NORITAKE CO., LIMITED

Annual Report 2011
Year Ended March 31, 2011

INDUSTRIALPRODUCTSCERAMICS &MATERIALS

ENGINEERINGTABLETOPProfile

Noritake Co., Limited has developed technologies
acquired from ceramics manufacturing expertise andhas expanded its business into such fields as grinding and polishing tools,
electronic component materials and manufacturing equipment.
With a focus on developing new products andtechnologies for energy-related industries—
including solar cells, an area of promising growth—
Noritake seeks to create new value for customers and society.

Medium-Term Business Plan
Since the worldwide economic recession, the business environment has enormously changed.
The demand is shifting to emerging countries and environmental problems are seriously worsening.
Confronted with this situation, Noritake formulated new Medium-Term Business Plan, which started in April 2010.
The fundamental points of these strategies are:1. Focusing management resources on the growing and expected new business areas
2. Enhancing unique technologies and new product development to take competitive advantages
3. Developing new markets mainly in emerging countries to raise overseas sales
4. Reducing costs by raising the proportion of overseas production
5. Streamlining management systems and enhancing management structure.

Through the above actions, the Noritake group is taking steps to secure greater corporate value.

Contents
1 Six-Year Financial Summary
12 Corporate Governance

2 Message from the Management

14 Consolidated Financial Review

19 Consolidated Statements of Changes in Net Assets
31 Report of Independent Auditors

5 Review of Operations

9 Topics

17 Consolidated Balance Sheets

20 Consolidated Statements of Cash Flows

10 Research & Development

18 Consolidated Statements of Operation
21 Notes to Consolidated Financial Statements

32 Overseas Network / Directors, Statutory Auditors and Executive Officers 33 Corporate Data / History of NoritakeS i x - Y e a r F i n a n c i a l S u mm a r yMillions of yen

Thousands of
U.S. dollars

2011

2010

2009

2008

2007

2006

2011

¥105,378¥ 87,596¥112,984¥133,368¥129,240¥123,207$1,269,614

Operating income (loss)

4,326(1,665)808

10,488

9,463

8,361

52,120

Income (loss) before income
taxes and minority interests

3,703(3,354)(3,059)10,171

10,3989,009

44,614

Net income (loss)

1,858(4,501)(6,861)

5,669

5,796

5,031

22,386

13.16¥ (31.32)¥ (46.82)

¥

38.36

¥

39.20

¥

33.50

¥

¥

¥

5,084

¥

4,080

¥

3,413

For the year:
Net sales

Net income (loss) per share(yen/U.S. dollars)¥

Capital expenditures

2,907

5,122

$

0.16

At year-end:
Total assets
Total shareholders’ equity¥116,126¥109,595¥113,077¥141,644¥148,827¥143,433$1,399,108

60,11060,07062,16378,083

79,27076,025724,217

49.5

54.2

55.0

55.1

53.3

53.0

Total shareholders’ equity ratio (%)

Note: The U.S. dollar amounts above have been translated at the rate of ¥83 to US$1.

Net Sales

Operating Income (Loss)Net Income (Loss)Net Income (Loss) per Share(Millions of yen)

(Millions of yen)

(Millions of yen)

(Yen)

133,368

5,669

10,48838.36

112,984
105,378
13.16

1,858

87,596(46.82) (31.32)(6,861) (4,501)
4,326

808
(1,665)

’ 08

’09

’10

Noritake Co., Limited’ 11

Annual Report 2011

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1

Message from the Management

Noboru Akahane

Hitoshi Tanemura

Chairman and Representative Director

President and Representative Director

The management of Noritake Co., Limited wishes to thank all
stakeholders for their support over the past fiscal year. In addition,
we would like to take this opportunity to comment on
the Group’s results for fiscal 2011, ended March 31, 2011.

Performance Overview for Fiscal 2011
The business environment in fiscal 2011 was characterized by a progressive recovery in the
global economy driven by a remarkable level of economic growth in China and other emerging markets. Conversely, there were several causes for concern stemming from the resurgent economic crises in certain Euro Zone countries, the high prices of petroleum and othernatural resources, and increased agricultural prices caused by inclement weather. In addition, March 2011’s Great East Japan Earthquake and the subsequent nuclear accident havecast a shadow over future economic conditions in Japan. Given the enormous damage

2

Noritake Co., Limited

Annual Report 2011

caused by the disaster, the Noritake Group has donated a total of ¥100 million to theJapanese Red Cross Society in order to provide assistance to victims and make a usefulcontribution to stricken areas. We would like to take this opportunity to extend our deepest
sympathies to the victims of the disaster and our sincerest wish for the earliest possible
recovery of affected areas.
Amid these operating conditions, Noritake formulated and initiated in fiscal 2011 a threeyear medium-term business plan.

The following five key initiatives form the core strategies of this plan,
which we have done our utmost to achieve:
1.	Selecting and concentrating businesses
2.	Strengthening new product and technological development
3. Penetrating overseas markets
4.	Reducing costs by further expanding overseas production
5.	Upgrading management infrastructure“Selecting and concentrating businesses” involved augmenting measures related to
expanding fields and markets. In terms of “strengthening new product and technologicaldevelopment,” product development in new energy areas resulted in an increase in orders
for electronic paste used as electrodes on solar cells as well as for kilns and dry furnaces
to manufacture lithium-ion batteries. At the same time, Noritake made progress towards
the commercialization of diamond wire. “Penetrating overseas markets” has focused onmarket development in such rapidly growing emerging countries as China and Thailand.
With regard to “reducing costs by further expanding overseas production,” we have
expanded procurement from such countries as Indonesia, Sri Lanka and China. Finally,“upgrading management infrastructure” entailed promoting a streamlined and unified management structure through Noritake’s absorption of two key subsidiaries. We also bolstered
our management infrastructure primarily by upgrading personnel and accounting information systems as well as frameworks to promote compliance, health and safety, and environmental management.

Noritake Co., Limited

Annual Report 20113

As a result of the aforementioned factors, the Noritake Group posted in the period underreview an increase of 20.3% in consolidated net sales, to ¥105,378 million, while operating
income and net income amounted to ¥4,326 million and ¥1,858 million, respectively.

Basic Policy Regarding Earnings Distribution
Noritake has positioned returning profit to shareholders as a key management policy. Basedon this policy, we place emphasis on stable dividend payments over the long term and the
distribution of earnings by comprehensively taking into consideration factors that include
performance results, financial conditions and future business development. In addition, we
make effective use of retained earnings for development investment aimed at creating newtechnologies and products that can become a foundation for the Noritake Group’s future
strength, as well as for capital investment for sustainable business development in growthfields. With regard to dividend payments, Noritake distributed ¥2.5 per share as the fiscal
year-end dividend, which, when added to the interim dividend already paid, made for a fullyear dividend of ¥5.0 per share.
Despite expectations that demand will continue to rise in emerging markets, Noritake faces
extremely uncertain economic conditions for the foreseeable future. This is attributable tothe impact of the Great East Japan Earthquake as well as concerns over high international
natural resource and energy prices. Through the concerted and unified efforts of all executive officers and employees of the Noritake Group to steadily implement the medium-termbusiness plan’s core strategies, Noritake aims to establish a growth trajectory responsive tochanging times.
We ask for the continued understanding and steadfast support of our shareholders.

4Noboru Akahane

Hitoshi Tanemura

Chairman and Representative Director

President and Representative Director

Noritake Co., Limited

Annual Report 2011

R e v i e w o f Op e r at i o n s

INDUSTRIAL PRODUCTS

35.5%
Breakdown of Sales

Sales

Sales

Sales

(Millions of yen)

(Millions of yen)

(Millions of yen)

37,422

Sales

39,925(Millions of yen)
9,386

19,546

8,485

34,660 *29,028’ 10

14,521

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Business Status

Business Strategy

Demand for grinding wheels and cubic boron nitride (CBN)In light of the urgent need to develop operations for growing

tools in the automobile, steel-making and bearing industries

emerging markets, Noritake is building manufacturing bases

was generally favorable in Japan. In combination withand strengthening its sales capacity to compete in theseexports, sales for these items increased. Demand recovered

promising overseas markets. At the same time, we will workfor diamond tools in the automobile, electronics and semi-

to develop and expand sales of competitive new products

conductor industries, while demand for abrasive cloth andfor such growth areas as diamond wire and high-precisionpaper rebounded in the automobile and steel-making indus-

grinding tools.

tries. Accordingly, sales for these product rose. As a result,

33.1

32.8

consolidated net sales%of the Industrial Products Group %improved 28.9% year on year to ¥37,422 million.

Noritake Co., Limited

Annual Report 2011

16.6

%

10.7

%

5

Ceramics & Materials

37.9%
Breakdown of Sales

Sales

Sales

(Millions of yen)

(Millions of yen)Sales

37,422(Millions of yen
39,92534,660 *29,028

’10

14

’11

’10

’11

’1

Business Status

Business Strategy

Sales of electronic pastes throughout the year were strong

Aiming to meet market needs with highly functional products,

owing to firm demand for ceramic capacitors and higher sales

Noritake will promote the improvement of existing technolo-

in the solar cell field. Although sales of vehicle-mounted thickgies and the development of new technologies. At the same

film circuit substrates and dental-related products were slug-

time, we will bolster our production and sales structures togish, catalyst supports, gypsum and fluorescent display tubes

respond to vigorous overseas demand. Moreover, Noritake

experienced higher sales. Ceramic materials and electronic

aims to expand the dental business by utilizing its merger

components sales increased significantly for uses in suchwith Kuraray Medical Inc. on April 1, 2011 to foster coopera-

products as liquid crystal panels, optical glass and ceramiction in the areas of development, manufacturing and sales.

capacitors. As a result, consolidated net sales for the*This figure is the total of the Ceramics & Materials Group and the former

Ceramics & Materials Group grew 15.2% to ¥39,925 million.

Electronics Group. From April 2010, the Electronics Group is consolidated into

33.1

%

32.8

%

the Ceramics & Materials Group.

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Noritake Co., Limited

Annual Report 2011

1

ENGINEERING

18.5%
Breakdown of Sales

Sales

Sales

(Millions of yen)

5

8%(Millions of yen)
9,386

19,546

8,485
14,521

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Business Strategy

Business Status
In the mainstay heating business, domestic orders from the

Noritake will focus on expanding sales of kilns and dry fur-

expanding lithium-ion battery industry along with exports led

naces in the lithium-ion battery and new energy fields. In

to a major jump in sales. Turning to the machine tool oil busi-

addition, we will take steps to reduce costs, primarily by

ness, orders recovered in areas including mixers used in

expanding overseas procurement and strengthening pricemachine tool filtration equipment and optical plants.

competitiveness.

Conversely, the machinery business recorded a major drop insales due to slackening demand for large-sized grinding
machines in the steel-making industry. As a result, consoli-

16.6

10.7

dated net sales for the%Engineering Group increased 34.6%%
year on year to ¥19,546 million.

Noritake Co., Limited

Annual Report 20117

TABLETOP

8.1%
Breakdown of Sales

Sales

Sales

Sales

(Millions of yen)

(Millions of yen)

(Millions of yen)

37,422

Sales

39,925(Millions of yen)
9,386

19,546

8,485

34,660 *29,028’ 10

14,521

’ 11

’ 10

’11

’10

’11

’10

’11

Business Status

Business Strategy

Despite orders from hotels and restaurants in Japan remain-

Noritake plans to develop and release big-ticket items to

ing on par, ongoing curbs in consumer spending in Japan,

meet anticipated demand for luxury and casual tableware in

the United States, Western Europe and other advanced mar-advanced countries and to increase brand power. We willkets led to a fall in sales. By contrast, sales in Asia remained

also work to secure sales and improve earnings by bolsteringrobust in the consumer and business-use sectors. As amarketing activities targeting wealthy customers in emerging

result, the Tabletop Group posted a decline in consolidated

markets.

net sales of 9.6% to ¥8,485 million.

33.1
8

%

32.8

%

16.6

%

10.7
Noritake Co., Limited%

Annual Report 2011

TO P I C S

Noritake Establishes Showroom in the Bund, Shanghai’s Luxury Brand District
Noritake established theucts received high ratings at an exhibition geared toward

Noritake Okura Showroom ataffluent consumers held in Shanghai in October 2010,

Bund 18, Shanghai’s premierallowing Noritake to make a solid step forward in thebrand store shopping district on

development of the Chinese market. As a result, we set

April 1, 2011.

up our showroom at Bund 18, the focal point of the

Noritakeexpects

futureworld’s leading brand stores in Shanghai.

demand for high-quality, luxury

Looking ahead, we will conduct market surveys throughtableware and expensive interi-exhibits and sales of Noritake and Okura premium-quality

ors to increase in China, which is enjoying dramatic eco-china at the Noritake Okura Showroom at Bund 18. At

nomic growth. Accordingly, we have established Noritake

the same time, we will use this showroom as a base to

Okura Showroom at Bund 18, which will serve as a basepromote these luxury brands in China.

to expand the sales of these items. Noritake brand prod-

Noritake SA (Thailand) Co., Ltd. (NSAT) Manufacturing Subsidiary Established to Produce SuperAbrasive Grinding Processing Tools in Thailand
In April 2011, Noritake established the wholly owned

establish the new subsidiary with the aim of expanding its

subsidiary NSAT to manufacture diamond and cubic

overseas businesses. In addition, NSAT will serve as aboron nitride (CBN) super-abrasive grinding processing

sales base for countries throughout Southeast Asia.

tools in Thailand.
In recent years, Southeast Asia, and Thailand in particular,

1) Company name:

Noritake SA (Thailand) Co., Ltd. (NSAT)

2) Location:

Saraburi, Thailand

3) Capital

360 million baht (approximately ¥1.0 billion)

has experienced a dramatic growth in industrial production mainly in the automotive, automotive-related, bearing
and electronic component industries. Amid expectations
that such growth will increase, Noritake decided to

Noritake Commences Integrated Production at U.S. Vitrified CBN Grinding Wheel Plant
Noritake announces the installation of new grinding wheel

W ith a view to further

forming and firing equipment at its U.S. vitrified CBN grind-e xpa ndi ng o ur m a rk e t

ing wheel plant to enable integrated local production.

share in North America,

Our U.S. vitrified CBN grinding wheel plant commenced

Noritake has established an

assembly operations based on the knockdown system in

integrated local production

2003, where we attach vitrified CBN grinding wheel seg-

structure in order to focus

ments (semi-finished goods) imported from Japan to wheel

further on exacting customer demands for quality and tocores (metal, etc.) and various quills. Noritake currently

shorten delivery schedules. We believe this will help us tosells vitrified CBN grinding wheels to Japanese companies

firmly secure our position as a premium vitrified CBN grind-and local automotive parts manufacturers.

ing wheel manufacturer in the North American market.

Noritake Co., Limited

Annual Report 20119

RESEAR C H & DEVELO P M ENT

The R&D activities of the Noritake Group
primarily revolve around the Research and

INDUSTRIALPRODUCTS

Development Center, which is principally
involved in basic research, and the Strategy
Development Center, which promotes thecommercialization of projects that are directly
High-accuracy resinoid wheel“Flatdy”

connected to the business divisions. Noritake
carries out product development for new
technologies and new fields in collaboration witheach business division and Group company.
The R&D expenditures of the Noritake Groupamounted to ¥2,853 million in the fiscal year

Ceramics &Materials

under review.
R&D activities by business segment were as
follows.
Electronic paste for solar cells“Maxsunny”

R&D Expenditure(Millions of yen)
2,828

2,887

2,853

’09

’10

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ENGINEERING

Silicon block grinder

Tabletop“N4”
Noritake china

10

Noritake Co., Limited

Annual Report 2011

To respond to expanding sectors and market changes, Noritake has been focusing its efforts on strengthening its development
capabilities by relying on basic technologies and developing differentiated products. Noritake is augmenting the development of
ecologically friendly processing tools in such growth areas as solar cells and LEDs. In the transportation equipment field (which
includes automobiles, railways and aircraft), we are promoting the development of higher-performance, lower-cost products with theaim of addressing market changes.
 The R&D expenditures in the Industrial Products segment totaled ¥562 million in the fiscal year under review.

In the electronic paste business, the Ceramic and Materials segment focuses on the development and commercialization of electrodepaste for solar cells that feature high-generation efficiency. In addition, we have initiated the full-scale development of pastes for insulatingand electrode-layered LEDs used primarily in lighting and LED TV backlights.
 In the ceramics business, we developed high-performance ceramic carriers for chemical plants and thick-film, multi-layer substrates forautomobiles. Noritake Dental Supply Co., Limited. is developing CAD/CAM system products for manufacturing ceramic frames, including
those for which dental porcelain is used, as well as products in response to the increasing prevalence of ceramics in dental materials.
 KCM Corporation is developing particulate material compounds for use in the growth field of multilayer ceramic capacitors (MLCCs),
materials for fiber optic communication components and high-purity silica. Moreover, Noritake Itron Corporation—a leading manufacturerof vacuum fluorescent display (VFD) tubes and VFD module products—is currently developing a VFD message display, mainly used instores, information and reception displays in public places, and disaster-related wireless systems.
 The R&D expenditures in this segment were ¥1,630 million.

The Engineering segment conducts research into
products and equipment for future growth fields
that include lithium-ion batteries and other energy
related products.

R&D for New Products and Technologies
Noritake focuses on developing new products for the environment and energy fields by utilizing its materials, calcina- The R&D expenditures in this segment amounted to ¥125 million.

tion and fabrication technologies, while augmenting andexpanding the applications of such technologies. Noritake
actively promotes joint R&D and technological exchanges
with outside companies, universities and research institutions. At the same time, we participate in government projects and other related activities. Through these initiatives,

The Tabletop segment continues to work todevelop new decorating technology and enhance
the quality of porcelain.
 The R&D expenditures in this segment totaled

each Noritake business segment works in unison to undertake strategic R&D with a long-term perspective.
Core basic R&D expenditures totaled ¥477 million.

¥57 million in fiscal 2011.

Noritake Co., Limited

Annual Report 201111

C OR P ORATE G OVERNAN C E(1) Corporate Governance Structure(iii) Status of internal control system upgrades(i) Overview of corporate governance structure

Since fiscal 2007, the Noritake Group has been working to build andComprising its corporate governance structure, Noritake has posi-

maintain a framework in which it forms project-based structures,

tioned the Board of Directors as the body that decides on important

advances the documentation of adherence to rules and operational

matters, including those stipulated by management’s basic policy andprocesses and addresses the systemization of internal controls related

the law. Noritake has also introduced an executive officer system toto financial reporting. Furthermore, with regard to the stipulation of inter-clarify executive responsibilities and to delegate authority with the objective

nal control rules, and the status of their maintenance and implementa-of further reinforcing the execution of business based on decisions madetion, Noritake conducts monitoring from the perspective of the risk ofby the Board of Directors. In addition to executive officers involved inmaterial misstatements related to financial reporting, among other mea-

business operations, the Board of Directors meets, in principle, oncesures, as it strives to preserve and improve its internal control system.

a month to ensure uniformity of understanding across the entire Group.

Through the Compliance Committee and the activities of persons

Furthermore, such matters as surplus dividends and items stipulated inappointed to have compliance responsibilities under the committee’s

Article 459-1 of the Corporation Law are addressed as matters for res-authority, the Company is working to bolster its internal controls systemolution by the Board of Directors, unless otherwise stipulated by law,from the compliance standpoint.

with the aim of being able to flexibly return profits to shareholders.
With regard to important management matters, Noritake has estab-(iv) Status of risk management system upgrades

lished a structure to perform accurate and quick decisions after careful

Strengthening the ongoing compliance structure of the Group as adeliberation at the Executive Council, which meets weekly, in principle.

whole, Noritake works to maintain risk management systems to pre-Directors are elected at the Company’s Annual General Meeting ofvent the Group from entering into a crisis situation due to misconduct

Shareholders, which is attended by at least one-third of the shareholders with exercisable voting rights, and after a majority of said voting

associated with the violation of the law.
Should the Group be faced with any risk that might damage its cor-rights is obtained, although not by cumulative voting. Noritake limits theporate value, such as a case of misconduct, an accident or disaster,number of directors to 18. The tenure of directors at Noritake and the“Risk Management Regulations” have been formulated to minimize

Group has been set at one year. The purpose of this system is to makelosses and to enable operations to continue with minimal disruption. In

possible the active building of a management structure optimally suitedthe event that a crisis does arise, a task force will be established in

to today’s turbulent business environment and to clarify management

immediate response.

responsibilities anew with each fiscal year.
Board of Directors’ meeting resolution, Noritake decided that it would(2) Status of Internal Audits and Audits by
Corporate Auditors and Independent Auditors

be able to exempt directors and auditors (including former directors

The Audit Office (comprising four personnel) serves as the Company’s

and auditors) from liabilities for damages incurred as a result of the exe-internal audit department and implements operational and accounting

cution of their duties, within the limit of laws and regulations, with theaudits. Audit results are reported to the divisional head and the generalaim of having them fully perform the roles expected of them by the

manager in charge of business operations, and, in the event that any

Board of Directors and auditors.

significant problems are identified, the Audit Office is required to notify

In accordance with Article 426-1 of the Corporation Law and by

Noritake aims to affect smooth operations by reducing the quorum
necessary for extraordinary resolutions at the General Meeting of

the Executive Council.
The Board of Auditors is composed of two full-time corporate audi-

Shareholders. Resolutions proposed for approval at the Company’s

tors and two outside auditors. Besides stipulating such matters as

Annual General Meeting of Shareholders, in accordance with the provi-

audit guidelines and the division of duties, the Board of Auditors

sions of Article 309-2 of the Corporation Law, must be ratified by areceives reports from each auditor providing the actual audit status andtwo-thirds majority vote of shareholders in attendance whose total vot-

results and expedites the flow of information between the Board ofing rights account for one-third or more of all exercisable voting rights.

Directors and the Audit Office, which serves as the internal audit

Although the establishment of a “company with committees” is rec-department. In addition to working to gather information, auditors

ognized, Noritake decided to use a corporate auditor system.

attend meetings of the Board of Directors and Executive Council aswell as other important meetings, where they receive status reports on(ii) Reasons for applying corporate governance system

the execution of executives’ duties and ask for explanations when theWith the advancing globalization of business, the effects of corporateneed arises. Furthermore, Noritake’s accounting auditors maintain theiractivities are being held to increasingly strict standards of corporate

independence and confirm the implementation of appropriate audits.

social responsibility. Each Group executive and employee is heir to the

The Board of Auditors receives status reports from the accounting

spirit of Noritake’s founder, on which basis the Noritake Groupauditors on the execution of duties and requests explanations when theStatement of Corporate Ethics was formulated. In observing and put-need arises.

ting that statement into practice, they apply this corporate governanceIn the Audit Office, auditors and accounting auditors work in close col-structure to realize a Noritake Group with even higher standards of cor-laboration to maintain the effectiveness of internal audit implementation.

porate ethics.

12

Noritake Co., Limited

Annual Report 2011

Noritake’s independent auditor is KPMG AZSA LLC (name changed
from KPMG AZSA & Co. as of July 1, 2010), as established by contractual ties, which assigns managing partners to Noritake to implement
audits from an independent perspective.
In the fiscal year under review, the managing partners assigned to
Noritake by the then KPMG AZSA & Co. were as follows:(Specified employees and managing partners)
		

CPA Kanemaru Yasui		CPA Chika Matsumoto		

CPA Hideki Saito(4) Compensation to Directors and Auditors(i) Total executive compensation by executive officer category,
total compensation by type, and number of officers eligible
Executive
Officer
Category

Compensation
Amount(Millions of yen)

Total Compensation by Type(Millions of yen)
Basic
Stock
Compensation Options

No. ofOfficers
Eligible

Contribution Retirement
Benefits

Director

320

298

—

—

22

10

Auditor (excl. outside auditors)

38

38

—

—

—

2

Outside auditor

32

18

—

—

13

4

(Assistants)		Eleven CPAs and 10 others(3) Outside Directors and Auditors
Noritake has two outside auditors.
No personal, capital or business relationships or other conflicts ofinterest exist between Noritake and its outside auditors Yasumasa
Gomi and Mitsuo Kinoshita, who were in office for the fiscal year
under review.
Furthermore, they reflect their wealth of experience and broad insightas business managers in Noritake audits.
Together with the two full-time corporate auditors, the outside auditors are mandated to audit the Board of Auditors in the execution of its(ii) Policy details and decision-making process with regard to
executive compensation and its methods of calculation
At the 109th Annual General Meeting of Shareholders, which was heldon June 28, 1990, the decision was taken to limit Noritake’s total executive compensation to ¥40 million or less per month for directors and¥6 million or less per month for auditors.

(5) Details of Compensation Paid to Independent
Auditor, etc.
(i) Details of independent auditor compensation, etc.
Category

duties and the operations and assets of Noritake and its subsidiaries. In
addition, the outside auditors conduct audits based on reports
received from the independent accounting auditors regarding theCompany’s consolidated financial statements and financial statements.
In addition, working closely with the Audit Office, the outside auditors
contribute to efficient internal audits.
The Company concludes limitation of liability contracts with eachoutside auditor in accordance with the provisions of Article 423-1 of thePrevious Consolidated
Accounting Year

Consolidated Accounting
Year under Review

Compensation
Based on Audit
Certification
Services (Yen)

Compensation
Based on Audit
Certification
Services (Yen)

Compensation
Based on NonAuditing Services(Yen)

Compensation
Based on NonAuditing Services(Yen)

Parent company

57,000,000—

57,000,000

8,000,000

Consolidated
subsidiary

21,000,000—

21,000,000

—

Total

78,000,000—

78,000,000

8,000,000

Corporation Law. As such, the maximum amount of liability stipulatedby the aforementioned contracts is the minimum amount determined(ii) Other significant details regarding compensation

by law.

Noritake Co., Inc., a Noritake subsidiary, paid compensation based on

With regard to management and decision-making functions as wellaudit certification services of ¥20 million to KPMG LLP, which belongs

as its Board of Directors, which fulfills the management oversight func-

to the same corporate network as the Company’s independent auditor,tion in terms of the business execution of its directors, Noritakein the consolidated accounting year under review. In the previous con-strengthens management oversight by having two of four auditors fromsolidated accounting year, the amount for such services had totaled

outside the Company. In corporate governance, Noritake places the¥24 million.

utmost importance on external, objective and neutral management
oversight functions. On the grounds that audits are implemented by
two outside auditors, Noritake has not elected any outside directors as(iii) Details of non-auditing services provided to the Company by
the independent auditor

the external management oversight function is adequately performed

In the year ended March 31, 2011, the Company paid compensation toby the system that is in place.

its CPA for such non-auditing services as advisory services in connection with the introduction of International Financial Reporting Standards(IFRS) and the drawing up of papers, such as letters of comfort on theissuance of corporate bonds.
(iv) Policy for determining compensation to independent auditors
The Company calculates compensation to be paid to its CPAs, etc.
taking into account such factors as the number of days of the audit
and the special characteristics of Noritake’s size and operational
characteristics.

Noritake Co., Limited

Annual Report 201113

C o n s o l i d at e d F i n a n c i a l R e v i e w

Net Sales &Overseas Sales Ratio
Net sales (Millions of yen)Overseas sales ratio (%)

112,984

105,378
87,596

36.0

31.2

29.8

09

10

SCOPE OF CONSOLIDATION
Composed of 29 subsidiaries and 8 associates, the Noritake Group is engaged in the
manufacture and sale of products in fourbusiness segments—Industrial Products,
Ceramics & Materials, Engineering, andTabletop—as well as the provision of services
related to these segments.

11

Operating Income (Loss) &Operating Income (Loss) Ratio
Operating (loss) income (Millions of yen)
Operating (loss) income ratio (%)
4,326
4.1

808
0.7

Industrial Products Segment
In the Industrial Products Segment, grinding
wheel manufacturing is performed by Noritake
Bonded Abrasive Co., Ltd., and one associate
while diamond tool manufacturing is the province of Noritake Super Abrasive Co., Ltd. These
companies supply these products to theCompany. Abrasive cloth and papers are produced by the subsidiary Noritake CoatedAbrasive Co., Ltd. and one associate a portionof these items are supplied to the Company.
In addition to the Company’s sales activities
in Japan and abroad, the Industrial Products
Segment’s domestic sales are primarily handled
by Zen Noritake Co., Ltd. The U.S.-based
Noritake Co., Inc. and three other subsidiaries
undertake sales in overseas markets. Noritake
Coated Abrasive Co., Ltd. conducts direct salesof most of these products both in Japan andoverseas. In addition, the Noritake associate
Nippon Resibon Corporation, engages in the
manufacture and sales of grinding wheels.

(1.9)(1,665)

09

10

11

Net Income (Loss) &Net Income (Loss) Ratio
Net (loss) income (Millions of yen)
Net (loss) income ratio (%)

1,858

1.8

(5.1)

(6.1)

(4,501)(6,861)

09

14

10

11

Ceramics & Materials Segment
In the Ceramics & Materials Group, manufacturing of electronic paste and ceramics is conducted by the Company. Such activities are bolsteredby P.T. Noritake Indonesia along with one subsidiary and two associates. Vacuum fluorescentdisplay (VFD) tubes are produced and supplied
to the Company by Noritake Itron Corporation.
In addition, the subsidiary KCM Corporation andits subsidiaries produce ceramic materials, a
portion of which are supplied to the Company.
In the area of the Company’s domestic andoverseas sales activities, actual sales are
conducted by the integrated manufacturing
and sales subsidiary Noritake Itron Corporation.
U.S.-based Noritake Co., Inc. and three othersubsidiaries conduct sales for the Ceramics &Materials Group in overseas markets. KCM
Corporation undertakes direct sales of most ofthese products both in Japan and overseas.

Moreover, the subsidiary Noritake Dental Supply
Co., Limited engages in the manufacture andsales of dental-related products.
Engineering Segment
In the Engineering Segment, the Company manufactures segment products. Various types ofindustrial furnaces are produced and supplied to
the Company by the subsidiary Noritake TCF
Co., Limited. The Company’s Taiwanese subsidiary Noritake Taipei Co., Ltd. manufactures andsupplies to the Company static mixers. Noritake
engages in sales activities in Japan and abroad.
In addition to the Company’s sales activities
in Japan and abroad, the U.S.-based Noritake
Co., Inc. conducts sales for the Engineering
Segment in overseas markets.
Tabletop Segment
In the Tabletop Segment, in addition to theCompany’s production activities, porcelain tableware is manufactured by the Sri Lanka-based
Noritake Lanka Porcelain (Private) Limited andone associate, which are supplied to the Company.
The Company conducts sales for the
Tabletop Segment in the domestic and overseas
markets. In addition, a Noritake subsidiaryengages in sales in Japan, while the U.S.-based
Noritake Co., Inc. and three other subsidiaries
undertake sales in overseas markets.
Service operations in other areas are handled
by Noritake Garden Co., Ltd, two subsidiaries
and two associates. Philippines-based Noritake
Porcelana Mfg., Inc., which is currently undergoing liquidation procedures, also engages inthese operations.
Performance Analysis
Consolidated net sales rose 20.3% year on yearto ¥105,378 million, mainly due to the Company’s
focus on developing new energy-related products, efforts to penetrate such overseas markets
as China and Thailand, and cost-reduction
initiatives in the area of production.
The cost of goods sold rose 16.3% year on
year to ¥76,388 million in line with an upswing
in net sales. Selling, general and administrative
expenses increased 4.5% year on year to¥24,664 million. As a result, operating income
recovered ¥4,326 million from an operating lossof ¥1,665 million in the previous fiscal year.
Other income (expenses) amounted to

Noritake Co., Limited

Annual Report 2011

expenses of ¥623 million, a ¥1,066 million
improvement from the previous fiscal year. Major
contributing factors included the decrease of aloss relating to disposal of property, plant andequipment and an investment gain based on theequity method of accounting.
As a result of the aforementioned, income
before income taxes and minority interests
amounted to ¥3,703 million. After accounting forincome taxes and minority interests, net income
totaled ¥1,858 million, and net income per shareamounted to ¥13.16.
Financial Position Analysis
Total assets stood at ¥116,126 million, up 6.0%,
or ¥6,531 million, from the previous fiscal
year-end. Current assets totaled ¥65,343 million,up ¥8,991 million, while non-current assets
amounted to ¥50,783 million, down ¥2,460
million. Major factors contributing to the increase
in total assets were rises in cash and deposits,
inventories, and notes and accounts receivable.
Total liabilities as of the end of the consolidated fiscal year under review stood at ¥50,697
million, up 18.2% year on year, or ¥7,813 million.
Despite a decrease in short-term borrowings,
major factors for the increase were rises inbonds, and notes and accounts payable.
Net assets as of the end of the consolidated
fiscal year under review amounted to ¥65,429
million, down 1.9% year on year, or ¥1,282
million. Despite an improvement in retained
earnings, major factors for the decrease werean increase of treasury stock and a decrease ofaccumulated other comprehensive income.
As a result, shareholders’ equity per sharetotaled ¥411.29, down ¥2.04 compared withthe previous consolidated fiscal year-end.
The shareholders’ equity ratio declined to 49.5%
from the 54.2% of the previous fiscal year-end.

Cash Flow Analysis
Cash and cash equivalents on a consolidated
basis at the end of the fiscal year under review
showed a net increase of ¥3,931 million to¥15,765 million. Contributing factors included
revenues from an issuance of corporate bonds
and an increase in refund from fixed deposit.
Free cash flows as of the end of the consolidated fiscal year under review totaled ¥3,457
million.
Net cash provided by operating activities
increased ¥1,959 million year on year to ¥7,294
million. Contributing factors included a reversal
year on year from loss before income taxes of¥3,354 million to income before income taxes of¥3,703 million, a ¥4,574 million improvement intrade payables and a ¥1,462 million upswing in
employee retirement benefit liability. These factors offset a turnaround to a rise of ¥3,367 million in inventories from a decrease of ¥3,537
million recorded during the previous fiscal year.
Net cash used in investing activities
decreased ¥566 million year on year to ¥3,837
million. Outweighing a ¥627 million lower
decrease in property and long-term investments,
contributors to the decline included improvements of ¥875 million in the increase in shortterm investments and ¥567 million in increase inlong-term investments and loans receivable.
Net cash provided by financing activities
amounted to ¥700 million compared with ¥825
million used in financing activities in the previous
fiscal year. Contributing factors included therecording of an inflow of ¥9,949 million following
the issuance of bonds and a ¥2,200 million
upswing in proceeds following an increase inlong-term debt. These factors offset a ¥9,442
million net decrease in short-term borrowings.

Net Income (Loss)
per Share
(Yen)

13.16

(31.32)(46.82)09

Annual Report 201111

Total Assets(Millions of yen)

113,077

109,595

09

10

116,126

11

Total Shareholders’Equity(Millions of yen)

62,16309

Noritake Co., Limited

10

59,39810

57,45811

15

Total Shareholders’Equity Ratio
(%)

55.0

54.2
49.5

09

10

11

Return on Equity
(%)

3.2

(7.4)
(9.8)
09

10

11

FINANCIAL POLICIESThe Noritake Group, in principle, funds general
operations and capital expenditures throughinternal reserves and borrowings. In particular,
working capital for general operations is provided
by short-term borrowings with a maturity of one
year or less. In Japan, Noritake has adopted acash management system under which theCompany centrally procures funds and thenallocates the procured funds to consolidated
subsidiaries in need of operating funds.
Overseas, individual consolidated subsidiaries
adhere to a basic policy of procuring operating
funds themselves in their respective local
currencies.
As of March 31, 2011, the balance of shortterm borrowings totaled ¥1,616 million, most ofwhich is denominated in yen, with the remainder
in five other currencies. Noritake, in principle,
uses its internal reserves for capital expendituresand other long-term investments with a portion
covered by long-term debt. As of March 31,
2011, the balance of long-term debt amounted
to ¥20,328 million.
BUSINESS AND OTHER RISKS
Raw Material and Fuel Price Risk
The Noritake Group conducts operations
centered on ceramic engineering. Like otherindustries, the ceramics industry is subject tomanufacturing cost increases attributable to therise in raw material and fuel prices. While continually working to improve productivity and reduce
costs, Noritake is strategically implementing
upward revisions of its product prices to compensate for such cost increases. However, in theevent that the Company cannot carry out effective measures to deal with sudden cost increases, its business performance and financial
position may be adversely affected.
Exchange Rate Fluctuation Risk
The export ratios of the Tabletop Group and the
Ceramics & Materials Group are high in comparison to Noritake’s other business segments.
Accordingly, unfavorable trends in currency
exchange rates—more specifically, the yen’s
rapid appreciation—may negatively impact theperformance of these business segments, and,
consequently, the entire Company’s performanceand financial position.

16

Disaster Risk
The Noritake Group has a number of businessbases in Japan and overseas. In the event thatthese business bases, particularly manufacturingbases, are damaged by earthquake, fire orother disaster, their operations may have to besuspended for a certain period of time, and thiswould adversely affect Noritake’s businessperformance and financial position.
Overseas Affairs Risk
The Noritake Group is actively promoting overseas operations. Deteriorations in public safety
and security, coupled with changes in politicalconditions, in one of the countries where
Noritake operates may restrict the Company’s
operations. In particular, in the case of war,
civil disturbance, terrorist attack and the like,the Company’s operations may have to besuspended for a certain period of time. Should
this be the case, the Noritake Group’s businessperformance and financial position may be
negatively impacted.
Technology-Related Risk
The Noritake Group is increasingly concentrating
its management resources in such growth fields
as the electronics, semiconductor and energy
industries. These industries are characterized by
the rapid pace of their technological innovationand dynamic demand fluctuations, which cause
participants to experience technology and product obsolescence at shorter intervals than otherindustries. Accordingly, in the event that Noritake
fails to launch new products in a timely manner,
its business performance and financial position
may be negatively affected.
Risks and factors that could have adverse
effects on the Noritake Group’s business performance and financial position are not limited tothose described above. The analysis of risks isbased on information available to the Company’s
management as of March 31, 2011.

Noritake Co., Limited

Annual Report 2011C o n s o l i d at e d B a l a n c e S h e e t s
NORITAKE CO., LIMITED and Consolidated Subsidiaries
March 31, 2011 and 2010

Assets:Current assets:
Cash and cash equivalents (Note 3)
Short-term investments (Notes 3 and 6)
Notes and accounts receivable, net of allowance for doubtful accounts (Notes 3 and 4)
Inventories (Note 5)
Deferred tax assets (Note 14)
Other current assets
			Total current assets
Investments and other assets:
Investment securities (Notes 3 and 6)
Investments in unconsolidated subsidiaries and associates (Note 3)
Deferred tax assets (Note 14)
Other
			 Total investments and other assets
Property, plant and equipment:
Land
Buildings and structures
Machinery and equipment
Construction in progress			 Total property, plant and equipment
Less accumulated depreciation
			 Net property, plant and equipment
			Total assets
Liabilities:
Current liabilities:
Short-term borrowings (Notes 3 and 8)
Current portion of long-term debt (Notes 3 and 8)
Notes and accounts payable (Notes 3 and 7)
Accrued expenses (Note 3)
Income taxes payable (Note 3)
Other current liabilities
			Total current liabilities
Long-term liabilities:
Long-term debt (Notes 3 and 8)
Employee retirement benefit liability (Note 9)
Accrued severance indemnities for directors and corporate auditors
Deferred tax liabilities (Note 14)
Other noncurrent liabilities
			Total long-term liabilities
			Total liabilities
Net assets (Note 13):
Shareholders’ equity:
		 Common stock: 397,500,000 shares authorized		  and 158,428,497 shares issued
		Capital surplus
		Retained earnings
		 Less treasury stock, at cost: 18,728,054 shares		  in 2011 and 14,723,582 shares in 2010
			Total shareholders’ equity
Accumulated other comprehensive income
Minority interests
			Total net assets
			 Total liabilities and net assets

Millions of yen

Thousands of
U.S. dollars(Note 1)

2011

2010

2011

¥ 15,765
1,284
29,97915,551445
2,319
65,343¥ 11,834
1,917
27,561
12,451433
2,156
56,352$  189,940
15,470361,193
187,361
5,361
27,940787,265

15,822
1,569
341
2,919
20,651

17,331
1,526
491
2,828
22,176

190,626
18,904
4,108
35,169248,807

12,011
32,74340,180807
85,741(55,609)30,132¥116,126

11,891
32,83739,720674
85,122(54,055)
31,067¥109,595

144,711394,494
484,096
9,723
1,033,024(669,988)
363,036$1,399,108¥  1,616
44
19,005
2,624
857
1,495
25,641¥ 11,084
1,445
13,561
2,360
447
1,249
30,146$   19,470
530
228,976
31,615
10,32518,012308,928

20,328
1,477
737
2,326
188
25,056
50,697

7,169
1,772
694
3,075
28
12,73842,884244,916
17,7958,879
28,024
2,265
301,879
610,807

15,632
18,83333,257

15,632
18,83332,109188,337
226,904
400,687(7,612)60,110(2,652)
7,971
65,429¥116,126(6,504)60,070(672)
7,313
66,711¥109,595(91,711)724,217(31,952)
96,036788,301$1,399,108

See accompanying Notes to Consolidated Financial Statements.

Noritake Co., Limited

Annual Report 201117

C o n s o l i d at e d S tat e m e n t s o f O p e r at i o n s
NORITAKE CO., LIMITED and Consolidated Subsidiaries
For the Years Ended March 31, 2011 and 2010

Operating revenue:
Net sales (Note 15)

Millions of yen

Thousands of
U.S. dollars(Note 1)

2011

2010

2011

¥105,378¥87,596$1,269,614

76,38824,664
101,052
4,326

65,65823,60389,261(1,665)920,337
297,157
1,217,494
52,120

333
(157)
(92)
(371)
(17)
(200)
—
(119)
(623)
3,703

312
(192)
(210)
(782)
(96)
—
(373)
(348)
(1,689)(3,354)

4,012(1,892)(1,108)(4,470)(205)(2,410)—(1,433)(7,506)44,614

1,095
126
1,221

733
184
917

13,192
1,518
14,7102,482(4,271)

29,904624¥  1,858230¥ (4,501)

7,518$   22,386

Yen

U.S. dollars¥ (31.32)
5.00$   0.16
0.06

Millions of yen

Thousands of
U.S. dollars(Note 1)

Operating costs and expenses:
Cost of goods soldSelling, general and administrative expenses
			Operating income (loss)
Other income (expenses):
Interest and dividend income
Interest expense
Impairment loss on fixed assets
Loss on sales and disposals of property and equipment
Extraordinary severance pay to employees under early retirement plan
Loss on financial support to subsidiaries and associates
Loss from misappropriation
Other, net
			Income (loss) before income taxes and minority interests

Income taxes (Note 14):
Current
Deferred			Total income taxes
Income (loss) before minority interests
Less minority interests in net income of consolidated subsidiaries
Net income (loss)
Per share:
Net income (loss)
Cash dividends¥  13.16
5.00

See accompanying Notes to Consolidated Financial Statements.

C o n s o l i d at e d S tat e m e n t s o f C o m p r e h e n s i v e I n c o m e
NORITAKE CO., LIMITED and Consolidated Subsidiaries
For the Years Ended March 31, 2011 and 2010

2011

2010

2011

¥2,482¥(4,271)$29,904(1,103)
(961)

2,039
530

(13,289)(11,579)

(1)

23

(12)

(2,065)

2,592(24,880)

Comprehensive income:¥  417¥(1,679)$ 5,024Comprehensive income attribute to:
Owners of the parent
Minority interests¥ (122)539¥(2,039)360$ (1,470)
6,494

Income (loss) before minority interests:
Other comprehensive income:Net changes in unrealized gains on available-for-sale securities
Net changes in foreign currency translation adjustments	Share of other comprehensive income of associates accounted forusing equity method
			 Total other comprehensive income

18

Noritake Co., Limited

Annual Report 2011C o n s o l i d at e d S tat e m e n t s o f C h a n g e s i n N e t A s s e t s
NORITAKE CO., LIMITED and Consolidated Subsidiaries
For the Years Ended March 31, 2011 and 2010

Shareholders’ equity
Total
shareholders’equityNumber ofshares ofcommon stock
issuedCommonstock

CapitalsurplusRetainedearnings

Treasurystock

Balance at March 31, 2009
Net loss for the year
Cash dividends
Purchases of treasury stock	  and fractional shares, net
Net changes in items other than
	  shareholders’ equity
Balance at March 31, 2010

158,428,497——¥15,632——¥18,833——¥37,329(4,501)(719)¥(6,497)——¥65,297(4,501)
(719)

—

—

—

—

(7)

(7)

—
158,428,497—
15,632—
18,833—¥32,109—(6,504)—60,070Net income for the year
Cash dividends
Purchases of treasury stock	  and fractional shares, net
Net changes in items other than
	  shareholders’ equity
Balance at March 31, 2011

—
—

—
—

—
—

1,858
(708)

—
—

1,858
(708)

—

—

—

(2)

(1,108)(1,110)—158,428,497—¥15,632—¥18,833¥33,257—¥(7,612)—¥60,110$188,337$226,904$386,855$(78,361)$723,735

­—
­—

—
—

22,386(8,530)——22,386(8,530)

­—

—

(24)

(13,350)(13,374)­—$188,337—$226,904—$400,687—$(91,711)—$724,217

Total
net assets

Millions of yen

Thousands of U.S. dollars (Note 1)

Balance at March 31, 2010
Net income for the year
Cash dividends
Purchases of treasury stock	  and fractional shares, net
Net changes in items other than
	  shareholders’ equity
Balance at March 31, 2011

Accumulated other comprehensive income
Net unrealized
gains onavailable-for-salesecurities

Foreigncurrencytranslation
adjustments

Total accumulated
othercomprehensive
incomeMinority
interests

Balance at March 31, 2009
Net loss for the year
Cash dividends
Purchases of treasury stock	  and fractional shares, net
Net changes in items other than
	  shareholders’ equity
Balance at March 31, 2010

¥1,892——¥(5,026)——¥(3,134)——¥7,029——¥69,192(4,501)
(719)

—

—

—

—

(7)

1,927
3,819

535
(4,491)

2,462
(672)

284
7,313

2,746
66,711

Net income for the year
Cash dividends
Purchases of treasury stock	  and fractional shares, net
Net changes in items other than
	  shareholders’ equity
Balance at March 31, 2011

—
—

—
—

­—
­—

­—
­—

¥ 1,858
(708)

—

—

­—

­—

(1,110)(1,034)¥2,785(946)¥(5,437)(1,980)¥(2,652)658¥7,971(1,322)¥65,429$46,012$(54,108)$ (8,096)$88,108$803,747

—
—

—
—

­
—
­—

­
—
­—

22,386(8,530)

—

—

­—

­—

(13,374)(12,458)$33,554(11,398)$(65,506)(23,856)$(31,952)

7,928$96,036(15,928)$788,301

Millions of yen

Thousands of U.S. dollars (Note 1)

Balance at March 31, 2010
Net income for the year
Cash dividends
Purchases of treasury stock	  and fractional shares, net
Net changes in items other than
	  shareholders’ equity
Balance at March 31, 2011

See accompanying Notes to Consolidated Financial Statements.
Noritake Co., Limited

Annual Report 201119

C o n s o l i d at e d S tat e m e n t s o f C a s h F l o w s
NORITAKE CO., LIMITED and Consolidated Subsidiaries
For the Years Ended March 31, 2011 and 2010

Millions of yen

Thousands of
U.S. dollars(Note 1)

2011

2010

2011

¥ 3,703¥ (3,354)$ 44,614

3,677

3,861

44,301

Cash flows from operating activities:
Income (loss) before income taxes and minority interests
Adjustments for:		Depreciation
		Impairment loss on fixed assets

92

210

1,108

		

Loss from misappropriation

—

373

—

		

Loss on sales and disposals of property and equipment

371

782

4,470

		

Decrease in employee retirement benefit liability(265)(1,727)(3,193)

		

Increase in trade receivables(2,640)(2,114)(31,807)

		(Increase) decrease in inventories(3,367)

3,537(40,566)

		

Increase in trade payables

5,418

844

65,277

		Other, net

755

2,487

9,097

			Subtotal

7,744

4,899

93,301		Interest and dividends received

		Interest paid		Income taxes (paid) refunded

400

321

4,819

(153)

(197)

(1,843)

(697)

312

(8,397)

7,294

5,335

87,880(3,321)(3,140)(40,012)

Increase in long-term investments and loans receivable

(356)

(923)

(4,289)Purchase of additional Investment in subsidiaries

(57)

—

(687)

			

Net cash provided by operating activities

Cash flows from investing activities:
Increase in property, plant and equipment

Decrease in property and long-term investments

142

769

1,711

Increase in short-term investments(163)(1,038)(1,964)

Other, net
			Net cash used in investing activities

(82)

(71)

(988)

(3,837)(4,403)(46,229)

Cash flows from financing activities:
Increase in long-term debt

4,000

1,100

48,193

Repayment of long-term debt

(2,200)(1,100)(26,506)

Proceeds from issuance of bonds

9,949

—

119,867

Net decrease in short-term borrowings(9,465)(23)(114,036)

(708)

(719)

(8,530)

Dividends paid
Purchase of treasury stock and fractional shares(1,114)(9)(13,422)

Proceeds from contributions from minority interests

309

—

3,723

Other, net

(71)

(74)

(855)

700

(825)

8,434

Effect of exchange rate changes on cash and cash equivalents

(226)

158

(2,723)

Net increase in cash and cash equivalents

3,931

265

47,362			Cash and cash equivalents at beginning of year

11,834

11,569142,578			

Cash and cash equivalents at end of year

¥11,834$189,940

			

Net cash provided by (used in) financing activities

			
			

¥15,765

See accompanying Notes to Consolidated Financial Statements.

20

Noritake Co., Limited

Annual Report 2011

N o t e s t o C o n s o l i d at e d F i n a n c i a l S tat e m e n t s
NORITAKE CO., LIMITED and Consolidated Subsidiaries

1. Basis of Consolidated Financial Statements
The accompanying consolidated financial statements of NORITAKE CO., LIMITED (the “Company”) and its consolidated subsidiaries(together with the Company, the “Noritake Group”) have been prepared in accordance with the provisions set forth in the Financial
Instrument and Exchange Law of Japan and its related accounting regulations and in conformity with accounting principles generally
accepted in Japan (“Japanese GAAP”), which are different in certain respects as to application and disclosure requirements fromInternational Financial Reporting Standards (“IFRS”).
The accompanying consolidated financial statements have been reformatted and translated into English, with some expanded descriptions,from the consolidated financial statements of the Company prepared in accordance with Japanese GAAP and filed with the appropriate
Local Finance Bureau of the Ministry of Finance as required by the Financial Instrument and Exchange Law of Japan. Certain supplementary
information included in the statutory Japanese language consolidated financial statements is not presented in the accompanying consolidated financial statements.
The translation of the Japanese yen amounts into U.S. dollar amounts has been included solely for the convenience of readers outside
Japan, using the prevailing approximate exchange rate at March 31, 2011, which was ¥83 to U.S. $1.00. The translation should not be
construed as a representation that the Japanese yen amounts have been, could have been or could in the future be converted into U.S.
dollars at this or any other rate of exchange.
Certain comparative figures have been reclassified to conform to the current year’s presentation.
2. Summary of Significant Accounting Policies(a) Principles of consolidation
The accompanying consolidated financial statements include the accounts of the Company and its significant subsidiaries. Investments insignificant unconsolidated subsidiaries and associates are accounted for by the equity method. Investments in unconsolidated subsidiaries andassociates not accounted for by the equity method are stated at cost. The differences between the acquisition cost of investments in subsidiaries and the underlying equity in the net assets adjusted based on the fair value at the time of acquisition are principally deferred as goodwill or negative goodwill. Goodwill is amortized over five years on a straight-line basis. All intercompany accounts and transactions havebeen eliminated on consolidation.
The numbers of consolidated subsidiaries, unconsolidated subsidiaries and associates for the years ended March 31, 2011 and 2010 wereas follows:
2011

2010

Domestic

12

15

Overseas

11

13

Associates accounted for by the equity method33

Unconsolidated subsidiaries stated at cost

6

6

Associates stated at cost5

5

Consolidated subsidiaries:

During the year ended March 31, 2011 and 2010 respectively, two and four domestic wholly owned consolidated subsidiaries were merged
into the Company in order to concentrate management resources and make the structure of the Noritake Group more efficient. These transactions were accounted for using accounting treatment for business combinations under the common control in accordance with
“Accounting Standard for Business Combinations,” (originally issued by the Business Accounting Council of Japan (“BAC”) and revised by
Accounting Standards Board of Japan (“ASBJ”) as ASBJ Statement No. 21 on December 26, 2008), and “Revised Guidance on AccountingStandard for Business Combinations and Accounting Standard for Business Divestitures,” (ASBJ Guidance No. 10, issued on December 26,2008). In addition, during the year ended March 31, 2011, one domestic consolidated subsidiary was merged into another domestic consolidated subsidiary, and two overseas consolidated subsidiaries were liquidated. During the year ended March 31, 2010, three domestic consolidated subsidiaries were merged into other domestic consolidated subsidiaries, and one overseas consolidated subsidiary was liquidated.
The Company’s overseas consolidated subsidiaries close their books on December 31, three months earlier than the Company and thedomestic consolidated subsidiaries. The Company has consolidated these subsidiaries’ financial statements as of their December 31 yearend because the difference between their fiscal year-end and that of the Company and the domestic consolidated subsidiaries was not
more than three months. Significant transactions during the period between these subsidiaries’ year-end and the Company’s year-end are
adjusted for on consolidation.
(Unification of Accounting Policies Applied to Foreign Subsidiaries for Consolidated Financial Statements)
ASBJ issued Practical Issues Task Force (“PITF”) No. 18 “Practical Solution on Unification of Accounting Policies Applied to Foreign
Subsidiaries for Consolidated Financial Statements.” PITF No. 18 requires that the accounting policies and procedures applied by a parent
company and its subsidiaries to similar transactions and events under similar circumstances should, in principle, be unified for the preparationof the consolidated financial statements. PITF No. 18, however, as a tentative measure, allows a parent company to prepare consolidated
financial statements using its foreign subsidiaries’ financial statements prepared in accordance with either IFRS or U.S. generally accepted

Noritake Co., Limited

Annual Report 201121

accounting principles (“U.S. GAAP”). In this case, adjustments for the following six items are required in the consolidation process so that the
impact on net income is accounted for in accordance with Japanese GAAP, unless the impact is not material.
(a) Goodwill not subject to amortization(b) Actuarial gains and losses of defined-benefit retirement plans recognized outside profit or loss(c) Capitalized expenditures for research and development activities(d) Fair value measurement of investment properties, and revaluation of property, plant and equipment and intangible assets(e) Retrospective treatment of a change in accounting policies(f) Accounting for net income attributable to minority interests(Unification of Accounting Policies Applied to Associates Accounted for Using the Equity Method)
The Company adopted PITF No. 24, “Practical Solution on Unification of Accounting Policies Applied to Associates Accounted for Using theEquity Method”, which was issued by ASBJ and was effective from the fiscal year beginning on or after April 1, 2010. As a result, theJapanese investment company is not allowed to apply the equity method to its investments in associates using their financial information
prepared in accordance with local GAAP. The financial information of associates outside Japan is required to be prepared in accordancewith Japanese GAAP, IFRS or U.S. GAAP. IFRS or U.S. GAAP is allowed only if six specific adjustments are made for significant differences
between Japanese GAAP and IFRS or U.S. GAAP. The adoption of PITF No. 24 had no material effect on the consolidated financial statements for the year ended March 31, 2011.
(b) Cash equivalents
The Noritake Group considers cash equivalents to be highly liquid debt instruments purchased with an original maturity of three months or
less.
(c) Investments and marketable securities
The Noritake Group classifies certain investments in debt and equity securities as “held-to-maturity,” “trading” or “available-for-sale.” Theclassification determines the respective accounting method as stipulated by the accounting standard for financial instruments. According to
the investment policy of the Noritake Group, its securities portfolio consists of available-for-sale securities other than trading or held-tomaturity. The accounting standard requires that available-for-sale securities for which fair value is available be stated at fair value and thatnet unrealized gains and losses on such securities be recorded as a component of net assets, net of applicable income taxes. Gains andlosses on the disposition of available-for-sale securities are computed by the moving average method. Available-for-sale securities without
available fair value are carried at cost determined by the moving average method. Adjustments in the carrying values of individual investment
securities are charged to income through write-downs when a decline in value is deemed other than temporary.
(d) Accounting for derivatives
The Noritake Group is a party to derivative instruments such as foreign currency forward exchange contracts and interest rate swap contracts in the ordinary course of business for hedging purposes to reduce its exposure to fluctuations in exchange rates and interest rates.
Foreign currency forward exchange contracts are accounted for by translating foreign currency denominated assets and liabilities at thecontract rate as an interim measure if certain hedging criteria are met. According to the special treatment permitted by the accounting standard for financial instruments, hedging interest rate swap contracts are accounted for on an accrual basis and recorded net of interest
expense generated from borrowings for the hedged items if certain conditions are met. In addition, during the years ended March 31, 2011
and 2010, the Company had a derivative contract outstanding to hedge the risks associated with the occurrence of an earthquake. As thefair value of the contract was not considered determinable, that derivative contract was not accounted for at fair value.
(e) Inventories
In accordance with the accounting standard for measurement of inventories, inventories held for sale in the ordinary course of business arestated at the lower of cost or net realizable value. If the net realizable value falls below the cost at the end of the period, the cost basis is
reduced to net realizable value and regarded as decreased profitability of inventories. The cost of inventories is determined principally by the
first-in, first-out method.
(f) Allowance for doubtful accounts
The allowance for doubtful accounts has been provided for in the aggregate amount of estimated credit loss based on an individual financial
review approach for certain doubtful or troubled receivables and a general reserve for other receivables based on the historical loss experience for a certain past period.
(g) Property, plant and equipment and depreciation
Property, plant and equipment, including significant renewals and additions, are stated at cost and depreciated principally by the straight-line
method for overseas consolidated subsidiaries and by the declining-balance method for the Company and its domestic consolidated­subsidiaries at rates based on the estimated useful life of the assets. Buildings of the Company and its domestic consolidated subsidiaries
acquired on and after April 1, 1998, however, are depreciated by the straight-line method.
Repair and maintenance expenses are charged to current operations as incurred.
(h) Leases
The Noritake Group capitalizes the assets used under finance leases as lessee that commenced on or after April 1, 2008, except for certain
immaterial or short-term finance leases accounted for as operating leases in accordance with the current accounting standard. Depreciationof leased assets capitalized in finance lease transactions is computed by the straight-line method over the lease term with the assumptionof no residual value. As permitted by the current accounting standard for lease transactions, finance leases as lessee which commenced
22

Noritake Co., Limited

Annual Report 2011

prior to April 1, 2008 and have been accounted for with the accounting treatment similar to that used for operating leases, continue to beaccounted for with an accounting treatment similar to that used for operating leases with disclosure of certain “as if capitalized” information.
(See also Note 10.)(i) Impairment of fixed assets
The Company and its domestic consolidated subsidiaries have adopted “Accounting Standard for Impairment of Fixed Assets” issued by
BAC and the related practical guidance issued by ASBJ. The standard requires that fixed assets be reviewed for impairment whenever eventsor changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss should be recognized in
the income statement by reducing the carrying amount of the impaired asset or a group of assets to the recoverable amount, measured as
the higher of the asset’s net selling price or value in use. Fixed assets include intangible assets, as well as land, plants, buildings and otherforms of property, and are to be grouped at the lowest level for which there are identifiable cash flows separate from those of other groupsof assets. For the purpose of recognition and measurement of an impairment loss, fixed assets of the Company and its domestic consolidated subsidiaries are grouped principally into cash-generating units based on the business division under managerial accounting classification.
The Noritake Group determines if assets are impaired by comparing their undiscounted expected cash flows to the carrying amounts in theaccounting records. An impairment loss is recognized if the undiscounted expected cash flows are less than the carrying amount of theasset. Recoverable amounts are measured based on net selling prices primarily from appraisal valuations.
The Noritake Group recognized impairment loss for the years ended March 31, 2011 and 2010 as follows:
Millions of yen

Thousands of
U.S. dollars

2011

2010

2011

Buildings

¥17

¥129

$  205

Machinery and equipment

—

70

—

Land

75

—

903

Other

—

11

—

¥92

¥210

$1,108(j) Employee retirement benefits
Employees who terminate their service with the Noritake Group are entitled to retirement benefits generally determined by reference to basic
rates of pay at the time of retirement, length of service and the conditions under which the termination occurred.
The Noritake Group recognizes retirement benefits, including pension cost and related liability, based principally on the actuarial present
value of the projected benefit obligation using the actuarial appraisal approach and the fair value of pension plan assets available for benefits
at the fiscal year-end. Unrecognized actuarial differences from changes in the projected benefit obligation or value of pension plan assets
resulting from actual amounts being different from the projected amounts and from changes in assumptions upon which the projectedamounts were based are amortized principally on a straight-line basis over ten years, a period within the average remaining service years of
employees, from the year following the year in which they arise. Past service cost is recognized in a single year as incurred.
(k) Accrued severance indemnities for directors and corporate auditors
The Noritake Group may pay severance indemnities to directors and corporate auditors, subject to the approval of the shareholders. The
Noritake Group has provided for this liability at the amount which would have been payable assuming all directors and corporate auditors
had terminated their service at the respective balance sheet date.
(l) Translation of foreign currency accounts
Receivables, payables and securities, other than stocks of subsidiaries and certain other securities, are translated into Japanese yen at theexchange rate effective at the fiscal year-end. Transactions in foreign currencies are recorded based on the prevailing exchange rate on thetransaction date. Resulting translation gains or losses are included in current earnings.
In respect to financial statement items of overseas consolidated subsidiaries, all asset and liability accounts are translated into yen by applying the exchange rate in effect at the fiscal year-end. All income and expense accounts are translated at the average rate of exchange forthe fiscal year. Translation differences, after allocating portions attributable to minority interests, are reported as foreign currency translation
adjustments in a component of net assets in the accompanying consolidated balance sheets.
(m) Asset retirement obligations
Effective from the year ended March 31, 2011, the Company and its domestic consolidated subsidiaries have adopted the “AccountingStandard for Asset Retirement Obligations” (ASBJ Statement No. 18, issued on March 31, 2008) and “Guidance on Accounting Standard
for Asset Retirement Obligations” (ASBJ Guidance No. 21, issued on March 31, 2008). This Standard requires the Noritake Group to recognize a liability for the asset retirement obligation, which is defined as a statutory or similar obligation with regard to the removal of tangible
fixed assets and incurred when tangible fixed assets are acquired, constructed, developed or used in an ordinary way together with theremoval of hazardous substances, etc., contained in tangible fixed assets, using a method stipulated by law, etc., upon the removal of thetangible fixed assets, even though there may not be any obligation concerning the removal of the tangible fixed assets themselves. As aresult of the above, operating income decreased by ¥3 million ($36 thousand) and income before income taxes and minority interests
decreased by ¥161 million ($1,940 thousand) for the year ended March 31, 2011 from the amounts that would have been recorded with theprevious accounting method.

Noritake Co., Limited

Annual Report 201123

(n) Research and development expenses
Expenses related to research and development activities are charged to income as incurred. Such research and development expenses were
included in cost of goods sold and selling, general and administrative expenses in the accompanying consolidated statements of operations
and amounted to ¥2,853 million ($34,373 thousand) and ¥2,887 million for the years ended March 31, 2011 and 2010, respectively.
(o) Enterprise taxes
When levied as size-based corporate taxes for local government enterprise taxes, the enterprise taxes are calculated based on the “added
value” and “capital” amounts and are recorded in selling, general and administrative expenses.
(p) Income taxes
Income taxes are accounted for by the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the carrying amounts of existing assets and liabilities and their respective tax bases and operating loss carryforwards. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable
income in the years in which the temporary differences are expected to be recovered or settled. The effect of a change in tax rates ondeferred tax assets and liabilities is recognized in the period that includes the enactment date.
(q) Directors’ bonuses
The Noritake Group has adopted ASBJ Statement No. 4, “Accounting Standard for Directors’ Bonuses.” Under the standard, the directors’
bonuses, including those for corporate auditors, are accounted for as an expense of the accounting period in which the bonuses accrue.
(r) Appropriation of retained earnings
Cash dividends are recorded in the fiscal year when a proposed appropriation of retained earnings is approved by the Board of Directors.
(s) Per share data
Net income per share is computed by dividing income applicable to common shareholders by the weighted average number of shares ofcommon stock outstanding during the respective year. Diluted net income per share is not disclosed as the Noritake Group had no diluted
common shares for the years ended March 31, 2011 or 2010.
Cash dividends per share shown for each fiscal year in the accompanying consolidated statements of operations represent dividends
declared as applicable to the respective year.
(t) Consolidated statements of comprehensive income
Effective March 31, 2011, the Noritake Group has adopted the “Accounting Standard for Presentation of Comprehensive Income” (ASBJ
Statement No. 25, issued on June 30, 2010). As a result of the adoption of this standard, the Noritake Group has presented the consolidated statement of comprehensive income in the consolidated financial statements for the year ended March 31, 2011.
The consolidated balance sheet and the consolidated statement of changes in net assets as of and for the year ended March 31, 2010
have been modified to conform with the new presentation rules of 2011. In addition, the Company has presented the consolidated statement of comprehensive income for the year ended March 31, 2010 as well as that for the year ended March 31, 2011.
(u) New accounting standards
Effective from the year ended March 31, 2011, the Noritake Group has adopted “Accounting Standard for Business Combination” (ASBJ
Statement No. 21, issued on December 26, 2008) and the related guidance, “Revised Accounting Standard for Consolidated Financial
Statements” (ASBJ Statement No. 22, issued on December 26, 2008), “Revised Accounting Standard for Research and Development
Costs” (ASBJ Statement No. 23, issued on December 26, 2008), “Revised Accounting Standard for Business Divestitures” (ASBJ
Statement No. 7, issued on December 26, 2008), “Revised Accounting Standard for Equity Methods of Accounting for Investments” (ASBJ
Statement No. 16, issued on December 26, 2008) and “Revised Guidance on Accounting Standard for Business Combinations andAccounting Standard for Business Divestitures” (ASBJ Guidance No. 10, on December 26, 2008).
3. Financial Instruments
Effective from the year ended March 31, 2010, the Company has adopted ASBJ statement No. 10, “Accounting Standard for Financial
Instruments,” revised on March 10, 2008, and ASBJ Guidance No. 19, “Guidance on Disclosures about Fair Value of Financial Instruments,”
revised on March 10, 2008.
(a) Qualitative information on financial instruments
The Noritake Group does not permit the investment of surplus funds in transactions other than short-term bank deposits and uses financing
from corresponding banks and from issuance of bonds to satisfy short-term and long-term funding requirements.
The Noritake Group is exposed to credit risk primarily with respect to trade receivables. In order to reduce the credit risk of these receivables, the Noritake Group performs credit management on a customer by customer basis, including the monitoring of credit balances ofmajor customers on a semi-annual basis and reviewing the credit capacity of customers on a regular basis.

24

Noritake Co., Limited

Annual Report 2011

The Noritake Group holds investments in equity securities which have market risk. However, the fair values of such equity securities, whose
issuers principally have a business relationship with the Company, are monitored on a quarterly basis.
Although trade payables and bank borrowings have a liquidity risk, the Noritake Group performs effective cash flow management.
The Noritake Group is a party to derivative instruments such as foreign currency forward exchange contracts and interest rate swap agreements in the normal course of business principally for hedging purposes in order to reduce its own exposure to fluctuations in exchange
rates and interest rates. These transactions include certain anticipated export sales and import purchases for which foreign exchange forward contracts are used and bank borrowings for which interest rate swap contracts are used. The Noritake Group does not hold or issue
derivative financial instruments for trading purposes. Pursuant to the Noritake Group’s financial management policies, contract balances ofcurrency derivatives are limited to certain anticipated export sales or import purchases and interest rate swap transactions are matched withthe cash flows of the related bank borrowings. The Noritake Group is also exposed to credit risk in the event of nonperformance by counterparties. However, the Noritake Group does not expect nonperformance by counterparties because the counterparties to the derivativetransactions are limited to major banks with relatively high credit ratings.
(b) Fair values of financial instruments
The following table is a summary of the carrying values and fair values of financial instruments, other than unlisted equity securities for which
the fair value is extremely difficult to determine, at March 31, 2011 and March 31, 2010:
Carrying values

Fair values

Differences
Millions of yen

As of March 31, 2011:

Financial assets:
Cash and time deposits¥17,029¥17,029¥  —

Trade receivables

29,91529,915—

15,25915,259—Investment securities:
		Available-for-sale securities
Investments in associates

992

727

(265)

¥63,195¥62,930¥(265)

Short-term borrowings¥ 1,616¥ 1,616¥  —Trade payables

18,37818,378—

Payables included in accrued expenses

1,360

1,360

—

857

857

—

10,000

9,871

(129)

			Total
Financial liabilities:

Income taxes payable
Bonds payable
Long-term bank loans, including current portion
			Total
Derivative instruments

10,200

10,152(48)¥42,411¥42,234¥(177)———

Carrying values

Fair values

As of March 31, 2010:

Differences
Millions of yen

Financial assets:
Cash and time deposits¥13,730¥13,730¥—

Trade receivables

27,43627,436—

16,768

16,768—Investment securities:
		Available-for-sale securities
		

Investments in associates

884

804

(80)

¥58,818¥58,738¥(80)

Short-term borrowings¥11,084¥11,084¥—

Trade payables

12,91812,918—

Payables included in accrued expenses

1,364

1,364

—

			Total
Financial liabilities:

Income taxes payable
Long-term bank loans, including current portion
			Total
Derivative instruments

Noritake Co., Limited

Annual Report 2011

447

447

—

8,400

8,429

29

¥34,213¥34,242

¥ 29

—

—

—

25

Carrying values

Fair values

Differences

Thousands of U.S. dollars

As of March 31, 2011:

Financial assets:
Cash and time deposits$205,169$205,169$   —

Trade receivables

360,422360,422—

		Available-for-sale securities

183,843

183,843—

Investments in associates

11,952

8,759(3,193)$761,386$758,193$(3,193)

Investment securities:

			Total
Financial liabilities:
Short-term borrowings

19,47019,470—Trade payables

221,422

221,422—

Payables included in accrued expenses

16,385

16,385—

Income taxes payable

10,325

10,325—

Bonds payable

120,482

118,928(1,554)Long-term bank loans, including current portion
			Total
Derivative instruments

122,892

122,313(579)$510,976$508,843$(2,133)———

Notes: 1.	Details of the methods and assumptions used to estimate fair value of financial instruments are summarized below
		The fair values of financial instruments include the values based on quoted market prices, or values based on reasonable estimates and assumptions if quoted market prices are not available. Actual results could differ from these estimates.
		 (i) 	The fair value of cash and time deposits, trade receivables, trade payables, short-term borrowings, payables included in accrued expenses andincome taxes payable are approximately equal to their carrying value due to their short-term maturities.
		 (ii) The fair value of equity securities is based on quoted market prices in active markets.
		 (iii)	The fair value of bonds payable is determined by the price presented by corresponding financial institutions.
		 (iv)	The fair value of long-term interest-bearing bank loans is estimated based on discounted cash flow analysis using current interest rates considered to be applicable to similar loans.
		 (v)	See Note 12 for the calculation method for the fair value of derivative instruments such as interest rate swaps or foreign currency forward
exchange contracts. 
2. Unlisted equity securities of ¥1,031 million ($12,422 thousand) and ¥1,096 million at March 31, 2011 and 2010, respectively, were not included in thetable above because they had no quoted market price on securities exchanges and their fair values were considered extremely difficult to determine.
3. Contractual maturities of financial instruments		  The following table presents the contractual maturities of the Noritake Group’s financial instruments at March 31, 2011:
Due in 1 year or lessDue after 1 year
through 5 years

Due after 5 years
through 10 years

Due after 10 years
Millions of yen

Financial assets:
Cash and time deposits¥17,029¥—¥—

Trade receivables

29,915———¥46,944

¥—

¥—

¥—

		Total¥—Thousands of U.S. dollars

Financial assets:
Cash and time deposits$205,169

$—

$—

$—

Trade receivables

360,422———$565,591

$—

$—

$—

Millions of yen

Thousands of
U.S. dollars

		Total

4. Notes and Accounts Receivable
As of March 31, 2011 and 2010, notes and accounts receivable consisted of the following:

2011

2010

2011

Trade notes receivable¥ 5,326¥ 5,812$ 64,169

Trade accounts receivable

24,59021,624296,265

Other

208

309

2,506

Less allowance for doubtful accounts

(145)

(184)

(1,747)¥29,979¥27,561$361,193

26

Noritake Co., Limited

Annual Report 2011

5. Inventories
As of March 31, 2011 and 2010, inventories consisted of the following:
Millions of yen

Merchandise and finished goods
Work in process
Raw materials and supplies

Thousands of
U.S. dollars

2011

2010

2011

¥ 5,768
5,982
3,801

¥ 5,875
3,713
2,863

$ 69,494
72,07245,795¥15,551¥12,451$187,361

For the year ended March 31, 2011, a reversal of write-down of ¥224 million ($2,940 thousand) was recognized as a reduction of costs ofgoods sold.
For the year ended March 31, 2010, a write-down of ¥399 million was recorded as costs of goods sold.
6. Investments
As of March 31, 2011 and 2010, short-term investments consisted of time deposits with an original maturity of more than three months.
At March 31, 2011 and 2010, investment securities consisted of the following:
Millions of yen

Thousands of
U.S. dollars

2011

2010

2011

¥15,259¥16,768$183,843

563

563

6,783

¥15,822¥17,331$190,626

Available-for-sale securities with fair values:
Equity securities
Other securities without fair values

Available-for-sale securities with fair values are stated at fair value with unrealized gains and losses, which are excluded from current earnings, reported as a net amount within the net assets account until realized. As of March 31, 2011 and 2010, gross unrealized gains andlosses for available-for-sale securities with fair value were summarized as follows:
Cost

Gross
unrealized gains

Grossunrealized losses

Fair andcarrying value
Millions of yen

Available-for-sale equity securities:
As of March 31, 2011
As of March 31, 2010

¥10,908¥4,746¥(395)¥15,259

10,561

6,717

(510)

16,768

Thousands of U.S. dollars

Available-for-sale equity securities:
As of March 31, 2011

$131,422$57,180$(4,759)$183,843

The Noritake Group recorded a loss on the write-down of available-for-sale securities due to other-than-temporary impairment in theamount of ¥3 million ($36 thousand) and ¥83 million for the years ended March 31, 2011 and 2010, respectively.
7. Notes and Accounts Payable
As of March 31, 2011 and 2010, notes and accounts payable consisted of the following:
Millions of yen

Trade notes payable
Trade accounts payable
Other

Noritake Co., Limited

Annual Report 2011

Thousands of
U.S. dollars

2011

2010

2011

¥10,283¥ 6,471$123,892

8,095

6,447

97,530

627

643

7,554

¥19,005¥13,561$228,97627

8. Short-term Borrowings and Long-term Debt
Short-term borrowings consisted principally of unsecured bank overdrafts and bank loans with interest at average rates of 0.76% and0.91% per annum for the years ended March 31, 2011 and 2010, respectively.
As of March 31, 2011 and 2010, long-term debt consisted of the following:
Millions of yen

Thousands of
U.S. dollars

2011

2010

2011

Unsecured bonds through December 2015 at a rate of 0.658% per annum¥10,000¥   —$120,482

Unsecured loans from banks and insurance companies due through July 2015
with interest at an average rate of 0.76% per annum at March 31, 2011

10,2008,400

122,892

172

214

2,072

20,372

8,614

245,446(44)(1,445)(530)¥20,328¥7,169$244,916

Millions of yen

Thousands of
U.S. dollars¥    44$    530

Capitalized lease obligations
Less current portion

The aggregate annual maturities of long-term debt are summarized as follows:Year ending March 31,

2012
2013

43

518

2014

5,140

61,928

2015

4,124

49,6872016

11,018132,747

Thereafter

3

36¥20,372$245,446

As is customary in Japan, substantially all bank borrowings are subject to general agreements which provide, among other things, that thebanks may under certain circumstances request additional security for these loans and may treat any security so furnished, as well as cash
deposited with them, as security for all present and future indebtedness. The banks have never requested the Company or its subsidiaries
to submit such additional security. Also, as is customary in Japan, the Company and certain of its subsidiaries may have time deposits withthe banks from which they have short-term and long-term borrowings. However, there are no agreements with any banks which would
require maintaining such deposits.
9. Employee Retirement Benefits
The Noritake Group has defined benefit pension plans and lump-sum retirement benefit plans which substantially cover all employees.
Ten domestic consolidated subsidiaries have joined the Company’s defined benefit pension plans. A consolidated subsidiary located in the
U.S. has a similar defined benefit plan. Three domestic consolidated subsidiaries also participate in a certain corporate pension plan undera multi-employer pension program (see note below).
The following table reconciles the benefit liability and net periodic retirement benefit expense as of and for the years ended March 31, 2011
and 2010:
Millions of yen

Thousands of
U.S. dollars

2011

2010

2011

Projected benefit obligation¥19,137¥18,980$230,566

Less fair value of pension plan assets at end of year

(14,267)(13,102)(171,891)

4,870

5,878

58,675(4,268)(5,591)(51,422)

602

287

7,253

875

1,485

10,542¥ 1,477¥ 1,772$ 17,795

Reconciliation of benefit liability:		Projected benefit obligation in excess of pension plan assets

Unrecognized actuarial differences
Prepaid pension cost		 Balance of employee retirement benefit liability recognized		  on the consolidated balance sheets

Notes: 1.	The projected benefit obligation of certain consolidated subsidiaries with less than 300 employees was calculated using the simplified calculation
method permitted by the accounting standard for employee retirement benefits.
2.	Some of the Company’s domestic consolidated subsidiaries participate in a certain corporate pension plan under a multi-employer pension program established by the subsidiaries together with other employers. As information that would allow a determination of whether the value of the pension plan assets has
been reasonably calculated in the proportion to the contributions made by the subsidiaries is not available, the Noritake Group records the required contributions as net periodic retirement benefit expense for the period, in accordance with the amended accounting standard for employee retirement benefits ASBJ
Statement No. 14. The above table excluded the portion of the pension plan assets under the multi-employer pension program.
28

Noritake Co., Limited

Annual Report 2011	  Information regarding the funded status of the entire corporate pension plan available as of the latest calculation period-ends was as follows:
Millions of yen

Thousands of
U.S. dollars

2011

2011

2010

March 31, 2010:

March 31, 2009:

Pension plan assets¥108,492¥ 93,998$1,307,132

Related benefit obligation under program(136,168)(148,469)(1,640,578)

		¥(27,676)¥ (54,471)$(333,446)

0.7%

3.1%

Latest calculation period-end

Difference, resulting primarily from unamortized past service cost

Ratio of subsidiaries’ contributions to total contributions to entire plan

Millions of yen

Thousands of
U.S. dollars

2011

2010

2011

¥1,081¥1,345$13,024

Components of net periodic retirement benefit expense:
Service cost
Interest cost

367

317

4,422

Expected return on pension plan assets

(183)

(135)

(2,205)

Amortization of actuarial differences

949

1,106

11,434

Amortization of past service cost

—

(45)

—

¥2,214¥2,588$26,675

		Net periodic retirement benefit expense

Major assumptions used in the calculation of the above information for the years ended March 31, 2011 and 2010 were as follows:
2011

2010

Straight-line
methodStraight-line
methodDiscount rate

2.0%

2.0%

Expected rate of return on pension plan assets

2.0%

2.0%

10 years

10 years—

1 yearMethod attributing the projected benefits to periods of service

Amortization of actuarial differences
Amortization of past service cost

10. Lease Commitments
As lessee, the Noritake Group has entered into various rental and lease agreements, principally for office spaces, that are noncancelable orcancelable with a few months advance notice. A lessee, the Noritake Group also leases machinery, office equipment, and vehicles underleases which are not usually cancelable. As disclosed in Note 2(h), finance leases that do not transfer ownership of the leased assets to thelessee which commenced prior to April 1, 2008 and have been accounted for with the accounting treatment similar to that used for operating leases continue to be accounted for with the accounting treatment similar to that used for operating leases, with disclosure of certain“as if capitalized” information, and are not capitalized. The aggregate future minimum payments under such finance leases, including imputed interest, and operating leases as of March 31, 2011 and 2010 were as follows:
Millions of yen

Thousands of
U.S. dollars

2011

2010

2011

Due within one year

¥ 46

¥ 66

$  554Due after one year

14

64

169

¥ 60

¥130

$  723¥ 70¥ 94$  843Finance leases:

Operating leases:
Due within one year
Due after one year

Noritake Co., Limited

Annual Report 2011

91

139

1,097

¥161

¥233

$1,94029

11. Contingent Liabilities
There were no contingent liabilities at March 31, 2011 and 2010.
12. Derivative Instruments
At March 31, 2011 and 2010, all derivative instruments, except for one, were accounted for by hedge accounting. The one exception wasa derivative contract of the Company to hedge the risks associated with the occurrence of an earthquake that was outstanding at March 31,
2011 and 2010. That derivative contract was not accounted for at fair value because the fair value of the contracts was not considered determinable. Derivative financial instruments to which hedge accounting was applied as of March 31, 2011 and 2010 are summarized as follows:
Notional principal or contract amounts
Total

Over 1 year

Fair value
Millions of yen

At March 31, 2011:
Foreign currency exchange contracts (*1):
		Forward - Selling¥  657¥—*

Interest rate swap contracts :
(*2)

		

Fixed rate receipt, floating rate payment

3,000

3,000

*

		

Floating rate receipt, fixed rate payment

1,200

1,200

*

Notional principal or contract amounts (*3)
TotalOver 1 year

Fair value
Millions of yen

At March 31, 2010:
Foreign currency exchange contracts (*1):
		Forward - Selling

¥ 252

—

*

		

Forward - Buying

2

¥

—

*

Interest rate swap contracts :
(*2)

		

Fixed rate receipt, floating rate payment

3,000

3,000

*

		

Floating rate receipt, fixed rate payment

1,200

1,200

*

Notional principal or contract amounts (*3)
TotalOver 1 year

Fair value

Thousands of U.S. dollars

At March 31, 2011:
Foreign currency exchange contracts (*1):
		Forward - Selling$ 7,916$    —*

Interest rate swap contracts :
(*2)

		

Fixed rate receipt, floating rate payment

36,14536,145*

		Floating rate receipt, fixed rate payment

14,45814,458*

Note: (*1)	As derivative instruments, foreign currency forward exchange contracts are accounted for by hedge accounting such that the derivative instruments are not separated from the hedged receivables or payables. Therefore, the fair value of such derivative instruments is reflected in the calculation of the fair value of the related account. (See Note 3.)(*2)	As derivative instruments, interest rate swap contracts are accounted for by hedge accounting such that the derivative instruments are not separated from the hedged bank loans. Therefore, the fair value of such derivative instruments is reflected in the calculation of the fair value of relatedbank loan. (See Note 3.)(*3)	The contract amounts of derivatives which are shown in the table above do not represent the amounts exchanged by the parties and do not measure the Company’s exposure to credit and market risk.

30

Noritake Co., Limited

Annual Report 2011

13. Net Assets
Under Japanese laws and regulations, the entire amount paid for new shares is required to be designated as common stock. However, acompany may, by a resolution of the Board of Directors, designate an amount not exceeding one half of the issue price of the new sharesas additional paid-in capital, which is included in capital surplus.
Under the Japanese Corporate Law (“the Law”), in cases in which a dividend distribution of surplus is made, the smaller of an amount equal
to 10% of the dividend or the excess, if any, of 25% of common stock over the total of additional paid-in capital and legal earnings reserve
must be set aside as additional paid-in capital or legal earnings reserve. Legal earnings reserve is included in retained earnings in theaccompanying consolidated balance sheets. Under the Law, legal earnings reserve and additional paid-in capital can be used to eliminate
or reduce a deficit by a resolution of the shareholders’ meeting. Additional paid-in capital and legal earnings reserve may not be distributed
as dividends. All additional paid-in capital and all legal earnings reserve may be transferred to other capital surplus and retained earnings,
respectively, which are potentially available for dividends.
At both March 31, 2011 and 2010, capital surplus principally consisted of additional paid-in capital, and retained earnings included legal earnings reserve of the Company in the amount of ¥3,480 million ($41,928 thousand).
The maximum amount that the Company can distribute as dividends is calculated based on the nonconsolidated financial statements of theCompany in accordance with Japanese laws and regulations.
During the year ended March 31, 2011, the Company paid interim dividends of ¥2.50 per share, amounting to ¥349 million ($4,205 thousand.) In addition, on May 12, 2011, the Board of Directors of the Company resolved to pay cash dividends as an appropriation ofretained earnings in the amount of ¥349 million ($4,205 thousand, ¥2.50 per share) to the shareholders as of March 31, 2011. The appropriation was not accrued in the consolidated financial statements as of March 31, 2011.
14. Income Taxes
The tax effects of temporary differences that gave rise to a significant portion of deferred tax assets and liabilities as of March 31, 2011 and2010 were as follows:
Millions of yen

Thousands of
U.S. dollars

2011

2010

2011

¥  142¥ 200$  1,711

513

398

6,181

4,458

4,242

53,711

Accrued severance indemnities for directors and corporate auditors

308

281

3,711

Inventories

492

590

5,928

Net operating loss carryforwards

5,555

5,419

66,927

Other

2,163

1,964

26,060Less valuation allowance(8,937)(8,238)(107,675)

4,694

4,856

56,554Gain on transfer of investment securities to trusts for retirement benefit plans

3,289

3,289

39,627

Unrealized gains on available-for-sale securities

1,394

2,147

16,795

Other

18,687

Deferred tax assets:
Intercompany unrealized gains on property
Accrued bonuses to employees
Employee retirement benefit liability

		Total deferred tax assets

Deferred tax liabilities:

1,551

1,571

		

Total deferred tax liabilities

6,234

7,007

75,109		Net deferred tax liabilities¥1,540¥2,151& 18,555

Noritake Co., Limited

Annual Report 201131

As of March 31, 2011 and 2010, deferred tax assets and liabilities were recorded as follows:
Millions of yen

Thousands of
U.S. dollars

2011

2010

2011

¥  445¥ 433$ 5,361

341

491

4,108

Deferred tax assets:
Current
Noncurrent
Deferred tax liabilities:
Current
Noncurrent

—

—

—

2,326

3,075

28,024In assessing the realizability of deferred tax assets, the management of the Noritake Group considers whether some portion or all of thedeferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable
income during the periods in which the temporary differences become deductible. At March 31, 2011 and 2010, a valuation allowance wasprovided to reduce deferred tax assets to the amount the management believed was realizable.
Reconciliation of the difference between the Japanese statutory tax rate and the effective income tax rate on pretax income reflected in theaccompanying consolidated statements of income for the year ended March 31, 2011 was as follows:
Percentage of pretax
incomeJapanese statutory tax rate

40.5%

Increase (decrease) due to:Permanently non-deductible expenses

1.7

Tax exempt income(4.5)

Local minimum taxes per capita levy

2.1

Differences between Japanese and foreign tax rates(2.5)

Changes in valuation allowances(4.3)

Tax credit for research and development expenses

1.3

Other

(1.3)

Effective income tax rate

33.0%

For the year ended March 31, 2010, a reconciliation of the difference between the Japanese statutory tax rate and the effective income tax
rate on pretax income was not disclosed because a loss before income taxes and minority interests was recorded.
15. Segment Information
Effective April 1, 2010, the Company adopted “Accounting Standard for Disclosures about Segments of an Enterprise and RelatedInformation” (ASBJ Statement No. 17, issued on March 27, 2009) and “Guidance on Accounting Standard for Disclosures about Segmentsof an Enterprise and Related Information” (ASBJ Guidance No. 20, issued on March 21, 2008), which requires disclosure based on an operating segment model as the segment reporting bases. Information about industry segments as of and for the year ended March 31, 2010
has been restated in conformity with the requirement of the new standard in the table below.
(a)	General information about reportable segments:
The Noritake Group defines a reportable segment as constituent business unit of the Noritake Group for which discrete financial information
is available and reviewed regularly by the Board of Directors to determine the best allocation of managerial resources and evaluate businessperformance. The Noritake Group’s reportable segments are determined by products and classified into “Industrial Products,” “Ceramics &Materials,” “Engineering,” and “Tabletop.”(b)	Basis of measurement about reportable segments:
The accounting methods used for the reporting segments are consistent with the accounting methods described in Note 2, “Summary of
Significant Accounting Policies.” Total amount of segment income for each reporting segment are presented on an operating income basis,
and intersegment profit is accounted for based on prices of ordinary transactions with independent third parties. Operating expenses notbelonging to reportable segments directly are allocated to each reportable segment.

32

Noritake Co., Limited

Annual Report 2011

(c) Information about reported segments:
Information about reported segment income, segment assets and other items for the years ended March 31, 2011 and 2010 is as follows:
Reported segments
Industrial
Products

Ceramics &Materials

Engineering

Tabletop

Total

Adjustments

Consolidated

Millions of yen

For the year 2011:
Net sales:  External customers¥37,422¥39,925¥19,546¥8,485¥105,378¥    —¥105,378

Segment income (loss)

1,326

3,914

(182)

(732)

4,326

—

4,326

Segment assets

28,99235,943

10,594

7,739

83,26832,858116,126

43

231

521

275

1,070

(1,070)—  Depreciation

1,558

1,391

330

398

3,677

—

3,677

  Investments in equity-method
associates

1,229

—

—

181

1,410

—

1,410

  Increases in tangible andintangible fixed assets

1,446

1,009

140

280

2,875

597

3,472

  External customers¥29,028¥34,661¥14,521¥9,386¥ 87,596¥    —¥ 87,596

Segment income (loss)(1,791)

1,418

(395)

(897)

(1,665)—(1,665)

Segment assets

27,16334,944

7,887

8,816

78,81030,785109,595

Other items:   Intersegment sales and transfers

For the year 2010:
Net sales:

Other items:   Intersegment sales and transfers

27

305

538

429

1,299

(1,299)—  Depreciation

1,517

1,477

386

481

3,861

—

3,861

  Investments in equity-method
associates

1,248

—

—

97

1,345

—

1,345

  Increases in tangible andintangible fixed assets

1,061

989

203

354

2,607

332

2,939

Industrial
Products

Ceramics &Materials

Adjustments

Consolidated

Reported segments
Engineering

Tabletop

Total

Thousands of U.S. dollars

For the year 2011:
Net sales:  External customers$450,867$481,024$235,494$102,229$1,269,614$     —

Segment income (loss)

15,97647,156(2,193)(8,819)52,120—52,120

Segment assets

349,301

433,048

127,639

93,241

1,003,229

395,879

1,399,108$1,269,614

Other items:   Intersegment sales and transfers

518

2,783

6,277

3,314

12,892(12,892)—  Depreciation

18,771

16,759

3,976

4,795

44,301—44,301  Investments in equity-method
associates

14,807

—

—

2,181

16,988—16,988  Increases in tangible andintangible fixed assets

17,422

12,157

1,687

3,373

34,6397,192

41,831

Notes: 1.	Adjustments column in “Segment assets” denotes unallocated general corporate items which were not assigned to specific segments such as cash,
short-term and long-term investments in securities and general managed property.
2. Adjustments column in “Other items: Intersegment sales and transfers” denotes eliminations of intersegment transactions.
3.	Adjustments column in “Other items: Increases of tangible fixed assets and intangible fixed assets” denotes capital expenditures of administrative
department which were not assigned to specific segments

Noritake Co., Limited

Annual Report 201133

(d) Enterprise-wide information:(1) Information about products and services:
Information for each product and service is not disclosed because similar information is disclosed in the segment information above.
(2) Information about geographic areas:
As of and for the year ended March 31, 2011, net sales and tangible fixed assets about geographic areas were summarized as follows:
Japan

North
America

Europe

Asia

Other

Total
Millions of yen

For the year 2011:
Net sales¥67,433¥8,515¥2,360¥26,439¥631¥105,378¥28,049¥  710¥   16¥ 1,122¥235¥ 30,132

Japan

North
America

Europe

Asia

Other

Total

At March 31, 2011:
Tangible fixed assets

Thousands of U.S. dollars

For the year 2011:
Net sales$812,446$102,590$28,434$318,542$7,602$1,269,614$337,940$  8,554$   193$ 13,518$2,831$  363,036

At March 31, 2011:
Tangible fixed assets(3) Information about major customers:
The Noritake Group had no single external customer which accounted for more than 10% of net sales for the year ended March 31, 2011.
(e) Information about impairment loss on fixed assets in reportable segments:
For the year ended March 31, 2011, impairment loss on fixed assets were summarized as follows:
Reported segments
Industrial
Products

Ceramics &Materials

Engineering

Tabletop

Total

Adjustments

Consolidated

Millions of yen

For the year 2011:
Impairment loss on fixed assets

¥46

¥­—

Industrial
Products

Ceramics &Materials

¥­—

¥­—

¥46

¥46

¥92

Adjustments

Consolidated

Reported segments
Engineering

Tabletop

Total

Thousands of U.S. dollars

For the year 2011:
Impairment loss on fixed assets

$554

$­—

$­—

$­—

$554

$554

$1,108

Note: The “Adjustments” column denotes impairment losses on fixed assets in the Company’s administrative department.

34

Noritake Co., Limited

Annual Report 2011

(f) Information about goodwill in reportable segments:
For the year ended March 31, 2011, amortization of goodwill, the unamortized balance and gains arising from negative goodwill were summarized as follows:
Reported segments
Industrial
Products

Ceramics &Materials

Engineering

Tabletop

Total

Adjustments

Consolidated

Millions of yen

As at or for the year 2011:
Amortization of goodwill or
negative goodwill

¥—

¥(11)

¥ 6

¥—

¥ (5)

¥—

¥ (5)

Unamortized balance

—

(21)

6

—

(15)

—

(15)

Gains arising from negative goodwill

¥—

¥ 59

¥—

¥—

¥59

¥—

¥59

Industrial
Products

Ceramics &Materials

Adjustments

Consolidated

Reported segments
Engineering

Tabletop

Total

Thousands of U.S. dollars

As at or for the year 2011:
Amortization of goodwill or
negative goodwill$—$(132)$72$—$ (60)$—$ (60)

Unamortized balance

—

(253)

72

—

(181)

—

(181)

Gains arising from negative goodwill

$—

$ 711

$—

$—

$711

$—

$711

Notes: 1.	Negative goodwill incurred and recognized prior to April 1, 2010 is amortized over five years on a straight-line basis as permitted by the revised
accounting standard for business combination (ASBJ Statement No. 21), and the unamortized balance is denoted in parenthesis.
2.	For the year ended March 31, 2011, the Company recorded gains from negative goodwill arising from the Company’s acquisition of additional equity
securities of a certain consolidated subsidiary from the minority shareholder, in accordance with the revised accounting standard for business combination (ASBJ Statement No. 21).

Information summarized by geographic area for the year ended March 31, 2010, which conforms with standard applicable to that prior year,
is as follows:
Japan

North
America

Europe

Asia

Other

Total

Elimination

Consolidated

Millions of yen

For the year 2010:
Operating revenue—net sales:  External customers  Intersegment sales/transfers
Operating costs and expenses   Operating income (loss)
Identifiable assets¥78,031
5,955
83,986
85,681¥ (1,695)¥6,373
68
6,441
6,604
¥ (163)¥1,560
60
1,620
1,555
¥ 65

¥1,312
1,761
3,073
2,962
¥ 111

¥320
6
326
323
¥ 3

¥87,596
7,850
95,446
97,125¥ (1,679)¥— ¥ 87,596(7,850)—(7,850)87,596(7,864)89,261¥14 ¥ (1,665)¥80,072¥4,646¥1,222¥2,689¥497¥89,126¥20,469¥109,595

For the year ended March 31, 2010, information for overseas sales, including export sales from Japan and net sales of overseas consolidated subsidiaries, which conforms with the standard applicable to that prior year, is summarized as follows:
Millions of yen

For the year 2010:
North America
EuropeAsia
Other¥ 6,770
2,060
18,013467¥27,310Percentage of overseas sales to total consolidated net sales

Noritake Co., Limited

Annual Report 2011

31.2%

35

16. Subsequent Events(a) Establishment of holding company through a joint share transfer
On January 28, 2011, the Company, Kuraray Co., Ltd. (“Kuraray”), its consolidated subsidiary Kuraray Medical Inc. (“Kuraray Medical”) and
Noritake Dental Supply Co., Limited (“Noritake Dental Supply”) signed a basic agreement regarding the integration of the dental materials
businesses of Kuraray Medical and Noritake Dental Supply.
In accordance with this basic agreement, on April 13, 2011, the Company and Kuraray established a joint holding company, Kuraray
Noritake Dental Holdings Co., Ltd. (“KNDH”), which owns the entire shares of Kuraray Medical and Noritake Dental Supply. As subsidiaries
of KNDH, Kuraray Medical and Noritake Dental Supply will promote the business integration of the relevant subsidiaries. KNDH, Kuraray
Medical and Noritake Dental Supply are planned to integrate on April 1, 2012.
1. The outline of this integration is as follows:(1) Name of the integrated companies and description of the integrated business:
Kuraray Noritake Dental Holdings Co., Ltd.
Kuraray Medical Inc.
Noritake Dental Supply Co., Limited
Integrated business: development, production and sales of dental material and CAD/CAM devices(2) Main reasons for the integration:
The growth potential of the domestic dental material business has decreased due to population decrease and medical cost control, therefore, activation of domestic market and development of overseas market are required for Kuraray Medical and Noritake Dental Supply.
Under the circumstance, the Company and Kuraray have decided on the integration of the businesses of Noritake Dental Supply and
Kuraray Medical with the aim of generating a synergy effect from the establishment of a business alliance for development, production andsales in order to increase their market presence both in Japan and overseas.
(3) Establishment Date of KNDH:
April 13, 2011(4) Legal form of business integration:
The Company and Kuraray established KNDH as an intermediate holding company through a joint share transfer. After the establishment, theCompany owns 33.3% issued shares of KNDH and KNDH will be an associate of the Company and accounted for by the equity method.
2. Summary of accounting method implemented is as follows:
As “Revised Accounting Standard for Business Divestitures” (ASBJ Statement No. 7, issued on December 26, 2008) and “Revised
Guidance on Accounting Standard for Business Combinations and Accounting Standard for Business Divestitures” (ASBJ Guidance No. 10,
issued on December 26, 2008) will be applied to this transaction, the Company will recognize goodwill and gain on changes in the
Company’s ownership interest for the year ending March 31, 2012.
(1) Amount of goodwill: ¥845 million ($10,181 thousand)(2) Factors resulting in goodwill:
When a total net asset value of KNDH as of April 13, 2011 is lower than the cost of acquisition, the difference is recognized as goodwill.
(3) Method and period for amortization of goodwill:
The goodwill is to be amortized over 5 years using the straight-line method.
(4) Gain on changes in the Company’s ownership interest: ¥989 million ($11,916 thousand)
3. Related segments: Noritake Dental Supply belongs to Ceramics & Materials Group (segment) of the Company.
4. Operating performance of Noritake Dental Supply included in the accompanying consolidated statements of income forthe year ended March 31, 2011:
Net sales¥2,558 million ($30,819 thousand)Operating income ¥ 204 million ($2,458 thousand)Net income¥ 143 million ($1,723 thousand)(b) Assignments of property
On June 27, 2011, the Board of Directors of the Company resolved an assignment of the Company’s property to a third party as follows:(1) Property to be assigned:
Located in Atsugi City in Kanagawa Prefecture with a book value of ¥417 million ($5,024 thousand) as idle land
(2) Amount of the assignment:¥3,239 million ($39,024 thousand)(3) Planned gain resulting from this transaction, net of estimated disposal cost:¥2,778 million ($33,470 thousand) – Estimated expenses of this transaction is deducted.
(4) Contract date and transaction completion date: June 30, 201136

Noritake Co., Limited

Annual Report 2011

Independent Auditors’ Report

Noritake Co., Limited

Annual Report 201137

Overseas Network

DI R E C TO R S , STATUTO R Y
AUDITO R S AND E X E C UTIVEOFFICERS(As of June 29, 2011)(As of June 29, 2011)

INDUSTRIAL PRODUCTS GROUPCERAMICS & MATERIALS GROUPNORITAKE CO., INC.
4990 ALLIANCE DR.,
MASON, OH 45040, U.S.A.
Tel: 1-513-234-0770 Fax: 1-513-234-0743

NORITAKE CO., INC.
2635 CLEARBROOK DRIVE,
ARLINGTON HEIGHTS, IL 60005, U.S.A.
Tel: 1-847-439-9020 Fax: 1-847-593-2285

NORITAKE EUROPA GmbHKURHESSEN STRASSE 3, D-64546
MÖRFELDEN-WALLDORF, GERMANY
Tel: 49-61-05-2092-43 Fax: 49-61-05-2092-99

ITRON (U.K.) LIMITEDVANTAGE HOUSE, HARFREY’S ROAD,
HARFREY’S INDUSTRIAL ESTATE,GREAT YARMOUTH, NORFOLK, NR31 0LS,
UNITED KINGDOM
Tel: 44-1493-601144 Fax: 44-1493-600343

NORITAKE SHANGHAI TRADING CO., LTD.
ROOM 701 AETNA TOWER NO.107,
ZUN YI ROAD, CHANG NING DISTRICT,SHANGHAI, 200051 CHINA
Tel: 86-21-6237-5667 Fax: 86-21-6237-5790
NORITAKE (Thailand) CO., LTD.
1096 NEW ROAD, KWAENG BANGRAK,KHET BANGRAK, BANGKOK 10500, THAILAND
Tel: 66-2-235-1688, 236-2364
Fax: 66-2-236-2365
SIAM COATED ABRASIVE CO., LTD.
AMATA CITY INDUSTRIAL ESTATE 7-126
MOO 4, T. MABYANGPORN, A. PLUAKDAENG,RAYONG 21140, THAILAND
Tel: 66-3-865-0150 Fax: 66-3-865-0158
TABLETOP GROUPNORITAKE CO., INC.
15-22 FAIR LAWN AVENUE,
FAIR LAWN, NJ 07410, U.S.A.
Tel: 1-201-796-2222 Fax: 1-201-796-9155
NORITAKE CANADA LIMITED
90 NUGGET AVENUE, AGINCOURT,ONTARIO, M1S 3A7, CANADA
Tel: 1-416-291-2946 Fax: 1-416-292-0239
NORITAKE (AUSTRALIA) PTY. LIMITEDUNIT 4, 153 BEAUCHAMP ROAD,
MATRAVILLE, N.S.W. 2036, AUSTRALIA
Tel: 61-2-9316-7123 Fax: 61-2-9316-7085
NORITAKE EUROPA GmbHKURHESSENSTRASSE. 3, D-64546
MÖRFELDEN-WALLDORF, GERMANY
Tel: 49-61-05-2092-20 Fax: 49-61-05-2092-99
NORITAKE LANKA PORCELAIN (PRIVATE)LIMITEDCOLOMBO OFFICE/SHOWROOM
No.580, NEGOMBO ROAD, MABOLE, WATTALA,SRI LANKA
Tel: 94-11-2946149 Fax: 94-11-2946144
NORITAKE CO., LIMITEDSHANGHAI OFFICEROOM 701 AETNA TOWER NO. 107,ZUN YI ROAD, CHANG NING DISTRICT,SHANGHAI, 200051 CHINA
Tel: 86-21-6237-5789 Fax: 86-21-6237-5790

NORITAKE EUROPA GmbHKURHESSEN STRasse. 3, D-64546
MÖRFELDEN-WALLDORF, GERMANY
Tel: 49-6105-2092-20 Fax: 49-6105-2092-99
NORITAKE (THAILAND) CO., LTD.
1096 NEWROAD, KWAENG BANGRAK,KHET BANGRAK, BANGKOK 10500,
THAILAND
Tel: 66-2-236-2364, Fax: 66-2-236-2365
THE SIAM MOULDING PLASTER CO., LTD.
NO. 32 MOO7 NONGPLAKRADI ROAD,NONGPLING, NONGKHAE, SARABURi, 18140,
THAILAND
Tel: 66-36-373578 Fax: 66-36-373577
PT. NORITAKE INDONESIABLOK A-II NO. 9A, KAWASAN BERIKAT,
KOTA BUKIT INDAH, PURWAKARTA, 41181,
JAWA BARAT, INDONESIA
Tel: 62-264-351311 Fax: 62-264-351314

CHAIRMAN
Noboru Akahane*
PRESIDENT
Hitoshi Tanemura*
VICE PRESIDENT
Tadashi Ogura
DIRECTORS
Kouichi Saburi
Kazutaka Nakayama
Satoru Shimazaki
Masahiro Nakagawa
Hisaya Ogura
Yoshitaka Mabuchi
Hiroshi Kato
*Representative Director

STATUTORY AUDITORS
Masatoshi Fujii
Yasuyuki Mitsukawa

NORITAKE CO., LIMITEDSHANGHAI OFFICEROOM 701 AETNA TOWER NO. 107,ZUN YI ROAD, CHANG NING DISTRICT,SHANGHAI, 200051 CHINA
Tel: 86-21-6237-5789 Fax: 86-21-6237-5790

Yasumasa Gomi

NORITAKE CO., LIMITEDTAIPEI OFFICE
7F-2, NO.46, SEC.2, CHUNG SHAN N. RD.,TAIPEI,TAIWAN
Tel: 886-2-2531-9906 Fax: 886-2-2531-9906

Tadashi Ogura

Engineering GroupNORITAKE TAIPEI CO., LTD.
NO.37 ALLEY 105, LANE 514, ZHONGZHENG RD.,XINZHUANG DIST., XINBEI CITY 242, TAIWAN,
R.O.C.
Tel: 886-2-2907-1221 Fax: 886-2-2905-1529
NORITAKE CO., LIMITEDSHANGHAI OFFICEROOM 701 AETNA TOWER NO. 107,ZUN YI ROAD, CHANG NING DISTRICT,SHANGHAI, 200051 CHINA
Tel: 86-21-6237-5789 Fax: 86-21-6237-5790

Mitsuo Kinoshita
EXECUTIVE OFFICERS
Hitoshi Tanemura
Kouichi Saburi
Takashi Horiguchi
Kazutaka Nakayama
Satoru Shimazaki
Masahiro Nakagawa
Hisaya Ogura
Kouhei Kato
Kenji Hayasaka
Yoshitaka Mabuchi
Hiroshi Kato
Satoshi Aoki
Kenji Ito

NORITAKE CO., INC.
2635 CLEARBROOK DRIVE,
ARLINGTON HEIGHTS, IL 60005, U.S.A.
Tel: 1-847-439-9020 Fax: 1-847-593-2285
38

Noritake Co., Limited

Annual Report 2011

C O R P O R AT E D ATA

H I S T O RY O F N O R I TA K E(As of June 29, 2011)(As of June 29, 2011)

Head Office

1876	Ichizaemon Morimura established3-1-36, Noritake-Shinmachi

Morimura-kumi in Tokyo, and Toyo

Nishi-ku, Nagoya, Aichi

Morimura and others established451-8501, Japan

the Hinode Shokai (Morimura Brothers)

Tel: +81-52-561-7112

in New YorkFax: +81-52-561-9721

Date of Establishment

1904	Established Nippon Toki Gomei Kaisha
1907	Began production of grinding wheels
for in-house use

1914	Succeeded in production of the firstJanuary 1904

dinner set in Japan

Number of Employees
4,176 (Consolidated)

1917	Sanitary ware division spun off tobecome TOTO Ltd.
	Established Nippon Toki Co., Ltd.

Stock Exchange Listings

1919	Electric insulator division spun off toTokyo Stock Exchange

become NGK Insulators Ltd.

Nagoya Stock Exchange

1932	Began production of first bone china
in Japan

Transfer Agent and Registrar
Mitsubishi UFJ Trust and Banking

1939	Began full-scale production of industrial
grinding wheels

1943	Tableware production stopped on

Corporation
4-5, Marunouchi 1-chome,account of World War II, changed to full

Chiyoda-ku, Tokyo

production of grinding wheels

100-8212, Japan(only bone china production continued
to preserve technique)

Annual Meeting of
Shareholders
The annual meeting of shareholders of theCompany is normally held in June each year
in Nagoya, Japan.
In addition, the Company may
hold an extraordinary meeting of shareholders
whenever necessary by giving at least two
weeks’ advance notice to shareholders.

independent Auditors
KPMG AZSA LLC

1945	Production of tableware resumed
1947	Established Noritake Co., Inc. in
the United States

1956	Began production of cutlery
1958	Established Noritake (Australia) Pty.
Ltd. in Australia

1960	Began production of resinoid grinding
wheels at the Kamori Plant

1971	Began production of filtration equipment
1972	Established Noritake Lanka Porcelain(Pvt.) Ltd. in Sri Lanka

1973 Began production of diamond tools
1974	Established Noritake Porcelana Mfg.,
Inc. in the Philippines

1979 Began operation of the Craft Center	Began production of materials andequipment for the ceramics industry

1981	Changed the Company name to
Noritake Co., Limited

1987	Established Noritake Europa G.m.b.H.
in Germany

1988	Established Noritake Taipei Co., Ltd. in
Taiwan1991	Established Noritake Hong Kong Ltd.
1992	Established Noritake Singapore Pte. Ltd.
1993 Opened the Noritake Gallery
1995	Established Pt. Noritake Indonesia
1996	Established Noritake (Siam) Co., Ltd. in
Thailand1997	Established Itron (U.K.) Ltd. in
the United Kingdom

1998	Established Noritake Dental Supply
Co., Limited.

2001	Established Noritake Gypsum Co., Ltd.
Opened the Noritake Garden

2002	Established Noritake Bonded
	Abrasive Co., Ltd.

2005	Established Noritake Shanghai Trading
Co., Ltd.

2009 Made NIPPON RESIBON 		

1961	Began production of crystal glassware

CORPORATION its associate by 			Began production of melamine wareacquiring additional shares of the stock1962	Began production of grinding machines1963	Began production of belt andfabric abrasives

1968	Established Noritake Canada Ltd.
in Canada

1969	Began production of electronic products
1970	Established Noritake (U.K.) Ltd. in the
United Kingdom
	Began production of fine ceramicindustrial productsof the company.
	Absorbed Noritake Engineering Co.,
Ltd., Noritake China Mfg. Co., Limited,	Noritake Tableware Co., Ltd. and Tokyo
	Toishi Co., Ltd.

2010	Absorbed Noritake Kizai Co., Ltd. and
Noritake Ceramics Co., Ltd.

2011	Abosorbed Noritake Bonded Abrasive
Co., Ltd. and Noritake Super Abrasive
Co., Ltd.

Caution with respect to forward-looking statements
This annual report includes forward-looking statements pertaining to expectations, plans, strategies, management goals, future performance,
expenses, revenues, income and other forecasts formulated on past experiences. Forward-looking statements necessarily entail some degree of
uncertainty, and the content conveyed in the results as well as underlying factors identified in the report may differ materially from actual results
depending on changes in those factors.

Noritake Co., Limited

Annual Report 201139

Printed in Japan