience and other factors that are considered to be relevant.
Actual results may differ from those estimates. The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions of the 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 the markets the Group operates in· Development of new products and timing of development· Changes in the political, economic and regulatory environment, shortage of labour, labour strike, natural disasters, and impact of
unexpected international affair in the countries the Group belongs to and operates in· The effect of deferred taxes and income taxes on the transactions between locations in different tax jurisdictions withdifferent tax rates, or the transactions between taxable and tax-exempt businesses(including the discrepancies in opinion between the Company and the tax authority)· Fluctuation of currency exchange rates· The trend of environmental and governmental regulation
Global economic stagnation and the occurrence of natural disasters may have a significant impact on future profitability of the Group.
Future profitability of the Group may affect the estimates for the following:· Impairment of property, plant and equipment and intangible assets including goodwill (Note 8 “Impairment losses”)· Recoverability of deferred tax assets (Note 10 “Deferred taxes and income taxes”)- 39 -

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

Electronics related products

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

Imaging related products

Optical lenses, Optical glasses,
Digital camera modules, Optical devices, Laser equipment

Life Care

Health Care related products

Eyeglass lenses and Contact lenses

Medical related products

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

Other

Design of information systems and other services- 40 -

(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

Information

2014

Technology

Life Care

Other

Total

Adjustments

Consolidated

Revenue from externalcustomers

159,333

265,470

2,739

427,54233

427,575

Inter-segment sales

186

0

2,083

2,269

(2,269)－Total

159,520

265,470

4,822

429,811(2,237)427,575

368

321

9

699

438

1,137

Interest income
Interest expense
Depreciation and amortisation

(318)

(312)

(0)

(630)

(665)

(1,295)(16,925)(16,698)(125)(33,747)(144)(33,891)

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

0

154

－

154

(422)

(268)

(3,722)(197)－(3,918)(852)(4,770)(103,069)(199,051)(4,104)(306,224)

3,222(303,002)

35,854

49,689602

86,146(659)

85,486

8,736

7,834

143

16,713

125

16,838Other disclosure
Capital expenditure（Millions of Yen）
For the year ended 31 March

Information

2015

Technology

Life Care

Other

Total

Adjustments

Consolidated

Revenue from externalcustomers

180,164

306,653

3,117

489,933

27

489,961Inter-segment sales

247

0

1,749

1,997

(1,997)－

Total

180,411306,653

4,866

491,930(1,969)489,961Interest income

437

337

5

778

630

1,408

Interest expense

(321)

(376)

(0)

(697)

(425)

(1,122)(16,185)(18,388)(98)(34,671)(181)(34,852)

(0)

(16)

－

(17)

7

(10)

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

－

－

－

－

(286)

(286)

(107,038)(235,273)(4,044)(346,356)

9,506(336,850)

57,30352,936727

110,967

7,281

118,249

6,953

13,11791

20,161

23

20,184

Other disclosure
Capital expenditure- 41 -

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

Information

2015

Technology

Life Care

Other

Total

Adjustments

Consolidated

Revenue from externalcustomers

1,499,239

2,551,828

25,934

4,077,001

228

4,077,229

Inter-segment sales

2,055

2

14,558

16,616(16,616)－

Total

1,501,295

2,551,830

40,493

4,093,617(16,388)4,077,229

3,634

2,800

38

6,473

5,242

11,715Interest income
Interest expense
Depreciation and amortisation(2,672)(3,129)(3)(5,804)(3,536)(9,340)(134,683)(153,015)(818)(288,515)(1,506)(290,021)

(1)

(137)

－

(138)

58

(80)

Share of profit (loss) of
associates
Impairment losses

－

－

－

－

(2,379)(2,379)Others(890,720)(1,957,837)(33,656)(2,882,213)

79,102(2,803,111)

Segment profit before tax

476,854

440,512

6,054

923,420

60,593

984,01257,862

109,151758

167,772

192

167,963

Other disclosure
Capital expenditure
Note:(i) Adjustments to revenue from external customers of 33 million yen and 27 million yen (228 thousand U.S. dollars) for the years
ended 31 March 2014 and 2015, respectively, represent revenue by the R&D department which is not included in any reportablesegment.
(ii) Adjustments to segment profit before tax of (659) million yen consist of the elimination of an inter-segment transaction of 3
million yen, and profit or loss of the Company’s headquarters, the R&D department and overseas holding companies (after eliminationof dividend income from group companies) of (662) million yen for the year ended 31 March 2014 and 7,281 million yen (60,593
thousand U.S. dollars) consist of elimination of inter-segment transaction of (8) million yen ((67) thousand U.S. dollars), and profit orloss of the Company’s headquarters, the R&D department and overseas holding companies (after elimination of dividend income fromgroup companies) of 7,290 million yen (60,660 thousand U.S. dollars) for the year ended 31 March 2015.
(iii) Transfer prices between operating segments are on an arm’s-length basis for the years ended 31 March 2014 and 2015.

- 42 -

(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 2014 and 2015:(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 2014

31 March 2015

31 March 2015

(Note 2))

Information Technology
Electronics related products

115,973

134,469

1,118,990

Imaging related products

43,36045,695380,249

Information Technology total

159,333

180,164

1,499,239

Health Care related products

194,618

227,322

1,891,671

Medical related products

70,852

79,331

660,156

Life Care total

265,470306,653

2,551,828

2,739

3,117

25,934

Life Care

Other
Corporate (R&D)
Total revenue from external

33

27

228

427,575

489,961

4,077,229

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

(Millions of Yen)

(Thousands of U.S. Dollars

For the year ended

For the year ended

For the year ended

31 March 2014

31 March 2015

31 March 2015

(Note 2))

Japan

143,560

145,3121,209,223

U.S.A.

48,721

59,231

492,891China

47,47853,263443,227

Others187,815232,155

1,931,888

Total

427,575

489,961

4,077,229

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

- 43 -

Non-current assets(Millions of Yen)

(Millions of Yen)

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

For the year ended

For the year ended

31 March 2014

31 March 2015

31 March 2015

Japan

39,71635,142

292,437

Thailand

27,58027,508228,908

Vietnam

20,773

19,710

164,015

China

14,245

17,663

146,983

Others61,11657,809481,058

Total

163,429

157,8311,313,401

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

- 44 -

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

Buildings and Machinery andstructures

carriers

Tools,

Land

Construction inequipment andTotal

progress

fixtures
Balance at 1 April 2013

93,031

264,352

47,581

10,527

22,916438,407

Additions

1,048

1,702

1,865

17

10,53815,169Business combinations

74

768

160

－

12

1,014

(1,934)(5,406)(1,355)

(37)

(73)

(8,804)

(62)

－

－

－

－

(62)

2,821

16,953

1,005－(20,778)

－

3,664

9,923

2,264

94

849

16,795(40)(2,288)

234

－

309

(1,784)

Balance at 31 March 2014

98,602

286,00351,753

10,602

13,773

460,733

Additions

1,021

1,978

2,556

－

13,671

19,225

80

－

8

40

－

128

Disposals (i)(4,432)(12,524)(3,613)

(218)

(253)

(21,040)

Transfer from construction in

2,763

16,763

1,197－(20,723)－

7,226

24,265

3,084

317

658

35,5491,118(16,704)(1,662)－(240)(17,488)

106,377

299,781

53,322

10,741

6,887

477,108

Disposals (i)Reclassification to assets held
for saleTransfer from construction inprogress
Effect of foreign currency
exchange differences
OthersBusiness combinations

progress
Effect of foreign currency
exchange differences
OthersBalance at 31 March 2015

- 45 -

（Millions of Yen）
Accumulated depreciation andimpairment losses

Buildings and Machinery andstructures

carriers

Tools,

Land

Construction inequipment andTotal

progress

fixtures
Balance at 1 April 2013

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

(264)

(112)

(297,660)

Depreciation expense(5,130)(19,841)(4,125)－－(29,096)

Impairment losses (ii)(2,555)

(740)

(104)

(852)

(310)

(4,561)

Disposals (i)

1,417

5,201

1,280

－

－

7,898

57

－

－

－

－

57

(1,742)(7,394)(1,564)－(14)(10,714)

Reclassification to assets held
for saleEffect of foreign currency
exchange differences
Others

62

1,827

944

－

22

2,855

Balance at 31 March 2014

(56,519)(237,577)(35,594)(1,116)(414)(331,221)

Depreciation expense(5,169)(19,824)(4,136)－－(29,128)

Impairment losses (ii)

－

(5)

(128)

－

(83)

(216)

3,247

12,300

3,184

－

186

18,917(3,611)(18,678)(2,355)－(76)(24,720)(986)

16,519

1,811

－

105

17,450(63,037)(247,264)(37,218)(1,116)(282)(348,917)

Disposals (i)Effect of foreign currency
exchange differences
OthersBalance at 31 March 2015

（Millions of Yen）
Carrying amount

Buildings and Machinery andstructures

carriers

Tools,

Land

equipment andConstruction in

Total

progress

fixtures
Balance at 1 April 2013

44,40247,721

15,556

10,26322,804

140,747

Balance at 31 March 2014

42,083

48,426

16,1599,486

13,359129,513

Balance at 31 March 2015

43,34052,517

16,104

9,625

6,605

128,191- 46 -

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

Buildings and Machinery andstructures

carriers

Tools,

Land

Construction inequipment andTotal

progress

fixtures
Balance at 31 March 2014
Additions
Business combinations
Disposals (i)820,522

2,379,983

430,668

88,225

114,615

3,834,014

8,493

16,456

21,268－

113,764

159,981

669

－

63

333

－

1,064

(36,883)(104,219)(30,064)(1,814)(2,103)(175,083)

22,990139,497

9,961－(172,448)－

60,132201,920

25,661

2,635

5,476

295,824(1,995)(145,525)

57,3093,970,276

Transfer from construction inprogress
Effect of foreign currency
exchange differences
OthersBalance at 31 March 2015

9,303

(139,000)(13,833)－

885,225

2,494,639

443,724

89,380(Thousands of U.S. Dollars (Note 2))
Accumulated depreciation andimpairment losses

Buildings and Machinery andstructures

carriers

Tools,

Land

Construction inequipment andTotal

progress

fixtures
Balance at 31 March 2014

(470,328)(1,977,005)(296,200)(9,287)

Depreciation expense(43,012)(164,962)(34,415)

Impairment losses (ii)

－

(39)

(1,066)27,023102,353

exchange differences(30,046)

Others(8,204)(524,567)

Disposals (i)(3,449)(2,756,270)－－(242,389)

－

(689)

(1,795)26,499－1,548

157,423(155,429)(19,599)－(632)(205,706)

137,467

15,071－

877

145,210(2,057,616)(309,710)(9,287)(2,345)(2,903,526)

Effect of foreign currency

Balance at 31 March 2015

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

Buildings and Machinery andstructures

carriers

Tools,

Land

equipment andConstruction in

Total

progress

fixtures
Balance at 31 March 2015

360,658

437,022

134,01380,09254,965

1,066,749

Note:(i) Gain and loss arising from sale or disposal of property, plant and equipment for the years ended 31 March 2014 and 2015, are set
out in Note 25 “Revenue and expenses (excluding finance income and costs)”. Gain and loss on sale of assets held for sale areincluded in ‘gain on sale of property, plant and equipment’ and ‘loss on sale of property, plant and equipment’ in Note 25.
(ii) Details of impairment losses are set out in Note 8 “Impairment losses”.
(iii) Property, plant and equipment under construction are included in ‘construction in progress’ in the table above.

- 47 -

Buildings and structures of 34 million yen (286 thousand U.S. dollars) and machinery and carriers of 22 million yen (181 thousand
U.S. dollars) have been pledged as collateral to secure 35 million yen (290 thousand U.S. dollars) in ‘Interest-bearing long-term debt’
and 4 million yen (36 thousand U.S. dollars) in ‘Interest-bearing short-term debt’ as at 31 March 2015. Refer to Note 16 “Interestbearing debt” for details. In addition to the above, buildings in the amount of 57 million yen (477 thousand U.S. dollars) and land in
the amount of 1 million yen (9 thousand U.S. dollars) were provided as collateral for the conditional obligation in the amount of 91
million yen (756 U.S. dollars) associated with the government grant.
Details of commitments for the acquisition of property, plant, and equipment are set out in Note 34 “Commitments for expenditure”.
There is no borrowing cost capitalised and included in the cost of acquisition of property, plant and equipment.
The following are carrying amounts for property, plant and equipment under finance leases as at 31 March 2014 and 2015, which areincluded in each corresponding amount in the table above:(Millions of Yen）
Buildings and structures Machinery and carriers

Tools, equipment andfixtures

Total

Balance at 31 March 2014

89

90

296

475

Balance at 31 March 2015

71

65

324

459

(Thousands of U.S. Dollars (Note 2))
Buildings and structures Machinery and carriers
Balance at 31 March 2015

587

537

Tools, equipment andfixtures

Total

2,696

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

- 48 -

3,820

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

Goodwill

Intangible assets
SoftwareBalance at 1 April 2013
AdditionsTechnology

Customer

Patents

related assets

Others (i)Total

11,19814,025

11,128

10,491

7,497

4,706

47,847

－

810

－

16

31

813

1,670

Acquisitions through businesscombinations

2,747

98

1,275

－

5,120

880

7,373

Disposals (ii)

－

(274)

－

－

－

(9)

(283)

262

266

281

8

(18)

573

1,109

Effect of foreign currency
exchange differences
OthersBalance at 31 March 2014
Additions

－

209

(1)

(3)

－

7

211

14,207

15,134

12,682

10,512

12,6306,970

57,927

－

807

11

21

65

61

966

Acquisitions through businesscombinations

－

3

－

－

959

1

963

Disposals (ii)

－

(267)

(2)

－

－

(7)

(276)

exchange differences

(429)

857

429

12

(1,124)300

474

Others

(146)

384

0

20

(10)

168

562

Balance at 31 March 2015

13,632

16,917

13,121

10,565

12,5207,493

60,616

Effect of foreign currency（Millions of Yen）
Accumulated amortisation andGoodwill

impairment losses
Balance at 1 April 2013
Amortisation expense (iii)
Impairment loss (iv)
Disposals (ii)Intangible assets
Patents

Customer

SoftwareTechnology(2,831)(10,470)(7,940)(7,464)(845)(1,939)(28,658)－(1,399)(863)(1,195)

(847)

(490)

(4,795)

(148)

(13)

－

－

－

(49)

(62)

－

245

－

－

－

7

252

(267)

(268)

(195)

(2)

(6)

(265)

(735)

related assets

Others

Total

Effect of foreign currency
exchange differences
Others

－

3

7

－

(7)

14

17

Balance at 31 March 2014

(3,246)(11,901)(8,992)(8,661)(1,705)(2,722)(33,980)

Amortisation expense (iii)－(1,389)(859)(1,202)(1,386)(887)(5,724)

Impairment loss (iv)

(45)

－

－

－

－

(25)

(25)

Disposals (ii)

－

266

－

－

－

8

273

exchange differences

(517)

(716)

(435)

(3)

286

(181)

(1,048)Others

146

(64)

－

(11)

(97)

(280)

(452)

(3,662)(13,803)(10,286)(9,877)(2,901)(4,088)(40,955)

Effect of foreign currency

Balance at 31 March 2015

- 49 -

（Millions of Yen）
Carrying amount

Goodwill

Intangible assets
SoftwareTechnology

Customer

Patents

related assets

Others

Total

Balance at 1 April 2013

8,367

3,555

3,187

3,027

6,652

2,767

19,189Balance at 31 March 2014

10,961

3,232

3,691

1,851

10,925

4,248

23,947

Balance at 31 March 2015

9,970

3,114

2,834

688

9,619

3,405

19,661(Thousands of U.S. Dollars (Note 2))
Cost

Goodwill

Intangible assets
Technology

118,224

125,935

105,536

87,475

105,10257,998482,045

－

6,716

90

177

542

511

8,037

combinations

－

24

－

－

7,980

6

8,010

Disposals (ii)－

(2,226)

(13)

－

－

(59)

(2,298)exchange differences(3,573)

7,133

3,574

98

(9,356)

2,500

3,948

Others(1,211)

3,194

(3)

166

(81)

1,401

4,678

Balance at 31 March 2015

113,440

140,776

109,184

87,915

104,188

62,356504,420

Balance at 31 March 2014
Additions

Patents

Customer

Softwarerelated assets

Others (i)Total

Acquisitions through business

Effect of foreign currency(Thousands of U.S. Dollars (Note 2))
Accumulated amortisation andGoodwill

impairment losses

Intangible assets
SoftwareTechnology

Patents

Customer
related assets

Others

Total

Balance at 31 March 2014

(27,009)(99,036)(74,823)(72,070)(14,186)(22,648)(282,765)

Amortisation expense (iii)－(11,557)(7,152)(10,001)(11,537)(7,385)(47,632)

(372)

－

－

－

－

(211)

(211)

－

2,213

－

－

－

63

2,276

(4,303)(5,954)(3,621)

(22)

2,383

(1,503)(8,717)

1,211

(531)

－

(95)

(804)

(2,333)(3,762)(30,473)(114,866)(85,597)(82,188)(24,144)(34,018)(340,812)

Impairment loss (iv)
Disposals (ii)
Effect of foreign currency
exchange differences
OthersBalance at 31 March 2015

- 50 -

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

Goodwill

Balance at 31 March 2015

82,967

Intangible assets
SoftwareTechnology

25,911

23,587

Customer

Patents

related assets

5,727

Others80,04428,338

Total
163,607

Note:(i) There were no significant internally-generated intangible assets for the years ended 31 March 2014 and 2015.
(ii) Loss on disposal of intangible assets is set out in Note 25 “Revenue and expenses (excluding finance income and costs)”, (6) Other
expenses.
(iii) Amortisation expense is included in the line item ‘Depreciation and amortisation’ in the consolidated statement of comprehensive
income.
(iv) Refer to Note 8 “Impairment losses” for details of impairment losses.
No intangible assets have been pledged as collateral to secure the debt. There is no restriction on legal title of these assets. Details ofcommitments for the acquisition of intangible assets are set out in Note 34 “Commitments for expenditure”.
The details of intangible assets in the consolidated statement of financial position are as follows:
As at 31 March 2014

As at 31 March 2015
Carrying amount

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

U.S. Dollars

lives (Year)

lives (Year)(Millions of Yen)

(Note 2))
Technology
Patents

Medical related
products

2,962

10

2,313

19,252

10

1,604

1

536

4,461

0

6,896

10

6,220

51,760

9

2,771

11

2,276

18,941

10

Medical related
products
Health Care related

Customer related

products

assetsMedical related
products- 51 -

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

(Millions of Yen)

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

For the year ended 31 March 2014

For the year ended 31 March 2015

For the year ended 31 March 2015

Buildings and structures

2,555

－

－

Machinery and equipment

740

－

－

Tools, equipment and fixtures

104

85

704

Land

852

－

－

Construction in progress

310

131

1,091

Total impairment losses on
4,561

216

1,795

Goodwill

148

45

372

Intangible assets

62

25

211

4,770

286

2,379

property, plant and equipment

Total impairment losses(1) Cash-generating units

The Group identifies each strategic business unit (“SBU”) as a cash-generating unit for impairment testing purposes. Each business
unit has been set based on the production and sale of product lines. For any asset expected to be sold or disposed, or any idle asset, an
individual asset is tested for impairment.

- 52 -

(2) Impairment losses on assets in business units
For the year ended 31 March 2014
The Group identified indications of impairment due to the delay in profit recovery in the electronics related products, although theGroup has been promoting the products by developing and improving their brand recognition. In addition, the Group performed an
impairment test for goodwill in Life Care based on the latest business plan, and the following impairment losses were recognised.
Recoverable amount was measured at the value in use and determined using cash flow projections based on the financial budgets forthe following four or five fiscal years approved by the Group’s management, and a discount rate of 10% per annum which is the
SBU’s pre-tax weighted average capital cost (“WACC”).
(Millions of Yen)
Impairment losses

Information Technology
Electronics related products
Buildings and structures

558

Machinery and carriers

647

Tools, equipment and fixtures

1

Total property, plant and equipment

1,207

Total Information Technology

1,210

Software2

Life Care
Health Care related products
Goodwill

148
Total Life Care

148

Total

1,357

For the year ended 31 March 2015
No impairment losses on assets were recognised in business units.

- 53 -

(3) Impairment losses on idle assets
For the year ended 31 March 2014, the carrying amount of idle assets and the assets whose intended purpose the Group plans tochange following a business restructuring, and which were not expected to be used in the future, was written down to the recoverable
amount which was measured at fair value less related selling costs, and the corresponding impairment loss was recognised. The fairvalue was based on an appraisal or publicly posted land price. For any asset to be disposed of, its recoverable amount was considered
to be zero.
Impairment losses were recognised as follows for the year ended 31 March 2014:(Millions of Yen)
Impairment losses

Information Technology
Buildings and structures

1,996

Machinery and carriers

93

Tools, equipment and fixtures

103

Construction in progress

310

Total property, plant and equipment

2,502

Software10
Total Information Technology

2,512Life Care
Other intangible assets

49
Total Life Care49

CorporateLand

852
Total Corporate

852

Total

3,413

For the year ended 31 March 2015, with regards to some products developed in R&D, as the initial plan for commercialisation that theGroup promoted has been delayed, the carrying amount of the related assets (including goodwill), which were not expected to be usedin the future, was written down to the recoverable amount which was measured at fair value less related selling costs, and thecorresponding impairment loss was recognised.
Impairment losses were recognised as follows for the year ended 31 March 2015:(Millions of Yen)

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

Impairment losses

Impairment losses

Corporate
Tools, equipment and fixtures
Construction in progress

85

704

131

1,091

216

1,795

Goodwill

45

372

Other intangible assets

25

211

286

2,379

Total Property, plant and equipment

Total- 54 -

(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 a discount rate of 5% to 10% per annum
which is the cash-generating units’ pre-tax WACC. Cash flow projections during the budget period are based on the same expected
gross margins and inflation throughout the budget period. The cash flows beyond budget period have been extrapolated using a steadyannum 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 thebefore tax, weighted average cost of capital) on which recoverable amount is based would not cause the aggregate carrying amount toexceed the aggregate recoverable amount of the cash-generating unit.
The carrying amount of goodwill was allocated to the cash-generating units as follows:（Millions of Yen）
As at 31 March 2014

Life Care
Health Care related
products
Eyeglass lenses
Japan

Adjustments

Medical related products

R&D

Total

Medical accessories
791

733

－

1,524

Americas

6,175

71

38

6,284

Europe

694

911

－

1,605

1,549

－

－

1,549

9,209

1,714

38

10,961

Asia
Total（Millions of Yen）
As at 31 March 2015

Life Care
Health Care related
products
Eyeglass lenses
Japan

Adjustments

Medical related products

R&D

Total

Medical accessories
791

733

－

1,524

Americas

5,120

78

－

5,198

Europe

655

838

－

1,492

1,756

－

－

1,756

8,322

1,648

－

9,970

Asia
Total

(Thousands of U.S. Dollars (Note 2))
As at 31 March 2015

Life Care
Health Care related
products
Eyeglass lenses

Adjustments

Medical related products

R&D

Total

Medical accessories

Japan

6,585

6,098

－

12,682

Americas42,607647－

43,254

Europe

5,448

6,971

－

12,419Asia

14,611－－

14,611

69,251

13,716－82,967

Total
Note:

(i) Impairment loss on goodwill of Health Care related products (Eyeglass lens) was recognised in the amount of 148 million yen forthe year ended 31 March 2014.
(ii) Impairment loss on goodwill of Corporate (R&D) was recognised in the amount of 45 million yen (372 thousand U.S. dollars) for
the year ended 31 March 2015.
- 55 -

9.Investments in associates
A summary of the Group’s associates, which are not individually significant, is as follows:(Thousands of U.S.

(Millions of Yen)

(Millions of Yen)

As at / for the year

As at / for the year

As at / for the year

ended 31 March 2014

ended 31 March 2015

ended 31 March 2015

(268)

(10)

(80)

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

Dollars (Note 2))

31

7

59

The Group’s share of comprehensive income (loss)

(238)

(2)

(21)

The Group’s share of net assets

140

186

1,544

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

Place of
Name of associate

Principal activity incorporation andSegment

operation
AVANSTRATE, INC.

Production and

As at

As at

31 March 2014

31 March 2015

JAPAN

Corporate

46.6

46.6

CHINA

Information

49.0

49.0

－

39.5

sale of glass
substrate for thinfilm transistor(TFT) liquid
crystalJIASHAN CANDEO OPTICAL

Production and

GLASS CO., LTD.

sale of special

Technology

glass, such as
coloured glass
HTK LENTES OFTALMICASSales of optical

LTDA

lens

BRAZIL

Life Care

The Group’s unrecognised share of loss on associates is as follows:(Thousands of U.S.

(Millions of Yen)

(Millions of Yen)

As at / for the year

As at / for the year

As at / for the year

Dollars (Note 2))

ended 31 March 2014

ended 31 March 2015

ended 31 March 2015

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

2,722(2,347)(19,529)

The Group’s unrecognised share of accumulated net loss

2,722

375

3,124

- 56 -

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

Recognised inin otherBusiness

As at

1 April 2013

profit or loss

comprehensive

combinations

31 March 2014

incomeTemporary differences
Enterprise tax payable

364

448

－

2

813

Written down inventories

495

704

－

179

1,377

Allowance for doubtful

652

77

－

33

761

accounts
834

(52)

－

32

814

Accrued expenses

5,002(1,257)

－

348

4,093

Unrealised profit on inventories

2,472

(12)

－

－

2,460

Depreciation and amortisation

5,366

(738)

－

0

4,629

Provisions

Tax goodwill
Impairment losses
Exchange differences on

(0)

0

－

－

－

1,146

(141)

－

－

1,005

712

－

(160)

－

552

translating foreign operations
3,392

347

(15)

27

3,751

Subtotal

20,436

(625)

(175)

620

20,255

Undistributed retained earnings(1,106)

(901)

－

－

(2,007)

Depreciation and amortisation(7,920)630－(1,679)(8,970)Net gain/(loss) on revaluation

(312)

－

72

－

(240)

(586)

(5)

－

－

(591)

(9,924)(276)

72(1,679)(11,808)

2,615

(828)

－

276

2,063

Othersof subsidiaries

of available-for-sale financial
assetsOthersSubtotal
Tax losses carryforward and tax
credits
Tax losses carryforward

188

(188)

－

－

－

Subtotal

2,802(1,015)

－

276

2,063

Total

13,314(1,917)

(103)

(784)

10,510

Tax credits

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

- 57 -

（Millions of Yen）
Recognised
As at

Recognised inin otherBusiness

As at

1 April 2014

profit or loss

comprehensive

combinations

31 March 2015

incomeTemporary differences
Enterprise tax payable

813

(432)

－

－

381

Written down inventories

1,377

173

－

－

1,550

Allowance for doubtful

761

(267)

－

－

494

814

53

－

26

893

Accrued expenses

4,093

(322)

－

41

3,811

Unrealised profit on inventories

2,460

564

－

－

3,024

Depreciation and amortisation

4,629(3,043)

－

27

1,612

Impairment losses

1,005

(255)

－

－

750

552

－

(480)

－

72

accounts
Provisions

Exchange differences ontranslating foreign operations

3,751

(119)

39

26

3,697

Subtotal

20,255(3,648)

(442)

119

16,284

Undistributed retained earnings(2,007)

(476)

－

－

(2,483)

Depreciation and amortisation(8,970)

3,408

－

230

(5,331)

Net gain/(loss) on revaluation

(240)

－

245

－

4

(591)

(10)

－

8

(593)

(11,808)

2,923

245

238

(8,402)

2,063

(415)

－

95

1,743

－

272

－

－

272

Subtotal

2,063

(143)

－

95

2,015

Total

10,510

(868)

(197)

452

9,897

Othersof subsidiaries

of available-for-sale financial
assetsOthersSubtotal
Tax losses carryforward and tax
credits
Tax losses carryforward
Tax credits

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

- 58 -

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

Recognised inotherBusiness

As at

1 April 2014

profit or loss

comprehensive

combinations

31 March 2015

incomeTemporary differences
Enterprise tax payable

6,769(3,596)

－

－

3,173

Written down inventories

11,458

1,438

－

－

12,897

Allowance for doubtful

6,336(2,221)

－

－

4,115

Provisions

6,771

440

－

218

7,429

Accrued expenses

34,058(2,683)－338

31,712

Unrealised profit on inventories

20,471

4,696

－

－

25,167

Depreciation and amortisation

38,517(25,325)－

222

13,415

Impairment losses

8,361(2,122)

－

－

6,239

Exchange differences on

4,595

－

(3,997)－599

accounts

translating foreign operations
31,217

(988)

322

214

30,766

Subtotal

168,553(30,359)(3,675)991

135,511

Undistributed retained earnings(16,701)(3,961)－－(20,662)

Depreciation and amortisation(74,641)

28,363－

1,918(44,359)

Net gain/(loss) on revaluation(2,000)

－

2,037

－

37

(4,919)

(81)

－

63

(4,936)(98,261)

24,322

2,037

1,981

(69,921)

17,165(3,453)－793

14,504

Othersof subsidiaries

of available-for-sale financial
assetsOthersSubtotal
Tax losses carryforward and tax
credits
Tax losses carryforward

－

2,265

－

－

2,265

Subtotal

17,165(1,188)－793

16,769Total

87,457(7,226)(1,638)

3,765

82,359Tax credits

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

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

(Millions of Yen)

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

As at

As at

As at

31 March 2014

31 March 2015

31 March 2015

Tax losses carryforward

14,80813,388111,410

Deductible temporary differences

3,340

4,672

38,87918,14718,060150,289Total

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

(Millions of Yen)

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

As at

As at

As at

31 March 2014

31 March 2015

31 March 2015

Year 1

799

288

2,399

Year 2

640

611

5,085

Year 3

1,203

753

6,265

Year 4

1,455

1,531

12,743

10,712

10,20584,91914,80813,388111,410

Year 5 or later
Total

The aggregate amounts of temporary differences associated with undistributed retained earnings of the subsidiaries for which deferred
tax liabilities have not been recognised at 31 March 2014 and 2015, were 264,188 million yen and 313,356 million yen (2,607,608
thousand U.S. dollars), respectively. No liability has been recognised in respect of these differences because the Group is in a position
to control the timing of the reversal of the temporary differences and it is probable that such differences will not reverse in theforeseeable future.
The Company recognised no deferred tax assets on the tax losses as at 31 March 2014 and 2015.

- 60 -

(2) Income taxes
In Japan, the normal effective statutory tax rates are approximately 38.0 % and 35.5% for the years ended 31 March 2014 and 2015,
respectively.
Current or deferred taxes at other tax jurisdictions are calculated by the tax rates generally applied to those tax jurisdictions.
Details of current tax expense and deferred tax expense are as follows:(Thousands of U.S.

(Millions of Yen)

(Millions of Yen)

For the year ended

For the year ended

For the year ended

31 March 2014

31 March 2015

31 March 2015

Dollars (Note 2))

Current tax expense: (i)Current year

22,70524,263201,908

Prior years

115

(221)

(1,837)

22,81924,043200,071

2,174

505

4,202

354

761

6,329

Total current tax expense
Deferred tax expense: (ii)
Origination and reversal of temporary difference
Changes in tax rates
Total deferred tax expense

2,527

1,265

10,530Total income tax expense

25,34725,308210,60225,34725,308210,602－－－

Continuing operations
Discontinued operations
Note:(i) ‘Current tax expense’ includes previously unrecognised tax benefits from tax losses carryforward, tax credits and deductible
temporary differences. These benefits were 43 million yen and 518 million yen (4,307 thousand U.S. dollars) for the years ended 31
March 2014 and 2015, respectively.
(ii) ‘Deferred tax expense’ includes previously unrecognised tax benefits from tax losses carryforward, 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 2,128 million yen and 1,089 million yen (9,065
thousand U.S. dollars) for the years ended 31 March 2014 and 2015, respectively.
(iii) On 26 June 2013, the Company received a reassessment notice for additional tax on the transfer pricing taxation. The additional
tax assessment was 8,419 million yen. The Company has lodged an objection with the Tokyo Regional Taxation Bureau (“TRTB”)
seeking withdrawal of the assessment in accordance with the relevant law. Consequently, 8,419 million yen is included in “Other
current assets” as 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.

Effective statutory tax rate

For the year ended

For the year ended

31 March 2014

31 March 2015

38.0%

35.5%

Expenses not deductible for tax purposes

1.0%

1.0%

Income not taxable for tax purposes(0.2)%

0.0%

Effect of unrecognised deferred tax assets

2.5%

0.4%

(16.4)%(18.2)%

0.1%

0.0%

rate

0.4%

0.6%

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

0.5%

0.5%

subsidiaries

1.1%

0.4%

Others2.6%

1.2%

Actual tax rate

29.6%

21.4%

Impact of different tax rates applied to overseas subsidiaries
Profits and losses on investments in associates
Adjustment on deferred tax assets and liabilities due to the change of corporate tax

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

There was no effect on income tax resulting from dividends paid to shareholders.
- 61 -

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

(Millions of Yen)

(Thousands of U.S.

As at

As at

As at

31 March 2014

31 March 2015

31 March 2015

Dollars (Note 2))

Other financial assets
FVTPL financial assets (derivative instruments)

1,295

－

－

Available-for-sale financial assets

2,821

885

7,361

Loans and receivables

16,50027,179226,171

Allowance for doubtful accounts(1,063)(956)(7,955)Loans and receivables–net

15,437

26,223

218,216

Total

19,554

27,108225,577

9,062

7,037

58,556

10,492

20,071167,021Loans and receivables

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

(Millions of Yen)

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

As at

As at

As at

31 March 2014

31 March 2015

31 March 2015

Other financial liabilities
FVTPL financial liabilities (derivative instruments)

－

3,400

28,296

152

163

1,354

152

3,563

29,650

－

667

5,551

152

2,896

24,099Other financial liabilities measured at amortised
cost
Total
Total non-current liabilities (other long-term
financial liabilities)
Total current liabilities (other short-term financial
liabilities)- 62 -

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

(Millions of Yen)

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

As at 31 March 2014

As at 31 March 2015

As at 31 March 2015

2,222

2,935

24,427

305

85

704

2,527

3,020

25,131

Suspense payment (i)

8,419

8,419

70,057

Prepaid expenses

1,948

2,462

20,488

Refundable consumption taxes

2,337

2,505

20,842Others

1,266

2,855

23,761

13,970

16,241

135,148

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

Total(Millions of Yen)

(Millions of Yen)

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

As at 31 March 2014

As at 31 March 2015

As at 31 March 2015

998

－

－

1,189

1,010

8,407

2,188

1,010

8,407

Accrued salary/bonus/vacation pay

12,251

13,541

112,686

Other accrued expenses

14,161

14,553

121,108

Advance received/deferred revenue (iii)

2,959

3,115

25,917

Accrued consumption taxes

1,907

1,535

12,769Others

3,381

2,972

24,733

34,66035,716297,213

Non-current: Other liabilities
Consideration payable for business combination(ii)
Deposit received and long-term advancerevenue, etc.
Total
Current: Other liabilities

Total
Note:

(i) On 26 June 2013, the Company received a reassessment notice for additional tax on the transfer pricing taxation. The additional
tax assessment was 8,419 million yen. The Company has lodged an objection with TRTB seeking withdrawal of the assessment inaccordance with the relevant law. Consequently, 8,419 million yen is included in “Other current assets” as suspense payment.
(ii) The amount represents a part of the consideration payable for the business combination of eyeglass lens development andmanufacturing of Seiko Epson Corporation on 1 February 2013 which will be paid when the actual amount of royalties for the four
years after the closing date is determined. The Group settled this payable in the year ended 31 March 2015.

- 63 -

(iii) Details of advance received and deferred revenue are as follows:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S.

As at 31 March 2014

As at 31 March 2015

As at 31 March 2015

335

233

1,943

2,624

2,881

23,974

2,959

3,115

25,917

Dollars (Note 2))
Advance received/deferred revenue
Government grants
OthersTotal- 64 -

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

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))As at 31 March 2014
Goods and products

As at 31 March 2015

31,937As at 31 March 2015

36,342

302,422Work in progress

5,670

6,679

55,580Raw materials

14,367

14,326

119,214

Supplies
Total

10,672

11,57896,34862,64768,925573,5644

5

44Inventories expected to be soldafter more than 12 months

The cost of inventories recognised as expense during the years ended 31 March 2014 and 2015, was 221,199 million yen and 239,829
million yen (1,995,747 thousand U.S. dollars), respectively.
The cost of inventories recognised as expense in respect of write-down and the reversal of such write-down is as follows:(Millions of Yen)

(Millions of Yen)

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

For the year ended

For the year ended

31 March 2014

31 March 2015

31 March 2015

Amount of write-down

2,564

2,904

24,166－－－

Amount of reversal of writedown

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

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))As at 31 March 2014

As at 31 March 2015

As at 31 March 2015

Accounts receivable

89,40093,615779,024

Notes receivable and

6,878

5,970

49,680electronically recorded monetaryclaims- operating
Other receivables

1,644

2,033

16,921

Allowance for doubtful accounts(2,393)(2,421)(20,145)

Total

95,52999,198825,480

The credit terms for customers are set between 90 days and 120 days on average.
Refer to Note 23 “Financial instruments” for credit risk management and fair value of trade and other receivables.

- 65 -

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

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))As at 31 March 2014

As at 31 March 2015

As at 31 March 2015

Cash and cash equivalents
Cash and deposit within three

331,094

348,819

2,902,715－－－

331,094

348,819

2,902,715

monthsShort-term investments within
three months
Total- 66 -

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

Yen)

Yen)

U.S. Dollars

Averageinterest rate

(Note 2))As at 31 March As at 31 March As at 31 March
2014
Long-term bank loans (excluding current portion)

2015
261

Current portion of long-term bank loans

2015
26

220

Due

(%)
(i)
0.68

2017-2020

82

8

69

－

－

Short-term bank loans

2,007

1,760

14,647

1.23－

Bonds (ii)

35,03235,024291,451

1.93－

Current portion of bonds (ii)25,119

21

175

1.51

－

Long-term finance lease obligations (Note 17)

536

478

3,978

－

2016-2021

Short-term finance lease obligations (Note 17)

242

243

2,024

－

－

Total interest-bearing debt

63,27937,561

312,564

Total non-current debt

35,82935,528295,649

Total current debt

27,4502,033

16,915Note:(i) Interest rates are based on the weighted-average rates that applied to the balances at the end of each fiscal year.
(ii) The summary of issuance conditions for bonds is as follows:(Millions of (Millions ofCompany

Item

Yen)

Yen)

As at 31

As at 31

Issue Date

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

Interest rate(%)

Collateral(Millions of

Due

Yen)

March 2014 March 2015 March 2015
HOYA

Unsecured

CORPORATION

bond (No. 3)

HOYA

1 Private

Technosurgical, Inc. Note
Total

11
September

20
34,95634,968290,989

1.93

－

2007

September
2017

5
November

203

77

637

1.51

－

2015-201835,15935,045

291,626

－

－

－

2011
－

－

Buildings and structures of 34 million yen and machinery and carriers of 22 million yen are pledged as collateral for long-term andshort-term bank loans (including current portion) stated above.
The obligations under finance lease are secured by the leased assets for which the lessor has ownership. Refer to Note 17 “Financelease obligations”.
There is no debt with covenants as at 31 March 2015.
Details of the remaining contractual maturity for long-term borrowings and bonds and fair values are set out in Note 23 “Financial
instruments”.

- 67 -

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

Present Value of Minimum
Lease Payments(Millions of Yen) (Millions of Yen) (Thousands of U.S. (Millions of Yen) (Millions of Yen) (Thousands of U.S.
Dollars (Note 2))

Dollars (Note 2))

As at 31 March

As at 31 March

As at 31 March

As at 31 March

As at 31 March

As at 31 March

2014

2015

2015

2014

2015

2015

Amounts payable under financeleases:
Not later than one year

266

268

2,230

242

243

2,024

later than five years

595

542

4,512

516

475

3,949

Later than five years

23

3

25

21

3

29

778

721

6,002

778

721

6,002

242

243

2,024

536

478

3,978

Later than one year but not

Total
Less future finance charges

884

813

6,767

(106)

(92)

(766)

778

721

6,002

Present value of leaseobligations
Less amount due for settlement
within 12 months
Amount due for settlement after
12 months

The Group has not entered into any new finance lease contracts in its policy, except the case only when it concludes that it has anumber of advantages of having a lease arrangement in respect of cost reduction or the avoidance of the risk associated with productobsolescence. The average remaining lease term is approximately two to four years as at 31 March 2015.
Some lease contracts include renewal options or purchase options. However, there is no sub-lease contract, contingent rent, escalation
payments and specific limitations (such as dividends, additional borrowing, and additional lease contract) included in these lease
contracts.
The Group’s fair values of lease obligations are set out in Note 23 “Financial instruments”.

- 68 -

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

(Millions of Yen)

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

For the year ended

For the year ended

31 March 2014

31 March 2015

31 March 2015

Minimum lease payments

7,664

8,231

68,491

545

606

5,042

8,209

8,836

73,533

Contingent rent
Total

The amounts above are included in the line item ‘Other expenses’ in the consolidated statement of comprehensive income.
Contingent rent, which is determined in rent contracts for stores at shopping malls, is the rent based on the stores’ sales amounts.
As at 31 March 2014 and 2015, the maturity periods of the outstanding commitments under non-cancellable operating leases are as
follows:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))As at 31 March 2014

As at 31 March 2015

As at 31 March 2015

Not later than one year

1,805

1,843

15,341

Later than one year but not later than five years

3,990

3,423

28,483Later than five years

2,572

2,737

22,780

8,367

8,004

66,604

Total

Operating lease payments represent rentals payable by the Group for the land used for an office, building and machinery, and tools,
equipment and fixtures. The average remaining operating lease terms for those assets as at 31 March 2015, are 38 years, two years andone year, respectively.
Some lease contracts include renewal options, purchase options or escalation payments. However, there are no sub-lease contract or
restrictions (such as dividends, additional borrowing, and additional lease contract), included in these contracts.

- 69 -

19.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 local law and regulations of each country. Unless a defined benefit plan is required by the laws of the country in which the overseas
subsidiaries operate, a defined contribution plan has been put into place. The plan in U.K. represents a substantial portion of thepension 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 2014

As at 31 March 2015

As at 31 March 2015

4,832
(3,191)

5,928(3,871)49,331(32,212)

1,641
31

2,057
32

17,120
267

1,672

2,089

17,387

1,675
3

2,098
8

17,45568

Present value of funded defined benefit obligation
Fair value of plan assets
Total
The effect of the 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)- 70 -

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 2014

31 March 2015

31 March 2015

(Note 2))Service cost
Current service cost

389

438

3,646

Past service cost and (gain)/loss from

(28)

1

10

Net interest expense

54

27

228

Components of defined benefit costs

415

467

3,884

Return on plan assets

(10)

(387)

(3,221)

Actuarial gains and losses arising from

(20)

14

118

(218)

508

4,230

166

70

585

0

0

0

(81)

206

1,712

334

672

5,596

settlements

recognised in profit or loss
Remeasurement of the net defined benefit
liabilitychanges in demographic assumptions
Actuarial gains and losses arising fromchanges in financial assumptions
Actuarial gains and losses arising fromexperience adjustments
Adjustments for restrictions on thedefined benefit asset
Components of defined benefit costs
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

For the year ended

For the year ended

31 March 2014

31 March 2015

31 March 2015

Beginning balance

3,870

4,832

40,209Current service cost

389

438

3,646

Interest cost

175

166

1,385

(20)

14

118

(218)

508

4,230

166

70

585

(28)

1

10

Remeasurement (gains)/losses
Actuarial gains and losses arising fromchanges in demographic assumptions
Actuarial gains and losses arising fromchanges in financial assumptions
Actuarial gains and losses arising fromexperience adjustments
Past service cost
Increase due to acquisition of subsidiaries

78

24

197

Benefits paid

(94)

(431)

(3,583)

Effect of foreign currency exchange

513

304

2,534

4,832

5,928

49,331

differences
Ending balance- 71 -

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

(Millions of Yen)

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

For the year ended

For the year ended

31 March 2014

31 March 2015

31 March 2015

Beginning balance

2,442

3,191

26,550Interest income

121

139

1,157

10

387

3,221

Remeasurement gain (loss)
Return on plan assets (excluding amounts
included in net interest expense)
Contributions from the employer

384

230

1,918

Benefits paid

(184)

(230)

(1,911)

Effect of foreign currency exchange

418

153

1,277

3,191

3,871

32,212differences
Ending balance

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

(Millions of Yen)

(Thousands of U.S. Dollars

For the year ended

For the year ended

For the year ended(Note 2))31 March 2014

31 March 2015

31 March 2015

Beginning balance

26

31

257

Interest expense

0

0

0

0

0

0

differences

5

1

10

Ending balance

31

32

267

Remeasurement gain (loss)
The effect of the changes in the asset
ceiling
Effect of foreign currency exchange

The fair values of major categories of plan assets as at 31 March 2014 and 2015, are as follows:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S. Dollars

As at 31 March 2014

As at 31 March 2015

As at 31 March 2015

(Note 2))
Cash and cash equivalents

363

538

4,478

1,016

1,391

11,577

1,299

615

5,118

Debt instruments - Foreign bonds

474

334

2,776

Others

38

993

8,262

3,191

3,871

32,212Equity instruments - Foreign equity
instruments
Debt instruments - Foreign governmental
bonds

Total

The fair values of financial instruments are measured at quoted market price in active markets. No transferable instrument is includedin plan assets.
The principal assumptions used for the purposes of the actuarial valuations were as follows:
As at 31 March 2014
Discount rate

As at 31 March 2015
4.5%

3.3%

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

- 72 -

(2) Defined contribution plans
The total expense recognised was 1,908 million yen and 2,147 million yen (17,863 thousand U.S. dollars) for the years ended 31
March 2014 and 2015, respectively.
(3) Severance payments
Under certain circumstances (such as retirement before the predetermined retirement date), additional payments are made uponretirement. The total expense recognised was 1,790 million yen and 2,451 million yen (20,395 thousand U.S. dollars) for the years
ended 31 March 2014 and 2015, respectively.

- 73 -

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

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))As at 31 March 2014
Asset retirement obligation
Warranties provision
Total
Non-current liabilities
Current liabilities

As at 31 March 2015

As at 31 March 2015

2,142

2,251

18,731

969

1,075

8,942

3,111

3,326

27,673

2,155

2,262

18,827

955

1,063

8,847

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

Warranties provision

Total

Balance at 1 April 2014

2,142

969

3,111

Provision for the year

55

380

435

Business Combination

82

－

82

Interest cost associated with passage of time
Reduction resulting from settlement for the year
Effect of foreign currency exchange differences
Balance at 31 March 2015

15

－

15

(158)

(355)

(513)

116

81

196

2,251

1,075

3,326

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

Warranties provision

Total

Balance at 1 April 2014

17,825

8,061

25,887

Provision for the year

454

3,162

3,616

Business Combination

680

－

680

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

125

－

125

(1,314)(2,954)(4,268)

Effect of foreign currency exchange differences
Balance at 31 March 2015

961

673

1,635

18,731

8,942

27,673

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

- 74 -

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

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))As at 31 March 2014

As at 31 March 2015

As at 31 March 2015

Accounts payable

23,32319,195

159,734

Notes payable, trade

407

5,840

48,597

Processing cost payable

959

591

4,922

15,58515,044125,187

16

576

4,796

40,291

41,247343,236

Other payables
Notes payable for capital investment
Total
Trade notes payable are due 120 days on average.

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

- 75 -

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

Number of issued

Number of

authorised sharessharesoutstanding shares

Share capital(Ordinary shares (Ordinary shares (Ordinary shares (Millions ofwith no par value） with no par value） with no par value）

CapitalShare capitalreserves
Yen)

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

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

(Note 2))

Balance at
1April 2013

1,250,519,400

435,017,020

431,496,141

6,264

15,89952,128132,301

Increase (ii)－－598,558

－

－

－

－

31 March 2014

1,250,519,400

435,017,020

432,094,699

6,264

15,89952,128132,301

Decrease (i), (ii)－

9,234,100

8,163,722

－

－

－

－

1,250,519,400

425,782,920

423,930,977

6,264

15,89952,128132,301

Balance atBalance at
31 March 2015
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
AmountNumbers of shares
Balance at 1 April 2013

(Millions of Yen)

3,520,879

Repurchase of odd-lot shares

10,712

1,842

5Decrease on exercise of stock option(600,400)(1,827)

Balance at 31 March 2014

2,922,321

8,890

Repurchase of treasury shares

9,234,100

30,000Cancellation of treasury shares(9,234,100)(29,573)

1,346

5Repurchase of odd-lot shares
Disposal of odd-lot shares

(124)

(0)

Decrease on exercise of stock options(1,071,600)(3,390)

Balance at 31 March 2015

1,851,943

5,932
AmountNumbers of shares(Thousands of U.S. Dollars(Note 2))

Balance at 31 March 2014

2,922,321

73,979Repurchase of treasury shares

9,234,100

249,646

Cancellation of treasury shares(9,234,100)(246,092)

Repurchase of odd-lot shares

1,346

45

Disposal of odd-lot shares

(124)

(3)

Decrease on exercise of stock options(1,071,600)(28,211)

Balance at 31 March 2015

1,851,943

49,363- 76 -

② Other capital reserves
Gain (loss) on
disposal of treasury

Stock option (i)OthersTotalshares(Millions of Yen)

(Millions of Yen)

(Millions of Yen)

(Millions of Yen)

Balance at 1 April 2013

(4,989)

3,070

(393)

(2,313)

Disposal of treasury shares

(535)

(233)

－

(768)

－

242

－

242

(5,524)

3,078

(393)

(2,839)

Share-based payments
Balance at 31 March 2014
Repurchase of treasury shares

－

－

(30)

(30)

Disposal of treasury shares

(741)

(512)

－

(1,253)

－

386

－

386

(6,265)

2,952

(423)

(3,736)

Share-based payments
Balance at 31 March 2015

Gain (loss) on
disposal of treasury

Stock option (i)Others

Total(Thousands of U.S.

(Thousands of U.S.

(Thousands of U.S.

(Thousands of U.S.

Dollars (Note 2))

Dollars (Note 2))

Dollars (Note 2))

Dollars (Note 2))(45,971)

25,613(3,270)(23,627)

sharesBalance at 31 March 2014

－

－

(250)

(250)

(6,167)(4,264)－(10,430)

－

3,214

－

3,214

(52,138)

24,564(3,519)(31,093)

Repurchase of treasury shares
Disposal of treasury shares
Share-based payments
Balance at 31 March 2015
Note:(i) Refer to Note 24 “Share-based payments” for details of stock option.
(3) Retained earnings and dividends
Amount(Millions of Yen)
Balance at 1 April 2013

485,836

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

58,390

Dividends(28,050)

Transfer to retained earnings

66

Balance at 31 March 2014

516,243

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

92,804

Cancellation of treasury shares(29,573)

Dividends(32,145)

Transfer to retained earnings(167)

Balance at 31 March 2015

547,162- 77 -

Amount(Thousands of U.S. Dollars (Note 2))
Balance at 31 March 2014

4,295,938

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

772,273

Cancellation of treasury shares(246,092)

Dividends(267,493)

Transfer to retained earnings(1,390)

Balance at 31 March 2015

4,553,236

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

Dividends per

share

share

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

(Millions of
Yen)

Total dividends(Thousands of
U.S. Dollars

Record date

Effective date

(Note 2))30 May 2013

35

0.29

15,102

125,675

31 March 2013

3 June 2013

31 October 2013

30

0.25

12,947

107,740

30 September 201329 November 2013

21 May 2014

45

0.37

19,444

161,806

31 March 2014

29 May 2014

30 October 2014

30

0.25

12,700105,687

30 September 2014

28 November 2014

21 May 2015

45

0.37

19,077

158,749

31 March 2015

1 June 2015

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 2013

(187)

Profit for the year, attributable to non-controlling interests

1,750

Translation differences for foreign operations (other comprehensive income)

123

Dividends(6)

Increase due to acquisition of subsidiaries

4,441

Balance at 31 March 2014

6,121

Profit for the year, attributable to non-controlling interests

137

Other comprehensive income(168)

Dividends(9)

Balance at 31 March 2015

6,081
Amount(Thousands of U.S. Dollars (Note 2))

Balance at 31 March 2014

50,938

Profit for the year, attributable to non-controlling interests

1,137

Other comprehensive income(1,400)

Dividends(74)

Balance at 31 March 2015

50,603- 78 -

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

(Millions of Yen)

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

As at

As at

As at

31 March 2014

31 March 2015

31 March 2015

Interest-bearing debt

63,27937,561

312,564

Less: Cash and cash equivalents

331,094

348,819

2,902,715

Net debt(267,814)(311,259)(2,590,152)

Equity542,648

596,095

4,960,428

In order to maximise the corporate value of the Group, cash flows have been a priority of the Group management. As at 31 March2014 and 2015, the Group maintained cash and cash equivalents balances in excess of interest-bearing debt balances. The Group is not
subject to any externally imposed capital regulation as at 31 March 2015.
Details of interest-bearing debt, cash and cash equivalents and equity are described in Note 16 “Interest-bearing debt”, Note 15 “Cashand cash equivalents”, and Note 22 “Share capital and other equity items”, respectively.

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

- 79 -

(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 2014

31 March 2015

31 March 2015

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

1,295

－

－

Trade and other receivables

95,52999,198825,480

Other financial assets (ii)15,437

26,223

218,216

2,821

885

7,361

331,094

348,819

2,902,715

－

3,400

28,296

Trade and other payables

40,291

41,247343,236

Interest-bearing debt

63,27937,561

312,564

152

163

1,354

Loans and receivables

Available-for-sale financial assets (ii)Cash and cash equivalents
Financial liabilities
FVTPL financial liabilities (derivative instruments) (iii)
Financial liabilities measured at amortised cost

Other financial liabilities (iii)Note:(i) The items above are not included in discontinued operations and disposal group held for sale. The Group does not have held-tomaturity investments and derivative instruments designated as hedging instruments. Likewise, the Group does not have financial
assets or financial liabilities using the fair value option.
(ii) FVTPL financial assets (derivative instruments), other financial assets and available-for-sale financial assets are includedin ‘Long-term financial assets’ or ‘Other short-term financial assets’ in the consolidated statement of financial position.
(iii) FVTPL financial liabilities (derivative instruments) and other financial liabilities are included in ‘Other long-term/short-term
financial liabilities’ in the consolidated statement of financial position.
(iv) Financial assets or liabilities to be offset as at 31 March 2014 and 2015, 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.

- 80 -

(5) Market risk management
The Group is exposed to risks arising from changes in the economic environment and financial markets. The factors of the risk
relating to financial markets are fluctuation risk of foreign currency, interest rate, and fair value of equity instruments.
① Foreign currency risk
1) Foreign currency risk management
As the Group’s businesses have expanded globally, foreign exchange fluctuations, in particular from Thai Baht, Euro and U.S. dollar,
have a significant impact on the Group’s financial results. If the Japanese yen appreciates against these currencies, both sales andprofit stated in Japanese yen might decrease even though sales and profit stated in local currencies have increased.
The Group intends to marry major currencies the Group uses (i.e., Euro, U.S. dollar and Yen) in settlements of receivables/payables
resulting from operating activities. Specifically, the subsidiaries that continuously conduct import or export transactions retain foreign
currencies obtained from exports of goods for payables on imported supplies. This enables the Group to mitigate foreign currency risk.
On the other hand, as the Company has multiple SBUs and conducts its own finance and dividend payments to the Company’s
shareholders, and the holding companies under the Company receive dividends from their subsidiaries and distribute them to theCompany and/or other group companies, the Group’s foreign currency-dominated balances in receivables, liabilities and/or bankdeposits may not fully offset each other. This might cause significant gains or losses on foreign exchange differences when the Yen
appreciates or depreciates against the U.S. dollar or the Euro, or when the Euro appreciates or depreciates against the U.S. dollar.
2) Foreign currency sensitivity analysis
The chart below shows the impact on the profit and equity in the case of a 1% appreciation of the Yen against the Thai Baht, the Euroand the U.S. dollar with the assumption that other currencies are constant.
For the year ended 31 March 2014

For the year ended 31 March 2015

Average exchange rate
(Yen per each currency)
Thai Baht

3.18

3.41

Euro

135.12138.43

U.S. dollar

100.49110.62

Thai Baht

(140)

(152)

Euro

(15)

(114)

U.S. dollar

(160)

(339)

Thai Baht

(194)

(318)

Euro

(441)

(491)

U.S. dollar

(274)

(601)

Impact on profit for the year
(Millions of Yen)

Impact on equity(Millions of Yen)

For the year ended 31 March 2015
Impact on profit for the year
(Thousands of U.S. Dollars (Note 2))
Thai Baht(1,269)

Euro

(947)

U.S. dollar(2,824)

Impact on equity(Thousands of U.S. Dollars (Note 2))
Thai Baht(2,648)Euro(4,086)

U.S. dollar(4,998)- 81 -

Note:
Numbers in brackets mean the amount 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,
not the impact on the Group’s cash flows or operations themselves.
Likewise, the charts below show the impact in the case 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 currency on the assumption that
other currencies are constant. The information about its holding companies with immaterial risk is not included in the chart below.
2)-1. Parent company (the Company)(Millions of Yen)Euro
31 March 2014

U.S. dollar
31 March 2015

31 March 2014

31 March 2015

Trade and other receivables

(23)

(19)

(75)

(81)

Trade and other payables

1

1

34

16

Long-term financial assets

－

－

－

－

Short-term financial assets

7

－

－

(0)

Cash and cash equivalents

(17)

(17)

(661)

(218)

(31)

(35)

(702)

(283)

Total

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

U.S. dollar

31 March 2015
Trade and other receivables

31 March 2015

(161)

(673)

Trade and other payables

9136

Long-term financial assets－－

Short-term financial assets－(0)Cash and cash equivalents(142)(1,816)(294)(2,353)

Total
Note:

Numbers in brackets 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.
Short-term financial assets include the fair value of forward contracts in long or short positions in currency derivative instruments.
2)-2. Holding company (Europe)(Millions of Yen)
Yen
31 March 2014

U.S. dollar
31 March 2015

31 March 2014

31 March 2015

Trade and other receivables

－

－

－

－

Trade and other payables

0

0

0

－

Long-term financial assets

－

－

(0)

(22)

Short-term financial assets

－

－

(27)

(147)

Cash and cash equivalents

(110)

(135)

(559)

(20)

(110)

(135)

(585)

(189)

Total

- 82 -

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

U.S. dollar

31 March 2015

31 March 2015

Trade and other receivables－－

Trade and other payables

0－Long-term financial assets

－

(183)

Short-term financial assets－(1,227)

Cash and cash equivalents(1,121)(166)(1,121)(1,576)

Total
Note:

Numbers in brackets 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.
Long-term and short-term financial assets include the fair value of forward contracts in long or short positions in currency derivative
instruments.
3) Currency derivatives
The Group’s policy prohibits the use of derivative instruments such as forward foreign exchange contracts, except for 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 stated above is adhered to.
The following are the details of the forward foreign exchange contracts at the end of each reporting period:(Millions of Yen)

For the year ended

Average

31 March 2014

Foreignexchange rate currency (mil)Notional

Fair value

amountForward foreign exchange contracts
More than one year
US$Sell

0.75(€Buy)(€/US$)

US$Sell

0.76(€Buy)(€/US$)€Buy

141.44(Yen Sell)(Yen/€)

$70.9

7,567

383

$206.6

22,137

912

€5.2

735

1

Within one year

(Millions of Yen)

For the year ended

Average

31 March 2015

Foreignexchange rate currency (mil)Notional

Fair value

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

Notional

Fair value

amountForward foreign exchange contracts
More than one year
US$Sell

0.74(€Buy)(€/US$)

US$Sell

0.74(€Buy)(€/US$)

$32.7

3,167

(667)

26,352（5,551)$113.811,028(2,733)

91,773(22,745)

Within one year

Note:
The fair values of forward foreign exchange contracts are determined based on the forward exchange rate at the market at the end ofeach reporting period.

- 83 -

② Interest rate risk management
The majority of the interest-bearing debt consists of bonds with fixed interest rates. The Group’s cash and cash equivalents exceed theinterest-bearing debt, and currently, the impact of interest expense on the Group’s profit/loss is immaterial. Therefore, the Groupconsiders that the interest rate risk is immaterial and has not performed a sensitivity analysis such as Basis Point Value.
③ Price risks management in equity instruments
The Group is exposed to equity price risks arising from equity instruments (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 105 million
yen and 10 million yen (81 thousand U.S. dollars) as at 31 March 2014 and 2015, respectively, as a result of changes in fair value ofthe equity instruments.

- 84 -

(6) Credit risk management
Credit risk is the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Group. The Groupmanages its credit risk by setting credit limits that are approved by the authorised personnel of each SBU.
The main customers for the Information technology business are globalised companies that have relatively large-scale and stablefinancial conditions. On the other hand, credit losses were incurred on a sporadic basis in the Life Care business as those products
were sold to relatively small and diversified customers, such as end consumers, retailers, and medical institutions. Accordingly, no
significant credit losses were incurred in the past. A division in the Life Care business of selling goods to medical institutions andoperating wholesale business in certain countries has some past-due receivables due to the financial conditions of those medical
institutions or customers. Credit limits have been set for those customers to minimise the loss from a failure to collect the receivables.
Trade receivables consist of large number of customers across 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 2015.
① Financial assets and other credit exposures
Except for the items below, the carrying amounts after impairment presented in the consolidated financial statements are themaximum exposure for the Group’s credit risk without considering the appraised value of the related collateral.
Maximum credit risk
(Millions of Yen)

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))As at 31 March 2014
Guarantee liabilities290

As at 31 March 2015
135

The Group does not hold any collateral or other credit enhancements to cover the risks disclosed above.
Details of guarantee liabilities are described in Note 33 “Contingent liabilities”.

- 85 -

As at 31 March 2015
1,127

② Impaired or past-due financial assets
The following table provides the ageing details of the financial assets not yet due and the financial assets past-due but not impaired at
the end of the reporting period:(Millions of Yen)
Balance at 31 March 2014
Total
Trade and other receivables

Within due
date

Overdue amounts
Within 30days

31 to 60 days 61 to 90 days

91 to 120

Over 120

days

days

97,922

84,773

6,556

2,128

838

798

2,829

Allowance for doubtful accounts(2,393)

(525)

(10)

(73)

(142)

(87)

(1,555)Trade and other receivables (net)95,52984,249

6,546

2,055

696

711

1,273

Other financial assets (gross)

16,50015,580

12

－

－

－

907

Allowance for doubtful accounts(1,063)

(254)

－

－

－

－

(809)

Other financial assets (net)15,437

15,327

12

－

－

－

98

(gross)(Millions of Yen)
Balance at 31 March 2015
Total
Trade and other receivables

Within due
date

Overdue amounts
Within 30days

31 to 60 days 61 to 90 days

91 to 120

Over 120

days

days

101,618

87,628

6,571

2,613

993

792

3,021

Allowance for doubtful accounts(2,421)

(574)

(36)

(69)

(60)

(107)

(1,575)Trade and other receivables (net)99,19887,055

6,535

2,544

933

685

1,446

Other financial assets (gross)27,17926,419

－

－

－

－

760

Allowance for doubtful accounts

(956)

(267)

－

－

－

－

(689)

Other financial assets (net)26,223

26,151

－

－

－

－

72

(gross)(Thousands of U.S. Dollars (Note 2))
Balance at 31 March 2015
Total
Trade and other receivables

845,622

Within due
date
729,202

Overdue amounts
Within 30
days
54,68131 to 60 days 61 to 90 days
21,7448,260

91 to 120

Over 120

days

days

6,595

25,140(gross)Allowance for doubtful accounts(20,145)(4,774)

(297)

(575)

(497)

(892)

(13,110)

Trade and other receivables (net)825,477

724,429

54,384

21,169

7,763

5,703

12,030

Other financial assets (gross)

226,171

219,845

－

－

－

－

6,326

Allowance for doubtful accounts(7,955)(2,224)

－

－

－

－

(5,731)Other financial assets (net)

218,216

217,621

－

－

－

－

595

The Group does not hold any collateral or other credit enhancements on the above financial assets.

- 86 -

In case of impairment on financial assets, the Group does not directly write off such assets by reducing the carrying amount, instead
records an allowance for doubtful accounts. Movement in the allowance for doubtful accounts is as follows:(Millions of Yen)
Allowance for doubtful Allowance for doubtful
accounts (Current)
Balance at 1 April 2013

1,992

Total

accounts (Non-current)
990

2,982

Provision for the year

322

348

670

Reduction resulting from settlement for the year

(28)

(285)

(313)

Reduction for the year (reversal)

(148)

(44)

(192)

54

6

60

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

201

47

249

2,393

1,063

3,456

Provision for the year

302

74

376

Reduction resulting from settlement for the year

(145)

(5)

(150)

Reduction for the year (reversal)

(65)

(203)

(268)

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

(64)

27

(38)

Balance at 31 March 2015

2,421

956

3,377

Balance at 31 March 2014

(Thousands of U.S. Dollars (Note 2))
Allowance for doubtful Allowance for doubtful
accounts (Current)

Total

accounts (Non-current)

Balance at 31 March 2014

19,917

8,845

28,761

Provision for the year

2,509

619

3,129

Reduction resulting from settlement for the year

(1,203)(43)(1,245)

Reduction for the year (reversal)(544)(1,687)(2,232)Other (foreign exchange translation gains or losses, etc.）

(534)

222

(312)

Balance at 31 March 2015

20,145

7,955

28,100

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.
Because the Group operations are global, the credit risk is widely diversified among customers and the Group does not depend on
specific customers. Therefore, the possibility of a chain-reaction of bankruptcies at a certain customer is considered to be remote and
the Group does not set additional general allowance for doubtful accounts resulting from the concentration of this credit risk.
③ Transfer of financial assets
The Group transferred some of its notes receivable to financial institutions before maturity on a discounted basis. The Group isrequired to repurchase these notes in the event of a default. Accordingly, the Group continues to recognise the full carrying amount of
the notes receivable until maturity and the cash proceeds received on the sale of the notes receivable is accounted for as a secured
borrowing.
There were no notes receivable transferred and discounted that were outstanding as at 31 March 2014 and 2015.

- 87 -

(7) Liquidity risk management
The ultimate responsibility for liquidity risk management rests with the CFO of the Group who is appointed by the board of directors.
Based on the instructions from the CFO, the financial headquarters of the Group mainly manages the Group’s liquidity risk by
maintaining an appropriate level of retained earnings and credit facilities, and monitors the actual cash flows and forecasted cash
flows. Temporary cash shortages due to dividends or bonus payments are funded through the issuance of commercial paper, etc.
The following table details the contractual maturity of its financial liabilities, including derivative financial instruments but
excluding guarantee liabilities:(Millions of Yen)
Balance at 31 March 2014

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

40,29140,29140,291

－

－

－

－

－

261

261

－

161

81

10

7

2

82

82

82

－

－

－

－

－

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

2,007

2,007

2,007

－

－

－

－

－

Bonds (excluding current portion)

35,03235,077－21

21

35,021

14－

Current portion of bonds

25,11925,12625,126

－

－

－

－

－

Long-term finance lease

536

536

－

206

165

104

40

21

242

242

242

－

－

－

－

－

152

152

152

－

－

－

－

－

103,722103,773

67,899389

267

35,13560

22

obligations
Short-term finance leaseobligations
Other financial liabilities
Total(Millions of Yen)
Balance at 31 March 2015

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

41,247

41,247

41,247

－

－

－

－

－

26

26

－

12

7

6

2

－

8

8

8

－

－

－

－

－

Short-term bank loans

1,760

1,760

1,760

－

－

－

－

－

Bonds (excluding current portion)

Non-derivative liabilities
Trade and other payables
Long-term bank loans (excluding
current portion)
Current portion of long-term bankloans
35,02435,056－21

35,021

14－－

Current portion of bonds

21

21

21

－

－

－

－

－

Long-term finance lease

478

478

－

219

161

72

23

3

243

243

243

－

－

－

－

－

163

163

163

－

－

－

－

－

Currency derivative

3,400

3,400

2,733

211

456

－

－

－

Total

82,371

82,402

46,175463

35,64591

24

3

obligations
Short-term finance leaseobligations
Other financial liabilities
Derivative liabilities- 88 -

(Thousands of U.S. Dollars (Note 2))
Balance at 31 March 2015

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

343,236

343,236

343,236

－

－

－

－

－

220

220

－

97

60

51

13

－

69

69

69

－

－

－

－

－

Short-term bank loans

14,647

14,647

14,647

－

－

－

－

－

Bonds (excluding current portion)

Non-derivative liabilities
Trade and other payables
Long-term bank loans (excluding
current portion)
Current portion of long-term bankloans
291,451

291,716－

175

291,429112－－

Current portion of bonds

175

175

175

－

－

－

－

－

Long-term finance lease

3,978

3,978

－

1,822

1,340

597

190

29

2,024

2,024

2,024

－

－

－

－

－

1,354

1,354

1,354

－

－

－

－

－

Currency derivative

28,29628,296

22,745

1,756

3,795

－

－

－

Total

685,450

685,715384,250

3,850

296,624

760

203

29

obligations
Short-term finance leaseobligations
Other financial liabilities
Derivative liabilities

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

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))As at 31 March 2014

As at 31 March 2015

As at 31 March 2015

Bank overdraft
Used
Unused
Total

－

－

－

65,00065,000540,900

65,00065,000540,900－－－

50,00050,000416,077

50,00050,000416,077

Commercial paper
Used
UnusedTotal- 89 -

(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).
· Forward exchange contracts are measured at fair value on forward exchange rate at the closing date
· Preferred shares with convertible rights are measured at fair value based on the fair value of common stocks
Level 3: Fair value derived from inputs for the asset or liability that are not based on observable market data (i.e., unobservable
inputs).
· Unlisted shares are measured by recognising the Group’s share of the net asset of issuing companies at stated periods. Any
excess of the cost of the investment over the Group’s share of net assets is deemed as fair value.
① Financial instruments that are measured at fair value(Millions of Yen)
As at 31 March 2014

Level 1

Level 2FVTPL financial assets (derivative instruments)－

Level 3

Total

1,295

－

1,295

Available-for-sale financial assets

2,102

－

720

2,821

Total

2,102

1,295

720

4,116

－

－

－

－

－

－

－

－

FVTPL financial liabilities (derivative instruments)
Total(Millions of Yen)
As at 31 March 2015

Level 1

Level 2

Level 3

Total

FVTPL financial assets (derivative instruments)

－

－

－

－

Available-for-sale financial assets

196

－

689

885

Total

196

－

689

885

－

3,400

－

3,400

－

3,400

－

3,400

FVTPL financial liabilities (derivative instruments)
Total(Thousands of U.S. Dollars (Note 2))
As at 31 March 2015

Level 1FVTPL financial assets (derivative instruments)

Level 2

Level 3

Total

－

－

－

－

Available-for-sale financial assets

1,629

－

5,732

7,361

Total

1,629

－

5,732

7,361

FVTPL financial liabilities (derivative instruments)－

28,296－28,296

Total－

28,296－28,296Note:
No transfers occurred between Levels 1, 2 and 3 during the years ended 31 March 2014 and 2015, excluding that:- The preferred shares were transferred from Level 2 to Level 1 due to the conversion to common stocks during the year ended 31
March 2014.
- The common stocks which became possible to be measured at quoted prices in active markets, were transferred from Level 3 toLevel 1 during the year ended 31 March 2015.

- 90 -

② Reconciliation of financial assets categorised at Level 3 from beginning balance to ending balance
Fair value measurement as at the end of the reporting period

Available-for-sale financial assets(Thousands of U.S. Dollars(Millions of Yen)

(Millions of Yen)

For the year ended 31 March

For the year ended 31 March

For the year ended 31 March

2014

2015

2015

(Note 2))

693

720

5,988

Total gains or losses recognised:

27

(15)

(122)

- in profit or loss (i)

(16)

8

70

- in other comprehensive income (ii)

43

(23)

(191)

Purchase

0

－

－

Sale

－

(13)

(105)

Transfer to Level 1

－

(5)

(40)

Opening balance

OthersClosing balance

0

1

11

720

689

5,732

Note:
(i) In the total gains or losses for the years ended 31 March 2014 and 2015, included in profit or loss, 16 million yen in loss and 8
million yen (70 thousand U.S. dollars) in profit, respectively, relate to available-for-sale financial assets at the end of the reporting
period. Related loss of these assets is included in the line item ‘Finance costs’ in the consolidated statement of comprehensive income.
Refer to Note 26 “Finance income and costs”.
(ii) In the total gains or losses for the years ended 31 March 2014 and 2015, included in other comprehensive income, 43 million yen
in gain and 23 million yen (191 thousand U.S. dollars) in loss, respectively, relate to the shares not traded in the market. Related loss
and profit are included in the line item ‘Net gain/ (loss) on revaluation of available-for-sale financial assets’ in Note 27 “Other
comprehensive income”.

- 91 -

(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)

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

(Note 2))As at 31 March 2014

As at 31 March 2015

As at 31 March 2015

Carrying

Carrying

Carrying

amountFair value

Fair value

amountamountFair value

AssetsLoans and receivables
Current portion of long-term loans to

8,500

8,521

70,73370,912－－

Lease deposits

4,413

4,372

4,562

4,536

37,96637,748

Total

4,413

4,372

13,062

13,058

108,699

108,659

261

272

26

27

220

222

subsidiaries and affiliates

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

82

85

8

8

69

69

Bonds (excluding current portion)

35,032

37,03035,02436,915

291,451

307,186

Current portion of bonds

25,11925,302

21

21

175

179

Long-term finance lease obligations

536

631

478

573

3,978

4,768

Short-term finance lease obligations

242

255

243

259

2,024

2,154

61,272

63,57435,80137,803297,917314,578

Total- 92 -

② Fair value hierarchy
Level 1: Fair value derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Fair value derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (i.e., as prices) or indirectly (i.e., derived from prices).
· Fair value of loans and receivables is measured by the present value of future cash flows of each loan categorised according
to a certain range of term, discounted by the risk-free rate, etc.
· Fair value of bonds issued by the Company is measured by discounting the total of principal and interest using an interest ratethat reflects each bond’s credit risk.
· Fair value of interest-bearing debt other than bonds is measured by the present value of future cash flows of each debt
categorised according to a certain range of term, and discounted by the interest rate that reflects the remaining period to thematurity and credit risk.
Level 3: Fair value derived from inputs for the asset or liability that are not based on observable market data (unobservable inputs).
(Millions of Yen)
As at 31 March 2014

Level 1

Level 2

Level 3

Total

AssetsLoans and receivables
Lease deposits

－

4,372

－

4,372

Total

－

4,372

－

4,372

Long-term bank loans (excluding current portion)

－

272

－

272

Current portion of long-term bank loans

－

85

－

85

Bonds (excluding current portion)－

37,030－37,030Current portion of bonds－

25,302－25,302Long-term finance lease obligations

－

631

－

631

Short-term finance lease obligations

－

255

－

255

Total

－

63,574－63,574

Liabilities
Financial liabilities measured at amortised cost

(Millions of Yen)
As at 31 March 2015

Level 1

Level 2

Level 3

Total

AssetsLoans and receivables
Current portion of long-term loans to subsidiaries

－

8,521

－

8,521

Lease deposits

－

4,536

－

4,536

Total

－

13,058－13,058Long-term bank loans (excluding current portion)

－

27

－

27

Current portion of long-term bank loans

－

8

－

8

Bonds (excluding current portion)－

36,915－36,915Current portion of bonds

－

21

－

21

Long-term finance lease obligations

－

573

－

573

Short-term finance lease obligations

－

259

－

259

Total

－

37,803－37,803and affiliates

Liabilities
Financial liabilities measured at amortised cost

- 93 -

(Thousands of U.S. Dollars (Note 2))
As at 31 March 2015

Level 1

Level 2

Level 3

Total

AssetsLoans and receivables
Current portion of long-term loans to subsidiaries－

70,912－

70,912

Lease deposits－

37,748－37,748

Total－

108,659－

108,659

Long-term bank loans (excluding current portion)

－

222

－

222

Current portion of long-term bank loans

－

69

－

69

Bonds (excluding current portion)－

307,186－

307,186

Current portion of bonds

－

179

－

179

Long-term finance lease obligations

－

4,768

－

4,768

Short-term finance lease obligations

－

2,154

－

2,154

Total

－

314,578－

314,578

and affiliates

Liabilities
Financial liabilities measured at amortised cost

- 94 -

24.Share-based payments(1) Detail of share-based payments
The Company has a stock option plan. The purpose of the plan is to increase the value of the Group and to improve the financial
results of the Group by motivating the members such as directors, officers, employees of the Group, as well as to retain valuable
employees.
After the details and eligible members are approved at the meeting of board of directors, options are granted to individuals on thecondition that they render services over the vesting period, that is, subsequent to the grant date, if a member terminates his or her
employment prior to the vesting date, the options will expire. The exercise period of the options is the period determined in each
option contract. The options not exercised within this exercise period will expire. The option contract includes a clause that limits the
maximum number of stock options a member can exercise each year during the exercisable periods.
Stock options granted to members are accounted for as share-based payment transactions. Expense recorded in the consolidated
statement of comprehensive income from undertaking shared-based payment transactions was 242 million yen and 386 million yen(3,214 thousand U.S. dollars) for the years ended 31 March 2014 and 2015, respectively.
Details of the stock options that are outstanding for the years ended 31 March 2014 and 2015, are as follows:No.

Number of shares

Grant date

Expiry date

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

5

445,000

1 Jan 2006

30 Sep 2015

4,150

2,917

6
7

585,600

7 Nov 2006

30 Sep 2016

4,750

3,961

77,60014 Nov 2007

30 Sep 2017

4,230

3,357

8

1,036,000

28 Nov 2008

30 Sep 2018

1,556

952

10

1,247,600

8 Dec 2009

30 Sep 2019

2,215

2,784

11

1,225,600

7 Dec 2010

30 Sep 2020

1,947

1,861

12

680,800

17 Jan 2012

30 Sep 2021

1,616

1,427

13

560,800

16 Jan 2013

30 Sep 2022

1,648

1,707

14

758,800

15 Jan 2014

30 Sep 2023

2,846

3,141

15

582,400

14 Jan 2015

30 Sep 2024

3,972.5

3,585

Note:
The fair value of the stock options at grant date does not include the fair value of stock options to which IFRS 2 “Share-based
Payments” does not apply, as mentioned in (4) below.
(2) Determination of stock option value
Weighted-average fair value of the stock options granted during the years ended 31 March 2014 and 2015, was 3,141 yen and 3,585
yen, respectively.
In determining the expense of the stock options, the options were priced using the Black-Scholes model. The following table details
the assumptions used in the Black-Scholes model for the options granted in the years ended 31 March 2014 and 2015.
Expected volatility was determined based on recent historical daily share price volatility from the grant date to the forecasted
remaining period.
No. 14
Share price at grant date (Yen)No. 15

2,994

4,056

Exercise price (Yen)

2,846

3,972.5

Expected volatility

33.71%

29.11%

Expected remaining option life (years)

6.0

6.0

Dividends yield

2.17%

1.85%

Risk free rate

0.28%

0.01%

- 95 -

(3) The number and weighted-average exercise prices of stock options
Weighted-average exercise price of the outstanding options was 2,522 yen and 2,914 yen as at the years ended 31 March 2014 and2015, respectively. Weighted-average remaining contractual life was 6.2 years and 4.5 years as at 31 March 2014 and 2015,
respectively.
For the year ended 31 March 2014

For the year ended 31 March 2015

Weighted average
Number of shares

exercise price

Weighted average
Number of shares

exercise price

(Yen)

(Yen)

4,602,800

2,323

4,251,100

2,522

Granted758,800

Forfeited (i)(510,100)

2,846

582,400

3,973

2,100

(171,700)

2,678

Exercised(600,400)

1,762(1,055,000)

1,960

Outstanding at the end of the period

4,251,100

2,522

3,606,800

2,914

Exercisable at the end of the period

2,691,500

2,673

2,171,200

2,835

Outstanding at the beginning of the period

Note:(i) Stock options forfeited were due to employee retirements.
Stock options exercised during the year ended 31 March 2015, were as follows:No.

Number of shares exercised

Exercise period

Weighted average of share price at
exercise date (Yen)

5

9,800

February to March 2015

4,893

8

158,000

April 2014 to March 2015

3,503

10

304,000

April 2014 to March 2015

3,553

11

299,200

April 2014 to March 2015

3,831

12

140,400

April 2014 to March 2015

3,838

13

92,000April 2014 to March 2015

3,798

14

51,600

October 2014 to March 2015

4,441

Total

1,055,000

Note:
The number of shares exercised and the amount paid by key management personnel are 105,600 shares and 229 million yen,respectively.
Stock options exercised during the year ended 31 March 2014, were as follows:No.

Number of shares exercised

Exercise period

Weighted average of share price at
exercise date (Yen)

8260,000

May 2013 to March 2014

2,584

10

101,200

December 2013 to March 2014

2,955

11

127,200

June 2013 to March 2014

2,876

12

88,400July 2013 to March 2014

2,613

13

23,600

October 2013 to March 2014

2,576

Total

600,400- 96 -

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

NumberGrant date

Expiry date

Exercise price

Fair value at grant date

(Yen)

(Yen)

5

445,000

1 Jan 2006

30 Sep 2015

4,150

2,518

6

195,200

7 Nov 2006

30 Sep 2016

4,750

1,113

Weighted-average exercise price of the outstanding options was 4,326 yen and 4,335 yen as at 31 March 2014 and 2015, respectively.
Weighted-average remaining contractual life was 1.8 years and 0.8 years as at 31 March 2014 and 2015, respectively.
For the year ended 31 March 2014

For the year ended 31 March 2015

Weighted average
Number of shares

exercise price

Weighted average
Number of shares

exercise price

(Yen)

(Yen)

Outstanding at the beginning of the period

476,400

4,333

456,900

4,326

Forfeited (i)(19,500)

4,504(27,500)

4,292

－

－

16,6004,150

Outstanding at the end of the period

456,900

4,326

412,800

4,335

Exercisable at the end of the period

456,900

4,326

412,800

4,335

Exercised

Note:(i) Stock options forfeited were due to employee retirements.
Stock options exercised during the year ended 31 March 2015, were as follows:
There were no stock options exercised for these plans during the year ended 31 March 2014.
No.

Number of shares exercised

Exercise period

Weighted average of share price at
exercise date (Yen)

5

16,600Total

16,600February to March 2015

- 97 -

4,854

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

(Millions of Yen)

(Thousands of U.S. Dollars

For the year ended

For the year ended

For the year ended

31 March 2014

31 March 2015

31 March 2015

(Note 2))

Sales of goods and products

426,727

Service revenue
Total sales

488,143

4,062,105

848

1,817

15,124

427,575

489,961

4,077,229(2) Other income from continuing operations
The following is an analysis of the Group’s other income from continuing operations:(Millions of Yen)

(Millions of Yen)

(Thousands of U.S. Dollars

For the year ended

For the year ended

For the year ended

31 March 2014

31 March 2015

31 March 2015

(Note 2))

Commission

437

480

3,995

Rent

83

89

744

Government grants

509

400

3,332

Gain on sale of plant, property and equipment

771

834

6,941

Insurance proceeds

813

42

351

2,841

1,630

13,564

5,453

3,476

28,926

OthersTotal other income(3) R&D expenses recognised as incurred(Millions of Yen)

(Millions of Yen)

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

For the year ended

For the year ended

31 March 2014

31 March 2015

31 March 2015

Employee benefits expenses

7,427

7,432

61,842

Depreciation and amortisation

1,632

1,618

13,464

Commission expenses

1,424

1,467

12,209Other expenses

8,647

8,014

66,689Total R&D expenses recognised as incurred

19,13018,531

154,205

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

- 98 -

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

(Millions of Yen)

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

Salary, bonuses and others

For the year ended

For the year ended

For the year ended

31 March 2014

31 March 2015

31 March 2015

93,842

104,665

870,976Retirement benefit
Defined benefit

361

439

3,656

1,908

2,147

17,863Retirement benefit total

2,269

2,586

21,520Share-based payments (stock option)

242

386

3,214

Severance payments

1,790

2,451

20,395

Others

4,618

5,130

42,687102,759

115,218

958,791

Defined contribution

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

Foreign exchange gains or losses include gains resulting from changes in fair value of currency derivatives.
(6) 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 2014

31 March 2015

31 March 2015

(Note 2))

Packaging/shipping/transportation

8,083

9,338

77,710Travel

5,360

6,019

50,085

Rent

6,275

6,655

55,376

Utilities

11,86012,717

105,828

Repair and maintenance

9,413

10,94791,099

113

222

1,850

419

279

2,326

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

31

3

22

45,19657,984

482,516

86,749104,165

866,812- 99 -

26.Finance income and costs(Millions of Yen)

(Millions of Yen)

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

For the year ended

For the year ended

31 March 2014

31 March 2015

31 March 2015

Finance income
Interest income
Cash and cash equivalents, loans andreceivables

1,137

1,408

11,715

56

53

444

Available-for-sale financial assets

656

835

6,949

Total finance income

1,849

2,296

19,107

Dividend income
Available-for-sale financial assets
Gain on saleFinance costs
Interest costs
Interest-bearing debt

1,220

1,031

8,579

Retirement benefits liabilities

49

27

228

Provisions

14

15

125

Other liabilities

11

49

409

－

35

293

15

42

353

－

9

73

1,309

1,209

10,060Loss on sale
Available-for-sales financial assets
Impairment losses
Available-for-sales financial assets (i)OthersTotal finance costs
Note:(i) Impairment losses were recognised on listed shares and the shares of private companies categorised as available-for-sale financial
assets due to significant or prolonged decline in the fair values against the carrying amount.

- 100 -

27.Other comprehensive income
For the years ended 31 March 2014 and 2015, items that may be reclassified subsequently to profit or loss comprise the following:(Thousands of U.S. Dollars(Millions of Yen)

(Millions of Yen)

(Note2))For the year ended

For the year ended

For the year ended

31 March 2014

31 March 2015

31 March 2015

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

443

59

494

(629)

(757)

(6,303)

(185)

(698)

(5,809)34,187

19,061

158,615

302

2,212

18,40534,48821,272

177,019

34,303

20,574

171,211

(89)

(236)

(1,960)34,214

20,339169,250

Reclassification adjustments to profit orloss for the year
Total
② Exchange differences on translation offoreign operations (ii)
Gains (losses) arising during the year
Reclassification adjustments to profit orloss for the year
Total
Other comprehensive income/(loss) before
tax
Income tax relating to components of othercomprehensive income
Total other comprehensive income/(loss)(net of tax)Note:(i) ‘Net gain/(loss) on revaluation of available-for-sale financial assets’ represents unrealised gain or loss on available-for-salefinancial assets at the end of the reporting period.
(ii) ‘Exchange differences on translation of foreign operations’ consist of differences on foreign currency conversion for financial
statements of foreign operations.

- 101 -

Deferred and current taxes on each item of other comprehensive income for the years ended 31 March 2014 and 2015, 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 2014

31 March 2015

31 March 2015

Total

Tax

Net of tax

Total

Tax

Net of tax

Total

Tax

Net of tax

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

(185)

72

(114)

(693)

245

(449)

(5,771)

2,037(3,734)34,365(160)

34,20521,436(480)

20,956

178,380(3,997)

174,384

81

(15)

66

(206)

39

(167)

(1,712)322(1,390)34,261(103)

34,15820,537(197)

20,340170,897(1,638)169,259

－

－

－

(5)

－

(5)

(38)

－

(38)

123

－

123

(164)

－

(164)

(1,361)－(1,361)

123

－

123

(168)

－

(168)

(1,400)－(1,400)34,384(103)

34,281

20,369(197)

20,172

169,498(1,638)167,860② Exchange differences ontranslation of foreign
operations③ Remeasurements of the
net defined benefit
liability (asset)
Subtotal
Other comprehensive
income attributable to Noncontrolling interests① Net gain/(loss) onrevaluation ofavailable-for-salefinancial assets② Exchange differences ontranslation of foreign
operations
Subtotal
Total other comprehensive
income- 102 -

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

(Yen)

(U.S. Dollars (Note 2))

For the year ended

For the year ended

For the year ended

31 March 2014

31 March 2015

31 March 2015

Basic earnings per share
From continuing operations

135.26

From discontinued operations
Total basic earnings per share

218.23

1.82

－

－

－

135.26218.231.82

135.04217.63

1.81

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

－

－

－

135.04217.63

1.81(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

For the year ended

For the year ended

31 March 2014

31 March 2015

31 March 2015

Profit attributable to owners of theCompany from continuing operations

58,39092,804772,273－－－

58,39092,804772,273

Profit attributable to owners of theCompany from discontinued operations
Profit used in the calculation of basic
earnings per share(b) Weighted-average number of ordinary shares used in the calculation of basic earnings per share(Shares in thousands)
For the year ended 31 March 2014

For the year ended 31 March 2015

Weighted-average number of ordinary
shares431,678- 103 -

425,248

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(Note 2))For the year ended

For the year ended

For the year ended

31 March 2014

31 March 2015

31 March 2015

Profit attributable to owners of theCompany from continuing operation after
dilution

58,39092,804772,273－－－

58,39092,804772,273

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

Weighted-average number of ordinary shares

For the year ended

For the year ended

31 March 2014

31 March 2015

431,678425,248

701

1,183

432,379

426,432

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

29.Non-cash transactions
Non-cash transactions for the years ended 31 March 2014 and 2015, consisted of acquiring property, plant and equipment through new
finance lease arrangements in the amount of 186 million yen and 267 million yen (2,222 thousand U.S. dollars), respectively.

- 104 -

30.Subsidiaries(1) Composition of the Group
Information about the composition of the Group as at 31 March 2014 and 2015, is as follows:

Reportable Segment
Information Technology

Life Care

Number of wholly owned subsidiaries

Location

As at 31 March 2014

As at 31 March 2015

U.S.A.

2

1

SINGAPORE

2

1

THAILAND

2

2

PHILIPPINES

3

3

VIETNAM

4

4MALAYSIA

1

1

SOUTH KOREA

1

1

TAIWAN

1

1

CHINA

8

8

JAPAN

1

1

U.S.A.

5

5

ARGENTINA

1

1

UNITED KINGDOM

2

2

ITALY

1

1

INDIA

3

3

INDONESIA

1

1

AUSTRALIA

1

1

NETHERLANDS

44

CANADA

2

2

SINGAPORE

3

3

SWEDEN

1

1

SPAIN

1

1

THAILAND

22

CZECH REPUBLIC

1

1

DENMARK

1

1

GERMANY

4

4

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

3

3- 105 -

Reportable Segment
Life Care

Other

Life Care

As at 31 March 2014

As at 31 March 2015

SOUTH KOREA

1

1

TAIWAN

1

1

CHINA

7

7

SOUTH AFRICA

1

1

JAPAN

5

6

U.S.A.

2

2

NETHERLANDS

1

2

SINGAPORE

1

1

SOUTH KOREA

1

1

JAPAN

1

1

Reportable Segment
Information Technology

Number of wholly owned subsidiaries

Location

Number of non-wholly owned subsidiaries

Location

As at 31 March 2014

As at 31 March 2015

PHILIPPINES

1

1

CHINA

3

3

IRELAND

1

1

U.S.A.

1

1

UNITED KINGDOM

1

1

ITALY

1

1

NETHERLANDS

4

1

SPAIN

1

1

GERMANY

3

3

FRANCE

1

1

VIETNAM

1

1

BELGIUM

1

1

CHINA

3

3

JAPAN

3

3

- 106 -

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

Proportion of ownership

Accumulated non-controlling interests

interests and voting
Name of

Locationsubsidiaries

rights held by noncontrolling interests
As at 31

As at 31

(Millions of (Millions of
Yen)

Yen)

As at 31

As at 31

(Thousandsof U.S.

(Millions of (Millions of
Yen)

Yen)

As at 31

As at 31

Dollars)
As at 31

(Thousandsof U.S.
Dollars)
As at 31

March 2014 March 2015 March 2014 March 2015 March 2015 March 2014 March 2015 March 2015
WASSENBUR

NETHERG MEDICAL

LANDS

B.V. and fiveand other

49.0%

49.0%

60

232

1,932

2,942

2,965

24,673

50.0%

50.0%

－

(254)

(2,110)

1,608

1,428

11,885

Individually immaterial subsidiaries with non-controlling interests

1,571

1,688

14,045

Total

6,121

6,081

50,603other companies countries
SEIKO
OPTICAL
PRODUCTS
CO., LTD andseven 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

As at / for the year

As at / for the year

ended 31 March 2014

ended 31 March 2015

ended 31 March 2015

WASSENBURG MEDICAL B.V. and fiveother companies
Non-current assets

5,074

4,427

36,840Current assets

3,621

3,936

32,754Non-current liabilities(1,177)(818)(6,809)Current liabilities(1,513)(1,494)(12,435)

Equity attributable to owner of the Company

3,063

3,086

25,677

Non-controlling interests

2,942

2,965

24,673

Revenue

2,258

5,713

47,543

Expenses(2,401)(5,239)(43,600)

(144)

474

3,943

Other comprehensive income/(loss)

46

(502)

(4,181)

Comprehensive income/(loss)

(98)

(29)

(237)

Dividends paid to non-controlling interests

－

－

－

Profit/(loss) for the year

Net cash flow from operating activities

398

277

2,307

Net cash flow from investing activities

(30)

(156)

(1,297)

Net cash flow from financing activities

(71)

(296)

(2,464)

Net cash flow

298

(175)

(1,453)- 107 -

(Millions of Yen)

(Millions of Yen)

(Thousands of U.S. Dollars)

As at / for the year

As at / for the year

As at / for the year

ended 31 March 2014

ended 31 March 2015

ended 31 March 2015

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

2,813

2,016

16,774Current assets

9,659

11,54096,027

Non-current liabilities

(108)

(185)

(1,541)

Current liabilities(9,066)(9,787)(81,440)

Equity attributable to owner of the Company

1,649

1,792

14,910Non-controlling interests

1,649

1,792

14,910

Revenue－

29,349244,229

Expenses－(29,203)(243,017)

Profit/(loss) for the year

－

146

1,212

Dividends paid to non-controlling interests

－

148

1,233

Other comprehensive income/(loss)

－

294

2,445

Comprehensive income/(loss)

－

－

－

Net cash flow from operating activities

－

407

3,385

Net cash flow from investing activities

－

(144)

(1,195)

Net cash flow from financing activities

－

(501)

(4,167)

Net cash flow

－

(238)

(1,977)Note(i) 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.

- 108 -

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

Name of subsidiary

Reportablesegment

services in the

Information

Electronics related(THAILAND) LTD.

Technology

products

HOYA GLASS DISKInformation

Electronics related

PHILIPPINES, INC.

Technology

products

HOYA GLASS DISKInformation

Electronics related

VIETNAM LTD.

Technology

products

HOYA GLASS DISKInformation

Electronics related

VIETNAM Ⅱ LTD.

Technology

products

HOYA MICROELECTRONICS Information

Electronics related

TAIWAN CO., LTD.

products

HOYA ELECTRONICS KOREA Information

Electronics relatedCO., LTD.

Technology

products

HOYA ELECTRONICS

Information

Electronics related

MALAYSIA SDN.BHD.

Technology

products

HOYA ELECTRONICS

Information

Electronics related

SINGAPORE PTE. LTD.

Technology

products

Information

Electronics related

Technology

products

EAST CHEER INVESTMENT

Information

Electronics related

LIMITED

Technology

products

HOYA OPTICS (THAILAND)

Information

Imaging related

LTD.

Technology

products

HOYA CORPORATION USA

HOYA OPTO-ELECTRONICS Information

Imaging related

QINGDAO LTD.

Technology

products

Information

Imaging related

Technology

products

HOYA OPTICALTECHNOLOGY (SUZHOU)LTD.

HOYA OPTICAL (ASIA) CO., Information

Imaging related

LTD.

Technology

products

Information

Imaging related

Technology

products

HOYA OPTICALTECHNOLOGY (WEIHAI) CO.,LTD.

PENTAX CEBU PHILIPPINES Information

Imaging related

CORPORATION

products

Technology

HOYA LENSMANUFACTURING

Life Care

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

Life Care
Life Care

Proportion ofshares held

shares held

As at 31 March

As at 31 March

2014

2015

THAILAND

100.0%

100.0%PHILIPPINES

100.0%

100.0%VIETNAM

100.0%

100.0%VIETNAM

100.0%

100.0%TAIWAN

100.0%

100.0%

SOUTH KOREA

100.0%

100.0%

MALAYSIA

100.0%

100.0%

SINGAPORE

100.0%

100.0%U.S.A.

100.0%

100.0%

CHINA

100.0%

100.0%THAILAND

100.0%

100.0%

CHINA

100.0%

100.0%

CHINA

100.0%

100.0%

CHINA

100.0%

100.0%

CHINA

100.0%

100.0%PHILIPPINES

100.0%

100.0%

MALAYSIA

100.0%

100.0%THAILAND

100.0%

100.0%

CHINA

95.0%

95.0%

AUSTRALIA

100.0%

100.0%

Location

reportable segment

HOYA GLASS DISKTechnology

Proportion ofMajor products/

Health Care related
products
Health Care related
products
Health Care related
products
Health Care related
products- 109 -

Reportable

Name of subsidiary

HOYA LENS INDIA PRIVATELIMITEDsegment

Life Care

HOYA LENS VIETNAM LTD. Life Care

HOYA HOLDINGS N.V.
HOYA LENSDEUTSCHLAND GMBH

Life Care andCorporate
Life Care

HOYA LENS U.K. LTD.

Life Care

HOYA LENS ITALIA S.P.A.

Life Care

HOYA LENS IBERIA S.A.

Life Care

HOYA LENS FRANCE S.A.S.

Life Care

HOYA LENS OF AMERICA,INC.
SEIKO OPTICAL PRODUCTS
CO., LTD.

Life Care
Life CarePENTAX EUROPE GMBH

Life CarePENTAX ITALIA S.R.L

Life CarePENTAX U.K. LTD.

Life CarePENTAX CANADA, INC.

Life Care

MICROLINE SURGICAL, INC. Life Care
HOYA HOLDINGS ASIA
PACIFIC PTE. LTD.

Corporate

HOYA HOLDINGS (ASIA) B.V. Corporate
HOYA FINANCE B.V.

Corporate

HOYA HOLDINGS, INC.

Corporate

Proportion ofMajor products/
services in theshares held

shares held

As at 31 March

As at 31 March

2014

2015

INDIA

100.0%

100.0%VIETNAM

100.0%

100.0%NETHERLANDS

100.0%

100.0%GERMANY

100.0%

100.0%

100.0%

100.0%

ITALY

100.0%

100.0%

SPAIN

100.0%

100.0%FRANCE

100.0%

100.0%U.S.A.

100.0%

100.0%

JAPAN

50.0%

50.0%

GERMANY

100.0%

100.0%

ITALY

60.0%

60.0%

100.0%

100.0%CANADA

100.0%

100.0%U.S.A.

100.0%

100.0%

SINGAPORE

100.0%

100.0%NETHERLANDS

100.0%

100.0%NETHERLANDS－

100.0%

100.0%

100.0%

Location

reportable segment
Health Care related
products
Health Care related
products

Proportion of

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

UNITEDproducts

KINGDOM

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

UNITEDproducts

KINGDOM

Medical related
products
Medical related
products
Asia and Oceania
headquarters
Asia and Oceania
holding company
Asia and Oceania
financing company
North America
headquarters

U.S.A.

Note(i) Loss associated with loss of control of a subsidiary due to liquidation was recognised in the amount of 2,213 million yen (before
tax effect) (18,413 thousand U.S. dollars) and included in “Other expenses” in the consolidated statement of comprehensive income
for the year ended 31 March 2015.

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31.Related party disclosures
Transactions between the Company and its subsidiaries which are related parties of the Company, have been eliminated inconsolidation and are not disclosed in this note. Details of the balances and transactions between the Company and other relatedparties are disclosed as follows:(1) Transactions with related parties, and receivables and payables balances
The Group had transactions with related parties as follows:
As at/for the year ended 31 March 2014:
Name of subsidiary

Nature of related party transactions

Transaction amount(Millions of Yen)

Subsidiaries

SEIKO OPTICAL PRODUCTS CO., LTD

Sales of products

6,150

SEIKO OPTICAL EUROPE GMBH

Sales of products

373

SEIKO OPTICAL PRODUCTS OF AMERICA, INC. Sales of products

556

The Company acquired 9,000 stocks, or 30% of the outstanding shares, of SEIKO OPTICAL PRODUCTS CO., LTD. (“SOP”) on 1
June 2013. As a result, SOP became an affiliate of the Group. On 31 March 2014, the Company acquired an additional 6,000 shares,or 20% of the outstanding shares. As a result of obtaining control, SOP became a subsidiary of the Group. SEIKO OPTICALEUROPE GMBH and SEIKO OPTICAL PRODUCTS OF AMERICA, INC. are the wholly owned subsidiaries of SOP.
As the transaction amounts with SOP in the year ended 31 March 2014, are included in the consolidated financial statements, thetransaction amounts are disclosed as transactions with related parties. The outstanding balances are not disclosed, as the receivables
and payables have been eliminated in consolidation.
As at/for the year ended 31 March 2015:
Name of

Nature of related

Transaction

Outstanding

Transaction

Outstanding

affiliates

party transactions

amountbalanceamountbalance(Thousands of(Thousands of

U.S. Dollars

U.S. Dollars(Note 2))

(Note 2))

(Millions of Yen) (Millions of Yen)

Affiliates

AvanStrate, Inc.

Loans of funds

8,500Interest received

179

Advance paid

388

8,500

70,73370,733

62

1,488

515

－

3,231

－

Note:
The platinum owned by a subsidiary of the affiliate is pledged as collateral.
(2) Remuneration of key management personnel
The 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 2014

31 March 2015

31 March 2015

Short-term benefits

486

673

5,604

Share-based payments

66

172

1,435

Total remuneration of key management personnel

552

846

7,039

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 the performance.

32.Business combinations
The Group acquired a company through a business combination during the year ended 31 March 2015. However, the disclosure isomitted due to its immateriality.

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

(Millions of Yen)

(Thousands of U.S. Dollars(Note 2))As at 31 March 2014
Business partners
Total

As at 31 March 2015

As at 31 March 2015

290

135

1,127

290

135

1,127

34.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 2014

As at 31 March 2015

As at 31 March 2015

Commitments for the acquisition ofproperty, plant and equipment andintangible assets

5,781

8,576

71,36935.Subsequent events
Resolution on cash dividends
On 21 May 2015, a resolution was made by the Company’s board of directors for the payment of a cash dividend to shareholders ofrecord on 31 March 2015 of 19,077 million yen (158,749 thousand U.S. dollars) (45 yen per common share).
Repurchase of treasury stock
The board of directors made a resolution to purchase the Company’s treasury stock on 12 May 2015 based on Article 39 of the
Articles of Incorporation pursuant to the first paragraph of Article 459 of the Companies Act.
1. Reason for purchase of treasury stock
The Company decided to acquire its own shares with the aim of shareholders benefit, improving capital efficiency and ensuring aflexible capital policy.
2. Outline of Repurchase(1) Class of shares: Common stock issued by Hoya Corporation(2) Total number of shares: Up to 10 million shares (2.36% of total shares outstanding, excluding treasury stock)(3) Total purchase cost: Up to 45 billion yen (374,470 thousand U.S. dollars)(4) Period for purchase: 13 May 2015 to 30 September 2015(5) Method of purchase: Purchase at the Tokyo Stock Exchange based on a discretionary investment contract(6) Others: Purchased stocks are planned to be cancelled with the aim of increase of shareholders benefit

36.Approval of financial statements
The consolidated financial statements for the year ended 31 March 2015, were approved by the Company’s board of directors andauthorised for issue on 21 May 2015.

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