Consolidated Financial Results for the Fiscal Year Ended March 31, 2020 [J-GAAP]May 27, 2020

Company Name:

Dai Nippon Printing Co., Ltd.

Stock exchange listing:Tokyo
Stock code:
7912
URL: https://www.dnp.co.jp/eng/
Representative:
Yoshinari Kitajima, President
Contact person:
Daisuke Sasaki, General Manager, IR and Public Relations+81-3-6735-0124
Telephone:
General meeting of shareholders:June 26, 2020
Dividend payment date:June 29, 2020
Securities report issuing date:June 26, 2020
Preparation of earnings presentation material: Yes
Holding of earnings announcement:
Yes (for institutional investors and analysts)*Amounts under one million yen have been rounded down.

1. Consolidated financial results for the year ended March 31, 2020
(April 1, 2019 – March 31, 2020)(1) Consolidated financial results(Percentages show change from corresponding year-ago period.)
Net Income (Loss)
Attributable toOperating Income
Ordinary Income
Parent Company
Shareholders

Net Sales
Million yen%

Million yen%

Million yen%

Million yen%

Year ended March 31, 2020

1,401,894

0.0

56,274

12.8

63,786

9.5

69,497–

Year ended March 31, 2019

1,401,505(0.8)

49,898

7.6

58,25914.3(35,668)–

Note: Comprehensive income: Year ended March 31, 2020: ¥2,536 million (–%)
Year ended March 31, 2019: ¥(36,694) million (–%)
Net Income (Loss)
per Share

Diluted Net
Incomeper Share

Ordinary
Income toTotal Assets

ROE

Operating
Income to
Net Sales

Yen

Yen

%

%

%

Year ended March 31, 2020

235.18235.08

7.3

3.6

4.0

Year ended March 31, 2019(118.22)

–

(3.5)

3.3

3.6

Reference: Equity in earnings of affiliates: Year ended March 31, 2020: ¥6,050million
Year ended March 31, 2019: ¥4,161 million(2) Consolidated financial position
Total Assets

Net Assets

Net Assets
per Share

Equity Ratio

Million yen

Million yen%

Yen

As of March 31, 2020

1,721,724

968,57453.2

3,260.38

As of March 31, 2019

1,775,022

1,046,622

56.1

3,300.52

Reference: Stockholders’ equity: As of March 31, 2020: ¥915,779 million

As of March 31, 2019: ¥996,162 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

Year ended March 31, 2020

93,937

191,057(41,280)

377,367

Year ended March 31, 2019

68,971(146,909)(32,196)

133,771

2. Dividends
Dividends per Share
First
SecondThird
Quarter-end Quarter-end Quarter-end

Year-end

AnnualTotal Dividends(Annual)Dividend
Payout Ratio(Consolidated)

Dividends to
Net Assets
Ratio(Consolidated)

Yen

Yen

Yen

Yen

Yen

Million yen%%

Year ended March 31, 2019

–

32.00

–

32.00

64.00

19,317–

1.9

Year ended March 31, 2020

–

32.00

–

32.00

64.00

18,60927.2

2.0

Year ending March 31,
2021 (Forecast)

–

–

–

–

–

–

Note: Dividend forecast for the fiscal year ending March 31, 2021 is as yet undetermined.

3. Consolidated earnings forecasts for the year ending March 31, 2021
(April 1, 2020 – March 31, 2021)
Consolidated earnings forecasts for the fiscal year ending March 31, 2021 are pending due to the lackof visibility on the impact of the novel coronavirus (COVID-19) and the consequent lack of a reasonable
and appropriate basis on which to forecast earnings. The DNP Group will promptly announce forecasts
once it judges that this reasonable basis exists.
* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting ina change in the scope of consolidation): No(2) Changes in accounting policies, changes in accounting estimates, and restatement of revisions
1) Changes in accounting policies with revision of accounting standards: Yes
2) Changes in accounting policies other than the 1) above:No3) Changes in accounting estimates:
No4) Restatement of revisions:No
Note: For further details, see the section titled, “5. Consolidated financial statements and key notes, (5) Notes
regarding consolidated financial statements [Changes in accounting policies]” on page 27.

(3) Number of common shares issued and outstanding
1) Number of common shares outstandingat end of each period (including
treasury shares)
2) Number of treasury shares at end ofeach period
3) Average number of shares outstanding
during the period

As of March 31,
2020

324,240,346 As of March 31,
2019shares324,240,346
shares

As of March 31,
2020
Year ended
March 31, 2020

43,359,344 As of March 31,
2019shares295,506,271
Year ended
shares March 31, 201922,420,745
shares301,715,605
shares(Reference) Non-consolidated financial results
Non-consolidated financial results for the year ended March 31, 2020
(April 1, 2019 – March 31, 2020)(1) Non-consolidated financial results(Percentages show change from corresponding year-ago period.)
Net Sales

Operating Loss

Ordinary Income

Net Income (Loss)

Million yen%

Million yen%

Million yen%

Million yen%

Year ended March 31, 2020

984,888

0.2(6,507)–

15,359(16.7)

29,998–Year ended March 31, 2019

982,691(0.8)(2,573)–18,441(30.2)(51,196)–

Net Income (Loss)
per Share

Diluted Net Income
per Share

Yen

Yen

Year ended March 31, 2020

101.51–

Year ended March 31, 2019

(169.62)–(2) Non-consolidated financial position
Total Assets

Net Assets

Net Assets
per Share

Equity Ratio

Million yen

Million yen%

Yen

As of March 31, 2020

1,359,719

560,33441.2

1,994.84

As of March 31, 2019

1,426,257

669,87347.0

2,219.37

Reference: Stockholders’ equity: As of March 31, 2020: ¥560,334million

As of March 31, 2019: ¥669,873 million* These financial results are exempt from auditing by a certified public accountant or an auditing company.
* Explanation regarding appropriate use of earnings forecasts and other special notes
Forward-looking statements in this report, including earnings forecasts, are based on assumptions about
economic conditions, market trends, and other factors at the time the report was published. Actual results
may differ significantly due to a variety of factors. For information about earnings forecasts, see the section
titled, “1. Overview of operating results, etc., (4) Forecasts,” on pages 5-6.

Contents
1. Overview of operating results, etc........................................................................................................... 2(1) Overview of operating results for the year ended March 31, 2020 ................................................... 2(2) Overview of financial position for the year ended March 31, 2020 ................................................... 4(3) Overview of cash flows for the year ended March 31, 2020 ............................................................. 5(4) Forecasts ........................................................................................................................................... 5(5) Basic policies regarding the allocation of profits and dividends for the year ended March 31, 2020and year ending March 31, 2021 ...................................................................................................... 6(6) Business risks ................................................................................................................................... 7
2. Information on the DNP Group ............................................................................................................. 10
3. Management policies ............................................................................................................................ 14(1) Core policies .................................................................................................................................... 14(2) Medium- and long-term management strategy and key issues ...................................................... 14
4. Basic approach to selecting accounting standards............................................................................... 16
5. Consolidated financial statements and key notes................................................................................. 17(1) Consolidated balance sheets .......................................................................................................... 17(2) Consolidated statements of income and comprehensive income ................................................... 19(3) Consolidated statements of changes in net assets ......................................................................... 21(4) Consolidated statements of cash flows ........................................................................................... 23(5) Notes regarding consolidated financial statements ........................................................................ 25[Notes on premise of a going concern] ........................................................................................... 25[Basis of presenting consolidated financial statements] ................................................................. 25[Changes in accounting policies] .................................................................................................... 27[Consolidated balance sheets] ....................................................................................................... 28[Consolidated statements of income] ............................................................................................. 28[Consolidated statements of changes in net assets] ...................................................................... 29[Segment information, etc.] ............................................................................................................. 30[Per share information] ................................................................................................................... 34[Significant subsequent events] ...................................................................................................... 34
6. Non-consolidated financial statements and key notes ......................................................................... 35(1) Non-consolidated balance sheets ................................................................................................... 35(2) Non-consolidated statements of income ......................................................................................... 37(3) Non-consolidated statements of changes in net assets.................................................................. 38(4) Notes regarding non-consolidated financial statements ................................................................. 39[Notes on premise of a going concern] ........................................................................................... 39

1

1. Overview of operating results, etc.
(1) Overview of operating results for the year ended March 31, 2020
Business conditions surrounding the DNP Group in the fiscal year ended March 2020 reflected
diversification in marketing and payment methods due to advances in digital technologies, growing
moves to develop new products that target a next-generation automotive society such as
autonomous driving, and growth in demand for environmentally conscious products and services.
In this environment, the DNP Group sought to strengthen core businesses that have highprofitability and market growth potential under its corporate philosophy of connecting individuals andsociety and providing new value, focusing on products and services in which it has a leading
domestic and overseas market share. It also embarked on restructuring to strengthen its
competitiveness, including reorganizing business segments and group companies.
Through synergizing its unique strengths in Printing & Information (P&I), the DNP Group also
pursued “P&I Innovations” to create new value based on four growth areas that address global
social issues and the megatrends that will drive the society of the future: Knowledge andCommunication, Food and Healthcare, Lifestyle and Mobility, and Environment and Energy.
In the fourth quarter, the novel coronavirus (COVID-19) depressed global economic activity, and theresulting rapid downturn makes the outlook impossible to forecast. At the same time, government
stay-at-home requests to prevent the spread of the virus have driven greater demand for online
services such as teleworking (working from home), educational ICT (information andcommunications technology), online medical consultations, online shopping, and online lessons andentertainment.
In response to these changes in society, the DNP Group provided essential value by leveraging its
advanced information security infrastructure and the advantages created by its involvement with theentire range of business processes at companies throughout the value chain.
Specific businesses that the DNP Group moved to strengthen during the fiscal year ended March
2020 included smart cards, in which it has a leading domestic market share, battery pouches forlithium-ion batteries, in which it has a leading global market share, metal masks used in the
production of organic light-emitting diode (OLED) displays, thermal transfer printing media for photo
printing, and optical film for displays.
In the mobility market, the DNP Group worked to develop products and services to support a“next-generation automotive society,” which requires lower environmental impact, higher energy
efficiency, and greater information security, safety, and comfort. Specifically, the DNP Group
provided battery pouches for lithium-ion batteries used in electric vehicles and other applications,decorative films and panels that enhance vehicles’ functionality without affecting their interior orexterior design, and various security solutions leveraging encryption and other technologies.
In the market for the Internet of Things (IoT) and next-generation communications using the 5G
services that launched in Japan at end-March 2020, the DNP Group supported the development of amore enjoyable information society by providing transparent antenna films and electronic
components such as vapor chambers for heat dissipation components, and developing services thatoffer realistic experiences irrespective of time or location (such as VR (virtual reality) and AR(augmented reality) content and 4K/8K video distribution) and support safe autonomous driving andonline medical consultations.
In addition, it also developed and supplied products and services in the environmental-related
market, such as food and daily product packaging materials, photovoltaic module components, andthe DNP Multifunctional Thermal Insulation (MFTI) Box, which can maintain a constant temperature2

for a long time without using electricity.
As a result of these efforts, the DNP Group’s profitability for the fiscal year ended March 2020
improved, with a 0.4 percentage point year-on-year increase in the ratio of operating income to net
sales to 4.0%.
In order to effectively use and streamline its assets, the DNP Group also continued to review its
strategic shareholdings and other assets holdings, and acquired 20.93 million shares of treasury
stock with a value of ¥59.9 billion in order to increase capital efficiency and shareholder returns.
In addition, as part of its efforts to build a strong business portfolio, the DNP Group booked a¥26.5 billion extraordinary loss to reflect impairment losses on business-use assets for which
profitability has declined and idle assets with no prospects for future use, in accordance with the
J-GAAP “Accounting Standard for the Impairment of Fixed Assets.”
As a result of the above, consolidated net sales for the year ended March 31, 2020 grew 0.0%
year on year to ¥1,401.8 billion, consolidated operating income grew 12.8% to ¥56.2 billion,
consolidated ordinary income grew 9.5% to ¥63.7 billion, and net income attributable to parent
company shareholders totaled ¥69.4 billion (versus net loss of ¥35.6 billion in the previous fiscal
year). ROE, which the DNP Group has adopted as its key profitability yardstick, was 7.3%.
Business segment results for the year ended March 31, 2020 are presented below.
[PRINTING]
Information Communication
In the Information Innovation business, sales of printed media such as pamphlets and catalogs
decreased. However, overall sales increased on greater demand for smart cards in line with the shift
toward cashless payments and steady growth in priority businesses such as Business Process
Outsourcing (BPO). These services handle business processes on behalf of companies seeking to
respond to labor shortages and work-style reforms.
In the Imaging Communication business, overall sales were in line with the previous year,
despite the impact of the stronger yen due to the global nature of its operations, as sales increasedin the “experience-based value creation” business that aims to enhance people’s experiences
through photographs taken at locations such as tourist destinations and event venues, and sales
trends for thermal transfer printing media for photo printing were favorable.
In the Publishing business, the DNP Group worked to help solve issues within the publishingindustry, drawing on its strengths as the sole corporate group in Japan that spans the entire industry
supply chain, from planning and advertising through manufacturing, distribution, and sales. Thisdrove favorable e-book sales trends in the “honto” hybrid bookstore network, which combines
physical bookstores, online bookstores, and e-book services, and an increase in the number oflibraries outsourcing operations. As a result, Education and Publications Distribution sales increased
year on year. While the e-publishing market is expanding, the print publication market continues tocontract, and printing of both books and magazines decreased. As a result, overall sales in the
Publishing business declined.
Operating income in the Information Communication segment rose due to growth in the
Information Innovation business and the positive impact of cost reductions achieved mainly by
consolidating production bases, despite an impact from price hikes for printing paper and other raw
materials.
As a result of the above, overall segment sales grew 1.4% year on year to ¥773.0 billion andoperating income grew 22.4% to ¥30.4 billion.

3

Lifestyle and Industrial Supplies
In the Packaging business, the DNP Group worked to develop and sell its GREEN PACKAGING
series of environmentally conscious packaging based on three value propositions: sustainably
sourced raw materials, lower CO2 emissions, and resource circulation. However, overall Packaging
business sales declined due to progress with reviewing low value-added products in order toincrease profitability.
In its Living Spaces business, the DNP Group worked on selling high-performance,
environmentally conscious products that combine high-quality design driven by sophisticated image
processing, film and plate making and printing technologies with its proprietary electron beam (EB)coating technology. However, the significant impact of a decline in housing starts in Japan resulted ina decrease in overall sales in the Living Spaces business.
In the Industrial Supplies business, sales rose sharply for battery pouches used in automotive
lithium-ion batteries due to greater uptake of electric vehicles, and sales of photovoltaic module
components such as encapsulants and back sheets also increased. As a result, overall sales in the
Industrial Supplies business increased.
Operating income in the Lifestyle and Industrial Supplies segment increased due to factors
including expansion in the Industrial Supplies business, benefits from restructuring throughout thesegment, and lower raw material prices.
As a result of the above, overall segment sales fell 1.5% year on year to ¥391.3 billion but
operating income grew 33.0% to ¥11.1 billion.
Electronics
In the Display Components business, sales increased for metal masks used in the production oforganic light-emitting diode (OLED) displays due to the transition from LCD to OLED displays for
smartphones. However, sales of color filters for LCD displays declined due to a review of thebusiness structure following a decline in demand. Sales of optical films for LCD TVs declined, but
sales of products used in OLED displays rose. As a result, overall sales in the Display Components
business increased.
In the Electronic Devices business, semiconductor photomask sales decreased due to a decline insemiconductor market conditions. As a result, sales in the Electronic Devices business declined.
Overall segment operating income decreased due to the decline in sales.
As a result of the above, overall segment sales fell 3.0% year on year to ¥186.6 billion andoperating income fell 7.5% to ¥34.1 billion.
[BEVERAGES]
Beverages
The DNP Group worked to increase its share in existing markets and acquire new customers by
releasing new products in core brands such as Coca-Cola, launching Lemondo, the Coca-Colagroup’s first alcoholic beverage line, and stepping up sales promotion in the vending machine
business and to mass merchandisers.
However, overall segment sales fell 1.3% year on year to ¥55.2 billion as sales to customers in
Hokkaido rose, but sales to bottlers in other regions declined due to adverse weather in Honshu.
Operating income also decreased 3.5% year on year to ¥2.0 billion, due mainly to a decline in sales
volume.
(2) Overview of financial position for the year ended March 31, 2020
Total assets at the end of the fiscal year decreased by ¥53.2 billion from the end of the previous
fiscal year to ¥1,721.7 billion, due mainly to a decline in investment securities.

4

Total liabilities increased by ¥24.7 billion from the end of the previous fiscal year to ¥753.1 billion,
due mainly to an increase in corporate bonds.
Net assets decreased by ¥78.0 billion from the end of the previous fiscal year to ¥968.5 billion,
due mainly to a decline in valuation difference on available-for-sale securities.
(3) Overview of cash flows for the year ended March 31, 2020
Cash and cash equivalents at the end of the current fiscal year increased by ¥243.5 billion from theend of the previous fiscal year to ¥377.3 billion.
Cash flow provided by operating activities totaled ¥93.9 billion (¥68.9 billion in the previous fiscal
year), due mainly to ¥102.7 billion in income before income taxes and non-controlling interests and¥54.4 billion in depreciation.
Cash flow provided by investing activities totaled ¥191.0 billion (cash used of ¥146.9 billion in theprevious fiscal year), due mainly to a ¥135.7 billion net decrease in time deposits and ¥58.1 billion inproceeds from sales of investment securities.
Cash flow used in financing activities totaled ¥41.2 billion (¥32.1 billion in the previous fiscal year),due mainly to a ¥60.0 billion purchase of treasury stock.
The trends in DNP’s cash flow indicators are shown below.
Year ended
March 2016

Year ended
March 2017

Year ended
March 2018Year ended
March 2019Year ended
March 2020

Equity ratio (%)

59.2

59.4

58.7

56.1

53.2

Market value-based
equity ratio (%)

36.6

42.4

36.9

45.0

37.5

Debt-to-cash flow ratio(year)

2.6

2.4

3.5

2.4

2.3

Interest coverage ratio(times)

29.8

32.6

21.9

33.4

59.8

Notes:***

Equity ratio: Total stockholders’ equity / Total assets
Market value-based equity ratio: Market capitalization / Total assets
Debt-to-cash flow ratio: Interest-bearing debt / Cash flow
Interest coverage ratio: Cash flow / Interest paid
The above indicators are calculated based on consolidated financial figures.
Market capitalization is calculated as: Fiscal year-end share price  fiscal year-end number of shares
outstanding (excluding treasury stock)
Cash flow: Cash flow provided by/used in operating activities on the consolidated statements of cash flows
Interest-bearing debt: All liabilities on the consolidated balance sheet that accrue interest charges
Interest paid: Interest paid on the consolidated statements of cash flows(4) Forecasts
The acute impact of COVID-19 has made it extremely difficult to assess the domestic and overseas
economic and social outlook. The DNP Group expects business conditions in the printing industry to
become even more difficult due to declining demand for various types of printed materials and a
decline in order prices due to measures to prevent infection, including government stay-at-homerequests and the cancellation of various events. However, adoption of teleworking is increasing,
online content services are becoming increasingly popular, and expectations for educational ICT and
online medical consultations are growing.
Going forward, the DNP Group expects significant changes in individual lifestyles and corporate
economic activity, accompanied by major changes in society as a whole. The DNP Group will5

endeavor to convert these drivers of change into business opportunities.
The DNP Group will continue striving to create value that resolves social issues and meets
people’s expectations by combining its strengths in printing and information (P&I) and innovating
through deeper alliances with external partners, endeavoring to fulfil its corporate philosophy: “TheDNP Group connects individuals and society, and provides new value.” The DNP Group also aims tofurther expand earnings by pursuing business structure reforms according to the market
environment and trends in demand.
In the Information Communication segment, the DNP Group intends to expand its BPO business,where overall demand is increasing, and its payment service business, which is benefiting fromgreater uptake of cashless payments. In addition to expanding hybrid marketing that combines
real-world and digital sales channels, the DNP Group is also pursuing digital transformation (DX) in
its information media business to respond to the spread of non-face-to-face operations withcustomers. In the Publishing business, the DNP Group targets earnings growth in the “honto”
hybrid bookstore network business, which combines physical bookstores, online bookstores,
and e-book services and will increase its efforts to advance its content business, while continuing
to review its production platform and implement other restructuring to respond to the ongoing
downtrend in demand for printed media.
In the Lifestyle and Industrial Supplies segment, the DNP Group aims to increase sales of battery
pouches for automotive lithium-ion batteries in line with greater uptake of electric vehicles, and will
also respond to growth for encapsulants, back sheets, and other photovoltaic module components.
The DNP Group also aims to increase profitability through a further shift toward value-added
products such as its GREEN PACKAGING series of environmentally conscious packaging andhigh-performance barrier film.
In the Electronics segment, the DNP Group targets steady growth in metal masks used in the
production of OLED displays, leveraging the advantage of its leading global market share, in
anticipation of demand growth in line with the shift from LCD to OLED smartphone displays and thelaunch of foldable smartphones with large OLED displays. In optical films, where the DNP Group has
secured leading global shares for products such as anti-glare surface films, it targets increased
adoption of films used in OLED displays, and growth for new products such as viewing angle
expansion films used in TVs.
In addition, the DNP Group seeks to streamline and make more effective use of its assets byreviewing its fixed asset and investment securities holdings.
While the DNP Group will continue to pursue these initiatives, at present it has opted to leave its
forecasts for the fiscal year ending March 2021 pending due to the lack of visibility on the impact of
COVID-19 and the consequent lack of a reasonable and appropriate basis on which to forecast
earnings. The DNP Group will promptly announce forecasts once it judges that this reasonable basis
exists.

(5) Basic policies regarding the allocation of profits and dividends for the year ended March
31, 2020 and year ending March 31, 2021
An important management policy of the DNP Group is to pass on profits to shareholders and otherstakeholders.
Profits are allocated based on a policy of paying stable dividends to shareholders and withconsideration for financial results and the dividend payout ratio. For future business expansion, the
DNP Group strives to retain profits and strengthen its management base.
Retained earnings are used to invest in research and development related to new products and6technologies, to invest in equipment needed to develop new businesses, and to implement strategic
alliances and M&A and invest in human resources to support these activities. At the same time, the
DNP Group considers flexible capital policies while accounting for its capital needs and market
trends.
In addition, while continuing to implement measures to respond to COVID-19, it will continue toprovide new value while considering the health, safety, and wellbeing of its employees andmaintaining stable employment conditions.
The DNP Group believes that these efforts will contribute to higher profits that can then be passed
on to shareholders and other stakeholders in future.
Based on this policy, the DNP Group will pay a year-end dividend of ¥32 per share, and adding theinterim dividend of ¥32 per share, it plans to pay a full-year dividend of ¥64 per share for the fiscal
year ended March 2020. This will result in a consolidated dividend payout ratio of 27.2% for the year
in question.
The DNP Group has opted to leave its dividend forecast for the fiscal year ending March 2021
pending due to the lack of visibility on the impact of COVID-19 and the consequent lack of areasonable and appropriate basis for a forecast. The DNP Group will promptly announce a forecast
once it judges that this rational basis exists.
(6) Business risks
The DNP Group seeks to gain an accurate understanding of the challenges and risks related to theeconomy, society, and environment, and to conduct integrated risk management, in an effort tocontinue providing new value based on its corporate philosophy. At the same time, the variablefactors that are viewed as risks are also opportunities for business expansion, and the DNP Groupseeks to respond to these opportunities by combining its strengths and deepening alliances withexternal partners to create new value while responding to rapid changes in the businessenvironment.
The DNP Group identifies the following items as key risk factors.
〇 Environmental risks
・ Natural disasters and infectious disease outbreaks
・ Tightening and easing of legal and other regulations
・ Strengthening of measures to prevent global warming
・ Changes in energy policies due to the depletion of natural resources
・ Drastic changes in energy prices
・ Promotion of a shift to a circular economy
・ Increase in marine and land pollution and ensuring a sustainable global environment
・ Degradation of ecosystems and ensuring biodiversity, and others
To respond to natural disasters, the DNP Group takes steps to protect production equipment andother major facilities from fires, earthquakes, and flooding, seeks geographical diversification of its
production facilities and raw material suppliers, and undertakes business continuity planning (BCP)
to minimize production shutdowns and product supply disruptions caused by disasters or otherevents. The DNP Group also uses various types of insurance to transfer risk. Nevertheless, the DNPGroup’s performance could be substantially affected in the event of major earthquakes, natural
disasters such as rainstorms or flooding caused by climate change, infectious disease outbreaks, orother unexpected events that cause production shutdowns or significantly damage or impair social
infrastructure.
Amid the severe impact on domestic and overseas economies from the global COVID-19
pandemic, the DNP Group will respond as necessary by promoting teleworking and other initiatives

7

in line with the government’s policy and the DNP Group’s response strategy, with a focus on
preventing infection both internally and externally and prioritizing employees’ health and safety inline with the DNP Group Safety and Health Charter.
The DNP Group also constantly strives for a balance between its business activities and the global
environment. In March 2020, it drew up the DNP Group Environmental Vision 2050 as ademonstration of its ideals for 2050. All of the DNP Group’s employees will work to protect theenvironment and achieve a sustainable society through their strong awareness of the relationships
between all its businesses and the environment.
The DNP Group’s business activities benefit from the natural environment in a variety of ways,
including the procurement of raw materials from forest resources to make printing paper and otherproducts and the use of water and energy in manufacturing processes. The DNP Group also
undertakes business activities that are closely connected with society, including securing human andmaterial resources and building a supply chain. It clearly recognizes these conditions and pursues avariety of initiatives to sustain its growth and that of society while ensuring environmental
sustainability. However, the DNP Group expects the following changes to accelerate: moves totighten domestic and overseas legal regulations and international standards to respond to issues
such as climate change and protecting biodiversity; and a greater focus in assessments ofenterprise value on its stance toward resolving social issues. The DNP Group’s performance could
be affected by a slow response to these trends.
At the same time, the DNP Group also expects that it will need to respond to major changes inmarket and industry trends as a result of deregulation. This could affect the DNP Group’s businessperformance due to the increased burden or costs required to respond to changes in regulations
governing its business activities.
〇 Economic risks
・ Changes in domestic and overseas economic conditions and consumption trends, and foreign
currency fluctuations
・ Acceleration and diversification of technological innovation and intensification of developmentcompetition
・ Outflow and infringement of intellectual property
・ Decrease in business performance and inadequate internal control at partnering companies
・ Construction, maintenance, and management of information infrastructure and social
infrastructure
・ Increase in large-scale cyber attacks
・ Changes in the supply/demand balance for raw material procurement, and others
In relation to domestic and overseas economic conditions and consumption trends, the DNP Group
does business with an extremely large number of corporate customers in a wide range of industries
and pursues stable business activities supported by a business base that does not rely on specificindustries and companies. If consumer spending and other components of domestic demand slump
more than expected, owing to domestic economic fluctuations in connection with global economic
trends, its performance could be affected by a decrease in production volume, decline in unit prices,and other factors.
Additionally, the DNP Group could be directly or indirectly affected by market trends in various
industries in Japan or overseas. In particular, electronics-related industries are susceptible tochanges in production and demand in emerging markets and global declines in unit prices, and the
DNP Group’s performance could be affected by major changes in market trends.
The DNP Group expects the impact of foreign exchange rates to steadily increase while it pursues
business expansion in various regions around the world. It continues to hedge the risk of currency

8fluctuations via an increase in local-market manufacturing, the use of foreign exchange forward
contracts, and other means, but its performance could be affected by drastic changes in foreignexchange rates.
The DNP Group provides new products and services by applying and advancing its printing andinformation technologies and by incorporating the strengths of partners outside the company. The
DNP Group’s performance could be affected by factors such as further intensification ofdevelopment competition in Japan and overseas, greater-than-expected shortening of product life
cycles, and changes in market trends as the requirements that must be addressed by thisdevelopment process become more diverse.
In addition, the DNP Group engages strategic business and capital alliances and corporate
acquisitions, and its performance could be affected if it is unable to achieve initially expected results
and synergies as a result of deterioration in the business environment affecting the companies andbusinesses involved in these alliances and acquisitions.
In procuring raw materials and other items, the DNP Group works to ensure stable volume andmaintain optimal procurement prices, including by purchasing printing paper and film materials frommultiple suppliers in Japan and overseas. However, there is risk of imbalances between supply anddemand due to sharp fluctuations in petroleum prices, sudden surge in demand in emerging markets,
depletion of natural resources, impact of climate change, and human rights issues in the supply
chain labor environment. The DNP Group will respond during such times by negotiating with clientcompanies and business partners, but its performance could be affected if the procurement of raw
materials or other items becomes extremely difficult, if purchasing prices rise sharply, or if other such
events occur.
In addition, global computer networks and information systems have become essential tools for
conducting business, and there are now greater risks of software and hardware defects, dailychanging cyberattacks, computer virus infections, and personal data leaks. The DNP Group regards
information security and the protection of important data, including personal data, as a top
management priority, and is making every effort to maintain and manage systems and data bystrengthening its organization and training employees. However, its business activities could be
affected in the event of a malicious cyberattack, an accident involving important data, or other such
events.
〇 Social risks
・ Compliance violations
・ Large-scale unauthorized use or leakage of data
・ Inadequate quality checks for products and services
・ Labor environment issues
・ Workforce shortages caused by the loss of personnel or difficulty in acquiring personnel
・ Social and political turmoil, and increase in country risk, and others
The DNP Group conducts overseas business activities mainly in Europe, the U.S., Southeast Asia,and elsewhere, and these activities face a variety of social, political, and economic risks. The DNPGroup’s performance could be affected if its overseas business activities are obstructed by the
emergence of various risks related to unexpected changes in laws and regulations governing theenvironment, society, and other areas, country risk, difficulty of hiring and securing personnel,
human rights and conflicts, and other factors.
Additionally, the DNP Group seeks to establish and rigorously uphold corporate ethics throughout
the group, and works to earn the trust of society by each and every employee complying with laws
and regulations in all corporate activities, maintaining the high ethical standards expected by society,and contributing to maintaining and advancing orderly and freely competitive markets with a9consistently fair attitude. Nevertheless, the DNP Group’s performance could be affected in the eventof being subject to lawsuits and resulting fines in Japan or overseas.

2. Information on the DNP GroupThe DNP Group includes the Company, 139 subsidiaries, and 25 affiliated companies. Its two main
businesses are Printing and Beverages. The former encompasses Information Communication,
Lifestyle and Industrial Supplies, and Electronics.
The businesses and segments of the DNP Group are broadly outlined below. The four businesssegments cited below are the same as the reporting segment categories.
[PRINTING]
Information Communication
Production/sale of textbooks, books, weekly/monthly/quarterly magazines, promotional materials,
securities certificates, business forms, cards, payment-related services, photographic materials, andbusiness equipment and systems; and planning/design/construction/management of stores andadvertising media
Major companies
Production

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

Production and sales

DNP Imagingcomm Asia Sdn. Bhd., DNP Imagingcomm Europe B.V.
DNP Imagingcomm America Corporation, Foto Fantasy, Inc.
Tien Wah Press (Pte.) Ltd.
*MK Smart Joint Stock Company

Sales and services

Maruzen CHI Holdings Co., Ltd., INTELLIGENT WAVE INC.
CYBER KNOWLEDGE ACADEMY Co., Ltd.
DNP ID System Co., Ltd., DNP Art Communications Co., Ltd.
DNP Social Links Co., Ltd., DNP Digital Solutions Co., Ltd.
DNP HyperTech Co., Ltd., DNP Photo Imaging Japan Co., Ltd.
DNP PLANNING NETWORK Co., Ltd., DNP hollyhock Co., Ltd.
2Dfacto, Inc., DNP Metro Systems Co., Ltd., mobilebook.jp, Inc.
MARUZEN-YUSHODO Co., Ltd., MARUZEN PUBLISHING CO., LTD.
MaruzenJunkudo Bookstores Co., Ltd.
Toshokan Ryutsu Center Co., Ltd., honto Book Services Co., Ltd.
DNP Photo Imaging Europe SAS, DNP Photo Imaging Russia, LLC* Nihon Unisys, Ltd., BOOKOFF GROUP HOLDINGS LIMITEDBUNKYODO GROUP HOLDINGS CO., LTD.
Kyoiku Shuppan Co., Ltd.
The shares of Maruzen CHI Holdings Co., Ltd., INTELLIGENT WAVE
INC., Nihon Unisys, Ltd. and BOOKOFF GROUP HOLDINGSLIMITED are traded on the Tokyo Stock Exchange, and the shares of10

BUNKYODO GROUP HOLDINGS CO., LTD. are traded on the Tokyo
Stock Exchange’s JASDAQ market.
Lifestyle and Industrial Supplies
Production/sale of containers and packaging products, packaging equipment and systems, interior
and exterior decorative printed materials, and industrial supplies
Major companies
Production

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

Production and sales

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

Sales and services

DNP Lifestyle Materials Marketing Co., Ltd.
LIFESCAPE MARKETING CORPORATIONDNP・SIG Combibloc Co., Ltd.

Electronics
Production/sale of precision electronic components and other products
Major companies
Production

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

Production and sales

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

Sales

DNP Taiwan Co., Ltd.

Companies with multiple types of businesses
Production and sales DNP Fine Chemicals Co., Ltd., DNP Engineering Co., Ltd.
DNP Shikoku Co., Ltd.
* DIC Graphics Corporation
Sales and services

DNP Logistics Co., Ltd., DNP Trading Co., Ltd.
DNP Accounting Services Co., Ltd.
DNP Information Systems Co., Ltd.
DNP Human Services Co., Ltd., DNP Facility Services Co., Ltd.
DAP Technology Co., Ltd., DNP Hokkaido Co., Ltd.
DNP Tohoku Co., Ltd., DNP Chubu Co., Ltd.
DNP Nishi Nippon Co., Ltd.
DNP Asia Pacific Pte. Ltd., DNP Corporation USA
DNP America, LLC, DNP Holding USA Corporation

11

[BEVERAGES]
Beverages
Production/sale of carbonated beverages, mineral waters, and other products, centered on
Hokkaido Coca-Cola Bottling Co., Ltd.
The shares of Hokkaido Coca-Cola Bottling Co., Ltd. are traded on the Tokyo Stock Exchange andSapporo Securities Exchange.
* Equity-method affiliated companies

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

Customers
Information Communication

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

Electronics

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

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

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

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

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

(Sales and service provision, etc.)
DNP Lifestyle Materials Marketing
Co., Ltd.
LIFESCAPE MARKETINGCORPORATIONDNP・SIG Combibloc Co., Ltd.

DNP Engineering Co., Ltd.

DNP Shikoku Co., Ltd.

DIC Graphics Corporation*

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

DNP Accounting Services Co., Ltd.
DAP Technology Co., Ltd.
DNP Chubu Co., Ltd.
DNP America, LLC

DNP Information Systems Co., Ltd.

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

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

Dai Nippon Printing Co., Ltd.

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

13

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

Beverages
business3. Management policies(1) Core policies
The DNP Group’s basic management policy states its corporate philosophy as: “The DNP Group
connects individuals and society, and provides new value.” Based on this philosophy, the DNPGroup is aggressively pursuing its business activities and working to steadily expand its businessover the medium to long term.
The DNP Group is constantly aware of its social responsibility as a company and strives to deliver
new value to its various stakeholders in order to sustain growth and increase enterprise value overthe medium to long term. To achieve this goal, the DNP Group works to fulfill what it considers to be
its three responsibilities as a company: “Value Creation,” “Integrity in Conduct,” and “Transparency(Accountability).”
To fulfil these responsibilities, the DNP Group acts in accordance with its DNP Group Code of
Conduct and is focused on improving its corporate governance. The DNP Group has built internal
control systems to ensure proper business conduct and works to establish and operate structuresthat facilitate precise and comprehensive management decision-making, prompt and appropriate
execution of business based on these decisions, and supervision and auditing of this businessexecution. It also conducts rigorous training and education to improve the compliance awareness ofeach and every employee.
The DNP Group strives to conduct business in good faith to earn the deep trust of its various
stakeholders, including shareholders, client companies, consumers, and employees.
(2) Medium- and long-term management strategy and key issues
1) DNP Group vision
Amid significant changes in society and the environment and in individual values, the DNP Grouppositions its key challenge as achieving a shift away from its previous passive culture andtransforming into a company that proactively responds to people’s expectations and provides newvalue that resolves social issues in accordance with its corporate philosophy. The DNP Group iscommitted to unearthing latent value and building an optimal business model. It will do so by
marshalling its comprehensive capabilities as a group, combining its unique strengths in printing andinformation (P&I) and allying with external partners to generate sustainable profits.
2) Medium-term plan
As a step toward realizing its vision, the DNP Group aims to build a stable management structurethat will consistently generate ROE of at least 5.0% in the year ending March 2025, five years ahead.
To achieve this, it has drawn up a three-year medium-term plan beginning in the year ending March
2021. The DNP Group will work to achieve this plan via the two basic strategies of creating value
through P&I innovations and strengthening the business infrastructure needed to support growth.
< Basic strategy 1: Creating value through P&I innovations >The DNP Group is reviewing the value generated by its current businesses and identifying future
focus business areas based on the two criteria of profitability and market growth amid significant
changes in society and the environment. It intends to optimize the allocation of management
resources, primarily on these focus business areas, in order to build a strong business portfolio.
Based on this strategy, it will pursue three initiatives: creating value primarily in growth areas;
providing value optimized to each country and region; and increasing value using all available
restructuring approaches.

14

● Creating value primarily in growth areas:
The DNP Group will focus on several key themes in pursuing its business, with the aim of achieving
earnings growth in return for providing value to consumers and society. For instance, it is focusing
on data distribution businesses such as information bank-related services, BPO that handles
personal information using high-level information security infrastructure, and medical and healthcare
services such as smart medical checkups. In the IoT and next-generation communications business,
it is developing key components to support digital transformation and new services that leveragethem ahead of 5G and 6G infrastructure reforms.
● Providing value optimized to each country and region:
The DNP Group intends to address global markets by fully understanding the characteristics andneeds of each country and region and providing optimal value that is finely tuned to respond to them.
● Increasing value using all available restructuring approaches:
The DNP Group will promote a variety of group-wide reforms in order to build a strong businessportfolio. For instance, it is working to reduce the number of printed media production bases in the
Information Communication segment, review low-value-added products in the Lifestyle andIndustrial Supplies segment and streamline its bases, and downsize its color filters business in theElectronics segment. It will allocate the human resources, land, and facilities freed up by these
efforts to development and production in its focus businesses in order to reform its businessstructure.
< Basic strategy 2: Strengthening business infrastructure needed to support growth >The DNP Group will work to strengthen its business base through the integrated use of both financial
and non-financial capital in order to achieve longer-term growth. In particular, it will strengthen its
capital strategy, environmental initiatives, and human capital and human rights initiatives, anddevelop and implement specific action plans. Through these initiatives, it aims to create value bybuilding an organizational culture that is willing to pursue reforms and developing the infrastructureneeded to support the DNP Group’s sustainable growth.
● Capital strategy:
In line with the first of the above basic strategies, the DNP Group is investing in focus businesses
primarily in growth areas. It plans annual investments of around ¥100 billion over the next three
years. It will fund these business investments from cash on hand, by raising growth funding fromthird parties, and by reducing idle assets. It will also consider a comprehensive range of capital
strategies, including improving capital efficiency, stabilizing its financial position, and shareholder
returns.
● Environmental initiatives:
In March 2020, the DNP Group drew up its Environmental Vision 2050 in order to further strengthen
its value creation initiatives aimed at achieving a decarbonized, recycling-oriented society inharmony with nature. Climate change in particular represents a major global risk, and an early
response to these changes will allow the DNP Group to improve the sustainability of its corporate
activities. The DNP Group will also pursue activities relating to the entire value chain as well as itself,
and will focus on developing and supplying products and services that reduce environmental impact.

15

● Human capital and human rights initiatives:
The DNP Group will further promote diversity in order to capture ideas and skills from a wide rangeof human capital and create new value. The DNP Group has focused in particular on promoting theempowerment of women since the early 2000s, and it is taking steps to support female employees’
career development, revamp work styles, and reform its overall management. It aims to have female
managers represent at least 7.0% of the total by the end of the fiscal year ending March 2022, andto double the number of women in managerial and leadership positions.
The DNP Group is using these initiatives to strengthen its management infrastructure and support
P&I innovations by increasing both financial and non-financial capital and achieving synergies bycombining its strengths.
< Specific management targets >The DNP Group aims via the above initiatives to build a stable management structure that willconsistently generate ROE of at least 5.0% in the fiscal year ending March 2025. It also targets
operating income of ¥75 billion and an operating income to sales ratio of 5.1% in the fiscal year
ending March 2025.
These new targets do not factor in the impact of COVID-19. The DNP Group will promptly
announce reasonable and appropriate targets that factor in this impact once it judges that areasonable basis exists.

4. Basic approach to selecting accounting standards
The DNP Group uses Japanese GAAP in preparing consolidated financial statements. It plans to
consider adopting IFRS going forward and respond appropriately based on domestic and overseas
circumstances.

165. Consolidated financial statements and key notes(1) Consolidated balance sheets(Million yen)
Year ended March 31, 2019
(As of March 31, 2019)Year ended March 31, 2020
(As of March 31, 2020)

268,046
351,450
15,00079,80930,07423,18733,226(1,515)799,280

373,013
330,798
18,00078,19932,231
23,84929,279(1,361)
884,010549,251(365,373)
183,878
708,330(640,815)
67,514
147,924
11,760138,261(108,219)
30,042
441,120

520,307(362,218)
158,089
696,459(631,443)
65,016
141,423
16,428
131,663(103,254)
28,409409,367

2,489
25,044
1,380
28,914

1,187
20,237
1,291
22,716393,104
71,38011,06832,468(2,315)505,707975,742
1,775,022

298,894
64,68913,88830,443(2,286)405,629
837,713
1,721,724

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

17

(Million yen)
Year ended March 31, 2019
(As of March 31, 2019)Year ended March 31, 2020
(As of March 31, 2020)

246,138
42,47451,4902,731
7,448
18,145
19,16280,065
467,655

238,066
39,05152,4907,008
16,621
18,945
20,636
87,831
480,651

59,61010,04570,211
34,73365,30020,845
260,745
728,400

107,120
5,977
54,66035,68742,821
26,230272,497753,149

114,464
144,765
626,949(62,898)
823,281

114,464
145,024
676,346(122,911)
812,923

170,073

110,051(1)(2,398)5,208

5(3,448)(3,751)

172,881

102,856

50,4591,046,622
1,775,022

52,794
968,574
1,721,724

LIABILITIESCurrent liabilities
Notes and trade payables
Short-term bank loans
Bonds redeemable within 1 year
Current portion of long-term debt
Income taxes payable
Reserve for bonuses
Repair reserve
Other
Total current liabilities
Long-term liabilities
Bonds
Long-term debt
Repair reserve
Net defined benefit liability
Deferred tax liabilities
Other
Total long-term liabilities
TOTAL LIABILITIESNET ASSETSStockholders’ equity
Common stock
Capital surplus
Retained earnings
Treasury stock
Total stockholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Net deferred gains (losses) on hedges
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive
incomeNon-controlling interests
TOTAL NET ASSETSTOTAL LIABILITIES AND NET ASSETS

18

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

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

19Year ended
March 31, 2019
1,401,505
1,119,390
282,114232,216
49,898Year ended
March 31, 2020
1,401,894
1,109,051
292,842
236,568
56,274

5,255
4,161
5,777
15,194

5,586
6,050
4,024
15,662

2,068
1,426
3,337
6,832
58,259

1,466
2,784
3,898
8,150
63,786

2,937
18,025
2,126
23,08930,24851,45030
81,7282,842
16,6854,305
75,000
1,202
100,035

5,820
26,516
7,082
–
3,376
42,795(18,685)

102,719

15,198(936)
14,262(32,947)

26,063
4,560
30,62472,094

2,721

2,597

(35,668)

69,497

Consolidated statements of comprehensive income(Million yen)

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

20

Year ended
March 31, 2019(32,947)

Year ended
March 31, 2020
72,094

2,047(60,054)

3(3,978)(1,403)10(445)(8,894)

(414)

(174)

(3,746)(36,694)(69,558)
2,536(38,590)
1,896

(527)
3,064

(3) Consolidated statements of changes in net assets
The year ended March 31, 2019 (April 1, 2018 – March 31, 2019)(Million yen)
Stockholders’ equity

Balance at the beginning ofcurrent period

Commonstock

CapitalsurplusRetainedearnings

Treasurystock

114,464

144,264

681,976(62,908)

Total
stockholders’equity877,797

Changes of items during theperiodCash dividends paid

(19,317)(19,317)

Net loss attributable toparent company
shareholders(35,668)(35,668)

(41)

(41)

Change of application ofequity method
Change in ownershipinterest of parent arisingfrom transactions with
non-controllingshareholders
Purchases of treasury
stock

(90)

Disposal of treasury stock592

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

(90)

(0)

(15)

(15)

25

617
–

–

501

(55,027)

10(54,516)

114,464

144,765

626,949(62,898)

823,281

Accumulated other comprehensive income

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

Net deferredgains (losses)on hedges

Foreigncurrencytranslation
adjustments

Remeasurements ofdefined benefit
plans

Total
accumulated
othercomprehensive
incomeNoncontrollinginterests

Total net
assets168,155

(3)

1,410

6,241

175,803

48,9501,102,550(19,317)

Cash dividends paid
Net loss attributable toparent company
shareholders
Change of application ofequity method(35,668)(41)

Change in ownershipinterest of parent arisingfrom transactions with
non-controllingshareholders
Purchases of treasury
stock

(90)

(15)
617

Disposal of treasury stock
Net changes in items otherthan stockholders’ equity
Total changes of items
during the period
Balance at the end of current
period1,917

2(3,809)(1,032)(2,921)

1,508(1,412)

1,917

2(3,809)(1,032)(2,921)

1,508(55,928)

170,073(1)(2,398)5,208

172,881

50,4591,046,622

21

The year ended March 31, 2020 (April 1, 2019 – March 31, 2020)(Million yen)
Stockholders’ equity

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

Total
stockholders’equityCommonstock

CapitalsurplusRetainedearnings

Treasurystock

114,464

144,765

626,949(62,898)(821)
114,464

144,765

626,127

823,281(821)(62,898)

822,459

Changes of items during theperiodCash dividends paid
Net income attributable toparent company
shareholders
Change in ownershipinterest of parent arisingfrom transactions with
non-controllingshareholders(19,279)(19,279)

69,497

69,497258

258

Change in treasury stock
resulting from change inownership of affiliates
accounted for by the equity
methodPurchases of treasury
stock

0

Disposal of treasury stock
Net changes in items otherthan stockholders’ equity
Total changes of items
during the period
Balance at the end of current
period00(60,013)(60,013)

0

0
–

–

258

50,218(60,013)(9,536)

114,464

145,024

676,346(122,911)

812,923

Accumulated other comprehensive income

Balance at the beginning ofcurrent period
Cumulative impact ofaccounting changes
Balance at the beginning ofcurrent period reflecting
accounting changes
Changes of items during theperiodValuationdifference on
available-forsale securities

Net deferredgains (losses)on hedges

Foreigncurrencytranslation
adjustments

Remeasurements ofdefined benefit
plans

Total
accumulated
othercomprehensive
incomeNoncontrollinginterests

Total net
assets170,073(1)(2,398)5,208

172,881

50,4591,046,622(54)
170,019(54)(1)(2,398)5,208

172,827(875)
50,459(19,279)

Cash dividends paid
Net income attributable toparent company
shareholders
Change in ownershipinterest of parent arisingfrom transactions with
non-controllingshareholders

69,497258

Change in treasury stock
resulting from change inownership of affiliates
accounted for by the equity
method0

Purchases of treasury
stock(60,013)0

Disposal of treasury stock
Net changes in items otherthan stockholders’ equity
Total changes of items
during the period
Balance at the end of current
period

1,045,746(59,968)7(1,049)(8,960)(69,971)

2,335(67,635)(59,968)7(1,049)(8,960)(69,971)

2,335(77,172)

110,051

5(3,448)(3,751)

102,856

52,794

968,57422

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

Year ended
March 31, 2019
Cash flows from operating activities
Income (Loss) before income taxes and non-controllinginterests
Depreciation
Impairment loss
Decrease of doubtful receivables, net
Increase of net defined benefit asset
Increase (Decrease) of net defined benefit liability
Equity in gains of affiliates
Amortization of consolidation goodwill, net
Interest and dividend income
Interest expense
Net gain on sales of investment securities
Net loss on devaluation of investment securities
Net gain on sale or disposal of fixed assets
Repair reserve provisions
Decrease in trade receivables(Increase) Decrease in inventories
Decrease in trade payables
Other
Sub-total
Payments for repair costs
Payments for extra retirement payments
Payment of income taxes
Net cash provided by operating activities
Cash flows from investing activities
Net (increase) decrease in time deposits
Payments for purchases of property, plant andequipment
Proceeds from sales of property, plant and equipment
Payments for purchases of investment securities
Proceeds from sales of investment securities
Payments for purchase of stock in subsidiaries resulting
in change in scope of consolidation
Proceeds from purchase of stock in subsidiaries
resulting in change in scope of consolidation
Payments for purchase of intangible fixed assets
Interest and dividends received
Other
Net cash provided by (used in) investing activities

23

Year ended
March 31, 2020

(18,685)

102,71959,08016,685(388)(5,682)(291)(4,161)
1,751(5,255)
2,068(20,007)
4,322(67)
75,0002,098
1,997(1,912)
2,323
108,876(22,750)(767)(16,386)
68,97154,474
26,516(186)(7,441)
2,169(6,050)1,659(5,586)
1,466(50,086)
7,232(24,367)–
22,195(1,286)(9,011)
10,235
124,652(14,076)(335)(16,302)93,937(136,981)

135,777(37,578)(39,932)

6,942(2,404)
26,785

46,104(1,028)
58,112–(1,154)–38(9,800)10,515(4,387)(146,909)(9,775)
9,196(6,281)
191,057(Million yen)

Year ended
March 31, 2019
Cash flows from financing activities
Net 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
Proceeds from payments from non-controlling interests
Payments for purchases of treasury stock
Payments for purchases of treasury stock of subsidiaries
Interest paid
Dividends paid
Dividends paid to non-controlling interests
Payments for purchase of stock in subsidiaries not
resulting in change in scope of consolidation
Other
Net cash used in financing activities
Effect of exchange rate changes on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

24

Year ended
March 31, 2020

(2,282)2,500(4,142)
2,442(2,290)75(15)(2)(2,065)(19,324)(459)(3,424)2,700(2,521)
99,496(51,490)–(60,060)(152)(1,570)(19,283)
(509)

(89)

–

(6,541)(32,196)(4,466)(41,280)(1,031)(118)(111,165)
244,936
133,771

243,595
133,771377,367(5) Notes regarding consolidated financial statements[Notes on premise of a going concern]
None[Basis of presenting consolidated financial statements]
1) Scope of consolidation and application of the equity method of accounting
Number of consolidated subsidiaries: 108
Major companies:
Maruzen CHI Holdings Co., Ltd.
Hokkaido Coca-Cola Bottling Co., Ltd., INTELLIGENT WAVE INC.
DNP Technopack Co., Ltd., DNP Fine Chemicals Co., Ltd.
DNP Logistics Co., Ltd.
Number of equity-method affiliated companies: 19
Major companies:
Nihon Unisys, Ltd., BOOKOFF GROUP HOLDINGS LIMITEDBUNKYODO GROUP HOLDINGS CO., LTD.
Kyoiku Shuppan Co., Ltd., DIC Graphics Corporation
Photronics DNP Mask Corporation
MK Smart Joint Stock Company
Photronics DNP Mask Corporation Xiamen
2) Changes in scope of consolidation and application of the equity method of accounting(Scope of consolidation)
Newly included:
3 DNP PLANNING NETWORK Co., Ltd. and two othercompanies
Excluded:
2 DNP Field Eyes Co., Ltd. and one other company(Application of equity method)
Newly included:
1

Hong Kong Andex Electronic Material Co., Ltd.

3) Matters concerning the fiscal years of consolidated subsidiaries
Of the consolidated subsidiaries, Hokkaido Coca-Cola Bottling Co., Ltd. and 25 others have fiscal
years that end on December 31, while Maruzen CHI Holdings Co., Ltd. and 25 others have fiscal
years that end on January 31. Their financial statements as of the same date are used in the
preparation of these consolidated financial statements.
Additionally, INTELLIGENT WAVE INC.’s fiscal year ends on June 30, mobilebook.jp, Inc. and one
other company have fiscal years that end on September 30, DNP Tamura Plastic Co., Ltd.’s fiscal
year ends on October 31, and DNP・SIG Combibloc Co., Ltd.’s fiscal year ends on December 31.
Consequently, financial statements based on provisional account settlements are used.
Any material transactions during the time between the foregoing settlement dates or provisional
settlement dates and the consolidated settlement date are adjusted for on a consolidated basis.
4) Summary of significant accounting policies(a) Criteria and methods for valuing significant assets• Marketable securities
Other securitiesThose with market
prices available

Fair market value based on market prices as of the balance
sheet date
(The related valuation differences are directly included in net
assets and cost of sales is computed mainly by the25

Those without market
prices available

moving-average method.)
Mainly cost based on the moving-average method• Derivatives

Mainly fair market value• Inventories

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

Merchandise
Finished products, work inprogress

Mainly cost based on the retail inventory cost method

Raw materials

Mainly cost based on the moving-average method

Supplies

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

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

• Lease assets

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

•Right-of use assets(c) Basis for recording significant allowances
To cover possible losses on doubtful accounts, including• Allowance for doubtful
trade receivables and loans, the allowance for doubtful
accounts
accounts is based on historical default rates for generalaccounts and on estimates of the amounts that may not berecoverable based on examinations of the recoverability of
specific accounts including accounts at risk of default.
To cover payments of employee bonuses in the following• Reserve for bonuses
fiscal year, the reserve for bonus is based on the estimatedamount that is attributable to the current fiscal year.
The repair reserve is based on a rational estimate of the• Repair reserveamount of repair costs that will be required in the future to
repair defects for some products.

26

(d) Accounting treatment of retirement benefits• Method of attributing expected retirement benefits to periods
In calculating retirement benefit obligations, a benefit formula is used to allocate expected
retirement benefit payments in the period until the end of the current fiscal year.
• Method of amortizing actuarial gains/losses and prior service costs
Prior service costs are amortized using the straight-line method over a certain number ofyears that is equal to or less than the average future service period of eligible employees at
the time the costs are incurred (generally six years).
Actuarial gains/losses are amortized starting in the next fiscal year after they are incurred
using the declining balance method over a certain number of years that is equal to or lessthan the average future service period of eligible employees in the fiscal year the actuarial
gains/losses are incurred (generally nine years).
(e) Accounting treatment of consumption taxes
National and local consumption taxes are excluded from transaction amounts.
(f) Amortization of goodwill
Goodwill is amortized using the straight-line method for an effective period not more than 20
years. In the current fiscal year, straight-line amortization over five years is generally used.
(g) Scope of funds in the consolidated statements of cash flows
Cash and cash equivalents comprise cash on hand, immediately withdrawable funds, andshort-term investments that can be easily converted to cash, have insignificant risk of changes
in value, and have maturities within three months of the purchase date.
[Changes in accounting policies](Adoption of ASC 606, “Revenue from Contracts with Customers”)
The DNP Group’s US GAAP subsidiaries adopted ASC 606 “Revenues from Contracts with
Customer” from the fiscal year ended March 2020.
This results in the recognition of revenue when promised goods or services are transferred to thecustomer, in an amount that reflects the consideration to which the subsidiary expects to be entitledin exchange for those goods or services.
These subsidiaries applied this standard in line with the transitional approach of recognizing the
cumulative impact from the new standard on the date from which it was adopted, resulting in an
adjustment to retained earnings at the beginning of the fiscal year ended March 2020.
As a result, the balance of retained earnings at the beginning of the fiscal year ended March 2020
declined by ¥875 million. This factor had a minimal impact on the DNP Group’s consolidated
financial statements for the fiscal year ended March 2020.
(Adoption of ASU 2016-01, “Recognition and Measurement of Financial Assets and Financial
Liabilities”)
The DNP Group’s US GAAP subsidiaries adopted ASU 2016-01, “Recognition and Measurement of
Financial Assets and Financial Liabilities,” from the fiscal year ended March 2020.
This accounting standard requires equity investments (except those accounted for under theequity method or those that result in consolidation of the investee) to be measured at fair value withchanges in fair value recognized in net income.
These subsidiaries applied this standard in line with the transitional approach of recognizing the
cumulative impact from the new standard on the date from which it was adopted, resulting in an

27

adjustment to retained earnings and other cumulative comprehensive income at the beginning of the
fiscal year ended March 2020.
As a result, at the beginning of the fiscal year ended March 2020, retained earnings increased by¥54 million and valuation difference on available-for-sale securities fell by ¥54 million. This factor
had a minimal impact on the DNP Group’s consolidated financial statements for the fiscal year
ended March 2020.
(Adoption of IFRS 16, “Leases”)
The DNP Group’s IFRS subsidiaries adopted IFRS 16 “Leases” from the beginning of the fiscal year
ended March 2020.
This standard requires that lessees in principle recognize the right-of-use asset and lease liability
arising from all lease transactions, and recognize depreciation of the right-of-use asset and intereston the lease liability.
The adoption of this accounting standard had a minimal impact on the DNP Group’s consolidated
financial statements for the fiscal year ended March 2020.
[Consolidated balance sheets]

Discounts on notes receivables

Year ended
March 31, 2019¥488 million

Year ended
March 31, 2020¥534 million

Year ended
March 31, 2019¥33,786 million

Year ended
March 31, 2020
¥ 33,603million[Consolidated statements of income]

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

2. Impairment losses
The DNP Group recorded impairment losses for the following asset groups in the current
consolidated fiscal year.
Location
Kuki City (Saitama),
Shiraoka City (Saitama), other
Himeji City (Hyogo)
Mihara City (Hiroshima)
Kashiwa City (Chiba), other

Color filter production facilities
Color filter production facilities
System assets

Kyoto City (Kyoto)

Packaging business assets

Kita-Kyushu City (Fukuoka)

Idle assets
Business assets,
idle assets

Other

Application
Publishing business assets

Category
Buildings and structures,
machinery and equipment, other
Buildings and structures, other
Buildings and structures, other
Software, other
Buildings and structures,
machinery and equipment, other
Buildings and structures
Buildings and structures,land, otherIn calculating impairment losses, the DNP Group combines assets based mainly on the businessgroups that serve as profit/loss units. It also considers impairment losses for each individual item foridle assets.
As a result, the DNP Group lowered the carrying amounts of business asset groups withdiminished profitability and idle assets that are not expected to be used to their recoverable amounts,
and recorded this decrease as an impairment loss (¥26,516 million) under extraordinary losses.
The impairment loss breaks down into buildings and structures at ¥14,485 million, machinery andequipment at ¥3,978 million, land at ¥1,021 million, software at ¥5,512 million, and other at ¥1,518

28

million.
The DNP Group valued several assets at zero, mainly because they are not expected to generate
future cash flow from business activities. Specifically, these are Publishing business assets, color
filter production facilities in Mihara City (Hiroshima), system assets, and other business assets.
The DNP Group has deducted the book value of assets that will no longer be required due to plantclosures. Specifically, these are color filter production facilities in Himeji City (Hyogo) and packaging
business assets in Kyoto City (Kyoto).
The DNP Group calculates the recoverable value of idle assets using the net sale price, which isbased on appraised real estate value. However, it lowers the book value of idle assets for which asale price cannot be calculated to residual value.
[Consolidated statements of changes in net assets]
The year ended March 31, 2019 (April 1, 2018 – March 31, 2019)
1. Types and number of shares outstanding and treasury stock(Shares)

Stock type

Number ofshares at the
beginning of
the year
ended March
2019

Increase in
number ofshares during
the year
ended March2019

Decrease in
number ofshares during
the year
ended March
2019

Number ofshares at theend of theyear ended
March 2019

Outstanding shares
Common stock
324,240,346––
324,240,346
Treasury stock
Common stock
22,676,600
6,336
262,191
22,420,745
Notes:The number of treasury shares of common stock increased by 6,336 shares due to the1.
repurchase of odd-lot shares.
The number of treasury shares of common stock decreased by 262,191 shares, comprising a2.
decrease of 261,756 shares due to an equity-method affiliate selling shares (DNP shares) thatwere held at DNP and a decrease of 435 shares due to the sale of odd-lot shares.

2. Detailed information regarding dividends(1) Dividends paid
Resolution
General meeting ofshareholders on
June 28, 2018
Board of Directors’
meeting on
November 13, 2018

Stock type

Total dividends(Million yen)

Dividend pershare (Yen)Dividend
record date

Effective dateCommon stock

9,658

32

March 31,2018

June 29,
2018

Common stock

9,658

32

September 30,
2018

December 10,
2018(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 27, 2019

Common
stock

9,658

Source ofdividends
Retainedearnings

29

Dividend
per share
(Yen)

32

Dividend
record date

Effective
date

March 31,2019

June 28,
2019

The year ended March 31, 2020 (April 1, 2019 – March 31, 2020)
1. Types and number of shares outstanding and treasury stock(Shares)

Stock type

Number ofshares at the
beginning of
the year
ended March
2020

Increase in
number ofshares during
the year
ended March
2020

Decrease in
number ofshares during
the year
ended March
2020

Number ofshares at theend of theyear ended
March 2020

Outstanding shares
Common stock
324,240,346––
324,240,346
Treasury stock
Common stock
22,420,745
20,938,721
122
43,359,344
Notes:The number of treasury shares of common stock increased by 20,938,721 shares due to the1.
repurchase of 20,933,700 shares decided on by the Board of Directors, and by 5,021 shares dueto the repurchase of odd-lot shares.
The number of treasury shares of common stock declined by 122 shares due to a decrease of 116
2.
shares resulting from the sale of odd-lot shares and by six shares due to a change in the DNPGroup’s ownership stake in an equity-method affiliate.

2. Detailed information regarding dividends(1) Dividends paid
Resolution
General meeting ofshareholders on
June 27, 2019
Board of Directors’
meeting on
November 12, 2019

Stock type

Total dividends(Million yen)

Dividend pershare (Yen)Dividend
record date

Effective dateCommon stock

9,658

32

March 31,2019

June 28,
2019

Common stock

9,620

32

September 30,
2019

December 10,
2019(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, 2020

Common
stock

8,988

Source ofdividends
Retainedearnings

Dividend
per share
(Yen)

32

Dividend
record date

Effective
date

March 31,2020

June 29,
2020[Segment information, etc.](Segment information)
1. Overview of the reporting segments(1) Method of determining reporting segments
DNP’s reporting segments are regularly reviewed by the Board of Directors using thesegregated financial information available within each segment to determine the allocation ofbusiness resources and evaluate business results.
The DNP Group bases its business divisions on the products and services provided anddevelops its business activities based on a comprehensive domestic and overseas strategy foreach business division. The four reporting segments are Information Communication, Lifestyleand Industrial Supplies, Electronics, and Beverages.
(2) Products and services in each reporting segment
Information Communication is involved in the production and sale of publications, commercial
printed materials, business forms, and photographic materials and in educational andpublications distribution. Lifestyle and Industrial Supplies is involved in the production and saleof packaging materials, interior and exterior decorative printed materials, and industrial
supplies. Electronics is involved in the production and sale of precision electronic components

30and other products. Beverages is involved in the production and sale of carbonated beverages,
mineral waters and other products.
2. Method of calculating sales, income/loss, assets, and other items by reporting segment
The accounting method used for reporting business segments is generally the same as statedin “Basis of presenting consolidated financial statements.”
Reporting segment income figures are based on operating income. Inter-segment sales andtransfers are based on third-party transaction prices.
3. Information on sales, income/loss, assets, and other items by reporting segment
The year ended March 31, 2019 (April 1, 2018 – March 31, 2019)
Reporting segment

Net sales
Outside customers
Inter-segment
Total
Segment income
Segment assets
Other items
Depreciation andamortization
Amortization of
goodwill
Impairment loss
Investments inequity-method affiliates
Increase in property,
plant and equipment
and in intangible fixed
assets

Notes:

1.

2.

(Million yen)Amounts
reported on
Adjustment
consolidated
Note 1
financialstatements Note 2

Information
Communication

Lifestyle andIndustrial
Supplies

Electronics

757,902
4,408
762,310
24,843893,824

395,182
1,987
397,1698,378
445,329

192,436–
192,436
36,912225,057

55,98413
55,997
2,121
48,4661,401,505
6,408
1,407,914
72,255
1,612,677–(6,408)(6,408)(22,357)
162,345

1,401,505–
1,401,505
49,898
1,775,022

25,693

16,384

11,5782,709

56,364

2,715

59,080

538

1,213

–

–

1,751

–

1,751

4,065

1,502

4,551

28

10,1486,537

16,685

1,738

493

17,076–

19,30737,45056,757

19,697

12,777

4,613

1,927

39,016

2,087

41,103

Beverages

Total

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

31

The year ended March 31, 2020 (April 1, 2019 – March 31, 2020)
Reporting segment
Information
Communication

Lifestyle andIndustrial
Supplies

Electronics

769,749
3,329
773,079
30,416
796,797

390,271
1,086
391,357
11,144423,906

186,602–
186,60234,135
208,396

55,27021
55,292
2,047
49,9551,401,894
4,437
1,406,331
77,742
1,479,055–(4,437)(4,437)(21,468)
242,668

1,401,894–
1,401,894
56,274
1,721,724

23,547

16,022

9,654

2,788

52,0132,461

54,474

446

1,213

–

–

1,659

–

1,659

16,187

2,545

5,205

1

23,9402,575

26,516

1,679

652

16,161–

18,493

41,471

59,96520,00821,265

11,802

2,666

55,742

1,419

57,162

Net sales
Outside customers
Inter-segment
Total
Segment income
Segment assets
Other items
Depreciation andamortization
Amortization of
goodwill
Impairment loss
Investments inequity-method affiliates
Increase in property,
plant and equipment
and in intangible fixed
assets

Notes:

1.

2.

(Million yen)Amounts
reported on
Adjustment
consolidated
Note 1
financialstatements Note 2

Beverages

Total

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

(Related information)
The year ended March 31, 2019 (April 1, 2018 – March 31, 2019)
1. Information on products and services
Omitted because similar information is disclosed in segment information.
2. Regional information(1) Net sales(Million yen)Japan
1,163,128
Notes:

1.
2.
3.

Asia

Other regions

162,056

Total

76,321

1,401,505

Sales are classified by country or region, based on the location of customers.
Country and regional segments are based on geographic proximity.
Main countries and regions included in each segment:
Asia:
South Korea, China, Taiwan, Indonesia
Other:
United States, France, Germany, United Kingdom(2) Property, plant and equipment
Omitted because the value of property, plant and equipment located in Japan is over 90%of the value of property, plant and equipment as reported in the consolidated balance
sheets.

32

3. Information on major customers
Not described because sales to specific outside customers are less than 10% of sales asreported in the consolidated statements of income.
The year ended March 31, 2020 (April 1, 2019 – March 31, 2020)
1. Information on products and services
Omitted because similar information is disclosed in segment information.
2. Regional information(1) Net sales(Million yen)Japan
1,155,716
Notes:

1.
2.
3.

Asia

Other regions

169,658

Total

76,5191,401,894

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

33

[Per share information]
Year ended
March 31, 2019
(April 1, 2018 –March 31, 2019)Year ended
March 31, 2020
(April 1, 2019 –March 31, 2020)

Net assets per share¥3,300.52¥3,260.38

Net income (loss) per share¥(118.22)¥235.18

Diluted net income per share–¥235.08

Notes: 1. Diluted net income per share for the previous fiscal year is not listed because, although there
are potential dilutive shares, the DNP Group incurred a net loss per share.
2. The basis for calculating net income (loss) per share and diluted net income per share is asfollows.

(1) Net income (loss) per share
Net income (loss) attributable to parent company
shareholders
Amounts not attributable to commonshareholders
Net income (loss) attributable to parent company
common shareholders
Average number of common shares outstanding
during the fiscal year(2) Diluted net income per share
Adjustments to net income attributable to parent
company shareholders
Of which, impact of dilutive stock ofconsolidated subsidiaries and affiliates
Increase in common stockYear ended
March 31, 2019
(April 1, 2018 –March 31, 2019)Year ended
March 31, 2020
(April 1, 2019 –March 31, 2020)(Million yen)

(35,668)

69,497(Million yen)––

(Million yen)

(35,668)

69,497(Thousand shares)

301,715

295,506(Million yen)

–

(30)

(Million yen)

–

(30)

(Thousand shares)––

Year ended
March 31, 2019
(As of March 31,
2019)Year ended
March 31, 2020
(As of March 31,
2020)

968,574
52,794
52,794

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

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

Of which, non-controlling interests
Net assets at fiscal year-end pertaining to common
stock
Number of common shares outstanding(Million yen)

1,046,622
50,45950,459(Million yen)

996,162

915,779(Thousand shares)

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

324,240
22,420324,240
43,359(Thousand shares)

301,819

280,881[Significant subsequent events]
None

34

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

Year ended
March 31, 2019
(As of March 31, 2019)Year ended
March 31, 2020
(As of March 31, 2020)

169,329
18,422
29,280242,965
3,501
9,427
1,704
40,128(1,232)
513,527

266,478
14,936
29,059224,819
2,494
10,313
1,017
38,166(858)
586,428420,049(278,373)
141,676
30,617(25,096)
5,520
548,440(505,580)
42,8591,368(1,250)118
51,462(41,898)
9,564
126,201
1,873
(850)
1,022
7,565
334,528

396,401(276,049)
120,351
29,398(24,771)4,626
537,760(495,203)
42,556
1,451(1,276)
174
50,639(42,401)
8,237
119,745
1,885(1,004)881
8,898
305,472

19,727
1,178
20,905

14,931
1,109
16,040334,362
154,471
1,364
56,84818,512(8,264)557,295
912,729
1,426,257

236,229
141,928
1,603
62,15018,894(9,029)451,777
773,290
1,359,719

ASSETS
Current assets
Cash and time deposits
Notes receivable
Electronically recorded monetary claims
Trade receivable
Merchandise and finished goods
Work in progress
Raw materials and supplies
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 assets
Accumulated depreciation
Lease assets, net
Construction in progress
Total property, plant and equipment
Intangible fixed assets
Software
Other
Total intangible fixed assets
Investments and other assets
Investment securities
Investments in securities in affiliates
Investments in capital of affiliates
Prepaid pension costs
Other
Allowance for doubtful accounts
Total investments and other assets
Total fixed assets
TOTAL ASSETS

35

(Million yen)

Year ended
March 31, 2019
(As of March 31, 2019)Year ended
March 31, 2020
(As of March 31, 2020)

13,102200,873
50,000345
33,707–
17,4997,034
207,759
8,188
176
19,162807
173
558,829

11,275206,936
50,000329
40,846
5,005
18,153
5,661
220,524
8,395
169
20,636944
188
589,067

50,000
818
1,007
5,825
9,586
70,211357
59,715
33
197,555
756,384

100,000
672
1,482
5,425
10,02854,660324
37,69824
210,316
799,384

114,464

114,464

144,898–
144,898

144,8980
144,898

23,30023,30021

20282,780(792)
305,309(62,868)
501,803

232,780
59,928316,028(122,881)
452,509

168,069

107,825

168,069
669,873
1,426,257

107,825
560,334
1,359,719

LIABILITIESCurrent liabilities
Notes payable
Trade payable
Bonds redeemable within 1 year
Lease obligations
Accounts payable - other
Income taxes payable
Accrued expenses
Advances received
Deposits payable
Reserve for bonuses
Reserve for bonuses to directors
Repair reserve
Notes payable for facilities
Other
Total current liabilities
Long-term liabilities
Bonds
Lease obligations
Asset retirement obligations
Long-term accounts payable
Provision for retirement benefits
Repair reserve
Reserve for environmental measures
Deferred tax liabilities
Other
Total long-term liabilities
TOTAL LIABILITIESNET ASSETSStockholders’ equity
Common stock
Capital surplus
Capital reserve
Other capital surplus
Total capital surplus
Retained earnings
Legal reserve
Other retained earnings
Reserve for depreciation reduction of fixed
assetsOther reserves
Retained earnings brought forward
Total retained earnings
Treasury stock
Total stockholders’ equity
Valuation and translation adjustments
Valuation difference on available-for-salesecurities
Total valuation and translation adjustments
TOTAL NET ASSETSTOTAL LIABILITIES AND NET ASSETS

36

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

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

37

Year ended
March 31, 2019
982,691
852,494130,197
132,770(2,573)

Year ended
March 31, 2020
984,888855,012
129,876
136,384(6,507)

178
17,12629,98747,292

155
20,35229,39149,8991,532
24,744
26,27718,441

1,073
26,95828,032
15,3592,648
18,025
2,124
22,79824,94451,444
110
76,499

1,858
9,354
4,285
17
75,0002,461
92,978(51,738)
410
(952)
(542)
(51,196)

5,191
22,744
7,072
14,596–
1,727
51,332
40,526
6,940
3,587
10,52729,998

(3) Non-consolidated statements of changes in net assets
The year ended March 31, 2019 (April 1, 2018 – March 31, 2019)(Million yen)
Stockholders’ equity
Capital surplus
Commonstock

Retained earnings
Other retained earnings
Other
reserve

Retainedearnings
brought
forwardTotal
retainedearnings

282,780

69,719375,823

0

–

1

–

Cash dividends paid

(19,317)(19,317)

Net loss(51,196)(51,196)(0)(0)

Balance at the beginning ofcurrent period

114,464

Capitalreserve

Total capitalsurplus

Legal reserve

144,898

144,898

23,300Changes of items during theperiodReversal of reserve for
special depreciation
Reversal of reserve fordepreciation reduction of
fixed assets

Reserve for Reserve fordepreciation
specialdepreciation reduction of
fixed assets

0

23

(0)
(1)

Purchases of treasury stock
Disposal of treasury stock
Net changes in items otherthan stockholders’ equity
Total changes of items during
the period
Balance at the end of current
period

–

–

–

–

(0)

(1)

–

(70,511)(70,513)

114,464

144,898

144,898

23,300–21

282,780(792)

305,309

Valuation and translation
adjustments

Stockholders’ equity

Balance at the beginning ofcurrent period

Treasury
stock

Total
stockholders’equityValuationdifferenceonavailablefor-salesecurities

Total
valuationandtranslation
adjustments

Total net
assets(62,854)572,331

165,365

165,365

737,696

Changes of items during theperiodReversal of reserve for
special depreciation
Reversal of reserve fordepreciation reduction of
fixed assets

–

–

–

–

Cash dividends paid

(19,317)(19,317)

Net loss(51,196)(51,196)(15)

Purchases of treasury stock

(15)

(15)

Disposal of treasury stock
Net changes in items otherthan stockholders’ equity
Total changes of items during
the period
Balance at the end of current
period

1

1

1
2,704

2,704

2,704

(14)

(70,527)

2,704

2,704

(67,823)(62,868)

501,803

168,069

168,069

669,87338

The year ended March 31, 2020 (April 1, 2019 – March 31, 2020)(Million yen)
Stockholders’ equity
Capital surplus
Commonstock

Balance at the beginning ofcurrent period

114,464Retained earnings
Other retained earnings

Capitalreserve

144,898

Other capitalsurplus

Total capitalsurplus

Legal reserve–

144,898

23,300Reserve fordepreciation
reduction of
fixed assets

Other
reserve

Retainedearnings
brought
forwardTotal
retainedearnings

21

282,780(792)

305,309

1–

Changes of items during theperiodReversal of reserve fordepreciation reduction of
fixed assets(1)

Reversal of other reserve

50,000–Cash dividends paid

(50,000)(19,279)(19,279)

Net income

29,99829,998Purchases of treasury stock
Disposal of treasury stock
Net changes in items otherthan stockholders’ equity
Total changes of items during
the period
Balance at the end of current
period

0

–

–

0

0

–

(1)

(50,000)

60,72010,719114,464

144,8980

144,898

23,30020

232,780

59,928316,028

Valuation and translation
adjustments

Stockholders’ equity

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

0Treasury
stock

Total
stockholders’equityValuationdifferenceonavailablefor-salesecurities

Total
valuationandtranslation
adjustments

Total net
assets(62,868)

501,803

168,069

168,069

669,873–

Reversal of other reserve
Cash dividends paid
Net income

–

–

–

(19,279)(19,279)

29,99829,998Purchases of treasury stock(60,013)(60,013)(60,013)

Disposal of treasury stock
Net changes in items otherthan stockholders’ equity
Total changes of items during
the period
Balance at the end of current
period000(60,244)(60,244)(60,244)(60,013)(49,293)(60,244)(60,244)(109,538)(122,881)

452,509

107,825

107,825

560,334(4) Notes regarding non-consolidated financial statements[Notes on premise of a going concern]None39