Financial Section
Management’s Discussion and Analysis

Revenues and Expenses

In Industrial and material operations, sales of window films

In the fiscal year under review, consolidated net sales decreased 5.6%

increased substantially due to higher demand for films for electricity

year on year, to ¥200.9 billion. This decline is largely attributable to asaving and glass shatter-proofing purposes as well as the sales

drop in sales of PV backsheets due to the inventory adjustment trend

contributions from U.S. subsidiary SOLAMATRIX, INC. (currently

in the market as well as the low performance of LCD-related products.

MADICO WINDOW FILMS, INC.), which was consolidated during theGross profit was down 13.1% year on year, to ¥42.2 billion, following

fourth quarter of the previous fiscal year. However, sales of PV back-lower net sales and higher raw material prices. Regardless of our

sheets were down notably because of the inventory adjustment

ongoing efforts to cut fixed costs, selling, general and administrative

trend in the market. Adhesive products for automobiles, including

expenses rose 1.9%, to ¥28.2 billion, due to factors such as a rise

those for motorcycles, and industrial-use pressure-sensitive tapesin personnel costs. As a result, operating income decreased 33.1%,

also experienced a drop in sales following the decline in productionto ¥14.0 billion.

among manufacturers due to the earthquake in Japan and flooding

Income before income taxes decreased 31.6%, to ¥13.4 billion, andin Thailand.

income taxes were ¥4.7 billion. Further deferred income taxes rose

As a result of the above, net sales in the Printing and Industrial¥0.7 billion as a result of the revision to the tax systems that cameMaterials Products segment were ¥90.1 billion, and operating

into effect on April 1, 2012.

income was ¥5.2 billion.

As a result of these factors, net income decreased 36.5%, to¥8.6 billion. Net income per share declined from ¥180.21 in theElectronic and Optical Products

previous fiscal year, to ¥115.26, and return on equity (ROE) fell fromIn Advanced materials operations, sales of semiconductor-related

10.9% to 6.6%.

tapes increased slightly year on year, while semiconductor-related
equipment saw a large decrease in sales due to limited capital

Performance by Operational Segment
Printing and Industrial Materials Products

investment among semiconductor manufacturers. Sales of coated

In Printing and variable information products operations, sales in

as a result of robust demand for smartphones. However, sales ofAsia were unchanged from the previous year due to the drop in

optical device-related products dropped.

films for multilayer ceramic capacitor (MLCC) production were solid

demand in the second half of the fiscal year as a result of the

In Optical products operations, smartphone demand was brisk,

impacts of the financial crisis in Europe as well as the severe flooding

but demand for products for use in flat-screen TVs in Japan andin Thailand. Sales in Japan declined year on year because of theoverseas was low.

disruptions to the production activities of major users following theGreat East Japan Earthquake.

As a result of the above, net sales in the Electronic and Optical
Products segment were ¥73.9 billion, and operating income was¥3.9 billion.

Net Sales

Operating Income

Net Income / ROE¥ Billion¥ Billion¥ Billion / %

240

24

15

Sales by Operational Segment

18.4%

200.9
160

16

14.0

10

8.6

44.8%
36.8%

6.6
80

8

5

0

0

0

08

09

10

11 12 FY

08

09

10

11 12 FY

Printing and Industrial
Materials Products
08

09

Net Income

10

11 12 FY

Electronic and Optical Products

ROE

Paper and Converted Products

LINTEC ANNUAL REPORT 201221

Paper and Converted Products

decrease in inventories of ¥0.06 billion, compared with an increase in

In Fine and specialty paper products operations, post-earthquake

inventories of ¥3.0 billion in the previous fiscal year.

reconstruction demand boosted sales volumes of construction

Net cash used in investing activities increased ¥2.3 billion, tomaterial papers for wallpaper, but overall demand was down for¥12.3 billion. A major contributing factor was a ¥2.9 billion decline inproducts such as mainstay color papers for envelopes andproceeds from withdrawal of time deposits.

industrial-use special function papers.

Net cash used in financing activities was up ¥2.3 billion, to ¥5.1

In Converted products operations, sales were down due to sluggish

billion. Of this increase, ¥0.4 billion was attributable to a rise in cash

demand for mainstay release papers for adhesive products and flexible

dividends paid and ¥1.7 billion was attributable to a rise in purchaseprinted circuits as well as casting papers for synthetic leather.

of treasury stock.

As a result of the above, net sales in the Paper and Converted Products
segment were ¥36.9 billion and operating income was ¥4.8 billion.

Consequently, cash and cash equivalents at the end of the fiscal
year totaled ¥36.0 billion, up from ¥35.2 billion at the end of theprevious fiscal year.

Financial Condition
Total assets at the end of the fiscal year under review increased 1.9%

Dividends

year on year, to ¥210.2 billion, following a rise in cash and deposits

LINTEC’s basic policy on the appropriation of profits is to increase

and trade notes and accounts receivable. Total liabilities were up

business earnings and strengthen the Company’s financial position

2.3%, to ¥77.4 billion, as a result of increases in trade notes andfrom a long-term perspective while paying dividends that reflectaccounts payable and current liabilities—other, which offset a

consolidated business results. Acting in accordance with this policy,

decline in accrued income taxes. Net assets rose 1.7%, ¥132.8 billion,

the Company is working to increase shareholder returns.

due to an increase in retained earnings.

For the fiscal year under review, the Company had initially forecast

Due to the above, net assets per share increased from ¥1,715.78 at

net income per share of ¥173.30, based on which the Company

the end of the previous fiscal year, to ¥1,766.60, and the shareholders’intended to issue dividend payments of ¥40.00 per share, making forequity ratio remained at the same level as the previous year, at 62.8%.

a consolidated payout ratio of 23.1%. However, net income per share
was much lower than expected, at ¥115.26. The Company still chose

Cash Flows

to issue dividend payments as initially planned, paying ¥40.00 per

Net cash provided by operating activities decreased ¥4.4 billion year

share, which resulted in a consolidated payout ratio of 34.7%.

on year, to ¥18.9 billion. This was largely attributable to a ¥6.2 billion

For the fiscal year ending March 31, 2013, the Company forecasts

decline in income before income taxes and the recording of an

consolidated net income of ¥10.0 billion, which will equate to net

increase in trade notes and accounts receivable of ¥2.0 billion,

income per share of ¥133.88. Accordingly, the Company plans tocompared with a decrease in trade notes and accounts receivable ofissue dividend payments of ¥34.00 per share, making for a consoli-¥0.6 billion in the previous fiscal year, which offset the recording of a

dated payout ratio of 25.4%.

Total Assets / Net Assets

Net Cash Provided byOperating Activities

Cash Dividends per Share¥ Billion¥ Billion

¥

240

24

210.2

160

45

40.0

18.9
16

30

8

15

132.8
80

0

08

09

Total Assets
2210

11 12 FYNet Assets

LINTEC ANNUAL REPORT 2012

0

08

09

10

11 12 FY

0

08

09

10

11 12 FY

Operating Risks

The following is a summary of risks that could affect the LINTEC(4)	Outbreaks of contagious diseases

Group’s operations. This summary provides specific examples of(5)	Unpredictable changes in laws and regulations, such as thosemajor risks that are anticipated, but it does not include all risks.
Forward-looking statements of this report are based on the
Company’s judgment as of June 26, 2012.

1. Changes in Economic Conditions

involving tax systems, foreign exchange, or customs(6)	Problems arising between the Group and its businessassociates or in the collection of accounts receivable due todifferences in cultures or business practices

The Group’s operations include development in a wide range of

6. New Product Development

industries. Therefore, domestic and overseas economic conditions

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

affect the Group’s operations directly and indirectly. As a result, future

hensive technological capabilities that cater to market demand andtrends in economic conditions could affect the Group’s business results.

bringing to market competitive, high-value-added products. Accord-

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

ingly, the Group is stepping up allocations of management resources

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

to increase its number of researchers and to pursue such initiatives aselectronics industry trends could affect the Group’s business results.

joint research with other companies and academic institutions.

2. Changes in Selling Prices

However, there is no guarantee that such investment of management

Due to intense competition in both the domestic and overseas

resources in R&D will result in the development of new products ormarkets in which the Group operates, the Group may be unable toincrease operating income. Due to such factors as extended

maintain selling prices to preserve sufficient earnings or sales share.

development periods, it could become necessary to discontinue

Furthermore, the Group’s business results could be affected by diffi-

development, and if product development costs cannot be

culties related to cost reductions aimed at maintaining profits andrecovered, it could affect the Group’s business results.

recovering its share by refining customer services.

7. Intellectual Property Rights

3. Changes in Raw Material Prices

The Group takes necessary measures to protect intellectual property

The Group uses a wide range of raw materials, such as pulp forrights in Japan and overseas for various original production tech-paper and petrochemical products, and fuels. The prices of thesenologies that it has developed. However, legal measures alone domaterials fluctuate in accordance with market conditions, such as

not provide complete protection, possibly preventing the Groupinventories and the supply-demand balance. The Group purchasesfrom effectively protecting the rights it has obtained. Furthermore,

raw materials in light of careful monitoring of market trends.

in the event that a lawsuit is filed by a third party regarding intel-

However, a dramatic change in raw material prices could affectlectual property rights infringement associated with the Group’s

the Group’s business results.

products, the Group’s business results could be affected.

4. Changes in Foreign Exchange Rates

8. Significant Lawsuits

The Group conducts foreign currency-denominated procure­ment

In conducting business in Japan and overseas, the Group may

and sales overseas as well as finance transactions between bothbe subject to lawsuits or other claims related to product liability,

domestic and overseas Group companies. Therefore, changes inenvironmental, or intellectual property rights issues. Lawsuits orforeign exchange rates could affect the Group’s business results.

claims, depending on their content, could affect the Group’s

5. Overseas Operations

business results.

The Group conducts manufacturing and business operations in

9. Legal and Regulatory Systems

markets worldwide. In these countries, the following events could

In the countries in which it conducts business operations, the Groupaffect the Group’s business results.

is subject to various legal and regulatory systems, and the Group is(1)	Political instability or a deterioration in security due to suchworking to ensure rigorous compliance with these systems. In thefactors as terrorism, a political change, or a coup d’état

event that the systems are strengthened or changed, the Group’s(2)	Labor disputes, such as those involving strikes or boycotts

business activities could be restricted or the Group’s business results(3)	Infrastructure failures, such as those related to electric power,

could be affected.

water, or communications
LINTEC ANNUAL REPORT 201223

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

2012

2011

2010

2009

For the year:
Net sales
Operating income% of net sales
Income before income taxes
Net income
Return on equity
Return on assets¥200,905
13,975
7.0%
13,382
8,648
6.6%
6.5%

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

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

Per share data (yen):
Net income
Net assets
Cash dividends¥  115.26
1,766.60
40.00¥  180.21
1,715.78
40.00¥ 96.36
1,596.37
24.00¥ 44.86
1,497.58
20.00

Depreciation and amortization
Purchases of property, plant and equipment
Net cash provided by operating activities
Net cash used in investing activities
Net cash used in financing activities¥ 10,079(8,760)18,910(12,262)(5,099)¥10,178(8,237)23,307(9,926)(2,820)¥10,537(7,777)22,259(9,253)(3,454)¥11,286(9,584)
12,979(9,752)(2,300)At year-end:
Current assets
Current liabilities
Working capital
Cash and cash equivalents
Property, plant and equipment, net
Long-term debt, less current portion% of shareholders’ equity
Total assets
Net assets¥137,229
62,07575,15336,03662,273——
210,203132,847¥132,891
60,46572,42635,18861,888——206,188
130,576¥121,451
58,65462,79725,387
63,33754
0.0%
195,656
121,502¥95,937
43,65552,282
15,37067,010107
0.1%
172,854
113,930

62.8%

62.9%

61.7%

65.5%

76,564,240
4,286

76,564,240
4,198

76,564,240
4,037

76,564,240
3,987¥90,143
73,92553,225¥91,936
81,19355,317

—
—
—

—
—
—

5,213
3,942
4,846

7,990
6,732
6,129

—
—
—

—
—
—

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

24

LINTEC ANNUAL REPORT 2012

Millions of yen except per share data, number of shares, and number of employees
2008

2007

2006

2005

2004

2003

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

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

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

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

¥148,984
7,440
5.0%
3,239
1,592
2.2%
4.2%

¥ 123.15
1,598.30
24.00¥ 135.44
1,489.87
18.00¥ 118.34
1,370.85
16.00¥ 108.76
1,226.28
14.00¥ 111.90
1,149.19
12.00¥ 22.18
1,055.22
12.00¥ 9,011(14,700)
17,739(15,071)(769)¥ 7,701(11,646)
13,734(12,200)(68)¥ 6,823(12,715)
17,005(13,199)(2,789)¥ 6,216(8,699)
11,163(8,964)(411)¥ 5,503(8,699)9,475(8,497)(1,672)¥ 5,722(5,645)
10,099(7,400)(7,098)¥120,028
67,631
52,397
17,31573,711201
0.2%
204,852
121,635¥117,531
67,95049,581
15,55068,377280
0.3%
198,526
113,397¥104,433
57,74846,685
13,766
63,176347
0.3%
181,158
104,362¥ 97,510
54,816
42,694
9,191
56,411429
0.5%
169,590
92,768¥ 90,437
58,10932,3286,254
53,879622
0.8%
162,708
80,347¥ 85,195
50,25534,9406,921
54,6997,720
10.6%
156,439
72,577

59.4%

57.1%

57.6%

54.7%

49.4%

46.4%

76,564,240
3,802

76,564,240
3,708

76,564,240
3,537

76,564,240
3,421

70,817,980
3,171

69,629,677
3,233

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

LINTEC ANNUAL REPORT 201225

Consolidated Balance Sheets
LINTEC Corporation and its consolidated subsidiaries
March 31, 2012 and 2011ASSETS
Current assets:

Millions of yen

Thousands of
U.S. dollars(Note 1)

2012

2011

2012

¥   40,907¥   37,403$    497,724

Trade notes and accounts receivable (Notes 4, 12)

64,765

63,107

787,995

Inventories (Note 3)

27,217

27,571

331,154

Deferred tax assets (Note 17)

2,189

2,473

26,638

Other

2,395

2,539

29,149Cash and deposits (Notes 10, 12)

Allowance for doubtful accounts
		

Total current assets

(246)

(203)

(2,996)137,229

132,891

1,669,666

Non-current assets:
Property, plant and equipment (Notes 7, 8, 11):
Buildings and structures

57,43655,296

698,823

Machinery, equipment and vehicles

102,714100,650

1,249,714
112,401

Land

9,238

8,709

Construction in progress

2,716

1,446

33,056Other

10,252

10,113

124,736

Accumulated depreciation		Property, plant and equipment, net

Intangible assets (Note 11):

182,357

176,216

2,218,732(120,083)(114,327)(1,461,051)

62,273

61,888757,681

2,345

2,072

28,535Investments and other assets:
Investment securities (Notes 12, 13)

2,379

2,525

28,954

Deferred tax assets (Note 17)

4,894

5,426

59,546

Other (Note 15)

1,256

1,577

15,282

Allowance for doubtful accounts

(175)

(195)

(2,136)

		Total investments and other assets

8,354

9,334

101,647

		Total non-current assets

72,97373,296

887,863¥ 210,203¥ 206,188$ 2,557,529

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

26

LINTEC ANNUAL REPORT 2012

Millions of yen

Thousands of
U.S. dollars(Note 1)

2012

2011

2012

¥ 45,612¥ 44,506$  554,966

Short-term borrowings (Notes 12, 24)

1,320

1,467

16,060Accrued income taxes (Notes 12, 17)

1,223

3,557

14,890

30

93

374

13,888

10,840168,982

62,07560,465755,274

13,914

13,802

169,297

132

149

1,613

1,232

1,195

14,997

15,27915,146

185,908282,288

LIABILITIES AND NET ASSETS
Current liabilities:
Trade notes and accounts payable (Notes 4, 12)

Provision for director’s bonuses
Other (Notes 12, 14)		Total current liabilities

Non-current liabilities:
Accrued pension costs (Note 15)
Provision for environmental measures
Other
		

Total non-current liabilities

Commitments and contingent liabilities (Note 2)
Net assets:
Shareholders’ equity (Note 23):
Common stock:		

Authorized: 300,000,000 shares in 2012 and 2011

		Issued: 76,564,240 shares in 2012 and 201123,201

23,201

Capital surplus

26,83026,830326,443

Retained earnings

94,281

88,6381,147,111

Less: treasury stock, at cost:		

1,868,921 shares in 2012 and 971,045 shares in 2011		Total shareholders’ equity(2,750)(1,035)(33,470)

141,561

137,634

1,722,373

Accumulated other comprehensive income
Net unrealized holding gain on securities

117

102

1,428

Foreign currency translation adjustments(9,561)(7,894)(116,332)

Adjustment regarding pension obligations of consolidated overseas subsidiaries
		

Total accumulated other comprehensive income

(160)

(141)

(1,956)(9,604)(7,932)(116,860)
1,147

Share subscription rights (Note 16)

94

88

Minority interests

796

786

9,686

Total net assets

132,847

130,576

1,616,347

Total liabilities and net assets¥210,203¥206,188$2,557,529

		

LINTEC ANNUAL REPORT 201227

Consolidated Statements of Income
LINTEC Corporation and its consolidated subsidiaries
Years ended March 31, 2012 and 2011

Millions of yen

ASSETSNet sales
Cost of sales
Gross profit
Selling, general and administrative expenses (Notes 5, 6)
Operating income
Non-operating income:Interest income
Dividends income
Rent income
Gain on sales of noncurrent assets
Other income
		 Total non-operating income
Non-operating expenses:
Interest expenses
Loss on retirement of noncurrent assets
Compensation expenses
Foreign exchange losses
Other expenses
		 Total non-operating expenses
Ordinary income
Extraordinary gain:
SubsidyGain on sales of noncurrent assets (Note 7)
		 Total extraordinary gain
Extraordinary loss:
Loss on valuation of investment securities (Notes 12, 13)Loss on liquidation of subsidiaries
Loss on valuation of subsidiaries’ stocks
Loss on valuation of membership
Loss on sales of noncurrent assets (Note 8)
		 Total extraordinary losses
		 Income before income taxes
Income taxes (Note 17):
Current
Deferred		 Total income taxes
Income before minority interests
Minority interests
Net income (Note 23)

Thousands of
U.S. dollars(Note 1)

2012

2011

¥200,905
158,738
42,16728,192
13,975¥212,733
164,188
48,54427,65520,889$2,444,401
1,931,357
513,044
343,010
170,033

2012

233
53
52
24
260
625

161
65
65
90
276
659

2,835
650
640
303
3,174
7,605

24
446
86
303
126
986
13,613

19
643
124
992
248
2,028
19,520

302
5,432
1,046
3,692
1,533
12,008
165,630

22
—
22

61
42
104

268
—
268

128
84
28
11
—
253
13,382

45
—
—
—
13
58
19,565

1,565
1,022
349
144
—
3,080
162,817

3,689
987
4,677
8,704
56
¥  8,648

6,104
(235)
5,869
13,69673¥ 13,622

44,886
12,01956,905
105,912687$  105,224

Millions of yen

Thousands of
U.S. dollars(Note 1)

Consolidated Statements of Comprehensive Income
LINTEC Corporation and its consolidated subsidiaries
Years ended March 31, 2012 and 2011ASSETS

Income before minority interests
Other comprehensive income
Net unrealized holding gain on securities (Note 9)
Foreign currency translation adjustments (Note 9)
Adjustment regarding pension obligations of consolidated overseas subsidiaries (Note 9)
Total Other comprehensive income (Note 9)Comprehensive income(Comprehensive income attributable to:)Shareholders of the parent
Minority interests
The accompanying notes are an integral part of the consolidated financial statements.

28

LINTEC ANNUAL REPORT 2012

2012

2011

¥ 8,704¥13,696$105,912

2012

14(1,713)(19)(1,718)¥ 6,986

6(2,536)18(2,511)¥11,184

177(20,851)(236)(20,910)$ 85,001

6,976
9

11,15727

84,879121

Consolidated Statements of Changes in Net Assets
LINTEC Corporation and its consolidated subsidiaries
Years ended March 31, 2012 and 2011

Thousands

Millions of yen
Shareholders’ equity

Balance as at April 1, 2010

Accumulated other comprehensive income

Number ofshares ofcommonstock

Commonstock

CapitalsurplusRetainedearnings

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

76,564¥23,201¥26,830¥76,916¥(1,034) ¥125,912

160

160

	Transfer to Adjustment
regarding pension obligationsof consolidated overseas
subsidiaries¥ 96

Adjustment
regardingpensionForeign obligations of Accumulated
currency consolidated other com­Sharetranslation
overseas prehensive subscription
adjustments subsidiaries
incomerights¥(5,334)¥  —¥(5,237)

(160)

(160)

¥67

Minority
interests

Total net
assets¥759¥121,502—

Changes during the year:
Cash dividends(2,570)(2,570)(2,570)Net income

13,622

13,622

13,622

(0)

(0)

(0)

0

0

0

Purchase of treasury stock
Disposal of treasury stock0	Change of scope of consolidation

509

509

509

	Reserve fund for employee benefit

(0)

(0)

(0)

	Net changes in items otherthan shareholders’ equity

6(2,560)18(2,534)20

27

Total changes during the year

—

—

0

11,561(0)

11,561

6(2,560)18(2,534)20

27(2,487)
9,074

Balance as at March 31, 2011

76,56423,201

26,83088,638(1,035)

137,634

102(7,894)(141)(7,932)

88786

130,576

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

Net income

8,648

8,648

8,648

(1,719)(1,719)(1,719)

3

4

4
14

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

9(1,715)3,927

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

9(1,656)
2,271¥(2,750) ¥141,561¥117¥(9,561)¥(160)¥(9,604)

¥94

¥796

¥132,847

Purchase of treasury stock0

Disposal of treasury stock
Net changes in items otherthan shareholders’ equity
Total changes during the year

—

—

0

5,642

Balance as at March 31, 2012

76,564¥23,201¥26,830¥94,281(3,005)

Thousands

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

Balance as at April 1, 2011

Number ofshares ofcommonstock

Commonstock

76,564$282,288

CapitalsurplusRetainedearnings$326,440 $1,078,457

Accumulated other comprehensive income

Net
Total unrealized
Treasury shareholders’ holding gain
stock
equity on securities$(12,599) $1,674,587$1,250Adjustment
regardingpensionForeign obligations of Accumulated
currency consolidated other com­Sharetranslation
overseas prehensive subscription
adjustments subsidiaries
incomerightsMinority
interests$(96,047)$9,565 $1,588,714$(1,719)$(96,516)$1,078

Total net
assetsChanges during the year:
Cash dividends(36,570)(36,570)(36,570)

Net income

105,224

105,224

105,224(20,918)(20,918)(20,918)

48

51

51

—

177

(20,285)(236)(20,344)69

121(20,153)(20,870)

47,786

177(20,285)(236)(20,344)69

121

27,632$(1,956) $(116,860)$1,147Purchase of treasury stock2

Disposal of treasury stock
Net changes in items otherthan shareholders’ equity
Total changes during the year——

Balance as at March 31, 2012

76,564$282,2882

68,653$326,443 $1,147,111$(33,470)$1,722,373$1,428 $(116,332)$9,686 $1,616,347

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

LINTEC ANNUAL REPORT 201229

Consolidated Statements of Cash Flows
LINTEC Corporation and its consolidated subsidiaries
Years ended March 31, 2012 and 2011ASSETSCash flows from operating activities:
Income before income taxes
Depreciation and amortization
Amortization of goodwill
Amortization of negative goodwill
Increase (decrease) in accrued pension costs
Increase (decrease) in allowance for doubtful accounts
Interest and dividend income
Interest expenses(Gain) loss on sales of property, plant and equipment
Loss on retirement of property, plant and equipment
Decrease (increase) in trade notes and accounts receivable
Decrease (increase) in inventories
Increase (decrease) in trade notes and accounts payable
Loss on valuation of investment securities
Loss on valuation of membership
Increase (decrease) in provision for environmental measures
Loss on valuation of subsidiaries’ stocks
Loss on liquidation of subsidiaries

2012

2011

2012

¥ 13,382
10,079
42
(11)
75
28
(286)
24
(4)
362
(2,008)
59
1,488
128
11
(16)
28
84

¥19,565
10,178
11
(11)
(258)
17
(227)
19
(26)
494
631
(2,965)
802
45
—
(1)
—
—

$ 162,817
122,634
517
(135)
913
350
(3,486)
302
(59)
4,408
(24,439)729
18,105
1,565
144
(199)
349
1,022

Other, net

1,162

1,012

14,142

SubtotalInterest and dividend income received
Interest expenses paid
Income taxes (paid) refund
Net cash provided by operating activities
Cash flows from investing activities:
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchases of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchases of intangible assets
Purchases of investment securities
Payment of loans receivableCollection of loans receivable
Purchase of investments in subsidiaries resulting in change in scope of consolidation
Other, net
Net cash used in investing activities
Cash flows from financing activities:
Increase (decrease) in short-term borrowings
Cash dividends paid
Purchase of treasury stock
Repayments of lease obligation
Other, net
Net cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Increase in cash and cash equivalents from newly consolidated subsidiaries
Cash and cash equivalents at end of year (Note 10)24,631259(24)(5,955)
18,91029,286219(19)(6,178)23,307

299,684
3,154(302)(72,454)
230,082(7,991)
5,136(8,760)
70
(636)
(2)
(56)
43
—
(65)
(12,262)(8,185)
8,002(8,237)
293
(508)
(5)
(20)
67
(1,332)
0(9,926)(97,236)
62,495(106,588)
851(7,747)
(32)
(682)
533
—
(791)
(149,198)(146)(3,002)(1,719)(231)
0(5,099)(700)
848
35,188—¥ 36,036(1)(2,564)(0)(253)
0(2,820)(1,250)9,310
25,387490¥35,188(1,785)(36,525)(20,918)(2,814)0(62,044)(8,519)10,320428,131—$ 438,451

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

30

Millions of yen

Thousands of
U.S. dollars(Note 1)LINTEC ANNUAL REPORT 2012

Notes to Consolidated Financial Statements
LINTEC Corporation and its consolidated subsidiaries
March 31, 2012

1. Summary of Significant Accounting Policies(a) Basis of presenting financial statements
LINTEC Corporation (the “Company”) maintains its accounting records
and prepares its consolidated financial statements in accordance withaccounting principles generally accepted in Japan, which are different incertain respects as to the application and disclosure requirements ofInternational Financial Reporting Standards. The accompanying consolidated financial statements have been compiled from the consolidated
financial statements prepared by the Company as required by the
Financial Instruments and Exchange Law of Japan.
In addition, the notes to the consolidated financial statements include
information which is not required under accounting principles generally
accepted in Japan but is presented herein as additional information.
For the convenience of the readers, the accompanying consolidated
financial statements have been presented in U.S. dollars by translating
all Japanese yen amounts at the rate of ¥82.19=U.S.$1, the prevailingexchange rate as of March 31, 2012.
As permitted under the Financial Instruments and Exchange Law
of Japan, amounts of less than one million yen have been omitted.
As a result, the totals shown in the accompanying consolidated
financial statements do not necessarily agree with the sum of theindividual amounts.
Certain reclassifications of previously reported amounts have been
made to conform to the consolidated financial statements for the year
ended March 31, 2012 presentation.
(b) Consolidation
The accompanying consolidated financial statements include theaccounts of the Company and its 23 significant subsidiaries as of March
31, 2012, but exclude subsidiaries whose total assets, retained earnings,
net sales and net income are not material in relation to the comparable
amounts in these statements. All significant intercompany accounts
and transactions have been eliminated in consolidation.
Goodwill is amortized over periods of the estimated useful economic
lives (mainly 5 years) on a straight-line basis. Negative goodwill incurredprior to the year ended March 31, 2010 is amortized for 5 years on astraight-line basis.
Investments in subsidiaries and affiliates, which are not consolidated
or accounted for by the equity method, are carried at cost. Where there
has been a permanent decline in the value of such investments, theCompany has written down the investments.
Certain subsidiaries are consolidated on the basis of fiscal period
ending December 31, which differ from that of the Company. The
necessary adjustments are made to the financial statements of such
subsidiaries to reflect any significant transactions from their respective
fiscal year ends to March 31.
(c) Foreign currency translation
Receivables, payables and securities denominated in foreign currencies
are converted into Japanese yen at the exchange rates at fiscal year
end. Transaction in foreign currencies is recorded based on theprevailing exchange rate on the transaction dates and the resulting
translation gains or losses are included in statements of income.
In respect of the financial statement items of overseas subsidiaries,
all assets and liabilities accounts are translated into Japanese yen by
applying the exchange rates in effect at the fiscal year end. All income
and expense accounts are translated into Japanese yen by applying the
average exchange rate during the fiscal year.
Translation differences after allocating to minority interest for
portions attributable to minority interest are reported as foreign
currency translation adjustments in a separate component of net assets
in the accompanying consolidated balance sheets.

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

LINTEC ANNUAL REPORT 201231

(m) Provision for environmental measures
The provision for environmental measures is estimated and recorded toprovide for future potential costs, such as costs related to removal anddisposal of toxic substances based on related legal requirements.
(n) Accounting for consumption taxes
Transactions subject to consumption taxes are recorded at amounts
exclusive of consumption taxes.
(o) Cash and cash equivalents
Cash and cash equivalents are composed of cash and time deposits, allof which are low-risk, short-term financial instruments readily convertible into cash.
(p) Research and development costs
Research and development costs are charged to income when incurred.
(q) Income taxes
Deferred tax assets and liabilities are determined based on differences
between financial reporting and tax bases of assets and liabilities andare measured using enacted tax rates and laws that will be in effectwhen the differences are expected to reverse.

(r) Shareholders’ equity
The Corporation Law of Japan provides that an amount equal to 10% of
the amount to be distributed as distributions of capital surplus (otherthan the capital reserve) and retained earnings (other than the legal
reserve) be transferred to the capital reserve and the legal reserve,
respectively, until the sum of the capital reserve and the legal reserve
equals 25% of the common stock account. Such distributions can bemade at any time by resolution of the shareholders, or by the Board of
Directors if certain conditions are met, but neither the capital reserve
nor the legal reserve is available for distributions.
(s) Application of the Accounting Standard for Accounting Changes andError Corrections
The Accounting Standard for Accounting Changes and Error Corrections(Accounting Standards Board of Japan (ASBJ) Statement No. 24,
December 4, 2009) and the Guidance on the Accounting Standard for
Accounting Changes and Error Corrections (ASBJ Guidance No. 24,
December 4, 2009) have been applied to the accounting changes anderror corrections of prior period made on or after the beginning of thisfiscal year.

2. Commitments and Contingent Liabilities
The Company and its consolidated subsidiaries had unused lines of credit for short-term financing aggregating ¥30,364 million (U.S. $369,445
thousand) and ¥30,257 million at March 31, 2012 and 2011, respectively.
3. Inventories
Finished goods and merchandise, work in process, and raw materials and supplies as of March 31, 2012 and 2011 were as follows:
Millions of yen

ASSETS
Finished goods and merchandiseWork in process
Raw materials and supplies
Total

Thousands of
U.S. dollars

2012

2011

2012

¥ 8,754
10,544
7,918¥27,217¥ 8,548
10,441
8,581¥27,571$106,514
128,295
96,344$331,154

4. Notes Maturing as of the End of the Fiscal Year
Notes maturing as of the end of the fiscal year are settled on the clearing date. In addition, accounts receivable and payable with due date that is the last dayof the fiscal year are also settled on the clearing date. As the last day of the current fiscal year was a non-business day of financial institutions, the following
amounts of receivables and payables maturing as of the years ended March 31, 2012 and 2011 were included in the ending balance.
Millions of yen

32

Thousands of
U.S. dollars

ASSETS

2012

2011

2012

Trade notes and accounts receivable
Trade notes and accounts payable¥4,616
7,382¥——$56,165
89,822LINTEC ANNUAL REPORT 2012

5. Selling, General and Administrative Expenses
Major items included in selling, general and administrative expenses for the years ended March 31, 2012 and 2011 were as follows:
Millions of yen

ASSETSTransportation and warehousing expenses
Provision for allowance for doubtful accounts
Salaries and allowances
Provision for retirement benefits
Provision for director’s bonuses
Depreciation
Research and development expenses
Other
Total

Thousands of
U.S. dollars

2012

2011

2012

¥ 4,762
161
5,929
557
30
878
6,154
9,717
¥28,192¥ 5,029
113
5,429
474
93
817
6,017
9,677
¥27,655$ 57,939
1,965
72,145
6,783
374
10,69074,878118,231$343,010

6. Research and Development Expenses
Research and development expenses, all of which were included in selling, general and administrative expenses, for the years ended March 31, 2012
and 2011 were ¥6,154 million (U.S.$74,878 thousand) and ¥6,017 million, respectively.
7. Gain on Sales of Noncurrent Assets
Gain on sales of noncurrent assets was principally related to sales of buildings and structures for the year ended March 31, 2011.
8. Loss on Sales of Noncurrent Assets
Loss on sales of noncurrent assets was principally related to sales of land for the year ended March 31, 2011.
9. Comprehensive Income
Reclassification adjustment and tax effect of other comprehensive income for the year ended March 31, 2012 was as follows:

ASSETSNet unrealized holding gain on securities:
Amount incurred during the fiscal year
Reclassification adjustment
		 Prior to deducting tax effect		Tax effect		 Net unrealized holding gain on securities
Foreign currency translation adjustments:
Amount incurred during the fiscal year
Reclassification adjustment
		 Prior to deducting tax effect		Tax effect		 Foreign currency translation adjustments
Adjustment regarding pension obligations of consolidated overseas subsidiaries:
Amount incurred during the fiscal year
Reclassification adjustment
		 Prior to deducting tax effect		Tax effect		 Adjustment regarding pension obligations of consolidated overseas subsidiaries
Total other comprehensive income

Millions of yen

Thousands of
U.S. dollars

2012

2012

¥   (119)
128
9
5
14

$ (1,453)
1,565
112
65
177

(1,713)—(1,713)—(1,713)(20,851)—(20,851)—(20,851)

(46)
17
(29)
10
(19)
¥(1,718)

(570)
208
(362)
125
(236)
$(20,910)

LINTEC ANNUAL REPORT 201233

10. Cash and Cash Equivalents
Reconciliation between cash and cash equivalents in the consolidated statements of cash flows and cash and deposits in the consolidated balance
sheets as of March 31, 2012 and 2011 were as follows:
Millions of yen

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

Thousands of
U.S. dollars

2012

2011

2012

¥40,907(4,871)¥36,036¥37,403(2,215)¥35,188$497,724(59,272)$438,451

Assets and liabilities related to finance lease transactions newly recognized for the years ended March 31, 2012 and 2011, were ¥115 million(U.S. $1,410 thousand) and ¥231 million, respectively.
11. Leases(Leasee’s accounting)For finance lease transactions that transfer ownership, leased assets recognized as property, plant and equipment are mainly production facilities forthe years ended March 31, 2012 and 2011.
For finance lease transactions that do not transfer ownership, leased assets recognized as property, plant and equipment are mainly production
facilities and vehicles, and those recognized as intangible assets are mainly software for the years ended March 31, 2012 and 2011.
The minimum lease payments under noncancellable operating leases as of March 31, 2012 and 2011 were as follows:
Millions of yen

ASSETS
Due within 1 year
Due after 1 year
Total

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

34

LINTEC ANNUAL REPORT 2012

Thousands of
U.S. dollars

2012

2011

2012

¥101
125
¥227

¥114
53
¥167

$1,2391,525$2,765All of the trade payables –trade notes and accounts payable—are due
within 1 year.
The Company has commitment line contracts with financial
institutions and the borrowings are raised mainly for business activities
and capital investments.
The Group is exposed to liquidity risk from its business-related
obligations and borrowings but the Company and its consolidated
subsidiaries prepare and implement financing plans to manage theliquidity risk.
The Group conducts and manages such transactions based oninternal rules and regulations. Director of administration division is incharge of managing derivative transactions and related reports are
submitted to top management for each case. In addition, the contract
amounts of derivative transactions described below in Note 14,“Derivatives,” does not represent the market risk associated with
derivative transactions.

2. Estimated fair value and other matters related to financial instruments
Carrying value on the consolidated balance sheets as of March 31, 2012 and 2011 along with their fair value and the variance were shown in thefollowing table.
Thousands of
U.S. dollars

Millions of yen

ASSETS

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

Carrying value

Estimated
fair value

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

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

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

—
—
—
—
—

Carrying value

Estimated
fair value

Variance$ 497,724
787,995$ 497,724
787,995$——

20,451(554,966)(16,060)(14,890)(295)

20,451(554,966)(16,060)(14,890)
(295)

—
—
—
—
—

Note: Figures shown in parentheses are liability items.

Millions of yen

ASSETS

2011(1) Cash and deposits(2) Trade notes and accounts receivable(3) Investment securities
Other securities(4) Trade notes and accounts payable(5) Short-term borrowings(6) Accrued income taxes(7) Derivative instruments

Carrying value

Estimated
fair value

Variance¥ 37,403
63,107¥ 37,403
63,107¥——

1,798(44,506)(1,467)(3,557)
1

1,798(44,506)(1,467)(3,557)
1

—
—
—
—
—

Note: Figures shown in parentheses are liability items.

Note 2:	Financial instruments for which obtaining an estimated fair value is deemed to be extremely difficult:

Note 1:	Method of computing the estimated fair value of financial instruments, securities and derivative
instruments(1) Cash and deposits; (2) Trade notes and accounts receivable	Since these items are settled in a short period of time and have estimated fair values that are
virtually the same as the carrying value on the ledger, the carrying value has been used.
(3) Investment securities
	The market value of investment securities is determined by the price of the stock traded on an
exchange market.
(4) Trade notes and accounts payable; (5) Short-term borrowings; (6) Accrued income taxes	Since these items are settled in a short period of time and have estimated fair values that are
virtually the same as the carrying value on the ledger, the carrying value has been used.
(7) Derivative instruments
Please see Note 14, “Derivatives.”

2012
Carrying value¥698

Unlisted Stocks

Millions of yen

Thousands of
U.S. dollars

2011
Carrying value
¥727

2012
Carrying value$8,502The unlisted stocks in the preceding table do not have market values, and as estimating their future cash
flows is deemed to be extremely difficult, they are not included in the above table “(3) Investment securities.”
Note 3:	Planned redemption amounts after the balance-sheet date for held-to-maturity securities andreceivables were as follows:

2012
Within 1 year
¥ 40,643
64,765¥105,409

Cash and deposits
Trade notes and accounts receivable
Total

Millions of yen
2011
Within 1 year
¥ 37,367
63,107¥100,474

Thousands of
U.S. dollars
2012
Within 1 year$   494,508
787,995$1,282,504

13. Marketable and Investment Securities
The carrying value and acquisition cost of other securities as of March 31, 2012 and 2011 were as follows:
Millions of yen

Thousands of
U.S. dollars

Carrying value

Acquisition cost

Unrealized gain
(loss)$11,230——$11,230$ 9,221——$ 9,221$20,451$ 7,528——$ 7,528$10,702——$10,702$18,231$ 3,701——$ 3,701$(1,481)——$(1,481)$ 2,220ASSETS

2012
Description

Securities whose carrying value
exceeds their acquisition cost
Subtotal
Securities whose acquisition costexceeds their carrying value
Subtotal
		TotalStocksBonds
Other
StocksBonds
Other

Carrying value

Acquisition cost

Unrealized gain
(loss)¥   922——¥   922¥   757——¥   757¥1,680¥   618——¥   618¥   879——¥   879¥1,498

¥ 304
—
—
¥ 304
¥(121)——¥(121)¥ 182

LINTEC ANNUAL REPORT 201235

Millions of yen

ASSETS

2011
Description

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

StocksBonds
Other
Stocks
Bonds
Other

Subtotal
		TotalCarrying value

Acquisition cost

Unrealized gain
(loss)¥1,333——¥1,333¥   464——¥   464¥1,798¥   993——¥   993¥   631——¥   631¥1,624

¥ 340
—
—
¥ 340
¥(166)——¥(166)¥ 173

The Company wrote down by ¥128 million (U.S. $1,565 thousand) and ¥45 million against other securities with a remarkable decline in the value ofinvestment for the years ended March 31, 2012 and 2011, respectively.
14. Derivatives
Derivative transactions to which the Company did not apply hedge accounting as of March 31, 2012 and 2011 were as follows:(Currency related)
Millions of yen
2012
Contract amounts
Total

Over 1 year

Estimated
Fair value¥  831
369
287
48

¥—
—
—
—

¥  855
369
287
48

¥(24)
0
0
(0)

¥1,537¥—¥1,561¥(24)

Nature of transaction

Off-market transactions

Forward exchange contracts to:
Sell : U.S. dollars (buy Japanese yen)
Buy : Japanese yen (sell Taiwan dollars)
Buy : Japanese yen (sell U.S. dollars)
Buy : Japanese yen (sell Thai Baht)

Total

Unrealized
gain (loss)

Thousands of U.S. dollars
2012
Contract amounts
Total

Over 1 year

Estimated
Fair value$10,116
4,500
3,498
585

$—
—
—
—

$10,410
4,494
3,497
594

$(293)
61(9)$18,702$—$18,997$(295)Nature of transaction

Off-market transactions

Forward exchange contracts to:
Sell : U.S. dollars (buy Japanese yen)
Buy : Japanese yen (sell Taiwan dollars)
Buy : Japanese yen (sell U.S. dollars)
Buy : Japanese yen (sell Thai Baht)

Total

Unrealized
gain (loss)

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

Millions of yen
2011
Contract amounts

Off-market transactions

Nature of transaction

Total

Over 1 year

Estimated Fair
value

Forward exchange contracts to:
Buy : Japanese yen (sell Taiwan dollars)
Buy : Japanese yen (sell U.S. dollars)

¥100
123

¥—
—

¥100
122

¥(0)
1

¥224

¥—

¥222

¥1

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

36

LINTEC ANNUAL REPORT 2012

Unrealized
gain (loss)

15. Accrued Pension Costs
The Company and its domestic subsidiaries sponsor a corporate pension fund under the Japanese Defined Benefit Corporate Pension Law andretirement plans for their employees. Certain foreign consolidated subsidiaries have defined contribution plans and defined benefit plans.
Actuarial present value of projected benefit obligations and unfunded status as of March 31, 2012 and 2011 were as follows:

Millions of yen

ASSETS
Actuarial present value of projected benefit obligations
Plan assets
Unfunded accrued pension costs
Unrecognized net actuarial loss
Unrecognized prior service cost
Net retirement benefit obligation recognized in the consolidated balance sheet
Prepaid pension costs
Accrued pension costs

Thousands of
U.S. dollars

2012

2011

2012

¥ (32,396)
15,809(16,586)
4,681(1,965)(13,870)44¥ (13,914)¥ (31,989)
15,492(16,497)
5,241(2,512)(13,767)34¥ (13,802)$(394,160)
192,358(201,801)
56,958(23,917)(168,760)
537$(169,297)

Millions of yen

Thousands of
U.S. dollars

Components of pension and severance cost for the years ended March 31, 2012 and 2011 were as follows:

ASSETS
Service cost
Interest cost
Expected return on plan assets
Unrecognized net actuarial loss
Prior service cost
Other
Total

2012

2011

2012

¥1,270
662
(547)
534
(304)
93
¥1,708¥1,190
648
(566)
439
(301)
78
¥1,488$15,457
8,055(6,658)6,506(3,705)
1,136$19,654

Major assumptions at the beginning of each of the years ended March 31, 2012 and 2011 were as follows:

ASSETS
Discount rate
Expected rate of return on plan assets
Allocation method of pension costs
Term of amortization of unrecognized net actuarial loss
Term of amortization of prior service cost

2012

2011

Mainly 2.0%
Mainly 3.5%
Straight-line method
15 years
15 years

Mainly 2.0%
Mainly 3.5%
Straight-line method
15 years
15 years

16. Stock Option Plan
Stock-based compensation expense of ¥9 million (U.S. $120 thousand), ¥20 million were included in selling, general and administrative expenses forthe years ended March 31, 2012 and 2011 respectively.
The following table summarizes contents of stock options as of March 31, 2012:
The first share subscription rights
Name of Company
Date of approval of the Board of Directors
Position and number of grantees
Class and number of stocks
Date of grantCondition and settlement of rights
Period of providing service for stock options
Exercise period

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

LINTEC ANNUAL REPORT 201237

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

38

LINTEC ANNUAL REPORT 2012

The Company
August 9, 2007
Directors, 17
Common stock 9,300 shares
August 24, 2007
Persons who have received allotment of share subscription rights must hold the position of
director of the Company at the time of grant.
—
From August 25, 2007 to August 24, 2027
The Company
August 8, 2008
Directors, 14
Common stock 9,800 shares
August 25, 2008
Persons who have received allotment of share subscription rights must hold the position of
director of the Company at the time of grant.
—
From August 26, 2008 to August 25, 2028
The Company
August 7, 2009
Directors, 14
Common stock 15,000 shares
August 24, 2009
Persons who have received allotment of share subscription rights must hold the position of
director of the Company at the time of grant.
—
From August 25, 2009 to August 24, 2029

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

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

The following tables summarize the scale and movement of stock options for the years ended March 31, 2012 and 2011:(Non-vested stock options)

Stock options outstanding at April 1, 2010
Stock options granted
Forfeitures
Conversion to exercisable stock option
Stock options outstanding at March 31, 2011
Stock options granted
Forfeitures
Conversion to exercisable stock options
Stock options outstanding at March 31, 2012

The first sharesubscription rights

The second sharesubscription rights

The third sharesubscription rights

The forth sharesubscription rights

The fifth sharesubscription rights

The sixth sharesubscription rights

—
—
—
—
—
—
—
—
—

—
—
—
—
—
—
—
—
—

—
—
—
—
—
—
—
—
—

—
—
—
—
—
—
—
—
—

—
14,100—14,100
—
—
—
—
—

—
—
—
—
—
7,600
—
7,600
—

The first sharesubscription rights

The second sharesubscription rights

The third sharesubscription rights

The forth sharesubscription rights

The fifth sharesubscription rights

The sixth sharesubscription rights

6,000
—
—
—
6,000
—
—
—
6,000

5,500
—
—
—
5,500
—
—
—
5,500

9,800
—
—
—
9,800
—
—
—
9,800

15,000———15,000———15,000—14,100——14,100———14,100

—
—
—
—
—
7,600
—
—
7,600

(Vested stock options)

Stock options outstanding at April 1, 2010
Conversion from not exercisable stock options
Stock options exercised
Forfeitures
Stock options outstanding at March 31, 2011
Conversion from not exercisable stock options
Stock options exercised
Forfeitures
Stock options outstanding at March 31, 2012

The following table summarizes the price information of stock options as of March 31, 2012:

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

The first sharesubscription rights

The second sharesubscription rights

The third sharesubscription rights

The forth sharesubscription rights

The fifth sharesubscription rights

The sixth sharesubscription rights¥    1¥    1¥    1¥    1¥    1¥    1

—

—

1,409

1,409

1,412

—

2,788

1,947

1,481

1,726

1,474

1,303

The fair value of stock options granted during the years ended March 31, 2012 and 2011 were valuated by using the Black Scholes option pricing
model with the following assumptions:

Volatility
Expected remaining period
Expected dividend
Risk free interest rate

The fifth sharesubscription rights

The sixth sharesubscription rights

34.9%
10 years
¥ 24
0.9%

35.1%
10 years¥ 40
1.1%

The expected remaining period for stock options is assumed to be the mid-point of the exercise period.

LINTEC ANNUAL REPORT 201239

17. Income Taxes
1. The Company and its consolidated subsidiaries are subject to a number of taxes based on income which, in the aggregate, resulted in a statutory
tax rate of approximately 40.69% in 2012 and 2011. Income taxes of the foreign consolidated subsidiaries are based generally on-the tax rates
applicable in their countries of incorporation. The effective tax rates reflected in the consolidated statements of income for the years ended
March 31, 2012 and 2011 differ from the statutory tax rate for the following reasons:

ASSETS2012

2011

40.69%

40.69%

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

0.49(1.15)
0.28(7.19)(1.85)(1.28)
1.60—(1.61)
29.98%

Millions of yen

Thousands of
U.S. dollars

2012

2011

2012

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

¥   899
249
384
5,562
708
295
98
225
503
8,926
(423)
8,502

$   9,574
1,140
2,352
60,641
6,837
3,258
1,694
2,600
6,935
95,035(2,149)92,886

(169)
(65)
(470)
(259)
(965)
¥6,669

(197)
(70)
(420)
(182)
(871)
¥7,631(2,062)(794)(5,726)(3,160)(11,744)$ 81,141

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

2. The significant components of deferred tax assets and liabilities as of March 31, 2012 and 2011 were as follows:

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

Net deferred tax assets

3. Adjustments of deferred tax assets and liabilities due to the change of statutory tax rate
The “Act on the Partial Revision of the Income Tax Act for the Establishment of a Taxation System Responding to Changes in Economic and Social
Structures” (Act No. 114 of 2011) and the “Act on Special Measures for Securing Financial Resources Necessary to Implement Measures for
Reconstruction from the Great East Japan Earthquake” (Act No. 117 of 2011) were promulgated on December 2, 2011 and the income tax rate is to bechanged accordingly with effect from the fiscal year beginning on April 1, 2012. In accordance with the change, the statutory tax rate, which is used
to calculate deferred tax assets and liabilities, will be as follows depending on when each temporary difference will reverse:
Timing of reversal
April 1, 2012 through March 31, 2015
April 1, 2015 onward

Tax rate
38.01%
35.64%

Due to the change, the net amount of deferred tax assets decreased by ¥716 million (U.S. $8,719 thousand), deferred income taxes increased by¥725 million (U.S. $8,832 thousand), and the amount of tax effect included in net unrealized holding gain on securities of other comprehensive
income decreased by ¥9 million (U.S. $112 thousand) for the year ended March 31, 2012 respectively.

40

LINTEC ANNUAL REPORT 2012

18. Business Combinations
There is no business combination for the year ended March 31, 2012.
19. Asset Retirement Obligations
There is no asset retirement obligation as of March 31, 2012 and 2011.
20. Rental Property
No specific disclosure for rental property has been made at March 31, 2012 and 2011 because of its immateriality.
21. Segment Information
1. Overview of reportable segments(1) Decision procedures for reportable segments
The business segments of our group are subject to periodic review, because each of them provides its own financial information separately fromother business units of our group and the board of directors not only makes a decision on allocation of management resources, but also evaluates theperformance of them.
Our group consists of 6 business segments, each of which develops comprehensive strategies and conducts business activities in overseas anddomestic markets.
Based on product manufacturing methods and similarity of the markets where the products are introduced, we aggregate these businesssegments into 3 distinguishable units, such as “Printing and Industrial Materials Products,” “Electronic and Optical Products,” and “Paper andConverted Products,” to include in this report.
In addition, from the fiscal year ended March 31, 2012, “Healthcare products operations” handled in the segment of “Printing and Industrial
Materials Products” was integrated into “Printing and variable information products operations” in the same segment.
(2) Products and services handled in each segment
Products and services handled in each segment were as follows.
Reportable segments

Main products and services

Printing and Industrial Materials
Products

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

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

Paper and Converted Products

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

2. Method of calculating sales and income (loss), assets, and other items by reportable segment reported
The reported information regarding business segments is processed mostly following the accounting procedures listed in “Significant Accounting
Policies” used as basis for preparing consolidated financial statements.
The profits of the segments reported are based on operating income.
The values for internal sales and transfers conducted between segments are given based on the market price for transactions between consolidated
companies, and on the first cost for transactions within the same company.
3. Information on sales and income (loss), assets, and other items by reportable segment for the years ended March 31, 2012 and 2011 are outlined
as follows:
Millions of yen

ASSETSNet sales
Net sales to external customers
Intra-segment sales and transfers
Total
Segment income
OthersDepreciation and amortization
Amortization of goodwill

2012
Printing andIndustrial Materials
Products

Electric and
OpticalProducts

Paper andConverted
Products

Total

Adjustments

Consolidation¥90,09350¥90,143¥ 5,213¥73,87450¥73,925¥ 3,942¥36,937
16,288¥53,225¥ 4,846¥200,905
16,389¥217,294¥ 14,002¥    —(16,389)¥(16,389)¥    (27)¥200,905—¥200,905¥ 13,975¥ 3,305¥    42¥ 3,978¥    —¥ 2,795¥    —¥ 10,079¥     42¥    —¥    —¥ 10,079¥     42

LINTEC ANNUAL REPORT 201241

Thousands of U.S. dollars

ASSETS2012

Net sales
Net sales to external customers
Intra-segment sales and transfers
Total
Segment income
OthersDepreciation and amortization
Amortization of goodwill

Printing andIndustrial Materials
Products

Electric and
OpticalProducts

Paper andConverted
Products

Total

Adjustments

Consolidation$1,096,159
611$1,096,770$   63,433$898,828
613$899,441$ 47,970$449,414
198,180$647,595$ 58,966$2,444,401
199,405$2,643,806$  170,369$      —
(199,405)$(199,405)$    (336)$2,444,401—$2,444,401$  170,033$   40,211$      517

$ 48,411$      —

$ 34,012$      —$  122,634$      517$      —
$      —$  122,634$      517

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

Millions of yen

ASSETS2011

Net sales
Net sales to external customers
Intra-segment sales and transfers
Total
Segment income
OthersDepreciation and amortization
Amortization of goodwill

Printing andIndustrial Materials
Products

Electric and
OpticalProducts

Paper andConverted
Products

Total

Adjustments

Consolidation¥91,89837¥91,936¥ 7,990¥81,155
38¥81,193¥ 6,732¥39,679
15,638¥55,317¥ 6,129¥212,733
15,714¥228,447¥ 20,852¥    —(15,714)¥(15,714)¥    37¥212,733—¥212,733¥ 20,889¥ 3,513¥    11¥ 3,815¥     —

¥ 2,850¥     —

¥ 10,178¥     11¥    —¥    —¥ 10,178¥     11

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

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

Thousands of U.S. dollars

ASSETS
Sales
Property, plant and equipment

2012
Japan

Asia

Others

Total

Japan

Asia

OthersTotal¥134,953
51,419¥56,352
9,202¥9,5991,652¥200,905
62,273$1,641,968
625,619$685,635
111,961$116,797
20,100$2,444,401
757,681

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

Millions of yen

ASSETS
Sales
Property, plant and equipment

2011
Japan

Asia

OthersTotal¥142,141
51,865¥60,058
8,359¥10,532
1,664¥212,733
61,888Notes: Sales information is based on location of customers and it is classified by country or region.

42

LINTEC ANNUAL REPORT 2012

3. Information by principal customers
Millions of yen

Thousands of
U.S. dollars

2012

2011

2012

¥26,359

Sales¥31,101$320,712

ASSETS
Name of the customer
Sumitomo Chemical Company, Limited

Related reportable segment
Electric and Optical Products

Information on impairment losses on noncurrent assets by reportable segment
There is no impairment loss on noncurrent assets for the years ended March 31, 2012 and 2011.
Information related to the amount of amortization of goodwill and the unamortized amount of goodwill by reportable segment
Millions of yen

ASSETS

Unamortized amount of goodwill

2012
Printing andIndustrial Materials
Products

Electric and
OpticalProducts

Paper andConverted
Products

Total

Consolidation

¥—

¥—

¥—

¥—

¥170

Thousands of U.S. dollars

ASSETS

Unamortized amount of goodwill

2012
Printing andIndustrial Materials
Products

Electric and
OpticalProducts

Paper andConverted
Products

Total

Consolidation

$—

$—

$—

$—

$2,079Notes: Since the Company and its consolidated subsidiaries disclose the same information of the amount of amortization of goodwill in its segment information section, it has been omitted.
Since companies, offices, and factories serve as the base for administrative classification of segment’s assets, no allocation to the segment of the enterprise is done.

Millions of yen

ASSETS

Unamortized amount of goodwill

2011
Printing andIndustrial Materials
Products

Electric and
OpticalProducts

Paper andConverted
Products

Total

Consolidation

¥—

¥—

¥—

¥—

¥202

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

Information on profit arising from negative goodwill by reportable segment
There is no profit arising from negative goodwill for the years ended March 31, 2012 and 2011.
22. Related Party Transactions
The Company and its consolidated subsidiaries have transactions with NP Trading Co., Ltd., a subsidiary of Nippon Paper Group, for the years ended
March 31, 2012 and 2011. The transactions between the companies for the years were as follows:
Millions of yen

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

At year-end
Trade notes and accounts receivable
Trade notes and accounts payable
Other liabilities

Thousands of
U.S. dollars

2012

2011

2012

¥10,774
5,451¥ 11,589
5,776$131,092
66,332Millions of yen

Thousands of
U.S. dollars

2012

2011

2012

¥4,681
2,056
185¥ 3,8102,325
20$56,956
25,016
2,253

These related party transactions took place on terms similar to those with third parties.

LINTEC ANNUAL REPORT 201243

23. Amounts Per Share
Basic net income per share is computed based on net income available for distribution to shareholders of common stock and the weighted average
number of shares of common stock outstanding during each year. Diluted net income per share is computed based on net income available for
distribution to the shareholders and the weighted average number of shares of common stock outstanding during each year, assuming sharesubscription rights. Net assets per share is computed based on net assets excluding share subscription rights and minority interests, and thenumber of shares of common stock outstanding at the respective balance sheet dates.
The amounts per share of net assets and net income as of March 31, 2012 and 2011 and for the years then ended were as follows:
Yen

ASSETSNet assets
Net income (basic)
Net income (fully diluted)

U.S. dollars

2012

2011

2012

¥1,766.60
115.26115.18¥ 1,715.78
180.21
180.11$21.491.40
1.40

24. Short-Term Borrowings, Long-Term Debt and Other Interest-Bearing Debts
Short-term bank loans are represented generally by 30-day or 90-day notes issued by the Company and its consolidated subsidiaries to banks atannual interest rates from 0.47% to 0.84% at March 31, 2012 and from 0.43% to 0.85% at March 31, 2011.
Short-term borrowings as of March 31, 2012 and 2011 consisted of the following:Thousands of
U.S. dollars

Millions of yen

ASSETS
Short-term bank loans
Current portion of long-term debt

2012

2011

2012

¥1,320—¥1,320¥1,42047¥1,467$16,060—$16,060

Millions of yen

Thousands of
U.S. dollars

2012

2011

2012

¥—
—
¥—

¥ 47
(47)
¥ —

$—
—
$—

Millions of yen

Thousands of
U.S. dollars

Long-term debt as of March 31, 2012 and 2011 consisted of the following:

ASSETS
Loans from banks:	Due serially to 2011 at interest rates of 0.46% at March 31, 2011
Less current portion

Other interest-bearing debts as of March 31, 2012 and 2011 consisted of the following:

ASSETS
Short-term lease obligation
Long-term lease obligation

2012

2011

2012

¥204
670

¥215
760

$2,491
8,158

Planned repayment amounts after the balance sheet (March 31, 2012) date for long-term debt and lease obligation are as follows:
Millions of yen

Thousands of U.S. dollars

ASSETS
Lease obligation

2012
Over 1 year
within 2 years

Over 2 years
within 3 years

Over 3 years
within 4 years

Over 4 years
within 5 years

Over 1 year
within 2 years

Over 2 years
within 3 years

Over 3 years
within 4 years

Over 4 years
within 5 years

¥170

¥129

¥103

¥86

$2,070$1,574$1,264$1,047

25. Subsequent Event
The following distribution of retained earnings was approved at a meeting of the board of directors held on May 10, 2012.
Millions of yen

ASSETSCash dividends (¥20 per share)

44

LINTEC ANNUAL REPORT 2012

Thousands of
U.S. dollars

2012

2012

¥1,493$18,176

Management’s Report on Internal Control
over Financial Reporting
Basic Framework of Internal Control over Financial Reporting
Akihiko Ouchi, President & Chief Executive Officer of LINTEC Corporation, and Hitoshi Asai, Director, Senior Managing Executive Officer & Chief
Financial Officer of LINTEC Corporation, are responsible for designing and operating adequate internal control over financial reporting for consolidated
financial statements of LINTEC Corporation and consolidated subsidiaries (the “Company”) in accordance with the basic framework set forth in“Standards and Practice Standards for Management Assessment and Audit concerning Internal Control Over Financial Reporting” issued by BusinessAccounting Council.
Internal control achieves its objectives to a reasonable extent given that all individual components of internal control are integrated and function
as a whole. Internal control over financial reporting for consolidated financial statements may not completely prevent or detect misstatements infinancial reporting.
Scope of Assessment, Assessment Date and Assessment Procedure
We assessed the effectiveness of the Company’s internal control over financial reporting for the accompanying consolidated financial statements asof March 31, 2012 in accordance with the standards for assessment of internal control over financial reporting generally accepted in Japan. For thisassessment, we first evaluated the company-level controls which would have a material impact on the reliability of overall financial reporting on aconsolidated basis. We then selected the process-level controls to be assessed based on the results of the company-level control assessment.
For the process-level control assessment, we evaluated the effectiveness of internal control by analyzing processes in scope, identifying key controlsthat would have a material impact on the reliability of the financial reporting, and assessing the design and operation of such key controls.
We determined the scope of assessment by selecting consolidated subsidiaries based on their materiality of impact on the reliability of financial
reporting. We determined their materiality of impact by considering both quantitative and qualitative aspects. The scope of our process-level control
assessment was determined based on the results of our assessment of company-level controls, which included its 13 consolidated subsidiaries. We
excluded 11 consolidated subsidiaries from the scope of the company-level control assessment since their quantitative and qualitative impacts weredeemed insignificant.
For the purpose of determining the scope of process-level controls assessment, we selected 1 consolidated subsidiary as “Significant Business
Locations,” which contributed approximately two thirds of the Company’s net sales on a consolidated basis for the fiscal year ended March 31, 2011.
For the Significant Business Locations, we primarily included business processes related to sales, accounts receivable, and inventory in the scopeof assessment as the aforementioned accounts were closely associated with the Company’s business objectives. In addition, we included certain
business processes in the scope of assessment not only from “Significant Business Locations” but also from all subsidiaries and affiliates, which wererelated to significant accounts involving estimates and management’s judgment or include high-risk operations and/or transactions, as “businessprocesses with a material impact on financial reporting.”
Assessment Result
Based on the results of our assessment with the above mentioned scope, date and procedures, we concluded that Company’s internal control overfinancial reporting for the accompanying consolidated financial statements as of March 31, 2012 was effective.

LINTEC ANNUAL REPORT 201245

Report of Independent Auditors

46

LINTEC ANNUAL REPORT 2012

LINTEC ANNUAL REPORT 201247