LINTECANNUALREPORT2015
For the year ended
March 31, 2015

ACCELERATINGGROWTH
LINTEC

Contents

Editorial Policy

1 COVER STORYThis report is meant to help shareholders and other investors– 1 Company Motto & Mission Statement

understand the LINTEC Group and its quest to achieve sustainable– 2 LINTEC’s History

growth and contribute to the further development of society as a whole.

– 4 Business Overview

Based on the International Integrated Reporting Framework released– 6 LINTEC’s Value Creationby the International Integrated Reporting Council in December 2013, in

8 Performance Highlights
10 MANAGEMENT STRATEGY– 10 From the President
16 BUSINESS ACTIVITIES SUPPORTING
VALUE CREATION

addition to performance and ﬁnancial information, this report also introduces the R&D capabilities, human resources, and other “intangible
assets” accumulated by the LINTEC Group that are of the variety notlisted on the ﬁnancial statements.
Information that could not be contained within this report is available on
the following websites.

– 16 R&D Activities and Intellectual Property– 18 Human Resources≥ IR Website– 19 Partnerships

http://www.lintec-global.com/ir/– 20 Social Contribution Activities– 21 Environmental Preservation
22 OUR GROWTH FOUNDATION– 22 Corporate Governance– 27 CSR Basic Approaches and Promotion System– 28 Corporate Ofﬁcers
30 FINANCIAL SECTION– 31 Management’s Discussion and Analysis– 33 Operating Risks≥ CSR Website– 34 Financial Summary

http://www.lintec-global.com/csr/– 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
61 Investor Information
REPORTING PERIODThis report covers the period between April 1, 2014 and March 31, 2015.
However, some of the information includes content from April 2015 onward.
FORWARD-LOOKING STATEMENTS
This report includes forward-looking statements, such as forecasts of business results,
based on information currently held and assumptions that have been judged as reasonable
by the Company. The Company cannot guarantee the accuracy of these statements ordeﬁnitively assure the realization of future numerical targets and policies. Actual businessresults, etc., may vary due to various factors and circumstances.

LINTEC ANNUAL REPORT 2015≥ COVER STORY

Company Motto & Mission Statement
As a leading company in the adhesive products and ﬁne and specialty papers ﬁelds, LINTEC
has developed a diverse range of products and achieved sustainable growth. In deference to
our company motto, “Sincerity and Creativity,” we strive to maintain integrity toward eachand every one of our stakeholders and will continue to engage in new challenges with a passion for innovation. These principles represent our foundation as a manufacturing company
and we continue to contribute to the development of society by developing products thatmeet the needs of everyone.
“Linking your dreams” – LINTEC utilizes its unique technologies to link the countless dreamsof people across the world and give form to them. We look forward to your ongoing support.
≥ Company Motto

Sincerity and Creativity≥ Mission Statement
The company name LINTEC derives from “linkage” and “technology,” two key components of our business philosophy, whichemphasizes the importance of close relations, inside and outside the company, and leading-edge R&D programs. By bringing
these together to develop innovative solutions, we have established a reputation in Japan and overseas as a dynamic and reliable company that contributes to the prosperity of our stakeholders, to the growth of our industry, and to a brighter future forsociety as a whole. And underpinning all of our business activities is an unwavering emphasis on “Sincerity and Creativity,” thetwin values enshrined in our company motto.

For tomorrow we build today
Company
Motto

Sincerity andCreativity

LINTEC WAY
In the year ended March 31, 2015, the LINTEC Group established “LINTEC WAY” as a

MissionStatement

guidepost to encourage all of its employees in continuing to maintain a uniﬁed outlook

Five Rules ofSincerity

and aspiring toward sustainable growth. “LINTEC WAY” comprises 10 principles, which

Alwaysbe sincere.
Faithfulness opens
people’s minds.
Please people.
Be a giver.
Care about colleagues
and family.

represent our cherished sense of values, to support the company motto, “Sincerity
and Creativity,” and highlight the ideals that employees should strive to embody. We
continue to promote the proliferation and understanding of LINTEC WAY by holding
CSR study meetings at Group companies both inside and outside Japan.

Five Rules ofCreativity
Be committed
until you succeed.
Be proud of
being unique.
Be resilient and takeadvantage of changes.
Think globally.
Look for connections topotential everywhere

COMPLIANCE GUIDELINES

LINTEC ANNUAL REPORT 20151≥ COVER STORYLINTEC’s History
Over the more than 80 years since its founding, LINTEC has continued to grow its businessby adhering to a customer-ﬁrst mindset and developing original products, all while acting inaccordance with its company motto, “Sincerity and Creativity.”
1920s to 60s

1970s to 80s

Stage of Creation – Stage of Business Base Building

Stage of Entry into Growth Businesses

FUJI SHOKAI was established in 1927 as Japan’s ﬁrst manufacturer ofIn the early 1970s, we started manufacturing and selling labelinggummed tape for packaging. Later, in 1934, it was reorganized to form

machines and label printing machines. It was also at this time that

FUJI SHIKO CORPORATION, which it could be said represented the start

we expanded operations into China. In the late 1970s, we developedof the Company. At that time, demand was rising rapidly for cardboard

a colored adhesive ﬁlm for use in body stripe stickers on motorcycles,

boxes to be used as alternatives for wooden boxes for transporting foodsin response to the rapid growth in domestic motorcycle sales. In

and other goods. This trend fueled substantial growth in demand for

addition, there was a rapid increase in the need for ﬁlms used forgummed tape for sealing these boxes. Entering into the 1950s, we began

outdoor sign, and we also began to expand our business in theto actively push forward with the establishment of sales bases geared

motorcycle, automobile and interior and exterior decorative ﬁelds.

toward strengthening our business development in major Japanese cities.

In 1984, the company name was changed to FSK CORPORATION. Then,

In 1960, we began selling adhesive papers for seals and labels,

in 1986 we developed an ultraviolet (UV) curable dicing tape that allows

and later advanced into the ﬁeld of adhesive ﬁlms. This is when wefor adhesive strength to be controlled by irradiation of UV rays, making

constructed the foundations for our mainstay businesses of today.

our entry into the semiconductor ﬁeld. The development of this productIn addition, in 1962 we developed an automatic packaging machinecaused a revolution in the semiconductor industry and also represents(cardboard box automatic sealing machine) manufacturing department,

the original source of our competitiveness in this ﬁeld. It was during thisand began to provide of a combination of adhesive materials andperiod that the Company steadily expanded its presence in the industry,

related equipment, establishing a business style of comprehensively

being listed on the Second Section of the Tokyo Stock Exchange in 1986

meeting customer needs that we continue to utilize today.

and then being approved for listing on the First Section in 1989.

Apr. 1927 FUJI SHOKAI established in Sugamo, Tokyo
Started production and sales of gummed tape for packaging

Mar. 1972 Started production and sales of labeling machines
Aug. 1973 Developed “A-100 type” label printing machine, incorporating newtechnologies, and started production and sales of label printing machines

Gummed tape

Aug. 1931 FUJI SHOKAI reorganized to establish FUJI GOMEI KAISHA, andhead ofﬁce and head factory relocated to Itabashi, Tokyo
Oct. 1934 FUJI GOMEI KAISHA reorganized to establish FUJI SHIKO CORPORATION“A-100 type” label printing machine

1974 Started sales of label printing machines and adhesive products in China
Oct. 1984 Company name was changed to FSK CORPORATION
Jul. 1986 Listed on Second Section of Tokyo Stock Exchange
1986 Developed UV-curable dicing tape and made full-scale entry into
semiconductor-related businessTime of establishment

Sep. 1950 Osaka Ofﬁce (currently Osaka Branch) opened, nationwide expansionof sales and establishment of large-scale bases commenced
Apr. 1953 Established laboratory in head ofﬁce in Itabashi, and started full-scale
development of technologies and products
Mar. 1960 Started production and sales of adhesive papers for seals andlabels; later, also started production and sales of adhesive ﬁlms
Mar. 1962 Established automatic packaging machine manufacturing department,
and started sales of system combined with gummed tape for packaging
Oct. 1968 Transferred laboratory to Warabi Plant in Saitama Prefecture, and started
development of new products taking advantage of our core technologies

2

LINTEC ANNUAL REPORT 2015

UV-curable dicing tape

Sep. 1987 FSK OF AMERICA, INC. (currently LINTEC USA HOLDING, INC.),established and MADICO, INC., a U.S. window ﬁlms manufacturer,
became a subsidiary
Mar. 1989 Approved for listing on First Section of Tokyo Stock Exchange

1990s

2000s to today

Second Stage of Creation

Stage of Growth Acceleration

In April 1990, FSK merged with SHIKOKU PAPER CO., LTD., a supplier

The globalization of LINTEC’s business accelerated at the turn ofof release papers and other items, and SOHKEN KAKO CO., LTD.,the century. Based on our policy of manufacturing products closer

another manufacturer of adhesive materials, giving birth to LINTEC

to customers to ensure stable supplies through local production, we

Corporation and representing a new start. Through this merger,

established new manufacturing bases in China, Taiwan, South Korea,

we have expanded our business into the specialty papers, release

Malaysia, and Thailand. At the same time, we took steps to reinforce

papers and ﬁlms, which has enabled us to establish an integrated

manufacturing and sales systems, such as expanding our network ofadhesive product manufacturing system spanning from upstream

sales bases that possess warehouses and slitting facilities. Recently,

areas (base paper for release papers) to downstream areas (adhe-

we have established a regional headquarter in Singapore to

sive products). The name LINTEC was chosen as a combination ofstrengthen competitiveness in the rapidly growing Southeast Asian“linkage” and “technology” to symbolize our commitment towardand Indian markets.

linking people with technology to create new value. This spirit continues to live on in the Company today.

Moreover, we have established an R&D base of LINTEC OF AMERICA,
INC., at Dallas in the United States and are pushing forward with the

In 1991, we entered into the ﬁeld of optically functional ﬁlms forpractical implementation of new-generation materials such as carbon

liquid crystal displays (LCDs). Later, we established local manufac-

nanotubes. In 2015, we also established the Advanced Technology

turing bases and sales bases in Indonesia and Singapore, which still

Building adjacent to our existing research center, and we are working

play the main role in our business in Southeast Asia and India. In

toward increasing the speed of product development and developing

this manner, we advanced the globalization of our business.

innovative new products.

Apr. 1990 Merged with SHIKOKU PAPER CO., LTD., and SOHKEN KAKO CO.,LTD., and company name changed to LINTEC Corporation
1991 Made full-scale entry into LCD-related business

Apr. 2000 LINTEC INDUSTRIES (MALAYSIA) SDN. BHD. established as
manufacturing base for electronics-related products
Jun. 2002 LINTEC (SUZHOU) TECH CORPORATION in China established as
manufacturing base for adhesive products and converted products

Optically functional ﬁlms for LCDs

Oct. 1993 LINTEC (TIANJIN) INDUSTRY CO., LTD., established as manufacturingbase of label printing machines and sales base of adhesive products
Feb. 1994 Singapore Ofﬁce opened
May 1994 PT. LINTEC INDONESIA established as manufacturing base ofadhesive products

LINTEC (SUZHOU)TECH CORPORATION

Aug. 2002 LINTEC SPECIALITY FILMS (KOREA), INC., established as
manufacturing base for optical products
Aug. 2003 LINTEC SPECIALITY FILMS (TAIWAN), INC., established as
manufacturing base for optical products
Sep. 2004 LINTEC KOREA, INC., established as manufacturing base for electronicsrelated products

PT. LINTEC INDONESIA

Apr. 1995 Singapore sales ofﬁce locally incorporated and LINTEC SINGAPOREPRIVATE LIMITED establishedApr. 1995 LINTEC EUROPE B.V. in the Netherlands establishedDec. 1995 Research Center in Saitama Prefecture built
Mar. 1999 LINTEC INDUSTRIES (SARAWAK) SDN. BHD. in Malaysia establishedas manufacturing base for electronics-related products

LINTEC KOREA, INC.

Jun. 2011 LINTEC (THAILAND) CO., LTD., established as manufacturing basefor adhesive products
Jan. 2015 LINTEC ASIA PACIFIC REGIONAL HEADQUARTERS PRIVATELIMITED in Singapore establishedMay 2015 Advanced Technology Building constructed in Saitama Prefecture

LINTEC ANNUAL REPORT 20153≥ COVER STORY

Business Overview
LINTEC responds to social needs by developing its business in a wide range of ﬁelds.

Share of Net Sales

Share of Operating Income

18.0%

17.0%

23.6%

FY2015/3

FY2015/3

Net Sales

Operating Income

41.9%¥207.3 billion¥16.9 billion

40.1%

59.4%

Printing and Industrial Materials ProductsElectronic and Optical Products

Paper and Converted Products

Note: Operating income composition data is based on ﬁgures before the elimination of intra-segment transactions.

≥ Printing and Industrial Materials ProductsThis segment consists of Printing & variable information products operations and Industrial &material operations.
In our Printing & variable information products operations, we conduct the manufactureand sale of adhesive papers and ﬁlms for seals and labels, which are the LINTEC Group’s
mainstay products. Our adhesive ﬁlms perform particularly well, boasting a share of approximately 60% of the domestic market. We are also targeting the expansion of our share in suchoverseas markets as China and Southeast Asia through the enhancement of production andsales bases in these markets.
In our Industrial & material operations, we deal in a wide variety of products, including
automobile-use adhesive products, tapes for bonding components in mobile devices andothers, label system-related equipment, adhesive sheets for outdoor signs and interiorﬁnishing, and even window ﬁlms for saving electricity and glass shatter-prooﬁng purposes
for which demand has been growing.
Printing & Variable Information
Products Operations
Main Products• Adhesive papers and ﬁlms for seals
and labels• Label printing machines

4

LINTEC ANNUAL REPORT 2015

Industrial & Material Operations
Main Products• Automobile-use adhesive products• Industrial-use adhesive tapes• Barcode printers• Labeling machines• Window ﬁlms
• Films for outdoor signs and advertising• Interior ﬁnishing mounting sheetsP. 31
Management’s Discussion and Analysis
Please see pages 31-32.

≥ Electronic and Optical ProductsThis segment consists of Advanced materials operations and Optical products operations.
In our Advanced materials operations, we develop and provide such products as specialized
adhesive tapes and related equipment essential in semiconductor manufacturing and mounting
processes as well as coated ﬁlms for multilayer ceramic capacitor (MLCC) production andtouch screen-related products.
In our Optical products operations, we conduct adhesive processing for optical functionalﬁlms, including polarizing ﬁlms and retardation ﬁlms used to make LCDs; surface improvement processing for polarizing ﬁlms, such as antiglare hard coat processing, which protects
ﬁlms from scratches and reduces reﬂectivity; and the manufacturing of protective ﬁlms forpolarizing ﬁlms.
Advanced Materials Operations

Optical Products Operations

Main Products• Semiconductor-related adhesive tapes
and equipment• Coated ﬁlms for MLCC production• Touch screen-related products

Main Products• Polarizing ﬁlms and retardation ﬁlms
(adhesive processing)• Polarizing ﬁlms
(surface improvement processing)• Protective ﬁlms for polarizing ﬁlms

≥ Paper and Converted ProductsThis segment consists of Fine & specialty paper products operations and Converted
products operations.
In our Fine & specialty paper products operations, we conduct the manufacture and sale ofcolor papers for envelopes and colored construction papers, products for which LINTEC
holds the leading share in domestic markets; lint-free papers that are used in places such as
clean rooms that cause hardly any dust even when torn; oil resistant papers for food packaging;high-grade printing papers with special textures; and high-grade papers for paper products
used for business cards and postcards.
In our Converted products operations, we provide release papers and ﬁlms that protect theadhesive surfaces of a variety of adhesive products. Additionally, we produce casting papers
that are used as patterning papers for placing designs on synthetic leather. We also manufacture casting papers for carbon ﬁber composite materials for which demand is expected torise in conjunction with increased usage in aircraft.

Fine & Specialty Paper Products Operations

Converted Products Operations

Main Products• Color papers for envelopes• Colored construction papers• Special function papers• High-grade printing papers• High-grade papers for paper products

Main Products• Release papers for general-use• Release ﬁlms for optical-related products• Casting papers for synthetic leather• Casting papers for carbon ﬁber
composite materials

LINTEC ANNUAL REPORT 20155≥ COVER STORYLINTEC’s Value Creation
Since its founding, the LINTEC Group has amassed numerous strengths. These strengths
serve as indispensable assets to our business activities, and have been the driving force
in creating various high-value-added products in response to a wide range of social needs.
Going forward, the LINTEC Group will pursue sustainable growth by contributing to thedevelopment of society through the creation of new value.
SOLID
FINANCIAL BASE
Going forward, LINTEC will take fulladvantage of its solid ﬁnancial base,characterized by an equity ratio of
more than 70%, to conduct aggressive
capital investments and
M&A activities.

COMPREHENSIVEMANUFACTURING
AND SALES SYSTEMSIN JAPAN AND OVERSEAS

P. 10

P. 30

We are committed to reducing theenvironmental impact of manufacturing activities and developing environmentally friendly products.

LINTEC is further enhancing its
manufacturing and sales systems inJapan and overseas.

P. 10

ECO-FRIENDLY
BUSINESS ACTIVITIES

P. 21

P. 61

LINTEC’s Amassed
Strengths

LONGACCUMULATEDTECHNOLOGICAL PROWESSSTRONG BONDS
OF TRUSTWITH STAKEHOLDERS

By fusing at a high level
the core technologies that we haveaccumulated to date, we are creating
original new products.

LINTEC strives to prosper together
with its customers and suppliers
and to coexist in harmony withlocal societies.

P. 16

DIVERSEHUMAN RESOURCES ANDCORPORATE CULTURE
Our diverse human resources locatedacross the globe all share the spirit
encapsulated in the company motto,“Sincerity and Creativity,” and havedeep-rooted drive for innovation.

P. 18

6

LINTEC ANNUAL REPORT 2015

P. 19

P. 20

With the assets we have cultivated over the years, we willfurther promote our business activities to achieve our targets byaccelerating growth.
Advancing businessactivities by leveraging
amassed strengths

Pushing
forward withthe medium-termbusiness plan,

Growing as a company and contributing
to the development of society
Building upon strengths
to fuel future growthto achieve
further growth

LINTEC ANNUAL REPORT 20157

Performance Highlights
LINTEC Corporation and its consolidated subsidiaries
Years ended March 31

Financial Data

Millions of yen

Thousands of
U.S. dollars*% change

2015

2014

2013

2015

2015 / 2014

¥207,255¥203,242¥190,844$1,724,684

2.0Operating income

16,881

13,766

10,564140,483

22.6

Income before income taxes

17,555

12,883

10,836

146,091

36.3

Net income

11,659

8,501

7,681

97,023

37.1

7.2%

5.8%

5.6%

—

—

Net income (basic)¥ 161.63¥ 114.22¥ 102.83$ 1.35

41.5

Net assets

2,363.81

2,100.87

1,909.57

19.67

12.5

48.00

42.00

34.00

0.40

14.3

8,713

¥ 10,055¥ 10,141

72,509(13.3)

Capital expenditures

7,754

4,874

12,29364,52659.1

Net cash provided by operating activities

15,48516,30919,619128,861(5.1)

Net cash used in investing activities(5,104)(6,952)(13,966)(42,475)

26.6

Net cash used in ﬁnancing activities(3,135)(8,020)(2,877)(26,093)

60.9

Cash and cash equivalents

56,05044,992

40,739466,428

24.6

Total assets

237,444

225,073

216,048

1,975,903

5.5

Net assets

171,674

152,610

143,569

1,428,594

12.5

2015

2014

2013

2015

2015 / 2014

202

203

184

—

(0.0)

Number of employees

4,413

4,223

4,270

—

4.5

Disabled persons employment ratio (%)

1.78

1.79

1.74

—

—

Net sales

Return on equity (ROE)

Per share data (yen and U.S. dollars)

Cash dividends

Depreciation and amortization¥$

Non-Financial Data

CO2 emissions (1,000 tons of CO2)

* The U.S. dollar amounts are translated, for convenience only, at the rate of ¥120.17 to U.S.$1, the prevailing exchange rate as of March 31, 2015.

8

LINTEC ANNUAL REPORT 2015

P. 34
Financial Summary
Please see pages 34-35.

Net Sales

Operating Income¥ Billion
250¥ Billion
25

207.3

200

20

150

15

100

10

50

5

0

2006

2007

2008

2009

2010

2011

2012

2013

2014

0

2015

Net Income / ROE

16.9

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Net Income per Share (Basic) / Cash Dividends per Share¥ Billion
15

11.7

12
9

%
15

¥
200

12

160

9

120

30

48
161.63

¥
50
40

7.2
6

6

80

20

3

3

40

10

0

0

0

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2006

2007

2008

2009

Net Income

Net Income per Share (Basic)

ROE (right scale)

Cash Dividends per Share (right scale)

Cash Flows

Total Assets / Net Assets¥ Billion
30¥ Billion
250

20

15.5

10

2011

2012

2013

2014

2015

0

237.4

200

171.7

150

0

100

(5.1) (3.1)

–10
–20

2010

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

50
0

2006

2007

Net Cash Provided by Operating Activities

Total Assets

Net Cash Used in Investing Activities

Net Assets

2008

2009

2010

2011

2012

2013

2014

2015

Net Cash Used in Financing Activities

LINTEC ANNUAL REPORT 20159

≥ MANAGEMENT STRATEGY

From the President

Hiroyuki
H
Hi
roy
ro
NishioRepresentative Director
President, CEO and COO

Looking back at the Company’s performance

Net Salesin the year ended March 31, 2015

¥ Billion
250

207.3

200

We increased sales and income due to signiﬁcant expansion in theElectronic and Optical Products
From the point of view of sales, in the ﬁscal year ended March 31, 2015—the150

inaugural year of our medium-term business plan, LINTEC INNOVATION PLAN 2016
(LIP-2016)—demand for some products was affected by a fall in consumer spending100

in Japan from the consumption tax hike in April, but there was a signiﬁcant
500increase in Electronic and Optical Products due to the effect of demand in such
2011

2012

2013 2014 2015
(Years ended March 31)

Operating Income / Net Income¥ Billion25

areas as smartphones. From the proﬁt aspect, apart from an increase in sales
quantity and an improvement in sales mix, there were also the effects of adecrease in stocking costs at foreign subsidiaries and the pushing up of the yen
equivalent amounts due to the weak yen.
As a result of the above factors, sales and income both increased in comparison
with the year ended March 31, 2014, with consolidated net sales up 2.0% year on

20

16.9

up 37.1%, to ¥11.7 billion. There were also signiﬁcant increases in both operating

15

11.7
10

10

proﬁt margin and ROE, from 6.8% in the previous ﬁscal year to 8.1%, and from 5.8%
to 7.2%, respectively.

50year, to ¥207.3 billion, operating income up 22.6%, to ¥16.9 billion, and net income

2011

2012

2013 2014 2015
(Years ended March 31)
Operating Income
Net Income

LINTEC ANNUAL REPORT 2015

Main initiatives during the inaugural year of LIP-2016

Operating Proﬁt Margin

We worked to expand overseas bases, maintaining
a focus on Southeast Asia%
10

The Company has been actively promoting business globalization and, in the8inaugural ﬁscal year of LIP-2016, enhanced its overseas business structure, main-

8.1

6

taining a focus on Southeast Asia, where growth is expected in the years ahead. We
successively commenced full-scale operations at our sales sites in Hanoi (Vietnam),Jakarta (Indonesia), and Kuala Lumpur (Malaysia) and at our delivery center in42

Mumbai (India), while continuing to steadily develop the system for supplying products
to local customers in a timely manner. Furthermore, in January 2015 we established

0

2011

2012

LINTEC ASIA PACIFIC REGIONAL HEADQUARTERS PRIVATE LIMITED in Singapore

2013 2014 2015
(Years ended March 31)

with a view to enhancing business development in Southeast Asia and India.
Moreover, from the aspect of product development, we are making steadyprogress with the development of new products and technologies, which will form

ROE
%
15

the backbone of our next businesses. These include high-barrier ﬁlm, which ishighly anticipated as a material for use in next-generation displays and combines
a level of transparency and water barrier properties roughly equal to that of glass

12
9

7.2

with the ﬂexibility unique to ﬁlm; light diffusion ﬁlm, which greatly contributes tothe increased brightness and reduced power consumption of displays; and theestablishment of volume production technology for carbon nanotube sheets, which

63

are expected to be utilized in applications such as in the electrode materials ofhigh-capacity electricity storage devices.
In addition to these developments, in April 2014 we reorganized the previous Cost

0

2011

2012

2013 2014 2015
(Years ended March 31)

Innovation Division into the Cost Innovation Ofﬁce that now comes under the directsupervision of the president as a measure to enhance our cost competitiveness. As
well as promoting further efﬁciencies in our raw material procurement operations,
we commenced a “development purchase” initiative that reviews optimal raw
materials from the product development stage in collaboration with the research
departments. Moreover, we have been enhancing measures for the utilization andpersonal development of diverse human resources. These measures include training
sessions with the aim of cultivating global human resources and promoting theactive involvement of female employees.

PT. LINTEC JAKARTA

P.31
Performance by Operational Segment
For details of performance by operational segment,
please see “Performance by Operational Segment” on page 31.

LINTEC ANNUAL REPORT 201511≥ MANAGEMENT STRATEGY

From the President

Overview of LIP-2016(From April 1, 2014, to March 31, 2017)≥ Basic Policy

Return to a growth path through active management
and continuous innovation≥ Key Initiatives
1. Further promote global development(1) Expand overseas businesses with a particular focus on Asian region(2) Establish firm business foundations in new regions

2. Create innovative new products that will support the next generation(1) Explore new markets and demand by creating new products(2) Enhance the base of our research and development in order to create new products

3. Transform into a robust corporate structure(1) Strengthen cost competitiveness(2) Select and concentrate our management resources

4. Promote strategic M&A(1) Clarify the targets that are suited to a growth strategy(2) Strengthen the system to promote M&A

5. Foster human resources(1) Secure and foster global human resources(2) Implement continuous stratified training≥ Major Numerical Targets (on a consolidated basis)
Net sales:

Operating income:

240.0 billion ¥20.0 billion¥

12

LINTEC ANNUAL REPORT 2015

Operating proﬁt margin:More than

8%

ROE:

More than

8%

Activities in the second year of LIP-2016

We will further enhance global development andpromote enterprising capital investment
As the current ﬁscal year, ending March 31, 2016, is viewed as a very important year ininﬂuencing our success or failure in reaching the medium-term business plan’stargets, we will actively implement a raft of measures under the “A Year to
Acceleration of LIP-2016” banner. Firstly, in addition to our efforts to uncover demandin order to expand sales, for example, by formulating new application proposals inJapan, where market maturation continues unabated, we will make further advancesin global development toward signiﬁcant growth in the coming years. In Southeast
Asia and India, sales capabilities will be enhanced by and new market development
expected from the full-scale operations of the previously mentioned LINTEC ASIA
PACIFIC REGIONAL HEADQUARTERS PRIVATE LIMITED. Also, we will work to build
an optimized production system, improve efﬁciency in raw material procurement andstrengthen governance. We consider the M&A of companies with brand power andsales channels in each region, and those that possess technologies not currently
at LINTEC’s disposal, as an effective strategy to enhance our competitiveness in
the Southeast Asian and Indian markets and, going forward, we will continue toexamine further opportunities.
One of the targets cited in LIP-2016 is an overseas sales ratio of 40% or more,
and to continue along that road we have to develop global strategies that not onlyy
naturally include Asian markets but also other regions. In September 2015, theheCompany plans to exhibit on an unprecedented scale at LABELEXPO EUROPE
OPE
2015, the world’s largest label-related trade fair, which is being held in
n Belgium.
There, we will display the appeal of the Company’s advanced technologicalnological capac
bilities and product quality as well as enhance LINTEC’s brand power, foc
focusing on
the European market. Viewing this as an opportunity to expandand sales ofo our mainstay
adhesive products for seals and labels, we will also link ourur efforts
effor to the creationof a ﬁrm business foundation in new regions.
From the capital investment standpoint, we are making progress with the
expansion of our adhesive coating facilities, including the Shingu Plant in Japan,
which is engaged in adhesive processes for optical-related products, and LINTEC(THAILAND) CO., LTD., which serves as a production site for adhesive products forseals and labels as well as for industrial-use. We are also working to enhance our
production systems with a view to responding to new demand. Under construction
since April 2014, the new Advanced Technology Building at our research center wascompleted in May 2015. In the years to come, we will install cutting-edge equipment,
including large experimental research facilities, which we plan to have in full-scale
operation in the fall of 2015. The total amount of capital investment is approximately¥6.0 billion and can be expected to accelerate the development of innovative products
and the volume production of developed products.

Advanced Technology Building

LINTEC ANNUAL REPORT 201513≥ MANAGEMENT STRATEGY

From the President

Performance forecast for the current ﬁscal year

We forecast increased sales and income due to our efforts
in increasing sales and cost reduction
With regard to the forecasts for the current ﬁscal year, we are expecting an
increase in ﬁxed costs, due to such factors as our proactive capital investment
activities, and rises in the prices for raw materials. In addition to our efforts toincrease sales and reduce costs, we also see currency exchange rates as having
a positive effect. As a result of the preceding, for the ﬁscal year ending March 31,
2016, we are forecasting consolidated net sales of ¥220.0 billion, up 6.1% year on
year, operating income of ¥18.5 billion, up 9.6%, and net income attributable toparent company’s shareholders* of ¥12.7 billion, up 8.9%.
Cash Dividends per Share

Shareholder returns¥
60

In the current ﬁscal year, we plan to increase the dividend per shareby ¥6 for the second successive year, to ¥54

54

LINTEC regards enhancement of return of proﬁts to shareholders as one of its

48

most important management issues. From the perspective of distributing proﬁts,
36

the Company fundamentally aims to provide stable and continued returns after
consideration of each ﬁscal year’s consolidated performance while strengthening24

its management base. Adhering to this basic policy, the year-end dividend for the120year ended March 31, 2015 was set at ¥26 and, in combination with the interim
2012

2013

2014

2015 2016

Forecast(Years ended / ending March 31)

dividend of ¥22, dividends for the full year totaled ¥48, an increase of ¥6 over theprevious year.
With regard to dividend payments for the year ending March 31, 2016, based on
projections of consolidated net income attributable to parent company’s shareholdersof ¥12.7 billion, we intend to increase dividend payments by ¥6 per share, to ¥54. As
we work to improve our corporate performance in the coming years, we will also
work to further enhance shareholder returns by cash dividends.

In closing
We increased sales and income in the inaugural year of LIP-2016, but that achievement
was largely on the back of the favorable performance related to Electronic and
Optical Products and the effects of the weak yen; it cannot be said that we madegood progress across all our businesses. The current ﬁscal year is of extreme
importance in the achievement of the medium-term business plan’s ﬁnal-yeartargets, so our policy is one of closely analyzing and evaluating the progress madeNote: Due to a revision to the “Accounting Standard for Business Combinations,” with effect from the consolidated
ﬁscal year beginning April 1, 2015, the previous method for disclosing net income for the period has beenchanged to “net income attributable to parent company’s shareholders.”

14

LINTEC ANNUAL REPORT 2015

in the inaugural year, reviewing a raft of measures to address problem areas thathindered progress and continuing to link these moves to rapid and steady results.
In the years ahead, Group companies will work in unison to achieve the LIP-2016
targets, aim for the realization of sustainable growth, andvigorously push ahead.
In addition, to remain a company that is highly regarded and trusted by all its
stakeholders, we must also remain a presence that contributes to the developmentof society through its business activities on the basis of improvements in corporate
value through performance increases. Under the company motto of “Sincerity andCreativity,” I will promote management that positions corporate social responsibility(CSR) as a core element and will contribute to creating a better society by fully
leveraging the management resources that we have thus far accumulated.
In grateful and appreciative anticipation of receiving the ongoing support of all
our shareholders and investors,
August 2015

Hiroyuki Nishio
Representative Director
President, CEO and COO

LINTEC ANNUAL REPORT 201515

≥ BUSINESS ACTIVITIES SUPPORTING VALUE CREATION

R&D Activities andIntellectual Property
As a technology-centered company, we realize that strengthening R&D capabilities is one of ourmost important management strategies for achieving sustainable growth. Two approaches help us to create
both products that resolve our customers’ technological issues and products that are unprecedented,
innovative, and lead the market: the developing of functional materials and related processing technologies
that leverage our proprietary technological capabilities, and a market-dialogue style of research thatemphasizes user needs. Going forward, we will further strengthen our R&D systems to accelerate
the speed of product development and create new technologies.

R&D Achievements

In industrial machinery-related products, our development

In the ﬁscal year under review, R&D expenses incurred

activities are focused on labeling systems for the automatedby the Group amounted to ¥6.8 billion. The following is anapplication of the adhesive labels that are our core products.

overview of the principal R&D activities conducted by eachIn the ﬁscal year under review, we developed a semi-automatic

operational segment.

packaging and address labeling device, in addition to a labelingdevice equipped with a full-color printer, for the logistics andPrinting and Industrial Materials Products

mail-order industries.

Printing and Variable Information Materials
As part of its efforts in developing environmentally friendly

Electronic and Optical Products

products, LINTEC has newly developed a label material madeSemiconductor-Related Materials

from a PET ﬁlm comprising more than 80% recycled PET

LINTEC is pushing forward with its DBG+LE system, a fusion

resin. The material uses PET that has been re-formed throughof our dicing before grinding (DBG) system, which allows fora mechanical recycling process, and we are beginning to

the creation of thinner large-scale integration (LSI) chips, andpromote it as a new ﬁxture of our environmentally friendly

our LE tape, which functions as both dicing and die bondinglabel materials product lineup.

tape. This has resulted in the realization of multilayer LSI
chips and LINTEC is contributing to increased density of LSI
packaging through measures such as the integration of thistechnology in solid state drives (SDDs), which represent analternative to conventional hard disk drives (HDDs).
In the electronic equipment-related products, we arefocusing our efforts on the development of an application
device to improve the efﬁciency of tape use in the wafer backgrinding and wafer dicing back-end semiconductor fabrication

Mechanically recycled PET label materials

processes. In the year under review, we newly developed
a vacuum laminator that enables compatibility with both theIndustrial Materials

surface unevenness of the wafers of power devices and the

LINTEC has developed a new automotive ﬁlm, which adds athrough-silicon via (TSV) process. Moreover, we also developed

touch of luxury to automobile window glass and also preventsand released a new multiwafer mounter, which is capable of

the glass from shattering into fragments if broken. The ﬁlm

processing ultra-thin wafers without using Back Grinding

ﬁlters out light close to visible light with a wavelength between(BG) tape.

900nm-1200nm, and maintains a high level of transparency
while demonstrating outstanding insulation properties.

16

LINTEC ANNUAL REPORT 2015

Optical Functional Materials

electronic device production, establishing an improved formula

We are continually engaged in the development of adhesives forthat offers excellent substrate adhesion and can be combined

use in mobile devices, such as optically clear adhesive sheetswith various release formulas.

for use in polarizing ﬁlms and touch screens, and anti-shatterﬁlms. Moreover, through a unique optical design we have createdIntellectual Property Activities

a specialized light diffusion ﬁlm that controls the scatter of light.

The LINTEC Group aims to increase corporate value by

By offering special customization to meet customer demand,developing original products that meet customer needs.

we have sharpened our competitive edge and anticipate theWe therefore rank intellectual property, such as patents,

technology to be adopted for display and signage applications.

trademarks, and design rights, which we have acquired throughWe aim to expand sales of these products while continuing tothese development activities, as important management

develop new functional adhesives and coatings.

resources. While placing the utmost emphasis on respecting
the rights of other companies, the Intellectual Property
Department, Research & Development Division promotes
strategic Companywide intellectual property activities. These
activities include seeking to uncover new invention candidates
at R&D sites for the purpose of expanding intellectual property
rights, which are the lifeline to a technology-centered company.

Conventional reﬂective LCD (left) and reﬂective LCD
using LINTEC light diffusion ﬁlm

Accordingly, while planning the linkage of things suchas patent portfolio building for our foundation and growthPaper and Converted Products

business domains, and support for M&A activities, with our

In specialty papers, we have developed four new colors ofbusiness strategy, we aim to improve proﬁtability based onJapanese-style fancy paper. The new colors are pale, pastel hues

intellectual property.

based on Japan’s four seasons. We also pushed forward with thedevelopment of a water-repellent paper for envelopes.
In release materials, we aim to enhance our existing range

Number of Patents Registered in Japan* Patents held at the end of the fiscal year (cumulative)
2,000

of environmentally friendly products and have been pushingahead with the development of a solvent-free release paper
formula. Moreover, concerning release ﬁlm formulation, we

1,527

1,600
1,200

have launched a new product that signiﬁcantly reduces thevolume of organic solvents used in the dilution process. We
have also reﬁned the anti-static formula of process ﬁlm for

800
400
0

2011

2012

2013 2014 2015
(Years ended March 31)

Japanese-style fancy paper

LINTEC ANNUAL REPORT 201517

≥ BUSINESS ACTIVITIES SUPPORTING VALUE CREATION

Human Resources

The LINTEC Group employs approximately 4,500 people (on a consolidated basis) in 16 countries andregions around the world. Diverse human resources are the Group’s asset, and its strength is characterized
by a corporate culture nurtured over an 80-year history, which values “harmony among people” and “standout of the crowd” individuality in its employees, in addition to a deeply rooted awareness of innovation
across the entire company. LINTEC strives to create a pleasant working environment for everyone and isengaged in the enhancement of its systems and the education of its employees.

Respecting Human Rights and Diversity

also working toward the enhancement of programs that allow

The LINTEC Group avoids discriminatory treatment of employees

employees to match their working style to their lifestyle. This

based on race, creed, gender, education, nationality, religion, or

includes expanding the ﬁeld of eligibility for and lengthening

age, thereby respecting the diversity of individuals. In the areas

the period of shorter work hours for childcare and family careof recruitment and employment, the Group complies thoroughly

programs, and the introduction of a paid social contribution

with labor laws and regulations, including the prohibition oftime-off program. Furthermore, in order to encourage

unfair discrimination, child labor, and harassment, and is

employees to take more paid leave from the ﬁscal year ending

pushing forward with the creation of workplace environments

March 31, 2016, we have introduced a system that requires

where all employees can happily and actively do their jobs.

employees to designate in advance three days that they willtake as paid leave over the year.

Employment of Disabled Persons
The Group’s disabled persons employment ratio for the year

Employee Education

ended March 31, 2015 was 1.78%, which was below the legally

LINTEC has introduced Companywide rank-based training

mandated rate of 2.0%. Going forward, we will strive to increaseprograms, which are human resource education programs

our disabled persons employment ratio through measures

tailored to individual employee’s years of continuous service

such as the improvement of on-site facilities as required.

and careers. Moreover, with objectives such as promoting
second-language acquisition and encouraging women to play

Rehiring Systema more active role in the workplace, we hold theme-speciﬁc

To expand working style options for its employees, the Group

group and correspondence training courses to promote thehas introduced a job return program to rehire ready-to-work

education of global human resources and the career progres-employees who had previously resigned for personal reasonssion of female employees. Furthermore, we are also engaged

such as childbirth, nursing care of a family member, or thein efforts to boost Companywide employee understanding oftransfer of a spouse to a different location. We have also

various themes, such as the environment, product quality, theintroduced a system to rehire employees who wish to continue

business continuity management system (BCMS), and CSR,

working past the mandatory retirement age of 60, on ﬁxed-term

through e-learning programs offered via the Company’s intranet.

one-year contracts up to a maximum age of 65.
Work-Life Balance
LINTEC is working to help employees to balance theirprofessional and personal lives, so that employees are able toperform their jobs with peace of mind and exercise their fullabilities. In addition to the establishment of no-overtime days,
which aims to deter employees from working excessively longhours, and the implementation of a ﬂextime system, LINTEC is18

LINTEC ANNUAL REPORT 2015

Training session to promote
the active involvement offemale employees

Partnerships

The LINTEC Group boasts a very wide product lineup and conducts transactions with numerous customers
and suppliers. We build trusting relationships with suppliers as a partner that aspires toward mutual development, and convey peace of mind and reliability to our customers by developing products that meet theirneeds, maintaining a stable supply of these products, and endeavoring to improve product quality andservice. Moreover, we are also actively engaged in the development of products through collaboration withcustomers and cooperation with industry, government, and academia.

Conducting Thorough Quality Managementbusiness operations, we can ensure the safety of our employees

The LINTEC Group has acquired ISO 9001 certiﬁcation, thebefore promptly recommencing the supply of products, ininternational standard for quality management systems, for its

addition to minimizing any effect on our stakeholders, including

major sites in Japan and overseas. In addition, we are working

our customers.

to further reinforce our quality assurance system by expanding

LINTEC is continuously evaluating its suppliers’ ability to

ISO 9001 to other departments and acquiring integrated certi-

continue their businesses, as raw materials are critical inﬁcation for related sites. We also strive to prevent quality problems

securing a stable supply of products for our customers. At theby conducting design reviews, a method for checking materials

same time, we request that our suppliers introduce a businessunder development at each stage of the production processcontinuity plan (BCP) and establish a management system tofrom the perspective of different divisions. As a result of such

implement it.

initiatives, when comparing major quality problems by year, if
year ended March 31, 2004 is set as a base of 100, problems

Fair Transactions

declined to 14 by the ﬁscal year ended March 31, 2015.

The LINTEC Group has a basic policy for fair and transparent

Major Quality Problem Rates by Fiscal Yeartransactions based on the principle of free competition between(2004 set as a base of 100)all suppliers, and we are engaged in procurement activities that

Rate
100

comply with all relevant laws and regulations and social norms.

80

stability of supply, technology, and service, but also the envi-

60

ronmental preservation and CSR efforts of these suppliers.

We select suppliers by evaluating not only quality, price, punctuality,

40

Green Procurement

20
〜
〜

0

14
2004

The LINTEC Group is committed to procurement that aims
to reduce environmental impact, through thorough chemical

2012

2013 2014 2015
(Years ended March 31)

substance management for raw materials, parts, and secondary
materials. On procuring a new material or implementing a new

Efforts toward Business Continuation

regulation, we ask for suppliers’ understanding in conducting

The Company is engaged in building a system capable of either

ingredient examinations to monitor for the presence of regulated

continuing or soon restarting business operations even if struck

substances. For the year ended March 31, 2015, we imple-

by a disaster. In March 2014, all the Company’s bases in Japanmented ingredient examinations to monitor for the presence

and one of its subsidiaries, TOKYO LINTEC KAKO, INC., obtainedof substances regulated by REACH* in the procurement ofcertiﬁcation under ISO 22301:2012, the international standard

approximately 12,000 items.

for business continuity management systems (BCMS). LINTEC* REACH Regulation: Registration, Evaluation, Authorization and Restriction of Chemicals.
This is a European Union regulation to address the production and use of chemicals.

holds BCMS study meetings and drills at each site so that, inthe event of a natural disaster or accident that disrupts

LINTEC ANNUAL REPORT 201519

≥ BUSINESS ACTIVITIES SUPPORTING VALUE CREATION

Social Contribution Activities

The LINTEC Group is supported by society and local communities. Recognizing that it is a part of this, andthrough various social contribution activities, the Group returns some of the proﬁts it has made through its
corporate activities to society. Going forward, we will endeavor to maintain harmony with society by actively
engaging in social contribution activities as a good corporate citizen.

Support for Disabled Persons

for many years at work sites nationwide, which have become

LINTEC holds various support activities on an annual basis

established among our employees as a social contribution

for disabled persons living in Itabashi-ku, Tokyo, where ouractivity that they can easily participate in.

head ofﬁce is located. The baseball-viewing event in April 2015
marked the ninth time the event has been held, and a total of
118 disabled persons, including their helpers, were invited toTokyo Dome to watch a professional baseball game. On thisoccasion, we also invited 385 elementary school students
belonging to local youth baseball teams and their leaders.
Before the game began, the children engaged in ﬁelding
practice, base running on the playing surface, which will be

Participation in local festivals(Awaodori)remembered by many. In September 2014, we hosted a jazzconcert with the aim of deepening interactions among attendees

Support for Earthquake Disaster Reconstruction

through music, regardless of whether they had or did not have

LINTEC is engaged in activities to support reconstruction efforts

a disability. This was the fourth time that we hosted this concert

after the Great East Japan Earthquake of March 2011. For theand, on this occasion, it was enjoyed by approximately 650

year ended March 31, 2015, we donated monetary support suchpeople, comprising disabled persons living in Itabashi-ku, in

as from our employees and the Company to disaster-stricken

addition to other local area residents.

Ofunato City in Iwate Prefecture. These funds are being used
to maintain the grounds at junior high schools within the city,which is ﬂanked by the temporary housing of victims, and havebeen useful in improving the environment where students
exercise. Moreover, we have been holding an event showcasing
products from Fukushima Prefecture at our head ofﬁce, thereby
supporting producers in the disaster-affected area who areworried about the ﬁnancial damage that could be caused totheir livelihoods by harmful rumors or misinformation about

Professional baseball-viewing eventthe safety of foods from Fukushima Prefecture.

Activities at Each Work Site
In addition to cleanup activities around each work site, LINTEC
is also engaged in various other social contribution activities
with their roots in the community, including participating in andsupporting local festivals, conducting plant tours, collecting andhandling donations of money and products for municipalities aswell as local groups and facilities, and holding tree-planting
activities. Moreover, we have been organizing blood donations
20

LINTEC ANNUAL REPORT 2015

Fukushima produce
exhibition at head ofﬁce

Environmental Preservation

Under the slogan, “We have to broaden our scope when working to support the environment.
There is only one earth” the LINTEC Group has established environmental management systems.
We are committed to reducing environmental impact as an intermediary materials manufacturer anddeveloping environmentally friendly products.

Environmental Management

High-Peel and Removable Label Materials

The LINTEC Group has set up environmental management

High-peel and removable label materials can be attached ﬁrmly

systems that conform with the ISO 14001 international standard

to plastic containers without leaving a sticky residue when theat its major sites in Japan and overseas. We are now actively

label is peeled off, thereby contributing to the reuse and recycling

advancing plans to have our overseas bases certiﬁcated in anof these containers. The products are also environmentally

integrated manner. During the year ended March 31, 2015, thefriendly from a design perspective, as the coating process uses

Florida factory of our U.S. subsidiary MADICO, INC., was newly

the adhesives of a water-based emulsion type and does notcertiﬁed and, to date, we have completed the integrated

use organic solvents.

certiﬁcation of a total of 23 sites in Japan and overseas. By
making progress in obtaining global integrated certiﬁcationfor overseas Group companies, we will strengthen efforts
toward Companywide environmental preservation.
Reducing Environmental Impact
The LINTEC Group is working toward the realization of asustainable society and the creation of products with low
environmental impact. For the year ended March 31, 2015,

High-peel and removable label materials

despite an increase in our production volume, we reduced our
total energy use by 1.2% from the previous ﬁscal year andSolar Insulation Film for Glass

surpassed our target for annual CO2 emissions of 205,000 tons,

Window ﬁlms can be applied to window glass in buildings

by achieving a reduction to 202,000 tons. Furthermore, we

and automobiles for various effects. Of these ﬁlms, our high-are also engaged in efforts to reduce the amount of wastetransparency type solar insulation ﬁlm maintains the naturalgenerated in our production activities and the amount oflight inside the room and preserves the view through the window,

water used in the papermaking process, in addition to thewhile signiﬁcantly cutting the thermal energy from solar

implementation of measures to reduce the amount of volatile

radiation that causes internal temperatures to increase andorganic compounds (VOCs), including organic solvents, that

improving the efﬁciency of air conditioners in the summertime.

are released into the atmosphere.
Environmentally Friendly Products
The LINTEC Group has embraced the rise in environmental
awareness of recent years, and continues to develop products
to meet a wide range of environmental needs, including thosethat are conscious of reuse, recycling, and energy-saving
principles. In doing so, the LINTEC Group will continue tooffer a lineup of products that are environmentally friendly.

Window ﬁlms

LINTEC ANNUAL REPORT 201521

≥ OUR GROWTH FOUNDATION

Corporate Governance

Basic Philosophy

Held once a month to make important decisions with regard

LINTEC believes that the fundamentals of corporate governanceto management, Board of Directors’ meetings are also held

are to achieve thorough legal compliance, to increase manage-

on an ad hoc basis as necessary and strive for rapid decision

ment transparency and promote corporate ethics, and to makemaking. Primarily comprising executive ofﬁcers (including

prompt decisions and effectively execute operations. By enhancing

directors serving concurrently) responsible for the execution ofand reinforcing corporate governance, we aim to further

business, management meetings are also held once a monthincrease our corporate value and joint proﬁts with shareholders.

and endeavor to streamline business operations through thesharing of information among all business divisions.

Corporate Governance System

The Audit & Supervisory Committee meets once a month and1. Corporate Governance System

conducts monitoring audits that focus on matters reported from

Based on a resolution at the 121st Annual General Meeting of

the Audit Ofﬁce, which is the Company’s internal control division.

Shareholders held on June 24, 2015, the Company has shifted

In addition to performing audits covering the appropriatenessfrom being a Company with an Audit & Supervisory Board to aand legality of the execution of directors’ duties, each andCompany with an Audit & Supervisory Committee. The Company

every Audit & Supervisory Committee member also plays a role

placed directors who are also Audit & Supervisory Committee

in supervising the execution of the directors’ duties throughmembers with voting rights on its Board of Directors in order tothe exercise of the voting rights on the Board of Directors.

strengthen the Board’s supervisory function, with a view to
stepping up corporate governance and to streamlining manage-

2. Internal Control Systems

ment even further. Following this shift, the Company formed

With regard to an internal control system to ensure that thethe Board of Directors and the Audit & Supervisory Committee

execution of directors’ duties is in compliance with laws andand appointed 16 directors, of which four are Audit & Supervisory

regulations as well as the Articles of Incorporation, and a system

Committee members, and four are outside directors.

to ensure the appropriateness of the execution of other business,
the Company decided on the following internal control systems
at the Board of Directors’ meeting held on June 24, 2015.

General Meeting of Shareholders
Appointment /Dismissal

Appointment /Dismissal

Management decisions
Informing / Reporting

Board of Directors(Directors)

Auditing /Supervision

President

Appointment /Dismissal

Audit &
Supervisory
Committee(Directors
serving as Audit &Supervisory
Committee
members)

Cooperation

Management Meeting(Executive Officers)

CSR Management Office• Corporate Ethics Committee• Customer Satisfaction Committee• Environmental Preservation
Committee• Social Contribution Committee• Safety, Disaster Prevention, andHealth Committee

Operational Execution Divisions

Promotion• Administrative Division• Marketing Division• Production Division• Technical Division• Domestic and Overseas
Subsidiaries
Operational execution

22

LINTEC ANNUAL REPORT 2015

Cooperation

Informing

Audit OfficeInternal
Auditing(Internal Control)

Independent
Auditors

Account
Auditing /Internal
Control
Auditing• System to ensure that the execution of the duties of directors• System to ensure that the execution of the duties of directors

and employees is in compliance with laws and regulations

is efﬁciently conducted

as well as the Articles of Incorporation

In addition to setting out the duties for which directors are

To ensure that the execution of the duties of directors andresponsible for and that correspond to the allocation of roles

employees is in compliance with laws and regulations as wellof each organization, based on the Regulations on the Division

as the Articles of Incorporation and that a sense of ethics isof Duties, the Company works to separate management

maintained, the Company established its motto of “Sincerity

from execution and accelerate decision making by the intro-

and Creativity,” on which was based its Code of Conduct. To

duction of an executive ofﬁcer system. In addition, the Company

ensure the effectiveness of the compliance system with regard

occasionally reviews internal organizations to be able toto laws and regulations as well as the Articles of Incorporation,

respond to environmental changes and works to maintainthe Audit Ofﬁce—an organization under the president’s direct

efﬁciency in the execution of the duties of directors by suchsupervision—investigates and veriﬁes, by means of auditsmeans as the setting up of cross-organizational committees

based on the Internal Audit Regulations, whether all of theon an as-required basis.

Company’s operations are being appropriately and reasonably
implemented legally and pursuant to the Articles of• System to ensure the appropriateness of business in the

Incorporation and internal rules and regulations. The

corporate group comprising the Company and its subsidiaries

results of those audits are regularly reported to directors.

Based on the Afﬁliate Company Operational Regulations,the Company works to maintain the appropriateness of its• System for storing and managing information related to theoperations as a group entity by having each of its principal

execution of directors’ duties

business divisions control the operations of Group companies.

Documents are stored and managed in accordance with rules

Based on the Afﬁliate Company Operational Regulations, theagreed for each document type, including those documents

Company works to maintain a system for receiving corporate

stipulated by law.

performance, risk, and other important reports from otherGroup companies regularly or on an as-needed basis. Providing• Regulations and other systems pertaining to managementbusiness management and support from the appropriate

of risks of loss

division as required, the Company promotes management

By promoting the issue of division-speciﬁc manuals andefﬁciency in each company. To ensure that Group companies are

facilitating their thorough use, the Company makes preemptive

in compliance with laws and regulations as well as the Articles

efforts to reduce or avoid risk. In the case of speciﬁc risks,of Incorporation, audits are conducted by each company’s

the Company promotes reviews of and upgrades tointernal audit system and by the Company’s Audit Ofﬁce.

responses as they arise.
For emergency situations, such as the occurrence of a

• Matters relating to the employees who are tasked tonatural disaster, the Company has established the Companywide

assist the duties of the Audit & Supervisory Committee,

Crisis Management Regulations, in addition to a BCMS, whichmatters relating to the independence of said employees

is based on these Regulations. These are separate from risk

from directors, and matters relating to ensuring the effec-

management conducted through normal operations, so thattiveness of Audit & Supervisory Committee instructions

a crisis management organization can be quickly establishedwith respect to said employees

in the event of an emergency.

To further raise the effectiveness of Audit & Supervisory
Committee audits and maintain a system to carry out audit
duties more smoothly, the Company has established the

LINTEC ANNUAL REPORT 201523

≥ OUR GROWTH FOUNDATION

Corporate Governance

Audit & Supervisory Committee secretariat, which supports• Matters concerning policy relating to the handling of costs

and takes on Audit & Supervisory Committee duties. It isor liabilities arising from the execution of duties of Audit &assumed that the Audit & Supervisory Committee’s consent

Supervisory Committee members

has to be obtained for transfers of personnel to the Audit &When an Audit & Supervisory Committee member invoices

Supervisory Committee secretariat staff, personnel evaluations,the Company for the prepayment or redemption of expenses

and disciplinary action. The instructions and orders given to

incurred for the execution of those duties, the said costs or

Audit & Supervisory Committee secretariat staff are also

liabilities will be promptly handled following discussions in thedeemed to be given by directors serving as Audit &department responsible, with the exception of cases in which

Supervisory Committee members. With regard to said

said costs have been recognized as being not necessary for

instructions and orders received from Audit & Supervisory

the execution of the said Audit & Supervisory Committee’s

Committee members, with the exception of those instructions

duties. In addition, should Audit & Supervisory Committee

and orders that are not necessary for the duties of Audit &members have asked that independent outside experts

Supervisory Committee members, it is assumed that Audit &(such as lawyers, certiﬁed public accountants, etc.) be deemedSupervisory Committee secretariat staff members do not receivenecessary as advisers to Audit & Supervisory Committee,

instructions and orders from directors or other employees.

the Company will bear those costs, with the exception ofcases in which said costs have been recognized as being• System relating to the reporting of cases to the Audit &Supervisory Committee and system for ensuring that the

not necessary for the execution of the said Audit &Supervisory Committee’s duties.

submitting of such reports is not seen as reason enoughfor the person who submitted them to be subjected toCommittee carries out other audits effectively

With regard to cases that are likely to signiﬁcantly damage

With a view to ensuring a system so that Company information

the Company or a Group company, such as violations of laws

reaches the Audit & Supervisory Committee unhindered, theor regulations, all Group directors and employees are toCompany works to maintain an environment in which infor-

report such cases to the Company’s Audit & Supervisory

mation is received from directors (excluding directors serving

Committee. In addition, it is deemed that the Audit &as Audit & Supervisory Committee members) and not only

Supervisory Committee will be able to directly demand afrom employees but also from independent auditors, corporate

report on the case for all Group directors and employees.

lawyers, tax accountants, and other specialists. The Company

Under the Company’s Internal Notiﬁcation System

ensures as a system regular meetings with representative

Regulations and its Global Internal Notiﬁcation System

directors and venues for important discussions, such as

Regulations, the Company established a helpline that canmanagement and strategy meetings, for Audit & Supervisory

be used by all Group directors and employees and endeav-Committee members to attend and state opinions.

ors to maintain a system to ensure that the submitting ofsuch reports is not seen as reason enough for the person
who submitted the said notiﬁcation or report to be subjected
to disadvantageous treatment. In the event of an internal
notiﬁcation via the helpline, this will be reported to the
Audit & Supervisory Committee.

24• System for ensuring that the Audit & Supervisory

disadvantageous treatment

LINTEC ANNUAL REPORT 2015

3. Risk Management System

conduct audits of the Board of Directors’ business execution

The Company has established the Companywide Crisis

through such methods as exchanges of opinions. Each Audit

Management Regulations, as well as a risk management& Supervisory Committee member attends management andsystem for minimizing the possible impact and damage toother meetings, obtains the information needed for the audits,

corporate value if a major problem arises. It has also imple-

attends Board of Directors’ meetings as a director, andmented and oversees the Information Security Management

supervises the Board of Directors in the execution of its duties

Rules and the Trade Secret Management Rules for the

by stating opinions and participating in resolutions throughpreservation and management of information. There are

their voting rights.

also Companywide risk assessments centered on the CSRManagement Ofﬁce.

Audit & Supervisory Committee members Toshio Yamamoto
and Toru Nozawa have considerable knowledge of ﬁnance andaccounting, having gained many years of experience in their

4. Limited Liability Contracts

respective roles at the Company’s Corporate Strategic Ofﬁce

In accordance with Article 427, Paragraph 1 of the Companies

and Nippon Paper Industries Co., Ltd.’s Administrative Division.

Act, the Company has entered into a contract with each of its
non-executive directors—outside directors Shinichi Sato, Toru

Outside Directors

Nozawa, Satoshi Ohoka, and Kanako Osawa—that limits liability

The Company has selected Shinichi Sato, Toru Nozawa,for compensation for damages under Article 423, Paragraph 1

Satoshi Ohoka, and Kanako Osawa as its four outside directors.

of the Companies Act. Based on this contract, liability forWith the exception of Shinichi Sato, the other three are also

compensation for damages is limited to ¥10 million or the

Audit & Supervisory Committee members.

minimum liability amount stipulated by law, whichever is greater.
1. Human, ﬁnancial, and business relationships and other
Internal Audits and Audit & Supervisory Committee Audits

interests between the outside directors and the Company

1. Internal Audits

There are no particular conﬂicts of interest between the

The Audit Ofﬁce regularly implements internal audits of divisions,Company and Shinichi Sato, but Nippon Paper Industries Co.,

work sites, plants, and afﬁliated subsidiaries in addition toLtd., where he serves as a senior managing executive ofﬁcer,

verifying that operational execution processes and results

is a major trading partner of the Company, which purchased

comply with the law and internal regulations. The status of¥2,336 million of raw materials from and sold ¥134 million ofthese internal audits is reported from time to time to the

products to Nippon Paper (both results from the ﬁscal year

Audit & Supervisory Committee, and opinions are exchanged

ended March 31, 2015). In addition, Nippon Paper is a major

on the results of the audits.

shareholder in the Company, its holding amounted to
21,737,792 shares (28.39% of the total number of Company

2. Audit & Supervisory Committee Audits

shares outstanding) on March 31, 2015.

The Company’s Audit & Supervisory Committee comprises
four directors serving as Audit & Supervisory Committee

There are no particular conﬂicts of interest between themembers, of whom three are outside directors. While utilizing

Company and Satoshi Ohoka, who is an independent committee

the various systems of the internal control system, Audit &member as stipulated in the Company’s rules of large-scale

Supervisory Committee cooperate with the Audit Ofﬁce andpurchase to deal with an act of large-scale purchase.

the independent auditor, receive the necessary information, and

LINTEC ANNUAL REPORT 201525

≥ OUR GROWTH FOUNDATION

Corporate Governance

There are no particular conﬂicts of interest between the

Kanako Osawa is able to apply her specialist expertise andCompany and Toru Nozawa, but Nippon Paper Industries Co.,extensive knowledge she gained as an attorney, along withLtd., where he serves as a director and executive ofﬁcer, is a

the knowledge and experience gained through her career inmajor trading partner of the Company, which purchased

corporate legal affairs both at home and abroad, to strengthen¥2,336 million of raw materials from and sold ¥134 million of

the Company Board of Directors’ supervisory function. She isproducts to Nippon Paper (both results from the ﬁscal year

thus considered qualiﬁed as a director serving as an Audit &ended March 31, 2015). In addition, Nippon Paper is a major

Supervisory Committee member. She is also designated as anshareholder in the Company, its holding amounted toindependent director, as stipulated by Tokyo Stock Exchange, Inc.

21,737,792 shares (28.39% of the total number of Company
shares outstanding) on March 31, 2015.

3. The Company’s basic way of thinking with regard to the
independence of outside directors

There are no particular conﬂicts of interest between the

The Company does not have its own set standards and policies

Company and Kanako Osawa, who is an independent committeewith regard to the independence of outside directors, and refers

member as stipulated in the Company’s rules of large-scaleinstead to the standards stipulated by Tokyo Stock Exchange,purchase to deal with an act of large-scale purchase.

Inc. Since appointment is based on a request from the Company,
we recognize that the independence from management is to

2. Functions performed and roles served by outside directors

be ensured.

in the Company’s corporate governance
Shinichi Sato is able to apply his accumulated rich knowledge and4. Outside directors’ supervision and internal auditing ofexperience as a current ofﬁcer at Nippon Paper Industries Co.,

directors’ execution of duties, mutual cooperation withLtd., to the Company’s management and is thus considered

Audit & Supervisory Committee audits and accounting

qualiﬁed as an outside director.

audits, and relationship with the Internal Control Division.
In addition to attending Board of Directors’ meetings andSatoshi Ohoka is able to apply his long years of policy-based

making necessary and effective remarks during agenda delib-ﬁnance experience, his rich international experience, hiserations, outside directors cooperate with the Internal Audit

specialist academic experience, and his knowledge and expe-

Division and the independent auditor as well as oversee

rience gained as an outside director in industries different todirectors in the execution of their duties.

that of the Company to strengthen the Company Board of
Directors’ supervisory function. Thus considered qualiﬁed

Remuneration of Corporate Ofﬁcers

as a director serving as an Audit & Supervisory Committee

1. Total remuneration by corporate ofﬁcer type
Total remuneration by typemember, he is also designated as an independent director, as
stipulated by Tokyo Stock Exchange, Inc.

Corporate ofﬁcer type

Toru Nozawa is able to apply his knowledge and experience(excluding outside directors)

from his directorship experience, and many years of businessexperience at Nippon Paper Industries Co., Ltd.’s Administrative
Division to strengthen the Company Board of Directors’supervisory function. He is thus considered qualiﬁed as adirector serving as an Audit & Supervisory Committee member.

26

LINTEC ANNUAL REPORT 2015

Total
remuneration

Audit & Supervisoryboard members(excluding outside Audit &Supervisory board members)

Outside ofﬁcers

Number ofpeoplereceiving
Bonuses remuneration

Basic
remuneration

Stock
options

474

341

21

111

10

36

36

―

―

2

16

16

―

―

5

(Millions of yen)

Directors(Millions of yen)

2. Policy regarding decisions on amounts of

Meeting of Shareholders. Where necessary, the remuneration

director remunerationassessment advisory meeting provides advice and makes(1) Director remuneration (excluding Audit & Supervisory

suggestions to the president and CEO about decisions

Committee members)

regarding the assessment and remuneration of directors

Consisting of basic remuneration, stock options, and bonuses,(excluding Audit & Supervisory Committee members).

director remuneration (excluding Audit & Supervisory(2) Audit & Supervisory Committee member remuneration

Committee members) is decided at Board of Directors’

Audit & Supervisory Committee member remuneration ismeetings in accordance with the Company’s internal rules

decided by the Audit & Supervisory Committee in accordanceon director remuneration and based on the duties andwith the Company’s internal rules on director remuneration

responsibilities of each director (excluding Audit & Supervisoryand based on each member’s duties and responsibilities,

Committee members), within totals approved at the General

within totals approved at the General Meeting of Shareholders.

CSR Basic Approaches and Promotion System
Having set its basic CSR approaches as “thoroughimplementation of corporate ethics and compliance,”

CSR Promotion System As of April 1, 2015
President and CEO“improved customer satisfaction,” “environmentally friendly
operations,” “social contribution,” “safety- and health-related

CSR Management Ofﬁce

Audit Ofﬁce

activities,” and “shareholder- and investor-oriented management,” the LINTEC Group conducts CSR activities throughout

Corporate Ethics Committee

Customer Satisfaction Committee

which consist of members from all areas of the Company.
In 2011, LINTEC announced its participation in the United
Nations Global Compact. Over the years to come, we will

Environmental Preservation Committee

on how organizations can operate in a socially responsible

General Affairs &Human Resources Division
Administration Division
Business Administration Division

Social Contribution Committee

continue to promote CSR management in conformity with global
standards—including ISO 26000, which provides guidance

Cost Innovation Ofﬁce
Public Relations Ofﬁce

the Company centered on the CSR Management Ofﬁce, which
reports directly to the president, and its ﬁve subcommittees,

Corporate Strategic Ofﬁce

Safety, Disaster Prevention,and Health Committee

Production Division
Quality Assurance & Environmental
Protection Division
Research & Development Division

way—in such areas as the protection of human rights, themaintenance of labor standards, environmental friendliness,and the prevention of corruption.

Please see our CSR website for detailed information about our CSR activities.
http://www.lintec-global.com/csr/

LINTEC ANNUAL REPORT 201527

≥ OUR GROWTH FOUNDATION

Corporate Ofﬁcers
As of June 24, 2015

Representative Director, Chairman and CEO

Directors, Managing Executive Ofﬁcers

Akihiko Ouchi (Date of Birth: Jan. 2, 1945)

Kazuyoshi Ebe (Date of Birth: Jan. 26, 1953)

Mar. 1967 Joined the Company
Apr. 1994 General Manager, Nagoya Branch Ofﬁce
Jun. 2000 Director, Plant Manager, Tatsuno Plant, Production Div.
Jun. 2004 Representative Director, President
Apr. 2014 Representative Director, Chairman and CEO(current position)

Mar. 1975 Joined the Company
Jun. 2008 Director, Assistant General Manager, Research &Development Div., General Manager, Research Centerand Intellectual Property Dept.
Apr. 2015 Director, Managing Executive Ofﬁcer, AssistantGeneral Manager, Business Administration Div.,
General Manager, Optical Products Operations,
Business Administration Div., and in charge of
Shingu Plant, Production Div. (current position)

Representative Director, President, CEO and COO

Hiroyuki Nishio (Date of Birth: Oct. 18, 1954)
Apr. 1978 Joined the Company
Jun. 2010 Director, General Manager, Corporate Strategic Ofﬁce
Apr. 2014 Representative Director, President, CEO and COO(current position)

Takashi Nakamura (Date of Birth: Dec. 23, 1953)
Apr. 1976 Joined the Company
Jun. 2011 Executive Ofﬁcer, General Manager, Fine & Specialty
Paper Products Operations, Business Administration
Div., and in charge of Converted Products Operations
Apr. 2015 Director, Managing Executive Ofﬁcer, AssistantGeneral Manager, Business Administration Div.
(current position)

Director, Vice President Executive Ofﬁcer, CFO

Hitoshi Asai (Date of Birth: Mar. 7, 1948)
Feb. 1985 Joined the Company
Jun. 2002 Director, Assistant General Manager, Administration
Div., General Manager, Finance & Accounting Dept.
Apr. 2015 Director, Vice President Executive Ofﬁcer, General
Manager, Administration Div. and Corporate
Strategic Ofﬁce (current position)

Gohei Kawamura (Date of Birth: Jan. 12, 1956)
Apr. 1979 Joined the Company
Jun. 2011 Executive Ofﬁcer, Chairman and President, LINTEC(SUZHOU) TECH CORPORATION (seconded)
Jun. 2015 Director, Managing Executive Ofﬁcer, Chairman andPresident, LINTEC (SUZHOU) TECH CORPORATION(seconded) (current position)

Director, Vice President Executive Ofﬁcer

Shigeru Kawasaki (Date of Birth: Dec. 24, 1949)
Apr. 1972 Joined the Company
Jun. 2005 Director, General Manager, Printing & Variable
Information Products Operations, Business
Administration Div.
Apr. 2013 Director, Vice President Executive Ofﬁcer,
General Manager, Business Administration Div.
(current position)

Director, Senior Managing Executive Ofﬁcer

Koji Koyama (Date of Birth: Nov. 5, 1951)
Mar. 1976 Joined the Company
Jun. 2008 Director, General Manager, Production Div.
Apr. 2013 Director, Senior Managing Executive Ofﬁcer,
General Manager, Production Div., and in charge of
Quality Assurance & Environmental Protection Div.
(current position)

28

LINTEC ANNUAL REPORT 2015

Tsunetoshi Mochizuki (Date of Birth: May 12, 1958)
Jan. 1983 Joined the Company
Jun. 2011 Executive Ofﬁcer, General Manager, General Affairs& Human Resources Div., General Manager, General
Affairs & Legal Dept. and Human Resources Dept.
Jun. 2015 Director, Managing Executive Ofﬁcer, General
Manager, General Affairs & Human Resources Div.
(current position)

Directors, Executive Ofﬁcers

Director / Audit & Supervisory Committee Member

Shuji Morikawa (Date of Birth: Dec. 30, 1955)

Toshio Yamamoto (Date of Birth: Dec. 27, 1948)

Apr. 1979 Joined the Company
Apr. 2013 Executive Ofﬁcer, General Manager, Industrial &Material Operations, Business Administration Div.
Jun. 2015 Director, Executive Ofﬁcer, General Manager,
Industrial & Material Operations, Business
Administration Div. (current position)

Apr. 1972 Joined the Company
Oct. 2006 Chief Associate Adviser, Corporate Strategic Ofﬁce
Jun. 2010 Audit & Supervisory Board Member
Jun. 2015 Director / Audit & Supervisory Committee Member(current position)

Outside Directors / Audit & Supervisory Committee Members

Makoto Hattori (Date of Birth: Oct. 12, 1957)

Toru Nozawa (Date of Birth: Mar. 10, 1959)

Apr. 1980 Joined the Company
Apr. 2014 Executive Ofﬁcer, General Manager, Advanced
Materials Operations, Business Administration Div.
Jun. 2015 Director, Executive Ofﬁcer, General Manager,
Advanced Materials Operations, Business
Administration Div. (current position)

Apr. 1981 Joined Jujo Paper Co., Ltd.
Jun. 2014 Outside Audit & Supervisory Board Member of
the Company
Jun. 2014 Director, Executive Ofﬁcer, General Manager,
Corporate Planning Div., and in charge of Subsidiaries
and Afﬁliated Companies, Nippon Paper Industries
Co., Ltd. (current position)
Jun. 2015 Outside Director / Audit & Supervisory Committee
Member of the Company (current position)

Outside Director

Shinichi Sato (Date of Birth: Nov. 13, 1953)

Satoshi Ohoka (Date of Birth: Apr. 24, 1951)

Apr. 1978 Joined Jujo Paper Co., Ltd.
Jun. 2008 Director, Deputy General Manager, Fine & Specialty
Paper Products Sales Div., Nippon Paper Industries
Co., Ltd.
Jun. 2011 Outside Director of the Company (current position)
Jun. 2014 Managing Executive Ofﬁcer, General Manager
of Printing Paper Sales Div., and in charge ofInternational Sales Management & Planning Dept.,
Nippon Paper Industries Co., Ltd. (current position)

Apr. 1975 Joined Japan Development Bank
Apr. 2003 Lecturer, Chuo University, Graduate School ofCommerce (current position)
Jun. 2006 Outside Director, Ryobi Limited (current position)
Jun. 2007 Member of LINTEC Independent Committee(current position)
Jun. 2012 Outside Director of the Company
Jun. 2015 Outside Director / Audit & Supervisory Committee
Member of the Company (current position)

Kanako Osawa (Date of Birth: Dec. 22, 1970)
Apr. 1998 Certiﬁed as an attorney, joined Kajitani Law Ofﬁces(to present)
Oct. 2005 Admitted to practice law in the State of New York, U.S.
Jun. 2015 Outside Director / Audit & Supervisory Committee
Member of the Company (current position)
Jun. 2015 Member of LINTEC Independent Committee(current position)

Managing Executive Ofﬁcers

Executive Ofﬁcers

Seiji Takemura

Takehiko Wakasa

Norio Murata

Masahiro Oshima

General Manager, Cost Innovation Ofﬁce

Plant Manager, Chiba Plant,
Production Div.

General Manager, Osaka Branch Ofﬁce,
Business Administration Div., in chargeof Western Japan

Plant Manager, Agatsuma Plant,
Production Div.

Toshikazu Yamada
Plant Manager, Tatsuno Plant,
Production Div.

Koichi Kimura
General Manager, Quality Assurance &Environmental Protection Div.

Junichi Nishikawa
Plant Manager, Kumagaya Plant,
Production Div.

Shigeru Uematsu
General Manager, Public Relations Ofﬁce

Toru Onishi

Yutaka Iwasaki

Plant Manager, Mishima Plant,
Production Div. and General Manager,
Administration Dept.

General Manager, Converted Products
Operations, Business Administration Div.

Sumio Morimoto
General Manager, Printing & Variable
Information Products Operations, Business
Administration Div.

Tatsuya Tsukida
General Manager, Research &Development Div. and Research Center

LINTEC ANNUAL REPORT 2015

29

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 2015

61

LINTEC CORPORATION
23-23, Honcho, Itabashi-ku,
Tokyo 173-0001, Japanwww.lintec-global.com/

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