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2012

A nnua l Repor t

Ye a r ended M a rc h 31, 2012

Nihon Yamamura Glass Co., Ltd., is working for the realization of a


"harmonious and reciprocal" presence in society by drawing on the technical
expertise and passion of everybody in the entire group to respond to the
needs of people, the environment and the future.
For 97 years now, Nihon Yamamura Glass has cultivated its business interests in accordance with three basic philosophies:
Business rests on our people , Quality is the key to our business, and There is no future without innovation.
This period of 97 years has produced the Yamamura Groups own special Heart & Technology ,
based on the refinement of its high-order technology and the skills and talents of personnel throughout the entire group.
On the basis of its three basic philosophies, and equipped with the valuable resource of its Heart & Technology,
Nihon Yamamura Glass is striving to make greater contributions to society.

CONTENTS
1

Message from the President, CEO & COO

Financial Highlights

Consolidated Balance Sheets

Consolidated Statements of Income

Consolidated Statements of Comprehensive Income

Consolidated Statements of Changes in Net Assets

Consolidated Statements of Cash Flows

10

Notes to Consolidated Financial Statements

26

Independent Auditors Report

27

Corporate history

28

Company Overview, Board of Directors,


Industrial Categories of Yamamura Groups Major Business Partners,
Overseas Affiliated Companies, Domestic Network

Corporate Philosophy
Business rests on Our People
The Yamamura Group will encourage its employees to make the most of their personal strengths and
capabilities in order to create a vibrant and positive corporate atmosphere.
Quality is the Key to our Business
Quality is what supports our business.
We will be constantly on the lookout for ways to serve our customers and will work to offer them
products and services that fully satisfy their needs.
There is no Future without Innovation
We will boldly take on the challenges of this changing world instead of dwelling on current success,
and we shall continue to raise our high standards as we forge a new future.
The Meaning of Heart & Technology
1. The Heart of a Merchantbuilding trust among customers.
2. The Technology of a Craftsmanusing skill and know-how to create products of true distinction.

Message from the President,


CEO & COO

Since our inception in 1914, the Yamamura Group


has grown from a glass bottle manufacturer into a
major container manufacturer that places importance
on contributing to a recycling-oriented society. We will
continue to meet and create demand for glass bottles
(the star pupil of the recycling world) while fulfilling
o u r r e s p o n s i b i l i t y a s a leading Japanese container
manufacturer to develop r e c y c l a b l e p r o d u c t s t h a t
m a t c h t o d a y s n e e d s . We will also undertake
activities that include raising awareness of recycling
and other environmental matters.
While we will be celebrating our centennial in
2014, we see this as only a milestone and so we
have prepared a mid-term plan that will assist u s i n
s e t t i n g t h e s t a g e f o r o u r n e x t 1 0 0 y e a r s . This
plan came into effect in April 2010, and has the slogan
Towards a Global YAMAMURA.
Our many years of experience and strong brand
recognition in the glass bottle industry has allowed us
to expand our business into plastic caps, PET bottles
and new glass and grow into a group enterprise that
will form the foundations for future growth. In terms of
container manufacturing, we are emphasizing
expansion into the vibrant and growing Southeast
Asian region and other overseas markets. This direction
towards a global enterprise will require a concerted
effort by group companies, and we are working to
reform our enterprise structure and business culture
accordingly.
We are confident that you will not be disappointed
as we take up the challenges that lie before us.

President, CEO & COO

Koji Yamamura

Financial Highlights

Million yen

2008
Operating Performance
Net sales
Cost of sales
Operating income
Net income

2009

2010

2011

2012

75,321
60,939
2,968
1,589

73,435
60,559
1,499
526

72,784
57,888
3,322
2,605

72,600
58,039
2,667
1,888

70,929
58,121
1,497
975

102,207
55,398

92,935
48,844

96,507
51,590

94,723
50,895

92,003
50,639

Per Share
Net income
Cash dividend

14.3
6

4.79
6

24.79
6.5

17.97
7

9.28
6.5

Financial Ratios
Current ratio
Return on assets (%)
Return on equity (%)
Debt ratio (%)

2.14
1.6
2.9
45.8

2.19
0.6
1.0
47.4

2.11
2.8
4.9
46.5

2.35
2.0
3.6
46.3

2.40
1.1
1.9
45.0

Financial Position
Total assets
Total net assets

Net sales

Operating income

80,000

3,500

70,000

3,000

60,000

2,500

50,000

2,000

40,000

1,500

30,000

1,000

20,000

500

10,000
0

2008

2009

2010

2011

2012

2008

2009

Net income
120,000

2,500

10,000

2,000

8,000

1,500

6,000

1,000

4,000

500

2,000

2008

2009

2010

2011

2012

2011

2012

Total assets

3,000

2010

2011

2012

2011

2012

2008

2009

2010

Total net assets


60,000
50,000
40,000
30,000
20,000
10,000
0

2008

2009

2010

Consolidated Balance Sheets


Nihon Yamamura Glass Co., Ltd. and Consolidated Subsidiaries
Years ended March 31, 2011 and 2012

Thousand
U.S. dollars (Note 1)

Million yen

ASSETS
Current assets:
Cash and cash equivalents
Notes and accounts receivable:
Trade
Other
Allowance for doubtful accounts
Inventories (Note 3)
Deferred tax assets (Note 17)
Other current assets
Total current assets
Property, plant and equipment (Note 5):
Land
Buildings and structures
Machinery and equipment
Construction in progress
Other
Less: accumulated depreciation
Property, plant and equipment, net
Intangible assets
Investments and other assets:
Investment in:
Unconsolidated subsidiaries and affiliates
Other (Note 14)
Long-term loans receivable
Deferred tax assets (Note 17)
Other assets
Allowance for doubtful accounts
Total investments and other assets
Total assets

2011

2012

2012

12,106

10,753

$130,927

19,189
929
(33)
8,170
528
220
41,109

19,618
1,116
(45)
9,227
374
315
41,358

238,865
13,588
(548)
112,346
4,554
3,835
503,567

11,319
33,961
76,453
241
10,176
132,150
(99,911)
32,239

11,319
34,028
77,091
392
10,168
132,998
(103,036)
29,962

137,818
414,319
938,646
4,773
123,804
1,619,360
(1,254,548)
364,812

431

351

4,274

15,316
2,557
366
2,204
571
(70)
20,944
94,723

15,070
2,821
7
1,875
617
(58)
20,332
92,003

183,490
34,348
85
22,830
7,512
(706)
247,559
$1,120,212

Consolidated Balance Sheets


Nihon Yamamura Glass Co., Ltd. and Consolidated Subsidiaries
Years ended March 31, 2011 and 2012

Thousand
U.S. dollars (Note 1)

Million yen

2011
LIABILITIES AND NET ASSETS
Current liabilities:
Bank loans (Note 5)
Long-term debt due within one year (Note 5)
Notes and accounts payable:
Trade
Other
Accrued employees' bonuses
Accrued directors' bonuses
Provision for loss on disaster
Accrued income taxes
Other current liabilities
Total current liabilities

2012

2012

2,953
2,100

2,962
3,250

$36,065
39,571

7,199
2,790
742
55
174
183
1,315
17,511

7,326
1,307
620
20
238
1,529
17,252

89,200
15,914
7,549
244
2,898
18,617
210,058

Noncurrent liabilities:
Long-term debt due after one year (Note 5)
Employees' retirement and severance benefits (Note 16)
Allowance for special repairs
Other noncurrent liabilities (Note 17)
Total noncurrent liabilities

18,380
3,550
3,916
471
26,317

16,030
3,098
4,442
542
24,112

195,178
37,721
54,085
6,599
293,583

Contingent liabilities (Note 4)


Total liabilities

43,828

41,364

503,641

14,075

14,075

171,375

Net assets (Note 10):


Common stock
Authorized - 300,000,000 shares in 2011 and 2012
Issued - 111,452,494 shares in 2011 and 2012
Capital surplus
Retained earnings
Treasury stock, at cost
6,416,028 shares in 2011 and 6,425,381 shares in 2012
Total stockholders' equity

17,301
25,666
(1,218)

17,301
25,958
(1,220)

210,654
316,060
(14,855)

55,824

56,114

683,234

Unrealized gain (loss) on investment securities, net of tax


Deferred gain (loss) on hedges, net of tax
Foreign currency translation adjustment
Total accumulated other comprehensive income

(29)
24
(4,967)
(4,972)

220
35
(5,775)
(5,520)

2,679
426
(70,316)
(67,211)

43
50,895
94,723

45
50,639
92,003

548
616,571
$1,120,212

Minority interests
Total net assets
Total liabilities and net assets
See accompanying Notes to Consolidated Financial Statements.

Consolidated Statements of Income


Nihon Yamamura Glass Co., Ltd. and Consolidated Subsidiaries
Years ended March 31, 2011 and 2012

Thousand
U.S. dollars(Note 1)

Million yen

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Other income (expense)
Interest and dividend income
Equity in earnings of affiliates
Compensation income
Reversal of allowance for doubtful accounts
Gain on sale of property, plant and equipment
Gain on sale of investment securities
Gain on negative goodwill
Interest expense
Loss on disposal of fixed assets
Depreciation and taxes on idle equipment
Compensation expense
Loss on disaster
Provision for loss on disaster
Loss on valuation of investment securities
Other, net
Income before income taxes
Income taxes (Note 17)
Current
Prior period
Deferred

Income before minority interests


Minority interests
Net income

2011
72,600
(58,039)
14,561

2012
70,929
(58,121)
12,808

2012
$863,619
(707,671)
155,948

(11,894)
2,667

(11,311)
1,497

(137,721)
18,227

80
723
33
10
14
43
331
(376)
(93)
(173)
(337)
(174)
(2)
158
2,904

95
763
3
(344)
(101)
(161)
(27)
(137)
(117)
230
1,701

1,157
9,290
37
(4,188)
(1,230)
(1,960)
(329)
(1,668)
(1,425)
2,800
20,711

(514)
(498)
(1,012)

(492)
121
(351)
(722)

(5,991)
1,473
(4,273)
(8,791)

1,892
(4)
1,888

979
(4)
975

11,920
(49)
$11,871

Yen

Net income per share


Cash dividend per share
See accompanying Notes to Consolidated Financial Statements.

2011
17.97
7.00

U.S. dollars (Note 1)

2012
9.28
6.50

2012
$0.113
0.079

Consolidated Statements of Comprehensive Income


Nihon Yamamura Glass Co., Ltd. and Consolidated Subsidiaries
Years ended March 31, 2011 and 2012

Thousand
U.S. dollars(Note 1)

Million yen

2011
Income before minority interests
Other comprehensive income (Note 9)
Unrealized gain (loss) on investment securities, net of tax
Deferred gain (loss) on hedges, net of tax
Share of other comprehensive income of associates accounted
for using the equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to:
Owners of the parent
Minority interests

2012

2012

1,892

979

$11,920

(248)
24

249
11

3,032
134

(918)

(808)

(9,839)

(1,142)
750

(548)
431

(6,673)
$5,247

747
3

426
5

$5,186
61

See accompanying Notes to Consolidated Financial Statements.

Consolidated Statements of Changes in Net Assets


Nihon Yamamura Glass Co., Ltd. and Consolidated Subsidiaries
Years ended March 31, 2011 and 2012

Shareholders' equity
Common stock
Balance at the beginning of current period
Changes in items during the period
Total changes in items during the period
Balance at the end of current period

Capital surplus
Balance at the beginning of current period
Changes in items during the period
Disposal of treasury stock
Total changes in items during the period
Balance at the end of current period
Retained earnings
Balance at the beginning of current period
Effect of changes in accounting policies applied to foreign subsidiaries
Changes in items during the period
Dividends from surplus
Net income
Total changes in items during the period
Balance at the end of current period
Treasury stock
Balance at the beginning of current period
Changes in items during the period
Acquisition of treasury stock
Disposal of treasury stock
Total changes in items during the period
Balance at the end of current period

Thousand
U.S. dollars(Note 1)

Million yen

2011

2012

2012

14,075

14,075

$171,375

14,075

14,075

171,375

17,301

17,301

$210,654

0
0
17,301

0
0
17,301

0
0
210,654

25,216
(703)

25,666
-

$312,505
-

(735)
1,888
1,153
25,666

(683)
975
292
25,958

(8,316)
11,871
3,555
316,060

(1,213)

(1,218)

$(14,830)

(5)
0
(5)
(1,218)

(2)
0
(2)
(1,220)

(25)
0
(25)
(14,855)

55,379
(703)

55,824
-

$679,704
-

(735)
1,888
(5)
0
1,148
55,824

(683)
975
(2)
0
290
56,114

(8,316)
11,871
(25)
0
3,530
683,234

Total shareholders' equity


Balance at the beginning of current period
Effect of changes in accounting policies applied to foreign subsidiaries
Changes in items during the period
Dividends from surplus
Net income
Acquisition of treasury stock
Disposal of treasury stock
Total changes in items during the period
Balance at the end of current period

Consolidated Statements of Changes in Net Assets


Nihon Yamamura Glass Co., Ltd. and Consolidated Subsidiaries
Years ended March 31, 2011 and 2012

Thousand
U.S. dollars(Note 1)

Million yen

2011

2012

2012

Accumulated other comprehensive income


Unrealized gain (loss) on investment securities, net of tax
Balance at the beginning of current period
Changes in items during the period
Net changes in items other than shareholders' equity
Total changes in items during the period
Balance at the end of current period
Deferred gain (loss) on hedges, net of tax
Balance at the beginning of current period
Changes in items during the period
Net changes in items other than shareholders' equity
Total changes in items during the period
Balance at the end of current period
Foreign currency translation adjustment
Balance at the beginning of current period
Changes in items during the period
Net changes in items other than shareholders' equity
Total changes in items during the period
Balance at the end of current period
Total accumulated other comprehensive income
Balance at the beginning of current period
Changes in items during the period
Net changes in items other than shareholders' equity
Total changes in items during the period
Balance at the end of current period

Minority interests
Balance at the beginning of current period
Changes in items during the period
Net changes in items other than shareholders' equity
Total changes in items during the period
Balance at the end of current period

Total net assets


Balance at the beginning of current period
Effect of changes in accounting policies applied to foreign subsidiaries
Changes in items during the period
Dividends from surplus
Net income
Acquisition of treasury stock
Disposal of treasury stock
Net changes in items other than shareholders' equity
Total changes in items during the period
Balance at the end of current period

219

(29)

$(353)

(248)
(248)
(29)

249
249
220

3,032
3,032
2,679

24

$292

24
24
24

11
11
35

134
134
426

(4,050)

(4,967)

$(60,477)

(917)
(917)
(4,967)

(808)
(808)
(5,775)

(9,839)
(9,839)
(70,316)

(3,831)

(4,972)

(60,538)

(1,141)
(1,141)
(4,972)

(548)
(548)
(5,520)

(6,673)
(6,673)
(67,211)

42

43

$524

1
1
43

2
2
45

24
24
548

51,590
(703)

50,895
-

$619,690
-

(735)
1,888
(5)
0
(1,140)
8
50,895

(683)
975
(2)
0
(546)
(256)
50,639

(8,316)
11,871
(25)
0
(6,649)
(3,119)
$616,571

Consolidated Statements of Cash Flows


Nihon Yamamura Glass Co., Ltd. and Consolidated Subsidiaries
Years ended March 31, 2011 and 2012

Thousand
U.S. dollars(Note 1)

Million yen

2011
Cash Flows from Operating Activities:
Income before income taxes
Adjustments:
Depreciation and amortization
Equity in earnings of affiliates
Gain on negative goodwill
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for special repairs
Increase (decrease) in provision for retirement benefits
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for directors' bonuses
Increase (decrease) in provision for loss on disaster
Loss (gain) on valuation of investment securities
Loss on disposal of property, plant and equipment
Loss (gain) on sale of property, plant and equipment
Loss (gain) on sale of investment securities
Interest income and dividend income
Interest expense
Decrease (increase) in notes and accounts receivable - trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable - trade
Other
Subtotal
Interest and dividend income received
Interest expense paid
Income taxes paid
Refund of income taxes
Net cash provided by (used in) operating activities

2012

2,904

1,701

$20,711

4,800
(723)
(331)
(5)
(248)
(412)
40
(17)
174
2
93
(13)
(43)
(80)
376
779
15
31
(685)
6,657
315
(382)
(1,983)
89
4,696

4,619
(763)
(1)
527
(451)
(122)
(35)
(174)
117
101
(2)
(95)
344
(382)
(1,057)
(712)
488
4,103
337
(349)
(465)
527
4,153

56,240
(9,290)
(12)
6,417
(5,491)
(1,485)
(426)
(2,119)
1,425
1,230
(24)
(1,157)
4,188
(4,651)
(12,870)
(8,669)
5,940
49,957
4,103
(4,249)
(5,662)
6,417
50,566

Cash Flows from Investing Activities:


Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sale of investment securities
Purchase of stocks of subsidiaries and affiliates
Purchase of investment in subsidiaries resulting to change in scope of consolidation
Payments of loans receivable
Other payments
Other proceeds
Net cash provided by (used in) investing activities

(2,712)
44
(132)
(6)
194
(73)
(604)
(437)
(270)
623
(3,373)

(2,825)
7
(24)
(5)
3
(50)
(697)
(146)
182
(3,555)

(34,397)
85
(292)
(61)
37
(609)
(8,487)
(1,778)
2,217
(43,285)

Cash Flows from Financing Activities:


Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Proceeds from issuance of bonds
Redemption of bonds
Decrease (increase) in treasury stocks
Repayment of lease obligations
Cash dividends paid
Other payments
Net cash provided by (used in) financing activities

177
1,800
(2,950)
986
(1,000)
(5)
(131)
(738)
(3)
(1,864)

9
900
(2,100)
(2)
(56)
(686)
(17)
(1,952)

110
10,958
(25,569)
(24)
(682)
(8,353)
(207)
(23,767)

(4)
(545)
12,651
12,106

1
(1,353)
12,106
10,753

13
(16,473)
147,400
$130,927

Effect of exchange rate changes on cash and cash equivalents


Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents, beginning
Cash and cash equivalents, ending (Note 11)
See accompanying Notes to Consolidated Financial Statements.

2012

Notes to Consolidated Financial Statements


Nihon Yamamura Glass Co., Ltd. and Consolidated Subsidiaries

1. Basis of Presenting Consolidated Financial Statements


The accompanying consolidated financial statements of Nihon
Yamamura Glass Co., Ltd. (the Company) and its consolidated
subsidiaries have been prepared in accordance with the
provisions set forth in the Japanese Financial Instruments
Exchange Law and its related accounting regulations, and in
conformity with accounting principles generally accepted in
Japan (Japanese GAAP), which are different in certain respects
as to application and disclosure requirements of International
Financial Reporting Standard.
The translation of the Japanese yen amounts into U.S. dollar
amounts is included solely for the convenience of readers
outside Japan, using the prevailing exchange rate on March 31,
2012, which was 82.13 to U.S. $1.00. The translation should
not be construed as a representation that the Japanese yen
amounts have been, could have been or could in the future be
converted into U.S. dollars at this or any other rate of exchange.

2. Significant Accounting Policies


Consolidation
The accompanying consolidated financial statements include
the accounts of the Company and four significant domestic
subsidiaries over which the Company exercises control through
ownership of majority voting rights or the existence of other
certain conditions evidencing control. Intercompany transactions
and balances have been eliminated during the consolidation.
The inclusion of the accounts of the unconsolidated subsidiaries
would have had no material effect on the accompanying
consolidated financial statements.
(Changes in significant accounting policies)
B e g i n n i n g t h e f i s c a l y e a r e n d e d M a rc h 3 1 , 2 0 1 1 , t h e
Company has adopted the Accounting Standard for Business
Combinations (ASBJ Statement No. 21, issued on December
26, 2008), Accounting Standard for Consolidated Financial
Statements (ASBJ Statement No. 22, issued on December
26, 2008), Partial amendments to Accounting Standard for
Research and Development Costs (ASBJ Statement No. 23,
issued on December 26, 2008), Revised Accounting Standard
for Business Divestitures (ASBJ Statement No. 7, issued on
December 26, 2008), Revised Accounting Standard for Equity
Method of Accounting for Investments (ASBJ Statement No.
16, issued on December 26, 2008), and Revised Guidance
on Accounting Standard for Business Combinations and
Accounting Standard for Business Divestitures (ASBJ Guidance
No. 10, issued on December 26, 2008).
Equity method
The Company can exercise significant influence over the
operating and financial policies of three affiliates: San Miguel
Yamamura Asia Corp., San Miguel Yamamura Packaging
Corp. and San Miguel Yamamura Packaging International Ltd.
Therefore, the Companys investments in these affiliates are

accounted for by the equity method. The Company uses the


financial statements of the three affiliates as of and for the years
ending December 31, 2010 and December 31, 2011 because
the difference between the affiliates year-end and that of the
Company is not more than three months. Adjustments are made
to take into account significant transactions occurring between
the affiliates fiscal year-end and the Companys fiscal year-end.
(Changes in significant accounting policies)
Beginning the fiscal year ended March 31, 2011, the Company
has adopted the Accounting Standard for Equity Method of
Accounting for Investments (ASBJ Statement No. 16, issued
on March 10, 2008) and Practical Solution on Unification of
Accounting Policies Applied to Associates Accounted for Using
the Equity Method (Practical Issue Task Force (PITF) No.24,
issued on March 10, 2008). Accordingly, the Company made
the required revisions in the accounting for equity method. This
change had no material effect to the consolidated financial
statements.
Investment securities
The Company and its consolidated subsidiaries do not hold
investment securities for trading purposes and held-to-maturity
debt securities.
Available-for-sale securities with available fair market values
are stated at fair market value. Unrealized gains or losses on
these securities are reported, net of applicable income taxes,
as a separate component of net assets in the Consolidated
Balance Sheets. Realized gains or losses on the sale of such
securities are computed using the moving average method.
Other securities with no available fair market value are stated at
moving average cost.
If the market value of available-for-sale securities or equity
securities issued by unconsolidated subsidiaries and affiliates
declines significantly, such securities are stated at fair market
value and the difference between the fair market value and the
carrying amount is recognized as a loss in the period of decline.
If the net asset value of securities with no available fair market
value declines significantly, the securities are written down to net
asset value with the corresponding loss recognized in the period
of decline. In these cases, the fair market value or the net asset
value will be used as the carrying amount of the securities at the
beginning of the next fiscal year.
Inventories
Inventories are stated using the cost method. Cost of raw
materials and supplies is determined mainly by the first-in,
first-out method (FIFO). The average method is used mainly
for other inventories. Furthermore, the amount shown in the
Consolidated Balance Sheets is subject to the book value
write-down method based on decreased profitability.
Property, plant and equipment (excluding leased assets)
Property, plant and equipment are generally stated at cost.
Depreciation is calculated using the declining balance method,

10

except for assets with acquisition costs between 100 thousand


and 200 thousand which are depreciated using the straightline method for three years, and buildings (excluding building
fixtures) acquired after April 1, 1998 which are depreciated using
the straight-line method. The estimated useful life used is based
on Japanese tax regulations.
In accordance with the Corporate Tax Law of Japan, government
grants for construction of property, plant and equipment are
credited to Advances received when received and deducted
from the cost of the related fixed assets upon completion.
Accumulated amounts of deductions were 165 million and
189 million ($2,301 thousand) as of the year ended March 31,
2011 and March 31, 2012, respectively.
(Changes in significant accounting policies)
Beginning the fiscal year ended March 31, 2011, the Company
has adopted the Accounting Standard for Asset Retirement
Obligations (ASBJ Statement No. 18, issued on March 31,
2008) and Guidance on Accounting Standard for Asset
Retirement Obligations (ASBJ Guidance No. 21, issued on
March 31, 2008). This change had no effect on the presentation
of the financial statements.
Software (excluding leased assets)
The Company and its consolidated subsidiaries include software
in intangible assets and depreciate it using straight-line method
over its estimated useful life of five years.
Leases
For lease transactions not involving the transfer of ownership of
the leased assets, the straight-line method is used to depreciate
the leased assets over the lease term until the residual value
reaches zero.
Deferred asset
Bond issuance cost is recorded as a deferred asset and fully
amortized within a year.
Allowance for doubtful accounts
For receivables from insolvent customers, the allowance for
doubtful accounts is provided based on an evaluation of
each customers financial condition and an estimation of the
recoverable amount. For other receivables, the allowance
for doubtful accounts is based on the Companys historical
percentage of uncollectible amounts.
Bonuses
(a) Employees
The Company and its consolidated subsidiaries follow the
Japanese practice of paying bonuses to employees in June
and December. Accrued employees bonuses is stated on
the Consolidated Balance Sheets at an amount estimated by
management to be paid to employees based on their services in
the current fiscal period.

11

(b) Directors
Accrued directors bonuses is stated on the Consolidated
Balance Sheets at an amount estimated by management to
be paid to directors based on their services in the current fiscal
period.
Retirement and severance benefits
The Company and its consolidated subsidiaries have an
unfunded lump-sum benefit plan that provides lump-sum
payments to substantially all employees who have rendered
services for more than one year. The amount of the retirement
and severance benefits is generally based on length of service,
base salary at the time of retirement and cause of retirement.
The Company and its consolidated subsidiaries provide an
allowance for employees retirement and severance benefits
based on the estimated amount of projected benefit obligation
and fair value of the plan assets at the end of the fiscal year.
Projected benefit obligation and benefit expense are actuarially
calculated using certain assumptions. Actuarial gains and losses
are amortized using the straight-line method over the estimated
average remaining service period starting the next fiscal year.
Allowance for special repairs
Glass furnaces and hot blast stoves, including related machinery
and equipment, periodically require substantial component
replacement and repair. Allowance for the estimated future costs
of such work is charged to income on a straight-line basis until
the anticipated date of replacement and repair. The difference
between the estimated costs and the actual costs incurred is
included in the measurement of net income in the year the work
took place.
Translation of foreign currencies
(a) Translation of foreign currency transactions
Revenues and expenses are translated into Japanese yen using
the prevailing exchange rate on the transaction date. Monetary
assets and monetary liabilities are translated into Japanese yen
using the current exchange rate at the end of the fiscal year
and the resulting translation gains or losses are included in the
Consolidated Statements of Income as incurred.
(b) Translation of financial statements denominated in foreign
currency
All assets and liabilities of foreign affiliates are translated into
Japanese yen using the current exchange rate at the end of
the fiscal year. Revenues and expenses of foreign affiliates are
translated into Japanese yen using the average exchange rate
during the period. The resulting Foreign currency translation
adjustment is shown as a separate component of net assets in
the Consolidated Balance Sheets.
Hedge accounting
(a) Method of hedge accounting
The Company and its consolidated subsidiaries use mainly
deferred hedge accounting. Gains or losses resulting from the
derivative instruments are deferred until the related gains or
losses of the hedged items are recognized.

Notes to Consolidated Financial Statements


Nihon Yamamura Glass Co., Ltd. and Consolidated Subsidiaries

Interest rate swaps that meet the hedging criteria are accounted
for by the special treatment method for hedging. By this
method, the net amount of the swap is added to or deducted
from the amount of interest related to the asset or liability being
hedged.
When foreign currency forward contracts used for hedging
existing receivables or payables meet the hedging criteria,
the receivables or payables (hedged items) are stated at the
derivative spot rate prevailing at the inception of the contract.
(b) Hedging instruments and hedged items
Hedging instruments consist of foreign currency forward
contracts, interest rate swaps and options. Hedged items
include receivables and payables denominated in foreign
currency and highly probable forecast transactions.
(c) Hedging policy
The Company and its consolidated subsidiaries use derivative
financial instruments to hedge interest rate risk, foreign exchange
risk and market price fluctuation risk. The hedging transactions
are in accordance with internal control policies and procedures.
(d) Evaluating hedge effectiveness
The Company and its consolidated subsidiaries evaluate hedge
effectiveness before the inception of the contract and as the
need arises.
Goodwill amortization
Goodwill is amortized within a period determined based on its
source but should not exceed 20 years.
Cash and cash equivalents
Cash and cash equivalents include cash on hand, readily
available deposits and short-term highly liquid investments with
maturities not exceeding three months at the time of purchase.
Income taxes
The Company and its consolidated subsidiaries are subject
to different types of income taxes such as corporation tax,
prefectural and municipal inhabitants taxes and enterprise tax.
The Company and its consolidated subsidiaries use the asset
and liability approach to recognize deferred tax assets and
liabilities resulting from the expected future tax consequences of
tax loss carryforwards and temporary differences between the
carrying amounts of assets and liabilities for financial reporting
and income tax purposes.

Changes in presentation method


Beginning the fiscal year ended March 31, 2011, the Company
has adopted the Cabinet Office Ordinance Partially Revising
Regulation for Terminology, Forms and Preparation of Financial
Statements (Cabinet Office Ordinance No. 5, issued on
March 24, 2009), pursuant to the Accounting Standard for
Consolidated Financial Statements (ASBJ Statement No, 22,
issued on December 26, 2008). As a result, Income before
minority interests is included in the Consolidated Statements of
Income.
For the fiscal year ended March 31, 2011, vehicles, tools,
fur niture and fixtures were included in Machinery and
equipment. Beginning this fiscal year, however, these are
included in Other. The Consolidated Balance Sheets for
the previous fiscal year has been restated to conform to the
new presentation. As a result, 86,629 million presented as
Machinery and equipment in the previous fiscal year is restated
as Machinery and equipment in the amount of 76,453 million
and Other in the amount of 10,176 million.
For the fiscal year ended March 31, 2011, nontrade notes and
accounts payables are included in Notes and accounts payable:
Construction and other. Beginning this fiscal year, these are
included in Notes and accounts payable: Other.
For the fiscal year ended March 31, 2011, the Refund of
income taxes is included in Income taxes paid in Cash flow
from operating activities. Beginning this fiscal year, however, it
is presented as a separate item. The Consolidated Statements
of Cash Flows for the previous fiscal year has been restated
to conform to the new presentation. As a result, 1,894 million
presented as Income taxes paid in the previous fiscal year is
restated as Income taxes paid in the amount of 1,983 million
and Refund of income taxes in the amount of 89 million.
Additional information
(Accounting changes and error corrections)
The Company has adopted the Accounting Standard for
Accounting Changes and Error Corrections (ASBJ Statement
No. 24, issued on December 4, 2009) and the Guidance
on Accounting Standard for Accounting Changes and Error
Corrections (ASBJ Guidance No. 24, issued on December 4,
2009), for accounting changes and corrections of prior period
errors made from the fiscal year beginning on April 1, 2011.

12

3. Inventories
Inventories as of March 31, 2011 and March 31, 2012 were as follows:
Million yen

Finished goods and merchandise


Work in process
Raw materials
Supplies
Total

2011
5,763
381
911
1,115
8,170

Thousand U.S. dollars

2012
6,747
439
889
1,152
9,227

2012
$82,150
5,345
10,824
14,027
$112,346

4. Contingent Liabilities
On March 31, 2011 and 2012, the Company and its consolidated subsidiaries had no contingent liabilities.

5. Bank Loans and Long-Term Debt


Short-term debt is mainly comprised of bank loans generally payable within 130 days and bearing average interests rates of 0.90% and
0.89% per annum for the fiscal years ending March 31, 2011 and March 31, 2012, respectively.
Long-term debts as of March 31, 2011 and March 31, 2012 were as follows:
Million yen

Thousand U.S. dollars

2011

2012

5,050

4,850

$59,052

14,430
1,000
(2,100)
18,380

13,430
1,000
(3,250)
16,030

163,521
12,176
(39,571)
$195,178

2012

Secured:
Banks, insurance companies and others, 1.09% - 1.83% maturing
serially through 2016
Unsecured:
Banks, 0.84% - 2.22% maturing serially through 2016
0.82% bonds due in 2016
Less portion due within one year
Total long-term debt

As it is customary in Japan, security may need to be provided if requested by the lending banks. The banks have the right to offset
against cash deposited with them any debt or obligation that comes due and, in the case of default or other specified events, all debts
payable to the bank. As of March 31, 2011 and March 31, 2012, collateral assets for secured long-term debts are as follows:
Million yen

Property, plant and equipment, net of accumulated depreciation

2011
13,847

Thousand U.S. dollars

2012
12,386

2012
$150,810

The total annual maturities of long-term debts outstanding on March 31, 2012 were as follows:
Year ending March 31

2013
2014
2015
2016
2017

13

Million yen

3,250
2,000
10,830
2,800
400
19,280

Thousand U.S. dollars

$39,571
24,352
131,864
34,092
4,870
$234,749

Notes to Consolidated Financial Statements


Nihon Yamamura Glass Co., Ltd. and Consolidated Subsidiaries

6. Valuation of Inventories
The gain from reversal of allowance for inventory writedown presented as a deduction from cost of sales for the year ended March 31,
2011 and March 31, 2012 is shown below.
Million yen

Cost of sales

2011
35

Thousand U.S. dollars

2012
26

2012
$317

7. Research and Development Expenses


The Company charges research and development expenses to cost of sales and selling, general and administrative expenses as
incurred. The total research and development expenses for the years ended March 31, 2011 and March 31, 2012 were as follows:
Million yen

Research and development expenses

2011
486

Thousand U.S. dollars

2012
517

2012
$6,295

8. Loss on Disaster
On March 11, 2011, the Great East Japan Earthquake occurred and caused damage to the Company. In connection with this, the loss
on disaster and the provision for loss on disaster for the years ended March 31, 2011 and March 31, 2012 were as follows:
Million yen

Loss on disaster
Provision for loss on disaster

2011
337
174

Thousand U.S. dollars

2012
137
-

2012
$1,668
-

9. Comprehensive Income
Amounts reclassified to net income (loss) in the current period that were recognized in other comprehensive income in the current or
previous periods and the tax effects for each component of other comprehensive income were as follows:

Unrealized gain (loss) on investment securities:


Increase (decrease) during the period
Reclassification adjustments
Unrealized gain (loss) on investment securities, before tax
Income tax benefit (expense)
Unrealized gain (loss) on investment securities, net of tax
Deferred gain (loss) on hedges:
Increase (decrease) during the period
Reclassification adjustments
Deferred gain (loss) on hedges, before tax
Income tax benefit (expense)
Deferred gain (loss) on hedges, net of tax
Share of other comprehensive income of associates accounted for using the equity method:
Increase (decrease) during the period
Total other comprehensive income

Million yen

Thousand U.S. dollars

2012

2012

266
117
383
(134)
249

$3,239
1,424
4,663
(1,631)
$3,032

33
(17)
16
(5)
11

$402
(207)
195
(61)
$134

(808)
(548)

$(9,839)
$(6,673)

(Additional information)
Beginning the fiscal year ended March 31, 2011, the Company has adopted the Accounting Standard for Presentation of
Comprehensive Income (ASBJ Statement No. 25, issued on June 30, 2010). Accordingly, the consolidated amounts for the fiscal
year ending March 31, 2010 of the Valuation and translation adjustments and Total valuation and translation adjustments are now
presented as Accumulated other comprehensive income and Total other comprehensive income, respectively.
14

10. Net Assets


Under the Japanese Corporate Law (the Law) and regulations, the entire amount paid for new shares is required to be designated as
common stock. However, a company may, by a resolution of the Board of Directors, designate an amount not exceeding one half of the
price of the new shares as additional paid-in capital, which is included in capital surplus.
Under the Law, in cases in which a dividend distribution of surplus is made, the smaller of an amount equal to 10% of the dividend or
the excess, if any, of 25% of common stock over the total of additional paid-in capital and legal earning reserve must be set aside as
additional paid-in capital or legal earning reserve. Legal earning reserve is included in retained earnings in the accompanying Consolidated
Balance Sheets.
Additional paid-in capital and legal earnings reserve may not be distributed as dividends. However, under the Law, all additional paid-in
capital and all legal earnings reserve may be transferred to other capital surplus and retained earnings, respectively, which are potentially
available for dividends. The Law also provides that transfers among common stock, legal earnings reserve, additional paid-in capital,
other capital surplus and retained earnings is possible under certain conditions upon a resolution of the shareholders.
The maximum amount that the Company can distribute as dividends is calculated based on the nonconsolidated financial statements of
the Company in accordance with the Law.
At the annual shareholders meeting held on June 22, 2012, the shareholders approved cash dividend amounting to 263 million ($3,202
thousand). The appropriation had not been accrued in the consolidated financial statements as of March 31, 2012. Such appropriation is
recognized upon approval by the shareholders.

11. Supplemental Disclosures of Cash Flow Information


(1) Cash and cash equivalents as shown in the Consolidated Balance Sheets and Consolidated Statements of Cash Flows
Million yen

Cash and cash equivalents balance sheets


Cash and cash equivalents statements of cash flows

2011
12,106
12,106

Thousand U.S. dollars

2012
10,753
10,753

2012
$130,927
130,927

(2) Depreciation and amortization in the Consolidated Statements of Cash Flows includes the depreciation of research and development
assets and idle equipment.

12. Leases
As lessee
Obligations under non-cancelable operating leases as of March 31, 2011 and March 31, 2012 were as follows:
Million yen

Due within one year


Due after one year
Total

2011
512
1,573
2,085

Thousand U.S. dollars

2012
484
1,088
1,572

2012
$5,893
13,247
$19,140

As lessor
Receivables under non-cancelable operating leases as of March 31, 2011 and March 31, 2012 were as follows:
Million yen

Due within one year


Due after one year
Total

15

2011
285
475
760

Thousand U.S. dollars

2012
285
190
475

2012
$3,470
2,314
$5,784

Notes to Consolidated Financial Statements


Nihon Yamamura Glass Co., Ltd. and Consolidated Subsidiaries

13. Financial Instruments


1. Matters relating to financial instruments
(1) Policy for financial instruments
The policy of the Company and its consolidated subsidiaries is to invest surplus funds in short-term, highly secured financial assets and
to finance its business through bank borrowings and the issuance of stocks and corporate bonds. The Company and its consolidated
subsidiaries engage in derivative transactions only for hedging risks and not for speculative purposes.
(2) Types of financial instruments, related risks and the risk management system
Trade receivables such as trade notes and accounts receivable expose the Company to credit risk. The same type of risk results from
long-term loan receivable to affiliates and other counterparties. It is the risk of financial loss to the Company if the counterparty fails to
meet its contractual obligations. To mitigate this risk, the Company assesses the credit worthiness of its counterparties and periodically
monitors the outstanding balances and due dates.
Investments in share securities issued mostly by companies with which the Company has a business relationship expose the Company
to market price fluctuation risk. On a regular basis, the Company monitors the fair values of such securities and the financial position of
the issuer.
The Companys trade payables such as trade notes and accounts payable are generally due within one year. Trade payables and
borrowings expose the Company to liquidity risk. It is the risk that the Company may not be able to meet its financial obligations. The
Company regularly prepares and updates its cash flow projections in order to mitigate this risk.
Some of the Companys borrowings are subject to variable interest rates exposing the Company to interest rate fluctuation risk. To
reduce this risk, the Company uses hedging transactions such as interest rate swaps. (See Hedge accounting under Significant
Accounting Policies). Derivative transactions are undertaken and managed in accordance with internal control procedures that define the
trading authority and position limit.
(3) Supplementary information regarding the market price of financial instruments
The notional amounts of derivative transactions as discussed in Note 11, Derivative transactions, do not reflect the actual market risk
related to the derivative transactions.
2. Fair value of financial instruments
The table below shows the book values of financial instruments as stated in the Consolidated Balance Sheets, their fair values and
any difference between the two amounts. Financial instruments whose fair values were considered extremely difficult to assess were not
included in the table.

(1) Cash and cash equivalents


(2) Notes and accounts receivable trade
(3) Investment securities
(4) Long-term loans receivable
(5) Notes and accounts payable trade
(6) Short-term borrowings
(7) Bonds payable
(8) Long-term borrowings
(9) Derivatives

Year ended March 31, 2011


Million yen
Book value
12,106
19,189
2,318
366
(7,199)
(5,053)
(1,000)
(17,380)
40

Fair value
12,106
19,189
2,318
354
(7,199)
(5,053)
(996)
(17,454)
40

Difference
(12)
(4)
74
-

*The figures in parentheses indicate liabilities

16

(1) Cash and cash equivalents


(2) Notes and accounts receivable trade
(3) Investment securities
(4) Notes and accounts payable trade
(5) Short-term borrowings
(6) Bonds payable
(7) Long-term borrowings
(8) Derivatives

Year ended March 31, 2012


Million yen
Book value
10,753
19,618
2,585
(7,326)
(6,212)
(1,000)
(15,030)
57

Fair value
10,753
19,618
2,585
(7,326)
(6,212)
(1,010)
(15,208)
57

Difference
10
178
-

Year ended March 31, 2012


Thousand U.S. dollars
Book value
$130,927
238,865
31,474
(89,200)
(75,636)
(12,176)
(183,002)
694

Fair value
$130,927
238,865
31,474
(89,200)
(75,636)
(12,298)
(185,170)
694

Difference
$122
2,168
-

*The figures in parentheses indicate liabilities

(1) Cash and cash equivalents


(2) Notes and accounts receivable trade
(3) Investment securities
(4) Notes and accounts payable trade
(5) Short-term borrowings
(6) Bonds payable
(7) Long-term borrowings
(8) Derivatives
*The figures in parentheses indicate liabilities

Notes:
1. Methods used to measure the fair values of financial instruments
Cash and cash equivalents, Notes and accounts receivable trade
The book value approximates the fair value of these items because of their short-term nature. Thus, the book value is used as the fair
value.
Investment securities
The fair value of investment securities is based on the stock exchange market price. See Note 10, Investment Securities, for the fair
values and acquisition costs as of March 31, 2011 and March 31, 2012.
Long-term loans receivable
The present value method is used to measure the fair value of long term loans receivable. The cash flow for each collection period is
discounted using a rate in accordance with appropriate indices plus a credit spread.
Notes and accounts payable trade, Short-term borrowings
The book value approximates the fair value of these items because of their short-term nature. Thus, the book value is used as the fair
value. Please note that the Short-term borrowings includes the Long-term debt due within one year.
Bonds payable, Long-term borrowings
For fixed rate long-term payables, fair value is calculated by discounting the sum of the principal and interest payments using the rate
applicable to similar new long-term borrowing. For variable rate long-term borrowings subject to the special treatment of interest rate
swaps, the principal and interest payments of the swap and variable rate long-term borrowings are combined and discounted using the
rate applicable to similar new long-term borrowing.
Derivative
See Note 11, Derivative transactions.
2. Unlisted securities amounting to 239 million and 236 million ($2,874 thousand) as of March 31, 2011 and March 31, 2012,
respectively, have no available fair values and are deemed extremely difficult to assess. Thus, these are not included in the Investment
securities.
3. Investment in affiliates has no available fair value and is deemed extremely difficult to assess, as well as its future cash flows. Thus, it is
not disclosed.
17

Notes to Consolidated Financial Statements


Nihon Yamamura Glass Co., Ltd. and Consolidated Subsidiaries

14. Investment Securities


Acquisition costs and book values (fair values) of available-for-sale securities as of March 31, 2011 and March 31, 2012 were as follows:
Book value (fair value) exceeding acquisition cost

Million yen

2011
1,271
845
426

Book value (fair value)


Acquisition cost
Unrealized gain

Acquisition cost exceeding book value (fair value)

Thousand U.S. dollars

2012
1,370
805
565

2012
$16,681
9,802
$6,879

Million yen

2011
1,047
1,535
(488)

Book value (fair value)


Acquisition cost
Unrealized loss

Thousand U.S. dollars

2012
1,215
1,462
(247)

2012
$14,793
17,800
$(3,007)

Total proceeds from sale of investment securities and the related net realized gain (loss) for the year ending March 31, 2011 and March
31, 2012 were as follows:
Million yen

2011
194
43

Total proceeds from sale


Net realized gain (loss)

Thousand U.S. dollars

2012
3
0

2012
$37
0

Book values of investment securities with no available fair value as of March 31, 2011 and March 31, 2012 are as follows:
Million yen

2011
239

Unlisted equity securities

Thousand U.S. dollars

2012
236

2012
$2,874

15. Derivative Transactions


(1) Derivative transactions for which hedge accounting has not been applied.
There are no such transactions.
(2) Derivative transactions for which hedge accounting has been applied.
Year ended March 31, 2011
Million yen
Notional amount

Method of hedge
accounting

Type of derivative transaction

Hedged item

Appropriation method

Currency swap
Pay yen
Receive U.S. dollar

Long-term loans receivable

Special treatment

Interest rate swap


Pay fixed
Receive variable

Long-term borrowings

Deferred hedging

Commodity swap

Commodity price

Fair value
(See *1 below)

Due after
one year
346

346

(See *2 below)

11,000

10,000

(See *3 below)

393

39

18

Year ended March 31, 2012


Million yen
Notional amount

Method of hedge
accounting

Type of derivative transaction

Appropriation method

Foreign exchange forward


contract
Short position
U.S. dollar
Long position
U.S. dollar
Euro
Pound

Hedged item

Fair value
(See *1 below)

Due after
one year

(See *2 below)

Short-term loans receivable


Notes and accounts
payable - trade

Total
Special treatment

Interest rate swap


Pay fixed
Receive variable

Long-term borrowings

Deferred hedging

Commodity swap

Commodity price

152

117
31
10

8
0
-

310

10,000

9,000

(See *3 below)

396

49

Year ended March 31, 2012


Thousand U.S. dollars
Notional amount

Method of hedge
accounting

Type of derivative transaction

Appropriation method

Foreign exchange forward


contract
Short position
U.S. dollar
Long position
U.S. dollar
Euro
Pound

Hedged item

Fair value
(See *1 below)

Due after
one year

(See *2 below)

Short-term loans receivable


Notes and accounts
payable - trade

Total
Special treatment

Interest rate swap


Pay fixed
Receive variable

Long-term borrowings

Deferred hedging

Commodity swap

Commodity price

$1,851

$-

$-

1,425
377
122

97
0
-

$3,775

$-

$97

121,758

109,582

(See *3 below)

4,822

$597

*1. Fair value is based on the prices obtained from financial institutions.
*2. Currency swaps and foreign exchange forward contracts for which appropriation treatment has been applied are accounted for together with the hedged item.
Thus, the fair value of the derivative is already included in the fair value of the hedged item.
*3. Interest rate swaps for which special treatment has been applied are accounted for together with the hedged item. Thus, the fair value of the derivate is
already included in the fair value of the long-term borrowings, the hedged item.

19

Notes to Consolidated Financial Statements


Nihon Yamamura Glass Co., Ltd. and Consolidated Subsidiaries

16. Retirement and Severance Benefits


The Company and some of its consolidated subsidiaries provide retirement and severance benefits under lump-sum benefit plans,
defined benefit corporate pension plans (cash balance plans), and plans in which employees can select either a defined contribution
pension plan or prepaid retirement allowance plan. The Company also sets up a retirement benefits trust.

(1) Obligation for retirement and severance benefits as of March 31, 2011 and March 31, 2012
Million yen

Benefit obligation
Fair value of plan assets (including retirement benefit trust)
Funded status:
Benefit obligation in excess of plan assets
Unrecognized actuarial loss
Retirement and severance benefits as shown in the Consolidated
Balance Sheets

Thousand U.S. dollars

2011
7,691
(3,851)

2012
7,649
(4,446)

2012
$93,133
(54,134)

3,840
(290)

3,203
(105)

38,999
(1,278)

3,550

3,098

$37,721

* Some of the Companys consolidated subsidiaries have adopted a simpler and easier method for their plans.

(2) Retirement and severance benefit expense


Million yen

Service cost
Interest cost
Expected return on plan assets
Amortization:
Actuarial loss
Prior service cost
Other (*1)
Net benefit expense (*2)

Thousand U.S. dollars

2011
335
152
(36)

2012
339
152
(45)

2012
$4,128
1,851
(548)

185
101

162
110
718

1,972
1,339
$8,742

737

*1. Other is mainly comprised of the defined contribution plan and the additional retirement bonuses temporarily provided by the Company.
*2. The transfer to other account includes 18 million. In the previous fiscal year, the amount was 20 million.
*3. The retirement benefit expense of some of the Companys consolidated subsidiaries adopting a simpler and easier method for their plans is included in service
cost.

Assumptions used in accounting for the defined benefit plans for the years ended March 31, 2011 and March 31, 2012
Method of attributing benefit to period of service
Discount rate
Expected rate of return on plan assets
Expected rate of return on employees retirement benefit trust
Amortization period for prior service cost
Amortization period for actuarial losses

2011
Straight-line
2.0%
Mainly 2.00%
0.45%
-

2012
Straight-line
2.0%
Mainly 2.00%
0.45%
-

Mainly 10 years
(within the average remaining
service years)

Mainly 10 years
(within the average remaining
service years)

20

17. Income Taxes


The Company and its consolidated subsidiaries are subject to different types of income taxes which, in the aggregate, indicate a
statutory tax rate in Japan of 40.63% both for the years ended March 31, 2011 and March 31, 2012.

The reconciliation of Japans statutory tax rate and the Companys effective tax rate used for financial reporting purposes is shown
below:
2011
40.63%

Statutory tax rate


Adjustments:
Expenses permanently nondeductible
Income permanently nontaxable
Dividends from affiliates
Equity in earnings of affiliates
Gain on negative goodwill
Valuation allowance
Other
Effective tax rate

2012
-%

4.11
(3.66)
3.33
(10.22)
(4.64)
2.10
3.20
34.85%

*The reconciliation for the fiscal year ending March 31, 2012 is not shown because the difference between the statutory and effective rate was very minimal.

The table below shows the significant components of deferred tax assets and deferred tax liabilities as of March 31, 2011 and March
31, 2012.
Million yen

Deferred tax assets:


Retirement and severance benefits
Excess allowance for special repairs
Tax loss carryforwards
Other
Less valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Deferred gains on real properties
Other
Total deferred tax liabilities
Net deferred tax assets

Thousand U.S. dollars

2011

2012

2,291
659
980
1,122
5,052
(1,715)
3,337

1,924
742
931
837
4,434
(1,619)
2,815

$23,426
9,034
11,337
10,191
$53,988
(19,713)
$34,275

(531)
(74)
(605)

(444)
(129)
(573)

(5,406)
(1,571)
$( 6,977)

2,732

2,242

$27,298

2012

Net deferred tax assets as shown in the Consolidated Balance Sheets as of March 31, 2011 and March 31, 2012 were as follows:
Million yen

Current assets
Investment and other assets
Current liabilities
Noncurrent liabilities
Net deferred tax assets

21

2011
528
2,204
2,732

Thousand U.S. dollars

2012
374
1,875
(0)
(7)
2,242

2012
$4,554
22,830
(0)
(86)
$27,298

Notes to Consolidated Financial Statements


Nihon Yamamura Glass Co., Ltd. and Consolidated Subsidiaries

(Change in corporate tax rates)


Following the promulgation on December 2, 2011 of the Act for Partial Revision of the Income Tax Act, etc. for the Purpose of Creating
a Taxation System Responding to Changes in Socio-Economic Structures (Act No. 114 of 2011) and the Act on Special Measures
for Securing Financial Resources Necessary to Implement Measures for Reconstruction Following the Great East Japan Earthquake
(Act No. 117 of 2011), Japanese corporation tax rates will be reduced and the special reconstruction corporate tax, a surtax for
reconstruction funding after the Great East Japan Earthquake, will be imposed for the fiscal years beginning on or after April 1, 2012.
In line with these revisions, the Company changed the statutory tax rate to calculate deferred tax assets and liabilities from 40.63% to
37.96% for temporary differences which are expected to reverse during the period from the fiscal year beginning on April 1, 2012 to
the fiscal year beginning on April 1, 2014. Similarly, the Company changed the statutory tax rate to calculate deferred tax assets and
liabilities from 40.63% to 35.59% for temporary differences which are expected to reverse from the fiscal year beginning on or after April
1, 2015. As a result of this change, Deferred tax assets (net of deferred tax liabilities) decreased by 180 million ($2,192 thousand), and
Income taxes deferred increased by 196 million ($2,385 thousand).

18. Segment Information


Overview of the reportable segments
The reportable segments presented by the Company are the business units with available discrete financial information and whose
operating results are regularly reviewed by the Board of Directors to make decisions about resource allocation to each segment and to
assess its performance.
The Company is divided into business units which individually draw up strategies for their products and services and conduct business
activities accordingly.
Consequently, the Company has four reportable segments: Glass Containers, Plastic Containers, Logistics and New Glass.
Glass Containers:
Plastic Containers:
Logistics:
New Glass:

production and sale of glass containers


production and sale of plastic containers
procurement, warehousing and distribution
production and sale of glass components of electric and electronic devices

Method of calculation
Accounting methods used in the reportable segments are mostly the same as the accounting methods presented in the Basis of
Presenting Consolidated Financial Statements.
Prices for intersegment sales are mainly based on prices to outside customers.
Information about reportable segment net sales, segment income, segment assets and other material items
Year ended March 31, 2011
Million yen
Reportable segment
Glass
Plastics
Containers Containers

Logistics

New Glass

Total

Other

Total

Adjustments Consolidated

Net sales
Outside customers
Intersegment
Total
Segment income

36,811

11,981

10,529

5,300

64,621

7,979

72,600

2,968

980

12,771

16,726

854

17,580

(17,580)

72,600
-

39,779

12,961

23,300

5,307

81,347

8,833

90,180

(17,580)

72,600

900

992

551

492

2,935

52

2,987

(320)

2,667

Segment assets

39,658

10,380

5,956

6,734

62,728

5,253

67,981

26,742

94,723

Depreciation
and amortization

3,041

777

199

501

4,518

100

4,618

182

4,800

Increase in tangible and


intangible fixed assets

1,978

753

43

373

3,147

31

3,178

132

3,310

22

Year ended March 31, 2012


Million yen
Reportable segment
Glass
Plastics
Containers Containers

Logistics

New Glass

Other

Total

Total

Adjustments Consolidated

Net sales
Outside customers

36,373

10,790

11,008

4,494

62,665

8,264

70,929

70,929

2,901

1,288

11,841

16,037

716

16,753

(16,753)

39,274

12,078

22,849

4,501

78,702

8,980

87,682

(16,753)

70,929

300

792

301

(69)

1,324

94

1,418

79

1,497

Intersegment
Total
Segment income
Segment assets

37,970

10,899

6,002

5,908

60,779

5,321

66,100

25,903

92,003

Depreciation
and amortization

2,860

819

177

503

4,359

83

4,442

177

4,619

Increase in tangible and


intangible fixed assets

1,223

651

29

176

2,079

25

2,104

149

2,253

Year ended March 31, 2012


Thousand U.S. dollars
Reportable segment
Glass
Plastics
Containers Containers

Logistics

New Glass

Other

Total

Total

Adjustments Consolidated

Net sales
Outside customers

$442,871

$131,378

$134,031

$54,718

$762,998

$100,621

$863,619

$-

$863,619

35,322

15,682

144,174

85

195,263

8,718

203,981

(203,981)

478,193

147,060

278,205

54,803

958,261

109,339

1,067,600

(203,981)

863,619

3,653

9,643

3,665

(840)

16,121

1,144

17,265

962

18,227

Intersegment
Total
Segment income
Segment assets

462,316

132,704

73,079

71,935

740,034

64,788

804,822

315,390

1,120,212

Depreciation
and amortization

34,823

9,972

2,155

6,124

53,074

1,011

54,085

2,155

56,240

Increase in tangible and


intangible fixed assets

14,891

7,926

353

2,144

25,314

304

25,618

1,814

27,432

Note:
1. The Other category is composed of production and sale of bottle making machines and others.
2. Adjustments were as follows:
Million yen

Segment Net Sales


Intersegment sales
Total
Segment Income
Intersegment
Corporate expense
Non-operating income (expense)
Total
Segment Assets
Intersegment
Corporate assets
Total

23

Thousand U.S. dollars

2011
(17,580)
(17,580)

2012
(16,753)
(16,753)

2012
$(203, 981)
$(203, 981)

120
(440)
(320)

124
(45)
79

$1,510
(548)
$962

(7,256)
33,998
26,742

(7,769)
33,672
25,903

$(94,594)
409,984
$315,390

Notes to Consolidated Financial Statements


Nihon Yamamura Glass Co., Ltd. and Consolidated Subsidiaries

3. Adjustments are made to reconcile segment income to operating income presented in the Consolidated Statements of Income.
(Additional information)
Beginning the fiscal year ended March 31, 2011, the Company has adopted the "Accounting Standard for Disclosures about Segments
of an Enterprise and Related Information" (ASBJ Statement No. 17, issued on March 27, 2009) and the "Guidance on Accounting
Standard for Disclosures about Segments of an Enterprise and Related Information" (ASBJ Guidance No. 20, issued on March 21,
2008).

19. Significant Related Parties


As of the fiscal year ended March 31, 2012, the Company had two significant related parties: San Miguel Yamamura Asia Corporation
(SMYAC) and San Miguel Yamamura Packaging Corporation (SMYPC). The summarized consolidated financial statements of SMYAC
and SMYPC as of and for the years ended December 31, 2010 and December 31, 2011 are shown below.
Million pesos

SMYAC
Total current assets
Total noncurrent assets
Total current liabilities
Total noncurrent liabilities
Total net assets
Net sales
Income before income taxes
Net income

2010
Php

2011
3,645
4,319
(1,518)
(1,312)
Php
5,134

Php

Php

Php
Php
Php

Php
Php
Php

4,349
723
624

*The 2010 summarized consolidated financial statement of SMYAC is not shown because SMYAC has been considered as a significant related party beginning the
fiscal year ended March 31, 2012.

Million pesos

SMYPC
Total current assets
Total noncurrent assets
Total current liabilities
Total noncurrent liabilities
Total net assets

2010
Php
5,681
10,789
(3,507)
(532)
Php 12,431

Net sales
Income before income taxes
Net income

Php
Php
Php

10,617
544
373

2011
5,604
10,338
(3,391)
(69)
Php 12,482

Php

Php
Php
Php

10,469
538
370

24

Notes to Consolidated Financial Statements


Nihon Yamamura Glass Co., Ltd. and Consolidated Subsidiaries

20. Per Share Information


The table below shows nets asset per share and the net income per share as of and for the year ending March 31, 2011 and March 31, 2012.
Yen

Net assets per share


Net income per share - basic

2011
484.13
17.97

U.S. dollars

2012
481.72
9.28

2012
$5.87
0.11

* Diluted net income per share is not shown because there were no outstanding dilutive securities.

The data used in the computation of the net asset per share is shown below.
Million yen

Total net assets at year-end


Less minority interest
Net assets attributable to common shares

2011
50,895
43
50,852

Thousand U.S. dollars

2012
50,639
45
50,594

2012
$616,571
548
$616,023

Thousand shares

Common shares outstanding at year-end

105,036

105,027

The data used in the computation of the net income per share is shown below.
Million yen

Net income attributable to common shares

2011
1,888

Thousand U.S. dollars

2012
975

2012
$11,871

Thousand shares

Average number of shares for the year

105,052

105,032

21. Subsequent Events


At the general meeting of shareholders of the Company held on June 22, 2012, a dividend of 2.50 per share, for a total of 263 million
($3,202 thousand), was approved.

25

Independent Auditors' Report

26

Moving to the next stage by building on our solid


foundation of growth and evolution

The Yamamura Group originated in 1914 as Yamamura Glass Works, a manufacturer and seller of glass bottles.
Over time, we have established a solid position as a leading company in the container industry through
innovative technologies and product development that has always addressed leading-end needs. Not being
satisfied with what we are at present, we continue to look into the future, building on a century of know-how to
develop next-generation products, expand in carefully chosen new businesses, develop our businesses
globally and promote activities that support our corporate social responsibility. The Yamamura Group will
continue to grow as it looks to new frontiers and a promising future.

Corporate history
1897

Yamamura Shoten starts mining and sale of silica sand at foot of Mt. Rokko.

1914

Company founded as Yamamura Glass Works in Nishinomiya City, Hyogo Prefecture.

1922

Research into and development of bottle-making machinery started and semi-automatic machinery introduced.

1928

Fully automatic bottle-making system (Lynch-type) is introduced.

1939

Company starts doing business with Kirin Brewery Company, Limited.

1946

Operation resumes after the war. Semi-automatic production of alcoholic beverage bottles using crucible kilns started.

1948
1955
1960

Company starts doing business with Kotobukiya (now Suntory Holdings Limited).
January

Company incorporated as Yamamura Glass Co., Ltd.

October

Manufacturing plant for plastic containers constructed and production started.

December

Machinery division (now Engineering Company) established.

1961

January

Tokyo Plant constructed in Sagamihara City, Kanagawa Prefecture, and operation started.

1962

February

Nissho Co., Ltd. (now Seisho Co., Ltd.) established in Tokyo.

1963

Company starts doing business with The Coca-Cola Company.

1967

September

Yamamura Warehouse Co., Ltd., established in Nishinomiya City, Hyogo Prefecture.

1970

May

Company listed on Tokyo Stock Exchange (First Section) and Osaka Securities Exchange (First Section).

1973

Company enters recycling business.

1980

May

Harima Plant constructed in Harima-cho, Kako-gun, Hyogo Prefecture, and production started.

1983

April

Yamamura Glass Works Co., Ltd., established in Nishinomiya City, Hyogo Prefecture.

1987

July

New Glass Research Center opened in Nishinomiya City, Hyogo Prefecture.

October

Kansai Plant (Plastics) constructed in Harima-cho, Kako-gun, Hyogo Prefecture, and production started.

April

Company merges with Hiroshima Glass Kogyo Co., Ltd.

December

New Glass Development Plant (now Naruohama Plant) constructed in Nishinomiya City, Hyogo Prefecture, and operation started.

1991

June

San Miguel Yamamura Asia Corp. established in the Philippines.

1995

October

Utsunomiya Plant (Plastics) constructed in Utsunomiya City, Tochigi Prefecture, and operation started.

1996

April

San Miguel Yamamura Haiphong Glass Co., Ltd., established in British Virgin Islands.

1998

October

Yamamura Glass Co., Ltd, and Nippon Glass Co., Ltd., merge to form Nihon Yamamura Glass Co., Ltd.

December

Amagasaki Plant (New Glass) constructed in Amagasaki City, Hyogo Prefecture, and operation started.

February

Zhancheng (Suzhou) Plastic Co., Ltd., established in China.

January

Company invests capital in San Miguel Yamamura Packaging Corporation and San Miguel Yamamura Packaging International Ltd.

1989
1990

Kawajima Plant (Plastics) constructed and operation started.

2000

Company system introduced, with engineering, recycling, and new glass businesses converted into internal companies.
Glass and plastics businesses converted into internal companies.

2004
2008
2009

2010

27

May

Yamamura International (Shanghai) Co., Ltd., opened.

February

New Glass Company Kanagawa Development Center opened.

June

Head Office moved to Amagasaki City, Hyogo Prefecture, and dual head office system started.

October

Yamamura International (Thailand) Co., Ltd., established in Thailand.

May

PT. San Miguel Yamamura Utama Indoplas established in Indonesia.

July

Yamamura Photonics Co., Ltd., made into a subsidiary.

Company Overview

Domestic Network

Company Name: Nihon Yamamura Glass Co., Ltd.


Date Established: April 1914
Paid-in Capital: 14 billion yen
Listings: Tokyo Stock Exchange (First Section) and Osaka Securities Exchange (First Section)
Line of Business: Production and sale of glass bottles and plastic containers
Production and sale of powdered glass and glass paste
Designing, manufacturing, sale and installation work of machines
and plant facilities
Number of Employees: 1,059 (as of March 2012)
Fiscal Year Ends: 31st March

Head Offices

Board of Directors
Koji Yamamura
Yoshinori Tanigami

President, CEO and COO


Executive Managing Director
Advisor to Environmental Office, Corporate Headquarters,
Research & Development Center, New Glass Company

Tatsuya Metori

Director
Company President, Glass Bottle Company Advisor to Engineering Company

Yuki Uetaka

Director
Company President, Plastics Company

Yoshio Inoue

Director
President and CEO of Tomoegawa Co., Ltd. (External Director)

Koichi Kimura
Hitoshi Suzuki
Hanroku Toriyama

Auditor
Auditor
External Auditor
Lawyer

Yoshie Saito
Motokazu Hiraiwa

Certified Public Accountant


Managing Executive Officer
Executive Vice President and Director, San Miguel Yamamura Packaging Corporation.

Mitsuyoshi Kawamoto

Executive Officer

Harushige Matsuhisa

Executive Officer

Head of the CSR Promotion Office


General Manager, Corporate Headquarters

Kazuo Nonoguchi

Executive Officer
General Manager, Research & Development Center

Shigeki Teraoka

Executive Officer
Director of Sales, Glass Bottle Company

Masami Wakimoto

Executive Officer
Director of Production Division, Glass Bottle Company

Jiro Tanaka

Executive Officer
Director of Production Division, Plastics Company

Tomoyuki Taguchi
Satoru Yamashita

Company President, New Glass Company


Company President, Engineering Company

Industrial Categories of Yamamura Groups Major Business Partners


Beverage manufacture, food product manufacture, cosmetics manufacture, light
electrical appliances manufacture, automotive industries, warehousing/transportation,
healthcare products manufacture, communications equipment manufacture, household
appliance manufacture, precision instrument manufacture, medical equipment
manufacture, chemicals manufacture, construction industry, machinery manufacture,
energy industries, electronics industries, other industries.

Kansai

Head Office
15-1, Nishimukojima-cho, Amagasaki, Hyogo 660-8580
Tel: +81-6-4300-6000 Fax: +81-6-4300-6381
Tokyo Head Office
20F, Shinjuku Green Tower Building, 6-14-1, Nishi-Shinjuku, Shinjuku-ku, Tokyo 160-0023
Tel: +81-3-3349-7200 Fax: +81-3-3348-2349

Glass Bottle Company


15-1, Nishimukojima-cho, Amagasaki, Hyogo 660-8580
Tel: +81-6-4300-6000 Fax: +81-6-4300-6387
Tokyo Sales Department 20F, Shinjuku Green Tower Building, 6-14-1,
Nishi-Shinjuku, Shinjuku-ku, Tokyo 160-0023
Tel: +81-3-3349-7200 Fax: +81-3-3348-2349
Osaka Sales Department 15-1, Nishimukojima-cho, Amagasaki, Hyogo 660-8580
Tel: +81-6-4300-6150 Fax: +81-6-4300-6387
Nagoya Sales Office 9F, KIRIX Marunouchi Building, 1-17-19, Marunouchi,
Naka-ku, Nagoya, Aichi 460-0002
Tel: +81-52-211-5405 Fax: +81-52-211-5407
Kyushu Sales Office 7F, Green Building, 4-4-21, Hakataekimae, Hakata-ku,
Fukuoka, Fukuoka, 812-0011
Tel: +81-92-431-6836 Fax: +81-92-461-0806
Tokyo Plant 3-45, Oyama-cho, Midori-ku, Sagamihara, Kanagawa 252-0146
Tel: +81-42-771-5111 Fax: +81-42-773-7742
Saitama Plant 611-10, Shimobayashi, Mizugahara, Kumagaya, Saitama 360-8558
Tel: +81-48-533-7081 Fax: +81-48-533-7896
Harima Plant 5, Niijima, Harima-cho, Kako-gun, Hyogo 675-0155
Tel: +81-79-435-2051 Fax: +81-79-435-4061
Osaka Plant 1-52-2, Shibo-cho, Takatsuki, Osaka 569-0823
Tel: +81-72-677-1100 Fax: +81-72-677-6254

Plastics Company
15-1, Nishimukojima-cho, Amagasaki, Hyogo 660-8580
Tel: +81-6-4300-6300 Fax: +81-6-4300-6388
Tokyo Sales Department 20F, Shinjuku Green Tower Building, 6-14-1,
Nishi-Shinjuku, Shinjuku-ku, Tokyo 160-0023
Tel: +81-3-3349-7250 Fax: +81-3-3348-2349
Osaka Sales Department 15-1, Nishimukojima-cho, Amagasaki, Hyogo 660-8580
Tel: +81-6-4300-6315 Fax: +81-6-4300-6388
Kansai Plant 43-2, Niijima, Harima-cho, Kako-gun, Hyogo 675-0155
Tel: +81-79-435-5801 Fax: +81-79-435-5758
Utsunomiya Plant 18-1, Kiyohara-Kogyodanchi, Utsunomiya, Tochigi 321-3231
Tel: +81-28-667-8631 Fax: +81-28-667-8641
Kawajima Plant 6-8, Hachiman, Kawajima-cho, Hiki-gun, Saitama 350-0151
Tel: +81-49-297-7105 Fax: +81-49-297-7108

New Glass Company


111, Nishimukojima-cho, Amagasaki, Hyogo 660-0857
Tel: +81-6-6411-3431 Fax: +81-6-6411-3481
Amagasaki Plant 111 Nishimukojima-cho, Amagasaki, Hyogo 660-0857
Tel: +81-6-6411-3431 Fax: +81-6-6411-3481
Naruohama Plant 2-1-18, Naruohama, Nishinomiya, Hyogo 663-8142
Tel: +81-798-40-4456 Fax: +81-798-40-9144
Kanagawa R&D Center A-208, Kanagawa Science Park R&D, 3-2-1, Sakado,
Takatsu-ku, Kawasaki, Kanagawa 213-0012
Tel: +81-44-379-3200 Fax: +81-44-379-3474

Engineering Company
111, Nishimukojima-cho, Amagasaki, Hyogo 660-0857
Tel: +81-6-6411-7071 Fax: +81-6-6411-7075

Glass Studio Yamamura


Overseas Affiliated Companies

Sakagura Dori Rengakan, 4-28, Yogai-cho, Nishinomiya, Hyogo 662-0921


Tel: +81-798-32-2556 Fax: +81-798-32-2557

Zhancheng

Affiliated Companies

(Suzhou) Plastic Co., Ltd. (China)


Tel: +86-512-8160-2158 Fax: +86-512-5357-2665
PT. Yamamura Utama Indoplas (Indonesia)
Tel : + 62 - 21- 893 - 6578 Fax : + 62 - 21- 893 - 4636
Yamamura International (Shanghai) Co., Ltd. (China)
Tel: +86-21-5208-1258 Fax: +86-21-3208-0005
Yamamura International (Thailand) Co., Ltd. (Thailand)
Tel: +66-2656-8700 Fax: +66-2656-8776
San Miguel Yamamura Asia Corporation (Philippines)
Tel: +63-2-632-2650 Fax: +63-2-632-3967
San Miguel Yamamura Packaging Corporation (Philippines)
San Miguel Yamamura Packaging International Ltd. (British Virgin Islands)
Tel: +63-2-702-4200 Fax: +63-2-637-6368/69 or +63-2-687-7075

Yamamura

Warehouse Co., Ltd. 15-1, Nishimukojima-cho, Amagasaki, Hyogo 660-0857


Tel: +81-6-4300-6400 Fax: +81-6-4300-6410
Seisho Co., Ltd. 6F, Kowa Shibakoen Building, 1-1-11, Shibakoen, Minato-ku, Tokyo 105-0011
Tel: +81-3-5401-1741 Fax: +81-3-5401-1699
Yamamura Photonics Co., Ltd. 4207, Ikonobe-cho, Tsuzuki-ku, Yokohama, Kanagawa 224-0053
Tel: +81-45-930-1811 Fax: +81-45-930-1814
Yamamura Glass Works Co., Ltd. 2-1-18, Naruohama, Nishinomiya, Hyogo 663-8142
Tel: +81-798-43-1301 Fax: +81-798-43-1309
Yamamura Kosan Co., Ltd. 15-1, Nishimukojima-cho, Amagasaki, Hyogo 660-8580
Tel: +81-6-4300-6441 Fax: +81-6-6417-2825
Nissho Seiki Co., Ltd. 4-1-5, Fukaminishi, Yamato, Kanagawa, 242-0018
Tel: +81-46-261-9656 Fax: +81-46-263-1036

28

www.yamamura.co.jp

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