Unitika Mascot Girl
Rina Matsuda.

CONTENTS

Message from the President

On the Publication of Our CSR Report2Management
Notes on FY 2017 ReportCompany Overview
Our Philosophy
Corporate GovernanceInternal Control
CSR Promotion System
Environment, Health, and Safety (EHS) Management
Export Control
Information Security Management
Compliance Promotion
Unitika Purchasing Policy

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CSR Report
Relationships with Clients

Ensuring Product Safety
Quality Assurance Activities
Relationships with Shareholders & Investors

IR Activities
Share Status (as of 30 June, 2017)
Contributing to the Community and the Environment

Community-focused Initiatives
Preserving the Environment and Biodiversity
Disaster Prevention & Readiness Efforts
Concern for Our Employees

Personnel System
Human Resources Education
Employee Mental Health
Equal Opportunity
Promoting Awareness of Human Rights
Safety & Health Activities
Asbestos Removal

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Environmental Report
Basic Environmental Policy
History of Environmental Preservation Activities
Medium-Term Environmental Plan
Reducing Air and Water Pollution
Promotion of Waste Disposal of Devices that Contain PCB
Handling of Chemical Substances
Logistics
Environmental Complaints
Overview of Environmental Impact
Environmental Accounting
For Life on Earth Tomorrow
Let’s Learn about Ecology for the Sake of the Planet!

Biomass Materials (Polylactic Acid)
Biomass Materials (High Function Plastic)
Recycled/Environmentally-Friendly Materials
Energy-Saving Materials
Production Site Information

Contents
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Message from the President

On the Publication of Our CSR Reporteducation at evening high schools or evening two-year colleges
from the mid 1950s, while today we have established a system ofvarious in-house education and training programs for fostering
human resources.
As for the utilization of human resources, the ratio for the recruitmentof people with disabilities is 2.46% (as of the end of March 2017) as
reported in the CSR report, which is a high standard compared toother companies. This is a result of our active efforts across all theoffices and we believe it was realized thanks to the foundation we
have as a company where various human resources can play activeroles.
Moving forward, we will continue to cultivate our culture of“diversity” throughout the entire group, to establish a corporate
culture that allows diverse human resources to utilize their various
skills to produce results.

Amagasaki Spinners Ltd., the company of our origin, was foundedin 1889, and played a role in establishing the foundation of Japan’s
modern industry. Today, in addition to our roots in the textile industry,
we have expanded our business globally as a manufacturer offunctional materials that range from a polymer business area
composed of films, resins and nonwoven fabrics, to an advanced
materials business area composed of glass fibers, glass beads andactivated carbon fibers. We have transformed these into operations
that each have distinctive characteristics.
Amagasaki Spinners was founded to save the former feudal
retainers from impoverished circumstances after they lost theirstipend due to Haihan-chiken (the abolition of feudal domains andthe establishment of prefectures), as well as to revitalize the Amagasaki region through establishing a new industry. As shown in thereasons for our foundation, we have always believed that the
purpose and significance of our activities lies in our contribution tosociety through various business activities.
Through our management philosophy of “contributing to society byconnecting people’s lives and technology”, we are proud to havedevoted ourselves to technological development that matches thecurrent of the times, thereby providing new products and services
that contribute to people’s lives to support their enrichment.

Measures to Prevent Misconduct Recurrence
We received an on-site inspection on March 1, 2016 by the Fair
Trade Commission after being suspected of violating the Antimonopoly Act regarding bidding for textiles made of nonflammablevinylon or vinylon ordered by the Acquisition, Technology &Logistics Agency. Although we thoroughly cooperated with theinvestigation conducted by the aforementioned commission, we
received a cease and desist order and a surcharge payment orderby the commission on March 10, 2017 according to the Antimonopoly Act.
The Unitika Group has been working on the development of ourgovernance system, the improvement of the corporate culture andentrenching compliance in response to compliance problems within
the group, however, this incident shows our efforts were notenough.
By taking this matter very seriously and sincerely, the Unitika Grouphas been implementing measures to prevent any recurrence in all of
our companies.
We have been implementing a variety of measures for each groupcompany and all our employees, in line with the philosophy thatcultivating a corporate culture that does not allow acts of dishonesty
is the best way to entrench compliance. This has been done
through revisions of the group governance compliance system, theclarification of our responsibilities through changes in the organization, the centralized management of information and the enhancement of our auditing capabilities.
Again, as a company that is “contributing to society by connecting
people’s lives and technology”, we will regain your trust and contribute to the development of society even further with thoroughly
entrenched compliance.
Thank you very much for your continuous understanding andsupport.

Medium-term Management Plan
For our medium-term management plan that started in fiscal 2014,
we have aimed to reform the business portfolio and achieve theearly realization of our development strategies through striving
towards the strengthening of our foundations as a manufacturer offunctional materials centered on the polymer business area, while
also implementing each initiative to improve our profits. As a result,most of our key initiatives were achieved according to the plan, andour financial situation has improved 1 year ahead of a schedule.
In order to strengthen the basis of our development for further
progress, from fiscal 2017 onward we have established the new
mid-term management plan ““G” round 20 - to The Next Stage”,
with the 3 pillars of “G”: Growth (development and nurturing), Global(internationalization) and Governance (corporate governance).
Fiscal 2019, the last year of the new medium-term management
plan, marks the 130th anniversary of our foundation as well as the50th anniversary of the beginning of Unitika. For this milestone wewill establish the foundation for our future development, with these 3“G”s at the core to depict the image of our corporate group.

Fostering of Human Resources and Utilization ofDiverse Human Resources
We uphold human resource strategies as one of our most importantmanagement strategies, in order to contribute to society throughvarious business activities. This means “to utilize the skills andperspectives of various human resources”, in other words,“diversity”. Since our foundation we have had a culture of recognizing the importance of fostering human resources and turning it into
action, such as through providing school education to our employees and their children.
From the time of our foundation until the early 1920s, certified
private primary schools were located either within the factory or
inside company housing. After the mid 1920s the educational
system expanded, so these primary schools were either closed or
donated to each region as it was decided that they had fulfilled theirroles. However, in-house education was not abolished and remedial
educational programs for basic subjects, as well as liberal arts
subjects for speaking, manners, sawing, flower arrangement andabacus, continued to be passionately taught at dormitories.
Our basic philosophy for education has been consistently
maintained, with most of the dormitory residents having received

President Chief
Executive Officer

Message from the President / On the Publication of Our CSR Report2Management

Notes on FY 2017 Report
Release History and Period Covered
We have released the Unitika Environmental Report once a year since 2002. In 2006, we expanded its content to include CSR
activities and interactions with stakeholders. The target period of this report is fiscal 2016 (from April 1, 2016 to March 31,2017), however, reports on some items are based on data after April 1, 2017.

Reference Guidelines
This report refers to the Environmental Report Guidelines issued by the Ministry of the Environment.

What This Report Covers
This report in principle covers activities by Unitika, Ltd. and the Unitika Group companies, both in Japan and overseas.
However, the Environmental Report only covers the following range of items.

Unitika Production
Sites in Japan

On-Site Group Companies

External Domestic Group Companies

Uji Plant

Ad'all Co., Ltd.

Osaka Dyeing Co., Ltd.

Okazaki Plant

Nippon Ester Co., Ltd.

Terabo Co., Ltd.

Sakoshi Plant

Unitika Glass Fiber Co., Ltd.

Union Co., Ltd.

Tarui Plant

Unitika Plant Engineering Co., Ltd.

Unitika Sparklite., Ltd.

Tokiwa Mill

Unitika Trading Co., Ltd.

Unitika Spinning Co., Ltd.

Central R&D
Laboratories

Unitika Textiles Ltd.

Release Date and Format
This report has been available for viewing on the Unitika website in October 2017. Since the inception of this report in 2002,
Unitika has sought to minimize environmental impact by releasing it only on the website and not in paper format. The nextreport is scheduled for release in October 2018.

Terminology used in this report
CSR : Corporate Social Responsibility.
Stakeholders : Customers, shareholders, suppliers, society, local communities, employees, and other individuals and organizations that havevested interests in a company.
Corporate governance : Decision-making methods designed for the sound operation of a company
Compliance : The observance of laws and corporate ethics.

Notes on FY 2017 Report3Management

Company Overview
Name: Unitika Ltd.

Number of employees (consolidated): 3,671 (as ofFounded: June 19, 1889

March 31, 2017)

Capital: 100,450,000 yen

Sales (consolidated): 126.2 billion yen (FY 2016)

Osaka Headquarters

Main business areas (consolidated): Polymer businessOsaka Center Bldg., 4-1-3 Kyutaro-machi,

area: Manufacturing and sale of films, resins andChuo-ku, Osaka, 541-8566 Japannonwoven fabrics

Tokyo Head Office

Advanced materials business area: Manufacturing and sale

Nihombashi-Nichigin Dori Building, 4-6-7

of glass fiber products, glass beads and activated carbon fibers

Nihonbashi-Hongoku-cho, Chuo-ku,

Fiber business area: Manufacturing and sale of various fibers

Tokyo 103-8321, Japan(threads, cotton, woven or knit fabrics etc.)

Central Research Laboratory

Other: Design, construction management and facility

23 Uji-Kozakura, Uji-shi, Kyoto, 611-0021 Japan

maintenance of various plants

Sales Share of Each Business Unit
(FY 2016, Consolidated)

Sales(Consolidated)(Millions of yen)

200,000

Other
2.8%

150,000
100,000

Polymers
43.6%

50,000
0

'12

'13

'14

'15

Sales:
126.2
billion yen'16 (Fiscal year)

Fibers44.0%

Operating Profit (Consolidated)(Millions of yen)

12,0009,000

Environmental/
advanced materials
9.6%

6,000
3,000
0

'12

'13

'14

'15

'16

(Fiscal year)

Unitika received an on-site inspection on March 1, 2016 by the Fair Trade Commission after being suspected of violating the
Antimonopoly Act regarding the bidding of textiles made of nonflammable vinylon or vinylon ordered by the Acquisition,
Technology & Logistics Agency. Although we thoroughly cooperated with the investigation conducted by the
aforementioned commission, we received a cease and desist order and surcharge payment order by the commission on
March 10, 2017 according to the Antimonopoly Act.
The Unitika Group has been implementing measures to prevent a recurrence of misconduct. We are taking this matter very
seriously and sincerely, and will strive for the prevention of recurrence with even further entrenched compliance.

Company Overview
4

Management

Our Philosophy"Contributing to society by connecting people's lives and technology"
Upholding history and supporting the present as we look to the future.
Unitika - a company of the future.
Unitika started out as a spinning company during the beginning of modern Japanese industries in
1889, and is transforming itself into a global company group centered on polymer technology thatprecisely understands the needs of the present and the future as it continues to evolve as afunctional materials manufacturer.
Our philosophy to contribute to people’s lives and support their enrichment through technology has
been ever present amidst rapidly changing social situations and environmental issues, and it will
never change.
Our role is to produce daily products and materials that substantially improve the quality of industrial
activities and infrastructure development, and to create a product group that leads to the future thatwill come from all of these.
Through our materials used for parts of life that are sometimes not visible, or through products that
directly connect with your lifestyle, we continue to provide reliable solutions to life in the present andthe future, as well as for the planet.

Corporate Governance
Basic Policy
Through our management philosophy of contributing to society by connecting people's lives and technology, we at the Unitika
Group aim to be a company with a clear social presence. We have worked to achieve stakeholder-focused management by
pursuing governance strategies that include the enhancement of legal compliance and risk management and the timely andappropriate disclosure of information, and the implementation of rapid decision making.
Corporate governance will continue to be a key component of our corporate management activities.

Structural Overview
Unitika’s Board of Directors is comprised of 7 directors (including 2 external directors) and 4 auditors (including 2 external
auditors). At Unitika, we apply the executive officer system to clarify the operational decision making/supervisory (governance)
functions and the business execution (management) functions. In order to enhance the mobility and effectiveness of the
management, we promote cooperation between the directors and the executive officers, while most of the directors also serveas the executive officers with some exceptions.
In addition, the Board of Directors is positioned as the “governance function” organization that is specialized in decision
making and supervision. We have also set up the Management Council, which is comprised of all the directors, to deepen the
directors’ discussions on basic policy and issues of general management, as well as for early identification of management
issues, efficient and speedy decision making for policies regarding measure planning and the timely implementation of
measures. The Code of Authority regulates the authorization for the execution of business, while matters that are especially
important are carefully examined and considered at the Management Council before the decision making is conducted at theBoard of Directors.
As for the internal control system, we mainly collect information from inside the company and the group at the Risk
Management Office. We have also set up the compliance committee, for which the President serves as chairman, as well asinternal and external whistleblower contact points, that allow us to deal with such matters in a timely manner. Furthermore, we
strive for the awareness of compliance through distributing the Unitika Charter of Corporate Behavior and the Unitika Action
Standards to all of our executives and employees of the group, while conducting training accordingly.
Unitika regulates Basic Policy for Internal Control based on Companies Act and the Financial Instruments and Exchange Act,as well as setting up the compliance/risk management system led by the Risk Management Office and various committees.
Under the Financial Instruments and Exchange Act, internal controls for financial reporting is dealt with mainly at the Audit
Office, while internal control regarding offices are set up at our key business branches in order to establish the corporate
framework for internal controls.
Our Philosophy / Corporate Governance5Management

Internal Control
Basic Policy

Unitika's Basic Policy for Internal Control (Item Headings)

Under the Companies Act, Ordinancefor Enforcement of the Companies
Act and Financial Instruments andExchange Act, Unitika has created asystem that ensures the adequate
operation of our company and group,
as well as the trustworthiness of our
financial reports, as follows.

1. Organization to ensure that the execution of job duties by directors and employees complies
with all applicable legislation and the Articles of Incorporation
2. Items pertaining to saving/managing information on directors' execution of job duties
3. Regulations on loss hazard management; other organizational elements
4. Organization to ensure that execution of directors' job duties is performed efficiently
5. Organization to ensure suitability of operations done by corporate groups
5-1. Items regarding reports to Unitika in relation to the execution of duties by directors of ourgroup companies
5-2. Regulations and other systems regarding the risk management for loss at our groupcompanies
5-3. System that ensures the efficient implementation of the execution of duties at our groupcompanies
5-4. System that ensures the conformity of the execution of duties by directors and employees
of our group companies with laws, regulations and articles of incorporation
6. Organization to secure the reliability of financial reports
7. Items pertaining to the organization for employees, and to their independence from directors,
when auditors ask for the appointment of employees to act as assistants
8. Items regarding the independence of the audit staff from directors
9. Items that ensure the effectiveness of the instructions given to the audit staff
10. Organization for reporting to auditors
10-1. Organization for directors and employees to make a report to auditors
10-2. Organization for directors, auditors and employees of our group companies, or those
who received a report from them, to make a report to the auditors of our company
11. Organization that ensures the fair treatment of people who make a report to the auditors
12. Items regarding the procedures for the advanced payment or reimbursement of theexpenses arising from the performance of duties of the auditors or the policies regarding theprocessing of other expenses or debts arising from the performance of duties of the auditors
13. Other organizational elements to ensure that auditing by auditors is performed effectively

Organization
The diagram below shows the organization used for corporate governance, and to ensure fair corporate activities. The basic
elements correspond to Unitika's Basic Policy for Internal Control (outlined above). This organization is used to strictly enforce
internal control-compliance, information saving/management, risk hedging, export control, increasing the execution efficiency
of director job duties, and ensuring the suitability of operations.

Organization
General Meeting of Stockholders
Submission of a bill

Nominating Committee
Remuneration Committee

Appointing/terminating

Board of Directors(Seven)(Including two outside auditors)*2 external members are
Consultation
independent officers
ProposalAuditing

ReportingManagement Council(All directors)

Deliberation

Appointing/terminating,
instructions* Discusses important issues.

Appointing/terminating,supervision

Deliberation
Execution ofdutiesReportingBoard of Auditors(Four)(Including two outside auditors)
Determining suitability*2 external members areof accounting auditing,independent officers

Representative Director and President, Chief Executive Officer
Representative Director and Senior Managing Executive Officer
Representative Director and Managing Executive Officer

Auditor staff
Reporting

Reporting

Risk Management OfficeInstructions

Promotion

Executive office, etc.

Main Committees
Risk Management Committee / Compliance Committee
Export Control Committee / Environment Committee
Central Committee on Product Liability
Information Security Committee
Central Safety and Sanitation Committee
Central Disaster Readiness Committee

Business departments, Group companies

Internal Control
6

Accounting
Auditorwitnessing auditing

Auditing(Chief Compliance Officer)

Executive Officers(Ten)(Including five executive
officers also acting
as directors)

Appointing/terminating

Appointing/terminating
ReportingManagement

CSR Promotion System
Unitika’s Risk Management Office is an organization created to promote and oversee all CSR activity areas, such asenvironmental awareness, safety measures, compliance and risk management.
We have established a management system consisting of various committees and business divisions that support the Risk
Management Office in promoting CSR initiatives.
Priority initiatives include those aimed at ensuring (1) the promotion of compliance, (2) environment, health, and safety (EHS)
management, (3) product safety, (4) export control, and (5) information security management.

Organization of the CSR Promotion System

President
Risk Management Office

Risk Management
Committee

Compliance
Committee

Environment
Committee

Central Safety andSanitation Committee

Central Committee
on Product Liability

Export Control
Committee

Information Security
Committee

Environment, Health, and Safety (EHS) Management
Unitika’s Environment Committee and Central Safety and Sanitation Committee are organizations created to oversee
environmental management, and health and safety management. The Environment Committee’s main functions are examining
basic plans on environmentally aware business and verifying their progress, discussing reports of results of environmental
audits of production sites and Group companies done by the committee secretary, and discussing other major items related tothe environment. The Central Safety and Sanitation Committee discusses measures to prevent work-related accidents andother accidents/disasters, and discusses other major items related to health and safety. These two committees are higher-level
organizations that oversee the Environmental Safety Groups of individual Unitika production sites and Group companies. They
play an important role in specifying and compiling Group policies when lower-level organizations propose and implement
measures reflecting their own unique circumstances.

Export Control
In the Unitika Group, export control managers appointed at our business sectors and group companies carry out the
management of the daily export operations under the Export Control Committee chaired by a director, based on the Export
Control Regulations. The committee administration supervises the situation while sharing information among the managers
regarding the management status within the group, as well as trends for the revision of laws and regulations, through the
manager conference held regularly. Also, in order to promote the acquirement of accurate information by our employees, we
disseminate information using the intranet and conduct training for each position in the group.

Information Security Management
Unitika set forth its “Information Security Declaration” establishing a management/operation system centered around theInformation Security Committee in order to outline approaches to ensuring the protection and effective use of personal information
received from users and of information obtained in the course of doing business. Unitika also strives to prevent accidents in ourdaily business operations through the enhancement of security devices against threats and risks, including targeted attacks, by
raising awareness through in-house education.

Unitika Information Security Declaration (Preamble Omitted)
1. We will take steps to ensure the security of information as set forth by our Information Security Policy.
2. We will create an information security management organization, and implement it in a systematic manner.
3. We will educate and train our directors and all employees on our Information Security Policy, working toprevent information security accidents.
4. We will work on improving our information security measures on an ongoing basis.
5. We will comply with all personal information protection laws and all relevant statutes and standards.
'Information Security Policy' refers to the documentation set forth and managed by the information Security Declaration, Basic Policy on Information Security,
Standards for Information Security Measures and Information Security Implementation Procedures.

CSR Promotion System / Environment, Health, and Safety (EHS) Management
Export Control / Information Security Management
7Management

Compliance Promotion
In 1998, Unitika instituted the Unitika Action Charter.
Moreover, as a company that contributes to people's lifestyles and the environment
while carefully ensuring legal compliance, Unitika distributes a booklet of thesestandards to all Unitika Group directors and employees, so that they can put theminto action.
In FY 2011, additions were made to the standards in compliance with internationalrules prohibiting inhumane acts—forced labor, child labor and human trafficking.
We work to ensure that all employees are aware of compliance and that it is firmly
established by making it a component of all promotional training and new employee
training.

A compliance training session

Unitika Charter of Corporate Behavior
The Unitika Charter of corporate
behavior is our basic policy on
how best to fulfill our mission as apublic-spirited corporation.
It applies to all directors andemployees of Unitika and Unitika
Group companies.

The Unitika Charter of Corporate Behavior is a set of guidelines on how to act
for the public good by complying with laws and international standards and guidelines.
1.UNITIKA, by the development and provision of socially beneficial goods and services in a safe and responsible
manner, shall strive to earn the confidence of their consumers and customers.
2.UNITIKA shall promote fair, transparent, free competition and sound trade. They shall also ensure that theirrelationships and contacts with government agencies and political bodies are of a sound and proper nature.
3.UNITIKA shall engage in communication not only with shareholders but also with members of society at large,
including active and fair disclosure of corporate information.
4.UNITIKA shall strive to respect diversity, individuality and differences of their employees, to promote safe andcomfortable workplaces, and to ensure the mental and physical well-being of their employees.
5.UNITIKA shall respect the culture and customs of other nations and strive to manage their overseas activities insuch a way as to promote and contribute to the development of local communities.
6.UNITIKA shall reject all contacts with organizations involved in activities in violation of the law or accepted
standards of responsible social behavior.
7.As a ''good corporate citizen,'' UNITIKA shall respect fundamental human rights and actively engage inphilanthropic activities, and other activities of social benefit.

Whistleblower Contact Points

Unitika's Whistleblower Contact Points

We have put into effect a set of ‘whistleblower protection’ (internalreporting) regulations, and have set up two reporting contact
points (one inside, one outside the Company) to enable employees
to immediately report any malfeasance or illegal activities theyencounter. We thoroughly establish the compliance of the wholegroup, mainly through the Compliance Committee chaired by thepresident.
The regulations include provisions to protect whistleblower privacy
and prohibit prejudicial treatment of them for making a report.

Contact point 1

Contact point 2

Unitika Compliance Line

External Legal
Help Line

Contact point :Risk Management Office

ReportingInstructions

Reporting

Reporting/consultations
Feedback

Instructions
Reporting/consultations

Compliance Committee
Committee chairman:
Unitika President

Feedback

All employees working for Unitika Group

Harassment Consultation Services
We have set up a help desk at each office and group company regarding harassment atwork, such as sexual harassment, power harassment, harassment in relation topregnancy, childbirth, parenting and nursing care including maternity harassment, inorder to detect and resolve harassment at an early stage.
The Guidelines Regarding the Prevention of Human Rights Violation such as Harassment
at Unitika Group was established in 2012, and was revised in December 2016.
As we broadly strive toward the prevention of harassment and the establishment of aworkplace where all our employees can work comfortably, we have added the statementsthat sexual harassment cannot be allowed regardless of the victim’s sexual orientation andgender identity, and that it is considered as sexual harassment if there is any
nonconsensual sexual statements or action, even if it is between people of the same sex.

Compliance Promotion
8

A harassment training session

Management

Unitika Purchasing Policy
Purchasing Policy
Unitika purchasing departments will engage in transparent, fair procurement practices that meet personal and community
standards. They will uphold the Company’s duty to engage in responsible procurement activities, placing emphasis on CSR
activities.

1. Legal Compliance
When executing purchasing activities, the Company will comply with laws and community standards,
engaging in transparent, fair procurement activities and aiming to be a good corporate citizen.

2. Harmony With Environment
When procuring products or services, the Company will value environmental awareness and the preservationof safety, endeavoring to purchase products and raw materials of low environmental impact.

3. Respect for Human Rights; Improving Working Environments
When engaging in purchasing activities, the Company will respect human rights and ensure that all
forms of prejudice are eliminated when work is executed. The Company will make efforts to ensure healthand safety, and to improve work environments.

4. Partners (CSR Aspects)
The Company will aim to create better partnerships, and ask partners to:
A. Comply with legal and community standards
B. Respect human rights; value efforts to improve working environments
C. Work on activities to preserve the environment and to ensure safety
D. Endeavor to ensure appropriate quality/prices and reliably on-time delivery, and to maintain and improve
products and services

Unitika

TOPICS

Unitika Textiles Ltd. participated in thefire extinguishing skills training contest!
2 teams (2 people each, male and female) from the Tokiwa Mill of Unitika
Textiles Ltd. participated in the annual Fire Extinguishing Skills Training
Contest organized by the Soja City Fire Prevention Association and the Soja
City Fire Fighting Headquarters on October 6, 2013. 14 teams from various
offices located in Soja City participated in each male and female section for
the 19th contest, and competed with each other regarding the basic
handling of fire extinguishers and handling techniques. Unfortunately our
Tokiwa Mill teams did not win, however it did contribute to the improvementof fire prevention awareness, not only among the participants of the contest
but also at the whole mill, thanks to the technical instructions provided by
the former participants and local fire corps volunteers at the mill.

Unitika Purchasing Policy
9CSR Report

Relationships with Clients
Through our product liability and quality assurance efforts, Unitika strives constantly to improve product safety andquality of our products maintaining customer satisfaction as our first priority.

Ensuring Product Safety
Unitika has established product safety management regulations designed to ensure that we always offer safe products to ourcustomers. Unitika's product safety management regulations contain detailed provisions on areas such as basic policy,
responsibility areas, implementation systems, and bylaws on the implementation and application of manual procedures.
Unitika and Unitika Group companies work to ensure that product manufacturing and sales are carried out safely, incompliance with these regulations. The chart below details promotional system, headed by the Central Committee on Product
Liability, for ensuring product safety.

Central Committee on Product Liability
Work areas

Committee members

Creating basic policy pertaining to product safety
Summarizing the results of product safety inspections
Keeping employees informed on product safety issues
Support for the activities of the chemicals management
working group

Members include the head of each businessdivision, directors in charge of each business area,and directors in charge of management.

Product Liability Review Board
Established in each business department, section and business unit. The
relevant division head appoints the committee chairman and secretariat.
Main work areas
Committee members
Department (office) heads incharge of production/technology,
department (office) heads incharge of sales, and members
appointed by the division head.

Product
Liability
Review
Board

Product
Liability
Review
Board

Product
Liability
Manager

Product
Liability
Manager

Reviews pertaining to safety issues in
product designs/specifications,manufacturing and distribution
Reviews pertaining to product displays
and warnings
Creating product safety standards andsubmitting revisions or deletions

Product Liability Manager
Appointed by each division head in line with the type of business
Main work areas

Investigating and checking health and environmental effects of product handlingand useCreating and reviewing product handling cautions for display on productcontainers, wrapping and tags
Creating and distributing product safety data sheets

Product Safety Record for Fiscal 2016
No product liability–related incidences occurred.
*Information on the claims which may bring about an accident is shared by the Central Committee on Product Liability andsuch information is used to prevent from repeated claims.

Quality Assurance Activities
In order to satisfy customer's demands on our products, the Unitika Group is pursuing quality management system
certification. We are constantly improving our quality assurance activities based on ISO9001 standards for quality
management systems.

Ensuring Product Safety / Quality Assurance Activities
10

CSR Report

Relationships with Shareholders & Investors
Seeking to pursue a stakeholder-oriented business style, the Unitika Group strives to create several opportunities to enable
timely information disclosure to shareholders and potential investors. The Unitika Group implements activities to ensure
these opportunities run smoothly, and works to augment dialogs with shareholders and potential investors.

IR Activities
Ordinary General Stockholder Meetings
Held every year in late June. Outlines the latest business conditions and gives shareholders an opportunity to dialog,
seeking to provide a better understanding of the Company’s current management environment and policies.

Announcements of Financial Statements & Explanatory Sessions
Unitika conducts a variety of financial data disclosure activities, including twice-yearly second quarter and full financial
year accounting statements for the press, both of which are followed a week or so later by explanatory session geared
toward institutional investors and analysts.

Institutional Investor Visits
Unitika representatives make visits to institutional investors and analysts in order to provide more specific information as needed.

Publications• Financial Flashes (4 times annually, in May, August, November, and February)• Stockholder Reports (2 times annually, at second quarter and full year closing)• Corporate Guides

Website Disclosures
Unitika’s website contains the Investor Relations page for shareholders and potential investors that discloses IR
information and press releases on products and services. There is also an archive of past short-form financial statements,
IR briefings materials and securities reports.

Share Status (as of 30 June, 2017)
Total Number of Shares Issued :Number of Shareholders :Common shares

577,523,433

Common shares

44,921

Class A shares

21,740Class A shares

1

5,759

Class B shares

2

Class B shares*The number of shareholders is calculated from the shareholders
list from March 31, 2017.

Unitika

TOPICS

Terramac received the 6th Biomass Products
Promotion Contribution Award
This award is the result of our spinning stretching technology for synthetic fiber todevelop a 3D printer filament that is virtually clog-free and has consistent extrusion
while featuring a perfect cross-sectional circle shape and flexibility thanks to thefilament’s robustness.
Unitika will further enhance the polylactic acid processing technology we have cultivated, and strive towards the promotionof biomass materials by undertaking active initiatives in new, fast-growing technology fields such as 3D printers.

IR Activities / Share Status
11

CSR Report

Contributing to the Community and the Environment
The Unitika Group is seeking to protect the environment, preserve biodiversity and ensure solid educational opportunities
for children by disseminating information on a wide variety of topics ranging from local beautification drives and disasterreadiness programs, to woodland conservation and educational aid in developing countries.

Community-focused Initiatives
ECO Kyoto
Eco Kyoto 21 is a system run by Kyoto prefecture to certify and register production sites that play aleading role in environmental preservation or local recycling efforts. Unitika's Uji Plant is participatingin the system, and in 2004, was certified and registered in the system's Ecostyle category for
production sites and organizations engaging in highly original environmental awareness activities.

Participation in
Local Beautification Activities
As part of their efforts to give back to the community,
Unitika production sites actively take part in environmental
beautification drives to clean up their surroundings.
At the Okazaki Plant, about 80 volunteers clean the areaaround the plant on the second Thursday of every month.
100 employees participated in the River and Ocean
Cleaning Project and cleaned up the Yahagi River withlocal volunteers on Sunday, October 23, 2016.
At the Uji Plant, cleaning of the surrounding area wasconducted twice a year through the project called the
Clean Uji Initiative. In fiscal 2016, the clean-up was
carried out three times (Thursday, July 7, Thursday,
September 8, and Friday, March 3) with the participationof 729 employees in total.
In addition to our regular beautification activities, theemployees at the Sakoshi Plant participated in thecleaning of the surrounding area, as well as the cleaningof the central city area, as initiated by the members of thechamber of commerce as a part of the Ako Clean-up
Project on Tuesday, May 30, 2017 (Zero Waste Day).
At the Tarui Plant, the cleaning of the Aikawa Waterside
Park in the surrounding area was carried out on Saturday,
May 14, 2016, and the cleaning of the front area of theplant was carried out after the training seminar held byUnitika Union on Wednesday, March 22, 2017.
At Unitika Textiles Ltd., strawberry picking event wasorganized by the company and the union on Sunday, May
21, 2017. Participants walked to the venue on foot while
picking up garbage. 25 people participated including theemployees’ families. They collected two bags of garbage
on the way to the venue, which took them about an hour.
We will continue to implement cleaning activities for local

Volunteers from the Okazaki Plant taking part in a local cleanup drive

The Uji Plant’s cleanup drive

The Sakoshi Plant’s cleanup drive

The Tarui Plant’s cleanup efforts in Aikawa Waterside Park /Cleaning activities at the front area of the plantcommunities.

Garbage collecting activities at Unitika Textiles Ltd.

Community-focused Initiatives
12

CSR Report

Preserving the Environment and Biodiversity
Participation in Biodiversity Declaration
Unitika has endorsed the Declaration of Biodiversity released by KEIDANREN(Japan Business Federation) in 2009, and ispartnering with it in promoting the declaration. The declaration contains seven principles covering areas such as harmonizing
business activities with natural cycles, and promoting business oriented to these cycles. Unitika’s business activities aredesigned with an awareness of biodiversity.

Unitika no Mori ('Unitika Wood') Project
Unitika’s labor union, Unitika Union, established a volunteer fund in 1992 to develop a variety of domestic and international
support activities. As a project that commemorates its 30th anniversary in 2003, Unitika Union started the Midori no Plan('Green Plan') with the purpose of social contribution and environmental protection in Japan.
For the Midori no Plan, we planted Japanese chestnut oaks, konara oaks and Japanese cypresses in a 2 hectare area ofmountain forest that has been named Unitika no Mori, located in Hidakagawa-cho, Wakayama Prefecture. Several times a year,
Unitika employees visit the site to maintain the forest by clearing underbrush and pruning branches. These activities havebeen officially recognized by Wakayama Prefecture as 'an effort that contributes to CO2 absorption through forestation'. It is
expected to result in about 800 metric tons of carbon dioxide absorption over the next 100 years.
In September 2016, 27 of our employees joined the Midori no Plan training program and learned about the importance ofenvironmental preservation through being surrounded by nature. More than 420 people participated in the project in total.

Unitika

TOPICS

Receiving an award for being an excellent officefor the recruitment of people with disabilities
Unitika was awarded as an excellent office for the recruitment of people with disabilities
at the Recruitment Fair for Elderly People and People with Disabilities 2016 held by
Osaka Institute Employment Development Association on October 13, 2016.
This is due to our achievement of recording the all-time highest recruitment rate of 2.72%, which significantly exceeds therate regulated by the law (2.0%), at all companies of Unitika Ltd. in fiscal 2016. It was also due to Unitika maintaining ahigher rate than the legal rate for several years.
We have been continued to maintain a high rate up to now, as the recruitment rate was 2.46% as of March 31, 2017. Unitika
will keep making efforts in regard to the recruitment of people with disabilities.

Preserving the Environment and Biodiversity
13

CSR Report

Disaster Prevention & Readiness Efforts
To prepare for major disasters like the earthquake and tsunami that devastated Tohoku in March 2011, disaster readinessmeasures are crucial both to fulfill the basic mission of protecting the lives of employees as well as to uphold the responsibility
to stakeholders of continuing business activities. In compliance with Japan’s Act for Promotion of Renovation for
Earthquake-Resistant Structures, the Unitika Group inspects structures and facilities of production sites. We also work to create
self-supporting emergency energy supply systems by providing for home generation facilities and working on production siteenergy conversion.

Disaster Readiness Training
The Unitika Group works on creating systems to prevent production accidents and accidents damaging surrounding areas,
while actively promoting training to prepare for accidents and natural disasters. To make internal standards for managing
safety at production facilities, Unitika has established a set of "pre-evaluation policies" on safety sanitation and environmental
effects at new facilities. As a disaster readiness measure when creating or renovating facilities, a total of two rigorous
inspections (during design and upon completion) are carried out in compliance with these standards.
At the Okazaki Plant, 400 employees participated in a large-scale integrated emergency drill on the “Disaster Drill Day at
Plants”, Friday, November 18, 2016. In addition to evacuation drills in preparation for an earthquake, drills in preparation for avariety of troubles including the outflow of chemicals, fire breakouts, confinement and the cardiopulmonary arrest of
employees were carried out through cooperation between the headquarters for disaster control and the locations.

Integrated emergency drill (Okazaki Plant)

Emergency evacuation drill/
Earthquake experience (Tarui Plant)

Emergency drill (Uji Plant)

Hydrant water-discharge drill(Tarui Plant)

Emergency evacuation drills (Unitika Textiles)

Other Unitika production sites also carry out training in line with fire prevention campaigns held in spring and fall. At the Uji
Plant, individual departments train in areas such as reporting, communicating, seeking refuge, aiding victims andextinguishing small fires. A total of 749 employees took part in FY 2016. At Tarui Plant on Monday, November 7, 2016, an
emergency evacuation drill was conducted for an earthquake for 139 employees and 39 employees in total experienced thereenacted past earthquake on the earthquake experience vehicle. In addition, hydrant water discharge training was
conducted on Tuesday, April 25, 2017. Unitika Textiles Ltd. conducted an evacuation drill at each department of Tokiwa Mill inJune 2017. Considering that a magnitude 3 earthquake was observed near Tokiwa Mill when the central Tottori earthquake
occurred in October 2016, the drill was conducted based on the assumption of a large earthquake occurring, with our
employees evacuating to the initial evacuation area after securing their safety by protecting themselves under the desks etc.
After the roll call, the person in charge of each department gave a talk on the evacuation route, the storage of evacuation
supplies and how to deal with emergencies at home and so on. We conducted an emergency evacuation drill in preparation
for an earthquake on Tuesday, October 25, 2016 at Osaka headquarters.

Preparation for large-scale disasters
Unitika established the Protocols for Returning Home which encourages our employees to stay in their worksites in case of
public transportation such as trains gets interrupted due to large-scale disasters, in order to prevent them from having
problems during their return home, or to prevent them from obstructing the operations of police officers and fire fighters. We
are also carrying out initiatives such as storing disaster equipment, supplies, drinking water and preserved food. We alsoestablished a system that allows us to handle requests for support from the people of local communities and local
governments.
Disaster Prevention & Readiness Efforts
14

CSR Report

Concern for Our Employees
Unitika's personnel system is designed to encourage employee self-actualization. We provide equal employment andwork opportunities, and make every effort to create accommodating workplace environments.

Personnel System
Unitika’s personnel system is designed to encourage employees to develop their careers and improve their abilities. It offers
several different educational programs to enable employees to work on their personal growth with a high degree of motivation
and an ambitious mindset. These programs are offered systematically and continuously to enable organizational growth andboost corporate competitiveness.

Personnel Rotation System
Unitika’s personnel rotation system is designed to enable systematic education of the human resources needed for theongoing running of organizations in accordance with the job level of each individual. It is designed to enable the careerdevelopment of each employee, to create synergy among organizations and to lead to better business opportunities andcorporate performance. Employees self-report the positions they want to be posted to, which are considered along with theneeds of the Company, providing the best possible understanding of expected employee roles and ability development goals,
and enabling more effective operations.

Evaluation System
Unitika’s evaluation system is designed to provide a more accurate understanding of the roles employees expect to occupy,
and to provide more impartial evaluations of the individuals producing the results needed to fill those roles. Employees are
given yearly performance evaluations that rate them based on their competency, ability, role improvement, attainment of
results, and job execution processes. They are also given twice-yearly performance evaluations in accordance with theCompany’s target management system. These evaluations form the core of an evaluation system that helps ability
development and education of each employee, is linked to pay raises, promotions and bonuses, and enables reliable
feedback through discussions of evaluation results with superiors.

Human Resources Education
Unitika provides our education system with the philosophy that raising the skills standards of all our employees leads to thestrengthening of the foundations of the organization. We consider OJT based on the career paths of employees as the core ofhuman resource development, and have established a system that more efficiently provides follow-ups for early-career
employees, as well as education and support for managers. For the OFF-JT, we have enriched the programs for the
improvement of management skills through position-based training, while increasing the “function-based education” options
such as a sales group, a technology development group, and a manufacturing group. Unitika will continuously implement the
global human resource development program that contributes to the promotion of our overseas businesses according to theplan. We will also foster a global mindset, intercultural communication skills and language skills in our employees.

Training Programs for Global Human Resources

Education/Training System
Ability training period (first 3 years at Unitika) and follow-up training,on-the-job training for reinforcement
Level-specific education (such as for high-level managers, newmanagers, supervisors and other newly promoted employees)
Selective education (such as for core leaders and young leaders)
Function-specific education (for sales positions, technology
development positions and manufacturing positions)
Overseas study system for technical positions
Self-improvement support (such as help gaining qualifications andcorrespondence courses)

Placement in overseas-related positions oroverseas bases through personnel rotation
Overseas trainee system
Overseas business trip accompaniment system
Assistance for taking foreign language lessons
Overseas-related job training (global courses, Global
business skills training, global management training)
TOEIC testing recommendations, otherTraining for supervisors at overseas offices

Employee Mental Health
Unitika actively pursues measures to ensure the mental well-being of employees based on the Guidelines on the Maintenanceand Enhancement of Employee Mental Health issued by the Ministry of Health, Labour and Welfare. All Unitika employees
undergo mental health training when they are promoted to a management position. We encourage managers to be aware of
their managerial role and to take care of their own mental health as well as the mental health of employees in their charge.
Unitika introduced return-to-work support guidelines for employees who have taken extended leave due to mental illness. We
manage and promote employee health by supporting all employees at every stage from preventing illness to facilitating theirreturn to work. We will conduct stress check examinations to implement stress relief measures for those who score high instress levels, as the first preventive measures for mental health care.
Personnel System / Human Resources Education / Employee Mental Health15

CSR Report

Equal Opportunity
Promotion of women’s participation

Reemployment System

Unitika has been promoting the active participation of women within
the group by firmly maintaining a corporate culture that conducts
recruitment, development, allocation and promotion of humanresources and the appointment of skillful human resources,
regardless of gender.

Unitika has a senior employee system that enables
employees to continue in the same job after
reaching the age of 60. We welcome employees
who want to continue working.
In addition, we are planning to enact systems and to
improve existing ones, with the connection between
pensions and employment always kept in mind.

Support System for Work and Childcare

Leave

Work time

Other

Menstrual leave

As of July 1, 2017

PregnancyChildbirth

Until child is 18 months
old or end of year in whichchild turns 12 months old(whichever is longest)

Morning sickness leave

Maternity leave

Childcare leave

End of 3rd yearof elementary school
Leave for care of sick children (12 days/year)

Relaxed commuting

Reduced working hours for childcare

1. Working hours shortenedby up to 1 hour/day
2. Commuting time slot
adjusted by up to 1 hour
*Does not apply to employeeson flextime system
Hospital visits permitted
within working hours

1. Working hours shortened by up to 2
hours/day until child reaches age of 3
2. Working hours shortened by up to 1 hour/day
3. Commuting time slot adjusted by up to 1
hour
*Does not apply to employees on flextime system
4. Restrictions on labor outside regular working
hours

Flextime system

Flextime system

Achieving a Work/Life Balance
In the interest of achieving an ideal balance between work and home life,
and also to address Japan's aging society issues, Unitika fosters a
corporate environment that allows employees to take leave for bothchild-raising and elder care, and in fact, Unitika offers leave durations forthese, and also for care for sick children, that are longer than those
stipulated by law. Also, based on Japan's "Next-Generation Child-Raising
Support Measures Promotion Law," the company is also involved inpromoting male participation in child-care, with child-care leave available
to both male and female employees.

Employees taking
childcare leave

Employees taking leave
to care for elderly relatives

2012

14(4)

1

2013

26(4)

0

2014

24(4)

1

2015

15(2)

3

2016

19(4)

0

*Numbers in parentheses indicate number of male employees who
took childcare leave.

Employing People with Disabilities
Unitika not only employs enough personnel to meet the legally mandated percentage of
employees with disabilities (2.0%) but also cooperates with local employment agencies
and welfare facilities in activities to provide self-reliance support to people withdisabilities.

Percentage of Unitika employeeswith disabilities
2.46% (as of the end of March 2017)

Promoting Awareness of Human Rights
Raising Human Rights AwarenessElimination of forced labor and child labor

The Unitika Charter of Corporate Behavior that is distributed
to our employees upholds the respect for human rights. We
are working towards human rights awareness by setting up
a human rights awareness promotion organization andconducting in-house human rights training for our
employees including the CEO, executives and the CEOs of
our affiliates. As a member of the Corporate Report
Association of Human Rights Issue, Unitika works on humanrights issues in a variety of ways, such as by gathering
human rights educational information. Based on our
understanding that any kinds of harassment is considered aviolation of human rights, we have set up a support desk forsexual harassment, maternity harassment, and power
harassment at each of our offices and affiliates to raise thelevel of understanding and awareness of our employees.

Unitika Group companies and overseas affiliates have madedeclarations of their refusal to take part in any form of forcedlabor or child labor in violation of international agreements suchas the International Covenants on Human Rights or theConvention on the Rights of the Child. The Unitika Action
Standards document the Company’s refusal to permit thesepractices or human trafficking for the purpose of such practices.

Fair Recruitment Practices
Unitika has created the Unitika Employment Interview
Manual based on the spirit of the employment selection
guidelines issued by The Ministry of Health, Labour, andWelfare. We promote fair recruitment practices by
distributing the manual at meetings and training seminars forinterviewers and those involved in the selection process, andensuring that all concerned are familiar with its contents.

Equal Opportunity / Promoting Awareness of Human Rights
16

CSR Report

Safety & Health Activities
The Unitika Group engages in health and safety management activities designed tocompletely eliminate accidents resulting in lost work time. They include original
initiatives created by individual production sites and Group companies under the
direction of the Unitika Central Safety and Sanitation Committee. The Committee
specifies a new set of key policies every three years, and creates health and safety
guidelines for use in promoting activities. Initiatives will be implemented under the
new 17th set of guidelines from fiscal 2017. Production sites and Group companies
take an active approach to implementing activities, using the guidelines to create
annual activity plans at the start of every fiscal year. The culmination of these
activities is the Unitika Health and Safety Conference, a once-yearly opportunity for
Unitika employees to gather and gain inspiration by sharing activity reports,
recognition for outstanding achievements, and speeches.

Results of industrial safety and health activities over the last 10 years
Number of accidents causing
lost work time
Rate of lost work time
(Rate)(Number)

14

1.4

12

1.2

10

1.0

8

0.8

6

0.6

4

0.4

2

0.2

0

'07

'08

'09

'10

'11

'12

'13

'14

'15

'16

0
(Fiscal year)*We achieved the result of zero-accidents in fiscal 2016.

Asbestos Removal
In 2005, the Unitika Group established the Asbestos Action Committee, a Groupwide body that promotes asbestos-related
measures. Exposed beams and posts containing friable asbestos have already been removed, sealed off or enclosed. Friable
and non-friable asbestos that has been sealed off or enclosed is being treated as needed, sometimes in conjunction withperiodic repair work.
To verify worker health, we have provided asbestos-related health checkups to all current and former employees requesting it
who have handled asbestos in the past. As of March 2013, our past and current employees included Seven certified industrial
accident victims (of whom six have died) and three victims certified under the Law Concerning the Relief of Health Damage
Due to Asbestos (of whom three have died). No health problems have been reported from residents of areas surrounding
production sites or Group companies.

Number of certified industrial accident victims: 7 (6)*
Number of victims certified under the Law Concerning
the Relief of Health Damage Due to Asbestos: 3 (3)*
*Number in parentheses is number of deaths.

Safety & Health Activities / Asbestos Removal
17

Environmental Report

Basic Environmental Policy
Unitika named 1993 an Environmental first year, when we enacted the Unitika Global Environment Charter, consisting of ourpledge, basic philosophy and action guidelines. Since then, we have complied with this Charter to ensure that our corporate
management methods are environmentally aware, working on a range of environmental activities.

Unitika Global Environment Charter
The growth and development of mankind is rapidly altering our planet's air, water and soil, threatening both
the global biosphere and our own future, since both must depend on a finite ecosystem. As a corporation
with more than a century of business activities contributing to the public good, we are highly aware of thedemanding conditions now facing the global environment. The Charter is the declaration of our intention to
focus more attention on protecting and helping the environment, making appropriate environmental action
the core of our business activities.

Basic Philosophy
Better living through technology, driven by corporate activities that help humans and nature coexist.

Action Guidelines
awareness of
1 Continual
the global environment

The Unitika Group always considers the effects of our corporate activities on the global environment,
following a rigorous set of management procedures during product manufacture to prevent harm to it.

through
2 Contributing
technology development

We aggressively research and develop technologies to protect and help the global environment.

Using resources and3 energy efficiently

Carrying out PR and4 educational activities
Drawing on the completeof Unitika Group
5 rangecompetencies

Unitika

We promote efficient use of resources and energy, and recycle limited resources.

We organize a large number of PR activities that provide information on protecting and helping the
global environment, and promote a wide range of educational events.

Following the mandates of the Charter, we draw on our complete range of competencies to protect
and help the global environment.

TOPICSThe Uji Plant received an award at theUji City Fire Fighting Training Contest.
The Unitika Ltd. Uji Plant participates in the Uji City Fire Fighting
Training Contest organized by the Uji City Fire Prevention Safety
Association every year.
Two teams participated in the 41st contest, one in the female fire
extinguisher operation section and the other for male indoor fire
hydrant operation. The female team won the Uji City Head of the Fire
Department Award.

Basic Environmental Policy
18

Environmental Report

History of Environmental Preservation Activities
Unitika's Environmental Preservation Activity History
Unitika's work on environmental management hascontinued uninterrupted for over 40 years, and willcontinue into the future.

September 1973
October 1991

Pollution first became a major issue in Japan in 1973. That
year, Unitika created the Environmental Preservation
Regulations, making a clear distinction between

Created and implemented Global Environmental Charter.

May 1993

Environmental Preservation Regulations were reborn
as Environmental Regulations.
Established Environmental Committee, organization
which meets annually.

May 1994

Started environmental audits (once per year).
(Voluntary audits by each production site andinternal audits by headquarters staff.)

July 1996

Created targets for first Medium-Term
Environmental Plan (FY 1997 to 1999).

activities, to enable compliance with regulatory andIn 1991, we created a new companywide organization
called the Environmental Preservation Committee, followed
in 1993 by the Unitika Global Environment Charter. That
year we began yearly environmental auditing, establishing
the basic direction for our environmentally-aware
management style that has continued to this day. In 1998,
we created the Unitika Charter of Corporate Behavior, adocument that sets forth the basic action policy needed tofulfill our Unitika Group mission as a public-spirited
corporation. Its first article sets forth our responsibility for

Revised Environmental Preservation Regulations,established Environmental Preservation Committee.

April 1993

environmental measures and outward-directed production
standards values.

Created and implemented Environmental
Preservation Regulations.

September 1996

Started publishing Kankyo, our in-housenewsletter on environmental issues.

October 1997

Started activities aimed at becoming
ISO 14001-certified at our major production sites.

January 1998

Created and implemented Unitika Action Charter.

January 1999

Unitika Chemical was awarded ISO 14001
certification (first in Group).

October 2000

Created targets for second Medium-Term
Environmental Plan (FY 2000 to 2002).

environmental and safety awareness.
The Unitika Action Standards created and implemented in

April 2001

Created Unitika Action Standards.

April 2001 expanded on the Unitika Action Charter by

October 2002

Published Unitika Environmental Report.

setting forth specific action standards for Unitika

October 2002

Created targets for third Medium-Term
Environmental Plan (FY 2003 to 2005).

October 2005

Created targets for fourth Medium-Term
Environmental Plan (FY 2006 to 2008).

October 2008

Created targets for fifth Medium-Term
Environmental Plan (FY 2009 to 2011).

October 2011

Created targets for sixth Medium-Term
Environmental Plan (FY 2012 to 2014).

January 2015

Created targets for seventh Medium-Term
Environmental Plan (FY 2015 to 2017).

organizations and employees to comply with in theperformance of their routine business activities. The
Standard of Corporate Behavior represent a clear step
toward corporate activities grounded in a mindset ofcorporate social responsibility (CSR). They cover areas
such as the environment, safety, compliance, andcoexistence with the public good and stakeholders.

ISO 14001-Certified Unitika Organizations
Unitika is working on becoming certified under ISO

April 1999

14001-the international standard for environmentally-aware

November 1999

corporate activities. Since 1999, five production sites (Uji,January 2001

Okazaki, Sakoshi, Tarui and Tokiwa) and 11 major Group
companies have become certified. We have started
activities to help our affiliates obtain ISO 14001, and havebeen conducting environmental audits of each company.

Ad'all Co., Ltd.
Unitika Sakoshi Plant
Unitika Textiles Ltd., Tokiwa Mill

March 2001

Unitika Uji Plant

March 2001

Unitika Uji Plastic Plant

March 2001

Unitika Central R&D Laboratories

March 2001

Unitika Glass Fiber Co., Ltd., Kyoto Plant

October 2001

Unitika Okazaki Plant

October 2001

Unitika Plant Engineering Co., Ltd., Chubu Office,2nd Business Division

October 2001

Nippon Ester Co., Ltd., Okazaki Plant

December 2001

Unitika Tarui Plant

December 2001

Unitika Plant Engineering Co., Ltd., Tarui Group

December 2003

Unitika Glass Fiber Co., Ltd., Tarui Plant

September 2004

Terabo Co., Ltd.

June 2008

Union Co., Ltd.

History of Environmental Preservation Activities
19

Environmental Report

Medium-Term Environmental Plan
The Unitika Group established and promotes the 7th Medium-Term Environmental Plan, setting fiscal 2013 as the baseyear and fiscal 2017 as the last target year. In 2016, which was an interim year, we reduced the amount of energy use
due to the active energy saving initiatives at our offices. However, as production also decreased our energy
consumption rate slightly worsened. Due to troubles that arose from natural disasters, the recycle rate decreased while
the amount of waste disposed outside the factories increased.
As a result, 3 environmental goals out of 5 have not been attained. We will promote the initiatives in order to attain all
the goals in fiscal 2017, the last target year.

Seventh Medium-Term Environmental Plan (FY 2015-FY 2017)
IssuesTargets

6% reduction relative
to FY 2013 level
1point improvement relative
2 Improvement of recycling rate
to FY 2013 level
4% improvement relative to FY 2013 level
Improvement of
3 energy consumption rate (1% improvement from the previous year)
6% reduction relativeof
4 Reductionenergy consumption
to FY 2013 level
40% reduction relative
Reduction of CO2 emissions
5 fromto FY 2005 level
energy generationof the amount of industrial
1 Reductionwaste disposed outside the factories

Baseline

Target value

Fiscal 2016
Performance

Results

Fig. No.

4,989t

4,690t7,187tNot achieved

(1)

92.8%

93.8%

82.1%

Not achieved(2)

0.642L/kg

0.616L/kg

0.696L/kg

Not achieved(3)

169,000KL

159,000KL

144,000KL

Achieved(4)486kt/year

292kt/year

285kt/year

Achieved(5)

Note*: Scope of seventh Medium-Term Environmental Plan: Domestic plants, On-Site group companies, and external Domestic group companies

Quantity of processed industrial waste productst
8,000

Rate of recycling
%
100

Fig.1

Fig.2

Reference

90

6,000

Reference
80

4,000
70
2,000

60

0

'12

'13

'14
Fiscal year

'15

50

'16

'12

Energy consumption rate

'14
Fiscal year

'15

'16

Energy consumption quantity(crude oil equivalent)

KL

Fig.3

(indexed to FY2013 level = 100)

140

'13

Fig.4

250,000

120

200,000

Reference

10080

150,000

60

100,000

Reference40
50,000

20
0

'12

'13

'14
Fiscal year

'15

0

'16

'12

'13

'14
Fiscal year

'15

'16

Changes in CO2 emissions from energy generationkt
Reference
500

Fig.5

400
300
200

Unitika Domestic Plants & On-Site Group Companies
External Domestic Group Companies

100
0

'05

'12

'13
'14
Fiscal year

'15

Note:Energy consumption rate =Energy consumption(oil equivalent)(ML)/ output(Thousands of tons)'16

Medium-Term Environmental Plan
20

Environmental Report

Reducing Air and Water Pollution
Domestic plants are pursuing measures such as switching from fuel oil to natural gas and the abolition of diesel power
generation to reduce emissions of dust, nitrogen oxides (NOx), sulfur oxides (SOx), and carbon dioxide (CO2). Unitika also
works to reduce water pollution through the appropriate management of wastewater treatment facilities.
Dust emissions

t
15

10

400

5

200

0

'12

'13
'14
Fiscal year

'15

0

'16

SOx emissions
t
300

40

200

20

100

'12

'13
'14
Fiscal year

'15

'12

'13
'14
Fiscal year

'15

'16

Environmental load (COD)

t
60

0

NOx emissions

t
600

0

'16

'12

'13
'14
Fiscal year

'15

'16

Total waste water quantity
Thousands of m3
60,00040,00020,0000Unitika Domestic Plants & On-Site Group Companies
External Domestic Group Companies
'12

'13
'14
Fiscal year

'15

'16

Note:NOx=nitrogen oxides, Sox=sulfur oxides,
COD=chemical oxygen demand

Promotion of Waste Disposal of Devices that Contain PCB
It is stipulated by the Act on Special Measures Concerning Promotion of Proper Treatment of PCB Wastes to complete thedisposal of devices that contain PCB by the end of March 2027. Unitika Group has strategically updated the devices
containing PCB which are owned by our offices and affiliates, and also promotes their early disposal. We also conduct
investigations to check if there are any devices left inside the factories that may contain PCB.

Reducing Air and Water Pollution /Promotion of waste disposal of devices that contain PCB
21

Environmental Report

Handling of Chemical Substances
Control of PRTR System-Regulated Substances
The Unitika Group works to monitor and reduce the use of chemical substances thought to be hazardous to human healthas regulated by the Pollutant Release and Transfer Register (PRTR) system. As the production of vinylon stopped, theemission of boron compounds decreased in fiscal 2016. On the other hand, the amount of dichloromethane emissions
significantly increased, which raised the total amount of emissions due to the activeness of the polymer business.
Emission and Transfer Amounts for PRTR System-Regulated Substances in Fiscal 2016
Substance

Total

Emission/Transfer Amounts of Substances Subject to the PRTR System

Transfered
Total

Acetaldehyde
Bisphenol A-Caprolactam
1,4-dioxane
HCFC-225
Dichloromethane(Methylene chloride)
Dimethylformamide
Terephthalic acidToluenePolyoxyethylene alkyl ether
N-hexaneHydroterphenyls
Water soluble salt of peroxydisulfuric acid
Other

3.8
—
14.8
—
1.2
45.9
0.9
—
3.7
—
0.5
—
—
0.1

1.0
—
—
0.1
—
—
—
—
—
0.2
—
—
0.3
0.2

4.8
—
14.8
—
1.2
45.9
0.9
—
3.7
0.2
0.5
—
0.3
0.6

35.9
2.4
3.5
8.1
0.3
0.2
0.6
0.5
2.1

Unitika Domestic Plants &On-Site Group Companies Total

65.2

1.3

66.5

45.9

Unitika External Domestic Group Companies Total

5.7

0.5

6.4

Emission/transfer amounts (tons/year)

EmittedAtmosphere Water

—
4.9
—
0.4

140
120
100
80
60
40
20
0

'10

'11

'12

'13

'14

'15

'16

Fiscal Year
Transfered

Emitted13.0(annual tons)

Promotion of the management of chemicals at domestic and overseas locations
Unitika Group promotes initiatives that correspond to the Act on the Evaluation of Chemical Substances and the Regulation of their
Manufacture, the European regulations for the Registration, Evaluation, Authorization and Restriction of Chemicals (REACH), theGlobally Harmonized System of Classification and Labeling of Chemicals (GHS) and other chemical management systems in Asian
countries. The Chemicals Management Working Group works to share information between relevant personnel about the revision ofacts in other countries and current trends in related industries, as well as to disseminate this information within the group.

Logistics
Unitika undertakes a variety of efforts to reduce the environmental burden associated with the delivery and emission of raw
materials, products, waste, and other materials. These efforts include the implementation of modal shifts and streamlining ofdelivery systems. In fiscal 2016, as a specified consigner we reported 68,000 tons of freight and 24,200 tons of CO2
emissions to the government. Unitika will strive for eco-friendly distribution within the whole group by expanding the use of
trains, promoting idle stops and the use of ecological tires, and decreasing the frequency of deliveries through the use oflarger vehicles and so on.

Environmental Complaints
The Unitika Group always tries to conduct our businessactivities with consideration for the lives of people in local
communities. However, we caused problems due to noise andodor generated from our production sites in fiscal 2016. Inreaction to the complaints we received, we have been putting
efforts into preventing any recurrence by immediately
examining the causes of the problems and communicating withthe people in the community. We will keep improving in order tocontribute towards a comfortable living environment for people
in the community.

Complaints from Surrounding Neighborhoods
No. of Incidences

10
8
6
4
2
0

'10

'11

'12

'13

Fiscal Year

'14

'15

'16

Applicable scope: Domestic plants and external Domestic group companies
Air quality

Water Quality

Noise

Handling of Chemical Substances / Logistics / Environmental Complaints
22

Offensive Odor

OthersEnvironmental Report

Overview of Environmental Impact
Environmental Impact From Business Activities (FY 2016 Figures)
The diagram below shows the Unitika Group's materials flow for FY 2016.

INPUTOUTPUT

Atmospheric emissions
SOx : 34 tons
NOx : 399 tons

CO2 : 285,000 tons
Dust : 7 tons

Water
33,739,000 m3

Waste waterRiver Water : 28,420,000 m3
Ground Water : 5,268,000 m3
Drinking Water : 14,000 m3
Industrial Water : 37,000 m3

Waste water quantity : 35,772,000 m3
COD emission quantity : 154 tons

Waste products

UnitikaGroup'sbusiness
activities

Energy144,000 kL(crude oil equivalent)

The amount of recycling in the intermediate processing : 3,928 tons
The amount of incineration or landfill disposal : 3,259 tons

Chemicals*
Emission quantity : 73 tons
Transfer quantity : 59 tons

In t

Raw materials

Final external disposal quantity : 7,187 tons

er nal r ec ycl i n g

Material recycling : 12,402 tons
Thermal recycling : 0 tons

*Substances requiring registration under
PRTR System

All products
Production quantity : 205,000 tons

231,000 tons

Recycling amountoutside of factories
11,943 tons

Overview of Environmental Impact
23

Environmental Report

Environmental Accounting
The Unitika Group implements environmental accounting as part of our environment-conscious business activities. In
conducting our environmental accounting, we follow the 2005 edition of the environmental accounting guidelines. The Unitika
Group will continue to release clear and accurate environmental accounting data.

Purpose of Environmental Accounting
To make environmental preservation more efficient by quantitatively identifying the amounts of investments and expenses
for environmental preservation, and to make decision-making processes in a more reasonable way.
To disclose environmental accounting information to our stakeholders and to fulfill our responsibility to keep them informed.

Method of Tallying Environmental Accounting Data
Data provided by : Unitika Domestic production sites & On-Site Group Companies andUnion Co., Ltd. Osaka Dyeing Co., Ltd. Terabo Co., Ltd. Unitika Sparklite., Ltd.
Applicable period : April 1, 2016 to March 31, 2017
Calculation method : Investment amounts include the environmental investment on items forwhich the environment is not the main objective. Expense amounts include
labor costs, general expenses and depreciation.
Unitika's fiscal 2016 environmental investment was 429 million yen. The main targets of investment are the ones regarding
measures for the reduction of environmental footprint and the recycling of raw materials.
The expenses regarding environmental preservation were 991 million yen. The main items include the maintenance of pollution
prevention equipment, the disposal of industrial waste (including recycling expenses), the research and development of
eco-friendly products and technologies, and social activities such as afforestation and city beautification initiatives.

Environmental Preservation Costs
Category(Millions of yen)

FY 2016

Remarks

Capital investment

Cost

Pollution prevention costs
Business
Environmental preservation costs
area costs
Resource recycling costs

114

419

Pollution (water, air and noise pollution) prevention measures

1

8

Energy saving, Global warming prevention measures

199

302

Upstream/downstream costs—

1

Green procurement activities

Management activity costs

693

Environmental management system maintenance
Environmental education, Impact monitoring, Increase of greenery within factories

R&D costs—

142

Developing environmentally-friendly products

CSR costs—

4

Regional cleaning activities

Environmental damage costs

110

21

Cost for soil contamination countermeasures, Quantity-based taxes

Total

429

991

Waste volume reduction, Material recycle, Disposal of PCB/Asbestos

Environmental Preservation Costs
The table lists items with a clear basis for calculation that have high substantive benefits for environmental preservation.
Note that inferred benefits have not been calculated.
(Millions of yen)Item

FY 2016

Income from sale of recycled resources

124

Water usage reduction from recirculation2

Cost reduction from energy-savings

245

Reduction of costs associated with energy-efficient
power sources and industrial waste reduction

8

Reduction of contribution designated by law—

Reduction of waste disposal costs

5

Environmental Accounting
24

Environmental Report

For Life on Earth Tomorrow— for the EARTH — for life on Earth tomorrow.

Unitika’s eco-friendly
products, for life on Earth.
Changing the environment of tomorrow, from our everyday life—
The Unitika Group is thinking of ecology with materials as the starting point.
Materials that create products, including daily necessities and parts for industrial products, play asignificant role in moving forward towards a more earth-friendly lifestyle.
We wish to expand eco-friendly, human-friendly products even further.
Unitika cares about and creates life on Earth, for tomorrow.

For Life on Earth Tomorrow
25

Environmental Report

Let’s learn about ecology for the sake of the planet!

Biomass Materials (Polylactic Acid)
Is it true that tooth brushes
can be made from plants?

Can Terramac be used toreduce CO2?

AnswerAnswerYes, it is even possible to make trays andgarbage bags as well.

Yes, it is very helpful because it
does not emit much CO2.

Toothbrushes, trays and garbage bags seen in the photoare made of a material called Terramac, which is madefrom an ingredient that uses corn starch. Terramac canbe processed in a range of shapes just like plastic, so it
is used for a variety of products.

Terramac is a kind of plastic made of plants. CO2 emitted
when burned and decomposed will be absorbed byplants through photosynthesis, and will become a basematerial of Terramac once again. This circulation leads toa reduction of CO2 emissions.
Sunlight

B i o m a s s

Polylactic
acid

Photosynthesis

M a t e r i a l s

Latic
acid

Carbon CO2 Circulation indioxide the use of biomass- Cornbased materials
water

Plant-derived

Terramac

StarchBiomassresources

Carbondioxidewater(corn etc.)

Terramac/Combustion, biodegradation

Toothbrushes (resins)iiwan eating utensils
for infants (resins)

Garbage bags (films)

Headrest covers(nonwoven fabrics)

Ground stabilizing admixture(nonwoven fabrics)

Tea bags (fiber)

Eco-bags (fiber)

Biomass Materials (High Function Plastic)
Is there a material that is friendly to the Earth and strong?
AnswerThere is the one called XecoT, which is heat-resistant.
High function (heat resistant)Materials made from the composition of plants were weak
towards heat and could not be used for the parts of cars
etc. Unitika developed a material called XecoT using
castor oil extracted from seeds ofcastor-oil plants. It is a heat-resistantmaterial that can be used for parts ofCastor-oil plantcars and electronic devices.

Unitika environment-friendly materials
Materials handled by Unitika
Polyimide
U-imideSuper engineering
plastics

Heat resistant PAPAR
U-polymer

Engineering
plastics

Recycled PET

General-purpose
plastics

High heat resistant polyamide resin,super engineered plastic for the
next generation: XecoT

Plant-derived nylon fiber:
CASTRON

Biomass Materials (Polylactic Acid / High Function Plastic)
26

g

yclin

c
Terramac's
For rematerial circulation Products
systemPolylactic Acid

Environmental Report

Let’s learn about ecology for the sake of the planet!

Recycled/Environmentally-Friendly Materials
Can clothes be made frompet bottles?

What is a material that is friendly
to both humans and the environment?

AnswerAnswerYes, even stylish clothes andsportswear can be made from pet bottles.

For example, there is a material called SyLPH.
Cottons which produce SyLPH are made from fibers of
eucalyptus trees which are systematically planted. It is
not only soft and has a beautiful color, but also absorbs
moisture including sweat. It is used for fashion clothing,sportswear, underwear and uniforms.

Unitika reproduces collected pet bottles as a polyester
fiber called Uniecolo. Uniecolo is a soft fiber used for avariety of clothes, from stylish ones to sportswear.

[No pollution from the factories, and the area ofarable land is 1/10 compared to that of cotton][How pet bottles are transformed]

1/10 area of thearable landCollecting
pet bottles

Making them into chips
by heating

Producing raw yarns
and raw cotton

Producing yarns byspinning

Cottons

Other recycling systems

SyLPH

Other environmentally friendly materials
Resin reusing system:

Uniform recycle system:

Cotton Spunlace without the use of a binder:

Regenerated Resins

ECORALLY

Regenerated
ResinsUsed
uniforms
Reclaiming
wool atfactories

SyLPH

Reusing
the wool as
felt etc.

Material Recycle

Return-type
recycling

Waste materials generated in the
manufacturing process arecollected and reused.

Switch-type
recycling

Cottoace

High efficiency filtration filter made of
special textured yarn:

100% cotton nonwoven
fabric without the useof a binder

Filter for liquid with highparticulate capturingfunctionality

Cartridge Filter

Regenerated
ResinsEnergy-Saving Materials
Does it help to reduce CO2 if we
do not often use air conditioners?

What is “Warm Biz”?

AnswerAnswerYes, it helps to reduce CO2 emissions
if we reduce the amount of electricity we use.

It is an initiative to wear warm clothes todecrease the time spent using heating.

CO2 is emitted when producing electricity. So, if we do
not often use air conditioners it will decrease CO 2
emissions. For instance, the use of a mattress made ofhigh air permeability materials called Cubic-i allows you
to sleep comfortably and reduce the time spent using air
conditioners.

Unitika reproduces collected pet bottles as a polyester
fiber called Uniecolo. Uniecolo is a soft fiber used for avariety of clothes, from stylish ones to sportswear.

[Thermal Energy and Far-Infrared Ray
Radiation Mechanism][Structure of Cubic-i ]Photothermal conversion material
Far-infrared ray
emission material(fabrics)

Heat radiation
Air permeability
Moisture desorption
Air cycle(skin)

Far infrared ray

Thermal energy

Thermotron RadiPoka

Other energy-saving materials
Comfortable medical material withexcellent moisture absorbing anddesorbing function:

Hygra-LU
A comfortable material
that reduces discomfort
due to sweat with anexcellent moistureabsorbing and desorbing
function

Nylon barrier film:

EMBLEM NV
A flexible packaging filmthat contributes to source(resin) reduction, weight
reduction and waste
reduction as a substitutefor cans and paper packs

Sunlight shielding-type
cooling material:

Advanced heat shielding cooling material
made out of special ceramics:

SARACOOL N

KOKAGE MAX

A cooling material thatshields from sunlight

A cooling/UV cut material
that shields from infrared
rays of sunlight

Recycled/Environmentally-Friendly Materials / Energy-Saving Materials
27

Environmental Report

Production Site Information
Air

Production Site
Unit

Water

Location

SuspendedmatterOil

Total Nitrogen Total Phosphorus
mg/l

kg/day mg/l

SOx

NOx

Dust

BOD

COD

K-value ppm

ppm

g/Nm3

mg/l

kg/daymg/l

mg/l

Main products

kg/day

—

29

199

0.025

—

1131

30

16

—

722

—

98

5 Uji-Tonouchi, Uji-shi,
Kyoto, Japan 611-0021

ISO 14001 Certification No.
JCQA-E-0249

—

16

61

0.014

—

286

6

1

—

115

—

5

Nylon resin, nylon fiber,
engineering plastics,
nylon/polyester film

Okazaki Plant

—

93

100

0.05

25

719

20

10

15

385

2

51

4-1 Hinakita-machi, Okazaki-shi,
Aichi, Japan 444-8511

ISO 14001 Certification No.
JCQA-E-0292

—

16

70

0.001>

3

82

5

0

2

30

0.3

6

Polyester resin, polyester, fiber,
spunbond (filament nonwoven fabric)

Tarui Plant

11.5

—

150

0.3

40

109

50

5

120

43

16

5.6

—

—

34

0.002

4

34

3

1

2

2

0.1

0.5 glass cloth

17.5

—

130

0.3

80

—

100

2.5

—

—

—

—

0.6

—

50

0.003

<1

—

<1

<1

—

—

—

—

Uji Plant
Site area: 311,781 m2

Site area: 313,865 m2

Site area: 156,224 m2
ISO 14001 Certification No.
JCQA-E-0323

Tokiwa Mill

Cotton nonwoven fabrics,

Site area: 64,530 m2
ISO 14001 Certification No.
JCQA-E-0221* Values in table

Regulation values
Measured FY2016 values

Note 1: The displayed regulation values are the most rigorous values mandated by law (Air Pollution Control Law or Water
Pollution Control Law), regulations, prefectural guidance or conventions.
Note 2: Includes environmental impact from affiliates within site.
Note 3: SOx = sulfur oxides, NOx = nitrogen oxides, COD = chemical oxygen demand, BOD = biological oxygen demand
Note 4: The displayed air pollution values are the measured values for the major facilities at each site (totals are values for
entire site).
Note 5: The displayed water pollution values are the highest values measured at the drain outlets at each site (loadamounts are values for entire site).

Environmental Accounting
282210 Tarui-cho, Fuwa-gun,
Gifu, Japan 503-2121

88 Nakahara, Souja-shi,
Okayama, Japan 719-1195
Cotton 100% yarn,
Blended yarn with synthetic & cotton,
Synthetic woven fabrics blended
with cotton

Risk Management Office
4-1-3 Kyutaromachi, Chuo-ku, Osaka 541-8566, Japan
Website: http://www.unitika.co.jp/