AR2017

79/90

Consideration for the acquisitionCash:U.S. $306 million (¥34,417 million)Acquisition cost:U.S. $306 million (¥34,417 million)Note: The yen amounts are conversions based on the exchange rate as of November 31, 2016.(4)Content and amount of major acquisition-related costsAdvisory expenses and others: ¥652 million (U.S. $5,813 thousands)(5)Amount of goodwill arising from the business combination, cause of the goodwill, and amortization method and period1Amount of goodwill arising from the business combination ¥30,889 million (U.S. $275,330 thousands)2Cause of the goodwill The goodwill arose due to MACtac’s future additional earnings power that is expected from future business development.3Amortization method and period By straight-line method over 10 years(6)Amounts of assets received and liabilities assumed on the date of business combination, and their major componentsMillions of yen Thousands ofU.S. dollars2017Current assets¥ 9,066$ 80,817Non-current assets6,82060,793Total assets¥15,887$141,611Current liabilities¥ 4,794$ 42,738Non-current liabilities7,56467,427Total liabilities¥12,359$110,165(7)Approximate amount of impact on the consolidated statement of income for the fiscal year ended March 31, 2017 assuming that the business combination was completed on the first day of the fiscal year ended March 31, 2017, and the calculation methodMillions of yen Thousands ofU.S. dollars2017Net sales¥31,584$281,526Operating income5254,682(Method of calculating the proforma information)The proforma information is the difference between the amounts of net sales and operating income on the consolidated statement of income calculated assuming that the business combination was completed on the first day of the fiscal year ended March 31, 2017 and the impact of net sales and operating income on the consolidated statement of income. In addition, amortization is calculated by assuming the goodwill and other intangible assets recognized upon the business combination were recognized on the first day of the fiscal year ended March 31, 2017.This note is not subject to independent audit.3. Business combination by acquisition(1)Outline of business combination1Name of the acquired company Name of the acquired company: Lintec Graphic Films Limited (“LGF”) Business description: Process and sales of adhesive products2Major reasons for the business combination: LGF engages in the processing and sales of the Company’s adhesive products, such as label materials for printing, graphic materials, and window films for the UK and other European regions. LGF executed a license agreement with the Company on its trademarks in October 2010 and facilitated close collaborations when the Company participated in LABELEXPO EUROPE 2015 on a large scale, the world’s biggest label-related exhibition held in Belgium in September 2015. Thanks to these efforts, LGF is positioned as the most important partner to promote the Company’s brand strategy in Europe. Following the acquisition of LGF, the Company will further accelerate the cultivation of new customers by sharing and utilizing LGF’s marketing capabilities and the broad distribution networks on a group-wide basis. It will also release its original products with high-level functionality to the European market ahead of others, making the most of the Company’s notable technical development capabilities. By doing so, the Group seeks to further promote the global develop-ment of its printing and industrial materials products business.3Effective date of the business combination: November 30, 20164Legal form of the business combination: Acquisition of shares5Name of the acquired company after the combination: Lintec Graphic Films Limited6Ratio of acquired voting rights: 100%7Major reasons for the determination of acquiring the company: The determination was made because the Company acquired all of the voting rights of LGF through LINTEC EUROPE B.V., a wholly owned European subsidiary, by the acquisition of shares in exchange for cash.(2)Period for which the operating results of the acquired company are included in the consolidated financial statementsFrom December 1, 2016 to December 31, 2016(3)Acquisition cost of the acquired company and breakdown of consideration for the acquisition by typeConsideration for the acquisitionCash:U.S. $9,136 thousands (¥1,024 million)Acquisition cost:U.S. $9,136 thousands (¥1,024 million)(4)Content and amount of major acquisition-related costsAdvisory expenses and others: ¥66 million (U.S. $595 thousands)(5)Amount of goodwill arising from the business combination, cause of the goodwill, and amortization method and period1Amount of goodwill arising from the business combination ¥733 million (U.S. $6,539 thousands)2Cause of the goodwill The goodwill arose due to LGF’s future additional earnings power that is expected from future business development.3Amortization method and period By straight-line method over 5 years(6)Amounts of assets received and liabilities assumed on the date of business combination, and their major componentsMillions of yen Thousands ofU.S. dollars2017Current assets¥378$3,375Non-current assets1441,286Total assets¥523$4,662Current liabilities¥171$1,531Non-current liabilities59534Total liabilities¥231$2,06577LINTEC ANNUAL REPORT 2017