ANNUAL REPORT

FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED MARCH 31, 2009
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 :
(in JPY millions) Note 2009 2008
Revenue 9 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)
7.4. Effect of the disposals on the
financial position
- (55)
Profit before tax 11,993 1,771
Income tax expense (1) (2,948)
Profit (loss) for the period 11,992 (1,177)
Attributable to:
Equity holders of the Company 12,166 (1,784)
Minority interest (174) 607
Profit (loss) for the period 11,992 (1,177)
Basic and diluted earnings per share
(in JPY) 142 (14)
The disposal of D&M has impacted the financial position as follows:
(in JPY millions) 2009
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
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