Fuji Oil : Items Disclosed on the Internet concerning Convocation Notice of 18th Annual General Meeting of Shareholders

(Stock Code: 5017)

June 4, 2020

To Our Shareholders

Items Disclosed on the Internet concerning Convocation Notice of

the 18thAnnual General Meeting of Shareholders

Business Report

Accounting Auditor ……………………………………………… P. 1

Establishment and Implementation Status of Systems for Ensuring Appropriate Business Operations ………………… P. 2

Consolidated Financial Statements

Consolidated Statement of Changes in Net Assets ………. P. 9

Notes to Consolidated Financial Statements ………………. P. 10

Non-Consolidated Financial Statements

Statement of Changes in Net Assets ………………………... P. 18

Notes to Non-Consolidated Financial Statements …………. P. 19

The above items are disclosed on our website (http://www.foc.co.jp/en/ir/library/meeting.html)

for our shareholders' reference in accordance with relevant laws and regulations, and Article 13 of Articles of Association of the Company.

Fuji Oil Company, Ltd.

ACCOUNTING AUDITOR

1. Name of Accounting Auditor

KPMG AZSA LLC

2. Remuneration for the Period

	Remuneration
Remuneration paid for services rendered under	84 million yen
Article 2 (1) of the Certified Public Accountant Law
Remuneration paid for another service than	－
described above
Total cash and other compensation paid by the	92 million yen
Company and its subsidiaries

Note: 1. ASB has consented to the amount of remuneration, etc. of the Accounting Auditor under Article 399 (1) of the Compnaies Act after checking and evaluating the contents of the audit plan for the period explained by the said Auditor, the performance of audit services of the previous period and the basis for calculation upon which the remuneration is estimated, judging that the amount is at a reasonabel level as compared with the past actual amounts and remunerations of other companies in the same industry.

2．Under the audit contract with the Accounting Auditor, specific separation is not, or practically cannot be, made between the audit fees payable for auditing services rendered under the Companies Act and the ones rendered under the Financial Instruments and Exchange Act. The above amount paid for services as provided under Article 2 (1) of the Certified Public Account Law shows the total for services rendered for these two audits.

3．One of the Company's principal subsidiaries, PETRO PROGRESS PTE LTD, is audited by a different accounting auditor from the Company's accounting auditor.

1. Any other service rendered by Accounting Auditor than auditingNone.
2. Policy for dismissing or not reappointing Accounting Auditor

In the event the Accounting Auditor is deemed to fall under any of the matters listed in the items of Article 340 (1) of the Companies Act, the Audit & Supervisory Board (ASB) of the Company shall by its unanimous resolution dismiss such Accounting Auditor. One of the members on the ASB shall be appointed to report the dismissal with its reason to the first Annual General Meeting of Shareholders to be held after the dismissal.

Furthermore, in the event there is any doubt about Accounting Auditor's capability to continuously perform its duties and responsibilities in a satisfactory manner, or the ASB concluded that it is appropriate to change the Accounting Auditor due to the reason that we could expect more appropriate audit etc., the ASB shall decide the contents of a proposition regarding dismissal or refusal of reappointment of the Accounting Auditor, which is to be submitted to a General Meeting of Shareholders.

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ESTABLISHMENT AND IMPLEMENTAION STATUS OF SYSTEMS FOR ENSURING APPROPRIATE BUSINESS OPERATIONS

1. Systems for ensuring appropriate business operations
   Pursuant to Article 362 (5) of the Companies Act, the fundamental policy concerning the development of the systems to ensure that the execution of duties by Directors complies with laws and regulations and the Articles of Association of the Company, and other systems necessary to ensure the properness of operations of the Company as well as the Company group that is comprised of the Company and its subsidiaries （"Group"）is given as below.

1. Systems to secure execution of duties by Directors of the Company to comply with applicable laws and regulations and the Articles of Association of the Company

The Company established its Charter of Corporate Behavior to ensure thorough compliance with applicable laws and regulations whether domestic or international, the Articles of Association of the Company and other relevant regulations. Along with the foregoing, the Board of Directors will determine and implement the Company's policies and plans to improve compliance and internal control systems.

The Company will endeavor to maintain and enhance the function of the Board of Directors in supervising Directors' execution of duties by having outside Directors on the Board.

Audit & Supervisory Board Members of the Company will audit Directors' execution of duties as well as the status of development and implementation of the internal control systems from independent points of view.

2. Systems to secure proper business operations of the Company and the Group

1. System concerning storage and management of information concerning execution of duties by Directors of the Company

Information concerning Directors of the Company' execution of duties will be recorded, stored and maintained at relevant departments in forms of minutes, intra-office memoranda or other documents pursuant to Regulations concerning Board of Directors, Regulations concerning Executive Committee, Regulations concerning Application for Management Approval, and Regulations concerning Documentation, and shall be kept for later retrieval.

The department of the Company in charge of internal audit shall conduct audit in accordance with Regulations concerning Internal Audit to assess the status of recording, storage and maintenance of these documents and regularly report the results thereof to the Board of Directors and the Audit & Supervisory Board.

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1. Regulations concerning risk management of the Company and other systems

Systematic preventive mechanism will be improved in ordinary times by improving a system to comprehensively identify and evaluate material risks to business management and by improving regulations concerning risk management.

The Company establishes its Business Continuity Plan (BCP) and maintains it on a regular basis to prepare for unforeseen events such as major earthquakes and outbreaks of infectious diseases.

If a serious loss is anticipated, Director in charge of the relevant department shall report it to Representing Director-President, and necessary countermeasures will be taken through deliberations at the Board Meeting, Executive Committee meeting, etc. When any contingency occurs, an emergency headquarters shall be set up immediately.

The department of the Company in charge of internal audit will conduct audit in accordance with Regulations concerning Internal Audit to assess the improvement/implementation status of risk management system and regularly report the results thereof to the Board of Directors and the Audit & Supervisory Board of the Company.

3) System to ensure efficient execution of duties by Directors of the Company

The Board of Directors of the Company will determine basic management policies, matters required by the laws and regulations and Articles of Association of the Company, and other important management issues. In addition, the Board will supervise Directors' execution of duties, too.

The Executive Committee consisting of full-time Directors of the Company and full-time Audit & Supervisory Board Members of the Company shall share information concerning the overall management, and along with determining specific policies for each operating division of the Company, make decisions for efficient execution of duties in accordance with the decisions made by the Board of Directors of the Company.

Under the instruction from full-time Directors in charge based on decisions made by the Executive Committee, each department shall execute its duties efficiently pursuant to Regulations concerning Corporate Organization, Regulations concerning Administrative Authority and other relevant regulations, and report the results of operations to Director in charge of the department and the Board of Directors of the Company.

Following the report from each department, the Executive Committee shall review each of the specific policies and take necessary actions to improve the system concerning efficient execution of duties.

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1. System to ensure that the execution of duties by employees of the Company and officers and employees of its subsidiaries/affiliates ("Subsidiaries") complies with applicable laws, regulations and the Articles of Association of the Company

The Company laid down its Charter of Corporate Behavior and requires employees of the Company and officers and employees of the Subsidiaries to strictly comply with applicable laws and regulations whether domestic or international, the Articles of Association of the Company and other relevant regulations, and carries out measures to instill an awareness for the compliance into officers and employees of the Company and officers and employees of its Subsidiaries.

"Helpline" is set up at the head office of the Company and the corporate lawyer's office in order to receive information on violation of the laws and regulations and to provide advice thereon. The Department of the Company in charge of the Helpline will examine the information submitted to the Helpline, implement Company-level preventive measures through consultation with the relevant departments, and regularly report the matter to the Board of Directors of the Company and the Audit & Supervisory Board of the Company.

The department of the Company in charge of internal audit shall conduct audit in accordance with Regulation concerning Internal Audit to assess legitimacy of the execution of duties by employees of the Company and officers and employees of its Subsidiaries and regularly report the results thereof to the Board of Directors and the Audit & Supervisory Board.

1. Systems as given below to ensure the appropriateness of execution of duties in the Group

1. System for reporting to the Company on the matters relating to execution of duties by officers and employees of the Company's Subsidiaries
2. Regulations concerning risk management of the Company's Subsidiaries and other systems
3. System to ensure efficient execution of duties by officers and employees of the Company's Subsidiaries

The Company shall ensure thorough management of the Subsidiaries on their execution of duties concerning risk management, effectiveness of their execution of duties, and other important matters through the departments of the Company in charge by specifying matters to be reported to and matters to be approved by the Company on the basis of the Company's regulations concerning management of the Subsidiaries, etc., and by facilitating close communications between the said departments of the Company in charge and the Subsidiaries.

The department of the Company in charge of internal audit shall conduct audit in accordance with the Company's regulations concerning internal audit to assess the properness of execution of duties in the entire Subsidiaries and regularly report the results thereof to the Board of Directors and the Audit & Supervisory Board of the Company.

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1. Systems concerning assigning assistants to Audit & Supervisory Board Members of the Company, independence of such assistants, and effectiveness of instructions given to such assistants

When Audit & Supervisory Board Members of the Company ask for assigning assistants to assist in executing their duties, a relevant division shall be established to which such assistants belong. Job description and authority of such assistants shall be determined taking consideration of Audit & Supervisory Board Members of the Company's opinions.

The assistants shall not receive any instruction from others than Audit & Supervisory Board Members of the Company concerning this assistance. Prior consensus from the Audit & Supervisory Board of the Company is required for staff change and performance evaluation of the assistants.

1. Systems as given below concerning reporting to Audit & Supervisory Board Members of the Company

1. System for Directors and employees of the Company to report to Audit & Supervisory Board Members of the Company
2. System for Directors, Audit & Supervisory Board Members and employees of the Subsidiaries or the persons who received reports from them to report to Audit & Supervisory Board Members of the Company

Directors and employees of the Company and Directors, Audit & Supervisory Board Members and employees of the Subsidiaries shall make necessary reports to Audit & Supervisory Board Members of the Company regularly or at any time upon request of Audit & Supervisory Board Members of the Company. The persons who received reports from them shall report to Audit & Supervisory Board Members of the Company without delay.

Among the matters to be reported are the following:

Important matters of business management and operations, and status and results of execution of duties, including matters related to compliance, risk management and internal control systems,

Uncovered facts which may cause serious losses to the Company or the Subsidiaries,

Newly disclosed information of the Company,

Information submitted to "Helpline", and Other important matters related to compliance.

1. System to ensure that any person who made a report to Audit & Supervisory Board Members of the Company shall not be given any unfavorable treatment based on such reporting

Directors of the Company shall clearly indicate in relevant regulations of the Company that any employees of the Company or Directors, Audit & Supervisory Board Members and employees of the Subsidiaries who made a report to Audit & Supervisory Board Members of the Company in accordance with 7) above shall not be given any unfavorable treatment based on such reporting.

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1. Matters concerning processing of payment (including payment in advance) for expenses or payables incurred in connection with execution of duties by Audit & Supervisory Board Members of the Company

Directors of the Company shall cooperate so that proper processing of payment for the expenses or payables incurred in connection with execution of duties by Audit & Supervisory Board Members of the Company will be carried out without any hindrance to execution of duties of Audit & Supervisory Board Members of the Company.

1. Other Systems to ensure effective audit by Audit & Supervisory Board Members of the Company

Directors of the Company shall hold regular meetings with Audit & Supervisory Board Members of the Company in order to secure good communications with each other.

Directors of the Company shall assist Audit & Supervisory Board Members of the Company so that Audit & Supervisory Board Members of the Company can have good communications with, gather information from, and exchange information with employees of the Company, and Directors, Audit & Supervisory Board Members and employees of the Subsidiaries, thereby facilitating Audit & Supervisory Board Members of the Company's proper execution of duties.

Directors of the Company shall provide assistance to Audit & Supervisory Board Members of the Company on the survey of important business counterparts as Audit & Supervisory Board Members of the Company deem necessary.

Directors of the Company shall provide assistance to Audit & Supervisory Board Members of the Company so that Audit & Supervisory Board Members of the Company can get necessary advice from auditing and legal firms or other outside specialists when necessary.

(Revised on March 10, 2015)

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1. Implementaion status of systems for ensuring appropriate business operationsOutline of the implementation status of the systems are as follows:
2. 1. System to ensure compliance
      To raise awareness for the compliance across the Company group, the Corporate Ethics Committee was established based on our "Corporate Code of Ethics". The Committee discusses important matters for improving corporate ethics and ensuring that all employees are made thoroughly aware of the importance of compliance. The Director in charge of the General Administration Department chairs the Committee and the head of each department of the Company's head office or the person in charge of corporate ethics at each of our subsidiaries is a member of the Committee.
      During the period, the Committee met three times and conducted various activities based on key objectives of the period set by the Committee, including two workshops on Corporate Ethics for all officers and employees of the Group, and Compliance Training through e-learning to all officers and employees of the Group. In March, an annual general meeting of the Committee was held, where compliance activities conducted during the period at the Company and each subsidiary company and their action plans for the next period were confirmed.
      Also, the Committee increased an effort to communicate and explain the system and functions of Helpline, which is set up at the head office of the Company and at the corporate lawyer's office, to all employees in order to ensure that they have a better and proper understanding.
   2. System to manage risks

Based on the "Regulations concerning Risk Management," each department of the Group companies identifies intrinsic risks in the businesses of each department exhaustively, evaluates the said risks based on the type of loss and scale in the event the said risks do occur as well as likelihood of occurrence, and has established management policy and countermeasures to address them.

The department of the Company in charge of internal audit conducted audit in line with an audit plan to evaluate the risk management systems at four departments of the Company's head office during the period, and reported the results thereof to the Board of Directors and the Audit & Supervisory Board of the Company. It also conducted questionnaire surveys twice for assessing risks at all departments of the head office during the period, and reported the results thereof to the Board of Directors and the Audit & Supervisory Board of the Company.

The Company has conducted emergency exercises of the Business Continuity Plan (BCP) to ensure stable supply of petroleum products even during times of disaster such as massive earthquakes. Through those exercises, we reviewed the BCP for further improvement in the BCP itself as well as improvements in our emergency responses. In response to COVID-19, we have formed a COVID-19 task force headed by the President by applying the "Emergency Response Procedures (Business Continuity Plan ) for New-Type Influenza" mutatis mutandis and have been taking various measures to prevent infection or spread of infection under the leadership of the task force.

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1. System to ensure proper and efficient execution of duties by Directors of the Company
   The Board of Directors of the Company made deliberations and decisions on important management policies by incorporating managerial advice and perspectives provided by four Outside Directors and three Outside Audit & Supervisory Board Members, who have advanced expertise and broad perspectives. The Board supervised Directors' execution of duties, too.
   The Executive Committee consisting of full-time Directors and full-time Audit & Supervisory Board Member of the Company met on a regular basis and as necessary, shared information concerning business operations, and made deliberations and decisions on matters to be discussed or reported at the Board meetings and on specific policies for each operating division of the Company.
2. System to ensure the appropriateness of execution of duties in the Group
   The department of the Company in charge of management of related companies formulated management criteria for each related company, which specify matters to be reported to and matters to be approved by the Company on the basis of the Company's "Regulations concerning Management of Related Companies", and conducted interviews with related companies as necessary, thereby managing those companies based on close communications with them.
   The department of the Company in charge of internal audit conducted audit on one related company based on an audit plan and reported the results thereof to the Board of Directors and the Audit & Supervisory Board of the Company.

5. System to ensure effective audit by Audit & Supervisory Board Members of the Company

Audit & Supervisory Board Members of the Company worked to secure good communications with Directors through attending the meetings of the Board of Directors and the Executive Committee as well as to share a wide range of information by conducting interviews with each operating division of the Company. They also exchanged information regularly with Independent Accounting Auditor, the department of the Company in charge of internal audit, and Auditors of the Subsidiaries.

The Company has established Audit & Supervisory Board Office with a dedicated assistant who assists the Members in executing their duties. The said assistant performed the jobs of preparing materials for Audit & Supervisory Board meetings and minutes thereof.

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Consolidated Statement of Changes in Net Assets

(For the period from April 1, 2019 to March 31, 2020)

(Unit : Millions of Yen)				Fuji Oil Company, Ltd.
		Shareholders' equity
			Retained		Total
	Capital stock	Capital surplus	Treasury stock	shareholders'
	earnings
				equity
Balance as of April 1, 2019	24,467	30,396	19,944	-1,431	73,376
Changes of items during the period
Dividends from surplus			-772		-772
Loss attributable to			-29,058		-29,058
owners of parent
Purchase of tresury stock				-0	-0
Net changes of items other					-
than shareholders' equity
Total changes during the period	-	-	-29,830	-0	-29,830
Balance as of March 31, 2020	24,467	30,396	-9,886	-1,431	43,546
		Accumulated other comprehensive income
	Valuation		Foreign		Total
		Remeasurements	accumulated
	difference on	Revaluation	currency
	of defined benefit	other
	available-for-sale	reserve for land	translation
	plans	comprehensive
	securities		adjustment
			income
Balance as of April 1, 2019	-82	1	-1,888	-74	-2,044
Changes of items during the period
Dividends from surplus
Loss attributable to
owners of parent
Purchase of treasury stock
Net changes of items other	91		-214	-225	-348
than shareholders' equity
Total changes during the period	91	-	-214	-225	-348
Balance as of March 31, 2020	8	1	-2,103	-299	-2,393
	Non-	Total net
	controlling
	assets
	interests
Balance as of April 1, 2019	204	71,536
Changes of items during the period
Dividends from surplus		-772
Loss attributable to		-29,058
owners of parent
Purchase of treasury stock		-0
Net changes of items other	-60	-409
than shareholders' equity
Total changes during the period	-60	-30,239
Balance as of March 31, 2020	144	41,297

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Notes to Consolidated Financial Statements

Basis of Presenting Consolidated Financial Statements

1．Scope of Consolidation
Consolidated subsidiaries
Number	Seven subsidiaries
Name	Fuji Oil Sales Company, Ltd.
	Fuji Rinkai Co., Ltd.
	Tokyo Petroleum Industrial Company, Ltd.
	Arabian Oil Company, Ltd.
	Japan Oil Engineering Company, Ltd.
	Petro Progress Inc.
	PETRO PROGRESS PTE LTD
2. Equity Method
(1) Consolidated affiliates accounted for under the equity method
Number	Two companies
Name	ARAMO SHIPPING (SINGAPORE) PTE LTD
	Tokai Engineering and Construction Company,
	Ltd.
(2) Non-consolidated affiliates not accounted for under the equity method
Number	Two companies
Name	Kyodo Terminal Company, Ltd.
	Keiyo Sea Berth Company, Ltd.
Reasons for exclusion	The corresponding amounts of profit (loss) and
	retained earnings have immaterial impact and do
	not have a material effect on the consolidated
	financial statements as a whole.

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3. Significant Accounting Policies

1. Valuation basis and method for significant assets① Inventories

Measured at the lower of cost or net selling value

a. Merchandise and finished goods, and raw materials

	Stated at cost determined by the gross average method
b. Supplies	Stated at cost determined by the moving-average method
②Securities
Available-for-sale securities*	Carried at fair value as of the consolidated
Marketable securities
balance sheet date, etc.
		(Any changes in valuation are included directly in
		net assets, and the cost of securities sold is
		calculated by the moving-average method)
Non-marketable securities	Carried	at	cost	determined	by	the
moving-average method
③Derivatives		Principally stated at fair value

1. • Securities other than equity securities issued by subsidiaries and affiliates are classified asavailable-for-sale securities.
2. Depreciation and amortization
3. • Property, plant and equipment

Manufacturing plant equipment	forCalculated by the declining-balance method
petrochemical products	Calculated principally by the straight-line
Others
method
Estimated useful lives of major property, plant and equipment
Buildings and structures	2 to 60 years
Storage tanks	10 to 15 years
Machinery and equipment	2 to 24 years
②Intangible assets	Amortized by the straight-line method

Software intended for internal use is amortized by the straight-line method over an estimated useful life of five years.

1. Significant allowances
   ① Allowance for doubtful accounts

The allowance for doubtful accounts is provided at an amount determined based on the historical experience of bad debts with respect to ordinary receivables, plus an estimate of uncollectible amounts determined by reference to specific doubtful receivables.

• Provision for repairs

The provision for repairs is provided at an amount equivalent to the estimated amount of periodical maintenance expenses for machinery and equipment.

• Provision for directors' retirement benefits
  The provision for directors' retirement benefits is estimated based on the amount calculated in accordance with internal rules under the assumption that all directors retired at the balance sheet date.

• Provision for special repairs
  The provision for special repairs is provided at an amount equivalent to the estimated amount of periodical inspection and maintenance expenses for storage tanks required by the Fire Defense Law.

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1. Employees' retirement benefits
2. • Periodic allocation method for projected retirement benefits
     Regarding determination of retirement benefit obligations, the benefit formula basis is adopted as the method of attributing expected benefit to the periods until this fiscal year end.

1. • Method for processing actuarial gains and losses and prior service costs
     Prior service costs are amortized by the straight-line method over a period (ten years) within the average remaining years of service of the eligible employees. Actuarial gains and losses are amortized from the year following the year in which the gain or loss is incurred by the straight-line method over a period (ten years) within the average remaining years of service of the eligible employees.
2. Other significant matters for preparing consolidated financial statements① Hedge accounting
3. • 
     If certain hedging criteria are met, the gain or loss on a derivative designated as a hedging instrument is deferred as part of accumulated other comprehensive income in the consolidated balance sheet until the hedged item is settled.
     Alternatively, foreign currency denominated receivables and payables hedged by forward exchange contracts are translated at the respective forward contract rates ("allocation method").
     Furthermore, in cases where interest rate swap contracts are used as hedges and meet certain hedging criteria, the net amount to be paid or received under the interest rate swap contracts are added to or deducted from the interest on the assets or liabilities for which the swap contracts were executed ("special treatment").
   • Consumption taxes
     Each item in the consolidated statement of income does not include consumption taxes.

• Income taxes
  A consolidated tax filing system is adopted.

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Buildings and structures Storage tanks Machinery and equipment Others

Software

Notes to Consolidated Balance Sheet
1. Pledged Assets and Secured Liabilities
	Factory foundation	as of March 31, 2020
		Millions of Yen
	Pledged assets	Carrying value
	Buildings and structures	11,739
	Storage tanks	3,468
	Machinery, equipment and vehicles	31,081
	Land	48,952
	Total	95,241
	Secured liabilities	Carrying value
	Long-term loans payable	30,801
	(current portion)	(6,090)
	Total	30,801

2. Accumulated Depreciation of Property, Plant and Equipment as of March 31, 2020 Millions of Yen

290,463

3. Reduced-value entry

Amount deducted from original acquisition cost due to receipts of government subsidies as of March 31, 2020

Millions of Yen 3,382 148 1,579 128 41

Amount deducted from original acquisition cost using gain on insurance claims

Machinery and equipment

128

4. Contingent Liabilities

The Company had the following guarantees of liabilities

	as of March 31, 2020
Employees (for home purchase):	Millions of Yen

Indebtedness to financial institutions Japan Biofuels Supply LLP:

Guarantee of obligations related to overdraft facility, obligations related to deferred payment of consumption taxes on imports, and obligations related to letter of credit agreements

11

1,395

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Notes to Consolidated Statement of Changes in Net Assets

1. Changes in the Number of Shares Issued and Treasury Stock

(1) Issued shares
Class of shares	Common stock
Number of shares as of April 1, 2019	78,183,677
Increase during the period	－
Decrease during the period	－
Number of shares as of March 31, 2020	78,183,677
(2) Treasury stock
Class of shares	Common stock
Number of shares as of April 1, 2019	1,121,188
Increase during the period	10
Decrease during the period	－
Number of shares as of March 31, 2020	1,121,198

2. Details of Cash Dividends Dividends paid

	Class	Total Amount	Dividend per	Record	Effective
Resolution	of	of Dividend
Share (Yen)	Date	Date
	Shares	(Millions of yen)
June 26, 2019	Common			March 31,	June 27,
annual meeting of	772	10
stock	2019	2019
shareholders

Notes to Financial Instruments

1. Qualitative Information on Financial Instruments

The Company and its subsidiaries limit their investment of temporary surpluses to short-term deposits and procure funds for capital investment and working capital through bank loans.

Trade notes and accounts receivable, which are claimable assets, are subject to customer credit risk. Also, certain receivables are denominated in foreign currencies, and therefore entail exchange rate fluctuation risk. The Company uses forward foreign exchange contracts to hedge this risk.

Short-term investment securities and investment securities are mainly equity securities and the Company reviews the market values on a quarterly basis for listed securities.

Most accounts payable, which are trade liabilities, are payable within a short term. Certain payables are denominated in foreign currencies and are therefore subject to exchange rate fluctuation risk. Forward foreign exchange contracts are used to hedge this risk.

Short-term loans payable includes mainly funds raised as working capital in relation to crude oil imports. Long-term loans payable mainly comprise funds raised for capital expenditure.

The Company employs interest rate swap transactions to hedge risks of changes in floating interest rates on long-term loans payable.

With regard to the execution and control of derivative transactions, authorizations and monetary limits on transactions and controls are determined in accordance with internal rules.

65.1% of claimable assets as of March 31, 2020 is for a specific major customer, who has a high credit rating.

2. Fair Values of Financial Instruments

Carrying values and fair values of the financial instruments on the consolidated balance sheet as of March 31, 2020 are set out in the following table. The following table does not include financial instruments whose fair values are not readily determinable. (see Note 2)

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			Millions of Yen
	Carrying value	Fair value	Difference
(a) Cash and deposits	12,769	12,769	-
(b) Notes and accounts receivable-trade	40,302	40,302	-
(c) Short-term investment securities
and Investment securities:
Available-for-sale securities	1,049	1,049	-
(d) Accounts receivable-other	1,212	1,212	-
Total assets	55,334	55,334	-
(a) Accounts payable-trade	13,686	13,686	-
(b) Short-term loans payable	83,953	83,953	-
(c) Accounts payable-other	18,149	18,149	-
(d) Excise taxes payable on gasoline and	18,939	18,939	-
other fuels
(e) Income taxes payable	90	90	-
(f) Long-term loans payable	43,086	43,184	-98
Total liabilities	177,907	178,005	-98

Note 1: Method of calculating the fair value of financial instruments and matters related to investment securities and derivative transactions

Assets:

1. Cash and deposits, (b) Notes and accountsreceivable-trade, and (d) Accounts receivable-other
   As these instruments are settled within a short term, their carrying value approximates fair value.

1. Short-terminvestment securities and Investment securities
   The fair values of equity securities are determined by their quoted prices on stock exchanges. Since the bonds are settled within a short term, the Company deems the carrying amounts to approximate fair value.

Liabilities:

1. Accountspayable-trade, (b) Short-term loans payable, (c) Accounts payable-other, (d) Excise taxes payable on gasoline and other fuels, and (e) Income taxes payable
   As these instruments are settled within a short term, their carrying value approximates fair value.

1. Long-termloans payable
   For floating-rate loans, the Company assumes that interest rates reflect market rates over the short term and credit conditions will not change significantly after loans have gone into effect, so that the carrying value approximates fair value. For fixed-rate loans, the total amount of principal and interest is discounted to present value using the assumed rate of interest on new loans of the same type to calculate fair value.

Derivatives:

The fair value of interest swap contracts to which the special treatment is applied is included in the fair value of the hedged long-term loans payable because such interest swaps are accounted for as an integral part of the corresponding long-term loans payable (see "Liabilities (f) " above).

The fair value of forward exchange contracts to which the allocation method is applied is included in the fair value of the hedged accounts payable and short-term loans payable because such forward exchange contracts are accounted for as an integral part of the corresponding accounts payable and short-term loans payable (see "Liabilities (a) and (b) " above).

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Note 2: Financial instruments whose fair value is not readily determinable

	as of March 31, 2020
	Millions of Yen
Category	Carrying value
Unlisted equity securities	242
Stocks of affiliated companies	15,198

Unlisted equity securities and stocks of affiliated companies are not included in "Assets (c) Available-for-sale securities" since their fair value is not readily determinable as they have no market prices and their future cash flows cannot be reasonably estimated.

Per Share Date
Net assets per share	534.02 Yen
Net loss per share	377.07 Yen

Subsequent Events

The Company's Board of Directors resolved at a meeting held on May 7, 2020 to propose at the 18th General Meeting of Shareholders of the Company to be held on June 25, 2020 to reduce its legal capital surplus and make an appropriation of surplus.

1. Purpose of Reduction of Legal Capital Surplus and Appropriation of Surplus

The Company recorded a JPY4,901,042,404 loss of retained earnings brought forward for the year ending March 2020. This is to propose that the Company make accounting transfers within the Net asset section pursuant to the provisions of the Companies Act in order to eliminate the said loss and to ensure flexibility in our future capital policy.

1. Details of Reduction in Amount of Legal Capital Surplus
   The Company will reduce the amount of legal capital surplus and transfer the amount of reduction to other capital surplus pursuant to the provision of Article 448, paragraph 1 of the Companies Act.

(1)	Item and amount of surplus to be reduced
	Legal Capital Surplus:	JPY4,901,042,404 out of JPY 7,381,533,925
(2)	Item and amount of surplus to be increased
	Other Capital Surplus:	JPY4,901,042,404

3. Details of Appropriation of Surplus

The Company will transfer other capital surplus to retained earnings brought forward pursuant to the provision of Article 452 of the Companies Act to eliminate the abovementioned loss of the retained earnings brought forward.

(1)	Item and amount of surplus to be reduced
	Other Capital Surplus:	JPY4,901,042,404
(2)	Item and amount of surplus to be increased
	Retained Earnings Brought Forward:	JPY4,901,042,404
(3)	Amounts of surplus left after appropriation
	Other Capital Surplus:	JPY0
	Retained Earnings Brought Forward:	JPY0

-16-

4. Schedule of Reduction of Legal Capital Surplus and Appropriation of Surplus (planned)

(1) Resolution of the Annual General Meeting of Shareholders: June 25, 2020

(2) Effective date:June 25, 2020

Additionally, as this case comes under the requirements of Article 449, paragraph 1, proviso of the Companies Act, no procedures for objections of creditors will occur.

5. Other important information

Since these transactions are accounting transfers within the Net assets section, they will not cause any change in net assets or profit and loss of the Company and have no impact on the business results of the Company. Also, the above content is subject to the approval at the General Meeting of Shareholders to be held on June 25, 2020.

Other Note

Amounts of less than one million yen have been omitted.

-17-

Statement of Changes in Net Assets

(For the period from April 1, 2019 to March 31, 2020)

(Unit : Millions of Yen)						Fuji Oil Company, Ltd.
			Shareholders' equity
		Capital surplus	Retained earnings
				Other
				retained	Total	Treasury	Total share-
	Capital stock	Legal capital	Total capital	earnings	holders'
		retained	stock
					equity
		surplus	surplus	Retained
		earnings
				earnings
				brought
				forward
Net assets as of April 1, 2019	24,467	7,381	7,381	22,638	22,638	-1,797	52,690
Changes of items during the period
Dividends from surplus				-772	-772		-772
Net loss				-26,767	-26,767		-26,767
Purchase of treasury stock						-0	-0
Net changes of items other
than shareholders' equity
Total changes during the period	-	-	-	-27,539	-27,539	-0	-27,539
Balance as of March 31, 2020	24,467	7,381	7,381	-4,901	-4,901	-1,797	25,150
	Valuation and translation adjustments
	Valuation		Total	Total net
	difference on	Revaluation	valuation
	available-for-	reserve for	and	assets
	sale	land	translation
	securities		adjustments
Net assets as of April 1, 2019	-222	1,932	1,709	54,400
Changes of items during the period
Dividends from surplus				-772
Net loss				-26,767
Purchase of treasury stock				-0
Net changes of items other	222		222	222
than shareholders' equity
Total changes during the period	222	-	222	-27,317
Balance as of March 31, 2020	-	1,932	1,932	27,083

-18-

Notes to Non-consolidated Financial Statements

Significant Accounting Policies

1. Valuation basis and method for assets

1. Securities

①	Shares of subsidiaries and affiliates	Stated at cost determined by the moving average
	Available-for-sale securities*	method
②
Marketable securities	Carried at fair value as of the balance sheet date, etc.
		(Any changes in valuation are included directly in net
		assets and the cost of securities sold is calculated by the
		moving-average method)
Non-marketable securities	Carried at cost determined by the moving-average method
(2) Derivatives	Principally stated at fair value

1. Inventories
   Measured at the lower of cost or net selling value

①	Merchandise, finished goods and	Stated at cost determined by the gross average
	raw materials	method
②	Supplies	Stated at cost determined by the moving-average
		method

• Securities other than equity securities issued by subsidiaries and affiliates, trading securities, andheld-to-maturity securities are classified as available-for-sale securities.

2. Depreciation and amortization

1. Property, plant and equipment (excl. lease assets)

Manufacturing plant equipment	Calculated by the declining-balance method
for petrochemical products
Others	Calculated principally by the straight-line method
Estimated useful lives of major property, plant and equipment:
Buildings and structures	2 to 60 years
Storage tanks	10 to 15 years
Machinery and equipment	2 to 24 years
(2) Intangible assets (excl. lease assets)	Amortized by the straight-line method

Software intended for internal use is amortized by the straight-line method over an estimated useful life of five years.

(3) Lease assets

Lease assets are depreciated / amortized by the straight line method based on the assumption that the useful life equals the lease term and the residual value equals zero.

3. Allowances

1. Allowance for doubtful accounts

The allowance for doubtful accounts is provided at an amount determined based on the historical experience of bad debts with respect to ordinary receivables, plus an estimate of uncollectible amounts determined by reference to specific doubtful receivables.

-19-

1. Provision for retirement benefits

• Periodic allocation method for projected retirement benefits

Regarding determination of retirement benefit obligations, the benefit formula basis is adopted as the method of attributing expected benefit to the periods until this fiscal year end.

• Method for processing actuarial gains and losses and prior service costs
  Prior service costs are amortized by the straight-line method over a period (ten years) within the average remaining years of service of the eligible employees. Actuarial gains and losses are amortized from the year following the year in which the gain or loss is incurred by the straight-line method over a period (ten years) within the average remaining years of service of the eligible employees.

1. Provision for special repairs
   The provision for special repairs is provided at an amount equivalent to the estimated amount of periodical inspection and maintenance expenses for storage tanks required by the Fire Defense Law.
2. Provision for repairs
   The provision for repairs is provided at an amount equivalent to the estimated amount of periodical maintenance expenses for machinery and equipment.

4. Hedge accounting

Derivatives are principally stated at fair value. If certain hedging criteria are met, the gain or loss on a derivative designated as a hedging instrument is deferred as part of accumulated other comprehensive income in the balance sheet until the hedged item is settled.

Alternatively, foreign currency denominated receivables and payables hedged by forward exchange contracts are translated at the respective forward contract rates ("allocation method"). Furthermore, in cases where interest rate swap contracts are used as hedges and meet certain hedging criteria, the net amount to be paid or received under the interest rate swap contracts are added to or deducted from the interest on the assets or liabilities for which the swap contracts were executed ("special treatment").

5. Retirement benefits

The methods by which unrecognized actuarial gains and losses and unrecognized prior service costs are processed differ from those used for the consolidated financial statements.

6. Consumption taxes

Each item in the statement of income does not include consumption taxes.

7. Income taxes

A consolidated tax filing system is adopted.

-20-

Notes to Balance Sheet

	as of March 31, 2020
	Millions of Yen
1. Receivables from and payables to affiliated companies
Short-term receivables	1,611
Short-term payables	11,442
Long-term receivables	753
2. Accumulated depreciation of property, plant and equipment	288,026

3. Contingent liabilities

Warrantee	Amount of	Object of guarantee
guarantee
PETRO	22,698	Trade obligations
PROGRESS
(88,152)	（upper limit of guarantee ）
PTE LTD
		Guarantee of obligations related to overdraft
Japan Biofuels	1,395	facility, obligations related to deferred payment of
consumption taxes on imports, and obligations
Supply LLP	(3,431)	related to letter of credit agreements
		（upper limit of guarantee）
Fuji Oil Sales	168	Trade obligations
Company, Ltd.	(510)	（upper limit of guarantee）
Employees	11	Indebtedness to financial institutions for home
purchase
Total	24,273

4. Pledged assets and secured liabilities Factory foundation

		as of March 31, 2020
		Millions of Yen
Pledged assets		Carrying value
Buildings	3,192
Storage tanks	3,468
Structures	8,547
Machinery and equipment	31,081
Land	48,952
Total	95,241
Secured liabilities		Carrying value
Long-term loans payable		30,801
(current portion)		(6,090)
Total		30,801

-21-

BuildingsStorage tanks Structures

Machinery and equipment Vehicles

Tools, furniture and fixtures Software

5. Reduced-value entry

Amount deducted from original acquisition cost due to receipts of government subsidies as of March 31, 2020

Millions of Yen 122 148

3,259

1,578

0

128

41

Amount deducted from original acquisition cost using gain on insurance claims

Machinery and equipment

128

6. Revaluation reserve for land

Revaluation reserve for land is the amount received from old Fuji Oil Company, Ltd., who revaluated the business use land in accordance with the Act on Revaluation of Land, due to merger with the Company on October 1, 2013.

-22-

Notes to Statement of Income

Transactions with affiliated companies:	Millions of Yen
Sales	9,484
Purchase	315,895
Other operational transactions	1,704
Non-operational transactions	4,387

Notes to Statement of Changes in Net Assets

Change in the number of treasury stock
Class of shares	Common stock
Number of shares as ofApril 1, 2019	966,188
Increase during the period	10
Decrease during the period	-
Number of shares as of March 31, 2020	966,198

Tax Effect Accounting

Main components of the accrual of deferred tax assets are provision for repairs, currently not deductible, and a tax loss carryforward.

Main component of the accrual of deferred tax liabilities is land revaluation difference.

Related Party Transactions 1. Subsidiaries, etc.

as of March 31, 2020

Millions of Yen

Category	Name	Share of	Relationship	Transaction	Transaction	Account	Closing
		voting rights	with related		amount		balance
		held by the	party
		Company
Subsidiary	PETRO	100%	Purchase of	Purchase of	315,096	Accounts	10,006
	PROGRESS		crude oil	crude oil and		payable-trade
	PTE LTD		Concurrent	oil products*1
			positions of
			officers
Subsidiary	Arabian Oil	100%	-	Borrowing of	5,500	Short-term	800
	Company,			funds*2		loans payable
	Ltd.

*1Transaction prices are determined by negotiations in consideration of market prices.

*2Borrowing rates are reasonably determined based on the prevailing market interest rates. *3Amounts of transaction and balances above do not include consumption taxes.

-23-

2. Officers, major corporate shareholders, etc.

as of March 31, 2020

Millions of Yen

Attribute	Name of	Business or	Share of	Relationship	Details of	Transaction	Account	Closing
	related	occupation	voting	with related	transactions	amount		balance
	party		rights	party
			held by
			the
			Company
Officer	Tomonori	Director of	-	Concurrent	Sale of crude	60,445	Accounts	18,903
	Okada	the		Director of the	oil and oil		receivable
		Company		Company	products to		-trade
		Executive		Transactions	Idemitsu*1
		Vice		with Idemitsu
		President
		and
		Executive
		Officer of
		Idemitsu *2

*1Transaction prices are determined by negotiations in consideration of market prices.

*2Mr. Tomonori Okada was appointed as Executive Vice President and Executive Officer of Idemitsu Kosan Co., Ltd. on April 1, 2019 and retired from Director of the Company on June 26, 2019. The transaction amounts above are for the period up to the end of June 2019 and closing balance is at the end of the said month.

*3The amount of closing balance includes consumption tax, while the amount of transaction does not include consumption tax.

Per Share Data

Net assets per share	350.74	Yen
Basic net loss per share	346.65	Yen

Subsequent Events

The Company's Board of Directors resolved at a meeting held on May 7, 2020 to propose at the 18th General Meeting of Shareholders of the Company to be held on June 25, 2020 to reduce its legal capital surplus and make an appropriation of surplus.

1. Purpose of Reduction of Legal Capital Surplus and Appropriation of Surplus

The Company recorded a JPY4,901,042,404 loss of retained earnings brought forward for the year ending March 2020. This is to propose that the Company make accounting transfers within the Net asset section pursuant to the provisions of the Companies Act in order to eliminate the said loss and to ensure flexibility in our future capital policy.

2. Details of Reduction in Amount of Legal Capital Surplus

The Company will reduce the amount of legal capital surplus and transfer the amount of reduction to other capital surplus pursuant to the provision ofArticle 448, paragraph 1 of the Companies Act.

-24-

(1)	Item and amount of surplus to be reduced
	Legal Capital Surplus:	JPY4,901,042,404 out of JPY 7,381,533,925
(2)	Item and amount of surplus to be increased
	Other Capital Surplus:	JPY4,901,042,404

3. Details ofAppropriation of Surplus

The Company will transfer other capital surplus to retained earnings brought forward pursuant to the provision of Article 452 of the Companies Act to eliminate the abovementioned loss of the retained earnings brought forward.

(1)	Item and amount of surplus to be reduced
	Other Capital Surplus:	JPY4,901,042,404
(2)	Item and amount of surplus to be increased
	Retained Earnings Brought Forward:	JPY4,901,042,404
(3)	Amounts of surplus left after appropriation
	Other Capital Surplus:	JPY0
	Retained Earnings Brought Forward:	JPY0

4. Schedule of Reduction of Legal Capital Surplus and Appropriation of Surplus (planned)

(1) Resolution of the Annual General Meeting of Shareholders:June 25, 2020

(2) Effective date:June 25, 2020

Additionally, as this case comes under the requirements of Article 449, paragraph 1, proviso of the Companies Act, no procedures for objections of creditors will occur.

5. Other important information

Since these transactions are accounting transfers within the Net assets section, they will not cause any change in net assets or profit and loss of the Company and have no impact on the business results of the Company. Also, the above content is subject to the approval at the General Meeting of Shareholders to be held on June 25, 2020.

Other Note

Amounts of less than one million yen have been omitted.

-25-