OUR PURPOSE / MISSIONDNP Group Vision

DNP Groupʼs Basic Management Policy

The vision is comprised of three main elements, the first of which is central:
Corporate Philosophy, Business Vision and Guiding Principles

Brand Statement

Creating future standards
Based on the Corporate Philosophy, the DNP Group will conduct business activities
that create a better future with a long-term view in order to realize a sustainable,
better society and more comfortable lifestyles.

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

Business
VisionGuiding
Principles

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

TAIWA (dialogue) andcooperation

Through such initiatives,
the DNP Group will create sustained business value and shareholder value,with an ROE target of 10%, andexpedite achieving a PBR of more than 1.0X.

Business Strategy• Promote business structure transformation andaccelerate concentrated investment in priority
business and new business linked to the resolutionof social issues and megatrends.
• Transform risks in a changing business environment
into opportunities for growth through the evolution
and cultivation of core technologies.

The DNP Group Code of Conduct

Three Corporate Responsibilities

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

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

1. Contributing to the development of society
1. Social contribution as a good corporate citizen
1. Compliance with the law and social ethics
1. Respect for human dignity and diversity
1. Environmental conservation and realization ofa sustainable society
1. Realization of a “universal society”
1. Ensuring the safety and quality of our products
and services
1. Ensuring information security
1. Proper disclosure of information
1. Realization of a safe and vibrant workplace

2

Financial Strategy

Non-financial Strategy• Create funding for investment in growth through cash
flow generated through business activities, in addition
to maximization of efficiency of funds including
acceleration of the reduction of assets held.

• Expand investment in people based on the Human
Capital Policy.

1. Value Creation• Plan the largest acquisition of treasury shares in DNPʼshistory with the aim of improving capital efficiency.

2. Integrity in Conduct• Seek to further enhance shareholder returns consciousof indicators such as EPS while maintaining stablefinances for sustained corporate activity.

• Enhance intellectual capital utilizing DNPʼs uniquestrengths and external partnerships.
• Contribute to the realization of a decarbonizedsociety, a recycling-oriented society and a society
in harmony with nature.

3. Transparency (Accountability)

DNP Integrated Report 2023

3

OUR PORTFOLIO
Overview of DNPʼs BusinessToward Building a Stronger Business Portfolio−−−

New Business Segments
From FY2023

Products and Services with Top Market Shares in Japan and Overseas

Net Sales/Operating Income by Segment(Ratio by segment) (Fiscal year ended March 2023)

Business segments through FY2022
Beverages

Electronics

203.5

51.6
(3.8%)

Smart
Communication

Japanʼs top

Smart cards
Information
Communication

720.2(52.3%)(14.8%)

Information Communication■

Publishing Business(Publishing & media services, publications distribution)■

Information Innovation Business(Marketing, BPO, information security)■

Net sales income
by segment

Imaging Communication BusinessInformation
Security• Imaging communication• Information Security• Content &XR communication• Marketing• Publishing• Education

Worldʼs top

Dye-sublimation
thermal transfer
printing media forphoto prints
Imagingcommunication

Lifestyle and Industrial Supplies

Japanʼs top

Aseptic fillingsystems for
PET bottles(¥ billion)

Packaging Business■ Living Spaces Business■ Industrial High-performance
Materials Business■

Lifestyle andIndustrial Supplies

400.2

Electronics(29.1%)

Beverages

Electronics

46.9

0.6
(0.7%)(57.5%)■

Information
Communication

26.7

Display Components BusinessLife & Healthcare• Mobility and industrial
high-performance materials• Medical & healthcare• Packaging• Living spaces• Beverages(Color filters for liquid crystal displays, optical films, metal masks fororganic light-emitting diode (OLED) displays and others)

Packaging

Worldʼs top

Battery pouches
for lithium-ion
batteries
Mobility and industrial
high-performancematerials

Living spaces■ Electronic Devices Business(Photomasks for semiconductors and others)

Worldʼs top(32.8%)

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

Operating income
by segment■

Optical films fordisplays Display

Electronics

Beverages Business

Digital interfaces

Worldʼs top(¥ billion)• Digital interfaces• Semiconductors
Lifestyle andIndustrial Supplies

Japanʼs top

Building decorative
materials(floor coverings)

Metal masks for
OLED display
manufacturing
Digital interfaces

7.3(9.0%)*Each fiscal year begins on April 1 and ends on March 31 of the following year

4

DNP Integrated Report 2023

5

OUR VALUE CREATION
Contents of DNP Group Integrated Report 2023

Toward creating sustainable business value and shareholder value

WHO WE ARE

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

TOP MESSAGE ……………………………………………………………………………8
Create value primarily infocus businesses

Creating new value by
promoting businessBusiness Strategy

Increase value using all available
restructuring approaches

OUR STRENGTHSAND VALUE CREATIONPROCESSES

Transform risks into opportunities for
growth through the evolution andbusiness cultivation of core technologies

P&I Innovations
Securely and seamlessly connect real and digital,
contributing to the evolution of an information society

1. THE DNP GROUPʼS VALUE CREATION STORY ……………… 12
Identifying Materiality …………………………………………………………………… 12
DNPʼs Value Creation Process ………………………………………………………… 14
DNPʼs Strengths Beginning with Technologies ………………………………… 16

2. MEDIUM-TERM MANAGEMENT PLAN:
BUSINESS STRATEGY / FINANCIAL STRATEGY ………………… 18
OUR STRATEGIES

Printing & Information

Reflecting on the Three-Year Plan (FY2020-FY2022) ………………………… 18
Business Strategy, Message from the Director in Charge……………………… 21
Financial Strategy, Message from the Director in Charge ……………………… 25

DNPʼs core values developed through printing
Contributing to a sustainable society where
people can live safe, secure and healthy lives

Strengthening
business base

3. MEDIUM-TERM MANAGEMENT PLAN:
BUSINESS STRATEGY BY SEGMENT …………………………………… 28

Boost asset efficiency

Strengthen corporate governance

Financial Strategy
Non-financial Strategy

OUR BUSINESS

Shareholder returns/
stakeholder returns

Business Strategy by Segment:
Smart Communication ………………………………………………………………… 28
Life & Healthcare ……………………………………………………………………… 32
Electronics ……………………………………………………………………………… 38

4. MEDIUM-TERM MANAGEMENT PLAN:
NON-FINANCIAL STRATEGY ………………………………………………… 42
OUR BASEDNP Groupʼs information disclosure that leads to “TAIWA (dialogue) and cooperation”

Financial

The DNP Groupʼs corporate website

https://www.global.dnp

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

Non-financial■

Integrated Report■

Promoting“TAIWA (dialogue)
and cooperation”
with diverse
stakeholders

5. MANAGEMENT STRUCTURE …………………………………………… 64
OUR GOVERNANCE• Financial results briefings• Sustainability briefings• IR meetings
Others◇ Period covered by this report: April 1, 2022 to March 31, 2023

However, reporting is not confined to this period regardingsome contents.
◇ Scope of report: All companies and divisions of the DNP GroupIn this report, “ DNP ” refers to the entire DNP Group, and “ we”
refers to DNP or the DNP management team.
(In the section on Corporate Governance (pages 68-71, pages
74-79), “ DNP ” refers to Dai Nippon Printing Co., Ltd.)◇ Issued: October 2023 (Next scheduled issue: October 2024)

Board of Directors ………………………………………………………………………… 64
Corporate Governance …………………………………………………………………… 68
Dialogue of Outside Directors ……………………………………………………… 72

6. BUSINESS RESULTS/CORPORATE PROFILE ………………… 80

Editorial Policy for DNP Group Integrated Report 2023

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 DNPʼs 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.

Strengthening of Human Capital, Message from the Director in Charge …… 44
Strengthening Intellectual Capital, Message from the Director in Charge …… 50
Value Creation through Digital Transformation (DX) …………………………… 54
Initiatives for Environment ……………………………………………………………… 56
Initiatives Across the Entire Supply Chain ………………………………………… 62

OUR PERFORMANCEManagement ʼs Discussion and Analysis …………………………………………… 81
Key Financial Data for 11 Years ……………………………………………………… 88
Non-financial Data ………………………………………………………………………… 90
Major Subsidiaries and Affiliates/ Our Products and Services/
Investor Information ……………………………………………………………………… 92
Dialogues with Shareholders and Investors ……………………………………… 98
Message from the Director in Charge ……………………………………………… 99

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

6

DNP Integrated Report 2023

7

TOP MESSAGE

Achieving a Major
Transformation to
Realize a Sustainable,
Better Society and
Well-being Lives
Yoshinari Kitajima
President

Promoting the New Medium-term Management Plan inaccordance with the DNP Group's Basic Management Policy
The DNP Groupʼs Corporate Philosophy is “ The DNP Group
connects individuals and society, and provides new value”
and we strive to realize a sustainable, better society and wellbeing lives. DNP focuses on solving social issues, creating
new value that meets peopleʼs expectations and making thisvalue continually exist as “basics” that are indispensable inpeopleʼs daily lives. We broadly express this aspiration in our
Brand Statement of “Creating future standards.”
In 2015, we formulated the DNP Group Vision thatincorporates this Corporate Philosophy and our Brand
Statement. Subsequently, in February 2023 we announced
the DNP Groupʼs Basic Management Policy to achieve further
growth amid dramatic changes in the environment, society
and economy. In announcing this policy, DNP once again
declared both inside and outside the company that it will
undertake business activities to create a “better future” witha view toward the long term.
In realizing this Vision, DNP will create sustained businessvalue and shareholder value through specific initiatives basedon its Business Strategy, Financial Strategy and Non-financial
Strategy and as key performance indicators aims to attain
ROE of 10%, and “expedite achieving a PBR (price-to-bookratio) of more than 1.0X.”

Among our long-term value creation initiatives, welaunched a three-year Medium-term Management Plancovering the three-year period from fiscal 2023 to fiscal
2025 as the first step toward further transformation.
In response to the Basic Management Policy, as theBusiness Strategy of this Medium-term Management Plan,
DNP will make concentrated investment of 260 billion yen or
more over the five years to fiscal 2027 in focus businessareas (see pages 11 and 21-24) and will continue totransform its business portfolio to make its revenue structure
more robust.
Regarding its Financial Strategy, DNP plans to reduce
strategic shareholdings to less than 10% of net assets overthe next five years while acquiring a total of 300 billion yen intreasury shares with the aim of improving capital efficiency.
In its Non-Financial Strategy, DNP will mainly focus on
expanding investment in people based on its Human Capital
Policy, enhancing intellectual capital that leverages DNPʼsunique strengths and external partnerships and promoting
environmental initiatives toward realizing a decarbonizedsociety, a recycling-oriented society and a society in harmony
with nature.

Outline of measures in the New Medium-term Management Plan
Initiatives Aimed at Realization of the Vision–Accelerating initiatives for “Creating future standards”–

Business
Strategy

Financial
StrategyNon-financial
Strategy• Realize growth through concentrated investment of 260 billion
yen or more (over the 5 years from FY2023 to FY2027) in focus
business areas• Transform business portfolio including restructured businesses

DNP Groupʼs vision forrevenue and capital structure• Reduce strategic shareholdings to less than 10% of net assets• Plan to acquire treasury shares valued at 300 billion yen to
improve capital efficiency(5 years from FY2023 to FY2027)（ Record operating income:120.6 billion yen）

• Expand investment in people based on Human Capital Policy• Enhance intellectual capital utilizing DNP ʼs unique strengths andexternal partnerships• Contribute to the realization of a decarbonized society, arecycling-oriented society and a society in harmony with nature

ROE

Operating income

130 billion yen or more

Equity capital1 trillion yen
10%

By implementing the above initiatives and also expanding disclosure especially on focus business areas,

we will expedite achieving a PBR of more than 1.0X.

*See pages 2-3 of the DNP Group Vision and DNP Group Basic Management Policy.

8

DNP Integrated Report 2023

9

TOP MESSAGE
P&I Innovations

to 1 trillion yen to continually attain ROE of 10％ or higher.
Additionally, as milestones toward reaching these targets,
DNP aims to increase operating income to 67 billion yen in
fiscal 2023, to 75 billion yen in fiscal 2024, and to 85 billion
yen in fiscal 2025, the final fiscal year of the three-year plan.

By promoting these three strategies, we will shape therevenue and capital structure envisioned by the DNP Group.
As its long-term targets, DNP aims to increase operating
income to 130 billion yen or more, thereby surpassing its
record operating income of 120.6 billion yen achieved infiscal 2006, while reducing equity capital from 1.1 trillion yen

Informationsociety
A society where realand digital seamlessly
connect, with robotics
and AI blending inManagement targets
Business Strategy• Investment of 260 billion yen or more in focus business areas(5 years from FY2023 to FY2027)• Medium- to long-term business portfolio management

FY2022

OperatingincomeFY2023(ended Mar. 2025)(ended Mar. 2024)

resulttargettarget

61.2

67

75

billion yen

FY2025

FY2024(ended Mar. 2023)

billion yen

DNP Groupʼs vision
for revenue andcapital structure(ended Mar. 2026)

target85

billion yen

130billion yen
or more• Control of equity capital conscious of capital efficiency

1.1

1trillion yen

trillion yen
Achieve 8 % or more including asset sales

Sustained at 10 % or more

Strengthening and promoting Business Strategy–Creation of new value for a better future–
DNP believes that a healthy society and economy as well as
comfortable and well-being lives are only possible on asustainable earth. For this reason, DNP will take a long-term
perspective and accurately identify and appropriately respondto social issues and megatrends such as the informationsociety; population problems; the imbalance of supply anddemand of resources, electricity, water and food; and climatechange. Concurrently, DNP is promoting initiatives to turnrisks into business opportunities.
In recent years, DNP has been affected by rising costs for
raw materials and energy due to such factors as the
emergence of geopolitical risk and the instability of global
supply chains. Meanwhile, social and economic activities arerecovering from the COVID-19 pandemic while peopleʼsworkstyles and lifestyles that changed profoundly havebecome firmly established in new formats. Digitaltransformation (DX) is also advancing and there are
increasing opportunities for DNP to synergize its uniquehybrid strengths such as physical and virtual realities, digital
and analog technologies, and manufacturing and services.
In particular, from fiscal 2022 we will strengthen theactivities of the Sustainability Committee, for which I serve as
chairperson, and work to adequately ascertain, analyze andmanage risks as variable factors. This committee collaborates
10

Contributing to asustainable society
where people can live
safe, secure andhealthy lives

Climate change
World continuing tomove toward preventionof global warming anddecarbonization

Well-being
Enriched lifestyle

Semiconductors
Mobility andindustrial
high-performancematerials
Content & XR
communication

Medical &healthcare

Sustainability
Realizing a sustainable,
better society–Supporting value creation by strengthening the management foundation–

Implement first round of acquisition of treasury shares valued at 100
billion yen, which is the highest amount on record

7.9 %DNPʼs core values
developed throughprinting

The balance of supply anddemand of resources,
electricity, water and food issignificantly affected byclimate change, the population
problem and advancement of
an information society

Digitalinterfaces

Strengthening and promoting Financial Strategy and Non-financial Strategy• Plan to acquire around 300 billion yen in treasury shares(5 years from FY2023 to FY2027)

ROE

While the population ofJapan decreases andglobal population
increases, the birthrate
is decreasing andsociety is aging
worldwide

Printing &Information

Imbalance of supply
and demand ofresources, electricity,water and foodbillion yen

Financial Strategy

EquitycapitalPopulation problem

Securely andseamlessly connect
real and digital,
contributing to theevolution of an
information society

Focus business areas

with the Corporate Ethics Committee and the BCM Promotion
Committee to manage company-wide risks under medium-tolong-term corporate activities that emphasize theenvironment, society and governance (ESG). We regard thesevariable factors as major opportunities for DNP to expand its
business as well as to curb negative impacts. In an age
where abrupt changes are becoming the norm, it isimperative that we ourselves take the lead in reorienting theenvironment, society and the economy toward a better
direction rather than reacting to individual changes after
these occur. Through our business activities, we havecontinuously supported communication between people andnurtured culture and we believe that we can also transformthese changes into major business opportunities.
The DNP Group will leverage its strengths in Printing &Information that it has cultivated to the present, deepen
collaboration with its numerous partners and focus on
businesses linked to the resolution of social issues andmegatrends. By promoting P&I Innovations as set forth in our
Business Vision and implementing a variety of measures
based on the Business Strategy, DNP will take on thechallenge of realizing a sustainable society where people canlive with peace of mind, safety, health and well-being
lifestyles.

Strengthening the management foundation that supports ourbusiness activities is also another important management
theme. Under our new three-year Medium-term Management
Plan, by strengthening and promoting our Financial Strategy
and Non-financial Strategy, DNP will expand its financial
capital as well as non-financial capital that includes humancapital, intellectual capital, manufactured capital, natural
capital and social/relationship capital and invest in a varietyof business activities.
The DNP Groupʼs greatest strength in creating new value
is the existence of each and every employee. All employees
both in Japan and overseas are valuable human resources
and serve as the driving force for our sustainable growth as acompany. In recognition of this, we aim to increase “humancreativity (added value productivity)” globally based on the
Human Capital Policy to clearly connect investment in people
to the enhancement of corporate value.
Additionally, we are working to enhance intellectual
capital utilizing DNPʼs unique strengths as well as its external
partnerships that encompass creating new businesses,

fortifying technological strengths and undertaking businessglobally. Besides continuing to invest in research anddevelopment on a scale of 30 billion yen annually, DNP willbuild and strengthen its data management infrastructure as
an internal system.
Regarding environmental issues, for which solutions areurgently needed around the world, we will work on the dual
imperatives of value creation through business activities andstrengthening management foundations. Alongsidecontributing to a decarbonized society through products andservices, we will promote efficient resource reuse and minimize
the impact on biodiversity throughout the entire supply chain.
The DNP Group has a corporate culture of continuously
taking on challenges. In the future as well, we will continue totake on the challenge of realizing a better future from along-term perspective. To do so, I would like to deepen
TAIWA (dialogue) with numerous stakeholders, including
shareholders. Going forward, I ask for your further support as
we work to achieve our objectives.

DNP Integrated Report 2023

11

THE DNP GROUPʼS VALUE CREATION STORY

Identifying Materiality

Identifying and analyzing risks (variables) closely associated with DNPʼs business activities

DNP believes that a healthy society and economy as well as comfortable and well-being lives for people can only be achieved ona sustainable earth. Toward realizing the “better future” envisioned by DNP, we will identify key issues (materiality) for thesustainable growth of both society and DNP.
In identifying materiality, DNP comprehensively ascertains social issues, identifies and evaluates medium- to-long-term risks(variable factors) for DNP in undertaking business activities, and identifies and prioritizes social issues with high materiality for
DNP, society and stakeholders.
Additionally, to create value and strengthen the management foundation that supports value creation, we have selected “CSRManagement Principal Themes” (pages 62-63) and are progressing with efforts to strengthen management across the entire
supply chain.

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

Economic risks

1

A “better future” aimed for by DNP

Comfort
Value

Value

• A society where people canlive safe, secure, healthy
and well-being lives• An information society that
• A society that realizes abalance between economic
growth and the global
environment• A society where people

mutually respect each other• Declining birthrates and aging population, labor shortage and acceleration of employment mobility• Changes in issues related to the dignity of diverse people living in diverse societies• Changes in various conditions needed for all people to live comfortably (mental and physical health, safety,
hygiene and others)• Increasing importance of responding to human rights risks throughout the supply chain, etc.

Variables in systems for building a healthy society and in market trends

Variables related to the sustainability of the global environment that form
the foundation of all corporate activities

Environmental risks

Sustainable
Sustainable
Environment,
Environment,
SocietyandSociety andEconomyEconomy• Changes in financial infrastructure due to reassessment of capitalism, the establishment of virtual economic
zones and other factors• Changes related to the information infrastructure (strengthening and loosening of various rules and regulations
such as GDPR, threats to information security and others)• Depletion of natural resources, shortages or restrictions in the supply of energy and resources, soaring prices, etc.

• Changes in legal and political systems in each country/region and strengthen responses to risks in the supply chain• Expansion of geopolitical risk/country risk
• Manifestation of various risks due to differences in culture, systems and rules, and other factors

connects real and digital

Sustainability
Sustainability

Variables in systems that form the basis of economic activities and in market trends

Variables related to human capital and human rights

Exciting

Social risks

Well-being
Well-being
lives
Enriched lifestyle• Accelerate development of business models/technologies/products/services, etc.
• Acceleration of digital transformation (DX) and establishment of a global network, etc.
• Rapid changes in various economic indicators (domestic and overseas economic conditions, industry trends,
consumer confidence, prices, exchange rates, GDP and others)• Changes in the balance as well as the fragmentation of the global economy due to geopolitical factors, etc.

Consumers’ perspective• Increased frequency and severity of natural disasters and increased water risks such as droughts and floods
due to climate change• Accelerating plastic pollution and biodiversity loss, etc.

Changing variables in market trends and systems related to global environmental
conservation• Strengthening and globalization of disclosure of climate change risks and nature-related information• Tightening of regulations on GHG emissions, revisions to Japanʼs energy policy and acceleration of thetransition to a circular economy• Expansion of market for environmentally positive products and services and acceleration of technology
innovation, etc.

Process for identifying materiality

Identifying andprioritizing social
issuesIdentifying
materiality

12

Related stakeholders

International frameworks considered

Employees, local communities, business partners,
shareholders/institutional investors, education/research
institutions, NPOs/NGOs, various organizations, etc.

SDGs, the GRI Standards, United Nations Global Compact,
SASB Standards, UN Guiding Principles on Business andHuman Rights, etc.

DNP identifies and prioritizes social issues with high materiality for DNP, society and stakeholders by identifying
the relationship of these issues with our Corporate Philosophy and Business Strategy, as well as by identifying
short-, medium-, and long-term risks and opportunities and assessing the impact of these on management.
DNP holds opinion exchanges with relevant internal departments, external experts and outside directors. We
identify DNP ʼs materiality after discussion with and approval by the Sustainability Committee, Management
Committee and Board of Directors.

Prioritization of issues

We identify and prioritize
key issues for society andstakeholders as well as
key issues for DNP.

Key issues for society

Ascertaining
social issues

DNP comprehensively ascertains social issues from the perspectives of market changes andmegatrends and the materiality of these for each stakeholder as well as international frameworks
such as SDGs, the GRI standards and ESG social evaluation items.

Key issues for DNP

DNP Integrated Report 202313

1 ｜ THE DNP GROUPʼS VALUE CREATION STORY

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

Risks & business opportunities/
Input/Management resources

Business Strategy/Business model/

Social issues that will be solved by DNP

Economicrisks

Social Issues & Megatrends

InformationsocietySocialrisks

A society where realand digital seamlessly
connect, with robotics
and AI blending in

Imbalance of supply
and demand ofresources, electricity,water and food
The balance of supply anddemand of resources,
electricity, water and food issignificantly affected byclimate change, the population
problem and advancement of
an information society

Population
problemEnvironmental
risks

While the population ofJapan decreases andglobal population
increases, the birthrate
is decreasing andsociety is aging
worldwide

ClimatechangeWorld continuing tomove toward preventionof global warming anddecarbonization

Business model
The DNP Group aims to realize a sustainable society, andits corporate philosophy is to connect individuals andsociety and provide new value. Based on this philosophy,
DNP will conduct business activities that create a better
future with a long-term view in order to realize asustainable, better society and well-being lives.

Creating new value
by promoting
business
Business Strategy

P&I Innovations
INPUT (management resources)
Utilize various types of content (text, images, video, audio)
and confidential information and important information
backed by the strong relationships of trust built withcompanies, organizations and consumers in Japan andoverseas and our highly advanced information security
infrastructure.
• Create new value by synergizing the DNP Groupʼs diverse

Securely and seamlessly connect real and digital,
contributing to the evolution of an information society

Printing & Information
DNPʼs core values
developed through printing

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

OutcomeNew value creation

The “better future” aimed for DNP

Total
strengths of
All DNPManagement
andoperation

Sales

Technologies
andR&D

Non-financial capital

Production
andmanufacturing

Financial capital
Human capitalIntellectual capital

Financial Strategy

Manufactured capital
Natural capitalSocial and relationship capital

Non-financial Strategy

Creating future standards
Well-being lives
Enriched lifestyleBusiness Strategy

Promote concentrated investment and business structuretransformation in focus business areas
Transform risks into growth opportunities
Financial Strategy

Non-financial Strategy

Generate funds for growthinvestment through businessactivities and maximizing
capital efficiency

Expand investment in people
based on the Human Capital
PolicyMaintain financial stability
for sustainable corporate
activities

or r

eve

Sustainability
Sustainable, better society

Enhance intellectual capitalutilizing DNPʼs uniquestrengths and external
partnerships

Improve capital efficiency
through treasury shareacquisition, etc.

Accelerate environmental
initiatives

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incom
ly
e
rmstep b
i
f
Ear
l
7
5 billion yen FY
FY 2
wil ture
02 2 r
P
2
0
23
N fu
e su
O
i sio
ʼs v

130

nf

it y
Equ t al
i
p
a
c

Oper

14

Brand Statementwith an ROE target of 10% and expedite
achieving a PBR of more than 1.0X.

Contributing to a sustainable society where
people can live safe, secure and healthy lives

Strengthening
business base

Impact on the environment,
society and economy

Value for people

The DNP Group will create sustained
business value and shareholder value,

strengths and assets, which serve as our business base
• Integrated usage of financial capital and non-financial capital• Generate funds for growth investment through corporate activities
Project
planning anddesignImpactOutput: products and services

ating

6b 1.2
illion

yen
lion
l
i
r
t

incom

ye n

RO

lt

e Eq
uit y

pera

capit

1tr .1illio

aln ye n

ROE

7.9

%

67

ting in

targe

c ome

billion ye n

t

NPʼs

D ter
bet DNP Integrated Report 202315

1 ｜ THE DNP GROUPʼS VALUE CREATION STORY

DNPʼs Strengths Beginning with Technologies
Creating new value by combining diverse strengths
We are constantly refining our most advanced technologies, suchas microfabrication, precision coating and post-processing, basedon printing processes, which is the basis of manufacturing, as
well as planning and design, information processing, materials
development and assessment and analysis. These in turn createsynergies with our know-how in sales, planning, manufacturing,
management and other practices, as well as with our partnersʼ
strengths, to create new value.
Especially for the promotion of DX, we will leverage DNPʼshybrid strengths in both analog and digital technology, reality and

1Strengths such as P&I technology

virtual reality, manufacturing and services. (See pages 54 and 55.)
We are also strengthening collaboration with diverse external
partners to speed up value creation. There are endless such ways
in which our strengths can be combined, and we will continue topursue the many possibilities to achieve a better future.
DNPʼs unique strengths that it has advanced in both P&I(Printing & Information) are unmatched by any other company.
By deploying the total strengths of All DNP, we will create
unprecedented value that is indispensable to people andsociety.

Technologies cultivated through printing processes

Project
planning
anddesignMicrofabrication

Precision
coating

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

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

Information
processing

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

Ability to create new value

2

Anticipate the future and quickly provide the value created by applying our own
technologies to the entire world
Project
planning anddesignProduction
andmanufacturing

to find value

Totalstrengths of
All DNPManagement
andoperation

Application
capabilities

Foresight

Sales

to create value

Foresight to perceive future potential
Develop products and services fromthe two time perspectives of 10 years
in the future and the present

Ability to apply our own
technologies and shift
this to other applications

Sales
capabilities
to expand value

No.1

global shareNo.1

domestic share

Globally deploy businessmodels establisheddomesticallyFoundation cultivated in the printing business3

Highly functional products and services and relationships of trust with business
partners and customers

Technologies
andR&D

Information gathering
capabilities
Relationships of trust with tens of thousands ofbusiness partners and customers and useful
information obtained from these relationships

Pursuit offunctionality

Cultivate anddeepen development
capabilities

Create new functionality andvalue based on the technologies
cultivated in the printing process

Form a wide range of businessareas through repeated “cultivation”
and “deepening”

1

2

Editing, manuscript
submission and layout

Film making and platemaking• Film making: Print data is color separated into the four colorsof CMYK* (cyan, magenta, yellow, black) and output on film.

This includes such processes as planning
printed products, selecting materials andprinting methods, designing processes up
to delivery, managing and operating themanuscript, inputting and processing text
and image data, and creating layout data.

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

Printing processes

Effectiveness assessment

Examples of printing such as publication
printing and commercial printing

Product delivery

3
4

DNPʼs P&I technologies
Combining DNPʼsdiverse ideas andknow-how withtechnology

Ideas

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

Know-howwith DNPʼs strengths

Printing(in a narrow
sense)

Etching
processing

16

Printing

Binding andpost-processing

Precision
engraving

Microfabrication

Photolithography

Coating

Precision
coating

Business
designMolding

HologramMedia
conversion
technologies

Vacuumdeposition

Publishingsolutions

Project
planning
anddesignLivingspace
designInformation
processing

Image
processing
andrecognition

PackagingdesignSales
promotion

OpticaldesignDataanalysis

Information
security

Font
technologies

Ideas

Dispersion
andcomposition

Aseptic
filling
processing

Postprocessing

Plastic
forming

Organicsynthesis
technologies

Laminating
technologies

Transfer
processing

AssaydesignMaterials
development

Pigments
andphotosensitive
materials

Process andmaterial
diagnosis

Assessment
andanalysis

Polymermaterials

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.

Know-howTechnologies

Bookbinding
processing

EBand
UV curing

A printing plate with thenecessary number ofcolors is wound arounda roll, ink is applied andhigh-speed andhigh-precision printing
on paper or other items
is carried out.

Postprocessing

Databaseanalysis

Process
simulation

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

Materials
development

Assessment
andanalysis

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

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

DNP Integrated Report 2023

17

2

MEDIUM-TERM MANAGEMENT PLAN:
BUSINESS STRATEGY / FINANCIAL STRATEGY
Create value primarily in growth areas

Reflecting on the Three-Year Plan (FY2020-FY2022)

Anticipating Change to Create
New Value in Challenging Times

Information
Communication

The Medium-term Management Plan spanning from fiscal 2020 to fiscal 2022 coincided with a period
greatly impacted by the COVID-19 pandemic. Amid rapidly changing circumstances, we were compelled torespond promptly and effectively, and we focused on high-profitability and market-growth potential
businesses, striving to expand our sales and profits.
In particular, during fiscal 2021, we achieved a 9.1% return on equity (ROE) thanks to improvements inthe operating income margin. However, in 2022, geopolitical risks, such as the Ukraine conflict, emerged,
leading to disruptions in the supply chain and causing raw material and energy prices to climb. As a result,while the ROE for the fiscal year ended March 2023 exceeded forecasts at 7.9%, operating income remained
at 61.2 billion yen, down 8.3% year on year.

(¥ billions)

FY2019results

FY2022
earnings
forecasts

FY2022
results

Segment
sales

773.0

710.0

720.2

Segment
operatingincome

30.4

29.0

26.7

Segment
sales

Lifestyle andIndustrial Supplies

391.3

408.0

Overview of growth-driving and stable Businesses

400.2

Segment
operatingincome

11.1

12.0

7.3

Segment
sales

186.6

212.0

203.5

Electronics

Management targets(¥ billions)

1,401.8

1,380.0

1,344.1

1,335.4

5.0%

3.7%

4.9%
4.5%

Earnings
forecast

Operating income

66.7
49.5

62.0

46.9

Smart cards used by financial institutions, “ My Number ”
government issued ID cards, BPO, etc. increased

Battery pouches

In addition to battery pouches for automotive use being affectedby the reduction in automotive production until around the
middle of the fiscal year, device demand also decreased for IT

Industrial
high-performancematerials

Demand for photovoltaic module components increased

Mobility interior andexterior materials

Although reduced automotive production had an impact
until the middle of the fiscal year, there was a recovery inthe second half

Optical films

A global slump in consumption and inventory adjustment
throughout the entire supply chain had an impact

Metal masks

The increase in the rate of use of OLED displays insmartphones, etc. contributed

Semiconductors

Although the market was seen to slow down from the
middle of the fiscal year, demand for product development
by client companies was steady

DNP has continued to undertake all kinds of structural reforms to further expand our corporate value.
For example, we have decided to expand domestic and overseas production lines for battery pouches,
domestic production lines for barrier films and eco-friendly packaging materials, and production lines forlarge-size metal masks, which are scheduled to start operation in the first half of fiscal 2024 and ultra-wide
surface materials for optical films, which are scheduled to start operation in the first half of fiscal 2025. Our goal
is to further expand business. On the other hand, we proceeded as planned with the downsizing of our paper
media production bases in Japan and overseas, the integration of bases in the Kansai region of our packaging
business, and the closure and sale of our Himeji plant for color filters. These moves were in response topersistently challenging businesses.
We have also implemented a variety of measures to expand our value, particularly in our focus businesses,
including mergers and acquisitions (M&A), capital and business alliances and the launch of operating companies.

61.2

Increase value using all available restructuring approaches

Operating income ratio

ROE

47.0

Secure information* The arrows indicate comparisons with targets

67.0

56.2

34.1

Strong sales of photographic materials and services in
Europe and Asia, in addition to the mainstay U.S. market

1,373.2

4.0%

Sales

Segment
operatingincomeImagingcommunication

Reorganization of operating bases andbusiness downsizing

FY2022FY2019results

FY2020results

FY2021
results

Targets

Results

7.3%

2.6 %

9.1%

Earnings forecast: 6.0 %7.9 %Target: Continuously achieve 5.0 % or above

Downsizing paper media
production bases

Information
Communication(Each fiscal year begins on April 1 and ends on March 31 of the following year)• Closure and sale of overseas site (Singapore)• Consolidation of domestic manufacturing sites(closure of Akabane area in Tokyo, etc.)• Consolidation of functions of preprocessing

divisions (pre-press)

Expansion measures

Expanding data distribution-related
business• Establishment of NTT EDX

18

Reviewing low value-added products
and restructuring business locations

Lifestyle andIndustrial Supplies• Integration of sites in the packaging-related

business (Kansai area)(Closure of Uzumasa Plant in Kyoto,
consolidation into Kyotanabe Plant)• Conversion of Sharing Box into a Group company• Acquisition of Color Vision International

Strengthening of
BPO service business• Establishment of DNP CoArise

In fiscal 2022, performance exceeded expectations in the imaging communication business, which benefited
from an upward trend in the overseas photo printing market; metal masks for manufacturing organic
light-emitting diode displays (OLEDs), which saw increased adoption in smartphones and other devices; andthe semiconductors business, driven by robust demand from customers for product development.
Secure information products such as smart cards and Business Process Outsourcing (BPO), andindustrial high-performance materials such as photovoltaic module components were mostly in line withinitial forecasts.
On the other hand, battery pouches for lithium batteries, which were affected by the global slump in
automobile production, mobility interior and exterior materials, and optical film-related businesses, impacted
by extraordinary demand for IT equipment shown during the COVID-19 pandemic, fell short of initial
forecasts.
The impact of raw material and energy price hikes was also significant, and we were not able tocompensate for the full amount by passing on prices. As for operating income by segment, Information
Communication and Lifestyle and Industrial Supplies fell short of forecasts, while Electronics was basically inline with expectations.

Expanding the imaging
communication business

Entry into XR communication business• Promotion of external collaboration and investment

Expanding production lines for barrier films, eco-friendly packaging materials, etc.
• Installation of barrier film production line at Tobata Plant (Fukuoka Prefecture)

Expanding production lines for lithium-ion battery pouches• Installation of production line at Tsuruse Plant (Saitama Prefecture)• Installation of post-process line in Europe (Denmark Plant), with operation scheduled to start in FY2023• Consider planning the strengthening of production capacity inside and outside Japan

including Europe and the US

Downsizing color filter business• Closure and sale of Himeji Plant

Electronics(Hyogo Prefecture)

Expand optical film production lines

Investing in electronic devices business• Installation of new large metal mask production line at • Increase of capital investment in photomasks

Kurosaki Plant (Fukuoka Prefecture), with operation
scheduled to start in the first half of FY2024• Installation of ultra-wide surfacing material production

line at Mihara West Plant (Hiroshima Prefecture), with
operation scheduled to start in the first half of FY2025

and lead frames• Capital and operating alliance with SCIVAX

in nano-imprinting

DNP Integrated Report 202319

2 ｜ MEDIUM-TERM MANAGEMENT PLAN: BUSINESS STRATEGY / FINANCIAL STRATEGY

Reducing strategic
shareholdings

Listed stockholdings (2014 → end of FY2022)

280
260
240
220
200
180
160
140
120
100
80

Environmental
initiatives

D&I promotion

269
250

(as of July 2023)

237

222

204

-58％

191
150
129

2014

2015

2016

2017

2018

2019

2020

2021

111
2022

(FYE)

Accelerating Value Creation through theDevelopment of a Strong Business Portfolio
Mitsuru Tsuchiya, Senior Executive Corporate Officer

We, the DNP Group, are engaged in business activities tocreate a better future based on our corporate philosophy andin line with our Basic Management Policy. Within this context,
our Medium-term Management Plan for fiscal 2023 to fiscal
2025 places a strong emphasis on building a businessportfolio that can leverage our strengths over the medium tolong term, as a major pillar of our Business Strategy.

-36.5 ％ 1,200,000 763,000
Percentage of female managers(2020 → end of FY2022)

8.4%

Percentage of males taking childcare leave(2020 → end of FY2022)

54.3

Selection in

Selected in(DNP only one in the printing
industry)(23 years in succession)

6 GPIF indexes

tons

FTSE4Good

83.6%

CDP Climate
Change A List

Figure 1: Business Strategy: Medium- to Long-term business portfolio

We will promote concentrated investment and business structure transformation in focus business areas made up of
growth-driving and new businesses, and aim to generate further profits from our business activities. We also execute theNo.1 strategy through the evolution and cultivation of core technologies, M&A and co-creation with partners.
Large

Small

20

In this renewed approach, we have restructured DNPʼsbusinesses into four categories: “growth-driving businesses,”“new business,” “stable business” and “business forreforming,” based on the two axes of growth potential/
attractiveness of the market, and business profitability. By
implementing optimal strategies for each of these businessareas, we aim to enhance the Groupʼs corporate value.

GHG emissions (2015 → end of FY2022)

6.6
Acquisition of
external
evaluations

111

269

Number of securities

Medium-term Management Plan (FY2023-2025)

Appeal of market growth potential

Reflecting on the Three-Year Plan (FY2020-FY2022)

Strengthen business infrastructure to support growthBusiness Strategy

We have also continued to focus on strengthening business infrastructure underpinning growth.
For example, in terms of financial capital, before Japanʼs Corporate Governance Code was applied in2015, there were 269 strategic shareholdings at the end of fiscal 2014, but by the end of fiscal 2022, there
were 111, a reduction of nearly 60%.
In the non-financial capital related area, we have set a goal of reducing greenhouse gas (GHG) emissions by
40% in 2030 compared to 2015 levels in order to be carbon neutral by 2050, and already achieved a 36.5%
reduction by the end of fiscal 2022. With regard to diversity and inclusion, which leverages the diversity of ouremployees as one of our strengths, we have increased the percentage of female managers from 6.6% to 8.4%
and the percentage of male employees taking childcare leave from 54.3% to 83.6% in the past three years.
Our efforts are highly regarded by society. We are the only company in the industry to be selected as acomponent of all six environmental, social and governance (ESG) investments made by the Government
Pension Investment Fund (GPIF) and have been included in the FTSE4Good, the world's most prestigious
socially responsible investment index, for 23 consecutive years (as of July 2023). In recognition of our efforts
to combat climate change, we were certified as an “A List Company” by CDP, and in recognition of our
supplier engagement efforts, we have been selected for the fourth consecutive year to the highest-rated
Leader Board in CDP's Supplier Engagement Assessment.

New business
Content & XR communication
Medical & healthcare

Growth-driving businesses
Digital interfaces (Optical film, metal masks, etc.)
Semiconductors (Photomasks, lead frames, etc.)
Mobility and industrial high-performance materials(Battery pouches, etc.)

Business for reforming

Stable business

Existing printing
Beverage

Imaging communication (Photo media, etc.)
Information Security (BPO, authentication & payment)

Business profitability

Large

DNP Integrated Report 202321

2 ｜ MEDIUM-TERM MANAGEMENT PLAN: BUSINESS STRATEGY / FINANCIAL STRATEGYAs of the beginning of fiscal 2023, we reorganized ourbusiness segments to clarify business domains and strategies
and to accelerate the execution of targeted initiatives. The
former Information Communication segment has beenrenamed the Smart Communication segment and the Lifestyleand Industrial Supplies segment has been renamed the Life &Healthcare segment. In addition, the Beverages business has

been transferred to the Life & Healthcare segment, enhancing
its contribution to comfortable living. As part of thisrestructuring, the Beverages segment itself has been
discontinued. Figure 3 illustrates the relationship between
these newly configured business segments (Figure 2) and ouroverall business portfolio.

Figure 2: Business segment reorganization and renaming (from the beginning of FY2023)

Previous business segments

New business segments

Information Communication

Smart Communication

Promote business using ICT

Lifestyle and Industrial Supplies

Life & Healthcare

Foster business growth by looking to expand
into the medical & healthcare sector.
Expand synergies with beverage businessElectronics

Drive growth primarily of core businesses

Electronics
Beverages

Figure 3: Business portfolio and positioning of each segment

Similarly, we will focus on the smart healthcare business,
including image diagnostics and online healthcare services,as part of the medical & healthcare business in the Life &Healthcare segment. In addition, in the Smart Communication
segment, the content & XR communication business willleverage connections with diverse intellectual property (IP)holders worldwide and make efforts in digital transformation(DX) utilizing artificial intelligence (AI) and advanced
information security technologies to contribute to theevolution of the information society. These growth-driving
businesses and new businesses together form the focus
business areas in our new Mid-term Management Plan.
The stable businesses featured in the lower-rightquadrant are critical in that they consistently generate cash
flows over an extended period. These encompass the global
deployment of products and services related to photo printing
in the imaging communication business, as well as Information
Security businesses in such areas as Business Process

Outsourcing (BPO), smart card services and authenticationand payment services. We will continue to invest in thesestable businesses with a focus on enhancing efficiency, while
carefully balancing capital allocation and cash generation.
The quadrant dedicated to business reforming in thelower left primarily includes the existing printing andbeverage businesses, which are currently less profitable,
primarily within the Smart Communication and Life &Healthcare segments. We are actively working on initiatives
to boost profitability, which includes adapting supply
capabilities and optimizing facilities in response to evolving
market conditions. In addition, we will leverage products andservices with unique strengths, such as the aseptic fillingsystems for PET bottles and products for interior and exterior
decoration for residential and non-residential use, both ofwhich command leading share in Japan. These will be
restructured through globalization efforts and boostingsynergies with other businesses.

Figure 4: Overview of business investment and operating income targets by segment
Growth investment andinfrastructuredevelopment investment

Reinvestment390 billion yen or more (cumulative amount for FY2023- FY2027)
Promote capital investment, global expansion and consideration of external alliances
centered on focus business areas.

Large

Digital interfaces (Optical film, metal masks, etc.)
Semiconductors (Photomasks, lead frames, etc.)(Battery pouches, etc.)

Existing printing
Beverage

Invest earnings obtained from stable businesses

Existing printing
Imaging communication(Photo media, etc.)

Business for reforming
Small

Mobility andindustrial
high-performancematerials

Business review
Strengthening of
profitability

Contraction andwithdrawal

Information Security(BPO, authentication & payment)

Stable businessBusiness profitability

Large

Promote concentrated investment and business structure transformation into focus
business areas made up of growth-driving businesses and new business with the aim ofbuilding a business portfolio resilient to changes in the business environment

We have positioned three businesses within thegrowth-driving businesses in the upper right quadrant of
Figure 3. The digital interface business encompasses
products such as optical film for displays, boasting theworld's top market share and metal masks for manufacturing
OLEDs. The semiconductor business includes items such as
photomasks for semiconductor production and lead frames,
both part of the Electronics segment. Additionally, in the Life
& Healthcare segment, the mobility and industrial
high-performance materials business is also positioned as a
22

growth-driving business. We will further expand thisbusiness, particularly focusing on battery pouches forlithium-ion batteries, which have the worldʼs top market
share in applications for mobile devices and electric vehicles(EVs).
In the medical & healthcare business of the Life &Healthcare segment, one of the upper-left quadrant showing
new businesses, we have plans to expand the pharmaceuticalsupport business, which includes active pharmaceuticalingredient manufacturing, formulation and medical packaging.

390 billion yen
or moreFocus business areas and growth investment

Medical &healthcare

Electronics

260
billion yen
or moreElectronics

for manufacturing organic light-emitting diodedisplays (OLEDs)•Expansion of production capacity for surface
material products such as ultra-wide optical films•Expansion of production capacity for photomasks,
etc. in Japan and overseas•Mass production of nano-imprinting throughcapital and operating alliance and joint investment
with SCIVAX•Expand value creation to the semiconductor supply
chain through external alliances.

(¥ billion/Ratio by segment)■ Electronics■ Life & Healthcare■ Smart Communication

Record earnings

130.0•Expansion of battery pouch production capacity,

Life &
Healthcare

promotion of supply to appropriate regions suchas Europe and the United States•Expansion of production capacity for barrier films,
eco-friendly packaging materials, etc.
•Strategic business alliances in medical &healthcare business (Investment in CMIC CMO
under CMIC HOLDINGS, etc.)•Early commercialization of MaaS from the trial
period•Consideration of external alliances

85.0
61.2

51%

50%

58%
(Including updating facilities, etc.)

Life & Healthcare

Operating income•Expansion of production capacity for metal masks

Infrastructure investment

Smart Communication
Content & XR
communication

Growth-driving businesses

Development

Focus business areas

Appeal of market growth potential

New business

28%
22%

Investment inestablishmentof infrastructure,
etc.

130
billion yen
or moreSmart
Communication•Imaging communication business global expansion•Information Security business global expansion•Creation of business for unique fan service

spanning real and virtual•Consideration of external alliances

10%
33%

28%

Adjustment

Adjustment

FY2022

FY202521%
Adjustment

FY2023-2027

DNP Integrated Report 202323

2 ｜ MEDIUM-TERM MANAGEMENT PLAN: BUSINESS STRATEGY / FINANCIAL STRATEGY
We plan to invest 390 billion yen or more over five years fromfiscal 2023 to fiscal 2027 to advance our business strategy.
Of this, we will invest 260 billion yen or more in the fivebusinesses designated as focus business areas to drive
growth. In addition, we will expand the production capacity of
our major products, which have achieved top market shares
both domestically and internationally. We will also promotealliances with diverse external partners and enhance theglobal expansion of each business, accelerating our growth.
Further, we will invest 130 billion yen or more in building andmaintaining our business foundations, including updatingproduction facilities. For details on our key initiatives, pleaserefer to Figure 4.
Regarding the balance among the three segments, as
shown in the graph on the right in Figure 4, we anticipate
approximately 50% of operating income to come from
Electronics, 30% from Life & Healthcare and 20% from
Smart Communication. Excluding adjustments, such as
collaborative projects between segments, we aim to achieve
our target operating income of 85 billion yen in fiscal 2025
and the subsequent goal of 130 billion yen or more.

Figure 5: Reinforce business foundations through business structure reform
Strengthening measures

Expansion measures

Expansion of photo imaging business into emerging markets
Expansion of authentication security business
Expansion of BPO service business
Global expansion of content & XR communication businessLife & Healthcare

Reviewing low
value-added products
and restructuringbusiness locations• Reorganization of locations inpackaging-related business

Expansion of production capacity for lithium-ion battery pouches
Expansion of production capacity for barrier films,
eco-friendly packaging materials, etc.

Automation andproductivity
improvement

Maximization of medical & healthcare-related synergies

Expansion of production capacity for surface material products
such as optical films

Masafumi Kuroyanagi, Managing Director
To ensure a better future and sustain long-term value
creation, DNP is committed to continuously strengthening themanagement foundations underpinning our business
operations. We strive to practice integrated management that

Figure 1: Financial Strategy presented as a Basic Management Policy

actions for sustainable growth include optimizing our
locations and systems in alignment with market trends andbusiness scale across all segments and reallocating
resources from contracting divisions to areas with growthpotential.

• Create funding for investment in growth through cash flow generated through businessactivities, in addition to maximization of efficiency of funds including acceleration of
the reduction of assets held.
• Plan the largest acquisition of treasury shares in DNPʼs history with the aim of
improving capital efficiency.
• Seek to further enhance shareholder returns conscious of indicators such as earnings
per share (EPS) while maintaining stable finances for sustained corporate activity.

Through our financial strategy, we aim to generate 750 billion
yen or more in cash over the five-year period from fiscal
2023 to fiscal 2027. Subsequently, we intend to distribute
this cash strategically to facilitate ongoing business expansion
and enhance shareholder returns (see Figures 2 and 3).
We aim to generate operating cash flow of 440 billion yen
or more, serving as the foundation for growth investments.
We will actively invest in focus business areas and enhance
efficiency in existing businesses to achieve this goal. We
maintain an ongoing assessment of our strategic
shareholdings, considering factors such as their overall
impact, trading performance and prospects. Our strategy
24

combines the strengths of financial and non-financial capitalto achieve this goal. Specifically, our financial strategy isarticulated within our basic management policy as follows(see Figure 1).

Expansion of production capacity for photomasks, etc.
Expansion of value provision to semiconductor supply chain

The DNP Group is committed to strengthening our businessfoundation for creating new value, we achieve this throughthe continued advancement of both our financial andnon-financial strategies, alongside various structural reforms
within the scope of our business strategy. Our concrete

Generate capital for growth investments andstrengthen financial foundations throughshareholder returns

Global collaboration for barrier films

Expansion of production capacity for metal masks for
manufacturing organic light-emitting diode displays (OLEDs)

Electronics

Medium-term Management Plan (FY2023-2025)

Financial Strategy

Rationalization of
paper media business

Financial Strategy

Smart
Communicationentails executing the required divestments of strategic
shareholdings to generate 220 billion yen in cash and reduce
their share to below 10% of net assets. In addition, we will
accelerate the divestment of idle assets and explore
appropriate funding methods, including the utilization ofinterest-bearing debt, to optimize financial leverage andfunding efficiency, ultimately leading to the generation of 90
billion yen or more in cash.
Regarding strategic shareholdings, we conducted atender offer for a portion of our common shares in Recruit
Holdings Co., Ltd., resulting in the sale of a stake valued at60.8 billion yen. This achievement signifies that we have
DNP Integrated Report 202325

2 ｜ MEDIUM-TERM MANAGEMENT PLAN: BUSINESS STRATEGY / FINANCIAL STRATEGY
already made substantial progress, nearing 30% of our goal
to sell 220 billion yen worth of strategic shareholdings overthe next five years.
As part of our cash allocation strategy, we plan to invest
390 billion yen or more of cash generated through measures
such as maximizing fund efficiency over the course of five
years in business growth and infrastructure development. At
least 260 billion yen of this will be allocated specifically to
our focus business areas, further accelerating our expansion,and securing a further competitive edge in global markets.
Additionally, in line with our cash allocation strategy, we will
actively pursue shareholder returns.
The DNP Group believes that to enhance the sustainabilityof its corporate activities and provide long-term value tosociety and individuals, it is important to maintain financial
stability while directing cash towards growth investments andactively distributing it to shareholders.

Based on these considerations, one of the measures DNP isplanning to achieve its earnings and capital structure goals is
to acquire approximately 300 billion yen worth of treasury
shares over the five-year period from fiscal 2023 to fiscal
2027. As the first round of this plan, we will acquire treasury
shares valued at 100 billion yen by March 2024, over thecourse of about one year. As shown in Figure 4, we
continuously strive to maximize shareholder value andregularly carry out share repurchases, with this round being

the largest in scale to date.
In addition to the share acquisition program, we also
cancelled 25 million shares, equivalent to around 8% of theissued shares, as of March 20, 2023. Regarding our holdingsof treasury shares, we will continue to evaluate options suchas further cancellations or potential utilization for activities
such as M&A, taking into consideration both domestic andinternational market conditions and the overall status of
DNPʼs business.

Figure 2: Financial Strategy: Cash allocation
Figure 4: Acquisitions of treasury shares (FY2002-2023*)
5 years from FY2023 to FY2027 Appropriate allocation of cash generated to further business growth and shareholder returns

100

Total share repurchase amount(¥ billions)

Cash generation

Cash allocation strategy

Generation of
750 billion yen or more in cash

Generation of operating C/F:
440 billion yen or more

Business investment

Sale of strategic shareholdings:(reduction to less than 10% of net assets)

Active shareholder returns

treasury shares• Cancellation of 25 million treasury

shares (equivalent to 8%)

Cash generation

Reduction of strategic
shareholdings and idle
assetsCash allocation strategy

Utilization of financial
leverage

26

Investment in focus
business areas andinvestment aimed at thecreation of management base

Reduction of equity capital
aimed at creation of
optimal capital structure

Balancing of financial
stability and optimal
capital allocation

25

0

2002

2003

2004

2005

2006

2007

2008

2015

2016

2017

2019

2021

2022

2023

FY

(*Each fiscal year begins on April 1 and ends on March 31 of the following year)

Dividend policy conscious of EPS and DPS

Figure 3: Financial Strategy: Priority measures

Stable generation ofoperating CF

Plan to implement the acquisition of treasury shares valued at
100 billion yen, the largest in scale to date

50

(First round)• Acquisition of 100 billion yen in

Reduction of idle assets, utilizationof interest-bearing debt,
maximization of cash efficiency:
90 billion yen or more

(FY2023)

75

Plan to acquire around
300 billion yen in treasury shares

220 billion yen

100

Shareholder returns

Growth investment and infrastructuredevelopment investment390 billion yen or more
Including investment into
focus business areas
260 billion yen or morebillion yen

In our shareholder return policy, we intend to actively
distribute profits in consideration of earnings per share (EPS)
and dividends per share (DPS).

We will continue to diligently execute the key initiatives ofour financial strategy while firmly making growth investments
to consistently create new value.

• Create 440 billion yen or more in operating cash flow over five years providing the source for
growth investment by promoting concentrated investment in focus business areas and promoting
business structure reform.
• Generate 220 billion yen in cash through the sale of strategic shareholdings and reduce themto less than 10% of net assets.
• Improve asset efficiency by reducing idle assets.

• Consider appropriate funding methods including the utilization of interest-bearing debt.

• Invest 390 billion yen or more over 5 years in business investment using cash generated
through the maximization of capital efficiency. Of this, invest 260 billion yen or more in focus
business areas.
• Plan to acquire a total of around 300 billion yen in treasury shares. Implement the first roundof acquisition of treasury shares valued at 100 billion yen.
• Cancel 25 million treasury shares (equivalent to 8%)• Consider treasury shares held, including cancellation and utilization in M&A based on future conditions.
• Stably maintain finances for sustained corporate activity, and actively allocate cash generated
through maximization of capital efficiency to shareholder returns.
• Execute shareholder return policy, taking into consideration earnings per share (EPS) anddividend per share (DPS).

DNP Integrated Report 2023

27

3

MEDIUM-TERM MANAGEMENT PLAN:
BUSINESS STRATEGY BY SEGMENT

Business Strategy by Segment

Shibuya Miyashita Park powered by metaverse

Smart Communication
Major products and services

Smart Communication• Imaging communication

DNPʼs strengths

Provide new customer experience value by utilizing high-definition image processing technology, as well as thecapability to securely deliver large volumes of digital data, and integrate and optimize business processes
Accomplishments and trust such as dye-sublimation thermal transfer photo media products with theworld-leading share and smart cards for financial institutions with the leading share in Japan
Examples of our core technology• Information Security• Content & XR communication• MarketingTechnology that has evolved fromauthentication to identify individuals
and perform encryption for safe andsecure transfer data

Information
security

Information
processing

Image
processing
andrecognition

Technology for high-definition
processing of still or moving images, orfor identifying people and scenery, etc.,from target image data

Technology that converts text, graphics
and other data into an optimal format
for various information media

Media
conversion
technologies

Project
planning
anddesignDataanalysis

Technology that extracts and organizes
data on consumer information service
usage trends, purchasing records,
weather, etc., and processes it inaccordance with a specific purpose• Publishing• Education

The main businesses of the Smart Communication segment include imaging
communication, where we boast the top global market share in dye-sublimation
thermal transfer printing media; Information Security, where we offer solutions
such as Business Process Outsourcing (BPO) and authentication security;content and XR communication, a new area; and other domains such as
marketing, publishing and education.
In this segment, we promote collaboration and service development withdomestic and overseas companies by leveraging the expertise we havecultivated through our BPO business, such as the ability to securely distributelarge volumes of data and integrate and optimize complicated and extensive
business processes in addition to high-definition image processing technology.

We aim to generate maximum returns on invested capital through efficient and effective investments.
In terms of expansion investments, we will explore investments to drive global expansion in areas such
as Information Security, where market growth is expected, and imaging communication, where themarket is robust.
At the same time, with respect to paper printed materials, which continue to decline, we willcontinue to promote rationalization of the paper media business through structural reforms such asreevaluating production processes and reallocating resources.
In this segment, in fiscal 2022, sales amounted to 720.2 billion yen and operating income was 26.7
billion yen. In fiscal 2025, we will aim for sales of 726 billion yen and operating income of 31 billion yen.

Basic strategy

Efficient investment with a view to balancing invested capital andcash generation
Consider utilizing core values for collaboration and service
development with companies inside and outside Japan
Rationalization of locations and systems according to market trends
and business size
KPI (FY2025)

Sales and operating income targets

Market environment(¥ billion)

Sales
Operating income

26.7

726.0

723.0

721.0

720.2

28.0

29.0

31.0

726 billion yen (101% compared to FY2022)
Operating income 31 billion yen (116% compared to FY2022)
Sales

28

2022

2026

4.6

5 trillion yen

Global market
for digital ID
solutions

2021

2030

Globalsublimationtransfer photo
media market

ActionConsider investment in global expansion of imaging communication
and Information Security
Rationalization of paper media businessJapanese
BPO market

Globalmetaverserelated market
FY2022
results

FY2023
Targets

FY2024
Targets

FY2025
Targets

CAGR 17 %
2023

2026

CAGR 2 %2030$ 678.8 billion*CAGR = Compound Annual Growth RateDNP Integrated Report 202329

3 ｜ MEDIUM-TERM MANAGEMENT PLAN: BUSINESS STRATEGY BY SEGMENT

Focus business area strategy

New business

Promoting stable business

Content & XR communication
One of DNPʼs strengths is our worldwide network of diverse
content holders and creators. We also have a track record inhigh-definition image processing technology and complex
copyright processing developed in the archiving business andInformation Security business, and the capability to distributelarge volumes of data in the real world and digitally while
securely authenticating individuals and information, and tointegrate and optimize business processes.
Building upon these strengths, we aim to seamlessly andsecurely bridge the real and virtual worlds, contributing to theadvancement of the information society. The global
metaverse-related market is expected to continue expanding
significantly, and DNP is actively pursuing the expansion of thisas a new business. In this field, we aim to approximately double
our fiscal 2022 sales in fiscal 2025.

Imaging communication
Sublimation transfer photo media products andservice creation“ Virtual Akihabara,” a fusion of real and virtual spaces

DNP has achieved the worldʼs leading market share withdye-sublimation thermal transfer printing media developed based on
printing technologies such as coating. As the way people enjoy
photography evolves with the times, DNP leverages these products
and various services, particularly in the realm of photo printing, todevelop the photo imaging business. In recent years, driven by thewidespread use of smartphones and social media, consumer needs
have expanded beyond printed photos to experiences. In response,
DNP offers a wide range of services, from photography andprocessing to print sales, as well as cloud-based image sales andservices, all while prioritizing data security and privacy protection
with a high-security infrastructure and system.

TOPIC

Business strategy / Investment plan

Early creation of unique fan service business spanning real and digital worlds
by utilizing Tokyo Anime Center and Web3 for fans of IP holders*Creation of business supporting both real and virtual corporate activities
including authentication security technology, AI-based DX services and BPO
Creation of a business providing new customer experience value leading tocultural and regional development based on the accomplishments by digitallyarchiving over 100,000 artworks with art museums, galleries and cultural
facilities, etc. in Japan and overseas

Tokyo Anime Center© The Association of Japanese Animations (AJA).
© Dai Nippon Printing Co., Ltd.

* IP holder: A person or group who owns a variety of content (intellectual property) such as games and anime

Promoting digital transformation andaccelerating the rollout of new photo services
DNP has established a network of “ Ki-Re-i” ID photo printing machines across Japan,
enabling electronic application processes for various official certificates andqualifications. We are also expanding the application, for example by providing a service
for collating and using profile photos taken by a “ Ki-Re-i” to create employee ID cards.
Moreover, we aim to provide consumers in Japan and abroad with a range of services
that enhance the photography experience at theme parks, events and other venues.

Growth rate indexed against FY2022 as 100

Outlook for global
metaverse-related market* Prepared by DNP based on WHITE PAPER
Information and Communications in Japan(Ministry of Internal Affairs and Communications)$678.8 billion

FY2025 Over 2X(vs. FY2022)$47.5 billion
FY2022

FY2025

Our aim2022 forecast

2030 forecast

TOPIC“Midokoro walk®” interactive content system
DNP has created more than 100 interactive systems since launching the DNP Museum Lab initiativein 2006, with the goal of delivering cutting-edge viewing experiences. The “ Midokoro Series”
represents a range of systems developed by drawing upon the accumulated technologies andexpertise, envisioning diverse experiential scenarios rooted in culture and the arts.
One of these systems, “ Midokoro walk ®,” harnesses “cross-modal perception,” when two or
more senses interact with each other. DNP provides new cultural experiences by creating the feelingof walking through a virtual environment using virtual reality (VR) such as the Mazarin Gallery in theRichelieu site of Bibliothèque nationale de France.

30

Photo-related service solutions

DNP Virtual Experience
VR presentation gateway
Data provided by Anshin Project Japan Inc.

Sales plan

Dye-sublimation thermaltransfer printing media

Image of a VR experience using“ Midokoro walk ®” at the Mazarin Gallery©DNP Dai Nippon Printing Co., Ltd. 2021,
with the courtesy of the Bibliothèque nationale de France.

Information Security
Business Process Outsourcing (BPO)
In the past, DNP has contributed to the BPO business with support
24/7. Now, we are deploying the latest technologies to expand thisbusiness using artificial intelligence (AI) and RPA*, from both
domestic and international locations. Our services are designed tohelp companies and organizations address their business challenges
swiftly and efficiently, tackling pressing social concerns such aslabor shortages and the need for workstyle reforms through businessprocess reengineering.
* Robotic Process Automation (RPA): Business automation using robots (software) that utilize AI

Authentication and security technology
We offer advanced authentication technology, systeminfrastructures, smart card manufacturing and payment services
with a leading market share in Japan. We also provide physicalsecurity solutions such as security gates and surveillance cameras
for offices, factories and other locations. Our services encompass
sensitive information and physical security solutions, utilizing digitalauthentication methods for object authentication and facialrecognition for personal authentication, ensuring enhanced security
and convenience in daily life.

DNP Integrated Report 202331

3 ｜ MEDIUM-TERM MANAGEMENT PLAN: BUSINESS STRATEGY BY SEGMENT

Business Strategy by Segment

Life & Healthcare
Major products and services

Life & Healthcare• Mobility and industrial high-performance materials• Medical & healthcare• Packaging• Living spaces

DNPʼs strengths

Provide essential value for security, safety, health, comfort and the environment with a variety of functionalfilms leveraging converting technology, our unique material processing technology
Accomplishments and reliance on battery pouches for lithium-ion batteries with the world-leading share, andPET bottle aseptic filling systems and products for household interior and exterior decoration with the leading
share in Japan.
Examples of our core technology
With this processing technology, coating
material can be thinly and uniformly
applied and attached to a substratesurface. By combining this technology with
substrate design technology, it is possible
to form coating films with a variety offunctions such as optical properties,
barrier properties and heat resistance.

Coating

A technology that uses a vacuum tovaporize a material and deposit it on asubstrate material such as plastic film to
produce an ultrathin film of high purity

Vacuumdeposition

Precision
coatingEB®
hardeningtechnologies

A technology that instantly makes resins andcoating films highly functional by irradiatingthem with electron beams. This enables to
impart functions with long-term durability
such as scratch resistance, weather
resistance, soiling resistance, andantibacterial and antiviral properties.

Postprocessing

Laminating

A technology that evenly bonds
separately-produced materials including
films, metals and resins. Bonding multiple
functional materials according to theapplication produces even better results.

• Beverages

The main businesses of the Life & Healthcare segment include the mobility andindustrial high-performance materials business represented by the worldʼs top
share of battery pouches for lithium-ion batteries and mobility interior andexterior decorative materials; the medical & healthcare business, which
encompasses bulk pharmaceutical manufacturing and medical packaging; andthe packaging, living spaces and beverages businesses, which encompass
aseptic filling systems for PET bottles and products for household interior andexterior decoration.
In this segment, we will invest in manufacturing facilities for battery pouches
for lithium-ion batteries and in focus businesses centered on medical andhealthcare business and promote investment in the global expansion of existing
packaging and living spaces businesses.

We will continue to develop new products leveraging converting technology and our uniquematerial processing technology, and actively explore collaborations and service developmentwith domestic and international companies to consistently deliver value for safety, security,
health, comfort and the environment.
In fiscal 2022, sales in this segment amounted to 541.3 billion yen and operating
income was 7.9 billion yen. With the above initiatives, we will aim for sales of 542 billion yen
and operating income of 24 billion yen in fiscal 2025.
To achieve our goals, we will strive to boost business profitability by reorganizing bases
and optimizing resources in the packaging business as well as in other businesses in parallelwith investment to expand focus businesses.

Basic strategy

Expand business through large-scale capital investment centered onbattery pouches
Investment in growth areas centered on medical & healthcare andglobalConsider utilizing core values for development of new products, andfor collaboration and service development with companies insideand outside Japan
KPI (FY2025)

Sales and operating income targets
Sales
Operating income

2022 Global market

Globalmarket for
EV + PHEV

495.0
451.3

32

Approx.
10.5 million units
2023

21.0
18.0

2018
7.9

FY2022
results

Global market forpharmaceuticals
FY2023
Targets

FY2024
Targets

FY2025
Targets

2030

CAGR 17%,
approx. 42 million units

24.0

542 billion yen (120% compared to FY2022)
Operating income 24 billion yen (304% compared to FY2022)

Expansion of battery pouch production capacity
Medical & healthcare investment: 10 billion yen or more
Reorganization of facilities in packaging-related business

542.0

524.0

Sales

ActionMarket environment(¥ billion)

2030

141

216 trillion yen(Total for small molecules,
bio and cellular pharmaceuticals)*CAGR = Compound Annual Growth RateDNP Integrated Report 2023

33

3 ｜ MEDIUM-TERM MANAGEMENT PLAN: BUSINESS STRATEGY BY SEGMENT

Focus business area strategy

Growth-driving businesses

Focus business area strategy

Mobility and industrial high-performance materials

Medical & healthcare

DNP provides products and services supporting EV range extension,
automated driving and comfortable mobile spaces, starting with battery
pouches for lithium-ion batteries and mobility interior and exterior decorative
materials. On the back of growth in the global market for Plug-in HybridElectrical Vehicle (PHEV), DNP is planning major investments to expand our
production capacity for battery pouches and other products, aiming toincrease overall business sales in fiscal 2025 to 180% the fiscal 2022 level.
We are also developing components and materials related to clean
energy and energy management. In addition, we hope to quickly
commercialize MaaS*, which is gaining traction worldwide, beginning with ademonstration test of a cold chain logistics service for last mile delivery in
the Philippines that combines a digital delivery management system and
DNP Multifunctional Insulated Box.

With a solid foundation of proprietary strength in Printing & Information (P&I)
cultivated over a long period of time, DNP has been engaged in thepharmaceutical packaging business derived from food packaging technology,
and active pharmaceutical ingredients (API) business that takes advantage ofprecision organic synthesis technology. From an early stage, DNP has
focused on advanced medical fields such as regenerative medicine and willcontinue to support advanced medical business with AI-driven testing
technology. At the same time, we are developing services leveraging ICT and
online technology in fertility treatment, telemedicine and medical checkups.
Against this backdrop, in April 2023, we began a strategic businessalliance with CMIC HOLDINGS Co., Ltd., which operates as a Contract
Research Organization (CRO) and Contract Development and Manufacturing
Organization (CDMO). As part of the alliance, CMIC CMO Co., Ltd., which
operates a pharmaceutical formulation business, joined the DNP Group as acapital participation subsidiary.

*Mobility as a Service (MaaS) refers to the provision of mobility solutions, such as automobiles, as a service.

Business strategy / Investment plan

Business strategy / Investment plan

Major investment in expansion of production capacity for battery
pouches, etc. Promotion of supply to appropriate regions such as
Europe and the United States
Accelerate development of components for clean energy, energy
management and sensors, key devices, etc. supporting
comfortable mobile spaces
Development and mass production of decorative film for exterioruse, and molding and laminating systems
Early commercialization of MaaS from the trial period
Accelerate new product development for industrial
high-performance materials

Sales plan

Growth rate indexed against FY2022 as 100

New business

Environmentally friendly
and aestheticallyappealing decorative
film for exterior roofs,
and molding andlaminating systems

Next-generation
decorative panels
realizing the advanced
seamless design ofautomobile interiors

Outlook for global market for EV+PHEV＊LMC automotive

Expand API business at DNP Fine Chemicals Utsunomiya andformulation business at CMIC CMO, and establish an
integrated system spanning from the development andmanufacture of API through to formulation development andmanufacture through alliances with both companies
Develop value-added pharmaceuticals by combining the
packaging technology of DNP with the drug formulation
technology of CMIC CMO
Promote digital transformation (DX) in clinical trial support
business through the alliance with the CMIC Group andpursue healthcare solutions to maintain and promote healthsuch as pre-symptomatic measures designed to reduce therisk of lifestyle-related diseases
Sales plan

Growth rate indexed against FY2022 as 100(10 thousand units)

FY2025 80% increase(vs. FY2022)

Global market outlook forsmall molecules
Small molecules
Of which, highly potent API

FY2025 Over 7X

CAGR 17% (2023→2030)

CMIC CMOʼs Shizuoka Plant and measuring instruments(vs. FY2022)¥ 122
trillion¥ 110
trillion¥ 21
trillion

FY2022

FY2025

Our aim20192020 2021 2022 2023

2024

2025 2026 2027

2028 2029 2030

TOPIC

34

FY2025

Our Aim2018¥ 42
trillion

2030

TOPIC

Promoting the expansion and practical implementation of
EV models equipped with wireless charging capability
In recent years, there has been growing anticipation for wireless charging as a means to accelerate
the shift to EVs, eliminating the need for a cable to connect the charger and car body. This technology
reduces charging burden and increases convenience. In March 2023, DNP, in collaboration with
Sojitz Corporation and DAIHEN Corporation, became the first in Japan to obtain registration approval
for commercial EVs equipped with wireless charging capability and began on-road performance tests.

FY2022Estimate by DNP based on various materials

Supporting the pharmaceutical industryʼs value chain
and creating new value
Image of a thin, light sheet-type coil forhigh-capacity wireless charging

The resources of the DNP Group and the CMIC Group will be combined to provide
further enhanced support to the pharmaceutical value chain and new value proposals
in the pharmaceutical industry and the fields of medical checkups and healthcare.
* CMIC Group launched the first CRO in Japan in 1992 and provides comprehensive support in the development, manufacture, sale and marketing of pharmaceuticals.

DNP Integrated Report 2023

35

FOCUS

Business
Strategy for
Major
Products

Growth-driving businesses

Mobility and industrial high-performance materials
DNP Denmark

Lithium-ion battery pouches

EuropeInstallation of slit
processing line

secured the worldʼs top market share. Demand for thisproduct extends to various applications, including
information devices, automotive, electric bicycles andenergy storage.

Tobata Plant

To meet forecast growth in demand for EVs over the
medium to long term, we will focus investments toincrease the production capacity of battery pouches forautomotive applications. In particular, we are promoting
production in the best locations in Europe and the UnitedStates. For Europe, a new slit processing line has been
built at the Denmark Plant and operations are underway.
In the United States, we are exploring the construction ofJapan
Mother plant• Jumbo roll manufacturing• Slit processing

US
Manufacturing plant
Construction underconsideration

a local manufacturing plant to meet growing demand on
the back of preferential policies for EVs.
Through these business expansion strategies, we aim
to maintain the top share in the global market andstrengthen our production system to achieve 100 billion
yen in overall sales of battery pouches for lithium-ion
batteries by fiscal 2025.

Business strategy / Investment plan

Consider expansion of production capacity for the increasein EV demand from FY2023.
Promotion of supply to appropriate regions such as Europe
and the United States.
Installation of post-process line in Europe (Denmark Plant),
with operation scheduled to start in FY2023.

DNPʼs strengths
Battery module

Global standard
Stable track record even for use
with large-scale batteries
Certified to IATF 16949 automotive
quality management systems(Saitama Prefecture)(Fukuoka Prefecture)

DNP will leverage its strengths in converting technology and strive toestablish itself as the industryʼs de facto standard, enhancing its
presence in the global market. Furthermore, we will expand theapplications of battery pouches and maintain and strengthen its global
market share leadership. Looking toward 2040 and 2050, we aim tocontribute to a sustainable society where people can live with security,
health and well-being by supporting the extension of the driving rangeof electric vehicles (EVs) through our products and services.
In the field of EV batteries, efforts are being made to
improve driving performance and energy efficiency,
focusing on increasing capacity, reducing weight andthinner designs. DNP leverages its converting (material
processing) technology to develop battery pouches,
which serve as the outer casing for lithium-ion batteries.
These pouches achieve the required heat resistance,
vibration resistance and long lifespan for EVs, and have

Tsuruse Plant

Battery cell

Aim for 100 billion yen in sales by FY2025
for lithium-ion battery pouches overall
Structure of a lithium-ion
battery to which abattery pouch is applied

Leveraging the strengths of battery pouches
that safely and securely encase lithium-ion
batteries to expand into various applications

The power to create new value

to generate value

The sales
acumento expand valueMarket trends

Global No.1
market share
Domestic No.1
market shareTab

Laminated
electrodeBattery pouch(exterior material)

The foresight to discover value
Leveraging our All DNP converting technology and anticipating market shifts and the trend towards
electrification, we aim to establish the de facto standard for battery pouches in the domestic andinternational battery industry.

CoatingLaminating
technologies

Materials
development

Assessment
andanalysis

The ability to generate value
Our applied expertise in functional films, honed in packaging materials for products such as food andpharmaceuticals (through coating and lamination technologies), is now being leveraged and extended to thedevelopment of outer casing materials for lithium-ion batteries, making batteries thinner and lighter.

The sales acumen to expand value
We bolster our competitive edge through comprehensive patent applications, in-house designed materials andself-developed production facilities, as well as external collaborations. With a strong foundation of high quality, aproven track record and trusted relationships with our partners and customers, we expand our presence globally.

36

Battery pouches business performance and targets (volume)
US demand

Short-term

to discover value

The ability

Medium- to
Long-term

The foresightSignificantly impacted by market
conditions such as a slump in
consumption due to the recoil
following the surge in stay-at-homedemand due to the COVID-19
pandemic
Although significantly affected bymarket conditions such as adecrease in automotive
manufacturing caused by thesemiconductor shortage, a gradual
recovery is being madeConsideration is being given to theconstruction of a new manufacturing plant in
the US to cater to the increase in demandcaused by EV incentives in the US.

Continuous strong sales expected
due to growing EV demand
FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 FY2025 FY2026
resultresultresultresultresultresultresult forecast forecast forecast forecast

DNP Integrated Report 202337

3 ｜ MEDIUM-TERM MANAGEMENT PLAN: BUSINESS STRATEGY BY SEGMENT

Business Strategy by Segment

Electronics
Major products and services

Electronics• Digital interfaces• Semiconductors

The main businesses in the Electronics segment are the digital interface
business, which includes optical films for displays and metal masks for
manufacturing organic light-emitting diode (OLED) displays, both of which boast
the worldʼs top market share, and the semiconductor business, which includes
photomasks for manufacturing semiconductor products and lead frames forsemiconductor packaging materials.
DNP has positioned the Electronics segment as a whole as a growth-driving
business and will actively make capital investments in this area going forward.

DNPʼs strengths

Develop industry-leading products leveraging large surface area functionalization technology, micro and nanomodeling technology, optical control technology, etc.
Accomplishments and trust from products with a world-leading share in areas such as metal masks for OLED
displays and optical films for displays
Examples of our core technology
We utilize our distinctive optical design
technology as the foundation,
incorporating precision thin-film clean
coating technology and converting
technology, including LCD coating, todeliver optical film products with awide range of functionalities.

This technology forms high-resolution
replica images by exposing aphotosensitive agent applied to thesubstrate's surface to light or electron
beams, thus creating the original image.

Basic strategy

Microfabrication

Clean
converting

Precision
coating

Photolithography

PatterningThis involves etching technology,
where materials undergo chemicalcorrosion and removal to achieve thedesired structure, and molding
technology, utilizing molds made ofmetal, glass, or resin to replicate thematerial's uneven shape on a printed
substrate.

Coating

Wet coating is a process in which
inked materials are thinly and uniformly
applied to cover the surface of a
substrate. When combined with
substrate design technology, it allows
for the creation of coatings withvarious functionalities.

DNP leverages its unique strengths in large-area functionalization technology, micro/nanomodeling technology derived from microfabrication technology used for stamps, and opticalcontrol technology, which enables the design of colors and the reflection and refraction oflight. Using these technologies, we will continue developing cutting-edge products for theelectronics industry. Furthermore, through alliances with external partners, we aim to expand
our value proposition within the semiconductor supply chain.
In this segment in fiscal 2022, sales amounted to 203.5 billion yen and operating income
was 46.9 billion yen. We will aim for sales of 230 billion yen and operating income of 52
billion yen in fiscal 2025.

Accelerate expansion of existing businesses through active capital
investment
Consider utilizing core values for development of new products, andfor collaboration and service development with companies insideand outside Japan
KPI (FY2025)

230 billion yen (113% compared to FY2022)
Operating income 52 billion yen (111% compared to FY2022)

Sales

ActionInvestment in expansion of production capacity for metal masks for
manufacturing OLED displays
Approx. 20 billion yen
Investment in expansion of production capacity for optical films
for displays
13 billion yen or more
Investment in expansion of production capacity for photomasks, etc.
20 billion yen or more
Expansion of provision of value to the semiconductor supply chain
through external alliances

Sales and operating income targets

Market environment(¥ billion)

Sales
Operating income

To reach

300 million

230.0
203.5

212.0

197.0

52.0

Globaldisplay market

2023

47.0

46.9

square meters in 2030
2030

CAGR 3.8%

42.0

100 trillion yen
Globalsemiconductor
marketin 2030
2023

2030

CAGR 5%
FY2022
results

38

FY2023
Targets

FY2024
Targets

FY2025
Targets*CAGR = Compound Annual Growth RateDNP Integrated Report 2023

39

3 ｜ MEDIUM-TERM MANAGEMENT PLAN: BUSINESS STRATEGY BY SEGMENT

Focus business area strategy

Growth-driving businesses

Focus business area strategy

Digital interfaces

Growth-driving businesses

Semiconductors

We will continue to make aggressive capital investments in line withthe expansion of the global market for displays, particularly in metalmasks for manufacturing OLED displays and optical films fordisplays. Our plans call for an investment of approximately 20 billion
yen in a new metal mask production line for manufacturing OLED
displays at the Kurosaki Plant (Fukuoka Prefecture) and more than
13 billion yen in a new wide-range optical film production line at the
Mihara Plant (Hiroshima Prefecture) to expand production capacity.
By increasing applications to include Extended Reality (XR) andin-vehicle displays, we hope to contribute to the evolution of theinformation society by safely and seamlessly connecting the real anddigital worlds.
Through these efforts, we aim to raise the sales of digitalinterface business in fiscal 2025 to 112% of the fiscal 2022 level.

We provide fine devices essential in the semiconductor supply chain,with a focus on photomasks for manufacturing semiconductor products
and lead frames for semiconductor packaging components. We plan tomake capital investments of at least 20 billion yen at domestic andoverseas production bases in order to expand production capacity forphotomasks and other products and will also promote alliances withexternal parties.
Moreover, we are working to develop nanoimprint technology to
reduce power consumption in semiconductor manufacturing processes.
We formed a capital and operational alliance with SCIVAX Co., Ltd. toaccelerate the mass production of nanoimprinted products such as
optical elements for mobile devices and bio-device elements throughNanoimprint Solutions Co., Ltd., a joint venture with SCIVAX.
Image of the Mihara Plant (Hiroshima Prefecture), where a new
wide-range coating device has been added

Business strategy / Investment plan

Investment of approx. 20 billion yen in expansion of
production capacity for metal masks for manufacturing
OLED displays, scheduled to commence operation in
FY2024
Investment of 13 billion yen or more in the expansion of
production capacity of ultrawide optical film, scheduled
to commence operation in FY2025
Expansion of applications such as XR and automotive
displays

Sales plan

Growth rate indexed against FY2022 as 100

Optical design technology is used tocontrol light reflection and reduceglare in lighting and other applications

Outlook for the global display market* Estimate by DNP based on various materials

350,000
300,000(vs. FY2022)

Investment of 20 billion yen or more in expansion of
production capacity for photomasks, etc. in Japan andoverseas
Accelerate the mass production of nano-imprinted
products such as optical elements for mobile devices andbio-device elements through Nanoimprint Solutions, ajoint investment with SCIVAX
Expand value provision to the semiconductor supply chain
through external alliances
Image of an OLED display
manufactured using metalmasks(Area: km2)

FY2025 12% increase

Photomask (master for making semiconductors)

Business strategy / Investment plan

Smartphones
IT
TV

CAGR 3.8% (2023→2030)

Sales plan

Growth rate indexed against FY2022 as 100

87(vs. FY2022)

250,000

5

200,000

4

1
0
FY20220

FY2025

Our aim

2015

2020

2025

2030

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

TOPIC

40

CAGR 5% (2023→2030)

LOGIC
MemoryOther

250,000
Our aim* Estimate by DNP based on various materials

3

100,000

FY2025

Vapor chambers (metallic
heat-dissipation components)(communication,
power semiconductors, etc.)

6150,000

FY2022Global market outlook for semiconductors($10 billion)

FY2025 15% increase

Lead frame for compact
semiconductor packages

TOPIC

Addition of a wide-range coating device for high functional optical film

Capital and operational alliance in foundry business for the mass
production of nanoimprinted products

DNP has increased the number of wide-range coating devices suitable for the manufacture of highfunction optical film with a maximum width of 2,500 mm. The device has been added at the Mihara
Plant in Hiroshima Prefecture in response to the ongoing shift to large screen televisions. As a result,production capacity, on an area basis, has increased by more than 15%. This will boost the productivityof film for 65-inch large-screen TVs with horizontal and vertical dimensions of 1436.4 mm x 809.0 mm.

In this alliance, we will combine DNP ʼs strengths in cutting-edge nanoimprint master mold manufacturing technology,
mass production and quality control know-how, with SCIVAX ʼs strengths in mass-production manufacturing equipment
capable of high-precision nanoimprinting and equipment design technology, among other areas. As a result, we willdevelop a system in Japan that can rapidly respond to the mass production outsourcing needs of manufacturers inJapan and overseas, which, in the future, will also lead to capabilities in responding to global supply chain risks.

DNP Integrated Report 2023

41

4

MEDIUM-TERM MANAGEMENT PLAN:
NON-FINANCIAL STRATEGYStrengthening of Human Capital,
Message from the Director in Charge …………………………………………… 44
Strengthening Intellectual Capital,
Message from the Director in Charge …………………………………………… 50
Value Creation through Digital Transformation (DX) ………………………… 54
Initiatives for Environment ……………………………………………………………… 56
Initiatives Across the Entire Supply Chain ……………………………………… 62

P&I LAB., a collaboration facility operated by DNP

42

DNP Integrated Report 202343

4 ｜ MEDIUM-TERM MANAGEMENT PLAN: NON-FINANCIAL STRATEGY
the enhancement of corporate value.
Furthermore, we have established four material issues(materiality) to address in pursuit of this realization. We will
implement concrete measures in each area: (1) support forcareer autonomy of employees and strengthening oforganizational capability; (2) health and productivity
management that increases the happiness of employees; (3)hiring, personnel assignment and reskilling based on humanresource portfolio; and (4) promotion of diversity andinclusion by utilizing diverse individuality. We will boost theeffectiveness of these initiatives by conducting
value-relevance analyses, examining the outcomes they yieldfor employees and their contributions to the improvement of
human creativity, corporate value and financial value.
To drive unprecedented transformation beyond our
traditional path, it is important for each employee toindependently shape their careers and further develop theirstrengths. To provide even better support for employee career
autonomy, we will continue to invest optimally and effectively
in our human resources, thereby strengthening our humancapital. The DNP Group will continue to advance a humanresource strategy aimed at significantly enhancing humancreativity, with the ultimate goal of elevating corporate value.

Non-financial Strategy

The key base and source of strength for the DNP Group in
creating a better future is the presence of every employee.
Based on this awareness, we aim to develop systems andstructures that take into account the broader society. We also
strive to create and implement appealing policies, not onlyinternally but also from an external perspective. For example,
over the three years starting from fiscal 2019, we madeconcentrated efforts to revamp various personnel systems,
actively promoting investment in human resources.
In fiscal 2022, as a foundation for such efforts, the DNPGroup formulated and publicly announced its Human Capital
Policy, which represents the companyʼs universal andfundamental approach to human resources. This policy aims
to further reinforce and maximize our human capital based ona clear belief that respecting employees leads to therespected employees driving corporate growth and enhancing
society alongside our desire for each individual to develop
their strengths and grow further in their roles both within andoutside the company.
In the new Medium-term Management Plan starting infiscal 2023, we will enhance our investment in humanresources based on our Human Capital Policy. We will
significantly increase “human creativity (added value
productivity)” globally to clearly connect this investment toStrengthening of Human Capital

Human Capital Policy

We aim to significantly increase “human creativity(added value productivity)” globally based on the
Human Capital Policy to clearly connect investment in
human resources the enhancement of corporate value.

Respecting employees leads to respected employees
driving corporate growth and enhancing society
Nurturing human capital who can be active in society (both within and outside DNP)

Labor andManagement
Joint
Declaration

Kenji Miya, Senior Managing Director

Human Capital Operational Mission

DNP Group Safety and Health Charter

DNP Group Diversity Declaration

DNP Group Declaration on Health

Human Resources Development Vision

DNP Group Welfare Vision

DNP Group
Human Rights
Policy*Including stakeholders
other than employees

The link between strengthening human capital and enhancing corporate value

44

Material issues

Initiatives

Support for career
autonomy of employees
and strengthening oforganizational
capability

Implementation of a DNP
version of “compensation
and related policies thatare more closely founded
on a job-oriented
perspective”

Health and productivity
management that
increases the happinessof employees

Management reform
based on DNP Group
Declaration on Health

Hiring, personnel
assignment andreskilling based onhuman resource
portfolio

Implementation of
personnel assignment
to focus businessareas and reskilling

Promotion of
D&I utilizing diverse
individuality

Cultivation of culture
enabling active
participation by
diverse personnel

Specific measures
Multi-track post-based compensationand support for career autonomy
Maintaining and securing competitivecompensation levels and systems
Improving training aimed at strengtheningorganizational capability

Direct effects and impact on the internal environment
Promoting multi-track career (management specialist)
Support for employeesʼ career autonomy
Promoting job-based (post-based) compensation and securing
specialized human resources

Employee self-actualization and autonomous career development

Enhancing training programs to improve management skills

Enhancement of management capabilities(verification through management feedback)Measures to realize the DNP Group
Declaration on HealthExpanding health and productivity promotion programsfor employees

Developing the psychological capital and reduction in presenteeism

Penetration of DNP Value Objectives (DVO) system

Management transformation and strengthening of team capabilities
through penetration of the DVO system (1 on 1 meetings/team meetings)

Creation of organizations and teams with guaranteed
psychological safety
Enhancement of DVO initiatives

Measures to improve organization engagement

Development of Health and Wellbeing Awards to strengthenorganizational and team skills

Improvement in employee engagement survey scores

Strengthening of hiring and expert training
based on human resource portfolio

Strengthening hiring and training of specialized personnel

Increase in number of basic DX personnel

Visualization and raising ofskill level of DX personnel

Financial and corporate value

Expansion of DX training program
Definition and visualization of the skill level ofbasic DX personnel and those promoting DX

Increase in number of personnel promoting DX

Reskilling from areas business forreforming to focus areas

Facilitating job transfers after reskilling training

Optimization of personnel allocation

Promotion of active participation by women(enhancing diversity in decision-making)

Increasing number of female managers

Active participation of diverse employees

Encouragement of male employees to takechildcare leave (support for work-life balance)

Improving male childcare leave uptake rate

Creation of a comfortable work environment

Implementation of unconscious bias training for all employees(fostering a psychologically safe workplace culture)

Increasing number of participants in unconscious bias training

Development ofautonomous careers

Improvement in engagement
and wellbeing

Flexible and resilient
management

Taiwa (dialogue) andCooperation

Expansion of existing
business

Enhancementof humancreativity

Creation of value forsociety throughbusiness innovation(added value productivity
through investment in
human resources)

Greater profitability

Growing sales

An organization thatconsistently generates
innovation

DNP Integrated Report 202345

4 ｜ MEDIUM-TERM MANAGEMENT PLAN: NON-FINANCIAL STRATEGY■

Support for career autonomy of employees and strengthening of organizational capability

Starting in fiscal 2019 and continuing for three years, we haveconcentrated our efforts on reforming our personnel systems
to establish and enhance systems that support employee
career autonomy and bolster organizational capabilities.
From fiscal 2023, we will advance these initiatives further,aiming to explore the optimal approach for investing in humanresources and career development frameworks that best alignwith DNP's business and talent needs.
We are implementing the DNP version of “compensation andrelated policies that are more closely founded on a job-oriented
perspective,” with a focus on supporting autonomous careerdevelopment so that each employee can acquire expertise andskills that are applicable both within and outside theorganization. This unique hybrid personnel system combines
the merits of membership-based and job-based systems.
We have also strengthened support for initiatives such as
challenging preferred job roles based on voluntary aspirations
and self-improvement, all of which are grounded on amulti-track role classification system that allows employees toautonomously choose management or specialist roles. We haveplaced greater emphasis on clarifying the roles andcompensation associated with job positions after career
choices have been made.
We will also implement a range of associated measures.
These include a heightened focus on job roles and positions
for senior management and specialists, introducing a
feedback system from subordinates to management,
expanding internal talent recruitment efforts, implementing
an internal side-job program, renewing our self-improvement
support system, formalizing employee assignments to startup
companies, expanding the ICT professional system andstarting region-specific employee programs. These actions
are all predicated on the principle of upholding a competitivecompensation structure.
Expected outcome• Complete implementation of the DNP version of“compensation and related policies that are more closely founded
on a job-oriented perspective”

A hybrid career autonomy-type mechanism leveraging the merits of membership-based and job-based systems*Concrete visualization

Role/duty/position

Select young talentMore job-based= Post-based (management or specialist)

Select young talentTransition from membership based to more
job-based
Membership-based system= Development, growth, proficiency-based(job group and grade specific)*For general positions= Autonomous multi-track (management or specialist)*For mid-level employees

Grade

■

Health and productivity management that increases the happiness of employees

In fiscal 2021, we formulated and disseminated the DNP Group
Declaration on Health as a top commitment. In accordancewith this commitment, we will focus not only on physical andmental health, but also on efforts that include developing
psychological capital (a positive mind) and building
psychological safety (trust-based relationship).
As one of our important management strategies, DNPGroup is implementing a series of measures based on thecommitment. By investing in the health of our employees, we
believe we can not only maintain and improve their health, but
we can also enhance their vitality, creativity and productivity,
thereby revitalizing the organization. Through the formation ofa vibrant team, we aim to boost corporate value and link this toenhancing the happiness of each employee.
In fiscal 2021, we introduced the DNP Value Objectives(DVO) system as part of management reform efforts based on
the commitment. In line with this, we will strengthen teammanagement and build relationships of trust to drive new value
creation.
Through an engagement survey, we visualize issues andother factors in the organization, and promote employeesʼ
self-understanding and mutual understanding via dialogue toincrease their motivation and encourage teams to achieve their
expected results.
As part of our specific initiatives for fiscal 2023 and beyond,46

we are promoting our DVO Penetration Program aimed atachieving the full integration of DVO throughout the company
and establishing a new management style. Additionally, we are
implementing the Health and Wellbeing Award that evaluates
factors beyond business revenue and conducting engagement
improvement initiatives within our manufacturing department.

■

Hiring, personnel assignment and reskilling based on human resource portfolio

Strengthening of hiring and expert training based on human resource portfolio
The DNP Group has developed a human resource portfolio
categorized into multiple types based on the roles genuinely
required and the expertise and management abilities present
within each business. In pursuit of our business strategies,
we assess the adequacy of talent for each type and promote
recruitment and development that emphasizes the qualitative
aspects of our workforce.
When it comes to recruiting rare specialized personnel,
we do not just rely on internal development; we also actively
seek external candidates for our team. Especially for highly
skilled professionals, we offer competitive compensation
packages and have dedicated provisions in place forprofessional staff. We have already recruited physicians andother medical professionals in our medical & healthcare
businesses, and we will continue to do so across various
other sectors. Regarding the development of specialized• Development and level of engagement with DVO system:
45 % → 100 % (FY2022 → end of FY2025)• Engagement survey score: Up 10 % (FY2022 → end of FY2025)• Smoking rate: Less than 15 % by FY2026• Implementation rate of specific health guidance:

More than 60 % by FY2024

As the business environment undergoes rapid changes and
we enter what is often referred to as the 100-year life era,
the importance of reskilling is increasing more than ever. At
DNP, we have also been strengthening our business portfolio,
and from fiscal 2020 to fiscal 2022, we reallocated personnel
from areas business for reforming to focus business areas at
an average annual rate of approximately 200 employees. For
example, employees from manufacturing backgrounds inInformation Communication have transitioned to roles inindustrial high-performance materials and electronics
manufacturing, which they had not previously experienced.
Over the course of three years, approximately 170 employees
made such transitions. These employees acquired thenecessary knowledge and skills (reskilling) required for their
new roles at their respective reassignments. We conductedgroup training sessions aimed at boosting their motivation
before facilitating job role transitions. In addition, in fiscal

5

FY202013

FY2021

12

FY2022
0

2

4

6

8

10

12

14

(No. of people)

2022, we introduced talent recruitment programs with roletransition training for our focus business areas.
We will continue to implement reassignments andreskilling from areas business for reforming to focus businessareas as necessary in the future.

Image of the DNPweb (intranet) screen

Visualization and raising of skill level of ICT personnel and DX personnel• Expansion of ICT personnel, and the enhancement of

We will be strengthening the number of individuals in Career
Development Program (CDP) Level 3. Additionally, to support
the promotion and enhancement of DX in each business, wewill expand the training programs aimed at human resource
development based on the IT Skill Standard (ITSS) and its
skill levels.
• Expanding education to boost DX skills

We are broadening our training curriculum to encompass
Agile development, cloud computing and AI and data science.
Our goal is for 27,500 eligible employees to finish thefoundational DX literacy standard education by the end of2025, equipping them with crucial DX knowledge.
President ʼs message on the DVO
Penetration Program

Hiring specialized personnel

Reskilling from areas business for reforming to focus areas

new ICT job transition and development measures

Expected outcome

personnel, for instance, in ICT development roles, we arefocusing on planned development and retention by visualizing
individualsʼ skill levels and establishing a Career Development
Program (CDP) aimed at skill enhancement.

Number of individuals with IT Skill Standard Level
3 or above (FY2020-2022)(No. of people)

800
600
400
200
0

497

FY2020619

FY2021733

FY2022* IT Skill Standard (ITSS) Level 3 indicates a level of proficiency where one possesses applied

knowledge and skills, can independently make judgments and carry out tasks related to their
responsibilities, and is capable of identifying and resolving issues.

Health and Wellbeing AwardDNP Integrated Report 202347

4 ｜ MEDIUM-TERM MANAGEMENT PLAN: NON-FINANCIAL STRATEGYDefining DX personnel and promoting visualization
Amid changing industrial structures and society, there is a
growing focus on DX personnel. In line with the Digital Skill
Standard (DSS) released by the Ministry of Economy, Tradeand Industry at the end of December 2022, the DNP Grouphas redefined DX personnel. We have categorized talent andvisualized skill levels, as shown in the diagram, to accelerate
human resource development.
DX foundational personnel refer to individuals who haveacquired knowledge and skills based on the DX literacy
standard. They will be developed across all job roles throughe-learning and DX literacy education. DX promotional
personnel encompasses individuals with specialized roles in
DX Literacy
Standards (DSS-L)

Harnessing diversity: Promotion of active participation by women (enhancing diversity in decision-making)driving DX initiatives. These talents are identified incollaboration with business divisions, and their development
is prioritized.

Expected outcome• DX Literacy Standard Basic Education: Targeting completion by

27,500 individuals (end of FY2025)• Acquisition of human resources for driving business strategy• Innovation in new business creation and realization of DX in
manufacturing operations

DX Promotion Skill
Standards (DSS-P)

As outcomes by fiscal 2022, we established initiatives toaccelerate the increase in the representation of female
managers. Specifically, we continue to conduct practicalleadership training for leader-class individuals, as well as
maintain processes for promoting managers and assistantdepartment heads, along with a Sponsorship Program to
expedite the appointment of managers at the department
head level and above. These efforts are contributing to thedevelopment of next-generation business leaders. In June
2023, we celebrated the appointment of our second female
executive officer from within the company. Enhancing
diversity in decision-making increases value creation and risk
management capabilities. In addition, we recognize that
improving the ratio of women in management leads toimproved productivity within the DNP Group, evident in higher
engagement survey scores and a reduction in overtime hours.

Job category

Ratio of females at each level
（%）

30
4

25

5

20
3

15

6

10
1

5

2

0
FY2016FY2017FY2018FY2019FY20201. Executives and equivalents
3. Section managers and equivalents
5. Full-time employees

FY2021

FY2022

FY2025targets

2. Department managers and equivalents
4. Leaders (one step before management)
6. Entire management

ICT development
Technologies
and R&D
Sales andplanning

Candidates
for DX
promotional
personnel

DX foundational
personnel

Manufacturing
and production

DX promotional
personnel

Business architect

Harnessing diversity: Encouragement of male employees to take childcare leave (support for work-life balance)

Designer

Since December 2020, when we announced ourparticipation in the 100% of Male Taking Childcare Leave
Declaration both internally and externally, the uptake ofmale childcare leave has increased from the 50% range to
83.6% and has spread to management positions. By
encouraging male employees to take childcare leave, we are

Data scientist
Software engineer

working to change gender role perceptions.
We will also continue to promote the utilization of special
leave for life support, which can be taken to accommodate
life events, and continue our efforts with initiatives such as
the Kangaroo Club, a seminar that supports employees andtheir partners in balancing work and childcare.

Cybersecurity

Administration

Harnessing Diversity: Implementation of unconscious bias training for all employees(fostering a psychologically safe workplace culture)

Promotion of D&I utilizing diverse individuality*D&I: Diversity and inclusion

With the aim of significantly enhancing human creativity(added value productivity) as outlined in our human capital
strategy, the DNP Group has been expanding its efforts andsystems to transition from a homogenous and uniform
organization to one rich in diversity, and to ensure that a wide
range of talent can thrive within the Group amid the ongoingchallenges of an aging population and declining birth rates.

While these efforts have received high praise both internallyand externally, employee surveys have revealed disparities
between the companyʼs initiatives and the realities ofindividual workplaces. This underscores the significance ofadvancing “ Diversity and Inclusion (D&I) initiatives thatleverage the strengths of diverse individuals” as a criticalchallenge.

Illustration of the inclusion loop
Challenge

SupportEmpathy
Appreciation

Fulfillment

Assistance

Initiative(Sense ofownership)

Experience

Recognition

48

Diverse individuals are inclusive of each other, and thosearound them support the challenges of individuals whotake the initiative. We assess the results of thesechallenges as valuable experiences and, through open
dialogue, connect them to a sense of fulfillment. This
fosters a culture where inclusion becomes second
nature, with individuals receiving recognition from theirpeers for their contributions and feeling motivated toembrace new challenges. These interconnected loops
occur across various departments and, in unison,
amplify the collective strength of All DNP.

In 2021, we initiated the internal event Diversity Week topromote an understanding of the importance of D&I andtranslate it into concrete actions. In 2023, the event gained
significant momentum, with over 10,000 employees
participating in live-streamed lectures. Additionally, 57 D&I
promotion committee chairs, led by division heads and Group
company presidents, within the DNP Group engaged with theresults of their respective organizationʼs engagement surveys,
declaring their commitment to fostering a betterorganizational culture.
Starting in fiscal 2023, we will implement unconscious
bias training for all officers and employees, including thepresident, with the aim of establishing psychological safety
and creating an organizational culture where diverse ideas
and opinions can thrive.

57 D&I promotion committee chairs
declare their commitment

Expected outcome• Percentage of female managers: 8.4% → 12 %(FY2022 → end of FY2025)• Unconscious bias training: 100 % participation(end of FY2025)• Percentage of male taking childcare leave: 83.6 % → 100 %(FY2022 → end of FY2025)• Engagement survey score: Up 10 %(FY2022 → end of FY2025)

DNP Integrated Report 2023

49

Non-financial Strategy

4 ｜ MEDIUM-TERM MANAGEMENT PLAN: NON-FINANCIAL STRATEGYDNP will enhance intellectual capital by evolving anddeepening its long-cultivated unique strengths in Printing &Information (P&I) and bolstering collaboration with external
partners in order to differentiate itself from competitors andboost global competitiveness.
Our research and development policy involves envisioning“a better future” that we aim to create, using it as a starting
point to strengthen our unique technologies, and ultimately
driving the development and delivery of new products andservices toward the realization of future scenarios. Under our
FY2023-2025 Medium-term Management Plan, we will
promote the “creation of new businesses and enhancement oftechnological strengths,” the “global rollout of technologicalstrengths,” the “strengthening of stable businesses andcultural reform” and the “realization of data management
infrastructure.” We allocate an annual budget of approximately
30 billion yen for our research and development investments.
Within our business portfolio, we will concentrate ourresources on the focus business areas of growth-driving
businesses and new businesses with high growth potential
and attractiveness in the market. Our primary focus will be onthese areas as we strive to combine a variety of intellectual
assets more effectively, speeding up the development andcommercialization of products and services.
Furthermore, we will advance collaboration between
industry, government and academia through open innovation,
strategically driving the acquisition of technology andbusiness development. In the context of increasing global
demand for reducing environmental impact and enhancing

Strengthening Intellectual Capital

Combining strengths in P&I andcollaboration with partners to bolster
our business portfolio from theperspective of intellectual capital
Masato Yamaguchi, Senior Managing Director

Basic strategy for strengthening intellectual capital
Material Issues

Creation of new
businesses andenhancement oftechnological strengths

Global rollout oftechnologicalstrengths

Strengthening of
stable businesses andcultural reform

Actions

Creation of new value
through All DNP

Transformation ofinternal systeminfrastructure
supporting theutilization of ICT

Acceleration of global expansion
centered on Life & Healthcare
Strengthening of overseas marketing
and R&D system
Strengthening of stable business anddevelopment of new products throughaggregation of knowledge by All DNP
Optimization of R&D mechanisms and systems

R&D investment

Continue at a scale of
30 billion yen
per year
Users of data
management
infrastructure*:
3,678 → Approx. 6,000(FY2022 → end of FY2025)

Advance modernization and globalization tostrengthen digital ICT infrastructure
Advance visualization and deeper analysisof data-integrated infrastructure, andcontinuously update infrastructure* Data management infrastructure: Infrastructure that aggregates data from various systems within the DNP Group, and processes, analyzes and visualizes the aggregated data for use in management decisions

50

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

OutputIntellectual capital

Creating value

New value creation

Unique strengths of
P&I

P&I Innovations

Increasing the value of
products and services --Increase insales/income

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

Acquisition and strengthening of technology
through open innovation

Refinement andacceleration of global
rollout of DNP ʼs unique
technology andproducts

Input

Strengthening of DNP ʼs unique technology

Fostering culture creating new value

Realization of data
management
infrastructure*

KPIs (FY2025)

Creation of new businesses in focus business areas
capturing megatrends and business opportunities

Build business portfolio
from future scenariosLong-term value creation by strengthening and expanding intellectual capital (technology, R&D/intellectual property-related)(printing and information)

Specific Measures

well-being, we will also strengthen marketing, research anddevelopment and business expansion efforts directed towards
overseas markets, particularly in sectors such as Life &Healthcare. We will foster an organizational culture that
actively combines the strengths of our intellectual property,
including patents obtained thus far, and those from bothwithin and outside the company. This approach will allow us
to create new value in both existing and new businesses.
In recent years, we have been vigorously promoting Digital
Transformation (DX) to both drive business growth and foster
innovation in productivity. For DNP, DX is positioned as thefusion of hybrid strengths of complete opposites, such as
analog and digital technologies, real and virtual realities andmanufacturing and services. This approach enables us to build
a unique business model and generate new value. In alignment
with this DX strategy, we will create new business, transform
existing business, drive dramatic improvements in productivity
and promote innovation of internal information infrastructure.
In particular, we will concentrate on expanding resources forvalue creation through DX, including the development of
in-house DX personnel, the recruitment of necessary external
expertise and collaboration with partner companies.
We will integrate “business development activities” and“ technology/R&D activities” with “strategic intellectual
property acquisition” that supports those activities within ourbusiness divisions, R&D divisions and intellectual property
divisions. We will strive to create “a better future” byconsistently embracing change and enhancing synergies
within All DNP to generate new value.

Collaboration with various partners

Othernon-financial capital
Financial capital

Securely and seamlessly connect the realand digital, contributing to the evolutionof an information society

Printing & Information
DNP ʼs core values
developed through printing
Contributing to a sustainable society
where people can live safe, secureand healthy lives

Strengthening
business base

(Fiscal year ended March 2023)

Outcomestrategies(Fiscal year ended March 2023)

Patent rights: 12,143
1,312
Design rights:
Trademark rights: 1,275

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

Business Development
R&D investment
32.5 billion yen&
Strategic acquisition of
intellectual property

strategies

Intellectual
property

Future standards
The better future of peopleʼs
expectation where various
issues have been resolved

strategies

Promote strategic investments for the next fiscal year and beyond
DNP Integrated Report 2023

51

4 ｜ MEDIUM-TERM MANAGEMENT PLAN: NON-FINANCIAL STRATEGY

For strategic acquisition of intellectual property

Basic policies and structures for technologies and R&D

Business Development
strategies

strategies

Intellectual
property
strategies

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

DNP views intellectual property as one of the essential assets for value creation. Especially for products andservices that have gained top market share in Japan and internationally, our patent network of core and peripheraltechnologies has a significant effect on business development.

Setting focus businesses and strategic acquisition of intellectual property

We will strategically build a stronger business portfolio by setting focused businesses with high growth potential
and attractiveness in the market. To this end, we are promoting open innovation and focusing on the strategicacquisition of intellectual property to ensure the superiority of our position.

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

Utilization oftechnologies
Utilization of technologies
by new businesscreation divisions andexisting businessdivisions in products
and services

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

Utilization of the cloud | AI | Data analysis

Exploration of technologies
Partnership with technologicalventure companies
Partnership with outside
research institutes

Technologies and R&D structures

Technology and R&D Expenditures

DNPʼs technology and R&D divisions are developing
proprietary technologies to solve diverse issues in a wide
range of business fields, with a focus on the three areas ofSmart Communication, Life & Healthcare and Electronics. We
are building and operating robust structures that create newvalue in existing and new businesses by promoting the
combining of technologies and collaboration with external
partners.

DNP continues to invest over 30 billion yen annually intechnology and R&D, with the amount reaching 32.5 billion
yen in the fiscal year ended March 31, 2023, and 34 billion
yen planned for the current fiscal year ending March 31,
2024. In recent years, in order to solve increasingly diverseand complex problems and create a better future forourselves, we have been increasing the expenditures of the
R&D department at the headquarters based on the All DNP
concept, which combines the strengths of the entire Group.

Integrating three strategies to create value

Controlled by Head
Office(Development headquarters)

Strengthen governance and implement strategies

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

Smart
Communication

Information Innovation

Life Design (Packaging)

The DNP Group sets its focus businesses by carefully
examining the environmental, social and economic valuethat each business generates based on the growth potential,
attractiveness and profitability of domestic and overseas
markets. Under our FY2023-2025 Medium-termManagement Plan, we are concentrating our management
resources into focus business areas made up of
growth-driving businesses and new businesses. We willfurther strengthen our patent portfolio within our focus
businesses as part of our efforts to acquire and expand
intellectual property.

Mobility
High-performance
Materials

Number of patents held in Japan(No. of patents)

14,00012,392

12,226

12,00011,525

11,726

12,143

10,0006,000

Fine Devices
Optoelectronics

0

5

10

15

20

(¥ billion)
25

30

35

FY201230.8

FY201330.8

FY201431.7

FY201531.7

FY201631.4

FY201733.2

FY201833.7

FY201933.6

FY202032.6

FY2021

33.1

FY202232.5

40

Short-term development

4,000

0

Electronics

New businesses field

8,000

Medium- and long-term
development

2,000

52

Living Spaces

Technology and R&D Expenditures

Supervision

Publishing andMedia Services

Imaging Communication

Life &
Healthcare

Head officeresearch anddevelopment
framework

R&D and Engineering Management Division

Sales division/field

Business unit

Advanced Business Center

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

Research and Business Development Center

Concentrate resources and developing human resources

Technology Development Center

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

FY2018FY2019FY2020

FY2021

FY2022DNP Integrated Report 202353

4 ｜ MEDIUM-TERM MANAGEMENT PLAN: NON-FINANCIAL STRATEGYDX promotion and control unit

Electronics

Information
systems

Life & Healthcare

R&D

Smart Communication
New businessdevelopment

The Chief Digital Officer (CDO) appointed by the President
supervises company-wide activities relating to DX. We haveestablished a full-time DX promotion and control unit at thehead office and will enhance cooperation between thedivisions in charge of new business development, R&D,
information systems and other relevant divisions within theoperation division and implement a range of measures acrossthe entire Group to drive digital transformation.

CDO

DNP positions DX as “value creation through P&I Innovations,” combining digital technologies with our businessstrengths of All DNP. Leveraging the hybrid strengths of P&I (Printing and Information) incorporating opposites suchas analog and digital technologies, real and virtual design, and products and services, we will create new businessmodels and drive our business model transformation, based on our medium- to long-term business portfolio
strategy, and offer these technologies and services as new value to a sustainable society.

DX promotion unit
Top management

Value Creation through Digital Transformation (DX)New business fields

Building our medium- to long-term business portfolio
We aim to generate further profits in our business activities by transforming
our business structure and making focused investments in priority
businesses leading to the resolution of social issues and megatrends.

Culture of challenge
We have established a new business development division that creates innovation in a highly flexible environment, and is boldly
addressing the challenges of developing new business through DX. Going forward, we will continue to drive transformation ̶
what could also be called “ discontinuity”̶ by fostering values such as tackling challenges without fear of failure, collaborating
across internal and external barriers and taking swift, agile and proactive action.

Securing and developing human resources
Electronic library service

AI-supported chest cancer exam
X-ray interpretation system

Metaverse combines physicaland virtual spaces

Authentication / security

Photo-related services
and solutions

Creation of new business models
Transformation of existing business model
Creating value through DX
Creating value
Creation of new products andservices using digitaltechnologies

Establishing the DX infrastructure

P&I Innovations
Securely and seamlessly connect the real and digital,
contributing to the evolution of an information society

Addition of new value to existingproducts and services using
digital technologies

Printing & Information
DNP ʼs core values
developed through printing

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

DX promotion unit

Culture of challenge

Contributing to a sustainable society where
people can live safe, secure and healthy lives

Strengthening
business base

Capabilities

DNP has defined the ideal image of human resources who support DX promotion based on the Ministry of Economy, Trade andIndustry (METI) Digital Skills Standard. We will improve DX literacy for all employees and provide education on topics such as
agile development, cloud computing, AI and data science for those who promote DX. (See page 47-48)
In the area of content and XR communication, which is one of our focus business areas, we are engaged in efforts to reskill
human resources from conventional 2D production designers to 3D production and UI/UX designers. We are also working todevelop human resources who enhance the user experiences.
We also provide cybersecurity education to approximately 30,000 DNP Group employees both in Japan and overseas, toraise awareness of cyberattacks.

Dramatic improvement of
productivity through a shift tosmart factories

Securing and developing
human resources

Establishing the DX
infrastructure

We are driving value creation through DX, with strategies based on both creating value and strengthening
our business base. Utilizing DNPʼs core values in image processing, security technology and optimized
design of business processes, we will continue to enhance our human and intellectual capital, andengage in complex and continuous activities with the comprehensive strength of All DNP ̶ leveraging ourorganization, corporate culture, human resources and DX infrastructure as synergistic capabilities.
TOPIC

Achieving data-driven management

Driving DX in manufacturing

Utilizing IT systems and digital technologies, DNP
transformed its business management. In addition to sales
and production status data, we have built a data management
infrastructure platform that aggregates data that contributes
to business growth, and processes, visualizes and analyzes
the aggregated data to speed up decision-making andprovide new added value.
By modernizing business systems in focus business areasthat allow us to make effective use of our competitive
advantage, we will continue to feed strategic data back tothis data management infrastructure and continuously update
it as an offensive platform. With our eyes set firmly on the
global market, we will continue to strengthen ICT governanceat our overseas bases and aim to become a digitallyadvanced company on a global scale.

To build a strong business portfolio, we are implementing
internal manufacturing DX to reform in cost structure andbusiness structure of existing businesses. By optimizing all
business processes of sales order, procurement, production,
logistics and sales, we not only improve productivity andquality, but also contribute to decreasing environmental
impact by reducing energy consumption and waste material.

Strengthen
financialbase

Achievingdata driven
management
Gaining a competitive advantage
through the strategic use of data

Strengthen
non-financial
capital

Selected as a DX Stock 2023
In recognition of our efforts to create new business models and initiatives such as the DX promotion unit, humanresource development and utilization of digital technology, DNP was selected as one of the DX Stocks 2023, under the
Digital Transformation Stock Selection (DX Stock) program, in which the Ministry of Economy, Trade and Industry (METI)
and the Tokyo Stock Exchange (TSE) jointly evaluate, select and announce the stocks of companies that are actively
engaged in DX. We were also awarded the Special Prize at the Cyber Index Awards 2022 (sponsored by Nikkei Inc.), in
recognition of our efforts in cybersecurity education in human resource development.

54

Work style reform and improving engagement
Internal system infrastructure innovation andstrengthening information security

Utilizing advanced technologies
With the aim of utilizing AI in various business areas, we havecreated an environment and system in which approximately
30,000 DNP Group employees ̶ both in Japan and overseas ̶
can use generative AI as part of our DX initiatives. We
operate an AI chat service in a high-security environment thatcan be used for business-related research, documentationand code creation.
We will actively utilize AI in our focus business areas
relating to content & XR communication to provide new value
to consumers, companies and other organizations, etc.
We have also started to examine the possibility ofcommercialization of decentralized/distributed ID. We are
currently engaged in evaluation for technologies such as
self-sovereign identity (SSI) digital certificates that allow
individuals to manage their identity data, and are promoting
the feasibility of social implementations, such as the use ofdigital IDs in school operation, job change/job hunting bycertifying individual career data and corporate human capitalmanagement.

DNP Integrated Report 2023

55

4 ｜ MEDIUM-TERM MANAGEMENT PLAN: NON-FINANCIAL STRATEGY

Non-financial Strategy

Initiatives for Environment

Contributing to the realization of adecarbonized society, a recycling-oriented
society and a society in harmony with nature
DNP continuously strives for coexistence between our business activities and the global environment, andidentifies environmental conservation and the realization of a sustainable society as part of its Code of
Conduct. With strong requirements to reduce the impacts on the global environment, in recent years inparticular, we are engaging in activities with a focus on the environment throughout our entire supply chain.

DNP formulated the DNP Group Environmental Vision 2050 and defined what we expect to accomplish toward the year 2050 inorder to create a sustainable society. With a primary focus on the following initiatives, we will continue to step up our efforts tocreate value and strengthen the business base that underpins the creation of that value, toward the realization of a decarbonizedsociety, a recycling-oriented society and a society in harmony with nature.

Creating value

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

Transforming business portfolio based on
environmental impact and added value
Expanding the development and utilization of
low-carbon materials
Decarbonization of products and services throughcalculation and reduction of CO 2 emissions for eachproduct
Creating recycling scheme and expanding theutilization of recycled materials

Efforts to address environmental
issues based on both creating
value and strengthening
business base2050 targets

Reducing GHG emissions
by 40% from FY2015 levels
by 2030

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

Sales of super eco-products＊1
to account for 10% ofgross sales in 2025

Building decarbonized society

Increase 2025 resource
recycling ratio＊2 by 5%from FY2015 levels

Reduce 2025 water
usage by 35%

DNP ʼs vision for society

Contribute via
products and services

Decarbonizedsociety

Mitigation of and adaptation
to climate change

Recyclingoriented society

Efficientresource reusethroughout
the value chain

from FY2015

Efficient resource use

Strengthening business baseClarifying environmental impact
Introducing renewable energy
Investing in energy-efficient facilities, optimizing
production bases to address environmental impact
Minimizing the impact of business activities on
ecosystems
Ensuring traceability of raw materials andtransparency of supply chain

The effects of climate change have become increasingly serious every year and have a large impact on the environment, society
and the economy. There are calls to accelerate efforts toward achieving carbon neutrality by 2050, as a response to this climatechange crisis, and the importance of the roles to be played by companies is always increasing.
By working to resolve climate change and other environmental issues, DNP intends to resolve social issues and create newvalue to meet peopleʼs expectations. We are also proactively engaging in dialogue with stakeholders by enhancing the quality
and volume of information disclosed via our integrated reports, websites and other media, utilizing an international framework
recommended by the Task Force on Climate-related Financial Disclosures (TCFD), while maintaining transparency with regard to
the various risks and opportunities that climate change poses to our business.

Governance

DNP Group Environmental Vision 2050

Initiatives in the Medium-term Management Plan
(FY2023-2025)

Efforts to the realization ofa decarbonized society

Guidelines for Procurement ofPaper for Printing andConverting

100% of purchased
products are compliant

Minimizebiodiversity impact

Society in harmony
with nature

DNP regards addressing environmental issues ̶ including
climate change ̶ as one of its key management challenges.
In April 2022, DNP reorganized the Sustainability Committee
heated by the president in order to enhance environmental,social and economic sustainability and further drive DNPʼssustainable growth and enhanced functionality. By
coordinating with the BCM Promotion Committee, which
ensures the safety of employees and maintains production
activities in the event of a natural disaster or otheremergency, and the Corporate Ethics Committee, whichseeks to raise employeesʼ compliance awareness and reducerisks, the Sustainability Committee has established a flexible
and robust governance system that covers company-widerisks.
The Sustainability Committee meets regularly, four times
a year, and at other times as necessary for the purposes ofmanaging medium to long-term management risks relating tosustainability, identifying business opportunities andreflecting them in management strategies; and delivers
reports and makes recommendations to the Board of
Directors. The Board of Directors receives reports andrecommendations on matters discussed and resolved by the
Sustainability Committee, and deliberates and supervises
policies and action plans, etc., for responding to risks andopportunities relating to sustainability. Strategies and policies
on environmental issues determined by the Committee are

addressed by the DNP Group as a whole, in coordination with
the Business Unit & Group Company Environmental
Committees.

Board of Directors

BCM Promotion
Committee

Sustainability
Committee

Corporate Ethics
Committee

OfficeEnvironmental management department

Business Unit & Group Company Environmental Committees
Promotion Office
Technical andmanufacturing
groupGroups promoting
each environmental
targets

Business Unit & Group Company Sites

Risk management

throughout
the value chain

Protect biodiversity*1 Super eco-products are products and services that DNP deems to be exceptionally environmentally conscious based on its proprietary criteria.
*2 Resource recycling ratio is the rate of unneeded materials, excluding valuable materials such as paper, etc., recycled by either material or chemical recycling.

We set medium-term targets and are accelerating the pace of specific activities aimed at achieving the DNP Group Environmental
Vision 2050. In particular, we are investing efforts into reducing GHG emissions and improving our resource recycling rate, andare making greater progress than originally planned.

DNP engages in integrated risk management to minimize thenegative impact of variable factors (risks) and expand
business opportunities based on a flexible and resilient
governance system.
Environmental, social and economic risks andopportunities are identified, evaluated and managed by the
Sustainability Committee at least once a year. We prioritize
activities and set targets based on factors such as businessplans, financial impact, stakeholder concerns, impact on theenvironment and society and likelihood of occurrence, andreflect them in our management strategies. For risks with aparticularly high level of importance or priority, we select arisk management department and reflect the risks in businessstrategies and plans after discussions by the Management
Committee, with each organizational unit playing a central
role in responding to them. For opportunities, we manage
priority themes throughout DNP and link them to strategic
business development.

(For details of our environmental targets, see page 17 of the DNP Group Environmental Report 2023).

Vision of society

Medium-term targets

Actual results for
FY2022

Decarbonizedsociety

Reduction in GHG emissions: 40% reduction compared with FY2015 levels by the end of FY2030 (Scope 1 and 2).

36.5% reduction

Resource recycling ratio: five-point increase compared with FY2015 by the end of FY2025 (51.7%→ 56.7%)

6.3-point increase

Recycling-oriented
societySociety in harmony
with nature

56

Percentage of items in compliance with the Guidelines for Procurement of Paper for Printing and Converting:

98% by the end of FY2025, 100% by the end of FY2030

94％

Strategy
DNP utilizes multiple scenarios published by international
institutions (see pages 58-59) to identify risks caused byclimate change and consider strategies for addressing risks in
its business activities. We use these scenarios to evaluate andanalyze qualitative and quantitative financial impact and theperiods of time during which we will be affected. Climatechange-related risks include transition risks associated withtransitioning toward a decarbonized society, such as thetightening of regulations and increased demand for low-carbon
C scenario) and changes associated withtechnologies (1.5°Cphysical impacts resulting from rising temperatures (4°scenario). Based on the results of its scenario analyses,
DNP Integrated Report 2023

57

4 ｜ MEDIUM-TERM MANAGEMENT PLAN: NON-FINANCIAL STRATEGY

Impact on financial affairs, etc. of DNP

200,000• Introduction of

next-generationenergy sources

0

2015

58

2022

2030

2040

2050

MediumHigh
Medium

­

­

High

Low

Low

­

­

Mediumdeveloping the calculation business­

Short to medium term

• Secure an advantage by calculating CO2
emissions from productsʼ entire lifecycle,­

Medium term

High
High
High
High

MediumLow
Medium - High
Medium HighLow

Medium termLong term
Short tomedium term
Short
term

­

­

­

­

functional films to control light andtemperature• Increase in demand for products (such as

flexible LED sheet) that contribute to the safe
and stable supply of food by avoiding external
impacts

High

High

Short to medium term

High

High

Disaster control measures for production facilities
and bases, development of production systems in
multiple locations, etc.

• Increase in demand for products utilizing

MediumHigh• Decreased revenue due to delayed manufacturing• Increased cost of disaster control measures

Suspension ofoperations inlocations susceptible
to flooding such as
river basinsinterruption of supply

­

­

­

­

High

• Increased energy expenses• Increased capital expendituresand shipping• Increased cost of purchasing raw materials and

High

High

Increase in costs
due to growing
demand for cooling• Decreased revenue due to delayed manufacturing

Medium• Decreased revenue due to delayed manufacturing

Disaster control measures for production facilities
and bases, development of production systems in
multiple locations, etc.

as a company leading the way insustainability

MediumHigh

Hindrance tooperations due toaverage temperature
increases

Disruption of
supply chains• Decreased revenue due to delayed manufacturing• Increased cost of disaster control measures

improvement of engagement

Short to medium term

MediumHigh

Medium­Suspension ofoperations in theevent of a disasterand a decrease in revenue due to a decrease intransactions• Outflow of human resources and an increase in
hiring costs

Medium term

MediumHigh
MediumMedium­Medium• Increased information disclosure andMediumIncrease intemperature
andlong-termheat waves• Loss of market due to a lack of carbon reduction

growing market for low-carbon products andservices
Aim for 10% percentage of gross sales
from sales of super eco products by FY2025• Enable the market for recycled materials,
biomass materials and paper, etc., to growas replacements for existing plastic products• Securing an advantage by calculating CO2
emissions from productsʼ entire lifecycle• Securing advantages and human resources

Increase incorporate image, aconcerns of decline in stock
stakeholders price and exclusion
Increase inwind andflood
damage fromheavy
rainfall,flooding, etc.

lack of carbon reduction• Acceleration of the shift to non-petrochemical
products, a negative impression of plastic products
penetrates markets• Growing demand for the replacement of
non-environmentally conscious materials withalternative materials

MediumWorsening of the• Promotion of the development of and the• Loss of market and decrease in revenue due to a

Medium term

Changes incustomer
behavior

Reduction in
products andservices that are
not low-carbon orenvironmentallyconscious

popularization of EVs (battery pouches forlithium-ion batteries, mobility-relatedmaterials and films for use as coating
alternatives, etc.)
Aim for 100 billion yen in overall sales ofbattery pouches for lithium-ion batteries by 2025
• Widespread adoption of low-carbon producttechnologies accompanying growing demand
for semiconductors (nanoimprint lithography)[See pages 22-23 for details of focus businesses]

Short to medium term

decreased profit

neutrality

Mediumtechnologies• Loss of markets due to delays in development andMedium - High• Increased investment in the development of new

Medium term

next-generation fuels such as hydrogen andammonia• Increased demand due to the widespread

Short tomedium term

To achieve
net-zero GHG
emissions

Accelerating

Shift totechnologicallow-carbon innovation totechnologies achieve carbon

Waterrelated risks
in riverbasins2050 target

400,000

toward reducing emissions

Short term

600,000

reduction of emissions

reduction of emissions• Appealing to a proactive corporate stance

Short term

• Introduction of renewable energy­• Increased demand from major clients, etc., for the• Gain on sale of emissions rights due toMediumterm

800,000• Tougher rules on accurate tracking of emissions• Increase in media for disclosing emissions datacarbon tax on GHG emissions
Estimate for expenses as of 2030, assuming 140
US dollars/t-CO2 of carbon tax using the scenario of
the International Energy Agency (IEA):
approx. 8.4 billion yen/year

next-generation fuels such as hydrogen andammonia

Mediumterm

high-efficiency equipment• Conversion of business portfolio• Introduction of renewable energy

power generation• The promotion of development for the use of

Medium termMarket/evaluation
Urgency
Physical impact• Energy saving activities, replacement with

• Growth of sales of products related to solar• Business contracts impacted• Suppliers passing on the prices of raw materials

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

development of low-carbon products

from investments

Roadmap for achieving carbon neutrality by 2050

1,000,000• Increase in expenses for purchasing emissions rights­• Increased market share through early

The SSP5-8.5 Scenario is one of the climate change scenarios presented by the Intergovernmental Panel on Climate Change (IPCC) in its Sixth
Assessment Report. It is a scenario in which GHG emissions increase significantly due to fossil fuel-dependent social development, with the averagetemperature increasing by over 4°C by 2100, which will have a significant impact on ecosystems and human activities.

2030 target

Certificate
Estimate for additional expenses as of 2030 due
to the tightening of GHG emissions regulations tolimit the temperature increase to 1.5 C level:
Approx. 600 million yen/year• Increase in operating cost due to imposition of a

Introduction of acarbon tax

Toughening ofemissions reporting
obligations

SSP5-8.5 Scenario

A reduction of
40% from
FY2015 levels

Introduction of anemissions trading
system• Increased expenses for purchasing Non-Fossil

Period Level Likeliofofhood
impact impact

Positive• The promotion of development for the use of

The NZE 2050 Scenario is one of the climate change scenarios published by the International Energy Agency (IEA). In order to create a decarbonizedsociety and ensure energy security, it envisions the strengthening of ambitious and coordinated policies, the introduction of low-carbon technologies,
and the creation of markets. It is a scenario in which carbon neutrality is achieved by 2050, and the average temperature increase is limited to 1.5°C.

1,200,000

Tightening
GHG
emissions
regulations

Acceleration of the
carbon neutrality ofthe supply chain

Net Zero Emissions by 2050 Scenario (NZE)

GHG emissions (Scope 1+2) / t-CO2

Mandatory
introduction ofrenewable energy

Medium termof renewable energy

Physical risks in the short term are assumed to be frequent
and aggravated damage from torrential rains, which may
cause suspension of operations and disrupt the supply chain,etc. In the medium and long term, we anticipate an increasein costs and the interruption of operations, etc., caused by arise in average temperatures and a change in demand forwater. In preparation for these risks, we have organized asystem for managing business continuity. More specifically,
for the past several years, we have been implementing
disaster control measures such as raising outdoor facilities
and installing water control barriers. We have also beenworking to enhance our supply chain management bybuilding production systems at multiple plants, diversifying
suppliers, etc.
On the other hand, demand for products and services that
adapt to the effects of rising temperatures is also expected toincrease. For example, we will work to expand our range of
products and services utilizing our proprietary converting
technologies, such as lighting film, which maintains a
comfortable space by efficiently incorporating sunlight intoindoor spaces, and a multifunctional insulation box that
supports logistics operations at low temperatures and constanttemperatures. We will also expand the use of functional films,
such as by supplying flexible LED sheet, an LED lighting
solution that contributes to improving productivity in growing
agricultural products for plant factories, which are less affectedby wind and flood damage.

Chronic

4 ºC
Scenarioto encourage energy saving
Systematic capital expenditures based on internalcarbon pricing (ICP)• Increased capital expenditures for the introduction

Example reference scenario

1.5 ºC
Scenario• Increased capital expenditures accompanying efforts

Period Level Likeliofofhood
impact impact

Medium term

Response to physical risks and opportunities

Negative

MediumObligation to raiseemission reduction
targets

Scenario analysis reference scenarios
Type

Risks related to climate

Mediumterm

TypePolicies, laws and regulations

Transition risks include the likeliness of the increase in theuse of renewable energy, the introduction of emissions
trading (cap and trade) and the introduction of a carbon tax,etc., due to the tightening of GHG emissions regulations. We
expect this to increase operating costs. In response to this,DNP is transforming its business portfolio based on
environmental impact and added value. Under the DNPGroup Environmental Vision 2050, we are striving to achieve
net-zero GHG emissions from business activities at ourestablishments by 2050. We have set medium-term targets
for 2030 and are improving our energy conservation
activities, replacing existing equipment with higher-efficiency
equipment using internal carbon pricing and systematicallyintroducing renewable energy.
Meanwhile, we expect that demand and market for
low-carbon products and services will continue to grow,requiring the accelerated shift to and development of
low-carbon technologies. In response to such changes,
DNP is working to create value by enhancing its allianceswith numerous external partners by leveraging its strengths
in P&I (Printing and Information). Specifically, we have set
the Mobility and Industrial High-performance Materials
businesses as focus businesses under our Medium-termManagement Plan, in view of their profitability and market
growth potential. In addition to products that contribute to
the creation of a decarbonized society, such as clean
energy-related materials, components and products suchas battery pouches for lithium-ion batteries, we also
expect to see business growth in security solutions forthe sharing economy. We are also driving sales ofenvironmentally friendly packaging, which offers both
environmental conservation and convenience, andClimate change-related risks

Technology

Response to transition risks and opportunities

rolling out a certified system to calculate life cycle CO 2,
which contributes to decarbonization across the entire
supply chain by calculating CO 2 emissions throughout theentire lifecycle of our products and services. To strengthen
these businesses, we are intensively investing management
resources and implementing strategic investments.

Transition

DNP will respond flexibly and strategically to foreseeableclimate risks and increase the resilience of its businessactivities for all scenarios in the medium to long term.

Degree of impact We have determined the degree of impact on the interests of stakeholders and the business considering business plans, identified risks related to the environment
given their likelihood and categorized the risks that are predicted to have a long-term effect or a financial impact of 10 billion yen or more as having a high degreeof impact. Risks with an impact lasting several years or a financial impact of several hundred million yen were categorized as having a low degree of impact.
Degree of financial impact: High: approx. 10 billion yen Medium: 1 to 10 billion yen Low: less than 1 billion yen

DNP Integrated Report 2023

59

4 ｜ MEDIUM-TERM MANAGEMENT PLAN: NON-FINANCIAL STRATEGY

Efforts to realize a recycling-oriented society

Targets and indicators
To minimize the risks associated with climate change, we
calculate the GHG emissions of the entire DNP Group (Scopes
1, 2 and 3) and develop strategies based on the results ofthese calculations. In order to achieve carbon neutrality by
2050, we have set the goal of reducing GHG emissions(Scopes 1 and 2) associated with business activities at ourestablishments by 40% by 2030, compared with emissions
in FY2015, and are engaged in various reduction activities.
Specifically, in addition to transforming our business portfoliowith consideration of environmental impact and added value,
we are implementing measures such as the introduction ofhigh-efficiency equipment that factors in internal carbon
pricing (3,000 yen/t-CO 2). As a result of these efforts, we
expect to be able to achieve our GHG emission reduction
target for 2030 ahead of schedule, and are now considering

raising the target. In addition, we are investigating the statusof our suppliersʼ targets for controlling and reducing their
GHG emissions to control our Scope 3 emissions, which
account for more than 80% of GHG emissions across ourentire supply chain.
To maximize business opportunities, we are working to
expand our focus businesses based on the Medium-termManagement Plan. We have set the goal of raising thepercentage of gross sales from sales of super eco-products(specific products and services that DNP deems to be
exceptionally eco-friendly based on its own criteria) to 10%
by 2025, and sales are growing at a pace that exceeds thistarget. We will continue to increase the number of our
products and services that contribute to the creation of adecarbonized society.

Super Eco-Products examples and sales performance
DNP has established guidelines for developing eco-friendly products and services* from the perspective of reducing
environmental impact throughout their life cycle, and is working to create eco-friendly products and services fromthe development stages. Among them, we have identified products and services that are exceptionally eco-friendly
as Super Eco-Products.
*See DNP Group Environmental Report 2023 page 20

Mono-material packaging materials

Multifunctional insulation boxes

As a response to the problems of marine plastic waste, climate change and the toughening of waste import regulations in various
countries, the importance of recycling plastic resources in Japan is also increasing. DNP is making efficient use of resources
throughout its supply chain to help realize a recycling-oriented society as laid out in the DNP Group Environmental Vision 2050.
Since fiscal 2021, we have been working to recycle unneeded materials, using the resource recycling rate ̶ the percentage ofmaterials included in unneeded waste that are recycled by material and chemical recycling̶ as an indicator. We set a target of
improving this recycling ratio by 5 points (51.7% →56.7%) in comparison with fiscal 2015 levels by fiscal 2025, and as a result of
recycling (primarily plastics) we achieved an improvement of 6.3 points (58.0%) in fiscal 2022. Going forward, we aim to achievea resource recycling ratio of 65% for all unneeded materials, and a resource recycling ratio of 50% for plastics by 2030, further
accelerating the efficient use of resources.

DNP awarded Japan DX Grand Prize (Special Prize) for demonstration
experiment for visualization of resource recycling
In June 2023, DNP was awarded the special prize in the SX/GX category of the Japan DX Grand Prize, which is run by
the Japan Digital Transformation Promotion Association, in recognition of its efforts in the Saitama Prefecture
Resource Recycling Visualization Demonstration Experiment. In this project, DNP ensured
traceability (i.e., management and tracking of information) from the collection to therecycling of used plastics from households, visualizing and communicating information on
CO 2 emissions generated in all processes. As a result of the experiment, we obtained
results indicating that communicating this data to consumers in an easily understandable
manner leads to a change in their awareness of recycling.
Going forward, DNP will continue to promote efficient use of resources by engaging invarious measures for resource recycling and enhancing communication strategies toencourage consumers to take action and reduce environmental impact.

Efforts to realize a society in harmony with nature
DNP recognizes that its business activities affect biodiversity, and believes that maintaining DNPʼs coexistence with nature isessential for the companyʼs sustainable growth. We strive to minimize our impact on biodiversity and maintain harmony with
regional ecosystems throughout the entire value chain to establish a society that is in harmony with nature. We have examined therelationship between our business activities and biodiversity, prioritized the key themes of raw material procurement (which isdependent on ecosystem services and greatly impacts biodiversity) and the creation of greenery areas on company premises (as aneffective use of land for contributing to the conservation of biodiversity), and are implementing specific activities to address them.

Ensure traceability in procurement of raw materials (paper)
Mono-material packaging materials use only a monomaterial, and are therefore easily recyclable and contributeto the recycling of resources. Utilizing our innovative
converting technologies, they offer high performance as abarrier to oxygen and water vapor and in blocking light.

Multifunctional insulation boxes offer a high degree of heatinsulation performance due to their high-barrier film, making it
possible to keep the internal temperature constant for an extended
period of time without using a power supply. They support safe andsecure logistics operations with temperature quality throughthermal design technology and temperature control using IT.

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

DNP is selected harmony with nature site certification-equivalent“30by30* Alliance for Biodiversity”
Super Eco-Products sales trends and ratio of their sales to gross sales
Sales(billion yen)

60

FY201980.0

FY202087.5

FY2021134.8

FY2022

163.1

5.7%
6.5 %
10.0 %

11.9 %
Ratio of Super
Eco-Products
to gross sales

DNP is redeveloping the Ichigaya district in Tokyo, home to its head
office, as a center for new value creation. We are growing“ Ichigaya-no-Mori” (The Ichigaya forest), a greenery area replicating
while imaging the wooded area of Musashino which once spread there.
By creating a new forest in an urban area as part of this city planning
project, we aim to achieve both the development of a business base andcontribution to the environment. The Ichigaya-no-Mori site has also been
selected as “harmony with nature site certification-equivalent ” under ademonstration project by the 30by30 Alliance for Biodiversity, which isrun by Japanʼs Ministry of the Environment (MOE). Together with thegrowth of the highly diverse Ichigaya-no-Mori site, DNP will continue
working to create new value originating in the Ichigaya district.
＊30by30: A global goal adopted at the 15th Conference of the Parties to the United Nations Biodiversity Conference (COP15) to protect and conserve at least
30% of land and sea areas in a healthy state by 2030

DNP Integrated Report 2023

61

4 ｜ MEDIUM-TERM MANAGEMENT PLAN: NON-FINANCIAL STRATEGY

Initiatives Across the Entire Supply Chain

Principal themes of CSR management

DNP is engaged in initiatives addressing the principal themes of CSR management throughout its supply chain to
help create a sustainable society. Our main activities and achievements in fiscal 2022 were as follows.

Business to Contribute to
SDGs Achievement

Fair Operating Practices

Human Rights and Labor

Environment

Responsible Procurement

Product Safety and Quality

Information Security

Corporate CitizenshipSupply chain
Company activities (manufacturing, distribution, etc.)

Product Safety and Quality• Strengthening of our management structure based on our Basic• Value creation through three strategies: business strategy,• Global production bases• Supplier surveys based on CSR Procurement Guidelines• Acquisition and strengthening of technology through open

• Quality management based on the DNP• Supplier survey on responsible minerals procurement• Technology and R&D investment in excess of 30 billion yen

Procurement

Responsible Procurement

Procurement Policy and CSR Procurement Guidelines

development strategy and intellectual property strategy
innovation

Average score: 82

per year: 32.4 billion yen

Smelters/refiners that are Conformant " in the Responsible Minerals
Assurance Process(RMAP) audit: 260• Patent rights: 12,143, design rights: 1,312,

trademark rights: 1,275

Strengthening intellectual capital

Initiatives for stakeholders

Human Rights and Labor

Fair Operating Practices

Information Security

Pages 50–53

Product Safety and Quality

Employees• Responsible procurement activities• Improving the percentage of female managers: 8.4%

•Partnership-building declaration

56 bases in Japan, 16 bases overseas

Group Quality Policy and DNP Group
Product Safety Policy• Rigorous management based on the
DNP Groupʼs Basic Policy on Information

Security
Ratio of compliance assessments
conducted: 100 %Privacy mark / ISO/IEC27001
certification obtained• Corporate ethics and compliance(DNP non-consolidated)• Improving the percentage of males taking childcare leave: 83.6 %(DNP non-consolidated)• Improving the ratio of employees with disabilities: 2.6 %(DNP non-consolidated)• Improving the ratio of annual paid leave taken: 53.3 %• Reduction in frequency rate of lost workday injuries: 0.3 %Strengthening of human capitalUse, disposal and recycling of products

Business to Contribute to SDGs Achievement

Businesses that contribute to achieving the SDGs utilizing
Printing & Information core values
Focus business strategy P14-17• Contributing to a sustainable society where people can live safe, secure and healthy lives• Securely and seamlessly connecting real and digital, contributing to the evolution of an information society

Creating value primarily in focus business areas
Digital interfaces

Semiconductors

Content & XR communication

P18-27

Mobility and industrial high-performance materials

Medical & healthcare

Providing products and services with a top market share both in Japan and overseas
P4-5

Corporate CitizenshipSuppliers and outsourcing contractors
Cooperating suppliers: 180
Suppliers and outsourcing contractors participating in engagement
activities: 22

Information Security

education
Ratio of Autonomous Corporate Ethics
Training conducted:
100 % (107 organizations)• Participation rate of information

security education and training:
100 % (Approx. 41,000 persons)Client companies and consumers

Local communities• Number of serious accidents caused by• Social contribution activity programs• Percentage of newly developed products• Menu items at employee cafeteria

our products: 0 accident

undergoing product safety and risk assessment:

100 % (330 products)• Percentage of quality system inspections carried out:

100 % (51 units and companies)

conducted: 58, external participants: 1,610

including a donation
Total of dishes: 38,912,
amount of donations: 1,945,600 JPY*Including refugee support menu items

Pages 44–49

Enhancing the internal whistle-blower systems

Providing dishes with fundraising for refugee support at employee cafeterias

In accordance with the Whistleblower Protection Act, DNP established the Open Door Room in 2002 as a contact point for employees for consultation and reporting(whistleblowing) of matters relating to corporate ethics. Also in 2015, we established an external contact point for consultation and whistleblowing via an attorney ʼs office.
In fiscal 2022, we expanded the scope of coverage for the Supplier Hotline which was established in 2009 as a contact point for whistleblowing from outside thecompany, and renamed it the Compliance Hotline. Through the operation of these systems, we will continue working to ensure fairer, more equitable corporate activities.

DNP engages in a variety of corporate citizenship activities with employee participation, to help realize a society in which no one is left behind. In fiscal 2022, we beganproviding refugee support menu items that include donations as part of the fee at employee cafeterias nationwide, to support more than 100 million refugees around the world.
Coinciding with World Refugee Day and Human Rights Week, dishes were served in honor of Ukraine, Syria and Myanmar. A total of 3,544 meals were eaten, and donations
amounting to approximately 180,000 yen will be used for UNHCR's refugee relief activities, along with company donations (a total of 50 million yen over a period of five years).

Initiatives for environment

Environment• Procurement papers conforming to DNP Group Guidelines for

Procurement of Paper for Printing and Converting
Percentage of key suppliers that have obtained the conformancecertificate: 94%• Reduction of GHG emissions (Scope 3) in cooperation with

suppliers• Reduction of GHG emissions (Scope 1 and 2) 36.5 %reduction compared to FY2015 levels• Improvement in resource recycling ratio improved from

51.7% in FY2015 to 58.0 %• Maintenance of performance at 70% or below environmental

laws and regulations standard levels
Number of cases exceeding regulation levels: 2

Initiatives for Environment• Calculation and reduction of CO 2

emissions and implementation of LCA forthe entire supply chain• Creating products and services comply

with guidelines for developing eco-friendly
products and services
Ratio of Super Eco-Products in total sales:
11.8 %

Eco-friendly design team of DNP
In October 2022, we launched a cross-divisional eco-friendly design team that combines DNPʼs diverse
technologies and know-how to contribute to resolving environment-related issues at companies. Going forward,
we will provide companies with services aimed at solving various issues, with the aim of achieving long-term
harmonious coexistence between the environment and businesses.

Pages 56-61

Initiatives for responsible minerals procurement
DNP has been engaged in responsible procurement initiatives since2006, to enhance sustainability throughout the supply chain. In
particular, because of concerns that certain mineral resources containedin raw materials may cause serious human rights violations in the mining
process, we have stipulated “responsible mineral procurement ” as oneof the matters to be complied with in the DNP Group CSR Procurement
Guidelines, and established a management system based on the OECD
Due Diligence Guidance for Responsible Supply Chains of Minerals from
Conflict-Affected and High-Risk Areas ̶ an international standard for
responsible procurement.
In fiscal 2022, we conducted a regular survey of our major suppliers
using the RMI＊1 (Responsible Minerals Initiative) RMAP＊2 (Responsible
62

Minerals Assurance Process). We identified 414 smelters/refiners for tin,tantalum, tungsten, gold, cobalt and mica contained in DNP ʼs raw
materials, and confirmed that 260 of them were Conformant certified. We
also assess human rights risks based on DNP ʼs own risk management
framework and standards. At the same time, we will continue to conductdetailed assessments of smelters/refiners with potential risks and strive
to prevent and improve upon them. For aluminum, which is a raw material
for DNP ʼs main products, we have launched new initiatives to identify andevaluate smelters/refiners, etc. By holding regular discussions with therelevant suppliers, we are conducting engagement initiatives andevaluating the eight smelters/refiners identified to confirm that no
significant human rights risks are found.

As global human rights due diligence legislation and the strengtheningof risk management related to mineral resources progresses, DNP is
engaging in further initiatives such as creating a management systemand conducting supplier surveys to introduce similar management
measures for 16 minerals including lithium, nickel and copper.
In fiscal 2023 and beyond, we will continue to strengthen our
response to human rights risks in our supply chain, with a primary focus
on mineral resources.
*1 RMI: An organization that spearheads the responsible procurement of minerals. More than 400

companies/organizations from around the world are members.
*2 RMAP: A program that verifies compliance with responsible minerals procurement in conjunction withthe management system and procurement practices of smelters and refineries based on theevaluations of independent third parties.
*3 CAHRAs: Conflict-Affected and High-Risk Areas.

Risk assessment results for six conflict minerals(tin, tantalum, tungsten, gold, cobalt and mica)
Number of responding companies

171

Number of smelters/refiners subject to risk assessments

414

Number of smelters/refiners that are either “Conformant” or “Active”
in the RMAP audit or are not located within DNP CAHRAs＊3 (1)397

Number of smelters/refiners under (1) with “ Conformant ” RMAP
audit status260

DNP Integrated Report 2023

63

5

MANAGEMENT STRUCTURE

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

Brief personal history, title, responsibilities
May 1963
Jul. 1967
Jul. 1970
Jan. 1972

Joined the Company
Director of the Company
Managing Director of the Company
Senior Managing Director of the Company

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

Masafumi
Kuroyanagi
Managing Director(May 4, 1960)

President(Sep. 18, 1964)

Brief personal history, title, responsibilities
Apr. 1987
Mar. 1995
Jun. 2001
Jun. 2003
Jun. 2005

Joined The Fuji Bank Ltd.
Joined the Company
Director of the Company
Managing Director of the Company
Senior Managing Director of the Company

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

Toru
MiyakeManaging Director(Feb. 5, 1958)

Senior Managing Director(Jun. 11, 1954)

Brief personal history, title, responsibilities
Apr. 1978 Joined the Company
May 1991 Chief Financial Officer of Dai Nippon Printing Co.
(Hong Kong) Ltd.
Jul. 2003 General Manager of Personnel Dept. of the Company
Jun. 2010 Corporate Officer (Yakuin), General Manager of
Personnel Dept. of the Company
Jun. 2018 Managing Director of the Company
Jun. 2020 Senior Managing Director of the Company

Jun. 2021 Senior Managing Director (Daihyo
Torishimariyaku Senmu) of the Company
Apr. 2023 Senior Managing Director (Daihyo
Torishimariyaku Senmu), managing
Information and Communications Sector(currently Smart Communications Sector),
Human Capital Sector and Corporate Sector of
the Company

MinakoMiyamaDirector(Jan. 15, 1962)

Senior Managing Director(Sep. 10, 1952)

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

Jun. 2017 Senior Executive Corporate Officer, in charge of Living
Spaces Operations, Mobility Operations and HighPerformance Materials Operations of the Company
Jun. 2021 Senior Managing Director (Daihyo Torishimariyaku
Senmu), managing R&D and Engineering Management
Sector, Lifestyle and Industrial Supplies Sector(currently Life & Healthcare Sector) and Electronics
Sector of the Company

Tsukasa
Miyajima
Director(Aug. 23, 1950)

Managing Director(Jul. 8, 1957)

Brief personal history, title, responsibilities
Apr. 1981 Joined the Company
Jan. 1997 Finance Manager of PT DNP Indonesia
Jun. 2015 Corporate Officer (Yakuin), General Manager of Strategic
Business Planning Dept. of the Company
Apr. 2016 Director of Maruzen CHI Holdings Co., Ltd.
Jun. 2018 Senior Corporate Officer, in charge of Strategic Business Planning& Development Div. of the Company
Statutory Auditor of Nihon Unisys, Ltd. (currently BIPROGY Inc.) (current)

Jun. 2020 Managing Director, in charge ofStrategic Business Planning &Development Div. and Value Creation &Promotion Div. of the Company
Apr. 2023 Managing Director, in charge of IR and
Public Relations Div., Corporate
Administration Dept., Legal Affairs Dept.
and Internal Auditing Div. of the Company

Qualifications as a Director
Mr. Hirofumi Hashimoto is qualified to appropriately supervise the entire group as well as to realize the strengthen
IR strategy and compliance, etc., toward business growth and corporate value improvement, based on his
extensive management experience in the DNP Group and his achievements in the business planning department of
the Company, including his role as chief financial officer at an overseas subsidiary.

64

Brief personal history, title, responsibilities
Apr. 1986 Joined the Company
Apr. 2005 General Manager of VR Planning andDevelopment Office, DB Div., C&I
Operations of the Company
Jul. 2014 General Manager of Recruiting andTraining Dept. of the Company

Jun. 2018 Corporate Officer, General Manager of Recruiting and Training
Dept., and Diversity Promotion Dept. of the Company
Jun. 2021 Director of the Company
Oct. 2021 Director, in charge of Recruiting and Training Dept. andDiversity & Inclusion Promotion Dept. of the Company
Jun. 2022 Outside Director of TOKAI RIKA CO., LTD. (current)

Brief personal history, title, responsibilities and status of important concurrent offices
Apr. 1990 Professor of Keio University, Faculty of Law
Apr. 2003 Registered as an attorney at law at the Daini
Tokyo Bar Association (current)
Jul. 2012 Outside Director of Hulic Co., Ltd. (current)
Jun. 2014 Director of the Company, Outside Statutory
Auditor of Mikuni Corporation (current)

Apr. 2016

Emeritus Professor of Keio University (current),
Professor of Asahi University, Faculty of Law and
Graduate School of Law (current)
Jun. 2018 Outside Statutory Auditor of Daifuku Co., Ltd. (current)

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

Qualifications as a Director
Mr. Masato Yamaguchi is qualified to appropriately supervise the entire group as well as to realize businessdevelopment and other activities toward business growth and corporate value improvement, based on his experience
as a person responsible for technology, research and development, and manufacturing of display products, etc., aswell as new business development using ICT, having extensive management experience in the DNP Group.

Hirofumi
HashimotoJun. 2018 Corporate Officer, General Manager of Purchasing Div.
of the Company
Jun. 2020 Senior Corporate Officer, in charge of Purchasing Div.
of the Company
Jun. 2023 Managing Director, in charge of Purchasing Div.
of the Company

Qualifications as a Director
Ms. Minako Miyama is qualified to appropriately supervise the entire group as well as to realize humanresources development strategies, etc., toward business growth and corporate value improvement,
since she has a proven track record as the Companyʼs first female Corporate Officer, leading the way indeveloping human resources and ensuring diversity, in addition to experience in the research, planningand development segments.

Qualifications as a Director
Mr. Kenji Miya is qualified to appropriately supervise the entire group as well as to realize the humanresources and labor strategies, etc. toward business growth and corporate value improvement, based on his
extensive experience as a management executive in the DNP Group, including as a chief financial officer at
an overseas subsidiary.

MasatoYamaguchi

Brief personal history, title, responsibilities
Apr. 1982 Joined the Company
Oct. 2005 General Manager of R&D Div., Display
Components Operations of the Company
Jun. 2011 General Manager of Corporate R&D Div.
of the Company

Qualifications as a Director
Mr. Toru Miyake is qualified to appropriately supervise the entire group as well as to realize thestrengthen R&D and supply chain, etc., toward business growth and corporate value improvement,
based on his experience and high vision, having served as the head of research and development at theheadquarters and business divisions.

Qualifications as a Director
Mr. Yoshinari Kitajima is qualified to appropriately supervise the entire group as well as to realize thegroup strategy toward sustainable business growth and corporate value improvement, based on his
extensive experience as a management executive in the DNP Group.

Kenji
Miya

Apr. 2019 Senior Corporate Officer, in charge of Finance &Accounting Div. of the Company
Jun. 2021 Managing Director, in charge of Finance &Accounting Div. of the Company

Qualifications as a Director
Mr. Masafumi Kuroyanagi is qualified to appropriately supervise the entire group as well as to realize
financial strategies and capital policy, etc., toward business growth and corporate value improvement,
based on his considerable management experience in the DNP Group and knowledge of all aspects offinancial accounting, including account settlement and taxation.

Qualifications as a Director
Mr. Yoshitoshi Kitajima is qualified to appropriately supervise the entire group, as he has extensive
knowledge of all aspects of management, as well as a wealth of experience and accomplishments,
having led the DNP Group's performance improvement as President of the Company since 1979.

Yoshinari
Kitajima

Brief personal history, title, responsibilities
Apr. 1983 Joined the Company
Apr. 2004 General Manager of Finance & Accounting 1st
Dept., Finance & Accounting Div. of the Company
Jun. 2010 President of DNP Total Process Warabi Co., Ltd.
Jun. 2015 Corporate Officer (Yakuin), General Manager ofFinance & Accounting Div. of the Company

Kazuyuki
Sasajima
Director(Aug. 8, 1953)

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

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

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

DNP Integrated Report 2023

65

5 ｜ MANAGEMENT STRUCTURE
Composition of the Companyʼs Board of Directors (As of June 29, 2023)

Board of Directors

Outside Directors

Internal Statutory
Auditors

4 persons

YoshiakiTamura2 personsBrief personal history, title, responsibilities and status of important concurrent offices
Apr. 1979 Joined Asahi Glass Co., Ltd. (currently AGC Inc.)
Mar. 2013 Representative Director, Executive Vice President,
Overall business management, GM of Technology
General Division, Deputy leader of AGC Group
Improvement Activities of Asahi Glass Co., Ltd.

Director(Oct. 3, 1954)

Mar. 2014 Executive Vice President, President of Glass
Company of Asahi Glass Co., Ltd.
Mar. 2017 Executive Fellow of Asahi Glass Co., Ltd.
Mar. 2018 Outside Director of DIC Corporation (current)
Jun. 2022 Director of the Company

Directors

Statutory Auditors

12 persons

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

HiroshiShirakawaDirector(Dec. 22, 1954)

Apr. 2015 Managing Executive Officer, Chief of Yokohama
Branch of TAISEI CORPORATION
Jun. 2019 Senior Managing Executive Officer, Member of theBoard, Chief of Marketing & Sales (Building
Construction) Division II of TAISEI CORPORATION
Jun. 2022 Director of the Company

Corporate
management,
businessstrategy

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

Corporate Officers

Ryuji Minemura

Sakae Hikita

Ryota Chiba

Motoharu Kitajima

Kazuhisa Kobayashi

Satoru Inoue

Go Miyazaki

Mitsuru Tsuchiya

Naohiro Nishizawa

Toshiki Sugimoto

Kazuo Murakami

Tatsuya Hisakura
Kazuhisa Morigayama＊1

Directors

Statutory Auditors and Corporate Officers
Senior Executive Corporate Officers

Yasuyoshi Ichikawa＊1

Kazuhiko Sugita
Yoshiki Numano
Osamu Nakamura
Mitsuru Iida
Takahito Kanazawa

OutsideNobuyuki Asaba

Minoru Nakanishi
Hiroyuki Sone
Yasuyuki Tani
Ariyoshi Matsumura
Mitsue Sako
Nobuyuki Tomizawa
Hideto Sakata

Statutory Auditors

Taeko Ishii＊1

Takuya Goto

OutsideSenior Corporate Officers(of which 1 Female Statutory Auditor)

ESG,
diversity

Financial/management
accounting,capital policy
initiatives

HR/labor,
human resource
development

Legal affairs,
compliance,risk
management

OverseasbusinessIT
DX◎

Yoshinari Kitajima◎◎

Kenji Miya◎◎

Masato Yamaguchi◎

Hirofumi Hashimoto◎○

Masafumi Kuroyanagi◎◎

Toru Miyake○○

Minako Miyama

○

◎

○

◎

○

○

○

○

○

◎

◎

○

○

○
◎

◎
○

○

◎

○

○

◎
◎

Kazuyuki Sasajima○

Yoshiaki Tamura＊◎

Hiroshi Shirakawa＊◎

Ryuji Minemura○

Tatsuya Hisakura○◎

Kazuhisa Morigayama○◎

Taeko Ishii

R&D,
new business○Yoshitoshi Kitajima

Tsukasa Miyajima＊

Hiroyuki Matsumura
Statutory Auditor(of which 1 Female Director)

3 persons

Background of the Companyʼs Directors and Statutory Auditors

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

Standing Statutory Auditor

OutsideStatutory Auditors

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

◎

◎

○

◎

○

○

○
◎

◎

Yasuyoshi Ichikawa

◎

○
○

○

○

○
○

*Advisory Committee Member

Background of the Companyʼs directors and statutory auditors*1 Outside Statutory Auditors

66

The Companyʼs Board of Directors and the Board of Statutory Auditors consist of members with diverse backgrounds to cover the experience and expertise (skills) that are considered important in promoting the new
Medium-term Management Plan. “○” indicates that the individual possesses the background, and “◎” indicates that the individual is highly expected to demonstrate his/her competence in the field.

DNP Integrated Report 2023

67

5 ｜ MANAGEMENT STRUCTURE

Corporate Governance

DNPʼs corporate governance system

DNP engages in business activities that provide new value in the long term, with the aim of creating a sustainable,
better society and well-being lives. To continue providing value, we believe that we must improve our corporate
value and continue to be a company that is always trusted by all stakeholders. We regard the enhancement ofcorporate governance as an important management issue and are working to increase the speed and accuracy ofdecision-making, maintain smooth business executions based on decisions made, and build and operate a systemof overseeing and auditing business executions.

DNP has adopted the organizational design of a company
with a Board of Statutory Auditors, with independent outside
directors who participate in management decision-making tofurther enhance swift and accurate decision-making, smooth
performance of duties based on the decisions made andappropriate supervisory functions. We have also establisheda system with 25 corporate officers appointed by the Boardof Directors, allowing the performance of duties decided by
the Board of Directors with responsibility and authority.

Board of Directors and Board of Statutory Auditors• The Companyʼs Board of Directors is structured to enable

Overview of DNPʼs Corporate Governance
DNP is working to steadily grow its businesses over the
medium and long term, based on its corporate philosophy,“Connect people and society and provide new value.” We
believe that boldly addressing the challenges of various
business opportunities through sound entrepreneurship andearning the trust of various stakeholders is essential for
improving the competitiveness of our business in the future,
and are working to improve corporate governance, including
our internal control systems. We strive to make swift andaccurate management decisions, maintain smooth businessexecutions based on decisions made, build and operate asystem of overseeing and auditing the business executions,and provide thorough training and education to increase
employee awareness regarding legal compliance.
In recent years in particular, risks (factors contributing tochange, including the rapid change of the environment andsocioeconomic conditions) that may affect our business are
becoming increasingly diverse. In response, we are working

to strengthen the process for appropriately assessing thoserisks, applying our assessments in our medium- to long-term
management strategies and converting the risks into business
opportunities. In March 2022, the Sustainability Committee
headed by the president was restructured to accelerate
efforts to strengthen this process.
The Sustainability Committee takes a central role andcoordinates with the BCM Promotion Committee, which works
to ensure the safety of employees and maintain continuity of
production activities even in the event of emergencies suchas natural disasters, and the Corporate Ethics Committee,
which seeks to reduce risks by increasing employee
awareness with regard to compliance. In this way, we haveestablished a system that covers company-wide risks, inwhich material issues in management are verified regularly
and discussed at Management Committee and Board of
Directors meetings to appropriately reflect risks in our
medium- to long-term management strategy.

Structural diagram of DNPʼs corporate governance and internal control system• The Companyʼs Board of Statutory Auditors consists of five (5)members (including three (3) standing statutory auditors) withdiverse backgrounds. Each statutory auditor conducts auditsof the execution of duties by directors in accordance with theauditing standards and assignments determined by the Boardof Statutory Auditors and requests reports on the executionof duties from directors, corporate officers, and others asnecessary. Each statutory auditor attends all meetings of theBoard of Directors and makes necessary comments on
agenda items. Outside statutory auditors enhance the validityof both accounting audits and operational audits, and fulfill
the function of supervising management.

General Meeting of Shareholders
Board of Directors
Consulting

Consulting

Recommendation

Management Committee

Advisory Committee

Reporting

Regularreporting

Representative Directors

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

Sustainability Committee

Corporate
Officers inchargeCheck(Autonomous
implementation,
inspection, review,
improvement)

Guidance
Training• Progress of operations in line with the Medium-termManagement Plan
• Formulation of the Basic Management Policy• Formulation of the new Medium-term Management Plan, etc.

Sustainability• Formulation of the Human Capital Policy• Revision of the DNP Group Environmental Policy• Statues of Sustainability Committee activities, etc.

Dialogue withshareholders• Holding of financial results briefings, ESG briefings, etc.
• Status of dialogues with institutional investors, etc.

Governance• Key personnel, organizational units and remuneration• Evaluation of the effectiveness of the Board of Directors• Status of internal audits, etc.

Other

• Individual investments, etc.

• The Company has four (4) outside directors and three (3)outside statutory auditors, all of whom are independent
directors or statutory auditors who meet the“independence standards” stipulated by the Tokyo Stock
Exchange and the Company. We believe that independent
directors and statutory auditors ensure transparency ofmanagement and protect the interests of generalshareholders by speaking out on agenda items at meetingsof the Board of Directors from a standpoint independent ofmanagement, based on their various specialized
knowledge and experience.

BCM Promotion Committee(Employee compliance promotion)

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

Operational
support

Audit
Guidance

Information Disclosure Committee

Auditing Department

Audit

BCM Promotion Committee Office

ReportingAssistance

Information Security Committee
Quality Assurance & Product Safety Committee

Main divisions in charge of various laws and regulations

Audit Unit

Group
companies(Management, mitigation of company-wide risks)

Head officeBusiness
units

Management
strategy

Sustainability Committee Office(Business continuity crisis measures for natural disasters, etc.)

Audit

Operating units

Accounting Auditors

ReportingMain items discussed at Board of Directors meetings
during the fiscal year ended March 2023

(Board of) Statutory Auditors

Audit

directors with specialized knowledge and experience in awide range of business fields to participate in management
decision-making aimed at realizing our corporate
philosophy to carry out their duties with responsibility andauthority and to supervise the execution of duties by otherdirectors. In addition to supervising the Companyʼs internal
directors, outside directors also contribute to theimprovement of transparency and accountability of theBoard of Directors through insightful management advice.
In principle, the Board of Directors is held once amonth, with corporate officers attending as rapporteurs
when necessary, to deliberate and decide on importantmanagement issues. The criteria for agenda items to besubmitted to the Board of Directors are clarified in the
Board of Directors Regulations, which were established incompliance with laws and ordinances and the Articles ofIncorporation. In terms of other decision-making andbusiness execution, the directors or corporate officers incharge of each basic organization delegate appropriate
authority to the head of the organization to which theBoard of Directors has delegated, in accordance withorganizational rules, etc., to improve efficiency.

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

Audit
Guidance
Reporting
Coordination

68

Outside Director

Tsukasa Miyajima

Outside Director

Kazuyuki Sasajima

Outside Director

Yoshiaki Tamura

Outside Director

Hiroshi Shirakawa

Outside Statutory Auditor

Kazuhisa Morigayama

Outside Statutory Auditor

Taeko Ishii

Outside Statutory Auditor

Yasuyoshi Ichikawa

DNP Integrated Report 2023

69

5 ｜ MANAGEMENT STRUCTURE

Management Committee

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

Advisory Committee
As part of our efforts to strengthen the supervisory function of
the Board of Directors, we have established an Advisory
Committee consisting of independent outside directors and/or
outside statutory auditors to ensure transparency and objectivityof procedures and decision-making processes relating todecisions on key management issues including the nomination
and remuneration of the Companyʼs directors and corporate
officers. In the fiscal year under review, the Advisory Committee
consisted of three (3) outside commissioners (Director Miyajima,
Director Tamura and Director Shirakawa) and deliberated on thepolicy and amount of remuneration for directors and corporate
officers as well as the skills of candidates for directors tosupervise the management of the Company.

Items deliberated by the Advisory Committee during
the fiscal year ended March 2023

Since the introduction and application of Japan's Corporate
Governance Code in 2015, we have been working to enhance

Improvements to the corporate governance system
Board of Directors (directors and statutory auditors)• Appointment of corporate officers• Basic policy on remuneration for directors and corporate officers,

introduction of a stock-based remuneration system and individual
remuneration• Status of measures to train next-generation management leadersand managers• State of consideration of the Basic Management Policy and MediumTerm Management Plan

Overall (of which female)

F Y201623 persons（ 0 person ）F Y2023

17persons（ 2 persons ）Evaluation of the effectiveness of the Board of Directors overall
We have been evaluating the overall effectiveness of the Boardof Directors around April each year since the enforcement ofJapanʼs Corporate Governance Code in 2015 as an opportunity
to receive frank opinions from the Board members about theactivities of the Board of Directors. We conduct a questionnaire
survey consisting of several dozen questions on the following
large items (on a 1-to-3 scale and open-ended questions)which all directors and statutory auditors answer, analyze theresult and present the issues to be addressed at a meeting ofLarge items in the questionnaire
12Explain the purpose of the survey at the Boardof Directorsʼ meeting in March

Supervisory function of the Boardof Directors
Appointment and compensation
system of directors

3

Operation of the Board of Directors

4

Relationship with shareholders, etc.

5

Support and collaborate withoutside directors/statutory auditors

the Board of Directors based on the outside directorsʼ opinions
regarding the results of the analysis.
The survey is revised as appropriate, based on social
trends and the opinions of external organizations, to ensure
objectivity. In the past, we have also interviewed the directors
by external parties as appropriate to further examine thesurvey results. We are improving all of the functions of theBoard of Directors, including its supervisory function, throughthe ongoing series of steps in this process.

Examine questionsin the survey(opinions of external parties)

23

2

Independent directors

5 persons518（ 21.7%）

7persons

15

Corporate officers（ 41.2%）7

10Overall (of which female)

22 persons（ 0 person ）25 persons（ 1person ）

22

1
24

Major initiatives so far

Supervisory function of
the Board of Directors• Addition of outside directors• Appointment of a female internal director• Appointment of a female outside statutory auditor• Revision of Group governance system• Regular management of risks and identification of business opportunities, led by the Sustainability

Committee, etc.

Distribute questionnaires

Report the status of issues to be addressed andimprovements made and future issues to thechairperson of the Board of Directors andoutside directors/statutory auditors

Secretariat of theBoard of Directors
collects and analyzes
questionnaires

Appointment and compensation
system of directors• Establishment of the Advisory Committee and expansion of membership• Development and announcement of skill matrix

Operation of
the Board of Directors• Establishment of the secretariat of the Board of Directors• Organization of agenda items to be submitted• Prior explanations for outside directors/statutory auditors on the agenda of the Board of Directors, etc.

Present the result of effectiveness evaluation at
the Board of Directors meeting in May
Discuss specific details about issues to beaddressed in outside directors/statutory
auditors meetings, etc.

• Reporting of the results of the exercise of voting rights at the Ordinary General Meeting of Shareholders

Relationship withshareholders, etc.

In the eighth effectiveness evaluation conducted in 2023, wechecked the status of deliberations at the Board of Directors
between April 2022 and March 2023 (12 sessions) andreconfirmed the status of items being addressed as
improvement issues so far. Questions were added concerning
the self-evaluation of each director and statutory auditor
regarding the deliberations of the Board of Directors, and thefree response statement column was also improved. As a resultof an analysis (by the Boardʼs administrative office) of theeffectiveness of the questionnaire answered by all directors andstatutory auditors, it was confirmed that the effectiveness of
the Board of Directors has been maintained, and that
improvements were made with regard to the issues identified inand the status of SR (Shareholder Relations) activities to the Board of Directors• Holding briefings (such as financial results briefings) for investors and giving feedback to theBoard of Directors• Feedback of opinions from shareholders, etc., including daily IR (Investor Relations) activities, etc.

■ Results for the fiscal year ended March 2023

70

the effectiveness of the Board of Directors based on the
results of effectiveness evaluations.

the seventh effectiveness evaluation. To further enhance
effectiveness, the following issues to be addressed wereshared at the Board of Directors meeting in May 2023.
1

2Further measures for progress at the Board of Directors
meetings (standardization of meeting material formats tosecure time for deliberations and enhancement of content
of prior explanations given before meetings, etc.)
Enhancing communication between management andoutside officers to enhance the effectiveness of the Boardof Directors (status of DNPʼs business operations andcontent of dialogues with shareholders, etc.)

Support and cooperation ofoutside directors/
statutory auditors• Distribution in advance of materials concerning agenda items submitted to the Board of Directors to

outside directors/statutory auditors• Holding meetings of outside directors/statutory auditors• Factory visits by outside directors/statutory auditors• Enhancing provision of information to outside directors/statutory auditors, etc.

DNP Integrated Report 2023

71

5 ｜ MANAGEMENT STRUCTURE

Dialogue of Outside Directors

Efforts of the Board of Directors to
Increase DNPʼs Corporate Value

Yoshiaki Tamura, Outside Director

Hiroshi Shirakawa, Outside Director

Mr. Tamura has held key positions at Asahi Glass Co., Ltd., (currently AGC Inc.) including
Representative Director and Executive Vice President (overall business management, GM
of Technology General Division and Deputy leader of AGC Group Improvement Activities)
in 2013, Executive Vice President and President of Glass Company in 2014 andExecutive Fellow in 2017. He was appointed as a director of DNP in June 2022, and has
also served as a member of the Advisory Committee since June 2023.

Mr. Shirakawa has held key positions at TAISEI CORPORATION, including Trustee andGeneral Manager, Corporate Planning Department, Corporate Planning Office in 2011,
Executive Officer, Deputy Chief of Corporate Planning Office and General Manager, Corporate
Planning Department in 2012, Managing Executive Officer, Chief of Yokohama Branch in2015 and Senior Managing Executive Officer, Member of the Board and Chief of Marketing &Sales (Building Construction) Division II in 2019. He was appointed as a director of DNP in
June 2022, and has also served as a member of the Advisory Committee since June 2023.

Reflecting on the past year since
appointment as directors
Tamura: I had long recognized DNP as a company that was
engaged in a wide range of business operations, but when I
became an outside director, I was surprised to learn ̶ in theprocess of carrying out my duties ̶ that DNP was engaged ina wider range of businesses than I had realized. When acompany is engaged in such a diverse range of businesses,
there is a possibility that the direction in which it should headas an organization may not be properly decided, but I feelthat DNP has a certain DNA that has been passed down
throughout its 150-year history since its founding, developing
printing technologies that process information, and taking onchallenges in new fields. While DNPʼs employees today arestill active in various business fields, they all have a common
understanding of the direction in which DNP should beheading (now defined in its current corporate brand statement
as “creating future standards” ), based on the basic printing
and information technologies cultivated so far. I believe that
this common understanding has spread through President

72

Kitajimaʼs continuous efforts to communicate information toemployees through various media, such as the internal
website and internal newsletter.
Shirakawa: I feel the same way. Although at first glance thebrand statement of “creating future standards” may beviewed as making it difficult to understand what it is that weare aiming for, there is a kind of blank margin that allows
each employee to think and act in their own field and in fact I
feel that DNP employees think about that margin as they
carry out their duties. I think itʼs a very good brandstatement.
Also, because DNP is engaged in a wide range ofbusinesses, the agenda items submitted to the Board of
Directors are very diverse. When I was first appointed, I foundit hard to understand the content of some of the agenda
items made at Board of Directors meetings, but I deepened
my understanding of DNP through various opportunities suchas meetings with executive divisions, in addition to receiving
prior explanations about the background of the proposals.
This is also important in fulfilling our duties as outside
directors, to supervise management from an objective
standpoint.
Tamura: As Mr. Shirakawa said, we are very grateful for theprior explanation of the agenda items for Board of Directors
meetings. Corporate officer class personnel highlightimportant points and explain them to us directly, making it
easy to ask questions on the spot and helping us tounderstand. This enables us to attend Board of Directors
meetings with a deeper understanding of agenda items inadvance, and I feel that this has enabled us to offer
appropriate advice and recommendations at meetings basedon our experience.

Working to further improve the efficiency of
the Board of Directors
Shirakawa: I think that DNPʼs Board of Directors has good
discussions on the agenda items that are put forward. On theother hand, perhaps because there is a strong desire toprovide sufficient information to outside directors andstatutory auditors, there are situations where there is quite
an overlap between the prior explanations and those given at
the Board of Directors meetings, and I feel that things would
be even better if there was a little more time for discussion.
Based on the results of this yearʼs evaluation of theeffectiveness of the Board of Directors, we will work on
devising operational measures to secure more time fordeliberation, and I hope that this will lead to an improvement.
Tamura: I think the same situation exists at other companies,
but there is a tendency for internal directors to answer
questions from outside directors about individual agenda
items at the Board of Directors meetings. I think that it isimportant to set aside time for discussions on major themesthat are separate from individual projects ̶ such as therecognition of management issues in light of social changes
and state of response to them, as with the new Medium-termManagement Plan ̶ so that internal directors who are wellacquainted with DNPʼs business operations and outside
directors with objective perspectives can exchange opinions
based on their respective knowledge, and the Board of
Directors can show the companyʼs major direction to thoseboth inside and outside the company. I think that this isimportant, not only to provide appropriate information toshareholders and other stakeholders, but also to enhance
DNPʼs corporate value.
Shirakawa: I agree. Individual agenda items submitted at theBoard of Directors meetings have already been discussed
within the company and deliberated by the Management
Committee, so I can understand the situation where it can bedifficult for internal directors to express their opinions after
that, having experienced the role of being an internal director
myself in the past. However, DNPʼs Board of Directors
consists of executives with diverse backgrounds, so I think it
would still be useful to discuss these items regardless. Thereis also the option of setting themes for discussion without
seeking conclusions.

Discussions for the formulation of theMedium-term Management Planand holding discussions at the Board of Directors.
Tamura: About discussions on the formulation of the Plan, I
have the same impression as Mr. Shirakawa. It goes without
saying that the most important thing is not simply to create a
Medium-term Management Plan but to execute it properly, in
accordance with the plan. Based on our common
understanding of “creating future standards,” the Board of
Directors will monitor and support the steady implementationof the Medium-term Management Plan and the implementationof other initiatives to enhance DNPʼs corporate value, while
checking progress based on the KPIs (Key Performance
Indicators) we have set and reviewing the plan as necessary.

Roles to fulfill going forward
Tamura: The current state of society ̶ with the use of AI andthe changing values such as the awareness oftime-performance ̶ was unimaginable in the past, and I thinkthat the kind of future and business environment that we are
currently envisaging now will also change significantly. I am
excited to see what kind of “ future standards” DNP will
create. I believe that it will be necessary to launch new
businesses and expand globally, but I would like to contributeto the continued development of DNP by providing appropriate
advice on the challenges DNP faces by leveraging theknowledge of product development and global expansion I
accumulated in my previous job, from an objective standpoint.
Shirakawa: DNP has a history of growing by reviewing andtransforming its business portfolio while responding to socialchanges. Now the current Board of Directors must show the“ future” that the company is aiming for and the direction inwhich it is heading. In addition to checking the progress of theMedium-Term Management Plan, I will also continue to makerecommendations to enhance DNPʼs corporate value from astandpoint that is independent of management, utilizing theknowledge of corporate planning, finance and management
accounting I gained in my previous jobs to review the companyʼsbusiness portfolio and discuss management issues.

Shirakawa: From the second half of 2022, when I took on
my post as a director, we checked the progress of theprevious Medium-term Management Plan, and the Board of
Directors also discussed a new Medium-term Management
Plan for FY2023 through FY2025. In my previous job, too, I
was involved in drafting medium-term management plans, so
I can really understand the situation in which the executiveside has repeatedly discussed and examined the formulationof the new plan.
At the Board of Directors, discussions were held instages, including the basic management policy, the initialframework of the Medium-term Management Plan, the outlineof the plan (report at the formulation stage) and the formal
decision. From the standpoint of an outside director, I feelthat it was very easy for us to advance discussions, with theflow of deliberations shifting gradually from the broad
direction that the company should take to more specificdetails. I think it was good that we were able to take theproper steps, engaging in dialogues with people in the market
DNP Integrated Report 2023

73

5 ｜ MANAGEMENT STRUCTURE

Compensation paid to directors and statutory auditors
Matters concerning resolutions at the General Meeting of Shareholders regarding compensation paid to directors
and statutory auditors
Compensation for directors and statutory auditors is calculated within the limit for compensation as determined by a resolution
at the General Meeting of Shareholders.
Date for resolution
June 29, 2016
June 29, 2022
June 28, 2007

Number ofmembers＊

Details of resolution【Compensation for directors】Within an annual amount of 1.4 billion yen

12(Compensation for outside directors shall be within an annual amount of 80 million yen).

【Stock compensation】Directors are granted claims to monetary compensation within an annual amount of up to 300 million

8

yen per year, and up to 300,000 stocks of restricted shares per year by receiving in-kind contributionsof such claims to monetary compensation (executive directors)

5

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

*Number of persons covered by the provision at the time of the resolution

Matters concerning the policy for deciding the detailsof compensation for each individual director
To determine a policy for deciding the details of compensationfor each director, including the amount thereof, the Board of
Directors established standards by referring to objective
compensation market data. The Advisory Committee, which
consists of independent outside directors and/or statutory
auditors, then went through a process of deliberation andexamination. The Board of Directors took the details of this
deliberation into consideration and passed a resolution on apolicy for deciding the details of the compensation of eachdirector for the fiscal year under review (the fiscal year ended
March 31, 2023) at a meeting of the Board of Directors held on
April 18, 2022.
In the fiscal year ended March 31, 2022, the Board of
Directors decided to entrust Yoshinari Kitajima, President withthe task of deciding a specific amount of compensation for eachdirector, and Mr. Kitajima, who accepted the task, decided eachamount. The Board of Directors entrusted him with this authority
because the president is best positioned to conduct theevaluation of the duties of each director is responsible for while
simultaneously looking at results from broad perspectives.
At the Company, the Advisory Committee conducts anassessment from many perspectives, including consistency
with a decided policy to make sure that the president exercises
the entrusted authority appropriately, and the president thendecides the details of compensation for each director, taking
into consideration the results of such assessment.
The amount of compensation for each director was decided,
as mentioned above, after the Advisory Committee conducted
an assessment from multiple perspectives including consistency
with the determined policy. Therefore, the Board of Directors
considers that the details of compensation for each director for
the fiscal year ended March 31, 2022 are consistent with thepolicy.

(1) Executive directorsʼ compensation
Executive directorsʼ compensation consists of 1. fixedcompensation, 2. a performance-based bonus and 3. stockcompensation.
The percentages of the whole that are (a) fixedcompensation and (b) the performance-based bonus andstock compensation are, as a guide, (a) 55% and (b) 45%.
The standard percentage of total compensation that isstock compensation is 12%. These percentages represent
the case in which the targets for performance-based
compensation have been achieved.
74

Diagram of compensation in the fiscal year under review
Performance-based compensation

55%
Fixed compensation

45%
Bonus

Stock
compensation

The policy for determining the amount of fixedcompensation, bonuses and stock compensation is
described below.
1. Fixed compensation: The amount of fixedcompensation is determined based on the position or titleof the director using objective market data about
compensation as a reference and taking into accountfactors such as the duties and responsibilities of thedirector. Fixed compensation is paid every month.
2. Bonuses: The amounts of bonuses are determined byconsidering the level of contribution of the director in thefiscal year under review using consolidated operating
income, net income attributable to parent company
shareholders and ROE as indicators. The bonus is paid
after calculation based on the financial results for the
fiscal year under review after the end of each fiscal year.

Executive directors contribute the total amount of claims
to monetary compensation to be granted by the Company to
the Company as in-kind contributed assets, and common
stock of the Company are issued or disposed of.
The total number of common stock of the Company to beissued as stock compensation or disposed of shall not exceed
300,000 shares per year＊1, and the amount paid per share
shall be determined by the Board of Directors based on theclosing price＊2 of the Companyʼs common stock on the Tokyo
Stock Exchange on the business day preceding the date of
the resolution made by the Board, to such extent that theamount is not particularly advantageous to the executive
directors who receive the relevant common stock.
Issuance or disposal of the Companyʼs common stockand the granting of claims to monetary compensation as
in-kind contribution assets are subject to the conclusion of a
restricted stock allotment agreement between the Company
and the executive directors, which includes the following
three points.
(1) During the period until the resignation or retirement of
an officer or employee of the Company or its subsidiaries,
they must not transfer, establish a security interest based
upon, or otherwise dispose of the common stock of theCompany allocated as stock compensation.
(2) In the event that the officer or employee is unable toachieve the performance conditions for shares allocated as
stock compensation for which such performance conditions
have been set, the Company shall acquire all or part of theshares free of charge, at a time determined in advance, andwithout lifting the transfer restriction.
(3) In the event of certain other reasons, the Company
shall acquire the shares free of charge.
*1. Provided, however, that in the event of a stock split of the Company's common stock (including a freeof-charge allotment of the Companyʼs common stock) or a reverse stock split, or in the event of othercircumstances requiring the adjustment of the total number of the Companyʼs common stock to beissued or disposed of as restricted shares, the total number of shares will be reasonably adjusted.
*2. If the transaction is not completed on the same day, the closing price on the most recent trading day
preceding it will be used.

(2) Matters concerning performance-based
compensation, etc.
Indicators of performance and the calculation method used
for performance-based compensation, etc., are describedin Section 1 of “matters concerning the policy for deciding
the details of compensation for each individual director”
above. The indicator consolidated operating income underbonuses is the consolidated earnings forecast for thecurrent fiscal year of 67.0 billion yen. Since the purpose of
the consolidated operating income indicator underperformance-based stock compensation is to link
performance and compensation to the Medium-termManagement Plan, we set a target of 62.0 billion yen for
the fiscal year under review in the Medium-termManagement Plan for FY2020–FY2022. The targets forthe indicators net income attributable to parent company
shareholders and ROE were 67.0 billion yen and 6.0%,
respectively. The actual results were 61.2 billion yen forconsolidated operating income, 85.6 billion yen for net
income attributable to parent company shareholders and7.9% for ROE.
These indicators were selected to clearly reflect theconsolidated business performance for the fiscal year andthe state of achievement of the Medium-term Management
Plan for performance-based compensation.
(3) Compensation for outside directors
Regarding outside directors, from the perspective of
maintaining their independence, no performance-based
compensation and only fixed compensation shall be
provided.
(4) Compensation for statutory auditors
Regarding statutory auditors, from the perspective of theirroles and maintaining their independence, no performancebased compensation and only fixed compensation shall be
provided, the amount of which is determined throughconsultation among statutory auditors within the limit forcompensation determined by a resolution at the General
Meeting of Shareholders.

3. Stock compensation: The company has adopted a
restricted stock compensation system to increase the
incentive for the medium- to long-term increase of
corporate value and for directors to hold shares, thereby
sharing profit with shareholders.
The transfer of shares allotted to executive directors
is restricted until their retirement. The method of
calculating the number of shares whose restriction totransfer is lifted will be determined (a) for the portion that
requires the continuous service of the director at DNP fora certain period of time (condition of a term in office) and(b) for the portion that requires the achievement of target
indicators (currently consolidated operating income andROE) (performance condition) set as goals in the Mediumterm Management Plan to be an incentive for theachievement of the medium-term management goals. In
the future, DNP will consider introducing non-financial
indicators such as environmental indicators in addition to
consolidated operating income and ROE.

DNP Integrated Report 2023

75

5 ｜ MANAGEMENT STRUCTURE

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

Total compensation(¥ million)

Fixed compensation

Number of directors
andstatutory auditors
covered

Performance-based compensation
Bonus

Stock compensation

Directors

896

560

252

82

8

(excluding outside auditors)

Statutory auditors

57

57

­

­

2

Outside directors and auditors

130

130

­

­

9

(excluding outside directors)

Note:
1. Bonus amounts shown are the amounts scheduled to be paid as bonuses for the fiscal year under review.
2. Stock compensation shows the amounts recorded as expenses for the fiscal year under review.
3. There were eight internal directors, two internal statutory auditors and seven outside directors as of the end of the fiscal year ended March 31, 2023.

Company directors and total compensation
Total compensation by type (¥ million)
Name

Total compensation(¥ million)

Director typeCompany

Fixedcompensation

Performance-based compensation
Bonus

Stock compensation

Yoshitoshi Kitajima

375

Director

Dai Nippon Printing Co., Ltd.

255

83

37

Yoshinari Kitajima

233

Director

Dai Nippon Printing Co., Ltd.

141

71

21

Note:
1. Total compensation is shown only for those with compensation of at least 100 million yen.
2. Bonus amounts shown are the amounts scheduled to be paid as bonuses for the fiscal year under review.
3. Stock compensation shows the amounts recorded as expenses for the fiscal year under review.

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

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

Non-listed stocks

112

6,267

Stocks other than
non-listed stocks

111

255,734(Stocks for which number of shares increased in the fiscal
year ended March 31, 2023)
Number ofcompanies(2) Stocks held for reasons other than for pureinvestment purposes
1. Stockholding policy, method for validating rationale forstockholdings and details of validation at the Board of
Directors concerning the propriety of individual
stockholdings.
The Company specifically closely examines individual
stocks based on trends in the status of business
transactions with the company issuing the stock, trends inbusiness results of that company, the Companyʼs own
business conditions and medium- to long-term economic
rationality and future prospects, and the Company
periodically verifies the significance and purpose of holding
a stock. As a result, the Company sells stocks it determines
have diminished significance.
In the fiscal year ended March 31, 2023, the number ofshares of 31 stocks held by the Company decreased aslisted on the right.

(Stocks)

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

Reason for increasein number of shares

Non-listed
stocks2749

To strengthen
our businessalliance

Stocks otherthan non-listed
stocks7

20

To enhance
our business
relationship(Stocks for which the number of shares decreased in thefiscal year ended March 31, 2023)
Number of
Total amount of sale value
companies pertaining to the de-crease in
number of shares (¥ million)(Stocks)

Compensation paid to accounting auditors

Non-listed stocks

4

178

Stocks other than
non-listed stocks

27

14,633(Continued on the next page)(1) Compensation paid to accounting auditors
Fiscal year ended March 31, 2022
Category

Total amounts recordedon balance sheets

Fiscal year ended March 31, 2023

Compensation for audit
certification (¥ million)

Compensation forother services (¥ million)

Compensation for audit
certification (¥ million)

Compensation forother services (¥ million)

Dai Nippon Printing
Co., Ltd.
Consolidated
subsidiaries

122

0

122

0

135

0

135

0

Total

257

0

257

0

Reduction of strategic shareholdings
As a result of efforts for strategic shareholding reductions in the fiscal year ended March 31, 2023, the Company decreased
the number of listed stocks by 18 and moved forward with the improvement of capital efficiency.
Stockholdings of listed stocks
Number of stocks(2) Compensation paid to individual member
firms affiliated with 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 thesubmitting company
Services other than auditing provided by the accounting
auditor to the Company are formalities-related work.

76(5) Determination of compensation for audit services
The Companyʼs compensation for auditing services isdetermined based on a variety of factors, including thenumber of expected days for the audit and the company size.
(6) Reason Board of Statutory Auditors consented tocompensation for the accounting auditor
The Companyʼs Board of Statutory Auditors considers suchareas as details of the accounting auditorʼs audit plan, thestate of job execution in the previous fiscal year and thecalculation basis of estimates of compensation by obtaining
necessary materials from and listening to reports fromdirectors, relevant internal departments and accounting
auditors. As a result, the Board of Statutory Auditorsconsented to the amount of compensation for the accounting
auditor submitted by the Company.

250

237

222

204

­18 stocks

191
150

2016.32017.32018.32019.32020.32021.3(year on year)

1292022.3111

2023.3DNP Integrated Report 2023

77

5 ｜ MANAGEMENT STRUCTURE
3. Holding category, company name, number of shares, amount recorded on the balance sheet and holding purpose of stocks
held for reasons other than for pure investment purposes
Stocks held for reasons other than pure investment purposes
Fiscal year ended
March 31, 2023
Number of shares

Number of shares

Amount recorded onbalance sheet (¥ million)

Amount recorded onbalance sheet (¥ million)

36,600,000

38,600,000

133,590

208,980

6,606,600

6,606,600

16,087

16,5093,125,000

3,125,000

8,400

10,453

1,619,706

1,618,647

5,401

6,021

2,713,431

2,713,431

5,095

4,251

685,965

685,965

4,594

5,146

3,140,665

3,140,665

4,494

4,277

794,980

794,980

4,412

3,474

1,293,743

1,293,743

3,926

3,866

692,700

692,700

3,823

3,934

564,400

564,400

3,561

3,730

350,500

350,500

3,375

2,285

630,931630,931

2,906

2,192

319,800

319,000

2,587

3,132

759,277

759,277

2,585

1,751

1,720,000

1,720,000

2,571

2,657

350,940

350,940

2,365

2,853

480,029

480,029

2,363

2,141

Mitsubishi UFJ Financial
Group, Inc.

2,399,760

2,399,760

2,034

1,824

YAMATO HOLDINGS
CO., LTD.

830,300

830,300

1,883

1,903

584,000

584,000

1,645

1,880

Company name

Recruit Holdings Co., Ltd.

Dai-ichi Life Holdings, Inc.
Dexerials Corporation

Ezaki Glico Co., Ltd.

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

KADOKAWA CORPORATION

78

Fiscal year ended
March 31, 2022

Companyʼsownershipof DNP
shares(Y/N)

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

We hold the companyʼs shares aiming to enhance our business relationship. While thequantitative effect of ownership is not stated, we have verified the significance and purpose of
our shareholding through close investigation of the transaction status and the prospects ofbusinesses with the company. After reviewing the significance and purpose of the shareholding,we have sold a part of our shareholding in the fiscal year ended March 31, 2023.

Y
N

Y

Y

Company nameTOKYO OHKA KOGYO
CO., LTD.

We hold the companyʼs 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.

Unicharm Corporation

We hold the companyʼs shares aiming to strengthen our business alliance. 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.

MORINAGA & CO., LTD.

We hold the companyʼs shares aiming to enhance our business relationship. While thequantitative effect of ownership is not stated, we have verified the significance and purpose of
our shareholding through close investigation of the transaction status and the prospects ofbusinesses with the company. In the fiscal year ended March 31, 2023, the number of shares
increased because of the enhancement of our business relationship.

Aflac Incorporated

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

Y

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

Y

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

Y

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

Y

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

Y

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

Y

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

Y

We hold the companyʼs 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.

N

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

Y

We hold the companyʼs shares aiming to enhance our business relationship. While thequantitative effect of ownership is not stated, we have verified the significance and purpose of
our shareholding through close investigation of the transaction status and the prospects ofbusinesses with the company. In the fiscal year ended March 31, 2023, the number of shares
increased because of the enhancement of our business relationship.

TAKARA HOLDINGS INC.
S&B FOODS INC.
SINFONIA TECHNOLOGYCO., LTD.
Hulic Co., Ltd.
TBS HOLDINGS, INC.

Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2022

Number of shares

Number of shares

Amount recorded onbalance sheet (¥ million)

Amount recorded onbalance sheet (¥ million)

206,000

206,000

1,584

1,516

290,700

290,700

1,581

1,267

393,000

393,000

1,475

1,497

149,600

149,600

1,288

1,179

1,200,000

1,200,000

1,226

1,321

344,400

344,400

1,215

1,267

732,800

732,800

1,154

976

1,040,000

1,040,000

1,130

1,145

518,064

518,064

986

925

Companyʼsownershipof DNP
shares(Y/N)

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

We hold the companyʼs shares aiming to strengthen our business alliance. 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.

N

We hold the companyʼs 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.

N

We hold the companyʼs 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.

N

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

Y

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

Y

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

Y

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

Y

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

Y

We hold the companyʼs 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.

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

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

Company name

Terumo Corporation

Y

We hold the companyʼs 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.

TV Asahi Holdings
Corporation

Y

We hold the companyʼs 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.

Astellas Pharma Inc.

Y

We hold the companyʼs 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.

Japan Tobacco Inc.

N

We hold the companyʼs 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.

KADOKAWA CORPORATIONY

We hold the companyʼs 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.

TAKARA HOLDINGS INC.

Y

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

Y

We hold the companyʼs 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.

Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2022

Number of shares

Number of shares

Amount recorded onbalance sheet (¥ million)

Amount recorded onbalance sheet (¥ million)

7,722,000

7,722,000

27,59828,7564,030,000

4,030,000

6,073

6,077

2,284,000

2,284,000

4,300

4,364

1,000,000

1,000,000

2,798

2,087

532,608

532,608

1,500

1,714

500,000

500,000

511

550

Companyʼsownershipof DNP
shares(Y/N)

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

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

N

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

N

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

N

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

Y

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

Y

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

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 the case that the company is a holding company, the holding status of the parent company and its major subsidiaries is stated.

(3) Stocks held for pure investment purposes
None
DNP Integrated Report 2023

79

6

BUSINESS RESULTS/CORPORATE PROFILEManagementʼs Discussion
and Analysis
Consolidated

Fiscal year: the accounting year ended March 31

Net Sales

Business Environment and Overview of Operating Results
for the Fiscal Year Ended March 2023

Managementʼs Discussion and Analysis ……………………………………………… 81
Key Financial Data for 11 Years …………………………………………………………… 88
Non-financial Data ……………………………………………………………………………… 90
Major Subsidiaries and Affiliates ………………………………………………………… 92
Our Products and Services ………………………………………………………………… 94
Investor Information …………………………………………………………………………… 96
Dialogues with Shareholders and Investors ………………………………………… 98
Message from the Director in Charge ………………………………………………… 99

80

Business conditions surrounding the DNP Group during the fiscal year ended
March 2023 were marked by gradual progress in efforts to change peopleʼsworking styles and lifestyles, in addition to recovery from the effects of the
COVID-19 pandemic on social and economic activities. In Japan, in particular,
there were signs of gradual economic recovery, with increasing demand for
inbound tourism, especially since travel restrictions were eased at the beginning of2023.
On the other hand, factors such as the emergence of geopolitical risks anddecreased stability in global supply chains continued to push up prices of raw
materials and energy and logistics costs. The business environment in Japan andelsewhere has become more severe, with economic slowdowns being seen in
many regions overseas due to inflation and monetary tightening.
Amid these conditions, the DNP Group vigorously pursued initiatives aimed atrealizing a better, sustainable society and enabling well-being lives. In line with
DNPʼs P&I Innovation business vision that synergizes DNPʼs unique strengths in
P&I (Printing & Information), we deepened the level of cooperation with our many
partners and strove to create new value that solves social issues and meets
peopleʼs expectations.
In the fiscal year ended March 2023, we designated four “ focus businesses”
for which we anticipate strong market growth and high profitability: IoT andnext-generation communications business, data distribution-related business,
mobility business and environment-related business. We focused and optimized
management resource allocation in these areas, including both financial capitaland non-financial capital such as human resources and intellectual properties.
Doing so led to many positive results.
In the IoT and next-generation communications business, DNP has developed afilm-type antenna that supports the Sub6 waveband of fifth-generation mobile
communication systems (5G) with its excellent design, weather resistance andflexibility. By combining DNPʼs proprietary technologies with other technologies,
we intend to build a coherent production system handling everything from patterndesign to processing, and to promote rapid commercialization.
In data distribution-related business, in October 2022 we began providing aface authentication system that uses photo data from facial photos taken with
DNPʼs “ Ki-Re-I” ID photo machines. The system offers contactless control of room
entry and exit while simultaneously measuring body temperature, making it
possible to reduce security risks and prevent infections with a single device. In
December 2022, we formed a business tie-up with The Yomiuri Shimbun Tokyo
Headquarters and SMN Corporation. By compiling behavioral data relating toconsumers who come into contact with newspapers, magazines and televisionshows owned by each company, we launched “Media X,” a platform for more
effective distribution of advertisements.
In the mobility business, we worked to develop products and services for the
next-generation mobility society, which demands reduced environmental impact,
higher energy efficiency, greater information security and high degrees of safety
and comfort. To improve the efficiency of delivery management, etc., as part ofthis effort, in February 2023, we used Mobility as a Service (MaaS) in the Republicof the Philippines to demonstrate the viability of a “last mile logistics” businessthat delivers goods from final logistics bases into the hands of consumers.
In environment-related business, in October 2022, we combined DNPʼs diverse
technologies and expertise to launch a cross-departmental environmentallyconscious design team called DNP GREEN PARTNER, whose mission is to help
solve environmental issues faced by corporations. Aiming for long-term
coexistence between a healthy environment and business, we intend to provide
companies with services aimed at resolving various issues.
In addition to these focus businesses, the entire group has been working on
structural reforms aimed at boosting DNPʼs competitiveness, and has worked to(¥ billion)

1,500

1,401.5 1,401.9

1,335.4 1,344.1 1,373.2

19

21

1,000

500

0

20

22

23

Operating Income(¥ billion)

80
66.8
60

61.2

56.3
49.8

49.5

40

20

0

19

20

21

22

23

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

97.2

100

85.7

80

69.5

60
40

25.1

20
0
-20
-40

­35.6

19

20

21

22

23

Net Income (Loss) to Net Sales
(%)

8

7.23
6.24

6

4.96

4
2

1.88

0
-2

­2.54

19

20

21

22

23

DNP Integrated Report 2023

81

6 ｜ BUSINESS RESULTS/CORPORATE PROFILEManagement ʼs Discussion and Analysis

build a stronger business portfolio. To strengthen our management foundation sothat it can support long-term growth, we have accelerated the promotion of digitaltransformation (DX) aimed at improving productivity, upgrading our information
infrastructure and initiatives relating to the environment, human resources andhuman rights.

Net sales (¥ million)

2023.32022.32021.3

1,373,209

1,344,147

1,335,440

Gross profit margin21.3 %

21.8 %

20.7 %

Operating income margin

4.5 %

5.0 %

3.7 %

Ordinary income margin

6.1 %

6.0 %

4.5 %

Net sales income margin

6.2 %

7.2 %

1.9 %

Overseas sales for the DNP Group as a whole were ¥315,798 million, up 8.8%
from the previous fiscal year. Overseas sales accounted for 23.0% of total sales,
an increase of 1.4 percentage points from 21.6% in the previous fiscal year. By
region, sales in Asia, including Indonesia and Taiwan, increased by 3.2% year on
year to ¥225,900 million. In other regions, including the United States and Europe,sales increased 26.0% to ¥89,898 million.

Gross Profit Margin

Information Innovation Business: Information Security

(%)

25
20

20.1 20.9

20.7

21.8 21.3

15
10

Demand for taking and printing photographs ̶ which had declined dueto the impact of restrictions on movement and other measures against the
COVID-19 pandemic ̶ recovered in the European and Asian markets, inaddition to the main U.S. market.
DNP Sales increased overall due to the strong performance of dye-sublimation
thermal transfer printing media for photo prints, and other photography-related
services.
Market

0

19

20

21

22

23

DNP ʼs Overseas Sales(¥ billion)

350

290.2

300

315.8

Electronics
14.8%

Beverages
3.8%

Lifestyle andIndustrial Supplies
29.1%

Information
Communication
52.3%

Operating Income by Segment(Year ended March 31, 2023)

Beverages
0.7%

Information
Communication
32.8%

Electronics
57.5%

Lifestyle andIndustrial Supplies
9.0%

238.4 246.2 245.8

200

Lifestyle and Industrial Supplies

150
100
50

• Net Sales:¥720,294 million (up 3.0 % YoY)
• Operating Income:¥26,731 million (down 3.2 % YoY)
• Operating Income Margin: 3.7% (down 0.3 percentage points)(Year ended March 31, 2023)

Imaging Communication Business5250

Information Communication

Societyʼs demand for business process outsourcing (BPO) continued toincrease in response to labor shortages and workstyle reforms. In the smart
card segment, the percentage of payments using credit cards remained highamid a rise in cashless payment practices.
DNP Sales increased overall due to an increase in BPO business and otherlarge-scale projects, in addition to an increase in smart cards for financial
institutions and My Number cards.
MarketNet Sales by Segment

0

19

20

21

22

23

• Net Sales:¥400,236 million (up 3.4% YoY)
• Operating Income:¥7,380 million (down 45.8% YoY)
• Operating Income Margin: 1.8% (down 1.7 percentage points)

Packaging Business
Publishing Business
Market Sales volume in the publishing industry in fiscal 2023 totaled ¥1,110.6
billion (down 6.4% year on year). The positive impact of the increase in reading
time due to the COVID-19 pandemic that continued in fiscal 2020 and fiscal
2021 has ended, and the market was also affected by consumer restraint frombuying due to high prices. Sales of books decreased 5.4% to ¥637.9 billion,
while sales of magazines decreased 7.7% year on year to ¥468.7 billion(surveyed by Japanʼs Research Institute for Publications). The number ofbookstores decreased to 11,500 in 2022, in comparison with the peak ofaround 22,000 stores in 1999 (surveyed by The All Japan Magazine and Book
Publisherʼs and Editorʼs Association). The size of the electronic book market in
fiscal 2022 increased 7.5% year on year to ¥501.3 billion, and the market is
expected to grow to a size exceeding ¥800 billion by fiscal 2026 (surveyed by
The All Japan Magazine and Book Publisherʼs and Editorʼs Association).
DNP In Publishing, on top of shrinkage in printing orders due to contraction of
the market for magazines and other paper media, there was also a decline insales from DNPʼs hybrid bookstore network, which handles both paper andelectronic media, in comparison with the previous yearʼs high stay-at-homedemand, leading to a decrease in net sales year on year. Our electronic libraryservice and library operations have continued to grow steadily. In the librarysupport business, the number of contracted libraries was 1,799 as of April 30,
2023, a year-on-year increase of 53, resulting in year-on-year sales growth.

Information Innovation Business: Marketing
Market Domestic demand for advertising in fiscal 2022 decreased by 2.9%
overall, despite an increase in internet advertising and event planning, due to amajor decline in demand for television and newspaper advertising (surveyed by
the Ministry of Economy, Trade and Industry).
DNP While digital marketing continued to perform strongly, overall sales
declined due to a decrease in sales of paper media such as catalogues andpamphlets, along with point-of-purchase (POP), premium and other sales
promotion products and services.

82

Market Demand for eco-friendly packaging materials and packaging materials
for food products and daily commodities began to recover, as did inbounddemand for packaging materials for tourism-related souvenirs.
DNP In response to a growing awareness of environmental concerns, we
also worked at developing and selling eco-friendly packaging. We madeefforts to shift to high added-value products and worked to implement
structural reforms to paper container manufacturing and other businessprocesses. As a result of these efforts, although the number of film packaging
products that we sold changed little from the previous year, overall Packaging
sales increased thanks to progress in passing on cost increases to customers,
and to increased sales of formed plastic products.

Living Spaces Business
Market Domestic new housing starts decreased 0.6% year on year to
approximately 860,000 units in fiscal 2022. In these new starts,
owner-occupied houses decreased by 11.8%, while apartments and otherrental housing increased by 5.0% and condominiums increased by 4.5% year
on year (surveyed by the Ministry of Land, Infrastructure, Transport andTourism).
DNP The Living Spaces business was affected by a decline in new housing
starts in Japan and the resulting decrease in sales of interior and exteriormaterials for housing. Export sales also sagged, especially in the Europeanand U.S. markets, as inflation stifled economic activity. However, sales ended
on par with the previous year due to our efforts of review of cost efficiency
and price improvement.

Industrial High-performance Materials Business
Market Demand for products like smartphones and notebook PCs remainedsluggish against the backdrop of reactionary reductions to stay-at-homedemand and market inventory adjustments, and sales of battery pouches forlithium-ion batteries used in IT applications decreased. At the same time,
demand for battery pouches for automotive use increased. The global market

DNP Integrated Report 2023

83

6 ｜ BUSINESS RESULTS/CORPORATE PROFILEManagement ʼs Discussion and Analysis

for electric vehicles is expected to grow 17% in terms of CAGR (Compound
Annual Growth Rate) between 2023 and 2030, due to the increasing global
trend toward environmental requirements for reducing CO 2 emissions(surveyed by LMC Automotive). Global demand for encapsulants for solar
cells has also increased.
DNP Although sales of battery pouches for lithium-ion batteries used indevices such as tablets and smartphones decreased, sales of battery pouches
for lithium-ion batteries for automotive use and encapsulants for solar cells
increased, resulting in net sales that were on par with the previous year.

Electronics• Net Sales:¥203,574 million (down 3.6% YoY)
• Operating Income:¥46,936 million (up 1.0% YoY)
• Operating Income Margin: 23.1% (up 1.1 percentage points)

Display Components Business
Market In 2022, although the market for organic light-emitting diode (OLED)
displays for smartphones suffered from an overall decrease in the number ofsmartphones shipped due to factors such as a decline in consumer motivation
to purchase, the number of manufacturers adopting OLED displays increased,
resulting in a 5.4% increase in display area shipped (5,343,000m2). The
market for TVs and other large LED panel displays shrank, due to factors suchas a reactionary decrease in stay-at-home demand, with display area shipped
decreasing by 7.1% to 193,447,800m2 (source: Reality and Future Prospect ofDisplay Related Market 2023, Fuji Chimera Research Institute, Inc.).
DNP The Display Components business enjoyed solid demand for metalmasks used in the production of OLED displays, which are increasingly used
for smartphones. At the same time, sales of optical films decreased relative tothe previous yearʼs surge in stay-at-home demand in Japan, along with theimpact of inventory adjustments throughout the supply chain due to aworldwide slump in consumption. As a result, overall sales from this businessdecreased.

Electronics Devices Business
Global semiconductor sales for 2022 increased 3.3% year on year to
US$ 574.0 billion as demand stalled in the second half of the year, according
to the World Semiconductor Trade Statistics. By field, semiconductor memory
shipments decreased by 15.6% year on year, and logic shipments increasedby 14.0% year on year.
DNP The Electronic Devices business was affected by a slowdown in the
expansion of the semiconductor market, leading to a decline in sales of leadframes and other semiconductor package components in the latter half of the
fiscal year due to the impact of inventory adjustments by some clientcompanies. Nevertheless, sales for the whole year grew relative to theprevious year. Demand for semiconductor production photomasks also
remained strong for product development at client companies, resulting in an
overall year-on-year increase in sales.
MarketBeverages• Net Sales:¥51,605 million (up 3.8% YoY)
• Operating Income:¥602 million (down 12.9% YoY)
• Operating Income Margin: 1.2% (down 0.2 percentage points)
Market Demand for beverages recovered due to good weather during thesummer, as the impact of stay-at-home policies implemented during the
COVID-19 pandemic diminished.
DNP As a result, segment sales increased overall thanks to a recovery inconvenience store sales on top of increased restaurant and online sales.

Cost of Sales/Selling, General and Administrative Expenses/
Operating Income
Cost of sales increased ¥30,066 million, or 2.9% year on year, to ¥1,081,284
million, and the gross profit margin fell 0.5 percentage points to 21.3%.
The price of raw materials and energy increased during the fiscal year underreview due to the emergence of geopolitical risks and instability in the global
supply chain, with raw material and energy costs minus the portion transferred toselling prices increasing by ¥11.7 billion year on year.
Selling, general and administrative expenses amounted to ¥230,692 million in
the fiscal period under review, a year-on-year increase of ¥4,552 million, or 2.0%.
The percentage of net sales remained unchanged at 16.8% from the previous
fiscal year.
As a result, operating income for the fiscal year under review fell ¥5,556
million, or 8.3% year on year, to ¥61,233 million. The operating margin fell 0.5
percentage points to 4.5%.

SGA Expenses to Net Sales(%)

20

Non-operating income totaled ¥26,695 million in the fiscal year under review, up¥8,143 million, or 43.9%, from the previous fiscal year. Non-operating expenses
totaled ¥4,267 million, up ¥176 million, or 4.3% year on year. As a result, net nonoperating income was ¥22,428 million, an increase of ¥7,968 million, or 55.1%
year on year.
Ordinary income totaled ¥83,661 million, up ¥2,412 million, or 3.0%, from theprevious year.
Income before income taxes and non-controlling interests totaled ¥119,734
million, down ¥7,157 million, or 5.6%, from the previous fiscal year, due in part tothe fact that extraordinary income posted for revision of the retirement benefit planin the previous fiscal year did not arise during the year under review, and also dueto the posting of impairment losses.

16.9

17.0

16.8

16.8

19

20

21

22

23

15

10

5

0

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

16.6

Operating Income Margin
(%)

5.0

5
4

4.5
4.0
3.6

3.7

3
2
1
0

19

20

21

22

23

Net Income Attributable to Parent Company Shareholders
Net income attributable to parent company shareholders totaled ¥85,693 million,
down ¥11,489 million, or 11.8%, from the previous fiscal year. Net income pershare was ¥321.32 (compared to net income per share of ¥355.84 in the previousyear).

Earnings (Loss) per Share
(¥)

400

355.84321.32300
235.18
200
89.32

100
0
-100

­118.22

19

84

20

21

22

23

DNP Integrated Report 2023

85

6 ｜ BUSINESS RESULTS/CORPORATE PROFILEManagement ʼs Discussion and Analysis

Total Assets(¥ billion)

Liquidity and Capital Resources
Cash Flow from Operating Activities

Cash Flow
2023.3
Cash flow from operating
activities (¥ million)

37,9942022.382,0292021.3
61,682

Free cash flow (¥ million)−25,021

12,973−39,20942,820−56,284

5,398

2022.32021.3

1,830,384

1,876,647

1,825,019

Total assets (¥ million)

100

Interest-bearing debt (¥ million)

147,817

154,362

158,555

Stockholders ʼ equity (¥ million)

1,087,504

1,091,861

1,043,977

93.9
82.0

80

69.0

Book value per share (¥)

61.7
38.0

40

19

20

21

23

22

4,158.46

4,057.98

In the consolidated cash flow in the fiscal year ended March 2023, net cash
provided by operating activities totaled ¥37,994 million, due mainly to ¥119,734
million in income before income taxes and ¥51,769 million in depreciation.
Net cash used in investing activities amounted to ¥25,021 million, mainly due
to payments of ¥50,322 million for the purchases of property, plant and equipmentand ¥11,804 million for the purchases of intangible assets.
Net cash used in financing activities amounted to ¥52,436 million, mainly due
to ¥25,866 million for the purchase of treasury shares and ¥17,142 million in
dividend payments.
As a result of these activities, cash and cash equivalents at the end of the
fiscal year in the consolidated cash flow statement totaled ¥258,329 million.
Free cash flow in the fiscal year under review, which is the sum of cash flowfrom operating activities and cash flow from investing activities, amounted torevenue of ¥12,973 million.

As of March 31, 2023, a total of 292,240,346 shares of common stock had been
issued, of which 30,724,570 shares, or 10.51% of the total, were held as treasury
stock. The total number of shares of treasury stock decreased by 17,450,544 fromthe previous year.

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

Capital expenditures
Free cash flow

Type ofsharesShares at
beginning offiscal year

Increase inshares during
fiscal year

Decrease inshares during
fiscal year

Shares atend offiscal year

Shares issued

Commonstock

317,240,346−

25,000,000

292,240,346

Treasury stock

Commonstock

48,175,114

7,619,932

25,070,476

30,724,570(¥ billion)

300

285.0

250

500

0

150
100
50

41.1

57.2

50.7

13.0

22

23

1,000

996.1

1,044.0

1,091.9 1,087.5

915.8

800
600
400
200
0

19

20

21

22

23

Book Value per Share
(¥)

4,500

4,058.0 4,158.5

4,000

3,716.9

3,500 3,300.5 3,260.4
3,000
2,500
2,000
1,500
1,000
500

19

20

21

22

23

ROE
(%)

10

9.1
7.9

7.3

8
6
4
2

2.6

0
-2
-4

−3.5

19

20

21

22

23

57.2

58.2

59.4

21

22

23

Equity Ratio
(%)

-50
-100

21

1,200

42.8

5.4

0

20

(¥ billion)

78.1

71.6

19

Stockholdersʼ Equity

Notes
1. The 25,000,000-share decrease in the number of shares of common stock issued is the result of a cancellation of treasury stock.
2. The 7,619,932-share increase in the number of shares of common stock held as treasury stock is the result of an increase of 7,616,500
shares due to a purchase of treasury stock by resolution of the Board of Directors and an increase of 3,432 shares due to a purchase of
odd-lot shares.
3. The 25,070,476-share decrease in the number of shares of common stock held as treasury stock is the sum of a decrease of 25,000,000
shares due to a cancellation of treasury stock, a decrease of 70,470 shares due to the disposal of treasury shares as restricted stockcompensation, and a decrease of 6 shares due to changes in ratios of equity held in equity method affiliates.

200

1,876.6 1,830.4

1,000

0

Capital Expenditures andFree Cash Flow

1,775.0 1,721.7 1,825.0

1,500

3,716.85

DNPʼs total assets at the end of the fiscal year under review amounted to¥1,830,384 million, down ¥46,263 million, or 2.5%, from the previous fiscal year.
Among current assets, cash and cash equivalents totaled ¥258,329 million,
down ¥35,032 million, or 11.9%, from the previous fiscal year. The sum of tradereceivables and contract assets came to ¥329,762 million, up ¥4,916 million, or1.5%. Inventories of merchandise and finished products, work in process, rawmaterials and supplies totaled ¥154,863 million, up ¥13,242 million, or 9.4%. As
a result, current assets totaled ¥802,995 million, down ¥1,818 million, or 0.2%.
Among fixed assets, tangible assets totaled ¥436,430 million, up ¥14,554
million, or 3.4%, from the previous fiscal year. Intangible fixed assets totaled¥30,360 million, up ¥2,613 million, or 9.4%. Investments and other assets totaled¥ 560,598 million, down ¥61,612 million, or 9.9%. As a result, fixed assets totaled¥1,027,389 million, down ¥44,445 million, or 4.1%.
Current liabilities totaled ¥398,571 million, down ¥7,537 million, or 1.9%, fromthe previous fiscal year. Long-term (fixed) liabilities totaled ¥283,568 million,
down ¥38,558 million, or 12.0%. As a result, total liabilities amounted to¥682,139 million, down ¥46,095 million, or 6.3%.
As of March 31, 2023, net assets totaled ¥1,148,245 million.
As a result, the equity ratio in the fiscal year under review was 59.4%, anincrease of 1.2 percentage points from the previous fiscal year.

20
0

Capital expenditures in the fiscal year ended March 2023, which included theredevelopment of the Tokyo Ichigaya area (where our head office is located) andpriority investment in strategic businesses, totaled ¥78,082 million, up ¥27,383
million, or 54.0%, from the previous fiscal year. By segment, capital expendituresin the Information Communication segment were ¥36,794 million, up ¥17,726
million from the previous year, and accounted for 47% of total capital expenditures.
The Lifestyle and Industrial Supplies segment was ¥23,517 million, up ¥1,948
million, and accounted for 30%. The Electronics segment was ¥13,522 million, up¥8,018 million, and accounted for 17%. The Beverages segment was ¥2,354
million, up ¥201 million, and accounted for 3%. Capital expenditures forcompany-wide assets totaled ¥1,895 million, down ¥510 million year on year, andaccounted for 3% of total capital expenditures. The necessary capital for the above
investments was covered by funds on hand.
Depreciation in the fiscal year ended March 2023 was ¥51,769 million, up¥614 million, or 1.2%, from the previous fiscal year. By segment, depreciation in
the Information Communication segment was ¥20,157 million, up ¥143 million
from the previous year, and accounted for 39% of total depreciation. The Lifestyleand Industrial Supplies segment was ¥18,416 million, around the same as in theprevious year, and accounted for 36%. The Electronics segment was ¥9,481
million, up ¥786 million and accounted for 18%. The Beverages segment was¥2,103 million, a slight increase, and accounted for 4%. Depreciation ofcompany-wide assets totaled ¥1,612 million, a decrease of ¥305 million year on
year, and accounted for 3% of total capital expenditures.
In addition, research and development expenditures for the fiscal year ended
March 2023 totaled ¥32,481 million, a decrease of ¥667 million on the
expenditures of the previous fiscal year (¥33,148 million).

2023.3(¥ billion)

60

Cash flow from investing
activities (¥ million)

2,000

Balance Sheet

80
−77.9

19

20

21

22

23

60

56.1

53.2

40
20
0

86

19

20

DNP Integrated Report 2023

87

6 ｜ BUSINESS RESULTS/CORPORATE PROFILEKey Financial Data for 11 Years Years ended March 31
2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

Change 2023/2022

1,446,607

1,448,550

1,462,118

1,455,916

1,410,173

1,412,252

1,401,506

1,401,894

1,335,440

1,344,147

1,373,209

2.2%

Statements of Operations (¥ million)
Net sales
Operating income

35,78050,09948,17445,472

31,411

46,37249,89856,27449,52966,78961,233-8.3%

Ordinary income

40,31853,28553,75952,651

36,74050,971

58,25963,78659,907

81,24983,661

3.0%

Income (loss) before income taxes

35,152

48,60851,062

54,841

39,83145,396(18,685)

102,719

46,401

126,891

119,734-5.6%

Net income (loss) attributable to parent company shareholders

19,21825,642

26,92433,58825,22627,501(35,669)

69,49825,08897,182

85,693-11.8%EBITDA

118,835

124,980

120,548

122,590

103,494

108,678

42,463

158,660

98,550178,781

172,203-3.7%

Total net assets

937,055

976,385

1,124,093

1,063,241

1,081,286

1,102,551

1,046,622

968,575

1,098,614

1,148,413

1,148,245-0.0%Interest-bearing debt

227,209

182,596

188,996

189,820

169,133

170,103

166,350

211,646

158,555

154,362

147,817-4.2%

Stockholders' equity

893,124

932,329

1,078,828

1,017,425

1,033,864

1,053,600

996,162

915,779

1,043,977

1,091,861

1,087,504-0.4%

1,578,976

1,574,754

1,809,462

1,718,636

1,741,904

1,794,764

1,775,023

1,721,724

1,825,019

1,876,647

1,830,384-2.5%

Cash flows from operating activities

100,498

120,10985,731

72,62971,94548,457

68,972

93,937

61,682

82,02937,994-53.7%Cash flows from investing activities(72,588)(58,371)(50,540)(60,883)

14,012

23,075(146,909)

191,057(56,284)(39,209)(25,021)–

Cash flows from financing activities(36,236)(80,038)(23,865)(47,166)(45,223)(42,771)(32,197)(41,281)(78,269)(57,752)(52,436)–

Free cash flow＊1

27,91061,73835,191

11,74685,957

71,532(77,937)

284,994

5,398

42,82012,973-69.7%

29.84

39.82

41.82

53.10

40.79

90.77

(118.22)235.1889.32

355.84321.32-9.7%

1,386.86

1,447.96

1,675.63

1,618.66

1,680.55

3,493.79

3,300.52

3,260.38

3,716.85

4,057.98

4,158.46

2.5%

32.00

32.00

32.00

32.00

32.00

48.00

64.00

64.00

64.00

64.00

64.00

–

Operating income

2.47

3.46

3.29

3.12

2.23

3.28

3.56

4.01

3.71

4.97

4.46

-0.51

EBITDA margin

8.21

8.63

8.24

8.42

7.34

7.70

3.03

11.32

7.38

13.30

12.54

-0.76

Net income

1.33

1.77

1.84

2.31

1.79

1.95

(2.54)

4.96

1.88

7.23

6.24

-0.99

Balance Sheets (¥ million)

Total assets
Cash Flow Statements (¥ million)

Per Share Data (¥)＊2
Net income (loss) - primary
Net assets
Cash dividend＊3
As a Percentage of Net Sales (%)

Financial Ratios
ROE (%)

2.18

2.81

2.67

3.20

2.46

2.63

(3.48)

7.27

2.56

9.10

7.86

-1.24

ROA (%)

1.21

1.63

1.59

1.90

1.46

1.56

(2.00)

3.97

1.41

5.25

4.62

-0.63

Equity ratio (%)

56.56

59.20

59.62

59.20

59.35

58.70

56.12

53.19

57.20

58.18

59.41

1.23

PER (times)

29.70

24.84

27.94

18.84

29.43

24.22

–

9.78

25.97

8.09

11.53

–

PBR (times)

0.64

0.68

0.70

0.62

0.71

0.63

0.80

0.71

0.62

0.71

0.89

–

EV/EBITDA (times)

4.92

4.93

6.02

5.23

6.69

5.30

16.07

2.94

4.97

3.49

4.92

–

PCFR (times)

5.74

6.43

8.00

6.36

8.52

7.48

34.12

5.21

8.57

5.22

7.05

–

Dividend yield (%)

3.61

3.24

2.74

3.20

2.67

2.91

2.42

2.78

2.76

2.22

1.73

-0.49

–

–

–

19,99814,99914,998–59,999–29,99925,854–

Dividend payout ratio (%)

107.27

80.38

76.54

60.28

78.47

70.52

–

27.21

71.66

17.99

19.92

–

Total return ratio (%)

107.33

80.43

76.59

119.48137.57

124.78–113.11

71.66

48.64

49.90

–

Capital Expenditures＊5

88,31563,46555,024

97,26557,08559,558

41,10357,162

71,64950,69978,08254.0%

R&D Expenditures

30,82130,82031,74931,827

31,37633,21033,78633,60332,62333,14832,481-2.0%

Depreciation

80,20073,45967,03465,31061,461

61,071

59,08154,47550,89351,15551,769

1.2%

Valuations (against share price on March 31)

Returns to Shareholders
Values of shares repurchased (¥ million)＊4

OthersLong-term credit rating (R&I)
Foreign ownership (%)

AA

AA

AA−

AA−

AA−

AA−

AA−

AA−

AA−

AA−

AA−

–

21.12

24.41

25.54

22.01

23.91

24.58

24.85

24.14

23.64

23.16

27.38

–

*1 Free cash flow = net cash from operating activities + net cash from investing activities*2 As of October 1, 2017, two shares of common stock were consolidated into one share of common stock.
*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.
*4 Treasury stock acquired through requests for the purchase of odd-lot shares is not included.
*5 It includes investments in intangible assets.

88

DNP Integrated Report 2023

89

6 ｜ BUSINESS RESULTS/CORPORATE PROFILE
Printing Co., Ltd. and Consolidated Subsidiaries
ended March 31
Non-financial Data DaiYearsNippon

Intellectual Capital Data

Human Capital Data
Total number of employees(by segment)

Number of overseas Group company
employees (by area)(persons) (As of March 31, 2023)(persons) (As of March 31, 2023)

Corporate
Beverages

Number of Japanese patents held

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

Europe2,363

Environmental Data

200

16,000

449

1,225

180

14,000163.1
12,143

12,392 12,226

Electronics
12,0003,825America

160

11,525 11,726

36,246persons

80

40
2,000

10.0
8

6.5
4

0

19

Asia

18,342

5.7

87.5

12

20

0

Information
Communication

10,491

80.0

60
4,000

Lifestyle andIndustrial Supplies

11.9

100

6,000

persons

134.8

120

8,000

3,692

16

140

10,000

769

20

20

21

22

23

0

20

2,474

21

23

22

Amount of resource recycling
Amount of resource recycling (1,000 tons)
Resource recycling ratio (%)

Percentage of female managers(Dai Nippon Printing)

Lost time work accident occurrence ratio

(%)

9.0

8.4

8.0

1,000

961

1.00

837
800

80

801

0.80

763

60

60

0.65

600

0.19

0.20

4.0

50

0.69

0.21

0.15

0.63

80

68

51.7

54.7

56.3

60
50

0.60

0.60

0.56

400

0.40

3.0
0.10
2.0

64

71

58.0

0.25

5.6

5.0

200

0.20

40

40

30

30

20

20

10

10

0.05

1.0

0

0
0

0

19

90

100

100

916

0.30

0.29

6.6
6.1

6.0

GHG emissions (1,000 t-CO2)
Emissions per-unit value (t-CO2) /million yen)

0.33
0.30

7.4

7.0

0.35

Resource recycling ratio: Amount of resource recycling ÷ amount of undesired
materials excluding paper as valuable waste × 100
Amount of resource recycling: Amount of undesired materials excluding paper as valuable
waste which have been recycled by means of material recycling or chemical recycling
Amount of undesired materials excluding paper: Amount of undesired materials (waste+ valuable waste) excluding paper as valuable waste, which is 100% recycled, and theamount of sludge subject to on-site intermediate processing

GHG emissions(Including international operations)

20

21

22

23

0.00

0

19

20

21

22

23

19

20

21

22

23

Amount ofundesired materials
excluding paper

117

117

125

117

16

21

22

23

DNP Integrated Report 2023

91

6 ｜ BUSINESS RESULTS/CORPORATE PROFILE

Major Subsidiaries and Affiliates (As of March 31, 2023)
Printing

Capital(¥ million)

Ownership ratio ofvoting rights (%)

Information Communication

Ownership ratio ofvoting rights (%)

400(CNY1,000)
39,301(DKK1,000)
135,000

100.0
100.0
(100.0)
100.0

490
300
100
(TWD1,000)
2,198,185(USD1,000)
180,000(EUR 1,000)
47,200

65.0
100.0
100.0
49.9

5,483
2,000
100
626
500
300
100
100
70
50
40
32
30
10
(USD1,000)
62,164(USD1,000)
100(USD1,000)
8,780(SGD1,000)
125,898

20.6
100.0
100.0（100.0）
100.0
33.4
100.0
100.0
94.3
100.0
97.0
100.0
51.1
66.6
50.0
100.0
(7.2)
100.0
(100.0)
100.0

350
100
100
100
100
100
100
90
30
20
10
10

100.0
100.0
100.0（90.0）
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0（100.0）
100.0Electronics

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

Capital(¥ million)

Display Components
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
Production, intermediation, sales and browsing services for e-books, etc.
Management of group companies and related business
Offset printing and bookbinding
Prepress and media production
Operation of hybrid bookstore services
Electronic publishing and distribution platform services; e-book distribution service
Editing and sale of textbooks and educational materials
Development, sale and maintenance of computer software
Bookbinding
Film making, printing and bookbinding

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

55.0
55.0（55.0）
55.0（55.0）
55.0（55.0）
55.0（55.0）
55.0（55.0）
16.3（9.8）
100.0
100.0
100.0
63.8
48.3
87.0
100.0（15.2）
100.0

DNP Precision Devices Himeji Co., Ltd.
DNP International Trading (Shanghai) Co., Ltd.*

Production of display-related components
Sale of printed matter, etc.

DNP Denmark A/S

Production and sale of precision electronic components

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

Development and maintenance of software
Offset printing and bookbinding
BPO business and BPO consulting business
Planning, production, film making and plate making
Production and sale of business forms and plastic cards
Planning, design, maintenance and operation of information systems
Planning and production of promotional materials
Planning and production of printed materials
Production and sale of computers and peripheral devices; development, production and sale of software
Mailing of printed matter, etc.
Production and sale of all types of printed matter
Production and sale of cards, and BPO business and DTP business

50.8
100.0
100.0
100.0
100.0
100.0
100.0
95.0
100.0
100.0（100.0）
95.0
36.3

PT.Wahyu DNP Bureau

Card-issuing services

843
100
100
100
100
100
80
50
40
20
10
(VND1,000,000)
100,000(USD1,000)
2,000

100
100
90
60
(CNY1,000)
24,000(MYR1,000)
190,000(USD1,000)
71,980(USD)
0.01(EUR1,000)
2,408(RUB1,000)
7,622(EUR1,000)
3,588(EUR1,000)
1,000

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

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

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

300
300
200

100.0
50.0
100.0

Beverages

Electronic Devices
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

Photronics DNP Mask Corporation Xiamen

Production and sale of semiconductor photomasks

DNP Photomask Europe S.p.A.

Production and sale of semiconductor photomasks

49.9(49.9)
80.6

Information Innovation

45.0

Imaging Communication
DNP Imaging Comm Co., Ltd.
DNP Photo Imaging Japan Co., Ltd.
DNP hollyhock Co., LTD.
DNP ID System Co., Ltd.
DNP Imaging Communication (Shanghai) Co., 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
Operation of photo studio and related equipment services
Sale of government-affiliated smart card identification equipment and materials
Sale of printed matter (Products and services of the Imaging Communication business)

DNP Imagingcomm Asia Sdn. Bhd.

Colorvision International Inc.

Production, processing and sale of thermal mass transfer media and dye-sublimation media;
sale of photo-related products
Production, processing and sale of thermal mass transfer media and dye-sublimation media;
sale of photo-related products
Operation of a photography distribution system for amusement facilities

DNP Photo Imaging Europe SAS

Sale of photo-related products

DNP Photo Imaging Russia, LLC

Sale of photo-related products

Sharingbox SA

Providing functional photo booths for event business

DNP Imagingcomm Europe B.V.

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

DNP Imagingcomm America Corporation

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-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 services
Filling and processing of packages
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

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

Development and sale of software; computer system support services
Production and sale of chemical products
Manufacturing and sale of chemical materials, pharmaceutical ingredients, etc.
Packing, shipping, freight forwarding and warehousing operations
Production and sale of printing ink
Planning, production and sale of artistic images and videos
Manufacturing, repair and sale of printing equipment and other machinery
Buying and selling of printing paper and various other types of merchandise
Operation of academy for training and developing personnel to defend against targeted cyber attacks
Film making, printing, bookbinding; production and sale of packaging
Personal information protection and risk management consulting
Remote diagnostic imaging service
Research, consulting and planning related to production and sales promotions for supermarkets and other retailers
Business planning and proposals
Investment in operating companies

DNP Holding USA Corporation

Investment in operating companies

DNP Business Consulting（Shanghai) Co., Ltd.*

Study of Chinese market and business feasibility

DNP Asia Pacific Pte. Ltd.

Coordination of DNP business operations in Southeast Asia region

Personal Welfare, Facility Service and Others
DNP Facility Services Co., Ltd
DNP Information Systems Co., Ltd.
DNP Metro Systems Co., Ltd.
DNP Hokkaido Co., Ltd.
DNP Tohoku Co., Ltd.
DNP Chubu Co., Ltd.
DNP Nishi Nippon Co., Ltd.
DNP Human Services Co., Ltd.
DNP Accounting Services Co., Ltd.
DNP Techno Research Co., Ltd.*Sanshi Kosan Co., Ltd.
DNP Business Partners Co., Ltd.*

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
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
Planning and management related to personnel plans
Accounting agency and consulting
Studies related to patents
Lease and management of real estate, etc.
Office support business

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

DNP Taiwan Co., Ltd.

Sale of precision electronic components

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

DNP America, LLC

Sale of printed matter, precision electronic components and decorative materials

DNP Europa GmbH*

Sale of printed matter and decorative materials

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

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

Mobility
DNP Tamura Plastic Co., Ltd.
NTEC Co., Ltd.
DNP Living Space & Mobility (Shanghai) Co., Ltd.*

Manufacturing and sale of automotive accessories
Manufacturing of molds
Sale of printed matter (Products and services of Living Space and Mobility business)

60
5(CNY1,000)
10,000100.0
89.0（89.0）
100.0(100.0)Industrial high-performance materials
DNP High-performance Materials Co., Ltd.

92

Production of lithium-ion battery components

200

100.0

100.0

(KRW1,000)
800,000(TWD1,000)
10,000(SGD1,000)
350(USD1,000)
100(EUR1,000)
92

100.0
100.0
100.0
100.0
(100.0)100.0

Beverages
Hokkaido Coca-Cola Bottling Co., Ltd.

Production and sale of beverages

2,935

59.7（ 2.2 ）Notes: 1. Voting rights ownership ratios (in parentheses) indicate the percentage of shares owned through DNPʼs subsidiaries or affiliates.
2. Companies with an asterisk are neither consolidated nor accounted for by the equity method.

DNP Integrated Report 2023

93

6 ｜ BUSINESS RESULTS/CORPORATE PROFILE

Our Products and Services
Smart Communication

1

2

7

8

3

4

10

11

5

6

12

13

14

• Imaging communication
1 Dye-sublimation thermal transfer printing media andthermal mass transfer printing media
2 Photo-related services and solutions
3 Dye-sublimation photo printer• Information Security
4 BPO
5 Smart cards and magnetic cards
6 Identity verification service
7 Transparent hologram ribbon• Content & XR communication
8 Metaverse
9 Virtual reality

9

仁和寺「金堂」内陣のVR• Marketing
10 Digital flyer• Publishing
11 Books and magazines 12 Hybrid bookstore network
13 Maruzen & Junkudo Bookstore in Shibuya (Tokyo)

Shibuya Miyashita Park
powered by metaverse• Education
14 Educational ICTLife & Healthcare

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

38

• Mobility and industrial high-performance materials
15 Battery pouch for lithium-ion batteries
16 Photovoltaic module components
17 Multifunctional insulation box
18 Curved resin glazing
19 Interior coverings for railway cars (Hokuriku Shinkansen)• Medical & healthcare
20 Regenerative medicine(providing 3D human intestinal organoids “mini-guts” )21 Remote image diagnosis• Packaging
22 Plant-based packaging materials
23 Mono-material packaging materials
24 Transparent vapor deposition film
25 Super high-barrier paper packaging materials
26 PET plastic bottles 27 Aseptic filling systems for PET plastic bottles• Living spaces
28 Decorative film for exterior
29 Antiviral steel plates
30 Aluminum panels for interior/exterior• Beverages

Electronics

With film,
no backgroundreflection

Before• Digital interfaces
31 Optical film used for displays
32 OLED display-related products
33 Large-size photomask for displays
34 Viewing angle control film for in-vehicle displays(right: with film, no background reflection)
35 Light control film
36 Encoder disks
37 High visibility pattern light
38 System components for LCD backlight• Semiconductors
39 Photomask for semiconductors
40 Master template for nanoimprinting
41 Hard disk drive suspension
42 Lead frame for compact semiconductor package
43 Diffractive optical element (DOE)
44 Vapor chamber
45 Micro electro mechanical systems (MEMS) products

94

After

39

40

41

42

43

44

45

DNP Integrated Report 2023

95

6 ｜ BUSINESS RESULTS/CORPORATE PROFILE

Investor Information (As of March 31, 2023)

Dai Nippon Printing Co., Ltd.
Share Price Evolution (Tokyo Stock Exchange)＊1

Head Office: 1-1, Ichigaya-Kagacho 1-chome, Shinjuku-ku, Tokyo 162-8001, Japan
Established: 1876
Number of Employees (consolidated): 36,246
Paid-in Capital: ¥114,464 million
Number of Common Stocks: Authorized: 745,000,000 shares
Issued: 292,240,346 shares
Number of Trading Unit Shareholders (own 100 or more shares): 23,430
Stock Exchange Listing: Tokyo Stock Exchange

TOPIX

Increase (%)

100
4,000
80
3,500

(thousands)

SharesPercentage

The Master Trust Bank of Japan, Ltd. (Trust Account)
Custody Bank of Japan, Ltd. (Trust Account)
The Dai-ichi Life Insurance Co., Ltd.
Employeesʼ Shareholding Association
ELLIOTT INTERNATIONAL LP
Mizuho Bank, Ltd.
Nippon Life Insurance Company
STATE STREET BANK WEST CLIENT ‐ TREATY 505234
JP MORGAN CHASE BANK 385781
THE LIVERPOOL LIMITED PARTNERSHIP

47,932
16,596
8,894
7,771
6,477
5,706
4,735
4,256
3,463
3,048

18.33
6.35
3.40
2.97
2.48
2.18
1.81
1.63
1.32
1.17

60

3,000

40

(%)

20

2,500

0

2,000

−20

1,500

21

22

Fiscal Year-end: March 31
Independent Auditor: ARK LLC
Annual Meeting of Shareholders:
The annual meeting of shareholders of DNP is normallyheld 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.global.dnp

23＊1 Index 100 = March 31, 2020

Total Shareholder Return＊2 (TSR)
Fiscal year ended

Note: 1. The ownership stakes are based on the total number of shares outstanding less treasury shares (261,526,877).
2. The number of treasury shares is excluded from the figures above.

2019.3

DNP (%)TOPIX (%)

2020.32021.32022.32023.3123.34110.51114.24142.58183.12（94.96）（85.94）（122.15）（124.57）（131.82）＊2 Represents total investment return to shareholders, combining capital gains and dividends. The TSR calculation method is as follows: (Stock price at the end of each fiscal
year + the total amount of dividends per share up to each fiscal year starting from four fiscal years prior to the fiscal year ended March 31, 2023 ÷ the stock price at theend of the fiscal year ended March 31, 2018.)

Voting Rights (As of March 31, 2023)

Number of stocks(stocks)

Type

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

Dai Nippon Printing Co., Ltd.
Total

Number of voting rights(rights)

―

―

―

―

―

―

30,713,400―

261,274,800
252,146
292,240,346

2,612,748―

2,612,748

Treasury Stocks (As of March 31, 2023)
Holder96

Nikkei Average

DNP Stock Price (yen)Major Shareholders (As of March 31, 2023)

Stock Code: 7912
Administrator of Shareholder Register:Mizuho Trust & Banking Co., Ltd.
Stock Transfer Agency Department
3-3, Marunouchi 1-chome, Chiyoda-ku, Tokyo, Japan
American Depositary Receipts:
Ratio (ADR:ORD): 2:1
Exchange: OTC (Over-the-Counter)
Symbol: DNPLYCUSIP: 233806306
Depositary:
The Bank of New York Mellon
240 Greenwich Street, New York, NY 10286, U.S.A.
Telephone: (201) 680-6825
U.S. toll free: 888-269-2377 (888-BNY-ADRS)URL: http://www.adrbnymellon.com/

DNP(Between April 1, 2021 and March 31, 2023)――

No. of stocks held

Percentage of holding to
No. of outstanding shares

30,713,400
30,713,400

10.51
10.51

DNP Integrated Report 2023

97

6 ｜ BUSINESS RESULTS/CORPORATE PROFILE

Message from the Director in Charge

Dialogues with Shareholders and Investors
Policy for initiatives

The DNP Group will seek to rapidly achieve and maintain a PBR of more than 1.0X and aim for further improvement, by sustainably enhancing its
corporate value. To do so, we are expanding opportunities such as financial results briefings and IR meetings attended by the president and other senior
management personnel, to encourage constructive dialogues with shareholders and investors. The results of these dialogues are also shared with theBoard of Directors and utilized in management decision-making.
DNP personnel responsible for dialogues

Based on the instructions of the president, etc., the director in charge supervises the overall corporate response to dialogues with shareholders andinvestors, which consists of individual responses by the president, directors, executive officers and the IR and Public Relations Division.
Number of dialogues

1. Individual IR meetings

FY2022: approx. 160
FY2021: approx. 150

2. Individual SR meetings

FY2022: 14
FY2021: 16

Main dialogue participants

Analysts, fund managers, engagement managers, voting right holders, etc., primarily from institutional investors in Japan and overseas
Main dialogue themes

Business strategies to improve profitability, financial strategies to improve capital efficiency, non-financial strategies to enhance sustainability,
shareholder returns policy, promotion of information disclosure and strengthening of corporate governance, etc.
Items incorporated based on dialogues and subsequent feedback

Hirofumi Hashimoto, Managing Director• Disclosure of quantitative medium- to long-term management-related targets (ROE 10%, PBR of 1.0X or greater, etc.)• Expanding disclosure of information relating to particular focused business areas, etc.

Main IR activities• General Meeting of Shareholders: once a year • Financial results briefings: twice a year • Sustainability briefings: once a year • Company
briefings for individual investors: irregular • IR meetings: 150–170 companies per year (domestic and overseas) • Issuance of IR-related tools:
integrated reports, shareholder newsletters, etc. • Information disclosure on IR website

Recognition from society (As of June 30, 2023)

DNP has been highly evaluated by ESG evaluation agencies throughout the world and has been selected for inclusion in numerous ESG indexes in Japanand overseas.
For example, DNP has been selected for the FTSE4Good Global Index for the 23rd consecutive year since 2001, and for the MSCI ESG Leaders
indexes for the 7th consecutive year since 2017.
In addition, in 2022 we were certified by CDP, an international non-profit organization that provides environmental information disclosure systems,
as an “A-List ” company ̶ the highest rating for our efforts in addressing climate change. We have also received a silver rating from EcoVadis, which
evaluates the sustainability of business enterprises.
ESG indexes
FTSE4Good Global Index

98

Recognition regarding sustainability
FTSE Blossom Japan Index

FTSE Blossom Japan Sector Relative Index

MSCI ESG Leaders indexes

MSCI Japan ESG Select Leaders Index

MSCI Japan Empowering Women (WIN) Index

THE INCLUSION OF Dai Nippon Printing IN ANY MSCI INDEX, AND THE USE OF MSCILOGOS, TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN, DO NOTCONSTITUTE 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 INDEX NAMES AND LOGOSARE TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS AFFILIATES.

THE INCLUSION OF Dai Nippon Printing IN ANY MSCI INDEX, AND THE USE OF MSCILOGOS, TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN, DO NOTCONSTITUTE 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 INDEX NAMES AND LOGOSARE TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS AFFILIATES.

THE INCLUSION OF Dai Nippon Printing IN ANY MSCI INDEX, AND THE USE OF MSCILOGOS, TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN, DO NOTCONSTITUTE 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 INDEX NAMES AND LOGOSARE TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS AFFILIATES.

Euronext Vigeo Eiris World Index 120

Morningstar Japan ex-REIT Gender Diversity Tilt Index

S&P/JPX Carbon Efficient Index

We will create diverse opportunities for
dialogue, fulfill our responsibilities fortimely and appropriate explanation andwork to create a better future together
with our stakeholders.

CDP A LIST

EcoVadis Sustainability Rating

DX Brand 2023

At DNP, we always value Taiwa (dialogues) with many stakeholders as opportunities to create newvalue. In particular, we are working to increase opportunities for dialogue with shareholders andinvestors, such as through day-to-day IR meetings, various briefings and general meetings ofshareholders.
In the fiscal year ended March 2023, in addition to semiannual financial results briefings, we helda sustainability briefing in November 2022, and a briefing session in March 2023 to explain theoutline of the new medium-term management plan, in response to the DNP Group's BasicManagement Policy announced in February 2023. The frank opinions received at these briefings will
be a great asset for DNP itself to create a better future through collaboration with stakeholders.
In addition, in order to deepen the level of dialogue and cooperation and make them more fruitful,
we are working to disclose DNPʼs efforts to increase corporate value by utilizing financial andnon-financial capital in an integrated manner through various information media. As well as
communicating a variety of content on our corporate website in a timely manner throughout the year,with the cooperation of both internal and external stakeholders, we also plan, edit, and publish aquarterly shareholder newsletter (DNP Report), quarterly reports, and annual Integrated Report,
annual Environmental Report and annual Securities Report, etc.
In the DNP Group Integrated Report 2023, we reflected on stakeholder feedback and worked tosolve the following three issues.
• Clarifying details of DNPʼs unique competitive edge and specific long-term strategies• Identifying appropriate management indicators and strategies to achieve ROE and other targets• Linking sustainability-related themes with business strategies and clarifying initiatives toimprove corporate value with an awareness of material issues
In response to these issues, we have worked to enhance the content of the report, focused primarilyon the medium-term management plan for fiscal 2023-2025. We aim to continue deepening the levelof our communication with you going forward, and hope for your continued guidance and support in
the future.

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99