Consolidated Financial Results for the Fiscal Year Ended March 31, 2018 [J-GAAP]May 11, 2018

Company Name:

Dai Nippon Printing Co., Ltd.

Stock exchange listing:Tokyo
Stock code:
7912
URL: http://www.dnp.co.jp/
Representative:
Yoshitoshi Kitajima, President
Contact person:
Takaaki Tamura, General Manager, Corporate Communication
Telephone:+81-3-6735-0101
General meeting of shareholders:June 28, 2018
Dividend payment date:June 29, 2018
Securities report issuing date:June 28, 2018
Preparation of earnings presentation material: None
Holding of earnings announcement:
None*Amounts under one million yen have been rounded down.

1. Consolidated financial results for the year ended March 31, 2018
(April 1, 2017 – March 31, 2018)(1) Consolidated financial results(Percentages show change from corresponding year-ago period.)
Net Income
Attributable toOperating Income
Ordinary Income
Parent Company
Shareholders

Net Sales
Million yen%

Million yen%

Million yen%

Million yen%

Year ended March 31, 2018

1,412,251

0.1

46,37247.6

50,971

38.7

27,501

9.0

Year ended March 31, 2017

1,410,172(3.1)

31,410(30.9)

36,740(30.2)

25,226(24.9)

Note: Comprehensive income: Year ended March 31, 2018: ¥56,404 million (5.8%)
Year ended March 31, 2017: ¥53,334 million (–%)
Net Income
per Share

Diluted Net
Incomeper Share

Ordinary
Income toTotal Assets

ROE

Operating
Income to
Net Sales

Yen

Yen

%

%

%

Year ended March 31, 2018

90.77

90.71

2.6

2.9

3.3

Year ended March 31, 2017

81.57

81.55

2.5

2.1

2.2

Reference: Equity in earnings of affiliates: Year ended March 31, 2018: ¥3,007 million
Year ended March 31, 2017: ¥3,014 million
Note: Dai Nippon Printing Co., Ltd. implemented a share consolidation in which two shares of common stock wereconsolidated into one share effective October 1, 2017. Accordingly, it has estimated net income per share and diluted
net income per share assuming this share consolidation was implemented at the start of the previous consolidated fiscal
year.

(2) Consolidated financial position
Total Assets

Net Assets

Net Assets
per Share

Equity Ratio

Million yen

Million yen%

Yen

As of March 31, 2018

1,810,498

1,102,550

58.2

3,493.79

As of March 31, 2017

1,741,904

1,081,286

59.4

3,361.10

Reference: Stockholders’ equity: As of March 31, 2018: ¥1,053,600 million As of March 31, 2017: ¥1,033,864 million
Note: Dai Nippon Printing Co., Ltd. implemented a share consolidation in which two shares of common stock wereconsolidated into one share effective October 1, 2017. Accordingly, it has estimated net assets per share assuming thisshare consolidation was implemented at the start of the previous consolidated fiscal year.

(3) Consolidated cash flows
Cash Flows fromOperating Activities

Cash Flows from
Investing Activities

Cash Flows from
Financing Activities

Cash and Cash
Equivalents at Endof the Year

Million yen

Million yen

Million yen

Million yen

Year ended March 31, 2018

48,457

23,074(42,771)244,936

Year ended March 31, 2017

71,94414,011(45,222)214,564

2. Dividends
Dividends per Share
First
Quarter-end

SecondThird
Quarter-end Quarter-end

Year-end

AnnualTotal Dividends(Annual)Dividend
Payout Ratio(Consolidated)

Dividends to
Net Assets
Ratio(Consolidated)

Yen

Yen

Yen

Yen

Yen

Million yen%%

Year ended March 31, 2017

–

16.00

–

16.00

32.00

19,70578.5

1.9

Year ended March 31, 2018

–

16.00

–

32.00

–

19,31770.5

1.9

Year ending March 31,
2019 (Forecast)

–

32.00

–

32.00

64.00

68.9

Note: Dai Nippon Printing Co., Ltd. implemented a share consolidation in which two shares of common stock wereconsolidated into one share effective October 1, 2017. As a result, year-end dividends per share for the fiscal year ended
March 2018 shows dividends after the share consolidation, and total annual dividends shows “–”. Without the shareconsolidation, year-end dividends per share for the fiscal year ended March 2018 would be ¥16.00 and total annual
dividends per share would be ¥32.00.

3. Consolidated earnings forecasts for the year ending March 31, 2019
(April 1, 2018 – March 31, 2019)(Percentages show change from corresponding year-ago period.)
Net Income
Operating
Attributable to
Net Income
Ordinary Income
IncomeParent Company
per Share
Shareholders

Net Sales

Full year

Million yen%

Million yen%

Million yen%

Million yen%

Yen

1,420,000

0.5

47,0001.4

52,0002.0

28,0001.8

92.85* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting ina change in the scope of consolidation): No(2) Changes in accounting policies, changes in accounting estimates, and restatement of revisions
1) Changes in accounting policies with revision of accounting standards: No
2) Changes in accounting policies other than the 1) above:No3) Changes in accounting estimates:
Yes
4) Restatement of revisions:No
Note: For further details, see the section titled, “5. Consolidated financial statements and key notes, (5)Notes regarding consolidated financial statements [Changes in accounting estimates]” on pages 26.
(3) Number of common shares issued and outstanding
1) Number of common shares outstanding
As of March 31,
324,240,346 As of March 31, 331,740,346
at end of each period (including
2018
shares2017
sharestreasury shares)
2) Number of treasury shares at end of
As of March 31,
22,676,600 As of March 31,
24,143,555
2018
shares2017
shareseach period
3) Average number of shares outstanding
Year ended
302,982,996
Year ended
309,253,383
March 31, 2018
shares March 31, 2017
sharesduring the period
Note: Dai Nippon Printing Co., Ltd. implemented a share consolidation in which two shares of common stock
were consolidated into one share effective October 1, 2017. Accordingly, it has estimated number ofcommon shares outstanding at end of each period, number of treasury shares at end of each period andaverage number of shares outstanding during the period assuming this share consolidation was

implemented at the start of the previous consolidated fiscal year.

(Reference) Non-consolidated financial results
Non-consolidated financial results for the year ended March 31, 2018
(April 1, 2017 – March 31, 2018)(1) Non-consolidated financial results(Percentages show change from corresponding year-ago period.)
Net Sales

Operating Loss

Ordinary Income

Net Income

Million yen%

Million yen%

Million yen%

Million yen%

Year ended March 31, 2018

990,750

1.4(2,914)–

26,42226.0

18,353(8.2)

Year ended March 31, 2017976,797(2.4)(9,406)–

20,962(25.7)

19,985(12.5)Net Income
per Share

Diluted Net Income
per Share
Yen

Yen

Year ended March 31, 2018

60.52

–

Year ended March 31, 2017

64.57

–

Note: Dai Nippon Printing Co., Ltd. implemented a share consolidation in which two shares of common stock
were consolidated into one share effective October 1, 2017. Accordingly, it has estimated net income pershare assuming this share consolidation was implemented at the start of the previous consolidated fiscal
year.

(2) Non-consolidated financial position
Total Assets

Net Assets

Net Assets
per Share

Equity Ratio

Million yen

Million yen%

Yen

As of March 31, 2018

1,447,073

737,69651.0

2,444.03

As of March 31, 2017

1,399,653

737,21152.7

2,394.56

Reference: Stockholders’ equity: As of March 31, 2018: ¥737,696 million As of March 31, 2017: ¥737,211 million
Note: Dai Nippon Printing Co., Ltd. implemented a share consolidation in which two shares of common stock wereconsolidated into one share effective October 1, 2017. Accordingly, it has estimated net assets per share assuming thisshare consolidation was implemented at the start of the previous consolidated fiscal year.

* These financial results are exempt from auditing by a certified public accountant or an auditing company.
* Explanation regarding appropriate use of earnings forecasts and other special notes
Forward-looking statements in this report, including earnings forecasts, are based on assumptions about
economic conditions, market trends, and other factors at the time the report was published. Actual results
may differ significantly due to a variety of factors. For information about earnings forecasts, see the section
titled, “1. Overview of operating results, etc., (4) Forecasts,” on page 5.

Contents
1. Overview of operating results, etc. ......................................................................................................... 2(1) Overview of operating results for the year ended March 31, 2018 ................................................... 2(2) Overview of financial position for the year ended March 31, 2018 ................................................... 4(3) Overview of cash flows for the year ended March 31, 2018 ............................................................. 4(4) Forecasts .......................................................................................................................................... 5(5) Basic policies regarding the allocation of profits and dividends for the year ended March 31, 2018
and year ending March 31, 2019...................................................................................................... 5(6) Business risks .................................................................................................................................. 6
2. Information on the DNP Group............................................................................................................... 8
3. Management policies ........................................................................................................................... 12(1) Core policies ................................................................................................................................... 12(2) Medium- and long-term management strategy and key issues ...................................................... 12
4. Basic approach in the choosing of accounting standards .................................................................... 15
5. Consolidated financial statements and key notes ................................................................................ 16(1) Consolidated balance sheets ......................................................................................................... 16(2) Consolidated statements of income and comprehensive income .................................................. 18(3) Consolidated statements of changes in net assets ........................................................................ 20(4) Consolidated statements of cash flows .......................................................................................... 22(5) Notes regarding consolidated financial statements ........................................................................ 24[Notes on premise of a going concern] .......................................................................................... 24[Basis of presenting consolidated financial statements] ................................................................ 24[Changes in accounting estimates] ................................................................................................ 26[Consolidated balance sheets]....................................................................................................... 26[Consolidated statements of income]............................................................................................. 26[Consolidated statements of changes in net assets] ..................................................................... 27[Segment information, etc.] ............................................................................................................ 29[Per share information] .................................................................................................................. 32[Significant subsequent events] ..................................................................................................... 32
6. Non-consolidated financial statements and key notes ......................................................................... 33(1) Non-consolidated balance sheets .................................................................................................. 33(2) Non-consolidated statements of income ........................................................................................ 36(3) Non-consolidated statements of changes in net assets ................................................................. 37(4) Notes regarding non-consolidated financial statements ................................................................. 38[Notes on premise of a going concern] .......................................................................................... 38

1

1. Overview of operating results, etc.
(1) Overview of operating results for the year ended March 31, 2018
Japan’s economy continued to gradually recover during the fiscal year ended March 31, 2018, with
employment and income conditions improving, aided by the economic policies of the Japanese
government, and capital expenditures showing signs of picking up as companies pursue initiatives ingrowth areas. However, the economy has still not reached a full-fledged recovery, due partly to alack of strength in consumer spending, overseas economic slowdowns in China and elsewhere, andthe impact of higher raw material prices.
The printing industry still faced a tough business environment, as demand decreased for printed
media, due partly to growth in the online advertising market, and competition also intensified.
In this environment, the DNP Group (DNP), primarily around the four growth areas of “Knowledge
and Communication,” “Food and Healthcare,” “Lifestyle and Mobility,” and “Environment and Energy,”
pursued P&I innovations as a combination of its strengths in printing and information to create newvalue to solve social issues both in Japan and overseas.
Specifically, in mobility-related business, the DNP Group developed curved resin glass that islighter than general glass in response to vehicle lightweighting needs to improve fuel efficiency, andit sought to expand use to vehicle rear windows and other applications. The DNP Group also
developed in-vehicle display viewing angle control films by drawing on technologies developed for
display optical films and other products. These high-performance films prevent display light fromreflecting on the front window, improve visibility from the driver’s seat, and increase freedom for
in-vehicle design.
The DNP Group also focused on developing products and services that leverage strengths in
information security acquired in the smart card and other businesses. For example, it developed adigital key service in which locks are opened and closed using a smartphone, with applications invarious sharing services such as vehicles, homes, and home delivery lockers and in user
authentication devices for internet of things (IoT) equipment. The DNP Group also made aggressive
efforts to build a system to share information acquired from electronic tags across a supply chain,and to standardize and build a platform for electronic receipt data using a household accounts
application ‘Receipi!.’ It sought to promote the commercialization of this system and platform.
The DNP Group established a joint venture with SIG Combibloc Group, the world’s leading
manufacturer of carton packaging for food and beverages, in April 2018, and started providing new
configurations of packaging and new aseptic filling equipment in the Japanese market.
The DNP Group worked to improve earnings by implementing structural reforms to bolster
business competitiveness, including the reorganization of business divisions and group companies.
As a result of these activities, consolidated net sales for the year ended March 31, 2018 grew
0.1% year on year to ¥1,412.2 billion, consolidated operating income grew 47.6% to ¥46.3 billion,
consolidated ordinary income grew 38.7% to ¥50.9 billion, and net income attributable to parent
company shareholders grew 9.0% to ¥27.5 billion.
Business segment results for the year ended March 31, 2018 are presented below.
[PRINTING]
Information Communication
In the Publishing business, amid a continued slump in the publication market, the DNP Group
worked to create a system to forecast demand by leveraging artificial intelligence to analyze
bookstore sales and other data and to increase coordination between book production, distribution,and sales. However, sales of books and magazines both decreased from the previous year in2

Publishing & Media Services. In the Education and Publications Distribution business, the DNPGroup focused on expanding business in the “honto” hybrid bookstore network that combines
physical bookstores, online bookstores, and e-book services. Sales were favorable for online
bookstores and e-books. New accounts also increased in library operations outsourcing services,
including at university and public libraries. However, sales in the Education and Publications
Distribution business decreased from the previous year as a result of making BUNKYODO GROUPHOLDINGS CO., LTD. an equity-method affiliate in October 2016 due to the partial sale of its stock.
Overall sales in the Publishing business also decreased year on year.
In the Information Innovation business, the DNP Group established two new Business Process
Outsourcing (BPO) centers in Shinjuku-ku, Tokyo and Fukuoka City, Fukuoka Prefecture in June
2017. BPO covers a broad range of agency services for companies and other entities, such as datacollection and contact center services. the DNP Group now has 13 BPO centers across Japan, and it
worked to expand support for digital marketing operations intended to increase the effectiveness ofsales promotions through timely delivery of optimal information to consumers. In this environment,
although sales decreased from the previous year for catalogs and pamphlets, they were strong forpoint-of-purchase promotional materials (POP) and other sales promotion tools and were also firm
for advertising flyers. Sales were also favorable in information security-related business, mainly
smart cards for financial institutions and electronic money and Information Processing Services (IPS;
handling data entry, printing, and shipment of personalized mail and other items). Overall sales in
the Information Innovation business increased from the previous year.
In the Imaging Communication business, the DNP Group worked to provide high-value-added
services to enjoy photo printing at events, promotions, and other activities, including “ShaGoo!”
automated commemorative photo booths and Imaging Mall as a cloud-based image sales solution.
The DNP Group conducts global sales of dye-sublimation thermal transfer printing media for photo
printers (color ink ribbons and receiver paper), and although sales increased in Southeast Asia andEurope, they decreased in Japan and North America. Overall sales in the Imaging Communication
business decreased from the previous year.
As a result of the above, overall segment sales fell 2.8% year on year to ¥778.6 billion but
operating income grew 15.2% to ¥21.7 billion.
Lifestyle and Industrial Supplies
In the Packaging business, sales of film packaging decreased in Japan but increased in Southeast
Asia. Sales increased for plastic molded products, including preform as a material used in PET
plastic bottles. However, sales decreased for paper packaging and PET plastic bottle aseptic fillingsystems, and overall sales in the Packaging business decreased from the previous year.
In the Living Space business, the DNP Group worked to expand sales of environmentallyconscious products that use its proprietary electronic beam (EB) coating technology. The DNPGroup also focused on delivering interior material solutions to create simple and effective spatial
expressions, including a wall display system that reduces the burden of changing store productdisplays and layouts and a wall refurbishment material enabling that can be easily installed byoverlaying on existing wallpaper for a beautiful finish in just a short time. Sales of Arttec interior andexterior aluminum panels and of decorative films with the look and feel of wood grains and metals
increased for non-housing applications such as commercial facilities, offices, automobiles, andrailway cars. Overall sales in the Living Space business increased from the previous year.
In the Industrial Supplies business, DNP’s film pouches for lithium-ion batteries have acquired ahigh global market share, leveraging technologies for laminates that combine multiple film sheets
and for precision coating. Sales of these products were favorable for both mobile and automotive
applications. Overseas sales of photovoltaic module components also increased, and overall sales

3

in the Industrial Supplies business increased from the previous year.
As a result of the above, overall segment sales grew 1.6% year on year to ¥394.3 billion but
operating income fell 16.0% to ¥12.1 billion.
Electronics
In the Display Components business, optical film sales increased for use in organic light-emitting
diode (OLED) displays with the spread of these displays, and were firm for use in LCDs due to larger
screen sizes. Sales of metals masks for OLED displays also increased for mobile device
applications. LCD color filter sales decreased for both small- and medium-sized filters used insmartphones and large filters used in TVs. However, overall sales in the Display Components
business increased from the previous year.
In the Electronic Devices business, semiconductor photomask sales increased amid high growthin the overall semiconductor market, supported by an increase in embedded memory capacity insmartphones and other devices and by the spread of IoT equipment.
As a result of the above, overall segment sales grew 11.4% year on year to ¥188.7 billion andoperating income grew 106.9% to ¥34.1 billion.
[BEVERAGES]
Beverages
The soft drink industry saw continued competition for market share through sales promotions, pricecompetition, and other actions. In this environment, the DNP Group bolstered sales of new products,
including foods for specified health use and foods with function claims, and worked to expand sharein existing markets and acquire new customers by conducting active sales promotions based onarea marketing in the vending machine business.
As a result of these efforts, sales increased for the mainstay Coca-Cola brand and for
unsweetened tea drinks including Ayataka. However, sales decreased for mineral waters and togroup bottlers outside the Hokkaido region. Overall segment sales fell 1.0% year on year to ¥56.0
billion and operating income fell 7.6% to ¥2.2 billion.
(2) Overview of financial position for the year ended March 31, 2018
Total assets at the end of the current fiscal year increased by ¥68.5 billion from the end of theprevious fiscal year to ¥1,810.4 billion, due mainly to an increase in cash and time deposits.
Total liabilities increased by ¥47.3 billion from the end of the previous fiscal year to ¥707.9 billion,
due mainly to an increase in repair reserve.
Net assets increased by ¥21.2 billion from the end of the previous fiscal year to ¥1,102.5 billion,
due mainly to an increase in valuation difference on available-for-sale securities.
(3) Overview of cash flows for the year ended March 31, 2018
Consolidated cash flow provided by operating activities totaled ¥48.4 billion (¥71.9 billion in theprevious fiscal year), due mainly to ¥45.3 billion in income before income taxes and non-controllinginterests and ¥61.0 billion in depreciation.
Cash flow provided by investing activities totaled ¥23.0 billion (¥14.0 billion in the previous fiscal
year), due mainly to ¥54.6 billion in proceeds from sales of investment securities and ¥32.5 billion in
payments for purchases of property, plant and equipment. Cash flow used in financing activities
totaled ¥42.7 billion (¥45.2 billion in the previous fiscal year), due mainly to ¥19.9 billion in dividends
paid and ¥15.0 billion for purchases of treasury stock.
As a result, cash and cash equivalents at the end of the fiscal year increased by ¥30.3 billion fromthe end of the previous fiscal year to ¥244.9 billion.

4

The trends in DNP’s cash flow indicators are shown below.
Year ended
March 2014

Year ended
March 2015

Year ended
March 2016

Year ended
March 2017

Year ended
March 2018

Equity ratio (%)

59.2

59.6

59.2

59.4

58.2

Market value-based
equity ratio (%)

40.4

41.6

36.6

42.4

36.6

Debt-to-cash flow ratio(year)

1.5

2.2

2.6

2.4

3.5

Interest coverage ratio(times)

40.6

35.1

29.8

32.6

21.9

Notes:***

Equity ratio: Total stockholders’ equity / Total assets
Market value-based equity ratio: Market capitalization / Total assets
Debt-to-cash flow ratio: Interest-bearing debt / Cash flow
Interest coverage ratio: Cash flow / Interest paid
The above indicators are calculated based on consolidated financial figures.
Market capitalization is calculated as: Fiscal year-end share price × fiscal year-end number of shares
outstanding (excluding treasury stock)
Cash flow: Cash flow provided by/used in operating activities on the consolidated statements of cash flows
Interest-bearing debt: All liabilities on the consolidated balance sheet that accrue interest charges
Interest paid: Interest paid on the consolidated statements of cash flows(4) Forecasts
The DNP Group expects the Japanese economy to continue a gradual recovery, given signs ofimprovement in the employment and income environment. However, the future outlook is uncertain,
including uncertainty in overseas economic conditions, impact of changes in financial and capital
markets, and trends in foreign exchange and crude oil prices.
In the printing industry, the DNP Group expects conditions to remain difficult, including a decline inorder prices due to lower demand for printed media and stiffer competition.
Going forward, the DNP Group will focus on P&I Innovations in an effort to create new value tosolve social issues by combining the strengths it has developed thus far, endeavoring to fulfill its
corporate philosophy: “The DNP Group connects individuals and society, and provides new value.”
The DNP Group also aims to expand earnings further by pursuing business structure reforms
according to the market environment and trends in demand.
For the fiscal year ending March 31, 2019, the DNP Group forecasts consolidated net sales of¥1,420 billion, consolidated operating income of ¥47 billion, consolidated ordinary income of ¥52
billion, and consolidated net income attributable to parent company shareholders of ¥28 billion.
(5) Basic policies regarding the allocation of profits and dividends for the year ended
March 31, 2018 and year ending March 31, 2019
An important policy of the DNP Group is to pass on profits to shareholders.
Profits are allocated based on a policy of paying stable dividends to shareholders and withconsideration for financial results and the dividend payout ratio. For future business expansion, the
DNP Group strives to retain profits and strengthen its management base.
Retained earnings are used to invest in research and development related to new products andtechnologies, to invest in equipment needed for developing new businesses, and to implement
strategic alliances, including mergers and acquisitions. At the same time, the DNP Group considers
flexible capital policies while also taking into consideration market trends as well as its need for5

capital. the DNP Group believes that these efforts will contribute to higher profits that can then bepassed on to shareholders in the future.
Based on this policy, the DNP Group intends to pay a year-end dividend of ¥32 per share. The
DNP Group changed the number of shares per unit from 1,000 shares to 100 shares andimplemented a share consolidation from two shares into one share on October 1, 2017. Accordingly,
the year-end dividend is equal to ¥16 per share before the share consolidation, and adding theinterim dividend of ¥16, the full-year dividend is effectively the same as the ¥32 dividend in the fiscal
year ended March 31, 2017. As a result, the consolidated dividend payout ratio will be 70.5%.
For the fiscal year ending March 31, 2019, the Company forecasts the interim dividend at ¥32 andthe year-end dividend at ¥32, for a full-year dividend of ¥64.
(6) Business risks
The performance and the results of the DNP Group could be significantly affected by a variety offactors and circumstances that might arise in the future. Because the DNP Group is aware of theserisk factors, its policy is to strive to minimize their potential effects.
The following are the major factors that the DNP Group management views as risks.
1) The Japanese and overseas economies and consumption trends
The DNP Group does business with an extremely large number of corporate customers in a wide
range of industries, and pursues stable business activities supported by a business base that does
not rely on specific industries and companies. The DNP Group does most of its business in theJapanese market, but if consumer spending and other components of domestic demand slump morethan expected, owing to domestic economic fluctuations in connection with global economic trends,
its performance could be affected by a decrease in production volume, decline in unit prices, andother factors.
Additionally, the DNP Group could be directly or indirectly affected by market trends in various
industries in Japan or overseas. In particular, electronics-related industries are susceptible tochanges in production and demand in emerging markets and global declines in unit prices, and
DNP’s performance could be affected by major changes in market trends.
2) Overseas business activities
The DNP Group conducts overseas business activities mainly in Europe, U.S., Southeast Asia, andelsewhere, and these activities face a variety of social, political, and economic risks. The DNPGroup’s performance could be affected if its overseas business activities are obstructed by the
emergence of various risks related to unexpected changes in laws and regulations governing theenvironment, society, and other areas, country risk, difficulty of hiring and securing personnel,
human rights and conflicts, and other factors.
3) Development of new products and services
The DNP Group develops products and services that provide new value to society, consumers, andcompanies by applying and advancing its printing and information technologies and by incorporating
the strengths of partners outside the Company. This development faces an accelerating pace oftechnological innovation and a diversification of needs. The DNP Group’s performance could be
affected by such factors as further intensification of development competition in Japan and overseas,
greater-than-expected shortening of product life cycles, and changes in market trends. Additionally,
if products and services have defects or other problems, the DNP Group’s performance could beseriously affected by accompanying losses.

64) Strategic business and capital alliances and corporate acquisitions
The DNP Group engages in strategic business and capital alliances and corporate acquisitions, andits performance could be affected if it is unable to achieve initially expected results and synergies asa result of deterioration in the business environment affecting the companies and businesses
involved in these alliances and acquisitions.
5) Fluctuations related to the procurement of raw materials and other items
In procuring raw materials and other items, the DNP Group works to ensure stable volume andmaintain optimal procurement prices, including by purchasing printing paper and film materials frommultiple suppliers in Japan and overseas. However, there is risk of imbalances between supply anddemand due to sharp fluctuations in petroleum prices, sudden surge in demand in emerging markets,
depletion of natural resources, impact of climate change, and human rights issues in the supply
chain. The DNP Group will respond during such times by negotiating with client companies andbusiness partners, but its performance could be affected if the procurement of raw materials or otheritems becomes extremely difficult, if purchasing prices rise sharply, or if other such events occur.
6) Currency fluctuations
The DNP Group expects the impact of foreign exchange rates to steadily increase while itaggressively pursues business expansion in various regions around the world. We use such means
as foreign exchange forward contracts to hedge the risks of currency fluctuations. Nevertheless, the
DNP Group’s performance could be affected by drastic swings in foreign exchange.
7) Response to environmental and social changes
The DNP Group’s business activities benefit from the natural environment in a variety of ways,
including the procurement of raw materials from forest resources to make printing paper and otherproducts and the use of water and energy in manufacturing processes. The DNP Group also
undertakes business activities that are closely connected with society, including securing human andmaterial resources and building a supply chain. The DNP Group clearly recognizes these conditions
and pursues a variety of initiatives to sustain growth together with the environment and society.
However, the DNP Group expects various changes such as a strengthening of domestic andoverseas legal regulations and international standards related to climate change, human rights andlabor, anticorruption, and other areas, and an increase in the importance of environmental and social
matters in the assessment of enterprise value. The DNP Group’s performance could be affected byenvironmental and social changes, including a need for greater efforts to respond to these trends.
8) Information security and protection of personal data and other information
Global computer networks and information systems have become essential tools for conducting
business, and there are now greater risks of software and hardware defects, daily changing
cyberattacks, computer virus infections, and personal data leaks. The DNP Group regards
information security and the protection of important data, including personal data, as a top
management priority, and is making every effort to maintain and manage systems and data bystrengthening its organization and training employees. However, its business activities could be
affected in the event of a malicious cyberattack, accident involving important data, or other such
events.
9) Response to changes in legal regulations
The DNP Group conducts its business based on strict compliance with laws and social ethics. We
are subject to a variety of legal regulations in Japan and overseas, including product liability laws,

7

antimonopoly laws, personal data protection laws, patent laws, tax regulations, and import andexport rules. We believe these regulations could be strengthened in the future. On the other hand,market and industry trends may change substantially as a result of deregulation. If that should occur,
it is possible that the DNP Group’s business performance could be affected by greater limitations on
its business activities, the burden of responding to regulatory changes, or increased costs.
10) Disasters
The DNP Group takes steps to protect production equipment and other major facilities from fires andearthquakes, seeks to disperse production facilities, and undertakes business continuity planning(BCP) to minimize any production shutdowns and product supply disruptions caused by disasters.
We also use various types of insurance to transfer risk. Nevertheless, the DNP Group’s performance
could be substantially affected in the event of major earthquakes, natural disasters such asrainstorms or flooding caused by climate change, disease outbreaks, or other unexpected events
that cause production shutdowns or significantly damage or impair social infrastructure.
11) Lawsuits and fines
The DNP Group seeks to establish and rigorously uphold corporate ethics throughout the group, andworks to earn the trust of society by each and every employee complying with laws and regulations
in all corporate activities, maintaining higher ethical standards than required by society, andcontributing to maintaining and advancing orderly and freely competitive markets with a consistently
fair attitude. Nevertheless, the DNP Group’s performance could be affected in the event of being
subject to lawsuits and resulting fines in Japan or overseas.
2. Information on the DNP GroupThe DNP Group includes the Company, 133 subsidiaries, and 25 affiliated companies. Its two main
businesses are Printing and Beverages. The former encompasses Information Communication,
Lifestyle and Industrial Supplies, and Electronics.
The businesses and segments of the Group are broadly outlined below. The four businesssegments cited below are the same as the reporting segment categories.
[PRINTING]
Information Communication
Production/sale of textbooks, books, weekly/monthly/quarterly magazines, promotional materials,
securities certificates, business forms, cards, settlement-related services, photographic materials,
and business equipment and systems; and planning/design/construction/management of stores andadvertising media
Major companies
Production

OGUCHI BOOK BINDING & PRINTING CO., LTD.
DNP Imagingcomm Co., Ltd., DNP SP Tech Co., Ltd.
DNP Graphica Co., Ltd., DNP Communication Design Co., Ltd.
DNP Book Factory Co., Ltd., DNP Data Techno Co., Ltd.
DNP Multi Print Co., Ltd., DNP Media Art Co., Ltd.
DNP Media Support Co., Ltd.

Production and sales

DNP Imagingcomm Asia Sdn. Bhd., DNP Imagingcomm Europe B.V.
DNP Imagingcomm America Corporation, Foto Fantasy, Inc.

8

Tien Wah Press (Pte.) Ltd.
*MK Smart Joint Stock Company
Sales and services

Maruzen CHI Holdings Co., Ltd., INTELLIGENT WAVE INC.
2Dfacto, Inc., CYBER KNOWLEDGE ACADEMY Co., Ltd.
DNP ID System Co., Ltd., DNP Art Communications Co., Ltd.
DNP Social Links Co., Ltd., DNP Digital Solutions Co., Ltd.
DNP Photo Imaging Japan Co., Ltd., DNP HyperTech Co., Ltd.
Metro Systems Co., Ltd., mobilebook.jp, Inc.
MARUZEN-YUSHODO Co., Ltd., MARUZEN PUBLISHING CO., LTD.
MaruzenJunkudo Bookstores Co., Ltd.
Toshokan Ryutsu Center Co., Ltd., honto Book Services Co., Ltd.
DNP Photo Imaging Europe SAS* Nihon Unisys, Ltd., BOOKOFF CORPORATION LIMITEDBUNKYODO GROUP HOLDINGS CO., LTD.
All About, Inc., Kyoiku Shuppan Co., Ltd.
The shares of Maruzen CHI Holdings Co., Ltd., Nihon Unisys, Ltd. and
BOOKOFF CORPORATION LIMITED are traded on the Tokyo Stock
Exchange, and the shares of INTELLIGENT WAVE INC., BUNKYODOGROUP HOLDINGS CO., LTD. and All About, Inc. are traded on theTokyo Securities Exchange’s JASDAQ market.

Lifestyle and Industrial Supplies
Production/sale of containers and packaging products, packaging equipment and systems, interior
and exterior decorative printed materials, and industrial supplies
Major companies
Production

DNP Technopack Co., Ltd., Sagami Yoki Co., Ltd.
DNP Ellio Co., Ltd., DNP Advanced Materials Co., Ltd.
DNP Living Space Co., Ltd., DNP Hoso Co., Ltd.

Production and sales

DNP Tamura Plastic Co., Ltd., Aseptic Systems Co., Ltd.
DNP Fine Chemicals Utsunomiya Co., Ltd.
PT DNP Indonesia, DNP Vietnam Co., Ltd.

Sales and services

DNP Lifestyle Materials Marketing Co., Ltd.
DNP Field Eyes Co., Ltd., LIFESCAPE MARKETING CORPORATIONElectronics
Production/sale of precision electronic components and other products
Major companies
Production

DNP LSI Design Co., Ltd., DNP Fine Optronics Co., Ltd.
DNP Precision Devices Himeji Co., Ltd.

Production and sales

DAP Technology Co., Ltd., DT Fine Electronics Co., Ltd.
DNP Denmark A/S, DNP Photomask Europe S.p.A.
* Photronics DNP Mask Corporation
Photronics DNP Mask Corporation Xiamen

9

SalesDNP Taiwan Co., Ltd.

Companies with multiple types of businesses
Production and sales

DNP Fine Chemicals Co., Ltd., DNP Engineering Co., Ltd.
DNP Shikoku Co., Ltd.
* DIC Graphics Corporation

Sales and services

DNP Logistics Co., Ltd., DNP Trading Co., Ltd.
DNP Accounting Services Co., Ltd.
DNP Information Systems Co., Ltd.
DNP Human Services Co., Ltd., DNP Facility Services Co., Ltd.
DNP Hokkaido Co., Ltd., DNP Tohoku Co., Ltd.
DNP Chubu Co., Ltd., DNP Nishi Nippon Co., Ltd.
DNP Asia Pacific Pte. Ltd., DNP Corporation USA
DNP America, LLC, DNP Holding USA Corporation[BEVERAGES]
Beverages
Production/sale of carbonated beverages, mineral waters, and other products, centered on Hokkaido
Coca-Cola Bottling Co., Ltd.
The shares of Hokkaido Coca-Cola Bottling Co., Ltd. are traded on the Tokyo Stock Exchange andSapporo Securities Exchange.
* Equity-method affiliated companies

10Organizational chart
The businesses noted above are shown in the organizational chart below.

Customers
Information Communication

Lifestyle and Industrial Supplies(Production and sales)
DNP Imagingcomm Asia Sdn. Bhd.
DNP Imagingcomm Europe B.V.
DNP Imagingcomm America
Corporation
Foto Fantasy, Inc.
Tien Wah Press (Pte.) Ltd.
MK Smart Joint Stock Company*(Production and sales)
PT DNP Indonesia
DNP Vietnam Co., Ltd.

Electronics

Beverages(Sales)DNP Taiwan Co., Ltd.
(Production and sales)
DNP Denmark A/S
DNP Photomask Europe S.p.A.
Photronics DNP Mask Corporation*
Photronics DNP Mask Corporation
Xiamen*(Sales and service provision)
DNP Photo Imaging Europe SAS(Production and sales)(Production)
OGUCHI BOOK BINDING &PRINTING CO., LTD.
DNP Imagingcomm Co., Ltd.
DNP SP Tech Co., Ltd.
DNP Graphica Co., Ltd.
DNP Communication Design Co.,Ltd.
DNP Book Factory Co., Ltd.
DNP Data Techno Co., Ltd.
DNP Multi Print Co., Ltd.
DNP Media Art Co., Ltd.
DNP Media Support Co., Ltd.

(Sales and service provision, etc.)
Maruzen CHI Holdings Co., Ltd.
INTELLIGENT WAVE INC.
2Dfacto, Inc.
CYBER KNOWLEDGE ACADEMY Co.,Ltd.
DNP ID System Co., Ltd.
DNP Art Communications Co., Ltd.
DNP Social Links Co., Ltd.
DNP Digital Solutions Co., Ltd.
DNP Photo Imaging Japan Co., Ltd.
DNP HyperTech Co., Ltd.
Metro Systems Co., Ltd.
mobilebook.jp, Inc.
MARUZEN-YUSHODO Co., Ltd.
MARUZEN PUBLISHING CO., LTD.
MaruzenJunkudo Bookstores Co., Ltd.
Toshokan Ryutsu Center Co., Ltd.
honto Book Services Co., Ltd.
Nihon Unisys, Ltd. *BOOKOFF CORPORATION LIMITED*BUNKYODO GROUP HOLDINGS CO.,LTD. *All About, Inc.*
Kyoiku Shuppan Co., Ltd.*(Production and sales)
DNP Fine Chemicals Co., Ltd.
(Sales and service provision, etc.)
DNP Logistics Co., Ltd.
DNP Human Services Co., Ltd.
DNP Hokkaido Co., Ltd.
DNP Asia Pacific Pte. Ltd.

DNP Shikoku Co., Ltd.

(Production)
DNP Technopack Co., Ltd.
Sagami Yoki Co., Ltd.
DNP Ellio Co., Ltd.
DNP Advanced Materials Co., Ltd.
DNP Living Space Co., Ltd.
DNP Hoso Co., Ltd.

(Production and sales)
DNP Tamura Plastic Co., Ltd.
Aseptic Systems Co., Ltd.
DNP Fine Chemicals Utsunomiya
Co., Ltd.

(Production and sales)
DAP Technology Co., Ltd.
DT Fine Electronics Co., Ltd.

(Sales and service provision, etc.)
DNP Lifestyle Materials Marketing
Co., Ltd.
DNP Field Eyes Co., Ltd.
LIFESCAPE MARKETINGCORPORATIONDNP Engineering Co., Ltd.

DIC Graphics Corporation*

DNP Trading Co., Ltd.
DNP Facility Services Co., Ltd.
DNP Tohoku Co., Ltd.
DNP Corporation USA

DNP Accounting Services Co., Ltd.

DNP Information Systems Co., Ltd.

DNP Chubu Co., Ltd.
DNP America, LLC

DNP Nishi Nippon Co., Ltd.
DNP Holding USA Corp.

Printing businessNotes: *(Production)
DNP LSI Design Co., Ltd.
DNP Fine Optronics Co., Ltd.
DNP Precision Devices Himeji Co.,Ltd.

(Production and sales)
Hokkaido Coca-Cola Bottling Co., Ltd.

Dai Nippon Printing Co., Ltd.

: Equity-method affiliated companies (Otherwise, subsidiaries): Flow of products, materials and services

11

Beverages
business3. Management policies(1) Core policies
The DNP Group’s basic management policy, the DNP Group Vision 2015, states its corporate
philosophy as: “The DNP Group connects individuals and society, and provides new value.” Basedon this philosophy, the DNP Group is aggressively pursuing its business activities and working tosteadily expand its business over the medium to long term.
The DNP Group believes it is important to enhance corporate governance in order to sustain
growth for the DNP Group. It seeks to establish and operate systems to facilitate precise andcomprehensive managerial decision-making, prompt and appropriate execution of business basedon these decisions, and supervision and auditing of this business execution. It also undertakes
rigorous training and education to improve the compliance awareness of each and every employee.
Additionally, the DNP Group is aware of its social responsibility as a company and strives todeliver new value to its various stakeholders. To achieve this goal, the DNP Group works to fulfill
what it considers to be its three responsibilities as a company: “Value Creation,” “Integrity in
Conduct,” and “Transparency (Accountability).” To fulfill these responsibilities, the DNP Groupadheres to its DNP Group Code of Conduct in pursuing its activities and ensures proper businessconduct by preparing internal control systems. It strives to conduct business in good faith to earn the
deep trust of its various stakeholders, including shareholders, client companies, consumers, andemployees.
(2) Medium- and long-term management strategy and key issues
1) Business vision and initiatives in growth areas
The DNP Group focuses on creating new value to solve social issues through P&I innovations thatflexibly combine its various strengths in printing and information technologies and expertise, sales
and planning, production and production management, and intellectual property and branding,
based on the four growth areas of Knowledge and Communication, Food and Healthcare, Lifestyleand Mobility, and Environment and Energy.
In Knowledge and Communication, the DNP Group endeavors to support people’s lives though
active communication and to foster a rich culture. It also works to create mechanisms for safe andsecure communication by leveraging its advanced information security technologies.
In Food and Healthcare, the DNP Group develops businesses to support high-quality living andhelp maintain lifelong health. In addition to safe and hygienic packaging for foods, beverages, andpharmaceuticals in support of human health and diet, the DNP Group is providing high-performance
products and services in such areas as life sciences, including regenerative medicine, andagriculture.
In Lifestyle and Mobility, the DNP Group seeks to provide products and services to achieve
comfortable, safe, and secure living spaces in a variety of residential and non-residential settings,
including homes, commercial facilities, offices, medical facilities, automobiles, and railway cars.
In Environment and Energy, the DNP Group works to achieve a sustainable society that combines
economic growth and environmental preservation. It seeks to develop environmentally conscious
products and services that contribute to conserving resources and energy and to protecting
biodiversity.
The DNP Group seeks to create products and services that make “tomorrow’s basic” an essential
part of the lives of consumers and the business processes of companies by creating new value tosolve social issues, mainly in these growth areas.

122) Initiatives in the different businesses and segments[PRINTING]
Information Communication
The Information Communication segment facilitates a variety of safe and secure communication
between consumers and companies by enabling the optimal expression of information andexpanding into a diverse range of media based on advanced image processing technologies andinformation security technologies.
For example, we are helping to revitalize the publishing market by deepening cooperation withpublishers and pursuing business activities that include the planning, production, distribution, andsale of various publications and the copyright handling and overseas expansion of content.
We also recognize that information safety is essential for effectively using IoT and are advocating
the concept of Internet of Secure Things® (IoST), which adds security to IoT. We are pursuing
platform development that leverages competencies acquired in smart cart development and otherareas.
We are using advanced information security infrastructure, including the DNP Kashiwa Data
Center and 13 domestic BPO centers, to deliver a variety of high-value-added services, including
branded prepaid and debit card settlement services and comprehensive corporate BPO services.
Lifestyle and Industrial Supplies
The Lifestyle and Industrial Supplies segment provides products and services in Japan andoverseas that respond precisely to the diverse needs of companies and consumers, while also
working to protect the global environment and support universal design.
For example, we are bolstering sales for high-performance products, including the innovative
barrier (IB) film series of transparent barrier films that prevent moisture and oxygen permeation andthe biomass plastic packaging ‘Biomatech’ series that uses raw materials derived from plants.
Overseas, we aim to expand market share in Southeast Asia. We are preparing a production
structure in Indonesia and Vietnam and intend to focus on using these operating bases to expand
sales into neighboring countries.
Additionally, we will pursue various initiatives in a range of living spaces, including automobiles
and railway cars in addition to homes and commercial facilities. These initiatives include
high-valued-added products that use our proprietary electron beam (EB) coating technology; thedesign of more pleasant living spaces using Kansei (sensitivity) engineering; the assessment ofliving environments; and the development of simpler construction methods. In Europe, the U.S., andemerging markets, we seek to leverage a global sales network to expand market share forexquisitely designed metal paneling and other products.
Incidentally, we are implementing a repair program to correct defects in some wallpaper productsin the Living Space business. We improved our system for assessing the scope of repairs andquickly performing repairs in July 2016 and continue to address this issue.
Electronics
In the Electronics segment, we endeavor to advance and combine our current technologies whiledeveloping new core technologies, and to provide products, services, and systems that anticipate
the changing needs of companies and consumers. We will assess changes in the market in Japanand overseas, and continue to implement structural reforms through such means as optimizing
production facilities and reviewing our production and development structures.
For example, in the OLED display market, where demand is expanding rapidly, we seek tomaintain and increase market share by increasing production capacity for metal masks, which areused to make OLED displays, and by preparing a structure to develop products to support higher

13definition displays and ensure stable supply. We will also work to develop various optical films for
OLED displays, including retardation films.
For semiconductor photomasks, we aim to support the miniaturization and cost-saving needs ofsemiconductor makers by bolstering the production structure for next-generation products byapplying next-generation microfabrication technologies, including nanoimprinting and a multi e-beammask writer that significantly shortens writing time during production. We will also work to expand
our business globally, and to meet rising demand in China, we established a photomask
manufacturing and sales joint venture with US-based photomask maker Photronics, Inc. in 2018.
[BEVERAGES]
Beverages
Amid expectations for stiffer market share competition in the soft drink industry, we are executing thethree strategies of increasing market share, overwhelming the competition, and cutting groupwide
costs based on the following vision: “Leveraging the global brand strength of our Coca-Colabusiness, we intend to beat our competition based on our local capabilities as a true Hokkaido
company, contribute to local Hokkaido communities by consistently delivering new value andservices, and establish a business foundation capable of sustained growth.”
3) Strengthened organization
The DNP Group cites taiwa (dialogue) and cooperation as guiding principles, and is working todeliver new value by enhancing groupwide efforts to strengthen cooperation further among business
units and by deepening dialogue with companies and consumers. We will work to expand ourbusiness by strengthening cooperation with both domestic and overseas partners possessing
various strengths.
We are also pursuing redevelopment in our home base in the Ichigaya district of Tokyo whileworking to establish domestic and overseas bases to advance our business vision. The planning,
sales, and marketing offices of various business units were once scattered across the Tokyo
Metropolitan Area, but are now concentrated together with the group’s headquarters functions in the
Ichigaya district. Making effective use of this concentration, we intend to push forward with thedevelopment of new business.
4) Development of systems for business continuity
The DNP Group reaffirmed the importance of business continuity planning (BCP) based on its
experience in the Tohoku-Pacific Ocean Earthquake, and works daily to maintain proper awarenessof disaster risk and take appropriate safeguards based on two objectives: (1) place top priority on
human safety measures at the time of disaster; (2) increase the company’s preparedness fordisaster and ability to recover from disaster. We established basic policies and promotion systems toprepare for disasters and other unforeseen circumstances in our “DNP Group Basic Code forDisaster Response,” and implement disaster-prevention measures to ensure the safety of ouremployees and related parties and reassure our various stakeholders.
5) Contributing to the realization of a sustainable societyWith the aim of solving various social issues such as climate change and growing inequality gaps,
we expect companies to step up initiatives to achieve the Sustainable Development Goals (SDGs)
adopted by the United Nations in 2015. The DNP Group aspires to create a sustainable society that
fulfills these SDGs in order to achieve stable growth over the longer term.
To this end, we will focus on providing products and services that contribute to solving social
issues and creating a value chain that reduces the negative impact on society and increases the14positive impact. In particular, to respond to climate change as an urgent issue, we are working to
reduce the environmental burden of our business activities and to provide products and services that
help to address climate change.
4. Basic approach in the choosing of accounting standards
The DNP Group uses Japanese GAAP in preparing consolidated financial statements. It plans to
consider IFRS going forward and respond appropriately based on domestic and overseas
circumstances.

155. Consolidated financial statements and key notes(1) Consolidated balance sheets(Million yen)
Year ended March 31, 2017
(As of March 31, 2017)

Year ended March 31, 2018
(As of March 31, 2018)

210,454341,805
84,28629,13023,89615,31433,879(1,627)
737,140

242,781354,241
82,697
31,672
23,17819,71347,159(1,690)799,753

567,661(361,465)
206,196
760,117(679,427)
80,689155,114
18,326
137,843(101,003)
36,839497,166

566,445(367,135)
199,310736,596(655,894)
80,702
151,5217,160
140,364(104,660)
35,703474,397

6,474
25,942
2,019
34,436

4,241
26,686
1,925
32,853

380,323
57,0897,286
32,518(4,057)473,160
1,004,763
1,741,904

401,41467,8386,934
30,938(3,632)
503,493
1,010,745
1,810,498

ASSETS
Current assets
Cash and time deposits
Notes and trade receivables
Merchandise and finished products
Work in progress
Raw materials and supplies
Deferred income taxes
Other
Allowance for doubtful accounts
Total current assets
Fixed assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Machinery and equipment
Accumulated depreciation
Machinery and equipment, net
LandConstruction in progress
Other
Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible fixed assets
Goodwill
Software
Other
Total intangible fixed assets
Investments and other assets
Investment securities
Net defined benefit asset
Deferred income taxes
Other
Allowance for doubtful accounts
Total investments and other assets
Total fixed assets
TOTAL ASSETS

16

(Million yen)
Year ended March 31, 2017
(As of March 31, 2017)

Year ended March 31, 2018
(As of March 31, 2018)247,562
43,035
7,560
7,152
17,056
18,67974,151
415,198

248,993
44,794
4,292
10,042
17,12829,58083,716
438,548

109,640
8,658–
35,14966,14725,823
245,418
660,617

108,600
10,127
7,543
35,21680,717
27,193
269,399
707,948

114,464
144,280
695,720(69,636)884,829

114,464
144,264
681,976(62,908)
877,797

149,574

168,155(2)(2,219)
1,683

(3)
1,410
6,241

149,035

175,80347,422
1,081,286
1,741,904

48,9501,102,550
1,810,498

LIABILITIESCurrent liabilities
Notes and trade payables
Short-term bank loans
Current portion of long-term debt
Income taxes payable
Reserve for bonuses
Repair reserve
Other
Total current liabilities
Long-term liabilities
Bonds
Long-term debt
Repair reserve
Net defined benefit liability
Deferred tax liabilities
Other
Total long-term liabilities
TOTAL LIABILITIESNET ASSETSStockholders’ equity
Common stock
Capital surplus
Retained earnings
Treasury stock
Total stockholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Net deferred losses on hedges
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive
incomeNon-controlling interests
TOTAL NET ASSETSTOTAL LIABILITIES AND NET ASSETS

17

(2) Consolidated statements of income and comprehensive income
Consolidated statements of income(Million yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest and dividends income
Equity in earnings of affiliates
Other
Total non-operating income
Non-operating expenses
Interest expense
Foreign exchange transaction loss
Contributions
Other
Total non-operating expenses
Ordinary income
Extraordinary gains
Gain on sale of fixed assets
Gain on sale of investment securities
Other
Total extraordinary gains
Extraordinary losses
Loss on sale or disposal of fixed assets
Impairment loss
Repair costs and repair reserve provisions
Other
Total extraordinary losses
Income before income taxes andnon-controlling interests
Current income taxes
Deferred income taxes
Total income taxes
Net income
Net income attributable to non-controllingshareholders
Net income attributable to parent company
shareholders

18

Year ended
March 31, 2017
1,410,172
1,143,164
267,008
235,598
31,410Year ended
March 31, 2018
1,412,251
1,131,662
280,589234,217
46,372

5,104
3,014
5,559
13,678

5,840
3,007
4,977
13,825

2,201
584
1,239
4,323
8,349
36,740

2,212
1,416
1,214
4,382
9,226
50,971974
44,915
3,741
49,631

13,022
44,964
1,326
59,312

5,880
895
37,7382,026
46,541

3,669
5,952
53,5001,765
64,887

39,83145,396

13,541(974)
12,56727,263

15,738187
15,92529,470

2,037

1,969

25,22627,501

Consolidated statements of comprehensive income(Million yen)

Net income
Other comprehensive income
Valuation difference on available-for-salesecurities
Net deferred gains (losses) on hedges
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Share of other comprehensive income ofassociates accounted for using equity method
Total other comprehensive income
Comprehensive income
Attributable to：Parent company shareholders
Non-controlling shareholders

19Year ended
March 31, 201727,263

Year ended
March 31, 2018
29,47026,072

18,290(1)(3,873)
6,891

3
1,912
4,115

(3,018)2,612

26,07053,33426,93356,404

51,596
1,738

54,2692,135

(3) Consolidated statements of changes in net assets
The year ended March 31, 2017 (April 1, 2016 – March 31, 2017)(Million yen)
Stockholders’ equity

Balance at the beginning ofcurrent period
Cumulative impact ofaccounting changes
Balance at the beginning ofcurrent period reflecting
accounting changes

Commonstock

CapitalsurplusRetainedearnings

Treasurystock

114,464

144,283

717,029(81,024)

26
114,464

144,283

717,056

Total
stockholders’equity894,752
26(81,024)

894,779

Changes of items during theperiodCash dividends paid
Net income attributable toparent company
shareholders
Change of scope of
consolidation
Change in ownershipinterest of parent arisingfrom transactions with
non-controllingshareholders(19,919)(19,919)

25,22625,226

(78)

(78)

(2)

Purchases of treasury
stock
Cancellation of treasury
stock

(2)

(26,564)

Other(15,174)(15,174)

26,564

–

(1)

(1)

Net changes in items otherthan stockholders’ equity
Total changes of items
during the period
Balance at the end of current
period––(2)(21,336)

11,388(9,950)114,464

144,280

695,720(69,636)884,829

Accumulated other comprehensive income

Balance at the beginning ofcurrent period

Valuationdifference on
available-forsale securities

Net deferredgains (losses)on hedges

Foreigncurrencytranslation
adjustments

Remeasurements ofdefined benefit
plans

Total
accumulated
othercomprehensive
incomeStockacquisitionrights

Noncontrollinginterests

Total net
assets123,478

(6)

3,050

(3,849)122,672

16

45,8001,063,24102745,801

1,063,269

Cumulative impact ofaccounting changes
Balance at the beginning ofcurrent period reflecting
accounting changes
Changes of items during theperiod123,478

(6)

3,050

(3,849)122,672

16(19,919)

Cash dividends paid
Net income attributable toparent company
shareholders

25,226

Change of scope of
consolidation(78)

Change in ownershipinterest of parent arisingfrom transactions with
non-controllingshareholders(2)

Purchases of treasury
stock(15,174)

Cancellation of treasury
stock

–
(1)

Other
Net changes in items otherthan stockholders’ equity
Total changes of items
during the period
Balance at the end of current
period26,096

4(5,270)5,532

26,362

(16)

1,621

27,96726,096

4(5,270)5,532

26,362

(16)

1,621

18,017

149,574(2)(2,219)1,683

149,035–

47,422

1,081,286

20

The year ended March 31, 2018 (April 1, 2017 – March 31, 2018)(Million yen)
Stockholders’ equity

Balance at the beginning ofcurrent period
Changes of items during theperiodCapitalsurplusRetainedearnings

Treasurystock

114,464

144,280

695,720(69,636)

Cash dividends paid
Net income attributable toparent company
shareholders
Change of scope of
consolidation
Change in ownershipinterest of parent arisingfrom transactions with
non-controllingshareholders(19,510)

27,501

27,501

30

30

(15)

Disposal of treasury stock

884,829(19,510)(15)Purchases of treasury
stock
Cancellation of treasurystock
Net changes in items otherthan stockholders’ equity
Total changes of items
during the period
Balance at the end of current
periodTotalstockholders’equityCommonstock(15,037)(15,037)

(0)

1

0

(21,763)

21,763

–
–

–

(15)

(13,743)

6,727(7,031)

114,464

144,264

681,976(62,908)

877,797

Accumulated other comprehensive income

Balance at the beginning ofcurrent period
Changes of items during theperiodValuationdifference on
available-forsale securities

Net deferredgains (losses)on hedges

Foreigncurrencytranslation
adjustments

Remeasurements ofdefined benefit
plans

Total
accumulated
othercomprehensive
incomeNoncontrollinginterests

Total net
assets149,574(2)(2,219)1,683

149,035

47,422

1,081,286(19,510)

Cash dividends paid
Net income attributable toparent company
shareholders

27,501

Change of scope of
consolidation

30

Change in ownershipinterest of parent arisingfrom transactions with
non-controllingshareholders(15)

Purchases of treasury
stock(15,037)0

Disposal of treasury stock
Cancellation of treasurystock
Net changes in items otherthan stockholders’ equity
Total changes of items
during the period
Balance at the end of current
period–18,580

(1)

3,630

4,558

26,767

1,528

28,296

18,580

(1)

3,630

4,558

26,767

1,528

21,264

168,155

(3)

1,410

6,241

175,803

48,9501,102,550

21

(4) Consolidated statements of cash flows(Million yen)

Year ended
March 31, 2017
Cash flows from operating activities
Income before income taxes and non-controllinginterests
Depreciation
Impairment loss
Decrease of doubtful receivables, net
Increase of net defined benefit asset
Increase of net defined benefit liability
Equity in gains of affiliates
Amortization of consolidation goodwill, net
Interest and dividend income
Interest expense
Net gain on sales of investment securities
Net loss on devaluation of investment securities
Net (gains) losses on sale or disposal of fixed assets
Repair costs
Repair reserve provisions(Increase) Decrease in trade receivables(Increase) Decrease in inventories
Increase (Decrease) in trade payables
Other
Sub-total
Payments for repair costs
Payments for extra retirement payments
Payment of income taxes
Net cash provided by operating activities
Cash flows from investing activities
Net (increase) decrease in time deposits
Payments for purchases of property, plant andequipment
Proceeds from sales of property, plant and equipment
Payments for purchases of investment securities
Proceeds from sales of investment securities
Payments for purchase of intangible fixed assets
Payments for sales of stock in subsidiaries resulting inchange in scope of consolidation
Proceeds from sales of stock in subsidiaries resulting inchange in scope of consolidation
Interest and dividends received
Other
Net cash provided by investing activities

22

Year ended
March 31, 201839,83145,396

61,461895(1,560)(1,537)1,241(3,014)
2,316(5,104)2,201(46,205)
161
4,970
5,793
31,944
4,443
3,257
(99)
6,909
107,908(23,148)(104)(12,710)71,944

61,070
5,952(302)(5,780)2,004(3,007)
2,306(5,840)2,212(45,686)758(9,302)–53,500(17,606)
(875)
5,899
6,049
96,746(35,056)(48)(13,184)
48,457240(1,547)(50,031)(32,500)

4,990
(691)
60,878(11,212)

19,644(1,234)54,616(10,483)

–

(855)

1,288

–

7,952
596
14,011

8,256(12,822)
23,074

(Million yen)

Year ended
March 31, 2017
Cash flows from financing activities
Net increase (decrease) in short-term bank loans
Proceeds from long-term debt
Repayments of long-term debt
Proceeds from issuance of bonds
Payments for redemption of bonds
Payments for purchases of treasury stock
Payments for purchases of treasury stock of subsidiaries
Interest paid
Dividends paid
Dividends paid to non-controlling interests
Payments for purchase of stock in subsidiaries not
resulting in change in scope of consolidation
Other
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
Increase in cash and cash equivalents resulting fromchange of scope of consolidation
Increase in cash and cash equivalents resulting from themerger of non-consolidated subsidiaries
Cash and cash equivalents at end of year

23

Year ended
March 31, 2018

(6,961)
6,680(6,983)
3,933(555)(15,174)(7)(2,208)(19,918)
(338)

2,257
2,690
(4,076)1,224(240)(15,037)(130)(2,213)(19,524)
(393)

–

(226)

(3,688)(45,222)(7,102)(42,771)(1,701)

1,428

39,032
175,51330,188214,564

18

–

–

184

214,564

244,936(5) Notes regarding consolidated financial statements[Notes on premise of a going concern]
None[Basis of presenting consolidated financial statements]
1) Scope of consolidation and application of the equity method of accounting
Number of consolidated subsidiaries: 105
Major companies:
Maruzen CHI Holdings Co., Ltd.
Hokkaido Coca-Cola Bottling Co., Ltd., INTELLIGENT WAVE INC.
2Dfacto, Inc., DNP Technopack Co., Ltd.
DNP Fine Chemicals Co., Ltd., DNP Logistics Co., Ltd.
Number of equity-method affiliated companies: 18
Major companies:
Nihon Unisys, Ltd., BOOKOFF CORPORATION LIMITEDBUNKYODO GROUP HOLDINGS CO., LTD., All About, Inc.
Kyoiku Shuppan Co., Ltd., DIC Graphics Corporation
Photronics DNP Mask Corporation
MK Smart Joint Stock Company
Photronics DNP Mask Corporation Xiamen
2) Changes in scope of consolidation and application of the equity method of accounting(Scope of consolidation)
Newly included:
1 Library Academy Co., Ltd.
Excluded:
2 DNP Color Techno Kameyama Co., Ltd. and one othercompany(Application of equity method)
Newly included:3
Excluded:1

Photronics DNP Mask Corporation Xiamen and two othercompanies
SD Future Technology Co., Ltd.

3) Matters concerning the fiscal years of consolidated subsidiaries
Of the consolidated subsidiaries, Hokkaido Coca-Cola Bottling Co., Ltd. and 24 others have fiscal
years that end on December 31, while Maruzen CHI Holdings Co., Ltd. and 25 others have fiscal
years that end on January 31. Their financial statements as of the same date are used in the
preparation of these consolidated financial statements.
Additionally, INTELLIGENT WAVE INC.’s fiscal year ends on June 30, mobilebook.jp, Inc. andone other company have fiscal years that end on September 30, and DNP Tamura Plastic Co., Ltd.’s
fiscal year ends on October 31. Consequently, financial statements based on provisional accountsettlements are used.
Any material transactions during the time between the foregoing settlement dates or provisional
settlement dates and the consolidated settlement date are adjusted for on a consolidated basis.

244) Summary of significant accounting policies(a) Criteria and methods for valuing significant assets• Marketable securities
Other securitiesThose with market
prices available

Those without market
prices available

Fair market value based on market prices as of the balance
sheet date
(The related valuation differences are directly included in net
assets and cost of sales is computed mainly by themoving-average method.)
Mainly cost based on the moving-average method• Derivatives

Mainly fair market value• Inventories

For figures shown on the balance sheet, the book value
write-down method based on the decrease in profitability isused.
Mainly cost based on the specific identification method

Merchandise
Finished products, work inprogress

Mainly cost based on the retail inventory cost method

Raw materials

Mainly cost based on the moving-average method

Supplies

Mainly cost based on the most recent purchase method(b) Depreciation and amortization of significant assets• Property, plant and equipment The Company and its domestic consolidated subsidiaries use
the declining balance method.
(except for lease assets)
However, depreciation of buildings (excluding building
fixtures) acquired after April 1, 1998 and of building fixturesand structures acquired after April 1, 2016 are computed by
the straight-line method.
Assets with an acquisition cost of at least ¥100,000 and lessthan ¥200,000 are depreciated mainly over three years by
the straight-line method.
Foreign consolidated subsidiaries mainly use the straight-line
method.
• Intangible fixed assets(except for lease assets)

Mainly the straight-line method
Software used internally is amortized using the straight-line
method over the Company’s estimate of the useful life of theassets (five years).

• Lease assets

Lease assets with transfer of ownership
These lease assets are depreciated using the samedepreciation method used for owned fixed assets.
Lease assets with no transfer of ownership
These lease assets are depreciated over the lease periodusing the straight-line method with no residual value.

(c) Basis for recording significant allowances
To cover possible losses on doubtful accounts, including• Allowance for doubtful
trade receivables and loans, the allowance for doubtful
accounts
accounts is based on historical default rates for normal
accounts and on estimates of the amounts that may not berecoverable for specific overdue accounts.
To cover payments of employee bonuses in the following• Reserve for bonuses
fiscal year, the reserve for bonus is based on the estimatedamount that is attributable to the current fiscal year.

25• Repair reserve

The repair reserve is based on a rational estimate of theamount of repair costs that will be required in the future to
repair defects for some products.

(d) Accounting treatment of retirement benefits
・Method of attributing expected retirement benefits to periods
In calculating retirement benefit obligations, a benefit formula is used to allocate expected
retirement benefit payments in the period until the end of the current fiscal year.
・Method of amortizing actuarial gains/losses and prior service costs
Prior service costs are amortized using the straight-line method over a certain number ofyears that is equal to or less than the average future service period of eligible employees at
the time the costs are incurred (generally six years).
Actuarial gains/losses are amortized starting in the next fiscal year after they are incurred
using the declining balance method over a certain number of years that is equal to or lessthan the average future service period of eligible employees at the time the actuarial
gains/losses are incurred (generally nine years).
(e) Accounting treatment of consumption taxes
National and local consumption taxes are excluded from transaction amounts.
(f) Amortization of goodwill
Goodwill is amortized using the straight-line method for an effective period not more than 20
years. In the current fiscal year, straight-line amortization over five years is generally used.
(g) Scope of funds in the consolidated statements of cash flows
Cash and cash equivalents comprise cash on hand, immediately withdrawable funds, andshort-term investments that can be easily converted to cash, have insignificant risk of changes
in value, and have maturities within three months of the purchase date.
[Changes in accounting estimates](Repair reserve)
The Group previously recorded repair reserves to cover the expected required repair costs fordefects in some products, but because it was able to obtain new and more accurate information
about the products subject to repair, it changed its estimate in the second quarter of the fiscal year
ended March 31, 2018.
As a result, income before income taxes and non-controlling interests decreased by ¥53.5 billion
in the fiscal year ended March 31, 2018.
[Consolidated balance sheets]

Discounts on notes receivables

Year ended
March 31, 2017¥625 million

Year ended
March 31, 2018¥664 million

Year ended
March 31, 2017¥31,375 million

Year ended
March 31, 2018¥33,210 million[Consolidated statements of income]

1. Research and development expenses(Selling, general and administrative expenses)

26

2. Impairment losses
The Group recorded impairment losses for the following asset groups in the current consolidated
fiscal year.
Location
Application
Category
Kazo city (Saitama), other
Idle assets, other
Buildings and structures, land,other
In calculating impairment losses, we group assets based mainly on the business groups that serve
as profit/loss units. It also considers impairment losses for each individual item for loaned assets andidle assets.
As a result, the DNP Group lowered the carrying amounts of asset groups with diminishedprofitability to their recoverable amounts, and recorded this decrease as an impairment loss (¥5,952
million) under extraordinary losses.
The impairment loss breaks down into buildings and structures at ¥3,579 million, land at ¥1,870
million, and other at ¥502 million.
The DNP Group measures the recoverable amounts of asset groups based on their net saleprices, and calculates net sale prices based on real estate appraisal values and other factors.
[Consolidated statements of changes in net assets]
The year ended March 31, 2017 (April 1, 2016 – March 31, 2017)
1. Types and number of shares outstanding and treasury stock(Shares)

Outstanding shares

Stock type

Number ofshares at the
beginning of
the year
ended March2017

Common stock

680,480,693

Increase in
number ofshares during
the year
ended March2017

Decrease in
number ofshares during
the year
ended March2017–

17,000,000

Number ofshares at theend of theyear ended
March 2017

663,480,693

Treasury stock
Common stock
51,919,577
13,367,533
17,000,000
48,287,110
Notes:
1.
The total number of outstanding shares of common stock decreased due to the cancellation oftreasury shares by resolution of the Board of Directors.
2.
The number of treasury shares of common stock increased by 13,367,533 shares, with thefollowing breakdown.
32,154 shares・Increase from repurchase of odd-lot shares

3.

・Increase from acquisition of treasury shares by resolution of the Board of Directors
13,222,000 shares
112,066
・Increase from repurchase of shares held by untraceable shareholders
shares1,313 shares・Increase from changes in equity ownership ratios in equity-method affiliates
The number of treasury shares of common stock decreased due to the cancellation of treasury
shares by resolution of the Board of Directors.

2. Detailed information regarding dividends(1) Dividends paid
Resolution

Stock type

General meeting ofshareholders on
June 29, 2016

Common stock

Board of Directors’
meeting on
November 10, 2016

Common stock

Dividend pershare (Yen)Dividend
record date

Effective date

10,06516

March 31,2016

June 30,
2016

9,853

16

September 30,
2016

December 9,
2016

Total dividends(Million yen)27

(2) Of dividends for which the record date belongs to the current fiscal year, those thatcome into effect in the following fiscal year
Resolution

Stock type

Total
dividends

Source ofdividends(Million yen)

General meeting ofshareholders on
June 29, 2017

Commonstock

Dividend
per share(Yen)

Retainedearnings

9,851

16

Dividend
record date

Effective
date

March 31,2017

June 30,
2017

The year ended March 31, 2018 (April 1, 2017 – March 31, 2018)
1. Types and number of shares outstanding and treasury stock(Shares)

Outstanding shares

Stock type

Number ofshares at the
beginning of
the year
ended March
2018

Common stock

663,480,693

Increase in
number ofshares during
the year
ended March2018–

Decrease in
number ofshares during
the year
ended March2018

Number ofshares at theend of theyear ended
March 2018339,240,347

324,240,346

Treasury stock
Common stock
48,287,110
12,062,315
37,672,825
22,676,600
Notes:
1.
The number of outstanding shares of common stock decreased by 339,240,347 shares, with thefollowing breakdown.
・Decrease due to the cancellation of treasury shares by resolution of the Board of Directors
15,000,000 shares・Decrease due to a share consolidation
324,240,347 shares
2.
The number of treasury shares of common stock increased by 12,062,315 shares, with thefollowing breakdown.
(Before the share consolidation)
20,759 shares・Increase from repurchase of odd-lot shares

3.

・Increase from acquisition of treasury shares by resolution of the Board of Directors
12,037,000 shares(At the time of and after the share consolidation)
・Increase from repurchase of fractional shares resulting from the share consolidation
1,492 shares
3,064 shares・Increase from repurchase of odd-lot shares
The number of treasury shares of common stock decreased by 37,672,825 shares, with thefollowing breakdown.
(Before the share consolidation)
305 shares・Decrease due to sale of odd-lot shares・Decrease due to the cancellation of treasury shares by resolution of the Board of Directors
15,000,000 shares(At the time of and after the share consolidation)
・Decrease due to a share consolidation
22,672,282 shares
238 shares・Decrease due to sale of odd-lot shares

2. Detailed information regarding dividends(1) Dividends paid
Resolution
General meeting ofshareholders on
June 29, 2017
Board of Directors’
meeting on
November 9, 2017

Stock type

Total dividends(Million yen)

Dividend pershare (Yen)Dividend
record date

Effective dateCommon stock

9,851

16

March 31,2017

June 30,
2017

Common stock

9,658

16

September 30,
2017

December 8,
2017

28

(2) Of dividends for which the record date belongs to the current fiscal year, those thatcome into effect in the following fiscal year
Resolution

Stock type

Total
dividends(Million yen)

General meeting ofshareholders on
June 28, 2018

Common
stock

9,658

Source ofdividends
Retainedearnings

Dividend
per share
(Yen)

32

Dividend
record date

Effective
date

March 31,2018

June 29,2018[Segment information, etc.](Segment information)
1. Overview of the reporting segments(1) Method of determining reporting segments
The DNP Group’s reporting segments are regularly reviewed by the Board of Directors using
the segregated financial information available within each segment to determine the allocationof business resources and evaluate business results.
The Group bases its business divisions on the products and services provided and develops
its business activities based on a comprehensive domestic and overseas strategy for eachbusiness division. The four reporting segments are Information Communication, Lifestyle andIndustrial Supplies, Electronics, and Beverages.
(2) Products and services in each reporting segment
Information Communication is involved in the production and sale of publications, commercial
printed materials, business forms, and photographic materials and in educational andpublications distribution. Lifestyle and Industrial Supplies is involved in the production and saleof packaging materials, interior and exterior decorative printed materials, and industrial
supplies. Electronics is involved in the production and sale of precision electronic components
and other products. Beverages is involved in the production and sale of carbonated beverages,
mineral waters and other products.
2. Method of calculating sales, income/loss, assets, and other items by reporting
segment
The accounting method used for reporting business segments is generally the same as statedin “Basis of presenting consolidated financial statements.”
Reporting segment income figures are based on operating income. Inter-segment sales andtransfers are based on third-party transaction prices.

29

3. Information on sales, income/loss, assets, and other items by reporting segment
The year ended March 31, 2017 (April 1, 2016 – March 31, 2017)
Reporting segment
Information
Communication

Lifestyle andIndustrial
Supplies

Electronics

Outside customers
Inter-segment

797,046
4,156

387,142
1,051

169,4026

56,58138

1,410,172
5,253

Beverages

Total(Million yen)Amounts
reported on
Adjustment
consolidated
Note 1
financialNote 2statements

Net sales–(5,253)

1,410,172–
1,410,172

Total

801,203

388,194

169,408

56,6201,415,426(5,253)

Segment income

18,884

14,434

16,483

2,429

52,231(20,820)

31,410

Segment assets

875,999

439,302258,119

47,526

1,620,947

120,956

1,741,904

27,66017,027

12,083

2,367

59,1392,321

61,461

1,103

1,213

–

–

2,316

–

2,316

833

–

60

1

895

–

895

28,734

12,619

7,728

3,804

52,887

4,196

57,084

Other items
Depreciation andamortization
Amortization of
goodwill
Impairment loss
Increase in property,
plant and equipment
and in intangible fixed
assets
Notes:

1.

2.

Figures are adjusted as follows.
(1) Segment income is adjusted for costs related to basic research not assignable to a reporting
segment or costs of research shared by different segments.
(2) Segment assets are adjusted for companywide assets not allocated to reporting segments.
(3) Increases in property, plant and equipment and in intangible fixed assets are adjusted forcapital expenditures for the head office building and other items.
Segment income is adjusted to reflect operating income as reported in the consolidated financial
statements.

The year ended March 31, 2018 (April 1, 2017 – March 31, 2018)
Reporting segment
Information
Communication

Lifestyle andIndustrial
Supplies

Electronics

Outside customers
Inter-segment

774,997
3,638

392,458
1,848

188,745956,04911

1,412,251
5,508

Beverages

Total(Million yen)Amounts
reported on
Adjustment
consolidated
Note 1
financialNote 2statements

Net sales–(5,508)1,412,251–
1,412,251

Total

778,636

394,307

188,754

56,061

1,417,760(5,508)Segment income

21,757

12,127

34,1002,244

70,229(23,857)

46,372

Segment assets

904,486

453,741

242,462

48,5501,649,240

161,257

1,810,498

26,967

16,508

12,234

2,607

58,3182,751

61,070

1,093

1,213

–

–

2,306

–

2,306

1,979

–

–

21

2,000

3,951

5,952

27,286

15,724

10,5992,326

55,9383,619

59,557

Other items
Depreciation andamortization
Amortization of
goodwill
Impairment loss
Increase in property,
plant and equipment
and in intangible fixed
assets
Notes:

1.

2.

Figures are adjusted as follows.
(1) Segment income is adjusted for costs related to basic research not assignable to a reporting
segment or costs of research shared by different segments.
(2) Segment assets are adjusted for companywide assets not allocated to reporting segments.
(3) Impairment loss adjustments are related to companywide assets not allocated to reporting
segments.
(4) Increases in property, plant and equipment and in intangible fixed assets are adjusted forcapital expenditures for the head office building and other items.
Segment income is adjusted to reflect operating income as reported in the consolidated financial
statements.

30

(Related information)
The year ended March 31, 2017 (April 1, 2016 – March 31, 2017)
1. Information on products and services
Omitted because similar information is disclosed in segment information.
2. Regional information(1) Net sales(Million yen)Japan
1,207,679
Notes:

1.
2.
3.

Asia

Other regions

126,210

Total

76,283

1,410,172

Sales are classified by country or region, based on the location of customers.
Country and regional segments are based on geographic proximity.
Main countries and regions included in each segment:
Asia:
South Korea, Taiwan, China, Indonesia
Other:
United States, France, United Kingdom, Germany(2) Property, plant and equipment
Omitted because the value of property, plant and equipment located in Japan is over 90%of the value of property, plant and equipment as reported in the consolidated balance
sheets.
3. Information on major customers
Not described because sales to specific outside customers are less than 10% of sales asreported in the consolidated statements of income.
The year ended March 31, 2018 (April 1, 2017 – March 31, 2018)
1. Information on products and services
Omitted because similar information is disclosed in segment information.
2. Regional information(1) Net sales(Million yen)Japan
1,185,561
Notes:

1.
2.
3.

Asia

Other regions

150,794

Total

75,896

1,412,251

Sales are classified by country or region, based on the location of customers.
Country and regional segments are based on geographic proximity.
Main countries and regions included in each segment:
Asia:
South Korea, China, Taiwan, Indonesia
Other:
United States, France, Germany, United Kingdom(2) Property, plant and equipment
Omitted because the value of property, plant and equipment located in Japan is over 90%of the value of property, plant and equipment as reported in the consolidated balance
sheets.
3. Information on major customers
Not described because sales to specific outside customers are less than 10% of sales asreported in the consolidated statements of income.

31[Per share information]
Year ended
March 31, 2017
(April 1, 2016 –March 31, 2017)

Year ended
March 31, 2018
(April 1, 2017 –March 31, 2018)

Net assets per share¥3,361.10¥3,493.79

Net income per share¥81.57¥90.77

Diluted net income per share¥81.55¥90.71
Notes: 1. Dai Nippon Printing Co., Ltd. implemented a share consolidation in which two shares ofcommon stock were consolidated into one share effective October 1, 2017. It has estimated net
assets per share, net income per share, and diluted net income per share assuming this shareconsolidation was implemented at the start of the previous consolidated fiscal year.
2. The basis for calculating net income per share and diluted net income per share is as follows.
Year ended
March 31, 2017
(April 1, 2016 –March 31, 2017)

Year ended
March 31, 2018
(April 1, 2017 –March 31, 2018)(Million yen)

25,22627,501(Million yen)––

(Million yen)

25,22627,501

309,253

302,982(Million yen)

(6)

(17)

(Million yen)

(6)

(17)

–

–

Year ended
March 31, 2017
(As of March 31,
2017)Year ended
March 31, 2018
(As of March 31,
2018)

1,102,550
48,95048,950(1) Net income per share
Net income attributable to parent company
shareholders
Amounts not attributable to commonshareholders
Net income attributable to parent company
common shareholders
Average number of common shares outstanding
during the fiscal year

(Thousand shares)(2) Diluted net income per share
Adjustments to net income attributable to parent
company shareholders
Of which, impact of dilutive stock of consolidated
subsidiaries and affiliates
Increase in common stock(Thousand shares)

3. The basis for calculating net assets per share is as follows.

Total net assets(Million yen)Amount excluded from total net assets(Million yen)

Of which, non-controlling interests(Million yen)

1,081,286
47,42247,422

Net assets at fiscal year-end pertaining to common
stock(Million yen)

1,033,864

1,053,600

Number of common shares outstanding(Thousand shares)

Number of common treasury shares(Thousand shares)

331,740
24,143324,240
22,676

Number of common shares at fiscal year-end used
for the calculation of net assets per share(Thousand shares)

307,596

301,563[Significant subsequent events]
None

32

6. Non-consolidated financial statements and key notes(1) Non-consolidated balance sheets(Million yen)

Year ended
March 31, 2017
(As of March 31, 2017)

Year ended
March 31, 2018
(As of March 31, 2018)

119,969
46,098238,066
4,584
9,713
1,036
10,17332,015(1,171)
460,485

147,626
49,183247,016
3,610
10,467
1,396
13,58643,223(1,313)514,798

436,136(276,029)
160,107
33,267(26,509)
6,757
576,058(529,683)
46,375
1,367(1,261)
106
51,494(40,669)
10,824132,491
2,344(1,092)
1,252
11,131
369,046

431,618(279,803)
151,81433,037(26,802)6,235
570,635(522,293)
48,341
1,440(1,306)
134
51,906(41,583)
10,322
129,924
2,417(1,217)
1,199
3,481
351,454

21,687
1,861
23,54921,3791,561
22,940322,993
158,185
2,922
3,070
47,033
22,200(9,833)
546,572
939,168

340,204
151,956
3,270
2,150
51,292
18,329(9,323)557,880
932,275

ASSETS
Current assets
Cash and time deposits
Notes receivable
Trade receivable
Merchandise and finished goods
Work in progress
Raw materials and supplies
Deferred income taxes
Other
Allowance for doubtful accounts
Total current assets
Fixed assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Structures
Accumulated depreciation
Structures, net
Machinery
Accumulated depreciation
Machinery, net
VehiclesAccumulated depreciation
Vehicles, net
Equipment
Accumulated depreciation
Equipment, net
Land
Lease asset
Accumulated depreciation
Lease asset, net
Construction in progress
Total property, plant and equipment
Intangible fixed assets
Software
Other
Total intangible fixed assets
Investments and other assets
Investment securities
Investments in securities in affiliates
Investments in capital of affiliates
Long-term loans to affiliates
Prepaid pension costs
Other
Allowance for doubtful accounts
Total investments and other assets
Total fixed assets

33

(Million yen)

TOTAL ASSETS

Year ended
March 31, 2017
(As of March 31, 2017)
1,399,653

34

Year ended
March 31, 2018
(As of March 31, 2018)
1,447,073

(Million yen)

Year ended
March 31, 2017
(As of March 31, 2017)

Year ended
March 31, 2018
(As of March 31, 2018)

11,521
206,386452
200
31,953
17,0494,052
187,041
7,575
178
18,679485
138
485,715

11,771
209,154436–
37,614
16,526
3,937
194,277
7,521
197
29,580713–
511,730

100,000
1,072
966
5,834
8,685
207
–
59,959–176,726
662,442

100,000
972
986
5,834
9,234
367
7,543
72,504
201
197,646
709,376

114,464

114,464

144,898
144,898

144,898
144,898

23,30023,300

0

0

25

23

332,780
43,659399,765(69,581)589,546

282,780
69,719375,823(62,854)572,331

147,664

165,365

147,664
737,211
1,399,653

165,365
737,696
1,447,073

LIABILITIESCurrent liabilities
Notes payable
Trade payable
Lease obligations
Asset retirement obligations
Accounts payable - otherAccrued expenses
Advances received
Deposits payable
Reserve for bonuses
Reserve for bonuses to directors
Repair reserve
Notes payable for facilities
Other
Total current liabilities
Long-term liabilities
Bonds
Lease obligations
Asset retirement obligations
Long-term accounts payable
Provision for retirement benefits
Reserve for environmental measures
Repair reserve
Deferred tax liabilities
Other
Total long-term liabilities
TOTAL LIABILITIESNET ASSETSStockholders’ equity
Common stock
Capital surplus
Capital reserve
Total capital surplus
Retained earnings
Legal reserve
Other retained earnings
Reserve for special depreciation
Reserve for depreciation reduction of fixed
assetsOther reserve
Retained earnings brought forward
Total retained earnings
Treasury stock
Total stockholders’ equity
Valuation and translation adjustments
Valuation difference on available-for-salesecurities
Total valuation and translation adjustments
TOTAL NET ASSETSTOTAL LIABILITIES AND NET ASSETS

35

(2) Non-consolidated statements of income(Million yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating loss
Non-operating income
Interest income
Dividend income
Other
Total non-operating income
Non-operating expenses
Interest expense
Other
Total non-operating expenses
Ordinary income
Extraordinary gains
Gain on sale of fixed assets
Gain on sale of investment securities
Other
Total extraordinary gains
Extraordinary losses
Loss on sale or disposal of fixed assets
Impairment loss
Repair costs and repair reserve provisions
Other
Total extraordinary losses
Income before income taxes
Current income taxes
Deferred income taxes
Total income taxes
Net income

36Year ended
March 31, 2017976,797
858,427
118,369
127,776(9,406)

Year ended
March 31, 2018
990,750
863,888
126,862
129,776(2,914)

191
24,922
34,74259,855

177
26,616
31,27358,066

1,531
27,95529,486
20,962

1,533
27,19728,73026,42252
44,764827
45,644

11,964
44,775
1,512
58,251

5,389–
37,7382,037
45,164
21,442
1,490
(33)
1,456
19,985

3,076
3,951
53,5003,685
64,213
20,460
1,320
787
2,107
18,353

(3) Non-consolidated statements of changes in net assets
The year ended March 31, 2017 (April 1, 2016 – March 31, 2017)(Million yen)
Stockholders’ equity
Capital surplus
Commonstock

Balance at the beginning ofcurrent period
Changes of items during theperiodReversal of reserve for
special depreciation

114,464Retained earnings
Other retained earnings

Capitalreserve

Total capitalsurplus

Legal reserve

144,898

144,898

23,300Reserve forReserve fordepreciation
specialdepreciation reduction of
fixed assets

0

27

Other
reserve

Retainedearnings
brought
forwardTotal
retainedearnings

332,780

70,156426,264

0

–

2

–

(19,919)(19,919)

19,98519,985(26,564)(26,564)(0)

Reversal of reserve fordepreciation reduction of
fixed assets(2)

Cash dividends paid
Net income
Purchases of treasury stock
Cancellation of treasury stock
Net changes in items otherthan stockholders’ equity
Total changes of items during
the period

–

–

–

–

(0)

(2)

–

(26,496)(26,498)

Balance at the end of current
period114,464

144,898

144,898

23,300025

332,780

43,659399,765

Valuation and translation
adjustments

Stockholders’ equity

Balance at the beginning ofcurrent period
Changes of items during theperiodReversal of reserve for
special depreciation
Reversal of reserve fordepreciation reduction of
fixed assets

Treasury
stock

Total
stockholders’equityValuationdifferenceonavailablefor-salesecurities

Total
valuationandtranslation
adjustments

Total net
assets(80,972)

604,655

121,712

121,712726,367

Cash dividends paid
Net income

–

–

–

–

(19,919)(19,919)

19,98519,985Purchases of treasury stock(15,174)(15,174)(15,174)

Cancellation of treasury stock

26,564––

Net changes in items otherthan stockholders’ equity
Total changes of items during
the period
Balance at the end of current
period–25,951

25,951

25,951

11,390(15,108)

25,951

25,951

10,843(69,581)589,546

147,664

147,664

737,211

37

The year ended March 31, 2018 (April 1, 2017 – March 31, 2018)(Million yen)
Stockholders’ equity
Capital surplus
Commonstock

Balance at the beginning ofcurrent period

114,464Retained earnings
Other retained earnings

Capitalreserve

Total capitalsurplus

Legal reserve

144,898

144,898

23,300Reserve for Reserve fordepreciation
specialreduction ofdepreciation fixed assets

0

25

Other
reserve

Retainedearnings
brought
forwardTotal
retainedearnings

332,780

43,659399,765

0

–

2

–

Changes of items during theperiodReversal of reserve for
special depreciation(0)

Reversal of reserve fordepreciation reduction of
fixed assets(2)(50,000)

Reversal of other reserves
Cash dividends paid
Net income

50,000–(19,510)(19,510)

18,35318,353Purchases of treasury stock

(0)

(0)

Cancellation of treasury stock(21,763)(21,763)

Decrease due to company
split(1,021)(1,021)

Disposal of treasury stock

Net changes in items otherthan stockholders’ equity
Total changes of items during
the period

–

–

–

–

(0)

(2)

(50,000)

26,059(23,942)

Balance at the end of current
period114,464

144,898

144,898

23,300023282,780

69,719375,823

Valuation and translation
adjustments

Stockholders’ equity

Balance at the beginning ofcurrent period

Treasury
stock

Total
stockholders’equityValuationdifferenceonavailablefor-salesecurities

Total
valuationandtranslation
adjustments

Total net
assets(69,581)589,546

147,664

147,664

737,211

Changes of items during theperiodReversal of reserve for
special depreciation––

Reversal of reserve fordepreciation reduction of
fixed assets

–

–

–

–

(19,510)(19,510)

18,35318,353(15,037)(15,037)(15,037)10

021,763––

Decrease due to company
split(1,021)(1,021)

Net changes in items otherthan stockholders’ equity–

17,70017,70017,700

Reversal of other reserves
Cash dividends paid
Net income
Purchases of treasury stock
Disposal of treasury stock
Cancellation of treasury stock

Total changes of items during
the period

6,727(17,215)

17,70017,700485

Balance at the end of current
period(62,854)572,331

165,365

165,365

737,696(4) Notes regarding non-consolidated financial statements[Notes on premise of a going concern]None38