Consolidated Financial Results for the Fiscal Year Ended March 31, 2010
May 14, 2010

Company Name:
Dai Nippon Printing Co., Ltd.
Stock exchange listings:
Tokyo, Osaka
Ticker code:
7912
URL: http://www.dnp.co.jp/
Representative:
Yoshitoshi Kitajima, President
Contact person:
Yoshio Kanbe, General Manager, Press and Public Relations
Telephone:+81-3-5225-8220
General meeting of shareholders: June 29, 2010
Dividend payment date: June 30, 2010
Securities report issuing date: June 29, 2010
*Amounts under one million yen have been rounded down.

1. Consolidated financial results for the year ended March 31, 2010
(1) Consolidated financial results(Percentages show change from corresponding year-ago period.)
Net Sales

Operating Income

Ordinary Income

Net Income (Loss)

Million yen%

Million yen%

Million yen%

Million yen%

Year ended March 31, 2010

1,583,382(0.1)

66,51344.0

68,841

45.3

23,278‐Year ended March 31, 2009

1,584,844(1.9)

46,177(47.0)

47,390(45.2)(20,933)‐

Net Income (Loss)
per Share

Diluted Net Income
per Share

ROE

Ordinary
Income toTotal Assets

Operating
Income to
Net Sales

Yen

Yen

%

%

%

Year ended March 31, 2010

36.13

‐

2.6

4.4

4.2

Year ended March 31, 2009(32.35)

‐

(2.2)

3.0

2.9

Reference: Equity in earnings or losses of affiliates:

Year ended March 31, 2010: ¥(102) million
Year ended March 31, 2009: ¥(1,247) million(2) Consolidated financial position
Total Assets

Net Assets

Net Assets
per Share

Equity Ratio

Million yen

Million yen%

Yen

As of March 31, 2010

1,618,853

956,86356.6

1,422.34

As of March 31, 2009

1,536,556

940,08558.5

1,393.91

Reference: Stockholdersʼ equity as of March 31, 2010: ¥916,324 million

As of March 31, 2009: ¥898,174 million(3) Consolidated cash flows
Cash Flows fromOperating Activities

Cash Flows from
Investing Activities

Cash Flows from
Financing Activities

Cash and Cash
Equivalents at Endof the Year

Million yen

Million yen

Million yen

Million yen

As of March 31, 2010

140,574(120,683)

13,126

151,709

As of March 31, 2009

131,569(100,726)(33,951)

117,200

1

2. Dividends
Dividends per Share (Yen)First
SecondThird
quarter-end quarter-end quarter-end

Record dateYear-end

Annual

Total
Dividends(Annual)(Million yen)

Dividend
Payout Ratio(Consolidated)(%)

Dividends to
Net Assets
Ratio(Consolidated)(%)

Year ended March 31, 2009

‐

18.00

‐

14.00

32.00

20,636‐

2.2

Year ended March 31, 2010

‐

16.00

‐

16.00

32.00

20,63388.6

2.3

Year ending March 31, 2011

‐

16.00

‐

16.00

32.00

(Forecast)

63.4

3. Consolidated forecasts for the year ending March 31, 2011
(Percentages show change from corresponding year-ago period.)
Net Sales

Operating Income

Ordinary Income

Net Income
per Share

Net Income

Million yen%

Million yen%

Million yen%

Million yen%

Yen

Six months ending
September 30,
2010

800,000

3.7

36,00040.6

35,00040.4

15,500

95.6

24.06

Full year

1,640,000

3.6

75,00012.8

73,0006.0

32,500

39.6

50.45

4. Other information(1) Changes in significant subsidiaries during the period (Changes in specified subsidiaries
resulting in a change in the scope of consolidation): None
(2) Changes in accounting policies, procedures and methods of presentation for preparing theconsolidated financial statements. (Notes on Changes in significant accounting policies applied in
the preparation of the consolidated financial statements)
1) Changes due to revision of accounting standard, etc.: Yes
2) Changes due to other reasons: None
Note: Please refer to page 26, “Significant matters concerning the preparation of the consolidated
financial statements” for further details.
(3) Number of common shares issued and outstanding
1) Number of common shares outstanding at end of each period (including treasury stocks)
As of March 31, 2010: 700,480,693 shares
As of March 31, 2009: 700,480,693 shares
2) Number of treasury shares at end of each period
As of March 31, 2010: 56,241,763 shares
As of March 31, 2009: 56,123,617 shares
Note: Please refer to page 34, “Per share information” for the number of common shares at fiscal
year-end used for the calculation of consolidated net income (loss) per share.

2

(Reference) Non-consolidated financial results
1. Non-consolidated financial results for the year ended March 31, 2010
(1) Non-consolidated financial results(Percentages show change from corresponding year-ago period.)
Net Sales

Operating Income

Ordinary Income

Net Income (Loss)

Million yen%

Million yen%

Million yen%

Million yen%

Year ended March 31, 2010

1,086,701(1.7)

11,633(2.8)

42,278

11.9

10,121‐

Year ended March 31, 2009

1,105,429(6.3)

11,968(57.5)

37,772(16.3)(19,973)‐

Net Income (Loss)
per Share

Diluted Net
Incomeper Share

Yen

Yen

Year ended March 31, 2010

15.70

‐

Year ended March 31, 2009(30.84)‐(2) Non-consolidated financial position
Total Assets

Net Assets

Net Assets per
Share

Equity Ratio

Million yen

Million yen%

Yen

As of March 31, 2010

1,270,358

697,53954.9

1,081.85

As of March 31, 2009

1,205,056

694,92757.7

1,077.61

Reference: Stockholdersʼ Equity as of March 31, 2010: ¥697,539 million

As of March 31, 2009: ¥694,927 million* Explanation regarding appropriate use of earnings forecasts and other special notes
The forecasts shown above include forecasts based on assumptions, projections, and plans at the time thisreport was prepared. Actual results may differ from the forecasts owing to risks and uncertainties related toeconomic conditions that affect the Companyʼs businesses, market trends, and changes in foreign currency
exchange rates, for example.

3

1. Operating results(1) Analysis of operating results1) Operating results for the year ended March 31, 2010
Economic conditions in Japan were very challenging. Although there were some signs ofrecovery from government economic stimulus measures and a rebound in demand in emerging
countries, business investment declined and employment remained sluggish because of thedelayed recovery of the global economy.
The business environment surrounding the printing industry worsened, due to such factors as
weak demand and unit price declines stemming from intensified competition.
Under such conditions, the DNP (Dai Nippon Printing Co., Ltd.) Group has been aggressively
developing its business and providing products, services, and solutions that meet customer
needs, based on a business vision of P&I Solutions (P&I stands for “printing technology” and“information technology”). In addition, DNP has made groupwide efforts through its “Production
21” Activities to establish a solid production structure in terms of all aspects, such as quality, cost,
and turnaround times, and has worked hard to maintain positive performance.
As a result, consolidated net sales decreased 0.1% over the previous fiscal year to ¥1,583.3
billion, consolidated operating income rose 44.0% to ¥66.5 billion, consolidated ordinary income
rose 45.3% to ¥68.8 billion, and consolidated net income improved to ¥23.2 billion (from theyear-ago net loss of ¥20.9 billion).
The results by segment are as follows.

PRINTING
Information Communication
In the Books and Magazines business, book and magazine printing sales declined as a result of a
prolonged slump in the publications market. In the Commercial Printing business, sales werelower year on year because of a decline in sales of printing of flyers, pamphlets, and point ofpurchase displays, as a result of advertising budget cuts stemming from deteriorating corporate
earnings.
In the Business Forms business, sales of continuous business forms for use with computers
declined, but overall sales increased year on year thanks to increased sales from information
processing services (ranging from data entry to printing and shipment of personal mail) and theprinting of smart cards and stylus-based digital forms for capturing handwritten information as
digital data.
Acquisition-driven growth in the Educational Publications Distribution business also
contributed to the segmentʼs sales growth.
As a result of the above, overall sales in the Information Communication segment increased
3.0% year on year to ¥739.6 billion, but operating income declined 25.9% to ¥23.4 billion.

Lifestyle and Industrial Supplies
In the Packaging business, sales were lower year on year because of a decline in sales of flexible
packaging, paper containers, and aseptic filling systems for PET bottles.
In the Lifestyle Materials business, DNP made efforts to increase sales of eco-friendly
products that use its proprietary EB (Electron Beam) coating technology, but overall sales

4remained weak because of a prolonged slump in housing demand.
In the Industrial Supplies business, sales of ink ribbons and receiver paper for photo printers
as well as back sheet film for solar power systems decreased, but overall sales rose year on year
because of increased sales of anti-glare film used in flat-panel displays.
As a result of the above, overall sales in the Lifestyle and Industrial Supplies segment
decreased 2.8% year on year to ¥536.6 billion, but operating income increased 119.5% to ¥43.7
billion.

Electronics
In the LCD color filter business, a decline in unit prices had an impact, but sales rose year on
year thanks to an increase in order volume, owing to growth in demand for LCD panels, andcontributions from the startup of a 10th-generation color filter plant in Sakai, Osaka Prefecture.
The semiconductor-related market started to show signs of a rebound, albeit a weak one. Salesof photomasks contracted. Sales of high-density build-up circuit boards declined, but sales ofetched products for hard drive suspensions and other applications increased.
As a result of the above, overall sales in the Electronics segment increased 0.6% year on
year to ¥257.5 billion and operating income increased 222.7% to ¥8.3 billion.

BEVERAGES
Beverages
Amid tough market conditions, characterized by a slump in consumer spending and intensified
sales competition, DNP worked hard to increase sales of Coca-Cola and Georgia, both coreproducts, and I LOHAS, a brand of water that uses “ecoru Bottle Shiboru,” Japanʼs lightest bottle.
Sales of carbonated beverages and mineral water increased, but sales of tea and coffee drinks
decreased.
As a result, overall sales in the Beverages segment decreased 12.4% year on year to ¥62.8
billion and operating losses totaled ¥500 million (versus the year-ago operating income of ¥300
million).

2) Forecast for the year ending March 31, 2011
For the fiscal year ending March 31, 2011, DNP intends to further develop its business vision of
P&I Solutions and do everything it can to provide products and services that solve customersʼ
problems. Todayʼs uncertain economic outlook calls for the innovation of new products andservices. The DNP Group is working to solve various issues that are apparent by looking atsocietal changes and needs from the perspective of consumers. The Company also intends todevelop its “Production 21” Activities to solidify the base for promoting its P&I Solutions; improve
productivity further; and generate solid earnings and stable, long-term business growth.
For the fiscal year ending March 31, 2011, DNP presently forecasts consolidated net sales of¥1,640.0 billion, operating income of ¥75.0 billion, ordinary income of ¥73.0 billion, and net
income of ¥32.5 billion.

5(2) Analysis of financial position
Total assets at the end of the current fiscal year increased ¥82.2 billion from the end of theprevious fiscal year to ¥1,618.8 billion primarily because of increases in notes and tradereceivable and investment securities.
Total liabilities increased ¥65.5 billion from the end of the previous fiscal year to ¥661.9 billion
primarily because of a rise in bonds.
Net assets increased ¥16.7 billion from the end of the previous fiscal year to ¥956.8 billion
primarily because of an increase in net unrealized gains on available-for-sale securities.
As a result of the above, the equity ratio declined 1.9 percentage points from the end of theprevious fiscal year to 56.6%.
Consolidated cash flow provided by operating activities totaled ¥140.5 billion (¥131.5 billion
in the previous fiscal year) primarily because of ¥49.4 billion in income before income taxes andminority interests and ¥91.6 billion in depreciation.
Cash flow used in investing activities totaled ¥120.6 billion (¥100.7 billion in the previous
fiscal year) mainly because of the acquisition of ¥108.5 billion of property, plant and equipment,
and cash flow provided by financing activities totaled ¥13.1 billion (¥33.9 billion of cash flowused in the previous fiscal year) due to ¥50.0 billion of proceeds from the issuance of bonds, a¥10.1 billion decrease in short-term bank loans and ¥19.6 billion of dividend payments. Becauseof these activities, DNPʼs cash and cash equivalents at the end of the fiscal year increased by¥34.5 billion from the end of the previous fiscal year to ¥151.7 billion.
The trends in the DNP Groupʼs cash flow indicators are shown below.
Year ended

Year ended

Year ended

Year ended

Year ended

March 2006

March 2007

March 2008

March 2009

March 2010

64.0

63.0

62.6

58.5

56.6

90.3

75.7

65.5

37.7

50.3

0.5

0.6

0.5

0.9

1.2

106.2

93.8

120.1

79.7

63.9

Equity ratio (%)
Market value-based
equity ratio (%)
Debt-to-cash flow ratio(year)
Interest coverage ratio(times)Note: The following indicators are calculated based on consolidated financial figures.
*Equity ratio:

Total stockholdersʼ equity / Total assets*Market value-based equity ratio:

Market capitalization / Total assets

Market capitalization:

Fiscal year-end share price x fiscal year-end number of shares
outstanding (excluding treasury stock)*Debt-to-cash flow ratio:
Interest-bearing debt:

Interest-bearing debt / Cash flow
All liabilities on the consolidated balance sheet that accrue interest
chargesCash flow:

Cash flow provided/used by operating activities on the consolidated
statements of cash flows*Interest coverage ratio:
Cash flow:

Cash flow / Interest expenses
Cash flow provided/used by operating activities on the consolidated
statements of cash flows

Interest expenses:

Interest expenses on the consolidated statements of cash flows

6(3) Basic policies regarding the allocation of profits and dividends for the year ended
March 31, 2010 and year ending March 31, 2011
An important policy of the Company is to pass on profits to shareholders.
Profits are allocated based on a policy of paying stable dividends to shareholders and withconsideration for financial results and the dividend payout ratio. For future business expansion,
the Company strives to retain profits and strengthen its financial constitution and management
base.
Retained earnings are used to invest in research and development related to new products
and technologies, to invest in equipment needed for developing new businesses, and to
implement strategic alliances, including mergers and acquisitions. At the same time, theCompany considers flexible capital policies while also taking into consideration market trends
as well as its need for capital. The Company believes that these efforts will contribute to higher
profits that can then be passed on to shareholders in the future.
Based on this policy, the Company intends to pay a year-end dividend of ¥16 per share,
which together with the interim dividend of ¥16 per share brings the full-year dividend to ¥32 pershare, the same as in the previous fiscal year. The consolidated dividend payout ratio comes to
88.6%.
The forecast dividend for the fiscal year ending March 31, 2011 is ¥32 per share, the total ofa ¥16 interim dividend and a ¥16 year-end dividend.

(4) Business risks
The performance and the results of DNP could be significantly affected by a variety of factors
and circumstances that might arise in the future. Because DNP is aware of these risk factors, its
policy is to strive to minimize their potential effects.
The followings are the major factors that the DNP management views as risks.
1) The Japanese economy and consumption trends
DNP engages in a wide range of businesses with an extremely large number of corporate
customers. We conduct our business so as not to be overly dependent on specific customers.
We do most of our business in the Japanese market; overseas sales account for about 12% of
net sales. Nevertheless, if consumer spending and other components of domestic demand
slump, owing to domestic economic weakness in sympathy with global economic trends,
declines in order volume and unit prices may affect our corporate performance.
2) Changes in the electronics market
We position our Electronics segment as a strategic sector for future expansion. We intend tosecure steady profits in this segment by focusing on building business strategies based on acareful compilation of information, establishing profitable production system, and thedevelopment of highly competitive, added-value products. However, the market for display
components and semiconductor products is subject to sudden changes. It is possible that thesegmentʼs performance could be affected by sudden changes affecting products that we handle,
such as dramatic fluctuations in demand or a plunge in unit prices.

73) Fluctuations in raw material procurement
We work hard to secure stable supplies and maintain optimal price by procuring raw materials
such as printing paper and film from multiple suppliers in Japan and overseas. However, there issome potential for temporary imbalances between supply and demand due to factors like spikes
in petroleum prices or sudden surges in demand from emerging markets. We intend to copewith such instances by negotiating with our customers and business partners. However, if itshould become extremely difficult to secure supplies, or if purchasing prices rise markedly, it ispossible that DNPʼs corporate performance could be affected.
4) Development of new products and technologies and services
The DNP Group uses its printing and information technologies to develop and provide to abroad range of industries products, technologies, and services that meet the needs of corporate
customers and consumers. In recent years, the pace of technological innovation in these areas
has become faster than ever, and customersʼ needs have been rapidly diversifying. We believethat in the future, competition in the area of product development will become more intense thanever before, and it is possible that DNPʼs performance could fluctuate significantly due tounforeseeable changes in market trends or a shortening of product life cycles.
5) Currency fluctuations
Particularly in fields such as Electronics, and Lifestyle and Industrial Supplies, we are
expanding our dealings in products and services with overseas customers. Because we expect
the effects of currency rates to gradually become more important, we use such means asforeign exchange forward contracts to hedge the risks of currency fluctuations. Nevertheless, it
is possible that radical swings in currency values could have a more serious effect on our
corporate performance.
6) Legal regulations, etc.
We conduct our business based on strict compliance with the law and social ethics. Wherever
we operate, in Japan or overseas, we are subject to a wide variety of legal regulations andrestrictions, including laws related to product liability, monopoly prohibitions, the protection of
personal information, patents, taxes, imports and exports, etc. We can imagine that in the futuresuch regulations could become even more restrictive. Market and industry trends may change
substantially as a result of deregulation. If that should occur, it is possible that DNPʼs businessperformance could be affected by limitations on its business activities, the burden of responding
to the changes, or increased costs.
7) Environmental protection and stricter regulations
The DNP Group is affected by laws and regulations in Japan and other countries regarding
energy conservation, the use of harmful substances, the prevention of air pollution, water quality
protection and waste treatment, and product recycling. Such regulations may be strengthened
because of the impact of global climate trends. In addition, if soil is contaminated by harmful
substances and the Company is faced with the situation of being responsible for assessing andcleaning up the environmental pollution, then the Companyʼs business could be substantiallyaffected.
8) Information system security
With computer networks and information systems playing an ever-greater role in keeping
business activity going, the risks of information system malfunctions, breaches of personal8

information, and other events, owing to software and hardware problems and viruses, haverisen. The DNP Group regards the protection of data and personal information as a top priority.
It is doing all it can to protect and maintain systems and data by strengthening its organizationand training employees, but if problems arise in these areas, then business activity could be
affected.
9) Disasters
We take steps to protect our production equipment and other major facilities from being
damaged by disasters such as fires or earthquakes. In addition, we divide our work among
multiple production bases and make every effort to prevent disasters from causing production
stoppages or disturbances in our ability to supply products. We also use various types of
insurance to transfer risk. Nevertheless, if major earthquakes, terrorist attacks, the spread of
diseases, and other unexpected developments arise and lead to production stoppages or major
damage or interference with the social infrastructure, then our corporate performance could besubstantially affected.

92. Information on the Dai Nippon Printing Group (DNP Group)
The DNP Group includes 156 subsidiaries and 13 affiliated companies. Its two main businesses
are Printing and Beverages. The former encompasses Information Communication, Lifestyleand Industrial Supplies, and Electronics.
The businesses and segments of the DNP Group are outlined below.
PRINTING
Information Communication
Production of textbooks, books, weekly/monthly/quarterly magazines, advertisements, stockand other securities certificates, business forms, and cards; manufacture/sale of businessequipment and systems; and planning/design/construction/management of stores andadvertising media
Major companies
Production
OGUCHI BOOK BINDING & PRINTING CO., LTD.
DNP AV Center Co., Ltd., DNP SP Tech Co., Ltd.
DNP Offset Co., Ltd., DNP Graphica Co., Ltd.
DNP Seihon Co., Ltd., DNP Digitalcom Co., Ltd.
DNP Data Techno Co., Ltd., DNP Data Techno Kansai Co., Ltd.
DNP Total Process Nagaoka Co., Ltd.
DNP Total Process Maebashi Co., Ltd.
DNP Total Process Warabi Co., Ltd.,DNP Corporate History Center Co., Ltd.
DNP Butsuryu Systems Shouin Co., Ltd.
DNP Multi Print Co., Ltd., DNP Media Art Co., Ltd.
DNP Media Create Co., Ltd., DNP Media Create Kansai Co., Ltd.
DNP Uniprocess Co., Ltd.
Production and sales Tien Wah Press (Pte.) Ltd.
Sales and services
CHI Group Co., Ltd., Junkudo Co., Ltd., Direc Co., Ltd.
DNP Art Communications Co., Ltd., DNP Dream Pages Co., Ltd.
TRC, Inc., MyPoint.com Japan Co., Ltd., Maruzen Co., Ltd.
*BOOKOFF CORPORATION LIMITEDBUNKYODO GROUP HOLDINGS CO., LTD.
SHUFUNOTOMO Co., Ltd.
Kyoiku Shuppan Co., Ltd.
The shares of CHI Group Co., Ltd. and BOOKOFF CORPORATION LIMITED are traded on theTokyo Stock Exchange, and the shares of BUNKYODO GROUP HOLDINGS CO., LTD. aretraded on the Osaka Securities Exchangeʼs JASDAQ market.

10Lifestyle and Industrial Supplies
Manufacture/sale of containers and packaging products, packaging equipment and systems,
interior and exterior construction materials, photographic materials, and industrial supplies
Major companies
Production
Sagami Yoki Co., Ltd., DNP IMS Co., Ltd.
DNP IMS Odawara Co., Ltd.
DNP Energy System Co., Ltd., DNP Ellio Co., Ltd.
DNP OptoMaterials Co., Ltd., DNP Lifestyle Materials Co., Ltd.
DNP Technopack Co., Ltd., DNP Technopack Kansai Co., Ltd.
DNP Technopack Tokai Co., Ltd.
DNP Technopack Yokohama Co., Ltd.
DNP Techno Polymer Co., Ltd.
Production and sales Aseptic Systems Co., Ltd.
DNP Fine Chemicals Fukushima Co., Ltd.
DNP Hoso Co., Ltd., PT DNP Indonesia
DNP Electronics America, LLC, DNP IMS America Corporation
DNP Denmark A/S, DNP IMS Netherlands B.V.
DNP Plastic Molding (Shanghai) Co., Ltd.
Sales and services
DNP ID System Co., Ltd.
DNP Lifestyle Materials Marketing Co., Ltd.
DNP Photo Imaging Co., Ltd., DNP Fotolusio Co., Ltd.
LIFESCAPE MARKETING CORPORATIONDNP Photo Imaging America Corporation
DNP Photo Imaging Corporation SAS
DNP Photo Imaging Europe SAS

Electronics
Manufacture/sale of precision electronic components and other products
Major companies
Production
DNP LSI Design Co., Ltd., DNP Color Techno Sakai Co., Ltd.
DNP Fine Electronics Co., Ltd., DNP Precision Devices Co., Ltd.
DNP Precision Devices Himeji Co., Ltd.
DNP Micro Technica Co., Ltd.
Production and sales DNP Color Techno Kameyama Co., Ltd., DAP Technology Co., Ltd.
DT Fine Electronics Co., Ltd., DNP Photomask Europe S.p.A.
DNP Photomask Technology Taiwan Co., Ltd.
Sales and services
DNP Taiwan Co., Ltd., DNP Display Technology Taiwan Co., Ltd.

Other companies with multiple types of businesses
Production and sales DNP Hokkaido Co., Ltd., DNP Tohoku Co., Ltd.
DNP Tokai Co., Ltd., DNP Shikoku Co., Ltd.
DNP Nishinippon Co., Ltd., DNP Fine Chemicals Co., Ltd.
D.N.K. Co., Ltd.
*DIC Graphics Corporation
Sales and services
DNP Trading Co., Ltd., DNP Logistics Co., Ltd.
DNP Accounting Services Co., Ltd., DNP Facility Services Co., Ltd.

11

DNP Information Systems Co., Ltd., DNP Human Services Co., Ltd.
DNP Corporation USA, DNP America, LLC
DNP Holding USA Corporation

BEVERAGES
Beverages
Centered on Hokkaido Coca-Cola Bottling Co., Ltd.; manufacture/sale of soft drinks and juices
The shares of Hokkaido Coca-Cola Bottling Co., Ltd. are traded on the Tokyo Stock
Exchange and Sapporo Securities Exchange.
* Equity-method affiliated companies

12

3.

13

Management policies(1) Core policies
The DNP (Dai Nippon Printing Co., Ltd.) Group has been striving to contribute to society byproviding new value-added products and services based on a management concept ofcontributing to the sustainable growth of the society and the emergently evolving society of the
21st century.
With a business vision of P&I Solutions (P&I stands for “printing technology” and “information
technology”), the DNP Group aims to expand and contribute to an emergently evolving society
by bringing together printing technology and information technology and finding and solving
various problems for many people, including customers and consumers.
To promote fair and appropriate corporate activity and carry out its corporate social
responsibilities, DNP has established the DNP Group Code of Conduct and strictly complies
with laws and social ethics. The Company also has developed a system of internal controls andstrives to conduct business appropriately. The Company strives to conduct business in goodfaith so as to earn the high trust of shareholders, customers, consumers, employees and otherstakeholders.

(2) Medium- and long-term management strategy and key issues
The DNP Group aims to steadily expand over the long term, based on its P&I Solutions
business vision, and strives to conduct business in good faith, in recognition of its
responsibilities to society as a corporation.
DNP has begun redeveloping the Ichigaya district as a measure to further promote its P&I
Solutions and ensure future growth. DNP was established in 1876 as Shueisha. Since building
its Ichigaya Plant (in the current Shinjuku district of Tokyo) in 1886, the Company has been
based in this area and expanded into various businesses. Under a redevelopment plan, theCompany aims to consolidate in the Ichigaya district the planning and development, sales, andhead office functions of different divisions that are located in the Tokyo metropolitan area;
develop new businesses; and reorganize manufacturing and logistics and integrate
manufacturing facilities to achieve optimization from an overall perspective. The plan isscheduled to be completed by 2018.

Initiatives in the different businesses and segments
Information Communication
The segment seeks the most optimal expressions of companiesʼ and consumersʼ needs,
engages in a broad range of initiatives to expand into electronic publishing for various types of
information devices and other types of media, and provides various products and services.
In the Educational Publications Distribution business, CHI Group Co., Ltd. was established in
February 2010 as a holding company for the integration of consolidated subsidiary Maruzen Co.,
Ltd. and TRC, Inc. The segment brings together the expertise of group companies, including
consolidated subsidiary Junkudo Co., Ltd., and the DNP Groupʼs products and services;enhances bookstoresʼ sales strategies; promotes the use of smart cards and IC tags at collegeand public libraries; strives to rejuvenate the educational publications distribution market; andcontributes to the strengthening of the DNP Groupʼs core business, book and magazine printing.
In the Books and Magazines, Commercial Printing, and Business Forms businesses, DNP
has been striving to improve the quality of its earnings further by strengthening the structure of14

comprehensive management, coordinating the various prepress, printing, and processing
operations, developing a lean production structure, and improving the efficiency of distribution.
In the Commercial Printing business in the Kanto and Kansai areas, DNP has been integrating,realigning, and restructuring its organization. In addition to developing new advertising methods,
including digital signage (using large electronic displays) and organic EL (electroluminescentposters with voice capabilities. DNP has strengthened partnerships with Intelligent Wave Inc. (asubsidiary as of April 9, 2010, following a tender offer) and taken a number of initiatives toexpand its information security businesses.

Lifestyle and Industrial Supplies
The segment faces weak demand for packaging because of the slump in consumer spending,but focuses on various types of functional materials, such as IB (innovative barrier) film, which
provides a very strong barrier against vapor and oxygen and is optimal for food,medical/pharmaceutical, and electronic material packaging applications. The material is used inpackaging for Japanese food for astronauts. The segment is also working on universal design
initiatives and developing packaging that is easier to use.
The housing markets in Japan and other countries will probably remain weak, but the Lifestyle
Materials focuses on comfortable and healthy living and strives to increase sales of eco-friendly
products with outstanding design, durability, and practicality. The products use DNP's own
electron beam coating technology, which is well regarded in the industry.
In the Industrial Supplies business, DNP aims to expand in the anti-glare film and otheropto-materials area, where it has a high market share, given the growing flat-panel display
market. In addition, DNP is striving to increase its output capacity, improve product quality, andstrengthen its cost competitiveness because demand for color ink ribbons and barcode ink
ribbons is likely to increase as digital photography becomes even more widespread.

Electronics
In this segment, DNP is working to increase output capacity and develop new technologies andproducts so as to be able to adapt to fast-changing market conditions.
In the LCD color filter business, changes in demand, declines in unit prices, and otherchanges in industry conditions are likely, but the DNP Group aims to win more orders for filters
for PC monitors and TVs as well as make its production operations more flexible to meet market
demand. A new 10th-generation color filter plant in Sakai, Osaka Prefecture started up this fiscal
year, and a new 8th-generation color filter plant in Himeji, Hyogo Prefecture is scheduled to startup the fiscal year ending March 2011. DNP is strengthening its partnerships with customers andexpanding its business.
In the photomask business, semiconductor prices are likely to be volatile, but DNP has beendeveloping cutting-edge technologies, strengthening its cost competitiveness, and establishinga profitable production structure, including a new Taiwanese plant that started up early in thefiscal year ending March 2011, to meet overseas demand.

New businesses
In new business areas, DNP is working on developing businesses to generate new added value,such as services and products with outstanding functionality to address the problems of15

companies and consumers.
In the energy field, DNP has been meeting demand for solar cells and lithium-ion batteries
mainly with a plant in Izumizaki, Fukushima Prefecture that produces back sheets and sealants
for solar cells.
In the life sciences (pharmaceutical, medical, and health care) field, DNP has taken a numberof business initiatives. It commercialized CytoGraph®, Japanʼs first cell pattern culturing
substrate, and also developed, in partnership with Tokyo Womenʼs Medical University and
CellSeed Inc., technologies for efficiently producing cell sheet culturing film for regenerative
medicine.

BEVERAGES
Beverages
With the market shrinking because of weak consumer spending, the beverage industry is likely
to continue to face challenging conditions, partly because of intensifying competition fromindustry reorganization.
Under such conditions, DNP has been integrating area and channel strategies and trying toincrease its market share based on its medium-term plan, titled “Restart 2009: Along with theNorth Earth.” At the same time, it has strived to make its operations more efficient andstrengthen its cost competitiveness. As part of its goal of becoming an environmentallytrustworthy company, DNP aims to acquire ISO 140001:2004 certification of its environmental
management system.

Strengthened organization
Along with enhancing the DNP Groupʼs overall strengths by strengthening collaboration acrossdivisions in the group even further, DNP is striving to promote broad solutions, including
proposals for customersʼ business strategies and marketing plans, through dialogue andcollaboration.
In order to reinforce established businesses and quickly develop new ones, the DNP Group
recognizes that it cannot rely only on its own technologies but needs to work with othercompanies with their own strengths. DNP has strategically partnered with other companies andmerged with or acquired others in the electronic product and photo businesses, among others,
and intends to aggressively look for similar opportunities in Japan and other countries based on
this strategy.
On October 1, 2009, DNP consolidated its domestic ink businesses by splitting off the printing
ink business of subsidiary The Inctec Inc. (its name changed to DNP Fine Chemicals Co., Ltd. inJanuary 2010) and forming DIC Graphics Corporation, a joint venture with DIC Corporation,
Japanʼs largest printing ink company.
To restructure costs, DNP is improving productivity by revamping its business processes andstreamlining production processes, cutting material costs, and establishing a strong production
structure with a continual focus on profitability. Since 2002, DNP has made groupwide efforts
through its “Production 21” Activities and generated solid results in terms of becoming stronger.
Under the theme of overall optimization, the DNP Group regards the flow from orders to delivery
as an integrated whole and strives to smooth out flows between processes and across divisions,
make the production system more efficient by eliminating as much waste as possible, improve
product quality, and become more cost competitive.

16

Contributions to a sustainable society
DNPʼs various environmental initiatives to contribute to a sustainable society that coexists withnature include the establishment of a proprietary environment management system, measures
to prevent global warming, the protection of biodiversity (region-specific nature and living things),
zero waste emissions, the management of volatile organic solvents and chemical substances,and product development and green purchases with the above factors in mind.
This fiscal year, DNP switched from heavy oil to municipal gas at its Shiga Plant as part of its
efforts to reduce carbon dioxide emissions. At the Izumizaki Plant, DNP switched from LPG toliquefied natural gas and installed a solar power generation system. The Company alsoestablished a DNP Group Biodiversity Declaration to further promote efforts to protect
biodiversity.

174. Consolidated financial statements(1) Consolidated balance sheets(Million yen)
Year ended March 31, 2009
(As of March 31, 2009)

Year ended March 31, 2010
(As of March 31, 2010)

123,569
405,8768
73,372
29,707
17,566
10,27821,048(5,280)676,149

152,416
449,020
8
71,34029,722
17,756
9,775
14,238(4,327)739,951

491,602(292,336)
199,265
907,428(723,538)
183,890132,888
57,756
119,167(88,064)
31,103604,904

508,518(301,261)
207,256
896,479(717,352)
179,127
135,485
51,433136,047(92,502)43,544
616,847

24,09920,053
4,696
48,85010,281
20,4893,945
34,717

113,448
3,015
50,01551,923(12,484)
205,917859,672

142,381
1,741
40,57454,702(13,668)
225,731
877,296

735
735
1,536,556

1,605
1,605
1,618,853

ASSETS
Current assets
Cash and time deposits
Notes and trade receivable
Marketable securities
Merchandise and finished products
Work in progress
Raw materials and supplies
Deferred income taxes
Other
Allowance for doubtful accounts
Total current assets
Fixed assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Machinery and equipment
Accumulated depreciation
Machinery and equipment, net
LandConstruction in progress
Other
Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible fixed assets
Goodwill
Software
Other
Total intangible fixed assets
Investments and other assets
Investment securities
Long-term loans
Deferred income taxes
Other
Allowance for doubtful accounts
Total investments and other assets
Total fixed assets
Deferred assets
Business startup costs
Total deferred assets
TOTAL ASSETS

18

(Million yen)
Year ended March 31, 2009
(As of March 31, 2009)

Year ended March 31, 2010
(As of March 31, 2010)

290,871
59,875
2,898
7,891
16,186
92,075
469,799308,630
50,547
4,019
15,623
16,34176,783471,945

51,00010,4903,352
41,451
20,377
126,671

101,167
11,0182,710
43,22931,917
190,045596,471

661,990

114,464
144,898
751,869(93,884)
917,348

114,464
144,898
756,428(94,016)
921,774(3,882)(4)(15,285)

8,059
(10)
(13,498)(19,173)(5,449)40,538956,863
1,618,853

LIABILITIESCurrent liabilities
Notes and trade payable
Short-term bank loans
Current portion of long-term debt
Income taxes payable
Reserve for bonuses
Other
Total current liabilities
Long-term liabilities
Bonds
Long-term debt
Deferred tax liabilities
Provision for retirement benefits
Other
Total long-term liabilities
TOTAL LIABILITIESNET ASSETSStockholdersʼ equity
Common stock
Capital surplus
Retained earnings
Treasury stock
Total stockholdersʼ equity
Valuation and translation adjustments
Net unrealized gains (losses) on
available-for-sale securities
Net deferred losses on derivatives
Foreign currency translation adjustments
Total valuation and translation
adjustments
Minority interests
TOTAL NET ASSETSTOTAL LIABILITIES AND NET ASSETS

41,910940,085
1,536,556

19

(2) Consolidated statements of income(Million yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Subsidies
Other
Total non-operating income
Non-operating expenses
Interest expense
Equity in losses of associated companies
Foreign exchange transaction losses
Contributions
Other
Total non-operating expenses
Ordinary income
Extraordinary gains
Gain on sale of fixed assets
Gain on sale of investment securities
Change of equity interest
Other
Total extraordinary gains
Extraordinary losses
Loss on sale or disposal of fixed assets
Impairment loss on fixed assets
Loss on devaluation of investment securities
Loss on sale of securities in affiliates
Loss on devaluation of securities in affiliates
Loss on revision of retirement benefits plan
Amortization of goodwill
Other
Total extraordinary losses
Income (Loss) before income taxes andminority interests
Current income taxes
Deferred income taxes
Income and other taxes
Minority interests
Net income (loss)

20

Year ended
March 31, 2009
1,584,844
1,324,522
260,322
214,144
46,177

Year ended
March 31, 2010
1,583,382
1,286,682
296,700
230,186
66,513

1,393
2,770
2,326
5,137
11,626

736
2,460
4,065
5,099
12,361

1,666
1,247
2,003
‐
5,496
10,41347,390

2,363
102
116
1,553
5,897
10,033
68,841

214
373
531
4
1,124

1,007
45
‐
270
1,323

6,954
50,69013,615
58
330
144
1,859
2,703
76,357

7,093
377
1,196
0
3
‐
11,063935
20,669(27,842)
15,374(20,857)(5,482)(1,427)(20,933)

49,49522,061
3,699
25,761455
23,278

(3) Consolidated statements of changes in net assets(Million yen)

Year ended
March 31, 2009
Stockholdersʼ equity
Common stock
Balance at previous fiscal year end
Balance at current fiscal year end
Capital surplus
Balance at previous fiscal year end
Balance at current fiscal year end
Retained earnings
Balance at previous fiscal year end
Net increase resulting from changes of fiscal
year end in consolidated subsidiaries

Changes of items during the period
Cash dividends paid
Net income (loss)
Change of scope of consolidation
Increase due to stock transfer
Disposal of treasury stock
Total changes of items during the period
Balance at current fiscal year end
Treasury stock
Balance at previous fiscal year end
Changes of items during the period
Purchase of treasury stock
Disposal of treasury stock
Other
Total changes of items during the period
Balance at current fiscal year end
Total stockholdersʼ equity
Balance at previous fiscal year end
Net increase resulting from changes of fiscal
year end in consolidated subsidiaries

Changes of items during the period
Cash dividends paid
Net income (loss)
Change of scope of consolidation
Increase due to stock transfers
Purchase of treasury stock
Disposal of treasury stock
Other
Total changes of items during the period
Balance at current fiscal year end

21

Year ended
March 31, 2010

114,464
114,464

114,464
114,464

144,898
144,898

144,898
144,898

797,316363

751,869(24,849)(20,933)‐‐(27)(45,809)751,869(19,346)
23,278
192
441
(7)
4,558
756,428(66,556)(93,884)(27,424)89
7(27,327)(93,884)

(153)
20
‐
(132)
(94,016)

990,122

917,348363‐(24,849)(20,933)‐‐(27,424)62
7(73,137)
917,348(19,346)
23,278
192
441
(153)
13
‐
4,426
921,774‐(Million yen)

Year ended
March 31, 2009
Valuation and translation adjustments
Net unrealized gains (losses) on
available-for-sale securities
Balance at previous fiscal year end

Year ended
March 31, 2010

10,610(3,882)

Changes of items during the period
Net changes in items other thanstockholdersʼ equity
Total changes of items during the period(14,492)

11,942(14,492)

11,942

Balance at current fiscal year end(3,882)

8,059

7

(4)

(11)

(6)

(11)
(4)

(6)
(10)

2,120

(15,285)(17,406)

1,787(17,406)(15,285)

1,787(13,498)

12,738(19,173)(31,911)

13,723(31,911)(19,173)

13,723(5,449)37,274

41,910Changes of items during the period
Net changes in items other thanstockholdersʼ equity
Total changes of items during the period

4,635(1,371)

4,635(1,371)

Balance at current fiscal year end

41,91040,538Net deferred gains (losses) on derivatives
Balance at previous fiscal year end
Changes of items during the period
Net changes in items other thanstockholdersʼ equity
Total changes of items during the period
Balance at current fiscal year end
Foreign currency translation adjustments
Balance at previous fiscal year end
Changes of items during the period
Net changes in items other thanstockholdersʼ equity
Total changes of items during the period
Balance at current fiscal year end
Total valuation and translation adjustments
Balance at previous fiscal year end
Changes of items during the period
Net changes in items other thanstockholdersʼ equity
Total changes of items during the period
Balance at current fiscal year end
Minority interests
Balance at previous fiscal year end

22

(Million yen)

Year ended
March 31, 2009

Year ended
March 31, 2010

Total net assets
Balance at previous fiscal year end

1,040,135

940,085363‐

Cash dividends paid

(24,849)(19,346)

Net income (loss)
Change of scope of consolidation(20,933)‐

23,278Net increase resulting from changes of fiscal year
end in consolidated subsidiaries

Changes of items during the period

192

‐

441

Purchase of treasury stock(27,424)(153)

Disposal of treasury stock

62

13

Other
Net changes in items other thanstockholdersʼ equity
Total changes of items during the period

7‐(27,275)

12,351(100,412)

16,777940,085

956,863

Increase due to stock transfers

Balance at current fiscal year end

23

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

Year ended
March 31, 2009
Cash flows from operating activities
Income (loss) before income taxes and minority
interests
Depreciation
Impairment loss on fixed assets
Decrease of doubtful receivables, net
Increase (Decrease) of provision for retirement
benefits, net
Equity in losses of associated companies
Amortization of consolidation goodwill, net
Interest and dividend income
Interest expense
Net gains on sales of marketable securities andinvestment securities
Net losses on devaluation of investment securities
Net losses on disposal of fixed assets(Increase) Decrease in trade receivables
Decrease in inventories
Increase (Decrease) in trade payables
Other
Sub-total
Payment of income taxes
Net cash provided by operating activities
Cash flows from investing activities
Net (increase) decrease in time deposits
Proceeds from sales of marketable securities
Payments for purchases of property, plant andequipment
Proceeds from sales of property, plant and equipment
Payments for purchases of investment securities
Proceeds from sales of investment securities
Payments for purchases of subsidiary stocks
Payments for business transfer
Interest and dividends received
Other
Net cash used in investing activities

24

Year ended
March 31, 2010

(27,842)
106,882
50,690(522)

49,49591,694377(79)(3,111)

2,262

1,247
6,406
(4,163)
1,666

102
16,219(3,196)
2,363

(373)

(52)

13,946
6,739
56,8274,370(42,200)(4,037)

1,199
6,085
(39,672)
1,969
17,8992,776

166,526(34,957)
131,569

149,446(8,872)
140,574(14)
10,9806,130‐(95,555)(108,595)

3,307(8,200)1,387(2,082)(6,528)4,173(8,193)(100,726)

2,556(13,456)
7,047(5,639)(49)
3,163(11,841)(120,683)

(Million yen)

Year ended
March 31, 2009
Cash flows from financing activities
Net increase (decrease) in short-term bank loans
Proceeds from long-term debt
Repayments of long-term debt
Proceeds from issuance of bonds
Payments for redemption of bonds
Interest paid
Dividends paid
Dividends paid to minority interests
Payments for purchases of treasury stock
Payments for purchases of treasury stock ofsubsidiaries
Other
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Net increase in cash and cash equivalents from newly
consolidated subsidiaries
Cash and cash equivalents at end of year

25

Year ended
March 31, 2010

23,323
4,961(6,563)‐(100)(1,650)(24,831)(421)(27,424)(10,119)
3,340(3,484)50,000(217)(2,201)(19,360)
(323)
(153)

(10)
(1,234)(2)(4,352)(33,951)

13,126(10,386)889(13,495)
130,695

33,905
117,200‐

604

117,200

151,709

Notes on premise of a regarding going concern
None

Significant matters concerning the preparation of the consolidated financial
statements
1. Scope of consolidation and application of the equity method of accounting(1) Number of consolidated subsidiaries: 125
Major companies:

CHI Group Co., Ltd., Hokkaido Coca-Cola Bottling Co., Ltd.
Junkudo Co., Ltd., DNP Color Techno Kameyama Co., Ltd.
DNP Nishinippon Co., Ltd., DNP Fine Chemicals Co., Ltd.
DNP Photo Imaging Co., Ltd., DNP Logistics Co., Ltd.

(2) Number of equity-method affiliated companies: 11
Major companies:
BOOKOFF CORPORATION LIMITEDBUNKYODO GROUP HOLDINGS CO., LTD. , Kyoiku Shuppan Co.,
Ltd. SHUFUNOTOMO Co.,Ltd., DIC Graphics Corporation

2. Changes in scope of consolidation and application of the equity method of
accounting(1) Scope of consolidation
Newly included:

23

CHI Group Co., Ltd. and 22 other companies

Excluded:

6

DNP Fine Electronics Sagamihara Co., Ltd. and five othercompanies(2) Application of equity method
Newly included:
5
Excluded:

4

BOOKOFF CORPORATION LIMITED and four other companies
ELIIY Power Co., Ltd. and three other companies

3. Matters concerning the fiscal years of consolidated subsidiaries
Of the consolidated subsidiaries, Hokkaido Coca-Cola Bottling Co., Ltd. and 28 others have fiscal years
that end on December 31, while CHI Group Co., Ltd. and 22 others have fiscal years that end on January
31. Their financial statements as of the same date are used in the preparation of these consolidated
financial statements, and any material transactions in the time until the consolidated fiscal year-end dateare adjusted for on a consolidated basis.

4. Summary of significant accounting policies(1) Criteria and methods for valuing significant assets
・Marketable securities
Other securitiesThose with market prices

Fair market value based on market prices as of the balance

available

sheet date
(The related valuation differences are directly included in net
assets and the sale prices computed by the moving-averagemethod.)26

Those without market
prices available

Mainly cost based on the moving-average method

・Derivatives

Mainly fair market value

・Inventories

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

Merchandise

Mainly cost based on the specific identification method

Finished products, work in

Mainly cost based on the retail inventory cost method

progress
Raw materials

Mainly cost based on the moving-average method

Supplies

Mainly cost based on the most recent purchase method(2) Depreciation and amortization of significant assets
・Property, plant and equipment The Company and its domestic consolidated subsidiaries use(except for lease assets)
the declining balance method.
However, depreciation of machinery and equipment at theKurosaki Plant No. 1 (2nd-Stage plant), Plant No. 3 and Sakai
Plant is computed by the straight-line method.
Depreciation of buildings (excluding building fixtures) acquired
after April 1, 1998, is computed by the straight-line method.
Assets with an acquisition cost of at least ¥100,000 and lessthan ¥200,000 are depreciated mainly over three years by thestraight-line method.
Foreign consolidated subsidiaries mainly use the straight-line
method.
・Intangible fixed assets

Mainly the straight-line method(except for lease assets)

Software used internally is amortized using the straight-line
method over the Companyʼs estimate of the useful life of theassets (not more than five years).

・Lease assets

Lease assets with a transfer of ownership
These lease assets are depreciated using the same method as
for fixed assets owned by the Company.
Lease assets with no transfer of ownership
These lease assets are depreciated over the lease period using
the straight-line method with no residual value.
Lease assets based on lease agreements that do not involve atransfer of ownership to the lessee and with lease start dates
before the initial applicable fiscal year under the AccountingStandard for Lease Transactions (Accounting Standards Boardof Japan (the “ASBJ”) Statement No. 13) are accounted forbased on the method for ordinary rental transactions.

27

(3) Treatment of significant deferred assets
Some consolidated subsidiaries have capitalized business startup costs as deferred assets andamortize them over five years using the straight-line method.

(4) Basis for recording significant allowances
・Allowance for doubtful accounts To cover possible losses on doubtful accounts, the allowancefor doubtful accounts is based on historical default rates fornormal accounts and on estimates of the amounts that may not
be recoverable for specific overdue accounts.
・Reserve for bonuses

To cover payments of employee bonuses in the following fiscal
year, the reserve for bonus is based on the estimated amountthat is attributable to the current fiscal year.

・Reserve for bonuses todirectors

To cover payments of directorsʼ bonus in the following fiscal
year, the reserve for bonuses is based on the estimated amountthat is attributable to the current fiscal year.

・Provision for retirement
benefits

To cover future payments of employee retirement benefits,provisions for employeesʼ retirement benefits are based on an
amount incurred by the fiscal year-end based on estimatedretirement benefit liabilities and pension plan assets at the endof the fiscal year.
Prior service costs are amortized using the straight-line method
over a certain number of years that is equal to or less than the
average future service period of eligible employees at the time
the costs are incurred (generally six years).
Actuarial gains/losses are amortized beginning in the fiscal year
in which the gains/losses are recognized and using thestraight-line method over a certain number of years that isequal to or less than the average future service period of
eligible employees at the time the actuarial gains/losses are
incurred (generally nine years).
Change in accounting standards
Starting with the current fiscal year, the Company has adopted
the partial revisions of accounting standards for retirement
benefits (Accounting Standards Board of Japan (the “ASBJ”)
Statement No. 19, July 31, 2008).
There is no impact on profits and losses as a result.

・Provision for accrued directorsʼ
retirement benefits

For payments of directorsʼ retirement benefits, domestic
consolidated subsidiaries record a fiscal year-end required
amount based on internal regulations.

28

(5) Accounting treatment of consumption taxes
National and local consumption taxes are excluded from transaction amounts.

(6) Consolidated subsidiariesʼ assets and liabilities
Consolidated subsidiariesʼ assets and liabilities are all valued using the fair value method.

(7) Amortization of goodwill and negative goodwill
Goodwill and negative goodwill are amortized in a straight line over a period of not more than 20 years.
In the current fiscal year, straight-line amortization over five years is generally used.

5. Scope of funds in the statements of cash flows
Cash and cash equivalents in the consolidated statements of cash flows are short-term investments withan original maturity of three months or less, are subject to insignificant risk of changes in value, and canbe easily converted into cash and drawable funds as needed.

29Notes regarding consolidated financial statements
Consolidated balance sheets

1. Guarantee of debt
2. Discounts on notes receivableYear ended
March 31, 2009
¥92 million

Year ended
March 31, 2010
¥77 million¥670 million¥670 million

Year ended
March 31, 2009
¥34,111 million

Year ended
March 31, 2010
¥33,849 million

Consolidated statements of income

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

Consolidated statements of changes in stockholdersʼ equity
The year ended March 31, 2009 (April 1, 2008 – March 31, 2009)
1. Types and number of shares outstanding, type and number of treasury shares(Shares)

Outstanding shares

Stock type

Number ofshares at theend of theyear ended
March 2008

Common stock

700,480,693

Decrease in
number ofsharesduring theyear ended
March 2009

Increase in
number ofsharesduring theyear ended
March 2009‐‐

Number ofshares at theend of theyear ended
March 2009

700,480,693

Treasury stock
Common stock
39,114,316
17,231,279
221,978
56,123,617
Notes:
1.
The increase of 17,231,279 treasury shares is due to the repurchase of 16,656,000 shares, as
authorized by the Board of Directors, the repurchase of 119,279 odd-lot shares, and thepurchase of 456,000 shares at the request of stockholders.
2.
The decrease of 221,978 treasury shares (common shares) is due to the sale of 53,103
odd-lot shares and the companyʼs share of 168,875 treasury shares sold by affiliatedcompanies accounted for by the equity method.

2. Detailed information regarding dividends(1) Dividends paid
Resolution
General meeting ofshareholders on
June 27, 2008
Board of Directorsʼ
meeting on
November 14, 2008

Stock type

Total dividends(Million yen)

Dividend pershare (Yen)Dividend
record date

Effective dateCommon stock

13,24120

March 31,2008

June 30, 2008

Common stock

11,60818

September 30,
2008

December 10,
2008(2) Of dividends for which the record date belongs to the current fiscal year, those thatcome into effect in the following fiscal year
Resolution

Stock type

Total
dividends(Million yen)

General meeting ofshareholders on
June 26, 2009

Common stock

9,028

Source ofdividends
Retainedearnings

30

Dividend
per share
(Yen)

14

Dividend
record date

Effective date

March 31,2009

June 29, 2009

The year ended March 31, 2010 (April 1, 2009 – March 31, 2010)
1. Types and number of shares outstanding and treasury stock(Shares)

Outstanding shares

Stock type

Number ofshares at theend of theyear ended
March 2009

Common stock

700,480,693

Decrease in
number ofsharesduring theyear ended
March 2010

Increase in
number ofsharesduring theyear ended
March 2010‐‐

Number ofshares at theend of theyear ended
March 2010

700,480,693

Treasury stock
Common stock
56,123,617
130,495
12,34956,241,763
Notes:
1.
The increase of 130,495 treasury shares is due to the repurchase of odd-lot shares.
2.
The decrease of 12,349 treasury shares is due to the sale of odd-lot shares.

2. Detailed information regarding dividends(1) Dividends paid
Resolution
General meeting ofshareholders on
June 26, 2009
Board of Directorsʼ
meeting on
November 13, 2009

Stock type

Total dividends(Million yen)

Dividend pershare (Yen)Dividend
record date

Effective dateCommon stock

9,028

14

March 31,2009

June 29, 2009

Common stock

10,31716

September 30,
2009

December 10,
2009(2) Of dividends for which the record date belongs to the current fiscal year, those thatcome into effect in the following fiscal year
Resolution

Stock type

Total
dividends(Million yen)

General meeting ofshareholders on
June 29, 2010

Common stock

10,316

Source ofdividends
Retainedearnings

31

Dividend
per share
(Yen)

16

Dividend
record date

Effective date

March 31,2010

June 30, 2010

Segment information
1. Business segment information
The year ended March 31, 2009 (April 1, 2008 – March 31, 2009)(Million yen)

I Net sales andOperating income(loss)Net sales(1) Outside customers(2) Inter-segment
Total
Operating expenses
Operating income
II Assets,
depreciation,
impairment loss andcapital expenditures
AssetsDepreciation
Impairment loss
Capital expenditures

Information
Communication

Lifestyle andIndustrial
Supplies

Electronics

Beverages

711,275
7,150
718,425
686,735
31,690545,915
5,905
551,821531,905
19,916

255,9678
255,975
253,397
2,577

71,68545
71,731
71,408322

619,079
25,204
1,798
27,988513,092
29,512
48
29,718329,042
46,03948,692
34,27043,394
3,506
150
2,834

Elimination
and/orcorporate

Consolidated

1,584,844
13,1091,597,953
1,543,447
54,506‐(13,109)(13,109)(4,780)(8,329)1,584,844‐
1,584,844
1,538,667
46,177

1,504,608
104,263
50,69094,812

31,948
2,619
‐
1,344

1,536,556
106,882
50,69096,156Total

The year ended March 31, 2010 (April 1, 2009 – March 31, 2010)(Million yen)

I Net sales andOperating income(loss)Net sales(1) Outside customers(2) Inter-segment
Total
Operating expenses
Operating income
II Assets,
depreciation,
impairment loss andcapital expenditures
AssetsDepreciation
Impairment loss
Capital expenditures

Information
Communication

Lifestyle andIndustrial
Supplies

Electronics

Beverages

732,708
6,976
739,685
716,218
23,466

530,401
6,237
536,638
492,924
43,713

257,479
23
257,502249,186
8,316

62,79334
62,82863,405(577)

592,670
24,913264
23,800522,334
27,7352
22,763397,006
33,373‐
67,953

43,169
3,397
111
3,172

Elimination
and/orcorporate

Consolidated

1,583,382
13,271
1,596,654
1,521,734
74,919‐(13,271)(13,271)(4,865)(8,406)

1,583,382‐
1,583,382
1,516,869
66,513

1,555,181
89,419377
117,689

63,672
2,275
‐
1,374

1,618,853
91,694377
119,063

Total

2. Geographic segment information
In the previous and current fiscal years, geographical segment information is not stated because Japanaccounts for more than 90% of aggregate sales of all segments and of the aggregate amount of assets ofall segments.

32

3. Overseas sales
The year ended March 31, 2009 (April 1, 2008 – March 31, 2009)
l Overseas sales (a)

Asia

Other

Total

¥134,108 million¥76,302 million¥210,410 million

8.5%

4.8%

ll Consolidated net sales (b)lll Ratio: (a)/(b)¥1,584,844 million

The year ended March 31, 2010 (April 1, 2009 – March 31, 2010)
Asia
Other
l Overseas sales (a)¥130,836 million¥62,308 million
ll Consolidated net sales (b)lll Ratio: (a)/(b)
8.3%
3.9%
Notes:

13.3%

Total
¥193,144 million¥1,583,382 million
12.2%

1.

Country and regional segments are based on geographic proximity.

2.

Main countries and regions included in each segment:
Asia:
Taiwan, South Korea, China, Indonesia
Other: United States, France, Germany, United Kingdom

3.

Overseas sales represent the total sales of the Company and its consolidated subsidiaries
outside Japan.

33

Per share information
Year ended March 31, 2009
(April 1, 2008 – March 31, 2009)
Net assets per share

Year ended March 31, 2010
(April 1, 2009 – March 31, 2010)¥1,393.91

Net assets per share¥1,422.34¥(32.35)

Net income per share¥36.13

Net income (loss) per share

No diluted net income per share is presented forthe fiscal year because there are net losses per
share and there are no potentially dilutive
securities.

No diluted net income per share is presented forthe fiscal year because there are no potentiallydilutive securities.

Note: Basis of calculations
1. Net assets per share
Year ended
March 31, 2009

Year ended
March 31, 2010

(As of March 31, 2009)(As of March 31, 2010)

Total net assets(Million yen)

940,085

956,863

Amount excluded from total net assets(Million yen)

41,91040,538(Million yen)

41,91040,538

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

898,174

916,324

Number of common shares outstanding(Thousand shares)

700,480

700,480

Number of common treasury shares(Thousand shares)

56,12356,241

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

644,357

644,238

Of which, minority interests

2. Net income (loss) per share
Year ended
March 31, 2009
(April 1, 2008 –March 31, 2009)

Year ended
March 31, 2010
(April 1, 2009 –March 31, 2010)

Net income (loss)(Million yen)

(20,933)

23,278Amounts not attributable to commonshareholders(Million yen)‐‐

Net income (loss) pertaining to common stock(Million yen)

(20,933)

23,278Average number of common shares
outstanding during the fiscal year

(Thousand shares)

647,025

644,314Disclosure omission
Disclosure of notes on such items as tax effect accounting, marketable securities, and retirement benefits
is omitted because such disclosure in the release of Financial Results is not considered to be important.

34

5. Non-consolidated financial statements(1) Non-consolidated balance sheets(Million yen)

Year ended
March 31, 2009
(As of March 31, 2009)

Year ended
March 31, 2010
(As of March 31, 2010)

49,874
44,155257,183
4,994
10,317
3,924
4,781
17,853(2,309)390,775

80,51540,191
292,497
4,310
11,334
2,536
3,864
13,431(1,608)447,073

365,070(215,809)
149,261
30,160(21,926)
8,233
689,899(560,965)
128,933
1,047
(914)
133
48,657(39,128)
9,528
117,533
1,626
(77)
1,548
39,579454,752

385,265(225,255)
160,01031,051(22,848)8,202
714,702(579,270)
135,431
1,097
(977)
119
48,269(39,535)
8,733
119,576
8,018
(564)
7,453
31,905
471,433

15,598
7,998
23,597

14,036
6,497
20,534ASSETS
Current assets
Cash and time deposits
Notes receivable
Trade receivable
Merchandise and finished goods
Work in progress
Raw materials and supplies
Deferred income taxes
Other
Allowance for doubtful accounts
Total current assets
Fixed assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Structures
Accumulated depreciation
Structures, net
Machinery
Accumulated depreciation
Machinery, net
VehiclesAccumulated depreciation
Vehicles, net
Equipment
Accumulated depreciation
Equipment, net
Land
Lease asset
Accumulated depreciation
Lease asset, net
Construction in progress
Total property, plant and equipment
Intangible fixed assets
Software
Other
Total intangible fixed assets

35

(Million yen)

Year ended
March 31, 2009
(As of March 31, 2009)

Year ended
March 31, 2010
(As of March 31, 2010)

105,254
140,356
29,03541,35535,346(15,417)335,930
814,281
1,205,056

122,781
123,732
29,64631,35243,307(19,503)
331,316
823,284
1,270,358

Investments and other assets
Investment securities
Investments in securities in affiliates
Long-term loans
Deferred income taxes
Other
Allowance for doubtful accounts
Total investments and other assets
Total fixed assets
TOTAL ASSETS

36

(Million yen)
Year ended
March 31, 2009
(As of March 31, 2009)

LIABILITIESCurrent liabilities
Notes payable
Trade payable
Short-term bank loans
Lease obligation
Accounts payable - otherAccrued expenses
Deposits payable
Reserve for bonuses
Reserve for bonuses to directors
Reserve for loss on liquidation of affiliates

18,186
183,161
14,000269
44,334
13,719143,003
5,993
180
336

Year ended
March 31, 2010
(As of March 31, 2010)

25,681
204,859‐

15,084
2,499
440,769

701
44,983
14,722
145,223
6,927
210
‐
2,741
1,938
447,990

50,0001,356
6,424
11,57869,359510,128

100,000
7,124
6,400
11,303
124,828
572,819

114,464

114,464

144,898
144,898

144,898

23,30023,300

1
27

0
8,047

60

533,399(93,859)52
432,780
59,987524,168(93,992)

Total stockholdersʼ equity
Valuation and translation adjustments
Net unrealized gains (losses) on
available-for-sale securities
Net deferred losses on derivatives
Total valuation and translation adjustments

698,903689,539(3,969)(6)(3,975)

8,007
(7)
8,000

TOTAL NET ASSETSTOTAL LIABILITIES AND NET ASSETS

694,927
1,205,056

697,539
1,270,358

Notes payable for facilities
Other
Total current liabilities
Long-term liabilities
Bonds
Lease obligation
Long-term debt
Provision for retirement benefits
Total long-term liabilities
TOTAL LIABILITIESNET ASSETSStockholdersʼ equity
Common stock
Capital surplus
Capital reserve
Total capital surplus
Retained earnings
Legal reserve
Other retained earnings
Reserve for loss on overseas investment
Reserve for special depreciation
Reserve for depreciation reduction of
fixed assets
Other reserve
Retained earnings brought forward

482,780
27,230Total retained earnings
Treasury stock37

144,898

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

Year ended
March 31, 2009
Net salesYear ended
March 31, 2010

1,105,429

1,086,701

Cost of sales

982,377

962,451

Gross profit

123,052

124,250

Selling, general and administrative expenses

111,084

112,617

Operating income

11,968

11,633

Interest income

1,189

1,034

Dividend income

21,23023,181

Other

66,25655,286

Total non-operating income

88,67779,502

Interest expense

1,264

1,731

Other

61,60847,125

Total non-operating expenses

62,87348,856

37,772

42,278

3

199

371

33
‐

Reversal of allowance for doubtful accounts

652
‐

95

Gain on business transfer

‐

200

Other

2

17

1,030

546

Loss on sale or disposal of fixed assets

5,580

5,411

Impairment loss on fixed assets

41,310‐Loss on devaluation of investment securities

13,461

1,114

Loss on devaluation of securities in affiliates

10,58820,475

Other

2,669

78

Total extraordinary losses

73,61027,079(34,808)

15,745Current income taxes

210

200

Deferred income taxes(15,044)

5,423

Income and other taxes(14,834)

5,623

Net income (loss)(19,973)

10,121Non-operating income

Non-operating expenses

Ordinary income
Extraordinary gains
Gain on sale of fixed assets
Gain on sale of investment securities
Gain on cancellation of shares due toabsorption of a subsidiary

Total extraordinary gains
Extraordinary losses

Income (loss) before income taxes38

(3) Non-consolidated statements of changes in stockholdersʼ equity(Million yen)

Year ended
March 31, 2009
Stockholdersʼ equity
Common stock
Balance at previous fiscal year end
Balance at current fiscal year end
Capital surplus
Capital reserve
Balance at previous fiscal year end
Balance at current fiscal year end
Total capital surplus
Balance at previous fiscal year end
Balance at current fiscal year end
Retained earnings
Legal reserve
Balance at previous fiscal year end
Balance at current fiscal year end
Other retained earnings
Reserve for loss on overseas investment
Balance at previous fiscal year end
Changes of items during the period
Reversal of reserve for loss on overseas
investment
Total changes of items during the period

Balance at current fiscal year end
Reserve for special depreciation
Balance at previous fiscal year end
Changes of items during the period
Provision of reserve for special depreciation

Reversal of reserve for special depreciation
Total changes of items during the period

Balance at current fiscal year end
Reserve for depreciation reduction of fixed
assetsBalance at previous fiscal year end
Changes of items during the period
Reversal of reserve for depreciation
reduction of fixed assets
Total changes of items during the period

Balance at current fiscal year end
Other reserve
Balance at previous fiscal year end
Changes of items during the period
Reversal of other reserve
Total changes of items during the period

Balance at current fiscal year end

39

Year ended
March 31, 2010

114,464
114,464

114,464
114,464

144,898
144,898

144,898
144,898

144,898
144,898

144,898
144,898

23,30023,30023,30023,300

2

1

(0)

(0)

(0)
1

(0)
0

64

27

‐
(37)
(37)
27

8,041
(20)
8,020
8,047

70

60

(9)

(8)

(9)
60

(8)
52

532,780

482,780(50,000)(50,000)
482,780(50,000)(50,000)
432,780

(Million yen)

Year ended
March 31, 2009
Retained earnings brought forward
Balance at previous fiscal year end
Changes of items during the period
Reversal of reserve for losses on overseas
investment
Provision of reserve for special depreciation

Reversal of reserve for special depreciation
Reversal of reserve for depreciation
reduction of fixed assets
Reversal of other reserve
Cash dividends paid
Net income (loss)
Disposal of treasury stock
Total changes of items during the period

Balance at current fiscal year end
Total retained earnings
Balance at previous fiscal year end
Changes of items during the period
Cash dividends paid
Net income (loss)
Disposal of treasury stock
Total changes of items during the period
Balance at current fiscal year end
Treasury stock
Balance at previous fiscal year end
Changes of items during the period
Purchase of treasury stock
Disposal of treasury stock
Total changes of items during the period
Balance at current fiscal year end
Total stockholdersʼ equity
Balance at previous fiscal year end
Changes of items during the period
Cash dividends paid
Net income (loss)
Purchase of treasury stock
Disposal of treasury stock
Total changes of items during the period
Balance at current fiscal year end

40

Year ended
March 31, 2010

22,033

27,2300‐37

0(8,041)20

9

850,000(24,849)(19,973)(27)
5,196
27,23050,000(19,346)
10,121(7)
32,75759,987578,250

533,399(24,849)(19,973)(27)(44,850)
533,399(19,346)
10,121(7)(9,231)
524,168(66,524)(93,859)(27,424)89(27,335)(93,859)

(153)
20
(132)
(93,992)

771,088698,903(24,849)(19,973)(27,424)62(72,185)
698,903(19,346)
10,121(153)
13(9,363)
689,539

(Million yen)

Year ended
March 31, 2009
Valuation and translation adjustments
Net unrealized gains (losses) on
available-for-sale securities
Balance at previous fiscal year end

Year ended
March 31, 2010

10,401(3,969)Changes of items during the period
Net changes in items other thanstockholdersʼ equity
Total changes of items during the period(14,371)

11,977(14,371)

11,977

Balance at current fiscal year end(3,969)

8,007

7

(6)

(13)

(1)

(13)
(6)

(1)
(7)

10,409(3,975)(14,385)

11,975(14,385)(3,975)

11,9758,000

781,498

694,927

Cash dividends paid

(24,849)(19,346)

Net income (loss)(19,973)

10,121

Purchase of treasury stock(27,424)

(153)

62

13

(14,385)

11,975(86,570)2,612

694,927

697,539

Net deferred gains (losses) on derivatives
Balance at previous fiscal year end
Changes of items during the period
Net changes in items other thanstockholdersʼ equity
Total changes of itmes during the period
Balance at current fiscal year end
Total valuation and translation adjustments
Balance at previous fiscal year end
Changes of items during the period
Net changes in items other thanstockholdersʼ equity
Total changes of items during the period
Balance at current fiscal year end
Total net assets
Balance at previous fiscal year end
Changes of items during the period

Disposal of treasury stock
Net changes in items other thanstockholdersʼ equity
Total changes of items during the period
Balance at current fiscal year end

41

(4) Notes on premise of a going concern
None

6. Other information(1) Changes in directors and officers (as of June 29, 2010)a. Director to be promoted (at the Board of Directorsʼ meeting following the Ordinary General Meetingof Shareholders to be held on June 29)
Managing Director

Yoshiki Nozaka (currently Director)

b. New corporate officer candidates
Corporate Officer

Kenji Miya (currently Manager of Personnel Dept.)

Corporate Officer

Yoshio Ogawa (currently Deputy Manager of Information
Communication Operations (Kansai-area))

Corporate Officer

Toshiki Sugimoto (currently Manager of Research and Design
Center)c. Senior corporate officers to be promoted
Senior Corporate Officer

Fujio Yamazaki (currently Corporate Officer)

Senior Corporate Officer

Takashi Saito (currently Corporate Officer)

Senior Corporate Officer

Shigemi Furuya (currently Corporate Officer)

42Supplementary data
Net sales by segment
Term
Segment

Year ended
March 31, 2009
(A)

Year ended
March 31, 2010
(B)

Increase (Decrease)(B – A)

Million yen%

Million yen%

Million yen%

Information Communication

532,34348.1

482,95844.5(49,385)(9.3)

Lifestyle and Industrial
Supplies

383,48334.7

399,271

36.7

15,788

4.1

Electronics

189,60317.2

204,47118.8

14,8687.8

1,105,429

100.0

1,086,701

100.0(18,728)

(1.7)

Total

43