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Changes in Accounting Standards

Change in Accounting Period

Upon receipt of approval of the “Partial Amendments to the Articles of Incorporation” at the ordinary general meeting of shareholders held on June 28, 2012, Kao Corporation changed its fiscal year end from March 31 to December 31 as of the period ended December 2012.
Accordingly, the term of consolidation for the fiscal year ended December 2012 was the nine-month period from April 1, 2012 to December 31, 2012 for subsidiaries whose fiscal year end was previously March 31. The term of consolidation for subsidiaries whose fiscal year end was December 31 was unchanged from the twelve-month period from January 1, 2012 to December 31, 2012.

Voluntary Adoption of International Financial Reporting Standards

Having decided that unifying accounting standards within the Kao Group will contribute to improving the quality of its business management, the Kao Group voluntarily adopted International Financial Reporting Standards (IFRS) from the first quarter of fiscal 2016. This has enabled management based on standardized procedures and information for each Group company and business, and the Kao Group intends to reinforce its management foundation in order to increase its corporate value as a global company. The Kao Group also believes that the application of IFRS will facilitate the international comparability of its financial statements in capital markets.

Changes in Reportable Segments

  1. The Hygiene and Living Care Business has been newly established and incorporates sanitary products from the former Human Health Care Business in addition to fabric care products and home care products, which were previously classified in the Fabric and Home Care Business.
  2. The Health and Beauty Care Business has been newly established and incorporates personal health products, which were previously classified in the Human Health Care Business, in addition to skin care products and hair care products, which were previously classified in the Skin Care and Hair Care Business.
  3. The Life Care Business has been newly established and incorporates health drinks, which were previously classified in the Human Health Care Business, in addition to commercial-use hygiene products, which were previously classified in the Fabric and Home Care Business.
  4. Due to the reorganization of segments described in 1 to 3 above, sales and operating income for the same period a year earlier have been restated.
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