Terumo Corporation
IFRS Financial Results for the Fiscal Year Ended
March 31, 2018

1

2

4. Consolidated Financial Statements① Consolidated Statements of Financial Position（Unit: Millions of yen）
As of
March 31, 2018

As ofApril 1, 2016

As ofMarch 31, 2017

Cash and cash equivalents

146,927

105,046

167,832

Trade and other receivables

105,270

111,090

121,402

Other current financial assets

3,149

625

659

Inventories

95,280106,046

112,064

Current tax assets

2,106

750

530

Other current assets

5,819

7,375

8,421

Total current assets

358,553

330,934

410,912

Property, plant and equipment

165,554

172,644

179,196

Goodwill and intangible assets

294,767

471,616

442,660

AssetsCurrent assets

Non-current assets

Investments accounted for using theequity method
Other non-current financial assets

5,955

5,717

5,710

41,154

13,651

13,815

Deferred tax assets

19,78824,01923,356

Other non-current assets

3,716

3,679

3,328

Total non-current assets

530,938

691,328

668,068

889,491

1,022,262

1,078,981

Total assets

3

Liabilities and Equity
Liabilities
Current liabilities
Trade and other payables
Bonds and borrowings
Other current financial liabilities
Current tax liabilities
Provisions
Other current liabilities
Total current liabilities
Non-current liabilities
Bonds and borrowings
Other non-current financial liabilities
Deferred tax liabilities
Retirement benefit liabilities
Provisions
Other non-current liabilities
Total non-current liabilities
Total liabilities
EquityShare capital
Capital surplus
Treasury stock
Retained earnings
Other components of equity
Total equity attributable to the owners of
the parent
Non-controlling interests
Total equity
Total liabilities and equity（Unit: Millions of yen）
As of
March 31, 2018

As ofApril 1, 2016

As ofMarch 31, 2017

55,48559,901444
11,341
115
43,884
171,172

61,152
127,853370
11,115212
49,433
250,137

67,51547,436407
15,970198
47,483179,013

157,172
1,455
39,54910,256230
9,323
217,987
389,160

210,335
10,72440,0938,650
84
10,712
280,602530,739

288,776
15,452
24,124
10,063
82
11,032
349,532
528,545

38,71652,478(64,040)459,264
13,80338,71652,478(108,225)
513,578(5,126)

38,71652,445(101,546)
588,932(28,240)

500,221491,421550,307109
500,331889,491101
491,522
1,022,262

128
550,435
1,078,981

4

② Consolidated Statements of Profit or Loss

Revenue
Cost of sales
Gross profit
Selling, general and administrative expenses
Other income
Other expenses
Operating profit
Finance income
Finance costs
Share of the profit of investments accounted
for using the equity method
Profit before tax
Income tax expenses
Profit for the year

For the fiscal year ended
March 31, 2017
514,164
240,329
273,835
183,288
2,789
5,559
87,777709
13,228（Unit: Millions of yen）
For the fiscal year ended
March 31, 2018587,775
268,442
319,333
212,3634,764
3,180
108,552
1,089
2,792

(377)

(218)

74,881
19,98954,891

106,630
15,42991,201Attributable to:
Owners of the parent
Non-controlling interests
Total profit for the year

55,003(111)
54,891

91,295(94)
91,201

Earnings per share
Basic earnings per share (yen)Diluted earnings per share (yen)152.31142.75259.12242.06

Consolidated Statements of Profit or Loss (Under JGAAP)Net sales
Gross profit
Operating income
Ordinary income
Profit attributable to the owners of the parent

For the fiscal year ended
March 31, 2017
514,164
278,000
76,57868,55254,225

5（Unit: Millions of yen）
For the fiscal year ended
March 31, 2018587,775
327,226
92,232
88,46775,590③ Consolidated Statements of Comprehensive Income

Profit for the year

For the fiscal year ended
March 31, 2017
54,891（Unit: Millions of yen）
For the fiscal year ended
March 31, 2018
91,201(1,412)

298

2,969

(46)

1,556

252

(6,321)(24,395)

(479)
33

2
607

(0)

(1)

(6,768)(23,787)(5,211)49, 680(23,534)
67,666

49,798(118)
49,68067,774(108)
67,666

Other comprehensive income
Items that will not be reclassified to profit or loss
Changes in financial assets measured at fairvalue through other comprehensive income
Remeasurements of defined benefit plan
Total items that will not be reclassified to profit
or loss
Items that will be reclassified to profit or loss
Exchange differences on translation of foreign
operations
Cash flow hedges
Hedging costs
Share of other comprehensive income/(loss) ofinvestments accounted for using the equity
methodTotal items that will be reclassified to profit orloss
Other comprehensive income/(loss) for the year
Total comprehensive income for the year
Attributable to
Owners of the parent
Non-controlling interests
Total comprehensive income for the year
(Note)
Items in the above statement are net of tax.

6

④ Consolidated Statements of Changes in Equity（Unit: Millions of yen）
Equity attributable to the owners of the parent
Other
CapitalTreasury
Retainedcomponents ofsurplusstockearnings
equitySharecapitalBalance at April 1, 2016
Profit for the year
Other comprehensive
incomeTotal comprehensive income
Acquisition of treasury
stock
Disposal of treasury stock
Dividends
Transfer from othercomponents of equity toretained earnings
Change in shares ofsubsidiaries due of capitalincrease
Share-based payments
Total transactions with theowners of the Company
Balance at March 31, 2017
Profit for the year
Other comprehensive
incomeTotal comprehensive income
Acquisition of treasury
stock
Disposal of treasury stock
Dividends
Transfer from othercomponents of equity toretained earnings
Change in shares ofsubsidiaries due of capitalincrease
Share-based payments
Conversion of convertible
bonds
Total transaction with theowners of the Company
Balance at March 31, 2018

38,716－52,478－(64,040)－459,264
55,003－－－－(5,205)－－－55,003(5,205)－－(44,227)－－－

Non-contro
lling
Total equity
interests

Total

13,803 500,221－ 55,003

109
(111)

500,33154,891(5,205)(6)(5,211)49,798(118)

49,680－－ (44,227)－(44,227)

41

(18)

(22)

0

－

0

－

－

(14,518)－ (14,518)－(14,518)－－－

13,848(13,848)

－

－

－

－

－

－

－

－

－

110

110

－

－

－

－

147

147

－

147

－

－

(44,185)(689)(13,724) (58,599)

110(58,488)

38,71652,478(108,225)

513,578(5,126) 491,421

－

－

－

91,295

－

－

－

－

－

－

－

－

－

－

101

491,522

91,295(94)

91,201(23,520) (23,520)(14)(23,534)

91,295(23,520)

67,774(108)

67,666

(6)

－

－

(6)

－

(6)

－

109

(19)

(90)

0

－

0

－

－

－

(15,839)－ (15,839)－(15,839)

－

－

－

(50)

50

－

－

－

－

－

－

－

－

－

135

135

－

－

－

－

447

447

－

447

－

(33)

6,576

(33)

－

6,509

－

6,509

－

(33)

6,679

(15,942)406(8,889)135(8,753)38,71652,445(101,546)

588,932(28,240) 550,307

128

550,435

7－

⑤ Consolidated Statements of Cash Flows
For the fiscal year ended
March 31, 2017
Cash flows from operating activities
Profit before tax
Depreciation and amortization
Share of the loss/(gain) of investments accounted forusing the equity method(Decrease) /increase in retirement benefit liabilities
Interest and dividend income
Interest expenses
Foreign exchange (gain)/loss(Gain)/Loss on disposal of property, plant and equipment(Profit)/Loss on valuation of financial instruments(Increase)/decrease in trade and other receivables(Increase)/decrease in inventories
Increase/(decrease) in trade and other payables
OthersSub-totalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by operating activities
Cash flow from investing activities
Payments for purchase of time deposits
Proceeds from withdrawal of time deposits
Payments for purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Payments for purchase of intangible assets
Payments for purchase of financial instruments
Proceeds from sale of financial instruments
Payments for business acquisition
Payment for acquisition of shares of subsidiaries due tochanges in the scope of consolidation
OthersNet cash used in investing activities
Cash flow from financing activities
Proceeds from short-term borrowings
Repayment of short-term borrowings
Proceeds from long-term borrowings
Repayment of long-term borrowings
Proceeds from issue of corporate bonds
Payments for redemption of corporate bonds
Proceeds from non-control interests
Finance lease payments
Payments for repurchase of treasury stock
Payments for dividends
Net cash provided by financing activities
Effect of exchange rate changes on cash and cash
equivalents
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year

8

（Unit: Millions of yen）
For the fiscal year ended
March 31, 2018

74,881
34,471

106,630
42,035

377

218

2,876
(701)
1,709
2,881
1,293
6,984
(4,718)(4,182)886(7,875)
108,883842(1,318)(25,518)
82,888

2,204
(855)
1,805
616
557
－
(9,256)(7,537)
3,991(1,639)138,770
1,039(1,129)(24,118)
114,562

(298)
2,443
(29,838)
1,315(8,763)(1,243)
21,440(119,191)(25)－(31,866)
32(9,456)(572)－(2,217)(49,380)－(0)(183,517)－(44,105)

120,000(58)
29,640(19,460)
29,888(40,000)
110(379)(44,227)(14,518)
60,993－(120,000)
119,638(7,759)19,931
－
135
(232)
(6)
(15,839)(4,132)(2,246)(3,538)(41,880)
146,927
105,046

62,786
105,046
167,832

5. Segment information
Reporting segment information
Revenue and operating results of the reporting segments of the Group are described below.
For the fiscal year ended March 31, 2017
（Unit: Millions of yen）

Reporting Segment

Sales revenue
Revenue from sales
to external customers
Segment Profit(Adjusted operating
profit)（Adjustment item）
Amortization of
acquired intangible
assetsOther non-recurring
profit or loss

Adjustment
amount（Note 1）

Amountrecorded on
consolidated
financialstatements

Cardiac and
VascularCompany

GeneralHospitalCompany

Blood
Management
Company

261,52957,946

94,483513,959205

514,164

67,33424,444

15,173106,952(2,308)104,643(934)－(8,490)(9,425)－(9,425)

Total(7,441)

Operating profit

87.777

Finance income

709

Finance costs
Share of profit/(loss)of investment
accounted for using
the equity method(13,228)

Pre-tax profit

74,881(377)

Other items
Depreciation and
10,871
9,707
13,20933,787684
34,471amortization
Capital expenditure
19,8598,600
8,720
37,1803,994
41,175(Note 1） Amounts in ‘Adjustment’ are as follows:(1) ¥205 million adjustment to Revenue from sales to external customers is proceeds from temporary staffing thatis not attributable to reportable segments.
(2) ¥(2,308) million segment profit in “Adjustments” includes, “inventories” of ¥(775) million and “others” of¥(1,532) million.
(Note 2）“Other non-recurring profit or loss” mainly includes acquisition related costs.
(Note 3）Amortization expenses of acquired intangible assets in business combination are included in “Amortization of
acquired intangible assets”.

9For the fiscal year ended March 31, 2018
（Unit: Millions of yen）
AmountAdjustment
recorded onamountconsolidated
financial(Note 1）statements

Reporting Segment

Sales revenue
Revenue from sales toexternal customers
Segment Profit(Adjusted operating
profit)（Adjustment item）
Amortization of
acquired intangible
assetsOther non-recurring
profit or loss

Cardiac and
VascularCompany

GeneralHospitalCompany

Blood
Management
Company

324,001

158,848

104,697

587,547

228

587,775

83,643

26,76015,072

125,476(547)

124,929(6,068)－(8,386)(14,455)－(14,455)

Total(1,921)

Operating profit

108,552

Finance income

1,089

Finance costs
Share of profit/(loss) ofinvestment accounted
for using the equity
method(2,792)Pre-tax profit

106,630

Other items
Depreciation andamortization
Capital expenditure(218)

17,522

9,657

14,35941,539495

42,03520,430

9,795

8,431

38,657

4,963

43,620(Note 1） Amounts in ‘Adjustment’ are as follows:(1) ¥228 million adjustment to Revenue from sales to external customers is proceeds from temporary staffing thatis not attributable to reportable segments.
(2)¥(547) million segment profit in “Adjustments” includes, “inventories” of ¥315 million and “others” of ¥(862)
million.
(Note 2）“Other non-recurring profit or loss” mainly includes acquisition related costs.
(Note 3）Amortization expenses of acquired intangible assets in business combination are included in “Amortization of
acquired intangible assets”.

10(Note) Main products belonging to each business segment
Business segments

Sub-segments

Interventional Systems (TIS)

Main products
Angiographic guidewires, Angiographic catheters,
Introducer sheaths, Vascular closure devices, PTCA
balloon catheters, Coronary stents, Self-expanding
peripheral stents, IVUS, Imaging catheters, etc.

Cardiac and Vascular Company
Neurovascular

Neuro interventional coils, Stents, etc.

CV Systems

Oxygenators, Cardio-pulmonary bypass system, etc.

Vascular Graft

Artificial vascular grafts, Stent grafts

Hospital Systems

Infusion pumps, Syringe pumps, Solution sets, Syringes,
I.V.solutions, Pain management systems, Nutritious food,
Adhesion barriers, Blood glucose monitoring systems,
Digital thermometers, Blood pressure monitors, etc.

Alliance

Contract development and manufacturing organization(CDMO) for Prefilled syringes, Devices to pharmaceuticalcompanies for use in drug kits (Prefillable syringes, Needles
for kit packaging business) , etc.

－

Blood bags, Automated blood collection system,
Automated blood component processing system, Pathogen
reduction technology, Automated, centrifugal apheresis
system, Cell expansion system, etc.

General Hospital Company

Blood Management Company

11

6. First-time adoption of IFRS
(1) Transition to financial reporting under IFRSThe Group presents consolidated financial statements that comply with IFRS from the fiscal year ended March 31,2018.
The most recent consolidated financial statements for fiscal year ended March 31, 2017 were prepared in accordance withgenerally accepted accounting principles in Japan (hereinafter “JGAAP”). The transition date was April 1, 2016.
In principle, IFRS 1 requires that companies adopting IFRS for the first time (hereinafter “First-time Adopter”) apply thestandards retrospectively. However, IFRS 1 provides certain mandatory exceptions and voluntary exemptions from theapplication of certain requirements under IFRS.
(2) Restrictions on retroactive application of other IFRSIFRS 1 prohibits retrospective application of certain IFRS standards. The group applies specific provisions for“Accounting estimates”, “Derecognition of financial assets and financial liabilities”, “Hedge accounting”, “Classificationand measurement of financial assets”. The Group prospectively applies IFRS relating to those items from the date oftransition to IFRS.
(3) Exemptions of other IFRSIFRS 1 provides certain mandatory exceptions and voluntary exemptions from the application of certain requirements
under IFRS. The effects of the application of these requirements are adjusted in retained earnings or other components ofequity at the date of transition. The exemptions that the Group applies in connection with the transition from JGAAP to
IFRS were as follows:(a) Business Combinations
IFRS 1 provides that the First-time Adopter may elect not to apply IFRS 3 Business Combination (“IFRS 3”)
retrospectively to past business combinations that occurred before the date of transition to IFRS. For retrospective
application, all subsequent business combinations will be amended in accordance with IFRS 3.
The Group adopts this exemption and elects not to apply IFRS 3 retrospectively to the business combinations that
occurred before the date of transition.
As a result, the amount of goodwill that arose from the business combinations that occurred before the date of transition
is stated at the carrying amount of the goodwill in accordance with JGAAP. Impairment test on goodwill was performed
as of the date of transition regardless of whether there was an indication of impairment or not.
(b) Deemed cost
IFRS 1 provides that a first-time adopter is permitted to measure property, plant and equipment and intangible assets atfair value at transition date and use the fair value as deemed cost as of the transition date. The Group applies this optional
exemption provision to certain property, plant and equipment and uses the fair value as deemed cost. The prior periodbook value is ¥16,240 million and the fair value is ¥7,320 million after applying deemed cost.
(c) Exchange differences on translation of foreign operations
IFRS 1 provides that the First-time Adopter may elect to deem the cumulative translation differences for all foreign
operations to be zero at the date of transition to IFRS. The Group applies this exemption and elects to deem thecumulative translation differences for all foreign operations to be zero at the date of transition and transfers all amounts toretained earnings.
(d) Designation of previously recognized financial instruments
IFRS 1 provides that the First-time Adopter may determine the classification of financial instruments under IFRS 9 on
the basis of the facts and circumstances that exist at the date of transition to IFRS. The Group designate equity securities
as financial assets measured at fair value through other comprehensive income on the date of transition to IFRS.
(4) Adjustment from JGAAP to IFRSThe Group has adjusted the amounts reported in the consolidated financial statements based on JGAAP when preparing
consolidated financial statements based on IFRS.
The effect of the adjustment on the financial condition, business performance and cash flow situation of the Group is asshown below. For "reclassification" in the reconciliation table, adjustments that do not affect retained earnings andcomprehensive income are included in "Recognition and measurement differences” and items that affect retained earnings
and comprehensive income. Furthermore, the Group acquired shares of Bolton Medical, Inc. and two other companies(making them subsidiaries of Terumo) and a related business as of 31 March 2017. Since the allocation of acquisition
consideration was completed in the current consolidated fiscal year, the effect of the adjustment from the original
provisional amount is stated in "Adjustment due to allocation of acquisition consideration".

12

Reconciliations of Equity as of April 1, 2016 (Transition Date)（Unit: Millions of yen）
Accounts under JGAAPCurrent assets
Cash and deposits
Notes and accounts
receivables – trade

Merchandise and finishedgoods
Work-in-progress
Raw materials and supplies
Deferred tax assets
Other
Allowance for doubtful
accounts

Total current assets
Non-current assets
Property, plant andequipment
Buildings and structures(Net)
Machinery, equipment
and vehicles (Net)Land
Lease assets (Net)Construction in progress
Other (Net)Intangible assets
Goodwill
Customer Relationships
Developed Technology
Other
Investments and otherassetsInvestment securities

Deferred tax assets
Other
Total non-current assets
Total deferred assets
Total assets

JGAAP

Recognition
andReclassification
measurement
differences

IFRS

Notes

Accounts under IFRS

149,672(2,745)―

146,927

Current assets
Cash and cash equivalents

104,426844―

105,270

Trade and other receivables

―

3,152

(3)

3,149

―

94,716563

95,28059,132(59,132)――

10,194
27,126
14,963
10,621(10,194)(27,126)(14,963)(10,621)

―
―
―
―

―
―
―
―

(1,390)

1,390

―

―

―
―
374,746

2,106
5,872
(16,701)

―
(52)
507

2,106
5,819
358,553―

177,532(11,978)

165,554

65,207(65,207)――54,362(54,362)――

23,297881
21,417
10,628(23,297)(881)(21,417)(10,628)

―
―
―
―

―
―
―
―

―

291,592

3,175

294,767

143,707
90,75028,01728,038(143,707)(90,750)(28,017)(28,038)

―
―
―
―

―
―
―
―

37,724(37,724)

―

―

―

5,961

(5)

5,955

―

41,154―

41,154

3,436―
14,186521,657
5,281
901,685

14,963
3,716(14,186)
16,701
―
―

1,388
―
―
(7,420)(5,281)(12,194)

19,7883,716―
530,938―
889,491

13

Other current financial
assetsInventories

Current tax assets
Other current assets
Total current assets

A

B

D

Non-current assets
Property, plant andequipment

Goodwill and intangible
assetsInvestments accounted forusing the equity method
Other non-current financial
assetsDeferred tax assets
Other non-current assets
Total non-current assets

C
Total assets

(Unit: Millions of yen）
Accounts under JGAAPCurrent liabilities
Notes and accounts payable- tradeShort-term debt
Current portion of long-term
debt
Lease obligations
Current portion of bonds
payableIncome taxes payable
Deferred tax liabilities
Provision for bonuses
Provision for directors'
bonuses
Notes and accounts
payable-facilities
Other
Total current liabilities

JGAAP

Recognition
andReclassification
measurement
differences

IFRS

Notes

Current liabilities
36,294

18,413

777

55,485Trade and other payables―
61

59,901(61)――

59,901―

Bonds and borrowings

19,839(19,839)

―

―

256

134

53

444

40,000(40,000)

―

―

9,778
56
―
5,869

1,562
(56)
115
(5,869)――――11,341
―
115
―

170

(170)

―

―

5,451

(5,451)――51,057
168,835(7,172)
1,506

(0)
830

43,884
171,172G―

159,058(1,885)

157,172F

100,184(100,184)――

58,873286
45,079(58,873)
317
56

―
850
(5,587)―
1,455
39,549

66

(66)

―

―

8,656

―

1,599

10,256230
7,925
221,304
390,140―(1,813)(1,506)――
3,211(1,810)
(980)

230
9,323
217,987
389,160

38,71650,928(64,040)
419,573

―
―
―
―

―
1,550
―
39,69038,71652,478(64,040)459,264

66,074183(52,454)

13,803

183

(183)

―

―

511,435―(11,213)500,221109
511,544901,685――――(11,213)(12,194)109
500,331889,491

Other current financial
liabilities

Current tax liabilities
Provisions

Non-current liabilities
Convertible bonds with
subscription rights to shares
Long-term debt
Lease obligations
Deferred tax liabilities
Reserve for directors'
retirement benefits
Provision for directors'
retirement benefits
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Total Net Assets Section
Capital stock
Capital surplus
Treasury shares
Retained earnings
Accumulated othercomprehensive income
Stock subscription rights

Non-controlling interests
Total net assets
Total liabilities and net assets

Accounts under IFRS

14Other current liabilities
Total current liabilities
Non-current liabilities
Bonds and borrowings
Other non-current financial
liabilities

H
D

Other financial liabilities
Deferred tax liabilities

E

Retirement benefit liabilities

G

F
J
E,H,I

Provisions
Other non-current liabilities
Total non-current liabilities
Total liabilities
EquityShare capital
Capital surplus
Treasury stock
Retained earnings
Other components of equity
Equity attributable to theowners of the parent
Non-controlling interest
Total equity
Total liabilities and equity

A

Notes on reconciliations of Equity as of April 1, 2016
Recognition and measurement differences
Adjustment to property, plant and equipment
The Group elects to use the fair value of certain property, plant and equipment on the IFRS transition date of theparent company as deemed cost. In addition, upon adoption of IFRS, the Group has revised the estimate of useful
lives and residual values. As a result, there is a difference between the carrying amount of property, plant andequipment under JGAAP and the carrying amount under IFRS.

B

Adjustment to intangible assets
Certain development expenses that have been treated as expense under JGAAP are capitalized under IFRS if theymeet the requirements for capitalization.

C

Adjustment to deferred assets
Under JGAAP start-up cost was capitalized as deferred assets. Under IFRS, the start-up cost is expensed as
incurred.

D

Adjustment to deferred tax assets and deferred tax liabilities
Under JGAAP, deferred tax assets were calculated using the effective tax rate of the seller for the tax effectassociated with the elimination of unrealized gains and losses, but IFRS calculates using the effective tax rate of
the purchaser. In addition, deferred tax assets or deferred tax liabilities are recorded for temporary differences
arising as a result of adjusting the differences to other IFRSs. Deferred tax assets have increased or decreased as aresult of considering the recoverability of deferred tax assets based on IFRS.

E

Adjustment to post-employment benefits
Under JGAAP, actuarial gains and losses were recognized in other comprehensive income as incurred, and wererecognized in profit or loss from the following of incurrence year, amortized on a straight-line method over acertain number of years no longer than the average remaining service period of employees. Under IFRS, theseactuarial gains and losses are recognized in other comprehensive income as incurred, and immediately reclassified
to retained earnings.
Retirement benefit liabilities are recalculated based on the provisions of IFRS and any adjustments arising fromsuch differences are reflected in the retained earnings. As a result of the recalculation based on IFRS regulations,significant assumptions relating to mortality rates differ between JGAAP and IFRS.

F

Adjustment to bonds and borrowings
Under JGAAP, convertible bonds with stock acquisition rights were recognized as a lump-sum amount, theconsideration relating to the bond were not separated from the consideration related to the stock acquisition right.
In IFRS, the liability component and the equity component are classified as a compound financial instrument. As aresult, the amount measured as an equity element was deducted from bonds and borrowings, and the same amountis recorded as capital surplus.

G

Adjustment to government grants
Under JGAAP, revenue was recognized lump-sum when the government grant was received. Under IFRS,
revenue deferred and a fixed amount of revenue is recognized over the useful life of the asset by recognizing
incurred liabilities in other current liabilities or non-current liabilities.

H

Adjustment to interest rate swap special method
Under JGAAP, interest rate swaps were accounted for using special method if it fulfilled certain requirements.
Under IFRS, the interest rate swap is accounted for using the cash flow hedge and the fair value of the hedge
instrument is recognized in the consolidated statement of financial position.

I

Adjustment to foreign operations
The Group has elected to apply the exemption under IFRS 1 and transferred the total cumulated amount of foreign
currency translation to the retained earnings as of the transition date.

J

Adjustment to retained earnings
Adjustment to retained earnings due to differences in recognition and measurement are as follows:15

Adjustment to property, plant and equipment
Adjustment to intangible assets
Adjustment to deferred assets
Adjustment to deferred tax assets and deferred tax
liabilities
Adjustment to post-employment benefits
Adjustment to bonds and borrowings
Adjustment to government grants
Adjustment to foreign operations
Other
Total

（Unit: Millions of yen）
As of April 1, 2016
(8,562)
1,441(3,596)
3,819(14,881)(257)(1,898)63,742(116)
39,690Reclassification
The Group made reclassification in conformity with IFRS requirements, of which the significant ones are listed
below:
・Under JGAAP, the Group included short-term time deposits with deposit terms exceeding three months incash and deposits, but under IFRS they are included in other current financial assets.
・Under JGAAP, allowance for doubtful debts (current assets) are separately listed. Under IFRS, allowance for
doubtful debts are included in trade and other receivables as loss allowance.
・Financial assets and liabilities are presented in accordance with IFRS disclosure requirements
・Deferred tax assets and deferred tax liabilities recorded as current items under JGAAP are reclassified as
non-current assets/liabilities under IFRS.
・Under JGAAP, short-term borrowings and long-term borrowings scheduled for repayment within 1 year, andbonds scheduled for redemption within 1 year are included in bonds and borrowings. In addition, long-term
debt and convertible bond type bonds with stock acquisition rights are included in corporate bonds andborrowings (non-current liabilities).

16

Reconciliations of Equity as of March 31, 2017
(Unit: Millions of yen）
Accounts under JGAAPJGAAPAdjustment
Recognition
allocation ofandReclassificationacquisition
measurement
considerationdifferences

IFRS

Notes

Current assets

Accounts under IFRSCurrent assets
Cash and cash
equivalents
Trade and otherreceivables
Other current
financial assets
Inventories

Cash and deposits

105,388

―

(341)

―

105,046

Notes and accounts
receivables - trade109,508

―

1,581

―

111,090

―

―

625

―

625

―

―

105,497549

106,046

69,765246(70,011)

―

―

9,367

―

(9,367)――

27,579―(27,579)――

17,501―(17,501)――

11,503

28(11,531)――(1,430)

―

1,430

―

―

―

―

750

―

750

Current tax assets

―

―

7,485

(110)

7,375

Other current assets

349,183275(18,963)438

330,934

Total current assets

Merchandise and finishedgoods
Work-in-progress
Raw materials andsupplies
Deferred tax assets
Other
Allowance for doubtful
accounts

Total current assets

Non-current assets
Property, plant andequipment
Buildings andstructures (Net)
Machinery, equipment
and vehicles (Net)
Land

―

―

184,517(11,872)

172,644

63,310―(63,310)――53,359―(53,359)――

22,471―(22,471)

―

―

1,780

―

(1,780)――30,445―(30,445)――

11,754(66)(11,687)

―

―

―

―

455,00916,607

471,616

Goodwill
Customer
Relationships
Developed Technology

217,334(10,157)(207,176)――

85,338897(86,235)――

105,581

10,658(116,239)

―

―

Other

46,463(2,132)(44,330)――

Lease assets (Net)Construction inprogress
Other (Net)Intangible assets

17

Ａ

B,C

Non-current assets
Property, plant andequipment

Goodwill andintangible assets

Investments and otherassetsInvestment securities

12,463―(12,463)

―

―

―

―

5,540

176

5,717

―

―

12,4791,171

13,651

J

6,727

―

17,501(209)

24,019

E

757

―

(757)

―

―

―

―

4,437

(757)

3,679

10,263―(10,263)――

Total non-current assets

668,052(801)

18,963

5,114

691,328

Total deferred assets

4,169

―

―

(4,169)―1,021,405

(526)

―

1,383 1,022,262

Deferred tax assets
Assets related toretirement benefits

Other

Total assets

18

Investments
accounted for using
the equity method
Other non-current
financial assets
Deferred tax asset

Other non-current
assetsTotal non-current assets
D
Total assets

(Unit: Millions of yen)Accounts under JGAAPCurrent liabilities
Notes and accounts
payable - trade

JGAAP

Adjustment
Recognition
allocation ofandReclassificationacquisition
measurement
considerationdifferences

IFRS

Notes

Current liabilities
Trade and otherpayablesBonds and borrowings

38,451―

21,923

777

61,152―120,000――

127,853(120,000)――

127,853
―

7,853

―

(7,853)

―

―

231

―

84

54

370

9,688
23
―
6,317

―
―
―
―

1,427
(23)
212
(6,317)――――

11,115
―
212
―

190

―

(190)

―

―

7,059

―

(7,059)

―

―

72

―

(72)

―

―

58,502
248,389

256
256(9,418)
566

93
925

49,433
250,137H―
30,000――210,713(30,000)(378)―

210,335―

G,J

100,135―(100,135)――

80,578―(80,578)

―

―

230

―

9,928

565

10,724I

Deferred tax liabilities
Reserve for directors'
retirement benefits
Provision for directors'
retirement benefits
Asset retirement
obligations

47,501(782)

23(6,648)40,093

E

14

―

(14)

―

―

6,803

―

―

1,846

8,650

84

―

―

―

84

Other

18,113―(10,504)

3,103

10,712

283,462

(782)

(566)

(1,510)280,602531,851

(526)

―

(584)

530,739

38,71650,928(108,225)
459,261

―
―
―
―

―
―
―
―

―
38,7161,550
52,478― (108,225)
54,317
513,578

48,464―307(53,898)

307

―

(307)

―

Short-term debt
Current portion of
long-term debt
Lease obligations
Income taxes payable
Deferred tax liabilities
Provision for bonuses
Provision for directors'
bonuses
Notes and accounts
payable-facilities
Asset retirement
obligation
Other
Total current liabilities

Other current financial
liabilities
Current tax liabilities
Provisions

Non-current liabilities
Bonds payable
Convertible bonds with
subscription rights tosharesLong-term debt
Lease obligations

Total non-current
liabilities
Total liabilities
Total Net Assets Section
Capital stock
Capital surplus
Treasury shares
Retained earnings
Accumulated othercomprehensive income
Stock subscription
rights19

Accounts under IFRSFOther current liabilities
Total current liabilities
Non-current liabilities
Bonds and borrowings

Other non-current
financial liabilities
Deferred tax liabilities

Retirement benefit
liabilities
Provisions

H

Other non-current
liabilities
Total non-current
liabilities
Total liabilities

EquityShare capital
G
Capital surplus
Treasury stockL
Retained earnings
Other components of(5,126) F,I,J,K
equity―Non-controllinginterests
Total net assets
Total liabilities and net
assets489,452

―

―

1,968

491,421

Total equity attributable
to the owners of theparent

101

―

―

―

101

Non-controlling interest

489,554

―

―

1,968

491,522

1,021,405

(526)

―

1,383 1,022,262

20

Total equity
Total liabilities and equity

A

Notes on reconciliations of Equity as of March 31, 2017
Recognition and measurement of differences
Adjustment to property, plant and equipment
The Group elects to use the fair value of certain property, plant and equipment on the IFRS transition date of theparent company as deemed cost. In addition, upon adoption of IFRS, the Group has revised the estimate of useful
lives and residual values. As a result, there is a difference between the carrying amount of property, plant andequipment under JGAAP and the carrying amount under IFRS.

B

Adjustment to goodwill
Under JGAAP, goodwill was amortized on the straight-line basis over the period during which the effect of such
goodwill lasts but does not exceed 20 years after recognition. Under IFRS, goodwill is not amortizedC

Adjustment to intangible assets
Certain development expenses that have been treated as expense under JGAAP are capitalized under IFRS if theymeet the requirements for capitalization.

D

Adjustment to deferred assets
Under JGAAP start-up cost were capitalized as deferred assets. Under IFRS, the start-up cost is expensed as
incurred.

E

Adjustment to deferred tax assets and deferred tax liabilities
Under JGAAP, deferred tax assets were calculated using the effective tax rate of the seller for the tax effectassociated with the elimination of unrealized gains and losses, but IFRS calculates using the effective tax rate of
the purchaser. In addition, deferred tax assets or deferred tax liabilities are recorded for temporary differences
arising as a result of adjusting the differences to other IFRSs. Deferred tax assets have increased or decreased as aresult of considering the recoverability of deferred tax assets based on IFRS.

F

Adjustment to post-employment benefits
Under JGAAP, actuarial gains and losses were recognized in other comprehensive income as incurred, and wererecognized in profit or loss from the following of incurrence year, amortized on a straight-line method over acertain number of years no longer than the average remaining service period of employees. Under IFRS, theseactuarial gains and losses are recognized in other comprehensive income as incurred, and immediately reclassified
to retained earnings.
Retirement benefit liabilities are recalculated based on the provisions of IFRS and any adjustments arising fromsuch differences are reflected in the retained earnings. As a result of the recalculation based on IFRS regulations,significant assumptions relating to mortality rates differ between JGAAP and IFRS.

G

Adjustment to bonds and borrowings
Under JGAAP, convertible bonds with stock acquisition rights were recognized as a lump-sum amount, theconsideration relating to the bond were not separated from the consideration related to the stock acquisition right.
In IFRS, the liability component and the equity component are classified as a compound financial instrument. As aresult, the amount measured as an equity element was deducted from bonds and borrowings, and the same amountis recorded as capital surplus.

H

Adjustment to government grants
Under JGAAP, revenue was recognized lump-sum when the government grant was received. Under IFRS, revenue
deferred and a fixed amount of revenue is recognized over the useful life of the asset by recognizing incurredliabilities in other current liabilities or non-current liabilities.

I

Adjustment to interest rate swap special method
Under JGAAP, interest rate swaps were accounted for using special method if it fulfilled certain requirements.
Under IFRS, the interest rate swap is accounted for using the cash flow hedge and the fair value of the hedge
instrument is recognized in the consolidated statement of financial position.

J

Adjustment to integrated treatment of cross currency interest rate swap (special treatment/ allocation treatment)
Under JGAAP, interest rate currency swaps that fulfill the requirements for integrated treatment (exceptional
treatment, allocation treatment) were treated as one unit. Under IFRS, cross currency interest rate swap is
accounted for using the cash flow hedge method and the fair value of the hedging instrument is recognized in the21

consolidated statement of financial position.
K

Adjustment to foreign operations
The Group has elected to apply the exemption under IFRS 1 and transferred the total cumulated amount of foreign
currency translation to the retained earnings as of the transition date.

L

Adjustment to retained earnings
Adjustment to retained earnings due to differences in recognition and measurement are as follows:（Unit: Millions of yen）
As of March 31, 2017
(8,508)
11,4302,608(2,840)1,601(11,301)(462)(1,881)
63,742(71)
54,317

Adjustment to property, plant and equipment
Adjustment to goodwill
Adjustment to intangible asset
Adjustment to deferred assets
Adjustment to deferred tax assets and liabilities
Adjustments to post-employment benefits
Adjustment to bonds and borrowings
Adjustment to government grant
Adjustment to foreign operations
Other
Total

Reclassification presentation
In addition to the above classifications, the Group made reclassifications in conformity with IFRS requirements, ofwhich the main reclassifications are as follows:
・Under JGAAP, the Group included short-term time deposits with deposit terms exceeding three months incash and deposits, but under IFRS they are included in other current financial assets.
・Under JGAAP, allowance for doubtful debts (current assets) are separately listed. Under IFRS, allowance for
doubtful debts are included in trade and other receivables as loss allowance.
・Financial assets and liabilities are presented in accordance with IFRS disclosure requirements
・Deferred tax assets and deferred tax liabilities recorded as current items under JGAAP are reclassified as
non-current assets/liabilities under IFRS.
・Under JGAAP, short-term borrowings and long-term borrowings scheduled for repayment within 1 year, andbonds scheduled for redemption within 1 year are included in bonds and borrowings. In addition, long-term
debt and convertible bond type bonds with stock acquisition rights are included in corporate bonds andborrowings (non-current liabilities).

22

Reconciliations of Profit and loss and other comprehensive income for the fiscal year ended March 31, 2017
(Unit: Millions of yen)Accounts under
JGAAP

Net sales
Cost of sales
Gross profit
Selling, general andadministrative
expenses

Operating income
Non-operating income
Non-operating
expenses
Extraordinary income
Extraordinary expenses

Income before income
taxes
Total income taxes
ProfitLoss attributable tonon-controllinginterests（-）
Profit attributable toowners of parent

JGAAP

Adjustment
Recognition
allocation ofandReclassificationacquisition
measurement
considerationdifferences

IFRS

Notes

514,164
236,164
278,000―
4,495(4,495)

―
(330)
330

514,164
240,329
273,835

A

Revenue
Cost of sales
Gross profit

201,421(4,430)(13,703)183,288

A,B

Selling, general andadministrative expenses――
76,578
2,057

2,746
6,755
(4,074)(2,057)42(1,196)
15,272
―

2,789
5,559
87,777―C

Other income
Other expenses
Operating profit

10,083(10,083)――

16,442
10,012――(16,442)(10,012)
16,501
12,791――(15,792)
436

―
―
709
13,228

―

(559)

182

(377)

74,981673(774)

74,881

20,867
54,114673―(1,552)
777

19,98954,891

(111)

―

－

(111)

Non-controllinginterests

54,225―777

55,003

Owners of the parent

23

D

Finance income
Finance costs
Share of the profit/(loss)of investments accounted
for using the equity
methodProfit before tax

D

Income tax expenses
Profit for the year
Attributable to(Unit: Millions of yen)Accounts under
JGAAP
ProfitOther comprehensive
incomeAdjustment
Recognition
allocation of
and
JGAAP
Reclassificationacquisition
measurement
considerationdifferences
54,114―
777
54,891IFRS

Profit for the year
Other comprehensive income

Unrealized gains onother securities(14,601)―

13,189(1,412)D

Adjustment amountrelated to retirement
benefits

4,465―(1,495)2,969

EForeign currencytranslation
adjustment accountDeferred hedge
gains(6,931)―609(6,321)

(546)

―

67

(479)

―

33

33

Notes

Items that will not bereclassified to profit or loss
Changes in financial assets
measured at fair value
through other comprehensive
incomeRemeasurements of defined
benefit plan
Items that will be reclassified to
profit or loss
Exchange differences ontranslation of foreign
operations
Cash flow hedges
Costs of hedging
Share of othercomprehensive income/(loss)of investments accounted forusing the equity method
Other comprehensive
income/(loss) for the year, net oftax
Total comprehensive income forthe year
Total comprehensive income forthe year attributable to

Associates
accounted for using
the equity method

(0)

―

―

(0)

Total othercomprehensive income(17,615)―

12,404(5,211)

Profit36,498―13,182

49,68036,616―

13,182

49,798

Owners of the parent

(118)

―

―

(118)

Non-controlling interests(Details)
Comprehensive
income attributable tothe owners of theparentComprehensive
income attributable tothe non-controllinginterests

24Notes on adjustment to profit or loss and comprehensive income for the fiscal year ended March 31, 2017
[Difference in recognition and measurement]
A

Property, plant and equipment
Under JGAAP, property, plant and equipment is depreciated in the same way as Japanese tax law and the residual
value and useful life are based on Japanese tax law provisions. Under IFRS, property, plant and equipment isdepreciated based on residual value and estimated useful life. As a result, cost of sales decreased by ¥121 million
and selling, general and administrative expenses increased by ¥38 million.

B

Goodwill
Under JGAAP, goodwill was amortized on the straight-line basis over the period during which the effect of such
goodwill lasts but does not exceed 20 years after recognition. Under IFRS, goodwill is not amortized, resulting ina decrease of ￥11,247 million in selling, general and administrative expenses.

C

D

E

Deferred assets
Under JGAAP, the start-up costs that were capitalized as deferred assets are treated as expenses when incurred by
IFRS. As a result, other expenses decreased by ¥1,111 million.
Equity financial instruments
Under JGAAP, the Group recognizes gains or losses on sales of investment securities in profit or loss. Under
IFRS, equity instruments are required to be designated as fair value through other comprehensive income and fairvalue changes are recognized in other comprehensive income, resulting in a decrease in finance income by¥15,792 million. In addition, income taxes on the gain on sale are included in other comprehensive income,resulting in a decrease in income tax expenses by ¥2,823 million.
Remeasurement of defined benefit plan
Under JGAAP, incurred actuarial gains or losses are allocated proportionally using straight-line method over a
fixed number of years within the average remaining service period of employees and a proportional amount isexpensed in the following period. Under IFRS, actuarial gains or losses are recognized as other comprehensive
income and immediately transferred to retained earnings.
[Reclassification]
Under JGAAP, items are presented in non-operating income, non-operating expense and extraordinary gain,
extraordinary losses. Under IFRS, financing-related items are included in finance income and finance costs andnon-financing related items are included in other income, other expenses or share of the profit/(loss) ofinvestments accounted for using the equity method.

Note on Reconciliation of Cash Flows for the fiscal year ended March 31, 2017
There are no significant differences between the disclosed consolidated statement of cash flows under JGAAP and thedisclosed consolidated statement of cash flows under IFRS.

25