DNP will promote “P&I innovation”
to help solve social issues while
creating new value that meetsthe expectations of people andcontributing to the realization ofa sustainable society.

DNP Group Vision 2015

The DNP Group Code of Conduct

Three Corporate Responsibilities

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

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

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

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

Business
VisionGuiding
Principles

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

TAIWA (dialogue)
and cooperation

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

1. Value Creation

2. Integrity in Conduct

3. Transparency

The first and most fundamental
responsibility of a company tosociety is “providing new value tosociety.” We are working to link theoffering of products and services
necessary to the sustainable
development of society to the growthof the company. Through ourBusiness Vision, we will continue toprovide new value which contributes
to the solution of social issues andmeets peopleʼs expectations.

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

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

(Accountability)

CONTENTS

DNP Integrated Report 2020

Editorial Policy
3
4
14

Editorial Policy / DNP Groupʼs Information Disclosure

TOP MESSAGE – MANAGEMENT PLAN

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

20

Focus Business 1 IoT and Next-Generation Communications Business
Focus Business 2 Data Distribution-Related Business
Focus Business 3 Mobility Business
Focus Business 4 Environment-Related Business

22

INITIATIVES FOR VALUE CREATION◇ Period covered by this report: April 1, 2019 to March 31, 2020
However, reporting is not confined to this period regarding some contents.

24◇ 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 52-58), “ DNP ” refers to Dai Nippon Printing Co., Ltd.)

18

28
30
32
36
38
40

Sustainable Growth of DNP
Risks and Opportunities
DNPʼs Value Creation Process
Expanding DNPʼs Business Areas by Applying and Developing Technologies
Promoting Business Commercialization in Growth Areas
DNPʼs Risk Management◇ Issued: October 2020 (Next scheduled issue: October 2021)
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 the best judgment of management at the time the report was prepared, so we cannot guarantee that
all information contained in the report is completely infallible.

TOWARD SUSTAINABLE GROWTHDNP Groupʼs Information Disclosure― DNP ʼS ESG INITIATIVES ―

44
46
50
52
59

60

CSR Management
Initiatives for the Environment
Initiatives for Climate Change
Initiatives for Human Resources and Human Rights
Corporate Governance
Board of Directors, Statutory Auditors andCorporate Officers

BUSINESS RESULTS(FINANCIAL AND NON-FINANCIAL
INFORMATION)
61

Summary of Financial Results
DNPʼs Business Portfolio
64 Our Products and Services
66 Business Strategies and Business Overview
72 Financial and Non-financial Data
75 Management ʼs Discussion and Analysis
82 Selected Financial Data (unaudited)
84 Consolidated Financial Statements
109 Independent Auditorʼs Report
62

112 Major Subsidiaries and Affiliates
114 Investor Information

The DNP Groupʼs corporate website
https://www.dnp.co.jp/eng/

About the Cover Design
Based on the concept of “connect tothe future,” we use DNP ʼs newgraphic elements that symbolize our
Corporate Philosophy, “ The DNPGroup connects individuals andsociety, and provides new value.” Thegraphic elements were supervised byart director Haruka Misawa.

Investor Relations

Sustainability

https://www.dnp.co.jp/eng/ir/

https://www.dnp.co.jp/eng/sustainability/

Financial Statements, etc.
Various data

Environmental Report, etc.
Various data

Integrated Report

Haruka Misawa, Art Director
Haruka Misawa heads the Misawa Design
Institute, Nippon Design Center, Inc. Misawa
Design Institute continuously uses anexperimental approach, attempting toobserve the principles that lie deeply
within things and visualize the unknown
possibilities to be found there. Her major
projects include waterscape, whichredesigned an underwater environment into
new aquatic landscapes, and visual identity
for KITTE and TOKYO BIG SIGHT, projects
notable for exploring logo versatility.
Awards: JAGDA New Designer Award (2017),
ADC Award (2019), JAGDA Award (2020),
2019 Mainichi Design Award (2020)

2

Finance42

Non-finance

16

Integrated Report“ Investor Relations” website“ Sustainability” website

Environmental Report

DNP publishes an integrated report eachyear covering its growth strategies andbusiness activities that make use of financial
and non-financial capital in an integrated
manner for sustainable value creation.

The “ Investor Relations” website has
been established on the corporatewebsite for shareholders andinvestors for the timely andappropriate disclosure of information.

The “ Sustainability ” website has been
established on the corporate website tocommunicate non-financial informationin detail for the timely and appropriate
disclosure of sustainability information.

With regard to environmental
management, environmental activities
are summarized in PDF format eachfiscal year, and DNP publishes“ The DNP Group Environmental Report.”

DNP Integrated Report 20203

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INITIATIVES FORVALUE CREATIONTOWARDSUSTAINABLE GROWTH

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

TOP MESSAGE

We will deploy the total strengths of
the DNP Group to continue providing“indispensable value” in peopleʼs
lives and corporate activities.
Yoshinari Kitajima, President

Overcoming COVID-19 toward
the Generation of New Value
I wish to express my deepest sympathies and condolences tothe persons who lost their lives due to the global spread of thenovel coronavirus (COVID-19) and to their families and friends.
Let me also extend my heartfelt sympathies to persons who
have been infected and those whose lives have been disrupted
by the virus. At the same time, I would also like to convey mystrongest and sincere gratitude to the many persons working
to protect the lives and livelihoods of people, first and foremost
the frontline healthcare professionals who are making all-out
efforts to stop the further spread of the virus.
The DNP Group places top priority on assuring the healthand safety of employees, their families, customers andbusiness partners and is striving to curb the spread of thevirus while promoting various measures. In our businessactivities, we are proactively implementing response
measures in accordance with our Business Continuity Plan
(BCP) in those businesses that are essential for maintaining
everyday life. For example, this includes ensuring the stableprovision of data center and payment services for electroniccommerce as well as stable supplies of packaging for daily
necessities such as food, beverages, goods andpharmaceuticals in addition to active pharmaceuticalingredients APIs (drug substances).
As people continue to remain in their homes, telecommuting(working from home) has grown significantly and demand for
educational ICT (information and communication technology)
and online medical consultations have increased. Consumptionstyles have also evolved and new services are spreading
through a fusion of online and real-world physical formats.
DNP not only responds to these changes, but also strives togenerate changes on its own by utilizing the strengths of its
advanced information security infrastructure and the strengths
related to its involvement with the entire range of businessprocesses at companies throughout the value chain.
A transition to the “new normal” is proceeding amid the
spread of COVID-19. Even after the coronavirus subsides,
DNP will contribute to the formation of a better economy,society and environment without returning to its past
approaches. I regard this time as an opportunity to promoteneeded changes in one stroke, and we will continuously
develop and provide “essential value” in peopleʼs lives andcorporate activities to ensure DNP becomes a “company
indispensable to society” over the medium to long term.
The immediate impacts on each business segment of DNP
are as follows.

【 Reference】Impact of COVID-19 and the transition to the new normal on DNP ʼs businesses
Business
effects

Information Communication segment

Publishing BusinessInformation
Innovation Business(Marketing, BPO,
Information Security)

Imaging Communication
Business

Bookstore sales have fallen sharply due to shortened business hours and temporary closures of some bookstores.
Orders for printing are decreasing owing to the postponement of the release of magazines and books.
With people spending more time at home due to voluntary home isolation and school closures, sales of e-books in the “ honto” hybrid
bookstore network that combines physical bookstores, online bookstores and e-books have trended steadily.
This business is being affected by the postponement of the 2020 Tokyo Olympic Games and the cancellation of various events around
Japan, a decline in promotional and other advertising demand, and a decrease in sales of pamphlets, catalogs and other printed media.
Demand is increasing for services related to digital marketing and online payments due to the growing use of online shopping.
Business related to Business Process Outsourcing (BPO) as a measure for BCP by companies is also expanding.
A decline in opportunities to shoot and print photos is leading to decreases in sales of related products and services.

Lifestyle & Industrial Supplies segment
Packaging
Business

Sales of commercial packaging materials for beverages, souvenirs and restaurants are declining as people voluntarily refrain fromleaving their homes.
Demand is increasing for packaging materials for pharmaceuticals and sanitary materials and packaging for household food items.

Living Spaces
Business

Demand for interior and exterior decorative materials is decreasing as domestic housing construction and remodeling work isincreasingly delayed or suspended.

Industrial
High-performance
Materials Business

Demand for automotive interior decorative materials and other products is decreasing as domestic and overseas automotive industry stops operations.
Demand for battery pouches for lithium-ion batteries used in tablet devices and smartphones is increasing due to growth in telecommuting.

Electronics segment
Display Components
Business
Electronic Devices
Business
Beverages segment

4

Despite moves by client companies to reduce operating hours, a shift from LCD to organic light-emitting diode (OLED) displays is
progressing, and along with this, there is increasing demand for metal masks used in the production of OLED displays.
In optical films, products used in OLED displays are growing and products used in LCD displays for tablet devices and monitors arealso increasing owing to a rise in household demand driven by an increase in telecommuting.
Although the outlook for semiconductor market conditions is uncertain, there are prospects for demand growth driven by theincreased uptake of 5G and IoT due to the advance of telecommuting.
There is a decline in demand at tourism destinations and restaurants as consumers voluntarily remain at home.
There are prospects for an increase in sales of the new Lemondo line of alcoholic beverages due to greater demand for in-home consumption.

DNP Integrated Report 2020

5

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INITIATIVES FORVALUE CREATIONTOWARDSUSTAINABLE GROWTH

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

Toward the Improvement of Corporate Value andthe Realization of a Sustainable Society

New “Medium-term Management Plan” Launched
What the DNP Group Aims to Be

Business Results for the Fiscal Year
Ended March 31, 2020
In keeping with its Corporate Philosophy of “ The DNP Group
connects individuals and society, and provides new value,”
DNP implements its Business Vision of “ P & I innovation”
primarily around the four growth areas of Knowledge andCommunication, Food and Healthcare, Lifestyle and Mobility,
and Environment and Energy. This is an initiative to create
new value by synergizing our unique strengths in P&I (Printing
and Information) and deepening cooperation with partners.
In the fiscal year ended March 31, 2020, we worked to
expand our business, with efforts especially focused on smart
cards, which boast a top share in Japan; battery pouches forlithium-ion batteries, which hold the worldʼs leading share;
metal masks for manufacturing organic light-emitting diode(OLED) displays; dye-sublimation thermal transfer printing
media for photo prints; and optical film for displays. Thanks tothese initiatives, the DNP Groupʼs profitability rose with a 0.4
percentage point year-on-year increase in the ratio of operating
income to net sales to 4.0%.
Additionally, we also made strides in sharpening ourcompetitiveness by focusing on implementing the following
structural reforms. To effectively use and streamline assets,
the DNP Group continued to review its strategic
shareholdings while acquiring treasury stock to improve
capital efficiency and shareholder returns. Also, as part ofefforts to build a strong business portfolio, the DNP Groupbooked a 26.5 billion yen extraordinary loss to reflect
impairment losses on business-use assets for which

profitability has declined and on idle assets with no prospects
for future use.
Meanwhile, in January 2020, we set up the Central Novel
Corona Virus Control Headquarters, of which I serve as thehead, and quickly and appropriately implemented various
measures. We placed top priority on the health and safety of
our employees and their families, worked to prevent the
spread of the virus as well as focused on assuring business
continuity while flexibly changing workstyles.
As a result of these efforts, although consolidated sales
remained level with the previous fiscal year at 1,401.8 billion
yen, consolidated operating income increased 12.8% to 56.2
billion yen and return on equity (ROE) improved to 7.3%.
Nonetheless, there are still no signs that the global spreadof COVID-19 is slowing even after the start of the fiscal year
ending March 31, 2021 and this is also having a huge
negative impact on DNPʼs businesses. In the consolidated
earnings forecast for the fiscal year ending March 31, 2021
that we announced on August 5, based on the assumptionthat there will be no re-imposing of social restrictions, we
forecast a 4.4% decrease in consolidated net sales to 1,340
billion yen, a 28.9% decrease in operating income to 40
billion yen, a 24.7% decrease in ordinary income to 48 billion
yen and a 69.8% decrease in net income attributable toparent company shareholders to 21 billion yen.
By deploying the total strengths of the DNP Group, we will
strive to transform risks into opportunities and generate newvalue to attain medium- and long-term growth even amid
persistently harsh conditions caused by factors such as the
COVIC-19 pandemic and natural disasters.

As society and the environment are profoundly anddramatically reshaped and peopleʼs values shift, the DNPGroup will strive to provide new value that meets peopleʼs
expectations and solves social issues based on its Corporate
Philosophy.
In past years, DNP could achieve business growth merely
by providing customized solutions to meet the needs of its
corporate customers. Today, however, this approach is nolonger possible. DNP must now above all take the lead anddirectly interact with society to solve social issues and withpeople to meet their expectations and generate truly
essential value.
We will strive to ensure that DNPʼs products and services
provide indispensable value that exists in the daily life of eachand every consumer as “basics.” Breathing this desire into
the corporate statement Todayʼs Innovation is “Tomorrowʼs
Basic,” DNP will continue to take on the challenge ofpromoting various innovations. Through repeated efforts, wewill realize our “ Third Corporate Founding” that surpasses
the “ Second Corporate Founding,” a period in which we
expanded our business domains in the postwar period.
Currently, there are myriad variable factors (risks) in theworld besides COVID-19. We will firmly identify these not justto curb their negative impacts but to also solve problems
ahead of time to create a better society and more
comfortable lives.
Through the Value Creation Program* being promoted
throughout the entire Group, we will discover “seeds ofvalue” and repeat hypothesis testing to build an optimalbusiness model. Leveraging our unique strengths in “ P&I,”
our strengths derived from collaboration with many business
partners and the strengths of employees who continue totake on challenges, we will continue to provide value to all
stakeholders. At the same time, in return for the value that
we provide, we will expand DNPʼs profits and increase
corporate value in the medium to long term, and contribute to
the realization of a sustainable society.
＊Please refer to the chart on the next page for the Value Creation Program.

What the DNP Group Aims To Be
Corporate Philosophy

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

1950s

21st Century

Toward“ Third Corporate Founding”

Second Corporate Founding
1. Social issues andpeopleʼs expectations

DNP
thus far

2. P&I
innovations

1

2

DNP
from
now onBusiness promotion

All DNP

Providescustomized
solutionstailored tocustomer needs

Reinforcing business base

4
4. Strengthening
non-financial capital3
3. Strengthening
financial base

Resolving social
issues while providing

new valuethat meets peopleʼs
expectations

TodayʼsInnovationis“Tomorrowʼs
Basic.”■ Build a strong business portfolio centered on businesses with the top market shares in Japan and overseas.
■ Promote management that transforms risks into opportunities amid harsh circumstances such as the COVID-19 pandemic.
■ Assure stable employment of employees and generate value that contributes to people and society.

6

DNPʼs
unvarying strengths“Culture of continual innovation”“Synergies from P&I strengths”“Drive to create value that resolves social issues”“Sincerity and transparency”

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INITIATIVES FORVALUE CREATIONTOWARDSUSTAINABLE GROWTH

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

Value Creation Program

Management Targets for the Year Ending March 31, 2025（¥ billion）

Value hypothesis
Potential valueof products and services

Business model

Profits

Method for realizing

Price paid for value

value from products and services

Ability to discover | Seeds of value

1

Ability to change | Business hypothesis

2

Value proposition

Ability to test | Verify hypotheses

3

Delivery method

Customer

Growth of focus
businesses and ROE

Focus businesses
composition ratio 45％

Focus businesses
composition ratio 35％

Sales (Focus businesses)(barometer of value)

56.2
Operating income (Ratio)

Profits in return for

Sales (Other)

responding to peopleʼs
expectations and providing
new value that resolves
social issues

75.0（5.1％）（4.0％）FY2019FY2020

FY2021

FY2022

FY2024
Consistently achieve
at least 5.0%

7.3％

ROE

Operating income by segment

2%

3%
4

Earnings model

Information Communication
Lifestyle and Industrial Supplies
Electronics
Beverages

44%

ALL DNP: Leveraging our comprehensive strengths(Combining P&I strengths leveraging marketing perspective × partner alliances)

Information
Communication

DNP will strive to achieve its operating income target of 75
billion yen and secure stable ROE of 5.0% or higher five years
from now in the fiscal year ending March 31, 2025 to realize“ What the DNP Group Aims To Be.”

Lifestyle andIndustrial Supplies

To achieve this, we have newly formulated a three-year
medium-term management plan that started from the fiscal
year ending March 31, 2021 and we have commenced
various related activities. This plan has two basic strategies
consisting of Create value through “ P&I Innovations” andStrengthen business infrastructure to support growth, and wewill implement specific measures under the plan.

FY2022Composition
ratio

FY2019Composition
ratio

FY2024Composition
ratio

27%

14%

Basic strategy

Medium-term Management Plan
FY2020-2022 Action Program Launched

34%

37%

39%

Electronics

・ Pursue digital transformation aimed at adding value to customer experience・ Downsize paper media production bases
・ Leverage converting technology to strengthen new product development and sales
・ Push ahead with review of low value-added products
・ Develop and supply key components that contribute to sophisticated integration of real and digital・ Rebuild businesses where competitiveness has declined

Note: The above plan does not currently factor in the impact of COVID-19. DNP will review the plan as appropriate.

Basic Strategy 1１Create value through “P&I Innovations”

Basic Strategy 1- 1 Create value primarily in growth areas
Re-evaluate the value created by businesses and establish “ focus businesses” from the perspective of “ four growth areas”
using the two axes of “profitability and market growth potential.”

１- 2 Provide value optimized to each country and region
Provide value that is optimized not only to Japan but also to individual countries and regions and that is fined-tuned to address
public expectations and social issues.

１- 3 Increase value using all available restructuring approaches
Improve profitability by optimizing management resources through the selection and focus of businesses according to thevalue created by each business.

Basic Strategy 2

2Strengthen business infrastructure to support growth- 1 Strengthen financial and non-financial capital
Pursue capital strategy aimed at strengthening financial capital and combine financial capital/non-financial capital to promote
integrated management.

2- 2 Strengthen corporate governance
Build robust corporate governance system and structures to increase corporate value.

8１Create value through “ P&I Innovations”- 1 Create value primarily in growth areas

DNP identifies “key issues” based on an analysis of global
social issues and megatrends, consideration of stakeholdersʼinterest and impact and DNPʼs priorities (please refer to thenext page). In addition, we reconsider the value generated by
DNPʼs businesses using the two axes of profitability andmarket growth potential and have identified the growthbusinesses on which we will focus in the future. DNP willbuild a strong business portfolio by optimally allocating
management resources centered on these “ focus
businesses.”
Next, I would like to briefly introduce some of our focus
businesses.
●

IoT and next-generation communications business:
We will promote the development of main components andnew services for devices related to digital transformation.
In the market for 5G compatible products, we will provide
electronic components such as vapor chambers (heatdissipation components) for smartphones and transparent
antenna films. We will also focus on developing services
for VR (virtual reality) and AR (augmented reality) content,
4K/8K video, safe autonomous driving and online medical
consultations.
●

Data distribution-related business: Upon obtaining theconsent of individuals, we will focus on providing services
related to information banks (information entrusting
function), which handle the distribution of personal data;
BPO, which handles important information using an
advanced information security platform; medical andhealthcare business for smart medical examinations; andother businesses.

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Mobility business: DNP will work to develop products andservices for the next-generation mobility society that
requires advanced information security as well as safety
and comfort, reductions in environmental impacts andimprovements in energy efficiency. As prime examples, wewill provide battery pouches for lithium-ion batteries forelectric vehicles, decorative films for vehicles' interiors,
lightweight curved resin glazing and security solutions thatutilize encryption technologies.

●

Environment-related business: DNP will provide valuethat enables the effective use of finite resources toward thebuilding of a recycling-oriented society. We will promote thedevelopment and provision of high-performance products
and services. These include packaging materials for food,daily necessities and medical products; photovoltaic
cell-related materials; and the DNP Multifunctional Thermal
Insulation Box that can maintain a constant temperature forlong time periods without using electricity.

DNPʼs business environment and “key issues” for DNP

Risks

Risks

Faster innovation
Greater development competition
Personnel shortages due to hiring issues

Knowledge and Communication

１- 2 Provide value optimized toeach country and region

Megatrends

Shift to data
economySecure transactions, safe and secure society
Accurate credit review
Streamline supply chain

Moving toward
smart cities

AfricaMegatrends

Domestic population
decline and global
population growth

Digital transformation

works at overseas bases and we are promoting our overseas
businesses centering on businesses shown in the chart
below. In the fiscal year ended March 31, 2020 overseas
sales accounted for approximately 18% of the Groupʼs total
sales. In 2019, we took steps to further strengthen our
structure. These included newly establishing a global
marketing office to explore overseas markets and acquire
cutting-edge technologies. We will make efforts to provide
further value by deepening cooperation between Japan andoverseas areas and by raising synergies.

EuropeInformation
Communication

Social issues to be resolved and value provided
Megatrends

Society5.0
Building a new normal in society

Expanding the diversity of human resources
Food shortages, food losses

Electronic Devices Business
Display Components Business

Megatrends

Building a recyclingoriented economy

Social issues to be resolved and value provided

Social issues to be resolved and value provided

Longer human
lifespans

Extend healthy life expectancy
Changes in public health

Efficient use, reuse, and recycling of resources
Clean “ venous [recycling] economy ”

Food and Healthcare

Environment and Energy

Risks

Focus businesses in four growth areas
Knowledge and Communication

Response to climate change
Review energy initiatives
Worsening marine pollution
Exhaustion of natural resources

Lifestyle and Mobility

Optical films

１- 3 Increase value using all available
restructuring approaches

DNP will promote various Group-wide structural reforms tobuild a robust business portfolio and increase profitability withthe value created by each business as one evaluation criterion.
For example, in each business segment, we will implement

Data
distribution-related
business
Medical/healthcare

Food and Healthcare

10

Photo media/
service creation

Pursue selection and focus

IoT andnext-generation
communications
business

Mobility interior andexterior materials

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

Eco-friendly
packaging
Industrial highperformance materials

the measures shown in the chart below as we pursue theselection and focus of resources. By implementing thesemeasures, we will transform and strengthen our businessstructure and further expand value by allocating resources
such as human capital, R&D investment, land and equipment
to our “ focus businesses.”

Examples of principal structural reforms in each business segment

Metal masks
BPO

Information banks

Latin
America(Battery pouches, barrier films,
photovoltaic module components, interior andexterior decorative materials for living spaces, etc.)

Electronics

Megatrends

Authentication/security

North
America

High-performance Film Business, etc.

Lifestyle andIndustrial Supplies

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

Asia

Imaging Communication BusinessSocial issues to be resolved and value provided

Social issues to be resolved and value provided

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

Main businesses undertaken in the global market

Lifestyle and Mobility
Social issues to be resolved and value provided

TOWARDSUSTAINABLE GROWTH

Value chains and information networks currently span the
globe and are closely connected. Under such conditions, DNP
will leverage the strengths of its products and services that
hold the worldʼs largest market shares and respond closely tothe characteristics and needs of each country and region by
providing individually optimized value.
Approximately one out of every eight Group employees

Transition to sharing economy

Megatrends

INITIATIVES FORVALUE CREATION

Battery pouches forlithium-ion batteries

Environment-related
business
Environment and Energy

Information
Communication

Downsize paper media
production bases

Expand data distribution-related business

Lifestyle andIndustrial Supplies

Review low value-added products
and downsize production bases

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

Electronics

Downsize color filter business

Expand BPO locations

Expand optical film production lines
Expand investment in Electronic Devices business

DNP Integrated Report 202011

TOP MESSAGE MANAGEMENT PLAN

Basic Strategy 22

2Strengthen business infrastructure to support growth- 1 Strengthen financial andnon-financial capital

The DNP Group will strengthen its management foundation by
utilizing financial capital and non-financial capital in an
integrated manner toward medium- to long-term growth. In
particular, we will strengthen “capital policy initiatives,”“environmental initiatives” and “human capital and humanrights initiatives” and formulate and implement specific actionplans. Through these measures, we will nurture anorganizational culture of continuing to take on the challenge ofinnovations toward the creation of value and build a foundationthat supports the sustainable growth of the DNP Group.

Regarding “capital policy initiatives,” in conjunction with
Basic Strategy 1, we are promoting investment in focus
businesses and we will continue making business
investments of 100 billion yen per year in the fiscal years
ending March 2021-2023, mainly in growth areas. As
sources of capital for these business investments, DNP will
use both its own funds and third-party capital to fund growthinvestments and will also reduce idle assets. Furthermore,
we will comprehensively consider various capital policies
such as improving capital efficiency, stabilizing our financialbase and promoting shareholder returns.

INITIATIVES FORVALUE CREATION- 2 Strengthen corporate governance

DNP works to strengthen corporate governance as one of its
crucial management issues. DNP has built and operated astrong structure for quick and accurate management
decision-making and business execution and for auditing andmonitoring these functions. At the same time, DNP isaccelerating initiatives in conjunction with various measures
such as thoroughgoing employee training and education.
At the General Meeting of Shareholders in June 2020, a
resolution was approved for the election of 10 Directors, ofwhich four, or more than one third of the Board, are Outside
Directors. An analysis and evaluation of the effectiveness of
the Board of Directors is implemented once a year and theanalysis results are discussed by Outside Directors and

TOWARDSUSTAINABLE GROWTH

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

shared by the Board of Directors. In June 2018, DNP selected
one female Corporate Officer and will also continue topromote measures for raising the diversity of board members.
DNP is actively promoting environmental, social andgovernance (ESG) initiatives that encompass strengthening
governance and these initiatives have earned high acclaim
from outside the company. For example, DNP has been
selected for many indices of global socially responsible
investing (SRI), which include selection for the FTSE4Good
Global Index for 20 consecutive years. Additionally, as of July
2020, DNP was the only company in the printing industry to
be selected as a constituent of all four ESG indices adopted
by Japanʼs Government Pension Investment Fund (GPIF).
＊Please refer to pages 52-58 for details on corporate governance.

＊Please refer to pages 44-49 for Environmental Initiatives and pages 50-51 for Human Capital and

Human Rights Initiatives.

Value creation program

Capital policy initiatives

Value hypothesis

Environmental
initiatives

Business model

Human capital andhuman rights initiatives

Achieving sustainable growth

Value-creating corporate culture

Strengthen financial and non-financial capital

DNP will continue making business investments of about ¥100 billion per year in the fiscal years
ending March 2021-2023, mainly in growth areas.
(Capex investment: about 60 billion yen, R&D investment: about 30 billion yen, Strategic partnerships and M&A investment: about 10 billion yen)
150
Capex Investment

R&D Investment

Strategic partnerships and M&A investment(Unit: ¥ billion)

100

50

0

FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020TargetNote: The above plan does not currently factor in the impact of COVID-19. DNP will review the plan as appropriate.

12

DNP aims to be a company that earns the trust of all
stakeholders by contributing to the sustainable developmentof society and improving our own corporate value.
For example, even amid the COVID-19 pandemic, we havemade our utmost efforts to fulfill the “ DNP duty” of providing
new value that solves social issues and meets the
expectations of people. DNP will take on the challenge ofpromoting various innovations, build a stronger corporate
structure and execute its decision-making and actions evenmore quickly to further enhance peopleʼs lives and society

against diverse risks in Japan and overseas.
To do so, I would like to deepen TAIWA (dialogue) withnumerous stakeholders that include shareholders. In the
future, I ask for your further support as we work to achieve
our objectives.

DNP Integrated Report 202013

TOP MESSAGE MANAGEMENT PLAN

Focus Businesses 1

INITIATIVES FORVALUE CREATIONTOWARDSUSTAINABLE GROWTH

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

IoT and Next-Generation Communications Business

Developing Key Components and
New Services That Support
the Digital Transformation of Society
As international telecommunications standards evolve toward
5th generation (5G) and 6th generation (6G) technology
standards, DNP will participate in the building of
infrastructure that realizes ultra-high-speed, low-latency andmultiple interconnections in communication. In addition, DNP
is working on the full-fledged deployment of the Internet ofThings (IoT), artificial intelligence (AI), virtual reality (VR) andaugmented reality (AR), and 4K/8K video. Through suchmeans, we will push ahead with the development of various
products and services that make peopleʼs lives better.

Examples of such applications include VR/AR content thatenables people to experience real-life sensations regardless ofplace or time; “smart factories” that collect, analyze and utilize
data from plant equipment for the visualization of production
conditions and improving efficiency; and “smart agriculture”
that gathers farm data using drones, small sensors andsmartphone cameras. We then analyze this data with AI toachieve labor savings and improve efficiency. DNP will utilize
ever-evolving IT to provide new value that supports the digitaltransformation of society and enhances peopleʼs lives.

CASE 1

Identifying social issues/Recognition of people's expectations – Target markets“ Vapor Chamber” Ultra-thin Heat Dissipating Component for 5G Smartphones
For 5G-compatible mobile devices, measures to prevent overheating of IC chips due toincreased data processing and realizing thinner heat-dissipating components to secure
the space for accommodating a greater number of mounted components and increased
battery size are major challenges. In response, DNP has developed a Vapor Chamber, a
0.25mm thick heat-dissipating component that has a profile approximately 30% thinnerthan conventional products while maintaining superior heat-dissipating performance.

Next-generation
telecommunicationsrelated businesses

IoT business area

¥

¥

77.3

trilliontrillion＊ Outlook for 5G Market Global Demand in 2025 (Japan Electronics and Information Technology Industries Association)

The Vapor Chamber consists of a hollow structure created from flat metal plates
adhered together while liquid is sealed inside. The liquid serves as a refrigerant thatsuppresses any temperature rise from heat sources by transferring heat via repeatedevaporation and condensation to thereby realize a thinner heat-dissipating product.
We are responding to growing demand for smartphones equipped withlarge-capacity batteries.
We aim for annual sales of 20 billion yen by the fiscal year ending 2026.

385

Creating
hardware andsoftwarevalue for 5G

DNPʼs new value proposition
Achieve sophisticated, complex communications
Turn manufacturing information into data to alleviate labor shortages
Contribute to smaller, more sophisticated mobile devices tosupport high-volume/high-speed communications
Send/receive large amounts of data instantly, enabling stress-free access to information

Cross-section image

CASE 2High-Resolution VR Content That Balances Protection with Public Openings of Cultural Assets
A key challenge associated with historical buildings and cultural assets in Japanand overseas is balancing their use and public openings with restoration,
preservation and future inheritance in response to deterioration and natural
disasters. In meeting this challenge, DNP utilizes its photographing techniques
and know-how in digitization cultivated over long years to achieve
high-precision 3D digitization within a short time. Utilizing this 3D data, DNP
reproduces world heritages in real-life form with high-definition VR. DNP will
expand opportunities for people to enjoy a close-up look at cultural assets.
DNP is participating in the Kyoto Cultural Heritage Archive Project to preserve the tangible andintangible cultural artifacts of Kyoto, beginning with World Heritage artifacts, and pass these on to
future generations. This project provides the Digital Archive Service to create high-definition VR
content by using laser measurements of cultural assets that place no burden on these heritages.
The measurement data can also be used when repairs and restoration are needed due to natural
disasters or fires or when creating new content.

14

DNPʼs business model (products and services)
Net Sales (¥ billion)• Production and distribution ofhigh-resolution VR content• VR showrooms• “ Vapor Chamber” ultra-thinheat dissipating component• Transparent antennas etc.
VR of the inner sanctuary of the Ninna-ji Temple “ Kondo”

106.2

FY2019Results

120.0

FY2022
Target130.0

FY2024
TargetNote: The above plan does not currently factor in the impact of COVID-19. DNP will review the plan as appropriate.

DNP Integrated Report 202015

TOP MESSAGE MANAGEMENT PLAN

Focus Businesses 2

INITIATIVES FORVALUE CREATIONTOWARDSUSTAINABLE GROWTH

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

Data Distribution-Related Business

Leveraging Our Strengths in Advanced
Information Security to Build and Operate
Platforms for Handling Personal Information
With digital networks now spanning the globe, online services
have been recently expanding rapidly in a broad range offields that include education, healthcare and entertainmentas part of efforts to combat the spread of COVID-19. On theother hand, there are restrictions on exchanges of personal
information across countries and regions, and the use of
personal information without the consent of people has
become prohibited.
Through its business activities of nearly 150 years, DNP has
established advanced security technologies and systeminfrastructures as it handles vital corporate and personal
information and utilizes this information in various businesses.
DNP is synergizing these strengths to promote various
businesses such as the information banks business (information
entrusting function) for handling the distribution of personal
data with the consent of individuals. Besides the BPO businessfor handling business processes on behalf of companies, DNP
will work to create value based on safe and secure data
distribution in response to the spread of telework, online
shopping, educational ICT and online medical examinations.

CASE

Identifying social issues/Recognition of people's expectations – Target markets

DNPʼs Initiatives for Providing New Value in Education
With the aim of realizing education that raises the diversity of humanresources and leads to the creation of new value, DNP engages in
education-related businesses that support lifelong learning, fromkindergarten to elementary school, junior high and high school,
university and in recurrent education. DNP also develops digitaltextbooks, digital libraries and original teaching materials, beginningwith the DNP learning platform “ Realtendant.” This platform provides
learning information desired by children, teachers and parents at the
optimal time and in the ideal format.

Data distribution-related business“ Realtendant ” is a platform service that accumulates and analyzes

learning histories (study logs) and provides optimal educationmaterials and services. “ Realtendant ” reduces teachersʼ
test-scoring burdens and consistently performs instruction-related
analysis, which provides teachers with additional time that they
can devote to their students.
This platform also analyzes the learning tasks of each child andstudent using automatically aggregated learning data. Based on theanalysis results, it promotes more effective instruction by providing
individually optimized learning tasks and teaching materials.

1.9¥

Education and human resources
development-related businesses

Medical and healthcare business

¥

¥

26

trilliontrillion33

trillion

Achieving safe,
secure data
distribution platform

Advancement of
STEAM education/ICT/
lifelong learning

Extending healthy life
expectancy andimproving quality of life

＊ 2024 domestic big data analysis market (IDC Japan)＊ Ministry of Education, Culture, Sports, Science andTechnology “Japanʼs education industry market ”＊ 2025 project commissioned by Ministry of

Economy, Trade and Industry

DNPʼs new value proposition

Study logs

Provides safe, secure information distribution anduseful services for consumers and information providers

ScoringChildren andstudents

Teachers

DNPʼs business model (products and services)
Net Sales (¥ billion)• BPO

Individual review
study materials

Graph

112.1

140.0

160.0

• Information banks• Educational ICT• Smart medical examinations etc.
FY2019Results

FY2022
TargetFY2024
Target＊“ Realtendant ” is a learning platform that supports instruction for each and every child and student while realizing work style reforms for teachers.

Note: The above plan does not currently factor in the impact of COVID-19. DNP will review the plan as appropriate.

16

DNP Integrated Report 202017

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Focus Businesses 3

INITIATIVES FORVALUE CREATIONTOWARDSUSTAINABLE GROWTH

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

Mobility BusinessToward the Realization of the Next-Generation
Mobility Society ̶ Providing People with Safe,
Secure and Comfortable Mobility Experiences
The value people demand in “mobility” is also evolving
significantly amid demands for initiatives that anticipate
future infectious disease pandemics while reducing global
environmental burdens for sustainable growth. DNPʼs hope isto ensure that everyone can benefit from mobility that is safer
and more secure, comfortable and convenient even withrestrictions on movements across countries and regions.
Toward the realization of the next-generation mobility society,
DNP will continuously develop and provide products andservices that have a social impact by synergizing its strengths
in manufacturing and information services.

For example, in anticipation of the growing use of electricvehicles (EVs) and the advance of autonomous driving, DNP
will provide security solutions such as protecting privacy byutilizing encryption technologies as well as products withhigh-function features that improve the design and comfort ofinterior and exterior of mobility spaces.
DNP will contribute to society via its businesses that
continuously solve mobility-related social issues bycollaborating with automakers and other companies in a vast
range of industries as well as with local governments and bysynergizing various ideas and technologies.

CASE 1

Identifying social issues/Recognition of people's expectations – Target markets

Battery Pouches for Lithium-ion Batteries

Next-generation mobility business

Leveraging such technologies as coating and laminating technologies that
we refined in the packaging business, since the 1990s DNP has engaged in
the development of exterior materials (battery pouches) for lithium-ion
batteries that use films to replace conventional metal casings. DNP was also
quick to build a track record in information devices such as smartphones
and tablets and has realized heat resistance, vibration resistance and longlife required for EVs. Currently, DNPʼs battery pouches for lithium-ion
batteries command the top share of the global market.

¥

6.4

trillion

Achieving smart mobility
society accessible to all＊ 2030 domestic MaaS market (Yano Research Institute Ltd.)DNPʼs new value proposition

Precision coating on film substrates contributes to the realization of thinner and lighter batteries.
These are outstanding in terms of electrolytic solution laminate strength and also assure
long-term reliability and preservability.
These are lighter than conventional metal casing and also allow a high degree of free-forming.

Reducing greenhouse gas emissions, reducing air pollution
and improving energy efficiency

We will take on challenges through industry-academia collaboration toward the realization of
all-solid-state batteries, which are expected to be next-generation batteries, while also
developing non-battery applications.

Improve quality of life through stress-free transport,
effective use of time in transit etc.

CASE 2Curved Resin Glazing for Electric Vehicles

DNPʼs business model (products and services)

Automobile manufacturers are working to reduce the weight of automobile
bodies with the aim of lessening the environmental burden and improving energy
efficiency. In response, DNP has developed resin glazing (plastic resin glass)made of such plastics as polycarbonate, which is lighter and easier to process
than glass and features superb impact resistance and thermal insulation. Basedon our track record in providing this for use in construction machinery, DNP is
promoting this application in the curved rear windows of automobiles.

18

71.0

• Battery pouches forlithium-ion batteries• Curved resin glazing for electric vehicles• Decorative films/panels• Security solutions etc.

This product is lighter than glass and features excellent workability and heat insulation.
It contributes to lower weights of vehicles and to raising the degree of freedom in designing vehicle
interior spaces.
We are taking on the challenge of realizing integrally molded vehicle bodies using curved resin glazing.
Contributes to a large reduction in the number of components.

100.0

Net Sales (¥ billion)

Ideal for large curved components.

＊ The image of the vehicle is an illustration.

33.4
FY2019Results

FY2022
TargetFY2024
TargetNote: The above plan does not currently factor in the impact of COVID-19. DNP will review the plan as appropriate.

DNP Integrated Report 202019

TOP MESSAGE MANAGEMENT PLAN

Focus Businesses 4

INITIATIVES FORVALUE CREATIONTOWARDSUSTAINABLE GROWTH

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

Environment-Related BusinessToward the Realization of a Sustainable Society ̶Providing Value That Is Easy to Use,
Functional and Friendly to the Global Environment
DNP is focusing on developing environment-friendly products
and services to realize a sustainable society that strikes abalance between economic development and preservation of
the global environment. In March 2020, DNP formulated the
DNP Group Environmental Vision 2050. Under this Vision,
each and every employee will maintain a strong awareness of
the relationship between our businesses and the environmentand DNP will accelerate various initiatives aimed at realizing
a decarbonized society, a recycling-oriented society and asociety in harmony with nature.
In particular, DNP will work to reduce the environmental

burden throughout the entire lifecycle of products andservices that are indispensable for supporting peopleʼs
comfortable lives and corporate business processes. We willsynergize our strengths such as in functional films that
control light and heat and in information technology toprovide value that is friendly to people, society and the earth.
Examples of such applications include packaging materials
for food, daily necessities and medical products; photovoltaic
cell-related components; and the DNP Multifunctional
Insulation Box that can maintain a constant temperature forlong time periods without using electricity.

CASE 1

Eco-Friendly Packaging
This is DNPʼs packaging that offers three types of value, namely“resource circulation,” “CO 2 reduction” and “preservation of thenatural environment.” DNP offers a diverse lineup that includes
plant-based packaging materials, which substitute petroleum-basedmaterials with sugar cane-based materials for some raw materials.
DNPʼs lineup also includes a packaging that is suitable for recycling byusing a single material (mono-material) and a lightweight and thinpackaging that enables long-term preservation by increasing thebarrier properties of oxygen and water vapor.

Identifying social issues/Recognition of people's expectations – Target markets
Environment-related business¥475

trillion

Creating value to reduce
environmental impact and achievea recycling-oriented society＊ Economic effects produced by a circular economy by 2030 (2016 Accenture survey report)

DNPʼs new value proposition

To realize CO 2 reductions, DNP will promote emission reductions throughout the entire
lifecycle, from raw materials procurement to manufacturing and disposal.

Efficient use of resources
Reduce greenhouse gas emissions
Sustainable raw material procurement

We aim to realize a recycling-oriented society by increasing and strengthening ourplant-based products and promoting combinations with mono-materials.

CASE 2

Encapsulants and Back Sheets for Photovoltaic Cells
DNP is promoting the provision of photovoltaic module components
amid demand for a shift to renewable energy in Japan and overseas.
DNPʼs encapsulants feature high water vapor barrier properties that
protect photovoltaic cells from being damaged by sunlight and moisture.
In addition, DNPʼs back sheets possess high durability and realize
higher power generation efficiency than in the past without damaging
the external appearance.
We supply related materials such as photovoltaic cell encapsulants and back sheets for theclean energy market that aim to reduce the environmental burden.
Through our unique laminating technologies, we contribute to the effective use of resources
such as by improving the power generation efficiency of photovoltaic cells.

20

DNPʼs business model (products and services)
Net Sales (¥ billion)• Eco-friendly packaging

131.3

150.0

175.0

• Encapsulants and back sheets forphotovoltaic cells• DNP Multifunctional Insulation Box
FY2019Results

FY2022
TargetFY2024
TargetNote: The above plan does not currently factor in the impact of COVID-19. DNP will review the plan as appropriate.

DNP Integrated Report 2020

21

INITIATIVES FORVALUE CREATION

22

24

Sustainable Growth of DNP

28

Risks and Opportunities

30

DNPʼs Value Creation Process32

Expanding DNPʼs Business Areas by
Applying and Developing Technologies

36

Promoting Business Commercializationin Growth Areas

38

DNPʼs Risk Management

DNP Integrated Report 202023

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INITIATIVES FORVALUE CREATIONTOWARDSUSTAINABLE GROWTH

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

Sustainable Growth of DNP
1876

1907

1935

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,● 1935: Merger of Shueisha and Nisshin Printing to form Dai Nippon Printing
DNPʼs predecessor ● 1907: Founding of Nisshin Printing● 1951: Start of five-year reconstruction plan

Comprehensive Printing BusinessStarting from a“Civilized Business”

Broadening BusinessDomains throughExpansion Printing

1935

Merger of Shueisha and Nisshin
Printing to form Dai Nippon Printing1943(¥ thousand)(¥ million)

10,000300,000

DNP (non-consolidated)
DNP (consolidated)(Year ended May 1977 〜 )5,000

150,000

1935

P&I Solutions

We are expanding our business tosuch domains as packaging andbuilding (decorative) materials by
broadening our printed items tofilms, metals and other items as well
as forming items after printing. We
are providing packaging for foods,
daily-use items and other items,
interior and exterior materials forbuildings, automobiles and others,
and battery materials and life
science-related materials, thereby
providing value that is indispensablein peopleʼs lives and in company
business processes.
DNP is further expanding its
business domains by sophisticating
technologies such as its etching
technologies that form fine patterns
on metals. Since contributing to thebirth of Japanʼs first domestically
produced color TV, DNP has beendeveloping and providing materials
for use in various types ofhigher-definition, higher-quality
displays and electronics devices
that respond even to nanometerminiaturization.

1983

On the occasion of its 125th anniversary, DNP announced
its Vision that expresses the direction of DNP ʼs growth. This
Vision prescribes our business philosophy as “contribute to
the development of a society based on emergent evolution
in the 21st century,” while designating “ P&I Solution DNP,”
which will solve 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 from the past, will serve as thebrand for the entire Group and we accelerated efforts toraise the value of this brand.

1983-85

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

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

2003
Development of photovoltaic
module components → Expansion
into energy-related businesses
along with the commercializationof pouches for lithium-ion
rechargeable batteries in 1999

1951

2004

1951

Full-scale entry into paper containerand soft packaging field → Expansion
into packaging businessSuccessful formation ofcapillary patterns

Began development of decorative
paper for buildings → Expansion into
Living Spaces business2014
Business and capital tie-up with
PSP, a major player in medical
imaging management systems→ Expansion toward life
science-related businesses

1958

2009

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

1959
Successfully developed photomasks
for semiconductors → Advance into
electronics devices businessStarting 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 valueof 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.

DNP Net sales 12,763 thousand yen

Net Sales
Trends andHistory0

Information Communication

Founding of Nisshin Printing

Since its founding, DNP has
continued to create a diversity of
products and services by safely
and reliably handling the valuable
information of companies andpeople. The Company also
anticipates trends in digitizationand networking and undertakes avariety of businesses bysynergizing paper printed
materials and information services
that are protected bysophisticated security.

Lifestyle and Industrial Supplies

Founding of Shueisha

Information Processing Business ―Information Communication Business“DNP Group Vision for the 21st Century”

Electronics

1907

Second Corporate Founding

Founding

1876

Amid the dramatic changes in the
postwar period, based on the thinking
that “our company can no longer
prosper by relying only on businessfields to the present,” the Company
strived to expand its business inanticipation of the ways of life ofpeople in the future.
Accordingly, the Company
promoted “expansion printing” aimed
at diversifying 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 wascentered on publication printing, tocommercial and securities printing aswell as printing for packaging,building materials and electronics
products.
DNP believes that its growthstrategy of expanding business bycontinually honing such technologies
as information processing,microfabrication, precision coating
and post-processing technologies toensure these remain at the cuttingedge will allow DNP to realize its
current business vision “ P&I
Innovation.”● 2001: Announced “ DNP Group Vision for the 21st Century ”● 1987: Began transforming toward information processing business

Publication Printing Business

Dai Nippon Printing Co., Ltd. was formed in1935 through a merger between Shueisha,founded in 1876, and Nisshin Printing Co.,
Ltd., established in 1907. Starting with
Shueisha, which prescribed “running abusiness that contributes to civilization” in
its company prospectus, the Company
carried out business centered on
publication printing for approximately 75
years up to the postwar period.

24● 1973: Surpassed U.S.-based R.R. Donnelley & Sons Company tobecome the worldʼs largest comprehensive printing company

1940

0

Year ended May 1976
Net sales (non-consolidated)
268,529 million yen

Year ended May 1977
Consolidated net sales
338,144 million yen

1,200,000

Year ended March 2020
Consolidated net sales
1,401,894 million yen

600,000

1946

1950

1960

1970

1975＊1

0

1977

1980

1988＊2 1990

2000

(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.

2010

2020

DNP Integrated Report 202025

TOP MESSAGE MANAGEMENT PLAN

2015

2018

INITIATIVES FORVALUE CREATIONTOWARDSUSTAINABLE GROWTH

2019

2020

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

2030● Global spread of COVID-19● Adoption of Paris Agreement to combat climate change at COP21● 2018 (June): Inauguration of● 2015: Formulating DNP Group Vision 2015

Yoshinari Kitajima as President● Start of fourth phase of work style reformcommenced in 2009

P&I Innovation● Fiscal 2019 〜: Change personnel● 2030: Attainment of SDGs

● 2020 (March): Formulation ofsystems and others● 2019 (April): Declared support for
TCFD

DNP Group Human Rights Policy● 2020 (March): Formulation of

DNP Group Environmental Vision 2050

Corporate
Philosophy

Following the establishment of its Vision in 2001, DNP established a new 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 andexpressed the four business themes it must address as “ four growth areas.”● Brand Statement: Today ʼs Innovation is “ Tomorrow ʼs 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 andshare and inherit knowledge

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

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

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

For Realizing Our “Third Corporate Founding”
DNP will now synergize its unrivalled and uniquestrengths in P&I (printing & information) as well as
deepen cooperation with its numerous partners andsolve social issues while focusing on the creation of newvalue that meets the expectations of people.

Toward Our“Third Corporate Founding”

DNP Group Vision 2015

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

Promoting the Medium-term Management Plan
Basic Strategy 1

Basic Strategy 2

Create value through“P&I Innovations”

Strengthen business
infrastructure to support growth

１ - 1

2

１ - 2
１ - 3

Create value primarily in growth areas
Provide value optimized to each country
and region
Increase value using all available
restructuring approaches- 1 Strengthen financial andnon-financial capital2 - 2 Strengthen corporate governance

Environment and Energy

Food and Healthcare
A future where people around the world no longer haveanxieties 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.

What DNP will never change and what DNP will change――
Toward the building of strong corporate value
DNPʼs unvarying strengths

What we will resolutely and thoroughly change

Our “corporate culture” for continuously taking on
the challenge of making change● Our “drive” to create new value that meets peopleʼs
expectations and resolves social issues● Our business “pillar” that combines DNP ʼs uniquestrengths in P&I (Printing & Information) and deepens
cooperation with partners● Our “corporate stance” of the fulfillment of ourthree corporate responsibilities consisting of value
creation, integrity of conduct and high transparency(accountability)●●

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.
https://www.un.org/sustainabledevelopment/
The content of this publication has not been approved by the United Nations and does not reflect the views of the United Nations
or its officials or Member States.

26

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

Change our perspectives: We will address expectations and social issues bybroadening our perspectives to include people beyond our corporate
customers, on which we have focused to the present.
● Change our structures: We will strengthen our corporate governance andintegrate, reorganize and optimize such functions as sales, production,technology development and planning.
● Change our points of contact: We will expand physical venues andInternet-based virtual venues for interaction and continuous dialogue with adiverse range of stakeholders.
● Change our systems: We will promote changes, including the restructuringof our personnel system, to flexibly and sustainably deploy our strengths.

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BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

Risks and Opportunities
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.”
EconomyIdentification of Risks

Society

Environment

Most important

We analyze global social issues and environmental, social andgovernance (ESG)* trends and broadly identify economic, social andenvironmental issues that represent risks. We then prioritize
activities and define targets based on the interests of stakeholders
and the impact on them as well as the degree of importance to DNP.

Value Creation

Expanding business opportunities
Issues and risks related to theactivities and business* 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

Changes in global supply chains
Changes in the educational environment

Business Risks Assumed from the Perspective of the SDGs

Workforce shortage caused by loss of
personnel or difficulty in acquiring personnel
Growing disparity between urban and rural areas

foundation of DNPʼs corporate
commercialization themes
Changes in consumer behavior
Acceleration of technological innovations andintensifying development competition

DNP is promoting activities to expand business opportunities while
regarding the recognized risks as the needs of society. DNP aims tosolve societyʼs challenges through business activities in the following
four growth areas.

Increase of cyber attacks

Knowledge and Communication

Emerging issues toward an information-driven society

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

Food loss, and food safety and security

Social changes spurred by the sharing economy

Energy policies

Changes in public health and widening disparities

Economy– Turning risks into opportunities and also
contributing to the achievement of the SDGs

Worsening marine pollution andecosystem degradation

Response to climate change(mitigation and adaption)

Depletion of natural resources

Delays in environmental responses toward
transforming to a decarbonized society anda recycling-oriented economy

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

Issues and risks
related to the foundation of
corporate activities

Environment

Interests of and impact on stakeholders

Society

Issues and risks related to
the foundation of
DNPʼs corporate activities

Leakage or infringement ofintellectual properties

Visualization of supply chain

Reduced performance of or internal
control deficiencies of alliance partners

Changes in supply-demand balance interms of raw materials procurement

Social/political turmoil andincrease of country risks

Changes in workstyles

Declining reputation

Work environment issues

Compliance violations

Flaws in quality check items for products and services

Aging of societies in developed countries,changes in demographics

Delays in womenʼs advancement into society andin expanding the diversity of human resources

Loss of biodiversity
Growing water risk

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

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

Deterioration of infrastructure, logistics problems

Large-scale unauthorized use/leakage of data

Foundation to Support Value Creation

Measures for minimizing the impact of assumed 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 theplan-do-check-act (PDCA) cycle.

Employee health management
Potential damage resulting from frequent occurrencesof abnormal weather and natural disasters
Tightening and easing of legal andother environmental regulations

Important

Environment and Energy

Fair Operating
Practices

Human Rights
and Labor

Environment

Responsible
Procurement

Product Safety
and Quality

Information
Security

Corporate
CitizenshipFor details, see pages 42-43.

Degree of importance to DNP

28

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DNPʼs Value Creation Process
DNP 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 & OPPOTUNITIESOUTPUTSOUTCOMES & IMPACTS

Expanding Business Opportunities

Create Strong Products and Services

Solve Social Issues While Creating, Providing andExpanding Value That Exceeds Peopleʼs Expectations■ Publishing Business

Promoting the Medium-term Management Plan

-Turning Risks into Opportunities and Also Contributing to the Achievement of the SDGs-

Sales

Total strengthsof All-DNP
Technologies
andR&D

Microfabrication

Precision
coating

Postprocessing

Project
planning
anddesignInformation
processing

Materials
development

Assessment
andanalysis＊ Refer to pages 32-35, “Expanding
DNPʼs Business Areas by Applying
and Developing Technologies.”

Dialogue and Cooperation
with Partners

Financial capital (consolidated)●●●

Net sales: 1,401.9 billion yen (level with the previous year)
Operating income: 56.3 billion yen (up 12.8% YoY)
Total assets: 1,721.7 billion yen

Human capital (consolidated)
Total number of employees: 38,181 (33,440 in Japan, 4,741 overseas)● Rebuild personnel systems, formulate the DNP Group Human Rights Policy
and promote diversity to raise the value of human resources.
●

Manufactured capital
Number of production bases: 61 in Japan, 16 overseas● Number of sales bases: 35 in Japan, 28 overseas● Capital investment: 57.2 billion yen●

Intellectual capital●●

Number of Japanese patents held: 12,226
R&D outlays: 33.6 billion yen

Natural capital
Co-existence with the global environment through various types ofenvironmental activities and the Biodiversity Declaration in addition
to formulating the DNP Group Environmental Vision 2050
● Thorough implementation of CSR Procurement Guidelines,
Green Procurement Guidelines, etc.
● Reduce environmental impacts by developing andproviding environmentally conscious products and services●(Year ended March 2020, as of March 31, 2020)

30

Partnerships,
capital ties, etc.

Project activities,
human resource exchanges,
etc.

Socialand
Relationship
CapitalJoint development/operation,
global collaboration, etc.

Joint development,
sharing of intellectual
property, etc.

Preservation of
the global environment andbiodiversity, etc.

Collaboration
with a diversityof partners(Marketing, BPO, Information Security)■ Imaging Communication Business
Products and services with top shares

Basic Strategy 1

Create value through “P&I Innovations”
１ - 1□ Smart cards: Top share overall in Japan and top sharein domestic financial markets□ Dye-sublimation thermal transfer printing media forphoto prints: World top share■ Packaging Business■ Living Spaces Business■ Industrial High-performance Materials Business
Products and services with top shares

Create value primarily in growth areas
Knowledge andCommunication

Lifestyle andMobility

Food and
Healthcare

Environment
and Energy

１ - 2Provide value optimized to each country
and region
１ - 3 Increase value using all available
restructuring approaches□ 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

Basic Strategy 2Strengthen business infrastructure to
support growth- 1 Strengthen financial and non-financial capital2 - 2 Strengthen corporate governance2

Tens of thousands ofclient companies● Global companies andcompanies deeply rooted inlocal communities● Start-up companies● Various types of education
and research institutions● Regional andlocal governments● NPOs, NGOs andvarious organizations● Others

Electronics

Management
andoperation

DNPʼstechnologies

Information
Communication

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.

Project
planning
anddesign■ Information Innovation Business

Collaboration
with diverse
human resources

Beverages

Production
andmanufacturing

RESOURCES & INPUTS(Publishing & Media Services, Publications Distribution)

Lifestyle andIndustrial Supplies

DNPʼs Assets and Strengths That Serve
as a Foundation for Value Creation

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

Corporate Governance●■ Display Components 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

Publication of “SDGs Concept Book” in December 2019
DNP is promoting various business activities utilizing the SDGs as a
“ yardstick for creating an even better society.” Giving consideration to
the attainment of the SDGs, we published an original DNP booklet thatsummarizes our basic approach to creating value toward therealization of a sustainable society.

Hokkaido Coca-Cola Bottling Co., Ltd.
■ Beverages Business●

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.

Image of the text of theA5-size, 48-page booklet

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Expanding DNPʼs Business Areas by
Applying and Developing Technologies

Process 1

Editing, Manuscript Submission and Layout
We design the most effective information media in accordance with the content
and 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 themost efficient production processes in addition to undertaking such work as
preparing the necessary manuscript and materials and processing data.
Technologies cultivated through this printing process

Project
planning
anddesignInformation
processing

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.

DNP plans and designs a production process suited to thedesired layout. DNP continuously handles large volumes oftext, still images, videos, voice and other data and arranges
data formats and color tones, and also undertakes
processing and storage. DNP is raising its know-how forsafely and properly handling large volumes of data as it
expands into various types of important information
processing and analysis and security technologies.

Examples of printing such as publication printing and commercial printing

Product delivery

1
Editing,

Printing Processes

Effectivenessassessment

Basic

Feedback

DNPʼs strength is derived from combining a variety of technologies in printing andinformation. With technologies created from basic printing processes as a base,we continually refine these into cutting-edge technologies and apply and advancethese technologies to create a diversity of businesses.

4
Binding andPost-Processing

Process 4

Binding and Post-Processing
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. This is a
crucial process for stabilizing product quality and improving productivity,
while providing the functions needed according to the application.
Technologies cultivated through this printing process

Postprocessing

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.

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

Process 3

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 through this printing process

Film Making andPlatemaking
Film making: Print data is color
separated into the four colors of
CMYK* (cyan, magenta, yellow,
black) and output on film.
＊ C (cyan≒blue-green), M (magenta≒red-purple),

Y (yellow), K (black)

Microfabrication

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

Fine patterns areformed to create a seal.
Laser

32

Exposure

ErosionPrinting

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

Printing

3

A printing plate with the necessary
number of colors is wound arounda roll, ink is applied and high-speed
and high-precision printing on
paper or other items is carried out.

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

Precision
coating

Precision coating is a technology that forms a coating film
on 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.

Coating technologies for
applying a thin, uniform layerof ink and other materials

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Expanding DNP ʼs Business Areas by
Applying and Developing Technologies

Creating New Value by Combining Technologies,
Ideas and Know-How
DNP has cultivated new business domains by applying andadvancing technologies cultivated through diverse printing
processes. DNP will further develop and provide new value bysynergizing the leading-edge technologies it has continually

Ideas

Partnersʼ strengths(technologies & ideas & know-how)

DNPʼs P&I technologies

Knowhow

Printing(in a narrow
sense)

Etching
processing

Precision
engraving

Microfabrication

Photolithography

Coating

Branding

Molding

HologramMedia
conversion
technologies

Vacuumdeposition

Information
processing

Image
processing
andrecognition

Data
analysis

Information
security

Publishingsolutions

Project
planning
anddesignLivingspace
designPackagingdesignSales
promotion

OpticaldesignFonttechnologies

Precision
coating

Knowhow

Ideas

Dispersion
andcomposition

Printing(in a narrow
sense)

Etching
processing

CoatingLaminating
technologies

DNP and a research team led by Takao Someya, a professor at The
University of Tokyo, have advanced an original stretchable hybrid electronic
mounting technology and succeeded in manufacturing a display device that
integrates a thin, expandable, full-color skin display with drive andcommunication circuits and power supply. This serves as a communication
system that displays information gathered by sensing body movements andphysical conditions as well as imaged messages on a display that attaches
to the skin. We will use this device as a people-friendly skin electronics
technology to improve the QoL (Quality of Life) for all generations.

Technologies

Aseptic
filling
processing

Postprocessing

Plastic
forming

Organicsynthesis
technologies

Laminating
technologies

Transfer
processing

AssaydesignMaterials
development

Pigments
andphotosensitive
materials

Processandmaterial
diagnosis

Assessment
andanalysis

Polymermaterials

OpticaldesignProcess
simulation

Databaseanalysis

Photolithography

Etching
processing

Coating

Materials
development

Molding

Precision
engravingEB andUV curing

Assessment
andanalysis

DNP has developed a photomask manufacturing process capable ofaccommodating 5nm* Extreme Ultra-Violet (EUV) lithography, aleading-edge semiconductor manufacturing process. The new process
employs the multi-beam mask writing tool. Utilizing its microfabrication
technologies, DNP will provide photomasks for EUV lithography to domestic
and overseas semiconductor manufacturers and semiconductor
development consortiums while supporting the development of peripheraltechnologies relating to EUV lithography. In the future as well, DNP willdevelop even finer processes at 3nm and beyond and strengthen its supply
system for ultra-fine semiconductor photomasks.

Enlarged photo of patternHigh precision photomask*Nanometer: 10-9m

DNP will combine its technologies in project planning anddesign, information processing and assessment and analysis
with the strengths of its partners to build platforms that arealso indispensable in the sharing economy and the circular
economy.
DNP will build a “ digital marketing platform” that raises
the effectiveness of corporate activities by collecting andanalyzing various data; a “cashless platform” that supports
safe and secure settlements; and DNPʼs unique “IoST(Internet of Secure Things) platform” that securely maintains
IoT, which connects all things to networks. By doing so, DNP
will realize diverse communications services.
*IoST: Internet of Secure Things

34

Information
processing

DNPʼs Initiatives in Digital Archiving

Partnersʼ
strengths

Project
planning
anddesignBuilding Platforms That Support Global &Personal Communication

Assessment
andanalysis

Dataprocessing

VR

Content
production

Media
conversion
technologies

InterfacedesignAR

Copyright
protection

Image
processing
andrecognition

DNPʼs high-definition reproduction
technology Denshobi

Branding

Important cultural property“Rakuchu Rakugai Zu, Ikeda Version”(Hayashibara Museum of Art)AR guide

DNP is leveraging its high-definition image processing technologies
and know-how to build a digital archive of cultural resources that
include works of art and cultural heritages. DNP will respond withthe latest technologies needed for collecting, storing and making
public archived data and provide comprehensive services aimed atrealizing the optimal contact between culture and people.

Digital marketing
platform

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

DNP Develops Photomask Process Targeting 5nm (Nanometer) EUV Lithography

Bookbinding
processing

EB andUV curing

TOWARDSUSTAINABLE GROWTH

Stretchable Electronics - Realization of a Fully Colorized Skin Display

advanced with its diverse know-how in sales, planning andproduction, as well as the strengths of its partners, based on
ideas for realizing even better lives and society.

DNP ʼsIdeas & Know-How

INITIATIVES FORVALUE CREATION

Cashlessplatform

IoST
platform

Photo courtesy of Hoshokai

Wall paintings, folding
screens and hanging scrolls
can be reproduced using
DNP ʼs high-definition
reproduction technology
Denshobi for the purpose ofpreserving and holding
public displays of culturalproperties. DNP ʼs patented
technology that is able print
directly on gold leaf
authentically reproduces
gold leaf works.
This guide system displays
subtitles and explanations
on smart glass insynchronization with theprogression of stage
performances. Information
superimposed on actual
scenes can be displayed
utilizing a wearable device
that is used in the samemanner as eye glasses.

DNP Integrated Report 2020

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BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

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.

Businesscommercialization
themes related to
all growth areas¥

3.3

trillion

Work style reformrelated businesses
Work styles that maximize
the strengths of individuals
and raise synergies＊2022 domestic work style reform ICT

Digital marketingrelated businesses

76¥

Digital transformation thatraises the experiential
value of “shopping”

trillion

26

¥

33

trillion

Inherit and advance knowledge and deploy
experiential value globally＊ 2022 Japanese market for music, broadcast, publishing, game,and virtual reality (VR)(Ministry of Economy, Trade and Industry (METI) Study Group for
the Content Business Era Report)

Education and humanresources developmentrelated businesses
Advancement of STEAM
education/ICT/lifelong learning

1.9¥＊ Japanʼs education industry market (2017–2018)

trillion126¥

trillion

5.2

trillion

A future that safely and securely protects allliving spaces where people worldwide aremobile and lead their lives＊ FY2024 omni-channel

commerce market(Nomura ResearchInstitute Ltd.)

Toward a safe andsecure cashless society

Achieving safe, securedata distribution platform

169.1

¥

billion17.6＊ FY2023 cashless

payment market
in Japan(Yano ResearchInstitute Ltd.)¥

trillion

Smart city-related businesses
Realization of more-comfortable andfunctional living spaces＊ 2022 smart city-related global market (IDC Japan)

Sharing economy-related businesses
Lead the social change from “owning to using”¥＊ FY2023 cashless payment market in Japan (Yano Research Institute Ltd.)＊ 2024 domestic Big Data Analytics (BDA)

market (IDC Japan)

6.4

trillion

Next-next generation
smart mobility
Realize a smart mobility society
with no mobility-impaired people＊ 2030 domestic MaaS market(Yano Research Institute Ltd.)(Ministry of Education, Culture, Sports,
Science and Technology) (STEAM＝Science,
Technology, Engineering, Art, Mathematics)

1.5

Medical/healthcarerelated businesses
Extend healthy lifespans andraise quality of life
＊ Industry group of non-public insurance services

that support public insurance in 2025
(Ministry of Economy, Trade and Industry(METI)-commissioned project)

0Life science-related businesses

8.5 billion persons

Inclusive design/
universal designrelated businesses
Development and provision of
products and services that areeasy to use by numerous people

Climate change responserelated businesses℃＊ Aim to realize a society where

no one is left behind by 2030
under the Sustainable
Development Goals (SDGs)
adopted by the United Nations＊ 2030 world population of 8.5
billion (United Nations
estimate)¥475
trillion

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

Environment-related business
Creating value to reduce environmental impact
and achieve a recycling-oriented society
Economic output generated by circular economy by 2030
(2016 Accenture survey report)

Advance of regenerative
medicine/telemedicine, etc.
＊ 2030 domestic and overseas regenerative medicine peripheralindustry markets (Ministry of Economy, Trade and Industry (METI))

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

36

Payment servicesrelated businesses

Data distributionrelated businesspersons¥

2025 (Japan Electronics and Information
Technology Industries Association)

Contents business-related businesses

64.0
trillion＊ Outlook for 5G Market Global Demand in

Lifestyle and Mobility

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

Creating hardware andsoftware value for 5G

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

Knowledge and Communication

billiontrillionmarket (IDC Japan)

Four Growth Areas and Business Commercialization Themes

US$

77.3

¥

Next-generation
telecommunicationsrelated businesses

50%
reduction

Manufacturing 〜
logisticsʼ supply chainrelated businesses
Provide stable supplies offood and reduce food loss
through monozukuri and ICT＊ Food loss reduction target by 2030

(Ministry of the Environment)

0

Various businesses for the realization ofa 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 and enables people
worldwide to co-exist harmoniously with the earth

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BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

DNPʼs Risk Management

Economic risks• Changes in economic conditions, consumption trends inJapan and overseas, currency fluctuations and others• Responses to acceleration and diversification of technologicalinnovations, and intensifying development competition• Leakage or infringement of intellectual properties• Reduced performance of or internal control deficiencies
of alliance partners• Building and maintenance management of information
infrastructure and social infrastructure• Increase of large-scale cyber attacks• Changes in supply-demand balance in terms of raw
materials procurement, others

Social risks• Compliance violations• Large-scale unauthorized use/leakage of data
• Flaws in quality check items for products and services• Work environment issues• Workforce shortage caused by loss of personnel ordifficulty in acquiring personnel• Social/political turmoil and increase of country risks, others

Environmental risks

The DNP Group accurately recognizes economic, social and environmental-related issues and risks and promotes
integrated risk management initiatives to continue providing new value based on its Corporate Philosophy. At thesame time, DNP recognizes that the variable factors identified as risks are also opportunities for businessexpansion. Accordingly, the DNP Group will respond to these opportunities by combining the strengths of the• Natural disasters and infectious disease outbreaks• Tightening and easing of legal and other environmental
regulations• Strengthening of measures to prevent global warming• Revisions to Japanʼs energy policy due to the depletion ofnatural resources• Drastic changes in energy prices• Promotion of a shift to a circular economy• Worsening of marine and land pollution and ensuring asustainable global environment• Degradation of ecosystems and ensuring biodiversity, others○○

DNP undertakes stable business activities with tens of
thousands of corporate customers without partiality toward
any specific industry or company. DNP must anticipate
decreases in production volume, declines in unit prices andintensifying competition arising from such factors as
economic fluctuations in Japan and overseas, sluggish
personal consumption and changes in industry trends. As it
undertakes its global business development, DNP also
hedges risks through local manufacturing and foreignexchange forward contracts and other means. However, theGroupʼs business performance could be affected by drasticchanges in foreign exchange rates.

DNP faces a variety social, political and economic risks inundertaking its overseas business activities, mainly inSoutheast Asia, Europe and the United States. The DNPGroupʼs performance could be affected if its overseas
business activities are impeded by the emergence of risks
related to unexpected changes in various regulations andlaws, country risk, difficulty in hiring and securing humanresources and risks related to human rights and conflicts.

○○

Regarding the creation of new products and services, DNP
undertakes its business in anticipation of intensifying
development competition, the shortening of product cycles andchanges in market trends amid the diversifying needs of people
and society. The DNP Group engages in strategic business andcapital alliances and corporate acquisitions and its performance
could be affected if it fails to achieve initially expected synergies
due to a deterioration of the business environment.

employeesʼ compliance with laws and regulations but also by
always remaining fair and equitable and acting under high ethicalstandards. In March 2020, we established the DNP Group Human
Rights Policy to strengthen and thoroughly execute our
responsibility for respecting human rights.

○

DNP endeavors to permeate and rigorously uphold corporate
ethics throughout the Group. We strive to earn the trust ofsociety and people not only by ensuring DNP ʼs and our○

DNP continuously strives for coexistence between ourbusiness activities and the global environment and in March
2020 we formulated the DNP Group Environmental Vision
2050 to show our “ideal shape in 2050.” We will undertake
business activities with all employees being strongly awareof their relationship with the environment.

insurance to transfer risk. Nevertheless, the Groupʼs performance
could be substantially affected in the event of severe storms or
flooding caused by climate change, major earthquakes and othernatural disasters or infectious diseases outbreaks and otherevents that significantly damage or lead to a decline in thefunctions of the social infrastructure.

○

In response to natural disasters, DNP implements measures
to protect against fires, earthquakes and flood damage atmajor facilities, promotes geographical dispersion of its
production facilities and raw material suppliers andundertakes Business Continuity Management (BCM) to
minimize production shutdowns and product supply
disruptions. The DNP Group also uses various types of

DNP is deploying measures aimed at building a strong corporate structure that enables quick restoration of business activities and business continuity
even in the case of unforeseen circumstances. Besides the conventional initiatives of the Business Continuity Plan (BCP), DNP is implementing andstrengthening Business Continuity Management (BCM) that covers its entire management and includes securing budgets and resources to realize the
BCP; promoting precautionary measures and education and training; inspecting and evaluating plans; and making continuous improvements. On thebasis of placing the highest priority on safety measures for people when a disaster strikes and raising disaster response and restoration capabilities,
DNP is promoting BCM that correctly recognizes disaster risks and takes appropriate preventive measures on a routine basis.
For procurement, we continually strengthen initiatives, such as by implementing a questionnaire targeting approximately 300 of our suppliers. In thequestionnaire for the fiscal year ended March 2019, we confirmed the status of multiple sourcing in preparation for contingencies such as earthquakes
and fires. Subsequently, in response to the typhoon damage experienced in the fall of 2019, we are strengthening initiatives that refer to floodinundation maps and other tools.
For information systems, we established restoration priorities in our BCP guidelines and are duplicating highly important systems and implementing
training in preparation for emergencies.

○○

volume and maintain optimal procurement prices. On the other
hand, a worsening of the supply and demand balance, adeterioration of procurement conditions or sharp rises in purchaseprices could affect DNP ʼs business performance.
○

In procuring raw materials and other items, the DNP Group
promotes responsible procurement in accordance with the DNPGroup CSR Procurement Guidelines while procuring from multiple
suppliers in Japan and overseas as it works to ensure stableTo fulfill its responsibility as a company that provides products andservices to society, DNP makes efforts to ensure thoroughgoingsafety and quality. Besides complying with the standards and laws
required for products and services, DNP works to provide safety
and quality that surpass the needs and expectations of companies
and consumers. To further promote these efforts, DNP set up theBusiness Continuity Management (BCM)

38

entire Group and deepening alliances with external partners to create new value while responding to rapidchanges in the business environment.
The DNP Group identifies the following as key risks as it strives to minimize negative impacts while creating
business opportunities by solving issues.

The worldwide COVID-19 epidemic persists and an enormous
impact of various infectious diseases is expected in the future as
well. In response, DNP will place the highest priority on assuring
the health and safety of its employees based on the DNP Group
Safety and Health Charter and will implement essential measuresin line with policies of the national government and local
governments and DNP ʼs own response policies.

With digital networks now spanning the globe, there are greaterrisks of software and hardware defects, cyber attacks, computervirus infections and leaks of important information. DNP regards
information security and the protection of important information
as one of its top management issues, implements various security
measures and makes its utmost efforts to maintain and manage
systems and data.

Quality Assurance and Product Safety Committee, stipulatedgroupwide rules and has established and operates a quality
management system and a product safety management structure.
○

DNP has established the DNP Group Safety and Health Charter andis promoting activities by all employees to foster a workplaceculture in which safety takes precedence over everything else.
The DNP Group Safety and Health Liaison Council oversees andleads relevant activities of the entire Group, while the Safety and
Health Committee has been set up in each business division andGroup company as part of efforts to increase the level of safety andhealth throughout the Group.

○

DNP benefits from the natural environment in numerous ways,
including by the procurement of raw materials from forestry
resources to make printing paper and other products and the useof water and energy in manufacturing processes, and is promoting
a variety of initiatives for medium- and long-term growth together
with society while ensuring environmental sustainability. Whenmeasuring corporate value and making investment decisions orwhen domestic and overseas legal regulations on climate change
response and biodiversity conservation are tightened, DNP will
anticipate changes such as the emphasis on ESG (environmental,social, governance) factors and will focus on activities that havean even better impact on the world.

Response to COVID-19
Immediately after the first infection of a person in Japan in January 2020, we established the Central Novel Corona Virus
Control Headquarters, with the president serving as head, and quickly promoted various measures. In principle, DNP places toppriority on the health and safety of employees and their families and adheres to the instructions of the government, related
ministries and local governments. DNP implements measures to prevent the spread of infection with the aim of reducing therisk of infection and continuing business to maintain daily life in society.
Regarding our work system, we are promoting telecommuting in areas other than in manufacturing departments andutilizing web conference systems. In manufacturing departments, DNP is striving to prevent the spread of infection byadjusting shift cycles and promoting staggered working hours and the use of personal vehicles for commuting.
In addition, DNP donated stockpiled high-performance medical masks (N95 masks) as well as face shields manufactured byGroup companies to multiple medical institutions. DNP also provides the DNP learning platform “Realtendant” (refer to page 16) freeof charge that supports learning at home to educational venues where school closures and staggered school attendance continue.
DNP also carries out various support activities. These include holding virtual exhibitions for enjoying art works in virtual space, making
available free-of-charge learning content for manga production and making available VR exhibition space for company galleries.

Image of a person
wearing a medical faceshield manufactured
by DNP Tamura Plastic
Co., Ltd.

DNP Integrated Report 2020

39

TOWARDSUSTAINABLE GROWTH

42

CSR Management

44

Initiatives for the Environment

46

Initiatives for Climate Change

50

Initiatives for Human Resources andHuman Rights

52

Corporate Governance

59

Board of Directors, Statutory Auditors
and Corporate Officers― DNP ʼ S ESG INITIATIVES ―40

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INITIATIVES FORVALUE CREATIONTOWARDSUSTAINABLE GROWTH

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

CSR Management

Foundation to support value creation

Value creation

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

42

Indicators prioritized in an effort to achieve
medium- to long-term visionPrincipal themes

Medium- to long-term vision

Business toContribute to
SDGs
Achievement

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

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

Human Rights andLabor

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

Environment

DNP targets the realization of a decarbonizedsociety, a recycling-oriented society and a society inharmony with nature by creating new value throughPrinting and Information (P&I) innovation designed
to achieve the emergence of a sustainable society.
(Refer to page 47)

Responsible
Procurement

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

Product Safety
and Quality

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

Information
Security

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

(1) Number of information security compliance assessments
conducted(2) Number of inspections and instructions on divisions implementing
priority measures for security of personal and other 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

Corporate
Citizenship

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

(1) Number of external participants for DNP ʼs original future
generations development programs(2) Number of local volunteer activities per year to support
reconstruction of disaster-stricken regions, including
Tohoku and Kumamoto

Medium- to long-term targets

FY2019 results(1) Achieve sales of 600 billion yen by FY2020.

(1) 624.2 billion yen(1) Number of meetings of the Corporate Ethics Committee(2) Bases holding Autonomous Corporate Ethics Training(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% (107 bases)(1) Ratio of women managers(2) Number of women in managerial positions andleadership positions(3) Ratio of employees with disabilities(4) Rate of annual paid leave taken(5) Frequency rate of lost workday injuries(1) Achieve ratio of women managers (section manager orabove) of 7% or more by the end of March 2022.
(2) Double the number of women in managerial positions
and leadership positions by the end of March 2022
compared with the number (430) in February 2016.
(3) Achieve the ratio not lower than 2.2%
(4) Achieve an increase over the previous fiscal year (52.4%).
(5) Keep the rate not more than 0.2.

(1) 6.07%(2) 1.17 times the number(760)(3) 2.26%(4) 54.7%(5) 0.21(1) Sales of environmentally conscious products and services(DNP contributes to achieving the SDGs through all its businessactivities. DNP set the above as one of the clear indicators to monitor
progress.)

For details, see page 45, “ Environmental Activity Targets and Results.”(1) Average score of DNP Group CSR Procurement
Guidelines survey on key suppliers(2) Percentage of key suppliers that have obtained theconformance certificate of DNP Group Guidelines for
Procurement of Paper for Printing and Converting(1) Achieve the average score of 90 points by
FY2030.
(2) Achieve 100% by FY2030.

(1) 87 points in Japan(2) 92%(1) Achieve zero accidents.
(2) Achieve 100%.

(1) Zero accidents(2) 100% (383 products)(1) Achieve 100% (covering all business units andGroup companies)(2) Achieve 100% (covering all applicable divisions)(3) Achieve 100% (covering all business units andGroup companies)(4) Achieve 100% (covering all applicable websites)(1) 100% (84 units andcompanies)(2) 100% (71 times)(3) 100% (Approx. 41,000
persons)(4) 100% (397 systems
tested)(1) Achieve an accumulated total of 7,500 persons
from FY2015 to FY2019.
(2) Constantly conduct the activity three times ayear until FY2019.

(1) Accumulated total: 8,542
persons(2) Four times: twice in
Tohoku, once in Kumamotoand once in Hiroshima(support for restoration ofareas hit by torrential rains
in July 2018)(1) Number of serious accidents* caused by our products* Including cases where a defect in our products jeopardizes the user ʼs life,
causes serious bodily harm or inflicts serious damage on the user ʼs property(other than the product itself)(2) Percentage of newly developed products undergoingproduct safety and risk assessment

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INITIATIVES FORVALUE CREATIONTOWARDSUSTAINABLE GROWTH

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

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

Environmental Management Activities
DNP has established a CSR & Environmental 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 andcorporate officers in charge of each area at the Head Office.

Formulation of the DNP Group Environmental Vision 2050
In March 2020, DNP formulated the DNP Group Environmental
Vision 2050 and defined what we expect to accomplish toward
the year 2050. We will continue to step up our efforts to create
value with a view toward realizing a decarbonized,
recycling-oriented, society in harmony with nature.
We also broadly identify economic, social andenvironmental issues, analyze their importance based on thepotential impact on stakeholders and DNP, and then prioritize
activities and define targets (for details, see pages 28-29).

Sustainable Society

In particular, as variable factors (risks) relating theenvironment, we are cognizant of the need to respond toclimate change and create a recycling-oriented society. By
proactively working on these changes, we will enhance thesustainability of our corporate activities. In addition, by
promoting these activities internally and also throughout thevalue chain, we will strive to develop and provide products
and services that help reduce the burdens placed on ourenvironment.

Decarbonizedsociety

In addition, Environmental committees have been set up ineach business unit and Group company to promote
environmental activities based on the decisions of the CSR &Environmental Committee and the attributes of the businessdomains.

Recyclingoriented society

Society in harmony
with nature

Air/Water/Soil
Energy/Water
Raw Materials

IN

Production
Division
Research
Division

Distribution
Division
Marketing Sales
Promotion Division
UndesiredRe-usematerials

OUT

Offering value to society
Environmentally conscious
products and services

Recycling

DNP Group Environmental Management System

Waste

Environmental Activity Targets and Results

Create recycling-oriented society

Response to climate change

Response to risk

Reduction ofgreenhouse gas (GHG)
emissions throughout
supply chain
Expanding usage of
renewable energy
BCP measures at
production bases

Maximizing opportunities
Development ofenvironmentallyconscious products andservices
Use of renewableenergySustainable raw
material procurement,
etc.

Efforts to address climate change andcreate a recycling-oriented society

Environmental activities and results(refer to page 45)• Climate-change initiatives at DNP business locations

2030 target: 25% cut in GHG emissions versus FY2015→ FY2019 result: 23.7% cut versus FY2015• Climate-change initiatives throughout supply chain

International environmental non-profit CDP placed DNP on its
Supplier Engagement Leaderboard in recognition of
its initiatives.

Formulation of DNP Group Environmental Vision
2050 in March 2020

Reduction of wastematerial discharged
Use of renewable
resources

Industry-governmentacademia alliances andtechnology development
to enable recycling ofplastic resources
Establishment of platform
for use of recycledresources, etc.

(refer to page 47)

Promotion of project activities of Alliance for theBlue, a group for solving the problem of marine
plastic waste(refer to pages 20-21）

Evaluation

Targets through FY2020

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
levelsAiming to achieve effective net-zero greenhouse gas (GHG)
emissions by 2050

Emissions in FY2015: 1.201 million tons

Reduction of environmental
impact incurred duringtransport

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.
To reduce per-unit waste emissions (waste emissions/amount of sales)by 20% compared with FY2010 (includes overseas locations)Continue operation of VOC recovery equipment at
DNP Indonesiaʼs Karawang Plant

Reduction of
Volatile Organic
Compounds (VOC)
emissions
Reduction ofindustrial waste
Reduction of water usage(Press release on July 30, 2020)

Realization of a sustainable society throughbusiness activities with a focus onenvironment-related business* Mid- and long-term GHG emissions
reduction targets set

Topic

Environmental
conservation

Office environment

To maintain zero emissions for the entire DNP GroupTo reduce per-unit water use by 25% compared with FY2010(includes overseas locations)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

FY2019 Results

Sales of 624.2 billion yen in FY2019

Emissions in FY2019: 0.916 million tons
Per unit in FY2019: 12.8 kl/billion yen
Emissions in FY2019: 3,742 tons

Per unit in FY2010: 42.4 tons/billion yen
Per unit in FY2019: 36.3 tons/billion yen
Landfill waste rate in FY2015: 0.06%
Landfill waste rate in FY2019: 0.06%
Per unit in FY2010: 10.8 m³/million yen
Per unit in FY2019: 6.1 m³/million yen

9.4% increase
from FY2015◎

23.7% decrease
from FY2015◎

20.7% decrease
from FY2010◎

45.3% decrease
from FY2010◎◯

14% decrease
from FY2010
Maintained zero
emissions
44% decrease
from FY2010◎

95% achievement rate of targets for FY2019 (voluntary target)◯

98% achievement rate of targets for FY2019 (voluntary target)◯

100% achievement rate of targets for FY2019 (voluntary target)◯

98% achievement rate of targets for FY2019 (voluntary target)◯

100% achievement rate of targets for FY2019 (voluntary target)◯

84.2% recovery of waste paper in FY2019◯△◯

Evaluation criteria ◎： Target exceeded by a wide margin ○： Target achieved or making steady progress toward target△： Making active efforts but target not achieved ×： Efforts insufficient

Receiving the highest evaluation from the CDP in their Supplier Engagement Rating
In the 2019 Supplier Engagement Rating, DNP received the highest evaluation the CDP grants, a position on the Suppler Engagement
Leaderboard, in recognition of our effort to implement measures for climate change in overall supply chains and to reducegreenhouse gas emissions (GHG). The CDP (headquarters: London, UK) is an international non-profit organization that takes onenvironment-related issues including climate change. The rating reflects the results of surveys and evaluations conducted by CDP
regarding the initiatives taken by each company throughout their supply chain to mitigate climate change and reduce GHG emissions.
In 2019, the CDP selected 159 companies, approximately 3% of the more than 4,800 companies that it surveyed around the world.
44

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 2 degrees Celsius. Going forward, DNP will continue to augment its GHG emissions
reduction activities by saving energy 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 to ensure these will have SBTs in place by FY2025.
DNP Integrated Report 202045

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INITIATIVES FORVALUE CREATIONTOWARDSUSTAINABLE GROWTH

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

Initiatives for Climate Change
The effect of climate change has been becoming increasingly serious every year, causing a large impact on theeconomy, society and the environment. The international community has been stepping up its efforts to build a
low-carbon or decarbonized society, and this has attached greater importance to the roles companies should fulfill.
By striving to resolve various environmental and other social issues, DNP intends to make peopleʼs daily lives
sustainable, safe and secure, while at the same time creating value that is unique to DNP and meets peopleʼs
expectations. We place particular emphasis on responding to climate change as an important management
challenge and will proactively engage in dialogue with stakeholders by disclosing information (from here to page 49)
on our relevant efforts through the framework recommended by the Task Force on Climate-related Financial
Disclosures (TCFD).

(2) Risk Management
DNP is in the process of facilitating integrated risk
management initiatives to minimize the negative impact ofsocial issues and variable factors (risks). (For details, seepages 38-39.)
The CSR & Environmental Committee identifies climatechange-related risks based on our short- and medium-termbusiness plans and from the perspectives of the interests ofstakeholders, degree of impact of climate change on businessand probability of the occurrence of such an impact. Risk
assessment and management are performed at least morethan once a year to prioritize activities and define targets.

Each environmental committee of its business units andGroup companies carries out activities after establishingactivity goals and plans that reflect the characteristics ofdifferent business fields under the guidance of the CSR &Environmental Committee. The CSR & Environmental
Committee checks the progress in activities on a quarterly
basis. It also gathers information on the achievement of goals
on a DNP Group-wide basis and report the progress inactivities to the management team twice a year, while also
providing feedback to each business unit and Group
company.

(1) Governance Structure
DNP positions its response to climate change as a key
management challenge. The Corporate Ethics Committee
overseeing internal control of divisions within the head officeand the CSR & Environmental Committee handling mattersrelated to sustainability are responsible for DNPʼs response to
climate change.
The CSR & Environmental Committee, which is chaired bya director in charge of environmental issues, consists ofdirectors and corporate officers with assigned duties at the
Head Office. The Committee, which meets twice a year,
discusses and decides overall policies, objectives and plansregarding group-wide sustainability, while also monitoring the
progress of the plans and the status of the achievement of
those objectives. The Board of Directors discusses andmakes decisions on the important matters discussed by theCommittee along with management policies, management
strategies and other important issues.
The Board of Directors deliberated the facts resulting in
the March 2020 formulation of the DNP Group Environmental
Vision 2050 that defined the things we expect to accomplish
toward the year 2050.

(3) Strategy
Climate change-related risks and opportunities include thoserelated to the shift toward building a decarbonized society,such as the establishment of an international framework
following the effectuation of the Paris Agreement,
enforcement of more stringent legal regulations on GHG
emissions and growing demand for and market interest in
low-carbon technologies, and those related to physicaleffects resulting from rising temperatures. As an effort toidentify risks caused by climate change and examine

strategies to prepare for long-term risks, DNP performs
scenario analysis to assess the financial impact and duration
during which we will be exposed to the impact.
In conducting the analysis, we referred to the Representative
Concentration Pathway scenario (RCP 8.5) in the Fifth
Assessment Report of the Intergovernmental Panel on Climate
Change (IPCC) and the Stated Policies Scenario and theSustainable Development Scenario in the World Energy Outlook(WEO) from the International Energy Agency (IEA).

Board of Directors *1

IPPC RCP scenarios
Management Committee
Corporate Ethics Committee

CSR & Environmental Committee *2

Future scenarios of therepresentative concentration
pathway shown in the Fifth
Assessment Report (announced
in 2014). Its RCP 8.5 scenario,
which assumes the sharpest
temperature rise, projects a
2.6 ℃ - 4.8ºC increase intemperatures by 2100.

IEA WEO scenarios
Stated Policies Scenario

Sustainable Development Scenario

The central position of IEA WEO is based on theassumption that all of the currently announced policies
will be implemented. Looking ahead to 2040, it expects
that demand for primary energy resources will continue
to grow and most of the increases will beaccommodated through solar power generation

Scenario for fully achieving sustainableenergy goals. It projects that most of theincrease in demand will be met using
solar photovoltaic and wind power
generation.

OfficeBusiness Unit & Group Company Environmental Committees

DNP targets the realization of a decarbonized society, a recycling-oriented society and a society in harmony with nature by creating new value throughPrinting and Information (P&I) innovation designed to achieve the emergence of a sustainable society.

Promotion Office
Technical and
Manufacturing Group

Groups promoting eachenvironmental target

Business Unit & Group company sites

Roles of each organization*1 Deliberate and decide on important matters related to our response to climate change*2 Assess climate change-related risks and opportunities, deliberate and decide on basic policies, targets and plans and oversee the progress

46

DNP Group Environmental Vision 2050 (Formulated March 2020)

A Decarbonized Society
through Climate Change
Mitigation and Adaptation• We aim to achieve effective
net-zero greenhouse gas (GHG)
emissions from businessactivities at our own sites.
• We will contribute to create adecarbonized society throughour products and services.

A RecyclingOriented Society
through the Efficientuse of Resources

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

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

SDGs to which our initiatives
correspond

DNP Integrated Report 202047

TOP MESSAGE MANAGEMENT PLAN

(4) Main Risks and Opportunities Associated with Climate Change

PhysicalMigration

Opportunities

Affected
periodPolicies,
laws andregulations

More stringent regulations on GHG emissions and increased carbon tax• Increased operation cost due to the enforcement of additional
Medium tomeasures aimed at reducing emissions and the introduction ofrenewable energy, among other factors
long term• Decreased sales due to an increased carbon tax into product prices
among other factors

Technology

Replacement or change of existing facilities by or to low
emission equipment• Increased capital spending due to the upgrading of production
machines and different types of utility equipment• Increased cost mainly due to earlier-than-expected sale anddepreciation of existing assets

Mediumterm

Technology

Capital investment in the development of low emission
technologies• Development of new, innovative technologies and increased
M&A-related investment expenses for the reduction of GHG emissions• Loss of markets due to a delay in the development and take-up of
low emission technologies

Mediumterm

MarketChange in demand for products and services due to a shift inconsumer preferences• Market change such as increased demand for low carbon andenvironmentally conscious products and services• Lower corporate evaluations and credibility, and exclusion from themarket due to the absence of consideration for low carbon
initiatives and the environment

Mediumterm

Evaluation

Decreased capital stock due to stakeholdersʼ negative views• Increased negative views among stakeholders and lower corporate
evaluations and credibility due to an insufficient recognition ofclimate change-related risks, increased GHG emissions from DNP,
delayed action on emissions reduction, etc.
• Decreased capital stock due to exclusion from investment targets

Mediumterm

Urgency

Increased storm, flood and other disasters due to abnormal
weather conditions• Decreased production output and sales due to the suspension ofoperations at DNP ʼs own production facilities and the disruption oflogistics and supply chains• Efforts to ensure the safety of employees in the case of disasters

Short
term

Developmentof products
and services
andexpansion of
their sales

Next-generation mobility society• Increased demand for DNP ʼs mobility-conscious components andbattery pouches for lithium-ion batteries as a result of the
popularization of electric vehicles that feature reduced GHG
emissions• Business expansion by leveraging DNP ʼs information security
technologies with a view toward ensuring the safety of autonomous
driving vehicles

Medium tolong term

Developmentof products
and services
andexpansion of
their sales

Increase demand for low-carbon products and renewable energy• Increased demand for DNP ʼs photovoltaic module components as aresult of growth in demand for low-carbon products and renewableenergy in supply chains• Expanded business operation for highly functional films such asboxes for transportation that enable cold chain logistics without
using electricity, which contributes to low-carbon technology

Developmentof products
and services
andexpansion of
their sales

Containers and packaging that are both environmentallyconscious and convenient• Increased demand for DNP ʼs environmentally conscious andconvenient containers and packaging due to the enhanced
awareness of environmental issues among consumers• Expansion of recycling-related businesses through collaboration
with diverse stakeholders

Risks

Migration

Risks assessed

Mediumterm

Mediumterm

Response

Large• Reduction of GHG emissions in line with thelong-term environmental vision andexpanding usage of renewable energy• Facilitation of business structure reform programs• Monitoring of trends in government policies
such as carbon tax initiatives, etc.

Medium• Systematic facility upgrading and investment• Reduction of GHG emissions in line with thelong-term environmental vision• Facilitation of business structure reform
programs

Medium• Setting target business areas andconcentrated investment plan
• Improvement of capital efficiency andestablishment of stable financial bases• Monitoring of markets and technology
trends• Setting target business areas andconcentrated investment plan
• Improvement of capital efficiency andestablishment of stable financial bases• Monitoring of markets and technology
trendsMedium• Proper management of GHG emissions.
• Reduction of GHG emissions and expanding
usage of renewable energy in line with thelong-term environmental vision• Monitoring of market trends

Medium

• Implementation of measures addressing
disaster-related risks at production facilities• Strengthening production backup system at
multiple facilities• Strengthening compensation and support
programs for employees

LargeMediumMediumTOWARDSUSTAINABLE GROWTH

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）(5) Scenario Analysis Results

Degreeoffinancial
impactMediumINITIATIVES FORVALUE CREATION• Setting target business areas andconcentrated investment plan
• Improvement of capital efficiency andestablishment of stable financial bases• Setting target business areas andconcentrated investment plan
• Improvement of capital efficiency andestablishment of stable financial bases• Setting target business areas andconcentrated investment plan
• Improvement of capital efficiency andestablishment of stable financial bases• Expansion of markets throughcollaboration with partners and promotionof efforts to facilitate the establishment ofrecycling schemes

Based on the scenario analysis results, DNP recognizes that,toward building a decarbonized society, more stringent
regulations on GHG emissions and an increased carbon tax
are likely and that a rise in operational costs is expected. The
demand and market for low-carbon products and services,on the other hand, will grow further, pushing up the need foraccelerated technology development and mergers andacquisitions (M&A). To address such changes, DNP is
working on the creation of business opportunities bycombining P&Iʼs strengths and its own, and deepening its
collaboration with external partners.
The building of a decarbonized society is one goal of the
DNP Group Environmental Vision 2050, DNPʼs long-term
environmental vision. In order to achieve effective net-zero
GHG emissions from business activities at our own sites, weare undertaking systematic reduction activities and promoting
the introduction of renewable energy.
Our Medium-term Management Plan identifies“ Environment and Energy” as one of the growth areas andspecifies environment-related, mobility and other businesses
as our focus businesses based on two factors, namely
profitability and market growth potential. We expect futurebusiness expansion for low-carbon products, such as thoserelated to renewable energy and battery pouches forlithium-ion batteries, and for security solutions for automateddriving. Moreover, DNP has been increasing the lineup of
containers and packaging that are both environmentallyconscious and convenient and joining collaborative efforts ofthe entire supply chain to establish a recycling system anddevelop new recycling technologies. We are also channelingmanagement resources and promoting strategic investment
plans for reinforcing our management foundation that
underpins value creation in these focus businesses.
Additionally, in dealing with the impact of short-term
physical risks, we have set up a business continuity
management structure and have been reinforcing response todisasters caused by climate change and enhancing supply
chain management.

(6) Targets and Indicators
DNP has defined the following targets for maximizing
opportunities and minimizing risks resulting from climatechange. To minimize risk, we have monitored Scope 1 - 3
GHG emissions across the DNP Group, and are in the process
of formulating strategies based on the collected data.
Regarding the GHG emissions resulting from the businessactivities undertaken at DNPʼs own facilities (Scope 1 and 2),
we are moving forward with reduction activities to meet the
mid-term targets set for the period up to 2030. For Scope 3,
we are conducting a survey on the status of the GHG
emissions control that is exercised by our suppliers.

Value creation

Foundation of business activities

Under the Medium-term Management Plan, we will work to expand
our focus businesses and contribute to the creation of adecarbonized society through our products and services.

We will reduce GHG emissions from businessactivities at our own sites.

Sales of environment-related businesses (refer to pages 21-22)

Medium-term reduction target

FY2019 Results

Projection for FY2024

131.3 billion yen

175.0 billion yen

Sales of mobility businesses (refer to pages 18-19)
FY2019 Results

Projection for FY2024

33.4 billion yen

100.0 billion yen

To achieve a reduction of 25%
from FY2015 levels by 2030
(Acquisition of SBTi approvals)

Long-term environmental vision
To achieve effective net-zeroemissions by 2050

Note: The above plan does not currently factor in the impact of COVID-19. DNP will review the plan as appropriate.

Short term: 0-5 years, medium term: 5-10 years, long term: 10-30 years

48

DNP Integrated Report 2020

49

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INITIATIVES FORVALUE CREATIONTOWARDSUSTAINABLE GROWTH

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

Initiatives for Human
Resources and Human Rights
At DNP, we place human dignity first and foremost and respect the diversity unique to all individuals, including theirculture, nationality, race, ethnicity, language, religion, values, gender, age, gender identity, their sexual orientation,
and any disabilities they may have. We also leverage this diversity to create new value and work to create a safe,
healthy and vibrant working environment.

Initiatives for Human Resources
Reform of Personnel Systems
At DNP, in view of the rapid changes that are occurring acrosssociety, we are designing and rebuilding personnel systems todevelop and utilize our diverse human resources towardmedium- and long-term value creation. In April 2019, we
mainly focused on the revision of our systems for young
employees and our human resources with diverse careers thatthey have worked to develop inside or outside of DNP. We also
revised systems to permit certain side jobs and dual
employment, among other initiatives.
In the fiscal year ended March 31, 2021 onward, we willcontinue to rebuild a broad range of personnel-related systems.
Efforts will be made to facilitate a reform of our organizational
culture, respond to the concept of equal pay for equal work,
enhance systems concerning promotion and the nurturing of ICT
personnel and support work styles of senior employees.

Efforts for promoting employment of persons with disabilities(acquisition of special subsidiary company certification)
With the aim of providing opportunities of active participationfor employees with disabilities based on their individual
strengths and further promoting employment of diverse humanresources, we established DNP Business Partners Co., Ltd. in
February 2019 and acquired special subsidiary company
certification from the Minister of Health, Labour and Welfare
under the Act on Employment Promotion etc. of Persons with
Disabilities in October of the same year.

DNP Business Partners employees sorting internal mailInitiatives for Embodying the DNP Group
Safety and Health Charter〈Key features of our personnel-related systems reform in
FY2020 onward〉
1. Revising award systems to accelerate a reform of ourorganizational culture• Introduction of a value-based award system• Granting safety and health awards
2. Response to the concept of equal pay for equal work
3. Reform of our promotion system for ICT personnel, and creationof new value by leveraging ICT
4. Rebuilding systems related to retirement and retirement
benefits• Introduction of a flexible retirement system up to the age of 65• Partial introduction of a defined contribution pension scheme

In seeking to cultivate a workplace culture in which safety takes
precedence over everything else, we are undertaking
Company-wide activities to put the DNP Group Safety and HealthCharter into practice. While facilitating TAIWA with all employees,
we have set a specific target to improve the workplace culture ofmanufacturing departments. To achieve this target, we haveorganized a Manufacturing Safety Promotion Project in eachmanufacturing site and started the Tsuki-ichi Kyoiku Activity (anactivity to set aside an hour each month for TAIWA and education).

Meeting to examine how the sharing of information among workplaces
impacts safety and health

Initiatives for Human Rights

Diversity & Inclusion

Formulation of the DNP Group Human Rights Policy

DNP has been promoting the active role of women since theearly 2000s, and with the establishment of the Diversity
Promotion Department in June 2018, stepped up its efforts
to create value by leveraging diversity.
In the fiscal year ended March 31, 2020, our focus wasplaced on matching and synergizing diverse strengths byexpanding the scope of our activities from promoting womenʼs active engagement to supporting more active roles ofdiverse human resources, including employees withdisabilities, LGBT+ employees, employees of different
nationalities and senior employees.

Enhancing the menu of diversity training

Efforts related to LGBT+In addition to the Diversity Course and Normalization Education
Training, which are designed to foster an understanding ofvalue creation underpinned by diversity, we conduct, among
others, training to nurture mentors who will be providing
consultation and advice, next-generation female leaders
training aiming for more active engagement of women andtraining to nurture diversity promotion leaders in the workplace.

We launched activities to foster an organizational culture thathas an understanding of LGBT+ and leverages diversity. We
are examining inclusion-conscious measures, such as not
requiring applicants to enter gender on job application forms
and revising various related systems. In order to disseminate
DNPʼs approach in this area both to employees and outside
parties, we will also sponsor various events and participate insocial activities supporting LGBT+.

In the international community, human rights have recently
been recognized as a key issue having equal significance as theenvironment, and efforts are being made to resolve humanrights challenges with the United Nations playing a leading role.
With a view to further reinforcing human rights
management, we formulated the DNP Group Human Rights
Policy in March 2020. This policy aims to protect theinternationally recognized human rights as stated in the UN
International Bill of Human Rights and International Labour
Organization (ILO) Declaration on Fundamental Principles andRights at Work and shows our commitment to carrying out
corporate activities in conformance with the UN Global
Compact and UN Guiding Principles on Business and Human
Rights.

DNP Group Human Rights Policy
1. Basic Principles and Position
2. Scope
3. Compliance with
Applicable Laws
4. Human Rights Due Diligence

5. Remedies
6. Education and Training
7. Communication with
Stakeholders
8. Disclosure

In addition to all employees within the DNP Group, we also
make sure, through the DNP Group CSR Procurement
Guidelines, that our suppliers and business subcontractors
implement and promote relevant initiatives.

Human Rights Risk Assessment for Overseas Group Companies

E-learning textbook of
the Diversity Course

50

In accordance with the DNP Group Human Rights Policy, we
have conducted a survey and evaluation of nine Group
companies* doing business in Southeast Asia, Europe andthe United States by using the Human Rights Compliance
Assessment Quick Check of The Danish Institute for Human
Rights. The results showed no major problems requiring

immediate action. We will continue to make efforts to preventand mitigate related risks through such means as holding
interviews with stakeholders.
* Survey subjects
DNP Indonesia, DNP Vietnam Co., Ltd., Tien Wah Press Ltd., DNP Imagingcomm Asia Sdn. Bhd.,
DNP Imagingcomm America Corporation, Foto Fantasy, Inc., DNP Photomask Europe S.p.A., DNP
Denmark A/S, DNP Imagingcomm Europe B.V.

DNP Integrated Report 2020

51

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INITIATIVES FORVALUE CREATIONTOWARDSUSTAINABLE GROWTH

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

Corporate Governance
DNP regards enhancement of corporate governance as a top management priority in order to contribute tosustainable development of society, increase enterprise value and win the trust of our various stakeholders. The
Company endeavors to establish and operate systems that enable proper managerial decision-making, prompt andappropriate 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 of Corporate GovernanceMembers of Directors and Statutory Auditors (As of June 26, 2020)

Increase in the Number of
Outside Directors
To further enhance the transparency andsupervisory function, the Company at the General
Meeting of Shareholders on June 2020 approved
to propose the increase of the number of outside
directors from three (3) to four (4) at this General
Meeting of Shareholders.

OutsideDirectors

OutsideStatutory
Auditors

FemaleCorporate
Officer

persons

persons

personDirectors
10 persons

Statutory Auditors
5 persons

Corporate Officers
28 persons

4

3

1

Transition in Corporate Governance
〜2003
●

〜2015

2004

Started selection ofoutside directors●

Member of Board of Directors

Board of Directors(2002)

Shortened term of
the Director to 1 year●

(2007)

Establishedadvisory committee(2015)

2016 〜●

Introduced the evaluationof the effectiveness of theoverall Board of Directors(2016 -)

Outside Director
1 person

Outside Director
1 person

Outside Director
2 personsOutside Director
2 persons

2004

2010

2014

2016

Directors(exc. Outside Director)
34 persons

Directors(exc. Outside Director)
19 persons

Directors(exc. Outside Director)
16 persons

Directors(exc. Outside Director)
10 persons

2018

2019

2020

Dialogue with Outside Directors
A meeting of independent outside directors wasconvened on July 7, 2020. During this meeting, theparticipants exchanged the following opinions about
future initiatives based on the results of an evaluationof the effectiveness of the Board of Directors that was
implemented in the previous fiscal year.
Nomura: With the addition of our new outside director,
Mr. Sasajima, the Companyʼs Board members now
consist of a total of eight inside and seven outside
directors and statutory auditors. To convene theCompanyʼs Board of Directors even more efficiently inthe future while assuring its effectiveness, I believe a key
issue is how we will balance the composition of board
members to enhance management oversight functions.
Sasajima: I just recently assumed my position and thus
have only attended meetings of the Board of Directors
on two occasions. Even so, I feel that initiatives toimprove matters for which outside directors received
relatively low scores in the results of the evaluation ofeffectiveness in the previous year will help solve issues
facing the Board of Directors and eventually enable themto respond to the demands of society.
Tsukada: In the analysis of the evaluation ofeffectiveness, I regard the actual differential between
the scores of outside directors and those of internal
directors as a natural consequence of thebroad-ranging composition of the Board of Directors,
which consists of diverse directors with differingvalues. In the future, I believe it will probably bedesirable to continue taking creative approaches incarrying out the functions of the Board of Directors torealize decision-making that responds quickly tochanges in society while further reducing theinformation gap between internal and outside directors.
Matsuura: Although cited as one issue in the evaluationof effectiveness, I believe the understanding of outside
directors will be strengthened by reporting on individual
proposals in conjunction with company-wide policies
such as our Group governance and financial strategy.
On the other hand, inside the Company thoroughgoing
discussions from a company-wide perspective are

already undertaken in advance by the time proposed
resolutions are actually presented. With this in mind, I
believe we have room for further creative methods in theways we provide information to outside directors so thatthey can further execute supervisory functions indecision-making at the Board of Directors.
Tomizawa: At the Companyʼs Board of Directors
meetings, as the persons responsible for individual
business execution, corporate officers mainly report on
proposed resolutions and board members discussthese. However, from the standpoint of outside
directors, an information gap develops between themand directors who have already been involved inextensive discussions internally. I believe this gap willfurther shrink through more creative methods ofpresentations by corporate officers.
Miyajima: Outside directors receive explanations ofproposed resolutions at the Board of Directors
meetings in advance from the Secretariat of the Boardof Directors. Therefore, I believe there is still room forthe corporate officers who make the reports tounderstand the opinions of outside directors expressedat briefing sessions and then streamline and report on
the main points at the Board of Directors meetings.
Morigayama: Due to the impact of COVID-19,
shareholders cooperated and refrained as much as
possible from attending this yearʼs General Meeting of
Shareholders. To enhance the understanding of the stateand details of dialogues with shareholders and todeepen discussions, I believe it would be beneficial if we
could be provided with more detailed explanations at theBoard of Directors meetings and other occasions about
opinions received at the Companyʼs individual dialogues
and IR meetings with shareholders and investors.
Tsukada: This dialogue serves as an informative anduseful means for effectively utilizing the timeframe oflimited meetings of the Board of Directors by examining
how reporting by corporate officers at the Board of
Directors can deepen the understanding of all board
members on the same level. This will also probably be agood initiative from the perspective of developing humanresources who will support the DNP Group in the future.

From rightOutside Director●

Tadao Tsukada

Discontinued the takeover
defense measures (2019)

Outside Director

Tsukasa Miyajima

52

Member of Board of Directors

Board of Directors

Outside Director

Outside Director
2 personsOutside Director
3 personsOutside Director
4 personsRyuichi Tomizawa
Outside Director

Kazuyuki Sasajima
Outside Statutory Auditor

Kuniaki Nomura

2018

2019

2020.6

Outside Statutory Auditor

Makoto Matsuura

Outside Standing Statutory Auditor

Directors(exc. Outside Director)
9 persons

Directors(exc. Outside Director)
6 persons

Directors(exc. Outside Director)
6 personsKazuhisa Morigayama

DNP Integrated Report 202053

TOP MESSAGE MANAGEMENT PLAN

Corporate Governance

453

500

DNP examines strategic shareholdings, basedon business status between the Company andeach company issuing such shares, trends inoperating performance of such company, etc.,
and regularly verifies the significance andpurpose of such shareholdings. Therefore, theCompany sold part of its strategic shareholding
shares in the fiscal year ended March 31, 2020and enhanced asset efficiency.

stocks403

stocks400

348

stocks

331

318

303

stocksstocksstocks2018.32019.32020.3

300
200
100
0

2003.32008.32017.3General Meeting of Shareholders
Board of Directors

Audit

Audit

Advisory Committee

Management Committee

Executive Directors

ReportingCorporate Ethics Committee(Autonomous implementation,
inspection, review, improvement)

Information Security Committee

Audit

Quality Assurance & Product Safety Committee

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, IR and Public Relations Division, Corporate
Communication Division, Legal Affairs Department, etc.)

BCM Promotion Committee

Guidance
Training

Central Disaster Prevention Council
Audit
Guidance

ReportingAssistance

Board of Statutory Auditors

CSR & Environmental Committee

Audit Unit

Check

Audit

Information Disclosure Committee
Auditing Department

Head Office(Oversight of compliance system)

Open Door RoomCorporate Officers
in charge
Operating Units

Accounting Auditors

ReportingGroup companies

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）(1) Matters concerning policies regarding the amounts and calculation methods fordetermining compensation for directors and statutory auditors

Corporate Governance Structure

Business units

TOWARDSUSTAINABLE GROWTH

Compensation Paid to Directors and Statutory Auditors

Strategic Shareholding Shares

Audit

INITIATIVES FORVALUE CREATION

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 is determinedtaking into consideration such factors as job duties handled andresponsibilities. Performance-based compensation is primarily
determined taking into consideration consolidated businessresults 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's directorsʼ shareholding association every
month for the purchase of treasury stock and these sharesshall be held 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.
In determining directorsʼ compensation, the Advisory
Committee with membership consisting of outside directors(two outside directors and one outside auditor) withindependence shall be convened. This shall then bereviewed and discussed by the Management Committee

based on the advice and suggestions of the Advisory
Committee and is subsequently deliberated and decided onby the Board of Directors.
The Board of Directors possesses the authority todetermine policies regarding the amount of compensation
for DNPʼs directors and the calculation method and thecontent of this authority and scope of discretion for
deliberating 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 indicators for performance-based compensation are
consolidated operating income, net income attributable toparent company shareholders and return on equity (ROE).
These indicators were selected because it clearly reflects
consolidated business results for the fiscal year in
performance-based compensation.
The targets for the indicators for performance-based
compensation in the fiscal year were 51.0 billion yen forconsolidated operating income, 65.0 billion yen for net
income attributable to parent company shareholders and6.6% for ROE, and the actual results were 56.2 billion yen,
69.4 billion yen and 7.3%, respectively.
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
by type 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

Total compensation by type (¥ million)

Directors (excluding outside directors)

858

689

169

9

Statutory auditors (excluding outside auditors)

59

59

−

3

Outside directors and auditors

131

131

−

7

Notes:
1. Amounts of performance-based compensation are provisions for bonuses for directors and statutory auditors for the fiscal year ended March 31, 2020.
2. There were six internal directors, two internal statutory auditors and six outside directors as of the end of the fiscal year ended March 31, 2020.

Reporting
Coordination(3) Company directors and total compensation
Total
compensation

Director typeCompany

Yoshitoshi Kitajima354

Director

Yoshinari Kitajima

186

Director

Name

Total compensation by type (¥ million)
Fixed compensation

Performance-based
compensation

Dai Nippon Printing Co., Ltd.

294

60

Dai Nippon Printing Co., Ltd.

151

35

(¥ million)

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 31, 2020.

54

DNP Integrated Report 2020

55

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Corporate Governance

TOWARDSUSTAINABLE GROWTH

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

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

Compensation Paid to Accounting Auditors

Stocks held for reasons other than pure investment purposes(1) Compensation paid to accounting auditors
Fiscal year ended March 31, 2019

Fiscal year ended March 31, 2020

Category

Compensation for audit
certification (¥ million)

Compensation forother services (¥ million)

Compensation for audit
certification (¥ million)

Compensation forother services (¥ million)

Dai Nippon Printing Co., Ltd.

96

−

122

3

Consolidated subsidiaries

126

−

130

−

Total

222

−

252

3

(2) Compensation paid to individual member firms affiliatedwith the same network, to which auditors belong(excluding the compensation paid to KRESTON International (1))None(3) Other material compensation details
None(4) Details of services other than auditing work provided by
the accounting auditor to the submitting company
Services including comfort letter creation regarding
issuance of corporate bonds(5) Determination of compensation for audit services
DNPʼs compensation for auditing services is determinedbased on a variety of factors, including the number of
expected days for the audit and the company size.
(6) Reason Board of Statutory Auditors consented tocompensation for the accounting auditor
The Companyʼs Board of Statutory Auditors considers
such areas as details of the accounting auditorʼs 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.

Company name

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

Lion Corporation
Taisho Pharmaceutical
Holdings Co., Ltd.
Meiji Holdings Co., Ltd.

Toyo Suisan Kaisha, Ltd.

FUJIFILM
Holdings Corporation

Stockholdings(1) Basis of classification of investment securities
and rationale
The Company does not possess investment securities for pureinvestment purposes aimed at obtaining profits throughfluctuations in stock prices or by receiving dividends. The
investment stocks acquired by the Company are for the purposeof strengthening relationships with customers in implementing
sales strategies and strengthening collaborative relationships
with partners for the co-development of new technologies andnew products and these are classified as stocks held for reasons
other than for pure investment purposes.
(2) Stocks held for reasons other than for pureinvestment purposes
1. Stockholding policy, method for validating rationale forstockholdings and details of validation at Board of Directors
concerning the propriety of individual stockholdings
The Company specifically closely examines individual stocks
based on trends in the status of business transactions withthe company issuing the stock, trends in business results ofthat company, the Companyʼs 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, 2020, thenumber of individual stocks held by the Company decreased
by 20 stocks as listed on the right.

2. Number of stocks and amounts recorded on balance sheets

Mizuho Financial Group, Inc.

Number ofcompanies(Stocks)

Total amounts recorded onbalance sheets (¥ million)

Kobayashi PharmaceuticalCo., Ltd.

Non-listed stocks

112

12,436

Stocks other than
non-listed stocks

191

223,517

YAKULT HONSHA CO., LTD..

Dexerials Corporation(Stocks for which number of shares increased in the fiscal
year ended March 31, 2020)
Number ofcompanies(Stocks)

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

Reason for increasein number of shares

Non-listed
stocks

3

195

For strengthening ourbusiness alliance

Stocks other than
non-listed stocks

11

20

For enhancing ourbusiness relationship

Hakuhodo DY Holdings Inc.

Gakken Holdings Co., Ltd.

MORINAGA & CO., LTD.

Asahi Group Holdings, Ltd.

(Stocks for which the number of shares decreased in thefiscal year ended March 31, 2020)

Non-listed stocks
Stocks other than
non-listed stocks

Number ofcompanies(Stocks)

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

5

62

15

55,613Fiscal year ended
March 31, 2020
Number of shares
Amount recordedon balance sheet

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

40,100,000

58,100,000(¥ million)

Aica Kogyo Co., Ltd.

56

INITIATIVES FORVALUE CREATION

Kikkoman Corporation

AI inside Inc.

Sapporo Holdings Limited(¥ million)

112,119

183,654

6,606,600

6,606,600

8,558

10,1601,617,062

1,616,286

7,341

9,406

3,140,665

3,140,665

7,264

7,317

692,700

692,700

4,599

7,307

564,400

564,400

4,334

5,073

794,980

794,980

4,149

3,350

1,293,743

1,293,743

4,004

4,773

685,965

685,965

3,730

3,453

27,134,319

27,134,319

3,353

4,648

317,645

316,915

3,176

2,959

350,500

350,500

2,239

2,712

3,125,000

3,125,000

2,181

2,293

1,720,000

1,720,000

1,874

3,058

236,875

236,875

1,749

1,217

393,000

393,000

1,737

1,888

480,029

480,029

1,684

2,366

350,940

350,940

1,616

1,905

100,000

−

1,610

−

759,277

759,277

1,513

1,835

Companyʼsownershipof DNP
sharesHolding purpose, quantitative effect of ownershipand the reason for increase of number of shares

(Y/N)

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. We sold a part of thecompany ʼs shares in the fiscal year ended March 31, 2020.

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, 2020, 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

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 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, 2020, 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.

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.

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.

N

We hold the companyʼs shares aiming to strengthen our business alliance. While the quantitative
effect of ownership is not stated, we have verified significance and purpose of shareholding
through close investigation of the transaction status and the prospects of businesses with thecompany. Because of stock listing, the companyʼs stock is classfied as a stock held forreasons other than pure investment purposes from the fiscal year ended March 31, 2020.

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.

DNP Integrated Report 202057

TOP MESSAGE MANAGEMENT PLAN

Corporate Governance

Company nameFiscal year ended
March 31, 2020
Number of shares
Amount recordedon balance sheet(¥ million)

S&B FOODS INC.
YAMATO HOLDINGS CO., LTD.

Ajinomoto Co., Inc.

Unicharm Corporation
Mitsubishi Chemical
Holdings Corporation
Hulic Co., Ltd.

HOUSE FOODS GROUP INC.

Oji Holdings Corporation

TAKARA HOLDINGS INC.
Mitsubishi UFJ
Financial Group, Inc.

344,400

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

344,400

1,413

1,434

830,300

830,300

1,409

2,373

630,931630,931

1,268

1,116

290,700

290,700

1,177

1,064

1,799,790

1,799,790

1,156

1,402

1,040,000

1,040,000

1,141

1,129

309,297309,297

1,090

1,376

1,840,800

1,840,800

1,065

1,264

1,200,000

1,200,000

972

1,570

2,399,760

2,399,760

967

1,319

Companyʼsownershipof DNP
sharesHolding purpose, quantitative effect of ownershipand the reason for increase of number of shares

(Y/N)

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 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.

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.

Notes:
1. Stocks held for reasons other than pure investment purposes and stocks held in trust with voting rights are not added together when selecting stocks with the largest amounts as recorded in the balance sheet.
2. The quantitative effect of ownership is not stated because of matters concerning business agreements with the business partner. In terms of the rationality of the holding, we have periodically verified thesignificance and purpose of shareholding through close investigation of the transaction status with the company, financial results of the company, business status of DNP, the medium- to long-term
economical rationality and the prospects.
3. In the companyʼs ownership of DNP shares, in case that the company is a holding company, the holding status of the parent company and its major subsidiaries is stated.
4. Gakken Holdings Co., Ltd. split its ordinary shares four-to-one on April 1, 2020.
5. Among stocks held for reasons other than pure investment purposes, the 30 stocks with the largest amounts as recorded in the balance sheet are listed.

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

Company nameFiscal year ended
March 31, 2020
Number of shares
Amount recordedon balance sheet

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

7,722,000

7,722,000(¥ million)

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

(¥ million)

28,725

26,1004,030,000

4,030,000

6,576

7,826

2,284,000

2,284,000

3,816

3,788

1,000,000

1,000,000

1,996

2,745

500,000

500,000

405

654

Companyʼsownershipof DNP
sharesHolding purpose, quantitative effect of ownershipand the reason for increase of number of shares

(Y/N)

Y

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

N

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

N

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

N

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

Y

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

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

(3) Stocks held for pure investment purposes
None
58

INITIATIVES FORVALUE CREATIONTOWARDSUSTAINABLE GROWTH

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

Board of Directors,
Statutory Auditors andCorporate Officers(As of June 26, 2020)

Kenji Miya

Yoshinari Kitajima

Chairman

Director

Yoshitoshi Kitajima

Tadao Tsukada

President

Director

Yoshinari Kitajima

Yoshitoshi Kitajima

Masahiko Wada

Senior Executive
Corporate Officers

SeniorCorporate Officers

Corporate
Officers

Sakae Hikita

Toshiki Sugimoto

Ryota Chiba

Tsukasa Miyajima

Masato Yamaguchi

Naohiko Sugimoto

Souichiro Nishitani

Senior Managing Director

Director

Motoharu Kitajima

Kiyotaka Nakagawa

Kazuhisa Kobayashi

Masahiko Wada

Ryuichi Tomizawa

Ryuji Minemura

Daiji Suzuki

Minako Miyama

Senior Managing Director

Director

Morihiro Muramoto

Nobuyuki Asaba

Takahito Kanazawa

Kenji Miya

Kazuyuki Sasajima

Mitsuru Tsuchiya

Go Miyazaki

Managing Director

Standing Statutory Auditor

Kazuhiko Sugita

Naohiro Nishizawa

Satoru Inoue

Naoki Hoshino

Masafumi Kuroyanagi

Kazuo Murakami

Managing Director

Standing Statutory Auditor

Yoshiki Numano

Hiroyuki Matsumura

Hirofumi Hashimoto

Toshio Sano

Osamu Nakamura

Takuya Goto

Standing Statutory Auditor

Toru Miyake

Minoru Nakanishi

Kazuhisa Morigayama

Mitsuru Iida

＊1

＊1

＊1

＊1

＊2

Statutory Auditor

Makoto Matsuura＊2
Statutory Auditor

Kuniaki Nomura＊2＊ 1 Outside directors＊ 2 Outside statutory auditors

DNP Integrated Report 2020

59

TOP MESSAGE MANAGEMENT PLAN

INITIATIVES FORVALUE CREATIONTOWARDSUSTAINABLE GROWTH

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

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

U.S. dollars inthousands except per
share amounts

2019

2018

2020

¥ 1,401,894¥ 1,401,506¥ 1,412,252$ 12,861,413

0.0 %Operating income

56,27449,89846,372516,275

12.8 %

Ordinary income

63,78658,25950,971

585,193

9.5 %Income (loss) before income taxes

102,719(18,685 )

45,396942,376ー

Net income (loss) attributable to parent company shareholders

69,498(35,669 )

27,501

637,596

ーStatements of Operations (¥ million)
Net sales（ FINANCIAL AND NON-FINANCIAL INFORMATION）($ thousand)

968,575¥ 1,046,622

Interest-bearing debt

211,646

Stockholders' equity

915,779
1,721,724

Total net assets¥

Total assets¥ 1,102,551$ 8,886,009

166,350

170,105

1,941,706

27.2 %

996,162

1,053,600

8,401,642–8.1 %

1,775,023

1,794,764

15,795,633–3.0 %Cash Flow Statements (¥ million)
Cash flows from operating activities

2020 / 2019($ thousand)

Balance Sheets (¥ million)

BUSINESS RESULTS

Change2020–7.5 %($ thousand)¥

93,937¥

68,972¥48,457$

861,80736.2 %Cash flows from investing activities

191,057(146,909 )

23,074

1,752,817

ーCash flows from financing activities(41,281 )(32,197 )(42,771 )(378,724)

ーFree cash flow

284,994(77,937 )

71,5312,614,624

ー＊1

Per Share Data (¥)＊2, 3
Net income (loss) - primary($)¥

235.18¥(118.22 )

¥

90.77

$

2.16

ー

3,260.38

3,300.52

3,493.79

29.91–1.2 %

64

64

48

0.59

ー

Operating income

4.01

3.56

3.28

4.01

0.45

EBITDA margin

11.32

3.03

7.70

11.32

8.29

Net income (loss)

4.96(2.54 )

1.95

4.96

7.50

ROE (%)

7.27(3.48 )

2.63

7.27

10.75

ROA (%)

3.97(2.00 )

1.55

3.97

5.97

Equity ratio (%)

53.19

56.12

58.70

53.19

–2.93

PER (times)

9.78(22.39 )

24.22

9.78

ー

PBR (times)

0.71

0.80

0.63

0.71

ー

EV/EBITDA (times)

2.94

16.07

5.30

2.94

ー

PCFR (times)

5.21

34.12

7.48

5.21

ー

Dividend yield (%)

2.78

2.42

2.18

2.78

0.36

Net assets
Cash dividend
As a Percentage of Net Sales (%)

Financial Ratios

Valuations (against share price on March 31)

60

61

Summary of Financial Results

62

DNPʼs Business Portfolio

64

Our Products and Services

66

Business Strategies andFinancial Highlights

72

Financial and Non-financial Data

75

Managementʼs Discussion and Analysis

82

Selected Financial Data (unaudited)

84

Consolidated Financial Statements

109

Independent Auditorʼs Report

Returns to Shareholders
Values of shares repurchased (¥ million)($ thousand)¥

60,013¥ー¥

14,998$550,578

ー

Dividend payout ratio (%)

27.21

ー

70.50

27.21

ー

Total return ratio (%)

113.1

ー

124.8

113.1

ー

Long-term credit rating (R&I)

AA−

AA–

AA–

AA–

ー

Foreign ownership (%)

24.14

24.85

24.58

24.14

–0.71

OthersU.S. dollar amounts have been translated from yen, for convenience only, at the rate of ¥109 = U.S.$1, the approximate Tokyo foreign exchange market rate as of March 31, 2020.
*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.

DNP Integrated Report 2020

61

TOP MESSAGE MANAGEMENT PLAN

55.0％ 773.1 billion yen
Lifestyle and Industrial Supplies

1,401.9billion yen(Year ended March 31, 2020)

27.8％ 391.4 billion yen
Electronics

13.3％ 186.6 billion yen
Beverages
Beverages

3.9％ 55.3 billion yen
Operating Income
Printing
Information Communication

39.1％ 30.4 billion yen
Lifestyle and Industrial Supplies

56.3

billion yen(Year ended March 31, 2020)

14.4％ 11.1 billion yen
Electronics

43.9％ 34.1 billion yen

Information Communication

Information Communication

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

Facilitating access to books and broadening the reading experience■ Net Sales ■ Operating Income■ Assets ■ Depreciation(¥ billion)(¥ billion)

Information Innovation Business: Marketing

Net Sales

In order to bring new value to consumers and corporations

1,000
800 778.6

Information Innovation Business: Information Security

600

Using security technologies to enable safe and secure communication

400

Operating Income

Assets100

1,000

762.3 773.1

30.4

24.8

21.8

200

Imaging Communication Business

80

800

60

600

40

400

20

200

0

0

0

18

Depreciation

902.7

100

796.8

80
60
40

27.0

25.7

23.5
20
0

20

19

893.8

18

19

20

Adding value to all aspects of imaging, and adding color to people ʼ s lives

Lifestyle and Industrial Supplies

Printing

TOWARDSUSTAINABLE GROWTH

Publishing Business

Packaging Business
Wrapping safely, providing easy-to-use packages with minimal stresson the environment■ Net Sales ■ Operating Income■ Assets ■ Depreciation(¥ billion)(¥ billion)
Operating Income

AssetsDepreciation

1,000

100

1,000

100

Living Spaces Business

800

80

800

80

Adding comfort to the various spaces where people spend time

600

60

600

Net Sales

400

Industrial High-performance Materials Business
Adding essential value to various companies ʼ products and services

Display Components Business
Freely shaping displays to suit individuals and society

Electronics

Net Sales

The Three Segments of DNP's Printing Business

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

情 報コミュニ
情
ケ報
ーコ
シミ
ョ
ュ
ン
ニ
情
部
ケ報
門
ーコ
シミ
ョ
ュ
ン
ニ部
ケ門
ーション部情門報コミュニ
情ケ
報ー
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DNPʼs Business Portfolio

INITIATIVES FORVALUE CREATIONElectronic Devices Business
Creating next-generation electronic devices through ingenuity at thenano level

397.2

394.3

200

12.1

391.4
11.1

8.4

40

400

20

200

0

0

0

18

454.0

423.9

16.5

16.4

16.0

18

19

20

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

Net Sales

40
20
0

20

19

60

445.3

Operating Income

AssetsDepreciation

1,000

100

1,000

100

800

80

800

80

600

60

600

60

40

400

40

20

234.1 225.1 208.4
200
12.2
11.6
9.7

20

400

34.1

36.9

34.1

192.4

186.6

19

20

■ Net Sales■ Operating Income

80

200 188.8
0

0

18

0

0

18

19

20

Beverages
billion yen

Beverages

2.6 2.0％

Beverages

Beverages(¥ billion)

Beverages Business
Refreshing and thirst quenching, fun and always there for you

Net Sales

60
40

Operating Income
4

56.1
56.0
55.3
2.2
2.1
2.0

20

2
1
0

0

18

62

3

19

20

DNP Integrated Report 2020

63

TOP MESSAGE MANAGEMENT PLAN

INITIATIVES FORVALUE CREATIONTOWARDSUSTAINABLE GROWTH

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

Our Products and Services
Information Communication
Publishing Business

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

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

VR of the inner sanctuary of
the Ninna-ji Temple “Kondo”

Information Innovation Business
Marketing
4 Flyers and catalogs
5 LINE flyer● BPO (Business Process Outsourcing)
6 BPO● 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 Identity verification service 12 Transparent hologram ribbon●

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

14 Dye-sublimation photo printer

15 Self-service photo printing systems

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

22 Aseptic filling systems for PET plastic bottles

Living Spaces Business23 Olefin-based sheets for flooring
24 Residential interior materials (floor coverings)
25 Exterior materials for buildings

26 Curved resin glazing

27 Interior coverings for railway cars (Hokuriku Shinkansen)

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

Electronics
Display Components Business
32 Color filter for liquid crystal display

33 Large-scale photomask

34 Touch panel sensor

35 Optical films used for displays

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 OLED 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

64Suica is a registered trademark of East Japan Railway Company. The names of products and services on the cards are trademarks or registered trademarks of the respective companies.

DNP Integrated Report 2020

65

TOP MESSAGE MANAGEMENT PLAN

Business Strategies and Financial Highlights

INITIATIVES FORVALUE CREATION

Main Initiatives

TOWARDSUSTAINABLE GROWTH

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

Financial Highlights

1. Create value primarily in growth areas
Create new value in our publishing businessWe will enhance the business of our “honto” hybrid bookstore
network that links an e-commerce website where customers canbuy e-books and paper books with the brick-and-mortar storesoperated by MaruzenJunkudo Bookstores Co., Ltd., thereby striving
to expand the publishing content-related market, while also
contributing to the development of a publishing culture that supports
people's knowledge.
●

Information Communication

Undertake“digital transformation”
to provide newexperience value
to companies andconsumers alike

Promote hybrid marketing
We will develop our marketing methods through digitaltransformation and solve marketing issues faced by companies by
providing new experience value through the hybridization of our
myriad strengths in digital and analog, face-to-face andnon-face-to-face, real and virtual.
●

Support diversified cashless settlements
We will support settlement methods such as credit, debit andprepaid, as well as develop and operate mobile wallet services thatallow settlement with smartphones. In addition to developing apps
and manufacturing cards, we will contribute to the growth of acashless society by providing various settlement services.

As information networks expand around the globe and various
types of information terminals become commonly available,communication services have continued to evolve.
Furthermore, telecommuting and online shopping have gained
speed as part of measures to prevent the spread of the novel
coronavirus, and the search continues for a new normal in
educational ICT and online medical examinations among
other fields, so consumer values and lifestyles are changing
dramatically. For many years, DNP has refined the strengthsof P&I (Printing and Information) and has developed products
and services that combine the advantages of both digital andanalog technology, reality and virtual reality. DNP adapted
early to the digitization of information, and even in the midstof recent rapid changes, we are working with a multitude ofpartners to provide new value that will lead to inspiringexperiences and better convenience for consumers.
The Information Communication segment consists of the
Publishing Business responsible for publishing media andpublishing logistics, Information Innovation Business
responsible for marketing and information security andImaging Communication Business that creates “products andexperience” including photo prints. In addition to focusing on
the promotion of digital marketing and the spread of cashless
payment businesses, this segment accelerates BPO (Business
Process Outsourcing) in which DNP handles the business of a
growing number of companies that must respond to labor
shortages and work style reforms. In order to further increase
profits, this division will also promote structural reforms suchas rebuilding our manufacturing system in Japan.

Operating Income+1.4% +22.4%(¥ billion)

2018.32019.32020.3

Net sales¥ 778.6¥ 762.3¥ 773.1

Operatingincome

¥

¥

¥

21.8

Operatingincome margin

2.8 %

24.8
3.3 %

Promote imaging communication business that raises
experience value
We provide services related to high-quality photo prints and image
data through platforms such as our ID photo printing machine“ Ki-Re-i" networked in Japan and our “ Imaging Mall” cloud-based
image sales solution. In addition, we will expand various services
both in Japan and abroad that enhance the experience value ofphotography at theme parks and events.

2. Provide value optimized to each country and region
We will expand “Manga Planet,” which provides flat-rate unlimitedaccess to English editions of popular Japanese manga online. In thefield of smart cards, we will work with our business/capital alliancepartners among major card manufacturers in Vietnam and Indonesia
to make our business more competitive with a focus on Southeast
Asia. In Imaging Communication, we will further enhance ouroverseas manufacturing, sales and service systems, and expand not
only photo-related products for emerging countries, but also for all
aspects of imaging.

3. Increase value using all available restructuring
approaches
We will enhance our marketing that uses data from brick-and-mortar
bookstores where we have direct contact with consumers and makestructural reforms for more flexible production of books through tologistics, distribution and sales. In addition, we will optimize ourmanufacturing system as demand for paper media shrinks. In our
BPO business, we will strive to improve productivity and quality byintroducing AI (artificial intelligence), RPA* and digital workflow, andpromote operational efficiency by linking production bases in Japanand abroad.
* RPA (Robotic Process Automation): Initiatives to automate business processes using AI controlled robots (software)

30.4
3.9 %

●

●

Business Strategies

Net Sales(¥ billion)(Net sales)(Operating income)

1,000
800

100

778.6

773.1

762.3

80

600

60

400

21.8

24.8

30.4

200

40
20

0

0

18

19

20

■ Net sales ■ Operating income［ Net Sales ］

Although sales have decreased in paper
media such as magazines, books, leafletsand catalogs, sales have steadily
increased in smart cards and payment
service-related businesses, which haveseen increased demand due to thetransition to a cashless society, as well as
for the BPO business. As a result, sales
increased 1.4% year on year, or 10,769
million yen.
［ Operating Income ］

We worked to increase profitability by
improving our business portfolio, we also
benefited from cost structure reform done byreviewing the production system, resulting
in an increase of 22.4% year on year, or
5,573 million yen. As such, our operating
income margin increased 0.6 percentage
point year on year, from 3.3% to 3.9%.

DNP Integrated Report 202067

TOP MESSAGE MANAGEMENT PLAN

Business Strategies and Financial Highlights

INITIATIVES FORVALUE CREATION

Main Initiatives

TOWARDSUSTAINABLE GROWTH

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

Financial Highlights

1. Create value primarily in growth areas
Strive to be environmentally conscious and realize a
recycling-oriented society
Provide value in the form of “resource circulation,” “reducing CO 2”
and “conservation of the natural environment ” aimed at realizing a
recycling-oriented society, strengthen the development of eco-friendly
packaging, and expand sales of plant-based packaging materials. In
addition, as demand for clean energy grows, we will provide products
and services that reduce our environmental burden, such as backsheets and encapsulants for solar cells with excellent power
generation efficiency.

Net Sales●

Lifestyle & Industrial Supplies

Creating
high-performance
products and services
that are environmentallyfriendly and tailoredto the needs ofpeople and society

Provide new value that are comfortable and easy to use formany different people
We will respect diversity factors, including age, gender, language anddisabilities as individuality. Strive to do “inclusive design,” anevaluation method that brings a diverse range of people to participate
and incorporates those peopleʼs perspectives from the initial stagesof product and service development. In addition, we will quantify andanalyze trends among people in order to search for needs evenconsumers are not aware of, and promote spatial design based onsensitivity engineering. We will also provide value such as advanced
design and functionality, through advanced image processing
technology and monozukuri (manufacturing).
●

Products and services for a next-generation mobility society
We will contribute to realizing a next-generation mobility society throughour products and services. These include battery pouches forlithium-ion batteries, which have growing demand for use in electricvehicles, as well as decorative films/panels for interior-use that haveexcellent design and functionality and curved resin glazing that offers ahigh degree of freedom in spatial design and aids in weight reduction of
the vehicle body. It also includes sheet-type coils for wireless power
supplies that can charge without contact and DNPʼs “New AdhesiveFilm” that strongly adheres different materials, such as resin and metal.

-1.5% +33.0%(¥ billion)

2018.32019.32020.3

Net sales¥ 394.3¥ 397.2¥ 391.4

Operatingincome¥¥¥Operatingincome margin

The Lifestyle and Industrial Supplies segment consists ofbusinesses in three fields: Packaging, Living Spaces andIndustrial High-performance Materials. This segment mainly
provides familiar products and services that people take for
granted, as well as products and services deeply related to the
manufacturing process of companies, both in Japan andoverseas. Our Packaging business is striving to improve thefunctionality and stable supply of packaging for foods, beverages,
household items and pharmaceuticals. Our Living Spaces
business mainly handles a wide range of products and services
that make various spaces functional and comfortable. This
includes materials for residential use, commercial facilities,
medical institutes and nursing facilities, as well as interior andexterior furnishings for automobiles and railway cars. The
Industrial High-performance Materials business provides
components used in lithium-ion rechargeable batteries andphotovoltaic cells, as well as highly functional films that
contribute to solving environmental problems and other social
issues, with a grasp of social changes including the arrival of 5G.
DNP aims to improve the functions of these products andservices, and also strives to realize a stable supply by building
a strong supply chain. In addition, we are working on “universal
design” that is easily usable by many people and “inclusive
design” that incorporates perspectives of a diverse range of
people from the design stage. We are also focused on providing
value critical to safer, more secure and more comfortable living.
Furthermore, in order to realize a sustainable society, we willbuild a development and manufacturing system that takes into
consideration energy optimization and zero emissions, andstrive to reduce our environmental load and protect biodiversity
throughout the product/service life cycle.

2. Provide value optimized to each country and region
Our Packaging business is utilizing our production bases in Indonesia
and Vietnam to expand sales including neighboring countries such as
Thailand and Myanmar, and we are expanding our market share for
global companies with the aim of solving social issues in Southeast
Asia. Our Living Spaces business is utilizing our global sales network
to expand our market share in Europe, the United States and emerging
countries for metal panels and interior and exterior materials forautomobiles with excellent design. Our Industrial High-performance
Materials business will accelerate business development in the global
market for battery pouches for lithium-ion batteries, photovoltaic
module components and industrial barrier films used for displays.

3. Increase value using all available restructuring
approaches
We will review the DNP Groupʼs business portfolio from the standpointof value and improve production productivity and profitability. In
particular, we will improve profitability by reviewing low-profit
products and shifting more toward high-value-added products. As forour overseas business, we will respond more flexibly to risks such as
fluctuations in exchange rates and raw materials prices in order tominimize the impact on business results.

12.1
3.1%

8.4
2.1 %

11.1
2.8 %
(¥ billion)(Net sales)(Operating income)

1,000

100

800

80

600

60

●

Business Strategies

Operating Income

400
200

394.3

391.4

397.2

12.1

40

11.1

8.4

0

20
0

18

19

20

■ Net sales ■ Operating income［ Net Sales ］

There was an increase in sales of aseptic
filling systems for PET plastic bottles,
battery pouches for lithium-ion
rechargeable batteries in vehicles andphotovoltaic module components.
Meanwhile, there was a decline in sales of
paper and film packaging products as wellas interior and exterior materials forhousing. Overall, sales decreased 1.5%
year on year, or 5,812 million yen.
［ Operating Income ］

Due to the expansion of our Industrial
High-performance Materials business, aswell as the results of structural reforms in
the entire segment, and a decline in raw
material prices of petrochemical products
such as films, operating income increased
33.0% year on year, or 2,766 million yen.
Our operating income margin increased
0.7 percentage point, year on year, from
2.1% to 2.8%.

DNP Integrated Report 2020

69

TOP MESSAGE MANAGEMENT PLAN

Business Strategies and Financial Highlights

INITIATIVES FORVALUE CREATION

Main Initiatives

TOWARDSUSTAINABLE GROWTH

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

Financial Highlights

1. Create value primarily in growth areas
Develop and provide new products that raise the added
value of 5G compatible communication terminals
DNP has developed the “vapor chamber,” a heat-dissipating
component that suppresses overheating of 5G compatible
equipment, while still realizing a thickness of 0.25 mm, which isabout 30% thinner than conventional products. We have also
developed “ Transparent Antenna Film,” a product that receives
radio waves by forming an invisible thin metal wire on transparent
film, then attaching it to the interior displays, walls, windows,
ceilings and glass of the car body. We will also work to develop andprovide new products like these, and create value in the form ofminiaturization and higher functionality of information terminals for
5G/6G communication environments.
●

Electronics

Develop and provide
key components fordevices thatrealize advanced
integration of thereal and the digitalStrengthen development of products for OLED displays
In anticipation of growing demand for small and medium-sized
OLED displays for smartphones and tablet devices, we will increase
production capacity for metal masks used in manufacturing OLED
displays, for which we hold the top share in the world market. We
will also focus on developing products which meet various needs,
including foldable displays and rollable displays.
●

Refine and commercialize next-generation
photolithography-related technology
Utilizing EUV (extreme ultraviolet) lithography, a high-performancesemiconductor manufacturing technology indispensable to anadvanced information society, we will provide 5 nm state-of-the-art
photomasks for semiconductors manufacturing technology to both
domestic and overseas semiconductor manufacturers. In addition, as
the only supplier of master templates for semiconductor nanoimprint
lithography (NIL) in the world, we will build a mass production
system for NAND-type flash memory with a 3D (three-dimensional)
structure.
●

Business Strategies
The launch of the 5th generation communication standard(5G) service is expected to realize ultra-high-speed,
low-latency, multi-connection communications, as well as
advance the use of IoT and AI, and help popularize products
and services that further enrich people's lives. With the
integration of the real and digital, exemplified by wearable“smart glasses” that allow users to enjoy VR (virtual reality)
and AR (augmented reality), as well as smartphones thatallow users to watch high-definition videos on a large
foldable display, it has been predicted that demand will risefor various devices that can provide an immersive experience
regardless of location or time.
The Electronics segment has developed display related
products and electronic device businesses both in Japanand abroad, and will anticipate the changing needs ofcorporations and people, and provide new products andservices with superior functionality aiming to stay one stepahead.
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 andpartner companies that have specialized strengths in orderto accelerate commercialization process from thedevelopment stage. We will also actively develop allianceswith other companies, such as through technology grants.
We will strive to increase profitability and continue working
on the selection and concentration of product lineups,
increasing efficiency and thoroughly reducing costs.

Net Sales

Operating Income-3.0% -7.5%(¥ billion)

2018.32019.32020.3

Net sales¥ 188.8¥ 192.4¥ 186.6

Operatingincome¥ 34.1¥ 36.9¥ 34.1

Operatingincome margin18.1 %

19.2 %

18.3 %(¥ billion)(Net sales)(Operating income)

1,000

100

800

80

600

60

400
200

36.9

34.1

34.1

188.8

192.4

186.6

18

19

20

0

40
20
0

■ Net sales ■ Operating income

2. Provide value optimized to each country and region
In addition to using our bases of photomasks for semiconductors
established in Taiwan and China as a joint venture with Photronics,
Inc. (USA), we will use our strength to develop products from Japanand also cooperate on the technical side to develop our business inmarkets as far as East Asia, Europe and the United States. In
addition, we will closely follow global trade issues and country risks,
while also tracking the social issues and needs of people in various
countries and regions, striving to provide the value they need.

3. Increase value using all available restructuring
approaches
We will transform our business portfolio with consideration formarket growth and profitability. As part of this transformation, we
will further increase profitability by continuing the shift fromproducts such as color filters for liquid crystal displays, which havedeclining competitiveness caused by changes in the market, tohigh-value-added products related to 5G and OLED displays. In
particular, in our overseas business, we will respond more flexibly tofluctuations in exchange rates and raw material prices in order tominimize the impact on business results.

［ Net Sales ］

As the transition from LCD to OLED
displays for smartphones and other suchdevices progresses, sales of metal masks
for OLED panel production have increased
drastically. On the other hand, there has
been a decline in sales of color filters forliquid crystal displays and photomasks forsemiconductor products. As a result, sales
decreased 3.0%, or 5,834 million yen,
compared to the previous fiscal year.
［ Operating Income ］

Operating income decreased by 7.5%,or ¥2,777 million yen, compared to theprevious fiscal year, due to decreased
sales. Our operating margin decreased
0.9 percentage point year on year, from
19.2% to 18.3%.

DNP Integrated Report 202071

TOP MESSAGE MANAGEMENT PLAN

INITIATIVES FORVALUE CREATIONTOWARDSUSTAINABLE GROWTH

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

Financial and Non-financial Data
Net Sales

Operating Income(¥ billion)(¥ billion)

Net Income (Loss) Attributable toParent Company Shareholders

EBITDA

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

60

56.3
49.8

1,500

69.5

150
122.5

60

46.3

45.4

1,455.9 1,410.1 1,412.2 1,401.5 1,401.9

80

158.6

25.2

31.4

108.6

27.5

20

50

0

0

17

18

19

20

17

18

19

1,102.5

1,046.6
968.6

800
600

42.4

400

1,000

200

500
0

­35.6

-40

16

1,063.2 1,081.2

1,000

1,618.6

-20

16

1,200

1,500

500

0

3,300.5 3,260.4

2,000

20

1,000

3,493.7

2,500

100

33.5

3,361.1

3,000
103.4

40

40

3,500

20

16

17

18

19

0

0

16

20

17

18

20

19

16

17

18

19

20

16

17

18

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

235.18

250
200

3.56

3

3
81.57 90.76

100

5
4

3.28

3.12

150

50

4.01

4

4.96

1,000
2.31

53.09

1

-50

16

17

18

19

20

16

17

18

19

20

57.0

59.5

57.2
41.1

400
500

20

200
­2.54

-3

0

80

1,500

40

-2
­118.22

1,721.7

1,000

-1

-100
-150

915.8

600

0

0

1,718.6

996.1

60

1.79

1

2.23

2

1,053.6

20

97.2

800

1.95

2

1,017.4 1,033.8

100
1,741.9 1,794.7 1,775.0

19

16

17

18

19

0

0

16

20

17

18

20

19

0

16

17

18

19

20

16

17

18

19

20

* Figures include capital expenditures for intangible
fixed assets.

ROE

ROA

(%)

(%)
7.3

8

4
3

6

2
4

4.0

3.2

2.5

1.9

2

1.5

16

17

18

19

20

40
31.8

31.3

33.2

33.7

Free Cash Flow*(¥ billion)(¥ billion)

100

300

65.3

54.8
39.8

200
61.4

61.0

60

45.3

285.0

250
80
59.0

54.4

20

150
85.9

100
40

20
10

­2.0

Depreciation Expense

33.6

30

50

11.7

-50
­18.6

-20

-4

16

17

18

19

20

16

17

18

0

19

20

0

16

17

18

19

20

71.5

0

20

0

-3

-4

102.7

40

-2
­3.5

(¥ billion)

60

-1

-2

(¥ billion)
100

1.6

0

0

Research and Development
Expenditures

80

1

2.6

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

­77.9

-100

16

17

18

19

20

16

17

18

19

20

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

72

DNP Integrated Report 202073

TOP MESSAGE MANAGEMENT PLAN

Financial and Non-financial Data

Sales of Environmentally Conscious
Products and Services (by Segment)

Total Number of Employees(by Segment)

Number of Overseas Group Company
Employees (by Area)(¥ billion) (As of March 31, 2020)(persons) (As of March 31, 2020)(persons) (As of March 31, 2020)

Others 36.6

Corporate 2,327

Beverages
1,285Electronics
118.3

America
662

billion yen

Lifestyle andIndustrial Supplies
219.0

persons

persons

Waste Emissions (Including International Operations)

Emissions per-unit value(t-CO2/million yen)

GHG emissions (1,000 t-CO2)
1,500

1,027

1,000

100

100

80

80

1.50
961

Emissions per-unit value(kg/million yen)

Waste emissions (1,000 tons)

2.00

1,093

Asia
3,680

Information
Communication
20,294

GHG Emissions (Including International Operations)

916

60
49

1.00

60

51

52

48

40
0.78

500

0.73

0.69

0.65

0

18

19

36.9

34.3

36.3

20

0.00

17

40
34.9

0.50

Managementʼs Discussion
and Analysis

Business Environment and Overview of Operating Results for
the Fiscal Year Ended March 2020

4,741

Information
Communication
250.3

20

0

0

20

17

18

20

19

In DNPʼs business environment for the fiscal year ended March 2020, marketingand settlement methods diversified due to progress in digitalization, the trend of
new product development for a next-generation mobility society such as
autonomous driving picked up speed, and demand rose for environmentally friendly
products and services.
In these circumstances, we followed the company philosophy stating that “ TheDNP Group connects individuals and society and provides new values.” This
included bolstering core businesses with high profitability and growth potential,
especially products and services in which we have secured the top market share in
Japan or abroad. It also included working on structural reform to make us morecompetitive, such as reorganizing business divisions and Group companies.
We also set “Knowledge and Communication,” “Food and Healthcare,” “Lifestyleand Mobility” and “ Environment and Energy” as four growth areas in anticipating
global social issues and megatrends that will shape the future of our economy,society and environment. By combining these areas with our unique strengths in“ P&I” (Printing and Information), we promoted “ P&I Innovation” to create newvalue.
In the fourth quarter, the COVID-19 pandemic suppressed economic activity
globally, and local economies deteriorated rapidly, making the outlook uncertain
for the global economy. Yet, quarantine aimed at preventing the spread of the virus
also led to huge steps forward in telecommuting (working from home), as well as
electronic commerce and content services, and demand rose for educational ICT
and online medical examinations.
In response to these changes, DNP worked to provide “essential value” bytaking advantage of its strengths in advanced security infrastructure, as well as
overall work processes in the value chain and companies.

Net sales (¥ million)

Percentage of Female Managers
(%)
6.1

6.0

5.6

0.32

0.31

Number of Japanese Patents Held
16,0000.33

14,000

0.30

4.7

5.0

Lost Time Work Accident
Occurrence Rate
0.35

4.1

12,000

0.25

4.0

0.21

0.21

3.3

0.20
0.15

12,435 12,392 12,226

10,000

6,000

0.10

1.0

17

18

19

20

2019.32018.3¥ 1,401,506¥ 1,412,252

Gross profit margin (%)

20.9 %

20.1 %

19.9 %

Operating income margin (%)

4.0 %

3.6 %

3.3 %

Ordinary income margin (%)

4.5 %

4.2 %

3.6 %

Net income margin (%)

5.0 %−2.5 %

1.9 %Overseas sales for the DNP Group as a whole increased by ¥7,801 million, or
3.3% from the previous fiscal year, to ¥246,178 million. As a result, thepercentage of total sales increased by 0.6 percentage point, from 17.0% to 17.6%.
By region, including Indonesia and Taiwan, sales in Asia increased by 4.7%
compared to the previous fiscal year, to ¥169,659 million. In other regions
including the United States and Europe, sales increased 0.3% to ¥76,519 million.

(Year ended March 31, 2020)
Electronics
13.3%

Beverages
3.9%

Lifestyle andIndustrial Supplies
27.8%

Information
Communication
55.0%

Operating Income by Segment(Year ended March 31, 2020)
Beverages
2.6%

Information Communication
39.1%

Electronics
43.9%

Lifestyle andIndustrial Supplies
14.4%

DNP ʼs Overseas Sales(¥ billion)
250

234.6

226.7

238.4 246.2

202.5

200
150
100
50

2,000

0

16

2020.3¥ 1,401,894

Net Sales by Segment

4,000

0.05

0

74

11,858 12,358

8,000

3.0
2.0

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

CONSOLIDATED

38,181

Lifestyle andIndustrial Supplies
10,567TOWARDSUSTAINABLE GROWTH

Europe 399

Electronics
3,708

624.2

INITIATIVES FORVALUE CREATION

0

16

17

18

19

20

16

17

18

19

20

0

16

17

18

19

20

DNP Integrated Report 202075

TOP MESSAGE MANAGEMENT PLAN

Management ʼs Discussion and Analysis

Net Sales:¥773,079 million (up 1.4% YoY)
Operating Income:¥30,416 million (up 22.4% YoY)
● Operating Income Margin: 3.9% (up 0.6 percentage point)●●

Publishing BusinessInformation Innovation Business: Marketing
Despite Internet advertisements going strong, newspapers,
magazines, television, radio and DM advertising all decreased from last year,
so domestic advertising demand in the fiscal year ended March 2020
decreased 1.7% overall, according to Japanʼs Ministry of Economy, Trade andIndustry.
DNP While sales of paper media including leaflets and catalogs fell, POPsales rose because of sales promotions and cashless settlement
announcements following the consumption tax hike in October 2019. Digitalmarketing sales also remained steady, and overall sales exceeded theprevious year.
MarketInformation Innovation Business: Information Security
Market Credit card companies promoted the addition of IC chips to all credit
cards distributed in Japan aimed for the end of March 2020. Cashless
settlements accelerated following the consumption tax hike in October 2019.
DNP In addition to our smart card business focused on credit cards, our BPO(Business Process Outsourcing) business has grown steadily, and weachieved increased revenue.

Imaging Communication Business
Market Although the volume of photo printing is in a declining trend
worldwide, the market for dye-sublimation thermal transfer printing media(color ink ribbons and receiver paper) continues to perform strongly as a

76

TOWARDSUSTAINABLE GROWTH

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

result of demand shifting from silver halide printing. There is also growing
demand for uses such as printing of certificates and photo printing at eventsand sightseeing spots in Southeast Asia, the Middle East and China.
DNP Sales of thermal transfer printing media for photo printers decreased
due to foreign exchange rates, and sales of barcode ink ribbons also
decreased below the level of the previous year due to sluggish sales in Asia
and Europe. However, we were able to keep sales at about the same as theprevious year overall thanks to growth of our service creation business, inwhich we enhance the experience value of photographs taken at events andsightseeing spots.

Information Communication

Market Publication sales in Japanʼs publishing industry in the fiscal year
ended March 2020 were ¥1,222.0 billion (down 3.9% year on year). Amongthese publications, sales of monthly and weekly magazines were sluggish,
down 5.0% year on year to ¥555.7 billion, and books sales were also down
3.0% to ¥666.3 billion, according to Japanʼs Research Institute for
Publications. The number of bookstores declined from a peak of about
22,000 in 1999 to about 11,500 in 2019, according to Almedia. In contrast,
the market size for electronic books was estimated to increase by about
26.1% to ¥282.6 billion in the fiscal year ended March 2019, and is expected
to grow to ¥433.0 billion by the fiscal year ended March 2024, according to
Impress Corporation.
DNP DNP has worked to solve issues in the publishing industry as the only
domestic group of companies involved in the total supply chain, including
publishing planning, advertising, manufacturing, distribution and sales.
However, printing orders have decreased for both books and magazines. In
contrast, revenue has increased from our “honto” hybrid bookstore network,
which comprises bookstores, e-commerce and e-book sales, and membershiphas grown to 5.58 million members. Our library support business has also
grown, with more contracted libraries (1,489 libraries as of January 31, 2020,
up 124 year on year), and sales also exceeded the previous year. In ouracademic market sales business, large projects have decreased for the designand construction of educational or research facilities and libraries, but thisbusiness segment has enjoyed increased revenue overall.

INITIATIVES FORVALUE CREATION

Lifestyle and Industrial Supplies
Net Sales:¥391,357 million (down 1.5% YoY)
Operating Income:¥11,144 million (up 33.0% YoY)
● Operating Income Margin: 2.8% (up 0.7 percentage point)●●

Packaging Business
Market Unit sales of food packaging have tended to rise due to growing
demand for single serving meals brought about by shrinking household sizes,
but this growth is expected to taper off as the population of Japan shrinks.
Paper packaging has a high paper price to product price ratio, and there aremany competitor companies, so it has become normal throughout theindustry to accept low profits.
DNP We have worked to develop and sell eco-friendly packaging, and havealso revised low value-added products in order to improve profitability. Salesof aseptic filling systems for PET bottles increased, but sales were short ofthe previous year overall because of weak demand caused by cold summers
and warm winters, as well as decreased sales of low value-added general
purpose paper and film packaging.

Living Spaces Business
Market Domestic new housing starts decreased by 7.3% year on year to
approximately 880,000 in the fiscal year ended March 2020. Among these,owner-occupied houses decreased 0.3%, apartments and other rental
housing decreased 6.6% and condominiums decreased 16.1% year on year,
respectively, according to Japanʼs Ministry of Land, Infrastructure, Transport
and Tourism.
DNP In addition to highly functional environmentally conscious products
using our proprietary EB (Electron Beam) coating technology, we also worked
to secure sales of Arttec interior and exterior aluminum panels for thenon-residential field, including commercial facilities, offices and railroad cars.
However, demand for interior and exterior materials for housing was weak,
and sales fell short of the previous year overall.

Industrial High-performance Materials Business
Market Demand is rapidly growing for film-based battery pouches used inelectric vehicles, due to increasingly strict environmental regulations
worldwide aimed at reducing CO 2 emissions. The market for solar cells hasgrown in America, China and India thanks to accelerating introduction ofrenewable energy in countries and regions around the world.
DNP Sales of pouches for lithium-ion batteries installed in vehicles grewsignificantly, and parts for photovoltaic cells including encapsulants and backsheets also grew, so sales exceeded the previous year overall.

DNP Integrated Report 202077

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Management ʼs Discussion and Analysis

Electronics
Net Sales:¥186,602 million (down 3.0% YoY)
Operating Income:¥34,135 million (down 7.5% YoY)
● Operating Income Margin: 18.3% (down 0.9 percentage point)●●

Display Components Business
Market In the organic light-emitting diode (OLED) market for 2019, sales oflarge panels for TVs grew gradually and sales of new products such as
foldable smartphones also grew, causing shipments of small andmedium-sized displays to increase by 28.1% year on year to 610 million units.
However, as we entered 2020, the COVID-19 pandemic put the brakes on
demand growth for small and medium- sized panels. In the LCD panel
market, U.S.-China trade friction and the deteriorating global economy
caused demand to fall, especially for displays used in TVs. However, as weentered 2020, demand grew for displays used in PCs and tablet devices instep with the spread of telecommuting and online education.
DNP Sales of metal masks for OLED display manufacturing increased thanks
to rising demand for development of small and medium-sized panels.
However, sales of color filters for liquid crystal displays decreased due torestructuring of the business in response to falling demand. Sales of opticalfilms for LCD TVs decreased, but sales of optical films for OLED displays
increased, so revenue in this business segment increased overall.

Electronics Devices Business
Global semiconductor sales for 2019 decreased by 12% year on year to¥412.1 billion according to the World Semiconductor Trade Statistics. Looking
at each field, semiconductor memory shipments fell by 33% year on year in
response to data center investments made by major American companies in
2018.
DNP Semiconductor photomask sales decreased, and revenue decreased
overall.
MarketBeverages
Net Sales:¥55,292 million (down 1.3% YoY)
Operating Income:¥2,047 million (down 3.5% YoY)
● Operating Income Margin: 3.7% (down 0.1 percentage point)●●

INITIATIVES FORVALUE CREATIONTOWARDSUSTAINABLE GROWTH

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

Cost of Sales/Selling, General and
Administrative Expenses/Operating Income
The cost of sales totaled ¥1,109,052 million, down 0.9%, or ¥10,339 million, fromthe previous fiscal year. The gross profit margin was 20.9%, up 0.8 percentage
point from the previous year.
Among our primary raw materials, prices for naphtha (crude gasoline) used as
the main ingredient in petrochemical products decreased below the level of theprevious year. This caused the prices of petrochemical products such as films andresins to fall as well. In contrast, printing paper has long been in short supply, andsince the price rose in January 2019, it has remained high ever since. DNP has
passed on the rising prices to customers through negotiations with our clientcompanies.
Selling, general and administrative expenses totaled ¥236,568 million in thefiscal year under review, up ¥4,351 million, or 1.9%, from the previous fiscal year.
Selling, general and administrative expenses were 16.9% of net sales, up 0.3
percentage point from the previous fiscal year.
As a result, operating income totaled ¥56,274 million in the fiscal year underreview, up ¥6,376 million, or 12.8%, from the previous fiscal year. The operating
income margin was 4.0%, up 0.4 percentage point from the previous fiscal year.

Nonoperating Income (Expenses) and Income (Loss)before Income Taxes and Non-controlling Interests
Nonoperating income totaled ¥15,662 million in the fiscal year under review, up¥468 million, or 3.1%, from the previous fiscal year. Nonoperating expenses
totaled ¥8,150 million, up ¥1,318 million, or 19.3%, from the previous fiscal year.
As a result, net nonoperating income totaled ¥7,512 million, up from ¥8,362
million in the previous year.
Ordinary income totaled ¥63,786 million, up ¥5,527 million, or 9.5%, from theprevious year.
As a result, income before income taxes and non-controlling interests totaled¥102,719 million (compared to a net loss of ¥18,685 million in the previous year).

Net Income Attributable to Parent Company Shareholders
Net income attributable to parent company shareholders totaled ¥69,498 million in
the fiscal year ended March 2020 (compared to a net loss of ¥35,669 million in
the previous fiscal year). Net income per share was ¥235.18 (compared to net loss
per share of ¥118.22 in the previous year).

Gross Profit Margin
(%)
25
20.9
19.4 18.9 19.9 20.1

20
15
10
5
0

16

17

18

19

20

SGA Expenses to Net Sales
(%)

20
16.3

16.7

16.6

16.6

16.9

16

17

18

19

20

15

10

5

0

Operating Income Margin
(%)
4.0

4
3.3

3.1

3.6

3

2

2.2

1
Market In the beverage industry, logistics costs are skyrocketing and raw
materials prices are rising, and there are also calls for a response to theplastic pollution problem, which in addition to sales promotions and new
product development by various companies, have resulted in intensifiedcompetition for market share.
DNP While sales to Hokkaido increased, irregular weather in Honshu hascaused sales to bottlers outside of Hokkaido to decrease.

78

0

16

17

18

19

20

DNP Integrated Report 202079

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Management ʼs Discussion and Analysis

Cash Flow
2020.32019.32018.3

Cash flow from operating
activities (¥ million)¥

93,937¥

68,972¥48,457

Cash flow from investing
activities (¥ million)¥

191,057¥ −146,909¥

23,075¥284,994¥ −77,937¥

71,532(¥ million)

Regarding consolidated cash flow in the fiscal year ended March 2020, net cash
provided by operating activities totaled ¥93,937 million, due mainly to ¥102,719
million in income before income taxes and non-controlling interests and ¥54,475
million in depreciation.
Net cash gained from investing activities totaled ¥191,057 million, due mainly toa ¥135,777 million net decrease in time deposits and ¥58,112 million in proceedsfrom sales of investment securities.
Net cash used in financing activities totaled ¥41,281 million, due mainly to¥60,212 million in expenditures on the acquisition of own shares.
As a result of these activities, cash and cash equivalents at the end of the fiscal
year in the consolidated cash flow statement totaled ¥377,367 million.
Free cash flow in the current fiscal year, which is the sum of cash flow fromoperating activities and cash flow from investing activities, amounted to revenue of¥284,994 million.

Capital Expenditures, Depreciation, Research andDevelopment Expenditures, etc.
Capital Expenditures andFree Cash Flow(¥ billion)
Capital expenditures
Free cash flow
300

285.0

250
200
150
100

97.3

86.0
57.1

50

59.6

71.5
41.1

57.2

11.7

0
-50
-100

80

−77.9

16

17

18

19

20

TOWARDSUSTAINABLE GROWTH

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

Balance Sheet

Liquidity and Capital Resources

Free cash flow

INITIATIVES FORVALUE CREATION

Capital expenditures in the fiscal year ended March 2020, which consisted mainlyof priority investment in strategic fields and rationalization investment in existing
fields, totaled ¥57,162 million, up ¥16,059 million, or 39.1%, from the previous
fiscal year. By segment, capital expenditures in the Information Communication
segment were ¥20,009 million, up ¥311 million from the previous year andaccounting for 35% of total capital expenditures. The Lifestyle and Industrial
Supplies segment was ¥21,265 million, up ¥8,487 million and accounting for37%. The Electronics segment was ¥11,802 million, up ¥7,189 million andaccounting for 21%. The Beverages segment was ¥2,667 million, up ¥740 million
and accounting for 5%. Adjustment was ¥1,419 million, down ¥668 million andaccounting for 2%. Necessary capital for this capital investment was covered byfunds on hand.
Depreciation totaled ¥54,475 million, down ¥4,606 million, or 7.8%, from theprevious fiscal year. By segment, depreciation in the Information Communication
segment was ¥23,547 million, down ¥2,147 million from the previous year andaccounting for 43% of total depreciation. The Lifestyle and Industrial Supplies
segment was ¥16,023 million, down ¥361 million and accounting for 29%. The
Electronics segment was ¥9,655 million, down ¥1,923 million and accounting for
18%. The Beverages segment was ¥2,789 million, on par with the previous year
and accounting for 5%. Adjustment was ¥2,461 million, down ¥255 million andaccounting for 5%.
Research and development expenditures totaled ¥33,603 million, falling about¥184 million short of the total of ¥33,787 million in the previous fiscal year.

2020.32019.32018.3

Total assets (¥ million)¥ 1,721,724¥ 1,775,023¥ 1,794,764

Interest-bearing debt (¥ million)¥

211,646¥

166,350¥

Stockholders' equity (¥ million)¥

915,779¥

996,162¥ 1,053,600

Book value per share (¥)¥ 3,260.38¥ 3,300.52¥

170,1033,493.79

DNPʼs total assets at the end of this fiscal year amounted to ¥1,721,724 million,
down ¥53,299 million, or 3.0%, from the previous fiscal year.
Among current assets, cash and cash equivalents totaled ¥373,013 million, up¥104,967 million, or 39.2%, from the previous fiscal year. Trade receivables
totaled ¥330,799 million, down ¥20,651 million, or 5.9%. Inventories ofmerchandise and finished products, work in process, raw materials and supplies
totaled ¥134,280 million, up ¥1,208 million, or 0.9%. As a result, current assets
totaled ¥884,010 million, up ¥84,730 million, or 10.6%.
Among fixed assets, net property, plant and equipment totaled ¥409,368
million, down ¥31,752 million, or 7.2%, from the previous fiscal year. Intangible
fixed assets totaled ¥22,716 million, down ¥6,198 million, or 21.4%. Investments
and other assets totaled ¥405,629 million, down ¥100,078 million, or 19.8%. As
a result, fixed assets totaled ¥837,714 million, down ¥138,029 million, or 14.1%.
Current liabilities totaled ¥480,651 million, up ¥12,996 million, or 2.8%, fromthe previous fiscal year. Long-term liabilities totaled ¥272,498 million, up ¥11,752
million, or 4.5%. As a result, total liabilities amounted to ¥753,149 million, up¥24,748 million, or 3.4%, from the previous fiscal year.
As of March 31, 2020, net assets totaled ¥968,575 million, down ¥78,047
million, or 7.5%, from the previous fiscal year. This was due mainly to a decreaseof ¥60,021 million, or 35.3%, in the valuation difference on available-for-salesecurities.
As a result of this, the equity ratio in the fiscal year under review was 53.2%, adecrease of 2.9 percentage points from the previous fiscal year.

ROE
（%）

8

7.3

6
4

As of March 31, 2020, a total of 324,240,346 shares of common stock have been
issued, of which 43,359,344 shares, or 13.37%, are held as treasury stock. The
total number of shares in treasury stock increased by 20,938,599 from theprevious year.

3.2

2.5

2.6

2
0
-2

SharesIssuedTreasury
StockType ofsharesShares at
beginning offiscal year

Increase insharesduringfiscal year

CommonStock324,240,346−

CommonStock

Decrease Shares atin shares
end ofduringfiscal year fiscal year
−

−3.5

-4

16

324,240,346

17

18

19

20

56.1

53.2

19

20

Equity Ratio（%）

22,420,745

20,938,721

122

43,359,344

Notes
1. The increase of 20,938,721 shares of common stock in treasury stock consists of an increase of 20,933,700 shares due to theacquisition of treasury stock by resolution of the Board of Directors, as well as an increase of 5,021 shares due to purchase of stocks
with less than trading units.
2. The decrease of 122 shares of common stock in treasury stock consists of a decrease of 116 shares due to the sale of stocks with lessthan trading units, as well as a decrease of 6 shares due to changes in the equity ratio in affiliates accounted for using the equity
method.

80

60

59.2

59.4

58.7

40

20

0

16

17

18

DNP Integrated Report 2020

81

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INITIATIVES FORVALUE CREATIONTOWARDSUSTAINABLE GROWTH

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

Selected Financial Data (unaudited)
Dai Nippon Printing Co., Ltd. and Consolidated Subsidiaries
Years ended March 31

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

Statements of Operations Data (¥ million)
Net sales¥

1,401,894¥

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

Cost of sales

1,109,052

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

Gross profit

292,842

282,115

280,590

267,009282,713279,164

272,473

260,049

260,350

301,792

Selling, general and administrative expenses

236,568

232,217234,218

235,598

237,241

230,990

222,374

224,269

226,335

233,973

Operating income

56,27449,89846,372

31,41145,472

48,17450,09935,78034,01567,819Ordinary income

63,78658,25950,971

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

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

102,719(18,685 )

45,396

39,831

54,84151,062

48,60835,152

2,673

52,696

Net income (loss) attributable to parent company shareholders

69,498(35,669 )

27,501

25,22633,58826,92425,642

19,218(16,356 )

25,033

Balance Sheet Data (¥ million)
Total assets¥

1,721,724¥

1,775,023¥

1,794,764¥

1,741,904

Stockholders' equity

915,779

Interest-bearing debt

211,646

166,350

170,103

169,133

Total net assets

968,575

1,046,622

1,102,551

1,081,286

996,162

1,053,600¥

1,033,864

1,718,636¥

1,017,425

1,809,462¥

1,574,754¥

1,578,976¥

1,608,806¥

1,649,784

1,078,828

932,329

893,124

871,229

908,521

189,820

187,946

182,596

227,209229,664

229,140

1,063,241

1,124,093

976,386

937,055914,213

952,440

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

93,937¥

68,971¥

48,457¥

71,945¥72,629¥85,731¥

120,109¥

100,498¥

108,603¥

140,053

Cash flows from investing activities

191,057(146,909 )

23,07514,012(60,883 )(50,540 )(58,371 )(72,588 )(80,126 )(82,562 )Cash flows from financing activities(41,281 )(32,197 )(42,771 )(45,223 )(47,166 )(23,865 )(80,038 )(36,236 )(32,833 )

15,186

Free cash flow

284,994(77,937 )

71,532

85,957

11,74635,191

61,73827,91028,47757,491Other Selected Data (¥ million)
Capital expenditures¥

57,162¥

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

Depreciation expenses

54,47559,08061,071

61,461

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

R&D expenditures

33,60333,78633,21031,376

31,82731,74930,82030,82031,69033,147

Common Share Data (¥, shares)
Earnings (loss) per share ̶ primary
Dividends paid per share
Book value per share
No. of common shares outstanding (exc. treasury shares)¥

235.18¥(118.22 )

¥

90.77

¥

81.57

¥

53.10

¥

41.82

¥

39.82

¥

29.84

¥

(25.39 )

¥

38.86

64.00

64.00

48.00

32.00

32.00

32.00

32.00

32.00

32.00

32.00

3,260.38

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

280,881,002

301,819,601

301,563,746

307,596,791

628,561,116

643,833,079

643,893,863

643,990,364

644,062,928

644,142,530

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

20.89 %

20.13 %

19.87 %

18.93 %

19.42 %

19.09 %

18.81 %

17.98 %

17.27 %

18.99 %

Selling, general and administrative expenses

16.87

16.57

16.58

16.71

16.29

15.80

15.35

15.50

15.02

14.72

Operating income

4.01

3.56

3.28

2.23

3.12

3.29

3.46

2.47

2.26

4.27

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

7.33(1.33 )

3.21

2.82

3.77

3.49

3.36

2.43

0.18

3.32

Net income (loss) attributable to parent company shareholders

4.96(2.54 )

1.95

1.79

2.31

1.84

1.77

1.33

(1.09 )

1.57

Return on equity

7.27(3.48 )

2.63

2.46

3.20

2.67

2.81

2.18

(1.84 )

2.74

Return on assets

3.97(2.00 )

1.55

1.46

1.90

1.59

1.63

1.21

(1.00 )

1.53

Dividend payout ratio

27.2

―

70.5

78.5

60.3

76.5

80.4

107.2

―

82.3

Total return ratio

113.1

―

124.8

137.6

119.5

76.5

80.4

107.2

―

82.3

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 share anddiluted net income per share assuming this share consolidation was implemented at the start of the previous consolidated fiscal year.

82*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 202083

TOP MESSAGE MANAGEMENT PLAN

INITIATIVES FORVALUE CREATIONTOWARDSUSTAINABLE GROWTH

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

Consolidated Financial Statements

CONSOLIDATED BALANCE SHEETS
Dai Nippon Printing Co., Ltd. and Consolidated Subsidiaries
March 31, 2020 and 2019
Thousands of
U.S. dollars (Note 3)

Millions of yen

Assets

2020

2020

2019

Current assets:
Cash and cash equivalents (Notes 4, 7 and 16)

Thousands of
U.S. dollars (Note 3)

Millions of yen

Liabilities and Net Assets

2020

2020

2019

Current liabilities:¥

377,367¥

133,772$

3,462,083

3,646

139,275

33,450Trade receivables (Notes 10 and 16)

330,799

351,450

3,034,853

Allowance for doubtful receivables(1,362 )(1,516 )(12,495 )Inventories (Note 6)

134,280

133,072

1,231,927

Prepaid expenses and other current assets (Notes 5, 10 and 16)

39,28043,227360,365884,010799,280

8,110,183

Time deposits (Note 16)

Total current assets

Short-term bank loans (Notes 7 and 16)¥

39,052¥42,474$358,275

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

59,49854,222545,853

Trade payables (Notes 10 and 16)

238,066

246,138

2,184,092

Accrued expenses (Note 10)

43,55340,722399,569

Income taxes payable (Note 13)

16,622

7,448

152,495

Reserve for repairs

20,636

19,162

189,321

63,22457,489580,037

467,655

4,409,642

Other current liabilities (Notes 7 and 10)

480,651

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

64,10860,268588,146

Investment securities (Notes 5, 7 and 16)

241,246

338,941

2,213,266

Other
Total investments and advances

485

516

4,449

305,839399,725

2,805,861

Long-term liabilities:
Long-term debt (Notes 7 and 16)

113,098

69,655

1,037,596

Net defined benefit liability (Note 8)

35,687

34,734327,404

Other long-term liabilities (Notes 7, 10 and 13)
Property, plant and equipment, at cost (Notes 7 and 14):

Total long-term liabilities

Land

141,423

147,924

1,297,459

Buildings and structures

520,308549,252

4,773,468

Machinery and equipment

808,678820,763

7,419,064

Leased assets and right-of-use assets

19,44625,828

178,403

Construction in progress

16,42911,761

150,725

Total
Accumulated depreciation
Net property, plant and equipment

1,506,284

1,555,528

13,819,119

Stockholders' equity(1,114,408)(10,063,449)

Common stock -409,368

441,120

3,755,670

64,689Other (Note 13)
Total other assets

71,381¥

114,464

1,050,128

Capital surplus (Note 9)

145,024

144,766

1,330,495

Retained earnings (Note 9)676,346

626,949

6,205,009

Treasury stock, at cost 43,359,344 shares in 2020 and
22,420,745 shares in 2019 (Note 9)(122,911)(62,898)(1,127,623)

812,923

823,2817,458,009

110,052

170,073

1,009,651

57,81863,517

530,441

134,898

1,123,919

1,775,023$ 15,795,633¥

114,464

593,478

122,507
1,721,724

2,499,982

Authorized:745,000,000 shares;

Total stockholders' equity
Total assets

1,134,982

Net assets

Issued:324,240,346 shares;
Net defined benefit asset (Note 8)

156,357
260,746

Contingent liabilities (Note 18)(1,096,916)

Other assets

123,713272,498

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

6

(1 )

55

(3,449 )(2,399 )(31,642 )Remeasurements of defined benefit plans (Note 8)(3,752)

5,209(34,422)

Total accumulated other comprehensive income

102,857

172,882

943,642

Non-controlling interests

52,79550,459484,358

Total net assets

968,575

1,046,622

8,886,009

1,775,023$ 15,795,633

Total liabilities and net assets¥

1,721,724¥

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

84

DNP Integrated Report 202085

TOP MESSAGE MANAGEMENT PLAN

INITIATIVES FORVALUE CREATIONTOWARDSUSTAINABLE GROWTHCONSOLIDATED STATEMENTS OF INCOMECONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Dai Nippon Printing Co., Ltd. and Consolidated Subsidiaries
Years ended March 31, 2020 and 2019

Dai Nippon Printing Co., Ltd. and Consolidated Subsidiaries
Years ended March 31, 2020 and 2019
Thousands of
U.S. dollars (Note 3)

Millions of yen

2020
Net sales (Note 19)¥

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

1,401,894

2020

1,401,506$ 12,861,413

1,109,052

1,119,391

10,174,789

292,842

282,115

2,686,624

Valuation difference on available-for-sale securities

236,568

232,2172,170,349

Net deferred gains on hedges

56,27449,898516,275¥

Other income (expenses) (Note 12):Interest and dividends income

5,587

5,256

51,257

Interest expenses(1,466)(2,068)(13,450)

Equity in earnings of affiliates

6,051

4,161

55,514

Net income (loss)

Remeasurements of defined benefit plans(8,894)(1,404)(81,597)

(174)

(414)

(1,598)

Share of other comprehensive loss in associates
accounted for using the equity method

50,08720,008459,514

Non-controlling shareholders

Loss on devaluation of investment securities(7,233)(4,323)(66,358)

Impairment loss on fixed assets (Note 14)(26,517)(16,685)(243,275)−(75,000)−(3,691)(269)(33,863)

46,445(68,583)

426,101

102,719(18,685)

942,376

239,110(936)

41,84430,624

14,263

280,954

72,095(32,948)

661,422

Net income (loss)
Net income attributable to non-controlling shareholders
Net income (loss) attributable to parent company shareholders

2,597
¥

69,4982,721¥(35,669)$(638,148)(3,746)

¥

2,537

¥

(36,694)$

23,274

¥

(528)

¥

(38,590)$(4,841)Attributable to:
3,064

28,115

1,896

Yen

U.S. dollars (Note 3)

2020

2020

2019

Per share information:
Net assets

15,199(69,558)

Total other comprehensive loss
Comprehensive income (loss)

Net gain on sales of investment securities

4,561(550,955)

2,047

92

Parent company shareholders

26,063(60,054)(4,090)(7,339)Current

661,4223

224,101

Deferred$(3,978)95

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

10

242

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

¥

(446)

(800)

Other

72,095

Foreign currency translation adjustments

24,427

Provisions for reserve for repairs

¥

2020

2019

Other comprehensive loss

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

Foreign exchange translation gain (loss)

Thousands of
U.S. dollars (Note 3)

Millions of yen

2020

2019

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）¥

3,260.38¥

3,300.52$

29.91

Net income (loss)

235.18(118.22 )2.16

Diluted net income (*)

235.08−

2.16

23,826(*) Diluted net income per share is not presented for the year ended March 31, 2019 because, although there are potential dilutive shares in the previous fiscal year, the Company incurred a net loss per share.

637,596

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

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

86

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INITIATIVES FORVALUE CREATIONTOWARDSUSTAINABLE GROWTH

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, 2020 and 2019
Millions of yen
Stockholders' equity
Number ofshares issued(in thousands)

Balance at April 1, 2018
Changes of items during the period
Cash dividends paid
Net loss attributable to parent company shareholders
Changes of scope of equity method
Change in ownership interest of parent due to transactions with non-controlling interests
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
Balance at April 1, 2019
Cumulative effects of changes in accouting policies
Adjusted balance at April 1, 2019
Changes of items during the period
Cash dividends paid
Net income attributable to parent company shareholders
Change in ownership interest of parent due to transactions with non-controlling interests
Change in treasury stock arising from change in equity in entities accounted for using 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, 2020

324,240

Commonstock¥

114,464

Accumulated other comprehensive income

Capitalsurplus¥144,264

Treasurystock,
at costRetainedearnings¥

681,977¥(62,908)

Valuationdifference on
available-for-salesecurities

Net deferredgains (losses)on hedges

Foreign currencytranslation
adjustments

Remeasurementsof defined
benefit plans

Non-controllinginterests

Total net assets

¥

¥

¥

¥

¥

¥

168,156

(4)

1,410

6,242

48,9501,102,551

324,240
324,240
324,240

114,464
114,464
114,464

(90)
592
502
144,766
144,766
144,766(19,318)(35,669)(41)(0)(55,028)
626,949
626,949(821)
626,128(16)
26
10(62,898)(62,898)(62,898)

1,917
1,917
170,073
170,073(54)
170,019

3
3
(1)
(1)
(1)

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

1,509
1,509
50,45950,45950,459(19,318)(35,669)
(41)
(90)
(16)
618
1,917
3
(3,809)(1,033)
1,509(55,929)
1,046,622
1,046,622(875)
1,045,747

324,240

114,4642580
258
145,024(19,280)
69,49850,218676,3460(60,013)0(60,013)(122,911)(59,967)(59,967)
110,0527
7
6(1,050)(1,050)(3,449)(8,961)(8,961)(3,752)

2,336
2,336
52,795(19,280)
69,498258
0(60,013)
0(59,967)7(1,050)(8,961)
2,336(77,172)
968,575

¥

¥

¥

¥

¥

¥

¥

¥

¥

¥

Thousands of U.S. dollars (Note 3)
Stockholders' equity
Number ofshares issued(in thousands)

Balance at April 1, 2019
Cumulative effects of changes in accouting policies
Adjusted balance at April 1, 2019
Changes of items during the period
Cash dividends paid
Net income attributable to parent company shareholders
Change in ownership interest of parent due to transactions with non-controlling interests
Change in treasury stock arising from change in equity in entities accounted for using 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, 2020

324,240
324,240
324,240

Commonstock$$

1,050,128
1,050,128
1,050,128

Accumulated other comprehensive income

Capitalsurplus$$1,328,128
1,328,128
2,367
0
2,367
1,330,495

Treasurystock,
at costRetainedearnings$$

5,751,826(7,532)
5,744,294$(577,046)(577,046)(176,881)
637,596
460,715
6,205,009

0(550,577)0(550,577)$ (1,127,623)

Valuationdifference on
available-for-salesecurities

Net deferredgains (losses)on hedges

Foreign currencytranslation
adjustments

Remeasurementsof defined
benefit plans

Non-controllinginterests

Total net assets

$

$

$

$

$

$

$

1,560,303(495)
1,559,808(550,157)(550,157)
1,009,651

$

(9)
(9)
64
64
55

$

(22,009)(22,009)(9,633)(9,633)(31,642)$

47,78947,789(82,211)(82,211)(34,422)$462,927
462,927
21,431
21,431
484,358$

9,602,037(8,027)(176,881)
637,5962,367
0(550,577)0(550,157)
64(9,633)(82,211)
21,431(708,001)
8,886,009

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

88

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INITIATIVES FORVALUE CREATIONTOWARDSUSTAINABLE GROWTH

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

CONSOLIDATED STATEMENTS OF CASH FLOWS
Dai Nippon Printing Co., Ltd. and Consolidated Subsidiaries
Years ended March 31, 2020 and 2019
Thousands of
U.S. dollars (Note 3)

Millions of yen

2020

2020

2019

2020

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

Thousands of
U.S. dollars (Note 3)

Millions of yen

2020

2019

Cash flows from financing activities:¥

102,719¥(18,685)$

942,376

Adjustments to reconcile income (loss) before income taxes
and non-controlling interests to net cash provided by operating activities:

Net decrease in short-term bank loans(3,424)(2,283)(31,413)

Proceeds from long-term debt

2,700

2,500

24,771

Repayments of long-term debt

(2,521)(4,143)(23,128)

Depreciation

54,47559,080499,771

Proceeds from issuance of debentures

99,496

2,443

912,807

Impairment loss on fixed assets

26,517

16,685

243,275

Payments for redemption of debentures(51,490)(2,290)(472,385)

Allowance for doubtful receivables

(186)

(389)

(1,706)

Proceeds from stock issuance to non-controlling shareholders

-

75

-

(7,441)(5,682)(68,265)

Payments for purchases of treasury stocks(60,212)(18)(552,404)(2,066)(14,404)

Net defined benefit asset
Net defined benefit liability

2,170

(292)

19,908Interest paid

(1,570)Equity in earnings of affiliates(6,051)(4,161)(55,514)

Dividends paid

(19,283)(19,324)(176,908)

(510)

(459)

(4,679)

-

(90)

-

(4,467)(6,542)(40,981)(41,281)(32,197)(378,724)(118)(1,031)(1,083)

Net increase (decrease) in cash and cash equivalents

243,595(111,165)

2,234,817

Cash and cash equivalents at beginning of year

133,772

244,937

1,227,266

Amortization of goodwill

1,659

1,752

15,220

Dividends paid to non-controlling shareholders

Interest and dividends income(5,587)(5,256)(51,257)

Interest expenses

1,466

2,068

13,450

Payments for purchase of stock in subsidiaries not resulting
in a change in the scope of consolidation(50,087)(20,008)(459,514)

Net gain on sales of investment securities
Loss on devaluation of investment securities
Net gain on sale or disposal of property, plant and equipment
Provisions for reserve for repairs

7,233

4,323

66,358(24,368)(67)(223,560)-

75,000-Changes in assets and liabilities
Trade receivables

22,195

2,099

203,624

Inventories(1,286)

1,998(11,798)

Trade payables(9,011)(1,912)(82,670)

10,236

2,323

93,908

124,653

108,876

1,143,606

Payments for repair costs(14,077)(22,750)(129,147)

Extra retirement payments

(336)

(767)

(3,083)

Payments of income taxes(16,303)(16,387)(149,569)

93,937

68,972

861,807

Net decrease (increase) in time deposits

135,777(136,981)

1,245,661

Payments for purchases of property, plant and equipment(39,932)(37,579)(366,349)

Proceeds from sales of property, plant and equipment

46,104

6,942

422,972

Payments for purchases of investment securities(1,028)(2,405)(9,431)

Proceeds from sales of investment securities

58,112

26,786533,138

Payments for purchases of stock in subsidiaries resultiing ina change in the scope of consolidation(1,155)-(10,596)

Proceeds from purchases of stock in subsidiaries resultiing ina change in the scope of consolidation

39

-

358

(9,775)(9,800)(89,679)

Interest and dividends received

9,197

10,516

84,376

Other investing activities(6,282)(4,388)(57,633)

191,057(146,909)

1,752,817

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

Cash and cash equivalents at end of year (Note 4)¥

377,367¥

133,772$

3,462,083

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

Cash flows from investing activities:

Payments for purchases of intangible assets

Net cash provided by (used in) investing activities

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INITIATIVES FORVALUE CREATIONTOWARDSUSTAINABLE GROWTH

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

Notes To Consolidated Financial Statements
Dai Nippon Printing Co., Ltd. and Consolidated Subsidiaries
March 31, 2020 and 2019

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 and prepare
their financial statements in conformity with accounting principles and practices generally accepted in Japan ("Japanese GAAP"), and its foreignsubsidiaries 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 GAAP").
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 2019 financial statements to conform with current year presentations. In addition, the notes to theconsolidated financial statements include additional information which is not required for disclosure under Japanese GAAP.
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 108 consolidated subsidiaries. Some subsidiaries are consolidatedwith their fiscal year ends that differ from that of the Company. Significant transactions that took place between their fiscal year ends and theCompanyʼs 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 is judged to be otherthan 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 andare 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 (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 at the balance sheet date, except for common stock andcapital 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" as reported in a separate
component of accumulated other comprehensive income and "non-controlling interests" 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.
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-sale securities, netof applicable taxes, are reported in a separate component of accumulated other comprehensive income in the consolidated balance sheets.
Non-marketable securities are stated at cost determined by the average method. For other than temporary declines in fair value, carrying amountof 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 ($917) or more but less than ¥200,000 ($1,835) 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 the lease
period with a residual value of zero.
Right-of-use assets
Depreciation for right-of-use assets is computed on a straight-line basis over the lease period with a residual value of zero.

92

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 amountof an asset or asset group may not be recoverable. An impairment loss would be recognized if the carrying amount of an asset or asset groupexceeds 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, whichis the higher of the discounted cash flows from the continued use and eventual disposition of the asset or the net selling price at disposition.
Employeesʼ retirement benefits
The Company and domestic significant consolidated subsidiaries applied the accounting standard for employeesʼ retirement benefits. Under theaccounting standard, accrued pension and liability for employeesʼ retirement benefits has been provided based on the estimated amounts of projectedpension and severance obligation and fair value of plan assets at the end of the fiscal year. Benefit formula basis is applied for the 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 averageremaining service periods (primarily 6 years) of the eligible employees. Actuarial gains and losses have been 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, tomanage the risk arising from fluctuation in foreign currency exchange 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 qualify for "alternative
method" of hedge accounting as described below.
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 meet certain hedging criteria, the hedged items are stated by the contracted rates ("alternative
method").
Per share information
Net assets per share were computed based on the number of shares outstanding after deducting treasury stock at March 31, 2020 and 2019,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 in order to reflect
dilutive effects.
Reserve for repairs
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 forcertain products.
Changes in accounting policies(Application of ASC 606 "Revenue from Contracts with Customers")
Foreign consolidated subsidiaries that adopt U.S. GAAP have applied Accounting Standards Codification ("ASC") 606 "Revenue from Contracts with
Customers" from the fiscal year ended March 31, 2020.
Accordingly, revenue is recognized, when promised goods or services are transferred to the customer, in the amount that reflects the consideration
to which these subsidiaries expect to be entitled in exchange for those goods or services.
These subsidiaries adopted a method to recognize the cumulative effect at the date of initial application in accordance with transitional measures,
resulting in an adjustment to retained earnings at the beginning of the fiscal year ended March 31, 2020.
As a result, retained earnings as of April 1, 2019 decreased by ¥875 million ($8,027 thousand). The effect of this change on the consolidated
financial statements for the year ended March 31, 2020 is immaterial.
(Application of ASU 2016-01 "Recognition and Measurement of Financial Assets and Financial Liabilities")
Foreign consolidated subsidiaries that adopt U.S. GAAP have applied Accounting Standard Update ("ASU") 2016-01 "Recognition and Measurementof Financial Assets and Financial Liabilities" from the fiscal year ended March 31, 2020.
ASU 2016-01 requires equity investments except those accounted for under the equity method of accounting or those that result in consolidationof the investee to be measured at fair value with changes in fair value recognized in net income or loss.
These subsidiaries adopted a method to recognize the cumulative effect at the date of initial application in accordance with transitional measures,
resulting in the adjustments to retained earnings and accumulated other comprehensive income for the fiscal year ended March 31, 2020.
As a result, retained earnings as of April 1, 2019 increased by ¥54 million ($495 thousand) and valuation difference on available-for-salesecurities decreased by ¥54 million ($495 thousand). The effect of this change on the consolidated financial statements for the year ended March
31, 2020 is immaterial.
(Application of IFRS No. 16 "Leases")Foreign consolidated subsidiaries that adopt IFRS have applied IFRS No. 16 "Leases" from the beginning of the fiscal year ended March 31, 2020.
Accordingly, these subsidiaries, in principle, recognize the right-of-use assets and lease obligations arising from all lessee transactions,DNP Integrated Report 202093

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and recognize depreciation of the right-of-use asset and interest on the lease obligations.
The effect of this change on the consolidated financial statements for the year ended March 31, 2020 is immaterial.

INITIATIVES FORVALUE CREATIONTOWARDSUSTAINABLE GROWTH

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

Millions of yen

March 31, 2020

Carrying amountStandards and guidance not yet adopted"Accounting Standard for Revenue Recognition" (Accounting Standards Board of Japan ("ASBJ") Statement No. 29, March 31, 2020)"Implementation Guidance on Accounting Standard for Revenue Recognition" (ASBJ Guidance No. 30, March 31, 2020)

Others

¥1. Overview
The above standard and guidance provide comprehensive accounting principles for revenue recognition. Under the standard and guidance,
revenue is recognized by applying the following 5 steps:

March 31, 2020

Carrying amount

Others$March 31, 2019

Carrying amount

Others¥Fair value

302¥

Difference

300

¥

(2)

Thousands of U.S. dollars (Note 3)

Step 1: Identify contract(s) with customers.
Step 2: Identify the performance obligations in the contract.
Step 3: Determine the transaction price.
Step 4: Allocate the transaction price to the separate performance obligations in the contract.
Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

Fair value

2,771

$

Difference

2,752

$

(19)

Millions of yen

Fair value

202¥

Difference

201

¥

(1)

The acquisition cost and aggregate fair value of marketable and investment securities classified as available-for-sale securities including thosewith no fair value as of March 31, 2020 and 2019 were as follows:

2. Effective date
Effective from the beginning of the fiscal year ending March 31, 2022.

Millions of yen

3. Effects of the application of the standards
The Company and its consolidated domestic subsidiaries are currently in the process of determining the effects of the standard andguidance on the consolidated financial statements.

March 31, 2020

Acquisition cost

Unrealized gains

Unrealized losses

Stocks

¥

¥

¥

Total

1. Overview
The objective of the above standard is to disclose information regarding accounting estimates, among those used in preparation of thecurrent year financial statements, on items which may have significant impact on the next year financial statements and facilitate
understanding of such items by users of financial statements.
2. Effective date
Effective from the end of the fiscal year ending March 31, 2021.

161,399

10,293

Others"Accounting Standard for Disclosure of Accounting Estimates" (ASBJ Statement No. 31, March 31, 2020)

83,321¥

93,6148¥

161,407

The consolidated financial statements are expressed in Japanese yen in accordance with Japanese GAAP. The Japanese yen amounts have beentranslated into U.S. dollar amounts, solely for the convenience of the readers, at the rate of ¥109 = U.S. $1, the approximate exchange rate on theTokyo Foreign Exchange Market at March 31, 2020. Such translations should not be construed as representations that the Japanese yen at that or
any other rate could be converted into U.S. dollars.

240,643
10,301¥

250,944

Thousands of U.S. dollars (Note 3)

Unrealized losses

Stocks$$$764,413
94,432$858,845

1,480,725

37,40473$

Fair value$

2,207,734$

2,302,239-

1,480,798$

37,404

94,505

Millions of yen

March 31, 2019

Acquisition cost

Unrealized gains

Unrealized losses

Stocks¥¥¥OthersTotal

3. Basis of Translating Financial Statements

4,077

Unrealized gains"Accounting Standard for Accounting Policy Disclosures, Accounting Changes and Error Corrections" (ASBJ Statement No. 24, March 31, 2020)

Additional information(Accounting estimates on the effect of Coronavirus Disease ("COVID-19"))
The Company and its consolidated subsidiaries estimate the possibility of realization of deferred tax assets, etc. reasonably based on the available
information as of the time of preparing the consolidated financial statements.
Accounting estimates are based on the assumption that the effect of COVID-19 on the business continues for a certain period.
Actual results may differ from those estimates due to uncertainties in estimation.

¥

Acquisition cost

Total

2. Effective date
Effective from the end of the fiscal year ending March 31, 2021.

Fair value¥-

March 31, 2020

Others

1. Overview
The objective of the above standard is to disclose summary information on accounting policies and procedures adopted when requirements
under the relating accounting standards are not clearly defined.

4,077

95,815
10,106¥

105,921244,307

1,496

11
¥

Fair value¥

338,626¥

348,7394

244,318¥

1,500

10,113The proceeds from sales of available-for-sale securities for the years ended March 31, 2020 and 2019 were ¥55,730 million ($511,284 thousand)and ¥26,229 million, respectively. The gross realized gains on these sales for the years ended March 31, 2020 and 2019 were ¥51,450 million($472,018 thousand) and ¥18,026 million, respectively, and the gross realized losses on these sales for the years ended March 31, 2020 and 2019were ¥1,363 million ($12,504 thousand) and ¥42 million, respectively.
The acquisition cost is the amount after recognized loss on devaluation of investment securities. Loss on devaluation of investment securities forthe years ended March 31, 2020 and 2019 were ¥7,082 million ($64,972 thousand) and ¥4,305 million, respectively.
If the market value of the security declines by 50% or more from its acquisition cost as of the end of the fiscal year, loss on devaluation of
investment securities is recorded for the difference between the market value and the acquisition cost as an impairment loss. If the decline ranges
between about 30% and 50%, loss on devaluation of investment securities for the amount deemed necessary is recorded considering its
recoverability, etc.
The redemption schedules for securities with maturities at March 31, 2020 and 2019 were as follows:
Millions of yen

4. Cash and Cash Equivalents
Cash and cash equivalents as of March 31, 2020 and 2019 were comprised of the following:

Corporate bonds
Thousands of
U.S. dollars (Note 3)

Millions of yen

2020
Cash and deposits (excluding time deposits and short-term investments (securities)
with a maturity over three months)

Due in one
year or lessMarch 31, 2020¥

377,367¥

133,772$¥

10,0005. Marketable Securities and Investment Securities
The carrying amount and aggregate fair value of marketable and investment securities classified as held-to-maturity debt securities as of March 31,
2020 and 2019 were as follows:

¥

¥

332
-

¥

332

-

¥

-

Thousands of U.S. dollars (Note 3)

3,462,083
Due in one
year or lessMarch 31, 2020

94-

Over five years

10,000

Others

2020

2019

¥

Due after one year
through five years

Corporate bonds$-

Due after one year
through five years

Over five years$$

91,743

Others$

91,743

3,046
-

$

3,046

-

$

-

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Due in one
year or lessCorporate bonds¥-

OthersDue after one year
through five years

Over five years

¥

¥

202

10,000¥10,000

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

202

¥

2021

¥

59,49852,550

2023

1,738

15,945

-

2024

3,205

29,40430

2025¥

Inventories at March 31, 2020 and 2019 consisted of the following:Thousands of
U.S. dollars (Note 3)

78,199172,596$

1,583,449

The aggregate annual maturities of finance lease obligations after March 31, 2020 were as follows:

2020

Years ending March 31

Thousands of
U.S. dollars (Note 3)

Millions of yen

717,4222021

30,075295,706

2022

2,530

23,211

Raw materials and supplies

23,84923,188

218,799

2023

2,017

18,504

1,231,927

2024

803

7,367

2025

522

4,789

2026 and thereafter

699

6,413

¥

134,280¥

79,809133,072$

7. Short-term Bank Loans and Long-term Debt
Short-term bank loans at March 31, 2020 and 2019 were represented by bank loans and bank overdrafts, etc., bearing interest at an average rate of
0.46% per annum for 2020 and 0.47% per annum for 2019.
Long-term debt at March 31, 2020 and 2019 consisted of the following:Thousands of
U.S. dollars (Note 3)

Millions of yen

2020

2020

2019

Unsecured debentures
0.270~0.580% due 2026 and thereafter¥

100,000¥-$

917,4310.180~0.290% due 2024

2,500

2,500

22,9360.160~0.180% due 2023

1,050

1,050

9,633

0.100~0.376% due 2022

3,570

3,570

32,7520.150~1.358% due 2021

52,49052,490481,560

0.100~1.705% due 2020-

51,490-Collateralized loans, maturing 2021~2025

1,964

2,119

18,018

Unsecured loans, maturing 2021~2026

11,022

10,658101,119

Current portion of long-term debt¥¥¥

The reconciliation of beginning and ending balance of the projected benefit obligation at March 31, 2020 and 2019 were as follows:

2020

Change in projected benefit obligation:
¥

2020

2019

268,929

1,583,449(545,853)

Service cost

13,656

13,691

125,284

1,037,596

Interest cost

1,075

1,252

9,862

69,655$

Thousands of
U.S. dollars (Note 3)

9,961(3,390)
6,571

2020

2019
¥

10,954

$

(930)

(686)

(8,532)(10,378)(9,897)(95,211)
1,110

¥

5,630

91,385

Change in scope of consolidation

121

-

Other

103

(353)

Balance at the end of year¥

272,576$

60,284¥

268,929945$

2,500,697

The reconciliation of beginning and ending balance of the plan assets at March 31, 2020 and 2019 were as follows:(31,101)(5,324)

264,9222,467,239(54,222)¥¥$

123,877

2020

Thousands of
U.S. dollars (Note 3)

Millions of yen

2020

Change in plan assets:
Balance at the beginning of year

The assets pledged as collateral for the Company and its consolidated subsidiariesʼ indebtedness, such as property, plant and equipment andother assets, were ¥6,129 million ($56,229 thousand) and ¥7,275 million at March 31, 2020 and 2019, respectively.

Expected return on plan assets

Interest rates on collateralized loans ranged from 0.15% to 0.84% per annum for 2020 and from 0.15% to 0.83% per annum for 2019, whileinterest rates on unsecured loans ranged from 0.40% to 1.85% per annum for 2020 and from 0.40% to 0.98% per annum for 2019.

Contributions by the employer
Benefits paid

The aggregate annual maturities of long-term debt after March 31, 2020 were as follows:

Thousands of
U.S. dollars (Note 3)

Millions of yen(59,498)

Millions of yen¥

91,385

172,596

Finance lease obligations at March 31, 2020 and 2019 which are included in other long-term liabilities consisted of the following:

Current portion of lease obligations$

31,101

Balance at the beginning of year

113,098

¥

9,961

$

The Company and its domestic consolidated subsidiaries have lump-sum retirement plan, defined benefit corporate pension plan and defined
contribution pension plan. In some cases, additional retirement benefits were paid when an employee retired. In addition, certain foreign subsidiaries
have defined benefit pension plan. Upon retirement or termination of employment for reasons other than the cause of dismissal, employees areentitled to lump-sum payments based on the current rate of pay, length of services and accumulated number of points determined based on theemployment services.
Under the Defined Benefit Pension Plan Law, the Company has established new defined benefit pension plans on March 1, 2005 under whichmost of the retirement benefit liability of the Company and a part of its subsidiaries is covered by the employeesʼ pension fund. In addition, theCompany established retirement benefit trusts.
48 consolidated subsidiaries adopt defined benefit corporate pension plan, 7 adopt defined contribution pension plan, and 53 adopt lump-sum
retirement plan. Certain consolidated subsidiaries apply the simplified method for the calculation of net defined benefit liability and retirement benefit
costs.

Benefits paid

Finance lease obligations

3,390

8. Retirement Benefits

Actuarial gain/loss

96

11,257928,440

32,232¥$

1,227
101,200

Work in process

Merchandise and finished products

¥

2019

545,853

30

6. Inventories

2020

$

5,728

2026 and thereafter

Millions of yen

Thousands of
U.S. dollars (Note 3)

Millions of yen

2022

¥

TOWARDSUSTAINABLE GROWTH

Years ending March 31

Millions of yen

March 31, 2019INITIATIVES FORVALUE CREATION¥¥

297,544$2,803,449

7,590

71,624(12,307)(637)(112,908)

9,252

9,410

84,881(8,813)(8,216)(80,853)

63

Other
Balance at the end of year

¥

7,807

Actuarial gain/loss

2020

2019

305,576

301,578

578

(115)
¥

305,576$2,766,771

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

Millions of yen

2020
Funded projected benefit obligation¥

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

¥

¥

¥

234,403$2,174,779(301,578)(305,576)(2,766,771)(64,527)(71,173)(591,992)

35,52534,526

325,918(29,002)¥(29,002)(36,647)$(266,074)
327,404

34,734(64,689)

Net defined benefit asset
Net amount of liabilities and assets recognized in consolidated balance sheets

237,051

35,687

Net defined benefit liability

2020

2019

(593,478)(71,381)¥(36,647)$(266,074)

The components of net periodic benefit costs for the years ended March 31, 2020 and 2019 were as follows:
Thousands of
U.S. dollars (Note 3)

Millions of yen

2020
Service cost (*1)(*2)

¥

2020

2019

13,636¥

13,671$

125,101

Interest cost

1,075

1,252

9,862

Expected return on plan assets(7,807)(7,590)(71,624)

Actuarial gain/loss(1,842)(2,535)(16,899)

459

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

¥

5,521

4,211

476
¥

5,274

$

50,651(*1) Employees' contribution to the corporate pension fund is deducted from "Service cost."(*2) Retirement benefit expenses booked by consolidated subsidiaries applying the simplified method is included in "Service cost."(*3) In addition to the retirement benefit costs listed above, an additional retirement benefits were recognized as other expenses in the amount of ¥953 million for the year ended March 31, 2019.

Remeasurements of defined benefit plans, before income-tax effect, recorded under other comprehensive income (loss) for the years ended
March 31, 2020 and 2019 consisted of:Thousands of
U.S. dollars (Note 3)

Millions of yen

2020
Actuarial gain/loss¥¥(2,334)459

Prior service cost
Total

¥

2020

2019

(13,241)(12,782)

$

4,211

477
¥

(1,857)(121,477)$(117,266)

Remeasurements of defined benefit plans, before income-tax effect, recorded under accumulated other comprehensive income at March 31, 2020
and 2019 consisted of:Thousands of
U.S. dollars (Note 3)

Millions of yen

2020
Unrecognized actuarial gain/loss

¥

Total

¥

7,064

(449)

Unrecognized prior service cost
¥

2020

2019

(6,176)(6,625)$(56,661)$(60,780)

6,156

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

Assumptions used for the years ended March 31, 2020 and 2019 were set forth as follows:
2020
Long-term expected rate of return on plan assets

2019

0.7%

0.6%

mainly 2.5%

mainly 2.5%

Discount rate(*) The discount rates are presented based on the weighted-average of multiple discount rates.

The amounts of required contribution to defined contribution plans for the consolidated subsidiaries were ¥279 million ($2,560 thousand) and¥257 million for the years ended March 31, 2020 and 2019, respectively.
9. Net Assets
Japanese companies are subject to the Companies Act of Japan (the "Companies Act"). The significant provisions in the Companies Act that affectfinancial 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 andadditional 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 sostipulate. The Companies Act provides certain limitations on the amounts available for dividends or the purchase of treasury stock. The limitation isdefined 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 ¥8,989 million ($82,468 thousand) were approved at the general stockholdersʼmeeting held on June 26, 2020 with respect to the year ended March 31, 2020.
(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 of such
dividends until the total of aggregate amount of legal reserve and additional paid-in capital equals 25% of the common stock. Under theCompanies 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 transferred among theaccounts under certain conditions upon resolution of the stockholders.
(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 Board of
Directors. The amount of treasury stock purchased cannot exceed the amount available for distribution to the stockholders which is determinedby specific formula.
Treasury stock increased by 20,938,599 shares, which is comprised of increase of 20,933,700 shares due to purchase of treasury stock
through resolution of the Board of Directors' meeting, increase of 5,021 shares due to purchase of odd shares, decrease of 116 shares due tosales of odd shares, decrease of 6 shares through decrease in ratio of shareholding in an affiliated company accounted for under the equity
method for the year ended March 31, 2020.
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 stockacquisition rights are presented as a separate component of net assets or deducted directly from stock acquisition rights. At present, theCompany 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, 2020 and 2019 were summarized as follows:

The major categories of plan assets as of March 31, 2020 and 2019 were as follows:

Thousands of
U.S. dollars (Note 3)

Millions of yen

2020

2019

Bonds

18%

20%

Stocks36%

39%

Alternative investments

36%

36%

Other

10%

5%

Total

100%

100%

(*1) The main plan assets in “Alternative investments” are hedge funds, multi-asset management, infrastructure funds, and investment in real estate.
(*2) The total amount of plan assets includes the retirement benefit trusts for corporate pension fund representing 15% and 15% for the years ended March 31, 2020 and 2019, respectively.

98

TOWARDSUSTAINABLE GROWTH(4,119)(908)¥

INITIATIVES FORVALUE CREATION

Trade receivables
Other current assets
Investment securities
Long-term loans receivable
Other investments
Trade payables
Accrued expenses
Other current liabilities
Other long-term liabilities

¥

2020
6,989
346
57,649
140
6,319
3,588
322
1,053
-

¥

2019
6,882
289
54,164
30
6,074
5,028
269
943
10

$

2020
64,1193,174
528,890
1,284
57,972
32,917
2,954
9,661
-

DNP Integrated Report 2020

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11.Selling, General and Administrative Expenses

¥

¥

¥

¥

2019
67,7906,623
578
14,37533,787
109,064
232,217$$2020
628,083
60,541
8,505
120,083
308,284
1,044,853
2,170,349

Millions of yen

March 31, 2020

2021

Tax losscarryforwards (*1)

¥

2,211

2020
¥

¥

11
99

$

2020
3,239
495

13. Income Taxes
The Company and its consolidated subsidiaries are subject to a number of different taxes based on income, which, in the aggregate, resulted in anormal effective statutory tax rate.
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 to foreign subsidiaries, etc.
The note of reconciliation of the differences between the normal effective statutory tax rate and the actual effective tax rate for the years ended
March 31, 2020 and 2019 has been omitted because the difference was less than 5% of the normal effective statutory tax rate for 2020 and loss
before income taxes and non-controlling interests was recorded for 2019, respectively.
Significant components of deferred tax assets and liabilities at March 31, 2020 and 2019 were as follows:

2020
Deferred tax assets:
Repair reserve provisions
Impairment loss on fixed assets
Tax loss carryforwards
Net defined benefit liability
Accrued bonuses
Loss on devaluation of investment securities
Accrued enterprise tax
Loss on write-down of inventories
Excess provision for doubtful receivables
Other
Total deferred tax assets
Valuation allowance for tax loss carryforwards (*2)
Valuation allowance for deductible temporary differences
Total valuation allowance (*1)
TotalDeferred tax liabilities:
Unrealized gain on available-for-sale securities
Net defined benefit asset
Undistributed earnings of subsidiaries
Reserve for special depreciation
Other
Total
Net deferred tax assets (liabilities):

100¥

23,041
18,451
18,027
13,986
5,777
4,207
1,647
1,223
714
16,070103,143(17,528)(41,820)(59,348)
43,795¥¥¥(47,969)(19,795)(3,251)(19)(1,694)(72,728)¥(28,933)

¥

¥

2020

2019
27,34813,35831,057
13,500
5,526
2,115
782
1,241
1,028
13,728109,683(30,497)(36,128)(66,625)
43,058$$¥(73,320)(21,843)(720)(33)(1,373)(97,289)$(440,083)(181,605)(29,826)(174)(15,541)(667,229)¥(54,231)$(265,440)

¥

$

¥

349

(846)

-

2023

1,793

(1,786)

7

2024

1,639

(1,592)

47

2025

1,865

(1,865)-2026 and thereafter

9,673(9,577)

96

March 31, 2020

2021

¥

18,027¥(17,528)

(*2)

¥

499

211,385
169,275
165,385
128,31253,00038,597
15,110
11,2206,551
147,431
946,266(160,807)(383,670)(544,477)
401,789

Tax losscarryforwards (*1)$

20,285

Valuation
allowance$

Deferredtax assets(17,083)

$

3,202

2022

7,761

(7,761)-2023

16,449(16,385)64

2024

15,037(14,606)

431

2025

17,110(17,110)-2026 and thereafter

88,743(87,862)

881

Total

$

165,385$(160,807)

(*2)

$

4,578

(*1) Tax loss carryforwards are the amounts obtained by multiplying by the normal effective statutory tax rate.
(*2) For the tax loss carryforwards of ¥18,027 million ($165,385 thousand) (the amount multiplied by the normal effective statutory tax rate), the Company recognized deferred tax assets of ¥499 million ($4,578 thousand).
Deferred tax assets of ¥499 million ($4,578 thousand) above is recognized mainly because a part of the tax loss carryforwards recorded by Maruzen CHI Holdings Co., Ltd., a consolidated subsidiary of theCompany, is expected to be recoverable as a result of estimated taxable income in the future.

Millions of yen

March 31, 2019
Thousands of
U.S. dollars (Note 3)

Millions of yen(1,862)Thousands of U.S. dollars (Note 3)

Thousands of
U.S. dollars (Note 3)

2019
353
54

¥

Deferredtax assets

846

The following types of income from non-consolidated subsidiaries and associated companies were included in other income (expenses).
Millions of yen

Valuation
allowance

2022

Total

12. Other Income (Expenses)

Interest and dividends income
Rent income on facilities

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

Thousands of
U.S. dollars (Note 3)

Millions of yen

Salaries and allowances
Accrued bonuses
Provision for retirement benefits
Depreciation
Research and development expenses
OthersTOWARDSUSTAINABLE GROWTH(*1) Valuation allowance decreased by ¥7,277 million ($66,761 thousand). The main changing factor for temporary differences is the increase of valuation allowance caused by decreasing recoverable amount in
subsequent years as a result of forecasting taxable income in the future. The main changing factor for tax loss carryforwards is the decrease of tax loss caused by increased taxable income.
(*2) The amounts by the expiration period of tax loss carryforwards, related valuation allowance and the resulting deferred tax assets as of March 31, 2020 and 2019 were as follows:

Selling, general and administrative expenses for the years ended March 31, 2020 and 2019 consisted of the following:2020
68,461
6,599
927
13,08933,603
113,889
236,568

INITIATIVES FORVALUE CREATION

2020

Tax losscarryforwards (*1)

¥

5,327

Valuation
allowance¥

Deferredtax assets(4,987)

¥

340

2021

7,654

(7,646)

8

2022

1,351

(1,287)

64

2023

2,560

(2,552)

8

2024

1,652

(1,646)62025 and thereafter

12,513(12,379)

134

Total

¥

31,057¥(30,497)

(*2)

¥

560

(*1) Tax loss carryforwards are the amounts obtained by multiplying by normal the effective statutory tax rate.
(*2) For the tax loss carryforwards of ¥31,057 million (the amount multiplied by the normal effective statutory tax rate), the Company recognized deferred tax assets of ¥560 million.
Deferred tax assets of ¥560 million above is recognized mainly because a part of the tax loss carryforwards recorded by Maruzen CHI Holdings Co., Ltd., a consolidated subsidiary of the Company, is expected
to be recoverable as a result of estimated taxable income in the future.

DNP Integrated Report 2020

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14. Impairment Loss on Fixed Assets

March 31, 2020
Purpose of use

TOWARDSUSTAINABLE GROWTH

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

Long-term investments are mainly equity securities. Market prices and financial condition of issuers (business counterparties) of such investments
are obtained on a regular basis.

Impairment loss on fixed assets for the year ended March 31, 2020 were as follows:

Location

INITIATIVES FORVALUE CREATION

Category

Millions of yen

Thousands of
U.S. dollars (Note 3)

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, 2020 and 2019 were as
follows:
Millions of yen

Kuki City, Saitama,Shiraoka City,
Saitama and others

Publishing business
related assets

Buildings and structures,
machinery and others

Himeji City, Hyogo

Color filter production plantand equipment

Buildings and structuresand others

3,576

32,807

Mihara City, Hiroshima

Color filter production plantand equipment

Buildings and structuresand others

1,609

14,761(3) Short-term and long-term investment securities
Assets¥976,481¥

1,012,003¥

Kashiwa City, Chiba and others

Information systemrelated assets

Software and others

5,262

48,275(1) Trade payables¥

238,066¥

238,066¥

Kyoto City, Kyoto

Packaging business
related assets

Buildings and structures,
machinery and others

1,656

15,193(3) Long-term debts

Idle assets

Buildings and structures,
land and others

2,453

Office facilities

Buildings and structures,
machinery and others

605

Kitakyushu City, Fukuoka and others
Shinagawa-ku, Tokyo and others¥

11,191$

102,670

March 31, 2020

Carrying amounts(1) Cash and deposits¥

22,505Stores (Business assets)

Buildings and structuresand others

139

1,275

OthersBusiness assets
and others

Buildings and structures,
land and others

26

239

-

300,191

39,05235,52235,522-

39,052

172,596-

171,788(808)¥

449,714¥448,906

¥

(808)

¥

(78)

¥

(78)

¥

-

¥

(78)

¥

(78)

0

[2] Hedge accounting is applied

0

March 31, 2020

Carrying amounts¥(1) Cash and deposits$

3,495,533

Fair value$

3,034,853(2) Trade receivables-

2,428,155(3) Short-term and long-term investment securities

Differences

3,495,533$-

2,754,045

325,890

Assets$8,958,541$

9,284,431$(1) Trade payables$

2,184,092$

2,184,092$

358,275(2) Short-term bank loans
Liabilities

325,890-358,275

1,583,449(3) Long-term debts-

3,034,853-

1,576,037(7,413)$4,125,816$

4,118,404$(7,413)

$

(716)

$

(716)

$

-

Derivatives (*1)[1] Hedge accounting is not applied0[2] Hedge accounting is applied
Total

$

(716)

0
$

(716)

$

-

Millions of yen

15. Leases
Finance Leases
Information concerning finance lease transactions has been omitted, due to insignificance of such disclosure.
Operating Leases
The amounts of outstanding future payments under non-cancelable operating leases as of March 31, 2020 and 2019 were summarized as follows:
Thousands of
U.S. dollars (Note 3)

Millions of yen

2020

Future lease payments:
¥

4,510

¥

12,838

2020

2019
¥

8,328

More than one year

5,284

$

11,316¥

16,600$March 31, 2019

Carrying amounts(1) Cash and deposits¥

Differences

273,047¥-

351,450

351,450-

353,502392,824

39,322

Assets¥977,999¥

1,017,321¥(1) Trade payables¥

246,138¥

246,138¥

42,474(2) Short-term bank loans(3) Long-term debts

76,404

Liabilities

117,780

Derivatives (*1)

1. Management policy
The Company and its consolidated subsidiaries manage surplus funds 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 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 accordance withinternal rules for customer credit management.

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

41,376

16. Financial Instruments

273,047(2) Trade receivables[1] Hedge accounting is not applied

102¥

Thousands of U.S. dollars (Note 3)

The Company and its consolidated subsidiaries reviewed the fixed assets for impairment for the year ended March 31, 2020. Fixed assets were, in
principle, grouped at the business unit for impairment testing purposes. Idle assets were grouped in each asset.
As a result, the difference between book values and recoverable amounts was recorded as ”Impairment loss on fixed assets” in the amount of¥26,517 million ($243,275 thousand), which is comprised of buildings and structures of ¥14,486 million ($132,899 thousand), machinery of ¥3,979
million ($36,504 thousand), land of ¥1,021 million ($9,367 thousand), software of ¥5,512 million ($50,569 thousand), and others of ¥1,519 million($13,936 thousand), for the year ended March 31, 2020.
While the recoverable amount of business assets' groups of which profitability have been declined were measured at the value in use, publishingbusiness related assets, color filter production plant and equipment in Mihara City, Hiroshima, information system-related assets and other businessassets were assessed at zero because the future operating cash flows cannot be expected.
For color filter production plant and equipment in Himeji City, Hyogo, packaging business related assets in Kyoto City, Kyoto, office facilities in
Shinagawa-Ku, Tokyo and others, the book values of assets have been reduced because such assets are expected to become unnecessary at thetime of closure of the factories or relocation of the office.
The recoverable amount for idle assets has been measured at the net selling value which is evaluated based mainly on real estate appraisal
values. The book values of the idle assets which were difficult to obtain selling values have been reduced to memorandum values.

One year or less

381,013

Derivatives (*1)

Total

Toshima-ku, Tokyo and others

Differences

330,799

264,669(2) Short-term bank loans[1] Hedge accounting is not applied
5,550

¥

330,799(2) Trade receivables

Liabilities

381,013

Fair value

123,878-

125,219

1,341¥

412,490¥

413,831

¥

1,341

¥

(56)

¥

(56)

¥

-

[2] Hedge accounting is applied
Total

42,47439,322

(15)
¥

(71)

(15)
¥

(71)

¥

-

(*1) Derivative assets and liabilities are presented on a net basis.

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Note A: Fair value measurement of financial instruments, marketable securities and derivatives

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

Thousands of U.S. dollars (Note 3)

March 31, 2020

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:
U.S. dollars(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.

$

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

147,569$(789)

19,293

Euro

$

(789)

73

73

Payables:0

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

March 31, 2019

Thousands of
U.S. dollars (Note 3)

March 31, 2020

Carrying amounts

Carrying amounts

Unlisted equity securities¥$

43,977249

Others

(716)

(0)
$

(716)

Contracted amount

Fair value

Unrealized gain (loss)

Foreign currency forward contracts
Receivables:¥

Euro
Millions of yen(0)$Millions of yen

U.S. dollars

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

166,862

15,910

¥

(81)

¥

(81)

2,333

25

25

40

(0)

(0)

Payables:U.S. dollars¥

403,459

18,283

¥

(56)

¥

(56)

2,284
Derivative transactions to which the Company and its subsidiaries applied hedge accounting

Millions of yen

March 31, 2019

Carrying amounts

Unlisted equity securities¥

Others49,55053

The above instruments 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

Millions of yen

March 31, 2020

Hedged items

Contracted amount

Fair value

Foreign currency forward contracts
Receivables:
¥

178

¥

0

U.S. dollars

Forecasted foreign currency transactions

U.S. dollars

Trade receivables

356-

U.S. dollars

Forecasted foreign currency transactions

1,085

1

U.S. dollars

Trade payables

385-

Forecasted foreign currency transactions

136

(1)

Payables:Nature of Derivative Financial Instruments:
The Company and certain consolidated subsidiaries enter into derivatives for foreign currency forward contracts to manage the risk arising fromfluctuation in foreign currency exchange rates. Derivatives related to currency are utilized to hedge foreign exchange risks associated with certain
trade receivables, trade payables and other debts, including forecasted transactions, denominated in foreign currencies. 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 andexecutes derivatives based on the internal policies of the Company.
Fair value of derivatives:
The contracted amount and fair value of derivatives at March 31, 2020 and 2019 were as follows:

Euro
Euro
Sterling pound

Trade payables

1-

Forecasted foreign currency transactions

97

0

¥

2,238

¥

0

Thousands of U.S. dollars (Note 3)

March 31, 2020

Hedged items

Contracted amount

Fair value

Foreign currency forward contracts

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

Receivables:
Millions of yen

March 31, 2020

Contracted amount

Fair value

Unrealized gain (loss)

Foreign currency forward contracts¥

16,085

¥

2,103

Euro

(86)

¥

8

(86)
8

$

0

U.S. dollars

Trade receivables

3,266

-

U.S. dollars

Forecasted foreign currency transactions

9,954

9

U.S. dollars

Trade payables

3,532

-

Forecasted foreign currency transactions

1,248

(9)

Euro
Euro

Payables:Sterling pound
0

U.S. dollars
¥

104

1,633

Forecasted foreign currency transactions

Payables:Receivables:
U.S. dollars$

U.S. dollars

18,188

(0)
¥

(78)

(0)
¥

Trade payables

9-

Forecasted foreign currency transactions

890

(0)

$

20,532$

0(78)

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Thousands of U.S. dollars (Note 3)

Millions of yen

March 31, 2019

Hedged items

Contracted amount

Fair value

Reportable segment

Foreign currency forward contracts
For 2020:

Receivables:
U.S. dollars

Forecasted foreign currency transactions

U.S. dollars

Trade receivables

430

-

¥

225

¥

(1)

U.S. dollars

Forecasted foreign currency transactions

1,257

(11)

U.S. dollars

Trade payables

714

-

Euro

Forecasted foreign currency transactions

141

(4)

Euro

Trade payables

0-

Forecasted foreign currency transactions

129
¥

2,896

Outside customers

Beverages$ 7,061,918 $ 3,580,477 $ 1,711,945 $Intersegment
Total
Segment income
Segment assets

Total

Adjustments (*1) Consolidated (*2)

507,073 $ 12,861,413 $

30,550

9,963

-

193

40,706

7,092,468

3,590,440

1,711,945

507,266

279,046

102,238

313,165

18,780- $ 12,861,413(40,706)-

12,902,119(40,706)

12,861,413

713,229(196,954)

516,275$ 7,310,064 $ 3,889,055 $ 1,911,899 $

458,303 $ 13,569,321 $ 2,226,312 $ 15,795,633$

25,587 $Others(15)

Depreciation and amortization

18. Contingent Liabilities

216,028 $147,000 $88,578 $477,193 $

22,578 $499,771

4,092

11,128--15,220-15,220

Impairment loss

148,514

23,35847,761

9219,642

23,633

243,275

Investments in equity method affiliates

15,404

5,991

148,275-

169,670

380,468

550,138

Increase in property, plant andequipment and intangible assets

183,569

195,092

108,275

24,468511,404

13,018524,422

Amortization of goodwill
The fair values of foreign currency forward contracts subject to alternative method are included in the fair values of trade receivables and trade
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.

(*1) Adjustments represent as follows.
(1) Adjustment of segment income consists of basic research expenses not belong to reportable segments and research expenses shared by each reportable segments.
(2) Adjustment of segment assets consists of corporate assets not allocated to reportable segments and intersegment eliminations.
(3) Adjustment of impairment loss consists of impairment loss for corporate assets not allocated to reportable segments.
(4) Adjustment of investments in equity method affiliates consists of the investments in equity method affiliates not belong to reportable segments.
(5) Adjustment of increases in property, plant and equipment and in intangible assets consists of capital investments mainly for the head office building.

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, 2020 and 2019, the Company and its consolidated subsidiaries were
contingently liable on trade notes discounted in the amount of ¥534 million ($4,899 thousand) and ¥488 million, respectively.

(*2) Segment income is reconciled to operating income in the consolidated financial statements.

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, forwhich discrete financial information is available. The group's reportable segments consist of Information Communication, Lifestyle andIndustrial Supplies, Electronics, and Beverages, based on a classification by commonality in manufacturing and marketing method of products.
"Information Communication" involves production and sale of publication printing, commercial printing, business forms, photo materials, andeducation and publications distribution business. "Lifestyle & Industrial Supplies" involves production and sale of packaging materials, exteriormaterials for buildings and industrial supplies. "Electronics" involves production and sale of precision electronic components. "Beverages" involves
production and sale of carbonated drink and mineral water.
Accounting policies and methods used at reportable segments are the same as those described in Note 2 Significant Accounting Policies. Profit orloss of reportable segments is equal to operating income on the consolidated statement of income. Intersegment sales and transfers are based on
third-party transaction prices.

Reportable segment
For 2019:

Information
Communication

Lifestyle andIndustrial
Supplies

Electronics

Beverages

Total

Adjustments (*1) Consolidated (*2)

Net sales and operating income
Net sales
Outside customers¥

Intersegment
Total
Segment assets

Millions of yen

757,902 ¥395,182 ¥

192,437 ¥55,985 ¥ 1,401,506 ¥- ¥ 1,401,506

4,409

1,987

-

13

6,409

(6,409)-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 ¥

162,345 ¥ 1,775,023

OthersReportable segment
Lifestyle andIndustrial
Supplies

Millions of yen

Segment income

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

Depreciation and amortization

2,716 ¥

59,081

539

1,213

-

-

1,752

-

1,752

4,066

1,503

4,551

28

10,1486,537

16,685Net sales and operating income

Investments in equity method affiliates

1,739

493

17,076-

19,30837,45056,758Net sales

Increase in property, plant andequipment and intangible assets

19,698

12,778

4,613

1,927

39,016

2,087

41,103

Outside customers

Information
Communication¥

Intersegment
Total
Segment income
Segment assets¥

769,749 ¥390,272 ¥Electronics

Beverages

186,602 ¥Total

Adjustments (*1) Consolidated (*2)

55,271 ¥ 1,401,894 ¥- ¥ 1,401,894

3,330

1,086

-

21

4,437

(4,437)-773,079

391,358

186,60255,292

1,406,331(4,437)1,401,894

77,742(21,468)

56,27430,416

11,144

34,135

2,047

796,797 ¥423,907 ¥208,397 ¥49,955 ¥ 1,479,056 ¥

242,668 ¥ 1,721,724

23,547 ¥16,023 ¥9,655 ¥

2,789 ¥

52,014 ¥2,461 ¥

54,475

446

1,213

-

-

1,659

-

1,659

Impairment loss

16,188

2,546

5,206

1

23,941

2,576

26,517

Investments in equity method affiliates

1,679

653

16,162-

18,494

41,471

59,965

Increase in property, plant andequipment and intangible assets

20,00921,265

11,802

2,667

55,743

1,419

57,162

Amortization of goodwill(*1) Adjustments represent as follows.
(1) Adjustment of segment income consists of basic research expenses not belong to reportable segments and research expenses shared by each reportable segments.
(2) Adjustment of segment assets consists of corporate assets not allocated to reportable segments and intersegment eliminations.
(3) Adjustment of impairment loss consists of impairment loss for corporate assets not allocated to reportable segments.
(4) Adjustment of investments in equity method affiliates consists of the investments in equity method affiliates not belong to reportable segments.
(5) Adjustment of increases in property, plant and equipment and in intangible assets consists of capital investments mainly for the head office building.
(*2) Segment income is reconciled to operating income in the consolidated financial statements.

OthersDepreciation and amortization

Amortization of goodwill

56,365 ¥Impairment loss

For 2020:

106

Electronics

Net sales

1¥

Information
Communication

Lifestyle andIndustrial
Supplies

Net sales and operating income

Payables:Sterling pound

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）¥

DNP Integrated Report 2020107

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BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

Independent Auditor ʼs Report

Related information
Information by geographic area
Millions of yen

For 2020:

Japan

¥

Net salesAsia

1,155,716¥

Other region

169,659¥

Total

76,519¥1,401,894

Thousands of U.S. dollars (Note 3)

For 2020:

Japan

Net sales$ 10,602,899

Asia

$

Other region

1,556,505

$

Total

702,009$ 12,861,413

Millions of yen

For 2019:

Japan

Net sales¥Asia

1,163,128¥

Other region

162,056¥

Total

76,322¥

1,401,506

Information about goodwill by reportable segments
Millions of yen

Reportable segments
For 2020:

Information
Communication

Lifestyle andIndustrial Supplies

Unamortized balance of goodwill

¥

¥

581

606

Electronics¥

Beverages

-

¥

Total

-

¥

1,187

Thousands of U.S. dollars (Note 3)

Reportable segments
For 2020:

Information
Communication

Lifestyle andIndustrial Supplies

Unamortized balance of goodwill

$

$

5,330

5,560

Electronics$

Beverages

-

$

Total

-

$

10,890Millions of yen

Reportable segments
For 2020:

Information
Communication

Unamortized balance of goodwill¥

Lifestyle andIndustrial Supplies

669¥1,820Electronics¥

Beverages

-

¥

Total

-

¥

2,489

(*) The amount of amortization of goodwill is omitted as it is disclosed in "Segment Information".

108

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BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

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110

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BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

Major Subsidiaries and Affiliates(As of March 31, 2020)

Printing
DNP Hokkaido Co., Ltd.
DNP Tohoku Co., Ltd.
DNP Chubu Co., Ltd.
DNP Nishi Nippon Co., Ltd.
DNP Shikoku Co., Ltd

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

100
100
100
100
50

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

DNP Tamura Plastic Co., Ltd.

3,000
266
100
50
50
100
50
100
50
200
180
100
60
50
49
(S$1,000)
4,600

Development and maintenance of software
843
Planning, production and sale of artistic images and videos
300
Offset 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 and production of printed materials
50
Planning, development and operation of online advertising and computer systems, etc.
10
Production and sale of all types of printed matter10
Production and sale of plastic cards and business forms(VND 1,000,000)
100,000
Card-issuing services(US$1,000)
2,000

Production of lithium-ion battery components

200

100.0

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

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

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)
47,200

Display Components(53.5)(53.5)(53.5)(53.5)(11.0)(15.1)

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

DNP Precision Devices Himeji Co., Ltd.
DNP Denmark A/SElectronic Devices

Foto Fantasy, Inc.
DNP Photo Imaging Europe SAS

Sale of photo-related products

DNP Imagingcomm Europe B.V.

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

100
100
60
90
(RM 1,000)
190,000(US$1,000)
71,980(US$1,000)
10(Euro 1,000)
2,408(Euro 1,000)
1,000

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.*

45.0

100.0
100.0
100.0
100.0 (100.0)
100.0
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.*

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

DNP Vietnam Co., Ltd.

Production and sale of packaging materials

PT DNP Indonesia

Production and sale of packaging materials

430
300
200
100
80
50
75
(THB 1,000)
200,000(US$1,000)
31,500(US$1,000)
26,000

84.0
100.0
90.0
100.0
100.0
100.0
50.0
100.0

300
300
200

100.0
50.0
100.0

100.0
(20.0)
51.0

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$1,00)
420(CNY1,000)
21,000
Coordination of DNP business operations in the Southeast Asia/Oceania region(S$1,000)
2,000(US$1,000)
55,44120.6
100.0
100.0 (100.0)
100.0
33.4
30.9
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(CNY1,000)
10,000(CNY1,000)
24,000100.0

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

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

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

DNP Taiwan Co., Ltd.

Sale of precision electronic components

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

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

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

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

112

100.0

Personal Welfare, Facility Service and Others

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

80.5

Other

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

DNP Imagingcomm America Corporation

100.0

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

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

60

DNP High-performance Materials Co., Ltd.

Information Innovation

PT. Wahyu DNP Bureau

Manufacturing and sale of automotive accessories

Industrial Supplies

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 Solutions Co., Ltd.
DNP Multi Print Co., Ltd
DNP HyperTech Co., Ltd.
NBC Co., Ltd.*DNP Plannning Network Co., Ltd.
DNP Social Links Co., Ltd.
DNP Media Support Co., Ltd.
MK Smart Joint Stock Company

Ownership ratio ofvoting rights (%)

Mobility BusinessInformation 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)

Production and sale of beverages

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.

2,935

59.9 (6.4)

DNP Integrated Report 2020113

TOP MESSAGE MANAGEMENT PLAN

INITIATIVES FORVALUE CREATIONTOWARDSUSTAINABLE GROWTH

BUSINESS RESULTS（FINANCIAL AND NON-FINANCIAL INFORMATION）

Investor Information(As of March 31, 2020)

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

Stock Code: 7912
Administrator of Shareholder Register:Mizuho Trust & Banking Co., Ltd.
Stock Transfer Agency Department
2-1, Yaesu 1-chome, Chuo-ku,
Tokyo, Japan

Number of Employees (consolidated): 38,181
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):21,606
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 5)
JP Morgan Chase Bank 385151
Japan Trustee Services Bank, Ltd. (Trust Account 7)
Nippon Life Insurance Company
GOVERNMENT OF NORWAY

31,607
15,871
9,264
7,636
5,706
5,335
4,985
4,942
4,735
4,052

DNP

(between April 1, 2017 and March 31, 2020)

Established: 1876

Shares(thousands)

Share Price Evolution (Tokyo Stock Exchange)＊1

Percentage
(%)

11.25
5.65
3.30
2.72
2.03
1.90
1.77
1.76
1.69
1.44

Notes:
1. The ownership stakes are based on the total number of shares outstanding lesstreasury shares (280,892,114).
2. The number of treasury shares is excluded from the figures above.
3. Japan Trustee Services Bank, Ltd. and Trust & Custody Services Bank, Ltd. merged with
JTC Holdings, Ltd., which was a joint holding company of both companies, to become
Custody Bank of Japan, Ltd. on July 27, 2020.

American Depositary Receipts:
Ratio (ADR:ORD): 2:1
Exchange: OTC (Over-the-Counter)
Symbol: DNPLYCUSIP: 233806306
Depositary:
The Bank of New York Mellon
101 Barclay Street, New York,NY 10286, U.S.A.
Telephone: (201) 680-6825
U.S. toll free: 888-269-2377(888-BNY-ADRS)URL: http://www.adrbnymellon.com/
Annual Meeting of Shareholders:
The annual meeting of shareholders of DNP is
normally held in June each year in Tokyo, Japan.
Investor Relations:
Dai Nippon Printing Co., Ltd.
IR and Public Relations Division
Investor Relations Office
1-1, Ichigaya-Kagacho 1-chome, Shinjuku-ku,
Tokyo 162-8001, Japan
Tel: +81-3-6735-0124
Fax: +81-3-5225-8239
Web Site:https://www.dnp.co.jp/eng/

DNP Stock Price (yen)

30
3,000
20
10
2,500
0
−10

2,000

−20

18

19

SRI indices
FTSE4Good
Global Index

Supplier Engagement Rating
MSCI ESG Leaders indexes

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

114

ETHIBEL
Investment Register

CDP
SUPPLIERENGAGEMENTLEADER−30

20＊1 Index 100 = March 31, 2017
＊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

2016.3

DNP (%)TOPIX (%)

2017.32018.32019.32020.388.36

108.22102.31124.27112.20（89.18）（102.28）（118.51）（112.54）（101.85）＊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, 2020 ÷ the stock price at theend of the fiscal year ended March 31, 2015.)

Voting Rights (as of March 31, 2020)

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 indicesemployed by Japanʼs Government Pension Investment Fund (GPIF), FTSE 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. In addition, we were selected for the first time by the CDP, an international non-profit organization that provides environmental
information disclosure systems, as the highest rated the Supplier Engagement Leader Board in the Supplier Engagement Rating.

TOPIX

Increase (%)＊2

Number of Stocks(stocks)

Type

Recognition from Society (As of June 30, 2020)

Nikkei Average

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

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

Common stocks
Common stocks

―

―

―

―

―

―

43,348,200―

280,628,200
263,946
324,240,346

2,806,282―

2,806,282

Treasury Stocks (as of March 31, 2020)
HolderDai Nippon Printing Co., Ltd.
Total

Number of Voting Rights(rights)――

No. of Stocks Held

Percentage of Holding to
No. of Outstanding Shares

43,348,232
43,348,232

13.37
13.37

DNP Integrated Report 2020115

1-1, Ichigaya Kagacho 1-chome, Shinjuku-ku,
Tokyo 162-8001, Japan
TEL: +81-3-3266-2111
URL: https://www.dnp.co.jp/eng/©2020 DNP