26
Listed company: Hitachi Chemical Co., Ltd. (Code number: 4217 Stock exchange: Tokyo) (URL http://www.hitachi-chem.co.jp/english/index.html) Representative: Kazuyuki Tanaka Position of the person: President, Chief Executive Officer and Director Person in charge of the reference: Akihiko Takamatsu Date of annual stockholders' meeting : June 19, 2015 Date of the release of asset securities report : June 19, 2015 (Amounts rounded to the nearest million yen) (1) Consolidated Financial Results Million yen % Million yen % Million yen % Million yen % Million yen % Million yen % March, 2015 3.2 March, 2014 - - - - - - Yen Yen % % % March, 2015 March, 2014 Note: Basic earnings per share is calculated based on net income attributable to owners of the parent. (2) Consolidated Financial Position Million yen Million yen Million yen % Yen March, 2015 March, 2014 (3) Consolidated Cash Flows Million yen Million yen Million yen Million yen March, 2015 March, 2014 2. Dividend Yen Yen Yen Yen Yen Million yen % % March, 2014 March, 2015 March, 2016 (Forecast) Million yen % Million yen % Million yen % Million yen % Million yen % First half - - - - - Fiscal year Operating income to revenue 108.47 - 6.8 6.7 5.6 141.49 525,061 34,692 22,867 22,587 488,725 39,463 29,144 29,464 Basic earnings per share Diluted earnings per share Return on equity attributable to owners of the parent Income before income taxes to total assets - 9.9 8.3 7.5 7.4 1. Consolidated Financial Highlights for the Fiscal Year Ended March 31, 2015 (April 1, 2014 through March 31, 2015) (% indicates the rate of +/- compared with the previous fiscal year) June 19, 2015 Consolidated Financial Summary (For the Fiscal Year Ended March 31, 2015 (IFRS basis)) Position of the person: General Manager, Corporate Communication Center Tel: 81-3-5533-7144 Revenue Operating income Income before income taxes Net income Net income attributable to owners of the parent Total comprehensive income 494,724 320,788 314,876 63.6 1,512.06 Reference: Share of profits of investments accounted for using the equity method March, 2015: 3,431 million yen March, 2014: 2,478 million yen Total assets Total equity Equity attributable to owners of the parent Ratio of equity attributable to owners of the parent to total assets Equity attributable to owners of the parent per share 542,535 357,334 348,241 64.2 1,672.33 50,357 (37,099) (2,374) 87,652 Cash flows from Cash flows from Cash flows from Cash and cash operating activities investing activities financing activities equivalents at end of term 34,009 (22,258) (16,874) 88,997 Dividend per Share Total Dividends Paid (Total) Dividends Payout Ratio (Consolidated) Dividends to equity attributable to owners of the parent (Consolidated) 1st Quarter 2nd Quarter 3rd Quarter Year-End Total - 18.00 36.00 7,497 33.2 2.3 - 18.00 - 18.00 36.00 7,497 56,000 17,300 38,500 Revenue Operating income Net income Net income attributable to owners of the parent Basic earnings per share Income before income taxes 184.89 83.08 Yen 570,000 24,000 55,000 17,500 39,000 280,000 8.6 88.2 61.4 70.6 70.5 (21.5) (23.3) 43,538 42,194 29,226 36,569 (20.1) (12.1) 24,500 - Note: The dividend forecasts for the fiscal year ending March 31, 2016 have not been determined. 3. Consolidated Financial Forecast for the Fiscal Year Ending March 31, 2016 (April 1, 2015 through March 31, 2016) (% indicates the rate of +/- compared with the same term of the previous fiscal year) - - - - - 25.4 2.5 - 18.00

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Page 1: June 19, 2015 Consolidated Financial Summary (For the ... · March, 2016 (Forecast) Million yen % Million yen % Million yen % Million yen % Million yen % First half - - - - - Fiscal

Listed company: Hitachi Chemical Co., Ltd. (Code number: 4217 Stock exchange: Tokyo)

(URL http://www.hitachi-chem.co.jp/english/index.html)Representative: Kazuyuki TanakaPosition of the person: President, Chief Executive Officer and Director Person in charge of the reference: Akihiko Takamatsu

Date of annual stockholders' meeting : June 19, 2015Date of the release of asset securities report : June 19, 2015

(Amounts rounded to the nearest million yen)

(1) Consolidated Financial Results

Million yen % Million yen % Million yen % Million yen % Million yen % Million yen %

March, 2015 3.2

March, 2014 - - - - - -

Yen Yen % % %

March, 2015

March, 2014

Note: Basic earnings per share is calculated based on net income attributable to owners of the parent.

(2) Consolidated Financial Position

Million yen Million yen Million yen % Yen

March, 2015

March, 2014

(3) Consolidated Cash Flows

Million yen Million yen Million yen Million yen

March, 2015

March, 2014

2. Dividend

Yen Yen Yen Yen Yen Million yen % %March, 2014

March, 2015March, 2016(Forecast)

Million yen % Million yen % Million yen % Million yen % Million yen %

First half - - - - -Fiscal year

Operating income torevenue

108.47 - 6.8 6.7 5.6

141.49

525,061 34,692 22,867 22,587

488,725 39,463 29,144 29,464

Basic earnings pershare

Diluted earnings pershare

Return on equityattributable to

owners of the parent

Income beforeincome taxes to total

assets

- 9.9 8.3 7.5

7.4

1. Consolidated Financial Highlights for the Fiscal Year Ended March 31, 2015 (April 1, 2014 through March 31, 2015)

(% indicates the rate of +/- compared with the previous fiscal year)

June 19, 2015

Consolidated Financial Summary(For the Fiscal Year Ended March 31, 2015 (IFRS basis))

Position of the person: General Manager, Corporate Communication Center Tel: 81-3-5533-7144

Revenue Operating incomeIncome beforeincome taxes

Net income

Net incomeattributable toowners of the

parent

Total comprehensiveincome

494,724 320,788 314,876 63.6 1,512.06

Reference: Share of profits of investments accounted for using the equity method March, 2015: 3,431 million yen March, 2014: 2,478 million yen

Total assets Total equityEquity attributable toowners of the parent

Ratio of equityattributable to owners of

the parent to totalassets

Equity attributable toowners of the parent per

share

542,535 357,334 348,241 64.2 1,672.33

50,357 (37,099) (2,374) 87,652

Cash flows from Cash flows from Cash flows from Cash and cash operating activities investing activities financing activities equivalents at end of term

34,009 (22,258) (16,874) 88,997

Dividend per ShareTotal

DividendsPaid (Total)

DividendsPayout Ratio

(Consolidated)

Dividends toequity attributableto owners of the

parent(Consolidated)

1st Quarter 2nd Quarter 3rd Quarter Year-End Total

- 18.00 36.00 7,497 33.2 2.3

- 18.00 - 18.00 36.00 7,497

56,00017,30038,500

Revenue Operating income Net income

Net incomeattributable toowners of the

parent

Basic earnings pershare

Income beforeincome taxes

184.8983.08

Yen

570,00024,00055,000

17,50039,000

280,0008.6 88.2 61.4 70.6 70.5

(21.5) (23.3) 43,538

42,194

29,226

36,569

(20.1) (12.1)

24,500

-

Note: The dividend forecasts for the fiscal year ending March 31, 2016 have not been determined.

3. Consolidated Financial Forecast for the Fiscal Year Ending March 31, 2016 (April 1, 2015 through March 31, 2016)(% indicates the rate of +/- compared with the same term of the previous fiscal year)

- - - - -

25.4 2.5

- 18.00

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* Notes

Inclusion: 6 companies (CSB Battery Co., Ltd., CSB Battery (Vietnam) Co., Ltd., CSB Battery (GUANGZHOU) Co., Ltd.,

Joy & Cheers International Co., Ltd., Ensys Global, Inc., CSB Battery Holding Co., Ltd.)

Exclusion: 1 company (Hitachi Powdered Metals Co., Ltd.)

(2) Changes of Accounting Policies Applied, Changes in Accounting Estimates

 (a) Changes of accounting policies required by IFRS: None

 (b) Changes of accounting policies other than (a): None

 (c) Changes in accounting estimates: None

(3) Number of Shares Issued (Common Stock):

(a) Number of shares at the end of the term

(Including treasury stock):

(b) Number of treasury stock at the end of the term:

(c) Average number of shares during the term:

(1) Changes in significant subsidiaries during the term(changes in specified subsidiaries resulting in the change in scope of consolidation): Yes

March 31, 2015: 208,364,913 shares March 31, 2014: 208,364,913 shares

* Explanation on the appropriate use of financial forecasts and other important items(1)The Company is making voluntary application of International Financial Reporting Standards (IFRS) starting with theconsolidated financial statements in the Securities Report for the fiscal year ended March 31, 2015. These materials makevoluntary disclosure of the principal consolidated financial statements in accordance with IFRS. The Company released theFinancial Summary for the fiscal year ended March 31, 2015, prepared in accordance with the Japanese Generally AcceptedAccounting Principles (JGAAP), on April 28, 2015.

March 31, 2015: 128,401 shares March 31, 2014: 122,189 shares

Fiscal 2014 : 208,240,078 shares Fiscal 2013 : 208,245,075 shares

(2)The financial forecasts shown on this report are estimated based on information available as of the issuing date of thisreport, and therefore the actual results for the future terms may differ from these forecasted figures due to various unknownfactors.

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1. Consolidated Financial Statements(1) Consolidated Statements of Financial Position

(Million yen)

As of April 1,2013

As of March 31,2014

As of March 31,2015

Current assets73,978 87,652 88,997

102,533 108,224 123,94948,645 50,218 61,90918,149 23,958 23,659

1,994 1,931 2,324245,299 271,983 300,838

Non-current assetsProperty, plant and equipment 160,495 168,855 179,196Intangible assets 7,216 7,335 12,301Net defined benefit assets 679 5,116 10,093Deferred tax assets 16,271 13,681 10,684

7,770 6,960 5,216

Other financial assets 15,279 15,054 17,591Other non-current assets 4,583 5,740 6,616Total non-current assets 212,293 222,741 241,697

Total assets 457,592 494,724 542,535

Liabilities Current liabilities

Trade payables 48,612 49,619 51,354Bonds and borrowings 20,387 25,269 33,658Accrued expenses 20,948 21,929 24,251Income tax payables 7,839 5,288 6,758Provisions - - 500Other financial liabilities 16,588 15,960 19,702Other current liabilities 562 3,431 1,471Total current liabilities 114,936 121,496 137,694

Non-current liabilitiesBonds and borrowings 27,990 30,563 26,619Retirement and severance benefits 22,375 16,260 13,345Provisions 1,054 1,117 1,143Other financial liabilities 3,196 2,835 3,051Other non-current liabilities 1,767 1,665 3,349Total non-current liabilities 56,382 52,440 47,507

Total liabilities 171,318 173,936 185,201

Equity Common stock 15,454 15,454 15,454Capital surplus 12,013 12,013 10,498Treasury stock, at cost (193) (200) (213)Retained earnings 249,828 272,009 287,498Accumulated other comprehensive income 2,823 15,600 35,004

279,925 314,876 348,241Noncontrolling interests 6,349 5,912 9,093

Total equity 286,274 320,788 357,334Total liabilities and equity 457,592 494,724 542,535

Total current assets

Cash and cash equivalentsTrade receivablesInventories

Assets

Other financial assetsOther current assets

Investments accounted for using the equitymethod

Total equity attributable to owners of the parent

- 1 -

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(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Consolidated statements of income)

(Million yen)

Year ended March 31, 2014(April 1, 2013 - March 31, 2014)

Year ended March 31, 2015(April 1, 2014 - March 31, 2015)

Revenues 488,725 525,061Cost of sales (368,965) (396,908)

Gross profit 119,760 128,153Selling, general and administrative expenses (88,877) (91,120)Other income 12,190 11,727Other expenses (6,504) (19,534)

Operating Income 36,569 29,226Financial income 1,937 3,804Financial expenses (1,521) (1,769)Share of profits of investments accounted forusing the equity method

2,478 3,431

Income before income taxes 39,463 34,692Income taxes (10,319) (11,825)

Net income 29,144 22,867

Net income attributable to: Owners of the parent 29,464 22,587Noncontrolling interests (320) 280

Basic 141.49 108.47Diluted - -

Earnings per share attributable to owners of theparent (yen)

- 2 -

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(Consolidated statements of comprehensive income)(Million yen)

Year ended March 31, 2014(April 1, 2013 - March 31, 2014)

Year ended March 31, 2015(April 1, 2014 - March 31, 2015)

Net income 29,144 22,867Other comprehensive income (OCI)

Items that cannot be reclassified into profit or lossNet gains and losses from financial assetsmeasured at fair value through OCI

792 1,115

Remeasurements of defined benefit obligations 5,250 2,887Total items that cannot be reclassified into profit orloss

6,042 4,002

Items that can be reclassified into profit or lossForeign currency translation adjustments 6,343 15,643Cash flow hedges (54) (59)Share of OCI of investments accounted for using theequity method

719 1,085

Total items that can be reclassified into profit or loss 7,008 16,669Other comprehensive income (OCI) 13,050 20,671

Comprehensive income 42,194 43,538

Comprehensive income attributable to: Owners of the parent 42,455 42,390Noncontrolling interests (261) 1,148

- 3 -

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(3) Consolidated Statements of Cash Flows

Year ended March 31, 2014(April 1, 2013 - March 31, 2014)

Year ended March 31, 2015(April 1, 2014 - March 31, 2015)

Cash flows from operating activities:Net income 29,144 22,867Depreciation and amortization 24,626 27,271Income tax expense 10,319 11,825Impairment losses 1,897 763Interest and dividends income (579) (750)Interest expenses paid 1,517 1,736Business structure improvement expenses 1,484 12,882Share of profits of investments accounted for usingthe equity method

(2,478) (3,431)

(Increase) decrease in trade receivables (2,071) (1,372)(Increase) decrease in accounts receivable other 1,629 (4,533)(Increase) decrease in inventories (288) (3,646)Increase (decrease) in trade payables (1,432) (5,847)Increase (decrease) in retirement and severancebenefits

(2,466) (4,793)

Other 1,802 1,712Sub-total 63,104 54,684Interest and dividends received 3,163 3,350Interest paid (1,460) (1,701)Business structure improvement expenses paid - (13,583)Income taxes paid (14,450) (10,190)Income taxes refund - 1,449Net cash provided by (used in) operating activities 50,357 34,009

Expenses for property, plant and equipment acquired (31,755) (22,896)Income from sale of property, plant and equipment 539 1,125Proceeds from redemption and sale of investments insecurities

2,517 2,118

Purchase of investments in subsidiaries - (3,146)Expenses for investment securities acquired (626) (2,887)Payments into deposits paid in subsidiaries andaffiliates

(7,000) -

Proceeds from withdrawal of deposits paid insubsidiaries and affiliates

- 7,000

Other (774) (3,572)Net cash provided (used in) by investing activities (37,099) (22,258)

Net increase (decrease) in short-term debt 5,818 157Proceeds from long-term debt 4,551 1,058Payments on long-term debt (4,617) (4,370)Purchase of shares of consolidated subsidiaries fromnoncontrolling interest holders

- (5,671)

Dividends paid to stockholders (7,497) (7,497)Dividends paid to noncontrolling interests (277) (134)Other (352) (417)Net cash provided by (used in) financing activities (2,374) (16,874)

2,790 6,468

13,674 1,34573,978 87,65287,652 88,997

(Million yen)

Net increase (decrease) in cash and cash equivalentsCash and cash equivalents at beginning of yearCash and cash equivalents at end of year

Cash flows from financing activities

Effect of exchange rate changes on cash and cashequivalents

Cash flows from investing activities

- 4 -

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- 5 -

(4) Items Regarding Consolidated Financial Statements

(Segment information)

(1) Overview of reportable segment

The Company’s reportable segment includes items in the constituent units of our business, for which

separate financial information is available, and those items to be reviewed periodically by the Board

of Directors of the Company to determine the allocation of management resources and evaluate

business results.

The Company is developing business activities based on the organizational structure that is

categorized depending on the degree of product processing, from materials through components to

parts. Based on the above, according to the degree of product processing, the Company determines

two reportable segments, namely categorizing materials as “Functional Materials Segment” and the

components and parts as “Advanced Components and Systems Segment.”

In the “Functional Materials” business, the Company manufactures and sells Electronics Materials,

Inorganic Materials, Polymer Science Materials, Printed Wiring Board Materials and the others. In the

“Advanced Components and Systems” business, the Company manufactures and sells Automotive

Products, Energy Storage Devices and Systems, Electronics Components and the others.

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(Million yen)

FunctionalMaterials

AdvancedComponentsand Systems

RevenueRevenue from outside customers 261,179 227,546 488,725 - 488,725Intersegment revenue 10,452 1,745 12,197 (12,197) -

Total 271,631 229,291 500,922 (12,197) 488,725Segment profit (loss) 25,633 10,966 36,599 (30) 36,569Financial income - - - - 1,937

Financial expenses - - - - (1,521)Equity in profit (loss) of affiliates - - - - 2,478Income before income taxes - - - - 39,463Other items

Depreciation and amortization 12,582 12,044 24,626 - 24,626Impairment losses 1,602 295 1,897 - 1,897Note: Segment profit adjustments are the amounts eliminated for intersegment transactions.

(Million yen)

FunctionalMaterials

AdvancedComponentsand Systems

RevenueRevenue from outside customers 275,769 249,292 525,061 - 525,061Intersegment revenue 9,071 2,911 11,982 (11,982) -

Total 284,840 252,203 537,043 (11,982) 525,061Segment profit (loss) 23,494 5,846 29,340 (114) 29,226Financial income - - - - 3,804Financial expenses - - - - (1,769)

Equity in profit (loss) of affiliates - - - - 3,431

Income before income taxes - - - - 34,692

Other itemsDepreciation and amortization 13,574 13,697 27,271 - 27,271Impairment losses 476 287 763 - 763Note: Segment profit adjustments are the amounts eliminated for intersegment transactions.

Reportable segment

Item

Adjustment(Note)

TotalTotal

Item

(2) Information Regarding Revenue, Income (Loss), and others of Reportable Segments

Fiscal Year ended March 31, 2014 (April 1, 2013 through March 31, 2014)

Total

Fiscal Year ended March 31, 2015 (April 1, 2014 through March 31, 2015)

Reportable segment

Adjustment(Note)

Total

- 6 -

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- 7 -

(Significant subsequent events)

At the Board of Directors meeting held on May 28, 2015, the Board decided to transfer a portion of

the shares of Hitachi Chemical Co. (Taiwan) Ltd. a wholly owned subsidiary of the Company, and a

stock transfer agreement was concluded on May 29, 2015.

Hitachi Chemical (Taiwan) is a subsidiary engaged in the manufacturing and marketing of printed

wiring boards and the slitting and marketing of photosensitive dry films for printed wiring boards. With

the objective of strengthening and expanding printed wiring board operations in cooperation with

Taiwan PCB Techvest Co., Ltd. (TPT), which is engaged in business in Taiwan and on the Chinese

mainland, the Company decided to separate and transfer the business of photosensitive dry films for

printed wiring boards from Hitachi Chemical (Taiwan). On that basis, the Company decided to transfer

80% of the stock of Hitachi Chemical (Taiwan) to TPT.

Following the above decision, the assets and liabilities of Hitachi Chemical (Taiwan) in the printed

wiring board business were classified as held for sale. In regard to the timing of the stock transfer, it is

planned for November 2015, and the effect on the consolidated financial statements has not yet been

determined.

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(Million yen)

JGAAPReclassifi-

cation

Differences inrecognition

andmeasurement

IFRS Notes

Assets AssetsCurrent assets Current assets

Cash and deposits 36,955 37,023 73,978 (a) Cash and cash equivalentsTrade notes and accountsreceivables

105,134 (770) (1,831) 102,533 (b) Trade receivables

Investments in securities 499 (499) -Finished goods 20,163 27,083 1,399 48,645 (c) InventoriesWork in process 12,006 (12,006) -Raw materials 15,090 (15,090) -Deferred tax assets 6,259 (6,259) -Deposits paid in subsidiariesand affiliates

37,317 (37,317) -

17,887 262 18,149 (d) Other financial assetsOther current assets 19,109 (17,115) 1,994 (e) Other current assetsLess allowance for doubtfulreceivables

(791) 791 -

Total current assets 251,741 (6,272) (170) 245,299 Total current assetsFixed assets Non-current assets

Buildings and structures, net 50,116 110,152 227 160,495 (f) Property, plant and equipment

Machinery, equipment andtransportation equipment, net

56,020 (56,020) -

Lands 20,165 (20,165) -Construction in progress 23,508 (23,508) -Other, net 12,211 (12,211) -

Intangible assetsGoodwill 24,398 (3,253) (21,145) -Other 6,080 1,170 (34) 7,216 (g) Intangible assets

Investments and other assetsInvestments in securities 15,259 (2,436) 2,456 15,279 (h) Other financial assets

7,786 (16) 7,770 (h)

Deferred tax assets 8,006 6,259 2,006 16,271 (i) Deferred tax assetsOther assets 11,202 (11,202) -

4,202 (3,523) 679 (j) Net defined benefit assets4,672 (89) 4,583 (k) Other non-current assets

(826) 826 -

Total fixed assets 226,139 6,272 (20,118) 212,293 Total non-current assets

Total assets 477,880 - (20,288) 457,592 Total assets

Investments accounted forusing the equity method

Less allowance for doubtfulreceivables

Net property, plant andequipment

2. Disclosure in relation to adoption of IFRS

(1) Adjustment to capital from day of transition (April 1, 2013)

Presentation under theJapanese GAAP

Presentation under IFRS

Our first Group consolidated financial statements based on IFRS were compiled as of April 1, 2013 (“the transition date”).Adjustments were subsequently made where necessary to the figures reported previously based on the Japanese GAAP.Our adjustments are detailed below.

- 8 -

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(Million yen)

JGAAPReclassifi-

cation

Differences inrecognition

andmeasurement

IFRS Notes

Liabilities Liabilities Current liabilities Current liabilities

48,612 48,612 Trade payables

Short-term debt 20,387 20,387 (l) Bonds and borrowingsAccrued expenses 19,521 152 1,275 20,948 (m) Accrued expenses Income taxes payable 7,778 61 7,839 Income tax payablesOther current liabilities 17,292 (709) 5 16,588 (n) Other financial liabilities

555 7 562 (n) Other current liabilities Total current liabilities 113,590 (2) 1,348 114,936 Total current liabilities

Non-current liabilities 20,000 8,053 (63) 27,990 (l) Bonds and borrowings

8,053 (8,053) -

Net defined benefit liability 17,111 5,264 22,375 (o)

510 (510) -

1,054 1,054 (p) Provisions5,212 (2,309) 293 3,196 (q) Other financial liabilities

1,767 1,767 (q) Other non-current liabilitiesTotal fixed liabilities 50,886 2 5,494 56,382 Total non-current liabilities

Total liabilities 164,476 - 6,842 171,318 Total liabilities

Net assets Equity 15,454 15,454 Common stock36,113 (24,100) 12,013 (r) Capital surplus

259,230 (9,402) 249,828 (s) Retained earnings (193) (193) Treasury stock, at cost

(3,625) 6,448 2,823 (t)

306,979 - (27,054) 279,925

6,425 (76) 6,349 Noncontrolling interests313,404 - (27,130) 286,274 Total equity

477,880 - (20,288) 457,592 Total liabilities and equity

Long-term debt

Provision for directors'retirement benefits

Other fixed liabilities

Presentation under theJapanese GAAP

Presentation under IFRS

Total liabilities, net assets

Trade notes and accountspayables

Retirement and severancebenefits

Accumulated othercomprehensive incomeTotal equity attributable toowners of the parentcompany

Minority interestsTotal net assets

Common stockCapital surplusEarnings surplusTreasury stockTotal accumulated othercomprehensive income

Fixed liabilitiesDebentures

- 9 -

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- 10 -

Capital adjustment

Main adjustments for differences are as follows:

(a) Cash and cash equivalents

(Notes on the reclassification)

Deposits paid in subsidiaries and affiliates that have a maturity of three months or less according to the

Japanese GAAP are classified as cash and cash equivalents under IFRS.

Cash and deposits deposited for over three months (fixed deposits) according to the Japanese GAAP are

classified as other financial assets (current assets) under IFRS.

(b) Trade receivables

(Notes on the reclassification)

Less allowance for doubtful receivables (current assets) under the Japanese GAAP are classified as

trade receivables under IFRS.

(Notes on differences in recognition and measurement)

Under the Japanese GAAP, revenue from the sale of goods is basically recognized upon shipment. Under

IFRS, revenue is recognized when the risk and reward of ownership of the goods has been transferred to

the customer. As a result, trade receivables have subsequently decreased.

(c) Inventories

(Notes on the reclassification)

Finished goods, work in process, and raw materials under the Japanese GAAP are included under

inventories according to IFRS.

(Notes on differences in recognition and measurement)

Under the Japanese GAAP, revenue from the sale of goods is basically recognized upon shipment. Under

IFRS, revenue is recognized when the risk and reward of ownership of the goods has been transferred to

the customer. As a result, inventories have subsequently increased.

(d) Other financial assets (current assets)

(Notes on the reclassification)

Cash and deposits that are deposited for over three months (fixed deposits) according to the Japanese

GAAP are classified as other financial assets (current assets) under IFRS.

Items such as accounts receivable and short-term loans are classified as other current assets in the

Japanese GAAP. Under IFRS, these are reclassified as other financial assets (current assets).

Investments in securities under the Japanese GAAP are included in other financial assets (current

assets) under IFRS.

(e) Other current assets

(Notes on the reclassification)

Items such as accounts receivable and short-term loans are classified as other current assets in the

Japanese GAAP. Under IFRS, these are reclassified as other financial assets (current assets).

(f) Property, plant and equipment

(Notes on the reclassification)

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- 11 -

The following items (buildings and structures, net; machinery, equipment, and transportation equipment,

net; and lands, construction in progress, and other, net) under the Japanese GAAP are classified as

property, plant and equipment under IFRS.

Investment real estate such as buildings and structures, net and lands under the Japanese GAAP are

classified as other non-current assets under IFRS.

(Notes on differences in recognition and measurement)

Under the Japanese GAAP, when insurance payouts are received the payouts are directly deducted from

fixed asset acquisition costs. Under IFRS, insurance payouts are posted as income. As a result, income

in property, plant and equipment has subsequently increased.

(g) Intangible assets

(Notes on the reclassification)

Intangible assets (goodwill and other) under the Japanese GAAP are classified as intangible assets under

IFRS.

Leases are included in other intangible assets under the Japanese GAAP. Under IFRS, leases are treated

as long-term advance payment costs and included under other non-current assets.

(Notes on differences in recognition and measurement)

Under the Japanese GAAP, accompanying an additional acquisition of a subsidiary’s stock (changes in a

company’s ownership interest in the stock of a subsidiary that do not result in a loss of control), the

difference between the additional amount included in the appraised value of the subsidiary’s stock on the

balance sheet and the amount of the investment in the additional acquisition is recorded as goodwill.

Under IFRS, this is treated as a capital transaction, and the difference is posted as capital surplus. As a

result, there is a subsequent negative impact of ¥24,100 million on intangible assets.

Under the Japanese GAAP, goodwill is amortized over the relevant investment period, but amortization

does not occur under IFRS. This subsequently had a positive impact of ¥3,834 million on intangible

assets. We also applied exemptions as of the date of transition, and amortization has not been recorded

since the date of application of IFRS 3 “Business Combinations” (October 1, 2011).

IFRS requires impairment tests each fiscal year even if there are no indications of impairment in goodwill.

The impairment test applied on the date of transition revealed that the Indian auto component business

(reported under the Advanced Components and Systems segment) was undershooting initial guidance on

future cash flows. As a result, the valuation of the business was subsequently reduced from book value to

recoverable value, with the decrease recorded as an impairment loss. This impairment loss on goodwill

had a subsequent negative impact of ¥879 million on intangible assets. The resulting Group recoverable

value is calculated according to value in use (calculated by discounting future cash flows by pre-tax

WACC (20.3%)).

(h) Other financial assets (non-current assets); investments accounted for under equity method

(Notes on the reclassification)

Under the Japanese GAAP, investments in securities include investments accounted for under the equity

method, while under IFRS they are reported as investments accounted for using the equity method.

Less allowance for doubtful receivables (fixed assets) and guarantee deposits (included in other

investments and other assets under the Japanese GAAP) are classified as other financial assets (non-

current assets) under IFRS.

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- 12 -

(Notes on differences in recognition and measurement)

Under the Japanese GAAP, unlisted securities are recorded based on the cost method, which in turn is

derived from the moving average method. Under IFRS, an estimate is made of the fair value of unlisted

securities, and the difference between the estimate and the acquisition cost is recorded in other

comprehensive income. As a result, income in other financial assets (non-current assets) has

subsequently increased.

(i) Deferred tax assets

(Notes on the reclassification)

Deferred tax assets, which are disclosed as current assets under the Japanese GAAP, are classified as

non-current assets under IFRS.

(Notes on differences in recognition and measurement)

Deferred tax assets have increased under IFRS, reflecting temporary differences arising from

adjustments with other items in the financial statements.

(j) Net defined benefit assets

(Notes on the reclassification)

Advance pension costs are included in investments and other assets under the Japanese GAAP. Under

IFRS, these are classified as accrued net defined benefit assets.

(Notes on differences in recognition and measurement)

Under the Japanese GAAP, cost accounting for actuarial differences is conducted by the straight line

method, amortizing the difference over a period of time. The period used is set as a number of years

falling within the average remaining working life of employees. Under IFRS, actuarial differences are

recorded in the period they occur in other comprehensive income. We have also changed the calculation

method for retirement and severance benefits in line with IFRS.

As a result, the amount of net defined benefit assets has subsequently decreased. Actuarial differences

recorded before the date of transition have been transferred in their entirety to retained earnings as of the

date of transition.

(k) Other non-current assets

(Notes on the reclassification)

Investment real estate such as buildings and structures, net and lands under the Japanese GAAP are

classified as other non-current assets under IFRS.

Leases included in other intangible assets under the Japanese GAAP are classified as long-term advance

payment costs under IFRS and included in other non-current assets.

Long-term advance payment costs included in other under investments and other assets under the

Japanese GAAP are classified as other non-current assets under IFRS.

(l) Bonds and borrowings

(Notes on the reclassification)

Short-term debt under the Japanese GAAP is classified as bonds and borrowings (current liabilities)

under IFRS. Debentures and long-term debt under the Japanese GAAP are also classified as bonds and

borrowings (non-current liabilities) under IFRS.

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- 13 -

(m) Accrued expenses

(Notes on differences in recognition and measurement)

Untaken paid employee leave is not recognized under the Japanese GAAP, but is recognized as a liability

under IFRS. As a result, accrued expenses have subsequently increased.

(n) Other financial liabilities (current liabilities), other current liabilities

(Notes on the reclassification)

Arrears and deposits included in other current liabilities under the Japanese GAAP are classified as other

financial liabilities (current liabilities) under IFRS.

(o) Retirement and severance benefits

(Notes on differences in recognition and measurement)

Under the Japanese GAAP, cost accounting for actuarial differences is conducted by the straight line

method, amortizing the difference over a period of time. The period used is set as a number of years

falling within the average remaining working life of employees. Under IFRS, actuarial differences are

recorded in the period they occur in other comprehensive income. We have also changed the calculation

method for retirement and severance benefits in line with IFRS.

As a result, the amount of retirement and severance benefits has subsequently increased. Actuarial

differences recorded before the date of transition have been transferred in their entirety to retained

earnings as of the date of transition.

(p) Provisions

(Notes on the reclassification)

Asset retirement obligations, which are classified under other fixed liabilities according to the Japanese

GAAP, are classified as provisions under IFRS.

(q) Other financial liabilities (non-current liabilities), other non-current liabilities

(Notes on the reclassification)

Asset retirement obligations, which are classified under other fixed liabilities according to the Japanese

GAAP, are classified as provisions under IFRS.

Lease liabilities, which are classified under other fixed liabilities according to the Japanese GAAP, are

classified as other financial liabilities (non-current liabilities) under IFRS.

Provision for directors' retirement benefits under the Japanese GAAP is classified as other non-current

liabilities under IFRS.

(r) Capital surplus

(Notes on differences in recognition and measurement)

Under the Japanese GAAP, accompanying an additional acquisition of a subsidiary’s stock (changes in a

company’s ownership interest in the stock of a subsidiary that do not result in a loss of control), the

difference between the additional amount included in the appraised value of the subsidiary’s stock on the

balance sheet and the amount of the investment in the additional acquisition is recorded as goodwill.

Under IFRS, this is treated as a capital transaction, and the difference is posted as capital surplus. As a

result, there is a subsequent negative impact of ¥24,100 million on capital surplus.

(s) Retained earnings

(Notes on differences in recognition and measurement)

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- 14 -

The impact of IFRS on retained earnings is detailed below (figures in parentheses represent a decrease).

Figures are adjusted for tax effect.

(Million yen)

Adjustment items IFRS transition date

(April 1, 2013)

Non-amortized goodwill and posting of impairment loss (Note g) 2,955

Drawdown of cumulative amount of foreign currency translation adjustments (Note t) (4,770)

Transfer of actuarial differences under the defined benefit obligation (Notes j, o) (4,410)

Change in calculation method for retirement and severance benefits under defined

benefit obligation (Notes j, o) (941)

Recognition of paid employee leave costs (current liabilities) (Note m) (806)

Other (1,430)

Total (9,402)

(t) Other comprehensive income

(Notes on differences in recognition and measurement)

By applying the exemptions, the cumulative amount of foreign currency translation adjustments is

transferred to retained earnings as of the date of transition. As a result, there is a subsequent increase in

other comprehensive income.

Under the Japanese GAAP, unlisted securities are recorded based on the cost method, which in turn is

derived from the moving average method. Under IFRS, an estimate is made of fair value, and the

difference between the estimate and the acquisition cost is recorded in other comprehensive income. As

a result, there is a subsequent increase in other comprehensive income.

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(Million yen)

JGAAPReclassifi-

cation

Differences inrecognition

andmeasurement

IFRS Notes

Assets AssetsCurrent assets Current assets

Cash and deposits 37,419 50,233 87,652 (a) Cash and cash equivalentsTrade notes and accountsreceivables

108,293 (723) 654 108,224 (b) Trade receivables

Finished goods 20,921 29,397 (100) 50,218 (c) InventoriesWork in process 13,888 (13,888) -Raw materials 15,526 (15,526) -Deferred tax assets 7,243 (7,243) -Deposits paid in subsidiariesand affiliates

57,238 (57,238) -

23,745 213 23,958 (d) Other financial assetsOther current assets 18,673 (16,743) 1 1,931 (e) Other current assetsLess allowance for doubtfulreceivables

(726) 726 -

Total current assets 278,475 (7,260) 768 271,983 Total current assetsFixed assets Non-current assets

Buildings and structures, net 59,947 108,655 253 168,855 (f) Property, plant and equipmentMachinery, equipment andtransportation equipment,

68,518 (68,518) -

Lands 21,577 (21,577) -Construction in progress 9,102 (9,102) -Other, net 12,560 (12,560) -

Intangible assetsGoodwill 19,079 (3,384) (15,695) -Other 5,878 1,457 7,335 (g) Intangible assets

Investments and other assetsInvestments in securities 13,681 (1,463) 2,836 15,054 (h) Other financial assets

6,980 (20) 6,960 (h)

Net defined benefit assets 5,115 1 5,116 Net defined benefit assets

Deferred tax assets 7,858 7,243 (1,420) 13,681 (i) Deferred tax assetsOther assets 7,104 (7,104) -

5,819 (79) 5,740 (j) Other non-current assets

(814) 814 -

Total fixed assets 229,605 7,260 (14,124) 222,741 Total non-current assets

Total assets 508,080 - (13,356) 494,724 Total assets

Investments accounted forusing the equity method

Less allowance for doubtfulreceivables

(2) Capital adjustments for previous fiscal year (ended March 31, 2014)

Presentation under theJapanese GAAP

Presentation under IFRS

Net property, plant andequipment

- 15 -

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(Million yen)

JGAAPReclassifi-

cation

Differences inrecognition

andmeasurement

IFRS Notes

Liabilities Liabilities Current liabilities Current liabilities

49,619 49,619 Trade payables

Short-term debt 24,615 654 25,269 (k) Bonds and borrowingsAccrued expenses 20,546 205 1,178 21,929 (l) Accrued expenses Income taxes payable 5,238 50 5,288 Income tax payablesOther current liabilities 19,588 (3,636) 8 15,960 (m) Other financial liabilities

3,431 3,431 (m) Other current liabilities Total current liabilities 119,606 - 1,890 121,496 Total current liabilities

Non-current liabilities 20,000 10,616 (53) 30,563 (k) Bonds and borrowings

10,616 (10,616) -

Net defined benefit liability 16,259 1 16,260

391 (391) -

1,117 1,117 (n) Provisions4,822 (2,391) 404 2,835 (o) Other financial liabilities

1,665 1,665 (o) Other non-current liabilitiesTotal fixed liabilities 52,088 - 352 52,440 Total non-current liabilities

Total liabilities 171,694 - 2,242 173,936 Total liabilities

Net assets Equity 15,454 15,454 Common stock36,113 (24,100) 12,013 (p) Capital surplus

274,895 (2,886) 272,009 (q) Retained earnings (200) (200) Treasury stock, at cost

4,446 11,154 15,600 (r)

330,708 - (15,832) 314,876

5,678 234 5,912 Noncontrolling interests336,386 - (15,598) 320,788 Total equity

508,080 - (13,356) 494,724 Total liabilities and equity

Total net assets

Total liabilities, net assets

Treasury stockTotal accumulated othercomprehensive income

Accumulated othercomprehensive incomeTotal equity attributable toowners of the parentcompany

Minority interests

Earnings surplus

Presentation under theJapanese GAAP

Presentation under IFRS

Trade notes and accountspayables

Fixed liabilitiesDebentures Long-term debt

Retirement and severancebenefits

Provision for directors'retirement benefits

Other fixed liabilities

Common stockCapital surplus

- 16 -

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- 17 -

Notes on capital adjustments

Main adjustments are detailed below.

(a) Cash and cash equivalents

(Notes on the reclassification)

Deposits paid in subsidiaries and affiliates that have a maturity of three months or less according to the

Japanese GAAP are classified as cash and cash equivalents under IFRS.

Cash and deposits deposited for over three months (fixed deposits) according to the Japanese GAAP are

classified as other financial assets (current assets) under IFRS.

(b) Trade receivables

(Notes on the reclassification)

Less allowance for doubtful receivables (current assets) under the Japanese GAAP are classified as

trade receivables under IFRS.

(Notes on differences in recognition and measurement)

When notes receivable are transferred under the Japanese GAAP, the portion that meets the conditions

for extinguishing a financial asset is derecognized. Under IFRS, such a transfer does not meet the

conditions for derecognition of a financial asset. As a result, notes receivable are recorded in both

receivables and bonds and borrowings (current liabilities).

(c) Inventories

(Notes on the reclassification)

Finished goods, work in process, and raw materials under the Japanese GAAP are included under

inventories according to IFRS.

(d) Other financial assets (current assets)

(Notes on the reclassification)

Cash and deposits that are deposited for over three months (fixed deposits) according to the Japanese

GAAP are classified as other financial assets (current assets) under IFRS.

Deposits paid in subsidiaries and affiliates that are deposited for over three months according to the

Japanese GAAP are classified as other financial assets (current assets) under IFRS.

Items such as accounts receivable and short-term loans are classified as other current assets in the

Japanese GAAP. Under IFRS, these are reclassified as other financial assets (current assets).

(e) Other current assets

(Notes on the reclassification)

Items such as accounts receivable and short-term loans are classified as other current assets in the

Japanese GAAP. Under IFRS, these are reclassified as other financial assets (current assets).

(f) Property and equipment

(Notes on the reclassification)

The following items (buildings and structures, net; machinery, equipment, and transportation equipment,

net; and lands, construction in progress, and other, net) under the Japanese GAAP are classified as

property, plant and equipment under IFRS.

Investment real estate such as buildings and structures, net and lands under the Japanese GAAP are

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- 18 -

classified as other non-current assets under IFRS.

(Notes on differences in recognition and measurement)

Under the Japanese GAAP, when insurance payouts are received the payouts are directly deducted from

fixed asset acquisition costs. Under IFRS, insurance payouts are posted as income. As a result, income

in property, plant and equipment has subsequently increased.

(g) Intangible assets

(Notes on the reclassification)

Intangible assets (goodwill and other) under the Japanese GAAP are classified as intangible assets under

IFRS.

Leases are included in other intangible assets under the Japanese GAAP. Under IFRS, leases are treated

as long-term advance payment costs and included under other non-current assets.

(Notes on differences in recognition and measurement)

Under the Japanese GAAP, accompanying an additional acquisition of a subsidiary’s stock (changes in a

company’s ownership interest in the stock of a subsidiary that do not result in a loss of control), the

difference between the additional amount included in the appraised value of the subsidiary’s stock on the

balance sheet and the amount of the investment in the additional acquisition is recorded as goodwill.

Under IFRS, this is treated as a capital transaction, and the difference is posted as capital surplus. As a

result, there is a subsequent negative impact of ¥24,100 million on intangible assets.

Under the Japanese GAAP, goodwill is amortized over the relevant investment period, but amortization

does not occur under IFRS. This subsequently had a positive impact of ¥3,834 million on intangible

assets. We also applied exemptions as of the date of transition, and amortization has not been recorded

since the date of application of IFRS 3 “Business Combinations” (October 1, 2011).

(h) Other financial assets (non-current assets); investments accounted for under equity method

(Notes on the reclassification)

Under the Japanese GAAP, investments in securities include investments accounted for under the equity

method, while under IFRS they are reported as investments accounted for using the equity method.

Less allowance for doubtful receivables (fixed assets) and guarantee deposits (included in investments

and other assets under the Japanese GAAP) are classified as other financial assets (non-current assets)

under IFRS.

(Notes on differences in recognition and measurement)

Under the Japanese GAAP, unlisted securities are recorded based on the cost method, which in turn is

derived from the moving average method. Under IFRS, an estimate is made of the fair value of unlisted

securities, and the difference between the estimate and the acquisition cost is recorded in other

comprehensive income. As a result, income in other financial assets (non-current assets) has

subsequently increased.

(i) Deferred tax assets

(Notes on the reclassification)

Deferred tax assets, which are disclosed as current assets under the Japanese GAAP, are classified as

non-current assets under IFRS.

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- 19 -

(Notes on differences in recognition and measurement)

Deferred tax assets have decreased under IFRS, reflecting temporary differences arising from

adjustments with other items in the financial statements.

(j) Other non-current assets

(Notes on the reclassification)

Investment real estate such as buildings and structures, net and lands under the Japanese GAAP are

classified as other non-current assets under IFRS.

Leases included in other intangible assets under the Japanese GAAP are classified as long-term advance

payment costs under IFRS and included in other non-current assets.

Long-term advance payment costs included in other under investments and other assets under the

Japanese GAAP are classified as other non-current assets under IFRS.

(k) Bonds and borrowings

(Notes on the reclassification)

Short-term debt under the Japanese GAAP is classified as bonds and borrowings (current liabilities)

under IFRS. Debentures and long-term debt under the Japanese GAAP are also classified as bonds and

borrowings (non-current liabilities) under IFRS.

(Notes on differences in recognition and measurement)

When notes receivable are transferred under the Japanese GAAP, the portion that meets the conditions

for extinguishing a financial asset is derecognized. Under IFRS, such a transfer does not meet the

conditions for derecognition of a financial asset. As a result, notes receivable are recorded in both trade

receivables and bonds and borrowings (current liabilities).

(l) Accrued expenses

(Notes on differences in recognition and measurement)

Untaken paid employee leave is not recognized under the Japanese GAAP, but is recognized as a liability

under IFRS. As a result, accrued expenses have subsequently increased.

(m) Other financial liabilities (current liabilities), other current liabilities

(Notes on the reclassification)

Arrears and deposits included in other current liabilities under the Japanese GAAP are classified as other

financial liabilities (current liabilities) under IFRS.

(n) Provisions

(Notes on the reclassification)

Asset retirement obligations, which are classified under other fixed liabilities according to the Japanese

GAAP, are classified as provisions under IFRS.

(o) Other financial liabilities (non-current liabilities), other non-current liabilities

(Notes on the reclassification)

Asset retirement obligations, which are classified under other fixed liabilities according to the Japanese

GAAP, are classified as provisions under IFRS.

Lease liabilities, which are classified under other fixed liabilities according to the Japanese GAAP, are

classified as other financial liabilities (non-current liabilities) under IFRS.

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- 20 -

Provision for directors' retirement benefits under the Japanese GAAP is classified as other non-current

liabilities under IFRS.

(p) Capital surplus

(Notes on differences in recognition and measurement)

Under the Japanese GAAP, accompanying an additional acquisition of a subsidiary’s stock (changes in a

company’s ownership interest in the stock of a subsidiary that do not result in a loss of control), the

difference between the additional amount included in the appraised value of the subsidiary’s stock on the

balance sheet and the amount of the investment in the additional acquisition is recorded as goodwill.

Under IFRS, this is treated as a capital transaction, and the difference is posted as capital surplus. As a

result, there is a subsequent negative impact of ¥24,100 million on capital surplus.

(q) Retained earnings

(Notes on differences in recognition and measurement)

The impact of IFRS on retained earnings is detailed below (figures in parentheses represent a decrease).

Figures are adjusted for tax effect.

(Million yen)

Adjustment items Previous fiscal year (ended March 31, 2014)

Non-amortized goodwill (Note g) 8,405

Drawdown of cumulative amount of foreign currency translation adjustments (Note r) (4,770)

Transfer of actuarial differences under the defined benefit obligation (Note r) (4,439)

Recognition of paid employee leave costs (current liabilities) (Note l) (825)

Other (1,257)

Total (2,886)

(r) Other comprehensive income

(Notes on differences in recognition and measurement)

By applying the exemptions, the cumulative amount of foreign currency translation adjustments is

transferred to retained earnings as of the date of transition. As a result, there is a subsequent increase in

other comprehensive income.

Actuarial differences posted prior to the date of transition are transferred to retained earnings. As a result,

there is a subsequent increase in other comprehensive income.

Under the Japanese GAAP, unlisted securities are recorded based on the cost method, which in turn is

derived from the moving average method. Under IFRS, an estimate is made of fair value, and the

difference between the estimate and the acquisition cost is recorded in other comprehensive income. As

a result, there is a subsequent increase in other comprehensive income.

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(Million yen)

JGAAPReclassifi-

cation

Differences inrecognition

andmeasurement

IFRS Notes

Net sales 493,766 (165) (4,876) 488,725 (a) RevenuesCost of sales 373,940 (4,975) 368,965 (a) Cost of sales

Gross profit 119,826 (165) 99 119,760 Gross profitSelling, general andadministrative expenses

92,051 (3,174) 88,877 (b)Selling, general andadministrative expenses

11,766 424 12,190 (c) Other income8,734 (2,230) 6,504 (c) Other expenses

Operating income 27,775 2,867 5,927 36,569 Operating IncomeNon-operating income 9,271 (9,271) -

2,279 (342) 1,937 (c) Financial income Non-operating expenses 4,965 (4,965) -

1,568 (47) 1,521 (c) Financial expenses

2,486 (8) 2,478 (c)Share of profits ofinvestments accounted forusing the equity method

Extraordinary profit 7,260 (7,260) -Extraordinary loss 5,502 (5,502) -

33,839 - 5,624 39,463 Income before income taxes

Income taxes-current 10,925 (591) (15) 10,319 Income taxesIncome taxes-deferred (591) 591 -

Income before minority interests 23,505 - 5,639 29,144 Net incomeMinority interests (598) 278 (320) Noncontrolling interests

Net income 24,103 - 5,361 29,464 Owners of the parent

(3) Adjustments to net income and comprehensive income for previous fiscal year (ended March 31, 2014)

Income before income taxesand minority interests

Presentation under theJapanese GAAP

Presentation under IFRS

- 21 -

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(Million yen)

JGAAPReclassifi-

cation

Differences inrecognition

andIFRS Notes

Income before minority interests 23,505 5,639 29,144 Net incomeOther comprehensive income Other comprehensive income

Valuation difference onavailable-for-sale securities

398 394 792 (d)Net gains and losses fromfinancial assets measured atfair value through OCI

Remeasurements of definedbenefit plans

5,221 29 5,250Remeasurements of definedbenefit obligations

Foreign currency translationadjustments

6,225 118 6,343Foreign currency translationadjustments

Deferred gains or losses onhedges

(54) (54) Cash flow hedges

Share of othercomprehensive income ofassociates accounted forusing equity method

720 (1) 719Share of OCI of investmentsaccounted for using theequity method

Total other comprehensiveincome

12,510 - 540 13,050

Comprehensive income 36,015 - 6,179 42,194 Comprehensive income Comprehensive incomeattributable to owners of theparent

36,584 5,871 42,455

Comprehensive incomeattributable to minorityinterests

(569) 308 (261) Noncontrolling interests

Items that cannot bereclassified into profit or loss

Items that can be reclassifiedinto profit or loss

Other comprehensive income

Owners of the parent

Presentation under theJapanese GAAP

Presentation under IFRS

- 22 -

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- 23 -

Notes on adjustments to net income and comprehensive income

Main adjustments are detailed below.

(a) Revenue, cost of sales

(Notes on differences in recognition and measurement)

Under the Japanese GAAP, the total amount of transactions in which the Group acts as principal or

transactions in which it acts as an agent are classified as net sales or cost of sales. Under IFRS,

transactions in which the Group acts as an agent are classified as net values. As a result, revenue and

cost of sales have subsequently decreased.

(b) Selling, general and administrative expenses

(Notes on differences in recognition and measurement)

Under the Japanese GAAP, the investment impact period for goodwill is estimated and amortized over the

said period, but amortization does not occur under IFRS. As a result, selling, general and administrative

expenses have subsequently decreased ¥3,720 million.

We have applied exemptions as of the date of transition, but amortization has not been recorded since

October 1, 2011.

(c) Other income, other expenses, financial income, financial expenses, share of profits of investments

accounted for using the equity method

(Notes on the reclassification)

The following items under the Japanese GAAP (non-operating income, non-operating expenses,

extraordinary profit, and extraordinary loss) and the following financial items (interest income, dividends

income, interest expenses, and foreign exchange income) are included under financial income and

financial expenses under IFRS. Other items are classified under other income, other expenses, or share

of profits of investments accounted for using the equity method.

(Notes on differences in recognition and measurement)

When impairment of a subsidiary company’s stock occurs under the Japanese GAAP, related goodwill is

amortized, but this does not occur under IFRS. As a result, other expenses have subsequently decreased.

Under the Japanese GAAP, when indication of fixed asset impairment emerges, a comparison is made of

the asset’s book value and its estimated future cash flows prior to discounting. In the case where the

book value exceeds the estimated future cash flows prior to discounting, the amount above fair value is

recognized as a fixed asset impairment loss. Under IFRS, when indication of fixed asset impairment

emerges, the amount by which the asset’s book value exceeds its recoverable value is recognized as a

fixed asset impairment loss. As a result, other costs subsequently decreased.

(d) Net gains and losses from financial assets measured at fair value through OCI

(Notes on differences in recognition and measurement)

Under the Japanese GAAP, unlisted securities are recorded based on the cost method, which in turn is

derived from the moving average method. Under IFRS, an estimate is made of the fair value, and the

difference between the estimate and the acquisition cost is recorded in other comprehensive income. As

a result, there is a subsequent increase in other comprehensive income. Consequently, net gains and

losses from financial assets measured at fair value through OCI show an increase.

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(4) Adjustments to cash flows for previous fiscal year (ended March 31, 2014)

There are no material differences between the consolidated cash flow statement compiled under the

Japanese GAAP and that compiled under IFRS.