Contents
SEKISUI KASEI’s Value Creation
2
3
5
7
9

11
13

Management Philosophy / Goal /Code of Conduct

foundation, we are pleased to announce that we

100th Year Vision

corporate logo.

CSR Declaration

We, Sekisui Kasei Group, practice “Zen-in Keiei”

On the milestone of our 60th anniversary of
have created our new corporate message andManagement
Philosophy

based on respect and mutual trust.
We are always innovating in our aim of “new happiness.”

Challenges and Growth Trajectory
Business Model
Consolidated Financial Highlights

Corporate Logo

Non-financial Highlights

Strategies for Value Creation
15

A Message from the President

23

Business Overview:

21

27
29

Mid-Term Management Plan
23

25

Industry

33

Research & Development Strategy

53

CSR That Supports Corporate ValueSEKISUI KASEI’s ESG
33

47

Environment
33

Special: Undertaking the
Challenges of a Leading
Environmental Company

Society
GovernanceDiscussion between
Three Outside Directors
Directors & Auditors

Other Information
55

MD&A

59

Consolidated Financial Statements

57
65
85
87
88

Business Risks[About Our Corporate Message]
We wanted to project a more youthful image by using abright green color based on our company’s corporate
color, green, and we have created a simple yet universal
logo which reflects our 60 years of tradition. Note that thecircle on the right shoulder of the logo represents our aimof a “beautiful future planet”. With this new message, wedeclare that we will continue to pursue unknown technologies that are useful to people’s lives and society while living
in harmony with the environment.
Ranging from the Human Life segment that supports
food and living environment to the Industry segment that
supports mobility and information technologies. We willcontinue to challenge ourselves to realize a sustainable
society where people and our planet continue to live
harmoniously by utilizing material technologies andprocessing technologies we have cultivated since ourfoundation.

Notes to Consolidated Financial
Statements
Our Group Network
Company Profile
Investor Information

Editorial Policy
To convey the sustainable growth potential of Sekisui
Kasei to all readers, including our stakeholders, fromthe perspective of ESG, we showcase corporate
information focusing on medium- to long-term value
creation.
Period Covered
The activities included in this report were primarily
carried out in the period from FY2019 (April 1, 2019 –March 31, 2020) and in part up until August 2020.

1

Plastics Solution Company Trusted
by Customers around the World

Human Resources Strategy

41
51

Goal

Human LifeFoundation of Value Creation
31

Corporate Message

Integrated Report 2020 / SEKISUI KASEI

1. Unite individual efforts to make a strong power.
2. Grow and develop together with customers
by creating top quality and service.
Code of

Conduct

3. Contribute to a better environment and an enriched society
in perfect harmony among people, nature, and technology.
4. Make an honest, generous and fresh workplace.
5. Address each and every challenge in creation andinnovation to achieve our goals.

Scope of Reporting
This report covers the 40 companies of the Sekisui Kasei Group,
including Sekisui Kasei Co., Ltd. However, the environmental
performance data do not include Proseat Europe GmbH, whichbecame a subsidiary in February 2019.
Guidelines Used as Reference• Ministry of the Environment: Environment Report Guidelines(Y2012 Edition)• Ministry of the Environment: Environmental Accounting Guidelines(Y2005 Edition)• Japanese Standards Association: Guidance on Social Responsibility
JISZ26000 (ISO 26000)
Some of the data in this report differs from data disclosed in the past
as a result of revisions implemented to reflect changes in calculation
methods and the business sites covered.

Cautionary Note on Forward-looking Statements
Results forecasts, plans, business strategies, awareness and assessments of facts, and other forward-looking statements concerning the Company or the Group areassumptions that the Company’s management believes to be reasonable based on currently available information. Actual outcomes may differ materially from thoseexpressed in these forward-looking statements due to various factors. The Company undertakes no obligation to publish revised forward-looking statements to reflect
new events, conditions, or circumstances.

Integrated Report 2020 / SEKISUI KASEI2SEKISUI KASEI’s Value Creation

100th Year Vision
To mark its 50th anniversary, in 2009, Sekisui Kasei Co., Ltd. formulated the Sekisui Kasei Group’s 100th Year Vision
to serve as a roadmap for further growth and development in the next half century.

Business Vision —Develop Globally as a “Plastics Solution Company” in Three Business Segments
The Sekisui Kasei Group is targeting net sales of over ¥250 billion and ¥200 billion in the Industry and Human Life segments,
respectively, and also will grow the Environment/Energy segment to the ¥50 billion scale in net sales in FY2059, the 100th anniversary of the Group’s founding.
FY2009Consolidated sales
50th Year
Anniversary¥100.7billion

FY2059Consolidated sales
100th Year
Anniversary¥500.0billion or more

Environment/
Energy¥200.0

Human Life

¥250.0Industry

billion or morebillion or more

¥71.5billion¥29.2billion

2059

2009

CSR Vision —Sekisui Kasei Group, Expanding Our Dreams for People and the Earth

Corporate Goal for Our 100th Year Anniversary (in FY2059)
The Sekisui Kasei Group aims to gain the trust of customers by globally expanding businesses based on plastics and providing solutions.

Situation Goal

Scale Goal

Plastics Solution Company

Consolidated Sales

We, Sekisui Kasei Group, carry out social responsibility to stakeholders including the global environment by practicing our management philosophy and contribute to the sustainable development of the global society.

Responsibility to Stakeholders¥500.0 billion or more

Trusted by Customers around the World¥50.0 billion
or moreCustomers

Corporate Domains

Group Members

Local
Communities

Shareholders

Business

GlobalPartners

Environment

Sekisui Kasei Group Solutions

Materials

Technologies

Systems

Culture Vision —Zen-in Keiei
Plastics based

Technology thatcreates added value

By systemizing, know-how
and providing information

All members, including managements and employees in general, of Sekisui Kasei Group always recognize the 4 keywords,“Innovation,” “Speed,” “Teamwork” and “Respect for Diversity” as starting point of achievement by making the most of strengthand improving the weakness.

Industry: Contributing to the growth and development of the industry by proposing business solutions toclient companies
Lifestyle Transformation: Contributing to the transformation of people’s lifestyles
Global Environment: Simultaneously aiming to improve the global environment

3

Integrated Report 2020 / SEKISUI KASEIIntegrated Report 2020 / SEKISUI KASEI

4SEKISUI KASEI’s Value Creation

CSR Declaration
Looking ahead to the “Sekisui Kasei Group 100th Year Vision,” the Sekisui Kasei Group is conducting business activities withthe aim of fulfilling its social responsibilities to all stakeholders, including the global environment. The CSR activities thatform the basis of the Group’s business activities are summarized in its “CSR Declaration.”

Zen-in Keiei
Under the concept of Zen-in Keiei, each member thinks by themselves, proposes, and makes voluntary actions, not be forced by
top-down instructions. Under the Sekisui Kasei Group culture, we value brainstorm with other members for improving personality
and strength of individuals.

For the growth of both company and its people
4 keywords for the practice of Zen-in Keiei

Innovation

Stakeholder
Customers

The Company not only supplies safe/reliable products but also bring comfort and convenienceto the lives of people by always creating new functions/value and proposing materials/services as
solutions for customers.

Group Members

The Company places emphasis on mutual respect and trust, and pursues the happiness ofpeople working for the company. Consequently, we will improve fairness to skill development
and rating, and make efforts to create a healthy/safe work environment, and a good balance
between work and family.

Local Communities

5

Responsibility of Sekisui Kasei GroupThe Company believes being a safe workplace is the most important to communities. In addition, as a member of local communities, we aim to be a company trusted and loved by the wholecommunity.

Shareholders

The Company meets expectations from shareholders with returns by improving its corporate value. Furthermore, we focus on the active disclosure of our management information and dialogue
with shareholders.

Business Partners

The Company builds trust in relationships with business partners through fair, honest businesspractices with sincerity as our motto. Also, we aim at co-existence and co-prosperity as a better
partner for the partners.

Global Environment

The Company actively endeavors to improve environment to protect our precious earth. In particular, we contribute to the low-carbon society and develop the recycling-based society with foam plastics in the community and lowering carbon levels centering on foam plastics which are eco materials.

Integrated Report 2020 / SEKISUI KASEI

Speed

Teamwork

Respect for
Diversity

Zen-in Keiei
Make the most of
personality andstrength ofindividuals(power of individuals)

Respect diversity
and join forces
as a team(power of teams)

Recognizes
Group’s direction
as a member
Share the aim of
the entire Groupand have thesame goals

Leads toachieving theGroup’s goals

People andcompany growtogetherSet up andachieve goals asa memberIntegrated Report 2020 / SEKISUI KASEI

6SEKISUI KASEI’s Value Creation

FY2019Consolidated
net sales

Challenges and Growth Trajectory¥136.2billionFrom 1959 to 1960, began the manufacture and sale of the first expandable polystyrene (EPS) using technology developed in Japan. Continues

FY2059Consolidated net sales¥500.0billion or moredevelopment along with Japan’s economic growth and later aims for further sustainable growth through full-scale global expansion.
(Billions of yen) 120

Note: Consolidated net sales fromFY1999 onward listed.

90

60

30

1959

1979

2019

1999

2059

Establishment Period

Growth to Maturity Period

Global Development Period

To a Next “Stage”

Sekisui Kasei’s First 20 years

Years 21 to 40

Years 41 to 59

From our 60th Year (2019)

Sekisui Sponge Industries Co., Ltd. (the current Sekisui Kasei
Co., Ltd.) was established in 1959. The following year, we began
manufacturing and selling the first EPS (expandable polystyrene) beads using technology developed in Japan. Our businessunderwent rapid growth, driven by ESLEN Beads and ESLEN
Sheets, and our shares were listed after five years in business.
We overcame the obstacles presented by the 1973 oil crisisand the movement to ban EPS foam, and in 1978 we listed ourshares on the First Section of the Tokyo Stock Exchange.

The Company continued to develop in line with Japan’s economic growth, but with the collapse of the bubble economy,
our earnings grew progressively weaker, with consolidated
operating losses recorded for four consecutive years from1995. Against this backdrop, we switched direction from a
policy of multifaceted expansion of our existing businesses to one that emphasizes “selection and concentration.”
Various measures including withdrawals from businesses andearly retirement programs were implemented.

As new businesses including PIOCELAN and TECHPOLYMER
began to contribute to earnings, we moved from rebuilding
businesses to a return to growth. To build on this growth, webegan full-scale global business development, and despite
a surge in the price of crude oil and a global recession, we
achieved our long-held goal of consolidated net sales of¥100 billion, with ¥5 billion of consolidated operating income
in FY2009.

Make
Innovations

1959	Sekisui Sponge Industries Co., Ltd. established1989	Okayama Plant (the current Sekisui Kasei Tenri Co., Ltd.
Okayama Mfg. Department) built in Okayama Prefecture

2004	Sekisui Plastics Yamaguchi Co., Ltd. (the current Sekisui Kasei
Seibu Co., Ltd.) established in Yamaguchi Prefecture1961	Kanto Plant (the current Sekisui Kasei Kanto Co., Ltd.)
built in Ibaraki Prefecture

1994	Ibaraki Shimodate Plant (the current Sekisui Kasei Kanto Co.,
Ltd., Shimodate Mfg. Group) built in Ibaraki Prefecture

2006	Sekisui Plastics U.S.A., Inc. (the current Sekisui Kasei U.S.A.
Inc.) established in the United States

1966	Tenri Plant (the current Sekisui Kasei Tenri Co., Ltd.)
built in Nara Prefecture	Acquired Giken Kasei Co., Ltd. (the current Sekisui Kasei
Kansai Co., Ltd.)

2007	Sekisui Plastics Europe B.V. (the current Sekisui Kasei Europe
B.V.) established in the Netherlands

1969	Company name changed to Sekisui Plastics Co., Ltd.

1995	With land expropriated by Nara City, Nara Plant closed

2008	Taiwan Sekisui Centex Co., Ltd. (the current Sekisui Kasei
Taiwan Co., Ltd.) established in Taiwan

In 2019, the Company’s 60th year of operations, we not
only advanced the “execution of strategies to strengthen
earnings structure” and “business portfolio transformation” goals commenced during our previous mid-term
management plan, but also launched as our new midterm management plan “Make Innovations Stage-II,”which features a basic policy aimed at solidifying ourposition as a leading environmental company.

Commenced EPS beads and PVC foam businesses	Shiga Plant (the current Sekisui Kasei Shiga Co., Ltd.)
built in Shiga Prefecture
1970	Kasahara Kasei Co., Ltd. (the current Sekisui Kasei Toubu
Co., Ltd.) established in Ibaraki Prefecture
1976	Hokkaido Eslen Co., Ltd. (the current Sekisui Kasei Hokkaido
Co., Ltd.) established in Hokkaido
1978	Oita Plant (the current Sekisui Kasei Oita Co., Ltd.)
built in Oita Prefecture	Assigned to the First Section of the Tokyo Stock Exchange
and the Osaka Securities Exchange

2009	Marking 50th anniversary, formulated the Sekisui Plastic
Group’s 100th Year Vision

Stage-II2010	Sekisui Plastics Kyushu Co., Ltd. (the current Sekisui Kasei
Seibu Co., Ltd.) established in Fukuoka Prefecture2012	Sekisui Plastics Chubu Co., Ltd. (the current Sekisui Kasei
Chubu Co., Ltd.) established in Aichi Prefecture	Sekisui Plastics (Thailand) Co., Ltd. (the current Sekisui Kasei[Thailand] Co., Ltd.) established in Thailand
2013	Sekisui Plastics Tohoku Co., Ltd. (now Sekisui Kasei Tohoku
Co., Ltd.) established in Miyagi Prefecture2014	Sekisui Plastics Toubu Co., Ltd. (the current Sekisui Kasei
Toubu Co., Ltd.) established2015	Sekisui Plastics Mexico S.A. de C.V. (the current Sekisui Kasei
Mexico S.A. de C.V.) established in Mexico
2016	Made Yamakyu (the current Sekisui Kasei Yamakyu Co., Ltd.) a
consolidated subsidiary2019	Made Proseat GmbH & Co. KG, a European manufacturer of
automotive components, a consolidated subsidiary

7

Integrated Report 2020 / SEKISUI KASEIIntegrated Report 2020 / SEKISUI KASEI

8SEKISUI KASEI’s Value Creation

Business Model
The Sekisui Kasei Group aims to solve social issues and realize a safe, comfortable, and convenient society through businessactivities that contribute to the environment.

Management Philosophy
Founding Spirit
Corporate Domains

The Sekisui Kasei Group’s Business Activities

To be a sustainable, value-creating company

INDUSTRY
Segment

Contributions
to Industry

Contributing to the growth and developmentof industry by proposing business solutions

Materials
Plastics based

Social Issues

Technologies
Technologies thatcreate added value

Mid-Term Plan

Make
Innovations
Stage-II

1

2

Evolution ofbusiness portfolio

Systems
By systemizing,know-how andproviding information

Improvement of organizational capabilities

Contributions

Improvement of capabilities of human resources

Transformation

Improvement of productivity

Accelerate growth with three businessdomains and two key products
Automobile structural material field
PIOCELANHigh functional food container field
TECHPOLYMER
Medical/Health Care field

Strengthening groupmanagement foundation

3

Evolution of existing products
Development of new materials
Business activities that do not placea burden on society

Contributions

HUMAN
LIFE

E

Environment

Integrated Report 2020 / SEKISUI KASEISSocialpeople’s lifestyles

Contribution to sustainable society

ENVIRONMENT& ENERGY

Segment

9

to LifestyleContribution to the transformation of

to the Global

Aiming to improve the global environment

Environment

Segment

G

GovernanceIntegrated Report 2020 / SEKISUI KASEI10SEKISUI KASEI’s Value Creation

Consolidated Financial Highlights
2009

Fiscal Year

2010

2011

2012

2013

2014*2

2015

2016

2017

2018

For the year:
Net sales

2019

2019

Millions of yen

Thousands of
U.S. dollars*1¥ 100,744¥ 101,418¥ 101,350¥ 101,784¥ 109,923¥ 113,660¥ 101,559¥ 102,398¥ 112,101¥ 112,593¥ 136,155$ 1,266,205

Operating income

5,118

4,876

2,271

1,152

2,124

3,930

5,118

5,401

5,284

4,784

3,725

34,641

Recurring income

4,475

4,628

2,107

1,237

2,206

4,180

4,862

5,049

5,154

4,776

3,391

31,535

Net income attributable toowners of the parent

2,393

2,306

744

926

1,264

2,530

3,147

3,404

3,448

3,129

2,323

21,603

Capital expenditures

3,735

4,561

5,059

6,849

3,434

5,908

4,424

5,836

7,762

7,368

5,261

48,926

Depreciation and amortization

3,886

3,814

3,848

3,940

3,856

3,999

3,937

3,591

4,087

4,517

6,071

56,459Research and development costs

2,044

2,237

2,261

1,993

1,936

1,877

1,856

1,916

2,104

2,145

2,769

25,751¥ 97,008¥ 99,263¥ 101,889¥ 105,562¥ 110,687¥ 116,201¥ 114,892¥ 119,670¥ 131,774¥ 152,845¥ 149,103$ 1,386,618

Total net assets

46,848

48,165

48,91150,92954,03658,27558,80061,363

66,145

66,771

67,217625,100

Interest-bearing debt

17,126

17,175

17,06818,492

18,566

19,467

18,274

18,42419,09635,22939,583368,111At year-end:
Total assets

Net Sales

Amounts per share*3:
Net income

¥

49.08

¥

15.84

¥

19.72

¥

26.96

(Billions of yen)

50.58

¥

¥

54.14

¥

Net assets

977.281,005.62

1,021.26

1,063.68

1,136.52

1,231.36

67.34¥136.2
1,243.30
billionCash dividends

20.00

20.00

12.00

8.00

14.00

18.00

24.00

¥

Operating Income/Operating Income Ratio

73.03

¥

(Billions of yen/%)

75.33

¥

Yenattributable to U.S.
dollars*1
Net income
ownersof the parent/ROE

69.09 (Billions ¥51.29
of yen/%)1,322.14

1,444.28

1,439.43

1,450.32

24.00

27.00

30.00

30.00

$

13.49
0.28
¥2.3

¥3.7
Operating income ratio (%)

5.1

4.8

2.2

1.1

1.9

3.5

5.0

5.3

4.7

4.2

2.7

ROE (%)

5.3

5.0

1.6

1.9

2.5

4.6

5.4

5.7

5.5

4.8

3.6

ROA (%)

4.7

4.7

2.1

1.2

2.0

3.7

4.2

4.3

4.1

3.4

2.2

Equity ratio (%)

47.4

47.6

47.1

47.4

48.0

49.5

50.6

50.7

49.6

42.7

44.1

*1 U.S. dollar amounts represent translations of Japanese yen, for readers’ convenience only, at the rate of ¥107.53 = U.S.$1.00, the prevailing exchange rate at
March 31, 2020.
*2 In order to synchronize accounting periods of overseas Group companies with the accounting period in Japan beginning in FY2014, the FY2014 results foroverseas Group companies are based on a 15-month accounting period.
*3 Sekisui Kasei Co., Ltd. consolidated its common share at the ratio of two shares to one, effective on October 1, 2016.

Net Sales(Billions of yen)¥136.2

Operating Income/Operating Income Ratio

Net income attributable to ownersof the parent/ROE(Billions of yen/%)(Billions of yen/%)

15

16

17

18

19

(FY)

Total Assets/ROA(Billions of yen/%)

15

16

17

2.7%

18

19

¥149.1

15

16

17

18

19

Total Assets/ROA

Integrated Report 2020 / SEKISUI KASEI(Billions of yen/%)¥149.1billion

(FY)

15

16

17

18

19

(FY)

16

17

18

19

Research and Development Costs(Billions of yen)

¥6.1
billionbillion

(FY)

2.2%

15

16

17

18

19

(FY)

15

16

17

18

Total Assets

Capital Expenditures

Operating Income Ratio

ROE

ROA

Depreciation and Amortization(Billions of yen)

(FY)billion

Net income attributable to owners of the parent

Research and Development Costs(Billions of yen)

19

¥2.8

Operating Income

Capital Expenditure &Depreciation and Amortization

18(Billions of yen)

¥5.3

3.6%

15

17

ROE

billion

2.7%

16

Operating Income Ratio¥2.3

billion15

Net income attributable to owners of the parent

Capital Expenditure &Depreciation and Amortization

billion

¥3.7

(FY)

3.6%

Operating Income

billion11

billionbillionKey ratios:

0.48

19

(FY)

15

16

17

18

19

(FY)

Integrated Report 2020 / SEKISUI KASEI

12SEKISUI KASEI’s Value Creation

Non-financial Highlights
2015

Fiscal Year

2016

2017

2018

2019

Number of employees

Ratio of female employees

Number of production sites:
Japan

35

36

37

39

39

Overseas

8

10

10

22

22

Number of occupational accidents(%)(Cases)

3,855
6

19.9

Inputs (Japan):
Energy consumption (million MJ)

171,086

180,126

188,244

188,275

192,650

Unit consumption/output (MJ/t)

8,308

8,308

8,453

8,389

8,782

3

Water consumption (thousand m )

2,865

3,256

3,459

3,389

3,437

Unit consumption/output (m3/t)

13.9

15.0

15.5

15.1

15.5

98,081

99,885

103,320

102,405

95,903

Outputs (Japan):CO2 emissions (Production) (t)Unit consumption/output (kg-CO2/t)
CO2 emissions (Transportation) (t)Unit consumption/output (kg-CO2/t)
CO2 emissions (Office) (t)

462

461

464

457

432

6,506

7,177

7,854

8,304

8,180

32.4

38.0

39.2

39.5

39.5

131

121

110

125

100

34.3

31.7

28.8

32.7

26.2

3

Effluent (Production) (thousand m )

2,799

3,044

3,263

3,241

3,268

Unit consumption/output (m3/t)

Unit consumption/output (kg-CO2/m )
2

13.6

14.0

14.7

14.4

14.7

COD discharge (t)

11.7

14.1

16.6

17.0

15.8

Industrial waste (t)

7,278

8,138

8,961

8,780

10,436

98.8

98.5

98.5

97.2

95.4

Energy consumption (million MJ)

16,67022,93629,15629,55031,959Unit consumption/output (MJ/t)

13,571

14,041

16,165

14,526

1,457

Water consumption (thousand m3)

70

118

138

156

164

Unit consumption/output (m3/t)

5.7

7.2

7.7

7.7

8.7

10,093

12,39815,406

17,79917,979Recycling rate (%)

15

16

17

18

19

15

(FY)

Number of equipment-related accidents(Cases)

16

17

18

19

15

(FY)

CO2 emissions (Production)

16

17

18

19

(FY)

COD discharge

(t)

(t)

95,90316

14

2

Inputs (Overseas):

Outputs (Overseas):
CO2 emissions (Production) (t)

15

819

759

854

875

954

Effluent (Production) (thousand m3)

62

106

109

75

134

Unit consumption/output (m3/t)

5.1

6.5

6.0

3.7

7.1

7.6

10.4

11.0

7.5

13.6

Unit consumption/output (kg-CO2/t)

COD discharge (t)

425

410

476

706

763

82.6

78.3

73.9

81.0

63.9

Number of employees

1,895

2,011

2,101

3,881

3,855

Number of employees in Japan

Industrial waste (t)Recycling rate (%)

17,979

16

17

18

19

(FY)

15

16
Japan

Energy consumption

17

18

19

(FY)

16
Japan

Water consumption(million MJ/t)

15

Overseas

17

18

19

Industrial waste recycling rate

(thousand m3)(%)

192,650

95

3,437

Other indicators:
1,545

1,633

1,680

1,723

1,695

Number of employees outside Japan

350

378

421

2,158

2,160

Ratio of female employees (%)(excluding subsidiaries in Europe andthe Americas that are not publicly listed)

16.9

18.1

18.9

20.7

19.9

Number of occupational accidents(Cases)

1

1

3

0

6

Number of equipment-related accidents(Cases)

0

0

1

0

2

(FY)

Overseas64

31,959
164
15

16
Japan

17
Overseas

18

19

(FY)

15

16
Japan

17
Overseas

18

19

(FY)

15

16
Japan

17

18

19

(FY)

Overseas

Note 1: The Sekisui Kasei Group ascertains and manages the environmental impact that arises in various aspects of its business activities in terms of “unit consumption/output,” which expresses environmental loadings per production volume.
Note 2: Excluding Proseat Europe GmbH

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14

Strategies for Value Creation

A Message from the President

Q1

Aiming to become a leading
environmental company,
we will contribute toa sustainable society on

All companies’ initiatives are being
advanced toward the Sustainable
Development Goals (SDGs) set by theUnited Nations. Please explain thecontent of what Sekisui Kasei is working
on from the perspective of contributing
to a sustainable society.

A1

a global basis centeredaround SKG-5R.

President and Chief Executive Officer

Masato Kashiwabara

highDegree of Environmental Contributionlow

At the present time, we are promoting SKG-5R
activities from the perspective of contributing to asustainable society. In addition to the 3R (Reduce, Reuse,
and Recycle) initiatives into which we have traditionally put
all our efforts, SKG-5R includes our original 2Rs.
This 2R means “Replace” which replaces conventional
products with biodegradable/biomass-derived products(“ELASTIL BIO“, “LIGHTLON BIO”, etc.) and “Re-create”
which creates new value products that contribute to theenvironment. By adding 2R, we aim to contribute in a waythat is unique to the Sekisui Kasei Group.
In the first place, our core foam products business isresource- and energy-saving and also maintains a highrecycling rate. We also take pride in that we have beendeveloping monozukuri (manufacturing craftsmanship) thatcoexists with the environment from the Company’s founding. However, as the way society views plastics has become
more entrenched, I felt the necessity to promote information disclosure as a united industry, including the supply
chain, to enable society to gain a more correct understanding, and thus I launched thisSustainable
initiative.
Star Products
In the years to come, we will
examine,certify,
andregister
Products
and systems
that makegreaterthe environment among
our products based on the contributions
degree oftoenvironmental
contriour sustainable products
bution, set a target of 100 registrations and a sales ratio of
20% by FY2030 and therebySustainable
raise awarenessof our contriProducts
bution to the environment. Products and systems that are useful indaily life and friendly to the environment,such as foam plastics
highDegree of Environmental Contribution
low

Sustainable Star Products
Products and systems that make greater
contributions to the environment among
our sustainable products

Sustainable Products
Products and systems that are useful indaily life and friendly to the environment,such as foam plastics

Q2

What are your thoughts on the
background to and the purpose offormulating the “SKG-5R STATEMENT”
and the plan for achieving its goals?

A2

We believe that our business areas and technologies can contribute to solving environmental andsocial issues such as the SDGs. We also recognize thatsocial contribution through business is an important management issue for a company to grow over the medium tolong term.
For this reason, we deemed “promote business portfoliotransformation and the execution of strategies to strengthen the earnings structure while solidifying our position as
becoming leading environmental company” as the basic
policy of our current mid-term management plan and clarified our corporate stance.
Summarizing the background, thoughts, realization
measures, and goals of this policy of “solidifying our position as a leading environmental company,” the SKG-5R
STATEMENT was formulated to show our commitment toall stakeholders.
Having set the following two goals to be attained in
2030, they are being factored into quantitative plan figures
for each department and a system is being put in place tomanage progress in the same way as performance goals.

SKG-5R
3Rs for the creation ofa recycling-based society+

2Rs based on
the Sekisui Kasei Group’s
unique technologies

ReduceReuse
RecycleReplace
Re-create

SKG-5R

Reduce3Rs for the creation of
Reuse
a recycling-basedsociety
Ⅰ Create
Sustainable Star Products

Recycleand expand their market+ of registrations 100
Total number
Targets for
2Rs based onShare of total sales 20%
FY2030Replacethe Sekisui Kasei Group’s
Ⅱ CO2 emissions
unique technologies

Re-create–27% (compared with FY2018)

Ⅰ Create
Sustainable Star
Products
Become leading
environmental
company
Targets for
FY203015

Integrated Report 2020 / SEKISUI KASEI

and expand their market
Total number of registrations 100
Share of total sales 20%

Report 2020 / SEKISUI KASEI 16
emissions
Ⅱ CO2Integrated–27% (compared with FY2018)

Strategies for Value Creation

A Message from the President

Q3

The problem of ocean plastic waste is
being highlighted worldwide.
Please tell us about Sekisui Kasei’s
stance and efforts.

A3

About 50 years ago, in 1971, we led the industry instarting to recycle expandable polystyrene (EPS)
foam. Since then, this initiative has spread throughout theindustry, and in recent years the recycling rate of EPS foam
in Japan has continued to achieve at around 90%.
We have established a system for recycling food tray
containers collected at supermarkets in collaboration withcontainer manufacturers, and we recycle the collected trays
as a foam material for trays. With regard to the packaging
materials for parts used in the knock-down production of
automobiles, should the scrap processing of our products
at the site where they were received present problems,
we are making full use of our global recycling network andproviding services to build appropriate recycling routes inevery country. In this way, we recognize that recycling in our
main products is progressing at a fairly high level.
Meanwhile, as an initiative conducted in collaboration withother companies in the same industry, Japanese Expanded
Polystyrene Association (JEPSA) industry group engages
in EPS recycling and in public relations activities. Overseas,
there are organizations, such as the Asian Manufacturersof Expanded Polystyrene (AMEPS) in Asia and, on a global
scale, the International EPS Alliance (INEPSA), working toprotect the environment while cooperating with Japan.
Participating not only in the EPS industry but also in thechemical industry and organizations that joint efforts of the
public and private sectors, we are focusing on addressing
the problem of waste plastics.

Examples of Participation in
Other Organizations• Japan Initiative for Marine Environment (JaIME)
Established by five organizations in chemical-relatedindustries: Japan Chemical Industry Association; theJapan Plastics Industry Federation; the Plastic Waste
Management Institute; Japan Petrochemical Industry
Association; and Japan PVC Pipe and Fittings
Association. Participated in declaration activities tosolve the ocean plastic waste problem (about 60
companies/organizations)• Clean Ocean Materials Alliance (CLOMA)
Transcending the boundaries of the plastics industry, CLOMA undertakes wide-ranging collaboration,
including with material providers, their processors
and users, and is the mother entity for bringing
about innovation. (Approximately 350 companies/
organizations)
Government agencies, such as the Ministry of
Economy, Trade and Industry, are also positioned
as observers, and the public and private sectors
work together on promotion.

Q4

A4

Since the start of 2020, the spreadof COVID-19 has been affecting thestructure of society and industry.
How do you view demand for yourproducts and the pandemic’s impact on
the supply chain?

The COVID-19 pandemic has had an enormous
impact on global economic activity, and a wide
range of uncertainties remain, such as the timing of a
return to normal and the state of economic activity afterthat time. The situation is changing hour by hour, so I
would like to constantly gather information so that I cancarefully make assessments.
Although it is extremely difficult to determine, since wecannot develop our business without setting prospects
and assumptions for the future, as of the end of July we areforecasting the following. The outlook for FY2020 is that, inthe Human Life segment, food container-related items demand for ready-made meal will continue to be strong. But

17

Integrated Report 2020 / SEKISUI KASEI

inbound demand for holidaymakers and tourism will continue to be sluggish and recovery will be delayed. Agriculture
and fisheries, building materials, and civil engineering-related products will gradually recover due to the resumption of
economic activities.
Meanwhile, in the Industry segment, although it will bedifficult for automobile-related parts and parts packaging
materials to make a complete recovery, we estimate that
there will be slowly recovery and that home appliancesand IT-related business will be an upward trend but with
regional differences. We grasp that medical/healthcare-related business will gradually recover with the resumption of
economic activities.
With regard to the supply chain, to make sure that the
global turmoil and stagnation do not affect parts procurement and product transportation, we are strengthening
business continuity plan (BCP) support by promoting purchasing from multiple business partners and the diversification of production bases.

Q5

A5What are your thoughts about
the accelerated progress ofdigitalization due to the spread ofnovel coronavirus infections?

Due to the impact of the spread of COVID-19, remote working seems to be advancing in a variety ofcompanies. At Sekisui Kasei, the teleworking style has begun
to become instilled as one of the options, mainly in sales
and management departments. Immediately after the stateof emergency was declared, the highest priority was given
to employee safety and we shifted basically to working fromhome. Even after that, we have been working to reduce theattendance rate in the workplace with the aim of ensuring
employee safety and reducing the risk of infection.
Such moves are not a passing fad, and I anticipate that
digitalization will accelerate in the months and years tocome. I would like to actively incorporate various tools
while accurately assessing their effects.
For example, IoT utilization, automation and production
control systems have already been introduced and installedat production sites. In sales departments, progress is also
being made with marketing automation, visualization, andthe centralized management of prospective customers.
From now on, we are advancing preparations under apolicy of drastically promoting digitalization in a broader
sense, such as the introduction of AI in research and development and digital transformation (DX).

Q6

What measures have you taken toprevent the spread of novel coronavirus
infections?

A6

As of February this year, we already had in place
the COVID-19 Emergency Response Headquarters
with me, the president, as its head. We have been collecting information on each region, including on a global basis,and taking prompt measures.
In terms of the measures, the health and safety of employees and their families are given top priority. We are
striving to take timely measures to prevent the spread of
COVID-19 infections. We send in-house notifications whenever the situation changes, such as recommendations fordaily physical condition management, working from homeand staggered working hours and the use of video conferencing. (As of August 2020, more than 20 such notifications
have been issued.)

Examples of Notifications• Working system (attendance rate, staggered commuting, teleworking, etc.)• Overseas travel (basically banned, etc.)• Domestic movement (in principle, ban on travel toproduction sites, etc.)• Exhibitions in Japan and overseas (in principle,
ban on exhibitions, tours, etc.)• Response to meetings, etc. (utilization of videoconferencing, wearing of masks, etc.)• Customer support (designation of reception location, history management, etc.)• How to use in-house cafeterias (staggered timings,
avoidance of face-to-face seating, etc.)

Integrated Report 2020 / SEKISUI KASEI

18

Strategies for Value Creation

A Message from the President

Many of our products are also used in food packaging,which is a daily necessity. To maintain a stable supply system, we therefore strengthened our response, such as thorough hygiene management and attendance management
at production sites, and refrained from accepting visitorsfrom other companies.
The situation remains unpredictable, and so the activitiesof the emergency response headquarters are continuing.

Q7

Please tell us your thoughts on the
new preparations you need to make inthe post-COVID-19 era.

important for promoting diversity and also have the effectof securing diverse and excellent human resources and increasing employee engagement. We will continue to focus
on them in the months and years to come.
Due to the transformation of society, people’s lifestyles
and economic activities have changed significantly, and we
see this as an opportunity to create new businesses. One
example is the increase in the use of food containers andfood trays due to the increase in take-out demand, and I
would like to actively address all aspects of that.

Q8

A7

Looking at the current status of the spread of infections, I grasp we cannot see signs that this situation
is being brought under control. Therefore, I think how wespend this “with COVID-19” period is important.
During the period of measures to prevent the spread of
infections, teleworking was advanced at once, and a variety
of applications for online web conferences and meetings
proved their usefulness. Many matters to consider andissues remain, but I believe that introducing and utilizingthese tools will bring many benefits that will lead to workstyle reform and a better work-life balance in a society thathas changed significantly since the COVID-19 pandemic.
Among the various measures implemented at this time,
we have begun to consider the permanent introduction andsystematic implementation of teleworking. Furthermore,since the promotion of flexible work styles, such as staggered commuting, and health management are very

19

Integrated Report 2020 / SEKISUI KASEI

A8Please explain the results ofthe first year and future outlook forthe mid-term management plan thatstarted in FY2019.

The mid-term management plan (Make Innovations
Stage-II), which started last year, aims to further
evolve and strengthen the changes promoted in theprevious medium-term plan (MI60) and further improve
corporate value. To achieve this goal, we plan to promote“business portfolio transformation” and the “execution ofstrategies to strengthen earnings structure.”
Due to the impact of the M&A of the Proseat Group, which
was carried out as part of this plan, there have been significant increases in the share of international sales and in the industry- and automotive-related business portfolios. In termsof earnings, however, the slump in the global automobile
market, including Europe, combined with the slump in LCD
panel applications, led to a significant decrease in earnings.
We have determined that the automobile, home appliances/IT, and medical/healthcare fields, which are the corebusiness fields for “business portfolio transformation,” areexpected to grow over the medium to long term, but the situation remains extremely severe due to the spread of novel
coronavirus infections. Going forward, we will continue torespond quickly to the changing business environment.
In the meantime, with a view tor “reforming our earnings
structure” we are making drastic cost reductions and advancing reviews of low-profit businesses.

Q9

ESG investment is attracting attention,and it is considered to be important tohave a vision for corporate activities
over the medium to long term. Please
explain Sekisui Kasei’s ESG strategy.

A9

Concerning ESG, we are conducting activities on
the following matters deemed to be of material
concern. In case of E (environment), initiatives are centeredon SKG-5R, S (society) involves the promotion of social
contribution through business and work-style reforms, andunder G (governance) we are examining successor development plan and the remuneration system.
In particular, in the past year, we have set up a Nominating
and Compensation Advisory Committee regarding governance, and are studying the development of successors
to officers and a new remuneration system. We have also
introduced a new restricted stock (RS) system in the compensation system to promote value sharing with shareholders.
Furthermore, we hold regular training sessions for officers
with the aim of improving the level of directors. In past
executive training sessions, we had invited outside lecturers
to hold study sessions, but in the current fiscal year we areplanning to hold training sessions for which the themes to beaddressed have been set in advance.
In contrast, to promote such an ESG strategy, I believethat the capabilities of the Group’s human resources are of
the utmost importance. By practicing Zen-in Keiei (management in which every employee is involved), the culture of
the Sekisui Kasei Group, we are strengthening our efforts todevelop human resources so that each individual can fully
demonstrate his or her abilities.
As part of our human resource development and diversity
efforts, we formulated an action plan for promoting theactive participation of women and supporting the development of the next generation for the three years from 2019.
We are now systematically promoting the promotion ofactive participation and development support for women.
Among them, the number of female department heads(four as of September 2020) and females in management
positions has increased, and one female representative
has been appointed at a Group company. Furthermore, wehave set a target value of 17% for the percentage of women
recruited, and we are conducting hiring activities for female
employees to exceed the set ratio.
In addition, by FY2019 more than 90 people had graduated from the selective training SK-Juku (SK Cram School),which is continuously held every year for the purpose of developing next-generation leaders and continue to be held
in FY2020. Going forward, I would like to further respect
diversity and strengthen our human resource pool.

Q 10

Please explain your thoughts withregard to shareholder returns forthe current fiscal year.

A10

Our positions the returning of profits to shareholders as an important management issue.
Our basic policy remains to distribute profits in accordance with consolidated financial results as well as inconsideration of stability of dividends while strengthening
our management structure and securing internal reservesto prepare for future business development. Based on thispolicy, we are targeting stable returns over the medium tolong term with a consolidated payout ratio of 30% to 40%.
In terms of retained earnings, we are giving priority tostrategic investments that will lead to further growth andinvestments in projects that will lead to strengthening of
the management structure.
This year, we are considering dividends with an emphasis
on shareholder returns while taking into consideration theimpact of the spread of novel coronavirus infections.

President and Chief Executive Officer

Integrated Report 2020 / SEKISUI KASEI

20

Strategies for Value Creation

Mid-Term Management Plan

Make
Innovations

Priority Policies
Sekisui Kasei Group is promoting three priority policies to achieve medium-term management plan basic policies of “cementing our position as a leading company in environmental issues,” as well as advancing the “business portfolio transformation,” and the “execution of strategies to strengthen our earnings structure.”

1. Evolution ofbusiness portfolio

Stage-II

Accelerate growth withthree business domains andtwo key products

Promote business portfolio transformation and execution of strategies to strengthen earnings structure
while solidifying position as leading environmental company

Automobile structural material field
High functional food container field
Medical/Health Care field
PIOCELANTECHPOLYMER

Mid-Term Management Plan

Make
Innovations
Stage-II

Improvement of organizational capabilities
Improvement of productivity
Improvement of capabilitiesof human resources

Culture Vision:
Both the people and company growbased on management by all members’
participation (Zen-in Keiei)

Make Innovations Stage-II Positioning and Quantitative Targets
Our previous mid-term management plan “MakeInnovations 60” covered FY2016 to FY2018 and focusedon transforming our business portfolio and reforming ourearnings structure in line with the goal of transforming ourbusiness model and advancing to the next stage of growth
as Sekisui Kasei moved into its 60th year of operations.
From FY2019, we believe it vital to strengthen the transformations we have undertaken in the three years coveredby the previous mid-term management plan, and in addition to further advancing the “execution of strategies
to strengthen earnings structure” and “business portfoliotransformation” goals, we have created and are promoting
our new three-year mid-term management plan “MakeInnovations Stage-II,” which contains a basic policy aimed
at cementing the Group’s position as a leading company inenvironmental issues.

2. Strengthening groupmanagement foundation

Make Innovations Stage-II Quantitative Targets(Note) The table on the right shows the planned values as of April 2019. The planned
values for FY2021 may be revised when the impact of COVID-19 infections on theGroup becomes known, and at the time when the calculation of a rational earnings
forecast is judged possible.

FY2018results

FY2019plan

FY2021plan

Averageannualgrowth overthree years

Net Sales

1,126

1,450

1,550

11%

(Overseas sales)

204
(18%)

535
(37%)

580
(37%)

42%

18%

(Overseas sales ratio)
Operating income(Operating income ratio)
Recurring income
Net income attributable toowners of the parent
ROE

48

49

78

(4.2%)(3.4%)(5.0%)

48

48

76

17%

31

32

50

17%

4.8%

4.8%

6.8%

3. Contribution tosustainable society
Evolution of existing products
Development of new materials
Business activities that do notplace a burden on society

Evolution of existing products
Promoting environmental contributions
through development and provisionof products that reduce weight andimprove thermal insulation

Practical application of
new materials

Business activities that do notplace a burden on society

Practical application of low environmental impact materials made of
biodegradable or biobased plastics

Reducing environmental impact
through production process, and byrecycling activities

Key “Make Innovations Stage-II” concepts• Promote to get contribution from M&A Activities in MI60
• Work to bring about actual results early with MI60 development projects• Promote further Business Portfolio Transformation• Strengthen group management foundation and implement efforts that further emphasize the environment

Become leading environmental company
21

Integrated Report 2020 / SEKISUI KASEIIntegrated Report 2020 / SEKISUI KASEI

22

Strategies for Value Creation

Business Overview: Industry

Market Environment and FY2019 Results

Initiatives in the Mid-term Management Plan & the FY2020 Outlook

FY2019 net sales in the Industry Segment were ¥78.053
billion, an increase of 63.5% YoY.
In the Home Appliance/IT fields, demand in 1H was firmfor PIOCELAN (polystyrene/polyolefin hybrid resin foam)
and other products for use in LCD panel transportationmaterial applications, though the pace of growth gradually subsided. While demand for TECHPOLYMER (organic
polymer particles) for use in light diffusion applications,such as liquid crystal panels, was expected to recover from
2H, sales were down YoY as the recovery from inventory
adjustments took longer than previously expected.
In the Automotive field, sales of packaging materials
for automotive parts improved in Japan, though growth
was rather sluggish due to weakness in global automobile sales. Global utilization of automotive component
applications using PIOCELAN and other company prod-

ucts expanded on the increased use by Japanese automakers. Performance at the Proseat Group remainedsluggish, mainly on a slump in sales at the European
automakers, which had an adverse impact on consolidated earnings. However, the effects from the acquisitionof the company, including improvements in productivity
and product sales to Japanese automakers, are now
gradually becoming apparent.
In the Medical/Health Care-related fields, sales of
ELASTIL, a thermoplastic elastomer bead foam, improved on the adoption of a new model in the midsoleof running shoes. On the other hand, sales of ST-gel, afunctional high-polymer gel, remained weak due to theimpact from escalating trade friction on finished products from China to the US.

Net Sales

Recurring Income(Millions of yen)

(Millions of yen)

78,053

1,186

Under the “Make Innovations Stage-II” Mid-term Business
Plan, we will continue to promote “Business Portfolio
Transformation,” including an expansion of global sales
and sales of priority products. Under this plan, we aim toaccelerate growth with a focus on three business fields(the automobile structural materials, functional food container and medical/health care fields, of which the automobile structural materials and medical/health care fields
are in the Industry segment) and two priority products

TOPIC(PIOCELAN, TECHPOLYMER).
As a result of the spread of COVID-19, we expect a
decline in automotive component and component packaging-related demand due to supply chain changes andproduction shifts at automakers in Japan, the Americas,
Europe, and Asia. For the Home Appliances/IT fields, thetimeline for a recovery in LCD panel light diffusion application-related demand still appears uncertain.

Products Exhibited at K 2019

Sekisui Kasei exhibited its products at K 2019, the Trade Fair for
Plastics and Rubber held in Dusseldorf, Germany from October
16 to October 23, 2019. The trade fair is held once every three
years and is the world’s largest international trade fair of plastic
and rubber products. Alongside NPE in the US and IPF in Japan,
it is one of the three largest plastics trade fairs in the world.
Topics for discussion at the various booths included “Plastic
Solutions 4.0” and “Young Professionals.” At the Sekisui Kasei
booth, we introduced new materials and products to visitors anddiscussed our intention to continue providing sustainable solutions for the future.
The K 2019 booth

15

23

16

17

Integrated Report 2020 / SEKISUI KASEI

18

19

(FY)

15

16

17

18

19

(FY)

Integrated Report 2020 / SEKISUI KASEI

24

Strategies for Value Creation

Business Overview: Human LifeNet Sales

Recurring Income(Millions of yen)

(Millions of yen)

78,053Market Environment and FY2019 Results
FY2019 net sales in the Human Life Segment were ¥58.1
billion, a decrease of 10.4% YoY.
In food containers, sales were generally firm, though
year-end demand for convenience stores was somewhat
(FY)
15
16
17
18
19was impacted
weak. Demand
for agricultural
products
by the large typhoons last fall, but was neverthelessfavorable. On the other hand, fishery-related demandremained in a slump amid an ongoing nationwide decline in catch volume. In the construction materials andcivil engineering-related fields, 1H results were boostedon the acquisition of sporting facility and associatedInitiatives in the Mid-term Management Plan & the FY2020 Outlook

1,186
construction and roadwork projects, mainly in the greater Tokyo area.
Sales volume for mainstay product ESLEN Sheet, afoamed polystyrene sheet, remained generally flat YoY(FY) noo15 food16
17 but a18slump 19
amid firm
tray sales,
in instantdle container demand. Sales volume for ESLEN Beads,
which are expandable polystyrene (EPS) beads, werealso flat YoY, with firm demand in soil applications offsetting weak demand in other applications. Profit declined YoY, largely as weak sales countered the company’s efforts to reduce costs.

In the food field, under the “Make Innovations Stage-II”
Mid-Term Management Plan we will work to expand
business of new products and sales channels in addition
to expanding existing fields with a focus on functional
food containers. In the agriculture/fishery-related field
we will work to expand sales, including import and export business, by maintaining freshness technology andlogistics efficiency proposals tailored to domestic specialty products. With regard to global expansion, we will
focus on fruit trays and functional food containers as key
products. Furthermore, as efforts to improve profitability
we will continue to improve productivity and logistics

TOPIC

Net Sales

Recurring Income(Millions of yen)

(Millions of yen)

3,280

58,101

15

25

16

17

Integrated Report 2020 / SEKISUI KASEI

18

19

(FY)

15

16

17

18

19

(FY)

through energy saving and rationalization while continuing to review low-profit businesses.
As a result of the spread of COVID-19, we expect a
deterioration in demand for travel and tourism-relatedmaterials on a decline in overseas visitors to Japan anddomestic consumers staying at home. On the other
hand, we expect demand for take-out containers andother products at supermarkets, convenience stores,
and restaurants, to increase. We also expect a gradual
recovery in demand for agricultural, fishery, and construction materials as economic activity resumes.

AQUAROAD for use in rooftop greening applications

AQUAROAD is a plastic rainwater storage and infiltration tank thatcan be installed directly beneath the road, and is widely used for roadflooding countermeasures and the handling of rainwater during torrential downpours. Sekisui Kasei has joined the Green Infrastructure
Public-Private Collaborative Platform created by the Ministry of Land,
Infrastructure, Transport and Tourism in March 2020 as part of oureffort to promote our contribution to the environment such as applying AQUAROAD to rooftop greening and others. As shown with
the Meguro Sky Garden project, located in Meguro-ku, Tokyo andopened in 2013, the company has a track record in greening projects
combining AQUAROAD and the EPS civil engineering method using
lightweight materials. Backed by this experience, we aim to continue contributing to the development of a rich urban environment bypromoting the use of AQUAROAD in green infrastructure projects,
including rooftop greening efforts.

AQUAROAD construction site

Cross-section
Soiren blocks

Soiren blocks
Soiren blocks
Rainwater reservoir tanks(AQUAROAD)
Embankment

High-speed way roof coverIntegrated Report 2020 / SEKISUI KASEI

26

Strategies for Value Creation

Research & Development Strategy
Towards a More Beautiful Future
By engaging in the research challenges
involved in providing products that helptransform lifestyles and improve the global
environment, we contribute to businessactivities through the creation of new value.

Director & Managing Executive Officer
Head of Research & Development Center

Hideyuki Asada

Research & Development Center Policy	Develop new products that contribute to thegrowth of the company
Polish marketing mindsets, implement developments based on hypothetical needs, andactively utilize and promote interaction withother industries	Engage in developments that lead to enhancement and expansion of existing businesses
Develop solutions that help enhance existing
businesses from the three perspectives of“economic value,” “social value,” and “environmental value”
	Nurture developers and creative personnel
that think about and experiment with businessResearch & Development Overview

Developers hold their own thoughts and put
their “desire to achieve something” into practice[Industry]
We develop functional materials adapted to market needs
based on out foam, fine particle, and gel technologies.

Research & Development Framework
The Research & Development Center, which is our corefacility for R&D, handles duties from marketing to productdevelopment and improvement for technologies that leadto new business and basic development of new products.
Within the Center, the Basic Research Laboratory conducts
research and development related to new technologies and27

new materials, and handles basic research related to technical developments for the entire company. At the sametime, the Center is also home to the Development Division,
which allows the Center to help accelerate the development cycle for new products.
The Center also manages evaluation and analysis
work, as well as the protection and application of intellectual property.
The Center collaborates with both the Production
Technology Center, which works on processes that lead to
production innovations and design development for equipment, including the use of IoT and AI, and with the Design& Technology departments of each Business Headquarters,
to create new products.

Integrated Report 2020 / SEKISUI KASEI[Human Life]We advance the addition of new functions and productimprovements based on a diverse range of needs byleveraging our core foam extrusion, foam sheet molding,suspension polymerization, impregnated foam, and molding technologies.
Research and development costs for FY2019 totaled¥2.769 billion.

SKG-5R Balances Sustainability and Growth
In order to tackle the solutions for climate change, ocean
pollution, and other global-scale challenges faced by society,we advance research and development in connection with
SKG-5R, which we raised as our Action Plan.
In particular, we are focused on initiatives that rely on our
proprietary technologies for 2R: Replace (replace with sustainable materials and energy) and Re-create (contribute toenvironmental improvement through the re-creation of newvalue and function).
Since FY2019 we have enhanced development of
BIOCELLULAR as the category brand for Replace.
BIOCELLULAR is the name for our series of products inwhich petroleum-based raw materials have been replacedwith plant-based raw materials.
ELASTIL BIO, a thermoplastic elastomer foam made byreplacing the original materials with plant-based materials,
maintains the lightweight, resilience, and cushioning prop-

TOPIC

erties that are essential for high-performance running shoes.
For this reason, the material has been adopted by a major
sports brand for the midsole of a shoe model that is scheduled to go on sale in the fall and winter of 2020.
TECHPOLYMER BIO, a biodegradable polymer microparticle, was researched and developed as an eco-friendly
product amidst the attention placed on the impact thatmicroplastics have on ecosystems. We also developed a BIO
grade of LIGHTLON, a non-cross-linked low-density polyethylene foam sheet used for applications ranging from packaging to agricultural materials.
Moreover, ST-LAYER, a compound carbon fiber reinforced
plastic layer structure that was adopted for the blades usedon NTN Green Power Station wind turbines, is a development
product under Re-create that will help improve power generation efficiency through its lightweight, rigid properties. We used
our proprietary ST-Eleveat heat resistant foamed plastic as thecore of the structure, and we commercialized ST-Eleveat BIO
during the research and development stage of this core material.

Human Resources Strategy for Research & Development

The social environment encompassing the Group has become increasingly
complex in the era of VUCA, which has led to the repeated emergence of
unexpected events, produced a high level of uncertainty, and made it difficult to predict the future. Against this backdrop, human resources that can
only undertake the research and development themes presented to themis unlikely to allow us to flexibly illustrate a future for the Group.
I therefore see it as my role to nurture engineers that maintain an awareness of expanding upon the image of the customers who will use the products they develop, illustrating their own development story, and changing theworld through the products they create. Moreover, it is my duty to nurture a
research and development climate that will foster these kinds of personnel.

Integrated Report 2020 / SEKISUI KASEI

28

Strategies for Value Creation

Human Resources Strategy“Human resources,” the source ofsustained growth
In carrying out “Zen-in Keiei”(all-member management),
we promote the manufacture of containers
where we are able to place value on
mutual improvement that leads to the growthof our respective individuality andindividual strengths.

Personnel Systems Organization
Sekisui Kasei’s personnel systems work to promote
the implementation of, and to embody, Zen-in
Keiei. Each employee determines the operations
that they are engaged in (work tasks), and basedon the results of such activities and their behavioral
process, we introduce a mechanism to assess results. These systems enable employees with motivation and competency to tackle challenges andperform at an increasingly high level, and play arole in nurturing our culture, namely, “Zen-in Keiei
that drives growth for people and the Company.”

General Manager of Personnel Dept.

Makoto Okuno

Basic Stance with Regard to
Human Resources
Founding spirit“For happiness of people working for the company”
Culture and DNA that have underpinned
development throughout our history
Full participationin management

Leading to the current
Zen-in Keiei“Executing full-participation management– the spirit of entrepreneurs and industrialists –”- Entrepreneurial spirit: the spirit of enterprise, thespirit of tackling new things (No. 1)- Industrialist spirit: proactively moving forward
and taking action, mutually improving

The very culture that has supported our growth up
to the present is, we believe, a basic and essential
element toward realizing our vision, and in handing this down to those who follow, has value in its
practice.
In accordance with this belief, in order to carryout our management philosophy of We, Sekisui
Kasei Group, practice Zen-in Keiei based on respect and mutual trust. We are always innovating in
our aim of “new happiness,” we have formulated
the five human resource qualities required of employees of the Sekisui Kasei Group.
We promote the manufacture of containers
through the carrying out of Zen-in Keiei which can
produce such human talent and thoroughly instillsuch qualities.

29

Integrated Report 2020 / SEKISUI KASEIThe ideal type of person being soughted by
Sekisui Kasei Group
1. Aspiration
	Human resources that feel strongly about achieving highgoals and the nurturing of people
2. Creativity
	Personnel with the ability to conceptualize in order tocreate and innovate based on mental agility, and that are
not bound by preconceived notions
3. Self-reliance	Having a sense of ownership in all matters, people who
can think for themselves, who can think things throughand make assessments, and then take responsibility for
their actions
4. Communication skills
	Together with being able to clearly convey their own
thoughts in any situation, human resources who will become engaged through the exchange of ideas with others
5. Ability to execute	Personnel who make concrete plans to achieve objectives, act promptly and take the initiative, and who produce results

Systems that Enable Diverse Human Resources
to Play an Active Role
More than merely line positions geared toward conventional-type human resources management that makes
use of collective strengths, it is the professionals who
possess advanced technical knowledge and skills, andpractical experience, who put their capabilities to use toachieve results in the “professional system.” Having introduced this system, by establishing multiple line-type
personnel courses, we are creating an environment inwhich diverse human resources can play an active role.
In addition, in 2019 we enhanced our “senior reemployment system,” taking an active approach toproviding human resources age 60 and above with further chances for success and stimulating employment.

Initiatives for Human Resources Development<Career growth>
While we have established training regimens that enableeach and every employee to design their own course for
growth, we also support personal growth by offering partial
compensation for costs associated with correspondence
courses or the acquisition of a variety of qualifications theychoose to pursue for the own personal development.
<Nurturing management personnel>
With the objective of nurturing the next generation of leaders, we offer elective-type training through Sekisui Kasei
Cram School (SK-Juku).
<Female leadership training>
Along with career stimulation training offered to female employees to raise motivation for growth gained in the course ofdesigning their careers, we also provide leadership training.
• Women in Management as of Year-End FY2019(Non-consolidated) Nine people(Includes four female department heads)• Female Group company president One person

Human Resources-related Structure
The Personnel Department and Training Department,
principle drivers of our human resources strategy, areunited in carrying out an array of operations with regard
to human resources.
The Personnel Department plays a role in the welfare
and hiring of personnel and labor, including putting inplace personnel systems in line with our human resources strategy, while the Training Department is in chargeof matters pertaining to the education and training of
employees, and in developing an environment that enables the growth of individuals.

TOPIC

Commemorative Founding Award

Once every year at Sekisui Kasei Group, we bestow awards to employees in recognition of their contributions to Company growth and annual business results.
As the President’s Award, not only are there awards for “achievements,”“skills,” and “originality and ingenuity,” we have also established awards foreach Responsible Director. The awards are announced on October 1, the anniversary of the Company’s founding. In our internal Group publication, we spotlight details of the awards, a recipients’ list, and interviews of the winners, so that
all employees will honor their efforts.
This type of awards system is one of a variety of initiatives that supports“Zen-in Keiei that drives the growth of people and the Company.”
Integrated Report 2020 / SEKISUI KASEI

30

Foundation of Value Creation

CSR That Supports Corporate Value
In addition to meeting the expectations of all our stakeholders, including shareholders, Group employees,
and customers, the Sekisui Kasei Group remains committed to developing a variety of CSR and businessactivities that put our management philosophy into practice, so that we can fulfill our responsibility to theinternational community.

Contributing to the Achievement of the SDGs through our Business Activities
The Sustainable Development Goals (SDGs) aim to addressa wide range of issues which consist of 17 universal goals
and 169 individual targets, and we note that there is quite
a bit of overlap in these goals and targets with our efforts

Key CSR Issues and Targets

Sekisui Kasei Group Initiatives

SKG-5RTo realize a sustainable society, we released
the SKG-5R STATEMENT and set two targets to be achieved by 2030. In order toachieve these targets, we promote the 5Rsof Reduce, Reuse, Recycle, Replace, andRe-create, and contribute to solutions for the
problems faced by the global environment
as raised by the SDGs.

P33-36

Environment

We ascertain the environmental ramifications originating from various aspects of ourbusiness activities, and strive to mitigate andreduce environmental impact.

P37-40

Human rights andlabor practices

Based on the Sekisui Kasei Group founding
spirit of “For happiness of people working
for the Company,” we engage in creating
environments in which all Group employees
can work in good health, both mentally andphysically, and with vitality.

P41-422-2

Manufacturingwith a focus on theenvironment, safety,
and product quality

In accordance with our polices related to theenvironment, safety, and quality, we strive
to prevent accidents and disasters, ensure
the health and safety of all people includingGroup employees, business partners, andlocal residents, and aim to provide products
and services that meet the expectations ofconsumers.

P43-443-1

Consumer issues

We engage in manufacturing from the perspective of our customers and undertake thechallenge of providing new value.

P45

4-1

RecycleWe contribute to the promotion of regional
recycling by expanding reclamation centers
for used EPS (expandable polystyrene) foam.

P46

5-1

Creating a company
where transactions
are conducted withconfidence

Based on our management philosophy, weare committed to the prompt, appropriate
disclosure of pertinent information in order toensure transparency, validity, and compliancein management.

P47-50With the goal of contributing to the creation of a sustainable society, the Sekisui Kasei Group organizes its CSR issues into
the five key areas of “environment,” “safety, security and health,” “quality,” “community,” and “governance.” We are committed to continually developing policies and implementing specific initiatives in each of these areas.
Focus Area

E
Environment

Key Points

PolicyContributing through ourbusiness to the preservationand improvement of the
global environment

Business activities based on the SKG-5R* concept

1.
Environment
Contributing to the environment in cooperation with our
stakeholders

S
Social3.
Quality4.
Community

Creating practical uses from new materials

Developing products making use of biodegradable andbiomass plastics

Engaging in activities that do not put a burden
on society

Promoting recycling and the saving of energy in production,
administration, and management activities

Management

Improving the environmental management system andcomplying with all laws and regulations

Addressing international issues

Compiling and releasing information in cooperation withindustry and governmentG

5.
Governance

1-2

Participating in Green Wave and Satoyama Conservation Activities

Developing products that contribute to the advancement ofgreen energy and the prevention and mitigation of disasters

Contributing to healthy lives

Promoting improved health

Developing gels for use in medical products, cosmetics, andsports-related products

Providing products and services of the highest quality

Complying with product characteristics

Maintaining and improving product quality

Reflecting customer feedback

Enacting measures to incorporate customer feedback into
management

Achieving co-existence andmutual prosperity with local
communities and employees

Concluding disaster prevention agreements, etc.

Cooperating with local governments

Promoting local volunteer activities

Participating in community clean-up activities,
disaster relief operations

Creating a company wheretransactions are conductedwith confidenceE
Environment

Strengthening efforts to eliminate accidents and realize zero
occupational accidents

Contributing to the prevention and mitigation ofdisasters, and the advancement of green energy

Promoting workstyle reforms and diversity

Governance

Providing sustainable products, goods and services
Expanding application products and improving the functionalityof products that reduce weight and enhance thermal insulation

Preserving biodiversity

1-1

Specific Initiatives (Direction, examples)

Evolving existing products

Providing safe business activiAchieving zero accidents
ties and work environment

2.
Safety,Creating safe cities
security,and health

Promoting flex-time, work-at-home, telecommuting for employees

2-1S
SocialPromoting diversity and the development of human resources

Strengthening the global governance system

Strengthening the global management system

Sincere efforts to comply with the Corporate
Governance Code

Implementing steady management, including advisory committees

Strengthening compliance andrisk management measures

Improving quality in management systems and methods* SKG-5R: Reduce/Reuse/Recycle/Replace/Re-create

Contributing to the Realization of a Sustainable Society
The “2030 Agenda for Sustainable Development” establishing international sustainable development targets
for the years between 2016 and 2030 was adopted at a
UN Summit in 2015. The Agenda contains 17 Sustainable
Development Goals (SDGs) that are applied universally to
all countries, including developed countries, and focus on
confronting climate change, ensuring sustainable consumption and production, and resolving poverty and inequalities.
With this international focus in mind, the Sekisui Kasei
Group is committed to clarifying our priority issues.

31

Integrated Report 2020 / SEKISUI KASEI

to contribute to society through our business activities. In
the following section we will outline the CSR and businessactivities of the Sekisui Kasei Group that contribute to theachievement of each SDG.

G
GovernanceIntegrated Report 2020 / SEKISUI KASEI

32

Foundation of Value Creation

Contributing to the creation of asustainable society

SEKISUI KASEI’s ESG
Targets of SKG-5R

Special: Undertaking the Challenges ofa Leading Environmental Company

Environment

TargetI

Create Sustainable Star Products and expand their market

In aiming to achieve a sustainable society, along with reducing the environmental impacts of products during the manufacturing stage, theSekisui Kasei Group deems it necessary to minimize the environmental
impacts of procured materials and products after their use by customers.
Therefore, we established a target (FY2030) for the number of registeredenvironmentally-friendly products, and are engaged in both evolving
existing products and putting new materials into practical use.

Under our Mid-Term Management Plan, which we launched in 2019, the Sekisui Kasei Group has positioned “contributing to a sustainable society” as a priority issue for management. After back-casting from our aspirations for 2030
and following repeated discussions over the mid-term targets, we raised SKG-5R as our action plan. This action plan
adds 2Rs (Replace and Re-create) that are unique to the Company to the conventional 3Rs (Reduce, Reuse, Recycle).

FY2030 Targets
Expanded lineup of Sustainable Star Products

Registered (total)

Ratio of net sales

100 products

20%

3Rs for the creation of a recycling-based society

For a sustainable society andcorporate growth

Implementation of

SKG-5R
Mid-Term Management Plan

“Make Innovations Stage-II”(FY2019 - FY2021)

Evolution ofbusiness portfolio
Strengthening Groupmanagement foundation
Contribution tosustainable society

ReduceCreate Sustainable Star Products
From among our Sustainable Products that consider
environmental impact and limited resources
throughout their life-cycle (eco-friendly products),
under SKG-5R we certify those products that
contribute to the environment to a particularlyhigh degree as Sustainable Star Products(environmentally-friendly products), and have set out
to index and promote their expansion.

Reduce the use of resources and energy[Core measures]
Reduce raw material consumption via higher foam expansion rates,
lighter weights, and thinner walls
Promote energy savings in production and logistics(CO2 reduction)

Reuse

Targets and results for the number of registrations and share of total salesS(%) 30.0

1

25.0

1

20.0

1

15.0

1

10.0

1

120 (products)

Registered (total)

100

100
80

Ratio ofnet sales

20%

60

12

10

40

40

20

5.0

23

0

Reuse waste materials and energy

0

2018

2021

(Baseline)[Core measures]
Expand the lineup of reusable products
Reuse distribution materials

2030

(FY)

*

RecycleTargetII

Develop recycling technologies and systems topromote recycling

CO2 emissions

As part of the Paris Agreement, which went into effect in November 2016,an international target (2°C target) was set in aims of keeping the averagerise in global temperatures since the industrial revolution below 2°C.
In aims of achieving this 2°C target and “Business activities that do notplace a burden on society,” as raised in the Mid-Term Management Plan,
we have formulated CO2 reduction targets through FY2030.

[Core measures]
Commercialize and promote sales of products made from regenerated materials
Develop recycling technologies (material, chemical, energy recovery)

FY2030 Targets
Scope1+2–27%

2Rs based on Sekisui Kasei Group’s unique technologies

We will support and contributeto the Sustainable Development
Goals (SDGs)

Replace

Promote replacement with sustainable
materials and energy[Core measures]
Switch from petroleum-based to biomass and biodegradable materials
Switch to renewable energy

Re-create

Re-create value and function to contribute toenvironmental improvement[Core measures]
Create next-generation products and business models with new value
and functions that contribute to an improved environment

33

Integrated Report 2020 / SEKISUI KASEI

2 emissions
ReduceCOin Scope
27%
Targets andresults forthenumber of registrations
and1+2share byof totalsales(%) 30.0120 (products)
100
80
60
40
20
0

Registered
Under SKG-5R, we set the targetof (total)
reducing CO2
25.0
100 (Scopeemissions from our business activities
Ratio of 1
sales
and 2) by 27% in FY2030 as comparednet
with
FY2018.
20.0
20%(Science
This target was set in reference to the SBT
15.0
Based Target) Initiative
12 standards.

10

40
23
2018

(Baseline)

2021

2030

(FY)

Scope 1 + 2* reduction plan
140,000 CO2 emissions (tCO2)
BAU (Business as usual)

130,000

BAU comparison

120,000
110,000

10.0

100,000

5.0

90,000080,0002%
reduction
in FY2021

FY2018 comparison

27%
reduction
in FY2030

SKG-5R Activities

2018 2020 2022 2024 2026 2028 2030

(FY)

(Reference value)* Scope1: Greenhouse gases directly emitted by businesses
Scope2: Indirect emissions coinciding with the use of electricity, heat,and steam supplied by other companies

Integrated Report 2020 / SEKISUI KASEI

34

Foundation of Value Creation

Contributing to the creation of asustainable society

SEKISUI KASEI’s ESG

Environment

Special: Undertaking the Challenges ofa Leading Environmental Company

3Rs

for the creation of a recycling-based society

ReduceEco-friendly andcomfortable
automobiles

Technologies to develop materials anddesign solutions for repeated use
Foam plastic is used widely in packaging and delivery containers for delicate foods because it retains freshness with its
excellent heat insulation property and protects the contentsfrom impact during transport with its good shock-absorbing
property. In addition to helping reduce food waste, it also
holds the potential to contribute to longer-range transport ofagricultural, forestry, and fishery products. Moreover, by making changes to the material selection and design technologies,
we also provide foam plastic in the form of ESLEN Containers
and other returnable containers that can be used repeatedly.

Recycle100% recyclable cushioning
and packaging
materials

35

Integrated Report 2020 / SEKISUI KASEITechnology to minimize thickness and weight withoutcompromising functionality
Despite the fact that lighter weight automobiles consumeless fuel, in recent years total automobile weights have tended to increase with the installation of more equipment andthe use of thicker automotive components designed to improve safety during a crash. PIOCELAN, a hybrid resin foam
consisting of polystyrene and polyolefin, and ST-Eleveat, ahigh heat resistant foam, satisfy the strength and heat resistant performance demands of automobiles while enabling
minimal wall thicknesses and weights (high foam expansionrate). Along with improving fuel efficiency and reducing CO2
emissions, these materials also help to improve safety.

2Rs

based on Sekisui Kasei Group’s unique technologies

Replace
Running shoes madefrom vegetable plants

Effective use of sustainable resources (biomass plastics)
and bio degradable plastics
The midsoles of running shoes require high resiliency for running
fast as well as a cushioning property to reduce the burden on therunner’s body. ELASTIL, a type of elastomer bead foam, balancesthese two properties to a high degree.
ELASTIL BIO continues to satisfy these properties while being
made of plant-based materials instead. Recognized as having thesame performance as standard ELASTIL, ELASTIL BIO has been
adopted for use in running shoes. This product considers bothpeople and the environment.

Reuse
Reusable containers
for food delivery

Use of recycled materials in business and development ofa chemical recycling technology
Made entirely from used EPS, EPSREM is a recycled material that can beused to make cushioning materials and packaging materials. This material
is produced using a material recycling technology, however, which places alimit on the number of times EPSREM can be reused for quality-purposes.
Therefore, we are also advancing research and development into chemical
recycling that allows for repeated recycling. The day when it is commonplace for foam plastics to be completely recycled might be close at hand.

Re-create
Even more
efficient wind power
generation system

Creation of new value and next-generation products tocontribute to the environment
In order for wind power generation systems that rely on natural energy toefficiently generate electricity, the blades must adjust to the direction andspeed of the wind in order to receive the wind without waste. Although lighter blades respond more quickly to changes in the wind and can thus increase
power generation capacity, they must also be made of strong materials inorder to prevent damage caused by centrifugal forces and strong winds.
ST-LAYER (a composite structure consisting of fiber reinforced plastics andfoam) is a material that is both light and strong. Adopted for use in wind
power generation blades, ST-LAYER contributes to higher output and greater
power generation efficiency.

Integrated Report 2020 / SEKISUI KASEI

36

Foundation of Value Creation

Contributing to the creation of asustainable society

SEKISUI KASEI’s ESG

Environment

To achieve a sustainable society, the Sekisui Kasei Group promotes Monozukuri (to create
things) activities in coexistence with the environment, such as the reduction of environmentally hazardous substance emissions generated through business activities.

Compliance with the Chemical Substances Management Act

Inputs/Outputs (FY2019 Results)
The Sekisui Kasei Group manages the environmental impact arising from business activities in “output/unit consumption,”
which expresses environmental loadings per production volume.
Japan

Overseas

Inputs

InputsWe promote improvements in compliance with the PRTR*
system under the Chemical Substances Management
Act (the Act on Confirmation, etc. of Release Amounts* PRTR: Pollutant Release and Transfer Register

Emissions of chemical substances (PRTR substances: Rounded to one decimal place)
Substance

StyreneToluene(t)

Methyl methacrylate

Ethyl benzene

Energy consumption

Energy consumption

1,926.50

Water consumption

million MJ/year

3,437
thousand m3/year

Recycling 9,955 t/year
Materials Recycling: 8,543 t/year
Thermal Recycling: 1,412 t/year

Outputs
Atmospheric environmental load
CO2 emissions: 95,903 t/year (Production)
CO2 emissions: 8,180 t/year (Logistics)
NOx emissions: 39 t/year
SOx emissions: 65 t/year
Aquatic environmental load319.59Water consumption

164

million MJ/year
Electric: 11,011 MWh/year
Non-electric: 5,413 kl/year[Crude oil equivalent]

Recycling 487 t/year
Materials Recycling: 478 t/year
Thermal Recycling: 9 t/year

Outputs
Atmospheric environmental load
CO2 emissions: 17,979 t/year (Production)
NOx emissions: 13 t/year
SOx emissions: 6 t/year

Aquatic environmental load

Total effluent: 3,268 thousand m3/year

Total effluent: 134 thousand m3/year

Amount of COD discharge: 16 t/year

Amount of COD discharge: 14 t/year

Industrial waste

Industrial waste

10,436 t/year

763 t/year

Final landfill disposal and simple incineration:
482 t/year

Final landfill disposal and simple incineration:
276 t/year

Integrated Report 2020 / SEKISUI KASEI2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019

Air

6.2

6.6

4.7

4.7

6.7

0.4

0.4

0.5

0.4

0.5

1.4

1.4

1.6

1.4

1.4

0.1

0.1

0.1

0.1

0.1

Water

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Soil

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Transfer

1.6

2.7

2.8

3.4

3.1

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

1.1

0.0

0.0

0.0

0.0

0.0

thousand m3/year

Sekisui Kasei• Sales• Production• R&D

Fiscal Year

Emission

Electric: 122,595 MWh/year
Non-electric: 18,827 kl/year[Crude oil equivalent]37

of Specific Chemical Substances in the Environment andPromotion of Improvements to the Management Thereof).

Participation in EcoPro 2019

Grant Activities through the Sekisui Kasei Fund

We participated in EcoPro 2019, held December 5 to 7, asa member of the Clean Ocean Material Alliance (CLOMA).
There we introduced our products and initiatives that takepeople and the environment into consideration in ourefforts to realize a sustainable society. CLOMA is a platform
established to strengthen collaboration among a broadcross-section of stakeholders to accelerate innovation so as
to find solutions to the problem of marine plastic litter.

With the aim of providing assistance to support biodiversity
preservation activities, we established the Sekisui Kasei Fundwith a contribution to the “Mirai Fund Ohmi” in 2012, and to
expand upon this, we created a new fund with a contribution
to the “Mirai Fund Ibaraki.” We continue to assist activities
conducted by local NPOs, in which Group employees areactive and participate as volunteers, and together with that,endeavor at Satoyama Conservation Activities.

Integrated Report 2020 / SEKISUI KASEI

38

Foundation of Value Creation

Contributing to the creation of asustainable society

SEKISUI KASEI’s ESG

Environment
Performance
Data

Environmental Accounting (Japan)

Certification List

Environmental Conservation Costs(Millions of yen)

Category

FY2019FY2018Major activities

Investment

Costs

Investment

Costs1) Costs in business area

As of July 31, 2020

ISO9001 Certification

ISO14001 Certification

Sekisui Kasei Co., Ltd. The 2nd Business Headquarters

Sekisui Kasei Co., Ltd. The 2nd Business Headquarters

Sekisui Kasei Toubu Co., Ltd. Main Plant

Sekisui Kasei Urethane Co., Ltd.

Sekisui Kasei Kanto Co., Ltd. Main Plant

Sekisui Kasei Kanto Co., Ltd. Main Plant

Sekisui Kasei Kanto Co., Ltd. Miho Mfg. Department

Sekisui Kasei Kanto Co., Ltd. Miho Mfg. Department

Sekisui Kasei Gunma Co., Ltd.

Sekisui Kasei Gunma Co., Ltd.

(1) Pollution control

Control measures for air/water quality

51

116

55

115

(2) Global environment

Energy saving

150

11

249

5

Sekisui Kasei Saitama Co., Ltd.

Sekisui Kasei Shiga Co., Ltd.

Shonan Sekisui Kogyo Co., Ltd.

Sekisui Kasei Sakai Co., Ltd.

(3) Recycling

Recycling, industrial waste treatment

5

231

0

309

Sekisui Kasei Yamakyu Co., Ltd.

Sekisui Kasei Tenri Co., Ltd. Main Plant

207

358

304

429

Sekisui Kasei Ohmi Co., Ltd.

Sekisui Kasei Oita Co., Ltd

Sekisui Kasei Shiga Co., Ltd.

Sekisui Kasei Taiwan Co., Ltd.

0

428

0

326

Sekisui Kasei Kansai Co., Ltd Kasai Plant

Sekisui Kasei Tianjin Co., Ltd.

Sekisui Kasei Kansai Co., Ltd Meihan Ogura Plant

Sekisui Kasei Suzhou Co., Ltd.

Sekisui Kasei Tenri Co., Ltd

Sekisui Kasei Shanghai International Trading Co., Ltd.
Sekisui Kasei Shanghai Precision Forming Co., Ltd.

Subtotal2) Up-/down-steam
3) Management costs

Product recycling
Departmental costs associated withintroducing environment management system

0

167

5

164

4) R&D costs

R&D for environmental conservation products

0

47

0

47

Sekisui Kasei Seibu Co., Ltd
Sekisui Kasei Oita Co., Ltd

Proseat GmbH & Co. KG

5) Social Activity cost

Greening, social supports

6

3

0.2

37

Sekisui Kasei Okinawa Co., Ltd

Proseat Schwarzheide GmbH

6) Environmental damage fixing cost

Nature restoration

0

0

0

0

Sekisui Kasei Taiwan Co., Ltd.

Proseat SAS

Sekisui Kasei Tianjin Co., Ltd.

Proseat LLP

213

1,003

309

1,003

Sekisui Kasei Suzhou Co., Ltd.

Proseat Foam Manufacturing, S.L.U.

Sekisui Kasei Shanghai International Trading Co., Ltd.

Proseat Sp.zo.oSekisui Kasei Shanghai Precision Forming Co., Ltd.

Proseat Mladá Boleslav s.r.o

Total

Environmental Conservation Effects(in terms of volume)
Details of effects (Unit)

Economic Effects Related to Environmental
Conservation Measures(Millions of yen)

FY2018FY20191) Effects on costs in business area
(1) Electricity consumption (MWh)121,573

122,595(2) Crude oil consumption (kl)

17,31918,271(3) Total effluent (thousand m3)

3,246

3,268

(4) Amount of COD discharge (t)17162) Effects on Up-/down-steam costs
Amount of recycled polystyrene
foam (t)309

144

Details of effects

FY2018FY20191) C ost reduction throughenergy-saving activities

45372) Income from recycling

453

475

Total

PT. Sekisui Kasei Indonesia
Sekisui Kasei (Thailand) Co.,Ltd.

ISO/TS16949 Certification

Sekisui Kasei Europe B.V.

Sekisui Kasei U.S.A. Inc.

Proseat GmbH & Co. KG Mörfelden-Walldorf Plant

Sekisui Kasei Mexico S.A.de C.V.
Proseat GmbH & Co. KG Espelkamp Plant

498

512

Cost Effectiveness of Environmental
Conservation Activities
FY2018FY2019

49.7%

51.5%

Investment figures are for construction completed during the period. Expense
figures do not include depreciation and amortization

Proseat Schwarzheide GmbH

Eco-Action 21 Certification

Proseat SAS

Sekisui Kasei Yamakyu Co., Ltd.

Proseat LLP
Proseat Foam Manufacturing, S.L.U.

ISO45001 Certification

Proseat Sp.zo.oSekisui Kasei Tenri Co., Ltd

Proseat Mladá Boleslav s.r.oISO13485 Certification

ISO50001 Certification

Sekisui Kasei Co., Ltd. The 2nd Business Headquarters

Proseat GmbH & Co. KG Espelkamp Plant

Sekisui Kasei Kanto Co., Ltd. Miho Mfg. Department

Proseat Schwarzheide GmbH*E
 ven in the case that there is no description, relevant departments within asite may be included.

39

Integrated Report 2020 / SEKISUI KASEIIntegrated Report 2020 / SEKISUI KASEI

40

Foundation of Value Creation

Contributing to the creation of asustainable society

SEKISUI KASEI’s ESG

Human Rights

Society

The Sekisui Kasei Group respects fundamental human rights and takes into consideration thatno one is discriminated on any and all factors such as birth, nationality, ethnicity, creed, religion,
gender, age, disability.

Initiatives to Human Rights

41

Business Promotion Consortium—
Passing on the Founding Spirit to Now

The Sekisui Kasei Group’s stance on human rights appears
in the Compliance Manual and is widely publicized among
the Group’s employees.
To prevent sexual harassment, power harassment, andother abuses that could occur in the workplace, we conduct
several training programs as part of employee education.
In March 2018, Sekisui Kasei published the second edition of the Company’s compliance manual, which included

revisions centered on labor practices and harassment. In
order to expand the understanding of the topics coveredin the second edition, we are implementing e-learning
programs for all Group employees, and with the goal of
fostering an awareness of the importance of compliance wecontinue to remind our employees that the issues of humanrights and harassment are never far away.

Diversity Initiatives

Physical and Mental Healthcare

Based on our founding spirit of “For happiness of people
working for the Company,” as well as our management philosophy of “We, the Sekisui Kasei Group, practice “Zen-in
Keiei” based on respect and mutual trust. We are always innovating, and in our aim of “new happiness”,” we provide
each and every employee, regardless of nationality, age, orgender, with workplaces where they can fully demonstrate
their skills and abilities.
As an initiative commencing from April 2019, we haveformulated a three-year action plan to support the advancement of women and to nurture the next generation,
while also setting the goal of having women account forover 17% of new hires. In addition, we also offer training,
including for women to develop their career paths.
The employment rate for people with disabilities for theentire Group was 1.4% in FY2019. While we have not yet
reached the legal standard, we are sharing examples of
employment (job content, working environment, etc.) atcompanies and business sites that are advancing such employment, and have set the goal of creating a comfortableworking environment for all of our employees.

To support the physical and mental health of employees,
we provide a wide range of services including medical
checkups, medical consultations with an industrial physician, guidance from public health nurses on reversing metabolic syndrome, and hygiene training.
For the mental health, in FY2012, we formulated a basic
policy, the Sekisui Kasei Group’s Mental Health Promotion.
We continually and systematically engage in mental healthsupport activities, including preventive measures.
In FY2016, we held stress-check tests, engaged in activities to prevent lifestyle-related diseases from becoming
severe, and provided health information in order to raise
health awareness among employees. In FY2019, our stresscheck implementation rate was 93.4%.

Integrated Report 2020 / SEKISUI KASEILabor Practices
On the basis of our founding spirit such as “for the happiness of people working for theCompany,” we regard human resources as one of our most important management resources. For this reason, theSekisui Kasei Group is proactive in not only skill development support and fair evaluation of employees, but alsoendeavors to create a good work-life balance and a healthy/safe work environment.

The Business Promotion Consortium is an organization
comprised of all members of the Company (directors aswell as employees), and by positioning as fundamental
mutual respect and trust, it pursues our founding spirit of“the happiness of people working for the Company,” andcorporate growth.
Realizing “the happiness of people working for theCompany” means Group employees working in good
health, both mentally and physically, and through theConsortium we are working to implement our corporate
culture of “Zen-in Keiei” so that employees can voluntarily
participate in management activities and have an awareness of contributing to society through business.

TOPIC

The “Zen-in Keiei” card
The Sekisui Kasei Group has created the “Zen-in
Keiei” card that contains information on the origin of
the Group name “Sekisui,” management philosophy
and code of conduct of Sekisui Kasei, and action
guidelines for the “Zen-in Keiei,” all in a bookletsized card provided to Group employees.

Support for Parents

Information System Dept., Information System Group
Shohei Hayashi

In raising our children, we regularly make use of the childcare
leave system that makes it possible to take time off up until a childreaches age two, and the Company’s system for taking leave in halfday increments for up to five days per year to care for a child.
While offering an ample lineup of systems, this is a work
environment where my coworkers and supervisor have an
understanding that you have small kids at home, and this makes me
feel how easy it is to take time off for things like hurrying to take mykids to the hospital should they suddenly get sick.

Integrated Report 2020 / SEKISUI KASEI

42

Foundation of Value Creation

Contributing to the creation of asustainable society

SEKISUI KASEI’s ESG

SafetySociety

In line with our management policies related to the environment, safety, and quality, we work toassure safety throughout all of our business processes, and to raise the level of trust from society.

Management Policies Related to the Environment, Safety, and Quality
1. Provide high-quality, safe products and services that meet the expectations of each customer
2. In overall business activities, strive to prevent accidents and disasters and ensure the health and safety of all thepeople including employees, business partners, and local residents
3. Consider the environment and safety in every process from product development to use and disposal and strive toconserve the environment
4. Consider the resource and energy savings in product development and production, and promote the recycling ofused products
5. Engage in responsible care activities to improve environment, safety, and quality management and gain further
confidence from society
6. Comply with domestic and overseas laws, regulations and standards established by local governments andindustries, and engage in business activities

FY2019 Policy for Safety-Related Activities• In preparation for large-scale disasters, move
forward on creating robust dynamic systems andentrenching practical training• Along with an increase in new business, advancecreation of an environment that adapts tooperational changes• Eliminate factors of potential risk and proceed withongoing education, and eradication of accidents
and disasters
Key Items
1) Disaster prevention measures forlarge-scale natural disasters• Work to amplify an initial dynamic system in preparation for large-scale natural disasters and other issues• Periodically hold disaster prevention training,
conduct disaster prevention drills that address
regional hazards, and other activities
2) Put in place an environment that addresses
operational changes and conduct education• Implement safety measures for processing facilities
with each new business• Transfer education and preparation of manuals,
protect worker safety, others3) Eliminate factors of potential risk andconduct education• Place emphasis on inherent and engineering-type
measures so as to eradicate potential risks• Thoroughly conduct systematic, periodic safety
education, others

43

Integrated Report 2020 / SEKISUI KASEIFY2019 Initiatives
Disaster Prevention Activities[Disaster prevention measures]•Comprehensive operational drills ofsafety confirmation systems

Safety Initiatives[Safety promotion]• Safety promotion activities carried out byexecutive officers•

Introduction, etc., of safety activities atindividual offices[Fostering a sensitivity to danger]• Evolution of Anzen Dojo (Safety training halls)
that can offer disaster simulations orpractical experience•Identification of near misses (case studies of being
on the brink, but not reaching the level of serious
disaster or accident)

Other safety events held on an as-needed basis,
conduct Safety Awards

Safety-Related Activities

Safety-Related and Health Activities

In addition to safety patrols of each workplace and site patrols by top managers, we carry out the following activities.

We conduct periodic training, safety education and emergency response drills to hone employee abilities and skills,
and maintain/improve safety and health. We set up Anzen
Dojo (Safety training halls), where employees can experience simulated accidents, at eleven locations in Japan andnine locations overseas as educational facilities to raisesafety awareness among individual employees and impart
safety skills.

Safety briefings with the top manager

1

Each top manager has a briefing with every single employee to find out dangerous facilities and procedures. We use
results of the safety response survey of the Japan Industrial
Safety and Health Association.

Appointment of one-day safety managers

2

All Group companies appoint one-day safety managers toincrease awareness and responsibility on safety and findingout unsafe conditions.

Safety meetings by each production section

3

Group companies that have any similar facility and/ or procedure get together to discuss common issues and make/carry out safety measures.

Lost Time Injury Frequency Rates*

Accident Severity Rate*

1.50

0.15

1.00

1.06

1.20

1.15
1.02

0.13

1.20
1.14

0.10

0.10

0.62

0.06

0.50

0.08

0.05

0.22
0

0.07

0.10

0.015

0
2015

0
2016

The Sekisui Kasei Group

2017

2018

0

2019

(FY)

Manufacturers (100 or more employees)

0
2015

2016

The Sekisui Kasei Group

0.005

0

2017

2018

2019

(FY)

Manufacturers (100 or more employees)* L ost Time Injury Frequency Rates: The number of absent employees due
to industrial accidents per 1 million working hours*A ccident Severity Rate: The number of lost workdays per
1,000 working hours

Lost Time Injury Frequency Rates of Manufacturers (100 or more employees):
Excerpted from statistics in the Ministry of Health, Labour and Welfare’s
Survey on Industrial Accidents.

Accident Severity Rate of Manufacturers (100 or more employees):
Excerpted from statistics in the Ministry of Health, Labour and Welfare’s
Survey on Industrial Accidents.

In FY2019, there were increases in both lost time injury frequency rates and the accident severity rate. Given this, in FY2020 we made an“emergency declaration with regard to safety,” and are conducting security activities in pursuit of inherent safety from the three perspectives of hardware, software, and humans.

Integrated Report 2020 / SEKISUI KASEI

44

Foundation of Value Creation

Contributing to the creation of asustainable society

SEKISUI KASEI’s ESG

Contributing to the creation of asustainable society

Consumer Problems

Society

To carry out our responsibility to consumers, the Sekisui Kasei Group pursues safety and reliability
through activities ensuring product safety and correcting the understanding of environmental impact.

Initiative to Quality Assurance

Cooperation with Kyoto Manufacturing Workshop

We operate a customer-focused quality assurance system, applied from the development stage to ensure that all products
and services meet the expectations of our customers.

Basic Stance on Quality Assurance

Chemical Substance Management

The Company’s philosophy is that product quality shouldreflect customer values, not those of the Company, and assuch we carry out upstream management (ensuring productquality at the development stage) in an integrated manner
throughout the entire Group. World Quality Month, held
annually every November, is a campaign conducted to raise
quality awareness, and FY2019 was another year we conducted the campaign within the Group.

The Sekisui Kasei Group has established a green procurement standard for raw materials and with the goalof providing information on chemical substances in
its products, manages all chemical substances under
ChemSHERPA (short for chemical information sharing andexchange under reporting partnership in supply chain), a
domestic information transfer scheme.
In addition, all of our products are labeled according to
GHS classifications and their safety data sheets (SDS) areavailable.

Approach to Product Safety
We are committed to developing products that take into
consideration the environment, safety and health throughout the entire product life cycle, from the research anddevelopment stage to product disposal after use.

Customer
needs

Sales
Activities

Development
Topic
Evaluate/
Decideerties. The learning course is offered to and enjoyed byelementary school students in the city of Kyoto. In cooperation with the 3S Senior Venture Club (a volunteer group of
Sekisui Chemical alumni), the Sekisui Kasei Group provides
support, instructors, and materials for hands-on learning inthese programs.

Recycling

Improve Product Quality at Development Stage

Marketneeds

Sekisui Kasei is working in cooperation with the Kyoto
Manufacturing Workshop courses promoted by the Kyoto
City Board of Education. One of the learning programs isfocused on foamed polystyrene (generally referred to a
Styrofoam), which is quite useful in our lives thanks to its
light weight, thermal insulation, and shock absorbing prop-

Design Review
Environmental Impact
Laws and Regulations

Initialproduction
control

New productMarketevaluation

Preliminary Safety

The Sekisui Kasei Group has been a leader in the recycling
of EPS foam for 49 years, since 1971. We established theJapan EPS Recycling Association (current: JEPSA - Japan
Expanded Polystyrene Association) together with raw material and molding companies in 1991.
Following the acquisition of permission to operate industrial waste disposal businesses in Ibaraki, Nara, Ehime, Oita,
and Okinawa Prefectures as well as wide-area certification

at Sekisui Kasei Seibu (covering Hiroshima, Yamaguchi, andShimane Prefectures), the Group is actively engaged in therecycling of Styrofoam.
Of particular note, the Sekisui Kasei Seibu Ozu facility
acquired permission to operate transport businesses and isundertaking the collection and recycling of foamed polystyrene floats used throughout Shikoku.

Recycling of Expandable Polystyrene Foam (EPS)
100 (%)

Respond to Consumer Problems

89.5
80

Responding to Accidents/Defects on Products

Raising Customer Satisfaction

38.1

60

We developed internal regulations to deal with product accidents. When an accident occurs, responsible departments
take the lead in promptly response based on the regulations, with full consideration of the customers’ perspective,
and related departments cooperate in finding a solution asnecessary. In the case of a serious product accident, responsible departments promptly report to the top management and takes rapid, appropriate response.

The Group attempts to identify customer needs using inquiries via our corporate website and by visits to customers,in our pursuit of customer satisfaction.

40
51.4

20
0
1991

1996

2001

Thermal recycling rate

2006

2011

2016 2017 2018 2019

Material recycling rate

Data source: JEPSA

45

Integrated Report 2020 / SEKISUI KASEIIntegrated Report 2020 / SEKISUI KASEI

46

Foundation of Value Creation

Contributing to the creation of asustainable society

SEKISUI KASEI’s ESG

Governance

Organizational GovernanceIn line with our management philosophy, we will be proactive in the prompt and appropriate disclosure of information while ensuring compliance, reliability, and transparency in management.

Our Basic Approach to Corporate Governance
The Sekisui Kasei Group aims be a plastics solutions company trusted by customers around the world as it fulfills its
social responsibilities to all its stakeholders.
In order to achieve this, we recognize that we will need

Evaluation of the Effectiveness of the Board of Directors
to ensure effective corporate governance, reliability andtransparency in management, and the establishment of amanagement system that is well equipped of responding tochanges in the business environment.

Corporate Governance System
The execution of our business, as well as the supervision
and auditing conducted under our governance system iscarried out by the following organizations.
The Board of Directors, comprised on nine members, including three outside directors, aims to make management
decisions in a rational and efficient manner. All importantmatters related to the company are decided upon by the
Board of Directors after sufficiency deliberation.

In order to clarify the management responsibilities of
directors and establish a management system that can act
swiftly in the face of changes in the business environment,
the term of office for a Director shall be one year.
We have established committees to deliberate on andmanage our compliance, risk management, and CSR issues,
with the goal of promoting the mutual monitoring of compliance, ethics, and CSR.

In order to evaluate the overall effectiveness of the Boardof Directors, we conducted a survey of all the directors aswell as audit & supervisory board members based on theadvice and guidance of a third party, with the results of thesurvey discussed at a Board meeting.
The Board of Directors was judged to be sufficiently
effective, including in regard to its size, composition, oper-

ational status, and in its deliberations. We also recognizedrecent efforts to improve the Company’s governance,
including through the establishment of a remunerationcommittee. At the same time, we identified areas for improvement moving forward, and we will continue to workon further improving the effectiveness of the Board of
Directors based on the results of the evaluations.

Policy on Director Remuneration
The maximum amount for Director remuneration is established through a resolution passed at the shareholders
meeting. The policy on determining Director remunerationis set by the Board of Directors after receipt of the report
on deliberations by the Nomination and Remuneration
Committee, for which a majority of members are independent outside Directors.

Basic Line of Thinking
Creating a system that contributes to enhanced corporate
value and improved earnings over the medium to long term• remuneration system that emphasizes the proportionAof remuneration determined through a comprehensive
analysis, including in regard to performance and progress in achieving objectives•

 larifying the link between Director remuneration andCthe value of Company shares in other to further promote shared value with shareholders

Chart of the Sekisui Kasei Corporate Governance System
Shareholders Meeting
Appointment/Dismissal

Nomination and Remuneration Committee

Consultation

Board of Directors

Appointment/
Dismissal(Inside Board Member: 1) (Outside Board Members: 4)

Report(Inside Board Members: 6) (Outside Board Members: 3)

Audit &
Supervisory Board

Total Members: 5

9 Directors

CSR Integral Committee

President

Compliance andRisk Management Committee

Total Audit & Supervisory
Board Members: 5(Internal Members: 2)(Outside Members: 3)

Cooperation

Audit

Executive Officers: 14
Internal Audit Department

Independent
Accounting Auditor

Appointment/Dismissal

Executive Committee

Audit

Appointment/Dismissal
Audit

Director Remuneration
In FY2019, the Company paid ¥142 million to nine Directors,
including ¥28 million to three outside Directors, and ¥61
million to five members of the Audit and Supervisory Board,
including ¥14 million to three outside Auditors. The amountof remuneration for Directors does not include employee
salaries for those who serve concurrently as employees.

This includes provisions of ¥20 million for Director bonuses (¥14 million for nine Directors, including ¥3 million forthree outside Directors) and ¥6 million for 5 members of
the Audit & Supervisory Committee, including ¥2 million forthree outside Auditors.

Internal Audit

Headquarters, Departments, Subsidiaries

Board of Directors
President

47

Executive Committee

Integrated Report 2020 / SEKISUI KASEICSR Integral
Committee

Compliance andRisk Management

Integrated Report 2020 / SEKISUI KASEI

48

Nomination and Remuneration Committee

Consultation

Board of Directors

Appointment/
Dismissal(Inside Board Member: 1) (Outside Board Members: 4)

Report(Inside Board Members: 6) (Outside Board Members: 3)

Audit &
Supervisory Board

Total Members: 5

9 Directors

Executive Committee
CSR Integral Committee

President

Cooperation

The Sekisui Kasei Group complies with laws and regulations, strives to engage in fair operating
practices, and conducts its business activities according to the highest ethical standards.

Internal Audit

Risk Management System

The Sekisui Kasei Group established the CSR Integral
Committee, with the company president as the chair, asa subcommittee of the Executive Committee and withthe goal of promoting important CSR activities. There
are three further subcommittees, with each focused on aparticular issue.

Board of Directors
President

Executive Committee

Environment
Committee

CSR Integral
Committee

Compliance andRisk Management
Committee

Security
Committee

Quality
Committee

Compliance Promotion
The Sekisui Kasei Group defines compliance as not only
complying with laws and regulations, but also ensuring that
operations within the Sekisui Kasei Group are carried out
in an appropriate manner by complying with related rules
and regulations while acting with integrity based on thevalues, personal ethics, and corporate ethics required by
the society in which we operate. The Sekisui Kasei Group
Compliance Action Guidelines define how we should act asa corporate entity as part of our effort to promote a strong
relationship with society.
With the goal of strengthening and promoting com-pliance throughout the Group, we established theCompliance and Risk Management Committee to ensureongoing compliance with all laws and regulations. The
Compliance and Risk Management Group meets in principle once every six months to discuss compliance issues
within the Sekisui Kasei Group and to report any items forattention to the Executive Committee.
We have also established Compliance Committees andCompliance officers at group companies, depending on
their size, with the goal of further promoting cooperation
within the Group.

SKG Clean Network
To fulfill its corporate social responsibilities, the Sekisui
Kasei Group set up the “SKG Clean Network” as an internalreporting system in line with our effort to build a fair andactive organization.

Users can choose between an internal or external contact point and can issue their report either anonymously or
under their own name.

Internal contact point

External contact point• General Manager of the Legal &Compliance Department• Office of the Compliance andRisk Management Committee

ReportIntegrated Report 2020 / SEKISUI KASEI

Independent
Accounting Auditor

Contributing to the creation of asustainable society

Headquarters, Departments, Subsidiaries

CSR Promotion

49

Audit

Internal Audit Department

Fair Business Practices

Reply(Internal Members: 2)(Outside Members: 3)

Compliance andRisk Management Committee
Executive Officers: 14

GovernanceTotal Audit & Supervisory
Board Members: 5

Appointment/Dismissal

SEKISUI KASEI’s ESG

Audit

Appointment/Dismissal
Audit

Foundation of Value Creation

Request for investigation• Lawyers

Reply

Selection
Person reporting

The Sekisui Kasei Group has established rules and regulations focused on risks related to quality, safety, the environment, and information security, with the relevant committees managing risk in their designated areas and taking
measures aimed at dealing with those risks.
We have also created a Crisis Management Manual andpromoted awareness of it to all officers and employees inorder to prevent risk. Moreover, the Crisis Management
Committee, headed by the Company president, will
manage any crisis in accordance with the Emergency
Response Guidelines.

Information Security
The Sekisui Kasei Group ensures the protection of customer information assets through the implementation of appropriate management procedures based on our information
security policy.
We established the IT Security Committee with the aimof improving information security across the entire Group.
The Committee is responsible to formulating and maintaining rules and procedures ensuring information security,
providing periodic training and e-learnings opportunities toall employees, and ensuring an improved understanding inregard to the handling of information assets.

Respect for Intellectual Property Rights
The Sekisui Kasei Group recognizes intellectual property as
being an important management asset. We have thus set
down a basic policy on intellectual property and are carrying out activities in line with that policy.
Our goal is to promote the sharing of information
through collaboration between the operating and R&D
departments, acquire and maintain intellectual property
beneficial to our business activities, respect the intellectual property rights of others, and lawfully exercise ourintellectual property rights. We actively pursue externalawards for inventions in line with our aim to keep ourinventors motivated.

ReportReply

Integrated Report 2020 / SEKISUI KASEI

50

Foundation of Value Creation

Discussion between Three Outside Directors

Strengthening Governance with Diverse Knowledge

Outside Director

Outside Director

Outside Director

Hiroyuki Bamba

Morio Kubota

Naoto Kitagawa

which consists of the president and four outside people.
This committee is highly transparent and well positioned toresolve a variety of issues.
Mr. Kubota Certainly, we have taken numerous steps in thepast year, and I notice that we have a positive approach to
improving governance ourselves.
At Board of Directors’ meetings, the three outside directors(including me), as well as the three outside corporate auditors, actively convey our opinions to the six internal directors
based on our diverse experience and insights. I believe thatthe governance system at Sekisui Kasei is functioning well interms of monitoring management from multiple perspectives.
During the year, we discussed the Nomination & Remuneration
Committee on many occasions and were able to establish
a system allowing mediation by the Board of Directors after
going through proper processes at the Committee.

Provision of Information to Outside Directors andCollaboration between Outside Directors
Our outside directors held a three-way discussion to explain how they are working to strengthen the Company’s
corporate governance as they fulfill their role of supervising management (execution of business). They also
explain how opinions are exchanged at Board meetings regarding the enhancement of corporate value.

Role of Outside Directors
Mr. Bamba Outside directors have two roles. The first is toprovide impartial, neutral opinions on matters that are commonplace within the Company but may seem questionablefrom the outside. Fortunately, we don’t have any major problems at Sekisui Kasei, but if a problem does arise it will be
more important for us to express our opinions. The secondrole is to supervise the Board of Directors and management.
These are our two main roles, I think.

spent more than 40 years developing new cars in the automotive industry, including 10 years as chief engineer. Duringthat time, I was able to see more than 50 countries aroundthe world with my own eyes as a supervisor of all business
functions—development, production, sales, and service.
I also have 10 years of experience in the design of plastic materials, so I believe that I can provide sound advice on how
Sekisui Kasei can increase its corporate value.

Evaluation of Sekisui Kasei’s Corporate Governance
Mr. Kubota I agree. I have been involved in overseas business activities for 40 years, and my experiences include Asian
project sales, satellite import negotiations, and satellite data
communication services. I’ve also had the opportunity to workwith entities in a wide range of sectors, including government
agencies. Based on these experiences, I provide fresh perspectives on what is considered normal within Sekisui Kasei,
and I also speak from an external monitoring standpoint invarious management decision-making situations.
Mr. Kitagawa My aim is to monitor management frommultiple perspectives, unconstrained by internal norms andtraditions, and to offer my opinions about achieving sustainable development and increasing corporate value. I have51

Integrated Report 2020 / SEKISUI KASEIMr. Bamba Sekisui Kasei is now proactively working toenhance governance, and I know firsthand the speed of reforms being made. We are making improvements in multiple
areas. For example, outside directors now account for onethird of the Board of Directors, and we are also conducting
effectiveness evaluations of the Board. In addition, the Boardof Directors regularly discusses risk management and compliance. By successfully intertwining the horizontal functionsof the CSR Control Committee and the Compliance & Risk
Management Committee with the vertically aligned businessdivisions, we are able to clarify what risks exist and what measures are being taken.
We also have a Nomination & Remuneration Committee,

Mr. Bamba Providing information is a very important partof the decision-making process. At Sekisui Kasei, the threeoutside directors are briefed on the agenda at the same timeprior to each Board of Directors’ meeting, which allows us toexchange opinions in a timely manner. There are times when
we outside directors disagree with each other, but I think wework well together in general.
Mr. Kubota Due to COVID-19, we hold more and more

Board meetings remotely to avoid the “3 Cs” (confined
spaces, crowded places, and close-contact settings), so thenumber of face-to-face meetings has declined. It remains tobe seen how we can achieve a deeper level of interaction
going forward. However, I believe that exchanges of opinion
between outside directors are held with suitable frequency.
Mr. Kitagawa In fiscal 2019, my first year as outside director,
I had planned to visit the Company’s production sites andoffices around the country.
Unfortunately, COVID-19 prevented me from making all
my planned visits. However, I received lots of materials withdetailed explanations about our operations, and I am grateful for that.

Expectations of Sekisui Kasei
Mr. Kubota Recent years have seen growing worldwide
awareness about environmental and social issues, including
the subject of plastics. Against this background, I believe
we are making steady progress in our efforts to address theissues. The important thing is to illustrate how we intend toenhance corporate value in the future
Mr. Bamba I believe the Company is suitably aware of thecurrent risks to the plastics sector. We established our SKG5R concept as a way to address the social issues of global
climate change and ocean pollution as a company that aims
to be a leader in environmental protection.
In the future, I hope that each theme of SKG-5R will be incorporated into specific measures that will solve real problems.

Profile of Hiroyuki Bamba

Profile of Morio Kubota

Profile of Naoto Kitagawa

Apr. 1976
Joined Sumitomo Rubber Industries, Ltd.

Apr. 1977
Joined Okura & Co., Ltd. (until August 1998)

Mar. 2000
Director of Sumitomo Rubber Industries, Ltd.

Mar. 1996
Director of ORBCOMM Japan Planning Limited(now ORBCOMM Japan Limited)

Apr. 1976
Joined Toyota Motor Co., Ltd. (currently Toyota
Motor Corporation) (until June 2006)

Jul. 2003
President and Representative Director of SRISports Limited (currently Sumitomo Rubber
Industries, Ltd.) (until March 2013)

Jun. 2006
Executive Officer of Daihatsu Motor Co., Ltd.

Jun. 2002
Representative Director and Managing Director of
ORBCOMM Japan Limited (until October 2007)

Jun. 2008
Director and Senior Executive Officer of Daihatsu
Motor Co., Ltd.

Mar. 2011
Chairman and Representative Director of SRISports Limited (until March 2015)

Oct. 2017
Counselor of ORBCOMM Japan Limited(until August 2018)

Apr. 2010
Director and Senior Managing Executive Officer
of Daihatsu Motor Co., Ltd. (until June 2015)

Mar. 2015
Counselor of SRI Sports Limited(until December 2017)

Jun. 2018
Director of Sekisui Kasei Co., Ltd.
(current position)

Jun. 2020
Outside Director of Sekisui Kasei Co., Ltd.
(current position)

Jun. 2015
Director of Sekisui Kasei Co., Ltd.
(current position)
Jun. 2017
Outside Director of Kobe Steel, Ltd.
(current position)
Jan. 2018
Advisor of Sumitomo Rubber Industries, Ltd.
(until February 2019)

Integrated Report 2020 / SEKISUI KASEI

52

Foundation of Value Creation

Directors & Auditors

53

Corporate Auditor

Outside Auditor

Outside Auditor

Managing Executive
OfficerManaging Executive
Officer

Senior Managing
Executive Officer

Managing Executive
OfficerManaging Executive
Officer

Outside Auditor

Corporate Auditor

KojiroTakekoshi

Keizo
KousakaToshitaka
Fukunaga

KatsumiSasaki

Tetsuharu
HirotaTetsuya
Ikegaki

Tetsuya
ShiotaHideyukiAsada

Morinobu
Nagahama

KoichiMiyashita

Outside Director

Outside Director

Chief Executive Officer

Outside Director

Naoto
Kitagawa

HiroyukiBamba

MasatoKashiwabara

Morio
KubotaIntegrated Report 2020 / SEKISUI KASEIIntegrated Report 2020 / SEKISUI KASEI

54Net Sales

Other Information

親会社株主に帰属する当期純利益

Operating Income
Net Income Attributable to Ownersof the Parent(Billions of yen)

MD&A

(Billions of yen)(Billions of yen)

136.2

2.3

3.7
2.3

Market Environment

Consolidated Performance

The world economy in FY2019 continued to face an uncertain outlook owing to the prolonged trade friction between
the United States and China, the impact of the United
Kingdom’s decision to withdraw from the European Union
on the European economy, the slowdown in the European
auto business stemming from exhaust gas regulations
and other factors, and structural changes in the global
supply chain. Furthermore, since the beginning of 2020,
the COVID-19 pandemic has caused an unprecedented
situation. The Japanese economic trend has changed frommoderate recovery to severe circumstances due to shrinkage in economic activity from the pandemic. As regards
Japan’s foam plastics industry, falling demand in the fisheries sector, the effects of natural disasters such as typhoons,and increases in logistics costs resulted in an ongoingchallenging operating environment. In addition, addressing
environmental issues including marine debris has further
gained in importance.
Amidst this severe situation, to further strengthen thetransformation implemented in the previous mid-term
management plan, the Group formulated the threeyear FY2019–2021 mid-term management plan, “MakeInnovations Stage-II.” We will steadily drive forward measures to promote business portfolio transformation andexecution of strategies to strengthen earnings structure
while solidifying our position as a leading environmental
company. Our consolidated fiscal year includes the oneyear performance from January 1 to December 31, 2019 of
the Proseat Group acquired in the previous fiscal year.

Net Sales• Capital investment• Net assets
In FY2019, we achieved ¥136.155 billion in net sales (upThe Sekisui Kasei Group (the Company and consolidated
Total net assets as of the end of FY2019 were ¥67.217 billion, rising by ¥256 million year-on-year.
20.9% YoY), ¥3.725 billion in operating income (down 22.1%
subsidiaries) implements initiatives in line with the management plan, making capital investments focusing on renewYoY), ¥3.391 billion in recurring income (down 29.0% YoY),
15 income
16 attributable
17
18 to19owners
15
16
17 •1815161718
19 (FY)(FY) of
Cash 19
flow(FY)
als, repairs, and capacity expansion. The Group’s capitaland ¥2.323 billion in net
Operating Income
Cash and cash equivalents in FY2019 were ¥9.532 billion,
investment in FY2019 totaled ¥5.261 billion. By segment,
the parent (down 25.8% YoY).
Net Income Attributable to Owners of the Parent
falling by ¥1.739 billion year-on-year.
the investment amount was ¥1.807 billion for the Human
The results by segment were as follows.
Life segment and ¥2.767 billion for the Industry segment.
The Human Life segment recorded net sales of ¥58.101(Cash flow from operating activities)
billion (down 10.4% YoY) and segment income of ¥3.280
Cash flow from operating activities in FY2019 saw proceeds• Dividend policy
billion (down 5.0% YoY).
decrease by ¥669 million year-on-year, resulting in ¥6.486
The Company positions the returning of profits to shareThe Industry segment recorded net sales of ¥78.053
holders as an important management issue. Our basic
billion in net cash provided by operating activities, mainly
billion (up 63.5% YoY) and segment income of ¥1.186 billion
NettoSales
Operating
Net Assets
Cashbefore
Flow income
親会社株主に帰属する当期純利益
policy is to distributeprofits in accordance with consolidatdue
the decrease inFree
incometaxes inIncome
this(down 53.4% YoY). Total Assets(Billions(Billionsofyen)(Billions of yen)(Billions of yen)(Billions
of
yen)
Net
IncomeAttributabletoOwnersed financial results as well ofasyen)in consideration of stability offiscal year and the impact of the net decrease in notes andoftheParentFinancial Position
dividends while strengthening our management structure
accounts payable.
149.1(Billions of yen)
136.2
• Assetsand securing internal reserves to prepare for future busi67.2
ness development. We target a consolidated payout ratio
Total assets as of the end of FY2019 were ¥149.103 billion,(Cash flow from investment activities)of 30% to 40%.
falling by ¥4.388 billion year-on-year.
Cash flow from investment activities in FY2019 saw ex1.4
2.3dividend ofpenses decrease by ¥5.576 billion year-on-year, resulting in
In3.7
FY2019, we decided to execute a year-end
Current assets were ¥58.342 billion (previous fiscal year:¥5.129 billion in net cash used in investing activities, mainly¥17 per share upon careful consideration, taking into ac¥64.826 billion), falling by ¥6.484 billion mainly due to a
count our basic policy on dividend of surplus and our dividue to decreased outlays resulting from the acquisition of
decrease in notes and accounts receivable.
dend 2.3
policy. On December 4, 2019, we executed an interim
shares through buyouts and decreased outlays for purchasNon-current assets were ¥90.761 billion (end of previous
es of property, plant and equipment.
dividend of ¥13 per share, resulting in an annual dividend
consolidated fiscal year: ¥88.665 billion), rising by ¥2.096
of ¥30 per share in FY2019. As an outcome, the payout ratio
billion due to an increase in property, plant and equipment(Cash flow from financing activities)
was 65.1% (consolidated payout ratio: 58.5%).
resulting mainly from changes in accounting standards for
While there were proceeds from the issuance of corporate
overseas lease assets.
bonds,
cash
flow
financing
in18FY2019
saw
16 (FY)
17from18
15 19 1618
19 (FY)1516
1718
19 (FY)1516
1718
19 (FY)15
16
17
18 15 19
15 19 16activities(FY) 17(FY) 17
expenses decrease by ¥12.264 billion year-on-year
mainly• Liabilities
Operating Income
Net Income
Attributable to Owners of the Parent
due to the impact of the net decrease (repayment)
in shortTotal liabilities as of the end of FY2019 were ¥81.886 billion,
term loans and a decrease in proceeds from long-term
falling by ¥4.644 billion year-on-year.
loans, resulting in ¥2.568 billion in net cash used in financing activities.

Operating Income
Net Income Attributable to Ownersof the Parent(Billions of yen)

Capital Expenditure
親会社株主に帰属する当期純利益

Total Assets(Billions(Billionsofofyen)yen)

Net Assets(Billions of yen)(Billions of yen)

149.1

(Billions of yen)

136.2

Free Cash Flow

(Billions of yen)

67.2
1.4

5.3
2.3

3.7
2.3

15

16

17

18

19

(FY)

15

16

17

18

19

(FY)

15

16

17

18

19

(FY)

15

16

17

18

19

(FY)

15

16

17

18

19

(FY)

15

16

17

18

19

(FY)

Operating Income
Net Income Attributable to Owners of the Parent

55

Integrated Report 2020 / SEKISUI KASEIIntegrated Report 2020 / SEKISUI KASEI

56

Other Information

Business Risks

Business and Other Risks
Matters relating to business and accounting statuses that
may have a critical impact on the decisions of investors
are described below. Business and other risks facing the
Sekisui Kasei Group may be affected by domestic andinternational economic conditions and are not limited to
the following risks.
1. COVID-19 Risks
We recognize mainly the following risks associated with thenovel coronavirus disease (COVID-19) that could particularly have implications for the Sekisui Kasei Group. Under
the leadership of the President, the Group is making collective efforts to manage and respond to the risks posed by
COVID-19.
a. Infection of Officers and Employees
If officers or employees of the Group become infected with
COVID-19 and a cluster develops within a company, theresulting suspension or delay of operations at the businesssite could cause a significant impact on the performanceand financial condition of the Group.
In order to ensure the health and safety of officers, employees, and their families and to prevent the spread of
COVID-19 within and outside of the Group, it has strengthened measures such as encouraging employees to teleworkor stagger work hours and refraining from travelling between business sites.
b. Prolonged Suspension of Business Partner Operations
and Deterioration of Credit Status
In the case that COVID-19 causes a prolonged suspensionof operations at the global plants of the Group’s business
partners, particularly plants of the automotive, home appliance, and IT industries, the Group’s product net sales will
decrease, which could have a significant impact on the performance and financial condition of the Group. In addition,
if the credit status of the Group’s business partners deteriorates as a result of COVID-19, there may be delays in theGroup’s collection of accounts receivable or the accounts
receivable may be irrecoverable, which could have a significant impact on the performance and financial condition of
the Group.
Therefore, even under these circumstances, the Groupis working to minimize the impact on its performance andfinancial condition by improving productivity and carryingout thorough cost reductions and by implementing factoring and other credit guarantee systems that have alreadybeen introduced.

57

Integrated Report 2020 / SEKISUI KASEIc. Disruption and Stagnation of the Logistics Network
COVID-19 may cause a disruption or stagnation of theworldwide logistics network, resulting in delays in the
procurement of raw materials of products and their components and in the transportation of products and intermediate products, which could have a significant impact on theperformance and financial condition of the Group.
The Group has thus been taking measures from before,such as procuring raw materials from multiple business
partners and decentralizing production bases, in order tominimize the impact.
d. R&D Risks
If the prolongation of the COVID-19 pandemic causes
prolonged restrictions on employees going to the Group’s
research and development (R&D) sites, ongoing R&D activities may face scheduling delays, possibly hindering thedevelopment and launch of new materials and products.
The Group has thus been working for some time tominimize the impact by taking measures, such as increasing the number of R&D sites and ensuring close sharing
of information.
2. Business Risks Unrelated to COVID-19
a. Ensuring Safety
If a major industrial accident were to occur at any of thebusiness locations of the Sekisui Kasei Group, it will result inloss of social trust, costs for dealing with the accident, lossof opportunities from suspending production activities, andclient compensation, which could have a significant impact
on the performance and financial condition of the Group.
The Group has thus established the Safety Committee.
The entire Group is committed to ensuring that there areno accidents and disasters across all of its business activities, setting forth a policy on safety operations and planning and implementing activities, including safety patrols,
safety awareness-raising, safety education, and various
trainings. This Committee plays a central role in compilingcountermeasures for COVID-19 risks.
b. Product Quality Assurance
Unexpected product defects or failures could have a significant impact on the performance and financial conditionof the Group, including product recalls and compensation
for damages.
The Group has thus established the Quality Committee
to strengthen its quality management system. The entire
Group has also set forth a quality management policy. It

plans and implements activities, such as quality audits,quality management training, and quality meetings, giving
consideration to safety and quality in the product development and production stages. In addition, the Group conducts business activities in compliance with quality-related
domestic and international laws and ordinances as well as
regulations and standards set by industry organizations.
Furthermore, it is enrolled in product liability insurance incase a quality problem arises.
c. Environmental Management
If an incident occurs that affects the environment surrounding a plant, such as leakage of a chemical substance oran accident during the process of storing and managing
product materials or manufacturing, the performance andfinancial condition of the Group could be significantly
impacted by loss of trust from clients and local communities, compensation and other associated costs, and loss ofopportunities from production suspension.
The Group has thus established the Environmental
Committee. The entire Group is committed to environmental management, setting forth an environmental management policy and planning and implementing activities,
including environmental audits, environmental education,and various trainings at the respective business sites. In
addition, the Group conducts business activities in compliance with environmental regulations, laws, and ordinances.
d. Economic Situation
The Sekisui Kasei Group’s performance and financial
condition may potentially be affected by a contraction indemand due to economic trends, as well as by changes inthe supply-demand balance and prices due to competition
with rival companies. In particular, the COVID-19 pandemic
has had an enormous impact on global economic activities
since the beginning of 2020. The overall outlook remains
uncertain, including when the virus will be brought undercontrol and the post-COVID-19 economic situation. The
virus is also expected to have a significant impact on theGroup’s performance and financial condition.
The Group is committed to strengthening its sales capabilities, development capabilities, and financial health toensure that it will not be affected by such market economic
conditions and trends in product users and personal consumption. It has formulated the three-year FY2019–2021
mid-term management plan, “Make Innovations Stage-II,”and will steadily drive forward the measures and keep profit
decreases to a minimum.

e. Overseas Business Activities
The Sekisui Kasei Group has production and sales businesses in Asia, the United States, Latin America, and Europe. In
addition to the effects of the COVID-19 pandemic, unexpected changes in laws and regulations, unfavorable political and economic factors, and social disruptions such as
war and political instability may affect the performance andthe financial condition of the Group.
In order to minimize such risks, the Group actively collects information to be ready to adapt to changes in thebusiness environment.
f. Raw Material Market Fluctuations
The Sekisui Kasei Group uses mainly raw materials such as
styrene monomer and polystyrene. If price fluctuations ofsuch raw materials are not passed on to product prices in atimely manner, or if there is a natural disaster or the supplyof raw materials from the supplier is unstable, it may affectthe performance and financial condition of the Group.
In this light, the Group seeks to create favorable conditions for purchases, including raw materials, packing materials, and production equipment. We are also working todiversify suppliers and the raw materials we use and stabilize logistics channels.
g. Foreign Currency Fluctuation Risk
In FY2019, the Sekisui Kasei Group saw its overseas net
sales ratio nearly double from that of the previous fiscal
year (18.1%) to 36.3%. Overseas business items denominated in local currency in the financial statement are impacted
by exchange rate fluctuations when converted into yen.
While risk reduction measures are taken for foreign currency denominated transactions, currency fluctuations thatexceed expectations could affect the Group’s performanceand financial condition.
The Group will consider further measures to minimize therisks, including currency hedging for trade transactions.

Integrated Report 2020 / SEKISUI KASEI

58

Consolidated Financial Statements

Consolidated Balance Sheet
Sekisui Kasei Co., Ltd. and Consolidated Subsidiaries
March 31, 2019 and 2020
Thousands of U.S. dollars(Note 3)

Millions of yen

2020

2019

2020

AssetsLiabilities and net assets

Current assets:

Current liabilities:

Cash and cash equivalents (Note 5)¥ 11,271

¥

9,532

$

87,586

Thousands of U.S. dollars(Note 3)

Millions of yen

Notes and accounts payable (Notes 4 and 5)

2019

2020

2020

¥ 28,288¥ 23,522$

216,1356

7

64

Short-term loans (Notes 5, 8 and 9)

13,562

2,606

23,945

Notes and accounts receivable (Notes 4 and 5)

36,45732,142

295,341

Current portion of long-term loans (Notes 5, 8, 9 and 17)

4,127

3,844

35,321Inventories (Note 7)

13,87213,805

126,849

Accrued expenses

4,419

4,156

38,188Other current assets

3,279

2,913

26,766

Accrued income and enterprise taxes (Note 10)

990

282

2,591

(60)

(59)

(542)

1,056

1,038

9,537

64,82658,342536,083

29

27

248

3,788

2,914

26,77556,26438,393352,779

Long-term debt less current portion (Notes 5, 8, 9 and 17)

17,54029,211

268,409

Liabilities for retirement benefits (Note 11)

3,212

3,446

31,664

Deferred income taxes (Note 10)

6,936

7,208

66,231

Provision for product warranty

190

158

1,451

Other long-term liabilities

2,387

3,467

31,857

Total long-term liabilities

30,26643,493399,641

16,533

16,533

151,915

Capital surplus

16,532

16,532

151,906

Retained earnings (Note 21)

22,56023,524

216,153

Short-term investments (Note 5)Less allowance for doubtful accounts
Total current assets

Provision for bonuses to employees
Provision for bonuses to directors and audit andsupervisory board members
Other current liabilities (Note 4)
Total current liabilities

Long-term liabilities:

Property, plant and equipment (Note 20):
Land (Notes 9 and 13)

21,17621,182

194,633

Buildings and structures (Notes 9 and 16)

46,92147,409435,624

Machinery and equipment

100,115

105,944

973,481Construction in progress
Less accumulated depreciation
Property, plant and equipment, net

2,186

1,493

13,718170,400

176,030

1,617,476(110,135)(114,129)(1,048,690)

60,26561,901

568,786

Net assets:
Shareholders’ equity (Note 12):
Common stock:
Authorized:	124,751,000 shares and 124,751,000 shares at
March 31, 2019 and 2020, respectively
Issued:	46,988,109 shares and 46,988,109 shares at
March 31, 2019 and 2020, respectively

Investments and other assets:

Less treasury stock, at cost:
1,696,864 shares at March 31, 2019
1,697,882 shares at March 31, 2020

(1,425)(1,426)(13,103)

Total shareholders’ equity

54,20055,164

506,882

Net unrealized holding gain on securities (Notes 6 and 14)

8,799

9,226

84,774

1,479

1,479

13,590

Accumulated other comprehensive income:

594

369

3,390

17,05917,679162,446

804

779

7,157

Surplus arising from land revaluation (Note 13)

5,163

5,677

52,163

Translation adjustments (Note 14)

190

(583)

(5,356)

753

699

6,422

Retirement benefits liability adjustments (Notes 11 and 14)

524

399

3,666

4,080

3,705

34,043

Total accumulated other comprehensive income

10,992

10,52096,664

Less allowance for doubtful accounts

(55)

(51)

(468)

1,766

1,531

14,067

Total investments and other assets

28,39928,859265,175

66,96067,217

617,633¥ 153,491¥ 149,103$ 1,370,054¥ 153,491¥ 149,103$ 1,370,054

Investments in unconsolidated subsidiaries and affiliates (Note 5)
Investments in securities (Notes 5 and 6)
Deferred income taxes (Note 10)
Assets for retirement benefits (Note 11)
Software
Other assets

Total assets (Note 20)

Non-controlling interests
Total net assets
Total liabilities and net assets
See notes to consolidated financial statements.

59

Integrated Report 2020 / SEKISUI KASEIIntegrated Report 2020 / SEKISUI KASEI

60

Consolidated Statement of Income

Consolidated Statement of Comprehensive Income

Sekisui Kasei Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2019 and 2020

Sekisui Kasei Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2019 and 2020
Thousands of U.S. dollars(Note 3)

Millions of yen

Net sales (Note 20)

2019

2020

2020

¥ 112,593¥ 136,155$ 1,251,079

85,498105,978

973,793

27,09530,177277,285

22,311

26,451

243,048

4,784

3,725

34,227

Total other comprehensive income

Cost of sales
Gross profit
Selling, general and administrative expenses (Note 15)
Operating income

Thousands of U.S. dollars(Note 3)

Millions of yen

2019

2020

2020

¥ 3,134¥ 2,137$ 19,636(1,368)

426

3,914

Translation adjustments

(45)

(819)

(7,525)Retirement benefits liability adjustments

(654)

(125)

(1,148)(2,068)(517)(4,750)¥ 1,066¥ 1,619$ 14,876¥ 1,060¥ 1,759$ 16,162

5(139)(1,277)

ProfitOther comprehensive income (Note 14):
Net unrealized holding (loss) gain on securities

Comprehensive income
Other income (expenses):
4

5

45

305

361

3,317

0

—

—

(164)

(392)

(3,601)Equity in losses of an affiliate (Note 20)

—

(13)

(119)

Interest income (Note 20)
Dividend income
Equity in earnings of affiliates (Note 20)
Interest expense (Note 20)
Foreign exchange loss, net

(20)

(71)

(652)

Loss on sales or disposal of equipment

(54)

(61)

(560)

Commission paid

(52)

(86)

(790)

Gain on sales of investments in securities (Note 6)

603

1

9

Gain on subsidiary liquidation

—

95

872

Loss on sales of investments in securities

—

(37)

(339)

Loss on impairment of investments in securities

(8)

(8)

(73)

Loss on disaster

(31)

—

—

Loss on office closure

—

(61)

(560)

(356)

—

—

Loss on impairment of property, plant and equipment (Note 16)
Other, net
Profit before income taxes

(25)

(76)

(698)

4,983

3,380

31,057

1,605

1,111

10,208Comprehensive income attributable to:
Owners of parent
Non-controlling interests
See notes to consolidated financial statements.

Income taxes (Note 10):
Current
DeferredProfit

243

132

1,212

1,848

1,243

11,421

3,134

2,137

19,636

(5)

185

1,699

Profit attributable to:Non-controlling interests
Owners of parent

¥

3,129

¥

2,323

$

21,345

See notes to consolidated financial statements.

61

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62

Consolidated Statement of Changes in Net Assets

Consolidated Statement of Cash Flows

Sekisui Kasei Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2019 and 2020

Sekisui Kasei Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2019 and 2020
Millions of yen

Balance at April 1, 2018
Cash dividends
Profit attributable to owners of parent for the year
Decrease due to acquisition of additional shares of
consolidated subsidiary
Acquisition of treasury stock
Other changes
Balance at April 1, 2019
Cash dividends
Profit attributable to owners of parent for the year
Decrease due to acquisition of additional shares of
consolidated subsidiary
Acquisition of treasury stock
Other changes
Balance at March 31, 2020

Common stock

Capital surplus

Retained earnings¥ 16,533——¥ 16,544——¥ 20,699(1,268)3,129¥ (1,425)————
16,533
—
—

(12)
—
—
16,532————
22,560(1,358)
2,323

(0)
—
(1,425)—————¥ 16,533———¥ 16,532———¥ 23,524—(0)—¥ (1,426)

Millions of yen

Balance at April 1, 2018
Cash dividends
Profit attributable to owners of parent for the year
Decrease due to acquisition of additional shares of
consolidated subsidiary
Acquisition of treasury stock
Other changes
Balance at April 1, 2019
Cash dividends
Profit attributable to owners of parent for the year
Decrease due to acquisition of additional shares of
consolidated subsidiary
Acquisition of treasury stock
Other changes
Balance at March 31, 2020

Net
unrealized
holding gain
on securities

Surplusarisingfrom land
revaluation

Translation
adjustments

Retirement
benefits
liability
adjustments¥ 10,168——¥ 1,479
—
—

¥ 235
—
—

¥ 1,179———(1,368)
8,799
—
—

—
—
1,479
—
—

—
(45)
190
—
—

—
(654)
524
—
—

—
—
426
¥ 9,226———¥ 1,479——(773)¥ (583)

Noncontrollinginterests¥

Total net
assets731 ¥ 66,145—(1,268)
—
3,129
—
1,035
1,766
—
—

(12)
(0)
(1,033)
66,960(1,358)
2,323

—
—
—
—
—
(0)
(125)
(235)
(707)
¥ 399 ¥ 1,531 ¥ 67,217

Thousands of U.S. dollars (Note 3)

Balance at April 1, 2019
Cash dividends
Profit attributable to owners of parent for the year
Decrease due to acquisition of additional shares of consolidated
subsidiary
Acquisition of treasury stock
Other changes
Balance at March 31, 2020

Treasury stock,at costCommon stock

Capital surplus

Retained earnings$ 151,915——$ 151,906——$ 207,295(12,478)
21,345$ (13,093)
—
—

—
—
—
$ 151,915———$ 151,906———$ 216,153—(0)—$ (13,103)

Thousands of U.S. dollars (Note 3)

Balance at April 1, 2019
Cash dividends
Profit attributable to owners of parent for the year
Decrease due to acquisition of additional shares of consolidated
subsidiary
Acquisition of treasury stock
Other changes
Balance at March 31, 2020
See notes to consolidated financial statements.

Net
unrealized
holding gain
on securities

Surplusarisingfrom land
revaluation

Translation
adjustments

Retirement
benefits
liability
adjustments$ 80,850——$ 13,590——$ 1,745——$ 4,814
—
—

—
—
3,914
$ 84,774———$ 13,590——(7,102)$ (5,356)

—
—
—
—
—
(0)
(1,148)(2,159)(6,496)$ 3,666 $ 14,067 $ 617,633

Noncontrollinginterests

Total net
assets$ 16,227 $ 615,271—(12,478)—
21,345

Thousands of U.S. dollars(Note 3)

Millions of yen

Treasury stock,at costCash flows from operating activities
Profit before income taxes
Adjustments for:
Depreciation and amortization
Amortization of goodwill
Loss on impairment of property, plant and equipment
Decrease in allowance for doubtful accounts
Interest and dividend income
Interest expense
Equity in (earnings) losses of an affiliate
Increase (decrease) in provision for bonuses to employees
Decrease in provision for product warranty
Changes in assets and liabilities for retirement benefits, net(Gain) loss on sales of investments in securities
Loss on impairment of investments in securities
Loss on sales or disposal of equipment, net
Decrease in notes and accounts receivable
Increase in inventories
Decrease in notes and accounts payable
Other, net
SubtotalInterest and dividends received
Interest paid
Proceeds from casualty insurance claims
Income taxes
Net cash provided by operating activities
Cash flows from investing activities
Increase in short-term investments
Purchases of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchases of investments in securities
Proceeds from sales of investments in securities
Increase in short-term and long-term loans receivableCollection of short-term and long-term loans receivable
Purchases of investments in consolidated subsidiaries and affiliates
Other, net
Net cash used in investing activities
Cash flows from financing activities
Net increase (decrease) in short-term loans
Proceeds from long-term loans
Proceeds from issuance of bond
Repayment of long-term loans
Purchases of treasury stock
Dividends paid
Dividends paid to non-controlling shareholders
Purchase of shares of subsidiary not resulting in change in scope of
consolidation
Other
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year

2019

2020

2020

¥

4,983

¥ 3,380$ 31,057

4,517
21
356
(12)
(310)
164
(0)
32
(54)
(830)
(603)
8
51
2,419
(597)
(2,685)
1,136
8,596
310
(184)
155
(1,721)
7,156

6,071
168
—
(2)
(366)
392
13
(17)
(31)
(452)
36
8
51
3,971
(120)
(4,258)
(978)
7,865
366
(432)
304
(1,616)
6,486

55,7841,543—(18)(3,363)
3,601
119
(156)
(284)
(4,153)330
73
468
36,488(1,102)(39,125)
8,986
72,2683,363(3,969)2,793(14,848)
59,597(1)(8,077)
37
(4)
893
(4)
22
(3,565)(8)(10,706)(1)(5,930)
109
(6)
166
(3)
468
—
65
(5,129)(9)(54,488)
1,001
(55)
1,525
(27)
4,300
—
597
(47,128)

4,714
13,675—(7,181)(0)(1,266)(2)(10,138)
9,033
7,000
(5,104)(0)(1,357)(2)(93,154)
83,00164,320(46,898)(0)(12,468)
(18)

(58)
(185)
9,695

—
(1,999)(2,568)—(18,368)(23,596)

8
6,154
5,117
¥ 11,271(527)(1,739)11,271¥ 9,532(4,842)(15,979)
103,565$ 87,586

See notes to consolidated financial statements.

63

Integrated Report 2020 / SEKISUI KASEIIntegrated Report 2020 / SEKISUI KASEI

64

Notes to Consolidated Financial Statements
Sekisui Kasei Co., Ltd. and Consolidated Subsidiaries
March 31, 2020

1. Significant Accounting Policies(a) Basis of Preparation
The consolidated financial statements of Sekisui Kasei Co., Ltd. (the“Company”, formerly named “Sekisui Plastics Co., Ltd.”) and its consolidated subsidiaries are prepared on the basis of accounting principles
generally accepted in Japan, which are different in certain respects as
to the application and disclosure requirements of International Financial
Reporting Standards (“IFRS”), and have been compiled from the consolidated financial statements prepared by the Company as required by the
Financial Instruments and Exchange Act of Japan.
In preparing the consolidated financial statements, certain reclassifications and rearrangements have been made to the consolidated financial statements issued domestically in order to present them in a format
which is more familiar to readers outside Japan.
Certain reclassifications of previously reported amounts have been
made to conform the consolidated financial statements for the year ended March 31, 2019 to the 2020 presentation. Such reclassification had noeffect on consolidated profit.
As permitted by the Financial Instruments and Exchange Act of Japan,
amounts of less than one million yen have been omitted. Consequently,
the totals shown in the consolidated financial statements do not necessarily agree with the sum of the individual yen and U.S. dollar amounts.

exchange in effect at the respective transaction dates.
All monetary assets and liabilities denominated in foreign currencies
are translated into yen at the rates of exchange in effect at the balance
sheet date and gain or loss on each translation is credited or charged
to income.

(b) Principles of Consolidation and Accounting for Investments in
Unconsolidated Subsidiaries Affiliates
The consolidated financial statements include the accounts of theCompany and its 40 significant consolidated subsidiaries (collectively, the “Group”) for the years ended March 31, 2019 and 2020. The
Company has applied the equity method to its investment in one significant affiliate for the purpose of the consolidated financial statements forthe years ended March 31, 2019 and 2020.
The principles of consolidation are to include significant subsidiaries
over which substantial control is exerted either through majority ownership of voting stock and/or by other means. In addition, significant
affiliates, over which the Group exercises substantial control in various
ways, are accounted for by the equity method.
Other subsidiaries and affiliates are not significant in terms of their total assets, profit or loss, and retained earnings. Accordingly, these othersubsidiaries and affiliates have not been consolidated nor are they accounted for by the equity method. Investments in such subsidiaries andaffiliates are stated at cost unless there has been a permanent decline in
the value of such investments. In such case, the Company is required towrite down the investments.
All significant intercompany balances and transactions have been
eliminated in the consolidated financial statements.
Goodwill arising from the difference between the purchase cost andthe underlying equity in net assets at the respective dates of acquisitionis amortized by the straight-line method over the estimated period of
its effect.
Five overseas consolidated subsidiaries whose fiscal year end is
December 31 have been consolidated using provisional financial statements at March 31, 2020.
For nine overseas consolidated subsidiaries whose fiscal year ends
on December 31, necessary adjustments have been made for any significant intercompany transactions which took place during the period
between the year end of the overseas consolidated subsidiaries and theyear end of the Company.

(g) Securities
Securities are classified into three categories: trading securities, held-to-maturity debt securities and other securities. Trading securities, consisting ofdebt and marketable equity securities are stated at fair value. Gain or loss,
both realized and unrealized, is credited or charged to income. Held-tomaturity debt securities are stated at amortized cost. Marketable securities
classified as other securities are carried at fair value with any changes in
unrealized holding gain or loss, net of the applicable income taxes, reported as a separate component of accumulated other comprehensive
income. Non-marketable securities classified as other securities are carriedat cost determined by the moving average method.

(c) Foreign Currency Translation
The financial statements of the overseas consolidated subsidiaries aretranslated into yen at the rates of exchange in effect at the balance sheet
date except that the components of net assets excluding non-controllinginterests are translated at their historical exchange rates. Differences resulting from translating the financial statements of the overseas consolidated subsidiaries are not included in the determination of profit but arereported as translation adjustments and non-controlling interests in net
assets in the consolidated balance sheet.
Revenue and expense items arising from transactions denominatedin foreign currencies are generally translated into yen at the rates of65

Integrated Report 2020 / SEKISUI KASEI(d) Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits with banks
withdrawable on demand and short-term investments with a maturity of
three months or less when purchased which can easily be converted to
cash and are subject to little risk of change in value.
(e) Allowance for Doubtful Accounts
The Group provides an allowance for doubtful accounts at an amountcalculated based on their historical experience of bad debts on ordinary
receivables plus an additional estimate of probable specific bad debts
from customers experiencing financial difficulties.
(f) Inventories
Inventories are stated at lower of cost or net selling value, cost being
determined by the moving average method.

(h) Property, Plant and Equipment (except for leased assets)
Property, plant and equipment are stated at cost.
Depreciation of buildings and structures is calculated by the straightline method over the estimated useful lives of the respective assets. Depreciation of other property, plant and equipment is principally
computed by the straight-line method, except for certain subsidiaries
which compute depreciation by the declining-balance method over theestimated useful lives of the respective assets.
The estimated useful lives of major property, plant and equipment
are summarized as follows:
Buildings
Machinery

principally 31 to 38 years
principally 8 years

Significant renewals and additions are capitalized at cost. Maintenanceand repairs are charged to income as incurred.
(i) Leased Assets (included in other assets)
Leased assets under finance lease contracts that do not transfer ownership to the lessee are depreciated to a residual value of zero by thestraight-line method using the term of the contract as the useful life.
(j) Income Taxes
Income taxes are calculated on taxable income and charged to incomeon an accrual basis. Certain temporary differences exist between taxable
income and income reported for financial statement purposes which enter into the determination of taxable income in a different period. The
Group has recognized the tax effect of such temporary differences in the
consolidated financial statements.
The Company and certain domestic consolidated subsidiaries haveapplied the consolidated taxation system, which allows companies tofile tax returns based on the combined profits or losses of the parent
company and wholly owned domestic subsidiaries.

(Treatment of Tax Effect Accounting for Transition from Consolidated
Taxation System to the Group Tax Sharing System)
As an alternative to applying Article No.44 of “Partial Amendments to
Accounting Standard for Tax Effect Accounting” (Accounting Standards
Board of Japan (“ASBJ”) Guidance No. 28, February 16, 2018), theCompany and certain domestic consolidated subsidiaries that adopted the consolidated taxation system calculate deferred tax assets anddeferred tax liabilities based on provisions stipulated in related tax
laws before revision for certain items remeasured from the single tax
payment system at the time of transition to the group tax sharing system based on provisions in “Act for Partial Amendments to Income Tax
Act” (Act No.8) in accordance with Article No.3 of “Practical Solution
on the Treatment of Tax Effect Accounting for the Transition from theConsolidated Taxation System to the Group Tax Sharing System” (ASBJ
PITF No.39, March 31, 2020).
(k) Provision for Bonuses to Employees
Provision for bonuses to employees is provided at the estimated amountof bonuses to be paid to the employees in the following year which has
been allocated to the current fiscal year.
(l) Provision for Bonuses to Directors and Audit and Supervisory
Board Members
Provision for bonuses to directors and audit and supervisory board
members is calculated based on the estimated amount of bonuses tobe paid to directors and audit and supervisory board members in thefollowing year which has been allocated to the current fiscal year.
(m) Provision for Product Defect Compensation
Provision for product warranty is provided based on an estimatedamount which is expected to be incurred subsequent to the balance
sheet date.
(n) Retirement Benefit Plansi) Method of attributing expected benefits to each period
The retirement benefit obligation for employees is attributed to eachperiod by the benefit formula method over the estimated years ofservice of the eligible employees.
ii) Amortization method of actuarial gain or loss
Actuarial gain or loss is amortized from the year following the year inwhich the gain or loss is recognized by the straight-line method overa period of 5 years, which is within the estimated average remaining
years of service of the eligible employees.
(o) Software (except for leased assets)
Expenditures relating to computer software developed for internal use
are charged to income when incurred, except if these are deemed tocontribute to the generation of future income or cost savings. Such expenditures are capitalized as assets and amortized by the straight-line
method over their respective estimated useful lives, generally a periodof 5 years.
(p) Research and Development Costs
Research and development costs are charged to income when incurred.
(q) Hedge Accounting
The Company has entered into interest-rate swaps to hedge the risk ofinterest rate and foreign currency exchange rate fluctuations on longterm debt denominated in foreign currencies.
i) Hedge accounting method
Interest-rate swaps that meet special matching criteria are notremeasured at market value, but the differential paid or received
under the swap agreements is recognized and included in interest
expense or income, and the long-term debt hedged by the swap by
the swap agreements is translated at the swap contract rate (“special treatment”).

ii) Hedging instruments and hedged items
Hedging instruments: Hedged items:
Interest-rate swaps	Long-term loans denominated inforeign currenciesiii) Hedging policy
Derivative transactions are used to hedge the risk of interest-rate fluctuation in accordance with the Company’s risk management policy.
iv) Assessing hedge effectivenessWith regard to interest-rate currency swaps accounted for by the special treatment evaluation of hedge effectiveness is omitted.
(r) Distribution of Retained Earnings
Under the Corporation Law of Japan, the distribution of retained earnings with respect to a given financial period is made by resolution of theshareholders at a general meeting held subsequent to the close of thefinancial period. The accounts for that period do not, therefore, reflect
such distributions (see Note 21).
(s) Change in Accounting Policy(Application of IFRS 16 “Leases”)
The overseas consolidated subsidiaries applying IFRS accounted for by
the equity method have adopted IFRS 16 Leases (issued on January 13,
2016; hereinafter “IFRS 16”) from the fiscal year ended March 31, 2020. In
applying IFRS 16, the overseas consolidated subsidiaries, as lessees,
principally recognize all lease transactions on their balance sheets as assets and liabilities. The Company has applied the modified retrospective
approach with the cumulative effect of initially applying the standard isrecognized as an adjustment to equity at the date of initial application.
As a result of the adoption of this accounting standard, non-current
assets increased by ¥2,700 million ($24,809thousand), current liabilities
increased by ¥428 million ($3,932thousand), and non-current liabilities
increased by ¥2,303 million ($21,161thousand) at the end of the current
fiscal year; however, the impacts on the consolidated statement of income for the current fiscal year and the beginning balance of retained
earnings are immaterial.
(t) Accounting Standards Issued but Not Yet Effective(Accounting Standard and Implementation Guidance for Revenue
Recognition)
On March 31, 2020, the ASBJ issued “Accounting Standard for Revenue
Recognition” (ASBJ Statement No. 29) and “Implementation Guidanceon Accounting Standard for Revenue Recognition” (ASBJ Guidance
No. 30).
i) Overview
The International Accounting Standards Board (the “IASB”) and the
Financial Accounting Standards Board (the “FASB”) in the UnitedStates co-developed comprehensive accounting standards for revenue recognition and issued “Revenue from Contracts with Customers”(issued as IFRS 15 by the IASB and Topic 606 by the FASB) in May
2014. The ASBJ developed comprehensive accounting standards onrevenue recognition and issued them in conjunction with the implementation guidance based on the fact that IFRS 15 was applied fromfiscal years starting on or after January 1, 2018 and Topic 606 was applied from fiscal years starting after December 15, 2017.
As the basic policy in developing accounting standards for revenue
recognition, the ASBJ defined the accounting standard starting withincorporating the basic principle of IFRS 15 from a standpoint of comparability between financial statements, which is one benefit of ensuring consistency with IFRS 15. Furthermore, the ASBJ added alternative
accounting treatment without impairing comparability when there arematters to be considered related to accounting practices, etc. common in Japan.
ii) Scheduled date of adoption
The Company expects to adopt the accounting standard and implementation guidance from the beginning of the fiscal year ending
March 31, 2022.

Integrated Report 2020 / SEKISUI KASEI

66

iii) Impact of the adoption of accounting standard and implementation
guidance
The Company is currently evaluating the effect of the adoption ofthis accounting standard and implementation guidance on its consolidated financial statements.
(Accounting Standard and Implementation Guidance for Fair Value
Measurement)i) Overview
On July 4, 2019, the ASBJ issued “Accounting Standard for Fair Value
Measurement” (ASBJ Statement No.30), “Accounting Standard for
Measurement of Inventories” (ASBJ Statement No.9), “AccountingStandard for Financial Instruments” (ASBJ Statement No.10),“Implementation Guidance on Accounting Standard for Fair Value
Measurement” (ASBJ Guidance No.31), and “Implementation Guidance
for Disclosures on Estimated Fair Value of Financial Instruments” (ASBJ
Guidance No.19). The ASBJ tried ensuring consistency between
Japanese standards and international standards mainly for guidanceand disclosures on estimated fair value of financial instruments and issued “Accounting Standard for Fair Value Measurement”, etc. basedon the fact that the IASB and the FASB in the United States had alreadyissued almost identical detailed guidance on fair value measurement(issued as IFRS 13 “Fair Value Measurement” by the IASB and Topic 820“Fair Value Measurement” in the Accounting Standards Codification by
the FASB).
As the basic policy in developing accounting standards for fair value measurement, the ASBJ incorporated basically all of the mattersdefined in IFRS 13 from a standpoint of increasing comparability offinancial statements among domestic and foreign companies by using a unified measurement method. Furthermore, the ASBJ definedalternative accounting treatment to the individual matters without
impairing comparability considering related to accounting practices,
etc. common in Japan.
ii) Scheduled date of adoption
The Company expects to adopt the accounting standard and implementation guidance from the beginning of the fiscal year ending
March 31, 2022.
iii) Effect of the adoption of accounting standard and implementation
guidance
The Company is currently evaluating the effect of the adoption of theaccounting standard and the implementation guidance on its consolidated financial statements.

(Accounting Standard for Disclosure of Accounting Estimates)i) Overview
On March 31, 2020, the ASBJ issued “Accounting Standard forDisclosure of Accounting Estimates” (ASBJ Statement No.31).
The ASBJ received certain requests on “Factors of Uncertainty on
Accounting Estimates” that the IASB requires to be disclosed as defined in the International Accounting Standards 1 “Presentation of
Financial Statements” (“IAS 1”) Topic 125, issued by the IASB in 2003.
The requests require the ASBJ to consider requirement of disclosures
on “Factors of Uncertainty on Accounting Estimates” in the notes asuseful information for users of financial statements and the ASBJ todeveloped and issued the accounting standard for disclosures on accounting estimates (“this accounting standard”).
As the basic policy in developing this accounting standard, whichreferred to IAS 1 Topic 125, the ASBJ indicated the principle (purposeof disclosures) instead of expanding individual notes and the entity
will determine the specific contents of disclosures considering the
purpose of disclosures. Furthermore, the ASBJ added alternative accounting treatment without impairing comparability when there arematters to be considered related to accounting practices, etc. common in Japan.
ii) Scheduled date of adoption
The Company expects to adopt the accounting standard from theend of the fiscal year ending March 31, 2021.
(Accounting Standard for Accounting Policy Disclosures, Accounting
Changes and Error Corrections)i) Overview
On March 31, 2020, the ASBJ issued “Accounting Standard forAccounting Policy Disclosures, Accounting Changes and Error
Corrections” (ASBJ Statement No.24). Under the proposal to consider expanding the notes about “Principles and Procedures of
Accounting Treatment Adopted in the Situations of Uncertainty of
the Related Accounting Standards,” the ASBJ made the necessary
revisions and issued accounting standard for accounting policies disclosures, accounting changes and error corrections.
In considering the expansion of the notes about “Principles andProcedures of Accounting Treatment Adopted in the Situations ofUncertainty of the Related Accounting Standards,” Annotations on
the Accounting Principles (Notes 1-2) was incorporated so as not toaffect conventional accounting practices when the related accounting standards were clear.
ii) Scheduled date of adoption
The Company expects to adopt the accounting standard from theend of the fiscal year ending March 31, 2021.

4. Notes and Accounts Receivable, Notes and Accounts Payable and Other Current Liabilities
The balance sheet date for the year ended March 31, 2019 fell on a bankholiday. Consequently, notes receivable of ¥1,062 million and notes andaccounts payable and other current liabilities of ¥721 million with a due

date of March 31, 2019 were included in the respective balances in the
consolidated balance sheet at March 31, 2019 and were settled on thenext business day.

5. Financial Instruments(a) Status of Financial Instruments
The Group manages fund surpluses only through short-term financial
assets. In addition, the Group currently raises capital through bank borrowings and bond. Derivative transactions are not used for speculation,but only used to hedge various risks as addressed below.
In accordance with the internal business management rules of theCompany for managing credit risk arising from notes and accounts receivable, each business section and the sales supervisory department
monitor credit worthiness of their customers periodically, and monitor
due dates and outstanding balances. Subsidiaries of the Company also
manage credit risk in accordance with the Company’s business management rules.
Investments in securities are exposed to market risk. Those securities
are composed of mainly the shares of common stock of other companies with which the Group has business relationships. The finance andaccounting department, on a quarterly basis, reviews the fair value ofsuch financial instruments.
Trade payables, such as notes and accounts payable, have payment
due dates within one year.
Short-term loans are raised mainly in connection with operating activities, and long-term loans are taken out principally for the purpose of

making capital investments. Loans with variable interest rates is exposed
to interest-rate fluctuation risk. Interest-rate swaps are used to hedge therisk of interest rate and foreign currency exchange rate fluctuations on
the Group’s long-term loans denominated in foreign currencies. Bond isissued for the purpose of paying off loans and raising working capital.
Derivative transactions are not used for speculation, but only used to
manage various market risks and to reduce those risks.
Further information regarding the method of hedge accounting canbe found in Note 1(q).
Trade payables, short-term loans and long-term loans are exposed
to liquidity risk. The Company makes efforts to facilitate financing andensure diverse sources of financing. Each component of the Group also
prepares monthly cash flow plans to manage liquidity risk.
(b) Fair Value of Financial Instruments
Carrying value, fair value and the difference between them for financial
instruments on the consolidated balance sheets as of March 31, 2019and 2020 are shown in the following table. The following table does notinclude financial instruments for which it is extremely difficult to determine the fair value.

Millions of yen

2020

2019
Carrying
value

Fair value

Cash and cash equivalents
Short-term investments
Notes and accounts receivable
Investments in securities
Total assets¥ 11,271
6
36,457
17,007¥ 64,742¥ 11,271
6
36,457
17,007¥ 64,742

Notes and accounts payable
Short-term loans
BondLong-term loans*
Total liabilities¥ 28,288
13,562—
21,668¥ 63,519¥ 28,288
13,562—
21,756¥ 63,608

Difference

Carrying
value

Fair value

Difference

¥—
—
—
—
¥—

¥ 9,532
7
32,142
17,627¥ 59,310¥ 9,532
7
32,142
17,627¥ 59,310

¥

¥—
—
—
88
¥ 88

¥ 23,522
2,606
7,000
26,056¥ 59,184¥ 23,522
2,606
6,971
26,235¥ 59,334¥

2020
financial position and operating results from the next period. Even
though it is difficult to anticipate the effect because there are many
uncertainties surrounding COVID-19, the Company estimated the considerations of impairment loss on fixed assets and recoverability of deferred tax assets based on the assumption that such effects would last
until the end of September 2020 and December 2020, respectively, atthe end of the current fiscal year.
In addition, it is possible that a loss may be recognized if the resultsin the future are different from the above estimates and assumptions.

3. U.S. Dollar Amounts
The U.S. dollar amounts in the consolidated financial statements havebeen translated from yen solely for convenience and, as a matter ofarithmetic computation only, at ¥108.83 = U.S. $1.00, the exchange rate
prevailing on March 31, 2020. This translation should not be construed

67

Integrated Report 2020 / SEKISUI KASEI

—
—
(28)
178
¥ 150

Thousands of U.S. dollars

2. Additional Information
The outbreak of COVID-19 has had some impact on the consolidated
financial statements with the effects different depending on each segment. Regarding the “Human Life” segment, even though domestic
demand of packing materials used in tourism-related applications has
been decreasing, the demand for takeaway packaging for home-use
has been expanding. Regarding the “Industry” segment, it is assumed
that the occupancy rate for factories related to automotive and electronics in domestic and overseas countries would decrease. It is also
assumed that these matters including the assumptions for accounting estimates would be expected to have an effect on the Company’s

¥

—
—
—
—
—

as a representation that the yen amounts have been, could have been,or could in the future be, converted into U.S. dollars at the above or any
other rate.

Carrying
value

Fair value

Cash and cash equivalents
Short-term investments
Notes and accounts receivable
Investments in securities
Total assets$ 87,586
64
295,341
161,968$ 544,978$ 87,586
64
295,341
161,968$ 544,978$Notes and accounts payable
Short-term loans
BondLong-term loans*
Total liabilities$ 216,135
23,94564,320239,419$ 543,820$ 216,135
23,94564,054
241,064$ 545,198$

Difference

$

—
—
—
—
—

—
—
(257)
1,635
$ 1,378* Includes current portion of long-term loans of ¥4,127 million and ¥3,844 million ($35,321 thousand) at March 31, 2019 and 2020, respectively.

Integrated Report 2020 / SEKISUI KASEI

68

Methods to determine the estimated fair value of financial instruments and other matters related to securities are as follows:
Assets:	Cash and cash equivalents, short-term investments and notes andaccounts receivable:	Since cash and cash equivalents, short-term investments and notes
and accounts receivable are settled in a short period of time, theircarrying value approximate the fair value.
Investments in securities:
	The fair value of other investments in securities is based on quoted
market prices. For information on securities classified by purpose ofholding, please refer to Note 5.
Liabilities:
Notes and accounts payable and short-term loans:	Since notes and accounts payable and short-term loans are settled in ashort period of time, their carrying value approximate the fair value.

7. Inventories

	Long-term loans:	The fair value of long-term loans is based on the present value ofthe total of principal and interest discounted by the interest rate tobe applied if similar new borrowings were entered into. The fair value of long-term loans with variable interest rates hedged with interest-rate swaps which qualify for hedge accounting and meet special
matching criteria is calculated by discounting the sum of principal
and interest, including the difference paid or received under theswap agreements, with the rate which would be applied if similar
new borrowings were entered into.

Inventories at March 31, 2019 and 2020 were composed of the following:

Unlisted equity securities in the amounts of ¥645 million and ¥421
million ($3,868 thousand) at March 31, 2019 and 2020, respectively, are
not included in investments in securities in the preceding table since
it is extremely difficult to determine their fair value at March 31, 2019and 2020.

8. Short-Term Loans and Long-Term Debt

Millions of yen

Merchandise, finished goods and semi-finished goods
Work in process goods
Raw materials and supplies
Total

Short-term loans at March 31, 2019 and 2020 represented loans in theform of deeds and overdrafts at interest rates ranging from 0.18% toThousands of U.S. dollars

2019

2020

2020

¥ 7,937
1,840
4,094¥ 13,872¥ 8,216
1,722
3,866¥ 13,805$ 75,493
15,82235,523$ 126,849

8.2% and from 0.18% to 6.47% per annum, respectively.

Long-term debt at March 31, 2019 and 2020 were composed of the following:

Bonds:
	The fair value of bonds is determined based on their market prices.

Millions of yen

2020

2020

¥ 18,316¥ 20,067$ 184,388

1,272

1,080

9,922

1,015
86
977
—
21,668(4,127)¥ 17,540

4,090
—
818
7,000
33,056(3,844)¥ 29,211

37,581—
7,516
64,320303,739(35,321)$ 268,409

The redemption schedule for long-term debt are disclosed in Note 8.

Unsecured loans from banks and insurance companies, payable in Japaneseyen, at rates ranging from 0.095% to 0.60% and variable rates
Unsecured loans from banks, payable in U.S. dollars,
at rates ranging from 2.48% to 3.40%
Unsecured loans from banks, payable in Euro,at rates ranging from 0.65% to 0.68% and variable rates
Unsecured loans from banks, payable in Taiwan dollars, at a rate of 1.40%
Unsecured loans from banks, payable in Baht, at a rate of 2.575%
Unsecured bonds, payable in yen at rate of 0.5%, due 2026
Total
Less current portion

6. Investments in Securities

The aggregate annual maturities of long-term debt subsequent to March 31, 2020 are summarized as follows:

The redemption schedule at March 31, 2020 for deposits and notes and accounts receivable is summarized as follows:
Millions of yen

Thousands of U.S. dollars

2020

2020

Within 1 year

Within 1 year

¥ 9,517
32,142¥ 41,660$ 87,448
295,341$ 382,798

Deposits
Notes and accounts receivable
Total

Thousands of U.S. dollars

2019

Marketable securities classified as other securities at March 31, 2019 and 2020 were as follows:
Millions of yen

2020

2019

Securities whose carrying value exceeds their acquisition cost:
Equity securities
Securities whose acquisition cost exceeds their carrying value:
Equity securities
Total

Acquisition
cost

Carrying
value

Unrealized
holding gain
(loss)

Acquisition
cost

Carrying
value

Unrealized
holding gain
(loss)¥ 4,566¥ 17,007¥ 12,440¥ 4,338¥ 17,627¥ 13,2890¥ 4,566

0¥ 17,007(0)¥ 12,4400¥ 4,3380¥ 17,627(0)¥ 13,289

Millions of yen

Thousands of U.S. dollars

Years ending March 31,

2020

2020

2021
2022
2023
2024
2025
2026 and thereafterTotal¥ 3,844
5,039
8,109
4,467
3,070
8,524
¥ 33,056$ 35,321
46,301
74,51041,04528,20978,323$ 303,739

9. Pledged Assets and Secured Liabilities
Thousands of U.S. dollars

2020
Acquisition
cost

Securities whose carrying value exceeds their acquisition cost:
Equity securities
Securities whose acquisition cost exceeds their carrying value:
Equity securities
Total
Unlisted equity securities other than securities of affiliates in the amountof ¥51 million and ¥51 million ($468 thousand) at March 31, 2019 andCarrying
value

Assets pledged as collateral for liabilities as of March 31, 2019 and 2020 are summarized as follows:

Unrealized
holding gain
(loss)$ 39,860$ 161,968$ 122,107

0$ 39,860

0$ 161,968(0)$ 122,107

2020 are not included in equity securities in the above table since it is extremely difficult to determine their fair value at March 31, 2019 and 2020.

Millions of yen

2019
Land
Buildings

¥ 166
54
¥ 220

Thousands of U.S. dollars

2020
¥ 166
51
¥ 217

2020
$ 1,525468$ 1,993

Liabilities secured by these assets as collateral consist of ¥31 million and ¥19 million ($174 thousand) of short-term loans and ¥37 million and ¥17
million ($156 thousand) of long-term loans at March 31, 2019 and 2020, respectively.

The proceeds from sales of, and gross realized gain on investments in securities for the years ended March 31, 2019 and 2020 are summarized as follows:
Millions of yen

2019
Proceeds from sales
Gross realized gain

69

Integrated Report 2020 / SEKISUI KASEI

¥ 895
603

Thousands of U.S. dollars

2020
¥1
1

2020
$9
9

Integrated Report 2020 / SEKISUI KASEI70

Note 1: Tax loss carryforwards and related deferred tax assets as of March 31, 2019 and 2020 will expire as follows:

10. Income Taxes
Income taxes applicable to the Company and its domestic subsidiaries
consist of corporation, enterprise and inhabitants’ taxes. The statutory

tax rate in Japan for the years ended March 31, 2019 and 2020 were, in
the aggregate, approximately 30.6%.

A reconciliation of the statutory and effective tax rates for the years ended March 31, 2019 and 2020 as a percentage of profit before income taxes
was presented as follows:

2020

2019
Statutory tax rate
Non-deductible expenses
Impairment loss on property, plant and equipment
Acquisition related cost
Per capita portion of inhabitants’ taxes
Tax credit of research and development costs
Loss on impairment of investments in securities
Tax rate differences of overseas subsidiaries
Amortization of goodwill
Gain on liquidation of subsidiaries
Other
Effective tax rate

30.6%
1.7
—
0.3
0.9
(4.8)
0.1
9.6
1.5
(3.1)
0.0
36.8%

30.6%
2.3
2.2
1.9
0.6
(0.6)
0.1
(0.1)
0.1
—
0.0
37.1%

Deferred tax assets:
Liabilities for retirement benefits
Tax loss carryforwards
Provision for bonuses to employees
Unrealized profit on intercompany transactions
Impairment loss on property, plant and equipment
Loss on devaluation of inventories
Acquisition related cost of acquired companies
Other
Gross deferred tax assets
Valuation allowance for tax loss carryforwards
Valuation allowance for temporary differences
Valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Surplus arising from land revaluation
Net unrealized holding gain on securities
Gain on marketable securities contributed to employees’ retirement benefit trust
Assets for retirement benefits
Customer related assets
Other
Total deferred tax liabilities
Net deferred tax liabilities

71

Integrated Report 2020 / SEKISUI KASEI

2019
Years ending March 31,

Tax loss carryforwards (*1)

Valuation allowance fortax loss carryforwards

2020
2021
2022
2023
2024
2025 and thereafter
Total

¥

¥

29

Deferred tax assets for
tax loss carryforwards

(24)

29

¥

4

(11)

18
6

43

(37)

124

(118)

6

71

(71)

—

1,769

(1,600)169¥ 2,069¥ (1,864)¥ 205

Millions of yen

2020

Deferred income taxes reflect the net tax effect of the temporary differences between the carrying amounts of the assets and liabilities for financial
reportable purposes and the corresponding amounts for income tax purposes. The significant components of the Group’s deferred tax assets andliabilities at March 31, 2019 and 2020 are summarized as follows:
Millions of yen

Millions of yen

Thousands of U.S. dollars

2019

2020

2020

¥

¥

$

Years ending March 31,

Tax loss carryforwards (*1)

Valuation allowance fortax loss carryforwards

2021
2022
2023
2024
2025
2026 and thereafter
Total

¥

¥

21

Deferred tax assets for
tax loss carryforwards

(7)

¥ 14

34

(25)

9

101

(98)

3

85

(83)

1

99

(97)

1

2,841

(2,689)152¥ 3,184¥ (3,002)¥ 182

Thousands of U.S. dollars

190
2,069
334
507
119
75
93
459
3,852
(1,864)(377)(2,242)
1,609

(962)
(3,874)
(146)
(230)
(457)
(474)
(6,145)¥ (4,535)

51
3,184
328
527
76
73
93
381
4,715
(3,002)(331)(3,333)
1,382

(985)
(4,063)
(146)
(178)
(325)
(515)
(6,215)¥ (4,832)

468
29,256
3,013
4,842
698
670
854
3,500
43,324(27,584)(3,041)(30,625)
12,698(9,050)(37,333)(1,341)(1,635)(2,986)(4,732)(57,107)$ (44,399)

2020
Years ending March 31,

Tax loss carryforwards

2021
2022
2023
2024
2025
2026 and thereafter
Total

$

192

(*1)

Valuation allowance fortax loss carryforwards

$

(64)

Deferred tax assets for
tax loss carryforwards

$

128

312

(229)

82

928

(900)

27

781

(762)

9

909

(891)

9

26,104(24,708)

1,396$ 29,256$ (27,584)$ 1,672(*1) The tax loss carryforwards in the above table are measured using the statutory tax rates.

The Company finalized provisional accounting treatment related to business combination as of March 31, 2020 (Note 19).
The summary of significant components of the Group’s deferred tax

assets and liabilities at March 31, 2019 reflects the above revision of purchase price allocation.

Integrated Report 2020 / SEKISUI KASEI

72

(v) The components of retirement benefit expense (credit) for the years ended March 31, 2019 and 2020 were as follows:

11. Retirement Benefit Plans(a) Outline of adopted retirement benefit plans for employees
The Company and its consolidated subsidiaries adopt plans similar to
cash balance pension plans, corporate pension plans (all funded plans)
and retirement lump-sum payment plans as defined benefit plans. Further, the Company and its consolidated subsidiaries may pay premium
benefits to employees on retirement. The Company also has establishedretirement benefit trusts. Certain consolidated subsidiaries adopt de-fined contribution plans. Certain consolidated subsidiaries calculate
the liabilities for retirement benefits and retirement benefit expense
by using the simplified method which assumes the retirement benefit
obligation to be equal to the benefits payable if all eligible employees
voluntarily terminated their employment at the fiscal year end for the
calculation of liabilities for retirement benefits and retirement benefit
expenses.

(b) Defined benefit plans for the years ended March 31, 2019 and 2020(i) Excluding amounts calculated by the simplified method, the changes in the retirement benefit obligation for the years ended March 31, 2019 and2020 were as follows:
Millions of yen

Retirement benefit obligation at the beginning of the year
Service cost
Interest cost
Actuarial loss (gain)
Retirement benefit paid
Other
Increase due to business combination
Retirement benefit obligation at the end of the year

Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial gain
Retirement benefit expenses calculated by the simplified method
Retirement benefit expense (credit)$ 86,777
2,591
266(1,617)(5,402)
192—$ 82,817

Millions of yen

Millions of yen

Actuarial gain

Plan assets at fair value at the beginning of the year
Expected return on plan assets
Actuarial loss
Contributions by the employer
Retirement benefit paid
Plan assets at fair value at the end of the year

2020

2020

¥ 14,747
274
(391)
409
(580)
¥ 14,459¥ 14,459
243
(3)
399
(581)
¥ 14,517$ 132,858
2,232
(27)
3,666
(5,338)$ 133,391(iii) The changes in liabilities for retirement benefits under the simplified method for the years ended March 31, 2019 and 2020 were as follows:
Millions of yen

Liabilities for retirement benefits at the beginning of the year
Retirement benefit expense
Retirement benefit paid
Contribution to defined contribution pension plans
Other
Liabilities for retirement benefit at the end of the year

Thousands of U.S. dollars

2020

2019

2020

¥ 3,064
381
(149)
(20)
(2)
¥ 3,273¥ 2,995
326
(240)
(7)
(10)
¥ 3,064$ 2,591266(2,232)(3,206)
3,500
$ 918

¥ (938)¥ (180)2020$ (1,653)(vii) The components of retirement benefits liability adjustments included in accumulated other comprehensive income (before tax effect) as of March
31, 2019 and 2020 were as following:
Millions of yen

2019¥ (755)

Thousands of U.S. dollars

2020¥ (575)2020$ (5,283)(viii) The plan assets by major category consist of the following:Thousands of U.S. dollars

2019

2020

Thousands of U.S. dollars

2020

2019

Unrecognized actuarial gain(ii) Excluding amounts calculated by the simplified method, the changes in plan assets at fair value for the years ended March 31, 2019 and 2020 wereas follows:

¥ 282
29
(243)
(349)
381
¥ 100

(vi) The components of retirement benefits liability adjustments included in other comprehensive income (before tax effect) for the years ended March
31, 2019 and 2020 were as follows:2020¥ 9,444
282
29
(176)
(588)
21
—
¥ 9,013¥ 9,568
258
31
0
(580)
35
130
¥ 9,444

Thousands of U.S. dollars

2020

¥ 258
31
(274)
(548)
326
¥ (207)

Thousands of U.S. dollars

2020

2019

Millions of yen

2019

2020

2019
Bond
Equities
General accounts at life insurance companies
Cash and deposits
Other
Total
The total pension plan assets include 30% and 32% of the retirement
benefits trust for the corporate pension fund plans as of March 31, 2019and 2020, respectively.
The expected long-term rates of return on plan assets is determined

23%
47
13
4
13
100%

21%
44
13
5
17
100%

as a result of consideration of both the portfolio allocation at present
and in the future, and the long-term rate expected rate of return frommultiple plan assets at present and in the future.

$ 28,154
3,500(1,369)(183)(18)$ 30,074(iv) Including the amounts presented calculated by the simplified method, the balance of retirement benefit obligation and plan assets at fair value,liabilities and assets recognized in the consolidated balance sheets for the years ended March 31, 2019 and 2020 were as follows:
Millions of yen

Funded retirement benefit obligation
Plan assets at fair value

73

2019

2020

2020

¥

¥

$

Unfunded retirement benefit obligation
Net amount of liabilities and assets recognized in the consolidated balance sheet

9,501(14,514)(5,012)
3,061(1,951)

Liabilities for retirement benefits
Assets for retirement benefits
Net amount of liabilities and assets recognized in the consolidated balance sheet

3,212(5,163)¥ (1,951)

Integrated Report 2020 / SEKISUI KASEI

Thousands of U.S. dollars

9,073(14,572)(5,499)3,268(2,231)

3,446(5,677)¥ (2,231)

83,368(133,896)(50,528)
30,028(20,499)

31,664(52,163)$ (20,499)

Integrated Report 2020 / SEKISUI KASEI

74

(ix) The assumptions used in accounting for the defined benefit plans for the years ended March 31, 2019 and 2020 are as follows:

2020

2019
Discount rates
Expected long-term rate of return on plan assets
Rates of salary increase

14. Other Comprehensive Income

0.4%
1.7%
2.7%

0.3%
1.7%
2.8%

(c) Defined contribution pension plans for the years ended March 31, 2019 and 2020 are as follows:
Millions of yen

Thousands of U.S. dollars

2020

2019
Contributions to defined contribution pension plans

2020

¥ 17

¥ 10

$ 156

12. Shareholders’ Equity
The Corporation Law of Japan provides that an amount equal to 10% of
the amount to be disbursed as distributions of capital surplus (other thanthe capital reserve) and retained earnings (other than the legal reserve)
be transferred to the capital reserve and the legal reserve, respectively,
until the sum of the capital reserve and the legal reserve equals 25% of
the capital stock account. Such distributions can be made at any timeby resolution of the shareholders, or by the Board of Directors if certain
conditions are met.
Retained earnings include the legal reserve provided in accordance withthe provisions of the Corporation Law of Japan. The legal reserve of theCompany included in retained earnings amounted to ¥1,370 million and¥1,370 million ($12,588 thousand) at March 31, 2019 and 2020, respectively.

Common stock and treasury stock
Movements in shares of common stock and treasury stock during the years ended March 31, 2019 and 2020 are summarized as follows:

2019
April 1, 2018

46,988,109
1,696,143

Increase

Decrease—
721

March 31, 2019——

46,988,109
1,696,864

The increase in treasury stock consists of 124 shares due to the purchase of fractional shares of less than one voting unit, and 597 shares attributable
to the Company acquired by its equity-method affiliates.

2020
April 1, 2019

46,988,109
1,696,864

Increase—
1,018

Decrease

March 31, 2020——

46,988,109
1,697,882

The increase in treasury stock consists of 1,018 shares due to the purchase of fractional shares of less than one voting unit.

13. Land Revaluation
In accordance with the “Law Concerning Revaluation of Land” promulgated on March 31, 1998, land used for business was revalued at March
31, 2002, and the related unrealized gain was reported as “Surplus arising from land revaluation” after deducting the relevant tax effect. The
method followed for this revaluation was determined in accordance withthe “Land Revaluation Tax Law” as stipulated in the “Enforcement Act

Net unrealized holding (loss) gain on securities:(Loss) gain arising during the year
Reclassification adjustments
Before tax effectTax effectNet unrealized holding (loss) gain on securities
Translation adjustments:
Loss arising during the year
Reclassification adjustments
Before tax effectTax effectTranslation adjustments
Retirement benefits liability adjustments:
Loss arising during the year
Reclassification adjustments
Before tax effectTax effect
Retirement benefits liability adjustments
Total other comprehensive income

Thousands of U.S. dollars

2020

2020

¥ (1,495)(399)(1,894)525(1,368)

¥ 615
—
615
(188)
426

$ 5,651—
5,651(1,727)
3,914

(45)
—
(45)
—
(45)

(765)
(53)
(819)
—
(819)

(7,029)(486)(7,525)—(7,525)(1,487)
548
(938)
283
(654)
¥ (2,068)

(544)
364
(180)
54
(125)
¥ (517)(4,998)3,344(1,653)496(1,148)$ (4,750)

Research and development costs included in selling, general and administrative expenses for the years ended March 31, 2019 and 2020 amounted to¥2,145 million and ¥2,769 million ($25,443 thousand), respectively.

16. Loss on Impairment of Property, Plant and Equipment
The Group recorded loss on impairment for the following asset groups for the year ended March 31, 2019.
Location

Number of shares

Common stock
Treasury stock

Millions of yen

2019

15. Research and Development Costs

Number of shares

Common stock
Treasury stock

Reclassification adjustments and tax effects on components of other comprehensive income for the years ended March 31, 2019 and 2020 were as follows:

Concerning Land Revaluation” and other regulations.
The carrying values of ¥9,545 million and ¥9,545 million ($85,998 thousand) for the purpose of land revaluation exceeded the land’s estimatedmarket values by ¥3,554 million and ¥3,580 million ($32,895 thousand) at
March 31, 2019 and 2020, respectively.

MexicoChina

UseBusiness Use
Business Use

Classification

Buildings and machinery
Buildings and machinery

The Group categorizes assets for business use mainly based on the classification for management accounting units. Idle assets are grouped on
an individual basis.
For the year ended March 31, 2019, the Company recorded loss on
impairment in the amount of ¥356 million on buildings and machinerywithin other expenses by writing down the net book value to the recoverable amount of plant assets due to a continuous downturn in the
results of business operations of two consolidated subsidiaries. The loss

on impairment consisted of ¥174 million for buildings, ¥155 million formachinery and ¥26 million for other. The recoverable amounts of thisasset group were measured at the estimated value in use, which was
calculated based on future cash flows using a discount rate of 10.1%.
The net selling value is based on the estimated sales price.
No loss on impairment of property, plant and equipment was recorded for the year ended March 31, 2020.

17. Derivatives and Hedge Accounting
The estimated fair value of derivative instruments outstanding at March 31, 2019 and 2020 for which hedge accounting has been applied is summarized as follows:
Millions of yen

2019
Notional amount
Total

Interest-rate swaps hedging long-term loans,accounted for by special treatment:
Receivable / floating and U.S. dollar
Payable / fixed and Japanese yen

75

Integrated Report 2020 / SEKISUI KASEI¥ 977

Maturing after one year

¥ 855

Fair value(*)

Integrated Report 2020 / SEKISUI KASEI

76

19. Business Combination

Millions of yen

2020
Notional amount
Total

Interest-rate swaps hedging long-term loans,accounted for by special treatment:
Receivable / floating and U.S. dollar
Payable / fixed and Japanese yen

Maturing after one year

¥ 977

Fair value

¥ 855

(*)

The provisional accounting treatment related to the business combination with Proseat Group on February 19, 2019 had not been finalized asof the end of the fiscal year ended March 31, 2019, and the amounts
disclosed previously were provisional amounts based on the information
available at that time. The allocation of the acquisition cost was completed in the fiscal year ended March 31, 2020.
As the acquisition cost allocation was finalized, goodwill was remeasured and reclassified in the consolidated financial statements for theyear ended March 31, 2019.
As a result, the provisionally calculated goodwill in the amount of¥2,100 million decreased by ¥566 million due to the completion of theaccounting procedures, resulting in a total of ¥1,533 million of goodwill.
In addition, other intangible assets increased by ¥1,213 million, otherlong-term liabilities increased by ¥457 million and non-controlling interests increased by ¥188 million.

Thousands of U.S. dollars

2020

20. Segment Information

Notional amount
Total

Interest-rate swaps hedging long-term loans,accounted for by special treatment:
Receivable / floating and U.S. dollar
Payable / fixed and Japanese yen

Maturing after one year

$ 8,591

Fair value$ 5,366(*)(*) Because interest-rate swaps accounted for by integral hedge accounting are accounted for applying swap rates to underlying long-term loans, their fair value is included in thatof the hedged long-term loans disclosed in Note 5.

18. Amounts per ShareYen

Profit attributable to owners of parent
Net assets
Cash dividends
Profit attributable to owners of parent per share has been computed
based on the profit attributable to owners of parent available for distribution to shareholders of common stock and the weighted-average
number of shares of common stock outstanding during the year. Diluted
profit attributable to owners of parent per share has not been presented
for the years ended March 31, 2019 and 2020 since neither the Company nor any of the consolidated subsidiaries had any potentially dilutive

U.S. dollars

2019

2020

¥

¥

69.09
1,439.43
30.00

51.29
1,450.32
30.00

2020
$ 0.4713.32
0.27

shares at March 31, 2019 and 2020.
The amounts per share of net assets have been computed based on
the number of shares of common stock outstanding at the year end.
Cash dividends per share represent the cash dividends declared as
applicable to the respective years together with the interim cash dividends paid.

(a) Outline of segment information
The Group’s business mainly involves the manufacturing and sales ofplastic products. The Company has established departments based on
product markets or product function for global development in the two
fields of “Human Life” and “Industry.” Each department has works closely with subsidiaries to plan overall strategies and operate its business.
Accordingly, the Group’s reportable segments are “Human Life” and“Industry.”
These reportable segments of the Group are components for which
discrete financial information is available and whose operating results
are regularly reviewed by the Board of Directors to make decisions
about resource allocation and to assess performance.
The main products for Human Life Segment are boxes/trays for agricultural/fishery products, food containers, housing and civil engineering
materials, etc., while the main products for Industry Segment are automobile components, digital consumer electronics components, packaging materials, and other related products.

(b) Calculation methods used for sales, income, assets and otheritems of each reportable segment
The accounting policies of the segments are substantially the same as
those described in significant accounting policies in Note 1.
Segment income represents ordinary income, which consists of operating income and non-operating income/expenses. Non-operating
income/expenses mainly include interest income, dividend income, interest expense, equity in losses of an affiliate. Intersegment sales arerecorded at the same price used in transactions with third parties.
(c) Changes in the measurement method of income or loss in thereporting segment
The allocation method in each reporting segment has been changed
to reflect their performances appropriately from the year ended March
31, 2020.
As a result of this change, segment income decreased by 87 million($799 thousand) in Human Life segment, and increased by 87 million($799 thousand) in Industry segment compared with the amounts thatwould have been recognized based on the former allocation method forthe year ended March 31, 2020.

(d) Information on sales, income, assets and other items of each reportable segment
Information by reportable segment for the years ended March 31, 2019 and 2020 is as follows:
Millions of yen

2019

The financial data used in the computation of profit attributable to owners of parent per share based on the above method for the years ended March
31, 2019 and 2020 is summarized as follows:
Millions of yen

2020

2019
Profit attributable to owners of parent
Adjusted profit attributable to owners of parent available for distribution tocommon stockholders

Thousands of U.S. dollars

2020¥ 3,129¥ 2,323$ 21,345¥ 3,129¥ 2,323$ 21,345

Thousands of shares

2020

2019
Weighted-average number of shares of common stock outstanding

45,29045,291

The financial data used in the computation of net assets per share based on the above method at March 31, 2019 and 2020 is summarized as follows:
Millions of yen

Total net assets
Deductions from total net assets:
Non-controlling interests
Total net assets available to owners of parent

Thousands of U.S. dollars

2019

2020

2020

¥ 66,960¥ 67,217$ 617,633

1,766¥ 65,193

1,531¥ 65,685

14,067$ 603,556

Reportable segments
Human Life

Sales, income and assets by reportable segments:
Sales to third parties
Inter-segment sales and transfers
Total
Segment income (*2)
Segment assets
Other items:
Depreciation and amortization
Amortization of goodwill
Interest income
Interest expense
Equity in losses of an affiliate
Investments in affiliates accounted for by the equity method
Increase in property, plant and equipment and intangible assets

Industry

Total

Adjustments andeliminations (*1)

¥ 64,865
3,816¥ 68,681¥ 3,453¥ 72,609¥ 47,728
2,651¥ 50,380¥ 2,546¥ 72,022¥ 112,593
6,468¥ 119,062¥ 5,999¥ 144,632—(6,468)¥ (6,468)¥ (1,223)¥ 8,859¥ 112,593—¥ 112,593¥ 4,776¥ 153,491¥ 1,939
—
0
859
0
348
2,202

¥ 2,115
21
3
424
—
—
4,235

¥

¥

¥

4,055
21
3
1,284
0
348
6,437

¥

Consolidated

462—
0(1,119)
—
—
931

4,517
21
4
164
0
348
7,368

Thousands of shares

2019
Number of shares of common stock used in the calculation of net assets per share
The Company finalized the provisional accounting treatment related tobusiness combination as of March 31, 2020 (Note 19).

77

Integrated Report 2020 / SEKISUI KASEI

45,291

2020
45,290The computation basis of net assets per share at March 31, 2019 reflected the above revision of purchase price allocation.
Integrated Report 2020 / SEKISUI KASEI

78

Property, plant and equipment by countries or areas grouped according to geographical classification at March 31, 2019 and 2020 were summarized
as follows:

Millions of yen

2020
Reportable segments
Human Life

Sales, income and assets by reportable segments:
Sales to third parties
Inter-segment sales and transfers
Total
Segment income (*2)
Segment assets
Other items:
Depreciation and amortization
Amortization of goodwill
Interest income
Interest expense
Equity in earnings of an affiliate
Investments in affiliates accounted for by the equity method
Increase in property, plant and equipment and intangible assets

Industry

Total

Adjustments andeliminations (*1)

Millions of yen
Consolidated¥ 58,101670¥ 58,771¥ 3,280¥ 70,493¥ 78,053
156¥ 78,210¥ 1,186¥ 67,242¥ 136,155826¥ 136,982¥ 4,467¥ 137,735

¥

—
(826)
¥ (826)¥ (1,075)¥ 11,368¥ 136,155—¥ 136,155¥ 3,391¥ 149,103¥ 1,933
—
0
0
(13)
335
1,807

¥ 3,522
168
4
262
—
—
2,767

¥

¥

¥

5,455
168
5
263
(13)
335
4,573

615
—
0
128
—
—
687

6,071
168
5
392
(13)
335
5,261

Japan
Asia
Other
Total

Thousands of U.S. dollars

2019

2020

2020

¥ 48,182
4,911
7,170
¥ 60,265¥ 47,788
4,498
9,614
¥ 61,901$ 439,106
41,33088,339$ 568,786(f) Information by major customer
The information by major customer for the years ended March 31, 2019 and 2020 was summarized as follows:
Millions of yen
Customer

Related segment

FP Corporation

Human Life

Thousands of U.S. dollars

2019

2020

2020

¥ 14,964¥ 14,562$ 133,805

Adjustments andeliminations

Consolidated

¥—

¥ 356

(g) Loss on impairment of property, plant and equipment for the years ended March 31, 2019 and 2020.
Thousands of U.S. dollars

Millions of yen

2020

2019

Reportable segments

Sales, income and assets by reportable segments:
Sales to third parties
Inter-segment sales and transfers
Total
Segment income (*2)
Segment assets
Other items:
Depreciation and amortization
Amortization of goodwill
Interest income
Interest expense
Equity in earnings of an affiliate
Investments in affiliates accounted for by the equity method
Increase in property, plant and equipment and intangible assets

Total

Adjustments andeliminations (*1)

Consolidated

Human Life

Industry$ 533,869
6,156$ 540,025$ 30,138$ 647,734$ 717,201
1,433$ 718,643$ 10,897$ 617,862$ 1,251,079
7,589$ 1,258,678$
41,045$ 1,265,597—(7,589)$ (7,589)$ (9,877)$ 104,456$ 1,251,079—$ 1,251,079$
31,158$ 1,370,054$ 17,761
—
0
0
(119)
3,078
16,603$ 32,362
1,543
36
2,407
—
—
25,424$$$50,124
1,543
45
2,416
(119)
3,078
42,019

$

5,651
—
0
1,176
—
—
6,312

55,784
1,543
45
3,601
(119)
3,078
48,341(*1) Adjustments and eliminations in the preceding tables were as follows:(i)	Segment income in the amounts of (¥1,223 million) and (¥1,075 million) ($9,877 thousand) for the years ended March 31, 2019 and 2020 consisted of elimination of inter-segment transactions in the amounts of ¥(0) million and ¥(0) million ($(0) thousand), and unallocable expenses in the amounts of (¥1,223 million) and (¥1,075 million) ($9,877
thousand).
(ii)	Segment assets in the amounts of ¥8,859 million and ¥11,368 million ($104,456 thousand) for the years ended March 31, 2019 and 2020, respectively, mainly consisted ofinvestments in securities and assets related to administrative departments and the Central R&D Laboratory owned by the Company.
(iii)	Depreciation and amortization in the amounts of ¥462 million and ¥615 million ($5,651 thousand) for the years ended March 31, 2019 and 2020, respectively, include amortization of long-term prepaid expenses. In addition, these amounts mainly consisted of depreciation of assets related to administrative departments and the Central R&D
Laboratory owned by the Company.
(iv)	Interest expenses were the difference between allocated internal interest expenses and actual interest expenses. The Company allocates internal interest to each reportablesegment according to the amount of assets of each reportable segment.
(v)	Increase in property, plant and equipment and intangible assets in the amounts of ¥931 million and ¥687 million ($6,312 thousand) for the years ended March 31, 2019 and2020, respectively, mainly consisted of assets related to the Central R&D Laboratory owned by the Company.
(*2) Segment income was adjusted for the ordinary income as described in “(b) Calculation methods used for sales, income, assets and other items of each reportable segment.”

Human life

Loss on impairment of property, plant and equipment

Industry

¥—

¥ 356

Loss on impairment of property, plant and equipment was not recorded for the year ended March 31, 2020.
(h) Amortization of goodwill and unamortized balance of goodwill for the years ended and as of March 31, 2019 and 2020.
Millions of yen

2019
Human life

Amortization of goodwill
Unamortized balance of goodwill¥——

Adjustments andeliminations

Industry

¥

21
1,585

¥—
—

Consolidated

¥

21
1,585

Millions of yen

2020
Human life

Amortization of goodwill
Unamortized balance of goodwill¥——

Adjustments andeliminations

Industry

¥

168
1,363

¥—
—

Consolidated

¥

168
1,363

Thousands of U.S. dollars

2020
Human life

Amortization of goodwill
Unamortized balance of goodwill$——

Industry$ 1,543
12,524

Adjustments andeliminations

Consolidated$——$ 1,543
12,524(e) Geographical information
Sales to third parties by countries or areas grouped according to geographical classification for the years ended March 31, 2019 and 2020 were summarized as follows:
Millions of yen

Japan
Asia
Other
Total

79

Integrated Report 2020 / SEKISUI KASEI

Thousands of U.S. dollars

2019

2020

¥ 92,230
16,1584,204¥ 112,593¥ 86,790
12,17337,192¥ 136,155

2020$

797,482
111,853
341,744$ 1,251,079

Integrated Report 2020 / SEKISUI KASEI

80

Independent Auditor’s Report
21. Subsequent Event(a) Cash dividends
The following distribution of retained earnings of the Company, which has not been reflected in the consolidated financial statements for the year
ended March 31, 2020 was approved at a shareholders’ meeting held on June 24, 2020.

Cash dividends (¥17 (U.S. $0.15) per share)

Millions of yen

Thousands of U.S. dollars

2020

2020

¥ 770

$ 7,075(b) Merger between consolidated subsidiaries
At a meeting of the Board of Directors held on January 24, 2020, the Company approved a resolution to merge Sekisui Plastics Kyushu Co., Ltd. awholly-owned consolidated subsidiary, with wholly-owned consolidated subsidiaries Sekisui Plastics Yamaguchi Co., Ltd. and Sekisui Plastics Shikoku
Co., Ltd. The merger was completed on April 1, 2020.
(i) Outline of the absorption-type merger
1) Name of combined company and business descriptiona) Name of combined company Sekisui Plastics Kyushu Co., Ltd.
b) Business description
Sales and manufacturing of foamed plasticsc) Name of merged company	Sekisui Plastics Yamaguchi Co., Ltd.
Sekisui Plastics Shikoku Co., Ltd.
d) Business description
Sales and manufacturing of foamed plastics
2) Date of the business combination
April 1, 2020
3) Legal form of the business combination
Absorption-type merger with Sekisui Plastics Kyushu Co., Ltd. as the surviving company, and Sekisui Plastics Yamaguchi Co., Ltd. and Sekisui
Plastics Shikoku Co., Ltd. as the dissolved companies.

4) Name of company after the business combination
Sekisui Kasei Seibu Co., Ltd.
5) Other matters related to the outline of transaction
The Company decided to merge the three consolidated subsidiaries in order to enhance competitiveness by prompt decision-making in achanging business environment and synergies utilizing these companies’ know-how considering the locations and the nature of the businesses.
As a result of this business combination, the Company believes the operating structure will be more efficient, and the Company also expects further sales growth by expanding specialty areas to other regions.
(ii) Summary of accounting treatment
The Company will treat it as a transaction under common control on the basis of “Accounting Standard for Business Combinations” (ASBJ Statement No. 21, January 16, 2019) and “Implementation Guidance on Accounting Standard for Business Combinations and Accounting Standard
for Business Divestitures” (ASBJ Guidance No. 10, January 16, 2019).

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82

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Other Information

Our Group Network(As of September 30, 2020)

❶

18
●

17 ●
12
●
16
●
20 21
13 14 15●
18●●●
●
●

10
●

❸

19
●

❶

❷

11
●

❹❺❻
❷
❼
❾

❻ ❺❹❸
❼
❽
❾

❽
10
12 ●
11 ●
●
14
●
1
5
13 ●
●
16
●

Overseas subsidiaries 21 companies

85

17
●

Domestic subsidiaries 18 companies

Sekisui Kasei Korea Co., Ltd.

Sekisui Kasei Hong Kong Trading

14 Proseat GmbH + Co. KG

Sekisui Kasei Hokkaido Co., Ltd.

Shonan Sekisui Kogyo Co., Ltd.

15 Sekisui Kasei Tenri Co., Ltd.

Sekisui Kasei Taiwan Co., Ltd.

Co., Ltd.

15 Proseat Verwaltung GmbH

Sekisui Kasei Tohoku Co., Ltd.

Sekisui Kasei Yamakyu Co., Ltd.

16 Sekisui Kasei Seibu Co., Ltd.

Sekisui Kasei Tianjin Co., Ltd.

PT. Sekisui Kasei Indonesia

16 Proseat Schwarzheide GmbH

Sekisui Kasei Toubu Co., Ltd.

10 Sekisui Kasei Chubu Co., Ltd.

17 Sekisui Kasei Oita Co., Ltd.

Sekisui Kasei Suzhou Co., Ltd.

Sekisui Kasei (Thailand) Co., Ltd.

17 Proseat LLP

Sekisui Kasei Urethane Co., Ltd.

11 Sekisui Kasei Omi Co., Ltd.

18 Sekisui Kasei Okinawa Co., Ltd.

Sekisui Kasei Shanghai

10 Sekisui Kasei U.S.A. Inc.

18 Proseat SAS

Sekisui Kasei Kanto Co., Ltd.

12 Sekisui Kasei Shiga Co., Ltd.

International Trading Co., Ltd.

11 Sekisui Kasei Mexico S.A. de C.V.

19 Proseat Foam Manufacturing, S.L.U.

Sekisui Kasei Gunma Co., Ltd.

13 Sekisui Kasei Sakai Co., Ltd.

Sekisui Kasei Shanghai Precision

12 Sekisui Kasei Europe B.V.

20 Proseat Mladá Boleslav s.r.o.

Sekisui Kasei Saitama Co., Ltd.

14 Sekisui Kasei Kansai Co., Ltd.

Forming Co., Ltd.

13 Proseat Europe GmbH

21 Proseat Sp.zo.oIntegrated Report 2020 / SEKISUI KASEIIntegrated Report 2020 / SEKISUI KASEI86

Other Information

Other Information

Company Profile

Investor Information(As of March 31, 2020)(As of March 31, 2020)

Company name

Osaka Head office
Tokyo Headquarters
FoundedSekisui Kasei Co., Ltd.

2-4-4 Nishi-tenma, Kita-ku, Osaka 530-8565, Japan

President

16,533 million yen

427 (non-consolidated)
3,855 (consolidated)

Fiscal Year

1 company

Business Lines in Each Segment
Market/Application

Agricultural and marine product containers, food containers, distribution materials,
construction materials, civil engineering materials

Listings

First Section, Tokyo Stock Exchange

Securities code

4228

Common stock—issued

46,988,109 shares

Number of shareholders

6,599

Transfer agent

Mitsubishi UFJ Trust and Banking
Corporation

Independent Auditor

Ernst & Young ShinNihon LLC

Major
Products

ESLEN Beads, ESLEN Sheet, ESLEN Wood, INTERFOAM, other foamed/ molded products

11.4%

1

1.1%

1
Japanese individual
investors and others

Other Japanese
corporations

23.7%

38.4%

Japanese financial
institutions

25.4%

Note: Calculated after deducting treasury stock holdings of 1,668 thousand shares

Numbers of shares held
(thousands)

Percentage of shares held(%)

Sekisui Chemical Co., Ltd.

9,855

21.75

The Dai-ichi Life Insurance Company, Limited

3,031

6.69

Employees’ Shareholding

1,727

3.81

BNP PARIBAS SECURITIES SERVICES LUXEMBOURG /JASDEC / FIM / LUXEMBOURG FUNDS / UCITS ASSETS

1,477

3.26

Sekisui Jushi Corporation

1,419

3.13

Daido Life Insurance Company

1,418

3.13

The Master Trust Bank of Japan, Ltd.

1,379

3.04

FP Corporation

1,348

2.98

MUFG Bank Ltd.

1,327

2.93

Asahi Kasei Corp.

1,250

2.76

Denka Company Limited

1,250

2.76

Stock Price/Trading Volume
Foreigncorporations

Japanese
securities firms

11.4%
1.1%
Automotive components, packaging materials for transporting automotive parts,
industrial components, industrial packaging, electric part materials, medical and health care materials
Japanese individual
investors and others

Industry

Other Japanese
corporations

23.7%
PIOCELAN, LIGHTLON, NEOMICROLEN, CELPET, TECHPOLYMER,
ST-gel, TECHEATER, ELASTIL, 38.4%
FOAMAC, ST-LAYER, other foamed/molded products
Japanese financial
institutions

25.4%

Note: Calculated after deducting treasury stock holdings of 1,668 thousand shares(Yen)(Thousand shares)

1,200

9,000

800

6,000

400

3,000

12,000

1,600

0

0
2018
April
Stock price (left axis)

87(Y

Japanese
securities firms

Notes: The Company maintains 1,668,000 shares of treasury stock, which dose not include the holdings of the major shareholders in the above list.

Human
Life

Major
Products

Ordinary General Meeting of
Shareholders: March 31
Interim Dividend: March 31
Year-end Dividend: September 30

Name

Ended March 31

Market/Application

Foreigncorporations

Major Shareholders

Consolidated Subsidiaries (Japan)
18 companies (As of April 1, 2020)( Worldwide) 21 companies
Equity Method Affiliate

Ordinary General Meeting Juneof Shareholders

2-7-1 Nishi-Shinjuku, Shinjuku-ku, Tokyo 163-0727, Japan

Masato Kashiwabara

Number of employees

Shareholdings by Type of Shareholder

Record Date

Oc tober 1, 1959

Paid-in capital

Stock Information

Integrated Report 2020 / SEKISUI KASEIJulyOctober

2019
January

April

July

October

2020
January

Trading volume (right axis)

Integrated Report 2020 / SEKISUI KASEI

88

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Sekisui Kasei.
https://www.sekisuikasei.com/

SEKISUI KASEI CO., LTD.
Contact: Investor and Public Relations Dept.
Corporate Strategic HQ.
Address: 2-7-1 Nishi-Shinjuku, Shinjuku-ku,
Tokyo 163-0727, JapanTel:+81-3-3347-9711
Integrated Report 2020

2010SD410.1-100

Published in October 2020

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