Integrated Report 2020

IK Vision

2030

Integrated Report

November 30,2020

2020

IK Vision

2030

Love (ai)andRespect (kei)MissionPeople come first, based on the spirit of “love (ai)” and “respect (kei),”and together we strive towards contributing to the development of society.

Contents

Management Philosophy
Contents and Editing Policy
Our Origin and DNA
The Evolution and Structural Reorganization of the
Chemicals Business

VisionESG Information

Corporate Overview

The Process of Value Creation

1
2
3
5
7

Corporate GovernanceManagement
Interview with an Outside Director
Risk Management
Society
Environment

43
45
53
55
60

To continually evolve, serving clients and society,through global operations and meeting their changing needs.

Strategies

Message from the President

IK Values

61

Feature: The Evolution of Inabata’s businesses

I. Advancing into New Businesses and Markets-To cherish integrity and respect for people (ethics)

II. The Source of Our Strength in the Plastics Business-To continually challenge the limits with high ideals, big dreams and great
passion (aspiration)

III. Our History of Global Expansion
CFO Interview-To prize dialogue and teamwork, and to treasure professional growth of
employees (organization)-To become the best partner of our clients, providing solutions from theclients’ standpoint (role)

Annual Report-To grow with people across borders, sharing and respecting diverse values
with the aim of co-prosperity (symbiosis)

At a Glance

Financial and Nonfinancial Highlights
Segment Overview
Global Network

1 Inabata Integrated Report 2020

9

Financial Information / Corporate Information /Stock Information

15
17
19
21

25
27
29
37

Editing Policy
To help you understand our business activities for value creationand our unique initiatives, we have created and released theGroup’s first integrated report. We seek to leverage it as animportant tool for developing mutual understanding and striving forincreasing corporate value.
Guidelines referenced: The International Integrated Reporting Framework
by International Integrated Reporting Council (IIRC), Guidance for Integrated
Corporate Disclosure and Company-Investor Dialogue for Collaborative
Value Creation by Ministry of Economy, Trade and Industry (METI), etc.
Relevant period: From April 2019 to March 2020 (Some information may
not be limited to this period)
Relevant organizations: Inabata & Co., Ltd. and its domestic and overseas
Group companies

Inabata Integrated Report 2020

2

Our Origin and DNA

IK Vision

The spirit of love andrespect for people

Our founder, Katsutaro Inabata, was born in Kyoto in 1862
as the eldest son to a family that ran a long-standing
Japanese sweet shop, Kameya Masashige, which was
purveyor to the Imperial Household. The shop suffereddamage due to the Hamaguri Gomon incident when
Katsutaro was two years old. This drastically changed thefamily’s lifestyle and they were hit by extreme poverty. In
1868, when Katsutaro was six, Kyoto lost its vigor because
Japan’s capital was transferred to Tokyo. Industries
started to stagnate. However, Katsutaro did not lose heartin such difficult circumstances and enrolled in primaryschool at seven. His hard work brought him a big honor at
the age of 10. He received the opportunity to read out
Sanyo Rai’s Nihon Gaishi in front of the Meiji emperor who
was visiting Kyoto. At 15, Katsutaro’s life underwent ahuge change. He was selected at an early age to visit
France, sponsored by the Kyoto Prefectural government,
which was aiming for industrial recovery. He studied
dyeing techniques at an engineering school in Lyon. He
learned practical skills by working at the Marnas dyeing
factory and studied applied chemistry afterward,

The Origin
Katsutaro Inabata, Founderof Inabata

focusing on dyeing techniques at an institution that later
became the University of Lyon. This experience became
the foundation for establishing Inabata later.

Signature of Founder
Katsutaro Inabata

Love (ai) and Respect (kei)*The words “ai ” and “kei ” mean love and respect in Japanese,respectively.

Katsutaro returned to Japan in 1885 at the age of 23 andbecame a government employee with Kyoto Prefecture. At
24, he started teaching at Kyoto dyeing institute, where heleveraged the advanced knowledge and skills in syntheticdyes and dyeing techniques he had learned in France.
At 25, he joined Kyoto Orimono K.K. and spearheaded
investments in facility as the chief technician. However, theKatsutaro Inabata washing silk threads in the Rhone river in thewinter during his study abroad (by Sekka Kamisaka)

3 Inabata Integrated Report 2020

2030

investments failed to produce corresponding results, forwhich he was held responsible and his employment was
terminated. Even though the termination notices werehanded to three technicians in all, Katsutaro was the
only one to secretly receive an offer for reappointment.
He rejected the unethical offer and decided to start his
own business.
In 1890, at the age of 28, he founded Inabata
Senryoten along with his wife andNurturing

the Inabata Style

started business as a dye distributer for St. Denis, a French
company. In those times, importers did not assess thequality of the dyes and used to sell them only based oncheap pricing, which led to many problems, as dyeing
businesses would also purchase the dyes without paying
attention to their quality. Katsutaro was concerned that thistrend was disadvantageous to society and started to resolve
the problem by importing pure, high-quality dyes from
St. Denis, a leading French company, and improving themusing the dyeing techniques he had studied. Being an
uncompromising technician, who had studied appliedchemistry early, he set out with goodwill to contribute tosocial development through his own specialized knowledge
and this attitude or spiritual foundation, along with a senseof mission, can be defined as our company’s belief.
(Hachijuhachinenshi (88 years history of Inabata), fourth
President Katsuo Inabata)

The DNA of“ai ” and “kei ”

love and respectdyeing industry was undergoing a crisis during World War I,
Katsutaro emphasized the need to understand that a national
business such as dyeing surpassed the concepts of profit
and loss. In 1926 he took over as president and committed
himself to the development of the industry.
In 2010, 120 years after Inabata was founded, thecompany had grown to a global corporation with about
3,600 employees on a consolidated basis. Katsutaro’s
great-grandson and our sixth president, Katsutaro Inabata,
felt the need to have a shared value among ourselves todemonstrate the company’s strengths. Selected
employees from the company put their heads together
and formulated the new management philosophy, vision,and values that the company should stand for 10 years
later. What is the purpose of our existence? What mattersthe most is the spirit of love and respect that we haveinherited. It forms the foundation for respecting every
person and has been our company’s unchanged motto
since its founding.
“We have come so far because we determined our
direction by following corporate ethics and economic
rationale as needed based on goodwill.”(Hachijuhachinenshi (88 years history of Inabata), fourth
President Katsuo Inabata)

Apart from running his company, Katsutaro also devoted
himself to domestic production of dyes. In 1916, when
Japan Dyestuff Manufacturing Co., Ltd. was establishedunder national policy, Katsutaro was also involved in its
establishment and was appointed as auditor. When theWith this thought in mind, we have been operating ourbusiness not only with our own profit in mind, but also with
the intention to always contribute to society. It is theaccumulation of such days upon which our company’s
130-year old history is built, and we will continue to make iteven more sustainable in the times to come.

Inabata Senryoten at the time of founding

IK Values workshop in DalianInabata Integrated Report 2020

4

The Evolution and Structural Reorganization of the Chemicals Business

Since starting from importing dyes in 1890, we have expanded our business around chemicals that form
the foundation of all kinds of industries, responding to the changing needs of our clients and society.

1890

1900

1910

1920

1930

1940

1950

1960

Inabata
Senryoten

Inabata Shoten

Inabata Shoten (Inabata & Co., Ltd.) Inabata Sangyo (Inabata & Co., Ltd.)

1890
Established

1893
Corporate name changed

1918
Incorporated as company from a private concern

1890-

1970

1980

1990

2000

2010

2020

1943
Japanese corporate name changed

1945-

Early Period

The era of founding and growth

1984-

Growth Period

The era of restructuring and revival

2010-

Reform Period

The era of challenges and hardship

The Fourth Founding Period

The era of progress and creation

Major structural reorganization and the timing of the start of dealing in major items
Mask blanks

Polarizing film materials
for liquid crystal displays

Pellicles

Encapsulant for LEDs

Information &Electronics

Founder and dyes
Our founder went to study in France on a government scholarship at the age of 15. There, he studied about cutting-edge
synthetic dyes and dyeing techniques of the time for eight years and brought back the knowledge to Japan.
1897

February 1920
Machinery division

Spinning machine (Société Alsacienne
de Constructions Mécaniques)

Information &Electronics Div. I
April 1959
Machinery and
Metals division

February 1941
Closed down

April 1977
May 1983
Machinery and Housing Machinery and Electronics
Materials division
Materials division

April 1999
IT & Electronics
division

Restarted business with Société
Alsacienne de Constructions
Mécaniques in 1959 and establishedthe Machinery and Metals division
Limited partnership company Inabata Koryo

Additives for plastics and rubber

1926 The Perfume division separated to become an independent entityand a limited partnership company Inabata Koryoten is established.
1966 The name is changed to Inabata Koryo.
Note: There is no capital relationship with our company now.

Dyes

Dye samples of Nippon
Senryo Seizo K.K.

Perfumes

Renewable energy materials

SiliconeDyes for printers

Chemicals for papermaking

Chemicals

June 1918
Trading division

January to
November 1933
Pharmaceuticals
division
Pharmaceuticals

January 1958
Chemicals division

Inabata Shoten became the first in Japan to hold film shows
For a period of two weeks beginning on February 15, 1897,
Inabata Shoten presented Japan’s first cinema shows at the
Nanchi Enbujo Theater, located in the Namba district ofOsaka, using the cinematograph. The film business was later
handed over to Yokota Shokai, which went on to become
Nikkatsu (Nippon Katsudo Shashin Corp.) after a merger.

Chemicals Division

October 1946
Pharmaceuticals
division

Took over pharmaceutical substances businessPharmaceuticals business separated

Materials for insecticides

Founder Inabata brought home a cinematograph from France in 1897

Life Industry

Poleon Tablets
1941
Advertisement inShukan Asahi
magazine

October 1975
Food division
Particle board

Cinematograph(Picture courtesy:
JCII Camera Museum)

Shrimp for processing

Adhesives for plastics

After World War I, import of dyes stopped. The founder established thecompany under national policy by working with the government, with the aimof encouraging domestic production of dyes. Industrialist Eiichi Shibusawa
was also involved in the founding.

1926
The founder becamepresident when thecompany was faced withthe danger of being
dissolved.
He believed that it isessential to thinkbeyond selfish motives
in a national businesssuch as dye
manufacturing.

1944

Merged with Sumitomo
Chemical Industry Co., Ltd.,
Inabata became a distributor.

1937
Following the production ofpharmaceuticals, Inabata
became a distributor. Sales ofantipyretic analgesic, local
anesthetic API.

Blueberries

Started sellingcornstarch, which is apaste for cardboard, tothe food industry as an
auxiliary raw material
for beer brewing

April 2012
Life sciences-related
products and services of
the Chemicals Division
integrated with theFood Division

Life Industry Division
Materials forregenerative medicine

October 1963
Housing Materials division

1897 to 1935 Inabata Dye House
1916 to 1944 Japan Dyestuff Manufacturing Co.

October 1984

April 2019
Chemicals Division and Housing & Eco
Materials Divisions restructured

Sumitomo Pharmaceuticals Co., Ltd. (now Sumitomo
Dainippon Pharma Co., Ltd.) was established as a joint
venture with Sumitomo Chemical Industry Co., Ltd.
(now Sumitomo Chemical Co., Ltd.).

CornstarchFounder Strives to 1895 to 1927 Muslin Boshoku
Advance Japan’s Established after our founder proposed to the weaving industry of Nishijin to produce muslin domestically. This wasduring the slump after the Sino-Japanese war. He also started business with Société Alsacienne de Constructions
Dying andWeaving Business Mécaniques in France which was considered to be the best in the spinning and weaving machine manufacturing industry.

5 Inabata Integrated Report 2020

Information &Electronics Div. III

Materials for solar
power generation

June 1918
Dyeing division

Imported pharmaceuticals

The founder gathered theessence of machinery,equipment, and technology
and devoted himself as thepresident of the factory to
produce dyes domestically.
1935 Ownership of Inabata
Dye House was transferred to
Toyobo Co., Ltd.

Information &Electronics Div. II

Vinyl chloride

October 1961
Plastics division

Plastics Division I

Plastics division spun off from
Chemicals division
Also expanded market to durable consumer
goods as the types of plastics increased andprocessing methods advanced
Resins(Polypropylene, etc.)

Plastics

Entered the housing material industry withthe sale of adhesives for plywood

Plastics Division II
Film productsSporting goods

Resin compounds

Inabata Integrated Report 2020

6

The Process of Value Creation

We will strengthen our trading business with our humanassets and highly specialized knowledge at the core andcreate new value by leveraging our multifaceted
capabilities as a shosha, or Japanese trading company.

As our customers expand their global presence, our strength lies in our ability to provide specialized
services by supplying them with a wide range of materials that meet local needs. Our value creation
originates from about 4,200 employees spread across about 60 bases in 17 countries around the worldand knowledge gathered from our everyday business activities.
Our global-minded staff with highly specialized expertise in chemicals and other fields combine theiradvanced knowledge with various functions, such as manufacturing and processing, distribution,
finance, and product development, to resolve issues faced by customers and generate new businesses
in different regions in the fields of information & electronics, chemicals, life industry, and plastics.

Implementing

Financial
capitalOur Mission

Businesssegments

Equity ratio*

Focal fields
and markets

Customers

45%

Robust financial baseSupporting ourcustomers throughadded value thatmeets their needs
and stable supply

Automobiles

Humancapital

Number of employees on aconsolidated basis
*

4,282

Manufacturing&
Processing

National staff in Inabata’s trading
subsidiaries worldwide : 783 employees*

Customerbase

People×Businessadvancement

Expertise

Employees

P29

Product
Development

Trading

Suppliers and customers
About

10,000 companies

Information &Electronics

Chemicals

Environment
EnergyP31

Midterm
Business Plan:
NC2020 Key
Strategies
P11-12Finance
Logistics

Trust built over 130 years

Life Industry

Long-term
Vision:IK Vision 2030
P10

Shareholders

Life Science
Medicine

Creating a work
environment thatis motivating andprovides global
opportunities

Stable returns(Total return ratioaround 30% to 35%)

P33

Global network

Social andrelationship About
capital60 bases in

17 countries

Society
Corporate GovernanceRisk Management

P43
P53

Plastics

P35

Food
Agriculture

Contributing todevelopment of thelocal community
by creating
economic value
through business*As of March 31, 2020

Various functions offered by Inabata

Manufacturing and processing
The Inabata Group owns 22* manufacturing and processing
subsidiaries around the world, with sales of about 56 billion yen*2.
We are a shosha and our basic business is trading. We consider
the manufacturing and processing function as a tool thatcomplements trading. One of our major manufacturing andprocessing functions is the plastic compound manufacturingbusiness for our plastics business.
(-> See "Feature: The Evolution of Inabata's Businesses" on page 17.)1

*1 Number of consolidated subsidiaries for manufacturing and processing
at the end of March 2020
*2 Simple aggregated value for FY2019

7 Inabata Integrated Report 2020

Logistics

Finance

Based on product knowledge and know-how cultivated over theyears in our Group companies, through dealing in chemicals andother materials, we propose and provide the optimum distributionfunction to our customers with the help of our trusted partners inwarehousing and delivery businesses. To our customers who
operate businesses around the world, we offer vendor managed
inventory* (VMI) based on our network and know-how. We also
built our own distribution center handling automobile parts andresin materials in Indonesia to ensure the timely delivery andone-stop services that our customers expect.

We suggest and implement solutions to our customers for
reducing financial burdens, avoiding exchange rate risks andresolving other issues. A robust financial base is necessary forproviding the financial function that customers expect. We
consider net D/E ratio* to be a key business indicator and arealways striving to improve the company’s financial health.
Additionally, we have set the target value for this indicator at 0.4
time or less in NC2020. The actual value of this indicator was 0.16
time at the end of FY2019, showing that our financial soundness
is sufficiently maintained.

*A system in which our company manages and replenishes inventory on
behalf of the customer. We use IT to analyze the customer’s production
information and coordinate with multiple suppliers and distributors toefficiently deliver materials to the customers.

*Net D/E ratio = (interest-bearing debt – cash and deposits) ÷ equity capital

Inabata Integrated Report 20208

Message from the President

We are striving for sustainable growth through business evolutionaligned with the needs of society and customers.

The COVID-19 pandemic continues tospread across the world, with no end insight yet. I express my sincere
condolences to those affected and theirfamilies. I would also like to express deep
gratitude for all medical workers.

130 years since founding
In October 2020, Inabata will complete 130 years since
its founding. This is entirely due to strong support fromour customers, shareholders and other stakeholders, forwhich we are extremely grateful.
Inabata was established in Kyoto in 1890 as an importerand seller of synthetic dyes and has since expanded
over time, currently boasting a network of about 60
bases across 17 countries outside Japan. With
overseas business accounting for over 50% of our net
sales, we have grown into a global corporate group.
However, our company stands for something that will
never change, that must not change, even with thechanging times. That is our spirit of “love” and “respect,”which has been the company’s motto since its
founding. It inspires us to respect people andcontribute to the development of society.

Katsutaro Inabata
President

9 Inabata Integrated Report 2020

Ten years ago, on the occasion of our 120th anniversary,
we formulated the company’s Mission, Vision, and IK
Values based on this spirit. We have also been initiating
activities to gradually ingrain this attitude and way of
thinking in the whole Group. At the time of formulation, I
explained these to local employees during my visit to the
U.S. However, one-sided presentations are insufficient toingrain philosophy. I felt the need to deepen
understanding through dialogue. Since then, we havebeen making steady efforts in this direction, including
constantly conducting training on IK Values for our
global staff. In addition, our Human Resources Officeproposed some years ago that we create multilingual
videos as a training tool, and then took that tool to 36
bases in 14 countries, holding workshops for over one

year starting 2018. I have also heard that, in some of theoverseas bases, workshops were held at the initiative of
local employees. I am confident that if more and morevoluntary activities of this kind spread throughout theworld, it will result in greater unity and cohesion in thegroup and this will help us build a stronger businessfoundation.
In addition to carefully upholding this identity from thecompany’s founding, we have also continued to makeenormous changes in the content of our business in theform of the products we deal in and the value we offer. In
this rapidly changing day and age, the value expectedfrom a trading company is changing drastically as well. It
is also not unusual for the value that we have beenoffering to our customers to undergo rapid deterioration
due to social changes, technological advancement andother factors. To ensure that the company keeps growing
sustainably beyond these 130 years since its founding,we must continue to ceaselessly advance our businesses
in light of changes in customers and society.

Management Philosophy Structure
Company Motto:

Love (ai) and Respect (kei)MissionVisionIK Values

Long-term Vision: IK Vision 2030

Midterm Business Plan: NC2020

Long-term Vision: IK Vision 2030
How Inabata envisions itself around 2030
Function
Further enhancing multifaceted capabilities
such as manufacturing, logistics, and finance,in addition to trading

Sales and operating profit
generated outside of Japan
70% or more

Scale of operation
Achieving more than 1 trillion JPY
in consolidated sales at an early stage

Portfolio
At least one-third of sales and operating profit
from business segments other than theinformation & electronics and plastics segments.

Inabata Integrated Report 202010

Message from the President

The purpose of formulating the long-term
IK Vision 2030

Focus on expanding overseas businessand growth markets

To spread information internally and externally about our
determination toward business evolution, we formulated
IK Vision 2030, our long-term vision, in May 2017. Thisoutlines our vision for around 2025 to 2030 and charts
out the direction for further enhancing multifaceted
functions, such as manufacturing, distribution, andfinance, that are also the basics of our trading function.
We will also strive for early achievement of ournumerical targets of consolidated sales of 1 trillion yen
and a consolidated overseas sales ratio of 70% or more.
We also aim to increase the proportion of segments
other than information & electronics and plastics, which
are our top two segments, to over one-third of ourbusiness portfolio.

As the first step in the direction of IK Vision 2030, ourlong-term vision, we drew up the four-year midterm businessplan New Challenge 2020 (NC2020) starting FY2017 and havebeen working on the following six key strategies.

We have set a period of five years for achieving thislong-term vision because it does not aim to achieve
quantitative targets only. We consider it sufficiently
possible to achieve the consolidated sales target of 1
trillion yen based on the current status of our business.
Additionally, a look at the recent economic conditions
suggests that the percentage of overseas sale will
naturally cross 70% when we achieve our target. The
broad objective of formulating the long-term vision is toshare with all members of our group the challenges andpotential problems that come to mind when we backcast
and think what is expected from us in terms of businessportfolio, organizational structure, employee structure,and governance systems as a group company withconsolidated sales worth 1 trillion yen, of which 70%
comes from overseas markets.

In FY2020 (year ending March 2021), the final year of thisplan, our quantitative targets were to achieve net sales of730 billion yen and operating profit of 15.5 billion yen.
However, everything changed with the spread of
COVID-19 across the world and we regret to convey that,
as of August 2020, we are unable to foresee achieving oursales and profit targets.
The status update on each key strategy is as follows.
❶ Further broadening and deepening of businessoutside Japan: When we consider the world economy
during this period, we find that intensifying trade friction
between the U.S. and China has clearly affected business not
only China but also in Southeast Asia, which forms a supply
chain with China. Moreover, the enormity of the impact of
the spread of COVID-19 on the world economy is inestimableand the end is nowhere in sight. Unfortunately, we will
perhaps be forced into recession for some time. However,the pandemic is bound to come under control at some stage.
There is no doubt that overseas business, including in China
and Southeast Asia, will be a huge business driver in the longrun and, therefore, we plan to continue extensively focusing
on deepening our overseas business.
❷ Focus on markets with growth potential and sectorsthat have yet to be developed: We are mainly focused on
opening new businesses and expanding existing ones in
the fields of automotive, medicine and life science,
environment and energy, and agriculture. The automobile❶ Further broadening and deepening of businessoutside Japan❹ Stepping up investments to expand tradingbusiness❷ Focus on markets with growth potential andsectors that have yet to be developed❺ Continual review of assets and enhancement offinancial standing❸ Further enhancement of information
infrastructure essential for global management❻ Establishing global human resourcesmanagement

11 Inabata Integrated Report 2020

The increase in sales in the information & electronics andthe plastics segments has currently raised the proportionof sales in two major segments, contradicting the target
we have set for our business portfolio in the long-term
vision. However, in the medium to long term, our policy is
to accelerate commercialization and profitability in thesegrowth markets and their untapped field and establish thethird pillar of Group management.

The aging population and increasing need for medical caresuggest that the medicine and life sciences will grow inthe medium to long term. We have already started
manufacturing pharmaceutical intermediates at overseas
bases and are providing a wide range of solutions,
including procurement of medical equipment andreagents. We will open up new business opportunities in
the field of advanced medicine, in which further expansionof demand is anticipated.

*Net profit = profit attributable to owners of parent

NC 2020 Quantitative Targets (FY2020) *Net D/E ratio = (interest-bearing debt - cash and deposits) / equity capital
Net Sales

Operating Profit

Ordinary Profit

Net Profit*

Net D/E Ratio*

730.0 billion JPY

15.5 billion JPY

16.0 billion JPY

12.0 billion JPY

0.4 or less

Operating Performance
Net sales

Ordinary profit(Billions of yen)(Billions of yen)

900

30

730.0
600

Midterm Business Plan NC2020 Key Strategies

The environment and energy fields also possess great
potential amid intensifying global environmental problems.
We plan to initiate and expand businesses centered on
biomass power, lithium-ion batteries for power storage
and so on, in addition to solar power. Furthermore, in the
agriculture and food products business, we are expanding
our business over a wide range that covers from upstream
activities related to agriculture, including cultivation on
blueberries in Hokkaido, to downstream activities in foodprocessing, with import and sales of agricultural andmarine products and other activities as the starting point.

industry is approaching a major turning point as large auto
manufacturers direct attention to software and service
businesses amid mainstream trends such as
electrification, automated driving, and connected andsharing services. However, even in this age of changes,
the automobile industry, which is increasingly blending
mobility technology and telecommunications technology,
will undoubtedly remain the world’s most advanced
industry. Inabata is already producing steady results,
mainly in the plastics and chemicals businesses. These
industries cover an extremely wide area and we would liketo create new business opportunities by approaching themfrom various domains.

300

572.1

10.7

577.0

11.3

586.6

621.1

634.7

14.0
12.6

600.3

20

13.2

15.5
10

5.9
0

FY2014FY2015

New Challenge 2016

FY2016FY2017FY2018FY2019FY2020
NC2020 Targets

0

New Challenge 2020

Inabata Integrated Report 202012

Message from the President

Strengthening group management andfinancial structure❸ Further enhancement of information infrastructure
essential for global management: In this strategy, we
are working on standardizing the workflows andinformation systems at domestic and overseas businessbases. We have already introduced an enterprise
resource planning (ERP) system to integrate amechanism to manage information for global
management. This has enabled the head offices toquickly understand the management status at eachlocation and their sales information. We also further
strengthened our work management standards based on
the lessons learned from governance-related issues that
arose in a trading subsidiary in Europe while introducing
the system. Going forward, we will focus on advancing
Group management using centralized management of
global information and strengthen governance whileraising the quality and efficiency of work at each location
using new information systems.
❹ Stepping up investments to expand tradingbusiness: We will accelerate growth investment for
expanding and intensifying overseas business andgaining a stronghold in growth markets and untappedfields. Our main objective for growth investment is toexpand and strengthen the trading function. Although it isbasically centered on minority investment, we also
engage in majority investing with limited risk and money
if that is necessary for establishing subsidiaries under ourbusiness strategy. Review of investment projects
involves stringent checking of capital costs, investment
recovery plans and other factors, which has increased the

13 Inabata Integrated Report 2020

accuracy of investment management. However,potential gains may be cut short if strict reviews end up
discouraging employees. Therefore, it is important tostrive for balance in this matter.
❺ Continual review of assets and enhancement offinancial standing: This is closely connected to theinvestment strategy. It goes without saying that soundfinances are the backbone of sound investment. Ourfinancial structure is improving drastically throughcontinuous review and optimization of assets, helping us
achieve a net D/E ratio of under 0.2 time very recently.
We will continue paying attention to striking a balance
between maintaining this financial structure andshareholder return, while striving for sustainablebusiness growth by implementing growth investment
more proactively.

Nurturing global staff and managing risks
People are the most important element of nonfinancial
capital that supports all our business activities, including
the implementation of these strategies. The overseas
business is increasingly gaining significance, and we arefocusing on nurturing global talent. In NC2020, we haveproclaimed ❻ establishing global human resourcesmanagement as one of our key strategies.
Specialized knowledge and proactiveness are importantqualities for the employees. For example, employees
who have gained tremendous experience in thechemical products business collect and accumulate
information on their producing countries andmanufacturers as well as the manufacturer’s
equipment used in production, along with informationon the system through which they should be supplied,in their everyday work of dealing with chemical
products. They can, therefore, promptly propose andimplement supply chains optimal to each customer’sbusiness requirements. In the future, we will strive forhigher productivity at the organizational level, alongwith increasing the skills of every staff, by advancing
the use of digital technology and promoting further
sharing of information and knowhow that each person
has accumulated.

On the other hand, risk management will be even more
important in our effort to expand and intensify overseas
business. We consider accounts receivables and stock themain assets of a trading company. For this reason, we pay
close attention to managing accounts receivables andinventory, while also sufficiently keeping in mind the delaysin legislation, political situations and other country risks
relevant to the region. We are also focusing onstrengthening risk management at each level by dispatchingspecialists from the head offices to our overseas bases andholding training on credit management, risk hedging
methods and other topics for local employees.

Numbers of local employees and expats from Japan engaging in trading business outside Japan
Expats from Japan

Local employees
1,000

800

693

663

628

783

764

737

600

400

200

0

90
FY201493
FY201594

95
FY2016FY201790
FY201893
FY2019Note: Figures are as of the end of March of each FY.

Striving for sustainable growth based on trading function
To continue increasing the company’s value in the longterm, we need to work continuously on promoting
diversity and strengthening corporate governance,apart from steadily implementing the key strategies inour midterm business plan. For promoting diversity,
we would like to employ diverse people corresponding
to the internationalization and diversification of ourbusinesses. Although we regret to be still lagging
behind in terms of women’s active participation in thecompany, efforts will be made to increase thepercentage of women in managerial positions in Japanand abroad. In terms of governance too, we have been
conducting effectiveness evaluation of the board of
directors in accordance with the corporate governancecode every year since 2015 and are also looking into a
succession plan. We will continue our pursuit of Group
governance apt for a true global company and focus on
further strengthening governance through constanteffort to solidify our risk management system.
The trading business has often been dismissed as
unnecessary and the significance of its existence has
been questioned. However, this is not because the roleof trading companies has died out. We think that it
implies that the functions sought from trading companies
and the values they are expected to provide havechanged. We will continue to contemplate what valuesociety expects from us, while pursuing further
advancement of multifaceted functions with trading
functions at the base. We will also strive for sustainablegrowth and a medium-to long-term increase in corporate
value by accelerating the progress of our businesses.
We look forward to continued support andencouragement from all our stakeholders.

Inabata Integrated Report 202014

Feature: The Evolution of Inabata’s Businesses

I. Advancing into New Businesses and Markets
Focusing on untapped fields and markets in which we can grow in alignment with our
midterm business plan

Field

1

Automobiles
As environment-friendly technologies and automated driving technologies advance, automobiles are
expected to provide innovative solutions for creating a more abundant society. Inabata leverages its
global network to operate a wide variety of businesses for the automobile industry.

• Decorative films for the interior/exterior of vehicles and related
equipment• Electronic device materials for automotive applications• Driving and control components for EVs/PHEVs• Materials for tires, airbags and electronic components• Plastics for vehicle parts• Sheets for transportation cases of auto parts, etc.
• Display for automotive applications• Thermal interface for EV batteries

Field

2

Field

3

• Artificial intelligence, big data, fintech, security and IoT-related
products• Renewable energy and energy storage systems• Eco-friendly products for homes• Materials for solar cells and solar power generation system• Fuel cells stacks, fuel cell systems• PKS*1, small biomass power generators• Materials for reprocessed plastics• Composites of CNF*2 + plastic, recycled materials*1 Palm kernel shell (fuel grade)*2 Cellulose nano fiber (nano-sized natural cellulose fiber)

15 Inabata Integrated Report 2020

Aging populations are a pressing issue not only in Japan, but across the whole world and demands
for medical technologies and pharmaceuticals have started to change. Inabata is operating
businesses mainly in the regenerative medicine field in which the company can leverage its
long-cultivated strengths.

• Various medical equipment and medical consumables• Good manufacturing practice (GMP) cell sorters for regenerative
medicine and cell therapy• Chemical additives for growth factors used in cell cultures,
aggregation control reagent for pluripotent stem cells (PSCs) in
suspension culture• Liposome preparation* and related materials• Health-related materials* A preparation made by enclosing activated drugs in tiny capsules. These capsules help take thedrugs to the precise affected parts of the body, improve their effectiveness and lower side
effects on unaffected parts. This is one of the common methods used for drug delivery
systems in pharmaceutical technology.

Environment and Energy
With the intensifying scarcity of natural resources and risks of climate change, it has become
necessary to effectively use energy and reduce waste. Inabata seeks to leverage its highly specialized
knowledge in the chemical field to operate various environmental and energy businesses.

Life Science and Medicine

Field

4

Food Business Encompassing Agriculture
Farms in Japan need to be even more efficient to deal with the shortage of agricultural workers due
to diminishing birth rate and aging population. Inabata is operating varied global businesses in thefield of food products, including its advent into the fishing industry.

• Various agriculture-related materials• Development of fodder and livestock management systems(software*, devices, and sensors) for cattle• Large-scale cultivation of blueberries and garlic at in-house farms• Development of film products for maintaining freshness ofvegetables and eco-friendly films• Frozen vegetable factories• Fresh fish wholesale business* Software for greater efficiency in livestock management (breeding management and healthmanagement) based on animal welfare

Inabata Integrated Report 202016

Feature: The Evolution of Inabata’s Businesses

II. The Source of Our Strength
in the Plastics Business
Plastic compounds manufacturing business leading to expansion of trading business

By starting compounding business at seven locations inseven countries, mainly in Asia, we are able to offer not only
trading functions but also the added value that ourcustomers expect and this has become the strength forwhich we are preferred by our customers.

The plastics business, which is one of Inabata’s key
businesses, expanded overseas using the strength of theplastic compound manufacturing business (compounding
business) and grew to a segment that amounts to 45%* of
our consolidated net sales. As Japanese electronics
manufacturers transferred their production bases toSoutheast Asia in the latter half of the 1970s, we followed
suit, building our first overseas manufacturing andprocessing base in Singapore. And as our customers in theoffice automation (OA) and automotive industries broadened
their businesses globally, we expanded our trading andmanufacturing and processing bases in Southeast Asia,
China, and Mexico. Many of our major customers haveproduction bases around the world and need supply anddistribution services for materials of the same quality.

Moreover, by being involved in customers’ manufacturing
processes on a daily basis through the compounding
business, we are able to engage with real-time
product-related information right from the development
stage. This allows us to make proposals for new resinmaterials or create new businesses involving other chemicalmaterials that our company deals in.
*Sales of the plastics segment accounted for 270.3 billion yen (45%) out of
the consolidated net sales worth 600.3 billion yen for FY2019.

Business model for the plastic compound business
Asia

Sales in the plastics business(Billions of yen)
300.0

200.0

111.5
100.0

0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Local factoryof resinmanufacturer

Base resin

Inabata’s
local trading
operation andcompounding
factory

Relatedmaterials

Local factoryof resinmanufacturer

Inabata’s
local trading
operation andcompounding
factory

Automotive,
OA, homeappliances

Sharing of informationon compounding recipe

Information sharing on
customers and markets

Base resin

2011

2012

2013

2014

2015

2016

2017

2018

2019 (Fiscal year)(Metric tons)
250,000

Plastic
compoundproducts

2010

Plastic compound production capacity, by region

North America
Local factoryof parts
molding
manufacturer

270.3

The plastics business is expanding overseas byleveraging the strengths of the compounding business.

Plastic
compoundproducts

Relatedmaterials

Local factoryof parts
molding
manufacturer

200,000

We are expanding in overseas network along with overseas ventures
by Japanese customers. We are cultivating both Japaneseand non-Japanese customers.
Mexico150,000

Vietnam

Mainlyautomotive

China
100,000

Helping in transferof customer site

Indonesia
Malaysia

Updated information on customers andmarkets through compounding business contributes
to expansion of trading business

Thailand50,000Philippines

Information sharing on
customers and markets
0

Japan

Major final
products

Singapore2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 (Year)

Home appliances

OA equipment

Automobiles

Inabatahead offices

Resin manufacturer’shead office

Collaborative value leveraging
specialized knowledge
and network of bases

Providing diverse
value throughone-stop service

Parts molding maker

Product manufacturer’shead office

One of the largest networks of bases as a trading company
Manufacturing & processing bases

7 bases in 7 countries

What are plastic compounds?
Kneading and coloring
pigments, additives,
other resins, etc.
Base resin

17 Inabata Integrated Report 2020

Coloring, addition of
weather resistance, etc.
Plastic compounds

Production capacity
Approx. 184,000 metric tons per year

Manufacturing base in Mexico (for automobiles)

・Name of base
IK Plastic Compound Mexico, S.A. de C.V.
・Production capacity
15,000 metric tons/year
・Location
Silao, Guanajuato, central Mexico
・Start of production
Operations began November 2013, mass production started September 2014

Inabata Integrated Report 202018

Feature: The Evolution of Inabata’s Businesses

III. Our History of Global Expansion
History and transformation of our trading business through generation of new value
in the post-World War II period
IK Vision 2030
Inabata’s overseas business dates back over 110 years. We
set up a branch in Tianjin, China to develop a market for dyes.
We later expanded to Europe as well, establishing a
representative office in Brussels, Belgium in 1937 as a
general agency for Japan Dyestuff Manufacturing Co. From
1938, we set up bases in the Chinese cities of Mukden (now
Shenyang), Shanghai, Tianjin, Qingdao, Dalian and Jinan, andBatavia (now Jakarta), Hanoi and Keijo (now Seoul) to sell

Overseas sales
Overseas sales

Unconsolidated sales

dyes and pharmaceuticals. We had expanded to a total of 13
bases in five countries before World War II. Even though welost all our bases due to the war, we established our firstpost-war oversea subsidiary in Singapore about 30 years
later in 1976. In the 44 years since then, we have actively
expanded our overseas business and have now built a
network of about 60 bases in 17 countries, resulting inoverseas sales amounting to over 50 percent of total sales.

Notes: Financial statements are consolidated from FY1991.
The overseas sales ratio refers to the proportion of sales by overseas bases located in each region in consolidated sales.

1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996

53%

70%

51%
Overseas sales rate

25%

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (FY)around 2030

History of overseas expansion after World War II
1970s

2 countries, 3 bases

1980s

9 countries, about 20 bases

1990s

11 countries, about 40 bases

2000s

15 countries, about 70 bases

2010s

17 countries, about 60 bases

Trading company Note: Photos are buildings in which our offices were launched.
1976 Singapore

1988 Belgium (Brussels)

1987 Thailand (Bangkok)
Siam Inabata Co., Ltd.
(now lnabata Thai Co., Ltd.)

Established as the firstoverseas sales base afterWorld War II
lnabata Singapore (Pte.) Ltd.

1988 China (Hong Kong)
Inabata Sangyo (H.K.) Ltd.

lnabata Europe S.A.
(now Inabata
Europe GmbH)*Moved to Germany
in 20131990 France (Paris)
Inabata France S.A.R.L.
(Now Inabata France S.A.S.)

2000 UK (London)
Inabata UK Ltd.

2008 India (New Delhi)
Inabata India Private Ltd.

2013 Turkey (Istanbul)
Inabata Singapore (Pte.)
Ltd., Istanbul
Representative Office2013 Brazil (Sao Paulo)
Inabata Brazil Importand Export Ltd.

2013 Germany (Dusseldorf)

1978 USA (New York)1991 Indonesia (Jakarta)

lnabata America Corp.

1988 Malaysia (Kuala Lumpur)
Inabata Malaysia Sdn. Bhd.

1989 Taiwan (Hsinchu)
Taiwan Inabata Sangyo Co., Ltd.

PT. Inabata Indonesia

1996 China (Shanghai)
Shanghai Inabata Trading Co., Ltd.

1998 Philippines (Manila)
lnabata Philippines, Inc.

2006 South Korea (Seoul)
Inabata Korea & Co., Ltd.

2006 Poland (Torun)
Inabata Poland Sp. z o.o*Liquidated in February 20142008 Vietnam (Hanoi)
Inabata Vietnam Co., Ltd.

2010 Switzerland (Zug)Inabata France S.A.S.,
Lisses, Zug Branch*Liquidated in December 20112012 Mexico (Queretaro)

Inabata Europe GmbH2015 UAE (Dubai)
Inabata Europe GmbH
Middle East (Branch)*being liquidated

Inabata Mexico, S.A. de C.V.

2013 Myanmar (Yangon)
Inabata Thai Co., Ltd., Yangon Branch

Manufacturing and processing bases
1978 Singapore
Established Sanyo-IK Color (Pte.) Ltd.
through a joint venture with Sanyo KakoCompany Ltd. for manufacturing plastic
compounds.
*Merged with Inabata Singapore(Pte.) Ltd.in
July 2013.
This became thefoundation for our
key business ofplastic compounds.

19 Inabata Integrated Report 20201987 Thailand (Samut Prakan)
SIK (Thailand) Ltd.

1989 UK (Telford)

1989 Philippines (Manila)
SIK Philippines Ltd.
*Liquidated in June 2012

1995 Indonesia (Bekasi)
PT. S-IK Indonesia

1995 China (Dongguan)
Sanyo-IK Color (H.K) Ltd.
Dongguan Plant (dormant)

IK Precision Co., Ltd.
*Liquidated in March 2006

2002 China (Dalian)

1994 Malaysia (Johor)
SIK Color (M) Sdn. Bhd.

Inabata Industry & Trade(Dalian F.T.Z.) Co., Ltd.

2003 Vietnam (Haiphong)
SIK Vietnam Co., Ltd.

2006 France (Normandy)
Pharmasynthese S.A.S.

2007 China (Shanghai)
Shanghai Inabata Fine ChemicalCo., Ltd.

2008 Mexico (Monterrey)
NH Inabata, S. de R.L. de C.V.

2009 Mexico (Tijuana)
IK-Tech de Mexico,
S. de R.L. de C.V.
*Liquidated in March 20162009 Indonesia (Bekasi)
PT. Inabata Creation Indonesia

2012 Mexico (Silao)

2013 Vietnam (Da Nang)Apple Film Da Nang
Co., Ltd.

IK Plastic Compound Mexico,
S.A. de C.V.

2013 Philippines (Binan)
IK Plastic Compound Phils. Inc.

Inabata Integrated Report 202020

CFO Interview

Kenichi Yokota
Director, Senior Managing Executive Officer
Financial Management, Investor Relations,
General Affairs, Information Technology,
Business Process Management, Risk Management,International Affiliate Management

In May 2017, Inabata formulated its four-year midterm business plan, New Challenge 2020 (NC2020),
and drew up IK Vision 2030 indicating where the company envisions itself around 2030.
This is the final year of NC2020. In this section, we ask Director and Senior Managing Executive Officer
Kenichi Yokota about the status of financial targets and future financial and investment strategies.

Q
A Business slowed down toward theWhat have been the achievements during
this period?

end of the business year due toexternal factors such as trade
friction between the U.S. and China
and the spread of COVID-19.
However, our long-term plan has
been producing steady results.

When we look at the business environment in FY2019, theU.S. economy was strong in the first half because personal
consumption was strong. However, the economies ofAsian countries, such as China, Thailand, Indonesia, andIndia, which are our main markets, have seen a slump due
to trade disputes between the U.S. and China, slowdown
in the Chinese economy, and other reasons. On the other

hand, the Japanese economy has been gradually
recovering due to improvements in individual
consumption. However, the global spread of COVID-19
toward the end of the fiscal year resulted in rapid
simultaneous deceleration of economies around the worldand uncertainties about the future became extremely high.
In such circumstances, our Group’s consolidated sales
stood at 600.312 billion yen (5.4% decreaseyear-on-year). Operating profit was 13.229 billion yen(5.7% decrease year-on-year), ordinary profit was 14.211
billion yen (0.7% decrease year-on-year) and net profit(profit attributable to owners of parent) was 11.415 billion
yen (11.5% decrease year-on-year).
Regarding the progress of our midterm business plan,
NC2020, in its third year, profit was mostly stable despite
the impact of trade disputes between the U.S. and China,
even though sales were sluggish in the first half of the
fiscal year. However, the spread of COVID-19 led to a

Consolidated results and values in midterm business plan NC2020 for FY2019
Results
in FY2019

Plan for FY2019
in NC2020

600.3 billion JPY

700 billion JPY

Operating profit

13.2 billion JPY

14.5 billion JPY

Ordinary profit

14.2 billion JPY

15 billion JPY

Profit attributable to owners of parent

11.4 billion JPY

11 billion JPY

0.16 time

0.4 time or less

21 Inabata Integrated Report 2020

From the financial perspective, the net D/E ratio, whichindicates financial soundness, touched 0.16 time as ofthe end of March 2020. The target value for this index in
NC2020 is set to 0.4 time or less. This shows that thetarget of strengthening our financial base has been
sufficiently achieved. On the other hand, ROE has
dropped to 7.4% from the previous year’s 8.5%, which
can mainly be attributed to a decrease in net profit rate
against sales volume.
If we look separately at each segment, the LCD business,
which is a pillar of our information & electronics segment,
was robust due to continued high operating rate of panel
manufacturers in China despite the spread of COVID-19,
and sales increased as well. Although OA-related products
were sluggish in comparison to the favorable trend lastyear, it was mostly on track as far as profits estimated in
the business plan are concerned. In environment-related

businesses, we delivered a large system project for solar
power. Operating profit for the information & electronics
segment was 4.4 billion yen, exceeding the target of 4.2
billion yen set for the third year of NC2020.
In the plastics segment, sales were dull due to a fall inresin prices. As far as profit is concerned, China wasparticularly affected by the spread of COVID-19, but salesof high-performance resin for automobiles remained
mostly strong throughout the year, resulting in an
operating profit of 6.2 billion yen. This exceeds the targetof 5.6 billion yen set for the third year in NC2020.
Contrarily, the chemicals segment and the life industry
segment were unable to achieve the operating profit
target set in NC2020. For the chemicals segment, thiscan be attributed to fluctuations in the former housing &eco materials segment, which was integrated with thechemicals segment from this fiscal year. We will promote
efficiency within the segment and strengthen our sales
ability to achieve the targets set for the final year of theplan. Both, the life sciences field and the food products
field in the life industry segment lagged behind theplanned targets. We will continue to focus on developing
the agriculture field, including blueberry business, from along-term perspective.

Sales by segment

Operating profit by segment(Billions of yen)
800

(Millions of yen)
15,000700.0

Net sales

Net D/E ratio

rapid decrease in demand in China and other major Asian
countries. As a result, we were unable to achieve oursales and profit targets, except in net profit for the thirdyear of our plan. In particular, sales in the plastics
segment dropped significantly because the price of crude
oil fell toward the end of the fiscal year. The target for net
profit was achieved because gain on sales of investment
securities exceeded the estimates in the plan.

600

600.3

400

Others0.1
Plastics
270.3
Life Industry
36.9
Chemicals
74.1

200

Information &Electronics
218.6
0

Results
in FY2019

Others0.3
Plastics
299.0

14,50013,2295,000

Information &Electronics
250.0

Plan for FY2019
in NC2020

0

Results
in FY2019

Others200
Plastics
5,600

Plastics
6,235

10,000Life Industry
59.0
Chemicals
91.7

Others135

Life Industry
1,166Life Industry
2,500

Chemicals
1,208

Chemicals
2,000

Information &Electronics
4,482

Information &Electronics
4,200

Plan for FY2019
in NC2020

Inabata Integrated Report 202022

CFO Interview

shares that we believe we are holding above
appropriate levels, after carefully assessing their
possible impact on our businesses.

Q
A We enhanced the quality ofWhat is your financial strategy?

finance by reviewing owned assets
and strengthening themanagement of the Group’s capital.

One of the key strategies of NC2020 is “continual
review of assets and enhancement of financial
standing.” Based on this policy, we have beenreviewing cross-shareholdings, which is one of ourassets. We are streamlining our assets by selling some

Equity capital, Net interest-bearing debt andNet D/E ratio
Equity capital

Net interest-bearing debt

(Times)0.8

162.9
146.2 141.4

150

100

55.2
50

0

145.9

127.6 126.0
0.43
0.37

47.0

0.6

0.4

0.30

0.28

43.7

39.4

0.19
30.3

0.16 0.2
23.4

FY2014 FY2015 FY2016 FY2017 FY2018 FY2019Q
A We will accelerate capital

What is your investment strategy?

Net D/E ratio(Billions of yen)200

We have also strengthened cash management at ouroverseas bases. We reduced interest-bearing debt andinterest payments of our bases abroad, in which
borrowings were made in countries where interest
rates and/or exchange rates were high, by increasing
capital from Japan. As a result of these strategies,
income and expenses other than those related tooperations have significantly improved over recent
years, the net D/E ratio has significantly improved andour financial standing has strengthened due to an
improvement in our ratio of owned capital.

0

investments centered on minority
investments with a view toexpanding our trading function.

Although this also includes strengthening facilities atexisting production bases in our case, most of ourinvestment is capital investment aimed at expanding
business and cultivating new business and is, therefore,
basically centered on minority investments for organic
growth. We can stretch our topline in a short time byacquiring companies and making them our subsidiaries,
but this will lead to increase the amount of labornecessary for PMI* and risks such as impairment of
goodwill can be harmful to our trading business. We willcertainly carry out majority investments with limited risk
and money if corresponding returns can be predicted.
Each investment plan is reviewed by our Shinsa Kaigi,
which deliberates upon investment, loan, and credit
projects, and important projects are implemented after
discussion and approval at board meetings. We have also
determined capital costs (discount rate) in the company asa standard for investment decisions.

23 Inabata Integrated Report 2020

Some of the key investment fields are automobiles, life
sciences, food, environment and energy, and other fields
that are likely to see sustained market growth. In the life
industry segment, we are striving to build a vertical
integration model from agriculture in the upstream toprocessing and distribution in the downstream. As
mentioned before, we plan to further accelerate growthinvestment in the future because our financial standing
can be considered to have become quite strong.
*Acronym for post-merger Integration. It refers to the integration process
after M&A is completed.

Investments in past three years
We invested proactively to expand the trading business.

(Billions of yen)

FY2017FY2018FY2019NC2020
Cumulative value
from FY2017

Growthinvestment

3.86

2.31

1.85

8.03

Fixed
investment

1.59

2.03

2.01

5.63

Total

5.45

4.34

3.86

13.66

Major growth investments in FY2019(Billions of yen)

Information& Electronics

Plastics

Start-up loans
Plantrelocation
loans
Facilities, etc.

Life
Industry

Q Tell us about shareholder returns.
A We are aiming for stable and steady
dividends with a rough estimate of
30-35% total return ratio.

One of our company’s key strategies is to return profits toshareholders, and we aim to pay stable and steady
dividends. As a basic policy, we seek to keep a 30% to
35% total return ratio as a rough estimate based on ashareholder return equivalent to the total of amount ofdividend and acquisition of own stocks. Although notincluded in the basic policy, we place more importanceon dividends and would like to steadily increase theiramount if possible. The annual value of dividend pershare for FY2019 was revised upward by 5 yen from theinitial estimate and now stands at 53 yen per share.
In the future, too, we will keep striving to maintain an
appropriate balance between growth investment,
strengthening financial standing, and return on equity inthe distribution of dividends. We seek to live up to yourtrust and expectations by striving for sustained growthand improvement in corporate value so that ourshareholders will feel happy to own our shares for thelong term.

0.50 (related to mask blanks)

Dividends per share
0.54 (related to specialty paper)

(yen)
60

53
48

0.17 (related to inflation molding)
40

Share
acquisition

0.15 (related to pharmaceuticals)

Financing

0.10 (related to regenerative medicine)

33

36

40

40

20

0

FY2014 FY2015 FY2016 FY2017 FY2018 FY2019

Inabata Integrated Report 202024

Financial and Nonfinancial Highlights

Financial Highlights

Net sales

Total assets and net assets
Total assets(Billions of yen)(Billions of yen)

600

300

800

Net profit per share

Dividends per share and shareholder return indexes

(yen)

(yen)

(%)

40

60

20

30

Net assets

Dividends per share

400

250

Payout ratio

Total return ratio

60

90

200

150
400

200
100

200

0

100

0

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
(Fiscal year)

Operating profit(Billions of yen)
15

50

2010

2011

2012

2013

2014

2015

2016

2017

2018 2019(Fiscal year)

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
(Fiscal year)

Nonfinancial Highlights

Equity capital and net D/E ratio
Equity capital

Net D/E ratio(Billions of yen)(Times)

200

0

2.0

Number of employees: Consolidated and unconsolidated
Consolidated

Unconsolidated02010 2011 2012 2013 2014 2015 2016 2017 2018 2019
(Fiscal year)* The total return ratio has become the shareholder return index since FY2014.

Local employees engaging in tradingbusiness outside Japan and expats from Japan
Local employees(People)150

0Expats from Japan(People)

5,000

1,000

4,000

800

3,000

600

2,000

400

1,000

200

1.5

10
100

1.0

50

0.5

0

0

5

0

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
(Fiscal year)

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
(Fiscal year)

0

2011

2012

2013

2014

2015

2016

2017

Note: Figures are as of the end of March of each FY.

Ordinary profit(Billions of yen)
15

Net profit and ROE
Net profit

ROE(Billions of yen)

(%)

15

30

2018 2019(Fiscal year)

CO2 emissions

0

2011

2012

2013

2014

2015

2016

Note: Figures are as of the end of March of each FY.

20172018 2019(Fiscal year)

Power used and paper purchased(t-CO2)

Power used

800

(1,000kWh)
2,000

Paper purchased(1,000 sheets)
8,000

600
10

20

10

400
5

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
(Fiscal year)

25 Inabata Integrated Report 2020

0

6,000

1,000

4,000

500

2,000

0

0

10

5

200

0

1,500

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
(Fiscal year)

0
0

2010

2017 2018(Fiscal year)
Scope: Osaka Head Office, Tokyo Head Office, Nagoya Branch
Note: CO2 emissions have been calculated from the amount of power usedbased on the CO2 emission factor for usage of power
2011

2012

2013

2014

2015

2016

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
(Fiscal year)
Scope: Osaka Head Office, Tokyo Head Office, Nagoya Branch

Inabata Integrated Report 202026

At a Glance

Inabata has expanded its business with chemicals at the core. We separated those fields that showed
the potential for growth to make them independent. At present, we deal in four segments: information& electronics, chemicals, life industry and plastics. Trends in our performance in Japan and abroad showthat overseas business has been our growth driver in recent years. Our long-term IK Vision 2030 – how
Inabata envisions itself around 2030 – targets an overseas sales ratio* of 70%.

Breakdown (Sales)

Breakdown (Operating profit)

FY2019FY2019

Sales by business segment
Information & Electronics

Information & Electronics

ChemicalsLife Industry

Plastics(Housing & Eco Materials)(Food)(Billions of yen)800 Bursting of the dot-com bubble

Sales

Operating profit

218.6 billion JPY

4.4 billion JPY

37%

34%

Lehman Brothers’ collapse

600

400

200

0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

(Fiscal year)

Operating profit by business segment
Information & Electronics(Billions of yen)

Chemicals

ChemicalsLife Industry

Plastics(Housing & Eco Materials)(Food)

15
12

Sales

12%

74.1billion JPY

Operating profit

9%

1.2 billion JPY

9

The chemicals segment has along history and is performing
steadily based on its strong
foundation of business partners.
The plastics segment has
expanded its business since therapid economic growth in the
1950s, ranging from home
appliances, OA to automobiles.
The information & electronics
segment grew significantly alongwith the rapid growth of the LCD
market from 2000 onward.
The life industry segment has
started activities in the fields ofagriculture and advanced
medicine in recent years and canbe expected to grow in the future.

6
3
0
-3

Impact of including allowance of doubtful accounts at a European subsidiary→
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

(Fiscal year)*1 In FY2012, the life science business of the former chemicals business and the former food business were integrated to form the life industry business.
*2 In FY2019, housing & eco materials buiness was integrated with the chemicals business.

Sales by domestic or overseas market

Life Industry

Japan(Billions of yen)
Sales

6%

36.9 billion JPY

Operating profit

9%

1.1 billion JPY

Abroad500 Bursting of the dot-com bubble

Lehman Brothers’ collapse
Overseas sales 53%

400
300
200
Overseas sales 25%100
02000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

(Fiscal year)

Operating profit by domestic or overseas market

Plastics

Japan(Billions of yen)
Sales

45%

270.3 billion JPY

Operating profit

47%

6.2 billion JPY

8Inabata established its firstpost-war overseas subsidiary in
1976 and has been rapidly
intensifying its global business inalignment with production
transfer by Japanese companies
to locations outside Japan. Overthe 40 years since, its overseas
business has expanded, and thepercentage of overseas sales hasgrown from 25% in FY2000 to
53% in FY2019.

AbroadOverseas operating profit

54%

7
6
5
4
3
2

Overseas operating
profit 26%

1*Overseas sales ratio refers to the proportion of sales by overseas bases located in each region in consolidated sales.

27 Inabata Integrated Report 2020

0

Impact of including allowance of doubtful accounts at a European subsidiary→-12000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

(Fiscal year)

Inabata Integrated Report 202028

Segment Overview
Location of major bases and composition of products and materials
Base

Information & Electronics

Environment
and energy

With display components, digital printing materials, materials forsemiconductors and other products as our income-generating
pillars, we are also venturing into new fields such as agriculture,
automobiles, and life sciences. We are also increasing ourachievements in IoT and renewable energy-related products,
which are expected to grow in the near future.

Semiconductors
Toyohiro Akao

Masahiro Sugiyama

Director,
Senior Managing
Executive Officer

Director,
Managing Executive Officer

NC2020 Targets for the third year (FY2019)

Sales

Operating profit

Sales 250 billion JPY(Billions of yen)(Billions of yen)

300

6

214.9

• Although there was an increase in sales in the
LCD-related business, decreased transactions dueto the restructuring of European subsidiaries(related to solar-cell business) and shelving of lessprofitable trade (related to OA business) resulted inunachieved targets.

4.81

4.48

218.6

217.9

200

3

100

0

-2.04

• Operating profit exceeded the target value mainly
due to the increase in the LCD business.

0

FY2017FY2018FY2019-3

FY2017FY2018FY2019

Digital printing

Semiconductors

Business environment (Continued growth of theChinese market
Expansion of display parts forautomobiles
Addressing intensifying
competition and changes in trends

Displays

Expansion of the industrial
inkjet market
Advancement of paperlessenvironments

Action 1

Action 2

Selling mounting materials and panel materials toautomobile display makers

Selling ink materials and peripheral components
for the industrial inkjet market

With technological advancements in the field of LCDs
and OLEDs, automobile displays are now available invarious shapes, such as super-long, irregular and curved
screens. As these can also be used in instrument panel
displays, center information displays, and others, thetotal surface area on which displays are installed in eachcar is expected to increase drastically.

Inkjet printers, which offer low running cost andhigh-speed printing, are spreading in the consumer andoffice markets for digital printing. The industrial printing
market too is turning to digital inkjet printing in place of
conventional analog printing. The market for inkjet
printers is likely to expand as their usage is spreading toprinting of signages, textiles, business, packaging, andconstruction materials among others.

Therefore, we are focusing on selling various optical film
materials, such as polarizing films, and cover glass aswell as other mounting materials, in addition to panel
materials such as alignment materials for LCDs andvarious materials for OLEDs.

Business environment and strategies
Displays

Digital printing

Efforts to achieve the midterm business plan

Segment performance overview

Operating profit 4.2 billion JPY

OthersOpportunities

Environment and energy

To address this growing market, we will leverage the
network we have built over the years and continue toexpand our business by proposing ink materials andperipheral components and expanding sales globally todomestic and overseas markets.

Risks )

Expansion of IoT- and
MaaS-related markets
Intensifying global competition

Increase in global interest in
renewable energy
Addressing variations in related
laws and regulations in different
countries and regions

Strengths
Top-level information network in
Specialized skills in mask blanks,
A wide array of renewableeach industry as a trading
which is one of our key productsenergy materials
company
A global network to maintain closeness with customers and the capability of providing processing and distribution services

Collaboration with major Japanesematerials manufacturers

Activities and strategies
Focus business resources on
the growing Chinese market
Expand product line-up centeredon components related to displays

29 Inabata Integrated Report 2020

Set up at the earliest a supply
system for new materials withrising demand
Start new transactions withmaterial makers and expand
product line-up

Expand product line-up forautomobiles and strengthen
supply system
Propose total solutions forindustrial materials

Start multidimensional new
businesses catering to different
regions and needs
Develop employees withspecialized knowledge

Toward sustainable growthOffering various business activities in the renewable energy field
We will continue to contribute to resolving energy issues by expanding our products and materials in the renewable energy
field, such as devices for generating hydrogen, small wind turbines, and fuels for biomass power generators using imported
palm kernel shells and other materials, with solar cells as well as lithium-ion battery materials and components as the core.
We are also focusing on IoT, which can connect things and people, and enable sharing and effective use of information andknowledge. We have also started dealing in devices, communication technology, servers and clouds, which comprise IoT.

Inabata Integrated Report 202030

Segment Overview
Location of major bases and composition of products and materials
Base

ChemicalsWith firm roots in our founding business of dyes, we deal in chemicals that serve as aplatform for all kinds of industries. We have a track record of separating businesses thatshow growth and pursuing new potential. We paved our way into global markets when
the domestic market matured. In April 2019, we integrated the Housing & Eco Materials
Division, which was dealing with materials that are close to final products, to provide
optimum products and services to the entire value chain.

Dyes and others
Construction materials
Tomohiko Sato
Director,
Managing Executive Officer

NC2020 Targets for the third year (FY2019)

Sales

Operating profit

Sales 91.7 billion JPY(Billions of yen)(Billions of yen)

100

3

76.7

• Although sales were favorable for some products andmaterials, such as thermal interface materials for electricvehicles (EVs), targets could not be achieved because
overall business was sluggish, including sales of
construction materials which was part of the former
housing & eco materials business.
• Operating profit targets were also not met mainly due tothe impact of unachieved sales targets. This segment
was integrated with the former housing & eco materials
business from this fiscal year, initiating a new chemicals
business. However, increase in efficiency within thebusiness and other impacts of the integration are yet
to manifest.

77.5

74.1
2

1.42

50

1.20

1

0.41
0

FY2017FY2018FY20190

FY2017FY2018

Coating materials

Automobile component
materials

Business environment (Increase in need for materials
and new formulations in light ofenvironmental regulations
Unstable supply of materials andprice fluctuations

Increase in demand centered on
developing countries
Response to global industrial
restructuring
Advancement of paperlessenvironments

Opportunities

Expansion in demand for new
materials along with the structural
revolution of automobiles
Localization of production
Industry-specific quality control
standards and responsibility ofsupplyNeed for construction anddistribution innovations in lightof labor shortage
Increase in the need forhigh-quality Japaneseconstruction materials abroad
Sluggishness of the domestic
marketA wide range of products and materials spreading from upstream todownstream
Local handling through overseas manufacturing and processing basesof the Group

Activities and strategies

31 Inabata Integrated Report 2020

Collaborate with Japanesecompanies expanding overseas
Expand business by leveraging
consigned production andprocessing companies(Action 1 on P32)

Further expansion of overseas business withprocessing of paint materials for automobiles

Expansion of product line-up fornext-generation mobilityGroup company Shanghai Inabata Fine Chemical Co.,
Ltd. processes hardener for urethane paint used in top
coatings of automobiles and automobile repairs among
other purposes. The Chinese market for urethane paints
is expected to continue expanding in the future.

We are building a global supply structure, including
processing, for material used in thermal interface material
manufactured by companies in which we invest, while
expanding sales of thermal interface materials for EV
markets and expanding the product line-up for various
components offered in connection with lithium batteries.

As regulations for manufacturing dangerous goods aretightened in China, we will also strive to become aprocessing company dealing in mixing and subdividing
chemicals other than hardeners used in urethane paints,
while also taking on the challenge to expand horizontally inother countries by making maximum use of our network.

We are also striving to expand sales of functional coverlens processing and films for automobile displays usedin various applications, particularly in Europe.

Construction materials

Strengths

Develop and offer new materials
and new formulation solutions
Accelerate overseas expansion
using the Group’s strengths
Strengthen BCP structure

Action 2

Risks )

Sales demand from foreign makers

Knowledge of chemicals and a customer base nurtured over 130 years
Ability to build a supply chain suited to customer needs

Action 1

FY2019*FY2017 and FY2018 figures are the segments’ sums before integrating the
housing & eco materials segment.

Business environment and strategies
Functional chemicals

Coating materials

Automobile component materials

Efforts to achieve the midterm business plan

Segment performance overview

Operating profit 2.0 billion JPY

Functional
chemicals

Expand EV-related products andmulti-display-related products
and materials (Action 2 on P32)

Collaborate with major housemakers for overseas expansion
Propose a supply chain
leveraging our strengths

Toward sustainable growthInterpreting environmental regulations on chemicals as an opportunity and continuing tooffer new eco-friendly products and materials
Recent years have seen a global spread of stronger environmental regulations and efforts to eliminate plastics. Even thoughthese developments are resulting in the replacement of existing products and materials and present the risk of businessshrinkage, they also provide an opportunity to offer new products and materials and gain new customers. In the chemicals
segment, we continue to develop and explore new products and materials that reduce environmental impact and also strive
to adhere to the regulations in each country or region and strengthen BCP.
We will provide services of high value as experts in chemicals by helping in obtaining permission and authorization during
import and export of products, quality checks by third party institutions and other services.

Inabata Integrated Report 202032

Segment Overview
Location of major bases and composition of products and materials
BaseLife Industry
After handing over the pharmaceuticals business to Sumitomo Pharmaceuticals Co., Ltd.
(now Sumitomo Dainippon Pharma Co., Ltd.) in 1984, we began selling pharmaceuticalsubstances as our main business in this field. The origin of the food business goes back tothe sale of cornstarch to the food industry. In 2012, we launched the life industry segment
because we believe that medical products as well as food products contribute to creating ahealthier and more comfortable life for consumers.

Home products

Food products
Toyohiro Akao

Pharmaceuticals

Director,
Senior Managing
Executive Officer

Efforts to achieve the midterm business plan

Segment performance overview
NC2020 Targets for the third year (FY2019)

Sales

Operating profit

Sales 59 billion JPY(Billions of yen)(Billions of yen)60

3

Operating profit 2.5 billion JPY

42.3• The sales target was not achieved because of adecrease in transactions due to tighter environment
regulations related to life sciences in China, fluctuationin sales of materials for pesticides and delay in starting
new projects in the food products field.
• The target for operating profit was not achieved
mainly because the sales target was not met.

39.0

36.9

2

1.92
1.31

30

1.16

1

0

FY2017FY2018FY20190

FY2017FY2018FY2019Action 1

Action 2

Taking on the cell supply business in theregenerative medicine field

Blueberry production in Yoichi, Hokkaido

One of the company’s management strategies is to focus
on the field of life sciences and medicine, and working in
the advanced medicine field centered on regenerative
medicine is particularly important for our business. In
January 2020, Inabata concluded a memorandum with
Human Life CORD, Inc., a regenerative medicine venturein which the company is investing, for establishing a
supply structure for cells originating in the umbilical cord.
We are working on a joint business for treatment ofcomplications in leukemia treatment.

Business environment and strategies
Food productsHome products

Pharmaceuticals

Business environment (Expansion of advanced medicine andregenerative medicine markets
Intensifying price competition due to theemergence of generic medicines
Unstable supply of materials

Opportunities

Risks )

Expansion in demand for Japanese products
in drugstores in the Asia region
Speed of change in market trends

Increase in interest in safety of food products
Boom of Japanese food overseas
Easing of agriculture and fishery regulationsin JapanSluggish domestic demand
Quality risks specific to food products

Inabata established Aikei Farms Yoichi Co., Ltd. in 2015 in
the town of Yoichi, Hokkaido for cultivating blueberries
and other agricultural products. This company is a joint
venture with vendor involved in blueberry farming in
Canada and was set up with cooperation from partner
businesses related to local agriculture. We cultivate
blueberries at a roughly 200,000 square meters farm. In
2019, we carried out test harvesting and also tested sales
within Hokkaido and distribution to Honshu. In 2020, we
carried out real business harvesting. We concluded aComprehensive Partnership Agreement with Yoichi town
in December 2018 with the objective to vitalize the region
through expansion of sales channel from products. We
will continue to engage incommunity-based businessthat generates synergy
through a collaboration
between our strengths andYoichi town’s agricultural andmarine resources andmanufactured products.

Toward sustainable growth
Strengths
Collaboration with superior suppliers and information network on latest research and development
Strength of processing and distribution services using Group bases

Years of knowhow on a broad businessrange from production to distribution

Teams and individuals with specialized knowledge on each field

Activities and strategies
Expand peripheral solutions in advanced andregenerative medicine
Catch up with and provide information on
PMD Act and cellular medicine

33 Inabata Integrated Report 2020

Support expansion and development ofJapanese products for Asian markets
Maintain hygiene management-related products
business, which is a stable profit base
Catch up with latest development trends

Accelerate expansion to overseas markets
Strengthen upstream businesses, such as
blueberry production (Action 2 on P32)
Start new food processing business as
downstream business

Taking on the challenge of new businesses for the future, in light of the aging populationin domestic agriculture and fisheries industries
In Japan, a labor shortage in agriculture and fisheries is intensifying due to the diminishing birthrate and aging population,
giving rise to a social challenge. This has led to easing of regulations, creating new opportunities for corporations to enter themarket. To resolve such social issues, we are striving for large-scale farming and machine harvesting at a blueberry farm in
Yoichi, Hokkaido. In the fisheries field, we started a wholesale business of fresh marine products at the Amagasaki
wholesale market that deals mainly in marine products and had been facing a shortage of labor.
Stable supply of food is an important topic, and we will continue to take on new challenges to offer full-fledged businesses
that can support agriculture and fisheries in the future.

Inabata Integrated Report 202034

Segment Overview
Location of major bases and composition of products and materials
Base

Plastics
We started dealing in imported vinyl chloride resin in 1949, and in 1959 we became the firstin Japan to import and sell polypropylene. Currently, we sell everything from commodity
resins and high-performance resins for various fields such as automobiles, home
appliances, OA equipment, soft packaging for food, and sporting materials. As the plastic
waste problem intensifies, we are also striving to develop products focused on biomass
materials such as biodegradable plastics as well as composites of CNF and plastic.

Materials for automobiles
Others
OA, electrical andelectronic products
Noriomi Yasue

Films and sheets

Director,
Managing Executive Officer

Efforts to achieve the midterm business plan

Segment performance overview
NC2020 Targets for the third year (FY2019)

Sales

Operating profit

Sales 299 billion JPY(Billions of yen)(Billions of yen)

400

8Operating profit 5.6 billion JPY

286.9• The sales target was not met due to the impact of afall in resin prices, the spread of COVID-19 toward
the end of the consolidated accounting year andother factors.
• Although operating profit was impacted by thelower-than-expected sales, profitability improved
due to increased sales of high-performance resin forautomobiles and other industries, and operating
profit far exceeded our target. With this, weachieved the final year NC2020 target for thissegment one year in advance.

300.0

6.34

200

0

5.54

270.3

6.23

4

FY2017FY2018FY20190

FY2017FY2018FY2019

Molding materials

OA, electrical andelectronic products

Business environment (Need forenvironment-consideration
with weight reduction
Expansion in demand formaterials due tocompositional changes in
automobile industry
Industry-specific quality
standards andresponsibility to supply

Scope for expansion ofoverseas business
Withdrawal of a major
general trading company
that was a rival
Fluctuations in domestic
demandOpportunities

Stable demand among
Japanese OA devices
manufacturer
Reduction in supply
volume due to reduction
in component size

Films and sheets

Action 2

Employing national staff as managers atoverseas bases

Trash bags and shopping bags using
biomass materials

The plastics segment has the largest number of expats
from Japan working overseas in our company. However,from about 10 years ago, we have been following the basic
policy of leveraging local employees at overseas bases andhave been employing and training them at each base. As aresult, local employees are working as managers in
Thailand and Singapore at present and they are managing
and supervising staff including young expats from Japan.

Group company Ordiy Co., Ltd. manufactures and sells
plastic products and deals in a wide range of eco-friendly
products, including trash bags and shopping bags madefrom plant-based biomass plastics. Therefore, theplastics segment is collaborating with Ordiy, which
possesses high development ability, for developing
further usages of biomass plastics, special paper toreplace plastics for food products as a pioneer of a broadarray of products that will lead to expansion of themarkets in the environment and energy fields.

Sporting materials

Risks )
Broad scope for opening
new markets for sheet
products
Intensifying competition
for film products indomestic market

Expansion of global
marketShrinking domestic
market due todiminishing population
BP25 Biomass plastic bags No.353

Global environmental issues including pollution of oceans due to micro plastics

Toward sustainable growth

Strengths
A customer base built over the company’s long history

Detailed local response capability using network of bases around the world
Ability to provide added value including plastic compounding in own factories and VMIs

Ability to propose monomaterials and eco materials
from outside of Japan

High share in nichemarkets

Ability to develop and propose new products using own
manufacturing bases in Japan and abroad

Activities and strategies
Strengthen and expand overseas business structure (Action 2 on P36)
Strengthen and expand plastic compounding and distribution function

35 Inabata Integrated Report 2020

Action 1

We will continue to promote building global humanresource management, including overseas stationing of
Head Office employees.

Business environment and strategies
Materials forautomobiles

Molding materials

Enter biodegradable
biomass plastic business

Offer products foroverseas markets as wellas other sporting fields

Initiating commercial production of biodegradable biomass plastic as a solution to theissue of marine plastic pollution
The problem of marine pollution due to plastic waste is intensifying globally. In such circumstances, we focused on
biodegradable biomass plastic that does not burden the environment and initiated NuPlastiQ developed by BiologiQ of the
U.S. with waste potatoes as raw material.
This material can be blended with other plastics and processed into films and sheets and bottles. To expand thebiodegradable biomass plastic business in the real sense, we initiated commercial production at our factory in Thailand,
which is engaged in plastic compounds business.

Inabata Integrated Report 2020

36

Global Network

Inabata’s network extending acrossabout 60 bases in 17 countries worldwide
Trading company
Manufacturing & processing base

EuropeThe Americas
Northeast AsiaJapan
The Americas

Europe249

Northeast Asia

626

Southeast Asia

EuropeGermany
FranceU.K.
TurkeyDusseldorf
Wissous(suburb of Paris)
Normandy
Telford(suburb of Birmingham)
Istanbul

Southeast Asia and India

Northeast Asia

Singapore
Malaysia
Indonesia

China

Philippines
VietnamThailandMyanmarIndia

37 Inabata Integrated Report 2020

Kuala Lumpur, Penang, Johor
Jakarta, Surabaya
Bekasi (suburb of Jakarta)
Binan (suburb of Manila)
Hanoi, Ho Chi Minh City
Haiphong, Da Nang
BangkokSamut Prakan(suburb of Bangkok)
Ayutthaya
Sriracha(suburb of Laem Chabang)
YangonGurugram (suburb of Delhi)
Chennai, Pune

TaiwanSouth Korea

Hong Kong
ShanghaiWuxi, Ningbo
ChengduNanjing, Hefei
Chongqing
Beijing, Dalian
Tianjin
Guangzhou
Wuhan
ShenzhenHsinchu, Tainan
Taichung, Taipei
Seoul

69
Consolidated
number of
employees by location
Total

4,282

*As of March 31, 2020

Japan

924

Southeast Asia

2,414

Japan

The Americas

Tokyo
Osaka
NagoyaShiojiri
Hamamatsu
Kirishima

United States New York
Los Angeles
Detroit
Novato (California)
MexicoQueretaro
Tijuana
Silao
Brazil
Sao Paulo

Inabata Integrated Report 2020

38

Global Network

Overview by Region
The Americas

Europe

3.7 %

1.3 %

(21.9 billion yen)

Northeast Asia

25.3 %Southeast Asia

We are expanding our business utilizing 10 manufacturing andprocessing bases in the region.

Consolidated number of employees*(7.6 billion yen)

Trading company

India

47.3 %

billion yen(283.9 billion yen)

22.4 %(134.6 billion yen)Japan

Manufacturing & processing base

Gurugram

Japan

600.3

billion yen*Sales figures are for FY2019. The number of employees is as of March 31, 2020.

FY2019 sales by region
Total(152 billion yen)

134.6
2,414

Southeast Asia and India

Sales*

Myanmar

Pune

Shinya Kawai
Executive Officer
General Manager, Southeast Asia

Chennai

Hanoi

Haiphong

Vietnam
YangonAyutthaya Da Nang
BangkokSamut Prakan
Sriracha
Ho Chi Minh City
ThailandSoutheast Asia is an important region where about 80%(roughly 150,000 tons annually) of our plastics compound
production capacity is located. The compounding is our key
business. We supply plastics mainly in the three areas ofelectrical and electronic products, OA, and automobiles. We
will expand business for the automobile field, which is growing
rapidly in the region, while initiating plans to incorporate new
demand in the fields of eco-friendly products, solar and otherenergy-related products, agriculture, and food products.

PenangKuala Lumpur

Binan

Philippines

Malaysia
Johor

Singapore
Indonesia

JakartaBekasiSurabaya

Manufacturing & processing bases

Manufacturing & processing bases

I & P Co., Ltd.
[Osaki, Miyagi]
Molding and processing of synthetic resins

Ikkoen Co., Ltd.
[Sakai, Osaka]
Processing of marine products

Inabata Optech Co., Ltd.*[Kawasaki, Kanagawa]R&D and manufacturing of encapsulants
for optical semiconductor devices

N • I • C Co., Ltd.
[Joso, Ibaraki]
Processing of plastic film products

PT. IK Precision Indonesia[Bekasi, INDONESIA]
Molding and processing ofsynthetic resins

PT. Inabata Creation Indonesia[Bekasi, INDONESIA]
Processing of grip tape for
sporting goods

PT. S-IK Indonesia[Bekasi, INDONESIA]
Compounding of resins

SIK Color(M)Sdn. Bhd.
[Johor, MALAYSIA]
Compounding of resins

IK Plastic Compound Phils. Inc.
[Binan, PHILIPPINES]
Compounding of resins

Apple Film Co., Ltd.
[Samut Prakan, THAILAND]
Manufacturing of plastic films

Hi-Tech Rubber Products Co., Ltd.
[Ayutthaya, THAILAND]
Molding and processing of
rubber products

SIK(Thailand)Ltd.
[Samut Prakan, THAILAND]
Compounding of resins

Apple Film Da Nang Co., Ltd.
[Da Nang, VIETNAM]
Manufacturing of plastic films

SIK Vietnam Co., Ltd.
[Haiphong, VIETNAM]
Compounding of resins*The photo is Kanagawa Science Park inwhich Inabata Optech is located.

Kansai Kobunshi Co., Ltd.
[Yamato-Koriyama, Nara]
Manufacturing of plastic films

Consolidated
subsidiaries

Taiyo Plastics Co., Ltd.
[Hasuda, Saitama]
Manufacturing of plastic films

Trading company

Manufacturing & processing base

Consolidated subsidiaries
Inabata India Private Ltd.
PT. IK Precision Indonesia
PT. Inabata Creation Indonesia
PT. Inabata Indonesia
PT. S-IK Indonesia
Inabata Malaysia Sdn. Bhd.
SIK Color (M) Sdn. Bhd.
IK Plastic Compound Phils. Inc.
Inabata Philippines, Inc.
Inabata Singapore (Pte.) Ltd.
Apple Film Co., Ltd.
Hi-Tech Rubber Products Co., Ltd.
Inabata Thai Co., Ltd.
SIK (Thailand) Ltd.
Apple Film Da Nang Co., Ltd.
Inabata Vietnam Co., Ltd.
SIK Vietnam Co., Ltd.

I & P Co., Ltd.
Ikkoen Co., Ltd.
Inabata Fine Tech Co., Ltd.
N • I • C Co., Ltd.
Ordiy Co., Ltd.

Osaki, Miyagi
Sakai, Osaka
Osaka
Tokyo
Osaka

Kansai Kobunshi Co., Ltd.
Taiyo Plastics Co., Ltd.

Yamato-Koriyama, Nara
Hasuda, Saitama

Molding and processing of synthetic resins
Processing and sale of marine products
Sale of chemicals
Processing and sale of plastic film products
Processing of plastic film products and packaging materials,
design and marketing of supplementary equipment and systems
Manufacturing of plastic films
Manufacturing of plastic films

Equity-method
affiliates

Ulvac Coating Corp.
NI Packs Co., Ltd.
Clean Assist Co., Ltd.
Maruishi Chemical Trading Co., Ltd.

Chichibu, Saitama
Inashiki, Ibaraki
Tokyo
Osaka

Manufacturing of electronics and optical industrial materials
Printing and molding of plastic packages
Sale of plastic films and plastic sundries
Sale of chemicals

Other affiliates

Aikei Farms Shakotan Co., Ltd.
Aikei Farms Yoichi Co., Ltd.
Inabata Optech Co., Ltd.

Shakotan, Hokkaido
Yoichi, Hokkaido
Kawasaki, Kanagawa

Production and sale of agricultural products
Production and sale of agricultural products
Research and development, manufacturing and sale ofencapsulants for optical semiconductor devices

39 Inabata Integrated Report 2020

Gurugram (suburb of Delhi)
Bekasi (suburb of Jakarta)
Bekasi (suburb of Jakarta)
JakartaBekasi (suburb of Jakarta)
Kuala Lumpur
Johor
Binan (suburb of Manila)
Binan (suburb of Manila)
Singapore
Samut Prakan (suburb of Bangkok)
Ayutthaya
BangkokSamut Prakan (suburb of Bangkok)
Da Nang
Hanoi
Haiphong

Import & export and sale of synthetic resins, electronic materials and chemicals
Molding and processing of synthetic resins
Processing of grip tapes for tennis rackets
Import & export and sale of synthetic resins and chemicals
Compounding of resins
Import & export and sale of synthetic resins
Compounding of resins
Compounding of resins
Sale of synthetic resins
Import & export and sale of synthetic resins, chemicals and electronic materials
Manufacturing of plastic films
Molding and processing of rubber product
Import & export and sale of synthetic resins, chemicals, food, and machinery
Compounding of resins
Manufacturing of plastic films
Import & export and sale of synthetic resins, electronic materials and chemicals
Compounding of resins

Inabata Integrated Report 2020

40

Global Network

152.0
626

Northeast Asia

Sales*We leverage our network across 19 cities in China, Taiwan, andSouth Korea to develop our core businesses.

Consolidated number of employees*

billion yen

In addition to our businesses in the United States and Mexico, we areworking toward expansion in South America with a focus on Brazil.

Consolidated number of employees**Sales figures are for FY2019. The number of employees is as of March 31, 2020.
Trading company

Beijing

Kazuhiro Hanaki
Executive Officer
General Manager, Northeast Asia

In Northeast Asia, we sell materials related to liquid crystal
displays (LCDs) and plastics in our focal fields such as
automobiles, OA, and electrical and electronic products toJapanese and non-Japanese customers. We are also
proposing new materials as environmental regulations on
chemicals become tighter. In the future, we will also focus
on tapping new businesses based on trends in foodsafety, environmental consideration, life sciences, andenergy among other fields.

Tianjin

Seoul

China

ChengduChongqing

Hefei
Wuhan

Nanjing
Wuxi
ShanghaiNingboShenzhenHong Kong

TainanJapan
Shiojiri

Osaka

Taipei
Guangzhou

South Korea

KirishimaTokyo

Hamamatsu
NagoyaHsinchuTaichung

Trading company

In the Americas, we operate a broad range of businesses, including imaging,semiconductors, solar cells, automobiles, food products, andpharmaceuticals. We are particularly committed to providing added value toour business partners by demonstrating such functions as designing,planning, manufacturing, and distributing. We will focus on expanding thefood products business that we have integrated with Group company DNI,
and the resin business in Mexico.
Manufacturing &processing base

IK Plastic Compound Mexico, S.A. de C.V.
[Silao, MEXICO]Compounding of resins

Inabata Industry & Trade (Dalian F.T.Z.) Co., Ltd. Shanghai Inabata Fine Chemical Co., Ltd.
[Dalian, CHINA][Shanghai, CHINA]
Compounding of resins
Processing of coating materials

Manufacturing & processing baseDetroit
Novato
New York
Los Angeles United States
Tijuana
MexicoSilaoQueretaro

Brazil
Sao Paulo

Consolidated subsidiaries
IK Plastic Compound Mexico, S.A. de C.V.
Inabata Mexico, S.A. de C.V.
NH Inabata, S. de R.L. de C.V.
DNI Group, LLC
Inabata America Corp.

TaiwanManufacturing & processing bases

billion yen*Sales figures are for FY2019. The number of employees is as of March 31, 2020.

Manufacturing & processing base

Dalian

21.9
249

The Americas

Sales*

Silao
Queretaro
Queretaro
Novato (California, U.S.A.)New York

Compounding of resins
Sale of synthetic resins
Designing, installation and sale of cranes
Import & export and sale of food
Import & export and sale of plastics,
materials related to information &electronics and chemicals

Sao Paulo

Sale of chemicals and synthetic resins

Other affiliates
Inabata Brazil Import & Export Ltd.

7.6
69

EuropeSales*

We operate businesses centered on chemicals, energy,
automobiles, industrial materials, life sciences and other fields,
taking advantage of our unique features and mobility.

Consolidated number of employees*

Consolidated subsidiaries

billion yen*Sales figures are for FY2019. The number of employees is as of March 31, 2020.

Guangzhou Inabata Trading Co., Ltd.

Guangzhou

Inabata Industry & Trade (Dalian F.T.Z.) Co., Ltd.
Inabata Sangyo (H.K.) Ltd.

DalianHong Kong

Shanghai Inabata Fine Chemical Co., Ltd.
Shanghai Inabata Trading Co., Ltd.
Inabata Korea & Co., Ltd.
Taiwan Inabata Sangyo Co., Ltd.

Shanghai
Shanghai
Seoul
Hsinchu

Import & export and sale of synthetic resins, machinery, electronic materials
and chemicals
Compounding of resins, Import & export and sale of synthetic resins and chemicals
Import & export and sale of synthetic resins, machinery, electronic materials
and chemicals
Processing of coating materials
Import & export and sale of synthetic resins and chemicals
Import & export and sale of electronic materials
Import & export and sale of electronic materials, semiconductor-related equipment
and chemicals

Trading company

In Europe, we deal in a wide range of products in the segments of
information & electronics, chemicals, plastics, and life industry. In Germany,for example, we sell products related to digital printing and imaging, energy,
automobiles, chemicals, and plastics. In France, we sell products related tolife sciences. We seek to tap new businesses in the fields of food products,
rechargeable batteries, and medicine.

U.K.

TelfordNormandy

Manufacturing & processing baseGermany

Dusseldorf
WissousFranceIstanbul

TurkeyOther affiliates
Tianjin Inabata Trading Co., Ltd.

Tianjin

Import & export and sale of synthetic resins and chemicals

Manufacturing &processing base

Consolidated subsidiaries
Inabata France S.A.S.
Pharmasynthese S.A.S.

Wissous (suburb of Paris)
Normandy

Inabata Europe GmbH

Dusseldorf

Inabata UK Ltd.

Telford (suburb of Birmingham)

Import & export and sale of chemicals
Manufacturing of pharmaceuticals, materials forcosmetics, and fine chemicals
Import & export and sale of electronic materials,
chemicals, and synthetic resins
Property management, warehousing

Pharmasynthese S.A.S.
[Normandy, FRANCE]
Manufacturing of fine chemicals

41 Inabata Integrated Report 2020

Inabata Integrated Report 2020

42

ESG Information

Corporate GovernanceManagement (As of July 1, 2020)

Directors

Audit & Supervisory Board Members
Katsutaro Inabata

Toyohiro Akao

Director, President

Director, Senior Managing Executive Officer
Information & Electronics, Life Industry,
the Americas, Europe

Jan. 1989 Joined Inabata & Co., Ltd.
Dec. 2005 Director, President (present)

Apr. 1982 Joined Inabata & Co., Ltd.
Jun. 2015 Director, Senior Managing Executive
Officer (present)

Kenichi Yokota

Tomohiko Sato

Director, Senior Managing Executive Officer
General Affairs, Information Technology,
Financial Management, Investor Relations,
Business Process Management, Risk Management,International Affiliate Management

Director, Managing Executive Officer
Chemicals, Human Resources
Apr. 1978 Joined Inabata & Co., Ltd.
Jun. 2015 Director, Managing Executive Officer(present)

Takashi Mochizuki

Nobukazu Kuboi

Yoshitaka Takahashi

Audit & Supervisory Board Member

Audit & Supervisory Board Member

Audit & Supervisory Board Member

Apr. 1978 Joined Inabata & Co., Ltd.
Jun. 2008 Executive Officer
Jun. 2018 Audit & Supervisory Board Member(present)

Jul. 2001 Joined Inabata & Co., Ltd.
Jun. 2017 Executive Officer
Jun. 2020 Audit & Supervisory Board Member(present)

Apr. 1977 Joined Honda Motor Co., Ltd.
Jun. 2009 Full-time Corporate Auditor, Yachiyo
Industry Co., Ltd.
Jun. 2014 Outside Audit & Supervisory Board
Member, Inabata & Co., Ltd. (present)

Katsuya Yanagihara

Satoshi Tamai

Jul. 1996 Joined Inabata & Co., Ltd.
Jun. 2017 Director, Senior Managing Executive
Officer (present)

Masahiro Sugiyama

Noriomi Yasue

Director, Managing Executive Officer
Information & Electronics (assisting),
Northeast Asia

Director, Managing Executive Officer
Plastics, Southeast Asia

Jul. 2002 Joined Inabata & Co., Ltd.
Jun. 2018 Director, Managing Executive Officer(present)

Apr. 1980 Joined Inabata & Co., Ltd.
Jun. 2018 Director, Managing Executive Officer(present)

Toshihisa Deguchi

Toshiyuki Kanisawa

Director

Director

Mar. 1990 Joined Sumitomo Chemical Industry Co.,
Ltd. (now Sumitomo Chemical Co., Ltd.).
Apr. 2017 Representative Director & Executive Vice
President, Sumitomo Chemical Industry
Co., Ltd.
Jun. 2019 Outside Director, Sumitomo Bakelite Co.,
Ltd. (present)
Jun. 2020 Director, Inabata & Co., Ltd. (present)

Apr. 1972 Joined Tokyo Gas Co., Ltd.
Apr. 2010 Representative Director and Executive
Vice President, Tokyo Gas Co., Ltd.
Jun. 2012 Vice Chairman and Senior Managing
Director, Japan Gas Association
Jun. 2017 Outside Director, Inabata & Co., Ltd.
(present)

Kiyoshi Sato

Kenji Hamashima

Director

Director

Apr. 1979 Joined Tokyo Electron Ltd.
Jun. 2003 President and CEO, Tokyo Electron Ltd.
Jun. 2011 Chairman of the Board, Tokyo Electron
Europe Ltd.
Nov. 2013 President, TEL Solar AG
Jun. 2017 Outside Director, Toshiba Machine Co.,
Ltd. (now Shibaura Machine Co., Ltd.)(present)
Jun. 2019 Outside Director, Inabata & Co., Ltd.
(present)
Outside Director, Mazda Motor Corp.
(present)

Apr. 1982 Joined Ushio Inc.
Apr. 1999 President and Chief Executive Officer,
Ushio America, Inc.
Nov. 2000 Chairman and Chief Executive Officer,
Christie Digital Systems USA, Inc.
Oct. 2014 President and Chief Executive Officer,
Ushio Inc.
Jun. 2020 Outside Director, Inabata & Co., Ltd.
(present)

43 Inabata Integrated Report 2020

Audit & Supervisory Board Member

Audit & Supervisory Board Member

Apr. 1995 Appointed as public prosecutor
Apr. 2006 Bar admission
Dec. 2007 Partner, Daiichi Legal Professional Corp.
(present)
Aug. 2015 Outside Director, Gunosy Inc.
Jun. 2018 Outside Audit & Supervisory Board
Member, Inabata & Co., Ltd. (present)

Apr. 1984 Joined Sumitomo Corp.
Oct. 1991 Joined Century Auditing Corp.(now Ernst& Young ShinNihon LLC)
Mar. 1995 Registered as certified public accountant
Jul. 2017 Representative of Satoshi Tamai Certified
Public Accounting Office (present)
Oct. 2017 Senior Advisor, accrea Inc. (present)
Mar. 2018 Outside Auditor, Toho Lamac Co., Ltd.
(present)
Jun. 2020 Outside Audit & Supervisory Board
Member, Inabata & Co., Ltd. (present)
Outside Auditor, PC Depot Corp.
(present)

Executive Officers
Yoshiya Oda

Hiroyuki Hatamoto(President, Maruishi Chemical Trading Co., Ltd.)

General Manager, Risk Management OfficeKazuhiro Hanaki

Shinya Kawai

General Manager, Northeast Asia

General Manager, Southeast Asia

Yutaka Takahashi

Koji Nakano

General Manager, Chemicals Division

General Manager, Plastics Division I

Notes:
Directors Toshiyuki Kanisawa, Kiyoshi Sato, andKenji Hamashima are outside directors.
Audit & Supervisory Board Members Yoshitaka
Takahashi, Katsuya Yanagihara, and Satoshi Tamai
are outside audit & supervisory board members.
The information provided in the parenthesis
about the executive officers refers to seconded
posts held at other organizations.

Inabata Integrated Report 2020

44

ESG Information

Corporate GovernanceInterview with an Outside Director

Toshiyuki Kanisawa
Outside Director

Inabata ensures transparency in its board meetings
through active discussions based on specialized
knowledge and the experience of outside directors. We
received frank opinions on the characteristics ofcorporate governance and future challenges from
Toshiyuki Kanisawa who has been an outside director
since June 2017. Toshiyuki Kanisawa was involved in
the management of Tokyo Gas, an energy company
indispensable to people’s lives, for years and has been
engaged in operating the company, which combines
public interest and enterprise.

Q

Are discussions held actively in the board
meetings held at Inabata?

are raised and discussions are
A Proposals
held on investment as well as withdrawal
projects as appropriate.

I joined this company about three years ago and I think thatthe chairperson of the board is appropriately appointed,
discussions are open and proactive, and the way in which
the meetings are being held is great.
I also feel that the discussions are held from a moremedium- to long-term focus rather than a short-term
perspective. We discuss topics such as the progress anddegree of achievement of NC2020, which is the company’s
midterm business plan.
Iabata is in the trading business, and active discussions areheld on investment and withdrawal projects in our
executive-level Shinsa Kaigi meeting. Proposals and

45 Inabata Integrated Report 2020

deliberations are made appropriately at the board meeting
based on them.
We also evaluate the effectiveness of the board of directors
and I have been constantly involved in it as one of theevaluators for self-evaluation. I think we are mostly
progressing well even in our topics of discussion and otheraspects in addition to the specific way in which themeetings are held and how they are managed.
However, I feel that there is scope for improvement in theformat of materials, volume and presentation time in terms
of presentation of agenda and reports.
In terms of content, for instance, there is a need to further
improve its functions of evaluating the appropriateness ofand examining investments and loans. We havediscussed this multiple times in the board meetings andeven though investments projects and withdrawal
projects are taken up as the agenda as and when required,it might be better to have a slightly clearer and fixedyardstick because each project is assessed in a different
way at present.
Yet, I think the mechanism and structure are built well.
We need to polish these and manage the meetings evenmore effectively.

Q

Is the Nominating and Remuneration
Committee functioning properly from theperspective of improving transparency?

think it is working well in terms of
A Inominating
people after holding interviews
with all the candidates.

The Nominating and Remuneration Committee focuses on
three themes: (1) nominating candidates for new directors
and audit and supervisory board members, (2) nominating
candidates for new executive officers, and (3) deliberating
on remunerations for directors and the remuneration
structure on which the remunerations are based. I thinkthese are being run well.
Apart from new directors and audit and supervisory board
members, we interview all the candidates for officers andexecutive officers. We can confidently nominate people
because we are able to have a varied discussion with theperson in the process of nominating them.
Moreover, we also have a president succession plan at
Inabata and we receive reports on the status of
deliberations on candidates for succession.

Q What is your assessment of risk control?

risk assessment is being carried
A Appropriate
out while measuring the strengths ofeach division.

In general, a company faces credit risks and environmental
risks. However, Inabata’s varied risks stem from the natureof its business, which is similar to that of major Japanesetrading companies. In other words, our businesses are
impacted by a far broader range of risks than ordinary
companies. For this reason, it will be necessary to define
the risks for each segment and division and conduct
assessments based on criteria suited to each. Even thetolerance level will be different for each segment.
In such circumstances, I think Inabata’s risk control isestablished as a system, and each division’s risks are being
assessed while measuring their respective strengths.

there a mechanism in place to support outside
Q Isdirectors
in understanding the business?
receive support in various ways such as
A Weopportunities to visit overseas anddomestics sites.

When I was appointed as director, I received an explanationon the work done by each department, and reports arepresented on the status of work of each division in every
board meeting. I also receive detailed reports from eachdivision at the time of budgeting every fiscal year, andoverseas and domestic site visits are conducted as well.
I have been to Vietnam, Mexico and some other countries.
I have also visited some domestic affiliates and subsidiaries.
In that sense, I am grateful for the company’s wide range of
proactive efforts for helping us deepen our understanding.

are the characteristics of people at
Q WhatInabata from an objective perspective?

feel a sense of family-like unity with a strong
A Iinclination
for taking interest in people.
I think Inabata’s corporate culture is characterized by anextremely strong inclination on the part of each employee totake interest in people. This makes me feel a sense offamily-like unity. This is a very Japanese-style corporate
culture and, being Japanese, I feel attached to it. I think thecompany boasts quality people who are also versatile in theirinterest toward social and market trends.

Still, diversity is an area in which discussions have notprogressed much in the board meetings and initiatives arestill insufficient, even though the management is alreadyaware of the issue and taking steps in the right direction. I
feel that the company is lagging slightly behind society,particularly in terms of diversity in management. This is oneof our future challenges.

are the strengths and weaknesses
Q Whatof Inabata?

company’s strength lies in on-site
A The
capabilities and its weakness originates froma lack of dynamic expansion.

Inabata’s strength certainly lies in its on-site capabilities. I
think the company’s strength is in its power of steadybusiness expansion by expanding gradually based on
persistent on-site business activities and the knowledge
gained from there. I recognize that stable businessexpansion and profits are being ensured as a result.
On the other hand, weaknesses present the other side of
the coin. I think there is a need to work on opening
markets and expanding business a little more dynamically.
In that sense, I feel that there is a need to further promote
overseas expansion as well.
Additionally, if we consider social needs, there are new
fields such as improvement in global environment,
especially in the energy field, and dealing in materials or
machines for environmental improvements. Moreover, as
the reviewing of the industrial structure gains momentum,
I think Inabata will also be able to contribute to fields suchas agriculture and fisheries.
Furthermore, there are also the fields of sports, as well as
health and medicine that address the aging society.
I would like the company to explore well about suchfields, which are really needed by society, and make anadvance into them.
Fortunately, I think COVID-19 has had less of an impact
on our company than others. Although uncertainties are
expected to continue for some time, I would like Inabata
to move forward flexibly in alignment with economic
trends because I think the world economy will continue
to recover.

Inabata Integrated Report 2020

46

ESG Information

Corporate Governance

Basic views

Corporate governance system

The company’s mission is to “contribute to thedevelopment of society based on the humanitarian spiritof ‘love (ai )’ and ‘respect (kei ).” This mission applies toshareholders, business partners, employees and all
stakeholders who support our corporate activities. To
execute the mission, the company maintains anawareness of the importance and necessity of corporate
governance and implements various measures todevelop and enhance its system.

(As of July 1, 2020)
Organizational design

Company with an audit &supervisory board

Directors

10 (including 3 independent outside
directors)

Chairperson of the board of directors President
Term of office of directors under 1 year
the Articles of Incorporation
Executive officer system

Yes

Advisory committees tothe board of directors

Nominating and Remuneration
Committee

Audit & supervisoryboard members

5 (including 3 independent outside
members)

Accounting auditor

KPMG Azsa LLC

Corporate Governance Reporthttps://www.inabata.
co.jp/english/investor/
library/governance/

Corporate governance system
General Meeting of Shareholders
election and dismissal

election and dismissal
Nominating andRemuneration Committee(4 directors,
including 3 outside)

adviceaudit

Board of Directors(10 directors,
including 3 outside)collaborationelection and dismissal

Audit & Supervisory Board(5 members,
including 3 outside)auditreportAccounting
Auditors

accounting audit

Board of directors
The board of directors makes decisions on importantmatters set out in laws and regulations, Articles ofIncorporation, and Regulations of the Board of Directors.
These matters include formulation of business plans andannual budgeting as well as making basic management
policies and appointing executive officers. Inabata has
also adopted the executive officer system to separate
management-level decision-making and businessexecution functions to ensure effective management andprompt decision-making.

Nominating andRemuneration Committee
We voluntarily set up the Nominating and Remuneration
Committee in 2015. It deliberates on the selection anddismissal of executives, nomination of candidates for
positions of director, audit & supervisory board member,and executive officer, as well as the remuneration of
directors. A majority of the committee members are
independent outside directors. The board of directors
strives to ensure objectivity, fairness, and transparency
by fully respecting the deliberation results of theNominating and Remuneration Committee.
Members of the Nominating andRemuneration Committee:
1 internal director (Chairperson),
3 independent outside directors
Number of times held: FY2019
5 times

Business Execution System
PresidentInternal Audit Office

Changes in Initiatives to Strengthen GovernanceTime period

Compliance Committee

Management Council

Internal Control Committee
internal audit

Human Rights Affairs Committee
Export Control Committee

Executive Officers

Sales divisions, administrative offices, Group companies worldwide

47 Inabata Integrated Report 2020

June 2003

Executive officer system introduced

June 2006

Term of appointment of directors reduced fromtwo years to one year

June 2013

Appointment of two outside directors

June 2015

Appointment of three outside directors

November
2015

Nominating and Remuneration Committee(voluntary) established
Evaluation of the board of directors introduced → P50

June 2018

Performance-linked share-based remuneration
system introduced

Management Council and Shinsa Kaigi
We set up the Management Council as an institution forbusiness execution. This council deliberates on basic
policies and important matters related to managementand decides their direction. We have also established theShinsa Kaigi as an institution to review important mattersrelated to business execution and investment projects.
Its participants from across the world hold direct
discussions with the management.
Number of times convened: FY2019
Management Council 12 times,
Shinsa Kaigi 14 times

Audit system• Audits by audit & supervisory board members
The audit & supervisory board comprises five members,
including three external members, who are highly
specialized and independent. They ensure that ourchecking function is working from an external
perspective. Each auditor exchanges views regularly withaccounting auditors and the Internal Audit Office andconducts audits on the execution of duties by directors
and the board’s decision making.
• Accounting audits
Accounting audits, audits of financial statements,
quarterly reviews, and internal control audits for Inabata
are conducted by KPMG Azsa LLC. Evaluation criteria,
including autonomy, specialized knowledge, andassessment, have been formulated for the appointment
and suspension of accounting auditors, and decisions are
made based on the evaluation results.
• Internal audits
The company confirms the efficacy of internal control
related to financial reporting based on the Financial
Instruments and Exchange Act. We also implementbusiness rule audits related to inventory transactions atdomestic and overseas Group companies based on anannual plan.

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48

ESG Information

Corporate GovernanceOutside directors and audit & supervisory board members

Three out of five auditors are outside members. They
possess specialized knowledge in finance, accounting,law, and other fields and are highly independent.

Outside directors
In electing outside directors, the Company aims to appoint
candidates who have abundant experience andknowledge of corporate management, the ability tooversee the decision-making and business execution of
the board of directors of the Company, which conducts
business on a global basis, and provides appropriate
advice from an objective perspective. The proportion ofoutside directors stands at 30% (three out of 10 directors).

Outside directors

3

Name

Toshiyuki
Kanisawa

KiyoshiSato

Kenji
Hamashima

AutonomousYes

3 years

Yes

Yes

1 yearNewly
appointed

Board
meetingNominating andRemuneration
Committee

100%

100%

16/16 times

5/5 times

100%

100%

13/13 times

5/5 timesーー

Meetings between outside directors and audit &supervisory board members
Number of times held: FY2019 2 times

49 Inabata Integrated Report 2020

Outside audit &supervisory board members

3Internal audit &supervisory board members

2

Internal directors

7

Attendance status for FY2019

Autonomous

Years
in officeYoshitaka
Takahashi

Yes

6 years

Katsuya
Yanagihara

Yes

Satoshi
Tamai

Yes

Name

Attendance status for FY2019
Years
in officeOutside audit & supervisory board members

Boardmeeting

CareerAuditorat listedcompany

Audit &
supervisoryboard meeting

100%

100%

16/16 times

13/13 times

Reason for appointment

Toshiyuki Kanisawa has served as director, senior executive
officer, representative director and executive vice president ofTokyo Gas Co., Ltd. He currently serves as a consulting retiree ofTokyo Gas Co., Ltd. As he has abundant experience as a memberof the management of Japan’s largest city-gas utility and leadingenergy company, the Company considers him suitably qualified
and appointed him as outside director.
Kiyoshi Sato has served as president and CEO, and vice chairmanof the board of Tokyo Electron Ltd. He currently serves as an
outside director of Shibaura Machine Co., Ltd. and Mazda Motor
Corp. As he possesses global and abundant experience as amember of the management of leading company which makes
equipment to manufacture semiconductors and flat panel displays,
the Company considers him suitably qualified and appointed him as
outside director.
Kenji Hamashima has served as director and senior executive vicepresident, and president and chief executive officer of Ushio Inc.
He currently serves as a special adviser of the same company. As
he possesses global and abundant experience as a member of the
management of a manufacturer which produces applied optics
products, such as industrial light sources, and industrial machinery,
the Company considers him suitably qualified and appointed him as
outside director.

2 years

Newly
appointed

100%

100%

16/16 times

13/13 timesーー

Attorney

Certifiedpublicaccountant

Reason for appointment

Yoshitaka Takahashi has served as an audit &supervisory board member of a listed company, andthe Company appointed him as outside audit &supervisory board member for the purpose of
conducting an objective, proactive and fair audit byutilizing his abundant experience and broad views.
Katsuya Yanagihara is an attorney, and the Company
appointed him as outside audit & supervisory board member
for the purpose of conducting an objective, proactive and fair
audit from the perspective of a professional.
Satoshi Tamai is a certified public accountant andpossess the experience of working in a major trading
company, and the Company appointed him as outside
audit & supervisory board member for the purpose of
conducting an objective, proactive and fair audit fromthe perspective of a professional.

The effectiveness evaluation of the board of directors• Inabata has been conducting the effectiveness evaluation of
the board of directors since FY2015.
• Each cycle lasts for three years in which self-evaluation iscarried out for the first two years and third-party evaluation iscarried out in the third year.
• The overview of the evaluation and issues to be considered
are published on the Company's website.
• Self-evaluation was carried out in FY2019.

FY2019 self-evaluation process (questionnaire format)
Discussion onquestionnaire(in-house staff andexternal experts)

Distribution ofquestionnaire(all directors andaudit & supervisoryboard members)

Aggregation(external experts)

Simplified analysis(in-house staff)

Reporting to theboard of directors
and verification

Disclosure on
websiteNext:
Third-party
evaluation
scheduled

Questions
1. Operational status of the board of directors
2. Function and role of the board of directors
3. Composition of the board of directors
4. Composition and role of the Nominating andRemuneration Committee

5. Operational status of the Nominating andRemuneration Committee
6. Support system for outside directors
7. Role of the audit & supervisory board members and expectations for them
8. Relationship with investors and shareholders

Inabata Integrated Report 2020

50

ESG Information

Corporate Governance• High evaluation for composition and operational status of theboard meetings• Confirmation of open and active discussions• Confirmation of contribution by outside directors and audit &supervisory board members• The composition, role and operational status of theNominating and Remuneration Committee is appropriate

Major challenges

Measures taken based on the results

Improving discussions on medium-to long-term issues

Reviewing agenda criteria for allocating sufficient time tomore strategic discussions(c) Board Benefit Trust (BBT)The Company has introduced a Board Benefit Trust (BBT) as aperformance-linked share-based remuneration system in orderto further clarify the linkage of the remuneration for directors(excluding non-executive directors), the Company’s businessperformance, and the stock value, and enhance their motivation
to contribute to the improvement of the Company’s businessperformance in the medium and long term and to boost
corporate value by sharing not only the benefit of the rise instock prices but also the risks of a decline in stock prices with
the Company’s shareholders. BBT is a system in which directors
earn points during their term which are exchanged for sharesand cash upon resignation.

Feedback to board of directors on dialogue with the capital market

Send information from investors as periodic feedback tothe board of directors(The calculation method for points to be granted to directors)

Evaluation results for FY2019
We confirmed that the board meetings are mostly
operating appropriately. The items on the right were
mostly highly evaluated.

Challenges reflected in the results of the evaluation of the board of directors and improvement measures undertaken
FY2015FY2016

Need for further progress in deliberations on mid- to long- term issues
Further review of the content and volume of agenda discussed in board meetings

FY2017FY2018Continued discussion on review of the functions and rolesof the board of directors

Promoting succession plan and diversity

Deepen deliberations in board meetings and theNominating and Remuneration Committee

Adequate collaborative structure and communication between outside
directors and audit & supervisory board members

Setting up a platform for exchange of opinions

Discussions on the risk management system should be continued

Strengthening risk management system including
overseas subsidiary control

Building a mechanism for long-term employee development with the viewto training top management candidates (succession plan)

Created a plan based on support from experts and started
long-term development of candidates
Continue working

Further communication between outside directors and audit & supervisoryboard members

Continue working

Building a mechanism for long-term employee development with the viewto training top management candidates (succession plan)
Strengthening the global risk management system

Continue working

Promote diversity
FY2019Need to further deepen discussions on mid- to long-term issues
There is scope for deliberation in the succession plan for outside directors andaudit & supervisory board members
Further deliberation is needed on sustainability issues and promotion of diversity

Continue working

Although mostly appropriate, further strengthening is required in the following three points:
1. Risk management
2. Communication between outside directors and audit & supervisory board members
3. Informing the capital market

Remuneration of directors and audit & supervisory board members
The remuneration of directors (excluding non-executive
directors) comprises (a) fixed remuneration, (b)performance-linked remuneration and (c) Board Benefit
Trust (BBT). Out of the above, (a) and (b) are determinedby the board of directors within the total remuneration
approved at a general meeting of shareholders. The
maximum total remuneration as determined at a general
meeting of shareholders is 430 million yen per year. The
remuneration of directors is deliberated by the
Nominating and Remuneration Committee, the majorityof the members of which are independent outside

51 Inabata Integrated Report 2020

directors, and determined by the board of directors while
giving adequate consideration to the results of thedeliberations by the Nominating and Remunerating
Committee, to ensure that objectiveness, fairness andtransparency is reflected in the remuneration of directors.
(a) Fixed remuneration
This a minimum guaranteed amount established asremuneration for each position held by directors.
(b) Performance-linked remuneration
This is based on the fixed remuneration and is calculated bymultiplying a coefficient with profit before income taxes as anindicator (excluding gains on some strategically held shares).

Yearly granted points =continuous service points*1 + performance points*2*1 Half of the basic points established by role
*2 Continuous service points x performance coefficient
Performance coefficient: This is determined by the consolidated sales
target achievement rate and the consolidated operating profit target
achievement rate. Target achievement rate is the performance comparedto the four-year midterm business plan “New Challenge 2020 (NC2020),”
whose final year is the fiscal year ending March 31, 2021.

Actual remuneration of directors in FY2019
Total amount of remuneration andother benefits by type (million yen)
Number of
PerformancePerformanceeligibleFixedlinked Board Benefit Total amountcoefficientpersons remuneration remuneration
Trust (BBT) (million yen)

Director*
Audit & supervisoryboard member*
Outside director andoutside audit & supervisoryboard member

0.86

6

176

1

25

75

48

300
25

8

46

46

*Excluding non-executive directors, and outside audit & supervisoryboard members.

・Outside director and outside audit & supervisory board member includes two directors who retired
after the closing of the 158th Ordinary General Meeting of Shareholders held on June 25, 2019.
・Board Benefit Trust (BBT) is the carryover amount of the board benefit provision booked in the fiscal
year ended March 2020.

Ratio of performance-linked remuneration and
fixed remuneration in FY2019
Performance-linked remuneration Fixed remuneration
41.3%
58.7%

Reference: Past remuneration of directors*
FY2016254 million yen

FY2018248 million yen

FY2017223 million yen

FY2019300 million yen*Excluding non-executive directors

Strategically held shares(1) Basic views
Close business and cooperative relations with various
companies are valuable assets to the Company, and theCompany believes the establishment, maintenance anddevelopment of these relations improve the Company’s
corporate value in the medium and long term and lead tothe benefit of shareholders and investors. Also, as theCompany believes the strategic holding of shares of suchcompanies continues to be an effective way to establish,
maintain and develop good cooperative relations, theCompany owns strategically held shares.
(2) Policy related to holding and reducing strategicallyheld shares
The Company forms a judgment concerning the pros andcons of strategically held shares based on whether holding
them contributes to the establishment of cooperative
relations, enhances the Company’s corporate value in themedium and long term, and leads to the benefit ofshareholders and investors. The board annually deliberates
whether or not to continue to hold a strategical share if thetotal yield from an investment to the company is short ofthe capital cost. The board verifies the holding's adequacy

based on the scale of the total return, future businessoutlook with the company, and other qualitative elements.
The total yield from an investee is calculated based on the
total return, which is the sum of profit that can be
expected to be obtained through business activity andpayment of dividends. The Company follows a policy of
reducing the shares that the holding of which is notconsidered significant, while considering timing and theeffect on the market and the business.
Sales of strategically held shares
FY20151.421 billion yen

FY20185.395 billion yen

FY20165.150 billion yen

FY20193.134 billion yen

FY20179.106 billion yen(3) Criteria for exercise of voting rights
In principle, the Company exercises voting rights for all
agendas in order to exercise its rights as a shareholder.
The Company reviews the merits and demerits of eachagenda and exercises voting rights based on the
judgment criteria of whether sustainable growth of theheld company and improvement of its corporate value inthe medium and long term can be expected.

Inabata Integrated Report 2020

52

ESG Information

Risk Management• Risk of fluctuations in foreign exchange rate

Major risks faced by the Inabata Group
Impact on businessperformance• Credit risk of business
partners• Risk of fluctuations in
product markets• Risk of fluctuations inforeign exchange rate

Huge

MediumSmall• Risk related to businessrestructuring• Risk of natural and otherdisasters• Environment-related risks• Risk related to business
investment• Potential risks of overseas
activities

Operating globally with 60 bases across 17 countries,
mainly in Asia, our Group faces various kinds of risks.
We manage risks by establishing and implementing
various regulations related to credit management, export
management, products management and others, with
our Risk Management Office at the core.
Additionally, we prepare ourselves for risks arising fromeveryday work by organizing and implementing the work
rules for trading bases and manufacturing bases in
multiple languages, along with executing appropriate risk
checking functions from head offices using regulations• Risk of decline in valueof securities held

MediumHigh

Possibility of occurrence

for managing group companies in Japan and abroad. We
have identified the 11 risks shown in the above matrix as
the main risks faced by our Group. Mapping has been
done on the matrix based on the probable impact of eachrisk on our performance and the possibility of its
occurrence using the responses on risk awareness ofmanagers in the effectiveness evaluation of the board of
directors conducted in FY2019 and other factors.
Here, we will explain four risks that we consider our
top priority.

• Credit risk of business partners

53 Inabata Integrated Report 2020

If a natural disaster or strong infectious disease occurs
in a country or region in which Inabata operates its
business, there is a possibility for employees, offices
and equipment to be impacted or damaged, which inturn may adversely affect our business. Such disasters
can also disrupt the supply chain and cause fluctuations
in demand and supply of products and materials, leading
to possible impact on the Group’s businessIn order to deal with the spread of COVID-19, whicharose at the end of 2019, we established a global crisis
management office based on BCP with President
Katsutaro Inabata as its head. Almost 80% of ouremployees (at our head offices in Japan) were working
remotely when a state of emergency was declared in
April 2020. We continued our business while giving toppriority to the safety of our employees.

• Risk of fluctuations in product markets
Many of the information & electronics materials,
chemicals, food products, and plastics that our company
deals in are impacted by fluctuations in the productmarket. Therefore, inability to respond flexibly tofluctuations in market conditions can lead to adverse
impact on our Group’s performance and financial status.

Addressing COVID-19
February 13

Established COVID-19 global crisis management officeFebruary 26

Started staggered commute and work from home

April 7

Switched to execution of BCP top-priority tasks

July 31 to date

We are conducting business activities by continuingwith staggered commute and work from home.

Addressing other risks• Business continuity plan (BCP)• Tax compliance

We have been formulating and introducing BCP at majorbases, including domestic and overseas Group
companies since 2018 so that we can promptly restartand continue business activities after a crisis takes place.
We plan to establish the BCP at 38 bases in 13 countries
including Japan.

All officers and employees of the Company strive tocomply with laws and regulations as well as internal
regulations, regardless of the country, to manage thecompany with a focus on compliance. With regards totax, we recognize that one of our social responsibilities is
to pay taxes according to related laws and regulations ineach country or region and maintain transparency. We
think that proper tax payment contributes to economic
development of the country or region and in returnresults in sustainable growth of our Group andimprovement of our mid- to long-term corporate value.
Therefore, we strive to minimize tax risk and maintain as
well as improve tax compliance.

• Supply chain management

Measures to address four top risks
Our Group companies grant credit to many business
partners in Japan and abroad. Although we carry out
credit management at a global scale, including ouroverseas business partners as well, we cannot guarantee
full collections. Therefore, there is a risk of adverse
impact on our Group’s performance and financial status
due to the aggregation of bad-debt losses and allowancefor doubtful accounts through bankruptcy and civil
rehabilitation procedures and so on from contingencies
concerning business partners.

performance and financial situation. With these factors
in mind, we have formulated a BCP based on a basic
policy for crisis response.

• Risk of natural disasters, pandemics and such

• Risk related to laws andregulations• Risk of fluctuations inretirement benefit
obligation
Low

In principle, the Group carries out hedge transactions,such as foreign exchange contracts, in overseas
production, sales, and trading of products and materials.
However, there is a possibility of being impacted byfluctuations in exchange rates in foreign currency-based
and other transactions. Moreover, local currency-based
items, including sales, expenses, and assets, areconverted to Japanese yen for the consolidated financial
statements and there is a possibility that they are
impacted by the exchange rate at the time of conversion.

We have formulated the Supply Chain CSR Action
Guidelines in response to the social expectation forcompanies to fulfill CSR in their supply chain management.

Inabata Integrated Report 2020

54

ESG Information

Society

View on employee development

Developing global staff

People are most important for a trading company, and developing them is one of the tasks for the management. The
Company’s aim for employee development is to develop people who share our IK Values and can implement our vision
based on the spirit of love and respect. We aim to coexist with society globally as autonomous and independent
individuals who share the IK Values.

IK Values

IK Values workshop

P1

The company’s view on
employee development isclosely linked with IK Values.

Solving the problems of society,customers and other people

P58

IK Values workshop held for local
employees abroad.

Looking at things calmly
and objectively

Autonomous andindependent indivisuals

IK Values

Learning from successes
and failures

Ability to act based on one’s own
thoughts and views
without compromise or conceit

With a total of 4,000 employees on a consolidated basis and an overseas sales ratio of over 50%, the company has
identified “developing global staff” as one of its key strategies in the midterm business plan. In July 2014, we started
employee management reform with a focus on developing global staff aimed at implementing our management
philosophy and business strategies and built a new employee management and training system.

Employee structure
at Inabata & Co., Ltd.
We have categorized duties by management,
professional, general staff, and assistant jobs
and clearly defined the roles, responsibilities,
and missions of each. We have alsoestablished eight levels of ranks calledbands* and have conducted intensive
training for people belonging to key bands.
* Bands 1 to 8 are assigned to management,
professional, and general staff levels.

See P57 for the training structure at
Inabata & Co., Ltd.

Global staff

Bands 1–3

People who will lead the organization andits businesses by implementing the IK management
philosophy and business strategy in Japan and abroad

Employees contributing toBands 4–5
the organization through diverse experience
People who contribute to the organizationand its businesses by resolving complicated issues
using mature judgement while gaining diverse experience

Employees who grow with
Bands 6–8
a view to embodying the characteristics of conduct
People who work hard with the aim to embody the characteristics
of conduct sought by the company while carrying out their tasks
and refining specialized skills in specific fields

Efforts for diversity
We recognize that diverse values are important for continuing and expanding business and are working toward equality inrecruitment, placement, evaluation, payroll and promotions regardless of age, gender, or other factors. We are also
working on an action plan for supporting work-life balance, including child and family care, and promoting active
participation by women.

Training local employees from around the world in Japan

Respect for human rights
The company formulated the Declaration of Compliancewith the view that respecting the human rights of all our
stakeholders is essential for us to contribute to social
development as a company operating at a global scale.
Advancing our business activities while respecting all humanrights is also aligned with our spirit of love and respect.

55 Inabata Integrated Report 2020

Supply chain CSR action guidelines
The company has formulated a unique code of conduct in
response to the social expectation for companies to fulfill
corporate social responsibility (CSR) in their supply chain
management. We are raising its awareness among all
suppliers, strengthening communication and actively
working on improvements with regard to vendors thatare lagging behind.

Inabata’s strength lies in its people and information. It isessential for us to improve the level of local employees
working around the world in order to achieve long-term
growth. In 2014, we held a Global Staff Meeting inwhich we invited local employees selected from every
region in the world to our Tokyo Head Office. This event
has been held regularly since then. From 2017, we havealso been supporting educational training and systembuilding in Malaysia, Thailand and Indonesia
corresponding to the issues and situations specific toeach country. We also hold training on basic technicalskills, such as business process rules, and workshops
on philosophy training by the Human Resources Officeat our head office using multilingual e-learning tools. By
conducting these educational activities to shore up our
staff abroad as a whole, we are striving to develop
employees necessary for the Inabata Group, which is amultifaceted trading company.
See P58 for Global Staff Meeting

Inabata Integrated Report 2020

56

ESG Information

SocietyIN FOCUS

Basic training for employees specialized in shosha trading
To develop global staff quickly and with certainty, our head office staff holds focused trainings for key bands. After joining
the company, employees acquire the minimum basic knowledge necessary as a global staff depending on their level inthe hierarchy. We also hold lectures for educating employees about the minimum basic knowledge of chemicals necessary
for working at a trading company dealing in chemicals. We invite external teachers and hold a total of 10 lectures, mainly foryoung employees.
Training structure at Inabata & Co., Ltd.
Technical skills

Human skills
Training for
new managers

Managerial
positions
Leadership training(by recommendation)
Mid-level
positions

Comprehensive workshops
MarketingYoung
employeesNew
employees

Global Staff Meeting(by recommendation)

Credit management training II(Corporate analysis,
corporate evaluation)

Critical thinking

Credit management training I(Bookkeeping, finance)

Basic training
on chemicals

Technical skills training(legal, credit, trade)

Logical thinking(basic)Mid-level
employees’ training

Communication(business manners)

Efforts to ingrain corporate philosophy among global staff
Global Staff Meeting
The Global Staff Meeting started in 2014 with the objective of
sharing the Company’s Motto, Mission, Vision and IK Values
and invigorating exchange between people from different
countries and cultures. In this annual event, participants
selected from Japan and abroad hold active discussions
through two-day group work conducted in English.
We aim to expand further as a Group by encouraging
collaboration between different bases. We strive to do thisby building an even more closely knit network among basesby having participants get to know more about each other.
We believe that a strong centripetal force and a slightly
stronger centrifugal force are required for the developmentof the whole Group. By periodically holding the Global Staff
Meeting, we hope that participants who learn the IK Values
will become the core members of our overseas bases andplay a central role in the development of the Group. Until
now, 34 employees from Japan and 43 employees fromother countries have taken part in this initiative.

Participants: Japan 34
Overseas 43

Held at 36 bases in 14 countries

Training at overseas bases
As our overseas business expands rapidly, we recognize the importance of education and training at overseas bases. We
will strive to improve the Group’s level by continuously implementing education and training on basic matters, such as
procurement and inventory management, credit management, and business process management, using e-learning andother methods.

Credit management training at overseas bases
We started credit training at overseas bases from FY2019. It was held
at four locations in China (Tianjin, Dalian, Shenzhen and Guangzhou) andin the Philippines in FY2019, with the aim to establish credit knowledge
among overseas staff through discussions, roleplays and othermethods in addition to lectures.

IK Values workshops
Amid global expansion of our business, we have conducted
IK Values Workshops in 36 bases across 14 countries outside
Japan for the two years starting 2018 with the objective ofdeepening an understanding for IK Values, which represents
the Company’s values. In these workshops, employees areencouraged to express IK Values in their own words and put
them into practice. We believe that this ties the future ofeach employee to the future of the company and expect that
this will result in the growth of Inabata as a whole.

Lecture at Tianjin branch by staff from Risk
Management Office at the head offices

57 Inabata Integrated Report 2020

Inabata Integrated Report 2020

58

ESG Information

Society

Environment

International exchange

Basic approach to environment

Our founder, Katsutaro Inabata, worked toward paving a path to cultural exchange and friendly relations with other countries
after returning from his study trip to France. We continue to deepen those relations by continuing to work on his initiatives.

Japan–France exchange

Japan–Portugal exchange

In the late 19th century, our founder, Katsutaro
Inabata, went to France to study synthetic dyeing
techniques and other advanced technologies of the time.
Since then, our company has been committed to advancing
cultural exchange between Japan and France. In 1927, thethen French Ambassador to Japan, Paul Claudel, andKatsutaro Inabata established the Kansai Franco-JapaneseInstitute (now Institut Franco-Japonais du Kansai, Kyoto),
where French language classes and cultural exchange
programs between the two countries are still held today.
Additionally, the Société Franco-Japonaise d’Osaka, which
was set up by our second
president, Taro Inabata, in
1952, continues to promotemutual understanding andfriendly relations between
Japan and France today.
Institut Franco-Japonais du Kansai,

The relationship with Portugal began in 1920
when our founder was appointed vice-consul for Portugal in
Kyoto. From 1932, our second president, Taro Inabata,
became the honorary vice-consul for Portugal in Osaka. Ourpresent counselor, Katsuo Inabata, was appointed thehonorary consul for Portugal in Osaka in 1973. He alsoestablished the Sociedade Luso-Nipónica de Osaka in 1994
to commemorate friendly exchange between the twocountries, which reached 450 years in 1993, and served as
its president. Now, our current president, Katsutaro Inabata,
who is the sixth president of the company, is actively
promoting cultural
exchange between
Japan and Portugal
as the president of
the Sociedade
Luso-Nipónica
de Osaka.

Kyoto, refurbished in 2003

Contributing to the local community
Inabata award

As a member of CLOMA

Sponsorship of Paralym Art

Inabata has been sponsoring an award
given every year since 1974 to thebest artists in the vocal music or piano
categories in a French musiccompetition, hosted by an organization
promoting Japan–France cultural
exchange through music.

Inabata is a member of Japan Clean
Ocean Material Alliance (CLOMA)
and strives to resolve the marine
plastic issues through its business.

As an official partner of Paralym Art,
Inabata supports persons withdisabilities to become independent
through Shougaisha Jiritsu Suishin
Kikou Association.

2018 award ceremony

59 Inabata Integrated Report 2020

In accordance with its Inabata Declaration of Compliance, the company iscommitted to contributing to society and economy through its businessactivity, as well as to make efforts for the conservation of the environment.
Environmental risk is a critical factor that affects our business environment.
We must address this issue through our business activities to ensure thesustainable development of our Group companies. In the year 2000, Inabata
obtained ISO 14001 certification, an international standard related to theenvironmental management system. Since then, we have been striving toincrease the number of bases that hold this certification and the current
number of such bases, including our Group companies, is given on the right.

Number of group firms that haveobtained ISO 14001
Japan

4

Overseas

15

Countries in which ISO 14001 has
been obtained
Southeast
Asia/India

Singapore, Malaysia, Indonesia,
Vietnam, Thailand, Philippines

Northeast Asia

China

Americas

Mexico(As of May 2020)

Environmental performance data
CO2 emissions / power consumption / purchase of paper
FY2016FY2017FY2018CO2 emissions (Metric tons-CO2)

470

462

432

Power consumption (1000kWh)

907

930

937

5,093

5,040

4,974

Purchase of paper (thousands of sheets)*Scope: Osaka Head Office, Tokyo Head Office, Nagoya Branch*CO2 emissions are calculated from volume of power consumption using the CO2 emission coefficient in terms of power usage.

Ratio of wastes to recycling
FY2016FY2017FY2018Wastes (Metric tons)

92

107

82

Wastes recycled (Metric tons)

70

87

72

Recycle rate (%)

76

81

88

*Scope: Osaka Head Office, Tokyo Head Office, Nagoya Branch*Wastes include wastes generated by tenants at Osaka Head Office

Reducing environmental impact from business activities
The current midterm business plan, NC2020, places focus on the fields of environment and energy, such as materials
related to solar cells and materials for EVs, to reduce the environmental impact of society and take initiative in fields thatoffer business opportunities for our company. We also strive to curtail the use of resources in our business activities andpromote recycling.

PaperLab

Photovoltaic system

In 2019, we introduced a papermaking machine, Paper Lab,and started creating recycled paper in our office, taking usedphotocopy paper generated at our offices as raw material.
We will continue to work toward reducing the purchase of
paper by increasing the recycle rate in our company.

We are working on large domestic projects on
photovoltaic systems and others using our distribution
management function. We also sell materials such as
silver paste and glass used in making photovoltaic power
generation systems.

Inabata Integrated Report 202060

Financial Information
11-Year Summary

Business performance

Financial position

Cash flow

Reference
Sales by segment

Operating profit by segment

Management indicators

Information per share

Net sales
Gross profit
Selling, general and administrative expenses
Operating profit
Ordinary profit
Profit attributable to owners of parent
Exchange rate USD/yen
Total assets
Interest-bearing debt
Equity capital
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Cash and cash equivalents(Amount of capital investment)(Depreciation)
Information & Electronics
ChemicalsLife Industry
Plastics(Housing & Eco Materials)(Food)
Others
Total
Information & Electronics
ChemicalsLife Industry
Plastics(Housing & Eco Materials)(Food)
Others
Total
Overseas sales ratio (%)
Overseas operating profit ratio (%)
Number of employees on a consolidated basis (people)
Operating profit ratio (%)
Net D/E ratio (times)
Equity ratio (%)
ROE (%)ROA (%)
Share price at the end of the fiscal year (yen)Total market value (including treasury shares) (billion yen)
PER (times)
PBR (times)
Number of shares issued and outstanding at the end of the fiscal year (including treasury shares) (shares)
Number of treasury shares at the end of the period (shares)
EPS (yen)
BPS (yen)
Annual dividend (yen)Dividend payout ratio (%)
Total return ratio (%)

FY2009410,782
27,56822,058
5,510
4,889
1,762
92.10
229,964
58,76367,805
5,976(5,529)(6,405)
5,014
5,041
2,385
176,774
58,214140,376
17,552
16,2401,624
410,782
2,435
634
2,230
16
(50)
243
5,510
37
38
3,740
1.3
0.79
29.5
2.7
0.8
441
28.7
16.3
0.42
65,159,227
98,20527.08
1,042.1910
36.9-

FY2010469,090
31,74923,848
7,900
8,481
7,232
81.49
238,272
60,52871,3408,495(1,436)
3,980
15,777
3,205
2,526
197,436
67,472
167,338
19,873
16,048921
469,090
2,880
1,578
3,141
(33)
116
216
7,900
40
54
3,828
1.7
0.62
29.9
10.4
3.1
510
33.2
4.6
0.46
65,159,227
290,633111.34
1,099.77
26
23.4-

Notes: 1. In FY2012, the life industry segment was established by integrating the life science related elements of the chemicals segment and thefood segment. The performance figures for FY2011 are based on the revised categories.
2. From FY2016, the business of designing, installation, and sales of hoists and cranes, which was part of the others segment, has been
included in the information & electronics segment. The performance figures for FY2015 are based on the revised categories.
3. In FY2019, the housing & eco materials segment was integrated into the chemicals segment. The performance figures for FY2018 arebased on the revised categories.
4. From FY2013, the conversion rate for income and expenditure by overseas subsidiaries and such was changed from the rate on the last
day of the FY to average rate during the period. This has been applied retroactively to the figures for FY2012.
5. From FY2018, Partial Amendments to Accounting Standard for Tax Effect Accounting was applied. This has been applied retroactively tothe figures for FY2017.

61 Inabata Integrated Report 2020

FY2011
464,429
31,75924,127
7,632
8,834
6,297
77.74
251,045
74,07076,973(15,534)(1,629)12,40010,756
1,824
2,849
185,566
42,05238,020175,875
22,370543
464,429
2,733
391
1,531
2,593
128
253
7,632
40
49
3,721
1.6
0.82
30.7
8.5
2.6
574
37.4
5.9
0.48
65,159,227
1,090,674
97.45
1,201.43
21
21.5-

FY2012479,942
33,002
25,237
7,765
9,603
6,630
79.81
276,938
68,071
97,886
19,400277(12,880)
18,985
1,781
3,047
192,40242,79935,877
186,098
22,266497
479,942
3,248
339
1,492
2,297
159
227
7,765
44
51
3,661
1.6
0.50
35.3
7.6
2.5
699
45.5
6.7
0.45
65,159,227
1,887,522
104.291,547.0923
22.1-

FY2013561,173
38,511
27,574
10,936
12,454
8,669
100.17305,037
76,582
115,010(764)(5,467)
3,638
18,402
3,435
2,179
210,703
52,39837,653
232,877
26,511
1,028
561,173
4,863
862
1,745
2,828
343
292
10,936
51
56
3,577
1.9
0.46
37.7
8.1
3.0
1,052
68.5
7.7
0.58
65,159,227
1,886,225
137.01
1,817.6830
21.9-

FY2014572,11439,04028,266
10,774
13,2178,630
109.76
326,862
78,814
127,6718,354(3,044)(8,193)
17,3942,666
2,150
209,369
52,84534,660250,427
24,257553
572,114
4,489
1,072
1,037
3,730
285
158
10,774
51
46
3,454
1.9
0.43
39.1
7.1
2.7
1,198
76.0
8.7
0.59
63,499,227
801,996137.202,036.31
33
24.1
31.1

FY2015577,037
41,06429,692
11,371
12,2579,510
120.15
305,436
68,377126,038
11,866(161)(11,129)
17,0883,067
2,270
211,659
48,19841,022
251,163
24,817
176
577,037
3,833
1,011
1,524
4,434
421
146
11,371
53
45
3,509
2.0
0.37
41.3
7.5
3.0
1,116
70.8
7.3
0.55
63,499,227
1,402,268
151.912,029.70
36
23.7
31.1

FY2016586,630
42,74030,123
12,616
13,672
9,687
108.34340,147
71,075
146,258
1,840
4,504
(481)
22,9352,431
2,066
221,023
48,04740,434
251,885
25,064
175
586,630
3,992
1,003
1,820
5,396
260
142
12,616
53
46
3,827
2.2
0.30
43.0
7.1
3.0
1,357
86.1
8.7
0.57
63,499,227
2,002,305
156.252,378.31
40
25.6
34.8

FY2017621,137
44,85438,891
5,962
6,374
6,744
110.85352,741
71,993
141,403
5,960
5,086(4,901)
29,2352,500
2,335
214,963
51,58042,392286,900
25,137
162
621,137(2,045)
259
1,920
5,541
157
129
5,962
53
4,098
1.0
0.28
40.1
4.7
1.9
1,616
102.6
14.7
0.70
63,499,227
2,402,417
109.92
2,314.42
40
36.4
46.5

(Unit: Millions of yen)
FY2018FY2019634,740
600,31247,257
46,25933,22633,02914,031
13,22914,30914,211
12,896
11,415110.92108.70366,514322,848
57,277
52,848
162,973
145,924
12,51010,690743(525)(19,546)(7,273)23,011
25,480
3,441
3,707
2,413
2,976
217,904
218,690
77,522
74,181
39,04636,919300,094
270,345172
175
634,740
600,312
4,819
4,482
1,424
1,208
1,310
1,166
6,341
6,235
136
135
14,031
13,229
54
53
54
54
4,184
4,282
2.2
2.2
0.19
0.16
44.5
45.2
8.5
7.4
3.6
3.3
1,505
1,180
95.5
74.9
7.1
6.2
0.56
0.49
63,499,227
63,499,227
3,002,502
3,302,640
211.36188.82
2,693.92
2,424.13
48
53
22.7
28.1
30.0
31.9

6. Net D/E ratio = (interest-bearing debt – cash and deposits) ÷ equity capital
7. ROE (%) = net profit ÷ average equity capital at the beginning and end of FY x 100
8. ROA (%) = net profit ÷ average total assets at the beginning and end of FY x 100
9. Total market value (including treasury shares) = share price at the end of the FY x number of shares issued and outstanding at the end of the fiscal year (including treasury shares)
10. PER is calculated by dividing share price at the end of the FY (TSE closing price) by net profit per share.
11. PBR is calculated by dividing share price at the end of the FY (TSE closing price) by net assets per share.
12. We decreased treasury shares (1,660,000 shares) in FY2014.
13. The number of treasury shares at the end of the FY includes shares owned by board benefit trust (BBT) introduced in FY2018 and equity-method affiliates in addition to shares
owned by Inabata.
14. Total return ratio has become the shareholder return index from FY2014. Total return ratio = (dividends + treasury shares acquired) ÷ consolidated net profit ×100

Inabata Integrated Report 202062

Financial Information
Consolidated Balance Sheet
March 31, 2019
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles, net
LandConstruction in progress
Other
Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible assets
Investments and other assets
Investment securities
Long-term loans receivable
Retirement benefit asset
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

63 Inabata Integrated Report 2020

(Unit: Millions of yen)March 31, 2020

26,909163,963
52,842
735
3,906
9,087
(877)
256,567

29,440152,457
52,052
766
3,084
8,022
(686)
245,136

15,187(9,869)5,317
16,125(12,797)
3,327
2,908
815
3,496
(2,392)
1,104
13,473
3,223

15,509(10,054)5,454
16,240(12,743)
3,497
2,870
112
4,781
(2,752)
2,029
13,964
3,006

86,393
571
2,893
983
10,077(7,669)93,250109,947
366,51454,236
1,392
2,007
1,024
9,896
(7,815)60,74077,711
322,848

March 31, 2019
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term borrowings
Income taxes payable
Accrued expenses
Provision for bonuses
Provision for loss on business liquidation
Other
Total current liabilities
Non-current liabilities
Long-term borrowings
Deferred tax liabilities
Provision for retirement benefits for directors (and other officers)
Provision for share-based remuneration for directors (and other officers)
Provision for loss on guarantees
Retirement benefit liability
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets(Unit: Millions of yen)March 31, 2020

109,778
43,619
2,271
1,168
1,245
6,536
164,618

96,761
43,073
1,631
1,021
1,217
240
6,831
150,776

13,65819,936
30
37
18
1,794
1,722
37,198201,817

9,775
9,933
30
85
18
2,369
2,132
24,344
175,121

9,364
7,752
97,882(3,729)

9,364
7,752
106,197(4,155)111,269

119,159

48,827
(93)
3,247
(277)
51,703
1,723
164,697366,514

26,196148
1,436(1,016)
26,764
1,802
147,726
322,848

Inabata Integrated Report 202064

Financial Information
Consolidated Statement of Income

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity method
Miscellaneous income
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Miscellaneous loss
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sales of investment securities
Total extraordinary income
Extraordinary losses
Loss on valuation of investment securities
Provision for loss on business liquidation
Impairment Loss
Total extraordinary losses
Profit before income taxes
Income taxes – current
Income taxes - deferred
Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

65 Inabata Integrated Report 2020

Consolidated Statements of Comprehensive Income
April 1, 2018 - March 31, 2019634,740
587,482
47,25733,226
14,031(Unit: Millions of yen)
April 1, 2019 - March 31, 2020
600,312554,053
46,25933,02913,229

214
1,422
270
965
2,872

176
1,946
339
683
3,146

1,857
332
403
2,594
14,309

1,317
294
552
2,164
14,211

5,119
5,119

3,033
3,033

344
288
633
18,795
5,763
(229)
5,533
13,262365
12,896293
244
537
16,707
4,858
(35)
4,822
11,884469
11,415

April 1, 2018 - March 31, 2019
ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities accounted for using equity method
Total other comprehensive income
Comprehensive income(break down)Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests(Unit: Millions of yen)
April 1, 2019 - March 31, 2020

13,262

11,884

11,701
(89)
689
(297)
(121)
11,88225,145(22,679)242(1,875)(739)(39)(25,091)(13,207)

24,721423(13,656)
449

Inabata Integrated Report 202066

Financial Information
Consolidated Statement of Changes in Equity

Consolidated Statements of Cash Flows

April 1, 2018 - March 31, 2019

(Unit: Millions of yen)
Shareholders’ equity
Share capital

Balance at beginning of period
Changes during period
Dividends of surplus
Profit attributable to owners of parent
Purchase of treasury shares
Disposal of treasury shares
Acquisition of treasury shares by a stock benefit trust
Change in scope of consolidation
Net changes in items other than shareholders’ equity
Total changes during period
Balance at end of period

Capital surplus

9,364

Retained earnings

7,708

April 1, 2018 - March 31, 2019

Treasury shares

87,196

Total shareholders’ equity(2,749)101,519(2,445)
12,896(2,445)
12,896
(936)
164
(164)
234
9,749
111,269

(936)
120
(164)

43
234
9,364

43
7,752

10,686
97,882(980)(3,729)

Accumulated other comprehensive income
Valuation
Deferreddifference on
gains
available-for-sale or losses
securities
on hedges

Balance at beginning of period
Changes during period
Dividends of surplus
Profit attributable to owners of parent
Purchase of treasury shares
Disposal of treasury shares
Acquisition of treasury shares by a stock benefit trust
Change in scope of consolidation
Net changes in items other than shareholders’ equity
Total changes during period
Balance at end of period

37,252

11,574
11,574
48,827

Foreign Remeasurements
Total
currencyof defined
accumulatedtranslation
benefitother comprehensive
adjustment
plansincome

20

2,591

(113)
(113)
(93)

656
656
3,247

19

Noncontrollinginterests

Total
net
assets

1,532

142,936

190
190
1,723

(2,445)
12,896
(936)
164
(164)
234
12,011
21,760164,697

39,883

(297)
(297)
(277)

11,82011,82051,703

April 1, 2019 - March 31, 2020
(Unit: Millions of yen)
Shareholders’ equity
Share capital

Balance at beginning of period
Cumulative effects of changes in accounting policies
Restated balance
Changes during period
Dividends of surplus
Profit attributable to owners of parent
Purchase of treasury shares
Disposal of treasury shares
Acquisition of treasury shares by a stock benefit trust
Change in scope of consolidation
Net changes in items other than shareholders’ equity
Total changes during period
Balance at end of period

Capital surplus

9,364
9,364

Retained earnings

7,752
7,752

Treasury shares

97,882(191)
97,691

Total shareholders’ equity(3,729)(3,729)111,269(191)
111,078(2,908)
11,415(2,908)
11,415(425)
8,080
119,159

(425)

9,364

7,752

8,506
106,197(425)(4,155)

Accumulated other comprehensive income
Valuation
Deferreddifference on
gains
available-for-sale or losses
securities
on hedges

Balance at beginning of period
48,827
Cumulative effects of changes in accounting policies
129
Restated balance
48,957
Changes during period
Dividends of surplus
Profit attributable to owners of parent
Purchase of treasury shares
Disposal of treasury shares
Acquisition of treasury shares by a stock benefit trust
Change in scope of consolidation
Net changes in items other than shareholders’ equity (22,760)
Total changes during period(22,760)
Balance at end of period
26,196

67 Inabata Integrated Report 2020

(93)
(93)

241
241
148

Total
Foreign Remeasurements
accumulated
currencyof definedother comprehensive
translation
benefitincomeadjustment
plans

3,247
3,247

(1,811)(1,811)
1,436

(277)
(277)

(739)
(739)
(1,016)51,703
129
51,833(25,068)(25,068)
26,764

Noncontrollinginterests

Total
net
assets

1,723
1,723

164,697(61)
164,635

78
78
1,802

(2,908)
11,415(425)(24,990)(16,909)
147,726

Cash flows from operating activities
Profit before income taxes
Depreciation
Impairment loss
Increase (decrease) in allowance for doubtful accounts
Interest and dividend income
Interest expense
Share of loss (profit) of entities accounted for using equity method
Increase (decrease) in provision for loss on business liquidation
Increase (decrease) in provision for loss on guarantees
Loss (gain) on sales of investment securities
Loss (gain) on valuation of investment securities
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Decrease (increase) in other current assets
Decrease (increase) in other non-current assets
Increase (decrease) in trade payable
Increase (decrease) in other current liabilities
Other, net
SubtotalInterest and dividends received
Interest paid
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
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Purchase of shares of subsidiaries
Decrease (increase) in short-term loans receivable
Long-term loan advances
Collection of long-term loans receivable
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Purchase of treasury shares
Proceeds from disposal of treasury shares
Dividends paid
Dividends paid to non-controlling interests
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 the period
Increase (decrease) in cash and cash equivalents resulting from change in scope of consolidation
Cash and cash equivalents at end of period(Unit: Millions of yen)
April 1, 2019 - March 31, 2020

18,795
2,413
288
321
(1,636)
1,857
(270)
(190)
(5,119)344
11,276(3,137)1,200(7,495)736
68
522
19,975
1,721(1,884)(7,302)
12,51016,707
2,976
259(2,123)
1,317
(339)
244
(3,033)
293
8,967
371
854
277
(11,334)(259)
26
15,2052,254(1,328)(5,442)
10,690(3,936)
3,275(2,611)
93
(829)
(418)
5,395
(49)
172
(376)
98
(69)
743

(3,907)
3,827(1,354)
31
(844)
(371)
3,134
(234)
294
(1,033)
44
(111)
(525)

(10,328)
3,666(9,385)(1,101)164(2,453)(232)
122(19,546)(54)(6,346)29,2352,996
600(6,649)(425)(2,917)(370)(506)(7,273)(421)
2,469
23,011

122
23,011

25,480Inabata Integrated Report 202068

Corporate Information
Company nameInabata & Co., Ltd.

Founded

October 1, 1890

Incorporated

June 10, 1918

Paid-in capital*¥9,364 million

Domestic offices*

Osaka Head Office, Tokyo Head Office,Nagoya Branch, Shiojiri Office, Hamamatsu
Office, Kyushu (Kirishima) Office

Overseas offices*

Stock Information (As of March 31, 2020)
Organization(As of July 1, 2020)

Information &Electronics Div. II

Unconsolidated: 648 (including employees
seconded to group companies)
Consolidated: 4,282

Independent auditor

KPMG Azsa LLC

Securities code

8098
First section of the Tokyo Stock Exchange*As of March 31, 2020

Total number of authorized shares

200,000,000

Number of shares issued and outstanding

63,499,227

Number of shareholders

10,648Treasury stock
4.7% (1)

Individuals/others
11.1% (10,211)

Securities
companies
1.0% (30)

63,499(Thousand shares)

Domestic
corporations
32.0% (176)Financial institutions
23.4% (30)Foreign investors
27.8% (200)Life Industry Div.

Plastics Div. I

GeneralMeeting of
Shareholders

Board of Directors
Audit &
Supervisory Board

Plastics Compound
Business Office
Plastics Div. II
General Affairs
Officewww.inabata.co.jp/english/

Information
Technology OfficeFinancial
Management OfficeCompliance Committee

Business Process
Management OfficeInternal Control
Committee

Human Resources
OfficeHuman Rights
Affairs Committee

Risk Management
OfficeExport Control Committee

Internal Audit Office

IR Activities

69 Inabata Integrated Report 2020

Status of Stock Allocation by Owners

Chemicals Div.

WebsiteWe are proactive in holding dialogue with shareholders andinvestors, as we believe it contributes to our sustainable growthand improves corporate value in the medium and long term.
(1) IR system• The president serves as the responsible person, and the
director in charge of IR has also been appointed. In principle,
the president and the director in charge of IR lead dialogue
with shareholders and investors.
• In cooperation with related sections within the company, theIR Department collects and analyzes various management
information. The information is communicated internally andexternally, timely and appropriately.
(2) IR activities• The Company handles meetings with investors positively andreasonably.
• The Company holds a briefing on financial results twice a year
to explain the progress of the midterm business plan andprovide an overview of financial results.
• The Company sets occasions for dialogue with individual
shareholders and investors through participation in IR events, etc.
• The Company actively works to provide information throughits website, company brochure, shareholder news, andnotices of general meeting of shareholders.

Stock Information

Information &Electronics Div. III

About 60 locations in 17 countries including
Singapore, Bangkok, Jakarta, Shanghai,
Hong Kong, Taipei, Los Angeles, New York,
Dusseldorf

Number of
employees*

Information &Electronics Div. I

Principal Shareholders (Top 10)
Name of shareholder
Sumitomo Chemical Co., Ltd.
The Master Trust Bank of Japan, Ltd. (Trust account)
Japan Trustee Services Bank, Ltd. (Trust account)
Trust & Custody Services Bank, Ltd.
(Mizuho Bank, Ltd. Retirement Benefit
Trust Account re-entrusted by Mizuho Trust and Banking Co., Ltd.)DFA INTL SMALL CAP VALUE PORTFOLIOSSBTC CLIENT OMNIBUS ACCOUNT
Japan Trustee Services Bank, Ltd. (Trust account 9)
Katsuo Inabata
NORTHERN TRUST CO. (AVFC) RE IEDU UCITS
CLIENTS NON LENDING 15 PCT TREATY ACCOUNTSTATE STREET LONDON CARE OF STATE STREET BANK AND TRUST,BOSTON SSBTC A/C UK LONDON BRANCH CLIENTS - UNITED KINGDOM

Number of shares
held (in thousands)
13,8362,682
2,538

Percentage ofshares held (%)
22.9
4.4
4.2

1,736
1,280
1,275
1,237
1,161

2.9
2.1
2.1
2.0
1.9

1,082

1.8

1,008

1.7

Note: The Company owns 3,010,320 shares of treasury stock. This shareholding has not been included in the calculation of the shareholding ratio. However,
100,000 shares of the Company held by Trust & Custody Services Bank, Ltd. (Trust account E) as a trust property under the Board Benefit Trust (BBT)
system is excluded from the number of the treasury shares, and hence, is included in the calculation of the ratio.

Stock Price(3) Feedback• The director in charge of IR presents a report to the board of
directors regarding shareholder opinions and concerns
obtained through dialogue with shareholders.

Stock price
(yen)
2,000
1,800
1,600
1,400

IR activities in FY2019
Activity
Implemented
Financial results briefings
2 times
Individual meetings with institutional investors,
42 times
analysts etc. (including overseas)
Briefings for individual investors
2 times

1,200
1,000
800
600
400
200

External evaluation
The company received the Silver Medal in Gomez IR Site
Comprehensive Ranking 2019 announced by Morningstar
Japan K.K. and the AA Prize in the All Japanese Listed
Companies’ Website Ranking announced by Nikko Investor
Relations Co., Ltd. (Nikko IR).

0

FY2010FY2011FY2012FY2013

FY2014Credit Rating
Rating agency
Rating and Investment Information, Inc. (R&I)

Issuer rating
A- (stable)

FY2015FY2016FY2017FY2018FY2019A cautionary note regarding future estimates
The data and future predictions contained in this report are basedon information available and judgments applicable at the time of
the report’s release. Consequently, the data and future forecasts
contained herein may include elements that are subject to change,
and the reader should be aware that this document and its
contents are no guarantee of future performance.

Inabata Integrated Report 202070