ANNUAL REPORT

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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 : (in JPY millions) 2009 2008 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
FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED MARCH 31, 2009 16. INTANGIBLE ASSETS 16.1. Costs, amortization and impairment loss (in JPY millions) 2009 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 (in JPY millions) 2008 Goodwill Patents and trademarks Development costs Software Others Total Costs Opening balance 92,485 149,186 4,719 6,151 2,590 255,131 Acquisitions through business combinations 12,776 - - 698 6 13,480 Additions - 109 617 427 23 1,176 Disposals - - (397) (20) - (417) Transfer to assets held for sale or discontinued 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 Transfer to assets held for sale or discontinued 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
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ANNUAL REPORT Year Ended March 31,
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PART I LETTER TO SHAREHOLDERS AND B
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Support to our portfolio companies
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Consolidated Financial Statements F
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CORPORATE GOVERNANCE OTHER TERMS RH
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PART IV SHAREHOLDERS’ INFORMATION
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SHAREHOLDERS’ INFORMATION SHARE P
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NOTES 127
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Co-ordination and Production : IPAC
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ANNUAL REPORT

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