1 Consolidated Financial Statements
(1) Consolidated Financial Statements
1) Consolidated Balance Sheet as of March 31, 2021
Millions of Yen
As of March 31,
As of March 31,
2020
2021
Thousands of
U.S. Dollars
As of March 31,
2021
Assets
Current assets
Cash and deposits
113,054
Notes and accounts receivable - trade
92,741
Electronically recorded monetary claims - operating
10,982
8,005
72,309
Merchandise and finished goods
42,667
43,897
396,509
*1
130,643
1,180,050
100,019
903,434
Work in process
6,766
7,317
66,099
Raw materials and supplies
27,864
28,635
258,653
–
3,000
27,098
4,944
7,383
66,691
(2)
(537)
(4,853)
299,018
328,364
2,965,990
Current portion of long-term loans receivable
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
227,570
*2
Accumulated depreciation
*2
(148,742)
Buildings and structures, net
78,828
*1
Machinery, equipment and vehicles
887,255
*2
Accumulated depreciation
*1
*2
(747,628)
Machinery, equipment and vehicles, net
*1
Land
*1, *2
Construction in progress
139,627
*1
81,889
*1, *2
49,900
Other
25,039
*2
Accumulated depreciation
(13,160)
Other, net
11,878
*2
242,714
2,192,348
(153,900)
(1,390,119)
88,814
802,229
946,563
8,549,938
(764,677)
(6,907,029)
181,886
1,642,909
82,146
741,995
22,985
207,623
31,662
285,997
(15,901)
(143,629)
15,761
142,368
362,123
391,594
3,537,124
Goodwill
39,941
55,902
504,947
Other
16,935
29,296
264,623
Total intangible assets
56,876
85,199
769,570
Total property, plant and equipment
*1
Intangible assets
Investments and other assets
Investment securities
23,182
*3
Long-term loans receivable
Retirement benefit asset
Deferred tax assets
Other
*3
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Deferred assets
Total assets
The accompanying notes are an integral part of these financial statements.
–1–
24,431
220,684
3,823
–
–
*3
844
1,523
13,762
8,125
7,088
64,026
9,922
11,631
105,063
(1,039)
(156)
(1,409)
44,859
44,519
402,126
463,859
521,313
4,708,820
180
122
1,111
763,059
849,801
7,675,921
Millions of Yen
As of March 31,
As of March 31,
2020
2021
Thousands of
U.S. Dollars
As of March 31,
2021
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term borrowings
Current portion of bonds with share acquisition
rights
Current portion of bonds payable
Current portion of long-term borrowings
*1
Accounts payable - other
Current portion of long-term accounts payable facilities
Income taxes payable
Provision for bonuses
Provision for bonuses for directors (and other
officers)
Other
53,135
64,662
584,074
15,452
13,744
124,150
22,540
–
–
15,000
64,813
135,489
585,433
40,191
363,030
388
3,506
10,946
5,216
6,492
5,786
58,649
52,263
129
169
1,529
–
53,724
*1
39,215
*1
Total current liabilities
Non-current liabilities
Bonds payable
537
*1
14,535
15,677
141,606
215,433
226,925
2,049,729
60,300
Long-term borrowings
Long-term accounts payable - facilities
*1
242,100
*1 568
*1
45,000
406,467
284,025
*1 193
2,565,493
1,749
Retirement benefit liability
Provision for retirement benefits for directors (and
other officers)
Provision for share awards
Provision for environmental measures
Provision for loss on business of subsidiaries and
associates
Other
23,254
23,110
208,747
194
97
878
47
24
106
16
963
151
32
49
445
11,567
23,487
212,152
Total non-current liabilities
338,089
376,086
3,397,045
553,523
603,012
5,446,774
Shareholders’ equity
Share capital
43,449
53,884
486,717
Capital surplus
Retained earnings
44,095
116,818
55,901
136,579
504,938
1,233,673
Total liabilities
Net assets
Treasury shares
(3,064)
(4,090)
(36,948)
Total shareholders’ equity
201,297
242,275
2,188,380
Accumulated other comprehensive income
Valuation difference on available-for-sale
securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
2,799
4,226
38,177
9
(5,443)
22
(8,645)
204
(78,094)
Remeasurements of defined benefit plans
470
1,353
12,228
(2,163)
(3,042)
(27,485)
Non-controlling interests
Total accumulated other comprehensive income
10,402
7,556
68,252
Total net assets
209,536
246,788
2,229,147
763,059
849,801
7,675,921
Total liabilities and net assets
The accompanying notes are an integral part of these financial statements.
–2–
2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income
Consolidated Statement of Income for the Fiscal Year Ended March 31, 2021
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for
using equity method
Foreign exchange gains
Subsidy income
Ship lease income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Expenses for ship lease
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Foreign exchange gains
National subsidies
Gain on sale of non-current assets
Gain on sale of investment securities
Insurance claim income
Other
Total extraordinary income
Extraordinary losses
Loss on sale and retirement of non-current
assets
Loss on tax purpose reduction entry of
non-current assets
Loss on disaster
Impairment loss
Other
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Profit
Loss attributable to non-controlling interests
Profit attributable to owners of parent
Millions of Yen
Fiscal year ended
Fiscal year ended
March 31, 2020
March 31, 2021
546,433
562,928
*2, *7 406,127
*2, *7 403,347
140,305
159,580
*1, *2 109,677
*1, *2 122,706
30,628
36,873
*5
165
591
236
546
2,133
4,933
–
121
1,100
–
410
417
2,352
3,938
930
607
674
1,758
4,874
8,405
5,489
6,089
15,884
44,033
3,201
1,028
524
1,700
6,455
28,111
4,311
–
1,180
1,777
7,269
34,478
38,944
–
10,663
16,059
65,666
311,434
–
126
*4 11
6,778
168
483
7,568
*3
2,088
869
*4 70
435
869
9
4,343
18,864
7,856
634
3,934
7,857
85
39,230
1,499
*5
1,796
16,228
869
7,856
373
2,575
489
6,105
32,717
11,564
(51)
11,513
21,203
(911)
22,115
3,375
23,266
4,420
55,145
295,519
104,461
(468)
103,993
191,526
(8,237)
199,763
126
*6
462
1,742
598
4,429
31,251
12,289
(224)
12,064
19,186
(12)
19,199
The accompanying notes are an integral part of these financial statements.
–3–
Thousands of
U.S. Dollars
Fiscal year ended
March 31, 2021
5,084,712
3,643,284
1,441,428
1,108,361
333,067
*6
Consolidated Statement of Comprehensive Income for the Fiscal Year Ended March 31, 2021
Profit
Millions of Yen
Fiscal year ended
Fiscal year ended
March 31, 2020
March 31, 2021
19,186
21,203
Other comprehensive income
Valuation difference on available-for-sale
securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of
tax
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
*
Comprehensive income
Thousands of
U.S. Dollars
Fiscal year ended
March 31, 2021
191,526
(6,341)
1,400
12,654
29
685
12
(3,539)
117
(31,973)
(83)
883
7,982
–
26
237
(5,709)
(1,215)
(10,983)
13,476
19,987
180,543
13,539
(62)
21,236
(1,248)
191,823
(11,280)
*
Comprehensive income attributable to:
Owners of parent
Non-controlling interests
The accompanying notes are an integral part of these financial statements.
–4–
3) Consolidated Statement of Changes in Net Assets for the Fiscal Year Ended March 31, 2021
Fiscal Year Ended March 31, 2020
(Millions of Yen)
Shareholders’ equity
Share
capital
Balance at beginning of current
period
Changes of items during period
Dividends
Conversion of convertible bonds
with share acquisition rights
Profit attributable to owners of
parent
Purchase of treasury shares
42,858
Capital
surplus
Retained
earnings
42,968
99,188
Treasury
shares
(2,910)
(1,569)
590
Total
shareholders’
equity
182,105
(1,569)
590
1,180
19,199
Disposal of treasury shares
19,199
153
(419)
(419)
264
418
Increase by merger
Change in scope of consolidation
Capital increase of consolidated
subsidiaries
Purchase of shares of consolidated
subsidiaries
Net changes of items other than
shareholders’ equity
Total changes of items during period
Balance at end of current period
–
–
(92)
(92)
475
475
590
1,126
17,629
(154)
19,191
43,449
44,095
116,818
(3,064)
201,297
Accumulated other comprehensive income
Valuation
Deferred
difference on gains or
available-for- losses on
sale securities hedges
Balance at beginning of current
period
Changes of items during period
9,050
(20)
Total
NonForeign
Remeasureaccumulated controlling
currency
ments of
other
interests
translation
defined
comprehensive
adjustment benefit plans
income
(6,088)
554
3,495
13,737
1,180
19,199
(419)
418
Disposal of treasury shares
–
Increase by merger
Balance at end of current period
199,338
(1,569)
Dividends
Conversion of convertible bonds
with share acquisition rights
Profit attributable to owners of
parent
Purchase of treasury shares
Change in scope of consolidation
Capital increase of consolidated
subsidiaries
Purchase of shares of
consolidated subsidiaries
Net changes of items other than
shareholders’ equity
Total changes of items during period
Total net
assets
–
(92)
475
(6,250)
29
(6,250)
29
2,799
9
–5–
645
(83)
(5,659)
(3,334)
(8,994)
645
(83)
(5,659)
(3,334)
10,197
(5,443)
470
(2,163)
10,402
209,536
Fiscal Year Ended March 31, 2021
(Millions of Yen)
Shareholders’ equity
Share
capital
Balance at beginning of current
period
Changes of items during period
Dividends
Conversion of convertible bonds
with share acquisition rights
Profit attributable to owners of
parent
Purchase of treasury shares
43,449
Capital
surplus
Retained
earnings
44,095
116,818
Treasury
shares
(3,064)
(2,447)
10,435
201,297
(2,447)
10,435
20,870
22,115
Disposal of treasury shares
Total
shareholders’
equity
22,115
(2,386)
(2,386)
1,362
3,174
1,812
Increase by merger
162
162
Change in scope of consolidation
Capital increase of consolidated
subsidiaries
Purchase of shares of consolidated
subsidiaries
Net changes of items other than
shareholders’ equity
Total changes of items during period
(68)
(1)
(70)
10,435
11,806
19,761
(1,025)
40,978
Balance at end of current period
53,884
55,901
136,579
(4,090)
242,275
(0)
(0)
(441)
(441)
Accumulated other comprehensive income
Valuation
Deferred
difference on gains or
available-for- losses on
sale securities hedges
Balance at beginning of current
period
Changes of items during period
2,799
9
Total
NonForeign
Remeasureaccumulated controlling
currency
ments of
other
interests
translation
defined
comprehensive
adjustment benefit plans
income
(5,443)
470
(2,163)
10,402
20,870
22,115
(2,386)
3,174
Disposal of treasury shares
162
Increase by merger
Balance at end of current period
209,536
(2,447)
Dividends
Conversion of convertible bonds
with share acquisition rights
Profit attributable to owners of
parent
Purchase of treasury shares
Change in scope of consolidation
Capital increase of consolidated
subsidiaries
Purchase of shares of
consolidated subsidiaries
Net changes of items other than
shareholders’ equity
Total changes of items during period
Total net
assets
(70)
(0)
(441)
1,427
12
(3,202)
1,427
12
(3,202)
4,226
22
(8,645)
–6–
883
(879)
(2,846)
(3,725)
883
(879)
(2,846)
37,252
1,353
(3,042)
7,556
246,788
Fiscal Year Ended March 31, 2021
(Thousands of U.S. Dollars)
Shareholders’ equity
Balance at beginning of current
period
Changes of items during period
Dividends
Conversion of convertible bonds
with share acquisition rights
Profit attributable to owners of
parent
Purchase of treasury shares
Share
capital
Capital
surplus
Retained
earnings
392,458
398,295
1,055,172
Treasury
shares
(27,684)
(22,108)
94,259
1,818,241
(22,108)
94,259
188,518
199,763
Disposal of treasury shares
Total
shareholders’
equity
199,763
(21,553)
(21,553)
12,303
28,674
16,371
Increase by merger
1,467
1,467
Change in scope of consolidation
Capital increase of consolidated
subsidiaries
Purchase of shares of consolidated
subsidiaries
Net changes of items other than
shareholders’ equity
Total changes of items during period
(621)
(14)
(635)
94,259
106,643
178,501
(9,264)
370,139
Balance at end of current period
486,717
504,938
1,233,673
(36,948)
2,188,380
(0)
(0)
(3,987)
(3,987)
Accumulated other comprehensive income
Valuation
Deferred
difference on gains or
available-for- losses on
sale securities hedges
Balance at beginning of current
period
Changes of items during period
25,285
87
Total
NonForeign Remeasureaccumulated controlling
currency
ments of
other
interests
translation
defined
comprehensive
adjustment benefit plans
income
(49,167)
4,250
(19,545)
93,962
Total net
assets
1,892,658
(22,108)
Dividends
Conversion of convertible bonds
with share acquisition rights
Profit attributable to owners of
parent
Purchase of treasury shares
188,518
199,763
(21,553)
Disposal of treasury shares
28,674
Increase by merger
1,467
Change in scope of consolidation
Capital increase of consolidated
subsidiaries
Purchase of shares of
consolidated subsidiaries
Net changes of items other than
shareholders’ equity
Total changes of items during period
Balance at end of current period
(635)
(0)
(3,987)
12,892
117
(28,927)
12,892
117
(28,927)
38,177
204
(78,094)
–7–
7,978
(7,940)
(25,710)
(33,650)
7,978
(7,940)
(25,710)
336,489
12,228
(27,485)
68,252
2,229,147
4) Consolidated Statement of Cash Flows for the Fiscal Year Ended March 31, 2021
Millions of Yen
Fiscal year ended
Fiscal year ended
March 31, 2021
March 31, 2020
Thousands of
U.S. Dollars
Fiscal year ended
March 31, 2021
31,251
31,843
1,742
3,559
(51)
32,717
34,137
2,575
4,382
109
295,519
308,348
23,266
39,586
988
–
(121)
(1,100)
(6,777)
220
(757)
3,201
776
(386)
320
(782)
4,311
(3,079)
(3,495)
2,898
(7,066)
38,944
(27,819)
19
869
7,856
(410)
(604)
23
1,463
(607)
(1,025)
(48)
1,774
(5,489)
(9,261)
(434)
16,027
5,448
666
6,019
3
(780)
(7,051)
(5,653)
3,401
30,727
5,235
2,192
(78)
72,647
940
(3,638)
917
578
(4,133)
700
68,012
2,973
(883)
618
81,143
917
(4,466)
1,546
982
(16,206)
293
64,210
26,862
(7,977)
5,589
Cash flows from operating activities
Profit before income taxes
Depreciation
Impairment loss
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Share of loss (profit) of entities accounted for using
equity method
Loss (gain) on sale of investment securities
Increase (decrease) in retirement benefit liability
Interest and dividend income
Interest expenses
Foreign exchange losses (gains)
Loss on tax purpose reduction entry of non-current
assets
Subsidy income
Insurance claim income
Loss (gain) on sale of property, plant and equipment
Loss on retirement of property, plant and equipment
Decrease (increase) in notes and accounts receivable trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable trade
Increase (decrease) in other assets/liabilities
Increase (decrease) in accrued consumption taxes
Other, net
Subtotal
Interest and dividends received
Interest paid
Proceeds from subsidy income
Proceeds from insurance income
Income taxes paid
Income taxes refunded
Net cash provided by (used in) operating activities
–8–
732,937
8,291
(40,345)
13,966
8,875
(146,386)
2,653
579,991
Millions of Yen
Fiscal year ended
Fiscal year ended
March 31, 2021
March 31, 2020
Cash flows from investing activities
Proceeds from settlement of forward exchange
contracts from acquisition of subsidiaries
Net decrease (increase) in time deposits
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Purchase of investment securities
Proceeds from sale of investment securities
Purchase of intangible assets
Loans receivable granted
Collection of loans receivable
Purchase of shares of subsidiaries resulting in change
in scope of consolidation
Other, net
Net cash provided by (used in) investing activities
Thousands of
U.S. Dollars
Fiscal year ended
March 31, 2021
–
2,088
18,863
(544)
(49,095)
513
(208)
8,141
(6,722)
(473)
474
89
(54,137)
263
(20)
1,427
(3,893)
(859)
744
812
(489,004)
2,376
(183)
12,897
(35,173)
(7,761)
6,728
(48,370)
(436,914)
45
(47,869)
(1,034)
(103,702)
(9,345)
(936,704)
(3,769)
(166)
45,110
(49,878)
105,278
(59,040)
(1,505)
950,943
–
–
(4,170)
1,043
–
25,011
225,916
(1,569)
(2,447)
(22,107)
(2,888)
(596)
(5,388)
(1,053)
(1,323)
(11,955)
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
(14,049)
63,589
574,374
(116)
623
5,634
5,977
24,721
223,295
Cash and cash equivalents at beginning of period
Increase (decrease) in cash and cash equivalents resulting
from change in scope of consolidation
Increase in cash and cash equivalents resulting from
merger with unconsolidated subsidiaries
unconsolidated
subsidiariesat end of period
Cash and cash equivalents
103,407
109,384
988,027
–
(4,048)
(36,566)
–
243
2,203
130,301
1,176,959
–
*2
Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Redemption of bonds
Proceeds from sale of treasury shares
Proceeds from issuance of common shares assigned to
non-controlling interests
Cash dividends paid
Payments from changes in ownership interests in
subsidiaries that do not result in change in scope of
consolidation
Other, net
*1
The accompanying notes are an integral part of these financial statements.
–9–
109,384
*1
(533,290)
(37,668)
9,428
[Notes to Consolidated Financial Statements]
(Basis of Presenting Consolidated Financial Statements)
The accompanying consolidated financial statements of Daio Paper Corporation (hereinafter referred to as “the Company”) have
been prepared in accordance with the provisions set forth in the Financial Instruments and Exchange Act of Japan and its related
accounting regulations and in conformity with accounting principles generally accepted in Japan (hereinafter referred to as
“Japanese GAAP”), which are different in certain aspects as to application and disclosure requirements from International Financial
Reporting Standards.
In preparing the accompanying consolidated financial statements, Japanese yen figures including the subtotal and total amounts
less than one million yen have been rounded down to the nearest million yen. The translation of the Japanese yen amounts into U.S.
dollars is included solely for the convenience of readers outside Japan, using the prevailing exchange rate as of March 31, 2021,
which was ¥110.71 to $1.00 U.S. dollar figures including the subtotal and total amounts less than one thousand dollars have been
rounded down to the nearest thousand dollars. The convenience translations should not be construed as representations 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.
(Summary of Significant Accounting and Reporting Policies)
1. Scope of consolidation
(1) Number of consolidated subsidiaries
As of March 31, 2020: 33; as of March 31, 2021: 36
Names of the main consolidated subsidiaries:
Iwaki Daio Paper Corporation, Elleair Product Co., Ltd., Forestal Anchile Limitada, Elleair International (Thailand) Co.,
Ltd., Elleair International China (Nantong) Co., Ltd., PT. Elleair International Trading Indonesia, PT. Elleair International
Manufacturing Indonesia, H&PC BRAZIL PARTICIPAÇÕES S.A., Santher - Fábrica de Papel Santa Therezinha S.A.
(hereinafter referred to as “Santher S.A.”), Elleair International Turkey Kişisel Bakım Ürünleri Üretim A.Ş. (hereinafter
referred to as “Elleair International Turkey A.Ş.”)
(Changes in the scope of consolidation or the scope of application of the equity method)
The Company’s scope of consolidation has changed mainly as a result of the inclusions of Elleair International Turkey A.Ş.,
H&PC BRAZIL PARTICIPAÇÕES S.A. and Santher S.A. and the exclusion of Tokyo Pulp & Paper Corporation effective
from the first quarter of the fiscal year ended March 31, 2021, as well as the inclusion of KG LOGISTICS LTD. effective
from the second quarter of the same fiscal year.
(2) Names of the main unconsolidated subsidiaries
Main unconsolidated subsidiaries:
Daio Eco Work Corporation
(Reasons for excluding from the scope of consolidation)
Subsidiaries, which are small in terms of their total assets, net sales, profit or loss (amount corresponding to equity), retained
earnings (amount corresponding to equity) and other indicators, and do not have a significant effect on the consolidated
financial statements, are excluded from the scope of consolidation.
2. Application of the equity method
(1) Number of associates accounted for using the equity method
As of March 31, 2021: 1
Names of associates accounted for using the equity method
Tokyo Pulp & Paper Corporation
–10–
(2) Unconsolidated subsidiaries (such as Daio Eco Work Corporation) and associates, which are small in terms of their profit
or loss (amount corresponding to equity), retained earnings (amount corresponding to equity) and other indicators, and do
not have a significant effect on the consolidated financial statements and are immaterial as a whole, are excluded from the
scope of application of the equity method.
3. Fiscal years of consolidated subsidiaries
Consolidated subsidiaries whose closing date differs from the consolidated closing date are as follows:
Company name
Closing date
Forestal Anchile Limitada
December 31
Elleair International (Thailand) Co., Ltd.
December 31
Elleair International China (Nantong) Co., Ltd.
December 31
PT. Elleair International Trading Indonesia
December 31
PT. Elleair International Manufacturing Indonesia
December 31
H&PC BRAZIL PARTICIPAÇÕES S.A.
December 31
Santher S.A.
December 31
Elleair International Turkey A.Ş.
December 31
For the purpose of preparing the consolidated financial statements, the Company used the financial statements of the
subsidiaries above whose closing date differs from that of the Company. Adjustments to account for material transactions
occurring between the actual closing dates and the consolidated closing date are recorded as necessary.
4. Accounting policies
(1) Valuation standard and methods for significant assets
Securities
Available-for-sale securities
Available-for-sale securities with quoted market price
Investments in available-for-sale securities are stated at fair value based on the quoted market price as of the end
of the fiscal year. The valuation differences are accounted for as a separate component of net assets and the cost
of securities sold is calculated by using the moving-average method.
Available-for-sale securities without quoted market price
Investments in securities without quoted market price are stated at cost using the moving-average method.
Derivatives
Derivative financial instruments are stated at fair value.
Inventories
Inventories are stated at cost, determined primarily by the moving-average method after recording any write-downs
appropriate as a result of the decline in profitability.
(2) Depreciation and amortization methods for significant depreciable assets
Property, plant and equipment (excluding leased assets)
All the items of property, plant and equipment are depreciated using the straight-line method.
Intangible assets (excluding leased assets)
Intangible assets are amortized using the straight-line method.
Leased assets
Leased assets arising from finance lease transactions in which ownership of the leased assets is not transferred to the
lessee are depreciated or amortized using the straight-line method over the lease term with no residual value.
–11–
(3) Accounting standard for significant provisions
Allowance for doubtful accounts
For receivables from insolvent debtors who are undergoing bankruptcy or other collection proceedings or who are in the
similar financial condition, an allowance for doubtful accounts is provided based on an evaluation of collectability of each
debtor. For other receivables, an allowance is provided based on the Company’s historical rate of uncollectible receivable
amounts.
Provision for bonuses
To provide for payment of bonuses to employees, a provision for bonuses is recorded in the amount that is estimated to be
paid as at the end of each fiscal year.
Provision for bonuses for directors (and other officers)
To provide for payment of bonuses to directors and audit & supervisory board members, a provision for bonuses for
directors (and other officers) is recorded in the amount that is estimated to be paid as at the end of each fiscal year.
Provision for retirement benefits for directors (and other officers)
To provide for payment of retirement benefits to directors and audit & supervisory board members, a provision for
retirement benefits for directors (and other officers) is recorded in the amount that is required by the internal rule to be paid
at the end of each fiscal year.
Provision for share awards
To provide for delivery of shares of the Company to directors and executive officers, a provision for share awards is
recorded based on the estimated amount of obligation to settle share awards at the end of each fiscal year.
Provision for environmental measures
To provide for payments related to treatment of the polychlorinated biphenyl (PCB) waste, a provision for environmental
measures is recorded in the amount that is estimated to be incurred for the treatment in the future.
Provision for loss on business of subsidiaries and associates
To provide for operating losses expected to be suffered by subsidiaries and associates in the future, a provision for loss on
business of subsidiaries and associates is recorded in the amount that the Company is expected to incur in view of the
financial position and other conditions of the subsidiaries and associates.
(4) Accounting methods for retirement benefits
1) Method of allocating projected retirement benefit obligation
In calculating retirement benefit obligation, the benefit formula basis is applied to attribute the projected retirement
benefits to the periods until the end of the current fiscal year.
2) Method for amortizing actuarial gain or loss and past service cost
Actuarial gain or loss is amortized from the following fiscal year of the fiscal year in which it is incurred using the
straight-line method over a period (mainly five years) which is within the employees’ average remaining years of
service at the time of incurrence.
Past service cost is amortized using the straight-line method over a period (mainly five years) which is within the
employees’ average remaining years of service at the time of incurrence.
3) Application of simplified method at small scale companies, etc.
Some of the consolidated subsidiaries apply the simplified method by which they use the amount of retirement benefit
which would be required to be paid for voluntary retirement at the end of the fiscal year as retirement benefit obligation
in order to calculate the retirement benefit liability and retirement benefit expenses.
–12–
(5) Standard of translating significant assets or liabilities in foreign currencies into Japanese yen
Receivables and payables denominated in foreign currencies are translated into yen at the spot exchange rates in effect at
the balance sheet date, and differences arising from the translation are recognized in profit or loss. Assets, liabilities,
revenues and expenses of the consolidated foreign subsidiaries are translated into yen at the spot exchange rates in effect
at the balance sheet date. Differences arising from the translation are included in foreign currency translation adjustment
and non-controlling interests in the net assets section.
(6) Significant hedge accounting method
Hedge accounting method
The Company applies the deferred hedge accounting method. With regard to forward exchange contracts, when hedges
against foreign exchange rate fluctuation risk meet certain conditions to qualify for the designated hedge accounting
treatment (“furiate shori”), the Company adopts such treatment, by which foreign currency transactions hedged by forward
exchange contracts are reported at the forward rate and the resulting differences between the spot rate and the forward rate
are amortized over the life of each contract.
When an interest rate swap contract meets certain conditions to qualify for the exceptional hedge accounting treatment
(“tokurei shori”), the Company adopts such treatment, by which the net amount to be paid or received under the contract
is added to or deducted from the interest on the hedged items.
Hedging instruments and hedged items
1) Hedging instruments:
Hedged items:
Forward exchange contracts
Foreign currency receivables resulting from export of finished goods and foreign currency
payables resulting from import of raw materials
2) Hedging instruments:
Hedged items:
Interest rate swap contracts
Borrowings
Hedging policy
Based primarily on the Derivatives Transaction Control Regulations, which is the Group’s internal rule, the Group is party
to the derivative transactions in order to hedge against the risks of fluctuations in foreign exchange rates and interest rates.
Method for evaluation of hedge effectiveness
The evaluation of hedge effectiveness is performed by comparing the changes in market prices or changes in cumulative
cash flows of hedged items those of with hedging instruments and using them as a basis.
The evaluation of hedge effectiveness is not performed for the interest rate swap transactions subject to the exceptional
hedge accounting treatment (“tokurei shori”) and for the forward exchange contracts subject to the designated hedge
accounting treatment (“furiate shori”).
(7) Amortization method and period for goodwill
Goodwill is amortized using the straight-line method over a period not exceeding 20 years, which is determined on a dealby-deal basis.
(8) Scope of cash and cash equivalents in consolidated statement of cash flows
For the purpose of the consolidated statement of cash flows, cash and cash equivalents consist of cash on hand, demand
deposits, and short-term investments with a maturity of three months or less from the date of acquisition that are readily
convertible into cash and are exposed to immaterial risk of changes in value.
–13–
(9) Other
1) Accounting for consumption taxes
Transactions subject to consumption taxes are recorded at amounts exclusive of consumption taxes.
2) Adoption of consolidated tax return
The Company and its certain consolidated subsidiaries have adopted the consolidated tax return system, with the
Company being a parent for the purpose of the system.
3) Application of tax effect accounting for the transition from the consolidated tax return system to the group tax sharing
system
With respect to items subjected to the review under the non-consolidated tax return system conducted in line with the
transition from the consolidated tax return system to the group tax sharing system, which was created under the “Act
on Partial Revision of the Income Tax Act, etc.” (Act No. 8 of 2020), the Company and its certain domestic consolidated
subsidiaries have not applied the provisions of paragraph 44 of the “Implementation Guidance on Tax Effect Accounting”
(ASBJ Guidance No. 28 issued on February 16, 2018) in accordance with the treatment set out in paragraph 3 of the
“Practical Solution on the Treatment of Tax Effect Accounting for the Transition from the Consolidated Taxation System
to the Group Tax Sharing System” (PITF No. 39 issued on March 31, 2020). Accordingly, the amounts of deferred tax
assets and deferred tax liabilities have been determined based on the provisions of tax laws in effect before the revision.
(Significant Accounting Estimates)
1.
Valuation of Property, Plant and Equipment and Goodwill
The Company’s asset group is the smallest unit of assets that individually generates independent cash flows, and assets are
grouped based on units for which separate business plans are formulated for managerial accounting purposes. Idle assts, assets
for rent and other assets are grouped on an individual basis. For asset groups that show indications of impairment, such as
consistent losses in operating profit and significant drop in market price, the Group determines the recognition of impairment
losses by estimating future cash flows based on reasonable assumptions and comparing them with the book values of such asset
groups. Then, if they are assessed to be unrecoverable, the book values of the asset groups are written down to the recoverable
amounts, and the reduced amounts are recorded in impairment loss.
An impairment loss for property, plant and equipment recorded in the consolidated financial statements for the fiscal year ended
March 31, 2021 was ¥1,049 million ($9,476 thousand).
Additionally, an impairment loss for goodwill recorded in the consolidated financial statements for the fiscal year ended March
31, 2021 was ¥1,143 million ($10,327 thousand).
An asset impairment is accounted for as follows.
(1) Indications of impairment
An indication of impairment is identified if an asset group falls into any of the following:

If profit or loss from operating activities remain negative or are expected to remain negative taking into account, among
other things, past operating results, budgets based on the Medium-term Business Plan and business plans at the
recognition of goodwill

If a change that significantly decreases the recoverable value has occurred or is expected to occur with respect to the
scope or method of use

If the business environment has deteriorated significantly or is expected to deteriorate significantly

If the market price has declined significantly
–14–
(2) Determination of recognition of impairment loss
For an assets group judged to have an indication of impairment, the book value is compared with the total undiscounted future
cash flows, if necessary. Then, the Group determines that the asset group needs to be impaired if the book value is greater than
the total future cash flows. Assumptions used to determine the total future cash flows are based on future estimates for each
asset group and three-year budgets based on the Medium-term Business Plan, and take into account the future growth rates of
markets and entire economy, as well as current and expected economic conditions.
(3) Measurement of impairment loss
For an asset group determined to recognize an impairment loss, the higher of net selling price (the fair value of the appraisal
value, etc. reasonably determined by a third party, less the estimated costs for disposal) and value in use (discounted future
cash flows) is used as the recoverable amount. Then, the book value is written down to the recoverable amount, and the reduced
amount is recognized as impairment loss for the current fiscal year.
(Accounting Standards That Have Not Yet Been Applied)
1.
Accounting Standard for Revenue Recognition, etc.

“Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29 issued on March 31, 2020)

“Implementation Guidance on Accounting Standard for Revenue Recognition” (ASBJ Guidance No. 30 issued on March
26, 2021)
(1) Summary
A comprehensive accounting standard for revenue recognition. Revenue is recognized by applying the following five steps.
Step 1: Identify the contract(s) with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when (or as) the entity satisfies the performance obligation
(2) Planned date of application
To be applied from the beginning of the fiscal year ending March 31, 2022.
(3) Impact of application of these accounting standards
The amount of the impact of the application on consolidated financial statements is currently under assessment.
2.
Accounting Standards for Fair Value Measurement, etc.

“Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30 issued on July 4, 2019)

“Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance No. 31 issued on July
4, 2019)

“Accounting Standard for Measurement of Inventories” (ASBJ Statement No. 9 issued on July 4, 2019)

“Accounting Standard for Financial Instruments” (ASBJ Statement No. 10 issued on July 4, 2019)

“Implementation Guidance on Disclosures about Fair Value of Financial Instruments” (ASBJ Guidance No. 19 issued on
March 31, 2020)
(1) Summary
In order to improve the comparability with the provisions of internationally recognized accounting standards, the Accounting
Standards Board of Japan (the “ASBJ”) has developed the “Accounting Standard for Fair Value Measurement” and the
“Implementation Guidance on Accounting Standard for Fair Value Measurement” (hereinafter referred to as the “Fair Value
Measurement Standards, etc.”) and established guidance and other rules on the method of fair value measurement. The Fair
–15–
Value Measurement Standards, etc. will be applicable to the fair values of the following items:

Financial instruments included in the “Accounting Standard for Financial Instruments”

Inventories held for trading purposes included in the “Accounting Standard for Measurement of Inventories”
The ASBJ has also revised the “Implementation Guidance on Disclosures about Fair Value of Financial Instruments” to set
forth matters required to be included in the notes to the breakdown of fair value of financial instruments by level.
(2) Planned date of application
To be applied from the beginning of the fiscal year ending March 31, 2022.
(3) Impact of application of these accounting standards
The amount of the impact of the application on consolidated financial statements is currently under assessment.
(Changes in the Method of Presentation)
(Application of the “Accounting Standard for Disclosure of Accounting Estimates”)
The Group has adopted the “Accounting Standard for Disclosure of Accounting Estimates” (ASBJ Statement No. 31 issued on
March 31, 2020) from the consolidated financial statements for the fiscal year ended March 31, 2021, and the notes to significant
accounting estimates are included therein.
However, information for the fiscal year ended March 31, 2020 is not included in the notes, in accordance with the transitional
treatment stipulated in the proviso of paragraph 11 of the accounting standard.
(Consolidated statement of income)
“Rental income from non-current assets” and “Insurance claim income” under “Non-operating income” and “Refund of income
taxes,” which were presented separately for the fiscal year ended March 31, 2020, have been included in “Other” under “Nonoperating income” and “Income taxes - current,” respectively, from the fiscal year ended March 31, 2021 due to a decrease in
financial significance. In addition, “Expenses for ship lease” included in “Other” under “Non-operating expenses” and “National
subsidies,” “Gain on sale of non-current assets” and “Insurance claim income” included in “Other” under “Extraordinary income”
and “Loss on tax purpose reduction entry of non-current assets” included in “Other” under “Extraordinary losses” for the fiscal
year ended March 31, 2020 have been presented separately from the fiscal year ended March 31, 2021 due to an increase in
financial significance. To reflect these changes in presentation, the reclassification of accounts has been made in the comparative
financial information for the fiscal year ended March 31, 2020.
As a result, the ¥393 million presented as “Rental income from non-current assets,” ¥435 million presented as “Insurance claim
income” and ¥1,523 million presented as “Other” under “Non-operating income” in the consolidated statement of income for
the fiscal year ended March 31, 2020 have been reclassified to be presented as ¥2,352 million of “Other,” and the ¥2,225 million
presented as “Other” under “Non-operating expenses” has been reclassified to be presented as ¥524 million of “Expenses for
ship lease” and ¥1,700 million of “Other.” The ¥790 million presented as “Other” under “Extraordinary income” has been
reclassified to be presented as ¥126 million of “National subsidies,” ¥11 million of “Gain on sale of non-current assets,” ¥168
million of “Insurance claim income” and ¥483 million of “Other.” The ¥725 million presented as “Other” under “Extraordinary
losses” has been reclassified to be presented as ¥126 million of “Loss on tax purpose reduction entry of non-current assets” and
¥598 million of “Other.” Furthermore, the ¥12,632 million presented as “Income taxes - current” and ¥(343) million presented
as “Refund of income taxes” have been reclassified to be presented as ¥12,289 million of “Income taxes – current.”
(Consolidated statement of cash flows)
“Loss on tax purpose reduction entry of non-current assets” included in “Other, net” under “Cash flows from operating activities”
for the fiscal year ended March 31, 2020 has been presented separately from the fiscal year ended March 31, 2021 due to an
increase in financial significance. In addition, “Payments of leasehold deposits,” which were presented separately under “Cash
–16–
flows from investing activities” for the fiscal year ended March 31, 2020, have been included in “Other, net” under “Cash flows
from investing activities” from the fiscal year ended March 31, 2021 due to a decrease in financial significance. To reflect these
changes in presentation, the reclassification of accounts has been made in the comparative financial information for the fiscal
year ended March 31, 2020.
As a result, the ¥(58) million presented as “Other, net” under “Cash flows from operating activities” in the consolidated statement
of cash flows for the fiscal year ended March 31, 2020 has been reclassified to be presented as ¥19 million of “Loss on tax
purpose reduction entry of non-current assets” and ¥(78) million of “Other, net,” and the ¥(19) million presented as “Payments
of leasehold deposits” and ¥65 million presented as “Other, net” under “Cash flows from investing activities” have been
reclassified to be presented as ¥45 million of “Other, net.”
(Additional Information)
(Expansion of the Scope of the Employee Share Grant System to Employees at the Company’s Managerial Positions)
At the Board of Directors’ Meeting held on March 11, 2021, the Company has resolved to expand the scope of the Employee
Share Grant System (introduced on October 16, 2019) for executive officers of the Company to include employees at managerial
positions of the Company, and to extend the term of the trust until March 31, 2026. In accordance with this, we have resolved to
place additional money in the trust for the trustee to acquire additional shares of the Company.
(1) Purpose of expanding the scope of the system
The purpose of this system is to realize the “sustainable enhancement of corporate value” by fostering employees’ sense of
participation in management and encouraging them to change their action with the incentive that employees receive economic
benefits from the increase in the stock price of the Company.
By expanding the scope of the system from executive officers to managers, we aim to encourage company-wide actions leading
to the enhancement of corporate value over the medium- to long- term, such as cross-company, holistic and optimal problem
solving, continuous development of self-directed human resources who can “think, decide and act on their own”, and creation of
new value with respect for diversity and ideas for solving social issues.
(2) Overview of the transaction
The system is a share grant system, in which a trust established and funded by the Company acquires shares of the Company,
and a number of such shares corresponding to the number of points granted to each person eligible for the system by the Company
shall be distributed to the eligible person through the trust.
(3) Treasury shares remaining in the trusts
The Company’s shares remaining in the Board Benefit Trust (BBT) and the Trust for Delivery of Shares to Employees are
recorded as treasury shares in the net assets section at the book value in the trusts (excluding the amount of incidental expenses).
The book value and the number of such treasury shares at the end of the fiscal year ended March 31, 2021 were ¥1,803 million
($16,293 thousand) and 1,018 thousand shares, respectively.
(Introduction of Trust-Type Employee Stock Ownership Plan (ESOP))
At the Board of Directors’ Meeting held on March 11, 2021, the Company has resolved to introduce a “Trust-Type Employee
Stock Ownership Plan (ESOP)” (hereinafter referred to as the “Plan”) as an incentive plan by utilizing the Group’s employee
shareholding association, for the purpose of enhancing the medium- to long-term corporate value and advancing benefits for its
employees.
(1) Purpose of introducing the Plan
The purpose of the Plan is to promote stable asset formation of the Group’s employees by activating the employee shareholding
association of the Group as part of its welfare program, as well as to enhance the Company’s medium- to long-term corporate
value by increasing the Group employees’ sense of participation in the corporate management and providing them with incentives
–17–
to improve business performance.
(2) Overview of the transaction
The Company is introducing this Plan to the Group’s employees who are member of the “Daio Paper Employee Shareholding
Association” (hereinafter referred to as the “Shareholding Association”).
The Company will establish an “Employee Shareholding Association Trust (third-party beneficiary trust)” (hereinafter referred
to as the “Shareholding Trust”), for which the Group’s employees, who are members of the Shareholding Association and have
fulfilled certain criteria, are the beneficiaries.
The Shareholding Trust will collectively acquire the Company’s shares for an amount expected to be acquired by the
Shareholding Association over the five years following the trust agreement, using funds procured through bank borrowings. The
Company will guarantee such borrowings undertaken by the Shareholding Trust.
After the introduction of the Plan, the acquisition of the Company’s shares by the Shareholding Association will be conducted
through purchase from the Shareholding Trust. If an amount equivalent to the net gain on sale of shares has accumulated in the
Shareholding Trust through the acquisition of the Company’s shares by the Shareholding Association, such amount will be
distributed to the Group’s employees who are beneficiaries when the trust period comes to an end. Meanwhile, if the Shareholding
Trust is unable to pay off the debt obligation due to a drop in the Company’s share price, the Company will repay the outstanding
debt to the lender bank. In such cases, the Group’s employees who are members of the Shareholding Association will not bear
the debt.
(3) Treasury shares remaining in the trust
The Company’s shares remaining in the trust are recorded as treasury shares in the net assets section at the book value in the trust
(excluding the amount of incidental expenses). The book value and the number of such treasury shares at the end of the fiscal
year ended March 31, 2021 were ¥999 million ($9,032 thousand) and 517 thousand shares, respectively.
(4) Book value of borrowings recorded using the gross method
Fiscal year ended March 31, 2020: Not applicable; fiscal year ended March 31, 2021: ¥999 million ($9,032 thousand)
(Impact of the COVID-19 Infection)
The spread of the COVID-19 infection is an event affecting the global economy and corporate activities inside and outside of Japan.
In Japan, although vaccination for certain groups of people has begun, restrictions on economic activity and daily lives remain in
place. In addition, as the infection of new variant of coronavirus, which is more infectious, is increasing, it is difficult to estimate
when the pandemic will be over at this time. With respect to our expected impact of the spread of this disease on earnings forecasts
and accounting estimates, we assume that the situation will gradually recover given that demands for products would change along
with the repetition of temporary spread and containment of the disease. Such an assumption is based on the current situation in
which the demand for papers is declining due to reasons, such as global economic slowdown, self-restraint of events and the spread
of remote working, whereas the demands for face masks and wet tissues are increasing, driven by the growing awareness of hygiene
among consumers. Based on the assumption, we have made accounting estimates, such as for the impairment of non-current assets.
However, any changes in the above assumption may affect the Group’s financial position and operating results because it will take
a considerable amount of time for the global economy to bounce back and there are many uncertainties about the impact of the
spread of the COVID-19 infection on economic activity.
–18–
(Notes to Consolidated Balance Sheet)
*1.
Assets pledged as collateral are as follows:
As of March 31, 2020
(Millions of Yen)
[–]
Cash and deposits
–
Buildings and structures
17,656 [17,057]
Machinery, equipment and vehicles
22,470 [21,918]
Land
30,193 [28,572]
[–]
Other
–
Total
70,319 [67,548]
Associated secured debt obligations are as follows:
As of March 31, 2020
(Millions of Yen)
Long-term borrowings (including
2,113
[1,945]
the current portion)
Long-term accounts payable –
facilities (including the current
407
[–]
portion)
Total
2,520
[1,945]
As of March 31, 2021
As of March 31, 2021
(Millions of Yen)
(Thousands of U.S. Dollars)
[–]
23,607
2,613
[–]
164,149
18,172 [15,008]
[135,562]
159,609
17,670 [17,164]
[155,036]
272,716
30,192 [28,571]
[258,073]
[–]
8,917
987
[–]
69,636 [60,743]
628,998
[548,671]
As of March 31, 2021
(Millions of Yen)
As of March 31, 2021
(Thousands of U.S. Dollars)
1,059
[924]
9,572
[8,354]
267
[–]
2,417
[–]
1,327
[924]
11,989
[8,354]
(Note) The figures in square brackets indicate the amounts of factory foundation mortgage and the debt secured by the
factory foundation mortgage.
*2.
The following are the amounts of the reduction entry associated with acquisition of property, plant and equipment using
government subsidies.
Buildings and structures
Machinery, equipment and vehicles
Land
Other
As of March 31, 2020
(Millions of Yen)
[1,102]
10
[5,439]
156
[568]
–
[122]
0
As of March 31, 2021
(Millions of Yen)
[1,102]
–
[6,288]
868
[568]
–
[122]
–
As of March 31, 2021
(Thousands of U.S. Dollars)
–
[9,954]
7,849
[56,800]
–
[5,136]
–
[1,104]
(Note) The figures in square brackets above indicate the accumulated amounts of the reduction entry associated with
acquisition of property, plant and equipment using the government subsidies.
*3.
Investments in unconsolidated subsidiaries and associates are as follows:
As of March 31, 2020
(Millions of Yen)
As of March 31, 2021
(Millions of Yen)
1,993
2,799
25,285
118
–
–
Investment securities (equity
securities)
Investments and other assets
Other (investments in capital)
4.
As of March 31, 2021
(Thousands of U.S. Dollars)
Guarantee liabilities
The Company has committed to provide the following debt guarantees for borrowings taken out by companies other than the
consolidated subsidiaries and associates from financial institutions.
As of March 31, 2020 As of March 31, 2021
(Millions of Yen)
(Millions of Yen)
Fujiseishi Cooperative
60
61
Other
Total
5.
As of March 31, 2021
(Thousands of U.S. Dollars)
554
–
21
198
60
83
752
Notes receivable transferred by endorsement
As of March 31, 2020
(Millions of Yen)
Notes receivable transferred by
endorsement
342
As of March 31, 2021
(Millions of Yen)
–
–19–
As of March 31, 2021
(Thousands of U.S. Dollars)
–
6.
Discounts on electronically recorded monetary claims - operating
As of March 31, 2020
(Millions of Yen)
Discounts on electronically
recorded monetary claims operating
As of March 31, 2021
(Millions of Yen)
884
–
As of March 31, 2021
(Thousands of U.S. Dollars)
–
(Notes to Consolidated Statement of Income)
*1.
Selling, general and administrative expenses mainly consist of the following:
Fiscal year ended
March 31, 2020
(Millions of Yen)
Fiscal year ended
March 31, 2021
(Thousands of U.S. Dollars)
Logistics and warehousing expenses
51,817
53,868
486,575
Salaries, allowances and bonuses
15,689
16,879
152,466
Provision for bonuses
1,957
2,086
18,846
806
694
6,270
Retirement benefit expenses
*2.
Fiscal year ended
March 31, 2021
(Millions of Yen)
Research and development expenses included in selling, general and administrative expenses and manufacturing costs are as
follows:
*3.
Fiscal year ended March 31, 2020
(Millions of Yen)
Fiscal year ended March 31, 2021
(Millions of Yen)
3,042
3,109
Fiscal year ended March 31, 2021
(Thousands of U.S. Dollars)
28,085
Foreign exchange gains
“Foreign exchange gains” recorded under extraordinary income for the fiscal year ended March 31, 2021 arose from forward
exchange contracts in relation to the acquisition of shares of Santher S.A.
*4.
The details of gain on sale of non-current assets are as follows:
Fiscal year ended
March 31, 2020
(Millions of Yen)
*5.
Fiscal year ended
March 31, 2021
(Millions of Yen)
Fiscal year ended
March 31, 2021
(Thousands of U.S. Dollars)
Buildings and structures
0
0
0
Machinery, equipment and vehicles
7
54
495
Land
3
9
83
Tools, furniture and fixtures, etc.
0
6
56
Total
11
70
634
The details of loss on sales and retirement of non-current assets are as follows:
Fiscal year ended
March 31, 2020
(Millions of Yen)
Fiscal year ended
March 31, 2021
(Millions of Yen)
Buildings and structures
295
189
1,709
Machinery, equipment and vehicles
255
472
4,264
5
15
137
Removal costs, etc.
942
1,120
10,118
Total
1,499
1,796
16,228
Land
–20–
Fiscal year ended
March 31, 2021
(Thousands of U.S. Dollars)
*6.
Impairment loss
The Group recognized impairment losses for the following asset groups.
For the fiscal year ended March 31, 2020
Use
Assets for rent
Idle assets
Type
Buildings and structures; tools,
furniture and fixtures
Buildings and structures,
machinery and equipment, land,
intangible assets - other
Location
Millions of Yen
Matsuyama City, Ehime
Prefecture
1,190
Shikoku-Chuo City, Ehime
Prefecture and other
551
The Group recognizes an impairment loss by grouping assets by business unit whose cash inflows and outflows are captured
consistently for managerial accounting purposes. Assets that are not directly in use for business operations (consisting of idle
assets, assets for rent and other assets) are grouped on an individual basis.
The book values of assets for rent (buildings and structures and tools, furniture and fixture) were written down to their
recoverable amounts as the cash flows are expected to remain negative from the fiscal year ending March 31, 2021 onwards.
The breakdown of the impairment losses is ¥1,172 million for building and structures and ¥17 million for tools, furniture and
fixture. The recoverable amounts of the assets for rent are measured at value in use, which is determined by discounting
future cash flows at 6.2%.
The book values of idle assets (buildings and structures, machinery and equipment, land, and intangible assets - other)
were written down to their recoverable amounts. The breakdown of the impairment losses is ¥0 million for buildings and
structures, ¥19 million for machinery and equipment, ¥15 million for land and ¥515 million for intangible assets - other. The
recoverable amounts of idle assets are measured at net selling price by valuing the assets primarily at their estimated selling
price.
For the fiscal year ended March 31, 2021
Use
Other assets
Business assets
Idle assets
Type
Goodwill, trademark right
Buildings and structures,
machinery and equipment, etc.
Structures; machinery and
equipment; tools, furniture and
fixtures; land
Location
Fuji City, Shizuoka
Prefecture
West Java Province,
Indonesia
Shikoku-Chuo City, Ehime
Prefecture and other
Millions of Yen
Thousands of
U.S. Dollars
1,526
13,790
983
8,886
65
590
The Group recognizes an impairment loss by grouping assets by business unit whose cash inflows and outflows are captured
consistently for managerial accounting purposes. Assets that are not directly in use for business operations (consisting of idle
assets, assets for rent and other assets) are grouped on an individual basis.
The book values of other assets (goodwill, trademark right) were written down to their recoverable amounts as the profit
levels of some of its consolidated subsidiaries are expected to fall short of the levels set forth in their business plans, which
the Company formulated at the time of the acquisition. The breakdown of the impairment losses is ¥1,143 million ($10,327
thousand) for goodwill and ¥383 million ($3,463 thousand) for trademark right.
The book values of business assets (buildings and structures, machinery and equipment, etc.) were written down to their
recoverable amounts as the profitability of the assets declined due to consistent losses in operating profit. The breakdown of
the impairment losses is ¥191 million ($1,730 thousand) for buildings and structures, ¥588 million ($5,320 thousand) for
machinery and equipment, and ¥203 million ($1,836 thousand) for others.
The book value of idle assets (structures; machinery and equipment; tools, furniture and fixtures; land) were written down
to their recoverable amounts. The breakdown of the impairment losses in ¥10 million ($99 thousand) for structures, ¥51
million ($465 thousand) for machinery and equipment, ¥0 million ($2 thousand) for tools, furniture and fixtures and ¥2
–21–
million ($24 thousand) for land.
The recoverable amounts of business assets and idle assets are measured at net selling price by valuing the assets primarily
at their estimated selling price.
*7.
The amounts of inventories at the end of the fiscal years are calculated by writing down the value based on any decreased
profitability. Losses on valuation of inventories included in cost of sales are shown as follows:
Fiscal year ended March 31, 2020
(Millions of Yen)
Fiscal year ended March 31, 2021
(Millions of Yen)
640
Fiscal year ended March 31, 2021
(Thousands of U.S. Dollars)
965
8,721
(Note to Consolidated Statement of Comprehensive Income)
*
The reclassification and tax effects allocated to each component of other comprehensive income are as follows:
Fiscal year ended
March 31, 2020
(Millions of Yen)
Fiscal year ended
March 31, 2021
(Millions of Yen)
(1,973)
2,030
18,342
(6,759)
(175)
(1,588)
(8,733)
1,854
16,754
2,391
(453)
(4,100)
(6,341)
1,400
12,654
Amount arising during the year
13
32
293
Reclassification adjustments
Valuation difference on available-for-sale
securities:
Amount arising during the year
Reclassification adjustments
Before tax effect adjustment
Tax effect
Valuation difference on available-forsale securities
Deferred gains or losses on hedges:
Fiscal year ended
March 31, 2021
(Thousands of U.S. Dollars)
29
(13)
(125)
Before tax effect adjustment
42
18
168
Tax effect
(13)
(5)
(51)
Deferred gains or losses on hedges
29
12
117
Amount arising during the year
685
(3,539)
(31,973)
Reclassification adjustments
－
－
0
Before tax effect adjustment
685
(3,539)
(31,973)
Tax effect
Foreign currency translation
adjustment
Remeasurements of defined benefit plans,
net of tax:
Amount arising during the year
－
－
0
685
(3,539)
(31,973)
(164)
1,434
12,953
34
(122)
(1,102)
(129)
1,312
11,851
46
(428)
(3,869)
(83)
883
7,982
－
26
238
－
(0)
(1)
－
26
237
(5,709)
(1,215)
(10,983)
Foreign currency translation adjustment:
Reclassification adjustments
Before tax effect adjustment
Tax effect
Remeasurements of defined benefit
plans, net of tax
Share of other comprehensive income of
entities accounted for using equity method:
Amount arising during the year
Reclassification adjustments
Share of other comprehensive income
of entities accounted for using equity
method
Total other comprehensive income
–22–
(Notes to Consolidated Statement of Changes in Net Assets)
For the fiscal year ended March 31, 2020
1. Type and number of shares issued and type and number of treasury shares are summarized as follows:
Number of shares
Increase
Decrease
April 1, 2019
(in thousands)
(in thousands)
(in thousands)
Number of shares
March 31, 2020
(in thousands)
Shares issued:
Common stock
153,713
819
–
154,532
153,713
819
–
154,532
Common stock (Note)
3,620
306
302
3,624
Total
3,620
306
302
3,624
Total
Treasury shares:
(Notes) 1. The 819 thousand share increase in the number of shares issued of common stock is due to conversion of convertible
bonds.
2. The Company has introduced a stock-based incentive system using the Board Benefit Trust (BBT) for Directors, etc.
Accordingly, the number of treasury shares as of March 31, 2020 includes 302 thousand shares of the Company’s
stock held by the trust account.
(Overview of reasons for change in the number of treasury shares)
The major breakdown of the increase is as follows:
Acquisition by the trust for the BBT:
302 thousand shares
Increase due to purchase of shares in less than standard units, etc.:
4 thousand shares
The major breakdown of the decrease is as follows:
Sale to the trust for the BBT:
302 thousand shares
2. Stock acquisition rights and treasury stock acquisition rights
Company
name
Details
Filing
company
Euro Yen Zero Coupon
Convertible Bonds due
2020 (issued on
September 17, 2015)
Type of stock Number of shares subject to stock acquisition rights
(in thousands) (Note 2)
subject to stock
acquisition
April 1,
March 31,
Increase
Decrease
rights
2019
2020
Common
stock
16,452
–
819
15,633
Balance as of
March 31, 2020
(Millions of Yen)
(Note 1)
(Note 3)
(Notes) 1. Convertible bonds are accounted for using the lump-sum method, by which a bond portion and a stock acquisition
right portion are treated as non-separable.
2. The number of shares subject to stock acquisition rights shown above is the number of shares based on the assumption
that the stock acquisition rights were fully exercised.
3. Reason for change in number of shares subject to stock acquisition rights
A decrease in the number of shares subject to stock acquisition rights is due to conversion of convertible bonds.
3. Dividends
(1) Amount of cash dividends distributed
Resolution
General
Shareholders’
Meeting held on
June 27, 2019
Board of Directors’
Meeting held on
November 13, 2019
Type of shares
Total amount of
dividends
(Millions of Yen)
Common stock
829
5.50
Common stock
753
5.00
Dividends per share
(Yen)
–23–
Record date
Effective date
March 31, 2019
June 28, 2019
September 30, 2019 December 6, 2019
(2) Dividends with record date in the current fiscal year, and effective date in the following fiscal year
Total amount of
Source of
Dividends per
Resolution
Type of shares
dividends
Record date
dividends
share (Yen)
(Millions of Yen)
General
Shareholders’
Retained
Common stock
1,291
8.50 March 31, 2020
Meeting held on
earnings
June 26, 2020
Effective date
June 29, 2020
(Note) The total amount of dividends resolved at the General Shareholders’ Meeting held on June 26, 2020 includes ¥2 million of
dividends paid to the trust account for the BBT established for the stock-based incentive system for Directors, etc.
For the fiscal year ended March 31, 2021
1. Type and number of shares issued and type and number of treasury shares are summarized as follows:
Number of shares
Increase
Decrease
April 1, 2020
(in thousands)
(in thousands)
(in thousands)
Number of shares
March 31, 2021
(in thousands)
Shares issued:
Common stock
154,532
14,481
－
169,013
154,532
14,481
－
169,013
Common stock (Note)
3,624
1,233
1,940
2,917
Total
3,624
1,233
1,940
2,917
Total
Treasury shares:
(Notes) 1. The 14,481 thousand share increase in the number of shares issued of common stock is due to conversion of
convertible bonds.
2. The Company has introduced a stock-based incentive system using the BBT for Directors, etc. Accordingly, the
numbers of treasury shares as of April 1, 2020 and March 31, 2021 include 302 thousand shares and 1,018 thousand
shares of the Company’s stock held by the trust account, respectively. The Company has also introduced the
Shareholding Trust, for which the Group’s employees, who are members of the Shareholding Association and have
fulfilled certain criteria, are the beneficiaries. Accordingly, the number of treasury shares as of March 31, 2021
includes 517 thousand shares of the Company’s stock held by the trust account.
(Overview of reasons for change in the number of treasury shares)
The major breakdown of the increase is as follows:
Acquisition by the trust for the BBT:
716 thousand shares
Acquisition by the trust for the Shareholding Trust:
517 thousand shares
The major breakdown of the decrease is as follows:
Sale to the trust for the BBT:
716 thousand shares
Sale to the trust for the Shareholding Trust:
517 thousand shares
Sale of the Company’s shares by subsidiaries:
552 thousand shares
2. Stock acquisition rights and treasury stock acquisition rights
Company
name
Details
Filing
company
Euro Yen Zero Coupon
Convertible Bonds due
2020 (issued on
September 17, 2015)
Balance as of
Type of stock Number of shares subject to stock acquisition rights
March
31, 2021
(in thousands) (Note 2)
subject to stock
(Millions of Yen/
acquisition
April 1,
March 31, Thousands of U.S.
Increase
Decrease
rights
2020
2021
Dollars)
Common
stock
15,633
–
15,633
–
(Note 1)
(Note 3)
(Notes) 1. Convertible bonds are accounted for using the lump-sum method, by which a bond portion and a stock acquisition
right portion are treated as non-separable.
2. The number of shares subject to stock acquisition rights shown above is the number of shares based on the assumption
that the stock acquisition rights were fully exercised.
3. Reason for change in number of shares subject to stock acquisition rights
A decrease in the number of shares subject to stock acquisition rights is due to conversion of convertible bonds.
–24–
3. Dividends
(1) Amount of cash dividends distributed
Resolution
General
Shareholders’
Meeting held on
June 26, 2020
Board of Directors’
Meeting held on
November 11, 2020
Resolution
General
Shareholders’
Meeting held on
June 26, 2020
Board of Directors’
Meeting held on
November 11, 2020
Type of shares
Total amount of
dividends
(Millions of Yen)
Dividends per share
(Yen)
Common stock
1,291
8.50
Common stock
1,164
7.00
Type of shares
Record date
Effective date
March 31, 2020
June 29, 2020
September 30, 2020 December 4, 2020
Total amount of
dividends
Dividends per share
(Thousands of U.S.
(U.S. Dollars)
Dollars)
Common stock
11,663
0.08
Common stock
10,521
0.06
Record date
Effective date
March 31, 2020
June 29, 2020
September 30, 2020 December 4, 2020
(Note) The total amounts of dividends resolved at the General Shareholders’ Meeting held on June 26, 2020 and the Board of
Directors’ Meeting held on November 11, 2020 include ¥2 million ($23 thousand) and ¥2 million ($19 thousand) of
dividends, respectively, paid to the trust account for the BBT established for the stock-based incentive system for Directors,
etc.
(2) Dividends with record date in the current fiscal year, and effective date in the following fiscal year
Total amount of
Source of
Dividend per
Resolution
Type of shares
dividends
Record date
dividends
share (Yen)
(Millions of Yen)
General
Shareholders’
Retained
Common stock
1,676
10.00 March 31, 2021
Meeting held on
earnings
June 29, 2021
Resolution
General
Shareholders’
Meeting held on
June 29, 2021
Total amount of
dividends
Type of shares
(Thousands of U.S.
Dollars)
Source of
dividends
Dividend per
share
(U.S. Dollars)
Common stock
Retained
earnings
0.09
15,141
Effective date
June 30, 2021
Record date
Effective date
March 31, 2021
June 30, 2021
(Note) The total amount of dividends resolved at the General Shareholders’ Meeting held on June 29, 2021 includes ¥10 million
($91 thousand) of dividends paid to the trust account for the BBT established for the stock-based incentive system for
Directors, etc. and ¥5 million ($46 thousand) of dividends paid to the trust account for the Shareholding Trust established
upon the introduction of the Trust-Type Employee Stock Ownership Plan (ESOP).
(Notes to Consolidated Statement of Cash Flows)
*1.
Cash and cash equivalents in the consolidated statement of cash flows for the fiscal years ended March 31, 2020 and 2021
are reconciled to the accounts reported in the consolidated balance sheet as of March 31, 2020 and 2021 as follows:
Fiscal year ended
Fiscal year ended
Fiscal year ended
March 31, 2020
March 31, 2021
March 31, 2021
(Millions of Yen)
(Millions of Yen)
(Thousands of U.S. Dollars)
Cash and deposits
113,054
130,643
1,180,050
Time deposits with maturities of
(3,669)
(342)
(3,091)
more than three months
Cash and cash equivalents
109,384
130,301
1,176,959
–25–
*2.
Breakdown of assets and liabilities of the companies that newly became consolidated subsidiaries following the Company’s
acquisition of their shares
For the fiscal year ended March 31, 2020
Not applicable.
For the fiscal year ended March 31, 2021
The breakdown of assets and liabilities and the reconciliation to the share acquisition price and net cash used in the acquisition
of Santher S.A. through the acquisition of its shares are as follows:
Millions of Yen
Current assets
Non-current assets
Goodwill
Current liabilities
Non-current liabilities
Non-controlling interests
Acquisition price
Cash and cash equivalents
Accounts payable - other
Net cash used in the acquisition
10,720
31,687
20,502
(11,042)
(19,876)
19,698
51,690
(1,359)
(4,894)
45,436
Thousands of
U.S. Dollars
96,831
286,218
185,194
(99,741)
(179,532)
177,931
466,901
(12,282)
(44,209)
410,410
The breakdown of assets and liabilities and the reconciliation to the share acquisition price and net cash used in the acquisition
of Elleair International Turkey A.Ş. through the acquisition of its shares are as follows:
Millions of Yen
Current assets
Non-current assets
Goodwill
Current liabilities
Non-current liabilities
Non-controlling interests
Foreign currency translation adjustment
Acquisition price
Cash and cash equivalents
Acquisition through a debt-equity swap
Accounts receivable - other
Net cash used in the acquisition
976
468
1,700
(2,903)
(59)
(8)
(1)
172
(22)
2,186
33
2,370
–26–
Thousands of
U.S. Dollars
8,817
4,231
15,362
(26,222)
(541)
(73)
(13)
1,561
(203)
19,747
304
21,409
(Lease Transactions)
1. Finance lease transactions
Finance lease transactions in which ownership of the leased assets is not transferred to the lessee
Details of leased assets
Property, plant and equipment
Mainly production facilities (machinery, equipment and vehicles)
Depreciation and amortization of leased assets
As described in “4. Accounting policies (2) Depreciation and amortization methods for significant depreciable assets,” leased
assets are depreciated or amortized using the straight-line method over the lease term with no residual value.
2. Operating lease transactions
(Lessee)
Future minimum lease payments relating to non-cancellable operating leases
As of March 31, 2020
As of March 31, 2021
(Millions of Yen)
(Millions of Yen)
As of March 31, 2021
(Thousands of U.S. Dollars)
Due within one year
1,954
1,909
17,249
Due after one year
13,059
11,015
99,503
15,014
12,925
116,752
Total
(Financial Instruments)
1. Overview
(1) Group policy for financial instruments
The Group raises funds required to implement the capital investment plan through bank borrowings and bond issues. Also,
the Group raises short-term working capital through bank borrowings. Derivative financial instruments are utilized to reduce
risks and the Group does not hold or issue derivative financial instruments for speculative trading purposes.
(2) Details of financial instruments and risks
Trade receivables, presented as notes and accounts receivable – trade, are exposed to credit risk of customers. Investment
securities are mostly stocks that are held by the Group in conjunction with the business or capital alliance with our business
partners and are exposed to the risk of market price fluctuation. The Company is also a lender who delivers long-term loans
to its subsidiaries and business partners.
Trade payables, presented as notes and accounts payable – trade, are mostly due within one year. Borrowings and bonds
payable are taken out primarily for the purpose of financing the Group’s capital expenditures. While the floating-rate
borrowings are exposed to interest rate fluctuation risk, part of the risks are hedged by using derivative financial instruments,
i.e. interest rate swap transactions.
Derivative transactions used by the Company include interest rate swap transactions and forward exchange contracts.
These are used to manage the risk of significant financial impact arising from interest rate fluctuations on interest expenses
from borrowings and exchange rate fluctuations on foreign currency trade receivables and payables, respectively. Regarding
hedging instruments and hedged items, the hedging policy and method for evaluation of hedge effectiveness of hedging
activities, please refer to “4. Accounting policies (6) Significant hedge accounting method.”
(3) Risk management for financial instruments
1) Management of credit risk (the risk of non-performance by business counterparts)
The Company protects and manages trade receivables by first establishing a credit limit of each customer based on their
financial situation and creditworthiness, and then monitoring the due dates and the outstanding balance on a customer-bycustomer basis primarily in accordance with the Credit Control Regulations, which are the Company’s internal rules.
–27–
Creditworthiness is measured using credit information obtained through the credit-reporting agencies and collected by the
Company on its own behalf. Furthermore, the Company takes appropriate measures, such as holding transaction credit
insurance and factoring, to protect and manage certain trade receivables. In addition, long-term loans receivable are
controlled by regularly updating the borrowers’ financial situation on top of monitoring the due dates and the outstanding
balances so as to quickly detect and reduce concerns about collection. The consolidated subsidiaries also follow the same
procedures in accordance with the Company’s Credit Control Regulations.
2) Management of market risk (the risk of foreign exchange and interest rate fluctuations)
The Company and certain consolidated subsidiaries use interest rate swap transactions to reduce the risk of interest rate
fluctuations on interest expenses from borrowings.
Investment securities are subject to review on a regular basis to allow for appropriate portfolio decisions by monitoring
their fair values and the financial situation of business partners whose shares are owned by the Company, and evaluating
the relationship with them.
Regarding derivative transactions, the basic policy is determined by the Board of Directors and transactions are entered
into by the Treasury Department in accordance with the Derivatives Transaction Control Regulations, which is the
Company’s internal rule.
3) Management of liquidity risk related to financing activities (the risk of non-performance on a due date)
The Company manages liquidity risk, or the risk of non-performance by the Company on due dates, associated with trade
payables and borrowings primarily through monthly preparation of a cash budget by the Treasury Department based on the
reported forecasts received from each department. The consolidated subsidiaries also manage liquidity risk by preparing a
cash budget in the same manner on a monthly basis.
(4) Supplemental explanation regarding fair value of financial instruments
Fair value of financial instruments is measured based on quoted market prices, if available, or reasonably assessed value if a
quoted market price is not available. Fair value of financial instruments for which a quoted market price is not available is
calculated based on certain assumptions, and the fair value might differ if different assumptions are used.
–28–
2. Matters related to fair values of financial instruments
Book value, fair value and their difference are summarized as follows. Financial instruments whose fair values are extremely
difficult to determine are excluded from the following table (See Note 2 for details.)
For the fiscal year ended March 31, 2020
(Millions of Yen)
Book value
Fair value
Difference
(1) Cash and deposits
(2) Notes and accounts receivable – trade
(3) Electronically recorded monetary claims operating
(4) Investment securities
(5) Long-term loans receivable
(including the current portion)
Allowance for doubtful accounts (*1)
Net amount
113,054
92,741
113,054
92,741
－
－
10,982
10,982
－
18,744
18,744
－
(823)
3,000
3,095
95
Total of assets
238,522
238,618
95
(1)
(2)
(3)
(4)
(5)
(6)
53,135
15,452
39,215
10,946
60,300
53,135
15,452
39,215
10,946
60,101
－
－
－
－
(198)
22,540
22,782
241
295,824
294,003
(1,821)
1,105
1,102
(3)
498,521
496,739
(1,782)
[14]
[14]
－
Notes and accounts payable – trade
Short-term borrowings
Accounts payable – other
Income taxes payable
Bonds payable
Current portion of bonds with share
acquisition rights
(7) Long-term borrowings
(8) Long-term accounts payable – facilities
(including the current portion)
Total liabilities
3,823
Derivative transactions (*2)
(*1) Allowance for doubtful accounts separately accounted for on long-term loans receivable is deducted.
(*2) Receivables and payables from derivatives transactions are presented on a net basis with figures in square brackets
representing net payable balances.
–29–
For the fiscal year ended March 31, 2021
(Millions of Yen)
Book value
Fair value
Difference
(1) Cash and deposits
(2) Notes and accounts receivable – trade
(3) Electronically recorded monetary claims operating
(4) Investment securities
(5) Long-term loans receivable
(including the current portion)
(6) Long-term deposits
Total of assets
(1) Notes and accounts payable – trade
130,643
100,019
130,643
100,019
－
－
8,005
8,005
－
18,279
18,279
－
3,000
3,026
26
314
260,261
64,662
314
260,288
64,662
－
26
－
(2)
(3)
(4)
(5)
(6)
13,744
40,191
6,492
60,000
13,744
40,191
6,492
59,986
－
－
－
(14)
348,838
347,042
(1,796)
581
580
(1)
534,512
[32]
532,700
[32]
(1,812)
－
Short-term borrowings
Accounts payable – other
Income taxes payable
Bonds payable (including the current portion)
Long-term borrowings
(including the current portion)
(7) Long-term accounts payable – facilities
(including the current portion)
Total liabilities
Derivative transactions (*)
(Thousands of U.S. Dollars)
Book value
(1) Cash and deposits
(2) Notes and accounts receivable – trade
(3) Electronically recorded monetary claims operating
(4) Investment securities
(5) Long-term loans receivable
(including the current portion)
(6) Long-term deposits
Total of assets
(1)
(2)
(3)
(4)
(5)
(6)
Notes and accounts payable – trade
Short-term borrowings
Accounts payable – other
Income taxes payable
Bonds payable (including the current portion)
Long-term borrowings
(including the current portion)
(7) Long-term accounts payable – facilities
(including the current portion)
Total liabilities
Fair value
Difference
1,180,050
1,180,050
－
903,434
903,434
－
72,309
72,309
－
165,110
165,110
－
27,098
27,336
238
2,842
2,350,843
2,842
2,351,081
－
238
584,074
124,150
363,030
58,649
541,956
584,074
124,150
363,030
58,649
541,830
－
－
－
－
(126)
3,150,926
3,134,696
(16,230)
5,255
5,242
(13)
4,828,040
4,811,671
(16,369)
Derivative transactions (*)
[293]
[293]
－
(*) Receivables and payables from derivatives transactions are presented on a net basis with figures in squire brackets
representing net payable balances.
–30–
(Note 1) The method for measuring fair values of financial instruments and matters relating to securities
Assets:
(1) Cash and deposits, (2) Notes and accounts receivable – trade, (3) Electronically recorded monetary claims - operating
As these instruments are settled within a short term and their fair values approximate book values, their fair values are equal
to their book values.
(4) Investment securities
Fair value of investment securities equals the price quoted in the stock exchange. Please refer to the section “(Securities)”
regarding matters concerning the securities classified by holding purpose.
(5) Long-term loans receivable
Fair value of long-term loans receivable (including the current portion) is determined by discounting the total of principal
and interest at the rate that consists of an appropriate rate such as the government bond yield plus an adjustment factor
reflecting the credit risk.
(6) Long-term deposits
Fair value of long-term deposits is equal to their book value as they bear floating interest rates and reflect market interest
rates within a short period of time, and thus their fair value is considered to approximate book value.
Liabilities:
(1) Notes and accounts payable – trade, (2) Short-term borrowings, (3) Accounts payable – other, (4) Income taxes payable
As these instruments are settled within a short term and their fair values approximate book values, their fair values are equal
to their book values.
(5) Bonds payable
Fair value of bonds payable (including the current portion) is determined based on a quoted market price if any. In cases
where quoted market prices are not available, it is determined by discounting the total of principal and interest at the rate that
reflects the remaining life of the bond and its credit risk.
(6) Long-term borrowings, (7) Long-term accounts payable – facilities
Fair values of long-term borrowings (including the current portion) and long-term accounts payable – facilities (including
the current portion) are determined by discounting the total amount of principal and interest with an interest rate to be applied
if similar new borrowings were entered into or similar new equipment were purchased.
(Note 2) Financial instruments whose fair values are deemed to be extremely difficult to determine
As of March 31, 2020
As of March 31, 2021
Category
(Millions of Yen)
(Millions of Yen)
As of March 31, 2021
(Thousands of U.S. Dollars)
Non-marketable equity securities
2,444
2,278
20,583
Shares of subsidiaries and associates
1,994
3,873
34,990
As these financial instruments do not have quoted market prices and their fair values are deemed to be extremely difficult to
determine, they are not included in “(4) Investment securities.”
–31–
(Note 3) Redemption schedule for financial receivables and securities with maturity dates after the consolidated balance sheet date
As of March 31, 2020
Due within
Due after one year Due after five years
one year
through five years through ten years
112,977
–
–
Deposits
(Millions of Yen)
Due after ten
years
–
92,741
–
–
–
10,982
–
–
–
(1) Bonds (corporate bonds)
–
–
–
–
(2) Other
–
–
–
–
Long-term loans receivable
–
3,000
–
823
Total
216,701
3,000
–
823
Due within
Due after one year Due after five years
one year
through five years through ten years
130,581
－
－
(Millions of Yen)
Due after ten
years
－
Notes and accounts receivable – trade
Electronically recorded monetary claims operating
Investment securities
Available-for-sale securities with maturity dates
As of March 31, 2021
Deposits
100,019
－
－
－
8,005
－
－
－
(1) Bonds (corporate bonds)
－
－
－
－
(2) Other
－
－
－
－
3,000
－
－
－
35
－
－
279
241,641
－
－
279
Notes and accounts receivable – trade
Electronically recorded monetary claims operating
Investment securities
Available-for-sale securities with maturity dates
Long-term loans receivable
Long-term deposits
Total
(Thousands of U.S. Dollars)
Due within
Due after one year Due after five years Due after ten
one year
through five years through ten years
years
1,179,489
－
－
－
Deposits
Notes and accounts receivable – trade
Electronically recorded monetary claims operating
Investment securities
903,434
－
－
－
72,309
－
－
－
－
－
－
－
Available-for-sale securities with maturity dates
(1) Bonds (corporate bonds)
(2) Other
Long-term loans receivable
Long-term deposits
Total
－
－
－
－
27,098
－
－
－
319
－
－
2,523
2,182,649
－
－
2,523
–32–
(Note 4) Repayment schedule for bonds payable, long-term borrowings, lease obligations and other interest-bearing debt after the
consolidated balance sheet date
As of March 31, 2020
(Millions of Yen)
Due within
one year
Short-term borrowings
Between one to Between two to Between three Between four to
Over five years
two years
three years
to four years
five years
15,452
－
－
－
－
－
－
15,300
15,000
－
10,000
20,000
Convertible bond-type bonds
with share acquisition rights
22,530
－
－
－
－
－
Long-term borrowings
53,724
62,969
53,465
49,248
52,159
24,257
537
385
168
13
2
－
Lease obligations
1,012
770
526
379
208
359
Total
93,256
79,425
69,160
49,640
62,370
44,616
Bonds payable
Long-term accounts payable –
facilities
As of March 31, 2021
(Millions of Yen)
Due within
one year
Between one to Between two to Between three Between four to
Over five years
two years
three years
to four years
five years
Short-term borrowings
13,744
－
－
－
－
－
Bonds payable
15,000
15,000
－
10,000
15,000
5,000
－
－
－
－
－
－
64,813
65,634
75,629
71,936
38,171
32,652
388
171
15
5
1
－
Lease obligations
1,387
1,963
756
469
327
2,357
Total
95,333
82,769
76,402
82,411
53,500
40,010
Convertible bond-type bonds
with share acquisition rights
Long-term borrowings
Long-term accounts payable –
facilities
(Thousands of U.S. Dollars)
Due within
one year
Between one to Between two to Between three Between four to
Over five years
two years
three years
to four years
five years
Short-term borrowings
124,150
－
－
－
－
－
Bonds payable
135,489
135,489
－
90,326
135,489
45,163
－
－
－
－
－
－
585,433
592,853
683,130
649,778
344,791
294,941
Long-term accounts payable –
facilities
3,506
1,545
144
46
14
－
Lease obligations
12,536
17,734
6,836
4,245
2,956
21,297
Total
861,114
747,621
690,110
744,395
483,250
361,401
Convertible bond-type bonds
with share acquisition rights
Long-term borrowings
–33–
(Securities)
1. Available-for-sale securities
As of March 31, 2020
(Millions of Yen)
Classification
Securities for which book
value exceeds cost
Securities for which book
value does not exceed cost
Type of securities
Book value
Cost
Difference
Equity securities
13,843
8,129
5,714
Equity securities
4,900
6,284
(1,384)
18,744
14,413
4,330
Total
(Note) Non-marketable equity securities (with book value of ¥2,444 million) are not included in “available-for-sale securities” in
the above table because they have no quoted market price and thus it is extremely difficult to determine their fair values.
As of March 31, 2021
(Millions of Yen)
Classification
Securities for which book
value exceeds cost
Securities for which book
value does not exceed cost
Type of securities
Book value
Cost
Difference
Equity securities
13,305
7,076
6,229
Equity securities
4,973
5,423
(449)
18,279
12,499
5,780
Total
(Thousands of U.S. Dollars)
Classification
Securities for which book
value exceeds cost
Securities for which book
value does not exceed cost
Type of securities
Book value
Cost
Difference
Equity securities
120,183
63,915
56,268
Equity securities
44,927
48,984
(4,057)
165,110
112,899
52,211
Total
(Note) Non-marketable equity securities (with book value of ¥2,278 million ($20,583 thousand)) are not included in “availablefor-sale securities” in the above table because they have no quoted market price and thus it is extremely difficult to
determine their fair values.
2. Available-for-sale securities sold
For the fiscal year ended March 31, 2020
(Millions of Yen)
Type of securities
Proceeds from sale
7,700
Equity securities
Gain on sale
Loss on sale
6,778
0
For the fiscal year ended March 31, 2021
(Millions of Yen)
Type of securities
Proceeds from sale
1,427
Equity securities
Gain on sale
Loss on sale
435
48
(Thousands of U.S. Dollars)
Type of securities
Proceeds from sale
12,892
Equity securities
–34–
Gain on sale
Loss on sale
3,934
439
3. Impairment of investment in securities
For the fiscal year ended March 31, 2020
The Company recorded impairment losses of ¥19 million on securities, which consist solely of available-for-sale securities.
For securities whose fair values at the end of the fiscal year have declined by 50% or more compared with their cost, loss
on impairment is recorded without exception. For securities whose fair value at the end of the fiscal year have declined by
30% or more but less than 50% compared with cost, loss on impairment is recorded if it is deemed necessary in consideration
of the possibility of the fair values being restored.
For the fiscal year ended March 31, 2021
The Company recorded impairment losses of ¥213 million ($1,930 thousand) on securities, which consist solely of availablefor-sale securities.
For securities whose fair values at the end of the fiscal year have declined by 50% or more compared with their cost, loss
on impairment is recorded without exception. For securities whose fair value at the end of the fiscal year have declined by
30% or more but less than 50% compared with cost, loss on impairment is recorded if it is deemed necessary in consideration
of the possibility of the fair values being restored.
(Derivatives Transactions)
1. Derivatives contracts outstanding to which the hedge accounting was not applied
There were no relevant transactions.
2. Derivatives contracts outstanding to which the hedge accounting was applied
(1) Currency-related derivatives
As of March 31, 2020
Hedge accounting
method
Type of derivatives
transactions
Major hedged item
Contract amount
(Millions of Yen)
of which due
after one year
Fair value
(Millions of Yen)
Forward exchange
contract
Designated hedge
accounting treatment
(furiate shori)
applicable to forward
exchange contracts
Sell
Accounts receivable –
trade
USD
0
–
(Note 2)
6,404
–
(Note 2)
6,405
–
–
Buy
Accounts payable –
trade
USD
Total
(Notes) 1. Fair values are determined based on the prices quoted by counterparty financial institutions.
2. The fair values of forward exchange contracts are included in those of accounts receivable and payable – trade because
when forward exchange contracts qualify for designated hedge accounting treatment (furiate shori), they are accounted
for together with foreign currency denominated financial receivables and payables (the hedged items) as one set of
transactions.
–35–
As of March 31, 2021
Hedge accounting
method
Type of derivatives
transactions
Major hedged item
Contract amount
(Millions of Yen)
of which due
after one year
Fair value
(Millions of Yen)
Forward exchange
contract
Designated hedge
accounting treatment
(furiate shori)
applicable to forward
exchange contracts
Sell
Accounts receivable –
trade
USD
Accounts payable –
trade
Total
Designated hedge
accounting treatment
(furiate shori)
applicable to forward
exchange contracts
–
(Note 2)
3,003
–
(Note 2)
3,006
–
–
Contract amount
(Thousands of U.S. Dollars)
of which due
after one year
Fair value
(Thousands of U.S.
Dollars)
Buy
USD
Hedge accounting
method
2
Type of derivatives
transactions
Major hedged item
Forward exchange
contract
Sell
Accounts receivable –
trade
USD
23
–
(Note 2)
27,132
–
(Note 2)
27,155
–
–
Buy
USD
Accounts payable –
trade
Total
(Notes) 1. Fair values are determined based on the prices quoted by counterparty financial institutions.
2. The fair values of forward exchange contracts are included in those of accounts receivable and payable – trade because
when forward exchange contracts qualify for designated hedge accounting treatment (furiate shori), they are accounted
for together with foreign currency denominated financial receivables and payables (the hedged items) as one set of
transactions.
(2) Interest rate-related derivatives
As of March 31, 2020
Hedge accounting
method
Exceptional hedge
accounting treatment
(tokurei shori)
applicable to interest
rate swap contracts
Type of derivatives
transactions
Major hedged item
Interest rate swap
contract
Long-term borrowings
Floating rate receipt/
fixed rate payment
Contract amount
(Millions of Yen)
of which due
after one year
50,752
47,228
Fair value
(Millions of Yen)
(Note 2)
(Notes) 1. Fair values are determined based on the prices quoted by counterparty financial institutions.
2. The fair values of interest rate swap contracts are included in those of long-term borrowings because when interest rate
swap contracts qualify for exceptional hedge accounting treatment (tokurei shori), they are accounted for together with
long-term borrowings (the hedged items) as one set of transactions.
–36–
As of March 31, 2021
Hedge accounting
method
Exceptional hedge
accounting treatment
(tokurei shori)
applicable to interest
rate swap contracts
Hedge accounting
method
Exceptional hedge
accounting treatment
(tokurei shori)
applicable to interest
rate swap contracts
Type of derivatives
transactions
Major hedged item
Interest rate swap
contract
Long-term borrowings
Floating rate receipt/
fixed rate payment
Type of derivatives
transactions
Major hedged item
Interest rate swap
contract
Long-term borrowings
Floating rate receipt/
fixed rate payment
Contract amount
(Millions of Yen)
of which due
after one year
50,274
Fair value
(Millions of Yen)
50,274
(Note 2)
Contract amount
(Thousands of U.S. Dollars)
of which due
after one year
Fair value
(Thousands of U.S.
Dollars)
454,112
454,112
(Note 2)
(Notes) 1. Fair values are determined based on the prices quoted by counterparty financial institutions.
2. The fair values of interest rate swap contracts are included in those of long-term borrowings because when interest rate
swap contracts qualify for exceptional hedge accounting treatment (tokurei shori), they are accounted for together with
long-term borrowings (the hedged items) as one set of transactions.
(Retirement Benefits)
1. Overview of retirement benefit plans
The Company and its consolidated subsidiaries provide the following defined benefit plans: a contract-type corporate pension
plan and a lump-sum retirement benefit plan.
Some of the consolidated subsidiaries participate in the Small and Medium Enterprises’ Retirement Allowance Mutual Aid
System. The simplified method is applied by some of the consolidated subsidiaries to calculate the retirement benefit liability
and retirement benefit expenses.
In addition, some of the consolidated subsidiaries provide the corporate defined contribution pension plan.
2. Defined benefit plans
(1)
Reconciliation of beginning and ending balances of retirement benefit obligations
Fiscal year ended
March 31, 2021
(Thousands of U.S.
Dollars)
255,166
12,241
1,978
(1,155)
(8,991)
(6,403)
Fiscal year ended
March 31, 2020
(Millions of Yen)
Fiscal year ended
March 31, 2021
(Millions of Yen)
Beginning balance of retirement benefit obligation
Service cost
Interest cost
Actuarial (gain) loss
Benefits paid
Past service cost
Increase (decrease) resulting from effect of
business combination
Other
28,175
1,372
221
(94)
(1,424)
－
28,249
1,355
218
(127)
(995)
(708)
－
38
－
(8)
(75)
Ending balance of retirement benefit obligation
28,249
28,021
253,108
347
(Note) Retirement benefit obligations under the plans for which the simplified method is applied are not included in the table
above. The breakdown of other is the effect of foreign currency translation.
–37–
(2)
Reconciliation of beginning and ending balances of plan assets
Fiscal year ended
March 31, 2020
(Millions of Yen)
Fiscal year ended
March 31, 2021
(Millions of Yen)
Beginning balance of plan assets
Expected return on plan assets
Actuarial gain (loss)
Employer contributions
Benefits paid
8,054
80
(258)
355
(324)
7,907
79
597
344
(219)
Fiscal year ended
March 31, 2021
(Thousands of U.S.
Dollars)
71,428
714
5,397
3,115
(1,986)
Ending balance of plan assets
7,907
8,709
78,668
(Note) Plan assets of ¥715 million ($6,467 thousand) for the fiscal year ended March 31, 2021 (¥754 million for the fiscal year
ended March 31, 2020) under the plans for which the simplified method is applied are not included in the table above.
(3)
Reconciliation of beginning and ending balances of net defined benefit liability for plans for which the simplified method
is applied
Fiscal year ended
March 31, 2020
(Millions of Yen)
Fiscal year ended
March 31, 2021
(Millions of Yen)
Beginning balance of retirement benefit liability
Retirement benefit expenses
Benefits paid
1,939
330
(154)
2,068
192
(117)
Fiscal year ended
March 31, 2021
(Thousands of U.S.
Dollars)
18,683
1,741
(1,065)
Contribution to the plans
Increase (decrease) resulting from a change in
scope of consolidation
Increase (decrease) resulting from effect of
merger
Increase (decrease) resulting from effect of
business combination
Other
(47)
(43)
(391)
－
(44)
(399)
－
122
1,102
－
94
853
－
2
19
2,068
2,274
20,543
Ending balance of retirement benefit liability
(Note) The breakdown of other is the effect of foreign currency translation.
(4)
Reconciliation of ending balances of retirement benefit obligations and plan assets, retirement benefit liability and
retirement benefit asset reported on the consolidated balance sheet
As of March 31, 2020
(Millions of Yen)
Funded retirement benefit obligation
Plan assets
As of March 31, 2021
(Millions of Yen)
As of March 31, 2021
(Thousands of U.S.
Dollars)
71,372
(85,135)
8,335
(8,661)
7,901
(9,425)
(326)
(1,523)
(13,763)
Unfunded retirement benefit obligation
Net asset or liability reported on the
consolidated balance sheet
Retirement benefit liability
22,736
23,110
208,746
22,410
21,586
194,983
23,254
23,110
208,747
Retirement benefit asset
Net asset or liability reported on the
consolidated balance sheet
(844)
(1,523)
(13,762)
22,410
21,586
194,985
Subtotal
(Note) Retirement benefit obligation and plan assets under the plans for which the simplified method is applied are included in
the reconciliation above.
–38–
(5)
Components of retirement benefit expenses
Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial (gain) loss
Amortization of past service cost
Retirement benefit expenses calculated by the
simplified method
Retirement benefit expenses related to defined
benefit plans
Fiscal year ended
March 31, 2021
(Thousands of U.S.
Dollars)
12,241
1,978
(714)
Fiscal year ended
March 31, 2020
(Millions of Yen)
Fiscal year ended
March 31, 2021
(Millions of Yen)
1,372
221
(80)
1,355
218
(79)
55
(21)
48
(170)
436
(1,538)
330
192
1,741
1,877
1,565
14,144
(Note) Other than the retirement benefit expenses above, the Company paid ¥238 million and ¥207 million ($1,872 thousand)
of early retirement expenses for the fiscal years ended March 31, 2020 and 2021, respectively, which are included in
extraordinary losses.
(6)
Remeasurements of defined benefit plans in other comprehensive income (before tax effect)
Fiscal year ended
March 31, 2020
(Millions of Yen)
Fiscal year ended
March 31, 2021
(Millions of Yen)
Fiscal year ended
March 31, 2021
(Thousands of U.S.
Dollars)
6,987
Actuarial (gain) loss
(108)
773
Past service cost
(21)
538
4,864
Total
(129)
1,312
11,851
(7)
Remeasurements of defined benefit plans in accumulated other comprehensive income (before tax effect)
As of March 31, 2020
(Millions of Yen)
As of March 31, 2021
(Millions of Yen)
As of March 31, 2021
(Thousands of U.S.
Dollars)
Unrecognized actuarial (gain) loss
(232)
(1,005)
(9,083)
Unrecognized past service cost
(468)
(1,007)
(9,100)
(701)
(2,013)
(18,183)
Total
(8)
Plan assets
1) Allocation of plan assets
Plan assets by major category as a percentage of total plan assets are as follows:
As of March 31, 2020
General account
Debt securities
Equity securities
Other
As of March 31, 2021
35%
36
16
13
100
Total
33%
36
22
9
100
(Note) Plan assets under the plans for which the simplified method is applied are not included in the table above.
2) Determination procedure of long-term expected rate of return on plan assets
In determining the long-term expected rate of return on plan assets, the Company considers the current and projected asset
allocations as well as current and future expected long-term rate of returns from various assets that constitute the plan assets.
–39–
(9)
Assumptions used in actuarial calculations
Major assumptions used in actuarial calculations
Fiscal year ended
March 31, 2020
0.1% - 1.06%
1.0%
Discount rate
Long-term expected rate of return on plan assets
Fiscal year ended
March 31, 2021
0.1% - 1.06%
1.0%
3. Defined contribution plan
The amounts required to contribute to defined contribution plans of the consolidated subsidiaries for the fiscal years ended
March 31, 2020 and 2021 were ¥145 million and ¥150 million ($1,355 thousand), respectively.
(Income Taxes)
1. Significant components of deferred tax assets and deferred tax liabilities
As of March 31, 2020
(Millions of Yen)
Deferred tax assets:
Provision for bonuses
Accrued enterprise tax
Tax loss carryforwards (Note)
Tax credit carryforwards
Loss on valuation of inventories
Retirement benefit liability
Unrealized gains and losses on non-current
assets and investment securities
Adjustments on non-current assets
Loss on valuation of investment securities
Impairment loss
Adjustment of book value of investments
Valuation difference associated with business
combinations
Other
Subtotal
Valuation allowance for tax loss carryforwards
(Note)
Valuation allowance for total of deductible
temporary differences and others
Less valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Valuation difference on available-for-sale
securities
Retained earnings of subsidiaries and
associates
Valuation difference on non-current assets for
consolidated tax return
Valuation difference associated with business
combinations
Trademark right
Customer-related assets
Other
Total deferred tax liabilities
Net deferred tax assets
–40–
As of March 31, 2021
(Millions of Yen)
As of March 31, 2021
(Thousands of U.S.
Dollars)
1,634
714
3,626
753
689
7,202
1,728
550
4,244
183
812
7,182
15,616
4,970
38,336
1,659
7,339
64,877
283
282
2,556
643
1,024
1,357
2,313
586
891
1,292
2,313
5,300
8,053
11,676
20,899
2,763
2,070
18,704
2,858
25,865
3,179
25,319
28,718
228,703
(3,190)
(3,062)
(27,664)
(7,285)
(6,132)
(55,397)
(10,475)
15,390
(9,195)
16,124
(83,061)
145,642
(1,412)
(1,651)
(14,913)
(3,375)
(3,449)
(31,154)
(772)
(800)
(7,228)
－
(1,706)
(15,412)
(784)
－
(2,188)
(8,533)
6,856
(3,401)
(648)
(2,436)
(14,092)
2,031
(30,728)
(5,854)
(22,004)
(127,293)
18,349
(Note) Amounts of tax loss carryforwards and associated deferred tax assets by expiration period
For the fiscal year ended March 31, 2020
(Millions of Yen)
Due within
one year
Between
one to two
years
Between
Between
Between
two to three three to four four to five
years
years
years
More than
five years
Total
Tax loss carryforwards (a)
380
512
378
1,322
309
723
3,626
Valuation allowance
(373)
(504)
(313)
(1,301)
(309)
(386)
(3,190)
Deferred tax assets
7
7
64
20
–
336
436
(a) The amounts of tax loss carryforwards are calculated by multiplying the statutory tax rate.
For the fiscal year ended March 31, 2021
(Millions of Yen)
Due within
one year
Between
one to two
years
Between
Between
Between
two to three three to four four to five
years
years
years
Tax loss carryforwards (b)
576
388
1,310
434
Valuation allowance
(557)
(338)
(1,295)
Deferred tax assets
19
50
14
More than
five years
Total
129
1,403
4,244
(434)
(129)
(307)
(3,062)
－
－
1,096
1,181
(b) The amounts of tax loss carryforwards are calculated by multiplying the statutory tax rate.
(Thousands of U.S. Dollars)
Due within
one year
Between
one to two
years
Between
Between
Between
two to three three to four four to five
years
years
years
Tax loss carryforwards (b)
5,210
3,513
11,833
3,926
1,173
12,681
38,336
Valuation allowance
(5,035)
(3,056)
(11,698)
(3,926)
(1,173)
(2,776)
(27,664)
Deferred tax assets
175
457
135
0
0
9,905
10,672
More than
five years
Total
(b) The amounts of tax loss carryforwards are calculated by multiplying the statutory tax rate.
2. Difference between the statutory tax rate and the Company’s effective income tax rate
Fiscal year ended
March 31, 2020
Statutory tax rate
30.5%
(Reconciliation)
Per capita levy of inhabitants tax
0.3
Permanently non-deductible and non-taxable items
1.1
Change in valuation allowances
4.5
Amortization of goodwill
2.6
Deferred tax liabilities on retained earnings of subsidiaries and associates
0.6
Refund of income taxes for prior periods
(1.1)
Other
0.1
Effective income tax rate
38.6
–41–
Fiscal year ended
March 31, 2021
30.5%
0.3
0.3
1.4
3.3
0.2
－
(0.8)
35.2
(Business Combinations)
(Business Combination through Acquisition)
1. Özen Kişisel Bakım Ürünleri Üretim A.Ş.
At the Board of Directors Meeting held on February 27, 2020, the Company resolved to acquire all shares of Özen Kişisel Bakım
Ürünleri Üretim A.Ş. (hereinafter referred to as “Özen”), a hygiene products manufacturer owned by Yıldız Holding A.Ş.
(hereinafter referred to as “Yıldız”), which is a major food and consumer goods conglomerate in the Republic of Turkey (hereinafter
referred to as “Turkey”). The Company completed the acquisition on May 29, 2020.
(1) Overview of the business combination
1) Name and business details of the acquired company
Name of the acquired company: Özen Kişisel Bakım Ürünleri Üretim A.Ş.
Business details:
Production and sales of disposable diapers, wet wipes, liquid soaps, etc.
2) Main reasons for the business combination
Özen has a factory situated in an excellent location close to Istanbul and currently produces and sells products in three
product categories: baby diapers, wet wipes and liquid soaps, which are expected to have synergistic effects with the
Company’s Home & Personal Care (hereinafter referred to as the “H&PC”) business. Since Özen, which entered the baby
diaper business in 2007, had ESSITY, a major global manufacturer of hygiene products, as its equity participant from
2011 to 2019, we assess that Özen’s technical capabilities in manufacturing baby diapers is high.
Under this situation, as the Company intends to promote business expansion by establishing a factory in Turkey, it
evaluated the efficacy of constructing its own factory versus a corporate acquisition. As a result of its deliberation, it has
concluded that the acquisition of Özen from Yıldız is the most effective option for the Company.
3) Date of the business combination
May 29, 2020 (share acquisition date)
March 31, 2020 (deemed acquisition date)
4) Legal form of the business combination
The transaction was a share acquisition in consideration for cash.
5) Company name after the business combination
Elleair International Turkey Kişisel Bakım Ürünleri Üretim A.Ş.
6) Ratio of voting rights acquired
Ratio of voting rights before the acquisition:
0.0%
Ratio of voting rights after the acquisition:
100.0%
7) Grounds for determining the acquiring company
The Company acquired shares of Özen Kişisel Bakım Ürünleri Üretim A.Ş. in consideration for cash.
(2) Period of operating results of the acquired company or business which is included in the consolidated financial statements
From April 1, 2020 to December 31, 2020
(3) Acquisition cost and breakdown by type of consideration
Consideration for acquisition
Consideration for the share acquisition in cash
Acquisition cost
¥172 million ($1,561 thousand)
¥172 million ($1,561 thousand)
In conjunction with the acquisition of all shares of Özen on May 29, 2020, the Company paid ¥2,198 million ($19,860
thousand) to Yıldız for performing Özen’s obligation against Yıldız through a third-party performance with the consent of
Özen, in addition to the above-mentioned consideration for the share acquisition in cash. As a result, Özen bears the obligation
of ¥2,198 million ($19,860 thousand) against the Company. The said obligation was converted to equity capital of the
acquired company in July 2020 through a debt-equity swap.
–42–
(4) Major components and amounts of acquisition related costs
Advisory fee, etc.: ¥187 million ($1,695 thousand)
(5) Amount of goodwill, reason for recognition, and method and period of amortization
1) Amount of goodwill
¥1,700 million ($15,362 thousand)
2) Reason for recognition
The goodwill arose from reasonable estimates of excess earning power expected to be generated from business
developments going forward.
3) Method and period of amortization
The goodwill is to be amortized using the straight-line method over 20 years.
(6) Amounts of assets received and liabilities assumed on the date of the business combination and their breakdown
(Millions of Yen)
(Thousands of U.S. Dollars)
Current assets
976
8,817
Non-current assets
468
4,232
Total assets
1,444
13,049
Current liabilities
2,903
26,222
59
540
2,962
26,762
Non-current liabilities
Total liabilities
(7) Estimated amount of impact on the consolidated statement of income for the fiscal year ended March 31, 2021 and calculation
method assuming that the business combination had been completed at the beginning of the fiscal year
(Millions of Yen)
(Thousands of U.S. Dollars)
533
4,815
Operating profit
5
51
Ordinary losses
(82)
(746)
Loss attributable to owners of parent
(82)
(745)
Net sales
(Calculation method of the estimated amount)
The estimated amount of impact indicates the difference between:
- net sales and profit and loss information calculated assuming that the business combination had been completed at the
beginning of the fiscal year, and
- net sales and profit and loss information as stated in the consolidated statement of income of the acquiring company.
In addition, the amortization was adjusted and calculated assuming that the goodwill, etc. recognized at the time of business
combination had arisen at the beginning of the fiscal year ended March 31, 2021.
Please note that this note is not subject to audit.
–43–
2. Santher – Fábrica de Papel Santa Therezinha S.A.
At the Board of Directors Meeting held on February 27, 2020, the Company resolved to jointly acquire indirectly all shares
(hereinafter referred to as the “Transaction”) of Santher – Fábrica de Papel Santa Therezinha S.A. (hereinafter referred to as
“Santher”) based in the Federative Republic of Brazil (hereinafter referred to as “Brazil”) with Marubeni Corporation (hereinafter
referred to as “Marubeni”). The Company and Marubeni completed the Transaction on June 29, 2020. A joint investment company
established in Brazil called H&PC BRAZIL PARTICIPAÇÕES S.A. (hereinafter referred to as the “Subsidiary Company”), in
which the Company and Marubeni hold 51.0% and 49.0% stake, respectively, directly acquired 100% of Santher shares.
(1) Overview of the business combination
1) Name and business details of the acquired company
Name of the acquired company:
Santher – Fábrica de Papel Santa Therezinha S.A.
Business details:
Production and sales of H&PC products such as household paper, disposable
diapers, etc. and specialty paper
2) Main reasons for the business combination
Santher has been engaged in production and sales of personal care products such as household paper, disposable baby
diapers and sanitary napkins in Brazil for over 80 years since its foundation. Brand awareness of the company’s products
is notably high throughout Brazil. Particularly, it has established a solid leading position in the H&PC market with the
“Personal” brand, which is highly valued by local consumers. Santher holds a strong position as a market leader in the
Brazilian household paper market, and out of the local companies, holds the largest share of disposable diapers and sanitary
napkins.
The Brazilian H&PC market is the fourth largest market in the world, with household paper products and disposable
diapers marking an annual growth rate of 5.6 percent and 5.4 percent, respectively, over the last five years, and continued
growth of the market is expected moving forward, given that penetration rates of such products would increase driven by
population growth, economic development and higher living standards. Since it should take significant number of years to
gain market share and to generate profit organically through a greenfield investment, the Company and Marubeni believe
a friendly takeover of a promising local company will be an effective measure, therefore they came to the decision to
acquire Santher.
3) Date of the business combination
June 29, 2020 (share acquisition date)
March 31, 2020 (deemed acquisition date)
4) Legal form of the business combination
The transaction was a share acquisition in consideration for cash.
5) Company name after the business combination
The name has not been changed.
6) Ratio of voting rights acquired
Ratio of voting rights before the acquisition:
0.0%
Ratio of voting rights after the acquisition:
51.0% (of which indirectly owns 51.0%)
7) Grounds for determining the acquiring company
The Subsidiary Company acquired shares of Santher – Fábrica de Papel Santa Therezinha S.A. in consideration for cash.
(2) Period of operating results of the acquired company or business which is included in the consolidated financial statements
From April 1, 2020 to December 31, 2020
(3) Acquisition cost and breakdown by type of consideration
Consideration for acquisition
Consideration for the share acquisition in cash
Acquisition cost
¥51,690 million ($466,901 thousand)
¥51,690 million ($466,901 thousand)
–44–
(4) Major components and amounts of acquisition related costs
Advisory fee, etc.: ¥1,098 million ($9,918 thousand)
(5) Amount of goodwill, reason for recognition, and method and period of amortization
1) Amount of goodwill
¥20,502 million ($185,194 thousand)
2) Reason for recognition
The goodwill arose from reasonable estimates of excess earning power expected to be generated from business
developments going forward.
3) Method and period of amortization
The goodwill is to be amortized using the straight-line method over 20 years.
(6) Amounts of assets received and liabilities assumed on the date of the business combination and their breakdown
(Millions of Yen)
(Thousands of U.S. Dollars)
Current assets
10,720
96,829
Non-current assets
31,687
286,216
Total assets
42,407
383,045
Current liabilities
11,042
99,738
Non-current liabilities
19,876
179,532
Total liabilities
30,918
279,270
(7) Amounts allocated to intangible assets other than goodwill, breakdown by major asset type and the weighted average
amortization period
Asset type
Amount
Weighted average amortization period
Trademark right
¥8,955 million ($80,887 thousand)
20 years
Customer-related assets
¥2,131 million ($19,248 thousand)
13 years
(8) Estimated amount of impact on the consolidated statement of income for the fiscal year ended March 31, 2021 and calculation
method assuming that the business combination had been completed at the beginning of the fiscal year
(Millions of Yen)
(Thousands of U.S. Dollars)
Net sales
8,376
75,660
Operating profit
633
5,725
Ordinary losses
(332)
(3,007)
Loss attributable to owners of parent
(276)
(2,494)
(Calculation method of the estimated amount)
The estimated amount of impact indicates the difference between:
- net sales and profit and loss information calculated assuming that the business combination had been completed at the
beginning of the fiscal year, and
- net sales and profit and loss information as stated in the consolidated statement of income of the acquiring company.
In addition, the amortization was adjusted and calculated assuming that the goodwill, etc. recognized at the time of business
combination had arisen at the beginning of the fiscal year ended March 31, 2021.
Please note that this note is not subject to audit.
–45–
(Segment Information, etc.)
[Segment Information]
1. Overview of reportable segments
The Company is organized into business units or sales divisions by product line. Each business unit or sales division is
responsible for the formulation of a comprehensive strategy for the products it carries and the relevant business activities.
The Company consists of two reportable segments, namely the Paper and Paperboard business segment and the Home and
Personal Care business segment, each of which comprises businesses of product lines that are similar in terms of the
manufacture and distribution system and types of market or customers.
Each reportable segment of the Company is a unit for which operating results are evaluated regularly at the budget meeting,
where decisions regarding the Company’s financial performance are made, and for which separate financial information is
available.
The products manufactured and distributed by the Paper and Paperboard business segment include newsprints, printing
papers, packaging papers, paperboards, corrugated containers and pulps. The products manufactured and distributed by the
Home and Personal Care business segment include sanitary goods, disposable diapers, napkins and wet wipes.
2. Calculation method of net sales, income, assets and other items by reportable segment
The accounting method for the reportable segments is the same as those described in “Summary of Significant Accounting and
Reporting Policies.”
Segment income is based on operating income.
Intersegment sales or transfers are based on the price determined upon consultation between the parties involved.
3. Net sales, income, assets and other items by reportable segment
For the fiscal year ended March 31, 2020
(Millions of Yen)
Reportable Segment
Net Sales
Sales to external
customers
Intersegment sales and
transfers
Total sales
Segment income (loss)
Segment assets
Other items:
Depreciation and
amortization
Increase in property,
plant and equipment
and intangible assets
Other
(Note 1)
Adjustments Consolidated
(Note 2)
(Note 3)
Paper and
Paperboard
Home and
Personal
Care
317,825
204,731
522,557
23,876
546,433
－
546,433
18,924
3,447
22,371
65,974
88,346
(88,346)
－
336,749
19,935
440,336
208,179
7,964
246,274
544,929
27,899
686,610
89,850
2,687
63,866
634,780
30,586
750,477
(88,346)
41
12,582
546,433
30,628
763,059
19,805
10,900
30,706
1,136
31,843
－
31,843
43,270
12,736
56,006
5,927
61,933
－
61,933
Total
Total
(Notes) 1. The “Other” category consists of the business segments that are not included in the reportable segments, and includes
woodchip, forestry, machinery, logistics, electric power selling, golf club and real estate leasing businesses.
2. Adjustments are as follows:
(1) The amount of adjustments for segment income is the adjustment for elimination of intersegment transactions.
(2) The amount of adjustments for segment assets is the adjustment for elimination of intersegment transactions of
¥(13,279) million and corporate assets, consisting primarily of investment securities, not attributable to any
reportable segment of ¥25,862 million.
3. Segment income is calculated by adjusting operating income presented in the consolidated statement of income.
–46–
For the fiscal year ended March 31, 2021
(Millions of Yen)
Reportable Segment
Net Sales
Sales to external
customers
Intersegment sales and
transfers
Total sales
Segment income (loss)
Segment assets
Other items:
Depreciation and
amortization
Increase in property,
plant and equipment
and intangible assets
Other
(Note 1)
Adjustments Consolidated
(Note 2)
(Note 3)
Paper and
Paperboard
Home and
Personal
Care
302,453
237,990
540,444
22,484
562,928
－
562,928
17,029
3,463
20,492
66,031
86,524
(86,524)
－
319,482
19,576
437,724
241,454
14,734
332,093
560,936
34,311
769,817
88,516
2,520
67,888
649,452
36,831
837,706
(86,524)
42
12,094
562,928
36,873
849,801
20,270
11,505
31,775
2,361
34,137
－
34,137
27,066
22,074
49,140
4,270
53,411
－
53,411
Total
Total
(Thousands of U.S. Dollars)
Reportable Segment
Net Sales
Sales to external
customers
Intersegment sales and
transfers
Total sales
Segment income (loss)
Segment assets
Other items:
Depreciation and
amortization
Increase in property,
plant and equipment
and intangible assets
Total
Other
(Note 1)
Total
2,149,679
4,881,620
203,092
5,084,712
－
5,084,712
153,818
31,281
185,099
596,438
781,537
(781,537)
－
2,885,759
176,831
3,953,792
2,180,960
133,088
2,999,671
5,066,719
309,919
6,953,463
799,530
22,766
613,212
5,866,249
332,685
7,566,675
(781,537)
382
109,246
5,084,712
333,067
7,675,921
183,098
103,922
287,020
21,328
308,348
－
308,348
244,477
199,389
443,866
38,574
482,440
－
482,440
Paper and
Paperboard
Home and
Personal
Care
2,731,941
Adjustments Consolidated
(Note 2)
(Note 3)
(Notes) 1. The “Other” category consists of the business segments that are not included in the reportable segments, and includes
woodchip, forestry, machinery, logistics, electric power selling, golf club and real estate leasing businesses.
2. Adjustments are as follows:
(1) The amount of adjustments for segment income is the adjustment for elimination of intersegment transactions.
(2) The amount of adjustments for segment assets is the adjustment for elimination of intersegment transactions of
¥(13,642) million ($(123,231) thousand) and corporate assets, consisting primarily of investment securities, not
attributable to any reportable segment of ¥25,737 million ($232,477 thousand).
3. Segment income is calculated by adjusting operating income presented in the consolidated statement of income.
[Related Information]
For the fiscal year ended March 31, 2020
1. Information by product and service
This information is omitted because a similar description has been disclosed in segment information.
2. Information by geographical area
(1) Net sales
This information is omitted because the Group’s sales in Japan exceed 90% of net sales presented in the consolidated
statement of income.
–47–
(2) Property, plant and equipment
(Millions of Yen)
Japan
East Asia
324,657
15,398
Southeast Asia
South America
7,600
Middle East,
Russia and other
14,038
428
Total
362,123
* Middle East, Russia and other include Europe, North America and Africa.
3. Information by major customer
This information is omitted because none of the external customers singularly account for 10% or more of net sales presented
in the consolidated statement of income.
For the fiscal year ended March 31, 2021
1. Information by product and service
This information is omitted because a similar description has been disclosed in segment information.
2. Information by geographical area
(1) Net sales
(Millions of Yen)
Japan
East Asia
476,211
Japan
48,885
East Asia
4,301,430
441,566
Southeast Asia
South America
9,589
Southeast Asia
25,497
South America
86,621
230,311
Middle East,
Russia and other
2,743
Total
562,928
(Thousands of U.S. Dollars)
Middle East,
Total
Russia and other
24,784
5,084,712
* Middle East, Russia and other include Europe, North America and Africa.
(2) Property, plant and equipment
(Millions of Yen)
Japan
East Asia
336,244
Japan
18,796
East Asia
3,037,166
169,780
Southeast Asia
South America
5,507
Southeast Asia
28,362
South America
49,749
256,189
Middle East,
Russia and other
2,683
Total
391,594
(Thousands of U.S. Dollars)
Middle East,
Total
Russia and other
24,240
3,537,124
* Middle East, Russia and other include Europe, North America and Africa.
3. Information by major customer
This information is omitted because none of the external customers singularly account for 10% or more of net sales presented
in the consolidated statement of income.
–48–
[Impairment Loss of Non-current Assets by Reportable Segment]
For the fiscal year ended March 31, 2020
(Millions of Yen)
Impairment loss
Paper and
Paperboard
Home and
Personal Care
1,741
0
Paper and
Paperboard
Home and
Personal Care
1,556
1,019
Paper and
Paperboard
Home and
Personal Care
14,058
9,208
Corporate &
elimination
Other
－
Total
－
1,742
For the fiscal year ended March 31, 2021
(Millions of Yen)
Impairment loss
Impairment loss
Corporate &
elimination
Other
－
Total
－
2,575
(Thousands of U.S. Dollars)
Corporate &
Total
elimination
Other
－
－
Corporate &
elimination
23,266
[Amortization and Unamortized Balance of Goodwill by Reportable Segment]
For the fiscal year ended March 31, 2020
(Millions of Yen)
Paper and
Paperboard
Home and
Personal Care
Other (Note)
Amortization of goodwill
1,122
1,999
511
–
3,632
Unamortized balance
12,116
22,168
6,160
–
40,445
(Note)
Total
The amount of “Other” includes amortization and unamortized balance associated with the woodchip, forestry, machinery,
and logistics businesses.
The following are amortization and unamortized balances of negative goodwill arising from the business combinations that
occurred before April 1, 2010.
(Millions of Yen)
Paper and
Paperboard
Home and
Personal Care
Other (Note)
Corporate &
elimination
Amortization of negative
goodwill
10
0
62
－
73
Unamortized balance
67
0
436
－
503
(Note)
Total
The amount of “Other” includes amortization and unamortized balance associated with the woodchip and forestry
businesses.
For the fiscal year ended March 31, 2021
(Millions of Yen)
Paper and
Paperboard
Home and
Personal Care
Other (Note)
Corporate &
elimination
Amortization of goodwill
1,122
2,784
539
－
4,445
Unamortized balance
9,850
40,325
6,106
－
56,281
Paper and
Paperboard
Home and
Personal Care
Other (Note)
Amortization of goodwill
10,137
25,151
4,869
－
40,157
Unamortized balance
88,975
364,241
55,153
－
508,369
–49–
Total
(Thousands of U.S. Dollars)
Corporate &
Total
elimination
(Note)
The amount of “Other” includes amortization and unamortized balance associated with the woodchip, forestry, machinery,
and logistics businesses.
The following are amortization and unamortized balances of negative goodwill that arose in the business combinations that occurred
before April 1, 2010.
(Millions of Yen)
Paper and
Paperboard
Home and
Personal Care
Other (Note)
Corporate &
elimination
－
63
－
378
Amortization of negative
goodwill
0
0
62
Unamortized balance
4
0
373
Paper and
Paperboard
Home and
Personal Care
Total
(Thousands of U.S. Dollars)
Corporate &
Total
elimination
Other
(Note)
Amortization of negative
goodwill
8
0
563
－
571
Unamortized balance
43
3
3,376
－
3,422
(Note)
The amount of “Other” includes amortization and unamortized balance associated with the woodchip and forestry
businesses.
–50–
[Negative Goodwill (Gain on Bargain Purchase) by Reportable Segment]
The Company did not recognize any gain on bargain purchase for the fiscal years ended March 31, 2020 and 2021.
[Related Party Information]
1. Related party transactions
(1) Transactions between the filing company of the consolidated financial statements (hereinafter referred to as the “filing
company”) and its related parties
(a) The filing company’s unconsolidated subsidiaries and associates, etc.
For the fiscal year ended March 31, 2020
Not applicable.
For the fiscal year ended March 31, 2021
(Millions of Yen)
Name of company
or individual
Location
Share
Business
capital or details or
investment occupation
Tokyo Pulp &
Associate
Paper Corporation
Chuo-ku,
Tokyo
Purchase and
sales of
50 paper and
paperboard
products
Type
Ratio of voting
rights holding Relationship with Summary of Transaction
(held) (%)
the related party transaction
amount
(Note 1)
Holding
Sales of paper and Sales of
Direct: 12.0
paperboard
paper and
Indirect: 9.5
products, etc.
paperboard
(Held)
Interlocking
products
Direct: 0.4
directorates
(Note 2)
Balance
Account at end of
period
Accounts
33,147 receivable
- trade
13,455
(Thousands of U.S. Dollars)
Name of company
or individual
Location
Share
Business
capital or details or
investment occupation
Tokyo Pulp &
Associate
Paper Corporation
Chuo-ku,
Tokyo
Purchase and
sales of
451 paper and
paperboard
products
Type
Ratio of voting
rights holding Relationship with Summary of Transaction
(held) (%)
the related party transaction
amount
(Note 1)
Holding
Sales of paper and Sales of
Direct: 12.0
paperboard
paper and
Indirect: 9.5
products, etc.
paperboard
(Held)
Interlocking
products
Direct: 0.4
directorates
(Note 2)
Balance
Account at end of
period
Accounts
299,411 receivable 121,534
- trade
(Notes) 1. The ratio of voting rights indirectly holding is the ratio of voting rights held by unconsolidated subsidiaries.
2. Sales of products are based on prices determined in consultation between the parties.
3. The transaction amount does not include consumption taxes.
(2) Transactions between the filing company’s consolidated subsidiaries and related parties
Not applicable.
2. Notes on parent company or significant associates
Not applicable.
–51–
(Per Share Information)
Fiscal year ended
March 31, 2020
(Yen)
1,319.57
Fiscal year ended
March 31, 2021
(Yen)
1,440.33
Fiscal year ended
March 31, 2021
(U.S. Dollars)
13.00
Basic earnings per share
127.91
138.73
1.25
Diluted earnings per share
115.18
133.25
1.20
Net assets per share
(Notes) 1. Treasury shares remaining in the Board Benefit Trust (BBT) and Employee Shareholding Association Trust
(Shareholding Trust) recorded as treasury shares under shareholders’ equity are included in treasury shares that are
deducted in the calculation of the average number of shares outstanding during the period for the determination of basic
earnings per share, and are included in treasury shares that are deducted from the total number of shares issued at the
end of the period for the determination of net assets per share. The average numbers during the period of such treasury
shares deducted for the determination of basic earnings per share for the fiscal years ended March 31, 2020 and 2021
were 139 thousand shares and 312 thousand shares, respectively. Meanwhile, the numbers at the end of the period of
such treasury shares deducted for the determination of net assets per share for the fiscal years ended March 31, 2020
and 2021 were 302 thousand shares and 1,534 thousand shares, respectively.
2. Basic and diluted earnings per share are calculated based on the following:
Fiscal year ended
Fiscal year ended
Fiscal year ended
March 31, 2020
March 31, 2021
March 31, 2021
(Millions of Yen,
(Millions of Yen,
(Thousands of U.S. Dollars,
unless otherwise stated)
unless otherwise stated)
unless otherwise stated)
Basic earnings per share
Profit attributable to owners of
parent
Amount not attributable to common
shareholders of parent
Profit attributable to common
shareholders of parent
Average number of common shares
outstanding during the period
(thousands of shares)
19,199
22,115
199,763
–
－
19,199
22,115
199,763
150,093
159,415
159,415
(16)
(6)
(61)
[(16)]
[(6)]
[(61)]
16,449
6,508
6,508
[16,449]
[6,508]
[6,508]
–
－
－
Diluted earnings per share
Adjustment to profit attributable to
owners of parent
[Interest expenses (after
deducting the amount equivalent
to taxes)]
Increase in the number of common
shares (thousands of shares)
[Convertible bond-type bonds
with share acquisition rights
(thousands of shares)]
Summary of potentially dilutive shares
that were not included in the
calculation of diluted earnings per
share since there was no dilutive effect
–52–
5) Supplementary Schedules
[Schedule of Bonds]
(Millions of Yen)
Company
Name
Tokyo Pulp
& Paper
Corporation
Euro Yen
Zero Coupon
Convertible
Bonds due
2020
Unsecured
Straight Bond
No. 18
Unsecured
Straight Bond
No. 19
Unsecured
Straight Bond
No. 20
Unsecured
Straight Bond
No. 21
Unsecured
Straight Bond
No. 22
Unsecured
Bond
No. 2
Total
–
Daio Paper
Corporation
Daio Paper
Corporation
Daio Paper
Corporation
Daio Paper
Corporation
Daio Paper
Corporation
Daio Paper
Corporation
Company
Name
Tokyo Pulp
& Paper
Corporation
Euro Yen
Zero Coupon
Convertible
Bonds due
2020
Unsecured
Straight Bond
No. 18
Unsecured
Straight Bond
No. 19
Unsecured
Straight Bond
No. 20
Unsecured
Straight Bond
No. 21
Unsecured
Straight Bond
No. 22
Unsecured
Bond
No. 2
Total
–
Daio Paper
Corporation
Daio Paper
Corporation
Daio Paper
Corporation
Daio Paper
Corporation
Daio Paper
Corporation
Daio Paper
Corporation
Date of issue
Beginning
Ending
Interest
balance
balance
rate Collateral
(Millions of Yen) (Millions of Yen) (%)
Maturity
September 17, 2015
22,540
[22,540]
–
–
None
September 17, 2020
March 22, 2017
15,000
15,000
[15,000]
0.42
None
March 22, 2022
December 14, 2017
15,000
15,000
0.42
None
December 14, 2022
December 14, 2017
10,000
10,000
0.60
None
December 13, 2024
October 25, 2018
15,000
15,000
0.61
None
October 24, 2025
October 25, 2018
5,000
5,000
0.86
None
October 25, 2028
March 27, 2017
300
–
0.49
None
March 27, 2022
–
82,840
[22,540]
60,000
[15,000]
–
–
–
Date of issue
Beginning
balance
(Thousands of
U.S. Dollars)
(Thousands of U.S. Dollars)
Ending
Interest
balance
rate Collateral
Maturity
(Thousands of
(%)
U.S. Dollars)
September 17, 2015
203,601
[203,601]
–
–
None
September 17, 2020
March 22, 2017
135,489
135,489
[135,489]
0.42
None
March 22, 2022
December 14, 2017
135,489
135,489
0.42
None
December 14, 2022
December 14, 2017
90,326
90,326
0.60
None
December 13, 2024
October 25, 2018
135,489
135,489
0.61
None
October 24, 2025
October 25, 2018
45,163
45,163
0.86
None
October 25, 2028
March 27, 2017
2,709
–
0.49
None
March 27, 2022
–
748,266
[203,601]
541,956
[135,489]
–
–
–
–53–
(Notes) 1. The figures in square brackets in beginning and ending balances indicate the amounts of current portion of bonds
payable included in the total balance.
2. There was no ending balance for Tokyo Pulp & Paper Corporation as it changed from a consolidated subsidiary to an
associate accounted for using the equity method during the fiscal year ended March 31, 2021.
3. Details of the convertible bonds are presented as follows.
Name of bonds:
Euro Yen Zero Coupon Convertible Bonds due 2020
Stock to be issued:
Common stock
Issue price of stock acquisition rights:
Free of charge (gratis issue)
Issue price of stock:
¥1,441.2 ($13.01)
Total issue amount:
¥30,150 million ($272,333 thousand)
Total issue amount of stock issued upon exercise of
stock acquisition rights:
¥28,354 million ($256,113 thousand)
Percentage of stock acquisition rights granted:
100.0%
Exercise period of stock acquisition rights:
From October 1, 2015 to September 3, 2020
(Local time of the place for accepting the exercise request)
(Note)
Upon the exercise of stock acquisition rights, the bonds associated with the stock acquisition rights shall
be subject to capital contribution, with the price for the bonds being the same as their face value.
4. The redemption schedule of bonds payable for five years subsequent to March 31, 2021 is as follows:
(Millions of Yen)
Due within one year
Between one to two
years
15,000
15,000
Due within one year
Between one to two
years
135,489
135,489
Between two to three Between three to four Between four to five
years
years
years
－
10,000
15,000
(Thousands of U.S. Dollars)
Between two to three Between three to four Between four to five
years
years
years
－
–54–
90,326
135,489
[Schedule of Debts]
Category
Beginning
balance
(Millions of
Yen)
Ending
balance
(Millions of
Yen)
15,452
13,744
139,576
124,150
0.52
–
53,724
64,813
485,268
585,433
0.98
–
1,012
1,387
9,143
12,536
－
–
242,100
284,025
2,186,800
2,565,493
0.95
2,243
5,875
20,268
53,068
537
388
4,856
3,506
0.71
–
568
193
5,134
1,749
0.88
Due in 2022
through 2025
315,639
370,428
2,851,045
3,345,935
－
–
Short-term borrowings
Current portion of longterm borrowings
Current portion of lease
obligations
Long-term borrowings
(excluding current portion)
Lease obligations
(excluding current portion)
Beginning
Ending
balance
balance
(Thousands of (Thousands of
U.S. Dollars) U.S. Dollars)
Average
interest rate
(%)
Maturity
Due in 2022
through 2028
Due in 2022
－
through 2026
Other interest-bearing debt
Current portion of longterm accounts payable
– facilities
Long-term accounts
payable – facilities
(excluding current
portion)
Total
(Notes) 1. The average interest rate above represents the weighted-average interest rate for the ending balance of borrowings.
2. The average interest rate of the lease obligations is not presented because the lease obligations are stated in the
consolidated balance sheet at the amount before deducting the amount equivalent to interest expenses that are
included in the total lease payments.
3. The redemption schedule of long-term borrowings, lease obligations and other interest-bearing debt (excluding
current portions) for five years subsequent to March 31, 2021 is as follows:
(Millions of Yen)
Between one to two
years
Long-term
borrowings
Lease obligations
Other interestbearing debt
Between two to three Between three to four Between four to five
years
years
years
65,634
75,629
71,936
38,171
1,963
756
469
327
171
15
5
1
(Thousands of U.S. Dollars)
Between one to two
years
Long-term
borrowings
Lease obligations
Other interestbearing debt
Between two to three Between three to four Between four to five
years
years
years
592,853
683,130
649,778
344,791
17,734
6,836
4,245
2,956
1,545
144
46
14
[Schedule of Asset Retirement Obligations]
The Schedule of Asset Retirement Obligations is not presented, pursuant to Article 92-2 of the Ordinance on Consolidated
Financial Statements, as the beginning and ending balances of asset retirement obligations for the current fiscal year
ended March 31, 2021 were one percent or less of the total beginning and ending balances of liabilities and net assets of
the current fiscal year.
–55–