Nittobo Group Integrated Report2-4-1, Kojimachi, Chiyoda-ku, Tokyo, 102-8489, Japan
Telephone: +81-3-4582-5111
URL: https://www.nittobo.co.jp/

2019

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Group Integrated Report 2019
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MissionCorporate Philosophy, Nittobo Declaration,
Corporate Vision……………………………………… 1

Corporate Philosophy
Nittobo Group will, as a corporate group, enhance

PART 1 Value Creation

History of Value Creation……………………………… 2
Top message…………………………………………… 4

its significance by striving to create healthy andMid- to Long-term Business Plan “Long-term Vision 101”and Mid-term Business Plan “Go for Next 100”…… 10

comfortable lifestyles, and thereby continue to

Value Creation Process…………………………… 14

contribute to the realization of prosperous communities.

Working behind the scenes,
to support lifestyles and society.………………… 16
PART 2 Business Activities

Feature Article
Glass Fiber Creating New Value………………… 18“Nittobo of Immunology” Transforms Medical Care…… 20

Report Period
This report covers business activities
in FY2018 (from April 1, 2018 throughMarch 31, 2019).

Consolidated Financial Highlights………………… 22

Scope of Report

Segment Overview

This report covers the businessactivities of Nitto Boseki Co., Ltd. andits consolidated subsidiaries in Japanand overseas.

Textile Business…………………………………… 24
Glass Fiber Yarn Business……………………… 25
Glass Fiber Cloth Business……………………… 26
Glass Fiber for Industrial Materials Business…… 27
Life Science Business…………………………… 28
Research and Technological Development……… 29
PART 3 Foundation for Value Creation

CSR Initiatives……………………………………… 30
Active Roles of Diverse Talent…………………… 32
Environmental Initiatives…………………………… 34
Corporate Governance…………………………… 38
Directors and Officers ……………………………… 43
PART 4 Data Section

Consolidated Financial Statements ……………… 44
Company Profile …………………………………… 50
Stock Information …………………………………… 51

Values•N ittobo Group aims to become the “Best Partner” of your community.
(Nittobo BP Declaration)• We will relentlessly strive to identify our customers’ needs and will find greatsatisfaction in steadfastly earning their Confidence and Trust. In addition, we
will attach importance to sharing this satisfaction with all of our stakeholders(communities) through our products and services, including shareholders,investors, public administrations and regional communities.
• We are committed to becoming a corporate group in which the potential of
our respective, independent employees is valued and thereby inspires our
employees to freely and willingly share their own ideas, ultimately achieving
greater results through teamwork.
•O ur corporate group will provide its’ employees with an opportunity for
progress and self-realization based on the belief that their progress leads toeveryone’s success. We will encourage our employees to be good citizens,
think deeply, observe widely, act courageously and to approach their jobs
with resolve and determination.

Forward-looking Statements
The forecasts presented in this reportare based on information available
to the company as of the publication
date. Forward-looking statements
included in this report do not represent
promises or guarantees that thecompany will attain its forecasts
or realize the business measures
expressed herein.

Editorial Policy
The Corporate Report 2019 combines
financial information and nonfinancial information including CSR toprovide stakeholders with a greater
understanding of the Nittobo Group’s
value-creating initiatives for the
medium and long term.
Previously the Nittobo Group’s
corporate social responsibility (CSR)
initiatives were disclosed on thecorporate website under the “CSR”
page.

Nittobo Declaration

Deeply, Widely, Strongly and Hospitably

VisionCorporate Vision
Nittobo delivers the unique products andinnovations globally from Fukushima in Japan basedon customer relations and technology.

1

PART 1

Value Creation

History of Value Creation
The Nittobo Group was founded in 1923 in Fukushima Prefecture as a textiles manufacturer. Over the
decades, we became the first Japanese company to industrially produce glass fiber (1938), became the firstin Japan to manufacture glass wool (1949), and made inroads into medical business (1978). In each era, wehave embraced change as opportunity and continually developed the Company by relishing the challenge tocreate new technologies and priding ourselves on our pioneer spirit.

1967

1969

1988

2019

Fukushima glass fiberyarn factory newly
establishedDirect melt furnace No.1
installed to meet growing
glass fiber demand

Fukushima No.2 factory
newly established
Plant specializes in
production of glass
cloth for printed wiringboardsYarn manufacturer
Nittobo Norplex Oak
Co., Ltd. established
Predecessor of
NITTOBO ASIA Glass
Fiber Co., Ltd. (Taiwan)

Cloth manufacturer
Baotek Industrial
Materials Ltd. (Taiwan)
converted into a
consolidated
subsidiary

Glass fiber business Providing high-performance glass that matches the times, strengthening the position as a leader in the glass fiber industry
1949

1964

1969

1984

1985

1998

First in Japanto start glass
wool
production

Glass fiber adopted
for use in Tokaido
shinkansen nose
cone

Launched
glass cloth for
printed wiringboardsLaunched T
Glass (lowthermalexpansion)

Launched finecount yarn

Launched NE
Glass (lowdielectricfeature)

1986

1987

1997

2018

2019

Acquired International
Immunology Corporation, thepredecessor of Nittobo
America Inc.
Started immunological in vitro
diagnostic reagent business

Established Nittobo
Medical Co., Ltd.
and its own brandfor in vitro diagnostic
reagents

Established Nitto
Beverage Co., Ltd.

Acquired Kamiya
Biomedical, LLC togain sales networks
and know-how for
regulatory clearance
in the U.S.

Acquired Capricorn
Products, LLC tostrengthen procurementof raw materials for invitro diagnostic
reagents in the U.S.

Life Science Business Contributing to preventive medicine as it has become the second business pillar for the Group
1978

1983

1987

2012

2018

Launched synthetic
substrate for γ-GTP

Launched specialty
chemicals PAA™

Launched
immunological in
vitro diagnostic
reagents

Launched Osteolinks
TRAP-5b, a diagnostic
reagent kit withgenetically modified
silkworm technologies

Launched IgG4
measuring reagent
kit for use on an
automated analyzer

1898
Koriyama
Kenshi BosekiCo., Ltd.
established in
Koriyama

1923
Nitto BosekiCo., Ltd.
established
1918

1938

1952

Succeeded inindustrial
production of glass
fiber and started
manufacturingrock wool—both
firsts in Japan

Opened Chemical
Fiber Laboratory, theroots of the medical
business. The lablater evolved into
Biochemical
Laboratory

Fukushima
Seiren Seishi
Co., Ltd.
established in
Fukushima

1890s
2

1920s

1940s

Textile Business Contributing to the creation of comfortable lifestyles
1960

1965

1969

2015

2018

Launched
Nittobo
Dishcloth™

Startedproduction ofdual-structure
stretchable
yarn “C·S·Y™”

Launched ladies’
apparel interlining
brand “Dan Reine™”“Nittobo Dishcloth™”
won Good Design Award

Launched“Innovative Fabric™”
applying interlining
processing
technology

1960s

1980s

2000s
3

PART 1The Nittobo Group will continue todeliver innovation from our origins inFukushima, to gain the trust of all
stakeholders in the pursuit of client
satisfaction.

Yuichi Tsuji
Director,
Representative and Chief Executive Officer

Please tell us about the
Nittobo Group.
▶ Please see pages 2-3 for the history of the

Nittobo Group.

4

The roots of Nittobo go back to Koriyama Kenshi Boseki Co., Ltd., establishedin Koriyama City, Fukushima Prefecture in 1898. Koriyama Kenshi Boseki
utilized the water of Asaka Canal, the development of which was facilitatedby the Meiji Government, and engaged in both power generation businessand textile business using its excess power. Koriyama Kenshi Boseki became
Katakura Seishi Boseki Kabushiki Kaisha, which integrated with Fukushima
Seiren Seishi, and then Nitto Boseki Co., Ltd. was founded in 1923. “Nittobo”
will mark its 100th anniversary in 2023, but its roots actually date back morethan 120 years.
Nittobo has been full of enterprising spirit since its inception. Sanpei
Katakura, the second President, is the one who can be considered to have laid
the foundation of the present Nittobo business. Sanpei Katakura had a very
robust pioneering spirit, which is manifested in his motto of “Let’s turn anything
into fibers.” Under this motto, which expresses his spirit of innovation, he madeefforts to turn various substances into fibers and succeeded in inventing manytechnologies that were “Japan’s first.”
In 1933, Nittobo became the first company in Japan to develop synthetic
staple fiber using pulp as raw materials with its own technology. Moreover,
Nittobo succeeded in the first commercial production of glass fiber in Japan
in 1938. In the same year, Nittobo also started manufacturing rock wool, which
was Japan’s first as well.
Nittobo has been constantly inventing new technologies and starting new
businesses that meet the needs of society, always seizing opportunities
presented in times of change. The foundation of Nittobo lies in its dedication to
new technologies and brisk pioneering spirit, and we believe that technologicalcapabilities are our biggest strength.

Value Creation

Please tell us about yourapproach to business
management.

The Nittobo Group states in its Corporate Philosophy that the Group will
enhance its social importance as a corporate group to “create healthy andcomfortable lifestyles, and thereby continue to contribute to the realizationof prosperous communities.” Furthermore, the Nittobo Group declares in the“Nittobo Declaration,” which sets out our shared values to gain the trust ofsociety, that it is the Group’s pleasure to constantly pursue what clients wantand sincerely deliver “safety and trust.”
Now, what is the essence of our declaration? It is that we would like to gain
the trust of all stakeholders in the pursuit of client satisfaction. When we think
about for whom a company exists, of course shareholders come to our mind
first, but our stakeholders also include the clients who purchase our products,
business partners who provide us with raw materials, local communities, andemployees who work for the Nittobo Group and their families. We would like tobecome a company that gains trust from all of such stakeholders.
When I was appointed as Chief Executive Officer in February 2016, the firstthing I thought about was how I would run business operations to achievesustainable growth while fulfilling our corporate responsibilities. I thought it wasnecessary to change the value systems of all the officers and employees of theGroup including myself. Consequently, three basic policies were formulated forbusiness operations.

▶Please see page 42 for more information

The first basic principle was to be a truly open company internally and externally.
I thought I would like to cultivate a corporate culture in which employees
keep respecting one another and can work comfortably. Employees’ growthis essential for a company to grow. Therefore, I would like to create anenvironment where each and every one of our employees can work with agreater sense of satisfaction and grow through their work. In addition, I thought
I would like to create an environment where free and open-minded, constructive
opinions and ideas would turn up and a virtuous cycle that would actualize this.
In addition, I consider that a free and open atmosphere should be createdexternally, too. The Corporate Communication Department was established in
April 2017 to put in place a structure to disseminate timely and appropriate
information with transparency and fairness.

about stakeholder dialogue.

▶Please see page 29 for more information
about research and development andtechnological development.

The second basic principle was returning to our roots as “Nittobo theTechnology Innovator.” Looking five years and 10 years ahead, we will further
focus on research and development as well as technological development.
The Nittobo Group has experienced many crises in its history, the mostrecent being the financial crisis set off by the Lehman Brothers bankruptcy.
After that crisis, we aimed to build a business culture in which the Company
could generate earnings under any kind of environment. The management
priority was strengthening the financial foundation. We emphasized bolstering
the corporate foundation by eliminating irrationality, waste, and inconsistency.
Put simply, we went on a diet. Research and development and humanresources development do not qualify as wasted resources, but in the context
of prioritizing financial soundness, it was inevitable that these areas were also
targeted for reduction. We realized, however, that Nittobo cannot achieve
growth without research and development and technological innovation. Not
only do we imperil sustainable growth, but the company’s very existence is put
at risk. Since 2016, when I was appointed as Chief Executive Officer, we havebeen strengthening our research and technological development structure
because we believe that it is essential to put an emphasis on research andtechnological development from a long-term perspective.

▶Please see pages 38-42 for more

The third basic principle for management was the establishment and continual
improvement of corporate governance. We have adopted the committees
system of governance, which is one type of institutional design allowed by theCompanies Act. In this system, a company’s oversight and execution functions
are separated. Three committees—Nomination Committee, Remuneration
Committee, and Audit Committee—operate to enhance the oversight functionsof the Board of Directors, with each of the committees consisting of a majority

information about corporate governance.

5

PART 1of external directors, in accordance with the stipulations of the Companies Act.
It’s an advanced system, but it has to be more than just a shell to ensure true
corporate governance. Governance must actually function, be put into practiceand then continually improved. Since June 2015, when the implementation of
the Corporate Governance Code started, more emphasis has been placedon how the Board of Directors supervises business execution. Enhancing theeffectiveness of the supervisory function of the Board of Directors and ensuring
a prompt and highly transparent business execution have become big issues.
We have been taking the following initiatives.
We set up a “preliminary briefing” to deepen understanding of agenda items
to be presented to the Board of Directors to further vitalize its deliberations.
At the preliminary briefing, timely and appropriate explanations are madeand opinions are exchanged on agenda items for the Board of Directors
meeting and items that are deemed necessary for the supervision of business
management, spending about two hours each time. The meeting contributes
to deepening the essential understanding of the background of agenda
items and deepening the discussion of the Board of Directors meeting. In
addition, self-evaluation on the effectiveness of the composition, operation,
supervision, and support system of the Board of Directors, as well as its
dialogue with shareholders, is made every year using external lawyers. Basedon the evaluation, directors discuss how the Board of Directors and Nittobo’s
governance should be. We established an Executive Committee as an organ
to deliberate matters relating to business execution delegated by the Board of
Directors.
A quick decision-making and an agile business operation are made byholding Executive Committee meetings twice a month.
Going forward, we will pursue governance suitable for the Company’sbusiness or organization by making it take root, instead of being a mere
formality, and enhancing its effectiveness.

Please tell us about the Midto Long-term Business Plan
“VISION 101.”▶Please see pages 10-13 for more
information about the Mid- to Long-term
Business Plan “VISION 101.”

In formulating the Mid-term Business Plan in 2016, we discussed internallywhat company we were to aim for. The Mid- to Long-term Business Plan “VISION101” came out of the discussion.
Mid- to Long-term Business Plan “VISION 101”
Our Group has developed a mid- to long-term business plan called “VISION 101,” whereby our goal is to be recognized
as a company that delivers innovation from our origins in Fukushima and Japan throughout the globe, offering uniquevalue added business and products based on client expectations and technology.

As the important first step in realizing our Long-term Vision 101, we establishedthe Mid-term Business Plan “Go for Next 100” covering the four-year period
fiscal 2017 through fiscal 2020. This plan emphasizes the solidification of afoundation for sustainable high earnings while capturing growth chances forthe future. As a preparation step for the future, we are crafting a lean, muscular
structure which eliminates irrationality, waste, and inconsistency and shows theworld we are striving for sustainable growth. Even if we have to sacrifice shortterm profit, we will prioritize active growth investments into human resources
development, research and development, and facilities over these four years
as a way to thoroughly strengthen the development of unique, value-added
products, which is the Nittobo Group’s core strength. The Mid-term Business
Plan “Go for Next 100” embodies our shared vision and the unified will of thebusiness divisions.
In the process of formulating the Mid-term Management Plan “Go for
Next 100,” we made predictions on how society and markets will change,
and amid those changes, how we could best contribute to society. Japanas a whole is confronting many difficult challenges, including environmental
protection, population aging, and surging social welfare costs. At the sametime, the housing, automotive, home appliance, clothing and other industries
are digitalizing and becoming “smarter.” Within the dynamically changing
business environment, there are many areas in which Nittobo can contribute6▶Please see pages 18-19 for more
information on special glasses.

▶Please see pages 20-21 for more
information on in vitro diagnostic reagents.

Please tell us why you
decided to set specifictargets.
▶Please see page 11 for numerical targets.

Please tell us about the
progress of the Mid-term
Business Plan.
▶Please see pages 12-13 for the progress of
the Mid-term Business Plan.

Value Creation

to the global environment conservation and societal development. From theviewpoint of reducing greenhouse gas, it is necessary to reduce the weightof automobiles and aircraft in the pursuit of low fuel consumption. Use ofglass fiber can be considered in place of metal in this respect. Glass wool is
indispensable as a heat insulating material for energy savings in the home. The
raw material of glass wool is recycled glass, and the product is environmentallyfriendly because it is reusable.
Data traffic volume has been increasing daily. With the practical applicationof the “5G” next-generation communication standard just around the corner,
network infrastructure such as base stations and data centers is becoming
increasingly sophisticated. Glass fiber cloth used in these electronics materials
is a product in the field we are best at. Especially, glass fabric of a particularcomposition called special glass is an indispensable substrate for the 5G’s
advancement required for high-speed, high-volume data processing. It can besaid that it is a product that contributes to the progress toward a “smart society.”
Looking at the Life Science (Medical) business, there is a worldwide shift
from treatment to the prevention of disease and illness. It is a growing trend
to get a medical examination before succumbing to a disease from theperspective of preventive medical care, and globally there is rising demandfor in vitro diagnostic reagents. In addition, in Asian countries that have a huge
population, medical-check opportunities have been increasing dramaticallythanks to enhancements of social insurance systems and living standards.
The Nittobo Group possesses an integrated value chain for in vitro diagnostic
reagents, from raw materials to finished products, making it possible for us to
support better health around the world through our supply chain.
There is an ever-growing expansion of opportunities for the Nittobo Group toleverage its strengths for the benefit of society. We will thoroughly bolster ourstrengths to ensure we can fulfill our Corporate Philosophy, “striving to create
healthy and comfortable lifestyles, and thereby continue to contribute to therealization of prosperous communities.”
As I mentioned earlier, we have been giving top priority to reinforcing thefundamental strength of the company since the Lehman Brothers failure.
Consequently, it might have been that employees didn’t have a forward-looking
approach. Therefore, I thought I would like to set challenging targets to change
our employees’ mindset for a new growth of the Nittobo Group.
The net sales target for 2023 is 150.0 billion yen, which would mark thehighest level since 2000. We wanted each and every employee to think about
their individual targets in support of achieving the Group’s target.
Our two highest priorities are growing operating profit and increasing
ROE to 10% or higher. The main thrust of our Mid-term Business Plan is thestrengthening of value-added products such as our mainstay special glass,ultrafine yarns, ultrathin glass cloth, and in vitro diagnostic reagents, aimed
at increasing our operating profit and achieving medium- to long-term growth
in ROE. We are also striving to increase the ratio of sales outside Japan andexpand our medical business into a second pillar in order to establish a stable
and robust business portfolio.
The four years under the current Mid-term Business Plan will serve as aperiod to sow the seeds for future growth and lay a foundation for the future.
Our capital expenditure plan covering the four-year period is 55.0 billion yen,drawing on our cash flows and asset utilization. By the end of fiscal 2018, we
had made decisions on the allocation of about 50.0 billion yen, including M&As.
The focus of the investment is raising the production capacity of our mainstay
value-added products. From the second half of this fiscal year businessactivities, we have begun to see the fruits of this investment.
In the Glass Fiber business, this fiscal year we started operation of
new furnaces for special glass as demand surges with the rollout of 5G
telecommunications. We expect demand to remain robust, and we are now
considering the construction of new facilities in Taiwan and Fukushima in fiscal
2020 and beyond.
7

In the Life Science business, we are building new facilities at manufacturing
sites in Japan and the United States in order to double production capacity.
In the United States, which is currently the largest in vitro diagnostic reagent
market, we have solidified our presence by completing M&As. Specifically,
we acquired Capricorn Products, LLC (State of Maine) to increase the supplyof raw materials for in vitro diagnostic reagents, and Kamiya Biomedical
Company, LLC (State of Washington) in order to strengthen our manufacturing
and sales capabilities in the United States.

Please tell us about yourinitiative for CSR and about
ESG management.
▶Please see pages 34-37 for initiatives forEnvironment.

▶Please see pages 30-31 for initiatives forSocial.

▶Please see pages 32-33 for more
information on active roles by diverse
talents.

8

Environment
The Nittobo Group’s corporate philosophy states that the Nittobo Groupwill, as a corporate group, enhance its significance by striving to create
healthy and comfortable lifestyles, and thereby continue to contribute to therealization of prosperous communities. This means we will have an awarenessof responsibility as a corporate citizen and contribute to the realization ofprosperous communities while caring for the environment. There are manythings the Nittobo Group can contribute to the global environment through the
supply of our products.
As I mentioned earlier, glass wool insulation materials or glass fibersthat contribute to low fuel consumption of automobiles and aircraft enablesignificant savings in terms of energy consumption. Other than these, glass
fibers are used in the field to address environmental issues such as blades forwind power generation or dust-collecting filters at factories and incineration
plants. Furthermore, we are, of course, striving to reduce CO2 emissions in the
manufacturing process. A new technology was introduced to glass melting
furnaces and we are implementing improvement measures for energy savingsand energy efficiency.
SocialThe Nittobo Declaration states that the Nittobo Group aims to become the“Best Partner” of your community. We believe that a company is a member of acommunity and coexistence and co-prosperity with communities are critical forbusiness continuity.
From the perspectives of contribution to and coexistence with communities,
we regularly conduct cleaning activities around our factories and hold ascience class for children and students every year. The Company, which
is headquartered in Fukushima Prefecture, cohosts “Fukushima Marche”
with the prefecture to introduce Fukushima’s specialties including peaches
and Japanese sake at the Tokyo headquarters every year. I myself take thisopportunity to explain the status of recovery in Fukushima. When I make apresentation or talk business overseas, I make it a rule to talk about the statusof recovery. I also set up an opportunity for people in various countries todeepen their understanding of Fukushima.
Employees are also important stakeholders. It’s essential to combine thestrengths of employees who have diverse value systems to cope with changes
in the global management environment. I believe that “employees’ growth is thecompany’s growth.” We also consider that each one of our employees shouldseek personal growth through their work and the Company should provide
employees with an opportunity to display their skills, and that will eventuallylead to the maintenance and enhancement of the Company’s competitive edge.
We will enhance our systems and environment going forward, too.
Especially, it is critical to put in place an environment where employees
will be able to work long and play an active role while avoiding involuntary
retirement—and loss of talent for the Company—due to a life event. Overtime
work at the Company is relatively less than the average company. Goingforward, we will facilitate work styles that are not bound by one’s sex,
nationality, age, or disability. In particular, we feel that promotion of women’s
active role and their advancement are not sufficient. We will continue to workon it.

▶Please see pages 38-42 for more
information on corporate governance.

A Message to Our Valued
Stakeholders.

GovernanceThe basic policy of our business operations is constant enhancement ofgovernance. I consider that nothing is more important than creating an openorganization internally and externally, and an open and transparent corporate
culture in terms of corporate governance.
The Nittobo Group had been striving to enhance corporate governancebefore 2015, when the Corporate Governance Code was established. An
executive officer system was installed in June 2003 to accelerate decisionmaking in business execution. In June 2014, the Company made a transition
to a Company with Nomination Committee, etc. system, and we aim for further
reinforcement of the supervisory function, highly transparent management andprompt execution of business and enhancement of management agility.
Meanwhile, when it comes to corporate governance, just launching a format
is not enough. If it is not effective, it does not mean anything. Even after thetransition to a Company with Nomination Committee, etc. system, we have been
making various improvements with the aim of further reinforcing governance,that is, ensuring open and highly transparent organizational operations.
The majority of the members of the Nomination Committee, Remuneration
Committee, and Audit Committee are external directors, and the Committees
are chaired by external directors. Moreover, from the viewpoint of enhancing
management transparency, the system of advisors and special consultants wasabolished in February 2017.
FY2019 marks the third year of our four-year Mid-term Business Plan. We’ve
made great progress in achieving our “Long-term Vision 101” by executing ourstrategy to develop and strengthen value-added products. We will continue
striving to execute and realize the many promising initiatives we’ve begun.
In the second-half of FY2019, we’ll begin to see the fruits of our investments,
and this period will be a key driver in accomplishing our Mid-term Business
Plan targets. Looking beyond the current plan, we will accelerate initiatives toensure that we can generate ongoing benefits. In this way, the executives andemployees of Nittobo will strive together to achieve “Long-term Vision 101” andsustainably raise corporate value.
We appreciate your support and understanding.

9PART 1Mid- to Long-term Business Plan “Long-term Vision 101”and Mid-term Business Plan “Go for Next 100”
Nittobo will celebrate the 100th anniversary of its founding on April 1, 2023.
We aim to grow sustainably for another century. As a first step towards that goal, we drew up “Long-term Vision 101” as thecorporate vision to achieve by fiscal 2023, marking our 101st year of business. We also formulated “Go for Next 100” as ourfour-year Mid-Term Business Plan through fiscal 2020.
“Long-term Vision 101” embodies three basic policies for business management.
1）We will work to establish a culture of openness in the Nittobo Group both internally and externally.
2）We believe that R&D and technological innovation are essential for the development of Nittobo.
3）We will establish and constantly review corporate governance.

Value Creation

2. Overview of the Nittobo Group’s Mid-term Business Plan “Go for Next 100”
The plan covering the four years from fiscal 2017 through fiscal 2020 is an important first step in achieving “Long-term Vision101” by fiscal 2023. We are building a foundation to maintain current profitability while capturing future growth opportunities.

1

Theme
“Go for Next 100” ~ Challenges for change and creation ~ (FY2017~FY2020)

2

Action Plans
R&D: Pursue high value-added technologies forthe next generation and beyond
1. Establish a research and development
structure to promote mid- to long-term themes(New General R&D)
2. Establish market-in style development
structure

Sales Strategy: Accelerating the shift to highvalue-added products
1. Sales expansion of NE Glass, T Glass andmulti-structured fibers
2. Application of glass products for composite /industrial materials to various uses and share
expansion of oversea market
3. Acquisition of domestic top share in
immunology field and expansion of oversea
business
4. Strategic alliance and M&A

1. A Corporate Vision for the Nittobo GroupThe Nittobo Group believes that now is the time to lay the foundation for the next century of business. It is our duty to ourstakeholders to continue business in our homeland of Japan, while seeking sustainable growth on a global scale.
To that end, we have created the following corporate image to achieve by fiscal 2023 as the start of our next 100 years ofbusiness (in our 101st year).

Environmental Measures: Reduction ofenvironmental impact
Management Foundation: Establish a robust
management foundation
1. Capital efficiency (Leveraging idle real estate,compression of marketable securities)
2. HR education / Skill inheritance
3. Strengthen corporate governance

Production Systems: Reinforce the production
capacity for high value-added product, costcompetitiveness and productivity
1. NE Glass / T GlassHigh value-added glass fiber cloth
2. Reagent for in vitro diagnostics
3. Textile technology application to industrial
material fields
4. Leverage the artificial intelligence and theInternet of Things technology

Our Corporate Vision: “Long-term Vision 101”
A company that delivers innovation worldwide from our origins in Fukushima and Japan,
offering unique value-added business and products based on client expectations and technology

3Management Targets

Vision for Each Business

Mid-term Business Plan
“Go for Next 100”

“Long-term Vision 101”(billion yen)

FY16 results

FY20

FY23

Textile Division

Glass Fiber Division

Life Science Division

Net sales

83.3

100.0

150.0

Acceleration of high valueadded strategy and expansionof the application of textile
technology to industrial material
fields with proper businessvolume and profitability.

Stable provision of high valueadded products in the rapidlychanging environment toconsolidate our presence asmarket leader.

Growth as second pillar of the
Nittobo group by leveraging
the competence in in vitro
diagnostic reagents, specialty
chemical, and beverage fields.

Operating profit

11.1

12.0

15.0

EBITDA

15.3

20.0

—

Profit

7.5

8.0

10.0

ROE（％）

9.8%

8% or higher

10% or higher

4 years cumulative capital investment

16.4*

55.0*

—

*FY13-16*FY17-20

Adhesive windproof
material
Adhesive windproof material:
The texture is finished softly due to the special design
New sense windproof material

Press
Adhesive windproof
fabric10Favorite surface
fabricHighly functional
fabric4

Financial Strategy and Shareholder Return Policy

Nittobo prioritizes the allocation of capital generated by operating cash flow and asset utilization to capital
investments, primarily growth investments, while also seeking a balance between reducing net interestbearing debt and providing returns to shareholders.
Regarding the shareholder return policy, the Company has a basic stance of providing stable dividend
growth, while deciding dividend levels by taking into account the payout ratio. Additionally, the Company
considers dynamic and flexible returns to shareholders depending on financial conditions.
11PART 1

3. Progress in Mid-term Business Plan “Go for Next 100”1

2

Capital Investments and R&D Expenses•Capital investment plan of 55.0 billion yen over four-year Mid-term Business Plan
•As of end of FY2018, 50.0 billion yen had been earmarked

Business results

The first two years of the Mid-term Business Plan served as a period to strengthen the business foundation and prepare for the development of thehigh value-added products strategy. We promoted capital investments, human resources development, and research and development. We have
implemented various initiatives to meet our targets, and from the second half of fiscal 2019, we expect our investments to begin to bear fruit.

R&D expenses

Capital investment (receipt and approval base)•Increased production capacity for special glass, a critical component for high-speed communications,in preparation for the rollout of the 5G next-generation telecommunication network(new production facilities began operation from the first quarter of FY2019)•Ongoing review of additional production capacity increases in Taiwan and Fukushima from the autumn of 2020or later with the expectation of continued robust demand for special glass（billion yen）
25.0

•New factories constructed to increase capacity at production sites in Japan and the United States,with production to ramp up gradually from 2020
•To gain sales networks and know-how for regulatory clearance in the U.S.; acquired Kamiya Biomedical
Company•Expanding supply capacity of raw materials; acquired Capricorn Products•Strengthening R&D and raw materials development capabilities

Life
Science

Investment to Rimco

20.0（billion yen）
2.0

M&A

5.0

1.9

1.5
1.8

（％）
3.0

2.0
2.0

1.0

7.0

1.0
5

5.0
0

1.4
1.7

1.5

11.9

10.0

1.8
1.6

16.9

15.0

R&D expenses
R&D expenses as ratio of net sales

21.3

Glass
Fiber

Value Creation

2.0
0
FY16

FY17

FY18

FY19
（forecast）
General R&D
workforce

FY16

FY17

FY18

FY19
（forecast）

70 staff

80 staff

95 staff

106 staff

0Development and production of raw materials for in vitro diagnostic reagents using genetically modified silkworms

Frontier Institute acquisition R&D and production of monoclonal antibodies
Joint venture with Fujikura Kasei Co., Ltd. for R&D into raw materials for in vitro diagnostic reagents

FAN establishment

Operating profit

48.0

50.0
40.0
30.0

40.9

42.4

83.3
FY16 total

11.1

5.5

5.7

43.2

41.3

84.5

FY17 total

10.8

40.8

82.3
FY18 total

4.6

4.4

3.8

100.0

42.0

90.0

10.0

12.0

8.5

5.5

8.0
6.0
4.0

3.0

10.0
0

12.0

FY20 total

FY19 total

8.2

6.2

20.0

41.5

Operating profit (billion yen)

Net sales (billion yen)

Net sales

3

Major approved investments (for enhancing added value)
Glass
Fiber

•Expanding special glass production facilities in Japan and planning to start overseas production•Maximizing special glass production in Japan amid shift to overseas production for E Glass yarn (superfine)and glass cloth (ultra-thin)

Life
Science•Building a production, sales and regulatory clearance value chain globally by constructing new factories at
production sites in Japan and the United States and using M&As

FY2017FY17
FY17
Apr.-Sep. Oct.-Mar.

FY18
FY18
Apr.-Sep. Oct.-Mar.

FY19
FY19
Apr.-Sep. Oct.-Mar.
(forecast) (forecast)

FY20
FY20
Apr.-Sep. Oct.-Mar.
(Mid-term plan) (Mid-term plan)

0

Glass
Fiber

FY18 results

FY19 forecast

Net sales

83.3

84.5

82.3

90.0

100.0

Operating profit

11.1

10.8

8.2

8.5

12.0

EBITDA

15.3

15.0

12.2

13.9

20.0

Profit

7.5

10.3

8.0

6.2

8.0

ROE（％）

9.8%

12.5%

9.1%

—

8% or higher

FY20

Life
ScienceTochigi (Moka City)

Enhance special glass (Scheduled)
Fukushima (Fukushima City)/Taiwan (NAG*1)

Fukushima (Koriyama City)
Respond to fine countTaiwan (NAG)

New factory (1st stage) Dec. 2019(2nd stage) Dec. 2020

Fukushima (Koriyama City)

Fukushima (Koriyama City)

Acquired Kamiya (U.S.)★
★Acquired Rimco

New factory
U.S. (NTB-A*2)★Acquired Frontier Institute★Established FAN (JV with Fujikura Kasei)★Acquired Capricorn (U.S.)

Shareholder returns
FY16 results

FY17 results

FY18 results

FY19 forecast

Per share dividend

35 yen40 yen40 yen40 yenPayout ratio

18.6%

15.2%

19.4%

25.0%

Total return ratio

41.7%*

22.8%

19.5%

25.0%

*Repurchased own shares
12

NE Glass for use withcomposite material

FY2021

Taiwan (Baotek)（billion yen）

FY17 results

FY2020Acquire shares/Respond to ultra-thin

Mid-term Business Plan
“Go for Next 100”
FY16 results

FY2019Enhance special glass

2.0
FY16
FY16
Apr.-Sep. Oct.-Mar.

FY2018★Established “NI-Tech” satellite laboratory

R&D

Established “NI-CoLabo”
Fukushima (Koriyama City)*1 NITTOBO ASIA Glass Fiber Co., Ltd. *2 Nittobo America Inc.

13

PART 1

Value Creation

Value Creation Process
Corporate Philosophy
Social Issues &ChangeMain Inputs

Business Fields“Smart”societies

Manufacturing capital

Textile Division

11.9 billion yen
Intellectual capital
R&D expenses

1.5 billion yen

Glass Fiber Division

Human capital

Globalenvironmental
issuesWorkforce

2,414 employees

Total assets

151.0 billion yen
Equity ratio

59.4％
Aging society

Social capital
Consolidated subsidiaries

23 companies(as of June 30, 2019)

Food security

14

Outcomes
Healthy, comfortable lifestyles

Fashion andFunctionality
Odor- and bacteria-resistant interlinings

ComfortInnovative Fabric™

Smaller, ThinnerElectronic Devices•World-leading precision in spinning,weaving technology
・Ultrafine glass yarns, ultra-thin glass cloths•Development of specialized glass
compositions and manufacturing
technologies
・Proprietary glass fiber compositions which
contribute to high-speed communications
・Chopped strands for automobile partsand glass cloths for aircraft, both of which
contribute to weight reduction
・Modified cross-section fibers for highstrength, thin, low-warping applications
・High heat-insulating glass wool using
precision fiber technology

Financial capital

Health issues

Output•Development strengths in super-thininterlinings, functional interlinings,
and multilayer structured yarns
・Overwhelming market share for super-thininterlinings and functional interlinings inladies’ apparel industry
・Advanced multilayered yarns for stretch
materials

Capital investment

Data-drivensocialevolution

The Nittobo Group will, as a corporate group, enhance its significance by
striving to create healthy and comfortable lifestyles, and thereby continue tocontribute to the realization of prosperous communities.

Ultrafine glass yarns, ultra-thin glass cloths

・High-speed data communications
・Network infrastructure connecting
everything

Convenience

Special composition glass cloths

Lightweight, Energy-efficient
Chopped strands/
Glass cloths

Environment
Energy-efficient Housing
Housing insulation

Life Science Division•In vitro diagnostic reagents and antisera
・Integrated manufacturing system from raw materials tofinished products
・Achieving both high quality and stable supply•Specialty chemicals
・Proprietary, highly functional polymers•Soft drink beverages
・Consigned production of private brand beverages
using famous Kurobe water

Maximizing
Quality of Life

Safety andsecurity

In vitro diagnostic reagents
Raw materials for deodorants,
water treatment chemicals
Tea beverages,
sports drinks

Health15

PART 1

Value Creation

Glass fiber for FRPWorking behind the scenes,
to support lifestyles
and society.

Glass cloth for printed wiringboard (for base station)

Glass wool insulation

From everyday items to industrial infrastructure,

Auxiliary agents for ink-jet printing

Nittobo Dishcloth™

Nittobo Group’s products are all across town.
Helping to make life more comfortable.
Helping to make life safer.
Nittobo Group’s products are working every day,quietly supporting our lifestyles and society.
Glass cloth for membrane roofs■Textile Division ■Glass Fiber Division■Life Science DivisionInterlining

Roll screen material(VERRE SCREENTM)

In vitro diagnostic reagents(reagents, antisera)
Glass cloth for membrane roofs
Chopped strands for
smartphone body
Glass cloth for printed wiring board(for network server)

Glass cloth for printed
wiring board

Glass cloth for Aircraft reinforcement
interior and fuselage

Plastic bottle drinks
Glass cloth for printed
wiring boards
Glass fiber for tennis racket
Glass fiber for FRP / FRTP
Glass cloth for damping material

Glass cloth for road reinforcing material

Glass cloth for LNG tank reinforcement

Stretch materials for sportswear
Towels16

17

Feature
ArticlePART 2

Glass Fiber Creating New ValueBusiness Activities

In 1938, the Nittobo Group became the first company in Japan to industrially produce glass fiber. Since then, we have led theindustry with innovative products meeting the needs of each successive generation. In the 1960s, for example, glass fiber was
adopted by electronics manufacturers as a core material for insulating printed wiring boards. We have responded to emerging needs
by supplying the world with ever-more precise glass fibers in step with the miniaturization and increasing thinness of electronicparts. In recent years, we have independently developed special glass adopted for electronic components used in next-generation,
high-speed communications technologies.

Glass Fiber for 5G

Investment Domains

Fifth-generation telecommunications technology (5G) will
enable processing and transmission of large amounts ofdata without latency, along with the simultaneous connectionof a massive number of devices. Low dielectric glass which
reduces transmission loss is one of the technologies requiredfor printed wiring boards in electronic devices. These
technologies make it possible to transmit data at higher
speeds and frequencies. In addition, higher speeds andfunctionality of electronic devices generate more heat on the
precision wiring boards. As such, 5G requires new types ofglass which can minimize thermal expansion.

Under its “Vision 101,” the Nittobo Group’s vision for the Glass
Fiber division is to solidify its leadership in the glass textiles
industry by maintaining a stable supply of high value-added
products to customers amid dramatic change in the industry
environment. To achieve this vision, we are bolstering ourcapabilities in electronic materials field. Our initiatives include
building our special glass development capabilities andproduction capacity, advancing our superfine yarn spinningcapabilities, and expanding our glass cloth business at
Baotek Industrial Materials Ltd., a Taiwanese company that
we converted into a consolidated subsidiary.

Nittobo special glass uses unique glass fiber which cansupport 5G technological innovation.
NE Glass is made from glass fibers specially designed witha low dielectric and low dielectric dissipation factor which
prevent data transmission loss. NE Glass is used as highfrequency components in data center servers and mobile
phone base stations which require high-speed processing oflarge volumes of data.
Dielectric constant(1GHz)

Dielectric dissipation
factor (1GHz)

E Glass

6.8

0.0035

NE Glass

4.8

0.0015

T Glass, another type of special glass, features low thermal
expansion as well as high tensile elasticity. T Glass is used forsemiconductor package substrates installed in servers, which
require high stability and reliability, and in smartphones andother devices which are becoming increasingly compact andfunctional.

T Glass (low thermal expansion)
NE Glass (low dielectric constant, low dielectric dissipation factor)

E Glass thick count(general-purpose use)

E Glass
ultrafine tocount yarn

Fine count/
thin material

Nittobo Special Glass

Thick count/
thick material

Special Composition Nittobo’s strengths

General purpose composition
Priority investment in expansion of production capability and application
expansion of high value-added products (E Glass superfine to fine countyarn and T/NE Glass, etc.)

Major Investments
Demand for Nittobo special glass is rising amid theemergence of next-generation communications standard 5G,AI, automated driving and other new technologies. We areresponding by expanding production capacity at Fukushima
and Taiwan facilities.
• Enhance production capability of special glass (T/NE) yarn (toApr. 2018)18

Tensile elasticity
(GPa)

(1)

E Glass

5.6

75

Substrate forsemiconductor package
Motherboard(1) Surface layer circuit(2) Insulation layer (resin-impregnated glass cloth)(3) Inner layer circuit(4) Insulation layer (resin-impregnated glass cloth)(5) Inner layer circuit(6) Insulation layer (resin-impregnated glass cloth)(7) Surface layer circuit

(1)
(2)
(3)
(4)
(5)
(6)
(7)

(2)
(3)
(6)
(7)

T Glass

2.8

86These special glass products have become essential
components of mobile phone base stations and othercommunications infrastructure as well as highly functional
servers. Nittobo special glass is lauded worldwide forits performance and quality. As we enter a new era inAI, automated driving and other new technologies, theexpectations for Nittobo special glass will increase. We
will strive to maintain a stable supply of special glass tocontribute to the realization of innovative technologies.

Glass fiber yarn

One of the most important applications of glass cloth
is electric insulators required in heat-resistance anddimensional stability, as well as electric insulation.
Glass fiber is synthesized with epoxy resins, polyimide
resins and other materials to form printed wiring board
materials for various electronic devices (computers,
communications equipment, switching equipment, etc.).
Nittobo excels at glass cloth processing (spread out
processing technology), which raises the value of printed
wiring board products.

Thermal expansion
coefficient (×10-6/˚C)

Image of glass cloth application

1st half 2019)

Enhanceyarn
production
capacity•F urther increase T/NE yarn production
Domestic (Fukushima Factory): Establish new furnace(operation schedule: from 2nd half 2020)

Overseas (NITTOBO ASIA Glass Fiber Co., Ltd.): Construct
new furnace (operation schedule: from 2nd half 2021)•E nhance production capacity of fine count yarn
Overseas: NITTOBO ASIA Glass Fiber Co., Ltd. (operation
schedule: from 2nd half 2019)

Glass fiber cloth

Glass fiber for printed wiring boards• Enhance production capability of (T/NE) yarn (operation: from

Raise cloth•D omestic: Fukushima No.2 Factory/Looms, raise processing
production
capacity (operation: from 2nd half 2018)
capacity
Baotek Industrial Materials Ltd. (Taiwan) converted to consolidated
subsidiary (June 2019)19

Feature
ArticlePART 2“Nittobo of Immunology” Transforms Medical Care

Business Activities

Nittobo is helping people around the world to live a healthy life by providing high-quality in vitro
diagnostic reagents.

Nittobo Group’s Strengths
Nittobo possesses an integrated production system ranging
from raw materials to final products to stably provide a varietyof high quality in vitro diagnostic reagents.

Nittobo America Inc.
Nittobo America Inc. and Capricorn Products, LLC, which
Nittobo acquired in June 2019, produce high quality goat
antisera in facilities in the U.S. These antisera are supplied
to NITTOBO MEDICAL CO., LTD. and other manufacturers
worldwide as raw materials for in vitro diagnostic reagents for
immunological tests.
Kamiya Biomedical Company, LLC, a wholly owned
subsidiary of Nittobo America Inc., was established in 1983 in
the U.S. and manufactures and distributes in vitro diagnostic
reagents today. With its home base in the world’s largest
medical market, Kamiya Biomedical boasts sales networks
spanning the globe.

CRP measuring reagent kit
It is an immunological in vitro diagnostic reagent kit formeasuring levels of C-reactive protein (CRP) in blood. While
CRP exists in minute quantities in a healthy person’s blood,infectious disease, connective tissue disease, cardiovasculardisease, tumors and other inflammations cause the amount toincrease. CRP widely diffuses into blood and other body fluids
and has functions to remove pathological products caused
by inflammations from the body. The CRP measuring reagent
kits supplied by the Nittobo Group are immunological in vitro
diagnostic reagents utilizing latex particles. In December
2019, NITTOBO MEDICAL will launch a new reagent kit
namely N-Assay LA CRP-U Nittobo, which features further
improved high-sensitivity.

NITTOBO MEDICALNITTOBO MEDICAL CO., LTD. manufactures and supplies
in vitro diagnostic reagents including those made from goat
antisera. Its core strength lies in reagents for immunologicaltests, utilizing antigen-antibody reaction. Since its
establishment in 1986, NITTOBO MEDICAL has stably
supplied a variety of high quality in vitro diagnostic reagents,
and by today, it has gained a stature as known as “Nittobo of
Immunology” in Japan.

Medical business process

Production

Raw materials production

Production / sales

Antigens, antibodies, antisera

In vitro diagnostic reagents

Supplying products
to hospitals andcommercial
laboratories
worldwide- Polyclonal- Monoclonal
Antisera

In vitro diagnostic reagents

Group companies
Group companies•N ITTOBO MEDICAL
CO., LTD.

• Nittobo America Inc.

• FAN Co., Ltd.

• Capricorn Products, LLC•K amiya Biomedical
Company, LLC

NITTOBO MEDICAL• Frontier Institute Co., Ltd.
• Rimco Corporation

Other companies

Hospitals andcommercial laboratories(Domestic)
Hospitals andcommercial laboratories(Overseas)

What are in vitro diagnostic reagents?
In vitro diagnostic reagents are used for tests done on
samples such as blood and urine that have been taken fromthe body to diagnose illnesses at health checkups and visits
to doctors. These reagents are used to measure the levels of
20

Initiatives to Promote Nittobo’s Strengths

certain substances in the samples and are not used directlyon the human body. Results of these tests done in hospitals
and commercial laboratories are referred by doctors for
deciding on courses of treatment.

Products with Leading Domestic Market ShareTRACP-5b measuring reagent kit
It is an immunological diagnostic reagent kit for measuring
TRACP-5b in blood for therapeutic monitoring of osteoporosis.
Mostly derived by osteoclastic bone cells, TRACP-5b is used
as a bone resorption indicator in blood samples with little
physiological variation. The kit has been highly reputed since
the test results are not influenced by patients’ food intake
prior to osteoporosis examinations.

N-Assay LA IgG4 Nittobo
This is an immunological in vitro diagnostic reagent kit formeasuring levels of IgG4 in blood. IgG4-related diseases arethose of unknown etiology that cause swellings, tubercles
and hypertrophic lesions in various organs due to immune
deficiencies and high levels of IgG4 in blood. The diseases
as a whole are recognized as intractable diseases in Japan.
N-Assay LA IgG4 Nittobo is a highly precise in vitro
diagnostic reagent kit designed for tests run on an automatedanalyzer. It has largely increased the number of hospitals andlaboratories that are able to measure serum IgG4 in-house.

• Increase of the production capacity of in vitro diagnostic
reagents with the construction of a new factory for NITTOBOMEDICAL (First phase completion: fall 2019; second phasecompletion: fall 2020)• Increase of the production capacity of antisera with theconstruction of a new factory for Nittobo America Inc.
(completion: 2020 onwards)• Increase of the antiserum production capacity throughacquisition of Capricorn Products, LLC (June 2019)

Sales• Enhancement of the organizations to meet the domestic
market needs• Enhancement of the overseas sales organization• Enhancement of the overseas sales through acquisition of
Kamiya Biomedical Company, LLC

R&D• Enhancement of the product planning and development
organizations• Enhancement of the R&D of antigens and antibodies
through investment in Rimco Corporation and acquisition of
Frontier Institute Co., Ltd.
•E
 nhancement of the product development capabilities throughestablishment of FAN, a JV with Fujikura Kasei Co., Ltd.
• Enhancement of the advanced research activities throughestablishment of NI-Tech, a satellite laboratory

21

PART 2Business Activities

Consolidated Financial Highlights
Net sales

FY201882.3 billion yen(billion yen)

100.0

90.2

Equity ratio

Financial Data (consolidated)

FY2018

59.4%

(%)

FY14

60

86.2

83.3

84.5

80.0

(million yen, except where otherwise indicated)

82.3

59.4

58.9

FY15

FY16

FY17

FY18

Net sales

90,22386,19983,32484,52682,292

Operating profit

8,885

10,893

11,148

10,837

8,198

Ordinary profit

8,658

10,974

11,396

11,071

8,934

EBITDA

13,577

15,496

15,27815,001

12,279Profit attributable to owners of parent

4,588

5,598

7,479

10,253

7,984

Net assets

73,22875,45578,28187,54890,740Total assets

145,956

142,719

140,064

147,160

151,000

Net assets per share (yen)1,816.62

1,872.51

1,979.98

2,232.43

2,312.06

115.14140.50188.57263.97205.76Equity ratio (%)

49.6

52.3

55.3

58.9

59.4

Return on equity (%)

6.8

7.6

9.8

12.5

9.1

Cash and cash equivalents at fiscal year-end

15,481

17,466

17,42818,324

16,145

Number of employees

2,685

2,463

2,403

2,456

2,414

Per share dividend(interim dividend; yen)

25.00

30.00

35.00
(15.00)40.00(17.50)40.00(20.00)

Payout ratio (%)

21.7

21.4

18.6

15.2

19.4

55.3

60.0

52.3

50

49.6

40.0
20.0
0

FY14

FY15

FY16

FY17

FY18

Operating profit

9.0

FY14

FY15

FY16

FY17

10.9

11.1

10.8

FY20188.2 billion yen

8.2

6.0

Payout ratio

(%)

60
50

8.9

Per share dividend

(yen)

FY18

FY201840 yen/19.4%

Dividends/Payout ratio(billion yen)

12.0

40

30

21.7

21.4
18.6

40
30

30

25

40

40

20

19.4

35
15.2

10

20
3.0
10
0

FY14

FY15

FY16

FY17

FY18

EBITDAFY2018(billion yen)

15.5

16.0

15.3

15.0

13.6

12.2 billion yen
12.2

12.0

0

FY14

FY15

FY16

FY17

0

FY18

FY2018

Capital investment(receipt and inspection base)

11.9 billion yen(billion yen)

11.9

12.0
10.0
8.0

8.0

6.0

Basic earnings per share (yen)Note: On October 1, 2017, the Company conducted a five-for-one share common stock merger. The calculations presented above restate Net assets per
share, Basic earnings per share and Per share dividend under the assumption that the merger was conducted at the start of the fiscal year ended
March 31, 2015.

7.0
4.8

4.4

Segment sales

4.0
4.0

2.0

2.0
0

FY14

FY15

FY16

FY17

FY18

0

FY14

FY15

FY16

Other
1,466
FY17

Life Science
Business
13,692

FY18

R&D expenses/R&D ratio to net sales 1.5 billion yen/1.8%(billion yen)(billion yen)

Ratio to net sales
1.9

R&D expenses

2.0

18.3
2018年度FY201815.0

16.0

Textile Business
4,862
Glass
Fiber Yarn
Business
26,442

Sales by geographic region(million yen)

Other
(670)
Life Science
Business
2,644

Textile Business
(373)
Glass
Fiber Yarn
Business
3,937(million yen)

Europe1,737
North America
4,527

Other
61

Asia
20,617

Japan
55,347FY2018Net interest-bearing debt
20.0

Segment profit/loss(million yen)

8.888
billion
yen
億円

1.5

1.4
1.3

12.0

9.1

8.8

1.5

1.7

1.6

1.4

(%)

1.8

2.0

Total
82,292
million yen

Total
8,198
million yen

1.5

1.3

1.0

1.0

8.0
0.5

4.0

Total
82,292
million yen

Glass Fiberfor Industrial
Materials Business
21,785

Glass Fiber
Cloth Business
14,043

Glass Fiberfor Industrial
Materials Business
629

Glass Fiber
Cloth Business
2,031

Note: The “Other” segment comprises business not reported under the other segments, including services and industrial machinery-related business.

1.1
0

22

FY14

FY15

FY16

FY17

FY18

0

FY14

FY15

FY16

FY17

FY18

0

23

PART 2

Textile BusinessBusiness Description

Glass Fiber Division

In the textile business, Nittobo manufactures and sells auxiliary materials for clothing, raw yarns, andother products closely connected to our daily lifestyles. Our adhesive interlinings command a large
share in the high-end ladies’ apparel market, while our multilayer structured yarns are pushing theboundaries of stretch materials. Nittobo Dishcloth™ has been a consumer favorite for more than a half
century. In recent years, our Textiles and Glass Fiber Divisions have collaborated to create innovative
industrial materials leveraging adhesive and multilayer structured technologies.

Glass Fiber Yarn BusinessBusiness Description

Two important properties of glass are insulation and heat-resistance. Glass yarns processed into
cloth have become indispensable as an electrical insulating material for printed wiring boards. Nittobo
possesses proprietary technology to manufacture superfine yarns with world-class precision, alongwith special yarns with such functionality as low-dielectric and low thermal expansion properties.
Nittobo is preparing for robust growth in special glass demand by gradually launching new furnaces
from FY2019 to boost production capacity. Additionally, we are planning to invest approximately 10
billion yen to establish a glass melting furnace at the Fukushima Factory in 2020 and construct a glass
melting furnace plant in Taiwan the following year to boost special glass production capacity.
[Strengths] • Manufacturing technology for the world’s most precise yarns (4μm)•D evelopment and manufacturing of low-dielectric and low thermal expansion special glass

Interlinings are an auxiliary material for clothing used between the outer and inner materials to retain
and adjust clothing shape[Strengths] • Processing and adhesive technology to produce the world’s thinnest, lightest interlinings
 evelopment of products with deodorizing, antibacterial and other functions, along with•D
products reducing the environmental burden

Raw yarns“C·S·Y™” (core spun yarn) is a multilayer structured yarn in two or three layers combining staple fibers
and polyurethane to create innovative stretch fabrics. The applications are broad, from denim to suits,
socks and other clothing used for daily apparel along with bandages for medical and sports applications.
[Strength] • World-class technology in multilayer structured yarn covering
Adhesiveinterlinings

Apparelsections
using
interlinings

FabricOutermaterial

separated into

InterliningInnermaterial

Multilayer
structured
yarns

Glass fiber for composite materials
Rovings and chopped strands are used for reinforcement of a wide range of products, including
casings for smartphones, tablets, and notebook PCs, along with helmets, automotive parts, bathtubs,
plastics and other consumer products.
[Strength] • F lat fibers with an oval shape cross-section to control the warping and twisting of molded
products

Innovative
Fabric™
Materials used forboth inner materials
and interlining
Reduces weight,
simplifies sewing
processes

Main Products
Glass fiber
yarns

Nittobo Dishcloth™

Cotton with superior feel

The Glass Fiber Yarn Business manufactures and sells glass fiber yarn, as well as roving and chopped
strands used as base materials of composite materials.

Glass fiber yarn

Interlinings

Main Products

Business Activities

Stretchable
polyurethane fabricSocial and Environmental
Contributions

ChoppedstrandNittobo supplies environmentally conscious products
to contribute to sustainable societies.

Environmentally conscious
product catalogue“For Sustainability”

FY2018 Business Results

Operatingprofit or
loss

5,971

FY2018 Business Results

Sales declined mainly for high value-added products such as glass fiber yarns for electronic materials
and composite materials for chopped strands used in reinforced plastics, impacted by the production
adjustment of smartphones. In addition, large-scale facility repairs implemented in the first quarter
reduced the profit.

(million yen)

4,945

(million yen)
30,000

1,000

4,950

OperatingprofitNet sales(million yen)

5,568

5,000

Nittobo’s ultrafine yarns contribute to the development of thinner and more compact electronic devices
such as smartphones.

Business result highlights

Net sales

6,000

Social and Environmental
Contributions

Sales of interlinings were robust mainly for ladies’ apparel in the first half of the fiscal year, but
struggled in the second half, affected by unfavorable weather conditions and a warm winter. Profitability
improved from the penetration of price increases and production shift from China to Japan. In raw yarn
products, sales of C·S·Y™ yarns for casual clothing declined.

Business result highlights

Roving

4,862

25,00026,09326,806

26,75829,172

26,442

500

(500)

(483)

1,000
0

24

3,000

(133)

2,000

FY14

FY15

FY16

FY17

FY18

(1,000)

FY14

6,000

FY15

(366)

FY16

(452)

FY17

(373)
FY18

10,000

5,235

3,937
2,905

2,000

5,000
0

4,803

4,000

15,000

0

3,000

6,559

5,000

20,0004,000(million yen)
7,000

1,000
FY14

FY15

FY16

FY17

FY18

0

FY14

FY15

FY16

FY17

FY18

25

PART 2Business Activities

Glass Fiber Division

Glass Fiber Division

Glass Fiber Cloth Business

Glass Fiber for Industrial Materials Business

The glass fiber cloth business produces glass cloth used as electronic device components. Glass
cloth is widely used as an electric substrate material because of its superior electric insulation, heatresistance, and dimensional stability. Nittobo’s ultra-thin glass cloth provides superior thinness and fiber
distribution consistency, making it ideal for compact but highly functional electric devices. Our special
glass cloths are developed using unique compositions and feature low dielectric constant and low
dielectric dissipation factor required in broadband communications, as well as low thermal expansion.
These properties make the cloths vital components of data center equipment, mobile phone basestations, high frequency components, and semiconductor packages for servers and smartphones.
Nittobo is committed to bolstering its unique technologies even further to support the advent of 5G
next-generation telecommunications, AI, IoT and other new developments in the field of technology. We
will continue to make cutting-edge research and development advancements and boost our production
capacity both in Japan and abroad to optimize our development and production structures.

Main Products

Image of glass fiber cloth application(1)

Substrate forsemiconductor package
Motherboard

Glass fiber cloth

(1)

(2)
(3)
(6)
(7)

■Copper
foil■Resin■Glass
ﬁber
cloth

(2)
(3)
(4)
(5)
(6)
(7)

(1) Surface layer circuit(2) Insulation layer (resin-impregnated glass cloth)(3) Inner layer circuit(4) Insulation layer (resin-impregnated glass cloth)(5) Inner layer circuit(6) Insulation layer (resin-impregnated glass cloth)(7) Surface layer circuit

Business Description

In 1949, the Nittobo Group became the first Japanese company to manufacture glass wool. Today, we
remain a pioneer in the field with an extensive portfolio of proprietary technology. Glass wool is usedwidely as insulation material in residences and buildings, contributing to energy efficiency. Moreover,glass wool is an environmentally friendly product contributing to resource recycling, as the raw
materials include discarded bottles and glass windows.
 roprietary precision fiber technology for high insulating effect and energy-efficiency housing[Strengths] • P• Formaldehyde-free insulation for human-friendly housing

Glass fiber
Industrial-use glass fiber has a wide range of applications, from membranes for large-scale buildings to
damping materials for automobiles. Leveraging the lightness and fireproof properties of glass fiber, we
continue to develop new applications in the automobile and aircraft industries to serve the demand forenergy efficiency and lightweight materials.
[Strengths] • H
 igh-strength, weather-resistant membranes using superfine glass fiber• World-class broad-cut membranes

Chip
Semiconductor
package

Surface layer circuit
Insulation layer(resin-impregnated glass cloth)
Inner layer circuit
Insulation layer(resin-impregnated glass cloth)
Inner layer circuit
Insulation layer(resin-impregnated glass cloth)Surface layer circuit

The glass fiber for industrial materials business develops glass wool products and glass fiber products
for industrial applications.

Glass wool

Diagram of substrate cross-section
Substrate forMotherboard
semiconductor package(glass cloth used)(glass cloth used)

Business Description

Main Products

High-performance glass cloth
Low-dielectric glass
cloth (NE Glass)

The demand for low-dielectric components has risen due to the higher speeds andfrequencies of computers, mobile devices, and communications infrastructure.
Nittobo has developed original NE Glass yarn with low-dielectric constant and lowdielectric dissipation factor properties ideal for these applications.

Glass wool insulation

Social and Environmental
Contributions

Membrane structure building

Housing insulators with improved performance through precision fiber technology contribute to thecreation of energy-efficient societies.

Low thermal expansion T Glass yarn’s unique composition minimizes heat expansion while providing hightensile elasticity, ensuring superior dimensional stability and rigidity.
glass cloth (T Glass)

Ultra-thin glass cloth

Ultra-thin glass cloths are ideal solutions for modern electric devices with highdensity printed wiring board mountings in increasingly smaller, thinner andlighter designs. These cloths provide exceptional workability for micro-diameter
holing with lasers and drills, along with superior dimensional stability and surface
smoothness for layered boards.

Summer
WinterBlocking
sunlight

Solar power
generation

Glass cloth made from Nittobo special glass is used as a low-dielectric substrate for electriccomponents, helping to realize the next-generation telecommunication standard 5G.

FY2018 Business Results

Demand for special glass used as electronics materials for high speed data communications remained
strong. However, profitability worsened due to damage suffered by Nittobo Macau Glass Weaving Co.,
Ltd. during a typhoon in August 2017.

Business result highlights

Highly efficientwater heating

Understanding of
power volume

Highly-insulated
windows

Highly-insulated
outer skins

Electricity
storage system

FY2018 Business Results

Sales of glass cloth used as industrial and construction materials were stable during the year. Sales
and profit of glass wool for house heat insulation declined mainly due to large-scale investment for
facilities in the first quarter, as well as an increase in logistics, raw materials, and fuel costs.

Business result highlights
OperatingprofitNet sales(million yen)
4,000

17,792
13,75014,043

3,000

2,959

22,125

21,831

22,072

21,622

21,78520,000

2,784
2,130

2,000

10,000(million yen)
25,0003,252
14,228OperatingprofitNet sales(million yen)

15,000Highly efficient
air conditioning

Highly efficient lighting (LEDs, etc.)

Paramount Glass
Manufacturing’s
products used forhighly-insulated
outer skins ofhousesDiagram: Net-Zero Energy House (ZEH) proposed by Agency for Natural Resources and Energy, Ministry of Economy, Trade and Industry
ZEH promotes housing with both a comfortable interior environment and an annual net energy consumption of zero or less.

Social and Environmental
Contributions

18,865

ExhaustEnergyefficientventilation

Cool airFor more information on special glass, please see pages 18-19.

20,000Blinds2,031(million yen)
2,000

1,821

1,872

1,500

1,095

15,000
1,000

831

10,000
1,000

5,000

0

26

FY14

FY15

FY16

FY17

FY18

0

629
500

5,000

FY14

FY15

FY16

FY17

FY18

0

FY14

FY15

FY16

FY17

FY18

0

FY14

FY15

FY16

FY17

FY18

27

PART 2

Life Science BusinessBusiness Description

Research and Technological Development

Life science business manufactures and supplies in vitro diagnostic reagents and antisera, specialty
chemicals, and soft drinks.

In vitro diagnostic reagents
In Japan high value-added diagnostic reagents have been demanded due to its increasing aging
population and a shift from treatment to prevention to curb medical costs. In overseas markets demandfor in vitro diagnostic reagents has been increasing due to a growing demand for high value-added
medical care such as highly sensitive immunological tests and genetic tests in developed countries,
as well as increased opportunities for receiving medical examinations in emerging countries led byincreased household incomes and improved social insurance systems.
The Nittobo Group’s immunological in vitro diagnostic reagents and antisera, in which the Group’s
strength lies, are highly unique and competitive in markets around the world. The Nittobo Group willfurther enhance its sales to overseas markets where demand is expected to increase by boosting its
production capacity and accelerating its research and development activities. From 2019 onwards the
Nittobo Group will start its operation of a new factory integrating a production facility and a warehousein Koriyama, Fukushima Prefecture and will build a new factory at its production site in California, U.S.A.,
where antisera, a raw material of in vitro diagnostic reagents, are produced.
[Strengths] • An integrated production system from raw materials to finished products allows the
Nittobo Group to stably supply a variety of high quality products• The Nittobo Group has the top market share in Japan for a variety of items, such as inflammation
biomarkers and an osteoporosis biomarker, while distributing more than 100 types of diagnostic reagent kits

Specialty chemicals products
In the specialty chemicals products business, the Group engages in the development and sale of highly
unique functional polymers such as Poly-allylamine and the polyamine series. We research, develop,
manufacture, and sell highly unique products to customers with high entry barriers in a wide range ofindustry sectors, such as toiletries, papermaking, metals, electronic materials, and generic drugs.

Soft drinks
In the soft drinks business, we specialize in high-variety, small lot production to meet the needs of individual
brand owners through OEM production of private brands. We pursue differentiation from competitors andhave secured stable earnings by meticulously following recipes and rapidly switching between product types.
In vitro diagnostic reagents

Main Products

Inflammation biomarkers

Specialty chemicals products Soft drinks

Osteoporosis biomarker

Social and Environmental
Contributions

The Nittobo Group helps create healthy lifestyles for people around the world through the supply of
immunological in vitro diagnostic reagents and antisera.

FY2018 Business Results

Profit declined mainly due to the cost incurred for enhancement of research and development andsales function while focusing on sales of immunological in vitro diagnostic products such as antiseraand reagents. In the specialty chemicals products sector, high value-added products have been steadily
supplied both domestic and overseas market. In the beverage products sector, while focusing on productionof a variety of small lot products to meet the demand, raw materials and distribution costs increased.

Business result highlights
OperatingprofitNet sales

16,000(million yen)

15,766
12,386

12,447

12,992

13,692(million yen)
3,000

2,663

2,813

2,858

2,644

2,172

12,000
2,000
8,000
1,000
4,000

0

28

FY14

FY15

FY16

FY17

FY18

0

Business Activities

FY14

FY15

FY16

FY17

Since its establishment in 1928, the Nittobo Group has
actively pursued research and technological development
and provided the world with numerous highly original products
suited to the needs of the times. Under the motto “Let’s turn
anything into fibers,” Nittobo Group became the first company
in Japan to commercially produce glass fiber, glass wool,a staple fiber, and rock wool. This posture of engaging inresearch and technological development with a pioneering
spirit is carried on today in the textiles, glass fiber, and life
science business sectors, and we believe that it will continue
to be the driving force for increasing the Nittobo Group’s
competitive advantage and corporate value into the future.

R&D System
Customer needs are becoming increasingly diverse andsophisticated, and global competition has markedly intensified.
In view of these circumstances, the Nittobo Group has
integrated research and development organizations previously
affiliated with the business divisions and established theresearch and development Headquarters in order to createa research and development system capable of engaging
in forward-looking research and technological development
and creating high value-added, highly original products ina timely manner. While engaging in in-depth exploration of
long-term research and development themes grounded in thespecialized perspective of each business division and market
needs, we will also undertake research and development
focused on group-wide themes in pursuit of cross-businesssynergies.
To renew the Nittobo Group’s research environment andfacilities and further strengthen development capabilities,
we are constructing NI-CoLabo, a new research anddevelopment site in Koriyama City, Fukushima Prefecture.
This research and development center will integrate researchand technological development functions and house facilities
including an open laboratory to promote collaborative
research with government agencies, private companies, andeducational institutions, space for exhibitions and study tours,
and a training center for engineers. Scheduled for completionin April 2020, NI-CoLabo will become the core of the Group’s
research and technological development activities.

Fiber R&D Center (Fukushima City)

NI-CoLabo (Koriyama City—Architectural rendering)

Collaborative Research between Industry, Government, and Academia
From the perspective of open innovation, the Nittobo Group
actively engages in collaborative research with government
agencies, private companies, and educational institutions
with the aim of accelerating development and expanding ourbusiness domains.
In July 2018, we opened NI-Tech, a satellite laboratory
center within the Innovation Center of NanoMedicine in
Kawasaki City, Kanagawa Prefecture, as a new researchand development site to strengthen the life science business.
Preparing an optimal research environment for open
innovation in the Greater Tokyo area has enabled us topromptly capture rapidly changing medical information andaccelerate creation of medical diagnosis technologies suitablefor development on a global scale.

NI-Tech (Satellite laboratory within the Innovation Center of NanoMedicine
in Kawasaki City)

FY18

29

PART 3CSR Initiatives

Community beautification activities

The Nittobo Group aims to become a good corporate citizen and “Best Partner” of communities.

Responsibilities as a corporate citizen
The Nittobo Group is aware of its responsibilities as acorporate citizen and addresses CSR issues with the aim of“contributing to the realization of prosperous communities,” aprinciple embodied in the corporate philosophy.
As articulated in the Nittobo Declaration, which expresses
shared values fundamental to being a corporation trusted
by society, the Nittobo Group aspires to be a “Best Partner”

Environment

SocialGovernanceof communities, and we attach importance to sharing
satisfaction with all of our stakeholders (communities).
In keeping with these values, we will seriously addressenvironmental and social issues and ceaselessly strive toimprove governance in order to contribute to society bycreating value through our business activities, and achieveenhancement of corporate value and sustained growth.

•S olutions to environmental problems through businesses andproducts• Continuous efforts to reduce environmental impacts• Harmonious coexistence with local communities• Human resource utilization (promoting diversity and women’s
participation)• Constant review of governance in pursuit of fair and highly
transparent management• Rigorous compliance• Strengthening of risk management

Harmonious Coexistence with Communities
Each of the Nittobo Group’s business sites seeks harmony with society and engages in business activities with the aim of growing
and developing together with its host community.

Participation in the 69th Nationwide Tree Planting Festival in Fukushima 2018
On June 10, 2018, the Nittobo Group participated in tree planting at the 69th
Nationwide Tree Planting Festival in Minamisoma City, Fukushima 2018. In addition,
workers from the Fukushima Factory planted 100 Japanese black pines in March,ahead of the festival.
The Nationwide Tree Planting Festival, held each spring since 1950 as the main
event of the National Land Afforestation Campaign, is attended by the Emperorand Empress of Japan and numerous participants from all over the country.
Highlights of the event are the planting of saplings by the Emperor and Empress andcommemorative tree planting by participants. The festival was held in Fukushima
Prefecture, the birthplace of Nittobo, as a symbolic event to promote afforestation
with the participation of residents of Fukushima Prefecture and accelerate therecovery, reconstruction, and development of Fukushima. The Nittobo Groupendorsed the aim of the festival and provided sponsorship and participation.

30

Foundation for Value Creation

The Nittobo Group’s business sites engage in community
beautification activities. The Fukushima Factory participatesin a cleanup project for the Arakawa River, a clear river thatflows through Fukushima City. In addition, the Fukushima
No. 2 Factory engages in cleanup activities at a nearby river
together with local residents.
Arakawa River cleanup project inFukushima City

Volunteer river cleanup work in the
Sakura area

Bloodmobile (Fukuyama EnterpriseCenter)Fukushima Prefectural Governor’s
Certificate of Appreciation for
Organizations Cooperating in Public
Health Projects

Children’s science class (Fukushima
Factory)Children’s science class (Fukuyama
Enterprise Center)Blood drive activities
The Fukuyama Enterprise Center has cooperated in blood
drives for more than 40 years. A bloodmobile visits the Center
every year in the spring and autumn, and the executives andemployees donate blood. In 2015, Fukushima Prefecture
awarded the Center a governor’s Certificate of Appreciation
for Organizations Cooperating in Public Health Projects inrecognition of its blood drive activities over many years.

Support for education
The Fukushima Factory holds children’s science classes
every year to increase interest in science and the environment
among the children who will become tomorrow’s leaders.
The Fukuyama Enterprise Center has engaged in similar
initiative since FY2012. Other factories have hosted plant
tours for students and other visitors as well.

Fukushima reconstruction support
Every year since 2016, the Nittobo Group has held Fukushima
Marche, a fair to support the reconstruction of Fukushima
Prefecture, at the Tokyo Headquarters. At the fair, we publicize
initiatives for reconstruction of Fukushima Prefecture andfor food security and safety by displaying panels depicting
reconstruction and recovery in Fukushima Prefecture andselling local culinary specialties from the prefecture.

Support for regional vitalization and sports
The Nittobo Group serves as an official club partner ofFukushima United FC, a J.League soccer team that is
active around the country with the aim of supporting thedevelopment and regional vitalization of Fukushima throughsports.

A parent-child soccer
class

31

PART 3

Discussion by employees with different perspectives andpersonalities can lead to success in meeting diverse customer
needs and delivering peace of mind and confidence.
Employees are the driving force that supports the Nittobo
Group’s sustained growth, and each member of our diverse

workforce is a valuable asset. Nittobo considers it importantto create an organization accepting of diversity in which eachindividual can fully demonstrate his or her capabilities. One
way of laying the foundation for such a diverse organization isto respect and promote diversity and inclusion.

Human Resource Development
Manufacturing involves various types of work, and a wide
variety of people including young talent and seasoned veterans,
men and women, Japanese and foreign nationals, re-employedworkers, mid-career hires, temporary workers, and other
employees of various generations with different experiences andvalues work at Nittobo. To maximize the performance of thesediverse human resources, and thus realize further businessand individual growth, we will meticulously engage in humanresource (HR) management focused on individuals, while
continuously enhancing our HR systems and training programs.

1) D evelopment of the next generation management leaders
In addition to conventional stratified training for young
employees, newly promoted managers, and other managers,
in FY2018 Nittobo launched its Successor Development
Programs. These programs are designed to match thegrowth stage of each employee, focusing mainly on young
employees and middle management, in order to develop
future leaders. These programs consist of intensive training
for business skills and action learning using practical cases
we need to resolve. Through the training, these programs
develop understanding on the role of senior managers andimprove managerial qualifications.
In today’s unprecedented business environment,
developing business persons who can overcome
preconditions is an indispensable activity. We believe it leads
to an essential pillar for business strategies. Nittobo will
systematically develop the leaders who drive our businesses.

2) Development of global talent
To prepare for further globalization, it is essential that
Nittobo create a corporate culture that enables diverse
human resources to actively participate in our businesses,
and develop human resources that can demonstrate theircapabilities in that environment. We have prepared wideranging opportunities for employees to improve their foreign
language skills and programs that allow employees to actuallyexperience work or research overseas and are enhancing
mechanisms that support the voluntary efforts of individuals
to become who they want to be.
32

Offsite Training
CourseContent

Overseas language
study course

Overseas study mainly for the development offoreign language skills

Study at businessschools

MBA acquisition at a business school inEurope or the U.S.

Overseas research
institute assignment
courseR&D in a global environment

Overseas company
internship course

Practical experience in a global environment

Graduate school forworking people course

CourseContent

TOEIC test

Conducted in-house(at company expense)

Online English
conversation lessons

Opportunities for English conversation practice(at company expense)

Foreign trade practicecourseExport-related skills acquisition(at company expense)

Overseas company
internship course

TOEIC, business English conversation, etc.
(fixed-amount company contribution)

Genba (production frontline) leader training

Future Leaders
Development: PrimaryT-grade employee training
SG-grade employee training

Leader development external
training with other companies

Young employee training(1st to 3rd year of employment)
3) Development of
Newcomer training for new graduates
professional talent

Manufacturing Meister program

Management pre-promotion training

Specialized skills development

1) Future leaders successor
development program

Common practical skills development

Future Leaders
Development: Intermediate2) Development of global talentManagers

Appraiser/labor management training
Newly promoted manager training

Work Style Reform and Health Management
Promotion of work-life balance

Work after the age of 60

Average monthly overtime per employee at Nittobo in FY2018
was approximately nine hours, about half the manufacturingindustry average. To enable employees to experience job
satisfaction and demonstrate their best performance while
simultaneously maintaining an appropriate work-life balance,
we will continue to develop an environment in which people
pursue long careers. Also, in Japan, which has a declining
birthrate and aging population, it is important to prepare aworker-friendly environment for employees with childcare
or nursing care responsibilities. We are striving to enhance
programs that enable a flexible response to such individuallife events, expanding flex work and introducing an annual
paid leave by the hour system and a staggered working
hours system.

A declining working population is a major social issue inJapan, which has a declining birthrate and aging population,and competition to secure human resources is likely to
become increasingly intense. For this reason, we will enhance
programs and mechanisms that motivate employees topursue long careers at Nittobo. We are focusing particularly
on enhancing HR programs and benefits and developing
a working environment to enable employees to continue towork after the age of 60 and will implement initiatives to makeNittobo a company that employees will be glad they chose
until the end of their careers.

Work-Life Balance Support ProgramsChildcare

Activities Support (Growth Support Program)

Future Leaders
Development: Advanced

Joining the company

MBA/MOT* acquisition while continuing work**MBA: M aster of Business Administration / MOT: Management of Technology

Promotion ofmanagement andleadership skills
growthSelf-development support (correspondence courses)

Diversity and Inclusion

Middle-rank employees

In the Nittobo Declaration, we state, “We are committed to becoming a corporate group in which the potential of our respective,
independent employees is valued and thereby inspires our employees to freely and willingly share their own ideas, ultimately
achieving greater results through teamwork.” To that end, we provide Group employees with opportunities for growth and selfrealization in the belief that employee growth equates to corporate growth and encourage our employees to be good citizens,first and foremost, and to think deeply, observe widely, act courageously, and follow through with their jobs. We will continuously
undertake enhancement of corporate value so that active employee participation builds stakeholder trust and makes all of our
stakeholders glad they chose Nittobo.

Outline of Training System Training by job rank Selective education Professional skills development

Before becoming managers, Nittobo employees pursue
development as specialized professionals in their areasof specialization and work to establish their core skills. We
introduced the Meister Program in FY2018 at manufacturing
sites and are systematically promoting skills transfer. For sales
representatives and diagnostics medical representatives(DMRs), who have frequent contact with customers, we
provide solutions-based training in solving problems
facing customers and link this training to improvement ofprofessional skills that enable these employees to enhancecustomer satisfaction. We also provide wide-ranging support
for individual skills development, offering a program to assist
employees in obtaining public qualifications necessary
for work and a distance learning assistance program that
includes e-learning.

Young employees

Active Roles of Diverse Talent3) Development of professional talentFoundation for Value Creation- Average re-employment wage of 80% of the wage at retirement

Nursing care

Hourly paid leave

Hourly paid leave

Childcare leave
Shorter working hours during
pregnancy, staggered
working hours

Nursing care leave

Pregnancy leave
Childbirth leave(employees and spouses)
Childcare leave
Flextime system
Shorter working hours systemfor childcare
Nursing-care leave
Accumulated sick leave(employee/nursing of family
members)
Overtime and late-night work
exemption and limitation
Babysitter expense assistance

Programs for Employees Age 60 and Over-P
 ost-retirement re-employment(100% re-employment rate except for personal reasons)Flextime system
Shorter working hours
system for nursing care
Accumulated sick leave(employee/nursing of family
members)
Overtime exemption andlimitation
Late-night work exemption- Introduction of an optional corporate defined contribution
pension plan in addition to the defined benefit pension plan
- Promotion of capital investment for working environment
development

Health management
Health in mind and body is the cornerstone of employee job
satisfaction. In cooperation with the Nittobo Health Insurance
Association, we strive to promote employee health byproviding opportunities for physical and mental refreshment,such as free-of-charge use of a sports gym, health checkups
administered by post, and support for family enjoyment ofrecreation. We have also taken out comprehensive medical
expense insurance to alleviate the expense burden on
employees when injury or sickness occurs.

33

PART 3

Environmental Initiatives

Foundation for Value Creation

Environmental Management Organization

The Nittobo Group is aware of the importance of global environmental problems, and we have developed a code of conduct
specifying voluntary, proactive engagement in energy conservation, effective use of resources, pollution prevention, and otherenvironmental conservation activities for the purpose of creating and maintaining a better environment, a requirement for business
continuity. In accordance with this philosophy, we have established the Nittobo Environmental Charter and Company-WideEnvironmental Policy and are striving for continuous improvement of the environment. In addition, we will set environmental impact
reduction targets, a component of one of the five action plans in the mid-term business plan.

Nittobo Environmental Charter

In addition, in order to share company-wide information
and raise each other’s awareness level, environmental
managers who are responsible for promoting environmental
management at each Office Environment Conservation
Committee and Committee members in charge of technology
and production have organized the Group Environment
Conservation Committee to engage in Group-wide
environmental protection activities.

The Nittobo Group has established the Central Environment
Conservation Committee (whose chairperson is elected fromamong the board members).
The Committee, which consists of members elected frombusiness and administrative units as well as members incharge of technology and production, who are elected frombusiness units, discusses important environment-related
activities and matters as the Group’s central supervisory anddeliberative organ related to environmental protection.

■Central Environment Conservation Committee Organization
Central Environment
Conservation Committee(Chairperson: officer in charge)

Guiding Principle
In all our corporate activities and business development efforts, we, the Nittobo Group, will contribute to handing down theirreplaceable global environment to the next generation and ensuring sustainable development by providing environmentallyconscious products and services and taking the needs of the environment into consideration in our activities.

Action Guidelines
1. Environmental protection

Aim at improving the environment continuously and coexisting with the local community by
striving to reduce environmental impacts in a systematic way.

2. E
 nvironmentally conscious
corporate activities

Promote energy-saving, resource-saving, recycle-oriented, and environmentally conscious
operations in all business domains in Japan and abroad.

Group Environment
Conservation Committee

Office Environment
Conservation
Committees

Nitto Boseki Co., Ltd.

Subsidiaries in Japan

Overseas subsidiaries

3. C ompliance with environmental
Conform to laws and regulations in addition to other requirements and principles as wellpolicy and voluntary management as stipulate voluntary environmental policy and management standards and work towardachieving them.
4. Periodic audits

Conduct periodic environmental audits to verify the appropriateness of management standards
and improve environmental and safety management to raise such standards.

Environmental Impacts of the Nittobo Group5. Training and education

Provide all employees with thorough environmental and safety training and raise theirenvironmental and safety awareness levels mainly by making environmental and safety
policies known to them, and strive to hand down the global environment to posterity.

The Nittobo Group manufactures a wide range of products
by using natural resources and chemical substances as raw
materials and consuming fuel and electric energy.
Major environmental impacts include carbon dioxide
generated as a result of energy consumption, chemical
substances that are discharged to the environment without

Established on October 1, 1998
Revised on July 1, 2005

Company-Wide Environmental Policy

tr u cor i e ti o n
nt e
d

e
wi
ul
ati th law
s
on
s

nc
plia eg
m
o
C
dr
an

INPUT

We comply with environment
related laws and regulations andregional agreements to realize
zero environmental risk.

*1 Energy input: Amount of energy obtained by converting
fuel used at factories and other sites for manufacturing andelectricity purchased into crude oil.
*2 Amount of recycled goods received: Amount of recycledresources received by Nittobo’s factories and other sites fromother companies as raw materials.
*3 Energy-derived CO2 emissions: Amount of carbon dioxide
emitted by consuming energy at factories and other sites for
manufacturing.
*4 A mount of industrial waste disposed of: Portion of industrial
waste generated at factories and other sites, which is not
used effectively and is simply incinerated, sent to landfill
sites, or otherwise disposed of.
*5 A mount recycled: Portion of industrial waste generated atfactories and other sites, which is effectively used or recycled
for reuse.
*6 A mount of PRTR substances discharged to the environment:
Amount of substances discharged to air and water byfactories and other sites, which are subject to the stipulationsin the PRTR Act. (Act on Confirmation, Etc. of Release
Amounts of Specific Chemical Substances in the Environment
and Promotion of Improvements to the Management Thereof)OUTPUT

Energy input*1

159 thousand kiloliters

Manufacturing
and processing

Input of main raw
materials

Energy derived CO2
emissions*3

160 thousand tons

Results for FY2018 (updated in July 2019)
Domestic business sites: Data collected from April 2018 toMarch 2019
Overseas business sites: Data collected from January to
December 2018

ngy cliec
a r ie t y
c
so

34

o
g
rin h alt
Secu
hea ommlc
loca

Ensure appropriate managementof hazardous substances andstrive to reduce their discharge
to the environment.

fpend ople’s
un safitie es

C o ns

We aim to achieve zero emission
through emission control andpositive use of recycled raw
materials.

of

of
u re
fut
al
b
o
l
g
t o th e
nd e n t
nm
e
th

Con
t
h u m ri b u t
a nk
i on
in
en d av iro

We strive to control carbon
dioxide emissions bystreamlining energy use.

Range of Data Collection
The Nittobo Group conducts an environmental
protection survey for its consolidated subsidiaries
once a year.
The material balance shown in the figure on theright has been obtained by collecting data from
Nittobo and its consolidated subsidiaries in Japanand abroad on environmental impacts (Data on
certain items are not collected from some overseas
business sites).

being collected, and industrial waste that is simply incinerated
or sent to external landfill sites. The Nittobo Group is striving
to reduce environmental impacts by using resources in areasonable way while taking the needs of the environment
into consideration.

297 thousand tonsRawmaterials

Amount ofrecycled goods
received*2

46 thousand tons

Nittobo Group

Recycled
goodsamountreceived

Amount of Industrial
waste disposed*4 of

12 thousand tons

RecyclingAmount of water
intake8.72 million m

3

Products

Amount of PRTR
substances discharged
to the environment*6

31 tons
Amountrecycled*5

29 thousand tons

Amount of water
discharged

5.62 million m

3

35

PART 3

Status of Environmental Impact Reduction in the Nittobo GroupThe Nittobo Group uses large amounts of energy in glass
melting furnaces, used mainly to manufacture glass fiber, andemits carbon dioxide (CO2). For this reason, the Group has
reduced CO2 emissions by converting glass melting furnacefuel from heavy oil to utility gas and by installing oxygen
combustion systems at Group factories.
Since the installation of oxygen combustion systems inparticular enables CO2 emissions reduction by improving
the combustion efficiency of melting furnaces and otherequipment and also enables substantial elimination ofAmount of Scope 3 emissions by the Nittobo Group

nitrogen oxides (NOx), it has led to reduced emissions of air
pollutants. The status of environmental load in FY2018 is asshown below. The Group was able to reduce CO2 emissions
per sales unit by 12.2% compared to the FY2013 level. We
have reduced the total amount of air pollutant emissions by
67.0% from the FY2013 level, thanks in part to the installationof oxygen combustion systems.
We also achieved improvement year on year in therecycling rate. The Group will continue to work in unison to
reduce environmental impacts.

In fiscal year 2017, the Nittobo Group started to calculate the amount of greenhouse gas emitted (Scope 3) in its value chain. The
results for fiscal year 2018 are as follows:

CO2 emissions

12.2% reduction■Energy-derived CO2 (1,000t-CO2)■Scope 2 ■Scope 1
400

Per unit of consolidated net sales
4.10
3.92
3.65
353
349
315

■Chronological changes in the amountof air pollutant emissions

per unit of sales(vs FY13)■NOx (t/yr)

3.82

3.69

(12.2%)

4.0

1,000

318

312

3.60
297
3.0

800

151

143

300

■SOx (t/yr)

Air pollutant emissions

67.0% reduction
in total amount(vs FY13)■Dust (t/yr)

200

2.0

0

161

FY13

FY14

FY15

FY16

154

FY17

■Chronological changes in the amountof industrial waste disposal and therecycling rate

1.0

FY18

0

852

854

43
95
FY13

52
44
FY14

71.2%

(FY18)
100

150

2,881

71.4

73.9

68.9

10,00071.2

75

12,127

0

FY13

9,536

13,904
11,145FY15

FY16■Chronological changes in the amountof withdrawal water
Per unit of consolidated net sales
12.0

103.7

10.0

(5.9%)(26.8%)

75.9

100

75

8.0
6.0

8.83

8.56

7.93

2,768

74

6.54

6.25

0

FY13

FY14

FY15

FY16

■Chronological changes in the amountsof water pollutants and drainage

0

36

2.38

2.38

2.34

2.38

2.47

FY13

FY14

FY15

FY16

FY17

FY18

25,116

Calculated by multiplying the amount of capital goods (buildings, structures, machinery,and equipment) by the CO2 unit value stipulated in the guidelines

Category 5

Waste

456

Calculated by multiplying the amount of each type of waste by the CO2 unit value
stipulated in the guidelines

Category 6

Business trips

313

Calculated by multiplying the number of employees by the CO2 unit value stipulated in theguidelines

Category 7

Commuting to/from work

221

Calculated by multiplying the amount of transportation expenses by the CO2 unit value
stipulated in the guidelines

Category 9

Transport and delivery(downstream)

3,785

Amount of CO2 emitted as included in the periodic reports of specified shippers under the
Energy Conservation Act*The amount of CO2 emitted in each category was calculated with reference to the Ministry of the Environment’s Green Value Chain Platform and other guidelines.
Reference materials: - Basic Guidelines on Accounting for Greenhouse Gas Emissions throughout the Supply Chain (Ver.2.2), Ministry of the Environment- Database of Emissions Intensity for Accounting of Greenhouse Gas Emissions from Organizations throughout the Supply Chain (Ver.2.4), Ministry of the Environment

Since 1999, the Nittobo Group has been conducting periodic
environmental audits for its business sites as stipulated in
the Action Guidelines for the Nittobo Environmental Charter.
Environmental audits are intended to evaluate each businesssite’s environmental management system objectively todetermine whether it is working properly by checking
compliance status with the Group’s environmental policy andrelevant environmental laws and regulations.
Environmental protection issues to be addressed by eachbusiness site vary from one site to another because businesssites manufacture different products, but each businesssite’s environmental protection activities are audited from two

aspects: environmental management audits and compliance
audits (A total of 35 environmental laws and regulations inJapan are classified into six categories when these activities
are evaluated).
If problems are identified during audits, business sites are
required to submit improvement plans so that the problems
are positioned as issues to be addressed in the future and theplans are used effectively in further environmental protection
activities. Environmental audits are viewed as an effective tool
for promoting and improving voluntary management, and the
Nittobo Group will continue environmental audits on a Groupwide basis in the years to come.

An environmental audit

An environmental audit

3,000
2,500

1,500

250
200

1,000

31

5.31

5.63

0

FY18

Water pollutants

33.2% reduction
in total amount(vs FY13)

Drainage volume (1,000,000 m3/yr)
5.77

5.93

5.31

5.62

199t

6.0
4.8

■ISO 14001 certified business site(33.2%)
116

114

113

100

0

FY17

■SS (t/yr) ■BOD (t/yr) ■COD (t/yr)

50

25
2.27

Capital goods

500

133t
102

4.0
2.0

2,712

30

150
7.33

83
65

per unit of sales(vs FY13)

77.4

85.0

0

26.8% reduction

95.2

94.9

Category 2

60

Water intake■Withdrawal water (1,000,000 m )■Withdrawal water by Nitto Beverage Co., Ltd. (1,000,000 m3)
3

3,003
2,834

50

11,841

FY18

21
38

in total amount(vs FY13)

42

FY17

121,975

2,000

25

FY14

FY18

FY16

120
90

8,846

268

14
44
FY17

2,975

128

5,000

255

18
34

PRTR substances handled (t/yr)

15,00075.5

313■PRTR substances emitted (t/yr)

Recycling rate (%)

75.6

19
60
FY15

■Chronological changes in the amounts of
PRTR substance emissions
PRTR substances emitted and handled
5.9% reduction

Recycling rate

■Disposal of industrial waste (t)

327t
329

200
0

Category 1

Calculated by multiplying the purchase prices of the top 70% of products and services
purchased by business sites by the CO2 unit value stipulated in the guidelines

Environmental Audits

400
100

Calculation method

Products and services
purchased

990t(67.0%)
600

Amount of CO2
emitted (t-CO2)

Category

Chronological Changes in Key Environmental Parameters of the Nittobo Group■Chronological changes in the amountof energy-derived CO2 emissions

Foundation for Value Creation

50
0

35

31

29

28

94

77

19

23

48

45

41

38

35

33

FY13

FY14

FY15

FY16

FY17

FY18

3.6
2.4
1.2
0

Company/Business site

Certification dateCompany/Business site

Certification date

Nittobo/Fukushima Factory,
Fukushima No.2 Factory

January 27, 2001

Paramount Glass Manufacturing Co., Ltd./
Naganuma Factory

March 27, 2001

Fuji Fiber Glass Co., Ltd.

February 16, 2003

Paramount Glass Manufacturing Co., Ltd./
Suzuka Factory

March 3, 2010

Nitto Glasstex Co., Ltd.

January 17, 2003

Paramount Glass Manufacturing Co., Ltd./
Ebetsu Factory

March 31, 2003

37

PART 3

Corporate Governance System■ Board of Directors
The Company’s basic policy is to constitute the Boardof Directors with directors from within the Company
with capabilities and knowledge on each business andmanagement in general, and at least the same numberof external directors as internal directors, who are able
to express opinions beneficial for the enhancement ofgovernance from the perspectives of diverse stakeholders
and society, in order to ensure a system enabling appropriate
supervision of the Company’s business execution by the
Board of Directors as a whole, and has specified that theBoard of Directors shall have no more than 12 members in its
Articles of Incorporation.
At the time of publication of this report, the Company’s
Board of Directors was made up of six members including
three external directors.
The Board of Directors is responsible for supervision ofbusiness execution through selection of directors making
up the Nomination, Remuneration and Audit Committees,election and dismissal of executive officers and delegation ofbusiness to executive officers, approval of matters related tooperations that have an impact on basic management policy
such as mid-term business plans and annual budgets, andapproval of matters that could have a significant impact onGroup management such as investments exceeding a certain
amount. The term of office of directors is one year, and a voteof confidence in directors is obtained in the Ordinary General
Meeting of Shareholders held annually. The Company’s
executive officers are determined by the Board of Directors.
People suitable for the execution of the Company’s businessare elected from the perspective of enhancement of businessexecution and corporate value by adopting the approach of
putting the right people in the right place.

■ Nomination, Remuneration and Audit Committees
As a company with Nomination Committee, etc., the Company
has established a Nomination Committee, a Remuneration
Committee and an Audit Committee. The roles of thecommittees and overviews of the members of the committees
as of the submission date are as follows.
[Nomination Committee] The Nomination Committee
determines the content of proposals to elect and dismiss
directors to be submitted to the General Meeting of
Shareholders. It is made up of four directors (three of whomare external directors), and is chaired by External Director
Kunihisa Hama. Meetings of the Nomination Committee areheld as needed. The Nomination Committee selects theCompany’s director candidates who are believed to be the38most suitable based on factors such as their character andinsight.
[Remuneration Committee] The Remuneration Committee
determines the content of individual remuneration, etc. of
directors and executive officers. It is made up of four directors(three of whom are external directors), and is chaired byExternal Director Hiroshi Kamibayashi. Meetings of theRemuneration Committee are held as needed.
[Audit Committee] The Audit Committee’s responsibilities
include auditing the state of execution of duties of directors
and executive officers, and the preparation of audit reports.
Working with accounting auditors and the Audit Office,audits, etc. are conducted based on audit plans approved

General Meeting of Shareholders

Election and dismissal
Auditing corporation

Election and dismissal
Board of Directors

Accounting auditor
Nomination
Committee
Remuneration
Committee

Reporting andcoordination

Election, dismissaland supervision

the company further clarified the separation of supervisionfrom execution and has aims to strengthen supervisory
functions, ensure highly transparent management, executebusiness swiftly, and increase the flexibility of management.
Furthermore, by establishing a system that enables it tomore precisely meet the expectations of stakeholders, suchas customers, shareholders, suppliers, and employees, theCompany will work to further enhance its corporate value.

Diagram of Corporate Governance System

Election, dismissaland supervision

The Company introduced an executive officer system in June
2003 and has created a system able to maximize the effectof consolidated management by invigorating the Board of
Directors and speeding up decision making. Since June 2008,
management has been conducted by further clarifying thefunctions and roles of management and business execution.
In addition, with the approval of the Ordinary General Meetingof Shareholders on June 26, 2014, Nittobo shifted to acompany with a Nomination Committee, etc. By doing so,

to deliberate matters related to the execution of businessdelegated by the Board of Directors, and it endeavors toensure efficient business execution by holding meetings
twice a month.

Audit Committee
Reportingandcoordination

Overview of the Corporate Governance System and Reasons for Employing the System

As of the date of the publication of this report, the Company
had 10 executive officers, of which one has been selected as
Representative and Chief Executive Officer.
An Executive Meeting has been established as an organ

Supervision Functions

The Nittobo Group constantly revises corporate governance with the aim of creating a fair and highly transparent management
organization in order to conduct business activities with emphasis on social trust from the Nittobo Group’s shareholders, investors
and other stakeholders.

■ Execution of Business

Audit Committee
Secretariat

Reporting and coordination
Auditing

Execution Functions

Basic Approach Concerning Corporate Governancehas been established as an organization for assisting
the duties of the Audit Committee. In principle, the Audit
Committee holds meetings at least once every three months.

Audit Office

Representativeand Chief
Executive Officer
ReportingCorporate Governancein the Audit Committee. It is made up of four directors (threeof whom are external directors), and is chaired by External
Director Masamichi Ouchi. An Audit Committee Secretariat

Foundation for Value Creation

Risk Management
Committee

Executive Officer

Yarn andTextileDivision
Textilebusiness

Glass Fiber Division
Glass
fiber yarnbusiness

Glass fiber for
Glass
fiber cloth industrial materials
businessbusiness

MedicalDivision

Environment& Health
Division

GeneralR&D

Management
departments

Life science business39

PART 3Self-evaluation Concerning the Effectiveness of the Board of Directors■Percentage of Remuneration by Position
Composition of executive remuneration (if the level of achievement of company and individual targets is 100%)
Position■ Evaluation of the Effectiveness of the Board of Directors
The composition, operation, supervision, support structure,shareholder dialogue, etc. of the Company’s Board of
Directors are analyzed and evaluated by the Board of
Directors based on evaluations by each director by
implementing surveys using external attorneys.
In response to discussion about deeper discussion
about management strategy based on technical innovationand globalization, and enhancing feedback on the stateof dialogue with investors, in the self-evaluation of theeffectiveness of the Board of Directors during FY2017, thefollowing initiatives were adopted in FY2018.
-W ith regard to large capital investments and M&A projects
in Japan and abroad, in addition to discussion in multiple
advance report meetings to the Board of Directors andindividual explanations to external directors, the Company
conducted deeper discussion in the Board of Directors
and increased opportunities for discussion of management
strategy including global operation through explanations,etc. to members of the Board of Directors by external
experts such as consultants.

-W ith regard to dialogue with investors, the frequency ofreporting to the Board of Directors was changed fromsemiannually to quarterly, and the content of reporting
was also enhanced, in addition to commencing dialogue
between top management including the President anddecision makers at institutional investors.
In a survey covering FY2018, it was found that the operationof the Board of Directors was improved and that it functioned
effectively and efficiently. Meanwhile, the opinion was
expressed that further improvements need to be made tomatters such as the suitability of personnel for the Boardof Directors; the diversity and term of office of directors;
the activities of the Nomination, Remuneration and Audit
Committees; and communication with directors and executive
officers.
The Company will continue to make improvements toensure the Board of Directors performs effective supervisory
functions.

Executive remuneration■ Executive remuneration, etc.
(i) Matters pertaining to policy the determination of the amount of executive remuneration, etc. and the method of calculation thereof(a) Method of deciding policy
The Company determines policy related to the determination of individual remuneration of directors and executive officers on
the basis of objective data, etc. from external consultants in the Remuneration Committee made up of a majority of external
directors and chaired by an external director, based on the provisions of the Companies Act related to a Company with
Nomination Committee, etc.
Furthermore, the policy is based on the approach of providing strong motivation for officers to achieve their performancetargets while maintaining transparency and rationality, fostering awareness for medium- to long-term management, andconforming with the interests of stakeholders including shareholders and investors, and the performance targets used for
calculating remuneration also reflect this approach.
(b) Outline of the policy
The Company’s executive remuneration (excluding external directors) is made up of base remuneration determined by the stateof competency expected of each position (behavior evaluation) and the state of performance (performance evaluation), andperformance-linked remuneration that varies within a range of 0% to 150% according to the level of achievement of individual
performance targets based on company performance targets from the previous fiscal year and the activities and performanceof the responsible departments, and the current fiscal year’s remuneration is based on a combination of these.
Performance-linked remuneration has not been established for external directors due to the role of supervising managementfrom an independent and objective perspective.

Foundation for Value Creation

Performance-linked remuneration (note)

Base remuneration

Company performance portion

Individual performance portion

Representative andChief Executive Officer

67%

16.5%

16.5%

Senior Managing Executive Officer

69%

15.5%

15.5%

Other officers(excluding external directors)

71%

14.5%

14.5%

External directors

100%

–

–

(Note) P erformance-linked remuneration (company performance + individual performance) is set at 50% of base remuneration for the Representative and Chief Executive Officer, 45% of baseremuneration for the Senior Managing Executive Officer, and 40% of base remuneration for other officers (excluding external directors).

■Performance Targets and Percentage of Reflection in Performance-linked Remuneration
Company performance portion

Operating profit(compared to budget)

Operating profit(year on year)

ROE(year on year)

Dividends(year on year)

25%

25%

25%

25%

Individual performance portion

Operating income of division handled(compared to budget)

Status of initiatives to address issues in mid-term businessplan for division handled

40%

60%

■Process of Determining Remuneration
The Remuneration Committee chaired by an external director
checks the exhibition of competencies and the level ofachievement of company performance targets and individual
performance targets, and calculates and determines
individual amounts based on the aforementioned remuneration
percentages and percentages of reflection in performancelinked remuneration.

Performance-linked remuneration is determined by
combining the company performance portion and theindividual performance portion calculated as shown above.
The Remuneration Committee checks the suitabilityof the level of remuneration based on data on executive
remuneration periodically provided by external consultants.

<Calculation rules>(Base remuneration)
This is determined using a base remuneration table that is amatrix based on four levels of behavior evaluation and ninelevels of performance evaluation.
(Performance-linked remuneration)- Company performance portion = amount of baseremuneration for each prior fiscal year x percentage ofcompany performance portion for each position x levelof achievement of company performance portion for theprevious fiscal year
- Individual performance portion = amount of baseremuneration for each prior fiscal year x percentage ofindividual performance portion for each position x levelof achievement of individual performance portion for theprevious fiscal year

Targets and actual values of company performancetargets for the 157th fiscal year used in the calculation of
performance-linked remuneration in the 158th fiscal year

<Reference>[Operating profit (compared to budget)]Target: 11,500 million yen / Actual: 10,837 million yen[Operating profit (year on year)]Target: 11,149 million yen / Actual: 10,837 million yen[ROE (year on year)]Target:9.8% / Actual: 9.4%
[Dividends (year on year)]Target: 35 yen per share / Actual: 40 yen per share*Individual performance targets are set using individual quantitativeand qualitative targets, and calculated based on the results thereof.

(ii) Total amount of remuneration, etc. by type of officer, total amount by type of remuneration, etc., and number of officers
who are recipients thereof
Total amount by type of remuneration, etc. (million yen)Type of officer

Total amount of
remuneration, etc.
(million yen)Fixed remuneration

Performance-linked
remuneration

Retirement benefits

Number of officers who
are recipients

Directors(excluding external directors)

67

46

21

–

4

Executive officers

219

153

66

–

11

External directors

96

96

–

–

4

(Notes) 1. The numbers of recipients of payment shown in the table above include, where applicable, one director and executive officer who retired as of the conclusion of the 157th Ordinary
General Meeting of Shareholders held on June 27, 2018.
2. T he amount paid to executive officers does not include the wages paid for employment as an executive officer for those who also serve as employees.
3. T he Company’s performance-linked remuneration is calculated based on the previous fiscal year’s performance, and the amount combined with fixed remuneration (baseremuneration) is defined as remuneration for the current fiscal year, and this is paid as a regular equal wage.

40

41

Foundation for Value Creation

PART 3

Directors and Officers

Dialogue with Stakeholders
The Corporate Communication Officer is responsible forgeneral dialogue with shareholders, and the Corporate
Communication Division is the internal department
responsible for providing assistance thereto. The Company
endeavors to have opportunities for dialogue withshareholders that contribute to the sustained growth andenhancement of medium- to long-term corporate value of
the Company centered on executive officers. Furthermore,
departments involved in IR activities centered on the
Corporate Communication Division work to coordinate among
departments on a daily basis.
We will continue to endeavor to disclose information in atimely and appropriate manner to enable the Nittobo Group’s
customers, shareholders and investors to accurately recognize
and judge the actual state of the Nittobo Group. In order toachieve this, we comply with laws, regulations and securities
exchange rules on disclosure, and are engaged in thecreation and operation of an appropriate disclosure system.
(i)	We publish items specified for disclosure in Japaneseand foreign laws, regulations and securities exchange
rules in business reports, annual securities reports andcommunications to shareholders, and announce them insecurities exchange communication systems and press
releases.
(ii)	In principle, we publish information being disclosed on
the Nittobo Group’s website, and also endeavor to provide
fairer and broader disclosure.
(iii)	We conduct briefings for analysts and institutional
investors promptly after the announcement of annual andsemi-annual financial results.
Opinions and concerns, etc. about the Company that arelearned through dialogue with shareholders and investors
are collated by the Corporate Communication Department,
reported to the executive officer in charge of the Corporate
Communication Department, and appropriately provided
as feedback to management executives and the Board of
Directors by means of reporting to the Executive Meeting, etc.
as needed.
Adequate care is given to insider information in individual
inquiries and dialogue with the Nittobo Group, andexplanations are limited to information that has already been
published and facts that are well known.

(13)

(3)

(11)

(2)

(10)

(7)

(9)

(12)

(8)

(1)

(4)

(14)

(5)

(6)

Compliance System• System for ensuring that the execution of duties of theGroup’s officers and employees is in compliance with laws,
regulations and the articles of incorporation- The Representative and Chief Executive Officer sets
an example and ensures that the Group’s officers andemployees are aware of the Group’s Corporate Philosophy,
Nittobo Declaration which espouses shared values in order tobecome a company trusted by society, and Nittobo Behavior
Program and Code of Conduct, both of which provide a
set of action guidelines, and also endeavors to make themknown to all officers and employees in the Group.
- Executive officers and employees foster a healthy corporate
culture that forms the basis for compliance by spreading
and implementing the Nittobo Declaration.
- Executive officers and employees comply with laws,
regulations, the articles of incorporation and internal rules,
etc. based on the Nittobo Behavior Program and Code of
Conduct, and the departments responsible for compliancestrive to raise awareness of compliance to increase theireffectiveness.
- Violations of laws and regulations are prevented, quickly
discovered and appropriately addressed through a
Corporate Ethics Help Line, which is a whistleblowing

program with an internal whistleblowing contact and an
external contact connecting to a law firm.
- The officer in charge of the Risk Management Department
periodically reviews the state of establishment of the Nittobo
Group’s internal control system to ensure the current
conditions are consistent with the Group’s basic policy.
The results of the review are reported to the Representativeand Chief Executive Officer, who reports to the Board of
Directors, which passes resolutions if any revisions to thebasic policy are required.
- The Audit Committee reports the results of operational
audits and compliance audits, etc. to the Board of Directors
as appropriate.
• Other system for ensuring appropriate operations by the
Nittobo Group- The Nittobo Declaration, the Nittobo Behavior Program, theCode of Conduct and the Corporate Ethics Help Line apply
to the entire Nittobo Group, and efforts are made to raiseawareness of these.
- Auditing offices are established in major subsidiaries toensure appropriate operations, and the Company’s Audit
Office also conduct internal audits with a view to the entire
Nittobo Group.

Directors(1) Y uichi Tsuji(2) T oyoshi Nishizaka(3) Y u Nozaki

The Company has established the Nittobo Group’s basic
risk management policy and system in the Rules for Risk
Management as a corporate group including subsidiaries.
Based on the basic policy and system, the Risk Management
Committee chaired by the Representative and Chief Executive
Officer appropriately manages various risks surrounding
our business and prevents such risks from occurring.

42

Furthermore, the Company is also striving to strengthen
its legal risk management system by putting in place asystem that enables it to receive various kinds of guidanceas the occasion demands, such as opinions and advice
from corporate attorneys and specialized lawyers regarding
corporate management and daily operations.

(4) K unihisa Hama

External Director(5) H iroshi Kamibayashi External Director(6) M asamichi Ouchi

External Director

Executive Officers(1) Y uichi Tsuji*(7) K azuhisa Toda

 u Nozaki*(3) Y

Representative and Chief
Executive Officer
Senior Managing Executive
Officer

Responsible for the Glass Fiber Division and Medical Division, General
Manager of the Glass Fiber Division, General Manager of the Medical
Division, and General Manager of the Medical Division Product Planning andDevelopment Headquarters

Managing Executive Officer
Managing Executive Officer
Managing Executive Officer

Responsible for the Audit Office and the Risk Management Department

Deputy General Manager of the Glass Fiber Division(11) K azuyuki Utsugi

Executive Officer
Executive Officer(12) H iroyuki Tada

Executive Officer

Responsible for the Personnel Department, Corporate Planning Department,
General Affairs Department, 100-year Anniversary Project, Corporate
Communication Department, Accounting & Finance Department, Information
Systems Department, Procurement Department, Osaka Branch and Nagoya
Branch(13) H ideki Ishihara

Executive Officer

Deputy Head of Research Institute and General Manager of the Medical SC
New Technology Strategy Office(14) H ideyuki Hatanaka

Executive Officer

Deputy Head of Research Institute, Head of Research Planning management
Department, and Head of Fiber R&D Center(8) M inoru Takeuchi(9) S higeru Maeyama(10) K azuhiko Igarashi

Risk Management

Director
Director
Director*Also serves as Director

Head of the Research InstituteResponsible for the Fukuyama Enterprise Center, Redevelopment of the
Fukuyama Region, and General Manager of the Glass Fiber Division
Production and Technology Headquarters
Responsible for the Yarn and Textile Division and the Environment & Health
Division, General Manager of the Environment & Health Division(as of September 1, 2019)43

PART 4

Data Section

Consolidated Financial Statements
Nitto Boseki Co., Ltd. and Consolidated Subsidiaries

Consolidated Balance Sheet(Millions of yen)

As of March 31, 2018

(Millions of yen)

As of March 31, 2019

Assets

As of March 31, 2018
Liabilities

Current assets

Current liabilities

Cash and deposits

18,673

16,145

Notes and accounts payable - trade

9,331

9,415

Notes and accounts receivable - trade25,891

25,353

Short-term borrowings

4,887

7,708

Merchandise and finished goods

6,486

7,757

Current portion of long-term borrowings

5,387

5,290

Work in process

3,130

3,978

Lease obligations

569

449

Raw materials and supplies

15,502

16,850

Income taxes payable

2,389

532

Other

3,385

2,593

Provision for bonuses

1,159

1,110

(4)

(4)

Other

9,002

7,559

73,06572,674

Total current liabilities

32,72632,066Long-term loans borrowings

6,383

9,696

Allowance for doubtful accounts
Total current assets
Non-current assets

Non-current liabilities

Property, plant and equipment
Buildings and structures, net

12,332

12,246

Lease obligations

2,999

2,445

Machinery, equipment and vehicles, net

10,097

13,400

Provision for repairs

5,981

5,013

Land

14,74812,595Retirement benefit liability

10,3719,805

Leased assets, net

3,022

2,414

Other

1,150

1,232

Construction in progress

1,836

5,973

Total non-current liabilities

26,88628,193656

892

59,61260,25942,69347,523

1,510

1,680

Share capital

19,69919,699

Capital surplus

19,037

19,037

Other, net
Total property, plant and equipment
Intangible assets
Investments and other assets
Investment securities

Total liabilities
Net assets
Shareholders’ equity

25,69824,757285

287

Retained earnings

45,10551,440

Deferred tax assets

2,743

2,935

Treasury shares(2,538)(2,544)

Other

1,200

1,177

Total shareholders’ equity

81,304

87,633(36)(36)

29,89029,122

Valuation difference on available-for-sale securities

6,068

3,542

74,09578,326

Foreign currency translation adjustment

1,197

429

147,160

151,000

Remeasurements of defined benefit plans(1,941)(1,892)

Total accumulated other comprehensive income

5,324

2,079

919

1,027

87,54890,740147,160

151,000

Retirement benefit assets

Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

Accumulated other comprehensive income

Non-controlling interests
Total net assets
Total liabilities and net assets

44

As of March 31, 201945

PART 4

Consolidated Statement of Income(Millions of yen)

Consolidated Statement of Comprehensive Income

For the fiscal year ended
March 31, 2019

Net sales

84,52682,292

ProfitCost of sales

54,312

54,632Other comprehensive income

Gross profit

30,214

27,660

Selling, general and administrative expenses

19,376

Operating profit

10,837

8,017

Valuation difference on available-for-sale securities

690(2,512)

19,461

Foreign currency translation adjustment

261

(675)

8,198

Remeasurements of defined benefit plans, net of tax

278

49

–

(107)

1,231

(3,246)

11,5204,771

11,479

4,739

40

31

Interest income

26

63

Dividend income

631

578

Share of profit of entities accounted for using equity method–

77

Rental income82

88

Foreign exchange gains

–

292

290

354

1,031

1,454

Interest expenses

237

208

Foreign exchange losses

214–

Expenses related to inactive real estate for rent

75

322

Other

269

187

Total non-operating expenses

797

718

11,071

8,934

Gain on sales of non-current assets

4,262

1,895

Gain on sales of investment securities

529

883

4,792

2,779

Loss on disposal of non-current assets

239

451

Impairment loss

729

1,035

Loss on disaster

374

371

Other

36

25

1,379

1,883

Profit before income taxes

14,484

9,830

Income taxes - current

3,857

1,003

Income taxes - deferred

337

808

Total income taxes

4,195

1,812

Profit10,289

8,017

35

33

10,253

7,984

Total non-operating income

For the fiscal year ended
March 31, 201910,289Non-operating income

Other(Millions of yen)

For the fiscal year ended
March 31, 2018

For the fiscal year ended
March 31, 2018

Share of other comprehensive income of entities accounted forusing equity method
Total other comprehensive income
Comprehensive income

Data Section

Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive oncome attributable to non-controlling interests

Non-operating expenses

Ordinary profit
Extraordinary income

Total extraordinary income
Extraordinary losses

Total extraordinary losses

Profit attributable to non-controlling interests
Profit attributable to owners of parent

46

47

PART 4

Consolidated Statement of Changes in Net Assets

Consolidated Statement of Cash Flows

For the fiscal year ended March 31, 2018 (April 1, 2017 to March 31, 2018)
Shareholders’ equity
Share
capitalBalance at
beginning ofcurrent period
Changes of items
during period
Dividends ofsurplusProfit attributable to ownersof parent
Purchase oftreasury shares
Net changesof items otherthan shareholders’ equity
Total changes of
items during period
Balance at endof current period

19,699

Accumulated other comprehensive income

Valuation
RemeaTotal
Non-conForeignTotal
difference on
surements accumulat- trolling Total net
currency
Capital Retained Treasury shareavailable-forof defined ed other interests assets
translation
surplus earnings shares holders’salebenefit comprehenadjustment
equitysecurities
plans sive income
19,03736,313(1,757)(1,460)73,292

5,382

935(2,220)4,097(1,460)

10,253(780)

10,253

10,253

(780)

(780)

686

261

278

1,226

1,255

–

8,792

(780)

8,011

686

261

278

1,226

28

9,267

19,69919,037

45,105(2,538)81,304

6,068

1,197

(1,941)

5,324

919

87,548Sharecapital48

28–

Shareholders’ equity

Total changes of
items during period
Balance at endof current period

78,281(1,460)For the fiscal year ended March 31, 2019 (April 1, 2018 to March 31, 2019)

Balance at
beginning ofcurrent period
Changes of items
during period
Dividends ofsurplusProfit attributable to ownersof parent
Purchase oftreasury shares
Net changesof items otherthan shareholders’ equity

890

19,699(Millions of yen)

Accumulated other comprehensive income

Valuation
RemeaTotal
Non-conForeignTotal
difference on
surements accumulat- trolling Total net
currency
Capital Retained Treasury shareavailable-forof defined ed other interests assets
translation
surplus earnings shares holders’salebenefit comprehenadjustment
equitysecurities
plans sive income
19,037

45,105(2,538)81,304

6,068

1,197

(1,941)

5,324

919

87,548(Millions of yen)

For the fiscal year ended
March 31, 2018

(Millions of yen)

Data Section

For the fiscal year ended
March 31, 2019

Cash flows from operating activities
Profit before income taxes

14,4849,830

Depreciation

4,164

4,080

Impairment loss

729

1,035

Increase (decrease) in retirement benefit liability

(236)

(512)

Increase (decrease) in provision for repairs

543

(967)

Interest and dividend income

(658)

(642)

Interest expenses

237

208

Loss (gain) on sales and valuation of investment securities

(529)

(883)

Share of loss (profit) of entities accounted for using equity
method–(77)

Loss (gain) on sales and retirement of non-current assets(4,023)(1,443)

Decrease (increase) in notes and accounts receivable - trade(1,763)521

Decrease (increase) in inventories(3,742)(3,500)

Increase (decrease) in notes and accounts payable - trade

1,168

359

Other, net

114

(60)

Subtotal

10,488

7,948Interest and dividend income received

658

642

Interest expenses paid

(250)

(204)

Income taxes paid

(3,104)(3,068)Net cash provided by (used in) operating activities

7,791

5,317

Purchase of non-current assets(4,480)(12,634)

Proceeds from sales of non-current assets

6,379

3,770

(1)

(3,954)

1,305

2,064

–

(511)

Other, net

(677)

(122)

Net cash provided by (used in) investing activities

2,524(11,389)

(2)

2,926

Cash flows from financing activities

Purchase of investment securities
Proceeds from sales of investment securities
Purchase of shares of subsidiaries resulting in change in scopeof consolidation

Cash flows from financing activities
Net increase (decrease) in short-term loans payable(1,649)(1,649)7,984(1,649)

7,984
(6)

7,984

(6)

(6)

Proceeds from long-term loans payable

160

9,590

Repayments of long-term loans payable(6,804)(6,374)

Repayments of finance lease obligations

(568)

(529)

Purchase of treasury shares

(780)

(6)

(1,460)(1,649)(12)(9)(9,467)

3,948

47

(55)

Cash dividends paid
Other, net(2,526)(767)

49(3,245)108(3,136)

Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents

–

–

6,335

(6)

6,329

(2,526)(767)

49(3,245)

108

3,192

Net increase (decrease) in cash and cash equivalents

895(2,178)Cash and cash equivalents at beginning of period

17,42818,324

19,69919,03751,440(2,544)

87,633

3,542

429(1,892)

2,079

1,027

90,740Cash and cash equivalents at end of period

18,324

16,14549

Company Profile

Stock Information

Company Profile

Stock Status

Dates of establishment
February 1898 Koriyama Kenshi Boseki Co., Ltd. (Koriyama)
April 1918
Fukushima Seiren Seishi Co., Ltd. (Fukushima)
Nitto Boseki Co., Ltd.
April 1923
Head Office at: Aza Higashi 1, Gonome, Fukushima-shi,
Fukushima, 960-8161, Japan
Headquarters at: 2
 -4-1, Kojimachi, Chiyoda-ku, Tokyo,102-8489, Japan
Paid-in capital: 19.6 billion yen
Representative and Chief Executive Officer: Yuichi Tsuji
Employees: 2,414 (Consolidated) 820 (Parent company)(as of March 31, 2019)

Business Locations
Tokyo Headquarters
2-4-1, Kojimachi, Chiyoda-ku, Tokyo, 102-8489, Japan
Administration Division
Telephone: +81-3-4582-5111
Textile Division
Telephone: +81-3-4582-5160
Glass Fiber Division
Telephone: +81-3-4582-5170
Medical Division
Telephone: +81-3-4582-5450
Environment & Health Division
Telephone: +81-3-4582-5280

Osaka Branch
4-3-10, Kouraibashi, Chuo-ku, Osaka-shi, Osaka, 541-0043, Japan(Nissei Fushimicho Building New Building)
Telephone: +81-6-6208-5015

Nagoya Branch
2-14-21, Nishiki, Naka-ku, Nagoya-shi, Aichi, 460-0003, Japan(Maruyama Nissei Building)
Telephone: +81-52-231-5131

Fukushima Factory
1, Aza Higashi, Gonome, Fukushima-shi, Fukushima, 960-8581, Japan
Telephone: +81-24-546-3131
Fiber R&D Center
Telephone: +81-24-546-3138

Business Operations• Manufacture, processing, and sale of textile products• Manufacture, processing, and sale of glass fiber products• Manufacture, processing, and sale of chemical products
and pharmaceutical products• Manufacture and sale of refreshing beverages• Planning, supervision, and contracting for construction• Design, manufacture, and sale of machinery and equipment• Purchase, sale, lease, and management of real estate andfacilities

Consolidated Subsidiaries
TextilesGlass fiber Nitto Glass Fiber Manufacturing Co., Ltd.
yarn
Koriyama-shi, Fukushima Production of glass fiber products
Fuji Fiber Glass Co., Ltd.
Moka-shi, Tochigi Production of glass fiber products
NITTOBO ASIA Glass Fiber Co., Ltd.
Chiayi County, Taiwan Production and sale of glass fiber
products
Glass fiber Soyo Co., Ltd.
cloth
Chiyoda-ku, Tokyo Sale of glass fiber products, etc.
Shinwa Denzai Co., Ltd.
Chiyoda-ku, Tokyo Sale of glass fiber products, etc.
Nittobo Taiwan Co., Ltd.
Taipei, Taiwan Sale of glass fiber products
Nittobo Macau Glass Weaving Co., Ltd.
Macau Production of glass fiber products
Baotek Industrial Materials Ltd.
Taoyuan, Taiwan Production and sale of glass fiber products
Glass
fiber forindustrial
materials

Nitto Glasstex Co., Ltd.
Oizumi-machi, Oura-gun, Gunma Production of glass fiber
products
Paramount Glass Manufacturing Co., Ltd.
Sukagawa-shi, Fukushima Production and sale of glass wool
Nittobo FRP Laboratory Co., Ltd.
Koriyama-shi, Fukushima Production and sale of glass fiber
products, etc.

Lifescience

NITTOBO MEDICAL CO., LTD.
Chiyoda-ku, Tokyo Production and sale of in vitro diagnostic
reagents and specialty chemicals
Frontier Institute Co., Ltd.
Ishikari-shi, Hokkaido Development, manufacturing and salesof bioassay kits and consignment of antibody production
Nitto Beverage Co., Ltd.
Asahi-machi, Shimoniikawa-gun Toyama Production andsale of soft drink
Nittobo Ecology Co., Ltd.
Chiyoda-ku, Tokyo Various contracted services
Nittobo America Inc.
California and Iowa, U.S.A. Production and sale of antisera
Kamiya Biomedical Company, LLC
Washington, U.S.A. Production and sale of in vitro diagnostic
reagents
Capricorn Products, LLC
Maine, U.S.A. Production and sale of antisera for in vitro
diagnostic reagents

Fukushima No.2 Factory
20, Ipponsugi, Sakurashimo, Fukushima-shi, Fukushima, 960-2154, Japan
Telephone: +81-24-593-1231

Fukuyama Enterprise Center
1, Aza Shiojima, Fukuhara, Fukuyama-cho, Koriyama-shi, Fukushima,963-8061, Japan
Telephone: +81-24-932-6011
Medical R&D Center
Telephone: +81-24-932-6261

Tomari Enterprise Center
500, Hirayanagi, Asahi-machi, Shimoniikawa-gun, Toyama, 939-0744, Japan
Telephone: +81-765-82-1133

Niigata Enterprise Center
6-50, Toshincho, Higashi-ku, Niigata-shi, Niigata, 950-0065, Japan
Telephone: +81-25-273-7191

Itami Production Center
1-6-1, Kuwazu, Itami-shi, Hyogo, 664-8501, Japan
Telephone: +81-72-782-2621

Satellite Laboratory
Suite #3108, 3rd floor, Innovation Center of NanoMedicine 3-25-14,
Tonomachi, Kawasaki-ku, Kawasaki-shi, Kanagawa, 210-0821, Japan
Telephone: +81-44-266-8322
Ni-Tech (Medical SC Newtech Strategy Office)50

Nittobo Interlining Co., Ltd.
Chiyoda-ku, Tokyo Sale of interlining
Bunkyo Seiren Co., Ltd.
Fukui-shi, Fukui Processing of textile
Nittobo Niigata Co., Ltd.
Niigata-shi, Niigata Production and sale of core spun yarns, etc.

OthersAuthorized number of shares 120,000,000 shares

Distribution of Shareholders

Number of shares issued 39,935,512 shares(including treasury shares, 1,133,293 shares)

Treasury shares 2.84%

Number of shareholders 10,939
Major shareholders

As of March 31, 2019

Name

Number ofshares held
(in thousands)

Percentage ofshares held*(%)

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

2,772

7.14

Japan Trustee Services Bank, Ltd. (Trust account)

2,429

6.26

Sumitomo Real Estate Sales Co., Ltd.

2,383

6.14

Nippon Life Insurance Company

1,614

4.16

The Dai-ichi Mutual Life Insurance Company, Limited

1,316

3.39

UNIZO Holdings Company, Limited

1,113

2.87

Sumitomo Life Insurance Company

1,082

2.79

JP MORGAN CHASE BANK 385632

1,008

2.60

AIR WATER INC.

997

2.57

Central Glass Co., Ltd.

948

2.44

Securities companies
0.47%

Financial
institutions
39.52%

Individuals
and others
10.30%

Foreignshareholders
15.48%

Distribution of
Shareholders

Other domestic
corporations
31.39%* The percentage of shares held excludes treasury shares.

Stock-related Administration
Fiscal Year

April 1 to March 31

Ordinary General Meeting of
Shareholders

Late June

Record dateVoting rights for Ordinary General Meeting of Shareholders March 31
Year-end Dividend March 31
Interim Dividend September 30
Other record dates are established as necessary with prior public notice.

Method of Public Notice

Public notices are available on the Company’s website below:
https://www.nittobo.co.jp/koukoku/index.htm (Japanese only)
However, if an electric public notice cannot be posted due to an accident or otherunavoidable reason, the public notice will be printed in the Nihon Keizai Shimbun.

Stock ListingFirst Section of the Tokyo Stock Exchange (Securities code: 3110)

Shareholder registry administrator 1-2-1, Yaesu, Chuo-ku, Tokyo, 103-8670, Japanand Special Account Administrator Mizuho Trust & Banking Co., Ltd.

Nittobo Allied Service Co., Ltd.
Fukushima-shi, Fukushima Reagents various contracted
services and insurance agency
Nittobo Techno Co., Ltd.
Koriyama-shi, Fukushima Design, manufacture, and sale,design and construction of civil engineering work and building(as of June 30, 2019)51