May 28, 2020

Notice of Convocation

The 154th Ordinary General Meeting of Shareholders

Teijin Limited

Disclaimer: Please note that the following is a translation of the original Japanese documents prepared for theconvenience of our non-Japanese shareholders with voting rights. Although this translation is intended to be complete
and accurate, the Japanese original shall take precedence in the case of any discrepancies between this translation andthe original. Certain information regarding voting procedures that is not applicable for shareholders resident outside
Japan has been omitted or modified as applicable. In addition, these materials will not facilitate your status as a registeredshareholder authorized to attend the Ordinary General Meeting of Shareholders. Every shareholder attending theOrdinary General Meeting of Shareholders is required to present the Voting Card, which is sent to the registeredshareholder together with the original Notice of Convocation in Japanese, to the receptionist at the meeting.

Contents
Notice of Convocation of the 154th Ordinary General Meeting of Shareholders
Reference Documents for the General Meeting of Shareholders
Proposals and Reference
Proposal 1: Election of Nine (9) Directors
Proposal 2: Election of Two (2) Statutory Auditors
Attached Reports
Reports on Operations for the 154th Fiscal Year
1. Current Status of the Teijin Group(1) Progress and Results of Operations(2) Changes in Assets and Profit and Loss
(3) Capital Investments(4) Financing(5) Management Policies and Tasks Ahead(6) Primary Businesses(7) Primary Business Places(8) Employees(9) Significant Subsidiaries(10) Primary Lenders and Amount of Borrowings
2. Matters Regarding the Shares of the Company
3. Stock Acquisition Rights
4. Corporate Governance System
5. Directors and Statutory Auditors
6. Accounting Auditor
7. Policy Regarding the Determination of Dividends from Retained Earnings
8. Systems to Ensure Appropriate Business Operations and the Status of its Implementation
9. Financial Statement(1) Consolidated Balance Sheets(2) Consolidated Statements of Income(3) Consolidated Statements of Changes in Net Assets
Consolidated Statements of Comprehensive Income (Reference)
Consolidated Statements of Cash Flows (Reference)1

(Securities code: 3401)
May 28, 2020
Dear Shareholders
Jun Suzuki
President and Representative Director
Teijin Limited
2-4, Nakanoshima 3-chome,
Kita-ku, Osaka 530-8605,
Japan
Notice of Convocation ofth

the 154 Ordinary General Meeting of Shareholders

You are cordially invited to attend the 154th Ordinary General Meeting of Shareholders of Teijin Limited (“theCompany”) to be held as set forth below.

If you do not expect to attend the meeting, you may vote on the proposal for voting using the following method.
Please refer to the following “Reference Documents for the General Meeting of Shareholders,” and exercise
your voting rights by 5 p.m., Thursday, June 18, 2020. (Japan Time)[In case of voting by Mail]
Please indicate your approval or disapproval of the proposal on the enclosed Document for the
Exercise of Voting Rights, and mail the document so that it arrives by the above deadline.

[In case of voting by Internet etc.]
Please access to the web-site to exercising voting rights (https://evote.tr.mufg.jp/) through personal Computer or
Smartphone with the log-in ID and temporary password indicated in the enclosed Document for the Exercise of
Voting Rights, and input your approval or disapproval of the proposals according to the instructions on the window.

2

Details
1. Date and Time of the Meeting:
Friday, June 19, 2020, at 10 a.m. (Japan Time)(The door opens at 9 a.m.)
2. Place:
The Westin Osaka, 2nd Floor Ball Room, 1-20, Oyodonaka 1-chome, Kita-ku, Osaka , Japan

3. Purposes
Reports:
The Reports on Business Report, Consolidated Financial Statements, Non-Consolidated Financial Statements andthe Report by the Accounting Auditor and the Board of Statutory Auditors of the results of audit on theConsolidated Financial Statements, for the 154th Fiscal Year (April 1, 2019 to March 31, 2020)
Proposal 1: Election of Nine (9) Directors
Proposal 2: Election of Two (2) Statutory Auditors

4. Decision on Convocation(1) If you do not indicate either approval or disapproval on the Document for the Exercise of Voting
Rights, we shall treat such “no answer” as your “approval” on the proposal.
(2) In the event of an overlap in the exercise of voting rights via the Document for the Exercise of Voting
Rights and the Internet voting system, the exercise of voting rights via the Internet voting system shall prevail.
(3) If you vote more than once using the same method, your last vote shall prevail.
5. Attachments to Notice of Convocation and Reference Documents for the General Meeting of Shareholders
If any revision should be required to the Business Report, Consolidated Financial Statements, Non-Consolidated
Financial Statements, or Reference Documents for the General Meeting of Shareholders, such revision will be postedon the Company’s website. (https://www.teijin.com/)• If you attend the General Meeting of Shareholders, please submit the attached Document for the Exercise of
Voting Rights to the reception of the meeting.
・If you attend the General Meeting of Shareholders by proxy, you may exercise your voting rights byauthorizing one(1) other shareholder with voting rights to act as its proxy as stipulated in the Company’s
Article of Incorporation.

3

Reference Documents for the General Meeting of Shareholders
Proposals and Reference
Proposal 1: Election of Nine (9) Directors
The terms of office of nine (9) Directors,— Jun Suzuki, Kazuhiro Yamamoto, Yasumichi Takesue, Yoshihisa
Sonobe, Akihisa Nabeshima, Fumio Ohtsubo, Yukako Uchinaga, Yoichi Suzuki and Masaru Onishi—will expire at
the conclusion of this General Meeting of Shareholders.
Shareholders are therefore requested to elect the following nine (9) Directors (of whom seven (7) are up for
reelection).
The candidates for Director are as follows.
No.

1

Candidate’s Name

Personal History, Positions and(Date of Birth)

Significant Concurrent Positions
Apr. 1983

Joined Teijin Limited

Apr. 2011

President, Teijin Holdings Netherlands B.V.

【Reappointment】

Apr. 2012

Corporate Officer, Teijin Limited

Jun Suzuki

Apr. 2013

Executive Officer, Teijin Limited(February 19,1958)

Jun. 2013

Director, Executive Officer, Teijin Limited<Participation in Board ofApr. 2014

President & Representative Director (Incumbent)

directors meetings>
12 times out of 12 (100%)

Number ofCompany’s Shares
Owned

46,900Shares

CEO (Chief Executive officer) (Incumbent)<Significant Concurrent Positions>
President, Japan Chemical Fibers Association
Officer, Japan Association of Corporate Executives (Keizai Doyukai)<Reason of the nomination of the candidate for director>
After assuming the post of President & Representative Director (CEO) in April 2014, Jun Suzuki formulated a revised medium-term plan in November of the same
year, and promoted the completion of structural reforms on which his predecessor worked. He formulated the medium-term plan “ALWAYS EVOLVING20172019” in February 2017 and “2020-2022ALWAYS EVOLVING “in February 2020. He is promoting growth strategies for the future.

4

No.

Candidate’s Name

Personal History, Positions and(Date of Birth)

Significant Concurrent Positions【Reappointment】

Apr. 1980

Joined Teijin Limited

Jun. 2009

Corporate Officer, Teijin Limited

Apr. 2014

Corporate Strategy Officer, Teijin Limited

Jun. 2014

Director, Corporate Officer, Teijin Limited

Apr. 2016

Director, Executive Officer, Teijin Limited

Apr. 2017

Responsible for Corporate Strategy

Yoshihisa Sonobe
2

Number ofCompany’s Shares
Owned

Responsible for Global Strategy(October 17,1956)
Responsible for Legal and Intellectual Property<Participation in Board of
directors meetings>

Apr.2018

9,200 Shares

Responsible for Corporate Strategy
Officer

12 times out of 12 (100%)

Responsible for Global Strategy
Apr. 2019

Director, Senior Executive Officer, Teijin Limited
CFO(Chief Financial Officer), (Incumbent)

Apr.2020

Representative Director, Senior Executive Officer,
Teijin Limited (Incumbent)

Yoshihisa Sonobe assumed the posts of Corporate Strategy Officer in April 2014, Director, Corporate Officer in June of the same year, Director, Executive Officer
in April, 2016, and he became responsible for Corporate Strategy and Global Strategy in April 2017. He worked on the planning of strategies toward the achievementof structural reforms and growth strategy which are the most important issues for the Company. He assumed the posts of Director Senior Executive Officer
and CFO.in April 2019 and Representative Director in April 2020. He is making efforts of maintaining a sound financial base and increasing corporate value.

【Reappointment】

Apr. 1982

Joined Teijin Limited

Apr. 2015

Corporate Officer, Teijin Limited

Apr. 2017

Executive Officer, Teijin GroupAkihisa Nabeshima
3

General Manager, Healthcare Business Group(January 17, 1960)
President, Teijin Pharma Limited<Participation in Board of
directors meetings>

Apr. 2019

4,500 Shares

Responsible for Healthcare Business of TeijinGroup (Incumbent)

9 times out of 9 (100%)
Jun. 2019

Director, Executive Officer, Teijin Limited(Incumbent)

Akihisa Nabeshima assumed the posts of Corporate Officer in April 2015. He became Executive Officer of the Teijin Group in April 2017 and he has made efforts
to increase profitability of the healthcare business as General Manager of the Healthcare Business Group of the Company and as President & Representative Directorof Teijin Pharma Limited. He became President Healthcare Business of Teijin Group in April 2019 and Director Executive Officer in June 2019. He
has been working on further increasing profitability of the healthcare business, which constitutes a part of the core strategies of the Company,
as well as on growth of new healthcare business, which are the themes of the Company’s Transformation Strategy.

5

No.

Candidate’s Name

Personal History, Positions and(Date of Birth)

Significant Concurrent Positions

Number ofCompany’s Shares
Owned

Apr. 1986

Joined Teijin Limited

Apr. 2013

Corporate Officer (Riji) , Teijin Group
GeneralManager,New

Materials

Business

Development Department【New Candidate】

Chief Representative of Teijin Electronics Korea

4

Toshiya KoyamaCo., Ltd.

(May 19,1960)
Apr. 2015

Corporate Officer, Teijin Group

Apr. 2017

Executive Officer, Teijin Group (Incumbent)

6,400 Shares

General Manager, Material Business Group
Apr. 2020

President, Material Business of Teijin Group(Incumbent)<Reason of the nomination of the candidate for director>
Toshiya Koyama has been working to increase earnings in the materials business of the Company, as Corporate Officer (Riji) of Teijin Group in April 2013,
Corporate Officer of Teijin Group in April 2015, and Executive Officer of Teijin Group in April 2017. In April 2020, he assumed the role of President,
Material Business of Teijin Group, and is working to further increase profits in the materials business, which is one of our key strategic businesses, and expand thematerials business, which is the theme of our Transformation strategy.

【New Candidate】

5

Apr. 1985

Joined Teijin Limited

Apr. 2016

Corporate Officer, Teijin Group (Incumbent)

Eiji Ogawa

General Manager, Resin and Plastic Processing

6,275 Shares(October 26, 1962)
Business Unit, Teijin Limited
Apr. 2019

Chief Officer, Corporate Strategy (Incumbent)<Reason of the nomination of the candidate for director>
Eiji Ogawa was appointed Corporate Officer of the Teijin Group in April 2016 and had been working to increase profits in the resin business as General Managerof the Resin and Plastic Processing Business Unit. He assumed the posts of Chief Officer (Corporate Strategy) in April 2019 and is making effort to formulate
strategies to achieve our most important tasks of business portfolio transformation and strengthening of management basis for creating growth platforms.

6

No.

Candidate’s Name

Personal History, Positions and(Date of Birth)

Significant Concurrent Positions【Reappointment】

Apr. 1971

Candidate for Outside
Director

Number ofCompany’s Shares
Owned

Joined Matsushita Electric Works, Ltd., (currently
Panasonic Corporation)

Jun. 1998

Director, Matsushita Electric Works, Ltd.,

Jun. 2000

Managing Director, Matsushita Electric Works,
Ltd.

Fumio Ohtsubo

Jun. 2003(September 5, 1945)<Participation in Board of

Matsushita Electric Works, Ltd.,
Jun. 2006

directors meetings>
12 times out of 12 (100%)

6

Representative Senior Managing Director,

President, Representative Director, Matsushita
Electric Works, Ltd.,

Jun. 2012

Chairman of the Board, Representative Director,
Panasonic Corporation

Jul. 2013

3,000
SharesSpecial Advisor, Panasonic Corporation(Incumbent)

Jun. 2016

Director, Teijin Limited (Incumbent)
Member of the Advisory Board, Teijin Limited(Incumbent)<Significant Concurrent Positions >Special Advisor, Panasonic Corporation
Outside Statutory Auditor The Kansai Electric Power Co., Inc.
Trustee, Nippon Life Ins.
Director, Kansai University
Trustee, Japan-Indonesia Association, Inc.
<Reason of the nomination of the candidate for director>
Fumio Ohtsubo has served as President and Chairman of the Board of Panasonic Corporation. As the Chairman of the Board of Directors of the Company, herevitalizes the Board of Directors and enhance its effectiveness based on his abundant business experience and high level of insight. As the Director, he is providing
appropriate advice and suggestions regarding the Company's business strategy and governance, as well as officer appointments and compensation. Furthermore, asa member of the Advisory Board, he has fulfilled his duties sufficiently in deliberation of important matters such as appointment and dismissal of the CEO, evaluationof the CEO's performance, and recommendations for overall management. We continue to select him as a candidate for Outside Director.
The amount of transactions between Panasonic Corporation and the Company accounts for less than 1% of the consolidated net sales of either company.

7

No.

Candidate’s Name

Personal History, Positions and(Date of Birth)

Significant Concurrent Positions
Jul. 1971

Joined IBM Japan, Ltd

Candidate for Outside

Apr. 1995

Director, IBM Japan, Ltd

Director

Apr. 2000

Director, Executive Officer, IBM Japan, Ltd

Apr. 2004

Director, Senior Executive Officer. IBM Japan,【Reappointment】

Number ofCompany’s Shares
Owned

Ltd
Apr. 2007

Board Chair, Japan Women’s Innovate Network(Incumbent)

7

Jun. 2007

Director, Benesse Corporation

Apr. 2008

Director, Vice Chairman, Benesse Corporation

Yukako Uchinaga

Representative Director, Chairman of the Board,(July 5, 1946)<Participation in Board ofPresident & CEO, Berlitz Corporation
Oct. 2009

directors meetings>
12 times out of 12 (100%)

Director, Executive Vice President, Benesse

500 Shares

Holdings, Inc.
Apr. 2013

Honorary Chairperson, Berlitz Corporation

Sep. 2013

President & CEO, Globalization Research InstituteCo., Ltd. (Incumbent)

Apr. 2014

Board Chair, Japan Diversity Network Association

Jun. 2018

Director, Teijin Limited (Incumbent)
Member of the Advisory Board, Teijin Limited(Incumbent)<Significant Concurrent Positions >Board Chair, Japan Women’s Innovate Network
President & CEO, Globalization Research Institute Co., Ltd.
Outside Director, HOYA Corporation<Reason of the nomination of the candidate for outside director>
Yukako Uchinaga has extensive business experience, having served such roles as Director, Senior Executive Officer at IBM Japan, Ltd. and Director,
Executive Vice President at Benesse Holdings, broad knowledge of the information technology field, and deep insight in matters concerning diversity.
As the Director based on this, she provides appropriate advice and points out on diversity activities including IT activities for women and IT / healthcare
business in addition to our business strategy and governance. Furthermore, as a member of the Advisory Board , she has fulfilled her duties sufficiently indeliberation of important matters such as appointment and dismissal of the CEO, evaluation of the CEO's performance, and recommendations for overallmanagement. We continue to select her as a candidate for Outside Director.
The Company pays membership fees to Japan Women’s Innovative Network (“J-Win”), at which the candidate serves as President, however the amountof this transaction accounts for less than 0.1% of the consolidated net sales of the Teijin Group and it is less than 1% of the total membership fee revenue
that J-Win receives.

8

No.

Candidate’s Name

Personal History, Positions and(Date of Birth)

Significant Concurrent Positions【Reappointment】
Candidate for Outside

Apr. 1975

Joined Ministry of Foreign Affairs, Japan (MFA)

Jun. 1997

Deputy Permanent Representative of Japan to the

Number ofCompany’s Shares
Owned

World Trade Organization (WTO) in Geneva

Director
Apr. 2003

Minister’s Secretariat (MFA)

Yoichi Suzuki

Sep. 2005

Consul-General of Boston(September 25, 1950)

Dec. 2008

Director-General for economic Affairs of MFA

Aug. 2010

Ambassador to Singapore<Participation in Board ofAug. 2013

Ambassador to France

directors meetings>

Jun. 2016

Government Representative and Ambassador in

12 times out of 12 (100%)charge of the Kansai region
Mar. 20178

1,000 Shares

Ambassador for International Economic Affairs
and Chief Negotiator for the Japan EU EPA

Apr. 2018

MFA retired

Jun. 2018

Director, Teijin Limited (Incumbent)
Member of the Advisory Board, Teijin Limited(Incumbent)<Significant Concurrent Positions >Advisor to President and Visiting Professor, Chubu university
Adviser, Amundi Japan Ltd<Reason of the nomination of the candidate for outside director>
Although Yoichi Suzuki does not have direct experience in corporate management, he has a wealth of knowledge and experience in negotiations on
international economics and trade issues as a diplomat. As the Director, he provides appropriate advice and points out business strategies from a global
viewpoint in addition to our business strategy and governance. Furthermore, as a member of the Advisory Board, he has fulfilled his duties sufficiently indeliberation of important matters such as appointment and dismissal of the CEO, evaluation of the CEO's performance, and recommendations for overallmanagement. We continue to select him as a candidate for Outside Director.

9

No.
9

Candidate’s Name

Personal History, Positions and(Date of Birth)

Significant Concurrent Positions【Reappointment】

Apr. 1978

Joined Japan Air Lines Co., Ltd.

Candidate for Outside

Apr. 2007

President JAL Aircraft Maintenance Narita

Director

Apr. 2009

Executive officer, JAL International Co., Ltd

Jun. 2009

President of Japan Air Commuter

Feb. 2010

President Japan Air Lines Corporation (JAL group

Masaru Onishi(May19, 1955)

COO)<Participation in Board of
directors meetings>

Number ofCompany’s Shares
Owned

President Japan Air Lines International Co., Ltd.
Nov. 2010

9 times out of 9 (100%)

President Japan Air Lines International Co., Ltd.
(Organizational change)

Mar. 2011

Representative Director, President Japan Air Lines
International Co., Ltd.

Apr. 2011

Representative Director, President Japan Airlines
Co., Ltd. (Company name change from Japan Air
Lines International Co., Ltd. to Japan Airlines Co.,
Ltd.)

Feb. 2012

312 Shares

Representative Director, Chairman Japan Airlines
Co., Ltd.

Apr. 2014

Director, Chairman Japan Airlines Co., Ltd.

Jul. 2018

External Affairs Representative, Japan Airlines
Co., Ltd. (Incumbent)

Jun. 2019

Director, Teijin Limited (Incumbent)
Member of the Advisory Board, Teijin Limited(Incumbent)<Significant Concurrent Positions >External Affairs representative, Japan Airlines Co., Ltd.

Outside Director, Mitsui O.S.K. Lines, Ltd.
Advisor, Mitsubishi Heavy Industries, Ltd.
Visiting Professor, Toyo university
Trustees, International university<Reason of the nomination of the candidate for outside director>
Masaru Onishi has served as president and chairman of Japan Airlines Co., Ltd. and he has abundant business experience and high level of insight. As the
Director, he is providing appropriate advice and suggestions regarding the Company's business strategy and governance, as well as officer compensation
and appointments. Furthermore, as a member of the Advisory Board, he has fulfilled his duties sufficiently in deliberation of important matters such asappointment and dismissal of the CEO, evaluation of the CEO's performance, and recommendations for overall management. We continue to select him
as a candidate for Outside Director.

10Note 1: Fumio Ohtsubo, Yukako Uchinaga, Yoichi Suzuki and Masaru Onishi are candidates for Outside Directors. The
Company requires the candidate for Outside Director to satisfy all the requirements of Independent Director stipulated by
the Company. These four (4) candidates satisfy all such requirements. Since they also satisfy the requirements of
independence stipulated by Tokyo Stock Exchange Group, Inc., the Company has registered candidates for Outside
Director up for reappointment, Fumio Ohtsubo, Yukako Uchinaga Yoichi Suzuki and Masaru Onishi at the Tokyo Stock
Exchange as Independent Directors. The contents of the requirements of “Independent Director” stipulated by theCompany can be viewed at the Company’s Web site: (https://www.teijin.com/ir/management/governance/requirements/).
Note 2: The Company has entered into liabilities limitation agreements with Fumio Ohtsubo, Yukako Uchinaga, Yoichi Suzuki
and Masaru Onishi who are currently Outside Directors, which limit the liabilities of each Director to ¥20 million or theminimum amount stipulated in Article 425, Paragraph 1, of the Companies Act, whichever is higher, in accordance withthe provisions of Article 427 of the Companies Act and the Company’s Articles of Incorporation.
Note 3: There are no special interests between the candidates and the Company.
Note 4: The chart below indicates the dates of the first appointment of the Outside Director for each candidate and the tenures inposition as Outside Director before the closing of this General Meeting of Shareholders.

Name

Date of First Appointment

Tenure in Position

Fumio Ohtsubo

June 22, 2016

4 years

Yukako Uchinaga

June 20, 2018

2 years

Yoichi Suzuki

June 20, 2018

2 years

Masaru Onishi

June 20, 20191 yearNote5: In March 2020, when Fumio Ohtsubo was serving as an Outside Statutory Auditor at The Kansai Electric Power Co.,
Inc., the company was issued a business improvement order by the Ministry of Economy, Trade and Industry based on
the Electricity Business Act, due to the receipt of a large amount of money and goods by executives and employees
involved in the company’s power generation business and general power transmission and distribution business, theissuance of improper orders to the parties providing the money and goods, and weak corporate governance.
As an Outside Statutory Auditor of The Kansai Electric Power Co., Inc., he regularly encouraged caution on theimportance of legal compliance at both meetings of the company’s Board of Directors and meetings of its Audit &Supervisory Board. After the facts of the matter were confirmed, he fulfilled his responsibility by providing appropriate
examination and offering advice in relation to strengthening the system for compliance with legal and other requirements,
establishing operational management systems to ensure the appropriateness and transparency of operations, strengthening
the auditing function as well as on initiatives to prevent recurrence.

11

Proposal 2: Election of Two (2) Statutory Auditors
The terms of office of two (2) Statutory Auditors — Noriaki Endo and Nobuo Tanaka —will expire at the conclusion ofthis General Meeting of Shareholders.
Shareholders are therefore requested to elect the following two (2) Statutory Auditors
The Board of Statutory Auditors has already approved this proposal.
The candidates for Statutory Auditor are as follows.
No.

Candidate’s Name
(Date of Birth)
Apr. 1987
Apr. 2016

Number ofCompany’s
Shares Owned

Joined Teijin Limited
Corporate Officer, Teijin Group
Akio Nakaishi
General Manager, Carbon Fibers & Composites(October 15, 1962)
Business Unit
3,193 Share
President, Toho Tenax Co., Ltd.
Apr. 2017
Corporate Officer, Teijin Group
General Manager, Composites Business Unit
Apr. 2020
Teijin Group Executive Staff (Incumbent)<Reason of the nomination of the candidate for Statutory Auditor>
Akio Nakaishi has experienced the technological development and production of the fiber business (high-performancefibers, aramid fibers, and carbon fibers). He was appointed General Manager, Carbon Fibers & Composites Business Unit andPresident, Toho Tenax Co., Ltd. in April 2016 and General Manager, Composites Business Unit in April 2017. From his
knowledge about the technology of the materials business and practical experience in our business, he is expected to monitor
overall management and provide effective advice. Therefore, the Company judges that he can fulfil his duties appropriately
as Statutory Auditor.
【New Candidate】

1

Personal History, Positions andSignificant Concurrent Positions

12

No.

Candidate’s Name
(Date of Birth)【New Candidate】

Personal History, Positions andSignificant Concurrent Positions
Apr.1982

Candidate for Outside
Corporate Auditor

Jun. 1996
Jun. 1999

Jun Arima(July 23, 1959)

Jan. 2001
Jun. 2002
Jun. 2006
Jul. 2007
Jul. 2008

2

Apr. 2011

Mar. 2018

Joined Ministry of International Trade and Industry(MITI, Current Ministry of Economic, Trade andIndustry METI)
Counsellor, Permanent Delegation of Japan to the OECD
(Energy Advisor)
Director, Energy Efficiency Policy Coordination, New
Energy Policy Coordination, Energy and Environment
Office, ANRE (Agency of Natural Resources andEnergy), MITI
Director, International Energy Strategy, ANRE/MITI
Head, Country Studies Division, International Energy
Agency (IEA)
Director, International Affairs Division, ANRE/METI
Counsellor, International Energy Negotiation,
ANRE/METI
Deputy Director General for Global Environmental
Affairs, METI
Director General, Japan External Trade Organization(JETRO) London
Special Advisor on Global Environmental Issues,
METI
METI retired

Number ofCompany’s
Shares Owned

0 Shares<Significant Concurrent Positions >Professor, Graduate School of Public Policy, University of Tokyo
Project Leader, 21st Century Public Policy Institute
Distinguished Senior Policy Fellow, Asia Pacific Institute of Research
Senior Fellow, Nonprofit Organization International Environment andEconomy InstituteConsulting Fellow Research Institute of Economy, Trade and Industry (RIETI),Distinguished Senior Research Fellow, Asia Pacific Institute of Research(APIR)<Reason of the nomination of the candidate for Outside Statutory Auditor >Although Jun Arima does not have direct experience in corporate management, he has been involved in resource andenergy, global environmental and economic issues since joining Ministry of International Trade and Industry(MITI, Current Ministry of Economic, Trade and Industry METI). We expect that he will contribute to maintaining andimproving our compliance and provide advice and suggestions for the environmental management that we aim for based on
his wealth of knowledge and experience, so we judge that he will be able to properly perform his duties Outside Statutory
Auditor.

Note 1: Jun Arima is a candidate for Outside Statutory Auditor. The Company requires the candidate for Outside Statutory
Auditor to satisfy all the requirements of Independent Statutory Auditor stipulated by the Company. This candidate
satisfies all such requirements. Since he also satisfies the requirements of independency as stipulated by Tokyo Stock
Exchange Group, he will be registered by the Company as “Independent Statutory Auditor”. The contents of therequirements of Independent Auditor” stipulated by the Company can be viewed at the Company’s Web site:(https://www.teijin.com/ir/management/governance/requirements/).
Note 2: If Akio Nakanishi and Jun Arima elections are approved, the Company will enter into a liabilities limitationagreement with her, which limits her liabilities to ¥20 million or the minimum amount stipulated in Article 425,
Paragraph 1, of the Companies Act, whichever is higher, in accordance with the provisions of Article 427 of theCompanies Act and the Company’s Articles of Incorporation.

Note 3: There are no special interests between each candidate and the Company.

13

Attached Reports
Reports on Operations for the 154th Fiscal Year (April 1, 2019 to March 31, 2020)
1. Current Status of the Teijin Group(1) Progress and Results of Operations
1) Progress and Results of Operating Activities①Sales and Income
In the global economy, business confidence deteriorated primarily in the manufacturing sector. This mainly reflected arecession in the PRC due to the impact of prolonged trade friction between the U.S. and the PRC and a decline in demand forautomobiles in the PRC and Europe. In addition, the global spread of the novel coronavirus outbreak, which has been reported
in PRC since December 2019, have been impacting production and consumption activity around the world toward the end of
the last quarter.
Teijin Group’s long-term vision is “to be a company that supports the society of the future” with aiming to realize a sustainable
society. Guided by this vision, Teijin Group has implemented its three-year Medium-Term Management Plan launched in
FY2017, ended March 31, 2018. In FY2019, the final year of plan, we took several key steps in the Materials Business Field.
Here, we strove to increase net sales by executing intensive investment in the automotive composites business, while deciding
on and implementing large capital expenditures in aramid fibers and carbon fibers. Moreover, as part of portfoliotransformation, we transferred our subsidiaries in Films to Toyobo Co., Ltd. In the Healthcare Business Field, we worked to
expand business by acquiring new businesses and obtaining licenses, while bolstering our operational capability byreorganizing the pharmaceuticals and home healthcare businesses.
In this environment, for FY2019, the Teijin Group posted net sales of ¥853.7 billion, a decrease of 3.9% year on year, andoperating income of ¥56.2 billion, a decrease of 6.3% year on year. These results reflected the impact from generic productsin Europe and the US on a mainstay pharmaceutical and the impact of sluggish market conditions for polycarbonate resins ,despite a firm earnings performance in aramid fibers, the Healthcare business in Japan and IT. Ordinary income decreased
9.8% to ¥54.3 billion, partly due to a decline in non-operating income reflecting the impact of foreign exchange movements.
Profit attributable to owners of parent decreased 44.0% to ¥25.3 billion, mainly due to recording one-time expenses associatedwith the transfer of subsidiaries in Films, and a goodwill impairment related to subsidiary in the Polyester Fibers & Trading
and Retail Business Group. As a result, ROE of 6.3% for FY2019 missed its target (over 10 %), while ROIC based on operating
income of 8.7% achieved the target (over 8%). In addition, EBITDA of ¥107.2 billion for FY2019 missed its target (over¥120 billion) for the final year of the previous Medium-Term Management Plan (FY2019), but it has grown steadily.

②Analysis of Assets, Liabilities and Net Assets
Total assets as of March 31, 2020 amounted to ¥1,004.2 billion, down ¥16.4 billion from the end of FY2018. The main
reason for this decrease was the impact of transferring the shares of subsidiaries in Films and excluding them from thescope of consolidated subsidiaries. Meanwhile, there were increases in cash and deposits and tangible assets. The
increased tangible assets were due to capital expenditures made to build a new production site for carbon fibers andramp up production capacity in Composites, and the application of IFRS 16 Leases.
14

Total liabilities amounted to ¥592.8 billion, down ¥0.6 billion from the end of FY2018. The main component of thischange was a decline in trade payables, while there was an increase in interest-bearing debt due to the application of
IFRS 16 Leases.
Total net assets amounted to ¥411.4 billion, down ¥15.8 billion from the end of FY2018. This decrease was mainly due
to the impact of declines in valuation difference on the fair valuation of shares held and in foreign currency translation
adjustment.
Segment operating results (sales and operating income) of the Teijin Group are as follows.
(Billions of yen / %)Fiscal 2018

Fiscal 2019

ChangePercentage

Material

263.9

230.3

-33.6

-12.7

Polyester Fiber & Trading

318.3

306.3

-12.0

-3.8

Composites Others

89.4

97.2

+7.9

+8.8

Material Sub Total

671.6

633.8

-37.7

-5.6

Health Care

157.5

153.9

-3.6

-2.3

Others

59.5

66.0

+6.4

+10.8

Total

888.6

853.7

-34.8

△3.9

Material

23.5

21.3

-2.2

△9.3

Health Care

35.5

32.6

-2.9

△8.2

Others

7.2

8.0

+0.8

+11.6

Elimination and corporate

-6.1

-5.6

+0.5

-

Total

60.0

56.2

-3.8

△6.3

Materialand Retail

Net sales
Operating income

15

Business Segment Results for fiscal 2019 were as follows:
I. Materials Business Field
In the Materials Business Field, sales were ¥633.8 billion, down ¥37.7 billion (decreased 5.6%) year on year, and operating
income was ¥21.3 billion, down ¥2.2 billion (decreased 9.3%). EBITDA was ¥57.3 billion, up ¥0.9 billion year on year.
Material Business GroupIn Aramid, mainstay Twaron para-aramid fibers saw a slight decrease in sales volume for automotive applications, such as
friction materials and rubber reinforcements, due to the impact of a decrease in demand for automotive. However, productmix and pricing efforts contributed positively to profits.
In Carbon Fibers, sales of TENAX carbon fibers were soft for use in aircraft, mainly reflecting inventory adjustments in the
supply chain. In addition, sales volume of compound applications for automotive and electronics decreased because of
persistently decreasing demand since the final stretch of the previous fiscal year.
In Resin and Plastics Processing, sales volume of our mainstay polycarbonate resin products was kept mostly unchanged
from the previous amid declining demand mainly due to trade friction between the US and the PRC and the spread of thenovel coronavirus disease. Whereas, commodity products for polycarbonate resins were impacted by falling sales prices.
As part of portfolio transformation, we transferred our subsidiaries in Films to Toyobo Co., Ltd. on October 1, 2019.
Polyester Fibers & Trading and Retail Business GroupIn Fiber Materials and Apparel, domestic production of sports textiles and sales of men’s heavy clothing struggled. This was
because of sluggish market conditions in Japan and global mainly due to trade friction between the US and the PRC and unsettled
weather. In Industrial Textiles and Materials, sales of automotive materials were affected by sluggish automobile sales in Europe
and the PRC. However, sales remained favorable for infrastructure reinforcement materials, and polyester staple fiber for water
treatment filter applications and synthetic leather.

Composites, Others
In Composites, we recorded mostly firm sales of mass-produced automotive components by Continental Structural Plastics
Holdings Corporation. These firm sales reflected increased demand for vehicle categories such as pick-up trucks and SUVs
in North America. However, sales were affected by the spread of the novel coronavirus disease from last March.

II. Healthcare Business Field
In the Healthcare Business Field, sales were ¥153.9 billion, down ¥3.6 billion (decreased 2.3%) year on year, andoperating income was ¥32.6 billion, down ¥2.9 billion (decreased 8.2%). EBITDA was ¥44.6 billion, down ¥2.7 billion
year on year.
In Pharmaceuticals, sales of the hyperuricemia and gout treatment FEBURIC (febuxostat) and Somatuline®*, a treatment
for acromegaly, pituitary gigantism, and neuroendocrine tumors, expanded steadily in the Japanese market. However, thesales of the FEBURIC in Europe and the US market were impacted by the entry of generic products.
16

* Somatuline® is the registered trademark of Ipsen Pharma, France.
In Home Healthcare, rental volume for continuous positive airway pressure (CPAP) units for the treatment of sleep apnea
syndrome (SAS) increased favorably, owing to an increase in the number of contracted facilities as we focused on building
a clinical treatment network for SAS. In addition, we maintained a high level of rental volume for therapeutic oxygen
concentrators for home oxygen therapy (HOT), with proactive sales for portable oxygen concentrators and integrated
oxygen concentrators (Hi-Sanso i).
In the area of New Healthcare initiatives, the implantable medical products business posted a solid business performance.

III. Others
In Others, sales were ¥66.0 billion, up ¥6.4 billion (increased 10.8%) year on year, and operating income was ¥8.0 billion,up ¥0.8 billion (increased 11.6%) year on year. EBITDA was ¥11.3 billion, up ¥1.3 billion year on year.
In IT, the e-comics distribution service and IT services for hospitals and enterprises posted a steady performance.

2) Progress and Results of Non-Operating Activities
The progress and results of non-operating activities conducted by the Teijin Group (“the Group”) during the
fiscal year under review were as follows.
The expectations and responsibilities placed on companies to resolve global social issues, such as the United Nations’Sustainable Development Goals (SDGs), are becoming incredibly large. Considering these social issues, the Group hasorganized the risks and opportunities for the Company and established five types of materiality and KPI to pursue as
management issues. In response to these materiality issues, in addition to providing solutions through our business, theGroup is working to strengthen our foundation in reducing our environmental impact as well as in diversity and inclusion.
In terms of reducing environmental impact, the Group established medium- and long-term environmental goals to
reduce emissions of CO2, water, and hazardous chemicals. Regarding the Company’s CO2 emissions, we haveestablished goals of reducing total emissions by 20% by 2030 and of realizing zero emissions by 2050. We aim to achievethese goals by continuing and enhancing initiatives in energy conversion and increased productivity. In response to theincreasingly serious global issues of water shortages and water contamination, we set a goal of 30% improvement perunit of freshwater withdrawal sales by 2030. While expanding the number of products that use little water and promoting
the efficient use of water in our businesses, we are also promoting policies to reduce water risk in locations in regionswith high water risk.
On the issue of “Diversity & Inclusion,” we are promoting personnel diversity, women’s advancement, and workstyle
diversity, aiming to realize an organization that fully demonstrates the abilities of diverse human resources with different
values and experiences in order to revitalize the organization and stimulate innovation. In its promotion of active roles
for women, the Group established a dedicated organization quickly in 2000 and has continuously supported careeradvancement for female employees and continuously provided career support. For three straight years, Teijin has been
selected as one of “Nadeshiko Brands” which is jointly conducted by the Ministry of Economy, Trade and Industry and
the Tokyo Stock Exchange to select enterprises that encourage women’s success in the workplace. Moreover, we areproactively engaging in work style reforms and increased productivity for employees and promoting the design of17

systems to support diverse work styles in step with the time. To streamline our operations and reduce the work load on
employees, we have been implementing RPA (robotic process automation to automate) for repetitive tasks that havebeen carried out by people, and have realized RPS for 63 tasks as of the end of fiscal 2019. Furthermore, starting in April
2019, we introduced a telework system that anyone can use for any reason including nursing care and childcare. The
Company has also created satellite offices to increasing workplace flexibility.
Furthermore, based on shared Group guidelines, the Teijin Group proactively approaches social contribution activities
in line with the characteristics of the different business groups and regions. Among these approaches, we believe nextgeneration education is particularly important, and through the Teijin Kumura Scholarship system provided by the Teijin
Scholarship Foundation that was established to foster young scientists, we have supported around 1,600 science andengineering students over more than 60 years. In 2010, we launched a scholarship system in China, providing
scholarships to 36 students in fiscal 2019. In addition, we are working to support youth sports such as by being a sponsorof the All Japan High School Soccer Tournament, and by endorsing the “Children’s Rights in Sport Principles” promotedby the Japan Committee for UNICEF.
Additionally, we provide continual relief support for the areas affected by the Great East Japan Earthquake, as well as
continually operating a range of initiatives to support employee volunteer activities.
These initiatives have been recognized through the inclusion of the Teijin Group in multiple international social
development investment indexes, such as FTSE4Good, MSCI ESG Index, and DJSI Asia Pacific.

18

(2) Changes in Assets and Profit and Loss
Fiscal Period

151st Fiscal Period 152nd Fiscal Period 153rdFiscal Period 154thFiscal Period
FY2016FY2017FY2018Items

FY2019(Current period)

Net sales

741,292

834,986

888,589853,746

56,512

69,82360,00056,20555,93467,82060,26454,33750,13345,55645,05725,252254.91231.26232.39131.63964,053

981,967

1,020,654

1,004,223

351,830

408,237

427,212411,409(Millions of yen)
Operating income(Millions of yen)
Ordinary income(Millions of yen)
Profit attributable to owners ofparent(Millions of yen)

Net earnings per share(Yen)
Total assets(Millions of yen)
Net assets(Millions of yen)

Note: The stated amount is rounded to the nearest million yen.

(3) Capital Investments
Capital investments by the Group in fiscal 2019 totaled ¥68.6billion, mainly for the purpose of constructing new carbon
fiber production bases and increasing the production capacity of composites business.

(4) Financing
The Company procured finance mainly borrowings from financial institutions and Straight Bond. Also, as a result of anincrease in borrowings and an increase in lease obligations due to the application of IFRS 16 “Leases” amounted to ¥381.9
billion, an increase of ¥12.7 billion from the end of the previous year.

19(5) Management Policies and Tasks Ahead
1) Corporate Vision
To help realize a sustainable society, based on our corporate philosophy, the plan calls for the Teijin Group to deliver
solutions in three key fields: 1) environmental value, 2) safety, security and disaster mitigation, and 3) demographic
change and increased health consciousness.

Provide products and services contributing to global environmental goals such as
prevention of climate change and achievement of a circular economy
Safety,Security,
andDisaster Provide products and services protecting lives and livelihoods from various risks such as
Mitigation Solutions
disasters and accidents
Demographic Change and Increased Health Provide products and services supporting healthy and comfortable living for people ofConsciousness Solutions
all ages
Environmental Value Solutions

2) Priority Measures of the Medium-Term Management Plan
As announced in February 2020, the Teijin Group formulated a new three-year action plan from FY2020, the mediumterm management plan for 2020–2022 “ALWAYS EVOLVING.”
The plan will establish a platform for more solid growth to realize our long-term vision, including thorough initiatives
based on priority measures explained below.

a) Create Opportunities■ Scale of investment resources: To establish the growth platform, the Teijin Group has established a capital investment
and M&A budget of ¥350 billion for the coming three-year period.
■ Major investment in solution fields: The Teijin Group will invest 85% of the above budget in the Three Solutions
fields and accelerate efforts to address pressing issues in global society, aiming to increase sales in these three fields to
75% of total sales by FY2030.

20■ Each business by stage (Strategic Focus, Profitable Growth): The Teijin Group’s business portfolio will be broadly
divided according to the stage of each business into Strategic Focus areas for new businesses, which need to boost theircash-generating abilities and Profitable Growth areas for profitable existing businesses for which the focus is to expand
stably. The goal is to increase cash-generating abilities by transforming the overall business portfolio with a mediumto long-term perspective through a strategic allocation of corporate resources. We will invest 60% (excluding recurringinvestments) and target EBITDA of the Strategic Focus businesses to be at least 1/3 (33%) of the entire Group’s
EBITDA by FY2030.

Materials

Healthcare

Strategic Focus
・Composites for automotive
applications
・Carbon fiber intermediate materials foraircraft・ Comprehensive Community Healthcare
related business・Functional foods
・New Medical devices

・Fibers & Products Converting・IT－othersProfitable Growth・Aramid・Carbon Fiber
・Resin & Plastics Processing
・Separators, Membrane・Pharmaceuticals
・Medical devicesb) Reduce risks (environmental impact)
The Teijin Group will prioritize people in its efforts to realize a sustainable society. In addition, we will deliver
innovative solutions for improved quality of life and to minimize the environmental and social impact of its
businesses. In conjunction with the formulation of the new medium-term management plan, we have set long-termtargets for reducing environmental impact and will proceed with developing business operations and implementing
reduction activities with the achievement of those targets in mind.

Item

FY

Target

CO2 Emission（※）

2030

Avoided emissions” > “Total emissions

Climate Change

2030

20% reduction (total amount) for FY 2018

2050

Net Zero Emissions（CO2 Emission）

Water

2030

Hazardous Materials

2030

30% improvement(per sales unit) for FY 2018

(freshwater intake)
20% improvement (per sales unit) for FY 201821

*CO2 reductions in the downstream segment of the supply chain from the use of the company’s products are used in
calculating the volume of CO2 reduction contributions. The Teijin Group aims for CO2 reduction contribution volumes
higher than the total CO2 emissions for the overall Group and in the upstream segment of the supply chain.

c) Strengthen the business base
The Teijin Group will strengthen its foundation for innovation creation and accelerate its creation of business
opportunities to more quickly deliver sustainable and appropriate solutions and open new markets.

Regarding human resources, the Teijin Group will provide a workplace system that offers flexible workstyles and allows
not only female employees but the entire diversity-rich workforce to demonstrate their abilities and play an active rolewith the hope that it will foster a corporate culture that generates innovation. The Group will also set targets in line with
regional characteristics not only in Japan but also overseas to promote diversity and inclusion throughout the Group.

d) Main business strategies in the Medium-Term Management Plan
■Materials business field
The Teijin Group will accelerate its development of high-added-value applications incorporating high-performancematerials and multi-materialization measures.
【Strategic Focus】
Composites for Automotive

Expand market share in US as No.1 manufacturer and penetrate European and Chinese markets

Carbon Fiber & Intermediate Materials

Obtain several new big programs, and will start mass production and profit contribution

for Aircraft Structures

after FY2023【Profitable Growth】
AramidHigh growth through increased capacity and new applications

Resin & Plastic Process

Secure stable earnings by expanding high value-added business■Healthcare
Utilizing strengths cultivated through existing businesses, the Teijin Group will develop comprehensive community-based
healthcare businesses in sectors including rehabilitation, nursing care, prevention and health promotion.

22

【Strategic Focus】
Innovative healthcare service and products, uncovered as well as covered by the public health

Functional foods business、

insurance (Functional foods, Nutraceuticals, Services supporting healthComprehensive communityhealthcarerelated business

management, Services preventing severity, Artificial joints, absorbable bone-

New Medical devices, etc.

bonding materials, Devices for depression, Devices for rehabilitation etc.)【Profitable Growth】
Strengthen business platform by organizational reform

Pharmaceuticals, Home healthcare

By launch new drugs, mitigating the risk of generic entry of FEBURIC(“FEBURIC cliff”)■Fibers & Products Converting / IT【Profitable Growth】
Fibers & Products Converting

Expansion in growth areas andIT

improvement in basic profitability

Keep growth of E-comics and expansion of healthcare businesse) Numerical targets of Medium-Term Management Plan
The Teijin Group, placing emphasis on both investment efficiency and earning power, identifies its most important
indicators to be ROE (company-wide) and operating profit ROIC (company-wide and business-specific) as the mostimportant profitability indicators, and EBITDA (company-wide and business-specific) as the most important growthindicator. The individual targets for the final fiscal year (FY2022) are shown below.
ROE

10% +

ROIC

8% +

EBITDA150 bil. yen (Materials: 80 bil. yen,

23

Healthcare: 45 bil. yen, Others: 25 bil. yen)(6) Primary Businesses
The Teijin Group conducts various businesses including the manufacture and sale of the products below, operating in the
Materials, Health Care and Others segments.

(As of March 31, 2020)
Business Segments
Materials

Business Fields
AramidPrincipal Products and Businesses
Para-aramid fibers, Meta-aramid fibers,
High-performance polyethylene

Carbon Fibers

Carbon fibers, Oxidized PAN fibers

Plastics

Polycarbonate resin, Polycarbonate sheets & films,
Transparent conductive film,

Materials

PET・PEN ･PBN resin, PPS resin, Frame-retardant
Polyester Fibers &Textiles and ApparelTextiles, Apparel products, General merchandise

Trading and RetailIndustrial Textiles

Fiber materials, Nonwoven Fabric,

and Materials

Industrial and Automotive materials, Living and interior goods,
Resin・films, Packaging materials and construction materials

Composites, others

Composite products

The automotive composite products

Battery Materials

Lithium-ion battery separators, high-performance membrane

Pharmaceuticals

Prescription Drug: Treatment for Hyperuricemia and gout, Agentfor Osteoporosis, Agent for Infection, Sustained-release
expectorant, Transdermal analgesic anti-inflammatory, Treatment
for acromegaly and pituitary gigantism

Health Care

Home Health Care

Home Health Care Services: Oxygen Concentrator for Home
Oxygen Therapy (HOT), Continuous Positive Airway Pressure Unit
(CPAP), Ultrasound Bone Fracture Treatment Device

New Health Care

Medical equipment for joint prostheses, bone joining material,
spinal implant etc.,

IT Services

Information system for general companies, Information system for
hospital, Information services for nursing care providers

OthersNet BusinessElectronic book delivery service

Note: PET (Polyethylene terephthalate), PEN (Polyethylene naphthalate), PBN (Polybutylene naphthalate),
PPS (Polyphenylene sulfide)24

(7) Primary Business Places(As of March 31, 2020)
Business

Function

Location

The Company

Headquarters

Osaka, Tokyo

Materials

Manufacturing

Ehime, Yamaguchi, Gifu, Shizuoka, Hiroshimabases

U.S.A., Germany, the Netherlands, China, Thailand

Operation bases Tokyo, Osaka
U.S.A., Germany, the Netherlands, China, Thailand, Taiwan, Brazil, India,
Mexico, Russia, Singapore
Research bases Shizuoka, Ehime, Gifu, Chiba, Yamaguchi
U.S.A., Germany, the Netherlands, China, Thailand

Materials

Polyester Fibers &Manufacturing

Ehime, Ishikawa, Fukui, Niigata, Gifu, Yamaguchi, Hiroshima, Shimane

Trading and Retailbases

China, Thailand, Vietnam, Germany, Hungary

Operation bases Tokyo, Osaka, Aichi, Niigata, Gifu
U.S.A., Germany, China, Thailand, Vietnam, Myanmar, Indonesia, Mexico
Research bases Ehime
China, Thailand
Composites, Others Manufacturing
bases

Ehime, Gifu
U.S.A., Mexico, South Korea, Portugal, Czech, Germany

Operation bases Tokyo
U.S.A., Mexico, South Korea, Portugal, Czech
Research bases Tokyo, Ehime, Yamaguchi
U.S.A., Germany. France
Health Care

Manufacturing

Yamaguchi, Okayama, Hyogo

bases
Operation bases 12 branches throughout Japan
Research bases Tokyo, Yamaguchi
U.S.A.
OthersOperation bases Tokyo, Osaka, Ehime, Yamaguchi

Note: The function of headquarters is indicated in The Company, and the manufacturing, operation and research bases areindicated in each business segments.

25

(8) Employees(As of March 31, 2020)

Business segments

153rd Fiscal Period

154th Fiscal Period

FY2018FY2019(As of March 31, 2019) (As of March 31, 2020)(Current period)

Change in thenumber of
employees

Materials

15,421

14,578△843

Health Care

3,345

3,505

+160

Others

1,905

1,992

+87

20,671

20,075

△596

Total

Note 1: The number of employees stated above represents the numbers of employees in each segment.
Note 2: The number of employees stated above does not include temporary employees(2,385 employees for the 153rd fiscal period and 2,545 employees for the 154th fiscal period)

26

(9) Significant Subsidiaries(As of March 31, 2020)
Business segments

Subsidiary (Location of

CapitalThe Head Office)Materials

Investment
ratio (%)

Teijin Aramid B.V.

0.02 million ※100.00(the Netherlands)

euro

Teijin Corporation (Thailand)

916.6 million ※100.00

Limited (Thailand)
Teijin Carbon Europe GmbH
(Germany)
Teijin Carbon America, Inc.
(U.S.A.)

Principal businessbaht
0.026 million ※100.00
euro
US$97.5 ※100.00
million

Production and sales of paraaramid fibers
Production and sales ofmeta -aramid fibers and resin
Production and sales of carbon
fibersProcessing and sales of carbon
fibers, Production and sales of
Oxidized PAN fibers

Materials

Teijin Polycarbonate China

720 million

Ltd. (China)
Teijin Chemicals Plastic
Compounds Shanghai Ltd.
(China)RMB
143 million¥2,000(Osaka)millionNantong Teijin Co., Ltd.

¥4,000Polyester(China)millionFibers &Teijin (Thailand) Limited

Trading and(Thailand)

RetailTeijin Polyester (Thailand)

Health Care

100.00100.00

Sales of textiles and others

100.00

Production and sales ofpolyester textile goods

baht

Limited (Thailand)baht

Teijin Logistics Co., Ltd.

¥80

Production of polycarbonate
resin compound

800 million ※100.00
548 million

Production of polycarbonate
resin

RMB

Teijin Frontier Co., Ltd

Composites

100.00

Production and sales ofpolyester fibers

66.87

Production and sales ofpolyester fibers

100.00(Osaka)millionContinental Structural Plastics

US$830 ※100.00

Holdings Corporation (U.S.A.)

millionTeijin Pharma Limited¥10,000(Tokyo)million100.00Transportation and custody of
goods
Production and sales ofComposite products
Production and sales of
medicinal drugs and medical
equipment

Teijin Home Health Care Ltd(Tokyo)¥100 ※100.00
million27

Home health care services
providerBusiness segments

Subsidiary (Location of

CapitalThe Head Office)
Others¥1,590(Tokyo)million(Osaka)Principal businessratio (%)

Infocom Corporation
Teijin Engineering Ltd.

Investment

¥475

58.03

Development and sales ofcomputer software, etc.

100.00

millionEngineering services, design andsales of plants and equipment

Note 1: The Teijin Group has 100 consolidated companies including the aforementioned 16 significant subsidiaries;
68 companies are accounted for via the equity method.
Note 2: ※ indicates the investment ratio including investment by subsidiaries.
Note 3: The Company transferred Teijin Films Solutions Limited to Toyobo Co., Ltd. with the effective date ofOctober 1, 2019. As a result, it has been excluded from important subsidiaries since the previous fiscal year.
Note4: Teijin Home Healthcare Limited changed its name to Teijin Healthcare Limited with effect from April 1,
2020.

28

(10) Primary Lenders and Amount of Borrowings(As of March 31, 2020)
Primary Lenders

Balance of borrowings
Millions of yen

MUFG Bank, Ltd.

130,430Mizuho Bank, Ltd.

35,245Development Bank of Japan Inc.

25,000Note 1: indicates that the balance of borrowings includes loans from overseas affiliate banks.
Note 2: In addition to loans indicated in the balance of borrowings above, the Company borrows ¥97,097million
under syndicated loans.

29

2. Matters Regarding the Shares of the Company (as of March 31, 2020)(1) Authorized shares

600,000,000 shares(2) Issued shares

197,953,707 shares(3) Number of shareholders

97,015(4) Top 10 shareholders of the Company
Shareholders

Investment in the Company
Number of shares held

Shareholding ratio (%)

1

The Master Trust Bank of Japan, Ltd. (Trust account)

14,734,700

7.67

2

Japan Trustee Service Bank, Ltd. (Trust account)

9,092,500

4.73

3

Nippon Life Insurance Company

7,045,501

3.67

4The Employee Stock Ownership Association of Teijin

5,314,013

2.76

5

JP MORGAN CHASE BANK 385151

4,470,283

2.32

6Japan Trustee Service Bank, Ltd. (Trust account 7)

4,376,800

2.28

7Japan Trustee Service Bank, Ltd. (Trust account 5)

3,248,100

1.69

8

MUFG Bank, Ltd.

2,897,287

1.50

9STATE STREET BANK WEST CLIENT – TREATY 505234.

2,652,351

1.38

2,569,140

1.33

10 JP MORGAN SECURITIES JAPAN Co., Ltd

Note: The shareholding ratio has been calculated after excluding Treasury stocks (6,013,284 shares) from theIssued shares.

30

3. Stock Acquisition Rights(1) Status of Stock Acquisition Rights as of the last day of the subject Fiscal Year
Number ofClass and Number of Shares

Issue Price of

Exercise Price ofIssued Stock(Common Stock) to be

Stock Option

Stock Option

Option (unit)

acquired by the Stock Option(per share)(per share)

5th (Jul. 10, 2006)

146

29,200¥3,315¥1 Jul. 10, 2006~Jul. 9, 2026

6th (Jul. 5, 2007)

207

41,400¥3,050¥1 Jul. 5, 2007~Jul. 4, 2027

7th (Jul. 7, 2008)

328

65,600¥1,535¥1 Jul. 7, 2008~Jul. 6 ,2028

8th (Jul. 9, 2009)

420

84,000¥1,265¥1 Jul. 9, 2009~Jul. 8, 2029

9th (Jul. 9, 2010)

349

69,800¥1,305¥1 Jul. 9, 2010~Jul. 8, 2030

10th (Mar. 12, 2012)

737

147,400¥1,225¥1 Mar. 12, 2012~Mar. 11, 2032

11th (Mar. 15, 2013)

698

139,600¥980¥1 Mar. 15, 2013~Mar. 14, 2033

12th (Mar. 14, 2014)

618

123,600¥1,140¥1 Mar. 14, 2014~Mar. 13, 2034

13th (Mar. 18, 2015)

379

75,800¥1,925¥1 Mar. 18, 2015~Mar. 17, 2035

14th (Mar. 16, 2016)

274

54,800¥1,800¥1 Mar. 16, 2016~Mar. 15, 2036

15th (Mar. 17, 2017)287

57,400¥1,955¥1 Mar. 17, 2017~Mar. 16, 2037

16th (Mar. 16, 2018)

294

58,800¥1,732¥1 Mar. 16, 2018~Mar. 15, 2038

17th (Mar. 18, 2019)

321

64,200¥1,627¥1 Mar. 18, 2019~Mar. 17, 2039

18th (Mar. 16, 2020)

266

53,200¥1,138¥1 Mar. 16, 2020~ Mar.15, 2040

Period during which the Stock
Time of Issue (Issue date)

Option may be exercised

Of the above, total number of unexercised Stock Option held by Directors and Statutory Auditors of theCompany (breakdown by each issue of the Stock Option)(As of March 31, 2020)
Directors
Statutory Auditors
Number of
Issue
Number of Directors
Number of Units
Number of Units
Statutory Auditors
Holding Rights
Holding Rightsth
The 8 Issue of the Stock Option
51
51
The 9th Issue of the Stock Option

10

2

5

1

The 10th Issue of the Stock Option

36

3

12

1

The 11th Issue of the Stock Option

60

4

14

1

The 12th Issue of the Stock Option

55

4

12

1

The 13th Issue of the Stock Option

60

4

9

1

The 14th Issue of the Stock Option

57

5

8

1

The 15th Issue of the Stock Option

64

5

－

－

The 16th Issue of the Stock Option

73

5

－

－

The 17th Issue of the Stock Option

96

5

The 18th Issue of the Stock Option

83

5Note 1: No Stock Option is granted to any Outside Directors and Statutory Auditors.
Note 2: The Stock Option held by the Statutory Auditor was distributed as a consideration of performance of duties as
Director or Corporate Officer prior to assuming the position of Statutory Auditor.

31

(2) Stock Option distributed during the subject Fiscal Year
Stock Option distributed during the subject Fiscal Year is stated in the 18th Issue of the Stock Option noted in (1) above.
Status of Stock Option distributed to employees of the Company in the 18th Issue of Stock Option.
No. of Unites
No. of Recipients18322(3) Other important matters concerning Stock Acquisition Rights
Outlines of the Zero Coupon Convertible Bonds due to 2021 (bonds with stock acquisition rights), that were issued
based on the resolution of the meeting of the Board of Directors held on November 26, 2014 are stated below.
Title
The total amount ofdebenture
Issue date
Redemption fixed date
Number of stock acquisitionrightsType of shares to be issued
upon exercise of stockacquisition rights
Number of shares to beissued upon exercise of stockacquisition rights

Conversion price

The contents and the valueof the assets invested on theoccasion of use of the stockacquisition rights

Exercise period of stockacquisition rights

Zero Coupon Convertible Bonds due
to 2021
20 billion yen
December 12, 2014
December 10, 2021
2,000 units
Common shares of the Company
The number is determined by
dividing the aggregate principal
amount of the bonds upon exercise of
the stock acquisition rights by theconversion price¥ 1,872.1 per share (subject toadjustment in certain
circumstances)
In case of the use of the stockacquisition rights, the Bond holder
will invest the bonds upon exercise of
the stock acquisition rights and theBonds price will equal to the facevalue price.
Between December 26, 2014 andNovember 26, 2021

Note: The proposal to pay out ¥30 per share for the year-end dividend was approved at the board of directors meeting on
May 8, 2020.The dividend payout for the previous fiscal year was ¥60 per share, and as a result the conversion price isbeing adjusted. (Effective date: As of April 1, 2020)32

4. Corporate Governance System
Overview
The Teijin Group realizes that its basic mission as a company is to ensure sustainable growth in shareholder value.
On this basis, in order to fulfill our responsibilities to other various stakeholders, we are striving to strengthen
corporate governance. Basic elements of corporate governance are the aim of enhancing transparency, ensuring
fairness, accelerating decision-making, and ensuring monitoring and supervision independence. We are working toestablish and strengthen an effective corporate governance system through “Advisory Board”, “Executive officer
system and board of directors including independent outside directors” and “Auditor system including independent
outside corporate auditors”.
(1) Reasons for Choosing the Current Corporate Governance System
The Company’s Group has adopted and will adopt from time to time mechanisms for corporate governance which isappropriate for achieving the purposes of the Company. Accordingly, the Company will timely review the mechanisms
and such changes may be made in accordance with changes in the social and legal environments.
The current Companies Act requires the Board of Directors to appropriately carry out two functions: important businessdecision and management oversight and supervision. The governance system deemed appropriate is therefore based onthese two core functions, with execution of business led by the Company’s inside directors (limited to Executive
Directors) on the one hand, and management oversight and supervision focused on by outside directors and carried out by
statutory auditors and the Board of Statutory Auditors on the other hand.
Therefore the Company intends to continue to be a company with Board of Statutory Auditors for the time being. At theCompany, the strengthening of the management oversight and supervisory functions and similar corporate governancethat are the aim of a “company with nominating committees” are effectively achieved via an “Advisory Board”, a “Boardof Directors and executive officer system that includes independent outside directors,” and a “Board of Statutory Auditors
system that includes independent outside statutory auditors.”(2) Outline of Current System
1) Decision-Making Bodies
Within the Teijin Group, matters for which the Board of Directors retains authority in accordance with the provisions of
the law are decided by the “Board of Directors,” which meets once a month in principle. Important matters related to
execution of business of the Company or the Teijin Group for which authority has been delegated from the Board of
Directors (individual medium- or short-term plans relating to each business group or function operations, and individual
important matters) are decided by the President and CEO through deliberation in the “Group Strategy Committee,” whichmeets once a week in principle, and the “Group Management Committee,” which meets once a month in principle.
The “Group Strategy Committee” and “Group Management Committee” members consist of the CEO, Responsible for
Business officers, chief officers, and people designated by the CEO. The CEO convenes and chairs both committees. In
addition to the members, the committees are also attended by the full-time statutory auditors.
2) Board of Directors and Corporate Officer System
To expedite decision making and clarify accountability of execution of business, the Company’s Articles of Incorporation
set the maximum members of the Board of Directors to 10 directors, and the Company has introduced a corporate officer
system that delegates broad authority to corporate officers. Currently, the Company’s Board of Directors comprises nine(9) members, including four (4) outside directors whose independence is assured with one of whom is a female director.
In addition, the Articles of Incorporation sets the term of office for directors at one year. The Board of Directors is chairedby the chairman of the Company (in the case of vacant of the chairman of the Board, the director of senior advisor or theoutside director will take the chairmanship of the Board), as a means of separating oversight and supervision fromexecution of business. Currently, the Board of Directors is chaired by an outside director.
3) Selection of Director Candidates
Director candidates are decided by the Board of Directors as personnel that are suitable to be top management of theCompany, with outstanding personality and insight, in consideration of their personal capabilities, past performancerecord, and so forth. The candidates are recommended at the General Meeting of Shareholders.

334) Advisory Board (Management Consultative Committee)
The Advisory Board, comprising both Japanese and non-Japanese experts, has been established to provide advice tomanagement in general and to evaluate the top managements, and operates as a consultative body to the Board of
Directors. The Advisory Board is made up of five to seven outside advisors consisting of two or three non-Japaneseadvisors as well as the Chairman of the Board (in the case of vacant of the chairman of the Board, the senior advisor), and
the President & CEO, and the Chairman of the Board (in the case of vacant of the chairman of the Board, the senioradvisor), chairs the Advisory Board. The Advisory Board also functions as a nominations and remuneration committee,
making recommendations regarding the alternation of the CEO and nomination of a successor, deliberating the selectionof Chairman, deliberating the system and levels of compensation for Teijin Group directors, and evaluating theperformance of the CEO and representative directors. For matters concerning CEO, CEO leaves the room and does notparticipate in the discussion. For matters concerning the chairman, the chairman leaves the room and does not participate
in the discussion.
5) Nomination Consultative Committee and Compensation Consultative Committee as consultative bodies
In addition to the above Advisory Board, the Company shall establish and manage the Nomination Consultative
Committee and the Compensation Consultative Committee, as consultative bodies of the Board of Directors to further
enhance the transparency concerning the appointment of directors and officers. Both committees are made up of two
outside directors, the Chairman of the Board (Vacant seat in the case of the chairman of the Board) and the President &CEO. Outside Director chairs both committees. Both committees shall have a function to make proposals andrecommendations to the Board of Directors with respect to the nomination, evaluation and amount of compensation of
Directors and the Senior Management other than the Chairman and CEO and the nomination of Statutory Auditors.
6) Status of Initiatives to Enhance the Function of Statutory Auditors (Corporate Audits)
The Company’s Board of Statutory Auditors consists of five members, of who, three—a majority—are independent
outside directors who are independent from the company, and one of those three is female. In addition, Gen Ikegami
possesses certified public accountant’s qualification and possesses considerable knowledge of finance and accounting.
Hitomi Nakayama possesses considerable knowledge concerning compliance and risk management as lawyer. Moreover,as a system provided for group consolidated management, the Committee of Teijin Group Statutory Auditors, comprisingstatutory auditors of Group companies, serves to enhance the effectiveness of group-wide oversight and audit and ensure
impartial auditing.
7) Internal Audit System
The Corporate Audit Department, reporting directly to CEO, has been established as an internal audit organization, andcarries out Group-wide and global audits to evaluate efficiency and validity of internal control functions. Furthermore, atcertain listed subsidiaries and so forth, individual internal audit organizations have been established. As of March 31,
2020, the number of internal auditors in the Teijin Group is 23 (excluding internal auditors at listed subsidiaries and soforth).
8) Status of Accounting Audits
The status of certified public accountants who executed business is as follows (items in brackets are the affiliated auditing
firm and number of consecutive years performing audits).
Hidetoshi Fukuda (KPMG AZSA LLC, 1 years), Kiyoshi Hirai (KPMG AZSA LLC, 6 year), Takeharu Kirikae (KPMG
AZSA LLC, 5 years).
The status of assistants who executed auditing is as follows.
Certified public accountants 16, others 20, total 36.
9) Total Risk Management
In April 2003, the Company established the “Total Risk Management (TRM) Committee” beneath the Board of Directors,
as a preventive measure to handle any risks the Company may face. The TRM Committee categorizes the risks into
management strategy or business operating risks and conducts comprehensive management against the risks. The Boardof Directors deliberates and determines basic policies and annual plans related to TRM that are proposed by the TRM
Committee. The CEO is in charge of management strategy risk assessment and provides important judgment materials for
the Board of Directors and so forth. The statutory auditors conduct audits to check whether the Board of Directors is
conducting appropriate policy determination, oversight and supervision regarding TRM.
* The details of Teijin Group “Corporate Governance Guide” (the Company’s Corporate Governance System) can be viewed at
the Company’s Web site: (https://www.teijin.com/ir/management/governance/guide/ )34

(3) Evaluation of the Effectiveness of the Board of Directors
In order to further ensure the effectiveness and enhance the functions of the Board of Directors, the Company conducts
an analysis and evaluation of the effectiveness of the entire Board of Directors (hereinafter, the “Board of Directors
Effectiveness Evaluation”) once a year. The method of the Board of Directors Effectiveness Evaluation for FY2019 andan overview of the results are as follows.
1) Analysis and Evaluation Method①A named self-evaluation questionnaire was conducted for all Directors and Statutory Auditors (14 including Outside
Directors and Outside Statutory Auditors), making reference to advice from external experts.
Furthermore, with the assistance of external experts, the Board of Directors secretariat created a summary of thequestionnaire results, which formed the basis of a discussion within the Board of Directors regarding the effectivenessof the Board of Directors, issues to be addressed, and improvement measures.
②The evaluation points in the questionnaire (35) were compiled from the following eight fields. Respondents evaluatedthem on a five-step scale and made comments (free writing).
(a)Strategies and execution thereof(b) Risk and crisis management(c)
Corporate ethics(d) Performance monitoring(e)Organization and business restructuring-related transactions(f)Management team evaluation, compensation, and succession planning(g) Stakeholder dialogue(h) Composition and operation of the Board of Directors2) Overview of Results of the Board of Directors Effectiveness Evaluation① Summary
The result of the Board of Directors Effectiveness Evaluation conducted by the above process found that there is no
issue with the current corporate governance system and its implementation, and the Company’s Board of Directors is
generally functioning properly and ensuring effectiveness. In addition, the questionnaire result also indicated that there
was a high ratio of positive evaluations for all items.
② Status of response to issues to be addressed continuously
In the Board of Directors Evaluations to date, “Stakeholder dialogue” and “Risk management system enhancement”
were recognized as issued to be addressed continuously. The Company continued to make improvements on theseissues, including continuous reporting to the Board of Directors on the analysis of stakeholder dialogues and the content
of disseminated information, the holding of discussions at the Board of Directors on the content of proposals from the
TRM Committee, which is conducting comprehensive risk management for the Teijin Group, and continuous reportingto the Board of Directors at regular intervals regarding the results of major business partner surveys and the status of
BCP countermeasures.
③ Issues recognized in the Board of Directors Effectiveness Evaluation at this time
The following issues were recognized for enabling the Company’s Board of Directors to perform its original function
with greater effectiveness.
(a)
Deep discussion regarding new business creation(b) Deep discussion regarding the rationality of public listing of parent and subsidiaries(c)
Deep discussion regarding the positioning of consultative bodies
3) Initiatives Going Forward
In FY2020, the Company will continue its initiatives from FY2019. In addition, based on the recent effectivenessevaluation, the Company has decided to further promote the following initiatives as a result of discussion in the Board of
Directors.
(a)Discussion in the Board of Directors about creation of new business(b) Discussion in the Board of Directors about risk management(c)Discussion in the Board of Directors about the positioning of consultative bodies(d) Discussion in the Board of Directors about stakeholder dialogue and the ideal response to the stakeholders formatters including arguments about the rationality of parent and subsidiary listing
The Company aims to increase the effectiveness of the Board of Directors and further strengthen corporate governancethrough these measures.

35

5. Directors and Statutory Auditors(1) Directors and Statutory Auditors(As of March 31, 2020)
Post
President,

Name
Jun Suzuki

Duty, state of significant positions concurrently

Participation

held at other companies
CEO (Chief Executive Officer)

The Board of Directors

Representative

President, Japan Chemical Fibers Association

12/12(100%)

Director

Officer, Japan Association of Corporate Executives(Keizai Doyukai)

Vice President,

Kazuhiro Yamamoto Responsible for Chief Officers of Teijin Group

Representative

The Board of Directors
12/12(100%)

Director
SeniorExecutive Yasumichi Takesue

Responsible for Materials Business of Teijin Group

Officer, Director
Senior Executive

12/12(100%)
Yoshihisa Sonobe

CFO(Chief Financial Officer)

Officer, Director
Executive Officer,

The Board of Directors
12/12(100%)*Akihisa Nabeshima Responsible for Healthcare Business of Teijin The Board of Directors

Director
Director

The Board of Directors

Fumio OhtsuboGroup

9/9(100%)

Panasonic Corporation Special Advisor

The Board of Directors

Outside Statutory Auditor Kansai Electric Power 12/12(100%)
Co., Inc.
Trustee, Nippon Life Ins.
Director, Kansai University
Trustee, Japan-Indonesia Association, Inc.
Director

Yukako Uchinaga

Board Chair, Japan Women’s Innovate Network

The Board of Directors

President & CEO, Globalization Research Institute 12/12(100%)
Co., Ltd.
Outside Director, HOYA Corporation
Outside Director, Aeon Co., Ltd.
Director

Yoichi Suzuki

Adviser to President and Visiting Professor, Chubu The Board of Directors
12/12(100%)

university
Adviser, Amundi Japan Ltd
Director*Masaru Onishi

External Affairs representative Japan Airlines Co., The Board of Directors
9/9(100%)

Ltd.
Outside Director, Mitsui O.S.K. Lines, Ltd...
Advisor, Mitsubishi Heavy Industries, Ltd.
Visiting Professor, Toyo university
Trustees, International university

36

Post

Name

Full-time

Duty, state of significant positions concurrently

Participation

held at other companies

Noriaki Endo

The Board of Directors

Statutory Auditor

11/12(92%)
The Board of Statutory
Auditors
11/12(92%)

Full-time*Masanori Shimai

The Board of Directors

Statutory Auditor

9/9(100%)
The Board of Statutory
Auditors
9/9(100%)

Statutory Auditor

Nobuo Tanaka

Chairman, The Sasakawa Peaceful Fund

The Board of Directors

Outside Director, Chiyoda Corporation

11/12(92%)

Outside Statutory Auditor, Innotech Corporation

The Board of Statutory
Auditors
11/12(92%)

Statutory Auditor

Gen Ikegami

Representative, Gen Ikegami Certified Public The Board of Directors
Accountant Office, Certified Public Accountant

12/12(100%)

Outside Director, TAC Co., Ltd.

The Board of Statutory
Auditors
12/12(100%)

Statutory Auditor

Hitomi Nakayama

Partner lawyer, Kasumigaseki-Sogo Law Offices

The Board of Directors

Outside Director, Royal Holdings Co., Ltd

12/12(100%)

Director, Public Interest Incorporated Foundation

The Board of Statutory“Automotive Dispute Resolution Center”

Auditors

Auditor, Japan Electric Meters Inspection

12/12(100%)

Corporation
Note 1: The directors and statutory auditor marked with * were newly elected at the 153rd Ordinary General Meeting of
Shareholders held on June 20, 2019.
Note 2: Four (4) Directors—Fumio Ohtsubo, Yukako Uchinaga, Yoichi Suzuki and Masaru Onishi —are outside
directors. The Company requires the candidate for outside director to satisfy the requirements of “Independent
Director” stipulated by the Company. These four (4) Directors satisfied all such requirements and maintained
their independence throughout the relevant fiscal year. Because they also satisfy the requirements of
independence as stipulated by Tokyo Stock Exchange Group, Inc., they were registered by the Company as“Independent Director/Auditor” at the stock exchanges. The contents of the requirements of “Independent
Director” stipulated by the Company can be viewed at the Company’s Web site:(https://www.teijin.com/ir/management/governance/requirements/).

37

Note 3: There are no important interests between the Company and any of the entities at which the abovementioned
outside directors hold positions as director/statutory auditor etc.
Note 4: Three (3) Statutory Auditors— Nobuo Tanaka, Gen Ikegami and Hitomi Nakayama —are outside statutory
auditors. The Company requires the candidate for outside statutory auditor to satisfy the requirements of“Independent Statutory Auditor” stipulated by the Company. These three (3) Statutory Auditors satisfied the all
said requirements and maintained their independence throughout the relevant fiscal year. Because they alsosatisfy the requirements of independence as stipulated by Tokyo Stock Exchange Group, Inc., they wereregistered by the Company as “Independent Director/Auditor” at the stock exchanges. The contents of therequirements of Independent Auditor” stipulated by the Company can be viewed at the Company’s Web site:(https://www.teijin.com/ir/management/governance/requirements/).
Note 5: There are no important interests between the Company and any of the companies at which the abovementioned
outside statutory auditors hold positions as director/ statutory auditor etc.
Note 6: Director Yukako Uchinaga retired Outside Director, Aeon Co., Ltd. as of May 22, 2020.
Note 7: Statutory Auditor Gen Ikegami is a Certified Public Accountant and has ample knowledge of finance andaccounting.
Note 8: Statutory Auditor Hitomi Nakayama is qualified as a lawyer and has ample knowledge of compliance and risk
management.
Note 9: The following Directors and Statutory Auditor retired as of June 20, 2019.
Director

Hiroshi Uno

Director

Nobuo Seki

Statutory Auditor

Atsushi Mugitani

Note 10: Changes in posts and duties of Directors during the subject fiscal year are as follows.
Name
Kazuhiro Yamamoto

New Post

Former Post

Vice President,

Vice President,

Representative Director

Representative Director

Date of Change
April 1, 2019

President, Responsible for Chief CFO (Chief Financial Officer)
Yoshihisa Sonobe

Officers of Teijin Group

CIIO

Senior Executive Officer, Director

Executive Officer, Director

CFO (Chief Financial Officer)

Responsible for Corporate Strategy

April 1, 2019

Officer
Responsible for Global Strategy
Akihisa Nabeshima

Teijin Group Executive Officer

Teijin Group Executive Officer

April 1, 2019

President, Healthcare Business of General Manager, Healthcare
Teijin Group

Business Group
President, Teijin Pharma Limited

Executive Officer, Director

Teijin Group Executive Officer

President, Healthcare Business of President, Healthcare Business of
Teijin Group

Teijin Group38

June 20, 2019

Note 11: Changes in posts and duties of Directors following the subject fiscal year are as follows.
Name
Kazuhiro Yamamoto

New Post

Former Post

Director

Vice President,

Date of Change
April 1, 2020

Representative Director
President, Responsible for Chief
Officers of Teijin Group
Yasumichi Takesue

Director

Senior Executive Officer,

April 1, 2020

Director
Responsible for Materials Business of
Teijin Group
Yoshihisa Sonobe

Representative Director,

Senior Executive Officer, Director

Senior Executive Officer

CFO (Chief Financial Officer)

April 1, 2020

CFO (Chief Financial Officer)(2) Liabilities Limitation Agreements
The Company has executed a Liabilities Limitation Agreement with each of four (4) outside directors,
Fumio Ohtsubo, Yukako Uchinaga, Yoichi Suzuki and Masaru Onishi and each of five (5) statutory auditors,
Noriaki Endo, Masanori Shimai, Nobuo Tanaka, Gen Ikegami and Hitomi Nakayama which limits therespective liabilities of each director and statutory auditor to the higher amount of ¥20 million or theminimum liability amount stipulated in Article 425, Paragraph 1, of the Companies Act.

(3) The Amount of Remuneration for Directors and Statutory Auditors, etc.
1) Policy on Deciding on the Amount of Remuneration, Etc. for Directors and Statutory Auditors, or the Calculation
Thereof.
① Basic policy for compensation systems
・The system should enhance awareness of contributing to medium- to long-term increase in earnings and corporate value
・The system should be closely linked to company results, and highly transparent and objective
・Be primarily focused on enhancing shared awareness of interests with shareholders and shareholder-focused managementawareness
・The system should maintain sufficient remuneration levels to secure high-quality management human resources②Remuneration level
・ The remuneration level for internal directors and outside directors is determined each year after verifying theappropriateness of the level of total remuneration for each position, based on the results of a remuneration survey conductedamong major corporations in Japan each year.
③Composition of remuneration, etc. for directors and statutory auditors
・Internal director remuneration is composed of fixed basic remuneration, variable performance-based remuneration (shortterm incentive remuneration), and compensation-type stock options (medium- to long-term incentive remuneration), with theaim of instilling awareness of short-term achievement of performance goals and medium- to long-term improvement ofcorporate value.
39・Remuneration for outside directors and statutory auditors is solely fixed remuneration, not linked with the performance of
the Company.
④ Composition ratio of remuneration
For internal directors, the composition ratio is as follows.
Fixed

Variable remuneration

Total remuneration

remuneration
Basic

Performance-

Compensation-type

remuneration

based

stock options

remuneration
65%

25%

100%

10%

Note1: The ratio for performance-based remuneration and compensation-type stock options is based on 100% achievement of relevant targets.
Note2: From FY2020, the composition ratio of remuneration is changed Basic remuneration 60%, Performance-based remuneration 25% andCompensation-type stock options 15%.

⑤Overview of remuneration elements for internal directors(a) Basic remuneration
The amount paid to each director is determined according to their position and paid as fixed remuneration.
(b) Performance-based remuneration
The payment ratio of performance-based remuneration varies depending on the achievement level of consolidated ROE,
the achievement versus forecast of consolidated EBITDA and consolidated ROIC based on consolidated operating income,and the individual performance evaluation of the director.
(c) Compensation-type stock options
The Company’s stock options are designed based on a compensation-type stock option plan where the exercise price is ¥1(the stock option recipient pays ¥1 per stock). The number of stock options allocated varies depending on the achievementof consolidated ROE and the achievement versus forecast of consolidated EBITDA. Moreover, the allocated stock options
have a condition that allows the recipient to exercise the options within a five-year period after retiring as a director.

⑥Indicators for variable remuneration and reason for their selection
Three indicators presented as performance targets for the medium-term management plan for 2017-2019, “ALWAYSEVOLVING,” have been selected as key performance indicators (KPIs) for variable remuneration: consolidated ROE,
which is a profitability indicator; consolidated EBITDA, which is a growth indicator; and ROIC based on consolidated
operating income, which is an indicator of efficiency of generating profits relative to capital invested. Their selection
will motivate each director to improve the KPIs.
2) Resolutions of Ordinary General Meeting Regarding on Remuneration for Directors and Statutory Auditors , etc.
The maximum annual remuneration for directors of the Company has been ¥700 million, as resolved by the 140th
Ordinary General Meeting of Shareholders, held on June 23, 2006 and the 149th Ordinary General Meeting of Shareholders,
held on June 24, 2015. The amount of the above remuneration includes (1) ¥630 million of annual salary,and (2) ¥70

million for the fair value of compensation-type stock options.
The maximum monthly remuneration for statutory auditors is ¥12 million as resolved by the 133rd Ordinary General
Meeting of Shareholders held on June 25, 1999.

40

3) Remuneration for Directors and Statutory Auditors during the subject fiscal year
(millions of yen)
Inside Directors

Number of

Outside Directors

Directors Total

Inside Statutory

Outside Statutory

Statutory

Auditors

Auditors

Auditors Total

6

5

11

3

3

6

349

66

415

69

36

105

PeopleAmount ofRemuneration
Note 1: Inside Directors means directors other than outside directors and Inside Statutory Auditors means statutory auditors other thanoutside statutory auditors.
Note 2: The Company has no director who is also an employee of the Company.
Note 3: The amounts of above remuneration include ¥65 million, an expected amount of performance-based remuneration to be paid
to the five (5) inside directors appointed at the 153rd Ordinary General Meeting of Shareholders held on June 20, 2019. The
amounts of above remuneration include ¥18 million as compensation-type stock options granted to inside directors for theirduties performed during the subject fiscal year. Performance-based remuneration and stock options were not granted to outside
directors.

4) Method for determining remuneration of directors and statutory auditors
The Advisory Board deliberates on the remuneration of CEO, and the Compensation Consultative Committee deliberates on
the remuneration for directors other than CEO. After the deliberations, proposals are presented to the Board of Directors,
which gives full consideration to the proposals before passing a resolution.
Remuneration, etc. for statutory auditors is decided by consultation of the statutory auditors.

(4) Outside Directors and Outside Statutory Auditors
1) Significant Concurrent Positions and the relation between the Company and the entities at which Outside Directors andOutside Statutory Auditors hold such positions.
They are shown in the above-mentioned「(1) Directors and Statutory Auditors」.

2) Main Activities of Outside Directors and Outside Statutory Auditors
The attendance status of the Board of Directors and Audit & Supervisory Board are shown in the above-mentioned「(1) Directors and Statutory Auditors」.
Category

Name
Fumio Ohtsubo

Main Activities
He offered valuable comments from his extensive management experience andknowledge.
She offered valuable comments from her wealth of business experience,

OutsideYukako Uchinaga

outstanding insights in the IT field, and a deep understanding of diversity.

Directors
He offered valuable comments from his expertise and knowledge of

Yoichi Suzuki

international economic and trade issues etc. cultivated over many years as a
diplomat.
41

Category

Name

Masaru Onishi

Main Activities
After he was appointed on June 20, 2019, he offered valuable comments fromhis extensive management experience and knowledge.
He offered valuable comments from his experience at the government

Nobuo Tanaka

suggestions concerning corporate governance.

OutsideStatutoryagencies and international organization and offered, in particular, advice and

Gen Ikegami

Auditors

He offered valuable comments from his professional knowledge as a Certified
Public Accountant.
She offered valuable comments from her professional knowledge as lawyer,

Hitomi Nakayama

and offered, in particular, advice and suggestions concerning compliance andrisk management.

42

6. Accounting Auditor(1) Name of Accounting Auditor
KPMG AZSA LLC.
(2) Amount of Remuneration(Millions of yen)

Details

Amount1) The amount of remuneration, etc., to be paid by the Company tothe accounting auditor
2) The total amount of cash or other proprietary interest to be paidby the Company and its subsidiaries to the accounting auditor

203
345

Note 1: The amount described in Item 1) of the above table is the total sum of the remunerations for audits under theCompanies Act and the remuneration for the audits under Financial Products & Exchange Act in Japanbecause these are not clearly distinguished from each other in the contract between the Company and the
Accounting Auditor.
Note 2: Of the major subsidiaries of the Company, 10 companies, including Teijin Aramid B.V. , undergo auditing byaccounting firm other than the Accounting Auditor.
Note 3: The Company pays the Accounting Auditor for a fee "Accounting advisory service" etc. (i.e. services other than those
stipulated in Article 2, paragraph 1 of the Certified Public Accountants Law)
Note 4: Based on the Company’s scale and characteristics, the Board of Statutory Auditors has given consent to the
remuneration, etc., to be paid the Accounting Auditor as stipulated in Article 399, Paragraph 1 of the Companies Act, asa result of the confirmation of the audit contents, total audit work done, audit plans of Accounting Auditor and its
rewards estimation.

(3) Policy for Dismissal or Non-Reappointment of Accounting Auditor
The Company has a policy that the Board of Statutory Auditors may dismiss the accounting auditor based on theunanimous approval by the statutory auditors in cases where Article 340, Paragraph 1 of the Companies Act is judged
to apply. Furthermore, the Company has a policy of submitting a proposal regarding dismissal of the Accounting
Auditor to a shareholder’s meeting in the event that it is deemed that a grave obstacle to the Company’s audit operation
involving the Accounting Auditor has occurred, and similarly submitting a proposal regarding the non-reappointmentof the Accounting Auditor in the event that it is deemed necessary to change the Accounting Auditor in light of the
Accounting Auditors’ independence and reliability, or the status of its performance of duties.
In both cases, the submission of the proposals is based on a decision of the Board of Statutory Auditors.
7. Policy Regarding the Determination of Dividends from Retained Earnings
Our basic policy for profit sharing is to ensure dividends are in line with consolidated operating results, targeting a
consolidated payout ratio of 30% for the medium term. We will also determine dividends by giving consideration to theneed to ensure financial soundness, to our ability to maintain stable dividend payments over the medium to long term, andto securing sufficient internal reserves to fund strategic investments aimed at ensuring future growth.

43

8. Systems to Ensure Appropriate Business Operations and the Status of its Implementation(1) Resolutions on Basic Policies for Establishment of Internal Control Systems
The Company passed a resolution regarding the “Basic Policy for Establishment of Internal Control Systems” at a Boardof Directors meeting held on March 30, 2020.
Below is a summary of this resolution, the details of which can be viewed at the Company’s Web site:(https://www.teijin.com/ir/management/governance/).
1) System for Ensuring Compliance with Laws, Regulations and the Articles of Incorporation in the
Performance of Duties by Directors and Employees of the Company and Its Subsidiaries
The Company has declared the basic principles of compliance in its Teijin Group “Corporate Governance Guide” .
To practice these basic principles, the Company shall establish systems and organizational structures that ensure practicaloperation and thorough observation of the Company’s Corporate Philosophy, Corporate Code of Conduct, Group Ethics
Regulations and other related internal regulations.
The Company’s representative directors and other executives shall take the initiative and set good examples in observing
laws, regulations and the Articles of Incorporation, social rules and ethics, and shall promote compliance education andawareness among directors, officers and employees of the Company and its subsidiaries. In order to establish acompliance system across the entire Teijin Group, the Company appoints Chief Social Responsibility Officer as theofficer in charge of compliance.
All directors, officers and employees of the Company and its subsidiaries are required to report to the Teijin entity towhich they belong or to Teijin Limited, whether they detect any violations of laws and regulations or other serious
information concerning compliance, in accordance with Group Ethics Regulations and other internal regulations. Chief
Social Responsibility Officer shall direct and supervise investigations to confirm such reported facts and, upon
consultation with CEO (President), determine appropriate measures.
The Company shall provide necessary means for directors, officers, employees and business partners to directly reportany violation or doubtful activities of non-compliance in the Company or its subsidiaries. Such measures shall ensure thatanonymity of the caller is protected and that the caller does not get any disadvantageous treatment. Important reports aswell as measures taken by the relevant Teijin entity and their results shall be announced as appropriate to, and shall berecognized by, all directors, officers and employees of the Company and its subsidiaries.
The directors of the Company and its subsidiaries shall have their performance of duties audited by the statutory auditors,
and will respect any advice or recommendations received from the statutory auditors.
The Company places Corporate Audit Department directly supervised by CEO, which performs internal auditing of the
Teijin Group’s execution of business and conducts the evaluation of the internal control system and proposes its
improvement.
The Company shall maintain a resolute attitude toward pressure from antisocial forces, including demands for payoffs
from specific shareholders or interference by crime syndicates, and shall not allow such interference. Chief Social
Responsibility Officer shall be appointed as the person in charge of actions against antisocial forces. Chief Social
Responsibility Officer shall establish action policies and other rules in consort with general manager, Human Resources
Division and shall ensure observance of such policies and rules by directors, officers and employees within the Company
and its subsidiaries.
To intensify the validity of the decision to be made by the Board of Directors, in principle, 4 or more of the directors shallbe outside directors satisfying the requirements for independence stipulated by the company.

2) Rules and Other Systems for Management of Risk of Loss in the Company and its Subsidiaries
The Board of Directors of the Company shall operate a total risk management system to deal with any kind of risks thatmight threaten sustainable business development.
Total Risk Management (TRM) Committee, shall mainly deal with the business operational risks and strategic risks to
Teijin Group, and shall propose basic policies and annual plans related to TRM to the Board of Directors of theCompany. Chief Social Responsibility Officer is in charge of establishing a system across the Teijin Group to manage
business operation risk, and shall identify problems and deal with such risks upon occurrence thereof. CEO shall assess
strategic risks and present his/her assessment to the Board of Directors of the Company as an important element uponwhich managerial decisions are made.
The Company shall establish a system for the Teijin Group to ensure the continuation of businesses when faced with risk
events including disasters, the inappropriate performance of duties by directors, officers or employees, and damage tocritical IT systems.

443) Systems for Ensuring that Duties by Directors and Employees of the Company and Its Subsidiaries Are
Performed Efficiently
The Company shall establish Group regulations to provide the necessary rules and guidelines for the Group to ensure
efficient business operations throughout the Teijin Group.
The Board of Directors of the Company shall have the representative directors and other executives conduct the operationof the Company and decisions for the items on which the representative directors and other executives have beendelegated decision-making powers shall be made by the organization and procedures in accordance with the internal
regulations. These regulations shall be revised as may be necessary to reflect any revision and/or abolition of laws andregulations and/or to increase the efficiency of the representative directors and other executives in executing their duties.
The Board of Directors of the Company shall organize the basic structure of Teijin Group, and shall establish efficientmanagement, oversight and supervision system.
The Company shall formulate the Group medium-term management plan, and each fiscal year it shall formulate shortterm plans, key management targets, and budgets, as well as carrying out progress checks, in order to realize the mediumterm management plan.
4) Systems for Ensuring that Proper Business Operations Are Conducted within Teijin GroupThe Company shall establish Group Regulations to provide the necessary rules and guidelines for the Group to ensure
appropriate business operations throughout the Teijin Group. Based on the Group regulations, each company shallestablish its own regulations, and use appropriate processes for deciding on important matters.
The Company shall discuss important matters concerning Teijin Group companies at its Group meetings and so forth, andto require Teijin Group companies to make reports.
The representative directors and other executives shall provide necessary instructions to ensure that the Teijin Group
entities have appropriate internal control systems.
Corporate Audit Department of the Company shall operate or supervise internal audits of the Teijin Group’ s business
operations and ensure the efficiency and validity of internal control functions over the entire business of the Teijin Group.
Statutory Auditors of the Company shall establish appropriate systems, such as those for close coordination with theaccounting auditors and Corporate Audit Department, to ensure effective and appropriate supervision and auditing of theGroup’s entire business operations.
To ensure the reliability of its financial reporting, the Company shall establish a group-wide internal control system forthe financial reporting and the operation of the Teijin Group individual operational processes, and shall properly andefficiently operate and assesses such systems.
5) Systems for the Preservation and Management of Information in Relation with the Directors’ Performanceof Their Duties
Directors shall appropriately preserve and manage minutes of shareholders’ general meetings, minutes of Board of
Directors’ meetings, and other documents and important information concerning the performance of their duties inaccordance with relevant company regulations. Chairman of the Board*, who chairs the Board of Directors, is
responsible for the supervision and oversight of the preservation and management of such documents and important
information. Documents concerning directors’ performance of their duties shall be preserved for at least ten (10) years
and shall be accessible when necessary.
*The case of vacant of the Chairman of the Board, CEO will perform the office of the Chairman.
6) Provisions Concerning Employees Assigned to Assist the Statutory Auditors in Performing Their Duties,
the Independence from Directors of Such Employees, and the Validity of Instructions Given to Such
Employees
The Company shall establish Teijin Group Auditors Office under the direct control of full-time statutory auditors andappoint two or more employees, in principle, to assist Statutory Auditors in performing their duties. The members of
Teijin Group Auditors Office may concurrently become statutory auditors of Teijin Group companies; however it shallnot concurrently become corporate officers connected with performance of duties at Teijin Group companies.
To secure the independence of members of Teijin Group Auditors Office above, all decisions concerning personnel
measures regarding the members of Teijin Group Auditors require the prior consent of the full-time Statutory Auditors.
The full-time Statutory Auditors shall assess the performance of the members of Teijin Group Auditors Office.
7) System for Reporting to Statutory Auditors by Directors, Corporate Officers and Employees of theCompany and its Subsidiaries, and System for Other Reports to Statutory Auditors
The full-time statutory auditors shall attend the meetings of the Board of Directors and other important meeting bodies of
the Company, as well as those of the important meeting bodies of the main subsidiaries.
Representative directors and other executives shall report at the meetings of the Board of Directors and other important
meetings on their performance of duties with regard to the business operations, functions and subsidiaries under theircharge.
45

The directors, officers and employees of the Company and its subsidiaries shall immediately report to the statutory
auditors when they discover incidents that causes or may cause significant erosion of public trust of the Company,
adverse effects on the performance of the Company, significant damage to the internal or external environment, safety
and health (ESH); or related to product liability, significant violations of internal regulations, or other similar incidents.
The directors, officers and employees of the Company and its subsidiaries shall report on the business operations,functions, and subsidiaries under their charge, when they deem it necessary to do so, or at the request of the statutory
auditors of the Company, and shall cooperate with the investigations of the statutory auditors of the Company.

8) System for Ensuring that Persons Reporting to the Statutory Auditors Are Not Subject to Unfair
Treatment Because of Such Reporting
The Teijin Group’s Group Ethics Regulations and other regulations stipulate that no person shall be treated unfairly
because of reporting or giving notice of illegal conduct and so forth.
9) Policy Concerning Processing of Expenses and Obligations Arising with Respect to the Statutory Auditors’
Performance of Duties, Prepayment of Expenses, and Reimbursement Procedures
The Company shall bear the expenses and obligations required for the statutory auditors’ performance of duties, and shallpromptly respond to requests for pre-payment of expenses in accordance with laws and regulations after checking therequests.
10) Other System for Ensuring that the Audits of Statutory Auditors Are Conducted Effectively
To ensure transparency, the majority of statutory auditors consists of independent outside statutory auditors that satisfy
the requirements for independence that the Company specifies.
The statutory auditors shall enter into advisory agreements with outside law firms in order for themselves and statutory
auditors of the Company and its subsidiaries to form independent opinions. When they consider it necessary in the courseof conducting audits, the statutory auditors can, at their own discretion, retain outside advisers, including Certified Public
Accountants and other consultants.
(2) Summary of the “Internal Control System Operating Status”
In accordance with the “Basic Policy for the Establishment of Internal Control Systems,” the operating status of theCompany’s internal control system for the relevant year is as follows.
1) Operating Status Regarding Compliance with Laws and Regulations
The Company has published the Teijin Group “Corporate Governance Guide” and the related regulations necessary to
carry out its basic policy on the Company intranet, and has designated each October as Corporate Ethics Month in whichinternal training is held, promoting compliance education and awareness. Furthermore, for important decision making,the related divisions and departments perform verifications, working to prevent any violations of laws and regulations.
The Company has established a framework to promote compliance under the direction of the Chief Social Responsibility
Officer, which works to identify and respond to problems across the Teijin Group. The Chief Social Responsibility
Officer also responds appropriately to important compliance issues reported by the directors, officers and employees of
the Company and its subsidiaries based on the Group Ethics Regulations, which establish rules for reporting illegal
conduct and other responses, and make regular reports to the TRM Committee.
The Company has established an internal reporting system including an anonymous compliance hotline, responding
appropriately to hotline inquiries from group companies in Japan and overseas, protecting the reporter, and publishing thestatus of the response biannually on the intranet, promoting education and awareness.
The Company respects and responds appropriately to points made by Statutory Auditors in audits and in evaluations of
the condition and operational status of internal control systems.
The Company’s Corporate Audit Department performs internal auditing across the Teijin Group based on the annual plan,and reports the audit results to the Directors and Statutory Auditors as necessary.
The Company maintains an action policy against anti-social forces in its Corporate Code of Conduct, and promotes
education and awareness at its Corporate Ethics Month.
2) Operating Status Regarding Management of Risk of Loss
The Board of Directors of the Company receives reports from the TRM Committee on proposals for basic policies andannual plans related to TRM, as well as the status of the occurrence and response to risks, putting in place a system tomanage important risks and ensure the continuation of the business.
The Chief Social Responsibility Officer implements regular evaluation and monitoring of operational risks, continually
identifying risks and evaluating the validity of countermeasures. The Company has formulated “The Manual of Largescale disaster prevention” that assumes the spread of widespread infectious diseases such as Covid-19. This time too, theCompany is setting up Emergency Response Headquarters, prioritizing the safety of employees and their families all over
the world, grasping the status of the entire Teijin Group, implementing various measures, disseminate information to46

inside and outside Teijin Group, and procuring relief supplies.
At meetings of the Board of Directors and other important meetings of the company, deliberation items are evaluatedbased on the results of strategic risk assessment implemented based on the Regulations for Group Profit Management.
To ensure the continuation of business, the Company will prepare the required manuals and hold regular drills to beprepared in the event of an emergency.
While preparing individual policies on personal information protection and information security, the Company has
implemented various internal education programs and security enhancement policies, as well as enhancing
countermeasures against the risk of information leaks.
3) Operating Status Regarding Securing Efficiency
The Company publishes the Group regulations on the Company intranet, promoting education and awareness.
The Company assigns management systems and job duties as well as clarifying responsibilities and authorities based onGroup organizational regulations and Group responsibility and authority regulations, working to ensure efficientmanagement execution and effective management.
4) Operating Status Regarding the Internal Control System within the Corporate GroupThe Company performs regular self-evaluations of the creation and operating status of its internal control system,
continually guiding the creation of the internal control system including both the regulations and meetings of the various
Teijin Group companies and a reporting system.
The Company’s Statutory Auditors, to promote fair and efficient auditing activities within the Teijin Group, by holding
regular meetings of the Group Board of Statutory Auditors and attending meetings in which accounting audit reports are
given, maintains close cooperation among the Accounting Auditors and Internal Audit Departments.
5) Operating Status Regarding the Preservation and Management of Information
The Company’s Board of Directors appropriately preserves documents and important information concerning theperformance of their duties in accordance with regulations regarding information related to the duties of the Group’s
directors.
6) Operating Status Regarding Ensuring the Effectiveness of the Auditing of the Statutory Auditors
The Company has established the Teijin Group Auditor Office, with the Teijin Group Auditor Office members under the
direct control of the Statutory Auditors to assist the Statutory Auditors in performing their duties.
The Company’s full-time Statutory Auditors attend important meeting bodies of the Company and of the main
subsidiaries, receiving reports at the meeting bodies from the representative directors, other directors, and corporate
officers on the status of the performance of duties.
The Chief Social Responsibility Officer reports on important stipulated items, including internal reporting by the hotline,
promptly following their discovery, both individually and in detail, to the members of the meeting bodies including the
Statutory Auditors, through the important meeting bodies.
Officers and employees of the Company properly respond to items requested by the Statutory Auditors, working to ensure
the effectiveness of the auditing of the Statutory Auditors.

Note: Italicized product names and service names in this report are trademarks or registered trademarks of the TeijinGroup in Japan and/or other countries, or, where noted, are protected as the trademarks and/or trade names of othercompanies.

47

9. Financial Statement(1) Consolidated Balance Sheets
FY2018(As of Mar. 31, 2019)(Millions of yen)
FY2019(As of Mar. 31, 2020)

Total

100,592
194,241
33,00098,727
11,55635,597
14,20836,515(582)
523,854

113,500
167,194
36,00096,935
11,73534,42912,12733,926(523)
505,323

Total

64,159105,908
43,33430,82723,658267,887

65,037110,956
43,17442,226
34,689296,081

Total

32,84536,66469,51023,81336,57460,387

96,1791,272
31,382
7,521
24,719(1,670)159,403496,800

76,633
2,063
31,388
9,578
24,373(1,604)142,432
498,900

1,020,654

1,004,223< Assets >Current assets
Cash and deposits
Notes and accounts receivable-trade
Securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Short-term loans receivable
Other current assets
Allowance for doubtful accounts

Noncurrent assets
Tangible assets
Buildings and structures, net
Machinery and equipment, net
LandConstruction in progress
Other, net

Intangible assets
Goodwill
Other

Investments and other assets
Investment securities
Long-term loans receivable
Net defined benefit asset
Deferred tax assets
Other
Allowance for doubtful accounts
Total
Total noncurrent assets
Total assets48

< Liabilities >Current liabilities
Notes and accounts payable-trade
Short-term loans payable
Current portion of long-term loans payable
Current portion of bonds
Income taxes payable
Provision for business structure improvement
Accrued expenses
Other
Total
Noncurrent liabilities
Bonds payable
Long-term loans payable
Provision for business structure improvement
Net defined benefit liability
Asset retirement obligations
Deferred tax liabilities
Other
Total
Total liabilities<Net assets>
Shareholders' equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total
Subscription rights to shares
Non-controlling interests
Total net assets
Total liabilities and net assets

49

FY2018(As of Mar. 31, 2019)(Millions of yen)
FY2019(As of Mar. 31, 2020)

93,499104,265
7,662
15,0006,879
81
23,542
49,277300,205

80,06898,372
34,268
－
5,464
1,089
21,912
46,467
287,640

20,039220,583－
37,553
2,645
3,539
8,878
293,237
593,442

35,024
202,0132,325
39,464
2,228
2,929
21,191
305,174
592,81471,833
104,256
235,324(13,412)
398,000

71,833
103,692
247,055(13,131)409,449

26,720(52)(11,402)(2,538)12,72812,403(1,020)(23,217)(3,452)(15,286)889
15,595427,2121,020,654

772
16,475
411,409
1,004,223

(2) Consolidated Statements of Income(Millions of yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividends income
Equity in earnings of affiliates
Foreign exchange gaines
Gain on valuation of derivatives
Miscellaneous income
Total
Non-operating expenses
Interest expenses
Foreign exchange losses
Contribution
Loss on valuation of derivatives
Miscellaneous loss
Total
Ordinary income
Extraordinary income
Gain on sales of noncurrent assets
Gain on sales of investment securities
Reversal of provision for business structure improvement
Settlement received
Other
Total
Extraordinary loss
Loss on sales and retirement of noncurrent assets
Loss on valuation of investment securities
Impairment loss
Business structure improvement expenses
Other
Total
Income before income taxes
Income taxes - current
Income taxes - deferred
Total
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

50

FY2018FY2019(Apr. 2018-Mar. 2019)(Apr. 2019-Mar. 2020)

888,589
620,715
267,874
207,874
60,000853,746
590,321
263,424
207,219
56,205

973
2,320
434
－
2,424
1,089
7,240

928
1,444
1,997
1,145
7
1,283
6,804

3,499
846
494
－
2,138
6,977
60,264

3,717
－
408
2,168
2,380
8,673
54,337

300
4,849
34
4,500
241
9,924

160
5,998
－
－
548
6,706

2,325
246
5,990
29
1,237
9,828
60,36013,834(271)
13,563
46,7971,740
45,057

2,677
114
11,0304,232
1,432
19,48541,557
12,306
2,272
14,57826,9801,727
25,252

(3) Consolidated Statement of Changes in Net Assets

FY2019 (Apr. 2019 - Mar. 2020)(Millions of yen)
Shareholders' equity
Capital stock Capital surplus

Balance as of March 31, 201971,833

104,256

Total
Treasury stock shareholders'equity235,324(13,412)
398,000

Retainedearnings

Changes of items during the period
Dividends from surplus(13,427)(13,427)

Profit attributable to owners of parent

25,252

25,252

Purchase of treasury stock
Disposal of treasury stock(94)

Transfer of loss on disposal of treasury shares

94

Change in treasury shares of parent arising from transactions
with non-controlling shareholders

(564)

(12)

(12)

293

199

(94)

－
(564)

Net changes of items other than shareholders' equity
Total
Balance at March 31, 2020－
71,83351(564)

11,731

282

11,449103,692

247,055(13,131)409,449

Consolidated Statements of Comprehensive Income (Reference)(Millions of yen)

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of associates accounted for using equity
methodTotal
Comprehensive income
Comprehensive income attributable to :Owners of parent
Non-controlling interests

52

FY2018FY2019(Apr. 2018-Mar. 2019)(Apr. 2019-Mar. 2020)

46,797

26,980(1,412)(956)
4,382(2,275)(14,656)(967)(11,764)(1,019)

(913)

(11)

(1,174)45,623(28,416)(1,436)

43,625
1,999(2,762)
1,325

Consolidated Statements of Cash Flows (Reference)53