annual report 2019 - j-display.com · a world that is inspiring and free of stress. we shape our...

Annual Report2019

Disclaimer for Forward-Looking Statements

Information concerning industry or market trends, or matters such as economic conditions, contained in this Annual Report was prepared based on data available at the time of preparation of such information. The Company makes no warranties regarding the authenticity, accuracy, reasonableness and comprehensiveness of posted information. Information on the Group’s plans, estimates, forecasts, and expectations, as well as all other information concerning the future, is solely the expression of the Company’s judgment or opinions at the time of preparation of such information. Actual business performance, financial conditions, and other results may differ significantly from information in this Annual Report or conclusions drawn from such information, because of changes in personal consumption or other economic conditions in Japan or elsewhere, currency exchange conditions, trends in smartphone or other electronic device markets, the management orientation of key customers, fluctuations in raw material prices, or other factors.

JDI develops, manufactures and delivers displays to the global market that are essential in creating a visual interface capable of transmitting large

amounts of information instantaneously and linking people to the world at large. JDI’s products are used in a wide range of applications including

smartphones and other mobile devices, automotive electronics, which are becoming increasingly intelligent, digital cameras and other consumer

electronics, medical equipment and industrial equipment. Display products JDI produces have a worldwide reputation for their high quality and

innovative technology.

By fully capitalizing on its advanced technological capabilities to address needs and resolve issues in rapidly changing markets, development

capabilities to innovate and create new markets, production knowhow, and other management resources, JDI aims to fulfill its purpose while evolving

as an enterprise indispensable for people worldwide.

About Japan Display Inc. (JDI)

Introduction

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Table of Contents

1 Introduction

3 Consolidated Financial Data

6 Overview by Application Category

8 Topics

9 Financial Measures

Securing financial stability through large-scale capital injection & refinancing

10 ESG Activities Conducted by JDI

11 Corporate Governance

16 Environmental Activities

18 Financial Data

20 Corporate Profile

21 Stock Information

Introduction

With fresh perspectives and advancing technologies, we work constantly to realize a world that is inspiring and free of stress.

We shape our future with every movement we make.We create multisensory realities that transform into extraordinary moments you can see, hear, touch, smell, and taste.

1. We welcome challenge,and always bring customer tasks to completion.

2. We move quickly with unconventional ideas,and strive to exceed expectations.

3. We adapt to, enjoy, and drive positive change.

Our Purpose

Our Vision

OurBehaviors


◀◀◀ ◀ 2 ▶

Major Performance Indicators 2015.3 2016.3 2017.3 2018.3 2019.3

Net sales 769,304 989,115 884,440 717,522 636,661

Gross profit (loss) 55,717 76,839 68,405 (2,629) 16,305

Operating profit (loss) 5,147 16,710 18,502 (61,749) (30,989)

Operating profit (loss) margin (%) 0.7 1.7 2.1 (8.6) (4.9)

Ordinary profit (loss) 1,864 (12,934) (8,871) (93,658) (44,153)

Net profit (loss) attributable to owners of the parent (12,270) (31,840) (31,664) (247,231) (109,433)

Comprehensive income (loss) (1,211) (37,478) (36,321) (244,547) (110,029)

Total assets 831,622 813,861 915,631 614,644 545,376

Interest-bearing debt 83,513 77,325 135,199 188,063 185,843

Net assets 402,626 365,249 327,085 82,046 7,023

Cash flow from operating activities 73,320 151,442 112,004 (754) (6,142)

Cash flow from investing activities (96,346) (181,156) (142,592) (53,161) (37,864)

Cash flow from financing activities (24,971) (6,098) 55,663 52,864 31,756

Free cash flow (23,026) (29,714) (30,588) (53,916) (44,007)

Ending balance, cash and cash equivalents 94,643 55,077 82,247 80,866 68,988

Net assets per share (yen) 666.92 603.83 540.16 133.58 5.91

Net profit (loss) per share (yen) (20.42) (52.94) (52.65) (411.09) (131.84)

Shareholders’ equity ratio (%) 48.2 44.6 35.5 13.1 0.9

ROA (Return on Assets) (%) (1.5) (3.9) (3.7) (32.3) (18.9)

ROE (Return on Equity) (%) (3.0) (8.3) (9.2) (122.0) (256.5)

EBITDA 75,708 93,661 100,836 19,587 14.078

Consolidated Financial Data

(Millions of yen)

Note: Figures are rounded down to the nearest million yen.


◀◀◀ ◀ 3 ▶


Net sales: Net sales in FY2018 ended March 31, 2019, decreased

11.3% YoY to ¥636.7 bn. Although sales increased in the

Automotive Category, where the market continues to expand,

and in the Non-Mobile Device Category, where sales of wearable

devices and displays for high-end notebook PCs increased, the

decline in total net sales were largely due to the slowdown in the

smartphone market, which accounts for more than 70% of net

sales in the Mobile Device Category, and intensified competition

with other companies, including OLED display manufacturers.

Operating profit: Despite efforts to reduce fixed costs by

approximately ¥50 bn annually thanks to the effects of structural

reforms implemented in FY2017, the improvement in profit for

the FY2018 was limited due to a sales decline and intensified price

competition, resulting in an operating loss of ¥31.0 bn.

Ordinary profit: Ordinary loss totaled ¥44.2 bn in FY2018 mainly

due to the recording of share of loss of entities accounted for

using the equity method related to JOLED Inc., of ¥8.9 bn and

interest expenses of ¥2.8 bn both as non-operating expenses.

Net profit attributable to owners of the parent:

Net loss attributable to owners of the parent in FY2018 amounted

to ¥109.4 bn due to impairment losses of ¥75.2 bn.

As the profitability of smartphone manufacturing assets (such

as Hakusan Plant) declined, the book value of these assets were

reduced down to the recoverable amount. (109.4)

(247.2)

(12.3)(31.8) (31.7)

(Billions of yen)

Net profit (loss) attributable to owners of the parent

2019.32015.3 2016.3 2017.3 2018.3

(44.2)

(93.7)

1.9

(12.9) (8.9)

(Billions of yen)

Ordinary profit (loss)

2019.32015.3 2016.3 2017.3 2018.3

(31.0)

(61.7)

5.1

16.7 18.5

(Billions of yen)

Operating profit (loss)

2019.32015.3 2016.3 2017.3 2018.3

169.8151.0 155.8154.3 153.4

466.9615.1

838.1728.6

564.1

636.7

989.1884.4

769.3717.5

Mobile Device Category

Automotive and Non-Mobile Category

(Billions of yen)

Net sales

2019.32015.3 2016.3 2017.3 2018.3


◀◀◀ ◀ 4 ▶

Total assets/Net assets: Total assets at the end of FY2018

were ¥545.4 bn, down ¥69.3 bn from a year earlier. This was

mainly due to the sale of assets related to the Nomi Plant and the

recording of impairment losses on assets related to Hakusan Plant.

Net assets decreased by ¥75.0 bn from the previous fiscal year end to

¥7.0 bn because of the recording of net loss attributable to owners

of the parent of ¥109.4 bn, despite an increase in shareholders’

equity of ¥35 bn due to issuance of new shares. As a result, the

shareholder’s equity ratio was 0.9%.

Cash flow: Net cash used in operating activities was ¥6.1 bn

mainly due to the recording of ¥106.7 bn in loss before income

taxes, while non-cash income included ¥43.9 bn in depreciation

and ¥75.2 bn in impairment losses. Net cash used in investing

activities totaled ¥37.9 bn reflecting ¥45.0 bn Capex and ¥19.1 bn

proceeds from the sale of the Nomi Plant. As a result, free cash flow

in FY2018 was negative at ¥44.0 bn.

Capital expenditures/Depreciation and amortization:

Capex in FY2018 amounted to ¥45.0 bn mainly for OLED pre-

production line at the Mobara Plant and for overseas back-end

production facilities. Depreciation and amortization decreased by

¥45.3 bn to ¥45.9 bn mainly due to fixed assets Mobara write-

down of ¥103.8 bn in FY2017 and completion of depreciation

for some assets in the Mobara Plant J1 line was fully depreciated

during FY2018.

R&D expenses: R&D expenses in FY2018 decreased ¥4.1 bn

from the previous fiscal year to ¥15.1 bn. Major R&D activities

included the development of OLED displays, oxide semiconductors

which realizes low power consumption and glass-based capacitive

fingerprint sensors.


7.0

831.6

402.6 365.2

813.9

327,1

915.6

545.4

82.0

614.6

Total assets

Net assets

(Billions of yen)

Total assets/Net assets

2019.32015.3 2016.3 2017.3 2018.3

(96.3)

(37.9)

(142.6)

(53.2)

(6.1)

151.4112.0

73.3

(0.8)

Operating cash flow

Investing cash flow

(Billions of yen)

Cash flow

2019.32015.3 2016.3 2017.3 2018.3

(181.2)

45.049.5

80.990.2

70.9

186.4

133.4

108.4

45.9

91.2

Capital expenditure

Depreciation and amortization

(Billions of yen)

Capital expenditure/Depreciation and amortization

2019.32015.3 2016.3 2017.3 2018.3

15.1

19.2

23.3

13.916.0

(Billions of yen)

R&D expenses

2019.32015.3 2016.3 2017.3 2018.3


◀◀◀ ◀ 5 ▶

Overview by Application Category

FY2018Sales ratio

73.3%Mobile Device CategoryDisplays for smartphones and tablets

9.0%Automotive CategoryLCD modules for car navigation, instrument panels, and rear sheet monitors

615.1

838.1728.6

2019.32015.3 2016.3 2017.3 2018.3

466.9564.1

(Billions of yen)

Mobile DeviceCategorySales

2019.32015.3 2016.3 2017.3 2018.3

169.8153.4

112.357.5

151.0 155.8154.3

Non-Mobile CategoryDisplays for consumer electronics (such as digital cameras and wearable

devices), industrial devices (such as medical equipment monitors), and

income from patents and other sources.

1 7.7%As of FY2018 the heretofore “Automotive & Non-Mobile Device Category” has been separated into the “Automotive Category” and the “Non-Mobile Category.”

(Billions of yen)

Automotive and Non-MobileCategorySales


◀◀◀ ◀ 6 ▶

A global slump in the smartphone market that was seen to be the result of an economic slowdown in China and the prolongation of the smartphone life cycle, and fiercer competition due to production expansion by Chinese competitors, greater usages of OLED displays for smartphones and other factors, meant that this category remained surrounded by a tough business environment. While the shipment volume of slim bezel display FULL ACTIVE™ saw a substantial increase, the sales volume in this category fell significantly below JDI’s initial expectations, resulting in a 17.2% YoY decline in net sales to 466.9 billion yen.

Faced with a decline in profitability because of price competition in this category, in June 2019 JDI announced a downsizing of its mobile business and the suspension of operations at the Hakusan Plant.

Although new emission test standards in Europe and the economic slowdown in China slowed down sales of new cars, JDI’s net sales in this category increased 4.3% YoY to 112.3 billion yen against the backdrop of an increase in the number of displays and the size of displays installed in vehicles. As the integration of displays with the interior design of vehicles is growing, mainly in luxury cars, JDI’s curved LCD was used for the first time in the world for mass-produced cars in fiscal year 2018.

▶Mobile Device Category

▶Automotive Category

Overview by Application Category

Sales of displays for digital still cameras, the largest application in the non-mobile category, declined due to a shrinking market. Also, a production halt due to a Mobara V3 line closure led to the disappearance of display sales for game consoles. However, net sales in this category increased 25.7% YoY owing to higher sales of displays for new applications, such as wearable devices, high-end notebook PCs and VR devices.

In fiscal year 2018 JDI started sales of VRHMD “VRM-100”, its first B2C product, equipped with the Company’s high-resolution LCD panels.

▶Non-Mobile Category

Our Performance in Fiscal Year 2018 Main Application● Smartphone and tablets

● Instrument cluster

Head Up Display (HUD)

Center Stack Display (CSD)

Digital mirror

● Digital cameras

Wearable devices

High-end notebook PCs

Medical monitors

Income from patents


◀◀◀ ◀ 7 ▶

JDI developed a flexible fingerprint sensor that

is thin, light, and does not fracture when bent

by integrating its capacitive-type glass-based

fingerprint sensor technology and flexible display

technology. A very thin plastic substrate for the

sensor, only several tens of microns thick, enables

development of unique design products and

prevents fracturing of the substrate when subject

to shock from dropping, making the sensor

suitable for portable devices. In addition, the size

of JDI’s flexible fingerprint sensor can be enlarged,

which is not possible with a silicon fingerprint

sensor, to make it easier to authenticate multiple

fingerprints simultaneously to enhance security.

No fracturing when bent

Flexible Fingerprint Sensor Developed

SID DISPLAY WEEK 2019

Display Application of the Year Award

JDI launched sales of its high-definition virtual

reality (VR) head-mounted display (HMD) “VRM-

100” to domestic developers of content for VR

devices. The VR display unit is equipped with

JDI’s 615ppi LCD panel exclusively developed

for VR applications and a gyro sensor that

enables experiencing a sophisticated sense of

immersion. VRM-100 is JDI’s first direct sale to

end-users. It is expected to be used in a wide

range of areas including education, training,

business demonstrations, etc. and will be utilized

as a marketing tool to get close to the end-user

market.

High-definition VR head-mounted displays

Sales launch of VRM-100

JDI received the “Display Application of the Year

Award” for its curved TFT LCD application, the

world’s first curved display used for automotive

dashboards, at the SID DIPLAY WEEK 2019 held

by the Society for Information Display, the most

prestigious international display forum. This is

SID’s highest honor, given only to the best display

products or applications introduced to the market

during the previous year. The award commends

JDI’s ongoing commitment to innovation and

helping shape the future of display performance

and solutions.

TopicsIntroduction of New Products

Click herefor details

Click herefor details Click here

for details


◀◀◀ ◀ 8 ▶

https://www.j-display.com/english/news/2019/20190509.html



Financial Measures

Securing financial stability through large-scale capital injection & refinancingHaving considered that a large-scale injection of capital funds is necessary to solve the

deterioration of its financing and secure net assets for stable business continuity, JDI on

April 12, 2019 entered into the CAPITAL AND BUSINESS ALLIANCE AGREEMENT with Suwa

Investment Holdings, LLC (“Suwa”) and resolved to raise funds by way of issuance of new

shares and bonds with stock acquisition rights through third-party allotment to Suwa. JDI

also agreed to receive continuous support from its largest shareholder and creditor INCJ

Ltd. (“INCJ”). In addition, JDI entered into a MOU toward formulating and implementing a

business alliance with Harvest Tech Investment Management Col, Ltd. (“Harvest Tech”) with

respect to a plan for the mass production of evaporation OLED.

*Suwa is a company that the Suwa Consortium established to make investment in JDI. Harvest Tech, a Chinese investment company and a member of Harvest Group, and Oasis Management Company Ltd., Hong Kong’s investment company, are the members of Suwa Consortium and will become investors of Suwa prior to the implementation of the third-party allotment.

Alliance with Suwa/MOU with Harvest Tech Refinancing by INCJ

Third-party allotment to Suwa

1st Closing(Notes 1,2)

Common stock(Note 3)

(1) Gross proceeds: 42.0 billion yen(2) New shares to be issued: 840 million shares(3) Issue price: 50 yen per share

2nd seriesCBs

(Note 3,4)

(1) Gross proceeds: 8.0 billion yen(2) Total no.of stock acquisition rights: 80(3) Fully diluted new shares: 160 million shares(4) Conversion price: 50 yen per share

Evaporation OLED Business Alliance MOU with Harvest Tech

The goal is to become a leading company in the design, manufacture and sales of OLED displays combining the Company’s technology and Harvest Tech's funding capacity.

Secure financial stability through large-scale capital injection (maximum ¥80 bn) & refinancing (¥152 bn)Improve corporate value through medium to long-term business growth

1. Refinancing into long-term loan and convertible preferred shares

Total of ¥152 bn support: ¥50 bn long-term loan (5yr) & ¥102 bn preferred shares through third party allotment

Use above to repay or buy-back

Subordinated loan (¥30 bn)

1st series unsecured subordinated CBs (¥25 bn)

Short-term loan (¥20 bn)

Commitment line(joint & several guarantee by INCJ)

(Maximum: ¥107 bn)

Bridge loan (¥20 bn)

As of end of March 2019 1st closing (Note 1)

Subordinated loan (approx.¥3.7 bn)

Convertible preferred shares(¥102 bn)

Payment in Substitutes (¥26.3 bn)

Long-term loan (¥50 bn)

Payment in Substitutes (¥20 bn)

2. Bridge loan and short term loans provided by INCJ

INCJ to provide a bridge loan until the 1st closing and short term loan

Bridge Loan (¥20 bn) and part of Subordinate Loan (about ¥26.3 bn) are to be repaid, as a result of substitute performance by the transfer of JOLED stocks (about ¥46.3 bn)

Short-term loan (¥40 bn)

The capital and business alliance agreement with SuwaNote 1. 1st closing : whichever comes later

(i) October 31, 2019, (ii) the fifth business day following the day on which all the CPs are satisfied, or (iii) any other date as JDI and Suwa separately agree.

Note 2. It is possible that the total amount of the issue price of (i) the 2nd series CBs will increase, and (ii) the 3rd series CBs will decrease, with an upper limit of ¥10 bn, respectively, by a resolution of the board of directors meeting. (The total amount of the issue price of the 2nd and the 3rd series CBs will be ¥38 bn).

Note 3. (1) Payment period: August 29, 2019 to August 28, 2020. (2) Completion of payment may be delayed depending on the status of Japanese/overseas government permissions & approvals.

Note 4. (1) Coupon: Zero (2) Maturity date: After 5 years from the date of allotment of the 2nd series CBs (3) Exercise period: 5 years starting from 6 months after the allotment date of the 2nd series CBs

Note 5. Issuance is on condition that Suwa has completed raising the fund.

3rd seriesCBs

(Note 3,4)

(1) Gross proceeds: 30.0 billion yen(2) Total no.of stock acquisition rights: 300(3) Fully diluted new shares: 600 million shares(4) Conversion price: 50 yen per share

*JDI to determine the necessity of the issuance based on the funding needs (Note 5)

Short-term loan

Long-term loan

Capital


◀◀◀ ◀ 9 ▶

ESG Activities Conducted by JDI

JDI has established JDI Code of Ethics, a set of specific guidelines to which all officers and employees are required to adhere in order to practice

management in compliance with laws and regulations and corporate ethics. JDI believes engaging in activities related to Environment, Social and

Governance based on the Code of Ethics will form the foundation of sustainable growth.

Foundation for sustainable

growth● Respect for human rights

● Human resource development

● Respect for diversity

● Occupational safety and health promotion

● Responsibility for local community

● Quality control

● Fair and transparent system of governance

● Compliance

● Risk management

● Prompt and appropriate information disclosure

Corporate Governance

Environment Information

Relationship with Society

● Reducing the environmental burden of business activities.

● Reducing the environmental burden of our products

● Engaging in activities for conservation of biodiversity and environmental activities at local communities.

Click here for details


◀◀◀ ◀ 10 ▶

https://www.j-display.com/english/csr/governance/index.html

https://www.j-display.com/english/Environment/index.html

https://www.j-display.com/english/csr/community/index.html

https://www.j-display.com/english/ir/governance/pdf/compliance_rm02.pdf


1 In order to pursue sustainable growth and increase corporate value over the medium to long term through the implementation of our corporate principles, JDI has established a Corporate Governance Basic Policy that outlines our corporate governance, the framework for that governance and action policies.

2 In order to ensure transparent, fair, swift, and decisive decision-making in accordance with the interests of shareholders, customers, employees, local communities and other stakeholders, JDI is making continuous efforts to enhance corporate governance in accordance with the following principles: 1. Secure the rights and equal treatment of shareholders.2. Cooperate as appropriate with all stakeholders.3. Disclose information as appropriate in accordance with laws and regulations and other corporate information to

ensure transparency.4. Ensure the effectiveness of the Board of Directors’ decision-making process on important matters concerning

business execution and oversight functions that pertains to persons responsible for business execution (Directors who hold concurrent positions as executive officers and Executive Officers) in accordance with JDI's fiduciary responsibility and accountability to shareholders, and as a company with a Board of Company Auditors

5. Engage in constructive dialogue with shareholders so as to obtain helpful contributions to the Group’s sustainable growth and increased corporate value over the medium to long term.

Basic Policy

JDI is a company with a Board of Company Auditors. Accordingly, the Board of Directors

of the Company makes decisions on important management issues and oversees

business execution, and the Company Auditors and the Board of Company Auditors

audit the status of business execution and other business actions independently of the

Board of Directors. Also, JDI has adopted an Executive Officers system in order to make

prompt decisions related to business execution and has established committees such as

an Executive Committee to discuss important business execution matters. Furthermore,

JDI has voluntary advisory committees created pursuant to resolutions of the Board of

Directors to ensure management transparency, and which deliberate on and decide

matters delegated by the Board of Directors.

Corporate Governance System

Corporate Governance and Internal Control System

Appointment/dismissal

Cooperation

Independent Auditor

Board ofCompany Auditors

Board of Directors/ Directors

Executive Officerin Charge ofCompliance

Internal AuditDivision

Individual in-house companies, divisions and sections, subsidiaries

Executive Officers

Management Committee

RepresentativeDirectorsPresident (CEO),

Senior Managing Representative Director (COO)

ComplianceCommittee

Nominating andCompensation Advisory

Committee

General Meeting of Shareholders



Cooperation

Audit

Audit/guidance

Cooperation

Audit/advice

Seekingadvice

Recommendation

Policy

Guidance/awareness raising

Cooperation



Instructions/oversight

Instructions/oversight

Submit mattersto bedeliberated

Recommendation

Appointment /dismissal/oversight

Reporting

Instructions


◀◀◀ ◀ 11 ▶


The Board of Directors is entrusted by shareholders with the responsibility of

enabling JDI to achieve sustainable growth and maximize corporate value over the

medium to long term through the realization of efficient and effective corporate

governance. At present, the Board of Directors consists of five Directors whose terms

of office are each one year. Outside Directors constitute a majority of the Board of

Directors, as three are Outside Directors, two of which are Independent Outside

Directors. JDI has put in place a system to enable the opinions of Directors, all of

whom have abundant experience and knowledge in global corporate management,

to be reflected in the Company’s management. In principle, the Board of Directors

meets once a month to conduct multi-faceted and sufficient examinations of

proposals concerning important matters and engage in constructive discussion

conducive to the sustainable growth and increased corporate value of JDI over the

medium to long term.

Acting from an independent and objective standpoint, the role and responsibility of

the Auditors and the Board of Company Auditors includes auditing the performance

of Directors in their duties and exercising its authority to appoint and dismiss the

Independent Auditor and determining the Independent Auditor’s compensation.

Standing Company Auditors acquire an understanding of the status of the

realization of corporate governance mainly by attending meetings of the Executive

Committee and other important meetings related to business execution at JDI and

collecting necessary information through interviews with business divisions

(in-house companies) and functioning departments within company Headquarters.

The information they obtain is shared with Outside Company Auditors at

meetings of the Board of Company Auditors, which in principle are held once every

month.

Through these activities, JDI ensures that the Board of Company Auditors

functions in a highly effective manner.

Board of Directors

Board of Company Auditors

In order to make swift business execution decisions, JDI has instituted an Executive

Officers system. Matters concerning business execution not resolved by the Board

of Directors are delegated to the President and Representative Director, the Senior

Managing Representative Director and Executive Officers. Each Executive Officer

executes business in his or her area of responsibility under the oversight of the

President and Representative Director, and Senior Managing Representative Director.

Executive Officers

❶ Nominating and Compensation Advisory Committee

The Nominating and Compensation Advisory Committee is an advisory body

to the Board of Directors that deliberates on important matters and policies

pertaining to the nomination and compensation of Directors and Executive

Officers. Outside Directors constitute a majority of the Committee, with an

Independent Outside Director serving as chair, to assure transparency and

objectivity

❷ Compliance Committee

JDI has established a Compliance Committee to enable the prevention and early

detection of compliance breaches and improve the flexibility of self-policing

procedures. The Committee ensures full compliance within the Group, including

subsidiaries, and establishes compliance-related rules. An Executive Officer in

charge of compliance is appointed by the Board of Directors to assume the

chairperson role and to improve the compliance system. The Executive Officer

in charge of compliance oversees the Whistleblower System, which has both

an external and in-house point of contact to enable the prevention and early

detection of lawbreaking or other compliance violations.

Voluntary Committees


◀◀◀ ◀ 12 ▶


JDI has established a Corporate Governance Basic Policy and regularly implements

measures to enhance corporate governance in order to achieve sustainable growth

and enhance medium to long term corporate value. An analysis and evaluation

of the effectiveness of the Board of Directors performance as a whole in fiscal

year 2018 is shown below. In assessing the Board's performance, a questionnaire

prepared by the secretariat of the Board of Directors was used in a review of all

Directors and Company Auditors. The results of the questionnaire were submitted to

the Board of Directors for its deliberation.

As a result, it was recognized and confirmed that the Board of Directors overall

functions effectively. However, it was also determined that certain areas require

improvement and need to be resolutely addressed. The following is a summary of

the results of the evaluation.

Evaluation of Effectiveness of the Board of Directors

Initiatives

The Nominating and Compensation Advisory Committee evaluates the suitability

of candidates for selection to the Board of Directors. In particular, the Committee

evaluate candidates for Outside Directors from the perspective of independence

and diversity and submits the results of evaluations to the Board of Directors. In

selecting candidates for Executive Officers, the Nominating and Compensation

Advisory Committee evaluates their suitability and recommends persons with

superior character and insightful expertise who are selected based on their ability

to perform their duties as members of the Board of Directors. The Nominating and

Compensation Advisory Committee conducts inquiries into whether to dismiss an

Executive Officer from the standpoint of performance, faithful and loyal execution

of duties or health complications, in the event that problems arise in fulfilling the

duties of the Executive Officer, and reports its findings to the Board of Directors.

Process for Appointments and Removals of Directors and Executive Officers

❶ Matters highly regardedOutside Directors constitute a majority of the Board of Directors of JDI and Outside Company Auditors account for half of Company Auditors. Discussions at the Board of Directors meetings are deepened by providing prior explanation of Board of Director meeting agenda to Outside Directors, reports and conducting reports and deliberations on important matters before they are presented to the Board of Directors meetings, and exchanging opinions at informal meetings. In addition, confirmation, discussion and ensuring of appropriate procedures in regard to capital financing policy and transactions that may involve conflict of interest were highly regarded.

❷ Comments received from multiple Directors and Company Auditors

Regarding formulation and review of the “medium-term management plan and the business plan”, some comments noted the necessity of devoting more time to discussion of matters related to risk analysis and risk assessment and the importance of timely review of the plan in response to changes in the business environment. Also noted was the necessity of periodical confirmation of measures related to corporate governance and conducting more in-depth discussions about executive personnel, including matters pertaining to the “appointment and removal of executive officers” and “making plans to prepare successor candidates”. While implementing corrective measures to take action on the findings and considering concrete proposals based on the results of the evaluation, JDI will continue to make efforts to further enhance the effectiveness of the Board of Directors.

Fiscal year Items

Number of Directors Number of Company Auditors

InternalOutside

(IndependentDirectors)

InternalOutside

(Independent Company Auditors)

2012 Establishment of the Basic Policy on the Internal Control SystemEstablishment of the Compliance CommitteeEstablishment of the Basic Policy on Severing Relationships with Antisocial ForcesEstablishment of the JDI Ethics

2 7 1 2

2014 Partial revision to the JDI EthicsPartial revision to the Regulations of the Board of Directors (tightening of the criteria for matters to be submitted to the Board of Directors meeting for deliberation)

2 4（3）

2 2（2）

2015 Partial revision to the Basic Policy on the Internal Control System(response to the revised Companies Act, such as the widening of the scope to cover the Group)Establishment of the Management PhilosophyEstablishment of the Corporate Governance Policies

2 4（3）

2 2（2）

2016 Evaluation of the effectiveness of the Board of DirectorsChange of the structure of the Compliance Committee(change of the chairperson)

2 4（3）

2 2（2）

2017 Establishment of the Nominating and Compensation Advisory Committee 2 5（3）

2 2（2）

2018 Evaluation of the effectiveness of the Board of DirectorsEstablishment of Our Purpose through renewal of the Management PhilosophyChange of the structure of the Compliance Committee (change of the chairperson)Partial revision to the Corporate Governance Basic Policy

2 4（3）

2 2（2）

2019 Evaluation of the effectiveness of the Board of Directors 2 3（2）

2 2（2）


◀◀◀ ◀ 13 ▶


In formulating the annual business plan and the medium-term business plan, JDI

analyzes risks in the formulation process and incorporates risk countermeasures

into the plans. Furthermore, in Business Continuity Planning (BCP), the Company

anticipates risk-event scenarios (natural disasters, public health emergencies,

information and communication difficulties, accidents, etc.), estimates their impact

with regard to customers, suppliers and other aspects of JDI’s supply chain, and

implements countermeasures and other preparations in advance to minimize the

impact and to enable a rapid recovery.

JDI has identified eight risk categories: natural disaster and accident risks, legal

(litigation) risks, financial risks, economic risks, labor risks, political risks, social risks

and business activity risks. The Group performs assessment of assumed risks in

terms of their probability of occurrence and their impact if they were to materialize,

considers and formulates countermeasures for risks that rise above a certain

level, and announces those countermeasures throughout the Group following a

management review. The Group reviews risk evaluation items and content (and sets

the degree of importance of particular risks) each year.

JDI has prepared necessary rules and systems to prevent risks from materializing

and to minimize the impact if a risk event occurs. The Company uncovers and

ascertains risk factors in the course of daily information sharing and reporting

business execution. It also verifies the status of the implementation of measures to

prevent risks from materializing and seeks to minimize the impact of risk events.

Risk Management System

JDI has introduced stock options as compensation for Directors, excluding Outside

Directors, to enhance their motivation toward improving JDI’s performance and

corporate value over the medium to long term. For the short term, compensation is

designed to reflect the results of JDI’s performance. The overall limit of compensation

is determined at the General Meeting of Shareholders. The Nominating and

Compensation Advisory Committee reviews compensation in line with an evaluation

of the Company’s financial performance for each fiscal year as well as matters

concerning the granting of stock options. Compensation for Outside Directors is a

fixed amount in view of their roles and independence. Appropriate compensation

amounts are calculated by taking into consideration the degree of difficulty of

acquiring human resources, hours of duty, the degree of participation in committee

activities and other factors to enhance transparency and objectivity.

The Nominating and Compensation Advisory Committee deliberates on and decides

policies that determine the amount of compensation for each Executive Officers and

the granting of stock options.

Compensation for Company Auditors is a fixed amount in view of their role and

independence. The total amount of compensation is approved by the General Meeting

of Shareholders following discussions among the Company Auditors.

Compensation for Directors and Company Auditors

Natural disasterand accident risks

Legal (litigation)risks Financial risks Economic risks

Labor risks Political risks Social risks Business activityrisks


◀◀◀ ◀ 14 ▶


In accordance with the Basic Policy for Compliance, JDI has instituted a Compliance

Committee to serve as a forum where representatives from different divisions of

the Company meet to deliberate on and implement measures for establishing

and inculcating compliance promotion systems and programs. A compliance

administrator is assigned in each division to ensure awareness of compliance

measures among the employees in each division. The Compliance Committee is

supervised by a chairperson appointed by the Board of Directors and the Committee

membership consists of representatives from different company divisions who

prepare compliance-related measures. In principle the Committee meets once every

half-year.

JDI has instituted a Whistleblower System to enable the prevention and early

detection of compliance violations, to increase the flexibility of the self-policing

process and to correct compliance violations and, in so doing, to ensure public trust

in JDI. Employees and other persons who have discovered compliance violations

or suspected violations can use the Whistleblower System to seek consultation

and report problems. Given this set-up, the System helps to instill compliance

awareness among employees and others involved with the Company. Under the

Whistleblowing System, JDI has created both external and in-house points of

contact. Also, in accordance with JDI’s regulations, the System explicitly prohibits

any prejudicial treatment of whistleblowers and takes due measures to protect

whistleblowers, such as managing whistleblowing information in strict confidence.

Compliance

Whistleblower System

JDI has established the Policies on Information Security and other rules to avoid the

risk of leakage of information handled by the JDI Group. The Company takes steps

to ensure all officers the Company and employees are familiar with the rules and

that they are properly implemented. In addition, an Information Security Committee

has been created to implement groupwide information security-related procedures.

This Committee conducts risk assessment and risk management and engages in

continuous activities to prevent the loss, leakage or theft of confidential information.

The Committee also supervises the safeguarding of information assets and the

establishment of information management systems in response to actual conditions

in each field of business.

JDI recognizes information disclosure as one of its management responsibilities

and actively conducts public relations and investor relations activities that

emphasize fairness and transparency to earn the trust of all stakeholders, including

shareholders and investors, customers, suppliers, and the communities in which JDI

operates. Further, in recognition of the importance of maintaining active dialogue

with shareholders at all times and reflecting their opinions and requests in its

management in order to promote sustainable growth and increased corporate

value over the medium to long term, JDI is dedicated to improving its IR structure

and abilities to respond to inquiries from shareholders and investors, by organizing

channels of dialogue and other means of communication. JDI has established a set

of “Information Disclosure Policies” and under its responsibility as a listed company

discloses corporate information important for shareholder and investor decisions on

investment in JDI in an easy-to-understand, prompt, precise, and fair manner, while

endeavoring to facilitate deeper understanding and appropriate evaluation of JDI

among shareholders and investors.

Information Security System

Information Disclosure Policies


◀◀◀ ◀ 15 ▶

Environmental Activities

Environmental Policy

JDI continually improves its environmental management system to reduce the environmental burden, considering the lifecycle of our display products.

JDI complies with domestic and foreign legal requirements and other voluntarily accepted requirements.

JDI sets environmental objectives on the following priority themes and promote activities for their achievement in order to conserve the environment.

JDI reduces the environmental burden of business activities.

● —1　Promote measures to mitigate global warming, for energy conservation and in the efficient use of water;

● —2　Thoroughly manage chemical substances and promote their reduction and substitution;

● —3　Promote 3R (Reduce, Reuse, Recycle) activities in waste management.

JDI reduces the environmental burden of our products.

● —1　Promote the development of environmentally conscious products;● —2　Thoroughly manage chemical substances contained in products;● —3　Promote green procurement.

JDI engages in activities for conservation of biodiversity and environmental activities at local communities.

Basic policy

Priority themes

Recognizing that global environmental conservation is one of the most important challenges for humanity, we at Japan Display Inc. Group respect people and the environment, and aim to contribute to a sustainable society.

Environmental Targets JDI has set eight company-wide environmental targets in accordance with JDI’s environmental policy and is striving to achieve continuous improvement.

JDI’s FY2018 results in relation to environmental targets are shown in the table below.

FY2018

Item Indicator Target value Actual value Evaluation*5

Reduce emissions of energy-derived CO₂*1Reduction amount (t-CO²) 3,545 or more 10,756

Absolute amount (t-CO²) 546,007 or less 507,314

Reduce total water consumptionReduction amount (m³) 288,000 or more 135,000 ×*6

Absolute amount （m³） 24,548,000 or less 21,012,000

Reduce emissions of priority controlled chemical substances*2

Reduction amount (t) 2,337 or more 2,629

Absolute amount (t) 30,129 or less 21,400

Implement thorough management of chemical substances, reduce their use, and promote use of alternatives

No deviation in terms of use of chemical substances Operated properly

Continue biodiversity conservation activities and environmental activities in local communities Implemented as planned Implemented as planned

Supply Eco-products that take product life cycles into consideration

Proportion of Eco-products*4

(excluding causes attributable to customers) 100%

Confirm chemical substances contained in products in the development process

Appropriate management of judgments on contained chemical substances

All cases appropriate

Promote environmentally conscious procurement activities

Revision of Green Procurement Guidelines in response to legal and customers’ requirements.

Revision completed

FY2019JDI’s FY2019 environmental targets are show in the table below. Items - were revised, reflecting the reduction measures.

Scope: Items - cover plants in Japan (Tottori, Higashiura, Ishikawa, Hakusan, Mobara). [Mobara V3 line was outside the scope but under observation.] *1 The CO2 emissions coefficient for electricity is 0.476 t-CO2/MWh (receiving-end CO2 emissions basic unit for FY2011 announced by the Federation of Electric Power Companies of

Japan). The other conversion factors are from the Act on the Rational Use of Energy and the Act on Promotion of Global Warming Countermeasures. *2 Total water consumption = Received water + Recycled water + Reused water. *3 Waste, etc. = General waste + Industrial waste + Valuables *4 Proportion of Eco-products =

Number of Eco-products/Number of total products developed *5 The achieved targets are shown by . *6 The water reduction target was not achieved due to cancellations of some actions (reduced number of equipment) despite JDI’s recovery efforts.

(Items with absolute amount are being monitored.)

(Items with absolute amount is being monitored.)

Item Indicator Target value

Reduce emissions of energy-derived CO₂Reduction amount (t-CO²) 5,639 or more

Absolute amount (t-CO²) 531,733 or less

Reduce total water consumption20,000 or moreReduction amount (m³)

Absolute amount (m³) 19,173,000 or less

Reduction amount (t) Reduce emissions of waste, etc.

64 or more

Absolute amount (t) 18,424 or less

Implement thorough management of chemical substances, reduce their use, and promote use of alternatives No deviation in terms of use of chemical substances

Continue biodiversity conservation activities and environmental activities in local communities Implemented as planned

Supply Eco-products that take product lifecycles into consideration Proportion of Eco-products (excluding causes attributable to customers)100%

Confirm chemical substances contained in products in the development process Appropriate management of judgments on contained chemical substances

Promote environmentally conscious procurement activities Revision of Green Procurement Guidelines in response to legal and customers’ requirements.


◀◀◀ ◀ 16 ▶

ReuseReusing shipping boxes

Global EnvironmentSustainable Society

Before Simplification

Before After increasing

ReduceSimplifying packaging

Efficient DeliveryIncreasing numbers of product In its tray

CustomerJDI

Production activities

Energy

Electricity(purchased power)

Japan 1,066,129 MWh

Overseas 88,365 MWh

Electricity(solar power)

Japan 113 MWh

Overseas 0 MWh

City gas Japan 13.114 million m3

Overseas 0.091 million m3

Heavy fuel oil Japan 3,455 kL

Overseas 122 kL

LPG Japan 3,517 t

Overseas 14 t

LNG Japan 786 t

Overseas 0 t

Diesel oil Japan 0 kL

Overseas 134 kL

INPUT

Amount of water received

Japan 13.108 million m3


Amount of priority controlled chemicalsubstances*1 used

Japan 16,938 t

Overseas 111 t

CO2

Energy-derived

CO₂*2

Japan 556,000 t-CO₂

Overseas 43,000 t-CO₂

Greenhouse gases*3 Japan 70,000 t-CO₂

Overseas 0 t-CO₂

OUTPUT

Wastewater

Japan 12.066 million m3


Amount of priority controlled chemicalsubstances*1 emitted

Japan 195 t

Overseas 13 t

Amount of total waste (including valuables) released

Total waste, etc. Japan 22,296 t

Overseas 3,754 t

Industrial waste Japan 14,359 t

Overseas 822 t

Valuables Japan 7,763 t

Overseas 1,458 t

General waste

Japan 174 t

Overseas 1,474 t

*1 The priority controlled chemical substances are 38 substances designated by JDI as priority control targets.*2 The CO₂ emissions coefficient from electricity in Japan is 0.476t-CO₂/MWh (receiving-end CO₂ emissions basic unit for FY2011 announced by the Federation

of Electric Power Companies of Japan). The other conversion factors are from the Act on the Rational Use of Energy and the Act on Promotion of Global Warming Countermeasures. Local emissions coefficients for China, Taiwan, and the Philippines were used for the CO₂ emissions coefficients from electricity in other countries.

*3 Among substances covered in the Act on Promotion of Global Warming Countermeasures, JDI uses the term “greenhouse gases” to refer to these seven substances: PFC (CF₄, c-C₄F₈), HFC (CHF₃, C₂HF₅), SF₆, NF₃, N₂O. JDI uses AR4 for the global warming potential.

*4 Within Japan, this refers to emissions of the 38 priority controlled chemical substances designated by JDI, and overseas it refers only to emissions of VOC.

Environmental Burden JDI’s business activities involve inputting energy and resources to produce products and emitting CO2, waste, etc. These inputs and outputs are regarded as environmental aspects in ISO 14001.

An overview of this is shown in the figure below (covers all domestic plants + overseas manufacturing subsidiaries in FY2018). The basis of our environmental improvement activities lies in reducing the amount of inputs and outputs, and we work to address such activities by determining these items for each area in a detailed manner.

Control of chemical substance contained in product

JDI has established the Green Procurement Guideline based on the RoHS Directive, the ELV Directive, the REACH Regulation and other laws and regulations as well as on requests from customers.Cooperating together with our suppliers, we manage chemical substances contained in procured items such as parts and material, related to our products.

Before shipping them to our customers, we examine chemical substances contained in our products.

We dedicate ourselves to managing chemical substances contained in our products.

Customer

Laws andRegulation

JDISupplier

Customers’Requests

RoHSDirective

Establishment and disclosure of Green Procurement Guideline

REACHRegulation

Confirmation that the product meets laws, regulations

and customers’ requests

Sampling procured items and

screening chemical substances

contained in them

Sharing information about chemical

substances contained in procured items

Establishment of management system for

chemical substances contained in

procured items

ELVDirective

Environmentally friendly productsJDI is engaged in global warming prevention through improvement of efficiency in delivery of its products to customers with the understanding and cooperation of customers. JDI repeatedly reuses shipping boxes for product deliver to customers and simplifies packaging to reduce waste.

Working together with its customers, JDI will continue to promote the preservation of the global environment and contribute to a sustainable society.

(JDI’s Input and Output in Fiscal 2018)

*4

Environmental Activities Table ofcontents Previous Page Next

◀◀◀ ◀ 17 ▶

FY2017(March 31, 2018)

FY2018(March 31, 2019)

AssetsCurrent assets

Cash and deposits 80,866 68,988Accounts receivable - trade 82,863 92,225Other receivables 42,766 49,699Merchandise and finished goods 17,427 29,106Work in process 27,381 23,236Raw materials and supplies 13,358 18,746Other 6,283 8,980Allowance for doubtful accounts (167) (103)Total current assets 270,779 290,880

Non-current assetsProperty, plant and equipment

Building and structures 224,396 196,025Accumulated depreciation (91,898) (90,233)Building and structures, net 132,498 105,792

Machinery, equipment and vehicles 541,270 443,543Accumulated depreciation (430,057) (376,910)Machinery, equipment and vehicles, net 111,212 66,632

Land 14,238 12,073Lease assets 24,150 1,590

Accumulated depreciation (16,504) (1,590)Lease assets, net 7,645 0

Construction in progress 28,940 19,886Other 48,845 44,111

Accumulated depreciation (41,580) (39,386)Other, net 7,265 4,724

Total property, plant and equipment 301,801 209,110Intangible assets

Goodwill, net 13,832 8,716Other 5,148 3,561Total intangible assets 18,981 12,278

Investments and other assetsInvestment securities 12,253 24,395Deferred tax assets 735 361Other 13,571 8,932Allowance for doubtful accounts (3,478) (581)Total investment and other assets 23,081 33,107

Total non-current assets 343,865 254,496Total assets 614,644 545,376

(Millions of yen)Consolidated Balance Sheets

FY2017(March 31, 2018)

FY2018(March 31, 2019)

Liabilities

Current liabilities

Accounts payable - trade 117,830 175,592

Electronically recorded obligations-operating — 2,817

Short-term borrowings 99,082 130,843

Lease obligations 13,980 0

Income tax payable 943 1,489

Provision for bonuses 4,596 4,345

Advance received 128,288 101,923

Other 59,378 35,945

Total current liabilities 424,099 452,957

Non-current liabilities

Bonds with share acquisition rights 45,000 25,000

Long-term borrowings 30,000 30,000

Lease obligations 0 —

Net defined benefit liability 24,063 20,052

Other 9,435 10,344

Total noncurrent liabilities 108,498 85,396

Total liabilities 532,598 538,353

Net assets

Shareholders’ equity

Capital stock 96,863 114,362

Capital surplus 213,648 231,148

Retained earnings (233,281) (342,714)

Treasury shares － 0

Total shareholders’ equity 77,229 2,796

Accumulated other comprehensive income

Valuation difference on available-for-sale securities — (1)

Foreign currency translation adjustments 10,838 8,957

Remeasurements of defined benefit plans (7,731) (6,754)

Total accumulated other comprehensive income 3,106 2,200

Share acquisition rights 47 53

Non-controlling interests 1,662 1,972

Total net assets 82,046 7,023

Total liabilities and net assets 614,644 545,376

(Millions of yen)

Financial Data More detailed financial data is available.

Download financial information (PDF). JDI Website



◀◀◀ ◀ 18 ▶

https://www.j-display.com/english/ir/library/pdf/financialreport2019.pdf

https://www.j-display.com/english/

FY2017 FY2018

Net sales 717,522 636,661

Cost of sales 720,152 620,355

Gross profit (loss) (2,629) 16,305

Selling, general and administrative expenses 59,119 47,295

Operating profit (loss) (61,749) (30,989)

Non-operating income

Interest income 124 146

Foreign exchange gains — 1,765

Subsidy income 1,426 832

Rent income 500 487

Fiduciary obligation fee 1,695 1,239

Other 790 1,425

Total non-operating income 4,538 5,896

Non-operating expenses

Interest expense 2,511 2,789

Share of loss of entities accounted for using equity method 14,162 8,862

Foreign exchange losses 3,219 —

Depreciation 9,903 831

Other 6,649 6,577

Total non-operating expenses 36,447 19,060

Ordinary profit (loss) (93,658) (44,153)

Extraordinary income

Gain on change in equity — 12,656

Total extraordinary income — 12,656

Extraordinary losses

Business structure improvement expense 142,260 —

Provision of allowance for doubtful accounts 1,467 —

Impairment loss — 75,189

Total extraordinary losses 143,728 75,189

Income (loss) before income taxes (237,386) (106,686)

Income tax - current 2,734 2,654

Income tax - deferred 7,124 218

Total income taxes 9,858 2,436

Net income (loss) (247,245) (109,123)

Less: net income (loss) attributable to non-controlling interests (14) 309

Net income (loss) attributable to owners of the parent (247,231) (109,433)

(Millions of yen)Consolidated Statements of Income

FY2017 FY2018

Cash flow from operating activitiesIncome (loss) before income taxes (237,386) (106,686)Depreciation 89,169 43,909Amortization of goodwill 2,070 1,990Impairment losses — 75,189Increase (decrease) in allowance for doubtful accounts 1,302 (2,807)Increase (decrease) in net defined benefit liability (2,141) (3,027)Interest expense 2,511 2,789Foreign exchange losses (gains) 3,370 (2,749)Subsidy received (1,426) (832)Share of (profit) loss of entities accounted for using equity method 14,162 8,862Gain on change in equity — (12,656)Loss on reduction of non-current assets 669 432Business structure improvement expense 142,260 —Decrease (increase) in trade receivable 42,996 (6,544)Decrease (increase) in accounts receivable - other 50,690 (10,152)Decrease (increase) in inventories 42,550 (13,532)Decrease (increase) in consumption tax refund receivable (206) (3,081)Increase (decrease) in trade payable (82,305) 64,285Increase (decrease) in accounts payable - other 3,386 (28)Increase (decrease) in accrued expenses (14,407) (10,521)Increase (decrease) in advances received (51,108) (26,344)Other, net (749) 246Subtotal 5,411 (1,260)Dividend income received 125 147Interest paid (2,500) (2,783)Income taxes paid (3,829 (2,414)Income taxes refunded 38 169Net cash provided by (used in) operating activities (754) (6,142)

Cash flow from investing activitiesPurchase of non-current assets (49,494) (45,043)Proceeds from sales of non-current assets 3,021 19,134Purchase of investment securities (6,500) (8,413)Payments for sales of shares of subsidiaries resulting in change in scope of consolidation (1,289) (4,931)Subsidies received 1,026 1,232Other, net 74 156Net cash provided by (used in) investing activities (53,161) (37,864)

Cash flow from financing activitiesNet increase in short-term borrowings 73,383 31,776Redemption of bonds — (20,000)Proceeds from issuance of shares — 34,999Payments for treasury shares — (0)Repayment of lease obligations (20,519) (13,980)Repayments of installment payables — (1,038)Net cash provided by (used in) financing activities 52,864 31,756

Effect of exchange rate change on cash and cash equivalents (329) 373Net increase (decrease) in cash and cash equivalents (1,381) (11,877)Cash and cash equivalents at beginning of period 82,247 80,866Cash and cash equivalents at end of period 80,866 68,988

(Millions of yen)Consolidated Statements of Cash Flows

Financial Data More detailed financial data is available.

Download financial information (PDF). JDI Website


( )from April 1, 2017to March 31, 2018 ( )from April 1, 2018

to March 31, 2019 ( )from April 1, 2017to March 31, 2018 ( )from April 1, 2018

to March 31, 2019


◀◀◀ ◀ 19 ▶

https://www.j-display.com/english/ir/library/pdf/financialreport2019.pdf

https://www.j-display.com/english/

Manufacturing plants

MobaraPlant G6 LTPS

IshikawaSite

Ishikawa Plant G4.5 LTPS

Hakusan Plant G6 LTPS

HigashiuraPlant G3.5 LTPS

TottoriPlant G4 a-Si

Landic 2nd Bldg., 3-7-1, Nishi-shinbashi, Minato-ku, Tokyo

Headquarters

Western Japan OfficeNissay Shin-Osaka Minamiguchi Bldg., 5-14-5, Nishi-Nakajima, Yodogawa-ku, Osaka

Sales Office

Ebina R&D Center

Ebina Prime Tower, 2-9-50, Chuo, Ebina-shi,Kanagawa Prefecture

Design and Development Office

a-Si ：Plants adopting amorphous silicon technologyLTPS：Plants adopting low-temperature polycrystalline

silicon technology

OverseasSalesSubsidiaries

OverseasManufacturingSubsidiaries

JDI Display America, Inc. San Jose, CA, USA

JDI Europe GmbH München, Germany

JDI China Inc. Shanghai, PRC

JDI Hong Kong Limited Kowloon, Hong Kong

JDI Taiwan Inc. Taipei, Taiwan

JDI Korea Inc. Seoul, Korea

Suzhou JDI Electronics Inc. Suzhou, PRC

Nanox Philippines Inc. Pampanga, Philippines

Kaohsiung Opto-Electronics Inc. Kaohsiung, Taiwan

Domestic Sites

Corporate Profile

Board of Directors (as of June 18, 2019)

Directors

President, Representative Director Yoshiyuki Tsukizaki

Senior Managing Representative Director Sadahiro Numazawa

Outside Director Takahisa Hashimoto

Outside Director Nobuyuki Nakano

Outside Director Ryosuke Kuwada

Company Auditors

Standing Company Auditor Takao Yasuda

Standing Company Auditor Kazuo Kawasaki

Outside Company Auditor Youichi Etou

Outside Company Auditor Toshiaki Kawashima

Overseas Business Locations

Outline

Company name Japan Display Inc.

Business start April 1, 2012

Capital 114.4 billion yen (as of March 31,2019)

Employees 10,085 (consolidated, as of March 31,2019)

Business Development, design, production and sale of small/medium display devices and related products

Headquarters 7-1, Nishi-shinbashi 3-chome, Minato-ku, Tokyo 105-0003, Japan


◀◀◀ ◀ 20 ▶

180

0

90

1,200,000

600,000

02018/04 05 06 07 08 10 11 12 2019/01 0209 03 04 05 06

Trading volume (thousand shares) Share price（yen）

Basic Stock Information

Total number of authorized shares 1,840,000,000

Total number of shares issued* 846,165,800

Number of shareholders 83,017

Number of shares per unit 100

*JDI plans to propose to the extraordinary meeting of shareholders, scheduled to be held in September 2019, the amendment of the Articles of Incorporation to: (a) increase the total number of authorized shares to 3.38 billion shares, and (b) to enable class A preferred shares to be issued. Assuming the proposal is approved, JDI also plans to issue new common shares (840 million shares), 2nd series bonds with stock acquisition rights and preferred shares; JDI will also determine the necessity of issuing 3rd series bonds with stock acquisition rights.

Major Shareholders

Name of shareholders Number of shares Shareholding ratio (%)

Innovation Network Corp of Japan. 214,000,000 25.3

GOLDMAN SACHS INTERNATIONAL 66,142,200 7.8

Nichia Corp. 34,965,000 4.1

Sony Corp. 10,700,000 1.3

MLI FOR CLIENT GENERAL OMNI NON COLLATERAL NON TREATY-PB 9,810,600 1.2

Japan Trustee Services Bank,Ltd. (Trust Account 9) 9,443,400 1.1

Japan Trustee Services Bank,Ltd. (Trust Account 5) 9,298,500 1.1

Haneda Turtle Service Co., Ltd. 8,227,000 1.0

Akio Utsumi 7,861,200 0.9

The Master Trust Bank of Japan, Ltd. (Trust account) 7,034,300 0.8

Shareholding by Ownership

Category Number of shareholders Number of shares held Shareholding ratio (%)

Japanese individuals and others 81,733 360,041,080 42.5

Japanese financial institutions 17 48,745,800 5.8

Other Japanese corporations 788 290,109,000 34.3

Foreign institutions and individuals 433 127,254,942 15.0

Japanese securities firms 46 20,014,978 2.4

Ownership and Distribution of Shares

Japanese securities firms20,014,978 shares

2.4%

Foreign institutions and individuals127,254,942 shares

15.0%

Other Japanese corporations290,109,000 shares

34.3%Japanese financial institutions48,745,800 shares

5.8%

Japanese individuals and others360,041,077 shares

42.5%

Share price and trading volume (Month-end share price)

Stock Information(as of March 31, 2019)


◀◀◀ ◀ 21 ▶

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