DIC : Annual Securities Reports (Fiscal year from January 1, 2021 to December 31, 2021)［3,609KB］

The 124th Business Term

Annual Securities Report

From January 1, 2021

Fiscal year

To December 31, 2021

DIC Corporation

E00901

ENGLISH TRANSLATION OF JAPANESE-LANGUAGE DOCUMENT

This is a translation of the original Japanese-language document and is provided for convenience only. In all cases, the Japanese-language original shall take precedence.

Table of Contents
Page
Cover
Part 1 Corporate Information ………………………………………………………………………………………………………	1
I. Overview of the Company ……………………………………………………………………………………………………	1
1. Key Financial Data and Trends ………………………………………………………………………………………… ...	1
2. History ………………………………………………………………………………………………………………… .…	3
3. Description of Business ………………………………………………………………………………………………… ...	4
4. Subsidiaries and Affiliates …………………………………………………………………………………………………	6
5. Employees …………………………………………………………………………………………………………………	9
II. Business Overview …………………………………………………………………………………………… .……….……	10
1. Management Policy, Business Environment, Challenges to be Addressed, etc. …………………………… . ……………	10
2. Business Risks ……………………………………………………………………………………………… . ……………	13
3. Management's Analysis of Financial Position, Operating Results and Cash Flows ………………………………………	27
4. Material Business Agreements, etc . ...…………………………………………………………………………………… .	33
5. Research and Development Activities …………………………………………………………………………………… .	34
III. Facilities ………………………………………………………………………………………………………… ...………...	36
1. Overview of Capital Expenditures …………………………………………………………………………… ... …………	36
2. Major Facilities …………………………………………………………………………………………………………… .	37
3. Plans for New Installation and Retirement of Facilities ………………………………………………………………… ...	39
IV. Information on the Company …………………………………………………………………………………… . …………	40
1. Information on the Company's Shares …………………………………………………………………………………… .	40
(1) Total Number of Shares, etc. …………………………………… .. …………………… ... ……………… ... ………… .	40
(2) Stock Acquisition Rights …………………………………………………………………………………………… ...	40
(3) Exercise of Bonds with Moving Strike Warrants, etc. ……………………………………………………… ...………	40
(4) Changes in Number of Shares Issued, Capital Stock, etc. ……………………………………………………….........	41
(5) Shareholder Composition …………………………………………………………………………………………… ..	41
(6) Major Shareholders ……………………………………………………………………………………………………	42
(7) Voting Rights ………………………………………………………………………………………………………… .	44
(8) Share Ownership by Directors/Other Officers and Employees …. …………………………………………………… .	44
2. Acquisition, etc., of Treasury Stock ……………………………………………………………………………………....	46
3. Dividend Policy ……………………………………………………… ... …………………………………………………	47
4. Corporate Governance ………………………………………………… . …………………………………………………	48
V. Financial Information …………………………………………………… . …………………………………………………	79
1. Consolidated Financial Statements …………………………………… .. …………………………………………………	80
(1) Consolidated Financial Statements ……………………………………………………………………………………	80
(2) Other Information …………………………………………………… .. ………………………………………………	138
VI. Stock-Related Administration for the Company …………………………… ... ……………………………………………	139
VII. Reference Information of the Company ……………………………………… ... …………………………………………	140
1. Information on the Parent Company ………………………………………………………………………………………	140
2. Other Reference Information ……………………………………………………………………………… ... ……………	140
Part 2 Information on Guarantors, etc., for the Company …………………………………………………………………………	140
[Audit Report]
(Note) Non-consolidated financial statements are included in the Japanese-language original.

[Cover]

[Document filed]

[Applicable law]

[Filed with]

[Filing date]

[Fiscal year]

[Company name]

[Company name in English]

[Name and title of chief executive officer]

[Registered address]

[Phone number]

[Contact person]

[Contact address]

[Phone number]

[Contact person]

[Locations where records are available for public inspection]

Annual Securities Report ("Yuka Shoken Hokokusho")

Article 24, paragraph 1 of the Financial Instruments and Exchange Act of Japan

Director, Kanto Local Finance Bureau

March 29, 2022

The 124th Business Term (from January 1, 2021 to December 31, 2021)

DIC Kabushiki-Kaisha

DIC Corporation

Kaoru Ino, Representative Director, President and CEO

35-58, Sakashita 3-chome, Itabashi-ku, Tokyo, Japan [phone] (main)

Fumito Shirai, Group Manager, General Affairs Group 7-20, Nihonbashi 3-chome, Chuo-ku, Tokyo, Japan Corporate headquarters, DIC Corporation [phone] (main)

Jun Kaneko, General Manager, Accounting Dept. Corporate headquarters, DIC Corporation

(7-20, Nihonbashi 3-chome, Chuo-ku, Tokyo, Japan) Osaka Branch, DIC Corporation

(5-19, Kyutaro-machi 3-chome, Chuo-ku, Osaka, Japan) Nagoya Branch, DIC Corporation

(7-15, Nishiki 3-chome, Naka-ku, Nagoya, Japan) Tokyo Stock Exchange

(2-1, Nihonbashi Kabuto cho, Chuo-ku, Tokyo, Japan)

Part 1 Corporate Information

I. Overview of the Company

1. Key Financial Data and Trends (1) Consolidated financial data, etc.

Fiscal year	120th	121st	122nd	123rd	124th
Year-end	December 2017	December 2018	December 2019	December 2020	December 2021
Net sales (Millions of yen)	789,427	805,498	768,568	701,223	855,379
Ordinary income (Millions of yen)	56,960	48,702	41,302	36,452	43,758
Net income attributable to owners of parent (Millions of yen)	38,603	32,028	23,500	13,233	4,365
Comprehensive income (Millions of yen)	50,957	(3,844)	28,473	20,396	40,596
Net assets (Millions of yen)	343,951	327,334	343,497	351,364	381,008
Total assets (Millions of yen)	831,756	801,296	803,083	817,950	1,071,481
Shareholders' equity per share (Yen)	3,329.60	3,158.05	3,304.34	3,364.92	3,654.61
Earnings per share (basic) (Yen)	407.56	338.40	248.29	139.81	46.12
Earnings per share (diluted) (Yen)	－	－	－	－	－
Shareholders' equity ratio to total assets (%)	37.9	37.3	38.9	38.9	32.3
ROE (return on equity) (%)	13.0	10.4	7.7	4.2	1.3
Price-earnings ratio (Times)	10.5	10.0	12.2	18.6	62.8
Net cash provided by (used in) operating activities (Millions of yen)	54,196	50,990	50,637	54,462	44,812
Net cash provided by (used in) investing activities (Millions of yen)	(58,938)	(38,388)	(24,884)	(33,037)	(147,612)
Net cash provided by (used in) financing activities (Millions of yen)	11,375	(11,781)	(26,799)	6,338	99,549
Cash and cash equivalents at end of the period (Millions of yen)	17,651	18,631	16,690	41,354	37,572
Number of employees (Persons)	20,628	20,620	20,513	20,242	22,474

(Notes)

• 1. Consumption taxes are not included in Net sales.

• 2. Diluted earnings per share are not stated because there are no diluted shares.

• 3. From the fiscal year ended December 31, 2017, the Company introduced the Board Benefit Trust (BBT). The shares held by the trust are recorded under net assets as treasury shares. The number of treasury shares excluded from the number of shares issued as of the consolidated balance sheet date used for the calculation of equity per share includes the number of shares held by the trust. The number of treasury shares excluded from the weighted-average number of shares issued during the fiscal year used for the calculation of earnings per share includes the number of shares held by the trust.

• 4. The Company has applied "Partial Amendments to Accounting Standard for Tax Effect Accounting" (Accounting Standards Board of Japan (ASBJ) Statement No. 28, issued on February 16, 2018), etc., since the beginning of the fiscal year ended December 31,

  2019. The figures as of December 31, 2018, are based on retrospective application.

(2) Non-consolidated financial data, etc., of the Company

Fiscal year	120th	121st	122nd	123rd	124th
Year end	December 2017	December 2018	December 2019	December 2020	December 2021
Net sales (Millions of yen)	232,045	235,394	219,849	195,403	231,550
Ordinary income (Millions of yen)	30,385	21,294	12,660	7,093	23,966
Net income (Millions of yen)	26,332	20,616	17,663	6,930	29,811
Capital stock (Millions of yen)	96,557	96,557	96,557	96,557	96,557
Number of shares issued (common stock) (Thousands of shares)	95,157	95,157	95,157	95,157	95,157
Net assets (Millions of yen)	283,596	290,834	297,940	300,089	319,291
Total assets (Millions of yen)	687,728	675,856	688,683	691,051	829,904
Shareholders' equity per share (Yen)	2,996.43	3,072.86	3,147.97	3,170.49	3,373.21
Cash dividends per share [Interim dividend per share] (Yen)	120.00 [60.00]	125.00 [60.00]	100.00 [60.00]	100.00 [50.00]	100.00 [50.00]
Earnings per share (basic) (Yen)	278.01	217.82	186.62	73.22	314.94
Earnings per share (diluted) (Yen)	－	－	－	－	－
Shareholders' equity ratio to total assets (%)	41.2	43.0	43.3	43.4	38.5
ROE (%)	9.6	7.2	6.0	2.3	9.6
Price-earnings ratio (Times)	15.3	15.5	16.3	35.6	9.2
Dividend payout ratio (%)	43.2	57.4	53.6	136.6	31.8
Number of employees (Persons)	3,503	3,538	3,593	3,662	3,681
Total shareholder return [Comparison index: TOPIX including dividends] (%) (%)	123.4 [122.2]	101.8 [102.7]	95.2 [121.3]	85.9 [130.3]	96.9 [146.9]
Highest stock price (Yen)	4,415	4,525	3,635	3,130	3,380
Lowest stock price (Yen)	3,300	3,150	2,534	1,833	2,492

(Notes)

• 1. Consumption taxes are not included in Net sales.

• 2. Diluted earnings per share is not stated because there are no diluted shares.

• 3. From the fiscal year ended December 31, 2017, the Company introduced the Board Benefit Trust (BBT). The shares held by the trust are recorded under net assets as treasury shares. The number of treasury shares excluded from the number of shares issued as of the balance sheet date used for the calculation of equity per share includes the number of shares held by the trust. The number of treasury shares excluded from the weighted-average number of shares issued during the fiscal year used for the calculation of earnings per share includes the number of shares held by the trust.

• 4. The Company has applied "Partial Amendments to Accounting Standard for Tax Effect Accounting" (Accounting Standards Board of Japan (ASBJ) Statement No. 28, issued on February 16, 2018), etc., since the beginning of the fiscal year ended December 31, 2019. The figures as of December 31, 2018, are based on retrospective application.

• 5. The highest and lowest stock prices refer to those of the First Section of the Tokyo Stock Exchange.