The Next Step

ForwardLINTEC Annual Report 2018
For the fiscal year ended March 31, 2018

Company Motto

Sincerity and Creativity

Mission Statement
The company name LINTEC derives from “linkage” and “technology,” two key components of our business philosophy,
which emphasizes 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, andto a brighter future for society as a whole. And underpinning all of our business activities is an unwaveringemphasis on “Sincerity and Creativity,” the twin values enshrined in our company motto.

For tomorrow we build today

Editorial Policy
This report is meant to help shareholders and other investors
understand the LINTEC Group and its quest to achieve sustainable growth and contribute to the further development of society
as a whole. Based on the International Integrated Reporting
Framework released by the International Integrated Reporting
Council in December 2013, in addition to performance and financial information, this report also introduces the technologicalcapabilities, human resources, and other “intangible assets”
accumulated by the LINTEC Group that are of the variety not listed
in the financial statements.

IR Website

CSR Website

http://www.lintec-global.com/ir/

http://www.lintec-global.com/csr/

Information that could not be contained within this report isavailable on the following websites.
REPORTING PERIODThis report covers the period from April 1, 2017 to March 31, 2018.
However, some of the information includes content from April 2018 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 or definitively assure the realization of future numerical targets and policies. Actual business results, etc., may vary due to various factors and circumstances.

Contents
STRATEGY

COVER STORYMANAGEMENT STRATEGY	LINTEC’s History .......................................................... 2

A Message from the President .................................. 12

	LINTEC’s Distinct Features ......................................... 4
LINTEC’s Business Model ........................................... 6

OVERVIEWOVERVIEWSPECIAL FEATURE
LINTEC’s Semiconductor-Related Business ............ 18

Performance Highlights ................................................. 8

CORPORATE VALUE INITIATIVES

Major Activities in FY2018 ............................................ 10

LINTEC’s Value Creation............................................ 20
At a Glance ................................................................. 22
Research and Development....................................... 30

STRATEGYESG
ESG Initiatives ............................................................ 32	 Environment ............................................................... 34
	 Society ........................................................................ 37
Governance ................................................................ 40
A Message from an Outside Director......................... 47
Corporate Officers...................................................... 48

ESG

THE BASE THAT SUPPORTS GROWTH

FINANCIALINFORMATIONFINANCIAL SECTIONManagement’s Discussion and Analysis ................... 51
	Operating Risks .......................................................... 53
Financial Summary .................................................... 54
Consolidated Balance Sheet ..................................... 56
	Consolidated Statement of Income ........................... 58
Consolidated Statement of Comprehensive Income.... 58

FINANCIAL INFORMATION	 Consolidated Statement of Changes in Net Assets...... 59
	Consolidated Statement of Cash Flows...................... 60
Notes to Consolidated Financial Statements ........... 61	Management’s Report on Internal Control over		Financial Reporting ................................................. 84
Report of Independent Auditors................................. 85
Investor Information ..................................................... 87

LINTEC ANNUAL REPORT 2018

1

COVER STORYLINTEC’s History

LINTEC’s

New Growth Stage
Since our founding in 1927 as FUJI SHOKAI, we have steadily grown through constantdevelopment of technologies and products that anticipate the needs of the times. In 1990,
three companies merged to form LINTEC Corporation, which began stepping up globalization.
Today, LINTEC products play important roles in a wide range of countries.
Net Sales¥102.6 billion

FSK CORPORATION+SHIKOKU PAPER CO., LTD.

+

SOHKEN KAKO CO., LTD.

Apr. 1990

LINTEC Corporation
Formed through themerger of three companies

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

Accumulating Technology Capabilities and Expanding Our Business Field
Established in 1927 as a manufacturer of gummed tape for packaging, FUJI
SHOKAI significantly expanded its businesses due to the demand for cardboard
boxes, which were rapidly being used as a replacement for wooden boxes.
In 1960, we began manufacturing and selling adhesive papers for labels, therebybuilding the foundations of our current mainstay businesses.
From the 1970s, the Company started developing new markets for adhesive
products, such as highly durable adhesive films used for motorcycles, automobiles, and signboards and window films that are attached to the glass surfacesof buildings and other structures. After changing its name to FSK CORPORATION
in 1984, the Company entered the semiconductor-related product field in 1986.
LINTEC Corporation came into being in 1990 through a three-way merger withSHIKOKU PAPER CO., LTD. and SOHKEN KAKO CO., LTD. This led to significant
extension of our business field into upstream areas including specialty papers
as well as release papers and films.

Time of establishment

Gummed tapes

Main Highlights

Apr. 1927

1960

Oct. 1934

Oct. 1984

FUJI SHOKAI established in Sugamo, Tokyo
Started production and sales of gummed tapefor packaging
The Company reorganized to establish
FUJI SHIKO CORPORATION

Started production and sales of adhesive papers
for labels and later commenced production andsales of adhesive films
Company name changed to FSK CORPORATION

1986

Developed UV curable dicing tape and madefull-scale entry into the semiconductor-related
product field
2

LINTEC ANNUAL REPORT 2018

Sep. 1987

Acquired U.S. window film manufacturer
MADICO, INC.

1991

Made full-scale entry into LCD-related product field

May 1994

PT. LINTEC INDONESIA established as
manufacturing base for adhesive products
for labels

2001

2002

¥257.0 billion¥249.0 billion

47.6%

GlobalRecession

2000

2001

2002

LINTEC INNOVATION PLAN
(LIP)-2019(April 2017-March 2020)

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

STRATEGY

13.0%

1999

Medium-TermBusiness Plan
Effects of
the Great East
Japan Earthquake
and European
Debt Crisis

Overseas
Sales Ratio

OVERVIEW

8¥270.0 billion

2015

2016

2017

2018

2019

2020

(Forecast) (Target)(Fiscal year ended / ending March 31)

Following the merger, LINTEC entered the LCD-related product field in 1991.
Further, from the mid-1990s the Company became proactive in setting up overseas bases. Globalization has progressed further since the turn of the century
with a more rapid increase in the number of manufacturing and sales bases,
principally in Asia. In 2016, we acquired three companies* in Europe and theUnited States and began a new growth phase. Meanwhile, regarding the strengthening of R&D capabilities, a new building for the research center that is currently
our core R&D facility was completed in 1995. In 2015, next to the research center,
we built the Advanced Technology Building, which includes leading-edge testing
facilities. We are working continually to accelerate product development and toestablish new technologies with a view to further growth.

ESG

Globalization and Reinforcement of R&D Capabilities Usher
in a New Growth Phase

Advanced Technology
Building

Dec. 1995

New building for Research Center constructedin Saitama Prefecture

Jun. 2002

LINTEC (SUZHOU) TECH CORPORATION in China
established as manufacturing base for adhesive
products for labels and casting papers for synthetic leather

Sep. 2004

LINTEC KOREA, INC., established as manufacturingbase for electronics-related products

Jun. 2011

LINTEC (THAILAND) CO., LTD., established as
manufacturing base for adhesive products
for labels

Jan. 2015

LINTEC ASIA PACIFIC REGIONAL
HEADQUARTERS PRIVATE LIMITED in Singapore
established as regional headquarters forSoutheast Asia

FINANCIAL INFORMATION*T hree companies: M
 ACTAC AMERICAS, LLC and VDI, LLC in the United States and LINTEC GRAPHIC FILMS LIMITED,
currently LINTEC EUROPE (UK) LIMITED, in the United Kingdom

MACTAC AMERICAS, LLC

May 2015

Advanced Technology Building constructedin Saitama Prefecture

Oct.–Dec. 2016

Acquired three companies in Europe and theUnited States, including manufacturer of adhesive
products for labels MACTAC AMERICAS, LLC

LINTEC ANNUAL REPORT 20183

COVER STORYLINTEC’s Distinct Features

Cultivated Technologies Realize

Our Strengths
We are drawing on the original technological capabilities we have built up over the years to establish a firm
position as a leading company in adhesive products and specialty papers. Based on our philosophy of “customer
first” and innovative new ideas, we will continue to work on developing high-value-added products we can offer
to customers to meet their diverse range of needs.

1

LINTEC’s Competitive Advantages— Integrated Production System for Adhesive Products and Provision of Comprehensive Solutions
LINTEC’s expertise extends beyond adhesives development and coating to a wide variety of proprietary technologies in the
manufacture of base paper for release papers, the development of release materials and related coating processes, andfacestock improvement coating. The Group has thus built an integrated production system for adhesive products. The
resulting ability to manufacture and procure release papers and films for adhesive products in-house gives us advantages
in quality, costs, and delivery lead times. Additionally, by combining different processing technologies, we are able to create
adhesive products for use in a diverse range of fields. In areas other than adhesive products, we bring to market large
numbers of unique products designed for use with upstream technologies, such as industrial-use release papers andfilms and specialty papers.
We also develop and manufacture equipment that fully leverages the properties of our adhesive products. This includes
labeling machines that automatically apply labels to packaging and equipment used in semiconductor production.
Comprehensive solutions incorporating materials and such equipment are another advantage of the LINTEC Group.

Integrated Production System for Adhesive Products
Surface Improvement Processing

Adhesive Development andCoating, and Bonding

Surface Improvement
Facestock

Papermaking

Release Agent
Development and Coating

Adhesive

Release Agent

Base Paper

Base Paper / Film

Related Equipment
Development

Printing
and Industrial
Materials
Products

4

LINTEC ANNUAL REPORT 2018

Electronic
andOpticalProducts

Paper
andConverted
Products

Record High

28

¥20.9

¥25.0 billion¥23.0 billion

billionconsecutive years ofoperating income¥20.1 billion
OVERVIEW

Medium-TermBusiness Plan
LIP-2019

Merger(April 2017-March 2020)¥4.7 billion

STRATEGY

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

(Forecast)(Target)(Fiscal year ended / ending March 31)

2

Stable Business Structure That Is Not Susceptible to Market Volatility
in Any Single Industry
In recent years, the earnings drivers among LINTEC’s diverse range of products have been products for thesemiconductor, electronic component, and LCD industries, which have undergone rapid market growth.
Meanwhile, sales and profit have been comparatively stable in relation to mainstay adhesive products forlabels used for food, daily necessities, pharmaceuticals, automobiles, and consumer electronics, and these
ESG

products can be seen as foundation businesses that firmly underpin our earnings.
The production of a wide range of products in growth and foundation businesses and sales to a broad range
of industries without reliance on any particular industry are the distinguishing characteristics of our businessstructure. The resulting steady earnings that are not susceptible to market volatility in any single industry are
one of our strengths.
Daily
Necessities

Stationery

Pharmaceuticals

Food

Printing

Logistics

Automobiles

Semiconductors

Architecture /Interior

Advertisement

Electronic
Components

FINANCIAL INFORMATION

ConsumerElectronics

LCDs

LINTEC ANNUAL REPORT 2018

5

COVER STORYLINTEC’s Business Model

Business Model That

Realizes Sustainable Growth
The numerous assets amassed by the LINTEC Group since the time of its founding are vital capital for our businessactivities and the driving force in our manufacturing as we respond to wide-ranging social needs. We will continue toreturn the resulting profits to our stakeholders and invest with an eye to the future as we seek to create new value.

Assets Buildup

CultivatedTechnologies
P.30-31

Comprehensive
Product Supply
System inJapan
and Overseas

Diverse Human
Resources andCorporate
CultureSolid
Financial Base
P.50-83

Relationship ofTrust with
Stakeholders

P.37-39

INPUT
Business Segments

P.22-29

Printing and Industrial Materials Products

Business Segment

Printing & Variable Information
Products Operations

P.22-29

Industrial & Material Operations

Electronic and Optical Products
Advanced Materials Operations

Production

Optical Products Operations

Paper and Converted Products
Fine & Specialty Paper Products
Operations

LINTEC ANNUAL REPORT 2018

Sales

Converted Products Operations

Corporate Governance6

Research &Development

P.40-49

OUTPUT

Strategy for Growth

Quantitative
Targets

OVERVIEW

Basic Policy

Deepening innovation aimed at driving new growth
Net Sales

Operating Income¥270.0 billion¥25.0 billion

Operating Profit MarginMore than

9%

ROE

More than

9%

Accumulation & Advancement
STRATEGY

Main Products

Social Value

Employees

ESG

Plants /Facilities

PROFIT
Shareholders

Communities
FINANCIAL INFORMATION

Solves our customers’ issues withwide variety of products

LINTEC ANNUAL REPORT 20187

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

FINANCIAL HIGHLIGHTSNet Sales¥249.0 billion

Operating Income / Operating Profit Margin¥ Billion

249.0

250

Operating Income¥20.1 billion

200
150

Operating Profit Margin

8.1 %

100
50
0

2014

2015

2016

2017

¥ Billion

%

25

15

15

12
9

8.1

10

6

5

3

0

2018

20.1

20

2014

2015

2016

2017

0

2018

Operating Income
Operating Profit Margin (right)

Profit Attributable to Owners of Parent / Return on Equity (ROE)
Profit Attributableto Owners of Parent¥11.3 billion¥ Billion

%

15

10

12

11.3 8
6.2

9

6

ROE

6.2 %

6

4

3
0

2014

2015

2016

2017

2018

Net Income per Share / Cash Dividends per Share¥¥

Net Income per Share¥156.02
Cash Dividends per Share

¥66

200

100

160

156.02 80

40

2

40

20

0

0

Total Assets / Net Assets¥292.7 billion
Net Assets¥186.4 billion¥ Billion

292.7

300
240

186.4

180

2015

2016

2017

2018

0

Net Income per Share
Cash Dividends per Share (right)

Net Cash Provided byOperating Activities¥26.8 billion¥(7.5) billion

2014

2015

Total Assets
Net Assets

2016

2017

2018

¥ Billion

40

26.8

20
0

Net Cash Used in
Investing Activities

120

0

LINTEC ANNUAL REPORT 2018

2014

Cash Flows

60

8

60

80

Profit Attributable to Owners of Parent
ROE (right)

Total Assets

66

120

Net Cash Used in
Financing Activities¥(6.4) billion(7.5) (6.4)

–20
–40
–60

2014

2015

2016

2017

2018

Net Cash Provided by Operating Activities
Net Cash Used in Investing Activities
Net Cash Provided by (Used in) Financing Activities

P. 54

CSR Website

Financial Summary

http://www.lintec-global.com/csr/

Please see pages 54–55.

NON-FINANCIAL HIGHLIGHTS
Capital Expenditures¥ Billion

4,794  

15
12

10.1

3,000

6

2,000

3

1,000

2014

2015

2016

2017

0

2018

¥ Billion

12

9.0

9

150

50

2016

2017

2018

186

200

3

2015

2017

250

100

2014

2016

Thousand tons

6

0

2015

CO2 Emissions

186 thousand tons

15

2014

STRATEGY

Depreciation and Amortization (Excluding amortization of goodwill)¥9.0 billion

4,000

9

0

4,794

5,000

OVERVIEW¥10.1 billion

Number of Employees

0

2018

2014

2015

2016

2017

2018
ESG

R&D Expenses¥7.9 billion

Toluene Handling Volume / Toluene Emission Volume¥ Billion

Toluene Handling Volume

10

7.9

8

Toluene Emission Volume

482 tons

4
2

7,752

8,000
6,000

FINANCIAL INFORMATION

6

7,752 tons

Tons
10,000

4,000
2,000

482
0

2014

2015

2016

2017

2018

0

2014

2015

2016

2017

2018

Toluene Handling Volume
Toluene Emission Volume

LINTEC ANNUAL REPORT 20189

Major Activities
in FY2018
CORPORATE
Apr. 1
Began new three-year
medium-term business plan,
LIP-2019

Sep. 7

Sep. 25-28

Participated in the 2017 Mizuho
Investment Conference Tokyo

Exhibited various new
products at Labelexpo
Europe 2017 in Belgium,
the world’s largest labelrelated exhibition

Jun. 22
Announced rationalization of
the business management of
U.S. manufacturing subsidiary
MADICO, INC.

2017
May

Apr.

Jun.

Jul.

Aug.

Sep.

PRODUCTS
May 1

Jul. 10

Launched new-model
equipment for the application of surface protective
tapes to semiconductor
wafers that realizes high 		performance and	saves space

Launched new-model automatic
labeling machine with a simpler,
more practical design

May 1
Added deepest-color-type automotive window film to WINCOS
Automotive Film lineup

10

LINTEC ANNUAL REPORT 2018

Focus 1

Focus 2

Exhibited at Labelexpo Europe 2017

We participated in several IR conferences sponsored by securities companies

added products in a large 450m2 booth

We participated in three IR conferences held by securities

immediately beside the venue’s main recep-

companies in Tokyo at which domestic and internationaltion desk. Many people visited our booth andinstitutional investors gathered. In the meetings we held

the exhibition helped us in our effort towith many overseas investors, President Nishio explained

expand sales and enhance our brand power

LINTEC’s business strategy and management policy inin Europe and the rest of the world.

detail, helping to promote understanding of the Company.

Mar. 8Dec. 1
Merged LINTEC�s Hiratsuka Officeand FUJI-LIGHT, INC., to establish
SHONAN LINTEC KAKO, INC., as aslitting and processing subsidiary

Feb. 28

Merged sales subsidiary
LINTEC BKK PTE LIMITEDwith manufacturing subsidiary LINTEC (THAILAND)
CO., LTD. in Thailand

Participated in SMBCNIKKO Japan Series,
Executive ConferenceTokyo 2018

SMBC NIKKO Japan Series, Executive
Conference Tokyo 2018

Mar. 16 and 29
Held company
briefings forindividual investors in Osakaand Tokyo

STRATEGY

Nov. 1

Participated in
Daiwa Investment
Conference Tokyo
2018

OVERVIEW

We exhibited many original high-value-

Mar. 22
Announced abolition of “rulesof large-scale purchase” inrelation to large-scale purchasesof the Company’s shares

2018
Nov.

Added to lineup of anti-tamper
label materials by launching
non-transferable type

Jan.

Feb.

Mar.

Nov. 21Jan. 19

Added to lineup of oil-tolerantlabelstock by launchingtransparent type

Revamped the lineup of PAROI
decorative films for interiors,
which are usable for commercial facilities, offices, hotels,
and a wide range of otherapplications

FINANCIAL INFORMATION

Oct. 20

Dec.

ESG

Oct.

Dec. 1
Launched WINCOS Paint
Protection Film, which protects the paintwork of automotive bodies from dirt andscratching

LINTEC ANNUAL REPORT 2018

11

MANAGEMENT STRATEGY

A Message from the President

A Year to
Accelerate Innovation

Hiroyuki Nishio
Representative Director
President, CEO and COO

12

LINTEC ANNUAL REPORT 2018

Since April 2017, we have been advancing initiatives under our medium-termbusiness plan, LINTEC INNOVATION PLAN 2019 (LIP-2019), which continues throughthe fiscal year ending March 31, 2020. Aiming to achieve its final quantitative
OVERVIEW

targets, we are accelerating innovation—the plan’s overriding theme—and moving
forward with key initiatives.

Performance Review—Year Ended March 2018
We recorded increases of more than 20%
in both net sales and operating income.

Net sales reached a record high due to contributions from the three companies in Europe and thefirst fiscal year—the global economy saw economic

semiconductors and electronic components. Operating

expansion in the United States as corporate earnings

income increased more than 20.0%. However, ourand consumer spending improved. Europe’s economy

business results revealed issues. From a businessalso continued recovering modestly. Further, China

portfolio perspective, our results were imbalanced.

and other parts of Asia showed signs of economic

While businesses related to electronics accounted forrecovery due to increases in internal demand andthe majority of earnings, businesses that normally

exports. In Japan, meanwhile, the economy trended

generate stable earnings flagged against a backdrop

steadily overall thanks to better corporate earningsof fiercer selling-price competition and higher fuelstemming from robust overseas demand, and to aand raw material prices. Further, the performances ofmoderate pickup in consumer spending, which

certain overseas Group companies remained lacklus-

resulted from a more favorable job market.

ter, and as a result of recording extraordinary loss

In these business conditions, partly due to contributions from three companies in Europe and theESG

and a favorable performance by businesses related to

STRATEGY

United States that were acquired at the end of 2016
In the fiscal year ended March 31, 2018—LIP-2019’s

related to these companies, profit attributable toowners of parent declined.

United States that were acquired at the end of 2016,
the LINTEC Group achieved year-on-year increases of
20.9% in consolidated net sales, to ¥249.0 billion; and21.1% in operating income, to ¥20.1 billion. Profit
attributable to owners of parent declined 1.7% year
extraordinary loss of provision for business structure
improvement of ¥1.0 billion in relation to U.S. manufacturing subsidiary MADICO, INC., and goodwill
impairment loss of ¥1.0 billion incurred by U.S.
functional film manufacturer VDI, LLC, which we
acquired. The operating profit margin was 8.1%, andROE was 6.2%.

%

10
8
6

8.1
6.8

7.2

5.8

8.4

8.1

8.1

6.4

6.6

6.2

FINANCIAL INFORMATIONon year, to ¥11.3 billion, due to the recording in

Operating Profit Margin / ROE

4
2
0

2014

2015

Operating Profit Margin
ROE

2016

2017

2018

(Fiscal year ended March 31)

LINTEC ANNUAL REPORT 201813

MANAGEMENT STRATEGY

A Message from the President

LINTEC INNOVATION PLAN 2019 (LIP-2019)
Period: From April 2017 to March 2020
Basic Policy: Deepening innovation aimed at driving new growth
Quantitative Targets: M ajor numerical targets in the final year of LIP-2019, the fiscal year ending March 31, 2020
(on a consolidated basis)
Net Sales¥270.0 billion

Operating Income¥25.0 billion

Operating Profit Margin

ROE

More thanMore than

9%9%

Key Initiatives 
1 Strengthening of regional strategy(1) Increase in the domestic share and development of new markets and new demands(2) Strategic investment and business expansion in the Asian region(3)	Expansion of the existing fields in Europe and America and the pursuit of synergies with theacquired subsidiaries

2 Creation of new value(1) Creation of differentiated products which exceed customer needs(2) Development of next-generation products anticipating market changes

3 Bolstering the corporate structure(1) Ensuring soundness of the Group companies and continual increase in earnings(2) Promotion of cross-sectional operational reforms(3) Further promotion of cost structure reforms

4 Activities for realizing a sustainable society(1) Promotion of business activities conducive to solving social concerns(2)	Promotion of work-style reforms, fostering of diverse human resources and encouragementof their active participation in the workplace

14

LINTEC ANNUAL REPORT 2018

Achievements and Progress of Key Initiatives (1)
LINTEC Group’s products, we will further strengthen
coordination between our sales subsidiary in the
Netherlands, LINTEC EUROPE B.V., and the United

OVERVIEWThe Group is implementing regional
strategy in Japan, Asia, North America,
and Europe.

Kingdom’s LINTEC EUROPE (UK) LIMITED, a sales
With respect to “Strengthening of regional strategy,”in Japan we continued to advance initiatives aimed at

subsidiary that we acquired.
Next, let me turn to the “creation of new value.”In April last year, we internally reorganized theactively developing markets. In the Southeast Asian

Research & Development Div. and introduced a newmarket, LINTEC ASIA PACIFIC REGIONAL

R&D scheme. Under the new scheme, the Research

HEADQUARTERS PRIVATE LIMITED, which is in& Development Div. and the Sales Div. coordinate

Singapore, is spearheading efforts to expand andmore closely at early development stages and con-increase the efficiency of operations. In particular,

duct full verifications at key points, thereby prevent-last year we merged LINTEC BKK PTE LIMITED,

ing setbacks in the development process andwhich was an adhesive products sales subsidiary inensuring that each theme quickly takes shape with-Thailand, with LINTEC (THAILAND) CO., LTD., aout fail. Through this scheme, we will accelerate

manufacturing subsidiary in the same country. Going

new product development and provide new value

forward, we will introduce high-performance slittingthat caters to customers’ needs.

STRATEGY

unearthing new demand. Overseas, we are also

facilities; roll out the products of MACTAC AMERICAS,
LLC, an adhesive products manufacturer that we
acquired, in the Southeast Asian market; and undertake the new development of local distributors of
window films for automobiles. As for the North
American market, we will leverage the sales network of MACTAC AMERICAS to grow sales of our
ESG

high-value-added products. Labelexpo Americas
2018, which is to be held in the suburbs of Chicago
in September this year, will provide an extremely
important foothold for our development going forward. In Europe, also aiming to grow sales of the

In May, the LINTEC Group exhibited at Labelexpo
Southeast Asia 2018 in Thailand. Targeting theSoutheast Asian market, we displayed and promoted
the products of MACTAC AMERICAS.

We reorganized Group companies inJapan and overseas.

FINANCIAL INFORMATION

Achievements and Progress of Key Initiatives (2)U.S. subsidiary MADICO, INC., which was performing
poorly. We are taking a range of measures to improveearnings. For example, we have fully withdrawn from
Regarding “bolstering the corporate structure,” as a

PV backsheets, and we are rebuilding the manufac-

measure aimed at ensuring the soundness of Groupturing system. Other initiatives included merging two

companies and a continual increase in earnings, we

companies in Thailand. In Japan, meanwhile, weembarked on a radical management rationalization ofmerged the adhesive products slitting and processing
LINTEC ANNUAL REPORT 2018

15

MANAGEMENT STRATEGY

A Message from the President

operations of our Hiratsuka Office and those of Groupexamination of the human resources system to help

company FUJI-LIGHT, INC., to establish SHONAN

employees balance work and family care, and the

LINTEC KAKO, INC. At this company’s new Hiratsuka

raising of awareness in relation to diversity within

Plant, construction of which was completed in

LINTEC. Further, with a view to helping address

December 2017, we will further strengthen competi-social issues through our mainstay operations, wetiveness in relation to quality, cost, and delivery.

have established the SDGs* Committee, comprisingAlso, a project that we launched to reform work

employees from a wide variety of departments. My

across the organization by standardizing work pro-ambition is for the LINTEC Group to be a business incesses is making steady progress. These measures

which each employee has a real sense of contribut-

are closely linked to the work-style reforms set out

ing to society through their day-to-day work.

in our “activities for realizing a sustainable society.”

Moreover, I believe that realizing this ambition is

Through such measures, we will eliminate depen-

necessary for the growth and development of thedence on the skills of individuals, in other words

Group as a whole.

situations where only certain personnel understandwork methods; increase work efficiency throughout
each division and department; and, ultimately, foster*S DGs: Sustainable Development Goals. Adopted at the United Nations
Sustainable Development Summit in 2015, SDGs consist of 17 goals
and 169 targets for achieving a sustainable society.

talented personnel and enable them to fully realize
their capabilities.
In relation to “activities for realizing a sustainable
society,” we are also advancing efforts other than theactivities centered on the aforementioned workreform project. I feel that these other efforts under
this key initiative also made definite progress in theplan’s first year. Specifically, the Diversity Committee
has moved forward with initiatives to enable female
employees to fully realize their potential, theHiratuska Plant, SHONAN LINTEC KAKO, INC.

Performance Outlook—Year Ending March 2019
Having rebuilt overseas Group companies,
we are targeting higher revenues andearnings.
In the fiscal year ending March 31, 2019, fuel andraw material prices as well as fixed costs are likely
to rise. However, we will increase sales while¥257.0 billion; 14.5% in operating income, to ¥23.0
billion; and 42.1% in profit attributable to owners ofparent, to ¥16.0 billion.
FY2019 Forecasts (year on year)
Net Sales¥257.0 billion(+3.2%)

Operating Income¥23.0 billion(+14.5%)

Profit Attributable to Owners of
Parent¥16.0 billion(+42.1%)

reducing costs. In addition, we expect improvements from the overseas Group companies thathave been performing sluggishly. In light of theaforementioned factors, we forecast year-on-yearincreases of 3.2% in consolidated net sales, to

16

LINTEC ANNUAL REPORT 2018

Shareholder Returns
year ending March 31, 2019, based on our projectionof net income per share of ¥221.75, we plan toincrease dividend payments ¥12 per share, to ¥78

OVERVIEWIn the current fiscal year, we plan toincrease dividend payments ¥12 pershare, to ¥78 per share.

per share, and we expect a consolidated payout ratio
LINTEC regards enhancement of return of profits toof 35.2%. As we continue working to improve ourshareholders as one of its most important manage-

corporate performance in the coming years, we will

ment issues. From the perspective of distributing

also work to further enhance shareholder returns.

profits, we aim to provide stable and continued
returns after consideration of each fiscal year’s
consolidated performance while ensuring a balancewith retained earnings to maintain a healthy balance
sheet. In the fiscal year ended March 31, 2018,
although profit attributable to owners of parent
we paid a year-end dividend of ¥33 per share as

¥

78

80

66
60

60

40
20

29.7

66

54

48

%

80

41.6

35.7

40

42.3

STRATEGY

declined due to the recording of extraordinary loss,

Cash Dividends per Share / Dividend Payout Ratio

20

planned. Together with an interim dividend of ¥33
per share, this gave a full-year dividend of ¥66 pershare, the same level as in the previous fiscal year.
With regard to dividend payments for the fiscal

0

2015

2016

2017

2018

2019
(Forecast)(Fiscal year ended / ending March 31)

0Cash Dividends per ShareDividend Payout Ratio (right)

In Closing
companies in Europe and the United States that we

second year of LIP-2019, as a year to accelerate inno-

acquired in 2016. Moreover, as well as forging ahead

vation and proactively advance measures based onwith concerted efforts to reach the plan’s final quan-

the key initiatives. Although business conditions aretitative targets of net sales of ¥270.0 billion and oper-

challenging, we have to take bold steps. At the sameating income of ¥25.0 billion, the entire Group willtime, we must go back to our initial viewpoint tofocus on ensuring sustained growth beyond theproperly analyze the progress and results of theplan’s term.

measures we are currently implementing and adjust

As we move forward, we would like to ask our shareholders and investors for their continued support.

FINANCIAL INFORMATION

our trajectory in a timely manner if strategies needESG

We are viewing the current fiscal year, which is therevising. In particular, turning around Group companies that have had lackluster business results is apressing task. In this regard, we will continue rightsizing workforces and consolidating and rebuilding
bases. Further, we will develop new products that

August 2018

meet the expectations of customers, reduce costs

Hiroyuki Nishio

through a range of measures to bolster the corporate

Representative Director

structure, and create synergy benefits with the three

President, CEO and COO

LINTEC ANNUAL REPORT 201817

SPECIAL FEATURE

LINTEC’s

Semiconductor-Related Business
LINTEC’s semiconductor-related business began in 1986 with the development of a fixing tape for use in the wafer cutting
process in the manufacture of semiconductors—a UV curable dicing tape. Such tapes adhere strongly to thin wafers, holding
them firm when they are being diced into chips. Adhesion is then reduced through UV irradiation after dicing for easy
removal when the chips are picked up. This tape radically changed the semiconductor industry. Since then, we have developed many semiconductor-related tapes. We have also developed semiconductor-related equipment that fully leverages the
special features of our tapes. In such ways, we have established our own unique position within the industry.

The manufacture of semiconductors involves the formation of anumber of electronic circuits on the surface of a wafer sliced fromcolumnar silicon ingot. The wafer is then ground on the backside to
make it thinner and cut into individual chips, which are then mounted
and stacked on a substrate. All of our semiconductor-related

Single crystal
silicon ingot

Slice

Circuitformation

Wafer

Front-end
process

adhesive tapes and equipment are used in back-end processes after
circuit formation.

Lamination of surface
protective tapeBack-end
process

Back grinding(wafer thinning)

Reverse1

18

Lamination ofdicing tape

Removal of surface
protective tape

Dicing(wafer cutting)Reverse2

Back grinding

DicingThis is the process of using a grinding wheel to grind the backside of the wafer to make it thinner. Tape is affixed to protect
the circuit-carrying front from grinding water and dust.

Dicing is the process of cutting the wafers into individual chips.
Tape is placed on the backsides of wafers to fix them to a ringframe, thereby preventing chips from scattering during cutting.

Tapes that protect the surface of wafer circuits and tape laminator

Dicing tapes and wafer mounter that secure wafers to ring frames

LINTEC ANNUAL REPORT 2018

FocusFlip chip mounting and backside coating tape for chips

Various methods for mounting chips

In recent years, as smartphones and other electronic devices have

ワイヤー
ワイヤー
Wire
粘着剤

with flip chips, which are connected to the substrate by bumps (protruding electrodes on the circuit) and with the circuit facing downward, have

粘着剤
Adhesive

Wire bonding

come into widespread use instead of wire bonding (in which the chip is

基板
基板

Substrate
チップ
Chip
チップ

mounted and wires are used to connect the chip to the substrate).
Flip chip mounting has the advantage of enhancing electrical properties and reducing the mounting area. However, because the backside of

OVERVIEW

チップ
Chip
チップ

become thinner and advanced in performance, semiconductor packages

Flip chip

the chip is exposed, reinforcing the chip became an issue as chips

バンプ
Bump
バンプ electrode
粘着剤
粘着剤
Adhesive
基板
Substrate
基板

became thinner. In response, we came up with the idea of using tapes to

チップ
チップ

protect and reinforce the backside surfaces of flip chips. The result was

貫通電極
貫通電極
バンプ
バンプ

that LINTEC was the first mover in developing backside coating tapes for

粘着剤
粘着剤
チップ
チップ

that enable detection of imperfections in chips through infrared rays and基板
基板

STRATEGY

flip chips. Tailored to meeting customer needs, our lineup spans tapes
tapes with outstanding heat dissipation qualities. Our global share inbackside coating tape for flip chips is almost 100%.

Backside coating tapes for flip chips

テープ
テープ

UV irradiation of tape

Picking up

Mounting

Molding

ESG

3

4

Picking up and Mounting

Molding
This process involves connecting
the mounted and stacked chips
on a substrate with wires andsealing with liquid resin.

FINANCIAL INFORMATIONThis process involves picking up thecut chips, and mounting and stacking
on the substrate with adhesive. Aftercutting, the tape’s adhesion is reduced
through UV irradiation so that chips
can be picked up easily. We also offer a
proprietary process that transfers theadhesive of the fixing tape, which isused at the time of wafer cutting, tothe back of the chip when it is picked
up so that it can be mounted on thesubstrate directly.

Equipment for UV irradiation A multifunction tape that has theof the dicing tape to reduce
functions of a dicing tape as well as a
its adhesion
function that transfers adhesive for use
in die bonding

LINTEC ANNUAL REPORT 201819

CORPORATE VALUE INITIATIVES

LINTEC’s

Value Creation
Working at the leading edges of its fields, LINTEC has combined original technologies fostered over many years to develop numerous groundbreaking products. Under the Business
Administration Div., six operations bring these products to market and help address issues
in a variety of industries.
Note: Based on the similarities of their products, technologies, and markets, the Group’s six operations areclassified into three segments—Printing and Industrial Materials Products, Electronic and Optical
Products, and Paper and Converted Products.
Printing & Variable Information Products Operations

Printing and Industrial Materials Products

Industrial & Material Operations
Advanced Materials Operations

Electronic and Optical Products

Optical Products Operations
Fine & Specialty Paper Products Operations

Paper and Converted Products

20

LINTEC ANNUAL REPORT 2018

Converted Products Operations

Share of Net Sales by Segment
Paper andConverted Products

Printing andIndustrial Materials
Products¥38.5 billion
Net Sales¥249.0 billion

Paper andConverted Products

Printing andIndustrial Materials
Products¥5.0 billion¥121.7 billion 25.0 %48.9 %

Fiscal year ended
March 31, 2018

Operating Income¥20.1 billion¥3.0 billion

OVERVIEW

15.4 %

Share of Operating Income by Segment

15.2 %

Fiscal year ended
March 31, 2018

Electronic and
Optical ProductsElectronic and
Optical Products

35.7 %

59.8 %¥88.9 billion¥12.0 billion
Note: Operating income composition data is based on figures before the elimination of intra-segment transactions.

Regarding consolidated business results in the fiscal year
ended March 31, 2018, which was the first fiscal year of our

STRATEGY

A Message from the Executive
General Manager, Business
Administration Div.

Makoto Hattori
Director, Managing
Executive Officer,
Executive General
Manager, Business
Administration Div.

LIP-2019 medium-term business plan, overall we largely
reached our initial numerical targets. This performance wasthanks to each operations’ efforts to advance measures
steadily in accordance with the plan and rigorously discoverwhat customers really need. In the current fiscal year, theplan’s second year, we will proactively advance measures to
ESG

tackle several tasks that we were unable to finish in the firstfiscal year. At the same time, we will accelerate efforts todevelop and offer new products.
First of all, we view rebuilding overseas subsidiaries thatthe profitability of products—even if they are existing prod-

rationalizing the management of MADICO, INC., and its

ucts—by thoroughly analyzing how to increase profit based

figures are beginning to reflect the benefits of this effort.

on the ways we sell, manufacture, or handle them. Further,

Further, PT. LINTEC INDONESIA has been recovering since awith our sights set on the plan’s final year and beyond, welabor issue lowered its production volume, and we will con-will plan and offer new products and ideas to unearth

tinue improving the company’s profitability. Also, we aredemand.

taking various steps to rapidly create synergy benefits with

Other new initiatives include our launch of the SDGs

MACTAC AMERICAS, LLC, acquired in 2016. These steps

Committee in February this year with the aim of helping

include introducing personnel to the subsidiary.

address social issues through mainstay operations.

Meanwhile, markets in Japan in which we offer adhesive

FINANCIAL INFORMATION

are unprofitable as urgent task. Last year, we began radicallyNaturally, environmental measures are an important focus

products for labels and products related to construction

for us as a manufacturer. In my capacity as the officer inmaterials and automobiles do not have high growth rates.

charge, I also intend to create new businesses that contrib-

Nonetheless, these are still large markets. We will heighten

ute to the realization of non-environmental SDGs.

LINTEC ANNUAL REPORT 201821

CORPORATE VALUE INITIATIVES

At a Glance
Printing and Industrial Materials Products
Printing &Variable
Information
Products
Operations

Accounting for approximately 35% of the sales of
the LINTEC Group, these are its largest
operations. They manufacture and sell theGroup’s mainstay adhesive papers and films forlabels. In particular, these operations have anapproximately 60% share of Japan’s market foradhesive films, which have particularly highadded value. Overseas, we increased the scale ofoperations by expanding our manufacturing andsales network in China and Southeast Asia and by
taking measures that included acquiring U.S.
company MACTAC AMERICAS, LLC in 2016.

Industrial &Material
Operations

These operations manufacture and sell an
extremely wide range of products, from window
films with various functions such as cutting out
heat and ultra-violet light when they are attached
to building and automobile windows through tomotorcycle- and automobile-use adhesive
products for such applications as vehicle body
decoration and protection, industrial-use
adhesive tapes for bonding components in mobile
and other devices, labeling machines forautomated labeling, films for outdoor signs andadvertising, and decorative films for interiors.

Electronic and Optical Products
Advanced
Materials
Operations

In recent years, these operations have grownsignificantly. We are building a unique position in
the electronics industry with products such as
specialized adhesive tapes that are essential insemiconductor chip manufacturing and mounting
processes, and we also make equipment thatleverages these tapes’ special features fully. In
addition, we produce and sell release films thatare crucial in the production of multilayer ceramic
capacitors, which are electronic components.

OpticalProducts
Operations

We deploy our development technologies for
special adhesives and surface coating agents aswell as precision coating technology and use
leading-edge production facilities to provide
adhesive processing for various types of opticallyfunctional films, such as polarizing films andretardation films that are used in LCDs andorganic light-emitting diode (OLED) displays. We
also undertake surface improvement processing
for polarizing films, such as antiglare hard coatprocessing, which protects films from scratches
and reduces reflectivity.

Paper and Converted Products
Fine &
Specialty
Paper
Products
Operations

22

We have the leading share in the Japanesemarket for color papers for envelopes and colored
construction papers. We also manufacture andsell specialty papers including oil and water
resistant papers used in food packaging, dustfree papers for use in places such as clean
rooms, high-grade printing papers with special
textures, and high-grade papers for paper
products used in business cards and postcards.
Currently, these operations are centered onJapan. Going forward, however, we will also
concentrate on sales activities with a view toincreasing sales overseas.

LINTEC ANNUAL REPORT 2018

Converted
Products
Operations

We endow papers and films with special
functions, such as releasability and resistance towater, heat, and abrasion to create release papers
and films that protect the adhesive surfaces of avariety of adhesive products. We also produce
casting papers that are used as patterning papers
for placing designs on synthetic leather andcasting papers used in the manufacture of carbon
fiber composite material sheets from fibers.

(Fiscal year ended / ending March 31)¥ Billion

Net Sales by Operations¥ Billion

140

105

70

100

5.4 6

75

4

50

3.0

2015

2016

2017

2018

2019
(Forecast)

2

25

0

0

Net Sales
Operating Income (right)

92.1

88.9

12.0

16

12.6
12

45

4

15

0

0

2019
(Forecast)

37.2

2015

2016

2017

Net Sales by Operations¥ Billion

¥ Billion¥ Billion

39.1

8

24

18

20

4

12

10

2

6

0

0

0

5.0

2015

2016

2017

Net Sales
Operating Income (right)

2018

5.0

2019
(Forecast)

2018

22.0
16.4

2015

2016

2017

2018

22.1

17.0

FINANCIAL INFORMATION

6

30

36.9

2019
(Forecast)
Advanced Materials Operations
Optical Products Operations

Net Sales / Operating Income by Segment

38.5

55.2

ESG

2018

Net Sales
Operating Income (right)

40

2019
(Forecast)

51.6

25

2017

2018

60

30

2016

2017

¥ Billion

8

2015

2016

Net Sales by Operations¥ Billion

50

0

2015

STRATEGY¥ Billion

75

36.2

Printing & Variable Information Products
Operations
Industrial & Material Operations

Net Sales / Operating Income by Segment
100

89.6

87.1

34.6

35

0

¥ Billion

8

121.7 125.8

OVERVIEWNet Sales / Operating Income by Segment

2019(Forecast)Fine & Specialty Paper Products
Operations
Converted Products Operations

LINTEC ANNUAL REPORT 201823

CORPORATE VALUE INITIATIVES

Main Products
Printing & Variable Information
Products Operations• Adhesive papers and films for labels

Printing andIndustrial Materials
Products

Industrial & Material Operations• Window films• Automobile-use adhesive products• Industrial-use adhesive tapes• Labeling machines• Films for outdoor signs andadvertising• Interior finishing mounting films

Printing & Variable Information Products Operations
Masaaki Yoshitake
Executive Officer
Executive General
Manager, Printing &Variable Information
Products Operations
Business
Administration Div.

Although Japan’s market for adhesive papers and films for labels has matured,
LINTEC claims a large share of it by catering painstakingly to client companies’
exacting quality requirements. In the fiscal year ended March 31, 2018, we
continued proactively unearthing new demand and expanding our market share.
In particular, we grew sales of adhesive films centered on campaign labels andeye-catching labels.
On the other hand, in North American and European markets our brand profileis still not high enough. Further, our client base in Asian markets primarily comprises Japanese companies. Going forward, as well as leveraging our strengths
through the provision of high-value-added products to the industrial field, we must
boost sales in the fields of daily necessities, food, and distribution with a focus onoffering high-end products. As part of such efforts, we are actively increasing thevisibility of the LINTEC brand by displaying at expos. Further, I believe that anotherimportant task under the medium-term business plan is to expedite the realizationof synergy benefits with MACTAC AMERICAS, LLC—which we acquired to establish
a foothold for the strengthening of operations in the North American market.

Industrial & Material Operations
In the fiscal year ended March 31, 2018, we saw a steep rise in domestic sales oflabeling machines used at logistics and delivery centers in particular as theInternet mail-order sales market continues to grow. Further, we will endeavor to
strategically grow orders that are focused on 2020, mainly through our lineups offilms for indoor and outdoor signs and decorative films for interiors and exteriors.
Overseas, I believe strengthening the systems of window film businesses will be amajor theme going forward. In North America, we are rebuilding manufacturingsubsidiary MADICO, INC., and accelerating the marketing of new products. As forSoutheast Asia, we are concentrating efforts on strengthening our network of
distributors centered on products for automobiles while heightening recognition of
the LINTEC brand. Also, we have to increase the utilization rate of the clean coating
facilities of LINTEC (THAILAND) CO., LTD. Motorcycle-use side stickers, automobileuse paint replacement films, protective films for aluminum wheels, and otherautomobile-use adhesive products are selling well in Southeast Asia and India, andwe will continue growing sales of these product lineups to automobile manufacturers.
24

LINTEC ANNUAL REPORT 2018

Shuji Morikawa
Director,
Executive Officer
Executive General
Manager, Industrial &Material Operations,
Business
Administration Div.

SWOT Analysis

Weaknesses•Long record of supplying numerous customers and large market
share centered on high-value-added products in domestic market•Ability to provide comprehensive solutions that combine adhesive
products for labels and labeling machines•Sales networks, delivery capabilities, brand power, and pricecompetitiveness in overseas markets•Profitability of manufacturing subsidiaries in the United Statesand Indonesia

Opportunities

Threats•E xpected new demand for products with approach of 2020
•Southeast Asia’s favorable market and stable growth of U.S. market•Deceleration of growth in domestic market overall and possibility ofmajor overseas manufacturers’ full-scale forays into domestic market•Emergence of local manufacturers in Southeast Asia’s market andother markets and intensification of competition

OVERVIEW

Strengths

STRATEGY

TOPICSThe Significance of Acquiring North American Adhesive Products for Labels
Manufacturer MACTAC AMERICAS, LLC

MACTAC AMERICAS, LLC

ESG

Acquired in 2016, MACTAC AMERICAS, LLC, boasts the third largest share of the North American
market and sales of more than ¥35.0 billion. Acquiring the company was a very large step forward
for the LINTEC Group. As well as hot-melt adhesive formulation technology that realizes
outstanding environmental and cost performance, the company has sales channels covering
North America’s vast market.
We will use this acquisition to rapidly create synergy benefits by leveraging these sales
channels to increase sales of our high-value-added products in the North American market andby actively rolling out the products of MACTAC AMERICAS, LLC, in Southeast Asia and othermarkets outside North America. In May, at Labelexpo Southeast Asia 2018 in Bangkok, Thailand,
we began a full-fledged rollout of the company’s products in the Southeast Asian market under
the LMGP (Lintec Mactac Global Products) brand. This product lineup has already established a
track record in the region for such application areas as food.

LMGP brand adhesive films

MADICO’s Business Results¥ Billion

8
6

5.5

5.4

2

0.1

0
-2

(0.8)

2014 2015 2016 2017 2018
(Forecast)(Fiscal year ended / ending December 31)
Net Sales
Operating Income (Loss)

LINTEC acquired the U.S. company MADICO, INC., in 1987. At thetime, its head factory was in the Massachusetts. In response to a
rapid increase in sales of PV backsheets, which was a new business area for MADICO, INC., the company acquired a window film
manufacturer in Florida in September 2010. This allowed theMassachusetts production base to concentrate on the manufacture of PV backsheets. MADICO, INC., established a product
MADICO, INC.
supply system based on these two plants. However, in the year
following this acquisition, prices fell and orders decreased for PV backsheets due to the rapid commoditization of solar panels. As a result, MADICO, INC., has been recording operating losses since 2012.
At present, we are radically rationalizing management. In addition to withdrawing fully from thePV backsheets business last year, we have acquired new land and buildings in Florida. Plans callfor establishing a new production base at the site and consolidating manufacturing facilities there.
Moreover, MADICO, INC., is strengthening collaboration with functional films manufacturer VDI,
LLC, acquired in 2016, to step up the development and marketing of new products. In the current
fiscal year, MADICO, INC., aims to move into the black for the first time in seven fiscal years.
LINTEC ANNUAL REPORT 2018

FINANCIAL INFORMATION

4The Rebuilding of Window Film Manufacturer MADICO, INC., an Urgent Task

25

CORPORATE VALUE INITIATIVES

Main Products
Advanced Materials Operations• Semiconductor-related adhesive
tapes and equipment• Multilayer ceramic capacitor-related
tapesElectronic and
Optical Products

Optical Products Operations• Polarizing films and retardation films(adhesive processing)• Polarizing films (surface improvement
processing)

Advanced Materials Operations
Takeshi Kaiya
Executive Officer
Executive General
Manager, Advanced
Materials Operations,
Business
Administration Div.

The fiscal year ended March 31, 2018, saw brisk demand for tapes and devices
for the manufacturing processes of semiconductors and electronic components.
This is attributable in part to significant growth in the markets for semiconductors and electronic components. However, we take pride in the fact that ourcurrent performance is also the result of uncompromising efforts to identify theneeds of customers and markets based on our “always be No. 1” policy as wellas the timely development and marketing of products.
With respect to semiconductor-related adhesive tapes and multilayer
ceramic capacitor-related tapes, given that we have been operating at full
capacity in recent years due to strong demand for our products, centered on
those for high-end products, we are reforming our production system andramping up production capacity. The challenge going forward will be tostrengthen supply chain management even further with the aim of procuring
stable supplies of base films—the raw material of our products—and ensuring
reliable quality. To these ends, we are actively disclosing information to suppliers and seeking their cooperation.

Optical Products Operations
In the fiscal year under review, although adhesive processing operations for films
used in LCDs grew sales volume, selling prices and net sales decreased, partly
reflecting the market entry of LCD panel manufacturers from China. We mustbuild a structure that generates earnings consistently by reducing variable costs
and fixed costs and by strengthening global operations among our manufacturing bases in Japan, South Korea, Taiwan, and the polarizing film manufacturer
with which they collaborate.
Regarding products for organic light-emitting diode (OLED) displays, due totheir structure these displays use fewer layers of polarizing film than LCDs use.
Although the market is still small, orders have been increasing steadily. In preparation for the further spread and penetration of OLED displays, we will deepen
partnerships with the aforementioned polarizing film manufacturer and explore
the development of operations for new optically functional films.

26

LINTEC ANNUAL REPORT 2018

Shinji Ito
Executive General
Manager, Optical
Products Operations,
Business
Administration Div.

SWOT Analysis

Weaknesses• A bility to provide comprehensive solutions that combine tapes and equipment used in semiconductor manufacturing and mounting processes•Long record of supplying numerous semiconductor and electronic
component manufacturers worldwide and unique technologicalcapabilities•Insufficient resources to cater to expanding electronics-related
market and lengthening of delivery lead times for certain equipment• Sluggish growth in new businesses following on from businesses
related to semiconductors, electronic components, and LCDs

Opportunities

Threats•Expansion of electronics-related market due to such factors as spreadof IoT and increasing use of electronics in automobiles•Technological innovation in relation to semiconductor packages,
electronic components, and optical displays•Lower product prices due to commoditization of electronic devices•Rapid deterioration of conditions in electronics-related market andexchange rate fluctuations

OVERVIEW

Strengths

Trend Forecast for
the Semiconductor Market$ Billion

500

463

484

412

400
300
200
100

2015 2016 2017 2018 2019

(Forecast) (Forecast)(Calendar year)

Source: World Semiconductor Trade
Statistics (WSTS)

Semiconductor-Related Tapes Continuing to Sell Briskly in a Booming Market
The future of the semiconductor market is very bright. It has
broken a four-year “silicon cycle” of booms and busts to entera “super cycle” thanks to the spread of the Internet of Things(IoT), which connects an array of things to the Internet; theintroduction of next-generation, high-speed “5G” communications; and the increasing incorporation of electronic components in automobiles. The sales growth of Advanced
Materials Operations in recent years was not only the result of the tailwind that the semiconductor market provided. A major driver of our performance was the continuous development andoffering of wafer surface protective tapes that matched customers’ needs, enabling us to stakeout a larger market share.
The designs of semiconductor chips and packages are evolving at a high pace. LINTEC’s
mission is to offer new tape processes and thereby keep up with these advances. Throughongoing patent strategies and other initiatives, LINTEC will continue to expand its presence in thesemiconductor-related tape market.

ESG

0

STRATEGY

TOPICS

Enhancing Productivity and Commercializing New Materials

FINANCIAL INFORMATION

Polarizing films

In April 2018, we reorganized the Optical Products Operations into two departments: the Global
Management Dept. and the Functional Materials Dept. The role of the Global Management Dept.
is to further heighten productivity and quality through global operations centered on manufacturing bases in Japan, South Korea, and Taiwan. Meanwhile, the Functional Materials Dept. will develop
and market not only polarizing films but also functional materials that are compatible with new display
structures.
Going forward, as well as enhancing productivity through the strengthening of partnerships
with polarizing film manufacturers, we have to focus efforts on expanding businesses for
optical-related components other than polarizing films. These include light diffusion films thatheighten the visibility of displays and high-barrier films that provide an alternative to glass. For
such films, we have already established materials with sufficient properties. Therefore, we willproceed steadily toward commercialization through such steps as the establishment of mass
production processes.

Reflective LCD using LINTEC’s light
diffusion film (right)

LINTEC ANNUAL REPORT 201827

CORPORATE VALUE INITIATIVES

Main Products

Paper andConverted Products

Fine & Specialty Paper Products
Operations• Color papers for envelopes• Colored construction papers• Special function papers• High-grade printing papers• High-grade papers for paper products
Converted Products Operations• Release papers for adhesive products• Release films for optical-related products• Casting papers for synthetic leather• Casting papers for carbon fiber composite materials

Fine & Specialty Paper Products Operations
Toshimi Sugaya
Executive Officer
Executive General
Manager, Fine &Specialty Paper
Products Operations,
Business
Administration Div.

Converted Products Operations

Fine & Specialty Paper Products Operations are facing extremely tough business conditions due to raw material price hikes and the recent decline in use of
paper, which is shrinking the market. In response, in the fiscal year underreview we grew sales of special function papers, such as oil and water resistantpapers, dust-free papers, and base papers for total heat exchangers. This growthcompensated for lackluster sales of mainstay color papers for envelopes, which
account for approximately half of net sales.
At present, more than 90% of these operations’ sales are in the domestic
market. While we further grow domestic market share, in expanding operations
our main challenge will be to develop markets overseas. Confident that demandfor paper for food packaging will heighten as living standards rise in Southeast
Asia, we will focus on increasing sales, including dust-free papers. Also, we willcater to the world’s growing environmental awareness by increasing the use offorest-certified pulp, which contributes to appropriate forestry management.
In addition, we will develop blended papers that use non-wood raw materials
that used to be discarded as well as develop specialty papers that align withcurrent initiatives toward eliminating the use of plastic.

In the fiscal year under review, we posted robust sales of release papers for electronicmaterials for smartphones, release films for optical-related products, and casting papers
for synthetic leather. Although unit shipments of smartphones themselves are softening,
the number of electronic components that they incorporate is rising as smartphone
performances advance. Consequently, we expect continuing growth in demand forrelease papers and release films for high-end products. With respect to casting papers
for synthetic leather, targeting particularly strong demand for automobile applications,
we are working to grow sales worldwide by bolstering collaboration with distributors.
As for casting papers for carbon fiber composite materials, we have been facing difficult
business conditions because demand for fuel-efficient aircraft has been decreasing due tolow crude oil prices. Going forward, however, with production of such aircraft likely to rise, weare looking forward to a pickup in demand for the carbon fiber composite materials that areused in aircraft bodies. While continually reducing costs, in line with our basic strategy ofdifferentiating quality and services to avoid the pitfall of pure price competition, we will continue to ensure sustained earnings by catering effectively to the needs of business clients.
28

LINTEC ANNUAL REPORT 2018

Yutaka Iwasaki
Executive Officer
Executive General
Manager, Converted
Products Operations,
Business
Administration Div.

SWOT Analysis

Weaknesses•Large shares of domestic markets for color papers for envelopes
and special function papers as well as capabilities for manufactureof variety of products in small lots•Outstanding release agent processing technologies and coating
technologies•Sales networks, delivery capabilities, brand power, and pricecompetitiveness in overseas markets for specialty papers•Sluggish growth in new products following on from color papers forenvelopes, special function papers, and casting papers

Opportunities

Threats•Increasing demand for high-value-added products in China andSoutheast Asia
•Growing environmental awareness in Japan and overseas•Reduced demand for paper due to decline in use of paper•Soaring prices for key raw materials, including imported pulp

OVERVIEW

Strengths

STRATEGY

TOPICS
The Potential of Special Function Papers for Further Growth

Oil and water resistant papers

Casting Papers for Synthetic Leather—A Pillar of Converted
Products Operations

Use of Casting Papers for Synthetic
Leather Production
Casting papers coated with resins areaffixed to a base cloth, and then dried
and removed to imprint synthetic
leather with patterns.
Adhesive

Base cloth

FINANCIAL INFORMATION

In addition to existing applications for bags and footwear, the use ofsynthetic leather for automobile interiors is growing. At LINTEC, we are
selecting designs best suited to automobiles and concentrating onsales promotion. At the same time, our manufacturing subsidiary in
Suzhou, China, is establishing a new embossing method with a view tocreating a wider variety of designs. Meanwhile, in China—the world’s
largest market for casting papers for synthetic leather—the competitive environment is changing as the number of synthetic leather manufacturers decreases while the number of casting paper manufacturers
who compete with LINTEC increases. By stepping up collaboration with
distributors, we will firmly secure and expand our market share.

ESG

Dust-free papers

LINTEC produces oil and water resistant papers by impregnating wood pulp with a special
resin. This creates papers that curb seepages of oil or water while realizing high water-vapor
permeability. Fast-food chains and convenience stores are increasingly using these products as
wrapping paper for hot snacks. Further, we use a special resin that increases adhesion among
pulp fibers to manufacture dust-free papers. Even when ripped, these special function papers
produce very little dust. As the electronics industry grows, demand for dust-free papers isincreasing for such applications as work instructions and process control sheets used at sitesthat manufacture semiconductors and precision machines.
As well as the aforementioned products, which are the mainstays of our special function papers
area, sales of base paper for total heat exchangers have been growing recently. China and othercountries are seeing the increased introduction to homes and office buildings of total heat exchangers, which simultaneously ensure the cleanness of indoor air and save energy. Given that theiroutstanding moisture absorbency and flame retardancy have earned LINTEC’s products a strong
reputation for use as filters in these exchangers, we will continue proactively offering solutions to
manufacturers of air conditioners. We believe that further development of markets in such special
function papers areas will become a major driver of Fine & Specialty Paper Products Operations.

Synthetic leather

CuringPolyurethane resin
Casting paper

Casting paper

LINTEC ANNUAL REPORT 2018

29

CORPORATE VALUE INITIATIVES

Research and Development
As a technology-centered company, we realize that strengthening R&D capabilities is one of our mostimportant management strategies for achieving sustainable growth. Two approaches help us to create
both products that resolve our customers’ diverse 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 ofresearch that emphasizes customer needs. Going forward, we will further strengthen our R&D structure
to accelerate the speed of product development and create new technologies.

Adhesive applications
Through the development ofadhesives and substrates and the
combination of related
technologies, we are expanding
the range of ﬁelds in which thebasic functions of adhesive
products, primarily adhesion
and release, are utilized.

Surface improvement
Through the chemical andphysical processing of thesurfaces of paper and ﬁlm, weare enhancing theircharacteristics and adding
new functionality.

Four CoreTechnologies

System development
Through the systemization ofmachinery and equipment andbuilding high-level systems thatdraw on the distinctive characteristics of materials, we areproviding advanced solutions.

Specialty papers and releasematerials production
We use original papermaking
technologies and coating,
impregnation, and laminating
technologies to develop special
function papers and high-valueadded materials that transcend
traditional concepts of paper.

Research and Development Structure

Approximately 200 research personnel are engaged in

The research center of the Research & Development

day-to-day research on these themes. In addition, theDiv. is the core base for the Group’s R&D activities.

Nano-Science & Technology Center in Texas, theThe center has not only state-of-the-art research

United States, is engaged in research in new fields

facilities but also a clean room with the sameoutside our current technology domain.

semiconductor-related equipment that is found in
the production environment of our customers. The
completion of the Advanced Technology Building near
existing facilities in Saitama in 2015, with its largescale pilot coaters that closely resemble plant mass
production facilities, provided a structure for smooth
flow from R&D to mass production. The center mainlycomprises the Product Research Dept., whichdevelops products directly connected to our current
business, and the New Materials Research Dept.,
which conducts R&D with a focus on the future.

30

LINTEC ANNUAL REPORT 2018

Large-scale pilot coater2017, we brought the R&D Strategy Dept., which advances the

We are pursuing R&D to ensure that our focus themes make acreation of new businesses and other initiatives, under the wing

real contribution to strengthening the competitiveness of existingof the Research Center. We have established an R&D scheme,

businesses and creating new businesses and products. LINTEC

called the “Stage Gate System,” which facilitates coordination

is working to improve development efficiency based on two key-

among the R&D Strategy Dept., the New Materials Researchwords: “front-loading design,” which entails scrutinizing cus-

Dept., the Product Research Dept., and business operations.

tomer needs and development processes from the initial R&D

Under this scheme, we are taking steps to speed up the creation

stages, and “one-stop development,” in which new materials andof new products.

OVERVIEW

R&D Policy

mass production processes are developed in parallel. In April

The Stage Gate System

STRATEGY

Under this system, R&D themes are divided in the five stages of conception, examination, incubation, R&D, and product development, and gates are set up as checkpoints when moving to each of the next stages. Screening is performed at each checkpoint to determine whether to advance the theme or cancel it.
The aim is to steadily and quickly give shape to each theme, preventing setbacks in development through full verification at
key points. Through close coordination between the Research Center and respective business operations, we are creating newvalue in response to customer needs and evolving markets.
Image of Stage Gate System
Conception

Examination

Incubation

R&D

Product Development
Business Operations

Corporate
Research

New Materials Research Dept., Product Research Dept.
R&D Strategy Dept.
Checkpoint

Business
Operations
Medium- andLong-Term
ThemesCheckpoint

Checkpoint

Checkpoint

R&D Strategy Dept.
New Materials Research Dept., Product Research Dept.
Business Operations

ESG

Intellectual Property Activities

to increase profitability based on intellectual property that has

LINTEC aims to increase corporate value by developing originalhigh business value.

products that fully satisfy customer needs. We therefore position
intellectual property, including patents, trademarks, and design
rights acquired through these development activities asimportant management resources. While placing the utmost
emphasis on respecting the rights of other companies, the

2,500
2,000

coordinates with respective operations and R&D departments inpromoting Companywide and strategic intellectual property
activities. These activities aim to increase and improve
intellectual property rights, which are the lifeblood of LINTEC
given that it is a technology-centered company.

1,500

1,272
1,180

1,526
1,297

1,699
1,436

1,848
1,599

2,041
1,797

FINANCIAL INFORMATIONIntellectual Property Dept. of the Research & Development Div.

Number of Patents

1,000
500

By such means as building a patent portfolio for our foundation and growth business domains and securing intellectual
property in step with the globalization of our business, we aim

0

2014

Japan
Overseas

2015

2016

2017
2018
(Fiscal year ended March 31)

LINTEC ANNUAL REPORT 201831

THE BASE THAT SUPPORTS GROWTH

ESG
Initiatives

To remain a good corporate citizen and a manufacturer that is highly regarded
and trusted by all stakeholders, the LINTEC Group positions corporate social
responsibility (CSR) at the core of business management. This section focuseson the Group’s initiatives from the viewpoint of environmental, social, andgovernance (ESG) factors—which are essential for realizing a sustainable
society and enhancing corporate value.

Materiality (Important Issues)
The LINTEC Group identified its materiality with a view tofurther advancing CSR activities and meeting the expectations of stakeholders. We then established key performance indicators, which we began using in earnest fromthe fiscal year ended March 31, 2017.

Establishment of the SDGs Committee
Aiming to incorporate Sustainable Development Goals(SDGs) into business management and address a rangeof social issues through mainstay operations, inFebruary 2018 we launched the SDGs Committee,
comprising members from departments across ourorganization. From among the 17 goals, the LINTECGroup has identified those that are highly relevant to ourmateriality and has selected in-house products andtechnologies that promise to contribute significantly toachieving these SDGs. We are moving forward to develop
businesses based on these products and technologies.

32

LINTEC ANNUAL REPORT 2018

Note: Organizations covered in Results: [A] LINTEC; [B] LINTEC Group; [C] LINTEC, TOKYO LINTEC KAKO INC.; [D] LINTEC Head Office, 10 production sites, Research Center;[E] LINTEC production sites (excluding Ina Technology Center), Research Center
Materiality

GovernanceOperating global
governance

KPIs / Results

Enhance global
governance(1) U se of consultation contact points in and outside Japan:
6 cases [B](2) Results of audits by the internal audit division according
to local laws and regulations and internal standards:
No serious findings [B]Procure materials that will Volume of organic solvents used:
help to reduce environmen- 21,500 t [A]tal impact based on the
LINTEC Procurement
PolicyReducing atmosphericemissions

Reduce emissions into theatmosphere based on our
mid-term environmental
target(1) CO2 emissions from business activities in Japan:
185,700 t [C](2) Volatile Organic Compounds (VOCs) emissions frombusiness activities in Japan:
967.4 t [E]

Making environmental
contributions throughproducts and services

Develop and spread environmentally friendly products through LCA*1

Number of environmentally friendly products developed:
15 products [A]Ensuring environmental Ensure and manage environmental compliancecomplianceusing the environmental
management system

Society

Number of violations of environmental laws and regulations:
0 violations [D]Conduct activities to ensure (1) Number of occupational accidents and accidents
occupational safety accordresulting in absence from work:
ing to the occupational
2 accidents [C]safety and health manage- (2) Working hours with no occupational accidents:
ment system
1.5 million hours at Mishima Plant and Kumagaya Plant [C]Achieving workplace
diversity

Respect the diversity of
employees and provide
rewarding workplaces(1) R atio of female managers:
12% [B](2) R eturn to work after taking time off for childcare leave:
100% [A]Improving employee
satisfaction

Build working environments where employees
feel motivated to work

Turnover in three years of employees hired as new graduates:
6.8% [A]Conducting humanrights due diligence*2

Respect human rights and Number of responses to supplier survey:
determine risks throughout 114 companies [A]the supply chain

Ensuring social
compliance

Instill and ensure
Groupwide compliance

Response rate with survey to identify risks:
97.8% [B]

Ensuring productcompliance

Use the quality management system to eliminate
and prevent accidents

Number of serious product accidents reported:
0 accidents [C]ESG

Ensuring occupationalsafety and health

STRATEGY

Labor
practices

SDGs

OVERVIEW

Environment Effectively using raw
materials

Specific actions

Number of exhibitions participated in as an exhibitor in
and outside Japan:
45 times [A]Achieving harmonious
co-existence with local
communities

Introduce social contribution activities for local
communities as a good
corporate citizen(1) Total number of participants on plant tours:
717 persons [C](2) Implementation of social contribution activities:
Invited people with disabilities who live in Itabashi-ku,
Tokyo to professional baseball games, etc. [B]Conduct R&D for products
intended for local procurement and for solving social
issuesDevelopment of a system for registering local raw
materials at sites outside Japan:
Search system for global raw material information management under development [B]Contribution Developing businessto business models for local production & sales inemerging countries

Entering new businessfieldsNumber of patent applications:412 applications [A]FINANCIAL INFORMATION

Making contributions to Publicize the effects ofenvironmentally friendly
sustainableproducts to stakeholders
consumption

Under review*1 LCA (Life Cycle Assessment): A method for comprehensively assessing effects on the environment by calculating items such as the amount of energy and water input, theamount of raw materials used, and the amount of CO2 and hazardous chemical substances emitted throughout a product’s lifecycle.
*2 Human rights due diligence: A process exercised by an organization not only to comply with laws but also to address and reduce the risk of human rights violations(ISO 26000 6.3.3. Human Rights Issue 1).

LINTEC ANNUAL REPORT 201833

THE BASE THAT SUPPORTS GROWTH

Environment
As a leading corporate group in the fields of adhesive products and specialty papers, the LINTEC Group uses large amountsof raw materials, fossil fuels, water, and other resources in the manufacture of products. Going forward, we will continue toreduce emissions of environmentally hazardous substances and waste as well as cut back on usage of energy and water withthe aim of contributing to the realization of a sustainable society.
(Fiscal year ended March 31, 2018)

INPUT
Pulp

115,000 tons

Paper

21,300 tons

Release agents

2,300 tons
9,400 tons

Raw material
procurement

162,000 MWh

Waste

R&D

36,000 MWh(Crude oil equivalent 9,000 kl)

Water

4,190 tons
500 tons• Incineration• Final landfill disposal

185,700 tons
6.4 tons
NOx
65.1 tons
Soot and dust
1.2 tons
CO2

SOx

Emissions
into theatmosphere

Manufacturing

Substances subject to
the PRTR system*1
Release into
water bodies

Sales

Effluent(Kumagaya Plant,
Mishima Plant)

500 tons

6,637,000 m

3

Breakdown of CO2 emissions

Scope 1*2
Direct emissions• Bunker oil• Utility gas• LPG etc.

Self-generated electricity

11,640 tons

• Effective external utilization 6,950 tons

10,520 tons
7,730 tons

(Crude oil equivalent 41,000 kl)

Energy29,890 tons

Sale of valuable materials

Fuel (crude oil equivalent)

51,000 kl

106,300 tons
1,200 tons

Effective internal utilization

Mechanical parts, etc.

600 tons

Adhesive
products

69,400 tons
43,900 tons

Waste emitted

35,500 tons

Purchased electricity(release paper, etc.)

Waste
generated

Organic solvents

Other chemicals

Converted
products

Adhesive-related
equipment

33,900 tons

AdhesiveRawmaterials

Specialty
papers

Products

36,500 tons

Films

OUTPUT

Business
Activities of
the LINTEC

Scope 2 *3
Indirect emissions from energy• Purchased electricity

103,600 tons 82,100 tons

(Total volume control 90,600 tons) (Total volume control 97,200 tons)

Industrial-use water

8,263,000 m

3

Total volume control: A calculation method covering Scope 1 and Scope 2
emissions, including those not covered by the Energy Conservation Act.
The calculation included LINTEC Corporation and TOKYO LINTEC KAKO, INC.,
LINTEC SERVICES, INC., PRINTEC, INC., LINTEC CUSTOMER SERVICE, INC.,
and SHONAN LINTEC KAKO, INC.

*1 PRTR system: The Pollutant Release and Transfer Register system that requires companies to estimate the volume of chemical substances they have released and transferred inwaste and report the data to the government*2 Scope 1: Direct CO2 or other greenhouse gas emissions from the consumption of purchased gas and liquid fuels, such as liquid natural gas (LNG), liquid petroleum gas (LPG),
utility gas, kerosene, light oil, and gasoline*3 Scope 2: CO2 or other greenhouse gas emissions generated by other companies in the production of energy, such as electricity and steam, purchased by the reporting company
Notes 1: The numerical data in the environmental report has been compiled from the following organizations: LINTEC Corporation’s Head Office, 10 production sites, and ResearchCenter, and TOKYO LINTEC KAKO, INC.
2: For industrial-use water, although tons were used for initial calculations, figures have been converted into cubic meters in this report.
34

LINTEC ANNUAL REPORT 2018

Environmental Management
We have acquired global integrated certification under international
standard ISO 14001 for a total of 25 sites, including the LINTEC head
office and plants, Research Center, Group company TOKYO LINTEC
KAKO, INC., and overseas Group companies. In March 2018, we

Waste Generated
1,000 tons

35

25

continue to promote the acquisition of global integrated certification

20

by overseas Group companies as we strengthen Companywide

15

engagement in environmental preservation.

10

The LINTEC Group is working toward the realization of a sustainable society with manufacturing that has low environmental
impact. The Company’s CO2 emissions were reduced to 185,700
tons in the fiscal year ended March 31, 2018, from 195,000 tons in

29.1

3.5

3.9

5.9

3.8

1.4
4.9

5.3
1.4
4.6

5.3
1.4
4.5

14.4

13.9

13.3

2014

2015

2016

5
0

28.3

30.2

29.9

4.5

3.9

5.0
1.5
4.8

5.2
1.5
5.1

14.4

14.2

OVERVIEW

completed work to achieve compliance with ISO 14001:2015. We will

Reduction of Environmental Impact

30.1

30

2017
2018
(Fiscal year ended March 31)
SludgeOther

Waste paper
Waste plastic
Waste oilthe previous year. The amount of waste generated in production
decreased from 30,240 tons to 29,890 tons year on year. However,
emissions rate of below of 1.0%, which we had achieved in each of

Water Usage (Kumagaya and Mishima Plants)
1,000 tons

20,000the previous 10 years. In papermaking, the amount of water used
per unit of production improved by 0.8% over that of the previous
year. We are also constantly seeking to reduce the amount ofvolatile organic compounds (VOCs) including organic solvents thatare released into the atmosphere (see below).

Compliance with Environmental Laws, Directives,
and Regulations
The LINTEC Group seeks to be compliant with environmental laws,
directives, and regulations in Japan and overseas and reduce chemi-

100

75

11,88353.9 51.0

10,000

6,427

5,959

51.4
6,014

47.5

47.9
5,993

50

7,361
25

5,000

2001

2014

2015

2016
2017
2018
(Fiscal year ended March 31)0

Water usage
Water usage amount / paper production tonnage (right)

ESG

cal substances that are harmful to the environment. In addition to

m3 / tons

95.3

15,0000

STRATEGY

the final landfill ratio was 1.67%. Thus, we did not realize the zero

responding to restricted substances stipulated by REACH*1 andRoHS,*2 we conduct environmental impact examinations of raw
materials that we purchase and disclose necessary information to

Fiscal Year 2018 Emission and Transfer of Toluene

our customers.

Emission into
the atmosphere:

In the fiscal year ended March 31, 2018, on a non-consolidated basis

482 tons

we reported nine substances under the PRTR system. The total
volume was 7,838 tons, of which 7,752 were toluene, an organic solvent. Toluene emitted into the atmosphere amounted to 482 tons, an

LINTEC plants

increase of 11 tons over that of the previous year, while the quantity
year, at 483 tons.
*1 REACH: EU regulation for the Registration, Evaluation, Authorization andRestriction of Chemicals*2 RoHS: EU directive on the Restriction of the use of certain Hazardous Substancesin electrical and electronic equipment

Toluenehandled:7,752 tons

6,787 tons

Manufacturing
processes for release
papers and adhesive
products(Elimination
rate: 93.4%)

FINANCIAL INFORMATION

transferred (treated as waste) was 16 tons more than in the previous

Quantity
eliminated:

Exhaust-gas
treatment facility

Toluene flow
Quantitytransferred(Treated as waste):

Note: Elimination rate = eliminated amount /(handled amount – transferred amount) ×100

483 tons

LINTEC ANNUAL REPORT 201835

THE BASE THAT SUPPORTS GROWTH

Environment

Green Procurement
The LINTEC Group is committed to procurement that aims to
reduce environmental impact through rigorous chemical substancemanagement for raw materials, parts, and secondary materials.
When procuring a new material or responding to a new regulation,
we ask for suppliers’ understanding in conducting ingredient examinations to monitor for the presence of regulated substances. In thefiscal year ended March 31, 2018, the Company carried out suchexaminations on approximately 5,000 items. Going forward, we willLabel materials that use environmentally friendly
hot-melt adhesives
U.S. subsidiary MACTAC AMERICAS, LLC manufactures theselabel materials. When adhesives that are melted throughheating and then used for coating—known as hot-meltadhesives—are used in coating processes, organic solvents
are not needed. Therefore, hot-melt adhesives have lessenvironmental impact.

continue working with suppliers to engage in proactive environmental preservation activities and undertake stringent chemical substance management.

Environmentally Friendly Products
The LINTEC Group has embraced the rise in environmental awareness of recent years and is developing products to meet a wide
range of environmental needs. Our environmentally friendly product lineup pays heed to reusing, recycling, and energy saving. In
addition, for adhesive products and converted products such as
release papers, we are developing manufacturing processes that
do not use organic solvents.

Window films that curb temperature increases inbuildings and vehicles
Applying these films onto the entire surfaces of building or
vehicle windows significantly cuts thermal energy from sun-

36

Aluminum vapor deposition label materials that use
recycled PET

light, which causes heat.

These label materials use recycled PET film as facestock.

temperatures enhances the

The raw material is used PET bottles, which undergo a recy-

efficiency of air-conditioning

cling process known as mechanical recycling. The resulting

and helps save electricity andmaterial is made into PET film, which is then given a shiny

energy. Unlike curtains or

silver appearance through aluminum vapor deposition pro-

blinds, these films do notcessing. Although composed of more than 80% recycled PET

reduce brightness or impede

resin—one of the highest levels in the world—the facestock

views. Also, they lower ultra-

realizes a premium appearance with a metallic luster as wellviolet light by more than 99%

as physical properties comparable with those of label materi-and prevent shattering if theals that use nonrecycled PET film as facestock.

window glass is broken.

LINTEC ANNUAL REPORT 2018

Curbing increase in insideSociety
In continuing and expanding business activities, creating favorable relationships with all stakeholders is indispensable.
OVERVIEWThe LINTEC Group is advancing initiatives with the aim of establishing employee-friendly workplaces, strengthening
partnerships with customers and suppliers, and providing stable supplies of high-quality products. Further, we are actively
tackling social contribution activities.

Respect for Diversity and Human Rights
The LINTEC Group avoids discriminatory treatment of employees
based on race, creed, gender, education, nationality, religion, orage, thereby respecting diversity. In the areas of recruitment andemployment, the Group complies strictly with labor laws and regulations, including the prohibition of unfair discrimination, child
STRATEGY

labor, and harassment, and endeavors to promote an environment
where all employees can go about their work in a positive andenergized frame of mind. Every year, we conduct a Groupwide
survey of human rights and working conditions. As well as checking

Career development training for female employees

compliance in Japan and overseas, the surveys confirm that companies are respecting basic human rights and providing safe,
healthy workplaces.
We have a helpline through which employees can consult with
the General Affairs & Human Resources Div. or a lawyer if they
have any concerns or have witnessed illegal behavior in the workplace. Access was extended to overseas Group companies in 2015
and an English-language helpline is also available.

Zero Accident Culture
Safety is the top priority in LINTEC Group plants, which are operated with the aim of preempting injuries to personnel. Our practices include risk assessment, which enables us to put safety
standards in place; hazard prediction exercises; and the rigorous
pursuit of our 5S* activities through various types of safety patrol.
Safety and hygiene committees hold monthly meetings at all our

Employee Education
LINTEC has a Companywide training system based on rank,
as human resource education programs tailored to years ofcontinuous service and career. To foster a globally oriented
workforce and advance the careers of female employees, we also
run theme-specific group and correspondence courses to promote
objectives such as second-language acquisition and encouraging

ESG

sites in Japan and overseas to enable us to ascertain progress inour safety activities and share information. In addition, since 2017
we have held a safety conference for domestic plant safety officers
for the exchange of information about each plant’s initiatives. We
will continue activities on multiple fronts in accordance with our
zero accident culture.
*5S: S eiri (organizing), Seiton (clearing up), Seiso (cleaning), Seiketsu (cleanliness),
and Shitsuke (discipline) in Japanesewomen to take on a more active role in the workplace. We spend
FINANCIAL INFORMATION

approximately ¥30 million on employee training and development
annually. In other initiatives, the Company’s intranet offers e-learning
programs to increase all our employees’ understanding of topics
such as the environment, product quality, the business continuity
management system, compliance, and CSR.

Safety inspection tour by the President

LINTEC ANNUAL REPORT 201837

THE BASE THAT SUPPORTS GROWTH

SocietyThorough Quality Management

Fair Transactions

The LINTEC Group has acquired ISO 9001:2015 certification, the

LINTEC has a basic policy for fair and transparent transactions

international standard for quality management systems, for 19 sites

based on the principle of free competition among suppliers, andin Japan and overseas. We are working to further reinforce ourour procurement activities comply with all relevant laws and regu-

quality assurance system by obtaining ISO 9001:2015 for otherlations and social norms. For major suppliers, we require evalua-departments and acquiring integrated certification for related sites.

tions through self-audit check sheets for assessing suppliers with

When comparing major quality incidents by year, the fiscal year ended

respect to quality, chemical substance management, administra-

March 31, 2004, is set as 100 in an index of major quality incidents. Wetion and services, and CSR. We periodically review our purchasing

reduced the level of the index to 10 in the fiscal year ended March 31,

processes while maintaining and strengthening partnerships.

2018. We construct and implement management systems that enable
us to take swift action if a quality incident should occur, collecting
information, analyzing causes, and taking steps to prevent recurrence.

Social Contribution Activities

This framework is in place in Japan and overseas.

Recognizing that it is a member of society and that society andlocal communities support it, the LINTEC Group returns some ofPercentage of Quality Incidents versus FY2004

the profits from corporate activities to society through various%

social contribution activities.

100

100

LINTEC conducts a range of support activities on an annual basis
for people with disabilities living in Itabashi-ku, Tokyo, where the80Company’s head office is located. In October 2017, we hosted a jazzconcert with the aim of deepening interactions among attendees

60

through music, regardless of whether they did or did not have a40

disability. An audience of approximately 500 people, comprising
18

20
0

2004

2014

people with disabilities living in Itabashi and other local area resi-

14

12

2015

2016
2017
2018
(Fiscal year ended March 31)

13

10

dents, enjoyed the concert. In May 2018, we held our 12th professional baseball-viewing event, inviting a record 144 people, including
people with disabilities and their helpers, to Tokyo Dome. We alsoorganize blood drives and support disaster area restoration efforts.
As well as head office activities, LINTEC engages in various

Efforts toward Business Continuation
The Group is building a system that enables business operations tocontinue or restart quickly if struck by a disaster. All the Company’s
locations in Japan, subsidiaries TOKYO LINTEC KAKO, INC., and
LINTEC SPECIALITY FILMS (TAIWAN), INC., have obtained certification under ISO 22301:2012, the international standard for business
continuity management systems. In relation to these systems, studysocial contribution activities rooted in local communities, such as
cleaning up around each work site, participating in and supporting
local festivals, and conducting plant tours. Overseas, our subsidiaries plant trees, give donations to those in need of assistance, andprovide volunteers for a range of activities. The LINTEC Group will
coexist with society by continuing to engage in social contribution
activities as a good corporate citizen.
Concert for members of
the local community

meetings and drills are held at all sites so that, in the event of anatural disaster or accident that disrupts business operations, we
can ensure the safety of our employees and then recommence thesupply of products promptly, minimizing impact on our customers
and other stakeholders.
We also evaluate the business continuity capabilities of suppliersof raw materials that are critical in securing stable supplies of our
products. Additionally, we request that these suppliers introduce abusiness continuity plan and establish a system for implementing it
on an organization-wide basis.
Employees of overseas
subsidiaries planting
mangrove trees

38

LINTEC ANNUAL REPORT 2018

The LINTEC Group’s Work-Style Reform
Our medium-term business plan, LIP-2019, sets out promotion of work-style reforms, fostering of diverse humanresources and encouragement of their active participation in the workplace as a key initiative. Accordingly, we are
creating workplaces that are more amenable to all employees’ needs and enhancing labor productivity.

Initiatives for Diversity

Realization of Work–Life Balance
every employee to work with vigor and enthusiasm. As part of thesein the workplace, we are changing their mind-sets as well as those ofefforts, we are ensuring that employees, including managers, avoid

all employees through a range of training programs for female

working long hours. Further, in the fiscal year ended March 31,

employees and managers. Also, we have introduced a “job return”

2016, to encourage employees to take paid leave we introduced aprogram for rehiring people who can readily contribute to operations

planned vacation system that requires employees to designate inafter resigning for personal reasons such as childbirth, nursing careadvance certain days that they will take as paid leave. As a result,of a family member, or a spouse’s transfer to a different location.

employees took 64% of their paid leave in the fiscal year ended

Further, we have established a system that reemploys employees andMarch 31, 2018, compared with 51% in the fiscal year ended Marchenables them to work beyond the mandatory retirement age of 60 and

31, 2015, before the system’s introduction. Further, in 2016 weup to the age of 65 based on one-year contracts. Also, we are consid-

increased the number of days available for family care leave andering raising the retirement age to 65. Other initiatives include

lengthened the period for which employees can work shorter hours

increasing the percentage of people with disabilities that we employ

due to family care commitments. Also, we increased the age range

through measures such as improvements to on-site facilities asof children in relation to whom employees are eligible to workrequired. In the fiscal year ended March 31, 2018, people with disabili-

fewer hours due to childcare commitments. In the current fiscal

ties accounted for 2.19% of LINTEC’s employees, compared with theyear, we have increased the salaries of junior employees and retire-

legally mandated 2.0%.

ment benefits and revised employment regulations to increase theaccumulation of unused paid leave days and relax the requirements

Employment Rate for Persons with Disabilities%

for taking them.

STRATEGY

As part of efforts for encouraging women to take on a more active role

OVERVIEWAt the LINTEC, we are establishing conditions and systems to allow

2.19

2.2

2.06
1.94

2.0
1.8

1.79

1.78

2014

2015

1.6

Percentage of Paid Leave Taken
%

80

50.1

51.1

2014

2015

61.6

64.0

40

20

0

2016

2017
2018
(Fiscal year ended March 31)

In 2013, we established the Women’s Active Participation
Promotion Committee as a Companywide cross-sectionalorganization tasked with advancing the careers of women andhelping them balance work and family commitments. In 2016,
we changed its name to the Diversity Committee. Aiming tohelp employees balance work and family care commitments,
this committee has created a family care support handbook
and conducts related training for
respective workplaces’ managers incollaboration with the Human Resources
Dept. Through such initiatives as supporting employees suffering from injuries
or illnesses, the committee will consider
and implement a variety of measures
aimed at career advancement and creation of employee-friendly workplaces for Our family care support
a wider, more diverse range of employees. handbook

LINTEC ANNUAL REPORT 2018

FINANCIAL INFORMATION

61.1

2017
2018
(Fiscal year ended March 31)

Diversity Committee

Training to help employees balance work and familycare commitments

60

2016

ESG

0

39

THE BASE THAT SUPPORTS GROWTH

Governance
Basic Philosophy

Primarily comprising executive officers (including directors serving

The Group believes that the fundamentals of corporate governanceconcurrently) responsible for the execution of business, manage-

are to achieve thorough legal compliance, to increase management

ment meetings are also held once a month and endeavor totransparency and promote corporate ethics, and to make prompt

streamline business operations through the sharing of information

decisions and effectively execute operations. By enhancing andamong all business divisions. P.42 Diagram A

reinforcing corporate governance, we aim to further increase our

The Audit & Supervisory Committee meets once a month andcorporate value and joint profits with shareholders.

conducts monitoring audits that focus on matters reported fromthe Audit Office, which is the Company’s internal audit division.

Corporate Governance System

In addition to performing audits covering the appropriateness and1. Corporate Governance System

legality of the execution of directors’ duties, each and every Audit &The Company has selected the Company with Audit & Supervisory

Supervisory Committee member also plays a role in supervising

Committee system described in the Companies Act of Japan for its

the execution of the directors’ duties through the exercise of theorganizational structure. The Company has placed directors thatvoting rights on the Board of Directors. P.42 Diagram B

are also Audit & Supervisory Committee members with voting
rights on its Board of Directors in order to strengthen the Board’s• Evaluation of Board of Directors’ effectivenesssupervisory function, with a view to stepping up corporate gover-

In April 2018, the Company conducted an evaluation of the effec-

nance and to streamlining management even further. The Company

tiveness of the Board of Directors. Details are as follows.

has appointed 15 directors, of whom four are Audit & Supervisory

Overview

Committee members and four are outside directors.

Based on the principles of Japan’s Corporate Governance Code, all

Held once a month to make important decisions with regard to

directors filled out a survey on matters such as the structure andmanagement, Board of Directors’ meetings are also held on an adoperation of the Board of Directors, which included some open-

hoc basis as necessary to strive for rapid decision making.

ended questions. The results of these surveys were analyzed by

Corporate Governance System
Organizational Structure
Number of Directors(Number of Outside Directors)
Number of Audit & Supervisory Committee
Members (Number of Outside Directors)

Number of Independent Officers

2Company with Audit & Supervisory
Committee

Directors’ Term of Office

One year

Board of Directors’ Meetings in FY2018

Number of meetings: 14

15 (4)

Adoption of an Executive Officer System

Yes

Takeover Defense Measures

None

Accounting Auditors

Ernst & Young ShinNihon LLC

4 (3)History of Corporate Governance
1990

2004

2007

2008

2011

Formed the LINTEC Corporation as a Company with Audit & Supervisory Board

2015

2016

2018

Transitioned organizational structure to a
Company with Audit & Supervisory Committee

Introduced an executive officer system

Appointed outside director

Increased the number of outside directors(from one to two)

Increased the number of outside
directors (from two to four)
Implemented Board of
Directors’ effectivenessevaluation

Introduced Takeover Defense Measures

40

LINTEC ANNUAL REPORT 2018

Abolished Takeover
Defense Measures

of Conduct was based. To ensure the effectiveness of the complianceoutside directors, who are independent officers of the Company.

system with regard to laws and regulations as well as the Articles ofIn this final evaluation, outside directors stated that the survey

Incorporation, the Audit Office—an organization under the president’s

questions and method were rational overall considering efforts todirect supervision—investigates and verifies, by means of audits

revise survey content each year and other matters. Their evaluation

based on the Internal Audit Regulations, whether all of thealso confirmed that the approach of using a PDCA cycle* in which

Company’s operations are being appropriately and reasonably imple-

measures for the following year are examined based on survey

mented and pursuant to laws, the Articles of Incorporation, andresponses was a reliable means of ensuring the effectiveness of theinternal rules and regulations. The results of those audits are

Board of Directors. Further, although replies from respective

regularly reported to the Board of Directors.

OVERVIEW

representative directors, and a final evaluation was received fromdirectors provided positive evaluations of the Board of Directors,
there were recommendations and observations, including thoseregarding points for future improvement. Outside directors stated• System for storing and managing information related to the­execution of directors’ duties

that such recommendations and observations provided a reference

Documents are stored and managed in accordance with rulesin pursuing the Board of Directors’ ideal state and requested thedetermined for each document type, including those documents

consideration of measures in light of the said recommendations andstipulated by law.

observations going forward. Based on this feedback, we will takesteps to develop an environment that facilitates improved Board of* PDCA cycle: This approach continuously improves processes through the repetition of acycle of activities comprising four phases: namely plan, do, check, and act.

• Regulations and other systems pertaining to management of
STRATEGY

Directors’ effectiveness.

risks of loss
By promoting the issue of manuals by division and facilitating theirthorough use, the Company makes preemptive efforts to reduce or
avoid risk. In the case of specific risks, the Company promotes• Director training policies

reviews of and improvements to response measures as risks arise.

(1) New director training

For emergency situations, such as the occurrence of a disaster, theAfter assuming their position, new directors are provided training

Company has established the Companywide Crisis Managementfrom outside institutions to endow them with the legal, accounting,regulations, in addition to a BCMS, which is based on these regula-and other knowledge necessary to management.

tions. These are separate from risk management initiatives con-(2) Regular training

ducted through normal operations, and we strive to ensure that a

Once or twice a year, directors undergo training on contemporarycrisis management organization can be quickly established in theissues from lawyers or other outside lecturers. These training

event of an emergency.

is crucial to members of the Board of Directors.
(3) Special training

ESG

sessions serve as opportunities to hone the sense of judgment that
• System to ensure that the execution of the duties of directors is
efficiently conducted

When necessary, directors participate in seminars at theIn addition to setting out the duties for which directors are

Company’s expense to acquire the specialized insight required toresponsible for and that correspond to the allocation of roles of eachperform their duties.

organization, based on the Regulations on the Division of Duties, theCompany works to separate management from execution andaccelerate decision making by the introduction of an executive officer

The following is an explanation of the internal control system to ensure

system. Moreover, the Company reviews internal organizations asthat the execution of directors’ duties is in compliance with laws andnecessary to be able to respond to environmental changes and works

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

to maintain efficiency in the execution of the duties of directors by

to ensure the appropriateness of the execution of other business.

such means as the setting up of cross-organizational committees on

FINANCIAL INFORMATION

2. Internal Control Systeman as-required basis.
• System to ensure that the execution of the duties of directors andemployees is in compliance with laws and regulations as well as
the Articles of Incorporation• System to ensure the appropriateness of business in the corporate group comprising the Company and its subsidiaries

To ensure that the execution of the duties of directors and employees

Based on the Affiliate Company Operational Regulations, theis in compliance with laws and regulations as well as the Articles ofCompany works to maintain the appropriateness of its operations

Incorporation and that a sense of ethics is maintained, the Company

as a group entity by having each of its principal business divisions

established its motto of “Sincerity and Creativity,” on which its Codecontrol the operations of Group companies. Based on the Affiliate
LINTEC ANNUAL REPORT 201841

THE BASE THAT SUPPORTS GROWTH

Governance

Company Operational Regulations, the Company works to maintain

instructions and orders received from Audit & Supervisorya system for receiving corporate performance, risk, and otherCommittee members, with the exception of those instructions andimportant reports from each Group company regularly or on anorders that are not necessary for the duties of Audit & Supervisory

as-required basis. Providing business management and support

Committee members, it is assumed that Audit & Supervisoryfrom the appropriate division as necessary, the Company promotes

Committee secretariat staff do not receive instructions and orders

management efficiency in each company. To ensure that Group

from directors or other employees.

companies are in compliance with laws and regulations as well as
the Articles of Incorporation, audits are conducted by eachcompany’s internal audit system and by the Company’s Audit Office.

• System relating to the reporting of cases to the Audit & Supervisory
Committee and system for ensuring that the submitting of suchreports is not seen as reason enough for the person who submitted• Matters relating to the employees who are tasked to assist thethem to be subjected to disadvantageous treatment

duties of the Audit & Supervisory Committee, matters relating toWith regard to cases that are likely to significantly damage thethe independence of said employees from directors, and matters

Company or a Group company, such as violations of laws or regula-relating to ensuring the effectiveness of Audit & Supervisorytions, all Group directors and employees are to report such cases

Committee instructions with respect to said employees

to the Company’s Audit & Supervisory Committee. In addition, it isTo further raise the effectiveness of Audit & Supervisory Committee

deemed that the Audit & Supervisory Committee will be able toaudits and maintain a system to carry out audit duties more

directly demand business-related reports for all Group directors

smoothly, the Company has established the Audit & Supervisoryand employees. Under the Company’s Internal Reporting System

Committee secretariat, which supports and takes on Audit &Operation Regulations and its Global Internal Reporting System

Supervisory Committee duties. It is assumed that the Audit &Regulations, the Company has established a helpline that can be

Supervisory Committee’s consent has to be obtained for transfers

used by all Group directors and employees and endeavors to main-of personnel to the Audit & Supervisory Committee secretariat

tain a system to ensure that the submitting of such reports is not

staff, personnel evaluations, and disciplinary action. The instruc-seen as reason enough for the person who submitted said notifica-

tions and orders given to Audit & Supervisory Committee secre-tion or report to be subjected to disadvantageous treatment. In thetariat staff are also deemed to be given by directors serving as

event of an internal notification via the helpline, this will be

Audit & Supervisory Committee members. With regard to said

reported to the Audit & Supervisory Committee.

Corporate Governance Organization Chart
General Meeting of Shareholders
Appointment /Dismissal

Appointment /Dismissal

B

Management decisions
Informing / ReportingA

Board of Directors(Directors)

Auditing /Supervision

Representative Directors

Appointment /Dismissal

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

Cooperation

Management Meetings(Executive Officers)

Operational Execution Divisions
CSR Management
OfficePromotion• Administrative Division• Marketing Division• Production Division• Technical Division•Domestic and Overseas Subsidiaries
Operational execution

42

LINTEC ANNUAL REPORT 2018

Cooperation

Informing

C
Internal
Auditing

Audit Office

Independent
AuditorAccount
Auditing /Internal
ControlAuditing• Matters concerning policy relating to the handling of costs or

4. Risk Management Systemliabilities arising from the execution of duties of Audit &The Company has established the Companywide Crisis Management

Supervisory Committee members

Regulations as well as a risk management system for minimizing
the possible impact and damage to corporate value if a major

Company for the prepayment or redemption of expenses incurred

problem arises. It has also implemented and oversees thefor the execution of their duties, said costs or liabilities will be

Information Security Management Rules and the Trade Secretpromptly handled following discussions in the department respon-Management Rules for the preservation and management of infor-

sible, with the exception of cases in which said costs have beenmation. There are also Companywide risk assessments centeredrecognized as being not necessary for the execution of said Audit &on the CSR Management Office.

OVERVIEW

When an Audit & Supervisory Committee member invoices theSupervisory Committee member’s duties. In addition, should Audit& Supervisory Committee members deem that independent out-

5. Limited Liability Contracts

side experts (such as lawyers, certified public accountants, etc.) are

In accordance with Article 427, Paragraph 1 of the Companies Act,

necessary as advisers to the Audit & Supervisory Committee, thethe Company has entered into a contract with each of its non-Company will bear those costs, with the exception of cases in which

executive directors—outside directors Kazumori Fukushima, Toru

said costs have been recognized as being not necessary for the

Nozawa, Satoshi Ohoka, and Kanako Osawa—that limits liability forexecution of said Audit & Supervisory Committee’s duties.

compensation for damages under Article 423, Paragraph 1 of theCompanies Act. Based on this contract, liability for compensation

Committee carries out audits effectively
With a view to ensuring a system so that Company information
reaches the Audit & Supervisory Committee unhindered, theCompany works to maintain an environment in which information is

STRATEGY• Other system for ensuring that the Audit & Supervisoryfor damages is limited to ¥10 million or the minimum liability
amount stipulated by law, whichever is greater.

Internal Audits and Audit & Supervisory
Committee Audits

received not only from directors (excluding directors serving as

1. Internal Audits

Audit & Supervisory Committee members) and from employees but

The Audit Office regularly implements internal audits of divisions,also from independent auditors, corporate lawyers, tax accoun-

work sites, plants, and affiliated subsidiaries in addition to verifying

tants, and other specialists. The Company has a system in place tothat operational execution processes and results comply with the law

ensure regular meetings with representative directors and venues

and internal regulations. The status of these internal audits isfor important discussions, such as management and strategy

reported when necessary to the Audit & Supervisory Committee, andmeetings, for Audit & Supervisory Committee members to attend

opinions are exchanged on the results of the audits. P.42 Diagram C
ESG

and state opinions.

2. Audit & Supervisory Committee Audits
3. Basic Policies and Systems for Preventing
Relationships with Antisocial Forces

The Company’s Audit & Supervisory Committee comprises four

The Company stands in firm opposition to all antisocial forces andwhom three are outside directors. While utilizing the internal con-organizations that threaten to disrupt the order and safety of civil

trol system, the Audit & Supervisory Committee cooperates withsociety while practicing a strict policy of non-association with such

the Audit Office and the independent auditor, receives the neces-

entities. We have made this commitment clearly apparent in thesary reports, and conducts audits of the directors’ business execu-

LINTEC Compliance Guidelines and are taking steps to ensure thor-

tion through such methods as exchanges of opinions. Each Audit &ough awareness with this regard among all directors and employees.

Supervisory Committee member attends management and otherdirectors serving as Audit & Supervisory Committee members, of

meetings, obtains the information needed for the audits, attends
Board of Directors’ meetings as a director, and supervises thethe police, centers for the removal of criminal organizations, law-directors in the execution of their duties by stating opinions andyers, and other specialists to combat such requests. Should we be

participating in resolutions through their voting rights.

approached by antisocial forces or organizations, we will closely

Audit & Supervisory Committee members Hiroshi Okada andcoordinate with such institutions, organizations, lawyers, or other

Toru Nozawa have considerable knowledge of finance and account-

specialists to ­furnish a quick, organization-wide response.

ing, having gained many years of experience in their respective

FINANCIAL INFORMATION

We reject any illegitimate requests from antisocial forces andorganizations and maintain close collaborative relationships withroles at the Company’s administrative and audit divisions andNippon Paper Industries Co., Ltd.’s administrative division.

LINTEC ANNUAL REPORT 201843

THE BASE THAT SUPPORTS GROWTH

GovernanceOutside Directors
1. Outside Directors
The Company has selected Kazumori Fukushima, Toru Nozawa, Satoshi Ohoka, and Kanako Osawa as its four outside directors. With the
exception of Kazumori Fukushima, the other three are also Audit & Supervisory Committee members.
Name

Human, Financial, and Business Relationships and Other Shared Interests
between the Outside Directors and the Company

Reason for Appointment

There are no particular shared interests between the Company and
Kazumori
Kazumori Fukushima, but Nippon Paper Industries Co., Ltd., where he
Fukushima serves as a managing executive officer, is a major trading partner of theBy utilizing knowledge and experience from his directorship experienceat Nippon Paper Industries Co., Ltd., and his many years of businessexperience in this company’s production and sales divisions, Kazumori
Fukushima is able to strengthen the Company’s Board of Directors’supervisory function. Therefore, he has been appointed as an outside
director.

Toru
NozawaThere are no particular shared interests between the Company and Toru
Nozawa, but Nippon Paper Industries Co., Ltd., where he serves as adirector and a management executive officer, is a major trading partnerof the Company, which purchased ¥2,197 million worth of raw materials
from and sold ¥21 million worth of products to Nippon Paper (bothresults from the fiscal year ended March 31, 2018). In addition, Nippon
Paper is a major shareholder in the Company; its holding amounted to
21,737,792 shares (30.12% of the total number of Company shares
outstanding excluding treasury stock) on March 31, 2018.

By utilizing knowledge and experience from his directorship experience at
Nippon Paper Industries Co., Ltd., and his many years of business experience in this company’s administrative divisions, Toru Nozawa is able tostrengthen the audit and supervisory functions of the Company’s Board of
Directors. Therefore, he has been appointed as a director serving as an
Audit & Supervisory Committee member.

Satoshi
Ohoka

There are no particular shared interests between the Company andSatoshi Ohoka.

By utilizing his long years of policy-based finance experience, his richinternational experience, his specialist academic experience, and his
knowledge and experience gained as an outside director in industries
different to that of the Company, Satoshi Ohoka is able to strengthen theaudit and supervisory functions of the Company’s Board of Directors.
Therefore, he has been appointed as a director serving as an Audit &Supervisory Committee member. He is also designated as an independent
director based on the criteria stipulated by Tokyo Stock Exchange, Inc. (TSE).

KanakoOsawa

There are no particular shared interests between the Company and
Kanako Osawa.

By utilizing her specialist expertise and extensive knowledge gained as an
attorney, along with the knowledge and experience gained through her
career in corporate legal affairs both at home and abroad, Kanako Osawa
is able to strengthen the audit and supervisory functions of the Company’s
Board of Directors. Therefore, she has been appointed as a director
serving as an Audit & Supervisory Committee member. She is also designated as an independent director based on the criteria stipulated by TSE.

Company, which purchased ¥2,197 million worth of raw materials fromand sold ¥21 million worth of products to Nippon Paper (both resultsfrom the fiscal year ended March 31, 2018). In addition, Nippon Paper isa major shareholder in the Company; its holding amounted to
21,737,792 shares (30.12% of the total number of Company shares
outstanding excluding treasury stock) on March 31, 2018.

2. The Company’s Basic Way of Thinking with Regard to
the Independence of Outside Directors

Remuneration of Corporate Officers

1. Total Remuneration by Corporate Officer TypeThe Company does not have its own set standards and policies withregard to the independence of outside directors and refers insteadto the standards stipulated by TSE. Since appointment is based ona request from the Company, we recognize that independence frommanagement is to be ensured.

44

Corporate officer type

Total
remuneration

Total remuneration by type(Millions of yen)Stockoptions

Number ofpeoplereceiving
Bonuses remuneration(Millions of yen)Basicremuneration

451

338

21

90

13

(Audit & Supervisory
Committee members)(excluding outside directors)

19

19

—

—

2

Outside officers

20

20

—

—

5

Directors(excluding Audit & Supervisory
Committee members andoutside directors)

Directors

3. Outside Directors’ Supervision of Directors’ Executionof Duties and Internal Auditing, Mutual Cooperation
with Audit & Supervisory Committee Audits andAccounting Audits, and Relationship with the Internal
Control Division

2. Policy Regarding Decisions on Amounts of Director
Remuneration

In addition to attending Board of Directors’ meetings and making• Remuneration of directors (excluding Audit & Supervisorynecessary and effective remarks as appropriate during agenda

Committee members)deliberations, outside directors cooperate with the internal audit

This consists of the following.

division and the independent auditor as well as oversee directors in(1) Basic remuneration

the execution of their duties.

• Comprising a fixed amount determined based on rank as well as

LINTEC ANNUAL REPORT 2018

contributions to the director shareholding association

The remuneration assessment advisory meeting has been estab-• Long-term incentives provided by enabling directors to periodi-

lished as an advisory body for the president and CEO on matterscally purchase and hold shares of Company stock through theregarding the assessment of and decisions on remuneration for

director shareholding association based on contributions madedirectors (excluding Audit & Supervisory Committee members) withthe aim of improving objectivity and transparency. This body, which• Short-term incentives (remuneration linked to business perfor-

has members including external specialists, provides advice andmance) paid in amounts adjusted based on consolidated business

OVERVIEW(2) Bonuses

makes suggestions to the president and CEO when necessary.

results, the total amount paid not exceeding ¥150 million(3) Stock options• Long-term incentives provided together with the director shareholding association• Remuneration of outside directors (excluding Audit &Supervisory Committee members)This is decided by the Board of Directors in accordance with theCompany’s internal rules on director remuneration and based on each• Remuneration of directors (Audit & Supervisory Committee
members)

member’s duties and responsibilities, within totals approved at theGeneral Meeting of Shareholders.

This is discussed and decided by members of the Audit &Supervisory Committee in accordance with the Company’s internal
rules on director remuneration and based on each member’s
Meeting of Shareholders.

members)
STRATEGY

duties and responsibilities, within totals approved at the General• Remuneration of directors (Audit & Supervisory Committee
No change in the current policy

Takeover Defense Measures
The Company abolished its Rules of Large-Scale Purchase of its

2018, approved a resolution to replace share subscription rights,

shares based on its Basic Policies related to the Company’s owner-

which were provided as stock options, and contributions to theship control upon the expiry of the validity of the policy, which was at

director shareholding association, which were included in basic

the conclusion of the 124th Annual General Meeting of Shareholders

remuneration, with the new allotment of restricted stocks for theheld on June 21, 2018. At the same time, the Company abolished its

purpose of providing a long-term incentive to directors (excluding

Basic Policies related to the Company’s ownership control.

outside directors and Audit & Supervisory Committee members).

Nevertheless, after the expiration of the effective period of that

Beginning from the said General Meeting of Shareholders, thepolicy, the Company will continue to promote initiatives to protect its

Policy Regarding Decisions on Amounts of Director Remuneration

corporate value and the common interests of its shareholders. Fromis as follows.

that perspective, it will request that persons who are engaging in or

ESG

Further, the General Meeting of Shareholders held on June 21,

aim to engage in large-scale purchase provide necessary and suf• Remuneration of directors (excluding Audit & Supervisory

ficient information to allow the shareholders to appropriately deter-

Committee members)

mine the pros and cons of the large-scale purchase in accordanceThis consists of the following.

with relevant laws and regulations. At the same time, the Company(1) Basic remuneration

will disclose the opinions of the Board of Directors and endeavor to• A fixed amount determined based on rank, the total amount paid

secure necessary time and information for the shareholders to

not exceeding ¥420 million

consider such large-scale purchase. Further, if it is rationally judgedthat there is a risk of damage to the Company’s corporate value and• No change in the current policy

the common interests of shareholders unless timely defensive(3) Restricted stocks

measures are implemented to address a large-scale purchase, the• Long-term incentives to contribute to increasing the Company’s

Company will endeavor to secure its corporate value and thecorporate value and share price provided by the allotment ofcommon interests of its shareholders, as an obvious obligation of

restricted stocks, the total amount paid not exceeding ¥60 million

the Board of Directors entrusted with management of the Company

FINANCIAL INFORMATION(2) Bonuses

by its shareholders, by promptly deciding the content of the concrete
The amounts of remuneration are decided by the Board of Directors

measures deemed most appropriate at the time in accordance within accordance with the Company’s internal rules on director remu-

the relevant laws and regulations and executing such measures.

neration and based on the duties and responsibilities of each director (excluding Audit & Supervisory Committee members), within
totals approved at the General Meeting of Shareholders.
LINTEC ANNUAL REPORT 201845

THE BASE THAT SUPPORTS GROWTH

Governance

Policy on Holdings of Capital Tie-Up Shares

March 31, 2018, we held meetings with more than 150 domestic

The Company views the establishment and maintenance of stable,

and overseas institutional investors and analysts.

long-term relationships with business partners as a matter ofimportance. For this reason, shares of business partners are held(2) The Public Relations Office, Finance & Accounting Dept.,

strategically based on a comprehensive evaluation of factors such

General Affairs & Legal Dept., and Corporate Strategic Officeas the Company’s business relationship with the partner in ques-

will play a central role in advancing the Company’s various IR

tion. We only acquire such holdings when increasing trust andactivities. Relevant divisions pursue close coordination withcoordination with the business partner through holdings is judged

these offices and departments, exchanging information on aas an effective means of mutually raising corporate value, anddaily basis and meeting with members of senior management

these holdings are reviewed based on this perspective when neces-

as appropriate to share necessary information.

sary. In exercising voting rights, the Company respects the management policies of the investee and votes for or against proposals

include regular briefings on financial results and medium-term

contribute to improved corporate value and shareholder returns.

business plans, visits to overseas investors, participation in IR
conferences at which overseas investors gather, facility tours,

Stockholdings

business explanatory forums, and Company briefings for indi-

Stocks held for purposes other than pure investment

vidual investors. In the fiscal year ended March 31, 2018, theNumber of issues: 43 issues

Company participated in a total of three IR conferences held in

Total amounts recorded on balance sheet: ¥2,185 million

Tokyo. We seek to expand the range of information provided to

Fiscal Year under Review­—Specific Investment Shares
Top 10 issues

Number ofshares(Thousands)

Amounts
recorded onbalance sheet(Millions of yen)

Purpose of holding
To strengthen business

1,167 relationships

domestic and overseas shareholders and other investors by
publishing shareholder newsletters and annual reports andposting information in the IR section of our corporate website. At
the same time, we collect feedback from a wide range of share-

Toray Industries, Inc.

1,160

Fujipream Corporation

936

361 Same as above

Mitsubishi UFJ Financial Group, Inc.

159

111 Same as above

Soken Chemical & Engineering Co., Ltd.

35

92 Same as above

KING JIM CO., LTD.

76

78 Same as above

IMURA ENVELOPE CO., INC.

100

52 Same as above

solicited through IR activities are relayed to management by theMizuho Financial Group, Inc.

206

39 Same as above

relevant divisions via quarterly business reports at the Board ofOZU CORPORATION

15

35 Same as above

Arisawa Mfg. Co., Ltd.

35

34 Same as above

Directors’ meetings or reported appropriately to management

ASAHI PRINTING CO., LTD.

27

34 Same as above

Shareholder Interactions
The Company seeks to engage in constructive interactions withshareholders and other investors that contribute to sustainablegrowth and medium- to long-term improvements in corporate
value. The Company has established an investor relations (IR)activity system and advances proactive initiatives based on thefollowing policies to facilitate this endeavor.
(1) The officer responsible for IR implements and oversees theCompany’s various IR activities, including individual meetings
with shareholders and investors. In regard to responses torequests for individual meetings, members of senior management or directors will meet with shareholders or investors
requesting meetings based, whenever appropriate, on thedesires and interests of the requester. In the fiscal year ended

46(3) In addition to individual meetings, the Company’s IR activities

based on a careful examination of whether or not the proposal will

LINTEC ANNUAL REPORT 2018

holders and other investors through surveys that are attached toshareholder newsletters and made available on the IR website.
(4) Opinions and concerns of shareholders and other investors

on an as-required basis.
(5) In interactions with shareholders and other investors, we practicestringent management of information in accordance with theinternal Insider Trading Prevention Regulations to ensure that
insider information is not disclosed. In addition, the Company’s
disclosure policy stipulates that we will observe a quiet periodthat begins approximately one month prior to the announcementof quarterly financial results to avoid leaks of financial results andto maintain fairness. During this period, we will not answer questions or make comments on our financial results and forecasts.

A Message from an Outside Director

OVERVIEW

Aiming to strengthen governance,
I will continue providing
candid opinions based on an
objective perspective.
Kanako Osawa
Outside Director,
Audit & Supervisory
Committee Member

directors with the aim of heightening their motivation to increase

I became an outside director of the Company three years ago.

the share price and enhance corporate value by giving directors

My impression of Board of Directors’ meetings is that state-and shareholders a common interest in share price changes. The

ments and discussions have become more vigorous than they

recent General Meeting of Shareholders approved this revision.

were directly after my appointment. The different operational

As for the latter initiative, the Board decided to abolish takeover

attributes and types of specialization that LINTEC’s wide variety

defense measures upon the expiry of their validity in June. Theof business fields require can make it challenging to under-

Board reached this decision after carefully examining risks andstand the Company based only on participation in meetings of

merits, as well as the persuasiveness of their respective

the Board. To further my understanding, I attend monthly man-premises, and after taking into consideration the opinions ofagement meetings, which executive officers also attend.

shareholders and investors and changes in the external

Meanwhile, at meetings of the Board I make a point of stating

environment. In my view, both initiatives are consistent with thecandid opinions and asking questions from the perspective ofinterests of shareholders and directors and will contribute to thea non-specialist, which I believe provides opportunities forenhancement of LINTEC’s corporate value over the long term.

deepening discussions.

On the other hand, the Company faces tasks going forward.
This June saw the revision of Japan’s Corporate Governancea questionnaire survey of directors concerning the composition

Code. The code calls for increases in detail, objectivity, andand management of the Board. In this regard, I also give antransparency with respect to reductions in capital tie-up sharesevaluation in my capacity as an independent outside director.

and appointments and dismissals of CEOs. With this trend

I think that the plan–do–check–act (PDCA) cycle, whereby theseeming likely to continue, I feel that it will be necessary to

Board considers measures for the coming fiscal year in light ofdeepen discussions even further in the future.

ESG

Every year, the effectiveness of the Board is evaluated throughthe questionnaire survey’s results, is a sound way of ensuring the

STRATEGY

The Board of Directors

Also, in recent years LINTEC has been accelerating the globalization of operations. For example, it acquired three compa-

different questions each year. Recently, I have a real sense thatnies in Europe and the United States in 2016. As organizations

the questionnaire has become extremely meaningful because it

become larger, it inevitably becomes more difficult for gover-has encouraged proactive discussions regarding such issues asnance to reach and cover every part of them. In Japan, internal

corporate social responsibility (CSR) and the Sustainable

control is functioning adequately under the Audit Office.

Development Goals (SDGs).

However, the Company needs to create systems with the aim of

FINANCIAL INFORMATION

effectiveness of the Board. In addition, the Company devises

strengthening Groupwide governance. In such efforts, LINTEC
Initiatives for Corporate Value Enhancement

should coordinate with regional headquarters, including

LINTEC’s recent initiatives with respect to corporate governance

LINTEC USA HOLDING, INC., in the United States and LINTEC

include revision of the system for remuneration of corporate

ASIA PACIFIC REGIONAL HEADQUARTERS PRIVATE LIMITED in

officers and abolition of takeover defense measures (Rules ofSingapore. Drawing on my experience and knowledge as an

Large-Scale Purchase of the Company’s shares). The former

attorney, I would like to help LINTEC steadily accomplish each

initiative promotes ownership of the Company’s shares by

one of these tasks and achieve sustained development.
LINTEC ANNUAL REPORT 201847

THE BASE THAT SUPPORTS GROWTH

Corporate Officers As of June 21, 2018

Representative Director, Chairman and CEO

Akihiko Ouchi (Date of Birth: Jan. 2, 1945)
Mar. 1967 Joined the Company
Apr. 1994 Manager, Nagoya Branch OfficeJun. 2000 Director, Plant Manager, Tatsuno Plant, Production Div.
Jun. 2004 Representative Director, President
Apr. 2014	Representative Director, Chairman and CEO(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)
Apr. 2017	Director, Managing Executive Officer, Executive General
Manager, Production Div. and in charge of Quality
Assurance & Environmental Protection 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)

Jan. 1983 Joined the Company
Jun. 2011	Executive Officer, Executive General Manager, General
Affairs & Human Resources Div., General Manager,
General Affairs & Legal Dept. and Human Resources Dept.
Jun. 2015	Director, Managing Executive Officer, Executive General
Manager, General Affairs & Human Resources Div.
(current position)

Directors, Managing Executive Officers

Directors, Executive Officers

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

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

Apr. 1980 Joined the Company
Apr. 2014	Executive Officer, Executive General Manager, Advanced
Materials Operations, Business Administration Div.
Apr. 2017	Director, Managing Executive Officer, Executive General
Manager, Business Administration Div.
(current position)

Kazuyoshi Ebe (Date of Birth: Jan. 26, 1953)
Mar. 1975 Joined the Company
Jun. 2008	Director, Deputy Executive General Manager,
Research & Development Div., General Manager,
Research Center and Intellectual Property Dept.
Apr. 2016	Director, Managing Executive Officer, Deputy Executive
General Manager, Business Administration Div. and in
charge of Optical Products Operations(current position)

Takashi Nakamura (Date of Birth: Dec. 23, 1953)
Apr. 1976 Joined the Company
Jun. 2011	Executive Officer, Executive General Manager,
Fine & Specialty Paper Products Operations,
Business Administration Div. and in charge of Converted
Products Operations
Apr. 2017	Director, Managing Executive Officer, Deputy Executive
General Manager, Business Administration Div.
(current position)

48

Tsunetoshi Mochizuki (Date of Birth: May 12, 1958)

LINTEC ANNUAL REPORT 2018

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

Junichi Nishikawa (Date of Birth: Sep. 12, 1955)
Apr. 1978 Joined the Company
Apr. 2013	Executive Officer, Plant Manager and Manager, Fine &Specialty Paper Production Dept., Kumagaya Plant,
Production Div.
Jun. 2017	Director, Executive Officer, Deputy Executive General
Manager, Production Div. and Plant Manager, Kumagaya
Plant (current position)

Takehiko Wakasa (Date of Birth: Jun. 23, 1956)
Apr. 1980 Joined the Company
Apr. 2013	Executive Officer, Plant Manager, Chiba Plant,
Production Div.
Jun. 2017	Director, Executive Officer, Deputy Executive General
Manager, Production Div. and Plant Manager,
			 Tatsuno Plant (current position)

Outside Director

Executive Officers

Kazumori Fukushima (Date of Birth: Feb. 12, 1958)

Toru Onishi
Plant Manager, Mishima Plant, Production Div.

Norio Murata

OVERVIEW

Apr. 1980	Joined Sanyo-Kokusaku Pulp Co., Ltd.
Apr. 2013	Executive Officer, General Manager, Kushiro Mill,
Nippon Paper Industries Co., Ltd.
Jun. 2017	Managing Executive Officer, General Manager,
Business Communication & Industrial Paper Sales Div.,
Nippon Paper Industries Co., Ltd. (current position)
Jun. 2017	Outside Director of the Company (current position)

Executive General Manager, Osaka Branch Office, Business Administration Div.,in charge of Western Japan

Shigeru Uematsu
Director / Audit & Supervisory Committee Member

Hiroshi Okada (Date of Birth: Aug. 25, 1954)
Apr. 1979 Joined the Company
Oct. 2012 General Manager, Audit OfficeJun. 2017	Director / Audit & Supervisory Committee Member(current position)

General Manager, Public Relations Office

Yutaka Iwasaki
Executive General Manager, Converted Products Operations, Business Administration Div.

Masahiro Oshima
President, LINTEC USA HOLDING, INC.
STRATEGY

Sumio Morimoto
Outside Directors / Audit & Supervisory Committee Members

Toru Nozawa (Date of Birth: Mar. 10, 1959)
Apr. 1981 Joined Jujo Paper Co., Ltd.
Jun. 2014	Outside Audit & Supervisory Board Member of 		the Company
Jun. 2015	Outside Director / Audit & Supervisory Committee
Member of the Company (current position)
Jun. 2017	Director, Managing Executive Officer, General Manager,
Corporate Planning Div. and in charge of Subsidiaries andAffiliated Companies, Nippon Paper Industries Co., Ltd.
(current position)

President, LINTEC ASIA PACIFIC REGIONAL HEADQUARTERS PRIVATE LIMITED

Tatsuya Tsukida
Executive General Manager, Research & Development Div. andGeneral Manager, Research Center

Toshimi Sugaya
Executive General Manager, Fine & Specialty Paper Products Operations,
Business Administration Div. and General Manager, Fine & Specialty Paper Sales Dept.

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

ESG

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

Plant Manager, Agatsuma Plant, Production Div.

Takeshi Kaiya
Executive General Manager, Advanced Materials Operations, Business Administration Div.

Masaaki Yoshitake
Executive General Manager, Printing & Variable Information Products Operations,
Business Administration Div.

Apr. 1998	Certified as an Attorney, joined Kajitani Law Offices(to present)
Oct. 2005	Admitted to practice law in the State of New York,the United States
Jun. 2015	Outside Director / Audit & Supervisory Committee
Member of the Company (current position)

FINANCIAL INFORMATION

Kanako Osawa (Date of Birth: Dec. 22, 1970)

Yoichi Shibano
CFO, Executive General Manager, Administration Div.
and General Manager, Finance & Accounting Dept.

Naoshi Nishikado
General Manager, Corporate Strategic Office

LINTEC ANNUAL REPORT 2018

49

FINANCIAL
SECTIONManagement’s Discussion and Analysis...................... 51
Operating Risks............................................................. 53
Financial Summary....................................................... 54
Consolidated Balance Sheet......................................... 56
Consolidated Statement of Income.............................. 58
Consolidated Statement of Comprehensive Income... 58
Consolidated Statement of Changes in Net Assets..... 59
Consolidated Statement of Cash Flows....................... 60
Notes to Consolidated Financial Statements............... 61
Management’s Report on Internal Control overFinancial Reporting.................................................... 84
Report of Independent Auditors.................................... 85

50

LINTEC ANNUAL REPORT 2018

FINANCIAL SECTIONManagement’s Discussion and Analysis

Profit before income taxes rose 8.2% year on year, to ¥16.7 billion,

In the fiscal year under review, consolidated net sales increased

reflecting the recording in extraordinary loss of provision for business

20.9% year on year, to ¥249.0 billion, due to the three companies instructure improvement and goodwill impairment loss, both of which

Europe and the United States that were acquired at the end of 2016

were related to U.S. subsidiaries. Income taxes following the applica-

and a favorable performance by businesses related to semiconduc-tion of tax effect accounting increased 31.6% year on year, to ¥5.5

tors and electronic components.

billion, due to the absence of the previous fiscal year’s positive tax

Although net sales increased 20.9%, gross profit rose 18.8% year
on year, to ¥62.8 billion, due to an increase in fuel and raw material
prices. Operating income was up 21.1% year on year, to ¥20.1 billion,
as growth in sales volume and cost reduction effects outweighed the

OVERVIEW

Revenues and Expenses

effect. Profit attributable to owners of parent declined 1.7%, to ¥11.3
billion.
Net income per share decreased from ¥158.69 in the previous fiscal
year to ¥156.02, and ROE declined from 6.6% to 6.2%.

amortization of goodwill of subsidiaries that the Company acquired.

Net Sales by Segment¥ Billion

STRATEGY

249.0
Printing and Industrial Materials Products Up 42.1%
206.0

Printing andIndustrial Materials
Products

Electronic and
Optical Products

85.7• In Printing & variable information products operations, adhesive films for labels sold well in Japandue to higher demand for campaign labels for beverages and eye-catching labels for cosmetics.
Overseas, sales were stable in Southeast Asia.
• In Industrial & material operations, sales of equipment for the mail-order industry were firm in Japan,
while sales of motorcycle- and automobile-use adhesive products and window films were solid in Asia.
• Net sales increased due to contributions from the three companies in Europe and the United Statesacquired at the end of 2016.

121.7

Electronic and Optical Products Up 6.8%

83.2

• In Advanced materials operations, sales of semiconductor-related adhesive tapes and equipment
increased significantly due to brisk demand for products for smartphones and cloud-computing servers.
Sales of multilayer ceramic capacitor-related tapes also rose thanks to strong demand for products for
smartphones and automobiles.
• In Optical products operations, revenues from LCD-related adhesive products decreased because,
although sales volumes were steady, the effect of a fall in unit sales prices and a change in the sales mix
was significant.

88.9

Paper andConverted Products

37.1• In Fine & specialty paper products operations, sales of color papers for envelopes were sluggish, but
sales of industrial specialty papers and oil and water resistant papers were firm.
• In Converted products operations, sales of release papers for electronic materials and release films for
optical-related products were favorable, and sales of casting papers for synthetic leather were solid.

2017

ESG

Paper and Converted Products Up 3.6%

38.5
2018
(Fiscal years ended March 31)

Operating Income Factor Analysis¥ Billion

Consolidated

Non-Consolidated

16.6
Higher sales
volume and sales
mix improvement
+4.3

2017

Fall in unit
sales prices
–0.6

20.1
Higher fueland raw
material prices–1.5

Rise in
fixed costs–1.7

FINANCIAL INFORMATION

Cost reduction
effects, etc.
+1.2

Increase insales volume, etc.
+1.8

2018
(Fiscal years ended March 31)

LINTEC ANNUAL REPORT 2018

51

FINANCIAL SECTIONManagement’s Discussion and Analysis

Financial Position

Cash Flows from Operating Activities

AssetsCash flows from operating activities increased ¥2.5 billion year on

Total assets as of March 31, 2018, were ¥292.7 billion, an increase ofyear, to a cash inflow of ¥26.8 billion. The principal movements were¥18.5 billion from the end of the previous fiscal year. The main

as follows:changes were as follows:·P rofit before income taxes

+¥1.3 billion· Cash and deposits+¥13.6 billion·D epreciation and amortization

+¥1.6 billion· Trade notes and accounts receivable

+¥5.8 billion·A mortization of goodwill+¥3.1 billion· Inventories+¥3.9 billion·T rade notes and accounts receivable

–¥3.7 billion· Property, plant and equipment

+¥1.5 billion· Inventories–¥4.5 billion· Goodwill–¥5.4 billion·T rade notes and accounts payable

+¥5.5 billion· Impairment loss

+¥1.0 billion

Liabilities
Total liabilities as of March 31, 2018, were ¥106.3 billion, an increase of

Cash Flows from Investing Activities¥10.8 billion from the end of the previous fiscal year. The main

Cash flows from investing activities increased ¥40.8 billion year onchanges were as follows:

year, to a cash outflow of ¥7.5 billion. The principal movements were+¥9.6 billion

as follows:· Short-term loans payable

+¥1.7 billion·P ayments into time deposit· Long-term loans payable

–¥3.4 billion·P roceeds from withdrawal of time deposits–¥4.1 billion·P urchase of property, plant and equipment

+¥5.0 billion· Trade notes and accounts payable

+¥3.3 billion

Net Assets·P urchase of shares and membership interests of subsidiaries

Net assets as of March 31, 2018, were ¥186.4 billion, an increase of

resulting in change in scope of consolidation

+¥36.6 billion¥7.7 billion from the end of the previous fiscal year. The main changes
Cash Flows from Financing Activities

were as follows:· Retained earnings

+¥6.5 billion

Cash flows from financing activities decreased ¥11.6 billion year on· Foreign currency translation adjustments

+¥1.2 billion

year, to a cash outflow of ¥6.4 billion. The principal movements wereas follows:

Cash Flows·S hort-term loans payable

+¥3.4 billion

Cash and cash equivalents as of March 31, 2018, amounted to ¥55.0·P roceeds from long-term loans payable

–¥20.9 billion

billion, an increase of ¥13.8 billion year on year.

·R epayments of long-term loans payable

+¥6.2 billion

Net Assets

Cash Flows¥ Billion¥ Billion

186.4
178.7

Share
subscription
rightsTotal accumulated+0.0
other comprehensive
Total
incomeshareholders’+1.3
equity
+6.5

2017

52

LINTEC ANNUAL REPORT 2018

Noncontrollinginterests–0.1

Net cash used ininvesting activities–7.5
Net cash

41.3

2018
(Fiscal years ended March 31)

2017

Net cashprovided byoperatingactivities+26.8

Effect ofexchange ratechange on cash
and cashequivalents
+0.8

55.0

used infinancing activities
–6.4

2018
(Fiscal 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 those
involving tax systems, foreign exchange, or customs

OVERVIEW

that are anticipated, but it does not include all risks.

(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

electronics-related products business. Future market trends could

to market competitive, high-value-added products. Accordingly, theaffect 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

However, there is no guarantee that such investment of management
resources 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 business

ESG

markets in which the Group operates, the Group may be unable to

STRATEGY

Due to intense competition in both the domestic and overseas

with other companies and academic institutions.

results 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, depending
FINANCIAL INFORMATION

on 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) Infrastructure failures, such as those related to electric power,
water, or communications
LINTEC ANNUAL REPORT 2018

53

FINANCIAL SECTION

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

2018

2017

2016

2015

For the year:
Net sales
Operating income% of net sales
Profit before income taxes
Profit attributable to owners of parent
Return on equity
Return on assets¥ 249,030
20,095
8.1%
16,666
11,2576.2%
6.5%¥205,975
16,595
8.1%
15,39811,450
6.6%
6.1%¥210,501
17,692
8.4%
16,79910,8996.4%
7.4%¥207,255
16,881
8.1%
17,555
11,6597.2%
7.8%

Per share data (yen):
Net income
Net assets
Cash dividends¥ 156.02
2,573.69
66.00¥ 158.69
2,465.43
66.00¥ 151.07
2,370.49
54.00¥ 161.63
2,363.81
48.00

Depreciation and amortization
Purchase of property, plant and equipment
Net cash provided by operating activities
Net cash used in investing activities
Net cash provided by (used in) financing activities¥ 9,031(8,084)
26,819(7,532)(6,363)¥ 7,466(13,049)
24,361(48,378)
5,257¥ 8,800(9,810)19,928(9,898)(4,044)¥ 8,713(6,299)15,485(5,104)(3,135)

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¥175,077
77,85897,21855,04275,336
14,395
8.0%
292,735
186,42063.4%¥151,449
64,40187,04841,28473,871
17,795
10.3%
274,199
178,69064.9%¥163,647
56,389107,258
60,32364,859——240,720
172,101
71.1%¥163,017
57,058105,958
56,05061,503——
237,444
171,674
71.8%

76,564,240
4,794

76,564,240
4,760

76,564,240
4,246

76,564,240
4,413¥121,691
88,88238,456¥85,721
83,27852,632¥88,100
85,89554,576¥86,826
83,28154,564

3,040
11,972
4,996

1,672
9,155
5,767

2,785
10,5624,303

2,878
10,071
3,996

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.

54

LINTEC ANNUAL REPORT 2018

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

2013

2012

2011

2010

2009

¥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%¥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%

¥ 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

¥

¥

¥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)¥10,537(7,777)22,259(9,253)(3,454)¥11,286(9,584)
12,979(9,752)(2,300)¥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
130,57662.9%¥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
113,930
65.5%

76,564,240
4,223

76,564,240
4,270

76,564,240
4,286

76,564,240
4,198

76,564,240
4,037

76,564,240
3,987¥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

—
—
—

—
—
—

96.36
1,596.37
24.00

OVERVIEW

2014

44.86
1,497.58
20.00

STRATEGYESG
FINANCIAL INFORMATION

LINTEC ANNUAL REPORT 2018

55

FINANCIAL SECTION

Consolidated Balance Sheet
LINTEC Corporation and its consolidated subsidiaries
March 31, 2018 and 2017

ASSETS

Millions of yen

Thousands of
U.S. dollars(Note 1)

2018

2017

2018

Current assets:¥ 58,614¥ 45,060

Trade notes and accounts receivable (Notes 5, 14)

72,59066,801

683,269

Inventories (Note 3)

38,506

34,584362,443

Deferred tax assets (Note 19)

1,483

1,614

13,962Other (Notes 14, 16)

3,991

3,503

37,573

Cash and deposits (Notes 12, 14)$551,721

(109)

(114)

(1,028)175,077

151,449

1,647,941

Buildings and structures

73,701

71,545

693,725

Machinery, equipment and vehicles

125,066

124,185

1,177,203

Land

11,083

11,057104,326

Allowance for doubtful accounts
		

Total current assets

Non-current assets:
Property, plant and equipment (Notes 4, 8, 9, 13):

Construction in progress

5,087

2,163

47,891

Other

12,54812,511

118,111

227,487

221,463

2,141,257(152,150)(147,592)(1,432,143)

75,33673,871

709,114

29,18934,558274,745

Accumulated depreciation		Property, plant and equipment, net

Intangible assets:
Goodwill

3,285

4,000

30,92932,47438,559305,675

Investment securities (Notes 14, 15)

2,743

3,102

25,824

Deferred tax assets (Note 19)

5,047

5,063

47,514

Other

2,153

2,256

20,270

(98)

(105)

(923)

Other (Note 13)		Total intangible assets

Investments and other assets:

Allowance for doubtful accounts
		

Total investments and other assets

		

Total non-current assets

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

56

LINTEC ANNUAL REPORT 2018

9,846

10,31892,686

117,658

122,749

1,107,476¥ 292,735¥ 274,199$ 2,755,417

LIABILITIES AND NET ASSETS

Millions of yen

Thousands of
U.S. dollars(Note 1)

2018

2017

2018

Current liabilities:¥ 45,057$ 514,673

2,351

641

22,129Current portion of long-term loans payable (Notes 14, 16, 26)

2,986

3,051

28,109Accrued income taxes (Notes 14, 19)

2,889

3,098

27,200

89

90

846

Provision for directors’ bonuses
Provision for business structure improvement
Other (Notes 14, 16, 26)
		Total current liabilities

39

—

367

14,823

12,460139,527

77,85864,401

732,854

14,395

17,795

135,497

OVERVIEW¥ 54,678

Short-term loans payable (Notes 14, 26)

Trade notes and accounts payable (Notes 5, 14)

Non-current liabilities:
Long-term loans payable (Notes 14, 16, 26)

132

135

1,243

Net defined benefit liability (Note 17)

13,006

12,362

122,422

Other (Note 26)
		Total non-current liabilities

		Total liabilities

922

814

8,685

28,456

31,107

267,849

106,31495,5081,000,704

23,201

23,201

218,385

STRATEGY

Provision for environmental measures

Commitments and contingent liabilities (Note 2)
Net assets:
Shareholders’ equity (Note 25):
Common stock:
Authorized: 300,000,000 shares in 2018 and 2017

		Issued: 76,564,240 shares in 2018 and 2017

Capital surplus

26,82926,829252,532

Retained earnings

137,743

131,247

1,296,526

ESG

		

Less: treasury stock, at cost:(7,711)(7,714)(72,581)180,062

173,563

1,694,864

Net unrealized holding gain on securities

657

775

6,188

Foreign currency translation adjustments

8,139

6,938

76,615Remeasurements of defined benefit plans (Note 17)(3,157)(3,392)(29,718)

5,639

4,320

53,085

214

186

2,022

		

4,410,239 shares in 2018 and 4,412,515 shares in 2017		Total shareholders’ equity

Accumulated other comprehensive income

Total accumulated other comprehensive income

Share subscription rights (Note 18)

503

619

4,740

Total net assets

186,420

178,690

1,754,713

Total liabilities and net assets¥292,735¥274,199$2,755,417

Non-controlling interests
		

LINTEC ANNUAL REPORT 2018

FINANCIAL INFORMATION

		57

FINANCIAL SECTION

Consolidated Statement of Income
LINTEC Corporation and its consolidated subsidiaries
Years ended March 31, 2018 and 2017

Millions of yen

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses (Notes 6, 7)
Operating income
Non-operating income:Interest income
Dividend income
Rent income
Gain on sales of non-current assets
Insurance income
Other income
		 Total non-operating income
Non-operating expenses:
Interest expenses
Loss on retirement of non-current assets
Compensation expenses
Foreign exchange losses
Other expenses
		 Total non-operating expenses
Ordinary income
Extraordinary gain:
Gain on sales of investment securities (Note 15)
Gain on sales of non-current assets (Note 8)
Gain on liquidation of subsidiaries
		 Total extraordinary gain
Extraordinary loss:
Impairment loss (Note 9)
Provision for business structure improvement (Note 10)
Loss on liquidation of subsidiaries
Loss on sales of investment securities (Note 15)
		Total extraordinary losses
		 Profit before income taxes
Income taxes (Note 19):
Current
Deferred		Total income taxes
ProfitProfit (loss) attributable to non-controlling interests
Profit attributable to owners of parent (Note 25)

Thousands of
U.S. dollars(Note 1)

2018

2017

2018

¥249,030
186,206
62,82342,727
20,095¥205,975
153,115
52,85936,264
16,595$2,344,033
1,752,699
591,333
402,182
189,151

220
272
16
61
10
266
846

218
91
43
20
226
274
875

2,071
2,565
150
575
94
2,510
7,967

226
730
128
1,012
454
2,552
18,389

73
785
107
473
345
1,786
15,684

2,134
6,871
1,214
9,532
4,274
24,027173,092

343
—
—
343

190
121
17
329

3,233
—
—
3,233

1,041
1,024
—
—
2,066
16,666

34
—
568
13
615
15,398

9,804
9,642
—
—
19,447
156,879

5,410
107
5,517
11,149(108)¥ 11,257

5,383(1,191)
4,192
11,206(244)¥ 11,450

50,924
1,011
51,935
104,943(1,017)$ 105,960

Millions of yen

Thousands of
U.S. dollars(Note 1)

Consolidated Statement of Comprehensive Income
LINTEC Corporation and its consolidated subsidiaries
Years ended March 31, 2018 and 2017

ProfitOther comprehensive income (Note 11)
Net unrealized holding gain on securities
Foreign currency translation adjustments
Remeasurements of defined benefit plans (Note 17)
Total other comprehensive income
Comprehensive income(Comprehensive income attributable to:)Owners of parent
Non-controlling interests
The accompanying notes are an integral part of the consolidated financial statements.

58

LINTEC ANNUAL REPORT 2018

2018

2017

2018

¥11,149¥11,206$104,943

(117)
1,194
234
1,311
¥12,460

73
(907)
118
(716)
¥10,489(1,108)
11,2402,211
12,343$117,286

12,576(115)

10,765(275)

118,375(1,088)

Consolidated Statement of Changes in Net Assets
LINTEC Corporation and its consolidated subsidiaries
Years ended March 31, 2018 and 2017

Thousands

Millions of yen
Shareholders’ equity

Number ofshares ofcommonstock

Commonstock

CapitalsurplusRetainedearnings

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

76,564¥23,201¥26,829¥123,713¥(7,712)¥166,032

¥ 701

Total
Foreign Remeasure­ accumulated
currency
ments of other com­translation
definedprehensive
adjustments benefit plansincome¥7,812¥(3,509)¥5,005

Share
subscription
rights

Noncontrollinginterests

Total net
assets

¥169

¥ 895

¥172,101OVERVIEW

Balance as at April 1, 2016

Accumulated other comprehensive income

Changes during the year:
Cash dividends(4,329)(4,329)(4,329)	Profit attributable to ownersof parent

11,450Purchase of treasury stock
Disposal of treasury stock0

Change of scope of consolidation

11,45011,450

(2)

(2)

(2)

0

0

0

413

413

413

	Net changes in items other
73

(874)

116

(684)

17

(275)

(942)

Total changes during the year

than shareholders’ equity
—

—

0

7,533

(2)

7,531

73

(874)

116

(684)

17

(275)

6,589

Balance as at March 31, 2017

76,564¥23,201¥26,829¥131,247¥(7,714)¥173,563¥ 775¥6,938¥(3,392)¥4,320

¥186

¥ 619

¥178,690

Changes during the year:(4,762)

Cash dividends(4,762)(4,762)

Profit attributable to owners(0)

Disposal of treasury stock

11,257

11,257

(1)

(1)

(1)

4

4

4

—

—

Change of scope of consolidation

STRATEGY

11,257of parent
Purchase of treasury stock

Net changes in items other
(117)

1,201

235

1,318

28

(115)

1,231

Total changes during the year

—

—

(0)

6,495

3

6,498

(117)

1,201

235

1,318

28

(115)

7,729

Balance as at March 31, 2018

76,564¥23,201¥26,829¥137,743¥(7,711)¥180,062¥ 657¥8,139¥(3,157)¥5,639

¥214

¥ 503

¥186,420

than shareholders’ equity

Thousands

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

Balance as at April 1, 2017

Number ofshares ofcommonstock

Commonstock

76,564$218,385

CapitalsurplusRetainedearnings

Accumulated other comprehensive income

Net
Total unrealized
Treasury shareholders’ holding gain
stock
equity on securities$ 7,296

Total
Foreign Remeasure­ accumulated
currency
ments of other com­translation
definedprehensive
adjustments benefit plansincome$65,308$(31,934)$40,671

Share
subscription
rights$1,759Noncontrollinginterests

Total net
assets$252,534 $1,235,389$(72,613) $1,633,695$ 5,829 $1,681,955(44,823)(44,823)(44,823)

Changes during the year:

ESG

Cash dividends
Profit attributable to owners

105,960of parent
Purchase of treasury stock(1)

Disposal of treasury stock

105,960

105,960

(11)

(11)

(11)

44

42

42

—

—

Change of scope of consolidation
Net changes in items other(1,108)11,3072,215

12,414263(1,088)

11,58961,168(1,108)11,3072,215

12,414263(1,088)72,758$(72,581) $1,694,864$ 6,188$76,615$(29,718)$53,085$2,022than shareholders’ equity
Total changes during the year——

Balance as at March 31, 2018

76,564$218,385(1)

61,137$252,532 $1,296,526

32$ 4,740 $1,754,713

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

LINTEC ANNUAL REPORT 2018

59

FINANCIAL SECTION

Consolidated Statement of Cash Flows
LINTEC Corporation and its consolidated subsidiaries
Years ended March 31, 2018 and 2017

Cash flows from operating activities:
Profit before income taxes
Depreciation and amortization
Amortization of goodwill
Increase (decrease) in net defined benefit liability
Increase (decrease) in allowance for doubtful accounts
Interest and dividend income
Interest expenses
Increase (decrease) in provision for business structure improvement
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
Loss (gain) on liquidation of subsidiaries
Impairment loss
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes (paid) refund
Special retirement expenses paid
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
Proceeds from liquidation of subsidiaries
Payments of loans receivableCollection of loans receivable
Purchase of shares and membership interests of subsidiaries resulting in change inscope of consolidation (Note 12)
Other, net
Net cash used in investing activities
Cash flows from financing activities:
Increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Cash dividends paid
Purchase of treasury stock
Repayments of lease obligations
Other, net
Net cash provided by (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
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.

60

LINTEC ANNUAL REPORT 2018

Millions of yen

Thousands of
U.S. dollars(Note 1)

2018

2017

2018

¥16,666
9,031
3,427
751
(20)
(492)
226
38
(56)
374
(5,229)(3,682)
8,967
(343)
(3)
—
1,041
1,444
32,143477(233)(5,568)—26,819¥ 15,398
7,466
315
947
(24)
(310)
73
—
(132)
482
(1,565)
812
3,470
(177)
(2)
551
34
1,789
29,128325(16)(4,809)(265)
24,361$156,879
85,00732,2597,075(188)(4,637)
2,134
364
(527)
3,527
(49,224)(34,663)
84,411(3,233)
(29)
—
9,804
13,594
302,554
4,495(2,194)(52,411)—
252,444(7,631)
8,098(8,084)
132
(123)
(4)
536
—
(24)
6

(10,897)
12,164(13,049)
181
(199)
(5)
361
24
(2)
4

(71,835)
76,230(76,097)
1,242(1,162)
(41)
5,049
—
(229)
58

(308)

(36,909)(2,900)(129)(7,532)(50)(48,378)(1,217)(70,903)

1,692—(3,059)(4,762)(1)(232)
0(6,363)834
13,75741,284(1,748)20,850(9,253)(4,328)
(2)
(258)
0
5,257
35
(18,723)
60,323

15,933—(28,797)(44,831)(11)(2,190)0(59,897)
7,855
129,498
388,600—¥55,042(315)¥ 41,284—$518,098

Notes to Consolidated Financial Statements
LINTEC Corporation and its consolidated subsidiaries
March 31, 2018(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 theoriginal cost. Securities without market value are stated at cost determined by the moving-average method.
(e) Derivatives
Derivatives are stated at fair value.
(f) 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.
(g) Property, plant and equipment (Excluding leased assets)
Depreciation is computed by the straight-line method over the useful livesof the respective assets.
The significant useful lives are summarized as follows:		 Buildings and structures
3–50 years
		 Machinery, equipment and vehicles
3–17 years(h) Intangible assets (Excluding leased assets)
Capitalized costs of software for internal use are amortized using thestraight-line method over useful lives (5 years).
(i) Leased assets
Leased assets arising from finance lease transactions which transfer
ownership to the lessees 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 lessees are depreciated to a residual value ofzero by the straight-line method using the contract term as the useful life.
(j) Allowance for doubtful accounts
The allowance for doubtful accounts is provided at the amount of estimateduncollectible accounts, based on individual collectibility with respect toidentified doubtful receivables and past experience of doubtful receivables.
(k) 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.
(l) 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.
(m) 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.
(n) Accounting for consumption taxes
Transactions subject to consumption taxes are recorded at amounts
exclusive of consumption taxes.

STRATEGYESG
FINANCIAL INFORMATION

LINTEC ANNUAL REPORT 2018

OVERVIEW

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 ¥106.24=U.S.$1, the prevailingexchange rate as of March 31, 2018. 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 aresult, 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, 2018 presentation.
(b) Consolidation
The accompanying consolidated financial statements include the accountsof the Company and its 40 significant subsidiaries as of March 31, 2018,
but exclude subsidiaries whose total assets, net sales, profit and retained
earnings are not material in relation to the comparable amounts in thesestatements. All significant intercompany accounts and transactions havebeen eliminated in consolidation.
Goodwill is amortized over periods of the useful 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 to reflect 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 rates 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
and expense accounts are translated into Japanese yen by applying the
average exchange rates during the fiscal year.
Translation differences after allocating to non-controlling interest for
portions attributable to non-controlling interest are reported as foreign
currency translation adjustments in a separate component of net assets
in the accompanying consolidated balance sheet.

61

FINANCIAL SECTION(o) Cash and cash equivalents
Cash and cash equivalents are composed of cash and time deposits
having maturities within three months from acquisition, all of which are
low-risk, short-term financial instruments readily convertible into cash.
(p) Research and development costs
Research and development costs are charged to income when incurred.
(q) 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.
(r) 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 (other thanthe 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 made at any time byresolution of the shareholders or by the Board of Directors if certain
conditions are met, but neither the capital reserve nor the legal reserve isavailable for distributions.
(s) Hedge accounting(1) Hedge accounting method	The exceptional accounting treatment (the “Tokurei-shori”) is appliedwith respect to interest rate swaps that meet the requirements tohedge the cash flow volatility of certain foreign currency-denominatedloans. The Tokurei-shori and the designated hedge accounting (the“Furiate-shori”) are applied with respect to interest rate and currency
swaps that meet the requirements to hedge the cash flow volatility
caused by foreign exchange rate fluctuations on certain foreign
currency-denominated loans.
(2) Hedging instruments and hedged items
1Hedging instruments......Interest rate swaps
	  Hedging items.................Foreign currency-denominated loans
2Hedging instruments......Interest rate and currency swaps
	  Hedging items.................Foreign currency-denominated loans(3) Hedging policy	In accordance with the internal regulation, risk of fluctuations ininterest rates and foreign exchange is hedged.
(4) Method of evaluating the effectiveness of hedges
	The evaluation of effectiveness is omitted for interest rate swaps
accounted for under the Tokurei-shori and for interest rate and currency
swaps accounted for under the Tokurei-shori and Furiate-shori.
(t) Accounting standards issued but not yet applied•A ccounting Standard for Revenue Recognition (ASBJ Statement No. 29,
issued on March 30, 2018)•G
 uidance on Accounting Standard for Revenue Recognition (ASBJ
Guidance No. 30, issued on March 30, 2018)(1) Overview
	This is a comprehensive accounting standard for revenue recognition.
Revenue is recognized using the following five steps.
Step 1: Identify the contract with a customer.
Step 2: Identify the separate performance obligations in the contract.
Step 3: Determine the transaction price.
Step 4: A llocate the transaction price to the separate performanceobligations in the contract.
Step 5: R ecognize revenue when the entity satisfies a performanceobligation.
(2) Application schedule	These accounting standards will be adopted from the beginning of theyear ending March 31, 2022.
(3) Effect of application
	The amount of the impact was still being assessed when these
consolidated financial statements were prepared.

2. Commitments and Contingent Liabilities
The Company and its consolidated subsidiaries had unused lines of credit for short-term financing aggregating ¥26,521 million (U.S. $249,636 thousand)and ¥23,194 million at March 31, 2018 and 2017, respectively.
3. Inventories
Merchandise and finished goods, work in process, and raw materials and supplies as of March 31, 2018 and 2017 were as follows:
Millions of yen

Thousands of
U.S. dollars

Merchandise and finished goods

2018¥14,4212017¥13,0312018$135,746

Work in process

12,575

11,951

118,367

Raw materials and supplies

11,5089,601

108,330¥38,506¥34,584$362,443

Total

4. Reduction Entry
Reduction entry amounts and details deducted from the acquisition cost of property, plant and equipment as of March 31, 2018 and 2017 were as follows:

Buildings and structures
Machinery, equipment and vehicles
Total

62

LINTEC ANNUAL REPORT 2018

2018
¥19

Millions of yen

Thousands of
U.S. dollars

2017
¥—

2018
$181

36

—

340

¥55

¥—

$522

Millions of yen

Thousands of
U.S. dollars

Trade notes and accounts receivable2018¥4,988

2017
¥—

2018
$46,954

Trade notes and accounts payable

8,521

—

80,214

Millions of yen

Thousands of
U.S. dollars

2017¥ 5,1252018$ 49,978OVERVIEW

5. 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 current fiscal year was a non-business day of financial institutions, the following amounts ofreceivables and payables maturing as of March 31, 2018 and 2017 were included in the ending balance.

6. Selling, General and Administrative Expenses
Major items included in selling, general and administrative expenses for the years ended March 31, 2018 and 2017 were as follows:2018¥ 5,309

Transportation and warehousing expenses

(12)

(44)

7,743

88,086Retirement benefit expenses

321

423

3,029

Provision for directors’ bonuses

85

95

800

Depreciation and amortization

1,350

1,092

12,714

Research and development expenses

7,925

7,639

74,600Other

18,381

14,156173,017¥42,727¥36,264$402,182

Total

STRATEGY

(4)
9,358

Provision for allowance for doubtful accounts
Salaries and allowances

7. 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, 2018 and2017 were ¥7,925 million (U.S.$74,600 thousand) and ¥7,639 million, respectively.
8. Gain on Sales of Noncurrent Assets
Gain on sales of noncurrent assets was related to sales of land for the year ended March 31, 2017.
9. Impairment Loss
The Company has recognized impairment loss on the following classes of assets for the years ended March 31, 2018 and 2017:

Major use—

Location

Category

Kentucky State, U.S.A.

GoodwillThousands of
U.S. dollars

ESG

Millions of yen

2018

Impairment Loss

¥1,041$9,804The Companies categorize goodwill into groups mainly based on each company in consolidated subsidiaries for the goodwill impairment testing.
VDI, LLC recognized an impairment loss of ¥1,041 million for the goodwill as future operating results are expected to be lower than the business planat the time of acquisition of VDI, LLC.
The recoverable amount of the goodwill is measured at the value in use determined by future cash flows discounted at 18.0%.
Millions of yen
Location

Category

Pressure-sensitive adhesive related
products manufacturing equipment

Massachusetts State, U.S.A.

Machinery, equipment and vehicles

2017

Impairment Loss

¥34

FINANCIAL INFORMATION

Major use(1)		Circumstances leading to the recognition of impairment loss
The impairment loss above has been recognized because the asset has decreased in profitability.
(2) Method of calculating recoverable amounts
The recoverable amounts of the assets above are the net realizable value and based on a third-party appraisal value.
10. Provision for Business Structure Improvement
The Company has recognized provision for business structure improvement for a management rationalization of MADICO, INC., its wholly owned consolidated subsidiary in the U.S. for the year ended March 31, 2018 and the loss is mainly related to the special retirement expenses.

LINTEC ANNUAL REPORT 2018

63

FINANCIAL SECTION

11. Comprehensive Income
Reclassification adjustment and tax effect of other comprehensive income for the years ended March 31, 2018 and 2017 were as follows:
Millions of yen

Thousands of
U.S. dollars

2018

2017

2018

¥ 172

¥ 340

$ 1,625

(343)

(177)

(3,233)

(170)

163

(1,608)

53

(89)

499

(117)

73

(1,108)

1,194

(453)

11,240

―

(454)

―

1,194

(907)

11,240Net unrealized holding gain on securities:
Amount incurred during the fiscal year
Reclassification adjustment
		

Prior to deducting tax effect		Tax effect		

Net unrealized holding gain on securities

Foreign currency translation adjustments:
Amount incurred during the fiscal year
Reclassification adjustment
		

Prior to deducting tax effect

―

―

—

1,194

(907)

11,240

Amount incurred during the fiscal year

153

(229)

1,448

Reclassification adjustment

185

397

1,741
3,190

		Tax effect		Foreign currency translation adjustments

Remeasurements of defined benefit plans:

338

167

		Tax effect

(103)

(49)

(978)

		

234

118

2,211

¥1,311¥(716)$12,343

		Prior to deducting tax effectRemeasurements of defined benefit plans

Total other comprehensive income

12. Cash and Cash Equivalents
1. 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, 2018 and 2017 were as follows:

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

2018¥58,614

Millions of yen

Thousands of
U.S. dollars

2017¥45,0602018$551,721(3,572)(3,775)(33,622)¥55,042¥41,284$518,098

2. Information on assets and liabilities of newly acquired consolidated subsidiaries through acquisition of shares or membership interests
	There are no assets and liabilities of newly acquired consolidated subsidiaries through acquisition of shares or membership interests for theyear ended March 31, 2018.
		 Assets and liabilities of newly acquired consolidated subsidiaries through acquisition of shares or membership interests for the year ended
March 31, 2017 was as follows:(1) Assets and liabilities of VDI, LLC (a newly acquired consolidated subsidiary through acquisition of membership interests) at the inception of its
consolidation, the acquisition cost of its membership interest and the related expenditures (net) for the acquisition were as follows:
Millions of yen

2017
Current assets

473

Non-current assets

1,713

Goodwill

1,839

Current liabilities(222)

Non-current liabilities(1,102)Acquisition cost of membership interests¥ 2,701

Cash and cash equivalents
Net expenditures for acquisition

64¥

LINTEC ANNUAL REPORT 2018(95)
¥ 2,605

(2) Assets and liabilities of MACtac Americas, LLC (another newly acquired consolidated subsidiary through acquisition of membership interests) at the
inception of its consolidation, the acquisition cost of its membership interest and the related expenditures (net) for the acquisition were as follows:
Millions of yen

OVERVIEW

2017
Current assets¥ 9,066

Non-current assets

6,820

Goodwill

30,889Current liabilities(4,794)Non-current liabilities(7,564)

Acquisition cost of membership interests¥34,417

Cash and cash equivalents(775)

Accrued amount of the acquisition cost of membership interests(301)

Net expenditures for acquisition¥33,340(3) Assets and liabilities of Lintec Graphic Films Limited (the other newly acquired consolidated subsidiary through acquisition of shares) at the inceptionof its consolidation, the acquisition cost of its shares and the related expenditures (net) for the acquisition were as follows:
Millions of yen

STRATEGY

2017
Current assets¥ 378

Non-current assets

144

Goodwill

733

Current liabilities(171)

Non-current liabilities(59)

Acquisition cost of shares¥1,024

Cash and cash equivalents(61)

Net expenditures for acquisition¥ 963

3. Assets and liabilities related to finance lease transactions newly recognized for the years ended March 31, 2018 and 2017 were ¥138 million(U.S.$1,308 thousand) and ¥183 million, respectively.

ESG

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, 2018 and 2017, and are depreciated in the same way as the owned property, plant and equipment.
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, 2018 and 2017. These leased assets are
depreciated to a residual value of zero by the straight-line method using the contract term as the useful life.
The minimum lease payments under noncancellable operating leases as of March 31, 2018 and 2017 were as follows:

Due within 1 year
Due after 1 year
Total

2018
¥ 629

Millions of yen

Thousands of
U.S. dollars

2017
¥ 419

2018
$ 5,928

1,458

595

13,728¥2,088¥1,015$19,656
FINANCIAL INFORMATION

LINTEC ANNUAL REPORT 2018

65

FINANCIAL SECTION

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 loans.
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 and risk 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 fromits customers. Regarding the risk pursuant to the internal regulations for
managing its credit exposure and trade receivables, due dates and balances
are managed appropriately for each customer to mitigate risks of uncollectible accounts.
Investment securities are stocks being exposed to market price risk, andthese are mainly the stocks of companies with which the Group has business
relationships and they are periodically confirmed the market value.

All of the trade payables—trade notes and accounts payable—are due
within 1 year.
The Group has commitment line contracts with financial institutions andthe short-term loans payable are raised mainly for business activities andcapital investments.
The long-term loans payable are raised for corporate acquisitions. Interest
rate swaps and interest rate and currency swaps are used to manage
exposure to market risks from changes in interest rates and foreign currency
exchange rate of the long-term loans payable.
The Group is exposed to liquidity risk from its business-related obligations
and loans but the Company and its consolidated subsidiaries prepare andimplement financing plans to manage the liquidity risk.
The Group conducts and manages derivative transactions based oninternal rules and regulations. Executive officer administration division is incharge of managing derivative transactions and related reports are submitted
to top management for each case.
In addition, the contract amounts of derivative transactions described
below in Note 16, “Derivatives,” do not represent the market risk associatedwith derivative transactions.

2. Fair value and other matters related to financial instruments
Carrying value on the consolidated balance sheet as of March 31, 2018 and 2017 along with their fair value and the variance were shown in the following table.
Thousands of
U.S. dollars

Millions of yen

2018(1) Cash and deposits(2) Trade notes and accounts receivable

Carrying value

Fair value

Variance

Carrying value

Fair value

Variance¥ 58,614¥ 58,614¥—$ 551,721$ 551,721

72,59072,590—683,269

683,269—$—(3) Investment securities
2,160

2,160

—

20,335

20,335—(4) Trade notes and accounts payable(54,678)(54,678)—(514,673)(514,673)—(5) Short-term loans payable(2,351)(2,351)—(22,129)(22,129)—(6) Accrued income taxes(2,889)(2,889)—(27,200)(27,200)—(7) Long-term loans payable(17,381)(17,223)(157)(163,607)(162,123)(1,484)

9

9

—

85

85

—

Other securities(8) Derivatives

Notes: i. Figures shown in parentheses are liability items.
ii. The current portion of long-term loans payable is included in long-term loans payable.
iii. The value of assets and liabilities arising from derivatives is shown by net value.
Millions of yen

2017(1) Cash and deposits(2) Trade notes and accounts receivable

Carrying value

Fair value

Variance¥ 45,060¥ 45,060¥—

66,80166,801—(3) Investment securities
Other securities(4) Trade notes and accounts payable(5) Short-term loans payable

2,519

2,519

—

(45,057)(45,057)

—
—

(641)

(641)

(6) Accrued income taxes(3,098)(3,098)—(7) Long-term loans payable(20,847)(20,888)

41

(37)

(37)

—

(8) Derivatives

Notes: i. Figures shown in parentheses are liability items.
ii. The current portion of long-term loans payable is included in long-term loans payable.
iii. The value of assets and liabilities arising from derivatives is shown by net value.

66

LINTEC ANNUAL REPORT 2018

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

Thousands of
U.S. dollars

2018

2017

2018

Carrying value

Carrying value

Carrying value

¥583

¥583

$5,488Unlisted stocks

OVERVIEW

Note 1:	Method of computing the fair value of financial instruments, securities and derivatives(1) Cash and deposits; (2) Trade notes and accounts receivable	Since these items are settled in a short period of time and have 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 loans payable; (6) Accrued
income taxes	Since these items are settled in a short period of time and have fair values that are
virtually the same as the carrying value on the ledger, the carrying value has been used.
(7) Long-term loans payable	The fair value of long-term loans payable is measured as the net present value of
estimated cash flows by discounting the amount of principal and interest value using
the assumed interest rate applied to a new similar loan. The fair value of long-termloans payable with variable interest rates hedged by interest rate swaps subject tothe special treatment or interest rate and currency swaps subject to the totaltreatment are calculated based on the net present value of the total amount ofprinciple and interest, accounted for together with the interest rate swap or interest
rate and currency swap transactions, discounted by the interest rate rationallyestimated for a similar loan.
(8) Derivatives
Please see Note 16, “Derivatives.”

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

Thousands of
U.S. dollars

2018

2017

2018

Within 1 year

Within 1 year

Within 1 year

¥ 58,591¥ 45,038$ 551,505

72,590¥131,182

66,801¥111,839

683,269$1,234,774

Cash and deposits
Trade notes and accounts
receivable
Total

STRATEGY

Note 4: Planned redemption amounts after the balance sheet date for borrowings were as follows:
Millions of yen

2018
Within 1 year

Short-term loans payable
Current portion of long-term loans payable
Long-term loans payable
Total¥2,351
2,986—¥5,337

Over 1 year
within 2 years

Over 2 years
within 3 years

Over 3 years
within 4 years

¥

¥

¥

—
—
2,986
¥2,986——
9,177¥9,177

Over 4 years
within 5 years

Over 5 years

¥ —
—
531
¥531

¥ —
—
531
¥531

—
—
1,168
¥1,168

Thousands of
U.S. dollars

2018
Within 1 year

$22,129
28,109—$50,238

Over 2 years
within 3 years

Over 3 years
within 4 years

Over 4 years
within 5 years

Over 5 years

$

$

$

$

$

—
—
28,109$28,109——
86,388$86,388——
11,000$11,000——
5,000$5,000——5,000$5,000ESG

Short-term loans payable
Current portion of long-term loans payable
Long-term loans payable
Total

Over 1 year
within 2 years

Millions of yen

2017
Within 1 year

Short-term loans payable
Current portion of long-term loans payable
Long-term loans payable
Total

¥ 641
3,051
—
¥3,693

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 5 years

¥

¥

¥

¥

¥

—
—
3,058
¥3,058——3,058¥3,058——9,321¥9,321——
1,234¥1,234——
1,121¥1,121FINANCIAL INFORMATION

LINTEC ANNUAL REPORT 2018

67

FINANCIAL SECTION

15. Marketable and Investment Securities
1. The carrying value and acquisition cost of other securities as of March 31, 2018 and 2017 were as follows:
Millions of yen

Thousands of
U.S. dollars

2018
Carrying value

Acquisition cost

Unrealized gain
(loss)

Carrying value

Acquisition cost

Unrealized gain
(loss)

Stocks¥1,754

¥ 796

¥957

$16,511$ 7,501$9,009

Bonds

—

—

—

—

—

—

Other

—

—

—

—

—

—

¥1,754

¥ 796

¥957

$16,511$ 7,501$9,009Stocks

¥ 406

¥ 415

¥   (9)$ 3,824$ 3,914

$

Bonds

—

—

—

—

—

Other

—

—

—

—

—

Subtotal

¥ 406

¥ 415

¥   (9)$ 3,824$ 3,914$

		Total¥2,160¥1,212¥947$20,335$11,416$8,919Description

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

(90)
—
—
(90)

Millions of yen

2017
Carrying value

Acquisition cost

Unrealized gain
(loss)

Stocks¥2,180¥ 975¥1,205

Bonds

—

—

—

Other

—

—

—

¥2,180¥ 975¥1,205

Stocks

¥ 338

¥ 425

¥   (86)

Bonds

—

—

—

Other

—

—

—

Subtotal

¥ 338

¥ 425

¥   (86)

		Total¥2,519¥1,400¥1,118Description

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

2. Other securities sold during the years ended March 31, 2018 and 2017 were as follows:
Thousands of
U.S. dollars

Millions of yen

2018
Description

Sales amount

Aggregate gains

Aggregate losses

Sales amount

Aggregate gains

Aggregate losses

Stocks

¥536

¥343

¥0

$5,049$3,233

$0

Bonds

—

—

—

—

—

—

Other

—

—

—

—

—

—

¥536

¥343

¥0

$5,049$3,233$0

Total

Millions of yen

2017
Description

Sales amount

Aggregate gains

Aggregate losses

Stocks

¥361

¥190

¥13

Bonds

—

—

—

Other

—

—

—

¥361

¥190

¥13

Total

68

LINTEC ANNUAL REPORT 2018

16. Derivatives
1. Derivatives to which the Company did not apply hedge accounting as of March 31, 2018 and 2017 were as follows:(Currency related)

OVERVIEW

Millions of yen

2018
Contract amounts
Total

Over 1 year

Fair value

Unrealized gain
(loss)

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

¥607

¥—

¥2

¥2

Sell: U.S. dollars (buy Korean won)

107

—

3

3

Sell: Japanese yen (buy Korean won)

62

—

(0)

(0)

Nature of transaction

Off-market transactions

Forward exchange contracts to:

71

—

3

3

¥848

¥—

¥9

¥9

Sell: U.S. dollars (buy Singapore dollars)
Total

Thousands of U.S. dollars

2018
Contract amounts
Nature of transaction

Off-market transactions

Total

Over 1 year

Fair value

Unrealized gain
(loss)

Forward exchange contracts to:$5,719

$—

$25

$25

1,011

—

34

34

Sell: Japanese yen (buy Korean won)

586

—

(3)

(3)

Sell: U.S. dollars (buy Singapore dollars)

671

—

29

29

$7,989

$—

$85

$85

Total

STRATEGY

Sell: U.S. dollars (buy Japanese yen)Sell: U.S. dollars (buy Korean won)Note: Method of computing the fair value is based on information provided by financial institutions at the end of the fiscal year.
Millions of yen

2017
Contract amounts
Nature of transaction

Off-market transactions

Total

Over 1 year

Fair value

Unrealized gain
(loss)¥(14)

Forward exchange contracts to:
¥ 919

¥—

¥(14)

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

58

—

(2)

(2)

Sell: India rupee (buy Japanese yen)

345

—

(19)

(19)

¥1,323

¥—

¥(37)

¥(37)

Total

ESG

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

2. Derivatives to which the Company applied hedge accounting as of March 31, 2018 and 2017 were as follows:(Interest rate related)

Millions of yen

2018
Contract amounts
Hedge accounting method

Type of derivatives

Major hedged items

The Tokurei-shori forinterest rate swaps

Interest rate swaps
Variable rate receipt / Fixed rate payment

Long-term loans payable

Total

Over 1 year

Fair value¥2,018¥1,806¥(Note)Thousands of U.S. dollars

2018
Hedge accounting method

Type of derivatives

Major hedged items

The Tokurei-shori forinterest rate swaps

Interest rate swaps
Variable rate receipt / Fixed rate payment

Long-term loans payable

Total

Over 1 year

Fair value$19,000$17,000$(Note)FINANCIAL INFORMATION

Contract amounts

Note: Interest rate swaps subject to the Tokurei-shori for interest rate swaps are treated together with the hedged long-term loans payable. Accordingly, the fair value of those interest rate
swaps is included in the fair value of the long-term loans payable.
Millions of yen

2017
Contract amounts
Hedge accounting method

Type of derivatives

Major hedged items

The Tokurei-shori forinterest rate swaps

Interest rate swaps
Variable rate receipt / Fixed rate payment

Long-term loans payable

Total

Over 1 year

Fair value¥2,355¥2,131¥(Note)Note: Interest rate swaps subject to the Tokurei-shori for interest rate swaps are treated together with the hedged long-term loans payable. Accordingly, the fair value of those interest rate
swaps is included in the fair value of the long-term loans payable.

LINTEC ANNUAL REPORT 2018

69

FINANCIAL SECTION(Interest rate and currency related)

Millions of yen

2018
Contract amounts
Hedge accounting method

Type of derivatives

Major hedged items

The Tokurei-shori and
Furiate-shori for interest
rate and currency swaps

Interest rate and currency swaps
Variable rate receipt / Fixed rate payment
U.S.$ receipt / Japanese ¥ payment

Long-term loans payable

Total

Over 1 year

Fair value¥5,993¥5,405¥(Note)Thousands of U.S. dollars

2018
Contract amounts
Hedge accounting method

Type of derivatives

Major hedged items

The Tokurei-shori and
Furiate-shori for interest
rate and currency swaps

Interest rate and currency swaps
Variable rate receipt / Fixed rate payment
U.S.$ receipt / Japanese ¥ payment

Long-term loans payable

Total

Over 1 year

Fair value$56,415$50,883$(Note)Note: Interest rate and currency swaps subject to the Tokurei-shori and Furiate-shori for interest rate and currency swaps are treated together with the hedged long-term loans payable.
Accordingly, the fair value of those interest rate and currency swaps is included in the fair value of the long-term loans payable.
Millions of yen

2017
Contract amounts
Hedge accounting method

Type of derivatives

Major hedged items

The Tokurei-shori and
Furiate-shori for interest
rate and currency swaps

Interest rate and currency swaps
Variable rate receipt / Fixed rate payment
U.S.$ receipt / Japanese ¥ payment

Long-term loans payable

Total

Over 1 year

Fair value¥6,581¥5,993¥(Note)Note: Interest rate and currency swaps subject to the Tokurei-shori and Furiate-shori for interest rate and currency swaps are treated together with the hedged long-term loans payable.
Accordingly, the fair value of those interest rate and currency swaps is included in the fair value of the long-term loans payable.

17. 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, 2018 and 2017.
1. Defined 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

2018¥36,9652017¥36,5492018$347,939

Service cost

1,795

1,754

16,903

Interest cost

189

187

1,778

Actuarial gains (losses)

(89)

(4)

(846)

Retirement benefits paid

(1,575)(1,570)(14,828)

Increase (decrease) from foreign currency translation

45

(26)

426

Other

68

75

641

¥37,398¥36,965$352,015

Retirement benefit obligations at beginning of year

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

70

LINTEC ANNUAL REPORT 2018

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

2018¥24,603

Thousands of
U.S. dollars

2017¥25,0732018$231,579
6,899

Expected return on plan assets

732

726

Actuarial gains (losses)

63

(239)

598

Contributions from the employer

510

521

4,805

Retirement benefits paid
Plan assets at end of year

(1,518)(1,479)(14,289)¥24,391¥24,603$229,592

OVERVIEW

Plan assets at beginning of year

Millions of yen(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

2018¥ 36,565

2017¥ 36,244

2018$ 344,179

Plan assets(24,391)(24,603)(229,592)

12,173

11,641

114,586

832

721

7,836

Net amount of liabilities and assets recorded in the consolidated balance sheet¥ 13,006¥ 12,362$ 122,422

Net defined benefit liability¥ 13,006¥ 12,362$ 122,422―――¥ 13,006¥ 12,362$ 122,422

Millions of yen

Thousands of
U.S. dollars

2017¥1,754
187
(726)
681
(283)
(25)
¥1,5872018$16,903
1,778(6,899)4,354(2,612)
1$13,526

Retirement benefit obligations of an unfunded pension plan

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

STRATEGY

Retirement benefit obligations of a funded pension plan(4) Components of retirement benefit expenses

2018¥1,795
189
(732)
462
(277)
0
¥1,437

ESG

Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial losses (gains)
Amortization of prior service cost
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 the retirement benefit expenses for the defined benefit plans.
iii.	Other than the above retirement benefit costs in defined benefit pension plan, MADICO, INC. records special retirement expenses amount to ¥866 million as “Provision for businessstructure improvement” in Extraordinary loss for the year ended March 31, 2018.

FINANCIAL INFORMATION

LINTEC ANNUAL REPORT 2018

71

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

Prior service cost
Actuarial losses (gains)
Total

2018
¥ 277
(616)
¥(338)

Millions of yen

Thousands of
U.S. dollars

2017
¥ 283
(451)
¥(167)

2018$ 2,612(5,803)$(3,190)(6) Remeasurements of defined benefit plans recorded in accumulated other comprehensive income
Breakdown of items (before tax effect) recorded in accumulated other comprehensive income of remeasurements of defined benefit plans are as follows:

Unrecognized prior service cost
Unrecognized actuarial losses (gains)
Total

2018
¥ (267)
4,818¥4,550Millions of yen

Thousands of
U.S. dollars

2017¥ (545)
5,434¥4,8892018$ (2,517)
45,351$42,834(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, 2018 and 2017 was as follows:
Bonds
StocksAlternatives
Cash and deposits
Other
Total

2018
69.6%
14.8%
6.6%
5.5%
3.5%
100.0%

2017
52.9%
22.9%
15.9%
5.1%
3.2%
100.0%

Note: Alternatives are mainly investments on hedge funds.

2. Method for determining the expected long-term rate of return on plan assets
		In determining the expected long-term rate of return on plan assets, estimates are considered based on the current and expected allocation of plan
assets and the current and expected long-term rate of return from the various assets comprising the plan assets.
(8) Major actuarial assumptions as of March 31, 2018 and 2017 were as follows:
Discount rate
Expected long-term rate of return on plan assets
Expected salary increase rate

2018
Mainly 0.5%
Mainly 3.5%
Mainly 2.8%

2017
Mainly 0.5%
Mainly 3.5%
Mainly 2.8%

2. Defined contribution plans
Some of the consolidated subsidiaries contributed ¥272 million (U.S. $2,561 thousand) and ¥160 million, for the years ended March 31, 2018 and 2017 to
the defined contribution plans, respectively.

72

LINTEC ANNUAL REPORT 2018

18. Stock Option Plan
Components of stock-based compensation expense for the years ended March 31, 2018 and 2017 were as follows:

Selling, general and administrative expenses

Thousands of
U.S. dollars

2018
¥ 1

2017
¥ 2

2018
$ 17

30

15

289

OVERVIEW

Cost of sales

Millions of yen

The following table summarizes contents of stock options as of March 31, 2018:
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

Period of providing service for stock options
Exercise period

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

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 2018

FINANCIAL INFORMATION

Period of providing service for stock options
Exercise period

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

ESG

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

STRATEGY

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

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 directorof the Company at the time of grant.
—
From August 26, 2006 to August 25, 2026

73

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

74

LINTEC ANNUAL REPORT 2018

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 2015 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 2016 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

OVERVIEWThe Company
August 6, 2015
Directors, 11 and Executive Officers, 12
Common stock 14,600 shares
August 21, 2015
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, 2015 to August 21, 2035

Period of providing service for stock options
Exercise period
The 2017 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

STRATEGY

The Company
August 9, 2016
Directors, 11 and Executive Officers, 12
Common stock 12,200 shares
August 24, 2016
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 25, 2016 to August 24, 2036

The Company
August 7, 2017
Directors, 11 and Executive Officers, 12
Common stock 14,400 shares
August 22, 2017
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, 2017 to August 22, 2037

Period of providing service for stock options
Exercise period

The following tables summarize the scale and movement of stock options for the years ended March 31, 2018 and 2017:(Non-vested stock options)
The 2007
plan

The 2008
plan

The 2009
plan

The 2010
plan

The 2011
plan

The 2012
plan

The 2013
plan

The 2014
plan

The 2015
plan

The 2016
plan

The 2017
plan

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

—
14,400
—

—

—

—

—

—

—

—

—

—

—

—

14,400

—

—

—

—

—

—

—

—

—

—

—

—

ESG

Stock options outstanding
at April 1, 2017
Stock options granted
Forfeitures	Conversion to vested
stock options
Stock options outstandingat March 31, 2018

(Unit: shares)
The 2006
plan

FINANCIAL INFORMATION

LINTEC ANNUAL REPORT 2018

75

FINANCIAL SECTION(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

The 2015
plan

The 2016
plan

The 2017
plan

3,300

2,900

5,200

7,700

7,200

6,800

13,60020,60017,20014,60012,200

—

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

—
500
—

—
600
—

—
600
—

—
500
—

—
500
—

14,400
—
—

3,300

2,900

5,200

7,700

7,200

6,800

13,10020,00016,60014,10011,70014,400Stock options outstanding
at April 1, 2017
	Conversion fromnon-vested stock
options
Stock options exercised
Forfeitures
Stock options outstandingat March 31, 2018

The following table summarizes the price information of stock options as of March 31, 2018:

Exercise price
Average market priceof the stock at the timeof 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

The 2015
plan

The 2016
plan

The 2017
plan

¥

¥

¥

¥

¥

¥

¥

¥

¥

¥

¥

¥

1

—
2,788

1

—
1,947

1

—
1,481

1

—
1,726

1

—
1,474

1

—
1,303

1

3,054
1,203

1

3,054
1,595

1

3,054
1,825

1

3,054
2,283

1

3,054
1,445

1

—
2,261

The fair value of stock options granted during the year ended March 31, 2018 was valued by using the Black-Scholes option pricing model with thefollowing assumptions:
The 2017 plan

34.909%10 years¥66
0.048%

Volatility
Expected remaining period
Expected dividend per share
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 30.86% for the years ended March 31, 2018 and 2017, 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 of income forthe years ended March 31, 2018 and 2017 differ from the statutory tax rate for the following reasons: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
Consolidated adjustments of dividend income from consolidated subsidiaries
The impairment loss on goodwill
Other, net
Effective tax rate

76

LINTEC ANNUAL REPORT 2018201830.86%

2017
30.86%

0.35(11.88)0.35(6.25)(2.62)
5.06
12.51
2.12
2.61
33.11%

0.39(16.68)0.37(5.14)(3.28)
1.56
18.12
―
1.03
27.23%

2. The significant components of deferred tax assets and liabilities as of March 31, 2018 and 2017 were as follows:
Thousands of
U.S. dollars

2017

2018

2018
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 of depreciation expense
Other
		 Gross deferred tax assets
Valuation allowance		Net deferred tax assets

739
157
995
3,904
909
609
180
133
356
275
751
9,012
(1,206)
7,806

¥

699
170
1,107
3,736
1,141
562
269
138
350
331
680
9,188
(959)
8,229

$ 6,963
1,477
9,365
36,754
8,560
5,735
1,702
1,252
3,354
2,593
7,071
84,832(11,351)
73,480

(181)
(290)
(125)
(654)
(36)
(1,287)¥ 6,518

(187)
(343)
(508)
(460)
(75)
(1,575)¥ 6,654(1,711)(2,731)(1,178)(6,158)(341)(12,120)$ 61,360

Millions of yen

Thousands of
U.S. dollars

STRATEGY

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

¥

OVERVIEW

Millions of yen

Note: The net deferred tax assets as of March 31, 2018 and 2017 were included in the following items on the consolidated balance sheets:

Current assets–Deferred tax assets

2018¥1,4832017¥1,6142018$13,962

Noncurrent assets–Deferred tax assets

5,063

47,51491086Noncurrent liabilities–Other

3

13

30

ESG

5,047

Current liabilities–Other

FINANCIAL INFORMATION

LINTEC ANNUAL REPORT 2018

77

FINANCIAL SECTION

20. Business Combinations
No specific disclosure for business combination has been made for the year ended March 31, 2018 because of its immateriality.
21. Asset Retirement Obligations
There is no asset retirement obligation as of March 31, 2018 and 2017.
22. Rental Property
No specific disclosure for rental property has been made as of March 31, 2018 and 2017 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 fromother business 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, Labeling machines, Automobile-use adhesive products, Industrial-use adhesive
tapes, Window films, Films for outdoor signs and advertising, Interior finishing mounting films

Electronic and Optical Products

Semiconductor-related adhesive tapes, Semiconductor-related equipment, Multilayer ceramic capacitor-related tapes,
LCD- and OLED display-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 adhesive products, 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.

78

LINTEC ANNUAL REPORT 2018

3. Information on sales and income (loss), assets, and other items by reportable segment for the years ended March 31, 2018 and 2017 are outlined as follows:
Millions of yen

2018Electronic and
OpticalProducts

Paper andConverted
Products

Total¥121,691¥88,882¥38,456¥249,030

57

88

15,571

15,717(15,717)—¥121,748¥88,970¥54,027¥264,747¥(15,717)¥249,030¥

3,040¥11,972¥ 4,996¥ 20,009¥

86¥ 20,095

Depreciation and amortization

¥

3,863

¥ 3,049¥ 2,118

¥

9,031

¥  

—

¥

9,031

Amortization of goodwill

¥

3,427

¥

¥

¥

3,427

¥  

—

¥

3,427

Adjustments

OVERVIEW

Printing andIndustrial Materials
Products

Consolidation

Net sales
Net sales to external customers
Intra-segment sales and transfers
Total
Segment income¥  —¥249,030

Others——Thousands of U.S. dollars

2018
Printing andIndustrial Materials
Products

Electronic and
OpticalProducts

Paper andConverted
Products

Total$1,145,438$836,620$361,974$2,344,033

539

832

146,569

147,942(147,942)—$1,145,978$837,452$508,544$2,491,975$(147,942)$2,344,033$

28,622$112,692$ 47,027$ 188,341$

810$ 189,151

Depreciation and amortization$

36,362$ 28,706$ 19,938$

85,007$  —$

85,007

Amortization of goodwill$

32,259$$$32,259$  —$

32,259Adjustments

Consolidation$  $2,344,033

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

STRATEGY

Net sales

Others——

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

2017Electronic and
OpticalProducts

Paper andConverted
Products

Total¥85,661¥83,205¥37,108¥205,975

60

73

15,523

15,657(15,657)—¥85,721¥83,278¥52,632¥221,633¥(15,657)¥205,975¥ 1,672¥ 9,155¥ 5,767¥ 16,595¥(0)¥ 16,595

Depreciation and amortization¥ 2,706¥ 2,748¥ 2,011

¥

7,466

¥  

—

¥

7,466

Amortization of goodwill

¥

¥

¥

¥

315

¥  

—

¥

315

Adjustments

ESG

Printing andIndustrial Materials
Products

Consolidation

Net sales
Net sales to external customers
Intra-segment sales and transfers
Total
Segment income¥  —¥205,975

Others315——

LINTEC ANNUAL REPORT 2018

FINANCIAL INFORMATION

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.

79FINANCIAL SECTION

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

2018
Sales

Japan

Asia

U.S.A.

OthersTotal¥130,408¥70,880¥39,295¥8,445¥249,030

Thousands of U.S. dollars

2018
Sales

Japan

Asia

U.S.A.

OthersTotal$1,227,488$667,174$369,873$79,497$2,344,033

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

2017
Sales

Japan

Asia

U.S.A.

OthersTotal¥128,203¥65,142¥8,076¥4,552¥205,975

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

(Changes in presentation)
Sales of “U.S.A.,” which was included in “Others” in the previous consolidated fiscal year, is separately presented in this consolidated fiscal year due to its
increased quantitative materiality. To reflect this change in presentation, ¥12,629 million presented as “Others” in the consolidated statement of incomeof the previous fiscal year has been reclassified into ¥8,076 million of “U.S.A.” and ¥4,552 million of “Others.”
Millions of yen

2018
Property, plant and equipment

Japan

Asia

U.S.A.

OthersTotal¥55,143¥10,570¥9,173¥448¥75,336

Thousands of U.S. dollars

2018
Property, plant and equipment

Japan

Asia

U.S.A.

OthersTotal$519,044$99,499$86,348$4,221$709,114

Millions of yen

2017
Property, plant and equipment

Japan

Asia

U.S.A.

OthersTotal¥54,155¥11,119¥8,129¥466¥73,871

3. Information by principal customers
Since there are no outside customers that make up more than 10% of net sales on the consolidated statement of income for the year ended March 31,
2018, the information has been omitted.
Millions of yen

80

Name of the customer

Related reportable segment

2017
Sales

Sumitomo Chemical Company, Limited

Electronic and Optical Products¥22,210LINTEC ANNUAL REPORT 2018

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

2018Electronic and
OpticalProducts

Paper andConverted
Products

Total

Consolidation

¥—

¥—

¥—

¥—

¥1,041OVERVIEW

Impairment loss

Printing andIndustrial Materials
Products

Thousands of U.S. dollars

2018

Impairment loss

Printing andIndustrial Materials
Products

Electronic and
OpticalProducts

Paper andConverted
Products

Total

Consolidation

$—

$—

$—

$—

$9,804

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

2017Electronic and
OpticalProducts

Paper andConverted
Products

Total

Consolidation

¥—

¥—

¥—

¥—

¥34

STRATEGY

Impairment loss

Printing andIndustrial Materials
Products

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

2018

Unamortized amount of goodwill

Printing andIndustrial Materials
Products

Electronic and
OpticalProducts

Paper andConverted
Products

Total

Consolidation

¥—

¥—

¥—

¥—

¥29,189

Thousands of U.S. dollars

2018Electronic and
OpticalProducts

Paper andConverted
Products

Total

Consolidation

$—

$—

$—

$—

$274,745

ESG

Unamortized amount of goodwill

Printing andIndustrial Materials
Products

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

2017

Unamortized amount of goodwill

Printing andIndustrial Materials
Products

Electronic and
OpticalProducts

Paper andConverted
Products

Total

Consolidation

¥—

¥—

¥—

¥—

¥34,558
FINANCIAL INFORMATION

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, 2018 and 2017.

LINTEC ANNUAL REPORT 201881

FINANCIAL SECTION

24. 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, 2018 and 2017 were as follows:
Millions of yen

2018

2017

2018

¥11,364¥11,422$106,971

4,907

4,665

46,196

Millions of yen

Thousands of
U.S. dollars

For the year
Sales of fine & specialty paper products and converted products

Thousands of
U.S. dollars

Purchase of stencil, chemicals and equipment

2018

2017

2018

Trade notes and accounts receivable¥4,976¥ 3,941$46,842

Trade notes and accounts payable

2,357

1,835

22,189

12

3

118

Yen

U.S. dollars

At year-end

Other liabilities

Related party transactions are carried out on an arm’s length basis similar to third party transactions.
25. Amounts per Share
The amounts per share of net assets and net income as of and for the years ended March 31, 2018 and 2017 were as follows:
2018

2017

2018

¥2,573.69¥2,465.43$24.23

Net income (basic)

156.02158.691.47

Net income (diluted)

155.76158.46

1.47

Millions of yen

Thousands of
U.S. dollars

2018

2017

2018

¥11,257—¥11,257
72,151¥11,450—¥11,450
72,152$105,960—$105,960
72,151¥¥$

Net assets

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

Net income (basic) per share:
Profit attributable to owners of parent
Amount not attributable to common shareholders
Profit attributable to owners of parent attributable to common shares
Weighted-average number of common shares issued during the year (thousand)Net income (diluted) per share:
Adjustment of profit attributable to owners of parent related to dilutive securities
Adjustment of dilutive securities (thousand)		 [Share subscription rights (thousand)]

—
119
[119]

—
106
[106]

   —
119
[119]

(2) Net assets per share
Millions of yen

Total net assets
Amount deducted from total net assets[Share subscription rights][Non-controlling interests]
Net assets attributable to common shares
Number of shares of common stock outstanding used in calculation of net assets per share (thousand)82

LINTEC ANNUAL REPORT 2018

Thousands of
U.S. dollars

2018

2017

2018

¥186,420
718
[214]
[503]
¥185,702
72,154¥178,690
806
[186]
[619]
¥177,884
72,151$1,754,713
6,763[2,022][4,740]$1,747,949
72,154

Thousands of
U.S. dollars

Millions of yen

2018¥ 2,351
2,986
14,395¥19,732

Short-term loans payable
Current portion of long-term loans payable
Long-term loans payable

OVERVIEW

26. Short-Term loans payable, Long-Term loans payable 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 1.00% to 2.07% at March 31, 2018 and from 0.51% to 2.05% at March 31, 2017.
Short-term and long-term loans payable as of March 31, 2018 and 2017 consisted of the following:
2017

2018

641
3,051
17,795¥21,488$ 22,129
28,109135,497$185,736

Millions of yen

Thousands of
U.S. dollars¥

Other interest-bearing debts as of March 31, 2018 and 2017 consisted of the following:

Short-term lease obligation
Long-term lease obligation

2018

2017

2018

¥188
216

¥201
277

$1,774
2,040

Millions of yen

STRATEGY

Planned repayment amounts after the balance sheet date (March 31, 2018) for long-term loans payable and lease obligation are as follows:
Thousands of U.S. dollars

2018Long-term loans payable
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¥2,986¥9,177¥1,168¥531$28,109$86,388$11,000$5,000

122

50

29

12

1,154

476

281

120

27. Subsequent Event
The following distribution of retained earnings was approved at a meeting of the board of directors held on May 9, 2018.
Millions of yen

Thousands of
U.S. dollars¥2,381$22,4122018
Cash dividends (¥33 per share)

ESG
FINANCIAL INFORMATION

LINTEC ANNUAL REPORT 2018

83

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 Yoichi Shibano, Executive Officer and Chief Financial Officerof LINTEC Corporation, are responsible for designing and operating adequate internal control over financial reporting for consolidated financial statementsof LINTEC Corporation (the “Company”) and consolidated subsidiaries in accordance with the basic framework set forth in “Standards and PracticeStandards for Management Assessment and Audit concerning Internal Control Over Financial Reporting” issued by Business Accounting Council.
Internal control achieves its objectives to a reasonable extent given that all individual components of internal control are integrated and function as awhole. 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 internal control over financial reporting for the accompanying consolidated financial statements as of March 31, 2018
in accordance with the standards for assessment of internal control over financial reporting generally accepted in Japan. For this assessment, we firstevaluated the company-level controls which would have a material impact on the reliability of overall financial reporting on a consolidated 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 that would 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 the Company and its 22 consolidated
subsidiaries. We excluded 18 consolidated subsidiaries from the scope of the company-level control assessment since their quantitative and qualitative
impacts were deemed insignificant.
For the purpose of determining the scope of process-level controls assessment, we selected 2 business locations 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, 2017. For the
Significant Business Locations, we primarily included business processes related to sales, accounts receivable, and inventory in the scope of assessment
as the aforementioned accounts were closely associated with the Company’s business objectives. In addition, we included certain business processes inthe scope of assessment not only from “Significant Business Locations” but also from all subsidiaries and affiliates, which were related to significant
accounts involving estimates and management’s judgment or include high-risk operations and/or transactions, as “business processes 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, 2018 was effective.

84

LINTEC ANNUAL REPORT 2018

Report of Independent Auditors

OVERVIEWSTRATEGYESG
FINANCIAL INFORMATION

LINTEC ANNUAL REPORT 201885

FINANCIAL SECTION

86

LINTEC ANNUAL REPORT 2018

Investor Information As of March 31, 2018

Major Subsidiaries * Consolidated Subsidiary
Domestic

Head Office23-23, 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¥186,420 million
Common Stock
Authorized: 300,000,000 shares
Issued: 76,564,240 shares
Stock Listing
Tokyo Stock Exchange, 1st Section
Securities Code: 7966

Number of Employees
4,794 (Consolidated)
2,558 (Parent company only)
Major Shareholders
Nippon Paper Industries Co., Ltd.
30.12%
Japan Trustee Services Bank, Ltd. (Trust Account)
5.12%
The Master Trust Bank of Japan, Ltd. (Trust Account)
3.60%
National Mutual Insurance Federation of Agricultural Cooperatives 3.12%
Tamie Shoji
2.49%

ESG

Ownership and Distribution of Shares

Overseas
LINTEC USA HOLDING, INC.*
LINTEC OF AMERICA, INC.*
MACTAC AMERICAS, LLC*
MADICO, INC.*
VDI, LLC*
MACTAC MEXICO, S.A. DE C.V.*
MACTAC CANADA ULC*LINTEC EUROPE B.V.*
LINTEC EUROPE (UK) LIMITED*
LINTEC ADVANCED TECHNOLOGIES (EUROPE) GMBH*
LINTEC (SUZHOU) TECH CORPORATION*
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.*
LINTEC ASIA PACIFIC REGIONAL HEADQUARTERS PRIVATE LIMITED*
LINTEC SINGAPORE PRIVATE LIMITED*
PT. LINTEC INDONESIA*
PT. LINTEC JAKARTA*LINTEC (THAILAND) CO., LTD.*
LINTEC INDUSTRIES (MALAYSIA) SDN. BHD.*
LINTEC INDUSTRIES (SARAWAK) SDN. BHD.*
LINTEC KUALA LUMPUR SDN. BHD.*
LINTEC ADVANCED TECHNOLOGIES (MALAYSIA) SDN. BHD.*
LINTEC VIETNAM CO., LTD.*
LINTEC HANOI VIETNAM CO., LTD.*
LINTEC ADVANCED TECHNOLOGIES (PHILIPPINES), INC.*
LINTEC PHILIPPINES (PEZA), INC.*
LINTEC INDIA PRIVATE LIMITED*STRATEGY

Shareholder Register Agent for Common Stock
Mitsubishi UFJ Trust and Banking Corporation
1-4-5, Marunouchi, Chiyoda-ku,
Tokyo 100-8212, JapanOVERVIEW

LINTEC COMMERCE, INC.*
LINTEC SIGN SYSTEM, INC.*SHONAN LINTEC KAKO, INC.*
LINTEC SERVICES, INC.
LINTEC CUSTOMER SERVICE, INC.
PRINTEC, INC.
TOKYO LINTEC KAKO, INC.

Share Price / Trading Volume
Share Price
¥

3,500

22.12%
0.60%
33.17%
22.43%
15.92%
5.76%

3,000
2,500
2,000
1,500

FINANCIAL INFORMATION

Financial Institutions
Securities Companies
Other Companies
Overseas Companies
Individuals and Other
Treasury Stock0
Trading Volume
Million shares

10
8
6
4
2
0

Apr. 2015

Apr. 2016

Apr. 2017

LINTEC ANNUAL REPORT 201887

L INTEC Corporation

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

Annual Report 2018

Printed on LINTEC high-grade printing paper and color kraft paper

Printed in Japan