Integrated Report

2019

DNP will promote“ P&I innovation ” to help solve
social issues while creating
new value that meetsthe expectations of people andcontributing to the realizationof a sustainable society.
Employees who have worked to create new value both at their jobs and in their private lives(Photographs introduced in the fiscal 2018 Group in-house magazine)

DNP
Integrated
Report2019

CONTENTS
3

Vision / Code of Conduct / Three Corporate Responsibilities / Editorial Policy

4

Top Interview

10
		
		
		
		

INITIATIVES FOR VALUE CREATION
12 Sustainable Growth of DNP
16 Risks and Opportunities
18 DNP ʼs Value Creation Process
20 Expanding DNP ʼs Business Areas by Applying and Developing Technologies				

30 Issues Driven Development: Case 3

		

32 Issues Driven Development: Case 4

		

The DNP Group Code of Conduct

The DNP Groupʼs basic management policies announced in October 2015.
The vision is comprised of three main elements, the first of which is central:
Corporate Philosophy, Business Vision and Guiding Principles.

A set of codes underlying all types ofactivities aimed at achieving our Group Vision.
All DNP employees must adhere to these codes.

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 andrealization of a sustainable society
1. Realization of a “ universal society ”
1. Ensuring the safety and quality ofour products and services
1. Ensuring information security
1. Proper disclosure of information
1. Realization of a safe and vibrant workplace

Corporate
Philosophy

SECTION 1

24 Promoting Business Commercialization in Growth Areas
26 Issues Driven Development: Case 1
DNP ʼs BPO Supported by Advanced Information Security Foundations
28 Issues Driven Development: Case 2		

DNP Group Vision 2015

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

Business
VisionGuiding
Principles

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

TAIWA (dialogue)
and cooperation

Expansion of Sustainability by Reducing Environmental Burden

Products and Services That Enhance Peopleʼs Mobility and the Value of Logistics

Three Corporate Responsibilities

TOPICS

Three important obligations DNP have to fulfil to remain a company that can always be fully trusted by its various stakeholders

36

SECTION 2

TOWARD SUSTAINABLE GROWTH― DNP ʼS ESG INITIATIVES ―

		
		
		
		

37 Dialogue: Yoshinari Kitajima, President × Minako Miyama, Corporate Officer
40 CSR Management
42 Initiatives for the Environment
44 Initiatives for Human Resources Fundamental to Value Creation

		46 Corporate Governance
52 Board of Directors, Statutory Auditors and Corporate Officers

		

53 Stakeholder Dialogue

54

SECTION 3

		

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）
		
		
		
		
		
		

55 Summary of Financial Results
56 DNP ʼs Business Portfolio
58 Our Products and Services
60 Business Strategies and Business Overview
66 Financial and Non-financial Data
69 Management ʼs Discussion and Analysis

		

76 Selected Financial Data (unaudited)
78 Consolidated Financial Statements		

101 Independent Auditor ʼs Report

102

Major Subsidiaries and Affiliates
Investor Information

		

104

1. Value Creation

2. Integrity in Conduct

3. Transparency (Accountability)

The first and most fundamental
responsibility of a company to society is“ providing new value to society.” We areworking to link the offering of products andservices necessary to the sustainable
development of society to the growth of thecompany. Through our Business Vision, we
will continue to provide new value which
contributes to the solution of social issues
and meets peopleʼs expectations.

The second responsibility is “ practicing fairness
and impartiality in value creation processes.”
No matter how superior or useful to society thevalue produced is, value is compromised if, forexample, environmental damage occurs or laws
are broken during the value creation process.
Therefore, DNP seeks to fulfill this responsibility
by ensuring that all employees always conductbusiness with integrity in accordance with the
DNP Group Code of Conduct.

Finally, the third vital corporate
responsibility is “ being a company that isaccountable and highly transparent.” DNP
achieves accountability by encouraging all
employees, during the course of theirregular duties, to engage in TAIWA withstakeholders, listen to their opinions andprovide correct information themselves.

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

◇ Period covered by this report: April 1, 2018 to March 31, 2019
However, reporting is not confined to this period regarding some contents.

◇ 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 46-51), “ DNP ” refers to Dai Nippon Printing Co., Ltd.)◇ Issued: October 2019 (Next scheduled issue: October 2020)
Note: This report is aimed at providing information about DNP ʼs businesses, management vision and business results. Opinions and forecasts contained in the report were based on thebest judgment of management at the time the report was prepared, so we cannot guarantee that all information contained in the report is completely infallible.

DNP Integrated Report 20193

TOP INTERVIEWTop Interview

Challenge for Transformation:
Striving for Our
Third Corporate Founding
Yoshinari Kitajima, President
We aim to ensure that DNP ʼs products and services exist in the daily life of eachand every consumer as “ basics” that help solve peopleʼs problems and also evenexceed their expectations. Breathing this desire into the corporate statement“ Today ʼs Innovation is Tomorrow ʼs Basic ,” DNP will undertake a variety of businesses.

―― What are your thoughts regarding the past one year

since assuming the duties of president in June 2018?

I continuously gave serious consideration towhat is the value that we at DNP can provide
and moved into action.
As Japan embarked on the new Reiwa Imperial Era in May
2019, economic, social and environmental circumstances inJapan and overseas have been undergoing unprecedented
major and dramatic changes in recent years. While
anticipating such shifts, DNP will provide new value by
proactively taking on the challenge of promoting change.
With information and logistics networks now extending
across the globe, DNP is building safe and securecommunications foundations leveraging our strengths incontent production and information security cultivated to thepresent. Furthermore, DNP has worked to develop products
and services that combine our strengths in monozukuri(manufacturing) and IT to respond to issues such as securing
stable supplies of food and reducing food loss.
Today we face numerous social issues that include
addressing climate change, expanding the use of renewableenergy, responding to ocean pollution and preserving
biodiversity. Under these conditions, DNP is working to ensure
we hand down to the next generation an even better society
where people enjoy pleasant conversations, enhance theirfood, clothing and housing, and color their memories withphotographs and videos. We at DNP continually give serious
consideration to what is the value we can provide to make4

peopleʼs lives even more comfortable. All employees will maketheir utmost efforts to provide new value to people and society
through our products and services so that this value leads toan expansion of DNPʼs profits and perpetual development.
Since assuming the duties of president, I accelerated
efforts for “taking on the challenge of promoting change,”with DNP itself playing the main role, toward the realizationof our “Third Corporate Founding.” That said, the tasks I wasable to accomplish were limited within the short span of just
one year. Going forward, while taking account of a
medium- and long-term timeframe and a global perspective,
I will focus on what must be done at the present.
―― What are your aims in the “ Third Corporate
Founding”?

Our “ Third Corporate Founding” aims at
nothing less than taking on the challenge ofgenerating new value that solves social
issues and meets the expectations of people.
Dai Nippon Printing Co., Ltd. was formed in 1935 through amerger between Shueisha, founded in 1876, and Nisshin
Printing Co., Ltd., established in 1907. Although Dai Nippon
Printing including its two predecessors had carried out
business centered on publishing printing during the first
approximately 75 years of operations, the Company
subsequently faced crisis conditions that shook its business
operations in the tumultuous post-war period.

DNP Integrated Report 20195

TOP INTERVIEW

ensure we respond appropriately.
In our “Third Corporate Founding” we need to synergize
DNPʼs unique strengths of P&I (printing and information)
while deepening collaboration with partners possessing
strengths different from our own as we take on the challengeof creating new value for solving social issues and meetingthe expectations of customers. In working to realize thisobjective, we will accelerate various initiatives such assynergizing the technologies and assets possessed by eachdepartment to deploy the total strengths of “All-DNP.”―― What measures are you actually implementing torealize your “ Third Corporate Founding”?

The Group is working in unison to implement
three measures for “generating, providing
and expanding value.”

In response, the Company formulated the “five-yearreconstruction plan” in 1951, and based on the concept of“expansion printing” to broaden business domains throughthe application and advance of printing technologies, itrealized its “Second Corporate Founding,” which was a truly
new founding leading to the current DNP. The Company
expanded printed materials from paper to films, metals andothers and began producing items such as packaging,decorative materials and electronics components and devices,and subsequently transformed into one of the worldʼsleading comprehensive printing companies. In the 1970s,
DNP acted early to engage in the digitization of information,and since has utilized its printing technologies andinformation technologies to carry out such businesses as its
smart card-related business, e-books and network services
while also expanding its business domains into such areas asenergy and life science.
As I mentioned previously, major changes are currently
unfolding in Japan and overseas. Until now, we could achieve
growth in business results merely by addressing issues
facing our corporate customers. In contrast, today DNP must
play a leading role in identifying the issues faced by society
and the expectations of customers and make efforts to

6

The Group is presently working as one to promote thefollowing “Three Priority Measures.” The first is “Generatevalue primarily in growth areas.” In keeping with ourbusiness vision of “P&I innovations” for creating innovativevalue leveraging our strength of “P&I,” we are striving toachieve growth in the four domains of Knowledge andCommunication, Food and Healthcare, Lifestyle and Mobility,
and Environment and Energy. There are numerous issues
throughout the world that still remain unsolved, as evidenced
by the Sustainable Development Goals (SDGs) adopted at theUnited Nations Sustainable Development Summit 2015. As I
explained previously, we are working to solve these problems
by further fortifying efforts to combine the strengths of DNP
and our partners.
DNPʼs four growth areas each have different characteristics
and there are also variances in the speed of initiatives.
Therefore, it is important to achieve well-balanced growth
while considering priorities in allocating resources.
The second priority policy is “Provide value to the global
market.” Value chains and information networks currently
span the globe and are closely connected, and therefore,
DNP will also undertake business with an eye toward theentire world. In doing so, we will accurately identify thecharacteristics, issues and needs of each region overseas
and will determine whether DNPʼs products and services
would be of value there.
DNP has been carrying out business overseas since 1964.
Today, approximately 5,000 local DNP employees work at
business sites outside Japan. In the future, I would like tofurther raise the synergies between our businesses in Japanand overseas.
The third is “Expand corporate value by means of all kindsof structural reforms.” Remuneration for the value we provide
comes in the form of profits. For this reason, we cannot
achieve growth as a company without firmly raising value.

Moreover, even newly created value can also gradually lose
its appeal with the passing of time or when other companies
catch up. To maintain and strengthen our businesscompetitiveness and maximize profits, we will therefore
continually re-evaluate our strategies, tactics and markets
from the perspective of “value” while working to optimize
internal systems and rules.
To the present, we have integrated and reorganizedbusiness departments and Group companies. We willcontinue to implement every type of structural reform as we
aim to build an optimal business portfolio while taking both
top-down and bottom-up approaches.
―― Could you explain your specific business results

for the fiscal year ended March 31, 2019?

DNP achieved growth in operating income byconcentrating on development and sales ofstrong products and services.
In the fiscal year ended March 31, 2019, the DNP Group
achieved a 7.6% increase in consolidated operating income
from the previous fiscal year to 49.8 billion yen. We attained
this increase by concentrating on the development and salesof strong products that can secure top shares in Japan andoverseas. Additionally, the DNP Group will build a robust
business portfolio by proactively investing in priority
businesses and undertaking restructuring to bolster
competitiveness, including through the reorganization ofbusiness departments and group companies.
Looking at main priority businesses, in the Information
Communication business, we will expand the smart cardbusiness and payment services-related business amid the shift
to cashless payments as well as the Business Processing
Outsourcing (BPO) business to handle business processes onbehalf of companies in response to labor shortages and work
style reforms. We will also pursue the global expansion of“kotozukuri ,” experience-based value creation, business thatappeals to the joy of photography by leveraging our strengths
in photoprint materials, which command the worldʼs largest
market share.
Regarding the Lifestyle and Industrial Supplies business, inthe packaging and decor materials fields, we will work todevelop high-added-value products and services. We will also
expand our business for battery pouches for lithium-ion
batteries amid high growth in automotive applications with theadvance of vehicle electrification. In the Mobility-related
business, we will intensively undertake the development ofhighly functional, high-quality products and services such as
curved resin glass that contributes to lighter vehicle weights
and decorative films that combine design with functionality.
One typical product that synergizes our strengths in “P&I
(Printing and Information) is the DNP Multifunctional

Insulation Box. This product utilizes our monozukuri such as
vacuum insulation panels that deploy our strengths in“printing” to maintain a certain internal temperature inside
the box for a long time without using a power source. In
addition, the insulation box uses simulation software
independently developed utilizing our strengths in“information” to calculate the optimal amount of refrigerantin accordance with the transportation distance. Furthermore,
we will combine IC tags and sensors to contribute to thebuilding of cold chains, a logistics format for appropriate
temperature control with little environmental impact.
In the Electronics business, we are expanding our businessfor metal masks and optical films used in the production oforganic light-emitting diode (OLED) displays in gearing up forthe switch from liquid crystal displays (LCD) to OLED
displays. Additionally, we will provide total solutions thatutilize DNPʼs nanoimprinting technologies in a diversity offields requiring microfabrication.
―― What are your specific initiatives for raising thecompetitiveness of your businesses?

We will allocate management resources inan optimal manner and maximize their use.
First, we aim to achieve further growth in net sales andoperating income by building a strong business portfolio witha focus on businesses with high competitiveness in Japanand overseas. To raise the effectiveness of these efforts, wewill optimally allocate and maximize management resources
to build a strong management foundation.
Moreover, to accelerate new business development
centering on growth areas, we will take such steps as
making R&D investments and capital investments and pursue
M&A. Meanwhile, in responding to major changes in thebusiness environment, we must build a strong financial
structure and realize a balance between undertaking
proactive investments and maintaining internal reserves.
In the fiscal year ended March 31, 2019, as an initiative
for improving profitability and efficiency of capital, werecorded a 16.6 billion yen impairment of fixed assets
targeting idle assets not expected to be used in the futureand business-use assets with diminished profitability. As
another example of measures for effectively using assets, we
continuously re-evaluate our stock holdings. In line withthese efforts, in the fiscal year ended March 31, 2019, wesold stocks that we no longer had any significant reason forholding and thus recorded an 18.0 billion yen gain on sale ofinvestment securities.
We are also pushing ahead with the streamlining of businesssites in Japan and overseas. To this end, we are selling fixed
assets such as real estate deemed to no longer have further
use and are involved in redevelopment in the Ichigaya district

DNP Integrated Report 20197

TOP INTERVIEWof Shinjuku ward, the location of our Head Office. Besides
groupwide efforts to promote the optimal allocation of humanresources and other management resources, over the next
several years we plan to relocate functions from our DNP
Gotanda Building (Shinagawa ward, Tokyo) to the Ichigaya
district. In the fiscal year ending March 31, 2020, DNP plansto sell the DNP Gotanda Building and to record a corresponding
extraordinary gain of approximately 20.0 billion yen.
Reflecting the favorable evaluation of our initiatives forbuilding a strong management foundation and improving
profitability, in June 2019 DNP once again received an
AA- rating from Rating and Investment Information, Inc. (R&I).
On a different front, DNP implemented measures forrepairing defects in some of the wallpaper products
manufactured by the Company between February 2011 andFebruary 2014. These defects make surface designs
susceptible to falling off as the wallpaper surface becomesbrittle after installation due to changes over time. DNP has
also confirmed through testing by several specialized agencies
that the wallpaper with these defects has no problems interms of safety. New scientific testing and analysis has been
carried out based on the data obtained to the present throughthese repair measures and as a result DNP again made arational estimate of the largest potential future impact.
Accordingly, in the fiscal year ended March 31, 2019, DNP
recorded a 75.0 billion yen provision for additional repair
costs. By doing so, we will curb any increased impact of past
wallpaper products on our future business results and move
forward with our concentration on priority businesses, as wellas make efforts to further increase corporate value.
―― Can you explain DNP ʼs approach to corporate

governance?

Strengthening corporate governance is a
crucial management issue for improving
corporate value and becoming a company
that earns the trust of all stakeholders.
DNP considers strengthening corporate governance to be a
crucial management issue for contributing to the sustainable
development of society, improving our own corporate value
and becoming a company that earns the trust of all
stakeholders. DNP has built and operated a strong structure
for management decision-making and business execution
and for auditing and monitoring these functions. At the sametime, DNP works to enhance integrated corporate governancesuch as by implementing thoroughgoing employee training
and education.
At the General Meeting of Shareholders in June 2019, a
resolution was approved for the election of nine Directors, ofwhich three, or one third of the Board, are Outside Directors.
In June 2018, DNP selected one female Corporate Officer and8will continue to consider measures for raising the diversity ofboard members. At venues such as the Board of Directors as
well, deliberations on medium- and long-term business plans
and specific discussions for attaining the plans are deepening.
DNP is actively promoting environmental, social andgovernance (ESG) initiatives that encompass improving
governance, as it works to achieve sustainable growth, andthese initiatives have earned high acclaim from outside thecompany. For example, DNP has been selected for many
indices of global socially responsible investments (SRI), mostnotably the FTSE4Good Global Index and MSCI Global
Sustainability Indexes. Additionally, as of July 2019, DNP
was the only company in Japanʼs printing industry to be
selected as a constituent of all four ESG indices adopted by
Japanʼs Government Pension Investment Fund (GPIF).
DNPʼs environmental and social initiatives have also earned
recognition. In May 2019, DNP was ranked fourth among
companies in the domestic manufacturing industry in the Nikkei“22nd Environmental Management Survey” company ranking.
Furthermore, the previously mentioned DNP Multifunctional
Insulation Box won the “Grand Prize,” the highest award at the28th Annual Global Environment Awards sponsored by the
Fujisankei Group.
―― What initiatives are you undertaking for further

Specifically, we will significantly raise bonuses and wage
levels for young employees and support investments andeducation that enable young employees to refine their own
sensibilities. Additionally, we are taking measures such as
setting up an ICT professional system, rebuilding our wage
system and benefit system by job type and region, reviewing
the evaluation system and introducing a human resources
development management framework.
Promoting flexible work styles that make effective use oftime and places is also important. Therefore, we will create
workplaces that raise efficiency by introducing telecommuting
and promoting work style reforms for management positions.
―― Finally, what is your message to stakeholders?

DNP aims for a presence that is always close
to people based on Todayʼs Innovation is“Tomorrowʼs Basic .”We at the DNP Group have a corporate culture of continually
taking on the challenge of promoting change. Following WWII
in particular, we have raised corporate value as times shifted
dramatically by focusing efforts on “taking on the challengeof promoting change” by undertaking “expansion printing” tosignificantly broaden our business domains. Todayʼs changes
are larger and becoming even more drastic than in the pastand this means we will have to take on further challenges.
The 2020 Tokyo Olympics and Paralympics are finallyapproaching. The DNP Group intends to widely communicate
the appeal and potentials of sports and hopes to connect
these activities to its future business.
We will strive to anticipate social issues and peopleʼs
expectations by taking a global perspective as well as a
medium- and long-term perspective looking 10 years into the
future and even as far ahead to 2050. In doing so, we will
anticipate the type of value being demanded and provide
optimal products and services by synergizing our strengths in“P&I” with those of our partners.
We will ensure that DNPʼs products and services exist as“basics” that naturally not only solve social issues in the daily
life of each and every consumer but also exceed peopleʼs
expectations. DNP has breathed this desire into the corporate
statement “Todayʼs Innovation is Tomorrowʼs Basic ” as weundertake a variety of businesses.
DNP will of course continue to maintain transparency andfairness, deepen TAIWA (dialogue) with numerous stakeholders
that include shareholders as well as achieve sustainablegrowth and improve corporate value. In the future, I ask foryour further support as we work to achieve our objectives.

exerting the abilities of employees?

We are progressing with the design andrebuilding of personnel systems to realize
more work-friendly environments and to
make it easier to create value.
The approximately 40,000 employees comprising the DNPGroup are above all valuable assets with unique strengths that
we can synergize to create unlimited potentials. Also, we musteven more vigorously promote collaboration with outside
partners that possess strengths that differ from those of DNP.
To do so, while focusing on society as a whole as it
undergoes rapid changes, we will work toward designing andrebuilding our personnel systems to create a more open andfree organization, realize even friendlier work environments
and make it easier to create value.
We have already promoted a variety of reforms to thepresent. In April 2019, we revised our personnel systems to
mainly target people from both inside and outside the company
who have diverse careers as well as young employees.
For example, we enhanced our employment-related
system to actively incorporate perspectives from outside thecompany. To spur employee innovation, we took suchmeasures as introducing fixed-term employment in certain
specialized fields and a return-to-work system and began
allowing some side jobs and dual employment.
We are also revising employee benefit-related systems.

DNP Integrated Report 20199

S EC TI O N 1

INITIATIVES FORVALUE CREATION

10

12

Sustainable Growth of DNP

16

Risks and Opportunities

18

DNPʼs Value Creation Process20

Expanding DNPʼs Business Areas by Applying and Developing Technologies

24

Promoting Business Commercialization in Growth Areas

26

Issues Driven Development: Case 1

28

Issues Driven Development: Case 2

30

Issues Driven Development: Case 3

32

Issues Driven Development: Case 4

DNPʼs BPO Supported by Advanced Information Security Foundations
Expansion of Sustainability by Reducing Environmental Burden
Products and Services That Enhance Peopleʼs Mobility and the Value of Logistics
TOPICSDNP Integrated Report 201911

Evolution of DNP’s Businesses

INITIATIVES FOR VALUE CREATION

Sustainable Growth of DNP
1876

1935

1907

1951

● 1868: Meiji Restoration〜Civilization and enlightenment

1973

2001

1987

● 1945: End of war〜Toward a period of rapid economic growth2015● 1991: Bursting of the bubble economy〜Toward the “lost decade”● 2008: Collapse of Lehman Brothers● 2011 (March): Great East Japan Earthquake● 1876: Founding of Shueisha, DNPʼs predecessor ● 1935: Merger of Shueisha and Nisshin Printing to form Dai Nippon Printing● 1907: Founding of Nisshin Printing● 1973: Surpassed U.S.-based R.R. Donnelley & Sons Company tobecome the worldʼs largest comprehensive printing company● 1951: Start of five-year reconstruction plan

● 1987: Began transforming toward information processing businessInformation Processing Business ―Information Communication BusinessBroadening Business Domains through Expansion Printing“DNP Group Vision for the 21st Century”

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

Amid the dramatic changes in the
postwar period, based on thethinking that “ our company can nolonger prosper by relying only on
business fields to the present,” theCompany strived to expand its
business in anticipation of the waysof life of people in the future.
Accordingly, the Company promoted“ expansion printing ” aimed atdiversifying its businesses,
especially by means of applying andadvancing its printing technologies
in addition to stabilizing
labor-management relations,cultivating customers bystrengthening sales capabilities andimproving production efficiency andquality. DNP significantly broadened
its business domains by expanding
its business, which until this time
was centered on publication printing,to commercial and securities printing
as well as printing for packaging,building materials and electronics
products. DNP believes that its
growth strategy of expanding
business by continually honing suchtechnologies as information
processing, microfabrication,
precision coating andpost-processing technologies toensure these remain at the cuttingedge will allow DNP to realize its
current business vision“ P&I Innovation.”On the occasion of its 125th anniversary, DNP announced its
Vision that expresses the direction of DNP ʼs growth. This Visionprescribes our business philosophy as “ contribute to thedevelopment of a society based on emergent evolution in the
21st century,” while designating “ P&I Solution DNP,” which willsolve various issues by combining our strengths in printing (P)and information (I), as the concept watchwords for the entire
Vision. In addition, the initials “ DNP,” which we had used fromthe past, will serve as the brand for the entire Group and weaccelerated efforts to raise the value of this brand.

1935 Merger of Shueisha andNisshin Printing toform Dai Nippon Printing

Since its founding, DNP has
continued to create a diversity of
products and services by safely andreliably handling the valuable
information of companies and people.
The Company also anticipates trends
in digitization and networking andundertakes a variety of businesses bysynergizing paper printed materials
and information services that areprotected by sophisticated security.

We are expanding our business to suchdomains as packaging and building(decorative) materials by broadening ourprinted items to films, metals and otheritems as well as forming items after
printing. We are providing packaging forfoods, daily-use items and other items,
interior and exterior materials forbuildings, automobiles and others, andbattery materials and life science-relatedmaterials, thereby providing value that is
indispensable in peopleʼs lives and incompany business processes.

Shueisha1943

DNP (non-consolidated)

1934

12

1890

1951

Full-scale entry into paper containerand soft packaging field →Expansion
into packaging business

1900

1910

1951

2004

Began development of decorative
paper for buildings → Expansion into
Living Spaces businessSuccessful formation ofcapillary patterns

2009 Starting work style reform activities
We commenced work style reform activities in three-year increments andinitially aimed for a thorough reduction in working hours. After achieving
certain results, from the second phase that began in 2012, we areadvancing these activities to raising job motivation and the added value of
our work. During the fourth phase that began in 2018 as well, we arepromoting the creation of workplaces that can fully deploy the abilities ofeach and every employee by effectively utilizing time resources.

1958

Succeeded in thetrial productionof shadow masks
for color TVs →Advance into thedisplay products
business

DNP (non-consolidated)

1959

Successfully developed photomasks
for semiconductors →Advance into
electronics devices business

DNP (consolidated)

10,000300,000

5,000

150,000

Year ended
May 1976

Net sales (non-consolidated)
268,529 million yen

2014 Business and capital tie-up with PSP, a major player

in medical imaging management systems→Expansion toward life science-related businesses

Year ended
May 1977

DNP Net sales 12,763 thousand yen

Year ended
March 2019

Consolidated net sales
338,144 million yen

Consolidated net sales
1,401,505 million yen

300,000 1,200,000

1,200,000

150,000

600,000

Shueisha Net sales 2,884 thousand yen

5,000

1880

Development of photovoltaic
module components → Expansion
into energy-related businesses
along with the commercializationof pouches for lithium-ion
rechargeable batteries in 1999

(Unit: million yen)

10,0001876

1983-85

Development of thermal mass anddye-sublimation thermal transfer
printing media → Expansion to
Imaging Communication business

DNP is further expanding its businessdomains by sophisticating
technologies such as its etching
technologies that form fine patterns on
metals. Since contributing to the birthof Japanʼs first domestically produced
color TV, DNP has been developing
and providing materials for use invarious types of higher-definition,higher-quality displays and electronics
devices that respond even tonanometer miniaturization.

Net Sales Trends and History(Unit: thousands of yen)

1983

Development of smart cards →Expansion to todayʼs cash cards,
credit cards, transportation cards
and accreditation (ID) cards

P&I Solutions

2003

Electronics

Founding
1907 Founding of Nisshin Printing

Information Communication

Starting from a “Civilized Business”

Lifestyle and Industrial Supplies

Comprehensive Printing Business

Second Corporate Founding

Publication Printing Business

1876 Founding of Shueisha

0● 2001: Announced “DNP Group Vision for the 21st Century”

1920

1930

1935

1940

0

1946

1950

1960

1970

1975＊1600,00001977 1980(Notes) ＊ 1 The May 1975 fiscal year was a six-month settlement period due to the transition to a May fiscal year-end.
＊ 2 The March 1988 fiscal year was a ten-month settlement period due to the transition to a March fiscal year-end.

1988＊2 1990

2000

2010

2019

DNP Integrated Report 201913

Evolution of DNP’s Businesses

INITIATIVES FOR VALUE CREATION

Sustainable Growth of DNP

2018

2015

2019

2020

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

2030● 2020 Tokyo Olympics and Paralympics● Adoption of Paris Agreement to combat climate change at COP21● 2018 (June): Inauguration of Yoshinari Kitajima as President ● Fiscal 2019〜: Change personnel● 2015: Formulating DNP Group Vision 2015

● Start of fourth phase of work style reform commenced

in 2009

systems and others● 2019 (April): Declared support for TCFD

● 2030: Attainmentof SDGs● DNP is an official sponsor for2020 Tokyo Olympics and Paralympics(printing services)

P&I Innovation
DNP Group Vision 2015
Following the establishment of its Vision in 2001, DNP newly established a Group Visionamid an increasingly severe business environment after the Lehman Brothers bankruptcy
and the Great East Japan Earthquake. With its Corporate Philosophy of “ The DNP Group
connects individuals and society and provides new value,” DNP clarified the social issues
that it is uniquely capable of solving as well as the expectations of people and expressed
the four business themes it must address as “ four growth areas.”● Brand Statement: “Todayʼs Innovation is Tomorrowʼs Basic”

The DNP Group
connects individuals
and society andprovides new value.

Business
VisionUse P&I Innovations to
expand business,
primarily around four
growth areas.

DNP Group
Guiding
Principles
TAIWA (dialogue)
and cooperation

Four Growth Areas
Knowledge and Communication

Lifestyle and Mobility

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

A future that safely and securely protects
all living spaces where people worldwide are mobileand 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 by information security,
DNP will provide people with the information they want when they need it inan 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 andhospitals, as well as in cars and railway cars. We will add functions that create
comfortable spaces and develop superbly designed products and combine thesewith the Internet of Things (IoT) to contribute to the realization of a smart society.

Environment and Energy

Food and Healthcare
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 to co-exist
harmoniously with the earth

Amid a shift in global demographics and the ongoing decline in birthrates
and aging of society in Japan, DNP will create value that supports safeand high-quality lives and helps people maintain their health throughout
their lives. DNP will support the food value chain through its functionaland hygienic packaging while also taking on the challenge 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 thatenables resource and energy savings and helps preserve biodiversity.

Toward our “Third Corporate Founding”

Corporate
Philosophy

For Realizing our “Third Corporate Founding”
DNP will now synergize its unrivalled and unique strengths
in P&I (printing & information) as well as carry out
wide-ranging cooperation with our numerous partners andsolve social issues while focusing on the creation of newvalue that meets the expectations of people. DNP, which

has continued to “ Take on the challenge of promotingchange” in any era, will deploy the total strengths of “AllDNP ” with the entire Group working as one to attain its“ Third Corporate Founding” and ensure this leads tosustainable growth both for DNP and society.

Three Key Measures for Realizing Our “Third Corporate Founding”
Generate value>>
primarily in growth areas

As reflected by the SDGs, there are still numerous issues throughout the worldthat remain unsolved. DNP will create unprecedented “ new value” by developing
and providing products and services that help solve social problems and exceed
peopleʼs assumptions and expectations.

Provide value to>>the global market

With value chains now extending across the globe, DNP will carry out its
business from a global perspective that looks beyond Japan. As of March 2019,
DNP operated 15 production bases and 27 sales bases overseas and will widely
provide “ new value” in Japan and overseas.

Increase corporate value> > by means of all kinds ofstructural reforms

We will continually re-evaluate markets and business models and promotebusiness structure reforms and cost structure reforms that include integrating andreorganizing business departments and bases from the perspective of value. We
will also work to expand value through the integrated utilization of suchnon-financial capital as human capital and intellectual capital and financial capital.

TOPIC S

Sustainable Development Goals
In September 2015, the 2030 Agenda for Sustainable Development was adopted by all
United Nations member states (193 countries). The Agenda sets Sustainable Development
Goals (SDGs) as an action plan and strives to realize a world where “ No One is Left
Behind ” through initiatives for attaining 17 goals and 169 targets. We will utilize the SDGs
as a “ yardstick for creating an even better society ” and will fulfill our corporate social
responsibility toward the realization of a prosperous and sustainable society.
[Reference: Pages 16-19, 24-25, 40-41]

14Promoting Fundamental Reforms of Personnel Systems for
Creating, Providing and Expanding New Value through Innovation
While focusing on society as a whole as it undergoes rapid changes, DNP is
designing and rebuilding personnel systems for creating medium- andlong-term value. We have already promoted a variety of reforms to thepresent and in the fiscal year ended March 31, 2019, we started revising
our personnel systems that mainly target people from both inside andoutside the company who have diverse careers as well as young employees.

Employment-related systems to actively incorporate perspectives fromthe Company: Introduce fixed-term employment formats, newly
1 outside
establish a job-return system, allow some side jobs and dual employment, etc.

2

Revision of employee benefit-related systems: Extensively raise bonuses andwage levels for young employees, set up an ICT professional system, rebuild wage
system and benefit system by job type and region, review the evaluation systemand promote dialogue-based human resources development management, etc.

and support of flexible work styles that make effective use of
3 Promotion
time and places: Introduce telecommuting, promote work style reforms, etc.

DNP Integrated Report 201915

Risks and Opportunities

INITIATIVES FOR VALUE CREATION

Based on its corporate philosophy, DNP aims to resolve social issues and continues toprovide new value that meets peopleʼs expectations. In doing so, we will correctly
recognize economic, social and environmental issues and risks and respond to rapidchanges in the business environment through activities directly linked to “ value creation”
and those serving as a “ foundation to support value creation.”

Value Creation
Expanding business opportunities– Turning risks into opportunities and contributing to theachievement of the SDGs

Identification of Risks
We analyze global social issues and environmental, social and governance (ESG)*
trends and broadly identify economic, social and environmental issues that representrisks. We then prioritize activities and define targets based on the interests ofstakeholders and the impact on them as well as the degree of importance to DNP.

EconomyIssues and risks related to theactivities and business
Visualization of supply chain information
Changes in economic conditions, consumption trends inJapan and overseas, currency fluctuations and others

Interests of and impact on stakeholders

EconomyBusiness Risks Assumed fromthe Perspective of the SDGs

Society

Environment

Most important* Including the Sustainable Development Goals (SDGs), Global Reporting Initiative (GRI) Guidelines,
the UN Global Compact, ISO 26000, Dow Jones Sustainability Indices (DJSI), FTSE4Good Global
Index and MSCI Global Sustainability Indexes

foundation of DNP ʼs corporate
commercialization themes
Acceleration of technological innovations andintensifying development competition
Increase of large-scale cyber attacks

Workforce shortage caused by loss of
personnel or difficulty in acquiring personnel

Emerging issues toward an information-driven society

Growing disparity between urban and rural areas

Food loss, and food safety and security

Revisions to Japanʼs energy policy
Worsening marine pollution and ecosystem degradation

Response to climate change(mitigation and adaption)

Depletion of natural resources

Shift to a circular economy

Issues and risks related to
the foundation of
corporate activities

Shift to a sharing economy

Issues and risks related to
the foundation of DNP ʼscorporate activities
Failure or disruption of information infrastructure

Leakage or infringement of intellectual properties
Reduced performance of or internal control
deficiencies of alliance partners
Social/political turmoil andincrease of country risks
Declining reputation
Compliance violations

Environment

Society

Loss of biodiversity
Growing water risk

Failure or disruption of social infrastructure
Changes in supply-demand balance interms of raw materials procurement
Large-scale unauthorized use/leakage of data
Work environment issues

DNP is promoting activities to expand business opportunities
while regarding the recognized risks as the needs of society.
D N P aims to s ol ve s o ciet y ʼ s challenges t hrough busines s
activities in the following four growth areas.

Knowledge and Communication
A future where people worldwide can expand
opportunities for safe and secure communications
and pass on and develop knowledge

Food and Healthcare
A future where people around the world no longer haveanxieties about their own lives and can lead lifelong
safe, secure, comfortable and high-quality lives

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

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

Foundation to Support Value Creation
Measures for minimizing the impact ofassumed risks
For activities to serve as a “ foundation to support value
creation,” DNP has selected the following seven Principal
Themes (representing material issues). Based on these themes,
we have been promoting initiatives for integrated risk
management and rotating the plan-do-check-act (PDCA) cycle.

Flaws in quality check items for products and services
Reinforcement of response to climatechange and natural disasters
Tightening and easing of legal andother environmental regulations

Fair Operating
Practices

Human Rights
and Labor

Environment

Responsible
Procurement

Product Safety
and Quality

Information
Security

Corporate
Citizenship

ImportantDegree of importanceFor details, see pages 40-41.

to DNP

Reference: SDGs “ wedding cake” illustration presented by Johan Rockström and Pavan Sukhdev

16

DNP Integrated Report 201917

DNPʼs Value Creation Process

INITIATIVES FOR VALUE CREATIONDNP will utilize its financial capital and such non-financial capital as human resources and intellectual
property in an integrated manner while strengthening partnerships with stakeholders as it creates new value,
which will help enable the realization of a sustainable society and raise its corporate value.

RISKS & OPPORTUNITIESOUTPUTS

Expanding Business Opportunities -Transform Risks into Opportunities and Contribute to the Attainment of SDGs-

RESOURCES & INPUTSDNP ʼs assets and strengths that serve
as a foundation for value creation

Sales

Total strengthsof All-DNP
Microfabrication

Precision
coating

Postprocessing

Project
planning
anddesignInformation
processing

Materials
development

Assessment
andanalysis＊ Please refer to pages 20-23,“ Expanding DNP ʼs Business Areas by

Applying and Developing Technologies.”

Financial capital (consolidated)●●●

Net sales: 1,401.5 billion yen (down 0.8% YoY)●

Total assets: 1,775.0 billion yen

Total number of employees: 38,051 (33,351 in Japan, 4,700 overseas)
Promote the reform of personnel systems and other areas andraise the value of human resources

Manufactured capital●●●

Number of production bases: 61 in Japan, 15 overseas●

Project activities,
human resource exchanges,
etc.

Socialand
Relationship
Capital

Number of sales bases: 37 in Japan, 27 overseas
Capital investment: 41.1 billion yen

Intellectual capital●Partnerships,
capital ties, etc.

Operating income: 49.9 billion yen (up 7.6% YoY)

Human capital (consolidated)●

Dialogue and cooperation
with partners

Joint development/operation,
global collaboration, etc.

Number of Japanese patents held: 12,392
R&D outlays: 33.8 billion yen

Natural capital
Thorough implementation of CSR Procurement Guidelines,
Green Procurement Guidelines, etc.
● Reduce environmental impacts by developing andproviding environmentally conscious products and services● Co-existence with the global environment through various typesof environmental activities and the Biodiversity Declaration

Joint development,
sharing of intellectual
property, etc.

●

(Year ended March 2019, as of March 31, 2019)18

Preservation of
the global environment andbiodiversity, etc.

Collaboration
with a diversity ofpartners
Approximately
30,000 client companies● Global companies &companies deeply rooted
in local communities● Start-up companies● Various types of education
and research institutions● Regional andlocal governments● NPOs, NGOs andvarious organizations● Others■ Information Innovation Business(Marketing, Information Security)

Generate value that utilizes
peopleʼs diversity● Highly specialized humanresources such as in ICT,
security and creative fields● Others●

Knowledge and Communication■ Imaging Communication Business
Products and services with top shares

Food and Healthcare□ Smart cards: Top share overall in Japan and top sharein domestic financial markets

Lifestyle and Mobility
Environment and Energy■ Packaging Business■ Living Spaces Business■ Industrial Supplies Business
Products and services with top shares□ Aseptic filling systems for PET bottles: Top share in Japanfor manufacturing volume of filling systems for PET plastic
bottles for beverages□ Building decorative materials: Top share of domestic market
for floor coverings and steel plates□ Pouches for lithium-ion batteries: World top share●

Collaboration
with diverse
human resources

Generate value in “ four growth areas”

photo prints: World top share■ Display Components BusinessElectronics

Technologies
and
R&D

DNPʼs
technologies

Solve social issues while creating, providing andexpanding value that exceeds peopleʼs expectations□ Dye-sublimation thermal transfer printing media for

Lifestyle andIndustrial Supplies

Based on strong relationshipsof trust and a sophisticatedsecurity infrastructure, we
engage in businesses involving
various types of content(text, image, video, voice),
confidential information andcritical information.

Information
Communication(Publishing & Media Services, Education and Publications Distribution)

Project
planning
anddesignManagement
andoperation■ Publishing Business(Color filters for liquid crystal displays, optical films, metal masks fororganic light-emitting diode (OLED) displays, others)■ Electronic Devices Business(Photomasks for semiconductors, others)

Products and services with top shares□ Optical films for displays: World top share□ Metal masks for OLED display manufacturing:

World top share

Beverages

Production
andmanufacturing

Create strong products and services

O U T C O M E S & I M PA C T S

Hokkaido Coca-Cola Bottling Co., Ltd.
■ Beverages BusinessCorporate Governance
DNP recognizes that corporate governance is an importantmanagement issue and therefore builds and operates systems for
accurate and integrated management decision making and fairand quick execution of business as well as for supervising andauditing these functions.

Realizing an “even better future”
through DNP ʼs businesses
Work styles that maximize the strengths of individuals
and increase synergies● “ Hard ” and “ soft ” value creation toward theimplementation of 5G● Inherit and advance knowledge and deploy experiential
value globally● Advancement of STEAM education/ICT/lifelong learning● Extend healthy lifespans and raise Quality of Life
● Expand the value of regenerative medicine/telemedicine● Digital transformation that raises the experiential valueof “ shopping”● Toward a safe and secure cashless society● Information platforms protected by cyber security● Lead social change “ from ownership to access ”● Inclusive design/universal designs that leave nobody
behind● Provide stable supplies of food and reduce food loss
through monozukuri (manufacturing) and ICT● Preserve ecosystems and realize efficient resource
circulation● Toward the realization of more comfortable andfunctional living spaces● Realize a smart mobility society with no mobilityimpaired people● Provide solutions that curb global warming● Provide value that contributes to reducing environmental
impacts and expanding sustainability●

Please refer to pages 24-25, “ Promoting Business Commercialization in Growth Areas.”

DNP Integrated Report 201919

Expanding DNPʼs Business
Areas by Applying andDeveloping Technologies

Editing, Manuscript Submission and Layout
We design the most effective information media in accordance with the content
and target user, select the number of colors, format and type of paper and printing
methods, as well as perform design and layout. At this stage, we consider the mostefficient production processes in addition to undertaking such work as preparing
the necessary manuscript and materials and processing a variety of data.

1

Editing,
Manuscript
Submission
and Layout
This includes such processes asplanning printed products, selecting
materials and printing methods,
designing processes up to delivery,
managing and operating themanuscript, inputting andprocessing text and image data,and creating layout data.

Information
processing

Effectivenessassessment

Examples of printing such as publication printing and commercial printing

Technologies cultivated from this printing process

Project
planning
anddesignprinting processes
Product delivery

Process 1

Basic

Feedback

DNP ʼs strength is derived from combining a variety of technologies in printing
and information. With technologies created from basic printing processes as abase, we continually refine these into cutting-edge technologies and apply
and advance these technologies to create a diversity of businesses.

INITIATIVES FOR VALUE CREATION

4

2
Process 2

Film Making and Platemaking
Color separation of printing data is produced and then output onto film (film making)followed by the creation of a plate (platemaking) that is set to a printing machine.
We are also promoting the spread of Computer to Plate (CTP), a method that outputs
different plates for each printing method directly from data without film output.
Technologies cultivated from this printing process

Microfabrication

In the printing process, extremely minute processing is performed
to ensure that halftone dots of printed ink are difficult to discernwith the naked eye. We have further advanced this technology toenable microfabrication for such substrates as metals, glass andplastics. This technology is being applied in numerous leading-edge
electronics products and in such fields as hologramanti-counterfeiting and security.

＊ C（cyan≒blue-green）、M（magenta≒red-purple）、Y（yellow）、K（black ）Technologies cultivated from this printing process

Postprocessing

Post-processing technologies are derived from various
processes that follow printing, such as bookbinding. These
technologies are applied to make books and other printed
products easy to read and use and suitable for the use andpurpose of the finished product. Moreover, these technologies
are also outstanding for use in three-dimensional processing
such as die cutting and assembly and have enabled thecreation of packaging for such items as foods, beverages anddaily necessities; the development of systems for the aseptic
filling of contents; and the inspection, measurement andanalysis of various products.

Printing

Printing

3

A printing plate with the necessary
number of colors is wound around aroll, ink is applied and high-speed
and high-precision printing on paperor other items is carried out.

Ink is put onto the printing plate and applied thinly and uniformly to paperand films. Printing methods include letterpress printing, lithographic
printing (offset printing), intaglio printing (gravure printing), stencil printing(silk printing) and digital printing (direct output). Each of these methods
requires a different printing plate.
Technologies cultivated from this printing process

Precision
coating

Precision coating is a technology that forms a coating film
on a materials with a variety of features, in either single ormultilayers, in a homogenous and uniform manner on thesurface of substrates such as paper as well as plastic film,
metal and glass. A variety of functions that include opticaland barrier properties, and heat resistance can be added,
giving this technology widespread applications in suchareas as packaging and building materials, photographic
print materials, battery materials and optical films.

A thin, uniform layer of ink andother materials is applied.

Fine patterns areformed to create a seal.
Laser

20

Platemaking: Data is transcribed froma film made into a plate to a metal
sheet to produce the printing plate.

Multiple pages of a book are printed on large sheets of paper that are
folded to ensure pages are in order and layered for binding. Subsequently,
the edges of the pages are trimmed down to the final shape. Pages areprocessed into a shape with needed functions matching the application.
This is a crucial process for stabilizing product quality and improving
productivity.

Process 3

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

Binding and Post-Processing

Binding andPost-Processing
Printed paper is stacked and boundto create the shape of a book. Box
making and three-dimensional
processing such as for confectionary
packages are also undertaken.

In basic printing processes, the planning and designing of a production
process suited to the desired layout is crucial. DNP continuously
handles large volumes of text, still images, videos, voice and other data
and arranges data formats and color tones, and also undertakes
processing and storage. By doing so, DNP has accumulated know-how
in handling large volumes of data and expanded into big dataprocessing and analysis and security technologies.

Process 4

Exposure

ErosionDNP Integrated Report 201921

Expanding DNPʼs Business Areas by
Applying and Developing Technologies

INITIATIVES FOR VALUE CREATION
ナノインプリント製造工程
光学設計

Creating New Value by Combining Technologies,
Ideas and Know-How
DNP has cultivated business domains by applying andadvancing technologies cultivated through diverse printing
processes. While continually taking on the challenge ofcultivating leading-edge technologies, DNP will develop andprovide new value by combining technologies. Further, we

Ideas

DNPʼs P&I technologies
Printing(in a narrow
sense)

Etching
processing

Publishingsolutions

PackagingdesignPrecision
engraving

Microfabrication

Photolithography

Coating

Branding

Molding

HologramMedia
conversion
technologies

Project
planning
anddesignSales
promotion

DNP Nanoimprint Solutions

光学設計

Livingspace
designFonttechnologies

写真製版
技術

EB andUV curing

Vacuumdeposition

エッチング
加工

コーティング
技術

Dataanalysis技術

硬化技術

Information
security

Aseptic
filling
processing

Postprocessing

Organicsynthesis
technologies

Laminating
technologies

Technologies
Plastic
forming

写真製版

ナノインプリン
Transfer
Assayト製造工程
processing
design

エッチング

加工
Materials 技術 Pigments
anddevelop- photosensitivementmaterials

評価・分析

賦型技術

精密彫刻
技術

コーティング
Process
技術

材料開発

EB･UV
硬化技術

評価・分析

Assessment
and モールド
andmaterial
analysis
diagnosis

Toward the Building of
Platforms That Support
Global & Personal Communication
DNP will combine its technologies in project planning anddesign, information processing, assessment and analysis
with the strengths of its partners to build platforms that are
indispensable in society where digital networks are
spreading and the sharing economy has emerged.
DNP will build a “digital marketing platform” that raises
the effectiveness of corporate economic activities bycollecting and analyzing big data; a “cashless platform” that
supports safe and secure settlements; and DNP ʼs unique“ IoST* platform” that securely maintains the IoT, whichconnects all things to networks. By doing so, DNP will
ensure diverse communications.

22

Process
simulation

モールド
UV 感光性樹脂
基板

Database
基板
analysis
加圧Information
processing

UV 照射

Partnersʼ
strengths

Project
planning
anddesign

EB･UV
硬化技術

評価・分析

UV photosensitive resin

Etching
processing
写真製版

Coating

Materials
developコーティング
ment 材料開発
技術

Molding

賦型技術
Precision
engraving

精密彫刻
EB
and
技術
UV curing

Assessment
EB･UV
硬化技術
and 評価・分析
analysis

光学設計

技術

エッチング
加工

Pressurization ト製造工程
UV irradiation
ナノインプリン

Cashlessplatform

Substrates

Pressurization

UV irradiation

Mold release

DNP ʼs nanoimprint solutions are an optimal service for companies
requiring nano-level microfabrication in fields such as sensing, which isindispensable for the automation of various types of equipment and IoT.
Nanoimprinting is a microfabrication technology used for reliablytransferring patterns with line widths measured in microns ( μm = 1
millionth of a meter) or nanometers (nm = 1 billionth of a meter) bypressing templates onto resin-coated substrates or other surfaces. DNP
provides total solutions, from design to trial production, validation andproduction, in accordance with client needs based on its molding
technologies as well as the supporting configuration designing andmold processing and its materials and evaluation technologies.
DNP also possess high-precision optical design, pattern design andtuning technologies and can consistently respond to a series ofprocesses, and this enables verification results to be fed back smoothly
into the design.

Pouches for Lithium-ion Batteries

Stretchable Electronics

Laminating
technologies

Materials
development

Assessment
andanalysis

Printing(in a narrow
sense)

パターン形成

技術

技術

材料開発

評価・分析

された樹脂 to provide film-based battery pouches as an exteriorcoating technologies
material that contributes to the realization of thinner and lighter batteries.

• Outstanding in terms of electrolytic solution
resistance laminate strength and assureslong-term reliability and preservability• Lighter than conventional metal cases andhas a high degreeof free-forming
UV 照射
離型
離型 • Non-battery application development also
possible in areas where content physicalproperties resistance and long-term
durability are also required

データ加工

メディア変換技術(Partners)
Data
DAM
processingMedia
conversion
データ
technologies（SaaS）(Partners)
DAM*(SaaS)

IoST
platform

コー

Resin withpattern formation

UV photosensitive resin

Digitalmarketingplatform

Etching
processing

CoatingLaminating
technologies

エッチング

コーティング

印刷技術
DNP has developed a sensor system thatfeatures a 加工
skin sensor技術
to
エッチング
コーティングshow electrocardiogram and othermedicaldata ona thin, ラミネート
lightweight
印刷技術
技術
加工
技術
and freely deformable skin display that attaches to the skin. We willdevelop a variety of applications for this product.

ラミネート
技術

• Consists of a 16 x 24 array of micro
LEDs and stretchable wiring mounted ona rubber sheet.
• Maintains electrical and mechanicalproperties even with repeated stretching.
• Does not impede a personʼs movement
even when directly attached to the skinand significantly reduces the burden
when wearing.
Displaying an ECG waveform

DNP Digital Marketing

Assessment
andanalysis

Mold release

UV irradiation

セールス
プロモーション

Gathering andAnalysis andaccumulating data design of measures

INPUT

Implementation in DigitalMedia and at Real Stores

PROCESSINGOUTPUT

Sales
promotion

分析技術

Analysis
Identifying
issuesDataanalysis

To contribute to medium-term marketing strategies of companies andother entities, DNP is promoting its digital marketing business that
optimizes a series of processes such as obtaining and analyzing various
types of data, planning hypotheses and implementing and validating
communication measures.

Digital marketing
platform

コー

Resin withpattern formation

UV irradiation

ラミネート
コーティング
材料開発
Lithium-ion batteries are seeing a growing
range技術of applications
such評価・分析
as for
ナノインプリント製造工程 パターン形成技術
UV 照射
された樹脂 mobile equipment and in-vehicle applications. コーテ
ラミネート
ィング
DNP
is utilizing
its precision

UV 照射

UV 感光性樹脂

Polymermaterials

精密彫刻
技術

Photolithography

Coating

材料開発
光学設計

材料開発

Mold

Knowhow

Ideas

加圧*IoST: Internet of Secure Things

OpticaldesignBookbinding
processing

Image
InformaDispersion
processing
and
tion
and
processing recognition composition
精密彫刻
EB･UV

賦型技術

OpticaldesignPrecision
coating

コーティング
技術

Substrates
Nanoimprint
manufacturing process

Partnersʼ strengths(technologies & ideas & know-how)

Knowhow

エッチング
加工

Mold
賦型技術

are continuously progressing toward enhanced ease of use;
ideas derived from the viewpoints of consumers and society;diverse know-how in sales, planning and production; and thestrengths of our partners.

DNPʼs
Ideas & Know-How

写真製版
技術

• Customer data
• Product data
• Sales promotion
information• Payment information• POS• Point• Fixed point surveys• Location information
etc.

Designingmeasures
Implementing
measuresDM
Callcenters
Store communication

Web

App

E-mailVerifying
the effectBrochures Web advertisement＊ DAM： Digital Asset Management
Saas： Software as a Service

DNP Integrated Report 201923

Issues Driven Development

INITIATIVES FOR VALUE CREATION

Promoting Business
Commercialization in Growth Areas

Through its businesses, DNP is currently focusing efforts on solving social issues that are having a
growing impact in Japan and overseas. By leveraging our strengths in P&I (Printing and Information),
we will reinforce our monozukuri (manufacturing) foundation and ICT foundation as well as selectbusiness commercialization themes unique to DNP and generate new value.

Four Growth Areas and Business Commercialization Themes
Business commercialization themes
related to all growth areas¥

3.3

trillion

Work style reform-related businesses

76¥

trillion
Inherit and advance knowledge and deploy
experiential value globally

Education and humanresources developmentrelated businesses
Advancement of STEAM
education/ICT/lifelong learning＊Japanʼs education industry market

1.3¥

trillion

Information platforms
protected by cybersecurity

138.6

¥

＊ FY2023 Forecast of size of Japanʼs

A future that safely and securely protects all living spaces
where people worldwide are mobile and lead their lives＊ FY2024 omni-channel

commerce market(Nomura ResearchInstitute, Ltd.)billion17.6＊ Percentage of cashless¥

payments in 10 years(Cabinet Office “ Growth
Strategy ” )trillion

Sharing economy-related businesses
Lead the social change from “owning to using”¥＊FY2022 sharing economy market in Japan (Yano Research Institute Ltd.)

1.5

Healthcare-related businesses

0＊Healthy lifespans of citizens will be extended to 2040
(Cabinet Office, “ Growth Strategy.” )persons

Inclusive design/
universal designrelated businesses

Development and provision of
products and services that arebillion persons easy to use by numerous people

one is left behind by 2030 under
the Sustainable Development
Goals (SDGs) adopted by theUnited Nations＊ 2030 world population of 8.6
billion (United Nations estimate)Life science-related businesses
Advance of regenerative
medicine/telemedicine, etc.
＊ 2030 domestic and overseas regenerative medicine peripheralindustry markets (Ministry of Economy, Trade and Industry)

50

Food and Healthcare
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

reduction

Manufacturing〜 logisticsʼ supply
chain-related businesses
Provide stable supplies of foodand reduce food loss throughmonozukuri and ICT＊Food loss reduction target by 2030

(Ministry of the Environment)

0＊2022 smart city-related global market (IDC Japan)

Next-next generation smart mobility
Realize a smart mobility society with nomobility-impaired people＊2030 domestic MaaS market (Yano Research Institute Ltd.)

Provide solutions that curb global warming＊Target for curbing the rise in global temperatures under the Paris Agreement

US$＊ Aim to realize a society where no

Smart city-related businesses
Realization of more-comfortable andfunctional living spaces

Climate change response-related businesses℃

Extend healthy lifespans andraise quality of life

6.4

trillion

information security market (IDC Japan)％

24

Toward a safe andsecure cashless society

Information securityrelated businesses

8.6

trillion＊FY2023 domestic telecommunication equipment demand (Communications and Information network Association of Japan (CIAJ)

Lifestyle and Mobility(2016 – 2017) (Ministry of Education,
Culture, Sports, Science and Technology)（STEAM＝Science, Technology,
Engineering, Art, Mathematics）

years of age
and older

5.2

Payment servicesrelated businesses

40%

and virtual reality (VR)(Ministry of Economy, Trade and Industry (METI) Study Group for
the Content Business Era Report)+3¥

Digital transformation that raises
the experiential value of “shopping”

Approximately＊2022 Japanese market for music, broadcast, publishing, game,billiontrillion

Digital marketing-related
businesses

Next-generation telecommunications-related businesses“Hard” & “soft” value generation for 5G--Sophisticating and synergizing “ICT foundation” and monozukuri foundation--Contents business-related businesses

64.0
¥25

3.8

trillion＊2022 domestic work style reform ICT market (IDC Japan)

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

US$¥

Work styles that maximize the strengths ofindividuals and raise synergies

Knowledge and Communication＊= Related markets and targets= Business commercialization themes undertaken by DNP

4.3

trillion

Environmental-related businesses
Provide value that contributes to reducing
environmental impacts and expanding
sustainability＊Business value through energy and material economic systems（ The Business & Sustainable Development Commission）

Various businesses for the realizationof a recycling-oriented society
Resources and plastics recycling that also
contribute to ecosystem conservation＊Reduce additional pollution by marine plastic litter to zero by 2050
(June 2019, G20 Osaka Summit “ Osaka Blue Ocean Vision” )Environment and Energy
A sustainable future that reduces environmental impacts andenables people worldwide to co-exist harmoniously with the earth

DNP Integrated Report 201925

Issues Driven Development: Case 1

DNP ʼs BPO Supported by
Advanced Information Security Foundations

INITIATIVES FOR VALUE CREATION

Contributing to the Innovation ofCustomer Companies by SupportingWork Style Reform and Business Reform
through Cutting-Edge Technology
Business Process Outsourcing (BPO) is where business operations are consigned to external companies,
thereby improving operations and creating value. DNP has undertaken BPO business since the 1980s,
making use of its strengths in information security, information processing and manufacturing to resolve
issues at many companies and organizations. DNP will continue supporting initiatives to generate value
at its clients through the utilization of advanced technologies such as AI and RPA*.
* Artificial Intelligence (AI) and Robotic Process Automation (RPA) are used to automate operations based on software.

Leveraging Cutting-Edge Technologies
to Resolve Business Challenges

Using Digital Networks to Improve
Quality and Productivity and Enable a BCP

DNP handles a wide range of BPO business that makes useof our advantages in sophisticated information technology.
This includes from back office operations such as theacceptance and screening of documents in such industries
as finance, manufacturing, logistics, education and social
infrastructure to front office operations to help with response
to consumers such as call centers. We analyze the businesschallenges of a client and provide consulting aimed at
resolution. We also introduce advanced technology such as
AI and RPA that enables the creation and execution ofeffective business processes.
In response to a decline in the working population, which
is becoming a major social issue in Japan, DNP is dedicatedto contributing to work style reform so that companies canconcentrate on key tasks, for example, through total BPO
services covering all business processes.

DNP connects BPO sites in Japan and overseas on a networkand creates digital workflows enabling a business continuity
plan (BCP) for when a disaster strikes as well as dispersed
operations. To give an example, in the large-scale acceptanceof applications forms, we manage and share digital data ofscanned paper forms on a server and handle operations for theforms at multiple locations, eliminating overburden at a single
site and providing for the flexible utilization of human resources.
In January 2018, we concluded a capital and business alliancewith AI inside Inc., thereby permitting data entry using opticalcharacter recognition (OCR) technology utilizing AI, aimed atincreasing the accuracy of converting handwritten characters
into digital text. In addition, we are working to improve the levelof service through such means as building a system for 24-hoursorting and screening operations for documents and handling
operations with fluctuations between busy times and off-times.

Business Network Connecting
BPO Centers in Japan and Overseas

DNP Business Commercialization Themes and Target Markets

3.3¥
trillion

Work style reform related businessWorking styles that maximize individual
strengths and heighten synergistic effects*2022 outlook of work style reform in the ICT market (IDC Japan)

1.3

Information security related business¥Information platform protected by cyber security
trillion Forecast of size of Japanʼs information security market (IDC Japan)

RISKS & OPPORTUNITIESSocial issues
DNP is tacklingand peopleʼs
expectations● Declining working population and labor shortage● Problem of overtime work
● Sophisticated security demanded for information management/

operation● Overconcentration of labor in urban centers

DNP’s BPO Business Process Outsourcing
RESOURCES & INPUTS
Reliable

DNPʼs value
creation process

System operates 24-hours a day, 365 days of the year
at 15 sites nationwide● Proven record of installation at around 2,500 companies● Advanced information security system●

Highquality●●

Design of operations by around 300 professionals
Introduction of cutting-edge technology such as AI
and RPA

Flexible response measures in line withbusiness content and volume● BCP response in the event of a disaster●

Responsive

OUTPUTS&(Products & Services)

Partners
Sapporo SC
Sendai SC
Warabi Plant

Yasuyuki Tani

Takashimadaira SC

General Manager of BPO Center
Information Innovation
Operations

Takada SC● A society in which diverse human resources can engage in

Enokicho SC

Kamiya SC

Network

Sumida SC
Nagoya SC
Namba SC

motivating work
Expected effects
and impact of
DNPʼs business

Takatsuki SC
Fukuoka SC
Kurosaki SC (October 2019~)

Nara Plant*SC = Solutions Center

26● Realization of diverse working styles not bound by time and place● Health risk reduction through reasonable work hours● Creation of a social information platform based on exceptionalreliability

OUTCOMES & IMPACTS

Ginowan SC
Hanoi (Vietnam)

DNP Integrated Report 201927

Issues Driven Development: Case 2

INITIATIVES FOR VALUE CREATION

Expansion of Sustainability by Reducing Environmental Burden

GREEN PACKAGING

DNP Business Commercialization Themes and Target Markets

Toward the Realization of a Sustainable Society
DNPʼs Environmentally Friendly Packaging

0

Amid the rising need to tackle environmental issues throughout society, there are growing calls forconsideration of the environment in the packaging people use every day as well. As part of ourefforts to realize a circulating society, DNP is offering for a series of products that are moreenvironmentally friendly, thereby reducing the burden on the environment.

RISKS & OPPORTUNITIESUS$Circular economy related business
Preservation of ecosystem andefficient resource recycling*Aiming for zero new contamination caused by marine plastic pollution by 2050
(Osaka Blue Ocean Vision shared at the G20 Osaka Summit in June 2019)

4.3
trillion

Environment related business
Provision of value through contribution to reduction inenvironmental burden and expansion of sustainability* Business value through an economic system for energy and raw materials(The Business & Sustainable Development Commission)● Response to climate change● Problem of marine plastic pollution and destruction of

the marine ecosystem

Environmentally Friendly Packaging with
Consideration of the Entire Product Life Cycle

Social issues
DNP is tacklingand peopleʼs
expectations

An example of environmentally friendly packaging can be seen in
our plant-based packaging series. The partial use of sustainable
plant-based raw materials, such as the byproduct of sugarcane
when sugar is made (molasses), helps reduce consumption of
petroleum resources. Plants can offset the CO 2 emissions
generated when packaging is incinerated after disposal, since
they absorb CO 2 via photosynthesis during the growth phase(carbon neutrality).
In addition, DNP developed flexible packaging that is made ofa single material (mono-material) in 2018 to further promote
recycling. Many conventional products are difficult to recycle
because they are made in combination of different types ofpolymers. DNP leverages its advanced converting technology to
add functions of oxygen barrier properties, heat-resisting
properties and enhanced strength in mono-materials, thus
realizing packaging that is suitable for recycling. The flexible
packaging can be coupled with our plant-based packaging series,
to provide value toward the realization of a circulating society.

● Sustainable management and effective use of natural resources● Loss of biodiversity● Further promotion of the effective use, reuse andrecycling of resources● Improvement in processing and packaging technologies tomaintain the quality of packaged objects

RESOURCES & INPUTSReduction of greenhouse gas emissions
Use of sustainable resources

DNPʼs value
creation process

Resource circulation&

OUTPUTS(Products & Services)

Realizing a Circulating Society
and Providing Three Kinds of ValueAB
Ltainable material pro
Sus
cur
em
RENE
W

Packaging Operations
Marketing Strategy
Headquarters

DNP’s recyclable packaging
Recyclable PET bottles

New recycling
technology
Creation of ecosysteme m CO2
issio
ns

RE

D UC

E

Production
Procurement

Recyclable packaging

DNP’s mono-material packaging
DNP’s easy-to-dismantle
liquid paper cartons

RE

Usage

Expected effects
and impact of
DNPʼs businessCO2sions
is
em

E
US

Make into paper

YC
REC LEUse recyclable materials

Thin-layer technology

28

cle resources
Recy● Minimizing of damage caused by climate change and impact on(Lnt

Ayumi Shibata

E

Red

uc
Life Cycle A
e
sse
ssm
e

O2
bal recyclings C CA) of gloten

Absorbs CO2

Forest-certified paper
DNP’s plant-based
packaging material Biomatech

Marine-degradable

Incineration

Biodegradable

Partners

OUTCOMES & IMPACTS

ecosystems● A society with rich and diverse peoples, biology and ecosystems● A recycling-oriented society in which all resources are recycled● Preservation of biodiversity● A society in which no user feels stress● Realization of both environmental friendliness and usability

2,500tReduction of more than 2,500t of CO 2 when compared withthe use of petroleum-derived materials based on shipmentsof DNP ʼs plant-derived packaging material Biomatech in thefiscal year ended March 31, 2019 (DNP research)

Disposalat landfill

DNP Integrated Report 201929

Issues Driven Development: Case 3

Products and Services That Enhance Peopleʼs Mobility
and the Value of Logistics

Sheet-Type Wireless EV Charging
Coil Capable of High Power
Transmission
Wireless technology enabling the wireless charging of electric vehicles (EVs) has been in
the spotlight in recent years for reducing the burden when charging, thereby supporting
eco-friendly cars. DNP has developed a coil for EV wireless charging that utilizes our
photolithography technology accumulated over many years.

Greatly Simplifying EV Charging
Process and One of Key Elements forAutonomous Driving EVs
Wireless EV charging technology is expected to become
widespread because it can greatly simplify the EV charging
process and can be very fit for autonomous driving. DNP will
try to supply the sheet-type wireless EV charging coils
mainly to automobile manufacturers and infrastructureindustries worldwide and then DNP aims to secure annual
sales of 5.0 billion yen by 2025, on the back of a projected
proliferation of EVs. DNP also seeks to further develop thecoil technology to expand its application into areas such as
charging-while-driving drones.
*1 In case of a receiver coil compliant with the J2954 WPT2/Z2SAE standard issued by SAE(Society of Automotive Engineers) International (A non-profit organization in the UnitedStates of around 127,000 technical experts in the mobility field who develop automotive
and aerospace related standards)*2 DNP research

INITIATIVES FOR VALUE CREATIONDNP Business Commercialization Themes and Target Markets

6.4¥
trillion

Next-generation mobility related businessRealize a smart mobility society with nomobility-impaired persons*Mobility as a Service (MaaS) market in Japan in 2030 (Yano Research Institute Ltd.)RISKS & OPPORTUNITIESDeveloping through the Use of
Photolithography Technology
The sheet-type coil recently developed by DNP comprises a coil
sheet and ferrite sheet, applicable for both the power supply (theGround Assembly unit) and power receiving sides (the Vehicle
Assembly unit). The coil containing the ferrite sheet has a maximum
thickness of approximately 3mm and weight of around 1kg*1.
Compared with coils containing ferrite of identical specification thatuse ordinary Litz wire measure roughly 12mm in thickness and at
least 4kg in weight*2, DNP has achieved significant size reduction.
In addition, by optimizing the coil pattern and applying
photolithography technology, DNP has developed a structure inwhich the magnetic field tends to stay within the bounds of thecoil. This reduces magnetic-field leakage which affects thehuman body and equipment such as cardiac pacemakers whencharging, thereby also enabling high power transmission.

Social issues
DNP is tacklingand peopleʼs
expectations

138.6
billion¥

Sharing economy related business
Lead social change frompossession to utilization*Japanʼs sharing economy market in FY2022 (Yano Research Institute Ltd.)● Response to climate change● Enhancement of the energy efficiency of electric vehicles● Reduction in car weight to save energy and decarbonize● Provision of more advanced sensing in order to understand therelationship between vehicle conditions and surroundings● Ensuring of advanced information security● Establishment of a social environment for the spread of

the sharing economy

DNP’s P&I (Printing & Information)
RESOURCES & INPUTS● Pouches for lithium-ion batteries that are lighter and easier toprocess than metal containers● Curved resin glass that helps reduce vehicle body weight● Optical film that suppresses light reflections and enhances safety

when driving

DNPʼs value
creation process● Various interior materials that realize a more comfortable space● Security solutions that enhance the safety of IT utilization such as

in autonomous driving● Sheet-type coils for wireless EV charging that contribute to the

spread of electric vehicles

OUTPUTS(Products & Services)● Mobility services that lead to the resolution of issues such as traffic

congestion and regional depopulation&
Partners

Masato Okabe
AB Center First Division
Mobility Development Unit

Image of wireless charging using DNP coils(The EV is charged though wireless power transfer units equipped with thin coil sheets implemented
on both the road surface and bottom of the car.)Realized Thinner and Lighter Weight
DNP-madeStandard type●

Weight: 4kg~

*DNP research●

Ferrite tile
Approx
12 mm

Litz wire30

Weight: Approx. 1kg

Expected effects
and impact of
DNPʼs businessFerrite sheet ＜ 1.0mm
Coil sheet ＜ 1.5mm● Minimal damage caused by climate change and impact on ecosystems● Alleviation of traffic congestion● Comfortable mobility● Better quality of life through effective use of traveling time
● More people can enjoy the benefits of mobility society

OUTCOMES & IMPACTS

Litz wire tray

*Compared with power receiving coil (included in the Vehicle Assembly unit) of SAE International
standard J2954 WPT2/Z2 specification

DNP Integrated Report 201931

Issues Driven Development: Case 4

TOPICS

1

Providing Value Targeting All Kinds of Living Spaces

In seeking to realize more comfortable and functional living
spaces as one of our business commercialization themes,
DNP handles a wide array of products and services that help
form different spaces that include housing, commercial
facilities, railroad vehicles, and car interior and exteriormaterials. Leveraging our advanced image processing and
1-1

Installation of a chair made with electronic paper

together with energetic creators and expresses the different
flow of time in a single space based on different patterns
found on the earth such as with living creatures, natural
resources and cultural artifacts. The exhibit showcased
DNP ʼs “ MiDCiD ” concept of recreating traditional Japanesecolors and patterns such as those found in Edo-Komon(the patterns that covered the Samurai kimonos in the Edo
period). It also makes use of electronic paper and IT torepresent the essence of patterns found in living creatures.
The exhibition was picked up by numerous media such as alocal television station and design-related media, andreceived plaudits from visitors.

“ MiDCiD ” design reinterpreting traditional Japanese patterns in a contemporary way and old-style Edo-Komon

to alter light based on conditions. The lighting is changed inreal time to a color deemed effective in stimulating
discussion or producing a calming effect by checking thefrequency of conversation, temperature, humidity and carbon
dioxide concentration.
DNP plans to provide “ next-generation stealth spaces” asa package of hardware combining building materials andsensors that can change color and sound, and software forsystem regulation and operation. The packages are aimed atapplication in such places as offices, hotels, residences,
shops, educational facilities, medical institutes and nursing
facilities. Going forward, we will develop a business that
includes consulting based on the usage history of thesestructures.

Color oflight
Information
displaysystem

Sound
NAONA

Feedback

Sensing

Feedback

Image of a “ next-generation stealth space”

TOPICS

2

DNP Multifunctional Insulation Box Wins Top Prizeat Global Environment Awards

In April 2019, DNP took home the top prize at the 28th
Global Environment Awards sponsored by the Fujisankei
Communications Group in recognition of our multifunctional
insulation box, which serves to improve transportation
efficiency and reduce environmental burden.
The insulation box employs vacuum insulation panels
using film with superior barrier features effective in blocking
oxygen, water vapor and other elements. This helps realize
outstanding insulation that surpasses conventional heatinsulating materials and makes it possible to maintaininternal temperature within a certain range for a long period
even without electricity.
In addition, DNP ʼs uniquely developed simulation software
increases the effectiveness of the insulation box whentransporting temperature-sensitive cargo for long periods by
optimizing the amount of refrigerant in accordance with
distance and content. It also helps reduce food waste when
reshipping cargo in midsummer and when transporting withnormal-temperature vehicles that don't have cold storage

functionality since it can maintain the cold chain (a logisticalmethod of transporting temperature-sensitive goods fromproducer to consumer at a low temperature).
Also, the boxes are foldable and reusable, thereby saving
space and reducing the use of materials. Meanwhile,
replacing dry ice with refrigerant contributes to a reduction
in greenhouse gas emissions. The boxes improvetransportation efficiency by enabling mixed loads of goods atordinary temperatures and cold or frozen items, and reduce
the use of disposable resources through reuse.
Moving ahead, DNP will team up with Yusen Logistics Co.,
Ltd., the general logistics operator for the NYK Group, topropose optimal logistics solutions to individual customers
and develop new transportation services. DNP will provide
the multifunctional insulation box to companies and logistics
firms for transportation of foods and beverages, medicinesand pharmaceuticals, fine chemicals, semiconductor
components and other items requiring temperature control.

patterns were processed on acrylic plates to create the conceptual space.

Developing Next-Generation Stealth Spaces Stimulating Natural Behavior

DNP released “ next-generation stealth spaces” at JAPANSHOP 2019 held at Tokyo Big Sight in March 2019.
Recent evolution in sensors enables us to grasp informationin real time on such things as indoor temperature andhumidity and carbon dioxide concentration as well as
peopleʼs movements, the content of a conversation andwhether or not communication is lively or not. DNP has
developed “ next-generation stealth spaces” that stimulate
peopleʼs natural behavior by integrating devices that produce
32

printing technologies, we are promoting the development of
products with exceptional design and functionality. We arealso working to create a framework for encouraging personalcommunication with the view that space is a medium forconveying thoughts and ideas, and to implement living spacedesigns based on Kansei (sensitivity) engineering.

First Exhibition at Milan Design Week 2019

Design that stimulates peopleʼs awareness and behavior isstarting to play an increasingly important role in our businessdevelopment. DNP ʼs building material related business got
underway in 1951, in which we have endeavored to enhancesuch functions as durability and ease of maintenance, andhave developed a number of products with design optimized
to application.
In April 2019, DNP exhibited for the first time at Milan
Design Week, the world ʼs largest design festival held every
year in Milan, Italy, in order to show our accumulated design
expertise to the global market. The concept of our display
was “ Patterns as Time.” Our installation was developed

1-2

INITIATIVES FOR VALUE CREATIONTOPICS

light and sound into the walls and ceiling, hidden from view,
and altering the color of the light and generating sound inaccordance with information on the indoor space gatheredfrom the sensors.
The DNP booth at the exhibition linked the data sensing
platform “ NAONA” developed by Murata Manufacturing Co.,
Ltd., which visualizes the status of communication in a
meeting room, and full-color LED lighting-integrated wallmaterials developed jointly by Nikken Sekkei Ltd. and DNP,
DNP Integrated Report 201933

Issues Driven Development: Case 4

TOPICS

3

INITIATIVES FOR VALUE CREATIONTOPICS

Realizing Advanced Design for Vehicle Interiors
with Next-Generation Decorative Panel

DNP provides a variety of decorative panels for automobiles
with diverse top-quality designs that are printed, for instance,with a woody grain or geometric pattern. In May 2019, wedeveloped next-generation decorative panels that integrate
optical functionality for the display, operating switch and otherareas as required into the sophisticated design of the panels
to realize a comfortable vehicle interior.
The number of displays and gauges has been increasing inrecent years as automobiles become more multi-functional.
Also, with progress in autonomous driving, we expect demand
to grow for a more comfortable space to spend time in sincepeople will be free from driving. For these reasons, there arecalls for the development of functions in interior materials that

ensure a comfortable space which the growing number ofdevices displaying information do not compromise overalldesign quality.
Only the surface design of DNP ʼs next-generation decorative
panel is visible when it isn't show any information. The display
shows up only when necessary. In addition to enabling vivid
imagery, it is also possible to use car navigation and operateswitches by assigning touch panel functionality.
DNP intends to market this new product to automobile
manufacturers worldwide as well as to the constructionindustry for housing and commercial facilities, and consumer
electronics makers, among others. DNP tries to achieve
annual sales of 5.0 billion yen by 2025.

types of tape realizes appropriate mixing and if left foraround a day at room temperature will display exceptional
practical adhesive strength. DNP aims to apply this productto such areas as mobility, construction and electronics
where needs are high for the adhesion of different materials.
We are aiming to achieve annual sales of 1.0 billion yen by
the fiscal year ending March 2022.

Features of
DNP ʼs New Adhesive Film
・ Simply sticking together the two pieces oftape coated with different substances ofsuitable amount realizes optimal bonding. The
ratio of the ingredients has been carefully
controlled to prevent errors in mixing.

Example of Usage Method
positioning and1 Decide
stick the two types of・ Since liquid adhesive is not used, there is no

Adhesivetape together

Tape Bdripping or jutting out of the liquid during
application.

Tape A・ The film is tape-shaped to minimize the riskof the materials slipping out of position, thus
raising efficiency.

Adhesive

・ Different materials can be strongly bonded

Conceptual Image of Decorative Panel

together, such as plastic, carbon fiber andmetal.

(Display showing on the front part of the driver ʼs seat)

Information
displayOFF

2 Cure(reaction at

・ The adhesive film has heat-resisting

3 Strongly bonded

・ Long-term storage of the two types of tape ispossible (approximately six months at 23 °C).

properties and gripping properties (minimal
shifting due to aging) and resistance toshearing (strong adhesive ability on bonding
surface) at levels enabling use in structures
requiring exceptional strength and durability.

5°
C or above)

Information
displayON
TOPICS

5Touching the woody grain designed panel brings up the operating screen for car navigation (left) or car audio (right).

TOPICS

4

Simple and Strong Bonding of Different Materials
Using DNP ʼs New Adhesive Film

In May 2019, DNP developed new adhesive film that canbond different materials such as metal and plastic through acuring reaction that occurs when two pieces of tape eachcoated with a different substance are joined together.
In recent times, there have been an increasing number ofexamples in which certain metal materials have been
replaced by plastic or carbon fiber, for instance, as needs
grow for a reduction in environmental burden in the34

automobile industry by reducing vehicle weight. In suchcases, it is necessary to strongly adhere different materials
together. Conventional paste-type adhesives, however, bringvarious challenges such as dripping liquid during applicationand inaccurate mixing of adhesive ingredients.
DNP ʼs new adhesive film boasts the features shown on
the next page such as minimizing burden during usage andensuring a strong bond. Simply sticking together the two

Developed Material for 5G Antennas That Does Not Hinder Screen Visibility

In order to respond to the rapid expansion of data volume
exchanged over networks, efforts are being made globally todevelop a 5G (fifth generation mobile communications
system) environment and compatible devices that cantransmit and receive large amounts of data. Since
smartphones and other 5G-compatible devices require bothadvanced sophistication and miniaturization, a key challenge
is to secure space to store an antenna for 5G in the device.
In May 2019, DNP developed a “conductive film withultrafine mesh” for use as a highly sensitive antenna forcommunication, in which metal mesh measuring one micron(one micrometer, which equals 10-6 meters) in width isshaped into film. With the product, which incorporates
photolithography technology, a strength of DNP, wires areembedded in transparent film, enabling it to function as anantenna without compromising visibility even if it is stuck on
the display screen. This eliminates the need to store theantenna inside the device and contributes to the deviceʼsenhanced functionality and miniaturization.

DNP will provide the product to smartphone manufacturers
in the 5G market, where growth is expected.

20μm

DNP Integrated Report 201935

Top Management's Dialogue
S EC TI O N 2

TOWARDSUSTAINABLE
GROWTH―DNP’S ESG INITIATIVES―
37

Dialogue: Yoshinari Kitajima, President × Minako Miyama, Corporate Officer

40

CSR Management

42

Initiatives for the Environment

44

Initiatives for Human Resources Fundamental to Value Creation

46

Corporate Governance

52

Board of Directors, Statutory Auditors and Corporate Officers

53

Stakeholder Dialogue

Focus on Further
Promoting Diversity to Create
Diverse New Value
Minako Miyama

Yoshinari Kitajima

Corporate Officer

President

DNP has been taking steps to empower women at work since the early 2000s
and accelerated the initiatives to create value that leverages diversity
by establishing the Diversity Promotion Department in June 2018.
Here, we look at DNP ʼs diversity strategy that pursues further results.

Diversity is an important theme that all
employees need to tackle.
Kitajima: We are currently making efforts to create newvalue that resolves social issues and meets peopleʼs
expectations. Society is indeed a melting pot of different
peoples and DNP ʼs products and services must be able tocater to everyone. As we work to create diverse value inbusiness, it is an essential and critical theme to reflect

diversity in management.
Miyama: That ʼs true. Enhancing diversity is a great way toincrease the kinds of value we provide, while innovation isreally important to make sure people feel that the value wegenerate is in fact “ new.” By matching and synergizing
diverse strengths, we can heighten the effects of innovation.
Kitajima: DNP is already promoting the diversification ofhuman resources. As an example, non-Japanese employees
DNP Integrated Report 201937

TOWARD SUSTAINABLE GROW TH

working at overseas sites make up around one-eighth of our
total workforce of about 40,000 employees. This enables us
to closely and accurately grasp the characteristics, issues
and needs of different parts of the world so that DNP ʼsproducts and services can provide the value to resolve
particular social issues.

Respecting one anotherʼs culture
leads to value creation.
Kitajima: The role required differs depending on career
stage or age, and life involves dealing with a variety ofsituations that include child care and nursing care. As acompany, we have to make sure our employees canmaximize their potential no matter the circumstances. We
have established the systems and support mechanisms to
make this possible and will look to further enhance themwhile keeping an eye on social trends.
In addition, each of us also needs to place an importanceon our own culture in order to properly promote diversity.
Recognizing the importance of oneʼs own culture can lead tothe realization that others also have a culture that they value.
Having a mutual respect of one another ʼs culture enables us
to connect with diverse people in a respectful way.
Miyama: It ʼs important to be interested in and understand
individual differences to raise the effectiveness of diversity.
Deepening our understanding of the diverse values aroundus can in itself lead to the creation of diverse values.
Kitajima: Rather than being resistant to things that are
different, we can increase value by respecting thesedifferences and combining them as strengths. DNP ʼsbusiness is intrinsically and richly diverse, extending wellbeyond printing on paper to include business domains that
range from smart cards and information services topackaging, decorative materials, electronics-related
products, energy and life sciences. I believe this is the resultof taking on challenges by accepting employeesʼ enthusiastic
and interesting proposals and bringing together the diverse
strengths of employees from multiple departments.

DNP has been supporting the roleof women and responding togreater diversity for 20 years.
Miyama: Our initiatives to make effective use of diversity
started around the year 2000 with efforts to promote womenin the workplace. At that time, we first expanded our training
and systems with the aim of preventing women from leaving
their jobs. We took such measures as holding seminars
concerning support for work-life balance and helping withthe career development of short-time regular employees.
Although traditionally only a few women work in the printing
industry, the ratio of women employed in the DNP Groupcurrently exceeds 40% of the total with no discernible
difference in the retention rate of females and males. The
proportion of female managers is also gradually increasing.
Kitajima: You are DNP ʼs first female Corporate Officer andthis trend of diversity in management is likely to continue. It ʼsgreat to have role models that people can aspire to.
Miyama: In 2015, DNP was selected for the Diversity
Management Selection 100 issued by the Ministry of
Economy, Trade and Industry (METI), and in 2019 we were
designated as a Semi-Nadeshiko Brand issued jointly by
METI and the Tokyo Stock Exchange for encouraging
womenʼs success in the workplace. In the Bloomberg
Gender Equality Index (GEI) for 2019, DNP was selected as
one of 14 Japanese companies, reflecting the high regardof society.
Currently, DNP is undertaking initiatives to promote
diverse work styles so that all employees, not only females,
can demonstrate their full potential. In a fact-finding survey
we conducted, it was discovered that people want to know
more about the things troubling those around them and whatsort of inconveniences they have to deal with, not just for
women, but also for persons with disabilities, senior citizens,
non-Japanese and the LGBT (Lesbian, Gay, Bisexual,
Transgender) demographics. Getting to know one anotherthrough dialogue is a definite way to achieve this.

1997

Started promoting employment offemale employees and expanded
their range of work.

2003

Made it easier for female employees
to stay on at work with support ofwork-life balance.

2009

Made active roles for women in core
positions.

2016

Business departments and Group
companies independently promote
diversity.

Womenʼs Participation Promotion Act
Linked individuality withrole in the organization.

Universal Design Declaration and started focusing on
products and services that are easy to use for more people.
In particular, we introduced a universal color design to makecolors easier for persons with an impaired sense of color torecognize, an initiative only made possible because we canutilize our expertise as a printing company. We are also
implementing Inclusive Design, where persons withdisabilities and the elderly, among others, take part from theearly stages of product design. Packaging that is easy toopen with one hand is one example of this.
Miyama: Activities encouraging diverse dialogue are also
effective, such as a sign language course that anyone cantake, discussion on career plans between a supervisor andworker and a mentoring program to nurture young
employees. Organizations that only have the same type of
persons will find it difficult to generate anything but very
similar values. I believe that diversity in human resources isessential to provide optimal value to society and people.

Kitajima: In February 2019, we established the Group
company DNP Business Partners Co., Ltd. to expand work
opportunities for persons with disabilities and further
promote the employment of diverse human resources. Basedon the philosophy of normalization, the company aims toacquire certification as a Special Subsidiary that provides anenvironment in which persons with disabilities can worksafely and with peace of mind.

Kitajima: As I said before, DNP is striving to create new valuethat resolves social issues and meets peopleʼs expectations. It
is the public who will decide whether or not our products andservices are of value. The world is full of diversity, with men
and women, LGBT, able-bodied and persons with disabilities,
from kids to adults, as well as people from different countries
and regions, to name but a few. All of these people are
valuable stakeholders of DNP, so promoting even greaterlevels of diversity is a vital management challenge necessary
to increase corporate value.

Diversity is essential
for raising corporate value.

* Please refer to pages 44-45 for “ Initiatives for Human Resources Fundamental to Value
Creation.”

Kitajima: In the development of our products and services,
we endeavor to enhance value by actively incorporating anelement of diversity. In 2008, we instituted the DNP Group38

DNP ʼs History of Promoting Diversity

2019

Expanded the scope ofdiversity-related initiatives andpromoted inclusion.

Increased corporate value.

Realized true Diversity & Inclusion.

Training to Support Career Path

Develop diverse
human resources.
(career development)

Foster a
corporate culture
Realize diverse embracing diverse
work styles.
human resources.

(work style reform)(management,
awareness-raising)

Step-up program foryoung female employees.

Program to develop personnel
to promote diversity

Career training foryoung female employees

Next-generation
female leaders training

Career development
support training

Diversity & Inclusion
promotion leaders training

Career28 Workshop
DNP Integrated Report 201939

CSR Management

TOWARD SUSTAINABLE GROW TH

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 ourmanagement 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.

40

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
grow in a sustainable manner.

Fair Operating
PracticesWe help to maintain and develop orderly, free andcompetitive markets based on laws and social
ethics and by always remaining fair and equitable.

Human Rights
and Labor

We place human dignity first and foremost andrespect diversity in the culture, nationality, creed,
race, ethnicity, language, religion, gender, gender
identity, sexual orientation, age and ways ofthinking of all persons. We accordingly respect
working styles suited to the diversity of ouremployees and make efforts to create a safe,
healthy and vibrant working environment.

Environment

To create a sustainable society with the Earthʼs
limited natural resources, we reduce environmental
impact and conserve biodiversity while ensuring
compliance with environmental laws andregulations and by recognizing our relationship withthe environment in all business activities.

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 other factors.

Product Safety
and Quality

We seek to gain the trust of society by prioritizing
the safety and quality of our products andservices 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.

Performance indicators to monitor the
progress in achieving the Vision(1) Sales of environmentally conscious products and services(DNP contributes to achieving the SDGs through all its business activities.
DNP set the above as one of the clear indicators to monitor progress.)(1) Number of meetings of the Corporate Ethics Committee(2) Bases holding Autonomous Corporate Ethics Training(1) Number of women in managerial positions(2) Ratio of employees with disabilities(3) Annual paid leave taken(4) Frequency rate of lost workday injuries* In FY2019, we will consider the establishment of a system concerning
human rights due diligence.

Targets

FY2018 results(1) Achieve sales of 600 billion yen by FY2020.

(1) 603.2 billion yen(1) Hold meeting once a month (12 times a year).
(2) Achieve 100% (covering all applicable bases).

(1) Once a month (12 times)(2) 100% (105 bases)(1) Double the number of women in managerial
positions by the end of March 2019 comparedwith the number (96) in February 2016.
(2) Achieve the ratio above 2.0% in FY2017 andabove 2.2% in FY2018 onwards.
(3) Achieve an increase over the previous fiscal year.
(4) Keep the rate below 0.2.

(1) 2.05 times the number(196)(2) 2.17%(3) 52.4% (50.8% in FY2017)(4) 0.33

For details, see page 43, "Environmental Activity Targets and Results"(1) Average score of DNP Group CSR Procurement
Guidelines survey on key suppliers(2) Percentage of overseas business locations conducting
DNP Group CSR Procurement Guidelines surveys(3) Percentage of key suppliers conforming to DNP Group Guidelines
for Procurement of Paper for Printing and Converting(1) Achieve average score of 90 points by FY2030.
(2) Achieve 100%
(covering all overseas business locations).
(3) Achieve 100% by FY2030.

(1) 85 points in Japan and
81 points overseas(2) 100%(3) 92%(1) Achieve zero accidents.
(2) Achieve 100%.

(1) Zero accidents(2) 100% (184 products)(1) Number of information security compliance assessments
conducted(2) Number of inspections and instructions on divisions
implementing priority measures for personal information
security performed by executive officers in charge(3) Participation rate of information security education and training(4) Number of security vulnerability tests for publicly open websites(1) Achieve 100% (covering all businessdepartments and group companies)(2) Achieve 100% (covering all applicable bases)(3) Achieve 100% (covering all applicable divisions)(4) Achieve 100% (covering all applicable websites)(1) 100% (85 departments
and companies)(2) 100% (63 bases)(3) 100%(Approx. 41,000 persons)(4) 100% (260 systems tested)(1) Number of external participants for DNP ʼs original future
generations development programs(2) Number of local volunteer activities held each year to
support reconstruction of disaster-stricken regions,
including Tohoku and Kumamoto(1) Achieve an accumulated total of 7,500 persons
from FY2015 to FY2019.
(2) Constantly conduct activities three times
a year until FY2019.

(1) Accumulated total:
6,435 persons(2) Three times(twice in Tohoku andonce in Kumamoto)(1) Number of serious accidents* caused by our products* Including cases where a defect in our products jeopardizes the user ʼslife, causes serious bodily harm or inflicts serious damage on the user ʼsproperty (other than the product itself)(2) Percentage of newly developed products undergoingproduct safety and risk assessment

DNP Integrated Report 201941

Initiatives for the Environment
DNP has always believed in the importance of coexistence between its business activities
and the natural environment to help realize a sustainable society, and we have set“ Environmental conservation and the realization of a sustainable society ” as one part of
our Code of Conduct. We also formulated the DNP Group Environmental Policy to clarify ouractivities and are implementing environmental activities such as the reduction ofenvironmental burden in consideration of the relationship between business activities andthe environment in addition to compliance with environmental laws and regulations.

TOWARD SUSTAINABLE GROW TH

Environmental Management Activities
DNP has established a CSR-Environment Committee chairedby the director in charge of CSR and the environment as the
structure presiding over the entire Groupʼs environmental
activities. The committee is comprised of directors andexecutive officers in charge of each area at the Head Office.
Sustainable Society

Energy/Water
Raw Materials

Most importantInterests of stakeholders andimpact on stakeholders

Issues and risks related to the foundation of
DNP ʼs corporate activities and business
commercialization themes
Revision of Japanʼs energy policy

Response to climate change(mitigation and failure to adapt)

Worsening marine pollution
and ecosystem degradation

Shift to a circular economy

Depletion of natural resources

Issues and risks
related to thefoundation of
corporate activities

Issues and risks
related to thefoundation of DNP ʼscorporate activities

Loss of biodiversity

Reinforcement of response to
climate change and natural disasters

Growing water risk

Tightening and easing of legal
and other environmental regulations

・Stricter laws and regulations worldwide

Response to
climatechangerelated to greenhouse gas (GHG) emissions

・Rise in carbon prices
・Shift to low-emission technology
・Change in consumer/market awareness・Increase in incidence and scale of abnormal

weatherEfforts
toward arecyclingoriented
society

42

・Reduce GHG emissions throughout the

supply chain・Expand use of renewable energy
・Introduce BCP measures at production
sites

・Stricter resource constraints in line withpopulation increase
・Strengthening of laws and regulations
worldwide
・Shift to a circular economy
・Change in consumer/market awareness・Issue of marine plastic

Recycling

Waste* GHG emissions reduction
target is a FY2030 target

Evaluation

Development and sales ofenvironmentally conscious
products and services

Development and sales of environmentally conscious products andservices totaling 600 billion yen

Sales of 570.8 billion yen in FY2015

Reduction of GHG
emissions

Reduction of 25% in GHG emissions by FY2030 relative to FY2015
levels (including overseas)

Emissions in FY2015: 1.201 million tons

Reduction ofenvironmental impact
incurred during transport

To reduce per-unit fuel use for transport (fuel use/amount of sales)
by 1% per annum and 10% compared with FY2010

Per unit in FY2010: 16.1 kl/billion yen

To reduce emissions of VOCs (except for methane) by 35%
compared with FY2010

Emissions in FY2010: 6,729 tons

Overseas, based on local laws and regulations, we plan to reduce
atmospheric emissions of VOCs to the greatest extent possible
through the introduction of technologies and other measures

Continue operation of VOC recovery equipment at
DNP Indonesiaʼs Karawang Plant

To reduce per-unit waste emissions (waste emissions/amount of sales)by 20% compared with FY2010 (includes overseas locations)

Per unit in FY2010: 42.4 tons/billion yen

Reduction of
Volatile Organic
Compounds (VOC)
emissions

To maintain zero emissions for the entire DNP Group

Environmental
conservation

・Develop eco-friendly products andservices that contribute to a reduction
in GHG throughout the supply chain・Use renewable energy
・Procure sustainable raw materials, etc.

Offering value to society
Environmentally conscious
products and services

Targets through FY2020

DNP response
Proactive

OUT

Topic

Reduction of water usage

Defensive

Distribution
Division
Marketing Sales
Promotion Division
UndesiredRe-usematerials

Environmental Activity Targets and Results

Degree of importance to DNP

Risks

IN

Production
Division
Research
DivisionDNP Group Environmental Management System

Reduction ofindustrial waste

ImportantIssuesidentified

Resource Circulation Decarbonization Co-existing with Nature

Air/Water/Soil

Identification of Risks
We broadly identify economic, social andenvironmental issues, analyze theirimportance based on the potential impact on
stakeholders and DNP, and then prioritize
activities and define targets (for details, seepages 16-17).
As a result of this risk assessment, we are
cognizant of the need to respond to climatechange and create a recycling-oriented
society to combat environmental relatedrisks. We are implementing focused activities
to help achieve these objectives.

In addition, Environment committees have been set up ineach business and Group company to promote environmental
activities based on the decisions of the CSR-Environment
Committee and the attributes of the business domains.

Office environment
Evaluation criteria

FY2018 Results

Sales of 603.2 billion yen in FY2018
Emissions in FY2018: 0.961 million tons

Per unit in FY2018: 14.9 kl/billion yen
Emissions in FY2018: 4,040 tons

Per unit in FY2018: 36.9 tons/billion yen
Landfill waste rate in FY2015: 0.06%
Landfill waste rate in FY2018: 0.04%

5.7% increase
from FY2015◎

20.0% decrease
from FY2015◎

7.8% decrease
from FY2010△

40.0% decrease
from FY2010◎◯

13% decrease
from FY2010△

Maintained zero
emissions◯

43% decrease
from FY2010◎

To reduce per-unit water use by 25% compared with FY2010(includes overseas locations)

Per unit in FY2010: 10.8 m³/million yen

To keep the maximum concentration of air emissions subject toemissions regulations at 70% of the required standard or lessTo keep the maximum concentration of water emissions subject towastewater regulations at 70% of the required standard or lessTo keep the maximum concentration of odors at our site perimetersat 70% of the required standard or lessTo keep the maximum level of noise at our site perimeters at 70% of
the required standard or lessTo keep the maximum level of vibration at our site perimeters at
70% of the required standard or lessTo increase the rate of the fractional recovery of waste paper to
70% of that for general waste

99% achievement rate of targets for FY2018 (voluntary target)◯

98% achievement rate of targets for FY2018 (voluntary target)◯

99% achievement rate of targets for FY2018 (voluntary target)◯

98% achievement rate of targets for FY2018 (voluntary target)◯

100% achievement rate of targets for FY2018 (voluntary target)◯

81.8% recovery of waste paper in FY2018◯

Per unit in FY2018: 6.2 m³/million yen◎：Target exceeded by a wide margin ○：Target achieved or making steady progress toward target△：Making active efforts but target not achieved ×：Efforts insufficient・Tie-up with companies, develop

・Reduce waste emissions
・Use recyclable resources

technology and participate ingovernment-industry collaborations
and international initiatives aimed atplastic recycling
・Create a system for the use ofrecyclable resources

GHG Emissions Reduction Target of the DNP Group Recognized by the Science Based Targets (SBT) Initiative
DNP acquired approval from the international Science Based Targets (SBT) initiative in July 2018, recognizing the aforementioned
GHG emissions reduction target as “ science-based ” in helping to achieve the goal of the Paris Agreement, which is to keep global
warming below two degrees Celsius. Going forward, DNP will continue to augment its GHG emissions reduction activities by savingenergy and introducing energy-saving facilities. Dai Nippon Printing commits to reduce Scope 1 and 2 GHG emissions 25% by
FY2030 from a FY2015 base-year. The company also commits to engage with key suppliers representing 90% of purchase value toensure these will have SBTs in place by FY2025.
DNP Integrated Report 201943

Initiatives for Human Resources
Fundamental to Value Creation
DNP is making efforts to support the active role of employees as irreplaceable assetsthat have helped us achieve innovation since our earliest days. We respect individual
differences such as nationality, religious values, culture, background, gender, gender
identity, sexual orientation, presence or absence of disability, age and experience,and combine these differences as strengths to create new value.

Personnel and Labor Related Measures
Reform of Personnel Systems
In April 2019, DNP undertook fundamental reform of its
personnel system aimed at supporting employees who weview as the leaders of value creation. Through the reform,
we will design or rebuild various systems related torecruitment, development and promotion of excellent humanresources in order to optimize and maximize our humancapital while remaining aware of overall trends in society.
〈Features of the Reform〉

As a first step, we carried out a system reform mainly
targeting young employees and people with varying careers
both within and outside the Group.
1

Employment-related systems to proactively
incorporate outside perspectives
Introduction of fixed-term employment
Establishment of return-to-work system● Starting to permit certain side jobs or dual employment●●

2

Revising promotion-related systems forthe creation of new value
Drastic increase in young employeesʼ bonus and wage levels● Establishment of an ICT professional system● Rebuilding wage and promotion systems by job type and region● Revision to a personnel evaluation system and promotion of
TAIWA -based human resources development management●

3

Promoting and supporting flexible work styles for
effective time and space utilization●●

Introduction of telecommuting
Promotion of work style reform

For detailSee pages 15-16, the “ Human Rights and Labor ” section of
the DNP Group CSR Report 2019.

Promoting Diversity(Employment of Persons with Disabilities)

At DNP, respective business divisions and Group companies
have worked individually to recruit and retain persons withdisabilities and support their active roles. With an eye tofurther facilitating their active participation and promoting
employment of diverse human resources, we established
DNP Business Partners Co., Ltd., a wholly owned subsidiary,
on February 1, 2019.
Going ahead, in addition to recruitment by individual
business divisions and Group
companies, we intend to create
opportunities for active
participation by many more
persons with disabilities bypromoting related cross-sectional
operations within the Group as abusiness of the new company.
For detail

Ensuring Occupational
Health and Safety
DNP has promoted Group-wide safety and health activities
under the policy that safety takes precedence overeverything else. Ensuring the safety of manufacturing
sites, in particular, requires
an overarching approachencompassing all businessactivities from sales and planningto general affairs and employee
relations. Under this belief andtoward the realization of a safeand healthy workplace culture, we
formulated the DNP Group Safety
and Health Charter in April 2019.
In concrete terms, we formulatedseven items to be addressed by
all employees under the guidanceof the president.
For detail44

See page 18, the “ Human Rights and Labor ” section of
the DNP Group CSR Report 2019.

See page 19, the “ Human Rights and Labor ” section of
the DNP Group CSR Report 2019.

TOWARD SUSTAINABLE GROW TH

Human Resources Development
Promoting Diversity(Career Training for Female Employees)

DNP formulated an action plan
based on the Womenʼs Participation
Promotion Act, creating a framework
and providing systematic training toincrease the number of actively
engaged female employees at each Female participant (left) receiving
advice from an executive-level
job level and continuously nurture
females who will assume leadership employee during trainingroles and take part in organizational decision-making.
〈 Action Plan〉
First phase (April 2016 to March 2019) target:
Achieved (the number of women in managerial positions)
Second phase (April 2019 to March 2022) targets:
1. Achieve the ratio of women in managerial positions(section chief or above) of 7.0%.
2. Double the number of women in managerial positions andleader-level positions compared with the number at the end of
February 2016 (from 430 to 860).
For detail

Employee Volunteer Program
DNP believes thatparticipating as volunteers
in social contribution
activities provides each
employee with theopportunity to gain a deeper
insight into social issues
who volunteered in recovery efforts
and serves to foster a broad Employees
following the Great East Japan Earthquake
outlook and diverse values.
In FY2018, 354 DNP Group employees took part in various
volunteer programs, thereby heightening sensitivity to social
issues.
〈Examples of volunteer programs participated in FY2018〉
Workshop for developing the next generation (46 employees)
Local disaster relief support (62 employees)
Donation of translated picture books (136 employees), etc.
For detailSee pages 35-41, the “ Corporate Citizenship” section of
the DNP Group CSR Report 2019.

See page 17, the “ Human Rights and Labor ” section of
the DNP Group CSR Report 2019.

Response to Risk (Employee Education)
Fair Operating Practices

Responsible Procurement

It is our belief that in carrying out business activities, weneed to do more than just ensuring DNP ʼs and its employeesʼ
compliance with laws and regulations but always remain fairand equitable, acting under high ethical standards that
respond to the expectations of society. To achieve this, DNP
provided training and educational programs for employees
on compliance in such areas as bribery prevention andresponse to antisocial forces to ensure that all businessactivities are carried out fairly.

With advancing globalization, the supply chain has become
increasingly complex, prompting greater demand oncompanies to respond to risks associated with such areas as
human rights, labor, theenvironment, pollution andcorruption. In December
2018, DNP conducted aninternal study session on CSR
procurement for managers ofdivisions in charge of placing
Approximately 220 employees fromorders for subcontracting inbusiness divisions and Group
each business division andcompanies nationwide took part in the
study session.
Group company in Japan.

Autonomous corporate ethics training:
Implementation rate: 100% (105 bases) /FY2018
e-learning (bribery prevention):
Number of employees who took lessons: 18,028 /FY2018
For detailSee pages 11-13, the “ Fair Operating Practices” section of
the DNP Group CSR Report 2019.

For detailSee pages 23-26, the “ Responsible Procurement ” section of
the DNP Group CSR Report 2019.

Product Safety and Quality

Information Security

DNP recognizes that placing safety and quality first andforemost is a responsibility of a company providing products
and services to society. We are working to enhance e-learningand training sessions at the divisional level and across theorganization in order to comply with the standards, laws andregulations required of our products and services; ensure thatthe level of quality and safety exceeds the needs andexpectations of customer companies and consumers; andfulfill our social responsibility as a company.

DNP implements physical and technical measures internally toensure cyber security, an area that has become increasingly
important in recent years. We are also combatting growing
cyber security risks by strengthening organizational measuresand personnel measures.

For detail

Information security education and training:
Participation rate: 100% (approx. 41,000 employees) /FY2018
For detailSee pages 30-34, the “ Information Security ” section of
the DNP Group CSR Report 2019.

See pages 27-29, the “ Product Safety and Quality ” section of
the DNP Group CSR Report 2019.

DNP Integrated Report 201945

Corporate Governance

TOWARD SUSTAINABLE GROW TH

DNP regards enhancement of corporate governance as a top management priority in order
to contribute to sustainable development of society, increase enterprise value and win thetrust of our various stakeholders. The Company endeavors to establish and operate systems
that enable proper managerial decision-making, prompt and appropriate business execution
based on these decisions, and supervision and auditing of processes of the proper
managerial decision-making and prompt and appropriate business execution.

The Specific Initiatives for Enhancement ofCorporate Governance

Strategic Shareholdings

453

DNP examines strategic shareholdings, based on businessstatus between the Company and each company issuingsuch shares, trends in operating performance of suchcompany, etc., and regularly verifies the significance andpurpose of such shareholdings. Therefore, the Company soldpart of its strategic shareholding shares in the fiscal year
ended March 2019 and enhanced asset efficiency.

400

Increase in the Number of Outside Directors

FemaleCorporate
Officer

persons

personStatutory Auditors
5 persons

Corporate Officers
28 persons

OutsideDirectors

To further enhance the transparency and supervisory
function, the Company at the General Meeting of
Shareholders on June 2019 approved to propose theincrease of the number of outside directors from two (2) tothree (3) at this General Meeting of Shareholders.

33persons
Directors
9 personsFrom rightOutside Director

Tadao Tsukada
Outside Director

331

318

stocksstocks2017.32018.32019.3100
02003.32008.3

Evaluation of the Effectiveness of
the Overall Board of Directors

Though the way a person may gain control of the Company
should ultimately rest on the will of the shareholders as awhole, among those large-scale purchases or offers forpurchase of the Company ʼs shares, etc., there may becases in which the common interests of shareholders are
harmed. Therefore, the Company introduced Takeover
Defense Measures in 2007. However, the Company
determined that further enhancing corporate governanceand devoting greater efforts to steadily implementing our
medium- to long-term growth strategies will help enhance
corporate value and thereby enable us to further secureand improve common interests with shareholders over the
medium to long term. Accordingly, the Company resolved
at the meeting of the Board of Directors to discontinue the
Takeover Defense Measures, the effective period of which
expires at the General Meeting of Shareholders.

1348

stocks200

Discontinuance of Takeover Defense Measures

OutsideStatutory
Auditors

403

stocks300

Members of Directors and Statutory Auditors(As of June 27, 2019)

stocks500

DNP took an independent third party ʼs view into the annual
process of analyzing and evaluating the effectiveness of theBoard of Directors. The Board of Directors is aware ofobjective results of the analysis through such process andendeavors to enhance effectiveness of the Board of Directors.
Regarding the fiscal year ended March 2019, theCompany conducted interviews with all outside directors
and outside statutory auditors through an independent
third party in April 2019, and at the meeting of the Boardof Directors held in May 2019, the Board of Directors
received the results of the analysis. The Board of Directors
reconfirmed that it would pursue further improvement of
the effectiveness of the overall Board of Directors andexamine the status of improvement based on the previous
results of the evaluation.

Tsukasa Miyajima
Outside Director

Ryuichi Tomizawa

Corporate Governance Structure

Outside Statutory Auditor

Kuniaki Nomura

General Meeting of Shareholders

Outside Statutory Auditor

Makoto Matsuura

Outside Standing Statutory Auditor

Board of Directors

Audit

Kazuhisa Morigayama

Transition in Corporate GovernanceManagement Committee

Executive Directors

〜2015

2004

2016 〜

2019

2018

Reporting46

Member of Board of Directors

Board of Directors●

Shortened term of the Director
to 1 year (2007)

OutsideDirector
1 person

2004

OutsideDirector
1 person

2010

OutsideDirectors
2 persons

2014

Introduced the evaluation of
the effectiveness of the overall
Board of Directors (2016)
OutsideDirectors
2 persons2016

OutsideDirectors
2 persons

2018●

Discontinued thetakeover defense
measures (2019)
OutsideDirectors
3 persons2019.6

ReportingOpen Door Room

Audit

DivisionsGroup companies(Autonomous implementation,
inspection, review, improvement)

Check

Information Disclosure Committee
CSR & Environmental Committee
Information Security Committee
Quality Assurance & Product Safety Committee

Audit
Guidance

Legal and other main divisions(CSR & Environment Department, Personnel & Employee
Relations Division, R&D and Engineering Management Division,
Finance & Accounting Division, Strategic Business Planning &Development Division, Intellectual Property Division, Corporate
Communication Division, Legal Affairs Department, etc.)

BCM Promotion Committee

Guidance
Training

Audit
ReportingAssistance

Audit Unit●

Corporate Officers
in charge

Auditing Department

Established advisorycommittee (2015)(Oversight of internal controls)●

Head OfficeStarted selection ofoutside directors (2002)

Operating Units●

Accounting Auditors

Corporate Ethics Committee

Board of Statutory Auditors

Past

Audit

Advisory Committee

Central Disaster Prevention Council
Audit

Directors
Directors
Directors(exc. Outside Director) (exc. Outside Director) (exc. Outside Director)
34 persons
19 persons
16 persons

Directors(exc. Outside Director)
10 persons

Directors(exc. Outside Director)
9 persons

Directors(exc. Outside Director)
6 persons

Guidance
Reporting
Coordination

DNP Integrated Report 201947

Corporate Governance

TOWARD SUSTAINABLE GROW TH

Compensation paid to directors and statutory auditors(1) Matters concerning policies regarding the amounts
and calculation methods for determining compensation
for directors and statutory auditors
Compensation for directors is calculated within thecompensation amount limit approved at the General
Meeting of Shareholders. The date for resolution ofcompensation for directors at the General Meeting of
Shareholders was June 29, 2016 and the resolution
prescribes that “ Compensation for directors shall be within
an annual amount of 1.4 billion yen (compensation foroutside directors shall be within an annual amount of 80
million yen),” with 12 directors receiving compensation inaccordance with this prescribed resolution.
Executive directorsʼ compensation consists of fixedcompensation and performance-based compensation. Fixedcompensation is basically based on position and isdetermined 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.
Additionally, to ensure this remuneration system is truly
linked to medium- to long-term corporate growth and toshareholder value improvement, a portion of fixed
remuneration for executive directors is contributed to theCompany ʼs directorsʼ shareholding association every monthfor the purchase of treasury stock and these shares shall beheld for the duration of the term of office.
Regarding outside directors, from the perspective of
maintaining their independence, no performance-based
compensation shall be provided and only fixedcompensation shall be provided.

Compensation Paid to Accounting Auditors

In determining directorsʼ compensation, the Advisory
Committee with membership consisting of outside directors(two outside directors and one outside statutory auditor) withindependence shall be convened. This shall then be reviewed
and discussed by the Management Committee based on theadvice and suggestions of the Advisory Committee andsubsequently deliberated and decided on by the Board of
Directors.
The Board of Directors possesses the authority todetermine policies regarding the amount of compensation
for DNP ʼs directors and the calculation method and thecontent of this authority and scope of discretion shall be fordeliberating on and determining fixed compensation andperformance-based compensation. Moreover, the Board of
Directors can entrust the President with determining theamount of compensation for each director.
The indicator for performance-based compensation is
consolidated operating income. This indicator was selected
because it clearly reflects consolidated business results forthe fiscal year in performance-based compensation.
The target for the indicator for performance-based
compensation in the fiscal year was 47.0 billion yen and theactual result was 49.8 billion yen.
The date for resolution of compensation for statutory
auditors at the General Meeting of Shareholders was June
28, 2007 and the resolution prescribes that “ Compensation
for statutory auditors shall be within an annual amount of
180 million yen,” with five statutory auditors receiving
compensation in accordance with this prescribed resolution.
Compensation for statutory auditors is calculated within thecompensation amount limit approved at the General Meetingof Shareholders and compensation for statutory auditors isdetermined based on discussions by the statutory auditors.

(2) Total compensation paid by category of director/statutory auditor, total compensation bytype and the number of directors and statutory auditors covered
Category of director/
statutory auditor

Total compensation(¥ million)

Fixed compensation

Performance-based compensation

Number of directors
and statutory
auditors covered

Directors (excluding outside directors)

1,000

824

176

11

Statutory auditors (excluding outside auditors)

62

62

−

2

Outside directors and auditors

118

Total compensation by type (¥ million)

−

118

5

Notes:
1. Amounts of performance-based compensation are provisions for bonuses for directors and statutory auditors for the fiscal year ended March 2019.
2. There were nine internal directors, two internal statutory auditors and five outside directors as of the end of the fiscal year ended March 2019.

Director typeCompany

Yoshitoshi Kitajima

340

Director

Yoshinari Kitajima

149

Director

Name

Performance-based
compensation

Dai Nippon Printing Co., Ltd.

289

51

Dai Nippon Printing Co., Ltd.

122

27

Koichi Takanami

130

Director

Dai Nippon Printing Co., Ltd.

107

23

Masayoshi Yamada

130

Director

Dai Nippon Printing Co., Ltd.

107

23

Notes:
1. Total compensation is shown only for those with compensation of at least 100 million yen.
2. Amounts of performance-based compensation are the amounts expected to be paid as bonuses for the fiscal year ended March 2019.

48

Total compensation by type (¥ million)
Fixed compensation(¥ million)

Fiscal year ended March 31, 2018
Category

Fiscal year ended March 31, 2019

Compensation for audit
certification

Compensation forother services

Compensation for audit
certification

Compensation forother services

Dai Nippon Printing Co., Ltd.

96

−

96

−

Consolidated subsidiaries

122

−

126

−

Total

218

−

222

−

(¥ million)(¥ million)(2) Other material compensation details
None(3) Compensation paid to accounting auditors for services
other than auditing work provided to the submitting company
None(4) Determination of compensation for audit services
DNP ʼs compensation for auditing services is determinedbased on a variety of factors, including the number of
expected days for the audit and the company size.

(¥ million)(¥ million)(5) Reason Board of Statutory Auditors consented tocompensation for the accounting auditor
The Company ʼs Board of Statutory Auditors considers
such areas as details of the accounting auditor ʼs audit
plan, the state of job execution in the previous fiscal year,
and the calculation basis of estimates of compensation byobtaining necessary materials from and listening toreports from directors, relevant internal departments andaccounting auditors. As a result, the Board of Statutory
Auditors consented with the amount of compensation for
the accounting auditor submitted by the Company.

Stockholdings(1) Basis of classification of investment securities
and rationale
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 theCompany are for the purpose of strengthening
relationships with customers in implementing sales
strategies and strengthening collaborative relationships
with partners for the co-development of new technologies
and new products and these are classified as stocks held
for reasons other than for pure investment purposes.

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

Total amounts recorded onbalance sheets (¥ million)

Non-listed stocks

114

19,035

Stocks other than
non-listed stocks

204

315,218(Stocks for which number of shares increased in the fiscal
year ended March 31, 2019)
Number ofcompanies

Total amount ofacquisition cost
pertaining to theincrease in numberof shares (¥ million)

Reason for increasein number of shares

Non-listed
stocks

91,167

For strengthening ourbusiness alliance

Stocks otherthan non-listed
stocks11

19

For enhancing ourbusiness relationship(2) Stocks held for reasons other than forpure investment purposes
1.Stockholding policy, method for validating rationale forstockholdings and details of validation at Board of Directors
concerning the propriety of individual stockholdings(3) Company directors and total compensation
Total
compensation(1) Compensation paid to accounting auditors

The Company specifically closely examines individual stocks
based on trends in the status of business transactions withthe company issuing the stock, trends in business results ofthat company, the Company ʼs own business conditions andmedium- to long-term economic rationality and future
prospects, and the Company periodically verifies thesignificance and purpose of holding a stock. As a result, theCompany sells stocks it determines have diminishedsignificance. In the fiscal year ended March 31, 2019, thenumber of individual stocks held by the Company decreased
by 36 stocks as listed on the right.

(Stocks)(Stocks for which the number of shares decreased in thefiscal year ended March 31, 2019)
Number ofcompanies(Stocks)

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

Non-listed stocks

3

29

Stocks other than
non-listed stocks

33

26,194DNP Integrated Report 201949

Corporate Governance

TOWARD SUSTAINABLE GROW TH

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
Stocks held for reasons other than pure investment purposes

Company nameFiscal year ended
March 31, 2019
Number of shares
Amount recordedon balance sheet(¥ million)

Recruit Holdings Co., Ltd.
The Dai-ichi Life
Insurance Co., Ltd.
Ezaki Glico Co., Ltd.

Lion Corporation
Taisho Pharmaceutical
Holdings Co., Ltd.
Meiji Holdings Co., Ltd.
Aica Kogyo Co., Ltd.
Mizuho Financial Group, Inc.
FUJIFILM Holdings
Corporation
Toyo Suisan Kaisha, Ltd.
Hakuhodo DY Holdings Inc.
Kobayashi PharmaceuticalCo., Ltd.
YAKULT HONSHA CO., LTD..
YAMATO HOLDINGS CO., LTD.
Asahi Group Holdings, Ltd.
Dexerials Corporation
Kikkoman Corporation
MORINAGA & CO., LTD.
Sapporo Holdings Limited
TAKARA HOLDINGS INC.

50

Fiscal year ended
March 31, 2018
Number of shares
Amount recordedon balance sheet(¥ million)

58,100,000

58,100,000

183,654

153,645

6,606,600

6,606,600

10,16012,833

1,616,286

1,615,709

9,406

8,999

3,140,665

3,140,665

7,317

6,730

692,700

692,700

7,307

7,245

564,400

564,400

5,073

4,571

1,293,743

1,293,743

4,773

5,097

27,134,319

27,134,319

4,648

5,193

685,965

685,965

3,453

2,911

794,980

794,980

3,350

3,279

1,720,000

1,720,000

3,058

2,516

316,915

316,182

2,959

2,428

350,500

701,000

2,712

5,516

830,300

1,660,600

2,373

4,431

480,029

960,029

2,366

5,440

3,125,000

3,125,000

2,293

3,453

350,940

350,940

1,905

1,502

393,000

593,000

1,888

2,778

759,277

759,277

1,835

2,353

1,200,000

1,200,000

1,570

1,417

Company nameCompanyʼsownershipof DNP
shares(Y/N)(¥ million)

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

S&B FOODS INC.

Y

We hold the company ʼs 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.

Mitsubishi Chemical Holdings
Corporation

Y

We hold the company ʼs 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.

HOUSE FOODS GROUP INC.

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, 2019, the numberof shares increased because of the enhancement of our business relationship.

Mitsubishi UFJ Financial
Group, Inc.
Oji Holdings Corporation

Y

We hold the company ʼs 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.
We hold the company ʼs 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.

Gakken Holdings Co., Ltd.

We hold the company ʼs 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.

We hold the company ʼs 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.

Ajinomoto Co., Inc.
Unicharm Corporation

Y

We hold the company ʼs 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 company ʼs 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 company ʼs 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 company ʼs 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, 2019, the numberof shares increased because of the enhancement of our business relationship.

Y

We hold the company ʼs 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 company ʼs 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
Y
Y

N

Fiscal year ended
March 31, 2019
Number of shares
Amount recordedon balance sheet

We hold the company ʼs 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 company ʼs 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.

Y

We hold the company ʼs 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 company ʼs 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 company ʼs 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 company ʼs 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.

TOKYO BROADCASTINGSYSTEM HOLDINGS, INC.

344,400

Fiscal year ended
March 31, 2018
Number of shares
Amount recordedon balance sheet(¥ million)

172,200

1,434

1,990

1,799,790

1,799,790

1,402

1,854

309,297309,297

1,376

1,093

2,399,760

2,399,760

1,319

1,672

1,840,800

1,840,800

1,264

1,259

236,875

236,875

1,217

1,135

1,040,000

1,040,000

1,129

1,207

630,931630,931

1,116

1,214

290,700

290,700

1,064

880

518,064

518,064

1,049

1,169

Companyʼsownershipof DNP
shares(Y/N)

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

We hold the company ʼs shares aiming to enhance our business relationship. 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. In the fiscal year ended March
31, 2019, the number of shares increased because of a stock split.

Y

We hold the company ʼs 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.

Y

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

Y

We hold the company ʼs 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 company ʼs 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.

Y

We hold the company ʼs 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 company ʼs 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 company ʼs 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 company ʼs 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 company ʼs 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.

Notes:
1. Specified stocks 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 periodicallyverified the significance 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 economical rationality and the prospects.
3. In the company ʼs 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. 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, 2019
Number of shares
Amount recordedon balance sheet

Fiscal year ended
March 31, 2018
Number of shares
Amount recordedon balance sheet

7,722,000

3,861,000

26,10021,5824,030,000

4,030,000

7,826

9,353

2,284,000

2,284,000

3,788

3,686

1,000,000

1,000,000

2,745

3,066

500,000

500,000

654

590(¥ million)

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

(¥ million)

Companyʼsownershipof DNP
shares(Y/N)

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

We hold voting instruction rights for shares in retirement benefit trusts. In thefiscal year ended March 31, 2019, the number of shares increased because of astock split.

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.

Notes:
1. Specified stocks 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 company ʼs 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) Stocks held for pure investment purposes
None
DNP Integrated Report 201951

Board of Directors,
Statutory Auditors andCorporate Officers

Stakeholder
Dialogue
In June 2019, DNP held a stakeholder dialogue with CSR
Review Forum-Japan.
DNP has continuously held stakeholder dialogues withexternal stakeholders since 2015 with the aim of raising
shareholder value by communicating DNP ʼs thinking andinitiatives to stakeholders while gathering information onsocial trends and expectations of DNP.
The recent dialogue was based on the theme “ How will
DNP create value in five years, 10 years and beyond? ” There(As of June 27, 2019)

TOWARD SUSTAINABLE GROW TH

was a lively exchange of opinions about this theme withreviewers from a variety of standpoints regarding 1) How
will DNP solve social issues?; 2) What impact is thetransition to a new management structure having on
corporate culture?; and 3) Communication withstakeholders. We intend to reflect these opinions andexpectations in our future business activities and report onthese in our Integrated Report.

Participants
CSR Review Forum-Japan＜Reviewers＞

Tomohiko Yamaguchi,
Joint Representative,
CSR Review Forum-JapanLi Yanyan,
Professor, Komazawa University,
Faculty of Letters,
Department of Sociology＜Guest Reviewer＞

Masahiko Wada

Yoshinari Kitajima

Chairman

Director

Yoshitoshi Kitajima

Tadao Tsukada＊ 1

President

Yoshinari Kitajima

Yoshitoshi Kitajima

Tetsuji Morino

Senior Executive
Corporate Officers

SeniorCorporate Officers

Corporate
Officers

Director

Sakae Hikita

Toshiki Sugimoto

Kazuhiko Takada

Tsukasa Miyajima＊ 1

Masato Koike

Naohiko Sugimoto

Ryota Chiba

Director

Masato Yamaguchi

Kiyotaka Nakagawa

Souichiro Nishitani

Senior Managing Director

Ryuichi Tomizawa＊ 1

Motoharu Kitajima

Daiji Suzuki

Yoshiki Numano

Tetsuji Morino

Standing Statutory Auditor

Takashi Saito

Nobuyuki Asaba

Osamu Nakamura

Senior Managing Director

Naoki Hoshino

Ryuji Minemura

Mitsuru Tsuchiya

Kazuhisa Kobayashi

Masahiko Wada

Standing Statutory Auditor

Morihiro Muramoto

Hirofumi Hashimoto

Toru Miyake

Kazuhiko Sugita

Mitsuru Iida

Masafumi Kuroyanagi

Minako Miyama

Toshio SanoManaging Director

Standing Statutory Auditor

Satoru Inoue

Kazuhisa Morigayama

Takahito Kanazawa

Managing Director

Statutory Auditor

Go Miyazaki

Kenji Miya

Makoto Matsuura＊2＊2

Statutory Auditor

Kuniaki Nomura＊ 2

Naohiro Nishizawa

Minoru Matsubara,
Chief Manager,
Asset Management Division,
Responsible Investment Group,
Resona Bank
Hiroki Sawashima
Senior Stewardship Officer,
Stewardship Development Department,
Sumitomo Mitsui Trust
Asset Management Co., Ltd.
Arisa Kishigami,
Sustainability Specialist,
Head of ESG, En-CycleS

DNP
Senior Corporate Officer
Hirofumi Hashimoto(In charge of Business
Promotion Division)【Main opinions and expectations】●

How will DNP solve social issues?

・ I would like to see DNP first of all closely consider what is your own core upon defining social

issues that must be addressed.

・ Independent actions by each person are extremely important after identifying social issues andlinking these to businesses. On the other hand, company systems and structures that encourage
and evaluate autonomy are also essential.

・ Frameworks that evaluate both sides (business and personnel aspects) of the degree ofcontributions to profitability results and solving social issues are also needed in the same manner.

●

What impact is the transition to a new management structure having on corporate culture?

・ For the recent dialogue, every person expressed their thoughts as they wished and I truly sensed

there is free and open communication inside the company since adopting the new structure.

・ I could feel the determination to transform the company encompassing initiatives and new

systems for personnel and I have expectations for the future.

●

Communication with stakeholders

・ DNP ʼs communication method is superficial like that of an honor student in areas such asarranging and collecting information and direct self-expression. However, as a company thatmakes its living from communication, I would like to see DNP break away from this type ofsuperficial communication.

・ There is room for devising a more-creative means for communication such as for explaining how

the long-term sustainability of business and ESG are interconnected.

Senior Corporate Officer
Kazuhiko Sugita(Corporate Communications Division,
CSR/Environment Department)
Corporate Officer
Yoshiki Numano(General Manager ofInformation Innovation Operations)
Corporate Officer(General Manager of Purchasing Division)
Toru Miyake
Corporate Officer
General Manager ofHigh-performance Materials Operations
Mitsuru Iida
Corporate Officer(In charge of Diversity Promotion Department,
Recruiting and Training Department )Minako Miyama＊ 1 Outside directors＊ 2 Outside statutory auditors

52

DNP Integrated Report 201953

Summary of Financial Results
Dai Nippon Printing Co., Ltd. and Consolidated Subsidiaries
Years ended March 31

2019

2018

2017

U.S.dollars inthousands except per
share amounts

Statements of Operations (¥ million)
Net sales($ thousand)¥Operating income
Ordinary income
Income (loss) before income taxes
Net income (loss) attributable to parent company shareholders

1,401,506 ¥
49,89858,259(18,685 )(35,669 )

1,412,252 ¥
46,37250,97145,39627,501

1,410,173 $ 12,626,180
31,411
449,532
36,740524,856
39,831(168,333 )
25,226(321,343 )Balance Sheets (¥ million)
Total net assets

BUSINESSRESULTS（FINANCIAL AND NON-FINANCIAL
INFORMATION）
Summary of Financial Results

56

DNPʼs Business Portfolio

58

Our Products and Services

60

Business Strategies and Business Overview

66

Financial and Non-financial Data

69

Management ʼs Discussion and Analysis

76

Selected Financial Data (unaudited)

78

Consolidated Financial Statements

101

Independent Auditorʼs Report–0.8 %
7.6 %
14.3 %––––($ thousand)¥

1,046,622
166,350
996,162
1,775,023¥

1,102,551 ¥
170,105
1,053,600
1,794,764

1,081,286 $ 9,429,027
169,135
1,498,649
1,033,864
8,974,432
1,741,904
15,991,198–5.1 %–2.2 %–5.5 %–1.1 %¥

68,972 ¥(146,909 )(32,197 )(77,937 )48,457 ¥23,074(42,771 )
71,531

71,945 $621,369
14,012(1,323,505 )(45,223 )(290,063 )
85,957(702,136 )42.3 %––––––¥(118.22 ) ¥3,300.52
64

90.77 ¥
3,493.79
48

81.57 $
3,361.10
32

1.07
29.73
0.58

3.56
3.03
(2.54 )

3.28
7.70
1.95

2.23
7.34
1.79

––
––
––

0.28
–4.67
–4.49

(3.48 )
(2.00 )
56.12

2.63
1.55
58.70

2.46
1.46
59.35

––
––
––

–6.12
–3.55
–2.6

(22.39 )
0.80
16.07
34.12
2.42

24.22
0.63
5.30
7.48
2.18

29.43
0.71
6.69
8.52
2.67

––
––
––
––
––

––
––
––
––
0.23

––
––
––

14,99870.50
124.8

14,999
78.50
137.6

––
––
––

––
––
––

AA–
24.85

AA–
24.58

AA–
23.91

––
––

––
––

Interest-bearing debt
Stockholders' equity
Total assets
Cash Flow Statements (¥ million)
Cash flow from operating activities
Cash flow from investing activities
Cash flow from financing activities
Free cash flow*1
Per Share Data (¥)*2, 3
Net income (loss) - primary
Net assets
Cash dividend

55

Change2019 2019/2018($)–––5.5 %––As a Percentage of Net Sales (%)
Operating income
EBITDA margin
Net income (loss)
Financial Ratios
ROE (%)ROA (%)
Equity ratio (%)
Valuations (against share price on March 31)
PER (times)
PBR (times)
EV/EBITDA (times)
PCFR (times)
Dividend yield (%)
Returns to shareholders
Values of shares repurchased (¥ million)
Dividend payout ratio (%)
Total return ratio (%)
OthersLong-term credit rating (R&I)
Foreign ownership (%)

U.S. dollar amounts have been translated from yen, for convenience only, at the rate of ¥111=U.S.$1, the approximate Tokyo foreign exchange market rate as of March 31, 2019.
*1. Free cash flow = net cash from operating activities + net cash from investing activities*2. DNP implemented a share consolidation in which two shares of common stock were consolidated into one share effective October 1, 2017. Accordingly, DNP has estimated net income per share anddiluted net income per share assuming this share consolidation was implemented at the start of the previous consolidated fiscal year.
*3. Cash dividends per share of ¥48.00 for the fiscal year through March 2018 is the combined total of interim cash dividends per share of ¥16.00 and year-end cash dividends per share of ¥32.00.

54

DNP Integrated Report 201955

DNPʼs Business Portfolio

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

DNP has two main businesses: Printing, which contributes
about 96% of consolidated net sales, and Beverages, which
generates about 4% of the Groupʼs sales through Hokkaido
Coca-Cola Bottling Co., Ltd.
DNP aims to continue expanding its businesses andincreasing its corporate value by striving to solve problems
faced by corporate clients, consumers and society.

54.1％ 762.3 billion yen

1,401.5billion yen(Year ended March 31, 2019)

Lifestyle and Industrial Supplies

28.2％ 397.2 billion yen
Electronics

13.7％ 192.4 billion yen
Beverages
Beverages

4.0％ 55.9 billion yen
Operating Income
Printing
Information Communication

34.4％ 24.8 billion yenʼInformation Communication(¥ billion)

Net Sales

Packaging Business
Wrapping safely, providing easy-to-use packages with minimal stresson the environment

800

801.2

80

800

80

60

600

60

40

400

778.6 762.3

400
200

18.9

21.8

24.8

17

18

19

20

200

0

0

902.7 893.8

876.0

27.7

27.0

100

40

25.7
20
0

17

19

18

■ Net Sales ■ Operating Income■ Assets ■ Depreciation(¥ billion)(¥ billion)

Net Sales

AssetsDepreciation

100

1,000

100

Living Spaces Business

800

80

800

80

Adding comfort to the various spaces where people spend time

600

60

600

Industrial Supplies Business
Adding essential value to various companiesʼ product and services

Creating next-generation electronic devices through ingenuity at the nano level

200

397.2

394.3

400 388.2

14.4

12.1

17

18

8.4

0

20

200

0

0

454.0

445.3
40

17.0

16.5

16.4

17

18

19

■ Assets ■ Depreciation(¥ billion)(¥ billion)

Net Sales200■ Net Sales ■ Operating Income

Operating Income

AssetsDepreciation

1,000

100

1,000

100

800

80

800

80

600

60

600

60

40

400

400

16.5

200 169.4

17

34.1

36.9

(¥ billion)

40

258.1

234.1 225.1
12.1
12.2
11.6

188.8

192.4

18

19

17

Net Sales

Operating Income■ Net Sales■ Operating Income

Refreshing and thirst quenching, fun and always there for you

400

60

439.3

19

0

Beverages Business

40

20

200

0

0

60

20
0

80

18

19

4

56.6

2.4

56.0

56.1
2.2

40

3

2.1

20

2
1

0

0

17

56

Depreciation

Operating Income

51.1％ 36.9 billion yen
2.9％ 2.1 billion yen

1,000

600

Electronics

Beverages

Assets100

1,000Freely shaping displays to suit individuals and society

11.6％ 8.4 billion yen

Beverages

Operating Income

1,000

0

Display Components Business

Beverages(Year ended March 31, 2019)

Using security technologies to enable safe and secure communication

Electronic Devices Business

Beverages

billion yen

Information Innovation Business:
Information Security■ Assets ■ Depreciation(¥ billion)

Adding value to all aspects of imaging, and adding color to peopleʼs lives

Lifestyle and Industrial Supplies

49.9

In order to bring new value to consumers and corporations■ Net Sales ■ Operating Income

Imaging Communication Business

Lifestyle and Industrial Supplies

Information Communication

Information Innovation Business:
MarketingElectronics

Printing

Facilitating access to books and broadening the reading experience

The Three Segments of DNP s Printing Business

Net Sales

Publishing Business

18

19

DNP Integrated Report 201957

Our Products and Services

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

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

Information Communication

●

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

Information Innovation Business
Marketing
4 Flyers and catalogs
5 Household book-keeping application “ receipi! ® ”● BPO（Business Process Outsourcing）
6 Business Process Outsourcing Center● Information Security
7 Solar-powered outdoor LCD digital signage / universallydesigned touch screen multilingual signage ActivisionTM
8 Virtual reality
9 Business forms
10 Smart cards and magnetic cards
11 Cloud-based mobile payment services for smart devices
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 Self-service photo printing systems

Lifestyle & Industrial Supplies

Publishing
16 Packaging

17 Functional film complex PET bottle “ Complex Bottle”

18 Transparent vapor deposition film “ IB-Film”

19 Biobased packaging materials “ BiomatechTM ”

20 Mono-material packaging materials

21 Aseptic filling systems for PET plastic bottles

22 Comprehensive packaging evaluation services“ Human Research ®”23 Film medium for microorganism testing “ Medi・Ca ® ”(Dry medium for microbial counting)

Living Spaces Business
24 Residential interior materials (floor coverings)

25 Exterior materials for buildings

26 Curved resin glass

27 Interior coverings for railway cars (Hokuriku Shinkansen)

Industrial Supplies Business
28 Lithium-ion battery components

29 Photovoltaic module components

30 Lighting film (left: with film, right: without film)
31 Multifunctional insulation box

Display Components Business
32 Color filter for liquid crystal display

33 Large-scale photomask

34 Touch panel sensor

35 Optical films used for displays

Electronics

36 Electrode film for capacitive touch panels
37 Digital shelves

38 Viewing angle control film for in-vehicle displays(right: with film, no background reflection)

39 Transparent screen

40 Large scale curved DELD display-driven

digital signage

Electronic Devices Business41 Semiconductor photomask

42 Master template for nanoimprinting

43 Hard disk drive suspension

44 Lead frame for compact semiconductor package
45 Metal substrate for LED light

46 NFC (near field communication) module

47 MEMS (micro electro mechanical systems) products

58■■■ Numbers correspond to photographs on pp. 58-59.

DNP Integrated Report 201959

BUSINESS RESULTS

Business Strategies and Business Overview

Information Communication

Delivering
the information
people wantwhen they want it,with the optimal
information media（FINANCIAL AND NON-FINANCIAL INFORMATION）

Main Policies
1. Generate value primarily in growth areas
Create new value in our publishing business
Enhance the business of our “ honto” hybrid bookstore
network that links the “ honto” website where customers canbuy e-books and paper books with the brick-and-mortar
stores operated by MaruzenJunkudo Bookstores Co., Ltd.,
as a way to expand the publishing market and give people
opportunities to discover books that will enrich their lives.
Promote digital marketing
By conducting customer analysis, scenario planning andverification of benefits using the browsing behavior logs andpayment data on our website, develop optimized campaign
plans for each individual customer and solve marketing
issues faced by companies.
Promote various businesses utilizing a strong
foundation of information security*Please check pages 26 to 27 for DNP ʼs BPO business utilizing data centers.

Business Strategies
Various information devices including smartphones are
spreading at a lightning pace, and information media
and communication services continue to evolve alongwith the expansion of global networks. As consumer
values and lifestyles change dramatically, DNP will
utilize its strengths in P&I (printing and information) to
propel the unique evolution of a “digitaltransformation” aimed at transforming organizations
and businesses through information andcommunication technology. In addition, DNP will
provide new value that helps to solve issues incorporations and offers inspiring experiences andgreater convenience to consumers.
The Information Communication segment consistsof Publishing Business responsible for publishingmedia and education/publishing logistics, Information
Innovation Business responsible for marketing andinformation security and Imaging Communication
Business that creates “products and experience”
including photo prints. In addition to focusing on the
promotion of digital marketing and the spread of
cashless payment businesses including smart cards,
this segment accelerates BPO (Business Process
Outsourcing) in which DNP handles the business of a
growing number of companies that must respond tolabor shortages and work style reforms. In order tofurther increase profits, this division will also promote
structural reforms such as rebuilding ourmanufacturing system in Japan.

Financial Highlights

Promote the “ Photo Imaging Business”
Focus on expanding our business, including the “ DNP
Marketing Photo Booth Sharingbox PRIME,” which uses a
photography experience for corporate marketing. In both theJapanese and overseas photo print markets, we will discover
new value and prove new products and services that makepeople find to be fun, joyful, entertaining, simple orconvenient.

2. Provide value to the global market
Expand our publishing business globally, using Japanesecontents and magazine brands that we count among ourstrengths. In the field of smart cards, work with business/
capital alliance partners among major card manufacturers in
Vietnam and Indonesia to make our business morecompetitive with a focus on Southeast Asia. In Imaging
Communications, further enhance our global manufacturing,sales and service systems, and expand not only print media
such as ink ribbons, but for all aspects of imaging.

3. Increase corporate value by means of
all kinds of structural reforms
Penetrate with marketing that uses data frombrick-and-mortar bookstores where we have direct contact
with consumers, and make structural reforms related to
publishing and distribution from more flexible productions ofbooks all the way to logistics, distribution, and sales. In
addition, by combining the strengths of information
technology and our BPO business, and introducing AI(artificial intelligence) and RPA*, work to improve productivity
and quality, and promote operational efficiency byconnecting Japanese and overseas production bases.
* RPA (Robotic Process Automation): Initiatives to automate business processes
using AI controlled robots (software)

Net Sales

Operating Income- 2.1 % +14.2 %(¥ billion, %)2017.32018.32019.3

Net sales¥ 801.2¥ 778.6¥ 762.3

Operatingincome

18.9

21.8

24.8

Operatingincome margin

2.4 %

2.8 %

3.3 %
(¥ billion)(Net sales)(Operating income)

1,000
800

100

801.2

778.6

762.3

80

600

60

400
200

40

18.9

21.8

24.8

17

18

19

20

0

0

■ Net Sales ■ Operating Income[Net Sales]

Our smart card and payment service
businesses, which have growing demand due tothe transition to cashless transactions, as wellas our BPO business, which contracts work from
corporations in response to labor shortages andwork style reforms, are expanding steadily. In
contrast, paper media such as magazines, books,
catalogs and business forms declined, alongwith the impact of transferring all shares heldof SHUFUNOTOMO Co., Ltd., and as a result,sales decreased by 2.1% or about 16.326 billion
yen compared with the previous fiscal year.
[Operating Income]Due to the “honto” hybrid bookstore network
becoming profitable and the expansion of the BPO
business, as well as the results of cost structurereforms including revision of our production
system, operating income increased by 14.2% or
3.086 billion yen compared to the previous fiscal
year. Operating income margin increased 0.5
percentage points, from 2.8% in the previous
fiscal year to 3.3% in the fiscal year under review.

DNP Integrated Report 2019

61

BUSINESS RESULTS

Business Strategies and Business Overview

Lifestyle & Industrial Supplies

Making products
and services thatplay a big role inpeopleʼs lives andour corporate
activities
Business Strategies
The Lifestyle and Industrial Supplies segment consistsof three business divisions: Packaging, Living Spaces
and Industrial Supplies. The segment mainly provides
many familiar products and services that play importantroles in the daily lives of consumers both in Japan andabroad, and is deeply involved in corporate
manufacturing processes. Our Packaging businesscreates many of the packages that consumers use indaily life, including packaging for foods, beverages andhousehold items. Living Spaces business mainly
handles a wide range of products that shape various
spaces where people live into comfortable, functional
spaces. The business works on both materials forresidential use and non-residential use, as well asinterior and exterior furnishings for automobiles andrailway cars. Industrial Supplies business provides
components used in photovoltaic cells and lithium-ion
rechargeable batteries, as well as highly functionalfilms that control light, heat or fluids.
DNP develops and provides products and services
that are indispensable for a comfortable life, easy touse for many people and provide safety and security. In
addition to manufacturing in factories designed to saveenergy, have zero emissions, and use clean energy, we
strive to reduce our environmental impact and preserve
biodiversity throughout product and service lifecycles.
This segment anticipates the diverse needs ofconsumers and companies in Japan and abroad inorder to generate new value and enrich peopleʼs lives.

（FINANCIAL AND NON-FINANCIAL INFORMATION）

Main Policies

Financial Highlights

1. Generate value primarily in growth areas
Actively develop environmentally conscious products
and services that minimize stress on the environmentand help conserve biodiversity
Further focus on developing environmentally conscious
products and services, such as single material packages
that are easier to recycle, as well as paper containers forliquids that are easier to sort for disposal. For example,
expand our lineup of “ DNP biomass packaging materials
Biomatech” that contribute to a recycling-oriented society by
reducing CO 2 with the use of plant-based materials for somepackaging. In addition, provide new value in the logistics
field using “ DNP multifunctional insulation boxes,” which
contribute to construction of cold chains with high thermal
insulation.
Develop products and services that are comfortableand easy to use for many different people
Respect diversity factors, including age, gender, language
and ability differences as individuality, and promote inclusive
design from the early stages of product and service
development. Analyze awareness and actual usage of daily
necessities, foods and beverages, and promote spatial
design based on sensitivity engineering. At the same time,develop products with advanced design and functionality
through advanced image processing and printing technology.
Provide new value for the automotive andother markets
Develop decorative films for automobile interiors, “ DNP
ultra-weather-resistant hard-coat transfer film” for resin
glass that contributes to making lighter vehicles and “ DNP
adhesive film” that forms a strong bond between different
materials such as resin and metal. Also promote
development of new applications of pouches for lithium-ion
batteries of which we hold the global top share, including
mobile devices, electric vehicles and drones.

2. Provide value to the global market
In Packaging, strengthen production bases in Indonesia andVietnam with the aim of addressing environmental issues
and social issues, such as food loss in Southeast Asia. In
Living Spaces, use our global network to expand our market
share in Europe, the United States and emerging markets. In
Industrial Supplies, accelerate business development in the
global market for materials for lithium-ion batteries andphotovoltaic cells, which have growing demand worldwide.

Net Sales

Operating Income+0.7% -30.9%(¥ billion, %)2017.32018.32019.3

Net sales¥ 388.2¥ 394.3¥ 397.2

Operatingincome

14.4

12.1

8.4

Operatingincome margin

3.7 %

3.1 %

2.1 %
(¥ billion)(Net sales)(Operating income)

1,000

100

800

80

600

60

400
200

397.2

394.3

388.2
14.4

12.1

40

8.4

0

20
0

17

19

18

■ Net Sales ■ Operating Income[Net Sales]

Our Packaging business saw a decline in salesof paper packages and aseptic systems forfilling PET plastic bottles, as well as interior
and exterior materials for housing, but
Industrial Supplies saw increased sales ofpouches for lithium-ion rechargeable batteries.
In addition, business structural reforms andcost structural reforms resulted in an overallsales increase of 0.7%, or 2.862 billion yen,
compared to the previous year.
[Operating Income]3. Increase corporate value by means of
all kinds of structural reforms
Review the DNP Groupʼs business portfolio from thestandpoint of value, and improve production efficiency andprofitability. Especially in overseas business, respond more
flexibly to fluctuations in exchange rates and raw materials
prices in order to minimize the impact on business results.

Operating income for the entire segment
declined by 30.9% or 3.749 billion yen
compared to the previous fiscal year due tohigher costs caused by rising prices of plastic
films, resins and other raw materials, as well
as delays in price transfer. Operating income
margin declined 1.0 percentage point from
3.1% in the previous fiscal year to 2.1%.

DNP Integrated Report 2019

63

BUSINESS RESULTS

Business Strategies and Business Overview

Electronics

Developing
and providing
innovative
products
and services
with superb
functionality
Business Strategies
The worldwide launch of the next generation
communications standard 5G is expected to accelerate
the spread of IoT, AI and autonomous vehicles, andlead to the appearance of new products and services
that further enrich peopleʼs lives. 5G will realize
ultra-high-speed, low-latency, multi-connection
communications, which is predicted to further increasedemand in the smartphone and automotive industries
for organic light-emitting diode (OLED) displays thatoffer high resolution, freedom of design, light weight
and low power consumption.
The Electronics segment has developed display
related products and electronic device businesses bothin Japan and abroad, and will anticipate the changing
needs of corporations and people in order to provide
new products and services with superb functionality. In
doing so, we will refine and combine core technologies
owned by DNP including micromachining and coating,as well as focus on collaboration with business
partners and partner companies that have specialized
strengths in order to accelerate commercialization of
our products and services. We will also actively develop
alliances with other companies, such as throughtechnology grants. We will strive to increase
profitability and continue working on the selection andconcentration of product lineups, increasing efficiency
and thoroughly reducing costs.

（FINANCIAL AND NON-FINANCIAL INFORMATION）

Main Policies

Financial Highlights

1. Generate value primarily in growth areas
Refining and commercializing
nanoimprint lithography (NIL) technology
As the only supplier of master templates for semiconductor
NIL in the world, we will build a mass production system for
3D structured NAND flash memory. In addition, we will
provide total solutions that utilize NIL technology in fields
that require micromachining, such as sensor related
technology essential to the automation of various machineryand IoT.
Strengthen development of products for OLED displays
In anticipation of the increased demand for small andmedium-sized OLED displays for smartphones and the like,
we will increase production capacity for metal masks used in
manufacturing OLED panels, for which we hold the top sharein the world market. We will also focus on developing
products which meet various needs, including foldable
displays and rollable displays.
Pioneer new fields including on-board devices using
our strengths in core technology
With the progress of electronic control of automobiles,
on-board displays are expected to become larger and more
precise and electronic side mirrors are expected to beinstalled. DNP will follow diverse needs for automotive
applications, and focus on developing products such as
viewing angle control films for automotive displays.

2. Provide value to the global market
DNP works to always monitor and minimize the impact of
global trade issues and country risks in markets including
East Asia, Europe, and America. In April 2019, in order to
respond to growing demand for photomasks in China, we
commenced operations at a production base built locally asa joint venture with Photronics, Inc. (USA). We will continue
to develop our business in the global market while
monitoring the situation in Japan and abroad.

3. Increase corporate value by means of
all kinds of structural reforms
In October 2019, we plan to start mass production of opticalfilm for large screen TVs with a 2,500 mm ultra-wide basefilm. This will greatly improve productivity and increase
production capacity.
Despite the challenge posed by a longer pattern drawing
process caused by miniaturization of semiconductor
products, DNP will use its multi-electron beam mask
drawing system to significantly reduce writing time. We will
strive to achieve high productivity and develop a production
system for next-generation photomasks.

Net Sales

Operating Income+2.0 % +8.2 %(¥ billion, %)2017.32018.32019.3

Net sales¥ 169.4¥ 188.8¥ 192.4

Operatingincome

16.5

34.1

36.9

Operatingincome margin

9.7 %18.1 %

19.2 %(¥ billion)(Net sales)(Operating income)

1,000

100

800

80

600

60

400
200

36.9

34.1
169.4 16.5

188.8

192.4

18

19

0

40
20
0

17

■ Net Sales ■ Operating Income[Net Sales]

As the transition from LCD to OLED displays
for smartphones and other such devices
progresses, sales of metal masks for OLED
panel production have increased steadily. In
addition, sales of optical films have beenstrong due to the growing size of LCD TV
screens, while sales of viewing angle control
films for in-vehicle displays also increased
significantly. As a result, sales increased by
2.0%, or 3,682 million yen, compared to theprevious fiscal year.
[Operating Income]Operating income increased by 8.2%, or 2,812
million yen, compared to the previous fiscal year,
due to increased sales volume of our coreproducts: optical films and metal masks.
Operating margin increased by 1.1 percentage
points from 18.1% in the previous fiscal year to19.2% in the current fiscal year.

DNP Integrated Report 201965

Financial and Non-financial Data

Net Sales

Operating Income(¥ billion)(¥ billion)

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

Net Income (Loss) Attributable toParent Company Shareholders

EBITDA

Book Value per ShareTotal Net Assets(¥ billion)(¥)(¥ billion)(¥ billion)
2,000

60

40
48.1

1,500

1,462.1 1,455.9

1,410.1 1,412.2 1,401.5

49.8

26.9

30

46.3

45.4

150

33.5
25.2

3,500

27.5

40

103.4

108.6

1,000

0

500

50

42.4

-20

0

15

16

17

18

-35.6

-40

19

15

16

17

18

19

15

16

17

18

0

19

16

17

15

16

17

18

19

0

15

16

17

Earnings (Loss) per Share

Operating Income to Net Sales

Net Income to Net Sales

Stockholders' Equity

Total Assets

Capital Expenditures*

(¥)

(%)

(%)

(¥ billion)(¥ billion)(¥ billion)

1,200

2,000

100

81.57

80
60
40

41.81

4

90.76

3.29

53.09

3

3.56
3.28

3.12

2.31

1,078.8
1.95

2
1.84

3

1,000

0

2.23

2

-20

1,053.6

1,809.4

996.1

80

800
60
600

0

57.0

55.0

59.5

1,000

41.1

40

-40
-60

-1

400

-2

200

500

1

-80
-100

15

16

17

18

20

-2.54

-118.22

-120

19

97.2

100
1,718.6

18

1,741.9 1,794.7 1,775.0

1,500

1.79

1

20

1,017.4 1,033.8

1,046.6

200

19

18

1,102.5

400

1,000

0

15

1,063.2 1,081.2

600

500

-30
0

1,675.6 1,618.6

1,500

-10

20

1,124.0

800

2,000

31.4

1,200
1,000

2,500

100

10

3,300.5

3,000

120.5 122.5

203,361.1

3,493.7

0

19

0

-3

15

16

17

18

19

15

16

17

18

0

15

19

16

17

18

19

0

15

16

17

18

19

15

16

17

18

19

* Figures include capital expenditures for intangible
fixed assets.

ROE

ROA

(%)

(%)
4
3

4

3.2
2.7

2.5

2

2

1

1

0

0

-1

-1

-2
-3.5

-4

1.6

1.9

1.5

16

17

18

19

(¥ billion)
51.0

40

54.8
39.8

45.3
31.7

1.6

31.8

31.3

(¥ billion)

100

100

65.3

61.4

61.0

40
59.0

35.1

20

11.7

0
40

-18.6

71.5

60
67.0

60

-20

85.9

80

20

0

-3

Free Cash Flow*(¥ billion)

80

20

-2.0

Depreciation Expense

33.2 33.7

30

-20
-40

10

-40

20

-60

0

-100

-80

-4

15

(¥ billion)

40

-2

-3

Research and Development
Expenditures

60

3

2.6

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

0

-60

15

16

17

18

19

15

16

17

18

19

15

16

17

18

19

15

16

17

18

19

-77.9

15

16

17

18

19

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

66

DNP Integrated Report 201967

Financial and Non-financial Data

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

Managementʼs Discussion
and Analysis
Sales of Environmentally Conscious
Products and Services (by Segments)

Total Number of Employees(by Segments)

Number of Overseas Group Company
Employees (by Area)(¥ billion) (As of March 31, 2019)(persons) (As of March 31, 2019)(persons) (As of March 31, 2019)

Others 33.2

Corporate 2,372

Beverages
1,286Electronics
118.4

America
691

603.2

38,051billion yen

4,700

persons

Lifestyle andIndustrial Supplies
10,620Lifestyle andIndustrial Supplies
200.7

persons

Information
Communication
250.9

Waste Emissions (Including International Operations)

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

1,500

100

100

80

80

1,201
1,000

1,027

1.50
961

60

52

1.00
0.78

0.73

0.69

17

18

Percentage of Female Managers
(%)
6.0

5.6

0

0

19

16

0.35

16,0000.32 0.33

0.31

14,00012,0000.21

3.3

11,858 12,358

0.10

1.0

0.05
0

0

16

17

18

19

Net sales (¥ million)

16

17

18

19

2019.32018.32017.3¥ 1,401,506¥ 1,412,252¥ 1,410,173

Gross profit margin (%)

20.1 %

19.9 %

6,000

Operating income margin (%)

3.6 %

3.3 %

2.2 %

4,000

Ordinary income margin (%)

4.2 %

3.6 %

2.6 %

2,000

Net income margin (%)-2.5 %

1.9 %

1.8 %

0

15

Japanʼs economy showed improvement in employment conditions and the income
environment during the fiscal year ended March 2019, but the economic outlook
is increasingly uncertain, given the lack of strength in consumer spending,natural disasters and global trade issues. The printing industry continued to facea tough business environment, affected by lower demand for printed media andan accompanying increase in competition resulting from growth in the e-bookand online advertising markets.
The DNP Group stated “ P&I Innovation” as its business vision, combining its
strengths in printing and information with the strengths of its partners to focus
on generating value. The DNP Group has set “ Knowledge and Communication,”“ Food and Healthcare,” “ Lifestyle and Mobility ” and “ Environment and Energy ”
as growth areas, and is now developing businesses that create new value thatsolves social issues and meets peopleʼs expectations.
In particular, the Group will focus on priority business as it builds a robust
business portfolio, including thermal transfer printing media for photo printers,
pouches for lithium-ion batteries, optical film for displays and metal masks usedin the production of organic light-emitting diode (OLED) displays, for which we
hold the top share globally, as well as smart cards, for which we hold the top
share in Japan.
In addition to aggressive investment in these priority businesses, we are also
promoting structural reforms to enhance our competitiveness, such as reorganizing
business divisions and group companies. During the fiscal year ended March 2019,
we declared an impairment of ¥16,600 million for business assets with declining
profitability and idle assets that we do not expect to use. As part of maximizing
capital efficiency with awareness of capital cost, we are continuously reviewing ourstock holdings. During the current fiscal year, we sold 30 listed stocks and 1
unlisted stock, recording a special profit of ¥18,000 million.
The DNP Group has implemented a repair program for defects that occurred insome wallpaper products manufactured from February 2011 to February 2014,
such as the surface becoming brittle with change in time and the surface easily
peeling off. We confirmed that there is no issue with the safety of wallpaper thathas this defect, as a result of tests by an expert institution. We recorded additional
repair costs of ¥75,000 million as an extraordinary loss, and reviewed our repair
program after making another rational estimate of the largest potential future
impact in light of the results of new scientific testing and analysis based on dataobtained to date in relation to actual repair site samples and usage conditions.
By taking these measures, we will strive to reduce the spread of impact on
future business results, further promote concentration on priority businesses
and further increase corporate value.

12,435 12,392

8,000

2.0

68

11,311

10,000

0.20
0.15

15

19

18

Number of Japanese Patents Held

0.25

4.0

17

Lost Time Work Accident
Occurrence Rate

0.26

4.1

34.3

34.9

20

0.30

4.7

5.0

36.9

20

0.00

16

3.0

60

52

48

40
35.4

0.50

0

3.1

49

40

0.83

500

Emissions per-unit value(kg/million yen)

Waste emissions (1,000 tons)

2.00

1,093

Asia
3,720

Information
Communication
20,090GHG Emissions (Including International Operations)
GHG emissions (1,000 t-CO 2 )Business Environment and Overview of Operating Results
for the Fiscal Year Ended March 2019

Europe 289

Electronics
3,683

CONSOLIDATED

15

16

17

18

Net Sales by Segment(Year ended March 31, 2019)
Electronics
13.7%

Lifestyle andIndustrial Supplies
28.2%

Beverages
4.0%

Information Communication
54.1%

Operating Income by Segment(Year ended March 31, 2019)
Beverages
2.9%

Information Communication
34.4%

18.9 %

Electronics
51.1%

Lifestyle andIndustrial Supplies
11.6%

19
DNP Integrated Report 201969

Managementʼs Discussion and Analysis

DNP ʼs Overseas Sales(¥ billion)250

230.2 234.6

226.7

238.4

202.5

200
150

Overseas sales for the Group as a whole increased by ¥11,687 million, or 5.2%
from the previous fiscal year, to ¥238,377 million. The percentage of total sales
increased by 0.9 percentage points to 17.0%. In Asia, including Indonesia andTaiwan, sales increased by 7.4% compared to the previous fiscal year, to¥162,056 million. In other regions including the United States and France, sales
increased 0.5% to ¥76,321 million.

Information Communication

100

Net Sales:¥762,310 million (down 2.1% YoY)
Operating Income:¥24,843 million (up 14.2% YoY)
Operating Income Margin: 3.3% (up 0.5 percentage point)

50
0

15

16

17

18

19

Publishing Business: Publishing & Media Services
Market Estimated publication sales in Japanʼs publication industry
decreased to ¥1,274.800 billion (down 4.7% year on year) through March
2019. Among these publications, magazine sales decreased 7.1% year on
year to ¥586.6 billion, as discontinued publications continue to exceed
newly launched publications, due to the impact of flat-rate unlimited
reading services for electronic magazines. Books also recorded a large
decline in sales of paperbacks, with a decrease of 2.7% year on year to¥688.2 billion according to Japanʼs Research Institute for Publications.
DNP In the Publishing business, the DNP Group worked to help solve
problems within the publishing industry, including by advancing theaccuracy of demand forecasting by using artificial intelligence. However,sales in the Publishing & Media Services business decreased for bothbooks and magazines.

Publishing Business: Education and Publications Distribution
Market The number of bookstores, which stood at approximately 12,000 asof 2018, has declined from its peak of approximately 22,000 in 1999
according to statistics from Almedia. Meanwhile, the domestic e-bookmarket expanded by 11.9% from the previous fiscal year to ¥247.9 billion
in the 12 months from January to December 2018 according to Japanʼs
Research Institute for Publications.
DNP DNP ʼs “ honto” hybrid bookstore network that combines physicalbookstores, online bookstores and e-books posted increased sales, withmembers rising above 5 million. Sales in library operations outsourcing
increased year on year despite growth in the number of outsourcing
libraries remaining flat (1,365 as of the end of January 2019), due to thetransition to relatively large-scale libraries. Overall sales in the Publishingbusiness decreased from the previous year, affected by the transfer of all
stock in our subsidiary SHUFUNOTOMO Co., Ltd. in December 2017.

Information Innovation Business: Marketing
Despite Internet advertisement expanding, newspapers, magazines,
television, radio and DM advertising all decreased from last year, so domestic
advertising demand in the fiscal year ended March 2019 decreased 0.6%
according to Japanʼs Ministry of Economy, Trade and Industry.
DNP Although promotional materials including premium goods increased,
overall sales decreased due to a decline in demand for printed media,
including advertising flyers and catalogs.
MarketInformation Innovation Business: Information Security
Market Credit card companies will promote the addition of IC chips to allcredit cards distributed in Japan by the end of March 2020. CLO (Card
Linked Offers), a measure to promote sales based on credit card payment
trends and user attributes, have increased.

70

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

DNP Our smart card business focused on credit cards and sales ofBusiness Process Outsourcing (BPO) services increased in response tolabor shortages and work style reforms in corporations, but performancefell short of the previous year overall due to the effect of the transition topaperless transactions.

Imaging Communication Business
Market Although the volume of photo printing is declining worldwide, themarket for dye-sublimation thermal transfer printing media continues toperform strongly as a result of demand shifting from silver halide printing.
In particular, there is rising demand for uses such as printing of certificatesand photo printing at events and sightseeing spots in Southeast Asia, theMiddle East and China.
DNP The DNP Group promoted “ value creation” business to enhancepeopleʼs experiential value through photographs. This included launching aservice to print photographs taken with a smartphone on the ID photo
printing machine “ Ki-Re-i ”, as well as launching the sharingbox PRIME
service as a DNP marketing photo booth that takes and prints photographs
at sporting events, event venues, tourism sites and other locations.
However, overall sales in the Imaging Communication business decreased
as a result of lower sales of thermal transfer printing media for photo
printers in Europe, although sales increased in North America andSoutheast Asia.

Lifestyle and Industrial Supplies
Net Sales:¥397,169 million (up 0.7% YoY)
Operating Income:¥8,378 million (down 30.9 % YoY)
Operating Income Margin: 2.1 % (down 1.0 percentage point)

Packaging business
Market Production value in the domestic package printing industry increased
0.1% year on year in the fiscal year ended March 2019 according to Japanʼs
Ministry of Economy, Trade and Industry. The standard of the consumer
mindset as seen from the “Consumer Attitude Index” shows continued weak
movement due to rising food and service prices and the slowdown in overseas
economies (seasonally adjusted values according to Japanʼs Cabinet Office).
DNP In the Packaging business, the DNP Group worked to develop and sell
environmentally conscious products, such as by using plant-basedmaterials for part of packaging or using mono-material packaging (madefrom a single material) that is easier to recycle. Sales were favorable forfilm packaging, but decreased for paper packaging and aseptic fillingsystems. As a result, overall sales in the Packaging business decreased.

Living Spaces Business
Market Domestic new housing starts decreased by 2.3% year on year to
approximately 940,000 in 2019. Among these, condominiums remained on
par with the previous year, while owner-occupied houses decreased 0.4%
and apartments and other rental housing decreased 5.5% according toJapanʼs Ministry of Land, Infrastructure, Transport and Tourism.
DNP In the Living Space business, the DNP Group focused on sales ofenvironmentally conscious products that use its propriety electronic beam(EB) coating technology, as well as Arttec interior and exterior aluminum
panels that reproduce textures such as wood and stone. While sales tooverseas remained strong, overall sales in the Living Space businessdecreased, due to sluggish sales of domestic building materials andautomotive interior materials.

DNP Integrated Report 201971

Managementʼs Discussion and Analysis

Industrial Supplies Business
Market Global demand continues to expand for lithium-ion batteries alongwith the introduction and expansion of renewable energy and the spread ofvehicle electrification
DNP In the Industrial Supplies Business, DNP ʼs pouches for lithium-ion
batteries have captured the top global market share by leveraging
technologies for laminates that combine multiple film sheets and precision
processing. Sales of these products were favorable for both mobile andautomotive applications. Sales in Japan and overseas of photovoltaic
module components declined. However, barrier films for packaging of retort
pouch foods were strong, and demand for vacuum insulation materials forrefrigerators and other products increased due to the summer heat in2018, so overall sales increased year on year.

Electronics
Net Sales:¥192,436 million (up 2.0% YoY)
Operating Income:¥36,912 million (up 8.2% YoY)
Operating Income Margin: 19.2% (up 1.1 percentage points)

Display Components Business
Market In year ended March 2019, the smartphone market matured.
Although demand for small and medium-sized organic light-emitting diode(OLED) panels slowed down and capital investment was reduced, we expect
next generation flexible OLED panels to continue to spread, including both
mobile and automotive applications. Also, since the fall of 2018, the price of
LCD panels for TVs has fallen significantly due to excess supply, but demandfor polarizers that control images on LCD panels has increased due to thegrowing screen size of TVs.
DNP In the Display Components business, due to the growing demand forlarge TVs in North America and China, we enjoyed favorable sales ofpolarizers surface films, for which we hold the top share in the world. In
addition, sales of screens for ultra-short throw projectors and viewing angle
control film for in-vehicle displays also increased. In addition, demand
increased for metal masks for manufacturing small and medium OLED
panels, so overall sales increased year on year.

Electronics Devices Business
Market In 2018, global semiconductor sales increased 13.7% year on year to$468.7 billion due to increased shipments of semiconductor memory for data
centers. Sales of semiconductor photomasks for manufacturing increased
8% year on year to $4 billion. However, in the second half of 2018, there wasgreater impact from the trade friction between the United States and China.
DNP In the Electronic Devices business, semiconductor photomask sales
increased, supported by increased capacity of built-in memory ofsmartphones and other devices, as well as the spread of IoT equipment, so
sales increased for the business overall.

Beverages Business
Net Sales:¥55,997 million (down 0.1% YoY)
Operating Income:¥2,121 million (down 5.5% YoY)
Operating Income Margin: 3.8% (down 0.2 percentage point)
The soft drink industry continued to face a tough market environment
as competition for market share among beverage makers intensified throughsales promotions and price competition.
Market72

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

DNP The DNP Group worked to increase market share and acquire
customers by releasing new products in core brands and stepping up sales
activities based on area marketing, as well as sales promotion to massmerchandisers in the vending machine business. However, overall segment
sales declined from the previous year as a result of lower sales due to poorsummer weather and the impact of the Hokkaido Eastern Iburi Earthquake.

Cost of Sales/Selling, General and
Administrative Expenses/Operating Income
The cost of sales totaled ¥1,119,390 million, down 1.1% or ¥12,272 million fromthe previous fiscal year. The gross profit margin was 20.1%, up 0.2 percentage
point from the previous year.
The Domestic Standard Trading Price for naphtha (crude gasoline), a basic raw
material for synthetic resins including plastic, increased significantly, reflecting
continued high crude oil prices until October 2018. This was accompanied bygreatly increased prices for films and other petrochemical products, while theprice of printing paper also rose due to soaring raw material prices and logistics
costs. As a result of these factors, the impact of higher raw materials prices was¥7,500 million, surpassing ¥3,400 million in the previous year. Although DNP
negotiated with customers to pass on the impact of higher raw materials prices,the price pass through ratio during the fiscal year was limited to just around 40%.
Selling, general and administrative expenses totaled ¥232,216 million in thefiscal year under review, down ¥2,001 million, or 0.9%, from the previous fiscal
year. Selling, general and administrative expenses equated to 16.6% of net sales,
the same as the previous year.
As a result, operating income totaled ¥49,898 million in the fiscal year underreview, up ¥3,526 million, or 7.6%, from the previous fiscal year. The operating
income margin was 3.6%, up 0.3 percentage point from the previous fiscal year.

Nonoperating Income (Expenses) andExtraordinary Income (Losses)
Nonoperating income totaled ¥15,194 million in the fiscal year under review, up¥1,369 million, or 9.9%, from the previous fiscal year. Nonoperating expenses
totaled ¥6,832 million, down ¥2,394 million, or 25.9%, from the previous fiscal
year. As a result, net nonoperating income totaled ¥8,362 million, up from
¥4,599 million in the previous year.
Ordinary income totaled ¥58,259 million, up ¥7,288 million, or 14.3%, fromthe previous year.
Extraordinary income totaled ¥23,089 million, down ¥36,223 million comparedto the previous fiscal year, in large part due to gross gains on sales of available-forsale securities declining to ¥18,025 million from ¥44,964 million in the previous
fiscal year. Extraordinary losses totaled ¥100,035 million, up ¥35,148 million in theprevious fiscal year due to provisions for reserve for repairs increasing to ¥75,000
million from ¥53,500 million. As a result net extraordinary loss totaled a loss of¥76,946 million, compared to a loss of ¥5,575 million in the previous fiscal year.
As a result of the above, loss before income taxes and non-controlling interests
totaled ¥18,685 million, compared to income before income taxes andnon-controlling interests of ¥45,396 million in the previous fiscal year.

Gross Profit Margin
(%)
25
20

19.1

19.4

18.9

15

16

17

19.9

20.1

18

19

15
10
5
0

SGA Expenses to Net Sales
(%)
20
15.8

16.3

16.7

16.6

16.6

15

16

17

18

19

15

10

5

0

Operating Income Margin
(%)
4
3.3

3.3

3.1

3.6

3

Net Income (Loss) Attributable to Parent Company Shareholders
Net income attributable to parent company shareholders totaled ¥35,668 million
in the fiscal year under review (compared to ¥27,501 million in the previous fiscal
year). Net loss per share was ¥118.22 (compared to net income per share of¥90.77 in the previous year).
* DNP implemented a share consolidation in which two shares of common stock were consolidated into one share effective
October 1, 2017. Accordingly, DNP has estimated net income per share and diluted net income per share assuming this shareconsolidation was implemented at the start of the previous consolidated fiscal year.

2

2.2

1

0

15

16

17

18

19

DNP Integrated Report 201973

Managementʼs Discussion and Analysis

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

Liquidity and Capital Resources

and accounting for 5%.
Research and development expenditures totaled ¥33,700 million, surpassing
by 1.7% the number of ¥33,200 million in the previous fiscal year.

Cash Flow

Balance Sheet
2019.3

Cash flow fromoperating activities (¥ million)¥

68,971

2018.3¥48,457¥

71,945

Cash flow frominvesting activities (¥ million)¥-146,909¥

23,075¥14,012

Free cash flow (¥ million)¥-77,937¥

71,532¥

85,957Regarding consolidated cash flow in the current fiscal year, net cash provided byoperating activities totaled ¥68,971 million, due mainly to ¥18,685 million inincome before income taxes and non-controlling interests and ¥59,080 million in
depreciation.
Net cash used in investing activities totaled ¥146,909 million, due mainly to¥37,578 million spent on purchasing property, plants and equipment, ¥26,785
million in proceeds from sales of investment securities, and a ¥136,981 million
net increase in time deposits with deposit periods exceeding 3 months.
Net cash used in financing activities totaled ¥32,196 million, due mainly to¥19,783 million in dividends paid and a ¥3,924 million net decrease in
short-term loans payable.
As a result of these activities, cash and cash equivalents at the end of the
fiscal year in the consolidated cash flow statement totaled ¥133,771 million.
Cash and cash deposits at the end of the current fiscal year in the consolidatedbalance sheets were ¥268,046 million. This difference was mainly due to¥139,275 million in time deposits with deposit periods exceeding 3 months notincluded in cash and cash equivalents in the consolidated cash flow statement.
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 an
expenditure of ¥77,938 million. Excluding time deposits with deposit periods
exceeding 3 months, free cash flow amounted to income of ¥59,043 million.

Capital Expenditures, Depreciation,
Research and Development Expenditures, etc.

Capital Expenditures and Free Cash Flow(¥ billion)
Capital expenditures
Free cash flow
97.3

100
75
50

86.0
57.1

55.0

71.5
59.6
41.1

35.2

25

11.7

0
-25
-50
-75
-100

74

-77.9

15

16

17

18

19

2019.32017.3

Capital expenditures this fiscal year consisted mainly of streamlining investment
and totaled ¥41,100 million, down ¥18,400 million, or 31.0%, from the previous
fiscal year. By segment, capital expenditures in the Information Communication
segment were ¥19,600 million, down ¥7,500 million from the previous year andaccounting for 48% of total capital expenditures. The Lifestyle and Industrial
Supplies segment was ¥12,700 million, down ¥2,900 million and accounting for31%. The Electronics segment was ¥4,600 million, down ¥5,900 million andaccounting for 11%. The Beverages segment was ¥1,900 million, down ¥300
million and accounting for 5%. Adjustment was ¥2,000 million, down ¥1,500
million and accounting for 5%. Necessary capital for the above capital investment
was covered by funds on hand.
Depreciation totaled ¥59,000 million, down ¥2,000 million, or 3.3%, from theprevious fiscal year. By segment, depreciation in the Information Communication
segment were ¥25,600 million, down ¥1,200 million from the previous year andaccounting for 43% of total depreciation. The Lifestyle and Industrial Supplies
segment was ¥16,300 million, down ¥100 million and accounting for 28%. The
Electronics segment was ¥11,500 million, down ¥600 million and accounting for20%. The Beverages segment was ¥2,700 million, up ¥100 million andaccounting for 4%. Adjustment was ¥2,700 million, on par with the previous year

2018.32017.3

Total assets (¥ million)¥

1,775,023¥

1,794,764¥

1,741,904

Stockholders' equity (¥ million)¥

996,162¥

1,053,600¥

1,033,864

Interest-bearing debt (¥ million)¥

166,350¥

170,103¥

169,133

Book value per share (¥)¥

3,300.52¥

3,493.79¥

3,361.10

DNP ʼs total assets at the end of this fiscal year amounted to ¥1,775,022 million,
down ¥19,742 million, or 1.1%, from the previous fiscal year.
Among current assets, cash and cash equivalents totaled ¥268,046 million, up¥25,265 million, or 10.4%, from the previous fiscal year. Trade receivables
totaled ¥351,450 million, down ¥2,791 million, or 0.8%. Inventories ofmerchandise and finished products, work in process, raw materials and supplies
totaled ¥133,070 million, down ¥4,477 million, or 3.3%. As a result, current
assets totaled ¥799,280 million, up ¥19,241 million, or 2.5%.
Among fixed assets, net property, plants and equipment totaled ¥441,120
million, down ¥33,277 million, or 7.0%, from the previous fiscal year. Intangible
fixed assets totaled ¥28,914 million, down ¥3,939 million, or 12.0%. Investments
and other assets totaled ¥505,707 million, down ¥1,765 million, or 0.3%. As aresult, fixed assets totaled ¥975,742 million, down ¥38,982 million, or 3.8%.
Current liabilities totaled ¥467,655 million, up ¥29,107 million, or 6.6%, fromthe previous fiscal year. Long-term liabilities totaled ¥260,745 million, up ¥7,081
million, or 2.8%. As a result, total liabilities amounted to ¥728,400 million, up¥36,187 million, or 5.2%, from the previous fiscal year.
As of March 31, 2019, net assets totaled ¥1,046,622 million, down ¥55,928
million, or 5.1%, from the previous fiscal year. This was due mainly to net loss
attributable to parent company shareholders of ¥35,668 million and dividends ofsurplus totaling ¥19,317 million.
As a result of this, the equity ratio in the fiscal year under review was 56.1%, adecrease of 2.6 percentage points from the previous fiscal year.
Even after the announcement of financial results for the fiscal year ended
March 2019, we have maintained a high AA- rating from Rating and Investment
Information, Inc. (R&I) in recognition of our strong financial base and businessprofitability.
(Announced June 27, 2019)

ROE
（%）

4
3

3.2
2.7

2.5

2.6

2
1
0
-1
-2
-3
-4

-3.5

15

16

17

18

19

Equity Ratio
（%）

80

60

59.6

59.2

59.4

58.7

15

16

17

18

56.1

40

20

0

19

DNP Integrated Report 201975

Selected Financial Data (unaudited)

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

Dai Nippon Printing Co., Ltd. and Consolidated Subsidiaries
Years ended March 31

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

Statements of Operations Data (¥ million)
Net sales¥

1,401,506¥

1,412,252¥

1,410,173¥

1,455,916¥

1,462,118¥

1,448,550¥

1,446,607¥

1,507,228¥

1,589,373¥

1,583,383

Cost of sales

1,119,391

1,131,662

1,143,164

1,173,203

1,182,954

1,176,077

1,186,558

1,246,878

1,287,581

1,286,682

Gross profit

282,115

280,590

267,009282,713279,164

272,473

260,049

260,350

301,792

296,701

Selling, general and administrative expenses

232,217234,218

235,598

237,241

230,990

222,374

224,269

226,335

233,973

230,187

Operating income

49,89846,372

31,41145,472

48,17450,09935,78034,01567,81966,514

Ordinary income

58,25950,971

36,74052,65153,75953,28540,31836,84362,786

68,841

Income (loss) before income taxes and non-controlling interests(18,685 )

45,396

39,831

54,84151,062

48,60835,152

2,673

52,69649,496

Net income (loss) attributable to parent company shareholders(35,669 )

27,501

25,22633,58826,92425,642

19,218(16,356 )

25,03323,278

Balance Sheet Data (¥ million)
Total assets¥

1,775,023¥

996,162

Stockholders' equity
Interest-bearing debt
Total net assets

1,794,764¥

1,053,600

1,741,904¥

1,033,864

1,718,636¥

1,017,425

1,809,462¥

1,574,754¥

1,578,976¥

1,608,806¥

1,649,784¥

1,618,854

1,078,828

932,329

893,124

871,229

908,521916,324

166,350

170,103

169,133

189,820

187,946

182,596

227,209229,664

229,140

166,751

1,046,622

1,102,551

1,081,286

1,063,241

1,124,093

976,386

937,055914,213

952,440

956,863

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

68,971¥

48,457¥

71,945¥72,629¥85,731¥

120,109¥

100,498¥

108,603¥

140,053¥

140,574

Cash flows from investing activities(146,909 )

23,07514,012(60,883 )(50,540 )(58,371 )(72,588 )(80,126 )(82,562 )(120,683 )Cash flows from financing activities(32,197 )(42,771 )(45,223 )(47,166 )(23,865 )(80,038 )(36,236 )(32,833 )

15,186

13,126

Free cash flow

(77,937 )

71,532

85,957

11,74635,191

61,73827,91028,47757,491

19,890

Other Selected Data (¥ million)
Capital expenditures¥

41,103¥59,558¥57,085¥97,265¥55,024¥63,465¥88,315¥98,189¥102,173¥

119,063

Depreciation expenses

59,08061,071

61,461

65,31067,03473,45980,20095,82997,977

91,695R&D expenditures

33,78633,21031,376

31,82731,74930,82030,82031,69033,14733,850Common Share Data (¥, shares)
Earnings (loss) per share ̶ primary
Dividends paid per share
Book value per share
No. of common shares outstanding (exc. treasury shares)¥(118.22 )

¥

90.77

¥

81.57

¥

53.10

¥

41.82

¥

39.82

¥

29.84

¥

(25.39 )

¥

38.86

¥

36.13

64.00

48.00

32.00

32.00

32.00

32.00

32.00

32.00

32.00

32.00

3,300.52

3,493.79

3,361.10

1,618.66

1,675.63

1,447.96

1,386.86

1,352.71

1,410.44

1,422.34

301,830,719

301,563,746

307,596,791

628,561,116

643,833,079

643,893,863

643,990,364

644,062,928

644,142,530

644,238,930

Financial Ratios (%)
As a percentage of net sales:
Gross profit

20.13 %

19.87 %

18.93 %

19.42 %

19.09 %

18.81 %

17.98 %

17.27 %

18.99 %

18.74 %

Selling, general and administrative expenses

16.57

16.58

16.71

16.29

15.80

15.35

15.50

15.02

14.72

14.54

Operating income

3.56

3.28

2.23

3.12

3.29

3.46

2.47

2.26

4.27

4.20

Income (loss) before income taxes and non-controlling interests(1.33 )

3.21

2.82

3.77

3.49

3.36

2.43

0.18

3.32

3.13

Net income (loss) attributable to parent company shareholders(2.54 )

1.95

1.79

2.31

1.84

1.77

1.33

(1.09 )

1.57

1.47

Return on equity(3.48 )

2.63

2.46

3.20

2.67

2.81

2.18

(1.84 )

2.74

2.57

Return on assets(2.00 )

1.55

1.46

1.90

1.59

1.63

1.21

(1.00 )

1.53

1.48

Dividend payout ratio

―

70.5

78.5

60.3

76.5

80.4

107.2

―

82.3

88.6

Total return ratio

―

124.8

137.6

119.5

76.5

80.4

107.2

―

82.3

88.6

Return to Shareholders (%)

Note:*1. DNP implemented a share consolidation in which two shares of common stock were consolidated into one share effective October 1, 2017. Accordingly, DNP has estimated net income per shareand diluted net income per share assuming this share consolidation was implemented at the start of the previous consolidated fiscal year.

76*2. Cash dividends per share of ¥48.00 for the fiscal year through March 2018 is the combined total of interim cash dividends per share of ¥16.00 and year-end cash dividends per share of¥32.00. Because DNP implemented a share consolidation in which two shares of common stock were consolidated into one share effective October 1, 2017, interim cash dividends per share of¥16.00 is the amount prior to the share consolidation and year-end cash dividends per share of ¥32.00 is the amount after the share consolidation.

DNP Integrated Report 201977

Consolidated Financial Statements

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

CONSOLIDATED BALANCE SHEETS
Dai Nippon Printing Co., Ltd. and Consolidated Subsidiaries
March 31, 2019 and 2018
Thousands of
U.S. dollars (Note 3)

Millions of yen

Assets

2019

2019

2018

Current assets:

Thousands of
U.S. dollars (Note 3)

Millions of yen

Liabilities and Net Assets

2019

2019

2018

Current liabilities:
1,205,153

Short-term bank loans (Notes 7 and 16)

Time deposits (Note 16)

139,275

2,445

1,254,730

Current portion of long-term debt (Notes 7 and 16)

54,222

6,583

488,486

Trade receivables (Notes 10 and 16)

351,450

354,241

3,166,216

Trade payables (Notes 10 and 16)

246,138

248,9932,217,459

Cash and cash equivalents (Notes 4 and 16)¥

Allowance for doubtful receivables
Inventories (Note 6)
Prepaid expenses and other current assets (Notes 5 and 10)
Total current assets

133,772¥

244,937$¥

42,474¥

44,795$

382,649(1,516 )(1,691 )(13,658 )Accrued expenses (Note 10)40,722

39,713366,865

133,072

137,548

1,198,847

Income taxes payable (Note 13)

7,448

10,042

67,099Reserve for repairs

19,16229,580172,631

Other current liabilities (Notes 7 and 10)

57,48958,843517,919467,655

438,549

4,213,108

Long-term debt (Notes 7 and 16)

69,655

118,727

627,523

Net defined benefit liability (Note 8)

34,73435,217

312,919

Other long-term liabilities (Notes 7, 10 and 13)

156,357

99,7201,408,621

260,746

253,664

2,349,063

114,464

114,464

1,031,207

43,22742,560389,433

799,280780,040

7,200,721

Total current liabilities
Investments and advances:Non-consolidated subsidiaries and associated companies (Notes 10 and 16)

60,26858,916542,955

Investment securities (Notes 5 and 16)

338,941

344,956

3,053,523

Other (Note 16)
Total investments and advances

516

486

4,649

399,725

404,358

3,601,127

Property, plant and equipment, at cost (Notes 7 and 14):Long-term liabilities:

Total long-term liabilities

Land

147,924

151,521

1,332,649

Buildings and structures

549,252

566,446

4,948,216

Machinery and equipment

820,763

849,9937,394,261

Leased assets

25,82826,968

232,685

Construction in progress

11,761

7,160

105,955

Total
Accumulated depreciation
Net property, plant and equipment

Contingent liabilities (Note 18)
Net assets

1,555,528

1,602,088

14,013,766

Stockholders' equity(1,114,408 )(1,127,690 )(10,039,712 )Common stock -441,120474,398

3,974,054

Authorized: 745,000,000 shares;
Issued: 324,240,346 shares;

Other assets

Capital surplus (Note 9)

144,766

144,264

1,304,198

Net defined benefit asset (Note 8)

71,381

67,839643,072

Retained earnings (Note 9)

626,949

681,977

5,648,189

Other (Notes 7 and 13)

63,517

68,129572,224

Total other assets

134,898

135,968

1,215,296

Treasury stock, at cost 22,420,745 shares in 2019 and
22,676,600 shares in 2018 (Note 9)(62,898 )(62,908 )(566,648 )

823,281877,797

7,416,946

170,073

168,156

1,532,189

Total stockholders' equity
Total assets¥

1,775,023¥

1,794,764$ 15,991,198

Accumulated other comprehensive income
Valuation difference on available-for-sale securities (Note 5)
Net deferred losses on hedges
Foreign currency translation adjustments (Note 17)

(1 )

(4 )

(9 )

(2,399 )1,410(21,613 )Remeasurements of defined benefit plans (Note 8)

5,209

6,242

46,928

Total accumulated other comprehensive income

172,882

175,804

1,557,495

Non-controlling interests

50,45948,950454,586

Total net assets

1,046,622

1,102,551

9,429,027

1,794,764$ 15,991,198

Total liabilities and net assets¥

1,775,023¥

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

78

DNP Integrated Report 2019

79

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

CONSOLIDATED STATEMENTS OF OPERATIONSCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Dai Nippon Printing Co., Ltd. and Consolidated Subsidiaries
Years ended March 31, 2019 and 2018

Dai Nippon Printing Co., Ltd. and Consolidated Subsidiaries
Years ended March 31, 2019 and 2018
Thousands of
U.S. dollars (Note 3)

Millions of yen

2019
Net sales (Note 19)¥

Cost of sales
Gross profit
Selling, general and administrative expenses (Note 11)
Operating income (Note 19)

2019

2018

1,401,506

2019

1,412,252$ 12,626,180

1,119,391

1,131,662

10,084,603

282,115

280,590

2,541,577

Valuation difference on available-for-sale securities

232,217234,218

2,092,045

Net deferred gains on hedges

49,89846,372449,532¥

Other income (expenses) (Note 12):Net income (loss)

27

Foreign currency translation adjustments(3,978 )1,912(35,838 )Remeasurements of defined benefit plans(1,404 )

4,115(12,649 )(414 )

2,613(3,729 )Share of other comprehensive income (loss) in associates
accounted for using the equity method(2,068 )(2,212 )(18,631 )

4,161

3,007

37,486

Foreign exchange translation gain (loss)

242(1,416 )2,181

Net gain on sales or disposal of property, plant and equipment

95

9,353

856

Parent company shareholders

Net gain on sales of investment securities

20,00845,687

180,252

Non-controlling shareholders

Loss on devaluation of investment securities(4,323 )(758 )(38,946 )Impairment loss on fixed assets (Note 14)(16,685 )(5,952 )(150,315 )Provisions for reserve for repairs(75,000 )(53,500 )(675,676 )(269 )(1,026 )(2,423 )(68,583 )(976 )(617,865 )(18,685 )

45,396(168,333 )

15,739136,928

187(8,432 )14,263

15,926

128,496(32,948 )29,470(296,829 )Net income (loss)
Net income attributable to non-controlling shareholders
Net income (loss) attributable to parent company shareholders
The accompanying notes are an integral part of these consolidated financial statements.

2,721
¥

(35,669 )

24,514

1,969¥

27,501$(321,343 )(3,746 )Total other comprehensive income (loss)
Comprehensive income (loss)(33,748 )26,934¥(36,694 )¥

56,404$(330,577 )¥(38,590 )¥

54,269$(347,658 )Attributable to:
1,896

17,081

2,135

Yen

U.S. dollars (Note 3)

2019

2019

2018

Per share information:
Net assets(936 )(296,829 )3Equity in earnings of affiliates

15,199$3

Interest expenses

Current

29,47018,44147,351

Deferred¥

18,291

5,841

Income taxes (Note 13):(32,948 )
2,047

5,256

Income (loss) before income taxes and non-controlling interests

¥

2019

2018

Other comprehensive income (loss)

Interest and dividends income

Other

Thousands of
U.S. dollars (Note 3)

Millions of yen¥

3,300.52¥

3,493.79$

29.73

Net income (loss)(118.22 )90.77(1.07 )

Diluted net income

-

90.71

-

(Notes)1. The Company consolidated its common shares at a ratio of two shares to one share on the effective date of October 1, 2017. Accordingly, Net assets per share, Net income (loss) per share andDiluted net income per share are calculated on the assumption that the consolidation of shares is conducted at April 1, 2017.
2. Diluted net income per share is not presented for the year ended March 31, 2019 because, although there are potential dilutive shares in the current fiscal year, the Company incurred a net loss
per share.
The accompanying notes are an integral part of these consolidated financial statements.

80

DNP Integrated Report 201981

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
Dai Nippon Printing Co., Ltd. and Consolidated Subsidiaries
Years ended March 31, 2019 and 2018

Millions of yen

Stockholders' equity
Number ofshares issued(in thousands)

Balance at April 1, 2017
Changes of items during the period
Net income attributable to parent company shareholders
Cash dividends paid
Change of scope of consolidation
Purchases of treasury stock
Disposal of treasury stock
Retirement of treasury stock
Changes in valuation difference on available-for-sale securities
Changes in deferred gains (losses) on hedges
Changes in foreign currency translation adjustments
Changes in remeasurements of defined benefit plans
Changes in share acquisition rights
Changes in non-controlling interests
Decrease due to a share consolidation
Total changes of items during the period
Balance at March 31, 2018
Changes of items during the period
Net loss attributable to parent company shareholders
Cash dividends paid
Changes of scope of equity method
Purchases of treasury stock
Disposal of treasury stock
Changes in valuation difference on available-for-sale securities
Changes in deferred gains (losses) on hedges
Changes in foreign currency translation adjustments
Changes in remeasurements of defined benefit plans
Changes in non-controlling interests
Total changes of items during the period
Balance at March 31, 2019

663,480

Commonstock¥

Accumulated other comprehensive income

Capitalsurplus114,464¥Retainedearnings

144,280¥

Valuationdifference on
available-for-salesecurities

Treasurystock,
at cost695,721¥(69,636)¥

149,575

Net deferredlosseson hedges¥(3)

Foreign currencytranslation
adjustments

Remeasurementsof defined
benefit plans

Non-controllinginterests

Total net assets

¥

¥

¥

¥

(2,220)1,683

47,422

1,081,286(15,000)---

27,501(19,511)30(0)(21,764)-(15,037)
1
21,764-

18,581
-

(1)
-

3,630
-

4,559

-

(324,240)(339,240)
324,240

-

(16)

-

-

-

-

-

-

1,528

27,501(19,511)30(15,037)
1
18,581
(1)
3,630
4,559
1,512

114,464(16)
144,264(13,744)
681,977

6,728(62,908)

18,581
168,156

(1)
(4)

3,630
1,410

4,559
6,242

1,528
48,95021,265
1,102,551

324,240

114,464

592
(90)
502
144,766(35,669)(19,318)(41)(0)(55,028)
626,949(16)
26
10(62,898)

1,917
1,917
170,073

3
3(1)(3,809)(3,809)(2,399)(1,033)(1,033)
5,209

1,509
1,509
50,459(35,669)(19,318)
(41)
(16)
618
1,917
3
(3,809)(1,033)
1,419(55,929)
1,046,622

¥

¥

¥

¥

¥

¥

¥

¥

¥

¥

Thousands of U.S. dollars (Note 3)

Stockholders' equity
Number ofshares issued(in thousands)

Balance at March 31, 2018
Changes of items during the period
Net loss attributable to parent company shareholders
Cash dividends paid
Changes of scope of equity method
Purchases of treasury stock
Disposal of treasury stock
Changes in valuation difference on available-for-sale securities
Changes in deferred gains (losses) on hedges
Changes in foreign currency translation adjustments
Changes in remeasurements of defined benefit plans
Changes in non-controlling interests
Total changes of items during the period
Balance at March 31, 2019324,240
324,240

Commonstock$

1,031,207$

1,031,207

Accumulated other comprehensive income

Capitalsurplus$1,299,676

$

5,333
(811)
4,522
1,304,198

Treasurystock,
at costRetainedearnings$

6,143,937$(321,343)(174,036)(369)(0)(495,748)
5,648,189$(566,739)

$

(143)
234
91
(566,648)

Valuationdifference on
available-for-salesecurities$

1,514,919$

17,27017,2701,532,189

Net deferredlosseson hedges

$

(36)

$

27
27
(9)

Foreign currencytranslation
adjustments

Remeasurementsof defined
benefit plans

Non-controllinginterests

Total net assets$

12,703$56,234$440,991$

9,932,892$(34,316)(34,316)(21,613)$(9,306)(9,306)46,928$13,595
13,595454,586$(321,343)(174,036)
(369)
(143)
5,567
17,27027(34,316)(9,306)
12,784(503,865)
9,429,027

Note: The Company consolidated its common stock at the ratio of two shares to one share on the effective date of October 1, 2017.
Accordingly, the number of shares issued is presented on the assumption that the consolidation was conducted at April 1, 2017.
The accompanying notes are an integral part of these consolidated financial statements.

82

DNP Integrated Report 201983

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

CONSOLIDATED STATEMENTS OF CASH FLOWS
Dai Nippon Printing Co., Ltd. and Consolidated Subsidiaries
Years ended March 31, 2019 and 2018
Thousands of
U.S. dollars (Note 3)

Millions of yen

2019

2019

2018

2019

Cash flows from operating activities:
Income (loss) before income taxes and non-controlling interests

Thousands of
U.S. dollars (Note 3)

Millions of yen

2019

2018

Cash flows from financing activities:¥(18,685 )¥

45,396$(168,333 )Adjustments to reconcile income (loss) before income taxes
and non-controlling interests to net cash provided by operating activities:

Net increase (decrease) in short-term bank loans(2,283 )2,258(20,568 )Proceeds from long-term debt

2,500

2,690

22,523

Repayments of long-term debt

(4,143 )(4,077 )(37,324 )Depreciation

59,08061,070532,252

Proceeds from stock issuance to non-controlling shareholders

75

-

676

Impairment loss on fixed assets

16,685

5,952

150,315

Proceeds from issuance of debentures

2,443

1,225

22,009Allowance for doubtful receivables
Net defined benefit asset(389 )(302 )(3,505 )Payments for redemption of debentures(2,290 )(240 )(20,631 )(5,682 )(5,781 )(51,189 )Interest paid

(2,066 )(2,213 )(18,613 )Net defined benefit liability(292 )

2,005(2,631 )Dividends paid

(19,324 )(19,524 )(174,090 )Equity in earnings of affiliates(4,161 )(3,007 )(37,486 )Dividends paid to non-controlling shareholders(459 )(393 )(4,135 )Amortization of goodwill

1,752

2,306

15,784

Payments for purchases of treasury stocks(18 )(15,168 )(162 )

Interest and dividends income(5,256 )(5,841 )(47,351 )Interest expenses

2,068

2,212

18,631

Payments for purchase of stock in subsidiaries not resulting
in a change in the scope of consolidation(90 )(226 )(811 )Net loss (gain) on sales of investment securities(20,008 )(45,687 )(180,252 )(6,542 )(7,103 )(58,937 )Loss on devaluation of investment securities

4,323

758

38,946(32,197 )(42,771 )(290,063 )(67 )(9,302 )(604 )(1,031 )1,428(9,288 )75,00053,500675,676

Net increase (decrease) in cash and cash equivalents(111,165 )

30,189(1,001,487 )Cash and cash equivalents at beginning of year

244,937

214,564

2,206,640

Trade receivables

2,099(17,606 )18,910Inventories

1,998(875 )

18,000

Increase in cash and cash equivalents
resulting from merger with unconsolidated subsidiaries

-

184

-

Trade payables(1,912 )5,899(17,225 )Cash and cash equivalents at end of year (Note 4)

Net loss (gain) on sale or disposal of property, plant and equipment
Provisions for reserve for repairs
Changes in assets and liabilities

2,323

6,050

20,927

108,876

96,747980,865

Payments for repair costs(22,750 )(35,056 )(204,955 )Extra retirement payments(767 )(49 )(6,910 )Payments of income taxes(16,387 )(13,185 )(147,631 )

68,97248,457621,369

Other assets and liabilities
Sub-total

Net cash provided by operating activities

Other financing activities
Net cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents¥

133,772¥

244,937$

1,205,153

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

Cash flows from investing activities:
Net decrease (increase) in time deposits(136,981 )(1,547 )(1,234,063 )Payments for purchases of property, plant and equipment(37,579 )(32,501 )(338,550 )Proceeds from sales of property, plant and equipment

6,942

19,64462,541

Payments for purchases of investment securities(2,405 )(1,234 )(21,667 )Proceeds from sales of investment securities

26,786

54,617

241,315

Payments for purchases of intangible assets(9,800 )(10,483 )(88,288 )Payments for sales of subsidiaries' shares, resulting in consolidation scope changeInterest and dividends received
Other investing activities
Net cash provided by (used in) investing activities

84-(855 )-

10,516

8,256

94,739(4,388 )(12,822 )(39,532 )(146,909 )

23,075(1,323,505 )DNP Integrated Report 201985

Notes To Consolidated Financial Statements

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

Dai Nippon Printing Co., Ltd. and Consolidated Subsidiaries
March 31, 2019 and 2018

1. Basis of Presenting the Consolidated Financial Statements
Dai Nippon Printing Co., Ltd. (hereinafter referred to as the "Company") and its domestic subsidiaries maintain their books of account andprepare their financial statements in conformity with accounting principles and practices generally accepted in Japan ("Japanese GA AP"), andits foreign subsidiaries in conformity with the Company ʼs group accounting policies based on International Financial Reporting Standards("IFRS") or accounting principles generally accepted in the United States of America ("US GA AP").
The accompanying consolidated financial statements have been compiled from the consolidated financial statements filed with the Financial
Services Agency of Japan as required by the Financial Instruments and Exchange Act of Japan. Certain reclassifications of accounts andmodifications have been made in the accompanying consolidated financial statements to facilitate understanding by readers outside Japan.
Certain reclassifications have also been made in the 2018 financial statements to conform with current year presentations. In addition, thenotes to the consolidated financial statements include additional information which is not required for disclosure under Japanese GA AP.
2. Significant Accounting Policies
Consolidation
The accompanying consolidated financial statements include the accounts of the Company and its significant majority-owned subsidiaries. All
significant intercompany accounts and intercompany transactions have been eliminated in consolidation.
Consolidated financial statements include the accounts of the Company and 107 consolidated subsidiaries. Some subsidiaries areconsolidated with their fiscal year ends that differ from that of the Company. Significant transactions that took place between their fiscal year
ends and the Company ʼs fiscal year end are reflected in the consolidated financial statements.
Investments in non-consolidated subsidiaries are stated at cost and, for valuation of such investments, the equity method has not been
applied since these investments are considered immaterial in the aggregate. However, investments are devalued if the decline in value isjudged to be other than temporary.
Investments in 20% to 50% associated companies are principally accounted for by the equity method.
The differences between costs and underlying net assets at the date of investment in consolidated subsidiaries are included in other assets
and are amortized over a period mainly for five years.
Translation of foreign currency accounts
Monetary assets and liabilities denominated in foreign currencies of the Company and its domestic subsidiaries are translated into Japanese
yen at the exchange rates at the balance sheet date. Revenues and expenses denominated in foreign currencies are translated at the exchange
rates prevailing during the year. The resulting translation gains (or losses) are included in other income (or expenses).
The translation of foreign currency financial statements of foreign consolidated subsidiaries into Japanese yen has been made for consolidation
purposes in accordance with the translation method prescribed in the accounting standard for foreign currency transactions. The balance sheet
accounts of the foreign consolidated subsidiaries are translated at the exchange rates in effect at the balance sheet date, except for common
stock and capital surplus, which are translated at historical rates. Revenue and expense accounts are translated at the average exchange rates
prevailing during the year. The resulting translation adjustments are presented as "foreign currency translation adjustments" and "non-controllinginterests" as reported in a separate component of accumulated other comprehensive income in the consolidated balance sheets.
Cash and cash equivalents
Cash and cash equivalents include all highly liquid investments, generally with original maturities of three months or less, that are readily convertible
to known amounts of cash and are so near maturities that they present insignificant risk of changes in value because of changes in interest rates.
Inventories
Inventories are stated at cost which is determined substantially by the average method being written-down to reflect the decline of profitability.
Marketable securities and investment securities
Debt securities that are held to maturity with positive intent and ability ("held-to-maturity debt securities") are stated at amortized cost.
Available-for-sale securities with available fair market values are stated at fair value. Unrealized gains and losses on available-for-salesecurities, net of applicable taxes, are reported in a separate component of accumulated other comprehensive income in the consolidatedbalance sheets.
Non-marketable securities are stated at cost determined by the average method. For other than temporary declines in fair value, investment
securities are reduced to net realizable value by a charge to income.
Property, plant and equipment and depreciation
The Company and its domestic consolidated subsidiaries mainly use the declining-balance method. However, depreciation of buildings (excluding
facilities attached to buildings) acquired on or after April 1, 1998 and of facilities attached to buildings and structures acquired on or after
April 1, 2016 are computed by the straight-line method.
Assets with an acquisition cost of ¥100,000 ($901) or more but less than ¥200,000 ($1,802) are depreciated equally over three years.
Foreign consolidated subsidiaries mainly use the straight-line method.
The estimated useful lives are summarized as follows:
Buildings and structures
Machinery and equipment

2 to 60 years
2 to 17 years

Leased assets
Lease assets with transfer of ownership are depreciated using the same depreciation method applied to owned fixed assets.
Finance leases which do not transfer ownership are capitalized. Depreciation for leased assets is computed on a straight-line basis over thelease period with a residual value of zero.

86

Intangible assets
Intangible assets included in other assets are carried at cost less accumulated amortization calculated by the straight-line method over theirestimated useful lives. Software for internal use included in intangible assets are amortized by the straight-line method over five years.
Impairment loss on fixed assets
The Company and its subsidiaries review fixed assets for impairment whenever events or changes in circumstance indicate the carrying
amount of an asset or asset group may not be recoverable. An impairment loss would be recognized if the carrying amount of an asset or asset
group exceeds the sum of the undiscounted future cash flows expected to result from the continued use and eventual disposition of the asset
or asset group. The impairment loss would be measured as the amount by which the carrying amount of the asset exceeds its recoverable
amount, which is the higher of the discounted cash flows from the continued use and eventual disposition of the asset or the net selling priceat disposition.
Employeesʼ retirement benefits
The Company and domestic significant consolidated subsidiaries applied the accounting standard for employees ʼ retirement benefits. Under
the accounting standard, accrued pension and liability for employees ʼ retirement benefits has been provided based on the estimated amounts
of projected pension and severance obligation and fair value of plan assets at the end of the fiscal year. Benefit formula basis is applied forthe method of attributing expected retirement benefits to periods. Prior service cost is being amortized as incurred by the straight-line method
over the period within the average remaining service periods (primarily 6 years) of the eligible employees. Actuarial gains and losses havebeen amortized from the following fiscal year by the declining-balance method over the periods within the average remaining service periods(primarily 9 years) of the eligible employees.
Research and development expenses
Research and development expenses are charged to income as incurred.
Income taxes
The asset and liability approach is used to recognize deferred tax assets and liabilities for the expected future tax consequences of temporary
differences between the carrying amounts and the tax bases of assets and liabilities. Deferred taxes are measured by applying currently
enacted tax laws to the temporary differences.
Derivatives and hedging activities
The Company and certain consolidated subsidiaries use derivative financial instruments ("derivatives") for foreign currency forward contracts,
interest rate swaps and currency swaps to manage the risk arising from fluctuation in foreign currency exchange rates and interest rates. The
Company and its subsidiaries do not enter into derivatives contracts for speculative purposes.
Derivatives are carried at fair value and changes in fair value are recognized as gains or losses, unless the derivatives are used for hedging purposes.
If derivatives meet certain hedging criteria, recognition of gains or losses resulting from changes in the fair value of derivatives is deferred
until the related gains or losses on hedged items are recognized.
In cases where foreign currency forward contracts or currency swap contracts meet certain hedging criteria, the hedged items are stated by
the contracted rates ("alternative method"). In addition, if interest rate swap contracts meet certain hedging criteria, the net amount to be paidor received under the interest rate swap contracts is added to or deducted from interest on the assets or liabilities for which the interest rate
swap contracts were executed ("exceptional accrual method").
Per share information
Net assets per share were computed based on the number of shares outstanding after deducting treasury stock at March 31, 2019 and 2018,
respectively.
Net income (loss) per share was computed based on the average number of shares of common stock outstanding after deducting treasury
stocks during each year. Necessary adjustments were made on the net income or the number of shares for diluted net income per share inorder to reflect dilutive effects.
Reserve for repairs(Basis for recording significant allowances)
The reserve for repairs is provided based on a rational estimate of the amount of repair costs that will be required in the future to repair
defects for certain products.
(Changes in accounting estimates)
During the current fiscal year, the Company conducted new scientific testing and analysis because additional defects had been identified forthese products that were outside the range of products covered by reserves. As a result, the Company decided to provide the reserve in arational estimate of the maximum amount of future expected repair costs considering that the occurrence of these defects was related to newfactors for the fiscal year ended March 31, 2019.
As a result, loss before income taxes and non-controlling interests increased by ¥75,000 million ($675,676 thousand) for the fiscal year
ended March 31, 2019.
Changes in presentation methods(Changes from applying the "Partial Amendments to Accounting Standard for Tax Effect Accounting")
The Company has applied the "Partial Amendments to Accounting Standard for Tax Effect Accounting" (Accounting Standards Board of Japan("ASBJ") Statement No. 28, February 16, 2018 (hereinafter referred to as the "Statement No. 28")) from the beginning of the current fiscal year.
As a result, deferred tax assets under current assets decreased by ¥19,714 million and deferred tax assets under other assets increased by¥3,979 million as of March 31, 2018. In addition, due to the effect of offsetting deferred tax assets and deferred tax liabilities by the same
taxable entity, deferred tax liabilities in long-term liabilities decreased by ¥15,735 million as of March 31, 2018.
Certain information is added to Note 13. Income Taxes as described in note 8 (excluding total amount of valuation allowance) and note 9 of
explanatory notes to the "Accounting Standard for Tax Effect Accounting" as prescribed in Paragraphs 3 through 5 of the Statement No. 28.
However, information for the year ended March 31, 2018 is not presented in accordance with the transitional treatment prescribed in
Paragraph 7 of the Statement No. 28.

DNP Integrated Report 201987

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

3. Basis of Translating Financial Statements
The consolidated financial statements are expressed in Japanese yen in accordance with Japanese GA AP. The Japanese yen amounts havebeen translated into U.S. dollar amounts, solely for the convenience of the readers, at the rate of ¥111=U.S.$1, the approximate exchange
rate on the Tokyo Foreign Exchange Market at March 31, 2019. Such translations should not be construed as representations that theJapanese yen at that or any other rate could be converted into U.S. dollars.

The proceeds from sales of available-for-sale securities for the years ended March 31, 2019 and 2018 were ¥26,229 million ($236,297
thousand) and ¥53,180 million, respectively. The gross realized gains on these sales for the years ended March 31, 2019 and 2018 were¥18,026 million ($162,396 thousand) and ¥44,964 million, respectively, and the gross realized losses on these sales for the years ended
March 31, 2019 and 2018 were ¥42 million ($378 thousand) and ¥68 million, respectively.
The redemption schedules for securities with maturities at March 31, 2019 and 2018 were as follows:

4. Cash and Cash Equivalents

Millions of yen

Cash and cash equivalents as of March 31, 2019 and 2018 were comprised of the following:
Millions of yen

2019
Cash and deposits (excluding time deposits with a maturity over three months)¥

Due in one
year or lessMarch 31, 2019
Thousands of
U.S. dollars (Note 3)

2019

2018

133,772¥

244,937$

Corporate bonds¥

Over five years

¥

¥

30

¥

30

202

10,000

Others¥

1,205,153-

Due after one year
through five years

10,0005. Marketable Securities and Investment Securities

¥

202

-

Thousands of U.S.dollars (Note 3)

The carrying amount and aggregate fair value of marketable and investment securities classified as held-to-maturity debt securities as ofMarch 31, 2019 and 2018 were as follows:

Corporate bonds

Millions of yen

March 31, 2019

Carrying amount

Others¥202

Fair value
¥

¥

$
$

(1)

-

Due after one year
through five years

Over five years

$

$

1,820

90,090

OthersDifference201

Due in one
year or lessMarch 31, 2019

90,090

270

$

1,820

$

270

Millions of yen
Thousands of U.S. dollars (Note 3)

March 31, 2019

Carrying amount

Others$

1,820

Fair value
$

1,811

$

Due in one
year or lessMarch 31, 2018

Difference(9)

Corporate bonds¥¥

Millions of yen

Carrying amount

Others¥200

Fair value¥

10,000200¥

March 31, 2019

Acquisition cost

Unrealized gains

Unrealized losses

Stocks¥¥¥10,106

OthersTotal¥

105,921

1,496

11
¥

244,318

80

¥

200

¥

80

6. Inventories
Inventories at March 31, 2019 and 2018 consisted of the following:

1,500

338,626
10,113¥

348,739

Thousands of
U.S. dollars (Note 3)

Millions of yen

Fair value
¥

4
¥

¥

200

0

Millions of yen

244,307¥

Difference

The acquisition cost and aggregate fair value of marketable and investment securities classified as available-for-sale securities including
those with no fair value as of March 31, 2019 and 2018 were as follows:

95,815

Over five years

10,000

OthersMarch 31, 2018-

Due after one year
through five years

2019
Merchandise and finished products¥

79,80930,075Work in process¥

133,072

82,698$208,901

23,178¥

137,548

719,000
270,946

31,672

23,188Raw materials and supplies

2019

2018
¥

$

1,198,847

Thousands of U.S. dollars (Note 3)

March 31, 2019

Acquisition cost

Unrealized gains

Unrealized losses

Stocks$863,198$

2,200,964$

13,477$954,243$

2,201,063$

13,51391,045

Others
Total

99

Fair value$

3,050,685$

3,141,793

36

91,108Millions of yen

March 31, 2018

Acquisition cost

Unrealized gains

Unrealized losses

Stocks¥¥¥

10,157

OthersTotal

88105,321¥

115,478

241,99915¥

242,0142,736

Fair value
¥

¥

2,736

344,584
10,172¥354,756

DNP Integrated Report 201989

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

7. Short-term Bank Loans and Long-term Debt

8. Retirement Benefits

Short-term bank loans at March 31, 2019 and 2018 were represented by bank loans and bank overdrafts, etc., bearing interest at an averagerate of 0.47% per annum for 2019 and 0.46% per annum for 2018.
Long-term debt at March 31, 2019 and 2018 consisted of the following:Thousands of
U.S. dollars (Note 3)

Millions of yen

2019

2019

2018

The Company and its subsidiaries have several retirement plans covering all of their employees, i.e. defined benefit corporate pension plan, agovernmental welfare contributory pension plan, lump-sum retirement plan and defined contribution pension plan. Upon retirement or
termination of employment for reasons other than the cause of dismissal, employees are entitled to lump-sum payments based on the current
rate of pay, length of services and accumulated number of points determined based on the employment services.
Under the Defined Benefit Pension Plan Law, the Company has established new defined benefit pension plans on March 1, 2005 underwhich most of the retirement benefit liability of the Company and its subsidiaries is covered by the employees ʼ pension fund.
The reconciliation of beginning and ending balance of the projected benefit obligation at March 31, 2019 and 2018 were as follows:

Unsecured debentures
0.180~0.290% due 2024

¥

2,500

¥

-

$

22,5230.160~0.180% due 2023

1,050

1,050

9,459

0.100~0.376% due 2022

3,570

3,570

32,162

Change in projected benefit obligation:

0.150~1.358% due 2021

52,49052,490472,883

Balance at the beginning of year

0.100~1.705% due 2020

51,49051,490463,874

Service cost

13,6910.150~0.460% due 2019

-

2,290

-

Interest cost
Actuarial gain/loss

2,119

Mortgage loans, maturing 2020~2023
Unsecured loans, maturing 2020~2024¥

10,658

11,15296,018125,310

1,116,009

Other(488,486)

Balance at the end of year

69,655(6,583)¥

118,727$

2019
Finance lease obligations¥

10,954¥(5,324)Current portion of lease obligations
¥

5,630

2019

15,337

$

¥

9,400

98,685(47,964)(5,937)$50,721

The assets pledged as collateral for the Company and its consolidated subsidiaries ʼ indebtedness, such as property, plant and equipment
and other assets, were ¥7,275 million ($65,541 thousand) and ¥7,542 million at March 31, 2019 and 2018, respectively.
Interest rates on mortgage loans ranged from 0.15% to 0.83% per annum for 2019 and from 0.15% to 1.98% per annum for 2018, whileinterest rates on unsecured loans ranged from 0.40% to 0.98% per annum for 2019 and from 0.36% to 1.15% per annum for 2018.
The aggregate annual maturities of long-term debt after March 31, 2019 were as follows:
Years ending March 31

2020

Thousands of
U.S. dollars (Note 3)

Millions of yen¥

54,222$58,452526,596

2022

6,019

54,225

2023

2,034

18,324

2024

3,150

28,378--¥123,877$

1,116,009

The aggregate annual maturities of finance lease obligations after March 31, 2019 were as follows:
Years ending March 31

2020

Millions of yen¥

Thousands of
U.S. dollars (Note 3)

$

1,980

17,838

2022

1,135

10,225

2023

833

7,505

2025 and thereafter
¥

598

5,387

1,084

9,766

10,954$

2,386,685

1,252

1,259

11,279

(686)

5,996

(6,180)(9,897)(8,453)(89,162)-(1,241)

-

(353)

(86)

(3,180)268,929¥

264,922$2,422,784

Thousands of
U.S. dollars (Note 3)

2019

Change in plan assets:
Balance at the beginning of year

¥

2019

2018

297,544¥

275,722$2,680,577

Expected return on plan assets

7,590

7,050

Actuarial gain/loss(637)

12,389(5,739)Contributions by the employer

9,410

9,442

84,775

Benefits paid

(8,216)(7,068)(74,018)

(115)

9

Other
Balance at the end of year¥

305,576¥

297,544

68,378(1,036)$2,752,937

The reconciliation of projected benefit obligation and plan assets to net defined benefit liability and asset recognized in the consolidatedbalance sheets as of March 31, 2019 and 2018 were as follows:
Thousands of
U.S. dollars (Note 3)

Millions of yen

2019
Funded projected benefit obligation¥

Plan assets
Unfunded projected benefit obligation
Net amount of liabilities and assets recognized in consolidated balance sheets¥

234,403

2019

2018
¥

230,351$

2,111,739(305,576)(297,544)(2,752,937)(71,173)(67,193)(641,198)

34,526

34,571(36,647)¥(32,622)

311,045$(330,153)

Net defined benefit liability

34,73435,217

312,919

Net defined benefit asset(71,381)(67,839)(643,072)

Net amount of liabilities and assets recognized in consolidated balance sheets¥(36,647)¥(32,622)$(330,153)

47,964

2021

2024

90

5,324

$

123,342Millions of yen

488,4862021

2025 and thereafter

253,782

The reconciliation of beginning and ending balance of the plan assets at March 31, 2019 and 2018 were as follows:

Thousands of
U.S. dollars (Note 3)

2018

¥

13,665

Change of scope of consolidation
¥

2019

2018

264,922627,523

Finance lease obligations at March 31, 2019 and 2018 which are included in other long-term liabilities consisted of the following:
Millions of yen

2019¥

Benefits paid

123,877(54,222)

Current portion of long-term debt

19,0903,268

Thousands of
U.S. dollars (Note 3)

Millions of yen

98,685DNP Integrated Report 201991

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

The components of net periodic benefit costs for the years ended March 31, 2019 and 2018 were as follows:
Thousands of
U.S. dollars (Note 3)

Millions of yen

2019Service cost¥¥

13,645

1,252Interest cost

2019

2018

13,671$

123,162
11,2791,259

Expected return on plan assets(7,590)(7,050)(68,378)

Actuarial gain/loss(2,535)(1,344)(22,838)

476

580

4,288

Amortization of prior sevice cost
Net periodic benefit costs of the defined benefit plan

¥

5,274

¥

7,090

$

47,513(c) Treasury stock and treasury stock acquisition rights
The Companies Act also provides for companies to purchase treasury stock and dispose of such treasury stock by resolution of the Boardof Directors. The amount of treasury stock purchased cannot exceed the amount available for distribution to the stockholders which isdetermined by specific formula.
Under the Companies Act, stock acquisition rights are presented as a separate component of net assets.
The Companies Act also provides that companies can purchase both treasury stock acquisition rights and treasury stock. Such treasury
stock acquisition rights are presented as a separate component of net assets or deducted directly from stock acquisition rights. At present,
the Company has not issued such stock acquisition rights.
10. Accounts with Non-consolidated Subsidiaries and Associated Companies
Account balances with non-consolidated subsidiaries and associated companies as of March 31, 2019 and 2018 were summarized as follows:
Thousands of
U.S. dollars (Note 3)

Millions of yen

Remeasurements of defined benefit plans, before income-tax effect, recorded under accumulated other comprehensive income at March
31, 2019 and 2018 consisted of:Thousands of
U.S. dollars (Note 3)

Millions of yen

2019
Unrecognized actuarial gain/loss

¥

Total

7,064

¥

(908)

Unrecognized prior service cost
¥

2019

2018

6,156

9,398

$

¥

8,013

63,639(8,180)(1,385)$55,459The major categories of plan assets as of March 31, 2019 and 2018 were as follows:
2019

2018

Bonds

20%

20%

Stocks39%

40%

Alternative

36%

33%

Other

5%

7%

Total

100%

100%

2019
Trade receivables¥

Discount rateLong-term expected rate of return on plan assets

0.6%
mainly 2.5%

2018
0.7%
mainly 2.5%

Japanese companies are subject to the Companies Act of Japan (the "Companies Act"). The significant provisions in the Companies Act that
affect financial and accounting matters are summarized below;(a) Dividends
Under the Companies Act, companies can pay dividends at any time during the fiscal year in addition to the year-end dividend upon
resolution at the stockholders meeting. For companies that meet certain criteria such as; (1) having the Board of Directors, (2) having
independent auditors, (3) having the Board of Corporate Auditors, and (4) the term of service of the directors is prescribed as one year
rather than two years of normal term by its articles of incorporation, the Board of Directors of such company may declare dividends (except
for dividends in kind) at any time during the fiscal year if the company has prescribed so in its articles of incorporation. The Company
meets all the above criteria. However, its articles of incorporation have not stipulated that the Board of Directors may declare dividends at
any time during the fiscal year.
The Companies Act permits companies to distribute dividends-in-kind (non-cash assets) to stockholders subject to a certain limitation
and additional requirements.
Semiannual interim dividends may also be paid once a year upon resolution by the Board of Directors if the articles of incorporation of
the company so stipulate. The Companies Act provides certain limitations on the amounts available for dividends or the purchase oftreasury stock. The limitation is defined as the amount available for distribution to the stockholders, but the amount of net assets after
dividends must be maintained at no less than ¥3 million.
Cash dividends of ¥32.00 ($0.29) per share, aggregating ¥9,659 million ($87,018 thousand), were approved at the general stockholders ʼ
meeting held in June 27, 2019 with respect to the year ended March 31, 2019.
(b) Increases/decreases and transfer of common stock, reserve and surplus
The Companies Act requires that an amount equal to 10% of dividends must be appropriated as a legal reserve (a component of retained
earnings) or as additional paid-in capital (a component of capital surplus) depending on the equity account charged upon the payment ofsuch dividends until the total of aggregate amount of legal reserve and additional paid-in capital equals 25% of the common stock. Under
the Companies Act, the total amount of additional paid-in capital and legal reserve may be reversed without limitation. The Companies Act
also provides that common stock, legal reserve, additional paid-in capital, other capital surplus and retained earnings can be transferredamong the accounts under certain conditions upon resolution of the stockholders.

5,438

$

62,000

289

225

2,604

Investment securities

54,16456,458487,964

30

150

270

Long-term loan receivables
Other investments

6,074

2,308

54,721

Trade payables

5,028

5,310

45,297

Accrued expenses

269

254

2,423

Other current liabilities

943

1,046

8,495

Other long-term liabilities

10

10

90

11. Selling, General and Administrative Expenses
Selling, general and administrative expenses for the years ended March 31, 2019 and 2018 consisted of the following:Thousands of
U.S. dollars (Note 3)

Millions of yen

2019

9. Net Assets

92¥

Other current assets

Assumptions used for the years ended March 31, 2019 and 2018 were set forth as follows:
2019

2019

2018

6,882

Salaries and allowances

¥

2019

2018

67,790¥66,627$610,721

6,623

6,078

59,667

578

1,441

5,207

Depreciation

14,375

15,452

129,505

Research and development expenses

33,78733,210304,387

Accrued bonuses
Provision for retirement benefits

109,064

Other¥

232,217982,558

111,410¥234,218$

2,092,045

12. Other Income (Expenses)
The following types of income (expenses) from non-consolidated subsidiaries and associated companies were included in other income.
Thousands of
U.S. dollars (Note 3)

Millions of yen

2019Interest and dividends income

¥

2019

2018
11

¥

16

$

99

Rent income on facilities

99

125

892

Rent expense

(29)

(28)

(261)

13. Income Taxes
The Company and its domestic consolidated subsidiaries are subject to a number of different taxes based on income, which, in the aggregate,
resulted in a normal effective statutory tax rate of approximately 30.6% and 30.9% for the years ended March 31, 2019 and 2018, respectively.
The actual effective tax rate reflected in the accompanying consolidated statements of income differs from the normal effective statutory
tax rate primarily due to the effect of permanently non-deductible expenses, current operating losses and different tax rates applicable toforeign subsidiaries, etc.
No reconciliation of the differences between the normal effective statutory tax rate and the actual effective tax rate for the year ended
March 31, 2019 was shown because loss before income taxes and non-controlling interests was recorded, although the difference for 2018
was shown as follows.

DNP Integrated Report 201993

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

Thousands of U.S. dollars (Note 3)

2019

2018

Normal effective statutory tax rate
Expenses not deductible for income tax purposes

Deferredtax assets

-

0.8

2020

1.4

2021

68,955(68,883)72

2022

12,171(11,595)

576$

47,991$(44,928)$

3,063

Change in valuation allowance-

0.8

Equity in earnings of affiliates

-

(2.0)

2023

23,063(22,991)

72

14,883(14,829)54

Per capita inhabitantsʼ taxes

-

1.3

2024

Tax credit

-

(0.8)

2025 and thereafter

1.3

Total

Tax rate differences in consolidated subsidiaries

-

Other

-

1.4

-

35.1%

Actual effective tax rateSignificant components of deferred tax assets and liabilities at March 31, 2019 and 2018 were as follows :Thousands of
U.S. dollars (Note 3)

Millions of yen

2019

2019

2018

Deferred tax assets:
Tax loss carryforwards¥

31,057¥

26,417$279,793

Repair reserve provisions

27,348Net defined benefit liability

13,50013,426

121,622

Impairment loss on fixed assets

13,35810,653

120,342

Accrued bonuses

5,526

5,200

49,784

Loss on devaluation of investment securities

2,115

2,277

19,054

Loss on write-down of inventories

1,241

1,221

11,180246,378

11,360

Excess provision for doubtful receivables

1,028

1,183

9,261

Other

14,51016,843130,721

109,683

88,580988,135

Valuation allowance for deductible temporary difference(36,128)-(325,477)

Valuation allowance for tax loss carryforwards(30,497)-(274,748)

Total deferred tax assets(66,625)

Total valuation allowance
Total(600,225)(47,568)¥

43,058¥41,012$387,910¥(73,320)¥(71,890)$(660,541)

Deferred tax liabilities:
Unrealized gain on available-for-sale securities(21,843)(20,759)(196,784)

Undistributed earnings of subsidiaries

(720)

(795)

(6,486)

Reserve for special depreciation

(33)

(51)

(297)

(1,373)(1,586)(12,369)

Net defined benefit asset

Other
Total
Net deferred tax assets (liabilities):¥(97,289)¥(95,081)$(876,477)¥(54,231)¥(54,069)$(488,567)

Millions of yen

Tax losscarryforwad
¥

2020

5,327

Valuation
allowance
¥

7,654

2021

(4,987)

Deferredtax assets¥

340(7,646)

8

One year or less

2019

2018

5,284

¥

11,316¥

16,600

5,663

$

¥

17,82247,604
101,946

12,159$149,550

16. Financial Instruments
1. Management policy
The Company and its consolidated subsidiaries manage fund surpluses through financial assets that have high levels of safety, and raise funds
through bank loans and bond issuances. The Company and its subsidiaries also utilize derivative financial instruments to hedge the risk of
exchange rate and interest rate fluctuations and do not enter into derivatives for trading or speculative purposes.
The trade receivables are exposed to credit risk of customers and the Company and its subsidiaries minimize the credit risk in accordancewith internal customer credit management rules.
Long-term investments are mainly equity securities. Listed stocks are stated at fair value based on market prices quarterly.
2. Fair value of financial instruments
Fair value and differences compared to the carrying amounts reported in the consolidated balance sheets as of March 31, 2019 and 2018 were as follows:
Millions of yen

March 31, 2019

Carrying amounts(1) Cash and deposits¥

273,047

Fair value¥

351,450(2) Trade receivables

273,047

Differences¥

351,450

353,502-392,824

39,322

Assets¥977,999¥

1,017,321¥(1) Trade payables¥

246,138¥

246,138¥

39,322-(2) Short-term bank loans

42,47442,474-(3) Long-term debts

123,878

125,219

1,341

Liabilities¥

412,490¥

413,831

¥

1,341

¥

(56)

¥

(56)

¥

-

¥

-

Derivatives* 1[1] Hedge accounting is not applied

8[2] Hedge accounting is applied

2024

1,652

(1,646)

6(12,379)¥

More than one year64

(30,497)2019

Future lease payments:(1,287)¥

5,045

Thousands of
U.S. dollars (Note 3)

Millions of yen(2,552)

12,513

1,208$

Operating Leases
The amounts of outstanding future payments under non-cancelable operating leases as of March 31, 2019 and 2018 were also summarized as follows:

1,351

31,057(274,748)

15. Leases

2,560

¥

(111,522)$

The Company and its consolidated subsidiaries reviewed the fixed assets for impairment for the years ended March 31, 2019. Fixed assets were,in principle, grouped at the business unit for impairment testing purposes. Idle assets and assets for rent were grouped in each asset. Loss on
impairment of fixed assets for the years ended March 31, 2019 was recognized in the amount of ¥16,685 million ($150,315 thousand), which iscomprised of buildings and structures of ¥6,301 million ($56,766 thousand), machinery of ¥4,270 million ($38,468 thousand), land of ¥2,919
million ($26,297 thousand), software of ¥2,345 million ($21,126 thousand) and others of ¥850 million ($7,658 thousand).

2023

Total

279,793

14. Impairment Loss on Fixed Assets

2022

2025 and thereafter

112,730$(3) Short-term and long-term investment securities

The amounts by the expiration period of tax loss carryforwards, related valuation allowance and the resulting deferred tax assets as ofMarch 31, 2019 were as follows:

94

Valuation
allowance

30.9%

-

Amortization of consolidation goodwill

Tax losscarryforwad

-

Total

(15)
¥

(71)

(15)
¥

(71)

-

134
¥

560

DNP Integrated Report 201995

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

Thousands of U.S.dollars (Note 3)

March 31, 2019

Carrying amounts(1) Cash and deposits$

2,459,883

Fair value$

3,166,216(2) Trade receivables

2,459,883

Differences$

3,538,955

354,252$

8,810,802$

9,165,054$(1) Trade payables$

2,217,459$

2,217,459$

382,649

Liabilities

354,252-

1,128,099

12,081$

3,716,126$

3,728,207

$

$

(505)

$

(505)

$

12,081

Derivatives* 1[1] Hedge accounting is not applied(135)[2] Hedge accounting is applied
Total

$

(640)

-

(135)
$

(640)

$

-

Millions of yen

March 31, 2018

Carrying amounts(1) Cash and deposits¥(2) Trade receivables

247,382

Fair value¥354,241(3) Short-term and long-term investment securities

247,282¥-

392,099¥962,235¥

993,622¥

31,487(1) Trade payables¥

248,993¥248,993¥-(2) Short-term bank loans

44,79544,795-(3) Long-term debts

125,310

127,9632,653¥

419,098¥

421,751

¥

2,653

¥

501

¥

501

¥

-

Derivatives* 1[1] Hedge accounting is not applied[2] Hedge accounting is applied
Total

(20)
¥

481

(20)
¥

481

The above are not included in "(3) Marketable and investment securities" because there is no market value and it is extremely difficult tomeasure the fair value.
17. Derivative Financial Instruments
Nature of derivative financial instruments:
The Company and certain consolidated subsidiaries enter into derivatives for foreign currency forward contracts and interest rate swaps tomanage the risk arising from fluctuation in foreign currency exchange rates and interest rates. Derivatives related to currency are utilized tohedge foreign exchange risks associated with certain accounts receivable, accounts payable and other debts, including forecasted
transactions, denominated in foreign currencies. Interest rate swaps are utilized to hedge interest rate risks on interest-bearing debts. The
Company and its subsidiaries do not hold derivatives for speculative purposes.
Derivatives are subject to market risks and credit risks. Because the counterparties to those derivatives are limited to major international
financial institutions, the Company and its subsidiaries do not anticipate any losses arising from credit risks. The Accounting Department
controls and executes derivatives based on the internal policies of the Company.

Derivative transactions to which the Company and its subsidiaries did not apply hedge accounting¥-

Millions of yen

March 31, 2019

Fair value

Unrealized gain (loss)

Receivables:
U.S. dollars

¥

Euro

15,910

¥

(81)

¥

(81)

2,333

25

25

40

(0)

(0)

Payables:U.S. dollars¥

18,283

¥

(56)

¥

(56)

Thousands of U.S. dollars (Note 3)

Note A: Fair value of financial instruments, marketable securities and derivatives
March 31, 2019

Assets(1) Cash and deposits and (2) Trade receivables
The carrying amounts approximate fair value because of the short maturities of these instruments.

Contracted amount

Fair value

Unrealized gain (loss)

Foreign currency forward contracts
Receivables:(3) Marketable and investment securities
The fair values of equity securities are measured at the quoted market price of the stock exchange and the fair values of debt securities aremeasured at the quoted price provided by financial institutions.

U.S. dollars

$

Euro

143,334

$

(730)

$

(730)

21,018

225

225

360

(0)

(0)

Payables:Liabilities(1) Trade payables and (2) Short-term bank loans
The carrying amounts approximate fair value because of the short maturities of these instruments.

U.S. dollars$(3) Long-term debts
The fair values of bonds issued by the Company and its subsidiaries are measured based on market price, if available. The fair values of bonds
without market price are measured at the present value of total principal and interest discounted by using a rate which reflects its remaining
period and credit risk.
The fair values of long-term debts are based on the present value of total principal and interest discounted by using the current borrowing
rate for similar debt.

March 31, 2018

Millions of yen

Thousands of
U.S. dollars (Note 3)

March 31, 2019

Carrying amounts

Carrying amounts

Unlisted equity securities¥$

49,55053

446,396

$

(505)

$

(505)

Contracted amount

Fair value

Unrealized gain (loss)

Foreign currency forward contracts
Receivables:¥

Euro

Note B: Financial instruments whose fair value is extremely difficult to measure

164,712

Millions of yen

U.S. dollars

Derivatives
Information about the fair value for derivatives is included in Note 17.

96

Contracted amountForeign currency forward contracts*1. Derivative assets and liabilities are on a net basis.

Others50,697
105

31,487

AssetsLiabilities

¥

Other

Fair value of derivatives:
The contracted amount and fair value of derivatives at March 31, 2019 and 2018 were as follows:

Differences

354,241

360,612

Carrying amounts

Unlisted equity securities-

382,649

1,116,018(3) Long-term debts

March 31, 2018-

Assets(2) Short-term bank loans-

3,166,216

3,184,703(3) Short-term and long-term investment securities

Millions of yen

15,258

¥

462

¥

462

2,130

40

40

26

(1)

(1)

Payables:U.S. dollars¥

17,414

¥

501

¥

501

477

DNP Integrated Report 2019

97

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

Derivative transactions to which the Company and its subsidiaries applied hedge accounting

19. Segment Information
Outline of reportable segments:
The Company and its consolidated subsidiaries' reportable segments are components of the group whose operating results are regularly
reviewed by the Board of Directors to make decisions about resources to be allocated to the segments and assess their performance, for which
discrete financial information is available. The group's reportable segments consist of Information Communication, Lifestyle and Industrial
Supplies, Electronics and Beverages, based on a classification by commonality in manufacturing and marketing method of products.

Millions of yen

March 31, 2019

Hedged items

Contracted amount

Fair value

Foreign currency forward contracts
Receivables:
U.S. dollars

Forecasted foreign currency transactions

U.S. dollars

Trade receivables

¥

225

¥

(1)

430

Information on sales and operating income, identifiable assets and other items by reportable segment

Millions of yen

Payables:U.S. dollars

Forecasted foreign currency transactions

1,257

U.S. dollars

Trade payables

714

-

Euro

Forecasted foreign currency transactions

141

(4)

Euro

Trade payables

0-

Forecasted foreign currency transactions

129

1

Sterling pound

¥

2,896

(11)

¥

(15)

Thousands of U.S. dollars (Note 3)

March 31, 2019

Hedged items

Contracted amountFor 2019:

Fair value

U.S. dollars

Forecasted foreign currency transactions
Trade receivables

$

2,027

$

(9)

3,874

-

Payables:U.S. dollars

Forecasted foreign currency transactions

11,325(99)

U.S. dollars

Trade payables

6,432

-

Euro

Forecasted foreign currency transactions

1,270

(36)

Euro

Trade payables

0

-

1,162

Forecasted foreign currency transactions$

26,090Electronics

Beverages

Total

Adjustment

Consolidated

Net sales
Outside customers
Intersegment¥

757,902 ¥395,182 ¥

4,409

1,987

192,437 ¥-55,985 ¥ 1,401,506 ¥
13

6,409

(6,409)- ¥ 1,401,506-

762,311397,169

192,437

55,9981,407,915(6,409)1,401,506

72,256(22,358)

49,89824,844

8,379

36,912

2,121¥

893,825 ¥445,329 ¥

225,058 ¥48,466 ¥ 1,612,678 ¥¥

25,694 ¥16,384 ¥11,578 ¥2,709 ¥

56,365 ¥2,716 ¥

539

1,213

-

-

1,752

-

1,752

Impairment loss

4,066

1,503

4,551

28

10,1486,537

16,685Investments in equity method affiliates

1,739

493

17,076-

19,30837,45056,758

Increase in property, plant andequipment and intangible assets

19,698

12,778

4,613

1,927

39,016

2,087

41,103

Segment income

Receivables:

Lifestyle andIndustrial
Supplies

Net sales and operating income

Segment assets

U.S. dollars

Information
Communication

Total

Foreign currency forward contracts

Sterling pound

Reportable segment

162,345 ¥ 1,775,023

OthersDepreciation and amortization
Amortization of goodwill

59,0819$(135)

Thousands of U.S. dollars(Note 3)

Reportable segment
Millions of yen

March 31, 2018

Hedged items

Contracted amountFor 2019:

Fair value

Foreign currency forward contracts
Trade receivables

¥

39

¥

-

Payables:U.S. dollars

Trade payables

Euro
Sterling pound

1,345

(24)

Trade payables

1112

Trade payables

110

2

¥

1,605

¥

(20)

Beverages

Total

Adjustment

Consolidated

Net sales
Outside customers
Intersegment$ 6,827,946 $ 3,560,198 $ 1,733,667 $- $12,626,180

17,901-

117

57,739(57,739)-

6,867,667

3,578,099

1,733,667

504,486

12,683,919(57,739)

12,626,180

223,820

75,486

332,541

19,108650,955(201,423)

449,532$ 8,052,477 $ 4,011,973 $ 2,027,550 $

436,631 $ 14,528,631 $ 1,462,567$15,991,198

$

Total
Segment income
Segment assets

504,369 $ 12,626,180 $

39,721OthersInterest rate swaps
Receive floating and pay fixedElectronics

Net sales and operating income

Receivables:
U.S. dollars

Information
Communication

Lifestyle andIndustrial
Supplies

Long-term loan payables

¥

20

¥

-

The fair values of foreign currency forward contracts subject to alternative method are included in trade receivables, trade payables andlong-term loan payables as hedged items. The fair values of interest rate swap contracts subject to exceptional accrual method are included inlong-term loan payables as hedged items.
Fair value of derivatives is determined based on forward exchange rates or information provided by financial institutions at the end of the
fiscal year.

231,478 $

147,604 $24,405 $507,793 $

24,468 $Amortization of goodwill

4,856

10,928--15,784-

15,784

Impairment loss

36,63013,541

41,000252

91,42358,892

150,315

Investments in equity method affiliates

15,667

4,441

153,838-

173,946

337,387

511,333

Increase in property, plant andequipment and intangible assets

177,459

115,117

41,55917,360351,495

18,802

370,297

Depreciation and amortization

104,306 $532,261

18. Contingent Liabilities
It is common practice in Japan for companies, in the ordinary course of business, to receive promissory notes in settlement of trade accounts
receivable and to subsequently discount such notes at banks. At March 31, 2019 and 2018, the Company and its consolidated subsidiaries
were contingently liable on trade notes discounted in the amount of ¥488 million ($4,396 thousand) and ¥665 million, respectively.

98

DNP Integrated Report 201999

Independent Auditorʼs Report
Millions of yen

To the Board of Directors of Dai Nippon Printing Co., Ltd.:

Reportable segment
For 2018:

Information
Communication

Lifestyle andIndustrial
Supplies

Electronics

Beverages

Total

Adjustment

Report on the Consolidated Financial Statements

Consolidated

We have audited the accompanying consolidated balance sheet of Dai Nippon Printing Co., Ltd. and consolidated subsidiaries as of March 31,
2019 and the related consolidated statements of income, comprehensive income, changes in equity, and cash flows for the year then ended, anda summary of significant accounting policies and other explanatory information (all expressed in Japanese yen).

Net sales and operating income
Net sales
Outside customers
Intersegment

¥

Total
Segment income

774,998 ¥392,459 ¥

188,746 ¥56,049 ¥1,412,252

3,639

1,849

9

11

5,508

¥

(5,508)-778,637

394,308

188,755

56,0601,417,760(5,508)1,412,252

70,229(23,857)

46,372

21,75812,127

34,1002,244¥

902,702 ¥454,065 ¥234,153 ¥48,212 ¥ 1,639,132 ¥¥

26,968 ¥16,509 ¥12,234 ¥2,608 ¥

58,319 ¥Amortization of goodwill

1,093

1,213

-

-

Impairment loss

1,979

-

-

21

Investments in equity method affiliates

1,895

464

16,110

Increase in property, plant andequipment and intangible assets

27,286

15,725

10,600

Segment assets- ¥ 1,412,252

155,632 ¥ 1,794,764

OthersDepreciation and amortization

2,752 ¥

61,071

2,306

-

2,306

2,000

3,952

5,952

-

18,46936,18254,651

2,327

55,9383,620

59,558[Related information]
Information by geographic areaJapan

For 2019:

Auditor ʼs Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in conformity
with auditing standards generally accepted in Japan. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements.
The procedures selected depend on the auditor ʼs judgment, including the assessment of the risks of material misstatement of the consolidated
financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to theentity ʼs preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity ʼs internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as
evaluating the overall presentation of the consolidated financial statements.

Opinion¥

1,163,128

Asia¥

Other region

162,056¥

76,322

Total¥

1,401,506

For 2019:

Japan

Net sales$ 10,478,630

Asia$

Other region

1,459,964$

687,586

Total$ 12,626,180

Japan
¥

1,185,561

Asia¥

150,794

Other region¥

As discussed in Note 2. “ Reserve for repairs (Changes in accounting estimates) ”, the Company has changed estimate for reserve for repair tocover the expected required repair costs for defects in some products in the fiscal year ended March 31, 2019.
Our opinion is not modified in respect of this matter.
Convenience Translation

Millions of yen

For 2018:

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial positionof Dai Nippon Printing Co., Ltd. and consolidated subsidiaries as of March 31, 2019, and the consolidated results of their operations and their
cash flows for the year then ended in conformity with accounting principles generally accepted in Japan.
Emphasis of Matter

Thousands of U.S. dollars (Note 3)

Net sales

Management is responsible for the preparation and fair presentation of these consolidated financial statements in conformity with accounting
principles generally accepted in Japan, and for such internal control as management determines is necessary to enable the preparation of
consolidated financial statements that are free from material misstatements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Millions of yen

Net sales

Management ʼs Responsibility for the Consolidated Financial Statements

75,897

Total¥

1,412,252

Our audit also comprehended the translation of Japanese yen amounts into U.S. dollar amounts and, in our opinion, such translation has been
made in conformity with the basis stated in Note 3 to the consolidated financial statements. Such U.S. dollar amounts are presented solely forthe convenience of readers outside Japan.

ARK MEIJI AUDIT & CO.
Tokyo, Japan
June 27, 2019100

DNP Integrated Report 2019101

Major Subsidiaries and Affiliates(As of March 31, 2019)

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

Display Components
DNP Precision Devices Himeji Co., Ltd.
DNP Denmark A/SInvestment in operating companies
3,000
Sale of books, creation of data, library operation support and consulting
266
Education and academic businesses; retail stores; publishing; commercial facility/store interiors, etc.
100
Publishing
50
Sale of books, magazines and stationery
50
Management of group companies and related businesss
100
Investment in operating companies
2,035
Operation of hybrid bookstore services
100
Development, sale and maintenance of computer software
50
Offset printing and bookbinding
200
Film making
180Electronic publishing and distribution platform services; e-book distribution service
100
Editing and sale of textbooks and educational materials
60
Research and policy planning aimed at activating Japanʼs publications distribution markets
50
Printing and bookbinding
49
Film making, printing and bookbinding(S$1,000)
4,600

53.5
53.5
53.5
53.5
53.5
18.4
23.7
100.0
87.0
100.0
100.0
63.8
48.2
50.0
100.0
100.0

Development and maintenance of software
843
Planning, production and sale of artistic images and videos
300
Printing and bookbinding
100
Planning, production, film making and plate making
100
Production and sale of business forms and plastic cards, and business process outsourcing service 100
Planning, design, maintenance and operation of information systems
100
Planning and production of promotional materials
80
Film making, printing and bookbinding
100
Production and sale of computers and peripheral devices; development, production and sale of software 40
Mailing of printed matter, etc.
20
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 plastic cards and business forms(VND 1,000,000)
100,000
Card-issuing services(US$1,000)
2,000

50.6
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0 (100.0)
100.0
95.0
36.3

Production and processing of thermal mass transfer media and dye-sublimation media
100
Sale of photo-related products; operation of ID photo booths and automated commemorative photo booths
100
Sale of equipment and media for making driver licences
60
Production, processing and sale of thermal mass transfer media and(RM 1,000)
dye-sublimation media; sale of photo-related products
190,000
Production, processing and sale of thermal mass transfer media and(US$1,000)
dye-sublimation media; sale of photo-related products
71,980Development, production and operation of automated commemorative photo booths(US$1,000)
10
Sale of photo-related products(Euro 1,000)
2,408
Processing and sale of thermal mass transfer media and dye-sublimation media(Euro 1,000)
1,000

100.0
100.0
100.0
100.0

(53.5)(53.5)(53.5)(53.5)(11.0)

45.0

Imaging Communication
DNP Imaging Comm Co., Ltd.
DNP Photo Imaging Japan Co., Ltd.
DNP ID System Co., Ltd.
DNP Imagingcomm Asia Sdn. Bhd.
DNP Imagingcomm America Corporation
Foto Fantasy, Inc.
DNP Photo Imaging Europe SAS
DNP Imagingcomm Europe B.V.

100.0
(100.0)100.0(100.0)
100.0
100.0

Lifestyle and Industrial Supplies
Packaging
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.*DNP Vietnam Co., Ltd.
PT DNP Indonesia

400(Dkr1,000)
135,000

100.0
100.0

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

DNP Photomask Europe S.p.A.

Production and sale of semiconductor photomasks

490
300
100
(NT1,000)
2,198,185(Euro 1,000)
47,200Research, compilation and provision of various kinds of information about purchasing and consumption of foods and beverages
430
Production, printing and processing of packaging materials
300
Production of plastic tubes
200
Manufacturing and sale of aseptic filling systems, and related consulting
100
Filling and processing of packages
80
Marketing research and consulting
50
Sale of sterile paper containers and filling equipment for beverages and liquid foods
75
Sale of packaging materials(THB 1,000)
200,000
Production and sale of packaging materials(US$1,000)
31,500
Production and sale of packaging materials(US$1,000)
26,000

84.0
100.0
90.0
100.0
100.0
100.0
50.0
100.0

Sale of decorative products
Printing and processing of steel, aluminum and other metals
Production, printing and processing of decorative products
Manufacturing and sale of automotive accessories

300
300
200
60

100.0
50.0
100.0
100.0

Production of lithium-ion battery components

200

100.0

100.0
(20.0)
51.0

80.5

Other

(15.1)

Information Innovation

PT. Wahyu DNP Bureau

Production of display-related components
Production and sale of precision electronic components

Electronic Devices

Publishing

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

Ownership ratio ofvoting rights (%)

Electronics

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
Bunkyodo Group Holdings Co., Ltd.
2Dfacto, Inc.
VISUALJAPAN Inc.*DNP Book Factory Co., Ltd.
DNP Media Art Co., Ltd.
MobileBook.jp Inc.
Kyoiku Shuppan Co., Ltd.
Publishing Marketing Innovation Japan Co., Ltd.
Oguchi Book Binding & Printing Co., Ltd.
Tien Wah Press (Pte.) Ltd.

Capital(¥ million)

Nihon Unisys, Ltd.
DNP Fine Chemicals Co., Ltd.
DNP Fine Chemicals Utsunomiya Co., Ltd.
DNP Logistics Co., Ltd.
DIC Graphics Corporation
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 Holding USA Corporation
DNP Business Consulting（Shanghai) Co., Ltd.*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 pharmaceutical products
100
Packing, shipping, freight forwarding and warehousing operations
626
Production and sale of printing ink
500
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(US$1,000)
62,164
Investment in operating companies(US$1,000)
100
Study of Chinese market and business feasibility(US$1,000)
420
Coordination of DNP business operations in the Southeast Asia/Oceania region(S$1,000)
2,000(US$1,000)
47,84220.6
100.0
100.0 (100.0)
100.0
33.4
31.0
100.0
94.3
100.0
92.5
51.1
66.7
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

(Krw 1,000)
800,000(NT 1,000)
10,000(US$1,000)
5,400(US$1,000)
100(S$1,000)
350(Euro 1,000)
92(A$1,000)
70

100.0

100.0

Personal Welfare, Facility Service and Others
DNP Facility Services Co., Ltd.
DNP Information Systems Co., Ltd.
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 and photo-related products, etc.

DNP America, LLC

Sale of printed matter, precision electronic components and decorative materials

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

DNP Europa GmbH*

Sale of printed matter and decorative materials

Dai Nippon Printing Co. (Australia) Pty. Ltd.*Sale of printed matter

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 soft drinks

2,935

59.9

(6.4)

Living Spaces
DNP Lifestyle Materials Marketing Co., Ltd.
DNP Ellio Co., Ltd.
DNP Living Space Co., Ltd.
DNP Tamura Plastic Co., Ltd.
Industrial Supplies
DNP High-performance Materials Co., Ltd.

102

Notes: 1. Voting rights ownership ratios (in brackets) 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.

DNP Integrated Report 2019103

Investor Information(As of March 31, 2019)

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

Stock Code: 7912

Share Price Evolution (Tokyo Stock Exchange)＊1

DNP(between April 1, 2016 and March 31, 2019)

Administrator of Shareholder Register:Mizuho Trust & Banking Co., Ltd.
Stock Transfer Agency Department
2-1, Yaesu 1-chome, Chuo-ku,
Tokyo 103-8670, Japan

Established: 1876
Number of Employees (consolidated): 38,051

Nikkei Average

DNP Stock Price (yen)TOPIX

Increase (%)＊2

50

3,000

Paid-in Capital: ¥114,464 million
Number of Common Stocks:
Authorized: 745,000,000 shares
Issued: 324,240,346 shares
Number of Trading Unit Shareholders (own 100 or more shares):27,126
Stock Exchange Listing: Tokyo Stock Exchange
Major Shareholders:

The Master Trust Bank of Japan, Ltd. (Trust Account)
Japan Trustee Services Bank, Ltd. (Trust Account)
The Dai-ichi Life Insurance Co., Ltd.
Employeesʼ Shareholding Association
Mizuho Bank, Ltd.
Japan Trustee Services Bank, Ltd. (Trust Account 9)
Japan Trustee Services Bank, Ltd. (Trust Account 5)
Nippon Life Insurance Company
JP Morgan Chase Bank 385151
The Bank of New York Mellon as Depository Bankfor Depository receipt holders

Shares(thousands)

Percentage(%)

29,55919,500
9,264
7,821
7,456
6,465
5,528
4,735
4,625

9.79
6.46
3.07
2.59
2.47
2.14
1.83
1.57
1.53

4,199

40

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, 22 West,
New York, NY 10286, U.S.A.
Telephone: (201) 680-6825
U.S. toll free: 888-269-2377 (888-BNY-ADRS)

1.39

Notes:
1. The ownership stakes are based on the total number of shares outstanding lesstreasury shares (301,830,719).
2. The number of treasury shares is excluded from the figures above.

30
2,500
20
10
2,000

-0

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.
Investor Relations:
Dai Nippon Printing Co., Ltd.
Corporate Communication 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
Web Site:https://www.dnp.co.jp/eng/

17

18＊1 Index 100 = March 31, 2016
＊2 On October 1, 2017 DNP changed the number of shares per share unit from 1,000 shares to 100 shares and every two shares were consolidated into one share.

The stock prices above are based on after the share consolidation.

Total Shareholder Return＊3 (TSR)
Fiscal year ended

2015.3

DNP (%)TOPIX (%)

121.33（130.69）

Number of Stocks(stocks)

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

FTSE4Good
Global Index

MSCI ESG Leaders indexes

ETHIBEL
Investment Register

Morningstar Socially
Responsible Investment Index

107.58（116.55）

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

Holder104

131.04（133.67）

Common stocks
Common stocks

Dai Nippon Printing Co., Ltd.
Total

Number of Voting Rights(rights)

―

―

―

―

―

―

22,409,600―

301,555,400
275,346
324,240,346

3,015,549―

3,015,549

Treasury Stocks (as of March 31, 2019)
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.

2017.3end of the fiscal year ended March 31, 2014.)

Type

DNP has been selected for the following indices of global socially responsible investments (SRI). Additionally, DNP was selected for inclusion in all four of the ESG
indices employed by Japan ʼs Government Pension Investment Fund (GPIF ), F TSE Blossom Japan Index, MSCI Japan ESG Select Leaders Index, MSCI Japan
Empowering Women ( WIN) Select Index and S&P/JPX Carbon Efficient Index, the only company in the printing industry with such a distinction. In the fiscal year
ended March 2019, DNP was newly selected for inclusion in two other indices.

2016.32018.3124.06（154.88）2019.3150.00（147.08）＊3 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, 2019 ÷ the stock price at the

Voting Rights (as of March 31, 2019)

Recognition from Society (As of March 31, 2019)

-10

19

No. of Stocks Held

22,409,600
22,409,600――

Percentage of Holding to
No. of Outstanding Shares

6.91
6.91

1-1, Ichigaya Kagacho 1-chome, Shinjuku-ku, Tokyo 162-8001, Japan
Tel: +81-3-3266-2111
URL: https://www.dnp.co.jp/eng/©2019.DNP
PRINTED IN JAPAN