FINANCIAL SECTION– 31 Management’s Discussion and Analysis– 33 Operating Risks– 34 Financial Summary– 36 Consolidated Balance Sheet– 38 Consolidated Statement of Income– 38 Consolidated Statement of Comprehensive Income– 39 Consolidated Statement of Changes in Net Assets– 40 Consolidated Statement of Cash Flows– 41 Notes to Consolidated Financial Statements– 58 Management’s Report on Internal Control
over Financial Reporting– 59 Report of Independent Auditors

30

LINTEC ANNUAL REPORT 2015≥ FINANCIAL SECTIONManagement’s Discussion and Analysis

Revenues and Expenses

marking ﬁlms were weak in Japan. However, overseas, sales ofIn the ﬁscal year under review, consolidated net sales increased

motorcycle- and automobile-use adhesive products were steady in

2.0% year on year, to ¥207.3 billion. This increase was attributable to

India and the ASEAN region.

a variety of factors including substantial growth in Advanced materials

As a result of the above, net sales in Printing and Industrial

operations backed by the demand effect of smartphones and other

Materials Products were up 0.6% year on year, to ¥86.8 billion, anditems, in addition to the effect of increasing value of yen equivalents

operating income improved 25.6%, to ¥2.9 billion.

due to the weak yen.
Although impacted by an increase in pulp prices, in addition toElectronic and Optical Products

rising raw material and fuel prices as a result of the yen’s deprecia-

In Advanced materials operations, sales of semiconductor-relatedtion, gross proﬁt increased 10.8% year on year, to ¥50.1 billion. This

adhesive tapes grew signiﬁcantly thanks to the demand effect of suchlargely reﬂected an increase in the volume of sales. Operating income

products as smartphones. Sales of semiconductor-related equipment

grew 22.6%, to ¥16.9 billion, primarily due to the new consolidation ofwere also strong mainly in the Taiwan market. Coated ﬁlms for multi-

sales subsidiaries in the ASEAN region. Income before income taxes

layer ceramic capacitor (MLCC) production experienced substantial

was ¥17.6 billion, up 36.3% year on year, income taxes were ¥5.9 billion

sales growth reﬂecting the effects of demand for MLCCs for smart-following the application of tax effect accounting, and net income forphones and automobiles.

the ﬁscal year under review amounted to ¥11.7 billion, a year-on-yearincrease of 37.1%.

In Optical products operations, sales of LCD-related adhesive
products were bolstered by the shift toward larger TVs as well as the

Net income per share increased from ¥114.22 in the previous ﬁscal

demand effect of smartphones, but results were impacted by factors

year to ¥161.63, and return on equity (ROE) climbed from 5.8% to 7.2%.

such as changes in the sales mix.

Performance by Operational Segment

Products were up 5.1% year on year, to ¥83.2 billion, and operating

Printing and Industrial Materials Products

income increased 47.1%, to ¥10.1 billion.

As a result of the above, net sales in Electronic and Optical

In Printing and variable information products operations, sales ofadhesive products for seals and labels in Japan were sluggish, centering

Paper and Converted Products

on products for food and home electronics reﬂecting the effect of a

In Fine and specialty paper products operations, color papers for

decline in demand following the consumption tax hike. However,envelopes, a core product, performed well. Demand for construction

outside of Japan, sales grew in the ASEAN region, mainly in Thailand

material papers, oil resistant papers, and others increased.

and Vietnam.
In Industrial and material operations, sales of window ﬁlms and

Net Sales

Operating Income
207.3¥ Billion

203.2

2014

Printing andIndustrial Materials
Products+0.5¥ Billion

16.9

Paper and Converted
Products–0.5Electronic
andOptical Products+4.1

Printing andIndustrial
Materials
Products
+0.6

13.8

2015
(Years ended March 31)

Paper andConverted
Products
–0.6

2014

Adjustment–0.0Electronic
andOptical Products
+3.2

2015
(Years ended March 31)

LINTEC ANNUAL REPORT 201531≥ FINANCIAL SECTIONManagement’s Discussion and Analysis

In Converted products operations, sales of casting papers forcarbon ﬁber composite materials grew, centering on use for aircraft.

· Retained earnings+¥11.9 billion· Foreign currency translation adjustments+¥ 6.0 billion

Demand for release papers for ﬂexible printed circuits (FPCs) cover lay
ﬁlms also increased solidly. In contrast, casting papers for synthetic

Cash Flows

leather decreased due to the effect of sluggish market conditions

Cash and cash equivalents as of March 31, 2015, amounted to ¥56.1

in China, a mainstay market.

billion, an increase of ¥11.1 billion, or 24.6%, compared with the end of

As a result of the above, net sales in Paper and Converted

the previous ﬁscal year.

Products were down 1.4% year on year, to ¥37.3 billion, and operating[Cash ﬂows from operating activities]

income dropped 14.0%, to ¥4.0 billion.

Net cash provided by operating activities decreased ¥0.8 billion year
Financial Conditionon year, to ¥15.5 billion. The principal movements were as follows:[Assets]· Income before income taxes+¥4.7 billion

Total assets as of March 31, 2015, were ¥237.4 billion, an increase of· Decrease in depreciation and amortization–¥ 1.3 billion¥12.4 billion compared with the end of the previous ﬁscal year. The· Decrease in net deﬁned beneﬁt liability–¥5.6 billion

main reasons for this increase were as follows:· Increase in trade notes and accounts receivable+¥ 1.3 billion+¥10.8 billion· Increase in inventories+¥ 1.1 billion· Inventories+¥ 1.6 billion· Increase in trade notes and accounts payable+¥ 1.0 billion· Deferred tax assets–¥ 2.4 billion· Net deﬁned beneﬁt asset+¥ 1.5 billion· Cash and deposits[Cash ﬂows from investing activities]
Net cash used in investing activities decreased ¥1.8 billion year on year,[Liabilities]

to ¥5.1 billion. The principal movements were as follows:

Total liabilities as of March 31, 2015, were ¥65.8 billion, a decrease· Payments into time deposits–¥ 1.0 billionof ¥6.7 billion compared with the end of the previous ﬁscal year.

· Proceeds from withdrawal of time deposits+¥3.2 billion

The main reason for this decrease was as follows:· Purchase of property, plant and equipment–¥0.8 billion· Net deﬁned beneﬁt liability–¥8.5 billion[Cash ﬂows from ﬁnancing activities][Net Assets]

Net cash used in ﬁnancing activities decreased ¥4.9 billion year on

Net assets as of March 31, 2015, were ¥171.7 billion, an increase ofyear, to ¥3.1 billion. The principal movement was as follows:¥19.1 billion compared with the end of the previous ﬁscal year. The· Purchase of treasury stock+¥5.0 billion

main reasons for this increase were as follows:

Net Assets¥ Billion

Cash Flows
Total
shareholders’equity
+9.2

171.7
Share
subscription
rights+0.0

Net cash used inﬁnancing activities–3.1¥ Billion

Minority
interests+0.1

Net cashused ininvestingactivities
–5.1

45.0
152.6
Cumulative effects
of changes inaccounting policies
+2.7
2014

32

LINTEC ANNUAL REPORT 2015

Net cashprovided byoperatingactivities+15.5

Total accumulated
other comprehensive
income+7.1

2015(Years ended March 31)

2014

56.1

Increase in
cash andcash equivalentsfrom newly
consolidated
subsidiary+1.4
Effect ofexchange ratechange on cash
and cashequivalents
+2.4
2015
(Years ended March 31)

Operating Risks

The following is a summary of risks that could affect the LINTEC Group’s(4) Outbreaks of contagious diseases

operations. This summary provides speciﬁc examples of major risks(5) Unpredictable changes in laws and regulations, such as thosethat are anticipated, but it does not include all risks.

involving tax systems, foreign exchange, or customs(6) Problems arising between the Group and its business associates

1. Changes in Economic Conditions

or in the collection of accounts receivable due to differences in

The Group’s operations include development in a wide range ofcultures or business practices

industries. Therefore, domestic and overseas economic conditions affect
the Group’s operations directly and indirectly. As a result, future trends

6. New Product Developmentin economic conditions could affect the Group’s business results.

The Group pursues R&D activities with a view to realizing comprehensive

Furthermore, global trends in the electronics industry affect the Group’s

technological capabilities that cater to market demand and bringing

new businesses in the ﬁeld of electronics-related products. Future

to market competitive, high-value-added products. Accordingly, theelectronics industry trends could affect the Group’s business results.

Group is stepping up allocations of management resources to increase
its number of researchers and to pursue such initiatives as joint research

2. Changes in Selling Prices
Due to intense competition in both the domestic and overseas

with other companies and academic institutions.
However, there is no guarantee that such investment of management

markets in which the Group operates, the Group may be unable toresources in R&D will result in the development of new products ormaintain selling prices to preserve sufﬁcient earnings or sales share.

increase operating income. Due to such factors as extended development

Furthermore, the Group’s business results could be affected byperiods, it could become necessary to discontinue development, anddifﬁculties related to cost reductions aimed at maintaining proﬁts

if product development costs cannot be recovered, it could affect theand recovering its share by reﬁning customer services.

Group’s business results.

3. Changes in Raw Material Prices

7. Intellectual Property Rights

The Group uses a large quantity of pulp for paper and petrochemical

The Group takes necessary measures to protect intellectual property

products as raw materials and fuel. The prices of these materials andrights in Japan and overseas for various original production technologies

fuels ﬂuctuate in accordance with market conditions, such as inven-that it has developed. However, legal measures alone do not provide

tories and the supply-demand balance. The Group purchases raw

complete protection, possibly preventing the Group from effectively

materials in light of careful monitoring of market trends. However,protecting the rights it has obtained. Furthermore, in the event thata dramatic change in raw material prices could affect the Group’s

a lawsuit is ﬁled by a third party regarding intellectual property rights

business results.

infringement associated with the Group’s products, the Group’s businessresults could be affected.

4. Changes in Foreign Exchange Rates
The Group conducts foreign currency-denominated procurement and8. Signiﬁcant Lawsuits

sales overseas as well as ﬁnance transactions between both domestic

In conducting business in Japan and overseas, the Group may be subject

and overseas Group companies. Therefore, changes in foreign

to lawsuits or other claims related to product liability, environmental,

exchange rates could affect the Group’s business results.

or intellectual property rights issues. Lawsuits or claims, dependingon their content, could affect the Group’s business results.

5. Overseas Operations
The Group conducts manufacturing and business operations in markets

9. Legal and Regulatory Systems

worldwide. In these countries, the following events could affect theIn the countries in which it conducts business operations, the Group isGroup’s business results.

subject to various legal and regulatory systems, and as such is working(1) Political instability or a deterioration in security due to such factors

to ensure rigorous compliance with these systems. In the event that theas terrorism, a political change, or a coup d’état(2) Labor disputes, such as those involving strikes or boycotts

systems are strengthened or changed, the Group’s business activities
could be restricted or the Group’s business results could be affected.

(3) Infrastructure failures, such as those related to electric power,
water, or communications

LINTEC ANNUAL REPORT 201533

≥ FINANCIAL SECTION

Financial Summary
LINTEC Corporation and its consolidated subsidiaries
Years ended March 31

For the year:
Net sales
Operating income% of net sales
Income before income taxes
Net income
Return on equity
Return on assets
Per share data (yen):
Net income
Net assets
Cash dividends
Depreciation and amortization
Purchase of property, plant and equipment
Net cash provided by operating activities
Net cash used in investing activities
Net cash used in financing activities
At year-end:
Current assets
Current liabilities
Working capital
Cash and cash equivalents
Property, plant and equipment, net
Long-term debt, less current portion% of shareholders’ equity
Total assets
Net assets% of total assets
Number of shares outstanding
Number of employees
Segment information:
Net sales:
Printing and Industrial Materials ProductsElectronic and Optical Products
Paper and Converted Products
Segment income:Printing and Industrial Materials ProductsElectronic and Optical Products
Paper and Converted Products

2015

2014

2013

2012

¥207,255
16,881
8.1%
17,555
11,6597.2%
7.8%¥203,242
13,766
6.8%
12,883
8,501
5.8%
6.0%

¥190,844
10,564
5.5%
10,836
7,681
5.6%
5.2%

¥200,905
13,975
7.0%
13,382
8,648
6.6%
6.5%

¥ 161.63
2,363.81
48.00¥ 114.22
2,100.87
42.00¥ 102.83
1,909.57
34.00¥ 115.26
1,766.60
40.00¥ 8,713(6,299)15,485(5,104)(3,135)¥10,055(5,508)16,309(6,952)(8,020)¥ 10,141(13,823)
19,619(13,966)(2,877)¥ 10,079(8,760)18,910(12,262)(5,099)¥163,017
57,058105,958
56,05061,503——
237,444
171,67471.8%¥149,396
54,82094,57544,99261,456——225,073
152,61067.3%¥138,505
56,911
81,59340,73964,915——
216,048
143,569
66.0%¥137,229
62,07575,15336,03662,273——
210,203132,847
62.8%

76,564,240
4,413

76,564,240
4,223

76,564,240
4,270

76,564,240
4,286¥86,826
83,28154,564¥86,310
79,14352,781¥82,785
72,37252,061¥90,143
73,92553,225

2,878
10,071
3,996

2,290
6,846
4,645

2,380
3,196
4,980

5,213
3,942
4,846

(Supplementary information)
Effective the year ended March 31, 2011, the “Accounting Standard for Disclosure about Segments of an Enterprise and Related Information” (Accounting Standards Board of Japan (ASBJ)
Statement No. 17, issued by ASBJ on March 27, 2009) and the “Guidance on Accounting Standard for Disclosures about Segments of an Enterprise and Related Information” (ASBJ Guidance
No. 20, issued by ASBJ on March 21, 2008) have been applied.
Since it is impracticable to restate segment information of the ﬁscal years of 2010 and before complying revised accounting standards for segment information, only reportable segment
information for the year ended March 31, 2011 onward have been presented.

34

LINTEC ANNUAL REPORT 2015

Millions of yen, except per share data, number of shares, and number of employees

2011

2010

2009

2008

2007

2006

¥212,733
20,8899.8%
19,565
13,62210.9%
9.7%¥189,348
11,576
6.1%
11,399
7,284
6.2%
6.1%

¥194,901
8,498
4.4%
5,215
3,391
2.9%
3.0%

¥202,297
14,8947.4%
13,191
9,308
8.0%
6.6%

¥192,723
14,798
7.7%
14,298
10,2389.5%
7.7%¥180,334
13,618
7.6%
13,214
9,011
9.2%
7.7%

¥ 180.21
1,715.78
40.00¥ 96.36
1,596.37
24.00¥ 44.86
1,497.58
20.00¥ 123.15
1,598.30
24.00¥ 135.44
1,489.87
18.00¥ 118.34
1,370.85
16.00¥10,178(8,237)23,307(9,926)(2,820)¥10,537(7,777)22,259(9,253)(3,454)¥11,286(9,584)
12,979(9,752)(2,300)¥ 9,011(14,700)
17,739(15,071)(769)¥ 7,701(11,646)
13,734(12,200)(68)¥ 6,823(12,715)
17,005(13,199)(2,789)¥132,891
60,46572,42635,18861,888——206,188
130,57662.9%¥121,451
58,65462,79725,387
63,33754
0.0%
195,656
121,502
61.7%¥ 95,937
43,65552,282
15,37067,010107
0.1%
172,854
113,93065.5%¥120,028
67,631
52,397
17,31573,711201
0.2%
204,852
121,635
59.4%¥117,531
67,95049,581
15,55068,377280
0.3%
198,526
113,397
57.1%¥104,433
57,74846,685
13,766
63,176347
0.3%
181,158
104,36257.6%

76,564,240
4,198

76,564,240
4,037

76,564,240
3,987

76,564,240
3,802

76,564,240
3,708

76,564,240
3,537¥91,936
81,19355,317

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

7,990
6,732
6,129

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

LINTEC ANNUAL REPORT 201535

≥ FINANCIAL SECTION

Consolidated Balance Sheet
LINTEC Corporation and its consolidated subsidiaries
March 31, 2015 and 2014ASSETS

Millions of yen

Thousands of
U.S. dollars(Note 1)

2015

2014

2015

Current assets:¥ 62,059¥ 51,212

Trade notes and accounts receivable (Note 12)

64,094

63,488533,364

Inventories (Note 3)

32,14230,554

267,477

Deferred tax assets (Note 17)

1,879

1,922

15,636

Other

2,944

2,308

24,505

Cash and deposits (Notes 10, 12)$

516,433

(103)

(89)

(862)

163,017

149,396

1,356,555

Buildings and structures

64,99363,909540,846

Machinery, equipment and vehicles

113,258

112,819

942,489Land

10,263

10,39585,405Construction in progress

3,635

354

30,250Allowance for doubtful accounts
Total current assets

Non-current assets:
Property, plant and equipment (Notes 6, 7, 8, 11):

11,688

10,957

97,269203,839

198,436

1,696,260(142,335)(136,979)(1,184,454)

61,50361,456

511,806

2,538

2,794

21,123

Investment securities (Notes 12, 13)

3,313

3,594

27,570Net defined benefit asset (Note 15)

1,823

366

15,174

Deferred tax assets (Note 17)

3,578

5,940

29,779

Other

1,887

1,798

15,707

Allowance for doubtful accounts

(217)

(275)

(1,813)

Total investments and other assets

10,384

11,42586,417

Total non-current assets

74,42775,676619,347¥ 237,444¥ 225,073$ 1,975,903

Other

Accumulated depreciation
Property, plant and equipment, net

Intangible assets (Note 11):

Investments and other assets:

Total assets
The accompanying notes are an integral part of the consolidated ﬁnancial statements.

36

LINTEC ANNUAL REPORT 2015

LIABILITIES AND NET ASSETS

Millions of yen

Thousands of
U.S. dollars(Note 1)

2015

2014

2015

Current liabilities:¥ 40,674¥ 41,286

Short-term borrowings (Notes 12, 24)

1,695

1,510

14,105

Accrued income taxes (Notes 12, 17)

3,413

2,594

28,408Trade notes and accounts payable (Note 12)

Provision for directors’ bonuses
Other
Total current liabilities$

338,473

111

73

928

11,164

9,355

92,902

57,05854,820474,817

Non-current liabilities:
Provision for environmental measures

140

132

1,167

Net defined benefit liability (Note 15)

7,853

16,37565,353

717

1,133

5,969

Total non-current liabilities

8,711

17,641

72,490Total liabilities

65,77072,462547,308

23,201

23,201

193,070

Other

Commitments and contingent liabilities (Note 2)
Net assets:
Shareholders’ equity (Note 23):
Common stock:
Authorized: 300,000,000 shares in 2015 and 2014
Issued: 76,564,240 shares in 2015 and 2014
Capital surplus

26,83026,830223,267

Retained earnings

116,638

104,771970,609

Less: treasury stock, at cost:
4,428,615 shares in 2015 and 4,436,436 shares in 2014
Total shareholders’ equity(7,741)(7,754)(64,418)

158,928

147,048

1,322,529

Accumulated other comprehensive income
Net unrealized holding gain on securities

832

355

6,927

Foreign currency translation adjustments

11,256

5,236

93,674Remeasurements of defined benefit plans (Note 15)(503)(1,110)(4,185)

Total accumulated other comprehensive income

11,586

4,482

96,415

166

148

1,387

Share subscription rights (Note 16)

992

930

8,262

Total net assets

171,674

152,610

1,428,594

Total liabilities and net assets¥237,444¥225,073$1,975,903

Minority interests

LINTEC ANNUAL REPORT 201537

≥ FINANCIAL SECTION

Consolidated Statement of Income
LINTEC Corporation and its consolidated subsidiaries
Years ended March 31, 2015 and 2014

Millions of yen

ASSETSNet sales
Cost of sales
Gross profit
Selling, general and administrative expenses (Notes 4, 5)
Operating income
Non-operating income:Interest income
Dividend income
Rent income
Gain on sales of noncurrent assets
Foreign exchange gains
Other income
Total non-operating income
Non-operating expenses:
Interest expenses
Loss on retirement of noncurrent assets
Compensation expenses
Other expenses
Total non-operating expenses
Ordinary income
Extraordinary gain:
Gain on sales of noncurrent assets (Note 6)
Gain on liquidation of subsidiaries
Subsidy
Total extraordinary gain
Extraordinary loss:
Impairment loss (Note 8)
Loss on sales of noncurrent assets (Note 7)
Total extraordinary losses
Income before income taxes
Income taxes (Note 17):
Current
Deferred
Total income taxes
Income before minority interests
Minority interests
Net income (Note 23)

Thousands of
U.S. dollars(Note 1)

2015

2014

2015

¥207,255
157,12250,13333,251
16,881¥203,242
158,005
45,236
31,47013,766$1,724,684
1,307,498
417,185276,701
140,483

335
55
55
45
1,487
369
2,349

261
59
52
39
399
305
1,118

2,792
465
462
380
12,377
3,072
19,550

21
388
753
166
1,329
17,901

13
379
938
388
1,719
13,165

179
3,235
6,266
1,384
11,065
148,967

259
69
—
329

21
—
28
49

2,158
579
—
2,738

674
—
674
17,555308
23
332
12,883

5,614
—
5,614
146,091

5,851
48
5,899
11,656(2)¥ 11,659

4,449
(55)
4,394
8,489
(12)
8,501

48,691
401
49,092
96,998(24)
97,023¥$

Consolidated Statement of Comprehensive Income
LINTEC Corporation and its consolidated subsidiaries
Years ended March 31, 2015 and 2014

Millions of yen

ASSETS
Income before minority interests
Other comprehensive income (Note 9)
Net unrealized holding gain on securities
Foreign currency translation adjustments
Adjustment regarding pension obligations of consolidated overseas subsidiaries
Remeasurements of defined benefit plans (Note 15)
Total other comprehensive income
Comprehensive income(Comprehensive income attributable to:)Shareholders of the parent
Minority interests
The accompanying notes are an integral part of the consolidated ﬁnancial statements.

38

LINTEC ANNUAL REPORT 2015

Thousands of
U.S. dollars(Note 1)

2015

2014

2015

¥11,656¥ 8,489$ 96,998

476
5,885
—
595
6,958
¥18,614

140
9,221
127
—
9,489
¥17,978

3,968
48,978—
4,954
57,901$154,900

18,552
62

17,848130

154,383516

Consolidated Statement of Changes in Net Assets
LINTEC Corporation and its consolidated subsidiaries
Years ended March 31, 2015 and 2014

Thousands

Millions of yen
Shareholders’ equity

Balance as at April 1, 2013

Accumulated other comprehensive income

Number ofshares ofcommonstock

Commonstock

CapitalsurplusRetainedearnings

Net
Total unrealized
Treasury shareholders’ holding gain
stock
equity on securities

76,564¥23,201¥26,830¥99,198¥(2,752)¥146,478

23,201

26,83099,198(2,752)

146,478

Adjustment
regardingpension
Total
Foreign obligations of Remeasure- accumulated
currency consolidated
ments of other comSharetranslation
overseas
defined prehensive subscription
adjustments subsidiaries benefit plansincomerightsMinority
interests

Total net
assets¥213¥(3,843)¥(213)—¥(3,843)

¥113

¥822

¥143,569

213(3,843)(213)—(3,843)

113822

143,569

Cumulative effects of changes
in accounting policies—

Restated balance—

Changes during the year:
Cash dividends(2,838)(2,838)Net income

8,501

8,501

8,501

(5,001)(5,001)

Purchase of treasury stock(5,001)

Disposal of treasury stock
Change of scope of consolidation(90)(2,838)

—

—

(90)

(90)

Net changes in items other
142

9,080

213

(1,110)

8,326

35

108

8,469

Total changes during the year

than shareholders’ equity
—

—

—

5,572

(5,001)

570

142

9,080

213

(1,110)

8,326

35

108

9,040

Balance as at March 31, 2014

76,564¥23,201¥26,830¥104,771¥(7,754)¥147,048¥355¥5,236—¥(1,110)¥4,482¥148¥930¥152,610

23,201

26,830107,497(7,754)

149,774

355

5,236

—

(1,110)

4,482

148

930

155,336

Cumulative effects of changes
2,725

in accounting policies
Restated balance

2,725

2,725

Changes during the year:
Cash dividends(3,101)(3,101)(3,101)

Net income

11,65911,65911,659

(2)

(2)

(2)

15

15

15

583

583

Purchase of treasury stock(0)

Disposal of treasury stock

583

Change of scope of consolidation
Net changes in items other

476

6,020

—

606

7,104

18

62

7,184

9,153

476

6,020

—

606

7,104

18

62

16,337¥(7,741) ¥158,928¥832¥11,256—¥(503)¥11,586

¥166

¥992

¥171,674

than shareholders’ equity
Total changes during the year

—

—

(0)

9,140

Balance as at March 31, 2015

76,564¥23,201¥26,830¥116,638

12

Thousands

Thousands of U.S. dollars (Note 1)
Shareholders’ equity

Accumulated other comprehensive income
Adjustment
regardingpension
Total
Foreign obligations of Remeasure- accumulated
currency consolidated
ments of other comSharetranslation
overseas
defined prehensive subscription
adjustments subsidiaries benefit plansincomerightsNumber ofshares ofcommonstock

Commonstock

CapitalsurplusRetainedearnings

Net
Total unrealized
Treasury shareholders’ holding gain
stock
equity on securities

76,564$193,070$223,270$871,857$(64,525) $1,223,673

22,684

22,684

193,070

223,270

894,542(64,525) 1,246,357

Cash dividends(25,810)(25,810)(25,810)Net income

97,02397,02397,023

Balance as at April 1, 2014

Minority
interests

Total net
assets$2,958$43,576—$ (9,237)$37,298$1,236$7,745 $1,269,953

2,958

43,576—(9,237)37,298

1,236

7,745

Cumulative effects of changes
in accounting policies
Restated balance

22,684
1,292,638

Changes during the year:

Purchase of treasury stock(2)

Disposal of treasury stock

(22)

(22)

(22)

129

126

126

4,854

4,854

4,854

Change of scope of consolidation
Net changes in items other

3,968

50,097—

5,051

59,117151

516

59,78576,171

3,968

50,097—

5,051

59,117151

516

135,956$(64,418) $1,322,529$6,927$93,674—$(4,185)$96,415$1,387than shareholders’ equity
Total changes during the year

—

—

(2)

76,066

Balance as at March 31, 2015

76,564$193,070$223,267$970,609

107$8,262 $1,428,594

The accompanying notes are an integral part of the consolidated ﬁnancial statements.

LINTEC ANNUAL REPORT 201539

≥ FINANCIAL SECTION

Consolidated Statement of Cash Flows
LINTEC Corporation and its consolidated subsidiaries
Years ended March 31, 2015 and 2014ASSETSCash flows from operating activities:
Income before income taxes
Depreciation and amortization
Amortization of goodwill
Amortization of negative goodwill
Increase (decrease) in net defined benefit liability
Increase (decrease) in allowance for doubtful accounts
Interest and dividend income
Interest expenses
Loss (gain) on sales of property, plant and equipment
Loss on retirement of property, plant and equipment
Decrease (increase) in trade notes and accounts receivable
Decrease (increase) in inventories
Increase (decrease) in trade notes and accounts payable
Loss (gain) on sales of investment securities
Increase (decrease) in provision for environmental measures
Impairment loss
Loss (gain) on liquidation of subsidiaries
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes (paid) refund
Net cash provided by operating activities
Cash flows from investing activities:
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Purchase of shares of subsidiaries
Proceeds from liquidation of subsidiaries
Payments of loans receivableCollection of loans receivable
Other, net
Net cash used in investing activities
Cash flows from financing activities:
Increase (decrease) in short-term borrowings
Cash dividends paid
Purchase of treasury stock
Repayments of lease obligations
Other, net
Net cash used in financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Increase in cash and cash equivalents from newly consolidated subsidiary
Decrease in cash and cash equivalents resulting from exclusion of subsidiaries
from consolidation
Cash and cash equivalents at end of year (Note 10)
The accompanying notes are an integral part of the consolidated ﬁnancial statements.

40

LINTEC ANNUAL REPORT 2015

Millions of yen

Thousands of
U.S. dollars(Note 1)

2015

2014

2015

¥ 17,555
8,713
76—(4,671)
(57)
(391)
21
(300)
325
1,449
(30)
(2,090)
(0)
7
674
(69)
(1,125)20,086397(21)(4,976)
15,485¥12,883
10,055
70
(8)
945
(80)
(321)
13
(24)
331
127
(1,133)(3,136)
(0)
—
308
—
(26)
20,004302(13)(3,984)16,309$146,091
72,509640—(38,871)(482)(3,257)179(2,504)
2,706
12,059(253)(17,400)
(0)
63
5,614
(579)
(9,363)
167,150
3,303(178)(41,414)
128,861(10,353)
11,084(6,299)
472
(195)
(12)
0
(0)
105
(2)
34
61
(5,104)(9,369)7,927(5,508)
400
(139)
(2)
3
(29)
—
(302)
3
66
(6,952)(86,160)
92,243(52,417)
3,928(1,626)
(101)
0
(0)
880
(16)
285
510
(42,475)

185(3,103)(2)(214)
0(3,135)2,363
9,608
44,992
1,449

50(2,841)(5,001)(227)—(8,020)2,979
4,315
40,73919

1,539(25,823)(22)(1,787)0(26,093)
19,667
79,959374,405
12,062—¥ 56,050(83)¥44,992—$466,428

Notes to Consolidated Financial Statements
LINTEC Corporation and its consolidated subsidiaries
March 31, 2015

1. Summary of Significant Accounting Policies(a) Basis of presenting financial statements
LINTEC Corporation (the “Company”) maintains its accounting records
and prepares its consolidated financial statements in accordance withaccounting principles generally accepted in Japan, which are different incertain respects as to the application and disclosure requirements ofInternational Financial Reporting Standards. The accompanying consolidated financial statements have been compiled from the consolidated
financial statements prepared by the Company as required by the
Financial Instruments and Exchange Act of Japan.
In addition, the notes to the consolidated financial statements include
information which is not required under accounting principles generally
accepted in Japan but is presented herein as additional information.
For the convenience of the readers, the accompanying consolidated
financial statements have been presented in U.S. dollars by translating
all Japanese yen amounts at the rate of ¥120.17=U.S.$1, the prevailingexchange rate as of March 31, 2015. This translation should not be
construed as a representation that the Japanese yen amounts could be
converted into U.S. dollars at this or any other rate of exchange.
As permitted under the Financial Instruments and Exchange Act ofJapan, amounts of less than one million yen have been omitted. As a result,
the totals shown in the accompanying consolidated financial statements
do not necessarily agree with the sum of the individual amounts.
Certain reclassifications of previously reported amounts have been
made to conform to the consolidated financial statements for the year
ended March 31, 2015 presentation.
(b) Consolidation
The accompanying consolidated financial statements include the accountsof the Company and its 32 significant subsidiaries as of March 31, 2015,
but exclude subsidiaries whose total assets, retained earnings, net sales
and net income are not material in relation to the comparable amounts inthese statements. All significant intercompany accounts and transactions
have been eliminated in consolidation.
Goodwill is amortized over periods of the estimated useful economic
lives (mainly 5 years) on a straight-line basis.
Investments in subsidiaries and affiliates, which are not consolidated or
accounted for by the equity method, are carried at cost. Where there has
been a permanent decline in the value of such investments, the Company
has written down the investments.
Certain subsidiaries are consolidated on the basis of fiscal period
ending December 31, which differ from that of the Company. The necessary
adjustments are made to the financial statements of such subsidiaries toreflect any significant transactions from their respective fiscal year ends
to March 31.
(c) Foreign currency translation
Receivables, payables and securities denominated in foreign currencies
are converted into Japanese yen at the exchange rates at fiscal year end.
Transactions in foreign currencies are recorded based on the prevailingexchange rate on the transaction dates and the resulting translation gains
or losses are included in statement of income.
In respect of the financial statement items of overseas subsidiaries, allassets and liabilities accounts are translated into Japanese yen by
applying the exchange rates in effect at the fiscal year end. All income andexpense accounts are translated into Japanese yen by applying the
average exchange rate during the fiscal year.
Translation differences after allocating to minority interest for portions
attributable to minority interest are reported as foreign currency translation
adjustments in a separate component of net assets in the accompanying
consolidated balance sheet.

(d) Investment securities
Securities with market value are stated at fair value, and changes in fairvalue are recorded as a separate component of net assets at an amount,net of tax, and the moving average method is used to calculate the originalcost. Securities without market value are stated at cost determined by themoving average method.
(e) Inventories
Inventories mainly apply the cost method based on the weighted-averagemethod, which determines the amount of the inventories shown on the
consolidated balance sheet by writing them down based on the decreasein their profitability.
Machinery applies the cost method based on the specific identification
method, which determines the amount of the inventories shown on the
consolidated balance sheet by writing them down based on the decreasein their profitability.
(f) Property, plant and equipment (Excluding leased assets)
Property, plant and equipment are stated at cost. Depreciation in the
Company is principally computed by the declining-balance method overthe estimated useful lives of the respective assets except for the buildings
acquired on or after April 1, 1998, for which the straight-line method is used.
Depreciation in its consolidated foreign subsidiaries is computed by thestraight-line method over the useful lives of the respective assets.
The significant useful lives are summarized as follows:
Buildings and structures
2 — 50 years
Machinery, equipment and vehicles
3 — 17 years(g) Intangible assets (Excluding leased assets)
Intangible assets are stated at cost less accumulated amortization.
Capitalized costs of software for internal use and other intangible assets
are amortized using the straight-line method over estimated lives (5 years).
(h) Leases
Leased assets arising from finance lease transactions which transfer
ownership to the lessee are depreciated as the same as the owned
property, plant and equipment.
Leased assets arising from finance lease transactions which do nottransfer ownership to the lessee are depreciated to a residual value ofzero by the straight-line method using the contract term as the useful life.
(i) Allowance for doubtful accounts
The allowance for doubtful accounts is provided at the amount of estimateduncollectible accounts, based on individual collectability with respect toidentified doubtful receivables and past experience of doubtful receivables.
(j) Provision for directors’ bonuses
Bonus to directors is accrued at the year end and to be paid in thefollowing year when such bonuses are attributable.
(k) Accounting method for retirement benefits(1) Method of attributing expected retirement benefits to periods
In calculating retirement benefit obligations, the benefit formula basis
is used to attribute expected retirement benefits to periods throughthe end of the fiscal year.
(2) Method of amortizing actuarial gain and loss and prior service cost
Actuarial gain and loss are amortized in the year following the year
in which the gain or loss is recognized by the straight-line method
principally over 15 years. Prior service cost is being amortized by thestraight-line method principally over 15 years.
(l) Provision for environmental measures
The provision for environmental measures is estimated and recorded toprovide for future potential costs, such as costs related to removal anddisposal of toxic substances based on related legal requirements.
(m) Accounting for consumption taxes
Transactions subject to consumption taxes are recorded at amounts
exclusive of consumption taxes.

LINTEC ANNUAL REPORT 201541

≥ FINANCIAL SECTION(n) Cash and cash equivalents
Cash and cash equivalents are composed of cash and time deposits,
all of which are low-risk, short-term financial instruments readily
convertible into cash.
(o) Research and development costs
Research and development costs are charged to income when incurred.
(p) Income taxes
Deferred tax assets and liabilities are determined based on differences
between financial reporting and tax bases of assets and liabilities and aremeasured using enacted tax rates and laws that will be in effect when the
differences are expected to reverse.
(q) Shareholders’ equity
The Corporation Law of Japan provides that an amount equal to 10%of the amount to be distributed as distributions of capital surplus (otherthan the capital reserve) and retained earnings (other than the legal
reserve) be transferred to the capital reserve and the legal reserve,
respectively, until the sum of the capital reserve and the legal reserve
equals 25% of the common stock account. Such distributions can be madeat any time by resolution of the shareholders or by the Boardof Directors if certain conditions are met, but neither the capital reserve
nor the legal reserve is available for distributions.
(r) Changes in accounting principles
The main clause of Article 35 of the “Accounting Standard for Retirement
Benefits” (ASBJ Statement No. 26 issued on May 17, 2012, hereinafter“Retirement Benefits Accounting Standard”) and the main clause of

Article 67 of the “Guidance on Accounting Standard for Retirement
Benefits” (ASBJ Guidance No. 25 issued on March 26, 2015 hereinafter“Retirement Benefits Guidance”) are effective from April 1, 2014. In
applying these accounting standards, there was a change from thestraight-line basis to the benefit formula basis as the method of attributing expected retirement benefits to periods for the calculation of theretirement benefit obligations and service cost. Also, the Company haschanged the method of determining the discount rate from a method inwhich bond duration as the basis for determining the discount rate isdetermined based on a number of years similar to the average remaining
service period of employees to a method of using a single weighted
average discount rate that reflects the estimated timing and amount of
the retirement benefit payments.
Application of the Retirement Benefits Accounting Standards, etc. arein accordance with the transitional treatment set forth in Article 37 of the
Retirement Benefits Accounting Standards and at the beginning of thisconsolidated fiscal year, the amount affected by such changes is reflected
as additions to retained earnings.
As a result, net defined benefit liability as of April 1, 2014 decreased by¥4,018 million (U.S. $33,438 thousand), net defined benefit asset increasedby ¥217 million (U.S. $1,807), and retained earnings increased by ¥2,725
million (U.S. $22,684). The impact on consolidated earnings was insignificant.
In addition, the impact of this accounting change on per share data canbe found under Note 23, “Amounts Per Share.”

2. Commitments and Contingent Liabilities
The Company and its consolidated subsidiaries had unused lines of credit for short-term financing aggregating ¥22,286 million (U.S. $185,455 thousand)and ¥21,301 million at March 31, 2015 and 2014, respectively.
3. Inventories
Finished goods and merchandise, work in process, and raw materials and supplies as of March 31, 2015 and 2014 were as follows:
Millions of yen

Thousands of
U.S. dollars

Finished goods and merchandise

2015¥10,7142014¥ 9,560

2015$ 89,164

Work in process

11,678

11,70097,185

Raw materials and supplies

9,749

9,292

81,127¥32,142¥30,554$267,477

Millions of yen

Thousands of
U.S. dollars

2014¥ 5,0412015$ 43,693

ASSETS

Total

4. Selling, General and Administrative Expenses
Major items included in selling, general and administrative expenses for the years ended March 31, 2015 and 2014 were as follows:

ASSETSTransportation and warehousing expenses

15

(53)

133

7,430

6,830

61,831Retirement benefit expenses

396

507

3,295

Provision for directors’ bonuses

111

80

928

1,059

1,057

8,817

Provision for allowance for doubtful accounts
Salaries and allowances

Depreciation
Research and development expenses

6,771

6,849

56,351

Other

12,215

11,157

101,651¥33,251¥31,470$276,701

Total

42

2015
¥ 5,250

LINTEC ANNUAL REPORT 2015

5. Research and Development Expenses
Research and development expenses, all of which were included in selling, general and administrative expenses, for the years ended March 31, 2015 and2014 were ¥6,771 million (U.S.$56,351 thousand) and ¥6,849 million, respectively.
6. Gain on Sales of Noncurrent Assets
Gain on sales of noncurrent assets was principally related to sales of land for the year ended March 31, 2015 and sales of buildings and structures forthe year ended March 31, 2014.
7. Loss on Sales of Noncurrent Assets
Loss on sales of noncurrent assets was related to sales of land for the year ended March 31, 2014.
8. Impairment Loss on Property, Plant and Equipment
The Company has recognized impairment loss on the following classes of assets for the year ended March 31, 2015:
Major use

Company housing for employees

Pressure-sensitive adhesive related
products manufacturing equipment

Location

Kumagaya city, Saitama

Massachusetts State, U.S.A.

Category

Millions of yen

Thousands of
U.S. dollars

Buildings and structures

¥ 46

$ 388

Land

197

1,639

Other

0

0

Subtotal

243

2,028

Machinery, equipment and vehicles

417

3,470

Other

13

115

Subtotal

430

3,586

¥674

$5,614

Total(1) Circumstances leading to the recognition of impairment loss
• The impairment loss for the company housing has been recognized because the asset has been idled and the market price in real estate has been
declined. That asset is planned to be sold since it is not planned to be used in the future.
• The impairment loss for the pressure-sensitive adhesive related products manufacturing equipment has been recognized because the asset has
decreased in profitability.
(2) Method of calculating recoverable amounts
The recoverable amounts used for the measurement of the impairment losses above are the net realizable value.
• The recoverable amount of land for the company housing is based on the appraisal value after deduction of the estimated cost of the disposal.
The recoverable amounts of other assets are the nominal value.
• The recoverable amounts of the assets above for the pressure-sensitive adhesive related products manufacturing equipment are based on athird-party appraisal value.
The Company has recognized impairment loss on the following classes of assets for the year ended March 31, 2014:
Major use

Location

Machinery, equipment and vehicles

Pressure-sensitive adhesive related
products manufacturing equipment

Higashi Agatsuma town, Gunma

Paper related products manufacturing
equipment

Kumagaya city, Saitama

Total

Category

Millions of yen

¥153

Other

1

Subtotal

155

Machinery, equipment and vehicles

152
¥308

(1) Circumstances leading to the recognition of impairment loss
The impairment loss for the assets above has been recognized because these assets are planned to stop operation or be disposed for the reasonof becoming too old and production shutdown.
(2) Method of calculating recoverable amounts
The recoverable amounts used for the measurement of the impairment losses above are the net realizable value or the nominal value.

LINTEC ANNUAL REPORT 201543

≥ FINANCIAL SECTION

9. Comprehensive Income
Reclassification adjustment and tax effect of other comprehensive income for the years ended March 31, 2015 and 2014 were as follows:
Millions of yen

Thousands of
U.S. dollars

2015

2014

2015

¥ 642

¥ 196

$ 5,346

(0)

(0)

(0)

Prior to deducting tax effect

642

196

5,346

Tax effect

(165)

(55)

(1,377)Net unrealized holding gain on securities

476

140

3,968

5,885

9,221

48,978

―

—

—

5,885

9,221

48,978ASSETSNet unrealized holding gain on securities:
Amount incurred during the fiscal year
Reclassification adjustment

Foreign currency translation adjustments:
Amount incurred during the fiscal year
Reclassification adjustment
Prior to deducting tax effectTax effectForeign currency translation adjustments

―

—

—

5,885

9,221

48,978Adjustment regarding pension obligations of consolidated overseas subsidiaries:
Amount incurred during the fiscal year

―

62

―

Reclassification adjustment

―

138

―

Prior to deducting tax effect

―

201

―

Tax effect

―

(73)

―

Adjustment regarding pension obligations of consolidated overseas subsidiaries

―

127

―

Amount incurred during the fiscal year

755

—

6,285

Reclassification adjustment

202

—

1,686

Prior to deducting tax effect

958

—

7,972

Tax effect

(362)

—

(3,017)

Remeasurements of defined benefit plans:Remeasurements of defined benefit plans
Total other comprehensive income

595

—

4,954

¥6,958¥9,489$57,901

10. Cash and Cash Equivalents
Reconciliation between cash and cash equivalents in the consolidated statement of cash flows and cash and deposits in the consolidated balance sheet
as of March 31, 2015 and 2014 were as follows:

ASSETSCash and deposits
Time deposits with maturity of more than 3 months
Cash and cash equivalents

2015¥62,059

Millions of yen

Thousands of
U.S. dollars

2014¥51,2122015$516,433(6,009)(6,219)(50,005)¥56,050¥44,992$466,428

Assets and liabilities related to finance lease transactions newly recognized for the years ended March 31, 2015 and 2014 were ¥186 million(U.S. $1,550 thousand) and ¥93 million, respectively.
11. Leases(Lessee’s accounting)For finance lease transactions that transfer ownership, leased assets recognized as property, plant and equipment are mainly production facilities for theyears ended March 31, 2015 and 2014.
For finance lease transactions that do not transfer ownership, leased assets recognized as property, plant and equipment are mainly production
facilities and vehicles, and those recognized as intangible assets are mainly software for the years ended March 31, 2015 and 2014.
The minimum lease payments under noncancellable operating leases as of March 31, 2015 and 2014 were as follows:

ASSETS
Due within 1 year
Due after 1 year
Total

44

LINTEC ANNUAL REPORT 2015

2015
¥241

Millions of yen

Thousands of
U.S. dollars

2014
¥144

2015
$2,012

273

263

2,272

¥514

¥407

$4,285

12. Financial Instruments
1. Status of financial instruments(1) Policy regarding financial instruments
The LINTEC Group (the “Group”) limits the scope of its cash and fundmanagement activities to short-term deposits and has a policy of relying
principally on bank borrowings.
The Group makes use of derivatives only to reduce risk of foreign
currency exchange fluctuations and has a policy of not engaging in derivative transactions for speculative purposes.
(2) Details of financial instruments and associated risk andrisk management system
In the course of its business activities, the Group is exposed to credit
risk arising from trade notes and accounts receivable that are
outstanding from its customers. Regarding the risk pursuant to theinternal regulations for managing its credit exposure and tradereceivables, due dates and balances are managed appropriately foreach customer, to mitigate risks of uncollectible accounts.

Investment securities are stocks being exposed to market price risk,
and these are mainly the stocks of companies with which the Group hasbusiness relationships and it periodically confirms the market value.
All of the trade payables—trade notes and accounts payable—are due
within 1 year.
The Company has commitment line contracts with financial institutions
and the borrowings are raised mainly for business activities and capital
investments.
The Group is exposed to liquidity risk from its business-related obligations and borrowings but the Company and its consolidated subsidiaries
prepare and implement financing plans to manage the liquidity risk.
The Group conducts and manages such transactions based on internal
rules and regulations. Director of administration division is in charge ofmanaging derivative transactions and related reports are submitted to top
management for each case.

2. Estimated fair value and other matters related to financial instruments
Carrying value on the consolidated balance sheet as of March 31, 2015 and 2014 along with their fair value and the variance were shown in the following table.
Thousands of
U.S. dollars

Millions of yen

2015

ASSETS(1) Cash and deposits(2) Trade notes and accounts receivable(3) Investment securities
Other securities(4) Trade notes and accounts payable(5) Short-term borrowings(6) Accrued income taxes

Carrying value

Estimated
fair value

Variance¥ 62,059
64,094¥ 62,059
64,094¥——

2,656(40,674)(1,695)(3,413)

2,656(40,674)(1,695)(3,413)————Carrying value

Estimated
fair value

Variance$ 516,433
533,364$ 516,433
533,364$——

22,104(338,473)(14,105)(28,408)

22,104(338,473)(14,105)(28,408)————

Note: Figures shown in parentheses are liability items.
Millions of yen

ASSETS(1) Cash and deposits(2) Trade notes and accounts receivable(3) Investment securities
Other securities(4) Trade notes and accounts payable(5) Short-term borrowings(6) Accrued income taxes

2014
Carrying value

Estimated
fair value

Variance¥ 51,212
63,488¥ 51,212
63,488¥——2,001(41,286)(1,510)(2,594)2,001(41,286)(1,510)(2,594)————

Note: Figures shown in parentheses are liability items.
Note 1: Method of computing the estimated fair value of ﬁnancial instruments and securities(1) Cash and deposits; (2) Trade notes and accounts receivable
Since these items are settled in a short period of time and have estimated fair values
that are virtually the same as the carrying value on the ledger, the carrying value has
been used.
(3) Investment securities
The market value of investment securities is determined by the price of the stock
traded on an exchange market.
(4) Trade notes and accounts payable; (5) Short-term borrowings; (6) Accrued income taxes
Since these items are settled in a short period of time and have estimated fair values
that are virtually the same as the carrying value on the ledger, the carrying value has
been used.

Note 2: Financial instruments for which obtaining an estimated fair value is deemed to be
extremely difﬁcult:Millions of yen

Unlisted stocks

Thousands of
U.S. dollars

2015

2014

2015

Carrying value

Carrying value

Carrying value¥656¥1,592$5,465The unlisted stocks in the preceding table do not have market values, and as estimating
their future cash ﬂows is deemed to be extremely difﬁcult, they are not included in the abovetable “(3) Investment securities.”
Note 3: Planned redemption amounts after the balance sheet date for held-to-maturity
securities and receivables were as follows:
Millions of yen

Cash and deposits
Trade notes and accounts
receivable
Total

Thousands of
U.S. dollars

2015

2014

2015

Within 1 year

Within 1 year

Within 1 year

¥ 62,005¥ 51,180$ 515,984

64,094¥126,100

63,488¥114,668

533,364$1,049,348

LINTEC ANNUAL REPORT 201545

≥ FINANCIAL SECTION

13. Marketable and Investment Securities
The carrying value and acquisition cost of other securities as of March 31, 2015 and 2014 were as follows:
Millions of yen

Thousands of
U.S. dollars

2015

ASSETS
Carrying value

Acquisition cost

Unrealized gain
(loss)

Carrying value

Acquisition cost

Unrealized gain
(loss)

Stocks¥2,163¥ 976¥1,187$18,004$ 8,124$9,879

Bonds

—

—

—

—

—

—

Other

—

—

—

—

—

—

¥2,163¥ 976¥1,187$18,004$ 8,124$9,879Stocks

¥ 492

¥ 522

¥

(29)

$ 4,099$ 4,345$ (245)

Bonds

—

—

—

—

—

—

Other

—

—

—

—

—

—

Subtotal

¥ 492

¥ 522

¥

(29)

$ 4,099$ 4,345$ (245)

Total¥2,656¥1,498¥1,157$22,104$12,469$9,634

Description

Securities whose carrying value
exceeds their acquisition cost
Subtotal
Securities whose acquisition costexceeds their carrying value

Millions of yen

ASSETS

2014
Carrying value

Acquisition cost

Unrealized gain
(loss)

Stocks¥1,473

¥ 910

¥563

Bonds

—

—

—

Other

—

—

—

¥1,473

¥ 910

¥563

Stocks

¥ 528

¥ 576

¥ (47)

Bonds

—

—

—

Other

—

—

—

Subtotal

¥ 528

¥ 576

¥ (47)

Total¥2,001¥1,486¥515

Description

Securities whose carrying value
exceeds their acquisition cost
Subtotal
Securities whose acquisition costexceeds their carrying value

14. Derivatives
No specific disclosure for derivative transactions has been made as of March 31, 2015 and 2014 because of its immateriality.

46

LINTEC ANNUAL REPORT 2015

15. Retirement Benefits
The Company has defined benefit plans of a corporate pension fund plan under the Japanese Defined Benefit Corporate Pension Law and lump-sum
payment plan.
Domestic consolidated subsidiaries have lump-sum payment plans and certain foreign consolidated subsidiaries have defined contribution plans andlump-sum payment plans.
The following summarizes information related to retirement benefits for the years ended March 31, 2015 and 2014.
1. Defined benefit plans(1) Reconciliation statement for the beginning balance and the ending balance of retirement benefit obligations

ASSETS
Retirement benefit obligations at beginning of year2015
¥36,788

Millions of yen

Thousands of
U.S. dollars

2014¥36,6632015$306,134(4,235)—(35,246)

Restated balance

32,552

36,663

270,888

Cumulative effects of changes in accounting policies
Service cost

1,539

1,432

12,810Interest cost

430

506

3,580

Actuarial gains (losses)

203

(947)

1,691

Retirement benefits paid

(1,511)(1,197)(12,577)

Increase (decrease) from foreign currency translation

247

272

2,056

Other

57

56

476

¥33,518¥36,788$278,927

Millions of yen

Thousands of
U.S. dollars

2014¥18,165

2015$172,916
5,923

Retirement benefit obligations at end of year
Note: For some of the consolidated subsidiaries, the simpliﬁed method is used to calculate retirement beneﬁt obligations.

(2) Reconciliation statement for the beginning balance and the ending balance of plan assets

ASSETS
Plan assets at beginning of year2015
¥20,779711

647

Actuarial gains (losses)

1,018

1,720

8,472

Contributions from the employer

5,561

768

46,276Retirement benefits paid

(776)

(734)

(6,465)

Increase (decrease) from foreign currency translation

195

211

1,626

¥27,488¥20,779$228,748

Expected return on plan assets

Plan assets at end of year

Note: “Contributions from the employer” includes contribution of ¥5,000 million (U.S. $41,607 thousand) to retirement beneﬁt trust.

(3) Reconciliation statement for the ending balance of retirement benefit obligations and plan assets and net defined benefit liability or asset recorded in
the consolidated financial statements
Millions of yen

Thousands of
U.S. dollars

Retirement benefit obligations of a funded pension plan2015
¥ 32,8182014¥ 23,081

2015$ 273,103

Plan assets(27,488)(20,779)(228,748)

5,330

2,301

44,354699

13,706

5,823

6,029

16,00850,178Net defined benefit liability

7,853

16,37565,353Net defined benefit asset(1,823)(366)(15,174)¥ 6,029¥ 16,008$ 50,178ASSETS

Retirement benefit obligations of an unfunded pension plan
Net amount of liabilities and assets recorded in the consolidated balance sheet

Net amount of liabilities and assets recorded in the consolidated balance sheet

LINTEC ANNUAL REPORT 201547

≥ FINANCIAL SECTION(4) Components of retirement benefit expenses

ASSETS
Service cost2015
¥1,539Millions of yen

Thousands of
U.S. dollars

2014¥1,432

2015$12,810

Interest cost

430

506

3,580

Expected return on plan assets

(711)

(647)

(5,923)

Amortization of actuarial losses (gains)

487

670

4,053

Amortization of prior service cost

(284)

(284)

(2,367)—32—¥1,460¥1,711$12,155

Other
Retirement benefit expenses for the defined benefit plans
Notes: i. Retirement beneﬁt expenses of consolidated subsidiaries using the simpliﬁed method are included in service cost.
ii. Employee’s contributions to the corporate pension fund are not included in service cost.

(5) Remeasurements of defined benefit plans
Breakdown of items (before tax effect) recorded in other comprehensive income of remeasurements of defined benefit plans are as follows:

ASSETS
Prior service cost¥Thousands of
U.S. dollars

2014
¥—

2015
$ 2,367(1,242)—(10,339)¥ (958)¥—$ (7,972)

Actuarial losses (gains)
Total

2015
284

Millions of yen(6) Remeasurements of defined benefit plans
Breakdown of items (before tax effect) recorded in accumulated other comprehensive income of remeasurements of defined benefit plans are as follows:

ASSETS
Unrecognized prior service cost2015¥(1,112)

Unrecognized actuarial losses (gains)
¥

Total

Millions of yen

Thousands of
U.S. dollars

2014¥(1,397)2015$ (9,260)

1,895

3,113

15,775782¥ 1,715$ 6,515(7) Items related to plan assets
1. Breakdown of major items
The fair value of plan assets, by major category, as a percentage of total plan assets as of March 31, 2015 and 2014 was as follows:
Bonds

2015
52.6%

2014
40.9%

Stocks

20.1%

44.0%

Cash on hand and in banks

24.8%

11.7%

Other

2.5%

3.4%

100.0%

100.0%ASSETSTotal

2. Method for determining the long-term expected rate of return on plan assets
In determining the long-term expected rate of return on plan assets, estimates are considered based on the current and expected allocationof plan assets and the long-term current and expected rate of return from the various assets comprising the plan assets.
(8) Major actuarial assumptions as of March 31, 2015 and 2014 were as follows:
Discount rate

2015
Mainly 1.3%

2014
Mainly 1.3%

Long-term expected rate of return on plan assets

Mainly 3.5%

Mainly 3.5%

Expected rates of pay raises

Mainly 2.8%

Mainly 2.8%

ASSETS

48

LINTEC ANNUAL REPORT 2015

2. Defined contribution plan
Some of the consolidated subsidiaries contributed ¥144 million (U.S. $1,205 thousand) and ¥125 million, for the years ended March 31, 2015 and 2014 to
the defined contribution plans, respectively.
16. Stock Option Plan
Components of stock-based compensation expense for the years ended March 31, 2015 and 2014 were as follows:

ASSETS
Cost of sales
Selling, general and administrative expenses

Millions of yen

Thousands of
U.S. dollars

2015
¥ 3

2014
¥ 6

2015
$ 31

29

29

246

The following table summarizes contents of stock options as of March 31, 2015:
The 2006 plan
Name of Company
Date of approval of the Board of Directors
Position and number of grantees
Class and number of stocks
Date of grantCondition and settlement of rights
Period of providing service for stock options
Exercise period
The 2007 plan
Name of Company
Date of approval of the Board of Directors
Position and number of grantees
Class and number of stocks
Date of grantCondition and settlement of rights
Period of providing service for stock options
Exercise period
The 2008 plan
Name of Company
Date of approval of the Board of Directors
Position and number of grantees
Class and number of stocks
Date of grantCondition and settlement of rights
Period of providing service for stock options
Exercise period
The 2009 plan
Name of Company
Date of approval of the Board of Directors
Position and number of grantees
Class and number of stocks
Date of grantCondition and settlement of rights
Period of providing service for stock options
Exercise period

The Company
August 10, 2006
Directors, 17
Common stock 10,500 shares
August 25, 2006
Persons who have received allotment of share subscription rights must hold the position of
director of the Company at the time of grant.
—
From August 26, 2006 to August 25, 2026

The Company
August 9, 2007
Directors, 17
Common stock 9,300 shares
August 24, 2007
Persons who have received allotment of share subscription rights must hold the position of directorof the Company at the time of grant.
—
From August 25, 2007 to August 24, 2027

The Company
August 8, 2008
Directors, 14
Common stock 9,800 shares
August 25, 2008
Persons who have received allotment of share subscription rights must hold the position of directorof the Company at the time of grant.
—
From August 26, 2008 to August 25, 2028

The Company
August 7, 2009
Directors, 14
Common stock 15,000 shares
August 24, 2009
Persons who have received allotment of share subscription rights must hold the position of directorof the Company at the time of grant.
—
From August 25, 2009 to August 24, 2029

LINTEC ANNUAL REPORT 201549

≥ FINANCIAL SECTION

The 2010 plan
Name of Company
Date of approval of the Board of Directors
Position and number of grantees
Class and number of stocks
Date of grantCondition and settlement of rights
Period of providing service for stock options
Exercise period
The 2011 plan
Name of Company
Date of approval of the Board of Directors
Position and number of grantees
Class and number of stocks
Date of grantCondition and settlement of rights
Period of providing service for stock options
Exercise period
The 2012 plan
Name of Company
Date of approval of the Board of Directors
Position and number of grantees
Class and number of stocks
Date of grantCondition and settlement of rights
Period of providing service for stock options
Exercise period
The 2013 plan
Name of Company
Date of approval of the Board of Directors
Position and number of grantees
Class and number of stocks
Date of grantCondition and settlement of rights
Period of providing service for stock options
Exercise period
The 2014 plan
Name of Company
Date of approval of the Board of Directors
Position and number of grantees
Class and number of stocks
Date of grantCondition and settlement of rights
Period of providing service for stock options
Exercise period

50

LINTEC ANNUAL REPORT 2015

The Company
August 9, 2010
Directors, 16
Common stock 14,100 shares
August 24, 2010
Persons who have received allotment of share subscription rights must hold the position of directorof the Company at the time of grant.
—
From August 25, 2010 to August 24, 2030

The Company
August 9, 2011
Directors, 8Common stock 7,600 shares
August 24, 2011
Persons who have received allotment of share subscription rights must hold the position of directorof the Company at the time of grant.
—
From August 25, 2011 to August 24, 2031

The Company
August 8, 2012
Directors, 8 and Executive Officers, 12
Common stock 15,900 shares
August 23, 2012
Persons who have received allotment of share subscription rights must hold the position of director
or executive officer of the Company at the time of grant.
—
From August 24, 2012 to August 23, 2032

The Company
August 7, 2013
Directors, 10 and Executive Officers, 12
Common stock 22,000 shares
August 22, 2013
Persons who have received allotment of share subscription rights must hold the position of director
or executive officer of the Company at the time of grant.
—
From August 23, 2013 to August 22, 2033

The Company
August 6, 2014
Directors, 10 and Executive Officers, 12
Common stock 18,300 shares
August 21, 2014
Persons who have received allotment of share subscription rights must hold the position of director
or executive officer of the Company at the time of grant.
—
From August 22, 2014 to August 21, 2034

The following tables summarize the scale and movement of stock options for the years ended March 31, 2015 and 2014:(Non-vested stock options)(unit: shares)
The 2006 plan

The 2007 plan

The 2008 plan

The 2009 plan

The 2010 plan

The 2011 plan

The 2012 plan

The 2013 plan

The 2014 plan

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

—
18,300
—

—

—

—

—

—

—

—

—

18,300

—

—

—

—

—

—

—

—

—

The 2006 plan

The 2007 plan

The 2008 plan

The 2009 plan

The 2010 plan

The 2011 plan

The 2012 plan

The 2013 plan

The 2014 plan

6,000

5,500

9,300

14,20012,7007,600

15,90022,000

—

—
1,100
—

—
1,000
—

—
1,400
—

—
2,200
—

—
1,800
—

—
—
—

—
1,400
—

—
—
—

18,300
—
—

4,900

4,500

7,900

12,00010,9007,600

14,50022,00018,300Stock options outstanding
at April 1, 2014
Stock options granted
Forfeitures
Conversion to vested
stock options
Stock options outstandingat March 31, 2015

(Vested stock options)(unit: shares)

Stock options outstanding
at April 1, 2014
Conversion fromnon-vested stock options
Stock options exercised
Forfeitures
Stock options outstandingat March 31, 2015

The following table summarizes the price information of stock options as of March 31, 2015:

Exercise price
Average market price of thestock at the time of exercise
Fair value at the date of grant

The 2006 plan

The 2007 plan

The 2008 plan

The 2009 plan

The 2010 plan

The 2011 plan

The 2012 plan

The 2013 plan

The 2014 plan

¥

¥

¥

¥

¥

¥

¥

¥

¥

1
2,012
2,788

1
2,012
1,947

1
2,012
1,481

1
2,012
1,726

1
2,012
1,474

1
—
1,303

1
2,012
1,203

1
—
1,595

1
—
1,825

The fair value of stock options granted during the year ended March 31, 2015 was valued by using the Black Scholes option pricing model with thefollowing assumptions:
The 2014 plan

Volatility
Expected remaining period
Expected dividend
Risk free interest rate

35.662%10 years¥ 42
0.549%The expected remaining period for stock options is assumed to be the mid-point of the exercise period.

LINTEC ANNUAL REPORT 201551

≥ FINANCIAL SECTION

17. Income Taxes
1. The Company and its consolidated subsidiaries are subject to a number of taxes based on income which, in the aggregate, resulted in a statutory tax
rate of approximately 35.64% and 38.01% for the years ended March 31, 2015 and 2014, respectively. Income taxes of the foreign consolidated subsidiaries
are based generally on-the tax rates applicable in their countries of incorporation. The effective tax rates reflected in the consolidated statement ofincome for the years ended March 31, 2015 and 2014 differ from the statutory tax rate for the following reasons:

ASSETS
Statutory tax rate
Effect of:Permanently non-deductible expenses for income tax purposes such as entertainment expenses
Permanently non-taxable income for income tax purposes such as dividend income
Municipal Tax
The difference of tax rates applied to foreign subsidiaries
Tax deduction in accordance with special tax measures
Decrease of valuation allowance for such as net operating loss carryforward
Consolidating adjustment of dividend income from consolidated subsidiaries
Effect of revised corporate tax rate
Other, net
Effective tax rate2015
35.64%

2014
38.01%

0.39(10.66)0.31(7.36)(2.38)
2.05
10.95
2.83
1.83
33.60%

0.65(12.13)0.42(9.00)(3.42)
1.67
12.66
0.91
4.34
34.11%

Millions of yen

Thousands of
U.S. dollars

2014

2015

747
167
148
5,712
—
622
305
127
345
218
640
9,036
(160)
8,876

$ 6,159
1,518
3,443
20,146
13,454
4,145
2,052
852
3,625
2,490
5,105
62,995(3,382)
59,612

(160)
(159)
(533)
(525)
(136)
(12)
(1,528)¥ 7,347(1,736)(2,707)(2,287)(3,627)(4,955)(520)(15,834)$ 43,777

Millions of yen

Thousands of
U.S. dollars

2. The significant components of deferred tax assets and liabilities as of March 31, 2015 and 2014 were as follows:

2015

ASSETS
Deferred tax assets:
Accrued bonuses
Accrued enterprise taxes
Operating loss carryforwards
Net defined benefit liability
Retirement benefit trust
Research and development cost
Loss on valuation of inventories
Allowance for doubtful accounts
Unrealized gain
Excess depreciation expense
Other
Gross deferred tax assets
Valuation allowance
Deferred tax liabilities:
Revaluation of fixed assets in accordance with special tax measures
Net unrealized holding gain on securities
Depreciation expense of subsidiaries
Dividend income from consolidated subsidiaries
Net defined benefit asset
Other
Net deferred tax assets

¥

740
182
413
2,421
1,616
498
246
102
435
299
613
7,570
(406)
7,163

(208)
(325)
(274)
(435)
(595)
(62)
(1,902)¥ 5,260¥

Note: The net deferred tax assets as of March 31, 2015 and 2014 were included in the following items on the consolidated balance sheets:

Current assets-Deferred tax assets

2015¥1,8792014¥1,922

2015$15,636

Noncurrent assets-Deferred tax assets

29,779ASSETS

52

3,578

5,940

Current liabilities-Other

17

29

149

Noncurrent liabilities-Other

178

486

1,489

LINTEC ANNUAL REPORT 2015

3. Adjustments of deferred tax assets and liabilities due to the change of statutory tax rate
With the announcement of the “Act for the Partial Amendment of the Income Tax Act” and the “Act for the Partial Amendment of the Local Tax Act,”the statutory tax rate used to calculate the Company’s deferred tax assets and liabilities (limited to settlements made after April 1, 2015) was changed
from 35.64% to 33.06% for taxable items between April 1, 2015 and March 31, 2016, and to 32.30% for taxable items after April 1, 2016.
Due to the change, the net amount of deferred tax assets decreased by ¥472 million (U.S. $3,930 thousand), deferred income taxes increased by¥496 million (U.S. $4,128 thousand), net unrealized holding gain on securities increased by ¥33 million (U.S. $279 thousand), and remeasurementsof defined benefit plans decreased by ¥9 million (U.S. $81 thousand) for the year ended March 31, 2015.
18. Business Combinations
There is no business combination for the year ended March 31, 2015.
19. Asset Retirement Obligations
There is no asset retirement obligation as of March 31, 2015 and 2014.
20. Rental Property
No specific disclosure for rental property has been made as of March 31, 2015 and 2014 because of its immateriality.
21. Segment Information
1. Overview of reportable segments(1) Decision procedures for reportable segments
The business segments of our group are subject to periodic review, because each of them provides its own financial information separately from otherbusiness units of our group and the board of directors not only makes a decision on allocation of management resources, but also evaluates theperformance of them.
Our group consists of 6 business segments, each of which develops comprehensive strategies and conducts business activities in overseas anddomestic markets.
Based on product manufacturing methods and similarity of the markets where the products are introduced, we aggregate these business segments
into 3 distinguishable units, such as “Printing and Industrial Materials Products,” “Electronic and Optical Products,” and “Paper and Converted
Products,” to include in this report.
(2) Products and services handled in each segment
Products and services handled in each segment were as follows:
Reportable segments

Main products and services

Printing and Industrial Materials
Products

Adhesive products for seals and labels, Label printing machines, Barcode printers, Labeling machines, Automobile-use
adhesive products, Industrial-use adhesive tapes, Window films, Films for outdoor signs and advertising, Interior
finishing mounting sheets

Electronic and Optical Products

Semiconductor-related tapes, Semiconductor-related equipment, Coated films for multilayer ceramic capacitor
production, LCDs-related adhesive products

Paper and Converted Products

Color papers for envelopes, Colored construction papers, Special function papers, High-grade printing papers,
High-grade papers for paper products, Release papers for general-use, Release films for optical-related products,
Casting papers for synthetic leather, Casting papers for carbon fiber composite materials

2. Method of calculating sales and income (loss), assets, and other items by reportable segment reported
The reported information regarding business segments is processed mostly following the accounting procedures listed in “Significant Accounting
Policies” used as basis for preparing consolidated financial statements.
The profits of the segments reported are based on operating income.
The values for internal sales and transfers conducted between segments are given based on the market price for transactions between consolidated
companies, and on the first cost for transactions within the same company.

LINTEC ANNUAL REPORT 201553≥ FINANCIAL SECTION

3. Information on sales and income (loss), assets, and other items by reportable segment for the years ended March 31, 2015 and 2014 are outlined asfollows:
Millions of yen

2015

ASSETS
Printing andIndustrial Materials
Products

Electronic and
OpticalProducts

Paper andConverted
Products

Total¥86,764¥83,207¥37,283¥207,255

61

73

17,281

17,417(17,417)—¥86,826¥83,281¥54,564¥224,672¥(17,417)¥207,255¥ 2,878¥10,071¥ 3,996¥ 16,946¥¥ 16,881

Depreciation and amortization¥ 2,919¥ 3,155¥ 2,638

¥

8,713

¥

—

¥

8,713

Amortization of goodwill

¥

¥

¥

¥

76

¥

—

¥

76

Adjustments

Consolidation

Net sales
Net sales to external customers
Intra-segment sales and transfers
Total
Segment income¥—¥207,255(64)

Others76——

Thousands of U.S. dollars

2015

ASSETS
Printing andIndustrial Materials
Products

Electronic and
OpticalProducts

Paper andConverted
Products

Total$722,014$692,417$310,252$1,724,684

515

615

143,811

144,942(144,942)—$722,529$693,033$454,063$1,869,626$(144,942)$1,724,684$ 23,952$ 83,810$ 33,259$ 141,022

$

(539)

$ 140,483

Depreciation and amortization$ 24,296$ 26,256$ 21,956$

72,509$—$72,509Amortization of goodwill

$

$

$

$

640

$

—

$

640

Adjustments

Consolidation$$1,724,684

Net sales
Net sales to external customers
Intra-segment sales and transfers
Total
Segment income—

Others640——

Notes: i. Segment income adjustments show elimination of the amount of intra-segment transactions.
ii. Segment income is adjusted to be reported as operating income in the consolidated statement of income.
iii. The amounts to be written off as depreciation and amortization of goodwill are allocated among the business segment on the basis of reasonable criteria.
iv. Since companies, ofﬁces, and factories serve as the base for administrative classiﬁcation of segment’s assets, no allocation to the business segment is done.
Millions of yen

2014

ASSETS
Printing andIndustrial Materials
Products

Electronic and
OpticalProducts

Paper andConverted
Products

Total¥86,271¥79,139¥37,831¥203,242

39

3

14,94914,992(14,992)—¥86,310¥79,143¥52,781¥218,235¥(14,992)¥203,242¥ 2,290¥ 6,846¥ 4,645¥ 13,782¥¥ 13,766

Depreciation and amortization¥ 3,168¥ 4,069¥ 2,816¥ 10,055¥—¥ 10,055

Amortization of goodwill

¥

¥

¥

¥

¥

—

¥

Adjustments

Consolidation

Net sales
Net sales to external customers
Intra-segment sales and transfers
Total
Segment income

¥

—

(16)

¥203,242

Others
70

—

—

70

Notes: i. Segment income adjustments show elimination of the amount of intra-segment transactions.
ii. Segment income is adjusted to be reported as operating income in the consolidated statement of income.
iii. The amounts to be written off as depreciation and amortization of goodwill are allocated among the business segment on the basis of reasonable criteria.
iv. Since companies, ofﬁces, and factories serve as the base for administrative classiﬁcation of segment’s assets, no allocation to the business segment is done.

54

LINTEC ANNUAL REPORT 201570

Related Information
1. Information by product and service
Since the Company and its consolidated subsidiaries disclose the same information in its segment information section, it has been omitted.
2. Information by geographical segment
Millions of yen

Thousands of U.S. dollars

2015

ASSETS
Sales

Japan

Asia

Others

Total

Japan

Asia

OthersTotal¥126,914¥69,593¥10,747¥207,255$1,056,127$579,122$89,434$1,724,684

45,945

13,901

1,655

61,503382,340

115,685

13,780511,806

Property, plant and equipment

Note: Sales information is based on location of customers and it is classiﬁed by country or region.
Millions of yen

ASSETS
Sales

2014
Japan

Asia

OthersTotal¥130,149¥63,023¥10,069¥203,242

46,592

12,8552,009

61,456

Property, plant and equipment

Note: Sales information is based on location of customers and it is classiﬁed by country or region.

3. Information by principal customers
Millions of yen

ASSETS
Name of the customer

Related reportable segment

Sumitomo Chemical Company, Limited

Electronic and Optical Products

Thousands of
U.S. dollars

2015

2014
Sales

2015

¥21,383¥25,103$177,944

Information on impairment losses on noncurrent assets by reportable segment
Millions of yen

2015

ASSETS

Impairment loss

Printing andIndustrial Materials
Products

Electronic and
OpticalProducts

Paper andConverted
Products

Total

Consolidation

¥—

¥—

¥—

¥—

¥674

Thousands of U.S. dollars

2015

ASSETS

Impairment loss

Printing andIndustrial Materials
Products

Electronic and
OpticalProducts

Paper andConverted
Products

Total

Consolidation

$—

$—

$—

$—

$5,614

Note: Since companies, ofﬁces, and factories serve as the base for administrative classiﬁcation of segment’s assets, no allocation to the segment of the enterprise is done.

Millions of yen

2014

ASSETS

Impairment loss

Printing andIndustrial Materials
Products

Electronic and
OpticalProducts

Paper andConverted
Products

Total

Consolidation

¥—

¥—

¥—

¥—

¥308

Note: Since companies, ofﬁces, and factories serve as the base for administrative classiﬁcation of segment’s assets, no allocation to the segment of the enterprise is done.

LINTEC ANNUAL REPORT 201555

≥ FINANCIAL SECTION

Information related to the amount of amortization of goodwill and the unamortized amount of goodwill by reportable segment
Millions of yen

2015

ASSETS

Unamortized amount of goodwill

Printing andIndustrial Materials
Products

Electronic and
OpticalProducts

Paper andConverted
Products

Total

Consolidation

¥—

¥—

¥—

¥—

¥93

Thousands of U.S. dollars

2015

ASSETS

Unamortized amount of goodwill

Printing andIndustrial Materials
Products

Electronic and
OpticalProducts

Paper andConverted
Products

Total

Consolidation

$—

$—

$—

$—

$782

Notes: i. Since the Company and its consolidated subsidiaries disclose the same information of the amount of amortization of goodwill in the reportable segment information section, it has been omitted.
ii. Since companies, ofﬁces, and factories serve as the base for administrative classiﬁcation of segment’s assets, no allocation to the segment of the enterprise is done.

Millions of yen

2014

ASSETS

Unamortized amount of goodwill

Printing andIndustrial Materials
Products

Electronic and
OpticalProducts

Paper andConverted
Products

Total

Consolidation

¥—

¥—

¥—

¥—

¥158

Notes: i. Since the Company and its consolidated subsidiaries disclose the same information of the amount of amortization of goodwill in the reportable segment information section, it has been omitted.
ii. Since companies, ofﬁces, and factories serve as the base for administrative classiﬁcation of segment’s assets, no allocation to the segment of the enterprise is done.

Information on profit arising from negative goodwill by reportable segment
There is no profit arising from negative goodwill for the years ended March 31, 2015 and 2014.
22. Related Party Transactions
The Company and its consolidated subsidiaries have transactions with NP Trading Co., Ltd., a subsidiary of Nippon Paper Industries Co., Ltd.
The transactions between the companies for the years ended March 31, 2015 and 2014 were as follows:
Millions of yen

For the year
Sales of fine & specialty paper products and converted products
Purchase of stencil, chemicals and equipment

Thousands of
U.S. dollars

2015

2014

2015

¥11,431¥11,200$95,127

4,969

6,577

41,353

Millions of yen

Thousands of
U.S. dollars

2015

2014

2015

Trade notes and accounts receivable¥4,034¥ 3,913$33,577

Trade notes and accounts payable

1,804

2,305

15,012

47

9

397

Yen

U.S. dollars

At year-end

Other liabilities

These related party transactions are carried out on an arm’s-length basis similar to third party transactions.
23. Amounts Per Share
The amounts per share of net assets and net income as of and for the years ended March 31, 2015 and 2014 were as follows:
2015

2014

2015

¥2,363.81¥2,100.87$19.67

Net income (basic)

161.63114.22

1.35

Net income (diluted)

161.41114.09

1.34

ASSETSNet assets

56

LINTEC ANNUAL REPORT 2015

The bases for calculation were as follows:(1) Basic and diluted net income per share
Millions of yen

Thousands of
U.S. dollars

2015

2014

2015

¥11,659—¥11,659
72,134¥ 8,501—¥ 8,501
74,427$97,023—$97,023
72,134¥¥$ASSETSNet income (basic) per share:
Net income
Amount not attributable to common shareholders
Net income attributable to common shareholders
Weighted-average number of shares issued during the year (thousand)Net income (diluted) per share:
Adjustment of net income related to dilutive securities
Adjustment of dilutive securities (thousand)[Share subscription rights (thousand)]

—
98
[98]

—
84
[84]

—
98
[98]

(2) Net assets per share
Thousands of
U.S. dollars

Millions of yen

2015

2014

2015

¥171,674
1,159
[166]
[992]
¥170,514
72,135¥152,610
1,079
[148]
[930]
¥151,530
72,127$1,428,594
9,650[1,387][8,262]$1,418,944
72,135ASSETS
Total net assets
Amount deducted from total net assets[Share subscription rights][Minority interests]
Net assets attributable to shares of common stock
Number of shares of common stock outstanding used in calculation of net assets per share (thousand)Note: As stated in Note 1 (r), “Changes in accounting principles,” Retirement Beneﬁts Accounting Standards, etc. have been adopted and applied in accordance with the transitional treatment
set forth in Article 37 of the Retirement Beneﬁts Accounting Standard.
As a result, net assets per share for the year ended March 31, 2015 increased by ¥37.79 (U.S. $0.31). In addition, the impact on basic and diluted net income per share was insigniﬁcant.

24. Short-Term Borrowings, Long-Term Debts and Other Interest-Bearing Debts
Short-term bank loans are represented generally by 30-day or 90-day notes issued by the Company and its consolidated subsidiaries to banks at annualinterest rates from 0.33% to 0.68% at March 31, 2015 and from 0.35% to 0.72% at March 31, 2014.
Short-term borrowings as of March 31, 2015 and 2014 consisted of the following:Thousands of
U.S. dollars

Millions of yen

ASSETS

2015

2014

2015

Short-term bank loans
Current portion of long-term debt

¥1,695—¥1,695¥1,510—¥1,510$14,105—$14,105

Millions of yen

Thousands of
U.S. dollars

Other interest-bearing debts as of March 31, 2015 and 2014 consisted of the following:

ASSETS
Short-term lease obligation
Long-term lease obligation

2015

2014

2015

¥199
471

¥183
503

$1,657
3,922

Planned repayment amounts after the balance sheet date (March 31, 2015) for long-term debt and lease obligation are as follows:
Millions of yen

Thousands of U.S. dollars

2015

Lease obligation

Over 1 year
within 2 years

Over 2 years
within 3 years

Over 3 years
within 4 years

Over 4 years
within 5 years

Over 1 year
within 2 years

Over 2 years
within 3 years

Over 3 years
within 4 years

Over 4 years
within 5 years

¥175

¥145

¥100

¥47

$1,464$1,213$832$396

25. Subsequent Event
The following distribution of retained earnings was approved at a meeting of the board of directors held on May 8, 2015.
Millions of yen

Thousands of
U.S. dollars¥1,875$15,6072015

ASSETSCash dividends (¥26 per share)

LINTEC ANNUAL REPORT 201557

≥ FINANCIAL SECTIONManagement’s Report on Internal Control
over Financial Reporting

Basic Framework of Internal Control over Financial Reporting
Hiroyuki Nishio, Representative Director, President, CEO and COO of LINTEC Corporation, and Hitoshi Asai, Director, Vice President Executive Officer &Chief Financial Officer of LINTEC Corporation, are responsible for designing and operating adequate internal control over financial reporting for consolidated financial statements of LINTEC Corporation and consolidated subsidiaries (the “Company”) in accordance with the basic framework set forth in“Standards and Practice Standards for Management Assessment and Audit concerning Internal Control Over Financial Reporting” issued by BusinessAccounting Council.
Internal control achieves its objectives to a reasonable extent given that all individual components of internal control are integrated and function
as a whole. Internal control over financial reporting for consolidated financial statements may not completely prevent or detect misstatements in financial reporting.
Scope of Assessment, Assessment Date and Assessment Procedure
We assessed the effectiveness of the Company’s internal control over financial reporting for the accompanying consolidated financial statements asof March 31, 2015 in accordance with the standards for assessment of internal control over financial reporting generally accepted in Japan. For thisassessment, we first evaluated the company-level controls which would have a material impact on the reliability of overall financial reporting on aconsolidated basis. We then selected the process-level controls to be assessed based on the results of the company-level control assessment.
For the process-level control assessment, we evaluated the effectiveness of internal control by analyzing processes in scope, identifying key controls thatwould have a material impact on the reliability of the financial reporting, and assessing the design and operation of such key controls.
We determined the scope of assessment by selecting consolidated subsidiaries based on their materiality of impact on the reliability of financial
reporting. We determined their materiality of impact by considering both quantitative and qualitative aspects. The scope of our process-level control
assessment was determined based on the results of our assessment of company-level controls, which included its 15 consolidated subsidiaries.
We excluded 18 consolidated subsidiaries from the scope of the company-level control assessment since their quantitative and qualitative impacts weredeemed insignificant.
For the purpose of determining the scope of process-level controls assessment, we selected 1 consolidated subsidiary as “Significant Business
Locations,” which contributed approximately two thirds of the Company’s net sales on a consolidated basis for the fiscal year ended March 31, 2014. For
the Significant Business Locations, we primarily included business processes related to sales, accounts receivable, and inventory in the scopeof assessment as the aforementioned accounts were closely associated with the Company’s business objectives. In addition, we included certain
business processes in the scope of assessment not only from “Significant Business Locations” but also from all subsidiaries and affiliates, which wererelated to significant accounts involving estimates and management’s judgment or include high-risk operations and/or transactions, as “businessprocesses with a material impact on financial reporting.”
Assessment Result
Based on the results of our assessment with the above mentioned scope, date and procedures, we concluded that Company’s internal control over financial reporting for the accompanying consolidated financial statements as of March 31, 2015 was effective.

58

LINTEC ANNUAL REPORT 2015

Report of Independent Auditors

LINTEC ANNUAL REPORT 201559≥ FINANCIAL SECTION

Report of Independent Auditors

60

LINTEC ANNUAL REPORT 2015

Investor Information
As of March 31, 2015

Head Ofﬁce
23-23, Honcho, Itabashi-ku, Tokyo 173-0001, Japan
Phone: +81-3-5248-7711 Fax: +81-3-5248-7760
URL: http://www.lintec-global.com/
Established
October 15, 1934
Fiscal Year-End
March 31
Net Assets¥171,674 million
Common Stock
Authorized: 300,000,000 shares
Issued: 76,564,240 shares
Stock Listing
Tokyo Stock Exchange, 1st Section
Securities Code: 7966
Shareholder Register Agent for Common Stock
Mitsubishi UFJ Trust and Banking Corporation
1-4-5, Marunouchi, Chiyoda-ku,
Tokyo 100-8212, Japan
Number of Employees
4,413 (Consolidated)
2,524 (Parent company only)
Major Shareholders
Nippon Paper Industries Co., Ltd. .................................................................... 30.1 3%
MSIP CLIENT SECURITIES .................................................................................... 4.51 %National Mutual Insurance Federation of Agricultural Cooperatives .... 3.1 8%
The Master Trust Bank of Japan, Ltd. (Trust Account) ............................. 2.50%
Tamie Shoji ................................................................................................................... 2.49%

Major Subsidiaries
Domestic
LINTEC COMMERCE, INC.*
LINTEC SIGN SYSTEM, INC.*
FUJI-LIGHT, INC.*
LINTEC SERVICES, INC.
LINTEC CUSTOMER SERVICE, INC.
PRINTEC, INC.
TOKYO LINTEC KAKO, INC.
OSAKA LINTEC KAKO, INC.
Overseas
LINTEC USA HOLDING, INC.*
MADICO, INC.*
LINTEC OF AMERICA, INC.*
LINTEC EUROPE B.V.*
LINTEC ADVANCED TECHNOLOGIES (EUROPE) GMBH*
LINTEC (SUZHOU) TECH CORPORATION*
LINTEC (TIANJIN) INDUSTRY CO., LTD.*
LINTEC PRINTING & TECHNOLOGY (TIANJIN) CORPORATION*
LINTEC ADVANCED TECHNOLOGIES (SHANGHAI), INC.*
LINTEC SPECIALITY FILMS (TAIWAN), INC.*
LINTEC HI-TECH (TAIWAN), INC.*
LINTEC ADVANCED TECHNOLOGIES (TAIWAN), INC.*
LINTEC KOREA, INC.*
LINTEC SPECIALITY FILMS (KOREA), INC.*
LINTEC ADVANCED TECHNOLOGIES (KOREA), INC.*
PT. LINTEC INDONESIA*
PT. LINTEC JAKARTA*LINTEC SINGAPORE PRIVATE LIMITED*
LINTEC ADVANCED TECHNOLOGIES (PHILIPPINES), INC.*
LINTEC PHILIPPINES (PEZA), INC.*
LINTEC (THAILAND) CO., LTD.*
LINTEC BKK PTE LIMITED*
LINTEC VIETNAM CO., LTD.*
LINTEC HANOI VIETNAM CO., LTD.*
LINTEC INDIA PRIVATE LIMITED*
LINTEC INDUSTRIES (MALAYSIA) SDN. BHD.*
LINTEC INDUSTRIES (SARAWAK) SDN. BHD.*
LINTEC KUALA LUMPUR SDN. BHD.*
LINTEC ADVANCED TECHNOLOGIES (MALAYSIA) SDN. BHD.** Consolidated Subsidiary

Ownership and Distribution of Shares

Share Price / Trading Volume
Share Price¥

3,500
Financial Institutions ............................. 15.25%
Securities Companies.............................. 0.75%
Other Companies ................................... 33.79%
Overseas Companies ............................. 28.12%
Individuals and Other ............................. 16.31%
Treasury Stock ......................................... 5.78%

3,000
2,500
2,000
1,500
1,000
Trading Volume
Million shares

15
12
9
6
3
0

Apr. 2012

Apr. 2013

Apr. 2014

LINTEC ANNUAL REPORT 201561