May 29, 2019

Notice of Convocation
The 153rd 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 153rd 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 153rd 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(11) Acquisition or disposal of shares or other interests of other companies or stock acquisition rights, etc.
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. Basic Policy Regarding the Control of the Company
10. 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 29, 2019
Dear Shareholders
Jun Suzuki
President and Representative Director
Teijin Limited
2-4, Nakanoshima 3-chome,
Kita-ku, Osaka 530-8605,
Japan
Notice of Convocation ofrd

the 153 Ordinary General Meeting of Shareholders

You are cordially invited to attend the 153rd 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 yourvoting rights by 5 p.m., Wednesday, June 19, 2019. (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:Thursday, June 20, 2019, at 10 a.m. (Japan Time)(The door opens at 9 a.m.)
2. Place:
The Westin Osaka, 2nd Floor, Rose 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 the Consolidated
Financial Statements, for the 153rd Fiscal Year (April 1, 2018 to March 31, 2019)
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 shalltreat 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 andthe 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 posted on 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, Hiroshi Uno, Yasumichi Takesue, Yoshihisa
Sonobe, Nobuo Seki, Fumio Ohtsubo, Yukako Uchinaga, and Yoichi Suzuki —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.

Candidate’s Name
(Date of Birth)[Reappointment]

Jun Suzuki(February 19,1958)

1<Participation in Board of
directors meetings>
12 times out of 12 (100%)

Personal History, Positions andSignificant Concurrent Positions
Apr. 1983
Apr. 2011
Apr. 2012
Apr. 2013
Jun. 2013
Apr. 2014

Joined Teijin Limited
President, Teijin Holdings Netherlands B.V.
Corporate Officer, Teijin Limited
Executive Officer, Teijin Limited
Director, Executive Officer, Teijin Limited
President & Representative Director (Incumbent)
CEO (Chief Executive officer) (Incumbent)

Number ofCompany’s Shares
Owned

40,800shares<Significant Concurrent Positions>
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-termplan in November of the same year, and promoted the completion of structural reforms on which his predecessor worked. He
formulated a new medium-term plan in February 2017 and he is promoting growth strategies for the future.
Apr. 1975
Apr. 1975
Jun. 2011[Reappointment]

Kazuhiro Yamamoto(September 27, 1952)

2<Participation in Board of
directors meetings>
12 times out of 12 (100%)

Apr. 2014
Jun. 2015
Apr. 2016
Apr. 2017

Apr. 2019

Joined Teijin Limited
Joined Teijin Limited
Corporate Officer, Teijin Limited
President & Representative Director, CEO, Infocom
Corporation
Executive Officer, Teijin Limited
CFO (Chief Financial Officer)
Director, Executive Officer, Teijin Limited
Director, Senior Executive Officer, Teijin Limited
Representative Director, Executive Vice President, Teijin
Limited (Incumbent)
CIIO (Chief Information & Innovation Officer)
Responsible for Chief Officer of Teijin Group, Teijin
Limited (Incumbent)

10,600shares<Reason of the nomination of the candidate for director>
In 2011, Kazuhiro Yamamoto assumed the post of Corporate Officer, Teijin Limited and served as President & Representative
Director, CEO of Infocom Corporation which is a listed subsidiary. He assumed the posts of Executive Officer, Teijin limited in
April 2014, Director, Executive Officer in June 2015, Director, Senior Executive Officer in April 2016, and Executive Vice President
in April 2017. While serving as CFO and CIIO, he put effort into cost management, IR activities, information strategy, etc. He
oversees company-wide functions as Responsible for Chief Officer of Teijin Group, Teijin Limited since April 2019.

4

No.

Candidate’s Name
(Date of Birth)[Reappointment]

Personal History, Positions andSignificant Concurrent Positions
Apr. 1980
Jun. 2010
Apr. 2015

Yasumichi Takesue(July 1,1956)

3<Participation in Board of
directors meetings>
12 times out of 12 (100%)

Apr. 2016
Apr. 2017

Jun. 2017

Joined Teijin Limited
Corporate Officer, Teijin Limited
CHO (Chief Human Resources Officer)
General Manager, Electric Materials & Performance
Polymer Products Business Group
Executive Officer, Teijin Limited
Senior Executive Officer, Teijin Limited
Responsible for Material Business of Teijin Group(Incumbent)
Director, Senior Executive Officer, Teijin Limited(Incumbent)

Number ofCompany’s Shares
Owned

10,800shares<Reason of the nomination of the candidate for director>
Yasumichi Takesue assumed the posts of Corporate Officer, Teijin Limited in June 2010 and under the title of CHO, he promoted thetask of global human resources and general affairs. He also assumed the posts of Executive Officer, Teijin Limited in April 2014 andGeneral Manager, Electric Materials & Performance Polymer Products Business Group, in April 2015; Senior Executive Officer,
Teijin Limited, in April 2016; and he became responsible for the Material Business of Teijin Group in April 2017, Director, Senior
Executive Officer, Teijin Limited in June 2017. He has been working to expand revenue of the Material Business which forms a partof the core strategies of Company.

[Reappointment]

Yoshihisa Sonobe(October 17,1956)

4<Participation in Board of
directors meetings>
12 times out of 12 (100%)

Apr. 1980
Jun. 2009
Apr. 2014
Jun. 2014
Apr. 2016
Apr. 2017

Apr. 2019

Joined Teijin Limited
Corporate Officer, Teijin Limited
Corporate Strategy Officer, Teijin Limited
Director, Corporate Officer, Teijin Limited
Director, Executive Officer, Teijin Limited
Responsible for Corporate Strategy
Responsible for Global Strategy
Responsible for Legal and Intellectual Property
Director, Senior Executive Officer, Teijin Limited(Incumbent)
CFO (Chief Financial Officer), (Incumbent)

8,000
shares<Reason of the nomination of the candidate for director>
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 achievement of structural reforms and growth strategy which are the mostimportant issues for the Company. He assumed the posts of Director Senior Executive Officer and is putting effort into costmanagement as a CFO.
[New Candidate]

Apr. 1982
Apr. 2015
Apr. 2017

Akihisa Nabeshima(January 17, 1960)

5

Apr. 2019

Joined Teijin Limited
Corporate Officer, Teijin Limited
Executive Officer, Teijin Group (Incumbent)
General Manager, Healthcare Business Group
President, Teijin Pharma Limited
Responsible for Healthcare Business of Teijin Group(Incumbent)

3,300
shares<Reason of the nomination of the candidate for director>
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 BusinessGroup of the Company and as President & Representative Director of Teijin Pharma Limited. He became Responsible for Healthcare
Business of Teijin Group in April 2019. He has been working on further increasing profitability of the healthcare business, whichconstitutes a part of the core strategies of the Company, as well as on growth of new healthcare business, which are the themes of theCompany’s Transformation Strategy.

5

No.

Candidate’s Name
(Date of Birth)

Personal History, Positions andSignificant Concurrent Positions
Apr. 1971
Jun. 1998
Jun. 2000
Jun. 2003[Reappointment]
Candidate for Outside Director Jun. 2006

Fumio Ohtsubo(September 5, 1945)

6<Participation in Board of
directors meetings>
12 times out of 12 (100%)

Jun. 2012
Jul. 2013
Jun. 2016

Joined Matsushita Electric Works, Ltd., (currently
Panasonic Corporation)
Director, Matsushita Electric Works, Ltd.,Managing Director, Matsushita Electric Works, Ltd.,
Representative Senior Managing Director, Matsushita
Electric Works, Ltd.,
President, Representative Director, Matsushita ElectricWorks, Ltd.,
Chairman of the Board, Representative Director, Panasonic
Corporation
Special Advisor, Panasonic Corporation (Incumbent)
Director, Teijin Limited (Incumbent)
Member of the Advisory Board, Teijin Limited(Incumbent)

Number ofCompany’s Shares
Owned

3,000
shares<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, and he is expected to provide advice
on the Company’s business operations based on his abundant business experience and high level of insight.
The amount of transactions between Panasonic Corporation and the Company accounts for less than 1% of the consolidated net salesof either company.
Jul. 1971
Apr. 1995
Apr. 2000
Apr. 2004
Apr. 2007
Jun. 2007
Apr. 2008[Reappointment]
Candidate for Outside Director

Yukako Uchinaga(July 5, 1946)

7<Participation in Board of
directors meetings>
9 times out of 9 (100%)

Oct. 2009
Apr. 2013
Sep. 2013
Apr. 2014
Jun. 2018

Joined IBM Japan, Ltd
Director, IBM Japan, Ltd
Director, Executive Officer, IBM Japan, Ltd
Director, Senior Executive Officer. IBM Japan, Ltd
Board Chair, Japan Women’s Innovate Network(Incumbent)
Director, Benesse Corporation
Director, Vice Chairman, Benesse Corporation
Representative Director, Chairman of the Board, President& CEO, Berlitz Corporation
Director, Executive Vice President, Benesse Holdings, Inc.
Honorary Chairperson, Berlitz Corporation
President & CEO, Globalization Research Institute Co.,
Ltd. (Incumbent)
Board Chair, Japan Diversity Network Association
Director, Teijin Limited (Incumbent)
Member of the Advisory Board, Teijin Limited(Incumbent)

200
shares<Significant Concurrent Positions>Board Chair, Japan Women’s Innovate Network
President & CEO, Globalization Research Institute Co., Ltd.
Board Chair, Japan Diversity Network Association
Outside Director, Aeon 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 Chairman at Benesse Holdings, broad knowledge of the information technology field, and deep
insight in matters concerning diversity, and based on this, she is expected to provide guidance and advice on the Company’s business
operations.
The Company pays membership fees to Japan Women’s Innovative Network (“J-Win”), at which the candidate serves as President,
however the amount of 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.

6

No.

Candidate’s Name
(Date of Birth)

Personal History, Positions andSignificant Concurrent Positions
Apr. 1975
Jun. 1997

8

Apr. 2003
Sep. 2005[Reappointment]
Dec. 2008
Candidate for Outside Director Aug. 2010
Aug. 2013
Jun. 2016
Yoichi Suzuki(September 25, 1950)
Mar. 2017<Participation in Board of
directors meetings>
Apr. 2018
9 times out of 9 (100%)
Jun. 2018

Joined Ministry of Foreign Affairs, Japan (MFA)
Deputy Permanent Representative of Japan to the World
Trade Organization (WTO) in Geneva
Minister’s Secretariat (MFA)
Consul-General of Boston
Director-General for economic Affairs of MFA
Ambassador to Singapore
Ambassador to France
Government Representative and Ambassador in charge ofthe Kansai region
Ambassador for International Economic Affairs and Chief
Negotiator for the Japan EU EPA
MFA retired
Director, Teijin Limited (Incumbent)
Member of the Advisory Board, Teijin Limited(Incumbent)

Number ofCompany’s Shares
Owned

400
shares<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 served at the Ministry of Foreign Affairs, andhe is expected beneficial to the business of the Company in terms of a global viewpoint, based on his ample wisdom and expertise
regarding international economic and trade issues etc., and so the Company judges he can fulfill his duties appropriately as Outside
Director.

[New Candidate]
Candidate for Outside Director

9

Masaru Onishi

Apr. 1978
Apr. 2007
Apr. 2009
Jun. 2009

Joined Japan Air Lines Co., Ltd.
President JAL Aircraft Maintenance Narita
Executive officer, JAL International Co., Ltd
President of Japan Air Commuter

Feb. 2010

President Japan Air Lines Corporation, (JAL group COO)
President Japan Air Lines International Co., Ltd.
President Japan Air Lines International Co., Ltd.
(Organizational change)
Representative Director, President Japan Air Lines
International Co., Ltd.
Representative Director, President Japan Airlines Co., Ltd.
(Company name change from Japan Air Lines International
Co., Ltd. to Japan Airlines Co., Ltd.)
Representative Director, Chairman Japan Airlines Co., Ltd.
Director, Chairman Japan Airlines Co., Ltd.
Senior Representative External Affairs Japan Airlines Co.,
Ltd. (Incumbent)

Nov. 2010
Mar. 2011
Apr. 2011(May 19, 1955)
Feb. 2012
Feb. 2014
Jul. 2018

0shares<Significant Concurrent Positions>
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 is expected to provide advice on the Company’sbusiness operations based on his abundant business experience and high level of insight.
Note 1: Fumio Ohtsubo, Yukako Uchinaga, Yoichi Suzuki and Masaru Onishi are candidates for Outside Directors. The Company requires thecandidate 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 ExchangeGroup, Inc., the Company has registered candidates for Outside Director up for reappointment, Fumio Ohtsubo, Yukako Uchinaga and
Yoichi Suzuki at the Tokyo Stock Exchange as Independent Directors, and it plans to register the new candidates for Outside Director,
Masaru Onishi at the same stock exchange as Independent Directors. Refer to the 11-12 pages for the contents of the requirements of“Independent Director” stipulated by the Company.
Note 2: The Company has entered into liabilities limitation agreements with Fumio Ohtsubo, Yukako Uchinaga and Yoichi Suzuki who are
currently Outside Directors, which limit the liabilities of each Director 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 the Companies Act and theCompany’s Articles of Incorporation.

7

If Masaru Onishi election is approved, the Company will enter into a liabilities limitation agreement with him, which limits his liabilities
to ¥20 million or the minimum amount stipulated in Article 425, Paragraph 1, of the Companies Act, whichever is higher, in accordancewith the 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 in position 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

3 years

Yukako Uchinaga

June 20 2018

1 yearYoichi Suzuki

June 20 2018

1 year8

Proposal 2: Election of Two (2) Statutory Auditors
The terms of office of two (2) Statutory Auditors — Atsushi Mugitani and Gen Ikegami —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)[New Candidate]

Masanori Shimai
1(March 7, 1964)

Personal History, Positions andSignificant Concurrent Positions
Apr. 1987
Jun. 2010
Apr. 2013
Jul. 2016
Apr. 2017
Apr. 2019

Joined Teijin Limited
General Manager, Corporate Strategy Office
General Manager, Administration Department Teijin
Pharma Limited
General Manager, Accounting Department
General Manager, Material Business Strategic Planningand Control Division
Teijin Group Auditors Office (Incumbent)

Number ofCompany’s Shares
Owned0
shares<Reason of the nomination of the candidate for Corporate Auditor>
Masanori Shimai has experience in Corporate Management and Accounting Departments since joining the Company and he is wellversed with accounting and finance and with the Teijin Group business. The Company expects that he will supervise overallmanagement and provide effective advice. Therefore, the Company judges that he can fulfill his duties appropriately as Statutory
Auditor.

[Reappointment]
Candidate for Outside
Corporate Auditor

Sep. 1980
Mar. 1983
Apr. 1984
Jun. 1988
May. 1992
May. 2000
Jul. 2010

2

Gen Ikegami(January 10, 1955)

Jun. 2015
Jul. 2015
Jul. 2016

Joined Showa Accounting
Registered as Certified Public Accountant
Singapore country residence
U.S.A. residence
Registered as CPA the state of California, U.S.A.
Audit corporation Ota Showa Century representative
partner
Deputy President, The Japanese Institute of Certified
Public Accountants
Representative, Gen Ikegami Certified Public Accountant
Office (Incumbent)
Statutory Auditor, Teijin Limited (Incumbent)Counsel, The Japanese Institute of Certified Public
Accountants (Incumbent)

3,900
shares<Reason of the nomination of the candidate for Outside Corporate Auditor>
Although Gen Ikegami does not have direct experience in corporate management, the Company expects him to contribute to themaintenance and improvement of compliance by the Company with his abundant knowledge and experience as Certified Public
Accountant. Therefore, the Company judges that he is able to perform duties as Outside Corporate Auditor properly.
Note 1: Gen Ikegami 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 was registered by the Company as“Independent Director / Auditor”. Refer to 11-12 pages the contents of the requirements of “Independent Director” stipulated by theCompany.
Note 2: The Company has entered into liability limitation agreements with Gen Ikegami, who is currently an incumbent Outside Statutory Auditor,
which limits his liabilities to ¥20 million or the minimum amount stipulated in Article 425, Paragraph 1, of the Companies Act, whicheveris higher, in accordance with the provisions of Article 427 of the Companies Act and the Company’s Articles of Incorporation. In theevent that his election is approved, the Company intends to continue the same liability limitation agreement with him. Furthermore, if
Masanori Shimai’s election is approved, the Company will enter into an equivalent liabilities limitation agreement with him in
accordance with the provisions of Article 427 of the Companies Act and the Company’s Articles of Incorporation.
Note 3: There are no special interests between the candidate and the Company.

9<Reference>
Teijin Limited Independent Director and Independent Statutory Auditor Requirements
On April 1, 2003, Teijin Limited (the Company) prescribed “Requirements for Independent Directors” for outside directors,
including candidates. These conditions for appointment are designed to increase the level of precision and ensure thetransparency of the management supervisory function of the Board of Directors. At the same time, the Company alsoprescribed “Requirements for Independent Statutory Auditors,” which covers outside statutory auditors and candidates. These
requirements are intended to enhance the precision and transparency of the auditing of duties of internal directors and the
management team. With regard to independent director and independent statutory auditor requirements, the Company has
formulated and operates regulations concerning independent directors and independent statutory auditors of its own accord.
The primary content of these requirements is described below.
Note:

Hereinafter, the “Teijin Group” is used to refer collectively to 1) “Teijin Limited,” 2) “subsidiaries of Teijin Limited” and 3) “equal joint
venture partners.”

Independent Director and Independent Statutory Auditor Requirements(1) Persons having no significant special interests in the Teijin Group.
(2) Persons to whom items (a) through (e) below do not apply are deemed to be Independent Directors or Independent
Statutory Auditors having no significant special interest in the Teijin Group.
(a) Internal officers or employees and former internal officers or employees of the Teijin Group(b) Providers of specialized services to the Teijin Group(c) Persons having customer or business partner relations with the Teijin Group(d) Persons having “inter-directorship” relations with the Teijin Group(e) Persons having other special interests in the Teijin Group
Detailed Internal Standards Concerning Persons Falling under Items (a) through (e) above
Applicability of the category(a) Internal officers or employees and former internal officers or employees of the Teijin Group(1) In the event that the person does not satisfy the requirements under Company Law (Please refer to Company Law,
Article 2, No. 15 and 16) for outside director or outside statutory auditor of Teijin Limited(2) In the event that the person is a director of an “equal joint venture company,” (including persons defined as “management
executives” in Note 1 below) or has held such a position within the past five years(3) In the event that a member of the person´s “family” (Note 2) is currently a director of the Teijin Group (including
persons defined as “management executives”)(b) Providers of specialized services to the Teijin Group(1) In the event that the person or the person´s “family” provides accounting audit services to the Teijin Group or has done
so within the past five years, or in the event that the person or the person´s “family” is currently a member of an outside
auditing firm that provides accounting audit services to the Teijin Group or has been a member of such a firm within
the past five years(2) In the event that the person or the person´s “family” provides, or has provided within the past three years, services otherthan accounting services that involved compensation of more than 7 million yen (or US$60,000) and fall into thefollowing categories:(i) Lawyers, (ii) certified public tax accountants, (iii) chartered patent agents, (iv) judicial scriveners, (v) management,
financial, technical or marketing consultants(c) Persons having customer or business partner relations with the Teijin GroupIn the event that the person currently holds the position of Director or any of “Executives and top managers” (Note 4) in
a company or other for-profit organization in Japan or overseas that is presently a “major customer or business partner”(Note 3) of the Teijin Group(d) Persons having “inter-directorship” relations with the Teijin Group(1) In the event that the relationship exists wherein the outside director currently holds the position of director in a company
in Japan or overseas or holds a position in a for-profit organization that is equivalent to the director position, and a
director of the Teijin Group currently holds a director or equivalent executive position in that same organization
10

(2) In the event that the relationship exists wherein the outside statutory auditor holds a director position in a company inJapan or overseas or an equivalent executive position in a for-profit organization, and a director or statutory auditor of
the Teijin Group currently holds a director, statutory auditor or equivalent executive position in that same organization(e) Persons having other special interests in the Teijin Group(1) In the event that the person currently receives contributions, financing or debt guarantees from the Teijin Group(2) In the event that the person´s “family” currently receives contributions, financing or debt guarantees from the TeijinGroup amounting to 1 million yen or more
(3) In the event that the person or the person´s “family” currently holds the position of Director or any of “Executives andtop managers” (Note 4) in a company or for-profit organization in Japan or overseas that currently receives contributions,financing or debt guarantees from the Teijin Group amounting to 1 million yen or more
The terminology used above is defined below.
Note 1: “Management executives” are employees who hold positions of importance, including operating officers, senior officers or positions
higher than general manager.
Note 2: “Family” includes spouses, children, people sharing the same household and other persons related by blood or marriage within two
degrees of consanguinity
Note 3: “Major customer or business partner” describes a person or an entity whose total annual transaction relationship, either as a seller or apurchaser, has exceeded 2% of consolidated net sales at any time within the past three years. (If the Teijin Group is the seller, this amountrefers to the percentage of consolidated net sales of Teijin Limited. If the Teijin Group is the buyer, this amount refers to the percentage
of consolidated net sales of the other party.)
Note 4: “Executives and top managers” are employees, counselors or advisors who hold positions of importance, including statutory auditor,
operating officer or positions higher than general manager.

This “Teijin Limited Independent Director and Independent Statutory Auditor Requirements” document is intended as areference to help deepen the reader´s understanding of the Teijin Group. This document is an overview of the Independent
Director Regulations and Independent Statutory Auditor Regulations as prescribed by the Company and is not a rigorously
defined record of these regulations, Company Law or any other legislation.

11

Attached Reports
Reports on Operations for the 153rd Fiscal Year (April 1, 2018 to March 31, 2019)
1. Current Status of the Teijin Group(1) Progress and Results of Operations
1) Progress and Results of Operating Activities① Sales and Income
Global economic conditions in FY2018, ended March 31, 2019, saw an economic slowdown in Europe and the PRC,
while there was continued moderate growth in the U.S., against the backdrop of uncertainties such as trade friction
between the U.S. and the PRC. The Japanese economy continued to stage a modest recovery, mainly reflecting firm
corporate earnings and improving employment conditions. The global economic outlook will need to be watchedclosely going forward.
In this environment, for FY2018, the Teijin Group posted lower earnings on higher sales in the Materials Business
Field, mainly reflecting the impact of persistently high prices of raw materials and increased costs for the launch of
projects in connection with new order intake in the composites business, despite firm sales. In the Healthcare Business
Field, the Teijin Group posted slightly lower earnings on higher sales as growth in sales covered the impact of
downward revisions to drug prices and medical fees and the absence of the upfront payment from Merck (¥3.0 billion)
recorded in the previous fiscal year. Consolidated net sales totaled ¥888.6 billion, an increase of 6.4% year on year.
Operating income decreased 14.1% to ¥60.0 billion. Ordinary income decreased 11.1% to ¥60.3 billion. Profit
attributable to owners of parent decreased 1.1% to ¥45.1 billion and was almost same as the previous fiscal year.
② Analysis of Assets, Liabilities and Net Assets
Total assets as of March 31, 2019 amounted to ¥1,020.7 billion, up ¥38.7 billion from the end of FY2017. The main
reason for the increase in total assets was an increase in working capital.
Total liabilities amounted to ¥593.4 billion, up ¥19.7 billion from the end of FY2017. One main component of thischange was an increase in short-term loans payable.
Total net assets amounted to ¥427.2 billion, up ¥19.0 billion from the end of FY2017. This was mainly due to profit
attributable to owners of parent, which was partly offset by a decrease due to the acquisition of own shares, among
other factors.
Segment operating results (sales and operating income) of the Teijin Group are as follows.
(Billions of yen / %)Net sales

Material

Fiscal 2017

Fiscal 2018

ChangePercentage

Material

254.1

263.9

+9.9

+3.9

Polyester Fiber & Trading andRetail

293.2

318.3

+25.1

+8.5

Composites Others

77.5

89.4

+11.8

+15.3

Material Sub Total

Operating income

624.8

671.6

+46.7

+7.5

Health Care

155.4

157.5

+2.1

+1.4

Others

54.8

59.5

+4.7

+8.6

Total

835.0

888.6

+53.6

+6.4

Material

33.6

23.5

-10.1

-30.1

Health Care

35.9

35.5

-0.5

-1.4

Others

6.1

7.2

+1.0

+16.7

Elimination and corporate

-5.9

-6.1

-0.2

–

Total

69.8

60.0

-9.8

-14.1

12

Business Segment Results for fiscal 2018 were as follows:

I. Materials Business Field
In the Materials Business Field, sales were ¥671.6 billion, up ¥46.7 billion year on year, while operating income was¥23.5 billion, down ¥10.1 billion.
Material Business Group
Sales of aramid fibers were firm, and rising raw material prices in resin products and carbon fibers pushed down the
profit.
In Aramid Fibers, sales of Twaron para-aramid fibers were solid for automotive applications such as reinforcement
materials for tires, as well as optical fiber applications. Sales of Teijinconex meta-aramid fibers were robust for use
in automotive applications such as turbocharger hoses, as well as protective clothing and industrial applications.
In Carbon Fibers, sales of TENAX carbon fibers grew steadily for use in aircraft, with sales volume also increasing
for pressure vessel applications and other uses. In compound applications, sales were slightly subdued because of the
impact of market situation. In addition, rising raw material and fuel prices pushed down earnings.
In Resin and Plastics Processing, particularly our mainstay polycarbonate resin products, earnings were suppressedby the rapid slowdown in demand and the decline in market prices for polycarbonate since the second quarter, despite
efforts to shift sales to high-value-added products.
In Films, Purex, which is used as a release film for manufacturing processes mainly for multilayer ceramic capacitors
for smartphones and automotive electronics, continued to expand. Sales also remained favorable for PEN film foruse in automobiles and electronic components.
Polyester Fibers & Trading and Retail Business Group
Increased raw material prices pushed down the profit despite brisk sales of functional apparel fiber material andothers.
In Fiber Materials and Apparel, sales of fabrics for sports and outdoor use were favorable, along with growth in sales
from product businesses based on strategic materials such as SOLOTEX. However, sales of heavy winter apparelstruggled due to unseasonable weather conditions, and rising raw material prices and logistics costs pressured
earnings.
In Industrial Textiles and Materials, we resumed full-scale production of polyester yarn and cotton, which wastransferred to Thailand through restructuring initiatives, along with posting firm sales of short staple cotton. However,sales of automotive materials such as airbag fabrics were sluggish, due to the impact of slowing growth in the PRC.
Composites, Others
Sales increased due to favorable sales of automotive components in North America; however, one-time expenses
increased.
In Composites, we recorded firm sales of mass-produced automotive components led by Continental Structural
Plastics Holdings Corporation for pickup trucks and SUVs, which performed well in North America, and for large
trucks, for which the market showed signs of recovery. Meanwhile, earnings were pushed down by rising raw material
prices and higher one-time expenses for launch of projects in connection with new order intake.
In Battery Materials, sales of LIELSORT lithium-ion battery (LIB) separators for consumer applications were sluggish
mainly as a result of a slump in demand for use in smartphones.
Healthcare Business Field
Sales were firm, despite the impact of recording consideration for the licensing out of an investigational antibody
candidate in Pharmaceuticals in the previous fiscal year.
In the Healthcare Business Field, sales were ¥157.5 billion, up ¥2.1 billion year on year, while operating income was¥35.5 billion, down slightly by ¥0.5 billion.
In Pharmaceuticals, the sales were affected by the downward revisions to drug prices in the domestic market. In thisclimate, sales of hyperuricemia and gout treatment FEBURIC (febuxostat), the transdermal anti-inflammatory

13

analgesic patch formulation LOQOA tape, and Somatuline® *, a treatment for acromegaly, continued to expand
steadily.
In Home Healthcare, we maintained a high level of rental volume for therapeutic oxygen concentrators for homeoxygen therapy (HOT), enhancing the lineup of portable oxygen concentrators (Hi-Sanso Portable ɑ (alpha), HiSanso Portable ɑ II). Rental volume for continuous positive airway pressure (CPAP) units for the treatment of sleep
apnea syndrome (SAS) increased favorably, mainly due to increasing the appeal of NemLink, a monitoring system
for CPAP units that uses mobile phone networks, and to the use of the SAS-2100 sleeping pattern analysis devices.
In the area of New Healthcare initiatives, particularly in the field of implantable medical products, Teijin Nakashima
Medical Co., Ltd. a Teijin group company developing the artificial joint and orthopedic spine product businesses,
posted a solid business performance.

II. Others
In Others, sales were ¥59.5 billion, up ¥4.7 billion year on year, and operating income was ¥7.2 billion, up ¥1.0
billion.
In IT, the Digital Entertainment category saw a strong performance by the Meccha Comics e-comics distribution
service. Meccha Comics delivered record-high sales as a result of efforts to maximize advertising effectivenessthrough data analysis, in addition to enhancing partnerships with publishing companies through such means as
exclusive pre-release e-comics distribution campaigns and sales of tie-up magazines. In the IT services category, weposted firm sales of work management systems for hospitals in connection with measures to address work stylereforms.
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 Teijin Group promotes “CSR management integrated with business strategy,” which involves contributing to thesolving of society’s issues through establishing material CSR issues and business activities with the aim of achieving
sustainable development of both business and society. In establishing CSR materiality, we referred to the social issues
identified in the United Nations’ Sustainable Development Goals (SDGs), adopted in 2015, and we are pushing
forward with initiatives for CSR promotion on global level.
In one designated issue, “Reducing Environmental Impact,” in addition to working to reduce its greenhouse gas
emissions in manufacturing both within Japan and abroad, the Group made further efforts to reduce waste, both by
reducing the total amount of waste produced and by promoting various recycling programs, achieving a large overall
reduction in the amount of non-recyclable waste emissions. Furthermore, we have identified “Solutions ofEnvironmental Value” as an important CSR issue, and we are supplying products and services that lower theenvironmental burden in order to contribute toward reducing CO2 emissions and saving energy.
On the issue of “Diversity,” 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 committee in 1999, and from 2000, the Groupfurther pursued these activities by establishing a dedicated organization. Teijin was 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 are proactively engaging in work style reforms in employees and promoting the design of 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) repetitive tasks that have been carried out
by people. In fiscal 2018, we set up a dedicated organization to advance this initiative. Moreover, to enable employeesof diverse backgrounds to reach their full potential, in 2019 we will expand the scope of eligibility for our work-fromhome system, previously limited to employees engaged in childcare, nursing care, or maternity, and so forth, opening
it up to more employees and workplaces and implementing it as a telework system.
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, we have supported around 1,600 science and engineering students over more than 60
years, and in 2010, launched a scholarship system in China. In addition, we are working to support youth sports such*

Somatuline® is the registered trademark of Ipsen Pharma, France.
14

as by being a sponsor of the All Japan High School Soccer Tournament, and by endorsing the “Children’s Rights in
Sport Principles” promoted by 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.
Going forward, as a good corporate citizen, to realize both sustainable social and corporate development, we willcontinue to proactively participate in and support initiatives for the environment and social problems, as well as various
social contribution activities.
(2) Changes in Assets and Profit and Loss
Fiscal Period
Items

150th Fiscal Period
FY2015151st Fiscal Period
FY2016

152nd Fiscal Period
FY2017

153rd Fiscal Period
FY2018(Current period)

790,748

741,292

834,986

888,589

67,13056,512

69,82360,00060,31655,93467,82060,26431,09050,13345,55645,057158.15254.91231.26232.39823,429

964,053

981,967

1,020,654

314,412351,830

408,237

427,212Net sales(Millions of yen)
Operating income(Millions of yen)
Ordinary income(Millions of yen)
Profit attributable to owners of parent(Millions of yen)
Net earnings per share(Yen)
Total assets(Millions of yen)
Net assets(Millions of yen)

Note 1: The Company has adopted the “Partial Amendments to Accounting Standard for Tax Effect Accounting, etc.” (ASBJ Statement No.
28, February 16, 2018) effective from the beginning of the first quarter of the fiscal year. Accordingly, the figures of total assets havebeen retrospectively adjusted to reflect the application of the aforementioned accounting standard.
Note 2: Prior to the previous fiscal year, fractional amounts of less than 1 million yen were discarded, however, effective from the fiscal year,
figures are rounded to the nearest million. In order to simplify comparisons, figures prior to the previous fiscal year have been
retrospectively adjusted to round off to the nearest million.

(3) Capital Investments
Capital investments by the Group in fiscal 2018 totaled ¥62.8 billion, mainly for growth and transformation strategies.
(4) Financing
The Company procured finance mainly borrowings from financial institutions. Also, as a result of an increase in shortterm debt, interest-bearing debt such as loans and bonds amounted to ¥369.2 billion, an increase of ¥25.0 billion fromthe end of the previous year.
(5) Management Policies and Tasks Ahead
1) Basic Management Policies of the Teijin GroupAs declared in the Teijin Group’s corporate philosophy, we are committed to enhancing the quality of life of people
everywhere through our deep insight into human nature and the application of our creative abilities. At the same time,
our corporate philosophy commits us to Grow In Harmony With Society, and to Grow By Empowering Our People.
Accordingly, as our long-term vision, we pledge to create the new value needed by society by utilizing its workforce
diversity, thereby aiming to become an enterprise that is essential to tomorrow’s society.
2) Tasks Ahead and Medium & Long-Term strategies
In February 2017, the Teijin Group formulated and announced its new medium-term management plan for 2017-2019,“ALWAYS EVOLVING,” as a three-year action plan to realize its long-term vision. Guided by the medium-term
management plan, the Teijin Group will improve core earnings through growth strategies, establish new corebusinesses through transformation strategies and strengthen its basic management systems to support those strategies.

15a) Working to realize the long-term vision
The Teijin Group is aiming to achieve the following vision as an enterprise that is essential to tomorrow’s society.
◆ An enterprise that helps to solve social issues
Teijin will strive to capture business opportunities leveraging its strengths from the issues facing society, and tostrengthen the management base.
Core priority fields for business development
Environmental value solutions

Supply weight-reducing materials that enhance environmental
performance for transportation

Safety, security and disaster mitigation solutions

Enhance disaster-readiness measures and social infrastructuredevelopment

Demographic change and increased healthconsciousness solutions

Support health maintenance and enhancement in response to theprogression of demographic change and increasing lifestyle diseases◆ An enterprise that achieves continuous transformation by anticipating changes in the external
environment
In an increasingly uncertain external environment, Teijin will take the initiative to contribute to evolution, insteadof chasing trends, for sustainable growth.
◆ An enterprise that continues to create new value at all times
Teijin will create products and services that accelerate the evolution of society.
* The Company is proactively working to provide Environmental Value Solutions and conduct activities such as initiatives toreduce its environmental impact. In March 2019 the Company announced its support for the recommendations of the Task Forceon Climate-related Financial Disclosures (TCFD), which has been established by the Financial Stability Board (FSB). Looking
ahead, the Company will enhance and increase the disclosure of information on the risks and opportunities that climate change
will impart to the Teijin Group’s businesses.

b) Business Strategies in Medium-Term Management Plan for 2017-2019
Teijin will implement both growth and transformation strategies focusing on the materials and healthcare businessfields as the pillars of its operations and develop new businesses that are not yet contributing to profits at present into
its core earnings sources, without merely relying on the continuation of existing businesses.

16c) Performance Targets
New key performance indicators (KPIs) will be established with an emphasis on both investment efficiency andearnings power. ROE will be chosen as a profitability indicator and EBITDA will be chosen as a growth indicator.
ROIC, based on operating income, will be chosen as an indicator of efficiency of generating profits relative to capital
invested. Also, in order to visualize and monitor business portfolio transformation, net sales from transformation
strategy projects and degree of diversity promotion will be set as original KPIs, including non-financial information,with follow-up progress. The targets until FY 2019 are as follows.
ROE

10%+

ROIC based on operating income

8%+

EBITDA
Note:

Over ¥ 120 billion

Return on equity (ROE): Profit attributable to owners of the parent  Average* total shareholders’ equity* ([Beginning balance + Ending balance]  2)

Return on invested capital (ROIC) based on operating income: Operating income  Invested capital** (Total shareholders’ equity + Non-controlling interests + Interest-bearing debt – Cash and deposits)

Earnings before interest, tax, depreciation and amortization (EBITDA): Operating income + Depreciation & amortization(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, 2019)
Business Segments
Materials

Materials
Note:

Principal 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,
PET・PEN･PBN resin, PPS resin, Frame-retardant

Films

PET film・PEN film

Polyester Fibers &Trading and Retail

Textiles and Apparel

Fiber materials, Apparel products, General merchandise

Industrial Textiles
and Materials

Fiber materials, Textiles, Nonwoven Fabric,
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

Pharmaceuticals

Treatment for Hyperuricemia and gout, Agent for Osteoporosis, Agent for
Infection, Sustained-release expectorant,
Treatment for acromegaly and pituitary gigantism

Home Health Care

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

General Corporation information system, Information system for hospital,
Information system for Care Business, Career Change support service forCare Business, Document control system, Web-ERP (Integration Business
Software Package), Emergency Call / Safety Confirmation system, RPA(robotic process automation to automate)

Net BusinessElectronic book delivery service, E-commerce of foods

Health Care

OthersBusiness Fields
Aramid Fibers

PET (Polyethylene terephthalate), PEN (Polyethylene naphthalate), PBN (Polybutylene naphthalate), PPS (Polyphenylene sulfide)17

(7) Primary Business Places(As of March 31, 2019)
Business
The Company
Materials

Function

Location

Headquarters

Osaka, Tokyo

Manufacturing bases

Ehime, Yamaguchi, Shizuoka, Tochigi, Hiroshima, Gifu
U.S.A., Germany, the Netherlands, China, Thailand, Indonesia

Operation bases

Tokyo, Osaka, Aichi
U.S.A., Germany, the Netherlands, China, Thailand, Taiwan, Malaysia,
Indonesia. Brazil, India, Mexico

Research bases

Shizuoka, Ehime, Gifu, Chiba, Yamaguchi
Germany, the Netherlands, China

Materials

Polyester Fibers &Trading and Retail

Manufacturing bases

Ehime, Ishikawa, Fukui, Gifu, Yamaguchi, Hiroshima, Shimane
China, Thailand, Germany, Hungary

Operation bases

Tokyo, Osaka, Aichi, Niigata, Gifu
U.S.A., Germany, China, Thailand, Indonesia

Research bases

Ehime
China, Thailand

Composites, Others

Manufacturing bases

Gifu
U.S.A., Mexico, South Korea, Portugal

Operation bases

Tokyo
U.S.A., Mexico, South Korea, Portugal

Research bases

Ehime, Yamaguchi
U.S.A., Germany. France

Health Care

Manufacturing bases

Yamaguchi, Okayama, Hyogo

Operation bases

12 branches throughout Japan

Research bases

Tokyo, Yamaguchi
U.S.A.

Others
Note:

Operation bases

Tokyo, Osaka, Ehime, Yamaguchi

The function of headquarters is indicated in The Company, and the manufacturing, operation and research bases are indicated in eachbusiness segments.

(8) Employees(As of March 31, 2019)152nd Fiscal Period
FY2017(As of March 31, 2018)

153rd Fiscal Period
FY2018(As of March 31, 2019)(Current period)

Change in the number of
employees

Materials

14,487

15,421+934

Health Care

3,337

3,345

+8

Business segments

Others

1,887

1,905

+18

Total

19,711

20,671+960

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(2,240 employees for the 152nd fiscal period and 2,385 employees for the 153rd fiscal period)

18

(9) Significant Subsidiaries(As of March 31, 2019)
Business segments
Materials

Materials
Polyester Fibers &Trading and Retail

Subsidiary (Location of the
Head Office)Teijin Aramid B.V. (theNetherlands)

Health Care

OthersInvestment
ratio (%)

Principal business0.02 million euro

*100.00 Production and sales of para-aramid fibers

Teijin Corporation (Thailand)
Limited (Thailand)

916.6 million
baht*100.00 Production and sales of meta -aramid fibers
and resin

Teijin Carbon Europe GmbH.
(Germany)

0.026 million
euro*100.00 Production and sales of carbon fibers

Teijin Carbon America, Inc.
(U.S.A.)

US$97.5 million*100.00 Processing and sales of carbon fibers,
Production and sales of Oxidized PAN
fibersTeijin Films Solutions
Limited (Tokyo)¥10,010 million

100.00 Production and sales of polyester films

Teijin Polycarbonate China
Ltd. (China)

720 million RMB

100.00 Production of polycarbonate resin

Teijin Chemicals Plastic
Compounds Shanghai Ltd.
(China)143 million RMB

100.00 Production of polycarbonate resin
compoundTeijin Frontier Co., Ltd(Osaka)¥2,000 million

100.00 Sales of textiles and others

Nantong Teijin Co., Ltd.
(China)¥4,000 million

100.00 Production and sales of polyester textile
goods

Teijin (Thailand) Limited(Thailand)

800 million baht

*100.00 Production and sales of polyester fibers

Teijin Polyester (Thailand)
Limited (Thailand)

548 million baht

66.87 Production and sales of polyester fibers

Teijin Logistics Co., Ltd.
(Osaka)Composites

Capital¥80 million

100.00 Transportation and custody of goods

Continental Structural
Plastics Holdings
Corporation (U.S.A.)

US$830 million*100.00 Production and sales of Composite products

Teijin Pharma Limited(Tokyo)¥10,000 million

100.00 Production and sales of medicinal drugs andmedical equipment

Teijin Home Health Care Ltd(Tokyo)¥100 million*100.00 Home health care services provider

Infocom Corporation (Tokyo)¥1,590 million

58.08 Development and sales of computer
software, etc.

Teijin Engineering Ltd.
(Osaka)¥475 million

100.00 Engineering services, design and sales ofplants and equipment

Note 1: The Teijin Group has 97 consolidated companies including the aforementioned 17 significant subsidiaries; 69 companies are accounted
for via the equity method.
Note 2: * indicates the investment ratio including investment by subsidiaries.
Note 3: The Company conducted the absorption-type merger with Toho Tenax Co., Ltd. with the effective date of April 1, 2018. Toho Tenax
Co., Ltd. has been excluded from Significant Subsidiaries.

(10) Primary Lenders and Amount of Borrowings(As of March 31, 2019)
Balance of borrowings

Primary Lenders

Millions of yen

MUFG Bank, Ltd.

126,979

Mizuho Bank, Ltd.

34,022Development 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 ¥91,829 million under syndicated loans.

19(11) Acquisition or disposal of shares or other interests of other companies or stock acquisition rights, etc.
The Company completed the sale of all of the share it holds in Kyorin Holdings, Inc. (Securities code: 4569, First
Section of the Tokyo Stock Exchange). The details are outlined below.
1) Sale Date:

September 27, 20182) Shares Sold:

14,328,000 shares of common stock of Kyorin Holdings (19.12% of the total number
of issued shares)

3) Value of Shares Sold:¥35.3 billion

4) Sales Method:

Participation in share buyback by Kyorin Holdings, Inc.

5) Background to the Sale:

Since April 2013, the Company had successively acquired the shares of Kyorin
Holdings and explored the prospects of entering into a strategic partnership with thiscompany. However, due to subsequent changes in circumstances, the Company has
agreed to sell all of the shares it holds to Kyorin Holdings.

2. Matters Regarding the Shares of the Company (as of March 31, 2019)(1) Authorized shares

600,000,000 shares(2) Issued shares

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

87,518(4) Top 10 shareholders of the Company
Investment in the Company

Shareholders

Number of shares held

Shareholding ratio (%)

1

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

15,370,700

8.01

2

Japan Trustee Service Bank, Ltd. (Trust account)

10,579,149

5.51

3

Nippon Life Insurance Company

7,045,501

3.67

4The Employee Stock Ownership Association of Teijin

5,021,689

2.61

5

JP MORGAN CHASE BANK 385151

4,125,925

2.15

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

3,330,600

1.73

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

3,144,400

1.63

8STATE STREET BANK WEST CLIENT – TREATY 505234

2,970,251

1.54

9

JPMORGAN SECURITIES JAPAN Co., Ltd.

2,960,029

1.54

10

MUFG Bank, Ltd.

2,897,287

1.51

Note:

The shareholding ratio has been calculated after excluding Treasury stocks (6,141,576 shares) from the Issued shares.

(5) Relating to the Acquisition of Own Shares
The Company passed a resolution at a meeting of the Board of Directors held on August 1, 2018 on matters relating
to the acquisition of its own shares in accordance with the provisions of Article 459, Paragraph 1 of Japan’s Companies
Act and Article 41 of the Company’s Articles of Incorporation.
Own shares were fully acquired pursuant to the resolution as follows.
1) Type of stock acquired:

Teijin common stock2) Total number of shares acquired:

9,107,400 shares3) Total value of shares acquired:

19,999,850,400 yen

4) Acquisition date:August 2, 2018

5) Reason for the Acquisition of Own Shares:

To implement flexible capital management policies in response tochanges in the business environment.

20

3. Stock Acquisition Rights(1) Status of Stock Acquisition Rights as of the last day of the subject Fiscal YearClass and Numberof Shares
Number of Issued(Common Stock)
Stock Option (unit)
to be acquired by
the Stock Option
146
29,200207
41,400328
65,600420
84,000349
69,800737
147,400
698
139,600
618
123,600
379
75,800274
54,800287
57,400294
58,800321
64,200Time of Issue(Issue date)
5th (Jul. 10, 2006)
6th (Jul. 5, 2007)
7th (Jul. 7, 2008)
8th (Jul. 9, 2009)
9th (Jul. 9, 2010)
10th (Mar. 12, 2012)
11th (Mar. 15, 2013)
12th (Mar. 14, 2014)
13th (Mar. 18, 2015)
14th (Mar. 16, 2016)
15th (Mar. 17, 2017)
16th (Mar. 16, 2018)
17th (Mar. 18, 2019)

Issue Price ofStock Option(per share)

Exercise Price ofStock Option(per share)¥3,315¥3,050¥1,535¥1,265¥1,305¥1,225¥980¥1,140¥1,925¥1,800¥1,955¥1,732¥1,627

¥1
¥1
¥1
¥1
¥1
¥1
¥1
¥1
¥1
¥1
¥1
¥1
¥1

Period during which the Stock
Option may be exercised
Jul. 10, 2006~Jul. 9, 2026
Jul. 5, 2007~Jul. 4, 2027
Jul. 7, 2008~Jul. 6, 2028
Jul. 9, 2009~Jul. 8, 2029
Jul. 9, 2010~Jul. 8, 2030
Mar. 12, 2012~Mar. 11, 2032
Mar. 15, 2013~Mar. 14, 2033
Mar. 14, 2014~Mar. 13, 2034
Mar. 18, 2015~Mar. 17, 2035
Mar. 16, 2016~Mar. 15, 2036
Mar. 17, 2017~Mar. 16, 2037
Mar. 16, 2018~Mar. 15, 2038
Mar. 18, 2019~Mar. 17, 2039

Of the above, total number of unexercised Stock Option held by Directors and Statutory Auditors of the Company(breakdown by each issue of the Stock Option)(As of March 31, 2019)
Directors
Issue

Statutory Auditors

Number of Units

Number of Directors
Holding Rights

Number of Units

Number of Statutory
Auditors Holding Rights

The 8th Issue of the Stock Option

10

2

5

1

The 9th Issue of the Stock Option

15

3

5

1

The 10th Issue of the Stock Option

53

4

12

1

The 11th Issue of the Stock Option

79

5

14

1

The 12th Issue of the Stock Option

75

5

12

1

The 13th Issue of the Stock Option

75

5

9

1

The 14th Issue of the Stock Option

61

5

8

1

The 15th Issue of the Stock Option

71

5

–

–

The 16th Issue of the Stock Option

77

5

–

–

The 17th Issue of the Stock Option

100

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.

(2) Stock Option distributed during the subject Fiscal Year
Stock Option distributed during the subject Fiscal Year is stated in the 17th Issue of the Stock Option noted in (1) above.
Status of Stock Option distributed to employees of the Company in the 17th Issue of Stock Option.
No. of Unites

No. of Recipients

221

21

(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

21

based on the resolution of the meeting of the Board of Directors held on November 26, 2014 are stated below.
Title
The total amount of debenture

Zero Coupon Convertible Bonds due to2021
20 billion yen

Issue date

December 12, 2014

Redemption fixed date

December 10, 2021

Number of stock acquisition rights
Type of shares to be issued upon exerciseof stock acquisition rights

2,000 units
Common shares of the Company

Number of shares to be issued upon
exercise of stock acquisition rights

The number is determined by dividing theaggregate principal amount of the bonds
upon exercise of the stock acquisition rights
by the conversion price

Conversion price*¥1,912.8 per share (subject to adjustment incertain circumstances)

The contents and the value of the assets
In case of the use of the stock acquisition
invested on the occasion of use of the stock rights, the Bond holder will invest theacquisition rights
bonds upon exercise of the stockacquisition rights and the Bonds price will
equal to the face value price.
Exercise period of stock acquisition rights

Between December 26, 2014 andNovember 26, 2021

Note 1: The proposal to pay out ¥40 per share for the year-end dividend was approved at the board of directors meeting on May 9, 2019.
The dividend payout for the previous fiscal year was ¥70 per share, and as a result the conversion price is being adjusted.
(Effective date: As of April 1, 2019)
Note 2: The Zero Coupon Convertible Bonds due 2018 (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 expired on November 28, 2018 and matured on December 12,
2018.

22

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. We have implemented a series of groundbreaking management reforms relating to basic elements ofcorporate governance with the aim of enhancing transparency, ensuring fairness, accelerating decision-making, andensuring monitoring and supervision independence(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 basedon these 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
the Company, the strengthening of the management oversight and supervisory functions and similar corporate
governance that are the aim of a “company with nominating committees” are effectively achieved via an “Advisory
Board”, a “Board of Directors and executive officer system that includes independent outside directors,” and a “Boardof 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 provisionsof 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 Boardof Directors (individual medium- or short-term plans relating to each business group or function operations, andindividual important matters) are decided by the President and CEO through deliberation in the “Group Strategy
Committee,” which meets once a week in principle, and the “Group Management Committee,” which meets once amonth in principle.
The “Group Strategy Committee” and “Group Management Committee” members consist of the CEO, Responsiblefor 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 ofIncorporation 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 ofwhom 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 chaired by the chairman of the Company (in the case of vacant of the chairman of the Board,the director of senior advisor or the outside director will take the chairmanship of the Board), as a means of separating
oversight and supervision from execution 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.
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 chairs the Advisory Board. The Advisory Board alsofunctions as a nominations and remuneration committee, making recommendations regarding the alternation of the
23

CEO and nomination of a successor, deliberating the selection of Chairman, deliberating the system and levels ofcompensation for Teijin Group directors, and evaluating the performance of the CEO and representative directors. For
matters concerning CEO, CEO leaves the room and does not participate in the discussion. For matters concerning thechairman, 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 and the President & CEO. Outside Director chairs both committees. Bothcommittees shall have a function to make proposals and recommendations to the Board of Directors with respect tothe 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 as lawyer. Moreover, as a system provided forgroup consolidated management, the Committee of Teijin Group Statutory Auditors, comprising statutory 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,and carries out Group-wide and global audits to evaluate efficiency and validity of internal control functions.
Furthermore, at certain listed subsidiaries and so forth, individual internal audit organizations have been established.
As of March 31, 2019, the number of internal auditors in the Teijin Group is 18 (excluding internal auditors at listed
subsidiaries and so forth).
8) Status of Accounting Audits
The status of certified public accountants who executed business is as follows (items in brackets are the affiliatedauditing firm and number of consecutive years performing audits).
Iwao Hirano (KPMG AZSA LLC, 6 years), Kiyoshi Hirai (KPMG AZSA LLC, 5 year), Takeharu Kirikae (KPMG
AZSA LLC, 4 years).
The status of assistants who executed auditing is as follows.
Certified public accountants 21, others 30, total 51.
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 therisks into management strategy or business operating risks and conducts comprehensive management against the risks.
The Board of Directors deliberates and determines basic policies and annual plans related to TRM that are proposedby 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/)24

5. Directors and Statutory Auditors(1) Directors and Statutory Auditors(As of March 31, 2019)
Post

Duty, state of significant positions
concurrently held at other companies

Name

President, Representative Director

Jun Suzuki

CEO (Chief Executive Officer)
Officer, Japan Association of Corporate Executives (Keizai Doyukai)

Vice President,
Representative Director

Kazuhiro Yamamoto

CFO (Chief Financial Officer)
CIIO

Senior Executive
Officer, Director

Hiroshi Uno

Responsible for Healthcare Business of Teijin Group

Senior Executive Officer, Director

Yasumichi Takesue

Responsible for Materials Business of Teijin Group

Senior Executive Officer, Director

Yoshihisa Sonobe

Responsible for Corporate Strategy Officer
Responsible for Global Strategy

Director

Nobuo Seki

Outside Director, KAMEDA SEIKA Co., Ltd.
Outside Director, Yokogawa Electric Corporation

Fumio Ohtsubo

Panasonic Corporation Special Advisor
Outside Statutory Auditor Kansai Electric Power Co., Inc.
Trustee, Nippon Life Ins.
Director, Kansai University
Trustee, Japan-Indonesia Association, Inc.

Director*Director

Board Chair, Japan Women’s Innovate Network
President & CEO, Globalization Research Institute Co., Ltd.
Outside Director, Aeon Co., Ltd.
Outside Director, HOYA Corporation

Yukako Uchinaga

Adviser to President and Visiting Professor, Chubu university
Adviser, Amundi Japan Ltd*Director

Yoichi Suzuki

Full-time
Statutory Auditor

Noriaki Endo

Full-time
Statutory Auditor

Atsushi Mugitani

Statutory Auditor

Nobuo Tanaka

Chairman, The Sasakawa Peaceful Fund
Outside Director, Chiyoda Corporation
Outside Statutory Auditor, Innotech Corporation

Gen Ikegami

Representative, Gen Ikegami Certified Public Accountant Office,Certified Public Accountant
Outside Director, TAC Co., Ltd.
Counsel and Chairman of the Ethics Committee, The JapaneseInstitute of Certified Public Accountants

Hitomi Nakayama

Partner lawyer, Kasumigaseki-Sogo Law Offices
Director, Public Interest Incorporated Foundation “Automotive
Dispute Resolution Center”
Auditor, Japan Electric Meters Inspection Corporation

Statutory Auditor

Statutory Auditor

Note 1: The directors marked with * were newly elected at the 152nd Ordinary General Meeting of Shareholders held on June 20, 2018.
Note 2: Four (4) Directors—Nobuo Seki, Fumio Ohtsubo, Yukako Uchinaga and Yoichi Suzuki —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. Refer to pages 11-12 for the requirements of “Independent Director” which
Company defines.
Note 3: There are no important interests between the Company and any of the entities at which the abovementioned outside directors holdpositions 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 theCompany. These three (3) Statutory Auditors satisfied the all said requirements and maintained their independence throughout therelevant 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. Refer to pages 11-12 for therequirements of “Independent Statutory Auditor” which Company defines.
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: Statutory Auditor Gen Ikegami is a Certified Public Accountant and has ample knowledge of finance and accounting.

25

Note 7: The following Directors retired as of June 20, 2018.
Director
Director
Director

Shigeo Ohyagi
Yutaka Iimura
Kenichiro Senoh

Note 8: Changes in posts and duties of Directors during the subject fiscal year are as follows.
Name

Yoshihisa Sonobe

Former Post

Date of
ChangeExecutive Officer, Director
Responsible for Corporate Strategy Officer
Responsible for Global Strategy
Responsible for Legal and Intellectual Property

April 1, 2018

New Post
Executive Officer, Director
Responsible for Corporate Strategy Officer
Responsible for Global Strategy

Note 9: Changes in posts and duties of Directors following the subject fiscal year are as follows.
Name

New Post

Former Post

Date of
ChangeKazuhiro Yamamoto

Vice President,
Representative Director
President, Responsible for Chief Officers of
Teijin Group

Vice President,
Representative Director
CFO (Chief Financial Officer)
CIIO

April 1, 2019

Hiroshi Uno

Director

Senior Executive Officer, Director
Responsible for Healthcare Business of Teijin
Group

April 1, 2019

Yoshihisa Sonobe

Senior Executive Officer, Director
CFO (Chief Financial Officer)

Executive Officer, Director
Responsible for Corporate Strategy Officer
Responsible for Global Strategy

April 1, 2019(2) Liabilities Limitation Agreements
1) Liabilities Limitation Agreement with Outside Directors
The Company has executed a Liabilities Limitation Agreement with each of four (4) outside directors, Nobuo Seki,
Fumio Ohtsubo, Yukako Uchinaga and Yoichi Suzuki which limits the respective liabilities of each director to thehigher amount of ¥20 million or the minimum liability amount stipulated in Article 425, Paragraph 1, of the Companies
Act.
2) Liabilities Limitation Agreement with Statutory Auditors
The Company has executed a Liabilities Limitation Agreement with each of five (5) statutory auditors, Noriaki Endo,
Atsushi Mugitani, Nobuo Tanaka, Gen Ikegami and Hitomi Nakayama which limits the respective liabilities of eachstatutory auditor to the higher amount of ¥20 million or the minimum 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-focusedmanagement awareness The system should maintain sufficient remuneration levels to secure high-quality management human resources② Composition of remuneration, etc. for directors and statutory auditors
 Internal director remuneration is composed of fixed basic remuneration, variable performance-based remuneration(short-term incentive remuneration), and compensation-type stock options (medium- to long-term incentive
remuneration), with the aim of instilling awareness of short-term achievement of performance goals and mediumto long-term improvement of corporate value.
 Remuneration for outside directors and statutory auditors is solely fixed remuneration, not linked with theperformance of the Company.
26

③ Remuneration 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
conducted among major corporations in Japan each year.
④ Composition ratio of remuneration
For internal directors, the composition ratio is as follows.
Fixed remuneration

Note:

Variable remuneration

Basic remuneration

Performance-based
remuneration

Compensation-type stock
options

Total remuneration

65%

25%

10%

100%

The ratio for performance-based remuneration and compensation-type stock options is based on 100% achievement of relevanttargets.

⑤ Indicators 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.
⑥ Overview 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 priceis ¥1 (the stock option recipient pays ¥1 per stock). The number of stock options allocated varies depending on theachievement of consolidated ROE and the achievement versus forecast of consolidated EBITDA. Moreover, theallocated stock options have a condition that allows the recipient to exercise the options within a five-year period
after retiring as a director.
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.
3) Remuneration for Directors and Statutory Auditors during the subject fiscal year
① Remuneration for Directors during the subject fiscal year
(millions of yen)
Inside Directors

Outside Directors

Total

Number of
Directors

Amount ofRemuneration

Number of
Directors

Amount ofRemuneration

Number of
Directors

Amount ofRemuneration

6

398

6

63

12

461

Note 1: Inside directors means directors other than outside directors.
Note 2: The Company has no director who is also an employee of the Company.
Note 3: The amounts of above remuneration include ¥92 million, an expected amount of performance-based remuneration to be paid
to the five (5) inside directors appointed at the 152nd Ordinary General Meeting of Shareholders held on June 20, 2018.
Performance-based remuneration was not paid to outside directors. The amounts of above remuneration include ¥32 million as

27

compensation-type stock options granted to inside directors for their duties performed during the subject fiscal year. Stock
options were not granted to outside directors.
Note 4: The Company abolished the retirement benefits payment system for retiring inside directors at the conclusion of the 145th
Ordinary General Meeting of Shareholders held on June 22, 2011. For the directors who remained in office after the conclusionof the said Ordinary General Meeting of Shareholders, it was decided that payments of retirement benefits corresponding totheir respective periods in office up to the abolishment of the retirement benefits payment system are to be made when eachdirector retires. In accordance with this, apart from the above-mentioned amounts of remuneration, retirement benefits of ¥12
million were paid to one (1) inside director who retired during the subject fiscal year. Retirement benefits are not paid to outside
directors.

② Remuneration for Statutory Auditors during the subject fiscal year
(millions of yen)
Inside Statutory Auditors

Note:

Outside Statutory Auditors

Total

Number of
Statutory Auditors

Amount ofRemuneration

Number of
Statutory Auditors

Amount ofRemuneration

Number of
Statutory Auditors

Amount ofRemuneration

2

69

3

35

5

104

Inside statutory auditors means statutory auditors other than outside statutory auditors.

4) Method for determining remuneration of directors and statutory auditors
The Advisory Board deliberates on the remuneration of the Chairman of the Board and CEO, and the Compensation
Consultative Committee deliberates on the remuneration for directors other than the Chairman of the Board and 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
and Outside 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
Category

Outside Directors

Outside Statutory
Auditors

Name

Main Activities

Nobuo Seki

Attended 12 of the 12 meetings of the Board of Directors held during
the relevant fiscal year and offered valuable comments from his
extensive management experience and knowledge.

Fumio Ohtsubo

Attended 12 of the 12 meetings of the Board of Directors held during
the relevant fiscal year and offered valuable comments from his
extensive management experience and knowledge.

Yukako Uchinaga

After her appointment on June 20, 2018, she attended 9 of the 9meetings of the Board of Directors held during the relevant fiscal
year and offered valuable comments from her wealth of businessexperience, outstanding insights in the IT field, and a deep
understanding of diversity.

Yoichi Suzuki

After her appointment on June 20, 2018, he attended 9 of the 9meetings of the Board of Directors held during the relevant fiscal
year and offered valuable comments from his expertise andknowledge of international economic and trade issues, etc.,
cultivated over many years as a diplomat.

Nobuo Tanaka

Attended 12 of 11 meetings of the Board of Directors and 12 of 12
meetings of the Board of Statutory Auditors held during the relevant
fiscal year and offered valuable comments from his experience at the
government agencies and international organization and offered, inparticular, advice and suggestions concerning corporate governance.

Gen Ikegami

Attended 12 of 12 meetings of the Board of Directors and 12 of 12
meetings of the Board of Statutory Auditors held during the relevant
fiscal year and offered valuable comments from his professional
knowledge as a Certified Public Accountant.

Hitomi Nakayama

Attended 12 of 12 meetings of the Board of Directors and 12 of 12
meetings of the Board of Statutory Auditors held during the relevant
fiscal year and offered valuable comments from her professional
knowledge as lawyer, and offered, in particular, advice andsuggestions concerning compliance28

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 to the accounting auditor

1712) The total amount of cash or other proprietary interest to be paid by the Company and its
subsidiaries to the accounting auditor

327

Note 1: The amount described in Item 1) of the above table is the total sum of the remunerations for audits under the Companies Act andthe remuneration for the audits under Financial Products & Exchange Act in Japan because these are not clearly distinguishedfrom 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 by accounting firmother 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, as a result of the confirmationof 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 theaccounting 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,
and to securing sufficient internal reserves to fund strategic investments aimed at ensuring future growth.

29

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
Board of Directors meeting held on March 29, 2019.
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
practical operation 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 inobserving laws, regulations and the Articles of Incorporation, social rules and ethics, and shall promote complianceeducation and awareness among directors, officers and employees of the Company and its subsidiaries. In order toestablish a compliance system across the entire Teijin Group, the Company appoints Chief Social Responsibility
Officer as the officer 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 ensurethat anonymity of the caller is protected and that the caller does not get any disadvantageous treatment. Important
reports as well as measures taken by the relevant Teijin entity and their results shall be announced as appropriate to,and shall be recognized 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, more than one of the directors shall beoutside 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
that might 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 withrisk events including disasters, the inappropriate performance of duties by directors, officers or employees, and damage
to critical IT systems.
3) Systems for Ensuring that Duties by Directors and Employees of the Company and Its Subsidiaries Are
30

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 theoperation of the Company and decisions for the items on which the representative directors and other executives havebeen delegated decision-making powers shall be made by the organization and procedures in accordance with theinternal regulations. These regulations shall be revised as may be necessary to reflect any revision and/or abolition oflaws and regulations 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 themedium-term 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,and to 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 TeijinGroup.
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
the Group’s entire business operations.
To ensure the reliability of its financial reporting, the Company shall establish a group-wide internal control system
for the financial reporting and the operation of the Teijin Group individual operational processes, and shall properly
and efficiently operate and assesses such systems.
5) Systems for the Preservation and Management of Information in Relation with the Directors’ Performance of
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, theIndependence 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.

31

7) System for Reporting to Statutory Auditors by Directors, Corporate Officers and Employees of the Company
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 bodiesof 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.
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, andshall promptly respond to requests for pre-payment of expenses in accordance with laws and regulations after checking
the requests.
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 thecourse of 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 inwhich internal 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 andregulations.
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 forreporting 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
the status 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 evaluationsof 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.
32

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.
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 basedon Group 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 thevarious 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 statusof 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 toensure the effectiveness of the auditing of the Statutory Auditors.

33

9. Basic Policy Regarding the Control of the Company(1) Basic Policy Regarding the Company’s Shareholders(Basic policy regarding those who control the decision of the company’s financial and business policy)
The Company believes the existence of its shareholders is based on free transactions in the market and therefore theCompany’s shareholders should make the final decisions as to whether to accept a proposal of a large-scale acquisition
that would result in a transfer of the Company’s control.
However, it is envisioned that some large-scale acquisition of the Company’s shares or such proposals might entail,among others, the followings:① The likelihood of causing obvious harm to the corporate value of the Company and the common interests of theshareholders.
② The threat of compelling the shareholders to sell their shares.
③ In case the compensation of the Acquisition is insufficient in view of the corporate value of the Company.
The Company believes such a large-scale acquirer of the Company’s shares or a person or company who proposessuch an action is exceptionally inappropriate to control the decision of the Company’s financial and business policies.
(2) Measures to Realize the Basic Policy
The Company has already launched the following measures to improve the corporate value of the Company and thecommon interests of the shareholders to ensure that investors can continue to invest in the Company over the longterm. The Company believes such measures will contribute to the realization of the basic policy described in (1) above.
1) Medium-Term Efforts
In February 2017, the Teijin Group formulated and announced its new medium-term management plan for 2017-2019,“ALWAYS EVOLVING,” as a three-year action plan to realize its long-term vision. Guided by the medium-term
management plan, the Teijin Group will improve core earnings through growth strategies, establish new corebusinesses through transformation strategies and strengthen its basic management systems to support those strategies.
Refer to the 19-20 pages for the contents of Tasks Ahead and Medium & Long-Term strategies.
2) Measures to Improve Corporate Value through Strengthening Corporate Governance
As an essential system to achieve steady growth of the corporate value of the Company and the common interests ofthe shareholders, the Company has strived to strengthen corporate governance. Refer to pages for the contents of the
Corporate Governance System.
3) Introduction of the Countermeasures to Large-Scale Acquisitions of the Company’s Shares
The Company will continue to request provision of information necessary and sufficient for shareholders to makeproper judgments on the appropriateness of large-scale acquisition with respect to parties that engage in or are about
to engage in large-scale acquisition of Teijin shares, as well as take appropriate measures in accordance with the
Financial Instruments and Exchange Act, Companies Act and other relevant laws and regulations after the abolition of
the Plan, including disclosure of the opinions, etc. of the Board of Directors of the Company, and efforts to ensure timeand information necessary for examination by shareholders.
Note:

Italicized product names and service names in this report are trademarks or registered trademarks of the Teijin Group in Japan
and/or other countries, or, where noted, are protected as the trademarks and/or trade names of other companies.

34

10. Financial Statement(1) Consolidated Balance Sheets

FY2017(As of Mar. 31, 2018)(Millions of yen)
FY2018(As of Mar. 31, 2019)

Total

96,418
177,777
14,00091,258
10,82834,17913,12640,852(578)
477,859

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

Total

60,107
94,87042,092
20,60822,613
240,289

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

Total

27,19233,14960,341

32,84536,66469,510127,7212,986
39,576
10,675
24,622(2,102)
203,479
504,108

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

981,967

1,020,654< 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 assets

35

< 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
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

36

FY2017(As of Mar. 31, 2018)(Millions of yen)
FY2018(As of Mar. 31, 2019)

92,383
66,291
16,175
17,986
5,111
9,572
24,61744,051
276,186

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

35,053
207,163
35,6501,426
5,058
13,194
297,544573,730

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

71,833
104,685
202,413(167)
378,765

71,833
104,256
235,324(13,412)
398,000

28,377903(14,815)(305)
14,16026,720(52)(11,402)(2,538)12,728860
14,453
408,237
981,967889
15,595427,2121,020,654

(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

37

FY2017FY2018(Apr. 2017-Mar. 2018)(Apr. 2018-Mar. 2019)834,986
565,689
269,297
199,474
69,823

888,589
620,715
267,874
207,874
60,000

967
2,035
1,215
601
－
1,178
5,996

973
2,320
434
－
2,424
1,089
7,240

2,646
－
588
3,109
1,656
7,999
67,820

3,499
846
494
－
2,138
6,977
60,264

5,595
586
377
－
193
6,752

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

4,147
89
1,076
828
538
6,678
67,894
11,2699,524
20,793
47,101
1,545
45,556

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

(3) Consolidated Statement of Changes in Net Assets

FY2018 (Apr. 2018 - Mar. 2019)(Millions of yen)
Shareholders' equity
Capital stock Capital surplus

Balance as of March 31, 201871,833

104,685

Total
Treasury stock shareholders'equity202,413(167)
378,765

Retainedearnings

Changes of items during the period
Dividends from surplus(11,688)(11,688)

Profit attributable to owners of parent

45,05745,057Purchase of treasury stock
Disposal of treasury stock(624)

Transfer of loss on disposal of treasury shares

459

Change in treasury shares of parent arising from transactions
with non-controlling shareholders(264)(20,039)(20,039)

6,793

6,169

(459)

－
(264)

Net changes of items other than shareholders' equity
Total－
71,833

Balance at March 31, 2019

(429)

32,910(13,246)

19,235104,256

235,324(13,412)

398,000

Accumulated other comprehensive income
Valuation
Deferred gains
difference onor losses onavailable-forhedges
sale securities
Balance as of March 31, 2018

28,377903

Foreigncurrencytranslation
adjustment(14,815)

Remeasurements ofdefined benefit
plans
(305)

Total

14,160

Subscription
Non-controllingrights tointerests
shares860

14,453

Total net
assets408,237

Changes of items during the period
Dividends from surplus
Profit attributable to owners of parent(11,688)
45,057Purchase of treasury stock(20,039)

Disposal of treasury stock

6,169

Transfer of loss on disposal of treasury shares－

Change in treasury shares of parent arising from transactions
with non-controlling shareholders
Net changes of items other than shareholders' equity
Total
Balance at March 31, 2019(264)
(1,658)

(955)

3,413

(2,232)(1,432)

29

1,143

(260)

(1,658)

(955)

3,413

(2,232)(1,432)29

1,143

18,97526,720(52)(11,402)(2,538)12,728889

15,595427,21238

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

39

FY2017FY2018(Apr. 2017-Mar. 2018)(Apr. 2018-Mar. 2019)47,101

46,797

6,854
1,180
8,679
863

(1,412)(956)
4,382(2,275)

1,468

(913)

19,043
66,144(1,174)45,62364,2001,945

43,625
1,999

Consolidated Statements of Cash Flows (Reference)(Million yen)

Cash flows from operating activities
Income before income taxes
Depreciation and amortization
Impairment loss
Increase (decrease) in net defined benefit liability
Decrease (increase) in net defined benefit asset
Increase in investment securities due to retirement benefit trust return
Increase (decrease) in allowance for doubtful receivables
Increase (decrease) in provision for business structure improvement
Interest and dividends income
Interest expenses
Equity in (earnings) losses of affiliates
Loss (gain) on valuation of derivatives
Loss (gain) on sales and retirement of noncurrent assets
Loss (gain) on sales of investment securities
Loss (gain) on valuation of investment securities
Settlement received
Decrease (increase) in notes and accounts receivable-trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable-trade
Other, net
SubtotalInterest and dividends income received
Interest expenses paid
Settlement package received
Income taxes paid
Net cash and cash equivalents provided by operating activities

FY2017FY2018(Apr. 2017-Mar. 2018)(Apr. 2018-Mar. 2019)

67,89445,655
1,076
2,179(2,781)－(101)(16,485)(3,002)
2,646(1,215)
3,109(1,449)(585)
89－(10,813)(11,295)
12,307
5,031
92,25960,36047,551
5,990
1,911
4,985
(6,099)(27)(1,202)(3,293)3,499(434)(2,424)
2,025(4,845)246(4,500)(13,751)(8,187)(1,343)724
81,185

5,968

7,751

(2,565)－(15,571)
80,092(3,493)4,500(9,044)80,899(42,605)
10,143(3,431)(5,161)690(1,942)－(3,685)
(529)
(868)
300
(4,219)(51,307)(55,599)
310(3,328)(3,620)40,357(16,411)
1,056
－
(489)
(532)
93
(3,125)(41,288)

10,619－16,051(45,831)(21)(11,804)(287)

31,433(11,910)
25,918(27,858)(20,039)(11,688)
(436)

－

(477)

(212)
(31,485)(296)(15,353)

Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Purchase of shares of subsidiaries resulting in change in scope of consolidation
Proceeds from sales of shares of subsidiaries resulting in change in scope of consolidation
Payments for sales of shares of subsidiaries resulting in change in scope of consolidation
Decrease (increase) in short-term loans receivable
Payments of long-term loans receivableCollections of long-term loans receivable
Other, net
Net cash and cash equivalents used in investing activities
Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Redemption of bonds
Proceeds from long-term loans payable
Repayment of long-term loans payable
Purchase of treasury shares
Cash dividends paid
Cash dividends paid to non-controlling interests
Payments from changes in ownership interests in subsidiaries that do not result in change
in scope of consolidation
Other, net
Net cash and cash equivalents provided by financing activities
Effect of exchange rate changes on cash and cash equivalents

1,309

(184)

Net increase (decrease) in cash and cash equivalents(1,392)

24,074

Cash and cash equivalents at beginning of period

117,550

116,158

Increase in cash and cash equivalents resulting from change of scope of consolidation
Cash and cash equivalents at end of period－
116,158202
140,43440