DNP Annual Report to Shareholders, 'Building Taiwa, P&I Solutions from DNP'.

Tokyo, Japan, Dec 26, 2006 - (JCN Newswire) - Dai Nippon Printing Co., Ltd. (DNP; TSE: 7912; ADR: DNPCY) is pleased to announce its 2006 Annual Report to Shareholders, "Building Taiwa, P&I Solutions from DNP". "Taiwa"is a process that entails identifying problems and finding solutions through the exchange of viewpoints and ideas. DNP is keenly aware of its mission and its responsibility as a business partner to its customers.

DNP intends to keep solving all kinds of problems for customers by providing valuable products and services, and by offering unique business models as Manufacturing Solutions and Business Design Solutions. By combining printing technology (P) and information technology (I), DNP intends to continue to solve customers' problems and lead them to success.

To down load the 2006 DNP Annual Report, please visit the Company's IR website at http://www.dnp.co.jp/index_e.html

Chairman of the Board, President and CEO Yoshitoshi Kitajima develops these ideas and others in his 2006 Address to Shareholders.

"This term, for the third year in a row, DNP achieved growth to record levels in sales and profits. We believe this demonstrates that we chose the right path by having the entire company pull together as one unit to fulfill our vision of DNP as a "P&I Solutions" provider.

On the other hand, the business environment surrounding DNP remains as harsh as ever: unit sale prices fall while materials costs shoot up, technological development is faster than ever, and alliances cross industry and national boundaries, forcing companies to be more competitive than ever in order to survive.

Throughout our history, we always identified the direction we needed to take in the course of dialogue with everyone who holds a stake in DNP. Even in these times of rapid change, we feel sure that by placing emphasis on taiwa* we can identify problems, provide effective solutions, and create new value and new markets.

In October 2006, we will mark the 130th anniversary of our founding. In every era, we have always run ahead of the pack. At the time of our founding, our slogan was "Business for Civilization." We have been expanding our fields of business based on the conviction that "We can print on anything other than water or air." Today, we are giving optimal form to information that is formless, and actively advancing into the Internet and other digital media. We currently do business with more than 30,000 companies, which is testimony to the extent to which we provide things that are indispensable to corporations and consumers as part of everyday life. Going forward, we want to further expand the fields to which we apply Printing Technology and Information Technology in order to generate new businesses.

We the management of DNP want to enhance the taiwa that we have with all of our stakeholders. We intend to fulfill our social responsibilities and continue to be a trusted company as we aim for sustainable growth.

Record High Sales, Operating Profit and Net Profit

This fiscal year through March 2006, the Japanese economy continued its gradual recovery, evidenced by such signs as increased capital investment backed by improved corporate profits and a solid trend in individual consumption. However, in the printing industry, the business environment remained harsh due to the influence of factors like cost increases accompanying spiking oil prices, and lower unit order prices due to increased competition.

Despite this difficult business environment, we can report to our shareholders that we achieved a third consecutive year of growth in sales and profits, and set new records for corporate performance. Net sales rose 5.8% from the previous year to 1,507.5 billion yen, operating income increased by 0.1% to 120.7 billion yen and net profit increased by 8.8% to 65.2 billion yen. All of these figures represent new record highs for DNP. We also increased dividend payments by 2 yen per share to 26 yen, marking the fourth consecutive term in which we increased our dividend payout.

We believe that we were able to maintain this steady growth because we placed importance on taiwa with each and every customer, discovered each customer's problems, and strove to offer the best solutions to those problems. We worked at getting to know our customers thoroughly through sales activities, developed and combined printing and information technologies, created planning, research and production systems that allow us to offer unique solutions, grappled head-on with the problems of a variety of customers, and cultivated our desire to solve problems.

We believe that the effort we have expended to expand our business in line with our corporate visions - "Business for Civilization," "Expansion Printing," and now "P&I Solutions" - has borne fruit in various ways. Going forward, we intend to further accelerate this growth and do our utmost to attain sustainable growth while fulfilling our social responsibilities.

Accelerating the "P&I Solutions" That Have Already Begun Contributing to Profits

In May 2001, the DNP Group formulated a "vision for the 21st century," and determined a new corporate philosophy of "contributing to the intellectually active, prosperous, emergently evolving society of the 21st century." By an "emergently evolving society" we mean a society in which people with diverse values stimulate each other and create new values as a result. We chose the phrase "P&I Solutions" to express our aim to make the most of our printing technologies (P) and information technologies (I) - two of our strong points - in order to solve a variety of problems for our customers and to go a step further to create new value in this type of an "emergently evolving society."

For many years, we have been applying technologies used in printing to a variety of fields and offering unique solutions that only DNP could provide. Particularly in the last five years as we formulated our new vision, there have been some outstanding examples of success.

For example, since 2001 the use of smart cards as cash cards and credit cards has grown rapidly. There are new solutions that we are able to offer only because in addition to card printing and manufacturing technologies, we have the technology to develop card operating systems and applications such as biometric identification and one-time password authentication, and other technologies that allow us to do things like securely encode digital data and issue cards after registering customer data. DNP currently produces almost all of the smart cash cards issued by Japanese megabanks, and holds roughly 50% of the overall Japanese smart card market.

Examples of our information processing services (IPS) include printing and sending individually tailored promotional information and invoices, etc. for mail-order businesses. This is an example of merging new applications for such technologies as digital data processing, software development, and database management. Our IPS business is growing rapidly, partly thanks to increased demand for fullcolor invoices.

As another example, the aseptic PET bottlefilling system that we developed is indispensable to bottlers' production processes. We are further developing these systems, for example by increasing filling speed and adapting them for hot drinks.

In addition, in the medical field, we recently applied micro-processing technology to capillary regeneration, and we also succeeded in entering the energy field by using coating and other technologies to make solar energy cells and fuel cells. We believe there are still limitless possibilities for developing our printing and information technologies and

applying them to new fields.

These are some of the ways that P&I solutions are making big contributions to DNP's profits, and we fully expect to see further expansion of our business in this area.

Steadily Creating New Business Bases

In order to promote our business vision even more forcefully, we need to further strengthen both our "production" and "business design" functions. Toward that end, we are currently actively engaged in creating new bases.

In the Information Communication segment, we completed construction of our Shiraoka Plant in Saitama Prefecture in 2005, and enhanced our framework for integrated production of magazines. In the Electronics segment, our Kurosaki Plant in Fukuoka Prefecture started producing sixth-generation color filters in July 2005.

In September 2005, we concentrated sales, planning, and production staff from throughout the Kansai region in one location in Osaka's Namba district. At the same time, we combined presentation rooms for C&I, IC Tags, Business Forms, Packaging and Decorative Materials sectors and opened a comprehensive showroom.

In the fiscal year through March 2007, we expect to complete a production base in Mihara, Hiroshima Prefecture, for antiglare film used in thin televisions, and to build a second facility at our Kurosaki Plant in Kitakyushu (Fukuoka Prefecture) to reinforce color filter production capacity.

These are some examples of how we continually create new business bases. We will keep on strengthening our business infrastructure in order to realize dramatic growth in our business and to fulfill our corporate vision."

(Excerpt from the 2006 DNP Annual Report to Shareholders)

To down load the 2006 DNP Annual Report, please visit the Company's IR website at http://www.dnp.co.jp/index_e.html or visit the JCN Network Annual Report gallery at http://www.japancorp.net/reports.asp

About Dai Nippon Printing Co., Ltd.

DNP celebrated the 130th anniversary of its founding in October 2006. Shueisha, the forerunner of Dai Nippon Printing Co., Ltd., was established in 1876 as Japan's first full-scale printing company. The Company later branched out into a variety of fields, including commercial printing, packaging, decorative materials, business forms, electronics and industrial supplies. Today, DNP has established itself as the leader in the world in the field of comprehensive printing. Currently, DNP employs about 35,000 people. In Japan, DNP has 20 division offices in major cities, 49 sales bases, and 37 production plants, while overseas it has another 21 sales offices and seven production plants. The DNP group includes 82 consolidated subsidiaries and 9 affiliated companies that are accounted for by the equity method. For more information, please visit www.dnp.co.jp.

Source: Dai Nippon Printing Co., Ltd.

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