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A DIFFERENT VIEW FROM THE RESTTOPPAN FORMS REPORT 2015
TOPPA
N FO
RMS REPO
RT 2015
Year ended March 31, 2015
About this Toppan Forms ReportThis Toppan Forms report has been published to serve as a communication tool to help the Company develop stronger trust-based relationships with its shareholders and other investors, as well as all of its other stakeholders. The purpose of this report is not only to disclose information regarding the Company’s operating performance, financial position, and management initiatives, but also to deepen the reader’s understanding of the superior position that the Company has developed in the fields of printing, information management, and communication. Toppan Forms Report 2015 focuses on expanding information on our ESG (environment, social, and governance) activities in order to facilitate an understanding of our long-term value creation among all of our stakeholders.
MANAGEMENT PHILOSOPHY
CONTENTS 1 Our Transformation 2 Our Advances in Value Creation 4 Consolidated Financial Highlights
6 A Message from the President
12 Review of Operations
20 Human Resources
21 Research and Development
22 Corporate Social Responsibility
23 Corporate Governance
26 Board of Directors
28 Financial Section
60 Corporate Information
60 Principal Subsidiaries and Affiliates
61 Investor Information
Toppan Forms Co., Ltd.’s business origin is found in our management philosophy, “san-eki ichijo – tria juncta in uno –
contributions.” This philosophy has been passed down continuously over the years and has served as the fundamental
meaning of the Company’s existence.
“San-eki ichijo” refers to realizing a healthy balance among three kinds of benefits: societal benefits, corporate ben-
efits, and individual benefits. Societal benefits are those that contribute to economic development by creating new
value that answers the needs of society and meets the expectations of customers. Corporate benefits are those that help
to realize sustainable growth by raising profits through fair business activities. Individual benefits are those that build a
prosperous lifestyle for each of our employees and allow them to conduct their work with pride and a sense of mission.
By realizing the balanced integration of these three benefits, Toppan Forms will maximize its corporate value.
SAN-EKI ICHIJO – Tria juncta in uno – Contributions“ ”
In 1965, Toppan Forms was established as a joint venture between TOPPAN PRINTING CO., LTD.,
and Moore Corporation of Canada, specializing in the manufacture and sale of business forms.
This cooperation with Moore Corporation, which at the time was a leading printing company
in Japan and possessed superior printing technology for business forms, allowed us to
establish a production structure throughout Asia that was unprecedented for its time.
Utilizing this production structure, we subsequently expanded our business to become the top
business forms company in Asia.
Since then, Toppan Forms has consistently answered the changing needs of customers
from generation to generation. As a result, we have expanded beyond business forms and in
the process have created various innovative new products and services.
At one time only a printing company, Toppan Forms now also comprises merchandise and
ICT businesses, as well as an expanded overseas business. Not being restricted by
the boundaries of simply being a printing company, Toppan Forms has transformed itself into
a company that provides a range of innovative solutions.
OUR TRANSFORMATION
(BPO)
(Others)
Printing Business(Business forms)
(DPS)
Printing Business (Business forms)
Merchandise Business
ICT Business
Overseas Business
TOPPAN FORMS REPORT 2015 1
Net Sales
¥797million
2015
1965 Net Sales
¥265,886million
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 20150
50,000
100,000
150,000
200,000
250,000
300,000
OUR ADVANCES IN VALUE CREATIONSince its establishment, Toppan Forms has conducted its business activities with the purpose of creating benefits for
society, the Company, and its employees in accordance with its management philosophy “san-eki ichijo,” which refers
to realizing a healthy balance between these benefits. As a result, we have built strong trust-based relationships with
our customers, and cultivated cutting-edge technologies and an abundance of talented human resources, which
have helped support us as we transformed into the company that we are today.
At Toppan Forms, we are celebrating our 50th year since our establishment this year. In this section, we will look
back on the advances we have made in value creation throughout our history.
1965 –1974 CREATION• Established as a specialized manufacturer of
business forms
• Developed foundation of sales bases and core plants
1975 –1984 DEVELOPMENT• Established Toppan Moore Operations Co., Ltd.
(now Toppan Forms Operation Co., Ltd.)
• Displayed originality, such as transportation slip development and comprehensive exhibition sponsorship, corresponding with changing customer needs
1985 –1994 EXPANSION• Grew our Data Print Service
(DPS) business
• Launched stream of new products on the market, such as POSTEX sealed postcards
1971 Completed Osaka Plant
Established Central
Research Center
1972 Established Computer
Forms Co., Ltd. (now Toppan
Forms (Singapore) Pte. Ltd.)
Established Toppan Moore
Paragon (S.E.A) Ltd. (now
Toppan Forms
(Hong Kong) Ltd.)
1974 Established Future
Development Center (FDC)
1982 Established Toppan Moore
Data Products Ltd. (now
Toppan Forms Card
Technologies Ltd.)
1983 Developed contact IC
chip-in card with
integrated circuits
1984 Established Data Products
(Thailand) Ltd. (now Data
Products Toppan Forms Ltd.)
1988 Established Toppan Moore
Computer Systems Ltd.
(now Toppan Forms
Computer Systems Ltd.)
1990 Established Techno Toppan
Moore Co., Ltd. (now Techno
Toppan Forms Co., Ltd.)
1992 Founded dedicated head-
quarters for DPS business
1997 Changed company name to
Toppan Forms Co., Ltd. due
to 100% acquisition of
company shares by
TOPPAN PRINTING CO., LTD.
Printing Business Merchandise Business ICT Business Overseas Business Corporate Development
1965 Established Toppan Moore
Business Forms Co., Ltd.
Completed Hino Plant
1967 Completed Fussa Plant
Business results for fiscal 1978 have been revised to reflect a change in the accounting period.
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 20150
50,000
100,000
150,000
200,000
250,000
300,000
3
1985 –1994 EXPANSION• Grew our Data Print Service
(DPS) business
• Launched stream of new products on the market, such as POSTEX sealed postcards
1995– 2004 REFORMATION• Changed company name to Toppan Forms Co., Ltd.
• Listed stock on First Section of Tokyo Stock Exchange
• Completed new headquarters
• Made reforms aiming for establishment of “a comprehensive information-management service business”
2005 – CHALLENGE• Expanded beyond printing business by strengthen-
ing Business Process Outsourcing (BPO) services and providing ICT solutions in aim “to become the unpar-alleled No. 1 in personal information handling”
1998 Listed stock on First Section
of Tokyo Stock Exchange
2003 Established Beijing
Toppan Forms Co., Ltd.
Established Toppan Forms
Information Systems
(Shanghai) Co., Ltd.
2004 Announced collaboration in
radio frequency identifica-
tion (RFID) strategy with
Microsoft Corporation
2010 Developed MechaCool,
a high-performance refrigerant
Completed Takiyama Plant
2011 Developed metal-compatible
UHF band IC tags
Developed Thincacloud,
a cloud electronic money
(e-money) payment platform
2013 Completed Osaka Sakurai Plant
Established Hino Center to
respond to increasing com-
plexity of BPO customer needs
2014 Selected as both Diversity
Management Selection 100
and Nadeshiko Brand company
by Ministry of Economy,
Trade and Industry
2015 Received Nadeshiko Brand
designation for second
consecutive year
Received Competitive IT
Strategy Company brand
designation jointly from
Ministry of Economy,
Trade and Industry and
the Tokyo Stock Exchange
Celebrated 50th year
since establishment
Business results for fiscal 1978 have been revised to reflect a change in the accounting period.
Net Sales
¥265,886million
4 TOPPAN FORMS REPORT 2015
Millions of yenThousands of
U.S. dollars*1
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2015
Business Results Net sales ¥199,173 ¥212,327 ¥219,197 ¥228,565 ¥235,895 ¥231,617 ¥224,305 ¥227,049 ¥243,799 ¥261,411 ¥265,886 $2,212,582 Operating income 13,696 15,717 16,088 15,178 15,687 12,997 10,308 10,908 11,887 12,270 12,606 104,901 Operating income margin (%) 6.9 7.4 7.3 6.6 6.6 5.6 4.6 4.8 4.9 4.7 4.7 — Net income 8,276 9,392 9,684 8,752 8,791 7,512 5,030 5,590 7,109 7,322 7,835 65,199 R&D expenditure 2,106 2,174 2,242 2,556 2,697 2,258 2,413 2,269 2,075 1,928 1,781 14,821 Capital expenditure 3,296 5,851 10,173 9,828 9,619 10,275 11,261 5,596 12,998 10,317 XX,XXX XXX,XXX Depreciation 4,936 4,835 5,013 6,369 8,561 8,904 8,512 8,566 7,470 8,375 8,632 71,832
Financial Position Total assets ¥169,070 ¥182,705 ¥186,902 ¥185,237 ¥185,635 ¥187,094 ¥186,576 ¥190,550 ¥200,510 ¥208,005 ¥224,358 $1,867,005 Total net assets 113,985 118,432 125,285 127,888 133,894 138,631 140,886 143,701 150,264 155,308 163,916 1,364,034
Cash Flows Net cash provided by operating activities ¥14,049 ¥13,319 ¥10,625 ¥ 13,524 ¥ 15,685 ¥14,520 ¥ 17,427 ¥11,670 ¥17,183 ¥ 13,882 ¥26,419 $219,847 Net cash used in investing activities (4,294) (5,458) (8,247) (11,948) (10,110) (9,783) (12,504) (5,898) (8,822) (15,927) (7,788) (64,808) Free cash flow 9,755 7,861 2,378 1,576 5,575 4,737 4,923 5,772 8,361 (2,045) 18,631 155,039 Net cash used in financing activities (2,270) (4,074) (2,805) (6,420) (3,488) (3,768) (3,575) (3,242) (2,950) (2,675) (2,932) (24,399)
Per Share Data*2 (yen) Net income per share ¥ 71.44 ¥ 81.42 ¥ 84.98 ¥ 77.24 ¥ 79.20 ¥ 67.68 ¥ 45.32 ¥ 50.37 ¥ 64.05 ¥ 65.96 ¥ 70.59 $ 0.59 Shareholders’ equity per share 998.05 1,082.39 1,129.46 1,162.99 1,199.04 1,245.62 1,263.23 1,289.67 1,348.07 1,393.46 1,457.40 12.13 Cash dividends per share 23.00 24.00 25.00 25.00 25.00 25.00 25.00 25.00 25.00 25.00 25.00 0.21
Financial Indicators (%) Return on equity (ROE) 7.5 7.9 7.7 6.8 6.7 5.5 3.6 3.9 4.9 4.8 5.0 Return on assets (ROA) 4.9 5.1 5.2 4.7 4.7 4.0 2.7 2.9 3.5 3.5 3.5 Equity ratio 67.4 67.6 68.9 69.7 71.7 73.9 75.2 75.1 74.6 74.4 72.1
Non-Financial Data Number of employees (consolidated) 6,074 6,224 6,483 6,641 7,357 7,529 7,598 7,715 7,827 11,429 11,964 Percentage of female employees (non-consolidated)(%) 9.9 11.2 11.6 12.5 13.2 13.7 14.1 17.4 18 18.3 19.5 CO2 emissions (domestic)*3(t-CO2) 44,484 46,156 44,915 46,469 47,575 47,325 49,413 45,711 44,575 46,455 46,123*1 U.S. dollar amounts have been converted from yen, for convenience only, at the rate of ¥120.17 = US$1, as at March 31, 2015.*2 The computations of net income per share and shareholders’ equity per share are based on the weighted-average number of common stock outstanding during each year. Treasury stock held during each year are excluded. Cash dividends per share represent the actual amounts applicable to the earnings of the respective years.*3 CO2 emissions were calculated based on the Ministry of the Environment’s Guidelines for the Calculation Method for Greenhouse Gas Emissions from Businesses (2003).
CONSOLIDATED FINANCIAL HIGHLIGHTSToppan Forms Co., Ltd. and Consolidated Subsidiaries
70,000
0
140,000
210,000
280,000
11 12 13 14 150
4,000
8,000
12,000
16,000
0
2,000
4,000
6,000
8,000
0
1.5
3.0
4.5
6.0
11 12 13 14 150
1.5
3.0
4.5
6.0
0
60,000
120,000
180,000
240,000
11 12 13 14 15
Net Sales / Operating Income
(Millions of yen) (Millions of yen)
Net Income / ROE
(Millions of yen) (%)
Total Assets / ROA
(Millions of yen) (%)
Net Sales Operating Income (right) Net Income ROE (right) Total Assets ROA (right)
TOPPAN FORMS REPORT 2015 5
Millions of yenThousands of
U.S. dollars*1
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2015
Business Results Net sales ¥199,173 ¥212,327 ¥219,197 ¥228,565 ¥235,895 ¥231,617 ¥224,305 ¥227,049 ¥243,799 ¥261,411 ¥265,886 $2,212,584 Operating income 13,696 15,717 16,088 15,178 15,687 12,997 10,308 10,908 11,887 12,270 12,607 104,905 Operating income margin (%) 6.9 7.4 7.3 6.6 6.6 5.6 4.6 4.8 4.9 4.7 4.7 — Net income 8,276 9,392 9,684 8,752 8,791 7,512 5,030 5,590 7,109 7,322 7,835 65,199 R&D expenditure 2,106 2,174 2,242 2,556 2,697 2,258 2,413 2,269 2,075 1,928 1,781 14,822 Capital expenditure 3,296 5,851 10,173 9,828 9,619 10,275 11,261 5,596 12,998 10,317 6,334 52,709 Depreciation and amortization 4,936 4,835 5,013 6,369 8,561 8,904 8,512 8,566 7,470 8,375 8,633 71,840
Financial Position Total assets ¥169,070 ¥182,705 ¥186,902 ¥185,237 ¥185,636 ¥187,094 ¥186,576 ¥190,550 ¥200,510 ¥208,005 ¥224,358 $1,867,006 Total shareholders’ equity 113,985 118,432 125,285 127,888 133,894 138,631 140,886 143,701 150,264 155,308 163,916 1,364,035
Cash Flows Cash flow from operating activities ¥14,049 ¥13,319 ¥10,625 ¥ 13,524 ¥ 15,685 ¥14,520 ¥ 17,427 ¥11,670 ¥17,183 ¥ 13,882 ¥26,420 $219,848 Cash flow from investing activities (4,294) (5,458) (8,247) (11,948) (10,110) (9,783) (12,504) (5,898) (8,822) (15,927) (7,790) (64,816) Free cash flow 9,755 7,862 2,378 1,576 5,575 4,737 4,923 5,772 8,361 (2,045) 18,630 155,032 Cash flow from financing activities (2,270) (4,074) (2,805) (6,420) (3,488) (3,768) (3,575) (3,242) (2,950) (2,675) (2,933) (24,402)
Per Share Data*2 (yen) Net income per share ¥ 71.44 ¥ 81.42 ¥ 84.98 ¥ 77.24 ¥ 79.20 ¥ 67.68 ¥ 45.32 ¥ 50.37 ¥ 64.05 ¥ 65.96 ¥ 70.59 $ 0.59 Total equity per share 998.05 1,082.39 1,129.46 1,162.99 1,199.04 1,245.62 1,263.23 1,289.67 1,348.07 1,393.46 1,457.40 12.13 Cash dividends per share 23.00 24.00 25.00 25.00 25.00 25.00 25.00 25.00 25.00 25.00 25.00 0.21
Financial Indicators (%) Return on equity (ROE) 7.5 7.9 7.7 6.8 6.7 5.5 3.6 3.9 4.9 4.8 5.0 Return on assets (ROA) 5.1 5.1 5.2 4.7 4.7 4.0 2.7 2.9 3.5 3.5 3.5 Equity ratio 67.4 67.6 68.9 69.7 71.7 73.9 75.2 75.1 74.6 74.4 72.1
Non-Financial Data Number of employees (consolidated) 6,074 6,224 6,483 6,641 7,357 7,529 7,598 7,715 7,827 11,429 11,964 Percentage of female employees (non-consolidated)(%) 9.9 11.2 11.6 12.5 13.2 13.7 14.1 17.4 18.0 18.3 19.5 CO2 emissions (domestic)*(t-CO2) 44,484 46,156 44,915 46,469 47,575 47,325 49,413 45,711 44,575 46,455 46,123*1 U.S. dollar amounts have been converted from yen, for convenience only, at the rate of ¥120.17 = U.S.$1, as at March 31, 2015.*2 The computations of net income per share and shareholders’ equity per share are based on the weighted-average number of common stock outstanding during each year. Treasury stocks held during each year are excluded. Cash dividends per share represent the actual amounts applicable to the earnings of the respective years.* CO2 emissions were calculated based on the Ministry of the Environment’s Guidelines for the Calculation Method for Greenhouse Gas Emissions from Businesses (2003).
0
50,000
100,000
150,000
200,000
0
25.0
50.0
75.0
100.0
11 12 13 14 15–30,000
–15,000
0
15,000
30,000
11 12 13 14 15 11 12 13 14 150
20
40
60
80
Total Shareholders’ Equity / Equity Ratio(Millions of yen) (%)
Cash Flows
(Millions of yen)
Net Income Per Share
(Yen)
Total Shareholders’ Equity Equity Ratio (right) Net Cash Provided by Operating Activities
Net Cash Used in Investing Activities
Net Cash Used in Financing Activities
6 TOPPAN FORMS REPORT 2015
Shu SakuraiPresident and CEO
A MESSAGE FROM THE PRESIDENT
To Our Stakeholders
Celebrating Our 50th Anniversary
Foreseeing the trend toward computerization in Japan, Toppan Forms was established with the desire to con-
tribute to the changing society. Started as a small venture company between the world’s largest business forms
printing company and Japan’s largest comprehensive printing company, Toppan Forms has since established its
roots firmly in the fabric of the Japanese economy, and has subsequently contributed greatly to Japan’s rapid
industrial development. In this way, we have established a solid presence in Japanese society.
Unchanging Management Philosophy
At the time of our establishment, we adopted “san-eki ichijo” (creating benefits for all three areas of society) as
our management philosophy. To this day, that philosophy continues to be the meaning of and the foundation
for our existence. “San-eki ichijo” places equal importance on three kinds of benefits: societal benefits, corporate
benefits, and individual benefits. The philosophy embodies the belief that a collective effort by the Company
TOPPAN FORMS REPORT 2015 7
and its employees to contribute to the prosperity of society through the Company’s business will in turn lead to
the development of the Company and the happiness of its employees. The trust-based relationships that we
have cultivated with our customers over many years under this philosophy are truly an invaluable asset. It is
precisely because of these trust-based relationships that we have a vast number of customers who provide us
with their interest and cooperation as we establish new businesses and introduce new technologies.
Changing According to the Generation
While the Company’s philosophy remains unchanged, we have certainly changed our business to meet the
changing needs of customers from generation to generation. At one time being only a company specializing in
the manufacture and sale of business forms, we have subsequently leveraged cutting-edge technologies to
evolve into a company with four business areas: printing, ICT, merchandise, and overseas. The roots of this evolu-
tion are in the Company’s strengths. As we responded to the changing needs of our customers, we drew upon
these strengths to gradually expand into related business domains. Going forward, we will continue our mission
to further expand and strengthen the Toppan Forms Group’s business foundation in order to realize sustainable
growth for the next 50 to 100 years.
Business Performance
Operating Environment
In Japan, the subsequent reversal in the temporary increased demand following the rush related to the con-
sumption tax rate hike put downward pressure on the economy. However, the economy began to gradually
recover against a backdrop of several factors, including an improved environment for employment and income,
the positive effects of various government-led initiatives, and improved corporate earnings. Overseas, although
Net Sales
(Millions of yen)
Operating Income / Operating Income Margin(Millions of yen) (%)
Net Income
(Millions of yen)
280,000
210,000
140,000
70,000
011 12 13 14 15
8,000
6,000
4,000
2,000
011 12 13 14 15
16,000
12,000
4,000
8,000
011 12 13 14 15
10.0
7.5
5.0
2.5
0
Operating Income Operating Income Margin (right)
8 TOPPAN FORMS REPORT 2015
some countries and regions experienced an economic recovery, overall economic conditions remained unsta-
ble for many due to downside risks such as concern over the slowdown in economic growth in China.
Under these global economic conditions, we are working to expand contracts in our BPO operations. We
are also making concerted efforts in ICT fields and taking initiatives to establish a greater presence in overseas
markets such as in Hong Kong and Singapore. In addition, with the aim to improve productivity and support our
business continuity plan, we successfully completed the consolidation and reorganization of manufacturing bases,
which we had been long promoting.
Overall Business Performance in the Year under Review
Net sales increased 1.7% year on year, to ¥265.9 billion. This increase was driven by solid performances in both our
DPS and BPO operations. In addition, increased sales in our ICT Business segment and Overseas Business seg-
ment, which we have positioned as high growth domains, also contributed to this increase. Operating income
rose 2.7% year on year, to ¥12.6 billion, and net income climbed 7.0%, to ¥7.8 billion. For the current fiscal year, we
forecast net sales of ¥274.0 billion and operating income of ¥13.5 billion.
Reflection on the Previous Medium-Term Management Plan
Results and Issues
Our previous medium-term management plan, which ran from the fiscal year ended March 31, 2013, to the
fiscal year ended March 31, 2015, placed high priority on strengthening our business foundation to withstand
changes in the operating environment over the medium- to long-term. Under this plan, we expanded our
business activities accordingly.
Specifically, we conducted a far-reaching overhaul of our manufacturing structure, consolidating our man-
ufacturing bases down from 40 to 26. In addition, we implemented various cost-cutting initiatives. Meanwhile,
we engaged in M&A activities to bolster our integrated systems for contracting services in our BPO operations,
and we carried out strategic investments together with parent company TOPPAN PRINTING CO., LTD., such as
relocating and expanding the functions of an existing datacenter.
For the fourth consecutive fiscal period, we achieved increases in both sales and income. However, in the
fiscal year ended March 31, 2015, the final year of our previous medium-term management plan, we were unable
to achieve the level of sales and operating income we had forecast at the beginning of the period. This is a point
we are reflecting deeply upon. Unfavorable conditions in our business forms operations were worse than antici-
pated and production decreased as a result. Because of this, we were unable to achieve the cost reductions we
had aimed for. In addition, purchasing prices for certain types of paper rose, as did logistics and labor costs. All of
these factors exceeded our forecasts, resulting in us being unable to achieve our targets for either sales or
operating income.
Improving profitability will continue to be a major management issue going forward and, accordingly, we
will actively make efforts to further improve profitability under our new medium-term management plan.
TOPPAN FORMS REPORT 2015 9
Introduction of the New Medium-Term Management Plan
Overview
Our new three-year medium-term management plan, which will run from the fiscal year ending March 31, 2016,
to the fiscal year ending March 31, 2018, represents a period for Toppan Forms to strengthen its ability to respond
to major changes in the operating environment that we are anticipating to occur in the short- to medium-term.
Under the new plan, our fundamental course of action is “to become the unparalleled No. 1 in personal informa-
tion handling with ‘overwhelming quality’ and ‘absolute security.’” This reflects our aim of establishing a powerful
and unrivalled share in the “personal notification” field, a field of expertise for the Company that utilizes variable
printing technologies, which is capable of changing elements such as text, graphics, and images from one
printed item to the next, to print content that best suits each recipient.
The Three Pillars of the New Plan
1. Accelerate the merger of paper media and IT
We will enhance our outsourcing foundation, making it compatible with both paper and digital media. At the
same time, we will establish systems that are multichannel and compatible with multiple devices.
FastShot is a digital forwarding solution for personal identifi-
cation documents. By combining existing paper services, such as
business forms and DPS, with digital applications from smart-
phones and PCs, this service realizes both paper and digital media
compatibility. Going forward, we will apply the technologies used
in the FastShot service to the digitalization of contract changing
procedures as well as information collecting work related to the
“My Number” national identification number system.
2. Strengthen and expand the use of digital printing
We will work to optimize the value of “personal notification”
through one-on-one communication. In order to do so,
we will make efforts to improve the quality of digital printing
systems, which in turn will lead to the creation of new
business opportunities.
Utilizing the purchasing history of users, Variable Coupon
DM provides users with printed information on discounts and
products based on user tastes and preferences, thereby realizing
high response rates. We have enhanced the personal touch
offered by this service and, as a result, customers who use this
service have nearly doubled their sales since the service’s launch.
FastShot service makes a judgment on the authenticity of personal identification documents from photos of a user’s driver’s license or other forms of identification
Variable Coupon DM service automatically generates coupons of varying discount rates for each individual user based on the user’s purchasing history
10 TOPPAN FORMS REPORT 2015
3. Develop Strategically Invested Group Companies into Dynamic Force
We will further enhance our coordination with Group companies such as J-SCube Inc., TOSCO CORPORATION,
TF Payment Service Co., Ltd., and Data Products Toppan Forms Ltd. through strategic investment. We will also
devise strategic ways to promote the business operations of these companies.
In the BPO domain, J-SCube possesses industry-leading technology and know-how in the digitalization of
paper documents, scanning, and other areas of the information input field. In the ICT domain, TOSCO
CORPORATION boasts an expansive foundation of customers, primarily leading system manufacturers and
system vendors. TF Payment Service promotes the revolutionary e-money payment platform business. Overseas,
Data Products Toppan Forms acts as a base to further expand our operations into ASEAN markets. We have
strategically invested in these Group companies, and we will work to enhance cooperation among them
moving forward. In doing so, we will bolster their competitiveness.
Continuing to Be a Company Highly Praised by Society
Received Grand Prix at DM Award
During the period under review, Toppan Forms received the Grand Prix at the 29th DM Award for direct mail-
ing (DM) products it created. This competition is sponsored by Japan Post Service Co., Ltd., and prizes are
awarded to DM products that exhibit superior response, planning, and creativity.
By developing services that utilize a scientific approach, such as consumer and gaze measurement
surveys and the analysis of customer data, Toppan Forms has created the LABOLIS solutions service. This service
identifies and designs optimal solutions to address the needs of customers together with the customer.
In developing LABOLIS, we combined the verification data and know-how that we have accumulated over
the years. For the DM Award, we submitted two DM products that we used to introduce the LABOLIS service to
clients. The submitted DM products received high praise from the judges for the way they encourage the recipi-
ent to (1) open the mailing, (2) read its content, and (3) access video content related to the mailing via the
Tool Box Shaped DM
With the aim of creating new business opportunities for our
customers, tool box shaped DMs are sent to potential customers
of our customers who have yet to make a purchase. In order to
promote the DM Check Package service, which identifies ways to
improve the response rate of DM services using a three-step
process, we chose a tool box as the shape of the DM, as tool
boxes are associated with carrying out repairs. With an opening
ratio of 99% and a business opportunity creation ratio of 77%,
the tool box shaped DMs have
led to a large amount of new
business opportunities for
our customers.
Mail Box Shaped DM
With the aim of increasing awareness and understanding of
LABOLIS among our customers, mail box shaped DMs are sent
to customers. These mail box shaped DMs are designed in a
way to spark the interest of customers into opening them.
They also invite the recipient to view video content on
YouTube that showcases how the gaze measurement func-
tion of the LABOLIS service highlights the eye movement of
consumers as they open and read through a direct mailing.
Video of gaze measurement service (available on YouTube) https://youtu.be/VlCoIw9GsDc
TOPPAN FORMS REPORT 2015 11
enclosed QR code. As a result, we were awarded the Grand Prix, which is the highest award at the DM Award.
Moving forward, we will continue to utilize advanced methods to provide DM services that reach out to
each individual recipient.
Granted Brand Designations
Also during the period under review, Toppan Forms was granted the Competitive IT
Strategy Company brand designation jointly by the Ministry of Economy, Trade and
Industry and the Tokyo Stock Exchange. In receiving this designation, we were com-
mended on the way we developed new business opportunities, such as the
Thincacloud e-money payment platform, without constraining ourselves to the
framework of our existing businesses. We were also highly praised for our superior IT
environment, recognizing our establishment of a new datacenter, which will act as a
foundation for our IT operations going forward.
In addition, we were granted the Nadeshiko Brand* designation for the second consecutive year. Personally,
I am extremely delighted to know that the Company is being recognized for its efforts to achieve one of its most
important goals of being a “company highly praised by society.” Without letting these accomplishments inflate
our ego, the Company will continue to make a unified effort to boldly take on new challenges in order to make
more-significant accomplishments, both in our business operations and within society. * The Nadeshiko Brand is granted to companies that encourage women to play active roles in the workplace, and develop a workplace environment in
which women are able to further their careers. Toppan Forms was evaluated highly for its management ability, which utilizes diverse human resources, and its ability to adapt to the changing work environment.
Shareholder Returns
Toppan Forms aims to become an information management solutions company as we work to create increased
corporate value. As a basic financial policy, we allot a large portion of profits for capital investment in the neces-
sary research and development and rationalization to develop and expand our business. We also allot profits for
strategic growth investments to develop new businesses.
In regard to our policy on shareholder returns, we encourage shareholders to maintain their holdings for
the medium- to long-term; consequently, we intend to continue offering stable shareholder returns determined
based on consideration of business performance and the dividend payout ratio. For the year under review, we
issued dividend payments totaling ¥25 per share, making for a consolidated dividend payout ratio of 35.4%.
Going forward, we will accelerate initiatives in order to push forward with our fundamental course of
action “to become the unparalleled No. 1 in personal information handling with ‘overwhelming quality’ and
‘absolute security’,” and we will realize sustainable growth. I ask that you look forward in anticipation to our
success as we do so.
July 2015
Shu SakuraiPresident and CEO
12 TOPPAN FORMS REPORT 2015
REVIEW OF OPERATIONS
Business Performance in Fiscal 2015In fiscal 2015, the year ended March 31, 2015, sales in the Printing Business segment increased 2.1%
year on year, to ¥181.0 billion. However, sales of business forms decreased due to the impact of
several factors, such as reduced demand brought about by the spread of digitalization, lower
selling prices following increasingly simple orders from customers, and the subsequent reversal
in the temporary increased demand following the rush that accompanied the consumption tax
rate hike.
Despite our efforts to capture demand for personalized printed materials and for batch
outsourcing of printing duties, the performance of DPS operations was relatively unchanged
from fiscal 2014, the year ended March 31, 2014, due to the offsetting of the effect of the spread of
digitization with lower selling prices of products in certain customer transactions.
The performance of BPO services was solid, however, this performance was predominantly
driven by increased contracts primarily from financial institutions and local governments.
In regard to operating income, we improved manufacturing efficiency by consolidating
and reorganizing manufacturing bases and implemented thorough cost reductions, primarily in
manufacturing costs. Regardless, operating income declined year on year due to increased
temporary expenses from strategic investments in new factory construction and datacenters
and to lower selling prices in business forms and DPS operations.
PRINTING BUSINESS SEGMENT
The Printing Business segment is one of the main pillars that supports earnings creation
for Toppan Forms. Today, the segment is also the core business of the Company, acting
as the starting point for the technologies used to develop our ever-more diverse lineup
of products and services. The segment primarily operates in the fields of business forms,
data print services (DPS), and business process outsourcing (BPO).
(Millions of yen)
Business Forms Data Print Services (DPS)
Business Process Outsourcing (BPO)
Others
Business Forms • Transportation and delivery slips
• Mail-related forms
• POSTEX sealed postcard series
• Environment-friendly business forms
Data Print Services (DPS) • Business mail for notifications
• Direct mail for sales promotions
• Personalized marketing tools
• Personalized educational materials
Business Process Outsourcing (BPO)
• Document scanning
• Customer service and call center operations
• Database management
13 14 150
50,000
100,000
150,000
200,000
Printing Business Segment
68.1%
Net Sales and Composition Ratio
TOPPAN FORMS REPORT 2015 13
Leveraging Our Strengths in Our Growth StrategiesIn Japan, the business forms market is maturing, and the needs for digitalization forms are rising.
Moreover, with lower selling prices following the trend of increasingly simple orders from customers
and intensifying competition, we anticipate that the market for business forms will continue to shrink at
a rate of 3.0~4.0% per year for the immediate future. Under these operating conditions, we are conse-
quently focusing our efforts on expanding the BPO domain, which now incorporates standard business
forms and DPS operations.
The main feature of our BPO services is its integrated systems that can consistently provide con-
tracting services spanning from form design and notifications to input (notification of discrepancies)
and information management. The BPO domain itself comprehensively handles the responsibilities of
the business forms domain, which undertakes the design and manufacture of business forms, the
printed materials that support the business activities of our customers, and the DPS domain, which
accurately processes and communicates personal information entrusted to us by our customers. It also
handles the peripheral duties of these two domains. As such, the integrated systems we have estab-
lished in our BPO services are the result of 50 years of efforts to expand and evolve into the BPO domain.
As we promote our efforts in the BPO domain, we place the utmost importance on our security
systems and the quality of our products and services. Our ability to assure the effectiveness of our
security systems and the quality of our products and services is an important foundation of our busi-
ness. Accordingly, we view investment in these areas as an irreplaceable method for realizing continu-
ous growth going forward.
We have promoted the consolidation and reorganization of our manufacturing bases as part of
efforts to bolster profitability. In conjunction with this, we are revamping security systems within these
bases. We are also introducing sophisticated security systems at our state-of-the-art datacenters. In
terms of quality, in addition to taking initiatives to improve printing quality, we are drawing on our
accumulated experience and know-how to enhance quality inspection and verification systems. We are
also advancing efforts to prevent the occurrence of mistakes or accidents. Furthermore, we store opera-
tional records and surveillance camera footage for a 10-year period and have a system in place to
promptly inspect and respond to a mistake or an accident in the unlikely event one should occur.
Leveraging these strengths, we are focusing our efforts on promoting a highly specialized,
high-value-added BPO business suited to the needs of the financial industry. At the same time, we are
working toward increasing the number of BPO contracts from other industries going forward.
Mitsuyuki HamadaDirector,
Senior General Manager of Corporate Planning Division
PRINTING BUSINESS SEGMENT
Establishing a Cyclical BPO Business ModelAs seen in the diagram to the right, our
cyclical BPO business model consists of
integrated systems that can consistently
provide contracting services spanning from
form design and notifications to input
(notification of discrepancies) and informa-
tion management.
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Financial Institutions
Document inspectionCall center management Customer follow-up in case of discrepancies
Input dataPrint data is used tosimplify data inputand improve dataaccuracy
Noti�cations from �nancial institutionsDesign forms giving consideration to e�ciency of downstream processes; Personal information printouts through DPS operations
Toppan Forms
Customers
Customers �ll out necessary information and resend
14 TOPPAN FORMS REPORT 2015
Business Performance in Fiscal 2015In fiscal 2015, the year ended March 31, 2015, sales in the Merchandise Business segment fell 5.7%
year on year, to ¥51.5 billion. Office supplies operations felt the impact of the subsequent reversal
in the temporary increased demand following the rush related to the consumption tax rate hike.
In addition, we shifted our approach to place more emphasis on the profitability of our products
and services, and as a result, sales fell.
In regard to office equipment-related business, sales also decreased due to the impact of
the previously mentioned reversal in the temporary increased demand as well as the decline in
demand for mailing-related equipment due to the continuing trend to outsource these
functions.
In our line of original products, we made efforts to expand sales of our unique MechaCool
high-performance refrigerant and reusable packaging materials, such as paper containers and
plastic boxes. However, sales decreased due to the lack of services provided to customers on a
temporary basis, which were predominant in the previous fiscal year.
With respect to the system operation contract business, sales increased from the previous
fiscal year, attributable primarily to an increase in system operation contracts from financial
institutions and IT companies, the incorporation of new projects, and the expansion of the con-
tract area from operations to development.
During the period under review, we made revisions to our product lineup and selling prices
and advanced a shift to placing higher emphasis on profitability. Through these means, we
worked to improve the overall operational structure of the business. As a result, profitability
improved on the operating income level.
MERCHANDISE BUSINESS SEGMENT
The Merchandise Business segment handles a variety of services, from providing cus-
tomers with office supplies to the design, manufacture, sale, and maintenance of periph-
erals and related devices in our business forms operations. In addition, this segment also
deals with temperature management systems and processed film and label products.
Office Supplies • Office goods and supplies
• O-TASCARRY online sales system
• Gift and novelty items
Office Equipment-Related Business
• Form processors
• System devices
• Security devices
Original Products • MechaCool temperature management system
• Delivery materials
• Processed films and labels
System Operation Contract Business
• Development personnel
dispatching services
• Operations personnel
dispatching services
Merchandise Business Segment
19.4%
(Millions of yen)
13 14 150
10,000
20,000
30,000
40,000
50,000
60,000
Net Sales and Composition Ratio
TOPPAN FORMS REPORT 2015 15
Leveraging Our Strengths in Our Growth StrategiesIn the Merchandise Business segment, we are making efforts to transform our business structure
to place a higher emphasis on profitability. As part of these efforts, we are shifting our focus to
the development and sale of high-value-added original products, such as our reusable packag-
ing materials and our unique MechaCool high-performance refrigerant.
As for our reusable packaging materials, we are promoting the use of these materials for
the repair and recall of small-scale precision equipment, such as mobile phones, and various
other uses in the so-called venous logistics domain. Moving forward, we aim to also promote the
use of these materials among logistics bases of apparel businesses and various types of manufac-
turers. In this way, we will extend the use of these materials across a wide range of industries.
Meanwhile, MechaCool is, in some cases, being used in combination with packaging materials
that are designed to enhance the efficiency of refrigerants. This combination works to preserve
the quality of products being delivered to stores that delivery trucks cannot always access, such
as convenience stores that operate inside train stations. Though this and other uses, reusable
packaging materials and MechaCool are steadily producing positive results for our customers.
Moving forward, we will promote the expansion of businesses that leverage the deep relation-
ships we have nurtured with customers in the logistics industry through delivery slips and other
products in our business forms operations.
Additionally, we are placing a strong emphasis on optimizing synergies with our Printing
Business, ICT Business, and Overseas Business segments. For example, we are incorporating the
RFID technologies from our ICT Business segment into MechaCool. This makes it possible for us to
provide traceability services that allow customers to track the temperature that products are
being kept at while they are being delivered.
By enhancing the synergies between the diverse lineup of products and services in the
Merchandise Business segment with the various initiatives we are taking in our other business
segments, we will provide advanced, comprehensive solutions that can respond to the increas-
ingly sophisticated and complex needs of our customers going forward.
Hiroshi ItoDirector,
Executive Division Manager of Merchandise Division
MERCHANDISE BUSINESS SEGMENT
Meeting Needs Related to the “My Number” SystemThe “My Number” national identification number system, which will incorporate social security
and individual tax numbers, will be introduced in Japan in 2016. In response to this, Toppan
Forms has developed PASiD, a new product that will substantially simplify procedures related to
the implementation of the “My Number” system at local governments. PASiD is a device that
allows users to scan personal identification documents, have the authenticity of those docu-
ments be verified, and have information be added to those documents. Starting with new products such as PASiD, we aim to compre-
hensively provide local governments with products from our DPS, BPO, smart card, and security system domains.
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16 TOPPAN FORMS REPORT 2015
Business Performance in Fiscal 2015In fiscal 2015, the year ended March 31, 2015, sales in the ICT Business segment increased 2.2% year
on year, to ¥13.7 billion. In the web solutions field, although we advanced a shift to providing
highly profitable, unique services such as digital forwarding systems for documentation that
utilize smartphones, we were unable to record the sales of some products and services before
the last day of the fiscal year, resulting in a lower in sales for the field.
In the card solutions field, sales increased due to our efforts to capture the rise in demand
for smart cards that accompanied the expansion of the SharePoint market in Japan, as well as the
demand for health insurance and access cards.
In the RFID solutions field, sales rose due to increased demand in the domains for
IC labels used at libraries for efficient book management and IC labels used at medical facilities
to manage pharmaceuticals.
In regard to operating income, we advanced a shift to focus on developing highly profit-
able products and serivces and promoted cost-cutting initiatives such as revising our product
development methods. As a result, we posted an increase in operating income.
I CT BUSINESS SEGMENT
In the ICT Business segment, we deal with digital management systems for document
data and a wide range of non-contact type cards, such as ID cards and e-money cards.
We also operate a cloud-based e-money payment platform.
Web Solutions • Digital management systems for document data
• Digital business forms
• Web invoice delivery and browsing services
• Smart device solutions
Card Solutions • IC cards
• E-money cards
• Card issuance outsourcing
• ID cards
• Card issuance systems
Radio Frequency Identification (RFID) Solutions
• IC tags and labels • Maintenance services
• RFID devices
• Package software, cloud services
Near Field Communication (NFC) Solutions
• Thincacloud e-money payment platform • NFC modules
(Millions of yen)
13 14 150
3,000
6,000
9,000
12,000
15,000
Net Sales and Composition Ratio
ICT Business Segment
5.2 %
TOPPAN FORMS REPORT 2015 17
Leveraging Our Strengths in Our Growth StrategiesIn the ICT Business segment, we are combining cutting-edge ICT technologies to develop unique
businesses and services that utilize our strengths in handling business forms and other types of
paper media cultivated in our Printing Business segment and our expertise in integrated systems
for managing personal information established in our DPS operations. Specifically, we are taking
initiatives to develop (1) businesses that deal with the storage, retrieval, and delivery of digital docu-
ments, (2) front-end business services that utilize smart devices, (3) IC cards and RFID solutions that
manage identification for people and objects, and (4) cloud-based e-money payment platforms
that make use of NFC technologies. To realize further growth in the ICT Business segment, we are
focusing our efforts especially on items 1 and 4.
As for item 1, we will provide new solutions in line with customer needs by combining PDF
files and paper media with digital media on the Internet and leveraging the know-how accumu-
lated in our business forms and DPS operations. In addition, we are taking steps to develop tech-
nologies that provide mechanisms to enhance the security of information that is digitally
transmitted. For example, by matching a transmitted PDF file with the GPS information on the
device the recipient is using to view that file, it is possible to make the file viewable only from speci-
fied locations. This would also allow the sender to set a viewing period and limit on the number of
times the file can be viewed. At the moment, the number of companies that can provide this kind
of high-level security and also realize solutions that meld paper media and IT are extremely limited.
In regard to item 4, we will move forward with initiatives centered on the cloud-based
Thincacloud e-money payment platform provided by TF Payment Service, a consolidated subsid-
iary established in 2011. We have made Thincacloud compatible with transportation-related smart
card brands such as the Suica contactless smart card, which is seeing wide-spread use domesti-
cally. This move had greatly improved the competitiveness of Thincacloud. Further, there is a real
need for e-money compatibility emerging in so-called coin businesses, such as laundromats and
gaming arcades, and, accordingly, the e-money payment platform business is finally entering a
phase of substantial sales expansion.
Hayato HirabayashiCorporate Officer,
Executive Division Manager of ICT Business Division
I CT BUSINESS SEGMENT
Creating Opportunities for New Businesses following the Deregulation of Electric PowerThe deregulation of electric power for households slated to go into effect in April 2016 is
expected to give rise to a rapid emergence of various needs, as new entrants will begin to
supply power in place of major power companies. At Toppan Forms, we believe that these
needs, such as the digitalization of billing procedures, will create numerous business oppor-
tunities for our ICT business. In order to take advantage of these emerging needs, we are
promoting the development of various products and services. For example, we are develop-
ing a service called EneEntry, which will utilize the technology cultivated in our unique
FastShot* service. By taking a photo of electricity usage statements with the camera function on a smartphone, EneEntry can create a
simulated energy bill or display a recommended usage plan based on the usage statements. This is one of the many ways we are pursu-
ing new opportunities in the ICT business.* A service that allows users to open bank accounts or complete other application processes that require personal identification by taking a photo of documents that prove the
user’s identity with the camera function on their smartphone. This service is also equipped with a feature that allows it to make a genuine judgment on eligibility simply by reading the IC chip in a user’s driver’s license, for example.
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18 TOPPAN FORMS REPORT 2015
OVERSEAS BUSINESS SEGMENT
In the Overseas Business segment, we handle a wide range of products and services.
In a similar fashion to our domestic businesses, these products and services are not
limited to the field of printing, but include the fields of ICT and merchandise as well.
Printing Fields • Business forms
• BPO services
• DPS services
Merchandise Fields • IT-related products
• Distribution refrigeration systems
• Enterprise resource planning (ERP) and
other solutions-based software
ICT Fields • Cards (cash cards, credit cards,
transportation-related smart cards)
• Card issuance systems (National identification card)
• RFID solutions
(Millions of yen)
Net Sales and Composition Ratio
13 14 150
5,000
10,000
15,000
20,000
Business Performance in Fiscal 2015In fiscal 2015, the year ended March 31, 2015, sales in the Overseas Business segment increased
22.6% year on year, to ¥19.6 billion. Sales increased in printing, merchandise, and ICT fields, repre-
senting solid growth for the segment. In addition, profitability for each company continued to
improve with nearly every company ending in the black. Accordingly, overall profits for the seg-
ment increased.
Leveraging Our Strengths in Our Growth StrategiesThe expansion of Toppan Forms overseas began with the establishment of a subsidiary in
Hong Kong in 1972. Today, we are expanding our businesses in the printing, merchandise, and
ICT fields in various countries, with a particular focus on Hong Kong and Singapore. The
advancement of Japanese companies into China and Southeast Asia has been impressive, and
competition is becoming increasingly more severe as a result. Amid this intensifying competi-
tion, I believe that Toppan Forms has two strengths that cannot be matched by our competi-
tors. The first strength is that the business transactions we conduct with local companies
account for over 80% of our overseas sales. Through this type of local-based business develop-
ment, we have amassed an overwhelming share in the markets of each country.
Overseas Business Segment
7.4 %
TOPPAN FORMS REPORT 2015 19
OVERSEAS BUSINESS SEGMENT
Accelerating Growth at Toppan Forms In our Overseas Business segment, we are providing
products and services that hold a large share in
local markets. Drawing on the strong performance
of these products and services, we will actively
expand our business with our sights set on neigh-
boring countries and regions going forward.
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Meiyo OkaDirector,
Executive Division Manager of International Business Division
Consolidated subsidiariesHong Kong 4 China 4Singapore 1 Thailand 1
Equity-method affiliates
China 1 Malaysia 1Sri Lanka 1
Contract for a national identification card project
60% share of financial cards No. 1 share of BF90% share of DPS
30% share of DPS
Shanghai, Zhejiang
Shenzhen, Guangzhou
Hong Kong, Macau
ThailandMalaysia
Singapore
Sri Lanka
The other strength we possess is the systems we put in place for employing local talent as
management personnel at positions at our overseas locations. This strength started to manifest
itself with the establishment of our overseas business headquarters in Hong Kong in October 2010.
The local managers we employ through these systems can respond appropriately to the business
customs, the market conditions, and changing customer needs in their respective markets. In
many countries and regions, there is a necessity for speed in the decision-making process, much
more so than in Japan. Therefore, when deciding management strategy, the judgment of local
staff is extremely valuable. Taking initiatives based on this judgment has led to strong business
performance in these markets. If we look at the overall performance of our overseas businesses,
we have achieved increased sales and profits for the fourth consecutive fiscal period and are
steadily enhancing our profitability year by year.
These two strengths are the result of efforts to build firm, trust-based relationships with
local customers and employees in our over 40 years of business expansion overseas. Going
forward, we will further enhance coordination between each overseas Group company, includ-
ing equity-method affiliates, and aim to take our overseas business operations to the next level.
We are also promoting initiatives that deepen personnel exchanges between overseas
Group companies on not only a management level but also with sales and manufacturing
personnel as well.
At the end of the 2015 calendar year, the organization the ASEAN Economic Community will
be established, comprising the 10 member countries of ASEAN. With its establishment, there will
be an active movement of “people, things, money, and services,” increasing the amount of busi-
ness opportunities right before our eyes. In March 2015, we made Data Products Toppan Forms a
subsidiary through additional investment. Using this subsidiary as a strategic base, we will act on
these business opportunities and aggressively promote initiatives to realize the Toppan Forms
Group target of having overseas sales account for 10% of total net sales.
No. 1 share of BF, DPSNo. 1 share of ID cards
20 TOPPAN FORMS REPORT 2015
HUMAN RESOURCES
At Toppan Forms, our human resource policies are based on three themes. These themes are (1) provid-
ing a pleasant and fulfilling workplace for employees, (2) creating a work environment that maximizes
the individual abilities of employees, and (3) evaluating the abilities and performance of employees in
a fair and appropriate manner. In addition to the further reinforcement of our corporate structure,
these policies aim to create an ambitious body of employees who boldly take on new challenges.
Cultivating Employees with Strong Character Under our management philosophy “san-eki ichijo,” the Toppan Forms Group works to fulfill its mission as
an innovative business pioneer. While playing a vital role in the resolution of the issues facing our customers,
we aspire to be a company that is filled with employees of strong character and a company that fulfills its
responsibility as a member of society. These aspirations provide the foundation for our basic approach to
human resource management. An employee with strong character is an employee who can take action on
his or her own initiative. Specifically, to cultivate such an employee, we implement training tailored to each
employee’s position as well as other forms of career development training, in addition to conducting com-
pliance training. As another initiative, we provide financial assistance to employees to help them better
develop themselves professionally through self-study or studying at a third-party organization.
Moreover, the Group has promoted “diversity and inclusion” as important concepts in its human
resource management strategy. We believe that by leveraging the diversity of employees, we enhance the
vitality and creativity of the workplace. Accordingly, we are making efforts to create a workplace where
employees of diverse backgrounds can work together in an inclusive way while respecting each other’s
values and beliefs.
Specifically, we are engaging in various initiatives such as promoting active roles for female employ-
ees and a reemployment program for middle-aged and elderly people. We are also promoting the employ-
ment of people with disabilities, and we are making efforts to provide an appropriate work-life balance for
employees. Going forward, we will further accelerate the pace at which we implement these initiatives in
our aim to create an ambitious body of employees with diverse talents to optimize our business perfor-
mance going forward. Adopting the new concepts of “diversity and integration,” we will continue our
efforts to cultivate employees with strong character, who will support the sustainable growth of the Group,
and provide them with a pleasant and fulfilling workplace.
Makoto Sasaki Manager of Diversity
Promotion DepartmentGeneral Affairs Division
The Toppan Forms Group is promoting diversity and inclusion as important concepts in its
human resource management strategy. The Group places particular importance on pro-
moting active roles for female employees and, as such, has carried out training on develop-
ing female employees for managerial positions and established systems to help female
employees with young children maintain an appropriate work-life balance. As a part of
these initiatives for female employees, we held an in-house “Women’s Forum,” for women in
sales positions. In addition to presentations from outside experts, a panel discussion was
held, comprised of female executives from overseas Group companies. The panel members
shared their respective experiences, such as what attracted them to working in sales and
how they overcome work-related hardships and balance work and family life.
Holding a “Women’s Forum” under Theme of “Building a Career for Women in Sales”
TOPPAN FORMS REPORT 2015 21
RESEARCH AND DEVELOPMENT
The research and development (R&D) activities of Toppan Forms were originally centered on materials
and manufacturing machinery technologies related to printed paper forms. However, over time
and as customer needs became more and more diverse, we expanded the scope of our R&D activities
to cover a broader range of R&D domains.
Continuing to Meet Customer Needs without Being Constrained to Any Particular R&D DomainThe Central Research Center of Toppan Forms was established in 1971 inside the Hino Plant, which was then
our main plant. At that time, the domain that we focused our R&D activities on was mechatronics. This was to
enable us to respond to the increasingly complex methods and processes for printing paper forms, including
developing paper form materials and the high-performance manufacturing machinery to handle such
printed paper forms.
Since then, we have launched an extensive portfolio of original products and services based on these
R&D activities as a leading company in the business forms industry. An example of an original product that
became particularly popular is our Postex sealed postcards, which were launched in 1991.
However, shortly thereafter, manufacturing costs for paper forms substantially declined due to
advances in technology. This subsequently allowed a large number of competitors to enter the business
forms market. As a result, there was an urgent need to extend our R&D domains into new fields offering
higher returns. After dissolving our capital alliance with Moore Corporation, in the latter half of the 1990s,
we began to engage in R&D activities in fields related to ICT. This was in addition to our continued efforts in
paper media technologies. Moreover, in order to establish next-generation de facto standards for products
and services in the industry, we made active investments in ICT fields as well.
In recent years, we have been constantly exploring new research themes for our R&D activities in order
to respond to the rapidly increasing and ever-changing needs of customers. In addition, we are also involved
in collaborative research with external institutions.
As a result of these efforts, we have created a large number of original products and services, including
FastShot, which allows its users to apply for a bank account using only their smartphone, and MechaCool, a
refrigerant that realizes optimum temperature management for deliveries of refrigerated items.
Additionally, we have participated in
collaborative research with universities and
other companies to develop Printed Electronic
Tags. In this way, we are continuing to promote
advanced R&D initiatives.
Going forward, we will work to accelerate
the merger of paper media and IT, one of the
growth strategies in our new medium-term
management plan. To this end, we will draw
upon the technologies and know-how we have
cultivated over the years, as well as the solid,
trust-based relationships we have nurtured
with our customers, to further promote original
R&D activities that create new value.
Mizuhiro TaniCorporate Officer,
General Manager of Central Research Center
Printed Electronic Tags Developed in Collaboration with NEDO Toppan Forms participated in a collaborative project with the New Energy and
Industrial Technology Development Organization (NEDO). This project was to develop
the world’s first printable organic temperature sensor and high-performance organic
semiconductor circuit. Applying this temperature
sensor and semiconductor circuit to electronic
tags, we successfully developed a printed elec-
tronic tag that transmits real-time temperature
data on a commercial frequency using
temperature-sensing technology.
Groundbreaking Product Created at Our Central Research Center
22 TOPPAN FORMS REPORT 2015
CORPORATE SOCIAL RESPONSIBILITY
Basic Approach to CSRAt Toppan Forms, we conduct business activities under our manage-
ment philosophy of “san-eki ichijo,” enabling us to exist in harmony
with stakeholders, the environment, and society as a whole through
mutually beneficial relationships, which provides the foundation to
continue to pursue sustainable growth. Since our establishment, our
business environment has undergone dramatic change. However,
despite this change, the Company’s pursuit of corporate benefit at
the same time as pursuing individual and social benefit under “san-
eki ichijo” has remained unchanged. We believe that “san-eki ichijo”
reflects the type of corporate social responsibility (CSR) that society
expects us to practice. Going forward, we will therefore continue to
fulfill our social responsibility by conducting business activities under
our management philosophy that are constantly in tune with stake-
holders, the environment, and society as a whole.
Policy on Environmental ManagementToppan Forms has established the Basic Environmental Principle and
Policies based on its management philosophy of “san-eki ichijo.”
Guided by these, the Company is engaging in various activities
related to preservation of the environment.
CSR Procurement StandardToppan Forms has also established the CSR Procurement Standard
under the Toppan Forms CSR Procurement Guidelines. In cooperation
with its business partners (raw material, equipment, and product
suppliers; manufacturing and processing outsourcing companies),
we are taking the initiative in CSR-based procurement. We request
that our business partners abide by the CSR Procurement Guidelines,
while we also strictly abide by the standard throughout the company.
Through cooperation with our business partners, we are promoting
CSR initiatives across the supply chain. In this way, Toppan Forms
aims to improve corporate value for both itself and its business part-
ners. We believe that the underlying conditions for our business
partners to conduct transactions with the Company are an under-
standing and appreciation of the aims of CSR-based procurement
and adhering to the CSR Procurement Standard.
Basic Environmental Principle
Toppan Forms recognizes the fact that environmental preservation is an
important issue which is shared by all humans, and in order to fulfill our
social responsibility as a corporation, we will continue to implement the
appropriate measures, involving our entire company.
Policies
1. “Protect the environment, and elevate employee awareness levels”
2. “Promote the conservation of resources and energy, and recycling”
3. “Comply with legislation”
4. “Reduce waste materials and prevent environmental pollution”
5. “Develop and sell green products”
6. “Support biodiversity”
More information about our CSR activities is available on our corporate website http://www.toppan-f.co.jp/english/csr/index.html
Promoting Nine CSR Themes
Customers• Assurance of product and service quality and safety• Provision of products and services that contribute to
resolution of social issues
Shareholders and other investors• Fair and impartial disclosure of information
Business partners• Creation of a reliable supply chain
Employees• Respect for and utilization of human resources
• Adherence to laws and corporate ethics
• Pursuit of effective risk management
• Support of environmental preservation
Communities and society at large• Contribution to communities and society at large
“San-eki ichijo”
TOPPAN FORMS REPORT 2015 23
CORPORATE GOVERNANCE
Toppan Forms places the establishment and maintenance of strong corporate governance systems,
the systems through which all aspects of business operations are monitored and executed, among
its top management priorities, as these systems are essential in improving both corporate value and
shareholder value.
Corporate Governance SystemsThe Company has established the Board of Corporate Auditors, with
three of the four members being outside corporate auditors. With the
remaining corporate auditor being full time. Guided by this remaining
full-time corporate auditor, the corporate auditors conduct thorough
auditing activities, including attending meetings of the Board of
Directors as well as other important meetings, auditing principal
business sites and subsidiaries, and monitoring closely the administra-
tive execution of directors.
The Board of Directors consists of 15 directors, with one of the
members being an outside director, and it makes important deci-
sions relating to the Group’s operations and also supervises admin-
istrative execution.
To ensure that directors can conduct their duties in an efficient
manner, meetings of the Board of Directors are held on a monthly
basis and on an extraordinary basis as necessary. Further, meetings of
the Management Meeting, which deliberates on important manage-
ment issues, and the Executive Committee, which is beyond the
corporate governance system and discusses and shares information
regarding business strategies, are held periodically. Through this
system, the Company works to ensure that management decisions
are made in an expedient manner and business operations are con-
ducted efficiently.
In addition, the Corporate Governance Code of Japan was
newly enacted in June 2015. In response to this, the Company is
promoting compliance with the new regulations while also working
to further enhance the efficiency of its governance systems. In doing
so, the Company works to realize sustainable growth going forward.
Corporate Governance System (As of June 26, 2015)
Accounting AuditorCPA
Auditing
Instruction/Education
Auditing
Auditing
Auditing Auditing
Cooperation
Executive DirectorsAuditing O�ce
Operating Divisions
Group CompaniesInternal Reporting SystemCorporate Ethics Hotline
Management Meeting
General Meeting of Shareholders
Company-wide Risk ManagementCommittee
Individual Risk ManagementCommittees at each Operating
Division and Subsidiary
Board of Corporate AuditorsBoard of Directors
Supervision
Emergency ResponseHeadquarters
President andRepresentative Director
Cooperation
Appointment/Dismissal
Appointment/Dismissal
Appointment/Dismissal
Appointment/Dismissal
Director Responsible forRisk Management
Speci�c Risk ManagementCommittees
24 TOPPAN FORMS REPORT 2015
Remuneration of DirectorsThe remuneration of directors comprises a fixed compensation based
on director position and a performance-based compensation decided
through consideration of the director’s level of contribution to business
performance. Both the fixed and performance-based amounts are
paid within a compensation framework determined at the general
meeting of shareholders. In addition, in order to enhance incentives
for long-term performance-linked compensation, a determined
amount of the fixed monthly remuneration for full-time directors is
set aside for the purpose of acquiring the Company’s shares, thereby
aligning the interests of full-time directors with shareholders. The
amount set aside is then allocated to the purchase of the Company’s
shares through the Toppan Forms Directors Shareholding Association.
Independence from Parent CompanyTOPPAN PRINTING CO., LTD. is the parent company of Toppan Forms,
possessing 58.63% of the Company’s voting rights as of March 31,
2015. Toppan Forms has used the original business know-how and
technologies it possesses to establish a solid, independent business
foundation. Toppan Forms does not maintain either a debtor–
creditor relationship, a guarantor–guarantee relationship, or a
licensor–licensee relationship with the parent company. Moreover,
only one Company director holds a position concurrently with the
parent company, and only a small number of employees are trans-
ferred between Toppan Forms and the parent company. For these
reasons, Toppan Forms maintains independence in its business oper-
ations, although sharing its corporate philosophy with that of the
parent company.
Furthermore, while the Company shares an order-receiving
relationship with the parent company for some products and ser-
vices, this does not constitute a significant percentage of the
Company’s business. When such transactions occur, however, they
are carried out in a fair, appropriate manner, on conditions similar to
those of regular business transactions. In addition, the Company
takes heed to ensure that these transactions are not conducted with
biased judgment. Going forward, the Company will continue to
ensure its independence from the parent company. The Company
will also continue to make appropriate judgments regarding transac-
tions with the parent company to prevent the interests of the
Company’s minority shareholders from being unjustly impaired.
IR-Related ActivitiesToppan Forms understands the importance of communicating cor-
porate and business management information to our shareholders,
other investors, and other stakeholders. In order to disclose appropri-
ate information to our stakeholders in a timely manner, our
IR-specialist staff, who support the members of our top management
as well as department managers, engage in numerous IR activities.
Amount of Remuneration Paid to Directors and Corporate Auditors (Fiscal 2015)
Subject of RemunerationNumber of
PeopleRemuneration
Amount
Directors 18 ¥503 million
Corporate auditors (Outside corporate auditors)
4 (3)
¥47 million (¥32 million)
Total (Outside corporate auditors) 22 (3) ¥551 million
Main IR-Related Activities
Activities Details
Presentations for analysts and institutional investors 2 times
Presentations for overseas investors 1–3 times, president or chief financial officer conducts individual meetings with overseas investors to explain business performance
Factory tours for investors 2 times
Disclosure of IR-related materials Multiple times throughout the year through summaries of financial results, securities reports, annual reports, shareholder newsletters, and presentation materials from briefings on financial results.
Establishment of dedicated IR office Part of Public Relations Department
TOPPAN FORMS REPORT 2015 25
ComplianceIn order to better incorporate compliance and corporate ethics into
our daily business operations, the Company has developed the
Toppan Forms Group Action Guidelines, and it is working to dissemi-
nate awareness and the implementation of these guidelines through-
out the company.
With the goal of cultivating a compliance-based mindset in
daily business operations, the legal department is spearheading
numerous compliance-related training and education programs.
Further, compliance promotion representatives and compliance
promotion leaders have been established at each business site to
help support employees in practicing good compliance. We are also
educating overseas Group companies with regard to the Toppan
Forms Group Action Guidelines in order to further the dissemination
of these guidelines throughout the Toppan Forms Group.
Risk ManagementThe Company has developed a comprehensive risk management
system to identify risks and to respond to them in an appropriate way
should they arise. Risk management is primarily handled by five
specific risk management committees that work under the
Company-wide Risk Management Committee, which is chaired by
the director responsible for risk management, to manage major risk
exposure throughout the Group. These committees are the
Company-wide Information Security Committee, the BCM
Promotion Committee, the Quality Committee, the Environmental
Committee, and the Compliance Committee. Additionally, individual
risk management committees have been established in each oper-
ating division and at each subsidiary. These bodies work together in
conducting risk management activities.
Further, in response to the Japanese government (the Cabinet
Office, the Ministry of Economy, Trade and Industry), as well as cus-
tomers, prompting companies to formulate BCPs in the event of an
earthquake or other natural disaster, the social necessity to establish
business continuity management (BCM) systems is rising. Against this
background, in 2010, Toppan Forms took the lead over other compa-
nies in the industry and acquired the BS (British Standard) 25999-2
standard, which was the global standard in BCM at the time. Based on
this standard, the ISO 22301 and JISQ 22301 standards were developed,
being issued in 2012 and 2013, respectively. In December 2013, Toppan
Forms became the first company in the industry to acquire certifica-
tion for the new BCM standard JISQ 22301 (ISO 22301). The Company
has currently developed BCPs for 17 of its operating sites, which
include office buildings and factories located throughout Japan.
Information SecurityThe Data Print Services (DPS) business is one of the Company’s core
businesses. In this business, we are entrusted by our customers with
sensitive information, including personal information. We, therefore,
realize that proper information management is not only necessary in
order to maintain the trust of our customers, but also an important
element of our responsibility toward society.
The Company has subsequently established the Basic Principles
for Information Security and the Personal Information Protection
Policy. Moreover, we have developed the Information Security
Guidelines with the aim of reconciling the differing levels of informa-
tion security awareness among Group companies and operating
divisions. In addition, we are subsequently developing a uniform
information security level throughout the Group. Through these
efforts, we are developing information security systems that are best
suited to Toppan Forms, the industry’s leading company. We are also
actively acquiring certification from external organizations. Currently,
three Group companies have received ISO 27001 certification, while
12 Group companies have received PrivacyMark certification.
26 TOPPAN FORMS REPORT 2015
BOARD OF DIRECTORSAs of June 26, 2015
1
5
2
3
4
President and CEO
Shu Sakurai
Executive Vice President
Yukio Maeda
Board of Directors
Senior Managing Directors
Toshiro Masuda
Akira Kameyama
Koichi Sakata
Managing Directors
Kenichi Fukushima
Toshiaki Kaneko7
6
TOPPAN FORMS REPORT 2015 27
8
9
10
11
12
13
14
15
16
17
18
19
Directors
Naoki Adachi
Kazuko Rudy *1
Mitsuyuki Hamada
Hiroshi Ito
Keitaro Fukushima
Meiyo Oka
Yasuhiro Okada
Hideki Soeda
Auditors
Kyoichi Hori (full time)
Noriaki Kinoshita *2
Kunio Sakuma *2
Akiko Obata *2
Board of Corporate Auditors
1
3 48 9
15 16 1714
10 11 12 13
1918
5 67
2
*1 Outside director
*2 Outside corporate auditor
28 TOPPAN FORMS REPORT 2015
FINANCIAL SECTION29 Financial Review
32 Consolidated Balance Sheets
34 Consolidated Statements of Income
35 Consolidated Statements of Comprehensive Income
36 Consolidated Statements of Changes in Net Assets
38 Consolidated Statements of Cash Flows
39 Notes to Consolidated Financial Statements
59 Independent Auditor’s Report
TOPPAN FORMS REPORT 2015 29TOPPAN FORMS REPORT 2015 29
2011 201420132012 2015
320
240
160
80
0
80.0
75.0
70.0
65.0
0
Net SalesCost of Sales Ratio (right)
17.0
16.0
15.0
14.0
02011 201420132012 2015
20
15
10
5
0
6.0
5.0
4.0
3.0
0
Operating IncomeOperating Income Margin (right)
2011 201420132012 2015
Operating EnvironmentIn fiscal 2015, the year ended March 31, 2015, the operating environ-
ment for the business forms industry continued to be difficult due to
rising raw material prices and logistics costs. In addition, selling prices
declined following wide-spread corporate cost cutting and the
expansion of information technology and networking. Further,
information security measures gained greater importance, reflecting
increased incidents of personal information leaks.
Under these operating conditions, the Group adopted the basic
policy of transforming into a value creation company, and advanced
various initiatives under that policy. We took initiatives to increase
contracts in our BPO operations, focusing primarily on the DPS
business, and made concerted efforts in ICT fields, which we position
as a high growth area going forward. We also focused our efforts on
establishing a greater presence in overseas markets such as in Hong
Kong and Singapore. Furthermore, with the construction of the Osaka
Sakurai Factory, we successfully completed the consolidation and
reorganization of manufacturing bases from 40 to 26, which we have
been long promoting with the aim to improve productivity and
support our business continuity plan.
As a strategic growth investment, the Company strengthened
its alliance with Data Products Toppan Forms, an affiliate in Thailand,
positioning it as an important strategic base for business expansion
in ASEAN markets, and made it a consolidated subsidiary through an
additional investment.
Income and ExpensesIn fiscal 2015, net sales increased 1.7% year on year, to ¥265.9 billion
($2,213 million).
As for net sales by segment, sales in the Printing Business
segment rose 2.7%, to ¥204.3 billion ($1,700 million). The Company
promoted a universal design in pursuit of understandability and
communicability for users. In addition, we moved forward with plans
and proposals for batch outsourcing in the procurement business for
printed materials, focusing primarily on business forms. We also
worked to implement revisions to forms related to company system
changes and peripheral printed materials. However, sales of business
forms declined 2.4% year on year, to ¥74.9 billion ($623 million), due
to the effects of reduced demand brought about by the spread of
digitalization and the subsequent reversal in the temporary increased
demand following the rush that accompanied the consumption tax
rate hike.
In our DPS operations, selling prices declined following wide-
spread corporate cost cutting and a fall in demand for direct mail for
sales promotions. However, sales increased 5.8% year on year, to
¥111.9 billion ($931 million), reflecting firm BPO contracts from
financial institutions and local governments, as well as our efforts to
capture demand for batch outsourcing of printing services and
personalized printed materials using digital printers.
Net Sales / Cost of Sales Ratio(Billions of yen) (%)
SG&A Expenses Ratio
(%)
Operating Income / Operating Income Margin(Billions of yen) (%)
FINANCIAL REVIEWToppan Forms Co., Ltd. and Consolidated Subsidiaries
30 TOPPAN FORMS REPORT 2015
Billions of Yen
12
9
6
3
0
Yen
120
90
60
30
0
Net IncomeNet Income per Share (right)
2011 201420132012 2015
240
180
120
60
0
8.0
6.0
4.0
2.0
0
Total AssetsROA (right)
2011 201420132012 2015
200
150
100
50
0
12.0
9.0
6.0
3.0
0
Total Shareholders’ Equity ROE (right)
2011 201420132012 2015
In our ICT operations, sales rose 6.6% year on year, to ¥17.5
billion ($145 million). This reflected the Company’s success in captur-
ing the increased demand for point cards, e-money cards, and ID
cards, including employee ID cards, which accompanied growing
security needs. In addition to expanded sales of web services for
smartphones, expanded sales of solutions that use radio-frequency
identification (RFID) technology to combine information media, such
as IC tags and cards, with various devices and systems, such as elec-
tronic readers, also contributed to the rise in sales.
Temporary expenses increased due to strategic investments in
the construction of new factories and an additional datacenter. How-
ever, in addition to the positive effects of increased profits associated
with higher sales, the Company maintained profitability in operating
income by consolidating and reorganizing our manufacturing bases,
improving production efficiency, and thoroughly reducing costs,
primarily manufacturing costs.
In the Merchandise Business segment, sales decreased 1.5% year
on year, to ¥61.6 billion ($513 million), mainly due to a fall in toner
sales. However, the Company promoted customer retention by
leveraging O-TASCARRY, the Company’s own online sales system
equipped with an office supply procurement function and a printed
materials inventory control function. We also promoted the sale of
original products such as high-performance refrigerants that target
transport and logistics industries.
In the office equipment related business, demand for mailing-
related equipment fell due to the effects of expanded outsourcing
and the subsequent reversal in the temporary increased demand
following the rush that accompanied the consumption tax rate hike.
However, sales increased year on year mainly due to our success in
capturing demand for office equipment for direct mailing companies
and expanding sales of scanners and input devices for logistics com-
panies. We were also able to expand sales of IT-related equipment in
the Hong Kong market.
Cost of sales rose 2.1% year on year, to ¥211.9 billion ($1,763
million), following higher sales, and the cost of sales ratio edged up
0.3 percentage points, to 79.7%. As a result, gross profit increased
0.4%, to ¥54.0 billion ($449 million).
Selling, general and administrative (SG&A) expenses fell 0.3%, to
¥41.4 billion ($344 million). The SG&A expenses ratio fell 0.3 percent-
age points, to 15.6%. As a result of these factors, operating income
rose 2.7% year on year, to ¥12.6 billion ($105 million). The operating
income margin was unchanged from the previous fiscal year at 4.7%.
The balance of other income and expenses was a positive
¥0.6 billion ($5 million), compared with a negative ¥0.2 billion in the
previous fiscal year. Nevertheless, income before income taxes and
minority interests increased 9.4%, to ¥13.2 billion ($110 million), and
net income rose 7.0%, to ¥7.8 billion ($65 million).
Net income per share was ¥70.59 ($0.59), which was higher than
the ¥65.96 recorded in the previous fiscal year. Return on shareholders’
equity (ROE) rose from 4.8% in the previous fiscal year to 5.0%, and return
on assets (ROA) was unchanged from the previous fiscal year at 3.5%.
Net Income / Net Income Per Share(Billions of yen) (Yen)
Total Assets / ROA(Billions of yen) (%)
Total Shareholders’ Equity / ROE(Billions of yen) (%)
TOPPAN FORMS REPORT 2015 31
Dividend PolicyToppan Forms encourages the medium- to long-term holding of
Company stock on the basis of maintaining a consistent level of
dividends while also taking into account operating performance and
the dividend payout ratio. In fiscal 2015, the amount for annual
dividends was ¥25.00 per share ($0.21), while the consolidated
dividend payout ratio was 35.4%.
Capital Expenditure / DepreciationCapital expenditure, primarily directed toward production facilities,
decreased ¥4.0 billion year on year, to ¥6.3 billion ($52 million).
Depreciation was ¥8.6 billion ($72 million), up ¥0.3 billion year on year.
Financial PositionAt the fiscal 2015 year-end, total current assets stood at ¥121.6 billion
($1,012 million), an increase of ¥15.6 billion compared with the previous
fiscal year-end. Total current liabilities rose ¥7.0 billion, to ¥55.7 billion
($463 million). As a result, working capital decreased ¥0.8 billion, to
¥66.0 billion ($549 million), while the current ratio rose from 217.8%
to 218.5%.
Total net assets at the end of the fiscal year under review stood
at ¥163.9 billion ($1,364 million), an increase of ¥8.6 billion compared
with the previous fiscal year-end. This rise was mainly attributable
to an increase in retained earnings. Total assets amounted to
¥224.4 billion ($1,867 million), a ¥16.4 billion increase compared with
the close of fiscal 2014. Consequently, the equity ratio decreased
from 74.4% to 72.1%.
Cash FlowsNet cash provided by operating activities during the fiscal year under
review totaled ¥26.4 billion ($220 million), compared with
¥13.9 billion in the previous year. Major inflows included income
before income taxes and minority interests of ¥13.2 billion ($110
million), depreciation of ¥8.6 billion ($72 million), and increase in
notes and accounts payable–trade of ¥5.1 billion ($42 million). Major
outflows included income taxes paid of ¥4.2 billion ($35 million) and
decrease in net defined benefit liability of ¥1.2 billion ($10 million).
Net cash used in investing activities amounted to ¥7.8 billion
($65 million), compared with ¥15.9 billion in the previous year. Major
inflows included proceeds from sales and redemption of investment
securities of ¥6.1 billion ($51 million). Major outflows included pur-
chase of property, plant and equipment of ¥6.4 billion ($53 million)
and purchase of investment securities of ¥5.1 billion ($43 million).
Net cash used in financing activities totaled ¥2.9 billion
($24 million), compared with ¥2.7 billion in the previous year. Major
outflows included cash dividends paid of ¥2.8 billion ($23 million).
Cash and cash equivalents at end of period totaled ¥53.5 billion
($445 million), a ¥15.8 billion increase compared with the previous
fiscal year-end.
32 TOPPAN FORMS REPORT 2015
CONSOLIDATED BALANCE SHEETSToppan Forms Co., Ltd. and Consolidated Subsidiaries
Millions of yen
Thousands of U.S. dollars
(Note 1)March 31 2014 2015 2015
AssetsCurrent assets Cash and deposits (Note 10) ¥ 37,734 ¥ 53,680 $ 446,701 Notes and accounts receivable–trade 49,626 49,522 412,101 Short-term investment securities (Notes 12 and 13) 1,655 1,101 9,162 Merchandise and finished goods 8,010 7,975 66,363 Work in process 1,089 1,054 8,773 Raw materials and supplies 2,398 2,378 19,786 Prepaid expenses 1,457 1,553 12,924 Deferred tax assets (Note 16) 2,268 2,222 18,492 Other current assets 1,992 2,274 18,928 Allowance for doubtful accounts (206) (122) (1,019) Total current assets 106,023 121,637 1,012,211 Noncurrent assets Property, plant and equipment Buildings and structures 62,392 65,298 543,383 Accumulated depreciation (27,696) (29,916) (248,951) Buildings and structures, net 34,696 35,382 294,432 Machinery, equipment and vehicles 74,020 77,838 647,731 Accumulated depreciation (63,937) (67,554) (562,155) Machinery, equipment and vehicles, net 10,083 10,284 85,576 Tools, furniture and fixtures 13,921 14,855 123,619 Accumulated depreciation (10,182) (11,347) (94,426) Tools, furniture and fixtures, net 3,739 3,508 29,193 Land 22,497 23,369 194,463 Lease assets 393 494 4,112 Accumulated depreciation (366) (445) (3,706) Lease assets, net 27 49 406 Construction in progress 2,169 235 1,954 Total property, plant and equipment 73,211 72,827 606,024 Intangible assets Goodwill 405 1,126 9,370 Others 4,859 5,215 43,402 Total intangible assets 5,264 6,341 52,772 Investments and other assets Investment securities (Notes 6 and 13) 17,342 18,135 150,907 Long-term loans receivable 226 246 2,046 Long-term prepaid expenses 210 162 1,344 Lease and guarantee deposits 1,690 1,337 11,125 Insurance funds 2,215 2,149 17,884 Deferred tax assets (Note 16) 1,379 1,237 10,293 Other assets 808 735 6,127 Allowance for doubtful accounts (363) (448) (3,727) Total investments and other assets 23,507 23,553 195,999 Total noncurrent assets 101,982 102,721 854,795
Total assets ¥208,005 ¥224,358 $1,867,006
The accompanying notes are an integral part of these statements.
TOPPAN FORMS REPORT 2015 33
CONSOLIDATED BALANCE SHEETSToppan Forms Co., Ltd. and Consolidated Subsidiaries
Millions of yen
Thousands of U.S. dollars
(Note 1)
March 31 2014 2015 2015
LiabilitiesCurrent liabilities Notes and accounts payable–trade ¥ 22,195 ¥ 24,203 $ 201,408 Electronically recorded obligations–operating 6,874 10,417 86,684 Short-term loans payable (Note 24) 317 182 1,517 Lease obligations (Note 24) 23 30 252 Accrued expenses 5,204 5,285 43,976 Income taxes payable 1,755 2,221 18,479 Accrued consumption taxes 609 3,273 27,233 Provision for bonuses 4,983 4,815 40,066 Provision for directors’ bonuses 66 57 478 Asset retirement obligations (Note 18) 79 – – Notes payable–facilities 1,144 297 2,475 Electronically recorded obligations–non-operating 1,177 636 5,294 Other current liabilities 4,252 4,249 35,356 Total current liabilities 48,678 55,665 463,218 Noncurrent liabilities Lease obligations (Note 24) 35 56 466 Deferred tax liabilities (Note 16) 131 1,026 8,539 Net defined benefit liability (Note 15) 3,080 2,329 19,380 Provision for directors’ retirement benefits 246 169 1,410 Asset retirement obligations (Note 18) 421 688 5,721 Others 106 509 4,237 Total noncurrent liabilities 4,019 4,777 39,753 Total liabilities 52,697 60,442 502,971
Net assetsShareholders’ equity Capital stock Authorized: 400,000,000 shares Issued: 115,000,000 shares 11,750 11,750 97,778 Capital surplus 9,270 9,270 77,141 Retained earnings 136,479 138,959 1,156,353 Treasury stock (Note 9) (2014: 4,003,441 shares, 2015: 4,003,515 shares) (4,917) (4,917) (40,914) Total shareholders’ equity 152,582 155,062 1,290,358 Accumulated other comprehensive income Valuation difference on available-for-sale securities 1,973 3,538 29,441 Foreign currency translation adjustment 472 1,188 9,884 Remeasurements of defined benefit plans (358) 1,978 16,459 Total accumulated other comprehensive income 2,087 6,704 55,784 Minority interests 639 2,150 17,893 Total net assets 155,308 163,916 1,364,035
Total liabilities and net assets ¥208,005 ¥224,358 $1,867,006
The accompanying notes are an integral part of these statements.
34 TOPPAN FORMS REPORT 2015
Millions of yen
Thousands of U.S. dollars
(Note 1)
Year ended March 31 2014 2015 2015
Net sales (Note 19) ¥261,411 ¥265,886 $2,212,584 Cost of sales 207,636 211,911 1,763,430 Gross profit 53,775 53,975 449,154 Selling, general and administrative expenses (Note 7) 41,505 41,368 344,249 Operating income 12,270 12,607 104,905
Non-operating income Interest income 149 177 1,469 Dividend income 354 335 2,790 Equity in earnings of affiliates 82 140 1,168 Foreign exchange gains 11 – – Subsidy income 324 190 1,578 House rent income 103 127 1,059 Others (Note 5) 345 276 2,301
1,368 1,245 10,365 Non-operating expenses Interest expenses 6 6 48 Foreign exchange losses – 15 125 Loss on insurance cancellation 53 78 646 Rent expenses 68 66 553 Provision of allowance for doubtful accounts 7 20 163 Others 194 235 1,957
328 420 3,492 Ordinary income 13,310 13,432 111,778
Extraordinary income Gain on change in equity 109 – – Gain on sales of investment securities 0 194 1,617 Gain on step acquisitions (Note 17) – 133 1,104 Others (Note 5) 33 103 854
142 430 3,575 Extraordinary loss Loss on retirement of noncurrent assets (Note 7) 515 95 793 Office transfer expenses (Note 7) 670 551 4,586 Loss on disposal of noncurrent assets (Note 7) 136 6 46 Others (Note 5) 84 29 243
1,405 681 5,668 Income before income taxes and minority interests 12,047 13,181 109,685
Income taxes (Note 16) - Current 4,386 4,660 38,778 - Deferred 347 650 5,414
4,733 5,310 44,192 Income before minority interests 7,314 7,870 65,493 Minority interests in income (loss) (8) 35 294
Net income ¥ 7,322 ¥ 7,835 $ 65,199
The accompanying notes are an integral part of these statements.
CONSOLIDATED STATEMENTS OF INCOMEToppan Forms Co., Ltd. and Consolidated Subsidiaries
TOPPAN FORMS REPORT 2015 35
Millions of yen
Thousands of U.S. dollars
(Note 1)Year ended March 31 2014 2015 2015
Income before minority interests ¥7,314 ¥ 7,870 $ 65,493 Other comprehensive income Valuation difference on available-for-sale securities 2 1,570 13,064 Foreign currency translation adjustment 894 746 6,208 Remeasurements of defined benefit plans, net of tax – 2,345 19,518 Share of other comprehensive income of entities accounted for
using equity method (47) (30) (249) Total other comprehensive income (Note 8) 849 4,631 38,541 Comprehensive income ¥8,163 ¥12,501 $104,034 Comprehensive income attributable to Owners of the parent 8,170 12,451 103,616 Minority interests (7) 50 419
The accompanying notes are an integral part of these statements.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOMEToppan Forms Co., Ltd. and Consolidated Subsidiaries
36 TOPPAN FORMS REPORT 2015
Millions of yen
Thousands of U.S. dollars
(Note 1)Year ended March 31 2014 2015 2015
Statements of changes in net assetsShareholders’ equity Capital stock Balance at beginning of current period ¥ 11,750 ¥ 11,750 $ 97,778 Cumulative effects of changes in accounting policies – – – Restated balance 11,750 11,750 97,778 Changes of items during the period Total changes of items during the period – – – Balance at end of current period 11,750 11,750 97,778 Capital surplus Legal capital surplus Balance at beginning of current period 9,270 9,270 77,141 Cumulative effects of changes in accounting policies – – – Restated balance 9,270 9,270 77,141 Changes of items during the period Total changes of items during the period – – – Balance at end of current period 9,270 9,270 77,141 Retained earnings Balance at beginning of current period 131,932 136,479 1,135,712 Cumulative effects of changes in accounting policies – (2,580) (21,467) Restated balance 131,932 133,899 1,114,245 Changes of items during the period Dividends from surplus (2,775) (2,775) (23,091) Net income 7,322 7,835 65,199 Total changes of items during the period 4,547 5,060 42,108 Balance at end of current period 136,479 138,959 1,156,353 Treasury stock Balance at beginning of current period (4,917) (4,917) (40,913) Cumulative effects of changes in accounting policies – – – Restated balance (4,917) (4,917) (40,913) Changes of items during the period Purchase of treasury stock – (0) (1) Total changes of items during the period – (0) (1) Balance at end of current period (4,917) (4,917) (40,914) Total shareholders’ equity Balance at beginning of current period 148,035 152,582 1,269,718 Cumulative effects of changes in accounting policies – (2,580) (21,467) Restated balance 148,035 150,002 1,248,251 Changes of items during the period Dividends from surplus (2,775) (2,775) (23,091) Net income 7,322 7,835 65,199 Purchase of treasury stock – (0) (1) Total changes of items during the period 4,547 5,060 42,107 Balance at end of current period 152,582 155,062 1,290,358 Accumulated other comprehensive income Valuation difference on available-for-sale securities Balance at beginning of current period 1,971 1,973 16,418 Cumulative effects of changes in accounting policies – – – Restated balance 1,971 1,973 16,418 Changes of items during the period Net changes of items other than shareholders’ equity 2 1,565 13,023 Total changes of items during the period 2 1,565 13,023 Balance at end of current period 1,973 3,538 29,441
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETSToppan Forms Co., Ltd. and Consolidated Subsidiaries
TOPPAN FORMS REPORT 2015 37
Millions of yen
Thousands of U.S. dollars
(Note 1)Year ended March 31 2014 2015 2015
Foreign currency translation adjustment Balance at beginning of current period ¥ (375) ¥ 472 $ 3,925 Cumulative effects of changes in accounting policies – – – Restated balance (375) 472 3,925 Changes of items during the period Net changes of items other than shareholders’ equity 847 716 5,959 Total changes of items during the period 847 716 5,959 Balance at end of current period 472 1,188 9,884 Remeasurements of defined benefit plans Balance at beginning of current period – (358) (2,975) Cumulative effects of changes in accounting policies – – – Restated balance – (358) (2,975) Changes of items during the period Net changes of items other than shareholders’ equity (358) 2,336 19,434 Total changes of items during the period (358) 2,336 19,434 Balance at end of current period (358) 1,978 16,459 Total accumulated other comprehensive income Balance at beginning of current period 1,596 2,087 17,368 Cumulative effects of changes in accounting policies – – – Restated balance 1,596 2,087 17,368 Changes of items during the period Net changes of items other than shareholders’ equity 491 4,617 38,416 Total changes of items during the period 491 4,617 38,416 Balance at end of current period 2,087 6,704 55,784 Subscription rights to shares Balance at beginning of current period 13 – – Cumulative effects of changes in accounting policies – – – Restated balance 13 – – Changes of items during the period Net changes of items other than shareholders’ equity (13) – – Total changes of items during the period (13) – – Balance at end of current period – – –Minority interests Balance at beginning of current period 620 639 5,317 Cumulative effects of changes in accounting policies – – – Restated balance 620 639 5,317 Changes of items during the period Net changes of items other than shareholders’ equity 19 1,511 12,576 Total changes of items during the period 19 1,511 12,576 Balance at end of current period 639 2,150 17,893 Total net assets Balance at beginning of current period 150,264 155,308 1,292,403 Cumulative effects of changes in accounting policies – (2,580) (21,467) Restated balance 150,264 152,728 1,270,936 Changes of items during the period Dividends from surplus (2,775) (2,775) (23,091) Net income 7,322 7,835 65,199 Purchase of treasury stock – (0) (1) Net changes of items during the period 497 6,128 50,992 Total changes of items during the period 5,044 11,188 93,099 Balance at end of current period ¥155,308 ¥163,916 $1,364,035
The accompanying notes are an integral part of these statements.
38 TOPPAN FORMS REPORT 2015
Millions of yen
Thousands of U.S. dollars
(Note 1)Year ended March 31 2014 2015 2015
Net cash provided by operating activities Income before income taxes and minority interests ¥ 12,047 ¥ 13,181 $109,685 Depreciation 8,375 8,633 71,840 Amortization of goodwill 101 102 849 Loss on retirement of noncurrent assets 515 95 793 Loss (gain) on sales of investment securities 0 (180) (1,499) Decrease in allowance for doubtful accounts (145) (9) (78) Decrease in provision for retirement benefits (2,796) – – Increase (decrease) in net defined benefit liability 2,510 (1,243) (10,348) Increase (decrease) in provision for directors’ bonuses 9 (9) (72) Increase (decrease) in provision for bonuses 287 (179) (1,491) Interest and dividends income (503) (512) (4,259) Interest expense 6 6 48 Equity in earnings of affiliates (82) (140) (1,168) Increase (decrease) in notes and accounts receivable–trade (4,311) 1,001 8,325 Decrease in inventories 104 484 4,024 Increase in notes and accounts payable–trade 2,348 5,099 42,434 Increase in accrued consumption taxes 206 2,662 22,156 Others, net (Note 5) (417) 1,122 9,333 Subtotal 18,254 30,113 250,572 Interest and dividend income received 494 506 4,213 Interest expenses paid (6) (6) (48) Income taxes paid (4,860) (4,193) (34,889) Net cash provided by operating activities 13,882 26,420 219,848 Net cash used in investing activities Payments into time deposits (53) (253) (2,105) Proceeds from withdrawal of time deposits 50 253 2,105 Purchase of property, plant and equipment (13,227) (6,404) (53,290) Proceeds from sales of property, plant and equipment 179 4 35 Purchase of investment securities (2,485) (5,147) (42,833) Proceeds from sales and redemption of investment securities 2,112 6,133 51,039 P urchase of investments in subsidiaries resulting in change in scope of
consolidation (Note 10) (1,476) (1,309) (10,889) Other payments (2,275) (2,284) (19,005) Other proceeds 1,248 1,217 10,127 Net cash used in investing activities (15,927) (7,790) (64,816)Net cash used in financing activities Net decrease in short-term loans payable (15) (169) (1,405) Repayments of finance lease obligations (30) (35) (288) Cash dividends paid (2,775) (2,775) (23,092) Proceeds from share issuance to minority shareholders 160 61 510 Cash dividends paid to minority shareholders (15) (15) (126) Others, net – (0) (1) Net cash used in financing activities (2,675) (2,933) (24,402)Effect of exchange rate change on cash and cash equivalents 196 119 986 Net decrease (increase) in cash and cash equivalents (4,524) 15,816 131,616 Cash and cash equivalents at beginning of period 42,205 37,681 313,566
Cash and cash equivalents at end of period (Note 10) ¥ 37,681 ¥ 53,497 $445,182
The accompanying notes are an integral part of these statements.
CONSOLIDATED STATEMENTS OF CASH FLOWSToppan Forms Co., Ltd. and Consolidated Subsidiaries
TOPPAN FORMS REPORT 2015 39
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSToppan Forms Co., Ltd. and Consolidated Subsidiaries
1. Basis of Presenting Consolidated Financial Statements
The accompanying consolidated financial statements have been translated from the consolidated financial statements of TOPPAN FORMS CO., LTD. (the “Company”) and its subsidiaries filed with the Director of the Kanto Local Finance Bureau in accordance with the Financial Instruments and Exchange Law of Japan and its related accounting regulations, and in conformity with accounting principles and practices generally accepted in Japan, which are different in certain respects from the application and disclosure requirements of International Financial Reporting Standards. The consolidated financial statements are stated in Japanese yen, the
currency of the country in which the Company is incorporated and principally operates. The translation of Japanese yen amounts into U.S. dollar amounts is included solely for the convenience of readers outside Japan and has been calculated at the rate of ¥120.17 to US$1, the approximate rate of exchange on March 31, 2015. Such translations should not be construed as representations that the Japanese yen amounts could have been or could be converted into U.S. dollars at that or any other rate. In addition, certain reclassifications of previously reported amounts have been made to conform to the current year presentation.
2. Summary of Significant Accounting Policies
(1) Consolidation (a) Consolidated subsidiariesThe consolidated financial statements include the accounts of the Company and all of its subsidiaries (23 companies for the fiscal year ended March 31, 2015, and 22 companies for the fiscal year ended March 31, 2014). Significant subsidiaries are as follows: • Toppan Forms Central Products Co., Ltd. • Toppan Forms Tokai Co., Ltd. • Toppan Forms Logistics and Services Co., Ltd. • Toppan Forms Kansai Co., Ltd. • Toppan Forms Nishinihon Co., Ltd. • Toppan Forms (Sanyo) Co., Ltd. • TOSCO CORPORATION • Toppan Forms (Hong Kong) Ltd. • Toppan Forms (S) Pte. Ltd. • Toppan Forms Operation Co., Ltd. • Techno Toppan Forms Co., Ltd. • TF Payment Service Co., Ltd. • J-SCube Inc. Data Products Toppan Forms Ltd., which was an equity-method associate in the previous consolidated fiscal year, is now included in the scope of consoli-dation in the consolidated fiscal year under review due to the Group’s ad-ditional acquisition of the company’s shares.(b) Equity-method associatesInvestments in all associates (3 associates for the fiscal year ended March 31, 2015, and 4 associates for the fiscal year ended March 31, 2014), where share-holdings are more than 20% and where the Company has significant influence over operations, finance and management, are accounted for using the equity method. The associate with the most significant impact on the results of the Company is ZHEJIANG MATSUOKA PRINTING CO., LTD. As Data Products Toppan Forms Ltd. has become a consolidated subsidiary in the consolidated fiscal year under review, it has been removed from the scope of equity-method affiliates.(c) Period-end datesThe period-end date of T.F. Company Ltd. and 9 of its subsidiaries is December 31. The consolidated financial statements incorporate the accounts of these companies with adjustments for significant transactions with the Company and consolidated subsidiaries arising during the period from January 1 to March 31.
(2) Valuation methods for major assets(a) SecuritiesSecurities held by the Company and its consolidated subsidiaries are classified into two categories: Held-to-maturity debt securities are stated at cost after accounting for any premium or discount on acquisition, which is amortized over the period to maturity. Other securities for which market price or quotations are available are stated at fair value. Net unrealized gains and losses on these securities are reported as a separate component of net assets at a net-of-tax amount. Other securities for which market quotations are unavailable are stated at cost. In addition, subscriptions to investment funds (not affiliates) that are included in other investment securities are accounted for by the equity method based on the most recently available financial information.
(b) DerivativesAll derivatives are stated at fair value, with changes in fair value being included in net income for the period in which they arise, except for derivatives that are designated as “hedging instruments”.(c) InventoriesMerchandise (supplies), raw materials and supplies are stated at the lower of cost or net realizable value determined by using the first-in, first-out method. Merchandise (machinery), finished goods and work-in-process are stated at the lower of cost or net realizable value determined by using the specific identification method.
(3) Depreciation and amortization of major assets(a) Property, plant and equipment (excluding lease assets)The declining-balance method is principally adopted. The same standard as is stipulated in the Corporate Tax Law is applied to the useful economic lives and the residual values for accounting purposes. However, depreciation of build-ings acquired by the Company and its domestic consolidated subsidiaries after April 1, 1998 is computed using the straight-line method in accordance with the Corporate Tax Law of Japan. (b) Intangible assets (excluding lease assets)Straight-line method is adopted. Software for in-house use is amortized based on the straight-line method over the expected useful economic life of 5 years.(c) Lease assetsStraight-line method is adopted over the lease term without residual value. (d) Long-term prepaid expensesStraight-line method is adopted. The main amortization period is 5 years.
(4) Basis of provision(a) Allowance for doubtful accountsAllowance for doubtful accounts of the Company and its domestic consoli-dated subsidiaries is computed based on the past bad debt experience ratio for normal receivables, plus the estimated irrecoverable amount of doubtful receivables on an individual account basis.(b) Provision for bonusesProvision for bonuses to employees is provided for in the amount of the expected bonus payments to be made at the end of the fiscal year.(c) Provision for bonuses to directors and corporate auditorsProvision for bonuses to directors and corporate auditors are provided for in the estimated amounts to be paid in respect of the fiscal year. (d) Provision for directors’ retirement benefitsThe Company and its domestic consolidated subsidiaries record accrued severance indemnities costs for directors and corporate auditors based on internal regulations. The Company had abolished the severance indemnities for directors and corporate auditors upon the closure of its annual sharehold-ers meeting held on June 29, 2006. According to the abolishment, the accrued severance indemnities for directors and corporate auditors, which were calculated and fixed based on the Company’s internal rules and the period from their admission up to June 29, 2006, are included in “Provision for direc-tors’ retirement benefits” on the consolidated balance sheets.
(5) Accounting method for retirement benefits(a) Allocation of expected benefit paymentsWhen calculating retirement benefit obligation, the benefit formula method is used to allocate expected benefit payments to the period until the fiscal year-end.
40 TOPPAN FORMS REPORT 2015
(b) Actuarial differences and prior service costsThe unrecognized prior service costs are being amortized on a straight-line basis over 15 years (the average remaining service period of employees when the unrecognized prior service costs are incurred). The unrecognized actuarial differences are being amortized on a straight-line basis primarily over 15 years (the average remaining service period of employees when the differences are incurred) from the period following that in which they occurred.
(6) Recognition for construction contractsThe percentage-of-completion method is adopted if the outcome of the construction activity is deemed certain during the course of the activity, otherwise the completed-contract method is adopted. The percentage of completion at the end of the fiscal year is estimated based on the percentage of the costs incurred to the estimated total cost.
(7) Foreign currency translationThe translation of assets and liabilities denominated in foreign currency at the end of the fiscal year is made at the period end exchange rate. Exchange gains and losses resulting from foreign currency transactions and translation of assets and liabilities denominated in foreign currencies are included in the consolidated statements of income. All assets, liabilities, income and expense accounts of foreign subsidiaries and affiliates are translated using the current exchange rates at the respective balance sheet dates. Foreign currency translation adjustments resulting from such procedures are recorded in the consolidated balance sheets as a separate component of net assets.
(8) Hedge accountingGains and losses arising from changes in the fair value of derivatives desig-nated as “hedging instruments” are deferred as an asset or liability, and
included in net income in the same period during which the gains and losses on the hedged items or transactions are recognized. Derivatives designated as hedging instruments by the Company are principally forward exchange contracts and interest rate swap contracts. The related hedged items are trade accounts receivable and payable, and long-term debts. The Company has a policy of utilizing the above hedging instruments in order to reduce the Company’s exposure to the risk of foreign currency exchange rate fluctuations and interest rate fluctuations. Thus, the Company’s purchase of hedging instruments is limited to, at maximum, the amounts of the hedged items. The Company evaluates the effectiveness of its hedging activities by reference to the accumulated gains or losses on the hedging instruments and the related items from the commencement of the hedges.
(9) Amortization of goodwillGoodwill is amortized evenly over the estimated period during which the Company will receive benefit.
(10) Cash and cash equivalentsCash and cash equivalents include all highly liquid investments, generally with original maturities of three months or less, those that are readily convertible to known amounts of cash and, thus, present an insignificant risk of changes in value.
(11) Consumption taxThe consumption tax withheld upon sale and consumption tax paid by the Companies on their purchases of goods and services is not included in revenue and cost or expense items, in the accompanying consolidated statements of income.
3. Accounting Changes
Standards prescribed by Article 35 of “Accounting Standard for Retirement Benefits (ASBJ Statement No. 26, issued May 17, 2012) and Article 67 of “Guidance on Accounting Standard for Retirement Benefits” (ASBJ Guidance No. 25, issued on May 17, 2012, amended on March 26, 2015) were adopted from the consolidated fiscal year under review. Accordingly, the Company revised its methods for calculating retirement benefit obligations and service costs and changed the process for calculating projected retirement benefits from a straight-line method to a benefit formula method. At the same time, the Company changed from using a discount rate that is determined based on the approximate average remaining service period for employees to using a simple weighted-average discount rate that reflects projected payment periods and amounts by projected payment period.
In accordance with the provision for transitional treatment stated in Paragraph 37 of the “Accounting Standard for Retirement Benefits,” retained earnings have been adjusted to reflect the impact of revisions to methods for calculating retirement benefit obligations and service costs that were made at the beginning of the consolidated fiscal year under review. As a result, retirement benefit obligations at the beginning of the consoli-dated fiscal year under review increased ¥3,984 million (US$33,156 thousand), while retained earnings decreased ¥2,580 million (US$21,467 thousand). The impact on operating income, ordinary income, and net income before income taxes was minimal. The impact of this increase and decrease on net income per share is disclosed in relevant section of this report.
4. Accounting Standards Issued But Not Yet Applied
· “Accounting Standard for Business Combinations” (ASBJ Statement No. 21, issued September 13, 2013)
· “Accounting Standard for Consolidated Financial Statements” (ASBJ Statement No. 22, issued September 13, 2013)
· “Accounting Standard for Business Divestitures” (ASBJ Statement No. 7, issued September 13, 2013)
· “Accounting Standard for Net Income Per Share” (ASBJ Statement No. 2, issued September 13, 2013)
· “Guidance on Accounting Standard for Business Combinations and Accounting Standard for Business Divestitures” (ASBJ Guidance No. 10, issued September 13, 2013)
· “Guidance on Accounting Standard for Net Income Per Share” (ASBJ Guidance No. 4, issued September 13, 2013)
(1) OverviewThese standards primarily prescribe revisions to 1) treatment of changes in a
parent’s ownership interest in a subsidiary in the case that the parent retains control through additional acquisition of the subsidiary’s shares, 2) treatment of costs related to acquisitions, 3) presentation of net income and treatment of changing minority interests to noncontrolling interests, and 4) treatment of provisional accounting.
(2) Date of adoptionThese standards will be adopted from the start of the fiscal year ending March 31, 2016. However, the revision in treatment of provisional accounting will be applied to business combinations that are implemented after the start of the fiscal year ending March 31, 2016.
(3) Impact of the adoption of the accounting standardThe impact on the Company’s consolidated statement of income for the fiscal year ending March 31, 2016, is currently being evaluated.
5. Change in Presentation Methods
(1) Consolidated Statements of IncomeIn the previous consolidated fiscal year, “Insurance return” was disclosed separately under “Non-operating income.” Due to the fact that in the consoli-dated fiscal year under review “Insurance return” is no longer monetarily significant, it is now included in the amount for “Others” in the consolidated statements of income. In order to reflect this change in presentation, we have
revised the consolidated financial statements for the previous consolidated fiscal year. As a result, the ¥25 million for “Insurance return” under “Non-operating income” was reorganized into the ¥320 million for “Others.” Accordingly the amount listed for “Others” is now ¥345 million.
TOPPAN FORMS REPORT 2015 41
In the previous consolidated fiscal year, “Gain on reversal of subscription rights to shares” was disclosed separately under “Extraordinary income.” Due to the fact that in the consolidated fiscal year under review “Gain on reversal of subscription rights to shares” is no longer monetarily significant, it is now included in the amount for “Others” in the consolidated statements of income. In order to reflect this change in presentation, we have revised the consoli-dated financial statements for the previous consolidated fiscal year. As a result, the ¥13 million for “Gain on reversal of subscription rights to shares” under “Extraordinary income” was reorganized into the ¥20 million for “Others.” Accordingly, the amount listed for “Others” is now ¥33 million. In the previous consolidated fiscal year, “Loss on sales of noncurrent assets” was disclosed separately under “Extraordinary loss.” Due to the fact that in the consolidated fiscal year under review “Loss on sales of noncurrent assets” is no longer monetarily significant, it is now included in the amount for “Others” in the consolidated statements of income. In order to reflect this change in presentation, we have revised the consolidated financial statements for the previous consolidated fiscal year. As a result, the ¥33 million for “Loss on sales of noncurrent assets” under “Extraordinary loss” was reorganized into the ¥51 million for “Others.” Accordingly, the amount listed for “Others” is now ¥84 million. In the previous consolidated fiscal year, “Loss on valuation of investment securities” was disclosed separately under “Extraordinary loss.” Due to the fact that in the consolidated fiscal year under review “Loss on valuation of invest-ment securities” is no longer monetarily significant, it is now included in the amount for “Others” in the consolidated statements of income. In order to reflect this change in presentation, we have revised the consolidated financial statements for the previous consolidated fiscal year. As a result, the ¥0 million for “Loss on valuation of investment securities” under “Extraordinary loss” was reorganized into the ¥51 million for “Others.” Accordingly, the amount listed for “Others” is now ¥84 million.
(2) Consolidated Statements of Cash FlowsIn the previous consolidated fiscal year, “Loss on sales of noncurrent assets” was disclosed separately under “Net cash provided by operating activities.” Due to the fact that in the consolidated fiscal year under review “Loss on sales of noncurrent assets” is no longer monetarily significant, it is now included in the amount for “Others” in the consolidated statement of cash flows. In order to reflect this change in presentation, we have revised the consolidated financial statements for the previous consolidated fiscal year. As a result, the ¥29 million for “Loss on sales of noncurrent assets” under “Net cash provided by operating activities” was reorganized into the amount for “Others, net.” The amount listed for “Others, net” was ¥(422) million, and is now ¥(417) million. In the previous consolidated fiscal year, “Loss on valuation of investment securities” was disclosed separately under “Net cash provided by operating activities.” Due to the fact that in the consolidated fiscal year under review “Loss on valuation of investment securities” is no longer monetarily significant, it is now included in the amount for “Others” in the consolidated statement of cash flows. In order to reflect this change in presentation, we have revised the consolidated financial statements for the previous consolidated fiscal year. As a result, the ¥0 million for “Loss on valuation of investment securities” under “Net cash provided by operating activities” was reorganized into the amount for “Others, net.” The amount listed for “Others, net” was ¥(422) million, and is now ¥(417) million. In the previous consolidated fiscal year, “Gain on maturity of insurance contract” was disclosed separately under “Net cash provided by operating activi-ties.” Due to the fact that in the consolidated fiscal year under review “Gain on maturity of insurance contract” is no longer monetarily significant, it is now included in the amount for “Others” in the consolidated statement of cash flows. In order to reflect this change in presentation, we have revised the consolidated financial statements for the previous consolidated fiscal year. As a result, the ¥(24) million for “Gain on maturity of insurance contract” under “Net cash provided by operating activities” was reorganized into the amount for “Others, net.” The amount listed for “Others, net” was ¥(422) million, and is now ¥(417) million.
6. Notes to Consolidated Balance Sheets
Investments in affiliates
Millions of yenThousands of
U.S. dollars
2014 2015 2015
Investment securities (shares) ¥1,682 ¥655 $5,451
7. Notes to Consolidated Statements of Income
(1) Selling, general and administrative expensesThe major components of “Selling, general and administrative expenses” are as follows:
Millions of yenThousands of
U.S. dollars
Year ended March 31 2014 2015 2015
Delivery costs ¥ 6,894 ¥ 7,089 $ 58,992Salaries and bonuses 14,499 14,578 121,314Pension costs 697 613 5,104Provisions for bonuses to employees 2,071 1,851 15,407Provisions for bonuses to directors and corporate auditors 66 57 478Provisions for retirement benefit of directors and corporate auditors 29 18 154Depreciation 2,077 2,550 21,218Rent expenses 1,534 1,675 13,939Research and development expenditure 1,928 1,781 14,822
(2) Research and development expenditureResearch and development expenditure, which is charged to the statement of income when incurred, and is included in selling, general and administrative ex-penses, amounted to ¥1,928 million and ¥1,781 million (US$14,822 thousand) for the fiscal years ended March 31, 2014 and 2015, respectively.
42 TOPPAN FORMS REPORT 2015
(3) The breakdown of loss on retirement of noncurrent assets
Millions of yenThousands of
U.S. dollars
Year ended March 31 2014 2015 2015
Buildings and structures ¥430 ¥16 $132Machinery, equipment and vehicles 57 64 533Tools, furniture and fixtures 5 11 95Software 2 1 6Others 21 3 27
¥515 ¥95 $793
(4) Loss on disposal of noncurrent assetsLoss on disposal of noncurrent assets are mainly Osaka old factory demolition work expenses of ¥130 million for the fiscal year ended March 31, 2014.
(5) Office transfer expensesOffice transfer expenses are the Company, group datacenter of the consolidated subsidiary and factory restructuring for the fiscal years ended March 31, 2014 and 2015, respectively.
8. Notes to Statements of Comprehensive Income
“Other comprehensive income” comprises the following:
Millions of yenThousands of
U.S. dollars
Year ended March 31 2014 2015 2015
Valuation difference on available-for-sale securities Gains arising during the year ¥ 4 ¥ 2,308 $19,209 Reclassification adjustments to profit or loss 0 (173) (1,440) Amount before income tax effect 4 2,135 17,769 Income tax effect (2) (565) (4,705) Valuation difference on available-for-sale securities 2 1,570 13,064Foreign currency translation adjustment Gains arising during the year 894 746 6,208Remeasurements of defined benefit plans, net of tax Gains arising during the year – 3,142 26,148 Reclassification adjustments to profit or loss – 350 2,914 Amount before income tax effect – 3,492 29,062 Income tax effect – (1,147) (9,544) Remeasurements of defined benefit plans, net of tax – 2,345 19,518Share of other comprehensive income of associates accounted for using equity method Gains arising during the year (71) 2 20 Reclassification adjustments to profit or loss 24 (32) (269) Share of other comprehensive income of associates accounted for using equity method (47) (30) (249)Total other comprehensive income ¥849 ¥ 4,631 $38,541
9. Notes to Consolidated Statements of Changes in Net Assets
The following are notes to the consolidated statement of changes in net assets as of March 31, 2014.(1) Shares issued
Share typePrevious fiscal year-end
(Thousand shares)Increase
(Thousand shares)Decrease
(Thousand shares)Fiscal year-end
(Thousand shares)
Common stock 115,000 – – 115,000
(2) Treasury stock
Share typePrevious fiscal year-end
(Thousand shares)Increase
(Thousand shares)Decrease
(Thousand shares)Fiscal year-end
(Thousand shares)
Common stock 4,003 – – 4,003
TOPPAN FORMS REPORT 2015 43
(3) Matters related to dividends(a) Amount of dividends paid
Resolution Type of stockTotal amount of dividends
(Millions of yen)Dividend per
share (Yen) Date of record Effective date
Annual shareholders meeting held on June 27, 2013
Commonstock
1,387 12.5March 31,
2013June 28,
2013Board of directors meeting held on October 25, 2013
Commonstock
1,387 12.5September 30,
2013December 9,
2013
(b) Schedule of dividendsThe following shows those dividends with date of record in the fiscal year ended March 31, 2014, for which the effective date is in the following consolidated fiscal year.
Resolution Type of stockTotal amount of dividends
(Millions of yen)Fiscal resource
of dividendsDividend per
share (Yen) Date of record Effective date
Annual shareholders meeting held on June 27, 2014
Commonstock
1,387Retainedearnings
12.5March 31,
2014June 30,
2014
The following are notes to the consolidated statement of changes in net assets as of March 31, 2015.(1) Shares issued
Share typePrevious fiscal year-end
(Thousand shares)Increase
(Thousand shares)Decrease
(Thousand shares)Fiscal year-end
(Thousand shares)
Common stock 115,000 – – 115,000
(2) Treasury stock
Share typePrevious fiscal year-end
(Thousand shares)Increase
(Thousand shares)Decrease
(Thousand shares)Fiscal year-end
(Thousand shares)
Common stock 4,003 0 – 4,004
(3) Matters related to dividends (a) Amount of dividends paid
Resolution Type of stockTotal amount of dividends
(Millions of yen)Dividend per
share (Yen) Date of record Effective date
Annual shareholders meeting held on June 27, 2014
Commonstock
1,387 12.5March 31,
2014June 30,
2014Board of directors meeting held on October 31, 2014
Commonstock
1,387 12.5September 30,
2014December 8,
2014
Resolution Type of stockTotal amount of dividends (Thousands of U.S. dollars)
Dividend per share (U.S. dollars) Date of record Effective date
Annual shareholders meeting held on June 27, 2014
Commonstock
11,546 0.10March 31,
2014June 30,
2014Board of directors meeting held on October 31, 2014
Commonstock
11,546 0.10September 30,
2014December 8,
2014
(b) Schedule of dividendsThe following shows those dividends with date of record in the fiscal year ended March 31, 2015, for which the effective date is in the following consolidated fiscal year.
Resolution Type of stockTotal amount of dividends
(Millions of yen)Fiscal resource
of dividendsDividend per
share (Yen) Date of record Effective date
Annual shareholders meeting held on June 26, 2015
Commonstock
1,387Retainedearnings
12.5March 31,
2015June 29,
2015
Resolution Type of stockTotal amount of dividends (Thousands of U.S. dollars)
Fiscal resource of dividends
Dividend per share (U.S. dollars) Date of record Effective date
Annual shareholders meeting held on June 26, 2015
Commonstock
11,546Retainedearnings
0.10March 31,
2015June 29,
2015
44 TOPPAN FORMS REPORT 2015
10. Notes to Consolidated Statements of Cash Flows
(1) Cash and cash equivalents
Millions of yenThousands of
U.S. dollars
March 31 2014 2015 2015
Cash and time deposits with original maturity of three months or less ¥37,734 ¥53,680 $446,701Less: Time deposits with original maturities of more than three months (53) (183) (1,519)
¥37,681 ¥53,497 $445,182
(2) Breakdown of assets received and liabilities assumed from companies converted to consolidated subsidiaries following the acquisition of stockFor the year ended March 31, 2014, the breakdown of assets received and liabilities assumed from J-SCube Inc. at the time of consolidation following the acquisi-tion of stock, acquisition cost, and net cash outflow to acquire the shares of newly consolidated subsidiary are as follows.
Millions of yen
Current assets ¥ 5,501Noncurrent assets 1,442Goodwill 506Current liabilities (2,929)Noncurrent liabilities (620)Acquisition cost 3,900Cash and cash equivalents (2,424)Net cash outflow to acquire the shares of newly consolidated subsidiary ¥ 1,476
For the year ended March 31, 2015, the breakdown of assets received and liabilities assumed from Data Products Toppan Forms Ltd. at the time of consolidation following the acquisition of stock, acquisition cost, and net cash outflow to acquire the shares of newly consolidated subsidiary are as follows.
Millions of yenThousands of
U.S. dollars
Current assets ¥ 1,423 $ 11,844Noncurrent assets 1,883 15,666Goodwill 822 6,844Current liabilities (391) (3,255)Noncurrent liabilities (208) (1,728)Minority interests (1,407) (11,714)Acquisition cost 2,122 17,657Equity method appraisal value up to the acquisition of control (124) (1,033)Gain on step acquisitions (133) (1,104)Cash and cash equivalents (556) (4,631)Net cash outflow to acquire the shares of newly consolidated subsidiary ¥ 1,309 $ 10,889
11. Leases Transactions
(1) Finance lease transaction (lessee)Finance leases other than those which transfer ownership of property, plant and equipment to lessees are utilized. Lease assets consist mainly of production assets (machinery, equipment and vehicles) used in the printing business. Accumulated depreciation is computed by the straight-line method based on the period of those finance leases with no residual value.
(2) Operating lease transaction (lessee)Minimum lease payments under non-cancellable operating leases for the fiscal years ended March 31, 2014 and 2015 are as follows:
Millions of yenThousands of
U.S. dollars
March 31 2014 2015 2015
Due within 1 year ¥ 316 ¥ 442 $ 3,681Due after 1 year 1,331 1,397 11,628Total minimum lease payments ¥1,647 ¥1,839 $15,309
TOPPAN FORMS REPORT 2015 45
12. Financial Instruments
(1) Matters related to the status of financial instruments(a) Policies on the use of financial instrumentsThe Company invests temporary surpluses in highly secure financial assets and does not engage in speculative investment. The Company employs derivative transactions only to hedge against the market risks described below, and does not conduct such trades for speculative purposes.(b) Content of financial instruments and assessed risksCash and deposits involve the risk that the depository institution will default and become unable to repay the deposits. Short-term investment securities are subject to the risk of default by an issuing institution or financial brokerage firm, as well as the risk of a substantial decline in fair value as a result of changes in the market environment which may result in the loss or impair-ment of principal investments. Claimable assets such as accounts receivable, notes receivable, loans receivable, and other collectibles, as well as such financial assets including lease and guarantee deposits, involve the risk of counterparties becoming unable to discharge their settlement duties due misworsening management or insolvency. Borrowings made from financial institutions by consolidated subsidiaries for which the Company has guaran-teed obligations involve the risk that a breach of contract with the guaranteed party by the Company’s consolidated companies could harm the Company’s reputation and force it to assume responsibility for the borrowings. Derivative contracts involve the risk of non-performance due to default and other factors. Derivative contracts also involve the risk of substantial declines in market value owing to changes in the market environment resulting from foreign exchange rate and interest rate fluctuations, as well as the risk of substantial increases in obligations. Financial obligations on notes and accounts payable involve the risk of double payment owing to the transfer of obligations to a business partner, as well as the risk of being unable to avoid the effects of activities by antisocial elements. Loans payable involve the risk of a downturn in operating performance which could result in the attachment of collateral and the risk of being unable to sustain the existing conditions of financial agreements. Also, future interest rate increases could cause the Company’s obligations on loans payable and bonds payable to increase. Loans payable and other financial obligations also involve the risk that, as the result of a downturn in operating performance, the Company’s liquidity could fall to a level that renders it unable to fulfill its payment obligations. A portion of the Company’s financial assets, such as cash and deposits, and certain financial obligations are denominated in foreign currencies as a result of the Group’s efforts to expand its operations overseas. Consequently, exchange rate fluctuations could cause its asset values to decline or the cost of its obligations to increase. Cash, foreign currency col-lateral securities and notes receivable, equity securities and assets underlying marketable securities involve the risk that the Company may be unable to file recovery claims as a result of theft, loss or fire.(c) Risk management system related to financial instruments(i) Management of credit risk (the risk that a customer will default on its
transactional obligations) The Company manages its various claimable assets, such as accounts
receivable and notes receivable, according to separately formulated receiv-ables management regulations, with the aim of securing its receivables and boosting its capital efficiency. Specific details regarding management are provided in the Company’s customer information management regulations.
In accordance with the provision for “credit management” in Article 2 of the Company’s customer information management regulations, on a monthly basis the Company determines the total fair value of its loans receivable, other receivables and other guaranteed obligations, confirming the credit status of customer and collection delays to confirm recoverability.
To lower its counterparty risk, the Company conducts derivative transactions only with highly rated financial institutions.
(ii) Management of market risk (the risk of foreign currency exchange and interest rate fluctuations)
The Company invests funds in accordance with separately formulated financial management regulations and financial management regulation implementation schedule to minimize risks related to capital, interest, liquidity and fund settlement.
On a quarterly basis, the Company determines the fair value of its holdings of marketable securities and the financial status of their issuers (corporate business partners) and reviews the status of its holdings on a regular basis.
The Company engages in derivative transactions only for the purpose of hedging risk, and does not conduct such transactions for specu-lative purposes.
(iii) Management of liquidity risk related to fund procurement (the risk of being unable to make payments on their due dates)
In accordance with its financial management regulations and financial management regulation implementation schedule, the Company formulates asset budget plans in line with its medium-term plans, reports on investments and performance at monthly investment meetings, and manages ongoing cash flow.
The Company conducts medium to long-term cash planning and raises funds as necessary by issuing corporate bonds or through bank loans to ensure the availability of appropriate levels of cash and raise capital efficiency.
The Company has formulated financial management regulations, supplementary schedules and affiliated company management regulations with regard to the raising of funds through the issuance of corporate bonds and borrowings, and procedures for selecting financial institutions and must follow these regulations.
By employing management methods that comply with its financial management regulations and supplementary schedules, the Company is able to determine accurately the total book values of cash and deposits, receivables and payables, and conducts cash planning accordingly to insulate itself from liquidity risk.
(d) Supplementary explanation regarding the fair value of financial instrumentsWith regard to the fair value of financial instruments, in addition to basing fair value on market value, the fair value of financial instruments that have no available market value is determined by using a rational method of calculation. However, as variables are inherent in these value calculations, the resulting values may differ if different assumptions are used.
46 TOPPAN FORMS REPORT 2015
(2) Matters related to the fair value of financial instrumentsThe following information relates to the aggregated book carrying amounts and fair values as of March 31, 2014 and 2015. Financial instruments that have no readily available fair values are not included in the information below.
Millions of yen
March 31, 2014Book carrying
amount Fair valueUnrealized gains
(losses)
Assets: (i) Cash and deposits ¥ 37,734 ¥ 37,734 ¥ – (ii) Notes and accounts receivable–trade 49,626 Allowance for doubtful accounts* (200)
49,426 49,426 – (iii) Short-term investment securities and investment securities 17,030 16,898 (132) Total ¥104,190 ¥104,058 ¥(132)Liabilities: (i) Notes and accounts payable–trade ¥ 22,195 ¥ 22,195 ¥ – (ii) Electronically recorded obligations–operating 6,874 6,874 – Total ¥ 29,069 ¥ 29,069 ¥ –
* Allowances for doubtful accounts on notes and accounts receivable–trade have been omitted.
Millions of yen
March 31, 2015Book carrying
amount Fair valueUnrealized gains
(losses)
Assets: (i) Cash and deposits ¥ 53,680 ¥ 53,680 ¥ – (ii) Notes and accounts receivable–trade 49,522 Allowance for doubtful accounts* (117)
49,405 49,405 – (iii) Short-term investment securities and investment securities 18,283 18,335 (52) Total ¥121,368 ¥121,420 ¥(52)Liabilities: (i) Notes and accounts payable–trade ¥ 24,203 ¥ 24,203 ¥ – (ii) Electronically recorded obligations–operating 10,417 10,417 – Total ¥ 34,620 ¥ 34,620 ¥ –
Thousands of U.S. dollars
March 31, 2015Book carrying
amount Fair valueUnrealized gains
(losses)
Assets: (i) Cash and deposits $ 446,701 $ 446,701 $ – (ii) Notes and accounts receivable–trade 412,101 Allowance for doubtful accounts* (972)
411,129 411,129 – (iii) Short-term investment securities and investment securities 152,144 152,575 (431) Total $1,009,974 $1,010,405 $(431)Liabilities: (i) Notes and accounts payable–trade $ 201,408 $ 201,408 $ – (ii) Electronically recorded obligations–operating 86,684 86,684 – Total $ 288,092 $ 288,092 $ –
* Allowances for doubtful accounts on notes and accounts receivable–trade have been omitted.
TOPPAN FORMS REPORT 2015 47
(a) Matters related to calculating the fair value of financial instruments and marketable securities
Assets(i) Cash and deposits and (ii) notes and accounts receivable–trade As these instruments are settled within a short term and their fair values
and book values are assumed similar, book values are used as fair values. (iii) Short-term investment securities and investment securities The fair values of equity securities are determined by their prices on stock
exchanges. The fair value of bonds is determined according to prices indicated on bond exchanges or the values indicated by the financial institutions handling these transactions.
Liabilities(i) Notes and accounts payable–trade, (ii) Electronically recorded obligations–operating As these instruments are settled within a short term and their fair values
and book values are assumed similar, book values are used as fair values.
(b) Financial instruments for which fair value is not readily determinableBook carrying amount
Millions of yenThousands of
U.S. dollars
March 31 2014 2015 2015
Non-listed equity securities ¥1,967 ¥952 $7,925
These instruments are not included in (iii) short-term investment securities and investment securities, as no market value is available, and their fair value is not readily determinable.
(c) Redemption schedule for monetary assets and the expected maturity values of marketable securities
Millions of yen
March 31, 2014 Within 1 yearOver 1 year but
within 5 yearsOver 5 years but
within 10 years Over 10 years
Cash and deposits ¥37,734 ¥ – ¥ – ¥ –Notes and accounts receivable–trade 49,626 – – –Short-term investment securities and investment securities -Held-to-maturity debt securities (Corporate bonds) 1,608 1,750 2,000 1,100 -Other securities that have maturity dates (Others) 43 269 300 –Total ¥89,011 ¥2,019 ¥2,300 ¥1,100
Millions of yen
March 31, 2015 Within 1 yearOver 1 year but
within 5 yearsOver 5 years but
within 10 years Over 10 years
Cash and deposits ¥ 53,680 ¥ – ¥ – ¥–Notes and accounts receivable–trade 49,522 – – –Short-term investment securities and investment securities -Held-to-maturity debt securities (Corporate bonds) 1,100 1,680 2,208 – -Other securities that have maturity dates (Others) – 280 619 –Total ¥104,302 ¥1,960 ¥2,827 ¥–
Thousands of U.S. dollars
March 31, 2015 Within 1 yearOver 1 year but
within 5 yearsOver 5 years but
within 10 years Over 10 years
Cash and deposits $446,701 $ – $ – $–Notes and accounts receivable–trade 412,101 – – –Short-term investment securities and investment securities -Held-to-maturity debt securities (Corporate bonds) 9,154 13,980 18,370 – -Other securities that have maturity dates (Others) – 2,331 5,150 –Total $867,956 $16,311 $23,520 $–
48 TOPPAN FORMS REPORT 2015
(d) Redemption schedule for short-term loans payable, long-term loans payable and lease obligations
Millions of yen
March 31, 2014 Within 1 yearOver 1 year but
within 2 yearsOver 2 years but
within 3 yearsOver 3 years but
within 4 yearsOver 4 years but
within 5 years Over 5 years
Short-term loans payable ¥317 ¥ – ¥ – ¥– ¥– ¥–Lease obligations 23 17 10 6 2 –Total ¥340 ¥17 ¥10 ¥6 ¥2 ¥–
Millions of yen
March 31, 2015 Within 1 yearOver 1 year but
within 2 yearsOver 2 years but
within 3 yearsOver 3 years but
within 4 yearsOver 4 years but
within 5 years Over 5 years
Short-term loans payable ¥182 ¥ – ¥ – ¥ – ¥– ¥–Lease obligations 30 23 17 14 2 –Total ¥212 ¥23 ¥17 ¥14 ¥2 ¥–
Thousands of U.S. dollars
March 31, 2015 Within 1 yearOver 1 year but
within 2 yearsOver 2 years but
within 3 yearsOver 3 years but
within 4 yearsOver 4 years but
within 5 years Over 5 years
Short-term loans payable $1,517 $ – $ – $ – $ – $–Lease obligations 252 188 146 116 16 –Total $1,769 $188 $146 $116 $16 $–
13. Marketable and Investment Securities
The following information relates to the aggregate book carrying amount and fair value of securities as of March 31, 2014 and 2015.(1) “Held-to-maturity debt securities” whose market price or quotations are available
Millions of yen
March 31, 2014Book carrying
amount Fair valueUnrealized gains
(losses)
Other securities whose market price or quotations exceed their book carrying amount on the consolidated balance sheet (i) Government bonds, municipal bonds, etc. ¥ – ¥ – ¥ – (ii) Corporate bonds 3,707 3,744 37 (iii) Others – – –
3,707 3,744 37Other securities whose market price or quotations do not exceed their book carrying amount on the consolidated balance sheet (i) Government bonds, municipal bonds, etc. – – – (ii) Corporate bonds 2,748 2,579 (169) (iii) Others – – –
2,748 2,579 (169) Total ¥6,455 ¥6,323 ¥(132)
Millions of yen
March 31, 2015Book carrying
amount Fair valueUnrealized gains
(losses)
Other securities whose market price or quotations exceed their book carrying amount on the consolidated balance sheet (i) Government bonds, municipal bonds, etc. ¥ – ¥ – ¥ – (ii) Corporate bonds 3,108 3,178 70 (iii) Others – – –
3,108 3,178 70Other securities whose market price or quotations do not exceed their book carrying amount on the consolidated balance sheet (i) Government bonds, municipal bonds, etc. – – – (ii) Corporate bonds 1,894 1,877 (17) (iii) Others – – –
1,894 1,877 (17) Total ¥5,002 ¥5,055 ¥ 53
TOPPAN FORMS REPORT 2015 49
Thousands of U.S. dollars
March 31, 2015Book carrying
amount Fair valueUnrealized gains
(losses)
Other securities whose market price or quotations exceed their book carrying amount on the consolidated balance sheet (i) Government bonds, municipal bonds, etc. $ – $ – $ – (ii) Corporate bonds 25,867 26,442 575 (iii) Others – – –
25,867 26,442 575Other securities whose market price or quotations do not exceed their book carrying amount on the consolidated balance sheet (i) Government bonds, municipal bonds, etc. – – – (ii) Corporate bonds 15,763 15,620 (143) (iii) Others – – –
15,763 15,620 (143) Total $41,630 $42,062 $ 432
(2) “Other securities” whose market price or quotations are availableMillions of yen
March 31, 2014Market value
(= Book carrying amount) Acquisition costUnrealized
gains (losses)
Other securities whose market price or quotations exceed their book carrying amount on the consolidated balance sheet (i) Share stocks ¥ 7,267 ¥4,218 ¥ 3,049 (ii) Bond certificate – – – (iii) Others 2,115 2,059 56
9,382 6,277 3,105Other securities whose market price or quotations do not exceed their book carrying amount on the consolidated balance sheet (i) Share stocks 601 641 (40) (ii) Bond certificate – – – (iii) Others 592 626 (34)
1,193 1,267 (74) Total ¥10,575 ¥7,544 ¥(3,031)
Millions of yen
March 31, 2015Market value
(= Book carrying amount) Acquisition costUnrealized
gains (losses)
Other securities whose market price or quotations exceed their book carrying amount on the consolidated balance sheet (i) Share stocks ¥ 9,873 ¥4,819 ¥5,054 (ii) Bond certificate – – – (iii) Others 1,395 1,295 100
11,268 6,114 5,154Other securities whose market price or quotations do not exceed their book carrying amount on the consolidated balance sheet (i) Share stocks 19 21 (2) (ii) Bond certificate – – – (iii) Others 1,993 2,012 (19)
2,012 2,033 (21) Total ¥13,280 ¥8,147 ¥5,133
50 TOPPAN FORMS REPORT 2015
Thousands of U.S. dollars
March 31, 2015Market value
(= Book carrying amount) Acquisition costUnrealized
gains (losses)
Other securities whose market price or quotations exceed their book carrying amount on the consolidated balance sheet (i) Share stocks $ 82,163 $40,101 $42,062 (ii) Bond certificate – – – (iii) Others 11,609 10,775 834
93,772 50,876 42,896Other securities whose market price or quotations do not exceed their book carrying amount on the consolidated balance sheet (i) Share stocks 156 175 (19) (ii) Bond certificate – – – (iii) Others 16,587 16,742 (155)
16,743 16,917 (174) Total $110,515 $67,793 $42,722
Investments held in unlisted stocks with acquisition book value of ¥285 million and ¥297 million (US$2,474 thousand) as at March 31, 2014 and 2015, respec-tively, are not included in the above disclosures of fair value since no quoted market prices are available meaning that ascertaining fair values is considered to be extremely difficult.
(3) “Other securities” sold in the current fiscal yearMillions of yen
March 31, 2014Proceeds from sales of
“Other securities”Gain on sales of
“Other securities”Loss on sales of
“Other securities”
(i) Share stocks ¥ 0 ¥0 ¥– (ii) Bond certificate – – – (iii) Others 2,479 0 0 Total ¥2,479 ¥0 ¥0
Millions of yen
March 31, 2015Proceeds from sales of
“Other securities”Gain on sales of
“Other securities”Loss on sales of
“Other securities”
(i) Share stocks ¥ 110 ¥ 56 ¥ – (ii) Bond certificate – – – (iii) Others 3,200 138 14 Total ¥3,310 ¥194 ¥14
Thousands of U.S. dollars
March 31, 2015Proceeds from sales of
“Other securities”Gain on sales of
“Other securities”Loss on sales of
“Other securities”
(i) Share stocks $ 916 $ 465 $ – (ii) Bond certificate – – – (iii) Others 26,630 1,152 118 Total $27,546 $1,617 $118
(4) “Loss on valuation of investment securities”In the fiscal years ended March 31, 2014 and 2015, there was no loss on valuation of investment securities.
14. Derivative Financial Instruments
Not applicable.
TOPPAN FORMS REPORT 2015 51
15. Pension and Severance Plans
(1) Outline of pension and severance plans The Company and certain consolidated subsidiaries have entered into agreements with insurance companies and trust banking corporations for contributory funded defined benefit pension plans or non-contributory plans to cover employee pensions. Certain consolidated subsidiaries participate in pension plans that are classified as multi-employer plans. As of March 2015, a number of consolidated subsidiaries have transitioned from a defined benefit plan to a contribution pension plan.
(2) Defined-benefit pension plans(a) Reconciliation of defined benefit obligation at beginning and end of period
Millions of yenThousands of
U.S. dollars
2014 2015 2015
Defined benefit obligation at beginning of period ¥30,448 ¥31,852 $265,067Cumulative effects of change in accounting policies – 3,984 33,156Restated balance 30,448 35,836 298,223Service costs 1,657 1,947 16,204Interest costs 587 323 2,686Actuarial gains and losses incurred this period 15 107 886Retirement benefits paid (1,680) (1,545) (12,857)Increase due to business combination 822 99 823
D ecrease in liability for retirement benefits due to change the plan to defined contribution pension plan – (820) (6,826)
Others 3 3 16Defined benefit obligation at end of period ¥31,852 ¥35,950 $299,155
(b) Reconciliation of balance of plan assets at beginning and end of period
Millions of yenThousands of
U.S. dollars
2014 2015 2015
Plan assets at beginning of period ¥25,360 ¥28,772 $239,433Expected return on plan assets 687 761 6,332Actuarial gains and losses incurred this period 1,620 3,249 27,034Employer contribution 2,366 2,370 19,726Retirement benefits paid (1,670) (1,532) (12,749)Increase due to business combination 409 – –Plan assets at end of period ¥28,772 ¥33,620 $279,776
(c) Reconciliation of defined benefit obligation and plan assets with net defined benefit liability and asset reflected on the consolidated balance sheets
Millions of yenThousands of
U.S. dollars
2014 2015 2015
Defined benefit obligation for funded plan ¥ 31,050 ¥ 35,819 $ 298,072Plan assets at fair value (28,772) (33,620) (279,776)
2,278 2,199 18,296Defined benefit obligation for unfunded plan 802 130 1,084Net amount of defined benefit liability and asset on the consolidated balance sheets ¥ 3,080 ¥ 2,329 $ 19,380
Net defined benefit liability ¥ 3,080 ¥ 2,329 $ 19,380Net defined benefit asset – – –Net amount of defined benefit liability and asset on the consolidated balance sheets ¥ 3,080 ¥ 2,329 $ 19,380
52 TOPPAN FORMS REPORT 2015
(d) Components of net periodic benefit cost
Millions of yenThousands of
U.S. dollars
2014 2015 2015
Service costs ¥1,657 ¥1,947 $16,204Interest costs 587 323 2,686Expected return on plan assets (687) (761) (6,332)Expense for actuarial losses 783 650 5,408Amortization of prior service costs (348) (348) (2,893)Net periodic benefit cost of defined benefit plan ¥1,992 ¥1,811 $15,073Gain on changing to the defined contribution pension plan ¥ – ¥ (28) $ (230)
(e) Remeasurements of defined benefit plans, net of taxes
Millions of yenThousands of
U.S. dollars
2014 2015 2015
Prior service costs ¥– ¥ (348) $ (2,893)Actuarial losses – 3,840 31,955
¥– ¥3,492 $29,062
(f ) Composition of items included in remeasurements of defined benefit plans, net of taxes
Millions of yenThousands of
U.S. dollars
2014 2015 2015
Unrecognized prior service costs ¥ 2,476 ¥2,128 $17,709Unrecognized actuarial gains and losses (3,047) 793 6,602
¥ (571) ¥2,921 $24,311
(g) Plan asset information(i) Breakdown of plan assets Ratio of each component of plan assets to the amount of total pension assets
2014 2015
Bond certificate 40.5% 38.9%Share stocks 34.2% 35.5%Alternative investments 14.9% 12.0%General account 10.0% 8.6%Cash and deposits 0.4% 5.0%
100.0% 100.0%
A retirement benefit trust established for the corporate pension plan accounts for 7.6% and 7.9% of plan assets for the fiscal years ended March 31, 2014 and 2015, respectively. Also, a hedge fund investment is given as an alternative investment.
(ii) Method for calculating long-term rate of return on plan assets In calculating the long-term rate of return on plan assets, the Company considers the current distribution of plan assets and the projected future distribution as
well as the current rates of return for each of the assets included under plan assets and the expected future rates of return for these assets.
(h) Assumptions for making actuarial calculationsAssumptions used for making actuarial calculations in the fiscal years ended March 31, 2014 and 2015 (shown using weighted average)
2014 2015
Discount rate 1.9% 0.9%Expected return on plan assets 2.9% 2.9%
(3) Defined contribution pension systemThe required contribution amount for the consolidated subsidiaries for the fiscal year ended March 31, 2015 was ¥4 million (US$35 thousand).
TOPPAN FORMS REPORT 2015 53
16. Income Taxes
(1) The significant components of deferred tax assets and liabilities
Millions of yenThousands of
U.S. dollars
2014 2015 2015
Deferred tax assets Provision for bonuses ¥ 1,773 ¥ 1,553 $ 12,926 Social insurance premiums on provision for bonuses 249 224 1,861 Enterprise tax 200 242 2,018 Depreciation 48 4 33 Net defined benefit liability 1,371 958 7,976 Provision for directors’ retirement benefits 90 56 463 Allowance for doubtful accounts 144 172 1,434 Unrealized loss on investment securities 360 227 1,890 Unrealized loss on golf club membership 148 128 1,069 Asset retirement obligations 170 162 1,346 Net operating loss carry forwards of subsidiaries 278 387 3,218 Impairment loss 46 11 94 Others 397 789 6,561 Subtotal of deferred tax assets 5,274 4,913 40,889 Valuation allowance (536) (483) (4,023) Deferred tax assets total 4,738 4,430 36,866Deferred tax liabilities Undistributed earnings of foreign subsidiaries (20) (43) (356) Valuation difference on available-for-sale securities (1,076) (1,641) (13,656) Depreciation (97) (173) (1,442) Others (29) (140) (1,166) Deferred tax liabilities total (1,222) (1,997) (16,620)Deferred tax assets, net* ¥ 3,516 ¥ 2,433 $ 20,246
* Deferred tax assets are stated net in the following accounts of the consolidated balance sheets.
Millions of yenThousands of
U.S. dollars
2014 2015 2015
Current assets — deferred tax assets ¥2,268 ¥ 2,222 $18,492Long-term assets — deferred tax assets 1,379 1,237 10,293Long-term liabilities — deferred tax liabilities (131) (1,026) (8,539)Deferred tax assets, net ¥3,516 ¥ 2,433 $20,246
(2) The reconciliation between the statutory tax rate and the Company’s effective tax rate2014 2015
Statutory tax rate –% 35.6%Non-deductible entertainment expense – 1.1Non-taxable dividend income – (0.3)Per capita portion of resident tax – 0.8Future declining of the enterprise tax rate – 3.5Others – (0.4)Effective tax rate –% 40.3%
Disclosure of the reconciliation between the statutory tax rate and the effective corporate income tax rate is required if the difference of these two rates is more than 5% of the statutory tax rate. The Company did not disclose such reconciliations as the difference was less than 5% for the fiscal year ended March 31, 2014.
(3) Revision of values for deferred tax assets and deferred tax liabilities due to change in statutory tax rateOn March 31, 2015, the Bill for Partial Amendment of the Income Tax Act, etc. and the Bill for Partial Amendment of the Local Taxation Act, etc. were announced. Accordingly, the statutory tax rate used to calculate deferred tax assets and deferred tax liabilities in the consolidated fiscal year under review (limited to those to be eliminated on or after April 1, 2015) has been changed from 35.6% to 33.1% for those expected to be recovered or repaid from April 1, 2015 to March 31, 2016, and 32.3% for those expected to be recovered or repaid on or after April 1, 2016. As a result, net deferred tax assets (deferred tax assets less deferred tax liabilities) decreased ¥199 million (US$1,653 thousand), income taxes–deferred (recorded under the Company’s expenses) increased ¥462 million (US$3,846 thousand), valuation difference on available-for-sale securities increased ¥167 million (US$1,391 thousand), and remeasurements for retirement benefit plans increased ¥96 million (US$802 thousand).
54 TOPPAN FORMS REPORT 2015
17. Business Combination
(1) Overview of business combination(a) Name and business lines of acquired company(i) Acquired companyData Products Toppan Forms Ltd. (hereinafter DPTF)(ii) Business operations of acquired companyBusiness forms, data print services, create and issue IC cards and security-related products
(b) Primary reasons for business combinationDPTF manages the manufacture and issuance of cash cards and credit cards in large numbers. In addition, DPTF has taken on a large-scale government project in Thailand to manufacture and issue national ID cards, which has led to continuous and stable growth. The Group is establishing and enhancing comprehensive sales and manu-facturing systems in Asian countries and regions, including China, Hong Kong, Singapore, Malaysia, and Thailand, and is promoting global quality standards. Moving forward, we will expand our business operations in Thailand, Indonesia, Vietnam, Myanmar, and neighboring countries. We view DPTF as a valuable strategic business for expanding business operations in the ASEAN region, and we have invested additional funds in DPTF to accelerate the progression of our growth strategy in those countries and regions.
(c) Date of business combinationDecember 31, 2014 (Deemed date of acquisition of shares)
(d) Legal form of business combinationAcquisition of shares by cash
(e) Name of company after business combinationData Products Toppan Forms Ltd.
(f ) Percentage of voting rights acquiredPercentage of voting rights before business combination: 30.5%Percentage of voting rights additionally acquired on the business combination date: 17.5%Percentage of voting rights after business combination: 48.0%
(g) Reason for selecting acquired companyThis is due to the Group’s control over the decision-making body due to the acquisition of shares in exchange for cash.
(2) Period for which business results of acquired company are included in consolidated financial statements
From January 1, 2014, to December 31, 2014Since the acquired company was an equity-method affiliate, that company’s business performance from January 1, 2014 to December 31, 2014 was recorded as investment profit on equity method.
(3) Acquisition cost of the stock of acquired company and breakdown of acquisition cost
(a) Market value of shares on the date of the business combination based on shares held immediately prior to the additional acquisition¥257 million (US$2,137 thousand)
(b) Cash used for the additional acquisitions¥1,865 million (US$15,520 thousand)
(c) Acquisition cost¥2,122 million (US$17,657 thousand)
(4) Difference between acquisition costs for the acquired company and total acquisition costs incurred per transaction until the acquisition
Gain on step acquisitions: ¥133 million (US$1,104 thousand)
(5) Resulting goodwill amount, reason for occurrence, amortization method, and amortization period
(a) Resulting goodwill amount¥822 million (US$6,844 thousand)
(b) Reason for occurrenceOccurrence due to projected future earnings capacity
(c) Amortization method, and amortization periodStraight-line method over 7 years
(6) Breakdown of assets received and liabilities assumed on date of business combination
Millions of yenThousands of
U.S. dollars
Current assets ¥1,423 $11,844Noncurrent assets 1,883 15,666Total assets 3,306 27,510
Current liabilities (391) (3,255)Noncurrent liabilities (208) (1,728)Total liabilities (599) (4,983)
(7) Estimated amount and calculation method of the impact of the business combination on the consolidated statement of income for the fiscal year ended December 31, 2014, on the assumption that the business combination was completed at the beginning of the fiscal year
Millions of yenThousands of
U.S. dollars
Net sales ¥2,880 $23,970Operating income 91 759Ordinary income 105 878Net income 39 328
(Calculation method of the approximate amounts)The above estimated amount which impacts our consolidated statements of operations was calculated based on the estimated sales amount and income sum-mary information on the assumption that the business combination was completed at the beginning of the fiscal year. We have calculated the impact of the recognition of goodwill that occurred during business combinations at the beginning of the fiscal year under review. The estimated amounts of the impact have not been audited by the Company’s independent auditors.
TOPPAN FORMS REPORT 2015 55
18. Asset Retirement Obligations
(1) Overview of asset retirement obligationsAsset retirement obligations of the Company are mainly statutory obligations with regard to the removal of property, plant and equipment in connection with real estate leasing agreements to restore them to their original condition.
(2) Method of calculating asset retirement obligationsAsset retirement obligations are calculated using the estimated useful life of assets and related yield on Japanese government bonds.
(3) Change in total asset retirement obligations during the consolidated fiscal year under review
Millions of yenThousands of
U.S. dollars
2014 2015 2015
Balance at beginning of period ¥ 619 ¥500 $4,161Increase due to purchases of property, plant and equipment 26 86 713Changes due to fulfillment of asset retirement obligations (171) (79) (662)Increase due to changes in estimates 19 175 1,460Increases in other items 7 6 49Balance at end of period ¥ 500 ¥688 $5,721
19. Segment Information
(1) Outline of reporting segmentsThe Company’s reporting segments are composed of those individual business units for which separate financial information is available, and which are used by members of the Board of Directors for making decisions regarding the allocation of management resources, and to allow the periodic examination and evaluation of operating performance. The Company’s planning department based at its headquarters prepares the overall plan by product and service. The Company has separated its reporting segments on the basis of product and service into two reporting segments: printing business and merchandise business. The printing business consists of the printing of business forms and data printing services. The merchandise business is the sale of supplies and equipment and provision of services related to the printing business, business information operating services and other. For the consolidated year under review, we have readjusted certain performance management sections for domestic and overseas subsidiaries. Accordingly, sections of the reporting segment have changed. Further, segment information disclosed for the previous consolidated fiscal year reflects the changes made to sections of the reporting segment.
(2) Methods of calculating sales, income or losses, assets, liabilities and other items by reporting segmentAccounting policies and procedures followed by reporting segments are in principal the same as those indicated in “Note 2. Summary of Significant Accounting Policies”. Profits or losses of reporting segments are based on operating income.
(3) Information related to amounts of sales, income or losses, assets, liabilities and other items for individual reporting segmentsSegment information for the year ended March 31, 2014 is as follows:
Millions of yen
March 31, 2014Printing
businessMerchandise
business Total Adjustment *1 Consolidated *3
Net sales: Outside customers ¥198,864 ¥62,547 ¥261,411 ¥ – ¥261,411 Inter-segment – – – – – Total 198,864 62,547 261,411 – 261,411
Segment profits 13,767 2,669 16,436 (4,166) 12,270 Segment assets ¥152,360 ¥21,772 ¥174,132 ¥33,873 ¥208,005
Others: Depreciation*2 ¥ 7,393 ¥ 321 ¥ 7,714 ¥ 661 ¥ 8,375 Increase of “Property, plant and equipment” and “Intangible assets” *2 9,411 87 9,498 814 10,312
*1 Adjustment to segment profits of ¥(4,166) million includes corporate level expenses that are not allocated to individual reporting segments. Such expenses comprise mainly non-segment specific general and administrative expenses. Adjustment to segment assets includes corporate level assets of ¥33,873 million, which consist principally of surplus investment funds (term deposits and demand deposits) and long-term investment funds (such as marketable securities) which are non-segment specific. Adjustment to increase of “Property, plant and equipment” and “Intangible assets” ¥814 million includes Group’s systems division’s assets, such as software.
*2 Depreciation and Increase of “Property, plant and equipment” and “Intangible assets” include long-term prepaid expenses.*3 Segment profits are reconciled to the operating income included in the consolidated statements of income.
56 TOPPAN FORMS REPORT 2015
Segment information for the year ended March 31, 2015 is as follows:
Millions of yen
March 31, 2015Printing
businessMerchandise
business Total Adjustment *1 Consolidated *3
Net sales: Outside customers ¥204,286 ¥61,600 ¥265,886 ¥ – ¥265,886 Inter-segment – – – – – Total 204,286 61,600 265,886 – 265,886
Segment profits 14,104 3,018 17,122 (4,515) 12,607 Segment assets ¥163,139 ¥22,154 ¥185,293 ¥39,065 ¥224,358
Others: Depreciation*2 ¥ 7,517 ¥ 304 ¥ 7,821 ¥ 812 ¥ 8,633 Increase of “Property, plant and equipment” and “Intangible assets” *2 5,611 137 5,748 529 6,277
Thousands of U.S. dollars
March 31, 2015Printing
businessMerchandise
business Total Adjustment *1 Consolidated *3
Net sales: Outside customers $1,699,980 $512,604 $2,212,584 $ – $2,212,584 Inter-segment – – – – – Total 1,699,980 512,604 2,212,584 – 2,212,584
Segment profits 117,370 25,111 142,481 (37,576) 104,905 Segment assets $1,357,567 $184,353 $1,541,920 $325,086 $1,867,006
Others: Depreciation*2 $ 62,557 $ 2,528 $ 65,085 $ 6,755 $ 71,840 Increase of “Property, plant and equipment” and “Intangible assets” *2 46,693 1,144 47,837 4,398 52,235
*1 Adjustment to segment profits of ¥(4,515) million (US$(37,576) thousand) includes corporate level expenses that are not allocated to individual reporting segments. Such expenses comprise mainly non-segment specific general and administrative expenses. Adjustment to segment assets includes corporate level assets of ¥39,065 million (US$325,086 thousand), which consist principally of surplus investment funds (term deposits and demand deposits) and long-term investment funds (such as marketable securities) which are non-segment specific.
Adjustment to increase of “Property, plant and equipment” and “Intangible assets” ¥529 million (US$4,398 thousand) includes Group’s systems division’s assets, such as software.*2 Depreciation and Increase of “Property, plant and equipment” and “Intangible assets” include long-term prepaid expenses.*3 Segment profits are reconciled to the operating income included in the consolidated statements of income.
(4) Related information(a) Products and service Information of each product and service is presented in (3) above.(b) Geographic region(i) Sales Sales information is not presented geographically since sales to customers
located in Japan exceeds 90% of the net sales recorded in the consolidated statements of income.
(ii) Property, plant and equipment Property, plant and equipment information is not presented geographically
since property, plant and equipment located in Japan exceeds 90% of the property, plant and equipment recorded in the consolidated balance sheets.
(c) Main customersMarch 31,2014 Millions of yen Related segment
Customer
Tokyo Electric Power Co., Inc ¥29,489Printing and Merchandise business
March 31, 2015 Millions of yen Related segment
Customer
Tokyo Electric Power Co., Inc ¥35,058Printing and Merchandise business
March 31, 2015Thousands of
U.S. dollars Related segment
Customer
Tokyo Electric Power Co., Inc $291,733Printing and Merchandise business
TOPPAN FORMS REPORT 2015 57
(5) Impairment loss on assets by reportable segmentNot applicable.
(6) Amortization of goodwill and unamortized balance by reportable segmentAmortization of goodwill and unamortized balance by reportable segment for the years ended March 31, 2014 and 2015 are as follows:
Millions of yen
March 31, 2014Printing
businessMerchandise
business Total Adjustment Consolidated
Amortization of goodwill ¥101 ¥– ¥101 ¥– ¥101Balance at end of current period ¥405 ¥– ¥405 ¥– ¥405
Millions of yen
March 31, 2015Printing
businessMerchandise
business Total Adjustment Consolidated
Amortization of goodwill ¥ 102 ¥– ¥ 102 ¥– ¥ 102Balance at end of current period ¥1,126 ¥– ¥1,126 ¥– ¥1,126
Thousands of U.S. dollars
March 31, 2015Printing
businessMerchandise
business Total Adjustment Consolidated
Amortization of goodwill $ 849 $– $ 849 $– $ 849Balance at end of current period $9,370 $– $9,370 $– $9,370
(7) Gain on negative goodwill by reportable segmentNot applicable.
20. Related Party Transactions
There are several related party transactions, including sales to Toppan Printing Co., Ltd., which owns 60.7% of the common stock of the Company. The transactions were made at arm’s-length prices that are considered to be equivalent to market prices. Sales to Toppan Printing Co., Ltd. for the fiscal years ended March 31, 2014 and 2015 amounted to ¥10,929 million and ¥10,767 million (US$89,600
thousand), respectively. The balance of notes and accounts receivable from Toppan Printing Co., Ltd. as of March 31, 2014 and 2015 amounted to ¥2,354 million and ¥2,135 million (US$17,763 thousand), respectively. There are no related party transactions by consolidated subsidiaries of the Company.
21. Earnings per Share Information
The computation of net income per share is based on the weighted-average number of common shares outstanding during each fiscal year. Treasury stocks held during these fiscal years are excluded.
Yen U.S. dollars
March 31 2014 2015 2015
Net assets per share ¥1,393.46 ¥1,457.40 $12.13Net income per share 65.96 70.59 0.59
As the Company had no diluted securities as at March 31, 2014 and 2015, the Company does not disclose amounts of diluted net income per share for the years ended March 31, 2014 and 2015. As stated in “Changes in Accounting Polices,” the Company has adopted “Accounting Standard for Retirement Benefits,” and adheres to the provision for transi-tional treatment stated in Paragraph 37. As a result, net assets per share for the consolidated fiscal year under review decreased ¥23.23 year on year. The impact of adopting this standard on net income per share is minimal.
Basic net income per share
Millions of yenThousands of
U.S. dollars
March 31 2014 2015 2015
Net income ¥ 7,322 ¥ 7,835 $65,199Net income not available to common shareholders – – –Net income available to common shareholders 7,322 7,835 65,199Weighted-average number of shares outstanding (thousand shares) 110,997 110,997 –
58 TOPPAN FORMS REPORT 2015
24. Schedule of Borrowings
Millions of yenThousands of
U.S. dollars
2014
2015
2015
Average interest rate (%)
Due date of payment
Short-term loans payable ¥317 ¥182 $1,517 1.27% –Lease obligations 23 30 252 – –Lease obligations (without current portion) 35 56 466 – From 2016 to 2020
¥375 ¥268 $2,235
(1) “Average interest rate” represents the weighted-average interest rate of term-end borrowings.(2) As interest included in lease payments is allocated on the straight-line method to each fiscal year, the average interest rate of lease obligations is omitted. (3) The projected repayment amount of long-term debt (excluding debt scheduled to be repaid within one year) within five years after the consolidated balance
sheet date (i.e. March 31, 2015) are as follows:
Over 1 year and not
exceeding 2 years
Over 2 years and not
exceeding 3 years
Over 3 years and not
exceeding 4 years
Over 4 years and not
exceeding 5 years
Over 1 year and not
exceeding 2 years
Over 2 years and not
exceeding 3 years
Over 3 years and not
exceeding 4 years
Over 4 years and not
exceeding 5 years
Millions of yen Thousands of U.S. dollars
Lease obligations ¥23 ¥17 ¥14 ¥2 $188 $146 $116 $16
23. Schedule of Bonds
Not applicable.
22. Subsequent Events
Not applicable.
60 TOPPAN FORMS REPORT 2015
CORPORATE INFORMATIONAs of March 31, 2015
PRINCIPAL SUBSIDIARIES AND AFFILIATESAs of March 31, 2015
Name Country Main BusinessIssued Capital(Thousands)
Equity Held by the Company (%)
Toppan Forms Central Products Co., Ltd.
Japan Manufacture of business forms ¥ 100,000 100.0
Toppan Forms Tokai Co., Ltd.
Japan Manufacture of business forms ¥ 100,000 100.0
Toppan Forms Operation Co., Ltd.
Japan Operation and administration of computers ¥ 100,000 100.0
Techno Toppan Forms Co., Ltd.
Japan Sale, maintenance, and repair of office equipment ¥ 100,000 100.0
Toppan Forms Logistics and Services Co., Ltd.
Japan Delivery and keeping consignment of products ¥ 50,000 100.0
Toppan Forms Kansai Co., Ltd.
JapanDistribution, delivery, and storage services Manufacture of business forms
¥ 50,000 100.0
Toppan Forms Nishinihon Co., Ltd.
JapanDistribution, delivery, and storage services Manufacture of business forms
¥ 30,000 100.0
Toppan Forms (Sanyo) Co., Ltd.
Japan Manufacture of business forms ¥ 50,000 100.0
TOSCO CORPORATION Japan Capital alliance and business tie up ¥ 100,000 69.7
TF Payment Service Co., Ltd. JapanInformation handling service and settlement-of-accounts processing business by using Internet
¥ 810,000 83.2
J-SCube Inc. JapanDocument outsourcing services, equipment solutions, and staff services
¥1,000,000 100.0
Toppan Forms (Hong Kong) Ltd.
Hong KongManufacture of business forms Sale of plastic cards, computer supplies, DPS, and office automation machines
HK$ 94,000 100.0*1
Toppan Forms (S) Pte. Ltd. SingaporeManufacture and sale of business forms, DPS, and sale of machines for processing business forms
S$ 1,226 100.0*2
Data Products Toppan Forms Ltd.
ThailandManufacture and sale of business forms, DPS, IC cards, security-related products
Bht 133,650 48.0*3
Total number of subsidiaries: 23Total number of affiliates: 3
*1 Indirectly owned through T.F. Company Ltd.*2 52.3% directly owned by the Company and 47.7% indirectly owned through T.F. Company Ltd.*3 Although equity held by the Company is less than 50%, the Company has substantial control over Data Products Toppan Forms Ltd., making it a subsidiary.
Company Name
TOPPAN FORMS CO.,LTD.
Head Office
1-7-3 Higashi Shimbashi,Minato-ku, Tokyo 105-8311, Japan
Founded
May 1955
Capital
¥11,750 million
Number of Employees
11,964 (Consolidated)1,854 (Non-Consolidated)
Corporate Website
www.toppan-f.co.jp/english/
Contact
Public Relations DepartmentTel: 81-3-6253-5730Fax: 81-3-6253-5708
0.5%11.5%
13.8%
14.6%
59.7%
Brokers / Dealers in Financial Products
Other JapaneseCorporations
Japanese Individuals and Others
Japanese Financial Institutions
Foreign Institutionsand Individuals
4 5 6 1 2 37 8 9 10 11 12 4 5 6 1 2 37 8 9 10 11 12 4 5 6 1 2 37 8 9 10 11 12 4 5 6 1 2 37 8 9 10 11 12FY2012 FY2013 FY2014 FY2015
1,600
1,200
800
400
0
Stock Price(Yen)
Trading Volume(Thousand shares)
20,000
15,000
10,000
5,000
0
INVESTOR INFORMATIONAs of March 31, 2015
Stock Price Range and Trading Volume
Shareholdings by Type of Shareholder
Stock Listing
Tokyo Stock Exchange
Stock Code
7862
Fiscal Year
From April 1 to March 31
General Meeting of Shareholders
June
Capital Stock
Authorized: 400,000,000 sharesIssued: 115,000,000 shares
Stock Transaction Unit
100 shares
Independent Certified Public Accountant
PricewaterhouseCoopers Aarata(Member Firm of PricewaterhouseCoopers LLP)
Transfer Agent
Mitsubishi UFJ Trust and Banking Corporation
Number of Shareholders
7,666
Major Shareholders
NameNumber of Shares Held (Thousands)
Percentage of Share Ownership (%)
TOPPAN PRINTING CO., LTD. 67,419 60.74
Japan Trustee Services Bank, Ltd. 8,927 8.04
The Master Trust Bank of Japan, Ltd. 3,046 2.74
Toppan Forms Employees Shareholding Association 2,273 2.05
CBNY-GOVERNMENT OF NORWAY 1,562 1.41
Trust & Custody Services Bank, Ltd. 1,409 1.27
EVERGREEN 1,109 1.00
CACEIS BANK LUXEMBOURG-CLIENT ACCOUNT 833 0.75
CBNY DFA INTL SMALL CAP VALUE PORTFOLIO 794 0.72
CMBL S.A. RE MUTUAL FUNDS 620 0.56
Note: Figures in the table above do not include the 4,003 thousand shares of treasury stock held by the Company on March 31, 2015. These shares were also excluded when calculating percentage of share ownership.
TOPPAN FORMS REPORT 2015 61
TOPPA
N FO
RMS REPO
RT 2015
1-7-3 Higashi Shimbashi,Minato-ku, Tokyo 105-8311, JapanTel: 81-3-6253-5730www.toppan-f.co.jp/english/
© TOPPANFORMS 2015 1COM15007-1506N-010
Printed in Japan
About the CoverThe photo on the front cover of this Toppan Forms report is a panoramic view from the roof of Toppan Forms’ headquarters, which was printed using the Company-owned digital color press. Since the digital color press can accomplish seamless printing at a practically infinite length, it can be used for making large-scale advertisements as well as making replicas of historical and cultural assets such as ancient scrolls. The measurement of the actual printed photos are 2 meters by 30 centimeters.
Photos by Nobutoshi Sato Licensed by TOKYO TOWER