From the President

First, I would like to thank our shareholders and other investors
for their continued support.
In the fiscal year under review, ended March 31, 2011, we
have managed to overcome the effects of the Lehman Shock,which have persisted since fall 2008, to achieve record breaking
operating results. This is thanks to not only the support ofour shareholders and other investors, but also to our various
customers around the world, our suppliers and the support of allof our other stakeholders. I would like to take this opportunity toexpress my deepest gratitude to all of you for your contributions
to LINTEC’s success.
In the fiscal year ending March 31, 2012, we began our new
medium term business plan, LINTEC Innovation Plan III (LIP III),and are progressing forward with the aim of meeting the newgoals we have laid out in this plan. The LINTEC Group is gearing
up for the next leap forward by coming together to aggressively
and boldly advance the key initiatives of this plan as a company
that has continued to improve its profitability and the strength ofits financial base. In closing, I would like to ask our shareholders
and other investors for their continued support.

PAugust, 2011

Akihiko Ouchi
President and CEO

LINTEC ANNUAL REPORT 20119

W e launched the new medium-termbusiness plan, LIP-III, in April 2011.

Net Sales
240¥Billion

220.0

Review of the Fiscal Year under Review
Sales activities were successful and we achieved
record-breaking operating results.
In the fiscal year under review, the global economy trended toward expansion driven

160

by robust demand in emerging countries, particularly those in Asia, and initiatives
implemented around the world to stimulate consumer spending. In Japan, economic

80

conditions recovered supported by the brisk sales of automobiles, a result of the influence of government initiatives providing tax breaks and “eco points” for the purchase

00809

10

11

12 FY
Forecastof automobiles, home electronics, and housing as well as strong exports. However,from the fall, the rebound from the elimination of these initiatives and the effects ofthe strong yen served to decelerate economic growth, bringing the economy to a halt.
In this environment, the Group focused on laying the grounds for future growth24

Operating Income / Net Income

strategies. In accordance with our policy of “gearing up for the next leap,” we ambi-¥Billion

tiously implemented initiatives based on our three key management policies:
strengthen profit base, promote business reform, and focus on future growth.

20.0

As a result of these efforts, consolidated net sales were up 12.4%, to ¥212.7 billion,
1613.1

operating income increased by a substantial 80.4%, to ¥20.9 billion, and net income
also rose greatly, increasing 87.0%, to ¥13.6 billion. In this way, we set record highs for
all three of these management indicators. Further, with regard to the Great East Japan

8Earthquake, which occurred on March 11, 2011, damage to our operating assets were008

09

10Operating Income
Net Income

11

12 FY
Forecast

minimal and the effects on consolidated operating results were immaterial.

Forecasts for the Fiscal Year Ending March 31, 2012
At the moment, we are forecasting increased sales,
but decreased income.
In the fiscal year ending March 31, 2012, we project that the global economy will be
impacted by such factors as the government financial issues and sluggish consumer
spending seen in Europe and the United States, as well as by the monetary tightening
in China and other emerging countries. Meanwhile, in the post-earthquake Japanese
economy, we are anticipating increased consumption following the renewal of production activities and the improvement in the prevailing mood of self-restraint shown bybusiness and consumers alike. However, the combined effects of the strong yen andthe electricity shortages in Japan have made the operating environment highly unclear.
Under these conditions, we launched the new medium-term business plan, LIP-III,in April 2011. This plan covers a three-year period and outlines four key initiatives.
We are currently aggressively implementing a variety of measures based on theseinitiatives. With regard to consolidated business result forecasts for the fiscal year

10

LINTEC ANNUAL REPORT 2011

P
sales of ¥220.0 billion, a 3.4% year-on-year increase; operating income of ¥20.0

Targets for major indicatorsin the final year of LIP III,the fiscal year ending March 31, 2014

billion, a 4.3% decrease; and net income of ¥13.1 billion, a 3.8% decrease.

(on a consolidated basis)

ending March 31, 2012, while the effects of the earthquake and other factors are
extremely difficult to predict, our current forecast anticipates the Group achieving net

Net sales

LIP-III—the New Medium-Term Business Plan
We will practice more-proactive management,
strengthening and expanding overseas operations
and aggressively conducting capital investment.

260.0bn¥

Operating income

26.0bnThe basic policy behind LIP-III is to “achieve sustainable growth and maximize corporate¥

value through aggressive and bold innovation.” In accordance with this policy, we plan topursue innovation and revolution more aggressively and boldly than ever before. We will

Operating income margin

also persistently implement more-proactive management by fully utilizing our manage-

10%

ment resources. In this way, we plan to conduct capital investments totaling more thanmore than¥40.0 billion over the three-year period. Through these initiatives, we aim to meettargets for the fiscal year ending March 31, 2014, the final year of the plan, of net sales ofROE (Return on Equity)

10%¥260.0 billion, operating income of ¥26.0 billion, an operating income margin of over 10%,more thanreturn on equity (ROE) of over 10%, and return on invested capital (ROIC) of over 10%.
The four key initiatives that the Group is working to address under LIP-III are

ROIC (Return on Invested Capital)

described below.

10%

more than1	Strengthen and expand overseas businesses(Targeted overseas sales ratio: 40%)
In order for the LINTEC Group to achieve sustainable growth, exploring additional
business opportunities in overseas markets is of the utmost importance. We areNumerical Targets
Net Sales

currently working to develop optimal production and sales systems in Asian markets,
which are showing high levels of growth and are anticipated to become the driving
force behind the global economy in the future. We are also steadily exploring opportu-300¥Billion

30¥Billion

260.0

nities in other new growth markets.
(1)	Develop optimal production and sales systems with a particular focus on

Operating Income

26.0

212.7

20.9

200

20100

10

Asian markets	 – Respond to increased demand for adhesive films in Chinese markets	 – Conduct sales promotion activities in South East Asian and Indian markets(2) Explore new growth markets	 – Develop a sales network and consider the construction of new production bases

01114 FY

01114 FYPrinting and Industrial Materials ProductsElectronic and Optical Products
Paper and Converted Products

LINTEC ANNUAL REPORT 201111

W e plan to pursue innovation andrevolution more aggressively andboldly than ever before.

2	Expand domestic businesses and increase profitability by optimizing QCD
LINTEC is expanding domestic businesses and bolstering their profitability byincreasing its competitiveness with regard to QCD (quality, cost, and delivery) factors.
Specifically, we are optimizing the Group’s logistics systems by utilizing supply chain
management, conducting continuing cost reduction project through means suchas reducing inventories by consolidating product lines, actively introducing highly
functional, highly efficient production facilities through the “build and scrap” approach,and reforming inefficient and unprofitable businesses.
(1) Continue to promote the CRP (Cost Reduction Project)	 – Optimize the Group’s logistics systems by utilizing supply chain management(2)	Actively introduce highly functional and highly efficient production facilities	 – Integrate production facilities through the “build and scrap” approach andother methods(3)	Reorganize and reconstruct domestic production bases and subsidiaries	 – Revise the activities and operations of inefficient and unprofitable businesses, etc.
(4)	Increase the market share of existing businesses and develop new applications	 – Respond to the maturing of the domestic market

3	Create original new products that will support the next generation
Leveraging LINTEC’s unique technological development capabilities, we are progressively developing one-of-a-kind products that stand at the top of their class. Specifically,
we are developing next-generation PV materials and other environmentally friendly
products as part of our lineup of environment- and energy-related products. Further,
we are developing highly functional electronics- and optical device-related products
by utilizing our core adhesive and surface improvement technologies.
(1)	Environment- and energy-related products	 – Develop next-generation PV materials	 – Promote the development of environmentally friendly products(2)	Electronics- and optical device-related products	 – Develop highly functional products utilizing adhesive and surface improvement
technologies, etc.

12LINTEC ANNUAL REPORT 2011

P
4 Strengthen global management
We are continuing the project of evolving our information system infrastructure,
and are working to introduce this infrastructure into overseas Group companies.
We believe that this will allow us to expedite the decision making process of management, while developing more standard and efficient workflow processes throughout
the Group. Further, we are implementing strategy and investment judgments thatinclude a new focus on ROIC. At the same time, we are fostering human resourcesand encouraging skill development with the goal of enabling the Company to continue
to globalize and grow. Additionally, we are promoting corporate activities based on
CSR management through such efforts as achieving ISO26000 compatibility andexercising the ideals of the UN Global Compact.
(1)	Evolve information infrastructure and deploy it to Group companies	 – Introduce this infrastructure quickly into Group companies both domesticallyand overseas(2)	Implement strategy and investment judgments that include a new focus on ROIC	 – Track clearly how much income is generated by capital invested in the business(3)	Continually foster human resources and develop abilities	 – Foster human resources and encourage skill development to enable the Company

Basic policy
Achieve sustainable growth andmaximize corporate value throughaggressive and bold innovation
Key initiatives
1. Strengthen and expand overseas
businesses (Targeted overseas
sales ratio: 40%)
2. Expand domestic businesses andincrease profitability by optimiz
ing QCD
3. Create original new products thatwill support the next generation
4. Strengthen global management

to continue to globalize and grow(4)	Promote corporate activities based on CSR management	 – Achieve ISO26000 compatibility and exercise the ideals of the UN Global Compact

CSR and Corporate Governance
We are conducting CSR management based on international
standards and strengthening corporate governance throughthe introduction of an executive officer system.
The Company views CSR as one of the most important issues for management.
Going forward, we aim to contribute to society as a strong and vigorous company
that is well trusted.
For this reason, we have established the CSR Management Office, which reports
directly to the President. In addition, we have established six CSR subcommittees—on Corporate Ethics; Investor Relations; Customer Satisfaction; EnvironmentalPreservation; Social Contribution; and Safety, Disaster Prevention, and Health—which consist of members from all areas of the Company. These organizations
implement a wide variety of CSR activities. Through these efforts, we will continue
to promote corporate management that balances its responsibilities toward theeconomy, the society, and the environment.

LINTEC ANNUAL REPORT 201113

W e aim to contribute to society

as a strong and vigorous company
that is well trusted.

In the fiscal year under review, we worked to reduce usage and emissions of substances that impact the environment, and developed and increased sales of productsthat reflect consideration for the environment. We also took part in social contribution
activities closely linked to local communities, such as participating in cleanup activities
in the areas around our operating bases and providing support for people withdisabilities. Further, we provided victims of the Great East Japan Earthquake with
monetary relief and support. Moreover, we have enhanced and thoroughly instituted
corporate ethics training and disseminated a sound understanding of good corporate
ethics. Additionally, in March 2011, we declared our intention to participate in the UN
Global Compact. In the fiscal year ending March 31, 2012, we will continue to act inaccordance with our policy of conducting CSR management based on international
standards, as represented by such efforts as the previously mentioned achievementof ISO26000 compatibility.
In regard to corporate governance, the Board of Directors consists of 8 directors
and 2 external directors. It works to ensure speedy management decisions and business advancement amid the fluctuating management environment based on theprinciples of holding Board of Directors meetings and management meetings once

General Meeting of Shareholders
Appointment / Dismissal

Appointment /Dismissal

Appointment /Dismissal

Management decision

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

ReportingBoard of Directors(Directors)

Guidance /Promotion

President
Management Meeting(Directors andExecutive Officers)

Operational executionLINTEC ANNUAL REPORT 2011

Cooperation

Cooperation

Administrative,Marketing,Production, andTechnical Divisions;
Domestic andOverseas Subsidiaries

14

Account /Operational
Auditing

Statutory
Auditors’Meeting

Internal
Auditing

Audit Office(InternalControl)

Independent
Auditors

Account
Auditing

Internal
Control
Auditing

Pa month. Accordingly, we are working to develop optimal management strategies.
Additionally, LINTEC employs a statutory auditor system, and ensures swift management and the effectiveness of its auditing systems. The Statutory Auditors’ Meeting isheld monthly in principle. In this meeting, by sharing the results of the business audits
performed by each auditor, the auditors confirm the appropriateness and effectivenessof the decisions and operational execution of the Company’s management.
In June 2011, we introduced an executive officer system with the goal of separating
important management decision making processes from operational execution,
decreasing the number of directors, invigorating the Board of Directors, and improving
management efficiency through swift decision making. Moreover, LINTEC will continue
to ensure swift decision making, management transparency, enhanced management
oversight systems, and thorough compliance by strengthening its internal control
systems and risk management systems.

Shareholder Returns
In the fiscal year ending March 31, 2012, we intend to issue
dividend payments of ¥40 per share, the same as in the fiscal year
under review.
LINTEC’s basic policy on the appropriation of profits is to increase business earnings
and strengthen the Company’s financial position from a long-term perspective while
paying dividends that reflect consolidated business results. Acting in accordance withthis policy, we are working to increase shareholder returns.
In the fiscal year under review, we had initially intended to issue dividend paymentsof ¥30 per share, higher than the previous fiscal year’s dividend payments of ¥24 pershare. However, our consolidated business results greatly exceeded our initial forecasts
due to higher-than-expected net sales and the effects of cost reduction measures onincome. Based on this, we decided to raise both the interim and year-end dividends byCash Dividends per Share¥5 per share, from ¥15 to ¥20 per share, making for a total annual cash dividend of¥40 per share.

45

¥40.0

In regard to dividends in the fiscal year ending March 31, 2012, we currently intend
to issue dividend payments of ¥40 per share, the same as in the fiscal year underreview. Going forward, we will continue to target sustainable growth and higher income

30

with the hopes of offering more substantial shareholder returns.
15

008

09

10

11

1 2 FY
Forecast

LINTEC ANNUAL REPORT 201115