37CHORI CO., LTD.

Tsumugu Report 2021

Management Foundation Tailored to Sustainable Growth

Chori’s Sustainability Initiatives
Environment
We understand the importance of respecting the environment when conducting our business activities and that it is
our responsibility to address environmental issues in a proactive manner.

Basic Principle

Chori’s Environment-Friendly Initiatives

Basic Policies

With a view to generating substantive value and helping to realize a more enrichedsociety, Chori strives to provide accurate information and exceptional products tailored to
the needs of its customers. As the environment continues to garner global attention, we
believe the role we play in contributing to environmental conservation is essential toestablishing a solid management foundation.

Environmental Management Structure (As of April 1, 2021)

1. Consideration for the global
environment

At Chori, we handle a wide range of environment-friendly products. At the CHORI Exhibition, a major trade convention for textile products, we

2. Compliance with environmental laws
and regulations

various other materials.

3. Establishment and continuous
improvement of environmental
management system

ECO BLUE™

has been handling ECO BLUE™ recycled polyester fiber, which derives from

Consumers

Collect

Produceplastic pellets

Generate
product

Weave/knit

Create yarnsuch resources. Since 2019, we have maintained traceability for this brand,

President

Environmental Management Secretariat

Domestic Recycling System of ECO BLUE™

To help resolve the issue of plastic pollution, which has been gaining greaterattention in recent years, and realizing the importance of plastic bottles, Chori

We have established the following structure in pursuit of our environmental initiatives.

Propose EMS* revisions/improvements
Report EMS results

showcase our diverse line of products, including our originally developed materials and environment-friendly materials that are paired withwhich is essential to ensuring a stable supply and managing the quality of these
Appoint

ultra-white, high-quality pellets. ECO BLUE™ is also certified with the Global
Recycled Standard as it generates less carbon dioxide during production

Environmental Management Officer
Report internal audit resultsAppoint

Plastic bottles are recycled into
new, completely different products.

compared with virgin polyester (please refer to page 28 for details).

Internal Environment Auditors

MILLENNIUM ORGANICTM

Textile Division

Chemicals DivisionCorporate Management Division

Division Head

Division Head

Division HeadMILLENNIUM ORGANICTM is made of a rare, long-fiber cotton cultivated in the Fergana Valley located 600
meters above sea level in Uzbekistan. Developed in climates known for extreme temperature variations andDivision Environmental Manager

Division Environmental Manager

Division Environmental Manager

EMS Facilitator

EMS Facilitator

EMS Facilitator

Synthetic Fiber Business
Dept.

Technical Material &Garments Business Dept.

Logistics Dept. (Textile)

Chemical & Materials
Business Dept.

Life & Fine Chemicals
Business Dept.

Logistics Dept. (Chemicals)* EMS: Environmental management system
Note: EMS facilitators concurrently serve as internal environment auditors and conduct internal audits in other divisions.

Corporate Management
Dept.

snowmelt in mountainous regions, MILLENNIUM ORGANICTM is a 100% organic, nongenetically modified cotton

Human Resources &General Affairs Dept.

Information System Dept.

Internal Auditing Dept.

Pharmacovigilance &Quality Assurance Office

Health Insurance Society

Business Anchor
Corporation

Chori Machinery Co., Ltd.

derived from ultra-white raw cotton.
While Europe and certain countries in Asia have strengthened regulations on harmful substances in recent
years, MILLENNIUM ORGANICTM has received the OEKO-TEX® STANDARD 100 Class 1 certification, theworld’s highest safety standard for textile products, and is a highly trusted product for babies and toddlers.

MEDITERRANEAN GIZATM
It is said that the longer the fiber, the more premium the cotton. Giza cotton is a high-quality ultralong cotton

Environment-Friendly Business Activities

that is deficient in quantity. Chori engages in the business of MEDITERRANEAN GIZATM, which is made from theseeds of Giza cotton grown in Israel. As Israel is mainly a dry region, we have been working to minimize daily

Since its acquisition of the ISO 14001 international standard for environmental management systems inwater use through the use of AI technology. This high-tech, environment-friendly agricultural technology has

2000, Chori has continued to conduct and engage in environmental conservation activities. We adopted theearned us BCI* certification. Moving forward, we will expand our lineup of environment-friendly materials and2015 standard in December 2017, acquired ISO 14001 certification for our Hokuriku Branch and Okayama

help realize a sustainable society.

Liaison Office in December 2019, and continue to engage in Groupwide efforts with Chori Machinery Co.,* Better Cotton Initiative: An international certification standard that promotes the sustainable growth of cotton production and cotton
industries worldwide.

Ltd., Business Anchor Corporation, and other subsidiaries in our aim to help preserve the environment.

CHOI-Katsu Initiatives

CHOI-Katsu 2020 Theme

We instill the importance of respecting the environment when conducting our business activities in

Close Up

1

Keep Chori Basics!

our employees through the combination of ISO 14001 and Chori Innovation Activities (“CHOI-Katsu”),

Health and compliance are essential to Chori’s success.

Chori’s original Companywide initiative. Through the selection of themes for CHOI-Katsu 2020

1

Compliance(as shown in the diagram on the right), we engaged in various initiatives such as the advancement

Change Our Workstyle!

In fiscal 2020, we reduced labor time by roughly 400 hours through a range of initiatives(RPA) on routine simple tasks.

Health2of digitalization to reduce overtime work, which will lead to lower energy use.
designed to improve operating efficiency, including the employment of robotic process automation2

Let’s seek better ways to work!

Digitalization
3 Cleanliness1C ommunication
4 Learning
2

In Pursuit of the SDGs
Chori’s initiatives in pursuit of the Sustainable Development Goals (SDGs) are featured on its official YouTube channel. The channel
offers viewers an illustrated look into Chori’s involvement in the world of environment-friendly, plant-based meats and its participationin the lithium compound production project in Chile.

https://www.youtube.com/watch?v=EfGtYiJVL0E

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CHORI CO., LTD.

Tsumugu Report 2021

Management Foundation Tailored to Sustainable Growth

Chori’s Sustainability Initiatives
Business Partners

Occupational Safety Management

Our suppliers are essential partners for our business activities and play a critical role in our contributions to society.

At Chori, we understand the significance of minimizing risks in the workplace environment and ensuring the safety ofWith this in mind, we put forth every effort to ensure compliance in our CSR procurement, export management, andour employees. With this in mind, we devised a business continuity plan (BCP) and instituted a safety management

other activities.

system for our employees overseas.

CSR Procurement

Ensuring of the Safety of Our Employees Overseas

Conflict Minerals

Once every two years, in principle, Chori conducts a CSR procurement survey subject to theConflict minerals are mineral resources extracted inconflict zones such as Africa. Specifically, the DoddFrank Act in the U.S. requires that the use of conflictminerals (tin, tantalum, tungsten, and gold) be
disclosed by all listed companies.
Global cooperation is critical to ensuring thatconflict minerals do not become a means for armed
forces to carry out inhumane acts on the innocent
civilians of the countries in which we operate.

“Operating Rules Regarding CSR Procurement” of the Toray Group. The survey is intended toconfirm matters concerning the CSR promotion system, legal compliance, environmental conservation, and risk management, in addition to verifying any potential occurrences of forced labor,child labor, unfair low-wage labor, and other forms of human rights issues. In addition, Chori strives
to eliminate the use of conflict minerals by confirming that its primary suppliers are conflict-free.

Ensuring of Strict Compliance
Recognizing the importance of complying with laws and social norms when engaging in business activities with our suppliers, we u­ndertakethe following measures to ensure rigorous compliance throughout our operations.

In the event of a natural disaster or a terrorist attack, whether in

identify the location of each employee at a particular point in time.

Japan or overseas, we must be fully prepared to immediately iden-

Employees dispatched overseas and their families as well as

tify the whereabouts of our directors and employees, confirm theiremployees on business trips outside of Japan are also enrolled insafety, and respond appropriately in a timely manner. Chori has inChori’s overseas healthcare support program, which provides

place a proprietary system dubbed Overseas Business Trip Inquiry

medical assistance in Japanese in the event of an accident or(OBTI), which manages the overseas business trips of domestic

illness while abroad. The program helps to minimize employee

employees as well as the business trips of employees dispatched

concerns regarding healthcare overseas due to its differences

abroad and of the employees of overseas offices and helps tofrom Japan.

Business Continuity Plan (BCP)
Chori’s business continuity plan (BCP) has been designed to place

Security Trade Control

Crisis Response Headquarters

the utmost priority on the safety of its directors and employees andWith the objective of maintaining peace and security around the world, Chori has formulated its “Internal Regulations on Compliance with Export-Related

to enable the swift recovery of business operations after serious

Regulations” and “Regulations on Fair Reporting and Management of Imports and Exports.” We undertake strict export controls to prevent countries in possession

disasters. We have implemented a safety confirmation system,of weapons of mass destruction and conventional weapons from getting access to the highly sophisticated equipment and technology of developed countries.

which verifies the safety of all directors and employees and theirfamilies in a timely manner, and we examine the system regularly.

Export Control Process and Training

A BCP training course is also held once a year, ensuring that weOnce applications for list control and catch-all control are filed by Chori’s

Chief Export Control Officer President

Sales Department, the Corporate Management Department conducts final
approval. In October 2020, we began implementing a system that integrates

Regulatory Trade Control Officer General Manager of Corporate Planning Division
Export Control Officer
Manager ofCorporate Management Department(approval of transaction screening)rigorous security trade control and stronger compliance measures. This system
is also designed to improve work efficiency and eliminate the use of paper.
In addition, Chori encourages its employees to obtain the STC Associate

Export Control Representative
Corporate Management Department(transaction screening / consultation)

Logistics Department (Textile) / Logistics Department (Chemicals)(transaction screening)certificate and holds internal workshops and training sessions to enhancetheir understanding of export control. In fiscal 2020, 37 employees acquired
the STC Associate certificate.

Sales Department(application for transaction screening)

Primary Recipient ofInformation

Convene Primary Members for Response Measures
Employees of Human Resources &General Affairs Dept.

Department Manager of
Human Resources &General Affairs Dept.

ReportEstablish contact /share information

Cooperate

are fully prepared in the event of an emergency.
Chori’s BCP manual calls for a swift recovery of business operations by the sales divisions. For the corporate divisions, we havethe management of information on export products and transactions, ensuring

Incident

established a core operations manual to maintain systems,
finances, and other basic business functions. Moreover, we have

Deputy General Manager
of Corporate Planning
Division

DivisionsManager ofCorporate
Management Dept.

Relevant
Companies

Supervisor ofOverseas Stores(Human Resources &General Affairs Dept.)

established a response headquarters and operational procedures

President

in preparation for major disasters and pandemics.

Safety and Health Management

Product Safety Initiatives

Each month, a Safety and Health Committee member visits our headIn accordance with product safety management regulations, Chori establishes a Product Safety Inspection Committee whenever a product isoffices in Tokyo and Osaka to assess the workplace environment.

launched, sold, or used externally for the first time.

The committee comprises employees of the Human Resources &Office etiquette has undergone drastic changes in the current COVID-19

General Affairs Department, nurses of our in-house health clinics,

era. Chori has established a contact system called KIITE through which

and representatives from the Chori Labor Union who regularly

employees can anonymously report legal or regulatory violations and othermonitor the humidity, temperature, and CO2 concentration levels

matters. Employees are constantly reminded to wear masks and talk quietly

to ensure a safe workplace environment for all of our employees.

within work facilities, and through such measures, Chori strives to ensure a

President
Report results

Arrange

Product Safety Inspection Committee
Chair: Deputy General Manager of Corporate Planning Division(Human Resources & General Affairs Department and Information System
Department) and inspection committee members
Held: As necessary• Inspect product safety

Request product safety inspection anduse of company name, etc.

Product Safety Management Manager
Managers of business administration sections• Aggregate and analyze issues• Comply with relevant laws andcompile information

ReportSecretariat (Human Resources & General Affairs Department)• Secretariat of product safety• Provisional point of contact in theevent of accidents• Store and manage relevant
documents• Product liability insurance coverage• Cooperate with TORAY INDUSTRIES’ • Report to and consult with relevant andsupervising ministries, National Instituteaffiliated divisions (reports,of Technology and Evaluation (NITE), etc.
consultations,etc.)

Command• Deliberate on important productsafety matters

Instruct and provide information

Departments• Prepare product management
procedure• Manage product safety• Respond to and resolve accidents• Store and manage relevant
documents• Provide advice to and cooperate withsubsidiaries and affiliates

Legal Compliance Committee
Chair: President
Members: Officers and department managers ofcorporate planning divisions and managers
of business administration sections ofsales divisions
Supervisor: Audit & Supervisory Committee

In terms of preventive measures for COVID-19, staggered work

Topic

Contact System

comfortable workplace environment (please see page 50 for details).

hour and telework systems have been established, plexiglass
barriers and alcohol disinfectants are available for use, and body

Propose productmanagement procedure
Report accidents andsubmit detailed reporttemperatures are measured at the entrance of the reception andApprove productmanagement procedure

office areas of our facilities. Moreover, our Tokyo and Osaka head
offices, Hokuriku Branch, and Okayama Liaison Office operate incompliance with the Building Sanitation Law of the Ministry of
Health, Labour and Welfare, with the facilities constantly ventilated
at a rate of 30 m3/h or more per person.

Reception area of Tokyo Head Office

Meeting area

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CHORI CO., LTD.

Tsumugu Report 2021

Management Foundation Tailored to Sustainable Growth

Chori’s Sustainability Initiatives
Human Resources
The Chori Group regards people as its most valuable management resource, founded on its vision for human resources,“Utilize people, and be useful to them. Nurture people, and develop with them. Connect people, and join together withthem.” We will utilize, nurture, and connect people to continue to grow as an organization and cultivate our next generation.

Promotion of Diversity
Creating a Comfortable Workplace Environment
We regard people as our most valuable management resource and for that reason, it is essential that we provide employees with workplaceenvironments that allow them to work in a healthy and active manner. We conduct the following initiatives with this in mind, particularly with the aim ofproviding employees with a healthy work–life balance. Moreover, we have been working to improve our employees’ operational efficiency through our

Human Resource Development

Companywide CHORI Innovation Activities (“CHOI-Katsu”), established in fiscal 2013 with the aim of achieving department- and division-specific goals.

As globalization continues to spread at a rapid rate, employees will be expected to utilize their full capabilities. We cultivate our employees tobe able to respond quickly to changes, to think and act on their own will with a sense of curiosity and a broad perspective, and to become an
integral part of carrying the Group forward into the future.

In principle, designate one day of the week as ano-overtime day

2.

Always act responsibly asa member of Chori andkeep the Company
charter close to their heart

3.

Have a spirit ofindependence

4.

Constantly work hard andcome up with creativeideas as results-focused
professionals

Expect the best andprepare for the worst

5.

Respect the values andcultures of people fromaround the world

Promote Flexible Workstyles
Improve
flextime system (no core hours)Introduce work-at-home system (temporarily) andweb-conferencing system

Mandatory
use of annual paid leave (five days)
Encourage employees to take seasonal holidays

All staff must leave their workplace by 9 p.m. every day

Personnel We Seek

1.

Encourage Employees to Take Annual
Paid Leave

Eliminate Long Work Hours

Maintain records of paid leave taken in departmentspecific systems

Restrict the number of overtime hours
Automate
work processes with robotic processautomation (RPA)

Encourage male employees to take childcare leave
Conduct
one-on-one meetings between employeesand their superiors

Eliminate
restrictions on the number of times half-dayleave can be taken for the purpose of childcare,nursing care, or hospital visitsImprove the efficiency of meetings

Provide option to relocate to other locations (transfer
to other branches domestically and regionally)Supporting the Balance of Work Life and Childcare
Chori has various childcare systems in place to promote the balance ofwork and family life. While the period of leave is relatively short, the numberof male employees taking childcare leave has been on the rise, with 10

New Employee Training

taking time off in fiscal 2020. We also have a support system in place as

At the Natural Dye plant coloring event, which is held in support of recovery from the Great Easta part of our employee benefit program that provides employees withJapan Earthquake, our new employees take part as representatives of Chori with the aim of culti-

FY2018
Number of Employees Taking
Childcare Leave

FY20195(1 of whom is male)

Number of Employees Working
Shorter Hours Due to Childcare

FY202017

20(6 of whom are male) (10 of whom are male)

11

11

10

financial assistance for childbirth, self-development, and childcare.

vating their awareness of being a Company employee. (The event was canceled in fiscal 2020 due
to the COVID-19 pandemic.)
Upon joining the Company, new employees receive orientation to acquire the basic knowledge

 romoting Workforce Fluidity and SupportingP
Self-Development

and proper etiquette to become a responsible working adult and attend 30 lecture sessions andtake certification exams twice a year. In fiscal 2020, these programs were held online as a measure

We promote workforce fluidity within the Group by assigning employees

to prevent the spread of COVID-19.

sonnel. We also support our employees’ self-development by subsidizing
tion. In fiscal 2020, this financial assistance program was utilized by 89of the Company, and conduct lectures led by our employees. In fiscal 2020, these programs were
held online as a measure to prevent the spread of COVID-19. Moreover, to speed up the pace of
globalization, we have implemented a system for the dispatch of trainees overseas while continu-

Groupwide Training System
Overseas
Training

E-Learning

40

0

2016

2017

2018

2019

2020

(FY)

Recruiting Diverse Human Resources
As a part of its action plan based on the Act on Promotion of Women’s

year. However, the impact of COVID-19 has

Participation and Advancement in the Workplace, Chori established the goal

Chori’s initiatives to increase the number of senior employees areof raising the percentage of women among new graduates to 20% between

also making strides with various programs in place for retirees looking

fiscal 2016 and fiscal 2020. In fiscal 2020, women accounted for 39.7% (upto reenter the workforce and leverage their knowledge and experi-

6.9% from fiscal 2019) of our entire workforce. In addition, we have beenence, network of contacts, and other strengths.

Number of New Graduates

Ratio of People with Disabilities(Number of employees)(%)

an internal video streaming platform called
C-TUBE was established to conduct these
activities online. This online streaming platformmaking proactive efforts to promote the hiring of people with disabilities.

allows employees to view the content as manytimes as they want, at any time, and because
the resources used in training by the Sales
Department are utilized in the videos, it
contributes to information sharing throughout
Compliance, etc.

Self-development assistance program

Division-specific training

Overseas employee training

Study abroad programs

Overseas trainee system

In-house English language courses (TOEIC)

In-house training program

Various workshops

Mid-career employee
and contract employee training“Let’s” intensive
coursePre-departure training for overseas assignments (including language courses)

Management
training

OrganizationSelfBased Training Development

89

and group training for its employees twice a
put a halt to these activities and, as a result,

Director training

Career management training

Employee

In-House
Training
Course102

80

C-TUBE
meeting, an internal financial results conference,

Follow-up
training for new
employees

10680

employees, despite the inability to take examinations due to COVID-19.

Chori has been holding a Companywide

ing to conduct our in-house training program.

Manager96

the tuition and fees necessary to acquire Company-designated certifica-

At Chori, we hold level-specific training for directors and employees, invite instructors from outside

Director120

to affiliates in Japan and overseas and facilitating the exchange of per-

Career Development Support

Level-Specific Training

Number of Recipients of Self-Development Subsidy

3.0

30

the Group.
20

17
6

10

0

Male

20

21

9

8

4

13

14

2019

2020

18
11
3

11

11

8

2016

2017

2018

Female

2.6

2.7

2.0

2.0

2016

2017

2.4
2.0

2.0

2.9

2.3

2.2

2.3

2019

2020

1.0

(FY)

0

Company employment rate

2018

Statutory employment rate

Note: Results as of March 31 of each fiscal year

(FY)

42

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CHORI CO., LTD.

Tsumugu Report 2021

Management Foundation Tailored to Sustainable Growth

Chori’s Sustainability Initiatives
Local Communities and Society

Promotion of Health and Productivity Management

For a company to realize sustainability, it must be fully committed to coexisting with local communities. As a

Recognizing the importance of the health of our employees and their families to achieving sound corporate

member of these local communities, Chori will continue to engage in various initiatives in its mission to growmanagement, we formulated our Health Declaration in 2018 to promote efforts toward health andtogether with society.

­productivity management.

Provision of Food to Africa throughProduction of Chemical Fertilizers

Partially finance construction and supply raw materials
for chemical fertilizers

Since fiscal 2019, Chori has participated in a chemical fertilizer production project in Nigeria. Nigeria boasts the largest population in all of

Chemical fertilizer blending plant(Construction site: Suburbs of Lagos,
Nigeria)

Africa with roughly 190 million people and relies on agriculture as oneof its major industries. With the expectation that increased demand for

Health Declaration
1. Enhancement of Awareness of the Health of Employees
Chori believes that the health of its employees and their families is significant to the success of its business and that the vitality of its employees translates into the vitality of theCompany. Based on this belief, we strive on an ongoing basis to enhance awareness of the health of our employees.

2. Approach to Health and Productivity Management
Chori actively supports and promotes initiatives that help maintain and improve the health of its employees and their families with the goal of realizing health andproductivity management.

3. Responsibility to Society and the Future

crops fueled by population growth will continue in Africa, the need for

Chori will do what is necessary to ensure the health of its employees and achieve sound corporate management. In so doing, we will makea difference to society and realize sustainable growth.

chemical fertilizers to enhance agricultural efficiency is projected to

February 14, 2018

grow. The establishment of a chemical fertilizer blending plant, which
was partially financed by Chori, has enabled the production of effec-

Health and Productivity Management Promotion Structure

tive fertilizers in Nigeria that improve soil quality and expand the rangeof crops. Through the sale of chemical fertilizers, we will contribute

Sell chemicalfertilizers in Nigeria

to a stable food supply and higher agricultural efficiency in Africa.

Enhance agricultural
efficiency throughfertilizers

Provide stable
food supply

We established our Health Promotion Committee in April 2018 and have

Paper for Chori’s Health Management is held once a year to assess thesince been promoting efforts to realize health and productivity manage-

current state of health management and to discuss any issues.

ment. Chaired by Satoko Nakayama, deputy general manager of the

Hokuriku Yarn Fair
While the Hokuriku region has always been a hotbed for synthetic

Corporate Planning Division, the Health Promotion Committee consists

Chair: Deputy General Manager of Corporate Planning Divisionof industrial physicians and nurses from Chori’s in-house health clinics as(In Charge of Human Resources & General Affairs Department)

well as the employees of the Human Resources & General Affairs

fiber, it had not played host to a materials exhibition for many years.

Department and members of the Chori Health Insurance Society.

Chori has always had deep ties to the region that stem from its long

Through the initiatives of the Health Promotion Committee, Chori aims tohistory of doing business with local textile companies. In 2015, theRaw Material Presentation Exhibition was held in Ishikawa Prefecture,

Inaugural Hokuriku Yarn Fair

Chori’s booth at Hokuriku Yarn Fair in 2020

In-house Health Clinics

Chori Labor Union

fulfill its Health Declaration. In addition, a debriefing session on White

answering the long-awaited wishes of local companies for an

Based on the slogan “Everything begins with yarn,” unveiled in the

exhibition in their hometown. The event was a tremendous success,event’s inaugural year, over the years the participating companies

setting the stage for an even bigger event in 2016, the inaugural

have showcased materials that were differentiated in many ways

Hokuriku Yarn Fair. A total of 13 companies, including Chori, took

through the demonstration of their unique plying and processing

part in this event, which was attended by roughly 550 people.

capabilities. In 2020, the Hokuriku Yarn Fair featured a wide range of

Due to its success and the desires of those within and outside

maintain and improve the health of its employees and their families andHuman Resources & General
Chori Health Insurance Society
Affairs Department
Health Promotion Committee

environment-friendly sustainable materials and, while admission wasof the Hokuriku region for the continuation of such events, thelimited to prevent the spread of COVID-19, 2,160 people attended

Hokuriku Yarn Fair has been held annually ever since through theover the course of two days. Chori will continue to inject energy into

support of textile associations in Ishikawa and Fukui prefectures.

the Hokuriku region by conveying the glamour of its textiles.

Ensuring the Health of Employees
We conduct oral and dental checkups and flu vaccinations on a yearly

physician in the following month. In these ways, we work to ensure thebasis. In addition, employees aged 30 and 35 years and over are eligible

health of our employees through the support of medical experts.

to receive a comprehensive medical checkup once a year at theexpense of the Company, while dependents aged 35 years and over ofthe insured party are entitled to receive up to ¥32,000 in subsidies for
medical checkups.
We also conduct stress checks to prevent the possibility of ouremployees suffering from mental illnesses. Employees who work over 40hours of overtime in a month are required to consult with an industrial

Close Up

Rate of Employees and Family Members
Who Undergo Regular Health Checkups

Comment

FY2018FY2019

Employees

100%

100%

FY2020100%*

Family Members

70.3%

72.0%

52.9%

* Excludes expatriates who were unable to return to Japan due to COVID-19

We are here to ensure the physical and mental well-being of all of Chori’s employees.

Our business ties with the Hokuriku region date back to the outset of the Showa Period. It all began with the

At Chori’s head offices in Tokyo and Osaka, we have in-house health clinics in place with nurses and public healthestablishment of branches in Fukui Prefecture in 1929 and Ishikawa Prefecture in 1934, which eventually led to the forma-

nurses on hand to offer support. As such, employees can receive consultations immediately after receiving their healthtion of the Hokuriku Chori Committee in 2000. The committee organizes parties and meetings that are attended each year

check results as well as undergo additional examinations and medical treatment to prevent conditions from worsening.

by the member companies and Chori’s directors and employees, and at the beginning of each year, the committee issues

In fiscal 2020, we saw responsible alcohol consumption improve as a result of COVID-19. Our in-house healtha publication called “Chori Future” to share information and promote member interaction.

clinics also offer treatment to help employees quit smoking, as a result of which the smoking rate of Chori’s maleWith a rich history in textile production that extends over 400 years, the Hokuriku region continues to produce fabrics
of exceptional quality through the use of fine thread. The region also boasts the ability to develop materials that are intricately made of threads and fabrics and that can contend with those produced overseas. In support of the region and its
textile production, in 2016 Chori launched its Ishikawa Fabrics Project as a way to communicate the brand power offabrics made in Ishikawa Prefecture to the rest of the world by placing this brand label on apparel products.

employees is on the decline. Meanwhile, we have noticed an increasing number of cases of lipid metabolism disorders
Keiichiro Yoneyama
Supervising Physician
in-house health clinic
at the Tokyo Head Officein those at high risk of such disorders stemming from lack of exercise and improper eating habits.
There is a saying in Japanese that goes “one who perseveres unscathed reigns supreme” and this applies in many ways
to the health of our employees. That is because the health and mental and physical well-being of our employees are what

keep our business running. We at the in-house health clinics will continue to offer our support to help employees maintain good physical and mental health.

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CHORI CO., LTD.

Tsumugu Report 2021

Management Foundation Tailored to Sustainable GrowthComposition and Overview of the Board of Directors, Executive Committee,
and Other Principal Committees

Corporate Governance
Chori has established systems to ensure appropriate operations with the aim of achieving sound management and sustainable growth. The Company strives to strengthen corporate governance by complying with laws and social norms, conducting
operations efficiently and effectively, and ensuring the credibility of its financial reports, while positioning the Board of Directors
as a body for conducting strategic decision-making and business oversight.

Corporate Governance Structure (As of June 17, 2021)

Name

Description

Board of Directors

The Board of Directors consists of directors, including those who are Audit & Supervisory Committee members, and is responsible
for conducting strategic decision-making and business oversight.

Executive
Committee

The Executive Committee consists of executive officers and those who were approved by the Board of Directors and was established as
an organization for conducting discussions and exchanging important information and opinions on matters related to business execution.

Audit & Supervisory
Committee

The Audit & Supervisory Committee convenes regularly once a month to discuss matters related to management conditions and audit
results upon the exchange of information with outside directors. In addition to attendance at important meetings of the Board of
Directors, directors who are Audit & Supervisory Committee members conduct individual meetings with those in charge of the Sales
Department and Corporate Planning Divisions to make decisions on important management-related matters (including on their process)and sufficiently audit and monitor the appropriateness of the execution of duties by each director (excluding those who are Audit &Supervisory Committee members) and executive officer.

GovernanceCommittee

The Governance Committee aims to enhance the Company’s corporate governance structure in order to strengthen the independence and objectivity of the functions and accountability of the Board of Directors regarding director nomination, remuneration, etc.,
and to protect the interests of minority shareholders.

Legal Compliance
Committee

The Legal Compliance Committee is chaired by the president and representative director and consists of the general manager of the
Corporate Planning Division, the heads of corporate divisions, and other members. The committee deliberates on importantcompliance-related issues and reports the results to the Board of Directors and the Executive Committee as necessary.

Business Investment
Committee

Chaired by the president and representative director, the Business Investment Committee discusses and deliberates the appropriateness of risk–return assessments and plans and the feasibility of important investments and financing.

M&A Promotion
Committee

The M&A Promotion Committee consists of the general manager of the Corporate Planning Division, the general manager of theSales Department, and other members. The committee deliberates on and examines matters pertaining to the business portfolio ofGroup companies, including M&A and the Group’s medium- to long-term management plan, from the perspective of improving
consolidated management.

General Meeting of Shareholders
Election/dismissal

Audit/
supervision

Election/dismissal

Board of Directors

Election/dismissal

Accounting Auditor

Audit & Supervisory Committee

Directors Who Are Not Audit & Supervisory Board
Members

Audit & Supervisory
Committee Members

1 outside director

2 outside directors

1 internal

Inquiry

2 outside

Direct control

Report on the status ofimportant businessexecution and other matters

Supervision
Business
execution

Executive Committee

Cooperation

director

Cooperation

directors

ReportReportGovernance Committee

1 internal director

4 internal directors

Legal Compliance
Committee

Cooperation

President andRepresentative Director

Internal Auditing
Department

Committee Members and Activities

Supervision

Accounting audit

Business Execution Organization(Business Departments / Administrative Departments) / Group Companies

Name

Position

Kazuo
Sakihama

has established a management structure that can respond tochanges in business conditions in a timely manner.
Organizational Structure

Company with an Audit andSupervisory Committee

Number of Directors

5 (of whom, 1 is an outside director) Term of Office of Directors According
1 yearto the Articles of Incorporation
3 (of whom, 2 are outside directors) Term of Office of Directors Who Are
Audit & Supervisory Committee
Members According to the Articles
of Incorporation

2 years

Number of Independent Officers

3

Executive Officer System

Yes

Performance-Linked Remuneration
SystemYes

Accounting Auditor

Deloitte Touche Tohmatsu LLC

Audit &
Supervisory
Committee: Nonmember attendee

GovernanceCommittee

Legal
Compliance
Committee

Business
Investment
Committee(5 times /5 times)(6 times /6 times)(2 times /2 times)(6 times /6 times)(2 times /2 times)

Board ofDirectors*2

Executive
Committee

President, CEO &COO / President andExecutive Officer(18 times /18 times)(25 times /25 times)

Shigemasa
Yabu

Director / Senior
Managing Executive
Officer(18 times /18 times)(25 times /25 times)

Kazuhiro
Tohge

Director / Executive
Officer(18 times /18 times)(25 times /25 times)

MitsuoOhya

Director (Part-Time)

Hiromasa
Suzuki

Outside Director

Jun
FuruyaDirector / Full-Time
Audit & Supervisory
Committee Member(18 times /18 times)

Masaaki
SawanoOutside Director /Audit & Supervisory
Committee Member(18 times /18 times)(16 times /16 times)(5 times /5 times)(2 times /6 times)

NorikoMorikawa

Outside Director /Audit & Supervisory
Committee Member(18 times /18 times)(16 times /16 times)(5 times /5 times)(4 times /6 times)Internal
audit

Overview of Corporate Governance Structure and Reasons for Its Adoption

Number of Directors Who Are Audit &Supervisory Committee Members: Committee member

Fiscal 2020 Attendance (Meetings Attended / Meetings Held*1)

Executive Officers

To strengthen the management transparency and oversightfunction of the Board of Directors, Chori has an Audit &Supervisory Committee in place, the majority of which consistsof outside directors.
At the Board of Directors’ meetings, the directors (including
those who are Audit & Supervisory Committee members)
engage in lively and sufficient discussions and deliberations
from a free and independent perspective in regard to the supervisory status of decision-making and business execution. The
Board also consists of two outside directors who are Audit &Supervisory Committee members that audit the legitimacy andappropriateness of the status of business execution from anexternal perspective in an objective and rational manner. The
Company therefore believes that it is sufficiently fulfilling its
management supervisory function. Moreover, to ensure theprioritization of results, the Company has set the term of officeof directors (excluding those who are Audit & Supervisory
Committee members) and executive officers to one year and: Committee chair

M&A
Promotion
Committee(4 times /4 times)(13 times /14 times)—(25 times /25 times)(16 times /16 times)(6 times /6 times)*1 Indicates the number of meetings held during the term of each director*2 The number of Board of Directors’ meetings held includes two meetings that shall be deemed to have been held through a resolution in writing passed by the Board of Directors pursuant
to Article 370 of the Companies Act and Article 28 of the Articles of Incorporation of the Company.

46

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CHORI CO., LTD.

Tsumugu Report 2021

Management Foundation Tailored to Sustainable GrowthDiversity of the Board of Directors

Executive Remuneration

The Board of Directors must decide on matters in a transparent, fair, prompt, and decisive manner, and therefore consists of

Executive remuneration consists of three types: monthly basic remuneration, yearly bonuses, and restricted stock compensation.

members with a diverse range of views, experience, and skills. To strengthen corporate governance by ensuring the objectivity andRemuneration of directors (excluding directors who are Audit & Supervisory Committee members) is based on a compensation

appropriateness of decisions made by the Board of Directors, at least one-third of the members are independent outside directors.

structure that aligns with returns to shareholders to ensure that it functions effectively as an incentive toward the sustainable
increase of corporate value. When determining the remuneration of each director, our basic policy is to provide an appropriate level

Directors
Nameof compensation based on a consideration of their position within the Company, individual performance, and other factors.
Gender

Kazuo
Sakihama
Shigemasa
Yabu
Kazuhiro
Tohge
MitsuoOhya
Hiromasa
Suzuki

Length ofService*1

Meanwhile, from the perspective of their role and independence, remuneration of directors who are Audit & Supervisory Committee

Area of Expertise and Experience
Independent Director
Corporate Management(Outside)

Global Business

Finance & Accounting

Legal & Compliancemembers and outside directors consists solely of fixed remuneration, determined based on their role within the Company.
Overview of Executive Remuneration System

8 years

Fixed remuneration

6 years

Basic Remuneration

Directors Who Are Audit & Supervisory Committee Members

Jun
FuruyaMasaaki
SawanoNorikoMorikawa

Area of Expertise and Experience
Independent Director(Outside)

Corporate
Management

Global Business

Finance & Accounting

Legal & Compliance

3 years*2

Medium- to long-term incentive compensation
Linked to degree of achievement of medium-term
management plan

Eligible
Recipients• Directors who are not Audit &Supervisory Committee members• Directors who are Audit & Supervisory
Committee members• Outside directors• Directors who are not Audit &Supervisory Committee members• Directors who are not Audit & Supervisory
Committee members

Grant Method

Cash

Cash

Restricted stock compensation• Consolidated ordinary income results• Progress of medium-term
management plan, etc.

• Consolidated ordinary income over three-year period• Progress of medium-term management plan, etc.
Directors who are not Audit & Supervisory Committee
members: No more than ¥100 million annually

Evaluation
Index (Variable
Remuneration)—
Directors who are not Audit &Supervisory Committee members:
No more than ¥300 million annually

Directors who are not Audit &Supervisory Committee members:
No more than ¥300 million annually

3 years(However, excludes the portion of employee salaryof directors who concurrently serve as employees)(However, excludes the portion of
employee salary of directors who­concurrently serve as employees)

Maximum
Amount ofRemuneration

Reason for Nomination of Outside Directors
The Company’s outside directors were nominated for the reasons outlined below and their ability to supervise management

Directors who are Audit & Supervisory
Committee members: No more than¥100 million annually

other important meetings. In June 2021, Mr. Hiromasa Suzuki was appointed as an outside director as he is expected to draw
on his wealth of experience in corporate management.
NameReason for Nomination

Hiromasa
SuzukiHe has been appointed as an outside director based on his many years of involvement in the management of Fujirebio Inc.
and his wealth of experience in group management as a top executive of a company, which involved orchestrating theestablishment of Miraca Holdings Inc. As an outside director, he is expected to provide appropriate advice regarding themanagement of the Company. In addition, it has been deemed that he has no material conflict of interest with the Company
and that no conflict of interest will arise with general shareholders.

NorikoMorikawa

He has been appointed as an outside director as he is expected to provide appropriate advice regarding the managementof the Company and on the grounds that he is deeply familiar with corporate legal work as a lawyer and has sufficientinsight to supervise corporate management. In addition, it has been deemed that he has no material conflict of interest
with the Company and that no conflict of interest will arise with general shareholders.
She has been appointed as an outside director as she is expected to provide appropriate advice regarding the managementof the Company and on the grounds that she is well versed in finance and accounting and has broad insight based on her
abundant achievements as a corporate manager and experience working overseas. In addition, it has been deemed that
she has no material conflict of interest with the Company and that no conflict of interest will arise with general shareholders.

(However, excludes the portion of employee salary of directors
who concurrently serve as employees)(Resolution passed at the 69th General Meeting of
Shareholders held on June 15, 2016)(Resolution passed at the 69th General Meetingof Shareholders held on June 15, 2016)(Resolution passed at the 70th General Meeting of
Shareholders held on June 15, 2017)

Fixed amount paid monthly based on roleand position within the Company• Paid at a certain time of the year
according to position within the
Company• Amount calculated according to
the progress of the medium-term
management plan and consolidated ordinary income in the given
business year

• Level of remuneration determined based on position
within the Company• Payment made upon determining the annual basecompensation for each position and, in principle, bydividing the amount equivalent to compensation for
the execution of director duties over the same threeyear period as the medium-term management planby the standard stock price and determining thenumber of shares to grant for each position.

from an external point of view, such as through the proactive exchange of opinions and advice at the Board of Directors’ andMasaaki
SawanoPerformance-Linked Stock Compensation

Short-term incentive remuneration
Linked to performance in relevantbusiness year

3 years*1 Indicates number of full years of service as of June 30, 2021
*2 Jun Furuya served as a director of the Company for two years prior to concurrently serving as an Audit & Supervisory Committee member

Newly
appointed

Bonuses

Fixed remuneration

Remuneration
Type

Newly
appointed

Length ofService*1

to long term)

Note: Percentages apply in the case of full achievement of targets

1 yearGender10% (medium

35% (single year)

3 years*1 Indicates number of full years of service as of June 30, 2021

Name

Variable remuneration

55%

Grant andCalculation
MethodCondition subsequent:
Withdrawn in accordance with the degree of achievement ofconsolidated ordinary income targets under the medium-term
management plan and work performance

Director Remuneration in Fiscal 2020
Classification

Total Amount of
Remuneration(Millions of Yen)

Total Amount of Remuneration by Type (Millions of Yen)
Basic
Remuneration

Restricted Stock
Compensation

BonusesNumber of
Directors Eligible

Directors (Excluding Audit & Supervisory Committee Members)*(Excluding Outside Directors)

208

142

42

24

7

Directors (Audit & Supervisory Committee Members)(Excluding Outside Directors)

18

18

—

—

1

Outside Directors

17

17

—

—

2

* Excludes one director who did not receive any remuneration.

48

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CHORI CO., LTD.

Tsumugu Report 2021

Management Foundation Tailored to Sustainable Growth

Measures to Strengthen Corporate GovernanceRisk Management

Chori recognizes that the enhancement of its corporate governance is a matter of priority for management and has taken and

At Chori, we take measures under normal circumstances towill continue to take the following measures. We have expanded our profit margin through the introduction of a performance-

identify potential risks in our business activities and mitigate such

linked remuneration system and the efforts of directors to instill the same level of awareness for profits in all shareholders inrisks and prevent crises before they occur. We have establishedrisks that are believed to have a significant impact on theorder to strengthen the Company’s performance over the medium to long term.

a system for taking appropriate measures in the event of a crisis

financial position, business results, and cash flow of thethat could have a significant impact on our business and formu-

consolidated company according to the risks listed below,

lated our Risk Management Rules to enable swift and accurate

each of which will be assigned a committee or division

responses to such emergencies while maintaining control of the

responsible for preventing their occurrence.

2001

Separation ofManagement andExecution
Introduces the
Executive Officer
System2005

2012

Promotion ofCompliance
Establishes the Legal
Compliance Committee,
with the president as
the chairman

Revision of
Remuneration
SystemDiscontinues the
Directors’ Retirement
Benefits System

2015

Realization of
Effective
Corporate
Governance
Begins complying with
the Corporate
Governance Code

2016

2017

Strengthening ofAudit Function
Transitions to a
Company with an Audit
and Supervisory
Committee

Revision of
Remuneration
SystemIntroduces the Restricted
Stock Transfer
Remuneration System

Effectiveness of
the Board of
Directors

2018

Promotion ofDiversity
Appoints a female
director and a female
outside director (who isalso an Audit &Supervisory Committee
member)

2020

Management
Transparency and
Fairness
Institutes theGovernance Committee

Conducts questionnaires to evaluate theeffectiveness of theBoard of Directors

Evaluation of the Effectiveness of the Board of Directors

situation and regaining a state of normalcy as quickly as possible.
Under the direction of the president and representative director,

its effectiveness, and uncover and improve on any issues.
The management team at Chori has classified the major

Business and Other Risks
 xternal business environment /E
country risk

Business investment risk

 xchange and interest rateEfluctuations

 isk of natural disasters andRcontagious diseases

 oncentration on specific regionsCand markets

 isk associated with informationRsystems and security

risks in advance and providing the necessary education and isk associated with fluctuations
R
in raw material prices

Compliance risk

training in a voluntary and systematic manner. In addition, efforts

Inventory risk

are made to follow up on the results of our crisis response, verify

Bad debt risk

who assumes overall responsibility of the Company’s risk management activities, measures are taken to identify material issues
pertaining to potential risks, mitigate such risks, and prevent suchrisks from occurring while formulating various methods to detect

Risk of impairment on securities

 isk associated with securingRof personnel

With the objective of enhancing the effectiveness of the Board of Directors, Chori conducted an evaluation of the effectiveness

Ensuring of Thorough Complianceof the Board of Directors for fiscal 2020. The Board of Directors is composed of suitably qualified members that include

Rules concerning compliance systems such as the Guidelines

Chori whereby executives and employees (including contract,outside directors, and the Board of Directors’ meetings are held in a free and open environment that facilitates constructive

for Corporate Behavior shall be established to set compliancetemporary, and other employees) can receive consultation anddiscussions and the exchange of opinions. Accordingly, it has been deemed that the Board of Directors is operating appropri-with laws and regulations and social ethics as a code of con-report on compliance violations and other matters. In this way,

ately on the whole and that its effectiveness is ensured.

duct of our business. In order to make all directors, executive

we have established a framework for reporting incidents byofficers, and employees of the Group fully aware of the initia-

ensuring the full confidentiality of the whistleblower, who is able

tives for compliance, corporate divisions shall collaborate toto receive consultation either in-house or through an external

hold compliance training and other training programs. The

point of contact depending on the nature of the incident.

Respondents

All 10 directors (including those who are Audit & Supervisory Committee members) in fiscal 2020 (registered questionnaire)

Method of Evaluation
and Analysis

The secretariat of the Board of Directors (Corporate Management Department) gathers the questionnaire results, which areevaluated and analyzed by the Governance Committee and the Board of Directors upon the ensuring of confidentiality.

Questionnaire Content

The questions are based on the following four main items:
Agenda of the Board of Directors’ meetings
Composition of the Board of Directors
Operation of the Board of Directors
Systems supporting the Board of Directors

Overview of Evaluation
Results

The Governance Committee, which was established in March 2020, conducted in-depth discussion on matters concerning the succession plan for the representative director, executive remuneration, and the appointment and dismissal ofmanagement executives, which were identified as being in need of more discussion in the previous year, and the details ofsuch discussions were shared appropriately with the Board of Directors.
Meanwhile, it was deemed that there is a need for further discussions on the major direction of our corporate strategies,
compliance, and business risks as well as for more opportunities to train directors. Going forward, we will hold morein-depth discussions on the medium- to long-term policies and plan at the Board of Directors’ meetings and improve thetraining of our directors in order to continue to enhance the effectiveness of the Board.
In addition, we will look into the use of third-party external consultants in our evaluations and analyses of the effectiveness of the Board of Directors.

Legal Compliance Committee, with the president and representative director as the chairman, shall discuss importantInternal Whistleblower System
Consultant

matters regarding the compliance of the Group and report theresults to the Board of Directors and the Executive Committee
as necessary. In the event of a significant legal violation orcompliance violation on the part of a management executive,in accordance with the laws and regulations and the Articles
of Incorporation, the Governance Committee shall deliberateon the dismissal of the management executive in question

KIITE (Fully confidential)
A system of contact through which whistleblowers can receive consultation and request warnings to
be given to the person being reported while maintaining full confidentiality and without undergoingan in-depth investigation.

Human Resources & General Affairs Department
KOTAETE (Confidentiality possible at the request of the whistleblower)
A system of contact through which requests for consultation and investigation involving both thewhistleblower and the person being reported can be made and matters such as workplace harassment and serious compliance violations requiring investigation can be reported.

and the Board of Directors shall adequately discuss andMaintenance of a Certain Level of Independence from Our Parent Company
As of March 31, 2021, Chori’s parent company TORAY

credibility, and enjoy other benefits that come with being a

INDUSTRIES, INC. held 52.78% of voting rights in the Com-

Group company.

Legal Compliance Committee

consider his or her dismissal based on those results.
A system of contact has been established throughout

Internal
hotlineChori Labor Union
Audit & Supervisory Committee

External
hotline(Law firm
Advisory office /external firm)

Internal Control

pany. We constantly work to strengthen the combination

With the exception of one director who does notof our ability to sell and collect information on textiles andexecute business, the executives and employees at Chori

Our Basic Policy on Internal Control System was formulated

chemicals, which represent our core business, in Japan anddo not concurrently serve as executives or employees at thein May 10, 2006 to serve as a set of fundamental guidelines

overseas and TORAY INDUSTRIES' ability to develop mate-parent company or Group companies and the Company

for the establishment of a framework for ensuring the

rials in order to generate synergies and enhance corporate

does not accept employees through transfers from otherappropriate execution of business toward realizing soundvalue for both companies. By operating under a parent

companies. In addition, at Chori we have our own manage-

company, Chori is able to gain a better understanding ofment plan in place, through the execution of which we havemarket trends and the business environment, enhance its

developed and will continue to develop our business.

corporate management and sustainable growth.
Since then, this policy has been amended to reflect changes
in the Group’s business environment and business activities.

For details on our internal control system, please refer to our Corporate Governance Report.
https://www.chori.co.jp/csr/governance.html (in Japanese only)

50

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CHORI CO., LTD.

Tsumugu Report 2021

Management Foundation Tailored to Sustainable GrowthInternal Audit
In regard to internal audits, the Company has establishedOutside directors and the Audit & Supervisory Committee

Messages from Outside Directors

the Internal Auditing Department (consisting of four

receive reports regularly on audits conducted by the Internal

members) directly under the president and representative

Auditing Department and verify the status of business execu-

In fiscal 2020, despite the influence of COVID-19, Chori put up solid results and made steadydirector. The Internal Auditing Department conducts auditstion of each department and subsidiary. The Audit &strides with its medium-term management plan, including the M&A of Sumitex Internationalon the appropriateness and efficiency of the Company’s

Supervisory Committee reports the results of audits to andCompany Limited. Conversely, further investigation needs to be conducted to obtain morebusiness activities from a fair and independent point of view.

exchanges opinions with the Internal Auditing Department.

details on the cause of the Chengxing Group’s debt issues while formulating and enforcing

The Internal Auditing Department also evaluates the status

The Audit & Supervisory Committee requests the Internalmeasures to prevent similar incidents from occurring again in the future. I also believe that moreof implementation and operation of internal controls con-Auditing Department to provide information or conduct inves-improvements need to be made to the effectiveness of Chori’s corporate governance.

cerning financial reporting in accordance with the Financial

tigations when necessary, thereby working closely together toInstruments and Exchange Act.

Corporate governance made its way into the industry in the first place to serve as ameans for monitoring the activities of management by shareholders. Legal experts such as

ensure that audits are carried out efficiently.

myself believe that it is our duty to determine and state the legality of the decisions of management at the Board of Directors’ meetings, as well as the intent behind such decisions

Cross-Shareholdings

when they involve significant risks, even if made in a legal manner.

The Company and its subsidiaries may acquire and hold shares

The Company appropriately exercises the voting rights ofof listed companies (hereinafter “cross-shareholdings”) in ordercross-shareholdings from the perspective of whether or not

the exchange of opinions. Moreover, the corporate entity, headed by the president, is actively

to maintain, expand, and sustainably develop their businesses.

the Company and the investee company can expect increases

engaged in running business activities. On the other hand, the Company is in need of a frame-

In such cases, the Board of Directors and other bodies decidein their corporate value over the medium to long term, while

work for conducting business audits on its subsidiaries. I will offer more advice in regard toon acquisitions after determining the department in charge ofrespecting the management policies of investee companies.

the acquisition and considering the business conditions of the
Directors verifies the significance of the cross-shareholdings

Holding of Shares for Purposes Other Than Pure
Investment (Cross-Shareholding)each year and considers the sale or reduction of shares that are

FY2018FY2019FY2020investees and the profitability of the investment. The Board of

Shares Held

32

30

30

verified each year for their economic rationality from the per-

Total Amount(Billions of Yen)

4.0

3.4

4.1

profitability of the investment, transaction scale, and relevant
profits, and are either held or replaced upon resolution of the

Masaaki Sawano
Outside Director, Audit &Supervisory Committee Member

deemed to be of no significance. Those shares that are held arespectives of the significance of each acquisition and holding,

The Board of Directors’ meetings are held in a free and open environment that encourages

this as we move forward.
While we are currently in an era full of uncertainties due to COVID-19, Chori’s basic stanceis to develop new businesses in its areas of expertise, employ sound risk management practices, and expand the scope of its business. Moreover, as it continues to expand its businessaround the world, Chori must constantly remain up-to-date on and seek solutions tobusiness- and human rights-related issues as well as the SDGs, in order to continue to growits business in the years ahead.
In fiscal 2020, despite the impact of COVID-19, Chori was able to address various needs,

Note: The shareholdings of CHORI CO., LTD. for which the largest monetary amount isrecognized on the balance sheets in relation to investment in equity securities (themonetary amount of equity securities recognized) have been stated.

including those for hygienic materials, which made an impact on both society and its operating results. I also believe that given the nature of its business, the Company has done an

Board of Directors and other bodies.

outstanding job of overcoming the challenges associated with conducting all aspects of its
business remotely by improvising according to the situation. To achieve the goals of Chori

Policies Regarding Constructive Dialogues with Shareholders

Innovation Plan 2022 under this unprecedented business environment, all of Chori’s employees will be expected to enhance their skill sets going forward.

The Company promotes constructive dialogues with shareholders based on the following five policies.

My hope is that management takes action to orchestrate the Company’s further growth(1) The executive officer in charge of information handling oversees mattersrelated to IR and public relations, cooperates with the Corporate
Planning Division and relevant departments, and communicates­information to shareholders and investors.

• Individual investors
The Company promotes dialogues with its individual shareholders byholding company briefings exclusively for such investors, which areattended by the president and representative director of the Company.

while ensuring awareness of its mission and reason for existence among all of its stakeholders.

(2) The relevant internal departments proactively cooperate toward theachievement of constructive dialogues with shareholders through the
preparation of disclosure materials and the sharing of important­information while conducting their business activities.

• Institutional investors
The Company holds financial briefings through the attendance of thepresident and representative director and management executives
upon the conclusion of its six-month and full-year financial results
announcements. At these financial briefings, the Company reports on
the details of its financial performance, addresses various questions,and collects the opinions of its shareholders. In addition, the departments in charge of IR and public relations conduct individual visits andbriefings for institutional investors.

Committee, which is headed by an outside director, in 2020. Meanwhile, I see a need for im­(3) Methods of dialogue other than individual meetings• General meeting of shareholders
The Company regards the general meeting of shareholders as anopportunity to fulfill its responsibility of providing explanations toshareholders and works accordingly to carefully address theirquestions and understand the intent of their opinions. In the event ofimportant announcements regarding management information, suchas the medium-term management plan, the Company reports on its
current status and collects the opinions of shareholders throughsuch measures as the holding of briefings on the management plan
upon the conclusion of the general meeting of shareholders.

(4) Feedback
The Company promotes the sharing and use of information obtained
from dialogues through the reporting of opinions of shareholders to therespective committees and their disclosure to the directors, management executives, and relevant departments as necessary.
(5) The Company takes appropriate measures to ensure thorough information management through compliance with the Insider Trading
Prevention Regulations.

The framework underpinning all of this is corporate governance. Chori has been strengthening
its corporate governance over the years, as exemplified by the establishment of its Governanceproving the transparency and reinforcing the internal control and governance functions of its
subsidiaries and overseas affiliates. I hope to be able to continue to analyze, assess, and facilitate the growth of Chori’s business by drawing on the experience I have gained at an audit firm

Noriko Morikawa
Outside Director, Audit &Supervisory Committee Member

and through my role in managing all aspects of a corporate management division at a foreigncompany, including overseas assignments. Chori is expected to take a more active approach toincorporating the SDGs and ESG initiatives into its growth strategies, and I hope to aid in thiscapacity by offering specific solutions that are truly relevant and valuable to Chori’s business.
Chori is a company that has overcome trying times over its 160-year history through thecollective efforts of its employees. As such, there is a sense of unity among its employees. I
look forward to seeing Chori develop its business to a whole new level on the strengths of its
outstanding teamwork and flexibility.

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CHORI CO., LTD.

Tsumugu Report 2021

Management Foundation Tailored to Sustainable Growth

Directors, Audit & Supervisory Committee
Members, and Executive Officers(As of July 1, 2021)“Number of shares held” indicates the number of CHORI CO., LTD. shares held.

Directors
President, CEO & COO,
President and Executive Officer

Director, Senior Managing
Executive Officer

Kazuo Sakihama

Shigemasa Yabu

Number of shares held: 32,617

Number of shares held: 21,282

Director, Executive Officer

Director (Part-Time)

Kazuhiro Tohge

Mitsuo Ohya
Number of shares held: 0

Number of shares held: 9,151
Special Appointee of the President (in relation to
the Textile Division)

Significant concurrent positions

CEO & COO

General Manager of Corporate Planning Division,
Executive Chief Representative for China of theCompany, and General Manager of
Pharmacovigilance & Quality Assurance OfficeOutside Director*

Director, Full-Time Audit &Supervisory Committee Member

Outside Director,* Audit &Supervisory Committee Member

Outside Director,* Audit &Supervisory Committee Member

Jun Furuya

Masaaki Sawano

Noriko Morikawa

Hiromasa Suzuki
Number of shares held: 0

Number of shares held: 4,930

Executive Vice President and Representative
Member of the Board of TORAY INDUSTRIES, INC.

Number of shares held: 0

Number of shares held: 0
Significant concurrent positions

Significant concurrent positions• Member of Advisory Council on Fundamental Issues in
Corporate Management of Urban Renaissance Agency• Outside Director of Showa Denko K.K.
• Outside Director of Mitsubishi Heavy
Industries, Ltd.

• Member of Advisory Council on Fundamental Issues in
Corporate Management and Rent Council of Urban
Renaissance Agency

Independent Director

Independent Director• Member of Business Evaluation Monitoring Committeeof Urban Renaissance Agency

Independent Director• Outside Auditor of Japan Federation of Certified Public
Tax Accountants’ Associations• Member of Kanto Regional Government Asset Council,
Kanto Local Finance Bureau, Ministry of Finance• Chairperson of Tokyo Metropolitan Government Election
Administration Commission

Executive Officers (Excluding Those Who Concurrently Serve as Directors)
Managing Executive Officer

Managing Executive Officer

Senior Executive Officer

Senior Executive Officer

Hiroshi Yoshida

Yoshihiro Teratani

Satoko Nakayama

Tatsuyuki Sakoda

Number of shares held: 12,519

Number of shares held: 12,378

General Manager of Textile Division, Senior
Manager of Synthetic Fiber Business Department,
General Manager of Logistics Department (Textile)of the Company, and General Manager of
Hokuriku Branch

General Manager of Chemicals Division, Senior
Manager of Life & Fine Chemicals Business
Department, and General Manager of Logistics
Department (Chemicals) of the Company

Executive Officer

Executive Officer

Masao Nakamura

Naohiko AshidaNumber of shares held: 0
Senior Manager of Chemical & Materials Business
Department

Number of shares held: 13,829
Deputy General Manager of Corporate Planning
Division (Human Resources & General Affairs
Department, Information System Department), andGeneral Manager of CHORI Innovation Activities of
the Company

Number of shares held: 6,774
President & CEO of Miyako Kagaku Co., Ltd.

Number of shares held: 0
Senior Manager of Technical Material & Garments
Business Department, Chairman of CHORI(DALIAN) TRADING CO., LTD., and Chairman of
CHORI (DALIAN) COMMERCIAL IMPORTEXPORT CO., LTD.

* Outside director as stipulated in Article 2, Item 15 of the Companies Act.

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