Passion for innovation

16F, Metropolitan Plaza Bldg., 1-11-1 Nishi-Ikebukuro,
Toshima-ku, Tokyo 171-0021, Japan
Phone : 81-3-5953-5200
http://www.taiyo-hd.co.jp/en/

Annual Report 2019Year ended March 31, 2019

The TAIYO Group was founded in 1953 to manufacture and sell printing ink and related materials. In 1976, we redirected
our business to make solder resists our leading product. Since then,we have grown the solder resist business to obtain the top share of
the global market.
In our core business of materials and components for electronic
devices, we have complemented solder resists by developing andcommercializing lucrative products as we strive to create new
business with a focus on chemistry. In addition to energy and food,
we started up another new business in 2017 in medical and pharmaceuticals in our continuing search for business opportunities.
In the future, we aim to raise enterprise value as a comprehensive
chemical company as we push forward to strengthen the profitabilityof core businesses and achieve solid growth in new ones.

Contents
Profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 02

What is TAIYO HOLDINGS Group
Message from the President and CEO . . . . . . . . . . . . . . . . . . . . . . . 04
Overview of FY2019 (Consolidated). . . . . . . . . . . . . . . . . . . . . . . . . . 06
History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 08

Management Strategy
Interview with the President and CEO . . . . . . . . . . . . . . . . . . . . . . . 10
Electronics Materials Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Medical and Pharmaceuticals Business . . . . . . . . . . . . . . . . . . . . . 20
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Supply Chains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Research & Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Forward- Looking Statements
This annual report contains forward-looking statements regarding TAIYO HOLDINGS’ current management
plans, strategies, and other matters. Readers are cautioned that these forward-looking statements containinherent risks and uncertainties, and may differ materially from actual results.

Definition of Terms“Fiscal 2019” or “Fiscal year 2019 (FY2019)” refers to the fiscal year ended March 31, 2019, and other fiscal years
are referred to in a corresponding manner in this annual report.

Action to ESG Issues
Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ESG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Financial Section and Corporate Information
Financial Section . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Corporate Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

TAIYO HOLDINGS Annual Report 201901

Profile
Solder resists protect circuit patterns on printed wiring boards (PWBs) from damage causedby dust, heat or other potential factors.
With solder resists that are unmatched in the industry, TAIYO HOLDINGS has established afirm position, boasting the world’s largest share of market.
Moving forward, we will continue to expand our new businesses to ensure ongoing corporate growth while using our position as a global and comprehensive chemical company tobrightly illuminate the lives of people from future generations.

Management Philosophy
We will realize “a pleasant society” by further advancing “every technology” the Group has
and creating a wide range of products to help fulfill the dreams for the whole world with
our innovative products.

Basic Management Policies

Aiming to Be the Global andComprehensive Chemical Company

TAIYO HOLDINGS CO., LTD. has identified its objectives as a corporate group in the Management
Philosophy and Basic Management Policies below. We will develop by continuing the spirit of ourManagement Philosophy without changes and reviewing our Basic Management Policies to match changes in the environment and strategy on a long-term basis.

Energy Business

Food Business

Medical andPharmaceutical BusinessElectronics Materials
Business1

We will generate profit and increase corporate
value, thereby contributing to the well-being
and prosperity of customers, communities,
shareholders, and employees.

2

We will discharge our corporate social responsibility with regard to the achievement of ourManagement Philosophy, including complying
with the law, protecting the environment,
ensuring thorough quality management, andcontributing to society.

3

We will leverage our global system to always
provide superior products and services.

4

We will constantly create opportunities for
employees to challenge and develop themselves,aiming to have a corporate group composed ofpeople who are highly motivated to be successful
and to achieve goals set by themselves.

5

We will increase our comprehensive corporate
strengths by maximizing cooperation between
the Group companies and strengthen the
teamwork of all employees with emphasis on“speed and communication.”

6

We aim to have a group of global companies
able to contribute to the realization of a pleasant society by constantly working for technological innovation and creating new products
and businesses.

Chemistry

02

TAIYO HOLDINGS Annual Report 2019TAIYO HOLDINGS Annual Report 201903

What is TAIYO HOLDINGS GroupManagement Strategy

Action to ESG Issues

Financial Section and Corporate Information

Message from the President and CEO

The TAIYO Group is a chemical

Through this philosophy, we aim to shift from amanufacturer. We boast a world-class market share forstructure that is highly dependent on solder resist

solder resist products, which are critical to the printed

products and propel the Group toward a comprehensive

circuit boards used in all types of electronics, including

chemical company. To realize this goal, we are focusing on

IT devices such as mobile phones and computers, digitalnew business development in the fields of food, energy,

appliances, and vehicle electronics.

medical and pharmaceuticals.

TAIYO was established in 1953 as TAIYO INK MFG. CO.,Aiming to grow the medical and pharmaceuticalLTD., specializing in the manufacture and sale of ink andbusiness into a second pillar of Group business, we will

related materials. In 1976 we made a dynamic change inconcentrate on expanding our operations in these fields.

our business direction, shifting our main focus toward theHaving obtained approval to manufacture and sell 14

manufacture of solder resist products. Confidence in our

long-term listed products, on October 1, 2019, we acquired

technical capabilities supported this decision.

the Takatsuki Plant of the Daiichi Sankyo Group. ThroughTo achieve further growth, the TAIYO Group has

this acquisition, we established a domestic manufacturingrevised its corporate philosophy. This change reflects

facility. Moving forward, we will continue to acquire long-

our commitment to applying the technology cultivatedterm listed products while also working to expand ourthrough solder resist development and manufacturing

overseas network as we aim for global business expansion.

as a platform through which each member of the TAIYO

We ask for your ongoing support of the TAIYO Group.

Group strives to improve every aspect of its technology
and promote the development of innovative products in
new fields. This new philosophy reflects our desire to exist
as a corporate group that supports dreams by providing
global markets with products that contribute to therealization of an enjoyable society.
President and CEO

Eiji Sato04

TAIYO HOLDINGS Annual Report 2019TAIYO HOLDINGS Annual Report 201905

What is TAIYO HOLDINGS GroupManagement Strategy

Action to ESG Issues

Financial Section and Corporate Information

Overview of FY2019 (Consolidated)
KPIs for Performance and Financial Condition

KPIs on ESG Information

Net sales

59,389

¥

Other

Other

Japan

6.1%

8.1%

28.7%

South Korea

12.9%

15.6%

¥59,389¥59,389
millionmillionElectronics
materials

%

10.6%

8,099

¥

(Dividend on equity ratio: 5.3%)

06

TAIYO HOLDINGS Annual Report 2019

million(Operating margin: 13.6%)

R&D expenses

3,116

¥

million%(Past 6 years: 110)

Energy use (crude oil equivalent)

CO2 emissions

2,426

5,322 2kl

(Reduction 6.9% year on year)

550

CO

t-CO2

(Down 7.0% year on year)

Annual estimated solar power generation

Waste emissions

Operating income

Dividend per share

130.2

%

China

37.0%

(Down 0.6 percentage points year on year)

¥

50 50

71.3%

81.0%

6.2

Overseas

TaiwanReturn on equity

Female(Average age: 40.0)

Geographic segment

Reportable segment

Male

1,614

million(Up 13.7% year on year)

Medical andpharmaceuticals
business

Gender ratio of newly recruited graduates

Number of employees

Approximately

16.1

t

(Up 2.6% year on year)

GWh(As of November 1, 2019)

Ratio of outside directors

Board of Directors attendance rate

33.3

99.2

%

%

(Ratio of R&D expenses to sales: 5.2%)

TAIYO HOLDINGS Annual Report 201907

What is TAIYO HOLDINGS GroupManagement Strategy

Action to ESG Issues

Financial Section and Corporate Information

History
Growth Fundamentals Built Up over 60 Years
1953

1976

1988

2001

2013—2019TAIYO INK MFG. CO., LTD.
established

Radical change inbusiness policy

Commenced locally-based
production overseas

Listed on the First Section of
the Tokyo Stock Exchange

Commemorating our 60th anniversary,and taking on new challenges

Taiyo Ink Manufacturing was established

In a radical change in business policy, theIn order to respond to rapidly increasing

Our listing on the First Section of the

As part of our strategy for ongoing Group growth, we are working to expand our share of thein Minato-ku, Tokyo to manufacture andcompany decided to switch from its main-

sales in South Korea, TAIYO INK MFG. CO.,Tokyo Stock Exchange and the completionsolder resist market while creating a framework for the continuous development and rapid

sell printing ink. In Japanese, “taiyo” means

stay business of printing ink to solder resist(KOREA) LTD. was established and localof the Ranzan-Kitayama Facility (current

commercialization of new products that will grow into profit drivers to rival solder resist.

“sun.” The name was decided on because

products and other chemical materials for

production began. Through local pro-headquarters of TAIYO INK MFG. CO., LTD.)

it reflects our desire to be useful to people

the electronics industry. At the time, ourduction also in the United States, Taiwan,

enabled higher quality and more stable

2013

everywhere and bring light into the world.

chemical materials business was still at theand China, TAIYO INK has built up a global

product supply in both Japan and overseas.

Obtained shares in the Taiwanese company ONSTATIC TECHNOLOGY CO., LTD. andtrial-and-error stage and the marketability

supply system focused on local production

Responding to the dramatically changing

made it a subsidiary.

of these products was unknown; the future

and marketing.

external environment, we also commenceof the company therefore rested on thisproduction and marketing in China.

2014

1988

Established photovoltaic power generation business subsidiary

Established TAIYO INK MFG. CO., (KOREA) LTD.

TAIYO GREEN ENERGY CO., LTD. in Japan.

Ranzan Plant (current Ranzan Facility)

1990

2015

established.

Established sales subsidiary TAIYO AMERICA,

Established TAIYO INK PRODUCTS CO., LTD. in South Korea as a sales subsidiary of

INC. in Nevada, United States.

TAIYO INK MFG. CO., LTD.

decision.

1982

1984

Listed on the Tokyo Stock Exchange

Exhibited liquid developable solder resist at
the JPCA Show.

1985

1995

Obtained the Japanese company Chugai Kasei Co., Ltd. through a share swap and made it
a subsidiary.

Transformed US sales subsidiary TAIYO2001

AMERICA, INC. into a manufacturing andOpened the Ranzan-Kitayama Facility, themarketing company.

company’s main domestic production base.

2017
Established TAIYO Pharma Co., Ltd. as a subsidiary in the pharmaceutical business.

The company developed the current
standard liquid alkaline developable solder

1996

Established technical support subsidiary

resist (PSR- 4000) and applied for a basic

Established TAIWAN TAIYO INK CO., LTD.

TAIYO INK (THAILAND) CO., LTD. in Thailand

2018

and local production subsidiary TAIYO INK

Obtained all shares of two systems engineering companies, Micro Network Technologies(SUZHOU) CO., LTD. in China.

Corp. (MNT) and Thou-Management Corp (TMC), and made them subsidiaries.

INTERNATIONAL (SINGAPORE) PTE LTD and2010

Established TAIYO TRADING (THAILAND) CO., LTD.

TAIYO INK INTERNATIONAL (HK) LIMITED.

Implemented a company split andpatent.

1999
Established sales subsidiaries TAIYO INKTAIYO GREEN ENERGYCO., LTD.

changed the corporate name to TAIYOHOLDINGS CO., LTD.
Established sales subsidiary TAIYO INKTAIYO Pharma Co., Ltd.

TRADING (SHENZHEN) CO., LTD. in China.
TAIYO INK INTERNATIONAL(SINGAPORE) PTE LTD

Ranzan Plant

Ranzan-Kitayama
Facility

TAIYO AMERICA,
INC.

2019
Completion of transfer of marketing and manufacturing rights of 14 long-term
listed products from Chugai and Nippon Boehringer to TAIYO Pharma.
Acquired new shares, taking over ownership of
the Takatsuki Plant of Daiichi Sankyo Propharma Co.,
Ltd. (subsidiary acquisition)

JPCA ShowNet sales
1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 198608

TAIYO HOLDINGS Annual Report 2019TAIYO INK
(SUZHOU)
CO., LTD.

Takatsuki Plant

1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019TAIYO HOLDINGS Annual Report 201909

What is TAIYO HOLDINGS GroupManagement Strategy

Action to ESG Issues

Financial Section and Corporate Information

Interview with the President and CEO
you reflect on performance in the fiscal year ended March 31, 2019,
Q Can
and provide an update on the status of the Medium-term Business Plan NEXT STAGE 2020?

“We will implement our Management
Philosophy by creating new businesses
and ensuring the Group’s growth.”

Under our three-year Medium-term Business Planand pharmaceutical business as a second pillar of revenue

NEXT STAGE 2020, which began in the fiscal year

unaffected by environmental changes. In the fiscal year

ended March 31, 2018, we have launched polices aimed

ending March 31, 2020, the final year of this plan, we willat extricating the Group from a structure that is substan-

have acquired a pharmaceutical factory in Japan and havetially dependent on solder resist single products andestablished a full-scale system in the medical and pharma-

businesses in the electronics materials business to makeceutical business.

the leap toward becoming a comprehensive chemical

Note: The acquisition of TAIYO Pharma Tech (Takatsuki Plant) was completed on October 1, 2019.

company. Specifically, we will quickly launch the medical

Medium-term Business Plan
Management Indicators: Targets and Results

Targets

FY2018 Results

FY2019 Results

Operating margin

20% or more

21.7%

13.6%

ROE

11% or more

6.8%

6.2%

DOE

5% or more

6.5%

5.3%

Achievea new record high¥11,337 million¥8,099 million

Operating income(Interview date: July 31, 2019)

Basic Policies

Q How do you perceive the business environment surrounding the TAIYO HOLDINGS Group?

T

he current environment in the electronics field, ourAt the same time, the Group entered the pharmaceuti-

main business, is extremely challenging. This can be

cal business with the establishment of wholly-owned sub-attributed to growing uncertainties in the global economy,

sidiary TAIYO Pharma Co., Ltd., in August 2017. However,including the worldwide decline in demand for automo-

prices of long-listed pharmaceutical products and sold bybiles and smartphones, trade friction between the US andTAIYO Pharma are on a downward trend. Although this

China and tighter controls on exports from Japan to Southdecline in drug prices will have a negative impact on the

Korea. However, taking a somewhat longer view of elec-

profit environment, we are cognizant of our ability to suffi-

tronics overall, the outlook is not entirely bad, especiallyciently respond by enhancing efficiency.

1. Improve profitability of solder resist (SR)
2. Expand into areas related to printed wiring board (PWB) other than solder resist
3. Launch a medical and pharmaceutical business4. Move the energy and food businesses into the black
5. Strengthen basic research capabilities
6. Business alliance with DIC Corporation*
7. Execute M&A strategy
8. Expand CSR activities
9. Develop and utilize self-sufficient personnel capable of acting independently* TAIYO HOLDINGS CO., LTD. concluded a business alliance with DIC Corporation on January 25, 2017.

as we are rapidly approaching the full-scale rollout of 5G,
IoT and other next-generation mobile communications
systems. It is extremely critical that the Group seize thistiming to develop products corresponding to new businessdomains and propose them to customers.

Looking back over the past year, the business strategies
implemented have produced various results.

products licenses, all production up to now had been out-

have been moving forward with developments aimed

sourced. With the acquisition of our own factory in Octoberat creating a new market in the cutting-edge materials

2019, we will be able to produce a number of products infield. As the environment surrounding this business has

house, representing a major step forward as a pharmaceu-

not necessarily been favorable, business performance hastical manufacturing and sales company going forward.

unfortunately declined. However, in terms of sowing seed

These efforts are expected to lead to performance

In the medical and pharmaceutical business, we decided to acquire Daiichi Sankyo Propharma’s Takatsuki Plant.

TAIYO HOLDINGS Annual Report 2019began with the acquisition of long-listed pharmaceutical

Specifically, in the electronics materials business, wefor the next-generation, I am proud of our efforts.

10

Although our initial entry into the pharmaceutical businessresults from this fiscal year forward, and I feel that this past
year has been one of solid achievements in terms of establishing these two pillars.

TAIYO HOLDINGS Annual Report 201911

What is TAIYO HOLDINGS GroupManagement Strategy

Action to ESG Issues

Financial Section and Corporate Information

Interview with the President and CEO

scenario is envisioned for your leap forward and growth as
Q Whata comprehensive chemical company?

T

how in line with our acquisition of a top-class plant in Japan.

he comprehensive chemical company envisioned byfrom growing. In terms of overall profitability, this may

the Group is one that expands from an electronics-fo-

cause a temporary setback, but including all this, we aim

cused business area based on electronics and chemicals,for operating margin of 20% for the electronics materialsof the medical and pharmaceutical business is extremely

process management, and differences are not as great as into the areas of pharmaceuticals, food and energy. Unlike

business as a whole.

From a social perspective, I think the overseas expansion

process and planning efforts. Although the materials themselves are different, there is considerable commonality inmeaningful. First of all, I think that if we can deliver existing

different industries, thus various know-how can be propa-

We entered the medical and pharmaceutical businessdrugs globally, we will help more people than by developing

gated—especially for use in quality control.

with large plants that produce materials, what we callthrough M&A, and although the amortization of goodwill is

new drugs. As the Group is expanding its electronics mate-

We have the skills and equipment that can be com-comprehensive chemicals involves the use of applied tech-

unavoidably substantial, the business is generating a solid

rials business globally, we can utilize that know-how for the

missioned for analysis and the policy of business itself tonologies with a wide range of business fields. Currently, ourprofit margin of around 15%, and as amortization of good-

global deployment of pharmaceuticals to patients in areas

construct both strategies for increasing the number ofGroup is the top niche company in the solder resist busi-

will proceeds, profitability will rise to the same level as inwhere they are currently not being delivered.

long-listed pharmaceutical products as well as strategies

ness positioned upstream in the semiconductor industry,the electronics materials business. Because of the impact

but looking ahead to future business growth, I feel stronglyof goodwill, for the time being, we have to manage on

about drugs that are needed,” referring to the kinds ofbusiness. The company commissioning does incur any

that we need to make a leap forward to become a com-the basis of EBITDA (operating income/loss + depreciation

drugs that are needed and the places they are needed in.

additional costs, so the more contracts are entered into,

prehensive chemical company. To this end, it is essential

and amortization), but after 2–3 years, we think electron-

Our medium- to long-term growth strategy is to seriously

the higher the utilization rate and higher the profitability.

to adopt a long-term perspective with regard to businessics materials and medical and pharmaceutical businesswork on the global deployment of existing drugs.

development strategy. Based on this thinking, up to now

EBITDA will be nearly the same.

the standard image of comprehensive chemical companies

In terms of business responses to the market environ-for successful performance in commissioned analysis

Because of declining drug prices, the medical andIn this way, the Group’s medium- to long-term growth

pharmaceutical business is challenging from an environ-

In particular, we plan on substantially growing thestrategy is to firmly develop the next generation in themental perspective, but price decreases are something

medical and pharmaceutical business in three areas. The

electronics materials business and to expand the medical

happens in every industry. In the electronics industry,

first involves new investments in regenerative medicine. We

and pharmaceutical business globally.

customers demand lower prices almost every year. Thus,

we have expanded our business domain through executionof M&A investments.

The TAIYO Pharma slogan is “a company that is serious

ment and future growth scenarios and in the electronics

are already partnering with several companies to develop

materials and medical and pharmaceutical businesses, I

new drugs in the field of regenerative medicine. However,can say the following:

the amount invested is comparatively small, as we are not

In the electronics field, the best way to increase profit-

the only company investing due to the high development

ability is to steadily launch new products in cutting-edge

costs associated with new drugs. The second area involves

areas. This will incur development costs, but in terms oflong-listed pharmaceutical products-related business. At

profitability, it is the best approach. On the other hand,present, we are engaged in licensing and sales in Japan, butthere is an opposite move in the electronics field, for exam-

our medium- to long-term strategy involves plans to expand

ple, launching a war of attrition with low-priced products

licensing and sales to overseas markets. The third area

while following a strategy aimed at preventing competitors

involves the overseas deployment of production plant know-

we do not think that only pharmaceutical products areT

he electronics materials business and the medical andspecial, and even if prices go down, we can respond bypharmaceutical business have many points in common

increasing efficiency and profitability.

that are directly related to productivity, such as production

Similarities between Manufacturing Processes for Pharmaceutical and Electronic Materials
Clean room
(Class 10,000 to 100,000)

Temperature 23ºC ± 2ºC

Humidity 55% ± 10%

Clean room
(Class 100,000)

Electronics
materials
ISO standard
Input

Chemicalanalysis

Chemistry

Electronics Materials
Business
Medical andPharmaceutical Business
Food Business

Chemicalanalysis
Input

Aiming to Be the
Global andComprehensive
Chemical Company

Finishadjustment Filling

Labeling

Tableting / Inspection /Primary packaging

Secondary packaging

Milling

Chemicalanalysis

Mixing / granulating / drying

Pharmaceuticals
GMP regulations

Energy Business
Chemical analysis is the same

12

TAIYO HOLDINGS Annual Report 2019TAIYO HOLDINGS Annual Report 201913

What is TAIYO HOLDINGS GroupManagement Strategy

Action to ESG Issues

Financial Section and Corporate Information

Interview with the President and CEO

Q What systems are in place to support sustainable growth?

Q What are your financial policies and message to shareholders and investors?

WT

e are proactively engaged in the promotion of ESG

future, we spend a great deal of time ensuring that out-

initiatives to create structures supporting sustain-side directors understand the details so that they make aable growth. First of these is governance. In light of societal

well-considered decision.

he Group’s financial policy is to secure appropriate

domains with the aim of benefitting society with products

funds for business activities, maintain appropriate

and businesses developed and grown by Group humanliquidity, and maintain a sound balance sheet. Necessary

resources. We hope shareholders and investors see this anddemands, it has become commonplace in domestic com-

In this way, the Group aims to improve objectivity andfunding is obtained through operating activities and bor-

resonate with it. We will continue to move steadily forward

panies today, but one third of the members on our Board

create a balanced corporate governance system that is eas-rowing from banks. We believe the Group has secured thewith high profitability and growth strategies to maintainof Directors are outside directors, and in fact, the ratio of

ily understood outside the Company. This is a very import-

level of funds currently required.

trust, meet expectations and remain highly valued by alloutside directors has been relatively high since early on.

ant factor in terms of risk management and accountability.

Furthermore, outside members comprise 75% of our Board

Furthermore, in terms of human resource development,

We consider the return of profits to shareholders

our stakeholders.

through cash to be an important policy and we continueof Corporate Auditors, to ensure independence. We cre-I think there is a considerable degree of freedom withto return high levels of profits on a continuous and stableated an advanced corporate governance system with theregard to investing in people and individual discretion.

basis. Using the dividend on equity ratio as our target

voluntary establishment of the Nomination Advisory andEach and every employee is a source of differentiation fromindex, we aim to maintain this figure at a minimum 5% ofCompensation Advisory committees, which are chaired bycompetitors, thus it is important to provide employees

consolidated financial results over the mid-to long-term.

outside directors and have a majority of outside directors

with the motivation to draw on their cognitive powers andas members.

think through their actions thoroughly. For example, inrealize a sustainable society, and above all, we believe

Finally, the Group is proactively engaged in ESG to

In these committees, we encourage participation in

research and development, we develop products that con-that building a self-motivated workforce and creating new

discussions by as many outside directors as possible. For

tribute to an advanced information society and comfort-

business will enable us to contribute to the sustainability

example, in entering the pharmaceutical business, weable environment under a structure enabling research intoof society. We are expanding beyond our current businessconduct seven–eight discussions every six months in whichthemes chosen by management as well as independently

outside directors take an active role and are confident that

focused. Under the watchwords “building a self-motivatedthis ensures the effectiveness of our Board of Directors. As

workforce,” Group employees are self-sufficient and spend

for major deals that may substantially affect the Company’s

each day driven by internal motivations.

Transition of Corporate Governance System
As a voluntary institution:
Compensation Advisory Committee (from December 2009)
Nomination Advisory Committee (from November 2015) establishedAppointment of two or
more outside directors (June)

2014

2015

2016

2017

Early disclosure of financial results(from January)

2018

2019

Early disclosure of General Shareholders’ Meeting proposals andearly mailing of convocation notices (March)
Introduced performance-linked remuneration system for
multi-year transfer-restricted shares (June)

14

TAIYO HOLDINGS Annual Report 2019TAIYO HOLDINGS Annual Report 201915

What is TAIYO HOLDINGS GroupManagement Strategy

Action to ESG Issues

Financial Section and Corporate Information

Electronics Materials Business
The electronics materials business mainly manufactures and sells chemical products, primarily for the electronics industry. Printed wiring board (PWB) materials are a major product of the business and are chemicalmaterials that are used in PWBs such as solder resists. Through this business, the Company is utilizing the elemental technologies it cultivated while handling PWB materials to open up new product fields in the electronic
components industry.

Classification of Products
Rigid PWB Materials
A liquid solder resist that is applied to the surface of a rigid board. A mainboard
is a printed wiring board (PWB) made with a rigid insulated substrate. This single
board, which is primarily installed inside electronic devices, is mounted with
LSIs, resistors, condensers and other components.

Segment Sales

Segment Income and Income Rate

(Millions of yen)

(Millions of yen)(%)

60,00020,00032

46,45049,85448,08645,000

Semiconductor Packaging (PKG) Materials

24.3
15,00030,00010,00015,000

5,000

21.1

21.8

24

12,114

Solder resist applied to the surface of a PKG board. Two types are available:liquid and dry film. A PKG board is a type of printed wiring board used as an

10,5019,801

PWB Materials other than Rigid PWB (PKG, FPC, and buildup board materials)

16

interposer when mounting semiconductors used in devices such as computerCPUs, smartphone AP or memory.

0

2017

2018

0

2019

(FY)

8

2017

2018

2019

(FY)

0

Flexible Printed Circuit (FPC) Materials
Main products include solder resists that are applied to the surface of flexible
boards and a photoimageable coverlay. One of our new products, this photoim-

Sales by Product Category

ageable polyimide film offers both high resolution and high bendability. Flexible

Rigid PWB Materials

PWB Materials Other than Rigid PWB

printed circuit boards are soft, flexible boards made from polyester or polyimide(Millions of yen)

(Millions of yen)film coated with copper foil.

40,00016,00033,21634,342

13,69932,21230,00012,00014,268

Build-up Materials

11,485Main products include hole-plugging ink and interlayer insulation materials.
20,000

Build-up refers to a method of manufacturing heavily layered PWBs by alternate-

8,000

ly laminating insulated and conductive layers on a core board (or base board).
10,000The ink used to fill conductive holes in a core board is called hole-plugging ink.

4,000

The laminated insulation is called interlayer insulation.
0

2017

2018

(FY)

0

2019

2017

2018

2019

(FY)

Note: Sales of other related products were ¥1,749 million for FY2017, ¥1,813 million for FY2018, and ¥1,606 million for FY2019.

16

TAIYO HOLDINGS Annual Report 2019TAIYO HOLDINGS Annual Report 201917

What is TAIYO HOLDINGS GroupManagement Strategy

Action to ESG Issues

Financial Section and Corporate Information

Electronics Materials Business

Solder Resist
Printed wiring boards (PWBs) are used in various
digital consumer electronics such as mobile
phones as well as electronic products such as
automobile electronics equipment. Solder resist(SR), a core product of the TAIYO Group, protects
PWBs by coating the surface of the conductor
circuits, preventing short circuits and other product problems, and making long-term, stable use
possible.

Roles of Solder Resist

1. Preventing solder attachment in areas where
it is not needed
We will generate profit and increase corporate value, thereby

Automotive components

Data center

PCs

SolderResistPhotoimageable Solder Resist Pattern
Formation Process (Photolithography)

1. Printing (coating)contributing to the well-being and prosperity of customers,

SR is applied to the entire

communities, shareholders, and employees.

surface.

2. Protecting circuit patterns from dust, heat,

2. Pre-curing
The wiring board is heated toand moisture

80°C for 20 to 30 minutes and

SR protects circuit patterns from the external environment

provisionally dried.

including dust, heat, and moisture. This makes it possible forelectronic devices to operate stably over extended periods.

3. Light exposure
The wiring board is exposed to

Smartphones andtablets

Medical equipment

ultraviolet light passed through

3. Maintaining electrical insulation between

a negative film. The SR in areas

circuit patterns
Consumer electronics
and AV equipment

Product Segments

exposed to the light hardens.

In conjunction with the miniaturization of electronic devices,
package substrates are also becoming increasingly fine with

4. Developing

circuit patterns on general circuit boards in the 50 μm to 150

The unhardened SR is washedμm range. SR maintains insulation between circuit patterns,

off using a developing agent(a dilute alkali water solution).

preventing short circuits.

Group

Category

Remarks

Type

High-end

5. Post-curing
The circuit board is heated to 150°C for 50 to 60 minutes to

Smartphones, vehicles, tablets

PWB insulating materials

Rigid
Regular
SR materials for insulationand surface protection use

PKG*1

Main End-Products

FPC*2

harden the SR. The SR pattern formation process is complete.

LiquidPCs, LDC television, OA equipment,
industrial equipment

Liquid/Dry Film

Semiconductors

Liquid/Dry Film

Smartphones, cameras,
precision equipmet, etc.

Liquid/Dry Film

PCs, consumer electronics,
etc. (multi-layer PWB)

Liquid-Type SR
There are various types of SR, but TAIYO INK was a pioneer inthe development of alkaline developable liquid-type SR, which
has now become a leading product. It is characterized by highsensitivity as well as outstanding gold plating resistance andBuild-up materials for interlayer
insulation and hole plugging use

Build-up*1 Semiconductor packages*2 Flexible printed Circuits

water-soluble flux resistance. It is also used as SR on automotive
PWBs for its excellent migration resistance and pressure cooker
test resistance.

Dry Film-Type SR
Existing liquid-type SR can be preprocessed into a film and a
uniform thickness can be achieved. The use of dry film-type SR on
semiconductor PKG substrates is increasing. Because the drying
process, which is essential for liquid-type SR, can be eliminated, it
is expected that dry film-type SR will reduce manufacturing costs.

18

TAIYO HOLDINGS Annual Report 2019TAIYO HOLDINGS Annual Report 201919

What is TAIYO HOLDINGS GroupManagement Strategy

Action to ESG Issues

Financial Section and Corporate Information

Medical and Pharmaceuticals Business
The Company is aiming to make the leap toward becoming a comprehensive chemical company by entering
the pharmaceutical business through TAIYO Pharma Co., Ltd., which manufactures and sells medical andpharmaceutical products, and TAIYO Pharma Tech Co., Ltd., which manufactures pharmaceuticals on consignment. Moving forward, we will strive to expand our long-term listed products business by acquiring moreproducts while conducting global business development targeting growth in our overseas network, startingwith the Takatsuki Plant as a base for domestic manufacturing.

Segment Sales

History(Millions of yen)August 2017
7,661

8,000

January 2018 Completed asset transfer of 13 long-term
listed products

6,000

March 2019

4,000

April 2019

819
2017

2018

Concluded an asset transfer agreement concerning one long-term listed product
TAIYO Pharma Tech Co., Ltd. established

October 2019 Acquired Takatsuki Plant (TAIYO Pharma
Tech Co., Ltd.) of Daiichi Sankyo PropharmaCo., Ltd.

2,000

0

TAIYO Pharma Co., Ltd. established

2019

(FY)

Acquired new shares and fully took overownership of the Takatsuki Plant of Daiichi
Sankyo Propharma Co., Ltd.
(subsidiary acquisition)

TAIYO Pharma Tech (Takatsuki Plant)

The TAIYO Group’s high degree of reliance on its printed

cal and pharmaceuticals business.

Furthermore, we took over the Takatsuki Plant of Daiichi
Sankyo Propharma on October 1, 2019, with the goal of
securing a new in-house manufacturing base in the medi-

wiring board materials business caused a pressing need

The Takatsuki Plant of Daiichi Sankyo Propharma, a

for new business development. In response to this need,pharmaceutical manufacturer in the Daiichi Sankyo Group,

we entered the pharmaceutical business as both an R&D-

began operations in 1933. It has maintained advanced

based chemical manufacturer and a global manufacturing

manufacturing that meets GMP standards and a quality

company with the goal of improving synergy with our core

control system in manufacturing solid preparations andbusinesses, elevating domestic demand and global growth

injectables since that time.

potential and raising employee motivation through exten-

With the acquisition of this plant, the TAIYO Group will
begin the manufacture of pharmaceuticals on consign-

sive social contribution.
Since inheriting our first long-listed pharmaceuticalment in addition to the business of TAIYO Pharma andproducts from Chugai Pharmaceutical in 2018, we havefurther solidify the foundation of our medical and pharma-

expanded our lineup and now supply and sell 14 long-list-

ceutical business. We will continue to take orders for man-ed pharmaceutical products.

ufacturing from the Daiichi Sankyo Group and expand thisThe long-listed pharmaceutical products we inherited

business. In the future, we plan to make effective use of thehave an extensive and proven track record and are of hightechnological capabilities and production capacity of theimportance to society. TAIYO Pharma Co., Ltd., a subsidiary

Takatsuki Plant to secure orders from companies outsidethat is part of our medical and pharmaceuticals business,of the Daiichi Sankyo Group and meet the diverse needs ofwill aim for stable and ongoing business activities bypharmaceutical companies in Japan and overseas.

establishing points of contact with medical institutions

Prospect of Medical and Pharmaceutical Businessand patients by ensuring a steady supply of long-listed
pharmaceutical products while supporting product devel-

1st Factory

2nd Factory

Acquired Takatsuki Plant

Establish overseas factory• Manufacture Japan-quality pharmaceutical• Manufacturing know-how & personnel• Manufacture TAIYO products and long-term
listed products• Establish large factory in overseas• Manufacture high quality product• Export to Japan with low-price• Global vision• Domestic CMO to Global CMOTAIYO productAcquire long-term listed
products and seeking forchance of factory M&A

Pharmaceuticaldevelopment*1 CDMO=Contract Development Manufacturing Organization

20

TAIYO HOLDINGS Annual Report 2019

CDMO*1

opment and manufacturing through innovative marketingand technology.

Areas in Which We Should Demonstrate Our Strengths
We will focus our efforts on formulation development, procurement and manufacturing instead of R&D(drug discovery) and sales.

Medical and Pharmaceuticals

Development
manufacturing
company

Pharmaceutical development laboratory

Globalmanufacturing
company

Obtain Class 1 Manufactureand Sale License and startpharmaceutical development

TAIYO Pharma
Transfer of long-listed products

TAIYO Pharma Tech
Formulation development:
Formulation technology and formulation improvement

Long-listed drugs: Drugs for which the patent
has expired or the re-examination period has
ended and there exist generic alternatives thathave the same efficacy as the long-listed drug

Procurement:
Drug substance procurement and chemical analysis

Manufacturing:
Quality assurance, production technology and overseas production

TAIYO HOLDINGS Annual Report 201921

What is TAIYO HOLDINGS Group

Medical and Pharmaceuticals Business

TAIYO Pharma Tech (Takatsuki Plant) Outline

Company name
Address

Area

Plant floor space: 52,584m2

Operational launch

December 25, 1933

Number of employees

Approximately 330(as of April 1, 2019)

Representative’s title
and name
Business contents
Share capital
Establishment date
Number of shares issued
Fiscal year-end
Major shareholder andshareholding ratio

Eiji Sato, President and CEO
Manufacture and sale ofpharmaceutical products¥300 million
April 25, 2019
6,000 shares
March 31

Action to ESG Issues

Financial Section and Corporate Information

Other

TAIYO Pharma Tech Outline
TAIYO Pharma Tech Co., Ltd.
4-38, Aketa-cho, Takatsuki-shi,
Osaka, Japan

Management Strategy

Dosage forms of
manufactured medicine Solid preparations and injectables

In other segments, we will continue to grow andbrighten people’s lives as a comprehensive chemicalcompany through our natural energy-based power
generation business; our food business, which primarily focuses on plant factory management andpractical research concerning insect-based animal
feed; the manufacture and sale of chemicals such asdyes and pigments; and software development.

Other Businesses: Energy, Food, Systems andFine Chemicals
Highlight in 2019TAIYO GREEN ENERGY established new floating solar
power plants (10 plants in total).
The 10 plants are estimated to generate 16.1GWh on anannual basis, which is equivalent to 100% of the Group’s
power consumption in Japan (excluding TAIYO Pharma Tech).
Segment Sales

Micro Network Technologies(1) On November 1, 2019, Thou-Management Corporation(Millions of yen)

was dissolved and merged into Micro Network

4,000

TAIYO HOLDINGS CO., LTD. :100%

TAIYO GREEN ENERGY

3,642

Technologies Corp. (system subsidiary)(2) Thou-Management Corporation (system subsidiary):

3,000

Adoption of verification test by utilizing Quasi Zenith
2,000

1,415

Vision of the Medical and Pharmaceuticals Business

Satellite System (QZSS) (MICHIBIKI)

1,567


Moving forward, we will aim to expand the long-listed pharmaceutical products business through efforts such as further

1,000

July 1, 2019: Chugai Kasei Co., Ltd. joined TAIYO HOLDINGS

product acquisition while working to create products that fulfill needs across the globe. Furthermore, armed with its pharma0

ceutical manufacturing bases, the TAIYO Group is considering expanding its business, primarily in terms of manufacturing, byapplying the technologies and manufacturing expertise it has cultivated up until now and leveraging its overseas network.

TAIYO Fine Chemicals

Group in June 2015 and subsequently changed its compa2017

2018

2019

ny name to TAIYO Fine Chemicals Co., Ltd.

(FY)TAIYO Group’s Floating Solar Power Plants in Japan

Hiraike Hydro-Solar Plant (Gifu)
Hosoike Hydro-Solar Plant (Gifu)

Anazawaike Hydro-Solar Plant (Hyougo)
Uozumiike-Kusatani Hydro-Solar Plant(Hyougo)Ranzan Hydro-Solar Plant (Saitama)
Ranzan Onuma Hydro-Solar Plant (Saitama)

Hayashiike Hydro-Solar Plant (Aichi)

Mimayaike Hydro-Solar Plant (Kagawa)
Kobayashiike Hydro-Solar Plant (Nara)

Shijukushinike Hydro-Solar Plant (Mie)TAIYO Pharma Tech (Takatsuki Plant)

A plant factory operated by TAIYO GREEN ENERGY

22

TAIYO HOLDINGS Annual Report 2019

Functional colorants (TAIYO Fine Chemicals)

TAIYO HOLDINGS Annual Report 201923

What is TAIYO HOLDINGS Group

Supply Chains

Management Strategy

Action to ESG Issues

Financial Section and Corporate Information

Research & Development

Network Covering the Global Market

Quality Management in the Overall Supply Chain

Guided by our core values, we conduct our electronics

mounting dies). The performance requirements for theseIn fiscal 2019, PWB materials accounted for about 81%

Quality improvement activities throughout the Group’smaterials business with the aim of contributing toward

products grow tougher each year. Accordingly, in develop-of the TAIYO Group’s sales. The principal centers for pro-supply chain are indispensable to consistently providing

an advanced information society and a more pleasanting our solder resists, we emphasize communicating withduction of PWBs have shifted from the United States andsuperior products and services to customers throughout

environment. To this end, we facilitate research and& devel-clients effectively and streamlining the development process

Europe to Japan and then to emerging countries, and, inthe world.

opment activities on insulating materials and conductive

so as to accommodate market demand in a timely manner.

recent years, production in China has risen rapidly.

Senior marketing personnel endeavor to match prod-

materials.

While responding to these global changes in the busi-

uct specifications with client requirements through close

In the current consolidated fiscal year, we spent a total

ness environment, the Group has conducted transactions

communication to enable customers to select the optimalof ¥3,116 million on research and development—¥26 mil-with PWB manufacturers around the world. The Group has

products for their needs from the diverse lineup of items

lion more than in the previous year.

been aware that its most important mission is to provide

the Group offers.

Group has manufacturing and marketing bases in Japan,

Offering Advantages to Customers through“Local Production and Local Procurement”

China, Taiwan, South Korea, and the United States, as well

The Group does business with customers in virtually every

as marketing and technical service centers in Shenzhencountry. In many cases, product sales prices are quoted inand Hong Kong in China, Singapore, and Thailand.

an impact on the Group’s performance, which is a man-pled with the agility of its global network, has enabled theagement issue. To deal with this, the Group is promoting

Group to secure the leading share in SR in global markets,the implementation of “local production and local pro-and overseas sales have climbed to account for about 80%

curement” or, in other words, “ensuring that products thatof its net sales. Further medium- to long-term growth inare sold in local areas (markets) are manufactured in thosedemand is expected for PWB materials for use in electron-same areas, using locally procured materials.” The Group is

ics components around the world.

responding to an increasing percentage of raw materials

nesses globally and will endeavor to respond to burgeon-

R&D Expenses and Ratio of R&D Expenses to Net Sales(Millions of yen)that are procured locally by having income and expendi-

(%)

6,000

value and to forge new markets by developing products

8with added function.

5.9

4,500

4.6
3,000

2,213

5.2

4.9

6



3,235

3,089

4

2,441

interlayer insulating materials.


1,500

Amid the increasing demand for substrates for 5G
communications, we are developing the new DF type of

3,116

2

Our photoimageable coverlay enables fine processing
and mechanical properties such as heat resistance andflexibility, responding to the need for more smartphones

0

2015

2016

2017

2018

2019

0

(Years ended March 31)
R&D Expenses

Ratio of R&D Expenses to Net Sales

and tablets that are thinner and more lightweight.
In the healthcare sector, we provide materials for wearable devices.

Solder resists

tures denominated in the same currency.
Solder resists, a mainstay of the Group, are used extensively

ing demand.

Leveraging our core technology, we aim to generate new

6.8

foreign currencies, and fluctuations in exchange rates have

The quality of the Group’s products and services, cou-

The Group will step up its activities to develop its busi-

Going forward, we expect circuit technology for the 5G,
electric vehicles and IoT applications to expand globally.

superior products and services at all times and has worked
to expand this network to cover global markets. Today, theOther focus areas

in rigid boards (PWBs with a rigid insulated substrate) andpackage substrates (PWBs used as an interposer when

Inkjet materials effectively minimize the carbon footprint.



Our display materials help ensure high image quality,
high resolution and energy efficiency.

Note: For details, please refer to Annual Securities Report: https://www.
taiyo-hd.co.jp/_cms/wp-content/uploads/2019/08/20190820_01_
en.pdf (Research & Development Page 22-24)

Global Network

China TAIYO INK (SUZHOU) CO., LTD.

South Korea TAIYO INK MFG. CO., (KOREA) LTD.
South Korea TAIYO INK PRODUCTS CO., LTD.

China TAIYO INK TRADING (SHENZHEN) CO., LTD.
China ONSTATIC INK (SHENZHEN) CO., LTD.
Thailand TAIYO TRADING (THAILAND) CO., LTD.

USA TAIYO AMERICA, INC.
Taiwan ONSTATIC TECHNOLOGY CO., LTD.
Taiwan TAIWAN TAIYO INK CO., LTD.
Hong Kong TAIYO INK INTERNATIONAL (HK) LIMITED

Singapore TAIYO INK INTERNATIONAL(SINGAPORE) PTE LTD

Production and Marketing Subsidiaries
Marketing or Technical Support Subsidiaries
Ranzan Labo24

TAIYO HOLDINGS Annual Report 2019TAIYO HOLDINGS Annual Report 201925

What is TAIYO HOLDINGS GroupManagement Strategy

Action to ESG Issues

Financial Section and Corporate Information

Corporate GovernanceManagement Team (As of June 22, 2019)
Directors

Outside Directors

Eiji Sato

Takayuki Morita

Eiji Takehara

Masayuki Hizume

Keiko Tsuchiya

Jinichiro Yamada

President and CEO

Director
Senior Executive Officer

Director
Senior Executive Officer

Director (Outside)
Concurrent position:

Director (Outside)
Concurrent position:

Director (Outside)
Concurrent position:
Professor, Graduate School of Business, Osaka City University

Reason chosen as for director
Takayuki Morita has fulfilled a major responsibility
as a person responsible for the Company’s Groupin charge of major markets, including TAIYO INKTRADING (SHENZHEN) CO., LTD. TAIYO HOLDINGS
expects that he will continue to use his experienceand expertise in corporate decision-making.
Accordingly, TAIYO HOLDINGS has selected him asa director.

Reason chosen as for director
Eiji Takehara has worked on the expansion andreinforcement of the Company’s businesses in Japan.
TAIYO HOLDINGS expects that he will continue to
use his experience and wide reaching expertisein corporate decision-making. Accordingly, TAIYOHOLDINGS has selected him as a director.

The Head of Masayuki Hizume Certified Public
Accounting Office

General Manager, People Value, Japan, Adecco Ltd.

Reason chosen as for director
Eiji Sato oversees the management of theCompany’s Group and has driven the overall Group
forward with his strong leadership. TAIYO HOLDINGS
expects that he will continue to play an importantrole in the Company Group’s decision-making andsupervision of business execution. Accordingly,
TAIYO HOLDINGS has selected him as a director.

Main area of expertise:

Main area of expertise:

Main area of expertise:

Human Resources

Corporate Management

Reason chosen for outside director
Keiko Tsuchiya possesses a wealth of experience andexpertise in the field of human resources, including
management experience as a director of temporary
employment agencies and staffing agencies. TAIYOHOLDINGS expects that she will continue to use
her expertise in our Human Resources Department
and to strengthen the Company’s human resources.
Accordingly, TAIYO HOLDINGS has selected her as an
outside director.

Reason chosen for outside director
Jinichiro Yamada possesses in-depth expertisein entrepreneurship, management strategy andorganizations gained from many years of research.
TAIYO HOLDINGS expects that he will use his
experience and expertise in corporate management.
Accordingly, TAIYO HOLDINGS has selected him as an
outside director.

Accounting
Reason chosen for outside director
Masayuki Hizume possesses specialist knowledge
as a certified public accountant as well as a wealthof experience and expertise. TAIYO HOLDINGS
expects that he will continue to use his experienceand expertise in corporate management.
Accordingly, TAIYO HOLDINGS has selected him as
an outside director.

Audit & Supervisory Board Members (As of June 22, 2019)26

Hitoshi Saito

Takao Miwa

Toshifumi Tamaki

Akihito Sakai

Hidenori Sugiura

Masaru Oki

Asako Aoyama

Director
Senior Executive Officer

Director
Senior Executive Officer

Director

Full-time Audit & Supervisory
Board Member (Outside)

Audit & Supervisory Board
MemberMain area of expertise:

Audit & Supervisory Board
Member (Outside)
Concurrent position:

Reason chosen as for director
Hitoshi Saito possesses a wealth of marketingknowledge and management experience outsideof Japan and has led a number of companies asa person responsible for the Company Group’s
subsidiaries. TAIYO HOLDINGS expects that he willcontinue to use his experience and expertise incorporate decision-making. Accordingly, TAIYOHOLDINGS has selected him as a director.

Reason chosen as for director
Takao Miwa possesses a wealth of expertise andexperience in the electronic materials field and sincejoining the Company, he has overseen the opening
up of new business fields in the Research Division.
TAIYO HOLDINGS expects that he will continue to use
his experience and expertise in corporate decisionmaking. Accordingly, TAIYO HOLDINGS has selected
him as a director.

Reason chosen as for director
Toshifumi Tamaki possesses a wealth of experienceand expertise in management administration,business execution and research and development
as a director of listed companies. TAIYO HOLDINGS
expects that he will use his experience and expertisein corporate decision-making. Accordingly, TAIYOHOLDINGS has selected him as a director.

Main area of expertise:

Full-time Audit & Supervisory
Board Member (Outside)
Main area of expertise:

Finance, Accounting and Law

FinanceLaws, Ordinances and Regulations

Executive Officer Transformation Project
Leader, Coca-Cola Bottlers Japan Inc.

Reason chosen for outside Audit &Supervisory Board member
Akihito Sakai has considerable
knowledge of finance, accounting, andlaw from his experience in businessto date. TAIYO HOLDINGS expects
that he will be able to carry out theseduties in an appropriate manner.
Accordingly, TAIYO HOLDINGS has
selected him as an outside Audit &Supervisory Board member.

Reason chosen for outside Audit &Supervisory Board member
Hidenori Sugiura has a wealth ofexperience and expertise in finance,
including as a professor and lecturer
at universities as a financial expert,
based on his business experience inthe securities and finance industries.
TAIYO HOLDINGS expects that he will
be able to carry out these duties in
an appropriate manner. Accordingly,
TAIYO HOLDINGS has selected him
as an outside Audit & Supervisory
Board member.

Reason chosen for Audit &Supervisory Board member
Masaru Oki has in-depth knowledge of
the Company Group’s operations frommany years of business experience at
the Company’s Group. In addition, healso possesses expertise concerning
the laws, ordinances and regulationsof various countries based on his morethan 15 years of business experience atoverseas subsidiaries. TAIYO HOLDINGS
expects that he will be able to carry out
these duties in an appropriate manner.
Accordingly, TAIYO HOLDINGS has
selected him as an Audit & Supervisory
Board member.

TAIYO HOLDINGS Annual Report 2019

Main area of expertise:
Finance & Accounting and M&A
Reason chosen for outside Audit &Supervisory Board member
Asako Aoyama has a wealth ofexperience and expertise in finance& accounting and M&A as certified
public accountant and after serving
as an executive officer of companies.
TAIYO HOLDINGS expects that
she will be able to carry out theseduties in an appropriate manner.
Accordingly, TAIYO HOLDINGS has
selected her as an outside Audit &Supervisory Board member.

TAIYO HOLDINGS Annual Report 201927

What is TAIYO HOLDINGS GroupManagement Strategy

Action to ESG Issues

Financial Section and Corporate Information

Corporate GovernanceCorporate Governance at TAIYO HOLDINGS
Construction of Sound Management Structures

Executive officers are granted an extensive scope of

We have a holding company structure. Through its groupdecision-making authority for carrying out their duties, andmanagement and strategic functions, the holding com-

it is believed that this will enable rapid decision making. In

pany aims to develop and improve our strategies while

Members of the Compensation Advisory Committee

Members of the Nomination Advisory Committee

Chair

Chair

Masayuki Hizume (outside director)

Masayuki Hizume (outside director)

Eiji Sato (President and CEO)Eiji Sato (President and CEO)addition, a discretionary Compensation Advisory Commit-

Toshifumi Tamaki (director)

Takayuki Morita (director)

optimizing the allocation of resources. The operating

tee was established as an advisory body to the Board of

Keiko Tsuchiya (outside director)

Toshifumi Tamaki (director)

subsidiaries under the holding company can act promptly

Directors in order to ensure objectivity and transparency inJinichiro Yamada (outside director)

Keiko Tsuchiya (outside director)

and autonomously. This system enables better response todirector and executive officer compensation. A discretion-

Akihito Sakai (outside director)

Jinichiro Yamada (outside director)

customers across various markets while also speeding up

ary Nomination Advisory Committee was also established

Hidenori Sugiura (outside director)

Akihito Sakai (outside director)

decision making and boosting operational efficiency. Its

to ensure objectivity and transparency in the nomination

Asako Aoyama (outside director)

Hidenori Sugiura (outside director)

aim is to increase profits and help us build corporate value.

of directors and Audit & Supervisory Board members. The

Masahiko Todo (attorney)

Asako Aoyama (outside director)

results of resolutions in both of these bodies are reported

Masahiko Todo (attorney)

Basic Philosophy on Corporate Governanceto the Board of Directors. Outside members comprise theIn line with our Management Philosophy and Basic Man-

majorities of both the Compensation Advisory Committee

proceedings in detail. The system enables Audit & Super-

In fiscal 2019, we strove to maintain and enhance theagement Policy, we aim to prosper together with our cus-and the Nomination Advisory Committee, and the chair-visory Board members to conduct adequate monitoring ofeffectiveness of our internal controls, centered on respond-

tomers, regional communities, shareholders, employees,

men of these two committees are selected from among

directors’ execution of their duties.

ing to priority issues, in accordance with the Basic Plan forbusiness partners, and other stakeholders. We also believethese outside members.

The Internal Audit Department, which has a staff of two

Internal Controls for our 73rd accounting period.

The Board of Directors is composed of nine directors,

employees, is fully independent from other Group opera-

seek to generate profits. To this end, we promote manage-

three of whom are outside directors. The Audit & Supervi-

tions. It conducts audits on all departments of the holding

controls targeting all assessment criteria for TAIYO Pharma.

ment transparency and endeavor to fulfill our disclosure

sory Board is composed of four Audit & Supervisory Board

company and operating subsidiaries based on the annual

2. We added business process control and overall IT control

obligations to support our continued prosperity.

members, three of whom are outside auditors. Meetings

audit plan approved by the Board of Directors. Results ofto the assessment criteria for TAIYO INK TRADING (SHEN-of the Board of Directors are held regularly each month,these audits are reported to the Board of Directors and

ZHEN), and commenced operation.

Corporate Governance Structures

but the Board can also hold extraordinary meetings, if

Audit & Supervisory Board.

Our corporate governance system is centered on thenecessary. The Board discusses and resolves important

Board of Directors and the Audit & Supervisory Board,

matters and also oversees the representative director’sInternal Controls

whose members are both approved by resolution at theexecution of duties. Audit & supervisory board members,

We regard the construction of a system of internal controls

Shareholders’ Meeting. We have also adopted a system ofincluding outside auditors, attend most meetings of the

as a critical part of corporate governance. These controls

Risk Management

executive officers with the goal of invigorating the Board of

Board and Executive Committee, which convene on several

include the five components described below:

The Group has studied and instituted ways of mitigating, orDirectors and expediting operational execution.

occasions each year to engage in discussions and monitor

it is necessary for us to embrace social responsibilities andSystem Outline
General Shareholders’ Meeting
Reports toCompensation Advisory
Committee

Appoints andDismisses

Appoints andReports to
Dismisses
Reports toBoard of Directors
Nomination Advisory
Committee

Reports toBoard of Corporate Auditors
AuditsReports to
Appoints andDismisses

Appoints andDismisses

Audits

Accounting Auditors
Cooperation

Cooperation

Cooperation

Audits

3. By making overseas visits and through other measures,
we reviewed internal control documents, striving toenhance the effectiveness of internal controls.

taking appropriate steps in response to, a variety of risks as(1) Keeping all directors and employees informed about oursociated with business activities. One director is appointed

CSR (Corporate Social Responsibility) Philosophy and theas “the director in charge of risk management.” In addition,

Code of Conduct.

the department in charge of risks occurring in the course(2) The appointment of one director as chief complianceAppoints andDismisses

1. We created, put in place and began operating internalof natural work operations evaluates and responds toofficer to chair the Ethics Committee and lead a teamthese risks. Furthermore, the Risk Management Committee

promoting internal business ethics.

conducts risk management for all departments throughout(3) An internal hotline that enables employees to report

the entire Group.

compliance violations or any related concerns to an external lawyer.
(4) Regular reports made by the chief compliance officer to the

President and CEO

Reports to

Instructs

Office of Internal Audits
Executive Officer
Internal Audits
Reports to

Instructs

Departments and Subsidiaries

Board of Directors concerning the status of our ethics andcompliance framework.
(5) Establishment of an independent Internal Audit Department that reports audit findings to the Board of Directors,
the Audit & Supervisory Board, and, where necessary, toaccounting auditors.

28

TAIYO HOLDINGS Annual Report 2019

Relief training with a hook-and-ladder truck

TAIYO HOLDINGS Annual Report 201929

What is TAIYO HOLDINGS GroupManagement Strategy

Action to ESG Issues

Financial Section and Corporate Information

Corporate GovernanceOutside Directors Message
a stock compensation system comprising restricted stock
and performance cash bonus deferral in restricted stock.
This director’s compensation system aims to provide
incentives to executive directors that encourage them to

TAIYO HOLDINGS is supported by its fiery
Board of Directors and passionate human resources.
How can I contribute?

strive for the sustainable growth of our Group’s corporate
value and further promote value sharing between our
executive directors and our shareholders.
Directors other than executive directors and Audit &Firefighting training

compensation.

Starting in fiscal 2019, subsidiary TAIYO INK MFG

In accordance with the framework approved at thebegan formally conducting risk assessment for machinery

General Shareholders’ Meeting, the Board of Directors shalland equipment.
With the goal of preventing accidents and disasters, thedetermine the calculation method, payment timing, distri-subsidiary first identifies potential risks in the workplacebution, and other matters concerning the amount of baseand quantifies their degrees according to internally estab-salary paid to directors, as well as performance cash bonus-

lished risk assessment criteria. Based on the results of thesees, restricted stock, and performance cash bonus deferral

analyses, it then clarifies the order of priority for these risks

in restricted stock awarded to executive directors. Prior toand implements reasonable risk countermeasures. Other

making these decisions, the Compensation Advisory Com-

than risk assessment, the subsidiary also provides risk

mittee, which is chaired by an outside director and includes

prediction training and conducts routine workplace inspec-a majority of outside committee members, shall conduct

tions, in addition to other measures. In fiscal 2019, TAIYO

an objective comparison and verification of compensation

INK MFG reported no occupational accidents at either its

standards using executive compensation survey data fromheadquarters or its Ranzan Facility.

a third-party institution. The committee shall deliberate oncompensation policies and compensation levels and thenExecutive Compensation

issue its recommendation to the Board of Directors, which

At the 71st General Shareholders’ Meeting held on June 21,

shall take the committee’s recommendations into account2017, we received approval for a director’s compensation

when making a final determination.
Compensation paid to Audit & Supervisory Board

system comprising the payment of base salaries, performance cash bonuses, and, as compensation to executive

members is determined through consultations with these

directors (hereinafter refers to directors as defined in eachmembers, within the range approved by the General Share-paragraph of Article 363, Section 1 of the Companies Act),

holders’ Meeting.

Executive compensation for the fiscal year ended March 2019 is shown below.
Amounts of Compensation by Type (Millions of Yen)
Executive Category

Total Amount of
PerformancePerformanceCompensation
Base
based
based stock(Millions of Yen) compensation monetarycompensation

Directors(excluding outside directors)

30

Keiko Tsuchiya

Supervisory Board members receive only base salaries as

446

105

70

compensation

149

Restricted
stock

Retirement
benefits

121—

Number of
Executives

7

effectiveness through surveys, which leads me to believe that

directors since its relatively early days and has received

our governance system is functioning as it should.

high praise for the freshness of this approach, as well as

We outside directors also visit domestic and overseas

for the scale of its initiatives. Personally, I have experiencebases several times each year in order to deepen our own

working as a manager at foreign companies and have spent

understanding of the Company. I feel strongly that our larg-

many years dealing with personnel management affairs, as

est strength is our human resources, who are filled with thewell as corporate organizational and cultural reforms anddesire to firmly contribute to the future of the TAIYO Group.

leader development. Since I assumed office in 2017, I have

We attained growth as a company through our significant

utilized the knowledge and perspectives I gained fromstrengths in solder resists. However, we have not chosen tothese experiences to provide specific and practical advice

simply fall back on this strength and are urgently entering aand proposals through lively Board of Directors discussions.

new phase of wide-ranging expansion into new fields, includ-

In addition to the Board of Directors, I am a member of theing full-scale entry into the pharmaceutical business. I believe

Nomination Advisory Committee and the Compensationthat efforts like these accurately represent our approach ofAdvisory Committee, which the Company established vol-moving forward as a single, unified company.

untarily. Through these roles, I strive to actively participate inmanagement through constructive dialogue.

9

9

—

—

—

—

2

Outside officers

59

59

—

—

—

—

7

We are also taking the lead in terms of ESG activities. For
example, the cafeterias in the Ranzan Facility and at head-

TAIYO HOLDINGS’ Board of Directors includes experts

quarters are designed based on concepts related to reduc-from a variety of fields and is characterized by its easy-to-

ing our burden on nature, local production and consump-speak atmosphere that allows us to candidly share our opin-

tion of food and creating an environment fit for our employ-ions and hold lively discussions. One example that comes toees. From a global perspective, I believe you can sense themind is when we discussed medium- to long-term plans; thedesire we have to earnestly create good societies both inside

discussion became so heated that it was not possible to con-and outside the Company from our promotion of researchfine it to our pre-set agenda. Board of Directors discussions

concerning the use of insects for livestock feed, which is one

also frequently end up being deeper than we expected, andpossible solution to future population explosions. The TAIYO

we often need to extend meetings or agree to take up theGroup is conducting human resource development aimed

discussion again at the next meeting. Outside directors whoat ensuring that all of its members can work independently

are not involved in business execution also raise issues by

and autonomously and identifies as a corporate group thatsharing their perspective, which creates differences in opin-

creates organizations, corporate atmospheres and unique

ion that sometimes lead to constructive discussions. I believe

cultures that allow these personnel to flourish.

this serves as evidence that the members of our Board ofAudit & Supervisory
Board members(excluding outside Audit &Supervisory Board members)

TAIYO HOLDINGS Annual Report 2019T

AIYO HOLDINGS has been actively appointing outside

Moving forward as a member of the management team,Directors are committed to pursuing governance that is ideal

I intend to continue offering support based on my point offor TAIYO HOLDINGS and are capable of fulfilling related

view as an outside director that will help our governanceresponsibilities. Furthermore, our Board of Directors holds

function more effectively, meeting the expectations of all of

regular reviews for its outside directors and evaluates its own

our shareholders, as well as the rest of our stakeholders.

TAIYO HOLDINGS Annual Report 201931

What is TAIYO HOLDINGS GroupManagement Strategy

Action to ESG Issues

Financial Section and Corporate Information

ESG
Since its establishment in September 1953, TAIYO

through its CSR organization, which comprises various

Compliance

HOLDINGS has continued to grow thanks to the trust

management systems and committees. The directors and

The TAIYO Group continuously strives to increase its cred-

Implementation of Supplier Evaluations and
On-Site Audits

placed in it by its stakeholders, including its shareholders,

employees of the TAIYO Group will strive to create a com-

ibility by promoting activities that strengthen its internalThis fiscal year, the Group continued conducting on-site

customers, and business partners.

pany that is trusted by society and is actively involved inorganization and increase ethical and compliance aware-

audits in cooperation with suppliers in order to build andCSR activities.

ness among all its employees.

strengthen relationships of trust. Audits are conducted by

In order to continue to respond to that trust and growtogether, all TAIYO Group directors and employees will

Our internal Compliance Promotion Organization spear-

fulfill their corporate social responsibilities by taking a con-

CSR Philosophy

heads awareness and educational activities to verify that

Department and Quality Assurance Division, and in somesistently forward-looking approach to business activities

We will fulfill our corporate social responsibilities, which

employees understand the TAIYO Group’s CSR Philosophy

cases employees from manufacturing, technology andand observing ethics and laws.

include complying with the law, protecting the environ-and Code of Conduct and to continuously ensure thatdesign divisions also participate. Audits are conducted

ment, ensuring thorough quality management, and con-activities are aligned with the spirit of our CSR Philosophy

with the aim of enhancing the quality of raw materials andtributing to society.

and Code of Conduct. In fiscal 2019, the Group made cer-secondary materials.

In order to fulfill these responsibilities, TAIYO Grouphas established a corporate CSR Philosophy and a Codeof Conduct, and is involved in a variety of CSR activities

tain highly important activities obligatory. These included
the construction of a system for internal consultation and

Relationship with Local Communities and Society

Code of Conduct

reporting, as well as the system’s response status, and com-

Working as a member of society to contribute to social

We will observe the following code to put the Group’s CSR Philosophy into practice.

pliance education. Having recognized delays in putting

development is also a vital corporate responsibility. Allin place parts of the system, we will continue with thesemember companies of the TAIYO Group partner to conduct

efforts in fiscal 2020.

wide-ranging activities to ensure our ability to preserve

1. Ethical and Legal Compliance
We will observe laws and other social norms, and understanding the spirit thereof, will act openly and fairly.
2. Workplace Environment
We will respect employees’ human rights, and create a workplace that is fair and free of discrimination.
3. Fair Business Dealings
We will deal with all our business partners in an honest manner and conduct business with them based on impartial andfair business conditions.
4. Respect for Stakeholders
We will always conduct business activities with respect for the
viewpoints of all our stakeholders, and disclose information ina timely and appropriate manner.
5. Ensuring Confidentiality
We will work to ensure the protection of confidential information related to our business partners, the company itself, andany individual.
6. Ensuring Quality (Quality Policy)
We will ensure that we always provide safe, quality productsthat satisfy our customers.

7. Protecting the Environment(Basic Environmental Philosophy)
We will endeavor to protect the environment as part of theperformance of our social responsibility, and will engage inbusiness activities that are in harmony with the environment.
8. Ensuring Information Security(Basic Information Security Philosophy)
In the interests of customer trust and satisfaction, we will work
to maintain or improve the confidentiality, integrity, and availability of all our information assets.
9. Social Contributions
As members of society, we will engage in activities that contribute to society.
10. Protecting Intellectual Property
We will take appropriate precautions to protect Taiyo Group’s
intellectual property rights, and those of third parties.
11. Exclusion of Anti-social Forces
We will take a resolute stance towards anti-social forces andwill not respond in any way to illegal or improper demands.

Management Philosophy

Communication withstakeholders

CSR Philosophy

Requirements/expectations
Share price, environmental protection,
high-functionality products

Code of Conduct
Management

Provision
Social contribution, dividends, fairbusiness dealings, tax payment

Information disclosure

Internal controls
Green procurement,
environmentallyfriendly products

Risk management,
information security

Compliance

Website, CSR report, business reportSociety

Environment
Evaluation
Rating, awards, degree ofcustomer satisfaction

TAIYO HOLDINGS Annual Report 2019

Environment management,
substance reduction,
prevention of global warming

precious, limited resources for future generations, and to

Relationship with Shareholders

exist as a company that grows together with, and enriches

Through profit dividends and appropriate communica-

the hearts and minds of, everyone with whom we interact.

tion, we contribute to the wealth and prosperity of all
Social Contribution Goals of the TAIYO Groupour shareholders.

Passing on irreplaceable earth for future generations!

Profit Dividends
TAIYO HOLDINGS views cash-based profit returns to its
investors as part of its core strategy and distributes sustain-

Socialcontribution

Employment,
human rights,
occupational safety

Embracing regional
exchange!

Environment
conservation

Assisting people inneed, including in
the face of disaster!

able and stable profit returns at a high rate. Specifically,
we have established shareholder’s equity dividend ratio
as a target indicator and aim for a medium- to long-termon consolidated earnings.

Dividend on equity
ratio (%)

5.7

6.5

5.6

6.5

Humanitarianaid

Community
contributions

Taxes

shareholder’s equity dividend ratio of 5% or higher based

Transitions in shareholder’s equity dividend ratio (consolidated)
FY2015 FY2016 FY2017 FY2018 FY2019
Dividend per share
90
110
120.1
160.2
130.2
(Yen)
Sustained
development/stabilization of management

Stakeholders(Shareholders, customers, business partners,
regional communities, employees)

32

teams made up primarily of personnel from the Purchasing

Educationandacademics

Supporting our
future, thechildren!

Securing
appropriate
profits!

Social welfareArts,
culture,sportsFostering enrichedhearts and minds!

5.3
Supporting the independence and skills developmentof persons with disabilities!

Relationship with Suppliers
Based on Green Procurement Standards, we practice theprocurement of raw materials that are environmentally-conscious, safe, and contribute to stable quality.

TAIYO HOLDINGS Annual Report 2019

33

ESG

Financial Section

Social Contribution Activities
Blood donation supporters

business administration, we act by sharing this awarenessamong executives and all employees.

The TAIYO INK main office encourages employees toparticipate in blood donation activities. Also, each year

Contribution to Sports Promotion

employees working at other locations in the TAIYO GroupIn January 2019, we reached an affiliation agreement withcooperate with visiting blood donation trucks.

Nozomi Okuhara, a professional Badminton player.
Based on its Management Philosophy, TAIYOHOLDINGS has consistently worked to create products that
contribute to the world at large. It is striving to establish a“fun society” through sports-related social contributions,
including participation in and cosponsorship of local sports
competitions, as well as support for local sports organizations and young athletes, and activities that contribute to
local communities.

Blood donation truck visiting a TAIYO officeCommunity Contributions
Social Studies Class Tours
At TAIYO INK MFG headquarters, we run plant tours and achemistry lab for social studies classes at a local elementary
school. Supplementary reading materials published forthird and fourth graders by the Ranzan Town Board of
Education mention TAIYO INK MFG as a topic for a social

Eiji Sato (President and CEO) and Nozomi Okuhara

studies class tour. We will continue offering children opportunities for learning and experiences that help cultivate

Environmental Achievements

future talent with local roots.

Recognized by Apple (USA) as a New Renewable
Energy Project Supplier
On April 10, 2018, Apple announced nine companies thatwill participate in initiatives aimed at achieving 100%
Renewable Energy as manufacturing partners. TAIYO INK
was selected as one of these nine companies and has promised to conduct its manufacturing using 100% clean energy.
In addition to its two Ranzan-machi floating solar power
plants, the Group established five power plants in 2019,bringing its total number of active floating solar power

Local elementary students listen to a lecture

plants to seven.

Basic Policy on Environmental Activities
In our CSR Code of Conduct, the Group identifies environ-36

Six-Year Summery

mental protection as our basic environmental philosophy,

38

Management’s Discussion and Analysis

stating: “We will endeavor to protect the environment as

42Consolidated Balance Sheetpart of our social responsibilities and will engage in busi-

44

Consolidated Statement of Income

45

Consolidated Statement of Comprehensive Income

46

Consolidated Statement of Changes in Equity

47

Consolidated Statement of Cash Flows

ness activities that are in harmony with the environment.”
We recognize protecting people’s health and safety, as
well as our irreplaceable planet and its environment,
through our environmental management system as a key

Ranzan Onuma Floating Solar Power Plant

management issue. To implement environmentally friendly

34

TAIYO HOLDINGS Annual Report 2019TAIYO HOLDINGS Annual Report 201935

What is TAIYO HOLDINGS GroupManagement Strategy

Action to ESG Issues

Financial Section and Corporate Information

Financial Section

Six-Year Summary
TAIYO HOLDINGS CO., LTD. and Consolidated Subsidiaries
The years ended March 31

2014

2015

2016

2017

2018

2019
Millions of yen

For the year:
Net sales
Cost of sales
Selling, general and administrative expenses
Operating income
Profit attributable to owners of parent
Depreciation
Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities

44,224
28,348
8,307
7,568
4,930
1,181
7,020
(3,839)2,350

48,26028,865
10,139
9,254
6,667
1,411
9,232
(2,913)(9,919)49,84327,355
11,522
10,964
7,796
1,891
10,546(6,750)(2,740)47,866
26,22012,424
9,221
6,398
2,485
9,042
(1,063)
20,342

52,241
27,304
13,59911,337
4,856
2,284
8,100
(24,161)
11,31959,38933,043
18,247
8,099
4,396
3,357
5,907
(5,487)(12,001)

At year-end:
Total assets
Total property, plant and equipment
Total liabilities
Non-controlling interests
Total net assets

58,36914,375
15,713
2,045
42,65561,241
16,86519,9292,238
41,312

65,464
19,644
20,2142,135
45,25092,386
18,38920,540782
71,846

111,490
17,92338,467363
73,023

105,666
22,31335,146337
70,520Yen

Per share data:
Basic earnings
Dividend
Net assets

193.83120.001,596.45

264.0590.00
1,703.14

337.99110.001,865.94

266.46120.102,468.99

152.71130.202,475.36

168.55160.202,520.68%

Ratios:Operating margin
Return on equity
Equity ratio

17.1
12.8
69.6

19.2
16.7
63.8

22.0
19.0
65.9

19.3
11.2
76.9

13.6
6.2
66.4

21.7
6.8
65.2

SharesCommon stock:Total issued shares

27,464,000

Net Sales

Operating Income and Operating Margin(Millions of yen)

(Millions of yen)

59,38960,00045,00044,224

48,260 49,843 47,866

30

11,337

10,96452,241

27,485,600

7,796

8,000

9,254

9,221
8,099 25

7,568

6,000

21.7

3,000

4,000

4,856

266.46193.8319.3

19.2
15,000

20

17.1

15

(%)

400

20

16.7

264.05

22.0

6,000

30,000

(yen)

19.0

6,398

337.994,930

28,910,436

28,865,194

Return on Equity(Millions of yen)

6,667
9,000

28,841,100

Profit Attributable to Owners of Parent andBasic Earnings Per Share(%)

12,00027,464,000

300

15

200

10

4,396

168.55

12.8

11.2
6.8

152.71

2,000

6.2

100

5

0

0

13.6
0

2014

2015

2016

2017

(Years ended March 31)

2018

2019

0

2014

2015

2016

2017

TAIYO HOLDINGS Annual Report 2019

2019

0

0

2014

(Years ended March 31)(Years ended March 31)
Operating Income

36

2018

Operating Margin

2015

2016

2017

2018

2019

Profit Attributable to Owners of Parent
Basic Earnings Per Share

2014

2015

2016

2017

2018

2019

(Years ended March 31)

TAIYO HOLDINGS Annual Report 201937

What is TAIYO HOLDINGS GroupManagement Strategy

Action to ESG Issues

Financial Section and Corporate Information

Financial Section

Management’s Discussion and Analysis
This document presents consolidated results for fiscal year

tronics Materials and Medical and Pharmaceuticals, based

Segment Information

2019, comprising the accounts of TAIYO HOLDINGS andon operating subsidiaries.

Information regarding net sales, profit or loss, assets and liabilities, and other items by reportable segment
FY2018its domestic and overseas subsidiaries for the year ended(Millions of yen)

Electronics materials:

March 31, 2019.

Sales of PKG board materials benefitted from brisk demand

Operating Results

for memory-related materials. However, overall sales

Net sales for the consolidated fiscal year ended March 31,

were hampered by factors in the electronic components

2019 were ¥59,389 million (up 13.7% year on year). Oper-

industry, including slowing growth in the smartphone andating income was down 28.6% to ¥8,099 million, ordinary

tablet markets, customer inventory adjustments due toprofit was down 28.4% to ¥8,014 million and profit attribut-

trade friction between the U.S. and China, and the steep

able to owners of parent was down 9.5% to ¥4,396 million.

rise in material prices caused by the strengthening of environmental regulations in China. As a result, net sales fell
3.5% year on year to ¥48,086 million, and segment profit

The consolidated results were as follows:
Net sales¥59,389(Millions of yen)fell 13.3% year on year to ¥10,501 million. Segment assets(up 13.7%)

declined 3.2% to ¥50,747 million, reflecting reductions in

Operating income

8,099 (down 28.6%)

Ordinary profit

8,014 (down 28.4%)

Profit attributable to ownersof parent

4,396(down 9.5%)

Net sales
External sales
Inter-segment sales or transfers
Total
Segment income
Segment assets
Other items
Depreciation (Note 2)
Increase in property, plant andequipment and intangible assets

Electronics
materials

Reportable segment
Medical and pharmaceuticals business

49,854—49,854
12,11452,411819—
819
826,58050,673—50,67312,12378,992

1,567
3
1,570
97
2,819

52,241
3
52,244
12,22081,811

1,331

353

1,684

145

1,830

993

20,94821,942

195

22,137

Other(Note 1)

Total

Total

FY2019(Millions of yen)cash/cash equivalents and trade receivables.

Medical and Pharmaceuticals:
Established in August 2017, TAIYO Pharma Co., Ltd.
acquired marketing authorizations, including marketing

Reasons for decline in profit attributable to ownersof parent:

and manufacturing rights, on 13 long-listed products andIn April 2018, we acquired all outstanding shares in Microin January 2018. The long-listed products were gradually

Network Technologies Corp., with the aim of overhaulingtransferred into several product groups and the transfer

our IT systems. During its first year as our consolidatedof all products to TAIYO Pharma Co., Ltd. was completed

subsidiary, the company performed below the level ex-

in the consolidated fiscal year under review. This resulted

pected. Accordingly, we estimated the company’s businessin net sales of ¥7,661 million and a segment loss of ¥351

value prudently and conservatively, and wrote off unamor-

million. We have not compared the fiscal year under

tized goodwill.

review to the previous fiscal year due to the difference

fully launched the medical and pharmaceutical businessNet sales
External sales
Inter-segment sales or transfers
Total
Segment income (loss)
Segment assets
Other items
Depreciation (Note 2)
Increase in property, plant andequipment and intangible assets

Electronics
materials

Reportable segment
Medical and pharmaceuticals business

48,086—48,086
10,50150,747

7,661
—
7,661
(351)
28,31355,747—55,747
10,14979,061

3,642
106
3,748
(175)
5,539

59,389106
59,496
9,973
84,600

1,278

1,453

2,731

179

2,910

4,733

706

5,440

1,484

6,924

Other
(Note 1)

Total

Total

(Notes) 1. “Other” indicates business segments that we do not include among the reportable segments. Examples include our business of manufacturingdyes, pigments, and other chemical products; our business of developing software; and our business of generating renewable energy.
2. Depreciation does not include amortization of goodwill.

in operating periods. Segment assets increased 6.5% toResults by segment were as follows:¥28,313 million, reflecting increases in trade receivables

The Group divides its business into two segments, Elec-and inventory assets.

Total Assets

Total Liabilities(Millions of yen)

Total Net Assets(Millions of yen)

120,000

111,490105,666

Equity Ratio(Millions of yen)

38,46740,000(%)

80,00071,846 73,023 70,520

35,146

80

76.9

69.6

63.8

65.9

2015

2016

65.2

66.4

2018

2019

92,38690,00060,00030,00058,369 61,241

65,46420,00030,000

0

2014

2015

2016

2017

TAIYO HOLDINGS Annual Report 2019

2018

2019

0

15,7132014(As of March 31)

2015

2016

2017

60

42,655 41,312 45,250

19,929 20,214 20,540

10,000(As of March 31)

38

60,00020182019

40,00040

20,000

20

0

2014

(As of March 31)

2015

2016

2017

2018

2019

0

2014

2017

(As of March 31)

TAIYO HOLDINGS Annual Report 201939

What is TAIYO HOLDINGS GroupManagement Strategy

Action to ESG Issues

Financial Section and Corporate Information

Financial Section

Financial Position(2) Procurement risk

(7) Exchange rate risk

The table below shows year-on-year changes in assets, liabilities and net assets, as well as the main factors for these changes.

We procure many of our raw materials from outside theIn the electronics materials segment, overseas sales accountGroup. If these external suppliers suffer a disaster or otherfor a large share of total net sales, and we often denomi-

problems in the supply chain arise, our production activi-nate sales prices in foreign currencies. As such, exchangeties may be impaired, in turn affecting our performance.

rate fluctuations may impact our performance. In our case,

Current assets

Previous year
(Million yen)

Fiscal year
under review(Million yen)

Change(Million yen)

¥ 68,373¥ 58,136¥(10,236)

Non-current assets

43,11647,529Main factors (YoY change)

Cash and deposits down ¥13,247 million, merchandiseand finished goods up ¥1,176 million, and raw materials and supplies ¥1,233 million.
Buildings and structures up ¥900 million, machinery,equipment and vehicles, net up ¥1,213 million, andconstruction in progress up ¥2,249 million.

4,412(3) Risk of rise in raw material prices
We use many kinds of raw materials. Some of these materi-(8) Risk of price fluctuations in key products

als are derived from crude oil. Oil market trends may cause

With PWB production increasingly shifting to China andTotal assets

111,490105,666(5,824)the price of some raw materials to rise, which may in turnelsewhere in Asia, the electronics materials segment’s

Total liabilities

38,46735,146(3,320)Long-term loans payable down ¥3,479 million.

affect our performance.

solder resists are subject to intense price competition with

(2,503)

Profit attributable to owners of parent down ¥4,396
million, dividends of surplus down ¥4,627 million, andpurchase of treasury shares down ¥1,992 million.

(4) Technological innovation risk

Total net assets

73,02370,520In our electronics materials segment, we rely heavily on
PWB materials—especially solder resists. The majority of

local and Japanese-owned firms. Solder resist prices may
be driven down further by competition over PWB prices.
Since solder resists are a mainstay product for us, a decline
in their prices may impact our consolidated performance.

Cash Flows

the segment’s sales stem from manufacturing and mar-

The following table shows the cash flows in the consolidated fiscal year under review, as well as the factors behind theseketing these items. Technological progress may generate(9) Demand risk

cash flows.

manufacturing techniques that do not rely on our productsTrends in the electronics component market affect demand(such as techniques for making electronic parts without

for the electronics materials segments’ main products, and

PWBs or making PWBs without solder resists). If suchmay, by extension, impact our consolidated performance.

Net cash provided by (used in)operating activities

Previous year
(Million yen)

Fiscal year
under review(Million yen)

¥ 8,100¥ 5,907

Net cash provided by (used in)investing activities
Net cash provided by (used in)financing activities
Net increase (decrease) in cash
and cash equivalents
Cash and cash equivalents at
end of period(24,161)(5,487)

11,319(12,001)(4,844)(11,715)

41,81630,101Main factors

Cash inflows included ¥6,703 million in profit before income taxes and¥3,357 million in depreciation. Payment of income taxes resulted in acash outflow of ¥3,757 million.
Cash outflows included ¥4,183 million for acquisition of property, plantand equipment and ¥1,227 million for acquisition of intangible assets.
Cash outflows included ¥4,625 million in payment of dividends and¥6,622 million in repayments of long-term loans payable.

techniques were to be widely adopted, demand for our
products would plummet.
This eventuality is unlikely to occur in the foreseeable
future given the attributes, operability, and economic
viability of the products in question. Nonetheless, we havemade exploring the potential for new PWB techniques a
top priority in our R&D efforts.

(5) Patent risk
In the electronics materials segment, we use patents and(10) Side-effects of pharmaceuticals
The medical and pharmaceuticals segment markets pharmaceuticals in compliance with all applicable laws and standards.
Nonetheless, once sold, the segment’s pharmaceuticals may
end up being associated with side-effects. Unanticipatedside-effects could potentially impact our performance.

(11) Pharmaceutical regulation
The medical and pharmaceuticals segment is vulnerable tochanges in the regulatory environment, including revisions

Business Risks(1) Credit riskother forms of intellectual property rights to protect our

The following are the main risks that may influence theWe have a large customer base, and we avoid concen-

products and technologies from unauthorized use. However,business development of the Group. The information below

trating our receivables onto a handful of large customers.

we may not always succeed in this regard. For example, aincludes projections and other forward-looking statements.

Nonetheless, if our debtors fall into financial difficulties,

patent application might ultimately fail to give us the rights

These forward-looking are based on information available

the resulting bad debt may negatively affect our consoli-

we require, or someone might file a request for the patent(12) Risk of non-current asset loss

to us as of the end of the consolidated fiscal year under

dated performance.

to be invalidated. Moreover, if we infringe upon another’s

If group assets markedly decline in fair value, or if theintellectual property rights, we might be required to pay

Group’s businesses become unprofitable, we would

royalties or a vast amount of compensation. Such a scenario

apply loss accounting and record impairment loss for thewould adversely affect our consolidated performance.

non-current assets. This scenario could potentially impact

review. They are not guarantees of future performance.
Cash Flows

Dividend per Share and Dividend on Equity Ratio
Net cash provided by operating activities
Net cash used in investing activities(Millions of yen)

30,000

(Yen)

(%)

200.0

10.0

7.8
15,000

7,020

9,232

10,546

0(3,839) (2,913)

9,042

5,907

-30,000

120.0
100.0

(1,063)

5.7

6.5
110.0

90.0

120.1

6.5

5.6

130.2

5.3

2016

and we are expanding sales globally—particularly in China,
5.0

2017

(Years ended March 31)

TAIYO HOLDINGS Annual Report 20192018

Taiwan, South Korea, and the ASEAN regions. Risks particu-

2.5

consolidated performance. Examples of such country-specific risks include terrorist incidents, political strife, economic(24,161)2015

bases in Japan, Taiwan, South Korea, China, and the U.S.,

lar to these countries may impact our business strategy or
50.0

2014

7.5

(5,487)(6,750)(6) Country-specific risks
In the electronic materials segment, we have production

160.2

150.0

8,100

-15,000

40

a high yen usually spells lower revenue and profits.

2019

0.0

2014

(Years ended March 31)

2015

2016

2017

2018

2019

0.0

turbulence, natural disasters, epidemics, or sudden changes

to government policies regulating pharmaceutical prices orreforms to the healthcare insurance system. Such changes
may impact our performance.

the Group’s performance and financial position.
We intend to further expand our market share in solder
resist materials, but we also want to offset the above risks.
Accordingly, we will keep developing new products thatcan serve as a secondary source of revenue. We will alsoestablish a business structure to help us bring new innovations to market as quickly as possible. Steadily implemented measures along these lines will enable us to achievesustained growth.

in the country’s legal, regulatory, or tax environment.
TAIYO HOLDINGS Annual Report 201941

What is TAIYO HOLDINGS GroupManagement Strategy

Action to ESG Issues

Financial Section and Corporate Information

Financial Section

Consolidated Balance SheetTAIYO HOLDINGS CO., LTD. and Consolidated Subsidiaries
March 31, 2019 and 2018

(Millions of yen)

As of March 31, 2018

(Millions of yen)

As of March 31, 2019

Assets

As of March 31, 2018

Current assets

Current liabilities¥ 44,588¥ 31,340

Notes and accounts receivable—trade

15,50916,610

Short-term loans payable

2,145

4,011

Merchandise and finished goods

3,499

4,676

Current portion of long-term loans payable

6,116

3,852

405

495

Accounts payable—other

1,853

4,100

Raw materials and supplies

2,042

3,275

Income taxes payable

1,448

610

Other

2,456

1,825

Provision for bonuses

510

499

Allowance for doubtful accounts

(127)

(87)

Other

648

1,353

68,373

58,136

20,491

20,714

Deferred tax liabilities

1,458

1,190

Long-term loans payable

15,923

12,443Retirement benefit liability

116

117

Asset retirement obligations

397

570

Other

79

109

17,975

14,431

38,46735,146

Capital stock

9,232

9,331

Capital surplus

14,717

14,817Retained earnings

47,41547,229Cash and deposits

Work in process

Total current assets
Non-current assets
Buildings and structures, net

9,990

10,891

Machinery, equipment and vehicles, net

2,791

4,005

989

900

3,906

4,022

240

2,489

5

3

17,92322,313Tools, furniture and fixtures, net
LandConstruction in progress
Other
Total property, plant and equipment

Goodwill

674

691

Sales rights

20,555

19,732589

1,013

21,81821,436

Total intangible assets

Total current liabilities

¥

7,769

¥

6,285

Total non-current liabilities
Total liabilities

Net assets

Intangible assets

Other

Notes and accounts payable—tradeNon-current liabilities

Property, plant and equipment

Shareholders’ equity

Treasury shares
Total shareholders’ equity

Investments and other assets(121)(2,042)

71,244

69,336

321

94

2,231

2,125

Shares of subsidiaries and associates

19

295

Deferred tax assets

264

225

Valuation difference on available-for-sale securities

Retirement benefit asset

326

319

Foreign currency translation adjustment

1,084

730

Other

677

1,006

Remeasurements of defined benefit plans

922

Allowance for doubtful accounts

(144)

(193)

Total accumulated other comprehensive income

1,415

846

Total investments and other assets

3,374

3,779

Non-controlling interests

363

337

43,11647,529Total net assets

73,02370,520¥111,490¥105,666¥111,490¥105,666

Investment securities

Total non-current assets
Total assets

42

As of March 31, 2019

Liabilities

TAIYO HOLDINGS Annual Report 2019

Accumulated other comprehensive income

Total liabilities and net assets

TAIYO HOLDINGS Annual Report 201943

What is TAIYO HOLDINGS GroupManagement Strategy

Action to ESG Issues

Financial Section and Corporate Information

Financial Section

Consolidated Statement of Income

Consolidated Statement of Comprehensive Income

TAIYO HOLDINGS CO., LTD. and Consolidated Subsidiaries

TAIYO HOLDINGS CO., LTD. and Consolidated Subsidiaries

March 31, 2019 and 2018

March 31, 2019 and 2018

(Millions of yen)

Fiscal year ended
March 31, 2018

(Millions of yen)

Fiscal year ended
March 31, 2019

Fiscal year ended
March 31, 2018

Net sales¥52,241¥59,389

ProfitCost of sales

27,30433,043

Other comprehensive income

Gross profit

24,937

26,346

Selling, general and administrative expenses

13,599Operating income

11,337

Fiscal year ended
March 31, 2019

¥4,925¥4,443

Valuation difference on available-for-sale securities

125

(227)

18,247

Foreign currency translation adjustment

(45)

(358)

8,099

Remeasurements of defined benefit plans, net of tax

8

12

Total other comprehensive income

89

(573)

5,014

3,869

Non-operating income

Comprehensive income

Interest income

78

81

Dividend income

18

23

Comprehensive income attributable to owners of parent

5,333

3,827

Subsidy income

45

40

Comprehensive income attributable to non-controlling interests

(318)

42

Other

71

70

Total non-operating income

214

215

Interest expenses

127

196

Commission expenses—

23

Foreign exchange losses

208

21

Loss on investments in partnership

—

32

Other

17

25

Total non-operating expenses

352

300

11,1998,014

Subsidy income

24—

Gain on sales of investment securities

16—

Total extraordinary income

40

—

3,278

—

Impairment loss

—

1,311

Other

19

—

3,298

1,311

Profit before income taxes

7,941

6,703

Income taxes—current

3,040

2,387

Income taxes—deferred

(24)

(127)

Total income taxes

3,016

2,259

Profit

4,925

4,443

69

46

¥ 4,856¥ 4,396

Comprehensive income attributable to

Non-operating expenses

Ordinary profit
Extraordinary income

Extraordinary losses
Amortization of goodwill

Total extraordinary losses

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

44

TAIYO HOLDINGS Annual Report 2019TAIYO HOLDINGS Annual Report 201945

What is TAIYO HOLDINGS GroupManagement Strategy

Action to ESG Issues

Financial Section and Corporate Information

Financial Section

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows

TAIYO HOLDINGS CO., LTD. and Consolidated Subsidiaries

TAIYO HOLDINGS CO., LTD. and Consolidated Subsidiaries

March 31, 2019 and 2018

March 31, 2019 and 2018

(Millions of yen)
Fiscal year ended March 31, 2018

Balance at beginning of current period
Changes of items during period
Dividends of surplus
Profit attributable to owners of parent
Purchase of shares of
consolidated subsidiaries
Issuance of new shares
Purchase of treasury shares
Disposal of treasury shares
Net changes of items other thanshareholders’ equity
Total changes of items during period
Balance at end of current period

Capital stock

Capital surplus

9,171¥14,824

Shareholders’ equity
Retained earnings

Treasury shares¥46,308

Total shareholders’ equity¥(178)¥70,125(3,748)4,856(3,748)
4,856

(167)
60

60
9,232

(167)

60

(106)
¥14,717

1,107¥47,415

(0)
57

121
(0)
57

56
¥(121)

1,118¥71,244(Millions of yen)

Accumulated other comprehensive income
Total accumulated Non-controlling
Valuation
Foreign currency Remeasurements
otherdifference oninterests
translationof defined benefit
comprehensive
available-for-saleadjustment
plansincomesecurities

Balance at beginning of current period
Changes of items during period
Dividends of surplus
Profit attributable to owners of parent
Purchase of shares of
consolidated subsidiaries
Issuance of new shares
Purchase of treasury shares
Disposal of treasury shares
Net changes of items other thanshareholders’ equity
Total changes of items during period
Balance at end of current period

¥195

¥ 741

¥0

¥ 938

¥ 782

Total net assets¥71,846(3,748)
4,856
(167)
121
(0)
57

125

342

8

476

(418)

58

125
¥321

342
¥1,0848¥9476¥1,415

(418)
¥ 363

1,177
¥73,023(Millions of yen)

Fiscal year ended March 31, 2019

Balance at beginning of current period
Changes of items during period
Dividends of surplus
Profit attributable to owners of parent
Issuance of new shares
Purchase of treasury shares
Disposal of treasury shares
Effect resulting from change of accounting
period of consolidated subsidiaries
Net changes of items other thanshareholders’ equity
Total changes of items during period
Balance at end of current period

Capital stock

Capital surplus

9,232¥14,717

Shareholders’ equity
Retained earnings

Treasury shares¥47,415

Total shareholders’ equity¥ (121)¥71,244(1,992)71(4,627)
4,396
199(1,992)71(4,627)
4,396
99

99

44

99
9,331

99
¥14,81744(186)¥47,229(1,921)¥(2,042)(1,907)¥69,336(Millions of yen)

Accumulated other comprehensive income
Valuation
Total accumulated Non-controlling
Foreign currency Remeasurements
difference on
otherinterests
translationof defined benefit
available-for-salecomprehensive
adjustment
plans
securities
incomeBalance at beginning of current period
Changes of items during period
Dividends of surplus
Profit attributable to owners of parent
Issuance of new shares
Purchase of treasury shares
Disposal of treasury shares
Effect resulting from change of accounting
period of consolidated subsidiaries
Net changes of items other thanshareholders’ equity
Total changes of items during period
Balance at end of current period
46

TAIYO HOLDINGS Annual Report 2019

¥ 321

¥1,084¥ 9¥1,415(Millions of yen)

¥363

Total net assets¥73,023(4,627)
4,396
199(1,992)
71
44

(227)

(354)

12

(569)

(26)

(595)

(227)
¥ 94

(354)
¥ 730

12
¥22

(569)
¥ 846

(26)
¥337

(2,503)¥70,520

Cash flows from operating activities
Profit before income taxes
Depreciation
Impairment loss
Amortization of goodwill
Commission expenses
Loss (gain) on investments in partnership
Loss (gain) on sales of short-term and long-term investment securities
Subsidy income
Decrease (increase) in retirement benefit asset
Increase (decrease) in retirement benefit liability
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Interest and dividend income
Interest expenses
Decrease (increase) in consumption taxes refund receivable
Decrease (increase) in notes and accounts receivable—trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable—trade
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Proceeds from subsidy income
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Payments for sales of shares of subsidiaries resulting in change in scopeof consolidation
Purchase of shares of subsidiaries resulting in change in scope of consolidation
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Purchase of treasury shares
Cash dividends paid
Dividends paid to non-controlling interests
Proceeds from issuance of common shares
Payments from changes in ownership interests in subsidiaries that do not
result in change in scope of consolidation
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

Fiscal year ended
March 31, 2018

Fiscal year ended
March 31, 2019

¥ 7,941
2,284
—
3,535
—
—
(16)
(24)
15
(10)
14
72
(97)
127
(1,759)(2,030)(1,508)1,653(171)
10,02592(123)
24(1,918)
8,100¥ 6,703
3,357
1,311
350
23
32
—
—
18
1
(72)
18
(105)
196
1,571
(1,205)(2,478)(1,341)
1,396
9,778
106
(219)
—
(3,757)
5,907(4,379)3,846(1,381)(21,192)(1,021)(2,103)
3,536(4,183)(1,227)
(597)

(10)

—

—
(22)
(24,161)

(844)
(66)
(5,487)

1,097
15,100(502)—(3,748)
(85)
—

1,254
—
(6,622)(2,016)(4,625)
(68)
77

(538)

—

(3)
11,319(102)(4,844)
46,661¥ 41,816(1)(12,001)(134)(11,715)
41,816¥ 30,101TAIYO HOLDINGS Annual Report 201947

What is TAIYO HOLDINGS GroupManagement Strategy

Action to ESG Issues

Financial Section and Corporate Information

Corporate Information
Domestic Network

Company Overview (As of March 31, 2019)TAIYO HOLDINGS CO., LTD. Head Office

TAIYO Fine Chemicals Co., Ltd.

16F, Metropolitan Plaza Bldg., 1-11-1 Nishi-Ikebukuro, Toshima-ku,
Tokyo 171-0021, Japan35-3 Akaizawa, Nihonmatsu-shi, Fukushima 964-0982, JapanTAIYO HOLDINGS CO., LTD. Ranzan Facility

388 Ohkura, Ranzan-machi, Hiki-gun, Saitama 355-0222, JapanTAIYO GREEN ENERGY CO., LTD.

388 Ohkura, Ranzan-machi, Hiki-gun, Saitama 355-0222, JapanTAIYO Pharma Co., Ltd.

TAIYO INK MFG. CO., LTD.
900 Hirasawa, Ranzan-machi, Hiki-gun, Saitama 355-0215, Japan

3F, Otemachi Financial City Grand Cube, 1-9-2 Otemachi, Chiyoda-ku,
Tokyo 100-0004, JapanTAIYO INK MFG. CO., LTD. Kitakyushu Plant

TAIYO Pharma Tech Co., Ltd.

1-1 Kurosakishiroishi, Yahatanishi-ku, Kitakyushu-City Fukuoka
806-0004, Japan

4-38, Aketa-cho, Takatsuki-shi, Osaka 569-0806, Japan

Micro Network Technologies Corp.

TAIYO INK MFG. CO., LTD. Kansai Sales Office

18F, Otemachi Financial City Grand Cube, 1-9-2 Otemachi
Chiyoda-ku, Tokyo 100-0004, JapanFIS Bldg. Room 611, 403 Shimomaruya-cho, 2-chome Nijo-kudaru,
Kawaramachidori, Nakagyo-ku, Kyoto 604-8006, Japan

Note: On November 1, 2019, Thou-Management Corporation was dissolved and merged into Micro Network Technologies Corp.

Global Network
Company

Voting Shares Held

TAIWAN TAIYO INK CO., LTD.
TAIYO INK MFG. CO., (KOREA) LTD.
TAIYO INK (SUZHOU) CO., LTD.
TAIYO AMERICA, INC.
ONSTATIC TECHNOLOGY CO., LTD.
ONSTATIC INK (SHENZHEN) CO., LTD.
TAIYO INK INTERNATIONAL (SINGAPORE) PTE LTDTAIYO INK INTERNATIONAL (HK) LIMITEDTAIYO INK TRADING (SHENZHEN) CO., LTD.
TAIYO INK PRODUCTS CO., LTD.
TAIYO TRADING (THAILAND) CO., LTD.

100.00%90.40%
100.00%100.00%100.00%*1

100.00%100.00%100.00%100.00%100.00%Business Description

Manufacture and marketing of PWB materials
Manufacture and marketing of PWB and FPD materials
Manufacture and marketing of PWB materials
Manufacture and marketing of PWB materials
Manufacture and marketing of PWB materials
Manufacture and marketing of PWB materials
Marketing of PWB materials
Marketing of PWB materials
Marketing of PWB materials
Marketing of PWB materials
Marketing of PWB materials*1 ONSTATIC INK (SHENZHEN) CO., LTD. is a wholly-owned subsidiary of ONSTATIC TECHNOLOGY CO., LTD.

China

TAIWAN TAIYO INK CO., LTD.

TAIYO INK (SUZHOU) CO., LTD.

No.7, Datong 2nd Rd., Guanyin Industry Park, Guanyin Dist., Taoyuan
City 32849, Taiwan (R.O.C.)

No.26 Taishan Road, Suzhou New District, Suzhou City, Jiangsu, P.R.China

ONSTATIC INK (SHENZHEN) CO., LTD.
7F., No.1, Ren’ ai Rd., Yingge Dist., New Taipei City 239, Taiwan (R.O.C.)

Building No 38, Western Industrial Zone, Sha-Yi Village, Sha-Jing Town,
Shenzhen City, Guangdong Province, P.R.China

Korea

USA

TAIYO INK MFG. CO., (KOREA) LTD.

TAIYO AMERICA, INC.

166, Manhae-ro, Danwon-gu, Ansan-si, Gyeonggi-do, Korea

2675 Antler Drive, Carson City, NV89701, U.S.A.

Marketing Subsidiaries
China

TAIYO INK INTERNATIONAL (SINGAPORE) PTE LTDTAIYO INK TRADING (SHENZHEN) CO., LTD.

133 New Bridge Road, #09-08 Chinatown Point, Singapore 059413

Rm1509-1512, Office Tower, Shun Hing Square Di Wang Comm. Centre,
5002 Shen Nan Dong Road, Luo Hu District, Shenzhen City, Guangdong
Province, P.R.China

Room 2305, 23/F, The Metropolis Tower, 10 Metropolis Drive, Hunghom,
Kowloon, Hong Kong

Korea
TAIYO INK PRODUCTS CO., LTD.

Major Shareholders
Name

DIC Corporation
Kowa Co., Ltd.
Japan Trustee Services Bank, Ltd. (Trust account)
The Master Trust Bank of Japan, Ltd. (Trust account)
Misaki Engagement Master Fund HSBC (proxy)
SMBC Trust Bank Ltd.
(shares entrusted to Sumitomo Mitsui Banking Corporation retirement benefit trust account)
SHIKOKU CHEMICALS CORPORATION
Mitsuo Kawahara
Toshin Yushi Co., Ltd.
THE BANK OF NEW YORK MELLON 140042 (Standing proxy: Mizuho Bank, Ltd.)

Shares held(Thousands)% ofoutstanding
shares (excluding
treasury shares)

5,617
3,936
1,601
1,416
1,415

19.69
13.80
5.61
4.97
4.96

1,116

3.91

745
620
538
460
17,468

2.61
2.18
1.89
1.61
61.22

Accessing Our Investor Information Site:
An Introduction to TAIYO HOLDINGS Website
TAIYO HOLDINGS is committed to providing a full range
of information to all stakeholders including shareholders,

Stock Price and Trading Volume (Tokyo Stock Exchange)(Yen)(Thousands of shares)

6,000

3,000

5,000

2,500

2,000

4,000

1,500

3,000

Singapore

TAIYO INK INTERNATIONAL (HK) LIMITED¥9,331 million
50,200,000
28,910,436
Tokyo
6,106

http://www.taiyo-hd.co.jp/en/

TaiwanHong Kong

TEL
Established

CapitalShares authorized
Total number of issued shares
Stock listing
Number of shareholders

TAIYO HOLDINGS CO., LTD.
16F, Metropolitan Plaza Bldg., 1-11-1
Nishi-Ikebukuro, Toshima-ku, Tokyo
171-0021, Japan
81-3-5953-5200
September 29, 1953

investors, customers, and business partners.

Production and Marketing Subsidiaries

ONSTATIC TECHNOLOGY CO., LTD.

Name
Head office

Thailand

1,000

2,000

500

1,000

TAIYO TRADING (THAILAND) CO., LTD.
Pearl Bangkok 603, 1177 Phahonyothin Rd, Khwaeng Samsen Nai,
Khet Phaya Thai, Bangkok 10400, Thailand

0

0

2015
Stock Price (left scale)

2016

2017

2018

2019

Trading Volume (right scale)

7F & 8F Hanjoong Bldg. 8, Singil-ro, Danwon-gu, Ansan-si, Gyeonggi-do, Korea

48

TAIYO HOLDINGS Annual Report 2019TAIYO HOLDINGS Annual Report 201949