Consolidated Financial Results for the Fiscal Year Ended March 31, 2019 [J-GAAP]May 14, 2019

Company Name:

Dai Nippon Printing Co., Ltd.

Stock exchange listing:Tokyo
Stock code:
7912
URL: http://www.dnp.co.jp/
Representative:
Yoshinari Kitajima, President
Contact person:
Takaaki Tamura, General Manager, Corporate Communication
Telephone:+81-3-6735-0101
General meeting of shareholders:June 27, 2019
Dividend payment date:June 28, 2019
Securities report issuing date:June 27, 2019
Preparation of earnings presentation material: None
Holding of earnings announcement:
None*Amounts under one million yen have been rounded down.

1. Consolidated financial results for the year ended March 31, 2019
(April 1, 2018 – March 31, 2019)(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, 2019

1,401,505(0.8)

49,898

7.6

58,25914.3(35,668)–

Year ended March 31, 2018

1,412,251

0.1

46,37247.6

50,971

38.7

27,5019.0

Note: Comprehensive income: Year ended March 31, 2019: ¥ (36,694) million (–%)
Year ended March 31, 2018: ¥56,404 million (5.8%)
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, 2019(118.22)

–

(3.5)

3.3

3.6

Year ended March 31, 2018

90.77

90.71

2.6

2.9

3.3

Reference: Equity in earnings of affiliates: Year ended March 31, 2019: ¥4,161 million
Year ended March 31, 2018: ¥3,007 million
Note: Dai Nippon Printing Co., Ltd. implemented a share consolidation in which two shares of common stock wereconsolidated into one share effective October 1, 2017. Accordingly, it has estimated net income (loss) per share anddiluted net income per share assuming this share consolidation was implemented at the start of the previous
consolidated fiscal year.

(2) Consolidated financial position
Total Assets

Net Assets

Net Assets
per Share

Equity Ratio

Million yen

Million yen%

Yen

As of March 31, 2019

1,775,022

1,046,622

56.1

3,300.52

As of March 31, 2018

1,794,764

1,102,550

58.7

3,493.79

Reference: Stockholders’ equity: As of March 31, 2019: ¥ 996,162 million As of March 31, 2018: ¥1,053,600 million
Note: Dai Nippon Printing Co., Ltd. implemented a share consolidation in which two shares of common stock wereconsolidated into one share effective October 1, 2017. Accordingly, it has estimated net assets per share assuming thisshare consolidation was implemented at the start of the previous consolidated fiscal year.

(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, 2019

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

133,771

Year ended March 31, 2018

48,457

23,074(42,771)244,936

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, 2018

–

16.00

–

32.00

–

19,31770.5

1.9

Year ended March 31, 2019

–

32.00

–

32.00

64.00

19,317–

1.9

Year ending March 31,
2020 (Forecast)

–

32.00

–

32.00

64.00

37.9

Note: Dai Nippon Printing Co., Ltd. implemented a share consolidation in which two shares of common stock wereconsolidated into one share effective October 1, 2017. As a result, year-end dividends per share for the fiscal year ended
March 2018 shows dividends after the share consolidation, and total annual dividends shows “–”. Without the shareconsolidation, year-end dividends per share for the fiscal year ended March 2018 would be ¥16.00 and total annual
dividends per share would be ¥32.00.

3. Consolidated earnings forecasts for the year ending March 31, 2020
(April 1, 2019 – March 31, 2020)(Percentages show change from corresponding year-ago period.)
Net Income
Operating
Attributable to
Net Income
Ordinary Income
IncomeParent Company
per Share
Shareholders

Net Sales

Full year

Million yen%

Million yen%

Million yen%

Million yen%

Yen

1,416,000

1.0

51,0002.2

58,5000.4

51,000–168.98* 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: No
2) Changes in accounting policies other than the 1) above:No3) Changes in accounting estimates:
Yes
4) 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 estimates]” on page 27.

(3) Number of common shares issued and outstanding
1) Number of common shares outstanding
As of March 31,
at end of each period (including
2019
treasury shares)
2) Number of treasury shares at end of
As of March 31,
2019each period
3) Average number of shares outstanding
Year ended
March 31, 2019
during the period

324,240,346 As of March 31,
shares2018

324,240,346
shares22,420,745 As of March 31,
22,676,600
shares2018
shares301,715,605
Year ended
302,982,996
shares March 31, 2018
sharesNote: Dai Nippon Printing Co., Ltd. implemented a share consolidation in which two shares of common stock wereconsolidated into one share effective October 1, 2017. Accordingly, it has estimated average number of shares
outstanding during the period assuming this share consolidation was implemented at the start of the previous
consolidated fiscal year.

(Reference) Non-consolidated financial results
Non-consolidated financial results for the year ended March 31, 2019
(April 1, 2018 – March 31, 2019)(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, 2019

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

Year ended March 31, 2018

990,750

1.4(2,914)–

26,42226.0

18,353(8.2)

Net Income (Loss)
per Share

Diluted Net Income
per Share

Yen

Yen

Year ended March 31, 2019(162.62)–

Year ended March 31, 2018

60.52

–

Note: Dai Nippon Printing Co., Ltd. implemented a share consolidation in which two shares of common stock wereconsolidated into one share effective October 1, 2017. Accordingly, it has estimated net income (loss) per shareassuming this share consolidation was implemented at the start of the previous consolidated fiscal year.

(2) Non-consolidated financial position
Total Assets

Net Assets

Net Assets
per Share

Equity Ratio

Million yen

Million yen%

Yen

As of March 31, 2019

1,426,257

669,87347.0

2,219.37

As of March 31, 2018

1,433,487

737,69651.5

2,444.03

Reference: Stockholders’ equity: As of March 31, 2019: ¥669,873 million As of March 31, 2018: ¥737,696 million
Note: Dai Nippon Printing Co., Ltd. implemented a share consolidation in which two shares of common stock wereconsolidated into one share effective October 1, 2017. Accordingly, it has estimated net assets per share assuming thisshare consolidation was implemented at the start of the previous consolidated fiscal year.

* 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
1. 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 page 5.
2. Dai Nippon Printing Co., Ltd. is changing its method for presenting dates from Japanese calendar dates toWestern calendar dates starting with the financial statements for the fiscal year ended March 2019.

Contents
1. Overview of operating results, etc........................................................................................................... 2(1) Overview of operating results for the year ended March 31, 2019.................................................... 2(2) Overview of financial position for the year ended March 31, 2019.................................................... 4(3) Overview of cash flows for the year ended March 31, 2019 ............................................................. 4(4) Forecasts ........................................................................................................................................... 5(5) Basic policies regarding the allocation of profits and dividends for the year ended March 31, 2019and year ending March 31, 2020 ...................................................................................................... 6(6) Business risks ................................................................................................................................... 6
2. Information on the DNP Group ............................................................................................................... 93. Management policies ............................................................................................................................ 13(1) Core policies .................................................................................................................................... 13(2) Medium- and long-term management strategy and key issues ...................................................... 13
4. Basic approach in choosing of 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 presentation methods] ................................................................................................ 27[Changes in accounting estimates]................................................................................................. 27[Consolidated balance sheets] ....................................................................................................... 27[Consolidated statements of income] ............................................................................................. 27[Consolidated statements of changes in net assets] ...................................................................... 29[Segment information, etc.] ............................................................................................................. 30[Per share information] ................................................................................................................... 34[Significant subsequent events] ...................................................................................................... 35
6. Non-consolidated financial statements and key notes.......................................................................... 36(1) Non-consolidated balance sheets ................................................................................................... 36(2) Non-consolidated statements of income ......................................................................................... 38(3) Non-consolidated statements of changes in net assets .................................................................. 39(4) Notes regarding non-consolidated financial statements ................................................................. 40[Notes on premise of a going concern] ........................................................................................... 40

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1. Overview of operating results, etc.
(1) Overview of operating results for the year ended March 31, 2019Japan’s economy showed improvement in employment conditions and the income environment
during the fiscal year ended March 2019, but the economic outlook is increasingly uncertain, given
the lack of strength in consumer spending, poor weather conditions and natural disasters (e.g.,
earthquakes), global trade issues, and impact of China’s economic slowdown.
The printing industry continued to face a tough business environment, affected by lower demandfor printed media and an accompanying increase in competition resulting from growth in the e-bookand online advertising markets.
In this environment, the DNP Group sought to build a robust business portfolio to continue
creating new value by investing aggressively in priority businesses in which it has top market shares,
mainly smart cards, thermal transfer printing media for photo printers, battery pouches for lithium-ion
batteries, optical film for displays, and metal masks used in the production of organic light-emitting
diode (OLED) displays, and by undertaking restructuring to bolster its competitiveness, including
through the reorganization of business divisions and group companies.
The DNP Group also worked to create new value by combining its strengths in printing andinformation (P&I), targeting the four growth areas of “Knowledge and Communication,” “Food and
Healthcare,” “Lifestyle and Mobility,” and “Environment and Energy.”
Specifically, the DNP Group sought to provide digital marketing platforms to conduct sales
promotions optimized to individual consumers as part of the marketing process from customer
attraction to sales, and payment platforms to contribute to a safe, secure, and convenient cashlesssociety.
In addition, to support a “next-generation automotive society” in need of lower environmental loads,
higher energy efficiency, and greater security, safety, and comfort, the DNP Group worked to provide
battery pouches for lithium-ion batteries used in electric vehicles and other applications,anti-reflection or AR films to prevent reflections of car navigation screens on windshields at night,
various security solutions leveraging encryption and other technologies, and personal authentication
services.
Furthermore, the DNP Group worked to build a cold chain to provide appropriate temperature
management with a low environmental burden by combining the DNP multifunction insulation box,
which was awarded the 28th Annual Grand Prize for the Global Environment Awards, with IC tags
and sensors.
Concerning the repair of defects in some wallpaper products, the DNP Group recorded additional
repair costs of ¥75 billion and reviewed its repair program after making another rational estimate of
the largest potential future impact in light of the results of new scientific testing and analysis basedon data obtained to date in relation to actual repair site samples and usage conditions.
Despite these activities, consolidated net sales for the year ended March 31, 2019 fell 0.8% year
on year to ¥1,401.5 billion, consolidated operating income grew 7.6% to ¥49.8 billion, consolidated
ordinary income grew 14.3% to ¥58.2 billion, and net loss attributable to parent company
shareholders totaled ¥35.6 billion (versus net income of ¥27.5 billion in the previous fiscal year).
Business segment results for the year ended March 31, 2019 are presented below.
[PRINTING]
Information Communication
In the Publishing business, the DNP Group worked to help solve problems within the publishingindustry, including by advancing book forecasting by using artificial intelligence to analyze sales data.

2However, sales in the Publishing & Media Services business decreased for both books andmagazines. Meanwhile, in the Education and Publications Distribution business, sales of e-books
were favorable in the “honto” hybrid bookstore network that combines physical bookstores, online
bookstores, and e-book services. Sales in library operations outsourcing services also increased,buoyed by new outsourcing orders from large libraries. However, overall sales in the Publishingbusiness decreased, affected by the transfer of all stock in subsidiary SHUFUNOTOMO Co., Ltd. in
December 2017.
In the Information Innovation Business, overall sales decreased on a decline in demand for printed
media, including advertising flyers, catalogs, and business forms. However, priority businesses
expanded favorably, including smart card business and payment services-related business amid
growing demand supported by the shift to cashless payments, and Business Process Outsourcing(BPO) services to handle business processes on behalf of companies in response to labor shortages
and work style reforms.
In the Imaging Communication business, the DNP Group promoted “value creation” business toenhance people’s experiential value through photographs, including by launching the sharingbox
PRIME service as a marketing photo booth that takes and prints photographs at sporting events,
event venues, tourism sites, and other locations. However, overall sales in the Image
Communication business decreased as a result of lower sales of thermal transfer printing media forphoto printers in Japan and Europe, although sales increased in North America and Southeast Asia.
Operating income in the Information Communication segment rose sharply as a result of growth inpriority businesses, including a turn to profits in the “honto” hybrid bookstore network business, andcost structure reforms that included production reorganization.
As a result of the above, overall segment sales fell 2.1% year on year to ¥762.3 billion but
operating income grew 14.2% to ¥24.8 billion.
Lifestyle and Industrial Supplies
In the Packaging business, the DNP Group worked to develop and sell environmentally conscious
products, including mono-material packaging (made from a single material) that is easier to recycle,
and liquid paper cartons that are easy to cut open and separate into the paper layer and the internal
film layer for sorted waste collection. Sales were favorable for film packaging and increased forplastic molded products, but decreased for paper packaging and PET plastic bottle aseptic fillingsystems. As a result, overall sales in the Packaging business decreased.
In the Living Space business, the DNP Group focused on sales of environmentally conscious
products that use its propriety electronic beam (EB) coating technology as well as Arttec interior andexterior aluminum panels that produce textures such as wood and stone. However, overall sales inthe Living Space business decreased, affected by sluggish housing starts in Japan.
In the Industrial Supplies business, sales decreased for photovoltaic module components, butrose sharply for battery pouches used in automotive lithium-ion batteries due to the advancement offull-fledged effort towards vehicle electrification. As a result, overall sales in the Industrial Supplies
business increased.
Operating income in the Lifestyle and Industrial Supplies segment decreased, significantly
affected by sharp increases in raw material prices.
As a result of the above, overall segment sales grew 0.7% year on year to ¥397.1 billion but
operating income fell 30.9% to ¥8.3 billion.
Electronics
In the Display Components business, sales increased favorably for metal masks used in the
production of OLED displays, which are expected to see high growth as the switch from LCD

3

displays to OLED displays for smartphones advances each year. Sales were also favorable for
optical films used in LCD TVs as a result of larger screen sizes, and increased sharply for viewing
angle control films used in in-vehicle displays. As a result, overall sales in the Display Components
business increased.
In the Electronic Devices business, semiconductor photomask sales increased, supported by the
spread of IoT equipment.
Operating income in the Electronics segment increased on growth in priority businesses.
As a result of the above, overall segment sales grew 2.0% year on year to ¥192.4 billion andoperating income grew 8.2% to ¥36.9 billion.
[BEVERAGES]
Beverages
The DNP Group worked to increase market share and acquire customers by releasing new products
in core brands, expanding the vending machine business, and stepping up sales promotion to massmerchandisers.
However, overall segment sales edged down 0.1% year on year to ¥55.9 billion, and operating
income fell 5.5% to ¥2.1 billion as a result of lower sales due to poor summer weather and theimpact of the Hokkaido Eastern Iburi Earthquake, intensifying competition, and other factors.
(2) Overview of financial position for the year ended March 31, 2019
Total assets at the end of the current fiscal year decreased by ¥19.7 billion from the end of theprevious fiscal year to ¥1,775.0 billion, due mainly to a decrease for buildings and structures.
Total liabilities increased by ¥36.1 billion from the end of the previous fiscal year to ¥728.4 billion,
due mainly to an increase in repair reserve.
Net assets decreased by ¥55.9 billion from the end of the previous fiscal year to ¥1,046.6 billion,
due mainly to a decrease in retained earnings.
(3) Overview of cash flows for the year ended March 31, 2019
Cash and cash equivalents at the end of the current fiscal year decreased by ¥111.1 billion from theend of the previous fiscal year to ¥133.7 billion.
Cash flow provided by operating activities totaled ¥68.9 billion (¥48.4 billion in the previous fiscal
year), due mainly to ¥18.6 billion in loss before income taxes and non-controlling interests and ¥59.0
billion in depreciation.
Cash flow used in investing activities totaled ¥146.9 billion (cash provided of ¥23.0 billion in theprevious fiscal year), due mainly to a ¥136.9 billion net increase in time deposits.
Cash flow used in financing activities totaled ¥32.1 billion (¥42.7 billion in the previous fiscal year),due mainly to ¥19.7 billion in dividends paid and a ¥3.9 billion net decrease in short-term bank loans
and long-term debt.

4

The trends in DNP’s cash flow indicators are shown below.
Year ended
March 2015

Year ended
March 2016

Year ended
March 2017

Year ended
March 2018Year ended
March 2019

Equity ratio (%)

59.6

59.2

59.4

58.7

56.1

Market value-based
equity ratio (%)

41.6

36.6

42.4

36.6

45.0

Debt-to-cash flow ratio(year)

2.2

2.6

2.4

3.5

2.4

Interest coverage ratio(times)

35.1

29.8

32.6

21.9

33.4

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 DNP Group expects the Japanese economy to show improvement in the employment andincome environment, but the future outlook is increasingly uncertain on account of several factors
including trends in trade issues, economic outlook in emerging markets, notably China, and planned
increase in the consumption tax.
In the printing industry, the DNP Group expects conditions to remain difficult, including a decline inorder prices due to lower demand for printed media and stiffer competition.
The DNP Group will continue working to solve social issues and create value to meet people’s
expectations by combining its strengths in printing and information (P&I), endeavoring to fulfill its
corporate philosophy: “The DNP Group connects individuals and society, and provides new value.”
The DNP Group also aims to expand earnings further by pursuing business structure reforms
according to the market environment and trends in demand.
In the Information Communication segment, the DNP Group anticipates growth in smart cardbusiness and payment services-related business in support of cashless payments, and also expects
growth in BPO services to handle business processes on behalf of companies in response to labor
shortages and work style reforms. Moreover, the DNP Group expects to expand orders related to theTokyo 2020 Olympic and Paralympic Games while supporting the success of these games as an
official sponsor, and to improve earnings further in the “honto” hybrid bookstore network businessthat combines physical bookstores, online bookstores, and e-book sales. Meanwhile, demand forprinted media continues to decline, and the DNP Group will respond to this trend by implementing
further structural reforms, including production structure reforms.
In the Lifestyle and Industrial Supplies segment, the DNP Group expects battery pouches used inlithium-ion batteries to see large growth for automotive applications amid a full-fledged shift toelectric vehicles to reduce environmental impacts. It also expects raw material prices to boost profits,
given that prices have been falling since the end of 2018.
In the Electronics segment, the DNP Group expects to leverage its top market share to achieve

5

stable growth for metal masks used in the production of OLED displays, as the switch from LCD
displays to OLED displays for smartphones advances each year. For optical films, in addition to
growth for existing products, the DNP Group targets growth for new products such as viewing angle
control films used in in-vehicle displays and viewing angle expansion films used in TVs.
In addition, the DNP Group seeks to increase the effective use and efficiency of assets byreviewing its holdings of fixed assets and investment securities.
For the fiscal year ending March 31, 2020, the DNP Group forecasts consolidated net sales of¥1,416.0 billion, consolidated operating income of ¥51.0 billion, consolidated ordinary income of¥58.5 billion, and consolidated net income attributable to parent company shareholders of ¥51.0
billion.
(5) Basic policies regarding the allocation of profits and dividends for the year ended March
31, 2019 and year ending March 31, 2020
An important management policy of the DNP Group is to pass on profits to shareholders.
Profits are allocated based on a policy of paying stable dividends to shareholders and withconsideration for financial results and the dividend payout ratio. For future business expansion, DNP
strives to retain profits and strengthen its management base.
Retained earnings are used to invest in research and development related to new products andtechnologies, to invest in equipment needed for developing new businesses, and to implement
strategic alliances and M&A and invest in human resources to support these activities. At the sametime, the DNP Group considers flexible capital policies while accounting for its capital needs andmarket trends. The DNP Group believes that these efforts will contribute to higher profits that canthen be passed on to shareholders in the 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 in the current
fiscal year.
For the fiscal year ending March 31, 2020, the DNP Group forecasts the interim dividend at ¥32
and the year-end dividend at ¥32, for a full-year dividend of ¥64.
(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 to create new value while
responding to rapid changes in the business environment.
The DNP Group identifies the following items as key risk factors.
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 earnings 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 others6In particular, 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
industries, and pursues stable business activities supported by a business base that does not rely on
specific industries 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 itaggressively pursues business expansion in various regions around the world. It uses foreignexchange forward contracts and other means to hedge the risk of currency fluctuations, but its
performance could be affected by drastic changes in foreign exchange 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. Thisdevelopment process faces an accelerating pace of technological innovation and a diversification ofneeds, and the burden of responding to these trends is also increasing. The DNP Group’s
performance could be affected by such factors as further intensification of development competitionin Japan and overseas, greater-than-expected shortening of product life cycles, and changes inmarket trends.
The DNP Group engages in strategic business and capital alliances and corporate acquisitions,and its performance could be affected if it is unable to achieve initially expected results andsynergies 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

7

・
・
・
・

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

In particular, 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 DNP Group’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 the environment, society, and other areas, country risk, difficulty of hiring and securingpersonnel, 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 higher ethical standards than required bysociety, and contributing to maintaining and advancing orderly and freely competitive markets with aconsistently 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.
〇 Environmental risks
・ Tightening and easing of legal and other regulations
・ Strengthening of measures to prevent global warming and greater response to climate change
and natural disasters
・ Changes in energy policies due to the depletion of natural resources
・ Drastic changes in energy prices and 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
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 growth and society while ensuring environmental sustainability.
However, the DNP Group expects an acceleration of changes in terms of a tightening of domestic
and overseas legal regulations and international standards in relation to climate change and otherissues. It also expects, when assessing enterprise value, a positive view on a stance for working tosolve social issues such as environmental issues. The DNP Group’s performance could be affectedby a slow response to these trends.
In addition, the DNP Group believes that a variety of regulations will be strengthened in Japan andoverseas amid strong demands for addressing global warming, reducing the global environmental
burden, and protecting biodiversity. At the same time, the DNP Group also expects that it will need torespond to major changes in market and industry trends as a result of deregulation. If that should
occur, it is possible that the DNP Group’s business performance could be affected by greater
limitations on its business activities, the burden of responding to regulatory changes, or increased
costs.
To respond to disasters, the DNP Group takes steps to protect production equipment and othermajor facilities from fires and earthquakes, seeks to disperse production facilities, and undertakes
business continuity planning (BCP) to minimize any production shutdowns and product supply
disruptions caused by disasters or other events. We also use various types of insurance to transfer

8risk. Nevertheless, the DNP Group’s performance could be substantially affected in the event ofmajor earthquakes, natural disasters such as rainstorms or flooding caused by climate change,
disease outbreaks, or other unexpected events that cause production shutdowns or significantly
damage or impair social infrastructure.
2. Information on the DNP GroupThe DNP Group includes the Company, 133 subsidiaries, and 24 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 Tech 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.
2Dfacto, 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.
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 of9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.
DNP Field Eyes 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

DAP Technology Co., Ltd., 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.
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

10

[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

11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 and sales) DNP Shikoku Co., Ltd.

(Production)
OGUCHI BOOK BINDING &PRINTING CO., LTD.
DNP Imagingcomm Co., Ltd.
DNP SP Tech 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.
2Dfacto, 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.
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)
DAP Technology Co., Ltd.
DT Fine Electronics Co., Ltd.

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

DNP Engineering 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.

DNP Information Systems Co., Ltd.

DNP Chubu Co., Ltd.
DNP America, LLC

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

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

12

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 believes it is important to enhance corporate governance in order to sustain
growth and increase enterprise value over the medium to long term. It seeks to establish andoperate systems to facilitate precise and comprehensive managerial decision-making, prompt andappropriate execution of business based on these decisions, and supervision and auditing of thisbusiness execution. It also undertakes rigorous training and education to improve the complianceawareness of each and every employee.
Additionally, the DNP Group is aware of its social responsibility as a company and strives todeliver new value to its various stakeholders. 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 fulfill these responsibilities, the DNP Groupadheres to its DNP Group Code of Conduct in pursuing its activities and ensures proper businessconduct by preparing internal control systems. It strives to conduct business in good faith to earn the
deep trust of its various stakeholders, including shareholders, client companies, consumers, andemployees.
(2) Medium- and long-term management strategy and key issues
1) Priority initiatives to sustain growth and increase enterprise value over the medium to longterm
The DNP Group seeks to sustain growth for the overall group and increase enterprise value over the
medium to long term by solving social issues and creating new value that meet people’s
expectations through P&I innovations that flexibly combine its various strengths in printing andinformation technologies and expertise, sales and planning, production and production management,
and intellectual property and branding. The DNP Group is implementing three priority initiatives toachieve this goal:
1. Generate value by expanding business, primarily in growth areas;
2. Provide value to the global market;
3. Expand value to maximize profit.
Generate value by expanding business, primarily in growth areas: The DNP Group seeks to solve
social issues and create new value that meets people’s expectations by combining its strengths in
P&I and the strengths of partners outside the company in the four growth areas of “Knowledge andCommunication,” “Food and Healthcare,” “Lifestyle and Mobility,” and “Environment and Energy.”
Provide value to the global market: With value chains expanding globally, the DNP Group seeks tosolve social issues and meet people’s expectations from a global perspective not limited to Japan.
The DNP Group operates 15 overseas production bases and 27 overseas sales bases as of March
2019, and it seeks to broadly provide value in Japan and overseas with an accurate understandingof regional characteristics and the issues and needs of the people living in these areas.
Expand value to maximize profit: The DNP Group will pursue business structure reforms and cost
structure reforms that include the integration and reorganization of business divisions and operatingbases. It will also work to maximize enterprise value through the integrated use of both financial
capital and non-financial capital such as human resources and intellectual property.

132) Initiatives in the different businesses and segments[PRINTING]
Information Communication
The Information Communication segment facilitates a variety of safe and secure communication
between consumers and companies by enabling the optimal expression of information andexpanding into a diverse range of media based on advanced image processing technologies andinformation security technologies.
For example, we are helping to revitalize the publishing market by deepening cooperation withpublishers and pursuing business activities that include the planning, production, distribution, andsale of various publications and the copyright handling and overseas expansion of content.
In addition, to respond to an expansion of cashless payments and the spread of various electronicmoney services, the DNP Group seeks to provide consumers with a high level of security andconvenience by focusing on smart cards with different shapes such as key fobs, in addition tointernational brand prepaid cards and debit cards.
Furthermore, the DNP Group is using advanced information security infrastructure, including the
DNP Kashiwa Data Center and 13 domestic BPO centers, to provide cashless payment platforms
that support a variety of payment methods (e.g., credit cards, prepaid cards, electronic money and
QR codes) and to deliver a variety of high-value-added services such as digital marketing.
Lifestyle and Industrial Supplies
The Lifestyle and Industrial Supplies segment provides products and services in Japan andoverseas that respond precisely to the diverse needs of companies and consumers, while also
working to protect the global environment and support universal design.
For example, the DNP Group is working to leverage its global-leading market share in battery
pouches for lithium-ion batteries to cultivate new applications such as drones and robots, in addition
to automotive applications, for which demand is expanding with the spread of electric vehicles. It isalso pursuing the development of curved resin glass that improves the fuel efficiency of automobiles
by reducing their body weight.
In the Packaging business, the DNP Group is working to achieve a sound material-cycle society
through the “Biomatech” series of plastic films that are partially made from plant-based materials andthe development of packages that contribute to promoting recycling. Overseas, the DNP Group aims
to expand market share in Southeast Asia based on production bases in Indonesia and Vietnam.
Additionally, the DNP Group regards automobiles and railway cars, in addition to homes andcommercial facilities, as living spaces that require comfort, and initiatives in this area include
high-valued-added products that use electron beam (EB) coating technology; the design of pleasantspaces using Kansei (sensitivity) engineering; the assessment of living environments; and thedevelopment of simpler construction methods. In Europe, the U.S., and emerging markets, the DNPGroup seeks to leverage a global sales network to expand market share for exquisitely designed
metal paneling and interior and exterior automotive materials.
The DNP Group is also steadily implementing a revised repair program to correct defects in some
wallpaper products in the Living Space business, and is working to improve and strengthen its
quality assurance system to prevent recurrence.
Electronics
In the Electronics segment, the DNP Group endeavors to develop high-value-added products withsuperior functionality while focusing on the next generation of electronics products. It seeks todevelop new core technologies and to accelerate commercialization by cooperating with business
partners and companies with strong expertise. It will also actively pursue alliances with other14

companies, including technology licensing, and royalty business.
In addition, the DNP Group will assess changes in the market in Japan and overseas, andcontinue to implement structural reforms through such means as optimizing production facilities andreviewing its production and development structures.
For example, in the OLED display market, where demand is expanding rapidly, we seek tomaintain and increase market share by increasing production capacity for metal masks, which areused to make OLED displays, and by preparing a structure to develop products to support higher
definition displays and ensure stable supply. We will also work to develop various optical films for
OLED displays, including retardation films. The DNP Group expanded optical film production
capacity at the Mihara Plant in Hiroshima Prefecture and plans to launch mass production of films forlarge TVs in October 2019 in response to global growth in demand for large TVs. It will focus on
further expanding sales of display optical films, where it has the top global market share.
For semiconductor photomasks, we aim to support the miniaturization and cost-saving needs ofsemiconductor makers by bolstering the production structure for next-generation products byapplying next-generation microfabrication technologies, including nanoimprinting and a multi e-beammask writer that significantly shortens writing time during production.
[BEVERAGES]
Beverages
Amid expectations for stiffer market share competition in the soft drink industry, the DNP Group aims
to achieve the basic strategy in the medium-term business plan of “aspiring to be a company that is
loved by the people of Hokkaido by providing refreshing and thirst-quenching products as the only
integrated beverage company in Hokkaido,” based on the following vision: “Leveraging the global
brand strength of our Coca-Cola business, we intend to beat our competition based on our local
capabilities as a true Hokkaido company, contribute to local Hokkaido communities by consistently
delivering new value and services, and establish a business foundation capable of sustained
growth.”3) Strengthened organization
The DNP Group cites taiwa (dialogue) and cooperation as guiding principles, and is working todeliver new value by enhancing groupwide efforts to strengthen cooperation further among business
units and by deepening dialogue with companies and consumers. We will work to expand ourbusiness by strengthening cooperation with both domestic and overseas partners possessing
various strengths.
We are also pursuing redevelopment in our home base in the Ichigaya district of Tokyo whileworking to establish domestic and overseas bases to advance our business vision. The planning,
sales, and marketing offices of various business units were once scattered across the Tokyo
Metropolitan Area, but are now concentrated together with the Group’s headquarters functions in the
Ichigaya district. Making effective use of this concentration, we intend to push forward with thedevelopment of new business.
4) Development of systems for business continuity
The DNP Group reaffirmed the importance of business continuity planning (BCP) based on its
experience in the Tohoku-Pacific Ocean Earthquake, and works daily to maintain proper awarenessof disaster risk and take appropriate safeguards based on two objectives: (1) place top priority on
human safety measures at the time of disaster; (2) increase the Company’s preparedness fordisaster and ability to recover from disaster. We established basic policies and promotion systems toprepare for disasters and other unforeseen circumstances in our “DNP Group Basic Code for15

Disaster Response,” and implement disaster-prevention measures to ensure the safety of ouremployees and related parties and reassure our various stakeholders.
5) Contributing to the realization of a sustainable societyWith the aim of solving various social issues such as climate change and growing inequality gaps,
we expect companies to step up initiatives to achieve the Sustainable Development Goals (SDGs)
adopted by the United Nations in 2015. The DNP Group aspires to create a sustainable society that
fulfills these SDGs in order to achieve stable growth over the medium to long term.
To this end, the DNP Group is working to create value through products and services and to build
a foundation to support value creation in the value chain. In particular, it regards climate change as
an urgent environmental issue and is working to reduce environmental impacts through its businessactivities, products, and services.
4. Basic approach in choosing of accounting standards
The DNP Group uses Japanese GAAP in preparing consolidated financial statements. It plans to
consider 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, 2018
(As of March 31, 2018)Year ended March 31, 2019
(As of March 31, 2019)242,781354,241
82,697
31,672
23,17847,159(1,690)780,039

268,046
351,450
79,80930,07423,18748,226(1,515)799,280

566,445(367,135)
199,310736,596(655,894)
80,702
151,5217,160
140,364(104,660)
35,703474,397549,251(365,373)
183,878
708,330(640,815)
67,514
147,924
11,760138,261(108,219)
30,042
441,120

4,241
26,686
1,925
32,853

2,489
25,044
1,380
28,914401,41467,838
10,91330,938(3,632)507,472
1,014,724
1,794,764

393,104
71,38011,06832,468(2,315)505,707975,742
1,775,022

ASSETS
Current assets
Cash and time deposits
Notes and trade receivables
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, 2018
(As of March 31, 2018)Year ended March 31, 2019
(As of March 31, 2019)248,993
44,7942,290
4,292
10,042
17,12829,58081,426
438,548

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

108,600
10,127
7,543
35,21664,98327,193
253,664
692,21359,61010,04570,211
34,73365,30020,845
260,745
728,400

114,464
144,264
681,976(62,908)
877,797

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

168,155

170,073

(3)
1,410
6,241

(1)
(2,398)5,208

175,803

172,881

48,9501,102,550
1,794,764

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

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 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
Foreign exchange transaction loss
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, 2018
1,412,251
1,131,662
280,589234,217
46,372

Year ended
March 31, 2019
1,401,505
1,119,390
282,114232,216
49,898

5,840
3,007
4,977
13,825

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

2,212
1,416
1,214
4,382
9,226
50,971

2,068
–
1,426
3,337
6,832
58,25913,022
44,964
1,326
59,312

2,937
18,025
2,126
23,089

3,669
5,952
567
53,5001,198
64,887

2,842
16,6854,305
75,000
1,202
100,035

45,396(18,685)

15,738187
15,92529,47015,198(936)
14,262(32,947)

1,969

2,721

27,501(35,668)

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, 2018
29,470Year ended
March 31, 2019(32,947)

18,290

2,047

3
1,912
4,115

3
(3,978)(1,403)

2,612

(414)

26,93356,404(3,746)(36,694)

54,2692,135(38,590)
1,896

(3) Consolidated statements of changes in net assets
The year ended March 31, 2018 (April 1, 2017 – March 31, 2018)(Million yen)
Stockholders’ equity

Balance at the beginning ofcurrent period

Totalstockholders’equityCommonstock

CapitalsurplusRetainedearnings

Treasurystock

114,464

144,280

695,720(69,636)884,829

Changes of items during theperiodCash dividends paid
Net income attributable toparent company
shareholders
Change of scope of
consolidation
Change in ownershipinterest of parent arisingfrom transactions with
non-controllingshareholders
Purchases of treasury
stock(19,510)

27,501

27,501

30

30

(15)

Disposal of treasury stock
Cancellation of treasurystock
Net changes in items otherthan stockholders’ equity
Total changes of items
during the period
Balance at the end of current
period(19,510)(15)(15,037)(15,037)

(0)

1

0

(21,763)

21,763––(15)(13,743)

6,727(7,031)

114,464

144,264

681,976(62,908)

877,797

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
assets149,574(2)(2,219)1,683

149,035

47,422

1,081,286(19,510)

Cash dividends paid
Net income attributable toparent company
shareholders

27,501

Change of scope of
consolidation

30

Change in ownershipinterest of parent arisingfrom transactions with
non-controllingshareholders
Purchases of treasury
stock(15,037)

Disposal of treasury stock0

Cancellation of treasury
stock

–

Net changes in items otherthan stockholders’ equity
Total changes of items
during the period
Balance at the end of current
period(15)

18,580

(1)

3,630

4,558

26,767

1,528

28,296

18,580

(1)

3,630

4,558

26,767

1,528

21,264

168,155

(3)

1,410

6,241

175,803

48,9501,102,550

21

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

(90)

(90)

Purchases of treasury
stock

592

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)

(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

Cash dividends paid

(19,317)

Net loss attributable toparent company
shareholders(35,668)

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

(41)

(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

22

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

Year ended
March 31, 2018
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(Increase) Decrease in trade receivables(Increase) Decrease in inventories
Increase (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 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 intangible fixed assets
Payments for sales of stock in subsidiaries resulting inchange in scope of consolidation
Interest and dividends received
Other
Net cash provided by (used in) investing activities

23

Year ended
March 31, 201945,396(18,685)

61,070
5,952(302)(5,780)2,004(3,007)
2,306(5,840)2,212(45,686)758(9,302)53,500(17,606)
(875)
5,899
6,049
96,746(35,056)(48)(13,184)
48,45759,08016,685(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)
68,971(1,547)(136,981)(32,500)(37,578)

19,644(1,234)54,616(10,483)

6,942(2,404)
26,785(9,800)

(855)

–

8,256
(12,822)
23,074

10,515(4,387)(146,909)

(Million yen)

Year ended
March 31, 2018
Cash flows from financing activities
Net increase (decrease) in short-term bank loans
Proceeds from long-term debt
Repayments of long-term debt
Proceeds from issuance of bonds
Payments for redemption of bonds
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 in cash and cash equivalents
Cash and cash equivalents at beginning of year
Increase in cash and cash equivalents resulting from themerger of non-consolidated subsidiaries
Cash and cash equivalents at end of year

24

Year ended
March 31, 2019

2,257
2,690
(4,076)
1,224
(240)
–
(15,037)(130)(2,213)(19,524)(393)(2,282)2,500(4,142)
2,442(2,290)75(15)(2)(2,065)(19,324)
(459)

(226)

(89)

(7,102)(42,771)(6,541)(32,196)

1,428(1,031)30,188214,564(111,165)
244,936184–

244,936

133,771(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: 107
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: 18
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:
2 DNP・SIG Combibloc Co., Ltd. and one other company(Application of equity method)
Newly included:2
Excluded:
2

AKARI, LLC and one other company
All About, Inc. and one other company

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 themoving-average method.)25

Those without market
prices available

Mainly cost based on the moving-average method• Derivatives

Mainly fair market value• Inventories

For figures shown on the balance sheet, the book value
write-down method based on the decrease in profitability isused.
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)
However, depreciation of buildings (excluding building
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)

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.

(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.
(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

26

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 presentation methods](Changes from applying the “Partial Amendments to Accounting Standard for Tax Effect Accounting”)
DNP started applying the “Partial Amendments to Accounting Standard for Tax Effect Accounting”(ASBJ Statement No. 28, February 16, 2018) at the beginning of the current fiscal year, and now lists
deferred tax assets under investments and other assets and deferred tax liabilities under long-term
liabilities.
[Changes in accounting estimates](Repair reserve)
DNP previously recorded reserves to cover expected repair costs for defects in some products,
based on the results of local inspections, actual repair work, and results of testing within thecompany.
During the current fiscal year, DNP conducted new scientific testing and analysis because some ofthese products had defects that were outside the range covered by reserves. As a result, DNP madea rational estimate of the largest scale of future expected repair costs in light of a determination thatthe occurrence of these defects was related to new factors.
As a result, loss before income taxes and non-controlling interests increased by ¥75.0 billion in thefiscal year ended March 31, 2019.
[Consolidated balance sheets]

Discounts on notes receivables

Year ended
March 31, 2018¥664 million

Year ended
March 31, 2019¥488 million

Year ended
March 31, 2018¥33,210 million

Year ended
March 31, 2019¥33,786 million[Consolidated statements of income]

1. Research and development expenses(Selling, general and administrative expenses)27

2. Impairment losses
DNP recorded impairment losses for the following asset groups in the current consolidated fiscal
year.
Location
Application
Category
Buildings and structures,
Malaysia, other
Business asset
machinery, land, software, other
Odawara City (Kanagawa),
Buildings and structures,
Idle assets, otherothermachinery, land, software, 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, DNP lowered the carrying amounts of business asset groups with diminishedprofitability and idle assets that are not expected to be used to their recoverable amounts, andrecorded this decrease as an impairment loss (¥16,685 million) under extraordinary losses.
The impairment loss breaks down into buildings and structures at ¥6,301 million, machinery at¥4,269 million, land at ¥2,919 million, software at ¥2,344 million, and other at ¥850 million.
DNP values recoverable amounts for business assets at zero mainly because these assets are
not expected to generate future cash flow. It measures recoverable amounts for idle assets based on
their net sale prices, and calculates net sale prices based on real estate appraisal values and otherfactors. However, for idle assets for which calculating sale prices is difficult, it lowers the book valueof these assets to their residual value.

28

[Consolidated statements of changes in net assets]
The year ended March 31, 2018 (April 1, 2017 – March 31, 2018)
1. Types and number of shares outstanding and treasury stock(Shares)

Stock type

Number ofshares at the
beginning of
the year
ended March
2018

Increase in
number ofshares during
the year
ended March2018

Decrease in
number ofshares during
the year
ended March2018

Number ofshares at theend of theyear ended
March 2018

Outstanding shares

Common stock339,240,347
324,240,346
663,480,693–
Treasury stock
Common stock
48,287,110
12,062,315
37,672,825
22,676,600
Notes:The number of outstanding shares of common stock decreased by 339,240,347 shares, with the1.
following breakdown.
・Decrease due to the cancellation of treasury shares by resolution of the Board of Directors
15,000,000 shares・Decrease due to a share consolidation
324,240,347 shares
The number of treasury shares of common stock increased by 12,062,315 shares, with the2.
following breakdown.
(Before the share consolidation)
20,759 shares・Increase from repurchase of odd-lot shares・Increase from acquisition of treasury shares by resolution of the Board of Directors
12,037,000 shares(At the time of and after the share consolidation)
・Increase from repurchase of fractional shares resulting from the share consolidation
1,492 shares
3,064 shares・Increase from repurchase of odd-lot shares
The number of treasury shares of common stock decreased by 37,672,825 shares, with the3.
following breakdown.
(Before the share consolidation)
305 shares・Decrease due to sale of odd-lot shares・Decrease due to the cancellation of treasury shares by resolution of the Board of Directors
15,000,000 shares(At the time of and after the share consolidation)
・Decrease due to a share consolidation
22,672,282 shares
238 shares・Decrease due to sale of odd-lot shares

2. Detailed information regarding dividends(1) Dividends paid
Resolution
General meeting ofshareholders on
June 29, 2017
Board of Directors’
meeting on
November 9, 2017

Stock type

Total dividends(Million yen)

Dividend pershare (Yen)Dividend
record date

Effective dateCommon stock

9,851

16

March 31,2017

June 30,
2017

Common stock

9,658

16

September 30,
2017

December 8,
2017(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 28, 2018

Common
stock

9,658

Source ofdividends
Retainedearnings

29

Dividend
per share
(Yen)

32

Dividend
record date

Effective
date

March 31,2018

June 29,2018

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

Dividend
per share
(Yen)

32

Dividend
record date

Effective
date

March 31,2019

June 28,
2019[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.
Investments in equity-method affiliates, which were previously included in the adjustment
category, are presented in the relevant reporting segments as well as the adjustment category
starting in the current fiscal year, based on changes to the management structure and otherfactors. Figures in the previous fiscal year have been revised to reflect this change.
3. Information on sales, income/loss, assets, and other items by reporting segment
The year ended March 31, 2018 (April 1, 2017 – March 31, 2018)
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
financialNote 2statements

Information
Communication

Lifestyle andIndustrial
Supplies

Electronics

774,997
3,638
778,636
21,757902,701

392,458
1,848
394,30712,127454,064

188,7459
188,754
34,100234,152

56,04911
56,061
2,244
48,212

1,412,251
5,508
1,417,760
70,2291,639,132–(5,508)(5,508)(23,857)
155,631

1,412,251–
1,412,251
46,372
1,794,764

26,967

16,508

12,234

2,607

58,3182,751

61,070

1,093

1,213

–

–

2,306

–

2,306

Beverages

Total

1,979

–

–

21

2,000

3,951

5,952

1,894

464

16,110–18,46836,18254,65027,286

15,724

10,5992,326

55,9383,619

59,557

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.
(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, 2019 (April 1, 2018 – March 31, 2019)
Reporting segment
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

59,080Net 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
financialNote 2statements

Beverages

Total

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

41,103Figures 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.
(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, 2018 (April 1, 2017 – March 31, 2018)
1. Information on products and services
Omitted because similar information is disclosed in segment information.
2. Regional information(1) Net sales(Million yen)Japan
1,185,561
Notes:

1.
2.
3.

Asia

Other regions

150,794

Total

75,896

1,412,251

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, 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.
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, 2018
(April 1, 2017 –March 31, 2018)Year ended
March 31, 2019
(April 1, 2018 –March 31, 2019)¥3,493.79¥3,300.52

Net income (loss) per share¥90.77¥(118.22)

Diluted net income per share¥90.71–

Net assets per share

Notes: 1. Dai Nippon Printing Co., Ltd. implemented a share consolidation in which two shares ofcommon stock were consolidated into one share effective October 1, 2017. It has estimated net
assets per share, net income (loss) per share, and diluted net income per share assuming thisshare consolidation was implemented at the start of the previous consolidated fiscal year.
2. Diluted net income per share is not listed because, although there are potential dilutive sharesin the current consolidated fiscal year, the DNP Group incurred a net loss per share.
3. The basis for calculating net income (loss) per share and diluted net income per share is asfollows.
Year ended
March 31, 2018
(April 1, 2017 –March 31, 2018)Year ended
March 31, 2019
(April 1, 2018 –March 31, 2019)(Million yen)

27,501(35,668)(Million yen)––

(Million yen)

27,501(35,668)(Thousand shares)

302,982

301,715(Million yen)

(17)

–

(Million yen)

(17)

–

–

–

Year ended
March 31, 2018
(As of March 31,
2018)Year ended
March 31, 2019
(As of March 31,
2019)1,046,622
50,45950,459(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 stock(Thousand shares)

4. 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)

1,102,550
48,95048,950(Million yen)

1,053,600

996,162

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
22,676324,240
22,420(Thousand shares)

301,563

301,819(Thousand shares)34

[Significant subsequent events]
DNP decided at a meeting of the Board of Directors on May 14, 2019 to establish a trust for a fixed
asset that it owns and to transfer the beneficiary rights in this trust.
For details, see the document titled, “Announcement of Establishment of Trust for Fixed Assets,
Transfer of Trust Beneficiary Rights, and Recording of Extraordinary Gains,” disclosed separately on
May 14, 2019.

35

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

Year ended
March 31, 2018
(As of March 31, 2018)Year ended
March 31, 2019
(As of March 31, 2019)

147,626
49,183247,016
3,610
10,467
1,396
43,223(1,313)501,211

169,32947,703242,965
3,501
9,427
1,704
40,128(1,232)
513,527

431,618(279,803)
151,81433,037(26,802)6,235
570,635(522,293)
48,341
1,440(1,306)
134
51,906(41,583)
10,322
129,924
2,417(1,217)
1,199
3,481
351,454420,049(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

21,3791,561
22,94019,727
1,178
20,905340,204
151,956
3,270
51,292
20,479(9,323)557,880
932,275
1,433,487

334,362
154,471
1,364
56,84818,512(8,264)557,295
912,729
1,426,257

ASSETS
Current assets
Cash and time deposits
Notes receivable
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 asset
Accumulated depreciation
Lease asset, 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

36

(Million yen)

Year ended
March 31, 2018
(As of March 31, 2018)Year ended
March 31, 2019
(As of March 31, 2019)11,771
209,154–436
37,614
16,526
3,937
194,277
7,521
197
29,580713–
511,730

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

100,000
972
986
5,834
9,234
367
7,543
58,918201
184,060
695,790

50,000
818
1,007
5,825
9,586
357
70,211
59,715
33
197,555
756,384

114,464

114,464

144,898
144,898

144,898
144,898

23,30023,300

0

–

23

21

282,780
69,719375,823(62,854)572,331

282,780(792)
305,309(62,868)
501,803

165,365

168,069

165,365
737,696
1,433,487

168,069
669,873
1,426,257

LIABILITIESCurrent liabilities
Notes payable
Trade payable
Bonds redeemable within 1 year
Lease obligations
Accounts payable - otherAccrued 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
Reserve for environmental measures
Repair reserve
Deferred tax liabilities
Other
Total long-term liabilities
TOTAL LIABILITIESNET ASSETSStockholders’ equity
Common stock
Capital surplus
Capital reserve
Total capital surplus
Retained earnings
Legal reserve
Other retained earnings
Reserve for special depreciation
Reserve for depreciation reduction of fixed
assetsOther reserve
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

37

(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
Repair reserve provisions
Other
Total extraordinary losses
Income (loss) before income taxes
Current income taxes
Deferred income taxes
Total income taxes
Net income (loss)

38

Year ended
March 31, 2018
990,750
863,888
126,862
129,776(2,914)

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

177
26,616
31,27358,066

178
17,12629,98747,292

1,533
27,19728,73026,422

1,532
24,744
26,27718,441

11,964
44,775
1,512
58,251

2,648
18,025
2,124
22,798

3,076
3,951
566
53,5003,118
64,213
20,460
1,320
787
2,107
18,353

1,858
9,354
4,285
75,0002,479
92,978(51,738)
410
(952)
(542)
(51,196)(3) Non-consolidated statements of changes in net assets
The year ended March 31, 2018 (April 1, 2017 – March 31, 2018)(Million yen)
Stockholders’ equity
Capital surplus
Commonstock

Retained earnings
Other retained earnings
Other
reserve

Retainedearnings
brought
forwardTotal
retainedearnings

332,780

43,659399,765

0

–

2

–

50,000(19,510)
18,353–(19,510)
18,353Cancellation of treasury stock(0)(21,763)(0)(21,763)

Decrease due to company
split(1,021)(1,021)

Balance at the beginning ofcurrent period
Changes of items during theperiodReversal of reserve for
special depreciation

114,464

Capitalreserve

Total capitalsurplus

Legal reserve

144,898

144,898

23,300Reserve forReserve for depreciation
specialreduction ofdepreciation fixed assets

0

25

(0)

Reversal of reserve fordepreciation reduction of
fixed assets(2)(50,000)

Reversal of other reserves
Cash dividends paid
Net income
Purchases of treasury stock
Disposal of treasury stock

Net changes in items otherthan stockholders’ equity
Total changes of items during
the period

–

–

–

–

(0)

(2)

(50,000)

26,059(23,942)

Balance at the end of current
period114,464

144,898

144,898

23,300023282,780

69,719375,823

Valuation and translation
adjustments

Stockholders’ equity

Balance at the beginning ofcurrent period

Treasury
stock

Total
stockholders’equityValuationdifferenceonavailablefor-salesecurities

Total
valuationandtranslation
adjustments

Total net
assets(69,581)589,546

147,664

147,664

737,211

Changes of items during theperiodReversal of reserve for
special depreciation
Reversal of reserve fordepreciation reduction of
fixed assets
Reversal of other reserves
Cash dividends paid
Net income
Purchases of treasury stock
Disposal of treasury stock
Cancellation of treasury stock(15,037)
1
21,763

Decrease due to company
split
Net changes in items otherthan stockholders’ equity
Total changes of items during
the period
Balance at the end of current
period

–

–

–

–

–
(19,510)
18,353(15,037)
0––(19,510)
18,353(15,037)
0–(1,021)(1,021)
17,70017,70017,7006,727(17,215)

17,70017,700485(62,854)572,331

165,365

165,365

737,696

39

The year ended March 31, 2019 (April 1, 2018 – March 31, 2019)(Million yen)
Stockholders’ equity
Capital surplus
Commonstock

Balance at the beginning ofcurrent period
Changes of items during theperiodReversal of reserve for
special depreciation

114,464Retained earnings
Other retained earnings

Capitalreserve

Total capitalsurplus

Legal reserve

144,898

144,898

23,300Reserve forReserve for depreciation
specialreduction ofdepreciation fixed assets

0

23

Other
reserve

Retainedearnings
brought
forwardTotal
retainedearnings

282,780

69,719375,823

0

–

1

–

(19,317)(51,196)(19,317)(51,196)

(0)

(0)

(0)

Reversal of reserve fordepreciation reduction of
fixed assets(1)

Cash dividends paid
Net loss
Purchases of treasury stock
Disposal of treasury stock
Net changes in items otherthan stockholders’ equity
Total changes of items during
the period

–

–

–

–

(0)

(1)

–

(70,511)(70,513)

Balance at the end of current
period114,464

144,898

144,898

23,300–21

282,780(792)

305,309

Valuation and translation
adjustments

Stockholders’ equity

Balance at the beginning ofcurrent period
Changes of items during theperiodTreasury
stock

Total
stockholders’equityValuationdifferenceonavailablefor-salesecurities

Total
valuationandtranslation
adjustments

Total net
assets(62,854)572,331

165,365

165,365

737,696

Reversal of reserve for
special depreciation
Reversal of reserve fordepreciation reduction of
fixed assets
Cash dividends paid
Net loss
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

(15)
1

–

–

–

–

(19,317)(51,196)(15)
1(19,317)(51,196)
(15)
1
2,704

2,704

2,704

(14)

(70,527)

2,704

2,704

(67,823)(62,868)

501,803

168,069

168,069

669,873(4) Notes regarding non-consolidated financial statements[Notes on premise of a going concern]None40