ANNUAL REPORT

ANNUAL REPORT 

Year Ended 

March 31, 2009

TABLE OF CONTENT 

PART I Letter to Shareholders and Business Review 3 

PART II Financial Statements for the Fiscal Year Ended March 31, 2009 27 

PART III Corporate Governance 105 

PART IV Shareholders’ Information 123 

1

PART I 

LETTER TO SHAREHOLDERS AND BUSINESS REVIEW

LETTER TO SHAREHOLDERS AND BUSINESS REVIEW 

LETTER TO SHAREHOLDERS 

July 22, 2009 

Dear Shareholders, 

During the past year, we and many others, have been caught in an economic downturn of an unprecedented severity and it is 

difficult to predict when it will end. 

The financial crisis gradually spread to the real economy across all industries, and confronted us and our portfolio companies 

with tremendous challenges. Yet our involvement with our portfolio companies as an industrial partner has proved to be 

efficient: we sold D&M Holdings Inc. at an attractive price amid financial market turbulence, yielding an absolute return of 120% 

on invested capital. 

The case of D&M Holdings demonstrates our hands-on approach and emphasizes our involvement as a manager in any venture 

we undertake, beyond the role of a mere financial investor. 

However, the economic downturn has significantly affected the financial performance of most of our portfolio companies. The 

impact of the economic recession on their financial performance and declining market valuations in their relevant industries, 

lead us to revisit the recoverable amounts of our investments in our non-consolidated financial statements, and to record an 

impairment charge of EUR 671 million. This impairment charge is in part driven by what we believe to be a conservative stance 

on the timing and the extent of the recovery of the global economy, and could therefore be partly or wholly reversed in the future 

if the reasons for recognising the impairment loss in our investments cease to be valid. 

The financial and economic crisis particularly caused enormous disruption in the global automotive industry. Sagging customer 

confidence and tightening consumer credit resulted in the near collapse of two of the largest US auto-manufacturers, which 

filed for bankruptcy protection. Our automotive assets, which account for more than 60% of the total invested capital, suffered 

the effects of severe and rapid volume declines. 

While Asahi Tec, Niles and Honsel all started to implement thorough restructuring plans to respond to collapsing demand, 

liquidity shortfalls were inevitable. 

Asahi Tec suffered from decreasing exports to emerging Asian economies and domestic demand for cars and trucks, and it was 

no longer able to support its US subsidiary Metaldyne which ultimately filed for protection under Chapter 11 in May 2009. 

Facing similar challenges, Niles successfully strengthened its capital structure, with one of its main stakeholders investing 

alongside us. 

Honsel also reached an agreement with RHJ International, its customers and its lenders, on a capital restructuring which 

involved a significant deleveraging of its balance sheet and the injection of new capital to allow for a significant operational 

restructuring. 

In all instances, the support from customers in the financial and operational restructuring of some of our automotive 

investments was essential to our decision to renew our commitment to these companies which are in many cases key parts of 

the car manufacturing supply chain. We now believe they are in a better position to weather the current economic downturn, and 

to emerge stronger when the global economy recovers. 

5

Support to our portfolio companies is made on a voluntary basis only and as a result of the merits of their respective individual 

business plans, that take a conservative view on the future and reflect current market reality. We remain prudent in our 

investment approach and need to be reassured of long-term returns before committing to new funding. A significant 

deleveraging of the balance sheet, stringent operational restructuring and the support of key customers are a prerequisite for 

any new capital injection from RHJ International. 

The intense focus on the existing portfolio companies does not mean we are not pursuing new investment opportunities. RHJ 

International remains determined to deploy most of its cash to create new investment platforms. 

With a strong cash position, which was recently strengthened by the partial sale of our stake in Commercial International Bank 

of Egypt, and a dedicated and committed team of investment professionals, we believe we are well positioned to take advantage 

of opportunities created by the market dislocation in the face of fundamental changes, particularly in, but not limited to, the 

European financial services sector. We remain disciplined and prudent in our aim to build strong investment platforms on which 

to grow, and have confidence in our capacity to create long-term shareholder value, in an ever-challenging environment. 

That same, continuous confidence of our shareholders is essential to implement our long-term strategy. I would therefore like 

to thank all of RHJ International’s shareholders for their continued interest and trust in the company in these turbulent times. 

I look forward to what we can accomplish over the next year and to welcoming you to our Annual General Meeting on 

September 15. 

Leonhard Fischer 

Chief Executive Officer 

6


BUSINESS REVIEW 

This Business Review presents a business and financial review 

of the Company’s activities for the fiscal years ended March 31, 

2008 and 2009. Unless otherwise noted herein, RHJ 

International SA, a Belgian limited company, is referred to as 

“RHJI” or “RHJ International”. RHJ International SA and its 

business are referred to collectively as the “Company”. 

RHJ International is a diversified holding company focused on 

creating long-term value for its shareholders by acquiring and 

operating businesses. It seeks to create sustainable competitive 

advantage by acting as a catalyst in industries that have a 

positive long-term outlook and that are undergoing fundamental 

changes. RHJ International generally acquires businesses that 

are under-managed but possess key strengths and strong 

growth potential, and adds management with global experience 

which it sources from its network of industrial executives. Given 

this strategy, RHJ International’s respective businesses are in 

various stages of operational improvement. 

Tec Corporation (“Asahi Tec”), Honsel International 

Technologies SA (“HIT”), Niles Co., Ltd. (“Niles”), D&M Holdings 

Inc. (“D&M”), Columbia Music Entertainment, Inc. (“CME”), 

Phoenix Resort K.K. (“Phoenix Seagaia Resort”) and Shaklee 

Global Group, Inc. (“Shaklee”), were contributed to the Company 

in connection with the initial offering and listing of its ordinary 

shares on Euronext Brussels in March 2005. The investments in 

U-shin Ltd. (“U-shin”) and SigmaXYZ Inc.("SigmaXYZ") were 

made during the fiscal years ended March 31, 2007 and 2009, 

respectively. 

The Company’s portfolio consists of five controlling ownership 

interests, three investments in associates and several noncontrolling 

minority ownership interests. The interests in Asahi 

Asahi Tec 

60.1% 

Honsel 

51% 

Niles 

77.3% 

CME 

25.5% 

Phoenix 

Seagaia 

Resort 

100% 

Associates 

Other 

Interests 

Cast Auto 

Parts 

Automotive Components 

Cast Auto 

Parts 

Electronics 

Media & 

Entertainment 

Hospitality 

Nutrition, 

Automotive, 

Other 

Financial 

Services & 

Other 

7

The evolution of the book value of the Company’s portfolio since March 31, 2008, can be summarized as follows: 

Evolution of book value 

(In JPY millions) 

Fiscal year ended March 31 2008 Additions Disposals 

Fair value 

adjustments 

Impairment 2009 

Investments in subsidiaries – At cost less impairment 

Asahi Tec 25,984 7,769 - - (19,753) 14,000 

CME 7,817 - - - (4,817) 3,000 

D&M 10,515 - (10,515) - - - 

HIT 32,993 - - - (32,993) - 

Niles 16,619 - - - - 16,619 

Phoenix Seagaia Resort 21,709 1,000 - - (17,209) 5,500 

115,637 8,769 (10,515) 0 (74,772) 39,119 

Investments in associates – At cost less impairment 

Shaklee 12,244 276 - - (6,050) 6,470 

SigmaXYZ - 1,085 - - - 1,085 

U-shin 8,038 - - - (4,838) 3,200 

20,282 1,361 0 0 (10,888) 10,755 

Other investments - At fair value 21,530 897 (9,030) (5,016) (2,299) 6,082 

Total investments 157,449 11,027 (19,545) (5,016) (87,959) 55,956 

Cash and cash equivalents (parent company only) 50,347 8,379 - - - 58,726 

Loans 2,361 2,584 - - - 4,945 

Total portfolio 210,157 21,990 (19,545) (5,016) (87,959) 119,627 

Book value per share (in JPY) 2,457 257 (229) (59) (1,028) 1,398 

(In EUR millions) 

Fiscal year ended March 31 2008 Additions Disposals 

Fair value 

adjustments 

Impairment 2009 

Investments in subsidiaries – At cost less impairment 

Asahi Tec 198.1 59.2 - - (150.6) 106.7 

CME 59.6 - - - (36.7) 22.9 

D&M 80.2 - (80.2) - - - 

HIT 251.5 - - - (251.5) - 

Niles 126.7 - - - - 126.7 

Phoenix Seagaia Resort 165.5 7.6 - - (131.2) 41.9 

881.6 66.9 (80.2) 0.0 (570.0) 298.2 

Investments in associates – At cost less impairment 

Shaklee 93.3 2.1 - - (46.1) 49.3 

SigmaXYZ - 8.3 - - - 8.3 

U-shin 61.3 - - - (36.9) 24.4 

154.6 10.4 0.0 0.0 (83.0) 82.0 

Other investments - At fair value 164.1 6.8 (68.8) (38.2) (17.5) 46.4 

Total investments 1,200.3 84.1 (149.0) (38.2) (670.6) 426.6 

Cash and cash equivalents (parent company only) 383.8 63.9 - - - 447.7 

Loans 18.0 19.7 - - - 37.7 

Total portfolio 1,602.2 167.6 (149.0) (38.2) (670.6) 912.0 

Book value per share (in EUR) 18.7 2.0 (1.7) (0.4) (7.8) 10.7 

The table above reflects the Company’s investments’ book values as reflected in the non-consolidated financial statements, except for 

the other investments which are reflected at fair market value. 

The Company believes that the non-consolidated financial statements provide for the most relevant measure of its liquidity and 

financial position as the consolidated financial statements are merely an aggregation of its consolidated subsidiaries that operate in 

diverse industries. Furthermore, the consolidated financial statements for the year ended March 31, 2009, include losses and 

negative equity contributions from certain consolidated subsidiaries that the Company and its shareholders will not be exposed to as 

there is no binding obligation to cover such losses. Except for a guarantee of up to JPY 3,400 million (EUR 26.1 million) on the debt of 

Phoenix Seagaia Resort, RHJI’s financial exposure from its investments is limited to the invested capital. This exposure is reflected by 

the book values reflected in the non-consolidated financial statements. 

8


Investments and disposals 

The evolution in terms of total invested capital of the Company’s 

portfolio during the fiscal year ended March 31, 2009, can be 

summarized as follows: 

• The Company increased the capital of Asahi Tec by JPY 7,769 

million (EUR 59.2 million) for purposes of (a) curing a breach 

of covenants by its US based subsidiary Metaldyne (JPY 

1,800 million or EUR 13.7 million), (b) providing Metaldyne 

with additional liquidity (JPY 1,051 million or EUR 8 million) 

and (c) funding Metaldyne’s bond tender (JPY 4,918 million 

or EUR 37.5 million); 

• The Company subscribed to JPY 1,000 million (EUR 7.6 

million) of new shares of Phoenix Seagaia Resort to cover 

scheduled reimbursement of its debt as well as to provide 

liquidity for working capital requirements; 

• The Company invested JPY 1,085 million (EUR 8.3 million) in 

SigmaXYZ, a newly formed joint venture in IT consulting with 

Mitsubishi Corporation; 

• The Company acquired 457,000 additional existing shares of 

Shaklee for an aggregate consideration of JPY 276 million 

(EUR 2.1 million), increasing its ownership to 42.5 %; 

• The Company closed the sale of D&M to K.K. BCJ-2, a 

corporation owned by investment funds advised by Bain 

Capital Partners, LLC, for cash consideration of JPY 23,115 

million (EUR 176.2 million); 

• The Company disposed of a non-controlling minority 

investment for JPY 9,030 million (EUR 68.8 million), initially 

acquired for JPY 5,600 million (EUR 42.7 million). The other 

investments also include a new investment of JPY 730 

million (EUR 5.6 million). 

Fair value adjustments 

Other investments consist of several non-controlling ownership 

interests and certain undisclosed investments. The noncontrolling 

ownership interests are “available for sale financial 

assets”, and are reported at fair market value. The downward 

adjustment since March 31, 2008, is attributable to a decrease in 

the fair market value of the investment in Commercial 

International Bank (Egypt) SAE (“CIB”) by JPY 5,016 million (EUR 

38.2 million). Subsequent to year-end, on July 8, 2009, 63% of 

the stake in CIB was sold for cash consideration of JPY 5,235 

million (EUR 40.2 million). 

Impairment 

The Company prepares both consolidated and non-consolidated 

financial statements. The consolidated financial statements are 

prepared in accordance with International Financial Reporting 

Standards ("IFRS"), while the non-consolidated financial 

statements are prepared in accordance with Belgian Generally 

Accepted Accounting Principles (“Belgian GAAP”). An 

impairment review was carried out for both the consolidated and 

the non-consolidated financial statements. It should be noted 

that there are significant differences in the valuation approach, 

nature and outcome of these reviews resulting from divergent 

methodologies of determining an asset’s recoverable amount 

between IFRS and Belgian GAAP. IFRS defines the recoverable 

amount of an asset as the higher of (a) the asset’s fair value less 

cost to sell or (b) its value in use. The value in use is based on 

the discounted cash flows projected to be derived from the 

asset’s continuing use. Belgian GAAP requires the recognition of 

impairment of an asset if its carrying value is projected to 

permanently exceed its recoverable amount, which can be 

determined using undiscounted cash flow estimates. 

As a result, the impairment charges in the consolidated and the 

non-consolidated financial statements for the fiscal year ended 

March 31, 2009, are different, and amounted to JPY 123,259 

million (EUR 939.7 million) and JPY 87,959 million (EUR 670.6 

million), respectively. 

Non-consolidated Financial Statements 

The Company reviewed the carrying value of its investments as 

reflected in the non-consolidated financial statements for the 

fiscal year ended March 31, 2009, prepared in accordance with 

Belgian GAAP. In particular, the Company assessed whether the 

carrying value of each individual investment was in excess of their 

future recoverable amount. The assessment included a review 

and analysis of (a) publicly observed market prices for the publicly 

listed investments, (b) valuation multiples for groups of publicly 

listed, comparable companies, and with respect to the 

consolidated subsidiaries, (c) the projected financial performance 

based on budgets and business plans prepared by their respective 

managements. It should be noted that the future recoverable 

amount of the Company’s consolidated subsidiaries has been 

determined by applying currently applicable valuation multiples to 

the consolidated subsidiaries’ undiscounted projected earnings, 

and that the resulting amounts do not purport to indicate the 

current realizable value of the Company’s investments in 

consolidated subsidiaries. 

The impact of the economic recession on the consolidated 

subsidiaries’ financial performance, together with the Company’s 

stance, which it believes to be conservative, on the timing and the 

extent of the recovery of the global economy, and the current 

market valuations in general and in the industries relevant to the 

Company’s investments in particular, resulted in the recognition 

of impairment charges at March 31, 2009, of JPY 87,959 million 

(EUR 670.6 million) as reflected in the table on the previous page. 

The Company will continue to monitor the recoverable amount of 

its investments and in the event that the reasons underlying the 

recognition of the impairment are no longer valid, the impairment 

charges could be reversed in the future. In addition to the 

impairment above, the Company adjusted the carrying value in its 

subsidiary RHJI Services SA by JPY 6,937 million (EUR 52.9 

million) to reflect its net asset value of JPY 5,156 million (EUR 39.3 

million). RHJI Services SA is a management subsidiary that 

provides advisory services and engages in intra-group financing. 

9

Consolidated Financial Statements 

For purposes of preparing the consolidated financial statements, in accordance with IFRS, as of and for the fiscal year ended March 

31, 2009, and in light of the global economic downturn, the Company analyzed the performance of its consolidated businesses in order 

to determine whether or not there was any indication of impairment of their respective long-lived assets. The analysis included a 

review of the industry perspective, and the impact of lower than expected performance of certain portfolio companies on the 

recoverable amount of goodwill and other long-lived intangible assets. The analysis resulted in an aggregate impairment charge of 

JPY 123,259 million (EUR 939.7 million) for the fiscal year ended March 31, 2009. JPY 95,290 million (EUR 726.5 million) was 

attributable to goodwill and intangible assets and mainly related to Metaldyne and HIT in view of the significant global downturn of the 

automotive industry. Cumulative impairment of goodwill and intangible assets at March 31, 2009, amounted to JPY 136,491 million 

(EUR 1,040.6 million). Total intangible assets at March 31, 2009, amounted to JPY 50,808 million (EUR 387.3 million), compared to JPY 

161,245 million (EUR 1,229 million) at March 31, 2008. In addition to the impairment of goodwill and intangible assets, underutilized 

property, plant and equipment, mainly at Phoenix Seagaia Resort, HIT and Metaldyne, were written down by JPY 27,969 million (EUR 

213.2 million). Finally, the Company recognized an impairment charge of JPY 10,888 million (EUR 83 million) on its investments in 

Shaklee and U-shin. 

The impairment charges related to the consolidated subsidiaries can be broken down as follows: 


Fiscal year ended March 31 2009 

Asahi Tec HIT Niles CME 

Phoenix 

Seagaia 

Resort 

Property, plant and equipment 7,045 6,699 232 - 13,993 27,969 

Goodwill 30,849 6,957 9,770 3,247 - 50,823 

Intangible assets other than goodwill 14,892 25,186 - 4,398 (9) 44,467 

Total 

52,786 38,842 10,002 7,645 13,984 123,259 

All impairment charges referenced in the review of the consolidated subsidiaries’ individual results, relate to the impairment charges 

reflected in the Company’s consolidated financial statements for the fiscal year ended March 31, 2009 as reflected in the table above. 

The allocation of the Invested Capital (excluding cash) per industry as at 

March 31, 2009 is as follows: 

Automotive Components 60% 

Hospitality 10% 

Nutrition 11% 

Financial Services 9% 

Media 5% 

Other 5% 

10


Cash and cash equivalents 

Non-consolidated cash flows for the parent holding company for the fiscal year ended March 31, 2009, can be summarized as follows: 

(In millions) JPY EUR 

Fiscal year ended March 31 2009 2008 2009 2008 

Net cash used in operating activities (7,015) (1,691) (53.5) (12.9) 

Net cash from (used in) investing activities 17,599 (21,299) 134.2 (162.4) 

Net cash used in financing activities (392) (2,329) (3.0) (17.8) 

Net increase (decrease) in cash and cash equivalents 10,192 (25,319) 77.7 (193.0) 

Cash and cash equivalents at the beginning of the fiscal year 50,347 79,887 383.8 609.0 

Effect of exchange rate fluctuation on cash held (1,813) (4,221) (13.8) (32.2) 

Cash and cash equivalents at the end of the fiscal year 58,726 50,347 447.7 383.8 

Non-consolidated cash-flows from investing activities reflected: 

• The proceeds from the sale of D&M and a non-controlling minority investment for JPY 32,145 million (EUR 245.1 million) in 

aggregate; 

• Additional investments in Asahi Tec, Phoenix Seagaia Resort and Shaklee of JPY 9,045 million (EUR 69 million); 

• Funding of the Company’s management subsidiary RHJI Services for JPY 4,158 million (EUR 31.7 million), used to, among other 

things, provide financing to certain consolidated subsidiaries; 

• The formation of SigmaXYZ for JPY 1,085 million (EUR 8.3 million); 

• A new non-controlling investment of JPY 730 million (EUR 5.6 million); 

• The repurchase of 627,247 of its own shares for JPY 536 million (EUR 3.5 million). The Company repurchased the shares to be 

allocated to the Company’s employees under its incentive compensation plan. At March 31, 2009, the Company held 1,145,004 

treasury shares. Subsequent to March 31, 2009, the Company bought an additional 1,122,085 shares as part of the purchase of 2% 

of total outstanding shares, announced on March 17, 2009. 

Total non-consolidated cash of JPY 58,726 million or EUR 447.7 million is predominantly invested in government and government 

backed securities in EUR, USD and JPY. 

11

Asahi Tec Corporation 

• Headquarters: Japan 

• Industry: Automotive Components – Cast Auto Parts Segment 

• Tokyo Stock Exchange ticker: 5606.T 

• Total Shares Outstanding: 476,717,658 

• RHJI ownership as of March 31, 2009: 60.1% (286,314,061 shares) 

• Contribution price per share (March 23, 2005): JPY 250 

• Closing share price on March 31, 2008: JPY 88 


Geographic distribution of revenue 

Overview of Activities 

Asahi Tec (www.asahitec.co.jp) primarily designs, manufactures 

and sells ductile iron cast auto parts for truck and construction 

machinery OEMs, aluminum casting parts for truck and 

passenger car OEMs and aluminum wheels for automobile 

OEMs. Asahi Tec also designs, manufactures and sells 

environmental systems, equipment and development 

technologies used by municipalities and electrical hardware and 

equipment used by electricity generators. 

Revenue by operating segment 

U.S. 36% 

Chassis 30% 

Japan 35% 

Powertrain 31% 

Europe 18% 

Asia (excl. Japan) 6% 

Americas (excl. U.S.) 5% 

Devices 

& Equipment 5% 

General Casting 

& Forging Parts 34% 

Key figures 

Condensed consolidated income statement for the fiscal year ended March 31 (1) 


2009 2008 2009 2008 

Revenue 218,815 315,768 1,668.2 2,407.3 

Gross profit 18,848 29,528 143.7 225.1 

Gross margin 8.6 % 9.4 % 8.6 % 9.4 % 

EBITDA 13,655 24,744 104.1 188.6 

EBITDA margin 6.2 % 7.8 % 6.2 % 7.8 % 

Operating loss (52,294) (25,074) (368.7) (191.2) 

Loss for the year (23,958) (41,059) (182.6) (313.0) 

(1) Excluding the effect of the purchase price allocation carried out in connection with the contribution of the ownership interests to the Company at March 31, 2005. 

Consolidated cash and financial debt for the fiscal year ended March 31 


2009 2008 2009 2008 

Cash 5,350 6,530 40.8 49.8 

Financial debt 79,366 117,457 605.1 895.5 

12


Despite a significant deleveraging of its balance sheet, unprecedented volume declines forced Asahi 

Tec’s US subsidiary Metaldyne into Chapter 11. Asahi Tec also suffered from collapsing demand and is 

likely to breach financial covenants during the fiscal year ending March 31, 2010 

Asahi Tec’s consolidated revenue fell by 30.7% from JPY 315,768 

million during the fiscal year ended March 31, 2008 to JPY 

218,815 million during the fiscal year ended March 31, 2009. The 

global economic recession had a severe impact on Japan’s 

export driven economy. Asahi Tec’s Asian activities experienced 

significant volume declines, particularly driven by decreased 

export of motorcycles to emerging markets and continuously 

falling domestic demand for cars and trucks. Despite increased 

sales of parts for construction machines and electric power 

transmission equipment, Asian consolidated sales fell by 39% 

compared to the previous year. 

In the US, the effect of the downturn was even more devastating. 

U.S. sales at Asahi Tec’s US based subsidiary Metaldyne fell by 

41.4%. Sagging customer confidence and the lack of credit 

availability resulted in continuously falling demand. Metaldyne’s 

main customers shut down production for several weeks in an 

attempt to respond to the contraction of the US auto market that 

ultimately resulted in Chrysler’s and General Motor’s filing for 

Chapter 11 bankruptcy protection. 

During the 2nd and 3rd quarter of the fiscal year ended March 

31, 2009, Metaldyne responded to the decreasing sales by 

continuous adjustment of its cost structure, and was able to 

significantly deleverage its balance sheet following the 

successful tender for most of its outstanding senior and senior 

subordinated bonds with an aggregate principal amount of USD 

361.3 million (JPY 35,621 million). Metaldyne reduced its 

outstanding debt from approximately USD 830.2 million (JPY 

82,529 million) at March 31, 2008, to USD 536.3 million (JPY 

52,878 million), including the cancellation, effective September 

26, 2008, of approximately USD 31.0 million (JPY 3,134 million) of 

secured subordinated notes pursuant to a debt cancellation 

agreement entered into between Chrysler Corporation 

("Chrysler") and Metaldyne. In addition, upon completion of the 

tender offer, Chrysler agreed to cancel the 97,098 Class C 

Preferred shares it held in Asahi Tec with a face value of JPY 

6,082 million. The bond tender was financed by a USD 50 million 

investment from Asahi Tec, funded by the Company’s 

subscription to newly issued shares of Asahi Tec for JPY 4,917 

million, increasing its ownership in Asahi Tec from 45.3% to 

60.18%. In addition, certain of Metaldyne’s leading customers 

provided Metaldyne with USD 60 million funding for the bond 

tender offer, in the form of loans to Metaldyne. From the total 

proceeds of USD 110 million, Metaldyne used USD 60.1 million 

to pay for the tendered bonds. Previously, on July 15, 2008, the 

Company, via a capital subscription of JPY 1,800 million in Asahi 

Tec, also funded a cure of Metaldyne’s breach of financial 

covenants at June 30, 2008. On October 14, 2008, a capital 

injection of JPY 1,051 million by the Company into Asahi Tec 

further supported Metaldyne’s liquidity. 

Throughout the fiscal year ended March 31, 2009, Asahi Tec and 

Metaldyne increased their efforts to maintain profitability 

through cost reductions, plant closures, successfully negotiated 

price revisions and other measures designed to contain the 

effects of continuously falling order volumes, but the 

combination of the unprecedented sales decline and increased 

material prices resulted in a gross profit of JPY 18,848 million 

for the fiscal year ended March 31, 2009, compared to JPY 

29,528 million a year earlier. 

The operating loss for the fiscal year ended March 31, 2009, of 

JPY 52,294 million, was negatively impacted by an impairment 

charge of JPY 49,309 million on certain property, plant and 

equipment and intangible assets, including goodwill, of 

Metaldyne in view of its deteriorated financial performance and 

the uncertainty around its ability to operate as a going concern 

that existed at March 31, 2009 (1) . Excluding impairment losses 

for both years, the operating loss for the fiscal year ended March 

31, 2009, amounted to JPY 2,985 million, compared to an 

operating profit of JPY 4,175 million for the previous fiscal year. 

The impairment losses were partly offset by the gain of JPY 

39,768 million on the redemption of bonds following the 

successful bond tender and the cancellation of debt by Chrysler, 

resulting in a net loss for the fiscal year ended March 31, 2009 of 

JPY 23,958 million, compared to JPY 41,059 million last year. 

Despite Asahi Tec’s continued support and the resulting 

reduction of Metaldyne’s indebtedness, Metaldyne’s financial 

performance was heavily affected by car production in the US 

that continued to fall beyond expectations. Faced with its own 

challenges, Asahi Tec was no longer in a position to further 

support Metaldyne, which on May 27, 2009, filed a voluntary 

petition to reorganize under Chapter 11 of the U.S. Bankruptcy 

Code, shortly after Chrysler, one of its main customers, also 

filed for protection under Chapter 11. 

Given that its assets and capital structure are completely 

ringfenced from Metaldyne, Asahi Tec will now focus on its own 

needs and opportunities. Without Metaldyne, which will be 

deconsolidated, Asahi Tec projects net sales of JPY 60,200 

million and an operating loss of JPY 300 million, based on its 

management forecast prepared under J-GAAP for the fiscal year 

ending March 31, 2010. 

Asahi Tec is likely to breach certain financial covenants under its 

credit agreements in the course of the fiscal year ending March 

31, 2010. Asahi Tec is currently seeking a waiver of covenants 

from its lenders. In the event that Asahi Tec were not successful 

in obtaining such a waiver, it would be in default of its 

obligations under its credit agreements, which would cast 

significant doubt on Asahi Tec’s ability to operate as a going 

concern. 

(1) The total impairment charge recorded in the consolidated financial statements for 

the fiscal year ended March 31, 2009, amounted to JPY 52,786 million as a result 

of an additional impairment loss of JPY 3,477 million recorded by the Company on 

goodwill resulting from the purchase price allocation. 

13

RHJI's purchase agreement to buy certain assets from Metaldyne was not retained by the bankruptcy 

court 

Given that Asahi Tec was not in a position to further support 

Metaldyne as it required focus on its own needs in a 

continuously challenging automotive industry, the Company 

entered into an agreement to purchase a majority of Metaldyne’s 

assets under a court-supervised sales process pursuant to 

Section 363 of the U.S. Bankruptcy Code. 

The purchase agreement was however not approved by the 

bankruptcy court and has terminated on July 27, 2009. Under 

the Section 363 process, interested parties will have an 

opportunity to submit better and higher offers for the Metaldyne 

assets. The Company may elect to participate in the sale auction 

scheduled to be held on August 5, 2009. 

To fund its continuing operations during the restructuring, 

Metaldyne has secured a USD 19.85 million debtor-inpossession 

(DIP) financing facility from certain customers. The 

DIP credit facility will be used for the company's normal working 

capital requirements, including employee wages and benefits, 

supplier payments, and other operating expenses during the 

reorganization process. 

14


15

Honsel International Technologies SA 

• Headquarters: Belgium 

• Industry: Automotive Components – Cast Auto Parts 

Segment 

• Privately Held 

• RHJI ownership as of March 31, 2009: 82 % (1) 


HIT (www.honsel.com) is a leading European supplier of light 

metal products to the automotive and heavy truck industries. HIT 

principally designs, manufactures and sells aluminum and 

magnesium components and assemblies. HIT has four main 

product categories: engine, transmission, suspension and body 

components. HIT has a diverse customer base including a 

Geographic distribution of revenue 

variety of large automobile and truck OEM manufacturers and 

other large OEM suppliers that ship directly to vehicle 

manufacturers. 

HIT competes in the casting, machining and finishing phases of 

automotive light metal components manufacturing. HIT seeks to 

capitalize on key trends in the light metal casting segment of the 

industry including: demand for new materials and technologies 

that reduce the overall weight of vehicles, increased outsourcing 

of light metals components manufacturing by automobile OEMs, 

preference of automobile OEMs for full service global suppliers, 

increased demand for suppliers with the capability to design and 

engineer components and assemblies, and consolidation 

opportunities due to the largely regional and fragmented nature 

of the Light Metals Casting segment. 

Revenue by operating segment 

Die Casting 56% 

Europe 93% 

Permanent Mold 

Casting 17% 

Others 18% 

Americas 7% 

Rolling 1% 

Extrusion 8% 

Key Figures 

Condensed consolidated income statement for the fiscal year ended March 31 


2009 2008 2009 2008 

Revenue 93,577 115,193 713.4 878.2 

Gross profit 1,246 10,454 9.5 79.7 

Gross margin 1.3 % 9.1 % 1.3 % 9.1 % 

EBITDA (2) 1,823 11,425 13.9 87.1 

EBITDA margin 1.9 % 9.9 % 1.9 % 9.9 % 

Operating loss (46,539) (380) (354.8) (2.9) 

Loss from continuing operations (49,267) (2,400) (375.6) (18.3) 

Profit (loss) from discontinued operations (net of income tax) 1,758 (2,768) 13.4 (21.1) 

Loss for the year (47,011) (5,207) (358.4) (39.7) 

(2) Adjusted for non-recurring restructuring costs 



2009 2008 2009 2008 

Cash 1,876 5,194 14.3 39.6 


(1) Ownership in Honsel was reduced to 51 % following Honsel's capital restructuring, which was completed on July 22, 2009. 

16


Plummeting sales and delayed cost rationalization result in standstill agreement 

Starting in August, 2008, and reaching its full scale towards the 

end of the calendar year 2008, the crisis in the European 

automotive industry caused HIT’s revenue to decrease from EUR 

878.2 million during the fiscal year ended March 31, 2008, to 

EUR 713.4 million for the fiscal year ended March 31, 2009. The 

revenue for the fiscal year ended March 31, 2009 included EUR 

50.2 million from Tafime, acquired in December 2007. Excluding 

Tafime for both fiscal years, revenue decreased by 29.8 %. 

HIT’s operating subsidiaries, hereafter collectively referred to as 

Honsel, were unable to adjust their variable costs quickly 

enough to adjust to the rapidly declining order volumes, and 

incurred higher than expected labor costs resulting from delays 

in the implementation of its restructuring program 

“Plan4Growth”. As a result, gross profit amounted to EUR 9.5 

million for the fiscal year ended March 31, 2009, compared to 

EUR 79.7 million during the previous fiscal year. In addition to 

the effects of declining demand and unachieved labor savings, 

increasing costs of energy, maintenance and waste disposal 

caused EBITDA, adjusted for EUR 49 million of non-recurring 

restructuring and other costs, to decrease from EUR 87.1 

million for the fiscal year ended March 31, 2008, to EUR 13.9 

million for the fiscal year ended March 31, 2009. Given the 

significantly deteriorated financial performance and the 

continuing weak economic outlook, HIT recorded an impairment 

loss on certain intangible assets and goodwill for the fiscal year 

ended March 31, 2009 of EUR 199 million. As a result of the 

under-utilization of certain manufacturing equipment, EUR 46.6 

million impairment losses were recognized on tangible assets. 

Excluding all impairment losses, the operating loss for the fiscal 

year ending March 31, 2009, amounted to EUR 109.2 million, 

compared to an operating loss of EUR 2.9 million a year earlier. 

The net loss for the fiscal year ended March 31, 2009, increased 

to EUR 358.4 million, compared to EUR 39.7 million for the fiscal 

year ended March 31, 2008. On December 29, 2008, HIT reached 

several agreements in view of the liquidity shortfall that resulted 

from collapsing demand. HIT’s lenders agreed to a standstill, 

originally until March 31, 2009, but extended twice and currently 

still in place. Furthermore, certain of HIT’s main customers 

provided for additional liquidity and compensation for reduced 

volumes. Finally, the Company provided a financing facility up to 

EUR 20 million, in the form of factoring - and sale and lease 

back arrangements. 

Proposed capital restructuring designed to allow Honsel to overcome the economic crisis and confirm 

its position as a key supplier of light metal components to the automotive industry 

During the standstill, the Company and a committee of HIT’s 

senior lenders agreed to a capital restructuring proposal that 

was approved by HIT’s lenders on May 25, 2009 and completed 

on July 22, 2009. 

As part of the restructuring, the Company invested EUR 50 

million in exchange for a controlling 51% stake in Honsel. The 

remaining 49% of the group is held by Honsel’s former senior 

term lenders following a debt-for-equity swap, which resulted in 

HIT’s and Honsel’s total outstanding secured term debt of 

approximately EUR 510 million being reduced to EUR 140 

million, consisting of EUR 110 million senior term loan and EUR 

30 million mezzanine term loan, all of which is held by Honsel’s 

former senior term lenders. Honsel’s other existing funding 

arrangements, including its EUR 40 million revolving credit 

facility, its EUR 20 million of factoring and leaseback financing 

from RHJI and EUR 30 million from certain of Honsel’s key 

customers and suppliers, will remain in place. 

In the event that Honsel would not be able to secure the 

financing of potential future liquidity needs, the Company further 

committed to a new secured backstop facility of EUR 10 million. 

Following the capital restructuring, the shares of Honsel are no 

longer held by HIT, but by a newly created holding company, 

Shelon Holdings Sarl, registered in Luxembourg, in which the 

Company holds 51 %. 

17

Niles Co., Ltd. 


• Industry: Automotive Components – Electronics Components 

Segment 


• RHJI ownership as of March 31, 2009: 96.4% 


Niles (www.niles.co.jp) manufactures switches for automobiles. 

The switches serve as key components in many vehicle systems 

that are typically developed and assembled by larger, more 

diversified suppliers or by automobile OEMs themselves. Niles’ 

main switch product categories include those related to the 

steering column, doors and power-train/pedal. Niles also 

manufactures sensors for automobiles. Niles’ customers are 

automobile OEMs, such as Nissan and General Motors, and 

suppliers to automobile OEMs. Niles seeks to capitalize on its 

production engineering capability, its quality control, and its 

ability to respond quickly to new design demands from its 

customers. 

Geographical distribution of revenue (single operating segment) 

Japan 75% 

US 17% 

Asia (excl.Japan) 8% 

Key figures 



2009 2008 2009 2008 

Revenue 45,444 59,318 346.5 452.2 

Gross profit 6,040 10,278 46.0 78.4 

Gross margin 13.3 % 17.3 % 13.3 % 17.3 % 

EBITDA 2,846 6,299 21.7 48.0 

EBITDA margin 6.3 % 10.6 % 6.3 % 10.6 % 

Operating profit (loss) (1,265) 2,351 (9.6) 17.9 

Profit (loss) for the year (5,771) 1,887 (44.0) 14.4 




2009 2008 2009 2008 

Cash 2,078 2,957 15.8 22.5 


18


Niles successfully strengthens its capital structure 

During the fiscal year ended March 31, 2009, Niles suffered from 

the US auto market slowdown that gradually expanded to Asia, 

forcing some of Niles’ main customers into reducing and even 

temporarily halting production. In addition to the downturn in the 

automotive industry, Niles saw demand for contact switches 

decrease in a challenging global cellular handset market. Niles’ 

revenue for the fiscal year ended March 31, 2009, consequently 

decreased by 23.4 %, from JPY 59,318 million during the 

previous fiscal year, to JPY 45,444 million. 

Especially in the US, the volume decline was so significant that 

Niles’ US operations ran at negative gross profit margins, 

bringing down the overall gross profit margin from 17.3% during 

the fiscal year ended March 31, 2008 to 13.3% during the fiscal 

year ended March 31, 2009. Niles designed and started the 

implementation of a series of drastic short term restructuring 

measures focused on mitigating the impact from the volume 

shortfall on its financial performance. By the end of March 31, 

2009, Niles had significantly reduced headcount, cut salaries 

and bonuses, and limited capital expenditures. Notwithstanding 

those cost saving measures, Niles reported an operating loss of 

JPY 1,265 million for the fiscal year ended March 31, 2009, 

compared to an operating profit of JPY 2,351 million a year 

earlier. Consequently EBITDA for the fiscal year ended March 

31, 2009, amounted to JPY 2,846 million, down from JPY 6,299 

million a year earlier. In addition to the results reported in the 

table above, the Company recorded an impairment charge of 

JPY 9,770 million on goodwill recorded at the time of the initial 

contribution of Niles to RHJI. 

production levels that are not expected to significantly increase 

during the next twelve months. 

Despite the operational restructuring efforts, Niles faced a 

liquidity shortfall and engaged in discussions with the Company, 

its main customer and its lenders with a view to securing 

sufficient liquidity and strengthening its financial position. On 

May 20, 2009, Niles bolstered its capital structure through a 

total capital injection of JPY 6 billion of which JPY 3.5 billion was 

provided by the Company and JPY 2.5 billion by a third party, 

which resulted in the Company's ownership being reduced from 

96.4% to 77.3%. Part of the proceeds was used to repay JPY 2.5 

billion of short-term debt that was previously secured by a cash 

deposit from the Company. Furthermore, syndicate lenders 

agreed on a refinancing of the existing debt structure with new 

bullet loans maturing in June 2011. 

Further to the short term restructuring measures, Niles decided 

to (a) reduce its manufacturing footprint, mainly in the US, by 

transferring production to Japan and Thailand, (b) further 

reduce headcount and (c) scale down capital expenditure to 

19

Columbia Music Entertainment, Inc. 


• Industry: Media and Entertainment – Music Entertainment 

Segment 



• RHJI ownership as of March 31, 2009: 25.5% (66,503,000 

shares) 

• Contribution price per share (March 23, 2005): JPY 118 




CME (www.columbia.co.jp) is engaged in music production and 

entertainment in Japan. Music production and entertainment is 

the production, marketing and distribution of music. CME seeks 

to capitalize on its substantial music catalog, which generates 

cash flow from the sale of its content and the continuous 

addition of content to the catalog to ensure it remains dynamic, 

both in the high-growth music genres such as Japanese- 

Pop/Rock as well as in Enka, Japanese country music. The 

Columbia brand name is one of the most widely recognized 

brand names in music entertainment in Japan, which helps 

attract new artists. CME has a strong national Japanese sales 

force and established relationships with leading retailers in 

Japan. CME also distributes music from third party labels 

providing both profits and additional marketing and retail 

strength to its operations. 

Key figures 



2009 2008 2009 2008 

Revenue 18,170 18,569 138.5 141.6 

Gross profit 7,061 6,920 53.8 52.8 

Gross margin 38.9 % 37.3 % 38.9 % 37.3 % 

EBITDA (43) (984) (0.3) (7.5) 

EBITDA margin (0.2)% (5.3)% (0.2)% (5.3)% 

Operating loss (693) (1,508) (5.3) (11.5) 

Loss from continuing operations (707) (1,627) (5.4) (12.4) 

Profit from discontinued operations (net of income tax) 188 292 1.4 2.2 

Loss for the year (519) (1,335) (4.0) (10.2) 




2009 2008 2009 2008 

Cash 1,832 2,506 14.0 19.1 

Financial debt 1,457 517 11.1 3.9 

20


The continuous contraction of CME’s music entertainment market requires further structural reform 

under a new management structure 

During the fiscal year ended March 31, 2009, CME reported 

revenue of JPY 18,170 million, compared to JPY 18,569 million a 

year earlier. Excluding sales from Creative Core, acquired in 

November 2007, and contributing for a full fiscal year for the 

first time, CME’s revenue for the fiscal year ended March 31, 

2009, amounted to JPY 15,046 million, down 11.2% compared to 

the previous fiscal year. Increased sales of CME’s custom sales 

business and the growing digital business were offset by 

decreasing sales from J-Pop titles as CME considerably reduced 

the number of J-Pop artists in an attempt to eliminate 

unprofitable business in a shrinking CD market. 

The operating loss of JPY 693 million during the fiscal year 

ended March 31, 2009, compared to JPY 1,508 million a year 

earlier, was favorably affected by the reversal of estimated 

royalty payments (JPY 456 million). CME’s net loss for the fiscal 

year ended March 31, 2009, amounted to JPY 519 million and 

included JPY 434 million restructuring costs associated with 

early termination of artist contracts and retirement allowances. 

business. Finally, CME is implementing a new voluntary 

retirement program and cutting back on its temporary work 

force to reduce staff by 78 people. 

In addition to the net loss reported in the table on the previous 

page, the Company reviewed the recoverable amount of certain 

intangible assets recorded in its consolidated financial 

statements following the purchase price allocation upon the 

contribution of CME in March 2005. In view of the deteriorated 

financial performance, the reduced scale of CME’s business and 

the uncertainty around the economic recovery and the impact 

thereof on CME’s business, the Company recorded an 

impairment charge of JPY 7,645 million in its consolidated 

income statement for the fiscal year ended March 31, 2009, on 

certain intangible assets recognized as a result of the initial 

purchase price allocation. This impairment charge is only 

recorded in the Company’s consolidated financial statements 

and not reflected in CME’s results shown in the table on the 

previous page. 

Throughout the fiscal year ended March 31, 2009, CME 

continued to implement cost rationalization measures to 

mitigate the effects of a declining CD market. Several structural 

reform measures were initiated and will continue to be 

implemented during the fiscal year ending March 31, 2010. 

Among such measures, the number of J-Pop artists was 

drastically reduced and the J-Pop organization was downsized 

accordingly. CME further sharpened its focus on historically 

profitable segments such as Enka music products and future 

growth areas such as digital music and the games business. 

CME rationalized its organizational structure to the scale of its 

business by consolidating its sales-and marketing organization 

and radically downsizing Creative Core’s educational software 

CME’s management expects to return to profitability and 

publicly disclosed forecasts for the fiscal year ending March 31, 

2010, prepared under J-GAAP, which included sales of JPY 

18,500 million, operating profit of JPY 100 million and net profit 

of JPY 400 million. The projected net income includes an early 

lease termination gain of JPY 590 million, associated with 

planned relocation of CME’s head office in September, 2009. 

21

Phoenix Resort K.K. 


• Industry: Hospitality Segment 


• RHJI ownership as of March 31, 2009: 100 % 


Phoenix Seagaia Resort (www.seagaia.co.jp) is a resort complex 

located in Miyazaki Prefecture on Kyushu, the southernmost of 

the main islands of Japan. Miyazaki has a suitable climate for 

year-round outdoor activities. The principal assets of the 

Phoenix Seagaia Resort are situated in a historic 750-acre pine 

forest that extends over 10 kilometers along the Pacific Ocean 

coastline, which is just outside the city of Miyazaki and 20 

minutes from the airport. Phoenix Seagaia Resort includes golf 

courses, lodging facilities, renovated spa (onsen) and fitness 

facilities, one of the largest convention centers in Japan and a 

tennis club. 

Revenue by operating segment (single geographic segment) 

Hotel 76% 

Golf 21% 

Others 3% 

Key figures 



2009 2008 2009 2008 

Revenue 12,327 14,478 94.0 110.4 

Gross profit 1,530 2,260 11.7 17.2 

Gross margin 12.4 % 15.6 % 12.4 % 15.6 % 

EBITDA 297 989 2.3 7.5 

EBITDA margin 2.4 % 6.8 % 2.4 % 6.8 % 

Operating loss (701) (112) (5.3) (0.9) 

Loss for the year (517) (547) (3.9) (4.2) 




2009 2008 2009 2008 

Cash 455 644 3.5 4.9 


22


Reduced foreign travel and a weak domestic tourist market drive hotel occupancy significantly lower 

Phoenix Seagaia Resort recorded revenue of JPY 12,327 million 

for the fiscal year ended March 31, 2009, a decrease of 14.9% 

compared to the previous fiscal year. The global economic 

downturn resulted in deferred spending in all tourist market 

segments. The number of foreign visitors to Japan fell 

drastically and Phoenix Seagaia Resort was particularly exposed 

to the impact of the weak Korean Won on the number of Korean 

visitors. Phoenix Seagaia Resort also saw domestic travel 

reduced significantly as companies cut back on budgets for 

corporate events, which are critical to the occupancy of Phoenix 

Seagaia Resort’s five star hotel. The lower occupancy also 

resulted in a decreasing number of golf rounds. 

Phoenix Seagaia Resort started the implementation of a drastic 

cost rationalization program to mitigate the impact of low sales 

and to ensure compliance with the financial covenants under its 

credit agreements at March 31, 2009. The program reduced 

costs by approximately JPY 1,500 million on an annualized basis, 

and identified several additional actions to address the impact 

from a potential further decline of the resort’s occupancy rates. 

EBITDA for the fiscal year ended March 31, 2009, amounted to 

JPY 297 million, compared to JPY 989 million during the 

previous fiscal year. The decreased hotel occupancy and lower 

average daily rates account for most of the shortfall. 

Furthermore, the Ocean Dome contributed positively to Phoenix 

Seagaia Resort’s overall EBITDA for the first half of the previous 

fiscal year ended March 31, 2008. Although the Ocean Dome was 

loss making, the announcement of the closure had a beneficial, 

non-recurring impact on the number of visitors. The Ocean 

Dome was closed on October 1, 2007, and other attractions, such 

as the newly developed beach concept, have only gradually 

contributed to room sales and will need additional marketing to 

grow into key attraction points for the resort. 

At March 31, 2009, Phoenix Seagaia Resort reviewed the 

recoverable amount of its property, plant and equipment using 

the income approach, which revealed it to be below the carrying 

value by JPY 13,993 million. Of this impairment loss, JPY 13,640 

million is recognized on the asset values resulting from the 

initial purchase price allocation, and therefore only recorded in 

the Company’s consolidated financial statements. 

As a result of the deteriorated financial performance and in 

order to allow Phoenix Seagaia Resort to make scheduled 

repayments under its credit facility, the Company injected JPY 

300 million in June, 2008, JPY 400 million in September, 2008, 

and JPY 300 million in January, 2009. The Company expects to 

make further capital contributions to Phoenix Seagaia Resort 

during the fiscal year ending March 31, 2010, to the extent they 

will result in an equivalent reduction of the Company's exposure 

from the guarantee and the intra-group revolving credit facility. 

Phoenix Seagaia Resort refinances entire debt 

On September 29, 2008, Phoenix Seagaia Resort entered into an 

agreement with its lenders to amend certain terms and 

conditions of its existing credit facility of JPY 7,508 million. The 

term of the amended loan is 3 years. The amendment provides 

for quarterly repayments of JPY 195 million and a bullet 

payment of JPY 5,497 million on September 30, 2011. In addition 

to this amended loan agreement, the Company extended the 

revolving credit facility from JPY 500 million to JPY 1,000 million 

until September 30, 2011. The outstanding balance of this 

intragroup loan at March 31, 2009 amounted to JPY 400 million. 

March 31, 2009, Phoenix Seagaia Resort had already repaid JPY 

390 million of the guaranteed principal, and had outstanding 

financial indebtedness of JPY 7,144 million, compared to JPY 

7,777 at March 31, 2008. 

The Company guarantees the quarterly repayments and the total 

interest up to an aggregate amount of JPY 3,400 million. At 

23

Shaklee Global Group, Inc. 

• Industry: Consumer Products – Nutrition Products Segment 

• Jasdaq Stock Exchange ticker: 8205.Q 



• Contribution price per share (March 23, 2005): JPY 1,269 




Shaklee is a leading provider of premium quality and natural 

nutrition, personal care, household and air and water treatment 

products. Shaklee operates in the United States, Japan, 

Malaysia, Canada and Mexico. The United States is Shaklee’s 

largest market in terms of sales, with Japan as its second 

largest market. Shaklee uses a sales force of self-employed, 

independent distributors to sell its products and has over 

750,000 members and distributors. 

Key figures 

Condensed consolidated income statement for the fiscal year ended March 31 


2009 2008 2009 2008 

Revenue 24,685 27,322 188.2 208.3 

Operating profit 3,652 2,945 27.8 22.5 

EBITDA 4,241 3,499 32.3 26.7 

EBITDA margin 17.2 % 12.8 % 17.2 % 12.8 % 

Profit for the year 1,705 1,441 13.0 11.0 



2009 2008 2009 2008 

Cash 5,273 4,699 40.2 35.8 


Shaklee's revenue for the fiscal year ended March 31, 2009 

amounted to JPY 24,685 million, 9.7% lower than the previous 

fiscal year virtually entirely due to appreciation of the JPY. At 

constant exchange rates, sales declined only 0.9%. Operating 

profit, for the fiscal year ended March 31, 2009 increased 24% to 

JPY 3,652 million from JPY 2,945 million principally due to tight 

management over selling and general administrative expenses 

in all markets. The profit for the fiscal year ended March 31, 

2009 increased 51.6% excluding JPY 120 million benefit from 

changes made to the U.S. Retiree Medical Benefit Plan 

compared to JPY 1,125 million for the previous fiscal year that 

excludes non-recurring pre-tax gains from changes to the U.S. 

pension plan of JPY 846 million partly offset by the accelerated 

amortization of an intangible asset relating to the purchase of 

technology and distribution rights. 

fiscal year ended March 31, 2009 to JPY 23,013 million for the 

fiscal year ending March 31, 2010. Operating profit in 

accordance with J-GAAP is projected to increase from JPY 3,086 

million for the fiscal year ended March 31, 2009, to JPY 3,132 

million, for the fiscal year ending March 31, 2010. 

Based on its management projections under J-GAAP, Shaklee 

expects revenue to decrease from JPY 24,685 million for the 

24


U-shin Ltd. 


• Industry: Automotive Components - Electronics Components 

Segment 




• Acquisition price per share (April 13, 2006): JPY 1,244 




U-shin (www.u-shin-ltd.com) is a company engaged in 

manufacturing and sales of automobile components such as key 

sets, door locks, heater control panels and switches, various 

instruments for farm machinery, construction machinery and 

machine tools, other industrial machinery, and housing 

equipment such as locks for houses, hotels and buildings. 

Key figures 

Condensed consolidated income statement for the fiscal year ended February 28 


2009 2008 2009 2008 

Revenue 70,772 77,963 539.5 594.4 

Operating profit 3,258 3,357 24.8 25.6 

EBITDA 7,343 7,584 56.0 57.8 

EBITDA margin 10.4 % 9.7 % 10.4 % 9.7 % 

Profit (loss) for the year (282) 339 (2.1) 2.6 

Consolidated cash and financial debt for the fiscal year ended February 28 


2009 2008 2009 2008 

Cash 15,997 9,290 122.0 70.8 


As U-shin’s fiscal year ends on November 30, the Company used 

financial information for the twelve months ended February 28, 

2009, compiled from publicly disclosed unaudited quarterly 

financial information, for the purposes of preparing the 

Company’s consolidated financial statements as of and for the 

fiscal year ended March 31, 2009. Financial information for the 

twelve months ended February 28, 2008, has been compiled on 

the same basis for comparative purposes. 

U-shin reported revenue of JPY 70,772 million for the twelve 

months ended February 28, 2009, compared to JPY 77,963 

million for the same period last year, as a result of difficult 

market conditions in both the automotive industry and the 

industrial equipment market. The net loss for the twelve months 

ended February 28, 2009 of JPY 282 million compared to a net 

profit of JPY 339 million for the same period a year earlier, 

which was favorably impacted by gains on the disposal of 

investment securities of JPY 1,136 million. 

Based on its management projections under J-GAAP, and 

following a difficult 1st quarter of the fiscal year ending 

November 30, 2009, U-shin lowered its outlook for the first half 

of the fiscal year, projecting revenue of JPY 24,000 million 

versus JPY 29,000 million previously. U-shin’s full year outlook 

includes revenue of JPY 60,000 million and a break-even net 

result. 

25

PART II 

FINANCIAL STATEMENTS FOR THE FISCAL YEAR 

ENDED MARCH 31, 2009

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL 

CONDITION AND RESULTS OF OPERATIONS FOR THE FISCAL 

YEARS ENDED MARCH 31, 2009 AND 2008 

INTRODUCTION 

Unless otherwise noted herein, RHJ International SA, a Belgian 

limited liability company, is referred to as “RHJI”. RHJ 

International SA and its businesses are referred to collectively 

as the “Company”. 

RHJI is a diversified holding company focused on creating longterm 

value for its shareholders by acquiring and operating 

businesses. RHJI has several controlling and non-controlling 

interests, operating in automotive components, consumer 

electronics, consumer products, hospitality and media and 

entertainment industries. At March 31, 2009, RHJI’s portfolio 

consisted of five controlling ownership interests, three 

investments in associates and several non-controlling minority 

ownership interests. The interests in Asahi Tec, HIT, Niles, CME, 

Phoenix Seagaia Resort and Shaklee, were contributed to RHJI 

on March 31, 2005 in connection with a private placement and a 

global offering of its ordinary shares on Euronext Brussels in 

March 2005. RHJI seeks to enhance the value of these 

businesses through strategic acquisitions and operating 

improvements through its industrial partnership approach. 

ACQUISITIONS 

New investments for the fiscal year ended March 31, 2009, can 

be summarized as follows: 

• On May 9, 2008, RHJI invested JPY 1,085 million in 

SigmaXYZ, a newly formed joint venture in ICT consulting 

with Mitsubishi Corporation; 

• RHJI increased the capital of Asahi Tec by JPY 7,769 million 

for purposes of (a) curing a breach of covenants by its US 

based subsidiary Metaldyne (JPY 1,800 million on July 15, 

2008), (b) providing Metaldyne with additional liquidity (JPY 

1,051 million on October 15, 2008) and (c) funding 

Metaldyne’s bond tender (JPY 4,918 million on November 25, 

2008); 

• On June 20, 2008, September 23, 2008 and in January , 2009, 

RHJI subscribed to new shares of Phoenix Seagaia Resort 

for an aggregate amount of JPY 1,000 million, in order to 

cover scheduled reimbursement of its debt as well as to 

provide liquidity for working capital requirements; 

• RHJI acquired 457,000 additional existing shares of Shaklee 

for an aggregate consideration of JPY 276 million, increasing 

its ownership to 42.5 %. 

28

FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED MARCH 31, 2009 

DISPOSALS 

During the fiscal year ended March 31, 2009, the Company 

systematically reviewed various strategic alternatives for some 

of its holdings which resulted in the following disposals: 

• The Company disposed of a non-controlling minority 

investment for JPY 9,030 million (EUR 68.8 million), initially 

acquired for JPY 5,600 million; 

• On September 4, 2008, the Company closed the sale of D&M 

to K.K. BCJ-2, a corporation owned by investment funds 

advised by Bain Capital Partners, LLC, for cash 

consideration of JPY 23,115 million, yielding a capital gain of 

JPY 12,600 million. 

• Subsequent to March 31, 2009, on July 8, the company sold 

63% of its stake in CIB for JPY 5,235 million (EUR 40.2 

million), representing an absolute return of 107% to the 

initial purchase price. 

RESULTS OF OPERATIONS 

The consolidated income statement for the fiscal year ended 

March 31, 2009, reflected the impact of the economic downturn. 

The automotive industry was particularly hit by the lack of 

customer confidence and tightening consumer credit that 

resulted in the near collapse of two of the world’s largest car 

manufacturers, which filed for bankruptcy protection. The 

Company’s automotive assets suffered the effects of severe and 

rapid volume declines. Beside the steep decline in automotive 

sales, the Company’s other consolidated subsidiaries, Phoenix 

Seagaia Resort and CME, faced equally difficult market 

conditions and saw their sales decrease. 

For purposes of preparing the consolidated financial 

statements, in accordance with IFRS, as of and for the fiscal year 

ended March 31, 2009, and in light of the global economic 

downturn, the Company analyzed the performance of its 

consolidated businesses in order to determine whether or not 

there was any indication of impairment of their respective longlived 

assets. The analysis included a review of the industry 

perspective, and the impact of lower than expected performance 

of certain portfolio companies on the recoverable amount of 

goodwill and other long-lived intangible assets. The analysis 

resulted in an aggregate impairment charge of JPY 123,259 

million for the fiscal year ended March 31, 2009. JPY 95,290 

million was attributable to goodwill and intangible assets and 

mainly related to Metaldyne and HIT. Cumulative impairment of 

goodwill and intangible assets at March 31, 2009, amounted to 

JPY 136,491 million. Total intangible assets at March 31, 2009, 

amounted to JPY 50,808 million, compared to JPY 161,245 

million at March 31, 2008. In addition to the impairment of 

goodwill and intangible assets, underutilized property, plant and 

equipment, mainly at Phoenix Seagaia Resort, HIT and 

Metaldyne, were written down by JPY 27,969 million. Finally, the 

Company recognized an impairment charge of JPY 10,888 

million on its investments in Shaklee and U-shin. 

Revenue for the fiscal year ended March 31, 2009 amounted to 

JPY 397,300 million, compared to JPY 550,066 million for the 

previous fiscal year, a 27.8% decrease, illustrating the severity 

of the economic downturn that particularly affected the 

Company’s consolidated automotive subsidiaries. 

29

Gross profit for the fiscal year ended March 31, 2009 amounted 

to JPY 34,820 million, representing 8.8% of revenue, compared 

to 11.1% for the fiscal year ended March 31, 2008. The decrease 

in gross profit margin is driven by the significant decline in 

production volumes of the car manufacturers and the inability to 

reduce variable costs accordingly. 

Selling, general and administrative expenses amounted to JPY 

47,961 million for the fiscal year ended March 31, 2009, 

compared to JPY 52,878 million during the previous fiscal year. 

The selling, general and administrative expenses partly 

reflected the impact from ongoing restructuring efforts that 

were deployed towards the end of the fiscal year ended March 

31, 2009, including at the level of the Company’s operating cost 

structure, which is being gradually reduced to approximately 

JPY 3,500 million, compared to JPY 4,935 million for the fiscal 

year ended March 31, 2009. 

Other income and expenses amounted to JPY 11,041 million for 

the fiscal year ended March 31, 2009, compared to JPY 4,594 

million during the previous fiscal year. The increase mainly 

resulted from non-recurring restructuring expenses of JPY 

5,118 million at HIT and Metaldyne and JPY 1,403 million losses 

on disposal of certain of Metaldyne’s assets. 

Loss from operations for the fiscal year ending March 31, 2009 

of JPY 154,159 million, included amortization and impairment 

charges of JPY 123,259 million of which JPY 38,096 million were 

recognized in the consolidated financial statements only and 

which are not reflected in the individual consolidated 

subsidiaries’ income statements presented in Part I of this 

Annual Report. Excluding those non-cash charges for both 

periods, the operating loss of JPY 30,900 million for the fiscal 

year ended March 31, 2009, compared to an operating loss of 

JPY 4,662 million for the fiscal year ended March 31, 2008, again 

clearly reflecting the magnitude of the impact the economic 

recession had on the operating performance across all 

consolidated subsidiaries. 

As a result of the capital restructuring of Honsel, completed in 

July, 2009, and Metaldyne's filing for Chapter 11 bankruptcy 

protection, the Company will record significant gains associated 

with the waiver of Honsel’s debt and the deconsolidation of 

Metaldyne. These gains will be recorded in the fiscal year 

ending March 31, 2010, and are currently estimated at 

approximately JPY 57 billion or EUR 434.5 million. 

Net financial income of JPY 15,269 million for the fiscal year 

ended March 31, 2009, included (a) a gain of JPY 30,552 million 

following Metaldyne’s bond tender, (b) a gain of JPY 3,134 

million resulting from the agreement between Chrysler and 

Metaldyne to cancel USD 31.0 million of Metaldyne’s secured 

subordinated notes, (c) the gain of JPY 6,082 million from the 

cancelation of some of the preferred C shares at Asahi Tec and 

(d) a gain of JPY 3,370 million on the sale of a non-controlling 

minority investment. These gains were offset by financial costs 

including (a) net interest expense of JPY 19,154 million from 

consolidated subsidiaries, (b) net foreign exchange losses of JPY 

7,345 million, and (c) JPY 1,045 million of fair value adjustments 

on certain financial assets. Last year, financial costs amounted 

to JPY 32,881 million, and included (a) interest expense of JPY 

22,301 million, (b) foreign currency exchange losses of JPY 7,438 

million and (c) the write-off of previously deferred financing fees 

of JPY 2,526 million. 

Income tax benefit for the fiscal year ended March 31, 2009 

amounted to JPY 6,232 million, compared to JPY 186 million for 

the previous fiscal year, and mainly resulted from the reversal of 

deferred tax liabilities of JPY 7,761 million following the 

impairment of certain tangible and intangible assets. 

Discontinued operations reflect D&M and HIT’s Canadian 

operations. The result from D&M includes the net loss of JPY 

999 million from operations for the six months ended September 

30, 2008 and the gain on disposal of JPY 11,073 million. The gain 

on disposal as reflected in the Company’s consolidated income 

statement consists of the gain of JPY 12,600 million over the 

acquisition cost less JPY 1,527 million of income contributed by 

D&M to consolidated reserves from April 1, 2005 through the 

date of effective disposal. The gain from the liquidation of HIT’s 

Canadian subsidiary, Amcan, amounted to JPY 1,918 million. The 

breakdown of discontinued operations for the fiscal years ended 

March 31, 2009 and 2008 is as follows: 

(in JPY millions) 2009 2008 

Revenue 49,553 120,206 

Cost of sales (30,372) (76,140) 

Gross profit 19,181 44,066 

Selling, general and administrative expenses (17,948) (36,817) 

Other income (expenses) (1,502) (4,333) 

Gain on sale 12,991 - 

Profit from operations 12,722 2,916 

Net financial expense (729) (1,090) 

Share of loss of equity accounted investees 

(net of income tax) 

- (55) 

Profit before tax 11,993 1,771 

Income tax expense (1) (2,948) 

Profit (loss) for the period 11,992 (1,177) 

Basic and diluted earnings per share (in JPY) 142 (14) 

Loss for the period ended March 31, 2009 amounted to JPY 

131,271 million, of which JPY 116,043 million is attributable to 

the equity holders of the parent company, compared to JPY 

33,221 million for the fiscal year ended March 31, 2008. JPY 

10,598 million of losses attributable to the minority 

shareholders of HIT and Asahi Tec were attributed to the equity 

holders of the parent pursuant to the provisions of IAS 27 that 

prevent losses to be allocated to the minority shareholders, 

except if they would have a binding obligation to cover such 

losses. 

30


LIQUIDITY AND CAPITAL 

RESOURCES 

Debt 

Consolidated financial debt at March 31, 2009 amounted to JPY 

189,011 million, compared to JPY 228,148 million on March 31, 

2008. The decrease primarily resulted from (a) the successful 

bond tender at Metaldyne, reducing debt by JPY 30,422 million, 

net of customer loans, (b) the cancellation of JPY 3,133 million 

senior subordinated notes of Metaldyne held by Chrysler and (c) 

the cancellation of JPY 6,082 million of preferred shares of Asahi 

Tec, also held by Chrysler. 

Consolidated financial debt at March 31, 2009 and March 31, 

2008 can be summarized as follows: 

Asahi Tec 

At March 31, 2009, Asahi Tec had JPY 79,366 million in 

indebtedness outstanding, of which JPY 52,878 million at its US 

subsidiary Metaldyne. The decrease in total indebtedness by JPY 

38,091 million compared to March 31, 2008, mainly resulted 

from (a) Metaldyne’s successful tender for JPY 30,422 million, 





The bond tender was financed by a USD 50 million investment 

from Asahi Tec, funded by RHJI’s subscription to newly issued 

shares of Asahi Tec for JPY 4,917 million, increasing its 

ownership in Asahi Tec from 45.3% to 60.18%. In addition, 

certain of Metaldyne’s leading customers provided Metaldyne 

with USD 60 million funding for the bond tender offer, in the 

form of loans to Metaldyne. From the total proceeds of USD 110 

million, Metaldyne used USD 60.1 million to pay for the tendered 

bonds. 

Although as of March 31, 2009, Metaldyne was in compliance 

with the financial covenants of the term, revolving and letter of 

credit based or synthetic facilities, it defaulted on a payment of 

interest that fell due under its term loan and entered into a 

forbearance agreement with its lenders until May 30, 2009. 

Despite this forbearance agreement and Asahi Tec’s continued 

support and the resulting reduction of Metaldyne’s 

indebtedness, Metaldyne’s financial performance was heavily 

affected by car production in the US that continued to fall beyond 

expectations. Faced with its own challenges, Asahi Tec was no 

longer in a position to further support Metaldyne, which on May 

27, 2009, filed a voluntary petition to reorganize under Chapter 

11 of the U.S. Bankruptcy Code, shortly after Chrysler, one of its 

main customers, also filed for protection under Chapter 11. 

Excluding Metaldyne, Asahi Tec had JPY 26,488 million in 

indebtedness outstanding at March 31, 2009 compared to JPY 

34,929 million at March 31, 2008, the decrease mainly resulting 

from the above mentioned cancellation by Chrysler of preferred 

shares worth JPY 6,082 million. Asahi Tec’s indebtedness 

included (a) JPY 15,356 million senior credit facilities, (b) JPY 

4,000 million subordinated bank debt, (c) JPY 1,652 million 

leasing obligations and (d) JPY 5,203 million preferred securities 

classified as debt issued to former holders of Metaldyne notes. 

Excluding Metaldyne, Asahi Tec’s effective interest rates on its 

consolidated borrowings under its senior and subordinated 

credit facilities at March 31, 2009 were 2.75% and 4.66% 

respectively. 

Asahi Tec is likely to breach certain financial covenants under its 

credit agreements in the course of the fiscal year ending March 

31, 2010. Asahi Tec is currently seeking a waiver of covenants 

from its lenders. In the event that Asahi Tec were not successful 

in obtaining such a waiver, it would be in default of its obligations 

under its credit agreements, which would cast significant doubt 

on Asahi Tec’s ability to operate as a going concern. 

31

HIT 

At March 31, 2009, HIT had outstanding indebtedness of EUR 

546.1 million (JPY 71,631 million) compared to EUR 467.5 million 

(JPY 61,326 million) at March 31, 2008. 

The credit facilities at March 31, 2009, included EUR 317.5 

million senior and EUR 99.5 million mezzanine facilities, EUR 

33.4 million revolving facility and a EUR 90.8 million PIK 

(Payable in Kind) facility. On December 29, 2008, HIT reached 

several agreements in view of the liquidity shortfall that resulted 

from collapsing demand. HIT’s lenders agreed to a standstill, 

originally until March 31, 2009, but extended twice. 

Furthermore, certain of HIT’s main customers and a key 

supplier provided additional liquidity of EUR 30 million and 

compensation for reduced volumes. Finally, RHJI provided a 

secured financing facility up to EUR 20 million, in the form of 

factoring and sale and lease back arrangements. 



was approved by HIT’s lenders on May 25, 2009 and was 

completed on July 15, 2009. As part of the restructuring, the 

Company invested EUR 50 million in exchange for a controlling 

51% stake in Honsel. The remaining 49% of the group is held by 

Honsel’s former senior term lenders following a debt-for-equity 

swap, which resulted in HIT’s total outstanding secured term 

debt of approximately EUR 507.8 million being reduced to EUR 

140 million, consisting of EUR 110 million senior term loan and 

EUR 30 million mezzanine term loan, all of which are held by 

Honsel’s former senior term lenders. Honsel’s existing EUR 40 

million revolving credit facility, as well as EUR 50 million of 

financing from the Company and certain of Honsel’s key 

customers and suppliers, remained in place. 

Niles 

At March 31, 2009, Niles had JPY 28,326 million of indebtedness 

outstanding on a consolidated basis, compared to JPY 27,741 

million a year earlier The credit facilities included senior term 

loans (JPY 10,455 million), revolving loans (JPY 7,997 million), an 

unsecured bullet loan (JPY 2,167 million), finance leases (JPY 

2,245 million), a bullet loan secured by a cash deposit from RHJI 

(JPY 2,500 million) and non-bank debt from a major stakeholder 

(JPY 2,500 million). 

On May 20, 2009, Niles bolstered its capital structure through a 

total capital injection of JPY 6,000 million of which JPY 3,500 

million was provided by the Company and JPY 2,500 million by 

the major stakeholder that had provided financing of JPY 2,500 

million previously. Part of the proceeds was used to repay JPY 

2,500 million of short-term debt that was secured by a cash 

deposit from RHJI, and the major stakeholder’s loan of JPY 

2,500 million. Furthermore, syndicate lenders agreed on a 

refinancing of the existing debt structure, of which JPY 7,566 

million was outstanding at March 31, 2009, with new bullet loans 

maturing in June 2011. 

The interest rates on Honsel’s new senior term are determined 

as Euribor plus 5%. According to the terms of the new senior 

credit, Honsel must ensure that, during a period of three years 

after the closing date, it has hedging arrangements in place to 

cause at least 66.66% of the outstanding amounts under the 

senior debt and the Customer Financing to bear interest at a 

fixed or capped rate.The new mezzanine facility will pay Euribor 

+ 5% cash interest and 5% PIK interest. Honsel may at any time 

during the life of the Mezzanine Facility elect to have all interest 

capitalized at the end of each interest period, provided that, 

following the exercise of such election, interest shall accrue at a 

fixed rate of 16.00% PIK per annum. 

32


Phoenix Seagaia Resort 









until September 30, 2011. The outstanding balance of this intragroup 

loan at March 31, 2009 amounted to JPY 400 million. The 

Company guarantees the quarterly repayments and the total 

interest up to an aggregate amount of JPY 3,400 million. The 

interest rate is based on the three month Libor plus a margin 

ranging from 260 to 410 basis points, depending on the level of 

reported EBITDA. At March 31, 2009, Phoenix Seagaia had 

already repaid JPY 390 million of the guaranteed principal, and 

had outstanding financial indebtedness of JPY 7,144 million, 

compared to JPY 7,777 at March 31, 2008. 

More detailed information on the Company’s interest-bearing 

loans and borrowings is included in note 25 to the Consolidated 

Financial Statements. 

Cash Flows 

Consolidated cash flow from investing activities of continuing 

operations for the fiscal year ended March 31, 2009, included: 

a) the proceeds from the sale of assets, including D&M and a 

non-controlling minority investment (JPY 33,196 million); 

b) dividends received amounting to JPY 916 million; 

c) investments of JPY 3,153 million, including JPY 1,085 million 

in the newly formed joint venture in IT consulting with 

Mitsubishi Corporation; and 

d) net capital expenditures of JPY 22,885 million. 

Cash flow from financing activities for the fiscal year ended 

March 31, 2009, mainly reflected the: 

a) increase of HIT’s debt by JPY 7,711 million resulting from (a) 

liquidity provided by certain of its customers and (b) the full 

draw down of the revolving credit facility; 

b) new borrowings at Metaldyne of JPY 8,697 million, primarily 

from customers to fund the bond tender; 

c) draw down by CME of JPY 1,000 million on a revolving 

facility; 

d) the payment of JPY 6,203 million for Metaldyne tendered 

bonds; 

e) scheduled repayments of JPY 2,936 million by Asahi Tec; 

f) the repurchase of the Company’s own shares (JPY 536 

million). 

33

PRINCIPAL RISKS AND 

UNCERTAINTIES 

Risks associated with strategy and 

operations 

The Company, as any commercial enterprise, faces risks and 

uncertainties in its operations, financial performance, business 

strategy, structure and management. 

Strategic risk 

The availability of opportunities for additional acquisitions and 

investment is uncertain from time to time due to competition 

and macro-economic, political, social and market conditions. 

The Company may not be able to successfully execute the 

acquisition component of its business strategy because of 

difficulties in identifying, acquiring, integrating or financing 

acquisitions, or unanticipated problems, which could negatively 

affect the Company’s prospects, cause its growth to decline and 

increase its losses. The Company's ability to finance 

acquisitions and refinance existing debt of its portfolio holdings 

may be significantly impaired by the restricted availability of 

credit as a result of the global financial crisis. As the Company’s 

strategy also includes purchasing non-controlling or minority 

interests in public and private companies and making coinvestments 

in transactions led by third parties, such purchases 

or co-investments could be material and may involve relatively 

more risks due to its lack of control and may materially 

adversely affect the Company’s financial condition and results of 

operations. 

Operational risk 

The Company’s business strategy includes the acquisition of 

interests in financially distressed companies and the incurrence 

of significant levels of debt by such companies. Improving the 

performance of such companies typically takes time, the length 

of which may increase loss from operations and net loss. The 

Company has experienced losses from operations and net 

losses since incorporation and many of its portfolio holdings 

have experienced such losses in recent years. The Company 

may continue to incur losses and its businesses may continue to 

have risks associated with high levels of debt. 

Execution risk 

The Company may not be able to successfully implement its 

turnaround strategy for portfolio holdings that it owns or may 

acquire due to specific risks and uncertainties relating to each 

company and to circumstances arising from macro-economic, 

political, social and market conditions. For the fiscal year ended 

March 31, 2009, approximately 60% of RHJI’s total invested 

capital was attributable to four businesses in the automotive 

components industry and further volatility or weakness in that 

industry may continue to materially adversely affect the 

Company’s financial condition and results of operations. 

The Company also depends on a limited number of senior 

management and investment professionals and their departure 

from, or part-time commitment to, the Company, or the 

Company’s inability to attract or retain suitable executives could 

adversely affect the Company’s ability to execute its business 

strategies and growth. 

Other risks 

The Company and its portfolio holdings each face a combination 

of risks and uncertainties including (i) strategic risks related to 

macro-economic and market conditions, corporate and brand 

reputation, industry focus and business structure, (ii) 

operational risks (including in the highly competitive automotive 

components industry) related to competition, innovation, 

changing customer demand and customer satisfaction, supply 

and cost of raw materials, production and distribution, 

management resources, labor relations, intellectual property, 

product safety and liability, IT infrastructure, occupational health 

and safety, environmental protection, asset and data security 

and disaster recovery and (iii) financial risks related to levels of 

indebtedness, treasury, tax and audit, accuracy of forecasting 

and budgeting, timeliness of reporting, integration and 

compliance with accounting standards and use of financial 

management tools such as hedging or derivative strategies. 

The Company generally relies on the individual businesses’ risk 

assessment and monitoring programs to manage the exposure 

to these and other risks. These programs have been designed 

based on the specific nature and size of the individual 

businesses’ activity. While the Company monitors these 

programs and attempts to mitigate the negative effects from any 

of these risks through its representation on the businesses’ 

Boards of Directors and through the implementation of certain 

reporting mechanisms, the Company may face negative 

consequences from inadequate risk assessment and ineffective 

control systems of risk detection and prevention at the level of 

each of the individual businesses. 

34


Specific risks related to RHJI 

Interest rate risk 

Beside their negative impact in connection with the borrowing 

activities of the Company’s businesses described in note 30 to 

the consolidated financial statements, increasing interest rates 

may have a negative impact on the market valuation of certain 

Company assets due to their impact on discount rates and/or 

market multiples. 

Currency exchange rate risk 

Beside the translation and transaction risk arising from changes 

in currency exchange rates described in note 30 to the 

consolidated financial statements, RHJI’s Euro denominated 

share price is exposed to changes in the exchange rate between 

the Euro and the Japanese Yen as a significant portion of the 

Company’s assets are located in Japan and have book values 

denominated in Japanese Yen. 

Liquidity risk 

At March 31, 2009, RHJI had approximately JPY 58.7 billion 

available to pursue its business strategy and had no 

indebtedness. RHJI’s businesses have regular recourse to 

independent indebtedness by obtaining credit lines on their own 

merits. Except for an amount up to JPY 3,400 million related to 

the debt of Phoenix Seagaia Resort and certain pledges of 

shares as disclosed in note 25 to the consolidated financial 

statements and a commitment of EUR 10 million to fund a 

backstop credit facility to the benefit of Honsel, the businesses 

and their lenders generally do not benefit from any guarantee 

from RHJI. Although RHJI believes it can ensure sufficient 

liquidity to pursue its acquisition strategy, any shortage thereof 

might result in the disposal of certain businesses at unfavorable 

conditions. 

Risk related to the stock market 

Being listed on Euronext Brussels, RHJI is subject to Belgian 

legislation and regulation regarding, among others, financial, 

governance and other disclosure, internal controls and insider 

trading. As a result, it will continue to invest necessary 

resources to comply with evolving laws, regulations and 

standards and manage its risks related to its stock exchange 

Further information about risks is provided in note 30 to the 

Consolidated Financial Statements. The risks and uncertainties 

described in this Annual Report or in information available on 

RHJI’s website are not the only ones that the Company faces. 

There may be additional risks of which the Company is unaware, 

or risks that the directors now believe to be immaterial, but 

which could turn out to have a material adverse effect. 

35

CONSOLIDATED STATEMENT OF INCOME 

FOR THE FISCAL YEARS ENDED MARCH 31 

(in JPY millions) Note 2009 2008 

Continuing operations 

Revenue 9 397,300 550,066 

Cost of sales (362,480) (488,741) 


Selling, general and administrative expenses (47,961) (52,878) 

Amortization of intangible assets 16 (6,718) (8,515) 

Impairment of property, plant, equipment and intangible assets 12 (123,259) (29,444) 

Other income and expenses 10 (11,041) (4,594) 

Loss from operations (154,159) (34,106) 

Finance income 13 53,969 5,869 

Finance expenses 13 (38,700) (32,881) 

Net financial income (expense) 13 15,269 (27,012) 

Share of profit (loss) of equity accounted investees (net of income tax) 17 (10,605) 858 

Loss before income tax (149,495) (60,260) 

Income tax benefit 14 6,232 186 

Loss from continuing operations (143,263) (60,074) 

Discontinued operations 

Profit (loss) from discontinued operations (net of income tax) 7 11,992 (1,177) 

Loss for the period (131,271) (61,251) 

Attributable to: 

Equity holders of the Company (116,043) (33,221) 

Minority interest (15,228) (28,030) 


Earnings per share (in JPY) 

Basic and diluted 24 (1,378) (390) 

Basic and diluted from continuing operations 24 (1,522) (369) 

36


CONSOLIDATED STATEMENT OF RECOGNIZED INCOME AND 

EXPENSE FOR THE FISCAL YEARS ENDED MARCH 31 


Foreign exchange translation differences (8,165) (3,168) 

Cash flow hedges (1,064) 21 

Net change in fair value of available for sale financial assets (5,053) 6,646 

Net change in fair value of available for sale financial assets transferred to profit or loss (3,314) - 

Others (4) (31) 

Income tax on income and expense recognized directly in equity 14 327 (67) 

Income and expense recognized directly in equity (17,273) 3,401 


Total recognized income and expense for the period 23 (148,544) (57,850) 


Equity holders of the Company (129,236) (28,957) 

Minority interest (19,308) (28,893) 

Total recognized income and expense for the period (148,544) (57,850) 

37

CONSOLIDATED BALANCE SHEET AS AT MARCH 31 


Assets 

Property, plant and equipment 15 142,562 192,646 

Intangible assets 16 50,807 161,245 

Investments in equity accounted investees 17 12,305 22,321 

Other investments 18 5,857 23,003 

Deferred tax assets 19 4,998 3,934 

Others 3,967 2,579 

Total non-current assets 220,496 405,728 

Inventories 20 25,712 37,736 

Trade and other receivables 21 37,508 74,088 

Tax assets 1,109 1,141 

Cash and cash equivalents 22 72,336 72,523 

Others 456 774 

Total current assets 137,121 186,262 

Assets classified as held for sale - 81,034 

Total assets 357,617 673,024 

Equity 

Share capital 88,491 88,491 

Share premium 91,334 91,334 

Reserves 18,604 31,743 

Retained earnings (158,109) (44,670) 

Total equity attributable to equity holders of the Company 40,320 166,898 

Minority interest 7,146 38,328 

Total equity 23 47,466 205,226 

Liabilities 

Loans and borrowings 25 93,777 196,769 

Employee benefits 26 29,033 33,731 

Provisions 28 2,711 3,402 

Deferred tax liabilities 19 17,002 24,919 

Trade and other payables 29 1,040 1,776 

Others 2,255 3,050 

Total non-current liabilities 145,818 263,647 

Bank overdrafts 25 1 65 

Loans and borrowings 25 95,233 31,314 

Trade and other payables 29 61,708 97,536 

Provisions 28 5,829 3,611 

Tax liabilities 983 5,541 

Others 579 7,810 

Total current liabilities 164,333 145,877 

Liabilities classified as held for sale - 58,274 

Total liabilities 310,151 467,798 

Total equity and liabilities 357,617 673,024 

38


CONSOLIDATED STATEMENT OF CASH FLOWS 

FOR THE FISCAL YEARS ENDED MARCH 31 


Continuing operations 

Operating activities 

Loss from continuing operations (143,263) (60,074) 

Adjustments for: 

Depreciation 15 27,560 29,275 

Amortization of intangible assets 16 6,718 8,136 

Impairment losses on intangible assets 12 and 16 95,290 28,449 

Impairment losses on property, plant and equipment 12 and 15 27,969 - 

Gain on sale of available for sale financial assets (3,301) - 

Net financial expense 13 21,082 20,463 

Share of profit (loss) of equity accounted investees 17 10,605 (858) 

Loss on sale of property, plant and equipment 1,354 1,580 

Sale of discontinued operations - 1,837 

Equity-settled share-based payment transactions 27 1,109 841 

Income tax benefit 14 (6,232) (213) 

Debt extinguishments 25 (39,759) - 

Others 2,753 1,100 

Operating profit before changes in working capital 1,885 30,536 

Change in inventories 8,588 (1,132) 

Change in trade and other receivables 29,354 9,221 

Change in trade and other payables (33,855) (1,971) 

Change in employee benefits (1,417) (3,999) 

Other changes in working capital (3,730) 1,845 

Cash generated from the operations 825 34,500 

Interest paid (9,755) (16,354) 

Income tax benefit (3,283) (4,571) 

Net cash from (used in) operating activities (12,213) 13,575 

Investing activities 

Proceeds from sale of property, plant and equipment 728 1,060 

Proceeds from sale of subsidiary, net of cash disposed 7 23,115 132 

Proceeds from sale of investments 18 9,030 - 

Acquisition of property, plant and equipment 15 (22,323) (26,695) 

Acquisition of intangibles 16 (1,290) (291) 

Acquisition of investments (3,153) (2,208) 

Acquisition of subsidiary, net of cash acquired (36) (14,481) 

Dividends received 916 434 

Others 443 5 

Net cash from (used in) investing activities 7,430 (42,044) 

Financing activities 

Repayments of bonds (6,472) (759) 

Proceeds from (repayments of) borrowings 25 15,419 (269) 

Payment of finance lease liabilities 25 (1,489) (1,036) 

Payment of transaction costs (32) (2,648) 

Payment of dividends (8) (36) 

Repurchase of treasury shares 23 (536) (2,332) 

Others 804 1,926 

Net cash from (used in) financing activities 7,686 (5,154) 

Net increase (decrease) in cash and cash equivalents 2,903 (33,623) 

Cash and cash equivalents at April 1 72,458 106,570 

Effect of exchange rate fluctuations on cash held (3,026) (489) 

Cash and cash equivalents at March 31 72,335 72,458 

Discontinued operations 7 

Net cash from (used in) operating activities (6,037) 2,671 

Net cash used in investing activities (1,058) (10,922) 

Net cash from financing activities 7,288 5,200 

Net increase (decrease) in cash and cash equivalents 193 (3,051) 

Cash and cash equivalents at April 1 (181) 2,981 

Effect of exchange rate fluctuations on cash held (12) (111) 

Cash and cash equivalents at March 31 - (181) 

TOTAL 

Net increase (decrease) in cash and cash equivalents 3,096 (36,674) 

Cash and cash equivalents at April 1 72,277 109,551 

Effect of exchange rate fluctuations on cash held (3,038) (600) 

Cash and cash equivalents at March 31 22 72,335 72,277 

39

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 

Contents 

Page 

1. Reporting entity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 

2. Basis of preparation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 

3. Significant accounting policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 

4. Determination of fair values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 

5. Use of estimates and judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 

6. Segment reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 

7. Discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 

8. Acquisitions of subsidiaries and minority interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 

9. Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 

10. Other income and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 

11. Personnel expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 

12. Impairment of property, plant, equipment and intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 

13. Finance income and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 

14. Income tax benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 

15. Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 

16. Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 

17. Investments in equity accounted investees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 

18. Other investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 

19. Deferred tax assets and liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 

20. Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 

21. Trade and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 

22. Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 

23. Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74 

24. Earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 

25. Loans and borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 

26. Employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 

27. Share based payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 

28. Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 

29. Trade and other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85 

30. Financial risk management and related instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86 

31. Operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94 

32. Capital commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94 

33. Contingencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94 

34. Related parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94 

35. Group entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 

36. Subsequent events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98 

37. Auditor’s fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98 

40


1. REPORTING ENTITY 

RHJ International SA (“RHJI”) is a company incorporated under 

the laws of Belgium, having its registered offices at Avenue 

Louise, 326 at 1050 Brussels. The consolidated financial 

statements for the year ended March 31, 2009 comprise RHJI, its 

subsidiaries and its businesses accounted for under the equity 

method (together referred to as the “Company”). 

The Company is involved in the following businesses 

• Automotive 

- auto cast parts components with Asahi Tec Corporation 

("Asahi Tec") and Honsel International Technologies SA 

("HIT"); and 

- electronic components with Niles Co. Ltd. ("Niles") and 

U-shin Ltd. ("U-shin"). 

• Media and entertainment with Columbia Music 

Entertainment, Inc. (“CME”) in the music industry. 

• Hospitality with Phoenix Resort KK (“Phoenix Seagaia 

Resort”). 

• Consumer products with Shaklee Global Group Inc. 

("Shaklee"). 

• ICT consulting services with SigmaXYZ Inc. ("SigmaXYZ"). 

The financial statements were authorized for issue by the Board 

of Directors on July 22, 2009. 

2. BASIS OF PREPARATION 

2.1. Statement of compliance 

The consolidated financial statements have been prepared in 

accordance with International Financial Reporting Standards 

(“IFRS”) as adopted by the European Union up to March 31, 

2009. The Company was not obliged to apply any European 

carve-outs from IFRS, meaning that the financial statements 

fully comply with IFRS. The Company has not applied any 

standards and interpretations issued up to March 31, 2009, but 

with an effective date after March 31, 2009. Certain amounts of 

the fiscal year ended March 31, 2008 have been reclassified to 

conform to the presentation of the fiscal year ended March 31, 

2009, resulting from new presentation requirements. 

The accounting standards applied in the consolidated financial 

statements for the year ended March 31, 2009 are consistent 

with those used to prepare the consolidated financial statements 

for the year ended March 31, 2008. 

2.2. Functional and presentation 

currency 

The financial statements are presented in Japanese Yen ("JPY") 

which is the functional currency of the Company, rounded to the 

nearest million. 

2.3. Basis of measurement 

The financial statements are prepared on the historical cost 

basis except for derivative financial instruments, investments 

held for trading and available for sale investments which are 

stated at fair value. The non-current assets held for sale are 

measured at the lower of their carrying value and fair value less 

cost to sell. Investments in equity instruments or derivatives 

linked to and to be settled by delivery of an equity instrument are 

stated at cost when such equity instrument does not have a 

quoted market price in an active market and for which other 

methods of reasonably estimating fair value are clearly 

inappropriate or unworkable. Recognized assets and liabilities 

that are hedged are stated at fair value in respect of the risk that 

is hedged. 

The accounting policies set out below have been applied 

consistently to all periods presented in the financial statements. 

The consolidated financial statements are presented before the 

effect of the profit appropriation of RHJI which will be proposed 

to the shareholders at the Annual Shareholders’ Meeting. 

41

3. SIGNIFICANT ACCOUNTING 

POLICIES 

3.1. Basis of consolidation 

3.1.1. Subsidiaries 

Subsidiaries are entities controlled by RHJI. Control exists when 

RHJI has the power, directly or indirectly, to govern the financial 

and operating policies of an entity so as to obtain benefits from 

its activities. Control is presumed to exist when RHJI, directly or 

indirectly through subsidiaries, owns more than half of the 

voting power of an entity unless in exceptional circumstances it 

can be clearly demonstrated that such ownership does not 

constitute control. In assessing control, potential voting rights 

that presently are exercisable or convertible are taken into 

account. Companies of which the Company holds, directly or 

indirectly, the majority of the voting rights are fully consolidated. 

Companies that are less than 50 % owned such as CME in which 

the Company has a de facto control (power to govern the 

financial and operating policies and obtain benefits from its 

activities), are consolidated using the same method. 

The financial statements of all subsidiaries are included in the 

consolidated financial statements from the date that control 

commences until the date that control ceases. 

3.1.2. Associates 

Associates are those entities in which RHJI has significant 

influence, but not control, over the financial and operating 

policies. Significant influence is presumed to exist when RHJI 

owns, directly or indirectly through subsidiaries, between 20 and 

50% of the voting power of an entity unless it can be clearly 

demonstrated that such ownership does constitute control, in 

which case, the associate is considered to be a subsidiary. 

The consolidated financial statements include the Company’s 

share of the total recognized gains and losses of associates on 

an equity accounted basis, from the date that significant 

influence commences until the date that significant influence 

ceases. 

When the Company’s share of losses exceeds its interest in an 

associate, the Company’s carrying amount is reduced to nil and 

recognition of further losses is discontinued except to the extent 

that the Company has incurred legal or constructive obligations 

or made payments on behalf of an associate. 

3.1.3. Joint ventures 

Jointly controlled entities are those enterprises over whose 

activities RHJI has joint control, established by contractual 

agreements. The Company records its interest in jointly 

controlled entities using the equity method from the date that 

joint control commences to the date that the joint control 

ceases. 

3.1.4. Transactions eliminated on consolidation 

Intragroup balances and any unrealized gains and losses or 

income and expenses arising from intragroup transactions, are 

eliminated in preparing the consolidated financial statements. 

Unrealized gains arising from transactions with associates are 

eliminated to the extent of RHJI’s interest in the entity. 

Unrealized losses are eliminated in the same way as unrealized 

gains, but only to the extent that there is no evidence of 

impairment. 

3.2. Foreign currency 

3.2.1. Foreign currency transactions 

Transactions in foreign currencies other than the functional 

currency are translated at the foreign exchange rate prevailing 

at the date of the transaction. Monetary assets and liabilities 

denominated in foreign currencies at the balance sheet date are 

translated at the foreign exchange rate ruling at that date. 

Foreign exchange differences arising from the settlement of 

foreign currency transactions or on translation of monetary 

assets and liabilities are recognized in the income statement. 

Non-monetary assets and liabilities that are measured in terms 

of historical cost in a foreign currency are translated using the 

exchange rate at the date of the transaction. Non-monetary 

assets and liabilities denominated in foreign currencies that are 

stated at fair value are translated at foreign exchange rates 

ruling at the dates the fair value was determined. 

Foreign currency differences arising on retranslation are 

recognized in profit or loss, except for differences arising on 

retranslation of available for sale equity instruments, a financial 

liability designated as a hedge of net investment in a foreign 

operation or qualifying cash flow hedges which are recognized 

directly in equity. 

3.2.2. Foreign operations 

The assets and liabilities of a foreign operation of the 

consolidated businesses with a functional currency other than 

the presentation currency of its parent are translated to 

applicable presentation currency at foreign exchange rates 

prevailing at the balance sheet date. The revenues and expenses 

of foreign operations are translated to applicable presentation 

currency at exchange rates at the dates of the transactions, 

which for translated to applicable presentation currency at 

foreign exchange rates prevailing at practical reasons are 

approximated by using average exchange rates for the period. 

The components of shareholders’ equity are translated at 

historical rates. All resulting exchange differences are 

recognized directly in the translation reserve, a separate 

component of equity. 

42


The translation reserve represents the difference between 

translating income statement items at average exchange rates 

and using the exchange rate at balance sheet date, and in 

respect of the opening balance of equity, the difference between 

translating at the rate at the balance sheet date of the previous 

period and using the rate at balance sheet date of the current 

period. These differences are released in the income statement 

upon disposal, in part or in full, of the investment in the related 

foreign operations, as an adjustment to the gain and loss on 

disposal. 

3.2.3. Exchange rates 

The following major exchange rates have been used in preparing 

the financial statements. 

100 JPY equals Closing rate Average rate 

2009 2008 2009 2008 

Euro ("EUR") 0.762 0.635 0.696 0.619 

US Dollar ("USD") 1.014 1.005 0.990 0.877 

3.3. Derivative financial instruments 

The Company uses derivative financial instruments to hedge its 

exposure to foreign exchange and interest rate risks arising 

from operational, financing and investment activities. The 

Company does not hold or issue derivative financial instruments 

for trading purposes. However, derivatives that do not qualify for 

hedge accounting are accounted for as trading instruments. 

Derivative financial instruments are recognized initially at cost. 

Subsequent to initial recognition, derivative financial 

instruments are stated at fair value. The gain or loss on 

remeasurement to fair value is recognized immediately in profit 

or loss. However, where derivatives qualify for hedge 

accounting, recognition of any resultant gain or loss depends on 

the nature of the item being hedged. 

The fair value of interest rate swaps is the estimated amount 

that the Company would receive or pay to terminate the swap at 

the balance sheet date, taking into account current interest 

rates and the current creditworthiness of the swap 

counterparties. The fair value of forward exchange contracts is 

their quoted market price at the balance sheet date, being the 

present value of the quoted forward price. 

3.4. Hedging 

3.4.1. Fair value hedges 

Where a derivative financial instrument hedges the changes in 

fair value of recognized assets or liabilities or an unrecognized 

firm commitment, any gain or loss on the hedging instrument is 

recognized in the income statement. The hedged item also is 

stated at fair value in respect of the risk being hedged, with any 

gain or loss being recognized in the income statement. 

3.4.2. Cash flow hedges 

Where a derivative financial instrument is designated as a hedge 

of the variability in cash flows of a recognized asset or liability, 

or a highly probable forecasted transaction, the effective part of 

any gain or loss on the derivative financial instrument is 

recognized directly in equity through the statement of changes 

in equity. The ineffective part of any gain or loss is recognized 

immediately in the income statement. 

When a hedging instrument expires or is sold, terminated or 

exercised, or the entity revokes designation of the hedge 

relationship but the hedged forecast transaction is still expected 

to occur, the cumulative gain or loss at that point remains in 

equity and is recognized in accordance with the above policy 

when the transaction occurs. If the hedged transaction is no 

longer expected to take place, the cumulative unrealized gain or 

loss recognized in equity is recognized immediately in the 

income statement. 

When the hedged item is a non-financial asset, the amount 

recognized in equity is transferred to the carrying amount of the 

asset when it is recognized. In other cases, the amount 

recognized in equity is transferred to profit and loss in the same 

period that the hedged item affects profit and loss. 

3.4.3. Derivatives 

The fair value of forward exchange contracts is based on their 

listed market price, if available. If a listed market price is not 

available, then fair value is estimated by discounting the 

difference between the contractual forward price and the 

current forward price for the residual maturity of the contract 

using a risk-free interest rate (based on government bonds). 

The fair value of interest rate swaps is based on broker quotes. 

Those quotes are tested for reasonableness by discounting 

estimated future cash flows based on the terms and maturity of 

each contract and using market interest rates, for a similar 

instrument at the measurement date. 

43

3.4.4. Non-derivative financial liabilities 

Fair value, which is determined for disclosure purposes, is 

calculated based on the present value of future principal and 

interest cash flows, discounted at the market rate of interest at 

the reporting date. In respect of the liability component of 

convertible notes, the market rate of interest is determined by 

reference to similar liabilities that do not have a conversion 

option. 

For finance leases the market rate of interest is determined by 

reference to similar lease agreements. 

3.5. Property, plant and equipment 

3.5.1. Owned assets 

Items of property, plant and equipment are stated at cost less 

accumulated depreciation (see below) and impairment losses 

(see below for accounting policy on impairment). Cost of an item 

of property, plant and equipment comprises its purchase price 

as well as any directly attributable costs (for example delivery 

and handling costs, installation and assembly costs) and the 

initial estimate of the costs of dismantling and removing the 

item if the Company is obliged to do so. 

Subsequent costs are only capitalized if it is probable that they 

will give rise to future economic benefits in excess of the 

originally assessed standard of performance of the asset or 

when it replaces a component that is accounted for separately. 

Costs incurred simply to restore or maintain the level of future 

economic benefits are expensed as incurred. 

Where parts of an item of property, plant and equipment have 

different useful lives, they are accounted for as separate items 

of property, plant and equipment. 

Borrowing costs related to acquisition, construction or 

production of qualifying assets are recognized in profit or loss as 

incurred. 

3.5.2. Leased assets 

Leases in terms of which the Company assumes substantially all 

the risks and rewards of ownership are classified as finance 

leases. Finance leases are capitalized at an amount equal to the 

lower of its fair value and the present value of the minimum 

lease payments at inception of the lease, less accumulated 

depreciation and impairment losses. 

An operating lease is a lease other than a finance lease. Rent 

expense for operating leases is recognized in the income 

statement on a straight-line basis over the lease term. 

3.5.3. Depreciation 

Depreciation is charged to the income statement from the date 

that the asset is available for use, on a straight-line basis over 

the estimated useful lives of each part of an item of property, 

plant and equipment. Land is not depreciated. 

The estimated useful lives are as follows: 

Buildings 

Machineries and equipments 

Fixtures and fittings 

3.6. Intangible assets 

3 - 60 years 

1 - 20 years 

1 - 20 years 

3.6.1. Goodwill 

All business combinations are accounted for by applying the 

purchase method. Goodwill resulting from acquisition of 

subsidiaries, associates and joint ventures represents the 

difference between the cost of the acquisition and the acquirer’s 

interest in the fair value of the acquired identifiable assets, 

liabilities and contingent liabilities recognized. 

Goodwill is stated at cost less any accumulated impairment 

losses. Goodwill is not amortized but is tested at least annually 

for impairment. In respect of associates, the carrying amount of 

goodwill is included in the carrying amount of the investment in 

the associate. 

Goodwill is expressed in the currency of the subsidiary to which 

it relates and is translated to Japanese Yen using the year end 

exchange rate. 

Negative goodwill arising on an acquisition is recognized directly 

in the income statement. 

3.6.2. Research and development 

Expenditure on research activities, undertaken with the prospect 

of gaining new scientific or technical knowledge and 

understanding, is recognized in the income statement as an 

expense as incurred. 

The periodic lease payments should be split into two 

components: the interest charge for the period and the 

reduction of the lease liability. The interest charge should be 

determined so that a constant periodic rate of interest is 

recognized on the outstanding balance of the liability. The asset 

under a finance lease should be depreciated over the shorter of 

the estimated useful life of the asset or the lease term, unless it 

is reasonable certain that the Company will obtain ownership by 

the end of the lease term. 

44


Expenditure on development activities, whereby research 

findings are applied to a plan or design for the production of new 

or substantially improved products and processes, is capitalized 

if the product or process is technically and commercially 

feasible and the Company has sufficient resources to complete 

development. The expenditure capitalized includes the cost of 

materials, direct labor and an appropriate proportion of 

overheads. Other development expenditure is recognized in the 

income statement as an expense as incurred. Capitalized 

development expenditure is stated at cost less accumulated 

amortization and impairment losses. 

3.6.3. Other intangible assets 

Other intangible assets that are acquired are stated at cost less 

accumulated amortization (see below) and impairment losses 

(see below for accounting policy on impairment). 

Expenditure on internally generated goodwill and brands is 

recognized in the income statement as an expense as incurred. 

Subsequent expenditure on capitalized intangible assets is 

capitalized only when it increases the future economic benefits 

embodied in the specific asset to which it relates. All other 

expenditure is expensed as incurred. 

3.6.4. Amortization 

Amortization is charged to the income statement on a straightline 

basis over the estimated useful lives. The estimated useful 

lives are as follows: 

Softwares 

Trademarks and patents 

Tradenames 

Customer relationships 

Customer contracts 

Intellectual properties 

Capitalized development costs 

Other rights and agreements 

1 - 7 years 

7 - 20 years 

indefinite 

8 - 25 years 

8 - 15 years 

3 - 10 years 

5 - 9 years 

4 - 15 years 

Trade names are determined to have an indefinite useful life, 

because the products are expected to last for the duration of the 

related consolidated businesses and are expected to retain their 

current trade names. 

3.7. Investments 

3.7.1. Investments in securities 

The Company owns various non-controlling or minority interests 

in public companies. The Company has not identified, and in the 

future, may decide not to identify, all the private and public 

companies in which it acquires non-controlling interests due to 

confidentiality, competitive or strategic concerns. All or some of 

the unidentified investments may be material to the Company, 

individually or in aggregate. 

Investments are classified as held-to-maturity when the 

Company has a positive intent and ability to hold debt securities 

to maturity. 

3.7.2. Financial instruments 

Financial instruments held for trading are classified as current 

assets and are stated at fair value, with any resultant gain or 

loss recognized in the income statement. 

Other financial instruments held by the Company are classified 

as being available for sale and are stated at fair value, with any 

resultant gain or loss being recognized directly in equity, except 

for impairment losses and, in the case of monetary items such 

as debt securities, foreign exchange gains and losses. When 

these investments are derecognized, the cumulative gain or loss 

previously recognized directly in equity is recognized in profit or 

loss. Where these investments are interest-bearing, interest 

calculated using the effective interest method is recognized in 

profit or loss. 

The fair value of financial instruments classified as held for 

trading and available for sale is their quoted bid price at the 

balance sheet date. 

Financial instruments classified as held for trading or availablefor-sale 

investments are recognized/derecognized on the date 

the Company commits to purchase/sell the investments. Heldto-maturity 

securities are recognized / derecognized on the day 

they are transferred to/by the Company. 

3.8. Investment properties 

Investment properties are properties which are held either to 

earn rental income or for capital appreciation or for both. 

All investment properties are stated at cost, less accumulated 

depreciation and any accumulated impairment losses. 

Depreciation charge is charged to the income statement on a 

straight-line basis over the estimated useful lives of each part of 

the property. The estimated useful lives are those used as 

required for owner-occupied property carried at cost. 

45

3.9. Inventories 

Inventories are stated at the lower of cost and net realizable 

value. Net realizable value is the estimated selling price in the 

ordinary course of business, less the estimated costs of 

completion and selling expenses. 

The cost of inventories is based on the weighted average 

principle and includes expenditure incurred in acquiring the 

inventories and bringing them to their existing location and 

condition. In the case of manufactured inventories and work in 

progress, cost includes the direct cost of materials, direct 

manufacturing expenses and an appropriate, systematically 

allocated share of overheads, based on normal operating 

capacity. 

3.10. Trade and other receivables 

Trade and other receivables are stated at their cost less 

impairment losses. An estimate is made for doubtful receivables 

based on a review of all outstanding amounts at each balance 

sheet date. Impairment losses are recorded during the year in 

which they are identified. 

3.11. Cash and cash equivalents 

Cash and cash equivalents comprise cash balances and call 

deposits. Bank overdrafts repayable on demand are included as 

cash and cash equivalents for the purpose of the cash-flow 

statement if and when they form an integral part of the entity’s 

cash management. 

3.12. Impairment 

3.12.1. Methodology 

The carrying amounts of the Company’s assets, other than 

inventories and deferred tax assets, are reviewed at each 

balance sheet date to determine whether there is any indication 

of impairment. If any such indication exists, the asset’s 

recoverable amount is estimated. 

For goodwill, assets that have an indefinite useful life and 

intangible assets that are not yet available for use, the 

recoverable amount is estimated at each balance sheet date. 

An impairment loss is recognized whenever the carrying amount 

of an asset or its cash-generating unit exceeds its recoverable 

amount. Impairment losses are recognized in the income 

statement. 

Impairment losses recognized in respect of cash-generating 

units are allocated first to reduce the carrying amount of any 

goodwill allocated to cash-generating units (group of units) and 

then to reduce the carrying amount of the other assets in the 

unit (group of units) on a pro rata basis. 

3.12.2. Calculation of recoverable amount 

The recoverable amount of the Company’s investments in heldto-maturity 

securities and receivables carried at amortized cost 

is calculated as the present value of estimated future cash 

flows, discounted at the original effective interest rate (i.e., the 

effective interest rate computed at initial recognition of these 

financial assets). Receivables with a short duration are not 

discounted. 

The recoverable amount of other assets is the greater of their 

fair value less cost to sell and value in use. In assessing value in 

use, the estimated future cash flows are discounted to their 

present value using a pre-tax discount rate that reflects current 

market assessments of the time value of money and the risks 

specific to the asset. For an asset that does not generate largely 

independent cash inflows, the recoverable amount is 

determined for the cash-generating unit to which the asset 

belongs. 

3.12.3. Reversals of impairment 

A previously recognized impairment loss is reversed if there has 

been a change in the estimates used to determine the 

recoverable amount. 

An impairment loss is reversed only to the extent that the 

asset’s carrying amount does not exceed the carrying amount 

that would have been determined, net of depreciation or 

amortization, if no impairment loss had been recognized. 

An impairment loss recognized for goodwill shall not be 

reversed in a subsequent period. 

3.13. Share capital 

When share capital recognized as equity is repurchased, the 

amount of the consideration paid, including directly attributable 

costs, is recognized as a change in equity. Repurchased shares 

are classified as treasury shares and presented as a deduction 

from total equity. 

Dividends are recognized as a liability in the period in which they 

are declared. 

Transaction costs related to the issuance of shares are 

accounted for as a deduction from equity, net of any tax effects. 

46


3.14. Loans and borrowings 

Loans and borrowings are recognized initially at fair value less 

attributable transaction costs. Subsequent to initial recognition, 

borrowings are stated at amortized cost with any difference 

between cost and redemption value being recognized in the 

income statement over the period of the borrowings on an 

effective interest basis. 

3.15. Employee benefits 

3.15.1. Defined contribution plans 

Obligations for contributions to defined contribution pension 

plans are recognized as an expense in the income statement as 

incurred. 

3.15.2. Defined benefit plans 

The net obligation in respect of defined benefit pension plans, 

recognized in the balance sheet, is calculated as the present 

value of the defined benefit obligation (future benefit that 

employees have earned in return for their service in the current 

and prior periods), adjusted for the unrecognized actuarial gains 

and losses and less any past service costs not yet recognized 

and the fair value of any plan assets. The discount rate is the 

yield at the balance sheet date on high quality credit rated bonds 

that have maturity dates approximating to the terms of the 

obligations. The calculation is performed by a qualified actuary 

using the projected unit credit method. 

When the benefits of a plan are improved, the portion of the 

increased benefit relating to past service by employees is 

recognized as an expense in the income statement on a straightline 

basis over the average period until the benefits become 

vested. To the extent that the benefits vest immediately, the 

expense is recognized immediately in the income statement. 

In respect of actuarial gains and losses, to the extent that any 

cumulative unrecognized actuarial gain or loss exceeds 10% of 

the greater of the present value of the defined benefit obligation 

and the fair value of plan assets, that portion will be recognized 

in the income statement over the expected average remaining 

working lives of the employees participating in the plan. 

Otherwise, the actuarial gain or loss is not recognized. 

Where the calculation results in a benefit to the Company, the 

recognized asset is limited to the net total of any unrecognized 

actuarial losses and past service costs and the present value of 

any future refunds from the plan or reductions in future 

contributions to the plan. 

3.15.3. Other post-retirement obligations 

Some consolidated businesses provide post-retirement 

healthcare benefits to their retirees. The entitlement to these 

benefits is usually based on the employee remaining in service 

up to retirement age. The expected costs of these benefits are 

accrued over the period of employment, using an accounting 

methodology similar to that for defined benefit pension plans 

and determined by independent qualified actuaries. 

3.15.4. Equity and equity-related compensation 

benefits 

The Company operates a number of share-based compensation 

plans, allowing Company employees to acquire shares in their 

respective companies. In addition, certain members of the 

Company’s management team and other employees received 

RHJI ordinary shares from a significant shareholder of the 

Company in the context of the initial public offering. 

The fair value of stock options and share grants is measured at 

grant date and spread over the period during which the 

employees become unconditionally entitled to the options or 

shares granted. The fair value of the options is measured using 

a Black-Scholes-Merton model, taking into account the terms 

and conditions upon which the options were granted. The fair 

value of share grants is measured using the Finnerty model to 

reflect transferability restrictions resulting from certain terms 

and conditions upon which the shares were granted. 

The amount recognized as an expense is adjusted to reflect the 

actual number of stock options and shares that vest. 

3.15.5. Termination benefits 

Termination benefits are recognized as an expense when the 

Company is demonstrably committed, without realistic 

possibility of withdrawal, to a formal detailed plan to either 

terminate employment before the normal retirement date, or to 

provide termination benefits as a result of an offer made to 

encourage voluntary redundancy. Termination benefits for 

voluntary redundancies are recognized as an expense if the 

Company has made an offer of voluntary redundancy, it is 

probable that the offer will be accepted, and the number of 

acceptances can be estimated reliably. 

3.15.6. Bonuses 

Bonuses received by employees and management of the 

Company are recognized as an expense in the year the related 

service is provided. 

47

3.16. Provisions 

A provision is recognized in the balance sheet when the 

Company has a present legal or constructive obligation as a 

result of a past event, and it is probable that an outflow of 

economic benefits will be required to settle the obligation and a 

reliable estimate can be made of the amount of the obligation. If 

the effect is material, provisions are determined by discounting 

the expected future cash flows at a pre-tax rate that reflects 

current market assessments of the time value of money and, 

where appropriate, the risks specific to the liability. 

3.16.1. Warranties 

A provision for warranties is recognized when the underlying 

products or services are sold. The provision is based on 

historical warranty data and a weighting of all possible 

outcomes against their associated probabilities. 

3.16.2. Restructuring 

A provision for restructuring is recognized when the Company 

has approved a detailed and formal restructuring plan, and the 

restructuring has either commenced or has been announced 

publicly. Future operating costs are not provided for. 

3.16.3. Site restoration 

In accordance with the applicable legal requirements, a 

provision for site restoration in respect of contaminated land is 

recognized when the land is contaminated. 

3.16.4. Onerous contracts 

A provision for onerous contracts is recognized when the 

expected benefits to be derived by the Company from a contract 

are lower than the unavoidable cost of meeting its obligations 

under the contract. The provision is measured at the present 

value of the lower of the expected cost of terminating the 

contract and expected net cost of continuing with the contract. 

Before a provision is established, the Company recognizes any 

impairment loss on the assets associated with the contract. 

3.17. Trade and other payables 

Trade and other payables are stated at cost. 

transferred to the buyer, recovery of the consideration is 

probable, the associated costs and possible return of goods can 

be estimated reliably, there is no continuing management 

involvement with the goods, and the amount of revenue can be 

measured reliably. Revenue from services rendered is 

recognized in the income statement in proportion to the stage of 

completion of the transaction at the balance sheet date. The 

stage of completion is assessed by reference to surveys of work 

performed. 

3.18.2. Construction contracts 

Contract revenue includes the initial amount agreed in the 

contract plus any variations in contract work, claims and 

incentive payments to the extent that it is probable that they will 

result in revenue and can be measured reliably. As soon as the 

outcome of a construction contract can be estimated reliably, 

contract revenue and expenses are recognized in profit or loss in 

proportion to the stage of completion of the contract. The stage 

of completion is assessed by reference to surveys of work 

performed. When the outcome of a construction contract cannot 

be estimated reliably, contract revenue is recognized only to the 

extent of contract costs incurred that are likely to be 

recoverable. An expected loss on a contract is recognized 

immediately in profit or loss. 

3.18.3. Government grants 

Government grants are recognized in the balance sheet initially 

as deferred income when there is reasonable assurance that 

they will be received and that the Company will comply with the 

conditions attaching to them. Grants that compensate the 

Company for expenses incurred are recognized as revenue in 

the income statement on a systematic basis in the same periods 

in which the expenses are incurred. Grants that compensate the 

Company for the cost of an asset are recognized in the income 

statement as other operating income on a systematic basis over 

the useful life of the asset. 

3.18.4. Royalties 

Royalties are recognized as revenue when it is probable that the 

economic benefits associated with the transaction will flow to 

the Company and can be measured reliably. The income is 

recognized in accordance with the substance of the relevant 

agreement. 

3.18. Revenue 

3.18.1. Goods sold and services rendered 

Revenue from the sale of goods is measured at the fair value of 

the consideration received or receivable net of returns, trade 

discounts and volume rebates. Revenue is recognized when the 

significant risks and rewards of ownership have been 

48


3.19. Expenses 

3.19.1. Employee benefits 

Short-term employee benefits including short-term 

compensated absences are expensed in the period in which the 

employees rendered the related services. 

3.19.2. Lease payments 

Payments made under operating leases are recognized in the 

income statement on a straight-line basis over the term of the 

lease. Lease incentives received are recognized in the income 

statement as an integral part of the total lease expense. 

Minimum lease payments related to finance leases are 

apportioned between the finance charge and the reduction of the 

outstanding liability. The finance charge is allocated to each 

period during the lease term so as to produce a constant 

periodic rate of interest on the remaining balance of the liability. 

3.19.3. Finance income and expenses 

Finance income and expenses comprise interest payable on 

borrowings calculated using the effective interest rate method, 

dividends on redeemable preference shares, interest receivable 

on funds invested, dividend income, foreign exchange gains and 

losses and gains and losses on hedging instruments that are 

recognized in the income statement. 

Interest income is recognized in the income statement as it 

accrues, using the effective interest method. Dividend income is 

recognized in the income statement on the date the entity’s right 

to receive payments is established. The interest expense 

component of finance lease payments is recognized in the 

income statement using the effective interest method. 

3.20. Income taxes 

Income tax comprises current and deferred tax. Income tax is 

recognized in the income statement except to the extent that it 

relates to items recognized directly in equity, in which case it is 

recognized in equity. 

Current tax is the expected tax payable on the taxable income 

for the year, using tax rates enacted or substantially enacted at 

the balance sheet date, and any adjustment to tax payable in 

respect of previous years. 

Deferred tax is provided using the balance sheet liability 

method, providing for temporary differences between the 

carrying amounts of assets and liabilities for financial reporting 

purposes and the amounts used for taxation purposes. The 

following temporary differences are not provided for: 

• The initial recognition of goodwill; 

• The initial recognition of assets or liabilities in a transaction 

other than a business combination that affect neither 

accounting nor taxable profit; 

• Differences relating to investments in subsidiaries to the 

extent that the Company is able to control the timing of the 

reversal of the temporary difference and it is probable that 

the temporary difference will not reverse in the foreseeable 

future. 

The deferred tax assets and liabilities are offset if there is a 

legally enforceable right to offset current tax liabilities and 

assets, and they relate to income taxes levied by the same tax 

authority on the same taxable entity. 

The amount of deferred tax provided is based on the expected 

manner of realization or settlement of the carrying amount of 

assets and liabilities, using tax rates enacted or substantively 

enacted at the balance sheet date. 

A deferred tax asset is recognized only to the extent that it is 

reviewed at each reporting date and probable that future taxable 

profits will be available against which the asset can be utilized. 

Deferred tax assets are reduced to the extent that it is no longer 

probable that the related tax benefit will be realized. 

Additional income taxes that arise from the distribution of 

dividends are recognized at the same time as the liability to pay 

the related dividend. 

49

3.21. Segment reporting 

A segment is a distinguishable component of the Company that 

is engaged either in providing related products or services 

(business segment), or in providing products or services within a 

particular economic environment (geographical segment), which 

is subject to risks and returns that are different from those of 

other segments. The Company is a diversified holding company 

engaged in various industries and has chosen a segment 

reporting format based on the businesses it is managing. 

Segment assets and liabilities include those operating assets 

and liabilities that are directly attributable to a segment or can 

be allocated to a segment on a reasonable basis. 

3.22. Non-current assets held for 

sale and discontinued operations 

A discontinued operation is a component of the Company’s 

business that represents a separate major line of business or 

geographical area of operations or is a subsidiary acquired 

exclusively with a view to resale. Classification as a discontinued 

operation occurs upon disposal or when the operation meets the 

criteria to be classified as held for sale, if earlier. A disposal 

group that is to be abandoned may also qualify. 

Immediately before classification as held for sale, the 

measurement of all assets and liabilities in the disposal group is 

brought up-to-date in accordance with applicable IFRSs. On 

initial classification as held for sale, non-current assets and 

disposal groups are recognized at the lower of carrying amount 

and fair value less cost to sell. Impairment losses on initial 

classification as held for sale are included in profit or loss. The 

same applies to gains and losses on subsequent 

remeasurement. 

3.23. Recently issued standards and 

interpretations not yet adopted 

To the extent that new IFRS requirements are expected to be 

applicable in the future, they have been summarized hereafter. 

For the year ended March 31, 2009, they have not been applied in 

preparing the consolidated financial statements. 

IFRS 8 Operating Segments introduces the ‘management 

approach’ to segment reporting. IFRS 8, which becomes 

mandatory for RHJI’s March 31, 2010 financial statements, will 

require the disclosure of segment information based on the 

internal reports regularly reviewed by RHJI’s Executive 

Management in order to assess each segment’s performance 

and to allocate resources to them. Currently RHJI presents 

segment information in respect of its geographical and business 

segments. RHJI does not expect that IFRS 8 will trigger a 

material change to our current segment reporting. 

Revised IAS 23 Borrowing Costs removes the option to expense 

borrowing costs and requires that an entity capitalizes 

borrowing costs directly attributable to the acquisition, 

construction or production of a qualifying asset as part of the 

cost of that asset. The revised IAS 23 will become mandatory for 

RHJI’s March 31, 2010 financial statements and will constitute a 

change in accounting policy for RHJI. In accordance with the 

transitional provisions RHJI will apply the revised IAS 23 to 

qualifying assets for which capitalization of borrowing costs 

commences on or after the effective date of the standard. We do 

not expect any material impact. 

IFRIC 13 Customer Loyalty Programs addresses the accounting 

by entities that operate, or otherwise participate in, customer 

loyalty programs for their customers. It relates to customer 

loyalty programs under which the customer can redeem credits 

for awards such as free or discounted goods or services. IFRIC 

13, which becomes mandatory for RHJI’s March 31, 2010 

financial statements, is not expected to have any material 

impact. 

Revised IAS 1 Presentation of Financial Statements (2007) 

introduces the term total comprehensive income, which 

represents changes in equity during a period other than those 

changes resulting from transactions with owners in their 

capacity as owners. Total comprehensive income may be 

presented in either a single statement of comprehensive income 

(effectively combining both the income statement and all nonowner 

changes in equity in a single statement), or in an income 

statement and a separate statement of comprehensive income. 

Revised IAS 1, which becomes mandatory for RHJI’s March 31, 

2010 consolidated financial statements, is not expected to have 

an impact on the presentation of the consolidated financial 

statements. RHJI plans to continue to provide total 

comprehensive income in an income statement and a separate 

single statement of other comprehensive income for its March 

31, 2010 consolidated financial statements. 

Amendments to IAS 32 Financial Instruments : Presentation and 

IAS 1 Presentation of Financial Statements – Puttable Financial 

Instruments and Obligations Arising on Liquidation requires 

puttable instruments, and instruments that impose on the entity 

an obligation to deliver to another party a pro rata share of the 

net assets of the entity only on liquidation, to be classified as 

equity if certain conditions are met. The amendments, which 

become mandatory for RHJI’s March 31, 2010 consolidated 

financial statements, with retrospective application required, are 

not expected to have any material impact. 

Revised IFRS 3 Business Combinations (2008) incorporates the 

following changes that are likely to be relevant to RHJI’s 

operations : 

• The definition of a business has been broadened, which is 

likely to result in more acquisitions being treated as 

business combinations. 

• Contingent consideration will be measured at fair value, with 

subsequent changes therein recognized in profit or loss. 

50


• Transaction costs, other than share and debt issue costs, 

will be expensed as incurred. 

• Any pre-existing interest in the acquiree will be measured at 

fair value with the gain or loss recognized in profit or loss. 

• Any non-controlling (minority) interest will be measured at 

either fair value, or at its proportionate interest in the 

identifiable assets and liabilities of the acquiree, on a 

transaction-by-transaction basis. 

Revised IFRS 3, which becomes mandatory for RHJI’s March 31, 

2011 consolidated financial statements, will be applied 

prospectively and, will therefore have no impact on prior 

periods. 

Amended IAS 27 Consolidated and Separate Financial 

Statements (2008) requires accounting for changes in ownership 

interests by RHJI in a subsidiary, while maintaining control, to 

be recognized as an equity transaction. When RHJI loses control 

of a subsidiary, any interest retained in the former subsidiary 

will be measured at fair value with the gain or loss recognized in 

profit or loss. The amendments to IAS 27, which become 

mandatory for RHJI’s March 31, 2011 consolidated financial 

statements will be applied prospectively and will therefore have 

no impact on prior periods. 

Amendment to IFRS 2 Share-based Payment – Vesting 

Conditions and Cancellations clarifies the definition of vesting 

conditions, introduces the concept of non-vesting conditions, 

requires non-vesting conditions to be reflected in grant-date fair 

value and provides the accounting treatment for non-vesting 

conditions and cancellations. The amendments to IFRS 2, that 

will become mandatory for RHJI’s 2010 consolidated financial 

statements, with retrospective application, are not expected to 

have any material impact. 

IFRIC 15 Agreements for the Construction of Real Estate 

concludes that revenues for real estate construction projects 

will have to be recognized using the completed contract method 

in many cases, except for specific situations where the 

percentage of completion method of revenue recognition can be 

applied. This is the case when a contract relates to the sale of 

assets, but during the construction of these assets revenue 

recognition criteria are met on a continuous basis (in relation to 

the completed part of the project). IFRIC 15, which becomes 

mandatory for RHJI’s 2010 consolidated financial statements, 

with retrospective application, is not expected to have any 

material impact. 

IFRIC 16 Hedges of a Net Investment in a Foreign Operation 

discusses a number of issues in relation to hedging currency 

risks on foreign operations (net investment hedges). IFRIC 16 

specifically confirms only that the risk from differences between 

the functional currencies of the Company and the subsidiary can 

be hedged. Additionally, currency risks can only be hedged by 

every (direct or indirect) parent company, as long as the risk is 

only hedged once in the consolidated financial statements. IFRIC 

16 also determines that the hedge instrument of a net 

investment hedge can be held by every group company, except 

for foreign operation itself. IFRIC 16, which becomes mandatory 

for RHJI’s March 31, 2011 consolidated financial statements, 

with prospective application, is not expected to have any 

material impact. 

IFRIC 17 Distributions of Non-cash Assets to Owners addresses 

the treatment of distributions in kind to shareholders. Outside 

the scope of IFRIC 17 are distributions in which the assets being 

distributed are ultimately controlled by the same party or parties 

before and after the distribution (common control transactions). 

A liability has to be recognized when the dividend has been 

appropriately authorized and is no longer at the discretion of the 

entity, to be measured at the fair value of the non-cash assets to 

be distributed. IFRIC 17, which becomes mandatory for RHJI’s 

March 31, 2011 consolidated financial statements, with 

prospective application, is not expected to have any material 

impact. 

IFRIC 18 Transfers of Assets from Customers addresses the 

accounting by access providers for property, plant and 

equipment contributed to them by customers. Recognition of the 

assets depends on who controls it. When the asset is recognized 

by the access provider, it is measured at fair value upon initial 

recognition. The timing of the recognition of the corresponding 

revenue depends on the facts and circumstances. IFRIC 18, 

which becomes mandatory for RHJI’s March 31, 2011 

consolidated financial statements, with prospective application, 

is not expected to have any material impact . 

Amendments to IFRS 1 First-time Adoption of IFRSs and IAS 27 

Consolidated and Separate Financial Statements – Cost of an 

Investment in a Subsidiary, Jointly-controlled Entity or Associate 

(endorsed by the European Union) revises, amongst others, the 

accounting for ‘pre-acquisition dividends’ received from 

participating interests. Those dividends should be recognized as 

revenue, but such dividends may imply an indicator for the 

impairment of the participating interest. The amendment, which 

becomes mandatory for RHJI’s March 31, 2011 consolidated 

financial statements, with prospective application, is not 

applicable for the Company. 

Amendment to IAS 39 Financial Instruments : Recognition and 

Measurement – Eligible Hedged Items provides additional 

guidance concerning specific positions that qualify for hedging 

(‘eligible hedged items’). The amendment to IAS 39, which 


financial statements, with retrospective application, is not 

expected to have any material impact . 

Improvements to IFRSs (2008) is a collection of minor 

improvements to existing standards. This collection, which 


financial statements, is not expected to have any material 

impact. 

51

4. DETERMINATION OF FAIR 

VALUES 

A number of the Group’s accounting policies and disclosures 

require the determination of fair value, for both financial and 

non-financial assets and liabilities. Fair values have been 

determined for measurement and disclosure purposes based on 

the following methods. Where applicable, further information 

about the assumptions made in determining fair values is 

disclosed in the notes specific to that asset or liability. 

4.1. Property, plant and equipment 

The fair value of property, plant and equipment recognized as a 

result of a business combination is based on market values. 

The market value of property is the estimated amount for which 

a property could be exchanged on the date of valuation between 

a willing buyer and a willing seller in an arm’s length 

transaction after proper marketing wherein the parties had each 

acted knowledgeably, prudently and without compulsion. The 

market value of items of plant, equipment, fixtures and fittings is 

based on the quoted market prices for similar items. 

4.2. Intangible assets 

4.3. Inventories 

The fair value of inventories acquired in a business combination 

is determined based on its estimated selling price in the 

ordinary course of business less the estimated costs of 

completion and sale, and a reasonable profit margin based on 

the effort required to complete and sell the inventories. 

4.4. Investments in equity and debt 

securities 

The fair value of financial assets at fair value through profit or 

loss, held-to-maturity investments and available for sale 

financial assets is determined by reference to their quoted bid 

price at the reporting date. The fair value of held-to-maturity 

investments is determined for disclosure purposes only. 

4.5. Trade and other receivables 

The fair value of trade and other receivables, excluding 

construction work in progress, is estimated as the present value 

of future cash flows, discounted at the market rate of interest at 

the reporting date. 

The fair value of patents and trademarks acquired in a business 

combination is based on the discounted estimated royalty 

payments that have been avoided as a result of the patent or 

trademark being owned. The fair value of other intangible assets 

is based on the discounted cash flows expected to be derived 

from the use and eventual sale of the assets. 

52


5. USE OF ESTIMATES AND 

JUDGMENTS 

The preparation of its financial statements in conformity with 

IFRS requires the Company to make judgments, estimates and 

assumptions that affect the application of policies and reported 

amounts of assets and liabilities, income and expenses. 

The estimates and associated assumptions are based on 

historical experience and various other factors that are believed 

to be reasonable in the circumstances, the results of which form 

the basis of making the judgments about carrying values of 

assets and liabilities that are not readily apparent from other 

sources. Actual results may differ from these estimates. 

The estimates and underlying assumptions are reviewed on an 

ongoing basis. Revisions to accounting estimates are recognized 

in the period in which the estimate is revised if the revision 

affects only that period or in the period of the revision and future 

periods if the revision affects both current and future periods. 

6. SEGMENT REPORTING 

Segment information is presented with respect to the 

Company’s business and geographical segments. The primary 

format, business segments, is based on the Company’s 

management and internal reporting structure. 

6.1. Business segments 

The Company comprises the following main business segments: 

• Asahi Tec; 

• CME; 

• HIT; 

• Niles; and 

• Phoenix Seagaia Resort. 

In particular, information about significant areas of estimation 

uncertainty and critical judgments in applying accounting 

policies that have the most significant effect on the amount 

recognized in the financial statements are described in the 

following notes: 

• Note 8 – Acquisitions 

• Note 15 – Measurement of the recoverable amount for 

property, plant and equipment of cash-generating units 

• Note 16 – Measurement of the recoverable amount for 

intangible assets of cash-generating units 

• Note 19 – Utilization of tax losses 

• Note 26 – Measurement of defined benefit obligations 

• Note 27 – Measurement of share-based payments 

• Note 28 – Provisions 

• Note 30 – Valuation of financial instruments 

• Note 33 – Contingencies. 

53

(in JPY millions) 2009 

Asahi Tec CME HIT Niles 

Phoenix 

Corporate 

Seagaia 

Headquarters 

Resort 

Consolidation 

entries 

Continuing Discontinued 

operations operations 

Total 

Revenue 218,815 18,170 102,527 45,444 12,327 2,599 (2,582) 397,300 - 397,300 

Gross profit (loss) 18,848 7,061 1,364 6,089 1,441 55 (38) 34,820 - 34,820 

Loss from operations (55,936) (9,300) (54,540) (11,164) (14,800) (8,189) (230) (154,159) - (154,159) 

Net financial income (expense) 29,623 15 (9,494) (1,968) (455) (4,012) 1,560 15,269 - 15,269 

Share of profit (loss) of equity accounted 

investees (net of income tax) 

408 - - - - (11,013) - (10,605) - (10,605) 

Income tax benefit (expense) (1,567) (29) 6,512 (2,446) 3,843 (81) - 6,232 - 6,232 

Profit from discontinued operations (net of 

income tax) 

- - - - - - - - 11,992 11,992 

Minority interest (63) - 530 13 - - 14,574 15,054 174 15,228 

Profit (loss) for the period attributable to 

equity holders of the Company 

(27,535) (9,314) (56,992) (15,565) (11,412) (23,295) 15,904 (128,209) 12,166 (116,043) 

Non-current assets 97,590 6,771 57,371 24,581 12,649 76,025 (54,491) 220,496 - 220,496 

Current assets 40,363 6,763 11,887 14,480 1,304 68,040 (5,716) 137,121 - 137,121 

Total assets 137,953 13,534 69,258 39,061 13,953 144,065 (60,207) 357,617 - 357,617 

Equity attributable to equity holders of the 

Company 

1,942 1,114 (42,247) (4,554) 3,454 138,226 (57,615) 40,320 - 40,320 

Minority interest 1,132 - 1,187 392 - - 4,435 7,146 - 7,146 

Non-current liabilities 97,434 6,127 16,538 16,809 7,678 1,231 1 145,818 - 145,818 

Current liabilities 37,445 6,293 93,780 26,414 2,821 4,608 (7,028) 164,333 - 164,333 

Total equity and liabilities 137,953 13,534 69,258 39,061 13,953 144,065 (60,207) 357,617 - 357,617 

Cash flow from operating activities (672) (1,006) (2,615) 2,060 (361) (11,247) 1,628 (12,213) (6,037) (18,250) 

Cash flow from investing activities (15,405) (432) (9,965) (3,547) (525) 16,808 20,496 7,430 (1,058) 6,372 

Cash flow from financing activities 15,237 763 8,940 708 697 2,212 (20,871) 7,686 7,288 14,974 

Net change in cash and cash equivalents (840) (675) (3,640) (779) (189) 7,773 1,253 2,903 193 3,096 

Cash and cash equivalents at the beginning 

of the period 

6,465 2,506 6,234 2,957 644 53,652 - 72,458 (181) 72,277 

Effect of exchange rate fluctuations on cash held (276) 1 (720) (100) - (678) (1,253) (3,026) (12) (3,038) 

Cash and cash equivalents at the end of the 

period 

5,349 1,832 1,874 2,078 455 60,747 - 72,335 - 72,335 

Depreciation of property, plant and 

equipment 

14,147 141 8,498 3,633 1,071 70 - 27,560 - 27,560 

Amortization of intangible assets 2,658 1,471 2,155 378 29 27 - 6,718 - 6,718 

Impairment 

Property, plant and equipment 7,045 - 6,699 232 13,993 - - 27,969 - 27,969 

Intangible assets 42,264 4,398 28,593 - (9) 20,044 - 95,290 - 95,290 

Capital expenditure 9,194 182 9,965 3,693 525 54 - 23,613 - 23,613 

Number of employees (Full Time Equivalent) 8,217 459 4,071 3,405 1,551 54 - 17,757 - 17,757 

54



Asahi Tec CME HIT Niles 

Phoenix 

Corporate 

Seagaia 

Headquarters 

Resort 

Consolidation 

entries 



Total 

Revenue 315,772 18,569 141,933 59,318 14,478 4,103 (4,107) 550,066 - 550,066 

Gross profit (loss) 29,527 7,133 12,874 10,309 1,694 510 (722) 61,325 - 61,325 

Profit (loss) from operations (25,277) (2,707) (461) 2,414 (710) (6,401) (964) (34,106) - (34,106) 

Net financial expense (10,618) (62) (10,808) (1,548) (403) (1,064) (2,509) (27,012) - (27,012) 

Share of profit of equity accounted 


204 - - - - - 654 858 - 858 

Income tax benefit (expense) (2,849) (816) 8,317 (558) (3,567) (341) - 186 - 186 

Loss from discontinued operations 

(net of income tax) 

- - - - - - - - (1,177) (1,177) 

Minority interest (267) - (56) (90) - - 29,050 28,637 (607) 28,030 

Profit (loss) for the period attributable to 

equity holders of the Company 

(38,807) (3,585) (3,008) 218 (4,680) (7,806) 26,231 (31,437) (1,784) (33,221) 

Non-current assets 186,883 12,420 107,775 26,219 27,285 181,880 (136,734) 405,728 - 405,728 

Current assets 67,378 9,032 30,896 23,208 1,813 60,645 (6,709) 186,263 81,033 267,296 

Total assets 254,261 21,452 138,671 49,427 29,098 242,525 (143,443) 591,991 81,033 673,024 

Equity attributable to equity holders of the 

Company 

48,680 6,969 6,247 1,572 13,870 235,920 (146,360) 166,898 - 166,898 

Minority interest 1,291 - 2,053 490 - - 34,494 38,328 - 38,328 

Non-current liabilities 138,558 6,519 95,999 9,259 12,120 1,192 - 263,647 - 263,647 

Current liabilities 65,732 7,964 34,373 38,106 3,108 5,413 (8,819) 145,877 58,274 204,151 

Total equity and liabilities 254,261 21,452 138,672 49,427 29,098 242,525 (120,685) 614,750 58,274 673,024 

Cash flow from operating activities 9,772 (1,339) 8,544 3,892 763 (4,343) (3,714) 13,575 2,671 16,246 

Cash flow from investing activities (14,814) (1,164) (19,694) (4,056) (330) (21,169) 19,181 (42,046) (10,922) (52,968) 

Cash flow from financing activities 3,182 (170) 12,305 (1,672) (823) 1,684 (19,660) (5,154) 5,200 46 

Net change in cash and cash equivalents (1,860) (2,673) 1,155 (1,836) (390) (23,828) (4,193) (33,625) (3,051) (36,676) 

Cash and cash equivalents at the beginning 

of the period 

8,721 5,233 4,992 4,869 1,034 81,721 - 106,570 2,981 109,551 

Effect of exchange rate fluctuations on cash held (396) (54) 87 (76) - (4,241) 4,193 (487) (111) (598) 

Cash and cash equivalents at the end of the 

period 

6,465 2,506 6,234 2,957 644 53,652 - 72,458 (181) 72,277 

Depreciation of property, plant and 

equipment 

16,005 239 9,103 3,875 1,183 57 - 30,462 - 30,462 

Amortization of intangible assets 4,371 1,288 2,824 269 47 1 - 8,800 - 8,800 

Impairment 

Property, plant and equipment 547 - - 23 437 - - 1,007 - 1,007 

Intangible assets 29,249 197 - - (2) - - 29,444 - 29,444 

Capital expenditure 13,906 168 8,265 4,519 330 273 - 27,461 - 27,461 

Number of employees (Full Time Equivalent) 10,585 528 4,611 4,018 1,575 50 - 21,367 - 21,367 

55

The table below reconciles (a) the profit (loss) of the consolidated subsidiaries as reported in Part I of the present Annual Report and 

excluding the effect of the initial purchase price allocation resulting from the contribution of the consolidated subsidiaries to RHJI in 

March 2005, with (b) the profit (loss) reported on the previous table by business segment. 


Asahi Tec CME HIT (1) Niles 

Phoenix 

Corporate 

Seagaia 

Headquarters 

Resort 

Consolidation 

entries 



Total 

Revenue 218,815 18,170 102,527 45,444 12,327 2,599 (2,582) 397,300 - 397,300 

Loss from operations (52,294) (693) (50,990) (1,265) (701) (8,189) (230) (114,362) - (114,362) 

Effect of purchase price allocation (3,642) (8,607) (3,550) (9,899) (14,099) - - (39,797) - (39,797) 

Loss from operations (55,936) (9,300) (54,540) (11,164) (14,800) (8,189) (230) (154,159) - (154,159) 


Asahi Tec CME HIT (1) Niles 

Phoenix 

Corporate 

Seagaia 

Headquarters 

Resort 

Consolidation 

entries 



Total 

Revenue 315,772 18,569 141,933 59,318 14,478 4,103 (4,107) 550,066 - 550,066 


Effect of purchase price allocation (203) (1,199) - 63 (598) (1,937) - (1,937) 


(1) The EUR denominated revenue and losses have been translated using the average foreign exchange rate for purposes of preparing the consolidated financial statements. 

The results as reflected in Part I of the Annual Report were translated for convenience using the exchange rate at fiscal year ends. 

6.2. Geographical segments 

The Company is primarily managed on a worldwide basis, but operates in four principal geographical areas, Japan, Asia, Europe and 

North America. Segment assets and liabilities include items directly attributable to a segment as well as those than can be allocated 

on a reasonable basis. In presenting information on the basis of geographical segments, segment information is based on the 

geographical location of the assets. 

(in JPY millions) Japan Europe Americas Asia Eliminated Consolidated 

Revenue 140,376 135,538 105,442 20,263 (4,319) 397,300 

Segment assets 58,616 222,642 53,179 26,879 (3,699) 357,617 

Capital expenditure 6,002 6,082 7,003 4,565 (39) 23,613 

Net debt 58,072 12,342 52,786 5,158 (11,683) 116,675 

Number of employees (Full Time Equivalent) 5,634 4,844 3,624 3,655 - 17,757 

2009 

2008 

Revenue 174,879 190,407 170,892 37,072 (23,184) 550,066 

Segment assets 187,046 417,832 111,427 35,001 (78,282) 673,024 

Capital expenditure 6,713 10,302 5,692 5,789 (1,035) 27,461 

Net debt 60,385 17,221 85,349 7,100 (14,430) 155,625 

Number of employees (Full Time Equivalent) 6,302 5,598 5,280 4,187 - 21,367 

56


7. DISCONTINUED OPERATIONS 

7.1. Fiscal year ended March 31, 

2008 

CME recognized an additional gain of JPY 292 million resulting 

from the disposal of its CD/DVD pressing business. 

HIT’s Canadian subsidiary, which continued to suffer losses as a 

result of a continuously weak demand from North American car 

manufacturers, went into receivership in October 2007 and in 

liquidation in May 2008 and was classified as discontinued 

operations. The loss after tax from discontinued operations for 

the fiscal year ended March 31, 2008, amounted to JPY 3,415 

million. 

At March 31, 2008, RHJI classified D&M as a current asset held 

for sale in its consolidated financial statements as it had entered 

into a formal process to divest its controlling stake in D&M. The 

classification followed the Company’s assessment of the 

probability of a sale after having received several non-binding 

offers in March 2008. On June 20, 2008, the Company entered 

into a binding agreement with an investment fund advised by 

Bain Capital, LLC to tender its shares in D&M at JPY 510 per 

share or JPY 23,115 million in aggregate. In accordance with the 

provisions of IFRS on non-current assets held for sale, D&M was 

presented as discontinued operations in the consolidated 

financial statements for the fiscal year ended March 31, 2008. 

7.2. Fiscal year ended March 31, 

2009 

On September 4, 2008, the Company completed the sale of D&M. 

The result from D&M includes the net loss of JPY 999 million 

from operations for the six months ended September 30, 2008 

and the gain on disposal of JPY 11,073 million. The gain on 

disposal as reflected in the Company’s consolidated income 

statement consists of the gain of JPY 12,600 million over the 

acquisition cost less JPY 1,527 million of income contributed by 

D&M to consolidated reserves from April 1, 2005 through the 

date of effective disposal. The gain from the liquidation of HIT’s 

Canadian operations, initiated in May 2008, amounted to JPY 

1,918 million. 

7.3. Result of discontinued 

operations 

The breakdown of discontinued operations for the fiscal years 

ended March 31, 2009 and 2008 is as follows : 


Revenue 9 49,553 120,206 

Cost of sales (30,372) (76,140) 


Selling, general and administrative 

expenses 

(17,948) (36,817) 

Other income (expenses) (1,502) (4,333) 

Gain on sale 12,991 - 

Profit from operations 12,722 2,916 

Net financial expense (729) (1,090) 

Share of loss of equity accounted 


7.4. Effect of the disposals on the 

financial position 

- (55) 

Profit before tax 11,993 1,771 

Income tax expense (1) (2,948) 



Equity holders of the Company 12,166 (1,784) 

Minority interest (174) 607 


Basic and diluted earnings per share 

(in JPY) 142 (14) 

The disposal of D&M has impacted the financial position as follows: 


Cash flow from (used in) discontinued operations 

Cash and cash equivalents at the beginning of the period (181) 

Net cash used in operating activities (6,037) 

Net cash from investing activities 1,712 

Net cash from financing activities 7,288 

Effect of exchange rate fluctuations on cash held (12) 

Cash and cash equivalents at the date of the disposal 2,770 

Consideration received, satisfied in cash 23,115 

Cash disposed of (2,770) 

Net cash inflow 20,345 

57

8. ACQUISITIONS OF SUBSIDIARIES AND MINORITY INTERESTS 

8.1. Fiscal year ended March 31, 2008 

On December 14, 2007, HIT completed the acquisition of Tafime, a high-end supplier of high-pressure die-cast aluminum and 

thermoplastic injection components based in Madrid, Spain. The purchase price of JPY 14,163 million (EUR 90 million) was allocated to 

specific assets and liabilities based on their estimated fair values as of the acquisition date, with JPY 7,987 million (EUR 50.7 million) 

recorded as goodwill. The estimated fair values of assets and liabilities as of the acquisition date were based on preliminary estimates 

of fair value and were subject to subsequent revisions. The purchase price for the acquisition of Tafime was partly funded by a capital 

increase at HIT of JPY 5,337 million, which was fully subscribed by the Company and which resulted in additional goodwill of JPY 2,972 

million. The allocation of the purchase price for the acquisition of Tafime was finalized during the fiscal year ended March 31, 2009 and 

resulted in a reduction of goodwill of JPY 4,975 million, including JPY 985 million resulting from exchange rate fluctuations. 

CME acquired 100% of TDK core, renamed Creative Core, from TDK Corporation. Creative Core is engaged in the production and sale 

of music, game and educational software and was acquired to diversify CME’s activity and support further growth. 

Following the acquisition in February 2006 of 66% of Techno-Metal, formerly known as Mitsubishi Fuso Techno-Metal, and in 

accordance with the stock purchase agreement, Asahi Tec purchased the remaining 34% of Techno-Metal on August 29, 2007 for an 

amount of JPY 1,670 million. 

8.2. Fiscal year ended March 31, 2009 

RHJI increased the capital of Asahi Tec by JPY 7,769 million for purposes of (a) curing a breach of covenants by its US based subsidiary 

Metaldyne (JPY 1,800 million on July 15, 2008), (b) providing Metaldyne with additional liquidity (JPY 1,051 million on October 15, 2008), 

and (c) funding Metaldyne's bond tender (JPY 4,918 million on November 25, 2008). The additional paid in capital in Asahi Tec resulted 

in additional goodwill of JPY 1,685 million. 

On June 20, 2008, September 23, 2008 and January 29, 2009, RHJI subscribed to new shares of Phoenix Seagaia Resort for an 

aggregate amount of JPY 1,000 million, in order to cover scheduled reimbursements of its debt as well as to provide liquidity for 

working capital requirements. 

9. REVENUE 

(in JPY millions) Continuing operations Discontinued operations Consolidated 

2009 2008 2009 2008 2009 2008 

Sales 395,060 547,781 49,553 120,206 444,613 667,987 

Construction contract revenue 2,145 1,658 - - 2,145 1,658 

Property rental income 95 84 - - 95 84 

Other revenue - 543 - - - 543 

Total 397,300 550,066 49,553 120,206 446,853 670,272 

58


10. OTHER INCOME AND 

EXPENSES 


Restructuring costs (5,504) (2,874) 

Write-down of inventories (2,729) (75) 

Loss on disposal of 

Property, plant and equipment (1,764) (1,532) 

Intangible assets - (2) 

R&D expenses (1,635) (340) 

Gain on disposal of property, plant and 

equipment 

410 - 

Provisions - (118) 

Write-down of trade receivables (150) (1) 


Total (11,041) (4,594) 

The restructuring costs of JPY 5,504 million and JPY 2,874 

million for the years ended March 31, 2009 and 2008 related to 

the following subsidiaries: 


HIT (4,947) (1,924) 

Asahi Tec (542) (950) 

Niles (15) - 

Total (5,504) (2,874) 

The loss on disposal of property, plant and equipment of JPY 

1,764 million and JPY 1,532 million for the years ended March 

31, 2009 and 2008 related to the following subsidiaries: 

11. PERSONNEL EXPENSES 


Wages and salaries 77,242 91,955 

Compulsory social security 

contributions 

11,011 13,207 

Other personnel costs 5,036 10,763 

Contributions to defined 

contribution plans 

Expenses related to defined 

benefit plans 

Equity-settled share-based 

payment transactions 

26 1,069 2,040 

26 1,948 1,103 

27 1,109 841 

Others 1,059 377 

Total 98,474 120,286 

Personnel expenses are included in the following line items of 

the income statement: 


Cost of sales 77,101 95,150 


expenses 

21,373 25,136 

Total 98,474 120,286 

At March 31, 2009 and 2008, the total number of employees was 

as follows: 

(In units) 2009 2008 

Employees and management 5,485 10,460 

Workers 12,588 11,587 

Total 18,073 22,047 


Asahi Tec (1,601) (1,263) 

Niles (78) (242) 

Others (85) (27) 

Total (1,764) (1,532) 

59

12. IMPAIRMENT OF PROPERTY, PLANT, EQUIPMENT AND 

INTANGIBLE ASSETS 

For the fiscal year ended March 31, 2009 and March 31, 2008, the impairment charges related to the following subsidiaries: 


Property, 

plant and 

equipment 

Intangible 

Goodwill assets other 

than goodwill 

Total 

Property, 

plant and 

equipment 

Intangible 

Goodwill assets other 

than goodwill 

Asahi Tec 7,045 30,849 14,892 52,786 - 11,773 17,476 29,249 

CME - 3,247 4,398 7,645 - - 197 197 

HIT 6,699 6,957 25,186 38,842 - - - - 

Niles 232 9,770 - 10,002 - - - - 

Phoenix Seagaia Resort 13,993 - (9) 13,984 - - (2) (2) 

Total 27,969 50,823 44,467 123,259 0 11,773 17,671 29,444 

Total 

13. FINANCE INCOME AND 

EXPENSES 

13.1. Recognized in profit or loss 


Debt extinguishment 39,759 - 

Foreign exchange gains 

Unrealized 3,881 847 

Realized 4,446 1,678 

Gain on sale of available for sale 

financial assets 

3,301 - 

Interest income 1,761 2,971 


Finance income 53,969 5,869 

Interest expenses (19,154) (22,301) 

Foreign exchange loss 

Unrealized (6,181) (3,288) 

Realized (9,491) (4,150) 

Impairment loss on financial assets (1,298) - 

Fair value adjustment on financial 

assets 

(1,045) - 

Loss on sale of financial assets (333) - 

Others (1,198) (3,142) 

Finance expenses (38,700) (32,881) 

Net financial income (expense) 15,269 (27,012) 

13.2. Recognized directly in equity 


Foreign currency translation differences (8,165) (3,168) 

Net change in fair value of available for 

sale financial assets 

Net change in fair value available for sale 

financial assets transferred to profit or loss 


Recognized in : 

(5,057) 6,646 

(3,314) - 

Cash flow hedges (1,064) 21 

Others - (31) 

Income tax on income and expense 

recognized directly in equity 

327 (67) 

Total (17,273) 3,401 

Equity holders of the Company (13,193) 4,264 

Minority interest (4,080) (863) 

Finance income (expense) recognized 

directly in equity, net of income tax 

(17,273) 3,401 

Fair value reserve (8,367) 6,732 

Hedging reserve (652) 16 

Translation reserve (4,174) (2,484) 

Total (13,193) 4,264 

60


14. INCOME TAX BENEFIT 

14.1. Income tax benefit in the income statement 


Current tax benefit (expense) 

Current year (1,531) (4,486) 

Adjustment for prior years 2 (45) 

Total (1,529) (4,531) 

Deferred tax benefit (expense) 

Origination and reversal of temporary differences 13,517 (3,309) 

Increase (reduction) of tax rate (318) 4,011 

Recognition of previously unrecognized tax losses (3,564) 4,037 

Change in unrecognized deductible temporary differences (1,874) (22) 

Total 7,761 4,717 

Total income tax benefit excluding tax on sale of discontinued operations and share of income tax of 

equity accounted investees 

6,232 186 

Income tax benefit from continuing operations 6,233 3,134 

Income tax expense from discontinued operations 7 (1) (2,948) 

Total income tax benefit in the income statement 6,232 186 

14.2. Reconciliation of effective tax rate 

(In JPY millions) 2009 2008 

Loss for the period 131,271 61,251 

Total income tax benefit (expense) 6,232 (991) 

Loss before tax 137,503 60,260 

Income tax using the corporation tax rate 35.9 % 49,383 38.8 % 23,358 

Non-deductible expenses (1.1)% (1,483) (20.9)% (12,580) 

Tax exempt income 5.4 % 7,483 0.2 % 126 

Tax incentives - - (6.7)% (4,037) 

Effect of tax losses utilized (22.5)% (30,929) 6.1 % 3,684 

Current year losses for which no deferred tax asset was recognized (6.4)% (8,769) (17.8)% (10,741) 

Recognition of previously unrecognized tax losses (2.7)% (3,747) - - 

Change of tax rate (2.5)% (3,502) 4.9 % 2,949 

Others (1.6)% (2,204) (4.3)% (2,573) 

Total 4.5 % 6,232 0.3 % 186 

61

14.3. Income tax recognized directly in equity 


Cash flow hedges 327 (67) 

Income tax on income and expense recognized directly in equity 327 (67) 

15. PROPERTY, PLANT AND EQUIPMENT 

15.1. Costs, depreciation and impairment loss 

(In JPY millions) 2009 

Land and Machineries and 

buildings equipments 

Fixtures and 

fittings 

Under 

construction 

Others 

Total 

Costs 

Opening balance 288,163 186,916 70,997 8,972 9,504 564,552 

Acquisitions through business combinations 39 2,204 - - - 2,243 

Additions 1,928 7,903 4,670 6,721 1,101 22,323 

Transfer to investment property (380) - - (4) - (384) 

Reclassifications 794 2,981 1,904 (7,427) 1,748 - 

Disposals (758) (6,956) (3,491) (490) (1,705) (13,400) 

Effect of exchange rates (5,224) (14,197) (2,643) (958) (1,092) (24,114) 

Others 132 (201) (84) (42) (319) (514) 

Closing balance 284,694 178,650 71,353 6,772 9,237 550,706 

Depreciation and impairment loss 

Opening balance (207,046) (102,562) (57,883) (12) (4,403) (371,906) 

Depreciation charge for the period (2,758) (17,682) (5,231) - (1,889) (27,560) 

Impairment losses (15,593) (10,816) (798) (40) (722) (27,969) 

Reclassifications (520) 435 89 - (4) - 

Disposals 334 5,124 2,991 - 812 9,261 

Effect of exchange rates 943 7,481 1,411 - 594 10,429 

Others 322 (949) (11) 2 237 (399) 

Closing balance (224,318) (118,969) (59,432) (50) (5,375) (408,144) 

Carrying amount at March 31, 2009 60,376 59,681 11,921 6,722 3,862 142,562 

62



Land and Machineries and 

buildings equipments 

Fixtures and 

fittings 

Under 

construction 

Others 

Total 

Costs 


Acquisitions through business combinations 476 3,245 163 - - 3,884 

Additions 1,923 6,358 5,769 12,311 1,168 27,529 

Revaluations (14) - - - - (14) 

Transfer to investment property - - - (271) - (271) 

Transfer to assets held for sale or discontinued 

operations 

175 (8,963) (3,164) (595) (1,769) (14,316) 

Reclassifications - 5,698 536 (6,245) 11 - 

Disposals (954) (4,865) (4,553) (574) (231) (11,177) 

Effect of exchange rates (1,868) (8,826) (989) (627) (502) (12,812) 

Others 471 485 (57) (3,160) 304 (1,957) 

Closing balance 288,163 186,916 70,997 8,972 9,504 564,552 

Depreciation and impairment losses 

Opening balance (199,831) (93,826) (58,303) (200) (5,012) (357,172) 

Depreciation charge for the period (3,504) (19,654) (5,632) - (1,672) (30,462) 

Impairment losses (619) (365) (10) (13) - (1,007) 


operations 

(4,250) 5,020 2,147 174 1,729 4,820 

Disposals 599 2,991 3,227 - 99 6,916 

Effect of exchange rates 590 3,461 700 - 99 4,850 

Others (31) (189) (12) 27 354 149 

Closing balance (207,046) (102,562) (57,883) (12) (4,403) (371,906) 

Carrying amount at March 31, 2008 81,117 84,354 13,114 8,960 5,101 192,646 

63

15.2. Leased assets 

At March 31, 2009 and 2008, property, plant and equipment 

comprised leased assets amounting to JPY 2,894 million and JPY 

2,290 million, respectively, net of depreciation. 

15.3. Impairment losses 

An impairment test was performed on the carrying values of 

certain property, plant and equipment, for which an indication of 

impairment existed at March 31, 2009. 

Following review of the recoverable amount, the Company 

recorded an impairment loss of JPY 27,969 million, broken down 

by consolidated subsidiary as follows : 


Asahi Tec 7,045 603 

HIT 6,699 - 

Niles 232 - 

Phoenix Seagaia Resort 13,993 404 

Total 27,969 1,007 

The calculations of the value in use have been based on 

judgments, estimates and assumptions. The calculations are 

particularly sensitive to above key assumptions. Any change in 

interest rates, risk premiums, long-term growth rates and 

actual operating performance, could have a material adverse 

impact on the concluded recoverable amounts. 

A decrease of the growth rate by 1% and an increase of the 

discount rate by 1% would result in the following additional 

impairment charges as follows: 

(in JPY millions) 

Growth rate Discount rate 

Asahi Tec 275 892 

HIT - - 

Phoenix Seagaia Resort 1,200 2,163 

Total 1,475 3,055 

The recoverable amounts were determined using the income 

approach, based on the following assumptions: 

• Cash-flows were projected based on the consolidated 

subsidiaries' managements 5-year business plan. For the 

calculation of the terminal or residual value for the period 

beyond the discrete projections, the Company used the 

Gordon Growth Model and applied a long-term growth rate 

of 2.5% for Asahi Tec's US based subsidiary Metaldyne, 

between (2.0)% and 2.5% for HIT, and 0.5% for Phoenix 

Seagaia Resort. 

• The present value of estimated future cash flows and 

residual cash flows was determined using the weighted 

average cost of capital (WACC) of a group of comparable, 

publicly traded companies. The calculation utilized (a) a peer 

group average as pretax required cost of debt and (b) the 

industry debt-to-capital ratio and the observed median of 

betas in the group. The resulting WACC, which was used in 

the analysis, was between 15.0% and 16% for Asahi Tec's US 

based subsidiary Metaldyne, between 7.9% and 11.4% for 

HIT, and 7.0% for Phoenix Seagaia Resort. 

64


16. INTANGIBLE ASSETS 

16.1. Costs, amortization and impairment loss 


Goodwill 

Patents and 

trademarks 

Development 

costs 

Software Others Total 

Costs 

Opening balance 91,290 132,345 2,320 5,269 618 231,842 

Acquisitions through business combinations 1,685 - - - - 1,685 

Additions - - 1,000 243 47 1,290 

Reclassifications (3,990) 3,990 - - - - 

Disposals (801) (388) (129) (89) (22) (1,429) 

Effect of exchange rates (3,991) (15,331) (737) 75 (2) (19,986) 

Others 9 (59) (1) 162 - 111 

Closing balance 84,202 120,557 2,453 5,660 641 213,513 

Amortization and impairment losses 

Opening balance (11,061) (56,173) (596) (2,603) (164) (70,597) 

Amortization charge for the period (1) (4,782) (162) (1,386) (387) (6,718) 

Impairment losses (50,823) (43,854) (611) (2) - (95,290) 

Disposals 388 - 127 294 20 829 

Effect of exchange rates 732 7,965 165 89 2 8,953 

Others 59 153 1 (96) - 117 

Closing balance (60,706) (96,691) (1,076) (3,704) (529) (162,706) 

Carrying amount at March 31, 2009 23,496 23,866 1,377 1,956 112 50,807 


Goodwill 

Patents and 

trademarks 

Development 

costs 

Software Others Total 

Costs 


Acquisitions through business combinations 12,776 - - 698 6 13,480 

Additions - 109 617 427 23 1,176 

Disposals - - (397) (20) - (417) 


operations 

(7,248) (10,975) (2,618) (1,713) (1,079) (23,633) 

Effect of exchange rates (6,830) (6,526) (2) (207) (34) (13,599) 

Others 107 551 1 (67) (888) (296) 

Closing balance 91,290 132,345 2,320 5,269 618 231,842 

Amortization and impairment losses 

Opening balance (621) (37,322) (1,288) (2,640) (140) (42,011) 

Amortization charge for the period - (7,173) (260) (1,337) (30) (8,800) 

Impairment losses (11,773) (17,671) - - - (29,444) 

Disposals - - 397 33 92 522 


operations 

- 3,273 533 1,320 - 5,126 

Effect of exchange rates 1,351 3,072 - 14 - 4,437 

Others (18) (352) 22 7 (86) (427) 

Closing balance (11,061) (56,173) (596) (2,603) (164) (70,597) 

Carrying amount at March 31, 2008 80,229 76,172 1,724 2,666 454 161,245 

65

16.2. Impairment losses 

16.2.1. Analysis 

In accordance with IAS 36 (Impairment of Assets), the Company reviewed the carrying values of its intangible assets at March 31, 2009 

and 2008. As a result the Company recorded impairment charges of JPY 95,290 million and JPY 29,444 million, respectively. 

The impairment charge for the fiscal year ended March 31, 2009 and March 31, 2008 mainly related to goodwill and intangible assets 

such as patents, tradename and trademark and certain customer relationships. 

For the fiscal year ended March 31, 2009 and March 31, 2008, the impairment related to the following subsidiaries: 


Goodwill 

Intangible 

assets other 

than goodwill 

Total 

Goodwill 

Intangible 

assets other 

than goodwill 

Asahi Tec 30,849 14,892 45,741 11,773 17,476 29,249 

CME 3,247 4,398 7,645 - 197 197 

HIT 6,957 25,186 32,143 - - - 

Niles 9,770 - 9,770 - - - 

Phoenix Seagaia Resort - (9) (9) - (2) (2) 

Total 50,823 44,467 95,290 11,773 17,671 29,444 

Total 

16.2.2. Impairment testing for cash generating 

units containing goodwill 

Goodwill is allocated to the Company’s cash generating units 

(“CGU”). Except for Metaldyne and HIT, the Company identified 

its operating segments as primary business segments as 

disclosed in note 6 to the consolidated financial statements as 

CGU’s. For Metaldyne, goodwill has been allocated to its 

operating segments, which were identified as CGU’s at the time 

of the acquisition of Metaldyne by Asahi Tec. HIT identified its 

two main geographical business segments as CGU's. 

Goodwill at March 31, 2009 and 2008 can be broken down by 

CGU as follows : 


Asahi Tec 

Asahi Tec 1,110 3,986 

Metaldyne 

Chassis North America - 4,315 

European components 2,206 8,108 

Vibration control products - 2,384 

Sintered products 1,401 11,150 

Powertrain - 4,031 

CME 1,621 4,868 

HIT - - 

Europe 10,669 23,909 

Americas 4,626 5,844 

Niles 1,863 11,634 

Total 23,496 80,229 

Goodwill decreased from JPY 80,229 million to JPY 23,496 

million due to the following: 


Opening balance 80,229 

Impairment losses (50,823) 

Final purchase price allocation of Tafime (3,990) 

Effect of exchange rates (3,259) 

Additional goodwill at Asahi 1,685 

Disposals during the period (413) 

Others (67) 

Closing balance 23,362 

The Company determined the potential impairment of its CGU's 

containing goodwill by comparing their carrying value, including 

goodwill, with their recoverable amount. The assessment of the 

recoverable amount included a review and analysis of (a) 

publicly observed market prices for the publicly listed 

consolidated subsidiaries, (b) valuation multiples for groups of 

publicly listed, comparable companies and (c) the projected 

financial performance based on budgets and business plans 

prepared by the consolidated subsidiaries' respective 

managements. 

The Company retained the value in use to determine the 

recoverable amount of the CGU's containing goodwill. The fair 

value of the Company's publicly listed subsidiaries resulted in 

lower amounts and could not be reliably determined for the 

privately held subsidiaries. The value in use for each of Asahi 

Tec, HIT, Niles, CME and Metaldyne's CGU's was determined by 

discounting their future cash flows, based on the subsidiaries' 

66


managements 5 year business plans. For the calculation of the terminal or residual value for the period beyond the discrete 

projections, the Company used the Gordon Growth Model. The resulting residual values were validated by comparing the implied 

EBITDA valuation multiples with currently applicable market multiples. 

The present value of estimated future cash flows and residual cash flows was determined using the WACC of a group of comparable 

publicly traded companies. The calculation utilized (a) a peer group average as pre-tax required cost of debt, except for CME for which 

the effective interest rate on its debt was used as a proxy for the cost of debt and (b) the industry debt-to-capital ratio and the 

observed median of betas in the group. 

The main assumptions used in determining the recoverable amount of the various CGU's can be summarized as follows: 

(In %) 2009 2008 

Growth rate WACC Growth rate WACC 

Asahi Tec 0.0 7.1 1.6 8.5 

CME 1.0 11.0 4.0 6.2 

HIT 1.0 8.9 1.0 8.8 

Metaldyne 2.5 21.0 3.0 12.5 

Niles 0.0 8.3 0.5 6.4 

The calculations of the value in use have been based on judgments, estimates and assumptions. The calculations are particularly 

sensitive to above key assumptions. Any change in interest rates, risk premiums, long-term growth rates and actual operating 

performance, could have a material adverse impact on the concluded recoverable amounts. The conclusions of the income based 

approach were corroborated by the market multiple approach for comparable publicly traded companies. 

16.2.3. Impairment testing for intangible assets other than goodwill 

In view the economic downturn and its impact on the consolidated subsidiaries’ projected future cash flows, an impairment test has 

been performed on certain intangible assets. 

The Company recorded an aggregate impairment charge of JPY 44,467 million on certain intangible assets of HIT (JPY 25,186 million), 

Metaldyne (JPY 14,892 million) and CME (JPY 4,398 million). The impairment charges related to various intangible assets and resulted 

from the calculation of their value in use, which was determined using the Gordon Growth model. The main assumptions can be 

summarized as follows : 

CME 

HIT 

2009 2008 

Growth rate WACC Growth rate WACC 

Between 0% 

and (7.0)% 

Between 2.5% 

and (2.0)% 

Metaldyne 2.5% 

Between 7.9% 

and 11.4% 

Between 15.0% 

and 21.0% 

9.0% 0% 9.0% 

3% 

- - 

Between 12.0% 

and 13.5% 

67

The calculations of the value in use have been based on judgments, estimates and assumptions. The calculations are particularly 

sensitive to above the growth rate and WACC used. Any change in interest rates, risk premiums, long-term growth rates and actual 

operating performance, could have a material adverse impact on the concluded recoverable amounts. 

A decrease of the growth rate by 1% and an increase of the discount rate by 1% would result in the following additional impairment 

charges: 


Goodwill 

Intangible assets other 

than goodwill 

Total 

Growth 

rate 

WACC 

Growth 

rate 

WACC 

Growth 

rate 

Asahi Tec - - - - - - 

CME 60 119 109 107 169 226 

HIT 6,664 6,789 123 660 6,787 7,449 

Metaldyne 443 943 207 543 649 1,486 

Niles 953 1,811 - - 953 1,811 

Total 8,120 9,662 439 1,310 8,558 10,972 

WACC 

17. INVESTMENTS IN EQUITY ACCOUNTED INVESTEES 

17.1. Financial informations 

RHJI, through its wholly owned subsidiary RHJ Shaklee Holding S.A., holds a 42.5% equity investment in Shaklee, a provider of 

premium quality and natural nutrition, personal care, household and air and water treatment products. Shaklee is listed on the 

Jasdaq Securities Exchange, Inc. under the ticker 8205. During the fiscal year ended March 31, 2009, RHJI acquired 457,000 additional 

existing shares of Shaklee for an aggregate consideration of JPY 276 million, increasing its total ownership from 40.7%. 

RHJI holds a 20.0% ownership interest in U-shin, a Japanese manufacturer of electromechanical components for automobiles. U-shin 

is listed on the Tokyo Stock Exchange, Inc. under the ticker 6985.T. As U-shin’s fiscal year ends on November 30, the Company used 

financial information for the twelve months ended February 28, 2009 and 2008, compiled from publicly disclosed quarterly financial 

information, for purposes of preparing the Company’s consolidated financial statements as of and for the fiscal year ended March 31, 

2009 and 2008. 

RHJI holds 49.9% ownership interest in SigmaXYZ, a Japanese ICT consulting venture with Mitsubishi Corporation. 

The summary financial information (100%) is as follows: 

(in JPY millions) Shaklee SigmaXYZ U-shin 

March 31, 

2009 

March 31, 

2008 

March 31, 

2009 

March 31, 

2008 

February 28, 

2009 

February 28, 

2008 

Assets 

Non-current 19,725 21,325 1,015 - 24,712 30,819 

Current 11,725 11,163 374 - 43,614 44,517 

Equity and liabilities 

Equity 4,139 5,229 417 - 30,653 33,854 

Non-current liabilities 19,360 20,258 193 - 13,907 12,976 

Current liabilities 7,951 7,001 779 - 23,766 28,506 

Revenue 24,685 27,322 1,152 - 70,772 77,963 

Profit (loss) for the year 1,705 1,441 (1,529) - (282) 339 

68


17.2. Changes during the year 


Opening balance 22,321 21,633 

Acquisitions 1,361 - 

Net results 283 858 

Impairment losses (10,888) - 

Dividends (352) - 

Effect of exchange rates (298) (12) 

Others (122) (158) 

Closing balance 12,305 22,321 

The share of loss of equity accounted investees of JPY 10,605 million is split as follows: 


Profit (loss) 

for the period 

Impairment 

loss 

Shaklee 725 (6,050) (5,325) 

SigmaXYZ (763) - (763) 

U-shin (56) (4,838) (4,894) 

Equity accounted investees at Asahi Tec 377 - 377 

Total 283 (10,888) (10,605) 

Total 

17.3. Goodwill and impairment of goodwill 

The goodwill relating to equity accounted investees is as follows: 

(in JPY millions) Note Shaklee SigmaXYZ U-shin 

March 31, 

2009 

March 31, 

2008 

March 31, 

2009 

March 31, 

2008 

March 31, 

2009 

For purposes of the goodwill impairment test, the Company recognized impairment loss on Shaklee and U-shin for the fiscal year 

ended March 31, 2009 for respectively JPY 6,050 million and JPY 2,330 million. In addition to the goodwill impairment, the Company 

recognized an impairment on its financial asset held in U-shin for JPY 2,508 million during the fiscal year ended March 31, 2009. 

The recoverable amount of RHJI's investments in Shaklee and U-shin was based on the estimation of their fair value, which was 

determined by applying publicly observed valuation multiples on their current and projected earnings, derived from their publicly 

disclosed forecasts for the fiscal year ending March 31, 2010. 

March 31, 

2008 

Investment 12,520 12,244 1,085 - 8,038 8,038 

Equity as of acquisition date 5,139 5,139 2,000 - 28,538 28,538 

Ownership 35 42.5% 40.7% 49.0% - 20.0% 20.0% 

Goodwill 4,102 10,152 87 - - 2,330 

69

18. OTHER INVESTMENTS 


Available for sale financial assets 5,636 19,654 

Cash guarantees and deposits 104 104 

Derivatives used for hedging 117 141 

Others - 3,104 

Total 5,857 23,003 

The available for sale financial assets are recorded at fair market value for the fiscal year ended March 31, 2009 and March 31, 2008 

and the details are as follows: 


Commercial International Bank of Egypt ("CIB") 5,353 10,369 

Others undisclosed investments 283 9,285 

Total 5,636 19,654 

The Company’s exposure to credit, currency and interest rate risks related to other investments is disclosed in note 30. During the 

fiscal year ended March 31, 2009, RHJI disposed of a non-controlling minority investment for JPY 9,030 million, initially acquired for 

JPY 5,600 million. At March 31, 2008, this investment was recorded at a fair value that equaled the ultimate selling price. 

19. DEFERRED TAX ASSETS AND LIABILITIES 

19.1. Recognized deferred tax assets and liabilities 

Deferred tax assets and liabilities are attributable to the following: 


Assets Liabilities Net Assets Liabilities Net 

Property, plant and equipment (172) (11,933) (12,105) 2,243 (26,028) (23,785) 

Intangible assets 6 (10,560) (10,554) 90 (21,595) (21,505) 

Other investments 1 (19) (18) 30 (30) - 

Inventories 426 (46) 380 529 (331) 198 

Loans and borrowings 1 - 1 13 (81) (68) 

Employee benefits 3,037 - 3,037 8,659 - 8,659 

Provisions 165 - 165 769 (54) 715 

Other items 4,762 (2,172) 2,590 3,838 (1,262) 2,576 

Tax value of loss carry-forwards 4,500 - 4,500 12,225 - 12,225 

Total 12,726 (24,730) (12,004) 28,396 (49,382) (20,985) 

Set off of tax (7,728) 7,728 - (24,462) 24,462 - 

Net tax assets (liabilities) 4,998 (17,002) (12,004) 3,934 (24,920) (20,985) 

70


19.2. Movement in temporary differences during the period 


Opening 

balance 

Change in the 

consolidation 

scope 

Effect of 

exchange rates 

Recognized 

in profit 

or loss 

Recognized 

in equity 

Closing 

balance 

Property, plant and equipment (23,785) (643) 871 11,070 382 (12,105) 

Intangible assets (21,505) (1,138) 802 10,311 976 (10,554) 

Other investments - - - (97) 79 (18) 

Inventories 198 - 30 163 (11) 380 

Loans and borrowings (68) - 7 62 - 1 

Employee benefits 8,659 - (66) (5,556) - 3,037 

Provisions 715 - (11) (539) - 165 

Other items 2,575 88 92 (343) 178 2,590 

Tax value of loss carry-forwards 12,226 - (399) (7,312) (15) 4,500 

Net tax assets (liabilities) (20,985) (1,693) 1,326 7,759 1,589 (12,004) 


Opening 

balance 

Change in the 

consolidation 

scope 

Effect of 

exchange rates 

Recognized 

in profit 

or loss 

Recognized 

in equity 

Other 

movements 

Closing 

balance 

Property, plant and equipment (31,793) 874 1,330 5,804 - - (23,785) 

Intangible assets (30,538) 2,746 1,571 4,716 - - (21,505) 

Other investments (761) 148 - 595 18 - - 

Inventories 687 (1,089) (35) 635 - - 198 

Loans and borrowings - - (14) (54) - - (68) 

Employee benefits 9,508 (2,808) (140) 2,099 - - 8,659 

Provisions 1,885 (1,044) (5) (121) - - 715 

Other items 7,517 (1,530) (1,109) (1,084) (54) (1,165) 2,575 

Tax value of loss carry-forwards 20,629 (186) (344) (7,873) - - 12,226 

Net tax assets (liabilities) (22,866) (2,889) 1,254 4,717 (36) (1,165) (20,985) 

19.3. Unrecognized deferred tax assets 

Deferred tax assets have not been recognized in respect of the following items: 


Deductible temporary differences 12,103 6,554 

Tax losses 29,696 42,640 

Total 41,799 49,194 

71

The decrease of the unrecognized deferred tax assets from JPY 

49,194 million as of March 31, 2008 to JPY 41,799 million as of 

March 31, 2009 is mainly due to : 


Deductible 

temporary 

differences 

Tax losses 

Total 

Opening balance 6,554 42,640 49,194 

Utilization - (11,168) (11,168) 

Additions 4,831 (919) 3,912 

Effect of exchange 

rates 

1,133 1,033 2,166 

Recognition (415) (1,890) (2,305) 

Closing balance 12,103 29,696 41,799 

The decrease of the tax losses carried forward from JPY 146,614 

million as of March 31, 2008 to JPY 97,707 million as of March 

31, 2009 is mainly due to : 


Opening balance 149,614 

Effect of exchange rates (2,727) 

Tax losses expired during the period (28,345) 

Tax losses utilized following debt extinguishment at Metaldyne (28,522) 

Legal restructuring at HIT (10,421) 

Additions for the period 18,257 

Others (149) 

Closing balance 97,707 

19.4. Tax losses 

At March 31, 2009, RHJI and its subsidiaries had net operating 

losses in aggregate of approximately JPY 97,707 million, which 

are available to be offset against future taxable income. These 

losses, if not utilized, will expire as follows : 


Less than one year 5,291 28,345 

Between one and five years 13,286 18,159 

More than five years 79,130 103,110 

Total 97,707 149,614 

20. INVENTORIES 


Gross Allowance Net Gross Allowance Net 

Raw materials and consumables 9,582 (50) 9,532 14,613 (6) 14,607 

Work in progress 5,898 (864) 5,034 10,146 (883) 9,263 

Finished goods 11,504 (358) 11,146 14,039 (173) 13,866 

Total 26,984 (1,272) 25,712 38,798 (1,062) 37,736 

Inventories are stated net of allowances, which amounted to JPY 1,272 million and JPY 1,062 million at March 31, 2009 and 2008, 

respectively. 

72


21. TRADE AND OTHER 

RECEIVABLES 


Trade receivables and 

prepayments 

33,584 65,915 

Other receivables 3,924 8,173 

Total 30 37,508 74,088 

Trade receivables are shown net of impairment losses which 

amounted to JPY 381 million and JPY 372 million at March 31, 

2009 and 2008, respectively. 

The decrease of trade receivables and prepayments is mainly 

due to the decrease of revenue and the foreign exchange impact 

of USD and EUR versus JPY at March 31, 2009. 

Certain consolidated businesses have entered into factoring 

agreements with financial institutions whereby trade receivables 

are sold. As of March 31, 2009 and 2008, JPY 12,360 million and 

JPY 13,422 million worth of receivables were sold under these 

agreements and derecognized accordingly as no financial risk is 

retained. 

22. CASH AND CASH 

EQUIVALENTS 


Cash at bank and at hand 20,594 19,911 

Term deposits 50,472 52,612 

Others 1,270 - 

Cash and cash equivalents 72,336 72,523 

Bank overdrafts (1) (65) 

Cash and cash equivalents in the 

statement of cash flows 

72,335 72,458 

Further information on the Company’s exposure to credit, 

interest rate and foreign currency risks related to cash and cash 

equivalents is disclosed in note 30. 

The construction contracts in progress included in the trade 

receivables represented a total amount of JPY 991 million and 

JPY 1,242 million for the years ended March 31, 2009 and 2008 

respectively. 

Further information on the Company’s exposure to credit-and 

foreign currency risks related to trade and other receivables is 

disclosed in note 30. 

73

23. EQUITY 

23.1. Reconciliation of movement in equity 


Share 

capital 

Attributable to equity holders of the Company 

Reserve for 

Share Translation 

treasury 

premium reserve 

shares 

Fair value 

reserve 

Other 

reserves 

Retained 

earnings 

Minority 

interest 

Balance at April 1, 2007 88,491 91,334 3,263 - 2,113 24,011 (12,287) 196,925 64,177 261,102 

Share-based payments - - - - - - 838 838 326 1,164 

Purchase of treasury shares - - - (2,329) - - - (2,329) - (2,329) 

Total recognized income and 

expense 

Total 

Total 

equity 

- - (2,484) - 6,732 16 (33,221) (28,957) (28,893) (57,850) 

Scope changes - - 312 - (5) 101 - 408 2,867 3,275 

Dividends - - - - - - - - (256) (256) 

Others - - - - - 13 - 13 107 120 

Balance at March 31, 2008 88,491 91,334 1,091 (2,329) 8,840 24,141 (44,670) 166,898 38,328 205,226 

Balance at April 1, 2008 88,491 91,334 1,091 (2,329) 8,840 24,141 (44,670) 166,898 38,328 205,226 

Share-based payments - - - - - - 1,285 1,285 126 1,411 

Purchase of treasury shares - - - (536) - - - (536) - (536) 

Reclassifications - - - - - (1,319) 1,319 - - - 

Total recognized income and 

expense 

- - (4,174) - (8,367) (652) (116,043) (129,236) (19,308) (148,544) 

Scope changes - - 2,208 - (48) (251) - 1,909 (11,992) (10,083) 

Dividends - - - - - - - - (8) (8) 

Balance at March 31, 2009 88,491 91,334 (875) (2,865) 425 21,919 (158,109) 40,320 7,146 47,466 

23.2. Share capital and share premium 

At March 31, 2009, the share capital of RHJI amounted to EUR 

664,424,086 and is represented by 85,545,547 shares without 

nominal value. All shares are listed on Euronext Brussels, have 

the same rights and par accounting value and are fully paid up. 

Each share entitles the holder to one voting right. 

The Board of Directors is expressly authorized, in the event of a 

public takeover bid for the securities of RHJI, to increase RHJI’s 

capital, in accordance with Article 607 of the Belgian Companies 

Code. Such authority was granted for a period of five years 

commencing April 26, 2005. If the Board of Directors decides to 

increase the capital of RHJI pursuant to its authority under this 

Article, such increase will be deducted from the remaining part 

of the authorized capital, which amounted to EUR 663,955,470 

(JPY 88,429 million) at March 31, 2009. 

The Extraordinary Shareholders' meeting held on September 16, 

2008, renewed the general share buy-back authorization for an 

18 month period beginning on September 16, 2008 as well as the 

share-buy back authorization for "serious and imminent harm" 

circumstances, under which the Board of Directors is authorized 

to purchase own shares for a period of three years from the date 

of publication of an extract of the minutes of the Extraordinary 

Shareholders' meeting. 

Based on transparency declarations received by RHJI in 

accordance with Belgian rules and RHJI’s Articles of 

Association, five shareholders have notified RHJI of their 

holdings (see Shareholders’ Information, p. 124). 

23.3. Translation reserve 

The translation reserve comprises all foreign currency exchange 

differences arising from the translation of the financial 

statements of foreign operations. 

23.4. Reserve for treasury shares 

The reserve for the Company's own shares comprises the cost of 

the Company's shares held by RHJI. At March 31, 2009, RHJI 

held 1,145,004 shares of its own shares compared to 1,323,513 

shares as at March 31, 2008. During the fiscal year ended 

March 31, 2009, RHJI purchased 627,247 of its treasury shares 

and distributed 805,756 shares as a result of certain share 

grants and the vesting of restricted stock units granted to 

certain employees on October 1, 2007. 

74


23.5. Fair value reserve 

The fair value reserve comprises the gains or losses on available 

for sale financial assets, except for impairment losses and 

foreign exchange gains and losses, until the financial assets are 

derecognized. 

23.6. Hedging reserve 

As at March 31, 2009, and 2008, the hedging reserve is included 

in the consolidation reserves for respectively JPY (573) million 

and JPY 21 million. The hedging reserve comprises the effective 

portion of the accumulated net change in the fair value of the 

cash flow hedging instruments related to hedged transactions 

that have not yet occurred. 

23.7. Minority interest 

23.7.1. Breakdown by portfolio company 


Asahi Tec 5,935 16,365 

CME 844 5,206 

D&M - 12,671 

HIT - 3,396 

Niles 271 576 

Others 96 114 

Total 7,146 38,328 

23.7.2. Movement during the period 



Share of net loss of subsidiaries (25,826) (28,030) 

Exit from consolidation scope 

D&M 

Balance at the beginning of the 

period 

(12,671) - 

Share of net loss during the period 518 - 

Asahi Tec - (638) 

HIT (181) - 

Impact of IAS 27 10,598 - 

Exchange losses (3,938) (681) 

Changes in ownership 343 3,505 

Others (25) (5) 


In accordance with IAS 27, losses attributable to minority 

interest of HIT and Metaldyne for respectively JPY 6,210 million 

and JPY 4,388 million were attributed to the equity holders of the 

Company as losses can't be allocated to minority interest, 

except if they would have a binding obligation to cover such 

losses. 

75

24. EARNINGS PER SHARE 

The calculation of basic and diluted earnings per share is based on the loss for the period attributable to shareholders of the Company 

and the weighted average number of shares outstanding during the year, net of treasury shares. 


Continuing 

operations 

Discontinued 

operations 

Total 

Continuing 

operations 

Discontinued 

operations 

Profit (loss) for the period (143,263) 11,992 (131,271) (60,074) (1,177) (61,251) 

Total 

Less share of minority interest in the profit (loss) for the 

period 

Profit (loss) for the period attributable to shareholders of 

the Company 

(15,054) (174) (15,228) (28,637) 607 (28,030) 

(128,209) 12,166 (116,043) (31,437) (1,784) (33,221) 

Issued ordinary shares at April 1, net of treasury shares 84,222,034 84,222,034 84,222,034 85,545,547 85,545,547 85,545,547 

Weighted effect of treasury shares 

Acquired during the period (381,249) (381,249) (381,249) (445,091) (445,091) (445,091) 

Distributed during the period 376,805 376,805 376,805 - - - 

Weighted average number of ordinary shares as at March 

31, net of treasury shares 

84,217,590 84,217,590 84,217,590 85,100,456 85,100,456 85,100,456 

Basic and diluted profit (loss) per share (in JPY) (1,522) 144 (1,378) (369) (21) (390) 

25. LOANS AND BORROWINGS 

Consolidated indebtedness outstanding consisted of borrowings under (1) senior credit facilities, (2) subordinated credit facilities, (3) 

term loans from non-banker lenders, (4) other secured and unsecured bank loans and (5) finance leases. At March 31, 2009, JPY 

129,707 million of borrowings were outstanding under the senior credit facilities compared to JPY 155,356 million at March 31, 2008. 

The facilities generally contain a number of financial covenants, other customary terms and conditions and/or are collaterized by 

certain assets of the business and shares of the subsidiaries. The subordinated debt amounted to JPY 31,217 million at March 31, 

2009 compared to JPY 57,572 million at March 31, 2008. The subordinated debt generally has secondary claims over the same 

collateral as provided for the senior credit facilities, in addition to requiring the consolidated businesses to comply with the same kind 

of covenants.Term loans from non-banker lenders and other secured and unsecured bank loans amounted to JPY 23,171 million at 

March 31, 2009 compared to JPY 9,810 million at March 31, 2008. Obligations under finance leases amounted to JPY 4,916 million at 

March 31, 2009 compared to JPY 5,410 million at March 31, 2008. 


Non-current Current Total Non-current Current Total 

Bank loans (including bank overdrafts) 75,792 85,132 160,924 184,853 28,075 212,928 

Finance lease liabilities 2,665 2,251 4,916 3,292 2,118 5,410 

Other loans and borrowings 15,320 7,851 23,171 8,624 1,186 9,810 

Total 93,777 95,234 189,011 196,769 31,379 228,148 

This note provides information about the contractual terms of the Company’s loans and borrowings. For more information about the 

Company’s exposure to interest rate and foreign currency risk, see note 30. 

76


The loans and borrowings are as follows: 



Asahi Tec 73,601 5,765 79,366 110,128 7,329 117,457 

CME 217 1,240 1,457 297 220 517 

HIT 2,639 68,992 71,631 73,439 137 73,576 

Niles 9,824 18,502 28,326 4,722 23,019 27,741 

Phoenix Seagaia Resort 6,411 733 7,144 7,106 671 7,777 

RHJI and its management companies - 2 2 3 3 6 

RHJ Shaklee Holding 1,085 - 1,085 1,074 - 1,074 

Total 93,777 95,234 189,011 196,769 31,379 228,148 

25.1. Bank loans 

25.1.1. Terms and debt repayment schedule 

Bank loans are payable as follows: 


Senior credit 

facilities 

Subordinated 

credit facilities 

Total 

Senior credit 

facilities 

Subordinated 

credit facilities 

Less than one year 60,676 24,456 85,132 28,075 - 28,075 

Between one and five years 68,910 6,761 75,671 75,292 27,478 102,770 

More than five years 121 - 121 51,989 30,094 82,083 

Total 129,707 31,217 160,924 155,356 57,572 212,928 

Total 

25.1.2. Asahi Tec 

At March 31, 2009, Asahi Tec had JPY 79,367 million in 

indebtedness outstanding, of which JPY 52,878 million at its US 

subsidiary Metaldyne. The decrease in total indebtedness by JPY 

38,090 million compared to March 31, 2008, mainly resulted 

from (a) Metaldyne’s successful tender for JPY 30,422 million, 





The bond tender was financed by a USD 50 million investment 

from Asahi Tec, funded by RHJI’s subscription to newly issued 

shares of Asahi Tec for JPY 4,917 million, increasing its 

ownership in Asahi Tec from 45.3% to 60.18%. In addition, 

certain of Metaldyne’s leading customers provided Metaldyne 

with USD 60 million funding for the bond tender offer, in the 

form of loans to Metaldyne. From the total proceeds of USD 110 

million, Metaldyne used USD 60.1 million to pay for the tendered 

bonds. 

Although at March 31, 2009, Metaldyne was in compliance with 

the financial covenants of the term, revolving and synthetic 

facilities, it defaulted on a payment of interest that fell due 

under its term loan and entered into a forbearance agreement 

with its lenders until May 30, 2009. Despite this forbearance 

agreement and Asahi Tec’s continued support and the resulting 

reduction of Metaldyne’s indebtedness, Metaldyne’s financial 

performance was heavily affected by car production in the US 

that continued to fall beyond expectations. Faced with its own 

challenges, Asahi Tec was no longer in a position to further 

support Metaldyne, which on May 27, 2009, filed a voluntary 

petition to reorganize under Chapter 11 of the U.S. Bankruptcy 

Code, shortly after Chrysler, one of its main customers, also 

filed for protection under Chapter 11. 

Excluding Metaldyne, Asahi Tec had JPY 26,488 million in 

indebtedness outstanding at March 31, 2009 compared to JPY 

34,929 million at March 31, 2008, the decrease mainly resulting 

from the above mentioned cancellation by Chrysler of preferred 

shares worth JPY 6,082 million. Asahi Tec’s indebtedness 

included (a) JPY 15,356 million senior credit facilities, (b) JPY 

4,000 million subordinated bank debt, (c) JPY 1,652 million 

leasing obligations and (d) JPY 5,203 million preferred securities 

classified as debt issued to former holders of Metaldyne notes. 

77

Excluding Metaldyne, Asahi Tec’s effective interest rates on its 

consolidated borrowings under its senior and subordinated 

credit facilities at March 31, 2008 were 2.75% and 4.66% 

respectively. Asahi Tec is likely to breach certain financial 

covenants under its credit agreements in the course of the fiscal 

year ending March 31, 2010. Asahi Tec is currently seeking a 

waiver of covenants from its lenders. In the event that Asahi Tec 

were not successful in obtaining such a waiver, it would be in 

default of its obligations under its credit agreements, which 

would cast significant doubt on Asahi Tec’s ability to operate as a 

going concern. 

25.1.3. HIT 

At March 31, 2009, HIT had outstanding indebtedness of EUR 

546.1 million (JPY 71,631 million) compared to EUR 467.5 million 

(JPY 73,576 million) at March 31, 2008. The credit facilities at 

March 31, 2009, included EUR 317.5 million senior and EUR 99.5 

million mezzanine facilities, EUR 33.4 million revolving facility 

and a EUR 90.8 million PIK (Payable in Kind) facility. On 

December 29, 2008, HIT reached several agreements in view of 

the liquidity shortfall that resulted from collapsing demand. 

HIT’s lenders agreed to a standstill, originally until March 31, 

2009, but extended twice. Furthermore, certain of HIT’s main 

customers and a key supplier provided for additional liquidity of 

EUR 30 million and compensation for reduced volumes. Finally, 

RHJI provided secured financing up to EUR 20 million, in the 

form of factoring -and sale and lease back arrangements. 



was approved by HIT’s lenders on May 25, 2009 and closed in 

July 2009. As part of the restructuring, the Company invested 

EUR 50 million in exchange for a controlling 51% stake in 

Honsel. The remaining 49% of the group is held by Honsel’s 

former senior term lenders following a debt-for-equity swap, 

which resulted in HIT’s total outstanding secured term debt of 

approximately EUR 507.8 million being reduced to EUR 140 


30 million mezzanine term loan, all of which are held by 

Honsel’s former senior term lenders. Honsel’s existing EUR 40 

million revolving credit facility, as well as EUR 50 million of 

financing from the Company and certain of Honsel’s key 

customers and suppliers, remained in place. 

The interest rates on Honsel’s new senior term are determined 

as Euribor plus 5%. According to the terms of the new senior 

credit, Honsel must ensure that, during a period of three years 

after the closing date, it has hedging arrangements in place to 

cause at least 66 and 2/3% of the outstanding amounts under 

the senior debt and the Customer Financing to bear interest at a 

fixed or capped rate. The new mezzanine facility will pay Euribor 

+ 5% cash interest and 5% PIK interest. Honsel may at any time 

during the life of the Mezzanine Facility elect to have all interest 

capitalized at the end of each interest period, provided that, 

following the exercise of such election by the Company, interest 

shall accrue at a fixed rate of 16.00% PIK per annum. 

25.1.4. Niles 

At March 31, 2009, Niles had JPY 28,326 million of indebtedness 

outstanding on a consolidated basis, compared to JPY 27,741 

million a year earlier. The credit facilities included senior term 

loans (JPY 10,455 million), revolving loans (JPY 7,997 million), an 

unsecured bullet loan (JPY 2,167 million), finance leases (JPY 

2,245 million), a bullet loan secured by a cash deposit from RHJI 

(JPY 2,500 million) and non-bank debt from a major stakeholder 

(JPY 2,500 million). 


total capital injection of JPY 6,000 million of which JPY 3,500 

million was provided by the Company and JPY 2,500 million by 

the major stakeholder that had provided financing of JPY 2,500 

million previously. Part of the proceeds was used to repay JPY 

2,500 million of short-term debt that was secured by a cash 

deposit from RHJI, and the major stakeholder’s loan of JPY 

2,500 million. Furthermore, syndicate lenders agreed on a 

refinancing of the existing debt structure, of which JPY 7,566 

million was outstanding at March 31, 2009, with new bullet loans 

maturing in June 2011. 

At March 31, 2009, the effective interest rate on Niles' senior 

credit facilities amounted to 3.03%. 

25.1.5. Phoenix Seagaia Resort 









until September 30, 2011. The outstanding balance of this intragroup 

loan at March 31, 2009 amounted to JPY 400 million. The 

Company guarantees the quarterly repayments and the total 

interest up to an aggregate amount of JPY 3,400 million. The 

interest rate is based on the three month Libor plus a margin 

ranging from 260 to 410 basis points, depending on the level of 

reported EBITDA. At March 31, 2009, Phoenix Seagaia Resort 

had already repaid JPY 390 million of the guaranteed principal, 

and had outstanding financial indebtedness of JPY 7,144 million, 

compared to JPY 7,777 at March 31, 2008. 

The effective interest rate on Phoenix Seagaia Resort's credit 

facility was 5.04% at March 31, 2009. 

78


25.2. Finance lease liabilities 

Finance leases are payable as follows: 


Note 

Minimum 

lease 

payments 

Under the terms of the lease agreements, no contingent rents are payable. 

Interest 

Principal 

Minimum 

lease 

payments 

Interest 

Principal 

Less than one year 2,340 89 2,251 2,249 131 2,118 

Between one and five years 2,662 87 2,575 3,206 123 3,083 

More than five years 92 2 90 213 4 209 

Total 30 5,094 178 4,916 5,668 258 5,410 

25.3. Other loans and borrowings 

Other loans and borrowings are payable as follows: 


Non-bank debt is broken down as follows : 

Non-bank 

debts 

Others 

Total 

Non-bank 

debts 

Less than one year 2,798 5,053 7,851 282 904 1,186 

Between one and five years 2,691 1,486 4,177 120 (1,423) (1,303) 

More than five years 11,143 - 11,143 10,517 (590) 9,927 

Total 16,632 6,539 23,171 10,919 (1,109) 9,810 


Loans from customers 11,038 - 

Preferred shares 5,203 10,487 


Total 16,632 10,919 

Others 

Total 

25.4. Collateralized assets 

Various credit facilities are secured by asset collateral. The carrying value as at March 31, 2009 and 2008 of collateralized assets is as follows: 



Asahi Tec 43,260 23,503 66,763 79,149 36,597 115,746 

CME - - - - 45 45 

HIT 56,340 11,886 68,226 51,806 30,674 82,480 

Niles 10,220 3,224 13,444 10,615 5,479 16,094 

Phoenix Seagaia Resort 10,349 226 10,575 10,764 291 11,055 

Total 120,169 38,839 159,008 152,334 73,086 225,420 

The decrease of assets that have been collateralized mainly resulted from the foreign exchange impact of JPY 12,838 million and the 

debt extinguishment at Metaldyne of JPY 38,966 million. 

79

The outstanding borrowings at March 31, 2009 and 2008, for 

which these assets have been collateralized are as follows : 


Asahi Tec 62,442 104,054 

HIT 64,513 77,265 

Niles 14,575 14,197 

Phoenix Seagaia Resort 7,144 7,777 

Total 148,674 203,293 

RHJI has pledged certain of its shares in certain businesses as 

collateral for these businesses’ respective senior credit 

facilities. The following shareholdings (presented as a 

percentage of RHJI’s ownership) were pledged as at March 31, 

2009 and March 31, 2008 : 

Pledge shareholdings 2009 2008 

Asahi Tec 100.0% 98.7% 

HIT 100.0% 100.0% 

Phoenix Seagaia Resort 100.0% 100.0% 

Shaklee 25.1% 25.1% 

26. EMPLOYEE BENEFITS 

26.1. Defined contribution plans 

The consolidated businesses have various defined contribution 

plans and the expenses recognized during the fiscal year ended 

March 31, 2009 are as follows : 


Asahi Tec 686 1,666 

CME 91 106 

Niles 270 268 

Corporate headquarters 22 - 

Total 1,069 2,040 

The expense is recognized in the following line items in the 

income statement : 


Cost of sales 779 1,612 


expenses 

290 428 

Total 1,069 2,040 

26.2. Defined benefit obligations and 

other post-retirement obligations 

26.2.1. Liability for defined benefit obligations and 

other post-retirement obligations 

The consolidated businesses have various plans for providing 

benefits to retired employees, including defined benefit and 

defined contribution pension and retirement plans. 


Present value of unfunded obligations 18,024 20,728 

Present value of funded obligations 42,804 47,355 

Total present value of obligations 60,828 68,083 

Fair value of plan assets (27,527) (35,276) 

Actuarial gains losses (3,690) 1,630 

Recognized liability for defined 

benefit obligations 

29,611 34,437 

Total employee benefits 29,611 34,437 

The Company contributes to different defined benefit plans that 

provide pension and medical benefits for employees upon 

retirement. These plans entitle a retired employee to receive a 

portion of his final salary for each year of service and to the 

reimbursement of certain medical costs. 

80


26.2.2.Present value of the defined benefit 

obligations 

The movement of the present value is as follows: 



Actuarial gains (6,359) (3,216) 

Current service costs and interest 3,970 4,330 

Benefits paid by the plans (3,200) (3,757) 

Effect of exchange rates (1,671) (6,690) 

Plan participants' contributions (1,077) (1,084) 

Exit from consolidation scope - (5,977) 

Reclassification to held for sale - (2,249) 

Others 1,082 (1,408) 


26.2.3. Plan assets 

26.2.3.1. Present value of plan assets 

The plan assets comprise : 


Equity securities 13,230 20,689 

Government bonds 6,679 10,468 

Cash 3,639 1,920 

Corporate bonds 2,997 794 

Insurance contracts 982 1,073 

Others - 332 

Total 27,527 35,276 

26.2.4. Expense recognized in profit or loss 


Current service cost 1,118 1,380 

Interest on obligation 2,852 3,328 

Expected return on plan assets (2,421) (2,859) 

Others 399 (746) 

Total 1,948 1,103 

The expense is recognized in the following line items in the 

income statement 


Cost of sales 1,275 725 


expenses 

673 378 

Total 1,948 1,103 

26.2.5. Principal actuarial assumptions at March 31 

The weighted average rates utilized for the benefit obligations 

are as follows: 

2009 2008 

Discount rate 4.1 % 4.3 % 

Expected return on plan assets 3.3 % 3.8 % 

Future salary increases 2.7 % 2.6 % 

26.2.3.2. Movement of plan assets 



Expected return on plan assets (2,421) (2,859) 

Benefits paid by the plans (3,200) (3,757) 

Actuarial (gains) losses (1,969) 1,005 

Contributions paid into the plans 2,154 2,336 

Effect of exchange rates (849) (4,236) 

Exit from consolidation scope - (1,284) 

Others (1,464) (259) 


81

26.2.6. Historical information 

(in JPY millions) 2009 2008 2007 2006 

Present value of the defined benefit obligation 60,828 68,083 88,134 44,996 

Fair value of plan assets (27,527) (35,276) (44,330) (15,571) 

Deficit in the plan 33,301 32,807 43,804 29,425 

Experience adjustments arising on plan liabilities 91 (104) (25) 293 

Experience adjustments arising on plan assets (210) (124) (173) 323 

The Company expects JPY 2,089 million in contribution to be paid to the funded defined benefit plans and JPY 2,499 million of benefits 

to be paid for the unfunded plans during the fiscal year ending March 31, 2010. 

27. SHARE BASED PAYMENTS 

27.1. RHJ International 

At March 31, 2005, a significant shareholder of RHJI granted 

2,018,030 shares of RHJI to certain members of the Company’s 

management and other employees. IFRS 2 was applied to 

1,198,086 shares as they were granted as consideration for 

future services. These shares vest over 5 years and are subject 

to a 5 year lock-up. In accordance with IFRS 2, the fair values of 

the stock options and the shares granted as consideration for 

future services have been determined at the date they have been 

granted and recognized as employee expenses over the period in 

which they will be earned. At March 31, 2009, 144,447 share 

grants were outstanding, of which 28,890 were unvested. 

On October 1, 2007, the Board of Directors approved a long-term 

share-based incentive plan. The purpose of the plan is to serve 

the interests of RHJI and its affiliates by attracting and retaining 

exceptional employees, consultants and independent 

contractors, aligning their interests with the interests of RHJI’s 

shareholders and reinforcing the creation of long-term value. 

Awards under the plan are made in the form of restricted stock 

units (“RSU”), which shall be vested at such times, in such 

manner and subject to such terms and conditions contained in 

the relevant award agreement. For each RSU which vests, the 

participant shall receive one share of RHJI or, in the sole and 

plenary discretion of the Board, a cash amount equal to the fair 

market value of such share as of the vesting date. During the 

fiscal year ended March 31, 2008, 1,174,277 RSU’s were granted, 

of which 513,333 to the Company’s Chief Executive Officer, Mr. 

Fischer. 512,744 of the awarded RSU’s vest linearly over a period 

of 4 years. Following a decision by the Board of Directors on 

October 22, 2008, the vesting of Mr. Fischer's 513,333 restricted 

stock units, was accelerated, subject to a lock-up that restricts 

the transfer of the shares for a four-year period. On September 

16, 2008, the Company also granted 90,000 RHJI shares to Mr. 

Fischer, free and clear of any restrictions. 

The fair value of the share grants and the RSU’s at the date of 

grant, has been determined using the Finnerty model, reflecting 

an illiquidity discount resulting from the transfer restrictions 

following provisions of certain lock-up agreements. The total 

fair value of the share grants and the RSU’s was calculated, 

using a share volatility of approximately 27% and risk free 

interest rates based on the EUR swap rates ranging from 3.29% 

to 5.1%, depending on the lifetime of the different grants. 

Calculated fair value of the share grants and the RSU’s 

amounted to JPY 1,873 million and JPY 1,770 million, 

respectively. Expense recognized during the fiscal year ended 

March 31, 2009 for the share grants and the RSU’s amounted to 

JPY 979 million. 

82


27.2. Consolidated subsidiaries 

Certain consolidated businesses have stock option plans for directors and employees. The stock options are subject to vesting over 1 

to 8 years and have a life-time of up to 10 years. 

Asahi Tec 

Outstanding 

at April 1, 

2008 

Granted 

during the 

year 

Forfeited 

during the 

year 

Exercised 

during the 

year 

Transferred 

to held 

for sale 

Effect of 

foreign 

exchange 

Outstanding 

at March 31, 

2009 

Exercisable 

at March 31, 

2009 

Weighted average exercise price (in JPY) 226 - 265 - - - 218 202 

Number of options 6,084,742 - (1,053,691) - - - 5,031,051 2,959,381 

Fair value amount (in JPY millions) 1,230 - (222) - - - 1,008 629 

CME 

Weighted average exercise price (in JPY) 112 74 117 - - - 112 112 

Number of options 10,580,000 50,000 (150,000) - - - 10,480,000 8,828,000 

Fair value amount (in JPY millions) 714 2 (8) - - - 708 628 

HIT 

Weighted average exercise price (in JPY) 1,573 - - - - (262) 1,311 1,311 

Number of options 733,001 - - - - - 733,001 417,800 

Fair value amount (in JPY millions) 1,153 - - - - (192) 961 548 

Niles 

Weighted average exercise price (in JPY) 419 - 423 186 - - 429 429 

Number of options 1,461,050 - (198,700) (55,000) - - 1,207,350 1,207,350 

Fair value amount (in JPY millions) 162 - (21) 0 - - 141 141 

Phoenix Seagaia Resort 

Weighted average exercise price (in JPY) 155,794 - - - - - 155,794 155,794 

Number of options 3,961 - - - - - 3,961 3,961 

Fair value amount (in JPY millions) - - - - - - - - 

Fair values and recognized expense with respect to stock options and shares granted are as follows: 


Asahi Tec 95 194 

CME 35 60 

HIT - 76 

Niles - 7 

Total 130 337 

The fair value of granted stock options was calculated using the Black-Scholes-Merton method. The following indicates the range of 

assumptions used for the different stock options granted: 

83

2009 2008 

From To From To 

Share volatility 30.0 % 64.0 % 41.0 % 64.0 % 

Risk free interest rate 0.3 % 1.9 % 0.3 % 4.5 % 

Forfeiture rate 0.0 % 52.0 % 0.0 % 14.7 % 

Life-time 50.0 % 100.0 % 50.0 % 100.0 % 

Dividend yield 0.0 % 0.0 % 0.0 % 0.0 % 

28. PROVISIONS 

28.1. Details of provisions 



Restructuring - 4,123 4,123 8 1,511 1,519 

Warranties 45 749 794 52 854 906 

Onerous contracts 103 120 223 216 310 526 

Environment 482 - 482 384 6 390 

Taxation claims - 74 74 - 19 19 

Others 

Early retirement obligations 835 278 1,113 967 322 1,289 

Long-term service award accrual 739 - 739 762 24 786 

Union contract related compensation 276 - 276 736 - 736 

Others 231 485 716 277 565 842 

Total 2,711 5,829 8,540 3,402 3,611 7,013 

28.2. Movement of provisions 



Made during the period 6,106 4,056 

Used during the period (2,787) (2,200) 

Reversed during the period (765) (2,158) 

Transfer to liabilities held for sale or discontinued operations - (1,151) 

Effect of exchange rates (1,027) (401) 


84


29. TRADE AND OTHER PAYABLES 


Non-current 1,040 1,776 

Current 

Trade payables 

Suppliers 33,665 68,456 

Accrued expenses 5,739 3,810 

Advances received 4,084 2,541 

Other payables 

Remuneration, social security and pension 5,815 9,059 

Accrued interests 4,349 3,418 

Acquisition of property, plant and equipment 1,778 3,444 

Accrued royalties 1,453 2,600 

Derivatives used for hedging 1,028 502 

Wage tax payables and VAT 624 611 

Allowance for sales return 547 607 

Reserve for loss contracts 209 187 

Others 2,417 2,301 

Total 62,748 99,312 

The Company’s exposure to credit, currency and interest rate risks related to trade and other payables is disclosed in note 30. 

85

30. FINANCIAL RISK MANAGEMENT AND RELATED INSTRUMENTS 

Exposures to a variety of financial risks and market risks arise in the normal course of the Company’s business. As a diversified 

holding company, the Company faces a combination of risks resulting from the commercial activities of its portfolio holdings and 

specific risks as a diversified holding company. The portfolio holdings are exposed to risks related to the level of indebtedness such as 

liquidity and interest rate risk and risks inherent to the nature of their commercial activities such as credit risk and foreign currency 

exchange risk. As a holding Company, RHJI is further exposed to risks associated with general, economic and market conditions, such 

as the risk of fluctuating interest rates and currency exchange rates, liquidity risk and risks related to the stock market, all of which 

may have a significant effect on the value of the Company’s assets. 

The Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. 

For purposes of managing the risks associated with the Company’s portfolio holdings, the Company generally relies on the individual 

businesses’ risk assessment and monitoring programs to manage the exposure to these and other risks. These programs have been 

designed based on the specific nature and size of the individual businesses’ activity. While the Company monitors these programs and 

attempts to mitigate the negative effects from any of these risks through its representation on the businesses’ Boards of Directors 

and through the implementation of certain reporting mechanisms, the Company may face negative consequences from inadequate 

risk assessment and ineffective control systems of risk detection and prevention at the level of each of the individual businesses. 

This note presents information about the Company’s exposure to each of the above risks. 

30.1.Credit risk 

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its 

contractual obligations, and arises principally from the Company’s trade receivables. 

30.1.1. Trade receivables 

The Company’s credit risk is primarily attributable to its trade receivables. The Company’s exposure to credit risk is influenced mainly 

by the individual characteristics of each customer. The demographics of the Company’s customer base, including the default risk of 

the industry and country in which customers operate, has less of an influence on credit risk. 

The amounts presented on the balance sheet are the amounts, net of allowances for doubtful accounts, estimated by the management 

of the respective consolidated businesses based on the prior credit loss experience and the current economic environment. 

The Company’s largest customers accounted for approximately 21% and 24% of trade accounts receivables as of March 31, 2009 and 

2008, respectively. At March 31, 2009 and 2008 respectively, the largest customer of the Company accounted for approximately 7 % 

and 9% of total trade receivables. 

The table below shows the outstanding balance of and revenue from the five major customers as of and for the fiscal year ended 

March 31, 


Rating Balance Revenue Rating Balance Revenue 

Nissan Motor Co BBB 2,510 23,507 BBB + 6,461 29,053 

Mitsubishi Fuso Truck and Bus Corporation 

(1) 

1,428 29,702 

(1) 

3,768 35,246 

Chrysler CC 1,141 22,582 CC 992 37,331 

Ford CCC - 981 24,477 B 1,104 33,171 

ZF Group 

(1) 

906 20,916 

(1) 

1,258 30,585 

(1) No rating available 

86


As of March 31, 2009, the total trade and other receivables and revenue for the top 5 customers are broken down by subsidiary as 

follows: 


(1) Not applicable 

Trade and 

other 

receivables 

Top 5 

customers 

balance 

In % Revenue Top 5 

customers 

revenue 

Asahi Tec 19,843 6,258 31.5% 218,815 123,413 56.4% 

CME 3,348 846 25.3% 18,170 5,283 29.1% 

HIT 6,043 1,871 31.0% 102,527 38,642 37.7% 

Niles 5,793 3,387 58.5% 45,444 34,829 76.6% 

Phoenix Seagaia Resort 735 193 26.3% 12,327 1,448 11.7% 

Total portfolio companies 35,762 12,555 35.1% 397,283 203,615 51.3% 

Corporate headquarters 1,746 

(1) (1) 

17 

(1) (1) 

Total 37,508 12,555 33.5% 397,300 203,615 51.2% 

In % 

30.1.2. Global exposure to credit risk 

RHJI’s functional currency is the Japanese Yen cash and cash equivalents are maintained in EUR, USD and JPY, and invested primarily 

in time deposits, certificates of deposits, direct obligations of the US Treasury and European Zone Government securities for which the 

RHJI has defined minimum ratings in order to preserve capital and maintain liquidity. 

The credit risk on derivative financial instruments is limited because the counterparties to the derivatives are major international 

financial institutions with high credit ratings assigned by international credit rating agencies. 

The carrying amount of financial assets represents the maximum credit exposure of the Company. The carrying amount is presented 

net of impairment losses recognized. The table below shows the maximum exposure to credit risk at balance sheet date: 


Non-current 

Gross 

Impairment 

Net carrying 

amount 

Gross 

Impairment 

Net carrying 

amount 

Available for sale financial assets 5,636 - 5,636 19,654 - 19,654 

Held-to-maturity investments - - - - - - 

Other financial investments 1,990 (1,258) 732 2,102 - 2,102 

Trade and other receivables 3,062 (700) 2,362 1,808 (216) 1,592 

Cash guarantees and deposits 104 - 104 104 - 104 

Hedging instruments 117 - 117 141 - 141 

10,909 (1,958) 8,951 23,809 (216) 23,593 

Current 

Available for sale financial assets 45 - 45 284 - 284 

Other financial investments 402 - 402 286 - 286 

Trade and other receivables 37,889 (381) 37,508 74,460 (372) 74,088 

Hedging instruments 8 - 8 266 - 266 

Cash and cash equivalents 72,336 - 72,336 72,523 - 72,523 

110,680 (381) 110,299 147,819 (372) 147,447 

Total 121,589 (2,339) 119,250 171,628 (588) 171,040 

87

The maximum exposure to credit risk for current trade and other receivables at March 31, 2009 by geographic region was: 


Japan 16,840 

Europe 9,108 

Americas 9,481 

Asia 2,064 

Others 15 

Total 37,508 

The maximum exposure to credit risk for current trade and other receivables at March 31, 2009 by type of counterparty was: 


OEM 28,361 

End-user customers 3,952 

Wholesale customers 3,446 

Others 1,749 

Total 37,508 

30.1.3. Impairment losses 

An allowance for impairment is established when there is objective evidence that the group will not be able to collect all amounts due 

according to the original terms of the receivables. The allowances for doubtful accounts are estimated by the management of the 

respective consolidated businesses based on the prior credit loss experience and the current economic environment. 

The allowance for impairment recognized during the period per classes of financial assets was as follows: 


Trade 

receivable 

and 

prepayments 

Other 

receivable 

Other 

financial 

assets 

Total 

Trade 

receivable 

and 

prepayments 

Other 

receivable 

Opening balance (588) - - (588) (1,974) (1) (1,975) 

Impairment losses (259) (331) (1,258) (1,848) (51) - (51) 

Reversal of write-off on doubtful accounts 29 - - 29 639 - 639 

Derecognition 47 - - 47 19 1 20 

Collection from customers - - - - 95 - 95 

Effect of movement in exchange rates 21 - - 21 - - - 

Transfer to assets held for sale or 

discontinued operations 

Total 

- - - - 684 - 684 

Closing balance (750) (331) (1,258) (2,339) (588) - (588) 

The aging of current trade and other receivables at March 31, 2009 was: 


Not past due 34,348 

Past due 0 - 30 days 1,921 

Past due 31 - 120 days 805 

Past due 121 - 365 days 289 

Past due more than 1 year 145 

Total 37,508 

88


30.2. Liquidity risk 

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company’s approach to 

managing liquidity is to ensure, as far as possible that it will always have sufficient liquidity to meet its liabilities when due, under both 

normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation. 

The contractual maturities of non-derivative financial liabilities, and related derivative financial assets and liabilities are as follows 

(interest included): 


Non-derivative financial liabilities 

Contractual 

cash-flows 

Less than 

one 

year 

Between 

one and five 

years 

More than 

five 

years 

Contractual 

cash-flows 

Less than 

one 

year 

Between 

one and five 

years 

More than 

five 

years 

Bank loans (231,815) (31,121) (163,034) (37,660) (209,754) (28,653) (100,184) (80,917) 

Finance lease liabilities (5,094) (2,340) (2,662) (92) (5,668) (2,249) (3,206) (213) 

Other loans (12,021) (2,947) (3,845) (5,229) (2,434) (544) (1,860) (30) 

Trade and other payables (65,002) (61,708) (2,505) (790) (99,312) (97,536) (1,252) (524) 

Derivative financial liabilities 

Foreign exchange derivatives 

(313,933) (98,116) (172,046) (43,771) (317,168) (129,982) (106,502) (81,684) 

Inflow - - - - 12 12 - - 

Outflow - - - - (9) (9) - - 

Interest rate derivatives 

Inflow 286 286 - - - - - - 

Outflow (735) (735) - - - - - - 

Commodity derivatives 

Inflow 8 8 - - - - - - 

Outflow (142) (142) - - - - - - 

(583) (583) - - 3 3 - - 

Total (314,516) (98,699) (172,046) (43,771) (317,165) (128,979) (106,502) (81,684) 

At March 31, 2009, RHJI had JPY 58,726 million available to pursue its business strategy and had no indebtedness at the parent 

company level. RHJI’s businesses have access to financing by obtaining credit lines on their own merits. Except for a guarantee of up 

to JPY 3,400 million certain pledges of shares as disclosed in note 25 to the consolidated financial statements and a commitment of 

JPY 1,300 million (EUR 10 million) to fund a backstop facility to the benefit of Honsel, the businesses and their lenders generally do not 

benefit from any guarantee from RHJI. 

89

30.3. Market risk 

The Company’s overall risk management policy focuses on the unpredictability of financial markets and seeks to minimize potential 

adverse effects on the Company’s financial performance. Derivative financial instruments can be used to hedge exposure to 

fluctuations in foreign exchange rates, commodity prices and interest rates. 

The following table provides an overview of the derivative financial instruments outstanding at year-end by maturity bucket. The 

amounts included in this table are the notional amounts: 


Foreign currency 

Less than 

one 

year 

Between 

one and five 

years 

More than 

five 

years 

Less than 

one 

year 

Between 

one and five 

years 

More than 

five 

years 

Forward exchange contracts 1,973 250 - 7,160 - - 

Interest rate 

Interest rate swap 10,756 - - 698 20,023 - 

Purchased caps 19,741 - - - 23,684 - 

Commodities 

Forward purchase contracts for 

aluminum 

946 - - 3,360 - - 

Forward sales contracts for aluminum - - - - - - 

Total 33,416 250 - 11,218 43,707 - 

30.3.1. Commodity risk 

Certain consolidated businesses procure raw materials, most significantly aluminum, through a combination of contract 

commitments and spot market purchases. They are exposed to commodity risk, which is moderated through the use of customer 

contracts that typically provide for sales price adjustments related to changes in the cost of light metal alloys. For HIT primarily, the 

selling prices are however only adjusted periodically and as a result, HIT is exposed to changes in aluminum prices within the 

contracts’ price indexation periods. Accordingly, HIT hedges a significant portion of its aluminum purchases by entering into forward 

purchase and sales contracts on the London Metal Exchange. As of March 31, 2009, HIT had forward purchase contracts for notional 

amounts of JPY 946 million. The corresponding fair values of these contracts, designated as cash flow hedges for which hedge 

accounting is applied, amounted - JPY 134 million. As of March 31, 2008, HIT had forward purchase contracts for notional amounts of 

JPY 3,360 million. The corresponding fair values of these contracts, designated as cash flow hedges for which hedge accounting is 

applied, amounted JPY 135 million. 

30.3.2. Interest rate risk 

The Company is exposed to changes in interest rates primarily as a result of the borrowing activities of its consolidated businesses, 

which include borrowings used to maintain liquidity and to fund business operations and acquisitions. These borrowings consist 

primarily of floating rate debt. The Company intends to maintain a balanced mix of fixed and floating rate borrowings, and accordingly 

has entered into derivative transactions to manage the exposure associated with the floating rate borrowings. All the derivative 

transactions, JPY 30,497 million in aggregate at March 31, 2009, compared to JPY 44,405 million at March 31, 2008, are accounted for 

as cash flow hedges with a fair value of - JPY 449 million. 

90


30.3.2.1. Effective interest and maturity schedule 

In respect of income-earning financial assets and interest-bearing financial liabilities, the following table indicates their effective 

interest rates at the balance sheet date and the periods in which they reprice. 

(in JPY millions) Currency Less than 

one 

year 

Cash and cash equivalents 

Between 

one and five 

years 

More than 

five 

years 

Total 

Weighted 

average 

interest rate 

EUR 45,500 - - 45,500 0.4 % 

JPY 17,446 - - 17,446 0.0 % 

USD 7,626 - - 7,626 0.2 % 

OTHERS 1,763 - - 1,763 0.1 % 

72,335 - - 72,335 

Finance leases 

EUR (46) - - (46) 0.0 % 

JPY (2,037) (2,115) (90) (4,242) 2.1 % 

USD - (444) - (444) 8.8 % 

OTHERS (168) (16) - (184) 10.0 % 

(2,251) (2,575) (90) (4,916) 

Senior debt 

Secured 

Term 

Fixed rate USD (13) (16) - (29) 9.5 % 

Variable rate EUR (40,057) - - (40,057) 7.2 % 

JPY (2,237) (8,248) - (10,485) 4.2 % 

USD (24) (43,086) - (43,110) 8.4 % 

OTHERS (114) (1,974) (121) (2,209) 5.6 % 

Revolver 

Fixed rate JPY (229) - - (229) 2.5 % 

Variable rate JPY (8,265) - - (8,265) 3.8 % 

USD (383) - - (383) 9.3 % 

OTHERS (489) - - (489) 5.1 % 

Bullet 

Variable rate JPY (733) (14,229) - (14,962) 4.8 % 

Unsecured 

Term 

Fixed rate JPY (724) (1,116) - (1,840) 3.3 % 

Variable rate JPY (240) (94) - (334) 3.6 % 

OTHERS (83) - - (83) 4.5 % 

Revolver 


Bullet 

Fixed rate JPY (1,100) - - (1,100) 4.5 % 


Other 

Fixed rate USD - (147) - (147) 11.0 % 

(60,676) (68,910) (121) (129,707) 

Subordinated debt 

Secured 

EUR (24,456) - - (24,456) 12.0 % 

JPY - (4,000) - (4,000) 5.7 % 

Unsecured 

USD - (2,761) - (2,761) 12.0 % 

(24,456) (6,761) - (31,217) 

Others EUR (4,380) (2,623) - (7,003) 7.3 % 

JPY (3,063) (469) (5,228) (8,760) 7.2 % 

USD - (1,085) (5,915) (7,000) 5.5 % 

OTHERS (408) - - (408) 8.1 % 

(7,851) (4,177) (11,143) (23,171) 

Total (22,899) (82,423) (11,354) (116,676) 

30.3.2.2. Sensitivity analysis 

An increase (decrease) of the interest rate by 1% on the loans and borrowings would have increased (decreased) the interest expense 

by JPY 3,030 million and JPY 2,430 million for the fiscal years ended March 31, 2009 and 2008, respectively. 

This analysis assumed that all other variables, in particular currency exchange rates, remain constant. 

91

30.3.3. Foreign currency risk 

The Company is exposed to market risk from changes in currency exchanges that could impact the results of operations and the 

financial position. The Company is exposed to both translation as well as transaction risk. The translation risk is the risk that the 

consolidated financial statements are affected by changes in the prevailing exchange rates of the various currencies of the businesses 

or their subsidiaries relative to the Japanese Yen. Transaction risk is the risk that the currency structure of the costs and liabilities 

deviates to some extent from the currency structure of the sales proceeds and assets. 

Beside the translation and transaction risk arising from changes in currency exchange rates described above, RHJI’s Euro 

denominated share price is exposed to changes in the exchange rate between the EUR and the JPY as a significant portion of the 

Company’s assets is located in Japan and have book values denominated in JPY. The Company does not hedge this exposure. RHJI’s 

functional currency is the JPY. Cash and cash equivalents are maintained in EUR, USD and JPY. 

The functional currency of the five consolidated businesses headquartered in Japan is the JPY. The EUR is the functional currency for 

HIT. Companies that transact a material amount of business and have material assets and liabilities in currencies other than their 

functional currency include Asahi Tec through its acquisition of Metaldyne (USD), HIT (USD, Brazilian Real and Mexican Peso) and 

Niles (USD). These companies manage their exposures through normal operating and financing activities and, when appropriate, use 

forward foreign exchange contracts. Derivative financial instruments are not used for speculative purposes, and are accounted for as 

cash flow hedges. The total notional amount and fair value of cash flow hedges at March 31, 2009 was JPY 2,223 million and JPY 236 

million, respectively. 

A strengthening of JPY against USD and EUR at March 31, 2009, of respectively 28.2% and 22.4% based on the historical volatility of 

those currencies against JPY would have increased (decreased) equity and profit or loss by the amounts shown below. The historical 

volatility was calculated as 95% of the daily standard deviation over the two years ended March 31, 2009. This analysis assumed that 

all other variables, in particular interest rates, remain constant. The analysis is performed on the same basis for fiscal year ended 

March 31, 2008. 

A weakening of the JPY against the USD and the EUR would have had the equal but opposite effect on the amounts shown below. 


Equity 

Profit or 

(Loss) 

Equity 

Profit or 

(Loss) 

USD 2,557 4,746 (2,502) 9,125 

EUR 9,893 15,160 (3,548) 2,391 

92


30.3.4. Fair values 

30.3.4.1. Comparison of fair values and carrying amounts 

The fair values together with the carrying amounts shown in the balance sheet are as follows: 


Carrying 

amount 

Fair 

value 

Carrying 

amount 

Available for sale financial assets 5,681 5,681 19,938 19,938 

Held-to-maturity investments - - - - 

Other financial assets 1,134 1,134 3,390 3,390 

Trade and other receivables 39,869 39,869 74,088 74,088 

Cash and cash equivalents 72,336 72,336 72,523 72,523 

Interest rate swaps: 

Assets - - - - 

Liabilities (449) (449) (15) (15) 

Forward exchange contracts: 

Assets 8 8 406 406 

Liabilities (579) (579) (68) (68) 

Secured bank loans (159,599) (159,599) (144,727) (144,727) 

Unsecured bond issues (2,908) (357) (41,574) (21,113) 

Redeemable preference shares (4,177) (4,435) (10,487) (10,487) 

Finance lease liabilities (4,916) (4,916) (5,410) (5,410) 

Loans from associates (3,177) (3,177) (297) (297) 

Dividends on redeemable preference shares (1,026) (1,090) (1,045) (1,045) 

Unsecured bank facilities (11,841) (11,841) (10,629) (10,629) 

Trade and other payables (65,002) (65,002) (99,312) (99,312) 

Bank overdraft (1) (1) (65) (65) 

Fair 

value 

(134,647) (132,418) (143,284) (122,823) 

Unrecognized gains 2,229 20,461 

30.3.4.2. Estimation of fair values 

The following summarizes the major methods and assumptions used in estimating the fair values of financial instruments reflected in 

the above table. 

Fair value of available for sale securities is primarily obtained from quoted market prices. The carrying amount of both trade accounts 

receivable and payable approximates fair value due to their short-term nature. The fair value of long-term loans and borrowings is 

estimated based on the discounted amount of the future cash flows. The fair value of finance lease liabilities is estimated based on the 

discounted cash flows using the current borrowing rates for similar liabilities. The fair value of foreign currency interest rate swaps is 

based on quoted prices or appropriate valuation methods. 

93

31. OPERATING LEASES 

Non-cancellable operating lease rentals are payable as follows: 




More than five years 146 106 

Total 3,790 3,567 

The operating leases are mainly long-term rental contracts of 

cars, machinery and equipment. Under the terms of the lease 

agreements, no contingent rents are payable. At March 31, 2009 

and 2008, Metaldyne had an outstanding payable of JPY 2,663 

and JPY nil million, respectively, related to a sale-and-leaseback 

transaction in addition to the operating lease payments. 

Future minimum lease payments for property leased out under 

operating leases, is as follows: 




More than five years 5,551 6,028 

Total 20,095 22,417 

32. CAPITAL COMMITMENTS 

As at March 31, 2009 and 2008, Asahi Tec and HIT had aggregate 

commitments to purchase capital equipment amounting to 

respectively JPY 9,858 and JPY 2,502 million. 

33. CONTINGENCIES 

At March 31, 2009, the Company is subject to claims and 

litigation in the ordinary course of its business but does not 

believe that any such claim or litigation will have a material 

impact on the financial results of the Company. 

34. RELATED PARTIES 

34.1. Identity of related parties 

The Company has related party relationships with its 

consolidated businesses and business accounted for under the 

equity method (see note 35), with its Directors and Senior 

Management, and with Ripplewood Holdings LLC and affiliates. 

34.2. Transactions with directors 

and senior management 

Total remuneration of executive management is included in 

“Personnel expenses” (see note 11). During the fiscal year 

ended March 31, 2009, and pursuant to his agreement with RHJI, 

the Chief Executive Officer, Mr. Fischer, received aggregate fixed 

compensation of JPY 14 million, variable compensation related 

to his performance for the fiscal year ended March 31, 2008, of 

JPY 216 million, and other remuneration, including private 

aircraft usage pursuant to his employment agreement, of JPY 

109 million. Subsequent to the fiscal year-end, the Board of 

Directors awarded Mr. Fischer a bonus of JPY 219 million 

related to his performance for the fiscal year ended March 31, 

2009. Awards made to Mr. Fischer under RHJI's equity-based 

compensation plan are described in note 27. 

The compensation of the members of RHJI's executive management, 

other than Mr. Fischer can be broken down as follows: 


Aggregate fixed compensation 231 327 

Aggregate variable compensation 206 498 

Aggregate other remuneration in the form of 

pensions, insurance coverage and other 

fringe benefits, including allowances 

The members of RHJI’s executive management other than 

Mr. Fischer were awarded 177,880 restricted stock units under the 

equity-based compensation plan adopted by the Board of Directors, 

on October 1, 2007. Terms and conditions of the restricted stock 

unit plan are described in note 27. Total share-based compensation 

expense associated with the awards to the members of executive 

management, other than Mr. Fischer, amounted to JPY 103 and 84 

million for respectively the fiscal years ended March 31, 2009 and 

2008. On April 1, 2009, as part of the bonus award for the fiscal 

year ended March 31, 2009, the members of RHJI's executive 

management were awarded a further 563,380 restricted stock units 

under the same equity-based compensation plan. 

Non-executive directors received benefits of JPY 192 million and 

JPY 190 million for the fiscal year ended March 31, 2009 and 

2008, respectively. 

34.3. Other related party 

transactions 

23 29 

Total 460 854 

As at March 31, 2009 and 2008, net payables of JPY 14 million 

and JPY 104 million, respectively, to Ripplewood Holdings LLC 

("Ripplewood") were outstanding as a result of operating costs 

and out of pocket expenses. A total expense of JPY 105 million 

was recognized from Ripplewood during the fiscal year ended 

March 31, 2009, compared to JPY 239 million during the fiscal 

year ended March 31, 2008. The transactions with Ripplewood 

are at arm's length. 

94


35. GROUP ENTITIES 

35.1. Fully consolidated subsidiaries 

Country of 

incorporation 

Direct 

interest 

ownership 

Indirect 

interest 

ownership 

Asahi Tec Corporation Japan 60.1 % - 

Asahi Service Co., Ltd. Japan - 60.1 % 

Asahi Tec Aluminium (Thailand) Co., Ltd. Thailand - 60.1 % 

Asahi Tec Environmental Solutions Corporation Co., Ltd Japan - 60.1 % 

Asahi Tec Metals (Thailand) Co., Ltd. Thailand - 60.1 % 

Asahi Tec Service Co., Ltd. Japan - 60.1 % 

Asahi Tec Tohoku Sales Co., Ltd. Japan - 60.1 % 

ER Acquisition Corp. USA - 60.1 % 

GMTI Holding Company USA - 60.1 % 

Guangzhou Asahi Dongling Research & Development Co., Ltd. China - 30.7 % 

Halyard Aviation Services, Inc. USA - 60.1 % 

Hoei Industrial Co., Ltd. Japan - 37.4 % 

Holzer Limited United Kingdom - 60.1 % 

MascoTech Saturn Holdings Inc. USA - 60.1 % 

MASG Disposition, Inc. USA - 60.1 % 

MASX Energy Services Group, Inc. USA - 60.1 % 

Metaldyne (Suzhou) Automotive Components Co., Ltd. China - 60.1 % 

Metaldyne Asia, Inc. USA - 60.1 % 

Metaldyne Chassis Manufacturing (Hangzhou) Co., Ltd. China - 60.1 % 

Metaldyne Company LLC USA - 60.1 % 

Metaldyne Componentes Automotivos do Brasil Ltda Brazil - 60.1 % 

Metaldyne Driveline Co., LLC USA - 60.1 % 

Metaldyne DuPage Die Casting Corporation USA - 60.1 % 

Metaldyne Engine Co., LLC USA - 60.1 % 

Metaldyne Engine Espana, S.L. Spain - 60.1 % 

Metaldyne Engine Holdings, S.L. Spain - 60.1 % 

Metaldyne Europe S.a.r.l. Luxembourg - 60.1 % 

Metaldyne Europe, Inc. USA - 60.1 % 

Metaldyne GmbH Germany - 60.1 % 

Metaldyne Grundstucks GbR Germany - 57.0 % 

Metaldyne Holdings LLC USA - 60.1 % 

Metaldyne Hong Kong Limited Hong Kong - 60.1 % 

Metaldyne Industries Limited India - 30.7 % 

Metaldyne Intermediate Holdco, Inc. USA - 60.1 % 

Metaldyne International (UK) Ltd United Kingdom - 60.1 % 

Metaldyne International Deutschland GmbH Germany - 60.1 % 

Metaldyne International France SAS France - 60.1 % 

Metaldyne International Holdings B.V. Netherlands - 60.1 % 

Metaldyne International Sales, Inc. Barbados - 60.1 % 

Metaldyne International Spain, S.L. Spain - 60.1 % 

Metaldyne Korea Limited Korea - 60.1 % 

Metaldyne Lester Precision Die Casting, Inc. USA - 60.1 % 

Metaldyne Light Metals Company, Inc. USA - 60.1 % 

Metaldyne Machining and Assembly Company, Inc. USA - 60.1 % 

Metaldyne Machining and Assembly Mfg. Co. (Canada) Ltd. Canada - 60.1 % 

Metaldyne Mauritius Limited Mauritius - 60.1 % 

Metaldyne Mexico, S.A. de C.V. Mexico - 60.1 % 

Metaldyne Netherlands Holdings B.V. Netherlands - 60.1 % 

95

Country of 

incorporation 

Direct 

interest 

ownership 

Indirect 

interest 

ownership 

Metaldyne Nurnberg GmbH Germany - 60.1 % 

Metaldyne Oslavany, spol. S.r.o. Czech Republic - 60.1 % 

Metaldyne Precision Forming - Fort Wayne, Inc. USA - 60.1 % 

Metaldyne Services, Inc USA - 60.1 % 

Metaldyne Sintered Components Espana, S.L. Spain - 60.1 % 

Metaldyne Sintered Components Holdings, S. de R.L. de C.V. Mexico - 60.1 % 

Metaldyne Sintered Components Mexico, S.de.R.L. de C.V. Mexico - 60.1 % 

Metaldyne Sintered Components of Indiana, Inc. USA - 60.1 % 

Metaldyne Sintered Components Services, S.de.R.L. de C.V. Mexico - 60.1 % 

Metaldyne Sintered Components St. Marys, Inc. (Formerly known as Windfall Products, Inc.) USA - 60.1 % 

Metaldyne Sintered Components, LLC USA - 60.1 % 

Metaldyne Tubular Products, Inc. USA - 60.1 % 

Metaldyne U.S. Holding Co. USA - 60.1 % 

Metaldyne Zell GmbH & Co. KG Germany - 58.9 % 

Metaldyne Zell Verwaltungs GmbH Germany - 60.1 % 

MetaldyneLux Holding S.a.r.l Luxembourg - 60.1 % 

MetaldyneLux S.a.r.l Luxembourg - 60.1 % 

NC-M Chassis Systems, LLC USA - 60.1 % 

Precision Headed Products, Inc. USA - 60.1 % 

Punchcraft Company USA - 60.1 % 

R.J. Simpson Private Limited India - 60.1 % 

Simpson Industries, Ltda Brazil - 60.1 % 

Stahl Industries, Inc. USA - 60.1 % 

Techno-Metal Co., Ltd. Japan - 60.1 % 

W.C. McCurdy Co. USA - 60.1 % 

Windfall Specialty Powders, Inc. USA - 60.1 % 

Columbia Music Entertainment Inc. (1) Japan 25.5 % - 

C2 Design Japan - 25.5 % 

CME, Inc. USA - 25.5 % 

Columbia Artist management Japan - 25.5 % 

Columbia Songs Inc. Japan - 25.5 % 

Creative Core Japan - 25.5 % 

SLG, LLC USA - 25.5 % 

Honsel International Technologies SA Belgium 82.0 % - 

Fonderie Lorraine S.A.S France - 82.0 % 

Honsel AG Germany - 81.2 % 

Honsel Beteiligungsverwaltungs GmbH Germany - 82.0 % 

Honsel Geschäftsführungs GmbH Germany - 82.0 % 

Honsel Services US Inc. USA - 82.0 % 

Honsel S.R.L. Romania - 82.0 % 

Magal Industria e Comercio LTDA Brazil - 53.3 % 

Tafime Mexico S.A. Mexico - 82.0 % 

Tafime S.L. Spain - 82.0 % 

Niles Co., Ltd. Japan 96.4 % - 

Akita Niles Co.,Ltd. Japan - 96.4 % 

Ami Co.,Ltd. Japan - 96.4 % 

Fuji Electronics Industries Co.,Ltd. Japan - 96.3 % 

Fuzhou Niles Electronic Co., Ltd. China - 49.2 % 

(1) In addition to the direct ownership of 25.5 % of CME, RHJI controls the voting of another 24.1 % of outstanding shares 

96


Country of 

incorporation 

Direct 

interest 

ownership 

Indirect 

interest 

ownership 

Jonan Industrial Co.,Ltd. Japan - 96.4 % 

Micro Craft , Inc. USA - 96.4 % 

Niles (Thailand) Co., Ltd. Thailand - 96.4 % 

Niles Personnel Service Co.,Ltd. Japan - 96.4 % 

Niles America Michigan ,Inc. USA - 96.4 % 

Niles America Wintech ,Inc. USA - 96.4 % 

Niles Americas Corporation USA - 96.4 % 

Niles CTE Electronic Co.,Ltd. Taiwan - 49.2 % 

Niles Europe S.A.S. France - 96.4 % 

Nitto Manufacturing Co.,Ltd. Japan - 84.1 % 

Phoenix Resort KK Japan 100.0 % - 

Kogen Country Club Japan - 100.0 % 

RHJI Services SA Belgium 100.0 % - 

Cartica Management LLC USA - 30.0 % 

Arecon AG Switzerland 50.0 % - 

Honsel Holdings III LP Cayman 57.9 % - 

Japan Casting Holdings II Ltd. Cayman 100.0 % - 

Japan Casting Holdings IV Ltd. Cayman 100.0 % - 

RHJ International Japan Inc. Japan 100.0 % - 

RHJ Shaklee Holding Belgium 100.0 % - 

RHJ US Management Inc. USA 100.0 % - 

RHJI Swiss Management GmbH Switzerland 100.0 % - 

Ripplewood Nippon Columbia Holdings Ltd. Cayman 100.0 % - 

Yoyogi Animation Holdings Japan 100.0 % - 

35.2. Equity accounted investees 

Country of 

incorporation 

Ownership 

interest direct 

Shaklee Global Group Inc. Japan 42.5 % 

SigmaXYZ Inc. Japan 49.0 % 

U-shin Ltd. Japan 20.0 % 

97

36. SUBSEQUENT EVENTS 

36.1. Asahi Tec 

On May 27, 2009, Asahi Tec’s US subsidiary Metaldyne filed a 

voluntary petition to reorganize under Chapter 11 of the U.S. 

Bankruptcy Code, shortly after Chrysler, one of its main 

customers, also filed for protection under Chapter 11. Given that 

Asahi Tec was not in a position to further support Metaldyne as it 

required focus on its own needs in a continuously challenging 

automotive industry, RHJI entered into an agreement to purchase 

a majority of Metaldyne’s assets under a court-supervised sales 

process pursuant to Section 363 of the U.S. Bankruptcy Code. The 

purchase agreement was however not approved by the bankruptcy 

court and has terminated on July 27, 2009. Under the Section 363 

process, interested parties will have an opportunity to submit 

better and higher offers for the Metaldyne assets. The Company 

may elect to participate in the sale auction scheduled to be held on 

August 5, 2009. To fund its continuing operations during the 

restructuring, Metaldyne has secured a USD 19.85 million debtorin-possession 

(DIP) financing facility from certain customers. The 

DIP credit facility will be used for the company's normal working 

capital requirements, including employee wages and benefits, 

supplier payments, and other operating expenses during the 

reorganization process. 

At the date of Metaldyne's filing for bankruptcy protection under 

Chapter 11, Metaldyne will be deconsolidated, resulting in a gain 

of JPY 8,494 million that will be recorded in the profit or loss for 

the fiscal year ending March 31, 2010. 

36.2. HIT 

On July 22, 2009, the capital restructuring that was agreed by 

RHJI and HIT’s lenders on May 25, 2009, was successfully 

completed. As part of the restructuring, RHJI invested EUR 50 

million in exchange for a controlling stake in Honsel AG, HIT’s 

operating subsidiary. The remaining stake of 49% is held by 

Honsel’s former senior lenders following a debt-for-equity 

swap, which resulted in HIT’s total outstanding debt of 

approximately EUR 510 million being reduced to EUR 140 


30 million mezzanine term loan, all of which is held by Honsel’s 

former senior term lenders. Honsel’s existing EUR 40 million 

revolving credit facility, as well as EUR 50 million of financing 

from RHJI, certain of Honsel’s key customers and alone 

supplier, remained in place. RHJI also committed to a new 

senior backstop facility of EUR 10 million. 

36.3. Niles 


total capital injection of JPY 6,500 million, of which JPY 3,500 

million was provided by RHJI and JPY 2,500 million by a major 

stakeholder, which resulted in RHJI’s ownership in Niles to be 

reduced from 96.4% to 77.3%. Part of the proceeds was used to 

repay JPY 2.5 billion of short-term debt that was previously 

secured by a cash deposit from the Company. Furthermore, 

syndicate lenders agreed on a refinancing of the existing debt 

structure with new bullet loans maturing in June 2011. 

36.4. Commercial International Bank 

On July 8, 2009, RHJI announced that it had entered into an 

agreement to sell 63% of its stake in CIB for a total cash 

consideration of USD 53.1 million, representing a capital gain of 

107% to its initial purchase price. As part of a consortium led by 

Ripplewood Holdings L.LC., a leading U.S.-based private equity 

firm, RHJI had acquired its stake in February of 2006. In addition to 

the sale of its stake in CIB, RHJI also disposed of a minority interest 

for total cash proceeds of EUR 15.9 million, yielding a capital gain of 

EUR 7.5 million and representing an absolute return of 90%. 

36.5. Others 

On July, 13, 2009, RHJI announced that it was in negotiations 

with General Motors Corporation ("GM") over the acquisition of a 

majority stake in GM's European subsidiary Adam Opel GmbH, 

which includes Vauxhall in the UK. 

37. AUDITOR'S FEE 

RHJI’s statutory auditor, KPMG Réviseurs d’Entreprises, and a 

number of KPMG member firms, received fees amounting to 

JPY 633 million and JPY 950 million for respectively fiscal years 

ended March 31, 2009 and 2008 for the following services: 


KPMG Réviseurs d'Entreprises 

Audit 40 47 

Audit related services 7 3 

KPMG Network 

47 50 

Audit 459 640 

Audit related services 116 29 

Tax related services 6 182 

Other services 5 49 

586 900 

Total 633 950 

98


DIRECTORS' REPORT ON THE CONSOLIDATED FINANCIAL 

STATEMENTS FOR THE FISCAL YEAR ENDED MARCH 31, 2009 

The Directors’ report on the consolidated financial statements for the fiscal year ended March 31, 2009, prepared in accordance with 

the Belgian Companies Code is available on request from RHJI’s registered office and on its website (www.rhji.com). All information 

contained in this Directors Report listed below, is presented in the different sections of this Annual Report: 

• Business and financial review of the consolidated financial statements for the years ended March 31, 2009 and 2008 

(Part I, page 7-25); 

• Material events subsequent to March 31, 2009 (Part II, note 36, page 98); 

• Principal risks and uncertainties (Part II, page 34-35); 

• Risk management and the use of derivatives financial instruments (Part II, note 30, page 86); 

• Disclosure required by article 34 of the Belgian Royal Decree of 14 November 2007 (Part III, page 118). 

99

AUDITOR'S REPORT ON THE CONSOLIDATED FINANCIAL 

STATEMENTS FOR THE FISCAL YEAR ENDED MARCH 31, 2009 

STATUTORY AUDITOR’S REPORT 

TO THE GENERAL MEETING OF 

SHAREHOLDERS OF RHJ 

INTERNATIONAL SA ON THE 

CONSOLIDATED FINANCIAL 

STATEMENTS FOR THE YEAR 

ENDED MARCH 31, 2009 

In accordance with legal and statutory requirements, we report 

to you on the performance of our audit mandate. This report 

includes our opinion on the consolidated financial statements 

together with the required additional comment. 

Unqualified audit opinion on the consolidated 

financial statements 

We have audited the consolidated financial statements of RHJ 

International SA (“the company”) and its subsidiaries (jointly “the 

group”), prepared in accordance with International Financial 

Reporting Standards, as adopted by the European Union, and 

with the legal and regulatory requirements applicable in 

Belgium. These consolidated financial statements comprise the 

consolidated balance sheet as of March 31, 2009 and the 

consolidated statements of income, recognized income and 

expense and cash flows for the year then ended, as well as the 

summary of significant accounting policies and the other 

explanatory notes. The total of the consolidated balance sheet 

amounts to JPY 357,617 million and the consolidated income 

statement shows a loss for the period of JPY 131,271 million. 

The board of directors of the company is responsible for the 

preparation of the consolidated financial statements. This 

responsibility includes: designing, implementing and 

maintaining internal control relevant to the preparation and fair 

presentation of consolidated financial statements that are free 

from material misstatement, whether due to fraud or error; 

selecting and applying appropriate accounting policies; and 

making accounting estimates that are reasonable in the 

circumstances. 

Our responsibility is to express an opinion on these consolidated 

financial statements based on our audit. We conducted our 

audit in accordance with International Standards on Auditing, 

legal requirements and auditing standards applicable in 

Belgium, as issued by the “Institut des Réviseurs 

d’Entreprises/Instituut der Bedrijfsrevisoren”. Those standards 

require that we plan and perform the audit to obtain reasonable 

assurance whether the consolidated financial statements are 

free from material misstatement. 

In accordance with these standards, we have performed 

procedures to obtain audit evidence about the amounts and 

disclosures in the consolidated financial statements. The 

procedures selected depend on our judgment, including the 

assessment of the risks of material misstatement of the 

consolidated financial statements, whether due to fraud or 

error. In making those risk assessments, we have considered 

internal control relevant to the group’s preparation and fair 

presentation of the consolidated financial statements in order to 

design audit procedures that are appropriate in the 

circumstances but not for the purpose of expressing an opinion 

on the effectiveness of the group’s internal control. We have 

also evaluated the appropriateness of the accounting policies 

used, the reasonableness of accounting estimates made by the 

company and the presentation of the consolidated financial 

statements, taken as a whole. Finally, we have obtained from 

management and responsible officers of the company the 

explanations and information necessary for our audit. We 

believe that the audit evidence we have obtained provides a 

reasonable basis for our opinion. 

In our opinion, the consolidated financial statements give a true 

and fair view of the group’s net worth and financial position as of 

March 31, 2009 and of its results and cash flows for the year 

then ended in accordance with International Financial Reporting 

Standards, as adopted by the European Union, and with the legal 

and regulatory requirements applicable in Belgium. 

Additional comment 

The preparation of the directors’ report on the consolidated 

financial statements and its content are the responsibility of the 

board of directors. 

100


Our responsibility is to supplement our report with the following 

additional comment, which does not modify our audit opinion on 

the financial statements: 

• The directors’ report on the consolidated financial 

statements includes the information required by law and is 

consistent with the consolidated financial statements. We 

are, however, unable to comment on the description of the 

principal risks and uncertainties which the group is facing, 

and on its financial situation, its foreseeable evolution or the 

significant influence of certain facts on its future 

development. We can nevertheless confirm that the matters 

disclosed do not present any obvious inconsistencies with 

the information that we became aware of during the 

performance of our mandate. 

Brussels, July 22, 2009 

KPMG Réviseurs d’Entreprises 

Statutory auditor 

represented by 

Benoit Van Roost 

Réviseur d’Entreprises 

101

CONDENSED NON-CONSOLIDATED FINANCIAL STATEMENTS FOR 

THE FISCAL YEAR ENDED MARCH 31, 2009 

In accordance with Article 105 of the Belgian Companies Code, the non-consolidated accounts are presented below in a condensed 

version. The full version of the non-consolidated annual accounts, along with the related Directors’ Report and the Statutory Auditors’ 

Report, as they will be presented at the Annual Shareholders’ Meeting, are available on request from RHJI’s registered office and on 

its website (www.rhji.com). The Statutory Auditor has expressed an unqualified opinion on these annual accounts. 

Condensed non-consolidated balance sheet as at March 31 


Assets 

Tangible fixed assets 78 95 

Intangible fixed assets 19 31 

Financial fixed assets 61,647 157,450 

Total non-current assets 61,744 157,576 

Trade and other receivables 943 1,389 

Short-term investments 51,979 23,590 

Cash and cash equivalents 6,989 28,293 

Others 46 418 

Total current assets 59,957 53,690 

Total assets 121,701 211,266 

Equity 

Issued capital 88,491 88,491 

Share premium 104,604 104,604 

Reserves 18,145 18,416 


Total equity 120,199 209,789 

Current liabilities 

Trade and other payables 850 1,019 


Total current liabilities 1,502 1,477 

Total equity and liabilities 121,701 211,266 

102


Condensed non-consolidated income statement for the fiscal year ended 

March 31 


Revenue 

Other operating income 2 1 

Cost of sales 

Services and other goods (6,298) (3,923) 

Depreciation and amortization (34) (31) 

Other operating expenses (8) (2) 

Operating loss (6,338) (3,955) 

Financial income 9,071 4,234 

Financial expenses (13,284) (5,916) 

Net financing costs (4,213) (1,682) 

Extraordinary expenses (78,748) (21) 

Loss before tax (89,299) (5,658) 

Income tax expense (20) (20) 

Loss for the year (89,319) (5,678) 

The appropriation of the loss for the year is as follows: 


Loss for the year (89,319) (5,678) 

Profit (loss) carried forward from last year (1,722) 3,956 


103

104

PART III 

CORPORATE GOVERNANCE

106

CORPORATE GOVERNANCE 

The Belgian Corporate Governance Committee formed by the Belgian Banking, Finance and Insurance Commission (“CBFA”), 

Euronext Brussels and the Federation of Belgian Enterprises published on December 9, 2004 a Code on Corporate Governance, as 

amended and restated on March 12, 2009, which is a code of best practice containing recommendations and applying to listed 

companies on a non-binding basis. In accordance with the Code, RHJI adopted a Corporate Governance Charter which may be viewed 

on RHJI’s website at www.rhji.com (1) . The Corporate Governance Charter describes the main aspects of the rules and practices under 

which RHJI operates and by which shareholders can expect RHJI to operate. 

This section summarizes the corporate governance structure of RHJI and provides certain factual information that the Belgian Code 

on Corporate Governance recommends to be included in this Annual Report (2) . The section also contains some information required by 

Article 34 of the Belgian Royal Decree of 14 November 2007 concerning the obligations of listed issuers to disclose information. 

(1) The current Corporate Governance Charter of RHJI was adopted before the publication of the new version of the Belgian Code on Corporate Governance. While the Charter is 

substantially in compliance with the new version of the Belgian Code on Corporate Governance (subject to what is said in footnote 2 below), it is however being reviewed and 

will be subject to some adjustments to take into account this new version. References, in this “Corporate Governance” section, to the “Belgian Code on Corporate 

Governance” are to such Code in its December 2004 version. 

(2) This “Corporate Governance” section does not yet reflect new recommendations contained in the new version of the Belgian Code on Corporate Governance. Such 

recommendations are being reviewed and will be reflected, as appropriate, in the next Annual Report (relating to the fiscal year ending March 31, 2010). 

107

BOARD OF DIRECTORS 

POWERS AND RESPONSIBILITIES 

In accordance with the Belgian Companies Code, RHJI is 

administered by a Board of Directors with full powers and 

authority to undertake any action, except where specific powers 

are reserved for action at a Shareholders’ Meeting, either by law 

or pursuant to RHJI’s Articles of Association. Among others, the 

Board of Directors approves RHJI’s strategy as recommended by 

the Investment and Strategy Committee, reviews and approves 

the annual and six-month financial statements and presents to 

the Annual Shareholders’ Meeting an evaluation of RHJI’s 

financial situation. The Board of Directors appoints the Chief 

Executive Officer and members of the Board’s Committees. The 

Board of Directors may assign a special mandate to one or more 

Directors, but all other Board decisions must be taken by the 

Board of Directors as a whole. The Board has delegated the daily 

management of RHJI to its Chief Executive Officer, Mr. Fischer 

(see section “Chief Executive Officer” hereunder), and certain 

responsibilities for mergers & acquisitions to the Investment and 

Strategy Committee (see “Board Committees” hereunder). 

COMPOSITION 

Board members are appointed by the shareholders at a 

Shareholders’ Meeting upon proposal by the Board of Directors. 

RHJI’s Articles of Association provide that the Board of Directors 

must have at least seven and at most twelve directors. RHJI’s 

Articles of Association also provide that as long as Mr. Collins, 

together with his affiliates, owns, directly or indirectly, at least 

5% of RHJI’s outstanding shares, he will have the right to 

present a pool of two candidates, from which the Shareholders’ 

Meeting must select one, but may select both, for election to the 

Board of Directors. The Nomination and Remuneration 

Committee (see “Nomination and Remuneration Committee”) 

nominates the other candidates for election to the Board of 

Directors. 

To qualify as an independent director, such person must comply 

with the conditions set forth in Article 526ter of the Belgian 

Companies Code. 

FUNCTIONING 

The Board of Directors is a collegial body. It deliberates if a 

majority of its members are present or represented (except in 

the case of force majeure, for which the quorum is three 

directors present or represented). 

The Board of Directors meets as regularly and as frequently as 

required by RHJI’s interests. 

In accordance with the Belgian Companies Code (Article 523), any 

director with a conflicting interest must bring this to the notice of 

both the statutory auditor (see “Statutory Auditor” below) and his 

fellow directors and may not take part in related deliberations. 

During the fiscal year ended March 31, 2009, the Board of 

Directors held 13 meetings, in addition to periodic updates from 

executive management. Major topics considered by the Board of 

Directors during the fiscal year included, among others: financial 

statements and reports relating thereto for the fiscal year ended 

March 31, 2009, operations and performance of the Company; 

new investments; incentive compensation plan and renewal of 

the waiver granted to Mr. Collins as then co-Chief Executive 

Officer, with respect to his outside activities (see below). The 

conflict of interest procedure provided by Article 523 of the 

Belgian Companies Code was applied four times (please refer to 

the statutory report of the Board of Directors on the nonconsolidated 

financial statements dated July 22, 2009 of RHJ 

International SA, which is published separately from this Annual 

Report and may be viewed on RHJI’s website at www.rhji.com). 

Directors attended all meetings, except that Mr. Daniel did not 

attend one meeting, Mr. Sillem did not attend two meetings, Lord 

Jacob Rothschild did not attend one meeting, Mr. König did not 

attend one meeting, Mr. Döpfner did not attend one meeting and 

Mr. Golub did not attend six meetings. 

108


The following table sets forth the current members of the Board 

of Directors. Each director serves for a three-year term ending 

on the date of the Annual Shareholders’ Meeting in September 

2011 which will approve the non-consolidated financial 

statements relating to the fiscal year ending in March 2011. 

Directors may be reappointed. Biographies of each director are 

available here below and may be viewed on RHJI’s website at 

www.rhji.com . 

Name Age Title 

D. Ronald Daniel (3) (4) 79 Chairman of the Board of 

Directors and Chairman 

of the Nomination and 

Remuneration Committee 

Timothy C. Collins (4) 52 Chairman of the Investment 

and Strategy Committee 

Leonhard Fischer (4) 46 Chief Executive Officer 

Mathias Döpfner (3) 46 Director 

D. Ronald Daniel – Chairman of the Board of Directors and of the 

Nomination and Remuneration Committee : 

Mr. Daniel, a director since April 1, 2005, has been a 

management consultant for 47 years, including 12 years as 

McKinsey & Company’s managing partner. Prior to joining 

McKinsey, Mr. Daniel served in the United States Navy. 

From 1989 through 2004, Mr. Daniel was the Treasurer of 

Harvard University, a member of the Harvard Corporation and a 

member of the Harvard Board of Overseers. He also was 

Chairman of the Harvard Management Company (which 

oversees Harvard’s endowment) and Chairman of the Board of 

Fellows of the Harvard Medical School. 

Mr. Daniel is also a member of the Board of Trustees of 

Thirteen/WNET, of Rockefeller University and of Brandeis 

University. He is a member of the Council on Foreign Relations, 

an Honorary Trustee of the Brookings Institution and Chairman 

Emeritus of the Wesleyan University Board of Trustees. 

Mr. Daniel has a B.A. in Mathematics from Wesleyan University 

and an M.B.A. from Harvard Business School. He also holds an 

Honorary Doctor of Humane Letters from Wesleyan University. 

Harvey Golub 70 Director 

Gerd Häusler 58 Director 

Björn König (1) (2) 47 Director 

Jun Makihara (1) (2) (3) 51 Director 

Jeremy W. Sillem (1) (2) 59 Chairman of the Audit 

and Compliance Committee 

(1) Independent director pursuant to Article 526ter of the Belgian Companies Code. 

(2) Member of the Audit and Compliance Committee. 

(3) Member of the Nomination and Remuneration Committee. 

(4) Member of the Investment and Strategy Committee 

Timothy C. Collins – Director and Chairman of the Investment 

and Strategy Committee: 

A director with RHJI since the company's formation in June 2004, 

Mr. Collins was appointed on January 2009 as Chairman of the 

Investment and Strategy Committee. Mr. Collins was co-Chief 

Executive Officer of RHJI from May 2007 (when Mr. Fischer joined 

the company) until December of 2008. He was RHJI's Chief 

Executive Officer from its formation in June 2004 until May 2007. 

Mr. Collins founded Ripplewood Holdings LLC in 1995 and 

currently serves as its Senior Managing Director and Chief 

Executive Officer. From 1990 to 1995, Mr. Collins managed the 

New York office of Onex Corporation, a Toronto-based holding 

company engaged in acquiring companies in a variety of 

industries. Previously, Mr. Collins held positions at Lazard Frères 

& Company, Booz, Allen & Hamilton and Cummins Engine 

Company. Mr. Collins is a director of Commercial International 

Bank and RSC Equipment Rental which are publicly traded 

portfolio companies of Ripplewood, as well as a director of 

various privately held Ripplewood portfolio companies. 

He is involved in several not-for-profit and public sector 

activities, including the Trilateral Commission, Yale Divinity 

School Advisory Board, Yale School of Organization and 

Management Board of Advisors, the Board of Overseers of the 

Weill Cornell Medical College and is a member of the Council on 

Foreign Relations. Mr. Collins is also a Trustee of the Carnegie 

Hall Society. 

Mr. Collins has a B.A. in Philosophy from DePauw University and 

an M.B.A. from Yale University’s School of Organization and 

Management. 

109

Leonard Fischer – Director and Chief Executive Officer: 

Leonhard Fischer was appointed Chief Executive Officer in 

January 2009. He was co-Chief Executive Officer of RHJI since 

May 2007 and is a member of the Board of Directors since 

September 18, 2007. 

Prior to joining RHJI, Mr. Fischer was Chief Executive Officer of 

Winterthur Group from 2003 to 2006, an insurance subsidiary of 

Credit Suisse, and a member of the Executive Board of Credit 

Suisse Group from 2003 to March 2007. Mr. Fischer joined Credit 

Suisse Group from Allianz AG, where he had been a Member of 

the Management Board and Head of the Corporates and Markets 

Division since 2001. Previously, he had been with Dresdner Bank 

AG as a member of the Executive Board since 1998 and with JP 

Morgan in Frankfurt since 1987. 

Mr. Fischer holds an M.A. in Finance from the University of 

Georgia and a Business Management Degree from the University 

of Bielefeld. 

He is also on the Supervisory Boards of the Deutsche Presse 

Agentur and the Leipziger Verlags- und Druckereigesellschaft, 

as well as being a member of the European Publishers Council. 

He holds Honorary Offices at the American Academy, the Aspen 

Institute, and on the American Jewish Committee. 

Dr. Döpfner studied Musicology, German, and Theatrical Arts in 

Frankfurt and Boston. 

Björn König – Director: 

Mr. König, a director since April 1, 2005, is currently an adviser 

to private equity and alternative asset management groups. 

Mr. König has several years of experience as an investor in 

limited partnerships and has served as an advisor in the 

establishment of a number of limited partnerships. 

Mr. König has a B.S. in Business Administration from the 

University of Stockholm, Sweden. 

Harvey Golub – Director: 

Mr. Golub has been a director of RHJI since September 2006. 

Mr. Golub is the Non-Executive Chairman of Ripplewood 

Holdings, LLC. He serves as Non-Executive Chairman of the 

Boards of Campbell Soup Company and the Reader’s Digest 

Association. Mr. Golub also serves on the Boards of the Lincoln 

Center for the Performing Arts, the American Enterprise 

Institute, and the New York Presbyterian Hospital, and as a 

member of the Advisory Board of Miller Buckfire & Co., LLC. 

Previously, Mr. Golub has served on the Board of Dow Jones & 

Company. 

Mr. Golub served as the Chief Executive Officer and Chairman of 

the Board of American Express from 1993 until he retired in 

2001. 

Prior to joining American Express in 1991, he was a senior 

partner with McKinsey & Co. 

Mr. Golub attended Cornell University from 1956 to 1958, and 

received a B.S. degree from the New York University in 1961. 

Mathias Döpfner – Director: 

Dr. Döpfner was appointed as a director of RHJI on September 

16, 2008. He is currently Chairman and Chief Executive Officer of 

Axel Springer AG in Berlin, which he joined in 1998 as Editor-in- 

Chief of Die Welt. He has been a Member of the Management 

Board there since the year 2000. 

Mathias Döpfner has held several different positions in media 

companies during his career. Amongst others, as Editor-in-Chief 

of the Wochen Post and the Hamburger Morgenpost 

newspapers. Since 2006 he has been a member of the Board of 

Directors at Time Warner, Inc. 

Jun Makihara – Director: 

Mr. Makihara, a director since April 1, 2005, is currently the 

Chairman of Neoteny Co., Ltd., an early stage venture 

investment firm in Japan. From 1981 to 2000, Mr. Makihara was 

with Goldman, Sachs & Co. where he served in various 

capacities, including as a Managing Director in New York in 

Investment Banking from 1998 to 2000, as a Managing Director 

in Tokyo as co-head of Equities and co-branch manager from 

1995 to 1998 and as co-head of Investment Banking in Tokyo 

from 1992 to 1995. Mr. Makihara is a director of Monex Group, 

Inc. and the Japan Society. 

Mr. Makihara has an B.A. from Harvard College in Economics 

and an M.B.A. from Harvard Business School. 

Gerd Häusler – Director: 

Mr. Gerd Häusler joined RHJI in October 2008 as a director and a 

senior advisor after having served the previous two years at 

Lazard as a Vice-Chairman and Managing Director in their 

Financial Institutions Group and their Sovereign Debt Advisory 

practice. 

Between 2001 and 2006 he was counselor and director of the 

International Capital Markets Department of the IMF 

responsible for all financial markets-related work and is 

credited with the creation of the Global Financial Stability 

Report; he also represented the Fund at the Financial Stability 

Forum. Before, Mr. Häusler was a Member of the Board of 

Managing Directors at Dresdner Bank AG in Frankfurt (1996 to 

2000) and Chairman of Dresdner Kleinwort Benson in London 

110


(1997 to 2000). He spent the first 18 years of his career at 

Deutsche Bundesbank, the last two of them (1994-1996) on the 

Executive Board and the Central Bank Council. He has served as 

an outside director on the board of various companies and has 

been a member of the Group of Thirty, a think tank, since 1996. 

Mr. Häusler studied Law and Economics at the Universities of 

Frankfurt and Geneva. 

Jeremy W. Sillem – Director and Chairman of the Audit and 

Compliance Committee : 

Mr. Sillem, a director since April 1, 2005, is the Managing 

Partner and Co-Founder of Spencer House Partners LLP. Prior 

to establishing Spencer House Partners, he was the Chairman of 

Bear, Stearns International Limited, the European arm of the 

New York based investment bank, from May 2000 until January 

2004. Prior to joining Bear Stearns, Mr. Sillem spent a 28 year 

career with Lazard LLC and its predecessor entities, during five 

year of which he was Chief Executive of Lazard Capital Markets 

in London. 

Currently, Mr. Sillem is Chairman of the World Trust Fund, a 

London Stock Exchange-listed investment company; a director 

of Martin Currie (Holdings) Limited, a privately held equities 

fund manager; a director of Harbourmaster Capital (Holdings) 

Limited, a privately held European-based credit manager; and a 

director of Checkmate Mortgages Limited, due to start trading in 

2009 in the UK mortgage distribution sector. 

COMPENSATION 

The following compensation was paid to directors for their 

services as directors during the fiscal year ended March 31, 

2009. 

Each of RHJI’s non-executive directors (except as mentioned 

below and other than the Chairman of the Board of Directors) 

was paid an amount of EUR 100,000. The Chairman has been 

paid an amount of EUR 250,000. In addition, the Chairman of the 

Audit and Compliance Committee (see “Audit and Compliance 

Committee”) has been paid an amount of EUR 60,000 and 

members of that Committee have been paid an amount of EUR 

40,000. The Chairman of the Nomination and Remuneration 

committee (see “Nomination and Remuneration Committee”) 

has been paid an amount of EUR 40,000 and members of that 

Committee have been paid an amount of EUR 25,000. Pursuant 

to the Corporate Governance Charter of RHJI, the Chairman of 

the Investment and Strategy Committee (see “Investment and 

Strategy Committee”) is paid an annual retainer of EUR 60,000 

and members of such Committee are paid an annual retainer of 

EUR 40,000. 

No benefits were granted to directors for their services as 

directors. 

Directors who are (Leonhard Fischer) or were (Timothy C. 

Collins) members of RHJI’s executive management do not 

receive any compensation for their services as directors or 

members of any Board Committees. 

He is also a member of the Hoegh Capital Partners Hedge Fund 

Advisory Committee, the Advisory Board of Partners Capital 

Investment Group, the Investment Committee of Brasenose 

College Oxford and serves as an Advisory Director of Reform, 

the London based public policy think tank. From 1994 to 2004 he 

was a member of the International Capital Markets Committee 

of the New York Stock Exchange. 

Mr. Sillem has a M.A. in Philosophy, Politics and Economics 

from Oxford University. 

111

BOARD COMMITTEES 

The RHJI Board of Directors has created the following Board Committees : the Audit and Compliance Committee, the Nomination and 

Remuneration Committee and the Investment and Strategy Committee. The Board of Directors has adopted formal charters for such 

committees. Amendments to key principles with respect to the composition and core tasks of such committees, as set out in their 

respective charters, may be made by the Board of Directors. 

AUDIT AND COMPLIANCE 

COMMITTEE 

The Audit and Compliance Committee must consist of at least 

three non-executive directors, all of whom must be independent 

and none of whom may be the Chairman of the Board of 

Directors. Directors may be appointed to the Audit and 

Compliance Committee for terms of up to three years and may 

be re-appointed. 

The Audit and Compliance Committee’s role is to assist and 

advise the Board of Directors regarding, among others, (i) the 

quality and integrity of RHJI’s financial statements, (ii) the 

relationship with RHJI’s statutory auditor, (iii) risk management, 

(iv) compliance with legal and regulatory requirements, (v) 

compliance with internal codes of conduct and other policies and 

(vi) potential conflicts of interests of Mr. Collins (see section 

“Mr. Collins as Director and Chairman of the Investment and 

Strategy Committee”). 

The Audit and Compliance Committee currently consists of 

Messrs. Sillem, König and Makihara. 

During the fiscal year ended March 31, 2009, the Audit and 

Compliance Committee held six meetings. Major topics 

considered by the Committee during the fiscal year were: 

financial statements and reports relating to the fiscal years 

ended March 31, 2008 and 2009, risk management systems and 

controls, relationship with the statutory auditor, reporting 

framework in accordance with new Belgian requirements and 

renewal of the waiver granted to Mr. Collins as then co-Chief 

Executive Officer with respect to his outside activities and under 

the Code of Business Conduct and Ethics for the period 

beginning on February 20, 2008 until February 28, 2009 (see 

below). Committee members attended all meetings of the Audit 

and Compliance Committee during the fiscal year except that 

Mr. Makihara did not attend one meeting. 

NOMINATION AND REMUNERATION 

COMMITTEE 

The Nomination and Remuneration Committee must consist of 

at least three non-executive directors, a majority of whom must 

be independent. Directors may be appointed to the Nomination 

and Remuneration Committee for terms of up to three years and 

may be re-appointed (but no member of the Committee shall 

serve for consecutive terms collectively exceeding nine years). 

The Nomination and Remuneration Committee’s role is to assist 

and advise the Board of Directors regarding, among others, (i) 

the size and composition of, and appointment to, the Board of 

Directors, (ii) the size and composition of, and appointment to, 

the committees of the Board of Directors, (iii) appointment of 

members of senior management and (iv) the remuneration 

policy, evaluation and strategy for directors and personnel. 

The Nomination and Remuneration Committee currently 

consists of Messrs. Daniel, Döpfner and Makihara. 

During the fiscal year ended March 31, 2009, the Nomination and 

Remuneration Committee held 4 meetings. Major topics 

considered by the Committee during the fiscal year were: senior 

management compensation and long-term incentives and 

appointment of Board members. Committee members attended 

all meetings of the Nomination and Remuneration Committee 

during the fiscal year. 

The Belgian Code on Corporate Governance recommends the 

establishment of an internal audit function. An experienced 

internal audit professional based in the Tokyo office provides 

guidance and support to the Company’s portfolio company 

operations in Japan. Currently, the internal audit activities do 

not cover Honsel, but the Audit and Compliance Committee will 

continue to monitor the Company’s internal audit function based 

on the Company’s evolving size and needs. 

112


INVESTMENT AND STRATEGY 

COMMITTEE 

The Investment and Strategy Committee is a new committee of 

the Board of Directors, which has been established as of 

January 2009. 

The Investment and Strategy Committee must consist of at least 

three executive or non-executive directors. Directors may be 

appointed to the Investment and Strategy Committee for terms 

of up to three years and may be re-appointed. 

The key responsibilities of the Investment and Strategy 

Committee include: 

(i) approval of any acquisition in which the purchase price 

payable by RHJI, together with any other commitment made 

by RHJI, does not exceed 100 million and any disposal in 

which the sale price or book value of the sold assets 

(whichever is the highest), together with any other form of 

payment does not exceed 100 million; 

(ii) approval of any financing activity related to an acquisition 

mentioned in (i); 

(iii) providing recommendations to the Board of Directors 

regarding any acquisition (including any related financing 

activity) or disposal in excess of 100 million; 

(iv) in consultation with the Nomination and Remuneration 

Committee, jointly recommending, to the Board of Directors, 

individuals for appointment as Chief Executive Officer, Chief 

Financial Officer and General Counsel; 

(v) defining and preparing the strategic options and proposals 

(including alliances, spin-offs or mergers, investments, 

acquisitions, divestitures, capital structure and secondary 

listings) that may contribute to the development of RHJI, for 

recommendations to the Board of Directors. 

The Investment and Strategy Committee currently consists of 

Messrs. Collins, Daniel and Fischer. Mr. Collins is Chairman of 

the Investment and Strategy Committee. 

During the fiscal year ended March 31, 2009, the Investment and 

Strategy Committee held no meetings as it was established in 

January 2009. 

MR. COLLINS AS DIRECTOR AND 

CHAIRMAN OF THE INVESTMENT 

AND STRATEGY COMMITTEE 

TIME COMMITMENT 

Under the terms of RHJI’s agreement with Mr. Collins, he is only 

required to spend as much of his aggregate business time and 

attention as is required to fulfill his functions as RHJI’s director 

and Chairman of the Investment and Strategy Committee. Mr. 

Collins continues to be obligated under the terms of certain 

existing private equity partnership agreements to devote 

business time and attention to such partnerships. In addition, in 

the future he also may create funds or other investment entities 

that could require a substantial portion of his business time and 

attention. Such partnerships, funds or other investment entities 

may potentially compete, from time to time, with the interests of 

RHJI. 

COMPENSATION 

During the fiscal year ended March 31, 2009, Mr. Collins 

received a compensation of EUR 100,000 as then co-Chief- 

Executive Officer of RHJI. He did not receive any other element 

of compensation, such as any bonus or any participation in 

executive benefit plans and programs established by RHJI. Mr. 

Collins did not receive any shares, share warrants, share 

options or any other right to acquire shares of RHJI during the 

fiscal year ended March 31, 2009. Mr. Collins will not be paid for 

his function as member and Chairman of the Investment and 

Strategy Committee. 

TERM AND TERMINATION 

The initial term of Mr Collins’ agreement with RHJI expires in 

March 2010. At the end of the initial term, the agreement will 

automatically renew for successive one year terms, unless 

notice is given by RHJI to Mr. Collins that it does not intend to 

renew the current term, no later than 30 days prior to the 

expiration thereof. Mr. Collins’ agreement may be terminated 

by the Board of Directors at any time, with or without cause. No 

severance will be paid to Mr. Collins upon termination except as 

may be required by law. Upon termination of the agreement, Mr. 

Collins will receive payment for any accrued compensation and 

unreimbursed expenses. In addition, Mr. Collins will resign from 

RHJI’s Board of Directors, the Investment and Strategy 

Committee and any committee thereof, and any Board of 

Directors (and committee thereof) of any companies owned 

directly or indirectly by RHJI. 

If Mr. Collins is terminated prior to March 23, 2010, unless the 

termination was for cause, Mr. Collins will no longer be subject 

pursuant to his agreement with RHJI to restrictions on transfers 

of RHJI’s ordinary shares held by him, as described below. 

Cause is narrowly defined as (1) willful and continued failure to 

113

substantially perform duties (other than due to physical or 

mental illness) after written notice from the Board of Directors 

or (2) conviction of, or plea of nolo contendere to, a felony. 

In the event Mr. Collins is subject to the so-called “golden 

parachute” excise tax under Section 4999 of the U.S. Internal 

Revenue Code upon any termination, RHJI will pay him an 

additional amount to place him in the same after-tax position 

that he would have been in had no excise tax been imposed. 

RESTRICTIONS ON SHARE TRANSFERS 

At the time of RHJI’s initial public offering in March 2005, Mr. 

Collins agreed with RHJI that he could not transfer, pledge, 

assign, hypothecate or otherwise dispose of RHJI’s ordinary 

shares (including by way of any hedging or similar transaction 

that would result in the reduction or elimination of the downside 

risk in respect of their investment in such shares), subject to 

some limited exceptions. The lock-up agreement with RHJI ends 

on March 23, 2010. Mr. Collins will be released from the terms 

of any lock-up agreement with RHJI in the event of any 

termination of his agreement with RHJI, other than for a cause, 

prior to March 23, 2010. 

NEW OPPORTUNITIES 

Mr. Collins has agreed that he will use reasonable efforts to 

provide additional acquisition opportunities to RHJI that are 

consistent with RHJI’s strategy, although Mr. Collins will not 

have any obligation to allocate any particular opportunity to 

RHJI. 

On March 23, 2005, RHJI’s Board of Directors adopted a 

resolution waiving the specific provisions of the RHJI’s Code of 

Business Conduct and Ethics (see “Code of Business Conduct 

and Ethics Code”) that would apply to the outside activities of Mr. 

Collins, as a member of the Board of Directors and as then Chief 

Executive Officer. The resolution was valid for a period ending on 

the first anniversary date of such resolution. RHJI’s Board of 

Directors had subsequently renewed the above waiver on a 

yearly basis and, lastly, on March 5, 2009 approved a waiver for 

the fiscal year ending March 31, 2010. 

On an annual basis, the Board of Directors will continue to 

determine whether to renew the above waiver, after a thorough 

review of Mr. Collins’ activities outside RHJI. Any resolution 

renewing the waiver shall only be validly adopted if it has been 

approved by at least three-quarters of RHJI’s independent 

directors present or represented at the relevant meeting of the 

Board of Directors. 

In addition, the procedure required by Article 523 of the Belgian 

Companies Code applies to the renewal of such waiver. 

MR. FISCHER AS CHIEF EXECUTIVE 

OFFICER 

Mr. Fischer has been co-Chief Executive Officer of RHJI since 

May 2007. Since January 1, 2009, Mr. Leonhard Fischer is sole 

Chief Executive Officer and, as such, carries out the daily 

management of RHJI. Mr. Fischer is engaged full-time with the 

Company for an indefinite term. 

DELEGATION OF AUTHORITY 

The Board of Directors has delegated to Mr. Fischer the powers 

typically exercised by a Chief Executive Officer, which consists of 

general executive authority over RHJI’s affairs arising in the 

ordinary course of business. The authority delegated to the Chief 

Executive Officer is intended to be within the limits of the daily 

management of RHJI’s business within the meaning of the 

Belgian Companies Code. At any time the Board of Directors will 

have the power to withdraw or modify the authority it has 

delegated or terminate the agreement (see below) with the Chief 

Executive Officer with or without cause. 

Mr. Fischer is authorized to sub-delegate, under his own 

responsibility, one or more specific powers falling within the 

scope of day-to-day management to employees of the Company 

or any other person of his choice. However, he may not subdelegate 

the daily management as a whole to anybody. 

As part of his daily management powers, Mr. Fischer has 

authority to cause the Company to, among others, incur or grant 

any form of financing; grant any form of collateral; effect any 

treasury management transaction, investment or disinvestment 

transaction, hedging transaction, renting or leasing transaction; 

enter into any (including consultancy) services agreement (as a 

provider or beneficiary of the services); initiate or defend legal 

proceedings, provided (i) the amount of such financing, 

collateral, treasury management transaction, investment or 

disinvestment transaction, hedging transaction, renting or 

leasing transaction, services agreement or legal proceedings 

does not exceed EUR 25 million and (ii) such financing, 

collateral, hedging transaction or services agreement are for 

purposes other than M&A activity or such investment or 

disinvestment transaction does not qualify as M&A activity. The 

following will not qualify as “M&A activity”: any (i) investment 

into or (ii) disinvestment of, a shareholding in a company when 

such shareholding represents (together with any such shares 

already, directly or indirectly, (i) held or (ii) disinvested, 

respectively, by the Company) less than 10% of all shares 

outstanding of such company. 

114


Mr. Fischer has no authority over any matters that are reserved 

for the Board of Directors or the Shareholders’ Meeting 

pursuant to law or the Company’s Articles of Association or that 

are within the duties of any committee of the Board of Directors. 

Without prejudice to the day-to-day management powers of 

Mr. Fischer, Mr. Fischer has specific representation powers to 

hire, dismiss and determine the terms of employment of any 

employee, including any member of the Company’s senior 

management (other than the Chief Executive Officer, Chief 

Financial Officer and General Counsel). 

COMPENSATION 

Mr. Fischer receives an annual salary of EUR 100,000 and is 

eligible to an annual bonus, that for each of the fiscal years 

ended March 31, 2009 and 2008 amounted to EUR 1.5 million. In 

connection with his appointment as co-Chief Executive Officer in 

2007, entities controlled by Mr. Collins granted Mr. Fischer 

282,000 shares of RHJI. These shares are subject to a lock-up 

agreement that ends on May 1, 2010 on substantially similar 

terms as described for Mr. Collins above. The Company has also 

granted 513,333 shares to Leonhard Fischer, for which vesting 

was accelerated, further to a board decision, to October 22, 

2008, subject to a lock-up that restricts the transfer of shares 

for a four years period without consent of the RHJI Board of 

Directors. On September 16, 2008, RHJI has also granted to Mr. 

Fischer 90,000 shares of RHJI (free and clear of any 

restrictions). The compensation expense for the Company 

associated with the grant of 90,000 shares to Mr. Fischer and the 

vesting of the 513,333 shares amounted to JPY 145 million (EUR 

1 million). for the fiscal year ended March 31, 2009. Mr. Fischer 

participates in executive benefit plans and programs of RHJI and 

is also eligible for private aircraft usage pursuant to his 

employment agreement. 

TERMINATION AND CERTAIN OTHER TERMS 

Mr. Fischer’s employment agreement with the Company 

provides for customary non-compete, non-solicitation and no 

hire restrictions. The agreement may be terminated by either 

party, with or without cause. No severance will be paid to Mr. 

Fischer upon termination except as required by law and 

pursuant to the non-competition clause if enforced by the 

Company. Upon termination of the agreement, Mr. Fischer will 

receive payment for any accrued compensation and 

unreimbursed expenses. In addition, Mr. Fischer will resign 

from any position at the Board of Directors (and committee 

thereof) of RHJI and any companies owned directly or indirectly 

by RHJI, as applicable. 

115

OTHER MEMBERS OF EXECUTIVE MANAGEMENT 

COMPOSITION OF EXECUTIVE 

MANAGEMENT 

The following table sets forth information as to the individuals 

who, in addition to RHJI’s Chief Executive Officer, comprised 

RHJI’s executive management during the fiscal year ended 

March 31, 2009. 

Name Age Function at RHJI 

Anthony Barone 60 Executive Vice President 

Arnaud Denis 37 Investor Relations Director 

Jean-Marc Roelandt 44 Chief Financial Officer 

Rüdiger Schmid-Kühnhöfer 35 General Counsel 

Richard Shirrefs 53 Executive Vice President 

COMPENSATION 

Pursuant to the terms of the agreements entered into by RHJI 

and/or its affiliates with the members of RHJI’s executive 

management, other than Mr. Fischer, the aggregate following 

compensation paid to such members for services during the 

fiscal year ended March 31, 2009 was: 

• an aggregate compensation of JPY 231 million (EUR 1.6 

million) for services; 

• an aggregate bonus (based on performance and paid at the 

discretion of the Board of Directors) of JPY 206 million (EUR 

1.4 million); 

• aggregate other remuneration in the form of pensions, 

insurance coverage and other fringe benefits, including 

allowances, of JPY 23 million (EUR 0.2 million). 

The members of RHJI’s executive management, other than Mr. 

Fischer, were awarded a total of 741,260 restricted stock units 

(“RSU”) under the equity-based compensation plan adopted by 

the Board of Directors, on September 18, 2007 (see “Equitybased 

Compensation Plan” below). Total share-based 

compensation expense associated with the RSU’s awarded on 

October 1, 2007 and recorded in the consolidated income 

statement in accordance with IFRS, amounted to JPY 103 million 

(EUR 3.2 million) for the fiscal year ended March 31, 2009. 

177,880 RSU’s were awarded on October 1, 2007 and 563,380 

RSU’s were awarded on April 1, 2009. The awarded RSU per 

individual member of RHJI’s executive management are as 

follows: 

Name 

Number of restricted stock units 

Anthony Barone 213,183 

Arnaud Denis 13,684 

Jean-Marc Roelandt 177,971 

Rüdiger Schmid-Kühnhöfer 123,239 

Richard Shirrefs 213,183 

Total 741,260 

116


OTHER TERMS 

RHJI’s executive management is generally subject to customary 

non-compete, non-solicitation and no hire restrictions. The 

agreements may be terminated at any time by RHJI. Generally 

no severance will be paid to members of RHJI’s executive 

management upon termination, except as required by law. 

EQUITY-BASED COMPENSATION PLAN 

The adoption of any equity-based compensation plan is subject 

to approval by RHJI’s Board of Directors. While the Belgian Code 

on Corporate Governance recommends that such equity-based 

compensation plan be submitted to the approval of the 

shareholders, any equity-based compensation granted to the 

members of executive management is (along with other 

compensation granted to them) disclosed in the Annual Report 

of RHJI and RHJI believes that this provides information for 

shareholders to assess whether the level and structure of the 

remuneration of the members of executive management is such 

that qualified professionals can be attracted to, motivated and 

retained by RHJI, taking into account the global nature of RHJI’s 

business and competitive environment in which it operates. RHJI 

further believes that the process whereby executive 

remuneration requires the approval of the Board of Directors, 

upon recommendation of the Nomination and Remuneration 

Committee, is designed to ensure that such remuneration is fair 

and equitable. 

RESTRICTION ON SHARE TRANSFERS 

At the time of RHJI’s initial public offering in March 2005, in 

addition to Mr. Collins, other members of RHJI’s executive 

management, who were granted shares by a significant 

shareholder at that time, agreed with RHJI that until March 23, 

2010, each of them would not transfer, pledge, assign, 

hypothecate or otherwise dispose of RHJI’s ordinary shares 

(including by way of any hedging or similar transaction that 

would result in the reduction or elimination of the downside risk 

in respect of their investment in such shares), subject to some 

limited exceptions. 

On September 18, 2007, the Board of Directors has approved a 

long-term share-based incentive plan. The purpose of the plan 

is to serve the interests of RHJI and its affiliates by attracting 

and retaining exceptional employees, consultants and 

independent contractors, aligning their interests with the 

interests of RHJI’s shareholders and reinforcing the creation of 

long-term value. 

Awards under the plan are made in the form of restricted stock 

units, which shall be vested at such times, in such manner and 

subject to such terms and conditions contained in the relevant 

award agreement. For each restricted stock unit which vests, 

the participant shall receive one share of RHJI or, in the sole and 

plenary discretion of the Board, a cash amount equal to the fair 

market value of such share as of the vesting date. 

117

RHJI SHARES HELD BY 

DIRECTORS 

AND EXECUTIVE MANAGEMENT 

DISCLOSURE REQUIRED BY 

ARTICLE 34 OF THE BELGIAN 

ROYAL DECREE OF 14 

NOVEMBER 2007 

As of June 30, 2009: 

• All directors and executive management as a group 

beneficially own approximately 9.54% of RHJI’s total 

outstanding ordinary shares (which excludes 7.14 % non 

beneficially held by Mr. Collins (see “Shareholding 

Structure”)); 

• All directors and executive management as a group (other 

than Mr. Collins) beneficially own approximately 1.46 %; 

• Executive management as a group beneficially own 

approximately 1.20 %. 

Article 34 of the Belgian Royal Decree of 14 November 2007 

requires disclosing certain types of elements when these may be 

susceptible to have an adverse effect on the ability of a third 

party to launch a public take-over bid on RHJI. 

According to this provision, RHJI discloses the following: 

• see Article 8 of RHJI’s Articles of Association (as published 

on www.rhji.com) on the ability of the Board of Directors to 

increase the share capital of RHJI under certain conditions; 

• see Article 12 of RHJI’s Articles of Association (as published 

on www.rhji.com) on the ability of the Board of Directors to 

cause RHJI to acquire and dispose of its own shares under 

certain conditions. 

118


STATUTORY AUDITOR 

SHAREHOLDERS’ MEETING 

Under Belgian law, the statutory auditor is appointed by a 

resolution adopted by a simple majority vote at a Shareholders’ 

Meeting. The statutory auditor is appointed for renewable terms 

of three years. During their term of office, the statutory auditor 

can be removed only by a Shareholders’ Meeting for just cause. 

KPMG Reviseurs d’Entreprises/Bedrijfsrevisoren (represented 

by Mr. Benoit Van Roost, partner) is RHJI’s statutory auditor. 

KPMG was appointed, in connection with the audit of the nonconsolidated 

financial statements specifically, until the Annual 

Shareholders’ Meeting of September, 2010. KPMG was 

appointed, in connection with the audit of the consolidated 

financial statements, until the Annual Shareholders’ Meeting of 

September 2011. 

The Shareholders’ Meeting determines the remuneration of 

RHJI’s statutory auditor for his services in connection with the 

audit of RHJI’s financial statements. During the fiscal year 

ended March 31, 2009, the aggregate annual fee for these 

services has been JPY 42 million (EUR 0.3 million), excluding 

value-added tax and outlays. Information about total 

remuneration received by KPMG and certain of KPMG’s member 

firms in lieu of audit and other services is presented in note 37 

to the Consolidated Financial Statements. 

RHJI holds its Annual Shareholders’ Meeting on the third 

Tuesday of September of each year. If such day is a legal public 

holiday, the meeting will be held on the following working day. At 

this meeting, the Board of Directors and the statutory auditor’s 

report on the management and RHJI’s financial situation at the 

end of the previous fiscal year. RHJI’s shareholders then vote on 

the approval of the statutory annual accounts, the allocation of 

the profit or loss, the appointment, if necessary, of new directors 

or statutory auditor, and the release from liability of the 

directors and the statutory auditor (see “Statutory Auditor”) for 

the previous fiscal year. The Board of Directors or the statutory 

auditor may convene an Extraordinary Shareholders’ Meeting at 

any time RHJI’s interests so require. Shareholders representing 

one-fifth of RHJI’s total issued share capital may also convene 

an Extraordinary Shareholders’ Meeting. 

Shareholders representing one-fifth of RHJI’s total issued share 

capital may also move to include an item of business in the 

agenda for a Shareholders’ Meeting. While the Belgian Code on 

Corporate Governance provides that the level of shareholding to 

that effect should not exceed 5% of the total issued share 

capital, the one-fifth threshold adopted by RHJI is in compliance 

with the Belgian Companies Code. In addition, RHJI encourages 

participation at shareholders’ meeting and promotes proxy 

voting. Time is always allocated for questions during the 

Shareholders’ Meetings. 

Notices of all Shareholders’ Meetings contain the agenda of the 

meeting and the Board of Directors’ recommendations on the 

matters to be voted upon and are published in accordance with 

the Belgian Companies Code and posted on RHJI’s website at 

www.rhji.com. 

Except as described below, no quorum is required for a 

Shareholders’ Meeting and decisions are taken upon a simple 

majority vote of the shares present in person or represented by 

proxy. Each ordinary share is entitled to one vote. 

Resolutions relating to amendments of RHJI’s Articles of 

Association are subject to special quorum and majority 

requirements. Specifically, any resolution on these matters 

requires the presence in person or by proxy of shareholders 

holding an aggregate of at least 50% of RHJI’s total issued share 

capital and, generally, the approval by at least 75% of the shares 

present in person or represented by proxy at the meeting (and, 

in some cases, such as, among others, a modification to RHJI’s 

corporate purposes or legal form, a majority of at least 80%). If a 

quorum is not present, a second meeting must be convened. 

At the second meeting, the quorum requirement does not apply. 

The special majority requirement, however, will continue to 

apply. 

119

BUSINESS CONDUCT 

AND ETHICS CODE 

DEALING 

AND DISCLOSURE CODE 

RHJI’s Code of Business Conduct and Ethics summarizes the 

values, principles and business practices that guide its business 

conduct. The Business Conduct and Ethics Code sets out a set of 

basic principles regarding the minimum requirements which 

each of RHJI’s employees, officers, members of executive 

management, directors, advisors and consultants are expected 

to become familiar with and to apply as guiding principles in the 

daily performance of their job responsibilities. 

In addition to general principles, there are specific provisions 

which address various legal and ethical compliance issues, 

including, among others, conflicts of interest (including conflicts 

of interest not covered by Article 523 of the Belgian Companies 

Code), outside directorships and other outside activities, 

business gifts and entertainment, whether offered or received, 

competition and fair dealing, discrimination and harassment, 

health and safety, confidentiality and personal data protection 

and protection of proprietary information. The Business Conduct 

and Ethics Code also provide procedures for addressing 

complaints concerning auditing issues. 

The Business Conduct and Ethics Code encourage the reporting 

of any possible unethical or illegal conduct and sets forth 

specific compliance procedures. This includes the opportunity 

for all complaints to be brought anonymously. 

The Business Conduct and Ethics Code is intended to 

supplement RHJI’s other policies including the Dealing and 

Disclosure Code (see “Dealing and Disclosure Code”) and RHJI’s 

general commitment to comply with applicable laws, and is not 

intended to replace those laws. 

RHJI’s Dealing and Disclosure Code applies to all of RHJI’s 

employees (including officers and members of executive 

management) and directors, as well as to the other persons and 

entities (including, to the extent indicated in the Code, to the 

companies controlled by RHJI) indicated therein. 

The purpose of the Dealing and Disclosure Code is to ensure 

that such persons and entities do not abuse, nor place 

themselves under suspicion of abusing, and maintain the 

confidentiality of price sensitive information that they may have 

or may be thought to have, especially in periods leading up to an 

announcement of financial results or of price sensitive events or 

decisions. To this end, the Dealing and Disclosure Code sets out 

minimum standards to be followed. In particular, subject to 

special clearance that can only be granted in very limited 

circumstances, covered persons may not deal in RHJI’s ordinary 

shares during a closed period or a prohibited period. A closed 

period is defined substantially as the period preceding the 

publication of periodical financial results, beginning on the last 

day of the period covered by such results and ending on the date 

of such publication. A prohibited period is a period that RHJI’s 

General Counsel or RHJI’s Board of Directors has determined as 

a sensitive period. The Dealing and Disclosure Code also 

provides that directors and certain members of executive 

management (and certain persons associated to them) must 

comply with the Belgian law requirement to notify their 

transactions in RHJI shares (or other financial instruments 

linked to such shares) to the CBFA in accordance with applicable 

Belgian rules and the guidance published by the CBFA. The 

Dealing and Disclosure Code is not intended to replace the 

applicable laws prohibiting insider dealing and disclosure of 

price sensitive information. 

120


121

122

PART IV 

SHAREHOLDERS’ INFORMATION

All outstanding ordinary shares of RHJI have been listed on NYSE-Euronext Brussels and have been part of the BEL Mid Index since 

July 1, 2005 and the PRIVATE EQUITY NXT Index since February 2008. 

Share Code 

RHJI 

ISIN Code: 

BE0003815322 

Reuters Code 

RHJI.BR 

Bloomberg Code: 

RHJI.BB 

Number of shares 85,545,547 

Market Capitalization (30/06/2009) 

EUR 389 million 

124

SHAREHOLDERS’ INFORMATION 

SHARE PRICE 

SHAREHOLDING STRUCTURE 

Fiscal Year Ending March 31, 

In EUR 2009 2008 

Highest Closing Price 8.48 15.50 

Lowest Closing Price 2.50 7.16 

Fiscal Year-End Share Price 2.69 7.16 

Number of Shares 

Average daily volumes traded 137,620 94,126 

Stock Market Capitalization EUR 230 million EUR 612 million 

The share capital of RHJI amounts to 664,424,086 EUR and is 

represented by 85,545,547 shares without nominal value. All 

shares are listed on NYSE-Euronext Brussels, have the same 

rights and par accounting value and are fully paid up. Each share 

entitles the holder to one voting right. 

Based on transparency declarations received by RHJI in 

accordance with Belgian rules and RHJI’s Articles of 

Association, five shareholders have notified RHJI of their 

holdings as of June 30, 2009. 

Percentages indicated hereunder relate to the voting rights 

attached to the total number of outstanding shares issued by 

RHJI. 

• Timothy C. Collins and related entities: 15.22% (13,021,992 

shares) (includes 7.12% of non-beneficially held shares). 

In accordance with Belgian rules, 15.22% represents a 

combination of shares beneficially owned by Mr. Collins directly 

or through entities related with Mr. Collins (8.11%) and shares 

(held in entities related with Mr. Collins on behalf of certain 

other investors) over which Mr. Collins is deemed to have voting 

rights (7.12%) but not beneficial ownership. 

• BlackRock Group: 8.41% (7,193,000 shares) 

• Davis Selected Advisors LP: 5.66% (4,840,741 shares) 

• Third Avenue Management LLC: 4.60% (3,934,399 shares) 

• Bank of America Corporation: 2.99% (2,599,672 shares) 

125

FINANCIAL CALENDAR AND INVESTOR RELATIONS 

Shareholders and investors wishing to obtain copies of this Annual Report or other information on RHJI can contact: 

Arnaud Denis 

Investor Relations Director 

Tel. +32 (0)2 643 60 13 

Fax +32 (0)2 648 99 38 

E-Mail : investor-relations@rhji.com 

When accessing RHJI’s website on www.rhji.com, you will find a PDF version of this Annual Report, the non-consolidated financial 

statements and the related directors’ report and auditors’ report, press releases, stock price and other information on RHJ 

International, in English and French. 

Date 

Event 

• Tuesday, September 15, 2009 

Annual Shareholders’ Meeting 

• Between August 1 and August 19, 2009 

Trading Update 

• Monday, November 30, 2009 Half-Year Results 2009 (Period Ending September 30, 2009) 

• Between February 1 and February 17, 2009 

Trading Update 

• Wednesday, June 30, 2010 Preliminary Full-Year Results 2009 (Fiscal Year Ending March 31, 2010) 

• Tuesday, September 21, 2010 

Annual Shareholders’ Meeting 

126

NOTES 

127

128 

NOTES

Co-ordination and Production : IPAC - Corporate & Financial Communication 

Printing : Deloge

RHJ International S.A. 

Avenue Louise 326 

B - 1050 Brussels 

BELGIUM

ANNUAL REPORT

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