Consolidated Financial Results for the Fiscal Year Ended March 31, 2017 [J-GAAP]May 12, 2017

Company Name:

Dai Nippon Printing Co., Ltd.

Stock exchange listing:Tokyo
Stock code:
7912
URL: http://www.dnp.co.jp/
Representative:
Yoshitoshi Kitajima, President
Contact person:
Takaaki Tamura, General Manager, Corporate Communication
Telephone:+81-3-6735-0101
General meeting of shareholders:June 29, 2017
Dividend payment date:June 30, 2017
Securities report issuing date:June 29, 2017
Preparation of earnings presentation material: None
Holding of earnings announcement:
None*Amounts under one million yen have been rounded down.

1. Consolidated financial results for the year ended March 31, 2017
(April 1, 2016 – March 31, 2017)(1) Consolidated financial results(Percentages show change from corresponding year-ago period.)
Net Income
Attributable toOperating Income
Ordinary Income
Parent Company
Shareholders

Net Sales
Million yen%

Million yen%

Million yen%

Million yen%

Year ended March 31, 2017

1,410,172(3.1)

31,410(30.9)

36,740(30.2)

25,226(24.9)

Year ended March 31, 2016

1,455,916(0.4)

45,471(5.6)

52,651(2.1)

33,58724.8

Note: Comprehensive income: Year ended March 31, 2017: ¥53,334 million (–%)
Year ended March 31, 2016: ¥(19,805) million (–%)
Diluted Net
Incomeper Share

Net Income
per Share

Ordinary
Income toTotal Assets

ROE

Operating
Income to
Net Sales

Yen

Yen

%

%

%

Year ended March 31, 2017

40.79

40.78

2.5

2.1

2.2

Year ended March 31, 2016

53.10

53.07

3.2

3.0

3.1

Reference: Equity in earnings of affiliates: Year ended March 31, 2017: ¥3,014 million
Year ended March 31, 2016: ¥3,696 million(2) Consolidated financial position
Total Assets

Net Assets

Net Assets
per Share

Equity Ratio

Million yen

Million yen%

Yen

As of March 31, 2017

1,741,904

1,081,286

59.4

1,680.55

As of March 31, 2016

1,718,636

1,063,241

59.2

1,618.66

Reference: Stockholders’ equity: As of March 31, 2017: ¥1,033,864 million

As of March 31, 2016: ¥1,017,425 million(3) Consolidated cash flows
Cash Flows fromOperating Activities

Cash Flows from
Investing Activities

Cash Flows from
Financing Activities

Cash and Cash
Equivalents at Endof the Year

Million yen

Million yen

Million yen

Million yen

Year ended March 31, 2017

71,94414,011(45,222)214,564

Year ended March 31, 2016

72,629(60,883)(47,166)

175,513

2. Dividends
Dividends per Share
First
Quarter-end

SecondThird
Quarter-end Quarter-end

Year-end

AnnualTotal Dividends(Annual)Dividend
Payout Ratio(Consolidated)

Dividends to
Net Assets
Ratio(Consolidated)

Yen

Yen

Yen

Yen

Yen

Million yen%%

Year ended March 31, 2016

–

16.00

–

16.00

32.00

20,13160.3

1.9

Year ended March 31, 2017

–

16.00

–

16.00

32.00

19,70578.5

1.9

Year ending March 31,2018 (Forecast)

–

16.00

–

32.00

–

75.7

Note: Dai Nippon Printing Co., Ltd. plans to implement a share consolidation in which two shares of common stock areconsolidated into one share effective October 1, 2017. As a result, year-end dividends per share for the fiscal year
ending March 2018 (forecast) shows dividends after the share consolidation, and total annual dividends shows “–”.
Without the share consolidation, year-end dividends per share for the fiscal year ending March 2018 would be ¥16.00.
For further details, see the section titled, “Explanation regarding appropriate use of earnings forecasts and other special
notes.”

3. Consolidated earnings forecasts for the year ending March 31, 2018
(April 1, 2017 – March 31, 2018)(Percentages show change from corresponding year-ago period.)
Net Income
Operating
Attributable to
Net Income
Ordinary Income
IncomeParent Company
per Share
Shareholders

Net Sales

Full year

Million yen%

Million yen%

Million yen%

Million yen%

Yen

1,420,000
0.7
35,000 11.4
40,0008.9
26,0003.1
84.53
Note: Net income per share in the consolidated earnings forecasts (full year) for the fiscal year ending March 31, 2018 isadjusted for the impact of the share consolidation. Without the share consolidation, net income per share in the
consolidated earnings forecasts (full year) for the fiscal year ending March 2018 would be ¥42.26. For further details, see
the section titled, “Explanation regarding appropriate use of earnings forecasts and other special notes.”* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting ina change in the scope of consolidation): No(2) Changes in accounting policies, changes in accounting estimates, and restatement of revisions
1) Changes in accounting policies with revision of accounting standards: Yes
2) Changes in accounting policies other than the 1) above:Yes3) Changes in accounting estimates:
Yes
4) Restatement of revisions:No
Note: For further details, see the section titled, “5. Consolidated financial statements and key notes, (5)Notes regarding consolidated financial statements [Changes in accounting policies], [Changes inaccounting policies that are difficult to distinguish from changes in accounting estimates]” on pages
26-27.
(3) Number of common shares issued and outstanding
1) Number of common shares outstanding
As of March 31,
at end of each period (including
2017
treasury shares)
2) Number of treasury shares at end of
As of March 31,
2017each period
3) Average number of shares outstanding
Year ended
March 31, 2017
during the period

663,480,693 As of March 31,
shares2016

680,480,693
shares48,287,110 As of March 31,
shares2016

51,919,577
shares618,506,767
Year ended
shares March 31, 2016

632,591,975
shares(Reference) Non-consolidated financial results
Non-consolidated financial results for the year ended March 31, 2017
(April 1, 2016 – March 31, 2017)(1) Non-consolidated financial results(Percentages show change from corresponding year-ago period.)
Operating Income
Ordinary Income
Net Income(Loss)Net Sales
Million yen%

Million yen%

Million yen%

Million yen%

Year ended March 31, 2017976,797(2.4)(9,406)–

20,962(25.7)

19,985(12.5)

Year ended March 31, 2016

1,001,026

0.2(1,542)–

28,20615.5

22,848

4.5

Net Income
per Share

Diluted Net Income
per Share
Yen

Yen

Year ended March 31, 2017

32.28

–

Year ended March 31, 2016

36.09

–

(2) Non-consolidated financial position
Total Assets

Net Assets

Net Assets
per Share

Equity Ratio

Million yen

Million yen%

Yen

As of March 31, 2017

1,399,653

737,21152.7

1,197.28

As of March 31, 2016

1,362,528

726,36753.3

1,154.60

Reference: Stockholders’ equity: As of March 31, 2017: ¥737,211 million As of March 31, 2016: ¥726,367 million* These financial results are exempt from auditing.
* Explanation regarding appropriate use of earnings forecasts and other special notes
1. Forward-looking statements in this report, including earnings forecasts, are based on assumptions about
economic conditions, market trends, and other factors at the time the report was published. Actual results
may differ significantly due to a variety of factors. For information about earnings forecasts, see the section
titled, “1. Overview of operating results, etc., (4) Forecasts,” on page 5.
2. The Board of Directors of Dai Nippon Printing Co., Ltd., at a meeting held on May 12, 2017, decided topartially amend the Articles of Incorporation in relation to a change in the number of shares per share unit(change from 1,000 shares to 100 shares), and to propose a share consolidation (two shares of common
stock into one share) at the 123rd Ordinary General Meeting of Shareholders scheduled for June 29, 2017.
The change in the number of shares per share unit and the share consolidation will take effect on October 1,
2017, subject to approval at the Ordinary General Meeting of Shareholders. Without the share consolidation,
the dividend forecast and consolidated earnings forecast for the year ending March 31, 2018 would be as
follows.
(1) Dividend forecast for the year ending March 31, 2018
Year-end dividends per share¥16.00(2) Consolidated earnings forecast for the year ending March 31, 2018
Net income per share
Full year¥42.26

Contents
1. Overview of operating results, etc. ........................................................................................................ 2(1) Overview of operating results for the year ended March 31, 2017................................................... 2(2) Overview of financial position for the year ended March 31, 2017................................................... 4(3) Overview of cash flows for the year ended March 31, 2017 ............................................................ 4(4) Forecasts ......................................................................................................................................... 5(5) Basic policies regarding the allocation of profits and dividends for the year ended March 31, 2017and year ending March 31, 2018 ..................................................................................................... 5(6) Business risks .................................................................................................................................. 6
2. Information on DNP ............................................................................................................................... 8
3. Management policies........................................................................................................................... 12(1) Core policies .................................................................................................................................. 12(2) Medium- and long-term management strategy and key issues ..................................................... 12
4. Basic approach in the choosing of accounting standards ................................................................... 15
5. Consolidated financial statements and key notes ............................................................................... 16(1) Consolidated balance sheets ......................................................................................................... 16(2) Consolidated statements of income and comprehensive income .................................................. 18(3) Consolidated statements of changes in net assets ....................................................................... 20(4) Consolidated statements of cash flows ......................................................................................... 22(5) Notes regarding consolidated financial statements ....................................................................... 24[Notes on premise of a going concern] ......................................................................................... 24[Basis of presenting consolidated financial statements]................................................................ 24[Changes in accounting policies] ................................................................................................... 26[Changes in accounting policies that are difficult to distinguish from changes in accounting
estimates] .................................................................................................................................... 27[Consolidated balance sheets] ...................................................................................................... 27[Consolidated statements of income] ............................................................................................ 27[Consolidated statements of changes in net assets] ..................................................................... 28[Segment information, etc.] ........................................................................................................... 29[Per share information] .................................................................................................................. 33[Significant subsequent events] .................................................................................................... 33
6. Non-consolidated financial statements and key notes ........................................................................ 35(1) Non-consolidated balance sheets .................................................................................................. 35(2) Non-consolidated statements of income ........................................................................................ 37(3) Non-consolidated statements of changes in net assets ................................................................ 38(4) Notes regarding non-consolidated financial statements ................................................................ 39[Notes on premise of a going concern] ......................................................................................... 39

1

1. Overview of operating results, etc.
(1) Overview of operating results for the year ended March 31, 2017
Japan’s economy gradually recovered during the fiscal year ended March 31, 2017, with
employment and income conditions improving as a result of the economic policies of the Japanese
government and the monetary easing policies of the Bank of Japan. However, the economy has still
not reached a full-fledged recovery, due partly to a stronger yen, sluggish consumer spending, andoverseas economic slowdowns in China and elsewhere.
The printing industry continued to face a tough business environment as a result of lower demandfor printed media, including published printed materials, and lower order prices due to stiffer
competition.
In this environment, the DNP Group (DNP) identified the four growth areas of “Knowledge andCommunication,” “Food and Healthcare,” “Lifestyle and Mobility,” and “Environment and Energy”
from among the various social challenges in Japan and overseas. It worked to increase earnings
while focusing on creating new value by expanding existing business and developing new businessthrough P&I innovations as a combination of its strengths in printing and information.
First, in the area of “Knowledge and Communication,” DNP launched a joint initiative in April 2016
with Cybertrust Japan Co., Ltd., which excels in electronic authentication, to provide various
authentication services with the aim of expanding online identity authentication services that are safe,
secure, and convenient. Additionally, DNP formed a capital and business alliance with Future Link
Network Co., Ltd. in September 2016 to fully enter a regional revitalization business using
community information portal sites and community currency points.
In the “Food and Healthcare” area, DNP concluded an agreement in May 2016 with SIG
Combibloc Group AG, a major global manufacturer of paper containers for food and beverages, tocooperate in the Japanese market.
In the “Lifestyle and Mobility” area, DNP pursued the development of new products with superior
functionality, including non-electric dimming blind glass that works by sliding two sheets of glass
manually to switch between transparent and dim views; and surface resin glass for automobiles thatis lightweight and demonstrates excellent weather and wear resistance.
In the “Environment and Energy” area, DNP developed a variety of products and services toachieve a sustainable society that combines economic growth and environmental preservation. DNP
was awarded the 26th Grand Prize for Global Environment Award, Japan Business Federation
Chairman's Prize, in February 2017, valuing its environmental preservation efforts, including
reducing power consumption using DNP Lighting Film to effectively reflect and disperse natural lightfrom windows in a room.
DNP also implemented groupwide structural reforms to bolster business competitiveness,
including the reorganization and consolidation of business divisions and group companies.
Despite these activities, consolidated net sales for the year ended March 31, 2017 fell 3.1% year
on year to ¥1,410.1 billion, consolidated operating income fell 30.9% to ¥31.4 billion, consolidated
ordinary income fell 30.2% to ¥36.7 billion, and net income attributable to parent company
shareholders fell 24.9% to ¥25.2 billion.
Business segment results for the year ended March 31, 2017 are presented below.
[PRINTING]
Information Communication
In the Publishing business, amid an ongoing slump in the publication market, Publishing & Media
Services fell below year-ago levels due to the large impact of a decline in magazine sales, although2book sales were in line with last year thanks to aggressive sales activities. In the Education andPublications Distribution business, DNP worked to expand business in the “honto” hybrid bookstore
network that combines physical bookstores, online bookstores, and e-book sales services, including
by launching Book Tree in October 2016 as a new service that introduces books tailored to eachcustomer’s tastes and interests that are chosen by authors and bookstore employees based on
unique themes. Library outsourcing sales also increased from the previous year on growth in thenumber of outsourcing libraries. However, overall sales in the Publishing business decreased fromthe previous year.
In the Information Innovation business, sales decreased from the previous year for advertising
flyers, but were strong for point-of-purchase promotional materials (POP) and other sales promotion
tools, and were also firm for catalogs and pamphlets. Sales were also favorable in information
security-related business, including smart cards for financial institutions and electronic money andInformation Processing Services (IPS; handling data entry, printing, and shipment of personalized
mail and other items). Overall sales increased from the previous year.
DNP established DNP Communication Design Co., Ltd. in October 2016 by integrating threegroup companies involved in planning and production in order to accurately collect and analyze datafrom the standpoint of consumers and to quickly deliver high value-added marketing communication
strategies. It seeks to provide new value and expand business by offering one-stop services fromplanning and production for various media to system construction and operation.
In the Imaging Communication business, DNP worked to expand services that use its “ShaGoo!”
automated commemorative photo booths and “Ki-Re-i” ID photo booths. However, sales decreased
from the previous year as the strong yen contributed to a decline in sales of dye-sublimation thermaltransfer printing media for photo printers (color ink ribbons and receiver paper) in North America.
As a result of the above, overall segment sales fell 2.5% year on year to ¥801.2 billion andoperating income fell 35.7% to ¥18.8 billion.
Lifestyle and Industrial Supplies
In the Packaging business, sales of paper packaging decreased, but overall sales increased fromthe previous year on growth for paper cups, plastic molded products, film packaging, and PETplastic bottle aseptic filling systems.
In the Living Space business, sales held flat year on year as DNP focused on expanding sales ofenvironmentally conscious products and automotive products that use its proprietary electron beam(EB) coating technology.
In the Industrial Supplies business, sales of photovoltaic module components decreased year on
year in both Japan and overseas. Sales of lithium-ion battery components were favorable for
automotive applications, but decreased for mobile applications. Overall sales decreased from theprevious year.
As a result of the above, overall segment sales grew 1.4% year on year to ¥388.1 billion andoperating income grew 14.6% to ¥14.4 billion.
Electronics
In the Display Components business, sales were firm for metal masks used in the production oforganic light-emitting diode (OLED) displays, which have attracted attention as next-generation
displays. However, LCD color filter sales decreased from the previous year on declines for both
small- and medium-sized filters for smartphones and tablets and large filters for TVs. Additionally,
optical film sales were in line with the previous year overall, despite a decline for mainstay polarizing
plate applications.
In the Electronic Devices business, sales decreased from the previous year as semiconductor3

photomasks were sluggish both in Japan and overseas.
As a result of the above, overall segment sales fell 15.0% year on year to ¥169.4 billion andoperating income fell 19.6% to ¥16.4 billion.
[BEVERAGES]
Beverages
The soft drink industry continued to face a tough market environment as a result of manufacturers
competing hard for market share based on prices and other factors and the competition between thenational brands of manufacturers and the private brands of retailers heating up. In this environment,
DNP worked to expand share in existing markets, improve profitability, and acquire new customers
by bolstering sales of core brand products through the release of new products, and by focusing on
the vending machine business, where it leverages area marketing and operational expertise, and onsales to large-volume retailers such as convenience stores.
As a result of these efforts, sales increased for I LOHAS, a brand of mineral water that uses alightweight PET plastic bottle, and for unsweetened tea drinks, including the mainstay Ayataka brand.
However, sales decreased to group bottlers outside the Hokkaido region and for the Coca-Colabrand. Overall segment sales fell 2.5% year on year to ¥56.6 billion, but operating income rose
145.1% to ¥2.4 billion.
(2) Overview of financial position for the year ended March 31, 2017
Total assets at the end of the current fiscal year increased by ¥23.2 billion from the end of theprevious fiscal year to ¥1,741.9 billion, due mainly to an increase in cash and time deposits.
Total liabilities increased by ¥5.2 billion from the end of the previous fiscal year to ¥660.6 billion,
due mainly to an increase in deferred tax liabilities.
Net assets increased by ¥18.0 billion from the end of the previous fiscal year to ¥1,081.2 billion,
due mainly to an increase in valuation difference on available-for-sale securities.
(3) Overview of cash flows for the year ended March 31, 2017
Consolidated cash flow provided by operating activities totaled ¥71.9 billion (¥72.6 billion in theprevious fiscal year), due mainly to ¥39.8 billion in income before income taxes and non-controllinginterests and ¥61.4 billion in depreciation.
Cash flow provided by investing activities totaled ¥14.0 billion (¥60.8 billion used in the previous
fiscal year), due mainly to ¥60.8 billion in proceeds from sales of investment securities and ¥50.0
billion in payments for purchases of property, plant and equipment. Cash flow used in financing
activities totaled ¥45.2 billion (¥47.1 billion in the previous fiscal year), due mainly to ¥20.2 billion in
dividends paid and ¥15.1 billion for purchases of treasury stock.
As a result, cash and cash equivalents at the end of the fiscal year increased by ¥39.0 billion fromthe end of the previous fiscal year to ¥214.5 billion.

4

The trends in DNP’s cash flow indicators are shown below.
Year ended
March 2013

Year ended
March 2014

Year ended
March 2015

Year ended
March 2016

Year ended
March 2017

Equity ratio (%)

56.6

59.2

59.6

59.2

59.4

Market value-based
equity ratio (%)

36.1

40.4

41.6

36.6

42.4

Debt-to-cash flow ratio(year)

2.3

1.5

2.2

2.6

2.4

Interest coverage ratio(times)

28.8

40.6

35.1

29.8

32.6

Notes:***

Equity ratio: Total stockholders’ equity / Total assets
Market value-based equity ratio: Market capitalization / Total assets
Debt-to-cash flow ratio: Interest-bearing debt / Cash flow
Interest coverage ratio: Cash flow / Interest paid
The above indicators are calculated based on consolidated financial figures.
Market capitalization is calculated as: Fiscal year-end share price × fiscal year-end number of shares
outstanding (excluding treasury stock)
Cash flow: Cash flow provided by/used in operating activities on the consolidated statements of cash flows
Interest-bearing debt: All liabilities on the consolidated balance sheet that accrue interest charges
Interest paid: Interest paid on the consolidated statements of cash flows(4) Forecasts
Going forward, DNP anticipates a gradual economic recovery in Japan, supported by the various
policies of the Japanese government and Bank of Japan. Overseas, however, the impact of
economic slowdowns is still a concern, and DNP expects conditions to remain uncertain, including
trends in foreign exchange and crude oil prices. In the printing industry, DNP expects conditions toremain difficult amid a decline in order prices due to weak demand and stiffer competition.
During the fiscal year ending March 31, 2018, DNP will push forward with efforts to create newvalue in the four growth areas based on P&I innovations. It also aims to expand earnings further by
pursuing cost structure reforms, including productivity improvement.
For the fiscal year ending March 31, 2018, DNP forecasts consolidated net sales of ¥1,420 billion,
consolidated operating income of ¥35 billion, consolidated ordinary income of ¥40 billion, andconsolidated net income attributable to parent company shareholders of ¥26 billion.
(5) Basic policies regarding the allocation of profits and dividends for the year ended
March 31, 2017 and year ending March 31, 2018
An important policy of DNP is to pass on profits to shareholders.
Profits are allocated based on a policy of paying stable dividends to shareholders and withconsideration for financial results and the dividend payout ratio. For future business expansion, DNP
strives to retain profits and strengthen its financial constitution and management base.
Retained earnings are used to invest in research and development related to new products andtechnologies, to invest in equipment needed for developing new businesses, and to implement
strategic alliances, including mergers and acquisitions. At the same time, DNP considers flexible
capital policies while also taking into consideration market trends as well as its need for capital. DNP
believes that these efforts will contribute to higher profits that can then be passed on to shareholders
in the future.
Based on this policy, DNP intends to pay a year-end dividend of ¥16 per share, which together

5with the interim dividend of ¥16 per share brings the full-year dividend to ¥32 per share, the same asin the previous fiscal year. As a result, the consolidated dividend payout ratio will be 78.5%.
For the fiscal year ending March 31, 2018, DNP forecasts interim dividends of ¥16 per share, thesame as the current fiscal year, and year-end dividends of ¥32 per share as a result of planning ashare consolidation from two shares into one share effective October 1, 2017 (without the shareconsolidation, year-end dividends would be ¥16, the same as the current fiscal year).
(6) Business risks
The performance and the results of DNP could be significantly affected by a variety of factors andcircumstances that might arise in the future. Because DNP is aware of these risk factors, its policy is
to strive to minimize their potential effects.
The following are the major factors that the DNP management views as risks.
1) The Japanese and overseas economies and consumption trends
DNP engages in a wide range of businesses with an extremely large number of corporate customers,
and steadily conducts its business so as not to overly depend on specific customers. DNP does
most of its business in the Japanese market, but if consumer spending and other components ofdomestic demand slump, owing to domestic economic weakness in sympathy with global economic
trends, declines in order volume and unit prices and other factors may affect its corporate
performance.
Additionally, DNP could be directly or indirectly affected by market trends in various industries inJapan or overseas. In particular, in electronics-related industries are susceptible to changes in
production and demand in emerging markets and global declines in unit prices are easy to takeplace, and DNP’s performance could be affected by major changes in market trends.
2) Overseas business activities
DNP conducts overseas business activities mainly in the Americas, Europe, Southeast Asia, andelsewhere, and these activities face risks including social and political turmoil caused not only byeconomic factors such as unexpected changes in laws and regulations, stricter
environmental-related laws and regulations, fragility of industrial infrastructure, and difficulty of hiringand securing personnel, but also by terrorism, war, and other factors. DNP’s performance could be
affected if its overseas business activities are obstructed as a result of these risks materializing.
3) Development of new products and services
DNP uses its printing and information technologies to develop products and services that deliver
new value to companies, consumers, and society. These development efforts face an accelerating
pace of technological innovation and diversification of needs. Going forward, amid expectations fordevelopment competition to intensify in Japan and overseas, DNP’s performance could possibly beaffected by a greater-than-expected shortening of product life cycles and by changes in market
trends.
4) Strategic business and capital alliances and corporate acquisitions
DNP engages in strategic business and capital alliances and corporate acquisitions, and its
performance could be affected if it is unable to achieve initially expected results and synergies as aresult of deterioration in the business environment affecting the companies and businesses involvedin these alliances and acquisitions.
5) Fluctuations in raw material procurement
DNP works hard to secure stable supplies and maintain optimal price by procuring raw materials

6

such as printing paper and film from multiple suppliers in Japan and overseas. However, there issome potential for temporary imbalances between supply and demand due to sharp fluctuations inpetroleum prices, sudden surges in demand from emerging markets, the impact of major disasters,
the depletion of natural resources, and climate change. DNP will respond during such times bynegotiating with client companies and business partners, but its performance could be affected if raw
materials procurement becomes extremely difficult, if purchasing prices rise sharply, or if other such
events occur.
6) Currency fluctuations
Amid the aggressive pursuit of global business expansion, DNP expects the impact of foreignexchange to steadily increase. We use such means as foreign exchange forward contracts to hedge
the risks of currency fluctuations. Nevertheless, it is possible that radical swings in currency values
could have a more serious effect on DNP’s performance.
7) Environmental protection and stricter environmental regulations
DNP’s business is affected by legal regulations in Japan and other countries related to energy
conservation, climate change prevention (e.g., reduction of greenhouse gas emissions), reduction of
the use of harmful substances, air pollution prevention, water quality protection, waste treatment,
and product recycling. These regulations could conceivably be strengthened or changed in the future.
DNP’s performance could be substantially affected by responding to these types of conditions andby a strengthening of measures to reduce environmental loads.
8) Information security and personal information protection
Global computer networks and information systems have become essential tools for conducting
business, and there are now greater risks of software and hardware defects, global cyberattacks,
computer virus infections, and personal data leaks. DNP regards information security and personal
data protection as a top management priority, and is making every effort to maintain and manage
systems and data by strengthening its organization and training employees. However, its businessactivities could be affected in the event of a malicious cyberattack, accident, or other such events.
9) Response to changes in legal regulations
DNP conducts its business based on strict compliance with laws and social ethics. We are subject toa variety of legal regulations in Japan and overseas, including product liability laws, antimonopoly
laws, personal data protection laws, patent laws, tax regulations, and import and export rules. We
believe these regulations could be strengthened in the future. On the other hand, market andindustry trends may change substantially as a result of deregulation. If that should occur, it ispossible that DNP’s business performance could be affected by greater limitations on its businessactivities, the burden of responding to regulatory changes, or increased costs.
10) Disasters
DNP takes steps to protect production equipment and other major facilities from fires andearthquakes, seeks to disperse production facilities, and undertakes business continuity planning(BCP) to minimize any production shutdowns and product supply disruptions caused by disasters.
We also use various types of insurance to transfer risk. Nevertheless, DNP’s performance could besubstantially affected in the event of major earthquakes, natural disasters such as rainstorms or
flooding caused by climate change, infectious disease outbreaks, or other unexpected events thatcause production shutdowns or significantly damage or impair social infrastructure.

711) Lawsuits and fines
DNP seeks to establish corporate ethics throughout the group, and works to earn the trust of society
by each and every employee complying with laws and regulations in conducting business activities,
maintaining higher ethical standards than required by society, and contributing to maintaining andadvancing orderly and freely competitive markets with a consistently fair attitude. Nevertheless,
DNP’s performance could be affected in the event of being subject to lawsuits and resulting fines inJapan or overseas.
2. Information on DNP
DNP Group includes Dai Nippon Printing Co., Ltd. (the Company), 139 subsidiaries, and 27 affiliatedcompanies. Its two main businesses are Printing and Beverages. The former encompasses
Information Communication, Lifestyle and Industrial Supplies, and Electronics.
The businesses and segments of DNP are broadly outlined below. The four business segments
cited below are the same as the reporting segment categories.
[PRINTING]
Information Communication
Production/sale of textbooks, books, weekly/monthly/quarterly magazines, promotional materials,
securities certificates, business forms, cards, settlement-related services, photographic materials,
and business equipment and systems; and planning/design/construction/management of stores andadvertising media
Major companies
Production

OGUCHI BOOK BINDING & PRINTING CO., LTD.
DNP Imagingcomm Co., Ltd., DNP SP Tech Co., Ltd.
DNP Graphica Co., Ltd., DNP Communication Design Co., Ltd.
DNP Book Factory Co., Ltd., DNP Data Techno Co., Ltd.
DNP Multi Print Co., Ltd., DNP Media Art Co., Ltd.
DNP Media Support Co., Ltd.

Production and sales

DNP Imagingcomm Asia Sdn. Bhd., DNP Imagingcomm Europe B.V.
DNP Imagingcomm America Corporation, Foto Fantasy, Inc.
Tien Wah Press (Pte.) Ltd.
*MK Smart Joint Stock Company

Sales and services

Maruzen CHI Holdings Co., Ltd., INTELLIGENT WAVE INC.
SHUFUNOTOMO Co., Ltd., 2Dfacto, Inc.
CYBER KNOWLEDGE ACADEMY Co., Ltd.
DNP ID System Co., Ltd., DNP Art Communications Co., Ltd.
DNP Social Links Co., Ltd., DNP Digital Solutions Co., Ltd.
DNP Photo Imaging Japan Co., Ltd., DNP HyperTech Co., Ltd.
Metro Systems Co., Ltd., mobilebook.jp, Inc.
MARUZEN-YUSHODO Co., Ltd., MARUZEN PUBLISHING CO., LTD.
MaruzenJunkudo Bookstores Co., Ltd.
Toshokan Ryutsu Center Co., Ltd., honto Book Services Co., Ltd.
DNP Photo Imaging Europe SAS* Nihon Unisys, Ltd., BOOKOFF CORPORATION LIMITEDBUNKYODO GROUP HOLDINGS CO., LTD.

8

All About, Inc., Kyoiku Shuppan Co., Ltd.
The shares of Maruzen CHI Holdings Co., Ltd., Nihon Unisys, Ltd. and
BOOKOFF CORPORATION LIMITED are traded on the Tokyo Stock
Exchange, and the shares of INTELLIGENT WAVE INC., BUNKYODOGROUP HOLDINGS CO., LTD. and All About, Inc. are traded on theTokyo Securities Exchange’s JASDAQ market.
Lifestyle and Industrial Supplies
Production/sale of containers and packaging products, packaging equipment and systems, interior
and exterior decorative printed materials, and industrial supplies
Major companies
Production

DNP Technopack Co., Ltd., Sagami Yoki Co., Ltd.
DNP Ellio Co., Ltd., DNP Advanced Materials Co., Ltd.
DNP Living Space Co., Ltd., DNP Hoso Co., Ltd.

Production and sales

DNP Tamura Plastic Co., Ltd., Aseptic Systems Co., Ltd.
DNP Fine Chemicals Utsunomiya Co., Ltd.
PT DNP Indonesia, DNP Vietnam Co., Ltd.

Sales and services

DNP Lifestyle Materials Marketing Co., Ltd.
DNP Field Eyes Co., Ltd., LIFESCAPE MARKETING CORPORATIONElectronics
Production/sale of precision electronic components and other products
Major companies
Production

DNP LSI Design Co., Ltd., DNP Fine Optronics Co., Ltd.
DNP Precision Devices Himeji Co., Ltd.

Production and sales

DNP Color Techno Kameyama Co., Ltd., DAP Technology Co., Ltd.
DT Fine Electronics Co., Ltd.
DNP Denmark A/S, DNP Photomask Europe S.p.A.
*Photronics DNP Mask Corporation

Sales

DNP Taiwan Co., Ltd.

Companies with multiple types of businesses
Production and sales

DNP Fine Chemicals Co., Ltd., DNP Engineering Co., Ltd.
DNP Shikoku Co., Ltd.
* DIC Graphics Corporation

Sales and services

DNP Logistics Co., Ltd., DNP Trading Co., Ltd.
DNP Accounting Services Co., Ltd.
DNP Information Systems Co., Ltd.
DNP Human Services Co., Ltd., DNP Facility Services Co., Ltd.
DNP Hokkaido Co., Ltd., DNP Tohoku Co., Ltd.
DNP Chubu Co., Ltd., DNP Nishi Nippon Co., Ltd.
DNP Asia Pacific Pte. Ltd., DNP Corporation USA

9

DNP America, LLC, DNP Holding USA Corporation[BEVERAGES]
Beverages
Centered on Hokkaido Coca-Cola Bottling Co., Ltd.; manufacture/sale of soft drinks and juices
The shares of Hokkaido Coca-Cola Bottling Co., Ltd. are traded on the Tokyo Stock Exchange andSapporo Securities Exchange.
* Equity-method affiliated companies

10Organizational chart
The businesses noted above are shown in the organizational chart below.

Customers
Information Communication

Lifestyle and Industrial Supplies(Production and sales)
DNP Imagingcomm Asia Sdn. Bhd.
DNP Imagingcomm Europe B.V.
DNP Imagingcomm America
Corporation
Foto Fantasy, Inc.
Tien Wah Press (Pte.) Ltd.
MK Smart Joint Stock Company*(Production and sales)
PT DNP Indonesia
DNP Vietnam Co., Ltd.

Electronics

Beverages(Sales)DNP Taiwan Co., Ltd.
(Production and sales)
DNP Denmark A/S
DNP Photomask Europe S.p.A.
Photronics DNP Mask Corporation*(Sales and service provision)
DNP Photo Imaging Europe SAS

Dai Nippon Printing Co., Ltd.

(Production)
OGUCHI BOOK BINDING &PRINTING CO., LTD.
DNP Imagingcomm Co., Ltd.
DNP SP Tech Co., Ltd.
DNP Graphica Co., Ltd.
DNP Communication Design Co.,Ltd.
DNP Book Factory Co., Ltd.
DNP Data Techno Co., Ltd.
DNP Multi Print Co., Ltd.
DNP Media Art Co., Ltd.
DNP Media Support Co., Ltd.

(Sales and service provision, etc.)
Maruzen CHI Holdings Co., Ltd.
INTELLIGENT WAVE INC.
SHUFUNOTOMO Co., Ltd.
2Dfacto, Inc.
CYBER KNOWLEDGE ACADEMY Co.,Ltd.
DNP ID System Co., Ltd.
DNP Art Communications Co., Ltd.
DNP Social Links Co., Ltd.
DNP Digital Solutions Co., Ltd.
DNP Photo Imaging Japan Co., Ltd.
DNP HyperTech Co., Ltd.
Metro Systems Co., Ltd.
mobilebook.jp, Inc.
MARUZEN-YUSHODO Co., Ltd.
MARUZEN PUBLISHING CO., LTD.
MaruzenJunkudo Bookstores Co., Ltd.
Toshokan Ryutsu Center Co., Ltd.
honto Book Services Co., Ltd.
Nihon Unisys, Ltd. *BOOKOFF CORPORATION LIMITED*BUNKYODO GROUP HOLDINGS CO.,LTD. *All About, Inc.*
Kyoiku Shuppan Co., Ltd.*(Production and sales)
DNP Fine Chemicals Co., Ltd.
(Sales and service provision, etc.)
DNP Logistics Co., Ltd.
DNP Human Services Co., Ltd.
DNP Hokkaido Co., Ltd.
DNP Asia Pacific Pte. Ltd.

DNP Shikoku Co., Ltd.

(Production)
DNP Technopack Co., Ltd.
Sagami Yoki Co., Ltd.
DNP Ellio Co., Ltd.
DNP Advanced Materials Co., Ltd.
DNP Living Space Co., Ltd.
DNP Hoso Co., Ltd.

(Production and sales)
DNP Tamura Plastic Co., Ltd.
Aseptic Systems Co., Ltd.
DNP Fine Chemicals Utsunomiya
Co., Ltd.

(Production and sales)
DNP Color Techno Kameyama Co.,Ltd.
DAP Technology Co., Ltd.
DT Fine Electronics Co., Ltd.

(Sales and service provision, etc.)
DNP Lifestyle Materials Marketing
Co., Ltd.
DNP Field Eyes Co., Ltd.
LIFESCAPE MARKETINGCORPORATIONDNP Engineering Co., Ltd.

DIC Graphics Corporation*

DNP Trading Co., Ltd.
DNP Facility Services Co., Ltd.
DNP Tohoku Co., Ltd.
DNP Corporation USA

DNP Accounting Services Co., Ltd.

DNP Information Systems Co., Ltd.

DNP Chubu Co., Ltd.
DNP America, LLC

DNP Nishi Nippon Co., Ltd.
DNP Holding USA Corp.

Printing businessNotes: *(Production)
DNP LSI Design Co., Ltd.
DNP Fine Optronics Co., Ltd.
DNP Precision Devices Himeji Co.,Ltd.

(Production and sales)
Hokkaido Coca-Cola Bottling Co., Ltd.

(Production and sales): Equity-method affiliated companies (Otherwise, subsidiaries): Flow of products, materials and services

11

Beverages
business3. Management policies(1) Core policies
The DNP Group’s basic management policy, the DNP Group Vision 2015, states its corporate
philosophy as: “The DNP Group connects individuals and society, and provides new value.” Basedon this philosophy, DNP is aggressively pursuing its business activities and working to steadily
expand its business over the medium to long term.
DNP believes it is important to enhance corporate governance to fulfill its corporate social
responsibility (CSR) as a company and deliver new value to its various stakeholders. It seeks toestablish and operate systems to facilitate precise managerial decision-making, prompt andappropriate execution of business based on these decisions, and supervision and auditing of thisbusiness execution. It also undertakes rigorous training and education to improve the complianceawareness of each and every employee.
DNP is also working to fulfill what it considers to be its three responsibilities as a company: “Value
Creation,” “Integrity in Conduct,” and “Transparency (Accountability).” To fulfill these responsibilities,
DNP adheres to its DNP Group Code of Conduct in pursuing its activities and ensures proper
business conduct by preparing internal control systems. It strives to conduct business in good faith
to earn the deep trust of its various stakeholders, including shareholders, client companies,
consumers, and employees.
(2) Medium- and long-term management strategy and key issues
1) Business vision and initiatives in growth areas
DNP focuses on creating new value to solve social issues through P&I innovations that combine its
strengths in printing and information in the four growth areas of “Knowledge and Communication,”“Food and Healthcare,” “Lifestyle and Mobility,” and “Environment and Energy.”
In Knowledge and Communication, DNP endeavors to support people’s lifestyles and foster
culture by assisting in the safe and reliable transmission of information in an information society.
Initiatives include the “honto” hybrid bookstore network which handles paper and electronic books,
development of educational information and communication technology (ICT) services, anddevelopment of multi-language communication tools to support the growing number of foreign
tourists visiting Japan.
In Food and Healthcare, DNP endeavors to support safer and higher-quality living in a super-aging
society by developing products and services to help consumers maintain their health throughout
their lives. In addition to safe and hygienic packaging for foods, beverages, and pharmaceuticals insupport of human health and diet, DNP is providing high-performance products and services in suchareas as life sciences, including regenerative medicine, and agriculture.
In Lifestyle and Mobility, DNP seeks to provide products and services to achieve high levels ofcomfort and functionality in a variety of settings, including homes, offices, medical facilities,
automobiles, and railway cars. In addition to smart sensing equipment essential for comfortableliving spaces, DNP is working with DNP Tamura Plastic Co., Ltd., which has excellent plastic
molding technologies, to supply interior and exterior parts for automobiles.
In Environment and Energy, DNP will work to achieve a sustainable society that combines
economic growth and environmental preservation. With the goal of saving resources and energy, itseeks to provide environmentally conscious products and services to reduce, reuse, and recycle;
high-performance products to control heat, light, and water; and energy management solutions.
DNP will work to expand its business while solving social issues by capitalizing on its strengths tocreate new value, mainly in these growth areas.

122) Initiatives in the different businesses and segments[PRINTING]
Information Communication
The Information Communication segment helps consumers and companies communicate in avariety of ways by enabling the optimal expression of information and expanding into a diverse rangeof media based on advanced printing technologies and information security technologies.
For example, we are deepening cooperation with publishers and pursuing a variety of businessactivities related to publishing, including the planning, production, distribution, and sale of various
publications, copyright handling in the secondary use of content, and overseas expansion of content.
We are using advanced information security infrastructure, including the DNP Kashiwa Data
Center and five domestic business process outsourcing (BPO) centers, to deliver a variety ofhigh-value-added services, including settlement-linked marketing services such as international
brand prepaid and debit card services, and corporate BPO services.
We also seek to respond to growing consumer needs in such areas as photo printing and photo
albums and to deliver new photo-related services that use networks to increase value-added.
Lifestyle and Industrial Supplies
The Lifestyle and Industrial Supplies segment provides products and services in Japan andoverseas that respond precisely to the diverse needs of companies and consumers, while also
working to protect the global environment and support universal design.
In the Packaging business, we are working to expand market share for high-performance products,
including the innovative barrier (IB) film series of transparent films with excellent barrier properties tokeep out oxygen and moisture and the biomass plastic packaging series that uses raw materials
derived from plants. In overseas business, DNP has been manufacturing and selling packaging inIndonesia since 1972, and has the top market share in a wide range of areas including daily goods
and foods. We use the Vietnam plant that opened in May 2013 and other facilities to deliver
high-value-added products and services to Japanese companies expanding overseas and to global
companies.
Additionally, we will pursue various initiatives in a range of living spaces, including automobiles
and railway cars in addition to homes and commercial facilities. These initiatives include
high-value-added products that use DNP’s proprietary Electron Beam (EB) coating technology; thedesign of more pleasant living spaces using Kansei (sensitivity) engineering; the assessment ofliving environments; and the development of simpler construction methods. In Europe, the US, andemerging markets, we seek to leverage a global sales network to expand market share forexquisitely designed metal paneling and other products.
DNP is implementing a repair program as a result of defects in some products in the Living Spacebusiness. Given that these defects arose as a result of the usage environment, changes over time,and other factors, we have examined product usage, condition, and other factors on a case-by-casebasis, and are now making necessary repairs. To better address this issue, we improved the system
for assessing the scope of repairs and quickly performing repairs in July 2016.
Electronics
In the Electronics segment, we endeavor to advance and combine our current technologies whiledeveloping new core technologies, and to provide products, services, and systems that anticipate
the changing needs of companies and consumers. We will assess changes in the market
environment in Japan and overseas, and reform our cost structure through such means as
optimizing production facilities and reviewing our production and development structures.
For example, we will draw on DNP’s strength in processing and materials technologies to develop

13

new display products for 4K and 8K TVs, automotive displays, and high-definition smartphones
while responding to a variety of needs in terms of higher resolution, wider color gamut, larger size,
lighter weight, thinner profile, energy saving, and higher performance. For optical films, we will focus
on the development of new products that leverage converting technologies for processing materials
in a clean production environment. For OLED display products, we will respond to growing demand
by increasing production capacity for metal masks that use DNP’s advanced photolithography andetching technologies.
For semiconductor photomasks, we aim to support the miniaturization and cost-saving needs ofsemiconductor makers by introducing a multi e-beam mask writer that significantly shortens writingtime and by bolstering the production structure for next-generation products. We also seek toaccelerate the commercialization of next-generation microfabrication technologies such as
nanoimprinting.
[BEVERAGES]
Beverages
Amid expectations for stiffer market share competition in the soft drink industry, we are executing thethree strategies of increasing market share, overwhelming the competition, and cutting groupwide
costs based on the following vision: “Leveraging the global brand strength of our Coca-Colabusiness, we intend to beat our competition based on our local capabilities as a true Hokkaido
company, contribute to local Hokkaido communities by consistently delivering new value andservices, and establish a business foundation capable of sustained growth.”	 3) Strengthened organization
DNP cites taiwa (dialogue) and cooperation as guiding principles, and is working to deliver newvalue by enhancing groupwide efforts to strengthen cooperation further among business units andby deepening dialogue with companies and consumers. We will work to expand our business bystrengthening cooperation with both domestic and overseas companies possessing various
strengths.
We are also pursuing redevelopment in our home base in the Ichigaya district of Tokyo whileworking to establish domestic and overseas bases to advance our business vision. The planning,
sales, and marketing offices of various business units were once scattered across the Tokyo
Metropolitan Area, but are now concentrated together with the DNP Group’s headquarters functionsin the Ichigaya district. Making effective use of this concentration, we intend to push forward with thedevelopment of new business.
DNP established DNP Digital Solutions Co., Ltd. in April 2017 with the aim of enhancing its
competitiveness in the ICT business field. Based on a new structure combined with DNPCommunication Design Co., Ltd., established in October 2016, we intend to integrate marketing andsettlement services, increase synergies in relation to ICT and BPO, and promote a digital marketingbusiness.
4) Development of systems for business continuity
DNP reaffirmed the importance of business continuity planning (BCP) based on its experience in the
Tohoku-Pacific Ocean Earthquake, and works daily to maintain proper awareness of disaster risk
and take appropriate safeguards based on two objectives: (1) place top priority on human safetymeasures at the time of disaster; (2) increase the company’s preparedness for disaster and ability torecover from disaster. We established basic policies and promotion systems to prepare for disasters
and other unforeseen circumstances in our “DNP Group Basic Code for Disaster Response,” andimplement disaster-prevention measures to ensure the safety of our employees and related parties

14

and reassure our various stakeholders.
5) Contributing to the realization of a sustainable society
Concerning environmental issues, climate change is deepening and risks are emerging in relation toenergy, water, and other areas. DNP views its overall supply chain from a global perspective and ispursuing initiatives to achieve a sustainable society that coexists with nature.
DNP has established greenhouse gas emission reduction targets for the fiscal year ending inMarch 2031 in order to step up our efforts to prevent global warming. We also calculate greenhousegas emissions (Scope3) for our entire supply chain in Japan and overseas, and are working to
reduce greenhouse gas emissions in Japan and overseas.
In relation to raw materials, we have prepared procurement guidelines for paper, which depends
heavily on and greatly impacts the ecosystem and is closely related to climate change and forest
resources, and we cooperate with suppliers to procure paper according to these guidelines.
We also focus on the development of products and services that contribute to achieving asustainable society, including lighting film, non-electric dimming blind glass, and energy-saving
diagnostic system to visualize energy consumption.
Going forward, we seek to accelerate the development of products and services related toresource-saving, energy-saving, and biodiversity protection, and contribute to solving social issues.
4. Basic approach in the choosing of accounting standards
DNP Group uses Japanese GAAP in preparing consolidated financial statements. It plans to
consider IFRS going forward and respond appropriately based on domestic and overseas
circumstances.

155. Consolidated financial statements and key notes(1) Consolidated balance sheets(Million yen)
Year ended March 31, 2016
(As of March 31, 2016)

Year ended March 31, 2017
(As of March 31, 2017)

171,694
348,585
101,239
29,68625,021
10,744
36,103(1,349)721,724

210,454341,805
84,28629,13023,89615,31433,879(1,627)
737,140

584,013(366,497)
217,516
771,660(682,111)
89,549155,532
14,946
141,311(105,700)
35,611
513,156

567,661(361,465)
206,196
760,117(679,427)
80,689155,114
18,326
137,843(101,003)
36,839497,166

8,765
24,9112,125
35,802

6,474
25,942
2,019
34,436362,654
6,792
45,843
6,731
32,354(6,424)447,952
996,911
1,718,636

380,323
4,390
57,0897,286
28,127(4,057)473,160
1,004,763
1,741,904

ASSETS
Current assets
Cash and time deposits
Notes and trade receivables
Merchandise and finished products
Work in progress
Raw materials and supplies
Deferred income taxes
Other
Allowance for doubtful accounts
Total current assets
Fixed assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Machinery and equipment
Accumulated depreciation
Machinery and equipment, net
LandConstruction in progress
Other
Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible fixed assets
Goodwill
Software
Other
Total intangible fixed assets
Investments and other assets
Investment securities
Long-term loans
Net defined benefit asset
Deferred income taxes
Other
Allowance for doubtful accounts
Total investments and other assets
Total fixed assets
TOTAL ASSETS

16

(Million yen)
Year ended March 31, 2016
(As of March 31, 2016)

Year ended March 31, 2017
(As of March 31, 2017)

255,585
55,3167,764
6,014
17,333–
81,299423,313247,562
43,035
7,560
7,152
17,056
18,67974,151
415,198

107,560
18,19048,884
34,167
23,278232,080
655,394

109,640
8,658
66,14735,14925,823
245,418
660,617

114,464
144,283
717,029(81,024)
894,752

114,464
144,280
695,720(69,636)884,829

123,478

149,574(6)
3,050(3,849)(2)(2,219)
1,683

122,672

149,03516
45,8001,063,241
1,718,636–
47,422
1,081,286
1,741,904

LIABILITIESCurrent liabilities
Notes and trade payables
Short-term bank loans
Current portion of long-term debt
Income taxes payable
Reserve for bonuses
Repair reserve
Other
Total current liabilities
Long-term liabilities
Bonds
Long-term debt
Deferred tax liabilities
Net defined benefit liability
Other
Total long-term liabilities
TOTAL LIABILITIESNET ASSETSStockholders’ equity
Common stock
Capital surplus
Retained earnings
Treasury stock
Total stockholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Net deferred losses on hedges
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive
incomeStock acquisition rights
Non-controlling interests
TOTAL NET ASSETSTOTAL LIABILITIES AND NET ASSETS

17

(2) Consolidated statements of income and comprehensive income
Consolidated statements of income(Million yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest and dividends income
Equity in earnings of affiliates
Other
Total non-operating income
Non-operating expenses
Interest expense
Contributions
Other
Total non-operating expenses
Ordinary income
Extraordinary gains
Gain on sale of fixed assets
Gain on sale of investment securities
Other
Total extraordinary gains
Extraordinary losses
Loss on sale or disposal of fixed assets
Production restructuring costs
Repair costs and repair reserve provisions
Other
Total extraordinary losses
Income before income taxes andnon-controlling interests
Current income taxes
Deferred income taxes
Total income taxes
Net income
Net income attributable to non-controllingshareholders
Net income attributable to parent company
shareholders

18

Year ended
March 31, 2016
1,455,916
1,173,203
282,712237,240
45,471

Year ended
March 31, 2017
1,410,172
1,143,164
267,008
235,598
31,410

5,226
3,696
5,828
14,751

5,104
3,014
5,559
13,678

2,439
1,222
3,909
7,571
52,651

2,201
1,239
4,907
8,349
36,740224
15,135
1,131
16,491974
44,915
3,741
49,631

1,833
2,264
7,672
2,531
14,301

5,880–
37,7382,922
46,541

54,84039,831

13,348
6,788
20,136
34,704

13,541(974)
12,56727,263

1,116

2,037

33,58725,226

Consolidated statements of comprehensive income(Million yen)

Net income
Other comprehensive income
Valuation difference on available-for-salesecurities
Net deferred gains (losses) on hedges
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Share of other comprehensive income ofassociates accounted for using equity method
Total other comprehensive income
Comprehensive income
Attributable to：Parent company shareholders
Non-controlling shareholders

19Year ended
March 31, 2016
34,704

Year ended
March 31, 201727,263(24,502)

26,07222(5,235)(26,118)(1)(3,873)
6,891

1,325

(3,018)(54,509)(19,805)

26,07053,334(20,351)545

51,596
1,738

(3) Consolidated statements of changes in net assets
The year ended March 31, 2016 (April 1, 2015 – March 31, 2016)(Million yen)
Stockholders’ equity

Balance at the beginning ofcurrent period
Changes of items during theperiodTotalstockholders’equityCommonstock

CapitalsurplusRetainedearnings

Treasurystock

114,464

144,898

737,241(94,386)

Cash dividends paid
Net income attributable toparent company
shareholders
Change in ownershipinterest of parent arisingfrom transactions with
non-controllingshareholders
Purchases of treasury
stock(20,376)(20,376)

33,58733,587(615)

Disposal of treasury stock
Cancellation of treasury
stock

(615)

(20,066)(20,066)

(0)

1

1

(33,422)

33,422–

3

Other
Net changes in items otherthan stockholders’ equity
Total changes of items
during the period
Balance at the end of current
period902,217

3
–

–

(615)

(20,211)

13,361(7,465)

114,464

144,283

717,029(81,024)

894,752

Accumulated other comprehensive income

Balance at the beginning ofcurrent period

Valuationdifference on
available-forsale securities

Net deferredgains (losses)on hedges

Foreigncurrencytranslation
adjustments

Remeasurements ofdefined benefit
plans

Total
accumulated
othercomprehensive
incomeStockacquisitionrights

Noncontrollinginterests

Total net
assets147,914

(0)

7,247

21,449176,61016

45,248

1,124,093

Changes of items during theperiod(20,376)

Cash dividends paid
Net income attributable toparent company
shareholders

33,587

Change in ownershipinterest of parent arisingfrom transactions with
non-controllingshareholders(615)

Purchases of treasury
stock(20,066)

Disposal of treasury stock

1

Cancellation of treasury
stock

–

Other

3

Net changes in items otherthan stockholders’ equity
Total changes of items
during the period
Balance at the end of current
period(24,435)(6)(4,196)(25,299)(53,938)–552(53,386)(24,435)(6)(4,196)(25,299)(53,938)–552(60,851)

123,478

(6)

3,050

(3,849)122,672

16

45,8001,063,241

20

The year ended March 31, 2017 (April 1, 2016 – March 31, 2017)(Million yen)
Stockholders’ equity

Balance at the beginning ofcurrent period

Commonstock

CapitalsurplusRetainedearnings

Treasurystock

114,464

144,283

717,029(81,024)

Cumulative impact ofaccounting changes
Balance at the beginning ofcurrent period reflecting
accounting changes
Changes of items during theperiod26
114,464

144,283

Cash dividends paid
Net income attributable toparent company
shareholders
Change of scope of
consolidation
Change in ownershipinterest of parent arisingfrom transactions with
non-controllingshareholders
Purchases of treasurystock

717,056(81,024)

894,779(19,919)(19,919)

25,22625,226

(78)

(78)

(2)

(26,564)

Other
Net changes in items otherthan stockholders’ equity
Total changes of items
during the period
Balance at the end of current
period894,752
26(2)

Cancellation of treasury
stock

Total
stockholders’equity(15,174)(15,174)

26,564

–

(1)

(1)
–

–

(2)

(21,336)

11,388(9,950)114,464

144,280

695,720(69,636)884,829

Accumulated other comprehensive income

Balance at the beginning ofcurrent period
Cumulative impact ofaccounting changes
Balance at the beginning ofcurrent period reflecting
accounting changes

Valuationdifference on
available-forsale securities

Net deferredgains (losses)on hedges

Foreigncurrencytranslation
adjustments

Remeasurements ofdefined benefit
plans

Total
accumulated
othercomprehensive
incomeStockacquisitionrights

Noncontrollinginterests

Total net
assets123,478

(6)

3,050

(3,849)122,672

16

45,8001,063,24102745,801

1,063,269

123,478

(6)

3,050

(3,849)122,672

16

Changes of items during theperiod(19,919)

Cash dividends paid
Net income attributable toparent company
shareholders

25,226

Change of scope of
consolidation(78)

Change in ownershipinterest of parent arisingfrom transactions with
non-controllingshareholders(2)

Purchases of treasury
stock
Cancellation of treasury
stock(15,174)
–
(1)

Other
Net changes in items otherthan stockholders’ equity

26,096

4(5,270)5,532

26,362

(16)

1,621

27,967

Total changes of items
during the period

26,096

4(5,270)5,532

26,362

(16)

1,621

18,017

Balance at the end of current
period149,574(2)(2,219)1,683

149,035–

47,422

1,081,286

21

(4) Consolidated statements of cash flows(Million yen)

Year ended
March 31, 2016
Cash flows from operating activities
Income before income taxes and non-controllinginterests
Depreciation
Impairment loss
Decrease of doubtful receivables, net
Increase of net defined benefit asset
Increase (Decrease) of net defined benefit liability
Equity in gains of affiliates
Amortization of consolidation goodwill, net
Interest and dividend income
Interest expense
Net gain on sales of investment securities
Net loss on devaluation of investment securities
Net losses on sale or disposal of fixed assets
Repair costs
Repair reserve provisions
Decrease in trade receivables
Decrease (Increase ) in inventories
Decrease in trade payables
Other
Sub-total
Payments for repair costs
Payments for extra retirement payments
Payment of income taxes
Net cash provided by operating activities
Cash flows from investing activities
Net decrease in time deposits
Payments for purchases of property, plant andequipment
Proceeds from sales of property, plant and equipment
Payments for purchases of investment securities
Proceeds from sales of investment securities
Payments for purchase of intangible fixed assets
Payments for purchase of stock in subsidiaries resulting
in change in scope of consolidation
Proceeds from sales of stock in subsidiaries resulting inchange in scope of consolidation
Interest and dividends received
Other
Net cash provided by (used in) investing activities

22

Year ended
March 31, 2017

54,84039,831

65,310109(1,393)(15,311)(8)(3,696)
2,200(5,226)2,439(15,111)
923
1,665
7,672
–
17,880(10,531)(4,725)(3,912)
93,125(3,582)(990)(15,923)
72,62961,461895(1,560)(1,537)1,241(3,014)
2,316(5,104)2,201(46,205)
161
4,970
5,793
31,944
4,443
3,257
(99)
6,909
107,908(23,148)(104)(12,710)71,94438

240(64,415)(50,031)

2,791(5,664)
19,949(8,701)

4,990
(691)
60,878(11,212)(8,981)

–

–

1,288

6,178
(2,079)(60,883)

7,952
596
14,011

(Million yen)

Year ended
March 31, 2016
Cash flows from financing activities
Net increase (decrease) in short-term bank loans
Proceeds from long-term debt
Repayments of long-term debt
Proceeds from issuance of bonds
Payments for redemption of bonds
Payments for purchases of treasury stock
Payments for purchases of treasury stock of subsidiaries
Interest paid
Dividends paid
Dividends paid to non-controlling interests
Payments for purchase of stock in subsidiaries not
resulting in change in scope of consolidation
Other
Net cash used in financing activities
Effect of exchange rate changes on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Increase in cash and cash equivalents resulting fromchange of scope of consolidation
Cash and cash equivalents at end of year

23

Year ended
March 31, 2017

2,131
5,803
(10,552)
4,718(1,050)(20,066)(1)(2,436)(20,381)(452)(6,961)
6,680(6,983)
3,933(555)(15,174)(7)(2,208)(19,918)
(338)

(151)

–

(4,725)(47,166)(3,688)(45,222)(1,829)(1,701)(37,249)
212,762

39,032
175,513–18

175,513214,564(5) Notes regarding consolidated financial statements[Notes on premise of a going concern]
None[Basis of presenting consolidated financial statements]
1) Scope of consolidation and application of the equity method of accounting
Number of consolidated subsidiaries: 106
Major companies:
Maruzen CHI Holdings Co., Ltd.
Hokkaido Coca-Cola Bottling Co., Ltd., INTELLIGENT WAVE INC.
2Dfacto, Inc., DNP Technopack Co., Ltd.
DNP Fine Chemicals Co., Ltd., DNP Logistics Co., Ltd.
Number of equity-method affiliated companies: 16
Major companies:
Nihon Unisys, Ltd., BOOKOFF CORPORATION LIMITEDBUNKYODO GROUP HOLDINGS CO., LTD., All About, Inc.
Kyoiku Shuppan Co., Ltd., DIC Graphics Corporation
Photronics DNP Mask Corporation
MK Smart Joint Stock Company
2) Changes in scope of consolidation and application of the equity method of accounting(Scope of consolidation)
Newly included:
3 DNP Digital Solutions Co., Ltd. and two other companies
Excluded:
11 BUNKYODO GROUP HOLDINGS CO., LTD. and ten othercompanies(Application of equity method)
Newly included:2
Excluded:

1

BUNKYODO GROUP HOLDINGS CO., LTD. and one othercompany
KYOCERA Maruzen System Integration Co., Ltd.

3) Matters concerning the fiscal years of consolidated subsidiaries
Of the consolidated subsidiaries, Hokkaido Coca-Cola Bottling Co., Ltd. and 25 others have fiscal
years that end on December 31, while Maruzen CHI Holdings Co., Ltd. and 24 others have fiscal
years that end on January 31. Their financial statements as of the same dates are used in the
preparation of these consolidated financial statements.
Additionally, INTELLIGENT WAVE INC.’s fiscal year ends on June 30, mobilebook.jp, Inc. andone other company have fiscal years that end on September 30, and DNP Tamura Plastic Co., Ltd.’s
fiscal year ends on October 31. Consequently, financial statements based on provisional accountsettlements are used.
Any material transactions during the time between the foregoing settlement dates and provisional
settlement dates and the consolidated settlement date are adjusted for on a consolidated basis.
4) Summary of significant accounting policies(a) Criteria and methods for valuing significant assets• Marketable securities
Other securitiesThose with market
prices available

Fair market value based on market prices as of the balance
sheet date
(The related valuation differences are directly included in net
assets and cost of sales is computed mainly by the24Those without market
prices available

moving-average method.)
Mainly cost based on the moving-average method• Derivatives

Mainly fair market value• Inventories

For figures shown on the balance sheet, the book value
write-down method based on the decrease in profitability isused.
Mainly cost based on the specific identification method

Merchandise
Finished products, work inprogress

Mainly cost based on the retail inventory cost method

Raw materials

Mainly cost based on the moving-average method

Supplies

Mainly cost based on the most recent purchase method(b) Depreciation and amortization of significant assets• Property, plant and equipment The Company and its domestic consolidated subsidiaries use
the declining balance method.
(except for lease assets)
However, depreciation of buildings (excluding building
fixtures) acquired after April 1, 1998 and of building fixturesand structures acquired after April 1, 2016 are computed by
the straight-line method.
Assets with an acquisition cost of at least ¥100,000 and lessthan ¥200,000 are depreciated mainly over three years by
the straight-line method.
Foreign consolidated subsidiaries mainly use the straight-line
method.
• Intangible fixed assets(except for lease assets)

Mainly the straight-line method
Software used internally is amortized using the straight-line
method over the Company’s estimate of the useful life of theassets (five years).

• Lease assets

Lease assets with transfer of ownership
These lease assets are depreciated using the samedepreciation method used for owned fixed assets.
Lease assets with no transfer of ownership
These lease assets are depreciated over the lease periodusing the straight-line method with no residual value.

(c) Basis for recording significant allowances
To cover possible losses on doubtful accounts, including• Allowance for doubtful
trade receivables and loans, the allowance for doubtful
accounts
accounts is based on historical default rates for normal
accounts and on estimates of the amounts that may not berecoverable for specific overdue accounts.
To cover payments of employee bonuses in the following• Reserve for bonuses
fiscal year, the reserve for bonus is based on the estimatedamount that is attributable to the current fiscal year.
The repair reserve is based on a rational estimate of the• Repair reserveamount of repair costs that will be required in the future to
repair defects for some products.

25

(d) Accounting treatment of retirement benefits
Net defined benefit liability is recorded to prepare for employee retirement benefits at an
amount derived by subtracting pension plan assets from retirement benefit obligations basedon the amount expected at the end of the current fiscal year. In calculating retirement benefit
obligations, a benefit formula is used to allocate expected retirement benefit payments in the
period until the end of the current fiscal year.
Prior service costs are amortized using the straight-line method over a certain number ofyears that is equal to or less than the average future service period of eligible employees at thetime the costs are incurred (generally six years).
Actuarial gains/losses are amortized starting in the next fiscal year after they are incurred
using the declining balance method over a certain number of years that is equal to or less than
the average future service period of eligible employees at the time the actuarial gains/losses
are incurred (generally nine years).
Unrecognized actuarial gains/losses and unrecognized prior service costs are adjusted fortax effects and recorded in remeasurements of defined benefit plans in accumulated othercomprehensive income under net assets.
(e) Accounting treatment of consumption taxes
National and local consumption taxes are excluded from transaction amounts.
(f) Amortization of goodwill
Goodwill is amortized using the straight-line method for an effective period not more than 20
years. In the current fiscal year, straight-line amortization over five years is generally used.
(g) Scope of funds in the consolidated statements of cash flows
Cash and cash equivalents comprise cash on hand, immediately withdrawable funds, andshort-term investments that can be easily converted to cash, have insignificant risk of changes
in value, and have maturities within three months of the purchase date.
[Changes in accounting policies](Application of Revised Implementation Guidance on Recoverability of Deferred Tax Assets)
DNP has applied the “Revised Implementation Guidance on Recoverability of Deferred Tax Assets”(ASBJ Guidance No. 26, March 28, 2016), and has revised some accounting methods related to therecoverability of deferred tax assets, starting in the current fiscal year.
DNP has applied the “Revised Implementation Guidance on Recoverability of Deferred Tax
Assets” in line with transitional measures stipulated in Paragraph 49 (4) of said guidance. Any
differences between the amounts of deferred tax assets and deferred tax liabilities when applying
the provisions in Paragraph 49 (3), Items 1–3, of said guidance at the start of the current fiscal year,
and the amounts of deferred tax assets and deferred tax liabilities at the end of the previous fiscal
year, have been added to retained earnings at the start of the current fiscal year.
These changes have an immaterial impact on the consolidated financial statements at the start ofthe current fiscal year.
(Application of Practical Solution on a Change in Depreciation Method Due to Tax Reform
2016)
DNP and some domestic consolidated subsidiaries, in line with amendment of the Corporation Tax
Act, have applied the “Practical Solution on a Change in Depreciation Method Due to Tax Reform
2016” (ASBJ Practical Issue Task Force (PITF) No. 32, June 17, 2016), and have changed the26depreciation method for buildings and accompanying facilities as well as for structures acquired on
or after April 1, 2016 from declining balance depreciation to straight-line depreciation, starting in thecurrent fiscal year.
These changes have an immaterial impact on the consolidated financial statements for the current
fiscal year.
[Changes in accounting policies that are difficult to distinguish from changes in accounting
estimates](Changes in depreciation method and service life)
DNP consolidated subsidiary Hokkaido Coca-Cola Bottling Co., Ltd. (hereinafter, HCCB) and theconsolidated subsidiaries of HCCB (hereinafter, HCCB Group) previously depreciated tangible fixed
assets mainly using declining balance depreciation, but have changed to straight-line depreciation
starting in the current fiscal year.
This change is based on a review of the current production structure and use of fixed assets, andthe medium- to long-term capital investment strategy, in order to respond to changes in the market
environment, including stiffer competition from the full-scale entrance of rival companies anddiversifying consumer needs.
The HCCB Group’s tangible fixed assets are expected to produce average and stable investment
effects over their service life based on long-term use and stable production.
Accordingly, the HCCB Group has changed its depreciation method for tangible fixed assets fromdeclining balance depreciation to straight-line depreciation starting in the current fiscal year, basedon a judgement that equal cost allocation over the usable period can better reflect the usage
conditions of its tangible fixed assets, and from a revenue and expense standpoint, can better reflect
its business performance.
Additionally, HCCB had mainly applied a service life of 5–6 years to vending machines, but
because it is expanding the introduction of vending machines with greater durability, concurrent withthe change in depreciation method, it has changed to a nine-year service life to better reflect actual
conditions, starting in the current fiscal year.
Compared with the previous methods, the above changes increased operating income in thecurrent fiscal year by ¥1,382 million, and ordinary income and income before income taxes andnon-controlling interests by ¥1,401 million.
[Consolidated balance sheets]

1. Guarantee obligation
2. Discounts on notes receivables

Year ended
March 31, 2016
¥6 million¥628 million

Year ended
March 31, 2017
¥2 million¥625 million

Year ended
March 31, 2016
¥31,826 million

Year ended
March 31, 2017¥31,375 million[Consolidated statements of income]

1. Research and development expenses(Selling, general and administrative expenses)

27

[Consolidated statements of changes in net assets]
The year ended March 31, 2016 (April 1, 2015 – March 31, 2016)
1. Types and number of shares outstanding and treasury stock(Shares)

Outstanding shares

Stock type

Number ofshares at the
beginning of
the year
ended March
2016

Increase in
number ofshares during
the year
ended March
2016

Common stock

700,480,693

Decrease in
number ofshares during
the year
ended March
2016–

Number ofshares at theend of theyear ended
March 2016

20,000,000

680,480,693

Treasury stock
Common stock
56,647,614
15,275,962
20,003,999
51,919,577
Notes:
1. The total number of outstanding shares of common stock decreased by 20,000,000 shares dueto the cancellation of treasury shares by resolution of the Board of Directors.
2. The number of treasury shares of common stock increased by 15,275,962 shares due to theacquisition of 15,221,000 treasury shares by resolution of the Board of Directors and therepurchase of 54,962 odd-lot shares.
3. The number of treasury shares of common stock decreased by 20,003,999 shares due to thecancellation of 20,000,000 treasury shares by resolution of the Board of Directors, the sale of
1,200 odd-lot shares, and 2,799 shares from changes in equity ownership ratios in equity-method
affiliates.

2. Stock acquisition rights and treasury stock acquisition rights
Number of shares (Shares)
Company name

Consolidated
subsidiary

Breakdown

Balance atthe end of
the year
ended
March 2016
(Million yen)

Stock
type

Beginning of
the year
ended March
2016

Increase

Decrease

End of theyear ended
March 2016

–

–

–

–

–

16

–

–

–

–

16

Dividend pershare (Yen)Dividend
record date

Effective dateStockacquisitionrights as stock
optionTotal

3. Detailed information regarding dividends(1) Dividends paid
Total dividends

Resolution

Stock type

General meeting ofshareholders on
June 26, 2015

Common stock

10,31016

March 31,2015

June 29,2015

Board of Directors’
meeting on
November 10, 2015

Common stock

10,06616

September 30,
2015

December 10,
2015(Million yen)

(2) Of dividends for which the record date belongs to the current fiscal year, those thatcome into effect in the following fiscal year
Resolution

Stock type

Total
dividends(Million yen)

General meeting ofshareholders on
June 29, 2016

Commonstock

10,065

Source ofdividends
Retainedearnings

28

Dividend
per share
(Yen)

16

Dividend
record date

Effective
date

March 31,2016

June 30,
2016

The year ended March 31, 2017 (April 1, 2016 – March 31, 2017)
1. Types and number of shares outstanding and treasury stock(Shares)

Stock type

Number ofshares at the
beginning of
the year
ended March2017

Outstanding shares

Common stock

680,480,693–

17,000,000

663,480,693

Treasury stock

Common stock

51,919,577

13,367,533

17,000,000

48,287,110

Notes:

1.
2.

3.

Increase in
number ofshares during
the year
ended March2017

Decrease in
number ofshares during
the year
ended March2017

Number ofshares at theend of theyear ended
March 2017

The total number of outstanding shares of common stock decreased by 17,000,000 shares dueto the cancellation of treasury shares by resolution of the Board of Directors.
The number of treasury shares of common stock increased by 13,367,533 shares due to theacquisition of 13,222,000 treasury shares by resolution of the Board of Directors, the repurchaseof 112,066 shares held by untraceable shareholders, the repurchase of 32,154 odd-lot shares,
and 1,313 shares from changes in equity ownership ratios in equity-method affiliates.
The number of treasury shares of common stock decreased by 17,000,000 shares due to thecancellation of treasury shares by resolution of the Board of Directors.

2. Detailed information regarding dividends(1) Dividends paid
Resolution
General meeting ofshareholders on
June 29, 2016
Board of Directors’
meeting on
November 10, 2016

Stock type

Total dividends(Million yen)

Dividend pershare (Yen)Dividend
record date

Effective dateCommon stock

10,06516

March 31,2016

June 30,
2016

Common stock

9,853

16

September 30,
2016

December 9,
2016(2) Of dividends for which the record date belongs to the current fiscal year, those thatcome into effect in the following fiscal year
Resolution

Stock type

Total
dividends(Million yen)

General meeting ofshareholders on
June 29, 2017

Common
stock

9,851

Source ofdividends
Retainedearnings

Dividend
per share
(Yen)

16

Dividend
record date

Effective
date

March 31,2017

June 30,
2017[Segment information, etc.](Segment information)
1. Overview of the reporting segments(1) Method of determining reporting segments
DNP’s reporting segments are regularly reviewed by the Board of Directors using thesegregated financial information available within each segment to determine the allocation ofbusiness resources and evaluate business results.
DNP bases its business divisions on the products and services provided and develops its
business activities based on a comprehensive domestic and overseas strategy for eachbusiness division. The four reporting segments are Information Communication, Lifestyle andIndustrial Supplies, Electronics, and Beverages.
(2) Products and services in each reporting segment
Information Communication is involved in the production and sale of publications, commercial
printed materials, business forms, and photographic materials and educational and29

publications distribution. Lifestyle and Industrial Supplies is involved in the production and saleof packaging materials, interior and exterior decorative printed materials, and industrial
supplies. Electronics is involved in the production and sale of precision electronic components
and other products. Beverages is involved in the production and sale of carbonated andnon-carbonated beverages.
2. Method of calculating sales, income/loss, assets, and other items by reporting
segment
The accounting method used for reporting business segments is generally the same as statedin “Basis of presenting consolidated financial statements.”
Reporting segment income figures are based on operating income. Inter-segment sales andtransfers are based on third-party transaction prices.
(Changes in depreciation method and service life)
DNP consolidated subsidiary Hokkaido Coca-Cola Bottling Co., Ltd. and its consolidated
subsidiaries have changed their tangible fixed asset depreciation method and service life startingin the current fiscal year, as noted in the section, “Changes in accounting policies that are difficult
to distinguish from changes in accounting estimates.”Compared with the previous methods, these changes increase Beverages segment income in thecurrent fiscal year by ¥1,382 million.

30

3. Information on sales, income/loss, assets, and other items by reporting segment
The year ended March 31, 2016 (April 1, 2015 – March 31, 2016)
Reporting segment
Information
Communication

Lifestyle andIndustrial
Supplies

Electronics

Outside customers
Inter-segment

816,875
4,746

381,647
999

199,33020

58,06232

1,455,916
5,798

Beverages

Total(Million yen)Amounts
reported on
Adjustment
consolidated
Note 1
financialNote 2statements

Net sales–(5,798)1,455,916–
1,455,916

Total

821,622382,647

199,350

58,094

1,461,714(5,798)Segment income

29,363

12,597

20,508991

63,460(17,988)

45,471

Segment assets

892,968

441,761

273,40245,7991,653,933

64,703

1,718,636

27,51517,02515,007

3,940

63,4891,820

65,310

1,593

606

–

1

2,200

–

2,200

102

–

–

7

109

–

109

52,537

23,277

13,276

5,780

94,871

2,392

97,264

Other items
Depreciation andamortization
Amortization of
goodwill
Impairment loss
Increase in property,
plant and equipment
and in intangible fixed
assets
Notes:

1.

2.

Figures are adjusted as follows.
(1) Segment income is adjusted for costs related to basic research not assignable to a reporting
segment or costs of research shared by different segments.
(2) Segment assets are adjusted for companywide assets not allocated to reporting segments.
(3) Increases in property, plant and equipment and in intangible fixed assets are adjusted forcapital expenditures for the head office building and other items.
Segment income is adjusted to reflect operating income as reported in the consolidated financial
statements.

The year ended March 31, 2017 (April 1, 2016 – March 31, 2017)
Reporting segment
Information
Communication

Lifestyle andIndustrial
Supplies

Electronics

Outside customers
Inter-segment

797,046
4,156

387,142
1,051

169,4026

56,58138

1,410,172
5,253

Beverages

Total(Million yen)Amounts
reported on
Adjustment
consolidated
Note 1
financialNote 2statements

Net sales–(5,253)

1,410,172–
1,410,172

Total

801,203

388,194

169,408

56,6201,415,426(5,253)

Segment income

18,884

14,434

16,483

2,429

52,231(20,820)

31,410

Segment assets

875,999

439,302258,119

47,526

1,620,947

120,956

1,741,904

27,66017,027

12,083

2,367

59,1392,321

61,461

1,103

1,213

–

–

2,316

–

2,316

833

–

60

1

895

–

895

28,734

12,619

7,728

3,804

52,887

4,196

57,084

Other items
Depreciation andamortization
Amortization of
goodwill
Impairment loss
Increase in property,
plant and equipment
and in intangible fixed
assets
Notes:

1.

2.

Figures are adjusted as follows.
(1) Segment income is adjusted for costs related to basic research not assignable to a reporting
segment or costs of research shared by different segments.
(2) Segment assets are adjusted for companywide assets not allocated to reporting segments.
(3) Increases in property, plant and equipment and in intangible fixed assets are adjusted forcapital expenditures for the head office building and other items.
Segment income is adjusted to reflect operating income as reported in the consolidated financial
statements.

31

(Related information)
The year ended March 31, 2016 (April 1, 2015 – March 31, 2016)
1. Information on products and services
Omitted because similar information is disclosed in segment information.
2. Regional information(1) Net sales(Million yen)Japan
1,221,329
Notes:

1.
2.
3.

Asia

Other regions

146,925

Total

87,6601,455,916

Sales are classified by country or region, based on the location of customers.
Country and regional segments are based on geographic proximity.
Main countries and regions included in each segment:
Asia:
South Korea, China, Taiwan, Indonesia
Other:
United States, France, United Kingdom, Germany(2) Property, plant and equipment
Omitted because the value of property, plant and equipment located in Japan is over 90%of the value of property, plant and equipment as reported in the consolidated balance
sheets.
3. Information on major customers
Not described because there are no outside customers whose sales account for 10% or moreof net sales reported on the consolidated statements of income.
The year ended March 31, 2017 (April 1, 2016 – March 31, 2017)
1. Information on products and services
Omitted because similar information is disclosed in segment information.
2. Regional information(1) Net sales(Million yen)Japan
1,207,679
Notes:

1.
2.
3.

Asia

Other regions

126,210

Total

76,283

1,410,172

Sales are classified by country or region, based on the location of customers.
Country and regional segments are based on geographic proximity.
Main countries and regions included in each segment:
Asia:
South Korea, Taiwan, China, Indonesia
Other:
United States, France, United Kingdom, Germany(2) Property, plant and equipment
Omitted because the value of property, plant and equipment located in Japan is over 90%of the value of property, plant and equipment as reported in the consolidated balance
sheets.
3. Information on major customers
Not described because there are no outside customers whose sales account for 10% or moreof net sales reported on the consolidated statements of income.

32

[Per share information]
Year ended March
31, 2016(April 1, 2015 –March 31, 2016)

Year ended March
31, 2017(April 1, 2016 –March 31, 2017)

Net assets per share¥1,618.66¥1,680.55

Net income per share¥53.10¥40.79Diluted net income per share¥53.07¥40.78Year ended
March 31, 2016

Year ended
March 31, 2017

(As of March 31,
2016)(As of March 31,
2017)

Note: Basis of calculations
1. Net assets per share(Million yen)

1,063,241
45,81616
45,8001,081,286
47,422–47,422

Net assets at fiscal year-end pertaining to common
stock(Million yen)

1,017,425

1,033,864

Number of common shares outstanding(Thousand shares)

Number of common treasury shares(Thousand shares)

680,480
51,919663,480
48,287

Number of common shares at fiscal year-end used
for the calculation of net assets per share(Thousand shares)

628,561

615,193

Year ended
March 31, 2016
(April 1, 2015 –March 31, 2016)

Year ended
March 31, 2017
(April 1, 2016 –March 31, 2017)(Million yen)

33,58725,226(Million yen)––

(Million yen)

33,58725,226

632,591

618,506(Million yen)

(18)

(6)

(Million yen)

(18)

(6)

–

–

Total net assets(Million yen)Amount excluded from total net assets(Million yen)

Of which, stock acquisition rights(Million yen)

Of which, non-controlling interests

2. Net income per share and diluted net income per share(1) Net income per share
Net income attributable to parent company
shareholders
Amounts not attributable to commonshareholders
Net income attributable to parent company
common shareholders
Average number of common shares outstanding
during the fiscal year

(Thousand shares)(2) Diluted net income per share
Adjustments to net income attributable to parent
company shareholders
Of which, impact of dilutive stock of consolidated
subsidiaries and affiliates
Increase in common stock(Thousand shares)[Significant subsequent events]
DNP’s Board of Directors, at a meeting held on May 12, 2017, decided to partially amend the Articles
of Incorporation in relation to a change in the number of shares per share unit (change from 1,000
shares to 100 shares), and to propose a share consolidation (two shares of common stock into one
share) at the 123rd Ordinary General Meeting of Shareholders scheduled for June 29, 2017. Thechange in the number of shares per share unit and the share consolidation will take effect on
October 1, 2017, subject to approval at the Ordinary General Meeting of Shareholders.

33For details, see the document titled, “Notification of Change in Number of Shares Per Share Unit,
Share Consolidation, and Related Partial Amendment of the Articles of Incorporation,” disclosed
separately on May 12, 2017.

34

6. Non-consolidated financial statements and key notes(1) Non-consolidated balance sheets(Million yen)

Year ended
March 31, 2016
(As of March 31, 2016)

Year ended
March 31, 2017
(As of March 31, 2017)83,59845,223245,389
5,344
10,068
1,396
5,845
34,676(1,342)
430,199

119,969
46,098238,066
4,584
9,713
1,036
10,17332,015(1,171)
460,485

450,099(280,093)
170,005
33,587(26,290)
7,297
581,893(529,119)
52,774
1,326(1,239)86
51,607(40,465)
11,142131,032
1,939
(970)
969
9,544
382,851

436,136(276,029)
160,107
33,267(26,509)
6,757
576,058(529,683)
46,375
1,367(1,261)
106
51,494(40,669)
10,824132,491
2,344(1,092)
1,252
11,131
369,046

20,5902,095
22,686

21,687
1,861
23,549302,122
158,432
2,922
12,38063,851(12,920)526,790932,328
1,362,528

322,993
158,185
2,922
7,118
65,185(9,833)
546,572
939,168
1,399,653

ASSETS
Current assets
Cash and time deposits
Notes receivable
Trade receivable
Merchandise and finished goods
Work in progress
Raw materials and supplies
Deferred income taxes
Other
Allowance for doubtful accounts
Total current assets
Fixed assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Structures
Accumulated depreciation
Structures, net
Machinery
Accumulated depreciation
Machinery, net
VehiclesAccumulated depreciation
Vehicles, net
Equipment
Accumulated depreciation
Equipment, net
Land
Lease asset
Accumulated depreciation
Lease asset, net
Construction in progress
Total property, plant and equipment
Intangible fixed assets
Software
Other
Total intangible fixed assets
Investments and other assets
Investment securities
Investments in securities in affiliates
Investments in capital of affiliates
Long-term loans
Other
Allowance for doubtful accounts
Total investments and other assets
Total fixed assets
TOTAL ASSETS

35

(Million yen)

Year ended
March 31, 2016
(As of March 31, 2016)

Year ended
March 31, 2017
(As of March 31, 2017)

10,750206,811313–
36,88919,8992,604
189,105
7,557
141
–
881
–
474,954

11,521
206,386452
200
31,953
17,0494,052
187,041
7,575
178
18,679485
138
485,715

100,000
945
1,145
5,963
8,297
72
44,781
161,206
636,160

100,000
1,072
966
5,834
8,685
207
59,959176,726
662,442

114,464

114,464

144,898
144,898

144,898
144,898

23,30023,300

0

0

27

25

332,780
70,156426,264(80,972)
604,655

332,780
43,659399,765(69,581)589,546

121,712

147,664

121,712726,367
1,362,528

147,664
737,211
1,399,653

LIABILITIESCurrent liabilities
Notes payable
Trade payable
Lease obligations
Asset retirement obligations
Accounts payable - otherAccrued expenses
Advances received
Deposits payable
Reserve for bonuses
Reserve for bonuses to directors
Repair reserve
Notes payable for facilities
Other
Total current liabilities
Long-term liabilities
Bonds
Lease obligations
Asset retirement obligations
Long-term accounts payable
Provision for retirement benefits
Reserve for environmental measures
Deferred tax liabilities
Total long-term liabilities
TOTAL LIABILITIESNET ASSETSStockholders’ equity
Common stock
Capital surplus
Capital reserve
Total capital surplus
Retained earnings
Legal reserve
Other retained earnings
Reserve for special depreciation
Reserve for depreciation reduction of fixed
assetsOther reserve
Retained earnings brought forward
Total retained earnings
Treasury stock
Total stockholders’ equity
Valuation and translation adjustments
Valuation difference on available-for-salesecurities
Total valuation and translation adjustments
TOTAL NET ASSETSTOTAL LIABILITIES AND NET ASSETS

36

(2) Non-consolidated statements of income(Million yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating loss
Non-operating income
Interest income
Dividend income
Other
Total non-operating income
Non-operating expenses
Interest expense
Other
Total non-operating expenses
Ordinary income
Extraordinary gains
Gain on sale of fixed assets
Gain on sale of investment securities
Other
Total extraordinary gains
Extraordinary losses
Loss on sale or disposal of fixed assets
Loss on sale of investment securities
Loss on devaluation of investment securities
Repair costs and repair reserve provisions
Other
Total extraordinary losses
Income before income taxes
Current income taxes
Deferred income taxes
Total income taxes
Net income

37

Year ended
March 31, 2016
1,001,026
880,119
120,906
122,449(1,542)

Year ended
March 31, 2017976,797
858,427
118,369
127,776(9,406)

226
25,083
34,84160,151

191
24,922
34,74259,855

1,614
28,78930,40328,206

1,531
27,95529,486
20,96248
14,594380
15,02352
44,764827
45,644

1,225
0
923
7,672
3,862
13,68429,545
1,580
5,117
6,697
22,8485,389
978
937,7381,048
45,164
21,442
1,490
(33)
1,456
19,985

(3) Non-consolidated statements of changes in net assets
The year ended March 31, 2016 (April 1, 2015 – March 31, 2016)(Million yen)
Stockholders’ equity
Capital surplus
Commonstock

Balance at the beginning ofcurrent period
Changes of items during theperiodReversal of reserve for
special depreciation

114,464Retained earnings
Other retained earnings

Capitalreserve

Total capitalsurplusLegalreserve

144,898

144,898

23,300Reserve for
specialdepreciation

Reserve fordepreciation
reduction of
fixed assets

Other
reserve

Retainedearnings
brought
forwardTotal
retainedearnings

029

382,780

51,105457,215

0

–

1

–

(0)

Reversal of reserve fordepreciation reduction of
fixed assets(1)(50,000)

Reversal of other reserves
Cash dividends paid
Net income

50,000–(20,376)(20,376)

22,84822,848Purchases of treasury stock
Disposal of treasury stock
Cancellation of treasury stock

(0)

(0)

(33,422)(33,422)Net changes in items otherthan stockholders’ equity
Total changes of items during
the period

–

–

–

–

(0)

(1)

(50,000)

19,050(30,950)

Balance at the end of current
period114,464

144,898

144,898

23,300027

332,780

70,156426,264

Stockholders’ equity

Balance at the beginning ofcurrent period

Valuation and translation adjustments

Treasury
stock

Total
stockholders’equityValuationdifferenceonavailablefor-salesecuritiesNet
deferred
gains(losses)onhedgesTotalvaluationandtranslation
adjustments

Total
net
assets(94,329)622,248

146,176(0)

146,175

768,424

Changes of items during theperiodReversal of reserve for
special depreciation
Reversal of reserve fordepreciation reduction of
fixed assets
Reversal of other reserves
Cash dividends paid
Net income
Purchases of treasury stock
Disposal of treasury stock
Cancellation of treasury stock
Net changes in items otherthan stockholders’ equity
Total changes of items during
the period
Balance at the end of current
period(20,066)

–

–

–

–

–

–

(20,376)(20,376)

22,84822,848(20,066)(20,066)

1

1

1

33,422–––(24,463)0(24,463)(24,463)

13,357(17,593)(24,463)0(24,463)(42,056)(80,972)

604,655

121,712–

121,712726,367

38

The year ended March 31, 2017 (April 1, 2016 – March 31, 2017)(Million yen)
Stockholders’ equity
Capital surplus
Commonstock

Balance at the beginning ofcurrent period

114,464Retained earnings
Other retained earnings

Capitalreserve

Total capitalsurplus

Legal reserve

144,898

144,898

23,300Reserve for Reserve fordepreciation
specialreduction ofdepreciation fixed assets

0

27

Other
reserve

Retainedearnings
brought
forwardTotal
retainedearnings

332,780

70,156426,264

0

–

2

–

(19,919)(19,919)

19,98519,985(26,564)(26,564)

Changes of items during theperiodReversal of reserve for
special depreciation(0)

Reversal of reserve fordepreciation reduction of
fixed assets(2)

Cash dividends paid
Net income
Purchases of treasury stock
Cancellation of treasury stock
Net changes in items otherthan stockholders’ equity
Total changes of items during
the period

–

–

–

–

(0)

(2)

–

(26,496)(26,498)

Balance at the end of current
period114,464

144,898

144,898

23,300025

332,780

43,659399,765

Valuation and translation
adjustments

Stockholders’ equity

Balance at the beginning ofcurrent period

Treasury
stock

Total
stockholders’equityValuationdifferenceonavailablefor-salesecurities

Total
valuationandtranslation
adjustments

Total net
assets(80,972)

604,655

121,712

121,712726,367

Changes of items during theperiodReversal of reserve for
special depreciation––

Reversal of reserve fordepreciation reduction of
fixed assets––(19,919)(19,919)

Cash dividends paid
Net income

19,98519,985Purchases of treasury stock(15,174)(15,174)(15,174)

Cancellation of treasury stock

26,564––

Net changes in items otherthan stockholders’ equity
Total changes of items during
the period
Balance at the end of current
period–25,951

25,951

25,951

11,390(15,108)

25,951

25,951

10,843(69,581)589,546

147,664

147,664

737,211(4) Notes regarding non-consolidated financial statements[Notes on premise of a going concern]None39