This document has been translated from the Japanese original for convenience purposes only. In theevent of any discrepancy between this translated document and the Japanese original, the Japaneseoriginal shall prevail.
(Ticker Code: 7912)
June 1, 2018

Yoshitoshi Kitajima
President
Dai Nippon Printing Co., Ltd.
1-1, Ichigaya-Kagacho 1-chome,
Shinjuku-ku, Tokyo
CONVOCATION NOTICE OF THE 124th
ORDINARY GENERAL MEETING OF SHAREHOLDERS
Dear Shareholders:This is to inform you that the 124th Ordinary General Meeting of Shareholders of
Dai Nippon Printing Co., Ltd. (the “Company”) will be held as set forth below and thatyou are cordially invited to attend it.
If you are not able to attend the meeting, you may exercise your voting rights inwriting or by electronic means (via the Internet). After reviewing the following
Reference Materials for the General Meeting of Shareholders (page 7 through page 22),
you are kindly requested to exercise your voting rights by 6:00 p.m. on June 27, 2018
(Wednesday) (Japan time) by (i) mailing the Voting Form to the Company indicating
your approval or disapproval for each of the agenda items in the Voting Form enclosed
herewith, or (ii) exercising your voting rights through the designated website after
reviewing the “Guidance Note on the Exercise of Voting Rights through the Internet”(page 5 and page 6).

1

1. Date and Time:

June 28, 2018 (Thursday), at 10:00 a.m. (Japan time)

2. Venue

Multi-purpose Auditorium on the lobby floor
DNP Ichigaya-Sanaicho Building of Dai Nippon Printing Co.,Ltd.
31-2, Ichigaya-Sanaicho, Shinjuku-ku, Tokyo

3. Meeting Agenda
Matters to be Reported:
1. Report on the Business Report and the Consolidated Financial
Statements for the 124th Fiscal Period (from April 1, 2017 to March
31, 2018) and the Results of the Audit of Consolidated Financial
Statements for the 124th Fiscal Period (from April 1, 2017 to March
31, 2018) by the Accounting Auditor and the Board of Statutory
Auditors
2. Report on the Financial Statements for the 124th Fiscal Period (from
April 1, 2017 to March 31, 2018)
Matters to be Resolved:
1st Agenda:

Appropriation of Retained Earnings

2nd Agenda:

Election of Eleven (11) Directors[End][Guidance on Disclosure on the Internet]
Pursuant to the laws and ordinances and the provisions of Article 15 of the Articles
of Incorporation of the Company, out of the documents to be attached to this Notice,“the summary of resolutions related to the systems for ensuring the properness ofbusiness operations and the summary of the operating status of such systems”, “thebasic policies related to the way a person is to control the decisions on the financial andbusiness policies of the Company (basic policies related to control of the Company)”,“Notes to the Consolidated Financial Statements” and “Notes to the Financial
Statement” are posted on the Company’s website (http://www.dnp.co.jp/) (available inJapanese), and are not included in the documents attached to this Notice.

2

Accordingly, the attached documents are portions of the documents audited by the
Accounting Auditor in preparation of the Accounting Auditor’s Report and portions of
the documents audited by the Statutory Auditors and the Board of Statutory Auditors in
preparation of the Audit Report.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~◎

If you attend the meeting in person, please submit the enclosed Voting Form to thereceptionist at the meeting venue.
◎

In the event the Company makes any amendment to the Reference Materials for

the General Meeting of Shareholders, as well as the Business Report, the Consolidated
Financial Statements and the Financial Statements, such amendment will be posted on
the Company’s website (http://www.dnp.co.jp/) (available in Japanese).
Please note that there will be no souvenirs at the Meeting of Shareholders.
appreciate your understanding.

3

We would

Exercising your voting rights
You are kindly requested to exercise your voting rights after reviewing the following“Reference Materials for the General Meeting of Shareholders” (page 7 through page
22).
There are three ways to exercise your voting rights as follows.
(i)【Attendance】
Please submit the enclosed Voting Form to the receptionist at the meeting venue.
Date: June 28, 2018 (Thursday), at 10:00 a.m. (start accepting: 9:00 a.m.) (Japan time)[If you are not able to attend the meeting](ii)【Postal Mail】
Please indicate your approval or disapproval for each of the agenda items in the
Voting Form, affix the protective sticker, and mail the Voting Form to the Company.
The deadline by which the Voting Form must be received is 6:00 p.m. on June 27,2018 (Wednesday) (Japan time).
(iii)【Internet】
Please access the website for exercise of voting rights using a PC or smartphoneand enter your approval or disapproval for each of the agenda items.
The deadline by which your approval or disapproval must be submitted is 6:00 p.m.
on June 27, 2018 (Wednesday) (Japan time).
Please see the details on the next page.

4

Guidance Note on the Exercise of Voting Rights through the Internet
It is possible to exercise your voting rights using any of the following means.

Pleaseexercise your voting rights by 6:00 p.m. on June 27, 2018 (Wednesday) (Japan time).
1.

Exercise of Voting Rights using ID/ Password(i) Please access the “Website for Exercise of Voting Rights” (URL below), log-in
using the voting rights exercise code (ID) and password which are printed on the Voting
Form enclosed herewith, and follow the instructions on the screen to enter yourapproval or disapproval of each of the agenda items.

Further, for security purposes,

you will be required to change your password the first time you log-in.
(ii) The password (including the password changed by the shareholder) is valid only forthis meeting.

New passwords will be issued for the next meeting.

(iii) The password is a tool to identify the person who is voting as the shareholder
himself/herself.

Please note that the Company will not ask shareholders for theirpasswords.
(iv) If you enter an incorrect password more than a certain number of times, thepassword will be locked and invalid. If it is locked, please follow the guidance on thescreen.
Website for Exercise of Voting Rights

https://soukai.mizuho-tb.co.jp/
2.

Exercise of Voting Rights by “Smart Exercise”(i) Please scan the QR code® which is printed on the lower right of the Voting Form
enclosed herewith with your smartphone, access the “Smart Exercise” and follow the
instructions on the screen to enter your approval or disapproval of each of the agenda
items (it is not necessary to enter ID / password).
(ii) The exercise of voting rights by “Smart Exercise” may only be exercised once.
The recommended environment for “Smart Exercise” is as follows:
iPhoneiOS 8.1 above (Safari browser)

Android
Android 4.4 above (Chrome browser)※ Please kindly note that even if your device meets the above conditions, the “Smart Exercise”
function may not be available depending on the condition of your device.
5

(Please note)(i) The deadline for voting is 6:00 p.m. on June 27, 2018 (Wednesday) (Japan time), andvotes must be entered by the above time.

Shareholders are kindly requested toexercise their voting rights as early as possible.
(ii) If you would like to revise the contents of the exercise of the voting rights after
exercising your voting rights by “Smart Exercise”, please follow the directions as
described in 1 above and make the revision.
(iii) If you exercise your voting rights both by postal mail and through the Internet, thevote through the Internet shall be accepted as the valid exercise of your voting rights
and shall supersede any vote by postal mail. If you exercise your voting rights morethan once through the Internet, the latest vote shall be accepted as the valid exercise ofyour voting rights and shall supersede any prior vote.
(iv) The cost for Internet connection is to be borne by the shareholders.
(v) Exercise of voting rights through the Internet has been confirmed for use throughcommon devices connected to the Internet.

However, there is a possibility that such

exercise is not possible depending on the device you use or the conditions thereof.
3.

Inquiries

If you have any questions or inquiries, please contact Mizuho Trust & Banking Co.,
Ltd., Stock Transfer Agency Department (below) which is the Administrator of
Shareholder Registry.
TEL: 0120-768-524 (Operating Hours: Japan time, 9:00 a.m. through 9:00 p.m. on
weekdays)(Note) “QR code” is a registered trademark of Denso Wave Incorporated.

6

Reference Materials for the General Meeting of Shareholders
Agenda and Reference Matters
1st Agenda:

Appropriation of Retained Earnings

The Company’s basic policy on appropriation of profit is to pay out stabledividends to shareholders while giving consideration to the Company’s
performance and dividend payout ratio, etc. Further, for future businessdevelopment, the Company will work on enhancement of the managementfoundation through improvement of financial standing by the internal reserves.
The Company requests that the year-end dividend for the current term be ¥32 percommon share in the Company.
Pursuant to the resolution of the 123rd Ordinary General Meeting of Shareholdersof the Company held on June 29, 2017, we consolidated two common shares of theCompany into one as of October 1, 2017.

The year-end dividend for the current

term converted to the one based on the number of shares prior to the consolidation
is equivalent to ¥16 per share.

Therefore, the dividend for the current fiscal year

will be ¥32 per share, including the interim dividend of ¥16 per share, which is thesame amount as the preceding fiscal year on the assumption that such conversion is
made.
Matters related to the year-end dividend(1) Type of the dividend property
Cash(2) Matters regarding the assignment of the dividend property to shareholders
and the total amount of it¥32 per common share in the Company
Total Amount: ¥9,658,771,840(3) Effective date of dividend of retained earnings
June 29, 20187

2nd Agenda:

Election of Eleven (11) Directors

The terms of office of all twelve (12) Directors will expire as of the conclusion ofthis General Meeting of Shareholders. The Company requests the shareholders toelect eleven (11) Directors.
The candidates for Director are as follows:
Candidate No.

Name

1

Yoshitoshi Kitajima

Title and Responsibilities in the Company
Reappointment

President
Executive Vice President
in charge of Technology, Research, Business

2

Koichi Takanami

Reappointment

Development, Information System and Security(General), in charge of Lifestyle and Industrial
Supplies Operations (General)

3

Masayoshi Yamada

Reappointment

Executive Vice President
in charge of Accountant and Finance (General)4

Yoshinari Kitajima

Reappointment

Executive Vice President

5

Masahiko Wada

Reappointment

Senior Managing Director
in charge of Electronics Operations (General)
Senior Managing Director

6

Tetsuji Morino

Reappointment

in charge of Operations Plan (General), in chargeofInformation

Communication

Operations(General)
Senior Managing Director
7

Tokuji Kanda

Reappointment

in charge of Governance, Compliance and Risk
Management (General)
Managing Director
in charge of R&D and Engineering Management

8

Satoru Inoue

Reappointment

Div.,

Research&

Development

Center,Technology Development Center, CSR andEnvironmental Affairs Dept.
9

Kenji Miya

New

Senior Corporate Officer

Appointment

inchargeofPersonnel

Dept.,

Employee

Relations Dept. and Recruiting & Training Dept.

8

Reappointment
10

Tadao Tsukada

OutsideDirector

Independent
Reappointment
11

Tsukasa Miyajima

OutsideDirector

Independent

9Candidate
No.

Name
(Date of Birth)

Yoshitoshi
Kitajima(Aug. 25, 1933)

1
Reappointment

Brief personal history, title, responsibilities andstatus of important concurrent office
May. 1963
Jul. 1967
Jul. 1970
Jan. 1972
Aug.1975
Dec. 1979

Joined the Company
Director of the Company
Managing Director of the Company
Senior Managing Director of the Company
Director, Vice President of the Company
President of the Company(currently serving)No. of sharesintheCompany held

1,528,500[Reasons for nomination as a candidate for Director]
The reason for nominating Mr. Yoshitoshi Kitajima as a candidate for Director is that it is expectedthat he will work to appropriately oversee the entire Company’s group, based on his extensive
knowledge as well as his considerable experience and performance regarding general management
acquired in the course of having led the Company toward improvement of business performance
during his term as President since 1979.
Apr. 1963
Joined the Company
Aug.1987
Director of the Company
Jun. 1993
Managing Director of the Company
Koichi TakanamiJun. 1997
Senior Managing Director of the Company(Dec. 19, 1940)
Jun. 2007
Executive Vice President of the Company(currently serving)2
Reappointment

67,800[Reasons for nomination as a candidate for Director]
The reason for nominating Mr. Koichi Takanami as a candidate for Director is that it is expectedthat he will work to realize, among others, the strategy for technology, research and businessdevelopment and business strategy for life and industry area towards business growth andimprovement of business performance, and also appropriately oversee the entire Company’s group,
based on his considerable experience acquired over many years as a management executive in the
DNP group.

Masayoshi Yamada(Oct. 19, 1940)

Apr. 1963
Jun. 1989
Jun. 1996
Jun. 2001
Jun. 2007

Joined the Company
Director of the Company
Managing Director of the Company
Senior Managing Director of the Company
Executive Vice President of the Company(currently serving)

66,9003[Reasons for nomination as a candidate for Director]

Reappointment

The reason for nominating Mr. Masayoshi Yamada as a candidate for Director is that it is expectedthat he will work to realize, among others, the financial strategy towards business growth andimprovement of business performance, and also appropriately oversee the entire Company’s group,
based on his considerable experience acquired over many years as a management executive in the
DNP group.
10Candidate
No.

Name
(Date of Birth)

Yoshinari Kitajima(Sept. 18, 1964)

4
Reappointment

Brief personal history, title, responsibilities andstatus of important concurrent office
Apr. 1987
Mar. 1995
Jun. 2001
Jun. 2003
Jun. 2005
Jun. 2009

Joined The Fuji Bank Ltd.
Joined the Company
Director of the Company
Managing Director of the Company
Senior Managing Director of the Company
Executive Vice President of the Company(currently serving)No. of sharesintheCompany held

151,300[Reasons for nomination as a candidate for Director]
The reason for nominating Mr. Yoshinari Kitajima as a candidate for Director is that it is expectedthat he will work to realize the Company’s group strategy towards business growth andimprovement of business performance, and also appropriately oversee the entire Company’s group,
based on his considerable experience acquired over many years as a management executive in the
DNP group.
Mar.1970
Jun. 2002
Masahiko Wada
(Jan. 14, 1947)

Jun. 2005
Jun. 2008

Joined the Company
Director, General Manager of Display
Components Operations of the Company
Managing Director of the Company
Senior Managing Director of the Company(currently serving)

26,4005[Reasons for nomination as a candidate for Director]

Reappointment

The reason for nominating Mr. Masahiko Wada as a candidate for Director is that it is expectedthat he will work to realize, among others, the business strategy for electronics area towards
business growth and improvement of business performance, and also appropriately oversee theentire Company’s group, based on his considerable experience acquired over many years as amanagement executive in the DNP group.
Mar. 1970
Joined the Company
Jun. 2002
Director, General Manager of Strategic
Business Planning Dept. of the Company
Tetsuji Morino
Jun. 2005
Managing Director of the Company(Feb. 23, 1948)
Jun. 2014
Senior Managing Director of the Company(currently serving)

38,3006[Reasons for nomination as a candidate for Director]

Reappointment

The reason for nominating Mr. Tetsuji Morino as a candidate for Director is that it is expected that
he will work to realize, among others, the promotion of the business planning and the businessstrategy for information and communication area towards business growth and improvement ofbusiness performance, and also appropriately oversee the entire Company’s group, based on his
considerable experience acquired over many years as a management executive in the DNP group.

11Candidate
No.

Name
(Date of Birth)

Brief personal history, title, responsibilities and status ofimportant concurrent office
Apr. 1974
Jun. 2007

Tokuji Kanda(Jun. 10, 1951)

7
Reappointment

Jun. 2012
Jun. 2015

Joined the Company
Corporate Officer (Yakuin), General
Manager of Employee Relations Dept., incharge of Recruiting Dept. of the Company
Managing Director of the Company
Senior Managing Director of the Company(currently serving)No. of sharesintheCompany held

23,000[Reasons for nomination as a candidate for Director]
The reason for nominating Mr. Tokuji Kanda as a candidate for Director is that it is expected that
he will work to realize, among others, the enhancement of corporate governance structure towards
business growth and improvement of business performance, and also appropriately oversee theentire Company’s group, based on his considerable experience as a management executive in the
DNP group.
Apr. 1978
Jun. 2013

Satoru Inoue(Jan. 14, 1955)
8
Reappointment

Jun. 2015
Apr. 2018

Joined the Company
Director, in charge of Technical &Engineering Div., Technology Development
Center, Environment & Product Liability
Dept. of the Company
Managing Director of the Company
Managing Director, in charge of R&D andEngineering Management Div., Research &Development
Center,Technology
Development Center, and CSR andEnvironmental Affairs Dept. of theCompany(currently serving)

9,500[Reasons for nomination as a candidate for Director]
The reason for nominating Mr. Satoru Inoue as a candidate for Director is that it is expected that hewill work to realize, among others, the strategy for technical development towards business growthand improvement of business performance, and also appropriately oversee the entire Company’sgroup, based on his considerable experience as a management executive in the DNP group.

12Candidate
No.

Name
(Date of Birth)

Brief personal history, title, responsibilities andstatus of important concurrent offices
Apr. 1978
Jul. 2003
Jun. 2010

Kenji Miya
(Jun. 11, 1954)

Jun. 2014
Apr. 2018

9
New

Joined the Company
General Manager of Personnel Dept. of theCompany
Corporate Officer (Yakuin), General
Manager of Personnel Dept. of theCompany
Senior Corporate Officer (Joumu Yakuin),
General Manager of Personnel Dept. of theCompany
Senior Corporate Officer of the Company,in charge of Personnel Dept., Employee
Relations Dept. and Recruiting & Training
Dept. of the Company(currently serving)No. of sharesintheCompany held

2,400

Appointment[Reasons for nomination as a candidate for Director]
The reason for nominating Mr. Kenji Miya as a candidate for Director is that it is expected that hewill work to realize, among others, the strategy for human resources and labor towards businessgrowth and improvement of business performance, and also appropriately oversee the entire
Company’s group, based on his considerable experience as a management executive in the DNP
group.
Nov. 1982
Apr. 1999
10
Reappointment

Tadao Tsukada(Oct. 19, 1938)

Jun. 2002

OutsideProfessor of Tokyo Institute of Technology
Emeritus Professor of Tokyo Institute ofTechnology
Adviser to the Company
Director of the Company(currently serving)

1,000

Independent[Reasons for nomination as a candidate for Outside Director]
The reason for nominating Mr. Tadao Tsukada as a candidate for Outside Director is that his advice
Status of Attendance toand supervision, based on, among others, his high level insight and extensive experience as an
the Board of Directors

academic expert, over the Company’s management from an objective perspective independent
11/11

from the management executing the business are expected.
(100%)

Apr. 1990
Apr. 2003
11
Reappointment
OutsideTsukasa Miyajima(Aug. 23, 1950)

Jun. 2014
Apr. 2016

Professor of Keio University, Faculty of
Law
Registered as an attorney at law at the Daini
Tokyo Bar Association
Director of the Company (currently serving)Emeritus Professor of Keio University
Professor of Asahi University, Faculty of
Law and Graduate School of Law(currently serving)

Independent

13

1,700

Status of Attendance toStatus of important concurrent offices:
Outside Director of Hulic Co., Ltd.
Outside Statutory Auditor of Mikuni Corporation
Outside Director of Mitsui Sumitomo Insurance Company,
Limitedthe Board of Directors[Reasons for nomination as a candidate for Outside Director]
11/11

The reason for nominating Mr. Tsukasa Miyajima as a candidate for Outside Director is that his(100%)

advice and supervision, based on, among others, his high level insight and extensive experiences
as a legal expert, over the Company’s management from an objective perspective independent
from the management executing the business are expected.

14

(Notes)
1. The “Corporate Officer (Yakuin)”, which was a title used in the Company, waschanged to the “Corporate Officer (Shikko Yakuin)” in November 2015.
2. There is no special interest between any of the candidates for Director and theCompany.
3.

‧ Among the candidates for Director, Mr. Tadao Tsukada is a candidate for theOutside Director provided in Article 2, Paragraph 3, Item 7 of the Ordinancefor Enforcement of the Companies Act. As the Company judged that hesatisfies the independent criteria stipulated by the Tokyo Stock Exchange, Inc.
and the independent standards for independent director and/or statutory auditor
stipulated by the Company (stated on pages 17 and 18), the Company
submitted filing with the Tokyo Stock Exchange designating him as an
Independent Director. When his reappointment is approved, he is planned toremain in office as an Independent Director.
‧ Although he does not have experience of involvement in corporate
management other than by way of being an Outside Director, the Company
determined that he is capable of carrying out his duties adequately as an
Outside Director for the reason stated in “[Reasons for nomination as a
candidate for Outside Director]” above.
‧ While he was an Adviser to the Company in the past, he was not involved in
execution of the Company’s and its subsidiaries’ business but took theAdviser’s post for the purpose of giving opinion based on his high level insightand extensive experience as an academic expert on the Company’s
management from a standpoint of various stakeholders, including shareholders
and investors.

He retired as an Adviser to the Company when he wasappointed to be a Director of the Company.
‧ He will have been in office as one of the Company’s Outside Directors for
sixteen (16) years at the conclusion of this General Meeting of Shareholders.
‧ The Company has entered into a Contract for Limitation of Liabilities with himwith regard to the liability for damage to the Company provided in Article 423,
Paragraph 1 of the Companies Act, to the effect that the liability for damage
attributable to his performance of duty as an Outside Director of the Company
in good faith and without gross negligence to be limited to the amount ofminimum liability stipulated in Article 425, Paragraph 1 of the same Act.

If

his reappointment is approved, the Company plans to extend the above15

mentioned Contract for Limitation of Liabilities with him.
4. ‧ Among the candidates for Director, Mr. Tsukasa Miyajima is a candidate for
Outside Director provided in Article 2, Paragraph 3, Item 7 of the Ordinancefor Enforcement of the Companies Act. As the Company judged that hesatisfies the independent criteria stipulated by the Tokyo Stock Exchange, Inc.
and the independent standards for independent director and/or statutory auditor
stipulated by the Company (stated on pages 17 and 18), the Company
submitted filing with the Tokyo Stock Exchange designating him as an
Independent Director. When his reappointment is approved, he is planned toremain in office as an Independent Director.
‧ Although he does not have experience of involvement in corporate
management other than in the way of being an Outside Director or an Outside
Statutory Auditor, the Company determined that he is capable of carrying out
his duties adequately as an Outside Director for the reason stated in “[Reasonsfor nomination as a candidate for Outside Director]” above.
‧ He will have been in office as one of the Company’s Outside Directors for four(4) years at the conclusion of this General Meeting of Shareholders.
‧ The Company has entered into a Contract for Limitation of Liabilities with himwith regard to the liability for damage to the Company provided in Article 423,
Paragraph 1 of the Companies Act, to the effect that the liability for damage
attributable to his performance of duty as an Outside Director of the Company
in good faith and without gross negligence to be limited to the amount ofminimum liability stipulated in Article 425, Paragraph 1 of the same Act.

If

his reappointment is approved, the Company plans to extend the above
mentioned Contract for Limitation of Liabilities with him.

16

(Reference)

The Independent Standards for Independent Director and/or

Statutory Auditor
Independent Director and/or Statutory Auditor must not fall under any of the following
standards and must be independent from management executives in the Company.
(1)

Person who is engaged (or had been engaged at any time in the past 10 years)
in the business execution of the Company or the Company’s affiliates(collectively, the “Group”) (This includes person that had, at any time in thepast 10 years, served as a non-executive Director or Statutory Auditor of theGroup, and had engaged in the business execution of the Group at any time fora period of 10 years before serving as a non-executive Director or Statutory
Auditor of the Group);(2)

Party for whom the Group is a major business partner [Note: a business partnergroup (a corporate group to which a direct business partner belongs) thatprovides the Group with products or services for which the transaction value inthe most recent fiscal year exceeds 2% of such business partner group’s annual
consolidated sales or total income] or a person engaged in the businessexecution of such party;(3)

Major business partner of the Group [Note: a business partner group to which
the Group provides products or services for which the transaction value in themost recent fiscal year exceeds 2% of the Group’s annual consolidated sales] ora person engaged in the business execution of such business partner;(4)

Major lender of the Group [Note: a lender from which total borrowings in themost recent fiscal year exceeds 2% of the Group’s annual consolidated assets]
or a person engaged in the business execution of such lender;(5)

Consultant, accounting professional or legal professional obtaining large
amounts of money or other financial benefits, other than as remuneration of
Director or Statutory Auditor, from the Group [Note: a person obtaining fromthe Group, other than as remuneration of Director or Statutory Auditor,
financial benefits in excess of the higher of 10 million yen per year or 2% of
his/her annual sales or total income for the most recent fiscal year] (if suchfinancial benefits are obtained by an organization, this item refers to a person
belonging to such organization);(6)

Major shareholder of the Company (a shareholder, directly or indirectly,
17

holding 10% or more of voting rights), or a person engaged in the businessexecution of such shareholder;(7)

Person engaged in the business execution of a company in which the Group is amajor shareholder (a shareholder, directly or indirectly, holding 10% or more of
voting rights);(8)

Person belonging to an auditing firm performing statutory audits of theCompany;(9)

Person to whom any of Items (2) through (8) apply during the most recent 1
year;

(10)

Relative (within the second degree of consanguinity) of a person to whom anyof Items (1) through (5) apply (excluding a person who is not in an important
position);(11)

Person who is engaged (or had been engaged at any time in the past 10 years)
in the business execution of a company between which and the Company
Outside Directors or Statutory Auditors are or were mutually appointed; and(12)

Party that receives (or received in the past 10 years) donations [Note: donations
in excess of the higher of, on average for the most 3 recent fiscal years, 10
million yen per year or 2% of total annual income of such party] from theCompany or a person engaged in the business execution of such party.

18

(Reference) The Fundamental Philosophy of the Corporate Governance
The Company seeks to improve, among others, earning power and capital efficiency inorder to aim for sustained growth and increase enterprise value over the medium tolong-term based on “DNP Group Vision 2015”.

Therefore, the Company recognizes that

it is necessary to boldly pursue various business opportunities, fulfill our corporate social
responsibilities (CSR) and win the trust of our various stakeholders, such as shareholders,customers, consumers and employees in order to improve our business competitiveness inthe future.
To this end, the Company regards enhancement of corporate governance, including internal
control systems, as a top management priority.

The Company establishes and operates

systems that enable proper managerial decision-making, prompt and appropriate businessexecution based on these decisions and supervision and auditing of processes of the proper
managerial decision-making and prompt and appropriate business execution.

The

Company also conducts training and education to improve each employee’s awareness ofcompliance issues and strives to enhance our overall corporate governance.

19

<Structure diagram>
General Meeting of Shareholders
Audit

Audit

Board of Directors
Advisory Committee

Management Committee

President and Directors in Charge
ReportingCorporate Ethics Committee
Directors andCorporate Officers
in charge

ReportingOpen Door RoomInformation Disclosure Committee

Information Security Committee
Quality Assurance and Product Safety
Committee

Audit

Central Disaster Prevention Council
Guidance

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

Audit

Support

Audit Unit

(Autonomous
implementation, inspection,
review, improvement)

Reporting

Guidance
Training

Audit
Guidance
Reporting

Coordination

20(Board of) Statutory Auditors

Audit

Auditing Department

Group companies(Oversight of internal controls)

Head Office

Audit

Operating Units

Accounting Auditors

Divisions

CSR & Environmental Committee

※Management Committee and Advisory Committee
To speed up the Company’s management activities and make them more efficient, the Company
holds a Management Committee consisting of directors at the senior managing director level
and above.

The Company also holds an Advisory Committee comprised of independent

outside directors and statutory auditors to provide advice and opinions on important matters,such as nomination of directors and statutory auditor candidates and director compensation.
The Board of Directors of the Company makes resolutions based on the advice and opinions by
Advisory Committee.

Further, in February 2018, the number of members of the Advisory

Committee was increased from two (2) to three (3) in order to further enhance the objectivity
and transparency of the discussion.
※Consultant (Soudanyaku) and Adviser
In the Company, those who have experienced directors and statutory auditors may be appointed tobe Adviser (part-time) after his/her retirement, during a certain period of time, in order to advise
the Company based on his/her considerable experience and high-level insight upon Company’s
request.

However, such Advisers have no authority concerning management of the Company.

Further, the Company does not appoint any Consultant (Soudanyaku).
※Evaluation of the effectiveness of the overall Board of Directors
In the Company, an independent third party shall aggregate and analyze the contents of anquestionnaire survey for all the directors and statutory auditors in order to evaluate theeffectiveness of the overall Board of Directors implemented from April to the following March
every year.

Consequently, the Board of Directors is aware of the points that need improvementin the future and will reconfirm further improvement of the effectiveness of the overall Board of
Directors.

Basic Policy on Profit Distribution
The Company considers the return of profits to shareholders to be an important management
policy.

Regarding the allocation of profits, the Company aims to provide stable dividends toour shareholders, and will implement it based on our business performance and payout ratio.
In preparation for future business development, the Company strives to enhance our financial
structure through retained earnings and strengthen our management foundation.

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<History of Dividend per Share>
the fiscal year the fiscal year the fiscal year the fiscal year the fiscal year
endingin endingMarch 2014
The

interim ¥16

in endingin endingin endinginMarch 2015

March 2016

March 2017

March 2018

¥16

¥16

¥16

¥16

¥16

¥16

¥16

¥32 (Note)

¥32

¥32

¥32

－

dividend
The year-end ¥16
dividend
The dividend ¥32
for the fiscal
year(Note)
Regarding the year-end dividend for the fiscal year ending in March 2018, the Company
describes the amount as 1st Agenda at this 124th Ordinary General Meeting of Shareholders(page 7).
We consolidated two common shares of the Company into one as of October 1, 2017.

The

year-end dividend for the current term converted to the one based on the number of shares prior
to the consolidation is equivalent to ¥16 per share.

Therefore, the dividend for the current

fiscal year will be ¥32 per share, including the interim dividend of ¥16 per share, which is thesame amount as the year-end dividend for the fiscal year ending in March 2017 on theassumption that such conversion is made.

[End]

22