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66 SHARP CORPORATION
Financial Section
13. Loss on suspension of Large size LCD plant operation
This loss for the year ended March 31, 2012 comprises
extraordinary operating expenses caused by the tempo-
rary suspension of production of large-size LCD panels in
the Company and its consolidated subsidiary, Sharp Dis-
play Products Corporation.
14. Restructuring Charges
These restructuring charges for the year ended March
31, 2011 are mainly related to the reorganization of LCD
plants, including depreciation and maintenance charges of
plants that have been suspended due to production line
changes to meet the increasing demand for high value-
added products.
These restructuring charges for the year ended March
31, 2012 are related to the LCD business restructuring,
etc. Those mainly comprises depreciation and mainte-
nance changes of ¥37,717 million ($465,642 thousand)
concerning plants that were suspended in the Company
and its consolidated subsidiary, Sharp Display Products
Corporation to improve production to meet the increas-
ing demand for high value-added products, and costs of
¥68,125 million ($841,049 thousand) incurred to reinforce
business foundations (inventory write-down, etc.) in prep-
aration for promoting establishment of strategic vertical
integration of the large-size LCD business.
15. Significant Subsequent Events
Significant subsequent events occurring until June 26,
2012 were as follows:
Business Divestiture
The Company entered into an agreement to execute capi-
tal and business alliance with four companies of the Hon
Hai Group on March 27, 2012.
In association with the above capital and business alli-
ance, the Company entered into an agreement in regard
to the partial transfer of shares of its owned subsidiary,
Sharp Display Products Corporation (“SDP”), to Mr. Terry
Tai-Ming Gou, the representative of Hon Hai Precision
(“Hon Hai”). Furthermore, the Company, Toppan Print-
ing Co., Ltd. (“Toppan”) and Dai Nippon Printing Co.,
Ltd. (“DNP”) executed a basic agreement on April 10,
2012 and have conducted deliberations on concrete is-
sues with regard to the business integration of the LCD
color filter businesses into SDP, whereby the LCD color
filter businesses are operated by Toppan, DNP and DNP’s
wholly owned subsidiary, DNP Color Techno Sakai Co.,
Ltd. (“DNP Color Techno Sakai”) at the Sakai Plant.
The Company resolved at its board of directors meet-
ing held on May 24, 2012 to execute business integration
agreements with Toppan and DNP respectively and
transfer the LCD color filter businesses at the Sakai Plant
operated by Toppan, DNP and DNP Color Techno Sakai, to
SDP in the manner of an absorption-type company split.
(a) Outline of Business Divestiture
(1) Name of parties who succeed the divested business
Mr. Terry Tai-Ming Gou, Toppan Printing Co., Ltd., Dai Nip-
pon Printing Co., Ltd. and DNP Color Techno Sakai Co., Ltd.
(2) Nature of divested business
Development, production and sales of LCD panels
(3) Aim of business divestiture
With the efforts such as 1) promotion of the enhance-
ment of cost competitiveness and profit performance
through maintaining a high facility operation rate of SDP
by making practical use of Hon Hai’s purchasing power
and 2) integration of the LCD color filter businesses, the
Company is seeking to promote further efficiency of the
large-size LCD business including the businesses of color
filters, the primary component of LCD panels, as well as
to achieve improvement of the competitiveness of such
businesses.
(4) Date of business divestiture
[1] Transfer of shares through March 26,
2013 (Planned)
[2] Absorption-type company split June 30, 2012 (Planned)
(5) Other items with regard to outline of transactions
which includes description of legal form
[1] Transfer of shares
The Company will receive only assets such as cash as
consideration for the transfer of shares.
[2] Absorption-type company split
The method to be employed is an absorption-type com-
pany split which designates Toppan, DNP and DNP Color
Techno Sakai as split companies and SDP as their suc-
ceeding company.
(b) Name of Reporting Segment which involves the
divested business
Electronic Components