HOYA Corporation and its subsidiaries
Consolidated Financial Statements under IFRSs
and Independent Auditor's Report

For the year ended 31 March 2010HOYA Corporation

Contents
Independent Auditor’s Report………………..................……………………………………………………………. 3
Consolidated Statement of Financial Position............................................................................................................. 4
Consolidated Statement of Comprehensive Income ................................................................................................... 6
Consolidated Statement of Changes in Equity ............................................................................................................ 8
Consolidated Statement of Cash Flows (including discontinued operations) ......................................................... 10
Notes to the Consolidated Financial Statements ....................................................................................................... 12
1.
General information........................................................................................................................................ 12
2.
Basis of consolidated financial statements .................................................................................................... 12
3.
Significant accounting policies ....................................................................................................................... 16
4.
Critical accounting judgements and key sources of estimation uncertainty .............................................. 26
5.
Operating segment information..................................................................................................................... 27
6.
Property, plant and equipment ...................................................................................................................... 30
7.
Intangible assets .............................................................................................................................................. 32
8.
Impairment losses ........................................................................................................................................... 33
9.
Investments in associates ................................................................................................................................ 37
10.
Income taxes .................................................................................................................................................... 38
11.
Other financial assets and liabilities .............................................................................................................. 41
12.
Other assets and liabilities.............................................................................................................................. 42
13.
Inventories ....................................................................................................................................................... 43
14.
Trade and other receivables ........................................................................................................................... 43
15.
Cash and cash equivalents.............................................................................................................................. 43
16.
Interest-bearing debt ...................................................................................................................................... 44
17.
Finance lease obligations ................................................................................................................................ 45
18.
Operating lease arrangements ....................................................................................................................... 45
19.
Retirement benefit plans................................................................................................................................. 46
20.
Other Provisions.............................................................................................................................................. 49
21.
Trade and other payable................................................................................................................................. 49
22.
Share capital and other equity items ............................................................................................................. 50
23.
Financial instruments ..................................................................................................................................... 52
24.
Assets held for sale .......................................................................................................................................... 64
25.
Share-based payments .................................................................................................................................... 65
26.
Revenue and expenses (excluding finance income and costs)...................................................................... 68
27.
Finance income and costs ............................................................................................................................... 70
28.
Discontinued operations ................................................................................................................................. 71
29.
Other comprehensive income ......................................................................................................................... 72
30.
Earnings per share .......................................................................................................................................... 73
31.
Non-cash transactions..................................................................................................................................... 73
32.
Main subsidiaries ............................................................................................................................................ 74
33.
Related party disclosure ................................................................................................................................. 76
34.
Business combinations .................................................................................................................................... 77
35.
Sale of subsidiary ............................................................................................................................................ 78
36.
Contingent liabilities ....................................................................................................................................... 78
37.
Commitments for expenditure ....................................................................................................................... 78
38.
Subsequent events ........................................................................................................................................... 79
39.
Approval of financial statements ................................................................................................................... 79
40.
Explanation of transition to IFRSs ................................................................................................................ 80

3

HOYA Corporation and its subsidiaries
Consolidated Statement of Financial Position
As at 31 March 2010
Notes

As at 1 April 2008

As at 31 March 2009

(Millions of Yen)
As at 31 March 2010

Property, plant and equipment—net

6, 37

154,272

130,498

122,203

Goodwill

7,8

17,175

2,693

5,484

Other intangible assets

7

36,626

19,22817,782

Investments in associates

917,279

9,092

9,214

Long-term financial assets
Other non-current assets

11,23
12

10,263
4,482

9,115
3,587

18,8092,962

Deferred tax assets

10

57,622

47,18844,684

297,719

221,401

221,138ASSETSNON-CURRENT ASSETS:

Total non-current assets
CURRENT ASSETS:
Inventories

13

81,133

71,10861,214

Trade and other receivables
Other short-term financial assets

14,23
11,23

121,810
1,363

81,685
6,899

94,298
5,586

7,729

2,363

2,326

Income tax receivables
Other current assets

12

6,062

7,711

7,465

Cash and cash equivalents

15,23

181,336

207,928

167,93824

399,433
234

377,694
1,126

338,827325

Sub total
Assets held for sale
Total current assets

399,667

378,820

339,152

Total assets

697,386

600,221560,290

4

HOYA Corporation and its subsidiaries
Consolidated Statement of Financial Position
As at 31 March 2010-Continued
Notes

As at 1 April 2008

As at 31 March 2009

(Millions of Yen)
As at 31 March 2010

EQUITY
Share capital

22(1)

6,264

6,264

6,264

Capital reserves22(1)15,89915,89915,899Treasury shares
Other capital reserves22(2)22(2),25(7,984)(3,768)(7,985)(3,303)(11,010)(3,014)Retained earnings

22(3),38

EQUITY AND LIABILITIES

381,697

382,941

396,019

Accumulated other comprehensive
income/(loss)(834)(52,606)(46,603)

Equity attributable to owners of
the Company
Minority interests

391,274

341,210357,555

2,903

1,774

1,194

394,177

342,984

358,749

115,157

111,554

102,995

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

16,17,23

Other long-term financial liabilities

11,23

73

284

7

Retirement benefits obligation

19

10,383

8,489

8,186

Other provisions
Other non-current liabilities

20
12
10

1,891
838

1,943
789

1,718
1,703

109

56

10

128,451

123,115

114,619

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

16,17,23

23,891

48,8884,290

Trade and other payables
Other short-term financial liabilities

21,23
11,23

81,011
10

46,082150

47,279385

30,851

7,273

4,469

Income tax payables
Other provisions

20

991

794

904

Other current liabilities

12

38,00430,93529,595

Total current liabilities

174,758

134,12286,922

Total liabilities
Total equity and liabilities

303,209697,386

257,237
600,221201,541
560,2905

HOYA Corporation and its subsidiaries
Consolidated Statement of Comprehensive Income
For the year ended 31 March 2010
For the year ended 31
March 2009

(Millions of Yen)
For the year ended 31
March 2010

453,795
13,570999
11,145479,509413,726
920
466
5,720
420,832

6,396
108,223
107,258
46,796
12,828
12,77526,40230,767
4,793
73,382429,62049,88919,931
29,958

11,19193,801
92,922
33,954
7,046
10,64821,991834
2,896
93,992369,275
51,557
10,04041,517(879)
29,079－41,517(50,593)744(1,989)
(176)

5,866
495
(281)
(64)

Total other comprehensive income/(loss)
Total comprehensive income/(loss) for the year
Profit attributable to:(52,014)(22,935)

6,016
47,533

Owners of the Company
Minority interests

29,380(301)
29,07941,213304
41,517(22,392)(543)(22,935)

47,216317
47,533

Notes
Continuing operations
Revenue:
Sales
Finance income
Share of profit of associates
Other income

26
27
9
6,26

Total Revenue
Expenses:
Changes in inventories of goods, products and work in progress
Raw materials and consumables used
Employee benefits expense
Depreciation and amortisation
Subcontracting cost

19,26
6,7

Advertising and promotion expense
Commission expense
Impairment losses
Finance costs
Other expenses

827
6,7,18,26

Total Expense
Profit before tax

10

Income tax expense
Profit for the year from continuing operations

Discontinued Operations
28

Profit/(loss) for the year from discontinued operations
Profit for the year

29

Other comprehensive income:Exchange differences on translating foreign operations
Net gain on revaluation of available-for-sale financial assets
Share of other comprehensive income of associates
Income tax relating to components of other comprehensive
income10

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

6

HOYA Corporation and its subsidiaries
Consolidated Statement of Comprehensive Income
For the year ended 31 March 2010-Continued

Notes
Basic earnings/(loss) per share
Continuing operations
Discontinued operations

For the year ended 31
March 2009(Yen)
For the year ended 31
March 2010

69.90
（2.03）
67.87

95.24
－
95.24

69.89
（2.03）
67.86

95.15
－
95.15

30

Basic earnings per share
Diluted earnings/(loss) per share
Continuing operations
Discontinued operations

30

Diluted earnings per share

7

HOYA Corporation and its subsidiaries
Consolidated Statement of Changes in Equity
For the year ended 31 March 2010
Share capital
Notes

Capital reserves

Treasury shares22(1)15,89922(2)(7,984)

22(1)
6,264

Balance at 1 April 2008

Other capitalreserves22(2)(3,768)

Total comprehensive
Income/(loss) for the year
Profit/(loss) for the year
Other comprehensive income/(loss)(Millions of Yen)
Retainedearnings
22(3)381,697

29,38029
29,380Total comprehensive
income/(loss) for the year
Transactions with owners
Contributions by anddistributions to owners
Acquisition of treasury shares(6)

Disposal of treasury shares

5

Dividends, Yen 65 per share(2)

22(3),38(28,136)

Change in minority interests
Share-based payments (Stock
option)Total contributions by anddistributions to owners
Total transactions with owners

25

467

6,264

Balance at 31 March 2009

15,899(1)

465(28,136)(1)

465(28,136)(7,985)(3,303)382,941

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

41,21329
41,213

Total comprehensive
income/(loss) for the year
Transactions with owners
Contributions by anddistributions to owners
Acquisition of treasury shares(3,275)

Disposal of treasury shares
Dividends, Yen 65 per share

250

(140)

22(3),38(28,135)

Change in minority interests
Share-based payments (Stock
option)Total contributions by anddistributions to owners

25

429

Total transactions with owners
Balance at 31 March 2010

6,264

15,8998(3,025)289(28,135)(3,025)289(28,135)(11,010)(3,014)

396,019

HOYA Corporation and its subsidiaries
Consolidated Statement of Changes in Equity
For the year ended 31 March 2010-Continued(Millions of Yen)

Notes

Exchange
Net gain/(loss)
on revaluation differences on Share of other Accumulated Attributable toownersothertranslation of comprehensiveof availableof thecomprehensive
foreignincome offor-saleCompany
incomeoperations
associates
financial assets(834)

Balance at 1 April 2008

－

0

(834)

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

29

Total comprehensive
income/(loss) for the year
Transactions with owners

Minority
interests
22(4)Total equity

391,274

2,903

394,177

29,380(301)

29,079531(50,314)(1,989)(51,772)(51,772)(242)(52,014)531(50,314)(1,989)(51,772)(22,392)(543)(22,935)

Contributions by anddistributions to owners
Acquisition of treasury shares

(6)

(6)

Disposal of treasury shares

3

3

Dividends, Yen 65 per share

22(3),38(28,136)

Change in minority interests
Share-based payments (Stock
option)Total contributions by anddistributions to owners

25

29

Total comprehensive
income/(loss) for the year
Transactions with owners(27,672)(586)(28,258)(27,672)(586)(28,258)

341,210

1,774

342,984(1,989)(52,606)

41,213304

41,517

451

5,833

(281)

6,003

6,003

13

6,016

451

5,833

(281)

6,003

47,216317

47,533

Disposal of treasury shares22(3),38(3,275)(3,275)110

110(28,135)

Change in minority interests
Share-based payments (Stock
option)Total contributions by anddistributions to owners

25

(159)

(28,294)

(738)

(738)

429

Total transactions with owners
Balance at 31 March 2010

467

(50,314)

Contributions by anddistributions to owners
Acquisition of treasury shares

Dividends, Yen 65 per share

(279)

(303)

Total comprehensive
Income/(loss) for the year
Profit for the year
Other comprehensive income/(loss)(28,443)

(279)
467

Total transactions with owners
Balance at 31 March 2009

(307)

148

(44,481)9(2,270)(46,603)429(30,871)(897)(31,768)(30,871)(897)(31,768)

357,555

1,194

358,749HOYA Corporation and its subsidiaries
Consolidated Statement of Cash Flows (including discontinued operations)
For the year ended 31 March 2010
(Millions of Yen)
Notes

For the year ended 31
March 2009

For the year ended 31
March 2010

Cash flows from operating activities
Profit before tax
Loss before tax from discontinued operations
Depreciation and amortisation
Impairment losses
Finance income
Finance costs
Share of profits of associates(Gain)/loss on sales of property, plant and equipment
Loss on disposal of property, plant and equipment(Gain)/loss on business transfer

26

OthersCash generated from operations (before movements inworking capital)
Movements in working capital
Decrease/(increase) in inventories
Decrease/(increase) in trade and other receivables
Increase/(decrease) in trade and other payables
Increase/(decrease) in retirement benefits obligation andother provisions
Sub totalInterests received
Dividends received
Interests paid
Income taxes paid
Income taxes refunded
Net cash generated from operating activities

10

49,889(879)
46,79730,834(13,570)
4,793
(999)
26
478
(892)
(1,663)
114,81451,557－33,954
834
(920)
2,896
(466)
307
1,057

4,700
33,316(32,418)(2,040)10,093(12,737)
1,126
(455)

118,372
3,413
63(1,897)(34,990)
7,387
92,34893,949846
55(2,037)(10,727)
1,648
83,734－
6,703
95,922HOYA Corporation and its subsidiaries
Consolidated Statement of Cash Flows (including discontinued operations)
For the year ended 31 March 2010-Continued

Notes

For the year ended 31
March 2009

(Millions of Yen)
For the year ended 31
March 2010

Cash flows from investing activities
Withdrawals of time deposit
Deposits for time deposit
Proceeds from sales of property, plant and equipment
Payments for acquisition of property, plant andequipment
Proceeds from disposal of investment securities
Payments for purchase of investment securities
Net cash outflow on acquisition of subsidiary
Payments to minority shareholders on merger
Proceeds from business transfer

34
34
26

Other proceeds
Other payments
Net cash used in investing activities

590(7,108)1,170(34,174)

4,652(3,157)
2,050(26,651)

17,876(748)(1,154)(9,398)
1,320
1,095(3,798)(34,329)43－(3,423)(85)－739(14,891)(40,723)

Cash flows from financing activities
Dividends paid to owners of the Company(28,115)(307)(5,690)35,786135(8,979)3(6)

Dividends paid to minority interests
Increase (decrease) in short-term debt
Increase (decrease) in commercial paper
Proceeds from long-term borrowings
Repayments of long-term borrowings
Proceeds from disposal of treasury shares
Payments for purchase of treasury shares－－(7,173)50,846
181,336(24,254)

Payments for purchase of treasury shares by subsidiaries
Proceeds from exercise of stock options
Net cash used in financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Effects of exchange rate changes on the balance of cash andcash equivalents in foreign currencies
Cash and cash equivalents at the end of the year

(28,236)(159)(1,563)(41,978)
225(9,145)0(3,275)(709)
110(84,730)(41,719)
207,9281,729

15
207,928
167,938
Note:
Cash flows from discontinued operations are stated in Note 28 “Discontinued operations” and non-cash transactions arestated in Note 31 “Non-cash transactions”.

11HOYA Corporation and its subsidiaries
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 officeand 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
Reporting Standards ("IFRSs").
The Group first adopted IFRSs for the fiscal year ended 31 March 2010, with a date of transition to IFRSs on 1 April
2008. The Group issued consolidated financial statements for the year ended 31 March 2010 in accordance withaccounting principles generally accepted in Japan ("Japanese GAAP"). The Company’s accounting policies complied witheach IFRSs effective at 31 March 2010, except for provisions under IFRSs for which early adoption was not made by theCompany and for allowed exemptions as noted below.
IFRS1 “First-time Adoption of International Financial Reporting Standards” requires a first-time adopter to include at least
three consolidated statements of financial position, two consolidated statements of comprehensive income, twoconsolidated statements of cash flows and two consolidated statements of changes in equity and related notes in its first
consolidated financial statements.
Additionally, under IFRS1, the Group is required to disclose following reconciliations;・the reconciliation of total equity amount in the consolidated balance sheet under Japanese GAAP to total equity amountin the consolidated statement of financial position under IFRSs as at 1 April 2008 and 31 March 2010.
・the reconciliation of profit for the year in the consolidated statement of income under Japanese GAAP to profit
attributable to owners of the Company in the consolidated statement of comprehensive income under IFRSs for the year
ended 31 March 2010.
Likewise, the Company disclosed the reconciliation as at 31 March 2009 and for the year then ended as well.
The Group disclosed such reconciliation in Note 40 “Explanation of transition to IFRSs”.
Also, IFRS 1 provides exemptions for first-time adopters and the Group has elected exemptions for share-based payments
transactions, business combinations, borrowing costs and cumulative translation differences.
Consequently, the Group did not apply IFRSs effective 31 March 2010 for the following items;
IFRS 2 “Share-based Payment” for equity instruments that were vested on and before 31 March 2008.
IFRS 3 “Business Combinations” for past business combinations that occurred on and before 31 March 2008.
The Group applied IAS 23 “Borrowing Costs” relating to qualifying assets for transactions that occurred on and after 1
April 2009. Cumulative translation differences for all foreign operations were adjusted to be zero as at 1 April 2008.
The accompanying consolidated financial statements are stated in Japanese Yen and rounded to the nearest million yen.
The Company and its domestic subsidiaries maintain their books and prepare their financial statements in accordance withJapanese GAAP while its foreign subsidiaries maintain their books and prepare their financial 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.

12(2) Early adoption of new and revised IFRSs
The Group has prepared the accompanying consolidated financial statements in accordance with IFRSs that were effective
as at 31 March 2010. Early adoption of new or revised IFRSs was not made except for the annual improvement to IFRS 8“Operating Segments”.
Effective for the year beginning on or after 1 January 2009, IFRS 8 requires operating segments to be identified on thebasis of internal reports about components of the Group that are regularly reviewed by the chief operating decision makerin order to allocate resources to the segments and to assess their performance. As a result of the annual improvement to
IFRSs in April 2009, segment assets and liabilities need to be reported only when those assets and liabilities are
periodically reported to the chief operating decision maker. This amendment is effective for annual periods beginning on
or after 1 January 2010 with earlier application permitted. The Group early adopted this amended IFRS8 for the year
ended 31 March 2010.
(3) Standards and interpretations in issue not yet adopted by the GroupAt the date of authorisation of the consolidated financial statements, other than IFRSs adopted by the Group earlier thantheir effective dates, the main standards and interpretations that were in issue but not yet effective for mandatory adoption
are as follows;
Effective forannual periods
beginning on or
after

To be
adopted by
the Groupfrom theyear ending

Presentation of
Financial
Statements

1 January 2010

March 2011

Statement of Cash
Flows
Leases

1 January 2010

IFRSs

IAS 1

IAS 7
IAS 17
IAS 24

Related Party
Disclosures

IAS 27

Consolidated andSeparate Financial
Statements

1 January 2011

1 January 2010
1 January 2011

1 July 2009

1 July 2010

IAS 32

IAS 34

Financial
Instruments:
Presentation
Interim Financial
Reporting

1 February
2010
1 January 2011

IAS 36

Impairment of
Assets

1 January
2010

IAS 39Financial
Instruments:
Recognition andMeasurement

1 July 2009
1 January
2010

Subject of amendment- Clarification on current/non-current
classification of convertible instruments
March 2012 - Clarification on the presentation of eachcomponent of equity in the statement of changes
in equity
March 2011 - Clarification on the classification of
expenditures on unrecognised assets
March 2011 - Revision on the classification of leases of landand buildings
March 2012 - Partial exemption of disclosure forgovernment-related entities- Revision of the definition of related party
March 2011 - Revision to step acquisition that previously-heldequity interest in the acquiree must be remeasured
at acquisition-date fair value and recognise theresulting gain or loss, if any, in profit or loss.
- Revision to non-controlling interests that total
comprehensive income must be attributed to theowners of the parent and to the non-controllinginterests even if this results in the non-controllinginterests having a deficit balance
March 2012 - Clarification on the transition requirements foramendments to IAS 21, IAS 28 and IAS 31
arising as a result of revised IAS 27 (2008)
March 2011

- Amendment of the classification of rights issues

March 2012 - Amendments to emphasise its disclosure
principles and to add further guidance, including
additional examples, to illustrate how to apply
these principles
March 2011 - Amendment about units of accounting for
goodwill impairment testing using segments
before aggregation under IFRS 8
March 2011 - Clarification of eligibility of hedged item
March 2011 - Prohibition of the consideration of time value ofmoney for option-type derivatives in determining
the hedging relationship.
- Treatment for loan prepayment penalties as
closely related embedded derivatives
13

IFRSsIFRS 1First-time
Adoption ofInternational
Financial
ReportingStandards

Effective forannual periods
beginning on orafter

1 July 2009

March 2011

1 January
2010

March 2011

1 July 2010

1 January 2011

IFRS 2IFRS 3

Share-based
Payment

Business
Combinations

1 July 2009

1 January
2010
1 July 2009

1 July 2010

IFRS 5

Non-current Assets
Held for Sale andDiscontinued
Operations

To beadopted by
the Groupfrom theyear ending

1 July 2009

1 January
2010

Subject of amendment- Scope exemption for business combination
contracts- Amendment for cash flow hedge accounting- Restructured version of IFRS 1- Exemption for entities using the full cost methodfrom retrospective application of IFRSs for oil
and gas assets- Exemption for entities with existing leasing
contracts from reassessing the classification of
those contracts in accordance with IFRIC 4
March 2012 - Relief from providing the additional disclosures
introduced in March 2009 by amendments to
IFRS 7
March 2012 - Clarification for a first-time adopter that changes
its accounting policies or its use of IFRS 1
exemptions after a publishing a set of IAS 34
financial information should explain thosechanges and include the effects of such changes in
its opening reconciliations within the first annual
IFRSs reporting- Clarification that a revaluation that occurs
during the period covered by the first IFRSs
financial statements can be used as a deemed cost
- Clarification for the criteria of use of the deemed
cost for rate-regulated activity
March 2011 - Revision of IFRS 2 in accordance with therevision of IFRS 3 in 2008 on the definition ofbusiness combinations
March 2011 - Clarification for the accounting for groupcash-settled share-based payments transactions
March 2011 - Amendment that on the date when control is
obtained or lost, the entity’s share to the acquiree
should be remeasured at fair value, and changes ina parent's ownership interest in a subsidiary that
do not result in a loss of control are accounted foras equity transactions-Amendment to acquisition costs that the costs are
expensed as incurred
March 2012 - Revision to measurement of non-controllinginterests- Revision to un-replaced and voluntarily replacedshare-based payments transactions- Transition requirements for contingent
consideration from a business combination that
occurred before the effective date of revised IFRS
3 (2008)
March 2011 - Amendment that assets and liabilities of a
subsidiary should be classified as held for sale if
the parent is committed to a plan involving loss ofcontrol of the subsidiary
March 2011 - Amendment to the treatment when a committed
sales plan involves loss of control of a subsidiary- Clarification for disclosures for non-current
assets (or disposed group) classified as held forsale or discontinued operations

14

IFRSsIFRS 7

Effective forannual periods
beginning on or
after

Financial
Instruments:
Disclosures

1 January 2011

IFRS 9Financial
Instruments

1 January
2013

IFRIC 9Reassessment ofEmbedded
Derivatives
Customer Loyalty
Programmes

1 July 2009

IFRIC 13IFRIC 14IFRIC 16IFRIC 17IFRIC19

1 July 2011

1 January 2011

IAS 19 – The
Limit on a Defined
Benefit Asset,
Minimum Funding
Requirements andtheir Interaction
Hedges of a Net
Investment in a
Foreign Operation
Distributions of
Non-cash Assets to
Owners

1 January 2011

Extinguishing
Financial
Liabilities with
Equity Instruments

1 July 2010

To beadopted by
the Groupfrom theyear ending

Subject of amendment

March 2012 - Revision to disclosures of the nature and extent
of risks associated with financial instruments
March 2013 - Amendment on enhancing disclosures fortransferred financial assets
March 2014 - Replacement of IAS 39 for classification offinancial assets measured either at amortised costor fair value- Amendment to IAS 39 that for investments inequity instruments designated as at fair value
through other comprehensive income, the only
dividends on the investments to be recognised in
profit or loss
- Amendment that the changes in fair value, due tochanges in the own credit risk, of financial
liabilities designated at FVTPL should berecognised directly in other comprehensive
incomeMarch 2011 - Amendment for the scope of IFRIC 9 forbusiness combinations
March 2012 - Clarification that when the fair value of award
credits is measured on the basis of the value of theawards for which they could be redeemed, the fairvalue of the award credits should take account of
expected forfeitures as well as the discounts or
incentives that would otherwise be offered tocustomers who have not earned award credits
from an initial sale
March 2012 - Amendment that an early payment ofcontribution to cover minimum funding
requirements should be deemed as economic
benefits

1 July 2009

March 2011

1 July 2009

March 2011

- Amendment to the restriction on the entity that
can hold hedging instruments- Clarification that an entity should measure thedividend payable at the fair value of the non-cash
assets to be distributed- Clarification that an entity should remeasure thedividend liability at each reporting date withchanges recognised directly in equity- Clarification that an entity should recognise thedifference between the carrying amount of theassets distributed and the carrying amount ofdividend payable in profit or loss, and should
disclose it separately
March 2012 - Guidance on “debt-equity swap”.

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 butthese standards and interpretations should have no significant impact on the future consolidated financial statements of theGroup, except for IFRS 3 “Business Combinations” and IFRS 9 “Financial Instruments”.
15

3.

Significant accounting policies(1) Basis of preparation
The consolidated financial statements have been prepared on the historical cost basis except for the derivative financial
instruments and available-for-sale financial assets measured at fair value in principle. The principal accounting policies are
set out below.
(2) Basis of consolidation① Subsidiaries
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by theCompany as at 31 March of each year. Control is achieved where the Company has the power to govern the financial andoperating policies of an entity so as to obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the year which resulted in a change of control are included in the
consolidated statement of comprehensive income from the effective date of acquisition and up to the effective date ofdisposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring theiraccounting policies into line with those used by other members of the Group. All intra-group transactions, balances,income and expenses are eliminated in full in preparing consolidated financial statements.
Minority interests in subsidiaries are identified separately from the Group’s equity therein. Minority interests consist of
those interests at the date of the original business combination and the minority share of changes in equity since the date of
the combination. Losses applicable to the minority interests in excess of the minority interest in the subsidiary's equity areallocated against the interests of the Company except to the extent that the minority interests has a binding obligation andis able to make an additional investment to cover the losses.
② Investments in associates
An associate is an entity over which the Group has significant influence which is the power to participate in the financial
and operating policy decisions of the investee but is not control or joint control over those policies.
The results, and assets and liabilities of associates are incorporated in the consolidated financial statements using theequity method of accounting, except when the investment is classified as assets held for sale, in which case it is accounted
for in accordance 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 as
adjusted for post-acquisition changes in the Group’s share of the net assets of the associates, less any impairment in thevalue of individual investments.
Losses of an associate in excess of the Group’s interest in that associate (which includes any long-term interests that, in
substance, form part of the Group’s net investment in the associate) are recognised only to the extent that the Group has
incurred legal or constructive obligations or made payments on behalf of the associate.
Any excess of the cost of acquisition over the Group’s share of the net fair value of the identifiable assets, liabilities andcontingent liabilities of the associate recognised at the date of acquisition is tested for impairment. Any excess of theGroup’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition
is recognised immediately in profit or loss.
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) Business combination
Business combinations are accounted for on the basis of IFRS 3 (2004) “Business Combination”, and acquisitions ofsubsidiaries and businesses are accounted for using the purchase method. Any costs directly attributable to the businesscombination are included in the cost of the business combination. The acquiree's identifiable assets and liabilities arerecognised at their fair values at the acquisition date.
Where applicable, the consideration for the acquisition includes any asset or liability resulting from a contingent
consideration arrangement, measured at its acquisition date fair value, if it is probable and the measurement is reliable. If
the initial accounting for a business combination is incomplete by the end of the period in which the combination occurs
because either the fair values to be assigned to the acquiree's identifiable assets, liabilities or contingent liabilities or thecost of the combination are provisional, the Group accounts for the combination using those provisional values. The
provisional amounts are adjusted within 12 months after the acquisition date.

16

Goodwill arising from a business combination is recognised as an asset and initially measured at cost, being the excess ofthe cost of the business combination over the Company's interest in the net fair value of the identifiable assets, liabilities
and contingent liabilities recognised. If, after reassessment, the Company's interest in the net fair value of the acquiree's
identifiable assets, liabilities and contingent liabilities exceeds the cost of the business combination, the excess isrecognised immediately in profit or loss.
Minority interests in subsidiaries are identified separately from the Group’s equity therein, based on the proportion ofminority interest toward identifiable net assets of the subsidiary. Past goodwill arising from business combinations before
the IFRSs transition date is measured at their carrying amount after performing an impairment test in accordance with theprevious generally accepted accounting principles (Japanese GAAP).
(4) Foreign currencies① Foreign currency transactions
The individual financial statements of each group entity are presented in the currency of the primary economic
environment in which the entity operates (its functional currency). For the purpose of the consolidated financial
statements, the financial 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 retranslated at the rates
prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated
at the rates prevailing at the date when the fair value was determined. Exchange differences are recognised in profit or loss
in the period. The exchange gain or loss is included in “other expenses” in the consolidated statement of comprehensive
income.
② Financial statements of foreign operations
The assets and liabilities of foreign operations are translated into Japanese Yen at the foreign exchange rates prevailing at
the end of reporting period. The revenues and expenses of foreign operations are translated into Japanese Yen at the
average rates of exchange for the year. Where there are material fluctuations in exchange rates, the exchange rate at thetransaction date is used. Foreign exchange differences arising from translation are initially recognised as exchange
differences on translation of foreign operation in other comprehensive income and accumulated in equity, which arereclassified from equity to profit or loss on disposal of the net investment and included in “other expenses” in the
consolidated statement of comprehensive income.
(5) Property, plant and equipment
The Group applies the cost model for measuring property, plant and equipment.
Property, plant and equipment are stated at cost, net of accumulated depreciation and accumulated 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 tothe 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 such parts as individual assets to be depreciated with specific useful lives. All other repair and maintenancecosts are recognised as incurred.
Property, plant and equipment other than land and construction in progress are depreciated mainly on a straight-line basis
over the following estimated useful lives. The estimated useful lives, residual values and depreciation method arereviewed at each year end, with the effect of any changes in estimate being accounted for on a prospective basis.
Building and structures
Machinery and carriers
Tools, equipment and fixtures

10-50 years
3-12 years
3-15 years

Leased assets are depreciated over their estimated useful lives where the transfer of the title of the assets by the end of thelease term is certain. Leased assets where the transfer of the title of the assets by the end of the lease term is not certain are
depreciated over their estimated useful lives or lease terms whichever is shorter.

17

(6) Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards ofownership to the lessee. All other leases are classified as operating leases.
Assets held by the Group under finance leases such as machinery and carriers, furniture and fixtures, tools, equipment andfixtures, are initially recognised as assets of the Group at their fair value at the inception of the lease or the present valueof the minimum lease payments, whichever is lower. The corresponding liability to the lessor is included in the
consolidated statement of financial position as a short-term or long-term finance lease obligation. Lease payments areapportioned 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.
(7) Intangible assets excluding goodwill
The Group uses the cost model for measuring intangible assets. Intangible assets are carried at cost less accumulated
amortisation and accumulated impairment losses.
① Intangible assets acquired separately and intangible assets acquired in a business combination
Intangible assets acquired separately are carried at cost at the time of initial recognition. Intangible assets acquired in abusiness combination and recognised separately from goodwill are initially recognised at their fair value at the acquisition
date (which is regarded as their cost), when their fair value is reasonably measured.
② Internally-generated intangible assets - research and development expenses
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
An internally-generated intangible asset arising from development (or from the development phase of an internal project)
is recognised if, and only if, all of the following have been demonstrated;(a) the technical feasibility of completing the intangible asset so that it will be available for use or sale;(b) the intention to complete the intangible asset and use or sell it;(c) the ability to use or sell the intangible asset;(d) how the intangible asset will generate probable future economic benefits;(e) the availability of adequate technical, financial and other resources to complete the development and to use or sell theintangible 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 datewhen the intangible assets first meet the recognition criteria listed above. The assets are amortised over the estimatedperiod in which the development costs are expected to be recovered. If no future economic benefit is expected before theend of the life of assets, the residual book value is expensed.
Subsequent to initial recognition, internally-generated intangible assets are reported at cost less accumulated amortisation
and accumulated impairment losses. Where no internally-generated intangible asset can be recognised, development costs
are recognised as an expense in the period in which it is incurred.
③ Amortisation of intangible assets
Amortisation is recognised on a straight-line basis over their estimated useful lives as follows. The Group does not have
any intangible assets with indefinite useful lives.
Patents
Technology
Brand Names
Customer List
Software8 years
10 years
3-10 years
5 years
5 years(8) Goodwill
Goodwill arising in a business combination is recognised as an asset at the date that control is acquired (the acquisitiondate). Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any minority interestsin the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the net ofthe acquisition-date amounts of the net fair value of the identifiable assets, liabilities and contingent liabilities.
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.
18

For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units identified basedon the operating country and segment. 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 the recoverable
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 thecarrying amount of each asset in the unit. Impairment losses recognised for goodwill is not reversed in a subsequent period.
On disposal of a subsidiary, the attributable amount of goodwill 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 excluding goodwill
At the end of each reporting period, the Group reviews the carrying amounts of its property, plant and equipment andintangible assets to determine whether there is any indication that those assets have suffered impairment losses. If any
such indication exists, the recoverable amount of the cash-generating unit to which the asset belongs is estimated in orderto determine the extent of the impairment losses (if any).
Where a reasonable and consistent basis of allocation can be identified, corporate assets (assets other than goodwill that
contribute to the future cash flows of both the cash-generating unit under review and other cash-generating units) are also
allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units
for which a reasonable and consistent 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 estimatedfuture cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows havenot 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.
(10) Derivative financial instruments
Derivatives are initially recognised at fair value at the date the derivative contract is entered into and are subsequently
remeasured to their 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 firm future transactions. The Group also uses interest rate swaps to manage the exposure to interest rate risk
arising from variable rate of interest-bearing debt. Hedge accounting does not apply to these derivative transactions.
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 financial assets are recognised and derecognised on trade date where the purchase or sale of a financial asset is under acontract whose terms require delivery of the financial asset within the timeframe established by the market concerned, andare initially measured at fair value, plus transaction costs except for those financial assets classified at fair value throughprofit or loss, which are initially measured at fair value.
Financial assets are classified into the following specified categories;• financial assets at fair value through profit or loss (FVTPL),• held-to-maturity investments,• loans and receivables and• available-for-sale financial assets
The classification depends on the nature and purpose of the financial assets and is determined at the time of initialrecognition.

19

② Financial assets as FVTPL
Financial assets are classified as FVTPL when the financial assets are either held for trading or are designated as an
FVTPL.
A financial asset other than a financial asset held for trading may be designated as an FVTPL upon initial recognition if:(a) such designation eliminates or significantly reduces a measurement or recognition inconsistency (accounting
mismatch) that would otherwise arise; or(b) the financial asset forms part of a group of financial assets or financial liabilities or both, which is managed and its
performance is evaluated on a fair value basis, in accordance with the Group's documented risk management orinvestment strategy, and information 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 and Measurement” permits the entire combined contract (asset or liability) to be designated as an
FVTPL.
Financial assets as FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit
or loss. The net gain or loss recognised in profit or loss incorporates any dividend, interest or fair value gain or loss from
evaluation on the financial assets and is included in the consolidated statement of comprehensive income. Fair value isdetermined in the manner described in Note 23. “Financial instruments”.
As at 1 April 2008, 31 March 2009 and 31 March 2010, the Group did not have financial assets designated as FVTPL
except for derivative financial assets.
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-to-maturity investments. Held-to-maturity investments are measured at amortised cost using the effective interest
method less any impairment, with revenue recognised on an effective yield basis. As at 1 April 2008, 31 March 2009 and
31 March 2010, the Group did not have held-to-maturity investments.
The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest
income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts(the calculation reflects effective interest method includes premium or discount between the counterparty) through the
expected life of the financial assets, or (where appropriate) a shorter period, to the net carrying amount on initialrecognition.
④ Loans and receivables
Trade receivables, loans, and other receivables that are not quoted in an active market are classified as loans andreceivables. Loans and receivables are measured at amortised cost using the effective interest method, less any
impairment. Principally interest income is recognised by applying the effective interest rate.
⑤ Available-for-sale financial assets
Financial assets except derivatives, either designated as available-for-sale financial assets or not classified as FVTPL,
held-to-maturity investments or loans and receivables, are classified as available-for-sale financial assets.
Listed shares and listed redeemable notes held by the Group that are traded in an active market are classified asavailable-for-sale financial assets and are stated at fair value. The Group also has investments in unlisted shares that are
not traded in an active market but that are also classified as available-for-sale financial assets and stated at fair value. Fairvalue is determined in the manner described in Note 23. “Financial instruments”. Gains and losses arising from changes infair value are recognised in other comprehensive income and accumulated in accumulated other comprehensive income(net gain or (loss) on revaluation of available-for-sale financial assets), with the exception of impairment losses andforeign exchange gains and losses on monetary assets, which are recognised in profit or loss.
Where the investment is disposed of or is determined to be impaired, the cumulative gain or loss, that were previously
accumulated in accumulated other comprehensive income (net gain on revaluation of available-for-sale financial assets), 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 is determined in that foreign currency and translated at the spot rate at the end of thereporting period. The foreign exchange gains and losses that were recognised in profit or loss are determined based on theamortised cost of the monetary asset. Other foreign exchange gains and losses are recognised in other comprehensive
income.
20

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 initial recognition 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 fair value of the security below its cost is considered to be objective evidence of impairment.
For all other financial assets, including redeemable notes classified as available-for-sale financial assets and finance leasereceivables, objective evidence of impairment could include:(a) significant financial difficulties of the debtor; or(b) default or delinquency in interest or principal payments; or(c) a probability that the borrower will enter bankruptcy or financial re-organisation.
For certain categories of financial assets, such as trade receivables, assets that are assessed not to be impaired individuallyare, in addition, assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio ofreceivables 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 nationalor 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 theasset’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 trade receivables, where the carrying amount is reduced through the use of an allowance account. When atrade receivable, including past-due 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 are recognised in profit or loss.
With the exception of available-for-sale financial assets (equity instruments), if, in a subsequent period, the amount of theimpairment loss decreases and the decrease can be related objectively to an event occurring after the impairment wasrecognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying
amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been
had the impairment not been recognised.
In respect of available-for-sale financial assets (equity instruments), impairment losses previously recognised in profit orloss are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss is recognised inother comprehensive income.
⑦ Derecognition of financial assets
The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or whenit transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If theGroup retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues torecognise the financial asset and also recognises a collateralised borrowing for the proceeds received.
(12) Inventories
Inventories are valued at the lower of cost and net realisable value. Net realisable value represents the estimated selling
price for the inventories 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 theinventories to present location and condition, are assigned to inventories by mainly the weighted-average method. The
production costs include an appropriate portion of fixed and variable overhead expenses.
(13) Cash and cash equivalents
Cash and cash equivalents comprise of cash on hand and bank deposits including term deposits. The term deposits withoriginal maturities of three months or less are deemed as cash equivalents since they are readily convertible to cashwithout restriction.

21

(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 a sale transaction rather than through continued use. This condition is regarded as met only when the sale is highly
probable and the non-current asset (or disposal group) is available for immediate sale in its present condition. Management
must be committed to the sale, 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 thatsubsidiary are classified as held for sale when the criteria described above are met, regardless of whether the Group willretain a minority interest 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 tosell. Property, plant and equipment and intangible assets classified as held for sale are not depreciated or amortised after
their classification.
(15) Treasury shares
The Group’s own equity instruments which are reacquired (treasury shares) are recognised at cost and deducted fromequity. 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 (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 determinationof the fair value of equity-settled share-based transactions are set out in Note 25 “Share-based payments”.
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis
over the vesting period and other capital reserve is recognised, based on the Group’s estimate of equity instruments thatwill eventually vest. At the end of each reporting period, the Group revises its estimate of the number of equity
instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in profit or loss
such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to other capital reserve.
Accounting policies described above are applied to share-based payments which were granted after 7 November 2002 andvested on or after 1 April 2008.
(17) Dividend Distribution
Dividend distribution to the Company's shareholders is recognised as a liability in the consolidated financial statements inthe period in which the dividends are approved by the Company's Board of Directors.
(18) Equity instruments and financial liabilities issued by the Group excluding derivative instruments① Equity instruments (shares)
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its
liabilities.
② Financial liabilities
Financial liabilities are classified as either financial liabilities as FVTPL or other financial liabilities.
③ Financial liabilities as FVTPL
Financial liabilities classified as FVTPL are either held for trading or designated as an FVTPL.
A financial liability is classified as held for trading if:(a) it has been acquired principally for the purpose of selling or redeeming it in the near term; or(b) on initial recognition it is part of a portfolio of identified financial instruments that the Group manages together andhas 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.

22

A financial liability other than a financial liability held for trading may be designated as an FVTPL upon initialrecognition 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
performance is evaluated on a fair value basis, in accordance with the Group's documented risk management orinvestment strategy, and information 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 and Measurement” permits the entire combined contract (asset or liability) to be designated as FVTPL.
Financial liabilities as FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in
profit or loss. The net gain or loss recognised in profit or loss is included in finance costs in the consolidated statement ofcomprehensive income. Fair value is determined in the manner described in Note 23 “Financial instruments”.
As at 1 April 2008, 31 March 2009 and 31 March 2010, the Group did not have financial liabilities measured as FVTPL
except for derivative transactions.
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 yield basis.
⑤ Derecognition of financial liabilities
The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled orthey expire.
⑥ Financial guarantee contract liabilities
Financial guarantee contract liabilities are initially measured at their fair values and subsequently measured at the higherof:• the amount of the obligation under the contract, as determined in accordance with IAS 37 “Provisions, Contingent
Liabilities and Contingent Assets”; and•the amount initially recognised less cumulative amortisation recognised in accordance with IAS 18 “Revenue”.
(19) Retirement benefit costs
For defined benefit plans, the cost of providing retirement benefits is determined using the projected unit credit method,with actuarial valuations being carried out at the end of each reporting period.
Actuarial gains and losses as at the end of the prior year are amortised over the expected average remaining working lives(mainly 10 years) of the participating employees.
Past service cost is recognised immediately to the extent that the benefits are already vested. The Group’s defined benefit
plans are mostly closed pension funds and benefits are already vested. Accordingly past service costs for those funds are
immediately recognised in profit or loss.
The retirement benefit obligation recognised in the consolidated statement of financial position represents the present
value of the defined benefit obligations as adjusted for unrecognised actuarial gains and losses, and as reduced by the fairvalue of plan assets.
Contributions to defined contribution plans are recognised as an expense when these are paid.
(20) Provisions, and contingent liabilities assumed in a business combination
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it isprobable that the Group will be required to settle the obligation by outflow of resources embodying economic benefits,
and a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best
estimate of the consideration required to settle the present obligation at the end of the reporting period (future cash
outflow), taking into account the risks and uncertainties surrounding the obligation.
Where time value of money is important, a provision is measured by its present value to which estimated future cash flows
are discounted using a pre-tax discount rate that reflects the risks specific to the provision. Interest cost associated with thepassage of time is recognised as finance cost.
The types of provisions are as follows;23

① Asset retirement obligation reserve
The Group recognises provisions for an asset retirement obligation reserve for estimated costs arising from a contractual
obligation to a landlord to dismantle and remove leasehold improvements from a leased office at the end of the lease
contract, and estimated costs to decontaminate certain fixed assets. Provision is provided based on past experience ofactual cost and considers each property individually. The discount rate is mainly 2.25% and depends on the useful life andthe country. Future expected timing of outflow of economic benefits is mainly more than one year from each reporting
period.
② Warranties provision
The provision is estimated and recognised based on past experience of the occurrence of defective goods such as camera
and glasses 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 if
the fair value is reliably measureable. Subsequent to initial recognition, such contingent liabilities are remeasured
considering expected future payments, possible occurrence and timing of payments at each reporting period.
(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, fair value of the points earned
is estimated and accounted for as a reduction in revenue.
① Sale of goods
Revenue from the sale of goods is recognised when all of the following conditions are satisfied;(a) the Group has transferred to the buyer the significant risks and rewards of ownership of the goods;(b) the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor
effective control over the goods sold;(c) the amount of revenue can be measured reliably;(d) it is probable that the economic benefits associated with the transaction will flow to the Group; and(e) the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Specifically, revenue is recognised when the risks and rewards of ownership of the goods transfers from the Group to thecustomer 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 thecustomer.
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 willcomply with the conditions attaching 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
incurred. Government grants for purchase of assets are recognised as deferred revenue in the consolidated statement offinancial position and transferred to profit or loss on a systematic basis over the useful lives of the related assets.

24

(23) Taxation
Income tax expense represents the sum of the current tax and deferred tax. Current and deferred taxes are recognised in
profit or loss, except when they relate to items that are recognised directly in other comprehensive income or equity, or
where they arise from the initial 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 thereporting date.
Deferred tax assets or liabilities are not recognised for the following temporary differences;• Temporary differences of goodwill• Temporary differences resulted from initial recognition of transactions that do not affect accounting income andtaxable income (exclude business combination) of assets/liabilities• Taxable temporary differences associated with investments in subsidiaries and associates where the timing of thereversal of the temporary differences can be controlled and it is probable that the temporary differences will notreverse in the foreseeable future.
Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets arising fromdeductible temporary differences are only recognised to the extent that it is probable that there will be sufficient taxable
profits against which to utilise 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 will allow 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 theliability 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, whenmeasuring the amount 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 by adjusting 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

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 todetermine the reported amounts of certain assets, liabilities, income and expense items, as well as certain amounts
disclosed in the notes to the consolidated financial statements relating to contingent liabilities.
The following are items that require estimates and assumptions and are considered significance;• 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 (6). “Leases”)• Assumptions used to estimate future cash flows of cash-generating units to assess the recoverability of property, plantand equipment and intangible assets, including goodwill (Note 8. “Impairment losses”)• Valuation techniques used to value available-for-sale financial assets without an active market (Note 23. “Financial
instruments”)• Recoverability of deferred tax assets (Note 10. “Income taxes”)• Assumptions used for treatment of retained earnings of overseas subsidiaries and associates for tax purposes (Note 10.
“Income taxes”)• Discrepancy in opinion with a tax authority relating to tax calculations• Assumptions used to calculate retirement benefits obligation (Note 19. “Retirement benefit plans”)• Asset retirement obligations arising from legal obligations and constructive obligations (Note 20. “Other provisions”)• Fair value of stock options (Note 25. “Share-based payments”)• Possibility of outflow of resources embodying economic benefits on contingent liabilities (Note 36. “Contingent
liabilities”)
The estimates and underlying assumptions are based on historical experience and other factors that are considered to be
relevant. Actual results may differ from those estimates. The estimates and underlying assumptions are reviewed on an
ongoing basis.
Revisions of the accounting estimates will impact current and/or future periods.
(2) Key sources of risk and estimation uncertainty
The Group’s financial position, financial performance and cash flows are exposed to the following risks and uncertainties.
Especially, the global economic recession has a significant influence on the Group’s future profitability.
• Tough competition and excess-supply of inventory in the markets the Group belongs to• Development of new products and timing of development• Changes in the political, economic and regulatory environment, shortage of labour, labour strike, natural disasters,
and impact of unexpected international affair in the countries Group belongs to and operates in• Fluctuation of currency exchange rates• The trend of environmental and governmental regulation
Future profitability of the Group will have an effect on the estimates for the following;• Impairment of property, plant and equipment and intangible assets including goodwill (Note 8. “Impairment losses”)• Recoverability of deferred tax assets (Note 10. “Income taxes”)

26

5.

Operating segment information(1) Adoption of Standard and amendments to IFRS 8 “Operating Segments”
The Group has early adopted the 2009 annual improvements to IFRS 8 from 1 April 2008.
(2) Overview of major products and services of reportable segments
The reportable segments are constituent units of the Group for which separate financial information is obtained andexamined on a regular basis by the Board of Directors, the chief operating decision maker, to determine the allocation ofmanagement 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 Carebusiness and the 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 thedigitalisation 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 as digital information based on optical technologies.
In the Life Care business, the Group produces and sells health care related products that are used in the healthcare andmedical sectors and medical related products, including medical equipment and medical materials that are used in medical
treatments. In operating this business, it is typically required to obtain approvals and permissions in accordance with thePharmaceutical Affairs Act in Japan and other regulations, and sophisticated technologies and highly reliable quality
control systems represent the critical elements for operating this business.
The 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
Electronics
Technology
related products
Imaging related
products
Life Care

Other

Health Carerelated products
Medical 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)/Glass media, etc.
Optical lenses, Optical glasses,
Digital cameras, Interchangeable lenses,
Digital camera modules, Optical devices, Laser equipments, etc.
Eyeglass lenses, Contact lenses, etc.
Endoscopes, Intraocular lenses, Artificial bone, Medical accessories,etc.
Design of information systems, other services.

27

(3) 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”.
For the year ended
March 2009
Revenue from externalcustomers

Information
Technology

Life Care

Other

Total

Adjustments(Millions of Yen)
Consolidated

242,340

207,407

3,853

453,600

195

453,795

Inter-segment

206

60

4,067

4,333

(4,333)－

Total

242,546

207,467

7,920

457,933(4,138)453,795

Interest income
Interest expense
Depreciation andamortisation
Share of profit (loss) of
associates
Impairment losses
Others914(586)(33,363)

1,015
(667)
(12,365)

27
(15)
(258)

1,956
(1,268)(45,986)

2,062(1,209)
(810)

4,018
(2,477)(46,796)

－

(235)

(63)

(298)

1,297

999

(16,531)(187,772)(13,843)(156,447)－(6,287)(30,374)(350,506)(393)
21,623(30,767)(328,883)

5,208

24,925

1,324

31,457

18,432

49,88923,463

10,270219

33,952887

34,839Segment profit before
tax
Other disclosure
Capital expenditure

Note:(i) Adjustments to revenue from external customers of 195 million yen represent revenue by R&D department which is
not included in any reportable segment.
(ii) Adjustments to segment profit before tax of 18,432 million yen consist of elimination of inter-segment transactionof (39,874) million yen, and profit or loss in the Company’s headquarters, R&D department and overseas holding
companies of 58,306 million yen.
(iii) Transfer prices between operating segments are on an arm’s length basis.
Adjustments(Millions of Yen)
Consolidated

413,7242

413,726

3,879

4,024

(4,024)－

199,198

6,169

417,748(4,022)413,726

223

9

575

257

832

(524)
(22,192)(448)(10,765)

(48)
(101)

(1,020)(33,058)(1,312)(896)(2,332)(33,954)

－

98

(7)

91

375

466

(133)
(156,325)(127)(155,481)－(5,986)(260)(317,792)(574)(8,555)(834)(326,347)

33,55032,69836

66,284(14,727)

51,557

17,8159,367

110

27,292

1,728

29,020For the year ended
March 2010

Information
Technology

Revenue from externalcustomers
Inter-segment

212,259

199,175

2,290

122

23

Total

212,381Interest income

343

Interest expense
Depreciation andamortisation
Share of profit(loss) of
associates
Impairment losses
OthersSegment profit before
taxLife Care

Other

Total

Other disclosure
Capital expenditure

Note:(i) Adjustments to revenue from external customers of 2 million yen represent revenue by R&D department which is notincluded in any reportable segment.
(ii) Adjustments to segment profit before tax of (14,727) million yen consist of elimination of inter-segment transactionof (21,123) million yen, and profit or loss of the Company’s headquarters, R&D department and overseas holding
companies of 6,396 million yen.
(iii) Transfer prices between operating segments are on an arm’s length basis.
28

(4) 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 forthe years ended 31 March 2009 and 2010;(Millions of Yen)
For the year ended 31 March 2009

Information Technology
Electronics related products
Imaging related products
Information Technology Total
Life Care
Health Care related products
Medical related productsLife Care Total
Other
Corporate (R&D)
Total revenue from external customers

For the year ended 31 March 2010

127,371
114,969
242,340

110,407
101,852
212,259

150,91956,488207,4073,853
195453,795

147,581
51,594
199,1752,290
2413,726(5) Information about geographical areas
Revenue from external customers(Millions of Yen)
For the year ended 31 March 2009

Japan
U.S.A.
OthersFor the year ended 31 March 2010

170,027
49,383
234,385453,795

Total

152,492
43,927217,307413,726

Note:
Geographical areas are based on the location of the customers.
Non-current assets

Japan
Thailand
Others

As at 1 April 2008
107,564
24,53078,710210,804

As at 31 March 2009
70,31720,80564,355
155,477

Total
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.

(Millions of Yen)
As at 31 March 2010
65,07019,68462,427
147,181

Revenue from external customers in Thailand is insignificant; therefore the amount is included in Others.
Non-current assets in U.S.A. are insignificant; therefore the balance is included in Others.
(6) Information about major customers
The Group has no revenue from transactions with a single external customer that amounts to 10 percent or more ofrevenue of the Group.

29

6.

Property, plant and equipment

The following are the cost, accumulated depreciation and impairment losses of property, plant and equipment;
Cost

Balance at 1 April 2008
Additions
Acquisitions throughbusiness combinations
Disposals
Transfer fromconstruction in progressTransfer to assets held forsale
Effect of foreign
currency exchange
differences
OthersBalance at 31 March
2009
Additions
Acquisitions throughbusiness combinations
Disposals
Transfer fromconstruction in progressTransfer to assets held forsale
Effect of foreign
currency exchange
differences
OthersBalance at 31 March2010
Accumulated
depreciation andimpairment losses
Balance at 1 April 2008
Depreciation expense
Impairment losses
Disposals
Transfer to assets held forsales
Effect of foreign currency
exchange differences
OthersBalance at 31 March2009
Depreciation expense
Impairment losses
Disposals
Transfer to assets held forsales
Effect of foreign currency
exchange differences
OthersBalance at 31 March
2010

Building andstructures

Machinery andcarriers

79,4281,545
1,062

259,680
6,844
1,231

Tools,
equipment andfixtures43,939
4,210
10

(743)
3,663

(11,947)
10,631

(960)

Land

Constructionin progress(Millions of Yen)
Total

16,82832－

10,257
20,619－410,132
33,2502,303(4,185)
1,214

(80)
－

(139)
(15,508)(17,094)－－－(1,158)－(2,118)(4,947)(16,079)(2,645)

(475)

(532)

(24,678)

1,693
80,741(3,336)
247,024

2,082
44,625－
15,147(1,334)
13,363(895)
400,900

2,645
－

4,994
6

2,779
15

1,547
－

13,675－25,64021(1,923)
1,001(9,536)
11,514(2,916)
967

(519)
－

(385)
(13,482)(15,279)－(1,416)

－

－

－

－

(1,416)

(7)

(131)

(23)

80

(239)

(320)

836
81,877(3,117)250,754(190)
45,257－
16,255(612)
12,320(3,083)
406,463

Building andstructures

Machinery andcarriers(37,316)(4,462)(2,250)543
416(192,912)(30,462)(802)
10,373－Tools,
equipment andfixtures(25,632)(5,806)
(618)
2,987
－

2,150

11,055(871)(41,790)Land

Constructionin progress

Total

－
－
(304)
－
－

－
－
(283)
－
－

(255,860)(40,730)(4,257)
13,903
416

2,022

－

－

15,227

2,768(199,980)(998)(28,045)

－
(304)

－
(283)

899
(270,402)(3,911)
－
1,196
1,034

(22,283)
(194)
9,186
－

(4,256)
(9)
2,617
－

－
－
－
－

－
－
283
－

(30,450)(203)
13,282
1,034

(34)

206

(15)

－

－

157

72
(43,433)

1,728(211,337)

522(29,186)

－
(304)

－
－

2,322
(284,260)30

Carrying amount

Balance at 1 April 2008
Balance at 31 March 2009
Balance at 31 March 2010

Building andstructures

Machineryand carriers

42,112
38,951
38,444

66,76847,044
39,417

Tools,
equipment
and fixtures
18,307
16,58016,071Land

Construction inprogress

16,828
14,843
15,951

Total

10,257
13,08012,320154,272
130,498
122,203

Gain on sales of property, plant and equipment for the years ended 31 March 2009 and 2010 were 460 million yen and 415
million yen, respectively. Loss on sales of property, plant and equipment for the years ended 31 March 2009 and 2010
were 486 million yen and 722 million yen, respectively. Loss on disposal of property, plant and equipment for the years
ended 31 March 2009 and 2010 were 478 million yen and 1,057 million yen, respectively.
Refer to Note 26. “Revenue and expenses (excluding finance income and costs)” for further details. Gain and loss on salesof assets held for sale were included in the above ‘gain on sales of property, plant and equipment’ and ‘loss on sales ofproperty, plant and equipment’.
Details of impairment losses are set out in Note 8 “Impairment losses”. Property, plant and equipment under construction
are included in construction in progress in the table above. No property, plant and equipment has been pledged ascollateral to secure debt. There is no restriction on legal title of these assets.
Refer to Note 37. “Commitments for expenditure” for further details.
There are no borrowing costs capitalised and included in the cost of acquisition of property, plant and equipment.
The following are the carrying amounts of property, plant and equipment under finance leases as at 1 April 2008, and 31
March 2009 and 2010, which are included in each corresponding amount in the table above. Impairment losses arerecognised on a part of leased assets;(Millions of Yen)

Balance at 1 April 2008
Balance at 31 March 2009
Balance at 31 March 2010

Building andstructures
332
526
304

Machinery and carriers
1,198
475
269

Tools, equipment andfixtures
713
615
372

Total
2,243
1,616
945

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

31

7.

Intangible assets

The following are the cost, accumulated amortisation and impairment losses of intangible assets;
Cost
Balance at 1 April 2008
Additions
Acquisitions throughbusiness combinations
Disposals
Effect of foreign currency
exchange differences
Other adjustments (ii)
Balance at 31 March 2009
Additions
Acquisitions throughbusiness combinations
Disposals
Effect of foreign currency
exchange differences
Balance at 31 March 2010

Goodwill
17,175－717

Software
11,367
2,062－

Technology
16,767－－

Patents
11,983－－

Others (iii)
5,359
163
－

(Millions of Yen)
Total
62,651
2,225
717

－
(352)

(530)
(972)

－
－

－
－

(18)
(233)

(548)
(1,557)(2,181)
15,359－3,011－
11,927
1,579－－
16,767－－－
11,983
－
168

－
5,271
2,053
645

(2,181)
61,307
3,632
3,824

－
(220)

(164)
(625)

－
－

－
(205)

(2,085)(461)(2,249)(1,511)

18,15012,717

16,767

11,946

5,423

65,003

Accumulated amortisationand impairment losses
Balance at 1 April 2008
Amortisation expense
Impairment losses (iv)
Disposals
Effect of foreign currency
exchange differences
Balance at 31 March 2009
Amortisation expense
Disposals
Effect of foreign currency
exchange differences
Balance at 31 March 2010

Goodwill

Carrying amount
Balance at 1 April 2008
Balance at 31 March 2009
Balance at 31 March 2010

SoftwareTechnology

Patents

OthersTotal－－(12,666)－－(6,373)(1,393)(1,247)267
365(1,243)(2,488)(8,878)－－－(1,599)(2,225)－－(1,234)
(586)
(229)
－
143

(8,850)(6,066)(25,245)267
508(12,666)－－－(8,381)(1,241)
152
592(12,609)(489)－－(3,824)(1,349)－115(1,906)
(425)
46
248

(39,386)(3,504)
198
955(12,666)(8,878)(13,098)(5,058)(2,037)(41,737)

Goodwill
17,1752,693
5,484

Software
4,994
3,546
3,839

Technology
15,524
4,158
3,669

Patents
11,983
8,159
6,888

Others
4,125
3,365
3,386

Total
53,801
21,921
23,266Note:(i) ‘Software’, ‘Technology’, ‘Patents’ and ‘Others’ are summarised as ‘Other intangible assets’ in the consolidated
statement of financial position.
(ii) ‘Other adjustments’ are subsequent adjustments to the fair value from the acquisition date.
(iii) ‘Others’ includes capitalised development costs in the amount of 69 million yen and 35 million yen as at 1 April 2008
and 31 March 2009, respectively.
(iv) Refer to Note 8 “Impairment losses” for details of Impairment losses.
Loss on disposal of intangible assets was 1,874 million yen for the year ended 31 March 2010. No loss on disposal ofintangible assets was recognised for the year ended 31 March 2009.
Amortisation expense has been included in the line item ‘depreciation and amortisation’ in the consolidated statement ofcomprehensive income in the amount of 6,066 million yen and 3,504 million yen for the years ended 31 March 2009 and2010, respectively.
No intangible assets have been pledged as collateral to secure the debt. There is no restriction on legal title of these assets.
The Company owns Technology and Patents in order to produce medical related products. The carrying amount ofTechnology is 3,669 million yen as at 31 March 2010 (as at 31 March 2009: 4,158 million yen, as at 1 April 2008: 8,235
million yen). The carrying amount of Patents is 5,968 million yen as at 31 March 2010 (as at 31 March 2009: 7,053
million yen, as at 1 April 2008: 8,128 million yen). The remaining useful lives of Technology are 7 years as at 31 March2010 (as at 31 March 2009: 8 years, as at 1 April 2008: 9 years). The remaining useful lives of Patents are 5 years as at 31
March 2010 (as at 31 March 2009: 6 years, as at 1 April 2008: 7 years)
32

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.
For the year ended
31 March 2009
2,737
802
618
393
283
4,833
12,666
1,247
8,878
2,225
229
25,245756
30,83430,767
67

Building and structures (i)Machinery and carriers
Tools, equipment and fixtures
Land (i)Construction in progress
Subtotal losses on property, plant and equipment
Goodwill
SoftwareTechnology
Patents
OthersSubtotal losses on intangible assets
Other non-current assets(Long-term prepaid expenses)
Total impairment losses
Continuing operations
Discontinued operations(Millions of Yen)
For the year ended
31 March 2010
57
194
9
－
－
260
－
－
－
－
－
－
574
834
834
－

Note:
(i) Refer to Note 24 “Assets held for sale”. Impairment losses of assets held for sale are included in building andstructures, and land in the table above.
(1) Cash-generating units
The Group identifies each business unit as cash-generating unit for impairment testing purposes. Each business unit has
been set based on the production and sale of product lines. For any asset expected to be sold or disposed, or any idle asset,
an individual asset is tested for the necessity of impairment.
(2) Impairment losses on assets in business units
For the year ended 31 March 2009, because of the rapid economic deterioration owing to the economic crisis started in the
U.S.A. and appreciation of the Japanese Yen, the Group identified indications of decline in profitability on its Imaging
related products (Digital cameras, Digital camera modules, Optical devices) and Medical related products (Endoscopes,
Intraocular lenses, Artificial bone). In consideration of future profitability, the Group recognised impairment losses asfollows.
Recoverable amount was measured at the value in use and determined using cash flow projections based on the financial
budgets for the following five fiscal years which had been approved by the Group’s management, and a discount rate of
10% per annum which is the Group’s pre-tax weighted average capital cost (WACC).

33

(Millions of Yen)
Impairment losses
Information Technology
Imaging related products (Digital cameras, Digital Camera modules,
and Optical devices)
Building and structures
Machinery and carriers
Tools, equipment and fixtures
Construction in progress
Goodwill
SoftwareTechnology
Patents
Other intangible assets
Other non-current assets
Information Technology Total
Life Care
Medical related products (Endoscopes, Intraocular lenses, Artificial
bone)
Goodwill
Technology
Other intangible assets
Life Care Total

1,014
242
582
283
2,332
1,247
5,669
2,225
16
736
14,346

10,3343,209
213
13,756

The assets impaired for the year ended 31 March 2010 were not included in any cash-generating units.
(3) Impairment losses on assets to be sold or disposed, and idle assets
The carrying amount of assets to be sold or disposed of, and idle assets resulting from business restructuring, which were
not expected to be used in the future, was written down to the estimated recoverable amount which was measured at fairvalue less related selling costs, and the corresponding impairment loss was recognised. The fair value was based on
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 2009;(Millions of Yen)
Impairment losses
Information Technology
Building and structures (i）Machinery and carriers
Tools, equipment and fixtures
Information Technology Total
Life Care
Building and structures (i)Machinery and carriers
Tools, equipment and fixtures
Life Care Total
Adjustments (Headquarters)
Land (i)Adjustments (Headquarters) Total
Total

1,660
493
32
2,185
62
22
3
87
393
393
2,665

Note:
(i) Refer to Note 24 “Assets held for sale”. Impairment losses of assets held for sale are included in building andstructures, and land in the table above.

34

The following are impairment losses recognised for the year ended 31 March 2010;(Millions of Yen)
Impairment losses
Information Technology
Machinery and carriers
Tools, equipment and fixtures
Information Technology Total
Life Care
Building and structures （ii）
Machinery and carriers
Tools, equipment and fixtures
Life Care Total
Adjustments (Headquarters)
Other non-current assets
Adjustments (Headquarters) Total
Total

124
9
133
57
70
－
127
574
574
834

Note:
(ii) Refer to Note 24 “Assets held for sale”. Impairment losses of assets held for sales are included in Building andstructures in the table above.
(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 of such goodwill, an impairment loss is recognised and the goodwill is written down to the recoverable amount.
Recoverable amount of goodwill allocated to cash generating units was measured at the value in use and it was determinedusing cash flow projections based on the financial budgets for the following five fiscal years which had been approved by
the Group’s management, and a discount rate of 10% per annum which is the Group’s pre-tax weighted average capital
cost (WACC).
Before recognising impairment losses, the carrying amount of goodwill was allocated to the cash generated units asfollows;(Millions of Yen)
Information Technology
Imaging related products

Japan
Americas
EuropeAsia
Total

Digital cameras,
Digital camera modules,
Optical devices,
Laser equipments, etc.
2,733
116
－
－
2,849

As at 1 April 2008
Life Care
Health Care related
Medical related products
products
Eyeglass lenses
Endoscopes,
Artificial bone

－
1,293
370
512
2,175

Adjustments
R&D

Total

－
37
－
－
37

12,114－0－
12,114

14,847
1,446
370
512
17,175(Millions of Yen)

Information Technology
Imaging related products

Japan
Americas
EuropeAsia
Total

Digital cameras,
Digital camera modules,
Optical devices,
Laser equipments, etc.
2,332
114
－
－
2,446

As at 31 March 2009
Life Care
Health Care related
Medical related products
products
Eyeglass lenses
Endoscopes,
Artificial bone

－
1,267
856
419
2,542

10,334－－－
10,334

Adjustments
R&D

Total

－
37
－
－
37

12,666
1,418
856
419
15,359Note:
For the year ended 31 March 2009, the carrying amounts of goodwill of 2,332 million yen on Imaging related products(Digital cameras, Digital camera modules, Optical devices) and of 10,334 million yen on Medical related products(Endoscopes, Artificial bone) were fully written down to zero.
35

(Millions of Yen)
Information Technology
Imaging related products
Japan
Americas
EuropeAsia
Total

Laser equipments, etc.
－
108
－
－
108

As at 31 March 2010
Life Care
Health Care related
Medical related products
products
Eyeglass lenses
Medical accessories
－
－
1,200
2,852
－
824
－
465
2,489
2,852

Adjustments
R&D

Total
－
35
－
－
35

－
4,195
824
465
5,484

(5) Impairment losses in discontinued operations
During the year ended 31 March 2009, the Group’s management decided to withdraw from Crystal Division in ‘Other’segment due to steep decline in the market of personal and business gifts affected by the global economic crisis.
Accordingly, the carrying amount of assets associated with the Crystal Division was measured in terms of its value in use,which is considered to be zero and impairment losses were recognised as follows;(Millions of Yen)
Impairment losses
Building and structures
Machinery and carriers
Tools, equipment and fixtures
Other non-current assets
Other Division Total

1
45
1
20
67

36

9.

Investments in associates

Details of the Group’s main associates are as follows;
Name of associate

AVAN STRATE INC.
（i）

OPTOTAL HOYA S.A
PRIME OPTICS,
CO. ,LTDADVANCEDIMAGINGPROCESSES PTY,
LTD. (ii)
TI PENTAX HOLDING
CO.,LTD (iii)

Principal
activity

Place ofincorporationand operation

Segment

JAPAN

Corporate

50.0

47.2

47.2

BRAZIL

Life care

－

25.0

25.0

Other

JAPAN

Other

50.0

50.0

50.0

Other

AUSTRALIA

Other

50.0

－

－

Other

CHINA

Other

49.0

49.0

－

Production
and sale ofglass substrate
for TFT liquid
crystalProduction
and sale ofeyeglass
lenses

As at 1 April
2008

Ownership interest (%)
As at 31 March
As at 31 March
2009
2010

Note:
(i) During the year ended 31 March 2009, AVAN STRATE INC. changed its corporate name from its former name ‘NH
TECHNOGLASS CORPORATION.’ As at 1 April 2008, the Group had 50% of voting share of NH TECHNOGLASSCORPORATION, however on 6 June 2008, the Company sold a portion of the original share of NH TECHNOGLASSCORPORATION to CH HOLDINGS, LTD., and then on 1 September 2008, NH TECHNOGLASS CORPORATION
merged with CH HOLDINGS, LTD. As a result of these reorganisations, the Group has 47.2% of voting share of themerged entity which was named AVAN STRATE INC.
(ii) The Group sold all of the voting shares of ADVANCED IMAGING PROCESSES PTY, LTD. on 30 October 2008(iii) On 30 November 2009, the Group sold all of the voting shares of TI PENTAX HOLDING CO., LTD.
Summarised financial information in respect of the Group’s associates is set out below.
As at 1 April 2008
Total assets
Total liabilities
Net assets
Group’s share of net assets of associates
Total revenue
Total expense
Total profit/(loss) for the period
Group’s share of profit/(loss) of associates

82,018(44,971)
37,047
17,279－－－－As at / for the year ended
31 March 2009
156,574(119,268)
37,306
9,092
47,70848,320(612)
999(Millions of Yen)
As at / for the year ended
31 March 2010
169,670(131,662)
38,0089,214
49,37948,438
941
466

Note:
There are no quoted stock prices available for associates. For the year ended 31 March 2009, negative goodwill relating toan investment in associate under equity method was recognised as profit.

37

10. Income taxes(1) Deferred taxes
Detail of the deferred tax assets and liabilities are as follows;
As at 1 April
2008

Recognised
in profit orloss

Recognisedin othercomprehensive
incomeAcquisitions ofsubsidiaries(Millions of Yen)
As at 31 March2009

Temporary differences
Enterprise tax payable

1,596(1,312)－－

284

Written down inventories

4,283

623

－

－

4,906

Allowance for doubtful
accounts
Other provision

424

291

－

－

715

629

40

－

－

669

Accrued expenses

5,284(1,877)

－

－

3,407

Unrealised profit oninventories
Depreciation expense

2,851(1,087)

－

－

1,764

2,386

(915)

－

－

1,471

Tax goodwill

20,062(6,351)－－

13,711

Impairment losses

439

3,277

－

3,716

Exchange differences ontranslating foreign
operations
Others

－

－

－
37

－

37

Sub total
Undistributed retained
earnings of subsidiaries
Depreciation expense

2,994

1,925

－

－

4,919

40,948(5,386)37－

35,599(2,600)118－－(2,482)

(319)

97

(222)

203

－

－
(213)

－

Net gain/(loss) onrevaluation ofavailable-for-salefinancial assets
Others－(10)(2,507)

(334)

－

－

(2,841)

Sub total(5,223)

(119)

(213)

－

(5,555)

21,637(4,697)－－

16,940Tax losses carry forward
and tax credits
Tax losses carry forward

151

(3)

－

－

148

Sub total

21,788(4,700)－－17,088

Total

57,513(10,205)(176)－

47,132

Tax credits

Note:
The difference between the amount of “Recognised in profit or loss” and deferred tax expenses recognised in the
consolidated statement of comprehensive income is due to foreign exchange fluctuations.

38

As at 1 April 2009

Recognised
in profit orloss

Recognisedin othercomprehensive
incomeAcquisitions ofsubsidiaries(Millions of Yen)
As at 31 March2010

Temporary differences
Enterprise tax payable
Written down Inventories
Allowance for doubtful
accounts
Other provision
Accrued expenses
Unrealised profit oninventories
Depreciation expense
Tax goodwill
Impairment losses
Exchange differences ontranslating foreign
operations
Others
Sub total
Undistributed retained
earnings of subsidiaries
Depreciation expense
Net gain/(loss) onrevaluation ofavailable-for-salefinancial assets
Others

284
4,906
715

(197)
(2,793)
(392)

－
－
－

－
－
－

87
2,113
323

669
3,407
1,764

(77)
538
119

－
－
－

－
－
－

592
3,945
1,883

1,471
13,711
3,716
37

170
(4,534)(1,857)

－
－
－
(20)

－
－
－
－

1,641
9,177
1,859
17

－

4,919

1,251

6,170

(7,772)－(20)－

35,599－27,807(2,482)

1,952

－

－

(530)

(222)
(10)

(64)

－
(44)

－
－

(286)
(54)

－

(3,024)－(3,894)

777

20,755
6－(2,841)(183)(5,555)

1,705

－
(44)

16,940
148

3,038
(142)

－
－

Sub total

17,088

2,896

－

－
777

20,761

Total

47,132(3,171)(64)

777

44,674

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

Note:
The difference between the amount of “Recognised in profit or loss” and deferred tax expenses recognised in the
consolidated statement of comprehensive income is due to foreign exchange fluctuations.
Tax loss carry forward and deductible temporary differences for which deferred tax assets have not been recognised are as
follows;
Tax losses carry forward
Deductible temporary differences
Total

As at 1 April 2008
5,825
3,643
9,468

39

As at 31 March 2009
11,078
1,253
12,331(Millions of Yen)
As at 31 March 2010
12,241
1,201
13,442

The expiration date and amounts of tax losses carry forwards for which deferred tax assets are not recognised are as
follows;
As at 1 April 2008

－
－
－
－

Year 1
Year 2
Year 3
Year 4
Year 5 or later
Total(Millions of Yen)
As at 31 March 2010
1,663
459
1,497
485
8,137
12,241As at 31 March 2009

－
－
89
1,031
9,958
11,078

5,825
5,825

The aggregate amount of temporary differences associated with undistributed retained earnings of the subsidiaries forwhich deferred tax liabilities have not been recognised at 1 April 2008, 31 March 2009 and 2010 were 287,312 million
yen, 147,012 million yen and 171,302 million yen, respectively. No liability has been recognised in respect of thesedifferences because the Group is in a position to control the timing of the reversal of the temporary differences and it isprobable that such differences will not reverse in the foreseeable future.
For the years ended 31 March 2008 and 2010, the Company incurred tax losses. The Company recognised deferred tax
assets on the tax losses as at 1 April 2008, 31 March 2009 and 31 March 2010 of 21,355million yen, 16,250 million yen
and 18,315 million yen, respectively.
The tax losses incurred for the year ended 31 March 2008 were assumed in a business combination. The tax losses
incurred for the year ended 31 March 2010 were caused by a realisation of a large amount of deductible temporary
differences which resulted from the business combination and others.
Both of these tax losses were incurred from the same business combination which was a temporary factor.
The Company concluded that the entire amount of the deferred tax assets relating to the business combination arerecoverable using the estimated future taxable income based on the financial budgets for the following five fiscal years
which had been approved by the Group’s management.
(2) Income taxes
In Japan, the normal effective statutory tax rate is approximately 40.5% for the years ended 31 March 2009 and 2010.
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;

Current tax expenses

For the year ended 31
March 2009
10,185(Millions of Yen)
For the year ended 31
March 2010
7,380

Deferred tax expenses

9,746

2,660

Income tax expenses

19,931

10,040Adjustments to normal effective statutory tax rate to actual effective tax rate are as follows; The actual tax rate represents
the ratio of profit before tax and income tax expenses, including discontinued operations.

Effective statutory tax rate

For the year ended 31
March 200940.5%

For the year ended 31
March 2010
40.5%

17.2%
4.1%
6.1%
5.2%
1.4%
(29.5%)(1.2%)(3.1%)
40.7%

－
3.7%

Impairment losses on goodwill
Expenses not deductible for tax purposes
Impact of re-evaluated deferred tax assets
Undistributed retained earnings at overseas subsidiaries
Effect of unrecognised deferred tax assets
Impact of different tax rates applied to overseas subsidiaries
Impact of different tax rates for elimination of unrealised profits on inventory
OthersActual tax rate

There was no effect on income tax resulting from dividends paid to shareholders.
40

－
0.1%
0.0%
(23.7%)
0.3%(1.4%)
19.5%

11. Other financial assets and liabilities
Details of other financial assets and liabilities are as follows;
As at 1 April 2008
Other financial assets
FVTPL (Derivatives)
Available-for-sale financial assets
Loans and receivables
Loans and receivables
Allowance for doubtful accounts
Loans and receivables –net
Total
Non-current assets total (long-term financial assets)
Current assets total (Other short-term financial assets)

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

41(Millions of Yen)
As at 31 March
2010

－

938
4,924

76
3,550

3,366

6,089
(325)
5,764
11,626
10,263
1,363

12,936(548)
12,38816,014
9,115
6,899

21,657(628)
21,02924,39518,8095,586

As at 1 April 2008
Other financial liabilities
FVTPL (Derivatives)

As at 31 March2009

As at 31 March
2009(Millions of Yen)
As at 31 March
2010

83
83
73

434
434
284

392
392
7

10

150

385

12. Other assets and liabilities
Details of other assets and liabilities are as follows;
As at 1 April 2008

As at 31 March
2009(Millions of Yen)
As at 31 March2010

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

4,246

3,352

2,801

236

235

161

4,482

3,587

2,962

Current: Other assets
Prepaid expenses

2,022

1,985

2,038

Refundable consumption taxes

2,437

2,766

2,362

Others

1,603

2,960

3,065

6,062

7,711

7,465

Total

As at 1 April 2008

As at 31 March
2009(Millions of Yen)
As at 31 March2010

Non-current: Other Liabilities
Deposit received and other

838

789

1,703

838

789

1,703

Accrued salary/Accrued bonus/Accrued vacation pay

12,686

10,263

10,397

Other accrued expenses

18,606

13,828

11,795

Advanced received/Deferred revenue (i)

3,445

3,604

3,368

Others

3,267

3,240

4,035

38,00430,93529,595

Total
Current: Other liabilities

Total

Note:
(i) Details of advance received and deferred revenue are as follows;
As at 1 April 2008

As at 31 March
2009(Millions of Yen)
As at 31 March2010

Advance received/Deferred revenue
Customer loyalty programmes

1,953

2,011

1,730

Government grants

531

182

126

Others

961

1,411

1,512

3,445

3,604

3,368

Total

42

13. Inventories
Details of inventories are as follows;
As at 1 April 2008
49,961

Goods and products(Millions of Yen)
As at 31 March 2010
26,825As at 31 March 2009
35,557Work in progress

6,184

11,1088,323

Raw materials

10,70011,86413,006

Supplies

14,288

12,57913,060Total

81,133

71,10861,214Inventories expected to be sold after morethan 12 months

461

648

682

No inventories were pledged as collateral to secure debt.
The cost of inventories recognised as an expense during the year ended 31 March 2009 was 262,008 million yen including
317 million yen from discontinued operations. The cost of inventories recognised as an expense during the year ended 31
March 2010 was 231,817 million yen.
The cost of inventories recognised as expense in respect of write-down and the reversal of such write-down are as follows;
Amount of write-down

For the year ended 31 March 2009
5,603

(Millions of Yen)
For the year ended 31 March 2010
1,087

－

(1)

Amount of reversal of write-down

The reversal is mainly due to an upturn of market situation.

14. Trade and other receivables
Details of trade and other receivables are as follows;
Accounts receivable
Notes receivable
Other receivables
Allowance for doubtful
accounts
Total

As at 1 April 2008
110,144
11,6592,397(2,390)As at 31 March 2009
73,8048,803
1,761(2,683)(Millions of Yen)
As at 31 March 2010
84,037
9,375
2,712(1,826)

121,810

81,68594,298The credit terms for customers are set between 90 days to 120 days on average.
Refer to Note 23 “Financial instruments” for credit risk management and fair value of trade and other receivables.

15. Cash and cash equivalents
Details of cash and cash equivalents are as follows;
As at 1 April 2008

As at 31 March 2009

(Millions of Yen)
As at 31 March 2010

181,467(131)
181,336

214,541(6,613)207,928

173,308(5,370)167,938

181,336

207,928

167,938

Cash and cash equivalents
Cash and deposit
less time deposit over 3 months(Total) Cash and cash equivalents at consolidated
statement of financial position
Cash and cash equivalents at consolidated statement ofcash flows

4316. Interest-bearing debt
Details of interest-bearing debt are as follows;
As at 1 April 2008
Long-term bank loans (Excepts for loans maturing within a year)
Long-term bank loans with maturity within a year
Short-term bank loans
Corporate bonds
Commercial Paper
Long-term finance lease obligations
Short-term finance lease obligations
Interest-bearing debt Total
Non-current liabilities total
Current liabilities total

13,2688,749
8,551
99,700
6,192
2,189
399
139,048
115,157
23,891As at 31 March
2009
9,689
4,402
2,326
99,74541,9782,120
182
160,442
111,554
48,888(Millions of Yen)
As at 31 March
2010
1,830
3,277
762
99,792－
1,373
251
107,285
102,995
4,290

The obligations under finance lease are secured by the leased assets for which the lessor has ownership. Refer to Note 17“Finance lease obligations”.
As at 1 April 2008 and 31 March 2009, the long-term debt from the business combination included debts that were subject
to compliance with certain measurable covenants. Such covenants included the condition under which the Company shallmaintain the total net assets in the non-consolidated statement of financial position at year end and mid-year end at no lessthan 75% of the net assets at the same time a year ago. For the year ended 31 March 2009, the Company recognised
impairment losses on property, plant equipments; and, as a result, the net asset declined below 75% of the net assets one
year ago. Due to the violation of this covenant, the Company paid off the amount of the debt of 7,235 million yen.
Details of the remaining contractual maturity for long-term borrowings and bond, and fair values are set out in Note 23“Financial instruments”.

44

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

Amounts payable under finance leases:
No later than 1 year
Later than 1 year but not later than 5
years
Later than 5 years
Total
Less—future finance charges
Present value of lease obligations
Less—amount due for settlement within
12 months
Amount due for settlement after
12 months(Millions of Yen)
Present Value of Minimum
Lease Payments
As at 1As at 31
As at 31
April 2008
March 2009 March 2010

As at 1
April 2008

As at 31
March 2009

As at 31
March 2010

418
2,253

203
1,900

262
1,211

399
2,183

182
1,833

251
1,147

6
2,677
(89)
2,588

302
2,405
(103)
2,302

245
1,718
(94)
1,624

6
2,588

287
2,302

226
1,624

2,588
399

2,302
182

1,624
251

2,189

2,120

1,373

The Group has not basically entered into a new finance lease contract since 1 April 2008. The Group enters into a lease
contract only when it concludes that it has a number of advantages of having a lease arrangement in respect to cost
reduction or the risk avoidance associated with product obsolescence. The majority of the current finance lease obligations
consist of lease contracts which commenced before 1 April 2008. The average remaining lease term is approximately 3 to
4 years as at 31 March 2010.
Some lease contracts include renewal option 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 instrument”.

18. Operating lease arrangements
Details of minimum lease payments and contingent lease payments for the period under operating lease arrangements are
as follows;
For the year ended 31 March 2009

(Millions of Yen)
For the year ended 31 March 2010

Minimum lease payments
Contingent rent

6,660
182

6,199
189

Total

6,842

6,388

The amounts above are included in the line item “other expenses” in the consolidated statement of comprehensive income.
Contingent rent related to rent contracts for stores at shopping malls are based on the stores’ sales amounts.
As at 1 April 2008, 31 March 2009 and 2010, the maturity period of the outstanding commitments under non-cancellable
operating leases are as follows;
As at 1 April 2008
No later than 1 year
Later than 1 year but not later than 5 years
Later than 5 years
Total

915
1,180
466
2,561

As at 31 March
2009
1,320
2,059
220
3,599

(Millions of Yen)
As at 31 March
2010
1,026
1,576
347
2,949

Operating lease payments represent rentals payable by the Group for the land used for an office, building and machinery.
Averages operating lease terms for those assets are 16 years, 4 years and 5 years, respectively.
Some lease contracts include renewal options. However, there is no purchase option, sub-lease contract, escalation
payments and restrictions (such as dividends, additional borrowing, and additional lease contract), included in these lease
contracts.
45

19. Retirement benefit plans
The Group has contributory defined contribution plans and defined benefit plans, and non-contributory defined benefit
plans. For the accounting policies adopted by the Group for retirement benefit plans, refer to Note 3 “Significant
accounting policies (19) Retirement benefit costs”.
The Company and its domestic subsidiaries mainly have defined contribution plans. However, the plans taken over fromPENTAX CORPORATION as a result of the merger are closed defined benefit plans and represent a significant portion of
the Group’s retirement benefit obligations. Overseas subsidiaries have benefit plans required by local law and regulationsof 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 Group does not have retirement benefit plans other than pension plans and retirement allowances.
(1) Defined benefit plans
Pension plans carried forward from the merger with PENTAX CORPORATION included the following three plans as at
1April 2008 (As at 31 March 2010, only plans ① and ② are effective);
Details of each of the plans are as follows;①Retirement allowances
Pension benefits

Based on accumulated points
earned taking into accountqualification and employment
period. One time retirement
payment.

②Defined benefit plans(HOYA pension plan)
Based on accumulated points
earned during the duration ofmembership.

③Tax Qualified Pension
Plans(TQPP)
Based on qualifications
points and employment
period points earned.

Selection available if
employed over 20 years
and retirement due tomandatory retirement.
For others, one time
retirement payment.
Upon death of a member,
if member employed forover 20 years or apensioner, then, survivors
benefit is paid.
5.5% per annum
4 times annually

Option for pension plans－

Selection available for amember with 20 years or moreparticipation. For others, aone-time retirement payment
or transfer to another plan.

Survivors pension benefits－

None (One-time payment tosurvivor)

Promised rate of return
Benefit payment frequency－－

2.5% per annum
6 times annuallyWith the enforcement of the Defined Benefit Corporate Pension Law of Japan in 2002, it is necessary to either terminate
the TQPP by March 2012 or to transfer plan members to a different pension plan. PENTAX CORPORATION’s TQPP has
continued to be effective subsequent to the merger in March 2008. On 1 October 2009, PENTAX division’s TQPP wastransferred to the defined benefit plans (HOYA pension plan) and as a result of orders from tax authorities to terminate
PENTAX division’s TQPP was terminated approximately a year after the merger.
The amounts included in the consolidated statement of financial position arising from the Group’s obligation in respect ofits defined benefit plans are as follows;
Obligations under defined benefit plans (Funded)
Fair value of plan assets
Total
Obligations under defined benefit plans(Unfunded)
Net actuarial gains (losses) not recognised
Net liability arising from defined benefit plan
obligation
Balance in the consolidated statement offinancial position
Liability
Asset (Other non-current assets)

As at 1 April 2008
14,332(8,848)
5,484
6,740

As at 31 March 2009
14,370(6,741)
7,629
5,317

(Millions of Yen)
As at 31 March 2010
12,635(6,164)
6,471
4,078

(1,865)
10,359(4,478)8,468(2,384)8,165

10,383
(24)

8,489
(21)

8,186
(21)

46

Amounts recognised in profit or loss in respect of these defined benefit plans are as follows;

975
367
(171)
158
－
－
1,329
(1,105)(Millions of Yen)
For the year ended
31 March 2010
1,063
239
(90)
464
(63)
159
1,772
916

For the year ended
31 March 2009
21,072
975
367
1,495
－
－
(4,222)
19,687(Millions of Yen)
For the year ended
31 March 2010
19,687
1,063
239
(253)
(63)
(393)
(3,567)
16,713For the year ended
31 March 2009
Current service cost
Interest cost
Expected return on plan assets
Actuarial gains (losses)
Past service cost
Losses on curtailment of the plan
Total
Actual return (losses) on plan assets

Movements in the present value of the defined benefit obligations are as follows;

Opening defined benefit plans obligation
Current service cost
Interest cost
Actuarial (gains) losses
Past service cost
Losses (gains) on curtailment/settlement
Benefits paid
Closing defined benefit plans obligations

Movements in the present value of the plan assets are as follows;
For the year ended
31 March 2009
Opening fair value of plan assets
Expected return on plan assets
Actuarial gains (losses)
Contributions from employer
Benefits paid
Closing fair value of plan assets

8,848
171
(1,276)709(1,711)
6,741(Millions of Yen)
For the year ended
31 March 2010
6,741
90
825
371
(1,863)
6,164

The Group expects to make a contribution of 460 million yen to the defined benefit plans for the year ending 31 March
2011.
The major categories of plan assets are as follows;

Domestic equity instruments
Overseas equity instruments
Domestic debt instruments
Overseas debt instruments
General accounts at life insurancecompany (guaranteed return)
Hedge funds
Total

As at 1 April 2008
33%
32%
10%
10%
10%

As at 31 March 2009
20%
20%
30%
10%
20%

As at 31 March 2010
27%
25%
14%
20%
14%

5%
100%

－
100%

－
100%

The principal assumptions used for the purposes of the actuarial valuations were as follows;
Discount rate
Expected rate of return on plan assets
Expected rate of salary increase

As at 1 April 2008
2.0%
3.5%
7.3%

As at 31 March 2009
1.3%
2.0%
7.3%

As at 31 March 2010
1.5%
1.3%
7.4%

The overall long-term expected rate of return is determined based on the current and the future portfolio of the plan assets
as well as the expected return and risk based on historical return trends of various long-term investments.

47

Adjustments for fund status in the past were as follows;
Present value of defined benefit plansobligations
Fair value of plan assets
Fund deficit
Adjustments on plan liabilities
Adjustments on plan assets

As at 1 April 2008
21,072As at 31 March 2009
19,687(Millions of Yen)
As at 31 March 2010
16,713（8,848）
12,224163(2,028)（6,741）
12,946
1,495(1,276)（6,164）
10,549(253)825(2) Defined contribution plans
The total expense recognised was 1,581 million yen and 1,448 million yen for the year ended 31 March 2009 and 2010,
respectively.
(3) Severance payments
Under certain circumstances (such as retirement before the normal retirement date), additional payments are made uponretirement. The total expense recognised was 6,743 million yen (including severance payments of 234 million yen for
discontinued operations) and 1,932 million yen for the year ended 31 March 2009 and 2010.

48

20. Other Provisions
Details of other provisions are as follows;
Asset retirement obligation reserve
Warranties provision
Total
Non-current liabilities
Current liabilities

As at 1 April 2008
1,891
991
2,882
1,891
991

As at 31 March 2009
1,943
794
2,737
1,943
794

(Millions of Yen)
As at 31 March 2010
1,742
880
2,622
1,718
904

An analysis of the change in provisions is as follows;

Balance at 1 April 2009
Provision for the year
Interest cost associated with passage oftime
Reduction resulting from settlement for
the year
Balance at 31 March 2010

Asset retirement obligation
reserve
1,943
104
43

(Millions of Yen)
Total

Warranty provision
794
880
－

2,737
984
43

(348)

(794)

(1,142)

1,742

880

2,622

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

21. Trade and other payable
Details of trade and other payable are as follows;
Accounts payable
Notes payable, trade
Processing cost payable
Other payable
Notes payable for capital investment
Total

As at 1 April 2008
39,001
15,580954
24,675
801
81,011As at 31 March 2009
24,8884,218
452
16,518
6
46,082(Millions of Yen)
As at 31 March 2010
30,408
1,955
766
14,12921
47,279Trade notes payable are due 120 days on average. During the year ended 31 March 2009, the payment method at PENTAX
division merged by the Company on 31 March 2008 was changed from notes payable to factoring.
Accounts payable are due 30 to 60 days from the invoice date in Asia except for Japan, and due 90 to 120 days from theinvoice date in Japan. Accounts payable in Europe and U.S.A. are mainly payable to the Group entities, thus upon
consolidation these trade accounts payable are eliminated. The Group maintains the global fund pool at Japan, Europe andthe U.S.A. to make payments within the due date.

49

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

Balance at
1 April 2008
Decrease (i)Balance at
31 March 2009
Decrease (i)Balance at
31 March 2010

Number of
authorised shares（Ordinary shareswith no par-value）
1,250,519,400

Number of issued
shares（Ordinary shareswith no par-value）
435,017,020

Number ofoutstanding shares（Ordinary shareswith no par-value）
432,858,729

－

－

－

－

1,250,519,400

435,017,020(1,769)432,856,960

6,264

15,899(1,457,204)
431,399,756

－

－

6,264

15,899－－1,250,519,400

435,017,020

Share capital

Capital reserves(Millions of Yen)

(Millions of Yen)

6,264

15,899Note:(i) Decrease in number of outstanding shares is due to increase in treasury shares.
(2) Treasury shares and other capital reserves① Treasury shares
Numbers of shares

Amount(Millions of Yen)

2,158,291

7,984

Repurchase of odd-lot shares
Disposal of odd-lot shares to shareholders with odd-lot shares
Decrease on exercise of stock option

3,141
(972)
(400)

6
(4)
(1)

Balance at 31 March 2009
Repurchase from opposing shareholders (i)Repurchase of odd-lot shares
Disposal of odd-lot shares to shareholders with odd-lot shares
Decrease on exercise of stock option

2,160,060
1,525,000
1,884
(80)
(69,600)

7,985
3,271
4
(0)
(250)

Balance at 31 March 2010

3,617,264

11,010

Balance at 1 April 2008

Note:(i)This repurchase is based on the claim from opposing shareholders in accordance with the 1st clause of article 797th of theCompanies Act in Japan.
② Other capital reserves

Balance at 1 April 2008

Gain(loss) on resale ofTreasury shares(millions of Yen)
(4,740)Stock option

Total(millions of Yen)
972

(Millions of Yen)
(3,768)

Disposal of Treasury shares
Share-based payments

(2)

－

－

467

(2)
467

Balance at 31 March 2009
Disposal of Treasury shares
Share-based payments(4,742)
(121)

－

1,439
(19)
429

(3,303)(140)429

Balance at 31 March 2010

(4,863)

1,849(3,014)

Refer to Note 25 “Share-based payments” for details of Stock option.

50

(3) Retained earnings and dividends
Amount(Millions of Yen)
381,697

Balance at 1 April 2008
Profit for the year (Attributable to owners of the Company)

29,380

Dividends(28,136)

Balance at 31 March 2009
Profit for the year (Attributable to owners of the Company)
Dividends

382,941
41,213(28,135)

Balance at 31 March 2010

396,019

Details of dividends are as follows;
Payment date
2 June 2008
25 November 2008
1 June 200925 November 2009
2 June 2010
30 November 2010

Dividends per share (Yen)
35
30
35
30
35
30

Total Dividends (Millions of Yen)
15,15012,98615,15012,98515,09912,942

Dividends payable are included in the line item of “Other current liabilities” in the consolidated statement of financial
Position.
(4) Minority interests
Amount(Millions of Yen)
Balance at 1 April 2008
Profit for the year (Attributable to minority interests)
Translation differences for foreign operations (other comprehensive income)
Dividends
Increase arising on the newly acquired consolidated subsidiary
Decrease arising on liquidation of consolidated subsidiary
OthersBalance at 31 March 2009
Profit for the year (Attributable to minority interests)
Translation differences for foreign operations (other comprehensive income)
Dividends
Increase arising on newly acquired subsidiary
Decrease arising on additional acquisition of shares by the Company
OthersBalance at 31 March 2010

51

2,903
(301)
(242)
(307)
48
(57)
(270)
1,774
304
13
(159)
147
(864)
(21)
1,194

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 capital structure of the Group is as follows;
Interest-bearing debt
Less: Cash and cash equivalents
Net debt
EquityAs at 1 April 2008
139,048
181,336(42,288)394,177(Millions of Yen)
As at 31 March 2010
107,285
167,938(60,653)358,749

As at 31 March 2009
160,442
207,928(47,486)
342,984

In order to maximise the corporate value of the Group, cash flows have been a priority of the Group management. As at 31
March 2009 and 2010, 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 2010.
Details of interest-bearing debt, cash and cash equivalents and equity are described in Note 16 “Interest-bearing debt”,
Note 15 “Cash and 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 ofmeasurement and recognition of income and expenses are described in Note 3 “Significant accounting policies”.
(3) Categories of financial instruments
As at 1 April 2008
Financial assets
FVTPL financial assets (derivative instruments)
Loans and receivables
Trade and other receivables
Other financial assets
Available-for-sale financial assets
Cash and cash equivalents
Financial liabilities
FVTPL financial liabilities (derivative instruments)
Financial liabilities measured at amortised cost
Trade and other payables
Interest-bearing debt

As at 31 March 2009

(Millions of Yen)
As at 31 March 2010

938

76

－

121,810
5,764
4,924
181,336

81,685
12,3883,550
207,928

94,29821,0293,366
167,938

83

434

392

81,011
139,048

46,082
160,442

47,279107,285

The items above are not included in discontinued operations and disposal group held for sale. The Group does not haveheld-to-maturity investments or derivative instruments designated as hedging instruments. Likewise, the Group does nothave financial assets or financial liabilities valued using the fair value option.
The financial assets designated as FVTPL (Derivative instruments), other financial assets and available-for-sale financial
assets are included in “Long-term financial assets” or “Other short-term financial assets” on the consolidated statement offinancial position.
The financial liabilities designated as FVTPL (Derivative instruments) are included in “Other long-term/short-term
financial liabilities” on the consolidated statement of financial position.

52

(4) Financial risk management
In its operations, the Group is exposed to various financial risks. The Group undertakes risk management steps tominimise the effects of these financial risks. In an effort to manage these risks, the Group’s risk management approach is
to eliminate the source of these risks or to minimise the risks that are not avoidable.
The Group does not enter into or trade financial instruments, including derivative financial instruments, for speculative
purposes. There are certain cases in which the Group obtains additional borrowings from financial institutions to react totemporary cash shortages or uses forward foreign exchange contracts to sustain cash flows. The above financial risks aremanaged by the financial department of the Group.
(5) Market risk management
The Group is exposed to risks arising from changes in the economic environment and financial markets. The factors of therisk 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 are expanded globally, foreign exchange fluctuations in particular Thai Baht, Euro and US
dollar have a significant impact on the Group’s financial results. If the Japanese yen appreciates against these currencies,
both sales and profit stated in Japanese yen might decrease even though sales and profit stated in local currencies haveincreased.
The Group intends to marry major currencies the Group uses (Euro, US dollars and Yen) in settlements ofreceivables/payables resulting from operating activities. Specifically, the subsidiaries that continuously conduct import orexport transactions retain foreign currencies obtained from exports of goods for payables on imported supplies. This
enables the Group to mitigate foreign currency risk. On the other hand, the Company having multiple strategic business
units (SBU) and conducting finance and dividend, and holding companies receiving dividends from their subsidiaries anddistributing it to the Company and/or other group companies, sometimes fall into disparity of foreign currency debt-credit
balances in receivables, liabilities and/or bank deposits. This might cause significant gains or losses on foreign exchange
differences when the Yen appreciates or depreciates against US dollars or Euro, or when Euro appreciates or depreciates
against US dollar.
2) Foreign currency sensitivity analysis
The chart below shows the impact on the profit and equity in a case of a 1% appreciation of Yen against the Thai Baht,
Euro and US dollar on the assumption that other currencies are held constant.
For the Year ended 31 March 2009
For the Year ended 31 March 2010
Average of exchange rate
(Yen per each currency)
Thai Baht
2.75
2.94
Euro
130.68143.28US Dollars
92.61
100.66
Profit for the year
(Millions of Yen)
Thai Baht
(125)
(123)
Euro
(363)
(366)
US Dollars
(142)
(93)
Equity (Millions of Yen)
Thai Baht
(142)
(120)
Euro
(607)
(574)
US Dollars
(176)
(150)
Note:
Numbers in brackets mean the amount of negative impact on profit and equity resulting from a 1% appreciation of Yen.
The amounts above represent the impact on the consolidated financial statements of the Group resulting from foreign
currency conversion, not the impact on Group’s cash-flows or operations themselves.
Likewise, the charts below show the impact in case of a 1% appreciation of functional currencies of the Company and aholding company in the Group on their receivables/liabilities and bank deposits denominated in foreign currency on theassumption that other currencies are held constant.

53

2)-1. Parent company (the Company)

1 April
2008
(16)

Euro
31 March
2009
(132)

31 March
2010(69)

1 April
2008(130)(Millions of Yen)
US Dollars
31 March
31 March
2009
2010
(154)
(192)

Trade and otherreceivables
Trade and other
0
2
0
74
42
96
payablesLong-term financial
(24)
(31)
(24)
－
－
－
assetsInterest-bearing
387
318
153
149
－
－
long-term debt
Cash and cash
0
(5)
(1)
(154)
(149)
(207)
equivalents
Total
371
183
(70)
(81)
(143)
(327)
Note:
Numbers in brackets mean the amount of negative impact on profit and equity resulting from a 1% appreciation of Yen.
The 1% depreciation of Yen has a positive impact in the same amount.
Intercompany receivables/payables are included in the calculation of the impact since they cause foreign exchange gainor loss in the process of translation.
2)-2. Holding company

1 April
2008

Yen
31 March
2009(1)

31 March
2010－

1 April
2008(Millions of Yen)
US Dollars
31 March
31 March
2009
2010
(2)
－

Trade and other(2)－
receivables
Trade and other
1
0
1
18
32
17
payablesLong-term financial
(8)
(8)
(150)
(156)
(1)
－
assetsCash and cash
(0)
(1)
(7)
(81)
(2)
(75)
equivalents
Total
(7)
(10)
(6)
(215)
(128)
(59)
Note:
Numbers in brackets mean the amount of negative impact on profit and equity resulting from a 1% appreciation ofEuro. The 1% depreciation of Euro has a positive impact in the same amount.
Intercompany receivables/payables are included in the calculation of the impact since they cause foreign exchange gainor loss in the process of translation.

543) Currency derivatives
The Group’s policy generally does not permit the use of derivative instruments such as forward foreign exchange
contracts. However, in certain circumstances in which the use of such derivatives is determined to be beneficial, the Groupcan enter into contracts upon obtaining a formal approval from the Chief Financial Officer (“CFO”) of the Group inaccordance with its global headquarters approval process.
In order to economically hedge foreign currency exposures on intercompany receivables, payables and dividends, forward
foreign exchange contracts are occasionally entered into.In these cases, the same approval policy as stated above isadhered to.
The following are the details of the forward foreign exchange contracts and currency options at the end of each reporting
period;Average exchange rate
As at
As at
As at 1
31
31
April
March
March
2008
2010
2009
Forward foreign exchange contractsOver
one year
€Buy
1.51
1.48
－
(US$/€)(US$/€)(US$ Sell)
Withinone year
US$ Sell
1.47－－(S$/US$)(S$ Buy)
US$ Buy
1.03
1.09－(C$/US$)(C$/US$)(C$ Sell)
US$ Sell108.31－－(Y/S$)(Y Buy)€Sell
158.44－－(Y/€)(Y Buy)
€Buy
2.02
－
－
(S$/€)(S$ Sell)
€Buy
1.51
1.34
1.42
(US$/€)(US$/€)(US$/€)(US$ Sell)
Currency options
Withinone year
US$ Buy
0.98－－(C$/S$)(C$ Sell)

Foreign currency ( mil)
As at
As at
As at 1
31
31
April
March
March
2008
2010
2009

Notional value
As at
As at
As at 1
31
31
April
March
March
2008
2010
2009

As at 1
April
2008

(Millions of Yen)
Fair value
As at
As at
31
31
March
March
2010
2009

€7.4

€16.7

－

1,166

2,426

－

50

(241)

－

US$16.7

－

－

1,777

－

－

114

－

－

US$1.0

US$2.0

－

100

196

－

5

34

－

US$54.0

－

－

5,848

－

－

474

－

－

€64.0

－

－

10,140

－

－

111

－

－

€12.1

－

－

1,777

－

－

104

－

－

€14.4

€75.7

€50.4

2,275

9,958

6,676

65

(108)

(372)

US$3.2

－

－

321

－

－

15

－

－

Note:

As at 1 April 2008, forward foreign exchange contracts and currency options for managing cash flows from operating
activities acquired through business combination were outstanding. As at 31 March 2010, all the instruments have matured
and none of these were outstanding.
The fair values of forward foreign exchange contracts at the end of each reporting period are determined based on theforward exchange rate at market. Fair values of currency options are based on the value obtained from financial
institutions.
② Interest rate risk management
The Group has long-term floating interest rate borrowings assumed as a result of a business combination. The Group also
assumed the related interest rate swap contracts to economically hedge the interest rates on these borrowings. The majorityof the interest-bearing debt is bonds with fixed interest rates. The Group’s cash and cash equivalents exceeds theinterest-bearing debt, and currently the impact of interest expense on the Group’s profit/loss is much less than operating
revenue. Therefore, the Group considers the interest rate risk not to be significant and has not performed a sensitivity
analysis.
Under the interest rate swap contracts, the Group pays fixed interest and receives floating interest based on the notional
principal amounts. Considering the payment of interest on floating interest-bearing debt, receipt of floating interest ofinterest rate swap contracts and payment of fixed interest rate, the long-term debt was considered to be provided at a fixedinterest rate which minimises the risk of interest rate fluctuations. The only interest rate swaps the Group holds are theones assumed through the business combination.
The fair values of the interest rate swaps at the end of the reporting period were determined by discounting future net cash
flows using market interest rates at the end of each reporting period.

55

The following table details the notional principal amounts of interest rate swaps, remaining terms of the contracts and theaverage interest rate at the end of each reporting period;

Less than
1 year1 to 2year
2 to 5years
Over 5years

Average contracted fixed rate ofinterest rate swaps
1 April
31 March
31 March
2008
2009
2010
1.88%
2.04%
－

Notional principal amount(Millions of Yen)
1 April
31 March
31 March
2008
2009
2010
2,900
2,198
－

Fair value(Millions of Yen)
1 April
31 March
31 March
2008
2009
2010
(10)
(13)
－

－

2.23%

2.96%

－

3,717

375

－

(30)

(7)

1.78%

2.96%

－

8,111

625

－

(73)

(13)

－

－

－

－

－

－

－

－

－

－

The interest rate swaps are settled on a semi-annual basis. The floating rate on the interest rate swaps is based on TIBOR.
The Group settles the net of the fixed and the floating interest rate. Hedge accounting has not been adopted for the interest
rate swaps.
③ Price risks management in equity instruments
The Group is exposed to equity price risks arising from equity instruments (listed shares). These investments are held froma viewpoint of business strategy, not for short term trading purpose. The Group does not sell these investments frequently
and the Group periodically reviews the fair value of these instruments as well as the financial condition of investees.
The sensitivity analysis has been based on the exposure to the price of equity instruments (listed shares) at the end of thereporting period. If equity prices increase or decrease by 5%, accumulated other comprehensive income (pre-tax) wouldchange by 102 million yen and 111 million yen as at 31 March 2009 and 2010, respectively, as a result of changes in fairvalue of the equity instruments (listed shares).
(6) Credit risk management
Credit risk is the risk that a counterparty will default on its contractual obligations resulting in a financial loss to theGroup. The Group manages its credit risk by setting credit limits which are approved by the authorised personnel of each
Strategic Business Unit (“SBU”).
Credit losses incurred in the past were very rare for the Information technology business that sells mainly made-to-order
items. Likewise, significant credit losses were not incurred in the past by the Life care business since it sells goods andmanufactured products to end consumers and medical institutions.A division in the Life care business of selling goods to
medical institutions and operating wholesale business in certain countries has some past-due receivables due to thefinancial conditions of those medical institutions or customers. Credit limits have been set for those customers to minimise
the loss from a failure to collect the receivables.
Trade receivables consist of large number of customers across diverse industries and geographical areas. The Group has
neither significant credit risk exposure for a specific customer or customer group categorised by similarity, norconcentration of credit risk over 5% of total financial assets as at 31 March 2010.
① Financial assets and other credit exposures
Except for the items below, the carrying amounts after impairment losses presented on the consolidated financial
statements are the maximum exposure for the Group’s credit risk without considering the appraised value of the related
collateral.
(Millions of Yen)

Guarantee liabilities

As at 1 April 2008
2,072

Maximum credit risk
As at 31 March 2009
1,722

As at 31 March 2010
1,632

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

56

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 1 April 2008
Trade and otherreceivables (Gross)
Allowance for doubtful
accounts
Trade and otherreceivables (Net)
Other financial assets(Gross)Allowance for doubtful
accounts
Other financial assets(Net)
Balance at 31 March 2009
Trade and otherreceivables (Gross)
Allowance for doubtful
accounts
Trade and otherreceivables (Net)
Other financial assets(Gross)Allowance for doubtful
accounts
Other financial assets(Net)
Balance at 31 March 2010
Trade and otherreceivables (Gross)
Allowance for doubtful
accounts
Trade and otherreceivables (Net)
Other financial assets(Gross)Allowance for doubtful
accounts
Other financial assets(Net)

Overdue amounts
61 to 90
91 to 120
days
days

Total

Withindue date

124,200

113,723

4,922

1,840

788

746

2,181

(2,390)

(349)

(113)

(62)

(84)

(216)

(1,566)

121,810

113,374

4,809

1,778

704

530

615

6,089

5,760

－

－

0

1

328

(325)

－

－

－

0

(1)

(324)

5,764

5,760

－

－

－

－

4

84,36875,995

2,616

1,372

1,291

538

2,556

(2,683)

(517)

(41)

(29)

(54)

(100)

(1,942)

81,68575,478

2,575

1,343

1,237

438

614

12,936

12,315

－

－

2

2

617

(548)

0

－

－

(2)

(2)

(544)

12,38812,315

－

－

0

0

73

96,12487,462

3,995

1,520

597

507

2,043

(1,826)

(420)

(83)

(70)

(91)

(115)

(1,047)

94,29887,042

3,912

1,450

506

392

996

21,657

21,116

－

－

－

2

539

(628)

(164)

－

－

－

(2)

(462)

21,02920,952

－

－

－

－

77

Within 30days

31 to 60
days

Over 120days

The Group does not hold any collateral or other credit enhancements on the financial assets disclosed above.
The amount of 87,462 million yen for trade and other receivables (Gross) disclosed above at “within due date” at 31
March 2010 includes the amount of 1,306 million yen for notes receivable which were restructured with customers to
support their reconstruction process.

57

In case of impairment on financial assets, the Group does not directly write off such assets by reducing the carrying
amount, but instead records an allowance for doubtful accounts. Movement in the allowance for doubtful accounts is asfollows;

Balance at 1 April 2008
Provision for the year
Reduction resulting from settlement
for the year
Reduction for the year (reverse)
Other (Interest cost of discountcalculating and foreign exchangetranslation gain or losses）
Balance at 31 March 2009
Provision for the year
Reduction resulting from settlement
for the year
Reduction for the year (reverse)
Other (Interest cost of discountcalculating and foreign exchangetranslation gain or losses）
Balance at 31 March 2010

(Millions of Yen)
Total

Allowance for doubtful
accounts (Current)
2,390
1,377
(288)

Allowance for doubtful
accounts (Non-current)
325
268
(24)

(501)
(295)

(19)
(2)

(520)
(297)

2,683
675
(215)

548
510
(59)

3,231
1,185
(274)

(1,257)
（60)

(371)
(0)

(1,628)
(60)

1,826

628

2,454

2,715
1,645
(312)

The Group continuously monitors the financial status of customers which appear to represent a credit risk in collecting
receivables including restructured receivables. Based on this monitoring, the Group sets the allowance for doubtful
accounts considering the collectability of the receivables.
Because the Group operations are global, the credit risk is widely diversified among customers and the Group does notdepend on specific customers. Therefore the possibility of a chain-reaction of bankruptcies at a certain customer isconsidered to be immaterial and the Group does not set additional general allowance for doubtful accounts resulting fromthe consideration of this credit risk.
③ Transfer of financial assets
The Group transferred some of its notes receivable to financial institutions before maturity on a discounted basis. The
Group is required to repurchase these notes in the event of a default. Accordingly, the Group continues to recognise thefull 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.
Notes receivable transferred that were outstanding at the end of the reporting period are as follows;
As at 1 April 2008

Notes receivable transferred

As at 31 March 2009

1,551

58

181

(Millions of Yen)
As at 31 March 2010428

(7) Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the CFO of the Group who is appointed by the Board of
Directors. Based on the instructions from the CFO, the financial headquarters of the Group mainly manages the Group’s
liquidity risk by maintaining an appropriate level of retained earnings and credit facilities, and monitors the actual cash
flows and forecasted cash flows. Temporary cash shortages due to dividends or bonus payments are funded through theissuance of commercial paper.
The following table details the contractual maturity of its financial liabilities (including derivative financial instruments)
but excluding guarantee liabilities;
1 April 2008

Non derivative
liabilities
Trade and otherpayablesLong-term bank loans(excluding current
portion)Current portion of longterm bank loans
Short-term bank loans
Bonds
Commercial papers
Long-term finance leaseobligations
Short-term finance leaseobligations
Derivative liabilities
Currency derivative
instruments
Interest rate swaps
Total(Millions of Yen)
4 to 5 years
Over 5years

Carrying
amountContractual
cash flows

Less than 1
year

1 to 2 years

2 to 3 years

3 to 4 years

81,01181,01181,011

－

－

－

－

－

13,26813,268

－

4,607

4,037

4,146

5

473

8,749

8,749

8,749

－

－

－

－

－

8,551
99,700
6,192
2,189

8,551
100,000
6,200
2,189

8,551
－
6,200
－

－
－
－
1,394

－
－
－
653

－
－
－
85

－
40,000－51－
60,000
－
6

399

399

399

－

－

－

－

－

(938)

(938)

(888)

(50)

－

－

－

－

83
219,204

83
219,512

10
104,032

－
5,951

50
4,740

23
4,254

－
40,056－60,479Note:
Guarantee liabilities have been excluded from the above table as the likelihood of execution has been determined to below. Assets and liabilities recognised as a result of undertaking derivative instrument transactions are presented on a net
basis. Net receivables positions are presented in brackets.
31 March 2009

Non derivative
liabilities
Trade and otherpayablesLong-term bank loans(excluding current
portion)Current portion of longterm bank loans
Short-term bank loans
Bonds
Commercial papers
Long-term finance leaseobligations
Short-term finance leaseobligations
Derivative liabilities
Currency derivative
instruments
Interest rate swaps
Total(Millions of Yen)
4 to 5 years
Over 5years

Carrying
amountContractual
cash flows

Less than 1
year

1 to 2 years

2 to 3 years

3 to 4 years

46,082

46,082

46,082

－

－

－

－

－

9,689

9,689

－

4,214

4,358

166

160

791

4,402

4,402

4,402

－

－

－

－

－

2,326
99,74541,9782,120

2,326
100,000
42,000
2,120

2,326
－
42,000
－

－
－
－
944

－
－
－
456

－
40,000
－
294

－
－
－
139

－
60,000
－
287

182

182

182

－

－

－

－

－

315

315

74

241

－

－

－

－

43
206,88243
207,159－
95,066

30
5,429

13
4,827

－
40,460－299－
61,078

Note:
Guarantee liabilities have been excluded from the above table as the likelihood of execution has been determined to
be low. Assets and liabilities recognised as a result of undertaking derivative instrument transactions are presented ona net basis.

59

31 March 2010

Non derivative
liabilities
Trade and otherpayablesLong-term bank loans(excluding current
portion)Current portion of longterm bank loans
Short-term bank loans
Bonds
Long-term finance leaseobligations
Short-term finance leaseobligations
Derivative liabilities
Currency derivative
instruments
Interest rate swaps
Total(Millions of Yen)
4 to 5 years
Over 5years

Carrying
amountContractual
cash flows

Less than 1
year

1 to 2 years

2 to 3 years

3 to 4 years

47,27947,27947,279

－

－

－

－

－

1,830

1,830

－

458

157

152

150

913

3,277

3,277

3,277

－

－

－

－

－

762
99,792
1,373

762
100,000
1,373

762
－
－

－
－
667

－
40,000
260

－
－
137

－
25,00083－
35,000
226

251

251

251

－

－

－

－

－

372

372

372

－

－

－

－

－

20
154,95620
155,164

13
51,954

7
1,132－
40,417－289－
25,233－36,139Note:
Guarantee liabilities have been excluded from the above table as the likelihood of execution has been determined to
be low. Assets and liabilities recognised as a result of undertaking derivative instrument transactions are presented ona net basis.
Temporary cash shortages due to dividends or bonus payments are funded through the issuance of commercial paper.
The following are the details of financing method and financing status;(Millions of Yen)
As at 1 April 2008
Bank overdraft
Used
UnusedTotal
Commercial paper limit
Used
UnusedTotal

As at 31 March 2009

As at 31 March 2010－
24,00024,000－46,00046,000－46,00046,0006,200
43,80050,00042,0008,000
50,000－50,00050,00060

(8) Fair value of financial instruments
As at 1 April 2008
Carrying
Fair value
amount

As at 31 March 2009
Carrying
Fair value
amount(Millions of Yen)
As at 31 March 2010
Carrying
Fair value
amountAssetsFVTPL financial assets (derivative
938
instruments)
Loans and receivables
Other financial assets
5,764
Available-for-sale financial assets
4,924
Total
11,626
Liabilities
FVTPL financial liabilities
83(derivative instruments)
Financial liabilities measured at amortised cost
Long-term bank loans (excluding
13,268current portion)
Current portion of long-term bank
8,749
loans
Bonds
99,700Long-term finance lease
2,189
obligations
Short-term finance lease399
obligations
Total
124,388

938

76

76

－

－

5,069
4,924
10,931

12,3883,550
16,014

11,8393,550
15,46521,0293,366
24,395

20,416
3,366
23,782

83

434

434

392

392

13,749

9,689

9,946

1,830

1,824

8,827

4,402

4,410

3,277

3,386

103,485
2,217

99,7452,120

106,952
2,126

99,792
1,373

103,752
1,424

406

182

201

251

257

128,767

116,572

124,069

106,915

111,035Note:
Of FVTPL financial assets and financial liabilities (derivatives), the fair values of forward foreign exchange contracts at
the end of each reporting period were determined based on the forward exchange rate at market. Fair values of currency
option are based on the value obtained from financial institutions.
The fair values of interest rate swaps were determined by discounting future net cash flows using a quoted market interest
rate at the end of the reporting period taking into account the duration to maturity.
The fair values of loan receivables and other assets were determined by discounting future net cash flows using rates
taking into account the estimated timing of payments and credit risk.
The fair values of listed shares included in available-for-sale financial assets were determined based on market prices atthe end of each reporting period. The fair values of shares of private companies included in available-for-sale financial
assets were calculated by using a reasonable method.
The fair values of long-term bank loans, bonds and finance lease obligations were determined by discounting future cash
flows using rates taking into account the estimated timing of payments and credit risk.
(9) Fair value measurements recognised in the consolidated statement of financial position
The following table provides an analysis of financial instruments that have been measured at fair value subsequent toinitial recognition;
The fair values are categorised into Levels 1 to 3.
¾¾¾Level 1; fair value measurements are those derived from quoted prices (unadjusted) in active markets for identicalassets or liabilities.
Level 2; fair value measurements are those derived from inputs other than quoted prices included within Level 1 thatare observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3; fair value measurements are those derived from inputs for the asset or liability that are not based on
observable market data (unobservable inputs).

61

Financial instruments valued at fair value are as follows;
As at 1 April 2008
FVTPL financial assets (derivative
instruments)
Available-for-sale financial assets
Total
FVTPL financial liabilities(derivative instruments)
Total

Level 1As at 31 March 2009
FVTPL financial assets (derivative
instruments)
Available-for-sale financial assets
Total
FVTPL financial liabilities(derivative instruments)
Total

Level 1－

938－

(Millions of Yen)
Total
938

3,616
3,616
－

500
1,438
83

808
808
－

4,924
5,862
83

－

83

－

83

Level 2

Level 3－76－

(Millions of Yen)
Total
76

2,049
2,049
－

500
576
434

1,001
1,001
－

3,550
3,626
434

－

434

－

434

Level 2

Level 3

Note:
There were no transfers between Level 1, 2 and 3 during the year ended 31 March 2009.
As at 31 March 2010
Available-for-sale financial assets
Total
FVTPL financial liabilities(derivative instruments)
Total

2,212
2,212
－

500
500
392

654
654
－

(Millions of Yen)
Total
3,366
3,366
392

－

392

－

392

Level 1

Level 2

Level 3Note:
No transfers occurred between Levels 1, 2 and 3 during the year ended 31 March 2010.
Reconciliation of financial assets categorised at Level 3 from opening balance to closing balance.
For the year ended 31 March 2009
Opening balance
Total gains or losses:- in profit or loss (i)- in other comprehensive income (ⅱ)
Purchases
OthersClosing balance(Millions of Yen)
Fair value measurement as at the end of reporting period
Available-for-sale financial assets
Total
808
808
(59)
(59)
(50)
(50)
(9)
(9)
137
137
115
115
1,001
1,001

Note:
(i) Of the total gains or losses for the period ended 31 March 2009 included in profit or loss, 50 million yen relates toavailable-for-sale financial assets at the end of the reporting period. Related profit or loss of these assets is included in theline item of ‘finance costs’ in the consolidated statement of comprehensive income. Refer to Note 27 “Finance income andcosts”.
(ii) Of the total gains or losses for the period included in other comprehensive income, 9 million yen relates to the shares
not traded in market. Related profit or loss is included in the line item of ‘Net gain/(loss) on revaluation ofavailable-for-sale financial assets’ in Note 29 “Other comprehensive income”.

62For the year ended 31 March 2010
Opening balance
Total gains or losses:- in profit or loss (i)- in other comprehensive income (ⅱ)
Sales
OthersClosing balance(Millions of Yen)
Fair value measurement as at the end of reporting period
Available-for-sale financial assets
Total
1,001
1,001
(148)
(148)
(127)
(127)
(21)
(21)
(176)
(176)
(23)
(23)
654
654

Note:
(i) Of the total gains or losses for the period ended 31 March 2010 included in profit or loss, 127 million yen relates toavailable-for-sale financial assets at the end of the reporting period. Related profit or loss of these assets is included in theline item of ‘finance costs’ in the consolidated statement of comprehensive income. Refer to Note 27. “Finance income
and costs”.
(ii) Of the total gains or losses for the period included in other comprehensive income, 21 million yen relates to the shares
not traded in market. Related profit or loss is included in the line item of ‘Net gain/(loss) on revaluation ofavailable-for-sale financial assets’ in Note 29 “Other comprehensive income”.

6324. Assets held for sale
Details for carrying amounts of assets held for sales are as follows;(Millions of Yen)

Information
Technology
Life Care
Adjustments(Headquarters)
Total

As at 1 April 2008 (i)Land
Building
Total
andstructures－－－

As at 31 March 2009 (ii)Land
Building
Total
andstructures
478
57
535

As at 31 March 2010 (iii)Land
Building
Total
andstructures
－
－
－

－
234

－
－

－
234

306
285

－
－

306
285

－
－

325
－

325
－

234

－

234

1,069

57

1,126

－

325

325

Note:
(i) Adjustments (Headquarters) as at 1 April 2008
The Board of Directors of the Company decided to sell unused land. The land was sold during the year ended 31 March
2009. Impairment losses on the land recognised through the year ended 31 March 2008 were 368 million yen.
(ii) Adjustments (Headquarters) for the year ended 31 March 2009
The Board of Directors of the Company decided to sell a company dormitory and a company residence, acquired through amerger, and these assets were sold during the year ended 31 March 2010. Impairment losses on the related assets wererecognised for the year ended 31 March 2009 in the amount of 89 million yen.
(ii) Information Technology and Life Care for the year ended 31 March 2009
The Company decided to sell the closed business offices in Japan, and the offices were sold during the year ended 31
March 2010. Impairment losses on related assets were recognised for the year ended 31 March 2009 in the amount of 487
million yen for building and structures.
(iii) Life Care for the year ended 31 March 2010
During the year ended 31 March 2010 there was some progress of negotiation on the sale of the manufacturing plant
located at Mulheim in Germany that was closed in the previous year. These assets with carrying value of 382 million yen
were reclassified to assets held for sale and impairment losses were recognised in the amount of 57 million yen.

64

25. Share-based payments(1) Detail of share-based payments
The Group has a stock option plan. The purpose of the plan is to increase the value of the Group and to improve thefinancial result of the Group by motivating the members such as directors, officers employees of the Group, and as well as
to retain valuable employees.
After overall approval at the shareholders meeting, options are granted to individuals that are proposed and approved at
the Group’s Board of Directors’ meeting. The options are granted at no cost. The exercise period of the options is theperiod determined in the options contract and options not exercised within this exercise period will expire. Subsequent to
the grant date, if a member terminates his or her employment prior to the vesting date, the options will expire. The option
contract includes a clause that limits the maximum number of stock options a member can exercise each year during theexercise periods.
Stock options granted to members are accounted for as share-based payments transactions. Expenses recorded to othercomprehensive income from undertaking shared-based payments transactions was 467 million yen and 429 million yen forthe year ended 31 March 2009 and 2010, respectively.
Details of the stock options are as follows;
No.
4
5
6
7
8
9
10

Number ofshares158,900
445,000
585,600
77,6001,036,000
60,0001,247,600

Grant date

Expiry date

13 Dec 2004
1 Jan 2006
7 Nov 2006
14 Nov 2007
28 Nov 2008
24 Feb 20098 Dec 2009

30 Sep 2009
30 Sep 2015
30 Sep 2016
30 Sep 201730 Sep 2018
30 Sep 2018
30 Sep 2019

Exercise price
(Yen)
2,713
4,150
4,750
4,230
1,556
1,704
2,215

Fair value at grant date
(Yen)
705
2,917
3,961
3,357
952
1,521
2,784

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” is not applied mentioned in (4) below.
(2) Determination of stock option value
Weighted average of fair value of the stock option granted during the year ended 31 March 2009 and 2010 were 983 yen
and 2,784 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;
Expected volatility was determined based on recent historical daily share price volatility from the grant date to forecasted
remaining period.

Share price at grant date
(Yen)
Exercise price (Yen)
Expected volatility
Expected remaining option
life (years)
Dividends yield
Risk free rate

No. 4
2,675

No.5
4,240

No.6
4,450

No.7
3,790

No.8
1,372

No.9
1,690

No.10
2,425

2,713
34.97%
3.5

4,150
37.02%
6.0

4,750
34.42%
6.1

4,230
30.66%
6.1

1,556
35.87%
6.1

1,704
36.64%
5.8

2,215
36.67%
6.1

1.38%
0.30%

1.42%
1.02%

1.35%
1.40%

1.72%
1.13%

4.74%
0.98%

3.85%
0.79%

2.68%
0.67%

65

(3) The number and weighted average exercise prices of stock options
Weighted average exercise price of the outstanding options was 3,005 and 2,701 yen as at the year ended 31 March 2009
and 2010, respectively. Weighted average remaining contractual life was 7.8 years and 8.2 years as at 31 March 2009 and2010 respectively

Outstanding at the beginning of
the period

For the year ended 31 March 2009
Weighted average
exercise price
Number of shares(Yen)
1,267,100
4,252

For the year ended 31 March 2010
Weighted average
exercise price
Number of shares(Yen)
2,363,100
3,005

1,096,000

1,564

1,247,600

2,215

Forfeited (i)－－(153,200)

3,924

Exercised－－(69,600)

1,587

Expired－－(158,900)

2,713

2,363,100

3,005

3,229,000

2,701

596,000

3,966

1,010,800

3,745

GrantedOutstanding at the end of theperiodExercisable at the end of theperiodNote:(i) Stock options forfeited were due to employee retirements.
Stock options exercised during the year ended 31 March 2010 were as follows (31 March 2009: zero);

No.8
No.8
No.8
No.9
No.8
No.8
Total

Number of shares
exercised
2,000
2,000
3,200
14,80036,00011,60069,600Exercise date
13 Oct 200910 Dec 200912 Jan 201012 Jan 2010
10 Feb 2010
10 Mar 201066

Share price at exercise
date (Yen)
2,080
2,375
2,579
2,579
2,258
2,322

(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 the date of transition to
IFRSs, 1 April 2008, resulting in IFRS 2 not being applied;
NumberNo
3
4
5
6

702,000
476,700
445,000
195,200

Grant date

Expiry date

12 Dec 2003
13 Dec 2004
1 Jan 2006
7 Nov 2006

Exercise price(Yen)

30 Sep 2008
30 Sep 2009
30 Sep 2015
30 Sep 2016

Fair value at grant
date (Yen)

2,438
2,713
4,150
4,750

2,459
1,729
2,518
1,113

Weighted average exercise price of the outstanding options was 3,766 yen and 4,340 yen as at 31 March 2009 and 2010,
respectively. Weighted average remaining contractual life was 4.6 years and 5.8 years as at 31 March 2009 and 2010,
respectively.
For the year ended 31 March 2009

Outstanding at the beginning of theperiodForfeited (i)Exercised
ExpiredOutstanding at the end of theperiodExercisable at the end of theperiodFor the year ended 31 March 2010

Number of shares

Weighted average
exercise price(Yen)

Number of shares

Weighted average
exercise price(Yen)

1,451,700

3,338

984,100

3,766

－

－

(400)
(467,200)
984,100

2,438
2,438
3,766

(86,000)
－

4,290
－

(344,700)
553,400

2,713
4,340

984,100

3,766

553,400

4,340

Note:
(i) Stock options forfeited were due to employee retirements.
There was no stock option exercised during the year ended 31March 2010. Stock options exercised during the year ended
31 March 2009 were as follows;No
3

Number of shares exercised
400

67

Exercise date

Share price at exercise date (Yen)

12 May 2008

2,880

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

Sales of goods and products
Service revenue
Total sales

For the year ended 31 March2009
450,3213,474
453,795(Millions of Yen)
For the year ended 31 March2010
412,568
1,158
413,726(2) Other income from continuing operations
The following is an analysis of the Group’s other revenue from continuing operations;

Commission
Rent
Government grants
Gain on disposal of business (i)Gain on sales of property, plant and equipment
OthersTotal other income

For the year ended 31 March
2009
4,357
94
464
892
460
4,878
11,145(Millions of Yen)
For the year ended 31 March
2010
1,439
90
755
－
415
3,021
5,720

Note:
(i) For gain on disposal of business, the transferred Printer business was not categorised as a discontinued operations as it
was not material.
(3) Research and development expenses recognised as incurred
For the year ended 31 March
2009
Employee benefits expenses
Commission expenses
Depreciation and amortisation
Other expenses
Total research and development expenses
recognised as incurred(Millions of Yen)
For the year ended 31 March
2010

5,371
1,927
2,719
7,294
17,311

7,002
1,557
2,903
6,021
17,483Note:
The above items are included in the corresponding line items in the consolidated statement of comprehensive income.
(4) Employee benefits expense
The following is an analysis of the Group’s employee benefits expense from continuing operations;
For the year ended 31 March
2009
Salary, bonus and others
Retirement benefit （Note 19）
Defined benefit （Note 19）
Defined contribution （Note19）
Retirement benefit total
Share-based payments (Stock option) （Note 25）
Severance payments （Note 19）
OthersTotal employee benefits expense

68(Millions of Yen)
For the year ended 31 March
2010

92,962

83,499

1,329
1,581
2,910
467
6,509
4,410
107,258

1,772
1,448
3,220
429
1,932
3,842
92,922

(5) Other expenses
The following is an analysis of the Group’s other expenses from continuing operations;

Packaging/shipping/transportation
TravelRent
Utilities
Supplies
Repair and maintenanceForeign exchange loss (gain) (i)Loss on sales of property, plant and equipment
Loss on disposals of property, plant and equipment
OthersTotal other expenses

For the year ended 31 March
2009
9,570
5,431
4,784
10,2997,110
9,596(6,564)486
478
32,19273,382(Millions of Yen)
For the year ended 31 March
2010
8,783
4,704
4,778
8,779
6,081
7,875
5,593
722
1,057
45,62093,992Note:(i) Foreign exchange loss (gain) above included gains or losses resulting from fluctuations in currency derivatives (1,253
million yen and 57 million yen of losses for the years ended 31 March 2009 and 2010, respectively.).

69

27. Finance income and costs(Millions of Yen)
For the year ended 31 March2010

For the year ended 31 March2009
Finance income
Interest income
Cash and cash equivalents, loans and receivables
Available-for-sale financial assets
Dividend income
Available-for-sale financial assets
Gain on sales
Investments in associates (ⅱ) (Note 9)
Available-for-sale financial assets
Total finance income
Finance costs
Interest costs
Interest-bearing debt
Other provision
Other liabilities
Loss on sales
Available-for-sales financial assets
Impairment losses
Available-for-sales financial assets（ⅲ）
Fair value gains /losses on derivatives
Interest rate swaps
Total finance costs

4,018
－

831
1

63

55

9,477
12
13,570

32
1
920

2,460
17
－

2,169
43
120

29

0

2,327

587

(40)
4,793

(23)
2,896

Note:
(i) Gain or loss of measurement at fair value on currency derivatives is disclosed in the line item ‘Foreign exchange loss
(gain)’ of Note 26. “Revenue and expenses (excluding finance income and costs), (5) Other expenses.”(ii) A portion of Group’s investment in AVAN STRATE INC. was sold to CH HOLDINGS. LTD. on 6 June 2008.
(iii) Impairment losses were recognised on listed shares and the shares of private companies categorised asavailable-for-sale financial assets due to significant or prolonged decline in the fair values against acquisition cost.

7028. Discontinued operations
The Group classifies continuing and discontinued operations by SBU. Accordingly, when the Group disposes of a businessthat composes a part of a SBU, the business remains classified as continuing operations.
In December 2008, the Board of Directors of the Company decided the disposal of the Crystal Division which had notbeen profitable for years. The business was ultimately discontinued on 31 March 2009.
In April 2010, the Board of Directors of the Company decided to dispose of the Media Division. However, the division
was classified as a continuing operation in the consolidated financial statements as it did not meet the criteria to beclassified as a discontinued operations as at 31 March 2010.
The following is an analysis of revenue, expenses, profit/loss and cash flows from discontinued operations;(Millions of Yen)
For the year ended 31 March
2009

Profit/loss for the year from discontinued operations
Revenues:
Sales
Finance income
Other income
Total revenue
Expenses:
Raw materials and consumables used
Employee benefits expense
Depreciation and amortisation
Subcontracting cost
Advertising and promotion
Commission expense
Impairment losses (Note 8)
Other expenses
Total expenses
Net loss from discontinued operations before tax
Income tax
Net loss from discontinued operations (attributable to the shareholders of theCompany)

75
0
20
95
46
548
1
3
69
55
67
185
974
(879)
－

(879)

(Millions of Yen)
For the year ended 31 March
2009

Cash flow from discontinued operations
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Total

(815)
5
－

(810)

71

29. Other comprehensive income
For the years ended 31 March 2009 and 2010, other comprehensive income comprises of the following;
For the year ended 31 March
2009(Millions of Yen)
For the year ended 31 March
2010(50,593)－(50,593)

5,783
83
5,866

(471)
1,215
744
（1,989）（51,838）
(176）

406
89
495
（281）
6,080
(64)

(52,014)

6,016

Other comprehensive income:① Exchange differences on translating foreign operations
Gains (losses) arising during the year
Reclassification adjustments to profit or loss for the year
Total
② Net gain/(loss) on revaluation of available-for-sale financial
assetsGains (losses) arising during the year
Reclassification adjustments to profit or loss for the year
Total
③ Share of other comprehensive income of associates
Other comprehensive income/(loss) before tax
Income tax relating to components of other comprehensive
incomeTotal other comprehensive income/(loss) (net of tax)

‘Exchange differences on translation of foreign operations’ consist of differences on foreign currency conversion for
financial statements of foreign operations.
‘Net gain/ (loss) on revaluation of available-for-sale financial assets’ represents unrealised gain or loss onavailable-for-sale financial assets at the end of the reporting period.
Taxation on each item of other comprehensive income for the years ended 31 March 2009 and 2010 is as follows;

Other comprehensive income attributable toowners of the Company① Exchange differences on translating
foreign operations② Net gain/(loss) on revaluation ofavailable-for-sale financial assets③ Share of other comprehensive income ofassociates
Sub total
Other comprehensive income attributable tominority interests① Exchange differences on translating
foreign operations
Sub total
Total other comprehensive income

For the year ended 31 March
2009
Total
Tax
Net of tax(Millions of Yen)
For the year ended 31 March
2010
Total
Tax
Net of tax(50,351)37(50,314)

5,853

(20)

5,833

744

(213)

531

495

(44)

451

(1,989)－(1,989)

(281)

－

(281)

(51,596)(176)(51,772)

6,067

(64)

6,003

(242)

－

(242)

13

－

13

(242)
(51,838)

－
(176)

(242)
(52,014)

13
6,080

－
(64)

13
6,016

72

30. Earnings per share(1) Basic earnings per share and diluted earnings per share
For the year ended 31
March 2009(Yen)
For the year ended 31
March 2010

From continuing operations
From discontinued operations

69.90(2.03)

95.24－

Total basic earnings per share
Diluted earnings (loss) per share

67.87

95.24

From continuing operations
From discontinued operations

69.89(2.03)

95.15
－

67.86

95.15

Basic earnings (loss) per share

Total diluted earnings per share(2) The basis of calculation of basic earnings per share and diluted earnings per share① Basic earnings per share(a) Profit/ (loss) for the year attributable to owners of the Company
For the year ended 31 March
2009(Millions of Yen)
For the year ended 31 March
2010

30,25941,213(879)－

29,38041,213

Profit attributable to owners of the Company from continuing
operations
Loss attributable to owners of the Company fromdiscontinued 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

Weighted-average number of ordinary shares

For the year ended 31 March
2009432,858(Shares in thousands)
For the year ended 31 March2010
432,754② Diluted earnings per share(a) Profit/ (loss) for the year attributable to owners of the Company

Profit attributable to owners of the Company from continuing
operation after dilution
Loss attributable to owners of the Company fromdiscontinued operation after dilution
Profit used in the calculation of diluted earnings per share

For the year ended 31 March
2009
30,259(Millions of Yen)
For the year ended 31 March
2010
41,213（879）－

29,38041,213(b) Weighted average number of ordinary shares used in the calculation of diluted earnings per share

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

For the year ended 31 March
2009432,858(Shares in thousands)
For the year ended 31 March2010
432,75467432,925400
433,154

31. Non-cash transactions
Non-cash transactions for the year ended 31 March 2009 and 2010 consisted of acquiring property, plant and equipment
through new finance lease arrangements in the amount of 313 million yen and 3 million yen, respectively.

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

Name of Subsidiaries
HOYA MAGNETICSSINGAPORE PTE, LTD.
HOYA GLASS DISK(THAILAND) LTD.
HOYA GLASS DISKPHILIPPINES,INC.
HOYA GLASS DISKVIETNAM LTD.
HOYA OPTICS (TAIWAN)
LTD.
HOYA ELECTROINICS
KOREA CO.,LTD.
HOYA ELECTRONICS
MALAYSIA SDN.BHD.
HOYA CORPORATION USA
THAI HOYA GLASS DISKLTD.
EAST CHEERINVESTMENT LIMITEDSHENZHEN KTM GLASSSUBSTRATE CO., LTD
HOYA OPTICS(THAILAND)LTD.
HOYA
OPTO-ELECTRONICS
QINGDAO LTD.
HOYA OPTICALTECHNOLOGY (SUZHOU)LTD.
PENTAX CEBUPHILIPPINESCORPORATIONPENTAX VN CO.,LTD.
HOYA PHOTONICS,INC.
THAI HOYA OPTICS LTD.
HOYA
HEALTHCARECORPORATIONHOYA LENSMANUFACTURING
MALAYSIA SDN.BHD.
MALAYSIAN HOYA LENS
SDN.BHD.
HOYA LENS THAILANDLTD.
HOYA LENS GUANGZHOULTD.
HOYA LENS AUSTRALIA
PTY.LTD.
HOYA LENS INDIA
PRIVATE LIMITEDHOYA LENS VIETNAM
LTD

Proportion of shares held
As at 1As at 31
As at 31
April
March
March
2008
2009
2010

Information
Technology
Information
Technology
Information
Technology
Information
Technology
Information
Technology
Information
Technology
Information
Technology
Information
Technology
Information
Technology

Major
products/services
in the reportablesegment
Electronics
related productsElectronics
related productsElectronics
related productsElectronics
related productsElectronics
related productsElectronics
related productsElectronics
related productsElectronics
related productsElectronics
related products

Information
Technology
Information
Technology
Information
Technology
Information
Technology

Electronics
related productsElectronics
related products
Imaging related
products
Imaging related
products

THAILAND

100.0%

100.0%

100.0%

CHINA

100.0%

100.0%

100.0%

Information
Technology

Imaging related
products

CHINA

100.0%

100.0%

100.0%

Information
Technology

Imaging related
products

PHILIPPINES

100.0%

100.0%

100.0%

Information
Technology
Information
Technology
Information
Technology

Imaging related
products
Imaging related
products
Imaging related
products

VIETNAM

100.0%

100.0%

100.0%U.S.A.

99.9%

99.9%

99.9%

100.0%－(ii)－

Life Care

Health Carerelated products

JAPAN

100.0%

100.0%

Health Carerelated products

MALAYSIA

100.0%

100.0%

100.0%

MALAYSIA

100.0%

100.0%

100.0%THAILAND

100.0%

100.0%

100.0%

CHINA

95.0%

95.0%

95.0%

AUSTRALIA

100.0%

100.0%

100.0%

INDIA

100.0%

100.0%

100.0%VIETNAM

100.0%

100.0%

100.0%

Reportable
Segment

Life Care

Life Care
Life Care
Life Care
Life Care
Life Care
Life Care

Health Carerelated products
Health Carerelated products
Health Carerelated products
Health Carerelated products
Health Carerelated products
Health Carerelated products
74

Location

SINGAPORE

100.0%

100.0%

100.0%THAILAND

100.0%

100.0%

100.0%PHILIPPINES

100.0%

100.0%

100.0%VIETNAM

100.0%

100.0%

100.0%TAIWAN

100.0%

100.0%

100.0%

SOUTH KOREA

100.0%

100.0%

100.0%

MALAYSIA

100.0%

100.0%

100.0%U.S.A.

100.0%

100.0%

100.0%THAILAND

100.0%

－
(ii)

－

CHINA

－

CHINA

－

THAILAND

100.0%
(iii)
51.0%
(iii)

100.0%
51.0%

－
(i)

Name of Subsidiaries
HOYA LENSDEUTSCHLAND GMBH
HOYA LENS U.K. LTD.
HOYA LENS ITALIA S.P.A.
HOYA LENS IBERIA S.A.
HOYA LENS FRANCE
S.A.S.
HOYA LENS OFAMERICA,INC
VISION MEMBRANETECHNOLOGIES, INC.
HOYA VISION(THAILAND)LTD.
HOYA HOLDINGS N.V.

PENTAX OF AMERICA.INC

PENTAX CANADA INC.

PENTAX EUROPE GMBHPENTAX ITALIA S.R.L
PENTAX U.K. LTD.
MICROLINE SURGICAL,
INC.
HOYA HOLDINGS ASIA
PACIFIC PTE. LTD.
HOYA HOLDINGS(ASIA)
B.V.
HOYA HOLDINGS,INC.

Reportable
Segment
Life Care
Life Care
Life Care
Life Care
Life Care
Life Care
Life Care
Life Care
Life Careand
Corporate
Information
Technology
and Life
Care
Information
Technology
and Life
Care
Life Care
Life Care
Life Care
Life Care
Corporate
Corporate
Corporate

Major
products/services
in the reportablesegment
Health Carerelated products
Health Carerelated products
Health Carerelated products
Health Carerelated products
Health Carerelated products
Health Carerelated products
Health Carerelated products
Health Carerelated products
Health Carerelated products
and EU
headquarters
Imaging related
products andMedical related
products
Imaging related
products andMedical related
products
Medical related
products
Medical related
products
Medical related
products
Medical related
products
Asia
headquarters
Holdingcompany
U.S.
headquarters

Location

Proportion of shares held
As at 1As at 31
As at 31
April
March
March
2008
2009
2010

GERMANY

100.0%

100.0%

100.0%UNITED
KINGDOM

100.0%

100.0%

100.0%

ITALY

100.0%

100.0%

100.0%

SPAIN

100.0%

100.0%

100.0%FRANCE

100.0%

100.0%

100.0%U.S.A.

100.0%

100.0%

100.0%

U.S.A

82.7%

82.7%

82.7%

THAILAND

100.0%－(ii)－

NETHERLANDS

100.0%

100.0%

100.0%U.S.A.

100.0%

100.0%

100.0%

Canada100.0%

100.0%

100.0%GERMANY

100.0%

100.0%

100.0%

ITALY

60.0%

60.0%

60.0%

UNITED
KINGDOM

100.0%

100.0%

100.0%U.S.A.

100.0%

100.0%

100.0%

SINGAPORE

100.0%

100.0%

100.0%NETHERLANDS

100.0%

100.0%

100.0%U.S.A.

100.0%

100.0%

100.0%Note:(i) HOYA HEALTHCARE CORPORATION was merged with the Company, effective 1 January 2010, and is now
operated as a division of the Company.
(ii) THAI HOYA GLASSDISK LTD., THAI HOYA OPTICS LTD., and HOYA VISION (THAILAND) LTD. wereliquidated on 30 June 2008.
(iii) EAST CHEER INVESTMENT LIMITED. and SHENZHHEN KTM GLASS SUBSTRATE CO., LTD were acquired
on 30 October 2008.

75

33. Related party disclosure
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 otherrelated parties are disclosed as follows;(1) Transactions with related parties, and receivables and payables balances
The Group had the transactions with related parties as follows;
As at 1 April 2008
Type of related party

Related party

Associate

AVAN STRATE INC.

Associate

AVAN STRATE INC.

Description of therelated party
transaction
Purchase of raw
materials
License fee received(Millions of Yen)
Outstandingbalance－154

As at/ for the year ended 31 March 2009
Type of related party

Related party

Associate

AVAN STRATE INC.

Associate

AVAN STRATE INC.

Description of therelated party
transaction
Purchase of raw
materials
License fee received

Transaction
amount(Millions of Yen)
Outstandingbalance

609

479

3,685

225

Description of therelated party
transaction
Purchase of raw
materials
License fee received

Transaction
amount(Millions of Yen)
Outstandingbalance383

372

As at/ for the year ended 31 March 2010
Type of related party

Associate

Related party

AVAN STRATE INC.

AVAN STRATE INC.
Associate
1,266
1,151
Note
(i) Transactions with associates are at arm's length basis.
(ii) The amounts outstanding above are unsecured and no guarantees have been received. Allowance for doubtful
accounts has not been provided.

(2) Remuneration of key management personnel
The remuneration of directors and other members of key management personnel during the year is disclosed as follows;
For the year ended
31 March 2009
266
76
342

Short-term benefits
Share-based payments
Total remuneration of key management personnel(Millions of Yen)
For the year ended
31 March 2010
459
78
537

The remuneration of directors and key management personnel is determined by the remuneration committee having regard
to the performance of individuals and market trends.

7634. Business combinations
For the year ended 31 March 2009:
The subsidiary acquired through business combination during the year was not material. The Company paid aconsideration to minority shareholders for a merger in the previous year in the amount of 9,398 million yen.
For the year ended 31 March 2010:
The details of business combination during the year were as follows;(1) Subsidiary acquired
The Group acquired 100% of the outstanding shares of Starion Instruments Corporation (“Starion”) on 17 April 2009.
Starion manufactures medical devices. Starion was acquired in light of the robust growth in the medical device market due
to the growing demand for advanced medical care.
(2) Consideration transferred(Millions of Yen)
AmountCash and cash equivalents
Liabilities accepted on acquisition and others
Contingent liability
Total

3,431
285
1,201
4,917

Note:
(i) Contingent liability requires the Group to make additional payments if certain conditions (accumulated sales orachievement of research and development) are met in a specified period.
(ii) Costs directly related to the acquisition were 108 million yen which is included in the consideration amount above.
(3) Assets acquired at the date of acquisition(Millions of Yen)
AmountNon-current assets:
Property, plant and equipment
Other intangible assets
Deferred tax assets (Note 10)

21
813
777

Current assets:
Cash and cash equivalents
Trade and other receivables
Inventories

8
123
164
Total

1,906

(4) Goodwill arising on the acquisition(Millions of Yen)
AmountAcquisition cost
Plus: minority interests
Less: fair value of identifiable net assets acquired
Goodwill arising on the acquisition

4,917－(1,906)
3,011

Goodwill relates to the benefit of expected synergies, revenue growth and future market development.
(5) Net cash outflow on the acquisition(Millions of Yen)
For the year ended
31 March 2010
Consideration paid in cash and cash equivalents
Less: cash and cash equivalents balances possessed by acquiree
Cash paid for acquisition (excluding acquiree’s cash)

3,431
(8)
3,423

77

(6) Impact of the acquisitions on the results of the Group
There is no significant impact on the financial results of the Group, as the acquired company is mainly engaged in researchand development activities. Accordingly, the Group omits the disclosure (pro forma) of revenue, and profit or loss
information which would assume the business combination occurred on 1 April 2008 or 1 April 2009, and the disclosure of
profit or loss information arising after acquisition date included in the consolidated statement of comprehensive income.

35. Sale of subsidiary
No subsidiary was disposed in the years ended 31 March 2009 and 2010.

36. Contingent liabilities
・Guarantee liabilities
The Group provides guarantees on borrowings of business partners and the Group’s employees from financial institutions
as follows;Business partners
The Group’s employees
Total

As at 1 April 2008
2,070
2
2,072

As at 31 March 2009
1,720
2
1,722

(Millions of Yen)
As at 31 March 2010
1,631
1
1,632

As at 31 March 2009
4,570

(Millions of Yen)
As at 31 March 2010
4,147

37. Commitments for expenditure
Payment commitments after the reporting date are as follows;
Commitments for theacquisition of property, plantand equipment

As at 1 April 2008
3,996

78

38. Subsequent events(1) Resolution on cash dividends
On 31 May 2010, a resolution was made by the Company's Board of Directors for the payment of a cash dividend toshareholders of record on 31 March 2010 of 15,099 million yen (35 yen per common share).
In addition, on 5 November 2010, a resolution was made by the Company's Board of Directors for the payment of a cash
dividend to shareholders of record on 30 September 2010 of 12,942 million yen (30 yen per common share).
(2) Transfer of Media Business to Western Digital Corporation① Details of the transaction
On 28 April 2010, a decision was made by the representative executive officer of the Group to enter into an agreementwith Western Digital Corporation to transfer Media business (information technology segment) and related assets. The
Media business manufactured glass media for hard disk drive and was operated by the Company and its 100% owned
subsidiary, HOYA MAGNETICS SINGAPORE PTE, LTD. (“HOMS”). The transfer was completed on 30 June 2010.
Continued high growth is expected in the hard disk market, especially for portable PCs and digital consumer electronics.
Hard disk storage capacity is also expected to grow rapidly. In this business environment, it is essential to strengthen the
research and development and maintenance of production system of the Group’s substrate and glass media to meet theincreasing demand trend for bigger hard disk capacity.
The Group leverages its competitive advantage and allocates its resources efficiently; accordingly, the Group has decided
to transfer its related assets of glass media to Western Digital Corporation and focus on its hard disk substrate business sothat the Group can rapidly deliver cutting edge products to meet burgeoning consumer demand and achieve timely,
efficient production.
The scope of the transfer included the hard disk glass media manufacturing operation at HOMS and the Group’s related
research and equipment of glass media related equipment at HOYA’s research and development facility.
The financial information of HOMS for the year ended 31 March 2010 was 16.4 billion yen of sales and 0.4 billion yen of
profit before tax.
② Assets and liabilities to be transferred, and price on transfer
Assets11.1 billion yen (includes 7.7 billion yen of non-current assets)
Liabilities
0.7 billion yen
Price on transfer
20.6 billion yen③ Reportable segment
Information technology

39. Approval of financial statements
The consolidated financial statements for the year ended 31 March 2010 were approved by the Company’s Board of
Directors and authorised for issue on 21 December 2010.

79

40. Explanation of transition to IFRSs
The Group has been preparing its consolidated financial statements in accordance with Japanese generally accepted
accounting principles (“GAAP”) (Japanese GAAP) for the year ended 31 March 2010 and prior years. The Company first
adopted and prepared its consolidated financial statements in accordance with IFRSs in the fiscal year ended 31 March
2010. In preparing the IFRSs consolidated financial statements, the Group prepared its opening consolidated statement offinancial position at the date of transition, 1 April 2008 under IFRSs.
IFRS1 requires a first-time adopter to include at least three consolidated statements of financial position, two consolidated
statements of comprehensive income, between two consolidated statements of cash flows and two consolidated statementsof changes in equity and related notes in the first consolidated financial statements.
Additionally, under IFRS1, the Group is required to disclose following reconciliations;・the reconciliation of total equity amount in the consolidated balance sheet under Japanese GAAP to total equity amountin the consolidated statement of financial position under IFRSs as at 1 April 2008 and 31 March 2010.
・the reconciliation of profit for the year in the consolidated statement of income under Japanese GAAP to profit
attributable to owners of the Company in the consolidated statement of comprehensive income under IFRSs for the year
ended 31 March 2010.
Likewise the Company disclosed the reconciliation as at 31 March 2009 and for the year then ended as well.
(1) Reconciliation of equity at 1 April 2008 (date of transition to IFRSs)(Millions of Yen)
Japanese GAAP

Japanese

GAAP

Reclassi- Adjustfications ments

IFRSs

Notes

IFRSs

ASSETSASSETSNON-CURRENT ASSETS:

NON-CURRENT ASSETS:

Property, plant and equipment-net
Goodwill
Other intangible assets
Investment securities

152,203
32,68023,624
22,203

1,474(15,524)
12,898(22,203)

Other non-current assets
Allowance for doubtful accounts
Deferred tax assets

7,627
(325)
41,15917,27910,431(3,060)325
10,868

5,595

57,622

Total non-current assets:
CURRENT ASSETS:
Inventories
Trade and notes receivables
Deferred tax assets

279,171

12,4886,060

297,719

82,822
120,522
10,868(1,865)
11(10,868)
1,079

176
1,277

81,133
121,810

284

1,363

145

7,729
6,062

Other current assets
Allowance for doubtful accounts
Cash and deposits

16,982(2,388)
181,467

595
19
104

154,272
17,17536,626

A
B,C
B,C
D,E

Property, plant and equipment-net
Goodwill
Other intangible assets

(168)
(85)

17,27910,263
4,482

D
E
C,E
E
F

Investments in associates
Long-term financial assets
Other non-current assets

7,729(11,065)
2,388
(131)
234

Total current assets

410,273

TOTAL ASSETS

689,444(12,488)

Deferred tax assets
Total non-current assets

G
H,I
F
E,I,J

CURRENT ASSETS:
Inventories
Trade and other receivables
Other short-term financial assets

181,336

I
H,I
H
E,J

Income tax receivables
Other current assets
Cash and cash equivalents

399,433
234

A

Sub total
Assets held for sale

1,882

399,667

Total current assets

7,942

697,386

TOTAL ASSETS

80

(Millions of Yen)
Japanese GAAP

Japanese

GAAP

Reclassifications

Adjustments

IFRSs

Notes

LIABILITIES AND EQUITY

LIABILITIES AND EQUITYEQUITY:
Share capital
Capital reserves
Treasury shares
Stock subscription rights
Retained earnings
Unrealised profit (loss) on
translation adjustments and others

IFRSs

EQUITY:
6,264
15,899(7,984)633
373,888
3,016

6,264
15,899(7,984)(633)(4,107)
4,740

339
3,069
(3,850)(3,768)381,697(834)

Share capital
Capital reserves
Treasury shares
K
K,Q
K,L,Q
L

391,274
Minority interests
Total equity
NON-CURRENT LIABILITIES:
Bonds
Long-term bank loans

2,909
394,625

Retirement benefits obligation

10,210Reserve for periodic repairs
Other non-current liabilities

1,017
1,500

99,967
13,26813,351(13,268)394

Total non-current liabilities
CURRENT LIABILITIES:
Short-term bank loans
Current portion of long-term bankloans
Commercial paper
Trade and notes payables

125,962

(662)
289
104

6,465
8,749

14,971(8,749)6,192
55,539(6,192)
25,135
81

Income tax payables
Accrued bonus, Allowance for
product’s warranty and Accrued
bonus for executives
Accrued expenses
Other current liabilities
Total current liabilities
Total liabilities

30,7938,499

22,51530,105
168,857
294,819

Total equity and liabilities

689,444

(6)
(448)

2,903
394,177

1,839

115,157

73
173
1,497
(1,017)73
10,383
1,891

(180)
2,385

838
109
128,451

2,455

23,891

337
(71)
58

81,011
1030,851
991(7,508)(22,515)
4,673
(104)

3,226
6,005
8,390

38,004
174,758
303,209

7,942

697,386

81

M,O
M
E
N
O
O
F,M,O
F

M
M
M
P
E,P
O,P

P
E,O,P

Other capital reserves
Retained earnings
Accumulated other comprehensive
income/(loss)
Equity attributable to owners of theCompany
Minority interests
Total equity
NON-CURRENT LIABILITIES:Interest-bearing long-term debt
Other long-term financial liabilities
Retirement benefits obligation
Other provisions
Other non-current liabilities
Deferred tax liabilities
Total non-current liabilities
CURRENT LIABILITIES:Interest-bearing short-term debt

Trade and other payables
Other short-term financial liabilities
Income tax payables
Other provisions

Other current liabilities
Total current liabilities
Total liabilities
Total equity and liabilities

(2) Notes to the reconciliation of equity at 1 April 2008
The following are notes to the reconciliation;
A. Property, plant and equipment-net, and Assets held for sale
• Reclassifications: Assets held for sale of 234 million yen as property, plant and equipment-net under Japanese GAAP
were reclassified and presented as assets held for sale under IFRSs.
• Adjustments: Lease expense under finance lease of 3,117 million yen, real estate acquisition tax of 279 million yen
and site restoration costs relating to asset retirement obligations of 321 million yen expensed under Japanese GAAP arecapitalised under IFRSs. The net carrying amount of property, plant and equipment-net has decreased by 2,829 million yen
as a result of IFRSs implementation review of depreciation method and estimated useful lives of property, plant andequipment. In addition, the net carrying value of property, plant and equipment-net in the amount of 332 million yen has
decreased due to the increase in depreciation from applying component accounting under IFRSs.
B. Goodwill and Other intangible assets• Reclassifications: Identifiable intangible assets of 15,524 million yen included in goodwill under Japanese GAAP
were reclassified and presented as other intangible assets under IFRSs.
• Adjustments: Under IFRSs, goodwill has increased by 19 million yen as the goodwill denominated in foreign
currency was translated using foreign exchange rate at the reporting date.
C. Goodwill, Other intangible assets and Other non-current assets• Reclassifications: Identifiable intangible assets of 15,524 million yen included in goodwill under Japanese GAAP
were reclassified and presented as other intangible assets under IFRSs, and leasehold rights of 2,567 million yen included
in other intangible assets under Japanese GAAP were reclassified as and included in other non-current assets as long-term
prepaid expenses under IFRSs.
• Adjustments: Development costs expensed as incurred under Japanese GAAP but meet the asset recognition
conditions under IFRSs are recognised as intangible assets.
D. Investments in associates• Reclassifications: Investments in associates of 17,279 million yen included in investment securities under Japanese
GAAP are separately disclosed under IFRSs.
E. Long-term financial assets, Other non-current assets, Other short-term financial assets, Cash and cash equivalents,
Other long-term financial liabilities, Other short-term financial liabilities and Other current liabilities• Reclassifications: Long-term deposits of 121 million yen, lease deposits of 3,718 million yen, non-current otherreceivables of 320 million yen and non-current loans receivable of 689 million yen collectively included in othernon-current assets under Japanese GAAP, were reclassified as long-term financial assets under IFRSs. Available-for-salefinancial assets of 4,924 million yen included in investment securities under Japanese GAAP were reclassified as
long-term financial assets under IFRSs. The allowance for doubtful accounts of 325 million yen separately disclosed underJapanese GAAP was deducted from long-term financial assets under IFRSs. Time deposits with maturities overthree-months of 131 million yen included in cash and deposits, short-term loans receivable of 328 million yen andderivative assets of 620 million yen included in other current assets, collectively under Japanese GAAP, were reclassified
as other short-term financial assets under IFRSs. Short-term derivative liabilities of 81 million yen included in othercurrent liabilities under Japanese GAAP were reclassified as other short-term financial liabilities under IFRSs.
• Adjustments: Foreign exchange contracts that were not recognised at fair value under Japanese GAAP as they wereallocated to the corresponding foreign currency assets and/or liabilities, are measured at fair values and reclassified as
long-term/short-term financial assets or liabilities under IFRSs.
F. Deferred tax assets and liabilities, and Other non-current liabilities• Reclassifications: Deferred tax assets of 10,868 million yen that were separately disclosed as current assets underJapanese GAAP were reclassified as non-current deferred tax assets under IFRSs. In addition, non-current deferred tax
liabilities included in other non-current liabilities under Japanese GAAP are disclosed separately under IFRSs.
• Adjustments: Deferred tax assets have increased by 1,526 million yen under IFRSs as deferred tax assets on
unrealised profits were calculated using different tax rates applicable under Japanese GAAP and IFRSs. There was afurther increase in deferred tax assets 4,069 million yen under IFRSs as a result of the re-examination of recoverability of
all deferred tax assets.

82

G.

Inventories
Adjustments: Inventories have decreased by 123 million yen as a result of adjusting lower of cost or net realisablevalue under IFRSs whereas inventories under Japanese GAAP were recognised at cost. Due to the changes in revenue
recognition methodologies (see H. “Trade and other receivables, and Other current assets” below), inventories haveincreased by 199 million yen under IFRSs. In addition, inventories have increased by 100 million yen due to changes inthe depreciation method for property, plant and equipment.
•

H. Trade and other receivables, and Other current assets• Reclassifications: Allowance for doubtful accounts which was separately disclosed in the amount of 2,388 million yen
and other accounts receivables of 2,399 million yen included in other current assets under Japanese GAAP were deductedfrom and reclassified as, respectively, trade and other receivables under IFRSs.
• Adjustments: Accounts receivables decreased by 270 million yen as a result of the recognition of revenue from salesof goods under IFRSs when significant risks and rewards of ownership have been transferred, whereas under Japanese
GAAP revenue from sales of goods was mainly recognized upon shipment.
Notes receivable transferred with recourse obligation of 1,551 million yen are recognised until the recourse obligation isdischarged under IFRSs whereas they were derecognised upon transfer under Japanese GAAP.
I.
Trade and other receivables, Other short-term financial assets, Income tax receivables and Other current assets• Reclassifications: Income tax receivables of 7,729 million yen included in other current assets under Japanese GAAP
was separately presented under IFRSs. Other accounts receivables of 2,399 million yen included in other current assets
under Japanese GAAP were reclassified as trade and other receivables under IFRSs. Short-term loans receivable of 328
million yen and derivative assets of 620 million yen included in other current assets under Japanese GAAP werereclassified as other short-term financial assets under IFRSs.
J. Other short-term financial assets and, Cash and cash equivalents• Reclassifications: Time deposits of 131 million yen with maturities over three-months and included in cash anddeposits under Japanese GAAP were reclassified as other short-term financial assets under IFRSs.
K. Other capital reserves and Retained earnings• Reclassifications: Stock subscription rights separately presented of 633 million yen under Japanese GAAP werereclassified as other capital reserves under IFRSs.
The loss on disposal of treasury shares of 4,740 million yen charged to retained earnings under Japanese GAAP werereclassified as other capital reserves under IFRSs following Group’s accounting policy.
• Adjustments: Under Japanese GAAP, stock subscription rights were recognised for stock options granted after thedate the Company Act in Japan was effective whereas under IFRSs, stock options that were granted after 7 November
2002 and vested on or after 1 April 2008 are recognised as a result of applying exemptions for first-time adopters. As aresult, capital reserves have increased by 339 million yen under IFRSs.
L.
Retained earnings and Accumulated other comprehensive income• Adjustments: Upon first-time adoption of IFRSs, cumulative translation differences at overseas subsidiaries of 3,850
million yen were considered to be zero.
M. Interest-bearing long-term and short-term debt, and Other non-current liabilities• Reclassifications: Long-term bank loans of 13,268 million yen and lease obligations of 83 million yen included inother non-current liabilities under Japanese GAAP were reclassified as interest-bearing long-term debt under IFRSs. The
current portion of long-term bank loans of 8,749 million yen and commercial paper of 6,192 million yen under Japanese
GAAP were reclassified as interest-bearing short-term debt under IFRSs.
• Adjustments: As a result of finance leases capitalised under IFRSs, minimum lease payments of 2,106 million yen arerecognised as interest-bearing long-term debt and 904 million yen as interest-bearing short-term debt, whereas lease
payments were expensed under Japanese GAAP. Notes receivable transferred with recourse obligation was derecognised
under Japanese GAAP, whereas the related liability of 1,551 million yen was recognised under IFRSs.
N. Retirement benefits obligation• Adjustments: Retirement benefits obligation for some foreign subsidiaries which have defined benefit plans wererecalculated and the Group recognised liabilities in accordance with IFRSs.

83

O. Interest-bearing long-term debt, Other provisions (non-current and current liabilities), Other non-current liabilities
and Other current liabilities• Reclassifications: Lease obligations of 83 million yen and asset retirement obligations of foreign subsidiaries of 394
million yen included in other non-current liabilities under Japanese GAAP, were reclassified to interest-bearing long-term
debt and other provisions (non-current liability), respectively under IFRSs.
Accrued bonus of 7,453 million yen which was classified separately under Japanese GAAP has been reclassified to othercurrent liabilities under IFRSs.
• Adjustments: Asset retirement obligations provision of 1,497 million yen not recognised under Japanese GAAP wasrecognised as other provisions under IFRSs. The reserve for periodic repairs of 1,017 million yen which was presented
under Japanese GAAP was not recognised under IFRSs.
P.
Trade and other payables, Other short-term financial liabilities, Other provisions (current liabilities) and Other
current liabilities•
Reclassifications: Other payables of 25,135 million yen and short-term derivative liabilities of 81 million yen
included in other current liabilities under Japanese GAAP, were reclassified as trade and other payables, and othershort-term financial liabilities, respectively.
Accrued expenses of 22,515 million yen and accrued bonus of 7,453 million yen which were separately disclosed underJapanese GAAP were reclassified as other current liabilities under IFRSs.
•
Adjustments: Under Japanese GAAP, the liability relating to the future expected usage of the Company’s customer
loyalty programmes of 708 million yen was recognised and included in other current liabilities (other payables) in theamount of the cost of the goods corresponding to the points of programmes. Under IFRSs, the customer loyalty
programmes were identified as component of revenue and other current liabilities (deferred revenue) of 1,953 million yen
has been recognised. Accrued vacation pay of 1,417 million yen, which was not recognised under Japanese GAAP, wasaccrued and included in other current liabilities under IFRSs. No asset and liability are recognised under Japanese GAAP
for finance lease contracts that started before 1 April 2008. However under IFRSs, both assets and liabilities arerecognised. In addition, a part of the liabilities for which purchase agreements of leased assets were concluded wereclassified to trade and other payables in the amount of 923 million yen.
Q. Other capital reserves and Retained earnings• Reclassifications: Loss on disposal of treasury shares of 4,740 million yen included in retained earnings underJapanese GAAP was reclassified as other capital reserves under IFRSs.
• Adjustments: The main reconciliation items were as follows. The amounts below were adjustments to retained
earnings through consolidated statement of comprehensive income and do not always equal to the amounts ofreconciliation to consolidated statement of financial position to which the Notes in the chart below refer.
Amount (Millions of Yen)
Property, plant and equipment related (Note A, M, P)
Asset retirement obligations reserve (Note A, O)
Deferred taxes (Note F）
Inventories related (Note G)
Stock options (Note K)
Cumulative translation differences (Note L)
Reserve for periodic repairs (Note O)
Accrued vacation pay (Note P)
Customer loyalty programmes (Note P)
OthersTotal(3,747)(1,176)
5,775
176
(339)
3,850
1,017
(1,417)(1,245)
175
3,069

84

(3) Reconciliation of equity at 31 March 2009
(Millions of Yen)
Japanese GAAP

Japanese

GAAP

Reclassi- Adjustfications ments

IFRSs

Notes

ASSETSIFRSs
ASSETSNON-CURRENT ASSETS:
Property, plant and equipment-net
Goodwill
Other intangible assets
Investment securities

NON-CURRENT ASSETS:
129,317
22,15011,328(1,126)
1,156(3,122)(11,328)

2,307
1,537
200

130,498
2,693
19,228

A
B,C
B,C
D,E

Property, plant and equipment-net
Goodwill
Other intangible assets

1,314

Other non-current assets
Allowance for doubtful accounts
Deferred tax assets

7,741
(548)
36,643

7,778
9,115(4,147)
548
6,369

(7)

9,092
9,115
3,587

Investments in associates
Long-term financial assets
Other non-current assets

4,176

47,188

D
E
C,E
E
F

Total non-current assets
CURRENT ASSETS:
Inventories
Trade and notes receivables
Deferred tax assets

206,631

5,243

9,527

221,401

71,257
82,875
6,369

(135)
(268)

71,10881,685

Other current assets

12,107(14)(922)(6,369)6,899
2,363(4,396)

Allowance for doubtful accounts(2,683)

2,683

Cash and deposits

214,541(6,613)

6,899
2,363
7,711

G
H, I
F
E,I,J
I
H,I

207,928

1,126
384,466

TOTAL ASSETS

591,097(5,243)

Total non-current assets:
CURRENT ASSETS:
Inventories
Trade and other receivables
Other short-term financial assets
Income tax receivables
Other current assets

HE,J

377,694
Total current assets

Deferred tax assets

1,126

Cash and cash equivalents
Sub total

A

Assets held for sale(403)

378,820

Total current assets

9,124

600,221

TOTAL ASSETS

85

(Millions of Yen)
Japanese GAAP

LIABILITIES AND EQUITYEQUITY:
Share capital
Capital reserves
Treasury shares
Stock subscription rights

Retained earnings
Unrealised profit (loss) on
translation adjustments and others

Japanese

GAAP

Reclassi- Adjustfications
ments

IFRSs

6,264

6,264

15,899(7,985)939

15,899(7,985)368,109(46,974)(939)(3,803)4,742

500
10,090(5,632)(3,303)382,941(52,606)

Notes

LIABILITIES AND EQUITYEQUITY:
Share capital
Capital reserves
Treasury shares
K
K, P
K,L,P
L

341,210
Minority interests

Total equity

1,758
338,010

16
4,974

1,774
342,984

10,968(9,689)284

613

111,554

421

1,522
(999)

NON-CURRENT LIABILITIES:

Bonds
Long-term bank loans

Retirement benefits obligation
Reserve for periodic repairs
Other non-current liabilities
Total non-current liabilities
CURRENT LIABILITIES:
Short-term bank loans
Current portion of long-term bankloans
Commercial paper

Trade and notes payables

Income tax payables
Accrued bonus, Allowance for
product’s warranty and Accrued
bonus for executives
Accrued expenses
Other current liabilities
Total current liabilities
Total liabilities
Total equity and liabilities

99,973
9,689

999
2,947
122,097(2,158)
172
(2)

2,145
4,402

46,448(4,402)

41,97829,557(41,978)
17,146
150

7,273
5,599

(4,805)

17,884
22,152130,990(17,884)
5,327
2

M, N
M

284

8,489

8,489
1,943

N
N
F,M,N
F

(116)
1,020

789
56
123,115295

48,888(621)

46,082
150

M
O
E,O

7,273
794

N,O

3,456
3,130

30,935
134,122

253,087

4,150

257,237

591,097

9,124

600,221

86

IFRSs

M
M

O
E,N,O

Other capital reserves
Retained earnings
Accumulated othercomprehensive income/(loss)
Equity attributable to owners of
the Company
Minority interests
Total equity
NON-CURRENT LIABILITIES:Interest-bearing long-term debt
Other long-term financial
liabilities
Retirement benefits obligation
Other provisions
Other non-current liabilities
Deferred tax liabilities
Total non-current liabilities
CURRENT LIABILITIES:Interest-bearing short-term debt

Trade and other payables
Other short-term financial
liabilities
Income tax payables
Other provisions

Other current liabilities
Total current liabilities
Total liabilities
Total equity and liabilities

(4) Notes to the reconciliation of equity at 31 March 2009
The following are notes to the reconciliation;
A. Property, plant and equipment-net, and Assets held for sale
• Reclassifications: Assets held for sale of 1,126 million yen as property, plant and equipment-net under Japanese
GAAP were reclassified and presented as assets held for sale under IFRSs.
• Adjustments: Lease expense under finance lease of 600 million yen, real estate acquisition tax of 253 million yen andsite restoration costs relating to asset retirement obligations of 325 million yen expensed under Japanese GAAP arecapitalised under IFRSs. The net carrying amount of property, plant and equipment-net has increased by 1,294 million yen
as a result of IFRSs implementation review on depreciation method and estimated useful lives of property, plant andequipment. In addition, the net carrying value of property, plant and equipment-net in the amount of 180 million yen has
decreased due to the increase in depreciation from applying component accounting under IFRSs.
B. Goodwill and Other intangible assets• Reclassifications: Goodwill included in intangible assets under Japanese GAAP of 1,156 million yen was reclassified
and presented as goodwill under IFRSs.
• Adjustments: Amortisation of goodwill of 2,555 million yen under Japanese GAAP was reversed under IFRSs as
goodwill amortisation is not allowed under IFRSs. The amount of goodwill of 687 million yen has decreased to adjust
impairment losses incurred under Japanese GAAP. In addition, goodwill has decreased under IFRSs by 331 million yen as
the goodwill denominated in foreign currency was translated using foreign exchange rate at the reporting date.
C. Goodwill, Other intangible assets and Other non-current assets• Reclassifications: Goodwill of 1,156 million yen included in intangible assets under Japanese GAAP were reclassified
as goodwill under IFRSs, and leasehold rights of 1,966 million yen included in other intangible assets under Japanese
GAAP were reclassified as and included in other non-current assets as long-term prepaid expenses under IFRSs.
• Adjustments: Development costs expensed as incurred under Japanese GAAP but meet the asset recognition
conditions under IFRSs are recognised as intangible assets.
D. Investments in associates• Reclassifications: Investments in associates of 7,778 million yen included in investment securities under Japanese
GAAP are separately disclosed under IFRSs.
• Adjustments: Amortised cost under Japanese GAAP on goodwill relating to investments in associates has been
reversed due to goodwill not being amortised under IFRSs, and negative goodwill was recognised as income at one-time
for the period. As a result, investments in associates have increased by 1,314 million yen.
E. Long-tem financial assets, Other non-current assets, Other short-term financial assets, Cash and cash equivalents,
Other short-term financial liabilities and Other current liabilities• Reclassifications: Long-term deposits of 110 million yen, lease deposits of 3,664 million yen, non-current otherreceivables of 756 million yen and non-current loans receivable of 638 million yen collectively included in othernon-current assets under Japanese GAAP were reclassified as long-term financial assets under IFRSs. Available-for-salefinancial assets of 3,550 million yen included in investment securities under Japanese GAAP were reclassified as
long-term financial assets under IFRSs. The allowance for doubtful accounts of 548 million yen separately disclosed underJapanese GAAP was deducted from long-term financial assets under IFRSs. Time deposits with maturities over threemonths of 6,613 million yen included in cash and deposits, short-term loans receivable of 210 million yen and derivative
assets of 76 million yen included in other current assets, collectively under Japanese GAAP, were reclassified as othershort-term financial assets under IFRSs. Short-term derivative liabilities of 150 million yen included in other current
liabilities under Japanese GAAP were reclassified as other short-term financial liabilities under IFRSs.
F. Deferred tax assets and liabilities, and Other non-current liabilities• Reclassifications: Deferred tax assets of 6,369 million yen that were separately disclosed as current assets underJapanese GAAP were reclassified as non-current deferred tax assets under IFRSs. In addition, non-current deferred tax
liabilities included in other non-current liabilities under Japanese GAAP are disclosed separately under IFRSs.
• Adjustments: Deferred tax assets have increased by 1,257 million yen under IFRSs as deferred tax assets on
unrealised profits were calculated using different tax rate applicable under Japanese GAAP and IFRSs. There was a further
increase in deferred tax assets 2,919 million yen under IFRSs as a result of the re-examination of recoverability of alldeferred tax assets.

87

G. Inventories• Adjustments: Due to the changes in revenue recognition methodologies (see H. “Trade and other receivables, andOther current assets” below), inventories have increased by 358 million yen under IFRSs. In addition, inventories havedecreased by 493 million yen due to changes in the depreciation method for property, plant and equipment.
H. Trade and other receivables, and Other current assets• Reclassifications: Allowance for doubtful accounts which was separately disclosed in the amount of 2,683 million yen
and other accounts receivables of 1,761 million yen included in other current assets under Japanese GAAP were deductedfrom and reclassified as, respectively, trade and other receivables under IFRSs.
• Adjustments: Accounts receivables decreased by 449 million yen as a result of the recognition of revenue from salesof goods under IFRSs when significant risks and rewards of ownership have been transferred, whereas under Japanese
GAAP revenue from sales of goods was mainly recognised upon shipment. Notes receivable transferred with recourse
obligation of 181 million yen are recognised until recourse obligation is discharged under IFRSs whereas they were
derecognised upon transfer under Japanese GAAP.
I.
Trade and other receivables, Other short-term financial assets, Income tax receivables and Other current assets• Reclassifications: Income tax receivables of 2,363 million yen included in other current assets under Japanese GAAP
was separately presented under IFRSs. Other accounts receivables of 1,761 million yen included in other current assets
under Japanese GAAP were reclassified as trade and other receivables under IFRSs. Short-term loans receivable of 210
million yen and derivative assets of 76 million yen included in other current assets under Japanese GAAP were reclassified
as other short-term financial assets under IFRSs.
J.
Other short-term financial assets and, Cash and cash equivalents• Reclassifications: Time deposits of 6,613 million yen with maturities over three-months and included in cash anddeposits under Japanese GAAP were reclassified as other short-term financial assets under IFRSs.
K. Other capital reserves and Retained earnings• Reclassifications: Stock subscription rights separately presented of 939 million yen under Japanese GAAP werereclassified as other capital reserves under IFRSs. The loss on disposal of treasury shares of 4,742 million yen charged toretained earnings under Japanese GAAP were reclassified as other capital reserves under IFRSs following Group’s
accounting policy.
• Adjustments: Under Japanese GAAP, stock subscription rights were recognised for stock options granted after thedate the Company Act in Japan was effective whereas under IFRSs, stock options that were granted after 7 November
2002 and vested on or after 1 April 2008 are recognised as a result of applying exemptions for first-time adopters. As aresult, capital reserves have increased by 500 million yen under IFRSs.
L. Retained earnings and Accumulated other comprehensive income• Adjustments: Upon first-time adoption of IFRSs, cumulative translation differences at overseas subsidiaries of 3,850
million yen were considered to be zero. Cumulative translation differences of 1,782 million yen were recognised under
IFRSs, because of the adjustment on disposal and liquidation of some overseas subsidiaries and the translation of goodwill
and financial numbers of overseas branches.
Interest-bearing long-term and short-term debt, and Other non-current liabilities
M.
• Reclassifications: Long-term bank loans of 9,689 million yen and lease obligations of 1,279 million yen included inother non-current liabilities under Japanese GAAP were reclassified as interest-bearing long-term debt under IFRSs. The
current portion of long-term bank loans of 4,402 million yen and commercial paper of 41,978 million yen under Japanese
GAAP were reclassified as interest-bearing short-term debt under IFRSs.
• Adjustments: As a result of finance leases capitalised under IFRSs, minimum lease payments of 841 million yen forthe lease contract which commenced before 1 April 2008 are recognised as interest-bearing long-term debt and 114 million
yen as interest-bearing short-term debt, whereas lease payments were expensed under Japanese GAAP. Notes receivabletransferred with recourse obligation was derecognised under Japanese GAAP, whereas the related liability of 181 million
yen was recognised under IFRSs.

88

N. Interest-bearing long-term debt, Other provisions (non-current and current liabilities), Other non-current liabilities
and Other current liabilities• Reclassifications: Lease obligations of 1,279 million yen and asset retirement obligations of foreign subsidiaries of
421 million yen included in other non-current liabilities under Japanese GAAP, were reclassified to interest-bearing
long-term debt and other provisions (non-current liability) , respectively under IFRSs.
Accrued bonus of 4,754 million yen which was classified separately under Japanese GAAP has been reclassified to othercurrent liabilities under IFRSs.
• Adjustments: Asset retirement obligations provision of 1,522 million yen not recognised under Japanese GAAP wasrecognised as other provisions under IFRSs. The reserve for periodic repairs of 999 million yen which was presented
under Japanese GAAP was not recognised under IFRSs.
O. Trade and other payables, Other short-term financial liabilities, Other provisions (current liabilities) and Other
current liabilities• Reclassifications: Other payables of 17,146 million yen and short-term derivative liabilities of 150 million yen
included in other current liabilities under Japanese GAAP, were reclassified as trade and other payables, and othershort-term financial liabilities, respectively. Accrued expenses of 17,884 million yen and accrued bonus of 4,754 million
yen which were separately disclosed under Japanese GAAP have been included in other current liabilities under IFRSs.
• Adjustments: Under Japanese GAAP, liability relating to the future expected usage of the Company’s customer
loyalty programmes of 749 million yen was recognised and included in other current liabilities (other payables) in theamount of the cost of the goods corresponding to the points of programmes. Under IFRSs, the customer loyalty
programmes were identified as component of revenue and other current liabilities (deferred revenue) of 2,011 million yen
has been recognised. Accrued vacation pay of 1,445 million yen, which was not recognised under Japanese GAAP, wasaccrued and included in other current liabilities under IFRSs.
P.
Other capital reserves and Retained earnings• Reclassifications: Loss on disposal of treasury shares of 4,742 million yen included in retained earnings underJapanese GAAP was reclassified as other capital reserves under IFRSs.
• Adjustments: The main reconciliation items were as follows. The amounts below were adjustments to retained
earnings through consolidated statement of comprehensive income and do not always equal to the amounts ofreconciliation to consolidated statement of financial position to which the Notes in the chart below refer.
Amount (Millions of Yen)
Property, plant and equipment related (Note A,M)
Asset retirement obligations reserve (Note A,N)
Reversal of goodwill amortisation (Note B,D)
Goodwill impairment (Note B)
Deferred taxes（Note F）
Inventories related（Note G）
Stock option（Note K）
Cumulative translation differences（Note L）
Reserve for periodic repairs (Note N)
Accrued vacation pay (Note O)
Customer loyalty programmes (Note O)
OthersTotal

999(1,197)
3,869
(687)
4,477
(135)
(500)
4,857
999
(1,445)(1,262)
115
10,09089

(5) Reconciliation of profit for the year ended 31 March 2009
(Millions of Yen)
Japanese GAAP
SalesInterest income
Gain on sales of investment
securities
Equity in earnings (losses) of
associated companies
Other non-operating income
Gain on sales of property, plantand equipment
Reversal of allowance for
doubtful accounts
Reversal of allowance for
periodic repairs
Commission for prior years
Gain on disposal of business
Other extraordinary income
Total revenue/income
Cost of sales
Selling, general andadministrative expenses

Japanese

GAAP454,195
4,018
9,705

Reclassifications
(64)
9,780
(9,705)(315)

Adjust-m
ents
(261)
(228)

(75)
(0)

1,314
567

453,795
13,570

A
B
B

Sales
Finance income

999C

11,145

D
D

Share of profit ofassociates
Other income

94

(94)

D

41

(41)

D

3,200
886
1,010
478,964
264,289(3,200)(886)(1,010)(752)(264,289)

DD
D

130,811(130,811)(95)

479,509

6,396

(46)

108,223E

107,601

205

(548)

107,258

E,G

49,080(2,283)(1)

46,796

E,H,K

12,831
13,281

(437)

(3)
(69)

12,828
12,775E
E,I(1,014)

(55)
(185)

26,40273,382

E,J
E,K
H

620

26,45774,581
(620)

545

(545)

K

603

(603)

K

6,743

(6,743)

G

65
1,666
(7,152)
2,348
2,328

(65)
(1,666)7,152
2,350(2,328)K
K
KL
L

30,4591,580
434,905
44,05919,253(1,580)(1,092)
340
340

95

4,793

375

(67)

30,767(3,219)
4,611
338

(974)
879

429,62049,88919,931
29,958

(879)

(879)

(304)

3

29,079(301)

25,1104,270

29,38090

IFRSs

Total revenue
E,G,H
J,K
E,G,H
J,K
E,F

(160)

108,269

Minority interests in net loss of
consolidated subsidiaries
Profit for the year

Notes

4,833
(365)

1,392

(20)

IFRSs

5,765
365

6,556

Depreciation and amortisation
included in non-operating
expenses
Loss on sales of property, plantand equipment
Loss on disposal of property,
plant and equipment
Additional retirement benefits
to employees
Maintenance of environment
Other non-operating expenses
Foreign exchange gains
Interest expenses
Loss on write-down ofinvestment securities
Impairment losses
Other extraordinary losses
Total expenses
Profit before income taxes
Income tax expense

Discontinued
operations
(O)

M
K

N

Changes in inventories
of goods, products andwork in progress
Raw materials andconsumables used
Employee benefits
expenseDepreciation andamortisation
Subcontracting cost
Advertising andpromotion expense
Commission expense
Other expenses

Finance costs

Impairment losses
Total expenses
Profit before tax
Income tax expense
Profit for the year fromcontinuing operations
Profit/(loss) for the year
from discontinued
operations
Profit for the year
Profit attributable tominority interests
Profit attributable toowners of the Company

The following are notes to the reconciliation;
A. Sales• Reclassifications: Sales discounts were included in other non-operating expenses under Japanese GAAP whereas sales
discounts are treated as a reduction in sales under IFRSs.
• Adjustments: Revenue from sales of goods was mainly recognised upon shipment under Japanese GAAP whereas
under IFRSs, revenue from sales of goods is recognised when significant risks and rewards of ownership have transferredto the customer. Consequently, sales have decreased by 202 million yen under IFRSs. Under Japanese GAAP, costs
relating to the future expected usage of the Company’s customer loyalty programmes were recognised as sales expense(promotion cost) whereas such customer loyalty programmes are identified as individual components of revenue under
IFRSs. Consequently, sales have decreased by 59 million yen under IFRSs.
B.
Finance income• Reclassifications: Gain on sales of investment securities which was separately presented in the amount of 9,705
million yen under Japanese GAAP was included in finance income under IFRSs.
• Adjustments: As all cumulative translation differences of overseas subsidiaries as of the transition date to IFRSs wasconsidered to be zero, carrying amounts of associate investments between Japanese GAAP and IFRSs were different.
Consequently, financial income on sales of associate investments has decreased by 228 million yen.
C.
Share of profit of associates• Adjustments: Amortised cost under Japanese GAAP on goodwill relating to investments in associates has been
reversed due to goodwill not being amortised under IFRSs, and negative goodwill was required a one-time adjustment toincome under IFRSs. Consequently, shares of profit of associates have increased by 1,314 million yen.
D. Other income• Reclassifications: The following income items presented separately under Japanese GAAP were included in otherincome under IFRSs;¾ Other non-operating income¾ Gain on sales of property, plant and equipment¾ Commission for prior years¾ Gain on disposal of business¾ Other extraordinary income• Adjustment: As a result of the change in depreciation method for property, plant and equipment, other income (gainon sales of property, plant and equipment) has increased by 236 million yen.
E.
Changes in inventories of goods, products and work in progress, Raw materials and consumables used, Employee
benefits expense, Depreciation and amortisation, Subcontracting cost, Advertising and promotion expense, Commission
expense and Other expenses• Reclassification: Cost of sales under Japanese GAAP was reallocated to the following line items under IFRSs;¾ Changes in inventories of goods, products and work in progress, 6,556 million yen.
¾ Raw materials and consumables used, 108,331 million yen¾ Employee benefits expense, 48,614 million yen¾ Depreciation and amortisation, 38,460 million yen¾ Subcontracting cost, 12,826 million yen¾ Commission expense, 7,547 million yen¾ Other expenses, 41,955 million yen
Selling, general and administrative expenses under Japanese GAAP were reallocated to the following line items;¾ Employee benefits expense, 52,244 million yen¾ Depreciation and amortisation, 10,000 million yen¾ Advertising and promotion expense, 13,241 million yen¾ Commission expense, 18,910 yen¾ Other expenses, 36,416 million yen
F. Changes in inventories of goods, products and work in progress• Adjustments: These changes were impacted by the change in revenue recognition policy and depreciation method forproperty, plant and equipment.

91

G. Employee benefits expense• Reclassifications: The following items presented separately under Japanese GAAP are included in employee benefits
expense under IFRSs;¾
48,614 million yen, a part of cost of sales¾
52,244 million yen, a part of selling, general and administrative expenses¾
6,743 million yen, additional retirement benefits to employees• Adjustments: Employee benefits expense has increased due to the recognition of accrued vacation pay and additional
share-based payments under IFRSs.
H. Depreciation and amortisation• Reclassifications: The following items presented separately under Japanese GAAP are included in depreciation andamortisation under IFRSs;¾
38,460 million yen, a part of cost of sales¾
10,000 million yen, a part of selling, general and administrative expenses¾
620 million yen, non-operating expenses• Adjustments: As a result of changes in depreciation methods and estimated useful lives of property, plant andequipment, depreciation and amortisation decreased by 2,963 million yen. Depreciation on capitalised finance lease assetsof 632 million yen was recognised under IFRSs whereas lease expense under finance lease was expensed under Japanese
GAAP.
I.
Advertising and promotion expense• Adjustments: Under Japanese GAAP, costs relating to the future expected usage of the Company’s customer loyalty
programmes were recognised as sales expense (promotion cost) whereas, under IFRSs, the cost of customer loyalty
programmes are identified as individual component of revenue. Consequently, advertising and promotion expense of 437
million yen was reversed.
J.
•

Commission expense
Reclassifications: The following items under Japanese GAAP were presented as commission under IFRSs;¾
7,547 million yen, a part of cost of sales¾
18,910 million yen, a part of selling, general and administrative expenses

K. Depreciation and amortisation, and Other expenses• Reclassifications: The following items under Japanese GAAP were presented as other expenses under IFRSs;¾
Loss on sale of property, plant and equipment¾
Loss on disposal of property, plant and equipment¾
Maintenance of environment¾
Other non-operating expenses¾
Foreign exchange gain/loss¾
Other extraordinary losses
In addition, following items under Japanese GAAP were presented as other expenses under IFRSs;¾
41,955 million yen, a part of cost of sales¾
36,416 million yen, a part of selling, general and administrative expenses• Adjustments: Expenses for lease contracts which commenced before 1 April 2008 under Japanese GAAP werereclassified as depreciation and amortisation under IFRSs in the amount of 692 million yen. Amortised goodwill underJapanese GAAP was reversed and as a result, other expenses have decreased by 966 million yen under IFRSs. Due to theadjustment in carrying amount of disposed property, plant and equipment, and intangible assets, other expenses havedecreased by 922 million yen under IFRSs. In addition, other expenses under IFRSs have increased by 605 million yen
due to the adjustment to the cumulative translation differences relating to the disposal or liquidation of overseas
subsidiaries and the translation of goodwill or financial numbers of overseas branches. In addition, under Japanese GAAP
cost relating to the future expected usage of the Company’s customer loyalty programmes was recognised as sales andgeneral administrative expense whereas under IFRSs such programmes are identified as a component of revenue and otherexpenses increased by 396 million yen.
L. Finance costs• Reclassifications: Loss on write-down of investment securities of 2,328 million yen under Japanese GAAP werereclassified as finance costs under IFRSs.
• Adjustments: Bond issuance costs expensed at issuance under Japanese GAAP, were capitalised and amortised as
financial costs under IFRSs. Interest on capitalised finance lease transactions which was included in lease expense underJapanese GAAP and interest on asset retirement obligations were recognised as finance costs.
92

M. Impairment losses• Adjustments: Impairment losses have increased by 375 million yen due to the different treatment in goodwill
amortisation and in depreciation methods of property, plant and equipment under IFRSs.
N. Income tax expense• Reclassifications: A part of enterprise tax of 340 million yen included in selling, general and administrative expenses
under Japanese GAAP was reclassified as income tax expenses under IFRSs.
• Adjustments: Income tax expenses increased by 269 million yen under IFRSs since unrealised intercompany profits
were calculated using different tax rates applicable under Japanese GAAP and IFRSs. Income tax expenses increased by afurther 69 million yen as a result of re-examination of recoverability of all deferred tax assets under IFRSs.
O. Discontinued operations• In December 2008, the Board of Directors of the Company decided to discontinue the Crystal Division, and thebusiness was discontinued on 31 March 2009.
(6) Explanation of material adjustments to the cash flow statements for 31 March 2009
There was no material difference between the consolidated statement of cash flows presented under IFRSs and theconsolidated statement of cash flows presented under Japanese GAAP.

93

(7) Reconciliation of equity at 31 March 2010
(Millions of Yen)
Japanese GAAP

Japanese

GAAP

Reclassi- Adjustfications ments

IFRSs

Notes

ASSETSIFRSs
ASSETSNON-CURRENT ASSETS:

NON-CURRENT ASSETS:

Property, plant and equipment-net

119,190
24,56911,055(325)
3,530(4,916)(11,055)

3,338
1,954
(1,871)

122,203
5,484
17,782

A
B,C
B,C
D,E

Property, plant and equipment-net
Goodwill
Other intangible assets

Intangible assets
Investment securities

1,525

Other non-current assets
Allowance for doubtful accounts
Deferred tax assets

17,522(504)
32,657

7,689
18,809(14,560)
504
5,973

9,214
18,8092,962

Investments in associates
Long-term financial assets
Other non-current assets

6,054

44,684

D
E
C,E
E
F

Total non-current assets:
CURRENT ASSETS:
Inventories
Trade and notes receivables
Deferred tax assets

204,489

5,649

11,000221,138

61,466
93,612
5,973

(5)
886
(5,973)
5,586
2,326(5,249)1,825(5,370)

(247)
(200)

61,21494,298Other current assets
Allowance for doubtful accounts
Cash and deposits

Total current assets
TOTAL ASSETS

12,714(1,825)
173,308345,248549,737325(5,649)

5,586
2,326
7,465

(447)
10,553

94

167,938
338,827
325
339,152
560,290

G
H,I
F
E,I,J
I
H,I
H
E,J
A

Deferred tax assets
Total non-current assets:
CURRENT ASSETS:
Inventories
Trade and other receivables
Other short-term financial assets
Income tax receivables
Other current assets
Cash and cash equivalents
Sub total
Assets held for sale
Total current assets
TOTAL ASSETS

(Millions of Yen)
Japanese GAAP

Japanese

GAAP

Reclassifications

Adjustments

IFRSs

Notes

LIABILITIES AND EQUITYEQUITY:
Share capital
Capital reserves
Treasury shares
Stock subscription rights
Retained earnings
Unrealised profit (loss) on
translation adjustments and others

IFRSs
LIABILITIES AND EQUITY

6,264
15,899(11,010)1,231
377,727(39,828)

EQUITY:
Share capital
Capital reserves
Treasury shares

6,264
15,899(11,010)(1,231)(3,632)
4,863

618
13,429(6,775)(3,014)
396,019(46,603)

K
K,Q
K,L,Q
L

357,555
Minority interests
Total equity
NON-CURRENT LIABILITIES:
Bonds
Long-term bank loans

1,189
351,472

Retirement benefits obligation

8,244

Reserve for periodic repairs
Other non-current liabilities

918
3,304

99,979
1,830

5
7,277

1,194
358,749

139

102,995

2,877(1,830)
7
440

7
8,186
1,718

(58)
1,278
(918)
6
(114)
333

1,703
10
114,619

M,O
M
N
O
O
F,M,O
F

Total non-current liabilities
CURRENT LIABILITIES:
Short-term bank loans
Current portion of long-term bankloans
Trade and notes payables

114,275(1,607)
124
11

334
3,278

3,419
(3,278)

537

4,290

M
M

33,12814,813
385

(662)

P
E,P

Income tax payables
Accrued bonus, Allowance for
product’s warranty and Accrued
bonus for executives
Accrued expenses
Other current liabilities
Total current liabilities
Total liabilities
Total equity and liabilities

4,469
5,597

(4,717)24

47,279
385
4,469
904

3,044
2,943
3,276
10,55329,59586,922201,541
560,290

16,152
21,032
83,990198,265549,737(16,152)
5,519
(11)

95

O,P

P
E,O,P

Other capital reserves
Retained earnings
Accumulated other comprehensive
income/(loss)
Equity attribute to equity holders of
the parent
Minority interests
Total equity
NON-CURRENT LIABILITIES:Interest-bearing long-term debt
Other long-term financial liabilities
Retirement benefits obligation
Other provisions
Other non-current liabilities
Deferred tax liabilities
Total non-current liabilities
CURRENT LIABILITIES:Interest-bearing short-term debt

Trade and other payables
Other short-term financial liabilities
Income tax payables
Other provisions

Other current liabilities
Total current liabilities
Total liabilities
Total equity and liabilities

(8) Notes to the reconciliation of equity at 31 March, 2010
The following are notes to the reconciliation;
A. Property, plant and equipment-net, and Assets held for sale
• Reclassifications: Assets held for sale of 325million yen as property, plant and equipment-net under Japanese GAAP
were reclassified and presented as assets held for sale under IFRSs.
• Adjustment: Lease expense under finance lease of 263 million yen, real estate acquisition tax of 222 million yen andsite restoration costs relating to asset retirement obligations of 454 million yen expensed under Japanese GAAP arecapitalised under IFRSs. The carrying amount of property, plant and equipment-net has increased by 2,416 million yen asa result of IFRSs implementation review on depreciation method and estimated useful lives of property, plant andequipment. In addition, the net carrying value of property, plant and equipment-net in the amount of 17 million yen has
decreased due to the increase in depreciation from applying component accounting under IFRSs.
B. Goodwill and Other intangible assets• Reclassifications: Goodwill included in intangible assets under Japanese GAAP of 3,530 million yen was reclassified
and presented as goodwill under IFRSs.
• Adjustments: Amortisation of goodwill of 2,232 million yen under Japanese GAAP was reversed under IFRSs as
goodwill amortisation is not allowed under IFRSs. In addition, goodwill has decreased under IFRSs by 278 million yen as
the goodwill denominated in foreign currency was translated using foreign exchange rate at the reporting date.
C. Goodwill, Other intangible assets and Other non-current assets• Reclassifications: Goodwill of 3,530 million yen included in intangible assets under Japanese GAAP were reclassified
as goodwill under IFRSs, and leasehold rights of 1,386 million yen included in other intangible assets under Japanese
GAAP were reclassified as and included in other non-current assets as long-term prepaid expenses under IFRSs.
• Adjustments: Loss on disposal of other intangible assets under Japanese GAAP of 1,874 million yen recognised
during the year ending 31 March 2011, was recognised during the year ended 31 March 2010 as an adjusting subsequent
event under IFRSs.
D. Investments in associates• Reclassifications: Investments in associates of 7,689 million yen included in investment securities under Japanese
GAAP are separately disclosed under IFRSs.
• Adjustments: Amortised cost under Japanese GAAP on goodwill relating to investments in associates has been
reversed due to goodwill not being amortised under IFRSs, and negative goodwill was recognised as income at one-time
for previous period. As a result, investments in associates have increased by 1,525 million yen.
E. Long-tem financial assets, Other non-current assets, Other short-term financial assets, Cash and cash equivalents,
Other short-term financial liabilities and Other current liabilities• Reclassifications: Long-term deposits of 10,115 million yen, lease deposits of 3,896 million yen, non-current otherreceivables of 645 million yen and non-current loans receivable of 406 million yen collectively included in othernon-current assets under Japanese GAAP were reclassified as long-term financial assets under IFRSs. Available-for-salefinancial assets of 3,366 million yen included in investment securities under Japanese GAAP were reclassified as
long-term financial assets under IFRSs. The allowance for doubtful accounts of 504 million yen separately disclosed underJapanese GAAP was deducted from long-term financial assets under IFRSs. Time deposits with maturities over threemonths of 5,370 million yen included in cash and deposits, short-term loans receivable of 216 million yen included inother current assets, collectively under Japanese GAAP, were reclassified as other short-term financial assets under IFRSs.
Short-term derivative liabilities of 385 million yen included in other current liabilities under Japanese GAAP werereclassified as other short-term financial liabilities under IFRSs.

96

F. Deferred tax assets and liabilities, and Other non-current liabilities• Reclassifications: Deferred tax assets of 5,973 million yen that were separately disclosed as current assets underJapanese GAAP were reclassified as non-current deferred tax assets under IFRSs. In addition, non-current deferred tax
liabilities included in other non-current liabilities under Japanese GAAP are disclosed separately under IFRSs.
• Adjustments: Deferred tax assets have increased by 1,423 million yen under IFRSs as deferred tax assets on
unrealised profits were calculated using different tax rate applicable under Japanese GAAP and IFRSs. There was a further
increase in deferred tax assets in 4,032 million yen under IFRSs as a result of the re-examination of recoverability of alldeferred tax assets. In addition, deferred tax assets that are recognised during the year ending 31 March 2011 underJapanese GAAP in the amount of 599 million yen were recognised in the year ended 31 March 2010 as an adjusting
subsequent event under IFRSs.
G. Inventories• Adjustments: Due to the changes in revenue recognition methodologies (see H. “Trade and other receivables, andOther current assets” below), inventories have increased by 362 million yen under IFRSs. In addition, inventories havedecreased by 609 million yen due to the changes in the depreciation method for property, plant and equipment.
H. Trade and other receivables, and Other current assets• Reclassifications: Allowance for doubtful accounts which was separately disclosed in the amount of 1,825 million yen
and other accounts receivables of 2,711 million yen included in other current assets under Japanese GAAP were deductedfrom and reclassified as, respectively, trade and other receivables under IFRSs.
• Adjustments: Accounts receivables decreased by 504 million yen as a result of the recognition of revenue from salesof goods under IFRSs when significant risks and rewards of ownership have been transferred whereas under Japanese
GAAP revenue from sales of goods was mainly recognised upon shipment.
• Notes receivable transferred with recourse obligation of 428 million yen are recognised until recourse obligation isdischarged under IFRSs whereas they were derecognised upon transfer under Japanese GAAP.
I. Trade and other receivables, Other short-term financial assets, Income tax receivables and Other current assets• Reclassifications: Income tax receivables of 2,326 million yen included in other current assets under Japanese GAAP
was separately presented under IFRSs. Other accounts receivables of 2,711 million yen included in other current assets
under Japanese GAAP were reclassified as trade and other receivables under IFRSs. Short-term loans receivable of 216
million yen included in other current assets under Japanese GAAP were reclassified as other short-term financial assets
under IFRSs.
J. Other short-term financial assets and, Cash and cash equivalents• Reclassifications: Time deposits of 5,370 million yen with maturities over three-months and included in cash anddeposits under Japanese GAAP were reclassified as other short-term financial assets under IFRSs
K. Other capital reserves and Retained earnings• Reclassifications: Stock subscription rights separately presented of 1,231 million yen under Japanese GAAP werereclassified as other capital reserves under IFRSs. The loss on disposal of treasury shares of 4,863 million yen charged toretained earnings under Japanese GAAP were reclassified as other capital reserves under IFRSs following Group’s
accounting policy.
• Adjustments: Under Japanese GAAP, stock subscription rights were recognised for stock options granted after thedate the Company Act in Japan was effective whereas under IFRSs, stock options that were granted after 7 November
2002 and vested on or after 1 April 2008 are recognised as a result of applying exemptions for first-time adopters. As aresult, capital reserves have increased by 618 million yen under IFRSs.
L.
Retained earnings and Accumulated other comprehensive income• Adjustments: Upon first-time adoption of IFRSs, cumulative translation differences at overseas subsidiaries of 3,850
million yen were considered to be zero. Cumulative translation differences of 2,925 million yen were recognised under
IFRSs, because of the adjustment on disposal and liquidation of some overseas subsidiaries and the translation of goodwill
and financial numbers of overseas branches.

97

M. Interest-bearing long-term and short-term debt, and Other non-current liabilities• Reclassifications: Long-term bank loans of 1,830 million yen and lease obligations of 1,047 million yen included inother non-current liabilities under Japanese GAAP were reclassified as interest-bearing long-term debt under IFRSs. The
current portion of long-term bank loans of 3,278 million yen under Japanese GAAP were reclassified as interest-bearing
short-term debt under IFRSs.
• Adjustments: As a result of finance leases capitalised under IFRSs, minimum lease payments of 326 million yen forthe lease contract which commenced before 1 April 2008 are recognised as interest-bearing long-term debt and 109
million yen as interest-bearing short-term debt, whereas lease payments were expensed under Japanese GAAP. Notes
receivable transferred with recourse obligation was derecognised under Japanese GAAP, whereas the related liability of
428 million yen was recognised under IFRSs.
N. Retirement benefits obligation• Adjustments: Past service cost derived from a change of plan in a division in the Company with defined benefit plans
was recognised to profit due to its benefit vested under IFRS whereas it was recognised over certain period under Japanese
GAAP.
O. Interest-bearing long-term debt, Other provisions (non-current and current liabilities), Other non-current liabilities
and Other current liabilities• Reclassifications: Lease obligations of 1,047 million yen and asset retirement obligations of foreign subsidiaries of
440 million yen included in other non-current liabilities under Japanese GAAP, were reclassified to interest-bearing
long-term debt and other provisions (non-current liability) , respectively under IFRSs.
Accrued bonus of 4,717 million yen which was classified separately under Japanese GAAP has been reclassified to othercurrent liabilities under IFRSs.
• Adjustments: Asset retirement obligations provision of 1,278 million yen not recognised under Japanese GAAP wasrecognised as other provisions under IFRSs. The reserve for periodic repairs of 918 million yen which was presented
under Japanese GAAP was not recognised under IFRSs.
P.
Trade and other payables, Other short-term financial liabilities, Other provisions (current liabilities) and Other
current liabilities• Reclassifications: Other payables of 14,813 million yen and short-term derivative liabilities of 385 million yen
included in other current liabilities under Japanese GAAP, were reclassified as trade and other payables, and othershort-term financial liabilities, respectively. Accrued expenses of 16,152 million yen and accrued bonus of 4,717 million
yen which were separately disclosed under Japanese GAAP have been included in other current liabilities under IFRSs.
• Adjustments: Under Japanese GAAP, liability relating to the future expected usage of the Company’s customer
loyalty programmes of 662 million yen was recognised and included in other current liabilities (other payables) in theamount of the cost of the goods corresponding to the points of programmes. Under IFRSs, the customer loyalty
programmes were identified as component of revenue and other current liabilities (deferred revenue) of 1,730 million yen
has been recognised. Accrued vacation pay of 1,314 million yen, which was not recognised under Japanese GAAP, wasaccrued and included in other current liabilities under IFRSs.
Q. Other capital reserves and Retained earnings• Reclassifications: Loss on disposal of treasury shares of 4,863 million yen included in retained earnings underJapanese GAAP was reclassified as other capital reserves under IFRSs.
• Adjustments: The main reconciliation items were as follows. The amounts below were adjustments to retained
earnings through consolidated statement of comprehensive income and do not always equal to the amounts ofreconciliation to consolidated statement of financial position to which the Notes in the chart below refers.
Amount (Millions of Yen)
Property, plant and equipment related (Note A, M)
Asset retirement obligations reserve (Note A, O)
Reversal of goodwill amortisation (Note B,D)
Subsequent event to adjust for the year ended 31 March 2010 (Note C, F)
Deferred taxes（Note F）
Inventories related (Note G）
Stock option（Note K）
Cumulative translation differences（Note L）
Reserve for periodic repairs (Note O)
Accrued vacation pay (Note P)
Customer loyalty programmes (Note P)
Others
Total

98

2,463
(848)
3,870
(1,997)
6,247
(247)
(618)
6,298
918
(1,314)(1,068)(275)
13,429(9) Reconciliation of profit for the year ended 31 March 2010
(Millions of Yen)
Japanese GAAP
SalesInterest income
Equity in earnings of associatedcompanies
Other non-operating income
Gain on sales of property, plantand equipment
Reversal of allowance for
doubtful accounts
Reversal of allowance for periodic
repairs
Commission for prior years
Other extraordinary income
Total revenue/income
Cost of sales

Sales and general administrative
expenses

Japanese

GAAP413,525
832
255

Reclassifications(25)
88

Adjustments
226

IFRSs

Notes

211

413,726
920
466

A
B
C

Sales
Finance income
Share of profit of associates

(116)

5,720

B, D
D

Other income

4,561
287

1,275
(287)

10

(10)

D

30

(30)

D

1,013
183
420,696
233,076(1,013)(183)(185)(233,076)

DD

116,121(116,121)

321

11,059132

93,801

Depreciation and amortisation
included in non-operating
expenses
Loss on sales of property, plantand equipment
Loss on disposal of property, plantand equipment
Additional retirement benefits toemployees
Maintenance of environment
Loss regarding Antimonopoly Act
Other non-operating expenses
Foreign exchange losses
Interest expenses
Loss on write-down of investment
securities
Impairment losses
Foreign withholding tax
Other extraordinary losses
Total expenses
Profit before income taxes
Income tax expense
Minority interests in net incomeof consolidated subsidiaries
Profit for the year

420,832

Total revenue

11,191

E, G,
H,
J, K
E, G,
H,
J, K
E, F

93,801

E
E, G
E, H,
K
E
E, I

93,06734,411

(145)
(457)

92,922
33,954

7,046
10,974

(326)

7,046
10,648(516)

21,991
93,992418

21,991
94,508
(418)

658

(658)

K

1,012

(1,012)

K

1,932(1,932)

G

1,883
1,447
1,568
6,489
2,206
587

(1,883)(1,447)(1,568)(6,489)
602
(587)

K
K
K
K
L
L

834
1,489
1,215
370,935
49,761
11,589

(1,489)(1,215)
(436)
251
251

88

2,896

IFRSs

E, J
E, K
H

834

Changes in inventories ofgoods, products and work inprogress
Raw materials andconsumables used
Employee benefits expense
Depreciation and amortisation
Subcontracting cost
Advertising and promotion
expenseCommission expense
Other expenses

Finance costs

Impairment losses
KK(1,224)
1,545(1,800)297

7369,275
51,557
10,04041,517304

37,875

3,338

41,21399

M

Total expenses
Profit before tax
Income tax expense
Profit for the year
Profit attributable to minority
interests
Profit attributable to owners of
the Company

The following are notes to the reconciliation;
A. Sales• Reclassifications: Sales discounts were included in other non-operating expenses under Japanese GAAP whereas sales
discounts are treated as a reduction in sales under IFRSs.
• Adjustments: Revenue from sales of goods was mainly recognised upon shipment under Japanese GAAP whereas
under IFRSs, revenue from sales of goods is recognised when significant risks and rewards of ownership have transferred
to customer. Consequently, sales have decreased by 56 million yen under IFRSs. Under Japanese GAAP, costs relating to
the future expected usage of the Company’s customer loyalty programmes were recognised as sales expense (promotioncost) whereas such customer loyalty programmes are identified as individual component of revenue under IFRSs.
Consequently, sales have increased by 282 million yen under IFRSs.
B.
Finance income• Reclassifications: Other non-operating income such as dividends received under Japanese GAAP was reclassified as
finance income under IFRSs.
C.
Share of profit of associates• Adjustments: Amortised cost under Japanese GAAP on goodwill relating to investments in associates has been
reversed due to goodwill not being amortised under IFRSs. Consequently, shares of profit of associates have increased by
211 million yen.
D. Other income• Reclassifications: The following income items presented separately under Japanese GAAP were included in otherincome under IFRSs;¾ Other non-operating income¾ Gain on sales of property, plant and equipment¾ Commission for prior years¾ Other extraordinary income• Adjustments: As a result of the change in depreciation method for property, plant and equipment, other income (gainon sales of property, plant and equipment) has decreased by 116 million yen.
E. Changes in inventories of goods, products and work in progress, Raw materials and consumables used, Employee
benefits expense, Depreciation and amortisation, Subcontracting cost, Advertising and promotion expense, Commission
expense and Other expenses• Reclassifications: Cost of sales under Japanese GAAP was reallocated to the following line items under IFRSs;¾ Changes in inventories of goods, products and work in progress, 11,059 million yen.
¾ Raw materials and consumables used, 93,865 million yen¾ Employee benefits expense, 40,820 million yen¾ Depreciation and amortisation, 27,012 million yen¾ Subcontracting cost, 7,041 million yen¾ Commission expense, 5,601 million yen¾ Other expenses, 47,678 million yen
Selling, general and administrative expenses under Japanese GAAP were reallocated to the following line items;¾ Employee benefits expense, 50,315 million yen¾ Depreciation and amortisation, 6,981 million yen¾ Advertising and promotion expense, 10,935 million yen¾ Commission expense, 16,390 million yen¾ Other expenses, 31,500 million yen
F. Changes in inventories of goods, products and work in progress• Adjustments: These changes were impacted by the change in revenue recognition policy and depreciation method forproperty, plant and equipment.

100

G. Employee benefits expense• Reclassifications: The following items presented separately under Japanese GAAP are included in employee benefits
expense under IFRSs;¾ 40,820 million yen, a part of cost of sales¾ 50,315 million yen, a part of selling, general and administrative expenses¾ 1,932 million yen, additional retirement benefits to employees• Adjustments: Employee benefits expense has increased due to the recognition of accrued vacation pay and additional
share-based payments under IFRSs. Past service cost derived from a change of plan in a division in the Company withdefined benefit plans was recognised to profit due to its benefit vested whereas it was recognised over certain period underJapanese GAAP.
H. Depreciation and amortisation• Reclassifications: The following items presented separately under Japanese GAAP are included in depreciation andamortisation under IFRSs;¾ 27,012 million yen, a part of cost of sales¾ 6,981 million yen, a part of selling, general and administrative expenses¾ 418 million yen, non-operating expenses• Adjustments: As a result of changes in depreciation methods and estimated useful lives of property, plant andequipment, depreciation and amortisation decreased by 797 million yen. Depreciation on capitalised finance lease assets of
330 million yen was recognised under IFRSs whereas lease expense under finance lease was expensed under Japanese
GAAP.
I.
Advertising and promotion expense• Adjustments: Under Japanese GAAP, costs relating to the future expected usage of the Company’s customer loyalty
programmes were recognised as sales expense (promotion cost) whereas, under IFRSs, the cost of customer loyalty
programmes are identified as individual component of revenue. Consequently, advertising and promotion expense of 328
million yen was reversed.
J.
•

Commission expense
Reclassifications: The following items under Japanese GAAP were presented as commission under IFRSs;¾ 5,601 million yen, a part of cost of sales¾ 16,390 million yen, a part of selling, general and administrative expenses

K. Depreciation and amortisation, and Other expenses• Reclassifications: The following items under Japanese GAAP were presented as other expenses under IFRSs;¾ Loss on sale of property, plant and equipment¾ Loss on disposal of property, plant and equipment¾ Maintenance of environment¾ Loss regarding Antimonopoly Act¾ Other non-operating expenses¾ Foreign exchange gain/loss¾ Foreign withheld tax¾ Other extraordinary losses
In addition, following items under Japanese GAAP were presented as other expenses under IFRSs;¾ 47,678 million yen, a part of cost of sales¾ 31,500 million yen, a part of selling, general and administrative expenses• Adjustments: Expense for lease contracts which commenced before 1 April 2008 under Japanese GAAP werereclassified as depreciation and amortisation under IFRSs in the amount of 415 million yen. Amortised goodwill underJapanese GAAP was reversed and as a result, other expenses have decreased by 477 million yen under IFRSs. Due to theadjustment in carrying amount of disposed property, plant and equipment, and intangible assets, other expenses havedecreased by 872 million under IFRSs. In addition, other expenses under IFRSs have decreased by 1,200 million yen due
to the adjustment to the cumulative translation differences relating to the disposal or liquidation of overseas subsidiaries
and the translation of goodwill or financial numbers of overseas branches. In addition, under Japanese GAAP cost relating
to the future expected usage of the Company’s customer loyalty programmes was recognised as sales and generaladministrative expense whereas under IFRSs such programs are identified as a component of revenue and other expenses
increased by 420 million yen. Loss on disposal of other intangible assets under Japanese GAAP in the amount of 1,997
million yen that is recognised during the year ending 31 March 2011 was recognised during the year ended 31 March 2010
as an adjusting subsequent event under IFRSs.

101

L. Finance costs• Reclassifications: Loss on write-down of investment securities of 587 million yen under Japanese GAAP werereclassified as finance costs under IFRSs.
• Adjustments: Bond issuance costs expensed at issuance under Japanese GAAP, were capitalised and amortised as
financial costs under IFRSs. Interest on capitalised finance lease transactions which was included in lease expense underJapanese GAAP and interest on asset retirement obligations were categorised as finance costs.
M. Income tax expense• Reclassifications: A part of enterprise tax of 251 million yen included in selling, general and administrative expenses
under Japanese GAAP was reclassified as income tax expenses under IFRSs.
• Adjustments: Income tax expenses decreased by 164 million yen under IFRSs since unrealised intercompany profits
were calculated using different tax rates applicable under Japanese GAAP and IFRSs. Income tax expenses decreased by afurther 1,037 million yen as a result of re-examination of recoverability of all deferred tax assets under IFRSs.
Furthermore, income tax expenses on credit side under Japanese GAAP in the amount of 599 million yen that wererecognised during the year ending 31 March 2011, were recognised during the year ended 31 March 2010 as an adjusting
subsequent event.
(10) Explanation of material adjustments to the cash flow statements for 31 March 2010
There was no material difference between the consolidated statement of cash flows presented under IFRSs and theconsolidated statement of cash flows presented under Japanese GAAP.

102