(5) Major litigation In the event of lawsuit being brought against the Group in the future, there is a possibility that this will adversely affect its business performance and financial position. (6) Deferred tax assets The deferred tax assets of the Group are based on an amount that is recorded after judging the potential for collection based on forecasts of future taxable income. If such forecasts deviate significantly from actual results, there is a possibility that this will adversely affect the business performance and financial position of the Group. (7) Changes in foreign currency exchange rates For the reporting period, overseas sales of the Group accounted for 14.4% of total sales. The Group includes seven overseas consolidated subsidiaries and one overseas affiliated company subject to the equity method. There is therefore a possibility of a change in exchange rates adversely affecting the business performance and financial position of the Group. (8) Changes in interest rates The Group is committed to reducing interest-bearing debt, and to improve the overall financial balance. However, there is a possibility that a change in interest rates will influence the business performance and financial position of the Group. (9) Application of accounting for the impairment of long-lived assets In line with changes to the law relating to accounting methods in Japan, the Group employs accounting for the impairment of longlived assets. As a result, in the event of a significant future decline in market prices of land, and/or a deterioration in the Group’s operating environment, there is a possibility of the posting of a substantial impairment loss, which would adversely affect the Group’s business performance and financial position. Estimates or projections included in this report are based on facts known to the Company’s management as of the time of writing, and actual results may therefore differ substantially from such statements. 05 06 07 08 09 0 1,500 3,000 4,500 6,000 (Millions of yen) 5275 5010 4794 4753 4472 R&D expenditures 05 06 07 08 09 0 2,500 5,000 7,500 10,000 (Millions of yen) 7660 7885 8563 8790 8327 Depreciation and amortization expenditures Toagosei Co., Ltd. 23