LINTECANNUAL REPORT
Achievingsustainable growthand maximizing
corporate value

For the year ended March 31, 2011

Linking your dreams

to the future through technologies.
We are LINTEC.
Reflected in our company name, LINTEC formed
from “linkage” and “technology” our entire workforce
is strongly committed to linking people with technologies
to create innovative, high value added products
and solutions.
As the leading company in the fields of adhesive products
and specialty papers, LINTEC Corporation has developed
and launched a vast range of new products. Going forward,
we will continue to create products and technologies
our customers have never seen before by advancing
and linking the original core technologies that we havecultivated over many years of research. In this way,
we will enable our customers to turn their dreams into
reality. Further, in addition to expanding operations,
our goal is to implement thorough CSR (Corporate Social
Responsibility) based management to further develop
as a company that is highly regarded and trusted by allof its stakeholders.

		 Contents		

4 Our Business20 Corporate Officers

8 Financial Highlights

21 Financial Section

9 From the President

47 Investor Information

16	R&D Activities andIntellectual Property

Printing and Industrial Materials Products
PV backsheets
LINTEC produces PV backsheets that are attached to the underside ofphotovoltaic modules. These backsheets are designed using LINTEC’s
proprietary coating technologies, enabling them to realize both highdurability and superior cost performance.

Electronic and Optical Products
Touch panel related products
LINTEC manufactures and sells a wide variety of products, including tapes andequipment used during the semiconductor manufacturing process, coated films
for multilayer ceramic capacitor production, and touch panel related products.
The demand for such products is growing as smartphones and other electronic
devices become increasingly more sophisticated.

Paper and Converted Products
Casting papers for carbon fiber composite materials
LINTEC’s high-quality casting papers feature such functional characteristics assuperior heat resistance and are generally used in the process of transforming
individual threads of carbon fiber into sheets. Recently, such carbon fiber composite
materials have been commonly used in the bodies of aircraft and the fan blades ofwind power generation facilities as well as in a variety of sports and leisure goods.

Our Business

Printing and Industrial Materials Products

The LINTEC Group’s operations are divided

Printing and variable information products operations

into seven categories, which have been

We conduct production and sales of LINTEC group’s mainstay

arranged into three operational segments:

adhesive papers and films for seals and labels. Its adhesive films

Printing and Industrial Materials Products,
Electronic and Optical Products, and Paper

perform particularly well, boasting a share of over 50% of thedomestic market and a growing share in such overseas markets
as China and Southeast Asia.

and Converted Products. The following is

Net sales in the fiscal year under review were up 5.5% year

an overview of these segments in the fiscal

on year, to ¥46.6 billion, due to consistent domestic sales of prod-

year ended March 31, 2011.

ucts for use in automobiles, home electronics, and food products,
and the favorable performance of these products in China andSoutheast Asia.
Main Products
Adhesive papers and films for seals and labels /Label printing machines

B
4

LINTEC ANNUAL REPORT 2011

Net Sales
60¥Billion

46.6
40

5.5%
21.9%

Share of net sales

20

0

Net sales increased by

07 08 09 1 0

1 1 FY

Net sales

Operating income

91.9bn

8.0bn

¥

¥

Industrial and material operations

Healthcare products operations

LINTEC deals in a wide variety of products including sheet

The principal activities we conduct include the development ofmaterials for photovoltaic (PV) modules, which have been showing

an oral film formulation, which swells to a jelly when moistened by

rapid sales growth in recent years, specialty adhesive products fora small amount of saliva and that can be easily swallowed without

use in information devices and automobiles, label system-related

water, and transdermal therapeutic patches, which enable medi-

equipment, printing materials for outdoor signs and interior finish-cine to be absorbed through the skin into the body when a patch

ing, and even adhesive films for glass.

that contains medicine in the adhesive is applied to the skin.

Net sales in the fiscal year under review increased 19.2%,

In these ways, we are conducting R&D activities in cooperation

to ¥44.0 billion. This was due to the impressive sales growth ofwith pharmaceutical companies while also conducting R&D activi-

PV backsheets as well as the admirable performance of adhesiveties utilizing the unique technologies we possess as an adhesive

products for use in motorcycles and other automobiles inmaterials manufacturer.

Southeast Asia and North America.

Net sales in the fiscal year under review declined 16.7%, to ¥1.3
billion, due to the slumping sales of existing products.

Main Products
PV backsheets / Automobile-use adhesive products /Main Products

Industrial-use adhesive tapes / Barcode printers /Oral film formulation / Transdermal therapeutic patches /Labeling machines / Films for outdoor signs and advertising /Adhesive products for medical treatment /Interior finishing mounting sheets / Window films

Antibacterial and anti-mold materials

Net Sales

Net Sales
60¥Billion

3

44.0
40

20

0

Net sales increased by

19.2%
20.7%

Share of net sales
07 08 09 10

1 1 FY¥Billion

Net sales increased by
2

1.3

Share of net sales

10–16.7%
0.6%

07 08 09 1 0

1 1 FY

LINTEC ANNUAL REPORT 2011

5

Net sales

81.2bnElectronic and Optical Products¥

Operating income

6.7bn

¥

Advanced materials operations

Optical products operations

We provide such products as specialized adhesive tapes andWe conduct processing, such as the adhesive processing for

related equipment essential in semiconductor manufacturing andthe bonding of polarizing films and retardation films used to make

mounting processes, as well as coated films for multilayer ceramic

LCDs; and surface improvement processing for polarizing films

capacitor (MLCC) production and various materials for touch panel.

such as antiglare hard coat processing, which reduces reflectivity

Net sales in the fiscal year under review rose a substantial
43.9%, to ¥34.6 billion, largely due to the impressive performanceand protects films from scratches; and the manufacturing ofprotection films for polarizing films.

of semiconductor-related tapes and equipment stemming from

Net sales in the fiscal year under review grew 2.7%, to ¥46.5

the prosperity of the semiconductor industry, and favorable sales

billion, due to the solid performance of products for LCD TVs andof coated films for MLCC production following the robust demandrobust demand for smartphones and other devices.

for smartphones.
Main Products
Main Products

Polarizing films and retardation films for LCDs (adhesive

Semiconductor-related tapes and equipment /processing) / Polarizing films for LCDs (surface improvement

Coated films for MLCC production / Touch panel

processing) / Protection films for polarizing films

related products / Films for plasma display panels /RFID-related products

Net Sales
45

Net Sales¥Billion

60

34.6
30

0

6

Net sales increased by

43.9%
16.3%

Share of net sales

15

07 08 09 10

1 1 FY

LINTEC ANNUAL REPORT 2011

¥Billion

46.5
40

20

0

Net sales increased by

2.7%
21.8%

Share of net sales
07 08 09 1 0

1 1 FY

Net sales

Paper and Converted Products¥

39.7bnOperating income

6.1bn

¥

Fine and specialty paper products operations

Converted products operations

We produce and sell color papers for envelopes and colored

We provide release papers and films for a variety of adhesive

construction papers, in which LINTEC holds the leading share in

products. Additionally, we produce casting papers that are

domestic markets; industrial-use special function papers, such as

indispensable in the production of synthetic leather. We also

lint-free papers for use in clean-room environments; high-grade

manufacture casting papers for carbon fiber composite materials.

printing papers with special textures; and high-grade papers for

Going forward, we have high expectations for carbon fiber due topaper products used for business cards and postcards.

its increased usage, such as in the bodies of aircraft.

Net sales in the fiscal year under review were up 2.1%,

Net sales in the fiscal year under review increased 9.8%, toto ¥17.5 billion, primarily due to the recovery of demand for¥22.2 billion, as a result of consistent sales for mainstay releaseindustrial-use special function papers, which helped offset the

papers and release films for optical-related products, and thelower sales of mainstay color papers for envelopes, resulting fromfavorable sales of casting papers for synthetic leather and carbon

poor market conditions.

fiber composite materials.

Main Products

Main Products

Color papers for envelopes / Colored construction papers /Release papers and films for adhesive products /Special function papers / High-grade printing papers /Casting papers for synthetic leather / Casting papers

High-grade papers for paper products

for carbon fiber composite materials

Net Sales
30

Net Sales¥Billion

30¥Billion

Net sales increased by
20

17.5

Share of net sales

10

0

2.1 %
8.2%

07 08 09 10

1 1 FY

22.2
20

9.8%
10.5%

Share of net sales

100

Net sales increased by

07 08 09 1 0

1 1 FY

LINTEC ANNUAL REPORT 2011

7

F

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

Millions of yen except per share data

Thousands of U S
dollars except
per share data*% change

2011

2010

2009

2011

2011 / 2010

¥ 212,733¥ 189,348¥ 194,901$2,558,427

12.4

Operating income

20,889

11,5768,498

251,226

80.4

Income before income taxes

19,565

11,3995,215

235,305

71.6

Net income

13,622

7,284

3,391

163,83587.0

Return on equity

10.9%

6.2%

2.9%

10.9%

Net sales

Per share data (yen and dollars)
Net income¥ 180.21

44.86$ 2.1787.0

Net assets

1,715.78

1,596.37

1,497.58

20.63

7.5

40.00

24.00

20.00

0.48

66.7

Cash dividends
Depreciation and amortization

¥

96.36

¥

¥ 10,178¥ 10,537¥ 11,286$ 122,410(3.4)

Capital expenditures

10,058

7,935

8,766

120,965

26.8

Net cash provided by operating activities

23,30722,25912,979280,312

4.7

Net cash used in investing activities(9,926)(9,253)(9,752)(119,382)

7.3

Net cash used in financing activities(2,820)(3,454)(2,300)(33,915)(18.4)Cash and cash equivalents

35,18825,387

15,370423,188

38.6

Total assets

206,188

195,656

172,8542,479,714

5.4

Net assets

130,576

121,502113,930

1,570,371

7.5* The U S dollar amounts are translated, for convenience only, at the rate of ¥83 15 to U S $1, the exchange rate prevailing on March 31, 2011240

Net Income / ROE

Operating Income

Net Sales¥Billion

212.7

24

¥Billion

20.9¥Billion / %

13.6
10.9

10

16

160

15

Total Assets / Net Assets
240¥Billion

206.2

160

130.6

0

5

8

80

07 08 09 10

1 1 FY0

07 08 09 10

1 1 FY

080

07 08 09 1 0
Net Income

1 1 FYROE

0

07 08 09 1 0
Total Assets

1 1 FYNet Assets

FORWARD LOOKING STATEMENTS: All statements contained in this annual report, such as projected operating results, that are not historical facts are forward looking statements based on the
Company’s estimates and plans For various reasons, it is possible that the Company’s future results, performance, or achievements will differ from the contents of these forward looking statements

8

LINTEC ANNUAL REPORT 2011

From the President

First, I would like to thank our shareholders and other investors
for their continued support.
In the fiscal year under review, ended March 31, 2011, we
have managed to overcome the effects of the Lehman Shock,which have persisted since fall 2008, to achieve record breaking
operating results. This is thanks to not only the support ofour shareholders and other investors, but also to our various
customers around the world, our suppliers and the support of allof our other stakeholders. I would like to take this opportunity to
express my deepest gratitude to all of you for your contributions
to LINTEC’s success.
In the fiscal year ending March 31, 2012, we began our new
medium term business plan, LINTEC Innovation Plan III (LIP III),and are progressing forward with the aim of meeting the newgoals we have laid out in this plan. The LINTEC Group is gearing
up for the next leap forward by coming together to aggressively
and boldly advance the key initiatives of this plan as a company
that has continued to improve its profitability and the strength ofits financial base. In closing, I would like to ask our shareholders
and other investors for their continued support.

P

August, 2011

Akihiko Ouchi
President and CEO

LINTEC ANNUAL REPORT 20119

W e launched the new medium-termbusiness plan, LIP-III, in April 2011.

Net Sales
240¥Billion

220.0

Review of the Fiscal Year under Review
Sales activities were successful and we achieved
record-breaking operating results.
In the fiscal year under review, the global economy trended toward expansion driven

160

by robust demand in emerging countries, particularly those in Asia, and initiatives
implemented around the world to stimulate consumer spending. In Japan, economic

80

conditions recovered supported by the brisk sales of automobiles, a result of the influence of government initiatives providing tax breaks and “eco points” for the purchase

0

08

09

10

11

12 FY
Forecastof automobiles, home electronics, and housing as well as strong exports. However,from the fall, the rebound from the elimination of these initiatives and the effects ofthe strong yen served to decelerate economic growth, bringing the economy to a halt.
In this environment, the Group focused on laying the grounds for future growth24

Operating Income / Net Income

strategies. In accordance with our policy of “gearing up for the next leap,” we ambi-¥Billion

tiously implemented initiatives based on our three key management policies:
strengthen profit base, promote business reform, and focus on future growth.

20.0

As a result of these efforts, consolidated net sales were up 12.4%, to ¥212.7 billion,
16

13.1

operating income increased by a substantial 80.4%, to ¥20.9 billion, and net income
also rose greatly, increasing 87.0%, to ¥13.6 billion. In this way, we set record highs for
all three of these management indicators. Further, with regard to the Great East Japan

8

Earthquake, which occurred on March 11, 2011, damage to our operating assets were
0

08

09

10

Operating Income
Net Income

11

12 FY
Forecast

minimal and the effects on consolidated operating results were immaterial.

Forecasts for the Fiscal Year Ending March 31, 2012
At the moment, we are forecasting increased sales,
but decreased income.
In the fiscal year ending March 31, 2012, we project that the global economy will be
impacted by such factors as the government financial issues and sluggish consumer
spending seen in Europe and the United States, as well as by the monetary tightening
in China and other emerging countries. Meanwhile, in the post-earthquake Japanese
economy, we are anticipating increased consumption following the renewal of production activities and the improvement in the prevailing mood of self-restraint shown bybusiness and consumers alike. However, the combined effects of the strong yen andthe electricity shortages in Japan have made the operating environment highly unclear.
Under these conditions, we launched the new medium-term business plan, LIP-III,in April 2011. This plan covers a three-year period and outlines four key initiatives.
We are currently aggressively implementing a variety of measures based on these
initiatives. With regard to consolidated business result forecasts for the fiscal year

10

LINTEC ANNUAL REPORT 2011

P
sales of ¥220.0 billion, a 3.4% year-on-year increase; operating income of ¥20.0

Targets for major indicatorsin the final year of LIP III,the fiscal year ending March 31, 2014

billion, a 4.3% decrease; and net income of ¥13.1 billion, a 3.8% decrease.

(on a consolidated basis)

ending March 31, 2012, while the effects of the earthquake and other factors are
extremely difficult to predict, our current forecast anticipates the Group achieving net

Net sales

LIP-III—the New Medium-Term Business Plan
We will practice more-proactive management,
strengthening and expanding overseas operations
and aggressively conducting capital investment.

260.0bn¥

Operating income

26.0bnThe basic policy behind LIP-III is to “achieve sustainable growth and maximize corporate¥

value through aggressive and bold innovation.” In accordance with this policy, we plan topursue innovation and revolution more aggressively and boldly than ever before. We will

Operating income margin

also persistently implement more-proactive management by fully utilizing our manage-

10%

ment resources. In this way, we plan to conduct capital investments totaling more thanmore than¥40.0 billion over the three-year period. Through these initiatives, we aim to meettargets for the fiscal year ending March 31, 2014, the final year of the plan, of net sales ofROE (Return on Equity)

10%¥260.0 billion, operating income of ¥26.0 billion, an operating income margin of over 10%,more thanreturn on equity (ROE) of over 10%, and return on invested capital (ROIC) of over 10%.
The four key initiatives that the Group is working to address under LIP-III are

ROIC (Return on Invested Capital)

described below.

10%

more than1	Strengthen and expand overseas businesses(Targeted overseas sales ratio: 40%)
In order for the LINTEC Group to achieve sustainable growth, exploring additional
business opportunities in overseas markets is of the utmost importance. We are

Numerical Targets
Net Sales

currently working to develop optimal production and sales systems in Asian markets,
which are showing high levels of growth and are anticipated to become the driving
force behind the global economy in the future. We are also steadily exploring opportu-

300¥Billion

30¥Billion

260.0

nities in other new growth markets.
(1)	Develop optimal production and sales systems with a particular focus on

Operating Income

26.0

212.7

20.9

200

20

100

10

Asian markets	 – Respond to increased demand for adhesive films in Chinese markets	 – Conduct sales promotion activities in South East Asian and Indian markets(2) Explore new growth markets	 – Develop a sales network and consider the construction of new production bases

0

11

14 FY

0

11

14 FY

Printing and Industrial Materials ProductsElectronic and Optical Products
Paper and Converted Products

LINTEC ANNUAL REPORT 201111

W e plan to pursue innovation andrevolution more aggressively andboldly than ever before.

2	Expand domestic businesses and increase profitability by optimizing QCD
LINTEC is expanding domestic businesses and bolstering their profitability byincreasing its competitiveness with regard to QCD (quality, cost, and delivery) factors.
Specifically, we are optimizing the Group’s logistics systems by utilizing supply chain
management, conducting continuing cost reduction project through means suchas reducing inventories by consolidating product lines, actively introducing highly
functional, highly efficient production facilities through the “build and scrap” approach,and reforming inefficient and unprofitable businesses.
(1) Continue to promote the CRP (Cost Reduction Project)	 – Optimize the Group’s logistics systems by utilizing supply chain management(2)	Actively introduce highly functional and highly efficient production facilities	 – Integrate production facilities through the “build and scrap” approach andother methods(3)	Reorganize and reconstruct domestic production bases and subsidiaries	 – Revise the activities and operations of inefficient and unprofitable businesses, etc.
(4)	Increase the market share of existing businesses and develop new applications	 – Respond to the maturing of the domestic market

3	Create original new products that will support the next generation
Leveraging LINTEC’s unique technological development capabilities, we are progressively developing one-of-a-kind products that stand at the top of their class. Specifically,
we are developing next-generation PV materials and other environmentally friendly
products as part of our lineup of environment- and energy-related products. Further,
we are developing highly functional electronics- and optical device-related products
by utilizing our core adhesive and surface improvement technologies.
(1)	Environment- and energy-related products	 – Develop next-generation PV materials	 – Promote the development of environmentally friendly products(2)	Electronics- and optical device-related products	 – Develop highly functional products utilizing adhesive and surface improvement
technologies, etc.

12

LINTEC ANNUAL REPORT 2011

P
4 Strengthen global management
We are continuing the project of evolving our information system infrastructure,
and are working to introduce this infrastructure into overseas Group companies.
We believe that this will allow us to expedite the decision making process of management, while developing more standard and efficient workflow processes throughout
the Group. Further, we are implementing strategy and investment judgments that
include a new focus on ROIC. At the same time, we are fostering human resourcesand encouraging skill development with the goal of enabling the Company to continue
to globalize and grow. Additionally, we are promoting corporate activities based on
CSR management through such efforts as achieving ISO26000 compatibility andexercising the ideals of the UN Global Compact.
(1)	Evolve information infrastructure and deploy it to Group companies	 – Introduce this infrastructure quickly into Group companies both domesticallyand overseas(2)	Implement strategy and investment judgments that include a new focus on ROIC
	 – Track clearly how much income is generated by capital invested in the business(3)	Continually foster human resources and develop abilities	 – Foster human resources and encourage skill development to enable the Company

Basic policy
Achieve sustainable growth andmaximize corporate value throughaggressive and bold innovation
Key initiatives
1. Strengthen and expand overseas
businesses (Targeted overseas
sales ratio: 40%)
2. Expand domestic businesses andincrease profitability by optimiz
ing QCD
3. Create original new products thatwill support the next generation
4. Strengthen global management

to continue to globalize and grow(4)	Promote corporate activities based on CSR management	 – Achieve ISO26000 compatibility and exercise the ideals of the UN Global Compact

CSR and Corporate Governance
We are conducting CSR management based on international
standards and strengthening corporate governance throughthe introduction of an executive officer system.
The Company views CSR as one of the most important issues for management.
Going forward, we aim to contribute to society as a strong and vigorous company
that is well trusted.
For this reason, we have established the CSR Management Office, which reports
directly to the President. In addition, we have established six CSR subcommittees—on Corporate Ethics; Investor Relations; Customer Satisfaction; Environmental
Preservation; Social Contribution; and Safety, Disaster Prevention, and Health—which consist of members from all areas of the Company. These organizations
implement a wide variety of CSR activities. Through these efforts, we will continue
to promote corporate management that balances its responsibilities toward theeconomy, the society, and the environment.

LINTEC ANNUAL REPORT 201113

W e aim to contribute to society

as a strong and vigorous company
that is well trusted.

In the fiscal year under review, we worked to reduce usage and emissions of substances that impact the environment, and developed and increased sales of productsthat reflect consideration for the environment. We also took part in social contribution
activities closely linked to local communities, such as participating in cleanup activities
in the areas around our operating bases and providing support for people withdisabilities. Further, we provided victims of the Great East Japan Earthquake with
monetary relief and support. Moreover, we have enhanced and thoroughly instituted
corporate ethics training and disseminated a sound understanding of good corporate
ethics. Additionally, in March 2011, we declared our intention to participate in the UN
Global Compact. In the fiscal year ending March 31, 2012, we will continue to act inaccordance with our policy of conducting CSR management based on international
standards, as represented by such efforts as the previously mentioned achievementof ISO26000 compatibility.
In regard to corporate governance, the Board of Directors consists of 8 directors
and 2 external directors. It works to ensure speedy management decisions and business advancement amid the fluctuating management environment based on theprinciples of holding Board of Directors meetings and management meetings once

General Meeting of Shareholders
Appointment / Dismissal

Appointment /Dismissal

Appointment /Dismissal

Management decision

CSR Management Office• Corporate Ethics Committee• Investor Relations Committee• Customer Satisfaction Committee• Environmental Preservation
Committee• Social Contribution Committee• Safety, Disaster Prevention,and Health Committee

ReportingBoard of Directors(Directors)

Guidance /Promotion

President
Management Meeting(Directors andExecutive Officers)

Operational execution

LINTEC ANNUAL REPORT 2011

Cooperation

Cooperation

Administrative,
Marketing,
Production, andTechnical Divisions;
Domestic andOverseas Subsidiaries

14

Account /Operational
Auditing

Statutory
Auditors’Meeting

Internal
Auditing

Audit Office(Internal
Control)

Independent
Auditors

Account
Auditing

Internal
Control
AuditingPa month. Accordingly, we are working to develop optimal management strategies.
Additionally, LINTEC employs a statutory auditor system, and ensures swift management and the effectiveness of its auditing systems. The Statutory Auditors’ Meeting isheld monthly in principle. In this meeting, by sharing the results of the business audits
performed by each auditor, the auditors confirm the appropriateness and effectivenessof the decisions and operational execution of the Company’s management.
In June 2011, we introduced an executive officer system with the goal of separating
important management decision making processes from operational execution,
decreasing the number of directors, invigorating the Board of Directors, and improving
management efficiency through swift decision making. Moreover, LINTEC will continue
to ensure swift decision making, management transparency, enhanced management
oversight systems, and thorough compliance by strengthening its internal control
systems and risk management systems.

Shareholder Returns
In the fiscal year ending March 31, 2012, we intend to issue
dividend payments of ¥40 per share, the same as in the fiscal year
under review.
LINTEC’s basic policy on the appropriation of profits is to increase business earnings
and strengthen the Company’s financial position from a long-term perspective while
paying dividends that reflect consolidated business results. Acting in accordance withthis policy, we are working to increase shareholder returns.
In the fiscal year under review, we had initially intended to issue dividend paymentsof ¥30 per share, higher than the previous fiscal year’s dividend payments of ¥24 pershare. However, our consolidated business results greatly exceeded our initial forecasts
due to higher-than-expected net sales and the effects of cost reduction measures on
income. Based on this, we decided to raise both the interim and year-end dividends by

Cash Dividends per Share¥5 per share, from ¥15 to ¥20 per share, making for a total annual cash dividend of¥40 per share.

45

¥

40.0

In regard to dividends in the fiscal year ending March 31, 2012, we currently intend
to issue dividend payments of ¥40 per share, the same as in the fiscal year underreview. Going forward, we will continue to target sustainable growth and higher income

30

with the hopes of offering more substantial shareholder returns.
15

0

08

09

10

11

1 2 FY
Forecast

LINTEC ANNUAL REPORT 201115

R&D Activities and Intellectual PropertyR

R&D Activities

Our Four Core Technologies

Basic Policy

We will combine our four core technologies of pressure-sensitive

Through the development of functional materials and related

adhesive applications, material quality and functionality enhance-

processing technologies utilizing LINTEC’s original technologicalment, specialty paper and composite material production, andcapabilities and research regarding user needs based on dialogues

system development to develop and supply highly distinctivewith markets, we are developing innovative products that generate

products unlike anything else available in the market.

demand and resolve customers’ technological issues.

Pressure-sensitive adhesive applications

As a technology-centered company, we realize that strengthen-Through the development of adhesives and substrates and theing R&D capabilities is one of our most important strategies for

combination of related technologies, we are expanding the range ofachieving sustainable growth. Therefore, we are developing new

fields in which the basic functions of adhesive products are utilized.

high-value-added products with a particular focus on growthMaterial quality and functionality enhancementbusinesses and environmentally friendly products, and working toThrough the chemical and physical processing of paper, film,

accelerate LINTEC’s globalization.

and adhesives, we are enhancing their characteristics and adding
new functionality.

R&D System

Specialty paper and composite material production

LINTEC’s R&D function is focused in the Research Center within

We use original papermaking technologies and coating, impregna-

the Research & Development Division, which has approximately

tion, and laminating technologies to develop specialty papers and

200 research personnel. With a complete array of the very latest

high-value-added materials that transcend traditional concepts

research equipment, pilot coaters, and clean-room facilities, theof paper.

research center collaborates closely with production engineering

System development

divisions to develop a range of coating agents and other products.

Through systematizing machinery and equipment and building

Developing and producing a variety of equipment, our Ina

high-level systems that draw on the distinctive characteristics ofTechnology Center is working particularly hard to strengthenmaterials, we are providing advanced solutions.

development and production of semiconductor-related products.
Moreover, the Group also has an R&D base in Boston, in the UnitedStates, which conducts research and development in such areas asindustrial-use multilayer materials and coating technology.
We are not only conducting in-house R&D but also proactively

Pressure sensitiveadhesive
applications

initiating technological alliances with industry, government, andacademia. Our goal is to develop new technologies and products
by integrating different technological areas.

Systemdevelopment

Material quality andfunctionality
enhancement

Specialty
paper and composite
material production

16

LINTEC ANNUAL REPORT 2011

Patent Applications and Approvals(Japan)Intellectual Property
Basic Policy

147

450

We aim to increase corporate value by supplying original products
developed through our continuous R&D efforts. We therefore

150

336
300

100

150

50

realize that intellectual property, such as patents, trademarks, anddesign rights, are important management resources.
Going forward, we will promote the development of intellectual
property that supports our business activities. We will steadilyacquire intellectual property rights for the products and technologies created through our R&D efforts around the world, thus
reinforcing the intellectual property base that is indispensable to
LINTEC’s market competitiveness.

Management System
We have established the Intellectual Property Department within
the Research & Development Division. The department supports
operational activities through patent applications and builds barriers to protect intellectual property. Through these efforts, the

0

07

08

09

Total Applications
Approvals (right scale)10

1 1 FY0I

department works to increase the freedom of operational activities,
minimize the risks accompanying operations, and enhance motivation among technical staff. It prepares and submits patentapplications, and also monitors for infringement of rights andconsults with researchers in the early stages of product development and in the discovery stage at our R&D locations. In otherwords, the department is engaged in comprehensive and strategic
activities to protect our intellectual property.
As well as increasing the number and quality of patent applications and rights acquisitions, we are working to supplement andrebuild our portfolio of patents for growth businesses and foundation businesses, to provide intellectual property support for
operations shifting to overseas locations, and to train more employees with a view to advancing and accelerating development
processes. Through those efforts, we aim to improve profitability
based on our intellectual property.

LINTEC ANNUAL REPORT 201117

R
Successful R&D Initiatives in the Fiscal Yearunder Review

We advanced the basic technology for film pharmaceutical prod-

In the fiscal year under review, the R&D expenses incurred byucts, which are easy to swallow without water because they

the Group amounted to a total of ¥6.0 billion. The following is

become a jelly on contact with small amounts of saliva. ThroughHealthcare products

an overview of the principal R&D activities conducted by each

this advancement, we have adapted this technology to be used inoperational segment.

next-generation oral film formulations jointly developed through an
operational and technological tie-up with ASKA Pharmaceutical

Printing and Industrial Materials Products

Co., Ltd. We continue to move forward with research into the use

Printing- and information- related productsof this technology as a new drug delivery system that contributes

We have developed a new holographic label material that creates

to improving the quality of life of patients.

the appearance of a smoothly reflecting single sheet by hiding theseams between labels. This material greatly improves cost perfor-

Electronic and Optical Products

mance by reducing the loss of productivity during printing createdElectronic and optical devices products

by seams and eliminating the need for post-printing inspection.

We developed a DBG + LE system that combines DBG (dicing

Going forward, we will continue to develop other new products

before grinding) system technology, which supports the produc-that respond to market needs.

tion of thinner LSI chips, with LE tape technology, which can create

Moreover, in printing equipment related products, we aredeveloping printing machines that are optimally suited to the special

introduced LD tape into the market. By making possible multilayer

characteristics of the Company’s label materials. In the year under

LSI chips, this system contributes to the realization of higher-

review, we continued to improve the LPM-300, an intermittent

density LSI packages. In this way, the system supports the creation

letterpress, and develop low-priced printing machines for the Chinaof higher-capacity memory cards.

market. We also worked to develop equipment that combines

In electronic equipment related products, our developmentroll-to-roll web handling technologies and processing technologies.

activities are centered on application equipment that facilitates theCommercial- and industrial- related products

efficient use of the backgrinding tapes and dicing tapes used during

In the fiscal year under review, we worked to develop printing

semiconductor back-end process. In the fiscal year under review,materials compatible with large-sized printers using environmen-

we launched various new pieces of equipment compatible with thetally friendly water-based inks. Further, these materials have

manufacturing of silicon wafers with through-silicon vias (TSVs)

been approved as flame resistant and can be used for a variety

and power devices.

of applications, such as outdoor signs, advertising signs, andinterior finishing.
In industrial equipment related products, meanwhile, our development activities are centered on labeling systems for the
automated application of adhesive labels using LINTEC’s labelmaterials. In the fiscal year under review, we continued to focus on
the development of equipment for the automotive-related, distribution, and mail-order industries.

18

tape that functions as both dicing tape and die bonding tape, and

LINTEC ANNUAL REPORT 2011

Total R&D Expenses in FY2011

Optical-related products
In the fiscal year under review, we developed a specialty adhesivewith significantly increased stress relieving properties in order toimprove its ability to be attached to uneven surfaces, a feature that

6.0bn

¥

is currently in high demand. In the functional coating field, we aredeveloping completely unique light control film by fusing our antiglare coating technology with new manufacturing technologies.

¥2.3bnPrinting and Industrial Materials Products¥3.1bnElectronic and Optical Products¥0.6bnPaper and Converted Products

Paper and Converted Products
In the fiscal year under review, we were able to achieve steadysales from major convenience stores and fast food restaurants due
to our constant innovation of oil- and moisture-resistant papers forfood packaging. Additionally, there is a growing demand for papermaking utilizing materials previously incapable of being included in
paper, such as reeds, cocoa bean shells, and ingredients used tomake Kampo (traditional Chinese medicine), as a form of recycling.
We are therefore considering means of addressing this demand.
In release materials, with the goal of enhancing our lineup ofenvironmentally friendly products, we eliminated formaldehyde
and organotins from the formulas of release materials for the
manufacturing of flexible printed circuits and resin films. Further,
we developed two new formulations for release papers that transform from solvent types to non-solvent types.

New holographic label material

LD tape

LINTEC ANNUAL REPORT 201119

Corporate Officers
As of June 24, 2011

President and CEO

Managing Executive Officers
Koichi Oiwa
Plant Manager, Kumagaya Plant, Production Div.

Akihiko Ouchi
Director, Senior Managing Executive Officer, CFO

Yukio Hamada
General Manager, Optical Products Operations, Business Administration Div.,
Plant Manager, Shingu Plant, Production Div.

Yoshiyuki Yamato
Hitoshi Asai
General Manager, Administration Div.,in charge of General affairs & Personnel Div.

Director, Senior Managing Executive Officer

General Manager, Quality Assurance & Environmental Protection Div.

Kazuma Okamoto
General Manager, Osaka Branch Office, Business Administration Div.

Seiji Takemura
Assistant General Manager, Production Div., Plant Manager, Mishima Plant

Shigeru Kawasaki
General Manager, Business Administration Div.

Directors, Managing Executive Officers

Kazuyoshi Ebe
Assistant General Manager, Research & Development Div.,
General Manager, Research Center

Toshikazu Yamada
Plant Manager, Tatsuno Plant, Production Div.

Koji Ichihashi
Assistant General Manager, Business Administration Div.,in charge of Industrial & Material Operations

Executive Officers
Koichi Kimura
Assistant General Manager, Production Div.,
General Manager, Procurement Dept.

Takashi Nakamura
Kenji Kobayashi
General Manager, Research & Development Div.

General Manager, Fine & Specialty Paper Products Operations,
Business Administration Div., in charge of Converted Products Operations

Masami Kozuka
Makoto Iiumi
Assistant General Manager, Business Administration Div.,in charge of Advanced Materials Operations

Koji Koyama
General Manager, Production Div.,in charage of Quality Assurance &Environmental Protection Div.

Hiroyuki Nishio
General Manager, Corporate Strategic Office andCSR Management OfficeDirectors (External)

Shinichi Sato
Director, Deputy General Manager, Paper Sales Div.,
Nippon Paper Industries Co., Ltd.

Michio Abe
Former Corporate Auditor, Yamato Holdings Co., Ltd.

20

LINTEC ANNUAL REPORT 2011

Plant Manager, Agatsuma Plant, Production Div.

Gohei Kawamura
Chairman & President, Lintec (Suzhou) Tech Corporation

Tsunetoshi Mochizuki
General Manager, General affairs & Personnel Div.,
General affairs & Legal Dept. and Human Resource Dept.

Statutory Auditors
Keita Yoshikawa
Toshio Yamamoto
Auditors (External)
Masaru Motomura
Kazumi Idogawa

CF

Financial Section
Management’s Discussion and Analysis

Revenues and Expenses

increased significantly due to the high market evaluation of theseIn the fiscal year under review, consolidated net sales increased

products. Additionally, adhesive products for use in motorcycles

12.4%, to ¥212.7 billion, largely due to the substantially higher sales

and other automobiles in Southeast Asia and North America

of semiconductor-related products and PV backsheets.

performed well.

Gross profit rose 29.0%, to ¥48.5 billion. While the prices forpulp and fuel were higher and fixed costs increased, the effects of
the increased net sales resulted in an overall rise. Selling, general

In healthcare products operations, sales of existing products
were sluggish.
As a result of the above, net sales in the Printing and Industrial

and administrative expenses were up 6.1%, to ¥27.7 billion. Due toMaterials Products segment were ¥91.9 billion and operating

the above, operating income increased 80.4%, to ¥20.9 billion.

income was ¥8.0 billion.

Income before income taxes increased 71.6%, to ¥19.6 billion,
and there was a significant foreign exchange loss, compared with

Electronic and Optical Products

the foreign exchange gain recorded in the previous fiscal year,

In advanced materials operations, sales of semiconductor-related

following the progression of the strong yen in the second half ofequipment and adhesive products improved greatly due to thethe fiscal year. Income taxes were ¥5.9 billion.

prosperity of the semiconductor industry. Further, the robust

As a result of these factors, net income rose 87.0%, to ¥13.6
billion. Net income per share increased substantially from ¥96.36
in the previous fiscal year to ¥180.21, and return on equity (ROE)rose notably from 6.2% to 10.9%.

demand for smartphones brought favorable sales of coated films
for MLCC production.
In optical products operations, LCD-related products were
adversely affected by the temporary adjustment period of themarket. However, sales in these operations remained solid due to

Performance by Operational Segment

the consistent performance of products for LCD TVs and robust

Printing and Industrial Materials Products

demand for smartphones and other devices.

In printing and variable information products operations, sales of

As a result of the above, net sales in the Electronic and Opticaladhesive papers and films for seals and labels for use in food andProducts segment were ¥81.2 billion and operating income waspharmaceutical products as well as home electronics in Japan were

¥6.7 billion.

consistent with the previous fiscal year’s levels. Overseas, meanwhile, sales of automobile- and home electronic-use seals andPaper and Converted Products

labels were strong in Asia, particularly in China, India, Indonesia,

In fine and specialty paper products operations, the recovery

and Thailand.

of demand for lint-free papers and other industrial-use special

In industrial and material operations, sales of PV backsheets

Net Sales
240

function papers helped offset the lower sales of mainstay color¥Billion

212.7

24

Sales by Operational Segment

Net Income / ROE

Operating Income¥Billion

20.9

15¥Billion / %

13.6
18.7%

160

16

10

80

8

5

10.9%

43.2%
38.1%

0

07 08 09 10

1 1 FY0

07 08 09 10

1 1 FY0

07 08 09 1 0
Net Income
ROE

1 1 FY

Printing and Industrial
Materials ProductsElectronic and Optical Products
Paper and Converted Products

LINTEC ANNUAL REPORT 201121

papers for envelopes resulted from poor market conditions, andCash Flowsales were solid.

Net cash provided by operating activities increased ¥1.0 billion

In converted products operations, sales for mainstay releaseyear on year, to ¥23.3 billion. This was primarily due to a ¥16.8

papers and release films for optical-related products werebillion increase in changes in trade notes and accounts receivableconsistent, and casting papers for synthetic leather and carbon

and a ¥13.5 billion decrease in changes in trade notes andfiber composite materials saw favorable sales.

accounts payable.

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

Net cash used in investing activities rose ¥0.7 billion, to ¥9.9

Products segment were ¥39.7 billion and operating income wasbillion. Major factors included a ¥2.3 billion increase in payments into

¥6.1 billion.

time deposits, a ¥3.3 billion decrease in proceeds from withdrawalof time deposits, and a ¥1.3 billion increase in purchase of invest-

Financial Condition

ments in subsidiaries resulting in change in scope of consolidation.

Total assets at the end of the fiscal year under review increased

Net cash used in financing activities declined ¥0.6 billion, to5.4% year on year, to ¥ 206.2 billion, primarily due to a rise in cash

¥2.8 billion. This was largely the result of a ¥2.1 billion decrease in

and cash deposits that accompanied the increase in net sales.

change in short-term borrowings and a ¥1.4 billion increase in cash

Total liabilities were up 2.0%, to ¥75.6 billion, due in part to anincrease in trade notes and accounts payable. Total net assets

dividends paid.
Consequently, cash and cash equivalents at the end of the fiscal

increased 7.5%, to ¥130.6 billion, as a result of the increase inyear totaled ¥35.2 billion, up from ¥25.4 billion at the end of theretained earnings.

previous fiscal year.

Due to the above, net assets per share increased from ¥1,596.37
at the end of the previous fiscal year, to ¥1,715.78, and the share-

Dividends

holders’ equity ratio increased from 61.7% to 62.9%.

Total cash dividends per share for the fiscal year under review
increased ¥16.00 year on year, to ¥40.00, which comprised aninterim dividend of ¥20.00 per share and a year-end dividend of¥20.00 per share. For the fiscal year ending March 31, 2012, we
forecast that the annual dividend will be the same as in the fiscal
year under review at ¥40.00 per share.

Total Assets / Net Assets
240¥Billion

206.2

160

Net Cash Provided byOperating Activities
24¥Billion

23.3

Cash Dividends per Share
45

16

30

8

15

¥

40.0

130.6
80

0

07 08 09 10

1 1 FY

Total Assets
Net Assets

22

LINTEC ANNUAL REPORT 20110

07 08 09 10

1 1 FY0

07 08 09 1 0

1 1 FY

Operating Risks

The following is a summary of risks that could affect the LINTEC

water, or communications

Group’s operations. This summary provides specific examples of(4)	Outbreaks of contagious diseases

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

(5)	Unpredictable changes in laws and regulations, such as those

Forward-looking statements of this report are based on the
Company’s judgment as of June 24, 2011.

involving tax systems, foreign exchange, or customs(6)	Problems arising between the Group and its business1. Changes in Economic Conditions

associates or in the collection of accounts receivable due to

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

industries. Therefore, domestic and overseas economic conditions

6. New Product Development

affect the Group’s operations directly and indirectly. As a result,

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

future trends in economic conditions could affect the Group’s

hensive technological capabilities that cater to market demand andbusiness results. Further, world trends in the electronics industry

bringing to market competitive, high-value-added products. Accord-

affect the Group’s new businesses in the field of electronics-related

ingly, the Group is stepping up allocations of management resources

products. Future electronics industry trends could affect theto increase its number of researchers and to pursue such initiatives

Group’s business results.

as joint research with other companies and academic institutions.

2. Changes in Selling Prices

However, there is no guarantee that such investment of management

Due to intense competition in both the domestic and overseas

resources in R&D will result in the development of new products ormarkets in which the Group operates, the Group may not be able toincrease operating income. Due to such factors as extended

maintain selling prices to preserve sufficient earnings or sales

development periods, it could become necessary to discontinue

share. Furthermore, the Group’s business results could be affecteddevelopment, and product development costs cannot beby difficulties related to cost reductions aimed at maintaining

recovered, it could affect the Group’s business results.

profits and recovering its share by refining customer services.

7. Intellectual Property Rights

3. Changes in Raw Material Prices

The Group takes necessary measures to protect intellectual

The Group uses a wide range of raw materials, such as pulp for

property rights in Japan and overseas for various original production

paper and petrochemical products, and fuels. The prices of thesetechnologies that it has developed. However, legal measures alonematerials fluctuate in accordance with market conditions, such as

do not provide complete protection, possibly preventing the Groupinventories and the supply-demand balance. The Group purchasesfrom effectively protecting the rights it has obtained. Furthermore,

raw materials in light of careful monitoring of market trends.

in the event that a lawsuit is filed by a third party regarding intel-

However, a dramatic change in raw material prices could affect thelectual property rights infringement associated with the Group’sGroup’s business results.

products, the Group’s business results could be affected.

4. Changes in Foreign Exchange Rates

8. Significant Lawsuits

The Group conducts foreign currency-denominated procure­ment

In conducting business in Japan and overseas, the Group may beand sales overseas as well as finance transactions between bothsubject to lawsuits or other claims related to product liability, envi-

domestic and overseas Group companies. Therefore, changes inronmental, or intellectual property rights issues. Lawsuits orforeign exchange rates could affect the Group’s business results.

claims, depending on their content, could affect the Group’s

5. Overseas Operations

business results.

The Group conducts manufacturing and business operations in

9. Legal and Regulatory Systems

markets worldwide. In these countries, the following events could

In the countries in which it conducts business operations, the Groupaffect the Group’s business results.

is subject to various legal and regulatory systems, and the Group is(1)	Political instability or a deterioration in security due to suchworking to ensure rigorous compliance with these systems. In thefactors as terrorism, a political change, or a coup d’état

event that the systems are strengthened or changed, the Group’s(2)	Labor disputes, such as those involving strikes or boycotts

business activities could be restricted or the Group’s business(3)	Infrastructure failures, such as those related to electric power,

results could be affected.

LINTEC ANNUAL REPORT 201123

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

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

2011

2010

2009

2008

¥212,733¥189,348¥194,901¥202,297

20,8899.8%
19,565
13,622
10.9%
9.7%

11,576
6.1%
11,399
7,284
6.2%
6.1%

8,498
4.4%
5,215
3,391
2.9%
3.0%

14,8947.4%
13,191
9,308
8.0%
6.6%

44.86

¥ 123.15

1,596.37
24.00

1,497.58
20.00

1,598.30
24.00¥10,178(8,237)23,307(9,926)(2,820)¥10,537(7,777)22,259(9,253)(3,454)¥11,286(9,584)
12,979(9,752)(2,300)¥ 9,011(14,700)
17,739(15,071)(769)¥132,891¥121,451¥95,937¥120,028

60,46572,42635,18861,88858,65462,79725,387
63,33754
0.0%

43,65552,282
15,37067,010107
0.1%

67,631
52,397
17,31573,711
201
0.2%

195,656
121,502

172,854
113,930

204,852
121,635

61.7%

65.5%

59.4%

76,564,240
4,037

76,564,240
3,987

76,564,240
3,802¥  180.21
1,715.78
40.00——
206,188
130,576
62.9%
76,564,240
4,198

¥

96.36

¥

¥91,936
81,19355,317
7,990
6,732
6,129

(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 has been presented

24

LINTEC ANNUAL REPORT 2011

Millions of yen except per share data, number of shares, and number of employees
2007

2006

2005

2004

2003

2002

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

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

¥158,947
10,298
6.5%
12,182
7,778
10.2%
6.0%

¥148,984
7,440
5.0%
3,239
1,592
2.2%
4.2%

¥137,160
2,860
2.1%
865
616
0.8%
1.6%

¥ 135.44
1,489.87
18.00¥ 118.34
1,370.85
16.00¥ 108.76
1,226.28
14.00¥ 111.90
1,149.19
12.00¥ 22.18
1,055.22
12.00

¥
8.85
1,052.61
12.00¥ 7,701(11,646)
13,734(12,200)(68)¥ 6,823(12,715)
17,005(13,199)(2,789)¥ 6,216(8,699)
11,163(8,964)(411)¥ 5,503(8,699)9,475(8,497)(1,672)¥ 5,722(5,645)
10,099(7,400)(7,098)¥ 5,668(8,077)
10,237(7,487)(3,749)¥117,531
67,95049,581
15,55068,377280
0.3%
198,526
113,397
57.1%¥104,433
57,74846,685
13,766
63,176347
0.3%
181,158
104,36257.6%¥ 97,510
54,816
42,694
9,191
56,411429
0.5%
169,590
92,768
54.7%¥ 90,437
58,10932,3286,254
53,879622
0.8%
162,708
80,34749.4%¥ 85,195
50,25534,9406,921
54,6997,720
10.6%
156,439
72,57746.4%¥ 89,838
50,80839,03011,64955,9508,870
12.1%
159,076
73,26846.1%

76,564,240
3,708

76,564,240
3,537

76,564,240
3,421

70,817,980
3,171

69,629,677
3,233

69,629,677
3,208

LINTEC ANNUAL REPORT 201125

Consolidated Balance Sheets
LINTEC Corporation and its consolidated subsidiaries
March 31, 2011 and 2010ASSETS
Current assets:
Cash and deposits (Notes 10, 12)Millions of yen

Thousands ofU S dollars(Note 1)

2011

2010

2011

¥   37,403¥ 27,474$   449,833

Trade notes and accounts receivable (Note 12)

63,10764,089758,953

Inventories (Note 3)

27,571

24,686

331,586

Deferred tax assets (Note 17)

2,473

2,202

29,748

Other

2,539

3,225

30,540Allowance for doubtful accounts

(203)

(226)

(2,443)

132,891

121,451

1,598,217

		Total current assets

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

55,29654,044

665,015

Machinery, equipment and vehicles

100,650

99,2501,210,470

8,709

8,681

104,739

Land
Construction in progress

1,446

480

17,401Other

10,113

9,804

121,628

176,216

172,261

2,119,255(114,327)(108,923)(1,374,952)

61,88863,337744,303

2,072

1,334

24,928Investment securities (Notes 12, 13)

2,525

2,632

30,375

Deferred tax assets (Note 17)

5,426

5,501

65,261

Other

1,577

1,569

18,975

Allowance for doubtful accounts

(195)

(170)

(2,347)

Accumulated depreciation		Property, plant and equipment, net

Intangible assets (Note 11):
Investments and other assets:

		

Total investments and other assets

9,334

9,532

112,265		Total non current assets

73,296

74,204

881,496¥ 206,188¥195,656$ 2,479,714

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

26

LINTEC ANNUAL REPORT 2011

Millions of yen

Thousands ofU S dollars(Note 1)

2011

2010

2011

¥ 44,506¥ 44,071$  535,258

Short term borrowings (Notes 12, 24)

1,467

1,424

17,653

Accrued income taxes (Notes 12, 17)

3,557

3,555

42,779

93

69

1,126

10,8409,533

130,368

60,46558,654

727,187

LIABILITIES AND NET ASSETS
Current liabilities:
Trade notes and accounts payable (Note 12)

Provision for director’s bonuses
Other
		

Total current liabilities

Non-current liabilities:
Long term debt, less current portion (Notes 12, 24)
Accrued pension costs (Note 15)
Provision for environmental measures
Other
		

Total non current liabilities

—

54

—

13,802

14,032

165,990

149

150

1,791

1,195

1,262

14,372

15,146

15,499182,155

279,029

Contingent liabilities (Note 2)
Net assets:
Shareholders’ equity (Note 23):
Common stock:		

Authorized: 300,000,000 shares in 2011 and 2010

		Issued: 76,564,240 shares in 2011 and 2010

23,201

23,201

Capital surplus

26,83026,830322,671Retained earnings

88,63876,916

1,066,006

Less: treasury stock, at cost:		

971,045 shares in 2011 and 970,630 shares in 2010		Total shareholders’ equity(1,035)(1,034)(12,454)

137,634

125,912

1,655,253

Accumulated other comprehensive income
Net unrealized holding gain on securities

102

96

1,236

Foreign currency translation adjustments(7,894)(5,334)(94,938)(5,237)(95,402)
1,065

Adjustment regarding pension obligations of consolidated overseas subsidiaries
		

Total accumulated other comprehensive income(141)(7,932)(1,699)

Share subscription rights (Note 16)

88

67

Minority interests

786

759

9,455

Total net assets

130,576

121,5021,570,371

Total liabilities and net assets¥206,188¥195,656$2,479,714

		

LINTEC ANNUAL REPORT 201127

Consolidated Statements of Income
LINTEC Corporation and its consolidated subsidiaries
Years ended March 31, 2011 and 2010

Millions of yen

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses (Notes 4, 5)
Operating income
Non-operating income:Interest income
Dividends income
Rent income
Gain on sales of noncurrent assets
Foreign exchange gain
Other income
		 Total non operating income
Non-operating expenses:
Interest expense
Loss on retirement of noncurrent assets
Compensation expenses
Foreign exchange loss
Other expense
		 Total non operating expense
Ordinary income
Extraordinary gain:
SubsidyGain on sales of noncurrent assets (Note 6)
		 Total extraordinary gain
Extraordinary loss:
Loss on valuation of investment securities (Note 12)
Loss on sales of noncurrent assets (Note 7)
Provision for environmental measures
Loss on recycling of foreign currency translation adjustments (Note 8)
Loss on valuation of membership		 Total extraordinary loss
		 Income before income taxes
Income taxes (Note 17):
Current
Deferred		 Total income taxes
Income before minority interests
Minority interests
Net income (Note 23)

Thousands ofU S dollars(Note 1)

2011

2010

2011

¥212,733
164,188
48,54427,65520,889¥189,348
151,70237,645
26,068
11,576$2,558,427
1,974,605
583,821332,595
251,226

161
65
65
90
—
276
659

103
74
58
30
256
268
791

1,942
788
782
1,087
—
3,325
7,925

19
643
124
992
248
2,028
19,520

21
477
433
134
1,068
11,300

228
7,743
1,496
11,9392,983
24,391
234,760

61
42
104

111
283
395

738
513
1,252

150
132
12
295
11,399

541
165
—
—
—
706
235,305

45
13
—
—
—
58
19,565
6,104
(235)
5,869
13,69673¥ 13,622

4,083
(46)
4,037
78
¥   7,284

73,420(2,835)70,585
164,719884$   163,835

Millions of yen

Thousands ofU S dollars(Note 1)

Consolidated Statement of Comprehensive Income
LINTEC Corporation and its consolidated subsidiaries
Year ended March 31, 2011

2011

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

28

LINTEC ANNUAL REPORT 2011

2010

2011

¥13,696$164,719

6(2,536)18(2,511)¥11,18473(30,508)228(30,205)$134,514

11,157
27

134,188325

Consolidated Statements of Changes in Net Assets
LINTEC Corporation and its consolidated subsidiaries
Years ended March 31, 2011 and 2010

Thousands

Millions of yen
Shareholders’ equity

Accumulated other comprehensive income

Foreigncurrencytranslation
adjustments

Adjustment
regardingpensionobligations of Accumulated
consolidated other comoverseas
prehensive
subsidiaries
incomeSharesubscription
rightsMinority
interests

Total net
assets¥(6,408)¥(6,496)

¥41

¥679

¥113,930

Number ofshares ofcommonstock

Commonstock

CapitalsurplusRetainedearnings

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

76,564¥23,201¥26,830¥70,707¥(1,032) ¥119,706

Cash dividends(1,133)(1,133)(1,133)

Net income

7,284

7,284

7,284

(2)

(2)

(2)

0

0

0

58

58

Balance as at March 31, 2009

¥ (87)

Changes during the year:

Purchase of treasury stock
Disposal of treasury stock0	Increase of retained earnings
by U S pension plan

58	Net changes in items otherthan shareholders’ equity

184

1,074

1,259

25

80

0

6,209

(2)

6,206

184

1,074

1,259

25

80

7,572

26,83076,916(1,034)125,91296(5,334)(5,237)

67759

121,502

Total changes during the year
Balance as at March 31, 2010

76,56423,201

	Transfer to Adjustment
regarding pension obligationsof consolidated overseas
subsidiaries

160

160

(160)

1,365

—

(160)

Changes during the year:
Cash dividends(2,570)(2,570)(2,570)Net income

13,622

13,622

13,622

(0)

(0)

(0)

0

0

0

Purchase of treasury stock
Disposal of treasury stock0	Change of scope of consolidation

509

509

509

	Reserve fund for employee benefit

(0)

(0)

(0)

	Net changes in items otherthan shareholders’ equity
Total changes during the year

—

—

0

11,561

Balance as at March 31, 2011

76,564¥23,201¥26,830¥88,638

6(2,560)18(2,534)20

27

11,561

6(2,560)18(2,534)

20

27

9,074

¥(1,035) ¥137,634¥102¥(7,894)¥(141)¥(7,932)

¥88

¥786

¥130,576(0)Thousands

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

Balance as at March 31, 2010

(2,487)

Number ofshares ofcommonstock

Commonstock

76,564$279,029

CapitalsurplusRetainedearnings

Net
Total
unrealized
Treasury shareholders’ holding gain
stock
equity on securities$322,670 $ 925,029$(12,443)$1,514,286

1,928

1,928

	Transfer to Adjustment
regarding pension obligationsof consolidated overseas
subsidiaries

Accumulated other comprehensive income$1,162Foreigncurrencytranslation
adjustments$(64,149)

Adjustment
regardingpensionobligations of Accumulated
consolidated other comoverseas
prehensive
subsidiaries
incomeSharesubscription
rights—$(62,987)(1,928)(1,928)$   815

Minority
interests

Total net
assets$9,129 $1,461,243—

Changes during the year:
Cash dividends(30,910)(30,910)(30,910)Net income

163,835

163,835

163,835

(11)

(11)

(11)

0

2

2

Purchase of treasury stock
Disposal of treasury stock1	Change of scope of consolidation

6,123

6,123

6,123

	Reserve fund for employee benefit

(0)

(0)

(0)

	Net changes in items otherthan shareholders’ equity
Total changes during the year——

Balance as at March 31, 2011

76,564$279,0291

139,048$322,671 $1,066,006

73(30,788)228(30,486)249

325(29,910)139,03873(30,788)228(30,486)249

325

109,128$(12,454)$1,655,253$1,236$(94,938)$(1,699)$(95,402)$1,065(10)$9,455 $1,570,371

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

LINTEC ANNUAL REPORT 201129

Consolidated Statements of Cash Flows
LINTEC Corporation and its consolidated subsidiaries
Years ended March 31, 2011 and 2010

Cash flows from operating activities:
Income before income taxes
Depreciation and amortization
Amortization of goodwill
Amortization of negative goodwill
Decrease in accrued pension costs
Increase in allowance for doubtful accounts
Interest and dividend income
Interest expense(Gain) Loss on sales of property, plant and equipment
Loss on retirement of property, plant and equipment
Trade notes and accounts receivable
Inventories
Trade notes and accounts payable
Loss (Gain) on sales of investment securities
Loss on valuation of investment securities
Loss on valuation of membership
Loss on recycling of foreign currency translation adjustment
Increase in provision for environmental measures

2011

2010

2011

¥19,565
10,178
11
(11)
(258)
17
(227)
19
(26)
494
631
(2,965)
802
—
45
—
—
(1)

¥11,399
10,537$235,305
122,410
137(134)(3,113)207(2,730)
228
(324)
5,950
7,597
(35,669)
9,650
—
541
—
—
(12)

Other, net

1,012

SubtotalInterest and dividend income received
Interest expense paid
Income taxes (paid) refund
Net cash provided by operating activities
Cash flows from investing activities:
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchases of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchases of intangible assets
Purchases of investment securities
Proceeds from investment securities
Purchases of investment in subsidiaries
Payment of loans receivableCollection of loans receivable
Purchase of investments in subsidiaries resulting in change in scope of consolidation (Note 10)
Other, net
Net cash used in investing activities
Cash flows from financing activities:
Increase (decrease) in short term borrowings
Cash dividends paid
Purchase of treasury stock
Repayments of lease obligation
Other, net
Net cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Increase in cash and cash equivalents from newly consolidated subsidiaries
Cash and cash equivalents at end of year (Note 10)29,286219(19)(6,178)23,307

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

30

Millions of yen

Thousands ofU S dollars(Note 1)LINTEC ANNUAL REPORT 2011(8,185)
8,002(8,237)
293
(508)
(5)
—
—
(20)
67
(1,332)
0(9,926)(1)(2,564)(0)(253)
0(2,820)(1,250)9,310
25,387490¥35,188

(11)
(289)
5
(177)
21
(284)
375
(16,159)
2,537
14,300
(8)
4
12
132
150
(455)
22,092179(24)
1122,259(5,863)
4,697(7,777)
415
(589)
(5)
17
(28)
(132)
11
1
(9,253)(2,081)(1,133)(2)(238)
0(3,454)465
10,016
15,370¥25,387

12,171
352,2172,634(228)(74,311)
280,312(98,447)
96,241(99,063)3,529(6,118)
(69)
—
—
(241)
810
(16,025)
1(119,382)(16)(30,846)(11)(3,043)
1(33,915)(15,042)
111,970
305,319
5,898$423,188

Notes to Consolidated Financial Statements
LINTEC Corporation and its consolidated subsidiaries
March 31, 2011

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 consoli
dated financial statements have been compiled from the consolidated
financial statements prepared by the Company as required by the
Financial Instruments and Exchange Law 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 ¥83.15=U.S.$1, the prevailingexchange rate as of March 31, 2011.
As permitted under the Financial Instruments and Exchange Law 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, 2011 presentation.
(b) Consolidation
The accompanying consolidated financial statements include the accountsof the Company and its 22 significant subsidiaries as of March 31, 2011 and19 significant subsidiaries as of March 31, 2010 but exclude subsidiaries
whose total assets, retained earnings, net sales and net income are notmaterial in relation to the com­parable amounts in these statements. All
significant intercompany accounts and transactions have been eliminatedin consolidation.
Goodwill is amortized over periods of the estimated useful economic lives(mainly 5 years) on a straight line basis. Negative goodwill incurred prior to
the year ended March 31, 2010 is amortized for 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.
Transaction in foreign currencies is recorded based on the prevailingexchange rate on the transaction dates and the resulting translation gains
or losses are included in statements of income.
In respect of the financial statement items of overseas subsidiaries, allassets and liabilities accounts are translated into Japanese yen by applying
the exchange rates in effect at the fiscal year end. All income and expense
accounts are translated into Japanese yen by applying the average exchange
rate during the fiscal year.
Translation differences after allocating to minority interest for portions
attributable to minority interest are reported as foreign currencytranslation adjustments in a separate component of net assets in theaccompanying consolidated balance sheets.

(d) Investment securities
Securities with market value are stated at fair value, and changes in fair value
are recorded as a separate component of net assets at an amount, net of tax,
and the moving average method is used to calculate the original cost.
Securities without market value are stated at cost determined by themoving average method. Held to maturity securities which are expected
to be held to maturity with the positive intent and ability to be held tomaturity are reported at amortized cost.
(e) Inventories
Inventories mainly apply the cost method based on the weighted averagemethod, which determines the amount of the inventories shown on the
consolidated balance sheets by writing them down based on the decreasein their profitability.
Machinery applies the cost method based on the specific identification
method, which determines the amount of the inventories shown on the
consolidated balance sheets by writing them down based on the decreasein their profitability.
(f) Property, plant and equipment (Excluding leased assets)
Property, plant and equipment are stated at cost. Depreciation in the
Company is principally computed by the declining balance method overthe estimated useful lives of the respective assets except for the buildings
acquired after April 1, 1998, for which the straight line method is used.
Depreciation in its consolidated foreign subsidiaries is computed by thestraight line method over the useful lives of the respective assets.
The significant useful lives are summarized as follows:		 Buildings and structures
3 50 years
		 Machinery, equipment and vehicles
3 17 years(g) Intangible assets (Excluding leased assets)
Intangible assets are stated at cost less accumulated amortization.
Capitalized costs of software for internal use and other intangible assets
are amortized using the straight line method over estimated lives(five years).
(h) Leases
Leased assets arising from finance lease transactions which transfer
ownership to the lessee are depreciated as the same as the owned
property and equipment.
Leased assets arising from finance lease transactions which do nottransfer ownership to the lessee are depreciated to a residual value of zeroby the straight line method using the contract term as the useful life.
(i) Allowance for doubtful accounts
The allowance for doubtful accounts is provided at the amount of
estimated uncollectible accounts, based on individual collectability withrespect to identified doubtful receivables and past experience of doubtfulreceivables.
(j) Provision for director’s bonuses
Bonus to directors is accrued at the year end and to be paid in thefollowing year when such bonuses are attributable.
(k) Accrued pension costs
Accrued pension cost has been provided based on the projected
retirement benefit obligation and the pension plan assets.
Actuarial gain and loss are amortized in the year following the year inwhich the gain or loss is recognized primarily by the straight line method
principally over 15 years. Prior service cost is being amortized by thestraight line method principally over 15 years.
Effective the year ended March 31, 2010, the Company has adopted“Partial Amendments to Accounting Standards for Retirement Benefit(Part 3) (Accounting Standards Board of Japan (ASBJ) Statement No.19
on July 31, 2008)”.
This adoption did not affect operating income, ordinary income andincome before income taxes.

LINTEC ANNUAL REPORT 201131

(l) Provision for environmental measures
The provision for environmental measures is estimated and recorded toprovide for future potential costs, such as costs related to removal anddisposal of toxic substances based on related legal requirements.
(m) Accounting for consumption tax
Transactions subject to consumption taxes are recorded at amounts
exclusive of consumption taxes.
(n) Cash and cash equivalents
Cash and cash equivalents are composed of cash and time deposits, all ofwhich are low risk, short term financial instruments readily convertible
into cash.
(o) Research and development costs
Research and development costs are charged to income when incurred.
(p) Income taxes
Deferred tax assets and liabilities are determined based on differences
between financial reporting and tax bases of assets and liabilities and aremeasured using enacted tax rates and laws that will be in effect when the
differences are expected to reverse.
(q) Shareholders’ equity
The Corporation Law of Japan provides that an amount equal to 10% of
the amount to be distributed as distributions of capitalsurplus (other than the capital reserve) and retained earnings (other thanthe 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 canbe made at any time by resolution of the shareholders, or by the Board of
Directors if certain conditions are met, but neither the capital reserve nor
the legal reserve is available for distributions.

(r) Asset retirement obligations
Effective the year ended March 31, 2011, the “Accounting Standard for
Asset Retirement Obligations” (ASBJ Statement No. 18, issued by ASBJ on
March 31, 2008) and the “Guidance on Accounting Standard for Asset
Retirement Obligations” (ASBJ Guidance No. 21, issued by ASBJ on March
31, 2008) have been applied.
This adoption did not affect operating income, ordinary income andincome before income taxes.
(s) Business combinations and related matters
Effective the year ended March 31, 2011, the “Accounting Standard forBusiness Combinations” (ASBJ Statement No. 21, issued by ASBJ on
December 26, 2008) and the “Revised Guidance on Accounting Standard
for Business Combinations and Accounting Standard for Business
Divestitures” (ASBJ Guidance No.10 (Revised 2008), issued by ASBJ on
December 26, 2008) have been applied.
(t) Consolidated statements of income
Accompanying the application of revisions in certain rules for the presen
tation of financial statements, as contained in a cabinet order (Cabinet
Office Ordinance No.5, issued on March 24, 2009), which are based on
the “Accounting Standard for Consolidated Financial Statements” (ASBJ
Statement No. 22, issued December 26, 2008), the Company has included
the item “Income before minority interests” in the consolidated statementof income for the year ended March 31, 2011.
(u) Comprehensive income
Effective the year ended March 31, 2011, the “Accounting Standard for
Presentation of Comprehensive Income” (ASBJ Statement No. 25, issued
by ASBJ on June 30, 2010) has been applied. In accordance with this new
standard, consolidated statement of comprehensive income for the year
ended March 31, 2010 is not presented. The comparative information forthe year ended March 31, 2010 is disclosed in Note 9.

2. Contingent Liabilities
Contingent liabilities as of March 31, 2011 and 2010 were as follows:

Guarantees (for bank borrowings)

Millions of yen

Thousands ofU S dollars

2011

2010

2011

¥

¥8

$

The Company and its consolidated subsidiaries had unused lines of credit for short term financing aggregating ¥30,244 million (U.S. $363,731 thousand)and ¥30,393 million at March 31, 2011 and 2010, respectively.
3. Inventories
Finished goods and merchandise, work in process, raw materials, supplies as of March 31, 2011 and 2010 were as follows:
Millions of yen

Finished goods and merchandiseWork in process
Raw materials and Supplies
Total

32

LINTEC ANNUAL REPORT 2011

Thousands ofU S dollars

2011

2010

2011

¥ 8,548
10,441
8,581¥27,571¥ 7,480
9,929
7,276¥24,686$102,804
125,571
103,210$331,586

4. Selling, General and Administrative Expenses
Major items included in selling, general and administrative expenses for the years ended March 31, 2011 and 2010 were as follows:
Millions of yen

Transportation and warehousing expenses
Provision for allowance for doubtful accounts
Salaries and allowances
Provision for retirement benefits
Provision for director’s bonuses
Depreciation
Research and development expenses
Other
Total

Thousands ofU S dollars

2011

2010

2011

¥ 5,029
113
5,429
474
93
817
6,017
9,677
¥27,655¥4,551
56
5,129
609
69
671
6,138
8,840
¥26,068$ 60,489
1,370
65,301
5,712
1,126
9,831
72,372
116,390$332,595

5. Research and Development Expenses
Research and development expenses, all of which were included in selling, general and administrative expenses, for the years ended March 31, 2011 and 2010
were ¥6,017 million (U.S.$72,372 thousand) and ¥6,138 million, respectively.
6. Gain on Sales of Noncurrent Assets
Gain on sales of noncurrent assets was principally related to sales of buildings and structures for the year ended March 31, 2011 and sales of land for the year
ended March 31, 2010.
7. Loss on Sales of Noncurrent Assets
Loss on sales of noncurrent assets was principally related to sales of land for the year ended March 31, 2011.
8. Loss on Recycling of Foreign Currency Translation Adjustments
Excluding from the scope of consolidation of the certain overseas subsidiaries resulted in the loss for the year ended March 31, 2010.
9. Comprehensive income
Comprehensive income for the year ended March 31, 2010 was as follows:
Millions of yen

Comprehensive income attributable to:Shareholders of the parent
Minority interests
		 Total

2010¥8,54380¥8,623

Other comprehensive income for the year ended March 31, 2010 was as follows:
Millions of yen
2010

Net unrealized holding gain on securities
Foreign currency translation adjustments
Total

¥184
1,076
¥1,261(Supplementary information)
Effective the year ended March 31, 2011, the “Accounting Standard for Presentation of Comprehensive Income” (ASBJ Statement No. 25, issued by ASBJ on
July 30, 2010) has been applied. However, the consolidated amounts of “Accumulated other comprehensive income” and “Total accumulated othercomprehensive income” for the year ended March 31 ,2010 represents the amounts of “Valuation and translation adjustments” and “Total valuation andtranslation adjustments”, respectively.

LINTEC ANNUAL REPORT 201133

10. Cash and Cash Equivalents
Reconciliation between cash and cash equivalents in the consolidated statements of cash flows and cash and deposits in the consolidatedbalance sheets as of March 31, 2011 and 2010 were as follows:
Millions of yen

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

Thousands ofU S dollars

2011

2010

2011

¥37,403(2,215)¥35,188¥27,474(2,087)¥25,387$449,833(26,644)$423,188

Assets and liabilities related to finance lease transactions newly recognized for the years ended March 31, 2011 and 2010, were ¥231 million(U.S. $2,785 thousand) and ¥505 million, respectively.
Assets and liabilities of SOLAMATRIX, INC. and other subsidiary (Newly acquired consolidated subsidiaries) through acquisition of shares at the inception of their consolidation, related acquisition cost and purchases of investments for acquisition of shares for the year ended March 31, 2011 were as follows:
Millions of yen

Current assets
Non current assets
Goodwill
Current liabilities
Non current liabilities
Acquisition cost of shares of Newly acquired consolidated subsidiaries
Cash and cash equivalents of Newly acquired consolidated subsidiaries
Less: purchases of investments in Newly acquired consolidated subsidiaries

Thousands ofU S dollars

2011

2011

¥  577
920
219
(149)
(138)
1,429
(96)
¥1,332$  6,949
11,067
2,637(1,796)(1,669)17,186(1,161)$16,025

11. Leases(Leasee’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, 2011 and 2010.
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, 2011 and 2010.
The minimum lease payments under noncancellable operating leases as of March 31, 2011 and 2010 were as follows;
Millions of yen

Due within one year
Due after one year
Total

12. Financial Instruments
1. Status of financial instruments(1) Policy regarding financial instruments
The LINTEC Group (the “Group”) limits the scope of its cash and fundmanagement activities to short term deposits and has a policy of relying
principally on bank borrowings.
The Group makes use of derivatives only to reduce risk of foreign
currency exchange fluctuations and has a policy of not engaging inderivative 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 notes and accounts receivable that are outstanding from its
customers. Regarding the risk pursuant to the internal regulations for
managing its credit exposure and trade receivables, due dates andbalances are managed appropriately for each customer, to mitigate risks ofuncollectible accounts.

34

LINTEC ANNUAL REPORT 2011

Thousands ofU S dollars

2011

2010

2011

¥114
53
¥167

¥117
151
¥269

$1,372641$2,013

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

2. Estimated Fair Value and Other Matters Related to Financial Instruments
Carrying value on the consolidated balance sheets as of March 31, 2011 and 2010 along with their fair value and the variance were shown in the following table.
Thousands ofU S dollars

Millions of yen

2011(1) Cash and deposits(2) Trade notes and accounts receivable(3) Investment securities
Other securities(4) Trade notes and accounts payable(5) Short term borrowings(6) Accrued income taxes

Carrying value

Estimated
fair value¥ 37,403
63,107¥ 37,403
63,107

1,798(44,506)(1,467)(3,557)

1,798(44,506)(1,467)(3,557)

Variance

Carrying value

Estimated
fair value¥$ 449,833
758,953$ 449,833
758,953485(535,258)(17,653)(42,779)485(535,258)(17,653)(42,779)

Variance$

Note Figures shown in parentheses are liability items

Millions of yen
2010(1) Cash and deposits(2) Trade notes and accounts receivable(3) Investment securities
Other securities(4) Trade notes and accounts payable(5) Short term borrowings(6) Accrued income taxes(7) Long term debt, less current portion

Carrying value

Estimated
fair value¥27,474
64,089¥27,474
64,0891,826(44,071)(1,424)(3,555)(54)

1,826(44,071)(1,424)(3,555)(54)

Note Figures shown in parentheses are liability items

Variance¥

Note 2 	Financial instruments for which obtaining an estimated fair value is deemed to be extremely difficult;

Note 1 	Method of computing the estimated fair value of financial instruments and securities(1) Cash and deposits; (2) Trade notes and accounts receivable	Since these items are settled in a short period of time and have estimated fair values that are virtually
the same as the carrying value on the ledger, the carrying value has been used
(3) Investment securities
	The market value of investment securities is determined by the price of the stock traded on an
exchange market
	(4) Notes and accounts payable; (5) Short-term borrowings;(6) Accrued income taxes	Since these items are settled in a short period of time and have estimated fair values that are virtually
the same as the carrying value on the ledger, the carrying value has been used
(7) Long-term debt, less current portion	Since long-term debt, less current portion with variable interest rates reflects the market interest rates
within a short period of time, its market value is almost the same as its carrying value, the relevant
carrying value is used under the stable credit condition of the Group2011
Carrying value¥727

Unlisted Stocks

Millions of yen

Thousands ofU S dollars

2010
Carrying value
¥806

2011
Carrying value$8,749The 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 above table “(3) Investment securities”
Note 3 	Planned redemption amounts after the balance sheet date (March 31, 2011) for held-to-maturity
securities and receivables were as follows

Millions of yen
2011
Within One year
¥ 37,367
63,107¥100,474

Cash and deposits
Trade notes and accounts receivable
Total

Thousands ofU S dollars
2011
Within One year$  449,392
758,953$1,208,346(Supplementary information)
Beginning with the year ended March 31, 2010, the Company and its consolidated subsidiaries have adopted“Accounting Standard for Financial Instruments” (ASBJ Statement No 10, issued by ASBJ on March 10, 2008)
and the “Implementation Guidance on Disclosure about Fair Value of Financial Instruments” (ASBJ Guidance
No 19, issued by ASBJ on March 10, 2008)

13. Marketable and Investment Securities
The carrying value and acquisition cost of other securities as of March 31, 2011 and 2010 were as follows:
Millions of yen

Thousands ofU S dollars
2011

Description

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

StocksBonds
Other
StocksBonds
Other

Carrying value

Acquisition cost

Unrealized gain
(loss)

Carrying value

Acquisition cost

Unrealized gain
(loss)¥1,333¥  993¥ 340$16,043$11,951$ 4,092¥1,333¥  464¥  993¥  631¥ 340¥(166)$16,043$ 5,582$11,951$ 7,590$ 4,092$(2,008)¥  464¥1,798¥  631¥1,624¥(166)¥ 173$ 5,582$21,625$ 7,590$19,541$(2,008)$ 2,084

LINTEC ANNUAL REPORT 201135

Millions of yen
2010
Description

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

StocksBonds
Other
Stocks
Bonds
Other

Subtotal
		 Total

Carrying value

Acquisition cost

Unrealized gain
(loss)¥1,487¥1,157¥ 329¥1,487¥  339¥1,157¥  505¥ 329¥(165)¥  339¥1,826¥  505¥1,663¥(165)¥ 163

The Company wrote down by ¥45 million (U.S. $541 thousand) against other securities with a remarkable decline in the value of investment for theyear ended March 31, 2011.
14. Derivative and Hedging Activities
No specific disclosure for derivatives has been made at March 31, 2010 and 2011 because of its immateriality.
15. Accrued Pension Costs
The Company and its domestic subsidiaries sponsor a corporate pension fund under the Japanese Defined Benefit Corporate Pension Law and retirement
plans for their employees. Certain foreign consolidated subsidiaries have defined contribution plans and defined benefit plans.
Actuarial present value of projected benefit obligations and unfunded status as of March 31, 2011 and 2010 were as follows:
Millions of yen

Actuarial present value of projected benefit obligations
Plan assets
Unfunded accrued pension costs
Unrecognized net actuarial loss
Unrecognized prior service cost
Net retirement benefit obligation recognized in the consolidated balance sheet
Prepaid pension costs
Accrued pension costs

Thousands ofU S dollars

2011

2010

2011

¥(31,989)
15,492(16,497)
5,241(2,512)(13,767)
34¥(13,802)¥(31,225)
15,717(15,508)
4,296(2,812)(14,024)
8¥(14,032)$(384,725)
186,323(198,402)
63,034(30,210)(165,578)
412$(165,990)

Millions of yen

Thousands ofU S dollars

Components of pension and severance cost for the years ended March 31, 2011 and 2010 were as follows:

Service cost
Interest cost
Expected return on plan assets
Unrecognized net actuarial loss
Prior service cost
Other
Total

2011

2010

2011

¥1,190
648
(566)
439
(301)
78
¥1,488¥1,184
634
(452)
581
(301)
71
¥1,717$14,311
7,796(6,813)
5,288(3,621)
944$17,906

Major assumptions at the beginning of each of the years ended March 31, 2011 and 2010 were as follows:
Discount rate
Expected rate of return on plan assets
Allocation method of pension costs
Term of amortization of unrecognized net actuarial loss
Term of amortization of prior service cost

36

LINTEC ANNUAL REPORT 2011

2011

2010

Mainly 2.0%
Mainly 3.5%
Straight line method
15 years
15 years

2.0%
3.5%
Straight line method
15 years
15 years16. Stock Option Plan
Stock based compensation expense of ¥20 million (U.S. $249 thousand), ¥25 million were included in selling, general and administrative expenses for theyears ended March 31, 2011 and 2010 respectively.
The following table summarizes contents of stock options as of March 31, 2011:
The first share subscription rights
Name of Company
Date of approval of the Board of Directors
Position and number of grantees
Class and number of stocks
Date of grantCondition and settlement of rights
Period of providing service for stock options
Exercise period
The second share subscription rights
Name of Company
Date of approval of the Board of Directors
Position and number of grantees
Class and number of stocks
Date of grantCondition and settlement of rights
Period of providing service for stock options
Exercise period
The third share subscription rights
Name of Company
Date of approval of the Board of Directors
Position and number of grantees
Class and number of stocks
Date of grantCondition and settlement of rights
Period of providing service for stock options
Exercise period
The forth share subscription rights
Name of Company
Date of approval of the Board of Directors
Position and number of grantees
Class and number of stocks
Date of grantCondition and settlement of rights
Period of providing service for stock options
Exercise period
The fifth share subscription rights
Name of Company
Date of approval of the Board of Directors
Position and number of grantees
Class and number of stocks
Date of grantCondition and settlement of rights
Period of providing service for stock options
Exercise period

The 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
The Company
August 9, 2007
Directors, 17
Common stock 9,300 shares
August 24, 2007
Persons who have received allotment of share subscription rights must hold the position of directorof the Company at the time of grant.
From August 25, 2007 to August 24, 2027
The Company
August 8, 2008
Directors, 14
Common stock 9,800 shares
August 25, 2008
Persons who have received allotment of share subscription rights must hold the position of directorof the Company at the time of grant.
From August 26, 2008 to August 25, 2028
The Company
August 7, 2009
Directors, 14
Common stock 15,000 shares
August 24, 2009
Persons who have received allotment of share subscription rights must hold the position of directorof the Company at the time of grant.
From August 25, 2009 to August 24, 2029

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

LINTEC ANNUAL REPORT 201137

The following tables summarize the scale and movement of stock options for the years ended March 31, 2011 and 2010:(Non-vested stock options)
The first sharesubscription rights

The second sharesubscription rights

The third sharesubscription rights

Stock options outstanding at April 1, 2009
Stock options granted
Forfeitures
Conversion to exercisable stock options
Stock options outstanding at March 31, 2010
Stock options granted
Forfeitures
Conversion to exercisable stock options
Stock options outstanding at March 31, 2011

The forth sharesubscription rights

The fifth sharesubscription rights

15,00015,00014,10014,100(Vested stock options)

Stock options outstanding at April 1, 2009
Conversion from not exercisable stock options
Stock options exercised
Forfeitures
Stock options outstanding at March 31, 2010
Conversion from not exercisable stock options
Stock options exercised
Forfeitures
Stock options outstanding at March 31, 2011

The first sharesubscription rights

The second sharesubscription rights

The third sharesubscription rights

6,000

5,500

9,800

The forth sharesubscription rights

The fifth sharesubscription rights

15,000

6,000

5,500

9,800

15,00014,100

6,000

5,500

9,800

15,00014,100The first sharesubscription rights

The second sharesubscription rights

The third sharesubscription rights

The forth sharesubscription rights

The fifth sharesubscription rights¥    1¥    1¥    1¥    1¥    1

2,788

1,947

1,481

1,726

1,474

The following table summarizes the price information of stock options as of March 31, 2011:

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

The fair value of stock options granted during the years ended March 31, 2011 and 2010 were valuated by using the Black Scholes option pricing modelwith the following assumptions:

Volatility
Expected remaining period
Expected dividend
Risk free interest rate

The forth sharesubscription rights

The fifth sharesubscription rights

35.9%
10 years
¥20
1.4%

34.9%
10 years¥24
0.9%

The expected remaining period for stock options is assumed to be the mid point of the exercise period.
17. Income Taxes
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 rateof approximately 40.69% in 2011 and 2010. Income taxes of the foreign consolidated subsidiaries are based generally on the tax rates applicable in theircountries of incorporation. The effective tax rates reflected in the consolidated statements of income for the years ended March 31, 2011 and 2010 differ
from the statutory tax rate for the following reasons:38

LINTEC ANNUAL REPORT 2011

2011

2010

40.69%

40.69%

0.49
0.28(7.19)(1.85)(1.28)
1.60(2.76)
29.98%

0.77
0.47(7.04)(3.30)
0.72
1.91
1.20
35.42%

Millions of yen

Thousands ofU S dollars

2011

2010

2011

¥   899
249
384
5,562
708
295
98
225
503
8,926
(423)
8,502

¥   807
244
377
5,591
612
226
96
212
510
8,678
(597)
8,080

$ 10,818
2,996
4,626
66,892
8,519
3,553
1,179
2,717
6,051
107,354(5,099)102,255

(1)
(197)
(70)
(420)
(180)
(871)
¥7,631

(2)
(202)
(67)
(199)
(96)
(567)
¥7,513(18)(2,373)(850)(5,060)(2,172)(10,475)$ 91,779

Statutory tax rate
Effect of:
Expenses not deductible for income tax purposes
Municipal tax
Income of foreign subsidiaries taxed at lower than Japanese statutory tax rate
Tax deduction in accordance with special tax measures
Increase (Decrease) of valuation allowance for net operating loss carryforward
Consolidating adjustment of dividend income from consolidated subsidiaries
Other, net
Effective tax rate

The significant components of deferred tax assets and liabilities as of March 31, 2011 and 2010 were as follows:

Deferred tax assets:
Accrued bonuses
Accrued enterprise taxes
Operating loss carryforwards
Accrued pension costs
Research and development cost
Loss on valuation of inventories
Allowance for doubtful accounts
Unrealized gain
Other
		 Gross deferred tax assets
Valuation allowance
Deferred tax liabilities:
Deferred capital gains
Revaluation of fixed assets in accordance with special tax measures
Net unrealized holding gain on securities
Depreciation expense of subsidiaries
Other
		

Net deferred tax assets

18. Business Combinations
There is no business combination for the year ended March 31, 2010.
No specific items to be reported for the year ended March 31, 2011 because of its immateriality.
19. Asset Retirement Obligations
There is no asset retirement obligation as of March 31, 2011.
20. Rental Property
No specific disclosure for rental property has been made at March 31, 2010 and 2011 because of its immateriality.
(Supplementary information)
Effective the year ended March 31, 2010, the “Accounting Standard for Disclosure about Fair Value of Investment and Rental Property Accounting Standard
for Related Party Disclosures” (ASBJ Statement No. 20, issued by ASBJ on November 28, 2008) and the “Guidance on Accounting Standard forDisclosures about Fair Value of Investment and Rental Property” (ASBJ Guidance No. 23, issued by ASBJ on November 28, 2008) have been applied.
21. Segment Information(Supplementary information)
Effective the year ended March 31, 2011, the “Accounting Standard for Disclosure about Segments of an Enterprise and Related Information” (ASBJ
Statement No. 17, issued by ASBJ on March 27, 2009) and the “Guidance on Accounting Standard for Disclosures about Segments of an Enterprise andRelated Information” (ASBJ Guidance No. 20, issued by ASBJ on March 21, 2008) have been applied.

LINTEC ANNUAL REPORT 201139

1. Overview of reportable segments(1) Decision procedures for reportable segments
The business segments of our group are subject to periodic review, because each of them provides its own financial information separately from otherbusiness units of our group and the board of directors not only makes a decision on allocation of management resources, but also evaluates the perfor
mance of them.
Our group consists of seven 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
three 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 papers and films for seals and labels, Label printing machines, Barcode printers, Films for outdoor signs and advertising,Interior finishing mounting sheets, Window films, PV backsheets, Adhesive products for automobiles, Industrial use adhesive
tapes, Healthcare related productsElectronic and Optical Products

Semiconductor related tapes and equipment, Coated films for multilayer ceramic capacitor production, Optical related products

Paper and Converted Products

Color papers for envelopes, Special function papers, Release paper and films, Casting papers for carbon fiber composite materials,
Casting papers for synthetic leather

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.
3. Information on sales and income (loss), assets, and other items by business segment reported for the year ended March 31, 2011 is outlined as follows;
Millions of yen
2011

Net sales
Net sales to external customers
Intra segment sales and transfers
Total
Segment income
OthersDepreciation and amortization
Amortization of goodwill

Printing andIndustrial Materials
Products

Electric and
OpticalProducts

Paper andConverted
Products

Total

Adjustments

Consolidation¥91,89837¥91,936¥ 7,990¥81,155
38¥81,193¥ 6,732¥39,679
15,638¥55,317¥ 6,129¥212,733
15,714¥228,447¥ 20,852¥     
(15,714)¥(15,714)¥37¥212,733¥ 3,513¥    11¥ 3,815¥     

¥ 2,850¥     

¥ 10,178¥     11¥     
¥     

¥ 10,178¥     11¥212,733¥ 20,889

Thousands of U S dollars
2011

Net sales
Net sales to external customers
Intra segment sales and transfers
Total
Segment income
OthersDepreciation and amortization
Amortization of goodwill

Printing andIndustrial Materials
Products

Electric and
OpticalProducts

Paper andConverted
Products

Total

Adjustments

Consolidation$1,105,216
453$1,105,670$   96,101$976,007
458$976,465$ 80,963$477,203
188,074$665,277$ 73,712$2,558,427
188,986$2,747,413$   250,777$       (188,986)$(188,986)$448$2,558,427$   42,250$      137

$ 45,882$      

$ 34,276$      $   122,410$      137

$       $       

$  122,410$      137

Notes (1) Segment income adjustments show elimination of the amount of intra-segments transactions(2) Segment income is adjusted to be reported as operating income in the consolidated statements of income(3) The amount to be written off as depreciation and amortization of goodwill are allocated among the business segment on the basis of reasonable criteria(4) Since companies, offices, and factories serve as the base for administrative classification of segment’s assets, no allocation to the business segment is done40

LINTEC ANNUAL REPORT 2011

$2,558,427$  251,226

It is impracticable to restate segment information of the year ended March 31, 2010 complying revised accounting standard for segment information.
Alternatively, in accordance with the revised accounting standard article 36, restatement of segment information of the year ended March 31, 2011
complying pre revised segment standards was outlined below:
Business Segments
Millions of yen
2011

Net sales
Intra group sales and transfers
Total
Operating expenses
Operating income
Total assets
Depreciation and amortization
Capital expenditure

Pressure sensitiveadhesive related
operations

Paper related
operations

Total

Corporate andeliminations¥165,569
44
165,614
151,738¥ 13,876¥143,015¥   6,637¥   6,562¥47,163
17,11364,27657,194¥ 7,082¥53,685¥ 3,540¥ 3,496¥212,733
17,158229,891
208,932¥ 20,958¥196,700¥ 10,178¥ 10,058¥      
(17,158)(17,158)(17,089)¥     (69)¥  9,487¥      
¥      

Consolidation¥212,733
212,733
191,843¥ 20,889¥206,188¥ 10,178¥ 10,058

Thousands of U S dollars
2011

Net sales
Intra group sales and transfers
Total
Operating expenses
Operating income
Total assets
Depreciation and amortization
Capital expenditure

Pressure sensitiveadhesive related
operations

Paper related
operations

Total

Corporate andeliminations$1,991,217
538
1,991,756
1,824,871$  166,884$1,719,971$   79,825$   78,918$567,209
205,811773,021687,849$85,171$645,644$ 42,584$ 42,046$2,558,427
206,350
2,764,777
2,512,721$  252,055$2,365,615$  122,410$  120,965$      
(206,350)(206,350)(205,520)$    (829)$114,098$      
$      

Consolidation$2,558,427
2,558,427
2,307,201$  251,226$2,479,714$  122,410$  120,965

Note Corporate assets mainly consist of cash, time deposits, marketable securities, investment securities and deferred tax assets of the Company

Geographic Areas
Millions of yen
2011

Net sales
Intra group sales and transfers
Total
Operating expenses
Operating income
Total assets

Japan

Asia

Others

Total

Corporate andeliminations¥156,214
23,604
179,818
168,176¥ 11,641¥149,435¥39,464
2,678
42,14335,822¥ 6,321¥38,095¥17,054878
17,932
14,974¥ 2,958¥ 9,169¥212,733
27,161
239,894
218,973¥ 20,921¥196,700¥     
(27,161)(27,161)(27,129)¥    (31)¥  9,487

Consolidation¥212,733
212,733
191,843¥ 20,889¥206,188

Thousands of U S dollars
2011

Net sales
Intra group sales and transfers
Total
Operating expenses
Operating income
Total assets
Note The countries included in each segment were as follows Asia.
Others.

Japan

Asia

Others

Total

Corporate andeliminations$1,878,705
283,872
2,162,578
2,022,569$  140,008$1,797,183$474,621
32,215506,836
430,813$ 76,023$458,152$205,100
10,570215,670
180,094$ 35,576$110,279$2,558,427
326,658
2,885,085
2,633,476$  251,608$2,365,615$      
(326,658)(326,658)(326,275)$    (382)$ 114,098

Consolidation$2,558,427
2,558,427
2,307,201$  251,226$2,479,714

South Korea, China, Taiwan, Singapore, Indonesia, Malaysia
America, the Netherlands, Germany

The Company and its consolidated subsidiaries are primarily engaged in the manufacture and sales of products in Japan and overseas,
primarily in Asia, in two segments: pressure sensitive adhesive related operations and paper related operations for the year ended March 31, 2010.
LINTEC ANNUAL REPORT 201141

Business Segments
The business segment information of the Company and its consolidated subsidiaries for the year ended March 31, 2010 was outlined as follows:
Millions of yen
2010

Net sales
Intra group sales and transfers
Total
Operating expenses
Operating income
Total assets
Depreciation and amortization
Capital expenditure

Pressure sensitiveadhesive related
operations

Paper related
operations

Total

Corporate andeliminations¥146,324
52
146,377
140,548¥ 5,828¥135,539¥ 6,841¥ 5,642¥43,023
15,40258,42552,679¥ 5,746¥50,717¥ 3,695¥ 2,293¥189,348
15,454
204,803
193,228¥ 11,574¥186,257¥ 10,537¥ 7,935¥(15,454)(15,454)(15,456)¥1¥ 9,398¥¥

Consolidation¥189,348
189,348
177,771¥ 11,576¥195,656¥ 10,537¥ 7,935

Note Corporate assets mainly consist of cash, time deposits, marketable securities, investment securities and deferred tax assets of the Company

Geographic Areas
The geographical segment information of the Company and its consolidated subsidiaries for the years ended March 31, 2010 was outlined as follows:
Millions of yen
2010

Net sales
Intra group sales and transfers
Total
Operating expenses
Operating income
Total assets
Note The countries included in each segment were as follows Asia.
Others.

Japan

Asia

Others

Total

Corporate andeliminations¥150,248
15,550165,798
158,996¥ 6,802¥144,173¥28,472
2,355
30,827
27,181¥ 3,646¥35,049¥10,627780
11,408
10,384¥ 1,023¥ 7,034¥189,348
18,686208,034
196,561¥ 11,472¥186,257¥(18,686)(18,686)(18,790)¥104¥ 9,398

Consolidation¥189,348
189,348
177,771¥ 11,576¥195,656

South Korea, China, Taiwan, Singapore, Indonesia, Malaysia
America, The Netherlands, Germany

Overseas Sales
Overseas sales, which include export sales of the Company and its domestic consolidated subsidiaries and sales (other than exports to Japan) of its
foreign consolidated subsidiaries, for the year ended March 31, 2010 was summarized as follows:
Millions of yen
2010

Overseas sales
Overseas sales as a percentage of consolidated net sales
Note The countries included in each segment were as follows Asia.
		Others.

Asia

OthersTotal¥40,772
21.5%¥9,3274.9%¥50,100
26.5%

South Korea, China, Taiwan, Singapore, Indonesia, etc
North America, Europe, Oceania, etc

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

Thousands of U S dollars
2011

Sales
Property, plant and equipment

Japan

Asia

Others

Total

Japan

Asia

OthersTotal¥142,141
51,865¥60,058
8,359¥10,532
1,664¥212,733
61,888$1,709,461
623,757$722,295
100,532$126,670
20,013$2,558,427
744,303

Notes Sales information is based on location of customers and it is classified by country or region

42

LINTEC ANNUAL REPORT 2011

3. Information by principal customers

Name of the customer
Sumitomo Chemical Company, Limited

Millions of yen

Thousands ofU S dollars

2011

2011

Related reportable segment
Electric and Optical Products

Sales¥31,101$374,042

Information on impairment losses on noncurrent assets by reportable segment
There is no impairment loss on noncurrent assets for the year ended March 31, 2011.
Information related to the amount of amortization of goodwill and the unamortized amount of goodwill by reportable segment
Millions of yen
2011
Printing andIndustrial Materials
Products

Unamortized amount of goodwill¥

Electric and
OpticalProducts

Paper andConverted
Products

¥

Total

¥

Consolidation

¥

¥202

Thousands of U S dollars
2011
Printing andIndustrial Materials
Products

Unamortized amount of goodwill$

Electric and
OpticalProducts

Paper andConverted
Products

$

Total

$

$

Consolidation$2,435

Notes 	Since the Company and its consolidated subsidiaries disclose the same information of the amount of amortization of goodwill in its segment information section, it has been omitted
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 year ended March 31, 2011.
22. Related Party Transactions
The Company and its consolidated subsidiaries have transactions with NP Trading Co., Ltd., a subsidiary of Nippon Paper Group, for the years ended
March 31, 2011 and 2010. The transactions between the companies for the years were as follows:
Millions of yen

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

At year end
Trade notes and accounts receivable
Trade notes and accounts payable
Other liabilities

Thousands ofU S dollars

2011

2010

2011

¥11,589
5,776¥11,039
5,211$139,376
69,465

Millions of yen

Thousands ofU S dollars

2011

2010

2011

¥3,8102,325
20¥3,9852,242
2$45,826
27,963
252

These related party transactions took place on terms similar to those with third parties.
23. Amounts Per Share
Basic net income per share is computed based on net income available for distribution to shareholders of common stock and the weighted average numberof shares of common stock outstanding during each year. Diluted net income per share is computed based on net income available for distribution to theshareholders and the weighted average number of shares of common stock outstanding during each year, assuming share subscription rights. Net assets
per share is computed based on net assets excluding share subscription rights and minority interests, and the number of shares of common stock
outstanding at the respective balance sheet dates.
The amounts per share of net assets and net income as of March 31, 2011 and 2010 and for the years then ended were as follows:Yen

Net assets
Net income (basic)
Net income (fully diluted)

U S dollars

2011

2010

2011

¥1,715.78
180.21
180.11¥1,596.37
96.36
96.32

$20.632.17
2.17

LINTEC ANNUAL REPORT 201143

24. Short-Term Borrowings, Long-Term Debt and Other Interest-Bearing Debts
Short term bank loans are represented generally by 30 day or 90 day notes issued by the Company and its consolidated subsidiaries to banks at annualinterest rates from 0.43% to 0.85% at March 31, 2011 and from 0.49% to 1.15% at March 31, 2010.
Short term borrowings as of March 31, 2011 and 2010 consisted of the following:Thousands ofU S dollars

Millions of yen

Short term bank loans
Current portion of long term debt

2011

2010

2011

¥1,42047¥1,467¥1,37054¥1,424$17,077576$17,653

Millions of yen

Thousands ofU S dollars

2011

2010

2011

¥ 47

¥108

$ 576

(47)

(54)
¥ 54

(576)
$  

Millions of yen

Thousands ofU S dollars

Long term debt as of March 31, 2011 and 2010 consisted of the following:

Loans from banks:	Due serially to 2011 at interest rates of 0.46% and 1.15%
at March 31, 2011 and 2010, respectively
Less current portion¥

Other interest bearing debts as of March 31, 2011 and 2010 consisted of the following:

Short term lease obligation
Long term lease obligation

2011

2010

2011

¥215
760

¥214
766

$2,593
9,145

Planned repayment amounts after the balance sheet (March 31, 2011) date for long term debt and lease obligation are as follows:
Millions of yen

Thousands of U S dollars
2011Over one year
within two years

Over two years
within three
years

Over three years
within four years

Over four years
within five years

¥179

¥144

¥104

¥82

Lease obligation

Over one year
within two years

Over two years
within three
years

Over three years
within four years

Over four years
within five years$2,155$1,737$1,258$989

25. Subsequent Event
The following distribution of retained earnings was approved at a meeting of the board of directors held on May 12, 2011.
Millions of yen

Cash dividends (¥20 per share)

Establishment of a subsidiary
The Company resolved, at a meeting of its Board of Directors held on
January 12, 2011 to establish a subsidiary and it was completed on June15, 2011.
The purpose and overview of such subsidiary is outlined below:
1. Purpose of establishment
The Group has placed that Asia is the most important areas in order topromote the Group’s global business development and in its area,
demands for adhesive films related to general labels and seals, vehicles
including motorcycles and electronics related products is progressing.
The Group concludes that increasing production capacity and expan
sion of sales base are necessary in Asian region.
As a measure, the Group decided to establish manufacturing subsidiaryin Thailand in order to provide steady supply and strengthening ofcompetitiveness aiming for India and ASEAN market.

44

LINTEC ANNUAL REPORT 2011

Thousands ofU S dollars

2011

2011

¥1,511$18,182

2. Overview of subsidiary(1) Name: LINTEC (THAILAND) CO., LTD.
(2)	Business activities: adhesive films for general labels and seals,
vehicles including motorcycles, and electronics related products,
films for printing and industrial materials products, sales andmanufacturing of release paper.
(3) Capital: 1,500 million Baht
3. Date of establishment: June 15, 2011
4. Number of shares acquiring, acquisition cost, and equity ratio(1) Number of shares acquiring: 1,500,000 shares(2) Acquisition cost: 1,500 million Baht
(3) Equity ratio: 100%

Management’s Report on Internal Control
over Financial Reporting
Basic Framework of Internal Control over Financial Reporting
Akihiko Ouchi, President & Chief Executive Officer of LINTEC Corporation, and Hitoshi Asai, Director, Senior Managing Executive Officer & Chief Financial
Officer of LINTEC Corporation, are responsible for designing and operating adequate internal control over financial reporting for consolidated financial
statements of LINTEC Corporation and consolidated subsidiaries (the “Company”) in accordance with the basic framework set forth in “Standards andPractice Standards 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 the Company’s internal control over financial reporting for the accompanying consolidated financial statements as ofMarch 31, 2011 in accordance with the standards for assessment of internal control over financial reporting generally accepted in Japan. For this assess
ment, we first evaluated 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 its 13 consolidated subsidiaries.
We excluded 10 consolidated subsidiaries from the scope of the company level control assessment since their quantitative and qualitative impacts weredeemed insignificant.
For the purpose of determining the scope of process level controls assessment, we selected 1 consolidated subsidiary as “Significant Business
Locations,” which contributed approximately two thirds of the Company’s net sales on a consolidated basis for the fiscal year ended March 31, 2010.
For the Significant Business Locations, we primarily included business processes related to sales, accounts receivable, and inventory in the scope ofassessment as the aforementioned accounts were closely associated with the Company’s business objectives. In addition, we included certain businessprocesses in the scope of assessment not only from “Significant Business Locations” but also from all subsidiaries and affiliates, which were related tosignificant accounts involving estimates and management’s judgment or include high risk operations and/or transactions, as “business processes with amaterial 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, 2011 was effective.

LINTEC ANNUAL REPORT 201145

Report of Independent Auditors

46

LINTEC ANNUAL REPORT 2011

Investor Information
As of March 31, 2011

Head Office
23 23, Honcho, Itabashi ku, Tokyo 173 0001, Japan
Tel: 03 5248 7711 Fax: 03 5248 7760
URL: www.lintec global.com/
Established
October 15, 1934
Fiscal Year-End
March 31
Net Assets¥130,576 million
Common Stock
Authorized: 300,000,000 shares
Issued: 76,564,240 shares
Stock Listing
Tokyo Stock Exchange, 1st Section
Securities Code: 7966
Shareholder Register Agent for Common Stock
Mitsubishi UFJ Trust and Banking Corporation
1 4 5, Marunouchi, Chiyoda ku,
Tokyo 100 8212, Japan
Number of Employees
4,198 (Consolidated)
2,529 (Parent company only)
Major Shareholders
Nippon Paper Industries Co., Ltd.
Japan Trustee Services Bank, Ltd. (Trust Account)
The Master Trust Bank of Japan, Ltd. (Trust Account)Tamie Shoji
Eiko Shiwaku

				

28.76%
7.60%
6.92%
4.60%
3.95%

Ownership and Distribution of Shares

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

Share Price / Trading Volume
Share Price

1.27%
Treasury Stock27.66%

3,000¥

Financial Institutions

2,000

	

20.71%
Individuals And Other

14.76%
Overseas Companies

0.44%
Securities Companies

1,000

35.16%
Other Companies

0

Trading Volume
12

Million shares

9
6
3
0

FY2009FY2010FY201 1LINTEC ANNUAL REPORT 201147

LINTEC CORPORATION
23 23, Honcho, Itabashi ku,
Tokyo 173 0001
Japan
www.lintec global.com/

Printed in Japan