A1Talking about borrowings, which are directly affected by interest rate hikes, almost our entire borrowings are in yen and are mostly long-term loans. As a result, the interest rate hikes have had almost no impact at this time. If there are new M&A deals in the future using borrowings in yen when the yen is weak, our borrowings may become large. However, as long as the Bank of Japan maintains its current monetary policy, we do not expect interest rates to increase rapidly. Even if interest rates increase, our existing borrowings will not be affected because they are on fixed interest rates.
As for goodwill, we monitor the risk of impairment losses on a quarterly basis. We see no risk of an impairment loss at this time.
We cannot say that there is no risk in Tϋrkiye where interest rates are high, but there is no risk in other regions. In M&A deals, we need to constantly take into consideration discount rates and the permanent growth rate. Although our business model includes exposure to risk involving discount rates, we exercise care to select M&A deals where this risk is unlikely to be a problem.
There is no risk in our balance sheet. In most cases, the effects of exchange rate changes are absorbed by foreign exchange adjustments. The depreciation of the yen against major currencies is raising the yen-denominated value of our overseas assets. Therefore, we don't see any major risk of negative impact on the balance sheet.
Looking at cash flows, our group partner companies in all regions have positive cash flows. Except when DuluxGroup used equity financing for the acquisition of Cromology, there is a low need for NPHD to provide additional funds to our group partner companies. Our Group is characterized by a business model in which each partner company generates cash flows and invests this cash in growth initiatives on its own. As a result, we don't think that the current exchange rate and interest rate environment involves a major risk.
Nippon Paint Holdings Co. Ltd. published this content on 24 November 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 November 2022 08:53:09 UTC.
Nippon Paint Holdings Co Ltd is a company mainly engaged in the manufacture and sale of coating materials and fine chemicals products. The Company is involved in the manufacture and sale of paint for automobile-, general- and industrial-uses, as well as fine chemicals. The Company operates in four business segments. The Japan segment conducts paint for automobile-, general- and industrial-uses, as well as fine chemicals business. The Asia segment conducts paint for automobile-, general- and industrial-uses, as well as fine chemicals business in China Singapore, Malaysia, Thailand, Korea, Southeast Asian countries, India. The Oceania segment conducts paint business, such as paint for general-, industrial-uses, and paints peripheral businesses. The Americas segment conducts paint for automobile business and contruction coating materials business.
NIPPON PAINT HOLDINGS CO., LTD. 
