大日本印刷（7912） – [Delayed]Consolidated Financial Results for the Fiscal Year Ended March 31, 2022[J-GAAP]

Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 [J-GAAP] May 13, 2022 Dai Nippon Printing Co., Ltd. Tokyo 7912 Yoshinari Kitajima, President Naoki Wakabayashi, General Manager, IR and Public Relations Division +81-3-6735-0124URL: http://www.dnp.co.jp/eng/ Company Name: Stock exchange listing: Stock code: Representative: Contact person: Telephone: General meeting of shareholders: Dividend payment date: Securities report issuing date: Preparation of earnings presentation material: Yes Holding of earnings announcement: June 29, 2022 June 30, 2022 June 29, 2022 Yes (for institutional investors and analysts) 1. Consolidated financial results for the year ended March 31, 2022*Amounts under one million yen have been rounded down.(April 1, 2021 – March 31, 2022)(1) Consolidated financial results(Percentages show change from corresponding year-ago period.) Net Sales Operating Income Ordinary Income Net Income Attributable to Parent Company Shareholders Million yen % Million yen % Million yen % Million yen % Year ended March 31, 2022 1,344,147 0.7 66,788 34.8 81,249 97,182 287.4 Year ended March 31, 2021 1,335,439 (4.7) 49,529 (12.0) 59,907 25,088 (63.9) 35.6 (6.1) Note: Comprehensive income: Year ended March 31, 2022: ¥103,770 million (-30.0%) Year ended March 31, 2021: ¥148,228 million (–%) Net Income per Share Diluted Net Income per Share ROE Ordinary Income to Total Assets Operating Income to Net Sales Yen 355.84 89.32 Yen 355.79 89.28 % 9.1 2.6 % 4.4 3.4 % 5.0 3.7 Year ended March 31, 2022 Year ended March 31, 2021 Reference: Equity in earnings of affiliates: Year ended March 31, 2022: ¥8,686 million Year ended March 31, 2021: ¥6,742 million Note: Year-on-year change in comprehensive income for year ended March 31, 2021 exceeded 1,000% and is therefore shown as “–.” (2) Consolidated financial positionTotal Assets Net Assets Equity Ratio As of March 31, 2022 As of March 31, 2021 Million yen 1,876,647 1,825,019 Million yen 1,148,413 1,098,613 Net Assets per Share Yen 4,057.98 3,716.85 % 58.2 57.2 Reference: Stockholders’ equity: As of March 31, 2022: ¥1,091,861 million As of March 31, 2021: ¥1,043,977 million (3) Consolidated cash flows Year ended March 31, 2022 Year ended March 31, 2021 2. Dividends Year ended March 31, 2021 Year ended March 31, 2022 Year ending March 31, 2023 (Forecast) Cash Flows from Operating Activities Cash Flows from Investing Activities Cash Flows from Financing Activities Million yen 82,028 61,681 Million yen (39,208) (56,284) Million yen (57,751) (78,268) Cash and Cash Equivalents at End of the Year Million yen 293,361 304,223 Dividends per Share First Quarter-end Second Quarter-end Third Quarter-end Year-end Annual Total Dividends (Annual) Dividend Payout Ratio (Consolidated) Dividends to Net Assets Ratio (Consolidated) Yen Yen Yen Yen Yen Million yen – – – 32.00 32.00 32.00 – – – 32.00 64.00 32.00 64.00 17,976 17,265 32.00 64.00 % 71.7 18.0 25.7 % 1.8 1.6 3. Consolidated earnings forecasts for the year ending March 31, 2023 (April 1, 2022 – March 31, 2023) (Percentages show change from corresponding year-ago period.) Net Income Attributable to Parent Company Shareholders Net Income per Share Yen 249.01 Net Sales Operating Income Ordinary Income Full year Million yen 1,380,000 % Million yen 67,000 2.7 % Million yen 81,500 0.3 % Million yen 67,000 0.3 % (31.1) * Notes (1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in a change in the scope of consolidation): No (2) Changes in accounting policies, changes in accounting estimates, and restatement of revisions 1) Changes in accounting policies with revision of accounting standards: Yes No 2) Changes in accounting policies other than the 1) above: Yes 3) Changes in accounting estimates: 4) Restatement of revisions: No Note: For more information, see the section titled, “5. Consolidated financial statements and key notes (5) Notes regarding consolidated financial statements [Changes in accounting policies],” on page 27 and “5. Consolidated financial statements and key notes (5) Notes regarding consolidated financial statements [Changes in accounting estimates],” on page 29. (3) Number of common shares issued and outstanding 1) Number of common shares outstanding at end of each period (including treasury shares) 2) Number of treasury shares at end of 3) Average number of shares outstanding each period during the period As of March 31, 2022 317,240,346 shares As of March 31, 2021 324,240,346 shares As of March 31, 2022 Year ended March 31, 2022 48,175,114 shares 273,105,088 shares As of March 31, 2021 Year ended March 31, 2021 43,363,670 shares 280,879,143 shares (Reference) Non-consolidated financial results Non-consolidated financial results for the year ended March 31, 2022 (April 1, 2021 – March 31, 2022) (1) Non-consolidated financial results (Percentages show change from corresponding year-ago period.) Net Sales Ordinary Income Net Income Operating Income (Loss) Million yen % Million yen % Million yen % Million yen % Year ended March 31, 2022 934,186 1.0 6,693 61,999 123.7 87,029 588.3 925,259 (6.1) (1,155) 27,709 80.4 12,644 (57.9) Year ended March 31, 2021 Net Income per Share Diluted Net Income per Share – – Yen – – Yen 318.65 Year ended March 31, 2022 Year ended March 31, 2021 (2) Non-consolidated financial position 45.02 Total Assets Net Assets Equity Ratio As of March 31, 2022 As of March 31, 2021 Million yen 1,420,458 1,417,801 Million yen 676,890 646,612 Net Assets per Share Yen 2,515.61 2,302.03 % 47.7 45.6 Reference: Stockholders’ equity: As of March 31, 2022: ¥676,890 million As of March 31, 2021: ¥646,612 million * These financial results are exempt from auditing by a certified public accountant or an auditing company. * Explanation regarding appropriate use of earnings forecasts and other special notes Forward-looking statements in this report, including earnings forecasts, are based on assumptions about economic conditions, market trends, and other factors at the time the report was published. Actual results may differ significantly due to a variety of factors. For information about earnings forecasts, see the section titled, “1. Overview of operating results, etc., (4) Forecasts,” on pages 5-7. DNP will hold a briefing (conference call) for institutional investors and analysts regarding its financial results on May 17, 2022. Materials used at the briefing will be uploaded to the DNP website at around 14:00 JST the same day. Contents 1. Overview of operating results, etc. ……………………………………………………………………………………………. 2 (1) Overview of operating results for the year ended March 31, 2022 …………………………………………… 2 (2) Overview of financial position for the year ended March 31, 2022 …………………………………………… 4 (3) Overview of cash flows for the year ended March 31, 2022 ……………………………………………………. 5 (4) Forecasts …………………………………………………………………………………………………………………………. 5 (5) Basic policies regarding the allocation of profits and dividends for the year ended March 31, 2022 and year ending March 31, 2023 ………………………………………………………………………………………… 7 2. Information on the DNP Group ………………………………………………………………………………………………… 7 3. Management policies ……………………………………………………………………………………………………………. 12 (1) Core policies …………………………………………………………………………………………………………………… 12 (2) Management targets ……………………………………………………………………………………………………….. 12 (3) Medium- and long-term management strategy ……………………………………………………………………. 12 4. Basic approach to selecting accounting standards ……………………………………………………………………. 14 5. Consolidated financial statements and key notes ……………………………………………………………………… 15 (1) Consolidated balance sheets ……………………………………………………………………………………………. 15 (2) Consolidated statements of income and comprehensive income …………………………………………… 17 (3) Consolidated statements of changes in net assets ………………………………………………………………. 19 (4) Consolidated statements of cash flows ………………………………………………………………………………. 22 (5) Notes regarding consolidated financial statements ……………………………………………………………… 24 [Notes on premise of a going concern] ………………………………………………………………………………. 24 [Basis of presenting consolidated financial statements] ……………………………………………………….. 24 [Changes in accounting policies] ………………………………………………………………………………………. 27 [Changes in accounting estimates] ……………………………………………………………………………………. 29 [Additional information] ……………………………………………………………………………………………………. 29 [Consolidated balance sheets] …………………………………………………………………………………………. 29 [Consolidated statements of income] ………………………………………………………………………………… 29 [Consolidated statements of changes in net assets] ……………………………………………………………. 30 [Segment information, etc.] ………………………………………………………………………………………………. 32 [Per share information] ……………………………………………………………………………………………………. 36 [Significant subsequent events] ………………………………………………………………………………………… 37 6. Non-consolidated financial statements and key notes ………………………………………………………………. 38 (1) Non-consolidated balance sheets ……………………………………………………………………………………… 38 (2) Non-consolidated statements of income …………………………………………………………………………….. 40 (3) Non-consolidated statements of changes in net assets ………………………………………………………… 41 (4) Notes regarding non-consolidated financial statements ……………………………………………………….. 42 [Notes on premise of a going concern] ………………………………………………………………………………. 42 -1- 1. Overview of operating results, etc. (1) Overview of operating results for the year ended March 31, 2022 Business conditions surrounding the DNP Group during the fiscal year ended March 2022 continued to be affected by the novel coronavirus (hereafter, COVID-19), but due to increased administration of vaccines and other factors, there was a gradual resumption of economic activity. In Japan, working styles and lifestyles continued to change, and demand related to distance learning, online medical care, and 5th generation mobile communication systems (5G) expanded even further. In addition, as efforts to prevent global warming and reduce pressure on the environment spread worldwide, there is a growing need for eco-friendly products and services that will lead to the construction of a carbon-free society and a circular economy. On the other hand, the second half of the period saw increasing impact from such factors as geopolitical risks including the situation in Ukraine, further increases in raw material prices, and the prolonged shortage of semiconductors, extending into the fiscal year through March 2023. Amid these conditions, the DNP Group worked to create new value that meets people’s expectations, and to resolve social issues in order to realize a better, more sustainable society and enable more comfortable lifestyles. The DNP Group has always aspired to contribute to society and to enrich people’s lives, and expresses that desire through its brand statement: “Today’s innovation is tomorrow’s basic.” By combining the strengths of our unique “P&I” (printing and information) technologies, deepening cooperation with our many partners, and providing the types of value that are needed by individuals and society, we strive to express our raison d’être as a company that people cannot live without. In the fiscal year through March 2022, we designated four “focus businesses” where we anticipate strong market growth and high profitability: Internet of Things (IoT)/next-generation communications, data distribution, mobility, and environment. We focused and optimized our management resource allocation in order to expand our business in these areas. the Regarding IoT/next-generation communication, we moved ahead with the development and supply of next-generation semiconductor products that use nanoimprint lithography to support 5G communication. This technology saves energy and reduces costs in semiconductor manufacturing, thereby contributing to the realization of a carbon-free society. Regarding data distribution, we established NTT EDX Co., Ltd. in October 2021, as joint investors with Nippon Telegraph and Telephone West Corp. (NTT West) and Nippon Telegraph and Telephone East Corp. (NTT East), in order to advance higher education. With a focus on electronic textbooks and other teaching materials, we provide various services aimed at solving problems in higher education and supporting the digitization and increased efficiency of publisher and bookstore operations. In addition, we use our Ki-Re-i photo ID kiosks to provide an online application service for acquiring Japanese government “My Number” ID cards. We also promote the digital transformation (DX) of governmental services, and enable contactless application for such services, which suits people’s new lifestyles. In the mobility sector, the DNP Group worked to develop products and services to support a society that uses “next-generation transportation,” which requires reduced environmental impact, higher energy efficiency, greater information security, and high degrees of safety and comfort. For example, we have developed and supplied battery pouches for lithium-ion batteries used in electric vehicles (EVs), and decorative films and panels that enhance the design and function of interior and exterior materials. To protect the environment, we invested more in the development of mono-material packaging materials, which are easier to recycle because they are made of a single type of plastic material. -2- Using the DNP Group’s original technology, we have developed polypropylene (PP) film packaging with a metallic appearance that adds design value in addition to providing a strong barrier against oxygen and water vapor and the ability to contain liquids. In June 2021, this product was adopted by a global manufacturer of consumer goods, and is now on sale in the Southeast Asian market. In addition, we have been working on structural reforms aimed at boosting our competitiveness and have been building a stronger business portfolio. For example, the DNP Group worked to strengthen its business base to support long-term growth by using information and communications technology (ICT) to improve productivity and upgrade its information infrastructure in response to megatrends such as digital transformation (DX). We have also accelerated implementation of initiatives related to the environment, human resources, and human rights. As a result of the above, consolidated net sales for the year ended March 31, 2022 increased 0.7% year on year to ¥1,344.1 billion, consolidated operating income grew 34.8% to ¥66.7 billion, and consolidated ordinary income grew by 35.6% to ¥81.2 billion. Net income attributable to parent company shareholders surged 287.4% over the previous year to ¥97.1 billion, partly due to the posting of extraordinary gains resulting from revision of DNP’s retirement benefit system, review of reserves for repairs, and the sale of investment securities. ROE, which the DNP Group has adopted as a profitability indicator, was 9.1%. Business segment results for the year ended March 31, 2022 are presented below. [PRINTING] Information Communication In Information Innovation, large-scale business process outsourcing (BPO) projects decreased and demand for “My Number” Japanese citizen ID cards and other smart cards subsided, resulting in an overall decline in sales in Information Innovation. In the Imaging Communications business, there was a significant recovery in demand for materials and services related to taking and printing photographs in the main US market and in Japan. Business in other regions also performed well, resulting in an increase in overall sales. In Publishing, e-book sales remained strong, and we saw increased sales from our “honto” hybrid bookstore network that handles both paper and electronic books. Sales of electronic library services and library management operations were favorable. However, overall Publishing sales decreased due to the heavy impact of factors like sluggish magazine printing. As a result of the above, and especially due to the decrease in large government-related BPO projects relative to the previous year, overall segment sales declined 3.2% year on year to ¥698.9 billion. However, thanks largely to the success of cost structure reforms, operating income rose by 43.9% from the previous year to ¥27.6 billion. Lifestyle and Industrial Supplies In the Packaging business, the DNP Group worked at developing and selling its GREEN PACKAGING series of environmentally friendly packaging products, and achieved positive results from structural reforms, including improved efficiency in manufacturing processes and operations. Despite a slight decline in sales of paper containers and film packaging, sales of aseptic filling systems increased, resulting in an increase in sales for Packaging as a whole. In the Living Spaces business, sales of interior and exterior materials for housing and decorative films for automobile interiors increased due to recovery in demand in the housing and automobile markets. Demand for antibacterial and antiviral products that effectively combat infectious diseases -3- also expanded, and overall sales from the Living Spaces business increased. Although our High-Performance Industrial Supplies business was affected by the global shortage of semiconductors, which caused temporary production cuts in its supply chain, sales of lithium-ion battery pouches for vehicular use increased due to growing global demand for electric vehicles. Demand for battery pouches used in tablets and smartphones remained firm due to such factors as increased teleworking, resulting in an increase in overall sales for this business. As a result of the above, overall segment sales increased 5.2% year on year to ¥387.0 billion. Despite the growth in High-Performance Industrial Supplies and cost reductions achieved by optimizing manufacturing systems, operating income fell 2.4% year on year to ¥13.6 billion due to the impact of higher raw material prices. Electronics In the Display Components business, overall sales increased although sales of optical films were affected by the winding down of demand related to “nesting” (spending more time at home due to COVID-19). Sales of metal masks used in the production of organic light-emitting diode (OLED) displays were supported by solid demand for these displays for smartphones. Overall, Display Components sales increased. In the Electronic Devices business, demand for semiconductors expanded due to the acceleration of DX by companies and local governments, and sales of photomasks for manufacturing semiconductor products used for communications, automobiles, and data centers increased. Sales of various related products such as lead frames, which are components used in semiconductor packages, also performed well, and overall sales in this business increased. As a result of the above, overall segment sales increased 7.1% year on year to ¥211.0 billion, and operating income grew 26.7% to ¥46.4 billion due to the increase in sales. [BEVERAGES] Beverages In response to lifestyle changes sparked by the COVID-19 pandemic and the increasing need to reduce pressure on the environment, we focused on both online and over-the-counter sales of beverages in PET plastic bottles with no labels–not even product name labels. Overall segment sales decreased 3.4% year on year to ¥49.7 billion because growth in online and supermarket sales, mainly for home consumption, was outweighed by sluggish sales at restaurants due to the effects of government stay-at-home requests and activity restrictions. Operating income declined 17.8% year on year to ¥0.6 billion due to such factors as the soaring cost of ingredients and materials, as well as increased sales promotion expenses aimed at expanding market share. (2) Overview of financial position for the year ended March 31, 2022 Total assets (assets, liabilities and net assets) at the end of the fiscal year increased by ¥51.6 billion from the end of the previous fiscal year to ¥1,876.6 billion, due to factors including an increase in net defined-benefit asset. Total liabilities increased by ¥1.8 billion from the end of the previous fiscal year to ¥728.2 billion, due mainly to an increase in net defined-benefit liability. Net assets increased by ¥49.7 billion from the end of the previous fiscal year to ¥1,148.4 billion, due mainly to an increase in retained earnings. -4- (3) Overview of cash flows for the year ended March 31, 2022 Cash and cash equivalents at the end of the current fiscal year decreased by ¥10.8 billion from the end of the previous fiscal year to ¥293.3 billion. Cash flow provided by operating activities totaled ¥82.0 billion (¥61.6 billion in the previous fiscal year), due mainly to ¥126.8 billion in income before income taxes and non-controlling interests and ¥51.1 billion in depreciation. Cash flow used by investing activities totaled ¥39.2 billion (¥56.2 billion in the previous fiscal year), due mainly to a ¥53.6 billion in payments for purchases of property, plant and equipment. Cash flow used in financing activities totaled ¥57.7 billion (¥78.2 billion in the previous fiscal year), due mainly to ¥30.0 billion in payments for purchase of treasury stock and ¥17.6 billion in dividends paid. The trends in DNP’s cash flow indicators are shown below. Year ended March 2018 Year ended March 2019 Year ended March 2020 Year ended March 2021 Year ended March 2022 Equity ratio (%) 58.7 56.1 53.2 57.2 58.2 Market value-based equity ratio (%) Debt-to-cash flow ratio (year) Interest coverage ratio (times) 36.9 45.0 37.5 35.7 41.3 3.5 2.4 2.3 2.6 1.9 21.9 33.4 59.8 42.6 111.7 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 It will likely take more time to contain the COVID-19 pandemic. We foresee a continuation of ongoing major changes in the environment, society, and economies in Japan and abroad, including the semiconductor shortage, soaring materials prices, and supply chain chaos and currency fluctuations resulting from geopolitical risks. The printing industry also needs to respond promptly and appropriately to these types of rapid changes in the business environment. The DNP Group accurately grasps and analyzes these risks as variable factors, and not only responds to changes, but also initiates its own changes in order to help realize a sustainable and better society and more comfortable lifestyles. Based on our corporate philosophy, “The DNP Group connects individuals and society, and provides new value,” we will continue to combine our unique strengths in “P&I” (printing and information) and use deeper alliances with external partners to resolve social issues as well as to create new value that meets people’s expectations. In particular, by taking advantage of megatrends such as DX, demographic changes, the introduction of smart cities, and construction of a carbon-free society, and by leveraging the DNP -5- Group’s unique strengths, we intend to speed up our efforts aimed at realizing a better future in the following four “growth areas.” In Knowledge and Communication, we aim to realize a future in which people around the world have greater opportunities for safe and reliable communication and can pass on and develop knowledge. In Food and Healthcare, we aim for a future in which people around the world are free from anxieties about their own lives and can live out their whole lives safely, securely, and enjoy a high quality of life. In Lifestyle and Mobility, our goal is a future in which all the spaces where people worldwide live and move are maintained in comfortable, safe, and secure conditions, and in Environment and Energy, a sustainable future in which less burden is placed on the global environment and people worldwide can live in harmony with the earth. Specifically, the DNP Group has identified “focus businesses” based on appropriate evaluation of the profitability and market growth potential of various businesses, and is optimizing allocation of its capital resources in these fields. While promoting new business development primarily in these focus businesses (IoT/next-generation communications, data distribution, mobility, and environment), we are also implementing structural reforms to increase overall competitiveness, including that of existing businesses. Our goal is to build a well-balanced and robust business portfolio for the entire group. Here is a look at each business segment’s initiatives, starting with Information Communication. This segment intends to focus on its BPO business, where demand continues to grow in response to labor shortages and changes in working styles; its payment services business, a market that is expanding amid increasingly widespread use of diverse payment methods; and its authentication and security business, which is essential to a digital society. In addition, Information Communication aims to expand its information media business that leverages digital transformation (DX), including hybrid marketing that combines real-world and digital sales channels, and the construction of metaverse spaces, starting with PARALLEL CITY urban XR spaces established in cooperation with regional communities. The DNP Group will also continue to advance its “honto” hybrid bookstore network, which combines physical bookstores, online bookstores, and e-book services; its digital library business; educational information and communications technology (ICT) and content-related businesses. At the same time, the Publishing business will continue to work on structural reforms including reviewing its production platform and reallocating resources in response to the ongoing decline in demand for printed media. In the Lifestyle and Industrial Supplies segment, the DNP Group aims to increase its capacity for producing battery pouches for automotive lithium-ion batteries in response to greater uptake of electric vehicles. The segment will also boost profitability by means of a further shift toward high-value-added products such as living space products with enhanced antibacterial and antiviral functionality, and packaging products that guard their contents using film that functions as a highly effective barrier against oxygen and water vapor. We will also focus more keenly than ever on expanding next-generation mobility and medical care/healthcare businesses. In addition, we will collaborate with many partners throughout the supply chain and take advantage of our strength in developing products that are an integral part of consumers’ lives, such as packages for food and household items, and we will work harder than ever to offer our own designs for more comfortable lifestyles. In addition to striving to expand our GREEN PACKAGING series of environmentally friendly packaging products, we provide new value aimed at reducing pressure on the environment and improving energy efficiency by developing and supplying products like the DNP Multifunctional Insulation Box, DNP Lighting Film and photovoltaic module components, etc. Meanwhile, we will work to minimize the impact of soaring prices for films and other raw materials by negotiating with -6- customers to reflect price increases in our selling prices. In the Electronics segment, the DNP Group is responding to the increasing adoption of organic light-emitting diode (OLED) displays in smartphones, tablets, and laptop computers, etc. By leveraging the advantages of its leading global market share, we intend to achieve steady growth in metal masks used in the production of OLED displays. In optical films as well, the DNP Group has secured leading global shares of products such as anti-reflection surface films. The Group is taking advantage of its ultra-wide production lines to increase production volume and market share, and intends to expand its new product lineup. Since demand for photomasks and lead frames is expected to grow in tandem with the booming semiconductor market, we will make appropriate capital investments and take other steps to grow our business. In addition, as an initiative common to all our business segments, we will continue to review holdings of fixed assets and investment securities throughout the DNP Group and promote more effective and efficient use of assets. For the fiscal year ending March 31, 2023, the DNP Group forecasts consolidated net sales of ¥1,380.0 billion, consolidated operating income of ¥67.0 billion, consolidated ordinary income of ¥81.5 billion, and consolidated net income attributable to parent company shareholders of ¥67.0 billion. (5) Basic policies regarding the allocation of profits and dividends for the year ended March 31, 2022 and year ending March 31, 2023 The DNP Group positions as one of its key management initiatives its obligation to meet the expectations of shareholders and other stakeholders, and to achieve long-term growth in order to create a sustainable and better society while steadily returning profits to shareholders. It will return profits by paying stable dividends to shareholders, taking into account factors including earnings and payout ratio. The DNP Group also intends to secure an appropriate level of retained earnings and strengthen its business base in preparation for future business development. It invests retained earnings in the development of new products, services and technologies, in capital spending for developing new businesses, in strategic alliances and M&As, and in human resources that support these activities. At the same time, the Group keeps an eye on its capital requirements as well as market trends, and acquires treasury shares or implements other capital policies flexibly and dynamically. The DNP Group believes that these efforts will contribute to higher profits that can then be passed on to shareholders and other stakeholders in future. Based on this policy, the DNP Group will pay a year-end dividend of ¥32 per share, and adding the interim dividend of ¥32 per share, it plans to pay a full-year dividend of ¥64 per share in the current fiscal year. This will result in a consolidated payout ratio of 18.0% for the current fiscal year. For the fiscal year ending March 31, 2023, the DNP Group forecasts the interim dividend at ¥32 and the year-end dividend at ¥32, for a full-year dividend of ¥64. 2. Information on the DNP Group The DNP Group includes the Company, 147 subsidiaries, and 26 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 business segments cited below are the same as the reporting segment categories. -7- [PRINTING] Information Communication Books including standard books, dictionaries, commemorative and memorial editions, all types of magazines including weekly, monthly and quarterly, corporate PR magazines, textbooks, e-books, catalogs, leaflets, brochures, calendars, posters, point-of-purchase (POP) materials, digital (electronic) signage, sales promotion materials, digital marketing support related to customer analysis, BPR consulting and BPO services related to corporate business processes and sales processes, data center operations, information processing services (IPS), business forms, securities and gift certificates, passbooks, smart cards, payment-related services, card-related equipment, IC tags, holograms, authentication and security services and related products, training and development of cybersecurity personnel, planning/development/production/construction/operations related to events/stores/products/contents, etc. Dye-sublimation thermal transfer materials, (color ink ribbons and receiver paper), thermal resin-type transfer printing media (monochrome ink ribbons), photography-related materials and equipment, self-service printing business, ID photo business e-book distribution and sales, book sales, library management, etc. Major companies Production OGUCHI BOOK BINDING & PRINTING CO., LTD. DNP Imagingcomm Co., Ltd., DNP SP Solutions Co., Ltd. DNP Graphica Co., Ltd., DNP Communication Design Co., Ltd. DNP Book Factory Co., Ltd., DNP Data Techno Co., Ltd. DNP Media Art Co., Ltd., DNP Media Support Co., Ltd. Production and sales DNP Imagingcomm Asia Sdn. Bhd., DNP Imagingcomm Europe B.V. Sales and services DNP Imagingcomm America Corporation *MK Smart Joint Stock Company Maruzen CHI Holdings Co., Ltd., INTELLIGENT WAVE INC. CYBER KNOWLEDGE ACADEMY Co., Ltd. DNP ID System Co., Ltd., DNP Art Communications Co., Ltd. DNP Social Links Co., Ltd., DNP Digital Solutions Co., Ltd. DNP HyperTech Co., Ltd., DNP Photo Imaging Japan Co., Ltd. DNP hollyhock Co., Ltd., DNP PLANNING NETWORK Co., Ltd. 2Dfacto, Inc., DNP Metro Systems Co., Ltd., mobilebook.jp, Inc. MARUZEN-YUSHODO Co., Ltd., MARUZEN PUBLISHING CO., LTD. MaruzenJunkudo Bookstores Co., Ltd., Toshokan Ryutsu Center Co., Ltd., honto Book Services Co., Ltd. Colorvision International, Inc., DNP Photo Imaging Europe SAS DNP Photo Imaging Russia, LLC, Sharingbox SA * Nihon Unisys, Ltd., BOOKOFF GROUP HOLDINGS LIMITED Kyoiku Shuppan Co., Ltd. The shares of Maruzen CHI Holdings Co., Ltd., INTELLIGENT WAVE INC., Nihon Unisys, Ltd. and BOOKOFF GROUP HOLDINGS LIMITED are traded on the Tokyo Stock Exchange. Effective April 1, 2022, Nihon Unisys Ltd. changed its trade name to BIPROGY Inc. -8- Lifestyle and Industrial Supplies Various types of packaging materials for products such as foods, beverages, snacks, household items and medical supplies, cups, plastic bottles, laminated tubes, molded plastic containers, aseptic filling systems Interior and exterior materials for homes, stores, offices, vehicles, home appliances, and furniture, etc.; molded plastic parts for automobiles, metallic veneers Lithium-ion battery components, photovoltaic module components, materials for transporting electronic components, multifunctional insulation box, etc. Major companies Production Production and sales DNP Tamura Plastic Co., Ltd., Aseptic Systems Co., Ltd. DNP Technopack Co., Ltd., N-TECH corporation Sagami Yoki Co., Ltd., DNP Ellio Co., Ltd. DNP Advanced Materials Co., Ltd. DNP Living Space Co., Ltd., DNP Hoso Co., Ltd. DNP Fine Chemicals Utsunomiya Co., Ltd. PT DNP Indonesia, DNP Vietnam Co., Ltd. DNP Lifestyle Materials Marketing Co., Ltd. LIFESCAPE MARKETING CORPORATION DNP・SIG Combibloc Co., Ltd. Sales and services Electronics Optical film for displays, projection screens, metal masks used in the manufacturing organic EL displays, large photomasks for making liquid crystal displays, touch panel components, photomasks for semiconductor products, lead frames, LSI design, hard disk suspensions, electronic modules, MEMS (micro electro mechanical systems) products, etc. Major companies Production DNP LSI Design Co., Ltd., DNP Fine Optronics Co., Ltd. DNP Precision Devices Himeji Co., Ltd. Production and sales DT Fine Electronics Co., Ltd. DNP Denmark A/S, DNP Photomask Europe S.p.A. * Photronics DNP Mask Corporation Photronics DNP Mask Corporation Xiamen Sales DNP Taiwan Co., Ltd. Companies with multiple types of businesses DNP Shikoku Co., Ltd. * DIC Graphics Corporation Sales and services Production and sales DNP Fine Chemicals Co., Ltd., DNP Engineering Co., Ltd. DNP Logistics Co., Ltd., DNP Trading Co., Ltd. DNP Accounting Services Co., Ltd. DNP Information Systems Co., Ltd. DNP Human Services Co., Ltd., DNP Facility Services Co., Ltd. DAP Technology Co., Ltd., DNP Hokkaido Co., Ltd. -9- 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 [BEVERAGES] Beverages Manufacture and sale of carbonated beverages, coffee, tea and fruit juice beverages, functional beverages, mineral water, alcoholic beverages, etc., primarily through Hokkaido Coca-Cola Bottling Co., Ltd. The shares of Hokkaido Coca-Cola Bottling Co., Ltd. are traded on the Tokyo Stock Exchange and Sapporo Securities Exchange. * Equity-method affiliated companies -10- Organizational chart The businesses noted above are shown in the organizational chart below. Information Communication Lifestyle and Industrial Supplies Electronics Beverages Customers (Production and sales) PT DNP Indonesia DNP Vietnam Co., Ltd. (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* Dai Nippon Printing Co., Ltd. (Production) DNP Technopack Co., Ltd. N-TECH Corporation Sagami Yoki Co., Ltd. DNP Ellio Co., Ltd. DNP Advanced Materials Co., Ltd. DNP Living Space Co., Ltd. DNP Hoso Co., Ltd. (Production) DNP LSI Design Co., Ltd. DNP Fine Optronics Co., Ltd. DNP Precision Devices Himeji Co., Ltd. (Production and saes) li HokkadoCoca-CoaBo lttli ngCo., tLd. (Production and sales) DT Fine Electronics Co., Ltd. (Production and sales) DNP Tamura Plastic Co., Ltd. Aseptic Systems Co., Ltd. DNP Fine Chemicals Utsunomiya Co., Ltd. (Sales and service provision, etc.) DNP Lifestyle Materials Marketing Co., Ltd. LIFESCAPE MARKETING CORPORATION DNP・SIG Combibloc Co., Ltd. (Production and sales) DNP Imagingcomm Asia Sdn. Bhd. DNP Imagingcomm Europe B.V. DNP Imagingcomm America Corporation MK Smart Joint Stock Company* (Sales and service provision) Colorvision International, Inc. DNP Photo Imaging Europe SAS DNP Photo Imaging Russia, LLC Sharingbox SA (Production) OGUCHI BOOK BINDING & PRINTING CO., LTD. DNP Imagingcomm Co., Ltd. DNP SP Solutions Co., Ltd. DNP Graphica Co., Ltd. DNP Communication Design Co., Ltd. DNP Book Factory Co., Ltd. DNP Data Techno Co., Ltd. DNP Media Art Co., Ltd. DNP Media Support Co., Ltd. (Sales and service provision, etc.) Maruzen CHI Holdings Co., Ltd. INTELLIGENT WAVE INC. CYBER KNOWLEDGE ACADEMY Co., Ltd. DNP ID System Co., Ltd. DNP Art Communications Co., Ltd. DNP Social Links Co., Ltd. DNP Digital Solutions Co., Ltd. DNP Photo Imaging Japan Co., Ltd. DNP HyperTech Co., Ltd. DNP PLANNING NETWORK Co., Ltd. DNP hollyhock Co., Ltd. 2Dfacto, Inc. DNP Metro Systems Co., Ltd. mobilebook.jp, Inc. MARUZEN-YUSHODO Co., Ltd. MARUZEN PUBLISHING CO., LTD. MaruzenJunkudo Bookstores Co., Ltd. Toshokan Ryutsu Center Co., Ltd. honto Book Services Co., Ltd. Nihon Unisys, Ltd. * BOOKOFF GROUP HOLDINGS LIMITED* 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. DNP Engineering Co., Ltd. DNP Shikoku Co., Ltd. DIC Graphics Corporation* DNP Trading Co., Ltd. DNP Facility Services Co., Ltd. DNP Tohoku Co., Ltd. DNP Corporation USA DNP Accounting Services Co., Ltd. DAP Technology Co., Ltd. DNP Chubu Co., Ltd. DNP America, LLC DNP Information Systems Co., Ltd. DNP Nishi Nippon Co., Ltd. DNP Holding USA Corp. Printing business : Equity-method affiliated companies (Otherwise, subsidiaries) : Flow of products, materials and services Notes: * -11- Beverages business 3. Management policies (1) Core policies The DNP Group’s corporate philosophy expresses our basic management policy: “DNP connects individuals and society, and provides new value.” Based on this idea, we keep our eye on the long term and endeavor to proactively engage in business activities aimed at creating a better future, and to steadily enhance corporate value. Our Business Vision is to expand, through printing and information (P&I) innovations, around a core of four growth areas. To achieve this, we work at creating value by combining our unique P&I strengths and forming alliances with partners. Moreover, the DNP Group seeks to create new value that meets people’s expectations while resolving social issues. We strive to make that value such an integral part of people’s everyday lives that they come to take it for granted. This goal of continually generating indispensable value informs the DNP Group’s internal and external brand statement: “Today’s Innovation is Tomorrow’s Basic.” To achieve this goal, the DNP Group works to continually fulfill what it considers to be its three responsibilities as a company: Value Creation, Integrity of Conduct, and Transparency (Accountability). (2) Management targets Based on its corporate philosophy, the DNP Group will take the initiative to work at creating new value aimed at realizing a sustainable and better society and more comfortable lifestyles, even as environmental, social and economic trends and people’s values change drastically. The Group has identified four growth areas in which it aims to leverage its strengths in order to expand its business, and in which it will implement long-term strategies. We will establish concrete, intermediate targets to mark the way, specifying “how much” of “what” we will accomplish by “when” as we work steadily to achieve the desired results. As of now, we have established “operating income of ¥75.0 billion, operating income to sales ratio of 5.2%, and ROE of at least 5.0%” as our management indicators for the fiscal year ending March 2025. In order to achieve these goals, we will first implement our medium-term management plan covering the three fiscal years from April 2020 through March 2023. (3) Medium- and long-term management strategy The DNP Group will work to achieve the targets in its three-year medium-term plan that runs through the fiscal year ending March 2023 via the two basic strategies of creating value through P&I innovations and strengthening the business infrastructure needed to support growth. < Basic strategy 1> Creating value through P&I innovations [1-1: Creating value primarily in growth areas] The DNP Group analyzes social issues, megatrends, and changes in individuals’ values in order to identify key issues, with consideration given for areas that are of interest to DNP stakeholders and for the degree of relevance to DNP Group businesses. In our view, megatrends that are likely to continue include digital transformation (DX), a shift to data-based economies, decline in the Japanese population and growth in the global population, increasing human lifespans, the development of smart cities, and construction of a decarbonized society. In response to these trends, the DNP Group identifies the kinds of value that only it can create by leveraging its unique strengths, and identifies its focus businesses based on an appropriate evaluation of their profitability and market growth potential. It is working to create a balanced, resilient business portfolio based on optimal allocation of its capital resources, mainly in four focus businesses: IoT and next-generation communications, data distribution, mobility, and environment. -12- [1-2: Providing value optimized to each country and region] The DNP Group is expanding its business globally by accurately grasping the characteristics of each country/region and the issues and needs of its citizens, then developing and supplying optimal products and services. The DNP Group is working to further expand businesses in which it already has a leading global market share, including battery pouches for lithium-ion batteries, metal masks used in the production of organic light-emitting diode (OLED) displays, optical films for displays, and dye-sublimation thermal transfer printing media for photo printing. It is also working to create new businesses that will supply new value to the global market. [1-3: Increasing value using all available restructuring approaches] As part of its quest to build a strong business portfolio, the entire DNP Group will promote a wide variety of structural reforms. For example, in the Information Communication segment, it is working to reduce the number of printed media production bases; in Lifestyle and Industrial Supplies it is reviewing low-value-added products and streamlining bases; and in Electronics it is promoting significant improvements to productivity by using data analysis, robots, and AI. By reallocating the human resources, land, and equipment freed up by these initiatives to development and production that support our “focus businesses,” the DNP Group reforms its business structure and further increases its competitiveness. < Basic strategy 2> Strengthening business infrastructure needed to support growth [2-1: Strengthening financial and non-financial capital] The DNP Group will work to strengthen its business base through the integrated use of both financial and non-financial capital in order to achieve medium- to long-term growth. In addition to pursuing capital strategies that support business growth, DNP is working to strengthen and expand its non-financial capital, such as human, intellectual, manufacturing, natural resources, and social relations, including through the formulation and implementation of specific action plans. On the capital policy front, the DNP Group will invest mainly in focus businesses, in accordance with Basic Strategy 1. Investments in these businesses will be funded not only with our own cash on hand, but also by raising growth funding from third parties, reducing idle assets and selling strategic shareholdings. In addition, we will consider a comprehensive range of capital strategies, including improving capital efficiency, stabilizing our financial base, and returning profits to shareholders. Regarding human resources and human rights, the DNP Group respects the various ways in which each employee differs from others. By combining our diverse strengths, we can generate new value. The DNP Group promotes diversity and inclusion initiatives in order to cultivate a diverse workforce, diverse working styles, and an organizational culture that enables diverse employees to thrive. We are working to close gender gaps in various manifestations, and especially to increase the diversity of decision-making echelons. For female employees, we offer training for career development and support for promotion to managerial positions. As a result, the ratio of female managers reached 7.4% at the end of March 2022, and the number of women in managerial and leadership positions increased 2.2 times over the February 2016 level, thereby achieving the targets that we set in 2019. Our new goals are for the end of fiscal 2025 (end March 2026): to increase the number of female department managers to 1.5 times the number at the end of March 2022; increase the ratio of female section managers to at least 15%, and the ratio of leaders to at least 25%. We intend to work to achieve these goals. Also, on April 1, 2021, the DNP Group drew up the DNP Group Declaration on Health, which positions employee health as a key management issue and aims to strategically promote better health while implementing health-focused management to improve employee vitality and invigorate the organization. -13- [2-2: Strengthening corporate governance] DNP seeks to strengthen corporate governance as a key management priority. The Company has created and implements a robust framework for prompt and accurate management decision-making, business execution, oversight, and auditing. In April 2022, we reorganized the structure of our Sustainability Promotion Committee in order to enhance the sustainability of the environment, society and the economy, and to further promote sustainable growth by DNP itself. Specifically, we made DNP’s president the chair of the committee, the Company’s senior managing director is the vice chair, and corporate directors and officers in charge of each of the head office’s business segments are committee members. In cooperation with the Corporate Ethics Committee and BCM Promotion Committee, the committee analyzes and manages Company-wide risks based on medium- to long-term corporate activities with a focus on environment, society, and governance (ESG). Furthermore, based on our recognition that variable factors that we perceive as risks are at the same time opportunities for business expansion, we will link them to the creation of new value that can contribute to the attainment of SDGs. In order to assure that each and every employee fulfills the Company’s social responsibilities, in addition to encouraging employees to behave in accordance with the DNP Group Code of Conduct, we will work harder than ever to offer various types of training and education in order to cultivate compliance awareness. 4. Basic approach to selecting accounting standards The DNP Group uses Japanese GAAP in preparing consolidated financial statements. It plans to consider adopting IFRS going forward and respond appropriately based on domestic and overseas circumstances. -14- 5. Consolidated financial statements and key notes (1) Consolidated balance sheets Year ended March 31, 2021 (As of March 31, 2021) Year ended March 31, 2022 (As of March 31, 2022) (Million yen) ASSETS Current assets Cash and time deposits Notes and trade receivables Notes receivables Trade receivables Contract assets Marketable securities Merchandise and finished products Work in progress Raw materials and supplies Other Allowance for doubtful accounts Total current assets Fixed assets Property, plant and equipment Buildings and structures Accumulated depreciation Buildings and structures, net Machinery and equipment Accumulated depreciation Machinery and equipment, net Land Construction 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 301,162 324,625 – – – 19,000 75,540 27,810 23,420 34,975 (716) 805,817 533,513 (369,464) 164,049 699,897 (626,186) 73,710 141,808 13,238 128,735 (101,513) 27,221 420,029 2,426 21,048 1,732 25,207 422,799 111,933 9,977 31,995 (2,741) 573,964 1,019,201 1,825,019 287,334 – 46,635 277,912 298 17,900 80,385 30,980 30,255 33,804 (693) 804,813 529,948 (369,441) 160,506 684,070 (613,240) 70,830 139,573 25,640 128,372 (103,046) 25,325 421,875 2,317 23,556 1,873 27,747 410,266 166,130 11,770 36,002 (1,957) 622,210 1,071,834 1,876,647 -15- LIABILITIES Current liabilities Notes and trade payables Short-term bank loans 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 LIABILITIES NET ASSETS Stockholders’ equity Common stock Capital surplus Retained earnings Treasury stock Total stockholders’ equity Accumulated other comprehensive income Valuation difference on available-for-sale securities Net deferred gains on hedges Foreign currency translation adjustments Remeasurements of defined benefit plans Total accumulated other comprehensive income Non-controlling interests TOTAL NET ASSETS TOTAL LIABILITIES AND NET ASSETS (Million yen) Year ended March 31, 2021 (As of March 31, 2021) Year ended March 31, 2022 (As of March 31, 2022) 226,606 37,321 2,545 7,123 19,284 17,688 93,555 408,125 103,550 11,569 49,491 35,174 95,997 22,496 318,279 726,405 114,464 145,024 683,784 (122,920) 820,352 202,017 11 (5,082) 26,678 223,624 54,636 1,098,613 1,825,019 236,188 33,990 2,567 10,051 20,367 17,252 85,689 406,108 102,500 14,254 28,036 55,888 102,275 19,170 322,125 728,233 114,464 145,143 740,183 (133,123) 866,667 192,994 45 4,220 27,932 225,193 56,552 1,148,413 1,876,647 -16- (2) Consolidated statements of income and comprehensive income Consolidated statements of income Year ended March 31, 2021 Year ended March 31, 2022 (Million yen) 1,344,147 1,051,218 292,928 266,140 66,788 4,114 8,686 5,751 18,552 735 1,078 2,277 4,091 81,249 7,133 12,118 18,534 – 14,674 2,118 54,579 3,918 3,506 175 742 596 8,938 126,890 17,998 8,391 26,389 100,501 3,319 97,182 1,335,439 1,058,525 276,914 227,384 49,529 4,341 6,742 4,539 15,623 1,255 1,736 2,253 5,245 59,907 588 1,874 – 365 – 126 2,954 2,919 4,102 4,878 2,905 1,657 16,462 46,400 14,874 3,753 18,627 27,772 2,684 25,088 Net sales Cost of sales Gross profit Selling, general and administrative expenses Operating income Non-operating income Interest and dividends income Equity in earnings of affiliates Other Total non-operating income Non-operating expenses Interest expense Contributions Other Total non-operating expenses Ordinary income Extraordinary gains Gain on sale of fixed assets Gain on sale of investment securities Gain on revision of retirement benefit plan Compensation received Gain on reversal of repair reserve Other Total extraordinary gains Extraordinary losses Loss on sale or disposal of fixed assets Impairment loss Loss on sale of investment securities Loss on devaluation of investment securities Other Total extraordinary losses Income before income taxes and non-controlling interests Current income taxes Deferred income taxes Total income taxes Net income Net income attributable to non-controlling shareholders Net income attributable to parent company shareholders -17- Consolidated statements of comprehensive income (Million yen) Year ended March 31, 2021 Year ended March 31, 2022 Net income Other comprehensive income Valuation difference on available-for-sale securities Net deferred gains on hedges Foreign currency translation adjustments Remeasurements of defined benefit plans Share of other comprehensive income of associates accounted for using equity method Total other comprehensive income Comprehensive income Attributable to： Parent company shareholders Non-controlling shareholders 27,772 91,947 8 (2,324) 31,272 (448) 120,455 148,228 145,856 2,372 100,501 (9,044) 34 7,552 1,568 3,157 3,269 103,770 99,514 4,255 -18- (3) Consolidated statements of changes in net assets The year ended March 31, 2021 (April 1, 2020 – March 31, 2021) Stockholders’ equity Common stock Capital surplus Retained earnings Treasury stock 114,464 145,024 676,346 (122,911) 812,923 Balance at the beginning of current period Changes of items during the period Cash dividends paid Net income attributable to parent company shareholders Change of application of equity method Change in ownership interest of parent arising from transactions with non-controlling shareholders Purchases of treasury stock Disposal of treasury stock Net changes in items other than stockholders’ equity Total changes of items during the period Balance at the end of current period Balance at the beginning of current period Changes of items during the period Cash dividends paid Net income attributable to parent company shareholders Change of application of equity method Change in ownership interest of parent arising from transactions with non-controlling shareholders Purchases of treasury stock Disposal of treasury stock Net changes in items other than stockholders’ equity Total changes of items during the period Balance at the end of current period (Million yen) Total stockholders’ equity (17,977) 25,088 327 0 (9) 0 – (9) 0 (9) (17,977) 25,088 327 0 (9) 0 – 0 7,438 7,429 114,464 145,024 683,784 (122,920) 820,352 Accumulated other comprehensive income Valuation difference on available-for- sale securities Net deferred gains on hedges Foreign currency translation adjustments Remeasure- ments of defined benefit plans Total accumulated other comprehensive income Non- controlling interests Total net assets 110,051 5 (3,448) (3,751) 102,856 52,794 968,574 91,966 91,966 6 6 (1,633) 30,429 120,768 1,841 122,609 (1,633) 30,429 120,768 1,841 130,039 202,017 11 (5,082) 26,678 223,624 54,636 1,098,613 (17,977) 25,088 327 (0) (0) 0 -19- The year ended March 31, 2022 (April 1, 2021 – March 31, 2022) Balance at the beginning of current period Cumulative impact of accounting changes Cumulative impact of changes in accounting policies at equity-method affiliates Balance at the beginning of current period reflecting accounting changes Changes of items during the period Cash dividends paid Net income attributable to parent company shareholders Change in ownership interest of parent arising from transactions with non-controlling shareholders Change in treasury stock resulting from change in ownership of affiliates accounted for by the equity method Purchases of treasury stock Disposal of treasury stock Retirement of treasury stock Net changes in items other than stockholders’ equity Total changes of items during the period Balance at the end of current period Stockholders’ equity Common stock Capital surplus Retained earnings Treasury stock (Million yen) Total stockholders’ equity 114,464 145,024 683,784 (122,920) 820,352 25 25 (3,355) (3,355) 114,464 145,024 680,454 (122,920) 817,022 (17,643) 97,182 118 0 0 (17,643) 97,182 118 0 0 – – (30,012) (30,012) (0) (19,809) (19,809) – 118 59,728 (10,202) 49,644 114,464 145,143 740,183 (133,123) 866,667 -20- Balance at the beginning of current period Cumulative impact of accounting changes Cumulative impact of changes in accounting policies at equity-method affiliates Balance at the beginning of current period reflecting accounting changes Changes of items during the period Cash dividends paid Net income attributable to parent company shareholders Change in ownership interest of parent arising from transactions with non-controlling shareholders Change in treasury stock resulting from change in ownership of affiliates accounted for by the equity method Purchases of treasury stock Disposal of treasury stock Retirement of treasury stock Net changes in items other than stockholders’ equity Total changes of