Interim report
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Standards Financial Acc Accounting S FASF MEMBERSHIP Consolidated Financial Results for the Three Months Ended June 30 , 2026 ( IFRS ) Corporate Name : NIKON CORPORATION Securities code number : 7731 Stock exchange listings : Tokyo Representative : Yasuhiro Ohmura , Representative Director and President , CEO Contact : Takeshi Matsumoto , Corporate Vice President , CFO and General Manager of Finance & Accounting TEL : + 81-3-6743-5181 URL : https://www.nikon.com Scheduled date to commence dividend payments : - Preparation of supplementary materials for financial results : Yes Information meeting for financial results to be held : Yes ( for institutional investors and analysts ) August 6 , 2026 ( Amounts are rounded to the nearest millions of yen ) 1. Consolidated Results for the Three Months Ended June 30 , 2026 ( From April 1 , 2026 to June 30 , 2026 ) ( 1 ) Consolidated Operating Results ( Percentage represents year - on - year changes ) Revenue Operating Profit Profit before Tax Profit Attributable to Owners Total Comprehensive Income for the Period of Parent Three months ended June 30 , 2026 Three months ended June 30 , 2025 Millions of yen 164,182 % Millions of yen % Millions of yen Millions Millions % % % of yen of yen 3.8 ( 997 ) 1,502 88.8 1,289 ( 86.4 ) 11,479 ( 1.9 ) 158,121 ( 3.5 ) ( 1,191 ) 795 ( 82.9 ) 9,469 243.6 11,701 ( 60.2 ) Basic Earnings Diluted Earnings per Share per Share Yen Yen Three months ended June 30 , 2026 Three months ended June 30 , 2025 3.91 3.90 28.79 28.64 ( 2 ) Consolidated Financial Position As of June 30 , 2026 As of March 31 , 2026 2. Dividends Total Assets Total Equity Equity Attributable to Owners of Parent Millions of yen 1,097,132 1,075,007 Millions of yen 594,760 588,196 586,785 Millions of yen 593,360 Ratio of Equity Attributable to Owners of Parent to Total Assets % 54.1 54.6 Dividend per Share First quarter ended Second quarter Third quarter Year - end Annual ended ended Yen Yen Yen Yen Yen 25.00 15.00 40.00 Fiscal year ended March 31 , 2026 Fiscal year ending March 31 , 2027 Fiscal year ending March 31 , 2027 ( Planned ) 10.00 Note : Revision of cash dividend forecast from the latest announcement : None −1– 10.00 20.00
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―2― 3. Consolidated Financial Forecast for the Fiscal Year Ending March 31, 2027 (From April 1, 2026 to March 31, 2027) (Percentage represents year-on-year changes) Revenue Operating Profit Profit before Tax Profit Attributable to Owners of Parent Basic Earnings per Share Millions of yen % Millions of yen % Millions of yen % Millions of yen % Yen Six months ending September 30, 2026 336,000 7.4 (5,500) － (4,000) － (2,500) － (7.59) Fiscal year ending March 31, 2027 732,000 8.1 11,000 － 14,500 － 10,000 － 30.36 Note: Revision of forecast from the latest announcement: Yes 4. Others (1) Significant Changes in the Scope of Consolidation during the Period: None Newly included: – Excluded: – (2) Changes in Accounting Policies and Changes in Accounting Estimates 1. Changes in accounting policies required by IFRS: None 2. Changes in accounting policies other than the above: None 3. Changes in accounting estimates: None (3) Number of Shares Issued (Ordinary Shares) 1. Number of shares issued as of the period end (including treasury shares): As of June 30, 2026 333,585,686 shares As of March 31, 2026 333,585,686 shares 2. Number of treasury shares as of the period end: As of June 30, 2026 4,152,929 shares As of March 31, 2026 4,176,609 shares 3. Average number of shares outstanding during the period (cumulative total): Three months ended June 30, 2026 329,416,760 shares Three months ended June 30, 2025 328,936,421 shares * Review by certified public accountants or an auditing firm on the attached quarterly consolidated financial statements : None * Appropriate use of business forecasts; other special items Performance forecasts and other forward-looking statements included in this report are based on information currently available and on certain assumptions deemed rational at the time of this report ’s release. Due to various circumstances, however, actual results may differ significantly from such statements.
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―3― Attached Material Contents 1. Performance and Financial Position ……………………………………………………………………………… 4 2. Quarterly Condensed Consolidated Financial Statements ……………………………………………………… 5 (1) Quarterly Condensed Consolidated Statement of Financial Position ……………………………………… 5 (2) Quarterly Condensed Consolidated Statements of Profit or Loss and Comprehensive Income …………… 7 (3) Quarterly Condensed Consolidated Statement of Changes in Equity ……………………………………… 9 (4) Quarterly Condensed Consolidated Statement of Cash Flows …………………………………………… 11 (5) Notes to Quarterly Condensed Consolidated Financial Statements ………………………………………… 12 (Going Concern Assumption) …………………………………………………….………………………… 12 (Segment Information) ………………………………………………………………………………… …… 12 (Revenue) …………………………………………………………………………………… ……………… 14 (Contingent Liabilities) …………………………………………………….…………………………… … 15
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―4― 1. Performance and Financial Position An overview of the consolidated operating results for the three months ended June 30, 2026 and the consolidated financial forecast for the year ending March 31, 2027 is provided in the presentation material, “Financial Results for the 1st Quarter of the Year Ending March 31, 2027,” released today on the Company’s website. https://www.nikon.com/company/ir/ir_library/result/ (i) Financial Position The balance of total assets as of June 30, 2026 increased by 22,125 million yen from the end of the previous fiscal year to 1,097,132 million yen. This was mainly due to increases of 9,578 million yen in other financial assets, owing mainly to an increase in the market value of shares held, 8,605 million yen in property, plant and equipment, goodwill and intangible assets, 5,424 million yen in inventories, and 4,055 million yen in other current assets, despite a decrease of 5,533 million yen in trade and other receivables. The balance of total liabilities as of June 30, 2026 increased by 15,561 million yen from the end of the previous fiscal year to 502,372 million yen. This was mainly due to increases of 10,290 million yen in trade and other payables, 10,244 million yen in advances received, and 1,563 million yen in other non -current liabilities, despite decreases of 4,382 million yen in other current liabilities, owing mainly to a decrease in accrued expenses, and 1,786 million yen in provisions. The balance of total equity as of June 30, 2026 increased by 6,564 million yen from the end of the previous fiscal year to 594,760 million yen. This was mainly due to an increase of 10,359 million yen in other components of equity, primarily as a result of changes in the fair value of financial assets held and an increase in exchange differences on translation of foreign operations, despite a decrease of 3,852 million yen in retained earnings owing mainly to dividends declared. (ii) Cash Flows During the three months ended June 30, 2026, for the cash flows from operating activities, net cash of 20,526 million yen was provided (4,401 million yen provided in the same period of the previous fiscal year). This was mainly attributable to the recordin g of profit before tax of 1,502 million yen and depreciation and amortization of 10,520 million yen, and increases in advances received and trade and other payables, despite an increase in inventories and income taxes paid. For the cash flows from investing activities, net cash of 15,973 million yen was used (13,798 million yen used in the same period of the previous fiscal year). This was mainly attributable to purchase of property, plant and equipment and intangible assets. For the cash flows from financing activities, net cash of 7,555 million yen was used (10,833 million yen provided in the same period of the previous fiscal year). This was mainly attributable to cash dividends paid of 4,872 million yen and repayments of lease liabilities of 2,049 million yen. As a result of an increase of 2,026 million yen due to the effect of exchange rate changes on cash and cash equivalents, along with the cash flows outlined above, the balance of cash and cash equivalents as of June 30, 2026 decreased by 976 million yen from the end of the previous fiscal year to 157,060 million yen.
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―5― 2. Quarterly Condensed Consolidated Financial Statements (1) Quarterly Condensed Consolidated Statement of Financial Position (Millions of yen) As of March 31, 2026 As of June 30, 2026 Changes ASSETS Current assets Cash and cash equivalents 158,036 157,060 (976) Trade and other receivables 127,459 121,926 (5,533) Inventories 332,872 338,296 5,424 Other current financial assets 2,316 4,577 2,261 Other current assets 25,816 29,870 4,055 Total current assets 646,499 651,729 5,230 Non-current assets Property, plant and equipment 150,758 156,912 6,154 Right-of-use assets 17,600 17,105 (495) Goodwill and intangible assets 95,614 98,064 2,451 Retirement benefit asset 3,309 3,752 443 Investments accounted for using equity method 12,417 13,270 853 Other non-current financial assets 73,974 81,292 7,317 Deferred tax assets 73,918 73,283 (636) Other non-current assets 918 1,726 807 Total non-current assets 428,508 445,403 16,895 Total assets 1,075,007 1,097,132 22,125
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―6― (Millions of yen) As of March 31, 2026 As of June 30, 2026 Changes LIABILITIES / EQUITY LIABILITIES Current liabilities Trade and other payables 73,367 83,657 10,290 Bonds and borrowings 97,717 97,159 (559) Income taxes payable 5,151 4,985 (167) Advances received 67,372 77,616 10,244 Provisions 9,548 7,591 (1,957) Other current financial liabilities 30,042 30,263 221 Other current liabilities 45,101 40,719 (4,382) Total current liabilities 328,298 341,990 13,692 Non-current liabilities Bonds and borrowings 122,240 122,262 22 Retirement benefit liability 8,582 8,802 220 Provisions 5,298 5,469 170 Deferred tax liabilities 3,257 3,134 (123) Other non-current financial liabilities 13,323 13,341 17 Other non-current liabilities 5,813 7,376 1,563 Total non-current liabilities 158,513 160,382 1,869 Total liabilities 486,811 502,372 15,561 EQUITY Share capital 65,476 65,476 － Capital surplus － 30 30 Treasury shares (6,813) (6,775) 39 Other components of equity 108,953 119,312 10,359 Retained earnings 419,169 415,317 (3,852) Equity attributable to owners of parent 586,785 593,360 6,575 Non-controlling interests 1,411 1,400 (11) Total equity 588,196 594,760 6,564 Total liabilities and equity 1,075,007 1,097,132 22,125
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―7― (2) Quarterly Condensed Consolidated Statements of Profit or Loss and Comprehensive Income Quarterly Condensed Consolidated Statement of Profit or Loss Three months ended June 30, 2025 (from April 1, 2025 to June 30, 2025) Three months ended June 30, 2026 (from April 1, 2026 to June 30, 2026) Changes (Millions of yen) Ratio to revenue (%) (Millions of yen) Ratio to revenue (%) (Millions of yen) Revenue 158,121 100.0 164,182 100.0 6,061 Cost of sales (90,907) (57.5) (99,622) (60.7) (8,715) Gross profit 67,214 42.5 64,561 39.3 (2,653) Selling, general and administrative expenses (68,235) (66,834) 1,400 Other operating income 914 1,482 568 Other operating expenses (1,085) (205) 880 Operating loss (1,191) (0.8) (997) (0.6) 195 Finance income 2,424 2,765 341 Finance costs (1,240) (1,233) 7 Share of profit of investments accounted for using equity method 802 965 163 Profit before tax 795 0.5 1,502 0.9 706 Income tax expense 8,667 (196) (8,863) Profit for the period 9,462 6.0 1,306 0.8 (8,157) Profit attributable to: Owners of parent 9,469 6.0 1,289 0.8 (8,179) Non-controlling interests (6) 16 23 Profit for the period 9,462 6.0 1,306 0.8 (8,157) Earnings per share: Basic earnings per share (Yen) 28.79 3.91 Diluted earnings per share (Yen) 28.64 3.90
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―8― Quarterly Condensed Consolidated Statement of Comprehensive Income (Millions of yen) Three months ended June 30, 2025 (from April 1, 2025 to June 30, 2025) Three months ended June 30, 2026 (from April 1, 2026 to June 30, 2026) Changes Profit for the period 9,462 1,306 (8,157) Other comprehensive income Items that will not be reclassified subsequently to profit or loss Gain (loss) on financial assets measured at fair value through other comprehensive income 1,686 5,286 3,600 Share of other comprehensive income of investments accounted for using equity method 0 1 1 Total of items that will not be reclassified subsequently to profit or loss 1,686 5,287 3,601 Items that may be reclassified subsequently to profit or loss Exchange differences on translation of foreign operations 417 4,894 4,477 Effective portion of cash flow hedges 96 (71) (168) Share of other comprehensive income of investments accounted for using equity method 39 63 25 Total of items that may be reclassified subsequently to profit or loss 553 4,886 4,334 Other comprehensive income, net of taxes 2,239 10,173 7,934 Total comprehensive income for the period 11,701 11,479 (222) Comprehensive income attributable to: Owners of parent 11,698 11,415 (283) Non-controlling interests 4 64 60 Total comprehensive income for the period 11,701 11,479 (222)
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―9― (3) Quarterly Condensed Consolidated Statement of Changes in Equity (Millions of yen) Equity attributable to owners of parent Share capital Capital surplus Treasury shares Other components of equity Gain (loss) on financial assets measured at fair value through other comprehensive income Share of other comprehensive income of investments accounted for using equity method As of April 1, 2025 65,476 – (7,761) 11,909 (929) Profit for the period – – – – – Other comprehensive income – – – 1,659 39 Total comprehensive income for the period – – – 1,659 39 Dividends – – – – – Purchase and disposal of treasury shares – (0) (0) – – Share-based payment transactions – (459) 499 – – Changes in ownership interest in subsidiaries – – – – – Transfer from retained earnings to capital surplus – 459 – – – Transfer from other components of equity to retained earnings – – – 30 – Total transactions with owners – – 499 30 – As of June 30, 2025 65,476 – (7,262) 13,598 (890) As of April 1, 2026 65,476 – (6,813) 16,660 (541) Profit for the period – – – – – Other comprehensive income – – – 5,271 64 Total comprehensive income for the period – – – 5,271 64 Dividends – – – – – Purchase and disposal of treasury shares – (0) (0) – – Share-based payment transactions – 30 39 – – Changes in ownership interest in subsidiaries – – – – – Transfer from retained earnings to capital surplus – – – – – Transfer from other components of equity to retained earnings – – – 233 – Total transactions with owners – 30 39 233 – As of June 30, 2026 65,476 30 (6,775) 22,164 (476)
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―10― (Millions of yen) Equity attributable to owners of parent Non- controlling interests Total equity Other components of equity Retained earnings Total Exchange differences on translation of foreign operations Effective portion of cash flow hedges Total As of April 1, 2025 55,966 201 67,147 513,115 637,977 1,246 639,223 Profit for the period – – – 9,469 9,469 (6) 9,462 Other comprehensive income 434 96 2,229 – 2,229 10 2,239 Total comprehensive income for the period 434 96 2,229 9,469 11,698 4 11,701 Dividends – – – (8,221) (8,221) (18) (8,238) Purchase and disposal of treasury shares – – – – (0) – (0) Share-based payment transactions – – – – 40 – 40 Changes in ownership interest in subsidiaries – – – – – – – Transfer from retained earnings to capital surplus – – – (459) – – – Transfer from other components of equity to retained earnings – – 30 (30) – – – Total transactions with owners – – 30 (8,710) (8,181) (18) (8,199) As of June 30, 2025 56,401 297 69,406 513,873 641,493 1,232 642,726 As of April 1, 2026 92,679 155 108,953 419,169 586,785 1,411 588,196 Profit for the period – – – 1,289 1,289 16 1,306 Other comprehensive income 4,862 (71) 10,126 – 10,126 47 10,173 Total comprehensive income for the period 4,862 (71) 10,126 1,289 11,415 64 11,479 Dividends – – – (4,941) (4,941) (47) (4,988) Purchase and disposal of treasury shares – – – – (0) – (0) Share-based payment transactions – – – – 69 – 69 Changes in ownership interest in subsidiaries – – – – – 5 5 Transfer from retained earnings to capital surplus – – – – – – – Transfer from other components of equity to retained earnings – – 233 (200) 33 (33) – Total transactions with owners – – 233 (5,141) (4,840) (75) (4,915) As of June 30, 2026 97,541 84 119,312 415,317 593,360 1,400 594,760
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―11― (4) Quarterly Condensed Consolidated Statement of Cash Flows (Millions of yen) Three months ended June 30, 2025 (from April 1, 2025 to June 30, 2025) Three months ended June 30, 2026 (from April 1, 2026 to June 30, 2026) Cash flows from operating activities: Profit before tax 795 1,502 Depreciation and amortization 10,313 10,520 Interest and dividend income (1,805) (1,929) Share of (profit) loss of investments accounted for using equity method (802) (965) Losses (gains) on sale of property, plant and equipment (11) (34) Interest expenses 709 878 Decrease (increase) in trade and other receivables 9,729 7,011 Decrease (increase) in inventories (13,338) (3,847) Increase (decrease) in trade and other payables (519) 7,332 Increase (decrease) in advances received 13,091 10,803 Increase (decrease) in provisions (878) (1,647) Others, net (10,162) (7,668) Subtotal 7,122 21,956 Interest and dividend income received 1,761 1,934 Interest expenses paid (745) (954) Income taxes refund (paid) (3,737) (2,410) Net cash provided by (used in) operating activities 4,401 20,526 Cash flows from investing activities: Purchase of property, plant and equipment (10,207) (9,721) Proceeds from sale of property, plant and equipment 83 88 Purchase of intangible assets (4,071) (5,167) Purchase of investment securities (148) (207) Proceeds from sale of investment securities 370 225 Others, net 175 (1,191) Net cash provided by (used in) investing activities (13,798) (15,973) Cash flows from financing activities: Net increase (decrease) in short-term borrowings 10,847 (547) Proceeds from long-term borrowings 10,000 － Repayments of long-term borrowings (55) (62) Repayments of lease liabilities (1,899) (2,049) Cash dividends paid (8,060) (4,872) Cash dividends paid to non-controlling interests (18) (47) Others, net 17 22 Net cash provided by (used in) financing activities 10,833 (7,555) Effect of exchange rate changes on cash and cash equivalents (285) 2,026 Net increase (decrease) in cash and cash equivalents 1,150 (976) Cash and cash equivalents at beginning of the period 163,590 158,036 Cash and cash equivalents at end of the period 164,740 157,060
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―12― (5) Notes to Quarterly Condensed Consolidated Financial Statements (Going Concern Assumption) Not applicable (Segment Information) (1) Outline of Reportable Business Segments The Group’s reportable segments are components for which discrete financial information is available and which are regularly reviewed by the Board of Directors to determine the allocation of management resources and evaluate performance. In consideration of the similarity of economic characteristics, the Group has integrated its business divisions into five reportable segments consisting of the Imaging Products Business, the Precision Equipment Business, the Healthcare Business, the Industry Business, and the Digital Manufacturing Business. The Imaging Products Business provides products and services of imaging products and its peripheral domain, such as digital cameras, including interchangeable-lens and fixed-lens types, digital cinema cameras, and interchangeable lenses . The Precision Equipment Business provides products and services with regard to the FPD lithography system and semiconductor lithography system. The Healthcare Business provides products and services for the life science solutions field such as biological microscopes, for the eye care s olutions field such as ultra -wide field retinal imaging devices, and for the contract cell development and manufacturing field. The Industry Business provides products and services related to the Industrial Metrology Business such as industrial microscopes, measuring instruments, and X -ray and CT inspections systems; related to the Digital Solutions Business such as optical components, optical parts, and encoders; related to the Customized Products Business such as EUV -related components and space -related s olutions; and related to the Glass Business such as photomask substrates for FPDs. The Digital Manufacturing Business provides products and services of metal 3D printers. (Revision of Reportable Business Segments) Beginning with the three months ended June 30, 2026, the Group changed the name of the reportable segment “Components Business” to “Industry Business”. The Group also transferred its consolidated subsidiary Nikon Vision Co., Ltd. from the “Industry Business” to the “Imaging Products Business”. The segment information for the three months ended June 30, 2025 has been prepared based on the revised business segments.
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―13― (2) Information on Reportable Business Segments Profit or loss of reportable segments is based on operating profit. The intersegment revenues are based on prevailing market prices. Information on revenue and profit (loss) by reportable segment is as follows. For the Three Months Ended June 30, 2025 (From April 1, 2025 to June 30, 2025) (Millions of yen) Imaging Products Precision Equipment Healthcare Industry Digital Manufacturing Others (Note 1) Total Reconciliation (Note 2) Consolidated Revenue External customers 80,054 33,821 23,173 15,157 5,099 817 158,121 － 158,121 Intersegment 310 46 47 228 29 21,433 22,093 (22,093) － Total 80,364 33,867 23,220 15,385 5,128 22,250 180,214 (22,093) 158,121 Segment profit (loss) 11,171 1,889 (1,838) 1,664 (4,190) (212) 8,484 (9,675) (1,191) Finance income 2,424 Finance costs (1,240) Shares of profit of investments accounted for using equity method 802 Profit before tax 795 Notes: 1. The “Others” category consists of operations not included in the reportable segments. 2. Regarding segment profit (loss), reconciliation is made between segment profit (loss) and operating loss reported in the quarterly condensed consolidated statements of profit or loss. Reconciliation of segment profit (loss) includes elimination of intersegment transactions of (1,477) million yen and corporate profit (loss) of (8,199) million yen that cannot be attributed to any segments. The main components of corporate profit (loss) include expenses related to investment in growth of ( 4,153) million yen, which are related to basic research, creation of new business, and manufacturing innovation, and expenses for administration department of (4,046) million yen, which add up general and administrative expenses of headquarter functions and other operating income or expenses that cannot be attributed to any segments. For the Three Months Ended June 30, 2026 (From April 1, 2026 to June 30, 2026) (Millions of yen) Imaging Products Precision Equipment Healthcare Industry Digital Manufacturing Others (Note 1) Total Reconciliation (Note 2) Consolidated Revenue External customers 72,970 38,269 27,791 17,926 6,318 908 164,182 － 164,182 Intersegment 491 196 95 101 4 20,229 21,116 (21,116) － Total 73,461 38,465 27,885 18,027 6,322 21,137 185,298 (21,116) 164,182 Segment profit (loss) 8,103 (2,632) 1,053 3,007 (2,197) 300 7,634 (8,631) (997) Finance income 2,765 Finance costs (1,233) Shares of profit of investments accounted for using equity method 965 Profit before tax 1,502 Notes: 1. The “Others” category consists of operations not included in the reportable segments. 2. Regarding segment profit (loss), reconciliation is made between segment profit (loss) and operating loss reported in the quarterly condensed consolidated statements of profit or loss. Reconciliation of segment profit (loss) includes elimination of intersegment transactions of (1,986) million yen and corporate profit (loss) of (6,645) million yen that cannot be attributed to any segments. The main components of corporate profit (loss) include expenses related to investment in growth of ( 3,135) million yen, which are related to basic research, creation of new business, and manufacturing innovation, and expenses for administration department of (3,509) million yen, which add up general and administrative expenses of headquarter functions and other operating income or expenses that cannot be attributed to any segments.
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―14― (Revenue) In consideration of the similarity of economic characteristics, the Group has integrated its business divisions into five reportable segments consisting of the Imaging Products Business, the Precision Equipment Business, the Healthcare Business, the Industry Business, and the Digital Manufacturing Business. The business segments are periodically reviewed by the Board of Directors to determine the distribution of management resources and evaluate business results, and revenue of these business units is presented as sales revenue. The reconciliation of disaggregated revenue by geographical regions, based on customers’ locations, and segment revenue is as follows. For the Three Months Ended June 30, 2025 (From April 1, 2025 to June 30, 2025) (Millions of yen) Imaging Products Precision Equipment Healthcare Industry Digital Manufacturing Others (Note 1) Total Japan 7,439 3,458 3,108 7,233 269 422 21,929 United States 19,399 6,322 10,716 2,663 2,409 － 41,509 Europe (Note 2) 15,367 4,209 4,673 1,878 2,250 28 28,405 China 22,141 15,289 1,839 1,275 0 318 40,861 Others (Note 2) 15,707 4,543 2,837 2,109 171 50 25,417 Total 80,054 33,821 23,173 15,157 5,099 817 158,121 Notes: 1. The “Others” category consists of operations not included in the reportable segments. 2. Except for Japan, the United States, and China, the countries or regions are primarily categorized as follows: 1) Europe: The United Kingdom, France, and Germany 2) Others: Canada, Asia other than Japan and China, Middle East, Oceania, and Latin America For the Three Months Ended June 30, 2026 (From April 1, 2026 to June 30, 2026) (Millions of yen) Imaging Products Precision Equipment Healthcare Industry Digital Manufacturing Others (Note 1) Total Japan 7,103 6,646 3,133 8,132 73 409 25,496 United States 17,152 4,276 13,561 2,624 4,658 － 42,271 Europe (Note 2) 12,844 5,804 5,301 1,836 1,244 24 27,053 China 18,777 17,192 2,676 1,868 － 400 40,913 Others (Note 2) 17,095 4,352 3,120 3,465 342 75 28,449 Total 72,970 38,269 27,791 17,926 6,318 908 164,182 Notes: 1. The “Others” category consists of operations not included in the reportable segments. 2. Except for Japan, the United States, and China, the countries or regions are primarily categorized as follows: 1) Europe: The United Kingdom, France, and Germany 2) Others: Canada, Asia other than Japan and China, Middle East, Oceania, and Latin America
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―15― (Contingent Liabilities) (Litigation) The Group is exposed throughout its business activities to the possibility of being involved in a contentious case, becoming a defendant in a lawsuit, and being the object of inquiries by government agencies, in Japan and overseas. The Group examines the possibility of recognizing a provision for the obligation arising from a contentious case or a lawsuit, when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The Company’s subsidiary in India (hereinafter referred as the “Subsidiary in India”) was inquired by the Indian Tax Authority regarding the import of the Company’s digital cameras, and in October 2016, the imposition was confirmed in relation to the custo ms duty, interest, and penalty concerning those products. In January 2017, the Subsidiary in India appealed to the Customs, Excise and Service Tax Appellate Tribunal (hereinafter referred to as the “CESTAT”); however, the appeal was dismissed in December 2 017. To object to this decision, in January 2018, the Subsidiary in India filed an appeal to the Supreme Court of India (hereinafter referred to as the “Supreme Court”). In March 2021, the Supreme Court delivered a judgment revoking the decision of the CESTAT and consequently the demand notice by the Indian Tax Authority. Subsequently in April 2021, the Indian Tax Authority filed a request for retrial. The Supreme Court approved the request for retrial in November 2024, and remanded the case to the CESTAT. In April 2025, at the remanded trial, the CESTAT rendered a judgement that the products were exempt from taxation. However, the Indian Tax Authority appealed the judgement to the Supreme Court in February 2026. Subsequently, in July 2026, the Supreme Court accepted the appeal and commenced hearings in the case. As it is currently unable to predict the final decision of the lawsuit, the Company has not recognized any provision based on the aforementioned policy. (Contracts and Legal Compliance) In response to a question raised that the Company’s consolidated subsidiary, Optos Plc, sold refurbished products and new products without distinction, the Company conducted an internal investigation with the cooperation of the external organizations, as well as its own internal review. With respect to potential violations and breaches of legal, regulatory and contractual requirements in the United States, the Company has recorded a provision of 1,443 million yen for possible compensation, penalties or othe r sanction. As a result of the review conducted to date, the Company has not found any quality, sales or marketing or other issues that have caused the Company to increase the provision. Depending on the future progress of the investigation and the Company’s review, there is a possibility that its consolidated performance would be affected in case where payments to regulatory authorities and compensation to customers, etc., exceeding the above provision will occur. However, the Company is unable to reasonably estimate the potential financial impact at this stage. In regard to any other cases, no significant impact on the Company’s consolidated performance and financial position is expected at this point in time.