OUR PURPOSE /MISSIONDNP will draw the shape of the “future” we seek to create in eachbusiness growth area and will create new value through All DNP efforts
to realize this envisioned shape.

Knowledge and Communication
The DNP Group will strive to realize a sustainable,
better society and well-being lives by connecting individuals andsociety and creating new value.
The DNP Group continuously maintains its aspiration to contribute to society and enrich peopleʼs lives
and incorporates this aspiration into its Corporate Statement “Creating future standards.” Driven by
this aspiration, all DNP Group employees fulfill their mission of creating an even better future.
The DNP Group will synergize its unique strengths in P&I (Printing & Information) and fortify
cooperation with its diverse array of partners to solve social issues and create new value that meets
peopleʼs expectations. DNP will make itself an “indispensable company” by enhancing and making
this value continually exist as “basics” that are indispensable in peopleʼs daily lives.

DNP Group Vision
The vision is comprised ofthree main elements, thefirst of which is central:
Corporate Philosophy,
Business Vision andGuiding Principles.

2

Corporate
Philosophy
The DNP Group
connects individuals
and society, andprovides new value.

Business
VisionGuiding
Principles

Use P&I innovations to
expand business,
primarily around four
growth areas.

TAIWA(dialogue)
andcooperation

The DNP Group
Code of Conduct
A set of codes underlying
all types of activities
aimed at achieving ourGroup Vision.
All DNP employees must
adhere to these codes.

Lifestyle and Mobility

A future where people worldwide can expand
opportunities for safe and secure communications
and share and inherit knowledge

A comfortable future that safely and securely
protects all living spaces where people
worldwide are mobile and lead their lives

DNP will provide value for nurturing culture and supporting peopleʼs
lives through comfortable communications. By producing information
media services and content and enhancing services protected byinformation security, DNP will provide people with the information
they want when they need it in an optimal format and will convey
knowledge from generation to generation.

DNP will provide value in the form of high levels of safety and comfort
in all spaces where people lead their daily lives, including at home,
stores, offices and hospitals, as well as in cars and railway cars. We
will add functions that create comfortable spaces and develop
superbly designed products and combine these with the Internet ofThings (IoT) to contribute to the realization of a smart society.

Food and Healthcare

Environment and Energy

A future where people around the world no longer
have anxieties about their own lives and can lead
lifelong safe, secure and high-quality lives

A sustainable future that reduces environmental
impacts and enables people worldwide toco-exist harmoniously with the earth

Amid a shift in global demographics and the ongoing decline inbirthrates and aging of society in Japan, DNP will create value that
supports safe and high-quality lives and helps people maintain theirhealth throughout their lives. DNP will support the food value chain
through its functional and hygienic packaging while also taking on thechallenge of extending healthy lifespans through its life
science-related businesses.

DNP will accelerate the development of diverse products and services
toward the realization of a sustainable society that achieves
compatibility between economic development and protection of the
global environment. We will combine strengths such as our highly
functional films that control light and heat with our information
technologies to provide value that enables resource and energy
savings and helps preserve biodiversity.

1. Contributing to the development of society
1. Social contribution as a good corporate citizen
1. Compliance with the law and social ethics
1. Respect for human dignity and diversity
1. Environmental conservation and realization ofa sustainable society
1. Realization of a “universal society”
1. Ensuring the safety and quality of our products
and services
1. Ensuring information security
1. Proper disclosure of information
1. Realization of a safe and vibrant workplaceThree Corporate
Responsibilities
Three important
obligations DNP has
to fulfill to remain acompany that canalways be fully
trusted by its various
stakeholders

1. Value Creation
2. Integrity in Conduct
3. Transparency (Accountability)

DNP Group Environmental
Vision 2050
Decarbonized society
Recycling-oriented society
Society in harmony with nature
We will accelerate efforts torealize these societies.
P58-64DNP Integrated Report 2022

3

OUR PORTFOLIO
Overview of DNPʼs Business −−−Toward Building a Stronger Business Portfolio
Net Sales/Operating Income by Segment

Creation of Strong Products and Services

Products and Services with Top Shares in Japan and Overseas
Domestic and overseas market-leading products and services created by synergizing DNPʼs unique “ P&I” strengths

211.1

49.7
（3.7%）（15.7%）

Information Communication

699.0（51.9%）

Products and services withthe worldʼs top shares

Publishing Business(Publishing & media services, publications distribution)

Metal masks for
OLED display
manufacturing

Optical films fordisplays Display

Display
Components
Business

Components
Business

Information Innovation Business(Marketing, BPO, information security)

Imaging Communication BusinessNet sales
income bysegment

Products and services with top shares
Battery
pouches forlithium-ion
batteries

Smart cards: Top share overall in Japan and top share indomestic financial markets
Dye-sublimation thermal transfer printing media for photo prints:
World top share(¥ billion)

Industrial
High-performance
Materials Business

Dye-sublimation
thermal transfer
printing media forphoto prints
Image of an OLED display
manufactured using a metal mask

Imaging
Communication
Business

Lifestyle and Industrial Supplies

387.0（28.7%）

Packaging Business
Living Spaces BusinessIndustrial High-performance
Materials Business

0.7（0.8%）

27.6（31.2%）

Display Components BusinessElectronic Devices Business4

Building
decorative
materials

Aseptic fillingsystems for
PET bottles(floor coverings)

Packaging
Business

Living Spaces
Business

Aseptic filling systems for PET bottles: Top share in Japan in unit
sales of PET bottle filling systems (number of units in operation)
Building decorative materials: Top share of domestic market for
floor coverings
Battery pouches for lithium-ion batteries: World top share(Color filters for liquid crystal displays, optical films, metal masks
for organic light-emitting diode (OLED) displays and others)

Information Communication
Lifestyle & Industrial Supplies
Electronics
Beverages

Information
Innovation
Business

Products and services with top shares

Electronics(¥ billion)（52.6%）

Smart cards

Creation of Value Centered on Growth Areas in the Medium-term Management Plan

Operatingincome bysegment

46.5

Products and services with top shares in Japan

13.6（15.4%）

Focus businesses in four growth areas

Knowledge and Communication

Optical films

BPO

Metal masks(Photomasks for semiconductors, others)

Authentication/security

Products and services with top shares

Information trust banks

Optical films for displays: World top share
Metal masks for OLED display manufacturing: World top share

Educational business

Beverages(Hokkaido Coca-Cola Bottling Co., Ltd.)

Beverages BusinessPhoto media/
service creation

Lifestyle and Mobility
Mobility interior andexterior materials

IoT and next-generation
communications business

Mobility business
Data
distribution-related
business
Medical/healthcare

Food and Healthcare

New 5G-related products(Vapor chambers, transparent
antennas, etc.)

Eco-friendly packaging

Battery pouches forlithium-ion batteries

Environment-related
business

Industrial high-performance materials

Environment and Energy

DNP Integrated Report 2022

5

OUR VALUE CREATION

Contents of DNP Group Integrated Report 2022

WHO WE ARE

For creating “ future standards”

TOP MESSAGE ………………………………………………………………………………… 8

1. THE DNP GROUPʼS VALUE CREATION STORY…………………… 12

Medium-termManagement Plan

Create value primarily ingrowth areas

Maximizing corporate value by creating future standards”

Basic Strategy 1

Create value throughP&I Innovations

Business
promotion
2. P&I
Innovations

1. Social issues
and peopleʼs
expectations

1

DNPʼs Value Creation Process …………………………………………………………………… 12

OUR STRENGTHSAND VALUE CREATIONPROCESSES

Provide value optimized toeach country and region

Increase value using all
available restructuring
approaches

2

3. Strengthen
our financialbase

Reinforcing
business base

OUR
STRATEGIESStrengthen business
infrastructure to
support growth

3 & 4: Reinforcing business base ̶ Expanding and comprehensively utilizing
financial and non-financial capital ………………………………………………………………… 18

Business Strategy―Medium-term Management Plan, Directorʼs Message ………… 22
Financial Strategy, Directorʼs Message ……………………………………………………… 27
Human Capital Strategy, Directorʼs Message ……………………………………………… 30
Intellectual Capital Strategy, Directorʼs Message ………………………………………… 34
Value Creation through Digital Transformation (DX) ……………………………………… 40

3. BUSINESS PROMOTION ………………………………………………………… 42

Boost asset efficiency
OUR
BUSINESS

Strengthen corporate
governanceMedium-termManagement Plan
Basic Strategy 2

business promotion and reinforcing our business base ………………………………………… 14

1 & 2: Business promotion ̶Turning risks into business opportunities ……………………… 16

2. PROGRESS WITH MEDIUM-TERM MANAGEMENT-PLAN … 22

3

4. Strengthen
non-financial
capital“Creating future standards” through the continuation of

Growth trajectory: Corporate history― Long-term Vision ……………………………………… 20

All DNP4

OUR PURPOSE / MISSION ………………………………………………………………………… 2
OUR PORTFOLIO ……………………………………………………………………………………… 4
OUR VALUE CREATION …………………………………………………………………………… 6

Financial Highlights and Business Strategies
Information Communication Business ……………………………………………………………… 42
Lifestyle & Industrial Supplies ……………………………………………………………………… 46
Electronics …………………………………………………………………………………………… 50

4. REINFORCING BUSINESS BASE

Shareholder returns/
stakeholder returns

OUR BASE

Strengthen financial andnon-financial capital………………………………………… 54

CSR Management …………………………………………………………………………………… 56
Environmental and Human Rights Efforts, Directorʼs Message ………………………… 58
Diversity and Inclusion Efforts, Directorʼs Message ……………………………………… 66

5. MANAGEMENT STRUCTURE ………………………………………………… 70
OUR
GOVERNANCE

Board of Directors …………………………………………………………………………………… 70
Corporate Governance ……………………………………………………………………………… 74
Message from Outside Director ………………………………………………………………… 78

Editorial Policy
To realize our business vision and raise corporate value over the medium and long term, DNP isundertaking integrated business activities through swift and accurate decision-making based on
the concept of utilizing financial and non-financial capital in an integrated manner. Moreover, toensure this leads to gaining the understanding and empathy of our stakeholders, we are working todisclose appropriate information in a timely manner. This report is an annual report that provides
multifaceted and integrated coverage not only of financial information but also of DNP ʼs overallbusiness activities, including environmental, social and governance (ESG) criteria. DNP will fulfill
our accountability and deepen communications with stakeholders through this report in addition to
the DNP website and such publications as the Yuho securities report, shareholdersʼ report andenvironmental report as well as through various opportunities for various dialogue.

◇ Period covered by this report: April 1, 2021 to March 31, 2022
◇ Scope of report: All companies and divisions of the DNP GroupIn this report, “ DNP ” refers to the entire DNP Group, and “ we” refers
to DNP or the DNP management team.
(In the section on Corporate Governance (pages 74-85), “ DNP ” refers to Dai Nippon
Printing Co., Ltd.)◇ Issued: October 2022 (Next scheduled issue: October 2023)

Note: This report is aimed at providing information about DNPʼs businesses, management vision and business results. Opinions and forecasts contained in the report werebased on the best judgment of management at the time the report was prepared, so we cannot guarantee that all information contained in the report is completely infallible.

6

6. BUSINESS RESULTS/CORPORATE PROFILE …………………… 86

However, reporting is not confined to this period regarding some contents.

OUR
PERFORMANCE

Summary of Financial Results …………………………………………………………………… 87
Financial and Non-financial Data ……………………………………………………………… 88
Management ʼs Discussion and Analysis ……………………………………………………… 91
Major Subsidiaries and Affiliates/
Our Products and Services/Investor Information …………………………………………… 98
DNP Integrated Report 2022

7

TOP MESSAGE

THE DNP GROUP ʼ S

PROGRESS WITH

CREATION
1 VALUESTORY

2 MEDIUM-TERM
MANAGEMENT PLAN

3 BUSINESSPROMOTION

4 REINFORCING
BUSINESS BASE

5 MANAGEMENTSTRUCTURE

RESULTS/
6 BUSINESSCORPORATE PROFILETOP MESSAGE
DNP will create a better future driven
by its aspiration to contribute tosociety and enrich peopleʼs lives.
Yoshinari Kitajima
Presidentof new value that realizes a sustainable,
1. Creation
better society and more-spiritually enriched lives

The DNP Group continuously maintains its aspiration tocontribute to society and enrich peopleʼs lives and incorporates
this aspiration into its brand statement “Creating future
standards.” Imbued with this aspiration, all DNP Group
employees fulfil their mission of creating an even better future.
On top of this, we work to ensure that DNPʼs products
and services provide “indispensable value” to people as afamiliar and basic existence for their lives. Besides providing
products and services as output, I believe it is also importantthat people worldwide feel that our products and services areindispensable in their lives and accept these as a type ofvalue (outcome). By repeatedly building on these efforts, DNP
will demonstrate its reason for existence while ensuring thishas the positive impact of “realizing a sustainable, better
society and well-being lives.”
We also believe that a healthy society and economy andcomfortable and well-being lives can only be achieved on asustainable planet. Recent years have especially witnessed
accelerating changes in the environment, society and theeconomy as well as the manifestation of infectious diseaserisk and geopolitical risk and these are having a tremendous
impact on each country and region.
As underscored by these shifts, we live in an age where
abrupt changes are becoming the norm, making it imperativethat we ourselves take the lead in reorienting theenvironment, society and the economy toward a better
direction rather than reacting to individual changes after
these occur.
For this purpose as well, in April 2022 we restructured
our Sustainability Committee, for which I serve as
chairperson, based on our recognition that we need toadequately ascertain, analyze and manage risks as variablefactors and to strengthen our initiatives in this area. This
committee collaborates with the Corporate Ethics Committee
and the BCM Promotion Committee to manage company-widerisks and reduce negative impacts under medium-to-longterm corporate activities that emphasize the environment,
society and governance (ESG).
Of course, DNP also simultaneously regards thesevariable factors as huge opportunities for expanding its
business. By synergizing our unique strengths of P&I (printing
and information) and deepening collaboration with our diverse
array of partners, another of DNPʼs distinctive strengths, wewill solve various social issues and create new value thatexceeds peopleʼs expectations.
The DNP Group will continuously tackle new challenges
and take the lead in creating a better future by giving shapeto each and every value that people desire.

Image of the environmental, social and economic foundations that DNP values and the value that DNP creates

Well-being
lives

ComfortExciting

Value

Value

Human lifespans of
100 years
A foundation
for learning
tailored toeach individual

Sustainability
Sustainable
Environment,
Society andEconomyA foundation
for healthy
vibrant living

my
o
n
Eco
ty
e
i
c
So
nt
e
onm
r
i
v
En

truc
fras
n in
o
i
t
rma
Info

ture

te
nec
con

ally
utu
em
l
p
Peo

d by

data

er
oth
ach
ct e
e
p
res

e
anc
Bal

y
om
con
he e
t
h
wit

Consumers’ perspective
8

DNP Integrated Report 2022

9

TOP MESSAGE

THE DNP GROUP ʼ S

CREATION
1 VALUESTORYPROGRESS WITH

2 MEDIUM-TERM
MANAGEMENT PLAN

3 BUSINESSPROMOTION

4 REINFORCING
BUSINESS BASE

5 MANAGEMENTSTRUCTURE

RESULTS/
6 BUSINESSCORPORATE PROFILETOP MESSAGE

2.

Continue “Creating future standards” through the “value creation process”
of business promotion and reinforcing our business base

We are currently seizing megatrends such as digitaltransformation (DX), longer human lifespans, the movetoward smart cities and the building of a circular economy
and we are concentrating our resources on focus businesses
related to IoT and next-generation communications business,data distribution-related business, mobility business andenvironment-related businesses.
In promoting business, it is important to utilize bothfinancial capital and non-financial capital (human, intellectual,
manufacturing, natural, social and relationship capital) in an
integrated manner. Besides targeting business development
investments and environment-related investments, thesecapitals will be reinvested in corporate activities from thenext fiscal year onward as “investments in human resources,”
which I consider to be of paramount importance. (*See pages
12-21 for the value creation process.)
These value creation initiatives are long term and look 50
and 100 years into the future. In getting there, we have set
specific interim goals (milestones) and by achieving each andevery goal we will create an even better future. Most recently,
upon setting concrete goals for attainment by fiscal 2024, weare promoting a three-year Medium-term Management Plan
that runs from fiscal 2020 to fiscal 2022.

DNP prescribes its Corporate Philosophy as “ The DNP Group
connects individuals and society, and provides new value"and expresses its Business Vision as “use P&I Innovations to
expand business, primarily around four growth areas.” Inrealizing these, we are currently deploying a business process
for “creating future standards” by both promoting businessand reenforcing our business base.
Under this “value creation process,” we first ascertain
and analyze global social issues, peopleʼs expectations andmegatrends, consider stakeholder interests and impacts, andthe degree of importance for DNP, and set “key issues” for
DNP. Next, we measure the value generated by DNPʼsbusinesses, with a focus on profitability and market growthpotential and prescribe the businesses on which we will
focus and develop. We will build a resilient business portfolio
by optimally allocating management resources centered onthese “ focus businesses.”

Let me next briefly touch upon our “ Third Corporate
Founding” as shown in the diagram “ What the DNP Group
Wants To Be.” DNPʼs two predecessors, Shueisha and Nisshin
Printing, founded in 1876 and 1907, respectively, merged in1935 to form Dai Nippon Printing Co., Ltd. The company
temporarily faced harsh business management conditions
after the war but responded to these circumstances byformulating a five-year reconstruction plan. As part of thisplan, the company promoted Expansion Printing that involved
applying and advancing our printing technologies to broaden

our business domains and this led to the birth of the current
three segments comprising our printing business. We call thistransformation our Second Corporate Founding.
During this phase, we provided individual products andservices mainly to respond to the needs of corporate clients.
At present, however, circumstances in Japan and abroad are
evolving dramatically and this means that DNP needs toobserve and address the needs of society and consumers on

our own. I believe we can realize “Creating future standards”
only when DNP takes the lead in accurately grasping social
issues and peopleʼs expectations. We are currently taking a
giant step away from “solving customer issues” and moving
toward “ We will realize a better, more sustainable society andmore well-being lives.” We regard this major transformationas our Third Corporate Founding and we are working tosuccessfully attain this transformation.

will continue taking on the challenge of creating a better future by
3. We
strengthening “investment in human resources.”

The DNP Groupʼs greatest strength in creating new value isthe existence of each and every employee. All employees
both in Japan and overseas are valuable human resources
and serve as the driving force for our sustainable growth as acompany. In recognition of this, we will proactively andconcretely execute investments in human resources as well
as strengthen our human capital.
Over the past several years, we have formulated suchpolicies as the DNP Group Declaration on Health, DNP Group
Diversity Declaration and DNP Group Safety and Health Charterto enable all employees to fully deploy their capabilities.
Additionally, we also concentrated on rebuilding various
personnel systems with the aim of enhancing our appeal as acompany from both internal and external perspectives. These
measures are based on a belief that respecting employees
leads to the respected employees driving corporate growth andenriching society. In fiscal 2022, we positioned this belief as
our “universal and basic approach to human resources” andset this as our Human Capital Policy.
Regarding human rights and labor, which have become
increasingly important in recent years, the DNP Group Code of
Conduct advocates “Respect for human dignity and diversity”
and calls for respecting the inherent diversity of all kinds ofpeople and stipulates that all employees conduct themselves ina disciplined manner. In 2020, we formulated the DNP Group
Human Rights Policy based on documents such as theInternational Bill of Human Rights and the International Labor
Organization's Declaration on Fundamental Principles andRights at Work. Going forward, we will strengthen initiatives forrespecting human rights throughout the DNP Group, both inJapan and overseas.
Needless to say, every society throughout the world is fullof diversity and has indispensable people, each with theirown unique characteristics. To continuously provide value asa “basic” to these societies and people, DNP itself first
thoroughly promotes “ diversity and inclusion.” For example,
while closing any gender gaps, we will synergize thestrengths of all employees regardless of whether they havedisabilities to raise the total strengths of All DNP.
The DNP Group has a corporate culture of continuously
taking on challenges. In the future as well, we will continue totake on the challenge of realizing a better future from along-term perspective.
To do so, I would like to deepen TAIWA (dialogue) withnumerous stakeholders that include shareholders. Goingforward, I ask for your further support as we work to achieve
our objectives.

What the DNP Group Wants To Be
Corporate Philosophy

The DNP Group connects individuals and society, and provides new value.

1950s

21st Century
Toward “Third Corporate Founding”

Second Corporate Founding

DNP
thus far

1. Social issues
and peopleʼs
expectations

2. P&I
Innovations

1

All DNP

Providescustomized
solutionstailored tocustomer needs

Reinforcing business base

4
4. Strengthening
non-financial capital

DNP ʼs unvarying strengths

102Business promotion

3
3. Strengthening
financial base

DNP
from
now onResolving social
issues while providing

Creating
futurestandards

DNP will synergize its uniquestrengths and together with
its numerous partners will
provide indispensable value
to society and people.

new valuethat exceeds peopleʼs
expectations“ Culture of continuously taking on the challenge of promoting change”“ Exceeds to provide indispensable value to society and people.”“ Synergies from P&I strengths” “ Sincere approach and high transparency”

DNP Integrated Report 2022

11

TOP MESSAGE

THE DNP GROUP ʼ S

CREATION
1 VALUESTORYPROGRESS WITH

2 MEDIUM-TERM
MANAGEMENT PLAN

3 BUSINESSPROMOTION

4 REINFORCING
BUSINESS BASE

5 MANAGEMENTSTRUCTURE

RESULTS/
6 BUSINESSCORPORATE PROFILETHE DNP GROUPʼS VALUE CREATION STORY

DNPʼs Value Creation Process
DNP recognizes it has a mission of creating a better future in keeping with its corporate statement “Creating future
standards.” To fulfill this mission, DNP will accurately identify and analyze changes and issues in the environment,
society and economy, draw the shape of the future hoped for by people throughout the world and then continuously
create indispensable value that exists as future standards.

The DNP Group operates a business model that utilizes inputs such as diverse management resources andappropriate and important information entrusted by domestic and overseas companies, organizations, and consumers
and delivers the value (outcome) that is created by the output of products and services to the most-suitable partners.
By building on the achievements of this model and ensuring these continuously have a positive impact on theenvironment, society and economy, we will realize a sustainable, better society and well-being lives.

Risks & business opportunities/
input/management resources

Business model

Output: Products and services

Outcome: Value for people

Impact: Impact on the environment,
society and economy

BUSINESS MODELSOUTPUTOUTCOME

IMPACT

Creating future standards"
through P&I Innovations"

Create new value that evolves into “ future standards”
indispensable for people in the future by developing new products
and services and enhancing existing businesses

RISKS &OPPORTUNITIES• Identify and analyze environmental, social andeconomic changes and issues• Clarify the expectations of people around the world
Minimize the adverse impacts of risks (variables)and ensure this leads to maximizing business
opportunities

Increase future cash flow by minimizing thenegative impact of risks and turning these into
positive business opportunities

INPUT• Utilize various types of content (text, images, video,
audio) and confidential information and important
information backed by the strong relationships oftrust built with companies, organizations andconsumers in Japan and overseas and our highly
advanced information security infrastructure.

RESOURCES /CAPITALS

2

Social issues
and peopleʼs
expectations

P&I
Innovations

Production
andmanufacturing

Total
strengthsofAll DNPManagement
andoperation

Nonfinancial
capitalAll DNP
Reinforcing business base43

Technologies
and R&D

4

3

Human capitalStrengthen
non-financial
capitalStrengthen our
financial baseIntellectual capital

Packaging Business
Living Spaces BusinessIndustrial High-performance
Materials Business
Aseptic filling systems for PET bottles: Top sharein Japan in unit sales of PET bottle filling systems(number of units in operation)
Building decorative materials: Top share ofdomestic market for floor coverings
Battery pouches for lithium-ion batteries: World
top share

Electronics
Display Components BusinessElectronic Devices Business
Optical films for displays: World top share
Metal masks for OLED display manufacturing:
World top sharefood loss by synergizing monozukuri(manufacturing) and ICT• Reduce environmental impacts across theentire supply chain• Realize resource and plastic recycling that
leads to ecosystem conservation and adecarbonized society• Extend healthy lifespans and raise quality oflife (QoL)• Realization of comfortable and functional living
spaces• Realize a mobility society with nomobility-impaired people• Advance of regenerative medicine/telemedicine, etc.

• Improvements in the usability of various
devices and protection of the global
environment through high functionality, lowpower consumption and miniaturization• Contribute to a smart society by manufacturing
leading-edge semiconductor products• Achieve superior color reproduction andhigh-resolution image expression• Improve peopleʼs experiential value with aproduct lineup realized through flexible
processing• Reduce the environmental impact ofmanufacturing processes, etc.

Manufactured capital
Natural capitalSocial and relationship capital

Financial capital

122
Business promotion

Sales• Safe and secure communications throughhighly advanced information security• Assure the safety of economic and social
activities such as the sharing economy andcashless society• Pass down to and advance knowledge for the
next generation• Provide lifelong educational opportunities• Expand peopleʼs experiential values bymaking use of photos and various types ofcontent• Cultivation and development of diverse
cultures, etc.

Knowledge andCommunication
A future where people worldwide
can expand opportunities for safe
and secure communications andshare and inherit knowledge

Lifestyle and Industrial Supplies • Provide stable supplies of food and reduce

1

Project
planning
anddesignPublishing BusinessInformation Innovation Business
Imaging Communication Business
Smart cards: Top share overall in Japan and top
share in domestic financial markets
Dye-sublimation thermal transfer printing media
for photo prints: World top share

1• DNP ʼs assets and strengths that serve as afoundation for value creation• Promote corporate activities through the integrated
usage of financial capital and non-financial capital• Expand various types of management resources
through corporate activities and reinvest these in thenext fiscal year

Information Communication

Make a sustainable andbetter society andwell-being lives as“ future standards”(Hokkaido Coca-Cola Bottling Co., Ltd.)A future where people around theworld no longer have anxieties about
their own lives and can lead lifelong
safe, secure and high-quality lives

Lifestyle and Mobility
A comfortable future that safely andsecurely protects all living spaces
where people worldwide are mobileand lead their lives

Environment and Energy

Beverages
Beverages Business

Food and Healthcare• Contribute to peopleʼs healthy lifestyles by
providing safe and secure beverages anytime,
anywhere and to anyone

A sustainable future that reduces
environmental impacts and enables
people worldwide to co-exist
harmoniously with the earth

DNP Integrated Report 2022

13

TOP MESSAGE

THE DNP GROUP ʼ S

CREATION
1 VALUESTORYPROGRESS WITH

2 MEDIUM-TERM
MANAGEMENT PLAN

3 BUSINESSPROMOTION

4 REINFORCING
BUSINESS BASE

5 MANAGEMENTSTRUCTURE

RESULTS/
6 BUSINESSCORPORATE PROFILEDNPʼS VALUE CREATION PROCESS“Creating future standards” through the continuation of

Project
planning
anddesignP&I Innovations

business promotion and reinforcing our business baseProduction
andmanufacturing

DNP will spur innovation through the integrated use of theleading-edge technologies it has continually advanced and its diverse
know-how in sales, planning and production as well as the strengths
of its partners. DNP ʼs unique strengths that it has advanced in both
P&I (Printing & Information) are unmatched by any other company.
By deploying the total strengths of All DNP, we will create
unprecedented value that is indispensable to people and society.

DNPʼs value creation process involves realizing a sustainable, better society and moreenjoyable lifestyles through a virtuous cycle. This entails ascertaining and analyzingsocial issues and peopleʼs expectations (1), developing and providing value unique to
DNP through “P&I Innovations” ( 2) and strengthening its financial base andnon-financial capital for the creation of further value (3 and 4).

Management
andoperation

Promote strategic investments
DNP will expand financial and non-financial capital through corporate
activities and make investments toward new value creation.
(Business development investments/environment-related investments/
investments in human resources)

4

Manufactured capital

Natural capital

4
14

Business

promotion

All

DNP

Reinforcing

business baseSocial andrelationshipcapitalPromoteintegrated
business
activities

P18-19Along with its financial capital, DNP will work to expand various types of non-financial
capital that is unique to DNP and will promote integrated management that synergizes thestrengths of each type of capital.

Strengthen and thoroughly execute

2

OUTPUTOUTCOME

IMPACT• Various types of products
and services• Various types of business models

Resolving social issues whileproviding value that meets
peopleʼs expectations

Realizing a sustainable,
better society and morewell-being lives

Improving ROE

2

Creating value through “P&l Innovations”

Boost asset
efficiency

3&

Strengthen non-financial capitalP16-17

DNP will synergize its unique strengths in P&I (Printing & Information) and deepen its ties
with partners to create new value that connects people and society and will concentratethese efforts mainly in its “ four growth areas” and “ focus businesses.”

P16-17

1Intellectual capital

Dialogue and cooperation
with partners

Profits inreturn for value

P&I Innovations

DNP will take the initiative and directly interact with society and people, ascertain andanalyze major trends (megatrends), and utilize DNPʼs strengths and capital to create
value that meets peopleʼs expectations while solving social issues.

Human capital

Technologies
and R&D

Environment, society and economy/people

Provide value

1

Sales

DNP ʼs assets and strengths that serve
as a foundation for value creation

Environment, society and economy/people

Social issues andpeopleʼs expectations

Total
strengthsofAll DNP

Synergize
financial andnon-financial
capitalShareholder returns/
stakeholder returns
Raise EPS on the basis of stabledividends giving consideration to
all stakeholders.

Strengthen
financial
capitalStrengthen our financial baseP18-19We are strengthening our financial base by managing targets via segment ROA,
reducing strategic shareholdings and reducing idle assets in addition to
implementing various capital strategies.

corporate governance and internal control

3

DNP Integrated Report 202215

THE DNP GROUP ʼ S

CREATION
1 VALUESTORYTOP MESSAGE

PROGRESS WITH

2 MEDIUM-TERM
MANAGEMENT PLAN

3 BUSINESSPROMOTION

4 REINFORCING
BUSINESS BASE

5 MANAGEMENTSTRUCTURE

RESULTS/
6 BUSINESSCORPORATE PROFILEDNPʼS VALUE CREATION PROCESS

1 & 2: Business promotion
̶ Turning risks into business opportunities

In recent years, environmental, social and economic risks (variables) have become increasingly volatile and diverse,
and the extent of their impact has also spread around the world. DNP identifies and analyzes these risks, seeks tominimize their adverse impacts and at the same time treats change as a tailwind and strives to expand new
business opportunities by effecting change on its own.

In April 2022, we restructured the Sustainability Committee, which is chaired by the President, and are acceleratingthese activities. DNP promotes group-wide integrated risk management and through the value creation process,
DNP will create new value demanded by people and strengthen the foundation that supports this.

Identifying and analyzing risks (variables) closely associated with DNPʼs value creation

Management that minimizes the negative impact of fluctuations and turns these into business opportunities

Turning risk into business opportunities for DNP(domestic and overseas economic conditions, industry trends, consumer confidence, prices,
exchange rates, GDP and other factors), etc.

Changes in the systems and rules that form the basis of economic activities• Changes in financial infrastructure due to reassessment of capitalism, the establishment of
virtual economic zones and other factors• Changes related to the information infrastructure

Risks(strengthening and loosening of various rules and regulations, threats to information security), etc.

Changes in systems and rules for building a healthy society

Variables related to the sustainability of the global environment that
forms the foundation of all corporate activities• Intensification of natural disasters due to climate change and acceleration of biodiversity loss
• Expansion of the market for environmentally positive products and services, acceleration oftechnological innovation, etc.

Changes in systems and rules related to the global environment• Strengthening disclosure of climate change risks and nature-related information• Tightening of regulations on GHG emissions, revisions to Japanʼs energy policy• Acceleration of the transition to a circular economy, etc.

Reinforcing business base4

Megatrends

Social issues to be resolved and value provided

Megatrends

Secure transactions, safe and secure society
Accurate credit review
Streamline supply chain

Making cities andregions smart
Social issues to be resolved and value provided

Megatrends

Megatrends

Domestic population
decline and global
population growth

Digital transformation

Streamline functions and services incities and regions
Ensure the availability and means of transport,balanced with environmental concerns

Social issues to be resolved and value provided

Social issues to be resolved and value provided

Society 5.0
Toward the transformation ofworkstyles and lifestyles

Megatrends

Building a decarbonizedsociety

Megatrends

Social issues to be resolved and value provided

Social issues to be resolved and value provided

Longer human
lifespans

Extend healthy life expectancy

Reduce GHG emissions
Expand use of renewable energy

Food and Healthcare

Environment and Energy

3
Risks

Foundation to Support Value Creation

Social risks
Environmental risks

All DNP(mental and physical health, safety, hygiene and others)• Acceleration of human rights violations in the entire supply chain/value chain, etc.

2
Business promotion• Changes in issues related to the dignity of diverse people living in diverse societies• Changes in various conditions needed for all people to live comfortably• Changes in legal and political systems in each country/region• Expansion of geopolitical risk/country risk
• Manifestation of various risks due to differences in culture, systems and rules, and other factors

16

1Lifestyle and Mobility

Shift to data
economyExpanding the diversity of human resources
Food shortages, food losses

Variables related to the rights and dignity for diverse people living in society

Acceleration of sharing economy

Knowledge and Communication

Minimizing the adverse impacts of risk
DNP identifies issues of high importance and priority within
the entire Group, analyzes issues considered important in
the international community and has set seven material
issues. In particular, we are focusing on resolving issues
such as climate change risks, which have become
increasingly important in recent years, as well as respectfor human rights throughout the global supply chain. DNP
also believes that all employees both in Japan and overseas,
who possess diverse strengths, serve as the driving force
for the creation of new value and we are accelerating
initiatives for investing in people and strengthening anddeveloping human resources.

Intensifying climate change
Review energy initiatives

Seven material issues (key issues)• Accelerate development of business models/technologies/products/services, etc.
• Acceleration of digital transformation (DX) and establishment of a global network• Rapid changes in various economic indicators

Faster innovation
Greater development competition
Personnel shortages due to hiring issues

Risks

Value Creation

Economic risks

Short-term and medium- to-long-term variables in economic activity
occurring in each country/region and in the global market

Worsening marine pollution
Exhaustion of natural resources

Fair Operating Practices
Human Rights and Labor
Environment
Responsible Procurement

Product Safety and Quality
Information Security
Corporate Citizenship

DNP Integrated Report 202217

THE DNP GROUP ʼ S

CREATION
1 VALUESTORYTOP MESSAGE

PROGRESS WITH

2 MEDIUM-TERM
MANAGEMENT PLAN

3 BUSINESSPROMOTION

4 REINFORCING
BUSINESS BASE

5 MANAGEMENTSTRUCTURE

RESULTS/
6 BUSINESSCORPORATE PROFILEDNP ʼS VALUE CREATION PROCESS

3 & 4: Reinforcing business base̶ Expanding and comprehensively utilizing financial and non-financial capital

1

Social issues andpeopleʼs expectations
Identifying and analyzing risks (variables) closely associatedwith DNPʼs value creation
Turn risks into business opportunities for DNP and minimize the negative impact of risks
Toward creating value that meets and exceeds people's expectations

3|4

Social issues andpeopleʼs expectations

2

P&I
Innovations

1

2
Business promotion

All DNP
Reinforcing business base4
Strengthen
non-financial capital

3
Strengthen
our financial base

Improving ROE

Accelerate creation of value through“P&I Innovations” under the
Value Creation Program (see page 26)

Creating value
through“P&l Innovations”

We will take the initiative to create a better future bysynergizing the “ value hypothesis” with the “ business model”
and maximizing "profits" as the price paid for value.

Boost asset
efficiency

3. Strengthen our financial base and4. Strengthen non-financial capitalas the “source of value creation”

Increase and strengthen “internal strengths” and invest in new value creation
Promote synergizing the strengths of all employees, which is thedriving force behind creating future standards"
Enhance human capital " based on the Human Capital Policy "Promote diversity & inclusion
Develop human resources to create new value(DX personnel, ICT personnel, Meister system, Chief Specialist
system and others)• Total number of employees: 36,542(consolidated)(32,784 in Japan, 3,758 overseas)• Employee diversity and inclusion
perception level: 78%• Ratio of male employees taking
childcare leave: 82.4%

Intellectual
capitalIntellectual property strategy that assures value will become future
standards"
Create, apply, develop and synergize unique strengths in P&I (Printing& Information)
Linking of business growth strategy, intellectual property strategy andtechnology and R&D strategy
Utilization of the cloud environment and AI data analysis leveraging DX
trends as part of exploration, cultivation and utilization of technologies• Number of Japanese patents heldPatent rights: 11,726,
Design rights: 1,374,
Trademark rights: 1,288• R&D expenditures:
33.1 billion yen ( FY2021)
33.0 billion yen (FY2022 plan)

Manufactured
capitalOptimization of tangible assets that manufacture and operate products
and services that will become the future standards"
Establishment of bases in Japan and overseas to realize coexistence
between our business activities and the global environment
Creation of bases and systems (business continuity management (BCM),
business continuity plans (BCP), etc.) that enable strong business
continuity in response to natural disasters and other risks
Advanced security environment that achieves safe, secure information
distribution platforms• Global production bases:
57 bases in Japan, 16 bases overseas• Global sales bases:
34 bases in Japan, 24 bases overseas• Capital investment:
50.6 billion yen (FY2021)
95.0 billion yen (FY2022 plan)

NaturalcapitalReduction of environmental footprint over the value chain for future
standards"(appropriate operation of CSR Procurement Guidelines andGuidelines for Procurement of Paper for Printing and Converting)
Promote specific measures to realize a decarbonized society, arecycling-oriented society and a society in harmony with nature based on the
DNP Group Environmental Vision 2050, Biodiversity Declaration and others
Assure appropriate traceability, promote sustainable raw material
procurement, others• Reduce greenhouse gas (GHG) emissions:
33.3% reduction compared with FY2015• Amount of recycled water usage: 213,560
thousand m3, usage multiple: 29.8 times• A target of a 100% compliance rate with
the Guidelines for Procurement of Paper
for Printing and Converting

HumancapitalP&I Innovations

Shareholder
returns/
stakeholder
returns

Synergies with “external strengths”(Synergize)

Strengthen
financial
capitalSocial and relationshipcapitalFinancial
capital

Build and expand diverse partnerships thatenable us to accelerate the creation of future
standards" and expand possibilities
Foster long-term relationships of trust with all
our diverse stakeholders
Promote innovation by synergizing thestrengths of DNP and each of its partners
Quickly and appropriately reflect in value
creation the feedback " obtained throughdiverse connections

To continue creating future standards," we will
strengthen our financial base while promoting
the Medium-term Management Plan that looks
to the long term
Boost asset efficiency by reducing strategic
shareholdings and reducing idle assets
Fund growth investments using both own andthird-party capital
Value all stakeholders and return profits toshareholders on the basis of stable dividends,
giving consideration to such factors as
performance and payout ratio• Tens of thousands of business partners(global companies, locally rooted companies
and consumers as customers)• Stakeholders across the value chain,including domestic and overseas suppliers• Various types of education and research
institutions/students• Start-up companies and venture companies• Regional and local governments and public
institutions• NPOs, NGOs and various organizations• Shareholders, individual investors,
institutional investors and analysts• Media, SNS, news organizations and others(Synergize)• Consistently achieve ROE 5.0% or above• FY2021-2024 Cumulative operating cash
flow around 330 billion yen• Sale of strategic shareholdings in FY2021:
14.7 billion yen( gain on sale 11.9 billion yen)
• Plan to acquire 10 billion yen in treasury
stock in FY2022(carry out 30 billion yen buyback in FY2021)
others*As of March 31, 2022 (FY2021)

18

DNP Integrated Report 2022

19

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THE DNP GROUP ʼ S

PROGRESS WITH

CREATION
1 VALUESTORY

2 MEDIUM-TERM
MANAGEMENT PLAN

3 BUSINESSPROMOTION

4 REINFORCING
BUSINESS BASE

5 MANAGEMENTSTRUCTURE

RESULTS/
6 BUSINESSCORPORATE PROFILEDNP ʼS VALUE CREATION PROCESS

Growth trajectory: Corporate history --- Long-term Vision1935

1868: Meiji Restoration---Civilization and enlightenment

1951

1951: Start of five-yearreconstruction plan

2001

1987

1945: End of war---Toward a period of rapid economic growth

1876: Founding of Shueisha,
DNPʼs predecessor

D
N
P

1973

Comprehensive
Printing BusinessInformation Processing
Business ― Information
Communication Business

Dai Nippon Printing Co., Ltd. wasformed in 1935 through a merger
between Shueisha, founded in 1876,
and Nisshin Printing Co., Ltd.,established in 1907.
Starting with Shueisha, whichprescribed “running a business that
contributes to civilization” in its
company prospectus, the Company
carried out business centered on
publication printing for approximately
75 years up to the postwar period.

Amid the dramatic changes in the postwar
period, based on the thinking that “ourcompany can no longer prosper by relying
only on business fields to the present,” theCompany strived to expand its business inanticipation of the ways of life of people in
the future.
Accordingly, the Company promoted“expansion printing” aimed at diversifying
its businesses, especially by means ofapplying and advancing its printing
technologies in addition to stabilizing
labor-management relations, cultivating
customers by strengthening sales
capabilities and improving production
efficiency and quality. DNP significantly
broadened its business domains byexpanding its business, which until thistime was centered on publication printing,to commercial and securities printing aswell as printing for packaging, building
materials and electronics products.
DNP believes that its growth strategy
of expanding business by continuallyhoning such technologies as information
processing, microfabrication, precision
coating and post-processing technologies
to ensure these remain at the cutting edge
will allow DNP to realize its current
business vision “ P&I Innovations.”

Founding

1935

Merger of Shueisha andNisshin Printing toform Dai Nippon Printing

Second Corporate Founding

Broadening business domains
through expansion printing

Information Communication

Adoption of Paris Agreement to combat climate change at COP21

On the occasion of its 125th
anniversary, DNP announced
its Vision that expresses the
direction of DNPʼs growth.
This Vision prescribes ourbusiness philosophy as“contribute to the developmentof a society based on
emergent evolution in the 21st
century,” while designating“ P&I Solution DNP,” which willsolve various issues bycombining our strengths inprinting (P) and information (I),as the concept watchwords forthe entire Vision. In addition,
the initials “ DNP,” which we
had used from the past, willserve as the brand for theentire Group and weaccelerated efforts to raise thevalue of this brand.

2050

2030: Attainmentof SDGs

2021: Holding of the 2020
Tokyo Olympics and Paralympics

2101

2050: Domestic carbon
neutrality accomplished
Toward a moresustainability-conscious
22nd century

2030: Domestic GHG
emissions reduced by 46%

FY2020-FY2022 Medium-term Management Plan moved forward―Moving the Medium-termManagement Plan forward while also clarifying milestones with an eye toward long-term objective

2015: Formulating DNP Group Vision 20152018 (June): Inauguration of Yoshinari Kitajima as President
2020 (March): Formulation of
DNP Group Human Rights Policy
2020 (March): Formulation of
DNP Group Environmental Vision 2050

2025: Resource recycling ratio
increased by 5% and water usage
reduced by 35% (vs. FY2015)

2050: GHG emissions attributable
to the Groupʼs business activities
reduced to practically zero

Sales weighting of super-eco products
increased to 10%2021 (April): Announcement of
the DNP Group Declaration on Health2030: GHG emissions reduced by 40%

Increasing moresustainablecorporate value(emissions attributable to the Groupʼs own business activities/vs. FY2015)

P&I Innovations

2001

Announcement of
DNP Group Vision
for the 21st Century

2030

Corporate Philosophy

Brand Statement

The DNP Group connects individuals and society,and provides new value.
Creating future standards

DNP will continue to create “ future standards” by making unceasing strides toward realizing a sustainable, better society and more well-being lives for people.

2015

Formulation of
DNP Group Vision
2015
Following the establishmentof its Vision in 2001, DNP
established a new Group
Vision amid an increasingly
severe businessenvironment after the
Lehman Brothers
bankruptcy and the Great
East Japan Earthquake.
With its Corporate
Philosophy of “ The DNPGroup connects individuals
and society and provides
new value,” DNP clarified
the social issues that it isuniquely capable of solving
as well as the expectationsof people and expressed
the four business themes it
must address as “ four
growth areas.”

For Realizing Our “Third Corporate Founding”
DNP will now synergize its unrivalled and unique strengths in P&I(Printing & Information) as well as deepen cooperation with its
numerous partners and solve social issues while focusing on thecreation of new value that meets the expectations of people. DNP,
which has continued to “ Take on the challenge of promoting change”
in any era, will deploy the total strengths of All DNP with the entire
Group working as one to attain its “ Third Corporate Founding” andensure this leads to sustainable growth both for DNP and society.

Knowledge andCommunication
A future where people worldwide
can expand opportunities for safe
and secure communications andshare and inherit knowledge

Food and Healthcare
A future where people around theworld no longer have anxieties
about their own lives and can lead
lifelong safe, secure andhigh-quality lives

Lifestyle and Mobility
A comfortable future that safely
and securely protects all living
spaces where people worldwide
are mobile and lead their lives

Environment andEnergyA sustainable future that reduces
environmental impacts and enables
people worldwide to co-exist
harmoniously with the earth

Lifestyle and Industrial Supplies
Electronics

20

P&I Solutions

2025

Global spread of COVID-19

Adoption of Sustainable Development Goals (SDGs)
at the United Nations Summit

2001: Announced “ DNP Group Vision
for the 21st Century ”

Starting from a“Civilized Business”

Founding of Nisshin Printing

2018 2020 2021

1987: Began transforming toward information
processing business

Publication Printing Business1907

2011 (March): Great
East Japan Earthquake

1973: Surpassed U.S.-based R.R. Donnelley & Sons Company tobecome the worldʼs largest comprehensive printing company

1935: Merger of Shueisha andNisshin Printing to form Dai Nippon Printing

Founding of Shueisha

2008: Collapse of
Lehman Brothers

1991: Bursting of
the bubble economy---Toward the “ lost decade”

1907: Founding of Nisshin Printing

1876

2015

Realizing a sustainable,
better society and morewell-being lives

1907

Toward Our “Third Corporate Founding”

1876

Growing as a company
Solving social issues and exceeding peopleʼs expectations
DNP Integrated Report 2022

21

2

PROGRESS WITH

THE DNP GROUP ʼ S

CREATION
1 VALUESTORYTOP MESSAGE

2 MEDIUM-TERM
MANAGEMENT PLAN

3 BUSINESSPROMOTION

4 REINFORCING
BUSINESS BASE

5 MANAGEMENTSTRUCTURE

RESULTS/
6 BUSINESSCORPORATE PROFILEPROGRESS WITH MEDIUM-TERM MANAGEMENT PLAN

Business
Strategy

Basic strategies ofthe Medium-termManagement Plan

– Medium-termManagement Plan –Basic Strategy 1

Create value through P&I Innovations
１ - 1

1. Social issues andpeopleʼs expectations

Re-evaluate the value created by businesses and establish focus businesses interms of four growth areas using the two axes of profitability and market growthpotential.

2. P&I
Innovations

1

１ - 2

Provide value optimized to each country and region
Provide value that is optimized not only to Japan but also to individual countries andregions and that is fined-tuned to address public expectations and social issues.

2

１ - 3

Business promotion

Increase value using all available restructuring approaches
Improve profitability by optimizing management resources through the selection andfocus of businesses according to the value created by each business.

All DNP

Basic Strategy 2Strengthen business infrastructure to support growth

Reinforcing business base4

Create value primarily in growth areas

32- 1 Strengthen financial and non-financial capital
Pursue capital strategy aimed at strengthening financial capital and combine
financial capital/non-financial capital to promote integrated management.

4. Strengthening
non-financial capital

Taking the long-term perspective, building on
the achievements of the Medium-termManagement Plan and continuing to provide
essential value to society and people
Hirofumi Hashimoto
Managing Director

3. Strengthening
financial basePrinciples on page 2.)

1,401.9

Net sales
Operating income
Operating income
marginROE

1,350.0

1,335.4

4.0%

3.7%
49.5

FY2019 results

FY2020 results

7.3％

2.6％

New revenue recognition standard will reduce
sales by around ¥28.3 billion in FY2021.

1,440.0

1,380.0

1,344.1
5.0%

4.9%

66.7

67.0

5.2%

4.2%
57.0
FY2021
initial target

FY2021
results

5.0％

9.1％

75.0

FY2022 forecast

FY2024 plan

6.0％

Continuously achieve
5.0% or above

Composition of focus businesses
Net sales
Existing
businesses
Focus
businesses
Composition
ratio*Actual amount expanded

Operating income

35％

37％

40％

41％

45％

61％

75％

76％

76％

FY2019FY2020

FY2021

FY2022
forecast

FY2024plan

FY2019FY2020

FY2021

FY2022
forecast

72％

FY2024plan

Basic strategies for each segment of the printing business<Segment><Basic Strategy>

Information
Communication

1 Growth strategy: Pursue digital transformation (DX) aimed at adding value to customer experience
2 Restructuring: Downsize paper media production bases

Lifestyle andIndustrial Supplies

1 Growth strategy: Leverage converting technology to strengthen new product development and sales
2 Restructuring: Push ahead with review of low value-added productsElectronics

22

Build robust corporate governance system and structures to increase corporate value.

Management targets (Net sales / operating income / ROE)（ ¥ billion）

2024 targets, we plan to achieve net sales of 1.44 trillion yen,operating income of 75 billion yen and an operating income
margin of 5.2%, while maintaining an ROE of 5.0% or higher. To
achieve these targets, we plan to gradually increase thepercentage of sales from our focused businesses in order toexpand earnings, so that compared to fiscal 2019, in fiscal
2024 net sales increases from 35% to 45%, and operating
income increases from 61% to 72%.
To strengthen our management foundations, there will be aparticular focus on investment in human resources as we utilizefinancial and non-financial capital in an integrated manner. DNP
employees are all professionals, each with their own uniquestrengths, forming an irreplaceable asset. By pursuing morein-depth dialogue with external partners while proactively
combining our strengths, in line with one of our guiding
principles of dialogue and cooperation, we will continue tocreate entirely new and innovative products, services andbusiness models. We will also continue strongly to promote ESG(Environmental, Social and Governance) initiatives and strive tostrengthen and fully implement corporate governance forappropriate and prompt management decisions. (See Guiding- 2 Strengthen corporate governanceManagement targets for the year ending March 31, 2025

56.3

At DNP, we embrace our corporate philosophy of connecting
individuals and society, and providing new value, and throughour business activities are working to achieve a sustainable,
better society and more well-being lives. These value creation
efforts are long term in nature, and we believe it is important for
we ourselves to steadily build upon accomplishments to create abetter future.
Most recently, we are pursuing a three-year medium-term
management plan from fiscal 2020 to fiscal 2022. We are
implementing a wide range of measures in keeping with twobasic strategies under the plan, to create value through P&I
Innovations, and to strengthen the business infrastructure to
support growth.
With respect to value creation, we are closely examining thevalue created by each business based on profitability and market
growth potential, and allocating our management resources toconcentrate on focused businesses related to IoT andnext-generation communications, data distribution, mobility andthe environment. We are also working on all available structuralreforms to create greater value, including in existing businesses,
to build a strong business portfolio for the entire Group.
As an example of management indicators, in terms of fiscal

2

1 Growth strategy: Develop and supply key components that contribute to sophisticated integration of real and digital
2 Restructuring: Rebuild businesses where competitiveness has declined

DNP Integrated Report 2022

23

TOP MESSAGE

PROGRESS WITH

THE DNP GROUP ʼ S

CREATION
1 VALUESTORY

2 MEDIUM-TERM
MANAGEMENT PLAN

3 BUSINESSPROMOTION

4 REINFORCING
BUSINESS BASE

5 MANAGEMENTSTRUCTURE

RESULTS/
6 BUSINESSCORPORATE PROFILEPROGRESS WITH MEDIUM-TERM MANAGEMENT PLAN

Create value through P&I Innovations

Basic Strategy 1

1 -1

Create value primarily in growth areas

DNP established focused businesses that are promising interms of high profitability and market growth, and isaccelerating related business expansion through a focusedand optimal allocation of management resources. The
following were the main related initiatives in fiscal 2021.
In the IoT and next-generation communications business,
we advanced the development and supply of next-generation
semiconductor products manufactured using nanoimprint
lithography, for fifth-generation mobile communications
system (5G) applications. Nanoimprint lithography cuts costs
and the amount of energy consumed during semiconductor
production using it is much less than that used by theconventional method, thereby contributing to the achievementof a decarbonized society.
In the data distribution-related business, we established
NTT EDX Co., Ltd. in October 2021 as a joint investor withNTT West and NTT East with the aim of advancing higher
education. With a focus on electronic textbooks and otherteaching materials, we provide various services and support
the digitization and streamlining of publisher and bookstore
operations. We also use our “ Ki-Rei-i” ID photo printing

machine to provide an electronic application service forobtaining Japanese government “My Number” ID cards. In
addition, we promote digital transformation (DX)governmental services.
In the mobility business, we developed products andservices for the next-generation mobility society, which
requires reduced environmental impact, improved energy
efficiency, higher information security and comfort. In
addition to battery pouches for lithium-ion batteries used inelectric vehicles (EVs), we expanded our business indecorative films and panels for enhancing the design andfunction of interior and exterior materials.
In the environment-related business, DNP strengthened
the development of mono-material packaging materials,
which are made of a single material for enhanced
recyclability, and developed polypropylene (PP) film packaging
with improved oxygen and water vapor barrier properties andmetallic designs using DNP's proprietary technology. The
new product was adopted by a global consumer goods
manufacturer in June 2021 and launched in the Southeast
Asian market.

Knowledge and Communication
BPO
Authentication/
security
Information
trust banks
Educational
business

Data
distribution-related
business

Electronics

Lifestyle and Industrial Supplies
Lifestyle and Mobility

Optical films
Metal masks

Photo media/
servicecreation

IoT and next-generation
communications businessNew 5G-related products

AfricaInformation
Communication

Lifestyle andIndustrial Supplies

Electronics

Eco-friendly packaging

Food and Healthcare

Industrial highperformance materials

24

Main businesses
expanded in FY2021

Latin
America

Provides globallycompetitive products

Photography/
photo-printing
products andservices

Imaging Communication Business

High-performance Film
Business, etc.
(Battery pouches, barrier films,
photovoltaic module components,
interior and exterior decorative
materials for living spaces, etc.)

Battery pouches
for lithium-ion
batteries

Display Components BusinessElectronic Devices Business

Optical films
for displays

290.2

202.5

14.4%

226.7

238.4 246.2 245.8
21.6%

16.1%

18.4%
17.0% 17.6%

2024

Increase value using all available restructuring approaches

A wide range of structural reforms will be promoted
throughout the Group with the aim of building a strong
business portfolio and improving profitability. For example, in
the Information Communication segment, paper media
production bases will be downsized, in the Lifestyle andIndustrial Supplies segment, low value-added products will be
reviewed and bases reorganized, and in the Electronics

segment, productivity will be significantly improved throughthe use of data analysis, robots and AI. By allocating thehuman capital, R&D investment, land, equipment and othermanagement resources generated through these efforts tofocus businesses having high market growth potential andprofitability, we will transform our business structure andfurther enhance our business competitiveness.

Examples of principal structural reforms in each business segment

Mobilitybusiness

Strategy: Pursue selectivity and focus

Information
Communication

Downsizing
printed media
production bases

Expand data
distribution-related business
Expand BPO locations

Environment and Energy

ratio of overseas sales to total sales for the fiscal year ended
March 31, 2022 was 21.6%, up 3.2% from the preceding year.
As well as working to further expand businesses in which
we hold the world's top market share, such as battery
pouches for lithium-ion batteries, metal masks for
manufacturing OLED displays, optical films for displays andOverseas sales (¥ billion) and% of total sales(FY)

Provide value optimized to each country and region

DNP is developing its business globally in a manner that
accurately ascertains the characteristics of each country andregion and the issues and needs of the people living there, andprovides individually optimized products and services.
Approximately one-eighth of the Groupʼs employees arepromoting diverse businesses at overseas locations, and theNorth
America

Mobility interior andexterior materials

Battery pouches forlithium-ion batteries

Medical/healthcareAsia

2016 2017 2018 2019 2020 2021

Lifestyle andIndustrial
Supplies

1 -2

Europe(Vapor chambers, transparent
antennas, etc.)

Environmentrelated
businessappropriate labor environment, we will continue to fulfill oursocial responsibilities in Japan and overseas, which will leadto our long-term development. At the same time, taking
change as an opportunity, we will make further efforts tostrengthen our structure, such as by exploring overseas
markets and acquiring cutting-edge technologies, and makeevery effort to provide further value by enhancing synergies.

Main businesses undertaken in the global market

1 -3

Focus businesses in four growth areas
Information Communication

dye-sublimation thermal transfer printing media for photo
prints, we will focus on creating new businesses to provide
essential basic value to people the world over.
Our Sustainability Committee, which reports directly tothe president, analyzes and manages the environmental,social and economic risks that have emerged in recent years
around the world to ensure proper management. In addition
to giving consideration to human rights and providing an

Electronics

Review low
value-added
products andrestructurebusiness locations

Downsize
color filter
business

Expand production lines
for battery pouches,barrier films, eco-friendly
packaging materials, etc.

Specific initiatives and plans
Downsizing printed media production bases• Optimization of printed media-related business locations

Expanding data distribution-related businesses• Establishment of NTT EDX; strengthening of Authentication and
Security business

Review low value-added products andrestructure business locations• Restructure Kansai area operating locations(consolidate within Tanabe Plant in Kyoto)

Expanding production lines for lithium-ion battery pouches• Add a production line at Tsuruse Plant in Saitama and add a newslit processing line in Denmark Plant (planned); further investments
in Japan and abroad after that are under consideration

Expand optical film
production lines

Downsize color filter business

Invest in Electronic
Devices business

Investing in Electronic Devices business• Close and sell Himeji Plant in Hyogo• Increase capital investment in photomasks and lead frames(planned)

DNP Integrated Report 2022

25

TOP MESSAGE

THE DNP GROUP ʼ S

CREATION
1 VALUESTORYPROGRESS WITH

2 MEDIUM-TERM
MANAGEMENT PLAN

3 BUSINESSPROMOTION

4 REINFORCING
BUSINESS BASE

5 MANAGEMENTSTRUCTURE

RESULTS/
6 BUSINESSCORPORATE PROFILEPROGRESS WITH MEDIUM-TERM MANAGEMENT PLAN

Basic Strategy 2

2 -1

Strengthen business infrastructure to support growth

Strengthen financial and non-financial capital

DNP will strengthen its business infrastructure bycomprehensively utilizing financial and non-financial capitalfor medium- and long-term growth. In addition to promoting
capital policies that support business growth, we will focus
on strengthening and expanding five types of non-financial
capital, namely human capital, intellectual capital,
manufactured capital, natural capital and social/relationshipcapital, and formulate and implement specific action plans.
In terms of capital policy, we will pursue investment infocused businesses in conjunction with Basic Policy 1. During
our medium-term management plan for the three years up to
fiscal 2022, we plan to make annual investments on theorder of 100 billion yen. DNP will finance this by using both2 -2Financial
Strategy

its own funds and third-party capital, reducing idle assets
and selling strategic shareholdings. We will also take acomprehensive approach to improving capital efficiency,
stabilizing our financial base and returning profits toshareholders.
With regard to non-financial capital, we will strengthen
our investment in our most important human resources.
In addition, we will expand intellectual capital, including
technology, R&D and patents, and strengthen
environment-related initiatives aimed at further coexistence
between business activities and the global environment. We
will use these measures to foster an organizational culturethat continues to take on the challenge of value creation.

Strengthen corporate governance

DNP works to strengthen corporate governance as one of its
crucial management issues. We have built and are operating
a robust system for prompt and accurate management
decision-making and business execution, as well as formonitoring and auditing these functions. It is also important
to increase the diversity of the management team. At theGeneral Meeting of Shareholders in June 2022, as in theprevious year, 12 directors, including one woman, were
elected, of which four were outside directors who meet thecriteria for independence. The effectiveness of the Board of
Directors is also analyzed and evaluated once a year, and theresults of the analysis are discussed by outside directors andshared with the Board of Directors.
To ensure that each and every employee fulfills his or hersocial responsibilities, we promote behavior based on the DNPGroup Code of Conduct and foster compliance awarenessthrough training and other means. In April 2022, in order toenhance environmental, social and economic sustainability andpromote DNP's sustainable growth, we reorganized thestructure of the Sustainability Committee, which is composedof the company president (chairman), the Senior Managing
Director (vice-chairman) and directors and corporate officers
with assigned duties at the Head Office. Based on therecognition that variable factors identified as risks are at thesame time opportunities for business expansion, we will linkthem to the creation of new value that will also contribute to
the achievement of the SDGs.
DNP's efforts in these areas of ESG (Environmental,
Social and Governance) are highly regarded outside thecompany, as shown, for example, by DNPʼs selection for the
FTSE4Good Global Index, a global socially responsible
investment (SRI) index, for 22 consecutive years. In addition,
DNP is the only company in the printing industry to be
selected as a component of all five ESG indices managed by
the General Pension Investment Fund (GPIF) (as of July2022).

TOPIC
Promote value creation
programs that accelerate
P&I Innovations
DNP will implement the Value
Creation Program in which it
promotes the All-DNP initiativethat deploys our total strengths
synergizing the strengths of theentire Group, discovers “seeds ofvalue,” repeats value hypothesis
verifications and builds optimalbusiness models. It is also
important to expand profits, whichis the price paid for value, and bypromoting this program, we will
increase corporate value over the
medium to long term.
26

Value hypothesis

Business model

Profits

Potential value

Method for realizing

Price paid for valueof products and services

Ability to discover | Seeds of value

value from products and services
1(barometer of value)

Customer

Ability to change | Business hypothesis

2

Value proposition

Ability to test | Verify hypotheses

3

Delivery method

4

Earnings model

Profits in return forresponding to peopleʼs
expectations andproviding new value that
resolves social issues

Through the optimal allocation of management
capital, we will accelerate the expansion of businessand enhance our cash generating capability andasset efficiency to maximize corporate value.
Masafumi Kuroyanagi
Managing Director

To continue to create value over the long term, the DNP Groupneeds to continuously strengthen its management foundations.
We strive to practice integrated management that combines
the strengths of financial and non-financial capital, and here I
would like to explain in particular about our financial strategy
focused on capital policy initiatives.
We are currently implementing a capital policy based on
two pillars consisting of “improving ROE” and “shareholder
returns.” We will increase corporate value by undertaking
business activities that take a long-term perspective while
returning these results to all stakeholders, including ourshareholders.
As part of efforts toward “improving ROE,” we will invest in
focus businesses with high profitability and market growthpotential and work to create new value to expand operating
cash flow. In fiscal 2021, due also to the recording ofextraordinary gains that included gain on revision of retirement
benefit plan and gain on sale of investment securities, net
income attributable to parent company shareholders increased
287.4% from the previous year to 97.1 billion yen and ROE was
9.1%. We aim to consistently achieve ROE of at least 5.0% in
the run-up to fiscal 2024.

Furthermore, we will manage targets via segment ROA andundertake a broad review of the assets we hold domesticallyand overseas and reduce any idle assets. We will also continue
efforts to decrease strategic shareholdings, for which we haveachieved significant progress in recent years, as we further
improve asset efficiency. Moreover, we will focus efforts on thestrengthening of financial capital. In addition to making every
effort to enhance a stable financial position backed by retained
earnings, we will use both our own and low-interest third-party
capital while working to reduce capital costs.
Regarding “shareholder returns,” which is anotherimportant pillar, under our basic policy of stable dividends wewill issue dividends that take into account factors such as
earnings and dividend payout ratio. We will also consider sharebuybacks depending on the business environment and otherfactors.
Through these capital policy initiatives, DNP will strive tomaximize corporate value in a way that contributes to therealization of a sustainable, better society and well-being lives
for people.

Deploying the total strengths of All DNP(Combining P&I strengths leveraging marketing perspective × partner alliances)

DNP Integrated Report 2022

27

PROGRESS WITH

THE DNP GROUP ʼ S

CREATION
1 VALUESTORYTOP MESSAGE

2 MEDIUM-TERM
MANAGEMENT PLAN

3 BUSINESSPROMOTION

4 REINFORCING
BUSINESS BASE

5 MANAGEMENTSTRUCTURE

RESULTS/
6 BUSINESSCORPORATE PROFILE

Financial Strategy

Capital policy initiatives to maximize corporate value ( FY2024)

Executing optimal cash allocation

Generate cash
FY2021-2024 Cumulative operating
cash flow around ¥330 billion

Improving
ROE

Consistently
achieve

ROE 5.0%
or above

Maximizing
enterprise
value

Creating
value through“P&I
Innovations”
Boost
asset
efficiency
Strengthen
financial
capitalShareholder
returns

Growth investment

FY2021-2024

Stable dividends
Share buybacks¥480 billion

Targeted investment in focus businesses in four growth areas

Additional shareholder returns■ Provide value optimized to each country and region■ Increase value using all available restructuring approaches

Turning around low-profitability/growth businesses,
restructuring business locations

Shareholder returns

Generate cash of at least■ Create value primarily in growth areas

Streamlining existing
businesses

Generate operating cash flow
Sale of strategic
shareholdings
in FY2021¥14.7 billion（Gain on sale
¥11.9 billion）■ Managing targets via segment ROA■ Reducing strategic shareholdings¥330 billion

FY2022¥10 billion

additional buyback

Investment in growth areas(¥30 billion buyback in FY2021)

Targeted investment in focus
businesses in four growth areas

Use of third-party capital
Reduce strategic shareholdings,
idle assets, etc.

Strengthening business base¥150 billion■ Boosting asset efficiency by reducing idle assets

Creating value by promoting DX■ Fund growth investments using both own andthird-party capital

Returning value to all stakeholders■ Stable financial position backed by retained earnings■ Return profits to shareholders via stable dividends,

consider earnings/payout ratio■ Share buybacks to increase EPS

DNP constantly works to strengthen relationships with andreturn value to all stakeholders, including shareholders,
employees and their families, client companies andconsumers, business partners and local communities.
In doing so, we especially regard the return of profits toshareholders as one of our key management policies and will
return profits to shareholders based on our basic policy ofstable dividends while considering earnings, dividend payout
ratio and other factors. We will also look closely at theStrengthening initiatives for “improving ROE”
In promoting our medium-term management plan, DNP
formulates and implements a capital policy based on“improving ROE” and “returning profits to shareholders.” Inparticular, for increasing the ROE numerator, we will promote
Basic Strategy 1, Create value through “ P&I Innovations.”
Through targeted investment in focus businesses such as IoT
and next-generation communications business, data
distribution-related business, mobility business andCash allocation strategy

environment-related business, we plan for cumulative
operating cash flow of around 330 billion yen from fiscal
2021 to fiscal 2024. With regard to “boost asset efficiency”
and “strengthen financial capital,” DNP will minimize thenegative impact of risks while turning these into business
opportunities.by anticipating rapidly changing domestic andinternational circumstances and flexibly combining various
measures.

Trends in listed stockholdings

management environment and business investment to makeappropriate decisions regarding the buyback and retirement oftreasury stock. For fiscal 2022, we have announced thebuyback of treasury stock with an upper limit of 10 billion yen.
In addition, we continuously undertake reviews to optimize
our strategic shareholdings. The number of listed issues heldby DNP has been reduced by 140 issues (-52%) to 129 issues
from 269 issues held during the seven years from the end of
fiscal 2014.

Shareholder return policy and trend in results(¥ billion)(Stock name)280■ Total dividends paid

100

269

80

260

250
240

■ Total acquisition price of buyback

237
222

220

-140 issues (-52%),

60

compared to the end of March
2015, i.e. compared to before
application of the CG code

40

204

200

20
0

191

FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

Dividend payout ratio(consolidated)

79%

71%

ー

27%

72%

18%

26%

Total return ratio

138%

125%

ー

113%

72%

49%

40%

Shareholder
return policy

Return profits to shareholders via stable dividends, consider earnings and other factors

Dividends

Factor in payout ratio based on earnings

Buyback

Appropriate judgement based on business conditions and business investments

Retirement

Retire treasury stock based on ratio of treasury stock held

180
160

Generating cash and optimum allocation for growth investment and shareholder returns
DNP will work to generate cash by increasing operating cash
flow through value creation and improving capital efficiency.
By utilizing third-party capital in addition to our own equity
capital, we will concretely progress with reducing capitalcosts and optimizing shareholdersʼ equity.
We have also established a cash allocation strategy which28

promotes the optimum allocation toward growth investment
and shareholder returns, and are pursuing a number of
initiatives in this area. From fiscal 2021 to fiscal 2024, we
aim to generate cash of at least 480 billion yen, and plan toallocate this for investment in focus businesses in four growthareas and efforts to strengthen our management foundations.

150
140

129

120
100
2014

2015 2016

2017

2018

2019

2020

2021

Target*(Fiscal year-end)

In June 2015, the Tokyo Stock Exchange started
application of Japan's corporate governance (CG) code.

* Details of buyback(FY2022 Target)• Stock to be acquired: Common stock• Number of shares: Up to 6 million shares,
equivalent to 2.23% of shares outstanding
excluding treasury stock• Total acquisition price: Up to ¥10 billion• Purchase period: May 16,
2022-December 20, 2022

DNP Integrated Report 2022

29

TOP MESSAGE

Human
CapitalStrategy

Improve corporate
value by accelerating
investments in humanresources in line with
our Human Capital Policy.
Kenji Miya

Senior Managing Director

THE DNP GROUP S

CREATION
1 VALUESTORY

Key issues 1

PROGRESS WITH

2 MEDIUM-TERM
MANAGEMENT PLAN

3 BUSINESSPROMOTION

4 REINFORCING
BUSINESS BASE

DNP has been accelerating investments in humanresources that encompasses the creation of such appropriate
systems to focus on initiatives for reinforcing our humancapital. We have conducted these initiatives based on a belief
that respecting employees leads to the respected employees
driving corporate growth and enhancing society. In fiscal
2022, we established this belief, which represents the DNPGroup s universal and basic approach to human capital, in
the form of our Human Capital Policy.
We also give first priority to respecting our employees
because we are determined to strengthen our human capitalso that each and every one of our employees will develop
their strengths and grow further in their roles both within andoutside the company. We will organize our policies, visions
and declarations related to people while placing this policy at
the top and endeavor to reinforce and maximize our humancapital in a strategic, integrated manner for enhancing
corporate value. The DNP Group will continue cultivating abetter corporate culture and effectively invest in people tohelp promote diverse individuals and human resources.

RESULTS/
6 BUSINESSCORPORATE PROFILE

Strengthen human resources and organizations to promote value creation
through P&I innovations

Utilizing human resources to realize P&I Innovations of our business vision
DNP is building a strong business portfolio by optimally
allocating management resources to its focused businessesof IoT and next-generation communications, data distribution,
mobility and the environment. To enhance the effectivenessof these efforts, we have introduced employment-related
systems that proactively incorporate company outsiders
perspectives. We will accelerate the creation of new value by
having the right people in the right positions with a diversityof personalities, skills and know-how, including highly
specialized personnel, management personnel and personnel
skilled in launching new businesses.

• Professional staff system： This was introduced in April 2019 and treats personnel
with specific expertise and highly advanced knowledge and skills based onstandards and frameworks that differ from the current system, with the aim of
recruiting high-quality external human resources.
• Associate staff system: A system to determine the appropriate treatment to be
applied for a set period when hiring personnel who exceed the current standards
and frameworks for mid-career hires.

6

FY2019FY20204

Professional staff
Associate staff

2
1
11

FY2021Each and every employee is a key base for the DNP Group to
create new value toward a sustainable and better future. To
support these employees and help them change their awarenessand behavior, we are working to create a personnel system thatis attractive from both internal and external perspectives,
keeping in mind the changes in society as a whole.
For three years since fiscal 2019, we have particularly
concentrated on reforming our personnel systems. As thefirst step in fiscal 2019, we enhanced our promotion systems
mainly targeting young employees and human resources withvarying careers both within and outside the Group and carriedout a system reform to permit certain side jobs or dual
employment. The second step in fiscal 2020 involved
facilitating a reform of our organizational culture, including
revisions of our award systems, as well as updating a system
to respond to the concept of equal pay for equal work andone to support the work styles of senior employees. In fiscal
2021, which marked the third year of our efforts, we again
analyzed our work and management styles and implemented
diverse and specific personnel systems that will accelerate
new value creation, such as a dual-ladder career system for
middle-ranking executives.

5 MANAGEMENTSTRUCTURE

2(persons)

Change to new management style
DNP has always emphasized management that makes themost of individuality and the enhancements of teamcapabilities. In April 2021, we introduced the DNP Value
Objectives (DVO) system to respond to drastic changes in thebusiness environment. In addition to the usual individual MBO(Management by Objectives & Self Control) system, we haveincorporated the elements of OKR (Objectives & Key Results)
in which teams work together to solve problems. Team goals
are set in a bottom-up manner to visualize results andprocesses and foster team awareness. We are striving tostrengthen team management, build relationships of trust andcreate new value through meetings at the start and end ofwork and small-group 1-on-1 meetings. From fiscal 2022,
we are promoting the DVO Penetration Program to spreadthis system throughout the company and establish a new
management style.

A training text that uses Manga to explain the DVO system

Human Capital Policy
Respecting employees leads to the respected employees
driving corporate growth and enhancing society

Human resources development that brings out individual strengths

Nurturing human capital who can be active in society (both within and outside DNP)

Labor andManagement
Joint
Declaration

30

Human Capital Operational Mission

DNP Group Safety and Health Charter

DNP Group Diversity Declaration

DNP Group Declaration on Health

Human Resources Development Vision

DNP Group Welfare Vision

DNP Group
Human Rights
Policy*Including stakeholders
other than employees

DNP established a Human Resources Development Vision for
ensuring that each employee acquires specialized knowledge
and skills as an independent individual, achieves businessvisions, and strives for personal growth and self-actualization.
We are focused on building better environments, structuresand organizations that enable employees to maximize theircapabilities, and have developed a range of training andlearning programs that include level-specific, selective andelective training, as well as a learning environment based ona learning management system. As an initiative to develop
future management candidates, we are also conducting
strategic succession training, such as by using ELM(Executive Leadership & Management) programs.

DNP Integrated Report 2022

31

TOP MESSAGE

THE DNP GROUP ʼ S

CREATION
1 VALUESTORYPROGRESS WITH

2 MEDIUM-TERM
MANAGEMENT PLAN

3 BUSINESSPROMOTION

4 REINFORCING
BUSINESS BASE

5 MANAGEMENTSTRUCTURE

RESULTS/
6 BUSINESSCORPORATE PROFILE

Human Capital Strategy

Key issues 2

Promoting diversity and inclusion essential for creating value diversity

Key issues 3

Promoting D&I as a driving force for growthWith DNP providing value to diverse people living in diverse
societies in Japan and abroad, promoting DNP's own diversity
and inclusion (D&I) initiatives is an essential management
issue. Reflecting DNPʼs constant awareness of theimportance of D&I in the conduct of its business, in 2020 itissued the DNP Group Diversity Declaration as a commitment
from top management in order to strongly convey this stanceboth inside and outside the company. In addition, we areaccelerating D&I initiatives throughout the Group, including
by operating a D&I Promotion Committee consisting of top
executives from each department and Group company.
Formerly we provided products and services to clientcompanies by utilizing the individual strengths within eachorganization. Today, however, we are working to resolve
social issues and create value that meets people's
expectations by combining the diverse strengths that exist
within the Group. The possibilities for such combinations areendless, and we will use the total strengths of All DNP as adriving force for growth.

Increasing health management and health measures

Employee D&I perception level
ResultImproved from 56.3% in FY2019 to 78 % in FY2021

DNP Group Diversity Declaration

1. We will take the lead in working to promote
diversity and inclusion.
2. We will transform the awareness of managers intoa "Dialogue style" that utilizes the differences ofeach and every person as strengths.
3. We will make ourselves a company where eachand every employee can actively take onchallenges and create new value.
July 17, 2020
Yoshinari Kitajima, President

For more on D&I, refer to the message on
pages 66-67 by board director Minako Miyama.

Promotion of health management and health measures to increase
employee happiness

In April 2021, we formulated and disseminated the DNPGroup Declaration on Health as a top commitment. In
accordance with this declaration, we will focus not only on
physical and mental health, but also on efforts that include
developing a positive mind and building psychologicalsafety in employees. As one of our important management
strategies, investing in the health of our employees will not
only maintain and improve their health, but will also
improve their vitality, creativity and productivity, thereby
revitalizing the organization. By building a vibrant team, we
will improve corporate value and link this to the happinessof each and every employee.

DNP Group Declaration on Health
The DNP Group aims to embody the DNP Group Safety and HealthCharter by promoting the heath management and health-driven
measures that boost the happiness of our employees, based on thefollowing three perspectives:
1. Maintaining and improving the physical and mental healthof our employees and their families.
2. Developing the psychological capital, or positive mind ofdiverse individuals or human resources.
3. Building psychological safety, or trust-based relationships
in our individual workplaces and teams.
With this declaration in mind we aim to achieve improved corporate value.
April 1, 2021
Yoshinari Kitajima, President

TOPIC
DNP has been recognized as a Certified Health & Productivity Management Outstanding Organization (White 500)
(sponsored by Nippon Kenko Kaigi*), which certifies corporations that strategically address employee health from amanagerial perspective. DNP has been highly evaluated for providing healthy menus in employee cafeterias nationwide
and holding regular in-house sporting events and seminars on health measurements and food and health, andpromoting a health education model that includes the use of sports facilities.
* Nippon Kenko Kaigi: An association consisting of leaders in the business & medical sector and local municipalities

Increasing engagement

Investing diverse capabilities in focus businesses
To create new value, it is becoming increasingly important to
optimally allocate human capital mainly in focus businesses
in four growth areas. We are also promoting the In-House
Recruiting System that maximizes the strengths of diverse
employees by aiming for optimal matching between humanresources and work operations. Under this system, over 400
employees have been transferred in the past 10 years, andmore than 150 in the past 3 years. The system provides anopportunity for employees to become aware of their own
experience and capabilities, and to learn new things, leading
to autonomous career development as the business expands.
We are also focusing on attracting outside humanresources to increase the pace and effectiveness of value
creation. At the same time, in fiscal 2021 we began
32

recruiting employees who wish to be transferred tocompanies outside the DNP Group, providing an opportunity
for them to gain experience, skills and a broader perspectivethat cannot be obtained solely within the Group. For DNP, italso strengthens partnerships with the external companies
concerned.

Utilization of In-House Recruiting System
Result152 employees transferred in the last 3 years, and419 employees over the past 10 years

DNP has been promoting initiatives to increase employee
engagement, which represents each employeeʼs willingness
to contribute to a company, organization or work. By doing
so, we intend to improve labor productivity, create diverse
value, cultivate employeesʼ awareness that they help society
and people through their work and encourage them to takeaction in this regard.
In fiscal 2021, in conjunction with the DNP Group

Declaration on Health, we launched an engagement survey tovisualize the state of individual engagement and the state ofteams. We will also utilize the survey to visualize issues andother factors in each organization, promote employeesʼ
self-understanding and mutual understanding throughdialogue to increase their motivation and encourage teams toachieve their expected results.
S TE P 1
G o a ls a n do bje c ti ve s▼
-W hat th e team wan ts to-Teamʼs vi si
be; an don

TOPIC
DNP started using Atrae, Inc.ʼs survey tool,
Wevox, in June 2021, and in November
expanded the survey target to cover theentire Group. Each month all employees
answer a survey (a simple questionnaire) on
the Altrae website. Even in workplaces where
survey responders donʼt use a computer aspart of their jobs, responses can be made by
BYOD (Bring Your Own Device), utilizing
shared devices or personal terminals. This
allows visualization and verification of teamand workplace conditions, as well as
relationships between companies,
organizations and teams.

S TE P 2
to ac hi evego al s/ob je
ct ives
To make the vision a reality
-W hat is im▼po-W hat do th rt an t fo r th e te am?
S TE P 3
ey wan t to improve?
Review the▼Hcurr e n t si tu
ow to p re sea ti o nte rms o f W n t it in-D aily ac tio
ns
evox
-C om
munic at
-M an ag em io ns
en tTeam dialogue based on
psychological safety
DNP Integrated Report 2022

33

TOP MESSAGE

PROGRESS WITH

THE DNP GROUP ʼ S

CREATION
1 VALUESTORY

2 MEDIUM-TERM
MANAGEMENT PLAN

3 BUSINESSPROMOTION

4 REINFORCING
BUSINESS BASE

5 MANAGEMENTSTRUCTURE

RESULTS/
6 BUSINESSCORPORATE PROFILE

Long-term value creation by strengthening and expanding intellectual capital (technology, R&D/intellectual property-related)Intellectual
CapitalStrategy

Input

Business model x technology/R&D/
intellectual property strategy

OutputIntellectual capital

DNPʼs Value Creation Process

New value creation

1. Social issues
and peopleʼs
expectations

Unique strengths of
P&I(printing and information)

Reinforcing business baseStrategic acquisition of
intellectual property

1&

All DNP
4

Sales, planning, manufacturing andmanagement

3

4. Strengthening
non-financial capital

Collaboration with various partners

3. Strengthening
financial base

Patent rights: 11,726
Design rights: 1,374
Trademark rights: 1,288(Fiscal year ended March 2022)

In order to create new values, we integrate“ technology/R&D activities” and “ businessdevelopment activities” with “strategic intellectual
property acquisition” that supports those activities.

Other
non-financial capital
Financial capital

OutcomeBusiness Development
strategies

R&D investment:

33.1 billion yen

Future standards

strategies

The better future of peopleʼs
expectation where various
issues have been resolvedIntellectual
property(Fiscal year ended March 2022)

Masato Yamaguchi

2

Increasing the value of
products andservices --- Increase insales/income

Business promotion

Technology based on printing processes(planning and design/information
processing/microfabrication/precision
coating/post-processing/materials
development/assessment and analysis)

Realizing a better future with many partners
by leveraging our strengths in technology,
R&D and intellectual property

2. P&I
Innovations

strategies

Senior Managing Director

At DNP we have continually refined our unique P&I (printing andinformation) strengths and developed new technologies andknow-how, while creating a wide variety of products and services
together with many partners. By accumulating suchvalue-creating efforts, we will create a better future in which
diverse issues are resolved and peopleʼs expectations are fulfilled.
Currently, we are strengthening our technology, R&D andcommercialization efforts in the four focus business areas of
IoT and next-generation communications, data distribution,
mobility and environment-related. We are enhancing ourcompetitiveness by combining advanced technologies suchas, for example, operational efficiency using AI (artificial
intelligence) technology, innovative production systems thatutilize manufacturing equipment we develop ourselves andmaterial development using MI (Materials Informatics)*.
We are promoting digital transformation (DX) by advancing
development that combines the strengths of analog and digital,
real and virtual and manufacturing and services. We aredeveloping businesses in many fields which include our “honto”
hybrid bookstore network that handles both paper and digitalbooks and a payment platform that utilizes information security
technology we have cultivated in our smart card business.
We believe that the potential arising from synergizing P&I
strengths is unique to DNP and cannot be imitated by anyother company and leads to endless possibilities. We arepromoting open innovation with partners in Japan and abroad
to further expand the variations in the combinations of ourstrengths.
It is an important management task to strategicallyacquire intellectual property for maximizing the value wecreate and for making our business competitive, sustainable
and resilient. For example, we have acquired many patents
for not only core technologies but also for peripheraltechnologies in businesses where we have acquired theworldʼs top market share, such as battery pouches forlithium-ion batteries, metal masks for manufacturing OLED
displays, optical films and dye-sublimation thermal transfer
printing media for photo prints. DNP has been contributing tosolving social issues, for example, by opening for license someof its patents relating to the Biomatech series of eco-friendly
packaging materials which partially use plant-based raw
materials instead of petroleum-derived materials.
DNP is continually taking on the challenge of innovationin order to create new value. We have a corporate culture thatfully supports human resources who are willing to stand on
the front lines and have the courage and determination tocarve out the future themselves. Failure is the food of
success, and by constantly taking on challenges in uncharted
territory, we will provide essential value to people the world
over and create future standards.

Promote strategic investments forthe next fiscal year and beyond

For strategic acquisition of intellectual property
1

Understanding the intellectual property
that underpins products and services
that gain top market share

DNP views intellectual property as one of the essential assets for value creation.
Especially for products and services that have gained top market share in Japanand internationally, our patent network of core and peripheral technologies has asignificant effect on business development.

2

Setting focus businesses and strategicacquisition of intellectual property

We will strategically build a stronger business portfolio by setting focusedbusinesses with high profitability and market growth potential. To this end, we arepromoting open innovation and focusing on the strategic acquisition of intellectual
property to ensure the superiority of our position.

3

Integrating three strategies tocreate value

We will establish business models exploiting intellectual property for our focusedbusinesses through the value creation process by integrating business strategy,
development strategy and intellectual property strategy. We plan scenarios forcreating value in the long term and strengthen internal and external collaboration.

4

Concentrate resources anddeveloping human resources

Our various resources, including intellectual property, will be concentrated on
focus businesses. We will endeavor to develop human resources who are wellversed in business, technologies, R&D and intellectual property, and we willencourage a culture of managing risk and respecting the rights of others.

5

Strengthen governance andimplement strategies

Intellectual property policies and the state of progress will be shared with management
and other personnel having different responsibilities and utilized in management
decision-making while ensuring effective governance. At the same time, there will
be a further strengthening of cooperation between each business unit and theintellectual property department to accelerate the expansion of focus businesses.

*MI (Materials Informatics): A materials development method utilizing AI and other information sciences34

DNP Integrated Report 2022

35

TOP MESSAGE

THE DNP GROUP ʼ S

CREATION
1 VALUESTORYPROGRESS WITH

2 MEDIUM-TERM
MANAGEMENT PLAN

3 BUSINESSPROMOTION

4 REINFORCING
BUSINESS BASE

5 MANAGEMENTSTRUCTURE

RESULTS/
6 BUSINESSCORPORATE PROFILEIntellectual Capital Strategy

Basic policies and structures for technologies and R&D
For DNP, which has expanded its business domains by applying
and developing technologies cultivated in the printing process,strengthening technology and R&D is a crucial management
issue. We will always take the consumerʼs point of view as we
accurately understand environmental, social and economic
issues, and create optimal solutions.
DNP will further strengthen and deepen the already-strong
technologies that we have cultivated to handle, in a safe andsecure manner, important information entrusted to us bycompanies, organizations and consumers, and will also
accelerate development by promoting collaboration with various
partners, including venture companies, start-ups, students andresearch institutions, and by exploring new technologies. Also,
we will combine our internal and external technologicalstrengths to solve various problems and create new value that
excites people.
As a base for such cultivation, exploration and utilization oftechnologies, we will strengthen AI-based data analysis andthe use of cloud environments, taking advantage of the major
trends in DX.

Expanding patent portfolio related to focus businesses
The DNP Group sets its focus businesses by carefully
examining the environmental, social and economic value thateach business generates based on the growth potential andprofitability of domestic and overseas markets. In the current
Mid-term Management Plan underway, we are concentrating

Utilization oftechnologies
Cultivation oftechnologies

Utilization of technologies
by new businesscreation divisions andexisting businessdivisions in products
and services(No.)

Strengthen alreadystrong technologies
Image processing,massive data processing,information security,
assessment and analysis, etc.

Utilization of the cloud | AI | Data analysis

Exploration of technologies
Partnership with technologicalventure companies

DNP continues to invest over 30 billion yen annually intechnology and R&D, with the amount reaching 33.1 billion
yen in the fiscal year ended March 31, 2022, and 33 billion
yen planned for the current fiscal year ending March 31,
2023. In recent years, in order to solve increasingly diverseand complex problems and create a better future forourselves, we have been increasing the expenditures of the
R&D department at the headquarters based on the All DNP
concept, which combines the strengths of the entire Group.
The breakdown of each division is as follows.

Controlled by Head OfficeLife Design (Packaging)

Lifestyle andIndustrial
Supplies

Electronics

Living Spaces
Mobility
High-performance
Materials
Fine Optronics

New businesses field

R&D and Engineering Management Division

Imaging
Communication

Advanced Business Center

Information Innovation

Research and Business Development Center

Publishing andMedia Services

Technology Development Center

Information
Communication

Head office research Superand development visionframework

Head office development department:

21,927 million yen

Business segment total:
11,219 million yen

Information Communication: 2,215 million yen
Lifestyle and Industrial Supplies: 1,842 million yen
Electronics: 7,162 million yen(As of March 2022)

Research and Development Expenditures0

2013.32014.32015.32016.32017.32018.32019.3

Short-term development
Medium- and long-term development

36

2020.32021.32022.3

0.5

10

15

20

6,281

2,500

2,355
2,041

2,000
1,500

828

1,000

25

30

(Billion yen)
35

30.8
30.8
31.7
31.7
31.4
33.2
33.7
33.6
32.6
33.1

40

1,057

500
0

IoT andnext-generation
communicationsrelated

DNP's technology and R&D divisions are developing
proprietary technologies to solve diverse issues in a wide
range of business fields, with the focus on the four growthareas of “ Knowledge and Communication,” “ Food and
Healthcare,” “ Lifestyle and Mobility” and “ Environment andEnergy.” We are building and operating robust structures thatcreate new value in existing and new businesses bypromoting the combining of technologies and collaboration
with external partners.

Business unit

Patents related to focus businesses:(As of March 2022)

Partnership with outside
research institutes

Technology and R&D Expenditures(Development headquarters)

Patents held: 11,726

IoT and next-generation
communications-related: 2,355
Data distribution-related: 2,041
Mobility-related: 828
Environment-related: 1,057

Technologies and R&D structures

Sales division/fieldmanagement resources on businesses related to IoT andnext-generation communications, data distribution, mobility
and environment. With regard to the acquisition andexpansion of intellectual property, we will further strengthen
our patent portfolio in these four focus businesses.

Data
distributionrelated

Mobilityrelated

Environmentrelated

Potential of DNP functional films --- Toward the realization of a sustainable society
As business areas become borderless on a global
scale, including the convergence of the automotive
industry with the fields of IT and electronics, thepotential of DNPʼs functional films is expanding. DNP
has created products with a wide range of functions
by combining thin-film formation, microfabrication,
lamination and other technologies developed in theprinting business. In addition, DNP will leverage its
proprietary technologies for controlling light, heat,gases, liquids and other substances to create value
by reducing environmental burdens and food loss
and resolving labor shortages.
We have developed eco-friendly products using
plant-derived materials and packaging withenhanced recyclability by using a single material(mono-material). In addition, by using film instead of
conventional metal for packaging lithium-ion
batteries, we have reduced the weight and improved
fuel efficiency for automobiles. DNP has also made it
possible to add designs such as wood grain patterns
and geometric patterns to automobile interiors while
taking advantage of their functionality.
At the same time as we are improving andstrengthening existing technologies, we arecontributing to the realization of a sustainable andbetter society and spiritually enriched lives life byworking on development that looks 10, 50, even 100
years down the road.

Next-generation decorative panels for advanced seamless designs ofautomobile interiors

DNP ʼs Flexible LED Sheet is also expected to be used for growing plants.

DNP Integrated Report 2022

37

TOP MESSAGE

PROGRESS WITH

THE DNP GROUP ʼ S

CREATION
1 VALUESTORY

2 MEDIUM-TERM
MANAGEMENT PLAN

3 BUSINESSPROMOTION

4 REINFORCING
BUSINESS BASE

5 MANAGEMENTSTRUCTURE

RESULTS/
6 BUSINESSCORPORATE PROFILEIntellectual Capital Strategy

Creating new value by combining diverse strengths
We are constantly refining our most advanced technologies,
such microfabrication, precision coating and post-processing,based on printing processes, which is the basis of
manufacturing, as well as planning and design, information
processing, materials development and assessment andanalysis. These in turn create synergies with our know-how insales, planning, manufacturing and other practices, as wellwith our partnersʼ strengths, to create new value.
Especially for the promotion of DX, we will leverage DNPʼshybrid strengths in both digital and analog technology, reality
and virtual reality, manufacturing and services. (See pages 40
and 41.)
We are also strengthening collaboration with diverse
external partners to speed up value creation. There are endlesssuch ways in which our strengths can be combined, and we willcontinue to pursue the many possibilities to achieving a better
future.

Technologies cultivated through printing processes

Project
planning anddesignProduction
andmanufacturing

Combining DNPʼs diverse ideas andknow-how with technology

Information
processing

Microfabrication

DNP plans and designs a process suited to thedesired layout. DNP continuously handles large
volumes of text, still images, videos, voice andother data and arranges data formats and color
tones, and also undertakes processing andstorage. DNP is raising its know-how for safely
and properly handling large volumes of data as
it expands into various types of important
information processing and analysis andsecurity technologies.

Sales

Total
strengths of
All DNPManagement
andoperation

DNPʼs P&I technologies

Project
planning
anddesignTechnologies
andR&D

Combining partnersʼ strengths(technology & ideas & know-how)with DNPʼs strengths

In the printing process, extremely minuteprocessing is performed to ensure thathalftone dots of printed ink are difficult todiscern with the naked eye. We havefurther advanced this technology to enablemicrofabrication for such substrates as
metals, glass and plastics. This technology
is being applied in numerous leading-edge
electronics products and in such fields ashologram anti-counterfeiting and security.

Know-how

Ideas

2

Editing, manuscript
submission and layout

Film making andplatemaking

This includes such processes as planning printed
products, selecting materials and printing methods,
designing processes up to delivery, managing andoperating the manuscript, inputting and processing
text and image data, and creating layout data.

• Film making: Print data is color separated into thefour colors of CMYK* (cyan, magenta, yellow, black)and output on film.

Feedback

Know-how

Precision coating is a technology that forms acoating film on materials with a variety of features,in either single or multilayers, in a homogenous
and uniform manner on the surface of substrates
such as paper as well as plastic film, metal andglass. A variety of functions that include opticaland barrier properties and heat resistance can be
added, giving this technology widespread
applications in such areas as packaging andbuilding materials, photographic print materials,
battery materials and optical films.

1*C (cyan≒blue-green), M (magenta≒red-purple), Y (yellow), K (black)• Platemaking: Data is transcribed from a film made intoa plate to a metal sheet to produce the printing plate.

Printing processes

Effectiveness assessment
Ideas

Precision
coating

Examples of printing such as publication
printing and commercial printing

Product delivery

3

4
Printing(in a narrow
sense)

Etching
processing

38

Precision
engraving

Microfabrication

Photolithography

Coating

Precision
coating

Branding

Molding

HologramMedia
conversion
technologies

Vacuumdeposition

Publishingsolutions

Project
planning
anddesignLivingspace
designFonttechnologies

Information
processing

Image
processing
andrecognition

PackagingdesignSales
promotion

OpticaldesignDataanalysis

Information
security

Bookbinding
processing

EB andUV curing

Dispersion
andcomposition

A printing plate with thenecessary number of colors
is wound around a roll, ink isapplied and high-speed andhigh-precision printing on
paper or other items iscarried out.

Printed paper is stacked and bound tocreate the shape of a book. Box
making and three-dimensional
processing such as for confectionary
packages are also undertaken.

Aseptic
filling
processing

Postprocessing

Plastic
forming

Organicsynthesis
technologies

Laminating
technologies

Transfer
processing

AssaydesignMaterials
development

Pigments
andphotosensitive
materials

Processandmaterial
diagnosis

Assessment
andanalysis

Polymermaterials

Printing

Binding andpost-processing

Technologies

Databaseanalysis

Postprocessing
Process
simulation

Post-processing technologies are derived from various
processes that follow printing, such as bookbinding. These
technologies are applied to make printed products easy to
use and suitable for the purpose of the finished product andare also outstanding for use in three-dimensional processing
such as die cutting and assembly. These technologies haveenabled the creation of packaging for such items as foods,
beverages and daily necessities; the development ofsystems for the aseptic filling of contents; and theinspection, measurement and analysis of various products.

Materials
development

Assessment
andanalysis

This technology, which works tosynthetize, disperse and mix materials,
is applied in the design and manufactureof materials such as ink, adhesives,photosensitive materials, coatings, etc.
In order to maximize performance as theprinting accuracy becomes sophisticatedand products become highly functionaland diversified, the development
process begins with materials.

Through analysis of the manufacturing
process, this technology boosts
productivity, consistency of productquality, improvement of the work
environment and more. Incorporating
elements of theory in the latest sensing
technology, we find mechanisms toidentify the materials and processes
impacting product quality, as well as torealize functionality and performance.

DNP Integrated Report 2022

39

Value Creation throughDigital Transformation (DX)THE DNP GROUP ʼ S

CREATION
1 VALUESTORYPROGRESS WITH

2 MEDIUM-TERM
MANAGEMENT PLAN

3 BUSINESSPROMOTION

4 REINFORCING
BUSINESS BASE

DX promotion system

Basic policy for DX

Information Communication
CDO

The Chief Digital Officer (CDO) appointed by the President supervises
company-wide efforts relating to DX. We have established a full-time DX
promotion and coordination unit at the head office and will strengthen eachbusiness unit and the alliances between the sections in charge of new
businesses development, R&D, information systems and other relevant
divisions within the business unit and implement a range of measures acrossthe entire company leveraging the megatrend of digital transformation.

Lifestyle and Industrial Supplies
Electronics
New business fields

Strengthening the base for the promotion of DX
Internal system infrastructure innovation

Value creation through DX

Creation of new products andservices using digital technologies

Business promotion

Addition of new value to existingproducts and services using
digital technologies

All DNP
Innovation of internal systems
and development and increase of
ICT and DX personnel

Reinforcing
business baseDramatic improvement of
productivity through a shift tosmart factories

We are reforming our internal ICT foundation to improve theprocesses for a range of business operations and working
styles and accelerate value creation with All DNP. This baseuses a highly flexible, agile cloud service with security levels
that are capable of promptly and flexibly responding tochanges in the business environment or individual operations.
Further, we are improving our base as a foundation for data
integration that management can use in decision-making.
Moreover, DNP is working to improve measures fortelecommuting, which has become increasingly entrenched

Creation of DNPʼs unique value through the combination of
hybrid strengths such as digital and analog technologies,
physical and virtual realities and manufacturing and services

Development of a range of businesses related to DX
We are developing a range of businesses in the four growthareas using core technologies such as media conversion,
image processing and recognition, information security, data
analysis and other information processing technologies
developed in the printing process.

In addition to the data distribution-related business inthe Knowledge and Communication area, we are promoting
specific business themes in the Food and Healthcare,
Lifestyle and Mobility and Environment and Energy areas.

as one of many diverse working styles, and its business
continuity plans (BCP) assume the occurrence of wide-areadisasters. To use a safe and secure cloud service at any
time and from anywhere, we are also focusing on zero-trust
networks which do not assume matters such as thataccess from inside the organization is safe. We will
accelerate infrastructure development to strengthen ICT
governance not only in Japan but at overseas bases, withan eye on the recent international situation, geopoliticalrisks and other factors.

Improving human resources to support the promotion of DX
We will improve our ability to create DX-related value acrossthe entire DNP Group by clearly defining ICT personnel andDX personnel, etc., and by supporting career developmentfrom the perspectives of both the individual and theorganization. We will improve investments in humanresources and continuously develop and increase
professional personnel to follow technological innovation,
predict the future and constantly lead other companies.

Understanding ICT personnel and DX personnel

Improving ICT personnel and DX personnel

Definition of ICT personnel

Enhancement of human resource development

ICT
personnel

Human resources who plan, design,develop, operate and maintain
service systems using ICT anddigital technologies

DX
personnel

Human resources who reformbusinesses, services, operations,organizations and corporate cultureusing ICT and digital technologies• Education of all employees to increase their computer literacy for DX• Improvement of educational programs on subjects such as agile
development, cloud-native development and AI, which will provide
important skills for DX and encourage the acquisition ofqualifications• Education of all employees regarding security to increase theirawareness of cyber attacks (development of Plus Security
Personnel who use ICT while performing their primary duties)

Understanding of ICT personnel

Development of systems• Use of IT skill standard and IT skill visualization
service• Centralized management of skills and operational
experience using a talent management systemthat visualizes the strengths of each employee• Introduction of an ICT professional system to secure andappropriately compensate ICT personnel• Adoption of a fixed-term employment system to secure skilledhuman resources from outside the company who have exceptionallyadvanced knowledge and skills in a specific area of expertise
End of FY2021

Hybrid bookstore network“ honto”

40

RESULTS/
6 BUSINESSCORPORATE PROFILEDX promotion and coordination unit
Top management

DNPʼs DX is positioned as “value creation through P&I Innovations,” which combines digital technologies and DNPʼsstrengths. We will build our unique new business model in which people, goods and experiences are linked together
by combining the hybrid strengths of complete opposites, such as digital and analog technologies, physical andvirtual realities and manufacturing and services. Every single employee will take the initiative and contribute to thetotal strength of All DNP, promptly gather and analyze the needs of the diverse companies, other groups andconsumers in Japan and abroad, and develop and provide new value beyond expectations.

5 MANAGEMENTSTRUCTURE

R&D

TOP MESSAGE

Authentication,
security related solutions

PARALLEL CITY
combines physical andvirtual spaces

Regional creation andcommunity development(smart city-related businesses, etc.)

Online healthcare(diagnostic imaging, etc.)

Indicators ofhuman resources
development

ICT personnel/DX personnel
Of the above, individuals that are capable of autonomously performing duties

End of FY2022

5,000

7,500

650

1,900

DNP Integrated Report 2022

41

3

TOP MESSAGE

THE DNP GROUP ʼ S

PROGRESS WITH

CREATION
1 VALUESTORY

2 MEDIUM-TERM
MANAGEMENT PLAN

3 BUSINESSPROMOTION

4 REINFORCING
BUSINESS BASE

5 MANAGEMENTSTRUCTURE

RESULTS/
6 BUSINESSCORPORATE PROFILE

BUSINESS PROMOTION

Information Communication

Financial Highlights and Business Strategies

Medium-term Management Plan

800

752

■ Net sales

FY2021 Financial Highlights(¥ billion)

Net Sales

Operating Income+43.9%

800

2020.32021.32022.3

773.1

721.8

699.0

773.1

721.8

699.0

(¥ billion)
80
60

600

Net sales

400

Operatingincome30.4

Operatingincome margin

3.9 %

19.2

27.6

30.4
19.2

200

2.7 %

40

27.6

20

4.0 %
0
Net sales

2020.32021.32022.30Operatingincome[Net Sales][Operating Income]

Although sales of e-books and library-related services remained strong andthe Imaging Communication Business recovered steadily after a sharp
decline the previous year, overall sales decreased year on year by 3.2%, or
22,816 million yen, due in part to declines in BPO as well as in the area ofprinted media, including publication printing and commercial printing.

Operating income increased 43.9%, or 8,431 million yen compared tothe previous fiscal year due to a significant recovery in the Imaging
Communication Business, cost reductions and progress in businessstructural reforms. The operating income ratio rose 1.3 percentage
points to 4.0%, from 2.7% the previous fiscal year.

FY2021: Impact on business units due to changes in business environment
COVID
pandemic

Information Innovation
Business
Imaging Communication
Business
Publishing
Business

42• Advanced security environment and management system• Expansion of hybrid business combining real and digital etc.

28

29

27

40
20

FY2021
results

FY2022plan

FY2024targets0• Developing new ways to work and live, rapid changes in economic activities• Outflow or infringement of intellectual property, personal information leaks,

Risks
and
opportunities

increase in cyber attacks• Increasing burden of human resource retention due to rapid changes in theemployment situation• Difficulties in procuring materials due to soaring prices of raw materials and■ Operating income

supply chain disruptions etc.

Business Strategies and Main Initiatives toward Achieving Medium-term Goals

Although sales decreased, operating income increased
thanks to a recovery in Imaging Communication andthe effect of cost structure reforms.

-3.2%

printing, and manufacturing to distribution and sales

Strengths

60

200
0

• Maintaining a publishing value chain from information processing to

80

600
400

the customer experience (CX)

• Downsize paper media production bases etc.

(¥ billion)

710

699

• DX for CX: Promote digital transformation aimed at adding value to

Basicpolicies

Targets for net sales andoperating income

Although the impact
continued, there
was a gradualresumption of
economic activity
and a recovery indemand due to the
spread of vaccinesand other factors

Exchange rate
fluctuations

Depreciation of the yen
increases the yen-equivalentvalue of foreign currency
denominated sales andprofits, and boosts export
competitiveness

Surges in prices ofraw materials

Higher prices forprinting paper,
IC chips andother products

Semiconductor
shortages

Sales growthslowed bydifficulties inprocuring IC chips,
photo printers andother equipment

1

Create value primarily in growth areas
Supporting peopleʼs knowledge and contributing
to the development of publishing culture

We will enhance the business of our “honto” hybrid bookstore
network that links an e-commerce website where customers
can buy e-books and paper books with the brick-and-mortar
stores operated by Maruzen Junkudo Bookstores Co., Ltd. In
addition, we will support consumersʼ knowledge through avariety of channels, including the consigned operation oflibraries and the provision of electronic library services.

Expand the scale of business by promoting
hybrid marketing
Utilizing consumer information from both real and digital sales
channels, we will provide the most appropriate information toeach individual using the most appropriate channels andtiming. We will also participate in the overall marketing ofclient companies, from planning to production and operation,
to design optimal communication measures between
companies and consumers to maximize the value of thecustomer experience.
Efficiently solving and improving companyʼsbusiness issues with BPO
We use advanced security environments, expertise in businessdesign and information management and the latest
technologies including AI and RPA* to efficiently solve the
myriad of business issues that companies face, from labor
shortages and work style reforms to business continuity plans(BCP) in anticipation of emergencies. We also provide newvalue through consultation for optimizing business design andmaking operational improvements.
* Robotic Process Automation (RPA): Business automation using robots (software) that utilize AI

Provide unique value and build presence inthe authentication and security businessFor a range of industries, we will provide a robust security
environment that combines information-related and physicalaspects, focusing on services that use digital keys toauthenticate objects and facial recognition for personalauthentication. We will build our presence in the authenticationand security market by leveraging our core technologies andservice development strengths, together with our substantial
experience in collaborating and consulting with partners.

Promoting digital transformation and accelerating
the rollout of new photo services
Utilizing the approximately 7,400 (as of April 2022) networked“ Ki-Re-i” ID photo printing machines installed across Japan,
we will support electronic application procedures for official
certificates and various qualification certification. In addition,
we will expand the use of the “ Ki-Re-i” system to provide
services, such as by collecting on the network photos to create
employee ID cards. We will also provide consumers in Japanand abroad with a range of services that enhance theexperience value of photography at theme parks and events.
Provide value optimized to each country and region
In the field of smart cards, we will work with our business/
capital alliance partners among major card manufacturers in
Vietnam and Indonesia to strengthen our business for ID cards
and financial institutions cards, primarily in the Southeast Asia
region. In the area of photo printing, we will continue to focus
on capturing crossover demand from other printing methods toour dye-sublimation thermal transfer printing media for photo
prints, mainly in emerging markets, and will continue topromote production in optimal locations on a global scale.
2

Enhance corporate value through all manner ofstructural reforms
By using marketing that utilizes bookstore data, leveraging our
publishing value chain and improving logistics throughcollaboration with partners, we will promote manufacturing anddistribution reforms to provide books in a timely manner. In
publication printing and commercial printing, we will optimize
our production system to meet the needs of the shrinking paper
media market. In BPO-related services, in which various
operations are outsourced, we will strive to improve productivity
and quality by utilizing AI, robotic process automation and digital
workflows, and by effectively utilizing our domestic and overseas
bases we will provide services through an optimal system that is
not limited by personnel or location.
3

DNP Integrated Report 2022

43

TOP MESSAGE

Information Communication

THE DNP GROUP ʼ S

CREATION
1 VALUESTORYPROGRESS WITH

2 MEDIUM-TERM
MANAGEMENT PLAN

3 BUSINESSPROMOTION

4 REINFORCING
BUSINESS BASE

5 MANAGEMENTSTRUCTURE

RESULTS/
6 BUSINESSCORPORATE PROFILE

Focus BusinessDriving digital transformation (DX) and providing
customer experience value (CX) that is essential to
new ways of working and living
DNP has been entrusted with important corporate andpersonal information for many years and has been involved in
the digitization of the printing process since the 1970s as
part of our diverse range of business activities. We are also
independently developing technologies for information
security, image processing and recognition, media conversion

and data analysis. In recent years, as the nature ofcommunication has changed and new workstyles and lifestyles
have emerged, we have been promoting DX in ways that only
DNP can offer, by combining technologies we have cultivatedin the printing process with our expertise in sales, planningand manufacturing, and with the strengths of its partners.

For example, in the business process outsourcing (BPO)
business, in addition to 24-hour/365-day support at domestic
and overseas locations, we are helping companies andorganizations to solve their business issues with speed andefficiency by deploying the latest technologies including AI
and RPA to tackle growing social issues from labor shortages
and work style reforms to business continuity plans (BCP) in
anticipation of emergencies.
We also build and operate a variety of advanced
security-related technologies and system infrastructures,leveraging the strength of our smart card business, which
has the largest market share in Japan. We also provide
physical security for offices and factories, such as security

gates and surveillance cameras, and train personnel to beable to respond to cyber attacks. In addition, we are
expanding our authentication and security business such as
by authenticating objects with digital key systems and using
facial recognition for personal authentication.
In the field of education, we provide a distribution systemfor digital textbooks and other materials, and produce
educational materials using video, audio and other media. In
addition, we provide a network service developed to ease theprocess of textbook and teaching material selection byconnecting many publishers, universities, textbook sales
companies and bookstores.

Expansion of educational ICT-related businesses

New company established to advance higher education

Media
conversion
technologies

Data
analysis

Technology forhigh-definition processingof still or moving images,
or for identifying people
and scenery, etc., fromtarget image data

Technology that converts
text, graphics and otherdata into an optimal
format for various
information media
Technology that extracts andorganizes data on consumer
information service usage
trends, purchasing records,
weather, etc., and processes
it in accordance with a
specific purpose（ Business Process Outsourcing ）• IPS(Information Processing Services)• Business support BPO• Sales support BPO

Authentication/security• Authentication andID management• Cyber security• IoT/physical security

Educational ICT• DNP Learning Platform,
Realtendant• Advancement of higher
education by establishing
NTT EDX Co., Ltd.

Features & strengths
Introduction of the latest
technologies such as
WebRTC (Real-Time
Communication), voicerecognition, AI and RPA todevelop a range ofsolutionsFeatures & strengths
Provision of diverse value by
leveraging strengths in service
development, collaboration
with partners, and consulting
such as in planning anddesign, centered on coretechnologies applied anddeveloped from smart card
security technologies.

Features & strengths
Combines the technology
and know-how of the entire
DNP Group with thestrengths of partnercompanies to develop avariety of services thatleverage ourcomprehensive strengths.

Future initiatives

Image
processing
andrecognition

Technology that has
evolved from authentication
to identify individuals andperform encryption for
secure transfer data

Main products and services

Information processing

Core technologies

Information
securityBPO

The DNP Group, NTT West and NTT East have been collaborating to advance ashift to a new style of student-centric education with guidance optimized toindividual students, and which utilizes a remote environment. In October 2021 thethree companies, acting as joint investors, established NTT EDX Co., Ltd. to work
toward this goal. We will accelerate the digitization of education using ICT,
collaborate with publishers of textbooks and educational materials, and provide aplatform service that deploys new value related to higher education to universities
nationwide. The DNP Group will digitize textbooks and teaching materials, support
the construction of a distribution system and operation of digital distribution
services, provide a textbook selection database and support the development oforiginal teaching materials.

Digitaldistributor

Sales
agent
BOOK

Publisher

Publishing
distributor

Bookstore

Business for
publishers

Higher education
establishments

Business for higher
education establishments

Digital textbook and teaching material distribution service
Digital textbook agency anddistribution support service

Original teaching material
development support service

Learning data utilization service

Business outlook
Establishment of online/remoteenvironment in higher education
establishments

44

Realization of
student-centric education
based on data utilization

Realization of learning
diversity (promoting
learning after graduation)

DNP Integrated Report 2022

45

TOP MESSAGE

Lifestyle & Industrial Supplies

THE DNP GROUP ʼ S

PROGRESS WITH

CREATION
1 VALUESTORY

2 MEDIUM-TERM
MANAGEMENT PLAN

3 BUSINESSPROMOTION

4 REINFORCING
BUSINESS BASE

5 MANAGEMENTSTRUCTURE

RESULTS/
6 BUSINESSCORPORATE PROFILE

Financial Highlights and Business Strategies

Medium-term Management Plan

600

60

• Leading global share in battery pouches for lithium-ion batteries etc.

40

• Shift to a decarbonized society, response to climate change,0■ Net sales

1800(¥ billion)
80

600

60

(¥ billion)

Net Sales- 2.4%

2020.32021.32022.3

391.4

368.0

387.0

Net sales

400

Operatingincome

11.1

14.0

13.6

Operatingincome margin

2.8 %

3.8 %

3.5 %

391.4

368.0

387.0

200

11.1

14.0

13.6

0
Net sales

2020.32021.32022.340
200Operatingincome[Net Sales][Operating Income]Sales of battery pouches for lithium-ion batteries for electric vehicles
increased due to expanding global demand, and there was also a recovery
in demand in the housing and automobile markets, boosting sales of various
interior and exterior materials. Overall, sales increased by 19,023 million
yen, or 5.2%, compared to the previous fiscal year.

Operating income decreased by 2.4%, or 340 million yen, compared tothe previous fiscal year, largely due to a sharp rise in raw material
prices. Operating income margin declined 0.3 point from 3.8% theprevious fiscal year, to 3.5%.

FY2021: Impact on business units due to changes in business environment
COVID
pandemic

46

440

408

387

30

14

12

FY2021
results

FY2022plan

20
FY2024targets

0

Strengths

eco-friendly products and barrier films

conservation of biodiversity

Risks
and
opportunities• Tackling food loss, ensuring that food is safe and secure• Dealing with various infectious diseases through anti-bacterial andanti-viral products etc.

• Changes in the business environment, such as soaring prices of■ Operating income

raw materials etc.

Business Strategies and Main Initiatives toward Achieving Medium-term Goals

Although sales rose as focus businesses
expanded, income decreased slightly
due to higher materials costs.

Operating Income• Maintaining unique converting technologies such as coating and laminating• Development technologies for high value-added products including

80

200

+5.2%

development and sales• Push ahead with review of low value-added products etc.

(¥ billion)

800

400

FY2021 Financial Highlights• Leverage converting technology to strengthen new productBasicpolicies

Targets for net sales andoperating income

Packaging
Business

Continued restrictions on
peoples movements inJapan and abroad

Living Spaces
Business

Gradual resumption of
economic activity andrecovery in demand

Industrial
High-performance Materials
Business

Auto supply chains
impacted by disruptionsin international
distribution networks

Surges in prices ofraw materials

Semiconductor
shortages

Increased procurement
costs for petrochemicals
and aluminum
Sales growth slowed due
to reduced automobile
production

Create value primarily in growth areas
Striving to realize a decarbonized society,recycling-oriented society and society inharmony with nature through All DNP

By enhancing products and services and promoting thedevelopment of mechanisms for eco-friendly packaging,including plant-based packaging materials andmono-material packaging materials, we provide three formsof value, namely resource circulation, CO 2 reduction andpreservation of the natural environment. In addition, as
demand for clean energy grows, we will develop and provide
products and services that reduce our environmental burden,such as back sheets and encapsulants for solar cells withexcellent power generation efficiency and long life.

Providing high value-added products
Seeing not only homes and commercial facilities but also
vehicles and rail cars as living spaces that require comfort
and function, we will strive to expand our market share ofhigh value-added products utilizing DNPʼs proprietary
electron beam (EB) coating technology. We will also further
expand our lineup of high-function, high value-added
products, such as anti-bacterial and anti-viral products forinterior applications and products for exteriors, for which
demand is expected to grow.
Developing products and services for anext-generation mobility society
We will continue to provide high value-added products andservices to realize a next-generation mobility society. We willfurther concentrate on expanding the business of battery
pouches for lithium-ion batteries, which are in growing
demand for use in electric vehicles. We will also provide highvalue-added products and services such as films and formed
products for interior and exterior use that feature excellent
design and functionality, new products such as curved resin
glazing that helps reduce the weight of vehicle bodies,sheet-type coils for wireless power supply that can charge
without contact and Mobility as a Service (MaaS).

2

Provide value optimized to each country and region

With the aim of expanding our market share in Southeast
Asia, our Packaging Business will expand sales in Indonesia
and Vietnam, where our production bases are located, as
well as to neighboring countries such as Thailand andMyanmar. This is part of our efforts to expand our share to
global companies.
Our Living Spaces Business is utilizing our global sales
network to expand our market share in Europe, the UnitedStates and emerging countries for metal panels and interior
and exterior materials for automobiles with excellent design.
Our Industrial High-performance Materials Business will
construct a new slit processing line for lithium-ion battery
pouches at the Denmark Plant that is scheduled to start
operation in the latter half of fiscal 2022, as we accelerate
our expanding share in the global market for battery pouches
for lithium-ion batteries, photovoltaic module components
and industrial barrier films.
3

Enhance corporate value through all manner ofstructural reforms

In the Packaging Business, we consolidated facilities in the
Kansai region at the Tanabe Plant (Kyoto Prefecture) withinfiscal 2021 as part of a review of low value-added products
and site reorganization. In addition, in the Industrial
High-performance Materials Business, we established a new
production line for lithium-ion battery pouches at the Tsuruse
Plant (Saitama Prefecture) in fiscal 2022. Looking ahead, we
will continue to review our business portfolio and promoteenhanced productivity, improved profitability and otheradvancements.

DNP Integrated Report 2022

47

TOP MESSAGE

Lifestyle & Industrial Supplies

PROGRESS WITH

2 MEDIUM-TERM
MANAGEMENT PLAN

3 BUSINESSPROMOTION

4 REINFORCING
BUSINESS BASE

5 MANAGEMENTSTRUCTURE

RESULTS/
6 BUSINESSCORPORATE PROFILE

Focus Business

Providing the essential values of safety, security, health,comfort and environmental consciousness withfunctional films that utilize converting technology
DNP develops and provides a wide variety of functional film
products, leveraging its strengths in converting technology, aunique material processing technology that includes coating,lamination, bag manufacturing and forming. For example, thefunction of barrier films to protect contents is required not
only in conventional food packaging but is also being sought

THE DNP GROUP ʼ S

CREATION
1 VALUESTORY

in many other fields. To meet these needs and anticipate
further expectations, we are working to improve film
characteristics, such as gas barrier properties against water
vapor and oxygen and shaping flexibility.
In the Packaging Business, DNP has expanded its Innovative
Barrier (IB-FILM) series of deposition films, which combine gas

barrier properties with transparency. It is also working to
expand its share of the market for environmentally conscious
products such as with its series of plant-based packaging
materials, which is a blend with plant-based materials.
In the Industrial High-performance Materials Business,
demand for safe, secure pouches for lithium-ion batteries
used in information terminals and vehicles is increasing. We
will also expand the market for high-performance products
such as the DNP Multifunctional Insulation Box, which canmaintain a constant temperature for an extended period oftime without a power source, and containers for the transfer
and storage of vaccines and other medicinal solutions.
We will also be further advancing the use of DNP'sproprietary EB hardening technology, which instantly
improves the performance of resins and films by electron
beam radiation. In addition to providing functions such as
weather resistance, soiling resistance and scratch resistance,
this technology also imparts greater freedom of form such as
in bending and folding. It also contributes to environmental
burden reduction and health through energy-saving
production processes, CO 2 reduction and the use ofsolvent-free coating, etc. In the Living Spaces Business, wewill apply this technology to interior and exterior materials forresidential and non-residential use and expand the use ofmobility resin materials, providing further value in the areasof safety, security, health and the environment.

Expanding the lithium-ion battery pouch business

DNP will maintain and strengthen its global market shareleadership by leveraging its strengths in converting
technology and other areas to establish de facto standards
in the industry and further expand applications.

EBhardeningtechnologies

A technology that instantly makes
resins and coating films highly
functional by irradiating them withelectron beams. This makes it
possible to impart functions withlong-term durability such as scratch
resistance, weather resistance,
soiling resistance, antibacterial andantiviral properties.

Laminating

A technology that evenly bonds
separately-produced materials
including films, metals andresins. Bonding multiple
functional materials according
to the application produceseven better results.

• DNP plant-based packaging materials• Transparent vapor deposition film
“ IB-Film”• DNP mono-material packaging
materials

Mobility-related products• Lithium-ion battery components• Battery pouches (exterior film wrap)• Battery contact tab foil

• Decorative panels that featureexcellent functionality and design• Resin products that contribute toautomotive weight reduction

Industrial highperformance materials• Encapsulants and back sheets forphotovoltaic cells• Medical and industrial components• DNP Multifunctional Insulation Box

Features & strengths
We develop functional
materials that reduce theenvironmental burden,
improve the protection andpreservability of contents andsupport simple cooking using
microwave ovens, providing
users with greater usability.

Features & strengths
Future initiatives product linesthat make use of technologies
such as coating and lamination.
We develop various productsthat make rechargeable
batteries lighter, thinner, longer
and safer, and resin molded
products with enhanced surface
resistance and functionality.

Features & strengths
With a proven record of stable
quality as our strength, we
provide new value in products
such as solar cell materials forthe expansion of renewableenergy and products for
medical, pharmaceutical,
industrial applications.

Structure of a lithium-ion
battery to which a battery
pouch is applied

Battery module

Battery cell

Future initiatives

A technology that uses a
vacuum to vaporize amaterial and deposit it on asubstrate material such as
plastic film to produce anultrathin film of high purity

Main products and services

Precision coating

Vacuumdeposition®

Post-processing

Core technologies

Coating

Eco-friendly
packaging materials

A processing technology that applies
and attaches a coating material thinly
and uniformly to a substrate surface.
By combining this technology with
substrate design technology, it ispossible to form coating films with avariety of functions such as opticalproperties, barrier properties andheat resistance.

Laminated
electrodeBattery pouch (exterior material)
Tab

Establishment of new production bases to enablefurther capacity expansion beyond fiscal 2023
For lithium-ion battery pouches overallsales of ¥100 billion in fiscal 2024

48

DNP Integrated Report 2022

49

TOP MESSAGE

Electronics

THE DNP GROUP ʼ S

PROGRESS WITH

CREATION
1 VALUESTORY

2 MEDIUM-TERM
MANAGEMENT PLAN

3 BUSINESSPROMOTION

4 REINFORCING
BUSINESS BASE

5 MANAGEMENTSTRUCTURE

RESULTS/
6 BUSINESSCORPORATE PROFILE

Financial Highlights and Business Strategies

Medium-term Management Plan
Targets for net sales andoperating income(¥ billion)

800

47

60

47

38

400

0
■ Net sales

FY2021 Financial Highlights+26.7%

1(¥ billion)

Net Sales

Operating Income(¥ billion)
80

800

2020.32021.32022.3

186.6

197.0

211.0

600

Net sales
Operatingincome400

34.1

Operating
18.3 %
income margin

36.7

46.5
200

18.6 %

60

46.5
36.7

34.1
186.6

40

211.0

197.0

20

22.0 %
0
Net sales

2020.32021.32022.30Operatingincome[Net Sales][Operating Income]

Optical film sales increased overall, although some products were affected by domestic
stay-at-home demand coming to an end. Sales of metal masks for manufacturing OLED
displays rose, driven by robust smartphone demand for such displays. With various otherproducts in the Electronic Devices Business also performing well, overall segment sales
increased 7.1%, or 14,073 million yen, compared to the previous fiscal year.

Due to higher net sales and the results of businessstructural reforms, operating income rose 26.7% year on
year, or 9,791 million yen. Operating income margin rose
3.4 percentage points from 18.6% to 22.0％ .

FY2021: Impact on business units due to changes in business environment
COVID
pandemic

Display Components
Business

Electronic Devices
Business50

211

FY2021
results

212

FY2022plan

200
FY2024targets• Top global market share in optical films leveraging our strength in coating

technologies

Strengths• Top global share in metal masks utilizing etching technologies and patents• Photo masks based on cutting-edge photolithography-related technologies

etc.

40
20
0
■ Operating income

Risks
and
opportunities• Initiatives to develop new ways to work and live
• Responses to acceleration and diversification of technological innovations,and intensifying development competition• Changes in economic conditions, consumption trends in Japan and overseas,

currency fluctuations and others etc.

Business Strategies and Main Initiatives toward Achieving Medium-term Goals

Sales and operating income rose due in part togrowing demand for information terminals.

+7.1%

integration of real and digital• Rebuild businesses where competitiveness has declined etc.

80

600

200

• Develop and supply key components that contribute to sophisticatedBasic
policies

Optical film businessremained firm due tothe spread ofteleworking andonline classes

Exchange rate
fluctuations

Due to thedepreciation of
the yen, in yen
terms sales andprofits denominatedin foreign currencies
increased,
improving export
competitiveness

Surges in prices ofraw materials

Semiconductor
shortages

Increased demandfor photomasks for
manufacturing
semiconductors fortelecommunications,
automotive and data
centers

Create value primarily in growth areas

Strengthen development of products for OLED displays
In anticipation of growing demand for small and medium-sized
OLED displays for smartphones and tablet devices, we will increase
production capacity for metal masks used in manufacturing
OLED displays, for which we hold the top share in the world
market. We will also focus on developing products which meetvarious needs, including foldable displays and rollable displays.
As one example, we will develop flexible functional film thatcombines excellent transparency, hardness and bending resistance,
which will be supplied mainly to panel manufacturers.
Developing and providing new products thatenhance the added value of
5G next-generation communications
Using etching technology honed through the development ofhigh-precision photomasks used for manufacturing
semiconductor devices, DNP has developed vapor chambers,
which are thin heat-dissipating components that suppress
overheating in 5G-compatible devices. We have reduced thethickness of these components to just 0.2 mm, and they are
currently being evaluated by manufacturers of smartphones
and other devices. We are also working on the mass
production of transparent antenna film comprising transparent
film on which invisible thin metal wiring is formed to receive
5G radio waves. In addition to displays, this film can be affixed
to walls, windows and ceilings of buildings, car glass and utility
poles, etc., thereby contributing to the realization of 5G
communications that integrate into daily lives. Through thedevelopment and provision of these new products, we willcontinue to create value in the form of information terminals
that are smaller and have more advanced functionality for the
5G communication environment and beyond.
Refine and commercialize next-generation
photolithography-related technology
We will provide EUV masks for cutting-edge semiconductors
used in extreme ultraviolet (EUV) lithography, ahigh-performance semiconductor manufacturing technologythat is essential for an advanced information society. DNP wasthe first dedicated photomask manufacturer in the world tointroduce multi-beam mask writing (MBMW) tools. We have

not only boosted the productivity of next-generation
photomasks for semiconductors, but have also built proprietary
manufacturing processes, making DNP the first dedicatedphotomask manufacturer to develop 5nm* process node EUV
masks. Looking ahead, we will provide cutting-edge EUV
masks to semiconductor manufacturers, research institutions
and device manufacturers in Japan and around the world.
In addition, with the semiconductor industry needing tofurther reduce energy consumption to achieve a decarbonizedsociety by the year 2050, DNP is focusing on the developmentof master templates for semiconductor nanoimprint lithography(NIL), a decarbonization technology that dramatically reduces
energy consumption during semiconductor manufacturing. As
the worldʼs only manufacturer of master templates forsemiconductor NIL, we will contribute to the formation of adecarbonized society through the supply of micro-sized
products for next-generation semiconductors.
* nm: nanometer (10-9 meter)

2 Provide value optimized to each country and region
We will utilize our semiconductor photomask bases establishedin Taiwan and China as a joint venture with Photronics, Inc.
(USA) to provide various products that incorporate our uniquestrengths. We will also pursue cooperation on the technicalside to launch even finer photomasks in East Asian andWestern markets. In addition, we will keep close watch on
global supply chain issues and country risks, monitor andanalyze the social issues and needs of people in each country
and region and strive to provide the value they need.

Enhance corporate value through all manner ofstructural reforms
We will continue to promote the transformation of our businessportfolio with consideration for profitability and market growth.
As part of this transformation, in November 2021 we shut down
the business of color filters for LCD displays, which had sufferedfrom declining competitiveness due to market changes, to shift
to high value-added products related to OLED displays. We will
also advance the shift to products that support a digital society
such as IoT and 5G to boost earnings strength. In particular, in
our overseas business, we will respond more flexibly tofluctuations in exchange rates and raw material prices in orderto minimize the impact on business results.
3

DNP Integrated Report 2022

51

TOP MESSAGE

Electronics

THE DNP GROUP ʼ S

CREATION
1 VALUESTORYPROGRESS WITH

2 MEDIUM-TERM
MANAGEMENT PLAN

3 BUSINESSPROMOTION

4 REINFORCING
BUSINESS BASE

5 MANAGEMENTSTRUCTURE

RESULTS/
6 BUSINESSCORPORATE PROFILE

Focus Business

Developing and providing key components that highly
integrate real and digital, such as optical films utilizing
clean converting technology
In a society where everything is connected to the Internet,
DNP is leveraging its unique strengths to develop a variety of
products and services that enhance the value of peopleʼs
lives in the display-related and electronic device businessdomains which form the interfaces between the real andvirtual worlds. These developments are made possible by ourclean converting technology, which combines opticaltechnologies with precision thin-film coating and precisionmolding.
For example, we have developed a wide variety of opticalfilms that include anti-reflection films which make displays
easier to see by reducing light reflection, and which continue
to gain a high market share. We will continue to work onhigher-definition, multi-functional and energy-saving displays,
providing a wide range of products unique to DNP and ourmastery of the characteristics of light.
We have the top share of the world market for the metalmasks which are an indispensable component in the
production of OLED displays, which are becoming
increasingly popular in smartphones and other devices. We
will continue to use our unique photolithography and etching
technologies to develop OLED displays that are thinner,

lighter and higher-definition.
In addition, DNP has developed thinner vapor chambers,a heat-dissipating component that by preventing information
devices from overheating, increases the degree of freedom indesigning smartphones and other devices. We are also
developing 5G-compatible products such as transparent
antenna films that can be affixed to displays, walls, windows,
ceilings, automotive glass, utility poles, etc. DNP will continue
to develop and provide new value by further enhancing its
unique P&I (Printing and Information) strengths and utilizing
the synergies derived from combining those strengths.

Expansion of optical film-related businessPhotolithography

A technique for duplicating aplate image onto the surface
of a resin or metal substratecoated with photosensitive
material

Patterning

A technique for creating plate imagesof text, photographs, illustrations,etc., developed in the printing platemaking process. A detailed print
image is drawn on a film, forexample, and “burned” onto a resinor metal plate for printing.

Coating

A technique of applying andfixing a material such as ink on
a printing plate to paper or film,
etc. It also includes the applying
and attaching of a coating
material thinly and uniformly toa substrate surface.

Optical films• Anti-reflection film
• Retardation film
• Viewing angle control film

Features & strengths
We are the world's pioneer in thedevelopment of various components
and materials for advancing displays,
such as flexible LCDs, OLEDs andelectronic paper.

Features & strengths

OLED display
manufacturingcomponents• Metal masks

5G-related• Photomasks for semiconductors• Vapor chambers(metallic heat-dissipation component)• Transparent antennas film

Developed metal masks for manufacturinghigh-precision OLED displays with the world's
top market share. Our development of
cutting-edge products is based on ourstrengths in technology accumulated over 65
years, starting with the development of shadow
masks for cathode ray tubes at the dawn of theemergence of domestic color televisions.

Future initiatives

Clean
converting

Various technologies(precision molding technologies)
for processing materials into
optimal shapes in a highly clean
air atmosphere. Results in uniquestrength when combined withtechnologies such as precision
thin film coating.

Main products and services

Microfabrication
Precision coatingCore technologies

Securing market share in China withthe ultra-wide line at the Mihara plant inHiroshima Prefecture

Improving the competitiveness of products

Features & strengths
With its strength in various
microfabrication technologies, circuit
formation and electronic component
mounting technologies, the company
provides components for 5G-related
precision equipment and antennas for“5G communications that integrate into
our daily lives.”

Expanding sales of optical film products
for OLED displays, which require further
added value

52

DNP Integrated Report 2022

53

4

REINFORCING BUSINESS BASE

54

56

CSR Management

58

Environmental and Human Rights Efforts,
Directorʼs Message

60

Initiatives for Climate Change

64

Efforts for the Efficient Use of Resources

64

Efforts for the Conservation of Biodiversity

65

Efforts to Ensure Respect for Human Rights
in the Entire Supply Chain

66

Diversity and Inclusion Efforts, Directorʼs Message

68

Diversity and Inclusion Efforts

DNP Integrated Report 2022

55

TOP MESSAGE

THE DNP GROUP ʼ S

CREATION
1 VALUESTORYPROGRESS WITH

2 MEDIUM-TERM
MANAGEMENT PLAN

3 BUSINESSPROMOTION

4 REINFORCING
BUSINESS BASE

5 MANAGEMENTSTRUCTURE

RESULTS/
6 BUSINESSCORPORATE PROFILECSR Management

Foundation to support value creation

Value creation

DNP has set principal themes to be addressed as part of CSR management. In addition to identifying themes that
we deem important and a priority based primarily on our management strategy and business fields, we also include
themes that the international community views as critical, starting with the United Nations Global Compact Ten
Principles and the Sustainable Development Goals (SDGs), and comprehensively analyze them.

Principal themes

Medium- to long-term vision

Business toContribute to
SDGs
Achievement

We create new value through products andservices, which will contribute to theachievement of the SDGs, and help society growin a sustainable manner.

Fair Operating
PracticesWe help to maintain and develop orderly, freeand competitive markets based on laws andsocial ethics and by always remaining fair andequitable.

Priority indicators for achieving
medium- to long-term vision

Medium- to long-term targets*

FY2021 results(1) Achieve 10% by 2025.

(1) 10.0% (134.8 billion yen)

(1) Number of meetings of the Corporate Ethics Committee(2) Ratio of Autonomous Corporate Ethics Training conducted(1) Hold meeting once a month (12 times a year)
or more.
(2) Achieve 100%
(covering all organizations concerned).

(1) Once a month (12 times)(2) 100% (109 organizations)

Human Rights andLabor

We place human dignity first and foremost andrespect diversity unique to all persons that includes
their culture, nationality, race, ethnicity, language,
religion, values, gender, age, gender identity, sexual
orientation and whether they have disabilities.
We accordingly respect working styles suited to thediversity of our employees and make efforts to createa safe, healthy and vibrant working environment
based on the assumption of acting with discipline.

(1) Ratio of female managers(2) Number of female managers and leaders(3) Ratio of employees with disabilities(4) Ratio of annual paid leave taken(5) Frequency rate of lost workday injuries(1) Achieve ratio of female managers (section manager orabove) of 7% or more by the end of March 2022.
(2) Double the number of female managers and leaders
by the end of March 2022 compared with the number(430) in February 2016.
(3) Achieve the ratio not lower than 2.3%.
(4) Achieve an increase over the previous fiscal year (56.4%).
(5) Keep the rate not more than 0.2.

(1) 7.4%(2) Over 2.2 times the number(938)(3) 2.43%(4) 57.5%(5) 0.19

Environment

DNP targets the realization of a decarbonizedsociety, a recycling-oriented society and a society inharmony with nature by creating new value throughPrinting and Information (P&I) Innovations designed
to achieve the emergence of a sustainable society.
(Refer to pages 62-67.)

For details, see page 59 of the DNP Group Integrated Report 2022 for the DNP Group Environmental Vision 2050 and “Environmental Medium-term Targets.”
For details, see page 17 of the DNP Group Environmental Report 2022 for Environmental Activity Targets and Results List.

Responsible
Procurement

For creating excellent value and cultivatingstrong compliance awareness at the same time,
we work jointly with our supply chain
stakeholders and conduct procurement thatgives due consideration to human rights, theenvironment and more.

(1) Average score of DNP Group CSR Procurement
Guidelines survey on key suppliers(2) Percentage of key suppliers that have obtained theconformance certificate of DNP Group Guidelines for
Procurement of Paper for Printing and Converting

Product Safety
and Quality

We seek to gain the trust of society byprioritizing the safety and quality of our products
and services as part of our responsibility as acompany that supplies these to society.

Information
Security

We ensure the exceptional security of personal
information and all other information assets
through management and protection as part ofthe social responsibility of a company handlingsuch information assets.

Corporate
Citizenship

We contribute to society by resolving social
issues, conducting volunteer activities andthrough cultural activities as we look to deepen
our relationship with society as a good corporate
citizen that coexists with society.

(1) Ratio of Super Eco-Products* in total sales* Excellent eco-conscious products and services designated through
DNPʼs original certification system(1) Achieve an average score of 90 points or more
by FY2030.
(2) Achieve 100% by FY2030.

(1) 87 points in Japan(2) 94%(1) Achieve zero accidents.
(2) Achieve 100%.

(1) Zero accidents(2) 100% (394 products)(1) Rate of information security compliance assessments
conducted(2) Rate of inspections and instructions by the executive officer incharge of divisions implementing priority measures for personal
information protection, etc.
(3) Participation rate of information security education and training(4) Rate of security vulnerability tests for publicly open websites(1) Achieve 100% (covering all business units andGroup companies).
(2) Achieve 100% (covering all organizations concerned).
(3) Achieve 100% (covering all organizations concerned).
(4) Achieve 100% (covering all websites concerned).

(1) 100% (90 units andcompanies)(2) 100% (86 times)(3) 100% (Approx. 41,000
persons)(4) 100% (487 web systems)(1) Number of external participants in social contribution
activity programs(2) Number of employee participants in social contribution
activity programs(3) Number of fair trade-related products consumed in-house(4) Number of dishes served in company cafeterias to support
disaster areas and groups engaging in future generationsʼdevelopment(1) Achieve an accumulated total of 10,000 persons(2,000 per year) from FY2020 to FY2024.
(2) Achieve an accumulated total of 6,000 persons(1,200 per year) from FY2020 to FY2024.
(3) Achieve an accumulated total of 250,000 items(50,000 per year) from FY2020 to FY2024.
(4) Achieve an accumulated total of 70,000 dishes(14,000 per year) from FY2020 to FY2024.

(1) Accumulated total: 2,693(1,400 in FY2021)(2) Accumulated total: 1,383(709 in FY2021)(3) Accumulated total: 59,048(19,858 in FY2021)(4) Accumulated total: 35,151(30,635 in FY2021)(1) Number of serious accidents* caused by our products* Including cases where a defect in our products jeopardizes the userʼs life, causes
serious bodily harm or inflicts serious damage on the userʼs property (other thanthe product itself)(2) Percentage of newly developed products undergoingproduct safety and risk assessment＊ Target values without a target fiscal year set are for each fiscal year.

56

DNP Integrated Report 2022

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TOP MESSAGE

EnvironmentalandHuman Rights
Efforts

THE DNP GROUP ʼ S

CREATION
1 VALUESTORYPROGRESS WITH

2 MEDIUM-TERM
MANAGEMENT PLAN

3 BUSINESSPROMOTION

developed by leveraging our original micromachining technology.
We will also support the rapidly evolving and expanding IoTsociety in the aspect of energy conservation. Further, we areworking to reduce environmental load beginning in the design
stage by promoting the quantitative evaluation of environmentalload throughout the entire lifecycle of products and services. We
are doing this in the development of products, some of whose
raw materials have shifted from petroleum-derived materials toplant-based materials; products that increase transportation
efficiency; easily recyclable products, products with long usable
lifespans; and other products.
We also believe that the issue of business and human rights
is an important aspect and are promoting procurement thatthroughout
the Supply Chain

4 REINFORCING
BUSINESS BASE

5 MANAGEMENTSTRUCTURE

RESULTS/
6 BUSINESSCORPORATE PROFILE

considers human rights and fulfills our responsibilities
throughout the entire supply chain. More specifically, we areworking with many stakeholders to implement a range ofactivities, including human rights risk assessments and theestablishment of traceability based on the DNP Group CSR
Procurement Guidelines. In March 2020, we established the
DNP Group Human Rights Policy and have been working toincrease employeesʼ awareness and strengthen management
throughout the entire supply chain.
We will earnestly interact with a diverse community and thepeople living within it, continue to grow as a company andvoluntarily act to create a better future in which many issues
have been resolved.

DNP Group Environmental Vision 2050
In March 2020, DNP formulated the DNP Group Environmental Vision 2050 and defined what we expect to accomplish toward
the year 2050. We will continue to step up our efforts to create value to realize a decarbonized society, a recycling-oriented
society and a society in harmony with nature.

We aim to solve social issues throughout theentire supply chain to realize a sustainable,
better society.
Satoru Inoue

Managing Director

We at DNP strive to reduce the negative impact of the entire
supply chain and provide positive value with the goal of creatinga sustainable, better society.
The recent acceleration of climate change, increase inmarine pollution, loss of biodiversity, etc., have caused concerns
about the sustainability of the Earth itself. The progress inglobalization requires even greater respect for human rights.
DNP continuously strives for coexistence between ourbusiness activities and the global environment and positions
responses to environmental problems as one of our importantbusiness issues. The DNP Group Environmental Policy
established in March 2000 was revised in March 2022 toincrease the environmental awareness of every employee and tocarry out activities with a focus on the environment throughout
the entire supply chain, in addition to legal compliance. We alsoestablished the DNP Group Environmental Vision 2050 in March
2020 as our goal for the creation of a sustainable society andare accelerating our efforts to achieve a decarbonized,
recycling-oriented society in harmony with nature.
To establish a decarbonized society, our goal is to achieve
net-zero greenhouse gas (GHG) emissions from our businessactivities at our bases by 2050. We are improving ourconventional energy conservation activities, transforming ourbusiness portfolio to low-environmental load, high value-added
alternatives, introducing renewable energy and engaging inother initiatives.
In response to the aggravation of the global increase in the58

amount of plastic and other waste materials, DNP is
implementing measures to efficiently use resources and achievea recycling-oriented society. Our activities focus particularly onplastic waste, and we are working to increase the resource
circulation rate, which is the percentage of waste generated by
the company that undergoes material or chemical recycling. We
are also increasing the more sustainable use of plastic products
and developing products that use alternative materials such as
biomass plastic and recycled materials.
In addition, we are implementing raw material purchasingthat considers biodiversity, afforestation that considers regional
ecosystems and other projects to build a society that is inharmony with nature. Paper has particularly high dependency
and impact on ecosystems. In our procurement of paper in ourbusiness activities, we prioritize paper from certified forests andensure the traceability of products.
In the Medium-term Management Plan, we establishedenvironment-related businesses as one of a focus and willdevelop new products and services that will improve peopleʼs
lives and increase the sustainability of society by leveraging ourunique strengths in P&I (Printing and Information) and ourdiverse partnerships. For instance, we have successfully
reduced power consumption during semiconductor
manufacturing to approximately one-tenth of the conventional
method through energy-saving processing technology for
ultrafine semiconductors using nanoimprint lithography (NIL)A Decarbonized Society
through Climate Change
Mitigation and Adaptation• We aim to achieve effective
net-zero greenhouse gas (GHG)
emissions from businessactivities at our sites.
• We will contribute to creating adecarbonized society throughour products and services.

A Recycling-Oriented
Society through the
Efficient Use of
Resources

A Society in Harmony
with Nature via theConservation of
Biodiversity• We will provide maximum
value through the efficient
use and recycling ofresources throughout thevalue chain.

• We aim to minimize theimpact on biodiversity
throughout the entire value
chain and achieve harmony
with regional ecosystems.

Initiatives in the Medium-termManagement Plan (FY2020-2022)

Business promotion(value creation)
Transforming business portfolio based on
environmental impact and added value
Identifying new environmental themes
Technological innovations in low-carbon
raw materials and other materials
Creating recycling schemes

All
DNP

Efforts to addressenvironmental issues
for both value creationand foundation
reinforcement

SDGs to which our
initiatives correspond

Environmental Medium-term Targets
DNP Group Environmental Vision 2050
Medium-term targets

2050 targets

Reducing

GHG emissions By 40%
from FY2015 levels by 2030

Reduce GHG emissions from own
business activities Net zero
emissions by 2050

Sales of super eco-products*
to account for 10% ofgross sales in 2025

Contribute via products
and services

DNP ʼs vision for society

Decarbonizedsociety

Building decarbonized society

Mitigation of and adaptation
to climate change

Recycling-oriented
society

Increase 2025
recycling ratio by 5%from FY2015 levels

Reduce 2025
water usage by 35%

Efficient resource reusethroughout the value chain

Efficient resource usefrom FY2015

Reinforcing business baseClarifying environmental impact
Introducing renewable energy
Investing in energy-efficient facilities,
optimizing production bases to addressenvironmental impact
Ensuring the use of paper from certified
forests/traceability

Guidelines for
Procurement of Paper
for Printing and Converting

100% of purchased
products are compliant

Minimize biodiversity impact

Society in harmony
with nature

throughout the value chain

Protect biodiversity* Super eco-products are products and services that DNP deems to be exceptionally environmentally conscious based on its proprietary criteria.

DNP Integrated Report 2022

59

THE DNP GROUP ʼ S

Initiatives for
Climate Change

PROGRESS WITH

CREATION
1 VALUESTORYTOP MESSAGE

2 MEDIUM-TERM
MANAGEMENT PLAN

3 BUSINESSPROMOTION

4 REINFORCING
BUSINESS BASERESULTS/
6 BUSINESSCORPORATE PROFILE

Decarbonizedsociety

Mitigation of and adaptation
to climate change

The effects of climate change have become increasingly serious every year and have a large impact on theenvironment, society and the economy. Many countries and regions in the world have set the target of achievingcarbon neutrality, i.e., net-zero emissions of GHG, and the importance of the roles to be played by companies isalways increasing.
By working to resolve climate change and other environmental issues, DNP intends to make peopleʼs daily lives
sustainable, safe and secure while at the same time creating value that is unique to DNP and meets peopleʼs
expectations. We are also proactively engaging in dialogue with stakeholders about these initiatives by disclosing
information on our relevant efforts through the framework recommended by the Task Force on Climate-related
Financial Disclosures (TCFD) and are working to reduce GHG emissions across the entire supply chain.

Governance
DNP positions its response to environmental issues, including
climate change, as one of its key management challenges.
Under the management and supervision of the Board of
Directors, an expert committee was established to leadactivities related to sustainability. In April 2022, theSustainability Committee headed by the president was
reorganized to increase the sustainability of the environment,
society and the economy and further promote the sustainablegrowth of DNP itself. This committee works with the Corporate
Ethics Committee and the BCM Promotion Committee,
analyzes and manages company-wide risks in medium- tolong-term corporate activities focusing on the environment,
society and governance (ESG), understands business
opportunities and applies the results of its efforts to businessstrategies. The Committee meets twice a year or more if
needed to discuss and decide policies, objectives and plansregarding group-wide sustainability and monitor the progressof the plans and the status of the achievement of thoseobjectives. The Board of Directors discusses and makes
decisions on the important matters discussed by thecommittee, along with management policies, management
strategies and other important issues.

Board of Directors

BCM Promotion
Committee

Sustainability
Committee

Corporate Ethics
Committee

OfficeBusiness Unit & Group Company Environmental Committees
Promotion Office
Technical andmanufacturing
groupGroupspromoting eachenvironmental
targets

Business Unit & Group Company Sites

Strategy
Climate change-related risks include transition risks such as
the tightening of regulations for the establishment of adecarbonized society, demand for low-carbon technologies,
an increase in market demand and physical impacts resulting
from rising temperatures.
To identify the risks caused by climate change in its
business activities and examine strategies to prepare forlong-term risks, DNP assesses and analyses the qualitativeand quantitative financial impact and the impact period using
multiple scenarios* published by international institutions.
Transition risks include the likeliness of the increase in
the use of renewable energy, the introduction of emissions
trading (cap and trade), the introduction of a carbon tax, etc,
due to the tightening of GHG emissions regulations as a partof efforts to build a decarbonized society. We expect this toincrease operating costs. In response, we are transforming
our business portfolio based on environmental impact andadded value. We are striving to achieve net-zero GHG
emissions from the business activities at our establishments
by 2050 and aim for the creation of a decarbonized society
as targeted in our Environmental Vision 2050. We have set
medium-term targets for 2030 and are improving our energy
conservation activities, replacing equipment withhigh-efficiency equipment using internal carbon pricing andsystematically introducing renewable energy. From 2030, we
will increase the purchase of renewable energy and use of
the green power (non-fossil fuel) certificate. From 2040, we
will aim to achieve net-zero GHG emissions by shifting powersources to next-generation energy, such as hydrogen.
Meanwhile, we expect that demand and market for
low-carbon products and services will further grow, requiring
the accelerated shift to and development of low-carbon
technologies. In response to such a change, DNP is working
to create value by enhancing our alliances with external
partners by combining our strengths in P&I (Printing andInformation). In these efforts, we have set theenvironment-related businesses and mobility businesses as

Risk management
DNP is in the process of facilitating integrated risk
management initiatives to minimize the negative impact ofsocial issues and variable factors (risks). The Sustainability
Committee identifies climate change-related risks, in particular,
based on business plans at least once a year from theperspectives of the interests of stakeholders, degree of impact
and probability of the occurrence of such an impact andassesses and manages them.
Risks and opportunities that have been recognized as
particularly important are discussed by the Board of Directors
after discussion in the Sustainability Committee. Activities areprioritized, targets are established, and they are then reflected

in management.
An environmental committee has been established in eachbusiness unit and Group company as an organization thatcoordinates domestic and overseas activities in each businessdomain, plans activities and sets targets in light of businesscharacteristics. The progress of activities is managed quarterly
by the secretariat of the Sustainability Committee, whichsemi-annually summarizes the progress toward theachievement of targets across the entire Group, reports thisprogress to top management and provides feedback to eachbusiness unit and Group company to elevate the activities.

the focus of the Medium-term Management Plan in view ofthe profitability and market growth potential in Environment
and Energy, which is one of a growth area. In addition to
low-carbon products such as renewable energy-related
products and battery pouches for lithium-ion batteries, we
expect business growth in security solutions for the sharing
economy. Moreover, we are promoting the sales of DNPʼseco-friendly GREEN PACKAGING, which achieves both
environmental conservation and convenience, and the
reduction of CO 2 emissions across the entire supply chain
using the DNP Life Cycle CO 2 Certification System. To
strengthen these focal businesses, we are intensively
investing management resources and implementing strategic
investments.
Physical risks in the short term are assumed to be
frequent and aggravated damage from torrential rains, which
may cause the suspension of operations, disrupt the supply
chain, etc. In the medium and long term, an increase incosts, the interruption of operations, etc., caused by a rise inaverage temperatures and a change in demand for water may
be assumed. In preparation for these risks, we haveorganized a system for managing business continuity,
including risk analysis and measures at each manufacturing
facility. More specifically, for several years, we have been
implementing disaster control measures such as raisingoutdoor facilities and preventing indoor flooding to minimize
the impact of disasters associated with climate change. We
have also been working to enhance our supply chain
management by building production systems at multiple
plants, diversifying suppliers, etc.
Based on the results of scenario analyses, DNP will flexibly
and strategically respond to foreseeable climate risks andincrease the resilience of our business activities for all
scenarios over the medium to long term.
*Scenarios used: RCP 8.5 scenario in the Fifth Assessment Report by the Intergovernmental Panel on
Climate Change (IPCC) and Net Zero Emissions 2050 and the Sustainable Development Scenario in World
Energy Outlook published by the International Energy Agency (IEA)

Roadmap for achieving carbon neutrality by 2050
GHG emissions (Scope 1+2) / t-CO 2
1,200,000

2030 target

A reduction of
40% from

1,000,000

FY2015 levels

800,000• Energy saving activities,
replacement with high-efficiency equipment• Conversion of business portfolio• Introduction of renewable energy• Introduction of renewable energy

600,000
400,000

2050 target

200,000

To achieve
net-zero GHG
emissions

0

2015

60

5 MANAGEMENTSTRUCTURE

2021

2030

2040

• Introduction of
next-generationenergy sources
2050

DNP Integrated Report 2022

61

TOP MESSAGE

THE DNP GROUP ʼ S

CREATION
1 VALUESTORYPROGRESS WITH

2 MEDIUM-TERM
MANAGEMENT PLAN

3 BUSINESSPROMOTION

4 REINFORCING
BUSINESS BASE

5 MANAGEMENTSTRUCTURE

RESULTS/
6 BUSINESSCORPORATE PROFILE

Initiatives for Climate Change

2. Risks caused by the emergence of the physical impact of climate change(risks in a scenario in which the average temperature rises 4°
C)

Climate change-related risks
1. Risks related to the shift to a decarbonized society(risks in a scenario in which a rise in average temperature is limited to less than 2 °C or 1.5°
C)
Impact on financial affairs, etc. of DNP
Negative
Raising emission
reduction targets
becomesmandatory

Medium term
• Increased capital expenditures to raise energy
efficiency
Systematic capital expenditures based oninternal carbon pricing

Level of Likeliimpact hood

MediumHigh

Policies, laws and regulations

Medium term

Introduction ofrenewableenergy becomesmandatoryTightening
GHG
emissions
regulations

Introduction of anemissions trading
system• Increased capital expenditures for the
introduction of renewable energy• Increased expenses for purchasing Non-Fossil
Certificate
Estimate for additional expenses as of 2030
due to the tightening of GHG emissions regulations
to limit the temperature increase to 1.5 C level:
Approx. 600 million yen/year

Low

High

Positiveー

Short to medium term
• Growth of sales of products related tosolar power generation
Growth of sales in environment-related
businesses
Projection for FY2024: 175 billion yen(FY2020 result: 114.5 billion yen)

Level of Likeliimpact hoodーMediumーHighMedium term

• Increase in expenses for purchasing emissions rights
Estimated additional expenses as of 2030
due to the tightening of GHG emissions regulations
to limit the temperature increase to 1.5 C level:
Approx. 400 to 800 million yen/year

Low

MediumMedium term
• Gain on sale of emissions rights due toreduction of emissions

Low

MediumLong term

Introduction of acarbon tax

Acceleration of
the carbon
neutrality of the
supply chain• Increase in operating cost due to imposition ofa carbon tax on GHG emissions
Estimate for expenses as of 2030, assuming
100 to 120 US dollars/ t-CO2 of carbon tax using
the scenario of the International Energy Agency(IEA): approx. 8.8-10.5 billion yen/year

High

Low

ー

MediumHigh

High

Medium term
• Secure an advantage by calculating CO 2
emissions from productsʼ entire
lifecycle, developing the calculation
business

Medium term

• Increased demand from major clients, etc., forthe reduction of emissions• Business contracts impacted• Suppliers passing on the prices of raw materialsーーMediumHigh

Technology

Accelerating
technologicalinnovation toachieve carbon
neutrality• Increased market share through early
development• The promotion of development for theuse of next-generation fuels such ashydrogen and ammonia

Short to medium term

• Increased investment in the development of
new technologies• Loss of markets due to delays in development
and decreased profit

MediumMediumHigh

Short term

• Increased demand for battery pouches
for lithium-ion batteries and mobility
materials due to an increase in the use of EVs
Growth of sales in mobility-related
businesses
Projection for FY2024: 100 billion yen(FY2020 result: 39.5 billion yen)

Level of Likeliimpact hood

Increase inwind andflood
damagefrom heavy
rainfall,flooding,
etc.
Increase intemperature
andlong-termheat waves

Positive

Level of Likeliimpact hood

Short term

Suspension ofoperations in theevent of a disaster

Disruption of
supply chains
Hindrance tooperations through theincreased occurrenceof heat stroke, etc.

Increase in costs
due to growing
demand for cooling• Decreased revenue due to delayed
manufacturing• Increased cost of disaster control measures
Disaster control measures for production
facilities and bases, development of production
systems in multiple locations, etc.

Medium

High

ー

ー

ー

Medium

High

ー

ー

ー

Medium

High

ー

ー

ー

Medium

High

ー

ー

ー

Medium

High

ー

ー

ー

Short term

• Decreased revenue due to delayed
manufacturing and shipping• Increased cost of purchasing raw materials
and interruption of supply

Medium term

• Decreased revenue due to delayed
manufacturing

Medium term

• Increased energy expenses• Increased capital expenditures

Medium term
Suspension of
Water• Decreased revenue due to delayed manufacturing
operations inrelated risks locations susceptible • Increased cost of disaster control measures
Disaster control measures for production
in riverto flooding such as
facilities and bases, development of production
basinssystems in multiple locations, etc.
river basins

Targets and indicators

Medium term

Shift tolow-carbon
technologies

Urgency

Risks related to climate

Impact on financial affairs, etc. of DNP

Risks related to climate
Negative

Chronic

Type

Type

High

High

To minimize the risks associated with climate change, DNP
calculates the GHG emissions of the entire Group (Scopes 1,
2 and 3) and develops strategies based on the results of its
calculations. We have set the goal of reducing GHG emissions(Scopes 1 and 2) from business activities at ourestablishments by 40% by 2030, compared with theemissions in fiscal 2015, intending to achieve carbon
neutrality by 2050. In addition, we are investigating thestatus of our suppliersʼ targets for controlling and reducing
their GHG emissions to control our Scope 3 emissions which

are more than 80% of our total GHG emissions. We will
expand our focus businesses based on the Medium-termManagement Plan to maximize business opportunities. We
have set the goal of raising the percentage of gross sales
from sales of super eco-products, which are specified
products and services that are particularly friendly to theenvironment based on our criteria, to 10% by 2025 and arefocusing on increasing the number of products and services
that contribute to the creation of a decarbonized society.

Medium term

• Promotion of the development of and thegrowing market for low-carbon products
and services

Market/evaluation

Medium term

Changes incustomer
behavior

Increase inconcerns ofstakeholders

Reduction in
products andservices that are
not low-carbon orenvironmentallyconscious

Worsening of thecorporate image, adecline in stock
price and exclusionfrom investments• Loss of market and decrease in revenue due toa lack of carbon reduction• Acceleration of the shift to non-petrochemical
products, a negative impression of plastic
products penetrates markets• Growing demand for the replacement of
non-environmentally conscious materials withalternative materials

High

MediumShort to medium term

• Loss of market due to a lack of carbon
reduction and a decrease in revenue due to adecrease in transactions• Outflow of human resources and an increase in
hiring costs

Value creation

Short term

• Enable the market for recycled materials,
biomass materials and paper, etc., togrow as replacements for existing plastic
products• Secure an advantage by calculating CO 2
emissions from productsʼ entire lifecycle
Growth of sales in environment-related
businesses
Projection for FY2024: 175 billion yen(FY2020 result: 114.5 billion yen)

High

High

Under the Medium-termManagement Plan, we will work
to expand our focus businesses
and contribute to creating adecarbonized society through our
products and services.

Environment-related
businesses
Mobility businesses

114.5 billion yen

175.0 billion yen(FY2020)(FY2024)

39.5 billion yen

100.0 billion yen(FY2020)

Percentage of gross sales fromsales of super eco-products(FY2024)

10 % (2025)

Medium term
Medium Medium• Increased information disclosure andimprovement of engagement• Secure advantages and humanresources as a company leading the way
in sustainability

Medium Medium

Degree of impact We have determined the degree of impact on the interests of stakeholders and the business considering business plans, identified risks related to the environment

given their likelihood and categorized the risks that are predicted to have a long-term effect or a financial impact of 10 billion yen or more as having a high degreeof impact. Risks with an impact lasting several years or a financial impact of several hundred million yen were categorized as having a low degree of impact.

Foundation ofbusiness activities
We will reduce GHG emissions
from business activities at our sites.

Medium-term targets

40% reductionof emissions from the FY2015 level (2030)

Long-term Environmental Vision

Achievement ofcarbon neutrality by 2050

Degree of financial impact: High: approx. 10 billion yen Medium: 1 to 10 billion yen Low: less than 1 billion yen

62

DNP Integrated Report 2022

63

TOP MESSAGE

Efforts for the Efficient Useof Resources

Recycling-oriented
society

Efficient resource use

The increase of plastic and other waste is becoming a bigger problem globally, and there is a global trend toward
the shift from one-way socioeconomic activities to a circular economy in which resources are used sustainably. DNP
is promoting the efficient use of resources for creating a recycling-oriented society, which is a goal in the DNPGroup Environmental Vision 2050.
In fiscal 2021, we set the goal of increasing the recycling ratio, which is the percentage of waste generated by
the company that undergoes material or chemical recycling, 5% from the level in fiscal 2015 and have been working
to achieve this by fiscal 2025. We are reducing energy recovery and promoting the efficient use of resources byspecifying waste disposal methods to increase resource circulation.

THE DNP GROUP ʼ S

CREATION
1 VALUESTORYPROGRESS WITH

2 MEDIUM-TERM
MANAGEMENT PLAN

3 BUSINESSPROMOTION

4 REINFORCING
BUSINESS BASE

5 MANAGEMENTSTRUCTURE

RESULTS/
6 BUSINESSCORPORATE PROFILE

Efforts to Ensure Respect for
Human Rights in the Entire Supply Chain
Legislation regarding human rights due diligence has been increasing, particularly in the United States and Europe,and the awareness of respecting human rights is increasing in and outside Japan. Companies are required tocontrol risks in their entire supply chain and reduce the negative impact of their supply chain. DNP established the
DNP Group Human Rights Policy in March 2020 to strengthen its management of its respect for human rights. We
specify that the respect for human rights throughout the entire supply chain is a material issue and are carrying out
a range of activities to address it.

Efforts based on the DNP Group CSR Procurement Guidelines

Recycling Meets Design ProjectIn 2020, DNP launched the Recycling Meets Design Project, a co-creation
project with designers to promote the recycling of plastic packaging.
Designers, engineers and others with diverse, specialized strengths are
participating in the project whose goal is to increase the added value andexpand the use of recycled plastic using the power of design.

More than 20 ideas and value creation stories have been presented
over the last two years. We will continue to enable ideas to become realand share the stories generated by the project in coordination withpartners and associations to solve environmental issues.

In 2006, DNP began engaging in responsible procurement incooperation with suppliers. In 2020, we fully revised the DNPGroup CSR Procurement Guidelines in view of the supply
chains in Japan and abroad. To increase the effectiveness of
the Guidelines, we periodically survey the activities ofsuppliers and outsourcing contractors based on the
Guidelines, provide relevant parties with the results asfeedback and make necessary improvements. In fiscal 2021,
164 companies returned responses, and the average total
score was 87. The scores for all 10 themes, including
recommendations, increased from the previous year. We also
provided specific guidance for improvement to 18 suppliers
that failed to meet the standards specified by DNP.

Average score by theme of a fact-finding survey of initiatives of DNP Group CSR Procurement Guidelines

Pellets recycled from plastic bags
(granules in the bottle on the left)

MaiLOOP, a reusable packaging material

Efforts for the Conservationof Biodiversity

Average scoreSociety in harmony
with nature

Raw material procurement
We established the DNP Group Guidelines for Procurement of Paper for
Printing and Converting in 2012 for the procurement of paper, which, in
DNP ʼs business activities, significantly relies on and impacts ecosystems,
to maintain sustainable forest resources. The Guidelines specify the criteria
for selecting suppliers and the types of paper to purchase, and we arestrengthening our relationships with suppliers and verifying the legitimacyof raw materials. At present, we are promoting the active use of paper
products with forest certification and the assurance of traceability toachieve 100% compliance with the Guidelines.

Health andsafetyEnvironment

Fair tradeand ethics

Product
safety andquality

Information
security

Business
continuity
planSocialcontribution
Recommended
theme

FY2021(164 companies)

87

85

89

92

91

80

87

89

91

82

81

FY2020(353 companies)

85

80

88

89

88

78

85

88

89

80

79

* Survey on: Key suppliers (suppliers accounting for 90% of our annual purchases in the previous fiscal year)* Numerical target: Overall average score of 90 points or more by FY2030

Addressing human rights issues and conflict minerals
In fiscal 2021, we conducted the Fact-finding Survey ofSuppliers Regarding Human Rights Issues and Conflict
Minerals Issues on key suppliers, to which 186 companies
responded. Regarding human rights, we surveyed theirinvolvement or non-involvement in forced labor and otherhuman rights infringements, which have become aninternational issue, and are taking measures to address
potential risks in supply chains. As for conflict minerals, weused the Responsible Minerals Assurance Process (RMAP) of
the Responsible Minerals Initiative (RMI) to identify 391
smelters/refiners of tin, tantalum, tungsten, gold, and cobalt.

We checked them against the Conflict-Affected andHigh-Risk Areas (CAHRAs) list and identified 22 smelters/
refiners that were particularly high risk. We will conduct
additional surveys of suppliers doing business with the 22
smelters/refiners and demand a change to lower-risk
smelters/refiners. We plan to make changes according tosocial conditions, including changes regarding the minerals
subject to investigation, and conduct the same surveys infiscal 2022. Through these activities, we will increase thetransparency of our supply chain and further promoteresponsible mineral procurement.

Results of conflict minerals survey

Creation of greenery areas at business sites

64

Human
rights andlaborProtect biodiversity

DNP recognizes that its business activities affect biodiversity and believes that maintaining DNPʼs coexistence withnature is essential for the companyʼs sustainable growth. We strive to minimize impact on biodiversity and maintainharmony with regional ecosystems throughout the entire value chain to establish a society that is in harmony with nature.
We examine the relationship that our business activities have with biodiversity, prioritize the procurement of raw
materials and the creation of greenery areas on the company premises, both of which depend on ecosystem services
and greatly impact biodiversity, and implement specific activities.

DNP is redeveloping the Ichigaya district in Tokyo, home to our head
office, as the center of new value creation. We are growing“ Ichigaya-no-Mori”(The Ichigaya forest), a greenery area replicating theMusashino thicket that had previously existed. Creating a new forest inan urban area as part of this city planning project achieves both thedevelopment of a business base and contribution to the environment.

Legalcompliance
Establishing aandmanagement
Excluding therespecting
systemrecommended
international
theme
norms
Overallaverage(Out of 100 points)“ Ichigaya-no-Mori” is a natural forest with great diversity, containing
deciduous broad-leaved trees and other evergreens and othervegetation, including varietals native to the neighboring prefectures in
Kanto.
Together with the growth of the entire “ Ichigaya-no-Mori,” we will
work to create new value originating in the Ichigaya district.

Number of responding companies

Number of smelters/refiners identified

186

391

Smelters/refiners that are either“ Conformant ” or “Active” in the RMAP

audit or are not located within CAHRAs

369*As of January 2022

DNP Integrated Report 2022

65

TOP MESSAGE

DiversityandInclusion
Efforts

THE DNP GROUP ʼ S

CREATION
1 VALUESTORYPROGRESS WITH

2 MEDIUM-TERM
MANAGEMENT PLAN

3 BUSINESSPROMOTION

The first goal, diversifying decision-makers, was to create
opportunities for diverse employees to exert their skills, which
would help the organization develop strength in legal complianceand risk management. The largest internal population
possessing particular knowledge and experiences is women.
Since the Diversity Promotion Department became afundamental organization in 2016, the recruitment of women(women comprised 42% of new employees in fiscal 2021),
promotion of women to managerial positions and the number ofyears of continuous service by women have all increased.
However, women still account for only about 3% of department
managers, and we have yet to start the diversification ofdecision-makers. As the Director in charge of D&I, I incorporate
the perspective of D&I in the Board of Directors, institutional
revisions and other activities at all times. In parallel with work
Ratio of females at each level
(%)
30

5
6

25

20

From a homogeneous, uniform organization toan organization full of diversity

1

Director5

diverse working styles” and “ fostering a corporate culture toencourage the active participation of diverse human resources,”and we are accelerating our efforts to achieve these goals. In
fiscal 2021, we worked on “diversifying decision-makers,”“reforming employeesʼ awareness” and “ fostering a corporate
culture to encourage the active participation of diverse humanresources.”

DNP Group Vision

Top Commitment

DNP Group Diversity Declaration
Medium-term Diversity Vision
Business operation level D&I promotion measures

Demonstrating
the comprehensive
capabilities ofteam DNP

Basic policies and strategies
Career formation
supportSponsorship Program/D&I promotion leader training/Practical leadershiptraining/Mentor development training, etc.

Realizing diverse
lifestyles(Efforts) Childcare leave for male employees/Promotion of paid leaves of managers(Programs) Telecommuting/Short-day work system/Workation/
Internal parallel work/Side jobs, etc.

Fostering
managementawareness and culture

66

Internal Diversity Week event/Employee Engagement surveys, etc.

Self-directedactions of
all employees

2

0
FY
FY
FY
FY
FY
FY
FY
2015 2016 2017 2018 2019 2020 2021
1. Executives and equivalents
3. Section managers and equivalents
5. Leaders (one step before management)

FY2025 targets

5 MANAGEMENTSTRUCTURE

RESULTS/
6 BUSINESSCORPORATE PROFILE

style reform and management reform throughout theorganization, we are focusing on the career development offemale employees and the creation of pipelines through training
for developing next-generation leaders and a Sponsorship
Program (see Topic) for developing senior management positions
to eliminate all gender gaps.
The second policy is reforming employeesʼ awareness.
Society has experienced particularly significant changes in thelast few years, and the impact will likely persist into the future.
In this environment, the voluntary effort of self-motivatedlearning is indispensable. DNP not only responds to changes
that have already occurred but encourages every employee totake the initiative in making positive social changes. We havebeen holding an internal event, Diversity Week, since 2021,
encouraging male employees to take childcare leave andmanagers to take paid leave and make other efforts to achieve
work-life balance with the continued adoption of awarenessreform. These efforts resulted in the ratio of male employees
taking childcare leave reaching 82.4% in fiscal 2021.
The third basic policy is fostering a corporate culture thatencourages the active participation of diverse human resources.
The Group as a whole is promoting the penetration of D&I anddialogues in an organization with high psychological safety. In
the Diversity & Inclusion Promotion Committee, consisting ofbusiness unit managers, presidents of Group companies andother members, the President emphasizes that the words andactions of leaders are important in ensuring psychological safety
in the workplace. Moreover, we are working to raise the level ofthe entire organization by sharing information about many cases
and issues in line with the conditions of various divisions, suchas planning, systems and manufacturing in each area andcarrying out activities in the entire Group.
We will take the initiative in implementing D&I to develop aculture that brings out the abilities of every employee andmultiplies the skills of various employees to create a driving
force for DNPʼs growth.

2. Department managers and equivalents
4. Entire management
6. Full-time employees

TOPIC

Ensuring of
psychologicalsafetyLaunch of Sponsorship Program

New value creation

The source of the strengths of the DNP Group is undoubtedly
the presence of every employee. We seek to maximize thecapacity of the organization and create new value by respecting
every difference among all employees, accepting one anotherand multiplying the strengths derived from such diversity.
Our basic policies for promoting diversity and inclusion (D&I)
include “developing diverse human resources,” “realizing

Leveraging thedifferences
betweenindividuals

4

10

Minako Miyama

Nationwide
Diversity & Inclusion
Promotion
Committees

315

4 REINFORCING
BUSINESS BASE

The efforts of DNP, aiming to create new value by
promoting D&I, are also highly recognized outside
the company.
DNP was selected as a Nadeshiko Brand
given to a company promoting active
participation of women by the Ministry of
Economy, Trade and Industry (METI) and theTokyo Stock Exchange (TSE).

In July 2021, we launched the Sponsorship Program, which facilitates thepromotion of female employees to upper managerial positions to foster anorganizational culture of harnessing differences among individual employees as
strengths and creating new value by increasing the diversity of decision-makers.
Female division and section managers, who are trainees in the program, aresponsored by the management of other divisions, who help the female managers
develop the skills required for higher positions in cooperation with the managersof the traineesʼ respective business units. In fiscal 2021, 10 women participatedin the program as candidates for high managerial positions in the future.

DNP received the highest Gold rating in the
PRIDE Index, which promotes the creation ofa workplace welcoming to LGBTQ+ employees
established by working with Pride, a voluntary
association.
DNP received BEST WORKPLACE for Diversity& Inclusion, the highest-level certification in
the D&I Award 2021 Program that certifies
companies that promote D&I, which wasestablished by JobRainbow Co., Ltd.

DNP Integrated Report 2022

67

TOP MESSAGE

THE DNP GROUP ʼ S

CREATION
1 VALUESTORYPROGRESS WITH

2 MEDIUM-TERM
MANAGEMENT PLAN

3 BUSINESSPROMOTION

4 REINFORCING
BUSINESS BASE

5 MANAGEMENTSTRUCTURE

RESULTS/
6 BUSINESSCORPORATE PROFILE

Diversity and Inclusion Efforts
For DNP to accelerate “Creating future standards,” an organizational culture that respects the differences of each
employee, accepts these differences mutually and utilizes this diversity is essential. We have made the mental andphysical health and safety of our employees a foundation and are moving forward with a variety of policies,
including enhancements to personnel development and the rebuilding of our personnel system.

Efforts to create value with D&I (diversity and inclusion) as a strength

Principal measures in FY2021
Basic policies on
diversity & inclusion

Major initiatives

Developing diverse
human resources• Start the process of recruitment to managerial positions• Implement Sponsorship Program (see page 67)• Increase business skill seminars• Hold Career Design Week that leads to employeesʼ career development plans

Fostering a corporate
culture to encourage
the active participationof diverse humanresources• DNP Group Declaration on Health• Start an engagement survey (see page 33)• Support Tokyo 2020 D&I Actions of the Tokyo Organising Committee of
the Olympic and Paralympic Games• Hold value creation seminars to learn knowledge of inside and outside the company• Hold internal events to promote employeesʼ awareness and actions for D&I
Hold the 2nd Diversity Week event• Implement organizational reform project(team reform workshop, inter-sectoral coaching, etc.)

Realizing diverse work
styles• Establish telecommuting and introduce Bring Your Own Device (BYOD)• Introduce the Workation system• Hold online DNP Family Friendly Days for employeesʼ families to see the workplace• Hold Kangaroo Club, a seminar to support balancing work and childcare

Management
DNP believes that diversity and inclusion (D&I) is importantfor creating new value, and we have established a Diversity &Inclusion Promotion Department under the direct control ofthe Head Office. This department was established as asystem to spread and establish D&I across the entire Group.
We are accelerating our activities in coordination with theDiversity & Inclusion Promotion Committee established ineach business unit and Group company.

The key to DNPʼs
D&I is a sense of
involvement.
Every employee
promotes D&I
as the subject ofdiversity andinclusion.

Head Office

Coordination

Diversity & Inclusion
Promotion Department
Share policy

Share results

Business units and head office development
department/Group companies
Diversity & Inclusion
Promotion Committee

Back-office operations

Front-office divisions

Administrative divisions

Regardless of age, jobs, region and language, sexual
orientation and having or not having disabilities,
or being an executive, manager or employee,

every person has a sense of involvement,
demonstrates the total strength of
All DNP and creates new value.

Programs of DNP to reform employee awareness and action
We are building flexible working systems and programs that consider the characteristics and careers of each employee.

A sense of involvement• Telecommuting • Flexible work systems • Discretionary work system • Short-time work system• Annual paid leave (up to 20 days/year, use on an hourly basis is available) • Childcare leave • Nursing care
• Life support special leave (expired paid leave available depending on the purpose such as nursing care, study, etc.)• Workation • Double-track career system (select managerial or specialist position)• Reemployment of retired employees (Return-to-Work System) • Side jobs and dual jobs outside the company• Public offering of jobs • Voluntary application system • Harassment Measures

KPI / Targets
DNP has established the following targets (KPIs) to increase the effects of enhanced management toward the promotion of D&I,
and we are working to meet these targets.
Ratio of female managers

5.6%(FY2018)

7.0% or above(FY2021 target)

Result in FY2021:

68

7.4%

Number of female managers
and leaders

doubleTarget:February 2016
level (430) by end-March 2022

Result in FY2021:

2.2 times

Ratio of male employees
taking childcare leave

54.3%(FY2020)

100%

Result in FY2021:

82.4%

TOPIC
2nd Diversity Week event held in February 2022
Like in 2021, we held an internal event to promote D&I among
the employees of Group companies. We held 22 types ofprograms, including online programs to allow participationeven during the COVID-19 pandemic and those allowing
participation from five minutes to facilitate the participation ofvarious employees working in different environments.
Responses to a questionnaire included “ I found changes inmy awareness or noticed something new (93%)” and “ I began
to understand the meaning of inclusion (90%).”Inclusion in the “ different me” VRexperience: A program allowing participants
to experience by simulation the daily life ofdementia and ADHD patients, working
fathers and mothers and LGBTQ people. The
participants developed the skill to remove
their conviction or bias, imagine themselvesin that situation, and thus view it from theother personʼs perspective. (Image provided
by SILVER WOOD Co., Ltd.)DNP Integrated Report 2022

69

5

TOP MESSAGE

THE DNP GROUP ʼ S

CREATION
1 VALUESTORYPROGRESS WITH

2 MEDIUM-TERM
MANAGEMENT PLAN

3 BUSINESSPROMOTION

4 REINFORCING
BUSINESS BASE

5 MANAGEMENTSTRUCTURE

RESULTS/
6 BUSINESSCORPORATE PROFILEMANAGEMENT STRUCTURE

Board of Directors
Yoshitoshi
Kitajima
Chairman(Aug. 25, 1933)

Brief personal history, title, responsibilities and status of important concurrent offices
May 1963 Joined the Company
Jul. 1967 Director of the Company
Jul. 1970 Managing Director of the Company
Jan. 1972 Senior Managing Director of the Company

Aug. 1975 Director, Vice President of the Company
Dec. 1979 President of the Company
Jun. 2018 Chairman of the Company

Hirofumi
HashimotoManaging Director(Jul. 8, 1957)

President(Sep. 18, 1964)

Brief personal history, title, responsibilities and status of important concurrent offices
Apr. 1987 Joined The Fuji Bank Ltd.
Mar. 1995 Joined the Company
Jun. 2001 Director of the Company
Jun. 2003 Managing Director of the Company
Jun. 2005 Senior Managing Director of the Company

Jun. 2009 Executive Vice President of the Company
Jun. 2018 President of the Company
Apr. 2022 President, Chairman of Sustainability
Committee of the Company

Masafumi
Kuroyanagi
Managing Director(May 4, 1960)

Senior Managing Director(Jun. 11, 1954)

Brief personal history, title, responsibilities and status of important concurrent offices
Apr. 1978 Joined the Company
Jul. 2003 General Manager of Personnel Dept. of the Company
Jun. 2010 Corporate Officer (Yakuin) of the Company
Jun. 2014 Managing Officer of the Company
Jun. 2018 Managing Director of the Company
Jun. 2020 Senior Managing Director, in charge of Personnel &Employee Relations Div., IR and Public Relations Div.,
Recruiting and Training Dept., Diversity Promotion
Dept. and Corporate Administration Dept., Chairmanof BCM Promotion Committee of the Company

Jun. 2021 Senior Managing Director (Daihyo
Torishimariyaku Senmu) of theCompany
Apr. 2022 Senior Managing Director (Daihyo
Torishimariyaku Senmu), managing
Human Capital Sector, Information
and Communications Sector of theCompany, and in charge of IR and
Public Relations Div. and Corporate
Administration Dept. of the Company

MinakoMiyamaDirector(Jan. 15, 1962)

Senior Managing Director(Sep. 10, 1952)

Brief personal history, title, responsibilities and status of important concurrent offices
Jun. 2017 Senior Executive Corporate Officer, in charge of
Living Spaces Operations, Mobility Operationsand High Performance Materials Operations of
the Company
Jun. 2021 Senior Managing Director (Daihyo Torishimariyaku
Senmu), managing R&D and Engineering
Management Sector, Lifestyle and Industrial
Supplies Sector and Electronics Sector, Chairmanof Corporate Ethics Committee of the Company

Tsukasa
Miyajima
Director(Aug. 23, 1950)

Managing Director(Jan. 14, 1955)

Brief personal history, title, responsibilities and status of important concurrent offices
Apr. 1978 Joined the Company
Oct. 2008 General Manager of Technology
Development Center of the Company
Jun. 2013 Director, in charge of Technical &Engineering Div., Technology Development
Center, Environment & Product Liability
Dept. of the Company

Jun. 2015 Managing Director of the Company
Apr. 2021 Managing Director, in charge of R&D andEngineering Management Div. andTechnology Development Center,
Sustainability Promotion Dept. of theCompany

Reasons for nomination as a candidate for Director
Mr. Satoru Inoue is nominated as a candidate for Director as it is expected that he will work to realize
the technical development strategy, etc., and proactively use digital transformation (DX) technologies
for business growth and improvement of business performance, and also appropriately oversee theentire Group, based on his considerable experience as a management executive in the DNP Group.

70

Oct. 2019 Corporate Officer, in charge of Recruiting
and Training Dept., and Diversity
Promotion Dept. of the Company
Jun. 2021 Director of the Company
Oct. 2021 Director, in charge of Recruiting andTraining Dept. and Diversity & Inclusion
Promotion Dept. of the Company
Jun. 2022 Director of TOKAI RIKA CO., LTD.

Brief personal history, title, responsibilities and status of important concurrent offices
Apr. 1990 Professor of Keio University, Faculty of Law
Apr. 2003 Registered as an attorney at law at the Daini
Tokyo Bar Association (current)
Jun. 2014 Director of the Company

Apr. 2016 Emeritus Professor of Keio University,
Professor of Asahi University, Faculty of
Law and Graduate School of Law(currently serving)

Reasons for nomination as a candidate for Outside Director and expected role
Mr. Tsukasa Miyajima is nominated as a candidate for Outside Director as it is expected that he will
provide advice and supervision over the Company ʼs management from an objective perspective
independent from the management executing the business, based on, among other things, his highlevel of insight and extensive experiences as a legal expert.

Reasons for nomination as a candidate for Director
Mr. Masato Yamaguchi is nominated as a candidate for Director as it is expected that he will work to realize business development,
etc., for business growth and improvement of business performance, and also appropriately oversee the entire Group, having
considerable management experience in the DNP Group based on his experience as a person responsible for technology, researchand development, and manufacturing of display products, etc., as well as new business development using ICT.

SatoruInoue

Brief personal history, title, responsibilities and status of important concurrent offices
Apr. 1986 Joined the Company
Apr. 2005 General Manager of VR Planning and Development
Office, DB Division, C&I Operations of the Company
Jul. 2014 General Manager of Recruiting and Training Dept.
of the Company
Jun. 2018 Corporate Officer, General Manager of Recruiting
and Training Dept., and Diversity Promotion Dept.
of the Company

Reasons for nomination as a candidate for Director

Mr. Kenji Miya is nominated as a candidate for Director as it is expected that he will work to realize the human resources
and labor strategy, etc., for business growth and improvement of business performance, and also appropriately oversee
the entire Group, based on his considerable experience as a management executive in the DNP Group.

Apr. 1975 Joined the Company
Dec. 1994 General Manager of R&D 1st Dept., General
Production Research Center of the Company
Jun. 2008 Corporate Officer (Yakuin), Deputy General
Manager of Display Components Operationsof the Company
Jun. 2012 Senior Corporate Officer, General Manager
of Fine Electronics Operations of theCompany

Jun. 2015 Corporate Officer (Yakuin), in charge of Finance& Accounting Division of the Company
Apr. 2019 Senior Corporate Officer, in charge of Finance &Accounting Division of the Company
Jun. 2021 Managing Director, in charge of Finance &Accounting Division of the Company

Ms. Minako Miyama is nominated as a candidate for Director as it is expected that she will work to realize humanresources development strategies, etc., for business growth and improvement of business performance, and also
appropriately oversee the entire Group, since she has a proven track record as the Companyʼs first female Corporate
Officer, leading the way in developing human resources and ensuring diversity, in addition to experience in the
research, planning and development segments.

Reasons for nomination as a candidate for Director

MasatoYamaguchi

Brief personal history, title, responsibilities and status of important concurrent offices
Apr. 1983 Joined the Company
Apr. 2004 General Manager of Finance &Accounting 1st Dept., Finance &Accounting Division of the Company
Jun. 2010 President and Representative Directorof DNP Total Process Warabi Co., Ltd.

Reasons for nomination as a candidate for Director
Mr. Masafumi Kuroyanagi is nominated as a candidate for Director as it is expected that he will work torealize financial strategies and capital policy, etc., for business growth and improvement of businessperformance, and also appropriately oversee the entire Group, based on his considerable management
experience in the DNP Group and knowledge of all aspects of financial accounting, including accountsettlement and taxation.

Reasons for nomination as a candidate for Director
Mr. Yoshinari Kitajima is nominated as a candidate for Director as it is expected that he will work torealize the Company ʼs group strategy toward business growth and improvement of businessperformance, and also appropriately oversee the entire Group, based on his considerable experience asa management executive in the DNP Group.

Kenji
Miya

Jun. 2018 Senior Corporate Officer, in charge of Strategic
Business Planning & Development Div. of the Company
Statutory Auditor of Nihon Unisys, Ltd. (current)
Jun. 2020 Managing Director, in charge of Strategic Business
Planning & Development Div. and Value Creation &Promotion Div. of the Company

Reasons for nomination as a candidate for Director
Mr. Hirofumi Hashimoto is nominated as a candidate for Director as it is expected that he will work torealize the management strategy and capital policy, etc., for business growth and improvement ofbusiness performance, and also appropriately oversee the entire Group, based on his considerable
management experience in the DNP Group and his achievements in the business planning departmentof the Company.

Reasons for nomination as a candidate for Director
Mr. Yoshitoshi Kitajima is nominated as a candidate for Director as it is expected that he will work toappropriately oversee the entire Group, based on his extensive knowledge as well as his considerable
experience and achievements regarding general management acquired in the course of having led the
DNP Group toward improvement of business performance during his term as President since 1979.

Yoshinari
Kitajima

Brief personal history, title, responsibilities and status of important concurrent offices
Apr. 1981 Joined the Company
Jun. 2015 Corporate Officer (Yakuin), General
Manager of Strategic Business
Planning Dept. of the Company
Apr. 2016 Director of Maruzen CHI Holdings
Co., Ltd.

Kazuyuki
Sasajima
Director(Aug. 8, 1953)

Brief personal history, title, responsibilities and status of important concurrent offices
Apr. 1982 Joined Tokyo Shibaura Electric Co., Ltd.
(Manufacturing Engineering Research Center)
Apr. 1989 Associate Professor of Saitama University,
Faculty of Engineering
Dec. 1999 Professor of Tokyo Institute of Technology, Graduate
School of Information Science and Engineering

Apr. 2016 Professor of Tokyo Institute of Technology,
School of Engineering, Department of
Systems and Control Engineering
Mar. 2019 Emeritus Professor of Tokyo Institute ofTechnology
Jun. 2020 Director of the Company

Reasons for nomination as a candidate for Outside Director and expected role
Mr. Kazuyuki Sasajima is nominated as a candidate for Outside Director as it is expected that he will
provide advice and supervision over the Company ʼs management from an objective perspective
independent from the management executing the business, based on, among other things, his highlevel of insight and extensive experience as an academic expert in information science and engineeringand systems and control engineering in addition to his experience as a researcher in a company.

DNP Integrated Report 2022

71

TOP MESSAGE

THE DNP GROUP ʼ S

PROGRESS WITH

CREATION
1 VALUESTORY

2 MEDIUM-TERM
MANAGEMENT PLAN

3 BUSINESSPROMOTION

4 REINFORCING
BUSINESS BASE

5 MANAGEMENTSTRUCTURE

RESULTS/
6 BUSINESSCORPORATE PROFILE

Board of Directors

Composition of the Companyʼs Board of Directors (As of June 29, 2022)

YoshiakiTamuraBrief personal history, title, responsibilities and status of important concurrent offices
Apr. 1979 Joined Asahi Glass Co., Ltd.
(currently AGC Inc.)
Mar. 2013 Representative Director, Executive Vice
President, Overall business management,
GM of Technology General Division,
Deputy leader of AGC Group Improvement
Activities of Asahi Glass Co., Ltd.

Director(Oct. 3, 1954)

Outside Directors

Mar. 2014 Executive Vice President, President ofGlass Company of Asahi Glass Co., Ltd.
Mar. 2017 Executive Fellow of Asahi Glass Co., Ltd.
(retired in Mar. 2019)
Mar. 2018 Outside Director of DIC Corporation (current)
Jun. 2018 Outside Director of Kawasaki Heavy Industries, Ltd.
Jun. 2022 Director of the Company

4 persons

Director(Dec. 22, 1954)

8 personsApr. 2015 Managing Executive Officer, Chief of Yokohama
Branch of TAISEI CORPORATION
Jun. 2019 Senior Managing Executive Officer, Member ofthe Board, Chief of Marketing & Sales (Building
Construction) Division II of TAISEI CORPORATION
Jun. 2021 Advisor of TAISEI CORPORATION
Jun. 2022 Director of the Company

Reasons for nomination as a candidate for Outside Director and expected role

Corporate
Management,
Business
Strategy

Sakae Hikita
Motoharu Kitajima
Ryuji Minemura
Morihiro Muramoto
Mitsuru Tsuchiya

Toshiki Sugimoto
Kiyotaka Nakagawa
Nobuyuki Asaba
Kazuhiko Sugita
Yoshiki Numano
Osamu Nakamura
Toru Miyake
Mitsuru Iida
Takahito Kanazawa

Ryota Chiba
Kazuhisa Kobayashi
Go Miyazaki
Naohiro Nishizawa
Kazuo Murakami
Hiroyuki Matsumura
Takuya Goto
Minoru Nakanishi
Hiroyuki Sone
Yasuyuki Tani
Ariyoshi Matsumura＊

Statutory Auditor＊

Financial/
HR/Labor,
Legal Affairs,
Management
Human
Compliance,
Accounting,
Resource
Risk
Capital Policy
Development Management
Initiatives

Overseas
Business

Yoshitoshi Kitajima●●

Yoshinari Kitajima●●

Kenji Miya●

Masato Yamaguchi●

Satoru Inoue●

Hirofumi Hashimoto●●

Masafumi Kuroyanagi●●

Minako Miyama

●

●

●

●

●

●

●

●

●

●

●

●

●

●
●

●

●
●

Yoshiaki Tamura●

Hiroshi Shirakawa

●

●

●

●

Toshio Sano

●
●

●

●

●

●

Naoki Hoshino

Kazuhisa Morigayama

R&D,
New
Business

●

●

●

●

IT
DX

●

Kazuyuki Sasajima

●
●
●
●

Makoto Matsuura
Taeko Ishii

72

ESG,
Diversity

Tsukasa Miyajima

Statutory Auditors*1 Outside Statutory Auditors＊1

Directors

Naoki Hoshino
Toshio Sano
Kazuhisa Morigayama 1

OutsideCorporate Officers

OutsideSenior Corporate Officers(of which 1 Female Statutory Auditor)

Skills and experiences of the Companyʼs Directors and Statutory Auditors

Statutory Auditors and Corporate Officers
Senior Executive Corporate Officers

OutsideStatutory Auditors

3 persons(of which 1 Female Director)

Mr. Hiroshi Shirakawa is nominated as a candidate for Outside Director as it is expected that he will provide theCompanyʼs management with advice and supervision from an objective perspective independent from the management
executing the business, based on his extensive and high level of insight into overall business management developed
through his long experience as a member of the management of Taisei Corporation and various important posts heldusing his extensive experience after assuming the position of Executive Officer of that corporation.

Standing Statutory Auditor

5 personsInternal Directors

Brief personal history, title, responsibilities and status of important concurrent offices
Apr. 1979 Joined TAISEI CORPORATION
Apr. 2011 Trustee, General Manager, Corporate Planning
Department, Corporate Planning Office of
TAISEI CORPORATION
Apr. 2012 Executive Officer, Deputy Chief of Corporate
Planning Office, General Manager, Corporate
Planning Department of TAISEI CORPORATION

Statutory
Auditors

12 persons

Mr. Yoshiaki Tamura is nominated as a candidate for Outside Director as it is expected that he will provide the Companyʼs
management with advice and supervision from an objective perspective independent of the management executing thebusiness, using his high level of insight based on his management experience and expertise in the manufacturing ofglass and other materials acquired at AGC Inc. and through his activities as an outside director of other listed companies.

Makoto Matsuura
Taeko Ishii 12 persons

Directors

Reasons for nomination as a candidate for Outside Director and expected role

HiroshiShirakawaInternal Statutory
Auditors●●

DNP Integrated Report 2022

73

TOP MESSAGE

THE DNP GROUP ʼ S

CREATION
1 VALUESTORYPROGRESS WITH

2 MEDIUM-TERM
MANAGEMENT PLAN

3 BUSINESSPROMOTION

4 REINFORCING
BUSINESS BASE

5 MANAGEMENTSTRUCTURE

RESULTS/
6 BUSINESSCORPORATE PROFILE

Corporate Governance
DNP focuses on the enhancement of corporate governance, an important management issue, in order to contributeto the sustainable development of society, increase its corporate value and earn the trust of all stakeholders. We
continue to increase accuracy in decision-making, maintain appropriate and prompt performance of duties basedon decisions made and build and operate a system of overseeing and auditing the performance.

Roles and responsibilities of the Board of Directors●

Overview of DNPʼs Corporate Governance
DNP courageously takes on the challenge of seizing various
business opportunities through sound entrepreneurship to
steadily grow its businesses over the medium and long term
based on its corporate philosophy, “Connect people andsociety and provide new value.” We continue to believe thatearning the trust of all stakeholders is essential and work to
improve corporate governance, including our internal control
systems. We strive to make accurate management decisions,appropriately and promptly perform duties, build and operatea system overseeing and auditing our performance of ourduties and provide thorough training and education toincrease employee awareness regarding legal compliance.
In recent years in particular, risks (factors contributing tochange, including the rapid change of the environment andsocioeconomic conditions) which may affect our business are
becoming increasingly diverse. In response, we are working
to strengthen the process for appropriately assessing risks

that affect the entire Group, applying our assessments in our
medium- to long-term management strategies and converting
the risks into business opportunities. In April 2022, theSustainability Committee headed by the president was
reorganized to accelerate these efforts to voluntarily create asustainable, better future. This organization will lead mediumto long-term risk management, the survey of business
opportunities, the inclusion of risks and opportunities in ourmanagement strategies, etc. We have a system led by three
cooperating committees that comprehensively addresscompany-wide risks and appropriately respond to any issue,
including the BCM Promotion Committee, which ensures thesafety of employees in emergencies such as natural
disasters, and the Corporate Ethics Committee, which
reduces risks by increasing employee awareness regarding
legal compliance.

Structural diagram of DNPʼs corporate governance and internal control system
General Meeting of Shareholders
Board of Directors

Audit

Advisory Committee

Audit

Advisory Committee
As part of our efforts to strengthen the supervisory functionof the Board of Directors, the Company has established an
Advisory Committee consisting of independent outside
directors and outside statutory auditors to ensure thetransparency and objectivity of procedures related todecisions such as on the nomination and remuneration of theCompanyʼs directors and corporate officers. In the fiscal year
under review, the Advisory Committee consisted of three (3)outside commissioners (Director Miyajima, Director Sasajima
and Statutory Auditor Ishii) and deliberated on the policy andamount of remuneration for directors and corporate officers
as well as the skills of candidates for directors to supervise
the management of the Company.

ReportingGroupcompanies
Check
Guidance
Training

BCM Promotion Committee
Audit

BCM Promotion Committee Office(Employee compliance promotion)

Corporate Ethics Committee
Corporate Ethics Committee Office(Various committees of specialists) Operational support

Audit
Guidance

Information Disclosure Committee

ReportingAssistance

Information Security Committee
Quality Assurance & Product Safety Committee

Main divisions in charge of various laws and regulations(Sustainability Promotion Department, Strategic Business Planning & Development Division,
Personnel & Employee Relations Division, R&D and Engineering Management Division,
Finance & Accounting Division, Intellectual Property Division, IR and Public Relations
Division, Corporate Communication Division, Legal Affairs Department, etc.)

Audit
Guidance
Reporting
Coordination

Management strategy• Verification of the progress of operations in line with the Medium-term Management Plan
• Implementation of capital policy

Sustainability• Concept of ESG management• Efforts toward DNP Group Environmental Vision 2050
• Improvement of the company-wide risk management system

Shareholder returns
and dialogue withshareholders• Interim and year-end dividends• Share buybacks and retirement of treasury stock• ESG briefing and overview of the results of financial result briefing• Publication of the integrated report

Audit Unit

Business
units(Business continuity crisis measures for natural disasters, etc.)

Auditing Department

Head office

Audit(Management, mitigation of company-wide risks)

Sustainability Committee Office

Corporate
Officers inchargeOperating units

In order to enhance the speed and efficiency of management
activities, the Company has established a Management
Committee consisting of executive directors to review anddeliberate on matters such as management policies,
management strategies and important management matters.

In the fiscal year under review (fiscal year ended March 2022), primarily the following proposals were discussed.

Sustainability Committee

ReportingAccounting Auditors

Management Committee

Status of Board of Directors meetings held

Regularreporting(Medium- to long-term business risk management,
identification of business opportunities)

74

The Company has four (4) outside directors and three (3)outside statutory auditors, all of whom are independent
directors or statutory auditors who meet the “independence
standards” stipulated by the Tokyo Stock Exchange and theCompany. We believe that independent directors andstatutory auditors ensure transparency of management andprotect the interests of general shareholders by speaking out
on agenda items at meetings of the Board of Directors froma standpoint independent of management, based on theirvarious specialized knowledge and experience.

Management Committee
Representative Directors(Autonomous
implementation,
inspection, review,
improvement)

The Company is a company with a Board of Statutory
Auditors, which consists of five (5) members, including one(1) statutory auditor who has considerable knowledge offinance and accounting. Each statutory auditor conducts
audits of the execution of duties by directors in accordancewith the auditing standards and assignments determinedby the Board of Statutory Auditors and requests reports on
the execution of duties from directors, corporate officers
and others as necessary. Each statutory auditor attends all
meetings of the Board of Directors and makes necessarycomments on agenda items.

●

Recommendation(Board of) Statutory Auditors

Consulting●

The Companyʼs Board of Directors is structured to enabledirectors with specialized knowledge and experience in awide range of business fields to participate in management
decision-making aimed at realizing our corporate
philosophy to carry out their duties with responsibility andauthority and to supervise the execution of duties by otherdirectors.
In principle, the Board of Directors meets once a month,with corporate officers attending as rapporteurs whennecessary, to deliberate and decide on importantmanagement issues. The criteria for agenda items to besubmitted to the Board of Directors are clarified in the
Board of Directors Regulations, which were established incompliance with laws and ordinances and the Articles ofIncorporation. In terms of other decision-making andbusiness execution, the Company strives to improve
efficiency by delegating appropriate authority from theexecutive directors to the corporate officers in charge ofeach basic unit or the head of each unit in accordance withthe organizational rules, etc.

Governance• Evaluation of the effectiveness of the Board of Directors• Appointment of advisory committee members• Status of responses to the corporate governance code

(revised in June 2021)• Overview of the results of compliance questionnaires taken by employees

DNP Integrated Report 2022

75

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THE DNP GROUP ʼ S

CREATION
1 VALUESTORYPROGRESS WITH

2 MEDIUM-TERM
MANAGEMENT PLAN

3 BUSINESSPROMOTION

4 REINFORCING
BUSINESS BASE

5 MANAGEMENTSTRUCTURE

RESULTS/
6 BUSINESSCORPORATE PROFILE

Corporate GovernanceEvaluation of the effectiveness of the Board of Directors overall
We have been evaluating the overall effectiveness of theBoard of Directors around April each year since theenforcement of Japanʼs Corporate Governance Code in 2015as an opportunity to receive frank opinions from the Board
members about the activities of the Board of Directors. We
conduct a questionnaire survey consisting of several dozen
questions on the following large items (on a 1-to-3 scale andopen-ended questions) which all directors and auditors
answer, analyze the result and present the issues to beaddressed at a meeting of the Board of Directors based on

Efforts to revitalize the Board of Directors

the outside directorsʼ opinions regarding the results of theanalysis.
The survey considers the opinions of externalorganizations to ensure objectivity. The survey is revised as
appropriate, taking into account social trends. In addition, weinterview the executives of external organizations as
appropriate to further examine the survey results. We are
improving all of the functions of the Board of Directors,
including its supervisory function, through the ongoing seriesof steps in this process.

The following table shows an overview of key activities for improving the Board of Directors based on the effectivenessassessments conducted seven times in the past.
Large
questionnaire
items

1

Supervisory function of
the Board of Directors

2

Appointment andcompensation systemof directors

3

Operation of the Boardof Directors

4

1st survey•- Mar. 2016

Establishment ofAdvisory Committee

Establishment of thesecretariat of the Boardof Directors• Organization of proposals
to be submitted

2nd survey- Mar. 2017

Large items in the questionnaire
Examine questionsin the survey(opinions of external
parties)1

Distribute questionnaires
Report the status of issues to beaddressed and improvements made andfuture issues to the chairperson of theBoard of Directors and outside directors/
statutory auditors

Secretariat of theBoard of Directors
collects and analyzes
questionnaires

Supervisory function of the Boardof Directors

2

Appointment and compensation
system of directors

3

Operation of the Board of Directors

4

Relationship with shareholders, etc.

5

Support and cooperation ofoutside directors/statutory auditors•

3rd survey- Mar. 2018

4th survey•

Establishment of
Business Council

5th survey•

Addition of outside
directors(2→3)

6th survey•

Addition of outside
directors(3→ 4)- Mar. 2019

- Mar. 2020

Present the result of effectivenessassessment at the Board of Directors
meeting in May- Mar. 2021

Discuss specific details about issues tobe addressed in outside directors/
statutory auditors meetings, etc.

•

Appointment of a femaleinternal director and afemale outside statutory
auditor• Revision of Group
governance system(revision of regulations foraffiliated company
management rules)• Revision of company-widerisk management system(reorganization of
Sustainability Committee)- Mar. 2022

Outside directors/statutory auditors meetings on July 6, 2022

Regular meetings ofoutside directors/
statutory auditors• Factory visits by outside
directors/statutory auditors•• Financial resultspresentation and feedback
to the Board of Directors••

Advance briefings foroutside directors/
statutory auditors on theagenda of the Board of
Directors (online)• First ESG briefing andDevelopment andannouncement of skill
matrixfeedback to the Board of
Directors•

In the seventh effectiveness assessment conducted this year
(2022), we reconfirmed the problems that had beenaddressed in the past and selected areas in which theeffectiveness of the Board could be increased. We reflectedon the deliberations of the Board of Directors held between
April 2021 to March 2022 (12 meetings in total), and the1(Regular risk management and survey of business
opportunities led by the Sustainability Committee)
Outside Director

Outside Director

76

Outside Statutory Auditor

Kazuhisa Morigayama

Outside Statutory Auditor

Makoto Matsuura

Outside Statutory Auditor

Feedback of opinionsfrom shareholders, etc.,
including daily IR
activities•

Enhancement ofcommunication between
outside directors/
statutory auditors

secretariat of the Board of Directors analyzed theeffectiveness of questionnaires taken by all directors andauditors. Following the analysis performed by the outside
directors/statutory auditors, we confirmed that the following
issues will be addressed as a result of the assessment by the
Board of Directors in May.

2

Maintenance and operational
improvement of the risk management
system for all DNP Group companies

Outside Director

Distribution in advance ofmaterials concerning
agenda items submitted
to the Board of Directors
to outside directors/
statutory auditors

Results of the exercise of
voting rights at theAnnual General Meetingof Shareholders and thestatus of SR activities arereported annually to theBoard of Directors.

Addition of Advisory
Committee members(2→3)

Issues to address• Further efforts on risk
from April
management
onwards

Outside Director

Support and cooperationof outside directors/
statutory auditors•

7th survey

Tsukasa Miyajima Kazuyuki Sasajima Yoshiaki Tamura Hiroshi Shirakawa

5

•

•

Explain the purpose of survey at the Boardof Directorsʼ meeting in March

Relationship withshareholders, etc.

3Strengthening of the system forcollecting the opinions of shareholders
and institutional investors throughdaily IR activities and making
proposals to management(IR and Public Relations Division)

Resumption of activities for providing
information that had been suspended
due to COVID-19, such as factory tours
for outside directors/statutory auditors
to enable an understanding of
DNP ʼs activities.

Taeko Ishii

DNP Integrated Report 2022

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THE DNP GROUP ʼ S

CREATION
1 VALUESTORYPROGRESS WITH

2 MEDIUM-TERM
MANAGEMENT PLAN

3 BUSINESSPROMOTION

4 REINFORCING
BUSINESS BASE

5 MANAGEMENTSTRUCTURE

RESULTS/
6 BUSINESSCORPORATE PROFILE

Outside Director Message

I will fulfill my responsibilities to enhance DNPʼscorporate value.
these types of human resources do not naturally appear fromout of the blue either inside or outside the company. With
this in mind, it is also crucial to develop a system for
cultivating employees who actively take on the challenge ofpromoting reform as well to design incentives that help raise
corporate value. Besides a wide variety of level-specific,
selective and elective training, as a training system for
employees to take on the challenge of reform, we alsoestablished a special “next-generation management leader”
system for eligible employees based on our belief thatexperience in multiple business divisions is essential forbecoming a manager. As discussed at the Advisory
Committee, during fiscal 2022 DNP will introduce a restricted
stock compensation system (for executive directors andexecutive officers) that reflects our intention to adopt asystem that provides incentives for improving corporate
value.

Tsukasa
Miyajima
Outside Director
Professor Emeritus at Keio
University and lawyer. Mr.
Miyajima was appointed as an
outside director in June 2014 andis currently in his ninth year in
office. He has served as amember of the Advisory
Committee, which wasestablished in 2015 as avoluntary advisory body forimportant management matterssuch as the nomination andremuneration of directors/
statutory auditors.

I assumed the duties of outside director of DNP in June
2014. Subsequently, Japanʼs Corporate Governance Code( “Code” ) was adopted in 2015 and so since then I have been
responsible for an assortment of initiatives aimed at
improving DNP's governance from the standpoint of an
outside director through my participation in each evaluationof the effectiveness of the Board of Directors, which havebeen implemented seven times to date. Responding to theCode often tends to be somewhat of a formality. However,
DNP has devised numerous innovations for making theevaluation questionnaire even more meaningful. These steps
include commissioning an external organization to undertakeinterviews with outside directors/statutory auditors, arranging
the wording of questions in accordance with the externalorganization's review, sharing details written in the freecommentary column among all outside directors and thendiscussing countermeasures. By taking these measures, thecontent of the evaluation is quite complete and even goesbeyond the intention of the Code. Through my participation inmeetings of the DNP Board of Directors, Advisory Committee
and regularly held meetings of outside directors/statutory
auditors, I have also provided my advice andrecommendations to the management team regarding urgent
issues that we have identified and analyzed through these78

evaluations of the effectiveness of the Board of Directors.
At DNPʼs Board of Directors meetings, besides
management issues that must be addressed on a daily basis,
agenda items covering various themes such as how to
improve corporate value while contributing to society arebrought up for discussion from a medium-to-long-term
perspective. Every director, whether an internal or outside
director, is a board member and is responsible for making
quick and accurate decisions concerning management after
careful discussion based on their respective knowledge andexperience cultivated to date. At the same time, directors
must always be mindful of reliably monitoring and supervising
DNPʼs corporate activities. That said, the world is undergoingprofound changes, which makes predicting the future evenmore challenging. Within this evolving business environment,
it is not always easy for outside directors like me who are notprofessional corporate managers to make appropriate
decisions taking into account DNPʼs overall business portfoliothat spans a diverse range of business fields while also
considering risks upon incorporating long-term outlooks suchas for climate change and forecasting market trends several
years in advance.
Even so, I believe the most important task for each andevery outside director/statutory auditor is to continuously

focus on understanding DNPʼs business fields. DNPʼs outside
directors/statutory auditors have diverse backgrounds,
including those with management experience at othercompanies, technical academic experts and lawyers. Theseoutside directors/statutory auditors routinely provide
perspectives that differ from those of internal directors andexecutive officers and their knowledge gained from their own
professional experiences allows even deeper discussions. As
such, I believe that the role of outside directors/statutory
auditors in raising corporate value is being adequately
fulfilled. In that sense, I will draw on my knowledge as a legal
scholar and my experience as an outside director at othercompanies to maintain a healthy sense of tension with the
management team. (I believe that length of tenure has little
connection with whether relationships with the management
become too cozy and that maintaining this tension depends
on the mindsets of outside directors/statutory auditors.)
I consider it my duty to continuously voice appropriate
opinions that strengthen the decision-making process of theBoard of Directors and deliberations at the Advisory
Committee.

Going forward the management team will emphasize
corporate culture for taking on challenges while continuallylistening carefully to internal and external opinions toenhance discussions on ways of improving corporate value
over the medium to long term as well as continually advising
management and fulfilling my supervisory responsibilities
with the aim of further enhancing the effectiveness of DNPʼs
Board of Directors as a whole.

Meanwhile, the skill matrix used by the Advisory Committee
as part of our response to the Code is also published in thisintegrated report. This matrix plots the skills of each officer
against the skill categories that form the basis for improving
corporate value over the medium to long term in DNPʼswide-ranging business fields and also catalogs the Boardʼsbalance and diversity. Rather than list the know-how needed
for growing specific businesses as a “skill” category, thismatrix was designed based our belief in the importance ofcontinuously considering whether the Board of Directors, as
the decision-making body entrusted with management by theshareholders, is composed of persons capable of discussions
that will lead to the realization of DNPʼs vision. However,

DNP Integrated Report 2022

79

TOP MESSAGE

THE DNP GROUP ʼ S

CREATION
1 VALUESTORYPROGRESS WITH

2 MEDIUM-TERM
MANAGEMENT PLAN

3 BUSINESSPROMOTION

4 REINFORCING
BUSINESS BASE

5 MANAGEMENTSTRUCTURE

RESULTS/
6 BUSINESSCORPORATE PROFILE

Corporate GovernanceCompensation paid to directors and statutory auditors
Matters concerning policies regarding the amounts and calculation methods for determining compensation for
directors and statutory auditors
The policy for deciding the details of the compensation for each individual director for the fiscal year under review (ended March
31, 2022) is as follows:
Date for resolution

Details of resolution

June 9, 2016

Compensation for board directors shall be within an annual amount of 1.4 billion yen(compensation for outside directors shall be within an annual amount of 80 million yen).

12

June 28, 2007

Compensation for statutory auditors shall be within an annual amount of 180 million yen.

5

Matters concerning the policy for deciding the details ofcompensation for each individual director
To determine a policy for deciding the details of compensationfor each director, including the amount thereof, the Board of
Directors established standards by referring to objective
compensation market data. The Advisory Committee, which
consists of independent outside directors (two outside directors
and one outside statutory auditor), then went through a processof deliberation and examination. The Company took the detailsof this deliberation into consideration and passed a resolution
on a policy for deciding the details of compensation for the
fiscal year ended March 31, 2022 at a meeting of the Board of
Directors held on April 19, 2021.
In the fiscal year ended March 31, 2022, the Board of
Directors decided to entrust Yoshinari Kitajima, President withthe task of deciding a specific amount of compensation for eachdirector, and Mr. Kitajima, who accepted the task, decided eachamount. The Board of Directors entrusted him with thisauthority because the president is best positioned to conduct
the evaluation of duties each director is responsible for while
simultaneously looking at results from broad perspectives.
At DNP, the Advisory Committee conducts an assessment
from many perspectives, including consistency with a decided
policy to make sure that the president exercises the entrusted
authority appropriately, and the president then decides thedetails of compensation for each director, taking into
consideration the results of such assessment.
The amount of compensation for each director was
decided, as mentioned above, after the Advisory Committee
conducted an assessment from multiple perspectives including
consistency with the determined policy. Therefore, theCompany considers that the details of compensation for eachdirector for the fiscal year ended March 31, 2022 areconsistent with the policy.
(1) Executive directorsʼ compensation
Executive directorsʼ compensation consists of fixedcompensation and performance-based compensation.
Fixed compensation is basically based on position andis determined taking into consideration such factors as job
duties handled and responsibilities. Performance-based
compensation is primarily determined taking into
consideration consolidated business results for the fiscal
year and the degree of contribution. Fixed compensationand performance-based compensation account for
approximately 70% and 30%, respectively, in terms of thecomposition of remuneration. Additionally, to ensure this80

Number of members

remuneration system is truly linked to medium- tolong-term corporate growth and to shareholder value
improvement, a portion of fixed remuneration for executive
directors (10% in principle) is contributed to the Company's
directorsʼ shareholding association every month for thepurchase of treasury stock and these shares shall be held
for the duration of the term of office. Taking these factors
into consideration, for the fiscal year ended March 31,
2022, fixed compensation and performance-based
compensation accounted for 65% and 35%, respectively,in terms of the composition of remuneration. Goingforward, the ratio of performance-based compensation will
be raised.
The indicators for performance-based compensation
are consolidated operating income, net income attributableto parent company shareholders and return on equity(ROE).
(2) Matters concerning performance-based
compensation, etc.
Indicators of performance and the calculation method used
for performance-based compensation, etc., are describedin section 1 of “Matters concerning the policy for deciding
the details of compensation for each individual director”
above. Targets for consolidated operating income, net
income attributable to parent company shareholders and
ROE for the fiscal year under review were 57 billion yen,
65 billion yen and 5.0%, respectively. The results were
66.7 billion yen, 97.1 billion yen and 9.1%, respectively.
These indicators were selected to clearly apply the
consolidated results in a business year to performancebased compensation.
Diagram of compensation in the fiscal year under review
65%

35%

Fixed compensation

Performancebased
compensation[ Directorsʼ shareholding association ](3) Compensation for outside directors andstatutory auditors
Regarding outside directors and statutory auditors, fromthe perspective of maintaining their independence, no
performance-based compensation shall be provided, andonly fixed compensation shall be provided. Compensation
for statutory auditors is calculated within the compensation
amount limit approved at the General Meeting of
Shareholders and compensation for statutory auditors isdetermined based on discussions by the statutory auditors.
* DNP adopted a system of stock compensation at the meeting of theBoard of Directors held on May 13, 2022, which was approved at
the 128th General Meeting of Shareholders held on June 29,2022. The following provides an overview of the policy for thedecision.

i. Executive directorsʼ compensation
Executive directorsʼ compensation consists of 1. fixedcompensation, 2. a performance-based bonus and 3. stockcompensation.
The percentages of the whole that are (a) fixedcompensation and (b) the performance-based bonus andstock compensation are, as a guide, (a) 55% and (b) 45%.
The standard percentage of total compensation that isstock compensation is 12%. These percentages represent
the case in which the targets for performance-based
compensation have been achieved.
The policy for determining the amount of fixedcompensation, performance-based bonuses and stockcompensation is described below.
1. Fixed compensation: The amount of fixed compensation
is determined based on the position or title of the director
using objective market data about compensation as areference and taking into account factors such as theduties and responsibilities of the director. Fixedcompensation is paid every month.

environmental indicators in addition to consolidated
operating income and ROE.
ii. Compensation for outside directors andstatutory auditors
Compensation for outside directors and statutory auditors
consists only of fixed compensation and is not linked toperformance in view of ensuring the independence of theoutside directors from DNPʼs business operations. The
amount of compensation for statutory auditors isdetermined through consultation with statutory auditors
within a range resolved at the General Meeting of
Shareholders.
iii. Delegation of decisions regarding details ofcompensation, etc., for each director
Decisions on specific details regarding the amount ofcompensation for each director are delegated to the
President at the Board of Directorsʼ meeting.
The Advisory Committee conducts assessments frommany perspectives, including consistency with decision
policy to ensure that the President exercises the delegatedauthority appropriately. The President then decides thedetails of compensation for each director, taking into
consideration the results of such assessments.
Diagram of compensation after the
introduction of stock compensation plan
Performance-based
compensation

55%
Fixed compensation

45%
Bonus
Stock compensation

2. Performance-based bonus: The amount of theperformance-based bonus is determined by considering
the level of contribution of the director in the fiscal year
under review using consolidated operating income, net
income attributable to parent company shareholders andROE as indicators. The performance-based bonus is paid
after calculation based on the financial results for the
fiscal year under review after the end of each fiscal year.
3. Stock compensation: DNP has adopted a restricted
stock compensation system to increase the incentive forthe medium- to long-term increase of corporate value andfor directors to hold shares, thereby sharing profit withshareholders.
The transfer of shares allotted to executive directors is
restricted until their retirement. The method of calculating
the number of shares whose restriction to transfer is lifted
will be determined (a) for the portion that requires thecontinuous service of the director at DNP for a certain
period of time (condition of term of office) and (b) for the
portion that requires the achievement of target indicators(currently consolidated operating income and ROE)
(performance condition) set as goals in the Medium-termManagement Plan to be an incentive for the achievementof the medium-term management goals. In the future, DNP
will consider introducing non-financial indicators such as
DNP Integrated Report 2022

81

TOP MESSAGE

THE DNP GROUP ʼ S

CREATION
1 VALUESTORYPROGRESS WITH

2 MEDIUM-TERM
MANAGEMENT PLAN

3 BUSINESSPROMOTION

4 REINFORCING
BUSINESS BASE

5 MANAGEMENTSTRUCTURE

RESULTS/
6 BUSINESSCORPORATE PROFILE

Corporate GovernanceTotal compensation paid by category of director/statutory auditor, total compensation by type and the number of
directors and statutory auditors covered
Total compensation by type (¥ million)

Number of directors
and statutory
auditors covered

Category of director/
statutory auditor

Total compensation(¥ million)

Fixedcompensation

Performance-based
compensation

Fixed
compensation

Directors (excluding outside directors)

835

577

258

−

9

Statutory auditors (excluding outside auditors)

57

57

−

−

2

Outside directors and auditors

137

137

−

−

9

Notes:
1. Amounts of performance-based compensation are provisions for bonuses for directors and statutory auditors for the fiscal year ended March 31, 2022.
2. There were six internal directors, two internal statutory auditors and six outside directors as of the end of the fiscal year ended March 31, 2022.

Company directors and total compensation
Name

Total
compensation

Total compensation by type (¥ million)
Director typeCompany(¥ million)

Yoshitoshi Kitajima
Yoshinari Kitajima

364

Director

209

Director

Dai Nippon Printing Co., Ltd.
Dai Nippon Printing Co., Ltd.

Fixed
compensation

Performance-based
compensation

Non-monetarycompensation, etc.

274

90

−

141

−

68

Note:
1. Total compensation is shown only for those with compensation of at least 100 million yen.

Compensation paid to accounting auditors(1) Compensation paid to accounting auditors
Fiscal year ended March 31, 2021
Category

Fiscal year ended March 31, 2022

Compensation for audit
certification (¥ million)

Compensation forother services (¥ million)

Compensation for audit
certification (¥ million)

Compensation forother services (¥ million)

Dai Nippon Printing Co., Ltd.

122

0

122

0

Consolidated subsidiaries

146

0

135

0

Total

268

0

257

0

(2) Compensation paid to individual member firms affiliated (6) Reason Board of Statutory Auditors consented towith the same network, to which auditors belong
compensation for the accounting auditor(excluding the compensation paid to KRESTON International (1))
The Companyʼs Board of Statutory Auditors considers
Nonesuch areas as details of the accounting auditorʼs audit
plan, the state of job execution in the previous fiscal year(3) Other material compensation details
and the calculation basis of estimates of compensation byNone
obtaining necessary materials from and listening toreports from directors, relevant internal departments and(4) Details of services other than auditing work provided byaccounting auditors. As a result, the Board of Statutory
the accounting auditor to the submitting company
Auditors consented with the amount of compensation for
Services other than auditing provided by the accounting
the accounting auditor submitted by the Company.
auditor to the Company are formalities-related work.

Stockholdings(1) Basis of classification of investment securities andrationale
The Company does not possess investment securities forpure investment purposes aimed at obtaining profits
through fluctuations in stock prices or by receiving
dividends. The investment stocks acquired by the Company
are for the purpose of strengthening relationships withcustomers in implementing sales strategies andstrengthening collaborative relationships with partners forthe co-development of new technologies and new products
and these are classified as stocks held for reasons otherthan for pure investment purposes.

2. Number of stocks and amounts recorded on balance sheets(Stocks)(¥ million)

Non-listed stocks

111

5,455

Stocks other than
non-listed stocks

129

335,987

Number ofcompanies(Stocks)

Total amount ofacquisition cost
pertaining to theincrease in
number of shares

Reason for increasein number of shares(¥ million)

Non-listed
stocks

5845

For strengthening ourbusiness alliance

Stocks other than
non-listed stocks

7

20

For enhancing ourbusiness relationship(Stocks for which the number of shares decreased in thefiscal year ended March 31, 2022)
Number ofcompanies(Stocks)

Total amount of sale value
pertaining to the decrease in
number of shares(¥ million)

Non-listed stocks

5361

Stocks other than
non-listed stocks

30

14,367(To next page)

Reduction of strategic shareholdings
As a result of efforts for strategic shareholding reductions in the fiscal year ended March 31, 2022, the Company decreased
the number of listed stocks by 21 and moved forward with the improvement of capital efficiency.
Stockholdings of listed stocks
Number of stocks

250

237

222

204

191
150

(5) Determination of compensation for audit services
The Companyʼs compensation for auditing services isdetermined based on a variety of factors, including thenumber of expected days for the audit and the company
size.

129

-- 21 stocks(year on year)

2016.382

Total amounts recorded onbalance sheets(Stocks for which number of shares increased in the fiscal
year ended March 31, 2022)(2) Stocks held for reasons other than for pureinvestment purposes
1. Stockholding policy, method for validating rationale forstockholdings and details of validation at Board of
Directors concerning the propriety of individual
stockholdings
The Company specifically closely examines individual
stocks based on trends in the status of business
transactions with the company issuing the stock, trends inbusiness results of that company, the Companyʼs own
business conditions and medium- to long-term economic
rationality and future prospects, and the Company
periodically verifies the significance and purpose of holding
a stock. As a result, the Company sells stocks it
determines have diminished significance.
In the fiscal year ended March 31, 2022, the numberof shares of 35 stocks held by the Company decreased aslisted on the right.

Number ofcompanies

2017.32018.32019.32020.32021.32022.3DNP Integrated Report 2022

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THE DNP GROUP ʼ S

CREATION
1 VALUESTORYPROGRESS WITH

2 MEDIUM-TERM
MANAGEMENT PLAN

3 BUSINESSPROMOTION

4 REINFORCING
BUSINESS BASE

5 MANAGEMENTSTRUCTURE

RESULTS/
6 BUSINESSCORPORATE PROFILE

Corporate Governance

3. Holding category, company name, number of shares, amount recorded on the balance sheet and holding purpose of stocks held
for reasons other than for pure investment purposes
Company name

Stocks held for reasons other than pure investment purposes

Company nameFiscal year ended
March 31, 2022
Number of shares
Amount recordedon balance sheet(¥ million)

Recruit Holdings Co., Ltd.
The Dai-ichi Life
Insurance Co., Ltd.
Dexerials Corporation

Ezaki Glico Co., Ltd.
FUJIFILM Holdings
Corporation
Lion Corporation
Mizuho Financial Group, Inc.
Taisho Pharmaceutical
Holdings Co., Ltd.
Aica Kogyo Co., Ltd.
Meiji Holdings Co., Ltd.
Toyo Suisan Kaisha, Ltd.
Kobayashi PharmaceuticalCo., Ltd.
Kikkoman Corporation
Hakuhodo DY Holdings Inc.
YAKULT HONSHA CO., LTD..
Ajinomoto Co., Inc.
Asahi Group Holdings, Ltd.

84

38,600,000

Fiscal year ended
March 31, 2021
Number of shares
Amount recordedon balance sheet(¥ million)

40,100,000

208,980

216,580

6,606,600

6,606,600

16,50912,5653,125,000

3,125,000

10,453

5,912

1,618,647

1,617,783

6,021

7,191

685,965

685,965

5,146

4,507

3,140,665

3,140,665

4,277

6,780

2,713,431

2,713,431

4,251

4,338

692,700

692,700

3,934

4,945

1,293,743

1,293,743

3,866

5,162

564,400

564,400

3,730
794,980

4,018
794,980

3,474

3,696

319,000

318,272

3,132

3,287

350,940

350,940

2,853

2,312

1,720,000

1,720,000

2,657

3,173

350,500

350,500

2,285

1,962

630,931630,931

2,192

1,429

480,029

480,029

2,141

2,239

YAMATO HOLDINGS
CO., LTD.

830,300

830,300

1,903

2,519

KADOKAWACORPORATION

584,000

292,000

1,880

1,254

Mitsubishi UFJ
Financial Group, Inc.

2,399,760

2,399,760

1,824

1,419

Sapporo Holdings
Limited759,277

759,277

1,751

1,741

Companyʼsownershipof DNP
sharesFiscal year ended
March 31, 2022
Number of shares
Amount recordedon balance sheet(¥ million)

Holding purpose, quantitative effect of ownership andthe reason for increase of number of shares

TOKYO OHKA KOGYO CO.,
LTD.

(Y/N)

MORINAGA & CO., LTD.

Y

We hold the companyʼs shares aiming to enhance our business relationship. While thequantitative effect of ownership is not stated, we have verified the significance and purpose of
our shareholding through close investigation of the transaction status and the prospects ofbusinesses with the company. After reviewing the significance and purpose of the shareholding,we have sold a part of our shareholding in the fiscal year ended March 31, 2022.

Y

We hold the companyʼs shares aiming to enhance our business relationship.
While the quantitative effect of ownership is not stated, we have verified thesignificance and purpose of our shareholding through close investigation of thetransaction status and the prospects of businesses with the company.

S&B FOODS INC.

N

We hold the companyʼs shares aiming to strengthen our business alliance. Whilethe quantitative effect of ownership is not stated, we have verified significanceand purpose of shareholding through close investigation of the transaction status
and the prospects of businesses with the company.

Unicharm Corporation

Y

We hold the companyʼs shares aiming to enhance our business relationship. While thequantitative effect of ownership is not stated, we have verified significance and purposeof shareholding through close investigation of the transaction status and the prospectsof businesses with the company. In the fiscal year ended March 31, 2022, the numberof shares increased because of the enhancement of our business relationship.

Y

We hold the companyʼs shares aiming to enhance our business relationship.
While the quantitative effect of ownership is not stated, we have verified thesignificance and purpose of our shareholding through close investigation of thetransaction status and the prospects of businesses with the company.

Y

We hold the companyʼs shares aiming to enhance our business relationship.
While the quantitative effect of ownership is not stated, we have verified thesignificance and purpose of our shareholding through close investigation of thetransaction status and the prospects of businesses with the company.

Hulic Co., Ltd.

Y

We hold the companyʼs shares aiming to enhance our business relationship.
While the quantitative effect of ownership is not stated, we have verified thesignificance and purpose of our shareholding through close investigation of thetransaction status and the prospects of businesses with the company.

Oji Holdings Corporation

Y

We hold the companyʼs shares aiming to enhance our business relationship.
While the quantitative effect of ownership is not stated, we have verified thesignificance and purpose of our shareholding through close investigation of thetransaction status and the prospects of businesses with the company.

Y

We hold the companyʼs shares aiming to enhance our business relationship.
While the quantitative effect of ownership is not stated, we have verified thesignificance and purpose of our shareholding through close investigation of thetransaction status and the prospects of businesses with the company.

Y

We hold the companyʼs shares aiming to enhance our business relationship.
While the quantitative effect of ownership is not stated, we have verified thesignificance and purpose of our shareholding through close investigation of thetransaction status and the prospects of businesses with the company.

Y

We hold the companyʼs shares aiming to enhance our business relationship.
While the quantitative effect of ownership is not stated, we have verified thesignificance and purpose of our shareholding through close investigation of thetransaction status and the prospects of businesses with the company.

Y

We hold the companyʼs shares aiming to enhance our business relationship. While thequantitative effect of ownership is not stated, we have verified significance and purposeof shareholding through close investigation of the transaction status and the prospectsof businesses with the company. In the fiscal year ended March 31, 2022, the numberof shares increased because of the enhancement of our business relationship.

Y

We hold the companyʼs shares aiming to enhance our business relationship.
While the quantitative effect of ownership is not stated, we have verified thesignificance and purpose of our shareholding through close investigation of thetransaction status and the prospects of businesses with the company.

Y

We hold the companyʼs shares aiming to enhance our business relationship.
While the quantitative effect of ownership is not stated, we have verified thesignificance and purpose of our shareholding through close investigation of thetransaction status and the prospects of businesses with the company.

Y

We hold the companyʼs shares aiming to enhance our business relationship.
While the quantitative effect of ownership is not stated, we have verified thesignificance and purpose of our shareholding through close investigation of thetransaction status and the prospects of businesses with the company.

N

We hold the companyʼs shares aiming to enhance our business relationship.
While the quantitative effect of ownership is not stated, we have verified thesignificance and purpose of our shareholding through close investigation of thetransaction status and the prospects of businesses with the company.

N

We hold the companyʼs shares aiming to enhance our business relationship.
While the quantitative effect of ownership is not stated, we have verified thesignificance and purpose of our shareholding through close investigation of thetransaction status and the prospects of businesses with the company.

Y

We hold the companyʼs shares aiming to enhance our business relationship.
While the quantitative effect of ownership is not stated, we have verified thesignificance and purpose of our shareholding through close investigation of thetransaction status and the prospects of businesses with the company.

Y

We hold the companyʼs shares aiming to enhance our business relationship.
While the quantitative effect of ownership is not stated, we have verified thesignificance and purpose of our shareholding through close investigation of thetransaction status and the prospects of businesses with the company.

Y

We hold the companyʼs shares aiming to enhance our business relationship.
While the quantitative effect of ownership is not stated, we have verified thesignificance and purpose of our shareholding through close investigation of thetransaction status and the prospects of businesses with the company.

Y

We hold the companyʼs shares aiming to enhance our business relationship.
While the quantitative effect of ownership is not stated, we have verified thesignificance and purpose of our shareholding through close investigation of thetransaction status and the prospects of businesses with the company.

TAKARA HOLDINGS INC.

Aflac Incorporated
PILOT CORPORATION

Fiscal year ended
March 31, 2021
Number of shares
Amount recordedon balance sheet(¥ million)

206,000

206,000

1,516

1,425

393,000

393,000

1,497

1,554

1,200,000

1,200,000

1,321

1,808

344,400

344,400

1,267

1,673

290,700

290,700

1,267

1,350

149,600

149,600

1,179

847

223,100

223,100

1,173

787

1,040,000

1,040,000

1,145

1,357

1,840,800

1,840,800

1,117

1,318

Companyʼsownershipof DNP
sharesHolding purpose, quantitative effect of ownership andthe reason for increase of number of shares

(Y/N)

Y

We hold the companyʼs shares aiming to strengthen our business alliance. Whilethe quantitative effect of ownership is not stated, we have verified significanceand purpose of shareholding through close investigation of the transaction status
and the prospects of businesses with the company.

N

We hold the companyʼs shares aiming to enhance our business relationship.
While the quantitative effect of ownership is not stated, we have verified thesignificance and purpose of our shareholding through close investigation of thetransaction status and the prospects of businesses with the company.

Y

We hold the companyʼs shares aiming to enhance our business relationship.
While the quantitative effect of ownership is not stated, we have verified thesignificance and purpose of our shareholding through close investigation of thetransaction status and the prospects of businesses with the company.

Y

We hold the companyʼs shares aiming to enhance our business relationship.
While the quantitative effect of ownership is not stated, we have verified thesignificance and purpose of our shareholding through close investigation of thetransaction status and the prospects of businesses with the company.

N

We hold the companyʼs shares aiming to enhance our business relationship.
While the quantitative effect of ownership is not stated, we have verified
significance and purpose of shareholding through close investigation of thetransaction status and the prospects of businesses with the company.

N

We hold the companyʼs shares aiming to enhance our business relationship.
While the quantitative effect of ownership is not stated, we have verified thesignificance and purpose of our shareholding through close investigation of thetransaction status and the prospects of businesses with the company.

N

We hold the companyʼs shares aiming to enhance our business relationship.
While the quantitative effect of ownership is not stated, we have verified thesignificance and purpose of our shareholding through close investigation of thetransaction status and the prospects of businesses with the company.

Y

We hold the companyʼs shares aiming to enhance our business relationship.
While the quantitative effect of ownership is not stated, we have verified thesignificance and purpose of our shareholding through close investigation of thetransaction status and the prospects of businesses with the company.

Y

We hold the companyʼs shares aiming to strengthen our business alliance. Whilethe quantitative effect of ownership is not stated, we have verified significanceand purpose of shareholding through close investigation of the transaction status
and the prospects of businesses with the company.

Note:
1. Stocks held for reasons other than pure investment purposes and stocks held in trust with voting rights are not added together when selecting stocks with the largest amounts as recorded in the balance sheet.
2. The quantitative effect of ownership is not stated because of matters concerning business agreements with the business partner. In terms of the rationality of the holding, we have periodically verified thesignificance and purpose of shareholding through close investigation of the transaction status with the company, financial results of the company, business status of DNP, the medium- to long-term economicalrationality and the prospects.
3. In the companyʼs ownership of DNP shares, in case that the company is a holding company, the holding status of the parent company and its major subsidiaries is stated.
4. KADOKAWA CORPORATION split its ordinary shares 2-for-1 on January 1, 2022.
5. Among stocks held for reasons other than pure investment purposes, the 30 stocks with the largest amounts as recorded in the balance sheet are listed.

Stocks held in trust or other legal entity while retaining voting rights or voting instruction rights

Company nameFiscal year ended
March 31, 2022
Number of shares
Amount recordedon balance sheet(¥ million)

Terumo Corporation
TV Asahi Holdings
Corporation
Astellas Pharma Inc.
Japan Tobacco Inc.
KADOKAWACORPORATIONTAKARA HOLDINGS INC.

Fiscal year ended
March 31, 2021
Number of shares
Amount recordedon balance sheet(¥ million)

7,722,000

7,722,000

28,75630,8804,030,000

4,030,000

6,077

8,386

2,284,000

2,284,000

4,364

3,887

1,000,000

1,000,000

2,087

2,125

532,608

266,304

1,714

1,143

500,000

500,000

550

753

Companyʼsownershipof DNP
sharesHolding purpose, quantitative effect of ownership andthe reason for increase of number of shares

(Y/N)

Y

We hold voting instruction rights for shares in retirement benefit trusts.

N

We hold voting instruction rights for shares in retirement benefit trusts.

N

We hold voting instruction rights for shares in retirement benefit trusts.

N

We hold voting instruction rights for shares in retirement benefit trusts.

Y

We hold voting instruction rights for shares in retirement benefit trusts.

Y

We hold voting instruction rights for shares in retirement benefit trusts.

Note:
1. Stocks held for reasons other than pure investment purposes and stocks held in trust with voting rights are not added together when selecting stocks with the largest amounts as recorded in the balance sheet.
2. In the companyʼs ownership of DNP shares, in case that the company is a holding company, the holding status of the parent company and its major subsidiaries is stated.
3. KADOKAWA CORPORATION split its ordinary shares 2-for-1 on January 1, 2022.

(3) Stocks held for pure investment purposes
None
DNP Integrated Report 2022

85

6

TOP MESSAGE

THE DNP GROUP ʼ S

CREATION
1 VALUESTORYPROGRESS WITH

2 MEDIUM-TERM
MANAGEMENT PLAN

3 BUSINESSPROMOTION

4 REINFORCING
BUSINESS BASE

5 MANAGEMENTSTRUCTURE

RESULTS/
6 BUSINESSCORPORATE PROFILE

BUSINESS RESULTS/
CORPORATE PROFILE

Summary of Financial Results
Dai Nippon Printing Co., Ltd. and Consolidated Subsidiaries
Years ended March 31
U.S. dollars inthousands except per
share amounts

2022

2021

2020

2022

Statements of Operations (¥ million)

Change2022 / 2021($ thousand)

1,344,147

1,335,440

1,401,894

11,017,598

0.7 %Operating income

66,78949,52956,274547,45134.8 %

Ordinary income

81,24959,907

63,786

665,975

35.6 %

Income before income taxes

126,891

46,401

102,719

1,040,090

173.5 %Net income attributable to parent company shareholders

97,18225,08869,498796,574

287.4 %

1,148,413

1,098,614

968,575

9,413,221

4.5 %Interest-bearing debt

154,362

158,555

211,646

1,265,262−2.6 %

Stockholders' equity

1,091,861

1,043,977

915,779

8,949,680

4.6 %Total assets

1,876,647

1,825,019

1,721,724

15,382,352

2.8 %Net sales

Balance Sheets (¥ million)
Total net assets

Cash Flow Statements (¥ million)
Cash flows from operating activities

82,02961,682

93,937672,369

33.0 %Cash flows from investing activities(39,209)(56,284)

191,057(321,385)––

Summary of Financial Results

Cash flows from financing activities(57,752)(78,269)(41,281)(473,377)––

88

Financial and Non-financial Data

Free cash flow

42,8205,398

284,994

350,984693.3 %

91

Managementʼs Discussion and Analysis

355.8489.32

235.182.92

298.4 %

98

Major Subsidiaries and Affiliates

Net assets

4,057.98

3,716.85

3,260.38

33.26

9.2 %

100

Our Products and Services

Cash dividend

64.00

64.00

64.00

0.52

––

102

Investor Information

Operating income

4.97

3.71

4.01

4.97

1.26

EBITDA margin

13.30

7.38

11.32

13.30

5.92

Net income

7.23

1.88

4.96

7.23

5.35

ROE (%)

9.10

2.56

7.27

9.10

6.54

ROA (%)

5.25

1.41

3.97

5.25

3.84

Equity ratio (%)

58.18

57.20

53.19

58.18

0.98

PER (times)

8.09

25.97

9.78

8.09

––

PBR (times)

0.71

0.62

0.71

0.71

––

EV/EBITDA (times)

3.49

4.97

2.94

3.49

––

PCFR (times)

5.22

8.57

5.21

5.22

––

Dividend yield (%)

2.22

2.76

2.78

2.22

−0.54

87

＊

Per Share Data (¥)
Net income - primary

As a Percentage of Net Sales (%)

Financial Ratios

Valuations (against share price on March 31)

Returns to Shareholders($ thousand)Values of shares repurchased (¥ million)＊＊29,999––59,999245,893––

Dividend payout ratio (%)

17.99

71.66

27.21

17.99

––

Total return ratio (%)

48.64

71.66

113.11

48.64––

Long-term credit rating (R&I)

AA−

AA−

AA−

AA−

––

Foreign ownership (%)

23.16

23.64

24.14

23.16

−0.48

OthersU.S. dollar amounts have been translated from yen, for convenience only, at the rate of ¥122=U.S.$1, the approximate Tokyo foreign exchange market rate as of March 31, 2022.
* Free cash flow = net cash from operating activities + net cash from investing activities** Treasury stock acquired through requests for the purchase of odd-lot shares is not included.

86

DNP Integrated Report 2022

87TOP MESSAGE

THE DNP GROUP ʼ S

CREATION
1 VALUESTORYPROGRESS WITH

2 MEDIUM-TERM
MANAGEMENT PLAN

3 BUSINESSPROMOTION

4 REINFORCING
BUSINESS BASE

5 MANAGEMENTSTRUCTURE

RESULTS/
6 BUSINESSCORPORATE PROFILE

Financial and Non-financial Data
Net Sales

Operating Income(¥ billion)(¥ billion)

Net Income (Loss) Attributable toParent Company Shareholders(¥ billion)

1,500

1,412.2 1,401.5 1,401.9

66.8
60

1,000

97.2

100

80

1,335.4 1,344.1

46.3

40

40

(¥)

200

178.7

69.5

158.6

150

60

49.5

Book Value per Share(¥ billion)

50

42.4

0

18

19

20

21

22

­35.6

19

20

21

22

18

19

20

0

21

18

22

19

1,102.5

1,148.4
1,098.6

1,046.6
968.6

1,000
800
600
400
200

500

-40

18

3,300.5 3,260.4

1,200

1,000

-20
0

3,716.9

1,500

0

20

3,493.7

2,000

20
500

4,000

3,000

98.5

100

25.1

4,058.0

2,500

108.6
27.5

Total Net Assets(¥ billion)

3,500

80

56.3
49.8

EBITDA

20

22

21

0

0

18

19

20

21

22

18

19

20

Earnings (Loss) per Share

Operating Income to Net Sales

Net Income (Loss) to Net Sales

Stockholdersʼ Equity

Total Assets

Capital Expenditures*

(¥)

(%)

(%)

(¥ billion)(¥ billion)(¥ billion)

400
350
300

3.28

200
150
100

4.01

4

235.18

250

4.97

5

355.84

3.56
3.71

2

2

1,200
1,053.6
1,000

1,091.9
1,044.0

996.1
915.8

4.96

1.95

20

21

22

18

19

20

21

22

18

19

20

59.5

57.2
50.7
41.1

40

0

21

71.6

400

­2.54

0

22

100

80

500

-2

19

1,876.6

20

200

-100

18

1,825.01,000

0­118.22

1,721.7

1,500

600

1

-150

1,794.7 1,775.0

60

1.88

0
-50

2,000

800

4

89.32

50

7.23

6

3
90.76

8

21

0

0

18

22

19

20

22

21

18

19

20

21

22

18

19

20

21

22

* Figures include capital expenditures for intangible
fixed assets.

ROE

ROA

(%)

(%)
10

9.1

2.6
2.6

60

1.4

0

-4

18

19

20

­2.0

-3

­3.5

22

33.7

33.6

32.6

19

Free Cash Flow*(¥ billion)(¥ billion)

100

300

33.1

30

200

60

59.0

54.4

20

46.4

45.3

150
50.8

51.1

40
10

20

21

22

100

18

19

20

21

22

0

18

19

20

21

22

42.8
5.4

0

20

0

71.5

50

-50
­18.6

285.0

250
80
61.0

-20

18

Depreciation Expense

0

-4

21

40
33.2

102.7

20

-2
-2

126.9

40

-1

0

(¥ billion)

80

1.6

1

2

(¥ billion)
140

100

3
2

Research and Development
Expenditures

120

4.0

4

6
4

5.3

5

7.3

8

6

Income (Loss) before Income Taxes
and Non-controlling Interests

­77.9

-100

18

19

20

21

22

18

19

20

21

22

* Free cash flow = net cash from operating activities +net cash from investing activities

88

DNP Integrated Report 2022

89

TOP MESSAGE

THE DNP GROUP ʼ S

CREATION
1 VALUESTORYPROGRESS WITH

2 MEDIUM-TERM
MANAGEMENT PLAN

3 BUSINESSPROMOTION

4 REINFORCING
BUSINESS BASE

5 MANAGEMENTSTRUCTURE

RESULTS/
6 BUSINESSCORPORATE PROFILE

Financial and Non-financial Data

Eco-friendly Products and Services
Super Eco-Products
Total sales (¥ billion)
Ratio of total sales (%)
10.0

180

8

160
140
5.7

120
100

(persons) (As of March 31, 2022)

Corporate 2,306

87.5
4

60

3,758

persons

Information
Communication
18,617

20
0

20

0

22

21

GHG Emissions(Including International Operations)

1,500

1,000

916

0.69

0.65

500

500

500

400

400

1.00
837

0.63

309

300

801

200

0.60

Emissions per-unit value(t/billion yen)

Undesired materials emissions(1,000 tons)

1.50

961

Asia
2,579

Total Undesired Materials Emissions(Including International Operations)

Emissions per-unit value(t-CO 2 /million yen)

GHG emissions (1,000 t-CO 2 )Business Environment and Overview of Operating Results for
the Fiscal Year Ended March 2022

persons2

40

Consolidated

36,542

Lifestyle andIndustrial Supplies
10,650

219

0.50

300

281

268

264

200

201

196

300

200

214

100

0

20

21

Percentage of Female Managers
(%)
8.0

7.4

7.0

6.6

6.0
5.0

5.6

0

22

18

Lost Time Work Accident
Occurrence Rate
0.35

0.32

14,0000.29

12,000
0.21

0.19

0.20

22

21

12,435 12,392 12,226
11,525 11,726

10,000
8,000

4.0
0.15

3.0

6,000

0.10

2.0

4,000

0.05

1.0

2,000

0

0

18

90

20

16,000

0.25

4.7

19

Number of Japanese Patents Held

0.33

0.30

6.1

100

0

0.00

19

19

20

21

22

0

18

19

20

21

22

Management ʼs Discussion
and Analysis

Europe 436
America
743

6

80.0

80

(persons) (As of March 31, 2022)

Electronics
3,732

134.8

6.5

Number of Overseas Group Company
Employees (by Area)

Beverages
1,237

10

200

Total Number of Employees(by Segment)

18

19

20

21

22

While COVID-19 continued to have an impact on the environment surrounding the
DNP Group during the fiscal year under review, economic activity gradually resumed,
partly due to progress in vaccination. In Japan, changes in working and living styles
continued, and demand for products and services related to online education, online
medical consultations and fifth-generation mobile communication systems (5G)
grew. In response to the global popularization of efforts to prevent global warming
and reduce environmental load, the need for environmentally friendly products andservices that can contribute to building a decarbonized society and a circular
economy increased. At the same time, the impact of events related to geopoliticalrisks, such as the Ukraine conflict, the continued increase of raw materials prices
and the prolonged semiconductor shortage intensified in the latter half of the fiscal
year under review.
Under these conditions, the DNP Group strived to solve social issues and create
new value to meet peopleʼs expectations in order to achieve a better, sustainable
society and contribute to well-being lives.
In the fiscal year under review, we prioritized businesses in which highprofitability and market growth potential were expected, with businesses related to
IoT and next-generation communications, data distribution, mobility and environment
as focus businesses for the optimal distribution of management resources.
In the IoT and next-generation communications business, we developed andsupplied next-generation semiconductor products based on nanoimprint lithography
for 5G. This technology helps reduce the power consumption and cost of
semiconductor manufacturing, thereby contributing to the achievement of adecarbonized society.
In data distribution-related business, we established NTT EDX Co., Ltd. in
October 2021 as a joint investment with Nippon Telegraph and Telephone West
Corporation (NTT West) and Nippon Telegraph and Telephone East Corporation (NTT
East) to advance higher education. With a focus on the electronic textbook and otherteaching materials business, we worked to provide a range of services to solve
problems in higher education and support the digitization and streamlining of
publisher and bookstore operations. In addition, we used our “Ki-Re-i” photo printing
machines to provide an online application service for the acquisition of the My
Number ID cards issued by the Japanese government and promoted the digitaltransformation (DX) of government services to enable people to apply for these
services without contact and accommodate peopleʼs new lifestyles.
In the mobility business, we worked to develop products and services for the
next-generation mobility society, which would require the reduction of environmentalload, the increase of energy efficiency, safety and comfort and greater information
security. For instance, we developed and supplied battery pouches for lithium-ion
batteries used in electric vehicles and other products and decorative films andpanels to improve both the design and function of interior and exterior materials.
In environment-related business, we improved our development of mono-material
packaging materials to increase recyclability by using plastic as the only material
used (mono-material). We created designs with a metallic appearance in addition totheir high performance as a barrier to oxygen and steam using the DNP Groupʼsinnovative technologies and developed polypropylene (PP) film packaging capable ofwrapping liquid content. Selected by a global consumer goods manufacturer in June
2021, this product was launched in the Southeast Asian market.
Additionally, we are implementing structural reforms to increase ourcompetitiveness and develop a strong business portfolio. To strengthen the

Net Sales by Segment(Year ended March 31, 2022)
Electronics
15.7%

Beverages
3.7%

Lifestyle andIndustrial Supplies
28.7%

Information
Communication
51.9%

Operating Income by Segment(Year ended March 31, 2022)
Beverages
0.8%Electronics
52.6%

Information
Communication
31.2%

Lifestyle andIndustrial Supplies
15.4%

DNP Integrated Report 2022

91

TOP MESSAGE

THE DNP GROUP ʼ S

CREATION
1 VALUESTORYPROGRESS WITH

2 MEDIUM-TERM
MANAGEMENT PLAN

3 BUSINESSPROMOTION

4 REINFORCING
BUSINESS BASE

5 MANAGEMENTSTRUCTURE

RESULTS/
6 BUSINESSCORPORATE PROFILEManagement ʼs Discussion and Analysis

DNP ʼs Overseas Sales(¥ billion)
290.2

300
250

226.7

238.4 246.2 245.8

200

management foundation supporting our long-term growth, we identified major trends(megatrends) such as DX and accelerated efforts to improve productivity through theutilization of ICT, enhance our information infrastructure and address theenvironment, human resources and human rights.

Net sales (¥ million)

2022.32021.32020.3

1,344,147

1,335,440

1,401,894

150

Gross profit margin21.8 %

20.7 %

20.9 %

100

Operating income margin

5.0 %

3.7 %

4.0 %

Ordinary income margin

6.0 %

4.5 %

4.5 %

Net income margin

7.2 %

1.9 %

5.0 %

50
0

18

19

20

21

22

Overseas sales for the DNP Group as a whole were ¥290,233 million, up
18.1% from the previous fiscal year. Overseas sales accounted for 21.6% of total
sales, a 3.2 percentage points rise from 18.4% in the previous fiscal year. By
region, sales in Asia, including Indonesia and Taiwan, increased by 19.0% year on
year to ¥218,894 million. In other regions, including the United States and Europe,sales increased 15.2% to ¥71,339 million.

DNP While digital marketing remained strong throughout the year, leaflets,
catalogs, SP, etc., decreased due in part to major clients reducing theirbudgets for promotion due to the prolonged impact of the pandemic, resulting
in a fall in overall sales.

Information Innovation Business: Information Security
Market Society ʼs demand for business process outsourcing (BPO) continued
to increase in response to labor shortages and workstyle reforms. In thesmart card segment, the percentage of payments using credit cards remained
high amid a rise in cashless payment practices.
DNP In the smart card business, large BPO projects decreased despite anincrease in contactless credit cards, resulting in a fall in overall sales.

Imaging Communication Business
Market Demand for photograph printing significantly recovered thanks to theeasing of activity restrictions in response to progress in vaccination and anincrease in COVID-19 preventive measures taken at events, the use ofamusement facilities, etc.
DNP Demand for parts and materials for photography and printing anddemand for services recovered considerably in the mainstay U.S. market, andbusiness in other regions also remained steady, resulting in overall sales
growth.

Information Communication• Net Sales:¥698,999 million (down 3.2 % YoY)
• Operating Income:¥27,617 million (up 43.9 % YoY)
• Operating Income Margin: 4.0 % (up 1.3 percentage points)

Publishing Business
Market Sales volume in the publishing industry in the fiscal year ended
March 2022 totaled ¥1,181 billion (down 4.8% year on year). Sales of books
increased 0.3% to ¥674.7 billion due to an increase in book reading time dueto the COVID-19 pandemic, a trend that had continued from the fiscal year
ended March 2021. Meanwhile, sales of magazines decreased 10.8% year
on year to ¥506.2 billion (surveyed by Japanʼs Research Institute for
Publications). The number of bookstores was 11,959 in the fiscal year ended
March 2022, a year-on-year decrease of 3.2%, or 390 stores (surveyed by
Japan Publishing Organization for Information Infrastructure Development).
The size of the electronic book market in the fiscal year ended March 2022
increased 14.3% year on year to ¥551.0 billion and the market is expected to
grow to a size exceeding ¥800 billion by the fiscal year ending March 2027
(surveyed by Impress Corporation).
DNP Sales of electronic books remained strong, and the number of membersof “honto,” a hybrid bookstore network selling both paper and electronic
books, rose to 7.7 million (as of March 31, 2022), resulting in sales growth.
Our electronic library service and library operations steadily grew. In thelibrary support business, the number of contracted libraries was 1,697 as ofJanuary 31, 2022, a year-on-year increase of 21, resulting in year-on-yearsales growth. Meanwhile, the growth of magazine printing slowed, andprinting orders received decreased.

Information Innovation Business: Marketing
Market Domestic demand for advertising in the fiscal year ended March2022 increased significantly by 12.8% overall from the fiscal year ended
March 2021, in which demand for newspaper, magazine, television, radio anddirect mail advertising substantially declined due to COVID-19 (surveyed by
the Ministry of Economy, Trade and Industry).

92

Lifestyle and Industrial Supplies• Net Sales:¥387,030 million (up 5.2% YoY)
• Operating Income:¥13,625 million (down 2.4% YoY)
• Operating Income Margin: 3.5% (down 0.3 percentage point)

Packaging Business
Market While demand for environmentally friendly packaging materials
increased and demand for packaging materials for commodities began torecover, demand for packaging materials for tourism-related souvenirs
remained low, largely due to a reduction in tourism because of COVID-19.
DNP We worked to develop and sell eco-friendly packaging and implemented
structural reforms to streamline the manufacturing process and operations.
Sales of plastic molded products and aseptic filling systems for PET bottles
increased despite a decrease in film packaging and other products, and total
sales increased.

Living Spaces Business
Market Domestic new housing starts increased 6.6% year on year to
approximately 870,000 units in the fiscal year ended March 2022. In these
new starts, owner-occupied houses increased by 6.9%, apartments andother rental housing increased by 9.2% and condominiums increased by
3.9% year on year (surveyed by the Ministry of Land, Infrastructure, Transport
and Tourism).
DNP Exterior materials for housing and decorative films for automobileinteriors increased and antibacterial and antiviral products effective inpreventing infection also grew, resulting in a year-on-year increase in total
sales.

DNP Integrated Report 2022

93TOP MESSAGE

THE DNP GROUP ʼ S

CREATION
1 VALUESTORYPROGRESS WITH

2 MEDIUM-TERM
MANAGEMENT PLAN

3 BUSINESSPROMOTION

4 REINFORCING
BUSINESS BASE

5 MANAGEMENTSTRUCTURE

RESULTS/
6 BUSINESSCORPORATE PROFILEManagement ʼs Discussion and Analysis

Industrial High-performance Materials Business
Worldwide demand for lithium-ion batteries for use in electricvehicles has expanded in response to increasingly strict global environmental
regulations aimed at reducing CO 2 emissions. In the fiscal year ended March
2022, the global market for lithium-ion batteries for use in electric vehicles
increased 120.9% year on year on a shipped capacity basis according to
Yano Research Institute Ltd. Demand for battery pouches used in electricvehicles grew, while demand for battery pouches for tablet and smartphonedevices also remained strong, in part due to increased telecommuting.
DNP Sales growth in pouches for lithium-ion batteries for tablet andsmartphone devices, in addition to pouches for electric vehicles, resulted in
year-on-year growth in net sales despite the impact that temporary
production reductions had on supply chains due to the global semiconductor
shortage.
MarketBeverages• Net Sales:¥49,701 million (down 3.4% YoY)
• Operating Income:¥690 million (down 17.8% YoY)
• Operating Income Margin: 1.4% (down 0.2 percentage point)
Market Demand for beverages continued to fall due to stay-at-home policies,
a decline in tourists and closures in related industries, including hotels andrestaurants, primarily.
DNP Overall net sales decreased due to a slowdown in sales growth atrestaurants due to consumersʼ activity restrictions and tendency to stay athome, despite sales growth at supermarkets and websites, whose mainincome source is household consumption.

Gross Profit Margin(%)
25

Electronics

Cost of Sales/Selling, General and
Administrative Expenses/Operating Income

20.9 20.7
19.9 20.1

20

21.8

15

• Net Sales:¥211,094 million (up 7.1% YoY)
• Operating Income:¥46,481 million (up 26.7% YoY)
• Operating Income Margin: 22.0% (up 3.4 percentage points)

Display Components BusinessIn 2021, the market for small and medium OLED displays grew 18.0%
year on year to ¥2,472.3 billion due to growth in demand for notebook PCs,
tablet devices and smartphones with the expansion of remote work and online
education. The market for large displays rose 49.5% year on year to ¥422.1
billion due to a recovery of demand for televisions in the first half of the year.
The market for large liquid crystal panels is expected to grow 74.8% year on
year to ¥11,827.6 billion and the market for small panels is projected toincrease 14.0% year on year to ¥2,448.8 billion in response to stay-at-homeand telecommuting demand (source: Reality and Future Prospect of Display
Related Market 2022, Fuji Chimera Research Institute, Inc.).
DNP Total sales of optical film products increased despite market saturation
generated by stay-at-home demand. Sales of metal masks for OLED display
manufacturing rose due to a steady demand for smartphone displays,
resulting in overall sales growth in this segment.
MarketElectronics Devices Business
Global semiconductor sales for 2021 increased 26.2% year on year to
US$ 555.9 billion, according to the World Semiconductor Trade Statistics. By
field, semiconductor memory shipments were up 30.9% year on year, andlogic shipments increased 30.8% year on year.
DNP Sales of photomasks for manufacturing semiconductor products forcommunication devices, vehicles and datacenters increased. Sales of various
related products, such as lead frames, which are materials for semiconductor
packages, also remained strong, resulting in overall sales growth.
MarketCost of sales decreased ¥7,308 million, or 0.7% year on year, to ¥1,051,218 million
and the gross profit margin rose 1.1 percentage points to 21.8%.
Of the major raw materials, the prices of synthetic resin such as film kept risingthroughout the year and the price of domestic naphtha (crude gasoline) increased to
the level of 65,000 yen/kL in the fourth quarter, resulting in an increase of 45%
from the prices as of March 2021. The prices for aluminum, aluminum foil and IC
chips also continued to rise. Meanwhile, the cost of sales decreased thanks tosuccessful cost-reduction efforts, in addition to the impact of the application ofrevenue recognition standards.
Selling, general and administrative expenses amounted to ¥226,140 million in
the fiscal period under review, a year-on-year decrease of ¥1,245 million, or 0.5%.
The percentage in net sales fell 0.2 percentage point to 16.8%.
As a result, operating income for the fiscal year under review rose ¥17,260
million, or 34.8% year on year, to ¥66,789 million. The operating margin rose 1.3
percentage points to 5.0%.

Non-operating Income (Expenses) and Income
before Income Taxes and Non-controlling Interests

10
5
0

18

19

20

21

22

SGA Expenses to Net Sales
(%)
20
16.8

16.6

16.6

16.9

17.0

18

19

20

21 22

15

10

5

Non-operating income totaled ¥18,552 million in the fiscal year under review, up¥2,929 million, or 18.7%, from the previous fiscal year. Non-operating expenses
totaled ¥4,091 million, down ¥1,154 million, or 22.0%, from the previous fiscal year.
As a result, net non-operating income was ¥14,460 million, up from ¥10,378 million
in the previous year.
Ordinary income totaled ¥81,249 million, up ¥21,342 million, or 35.6%, fromthe previous year.
Income before income taxes and non-controlling interests totaled ¥126,891
million, up ¥80,490 million, or 173.5%, from the previous fiscal year due in part to
extraordinary income posted for revision of retirement benefit plan, revision of repair
reserve and sale of investment securities.

0

Operating Income Margin
(%)
5.0

5
4.0

4
3.3

Net Income Attributable to Parent Company Shareholders

3.6

3.7

3
2

Net income attributable to parent company shareholders totaled ¥97,182 million, up¥72,094 million, or 287.4%, from the previous fiscal year. Net income per share was¥355.84 (compared to net income per share of ¥89.32 in the previous year).

94

1
0

18

19

20

21 22

DNP Integrated Report 2022

95

TOP MESSAGE

THE DNP GROUP ʼ S

CREATION
1 VALUESTORYPROGRESS WITH

2 MEDIUM-TERM
MANAGEMENT PLAN

3 BUSINESSPROMOTION

4 REINFORCING
BUSINESS BASE

5 MANAGEMENTSTRUCTURE

RESULTS/
6 BUSINESSCORPORATE PROFILEManagement ʼs Discussion and Analysis

Balance Sheet

Liquidity and Capital Resources

Total assets (¥ million)

Cash Flow2022.32021.32020.3

Cash flow from operating
activities (¥ million)

82,02961,682

93,937

Cash flow from investing
activities (¥ million)

ー 39,209

ー 56,284

191,057

42,8205,398

284,994

Free cash flow(¥ million)

In the consolidated cash flow in the fiscal year ended March 2022, net cash
provided by operating activities totaled ¥82,029 million due mainly to ¥126,891
million in income before income taxes and ¥51,155 million in depreciation.
Net cash used in investing activities amounted to ¥39,209 million, mainly due
to payments of ¥53,614 million for the purchase of property, plant and equipment.
Net cash used in financing activities amounted to ¥57,752 million, mainly due
to ¥30,860 million for the purchase of treasury shares and ¥17,643 million in
dividend payments.
As a result of these activities, cash and cash equivalents at the end of the
fiscal year in the consolidated cash flow statement totaled ¥293,361 million.
Free cash flow in the current fiscal year, which is the sum of cash flow fromoperating activities and cash flow from investing activities, amounted to revenue of¥42,820 million.

Capital Expenditures, Depreciation, Research andDevelopment Expenditures, etc.

Capital Expenditures and Free
Cash Flow(¥ billion)
Capital expenditures
Free cash flow
300

285.0

250
200
150
100
59.6

71.5
41.1

50

57.2

71.6
50.7

42.8

5.4

0
-50
-100

96

­ 77.9

18

19

20

21 22

Capital expenditures in the fiscal year ended March 2022, which mainly focused on
the reorganization of production bases in the existing segments and priority
investment in strategic businesses, totaled ¥50,699 million, down ¥20,950 million,or 29.2%, from the previous fiscal year. By segment, capital expenditures in the
Information Communication segment were ¥19,068 million, down ¥6,999 million
from the previous year, and accounted for 38% of total capital expenditures. The
Lifestyle and Industrial Supplies segment was ¥21,569 million, down ¥8,456
million, and accounted for 42%. The Electronics segment was ¥5,504 million, down
¥6,484 million, and accounted for 11%. The Beverages segment was ¥2,153
million, up ¥222 million, and accounted for 4%. Capital expenditures forcompany-wide assets totaled ¥2,405 million, up ¥767 million year, on year andaccounted for 5% of total capital expenditures. The necessary capital for the above
investment was covered by funds on hand.
Depreciation in the fiscal year ended March 2022 was ¥51,155 million, up¥262 million, or 0.5%, from the previous fiscal year. By segment, depreciation in
the Information Communication segment was ¥20,014 million, down ¥87 million
from the previous year, and accounted for 39% of total depreciation. The Lifestyleand Industrial Supplies segment was ¥18,442 million, up ¥1,924 million, andaccounted for 36%. The Electronics segment was ¥8,695 million, down ¥721
million and accounted for 17%. The Beverages segment was ¥2,087 million, down
¥804 million, and accounted for 4%. Depreciation of company-wide assets totaled¥1,917 million, and accounted for 4% of total capital expenditures.
In addition, research and development expenditures for the fiscal year ended
March 2022 totaled ¥33,148 million, exceeding the expenditures of ¥32,623
million in the previous fiscal year by ¥525 million.

2022.32021.32020.3

1,876,647

1,825,019

1,721,724

Interest-bearing debt (¥ million)

154,362

158,555

211,646

Stockholdersʼ equity (¥ million)

1,091,861

1,043,977

915,779

Book value per share (¥)

4,057.98

3,716.85

3,260.38

DNPʼs total assets at the end of the fiscal year under review amounted to¥1,876,647 million, up ¥51,628 million, or 2.8%, from the previous fiscal year.
Among current assets, cash and cash equivalents totaled ¥293,361 million,
down ¥10,862 million, or 3.6%, from the previous fiscal year. The sum of tradereceivables and contract assets came to ¥324,846 million, up ¥221 million, or0.1%. Inventories of merchandise and finished products, work in process, rawmaterials and supplies totaled ¥141,621 million, up ¥14,850 million, or 11.7%. As
a result, current assets totaled ¥804,813 million, down ¥1,004 million, or 0.1%.
Among fixed assets, net property, plant and equipment totaled ¥421,876
million, up ¥1,846 million, or 0.4%, from the previous fiscal year. Intangible fixed
assets totaled ¥27,747 million, up ¥2,540 million, or 10.1%. Investments and otherassets totaled ¥ 622,210 million, up ¥48,246 million, or 8.4%. As a result, fixed
assets totaled ¥1,071,834 million, up ¥52,633 million, or 5.2%.
Current liabilities totaled ¥406,108 million, down ¥2,017 million, or 0.5%, fromthe previous fiscal year. Long-term liabilities totaled ¥322,126 million, up ¥3,846
million, or 1.2%. As a result, total liabilities amounted to ¥728,234 million, up¥1,828 million, or 0.3%.
As of March 31, 2022, net assets totaled ¥1,148,413 million, up ¥49,799
million, or 4.5%, compared with the end of the previous fiscal year primarily due toan increase of ¥56,399 million, or 8.2%, in retained earnings.
As a result, the equity ratio in the fiscal year under review was 58.2%, anincrease of 1.0 percentage point from the previous fiscal year.
As of March 31, 2022, a total of 317,240,346 shares of common stock had been
issued, of which 48,175,114 shares, or 15.19% of the total, were held as treasury
stock. The total number of shares of treasury stock increased by 4,811,444 fromthe previous year.

ROE
(%)
10

9.1

8

7.3

6

Decrease Shares atin shares
end ofduringfiscal year fiscal year

Type ofsharesShares at
beginning offiscal year

Increase insharesduringfiscal year

SharesIssuedCommonStock324,240,346−

7,000,000

317,240,346

Treasury
Stock

CommonStock43,363,670

11,811,597

7,000,153

48,175,114

4
2.6

2

2.6

0

Notes
1. The 7,000,000-share decrease in the number of shares of common stock issued is the result of a cancellation of treasury stock.
2. The 11,811,597-share increase in the number of shares of common stock held as treasury stock is the result of an increase of 11,806,600
shares due to a purchase of treasury stock by resolution of the Board of Directors and an increase of 4,997 shares due to a purchase of
odd-lot shares.
3. The 7,000,153-share decrease in the number of shares of common stock held as treasury stock is the sum of a decrease of 7,000,000
shares due to a cancellation of treasury stock, a decrease of 148 shares through the sale of odd-lot shares and a decrease of 5 shares due
to changes in ratios of equity held in equity method affiliates.

-2
­ 3.5

-4

18

19

20

21

22

57.2

58.2

21

22

Equity Ratio
(%)
80

60

58.7

56.1

53.2

40

20

0

18

19

20

DNP Integrated Report 2022

97

TOP MESSAGE

THE DNP GROUP ʼ S

CREATION
1 VALUESTORYPROGRESS WITH

2 MEDIUM-TERM
MANAGEMENT PLAN

3 BUSINESSPROMOTION

4 REINFORCING
BUSINESS BASE

5 MANAGEMENTSTRUCTURE

RESULTS/
6 BUSINESSCORPORATE PROFILE

Major Subsidiaries and Affiliates (As of March 31, 2022)
Printing
DNP Hokkaido Co., Ltd.
DNP Tohoku Co., Ltd.
DNP Chubu Co., Ltd.
DNP Nishi Nippon Co., Ltd.
DNP Shikoku Co., Ltd

Capital(¥ million)
General affairs, accounting work and other business services
General affairs, accounting work and other business services
General affairs, accounting work and other business services
General affairs, accounting work and other business services
Film making, printing, bookbinding; production and sale of packaging

100
100
100
100
50

Ownership ratio ofvoting rights (%)
100.0
100.0
100.0
100.0
97.0

DNP High-performance Materials Co., Ltd.

Investment in operating companies
Sale of books, creation of data, library operation support and consulting
Education and academic businesses; retail stores; publishing; commercial facility/store interiors, etc.
Publishing
Sale of books, magazines and stationery
Management of group companies and related businesss
Operation of hybrid bookstore services
Development, sale and maintenance of computer software
Offset printing and bookbinding
Prepress and media production
Electronic publishing and distribution platform services; e-book distribution service
Editing and sale of textbooks and educational materials
Bookbinding
Film making, printing and bookbinding

3,000
266
100
50
50
100
100
50
200
180
100
60
49
(SGD1,000)
4,600

55.0
55.0
55.0
55.0
55.0
18.4
100.0
87.0
100.0
100.0
63.8
48.2
100.0
100.0

(55.0)(55.0)(55.0)(55.0)(11.0)

100.0
100.0
100.0
100.0 (100.0)
100.0

DNP Photo Imaging Europe SAS

Production and processing of thermal mass transfer media and dye-sublimation media
Sale of photo-related products; operation of ID photo booths and automated commemorative photo booths
Sale of government-affiliated smart card identification equipment and materials
Operation of photo studio and related equipment services
Production, processing and sale of thermal mass transfer media anddye-sublimation media; sale of photo-related products
Production, processing and sale of thermal mass transfer media anddye-sublimation media; sale of photo-related products
Sale of photo-related products

DNP Photo Imaging Russia, LLC

Sales of photo-related products

Sharingbox SA

Providing functional photo booths for event business

DNP Imagingcomm Europe B.V.

Processing and sale of thermal mass transfer media and dye-sublimation media

DT Fine Electronics Co., Ltd.
DNP Fine Optronics Co., Ltd.
DNP LSI Design Co., Ltd.
Photronics DNP Mask Corporation

Production and sale of precision electronic components
Production of precision electronic components
Design and production of drawings used in semiconductor production
Production and sale of semiconductor photomasks

65.0
100.0
100.0
49.9

Photronics DNP Mask Corporation Xiamen

Production and sale of semiconductor photomasks

DNP Photomask Europe S.p.A.

Production and sale of semiconductor photomasks

490
300
100
(TWD1,000)
2,198,185(USD1,000)
160,000(EUR1,000)
47,200Electronic Devices

100.0(100.0)100.0
100.0(100.0)100.0(100.0)100.0

Lifescape Marketing Co., Ltd.
DNP Technopack Co., Ltd
Sagami Yoki Co., Ltd.
Aseptic Systems Co., Ltd.
DNP Hoso Co., Ltd
DNP Field Eyes Co., Ltd.
DNP-SIG Combibloc Co., Ltd.
Dai Nippon Printing (Thailand) Co., Ltd.*

Research, compilation and provision of various kinds of information about purchasing and consumption of foods and beverages
Production, printing and processing of packaging materials
Production of plastic tubes
Manufacturing and sale of aseptic filling systems, and related consulting
Filling and processing of packages
Marketing research and consulting
Sale of sterile paper containers and filling equipment for beverages and liquid foods
Sale of packaging materials

DNP Vietnam Co., Ltd.

Production and sale of packaging materials

PT DNP Indonesia

Production and sale of packaging materials

430
300
200
100
80
50
75
(THB1,000)
200,000(USD1,000)
31,500(USD1,000)
26,000

84.0
100.0
90.0
100.0
100.0
100.0
50.0
100.0
100.0
(20.0)
51.0

Living Spaces
Sale of decorative products
Printing and processing of steel, aluminum and other metals
Production, printing and processing of decorative products

300
300
200

100.0
50.0
100.0

Manufacturing and sale of automotive accessories
Manufacturing of molds

60
5

100.0
89.0 (89.0)

Mobility Business

49.9(49.9)
80.5

Other
Nihon Unisys, Ltd.
DNP Fine Chemicals Co., Ltd.
DNP Fine Chemicals Utsunomiya Co., Ltd.
DNP Logistics Co., Ltd.
DIC Graphics Corporation
DNP Art Communications Co., Ltd.
PSP Corporation
DNP Engineering Co., Ltd.
DNP Trading Co., Ltd.
CYBER KNOWLEDGE ACADEMY Co., Ltd.
CP Design Consulting Co., Ltd.*CAFI Corporation*
At Table Co., Ltd.*DNP Dexerials Consulting Co., Ltd.
DNP Corporation USA

DNP Business Consulting（Shanghai) Co., Ltd.*
100
100
60
90
(MYR1,000)
190,000(USD1,000)
71,980(EUR1,000)
2,408(RUB1,000)
7,622(EUR1,000)
3,588(EUR1,000)
1,000

Packaging

98

100.0
100.0

DNP Holding USA Corporation

Lifestyle and Industrial Supplies

DNP Tamura Plastic Co., Ltd.
NTEC Co., Ltd.

400(DKK1,000)
135,000

45.0

Imaging Communication

DNP Lifestyle Materials Marketing Co., Ltd.
DNP Ellio Co., Ltd.
DNP Living Space Co., Ltd.

Production of display-related components
Production and sale of precision electronic components(15.1)

50.7
100.0
100.0
100.0
100.0
100.0
100.0
100.0 (100.0)
95.0
100.0
95.0
36.3

DNP Imagingcomm America Corporation

100.0

DNP Precision Devices Himeji Co., Ltd.
DNP Denmark A/SDevelopment and maintenance of software
843
Offset printing and bookbinding
100
Planning, production, film making and plate making
100
Production and sale of business forms and plastic cards, and BPO service
100
Planning, design, maintenance and operation of information systems
100
Planning and production of promotional materials
80
Production and sale of computers and peripheral devices; development, production and sale of software
40
Mailing of printed matter, etc.
20
Planning and production of printed materials
50
Planning, development and operation of online advertising and computer systems, etc.
10
Production and sale of all types of printed matter10
Production and sale of cards, and BPO business and DTP business(VND1,000,000)
100,000
Card-issuing services(USD1,000)
2,000

DNP Imaging Comm Co., Ltd.
DNP Photo Imaging Japan Co., Ltd.
DNP ID System Co., Ltd.
DNP hollyhock Co., LTD.
DNP Imagingcomm Asia Sdn. Bhd.

200

Display Components

Information Innovation

PT. Wahyu DNP Bureau

Production of lithium-ion battery components

Electronics

Publishing

INTELLIGENT WAVE INC.
DNP Graphica Co., Ltd.
DNP Communication Design Co., Ltd.
DNP Data Techno Co., Ltd.
DNP Digital Solutions Co., Ltd.
DNP SP Solutions Co., Ltd.
DNP HyperTech Co., Ltd.
NBC Co., Ltd.*DNP Plannning Network Co., Ltd.
DNP Social Links Co., Ltd.
DNP Media Support Co., Ltd.
MK Smart Joint Stock Company

Ownership ratio ofvoting rights (%)

Industrial Supplies

Information Communication
Maruzen CHI Holdings Co., Ltd.
TRC Library Service Inc.
MARUZEN-YUSHODO Company, Limited
MARUZEN PUBLISHING CO., LTD.
MaruzenJunkudo Bookstores Co., Ltd.
BOOKOFF GROUP HOLDINGS LIMITED
2Dfacto, Inc.
VISUALJAPAN Inc.*DNP Book Factory Co., Ltd.
DNP Media Art Co., Ltd.
MobileBook.jp Inc.
Kyoiku Shuppan Co., Ltd.
Oguchi Book Binding & Printing Co., Ltd.
Tien Wah Press (Pte.) Ltd.

Capital(¥ million)

DNP Asia Pacific Pte. Ltd.

Development and sale of software; computer system support services
5,483
Production and sale of chemical products
2,000
Manufacturing and sale of chemical materials, pharmaceutical ingredients, etc.
100
Packing, shipping, freight forwarding and warehousing operations
626
Production and sale of printing ink
500
Planning, production and sale of artistic images and videos
300
Planning, research, development, sales and maintenance of internal information systems for hospitals and clinics 379
Manufacturing, repair and sale of printing equipment and other machinery
100
Buying and selling of printing paper and various other types of merchandise
100
Operation of academy for training and developing personnel to defend against targeted cyber attacks
70
Personal information protection and risk management consulting
40
Remote diagnostic imaging service
32
Research, consulting and planning related to production and sales promotions for supermarkets and other retailers 30
Business planning and proposals
10
Investment in operating companies(USD1,000)
62,164
Investment in operating companies(USD1,000)
100
Study of Chinese market and business feasibility(USD1,000)
8,780
Coordination of DNP business operations in the Southeast Asia/Oceania region(SGD1,000)
2,000(USD1,000)
90,43420.6
100.0
100.0 (100.0)
100.0
33.4
100.0
30.9
100.0
94.3
100.0
100.0
51.1
66.6
50.0
100.0
(7.1)
100.0
(100.0)100.0

Building maintenance, cleaning and security; operation of sports and welfare facilities
Design, development and maintenance of information systems; production and sale of software
Planning, design, development, maintenance and support operations for information systems
Planning and management related to personnel plans
Accounting agency and consulting services
Studies related to patents; preparation of contracts
Office support businesss

350
100
100
90
30
20
10

100.0
100.0
100.0
100.0
100.0
100.0
100.0

(KRW1,000)
800,000(TWD1,000)
10,000(CNY1,000)
39,301(USD1,000)
100(SGD1,000)
350(EUR1,000)
92(CNY1,000)
10,000(CNY1,000)
24,000

100.0

100.0

Personal Welfare, Facility Service and Others
DNP Facility Services Co., Ltd.
DNP Information Systems Co., Ltd.
DNP Metro Systems Co., Ltd.
DNP Human Services Co., Ltd.
DNP Accounting Services Co., Ltd.
DNP Techno Research Co., Ltd.*DNP Business Partners Co., Ltd.*(90.0）

Overseas Sales
DNP Korea Co., Ltd.*Sale of precision electronic components

DNP Taiwan Co., Ltd.

Sale of precision electronic components

DNP International Trading (Shanghai) Co., Ltd.*Sale of printed matter, etc.

DNP America, LLC

Sale of printed matter, precision electronic components and decorative materials

DNP Singapore Pte. Ltd.*Sale of printed matter, precision electronic components and decorative materials

DNP Europa GmbH*

Sale of printed matter and decorative materials

DNP Living Space & Mobility (Shanghai) Co., Ltd.*Sale of printed matter (Products and services of Living Space and Mobility business)

DNP Imaging Communication (Shanghai) Co., Ltd.*Sale of printed matter (Products and services of the Imaging Communication business)

100.0
100.0
(100.0)100.0(100.0)
100.0
100.0
100.0
(100.0)100.0(100.0)Beverages
Beverages
Hokkaido Coca-Cola Bottling Co., Ltd.

Production and sale of beverages

2,935

59.8 (2.3)

Notes: 1. Voting rights ownership ratios (in parentheses) indicate the percentage of shares owned through DNPʼs subsidiaries or affiliates.
2. Companies with an asterisk are neither consolidated nor accounted for by the equity method.
3. Nihon Unisys, Ltd. changed its name to BIPROGY Inc. as of April 1, 2022.

DNP Integrated Report 2022

99

TOP MESSAGE

THE DNP GROUP ʼ S

CREATION
1 VALUESTORYPROGRESS WITH

2 MEDIUM-TERM
MANAGEMENT PLAN

3 BUSINESSPROMOTION

4 REINFORCING
BUSINESS BASE

5 MANAGEMENTSTRUCTURE

RESULTS/
6 BUSINESSCORPORATE PROFILE

Our Products and Services

Information Communication
Publishing Business
Publishing & Media Services
1 Books and magazines
2 Hybrid bookstore network “ honto”● Publications Distribution
3 Maruzen & Junkudo Bookstore in Shibuya (Tokyo)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

41

42

43

44

45

46

47

仁和寺「金堂」内陣のVR●

Information Innovation Business
Marketing4 LINE flyer● BPO (Business Process Outsourcing)
5 BPO● Information Security
6 Solar-powered outdoor LCD digital signage /universally designed touch screen multilingual signage Activision
7 Extended reality communication
8 Virtual reality
9 Business forms 10 Smart cards and magnetic cards
11 Identity verification service 12 Transparent hologram ribbon●

Imaging Communication Business
13 Dye-sublimation thermal transfer printing media and thermal masstransfer printing media

14 Dye-sublimation photo printer

15 Photo-related services and solutions

Lifestyle & Industrial Supplies
Packaging Business
16 Plant-based packaging materials
17 Mono-material packaging materials
18 Transparent vapor deposition film “ IB-Film”
19 Super high-barrier paper packaging materials
20 Functional film complex PET bottle “ COMPLEX BOTTLE ”
21 PET plastic bottles

22 Aseptic filling systems for PET plastic bottles

Living Spaces Business23 Olefin-based sheets for flooring
24 Antibacterial and antiviral products
25 Exterior materials for buildings

26 Curved resin glazing

27 Interior coverings for railway cars (Hokuriku Shinkansen)

Industrial High-performance Materials Business
28 Battery pouch for lithium-ion batteries
29 Photovoltaic module components
30 Lighting film (left: with film, the room brighter)
31 Multifunctional insulation box

Electronics
Display Components Business

フィルムあり
光の映り込みなし32 Optical films used for displays
33 OLED display-related products

34 Color filter for LED display

35 Viewing angle control film for in-vehicle displays(right: with film, no background reflection)
37 Electrode film for capacitive touch panels
38 Transparent screen
39 Large scale curved OLED display-driven digital signage

36 Electronic Shade

Electronic Devices Business
40 Photomask (left: for semiconductors, right: for large displays, etc.)
41 Master template for nanoimprinting
42 Hard disk drive suspension
43 Lead frame for compact semiconductor package
44 Diffractive optical element (DOE)
45 Vapor chamber
46 Near field communication (NFC) module
47 Micro electro mechanical systems (MEMS) products

100

DNP Integrated Report 2022

101

TOP MESSAGE

THE DNP GROUP ʼ S

PROGRESS WITH

CREATION
1 VALUESTORY

2 MEDIUM-TERM
MANAGEMENT PLAN

3 BUSINESSPROMOTION

4 REINFORCING
BUSINESS BASE

5 MANAGEMENTSTRUCTURE

RESULTS/
6 BUSINESSCORPORATE PROFILE

Investor Information (As of March 31, 2022)

Dai Nippon Printing Co., Ltd.
Head Office:1-1, Ichigaya-Kagacho 1-chome, Shinjuku-ku, Tokyo 162-8001, Japan

Stock Code: 7912
Administrator of Shareholder Register:Mizuho Trust & Banking Co., Ltd.
Stock Transfer Agency Department
3-3, Marunouchi 1-chome, Chiyoda-ku,
Tokyo, Japan

Established: 1876
Number of Employees (consolidated): 36,542
Paid-in Capital: ¥114,464 million
Number of Common Stocks:
Authorized: 745,000,000 shares
Issued: 317,240,346 shares
Number of Trading Unit Shareholders (own 100 or more shares):24,488Stock Exchange Listing: Tokyo Stock Exchange
Major Shareholders (as of March 31, 2022):

The Master Trust Bank of Japan, Ltd. (Trust Account)
Custody Bank of Japan, Ltd. (Trust Account)
The Dai-ichi Life Insurance Co., Ltd
Employeesʼ Shareholding Association
Mizuho Bank, Ltd.
Nippon Life Insurance Company
STATE STREET BANK WEST CLIENT - TREATY 505234
JP MORGAN CHASE BANK 385781
GOVERNMENT OF NORWAYSTATE STREET BANK AND TRUST COMPANY 505001

Shares(thousands)

Percentage(%)

51,903
17,473
9,264
7,943
5,706
4,735
4,184
3,436
2,945
2,880

19.29
6.49
3.44
2.95
2.12
1.76
1.56
1.28
1.09
1.07

Notes:
1. The ownership stakes are based on the total number of shares outstanding lesstreasury shares (269,076,339).
2. The number of treasury shares is excluded from the figures above.

Share Price Evolution (Tokyo Stock Exchange)＊1

TOPIX

Increase (%)

4,000

50
40

3,500

30
20

3,000

10
0

2,500
−10
−20

2,000

Fiscal Year-end:
March 31

−30

Independent Auditor:
ARK LLC

Investor Relations:
Dai Nippon Printing Co., Ltd.
IR and Public Relations Division
Investor Relations Office
1-1, Ichigaya-Kagacho 1-chome, Shinjuku-ku,
Tokyo 162-8001, Japan
Tel: +81-3-6735-0124
Fax: +81-3-5225-8239

Nikkei Average

DNP Stock Price (yen)American Depositary Receipts:
Ratio (ADR:ORD): 2:1
Exchange: OTC (Over-the-Counter)
Symbol: DNPLYCUSIP: 233806306
Depositary:
The Bank of New York Mellon
240 Greenwich Street, New York,NY 10286, U.S.A.
Telephone: (201) 680-6825
U.S. toll free: 888-269-2377(888-BNY-ADRS)URL: http://www.adrbnymellon.com/

Annual Meeting of Shareholders:
The annual meeting of shareholders of DNP is
normally held in June each year in Tokyo, Japan.

DNP(between April 1, 2020 and March 31, 2022)

20

21

22

＊1 Index 100 = March 31, 2019

Total Shareholder Return＊2 (TSR)
Fiscal year ended

2018.3

DNP (%)TOPIX (%)

2019.32020.32021.32022.394.25

115.63103.88107.29133.25（115.87）（110.03）（99.57）（141.53）（144.34）＊2 Represents total investment return to shareholders, combining capital gains and dividends. The TSR calculation method is as follows: (Stock price at the end of each fiscal
year + the total amount of dividends per share up to each fiscal year starting from four fiscal years prior to the fiscal year ended March 31, 2022 ÷ the stock price at theend of the fiscal year ended March 31, 2017.)

Web Site:https://www.dnp.co.jp/eng/
Voting Rights (as of March 31, 2022)

Number of Stocks(stocks)

Type

Recognition from Society (As of June 30, 2022)
DNP has been highly evaluated by ESG evaluation agencies throughout the world and has been selected for inclusion in socially responsible investment (SRI) indices in Japanand overseas. DNP has been selected for the FTSE4Good Global Index for the 22nd consecutive year since 2001 and for the MSCI ESG Leaders indexes for the 6th consecutive
year since 2017. In addition, we were selected for the third consecutive year by the CDP, an international non-profit organization that provides environmental information
disclosure systems, as the highest rated the Supplier Engagement Leader Board in the Supplier Engagement Rating.

SRI indices
FTSE4Good
Global Index

Supplier Engagement Rating
MSCI ESG Leaders indexes

THE INCLUSION OF Dai Nippon Printing IN ANY MSCI INDEX, AND THE USE OF MSCI LOGOS,
TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN, DO NOT CONSTITUTE A SPONSORSHIP,
ENDORSEMENT OR PROMOTION OF Dai Nippon Printing BY MSCI OR ANY OF ITS AFFILIATES.
THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE MSCI INDEXNAMES AND LOGOS ARE TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS AFFILIATES.

102

Euronext Vigeo Eiris
World Index 120
CDP
SUPPLIERENGAGEMENTLEADER

Stocks with no voting rights
Stocks with limited voting rights (treasury stocks, etc.)
Stocks with limited voting rights (other)
Stocks with voting rights(treasury stocks, etc.)(Treasury held stocks) Common stocks

Stocks with voting rights (other)
Stocks with less than trading units
Outstanding shares
Total voting rights of stockholders

Common stocks
Common stocks

―

―

―

―

―

―

48,164,000―

268,821,400
254,946
317,240,346

2,688,214―

2,688,214

Treasury Stocks (as of March 31, 2022)
HolderDai Nippon Printing Co., Ltd.
Total

Number of Voting Rights(rights)――

No. of Stocks Held

Percentage of Holding to
No. of Outstanding Shares

48,164,007
48,164,007

15.18
15.18

DNP Integrated Report 2022

103