Financial Section

Management’s Discussion and Analysis

Revenues and Expenses

Materials Products segment were up 4.2% year on year, to ¥86.3 billion,

In the ﬁscal year under review, consolidated net sales increased 6.5%

and operating income dropped 3.8%, to ¥2.3 billion.

year on year, to ¥203.2 billion. This increase was largely attributable tothe strong sales performance in Asia of adhesive products for seals andElectronic and Optical Products

labels in Printing and variable information products operations, andAdvanced materials operations experienced the effect of burgeoning

signiﬁcant sales growth in both Advanced materials and Optical productsmartphone and tablet demand on semiconductor-related adhesive

operations, due to the effect of burgeoning smartphone and tablet demand.

tapes, for which there was signiﬁcant sales growth in Taiwan andAlthough impacted by rising raw material and fuel prices as a result

Singapore, and semiconductor-related equipment sales were alsoof the yen’s depreciation, gross proﬁt increased 11.9% year on year, tosolid. Coated ﬁlms for multilayer ceramic capacitor (MLCC) production¥45.2 billion, due to such factors as the increased sales and the reduced

also performed ﬁrmly due to the effect of increasing demand forstocking costs at foreign subsidiaries following the yen’s depreciation.

smartphones and tablets.

Selling, general and administrative expenses increased 5.4%, to ¥31.5

In optical products operations, in addition to a recovery in demand forbillion. As a result, operating income increased 30.3%, to ¥13.8 billion.

ﬂat-screen TVs in the latter half of the ﬁscal year under review, LCD-

Due to such factors as an increase in non-operating expenses, income

related adhesive products also recorded strong sales performance due

before income taxes increased 18.9%, to ¥12.9 billion, and income taxes

to the effects of the expanding smartphone and tablet demand.
As a result of the above, net sales in the Electronic and Opticalincreased 39.0%, to ¥4.4 billion, owing to an increase in dividend
income from overseas consolidated subsidiaries. Consequently, net

Products segment were up 9.4% year on year, to ¥79.1 billion, andincome for the ﬁscal year under review amounted to ¥8.5 billion, a

operating income increased 114.2%, to ¥6.8 billion.

year-on-year increase of 10.7%.
Net income per share increased from ¥102.83 in the previous ﬁscal
year to ¥114.22, and return on equity (ROE) increased from 5.6% to 5.8%.

Paper and Converted Products
In Fine and specialty paper products operations, there was favorable
sales performance in color papers for envelopes, due to such special

Performance by Operational Segment

demand as the launch of the Nippon Individual Savings Account (NISA)

Printing and Industrial Materials Products

and a spike in demand prior to a consumption tax hike. In addition,

In Printing and variable information products operations, in addition

construction material papers, recorded solid sales.

to favorable logistic-related sales of adhesive papers and ﬁlms for

In Converted products operations, sales of casting papers forseals and labels in Japan, sales of products for medicines and foodcarbon ﬁber composite materials for aircraft use were favorable; sales

were also solid. Overseas, strong sales performances were recorded

for sports and leisure use were solid. Furthermore, both castingin Asia, centered on China and Southeast Asia.

papers for synthetic leather and release papers for adhesive products
reported solid sales.

In Industrial and material operations, sales of motorcycle- andautomobile-use adhesive products were ﬁrm, centered on Southeast

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

Asia, but sales of window ﬁlms decreased in the United States and Asia.

Products segment were up 5.9% year on year, to ¥37.8 billion, andoperating income dropped 6.7%, to ¥4.6 billion.

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

Operating Income¥ Billion¥ Billion

190.8

Printing andIndustrial Materials
Products+3.5

Paper andConverted Products+2.1

Adjustment
–0.0

203.2
Printing andIndustrial Materials
Products
10.6–0.1

Electronic and
Optical Products
+6.8

13.8

Paper andConverted Products–0.3Electronic and
Optical Products
+3.7
2013

2014

FY

2013

2014 FY

LINTEC ANNUAL REPORT 201423

Financial Section

Management’s Discussion and Analysis

Financial Condition

Cash Flows[Assets]

Cash and cash equivalents as of March 31, 2014, amounted to ¥45.0

Total assets as of March 31, 2014, were ¥225.1 billion, an increase ofbillion, an increase of ¥4.3 billion, or 10.4%, compared with the end of¥9.0 billion compared with the end of the previous ﬁscal year.

the previous ﬁscal year.

The main reasons for the increase were as follows:· Cash and deposits+¥6.6 billion[Cash ﬂows from operating activities]· Trade notes and accounts receivable+¥ 1.7 billion

Cash ﬂows from operating activities decreased ¥3.3 billion compared· Inventories+¥3.0 billion

with the previous ﬁscal year. The main reasons for the decrease were

· Property, plant and equipment, net–¥3.5 billion

as follows:· Income before income taxes+¥2.0 billion[Liabilities]· Increase (decrease) in accrued pension costs–¥0.2 billion

Total liabilities as of March 31, 2014, were ¥72.5 billion, roughly on par· Increase (decrease) in net deﬁned beneﬁt liability+¥0.9 billion

with the end of the previous ﬁscal year. The main components of this· Decrease (increase) in trade notes and accounts receivable–¥3.9 billion

result were as follows:· Trade notes and accounts payable–¥1.8 billion· Decrease (increase) in inventories–¥2.0 billion· Income taxes (paid) refund–¥1.2 billion· Current liabilities–other–¥1.0 billion· Accrued pension costs–¥14.1 billion· Net deﬁned beneﬁt liability+¥16.4 billion[Cash ﬂows from investing activities]
Cash ﬂows from investing activities increased ¥7.0 billion compared[Net Assets]with the previous ﬁscal year. The main reasons for the increase wereNet assets as of March 31, 2014, were ¥152.6 billion, an increase of ¥9.0

as follows:

billion compared with the end of the previous ﬁscal year. The main

· Payments into time deposits–¥ 1.1 billion

reasons for the increase were as follows:· Proceeds from withdrawal of time deposit–¥2.0 billion· Retained earnings+¥5.6 billion· Purchase of property, plant and equipment+¥8.3 billion· Treasury stock–¥5.0 billion· Purchase of intangible assets+¥0.6 billion· Foreign currency translation adjustments+¥9.1 billion· Purchase of shares of subsidiaries+¥0.7 billion· Remeasurements of deﬁned beneﬁt plans–¥ 1.1 billion[Cash ﬂows from ﬁnancing activities]
Cash ﬂows from ﬁnancing activities decreased ¥5.1 billion comparedwith the previous ﬁscal year. The main reason for the decrease was
as follows:· Purchase of treasury stock

Net Assets

143.6

Cash Flows

Share
subscription
rights+0.0¥ Billion

Total
shareholders’equity+0.6¥ Billion

152.6
Minority
interests
+0.1

40.7

Total accumulated
other comprehensive
income
+8.3

2013

24

LINTEC ANNUAL REPORT 2014–¥5.0 billion

2014 FY

2013

Effect of
Increase in cash and cash
exchange rateequivalents from newlychange on cash consolidated subsidiaryand cash+0.0
equivalents
45.0
+3.0

Net cashused ininvesting Net cash
Net cash activities
used inprovided by–7.0
ﬁnancing
operatingactivities
activities
–8.0
+16.3

Decrease in
cash and cash
equivalents resulting
from exclusionof subsidiaries
from consolidation
–0.1
2014

FY

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

Further, world 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, and if

difﬁculties related to cost reductions aimed at maintaining proﬁts andproduct development costs cannot be recovered, it could affect therecovering its share by reﬁning customer services.

Group’s business results.

3. Changes in Raw Material Prices

7. Intellectual Property Rights

The Group uses a great deal of pulp for paper, petrochemical products, and

The Group takes necessary measures to protect intellectual property

other raw materials and fuels. The prices of these materials and fuelsrights in Japan and overseas for various original production technologies

ﬂuctuate in accordance with market conditions, such as inventories

that it has developed. However, legal measures alone do not provide

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

complete protection, possibly preventing the Group from effectively

in light of careful monitoring of market trends. However, a dramatic

protecting the rights it has obtained. Furthermore, in the event thatchange in raw material prices could affect the Group’s business results.

a lawsuit is ﬁled by a third party regarding intellectual property rights
infringement associated with the Group’s products, the Group’s business4. Changes in Foreign Exchange Rates

results could be affected.

The Group conducts foreign currency-denominated procurement andsales overseas as well as ﬁnance transactions between both domestic

8. Signiﬁcant Lawsuits

and overseas Group companies. Therefore, changes in foreign

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

exchange rates could affect the Group’s business results.

to lawsuits or other claims related to product liability, environmental,
or intellectual property rights issues. Lawsuits or claims, depending

5. Overseas Operations

on their content, could affect the Group’s business results.

The Group conducts manufacturing and business operations in markets
worldwide. In these countries, the following events could affect the

9. Legal and Regulatory Systems

Group’s business results.

In the countries in which it conducts business operations, the Group is(1) Political instability or a deterioration in security due to such factors

subject to various legal and regulatory systems, and the Group is working

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

systems are strengthened or changed, the Group’s business activities(3) Infrastructure failures, such as those related to electric power,

could be restricted or the Group’s business results could be affected.

water, or communications

LINTEC ANNUAL REPORT 201425

Financial Section

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

2014

2013

2012

2011

For the year:
Net sales
Operating income% of net sales
Income before income taxes
Net income
Return on equity
Return on assets¥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%

¥212,733
20,8899.8%
19,565
13,62210.9%
9.7%

Per share data (yen):
Net income
Net assets
Cash dividends¥ 114.22
2,100.87
42.00¥ 102.83
1,909.57
34.00¥ 115.26
1,766.60
40.00¥ 180.21
1,715.78
40.00

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¥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)¥10,178(8,237)23,307(9,926)(2,820)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¥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——
210,203132,84762.8%¥132,891
60,46572,42635,18861,888——206,188
130,576
62.9%

76,564,240
4,223

76,564,240
4,270

76,564,240
4,286

76,564,240
4,198¥86,310
79,14352,781¥82,785
72,37252,061¥90,143
73,92553,225¥91,936
81,19355,317

2,290
6,846
4,645

2,380
3,196
4,980

5,213
3,942
4,846

7,990
6,732
6,129

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(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.

26

LINTEC ANNUAL REPORT 2014

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

2010

2009

2008

2007

2006

2005

¥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%

¥171,689
12,370
7.2%
11,838
7,759
9.0%
7.1%

¥ 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¥ 108.76
1,226.28
14.00¥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)¥ 6,216(8,699)
11,163(8,964)(411)¥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%¥ 97,510
54,816
42,694
9,191
56,411429
0.5%
169,590
92,76854.7%

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

76,564,240
3,421

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

LINTEC ANNUAL REPORT 201427

Financial Section

Consolidated Balance Sheets
LINTEC Corporation and its consolidated subsidiaries
March 31, 2014 and 2013ASSETS

Millions of yen

Thousands of
U.S. dollars(Note 1)

2014

2013

2014

Current assets:¥ 51,212¥ 44,603

Trade notes and accounts receivable (Notes 4, 14)

63,48861,791

616,871

Inventories (Note 3)

30,55427,531

296,871

Deferred tax assets (Note 19)

1,922

2,307

18,682

Other

2,308

2,530

22,431

(89)

(259)

(871)

149,396

138,505

1,451,579

Cash and deposits (Notes 12, 14)

Allowance for doubtful accounts
Total current assets$

497,593

Non-current assets:
Property, plant and equipment (Notes 7, 8, 9, 10, 13):
Buildings and structures

63,90961,424620,962

Machinery, equipment and vehicles

112,819

109,006

1,096,189

Land

10,395

10,382

101,005

354

1,023

3,441

10,957

10,844

106,466

Construction in progress
Other

198,436

192,682

1,928,065(136,979)(127,767)(1,330,936)

61,45664,915597,129

2,794

3,047

27,155Investment securities (Notes 14, 15)

3,594

3,370

34,924

Net defined benefit asset (Note 17)

366

―

3,559

Deferred tax assets (Note 19)

5,940

5,047

57,721

Other

1,798

1,334

17,479Allowance for doubtful accounts

(275)

(171)

(2,674)

Accumulated depreciation
Property, plant and equipment, net
Intangible assets (Note 13):
Investments and other assets:

Total investments and other assets

11,4259,580

111,010

Total non-current assets

75,676

77,543735,294¥ 225,073¥ 216,048$ 2,186,874

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

28

LINTEC ANNUAL REPORT 2014

LIABILITIES AND NET ASSETS

Millions of yen

Thousands of
U.S. dollars(Note 1)

2014

2013

2014

Current liabilities:¥ 41,286¥ 43,124$ 401,150

Short-term borrowings (Notes 14, 26)

1,510

1,430

14,671

Accrued income taxes (Notes 14, 19)

2,594

1,931

25,211

73

46

717

Trade notes and accounts payable (Notes 4, 14)

Provision for directors’ bonuses

9,355

10,37890,90454,82056,911

532,656

Accrued pension costs (Note 17)―

14,136―

Provision for environmental measures

132

132

1,288

Net defined benefit liability (Note 17)

16,375―

159,106

Other

1,133

1,297

11,017

Total non-current liabilities

17,641

15,566

171,412

Total liabilities

72,462

72,478704,069

225,430

Other (Notes 14, 16)
Total current liabilities
Non-current liabilities:

Commitments and contingent liabilities (Note 2)
Net assets:
Shareholders’ equity (Note 25):
Common stock:
Authorized: 300,000,000 shares in 2014 and 2013
23,201

23,201

Capital surplus

26,83026,830260,691

Retained earnings

104,771

99,1981,017,986

Issued: 76,564,240 shares in 2014 and 2013

Less: treasury stock, at cost:
4,436,436 shares in 2014 and 1,869,676 shares in 2013
Total shareholders’ equity(7,754)(2,752)(75,340)

147,048

146,478

1,428,767

Accumulated other comprehensive income
Net unrealized holding gain on securities

355

213

3,454

Foreign currency translation adjustments

5,236(3,843)50,880

―

(213)

―

Remeasurements of defined benefit plans (Note 17)(1,110)―(10,785)

Total accumulated other comprehensive income

Adjustment regarding pension obligations of consolidated overseas subsidiaries

4,482(3,843)43,549

Share subscription rights (Note 18)

148

113

1,443

Minority interests

930

822

9,043

Total net assets

152,610

143,569

1,482,805

Total liabilities and net assets¥225,073¥216,048$2,186,874

LINTEC ANNUAL REPORT 201429

Financial Section

Consolidated Statements of Income
LINTEC Corporation and its consolidated subsidiaries
Years ended March 31, 2014 and 2013

Millions of yen

2014

2013

2014

¥203,242
158,005
45,236
31,47013,766¥190,844
150,432
40,411
29,847
10,564$1,974,758
1,535,223
439,534
305,772
133,761

261
59
52
39
399
305
1,118

251
228
50
10
543
220
1,304

2,543
577
513
384
3,877
2,968
10,865

13
379
938
388
1,719
13,165

57
345
339
145
887
10,981

126
3,689
9,117
3,770
16,703
127,923

28
21
49

44
—
44

275
209
485

308
23
—
332
12,883——
189
189
10,836

2,993
232
—
3,225
125,183

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

3,419
(256)
3,162
7,673
(7)
7,681

43,236(536)
42,70082,482(119)82,602ASSETSNet sales
Cost of sales
Gross profit
Selling, general and administrative expenses (Notes 5, 6)
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:
SubsidyGain on sales of noncurrent assets (Note 7)
Total extraordinary gain
Extraordinary loss:
Impairment loss (Note 10)
Loss on sales of noncurrent assets (Note 8)
Loss on retirement of noncurrent assets (Note 9)
Total extraordinary losses
Income before income taxes
Income taxes (Note 19):
Current
Deferred
Total income taxes
Income before minority interests
Minority interests
Net income (Note 25)

Thousands of
U.S. dollars(Note 1)¥¥$

Consolidated Statements of Comprehensive Income
LINTEC Corporation and its consolidated subsidiaries
Years ended March 31, 2014 and 2013

Millions of yen

ASSETS
Income before minority interests
Other comprehensive income (Note 11)
Net unrealized holding gain on securities
Foreign currency translation adjustments
Adjustment regarding pension obligations of consolidated overseas subsidiaries
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.

30

LINTEC ANNUAL REPORT 2014

Thousands of
U.S. dollars(Note 1)

2014

2013

2014

¥ 8,489¥ 7,673$ 82,482

140
9,221
127
9,489
¥17,978

95
5,750
(52)
5,794
¥13,468

1,364
89,5991,240
92,204$174,687

17,848130

13,442
25

173,418
1,269

Consolidated Statements of Changes in Net Assets
LINTEC Corporation and its consolidated subsidiaries
Years ended March 31, 2014 and 2013

Thousands

Millions of yen
Shareholders’ equity

Balance as at April 1, 2012

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¥94,281¥(2,750)¥141,561¥117

Adjustment
regardingpension
Total
Foreign obligations of Remeasure- accumulated
currency consolidated
ments of other comSharetranslation
overseas
defined prehensive subscription
adjustments subsidiaries benefit plansincomerights¥(9,561)¥(160)—¥(9,604)¥94

Minority
interests

Total net
assets¥796¥132,847

Changes during the year:
Cash dividends(2,763)(2,763)(2,763)

Net income

7,681

7,681

7,681

(1)

(1)

(1)

0

0

0

Purchase of treasury stock
Disposal of treasury stock0

Net changes in items other
95

5,717

(52)

—

5,760

19

25

5,805

Total changes during the year

than shareholders’ equity
—

—

0

4,917

(1)

4,916

95

5,717

(52)

—

5,760

19

25

10,722

Balance as at March 31, 2013

76,564¥23,201¥26,830¥99,198¥(2,752)¥146,478¥213¥(3,843)¥(213)—¥(3,843)

¥113

¥822

¥143,569

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

8,501

8,501

8,501

(5,001)(5,001)

(90)

(90)

(5,001)

Purchase of treasury stock(90)

Change of scope of consolidation(2,838)Net changes in items other
142

9,080

213

(1,110)

8,326

35

108

8,469

570

142

9,080

213

(1,110)

8,326

35

108

9,040

¥(7,754) ¥147,048¥355¥5,236—¥(1,110)¥4,482¥148¥930¥152,610

than shareholders’ equity
Total changes during the year

—

—

—

5,572

Balance as at March 31, 2014

76,564¥23,201¥26,830¥104,771(5,001)Thousands

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

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

Commonstock

CapitalsurplusRetainedearnings

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

76,564$225,430$260,691$963,841$(26,740) $1,423,223

Cash dividends(27,578)(27,578)

Net income

82,60282,60282,602(48,599)(48,599)

(879)

(879)

Balance as at April 1, 2013

$2,072$(37,346)$(2,074)—$(37,348)$1,102

Minority
interests

Total net
assets$7,988 $1,394,965

Changes during the year:(48,599)

Purchase of treasury stock(879)

Change of scope of consolidation(27,578)

Net changes in items other
1,382

88,226

2,074(10,785)

80,898340

1,055

82,295

5,544

1,382

88,226

2,074(10,785)

80,898340

1,055

87,839$(75,340) $1,428,767$3,454$50,880—(10,785)$43,549$1,443than shareholders’ equity
Total changes during the year——

Balance as at March 31, 2014

76,564$225,430—

54,144$260,691 $1,017,986(48,599)$9,043 $1,482,805

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

LINTEC ANNUAL REPORT 201431

Financial Section

Consolidated Statements of Cash Flows
LINTEC Corporation and its consolidated subsidiaries
Years ended March 31, 2014 and 2013ASSETSCash flows from operating activities:
Income before income taxes
Depreciation and amortization
Amortization of goodwill
Amortization of negative goodwill
Increase (decrease) in accrued pension costs
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
Loss on valuation of membership
Impairment loss
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
Purchase of investments in capital 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 obligation
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 12)
The accompanying notes are an integral part of the consolidated ﬁnancial statements.

32

LINTEC ANNUAL REPORT 2014

Millions of yen

Thousands of
U.S. dollars(Note 1)

2014

2013

2014

¥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¥ 10,836
10,141
57
(11)
161
—
(1)
(479)
57
(8)
432
4,044
853
(3,231)
(2)
0
—
(889)
21,960495(57)(2,778)
19,619$125,183
97,700
688
(81)
—
9,191
(780)
(3,121)
126
(238)
3,220
1,240
(11,016)(30,477)
(1)
—
2,993
(258)
194,3692,935(127)(38,711)
158,466(9,369)7,927(5,508)
400
(139)
(2)
3
(29)
—
(302)
3
66
(6,952)(8,286)
9,916(13,823)
10
(788)
(2)
4
(775)
(79)
(70)
160
(231)
(13,966)(91,041)
77,025(53,522)
3,894(1,356)
(23)
31
(286)
—
(2,943)30
642(67,549)

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

110(2,759)(1)(226)
0(2,877)
1,927
4,703
36,036—

485(27,605)(48,599)(2,210)—(77,929)
28,94541,933395,840
192(83)¥44,992—¥ 40,739(808)$437,157

Notes to Consolidated Financial Statements
Lintec Corporation and its consolidated subsidiaries
March 31, 2014

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 ¥102.92=U.S.$1, the prevailingexchange rate as of March 31, 2014. 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, 2014 presentation.
(b) Consolidation
The accompanying consolidated financial statements include the accountsof the Company and its 23 significant subsidiaries as of March 31, 2014,
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. Negative goodwill incurredprior to the year ended March 31, 2010 is amortized for 5 years on astraight-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 statements 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 sheets.

(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 sheets 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 sheets 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 straight-line basis isused to attribute expected retirement benefits to periods through theend of the fiscal year.
(2) Method of calculating 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 primarily by the straight-line
method principally over 15 years. Prior service cost is being amortizedby the straight-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 201433

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
Accounting Standard for Retirement Benefits (The Accounting Standards
Board of Japan (ASBJ) Statement No. 26, issued by the ASBJ on May 17,
2012, hereinafter referred to as “Retirement Benefits AccountingStandards”) and Guidance on Accounting Standard for Retirement
Benefits (ASBJ Guidance No. 25, issued by the ASBJ on May 17, 2012,
hereinafter referred to as “Retirement Benefits Guidance”) are applied
from the end of this consolidated fiscal year (excluding provisions set forthin the main clause in Article 35 of Retirement Benefits AccountingStandards and the main clause in Article 67 of Retirement Benefits
Guidance), and the accounting method is changed to the method where
the amount obtained by deducting the amount of plan assets from theretirement benefit obligations is included in the net defined benefit liability
and based on this change, unrecognized actuarial gain and loss andunrecognized prior service cost are included in net defined benefit liability.
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 end of this consolidated fiscal year, the amount affected by such changes is deducted fromthe remeasurements of defined benefit plans of the accumulated othercomprehensive income.
As a result, ¥1,590 million (U.S. $15,456 thousand) is included in the net
defined benefit liability as of March 31, 2014, and the accumulated othercomprehensive income and minority interests decreased by ¥1,024 million(U.S. $9,951 thousand) and ¥21 million (U.S. $213 thousand), respectively.
Due to the application of the Retirement Benefits Accounting Standards,
etc., “adjustment regarding pension obligations of consolidated overseas
subsidiaries” presented previously under a separate heading in the
consolidated balance sheet and the consolidated statements of changes
in shareholders’ equity is included in “remeasurements of defined benefit
plans” from the end of this consolidated fiscal year.
In addition, the impact of this change on per share data can be foundunder Note 25, “Amounts Per Share.”(s) Accounting standards issued but not yet applied• Accounting Standard for Retirement Benefits(ASBJ Statement No. 26, issued on May 17, 2012)• Guidance on Accounting Standard for Retirement Benefits(ASBJ Guidance No. 25, issued on May 17, 2012)(1) Overview
Based on viewpoints to improve the financial reporting and international movement, the standard and guidance have been revised mainly
for the accounting method to calculate unrecognized actuarial gain orloss and unrecognized prior service cost, the calculation method for
retirement benefit obligations and service cost, and the enhancementof disclosure.
(2) Application schedule
The amendment of the method for calculating retirement benefit
obligations and service cost will be adopted from the beginning of theyear ending March 31, 2015.
(3) Effect of application
The effect of applying the standard and guidance is currently underassessment.

2. Commitments and Contingent Liabilities
The Company and its consolidated subsidiaries had unused lines of credit for short-term financing aggregating ¥21,301 million (U.S. $206,975 thousand)and ¥30,488 million at March 31, 2014 and 2013, respectively.
3. Inventories
Finished goods and merchandise, work in process, and raw materials and supplies as of March 31, 2014 and 2013 were as follows:
Thousands of
U.S. dollars

Finished goods and merchandise2014¥ 9,560

2013¥ 8,4062014$ 92,895

Work in process

11,70011,294

113,683

Raw materials and supplies

9,292

7,831

90,292¥30,554¥27,531$296,871

ASSETS

Total

34

Millions of yen

LINTEC ANNUAL REPORT 2014

4. Notes Maturing as of the End of the Fiscal Year
Notes maturing as of the end of the fiscal year are settled on the clearing date. In addition, accounts receivable and payable with due date that is the last day of the
fiscal year are also settled on the clearing date. As the last day of the previous fiscal year was a non-business day of financial institutions, the following amounts ofreceivables and payables maturing as of March 31, 2013 were included in the ending balance.
Millions of yen

Thousands of
U.S. dollars

Trade notes and accounts receivable

2014
¥―

2013
¥5,173

2014$―

Trade notes and accounts payable

―

8,323

―

Millions of yen

Thousands of
U.S. dollars

2013¥ 4,8122014$ 48,980

ASSETS

5. Selling, General and Administrative Expenses
Major items included in selling, general and administrative expenses for the years ended March 31, 2014 and 2013 were as follows:2014¥ 5,041ASSETSTransportation and warehousing expenses

(53)

86

(522)

6,830

6,356

66,362

Provision for retirement benefits

―

545

―

Retirement benefit expenses

507

―

4,932

Provision for allowance for doubtful accounts
Salaries and allowances

80

46

778

1,057

880

10,275

Research and development expenses

6,849

7,263

66,554Other

11,157

9,856

108,411¥31,470¥29,847$305,772

Provision for directors’ bonuses
Depreciation

Total

6. 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, 2014 and2013 were ¥6,849 million (U.S.$66,554 thousand) and ¥7,263 million, respectively.
7. Gain on Sales of Noncurrent Assets
Gain on sales of noncurrent assets was related to sales of buildings and structures for the year ended March 31, 2014.
8. 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.
9. Loss on Retirement of Noncurrent Assets
Loss on retirement of noncurrent assets was principally related to retirement of buildings and structures for the year ended March 31, 2013.
10. 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, 2014:
Major use

Location

Pressure-sensitive adhesive related
products manufacturing equipment

Higashi Agatsuma town, Gunma

Paper related products manufacturing
equipment

Kumagaya city, Saitama

Total

Category

Machinery, equipment and vehicles

Millions of yen

Thousands of
U.S. dollars¥153$1,4941

14

Subtotal¥155$1,508

Machinery, equipment and vehicles¥152$1,484¥308$2,993

Other

Circumstances leading to the recognition of impairment loss in the statement of income for the year ended March 31, 2014 were that above assets areplanned to stop operation or be disposed for the reason of becoming too old and production shutdown.
The impairment loss for these assets was measured based on the net realizable value or the nominal value of the idle assets.

LINTEC ANNUAL REPORT 201435

Financial Section

11. Comprehensive Income
Reclassification adjustment and tax effect of other comprehensive income for the years ended March 31, 2014 and 2013 were as follows:
Millions of yen

Thousands of
U.S. dollars

2014

2013

2014

¥ 196

¥ 137

$ 1,906

(0)

(2)

(1)

196

134

1,905

Tax effect

(55)

(38)

(540)

Net unrealized holding gain on securities

140

95

1,364

9,221

5,750

89,599

―

—

—

9,221

5,750

89,599ASSETSNet unrealized holding gain on securities:
Amount incurred during the fiscal year
Reclassification adjustment
Prior to deducting tax effectForeign currency translation adjustments:
Amount incurred during the fiscal year
Reclassification adjustment
Prior to deducting tax effect

―

—

—

9,221

5,750

89,599Amount incurred during the fiscal year

62

(201)

612

Reclassification adjustment

138

116

1,347
1,959

Tax effectForeign currency translation adjustments
Adjustment regarding pension obligations of consolidated overseas subsidiaries:

Prior to deducting tax effect

201

(84)

Tax effect

(73)

31

(718)

Adjustment regarding pension obligations of consolidated overseas subsidiaries

127

(52)

1,240

¥9,489¥5,794$92,204

Total other comprehensive income

12. Cash and Cash Equivalents
Reconciliation between cash and cash equivalents in the consolidated statements of cash flows and cash and deposits in the consolidated balance
sheets as of March 31, 2014 and 2013 were as follows:

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

2014¥51,212

Millions of yen

Thousands of
U.S. dollars

2013¥44,6032014$497,593(6,219)(3,863)(60,435)¥44,992¥40,739$437,157

Assets and liabilities related to finance lease transactions newly recognized for the years ended March 31, 2014 and 2013, were ¥93 million(U.S. $909 thousand) and ¥177 million, respectively.
13. 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, 2014 and 2013.
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, 2014 and 2013.
The minimum lease payments under noncancellable operating leases as of March 31, 2014 and 2013 were as follows:

ASSETS
Due within 1 year
Due after 1 year
Total

36

LINTEC ANNUAL REPORT 2014

2014
¥144

Millions of yen

Thousands of
U.S. dollars

2013
¥120

2014
$1,400

263

48

2,558

¥407

¥168

$3,95914. 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. In addition, the contract amounts of derivativetransactions described below in Note 16, “Derivatives,” does not represent themarket risk associated with derivative transactions.

2. Estimated fair value and other matters related to financial instruments
Carrying value on the consolidated balance sheets as of March 31, 2014 and 2013 along with their fair value and the variance were shown in the following
table.
Thousands of
U.S. dollars

Millions of yen

2014

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

Carrying value

Estimated
fair value

Variance$ 497,593
616,871$ 497,593
616,871$——

19,447(401,150)(14,671)(25,211)

19,447(401,150)(14,671)(25,211)————

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(7) Derivative instruments

2013
Carrying value

Estimated
fair value

Variance¥44,603
61,791¥44,603
61,791¥——

1,816(43,124)(1,430)(1,931)(15)

1,816(43,124)(1,430)(1,931)
(15)

—
—
—
—
—

Note: Figures shown in parentheses are liability items.
Note 1: Method of computing the estimated fair value of ﬁnancial instruments, securities andderivative instruments(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.
(7) Derivative instruments
Please see Note 16, “Derivatives.”

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

2014

2013

2014

Carrying value

Carrying value

Carrying value¥1,592¥1,554$15,476

The 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

2014

2013

2014

Within 1 year

Within 1 year

Within 1 year

¥ 51,180¥ 44,570$ 497,282

63,488¥114,668

61,791¥106,362

616,871$1,114,154

LINTEC ANNUAL REPORT 201437

Financial Section

15. Marketable and Investment Securities
The carrying value and acquisition cost of other securities as of March 31, 2014 and 2013 were as follows:
Millions of yen

Thousands of
U.S. dollars

2014

ASSETS
Carrying value

Acquisition cost

Unrealized gain
(loss)

Carrying value

Acquisition cost

Unrealized gain
(loss)

Stocks¥1,473

¥ 910

¥563

$14,312$ 8,842$5,470

Bonds

—

—

—

—

—

—

Other

—

—

—

—

—

—

¥1,473

¥ 910

¥563

$14,312$ 8,842$5,470Stocks

¥ 528

¥ 576

¥ (47)$ 5,135$ 5,598$ (463)

Bonds

—

—

—

—

—

—

Other

—

—

—

—

—

—

Subtotal

¥ 528

¥ 576

¥ (47)$ 5,135$ 5,598$ (463)Total¥2,001¥1,486¥515$19,447$14,440$5,006

Description

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

Millions of yen

ASSETS

2013
Carrying value

Acquisition cost

Unrealized gain
(loss)

Stocks¥1,370

¥ 908

¥ 462

Bonds

—

—

—

Other

—

—

—

¥1,370

¥ 908

¥ 462

Stocks

¥ 445

¥ 590

¥(145)

Description

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

Bonds

—

—

—

Other

—

—

—

Subtotal

¥ 445

¥ 590

¥(145)

Total¥1,816¥1,499¥ 317

16. Derivatives
No specific disclosure for derivative transactions has been made as of March 31, 2014 because of its immateriality.
Derivative transactions to which the Company did not apply hedge accounting as of March 31, 2013 were as follows:(Currency related)
Millions of yen

2013
Contract amounts
Total

Over 1 year

Estimated
Fair value

Sell: U.S. dollars (buy Japanese yen)

¥313

¥—

¥ (5)

¥(5)

Buy: Japanese yen (sell U.S. dollars)

207

—

(10)

(10)

¥521

¥—

¥(15)

¥(15)

Nature of transaction

Off-market transactions

Forward exchange contracts to:

Total

Note: Method of computing the estimated fair value is based on information provided by ﬁnancial institutions at the end of the ﬁscal year.

38

Unrealized
gain (loss)

LINTEC ANNUAL REPORT 201417. Retirement Benefits
The Company and its domestic subsidiaries sponsor a corporate pension fund under the Japanese Defined Benefit Corporate Pension Law and retirement plans for their employees. Certain foreign consolidated subsidiaries have defined contribution plans and defined benefit plans.
The following summarizes information related to retirement benefits for the year ended March 31, 2014.
1. Retirement benefit plans(1) Reconciliation statement for the beginning balance and the ending balance of retirement benefit obligations
Millions of yen

Thousands of
U.S. dollars¥36,6632014$356,236

Service cost

1,432

13,919Interest cost

506

4,925

Actuarial gains (losses)(947)(9,202)Retirement benefits paid

ASSETS
Retirement benefit obligations at beginning of the period(1,197)(11,630)

Increase (decrease) from foreign currency translation

272

2,647

Other

56

548

¥36,788$357,444

Millions of yen

Thousands of
U.S. dollars¥18,1652014$176,501

Retirement benefit obligations at end of the period
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 the period
Expected return on plan assets
Actuarial gains (losses)

647

6,289

1,720

16,717

Contributions from the employer

768

7,470

Retirement benefits paid

(734)

(7,139)

Increase (decrease) from foreign currency translation
Plan assets at end of the period

211

2,059

¥20,779$201,897(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 plan

¥ 23,081

2014$ 224,264

Plan assets(20,779)(201,897)

ASSETS

2,301

22,366Retirement benefit obligations of an unfunded pension plan

13,706133,180

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

16,008

155,547

Net defined benefit liability

16,375

159,106

Net defined benefit asset(366)(3,559)¥ 16,008$ 155,547

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

LINTEC ANNUAL REPORT 201439

Financial Section(4) Components of retirement benefit expenses
Millions of yen

Thousands of
U.S. dollars¥1,432

2014$13,919ASSETS
Service cost
Interest cost

506

4,925

Expected return on plan assets(647)(6,289)Amortization of actuarial losses (gains)

670

6,511

Amortization of prior service cost(284)

(2,762)32

320¥1,711$16,625

Millions of yen

Thousands of
U.S. dollars¥(1,397)2014$(13,576)

Other
Retirement benefit expenses for the defined benefit plan
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 the tax effect) recorded in remeasurements of defined benefit plans are as follows:

ASSETS
Unrecognized prior service cost

3,113

30,249¥ 1,715$ 16,672

Unrecognized actuarial losses (gains)
Total(6) 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, 2014 was as follows:
Bonds

2014
40.9%

Stocks44.0%

Cash on hand and in banks

11.7%

ASSETS

3.4%

Other

100.0%

Total

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.
(7) Major actuarial assumptions as of March 31, 2014 were as follows:
Discount rate

2014
Mainly 1.5%

Long-term expected rate of return on plan assets

Mainly 3.5%

ASSETS

40

LINTEC ANNUAL REPORT 2014

2. Defined contribution plan
Some of the consolidated subsidiaries contributed ¥125 million (U.S. $1,223 thousand) to the defined contribution plan.
The following summarizes information related to retirement benefits for the year ended March 31, 2013.
(1) Actuarial present value of projected benefit obligations and unfunded status as of March 31, 2013 were as follows:
Millions of yen

2013¥(36,663)

ASSETS
Actuarial present value of projected benefit obligations
Plan assets

18,165

Unfunded accrued pension costs(18,498)

Unrecognized net actuarial loss

6,043

Unrecognized prior service cost

(1,681)

Net retirement benefit obligation recognized in the consolidated balance sheet(14,136)

Accrued pension costs¥(14,136)

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

(2) Components of pension and severance cost for the year ended March 31, 2013 were as follows:
Millions of yen

2013¥1,258ASSETS
Service cost
Interest cost

667

Expected return on plan assets(559)

Unrecognized net actuarial loss

540

Prior service cost

(244)

Other

109

Total

¥1,771

Notes: i. Employee’s contributions to the corporate pension fund are not included in service cost.
ii. Retirement beneﬁt expenses of consolidated subsidiaries using the simpliﬁed method are included in service cost.
iii. “Other” in the above table is payment of contribution for deﬁned contribution plan.

(3) Major assumptions at the beginning of the year ended March 31, 2013 were as follows:2013
Mainly 1.3%

ASSETS
Discount rate
Expected rate of return on plan assets

Mainly 3.5%

Allocation method of pension costs

Straight-line method

Term of amortization of unrecognized net actuarial loss

15 years

Term of amortization of prior service cost

15 years

18. Stock Option Plan
Components of stock-based compensation expense for the years ended March 31, 2014 and 2013 were as follows:

ASSETS
Cost of sales
Selling, general and administrative expenses

Millions of yen

Thousands of
U.S. dollars

2014
¥ 6

2013
¥ 3

2014
$ 58

29

15

282

The following table summarizes contents of stock options as of March 31, 2014:
The first share subscription rights
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

LINTEC ANNUAL REPORT 201441

Financial Section

The second share subscription rights
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 third share subscription rights
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 fourth share subscription rights
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 fifth share subscription rights
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 sixth share subscription rights
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

42

LINTEC ANNUAL REPORT 2014

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

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 seventh share subscription rights
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 eighth share subscription rights
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 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 following tables summarize the scale and movement of stock options for the years ended March 31, 2014 and 2013:(Non-vested stock options)

Stock options outstanding
at April 1, 2013
Stock options granted
Forfeitures
Conversion to exercisablestock options
Stock options outstandingat March 31, 2014

The first sharesubscription rights

The second sharesubscription rights

The third sharesubscription rights

The fourth sharesubscription rights

The fifth sharesubscription rights

The sixth sharesubscription rights

The seventh sharesubscription rights

The eighth sharesubscription rights

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

—
22,000
—

—

—

—

—

—

—

—

22,000

—

—

—

—

—

—

—

—

The first sharesubscription rights

The second sharesubscription rights

The third sharesubscription rights

The fourth sharesubscription rights

The fifth sharesubscription rights

The sixth sharesubscription rights

The seventh sharesubscription rights

The eighth sharesubscription rights

6,000

5,500

9,300

14,20012,7007,600

15,900

—

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

22,000
—
—

6,000

5,500

9,300

14,20012,7007,600

15,90022,000(Vested stock options)

Stock options outstanding
at April 1, 2013
Conversion from notexercisable stock options
Stock options exercised
Forfeitures
Stock options outstandingat March 31, 2014

The following table summarizes the price information of stock options as of March 31, 2014:

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

The first sharesubscription rights

The second sharesubscription rights

The third sharesubscription rights

The fourth sharesubscription rights

The fifth sharesubscription rights

The sixth sharesubscription rights

The seventh sharesubscription rights

The eighth sharesubscription rights

¥1

¥1

¥1

¥1

¥1

¥1

¥1

¥1

—
2,788

—
1,947

—
1,481

—
1,726

—
1,474

—
1,303

—
1,203

—
1,595

LINTEC ANNUAL REPORT 201443

Financial Section

The fair value of stock options granted during the year ended March 31, 2014 was valued by using the Black Scholes option pricing model with thefollowing assumptions:
The eighth sharesubscription
rights36.035%10 years¥34
0.766%

Volatility
Expected remaining period
Expected dividend
Risk free interest rate

The expected remaining period for stock options is assumed to be the mid-point of the exercise period.
19. 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 38.01% for the years ended March 31, 2014 and 2013. 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 statements of income for the years
ended March 31, 2014 and 2013 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 rate

2014
38.01%

2013
38.01%

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

0.81(9.32)
0.50(7.59)(3.53)
0.60
9.69
—
0.01
29.18%

Millions of yen

Thousands of
U.S. dollars

2013

2014

775
144
122
5,014
—
585
343
155
236
103
687
8,166
(178)
7,987

$ 7,267
1,632
1,440
—
55,501
6,052
2,972
1,237
3,352
2,125
6,223
87,804(1,562)
86,241

(165)
(104)
(472)
(269)
(70)
(1,081)¥ 6,906(1,558)(1,552)(5,182)(5,106)(1,448)(14,848)$ 71,393

2. The significant components of deferred tax assets and liabilities as of March 31, 2014 and 2013 were as follows:

2014

ASSETS
Deferred tax assets:
Accrued bonuses
Accrued enterprise taxes
Operating loss carryforwards
Accrued pension costs
Net defined benefit liability
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
Other
Net deferred tax assets

44

LINTEC ANNUAL REPORT 2014

¥

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

(160)
(159)
(533)
(525)
(149)
(1,528)¥ 7,347¥

Note: The net deferred tax assets as of March 31, 2014 and 2013 were included in the following items on the consolidated balance sheets:
Millions of yen

Thousands of
U.S. dollars

Current assets-Deferred tax assets

2014¥1,9222013¥2,307

2014$18,682

Noncurrent assets-Deferred tax assets

57,721ASSETS

5,940

5,047

Current liabilities-Other

29

32

283

Noncurrent liabilities-Other

486

416

4,727

3. Adjustments of deferred tax assets and liabilities due to the change of statutory tax rate
The “Act for the Partial Amendment of the Income Tax Act” was promulgated on March 31, 2014, according to which the Special Reconstruction
Corporation Tax will no longer be imposed from the fiscal year beginning on April 1, 2014 and onward. As a result, the effective statutory tax rate used tomeasure the Company’s deferred tax assets and liabilities was changed from 38.01% to 35.64% for the temporary differences expected to be realized or
settled during the consolidated fiscal year starting from April 1, 2014.
Due to the change, the net amount of deferred tax assets decreased by ¥117 million (U.S. $1,142 thousand), and deferred income taxes increased by¥117 million (U.S. $1,142 thousand) for the year ended March 31, 2014.
20. Business Combinations
There is no business combination for the year ended March 31, 2014.
21. Asset Retirement Obligations
There is no asset retirement obligation as of March 31, 2014 and 2013.
22. Rental Property
No specific disclosure for rental property has been made as of March 31, 2014 and 2013 because of its immateriality.
23. 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 the performance 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 201445

Financial Section

3. Information on sales and income (loss), assets, and other items by reportable segment for the years ended March 31, 2014 and 2013 are outlined asfollows:
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¥(16)¥ 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¥—¥203,242

Others
70

—

—

70

70

Thousands of U.S. dollars

2014

ASSETS
Printing andIndustrial Materials
Products

Electronic and
OpticalProducts

Paper andConverted
Products

Total$838,237$768,941$367,579$1,974,758

379

37

145,258

145,675(145,675)—$838,617$768,979$512,837$2,120,433$(145,675)$1,974,758$ 22,259$ 66,524$ 45,134$ 133,919$(157)$ 133,761

Depreciation and amortization$ 30,790$ 39,541$ 27,368$

97,700$—$97,700

Amortization of goodwill

$

$

$

$

688

$

—

$

688

Adjustments

Consolidation$$1,974,758

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

Others688——

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 statements 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

2013

ASSETS
Printing andIndustrial Materials
Products

Electronic and
OpticalProducts

Paper andConverted
Products

Total¥82,761¥72,352¥35,730¥190,844

24

19

16,33016,375(16,375)—¥82,785¥72,372¥52,061¥207,219¥(16,375)¥190,844¥ 2,380¥ 3,196¥ 4,980¥ 10,557¥

7¥ 10,564

Depreciation and amortization¥ 3,087¥ 4,308¥ 2,745¥ 10,141¥—¥ 10,141

Amortization of goodwill

¥

¥

¥

¥

¥

—

¥

Adjustments

Consolidation

Net sales
Net sales to external customers
Intra-segment sales and transfers
Total
Segment income¥—¥190,844

Others
57

—

—

57

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 statements 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.

46

LINTEC ANNUAL REPORT 2014

57

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

2014

ASSETS
Sales

Japan

Asia

Others

Total

Japan

Asia

OthersTotal¥130,149¥63,023¥10,069¥203,242$1,264,569$612,353$97,835$1,974,758

46,592

12,8552,009

61,456452,701

124,905

19,522

597,129

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

2013
Japan

Asia

OthersTotal¥126,500¥54,953¥9,390¥190,844

51,436

11,635

1,843

64,915

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

2014

2013
Sales

2014

¥25,103¥20,638$243,914

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

2014

ASSETS

Impairment loss

Printing andIndustrial Materials
Products

Electronic and
OpticalProducts

Paper andConverted
Products

Total

Consolidation

¥—

¥—

¥—

¥—

¥308

Thousands of U.S. dollars

2014

ASSETS

Impairment loss

Printing andIndustrial Materials
Products

Electronic and
OpticalProducts

Paper andConverted
Products

Total

Consolidation

$—

$—

$—

$—

$2,993

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.

There is no impairment loss on noncurrent assets for the year ended March 31, 2013.

LINTEC ANNUAL REPORT 201447

Financial Section

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

2014

ASSETS

Unamortized amount of goodwill

Printing andIndustrial Materials
Products

Electronic and
OpticalProducts

Paper andConverted
Products

Total

Consolidation

¥—

¥—

¥—

¥—

¥158

Thousands of U.S. dollars

2014

ASSETS

Unamortized amount of goodwill

Printing andIndustrial Materials
Products

Electronic and
OpticalProducts

Paper andConverted
Products

Total

Consolidation

$—

$—

$—

$—

$1,538Notes: i. Since the Company and its consolidated subsidiaries disclose the same information of the amount of amortization of goodwill in its 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

2013

ASSETS

Unamortized amount of goodwill

Printing andIndustrial Materials
Products

Electronic and
OpticalProducts

Paper andConverted
Products

Total

Consolidation

¥—

¥—

¥—

¥—

¥192

Notes: i. Since the Company and its consolidated subsidiaries disclose the same information of the amount of amortization of goodwill in its 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, 2014 and 2013.
24. Related Party Transactions
The Company and its consolidated subsidiaries have transactions with NP Trading Co., Ltd., a subsidiary of Nippon Paper Group, for the years ended
March 31, 2014 and 2013. The transactions between the companies for the years were as follows:
Millions of yen

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

Thousands of
U.S. dollars

2014

2013

2014

¥11,200¥10,269$108,831

6,577

6,159

63,909Millions of yen

Thousands of
U.S. dollars

2014

2013

2014

Trade notes and accounts receivable¥3,913¥4,679$38,029

Trade notes and accounts payable

2,305

2,714

22,397

9

5

94

Yen

U.S. dollars

At year-end

Other liabilities

These related party transactions took place on terms similar to those with third parties.
25. Amounts Per Share
The amounts per share of net assets and net income as of and for the years ended March 31, 2014 and 2013 were as follows:
2014

2013

2014

¥2,100.87¥1,909.57$20.41

Net income (basic)

114.22102.83

1.11

Net income (diluted)

114.09102.74

1.11

ASSETSNet assets

48

LINTEC ANNUAL REPORT 2014

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

Thousands of
U.S. dollars

2014

2013

2014

¥ 8,501—¥ 8,501
74,427¥ 7,681—¥ 7,681
74,695$82,602—$82,60274,427¥¥$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)]

—
84
[84]

—
65
[65]

—
84
[84]

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

Millions of yen

2014

2013

2014

¥152,610
1,079
[148]
[930]
¥151,530
72,127¥143,569
935
[113]
[822]
¥142,634
74,694$1,482,805
10,487[1,443][9,043]$1,472,317
72,127ASSETS
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 current ﬁscal year decreased by ¥14.20 (U.S. $0.14).

26. Short-Term Borrowings, Long-Term Debt 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 0.35% to 0.72% at March 31, 2014 and from 0.36% to 0.82% at March 31, 2013.
Short-term borrowings as of March 31, 2014 and 2013 consisted of the following:Thousands of
U.S. dollars

Millions of yen

ASSETS

2014

2013

2014

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

¥1,510—¥1,510¥1,430—¥1,430$14,671—$14,671

Millions of yen

Thousands of
U.S. dollars

Other interest-bearing debts as of March 31, 2014 and 2013 consisted of the following:

ASSETS
Short-term lease obligation
Long-term lease obligation

2014

2013

2014

¥183
503

¥212
626

$1,786
4,890

Planned repayment amounts after the balance sheet date (March 31, 2014) for long-term debt and lease obligation are as follows:
Millions of yen

Thousands of U.S. dollars

2014

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

¥156

¥132

¥104

¥72

$1,524$1,290$1,019$704

27. Subsequent Event
The following distribution of retained earnings was approved at a meeting of the board of directors held on May 8, 2014.
Millions of yen

Thousands of
U.S. dollars¥1,514$14,7172014

ASSETSCash dividends (¥21 per share)

LINTEC ANNUAL REPORT 201449

Financial Section

Management’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, 2014 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 13 consolidated subsidiaries.
We excluded 11 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, 2013. 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, 2014 was effective.

50

LINTEC ANNUAL REPORT 2014

Report of Independent Auditors

LINTEC ANNUAL REPORT 201451

Financial Section

Report of Independent Auditors

52

LINTEC ANNUAL REPORT 2014