LINTECANNUALREPORT2013
For the year ended
March 31, 2013

LINTECGrowth
Sustained
Driven by

Our

Strengths

Business
ness
Model
del
Our
UniqueStrengths

Founded in 1927, LINTEC is a comprehensive manufacturer of adhesive products andspecialty papers. Our mainstay adhesive papers and ﬁlms for seals and labels are used in
an array of products around you, including daily necessities, food, medicine, stationery, andconsumer electronics. LINTEC’s products are not limited to only the seals and labels ﬁeld,
as it has steadily extended its engagement with the industrial world through window ﬁlms
for applying to window glass, sheet materials for outdoor signs and interior ﬁnishing, andautomobile-use adhesive products.

LINTEC ANNUAL REPORT 2013

Furthermore, the Group’s performance is currently being strongly driven by products
leveraging cutting-edge adhesive and release technologies based on the development resultsof the above items, such as semiconductor-related tapes, optical functional ﬁlms for LCDs,
and coated ﬁlms for electronic component production, which are enjoying increased demand
due to greater usage of smartphones and tablets. Rather than remaining in one specializedpart of the market, by handling a wide variety of products including these kinds of growing ﬁelds
we are building a business structure that is more resilient to changes in economic conditions.

LINTEC ANNUAL REPORT 2013

1

R&D
Capabilities

As a technology-centered company, LINTEC is supplying various sheet materials making
use of precise thin-ﬁlm coating technologies as well as designing and developing adhesives
and surface coatings. It is also working on related equipment for attaching and removing
adhesive products and performing printing. By offering label printing machines, labelingmachines, electronic devices, and other such items alongside a broad spectrum of adhesive
products within a total package, we are meeting a wide range of customer needs.

2

LINTEC ANNUAL REPORT 2013

GlobalExpansion
From its launch of label printing machines and adhesive products onto the Chinese market
in 1974, LINTEC has steadily been globalizing its operations. Presently it is focusing efforts
on further expanding its network centered on rapidly growing markets in Asia, including
China, Taiwan, South Korea, Indonesia, Singapore, Thailand, Malaysia, Vietnam, and India.
In line with these efforts, we are actively cultivating globally-oriented staff.

LINTEC ANNUAL REPORT 20133

Corporate
CultureThe spirit of valuing free discussion and communication has been handed down as a tradition
at LINTEC. While we place a priority on harmonious teamwork, our corporate culture
respects the creative ideas of individual employees. These ideas have been the driving force
behind LINTEC’s development of high-value-added products. We are achieving continued
growth through all LINTEC employees proactively striving to create innovation, rather thanbeing satisﬁed with the current state of affairs.

4

LINTEC ANNUAL REPORT 2013

Linking
your dreams
to the future through technologies.
We are LINTEC.
Linkage + Technology = LINTEC
Reﬂected in our company name, LINTEC—formed from “linkage” and “technology”—
our entire workforce is strongly committed to linking people with technologies
to create new value. Our four characteristic technologies are adhesive applications,surface improvement, system development, and specialty papers and release materials
production, and by blending these at a high level, we are creating products andtechnologies our customers have never seen before, enabling them to turn their
dreams into reality. Further, our goal is to implement corporate social responsibility(CSR) -based management to further develop as a company that is highly regarded andtrusted by all of its stakeholders.

Contents
6 Our Business- 6 Business Overview
8 Our Performance- 8 Performance Highlights
10 Our Management- 10 From the President
14 Our Growth Foundation- 14 R&D Activities and Intellectual Property- 18 Corporate Social Responsibility- 20 Corporate Governance- 22 Corporate Ofﬁcers
23 Financial Section
50 Investor Information

LINTEC ANNUAL REPORT 20135

Our BusinessBusiness Overview

Share of Net Sales

Share of Operating Income
Adjustments

0.1%
22.5%

18.7%

FY2013

FY2013

Net Sales

Operating Income

43.4%

47.1%

¥190.8 billion¥10.6 billion

37.9%

30.3%
Printing and Industrial Materials ProductsElectronic and Optical Products

Paper and Converted Products

Printing and Industrial Materials ProductsThis segment consists of Printing and variable information products operations and Industrial
and material operations.
In our Printing and variable information products operations, we conduct the production and salesof adhesive papers and ﬁlms for seals and labels, which are the LINTEC Group’s mainstay products.
Our adhesive ﬁlms perform particularly well, boasting a share of over 50% of the domestic
market. We are also targeting the expansion of our share in such overseas markets as China
and Southeast Asia through the enhancement of production and sales bases in these markets.
In our Industrial and material operations, we deal in a wide variety of products, including
specialty adhesive products for use in automobiles and mobile devices, PV backsheets, label
system-related equipment, materials for outdoor signs and interior ﬁnishing, and evenwindow ﬁlms for saving electricity and glass shatter-prooﬁng purposes for which demandhas been growing in recent years.
Printing and Variable
Information Products Operations
Main Products• Adhesive papers and ﬁlms for seals
and labels• Label printing machines

6

LINTEC ANNUAL REPORT 2013

Industrial and Material Operations
Main Products• Automobile-use adhesive products• Industrial-use adhesive tapes• PV backsheets• Barcode printers• Labeling machines• Films for outdoor signs and advertising• Interior ﬁnishing mounting sheets• Window ﬁlms

P.23
Management’s Discussion and Analysis
Please see pages 23-24.

Electronic and Optical ProductsThis segment consists of Advanced materials operations and Optical products operations.
In our Advanced materials operations, we develop and provide such products as specialized
adhesive tapes and related equipment essential in semiconductor manufacturing andmounting processes as well as coated ﬁlms for multilayer ceramic capacitor (MLCC) production and various materials for touch screens.
In our Optical products operations, we conduct adhesive processing for optical functionalﬁlms, including polarizing ﬁlms and retardation ﬁlms used to make LCDs; surface improvement processing for polarizing ﬁlms, such as antiglare hard coat processing, which protects
ﬁlms from scratches and reduces reﬂectivity; and the manufacturing of protection ﬁlms forpolarizing ﬁlms.
Advanced Materials Operations

Optical Products Operations

Main Products• Semiconductor-related tapes and equipment• Coated ﬁlms for MLCC production• Touch screen-related products

Main Products• Polarizing ﬁlms and retardation ﬁlms
(adhesive processing)• Polarizing ﬁlms
(surface improvement processing)• Protection ﬁlms for polarizing ﬁlms

Paper and Converted ProductsThis segment consists of Fine and specialty paper products operations and Converted
products operations.
In our Fine and specialty paper products operations, we produce and sell color papers forenvelopes and colored construction papers, products for which LINTEC holds the leading
share in domestic markets; lint-free papers for use in cleanroom environments that almost
completely prevent the occurrence of dust; oil-resistant papers for food packaging; high-grade
printing papers with special textures; and high-grade papers for paper products used forbusiness cards and postcards.
In our Converted products operations, we provide release papers and ﬁlms that protect
the adhesive surfaces of a variety of adhesive products. Additionally, we produce casting
papers that are used as patterning papers for placing designs on synthetic leather. We also
manufacture casting papers for carbon ﬁber composite materials, essential for the processof hardening the ﬁne carbon ﬁber into sheet form. Demand is expected to rise for carbon
ﬁber with increased usage, such as in the bodies of aircraft.
Fine and Specialty Paper Products Operations

Converted Products Operations

Main Products• Color papers for envelopes• Colored construction papers• Special function papers• High-grade printing papers• High-grade papers for paper products

Main Products• Release papers and ﬁlms foradhesive products• Casting papers for synthetic leather• Casting papers for carbon ﬁber
composite materials

LINTEC ANNUAL REPORT 20137

Our Performance

Performance Highlights
LINTEC Corporation and its consolidated subsidiaries
Years ended March 31

Financial Data

Millions of yen

Thousands of
U.S. dollars*% change

2013

2012

2011

2013

2013 / 2012

¥190,844¥200,905¥212,733$2,029,179(5.0)

Operating income

10,564

13,97520,889112,329(24.4)

Income before income taxes

10,836

13,382

19,565

115,219(19.0)Net income

7,681

8,648

13,622

81,671(11.2)

Return on equity (ROE)

5.6%

6.6%

10.9%

—

—

Net income¥ 102.83¥ 115.26¥ 180.21$ 1.09(10.8)Net assets

1,909.57

1,766.60

1,715.78

20.30

8.1

34.00

40.00

40.00

0.36

(15.0)¥ 10,141¥ 10,079¥ 10,178$ 107,833

0.6

Capital expenditures

12,293

11,684

10,058130,715

5.2

Net cash provided by operating activities

19,61918,91023,307

208,606

3.7

Net cash used in investing activities(13,966)(12,262)(9,926)(148,499)

13.9

Net cash used in ﬁnancing activities(2,877)(5,099)(2,820)(30,593)(43.6)Cash and cash equivalents

40,73936,03635,188433,172

13.1

Total assets

216,048210,203206,188

2,297,163

2.8

Net assets

143,569

132,847

130,576

1,526,526

8.1

2013

2012

2011

2013

2013 / 2012

184

169

183

—

8.9

Number of employees

4,270

4,286

4,198

—

(0.4)

Disabled employee employment ratio (%)

1.74

1.71

1.73

—

—

Net sales

Per share data (yen and dollars)

Cash dividends

Depreciation and amortization

Non-Financial Data
CO2 Emissions (1,000 tons of CO2)

* The U.S. dollar amounts are translated, for convenience only, at the rate of ¥94.05 to U.S.$1, the exchange rate prevailing on March 31, 2013.

8

LINTEC ANNUAL REPORT 2013

P.26
Financial Summary
Please see pages 26-27.

Net Sales

Operating Income¥ Billion
250¥ Billion
25

190.8

200

20

150

15

100

10

50

5

10.6

0

2004

2005

2006

2007

2008

2009

2010

2011

2012

0

2013 FY

Net Income / ROE

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013FYNet Income per Share / Cash Dividends per Share¥ Billion
15

%
15

¥
200

¥
50

12

12

160

40

9

120

6

80

20

3

40

10

0

0

34
9

7.7

6

102.83

30

5.6
3
0

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013 FY

2004

2005

2006

2007

2008

Net Income

Net Income per ShareROE (right scale)

Cash Dividends per Share (right scale)

Cash Flows

Total Assets / Net Assets¥ Billion
30¥ Billion
250

2010

2011

2012

2013 FY

0

216.0

19.6

20

2009

200

10

143.6

150

0

100

(2.9)
–10
–20

50

(14.0)
2004

2005

2006

2007

2008

2009

2010

2011

2012

2013 FY

0

2004

2005

Net Cash Provided by Operating Activities

Total Assets

Net Cash Used in Investing Activities

Net Assets

2006

2007

2008

2009

2010

2011

2012

2013 FYNet Cash Used in Financing Activities

LINTEC ANNUAL REPORT 20139

Our Management

From the President

A Look Back at the Fiscal Year under Review
Sales and income were down due to stagnation in overseas economies
and yen appreciation.
In the ﬁscal year under review, ended March 31, 2013, the world
economic environment was tough overall, despite gentle recovery in
the United States buoyed by improvements in the housing market andconsumer spending. Conditions in Europe became more difﬁcult due tothe worsening of the debt crisis and the employment situation, while
emerging economies such as China and India experienced a slowdown
in growth as a result of stagnation in exports to Europe and personal
consumption. In Japan, expectations of economic recovery are risingfollowing high stock prices and the correction of yen appreciation since
the end of last year, but recovery is proving to be extremely slow becauseof reduced exports related to the poor state of overseas economies andover-appreciation of the yen as well as declining consumer conﬁdence.
As a result of the above factors, sales and income both declined incomparison with the year ended March 31, 2012, with consolidated net
sales down 5.0% year on year, to ¥190.8 billion, operating income down
24.4%, to ¥10.6 billion, and net income down 11.2%, to ¥7.7 billion.

Net Sales

Operating Income / Net Income¥ Billion
250¥ Billion
25

190.8

200

20

150

15

100

10

50

5

0

2009

2010

2011

2012 2013 FY

0

10.6
7.7

2009

2010

2011

Operating Income
Net Income

P.23
Performance by Operational Segment
For details of performance by operational segment,
please see “Performance by Operational Segment” on page 23.

10

LINTEC ANNUAL REPORT 20132012 2013 FY

Forecasts for the Fiscal Year Ending March 31, 2014
Following domestic and overseas economic recovery, we expect increased sales and income.
Regarding forecasts, although concerns remain about Europe’s economic stagnation,
recovery is strengthening in the United States, and stable growth is expected to continue
in emerging economies, including China and India, as a result of recovery in exports andconsumer spending. In Japan too, better corporate performance from improvement in theexport environment, due to factors including yen depreciation and a pickup in overseas
demand, as well as an upturn in consumer conﬁdence stemming from high stock prices
are expected to lead to genuine recovery in the second half of the ﬁscal year.
In this economic environment, in the ﬁscal year ending March 31, 2014, we are forecasting
net sales of ¥210.0 billion, up 10.0% year on year, operating income of ¥15.0 billion, up 42.0%,
and net income of ¥10.5 billion, up 36.7%.

Forecasts by Operational Segment
Printing and Industrial Materials Products:

Electronic and Optical Products:

Paper and Converted Products:

net sales ¥90.5 billion, up 9.3% year on year,

net sales ¥82.4 billion, up 14.0% year on year,

net sales ¥37.1 billion, up 3.9% year on year,

operating income ¥3.8 billion, up 58.3%

operating income ¥7.1 billion, up 121.9%

operating income ¥4.1 billion, down 18.0%

Printing and variable information
products operations

Advanced materials operations

Fine and specialty paper products operations• Semiconductor-related tapes: growth• Special function papers: increased• Adhesive papers and ﬁlms for seals

through continued increase in demand

demand for oil-resistant papers andand labels: increased domestic demand

related to mobile products, including

other papers

related to food, consumer electronics,

smartphones

and automobiles, and recovery in orders
in Asia
Industrial and material operations• Automobile-use adhesive products:
increased demand as Japanese automobile• Coated ﬁlms for MLCC production:solid sales with traction provided bysmartphone demand. Our ﬁlms are wellregarded for use with high-end products• Touch screen-related products:

manufacturers produce record number offocus on development and sales expansion

vehicles worldwide and sales of two-of new products

wheeled vehicles in Asia show recovery• Window ﬁlms: positive effects of constructing
a direct sales network in the United States

Optical products operations• Optical functional ﬁlms: increased
demand through recovery in orders forConverted product operations• Release papers for ﬂexible printed circuit(FPC) coverlayers: solid sales through positiveeffects of tablet and smartphone demand• Casting papers for carbon ﬁber composite
materials: increased demand due toexpanded usage of carbon ﬁbers, including
in new model passenger aircraft• Casting papers for synthetic leather:trend toward recovery in orders, growthin China

ﬂat-screen TVs and increasingly widespread usage of smartphone andother products

LINTEC ANNUAL REPORT 201311

Our Management

From the President

Activities for the Year Ending March 31, 2014
We are working in unison Company-wide to reform costs.
Capital Expenditures /Depreciation and Amortization¥ Billion
15

Based on its management policy positioning the year ending March 31, 2014, as a year to meetchallenges and move into new growth areas, LINTEC is working to build an operating basethat can reliably create income, despite the difﬁcult operating environment, and to establish

12.3

12

10.1

a strong corporate structure. In April 2013, we reformed our head ofﬁce organization, setting
up a new Cost Innovation Division. Previously, activities for cutting costs were centered on
the Production Division, which achieved a degree of success. However, the Cost Innovation

9

Division is now at the center of cost-cutting efforts, working closely with each plant to6thoroughly eliminate waste, attacking the problem from various directions through measures
including reductions in raw material costs, product integration, eradication of dead stock,3

and rationalization of order acceptance and delivery operations. The division will also actively
0

2009

2010

2011

2012 2013 FY

Capital Expenditures
Depreciation and Amortization

examine and consider the integration and reorganization of facilities at domestic production
and processing sites, including Group companies, and improvement proposals fromsuppliers regarding changes in the means of supply of raw materials. It will make further
efforts, more meticulous than ever, to implement radical reform at a Company-wide level
including not only production divisions but also marketing and R&D divisions.
Activities for the Year Ending March 31, 2014
We will further bolster and expand overseas operations.

Overseas Sales asa Percentage of Total Sales

LINTEC is pushing forward with globalization of its operations, centered in Asia, based on its policyof manufacturing products nearer to customers to ensure a stable supply through local production.
During the ﬁscal year under review, we completed our second plant at LINTEC (SUZHOU)TECH CORPORATION, which produces adhesive ﬁlms for seals and labels and other items,

Overseas

33.7%

and built and put into operation an adhesive ﬁlm and release paper plant at LINTEC(THAILAND) CO., LTD., which was founded in 2011. In the year ending March 31, 2014, we
expect further increases in sales and income through meeting expanded local product

Domestic

demand, development and establishment of new sales routes, and boosted cost competi-

66.3%

tiveness as a result of measures including a greater proportion of local procurement.
In the ﬁscal year under review, we established the company LINTEC HI-TECH (TAIWAN),
INC., as a sales base for Printing and Industrial Materials Products. While considering future
strengthening of cooperation with LINTEC (THAILAND) CO., LTD., and other companies, in Taiwan,
where there are many electronics manufacturing service companies, we are working to expand
sales centered on industrial-use adhesive tapes used in the production of smartphones andtablets. In order to reliably capture demand in emerging economies, we are considering
Vietnam and India as our most promising candidates for building new plants, following ourplant in Thailand, and in preparation for that, we are making efforts to set up sales expansion
and delivery systems in both countries. At the end of 2012, we established a new sales basein Hanoi, Vietnam. We plan to introduce cutting facilities and begin operations by the startof 2014. We are also focusing efforts on expanding operations in the Indian market, and having
completed local incorporation of our representative ofﬁce in New Delhi, we plan to establish

LINTEC (THAILAND) CO., LTD.

12LINTEC ANNUAL REPORT 2013

a delivery center in Mumbai with warehouses and cutting facilities in the ﬁscal year 2014.

As of March 31, 2013, overseas sales represented 33.7% of LINTEC’s total sales, andwe aim to quickly increase this percentage to more than 40% as we continue to work
proactively to globalize our business.
Shareholders Returns
By changing our basic policy, we have clariﬁed the high value we put on shareholders.
LINTEC’s basic policy regarding the appropriation of proﬁts was “to increase businessearnings and strengthen the Company’s ﬁnancial position from a long-term perspective

Cash Dividends per Sharewhile paying dividends that reﬂect consolidated business results.” Based on this policy,
we issued dividends as initially planned, paying ¥34.00 per share, which resulted in¥
50

a consolidated payout ratio of 33.1%.
From ﬁscal year 2014, in order to clarify the high value we put on our shareholders, wechanged our basic policy regarding the appropriation of proﬁts as follows. “LINTEC regards

42.00
40
30

enhancement of return of proﬁts to shareholders as one of its most important management
issues and fundamentally aims to provide stable and continued returns after considerationof each ﬁscal year’s consolidated performance while strengthening its management base.

20
10Internal revenues are used effectively to reinforce the Company’s ﬁnancial base and provide
increased future corporate value through investment in production facilities and R&D.”

0

2010

2011

2012

2013 2014 FY
Forecast

For the ﬁscal year ending March 31, 2014, based on projections of consolidated net incomeof ¥10.5 billion, which will equate to net income per share of ¥140.57, we intend to issue
dividend payments of ¥42.00 per share.
In Closing
As previously stated, as a year to meet challenges and move into new growth areas, we havepositioned the ﬁscal year ending March 31, 2014, as important to LINTEC in returning our
performance to an upward trajectory. Employees throughout the Group will strive in unison
to reform costs and build a lean corporate structure with no waste in order to increase income.
Also, LINTEC’s biggest goal will be to ensure the Group’s products and services are useful forcustomers, and by doing so, steadily increase our loyal users. We will continue to work toprioritize customers and exceed their expectations with our products and services. We will also
consider CSR in all our activities, maintaining high ethical values and a sense of responsibility
as a member of society and promoting CSR management together with all our employees.
In closing, I would like to ask our shareholders and other investors for their continued support.
August 2013

Akihiko Ouchi
President and CEO
LINTEC ANNUAL REPORT 201313

Our Growth Foundation

R&D Activities and Intellectual Property

Basic R&D Policy
By developing functional materials and related processing technologies thatfuse our four core technologies in a sophisticated manner and conducting

Adhesive
applications

research that emphasizes dialogue with markets regarding user needs, we areworking to resolve customers’ technological issues, and through this process
are developing many innovative, market-leading products.
As a technology-centered company, we realize that strengthening R&D

Systemdevelopment

Surface
improvement

capabilities is one of our most important management strategies for achieving
sustainable growth. Therefore, we are developing new high-value-added
products and environmentally friendly products with a particular focus on
growth businesses while also working to accelerate LINTEC’s globalization.

Specialty papers
and releasematerials
production

R&D System
The LINTEC Group’s R&D function is focused in the Research Center within the
Research & Development Division, which has approximately 200 research personnel.
With a complete array of the very latest analytical equipment, pilot coaters, and cleanroom facilities, the Research Center collaborates closely with production engineering
divisions to develop a range of coatings and other products. In the ﬁscal year 2014,
we plan to invest in the further construction of Research Center buildings to bolster
our R&D system. Our Ina Technology Center, also part of the Research & Development
Division, develops and manufactures a wide variety of equipment, particularly semiconductor-related equipment, and also label printing machines and labeling machines.
The Group also has an R&D base in Boston, in the United States, which mainly studies
creative technologies with possible application to adhesive products and industrial-use
multilayer materials, and researches the commercialization of these technologies. We
are not only conducting in-house R&D but are also proactively furthering technologicalalliances between industry, government, and academia. Our goal is to develop newtechnologies and products by integrating different technological areas.
Successful R&D Initiatives in the Fiscal Year under Review
In the ﬁscal year under review, the R&D expenses incurred by the Groupamounted to a total of ¥7.3 billion. The following is an overview of the principal
R&D activities conducted by each operational segment.

R&D Expenses by
Operational Segment in FY2013
8.5%
32.1%

R&D Expenses¥ Billion
8

7.3

59.4%

6
Printing and Industrial Materials Products

4¥2.3 billion
Electronic and Optical Products

2
0

14

¥4.3 billion
Paper and Converted Products
2004

2005

2006

2007

LINTEC ANNUAL REPORT 2013

2008

2009

2010

2011

2012

2013 FY¥0.6 billion

Printing and Industrial Materials Products

Printing and variable information products
In order to meet demand for labels, such as POP and eye-catching labels, that allow
easy reuse or recycling of containers after being removed, we developed labelmaterials using new adhesives. We launched these label materials, which arestrongly adhesive yet leave little glue when removed, as the REPOP brand. We also
added silicone low-adhesion items, which make sticking easier, to our REPOP
series lineup, making possible expansion to a variety of other applications.
In printing equipment-related products, we are developing printing machinesthat are optimally suited to the special characteristics of the Company’s labelmaterials. In the year under review, we continued to improve the LPM-300

REPOP

intermittent letterpress and develop low-priced printing machines for the Chinese
market. We also worked to develop equipment that combines roll-to-roll web
handling technologies and processing technologies.
Industrial and material products
We developed new manufacturing technologies for PV backsheets, used to protect
the backs of PV modules, launching the highly durable Reﬂekt series, which does
not use any adhesives in forming the multilayer structure. We also developed thenew product LAG JET U-IJ E-2203RC, a material for large-sized digital printing
used for glass decoration purposes. It is a silicone low-adhesion item that makes
possible clean and easy sticking through the release of air bubbles and water.
In industrial equipment-related products, meanwhile, our development activities
are centered on labeling systems for the automated application of adhesive labels
using LINTEC’s label materials. In the ﬁscal year under review, we continued tofocus on the development of equipment for the automobile, distribution, and mailorder industries.
Electronic and Optical Products

Semiconductor-related materials
Through the DBG+LE system that combines dicing before grinding (DBG) systemtechnology with LE tape technology, which can create tape that functions as bothdicing tape and die bonding tape, we made possible even thinner large-scale
integration (LSI) chips with more layers, which are suitable for solid state drives(SSDs) that are an alternative to hard disk drives.
In electronic equipment-related products, our development activities are centeredon application equipment that facilitates the efﬁcient use of the protection tapes
for wafer surfaces and dicing tapes used during semiconductor chip manufacturing
back-end processes. In the ﬁscal year under review, we continued to focus devel-

Semiconductor-related equipment

opment efforts on equipment compatible with ultrathin silicon wafers as well as onprocessing methods and environmentally friendly equipment.

LINTEC ANNUAL REPORT 201315

Our Growth Foundation

R&D Activities and Intellectual Property

Optical functional materials
We developed adhesives for polarizing ﬁlms and touch screens used in mobile
products. We also developed special ﬁlms that can control the region of diffusion
through proprietary optical design. We have expectations that these materials will
be used in displays and digital signage applications.
Paper and Converted Products

In specialty papers, we developed the new high-grade white printing paper Nuage,
which is suitable for offset printing, mimeograph printing, and a wide variety of
imprinting such as laser, inkjet, and thermal transfer, as well as being optimal for
on-demand printing. We also developed parking ticket paper that excels in being
easy to feed, punch, and apply magnetic coating to.
In release materials, with the goal of enhancing our lineup of environmentallyfriendly products, we launched two new release papers that are produced with nonsolvent formulations. We also developed a coating that curtails decreases in opticalproperties by preventing compounds leaking from polyester ﬁlms in hot

Nuage

environments.
Intellectual Property Activities
The LINTEC Group aims to increase corporate value by developing original productsthat meet customer needs. We therefore realize that intellectual property, such as
patents, trademarks, and design rights, are important management resources.

Patent Applications andApprovals (Japan)
500

290

Further, we have established the Intellectual Property Department within the
Research & Development Division. This department promotes strategic Companywide intellectual property activities that are absolutely essential to our existence

300
240

400

336
300

180

200

120

100

60

as a technology-centered company by handling patent application processes, vigilantly monitoring these rights to prevent infringement, participating in productdevelopment from the ﬁrst stages, and seeking to uncover new invention candidates at R&D sites.
The Company places the utmost emphasis on observing the intellectual property

2009

2010

2011

rights of other companies as well as increasing the number and quality of patent

Total Applications

applications and rights acquisitions. Accordingly, we are working to expand andApprovals (right scale)build our portfolio of patents for foundation businesses and growth businesses, toprovide intellectual property support for operations shifting to overseas locations,and to train more employees with a view to advancing and accelerating development
processes. Through those efforts, we aim to improve proﬁtability based on our
intellectual property.

16

0

LINTEC ANNUAL REPORT 20132012 2013 FY

0

R&D Topics
At the forefront of semiconductor-related tape development
LINTEC’s semiconductor-related business began in 1984 with the development of a ﬁxing tapeproduct to be used in the wafer cutting process. It was a tape called dicing tape that held the wafer
ﬁrm with great adhesive strength at the time of cutting and then after cutting was irradiated withultraviolet rays to reduce the adhesive strength, making it possible to cleanly and easily pick up thechips one by one. LINTEC’s technology, which allowed predictable control of adhesiveness, createda revolution in the industry, and the Company has since launched many such high-performance
products onto the market under the Adwill (Adhesion Level at Will) brand. LINTEC boasts thehighest market share in the global dicing tape market and is also establishing a strong positionin the surface protection tape ﬁeld.
Semiconductor chip manufacturing back-end processes

Wafer following
circuit formation

Lamination of
surface protection tape

Dicing(wafer cutting)

UV irradiationof tape

ReverseBack grinding(wafer thinning)

Lamination ofdicing tape

Picking up

Die bonding

Recently in the semiconductor industry, in order to make the semiconductor package even smaller

ReverseRemoval of
surface protection tape

Molding

Various methods for mounting chips

and slimmer and to simplify processes, rather than using the wire bonding method whereby chips

Chip

are connected to the substrate with wires, it is becoming common to use either the ﬂip chip

Wire
Adhesivemounting or the through-silicon via method. In the ﬂip chip mounting, bump electrodes are formedon the circuit side of the chip, and the chip is ﬂipped so that the circuit side is facing downward

Wire bonding

when it is mounted on and connected to the substrate. In the through-silicon via method, holes

Substrate

Chip

are made in the chips themselves and electrodes passed through the chips, which are layered, so
as to connect each layer to the substrate. Accompanying the common use of these methods, as
large bump electrodes are formed on the circuit side and reverse side of the wafer, development

Flip Chip

Bump electrodeAdhesive
Substrateof surface protection tape and dicing tape able to withstand unevenness on both sides has becomeChipa major research theme.

Through-silicon via
Bump electrode

LINTEC is also expanding its development to include the ﬁeld of materials directly used in

Adhesivethe composition of semiconductor packages. An example is adhesive used for chip mounting

Chipand stacking. As mounting technologies evolve, demand is arising for adhesives that allow bumpelectrodes to completely break through and come into contact with lower layers. We are also

Substrate
Through-silicon via

developing and proposing unique products based on our entirely proprietary ideas and technologies,
such as back surface protection tape with improved heat dissipation for use in ﬂip chip mounting
and sealant tape that can be used in a wider range of ﬁelds than difﬁcult-to-handle liquid resins.
We will continue to leverage the special features of our adhesive tapes and bring innovation to

Back surface protection tapefor ﬂip chip mounting
Tape

semiconductor manufacturing processes going forward.

LINTEC ANNUAL REPORT 201317

Our Growth Foundation

Corporate Social Responsibility

Basic Approaches and Promotion System

CSR Promotion System As of April 1, 2013

The LINTEC Group is furthering its activities centered on

President and CEO

corporate social responsibility (CSR) activities that are based on
its company motto, “Sincerity and Creativity.” We have set our

CSR Management Ofﬁce

basic CSR approaches as, “thorough implementation of corporate
ethics and compliance,” “shareholder- and investor-oriented

Audit Ofﬁce

Corporate Ethics Committee

management,” “improved customer satisfaction,” “environmentallyfriendly operations,” “social contribution,” and “safety- andhealth-related activities,” and are conducting CSR activities
throughout the Company centered on the CSR Management Ofﬁce,

Investor Relations Committee

Public Relations Ofﬁce
General Affairs & Personnel Division
Administration Division

Customer Satisfaction Committee
Environmental Preservation Committee

which reports directly to the president, and its six subcommittees,
which consist of members from all areas of the Company.

Corporate Strategic Ofﬁce

Social Contribution Committee

In 2011, LINTEC announced its participation in the United
Nations Global Compact. We practice CSR management based

Safety, Disaster Prevention,and Health Committee

Business Administration Division
Production Division
Quality Assurance & Environmental
Protection Division
Research & Development Division
Cost Innovation Division

on global standards, such as ISO 26000, paying attention to suchareas as human rights protection, maintenance of labor standards, environmental consideration, and anti-corruption,with the aim of being a company that is trusted and highly respected by the international community.

Basic Commitments of the Committees
Corporate Ethics Committee

Investor Relations Committee

Customer Satisfaction Committee

Treat corporate ethics and compliance

Conduct management that emphasizes

Provide a stable supply of products andas priority management themes andshareholders and investors, and take

improve quality management and ser-ensure that every employee is aware ofaction to improve the corporate brandvice based on the key concepts of

their importance and practices themassuring customers of reliability andevery day

fulﬁlling our responsibilities

Environmental Preservation Committee

Social Contribution Committee

Safety, Disaster Prevention,

As a materials manufacturer, conduct

As a good corporate citizen of both theand Health Committee

Company-wide activities in production,

local communities where we operate

Proactively develop workplace environ-

R&D, and other areas based on theand the wider international community,ments where people can work withprinciple of reducing the environmental

help solve social challenges and carrysecurity, based on the concept of

impact and effectively using resources

out activities that contribute to the sus-

improving employee satisfaction

tainable development of societies
Together with Employees
Respecting human rights and diversity

The LINTEC Group avoids discriminatory treatment of employees based on race,
creed, gender, education, nationality, religion, or age, thereby respecting the diversityof individuals. In the areas of recruitment and employment, the Group complies
thoroughly with labor laws and regulations, including the prohibition of unfair discrimination, child labor, and harassment, and is pushing forward with the creation of
workplace environments where all employees can happily and actively do their jobs.

18

LINTEC ANNUAL REPORT 2013

Providing Value to Customers
Conducting thorough quality management

The LINTEC Group has acquired ISO 9001 certiﬁcation, the international standard
for quality management systems, for its major sites in Japan and overseas. In

Major Quality Problem Rates
by Fiscal Year
(FY 2004 set as a base of 100)

addition, we are working to further reinforce our quality assurance system by

Rate

expanding ISO 9001 to other departments and acquiring integrated certiﬁcation for

100

related sites. We also conduct design reviews, a method for checking materials

80

under development at each stage of the production process from the perspective
60of different divisions, to prevent major quality problems while performing internalmanagement of processes, such as by using defect detection equipment, to stop

40

faulty products from being distributed. As a result of such initiatives, when com-

20

20

paring major quality problems by year, if FY 2004 is set as a base of 100, problems〜〜

0

have declined to 20 by FY 2013.

2004

2010

2011

2012 2013 FY

Environmental Management
Reduction of environmentally unfriendly chemical substances

The LINTEC Group is striving to reduce the use of organic solvents, such as toluene, inthe manufacturing process. In the ﬁscal year ended March 31, 2013, LINTEC used 7,796
tons of toluene (non-consolidated), a cut of 789 tons compared with the previous ﬁscal
year. We are also working on a transition to a solvent-free release agent used in release
papers and a solvent-free adhesive for adhesive papers and ﬁlms for seals and labels.
In the ﬁscal year ended March 31, 2013, 53% of release papers produced were solventfree as were 68% of adhesive papers and ﬁlms for seals and labels sold. Exhaust-gas
treatment facilities have been installed in plants as necessary, and we are making
efforts to reduce our volatile organic compound (VOC) emissions into the atmosphere.

Exhaust-gas treatment facility

FOCUS FEATURE
Saving electricity by applying window ﬁlm for buildings
Window ﬁlm for buildings has a number of effects when applied across the whole of a window, suchas shatter-prooﬁng, preventing glass from ﬂying out or falling when the window breaks due to an
earthquake, controlling heat penetration, and cutting the penetration of ultraviolet rays.
Wincos Heat Cut HCN-75F is based on a combination of Fujiﬁlm Corporation’s technology forcreating a layer to reﬂect near infrared rays through a uniform coating with special particles andthe Company’s proprietary formulation for absorbing near infrared rays. While maintaining brightness
in the room through high transparency, the ﬁlm is highly effective in blocking heat penetration. Unlike
previous metallized ﬁlms, there is no interference with radio waves, and the product is drawing
attention as a simple means of saving electricity.

Please see our CSR website for detailed information about our CSR activities.
http://www.lintec-global.com/csr/

LINTEC ANNUAL REPORT 201319

Our Growth Foundation

Corporate Governance

Basic Philosophyof its oversight systems. The Audit & Supervisory Board Meeting

LINTEC believes that the fundamentals of corporate governanceis held monthly in principle and is attended by the Company’s

are to achieve thorough legal compliance, to increase manage-

two audit & supervisory board members and two external audit

ment transparency and promote corporate ethics, and to make& supervisory board members. In this meeting, by sharing

prompt decisions and effectively execute operations. By enhancing

the results of the business audits performed by each auditor,

and reinforcing corporate governance, we aim to further

the auditors reinforce checks on the decisions of directors

increase our corporate value and joint proﬁts with shareholders.

and operational execution of the Company’s management.

Corporate Governance System

Internal Control Systems

LINTEC has set the term of ofﬁce for directors at one year to

LINTEC is working to ensure the continual effective functioning

make their responsibilities toward shareholders clearer. Also,of internal control systems in order to accomplish appropriate

through implementation of the executive ofﬁcer system, we haveaccounting, comply with laws and regulations, protect company

separated the directors, who make important management

property, and increase efﬁciency of business operations. As

decisions, from the executive ofﬁcers, who are responsible forpart of our efforts, we have set up the Audit Ofﬁce, which

executing operations. The Board of Directors consists of ten

monitors internal control systems, performs process audits,

directors and two external directors. In order to ensure speedy

working together with audit & supervisory board members tomanagement decisions and operational execution amid a ﬂuc-

provide advice on the construction and operation of internal

tuating management environment, Board of Directors Meetings

management systems from a position that is independent

are generally held once a month. Further, management meetingsfrom operational divisions.

are also held once a month, attended by directors, executive

We have also established the CSR Management Ofﬁce,

ofﬁcers, and others. Through the holding of such meetings,

which reports directly to the president and uniﬁes and promotes

we are working to develop optimal management strategies.

a variety of areas, including thorough implementation of

Additionally, LINTEC employs an audit & supervisory board

corporate ethics, product quality control, environmental

system and ensures swift management and the effectivenesspreservation measures, and investor relations.

General Meeting of Shareholders
Appointment /Dismissal

Appointment /Dismissal

Appointment /Dismissal

Management decision

CSR Management Ofﬁce• Corporate Ethics Committee• Investor Relations Committee• Customer Satisfaction Committee• Environmental Preservation
Committee• Social Contribution Committee• Safety, Disaster Prevention,and Health Committee

ReportingBoard of Directors(Directors)

Account /Operational
Auditing

Guidance /Promotion

The Audit &Supervisory
Board

Cooperation

President

Management Meeting(Directors and Executive Ofﬁcers)

Administrative, Marketing, Production,
and Technical Divisions; Domestic
and Overseas Subsidiaries
Operational execution

20

LINTEC ANNUAL REPORT 2013

Audit Ofﬁce
Internal
Auditing(Internal Control)

Cooperation

Account
Auditing

Independent
Auditors

Internal
Control
Auditing

Risk Management System
LINTEC has established Company-wide General Risk Management
Rules, as well as a risk management system for minimizing
damage to corporate value if a major problem arises. It has also

External directors
Name

ShinichiSato

Because he is able to apply his accumulated rich knowledge
and experience as a current director at Nippon Paper
Industries Co., Ltd., to the Company’s management

Satoshi
Ohoka

Because he is able to apply his long years of policy-based
ﬁnance experience, his rich international experience, his
specialist academic experience, and his knowledge andexperience gained as an external director in different
industries from the Company to the Company’s management

implemented and oversees Information Security Management
Rules and Trade Secret Management Rules for the protection
and management of information. There are also Company-wide

Reason for selection as external director

risk assessments centered on the CSR Management Ofﬁce.

External audit & supervisory board members
Limited Liability Contracts

Name

Reason for selection as external audit & supervisory board member

Fumio
Manoshiro

Because he is able to apply his accumulated rich knowledge
and experience as a current director at Nippon Paper
Industries Co., Ltd., to the Company’s auditing system

Kazumi
Idogawa

Because he is able to apply his accumulated specialist knowledge
and experience as a certiﬁed public accountant to the Company’s
auditing system

In accordance with Article 427, paragraph 1 of the Companies
Act, LINTEC has entered into a contract with its individual
external directors and audit & supervisory board membersthat limits liability for compensation for damages under
Article 423, paragraph 1 of the Companies Act. Based on thiscontract, liability for compensation for damages is limited
to ¥10 million or the minimum amount stipulated by law,whichever is greater.

Remuneration of Corporate Ofﬁcers
Total remuneration by corporate ofﬁcer type
Total remuneration by typeInternal Audits and Audit & Supervisory Board Member’s Audits
The ﬁve members of the Audit Ofﬁce are responsible for

Corporate ofﬁcer type

Total
remuneration(Millions of yen)with internal regulations of operations processes and results.
In accordance with audit policy, planning, and separation ofduties, audit & supervisory board members attend Board of

Directors(excluding external directors)

Audit & supervisoryboard members(excluding external audit &supervisory board members)

Number ofpeoplereceiving
Bonuses remuneration

Basic
remuneration

Stock
options

305

241

10

53

8

36

36

―

―

2

16

16

―

―

6

internal audits, regularly performing audits of divisions, worksites, and plants. They also inspects the legality and compliance(Millions of yen)

Directors meetings and management meetings, expressing

External ofﬁcers

opinions and listening to the views of directors and the Internal

Note: Estimated bonus payments were recorded as ¥46 million for the ﬁscal year underreview, but ﬁnal payments were ¥53 million.

Audit Division, and also attend other major meetings andreview important documents. Additionally, they work together

Director remuneration, consisting of basic remuneration,with the Internal Audit Division and accounting auditors tostock options, and bonuses, is decided at Board of Directors

audit all aspects of directors’ activities, receiving reports from

Meetings, based on each director’s duties and responsibilities

accounting auditors and traveling to subsidiaries as necessary

within totals approved at the General Meeting of Shareholders.

to receive operations reports.

Where necessary, the Remuneration Assessment Advisory
Committee assesses and provides advice and makes sugges-

External Directors and External Audit & Supervisorytions to the president and CEO about decisions regarding

Board Members

the assessment and remuneration of directors.

LINTEC has selected Shinichi Sato and Satoshi Ohoka as

Audit & supervisory board member remuneration isexternal directors and Fumio Manoshiro and Kazumi Idogawa

decided through the collective deliberation of the auditors,

as external audit & supervisory board members.

based on each member’s duties and responsibilities within
totals approved at the General Meeting of Shareholders.

LINTEC ANNUAL REPORT 201321

Our Growth Foundation

Corporate Ofﬁcers
As of June 26, 2013

President and CEO

External Directors

Shinichi Sato
Akihiko Ouchi

Managing Executive Ofﬁcer, Nippon Paper Industries Co., Ltd.

Director, Vice President Executive Ofﬁcer, CFO

Satoshi Ohoka
Lecturer, Chuo University, Graduate School of Commerce
Outside Director, Ryobi Limited
Member of LINTEC Independent Committee

Hitoshi Asai
General Manager, Administration Div.,in charge of General Affairs & Personnel Div.

Director, Vice President Executive Ofﬁcer

Audit & Supervisory Board Members
Keita Yoshikawa
Toshio Yamamoto

Shigeru Kawasaki
General Manager, Business Administration Div.

Directors, Senior Managing Executive Ofﬁcers

External Audit & Supervisory Board Members
Fumio Manoshiro
Director, Managing Executive Ofﬁcer, Nippon Paper Industries Co., Ltd.

Kazumi Idogawa
Certiﬁed Public Accountant

Managing Executive Ofﬁcers
Koji Ichihashi
Assistant General Manager, Business Administration Div.

Yoshiyuki Yamato
General Manager, Quality Assurance & Environmental Protection Div.

Kazuma Okamoto
General Manager, Osaka Branch Ofﬁce, Business Administration Div.

Kenji Kobayashi
General Manager, Research & Development Div.

Seiji Takemura
General Manager, Cost Innovation Div.

Toshikazu Yamada
Koji Koyama
General Manager, Production Div.,in charge of Quality Assurance & Environmental Protection Div.

Directors, Managing Executive Ofﬁcers

Plant Manager, Tatsuno Plant, Production Div.

Executive Ofﬁcers
Koichi Kimura
Assistant General Manager, Cost Innovation Div., General Manager, Procurement Dept.

Masami Kozuka
Plant Manager, Agatsuma Plant, Production Div.

Makoto Iiumi
Assistant General Manager, Business Administration Div.

Gohei Kawamura
Chairman & President, LINTEC (SUZHOU) TECH CORPORATION

Hiroyuki Nishio
General Manager, Corporate Strategic Ofﬁce andCSR Management Ofﬁce,
in charge of Cost Innovation Div.

Tsunetoshi Mochizuki
General Manager, General Affairs & Personnel Div. and Human Resource Dept.

Shuji Morikawa
General Manager, Industrial & Material Operations, Business Administration Div.

Kazuyoshi Ebe
General Manager, Optical Products Operations,
Business Administration Div.,in charge of Shingu Plant, Production Div.

Takashi Nakamura
General Manager, Fine & Specialty Paper Products Operations,
Business Administration Div.,in charge of Converted Products Operations

22

LINTEC ANNUAL REPORT 2013

Takehiko Wakasa
Plant Manager, Chiba Plant, Production Div.

Junichi Nishikawa
Plant Manager, Kumagaya Plant, Production Div., General Manager,
Fine & Specialty Paper Production Dept.

Toru Onishi
Plant Manager, Mishima Plant, Production Div., General Manager, Administration Dept.

Financial Section

Management’s Discussion and Analysis

Revenues and Expenses

manufacturers and receivables collection risks. Demand fell overall

In the ﬁscal year under review, consolidated net sales decreased

for automobile-use adhesive products as although sales were brisk in

5.0% year on year, to ¥190.8 billion. This decline is largely attributable

Japan, due to factors including the government’s eco-car subsidies,to the effect of the low domestic demand for LCD-related products,

exports to Europe and China and production in Asia dropped.

particularly in TVs, a signiﬁcant drop in sales of PV backsheets, andAs a result of the above, net sales in the Printing and Industrial

the worldwide underperformance of adhesive papers and ﬁlms forMaterials Products segment were down 8.1% year on year, to ¥82.8

seals and labels, despite a big increase in sales for semiconductor-

billion, and operating income dropped 54.3%, to ¥2.4 billion.

related tapes and equipment.
Gross proﬁt was down 4.2% year on year, to ¥40.4 billion, asElectronic and Optical Products

decreases in raw material procurement costs, such as for pulp, were

In Advanced materials operations, overall sales of coated ﬁlms for

not enough to make up for lower sales. Selling, general and adminis-

multilayer ceramic capacitor (MLCC) production were down as demand

trative expenses rose 5.9%, to ¥29.8 billion, due to factors such as

for usage in PCs was low, despite positive smartphone demand.

increases in personnel and R&D costs. As a result, operating income

Semiconductor-related tapes also beneﬁted from smartphonedecreased 24.4%, to ¥10.6 billion. Income before income taxes

demand, and sales signiﬁcantly increased in Japan and other Asian

decreased 19.0%, to ¥10.8 billion, and income taxes were ¥3.2 billion.

countries, Europe, and the United States. Semiconductor-related

As a result of these factors, net income decreased 11.2%, to ¥7.7

equipment enjoyed a similarly large increase in sales, centered on

billion. Net income per share declined from ¥115.26 in the previous

Taiwan, following a recovery in orders.

ﬁscal year to ¥102.83, and return on equity (ROE) fell from 6.6% to 5.6%.

In Optical products operations, there were solid sales for LCD-related
products in South Korea and Taiwan due to demand for ﬂat-screen

Performance by Operational Segment

TVs and smartphones, but domestic sales were weak.

Printing and Industrial Materials Products

As a result of the above, net sales in the Electronic and Optical Products

In Printing and variable information products operations, adhesive papers

segment were down 2.1% year on year, to ¥72.4 billion, and operating

and ﬁlms for seals and labels suffered from low consumer spending

income decreased 18.9%, to ¥3.2 billion.

in Japan as well as stagnating exports due to yen appreciation andslowdowns in overseas economies. The European ﬁnancial crisis also had

Paper and Converted Products

a big effect on production in Asia, contributing to our underperformance.

In Fine and specialty paper products operations, sales for mainstay

In Industrial and material operations, the PV backsheet market

color papers for envelopes were down as a result of sluggish demand

expanded, but our market share decreased and sales dropped

and a shift to low-priced items, and high-grade printing papers andsigniﬁcantly as a result of price competition mainly with Chinese

industrial-use specialty papers also underperformed.

Net Sales

Operating Income

Net Income / ROE¥ Billion
250¥ Billion
25¥ Billion
15

%
15

20

12

12

150

15

9

100

10

6

50

5

3

190.8

200

Sales by Operational Segment

7.7

2009

2010

2011

2012 2013 FY

0

2009

2010

2011

2012 2013 FY

43.4%

9

37.9%

10.6

0

18.7%

0

5.6

6
3

2009

2010

2011

2012 2013 FY

0Printing and Industrial Materials
Products

Net Income

Electronic and Optical Products

ROE (right scale)

Paper and Converted Products

LINTEC ANNUAL REPORT 201323

Financial Section

Management’s Discussion and Analysis

In Converted products operations, there were strong overseas sales

Cash Flowsfor release papers for ﬂexible printed circuit (FPC) coverlayers as a result

Cash and cash equivalents as of March 31, 2013, was ¥40.7 billion,of factors including demand for smartphones. However, sales of releasea year-on-year increase of ¥4.7 billion, or 13.1%.

papers for general adhesives products declined slightly and sales of
release ﬁlms for optical-related products dropped signiﬁcantly.
As a result of the above, net sales in the Paper and Converted Products
segment decreased 3.3% to ¥35.7 billion, and operating income rose
2.8% to ¥5.0 billion.

(Cash flows from operating activities)
Cash ﬂows from operating activities increased ¥0.7 billion comparedwith the previous ﬁscal year. The main reasons for the increase wereas follows:· A decrease in income before income taxes of ¥2.5 billion· A decrease in trade notes and accounts receivable of ¥6.1 billion

Financial Condition· A decrease in trade notes and accounts payable of ¥4.7 billion(Assets)· A decrease in cash ﬂows from operating activities–other of ¥2.1 billion

Total assets as of March 31, 2013, were ¥216.0 billion, a year-on-year· A decrease in income taxes paid of ¥3.2 billion

increase of ¥5.8 billion. The main reasons for the increase were as follows:· An increase in cash and deposits of ¥3.7 billion(Cash flows from investing activities)· A decrease in trade notes and accounts receivable of ¥3.0 billion

Cash ﬂows from investing activities decreased ¥1.7 billion compared· An increase in property, plant and equipment of ¥2.6 billion

with the previous ﬁscal year. The main reasons for the decrease were

· An increase in intangible assets of ¥0.7 billion

as follows:· An increase in investment securities of ¥1.0 billion· An increase in proceeds from withdrawal of time deposit of ¥4.8 billion· An increase in purchase of property, plant and equipment of ¥5.1 billion(Liabilities)· An increase in purchase of shares of subsidiaries of ¥0.8 billion

Liabilities as of March 31, 2013, were ¥72.5 billion, a year-on-year decreaseof ¥4.9 billion. The main reasons for the decrease were as follows:(Cash flows from financing activities)· A decrease in trade notes and accounts payable of ¥2.5 billion

Cash ﬂows from ﬁnancing activities increased ¥2.2 billion compared with

· An increase in accrued income taxes of ¥0.7 billion

the previous ﬁscal year. The main reason for the increase was as follows:· A decrease in current liabilities–other of ¥3.5 billion· A decrease in purchase of treasury stock of ¥1.7 billion(Net assets)
Net assets as of March 31, 2013, were ¥143.6 billion, a year-on-yearincrease of ¥10.7 billion. The main reasons for the increase were as follows:· An increase in retained earnings of ¥4.9 billion· An increase in foreign currency translation adjustments of ¥5.7 billion

Total Assets / Net Assets

Net Cash Provided byOperating Activities¥ Billion
250¥ Billion
25

216.0
200

143.6

150

10

50

5

2009

2010

2011

2012 2013 FY

Total Assets
Net Assets

24

15

100

0

19.6

20

LINTEC ANNUAL REPORT 2013

0

2009

2010

2011

2012 2013 FY

Operating Risks

The following is a summary of risks that could affect the LINTECGroup’s operations. This summary provides speciﬁc examples of major(3) Infrastructure failures, such as those related to electric power,
water, or communications

risks that are anticipated, but it does not include all risks. Forward-(4) Outbreaks of contagious diseases

looking statements of this report are based on the Company’s judgment(5) Unpredictable changes in laws and regulations, such as those

as of June 26, 2013.

involving tax systems, foreign exchange, or customs(6) Problems arising between the Group and its business associates

1. Changes in Economic Conditions

or in the collection of accounts receivable due to differences in

The Group’s operations include development in a wide range ofcultures or business practices

industries. Therefore, domestic and overseas economic conditions affect
the Group’s operations directly and indirectly. As a result, future trends

6. New Product Developmentin economic conditions could affect the Group’s business results.

The Group pursues R&D activities with a view to realizing comprehensive

Further, world trends in the electronics industry affect the Group’s

technological capabilities that cater to market demand and bringing

new businesses in the ﬁeld of electronics-related products. Future

to market competitive, high-value-added products. Accordingly, theelectronics industry trends could affect the Group’s business results.

Group is stepping up allocations of management resources to increase
its number of researchers and to pursue such initiatives as joint research

2. Changes in Selling Prices

with other companies and academic institutions. However, there is no

Due to intense competition in both the domestic and overseas markets

guarantee that such investment of management resources in R&D willin which the Group operates, the Group may be unable to maintain

result in the development of new products or increase operating income.

selling prices to preserve sufﬁcient earnings or sales share.

Due to such factors as extended development periods, it could become

Furthermore, the Group’s business results could be affected bynecessary to discontinue development, and if product development

difﬁculties related to cost reductions aimed at maintaining proﬁts

costs cannot be recovered, it could affect the Group’s business results.

and recovering its share by reﬁning customer services.
7. Intellectual Property Rights
3. Changes in Raw Material Prices

The Group takes necessary measures to protect intellectual property

The Group uses a great deal of pulp for paper, petrochemical products, andrights in Japan and overseas for various original production technologies

other raw materials and fuels. The prices of these materials and fuelsthat it has developed. However, legal measures alone do not provide

ﬂuctuate in accordance with market conditions, such as inventories

complete protection, possibly preventing the Group from effectively

and the supply-demand balance. The Group purchases raw materials

protecting the rights it has obtained. Furthermore, in the event thatin light of careful monitoring of market trends. However, a dramatica lawsuit is ﬁled by a third party regarding intellectual property rights

change in raw material prices could affect the Group’s business results.

infringement associated with the Group’s products, the Group’s businessresults could be affected.

4. Changes in Foreign Exchange Rates
The Group conducts foreign currency-denominated procurement and8. Signiﬁcant Lawsuits

sales overseas as well as ﬁnance transactions between both domestic

In conducting business in Japan and overseas, the Group may be

and overseas Group companies. Therefore, changes in foreign

subject to lawsuits or other claims related to product liability, envi-

exchange rates could affect the Group’s business results.

ronmental, or intellectual property rights issues. Lawsuits or claims,
depending on their content, could affect the Group’s business results.

5. Overseas Operations
The Group conducts manufacturing and business operations in markets

9. Legal and Regulatory Systems

worldwide. In these countries, the following events could affect theIn the countries in which it conducts business operations, the Group isGroup’s business results.

subject to various legal and regulatory systems, and the Group is working(1) Political instability or a deterioration in security due to such factors

to ensure rigorous compliance with these systems. In the event that theas terrorism, a political change, or a coup d’état(2) Labor disputes, such as those involving strikes or boycotts

systems are strengthened or changed, the Group’s business activities
could be restricted or the Group’s business results could be affected.

LINTEC ANNUAL REPORT 201325

Financial Section

Financial Summary
LINTEC Corporation and its consolidated subsidiaries
Years ended March 31

2013

2012

2011

2010

¥190,844
10,564
5.5%
10,836
7,681
5.6%
5.2%

¥200,905
13,975
7.0%
13,382
8,648
6.6%
6.5%

¥212,733
20,8899.8%
19,565
13,62210.9%
9.7%¥189,348
11,576
6.1%
11,399
7,284
6.2%
6.1%

¥ 102.83
1,909.57
34.00¥ 115.26
1,766.60
40.00¥ 180.21
1,715.78
40.00¥ 96.36
1,596.37
24.00

Depreciation and amortization
Purchases of property, plant and equipment
Net cash provided by operating activities
Net cash used in investing activities
Net cash used in financing activities¥ 10,141(13,823)
19,619(13,966)(2,877)¥ 10,079(8,760)18,910(12,262)(5,099)¥10,178(8,237)23,307(9,926)(2,820)¥10,537(7,777)22,259(9,253)(3,454)

At year-end:
Current assets
Current liabilities
Working capital
Cash and cash equivalents
Property, plant and equipment, net
Long-term debt, less current portion% of shareholders’ equity
Total assets
Net assets% of total assets¥138,505
56,911
81,59340,73964,915——
216,048
143,569
66.0%¥137,229
62,07575,15336,03662,273——
210,203132,84762.8%¥132,891
60,46572,42635,18861,888——206,188
130,57662.9%¥121,451
58,65462,79725,387
63,33754
0.0%
195,656
121,502
61.7%

76,564,240
4,270

76,564,240
4,286

76,564,240
4,198

76,564,240
4,037¥82,785
72,37252,061¥90,143
73,92553,225¥91,936
81,19355,317

—
—
—

2,380
3,196
4,980

5,213
3,942
4,846

7,990
6,732
6,129

—
—
—

For the year:
Net sales
Operating income% of net sales
Income before income taxes
Net income
Return on equity
Return on assets
Per share data (yen):
Net income
Net assets
Cash dividends

Number of shares outstanding
Number of employees
Segment information:
Net sales:
Printing and Industrial Materials ProductsElectronic and Optical Products
Paper and Converted Products
Segment income:Printing and Industrial Materials ProductsElectronic and Optical Products
Paper and Converted Products(Supplementary information)
Effective the year ended March 31, 2011, the “Accounting Standard for Disclosure about Segments of an Enterprise and Related Information” (Accounting Standards Board of Japan (ASBJ)
Statement No. 17, issued by ASBJ on March 27, 2009) and the “Guidance on Accounting Standard for Disclosures about Segments of an Enterprise and Related Information” (ASBJ Guidance
No. 20, issued by ASBJ on March 21, 2008) have been applied.
Since it is impracticable to restate segment information of the ﬁscal years of 2010 and before complying revised accounting standards for segment information, only reportable segment
information for the year ended March 31, 2011 onward have been presented.

26

LINTEC ANNUAL REPORT 2013

Millions of yen, except per share data, number of shares, and number of employees

2009

2008

2007

2006

2005

2004

¥194,901
8,498
4.4%
5,215
3,391
2.9%
3.0%

¥202,297
14,8947.4%
13,191
9,308
8.0%
6.6%

¥192,723
14,798
7.7%
14,298
10,2389.5%
7.7%¥180,334
13,618
7.6%
13,214
9,011
9.2%
7.7%

¥171,689
12,370
7.2%
11,838
7,759
9.0%
7.1%

¥158,947
10,298
6.5%
12,182
7,778
10.2%
6.0%

¥ 44.86
1,497.58
20.00¥ 123.15
1,598.30
24.00¥ 135.44
1,489.87
18.00¥ 118.34
1,370.85
16.00¥ 108.76
1,226.28
14.00¥ 111.90
1,149.19
12.00¥11,286(9,584)
12,979(9,752)(2,300)¥ 9,011(14,700)
17,739(15,071)(769)¥ 7,701(11,646)
13,734(12,200)(68)¥ 6,823(12,715)
17,005(13,199)(2,789)¥ 6,216(8,699)
11,163(8,964)(411)¥ 5,503(8,699)9,475(8,497)(1,672)¥ 95,937
43,65552,282
15,37067,010107
0.1%
172,854
113,93065.5%¥120,028
67,631
52,397
17,31573,711201
0.2%
204,852
121,635
59.4%¥117,531
67,95049,581
15,55068,377280
0.3%
198,526
113,397
57.1%¥104,433
57,74846,685
13,766
63,176347
0.3%
181,158
104,36257.6%¥ 97,510
54,816
42,694
9,191
56,411429
0.5%
169,590
92,768
54.7%¥ 90,437
58,10932,3286,254
53,879622
0.8%
162,708
80,34749.4%

76,564,240
3,987

76,564,240
3,802

76,564,240
3,708

76,564,240
3,537

76,564,240
3,421

70,817,980
3,171

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

LINTEC ANNUAL REPORT 201327

Financial Section

Consolidated Balance Sheets
LINTEC Corporation and its consolidated subsidiaries
March 31, 2013 and 2012ASSETS

Millions of yen

Thousands of
U.S. dollars(Note 1)

2013

2012

2013

Current assets:¥ 44,603¥ 40,907

Trade notes and accounts receivable (Notes 4, 11)

61,79164,765657,006

Inventories (Note 3)

27,531

27,217292,735

Deferred tax assets (Note 16)

2,307

2,189

24,536

Other

2,530

2,395

26,906

Allowance for doubtful accounts

(259)

(246)

(2,757)

138,505

137,229

1,472,675

Cash and deposits (Notes 9, 11)

Total current assets$

474,248

Non-current assets:
Property, plant and equipment (Notes 7, 10):
Buildings and structures

61,42457,436653,105

Machinery, equipment and vehicles

109,006

102,714

1,159,030

Land

10,382

9,238

110,394

Construction in progress

1,023

2,716

10,881Other

10,844

10,252

115,307

192,682

182,357

2,048,720(127,767)(120,083)(1,358,501)

64,91562,273

690,218

3,047

2,345

32,406

Investment securities (Notes 11, 12)

3,370

2,379

35,836

Deferred tax assets (Note 16)

5,047

4,894

53,669Other (Note 14)

1,334

1,256

14,183

Allowance for doubtful accounts

(171)

(175)

(1,826)

Total investments and other assets

9,580

8,354

101,863

Total non-current assets

77,543

72,973

824,488¥ 216,048¥ 210,203$ 2,297,163

Accumulated depreciation
Property, plant and equipment, net
Intangible assets (Note 10):Investments and other assets:

Total assets
The accompanying notes are an integral part of the consolidated ﬁnancial statements.

28

LINTEC ANNUAL REPORT 2013

LIABILITIES AND NET ASSETS

Millions of yen

Thousands of
U.S. dollars(Note 1)

2013

2012

2013

Current liabilities:
Trade notes and accounts payable (Notes 4, 11)¥ 43,124¥ 45,612$ 458,527

Short-term borrowings (Notes 11, 23)

1,430

1,320

15,204

Accrued income taxes (Notes 11, 16)

1,931

1,223

20,537

46

30

498

10,37813,888110,355

56,911

62,075605,123

14,136

13,914150,304

132

132

1,410

1,297

1,232

13,79815,566

15,279165,513

23,201

23,201

246,691

Capital surplus

26,83026,830285,278

Retained earnings

99,19894,281

1,054,742

Provision for director’s bonuses
Other (Notes 11, 13)
Total current liabilities
Non-current liabilities:
Accrued pension costs (Note 14)
Provision for environmental measures
Other
Total non-current liabilities
Commitments and contingent liabilities (Note 2)
Net assets:
Shareholders’ equity (Note 22):
Common stock:
Authorized: 300,000,000 shares in 2013 and 2012
Issued: 76,564,240 shares in 2013 and 2012

Less: treasury stock, at cost:
1,869,676 shares in 2013 and 1,868,921 shares in 2012
Total shareholders’ equity(2,752)(2,750)(29,262)

146,478

141,561

1,557,449

Accumulated other comprehensive income
Net unrealized holding gain on securities

213

117

2,267

Foreign currency translation adjustments(3,843)(9,561)(40,868)

Adjustment regarding pension obligations of consolidated overseas subsidiaries
Total accumulated other comprehensive income

(213)

(160)

(2,270)(3,843)(9,604)(40,870)
1,206

Share subscription rights (Note 15)

113

94

Minority interests

822

796

8,741

Total net assets

143,569

132,847

1,526,526

Total liabilities and net assets¥216,048¥210,203$2,297,163

LINTEC ANNUAL REPORT 201329

Financial Section

Consolidated Statements of Income
LINTEC Corporation and its consolidated subsidiaries
Years ended March 31, 2013 and 2012

Millions of yen

ASSETSNet sales
Cost of sales
Gross profit
Selling, general and administrative expenses (Notes 5, 6)
Operating income
Non-operating income:Interest income
Dividends income
Rent income
Gain on sales of noncurrent assets
Foreign exchange gains
Other income
Total non-operating income
Non-operating expenses:
Interest expenses
Loss on retirement of noncurrent assets
Compensation expenses
Foreign exchange losses
Other expenses
Total non-operating expenses
Ordinary income
Extraordinary gain:
Subsidy
Total extraordinary gain
Extraordinary loss:
Loss on valuation of investment securities (Notes 11, 12)Loss on liquidation of subsidiaries
Loss on valuation of subsidiaries’ stocks
Loss on valuation of membership
Loss on retirement of noncurrent assets (Note 7)
Total extraordinary losses
Income before income taxes
Income taxes (Note 16):
Current
Deferred
Total income taxes
Income before minority interests
Minority interests
Net income (Note 22)

Thousands of
U.S. dollars(Note 1)

2013

2012

2013

¥190,844
150,432
40,411
29,847
10,564¥200,905
158,738
42,16728,192
13,975$2,029,179
1,599,495
429,683
317,354
112,329

251
228
50
10
543
220
1,304

233
53
52
24
—
260
625

2,669
2,425
539
114
5,775
2,348
13,873

57
345
339
—
145
887
10,981

24
446
86
303
126
986
13,613

612
3,671
3,611
—
1,546
9,441
116,761

44
44

22
22

471
471

—
—
—
—
189
189
10,836

128
84
28
11
—
253
13,382

—
—
—
—
2,014
2,014
115,219

3,419
(256)
3,162
7,673
(7)
7,681

3,689
987
4,677
8,704
56
8,648

36,353(2,728)33,624
81,594(77)
81,671¥¥$

Consolidated Statements of Comprehensive Income
LINTEC Corporation and its consolidated subsidiaries
Years ended March 31, 2013 and 2012

Millions of yen

ASSETS
Income before minority interests
Other comprehensive income
Net unrealized holding gain on securities (Note 8)
Foreign currency translation adjustments (Note 8)
Adjustment regarding pension obligations of consolidated overseas subsidiaries (Note 8)
Total other comprehensive income (Note 8)
Comprehensive income(Comprehensive income attributable to:)Shareholders of the parent
Minority interests
The accompanying notes are an integral part of the consolidated ﬁnancial statements.

30

LINTEC ANNUAL REPORT 2013

Thousands of
U.S. dollars(Note 1)

2013

2012

2013

¥ 7,673¥ 8,704$ 81,594

95
5,750
(52)
5,794
¥13,468

14(1,713)(19)(1,718)¥ 6,986

1,019
61,147(560)
61,607$143,201

13,442
25

6,976
9

142,925276

Consolidated Statements of Changes in Net Assets
LINTEC Corporation and its consolidated subsidiaries
Years ended March 31, 2013 and 2012

Thousands

Millions of yen
Shareholders’ equity

Balance as at April 1, 2011

Accumulated other comprehensive income

Number ofshares ofcommonstock

Commonstock

CapitalsurplusRetainedearnings

Net
Total
unrealized
Treasury shareholders’ holding gain
stock
equity on securities

76,564¥23,201¥26,830¥88,638¥(1,035)¥137,634¥102

Adjustment
regardingpension
Total
Foreign obligations of accumulated
currency consolidated other comtranslation
overseasprehensive
adjustments subsidiaries
income¥(7,894)¥(141)¥(7,932)

Share
subscription
rightsMinority
interests

Total net
assets¥88¥786¥130,576

Changes during the year:
Cash dividends(3,005)(3,005)—

Net income

8,648

8,648

—

8,648

(1,719)(1,719)—(1,719)

3

4

—

4

Purchase of treasury stock
Disposal of treasury stock0

Net changes in items otherthan shareholders’ equity(3,005)—14(1,667)(19)(1,672)

5

9

Total changes during the year

—

—

0

5,642

(1,715)3,927

14(1,667)(19)(1,672)5

9(1,656)2,271

Balance as at March 31, 2012

76,56423,201

26,83094,281(2,750)141,561

117(9,561)(160)(9,604)

94

796

132,847

Changes during the year:
Cash dividends(2,763)(2,763)—(2,763)

Net income

7,681

7,681

—

7,681

(1)

(1)

—

(1)

0

0

—

0

—

95

5,717

(52)

5,760

19

25

(1)

4,916

95

5,717

(52)

5,760

19

25

5,805
10,722¥(2,752) ¥146,478¥213¥(3,843)¥(213)¥(3,843)

¥113

¥822

¥143,569

Purchase of treasury stock
Disposal of treasury stock0

Net changes in items otherthan shareholders’ equity
Total changes during the year

—

—

0

4,917

Balance as at March 31, 2013

76,564¥23,201¥26,830¥99,198

Thousands

Thousands of U.S. dollars (Note 1)
Shareholders’ equity

Balance as at April 1, 2012

Number ofshares ofcommonstock

Commonstock

76,564$246,691

CapitalsurplusRetainedearnings

Accumulated other comprehensive income

Net
Total unrealized
Treasury shareholders’ holding gain
equity on securities
stock

Adjustment
regardingpension
Total
Foreign obligations of accumulated
currency consolidated other comtranslation
overseasprehensive
adjustments subsidiaries
income$1,248 $(101,662)$(1,709) $(102,124)

Sharesubscription
rights$1,003

Minority
interests

Total net
assets$285,278 $1,002,456$(29,249) $1,505,176$8,465 $1,412,520

Cash dividends(29,385)(29,385)—(29,385)

Net income

81,671

81,671—

81,671

(13)

(13)

—

(13)

0

0

—

0

—

1,019

60,794(560)

61,253203

276

61,733(13)

52,273

1,019

60,794(560)

61,253203

276

114,006

76,564 $246,691 $285,278 $1,054,742 $(29,262) $1,557,449$2,267$(40,868)$(2,270) $(40,870)$1,206

Changes during the year:

Purchase of treasury stock
Disposal of treasury stock0

Net changes in items otherthan shareholders’ equity
Total changes during the year
Balance as at March 31, 2013

—

—

0

52,286$8,741 $1,526,526

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

LINTEC ANNUAL REPORT 201331

Financial Section

Consolidated Statements of Cash Flows
LINTEC Corporation and its consolidated subsidiaries
Years ended March 31, 2013 and 2012ASSETSCash flows from operating activities:
Income before income taxes
Depreciation and amortization
Amortization of goodwill
Amortization of negative goodwill
Increase (decrease) in accrued pension costs
Increase (decrease) in allowance for doubtful accounts
Interest and dividend income
Interest expenses(Gain) loss on sales of property, plant and equipment
Loss on retirement of property, plant and equipment
Decrease (increase) in trade notes and accounts receivable
Decrease (increase) in inventories
Increase (decrease) in trade notes and accounts payable(Gain) loss on sales of investment securities
Loss on valuation of investment securities
Loss on valuation of membership
Increase (decrease) in provision for environmental measures
Loss on valuation of subsidiaries’ stocks
Loss on liquidation of subsidiaries
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes (paid) refund
Net cash provided by operating activities
Cash flows from investing activities:
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Purchase of investments in subsidiaries
Purchase of investments in capital of subsidiaries
Payments of loans receivableCollection of loans receivable
Other, net
Net cash used in investing activities
Cash flows from financing activities:
Increase (decrease) in short-term borrowings
Cash dividends paid
Purchase of treasury stock
Repayments of lease obligation
Other, net
Net cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year (Note 9)
The accompanying notes are an integral part of the consolidated ﬁnancial statements.

32

LINTEC ANNUAL REPORT 2013

Millions of yen

Thousands of
U.S. dollars(Note 1)

2013

2012

2013

¥ 10,836
10,141
57
(11)
161
(1)
(479)
57
(8)
432
4,044
853
(3,231)
(2)
—
0
—
—
—
(889)
21,960495(57)(2,778)
19,619¥ 13,382
10,079
42
(11)
75
28
(286)
24
(4)
362
(2,008)
59
1,488
0
128
11
(16)
28
84
1,162
24,631259(24)(5,955)
18,910$ 115,219
107,833
615
(118)
1,716
(15)
(5,094)
612
(92)
4,594
43,001
9,069(34,364)
(30)
—
6
—
—
—
(9,452)
233,500
5,263(612)(29,544)
208,606(8,286)
9,916(13,823)
10
(788)
(2)
4
(775)
(79)
(70)
160
(231)
(13,966)(7,991)
5,136(8,760)
70
(636)
(2)
0
—
—
(56)
43
(65)
(12,262)(88,110)
105,437(146,976)
110(8,388)(27)
52(8,247)
(846)
(748)
1,710
(2,462)(148,499)

110(2,759)(1)(226)
0(2,877)
1,927
4,703
36,036¥ 40,739(146)(3,002)(1,719)(231)
0(5,099)(700)
848
35,188¥ 36,036

1,169(29,340)(13)(2,410)0(30,593)
20,49750,011
383,161$ 433,172

Notes to Consolidated Financial Statements
LINTEC Corporation and its consolidated subsidiaries
March 31, 2013

1. Summary of Significant Accounting Policies(a) Basis of presenting financial statements
LINTEC Corporation (the “Company”) maintains its accounting records
and prepares its consolidated financial statements in accordance withaccounting principles generally accepted in Japan, which are different incertain respects as to the application and disclosure requirements ofInternational Financial Reporting Standards. The accompanying consolidated financial statements have been compiled from the consolidated
financial statements prepared by the Company as required by the
Financial Instruments and Exchange Law of Japan.
In addition, the notes to the consolidated financial statements include
information which is not required under accounting principles generally
accepted in Japan but is presented herein as additional information.
For the convenience of the readers, the accompanying consolidated
financial statements have been presented in U.S. dollars by translating
all Japanese yen amounts at the rate of ¥94.05=U.S.$1, the prevailingexchange rate as of March 31, 2013.
As permitted under the Financial Instruments and Exchange Law ofJapan, amounts of less than one million yen have been omitted. As aresult, the totals shown in the accompanying consolidated financial
statements do not necessarily agree with the sum of the individual
amounts.
Certain reclassifications of previously reported amounts have been
made to conform to the consolidated financial statements for the year
ended March 31, 2013 presentation.
(b) Consolidation
The accompanying consolidated financial statements include theaccounts of the Company and its 24 significant subsidiaries as of March
31, 2013, but exclude subsidiaries whose total assets, retained earnings,
net sales and net income are not material in relation to the comparable
amounts in these statements. All significant intercompany accounts andtransactions have been eliminated in consolidation.
Goodwill is amortized over periods of the estimated useful economic
lives (mainly 5 years) on a straight-line basis. Negative goodwill incurredprior to the year ended March 31, 2010 is amortized for 5 years on astraight-line basis.
Investments in subsidiaries and affiliates, which are not consolidated
or accounted for by the equity method, are carried at cost. Where there
has been a permanent decline in the value of such investments, theCompany has written down the investments.
Certain subsidiaries are consolidated on the basis of fiscal period
ending December 31, which differ from that of the Company. The necessary adjustments are made to the financial statements of such
subsidiaries to reflect any significant transactions from their respective
fiscal year ends to March 31.
(c) Foreign currency translation
Receivables, payables and securities denominated in foreign currencies
are converted into Japanese yen at the exchange rates at fiscal year end.
Transaction in foreign currencies is recorded based on the prevailingexchange rate on the transaction dates and the resulting translation
gains or losses are included in statements of income.
In respect of the financial statement items of overseas subsidiaries,
all assets and liabilities accounts are translated into Japanese yen by
applying the exchange rates in effect at the fiscal year end. All income
and expense accounts are translated into Japanese yen by applying the
average exchange rate during the fiscal year.
Translation differences after allocating to minority interest for portions
attributable to minority interest are reported as foreign currency translation adjustments in a separate component of net assets in theaccompanying consolidated balance sheets.

(d) Investment securities
Securities with market value are stated at fair value, and changes in fairvalue are recorded as a separate component of net assets at an amount,net of tax, and the moving average method is used to calculate theoriginal cost. Securities without market value are stated at cost determined by the moving average method.
(e) Derivatives
Derivatives are stated at fair value.
(f) Inventories
Inventories mainly apply the cost method based on the weighted-averagemethod, which determines the amount of the inventories shown on the
consolidated balance sheets by writing them down based on thedecrease in their profitability.
Machinery applies the cost method based on the specific identification
method, which determines the amount of the inventories shown on the
consolidated balance sheets by writing them down based on thedecrease in their profitability.
(g) Property, plant and equipment (Excluding leased assets)
Property, plant and equipment are stated at cost. Depreciation in the
Company is principally computed by the declining-balance method overthe estimated useful lives of the respective assets except for the buildings
acquired after April 1, 1998, for which the straight-line method is used.
Depreciation in its consolidated foreign subsidiaries is computed by
the straight-line method over the useful lives of the respective assets.
The significant useful lives are summarized as follows:
Buildings and structures
2 — 50 years
Machinery, equipment and vehicles
3 — 17 years(h) Intangible assets (Excluding leased assets)
Intangible assets are stated at cost less accumulated amortization.
Capitalized costs of software for internal use and other intangible assets
are amortized using the straight-line method over estimated lives (5 years).
(i) Leases
Leased assets arising from finance lease transactions which transfer
ownership to the lessee are depreciated as the same as the owned
property, plant and equipment.
Leased assets arising from finance lease transactions which do nottransfer ownership to the lessee are depreciated to a residual value ofzero by the straight-line method using the contract term as the useful life.
(j) Allowance for doubtful accounts
The allowance for doubtful accounts is provided at the amount of
estimated uncollectible accounts, based on individual collectability withrespect to identified doubtful receivables and past experience of doubtfulreceivables.
(k) Provision for director’s bonuses
Bonus to directors is accrued at the year end and to be paid in thefollowing year when such bonuses are attributable.
(l) Accrued pension costs
Accrued pension cost has been provided based on the projected
retirement benefit obligation and the pension plan assets.
Actuarial gain and loss are amortized in the year following the year inwhich the gain or loss is recognized primarily by the straight-line
method principally over 15 years. Prior service cost is being amortizedby the straight-line method principally over 15 years.
(m) Provision for environmental measures
The provision for environmental measures is estimated and recorded toprovide for future potential costs, such as costs related to removal anddisposal of toxic substances based on related legal requirements.
(n) Accounting for consumption taxes
Transactions subject to consumption taxes are recorded at amounts
exclusive of consumption taxes.

LINTEC ANNUAL REPORT 201333

Financial Section(o) Cash and cash equivalents
Cash and cash equivalents are composed of cash and time deposits, allof which are low-risk, short-term financial instruments readily convertible into cash.
(p) Research and development costs
Research and development costs are charged to income when incurred.
(q) Income taxes
Deferred tax assets and liabilities are determined based on differences
between financial reporting and tax bases of assets and liabilities andare measured using enacted tax rates and laws that will be in effectwhen the differences are expected to reverse.
(r) Shareholders’ equity
The Corporation Law of Japan provides that an amount equal to 10% of
the amount to be distributed as distributions of capital surplus (otherthan the capital reserve) and retained earnings (other than the legal
reserve) be transferred to the capital reserve and the legal reserve,
respectively, until the sum of the capital reserve and the legal reserve
equals 25% of the common stock account. Such distributions can bemade at any time by resolution of the shareholders or by the Board of
Directors if certain conditions are met, but neither the capital reserve
nor the legal reserve is available for distributions.

(s) Accounting standards issued but not yet applied• Accounting Standard for Retirement Benefits (Accounting Standards
Board of Japan (ASBJ) Statement No.26, issued by ASBJ on
May 17, 2012)• Guidance on Accounting Standard for Retirement Benefits (ASBJ
Guidance No.25, issued by ASBJ on May 17, 2012)(1) Overview
Actuarial gains and losses and prior service costs that are yet to berecognized in profit or loss shall be recognized within net assets,
after adjusting for tax effects, and the funding deficit or surplus shallbe recognized as a liability (liability for retirement benefits) or asset(asset for retirement benefits). In addition, the standard and guidance
allows a choice for the method of attributing expected retirement
benefits to periods of either the straight-line basis or the plan’sbenefit formula basis. Furthermore, the method for calculating thediscount rate has been amended.
(2) Application schedule
The Company expects to apply the standard and guidance from theconsolidated financial statements for the year ending March 31, 2014.
The amendment of the method for attributing expected retirement
benefits will, however, be adopted from the beginning of the year
ending March 31, 2015.
(3) Effect of application
The effect of applying the standard and guidance is currently underassessment.

2. Commitments and Contingent Liabilities
The Company and its consolidated subsidiaries had unused lines of credit for short-term financing aggregating ¥30,488 million (U.S. $324,178
thousand) and ¥30,364 million at March 31, 2013 and 2012, respectively.
3. Inventories
Finished goods and merchandise, work in process, and raw materials and supplies as of March 31, 2013 and 2012 were as follows:
Millions of yen

Thousands of
U.S. dollars

Finished goods and merchandise2013¥ 8,4062012¥ 8,7542013$ 89,384

Work in process

11,294

10,544

120,086

Raw materials and supplies

7,831

7,918

83,264¥27,531¥27,217$292,735

ASSETS

Total

4. Notes Maturing as of the End of the Fiscal Year
Notes maturing as of the end of the fiscal year are settled on the clearing date. In addition, accounts receivable and payable with due date that is the last day of
the fiscal year are also settled on the clearing date. As the last day of the current fiscal year was a non-business day of financial institutions, the following
amounts of receivables and payables maturing as of March 31, 2013 and 2012 were included in the ending balance.
Thousands of
U.S. dollars

Trade notes and accounts receivable2013¥5,173

2012¥4,616

2013$55,009

Trade notes and accounts payable

8,323

7,382

88,499ASSETS

34

Millions of yen

LINTEC ANNUAL REPORT 2013

5. Selling, General and Administrative Expenses
Major items included in selling, general and administrative expenses for the years ended March 31, 2013 and 2012 were as follows:

ASSETSTransportation and warehousing expenses
Provision for allowance for doubtful accounts

2013¥ 4,812

Millions of yen

Thousands of
U.S. dollars

2012¥ 4,7622013$ 51,165

86

161

924

6,356

5,929

67,583

Provision for retirement benefits

545

557

5,796

Provision for director’s bonuses

46

30

498

Depreciation

880

878

9,361

Research and development expenses

7,263

6,154

77,229

Other

9,856

9,717

104,795¥29,847¥28,192$317,354

Salaries and allowances

Total

6. Research and Development Expenses
Research and development expenses, all of which were included in selling, general and administrative expenses, for the years ended March 31, 2013
and 2012 were ¥7,263 million (U.S.$77,229 thousand) and ¥6,154 million, respectively.
7. Loss on Retirement of Noncurrent Assets
Loss on retirement of noncurrent assets was principally related to retirement of buildings and structures for the year ended March 31, 2013.
8. Comprehensive Income
Reclassification adjustment and tax effect of other comprehensive income for the years ended March 31, 2013 and 2012 were as follows:
Millions of yen

Thousands of
U.S. dollars

2013

2012

2013

¥ 137

¥ (119)$ 1,462

(2)

128

(30)

Prior to deducting tax effect

134

9

1,432

Tax effect

(38)

5

(412)

Net unrealized holding gain on securities

95

14

1,019

5,750

(1,713)

61,147

―

—

—

5,750

(1,713)

61,147ASSETSNet unrealized holding gain on securities:
Amount incurred during the fiscal year
Reclassification adjustment

Foreign currency translation adjustments:
Amount incurred during the fiscal year
Reclassification adjustment
Prior to deducting tax effectTax effect

―

—

—

5,750

(1,713)

61,147

Amount incurred during the fiscal year

(201)

(46)

(2,137)

Reclassification adjustment

116

17

1,241

Prior to deducting tax effect

(84)

(29)

(895)

Tax effect

31

10

335

Adjustment regarding pension obligations of consolidated overseas subsidiaries

(52)

(19)

(560)

¥5,794¥(1,718)$61,607

Foreign currency translation adjustments
Adjustment regarding pension obligations of consolidated overseas subsidiaries:

Total other comprehensive income

LINTEC ANNUAL REPORT 201335

Financial Section

9. Cash and Cash Equivalents
Reconciliation between cash and cash equivalents in the consolidated statements of cash flows and cash and deposits in the consolidated balance
sheets as of March 31, 2013 and 2012 were as follows:

ASSETSCash and deposits
Time deposits with maturity of more than 3 months
Cash and cash equivalents

Millions of yen

Thousands of
U.S. dollars

2012¥40,9072013$474,2482013¥44,603(3,863)(4,871)(41,075)¥40,739¥36,036$433,172

Assets and liabilities related to finance lease transactions newly recognized for the years ended March 31, 2013 and 2012, were ¥177 million(U.S. $1,883 thousand) and ¥115 million, respectively.
10. Leases(Lessee’s accounting)For finance lease transactions that transfer ownership, leased assets recognized as property, plant and equipment are mainly production facilities forthe years ended March 31, 2013 and 2012.
For finance lease transactions that do not transfer ownership, leased assets recognized as property, plant and equipment are mainly production
facilities and vehicles, and those recognized as intangible assets are mainly software for the years ended March 31, 2013 and 2012.
The minimum lease payments under noncancellable operating leases as of March 31, 2013 and 2012 were as follows:

ASSETS
Due within 1 year
Due after 1 year
Total

11. Financial Instruments
1. Status of financial instruments(1) Policy regarding financial instruments
The LINTEC Group (the “Group”) limits the scope of its cash and fundmanagement activities to short-term deposits and has a policy of relying
principally on bank borrowings.
The Group makes use of derivatives only to reduce risk of foreign
currency exchange fluctuations and has a policy of not engaging inderivative transactions for speculative purposes.
(2) Details of financial instruments and associated risk andrisk management system
In the course of its business activities, the Group is exposed to credit
risk arising from trade notes and accounts receivable that are
outstanding from its customers. Regarding the risk pursuant to theinternal regulations for managing its credit exposure and tradereceivables, due dates and balances are managed appropriately foreach customer, to mitigate risks of uncollectible accounts.
Investment securities are stocks being exposed to market price risk,
and these are mainly the stocks of companies with which the Group hasbusiness relationships and it periodically confirms the market value.

36

LINTEC ANNUAL REPORT 2013

2013
¥120

Millions of yen

Thousands of
U.S. dollars

2012
¥101

2013
$1,278

48

125

510

¥168

¥227

$1,788All of the trade payables—trade notes and accounts payable—are due
within 1 year.
The Company has commitment line contracts with financial institutions
and the borrowings are raised mainly for business activities and capital
investments.
The Group is exposed to liquidity risk from its business-related
obligations and borrowings but the Company and its consolidated
subsidiaries prepare and implement financing plans to manage theliquidity risk.
The Group conducts and manages such transactions based oninternal rules and regulations. Director of administration division isin charge of managing derivative transactions and related reports are
submitted to top management for each case. In addition, the contract
amounts of derivative transactions described below in Note 13,“Derivatives,” does not represent the market risk associated with
derivative transactions.

2. Estimated fair value and other matters related to financial instruments
Carrying value on the consolidated balance sheets as of March 31, 2013 and 2012 along with their fair value and the variance were shown in thefollowing table.
Thousands of
U.S. dollars

Millions of yen

2013

ASSETS(1) Cash and deposits(2) Trade notes and accounts receivable(3) Investment securities
Other securities(4) Trade notes and accounts payable(5) Short-term borrowings(6) Accrued income taxes(7) Derivative instruments

Carrying value

Estimated
fair value

Variance¥ 44,603
61,791¥ 44,603
61,791¥——

1,816(43,124)(1,430)(1,931)(15)

1,816(43,124)(1,430)(1,931)
(15)

—
—
—
—
—

Carrying value

Estimated
fair value

Variance$ 474,248
657,006$ 474,248
657,006$——

19,311(458,527)(15,204)(20,537)(170)

19,311(458,527)(15,204)(20,537)
(170)

—
—
—
—
—

Note: Figures shown in parentheses are liability items.
Millions of yen

ASSETS

2012(1) Cash and deposits(2) Trade notes and accounts receivable(3) Investment securities
Other securities(4) Trade notes and accounts payable(5) Short-term borrowings(6) Accrued income taxes(7) Derivative instruments

Carrying value

Estimated
fair value

Variance¥ 40,907
64,765¥ 40,907
64,765¥——

1,680(45,612)(1,320)(1,223)(24)

1,680(45,612)(1,320)(1,223)
(24)

—
—
—
—
—

Note 2: Financial instruments for which obtaining an estimated fair value is deemed to be
extremely difﬁcult:Note: Figures shown in parentheses are liability items.
Note1: Method of computing the estimated fair value of ﬁnancial instruments, securities andderivative instruments(1) Cash and deposits; (2) Trade notes and accounts receivable
Since these items are settled in a short period of time and have estimated fair values
that are virtually the same as the carrying value on the ledger, the carrying value has
been used.
(3) Investment securities
The market value of investment securities is determined by the price of the stock
traded on an exchange market.
(4) Trade notes and accounts payable; (5) Short-term borrowings; (6) Accrued income
taxes
Since these items are settled in a short period of time and have estimated fair values
that are virtually the same as the carrying value on the ledger, the carrying value has
been used.
(7) Derivative instruments
Please see Note 13, “Derivatives.”

Millions of yen

Thousands of
U.S. dollars

2013

2012

2013

Carrying value

Carrying value

Carrying value¥1,554¥698$16,254

Unlisted Stocks

The unlisted stocks in the preceding table do not have market values, and as estimating
their future cash ﬂows is deemed to be extremely difﬁcult, they are not included in the abovetable “(3) Investment securities.”
Note 3: Planned redemption amounts after the balance-sheet date for held-to-maturity
securities and receivables were as follows:
Millions of yen

Cash and deposits
Trade notes and accounts
receivable
Total

Thousands of
U.S. dollars

2013

2012

2013

Within 1 year

Within 1 year

Within 1 year

¥ 44,570¥ 40,643$ 473,905

61,791¥106,362

64,765¥105,409

657,006$1,130,911

12. Marketable and Investment Securities
The carrying value and acquisition cost of other securities as of March 31, 2013 and 2012 were as follows:
Millions of yen

Thousands of
U.S. dollars

2013

ASSETS
Carrying value

Acquisition cost

Unrealized gain
(loss)

Carrying value

Acquisition cost

Unrealized gain
(loss)

Stocks¥1,370

¥ 908

¥ 462

$14,576$ 9,660$ 4,916

Bonds

—

—

—

—

—

—

Other

—

—

—

—

—

—

¥1,370

¥ 908

¥ 462

$14,576$ 9,660$ 4,916

Stocks

¥ 445

¥ 590

¥(145)$ 4,734$ 6,278$(1,543)

Bonds

—

—

—

—

—

—

Other

—

—

—

—

—

—

Subtotal

¥ 445

¥ 590

¥(145)$ 4,734$ 6,278$(1,543)

Total¥1,816¥1,499¥ 317$19,311$15,938$ 3,372

Description

Securities whose carrying value
exceeds their acquisition cost
Subtotal
Securities whose acquisition costexceeds their carrying value

LINTEC ANNUAL REPORT 201337

Financial Section

Millions of yen

ASSETS

2012
Carrying value

Acquisition cost

Unrealized gain
(loss)

Stocks

¥ 922

¥ 618

¥ 304

Bonds

—

—

—

Other

—

—

—

¥ 922

¥ 618

¥ 304

Stocks

¥ 757

¥ 879

¥(121)

Bonds

—

—

—

Other

—

—

—

Subtotal

¥ 757

¥ 879

¥(121)

Total¥1,680¥1,498¥ 182

Description

Securities whose carrying value
exceeds their acquisition cost
Subtotal
Securities whose acquisition costexceeds their carrying value

The Company wrote down by ¥128 million against other securities with a remarkable decline in the value of investment for the year ended
March 31, 2012.
13. Derivatives
Derivative transactions to which the Company did not apply hedge accounting as of March 31, 2013 and 2012 were as follows:(Currency related)
Millions of yen

2013
Contract amounts
Total

Over 1 year

Estimated
Fair value

Sell : U.S. dollars (buy Japanese yen)

¥313

¥—

¥ (5)

Buy : Japanese yen (sell U.S. dollars)

207

—

(10)

(10)

¥521

¥—

¥(15)

¥(15)

Nature of transaction

Off-market transactions

Unrealized
gain (loss)¥ (5)Forward exchange contracts to:

Total

Thousands of U.S. dollars

2013
Contract amounts
Total

Over 1 year

Estimated
Fair value

Sell : U.S. dollars (buy Japanese yen)

$3,337$—$ (61)

Buy : Japanese yen (sell U.S. dollars)

2,202

—

(108)

(108)

$5,539$—$(170)$(170)Nature of transaction

Off-market transactions

Unrealized
gain (loss)$ (61)

Forward exchange contracts to:

Total

Note: Method of computing the estimated fair value is based on information provided by ﬁnancial institutions at the end of the ﬁscal year.
Millions of yen

2012
Contract amounts
Total

Over 1 year

Estimated
Fair value

Sell : U.S. dollars (buy Japanese yen)

¥ 831

¥—

¥(24)

Buy : Japanese yen (sell Taiwan dollars)

369

—

0

0

Buy : Japanese yen (sell U.S. dollars)

287

—

0

0

Nature of transaction

Off-market transactions¥(24)

Forward exchange contracts to:

Buy : Japanese yen (sell Thai Baht)
Total

48

—

(0)

(0)

¥1,537

¥—

¥(24)

¥(24)

Note: Method of computing the estimated fair value is based on information provided by ﬁnancial institutions at the end of the ﬁscal year.

38

Unrealized
gain (loss)

LINTEC ANNUAL REPORT 2013

14. Accrued Pension Costs
The Company and its domestic subsidiaries sponsor a corporate pension fund under the Japanese Defined Benefit Corporate Pension Law andretirement plans for their employees. Certain foreign consolidated subsidiaries have defined contribution plans and defined benefit plans.
Actuarial present value of projected benefit obligations and unfunded status as of March 31, 2013 and 2012 were as follows:
Millions of yen

Thousands of
U.S. dollars

2012¥ (32,396)

2013$(389,833)

2013¥ (36,663)

ASSETS
Actuarial present value of projected benefit obligations
Plan assets

18,16515,809193,147

Unfunded accrued pension costs(18,498)(16,586)(196,685)

Unrecognized net actuarial loss

6,043

4,681

64,260

Unrecognized prior service cost

(1,681)(1,965)(17,879)

Net retirement benefit obligation recognized in the consolidated balance sheet(150,304)(14,136)(13,870)

Prepaid pension costs

―

44

―

Accrued pension costs¥ (14,136)¥ (13,914)$(150,304)

Millions of yen

Thousands of
U.S. dollars

2012¥1,2702013$13,376

Components of pension and severance cost for the years ended March 31, 2013 and 2012 were as follows:2013¥1,258ASSETS
Service cost
Interest cost

667

662

7,092

Expected return on plan assets

(559)

(547)

(5,948)Unrecognized net actuarial loss

540

534

5,749

Prior service cost

(244)

(304)

(2,603)

Other
Total

109

93

1,168

¥1,771¥1,708$18,836

Major assumptions at the beginning of each of the years ended March 31, 2013 and 2012 were as follows:2013
Mainly 1.3%

ASSETS
Discount rate
Expected rate of return on plan assets

2012
Mainly 2.0%

Mainly 3.5%

Mainly 3.5%

Straight-line method

Straight-line method

Term of amortization of unrecognized net actuarial loss

15 years

15 years

Term of amortization of prior service cost

15 years

15 years

Allocation method of pension costs

15. Stock Option Plan
Components of stock-based compensation expense for the years ended March 31, 2013 and 2012 were as follows:

ASSETS
Cost of sales
Selling, general and administrative expenses

Millions of yen

Thousands of
U.S. dollars

2013
¥ 3

2012
¥―

2013
$ 39

15

9

163

The following table summarizes contents of stock options as of March 31, 2013:
The first share subscription rights
Name of Company
Date of approval of the Board of Directors
Position and number of grantees
Class and number of stocks
Date of grantCondition and settlement of rights
Period of providing service for stock options
Exercise period

The Company
August 10, 2006
Directors, 17
Common stock 10,500 shares
August 25, 2006
Persons who have received allotment of share subscription rights must hold the position of
director of the Company at the time of grant.
—
From August 26, 2006 to August 25, 2026

LINTEC ANNUAL REPORT 201339

Financial Section

The second share subscription rights
Name of Company
Date of approval of the Board of Directors
Position and number of grantees
Class and number of stocks
Date of grantCondition and settlement of rights
Period of providing service for stock options
Exercise period
The third share subscription rights
Name of Company
Date of approval of the Board of Directors
Position and number of grantees
Class and number of stocks
Date of grantCondition and settlement of rights
Period of providing service for stock options
Exercise period
The fourth share subscription rights
Name of Company
Date of approval of the Board of Directors
Position and number of grantees
Class and number of stocks
Date of grantCondition and settlement of rights
Period of providing service for stock options
Exercise period
The fifth share subscription rights
Name of Company
Date of approval of the Board of Directors
Position and number of grantees
Class and number of stocks
Date of grantCondition and settlement of rights
Period of providing service for stock options
Exercise period
The sixth share subscription rights
Name of Company
Date of approval of the Board of Directors
Position and number of grantees
Class and number of stocks
Date of grantCondition and settlement of rights
Period of providing service for stock options
Exercise period

40

LINTEC ANNUAL REPORT 2013

The Company
August 9, 2007
Directors, 17
Common stock 9,300 shares
August 24, 2007
Persons who have received allotment of share subscription rights must hold the position of
director of the Company at the time of grant.
—
From August 25, 2007 to August 24, 2027

The Company
August 8, 2008
Directors, 14
Common stock 9,800 shares
August 25, 2008
Persons who have received allotment of share subscription rights must hold the position of
director of the Company at the time of grant.
—
From August 26, 2008 to August 25, 2028

The Company
August 7, 2009
Directors, 14
Common stock 15,000 shares
August 24, 2009
Persons who have received allotment of share subscription rights must hold the position of
director of the Company at the time of grant.
—
From August 25, 2009 to August 24, 2029

The Company
August 9, 2010
Directors, 16
Common stock 14,100 shares
August 24, 2010
Persons who have received allotment of share subscription rights must hold the position of
director of the Company at the time of grant.
—
From August 25, 2010 to August 24, 2030

The Company
August 9, 2011
Directors, 8Common stock 7,600 shares
August 24, 2011
Persons who have received allotment of share subscription rights must hold the position of
director of the Company at the time of grant.
—
From August 25, 2011 to August 24, 2031

The seventh share subscription rights
Name of Company
Date of approval of the Board of Directors
Position and number of grantees
Class and number of stocks
Date of grantCondition and settlement of rights
Period of providing service for stock options
Exercise period

The Company
August 8, 2012
Directors, 8 and Executive Officers, 12
Common stock 15,900 shares
August 23, 2012
Persons who have received allotment of share subscription rights must hold the position of
director or executive officer of the Company at the time of grant.
—
From August 24, 2012 to August 23, 2032

The following tables summarize the scale and movement of stock options for the years ended March 31, 2013 and 2012:(Non-vested stock options)

Stock options outstanding at April 1, 2011
Stock options granted
Forfeitures
Conversion to exercisable stock options
Stock options outstanding at March 31, 2012
Stock options granted
Forfeitures
Conversion to exercisable stock options
Stock options outstanding at March 31, 2013

The first sharesubscription rights

The second sharesubscription rights

The third sharesubscription rights

The fourth sharesubscription rights

The fifth sharesubscription rights

The sixth sharesubscription rights

The seventh sharesubscription rights

—
—
—
—
—
—
—
—
—

—
—
—
—
—
—
—
—
—

—
—
—
—
—
—
—
—
—

—
—
—
—
—
—
—
—
—

—
—
—
—
—
—
—
—
—

—
7,600
—
7,600
—
—
—
—
—

—
—
—
—
—
15,900—15,900—The first sharesubscription rights

The second sharesubscription rights

The third sharesubscription rights

The fourth sharesubscription rights

The fifth sharesubscription rights

The sixth sharesubscription rights

The seventh sharesubscription rights

6,000
—
—
—
6,000
—
—
—
6,000

5,500
—
—
—
5,500
—
—
—
5,500

9,800
—
500
—
9,300
—
—
—
9,300

15,000—800—
14,200———14,20014,100—1,400—
12,700———12,700

—
7,600
—
—
7,600
—
—
—
7,600

—
—
—
—
—
15,900——15,900(Vested stock options)

Stock options outstanding at April 1, 2011
Conversion from not exercisable stock options
Stock options exercised
Forfeitures
Stock options outstanding at March 31, 2012
Conversion from not exercisable stock options
Stock options exercised
Forfeitures
Stock options outstanding at March 31, 2013

The following table summarizes the price information of stock options as of March 31, 2013:

Exercise price
Average market price of the stock at the timeof exercise
Fair value at the date of grant

The first sharesubscription rights

The second sharesubscription rights

The third sharesubscription rights

The fourth sharesubscription rights

The fifth sharesubscription
rights

The sixth sharesubscription
rights

The seventh sharesubscription
rights

¥1

¥1

¥1

¥1

¥1

¥1

¥1

—

—

—

—

—

—

—

2,788

1,947

1,481

1,726

1,474

1,303

1,203

The fair value of stock options granted during the years ended March 31, 2013 and 2012 were valuated by using the Black Scholes option pricing
model with the following assumptions:

Volatility
Expected remaining period
Expected dividend
Risk free interest rate

The sixth sharesubscription
rights

The seventh sharesubscription
rights35.063%10 years¥ 40
1.055%

35.560%10 years¥ 40
0.867%The expected remaining period for stock options is assumed to be the mid-point of the exercise period.
LINTEC ANNUAL REPORT 201341

Financial Section

16. Income Taxes
1. The Company and its consolidated subsidiaries are subject to a number of taxes based on income which, in the aggregate, resulted in a statutory
tax rate of approximately 38.01% and 40.69% for the years ended March 31, 2013 and 2012, respectively. Income taxes of the foreign consolidated
subsidiaries are based generally on-the tax rates applicable in their countries of incorporation. The effective tax rates reflected in the consolidated
statements of income for the years ended March 31, 2013 and 2012 differ from the statutory tax rate for the following reasons:2013
38.01%

2012
40.69%

0.81(9.32)
0.50(7.59)(3.53)
0.60
9.69
—
0.01
29.18%

0.73(7.54)
0.40(7.55)(3.32)(2.10)
7.83
5.42
0.39
34.95%

Millions of yen

Thousands of
U.S. dollars

2013

2012

2013

775
144
122
5,014
585
343
155
236
790
8,166
(178)
7,987

¥ 786
93
193
4,984
561
267
139
213
569
7,810
(176)
7,634

$ 8,242
1,534
1,299
53,321
6,220
3,654
1,648
2,509
8,401
86,833(1,900)84,933

(165)
(104)
(472)
(340)
(1,081)¥ 6,906

(169)
(65)
(470)
(259)
(965)
¥6,669(1,755)(1,107)(5,022)(3,616)(11,501)$ 73,431

ASSETS
Statutory tax rate
Effect of:Permanently non-deductible expenses for income tax purposes such as entertainment expenses
Permanently non-taxable income for income tax purposes such as dividend income
Municipal Tax
The difference of tax rates applied to foreign subsidiaries
Tax deduction in accordance with special tax measures
Decrease of valuation allowance for such as net operating loss carryforward
Consolidating adjustment of dividend income from consolidated subsidiaries
Effect of revised corporate tax rate
Other, net
Effective tax rate

2. The significant components of deferred tax assets and liabilities as of March 31, 2013 and 2012 were as follows:

ASSETS
Deferred tax assets:
Accrued bonuses
Accrued enterprise taxes
Operating loss carryforwards
Accrued pension costs
Research and development cost
Loss on valuation of inventories
Allowance for doubtful accounts
Unrealized gain
Other
Gross deferred tax assets
Valuation allowance
Deferred tax liabilities:
Revaluation of fixed assets in accordance with special tax measures
Net unrealized holding gain on securities
Depreciation expense of subsidiaries
Other
Net deferred tax assets¥

17. Business Combinations
There is no business combination for the year ended March 31, 2013.
18. Asset Retirement Obligations
There is no asset retirement obligation as of March 31, 2013 and 2012.
19. Rental Property
No specific disclosure for rental property has been made as of March 31, 2013 and 2012 because of its immateriality.
20. Segment Information
1. Overview of reportable segments(1) Decision procedures for reportable segments
The business segments of our group are subject to periodic review, because each of them provides its own financial information separately fromother business units of our group and the board of directors not only makes a decision on allocation of management resources, but also evaluates
the performance of them.

42

LINTEC ANNUAL REPORT 2013

Our group consists of 6 business segments, each of which develops comprehensive strategies and conducts business activities in overseas anddomestic markets.
Based on product manufacturing methods and similarity of the markets where the products are introduced, we aggregate these business segments
into 3 distinguishable units, such as “Printing and Industrial Materials Products,” “Electronic and Optical Products,” and “Paper and Converted
Products,” to include in this report.
(2) Products and services handled in each segment
Products and services handled in each segment were as follows:
Reportable segments

Main products and services

Printing and Industrial Materials
Products

Adhesive papers and films for seals and labels, Label printing machines, Barcode printers, Films for outdoor signs andadvertising, Interior finishing mounting sheets, Window films, PV backsheets, Adhesive products for automobiles,
Industrial-use adhesive tapes, Healthcare-related productsElectronic and Optical Products

Semiconductor-related tapes and equipment, Coated films for multilayer ceramic capacitor production, Optical-related
products

Paper and Converted Products

Color papers for envelopes, Special function papers, Release papers and films, Casting papers for carbon fiber materials,
Casting papers for synthetic leather

2. Method of calculating sales and income (loss), assets, and other items by reportable segment reported
The reported information regarding business segments is processed mostly following the accounting procedures listed in “Significant Accounting
Policies” used as basis for preparing consolidated financial statements.
The profits of the segments reported are based on operating income.
The values for internal sales and transfers conducted between segments are given based on the market price for transactions between consolidated companies, and on the first cost for transactions within the same company.
3. Information on sales and income (loss), assets, and other items by reportable segment for the years ended March 31, 2013 and 2012 are outlined
as follows:
Millions of yen

2013

ASSETS
Printing andIndustrial Materials
Products

Electronic and
OpticalProducts

Paper andConverted
Products

Total¥82,761¥72,352¥35,730¥190,844

24

19

16,33016,375(16,375)—¥82,785¥72,372¥52,061¥207,219¥(16,375)¥190,844¥ 2,380¥ 3,196¥ 4,980¥ 10,557¥

7¥ 10,564

Depreciation and amortization¥ 3,087¥ 4,308¥ 2,745¥ 10,141¥—¥ 10,141

Amortization of goodwill

¥

¥

¥

¥

¥

—

¥

Adjustments

Consolidation

Net sales
Net sales to external customers
Intra-segment sales and transfers
Total
Segment income¥—¥190,844

Others
57

—

—

57

57

Thousands of U.S. dollars

2013

ASSETS
Printing andIndustrial Materials
Products

Electronic and
OpticalProducts

Paper andConverted
Products

Total$879,969$769,299$379,910$2,029,179

262

212

173,639

174,114(174,114)—$880,232$769,511$553,550$2,203,293$(174,114)$2,029,179$ 25,310$ 33,985$ 52,953$ 112,250$79$ 112,329

Depreciation and amortization$ 32,833$ 45,807$ 29,192$ 107,833$—$ 107,833

Amortization of goodwill

$

$

$

$

$

—

$

Adjustments

Consolidation$$2,029,179

Net sales
Net sales to external customers
Intra-segment sales and transfers
Total
Segment income—

Others
615

—

—

615

615

Notes: (1) Segment income adjustments show elimination of the amount of intra-segments transactions.
(2) Segment income is adjusted to be reported as operating income in the consolidated statements of income.
(3) The amount to be written off as depreciation and amortization of goodwill are allocated among the business segment on the basis of reasonable criteria.
(4) Since companies, ofﬁces, and factories serve as the base for administrative classiﬁcation of segment’s assets, no allocation to the business segment is done.

LINTEC ANNUAL REPORT 201343

Financial Section

Millions of yen

2012

ASSETS
Printing andIndustrial Materials
Products

Electronic and
OpticalProducts

Paper andConverted
Products

Total¥90,093¥73,874¥36,937¥200,905

50

50

16,28816,389(16,389)—¥90,143¥73,925¥53,225¥217,294¥(16,389)¥200,905¥ 5,213¥ 3,942¥ 4,846¥ 14,002¥(27)¥ 13,975

Depreciation and amortization¥ 3,305¥ 3,978¥ 2,795¥ 10,079¥—¥ 10,079

Amortization of goodwill

¥

¥

¥

¥

¥

—

¥

Adjustments

Consolidation

Net sales
Net sales to external customers
Intra-segment sales and transfers
Total
Segment income¥—¥200,905

Others
42

—

—

42

42

Notes: (1) Segment income adjustments show elimination of the amount of intra-segments transactions.
(2) Segment income is adjusted to be reported as operating income in the consolidated statements of income.
(3) The amount to be written off as depreciation and amortization of goodwill are allocated among the business segment on the basis of reasonable criteria.
(4) Since companies, ofﬁces, and factories serve as the base for administrative classiﬁcation of segment’s assets, no allocation to the business segment is done.

Related Information
1. Information by product and service
Since the Company and its consolidated subsidiaries disclose the same information in its segment information section, it has been omitted.
2. Information by geographical segment
Millions of yen

Thousands of U.S. dollars

2013

ASSETS
Sales

Japan

Asia

Others

Total

Japan

Asia

OthersTotal¥126,500¥54,953¥9,390¥190,844$1,345,037$584,297$99,844$2,029,179

51,436

11,635

1,843

64,915546,902123,714

19,600690,218

Property, plant and equipment

Notes: Sales information is based on location of customers and it is classiﬁed by country or region.

Millions of yen

ASSETS
Sales

2012
Japan

Asia

OthersTotal¥134,953¥56,352¥9,599¥200,905

51,419

9,202

1,652

62,273

Property, plant and equipment

Notes: Sales information is based on location of customers and it is classiﬁed by country or region.

3. Information by principal customers
Millions of yen

ASSETS
Name of the customer

Related reportable segment

Sumitomo Chemical Company, Limited

Electronic and Optical Products

Thousands of
U.S. dollars

2013

2012
Sales

2013

¥20,638¥26,359$219,447

Information on impairment losses on noncurrent assets by reportable segment
There is no impairment loss on noncurrent assets for the years ended March 31, 2013 and 2012.
Information related to the amount of amortization of goodwill and the unamortized amount of goodwill by reportable segment
Millions of yen

2013

ASSETS

Unamortized amount of goodwill

44

LINTEC ANNUAL REPORT 2013

Printing andIndustrial Materials
Products

Electronic and
OpticalProducts

Paper andConverted
Products

Total

Consolidation

¥—

¥—

¥—

¥—

¥192

Thousands of U.S. dollars

2013

ASSETS

Unamortized amount of goodwill

Printing andIndustrial Materials
Products

Electronic and
OpticalProducts

Paper andConverted
Products

Total

Consolidation

$—

$—

$—

$—

$2,048Notes: Since the Company and its consolidated subsidiaries disclose the same information of the amount of amortization of goodwill in its segment information section, it has been omitted.
Since companies, ofﬁces, and factories serve as the base for administrative classiﬁcation of segment’s assets, no allocation to the segment of the enterprise is done.

Millions of yen

2012

ASSETS

Unamortized amount of goodwill

Printing andIndustrial Materials
Products

Electronic and
OpticalProducts

Paper andConverted
Products

Total

Consolidation

¥—

¥—

¥—

¥—

¥170

Notes: Since the Company and its consolidated subsidiaries disclose the same information of the amount of amortization of goodwill in its segment information section, it has been omitted.
Since companies, ofﬁces, and factories serve as the base for administrative classiﬁcation of segment’s assets, no allocation to the segment of the enterprise is done.

Information on profit arising from negative goodwill by reportable segment
There is no profit arising from negative goodwill for the years ended March 31, 2013 and 2012.
21. Related Party Transactions
The Company and its consolidated subsidiaries have transactions with NP Trading Co., Ltd., a subsidiary of Nippon Paper Group, for the years ended
March 31, 2013 and 2012. The transactions between the companies for the years were as follows:
Millions of yen

For the years
Sales of fine & specialty paper products and converted products
Purchase of stencil, chemicals and equipment

At year-end

Thousands of
U.S. dollars

2013

2012

2013

¥10,269¥ 10,774$109,191

6,159

5,451

65,490Millions of yen

Thousands of
U.S. dollars

2013

2012

2013

Trade notes and accounts receivable¥4,679¥ 4,681$49,755

Trade notes and accounts payable

2,714

2,056

28,866

5

185

61

Yen

U.S. dollars

Other liabilities

These related party transactions took place on terms similar to those with third parties.
22. Amounts Per Share
The amounts per share of net assets and net income as of and for the years ended March 31, 2013 and 2012 were as follows:

ASSETS

2013

2012

2013

¥1,909.57¥ 1,766.60$20.30Net income (basic)

102.83115.26

1.09

Net income (diluted)

102.74115.18

1.09

Net assets

LINTEC ANNUAL REPORT 201345

Financial Section

The bases for calculation were as follows:(1) Basic and diluted net income per share

ASSETS

Millions of yen

Thousands of
U.S. dollars

2013

2012

2013
$81,671

Net income (basic) per share:¥ 7,681¥ 8,648

Amount not attributable to common shareholders

—

—

—

Net income attributable to common shareholders¥ 7,681¥ 8,648$81,671

Weighted-average number of shares issued during the year (thousand)

74,69575,031

74,695¥¥$

Net income

Net income (diluted) per share:
Adjustment of net income related to dilutive securities

—

—

—

Adjustment of dilutive securities (thousand)

65

54

65

[Share subscription rights (thousand)]

[65]

[54]

[65]

Millions of yen

Thousands of
U.S. dollars(2) Net assets per share

ASSETS
Total net assets

2013

2012

2013

¥143,569¥132,847$1,526,526

Amount deducted from total net assets[Share subscription rights][Minority interests]
Net assets attributable to shares of common stock

935

890

9,948

[113]

[94]

[1,206]

[822]

[796]

[8,741]¥142,634¥131,957$1,516,578

74,69474,69574,694

Number of shares of common stock outstanding used in calculation of net assets per share (thousand)

23. Short-Term Borrowings, Long-Term Debt and Other Interest-Bearing Debts
Short-term bank loans are represented generally by 30-day or 90-day notes issued by the Company and its consolidated subsidiaries to banks atannual interest rates from 0.36% to 0.82% at March 31, 2013 and from 0.47% to 0.84% at March 31, 2012.
Short-term borrowings as of March 31, 2013 and 2012 consisted of the following:Thousands of
U.S. dollars

Millions of yen

ASSETS

2013

2012

2013

Short-term bank loans¥1,430¥1,320$15,204

Current portion of long-term debt

—

—

—

¥1,430¥1,320$15,204

Millions of yen

Thousands of
U.S. dollars

Other interest-bearing debts as of March 31, 2013 and 2012 consisted of the following:

ASSETS

2013

2012

2013

Short-term lease obligation

¥212

¥204

$2,258Long-term lease obligation

626

670

6,666

Planned repayment amounts after the balance sheet (March 31, 2013) date for long-term debt and lease obligation are as follows:
Millions of yen

Thousands of U.S. dollars

2013

Lease obligation

Over 1 year
within 2 years

Over 2 years
within 3 years

Over 3 years
within 4 years

Over 4 years
within 5 years

Over 1 year
within 2 years

Over 2 years
within 3 years

Over 3 years
within 4 years

Over 4 years
within 5 years

¥171

¥142

¥119

¥92

$1,820$1,511$1,269$981

24. Subsequent Event
The following distribution of retained earnings was approved at a meeting of the board of directors held on May 9, 2013.
Millions of yen

Thousands of
U.S. dollars¥1,269$13,501ASSETSCash dividends (¥17 per share)46

LINTEC ANNUAL REPORT 20132013

Management’s Report on Internal Control
over Financial Reporting
Basic Framework of Internal Control over Financial Reporting
Akihiko Ouchi, President & Chief Executive Officer of LINTEC Corporation, and Hitoshi Asai, Director, Vice President Executive Officer & Chief Financial
Officer of LINTEC Corporation, are responsible for designing and operating adequate internal control over financial reporting for consolidated financial
statements of LINTEC Corporation and consolidated subsidiaries (the “Company”) in accordance with the basic framework set forth in “Standards andPractice Standards for Management Assessment and Audit concerning Internal Control Over Financial Reporting” issued by Business Accounting Council.
Internal control achieves its objectives to a reasonable extent given that all individual components of internal control are integrated and function
as a whole. Internal control over financial reporting for consolidated financial statements may not completely prevent or detect misstatements infinancial reporting.
Scope of Assessment, Assessment Date and Assessment Procedure
We assessed the effectiveness of the Company’s internal control over financial reporting for the accompanying consolidated financial statements asof March 31, 2013 in accordance with the standards for assessment of internal control over financial reporting generally accepted in Japan.
For this assessment, we first evaluated the company-level controls which would have a material impact on the reliability of overall financial reportingon a consolidated basis. We then selected the process-level controls to be assessed based on the results of the company-level control assessment.
For the process-level control assessment, we evaluated the effectiveness of internal control by analyzing processes in scope, identifying key controlsthat would have a material impact on the reliability of the financial reporting, and assessing the design and operation of such key controls.
We determined the scope of assessment by selecting consolidated subsidiaries based on their materiality of impact on the reliability of financial
reporting. We determined their materiality of impact by considering both quantitative and qualitative aspects. The scope of our process-level control
assessment was determined based on the results of our assessment of company-level controls, which included its 13 consolidated subsidiaries.
We excluded 12 consolidated subsidiaries from the scope of the company-level control assessment since their quantitative and qualitative impacts
were deemed insignificant.
For the purpose of determining the scope of process-level controls assessment, we selected 1 consolidated subsidiary as “Significant Business
Locations,” which contributed approximately two thirds of the Company’s net sales on a consolidated basis for the fiscal year ended March 31, 2012.
For the Significant Business Locations, we primarily included business processes related to sales, accounts receivable, and inventory in the scopeof assessment as the aforementioned accounts were closely associated with the Company’s business objectives. In addition, we included certain
business processes in the scope of assessment not only from “Significant Business Locations” but also from all subsidiaries and affiliates,
which were related to significant accounts involving estimates and management’s judgment or include high-risk operations and/or transactions,as “business processes with a material impact on financial reporting.”
Assessment Result
Based on the results of our assessment with the above mentioned scope, date and procedures, we concluded that Company’s internal control overfinancial reporting for the accompanying consolidated financial statements as of March 31, 2013 was effective.

LINTEC ANNUAL REPORT 201347

Financial Section

Report of Independent Auditors

48

LINTEC ANNUAL REPORT 2013

LINTEC ANNUAL REPORT 201349

Investor Information
As of March 31, 2013

Head Ofﬁce
23-23, Honcho, Itabashi-ku, Tokyo 173-0001, Japan
Phone: +81-3-5248-7711 Fax: +81-3-5248-7760
URL: http://www.lintec-global.com/
Established
October 15, 1934
Fiscal Year-End
March 31
Net Assets¥143,569 million
Common Stock
Authorized: 300,000,000 shares
Issued: 76,564,240 shares
Stock Listing
Tokyo Stock Exchange, 1st Section
Securities Code: 7966
Shareholder Register Agent for Common Stock
Mitsubishi UFJ Trust and Banking Corporation
1-4-5, Marunouchi, Chiyoda-ku,
Tokyo 100-8212, Japan
Number of Employees
4,270 (Consolidated)
2,552 (Parent company only)
Major Shareholders
Nippon Paper Industries Co., Ltd. ........................................................29.10%
Japan Trustee Services Bank, Ltd. (Trust Account) .............................. 3.81%
Japan Trustee Services Bank, Ltd. (Trust Account 9) ........................... 3.79%
The Master Trust Bank of Japan, Ltd. (Trust Account) .........................3.46%
Tamie Shoji ............................................................................................. 3.07%

Major Subsidiaries
Domestic
LINTEC COMMERCE, INC.*
LINTEC SIGN SYSTEM, INC.*
FUJI-LIGHT, INC.*RENRI, INC.*
LINTEC SERVICES, INC.
LINTEC CUSTOMER SERVICE, INC.
PRINTEC, INC.
TOKYO LINTEC KAKO, INC.
OSAKA LINTEC KAKO, INC.
Overseas
LINTEC USA HOLDING, INC.*
MADICO, INC.*
LINTEC OF AMERICA, INC.*
LINTEC EUROPE B.V.*
LINTEC ADVANCED TECHNOLOGIES (EUROPE) GMBH*
LINTEC (SUZHOU) TECH CORPORATION*
LINTEC (TIANJIN) INDUSTRY CO., LTD.*
LINTEC PRINTING & TECHNOLOGY (TIANJIN) CORPORATION*
LINTEC ADVANCED TECHNOLOGIES (SHANGHAI), INC.*
LINTEC SPECIALITY FILMS (TAIWAN), INC.*
LINTEC HI-TECH (TAIWAN), INC.*
LINTEC ADVANCED TECHNOLOGIES (TAIWAN), INC.*
LINTEC KOREA, INC.*
LINTEC SPECIALITY FILMS (KOREA), INC.*
LINTEC ADVANCED TECHNOLOGIES (KOREA), INC.*
PT. LINTEC INDONESIA*
LINTEC SINGAPORE PRIVATE LIMITED*
LINTEC ADVANCED TECHNOLOGIES (PHILIPPINES), INC.
LINTEC PHILIPPINES (PEZA), INC.
LINTEC (THAILAND) CO., LTD.*
LINTEC BKK PTE LIMITED
LINTEC VIETNAM CO., LTD.
LINTEC INDIA PRIVATE LIMITED
LINTEC INDUSTRIES (MALAYSIA) SDN. BHD.*
LINTEC INDUSTRIES (SARAWAK) SDN. BHD.*
LINTEC ADVANCED TECHNOLOGIES (MALAYSIA) SDN. BHD.
* Consolidated Subsidiary

Ownership and Distribution of Shares

Share Price / Trading Volume
Share Price¥
2,500

Financial Institutions ............................. 20.95%

2,000

Securities Companies ............................. 0.50%
Other Companies................................... 34.59%

1,500

Overseas Companies ............................. 21.83%
Individuals and Other ............................ 19.69%

1,000Treasury Stock ......................................... 2.44%

Trading Volume
Million shares

12
9
6
3
0

50

LINTEC ANNUAL REPORT 2013

FY2011FY2012FY2013

LINTEC’s Annual Report and other information are available at:
http://www.lintec-global.com/

LINTEC ANNUAL REPORT 2013

LINTEC CORPORATION
23-23, Honcho, Itabashi-ku,
Tokyo 173-0001, Japanwww.lintec-global.com/

Printed in Japan