Denka GroupCSR Report 2016
References

CONTENTS
Denka Principles / The Denka Group Guidelines・・・・・・・・・・・・・・・・・・・・・3
Compliance・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・4
Information Security / Information Disclosure・・・・・・・・・・・・・・・・・・・・・・5
ISO 14001 and 9001 Management Systems・・・・・・・・・・・・・・・・・・・・・・・・7
Fiscal 2015 Environmental performance by Denka Business Sites
and Affiliates・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・8
Fiscal 2015 Environmental performance Data-Ratio of EachBusiness Site in Overall Emissions・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・11
Denka’s Policy on Biodiversity and Accomplishments・・・・・・・・・・・・・・・12
Topics on Our Environmental Activities・・・・・・・・・・・・・・・・・・・・・・・・・・・・13
Product and Labor Safety Management Systems・・・・・・・・・・・・・・・・・・・14
Optimizing Logistics Operations・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・17
Occupational Safety and Health Management System／Our Structure for Managing Changes in Production Process・・・・・・18
Environment- and Energy-Related Subsidies・・・・・・・・・・・・・・・・・・・・・・・19
Environmental Accounting・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・21
The CSR Procurement Policies & Guidelines／Customer Satisfaction Surveys・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・22
Educational Support Initiatives・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・23
Corporate Officers （as of June 22, 2016）・・・・・・・・・・・・・・・・・・・・・・・・・・24
Outside Directors’ Career Summaries・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・25
Consolidated Financial Statements・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・26
Non-consolidated Financial Statements・・・・・・・・・・・・・・・・・・・・・・・・・・・・30
Appendix 1. Responsible Care (RC) Activities
Appendix 2. Global Reporting Initiative (GRI) Content Index

2
Denka Group CSR Report 2016 References

Denka Principles / The Denka Group Guidelines
Denka Principles
Denka Principles
We:• Boldly confront challenges with determination and sincerity.
• Think and take action today with the future in mind.
• Deliver new values, and inspire customers through innovative monozukuri.
• Respect the environment and create a cheerful workplace that prioritizes safety.
• Contribute to a better society, whilst taking pride in being a trusted corporate citizen.
(As of April 1, 2015)

The Denka Group Guidelines
Based on its corporate philosophy, “to become a company that creates new value from resources by fully
employing our technological capabilities,” the Denka Group established CSR action guidelines.

1. We will promote sustainable social andbusiness development out of aconviction that corporate social
responsibility is the essence ofbusiness.

6. We will maintain safe, clean andcomfortable workplaces and respect allbasic human rights.
7. We will use, reuse and recycle
resources to help protect theenvironment.

2. While constantly ensuring quality tomaintain customer trust, we willcontribute to sound social progress bydeveloping and supplying products
and services that are safe andenvironment friendly.

8. We will maintain security and disasterprevention measures, participate inenvironmental protection activities andcommunicate with society.
9. We will contribute to society as a good
corporate citizen.

3. We will operate fairly.
4. We will maintain a good level ofcommunication with society anddisclose appropriate information.

10. We will contribute to social
development as a good member of the
global community.

5. We will comply with laws andregulations and operate fairly
according to social norms.

Established April 1, 20073
Denka Group CSR Report 2016 References

Compliance
To Maintain the Trust of Society, We Will Seek Greater Transparency and Ensure Integrity in All
Our Endeavors.

Compliance
Our Stance against Corruption and Antisocial Forces
The Denka Group Ethics Policy prohibits employees from engaging in bribery or other illegal activities as well asfrom providing or receiving entertainment or gifts of excessive value or the nature of which violates social
norms. In fiscal 2015, we sent out alerts reminding employees to take particular heed of the prohibition against
bribery when engaged in transactions overseas or trying to penetrate into new market areas. We intend to also
implement such employee education at overseas subsidiaries.
In addition, employees are strictly prohibited from acting in any way to benefit antisocial forces, and we
ensure that every business contract incorporates a clause requiring the severance of any relationship with such
entities.
Security Trade Control
Current international regulations on trade aim to prevent the proliferation of weapons of mass destruction byprohibiting exports of products and technologies that could help the development and manufacture of such
weapons. In line with this, the Denka Group Ethics Policy requires adherence to Japan’s Foreign Exchange andForeign Trade Act, the Export Trade Control Order and other related regulations as well as the Company’s inhouse rules on security trade control. Reflecting this, our fiscal 2015 initiatives aimed at ensuring security tradecontrol included internal audits undertaken at eight departments of two divisions and participation in externalseminars in addition to product classification as well as end-use and end-user verification in the course of ourdaily operations.
Protection of intellectual Property Rights
In line with the Denka100 new growth strategies, we are focusing on accelerating global expansion and facilitating
open innovation. Therefore, the protection of intellectual property (IP) rights is becoming ever more important interms of compliance. With this in mind, we are implementing the following key initiatives on an ongoing basis.
First, we continually strive to ensure patent clearance. While respecting the IP rights held by other companies,
we work to confirm that our products cause no infringement of such rights through patent clearance search.
Second, we continually improve employee education. In addition to providing our researchers with education
on patent application, our initiatives included annual training sessions themed on the protection of IP rights, thecontent of related contracts, the utilization of trademarks and the exercise of property rights, targeting personnel
at sales, corporate planning and administrative departments. For fiscal 2016, we will assiduously endeavor toraise employees’ compliance awareness regarding the protection of IP rights.
Prevention of Insider Trading
In recent years, the incidence of insider trading and illegal use or leakage of privileged information has increased.
In response, Japan’s Securities and Exchange Surveillance Commission is stepping up efforts aimed at cracking
down on such illegal activities. In line with its in-house rules regarding the control of insider information andprevention of insider trading, Denka prohibits information leakage while requiring employees in certain positions
to submit prior notice when they engage in the sale or purchase of stocks. Also, such sales and purchases are
uniformly banned during the two weeks before the date of financial results announcement.
Looking ahead, we will strive to disseminate these rules via the Company’s intranet and other media, thereby
helping to ensure the appropriate control of information and the prevention of insider trading.
Fair Trade
In line with the stipulations of the Denka Group Ethics Policy requiring adherence to competition laws (e.g., theantimonopoly laws), we are holding in-house compliance training sessions while conducting internal audits,
thereby ensuring even stricter compliance. In fiscal 2015, to ensure the smooth acquisition of synthetic rubberrelated operations in the United States, we submitted mandatory notification to and obtained approval from all
the relevant trade competition authorities.
Thanks to these and similar efforts, Denka has not been charged with any violation of competition laws
since 1993 in Japan and 2002 overseas. As we aim to remain in this status, we are stepping up such initiatives
as employee education aimed at ensuring compliance with fair trade and competition laws.

4
Denka Group CSR Report 2016 References

Information Security / Information Disclosure
We Will Ensure Information Security through Proper Control while Maintaining Timely andAppropriate Information Disclosure.

Information Security
Information Management Policy
The Denka Group Ethics Policy established in 2002 encompasses guidelines under the headings the Safe
Management of Personal Information/Confidential Information Management and Respect for Intellectual Property
Rights, both of which are strictly complied with. As subordinate regulations of these guidelines, Denka establishedand developed the Personal Privacy Policy and the Regulation for Protecting Information regarding Corporate
Secrets, which are thoroughly disseminated through lectures and in-house newsletters. Furthermore, Denka
strictly manages and respectfully handles confidential information provided by third parties in accordance with
the Denka Group Ethics Policy.
Structure of Information Management Rules

Lectures on Information Security (fiscal 2015)
Denka provides newly hired employees with joint training sessions themed on information security,
utilizing easy-to-understand videos to instill relevant in-house rules. For mid-ranking and veteranemployees, the Company implements annual information system training sessions at Headquarters,
branches and plants, giving them lectures on these rules. In these ways, Denka ensures that all
employees are well-versed in information security rules whether they are new recruits or veterans.
Information System Management and the Protection of Electronic Data
To ensure the safe and efficient management and operation of its information systems, Denka
established the Information System Management Guidelines and the Information System Work Manualas subordinate rules under the Regulation for Protecting Information regarding Corporate Secrets.
As we aim to enforce robust measures aimed at protecting our electronic data, we utilize external
secured data centers to operate our servers, disc devices and other equipment constituting our system
platform. Moreover, we established a structure that links two data centers (located in the east and westof Japan), each capable of supplementing the other’s operational capacity even if one site is struck by
a wide-area disaster like an earthquake or a tsunami, thereby securing the continuity of system
operations.
Well aware of the threat of malicious cyberattacks employing increasingly sophisticatedmethodologies, we implement vigorous countermeasures against intrusion into our network and thetheft of information from it, striving to ensure the early detection of computer virus infections and otherunauthorized activities.

5
Denka Group CSR Report 2016 References

Information System Management Structure

Information Disclosure
Our Stance on Information Disclosure and Online Information Management
In accordance with Japan’s Financial Instruments and Exchange Law and timely disclosure rules set forth by the
Tokyo Stock Exchange, Denka appropriately discloses information with the aim of ensuring the transparency ofits management. It is also our policy to proactively disclose information that does not fall under these regulations
whenever such information is considered helpful to our shareholders and investors.
Moreover, using such opportunities as results briefings, corporate briefings for individual investors andthe General Meeting of Shareholders, we are enhancing communication with our shareholders and investors whilereflecting their feedback in management decisions and business activities.
Denka makes sure that corporate information subject to the timely disclosure rules is protected fromunauthorized access or theft prior to release through the Tokyo Stock Exchange’s timely disclosure network(TDnet) service. The Company uploads such information to its website only after confirming that the information
has been successfully disclosed through the aforementioned service. The number of personnel handling themanagement of the website is strictly limited, with their workspaces being set apart from other facilities andequipped with protection systems. We have also established a procedure to handle emergencies, such as
unintentional information disclosure and leakage.

6
Denka Group CSR Report 2016 References

ISO14001 and ISO9001 Management Systems
The Denka Group Is Pursuing Ongoing Improvement Using Quality and Environmental
Management Systems.

Status of ISO Certification Acquisition
August 8th, 2016
ISO9001（Quality）

ISO14001(Environment)
Date Certified

Registration Number

Date Certified

Registration Number

Omi Plant

October
16, 1999

3320229-2A（BV）

August 19,
1994

2936857(BV)

Omuta Plant

October 28,
2000

3467588(BV）

November7, 1998

3066427(BV)

Chiba Plant

May 31,
1999

3181497（BV)

March 22,1995

2985010(BV)

Shibukawa Plant

May 21,
2001

3522129(BV)

October
23, 1996

3119550(BV)

Ofuna Plant

November
9, 2001
September
30, 2003
July 5,2004
By the endof 2017(target)June 8,2001
May 28,2003

JQA-EM1895（JQA）
2770789(BV)

October25, 1996
February28, 2008―

JQA-1429(JQA)―

August 27,
2014

10001143
QM08(DQS)

Chloroprene Rubber

SNG0190016(Lloyd's)
SNG0190023(Lloyd's)

November29, 2000
September
27, 2001

SNG0160194(Lloyd's)
SNG0160242(Lloyd's)

Acetylene black

2003-0194(TÜV SÜD PSB)―

April 2000

DAPL SOUTH

March
2003
―

DAV PVC Tape
Plant

July 30,
2016

Denka Advanced
Materials (Suzhou)Co., Ltd.
Denka Electronic
Materials DalianCo., Ltd.
Denka Polymer
Co., Ltd.
Denka Seiken Co.,Ltd.

May 20,2008

44104169/4000
4(TÜV NORD)
310092-UK（BV）

99-2-0984(TÜV SÜD PSB)
2015-2-2293(TÜV SÜD PSB)
VN/24/0607866
941

Isesaki Plant
Denka Innovation
Center
DPE Pontchartrain

DSPL MERBAUDSPL SERAYADAPL TUAS

3599252(BV)

March 16,
2015
July 20,2015

3038095(BV)―

Products Covered
Chloroprene, acetaldehyde, POVAL, ASR, SAKNOHOL, special
cement additives, cement, alumina fiber, monochloro acetic
acid, sodium monochloroacetate, caustic soda, monosilane,
dichlorosilane, hexachlorodisilan
Fused silica, special cement additives, nitride powder, ceramic
substrates, steel additives, acetylene black, calcium aluminate
cement, FIRELEN, boron, boron carbide powder, thermallyconductive materials, heat sinks, phosphor
Polystyrene, acrylonitrile styrene resins, methyl methacrylate
styrene resins, methyl methacrylate butadiene styrene resins,
methyl methacrylate acrylonitrile butadiene styrene resins,
acrylonitrile butadiene styrene resins, styrene-maleimide
copolymers, styrene-butadiene copolymers, styrene methyl
methacrylate copolymer resins, ethylene-vinyl acetate
copolymers, acrylic synthetic rubber, polystyrene sheet,styrene monomer, ethyl benzene, rain gutters, vinyl tape,corrugated pipes, duct hosing, piping covers, polyvinyl
chloride, acetylene black

Metal substrates, adhesives, emitters, thermallyconductive spacers, thermally conductive adhesive
sheets, electromagnetic shields, ELEGRIP tape,electric power
Packaging tape, plastic films, polyvinyl chloride fibers
Stretch films, food packaging sheets, electronic
packaging sheets, cover tapes, DX FILMs―

Polystyrene, methyl methacrylate styrene resins,
styrenebutadiene copolymers, styrene-maleimide
copolymers
Fused silica filler
Synthetic fiber for hair wigs and hair pieces
PVC adhesive tape

September
19, 2007

310799-UK(BV)

Electronic packaging sheets, cover tapes

January
19, 2016

CNBJ/320896UK（ＢＶ）

January
19, 2016

CNBJ320895-UK（BV)

heat sink――
3359017(BV)CRK Co., Ltd.

――JUSE-RA1970(JUSE)
12 10025631TMS/(TÜV SÜD PSB)
3492172(BV)

Plastic food packaging and plastic sheets

June 23,
2000

September
14, 2001
July 13,
2005

Hinode Kagaku
Kogyo Kaisha Ltd.
Kyushu Plastic
Kogyo k.k.
Nakagawa Techno
Industrial Co., Ltd.

August 1,
2012―

KES2-0622*――

3643869(BV)

Plastic Rain gutters, Plastic drain pipe――

CI/1906(J)/Certi
ficationInternational

Metal gutters, Air conditioning ducts―

November19, 2009―
August 21,
1998
December11, 2011

Clinical chemistry diagnostic reagents, immunologicaldiagnostic reagents, bacteriological and virologicaldiagnostic reagents, sterile cotton swabs
Rubber compounds, rubber tape, rubber molding* Hinode Kagaku Kogyo Kaisha Ltd. acquired KES Step 2 certification, which comprises management items that are virtually
identical with ISO 14001, thereby improving its environmental management.

7
Denka Group CSR Report 2016 References

Fiscal 2015 Environmental Performance by Denka Business Sites andAffiliates
1. Production Volume and Energy Consumption Intensity (Relative to the Fiscal 2012 Level)
In fiscal 2015, energy consumption intensity was 91% of the fiscal 2012 level, muchbetter than our initial target of achieving a 3% reduction over the course of three
years.
Despite the expected production growth in fiscal 2016, we will execute facility
upgrades aimed at reducing energy consumption at each manufacturing plant while
enhancing the efficiency of our power generation facilities. Moreover, we will
promote such new initiatives as stepping up collaboration between the Chiba plantand external companies housed in the same industrial complex to optimize the useof utilities.

2. CO2 Emissions Intensity (from energy sources)

3. CO2 Emissions

CO2 emissions intensity: Calculated based on the converted production volume of benchmark products
In fiscal 2015, our CO2 emissions intensity was lower than the initial target of 1.20, thanks to a decrease in cement production at
the Omi Plant and our systematic efforts to make improvements. For fiscal 2016, we will strive to offset the negative effect of an
estimated increase in the production of cement with high CO 2 emissions intensity through the optimization of utilities at the Chiba
Plant. By doing so, we will maintain overall CO 2 emissions intensity at a level on par with that for fiscal 2015.

4. PRTR Substances
Emissions of PRTR substances decreased approximately 3% year on year (on a nonconsolidated basis) thanks to the appropriate management of acrylonitrile, vinyl
acetate and toluene. For fiscal 2016, we will endeavor to keep the emissions volume
unchanged from fiscal 2015, undertaking an ongoing and systematic reduction effort
mainly at the Chiba Plant.

5. Waste Emissions Ratio
The fiscal 2015 Group total waste emission ratio was down from the fiscal 2014 level,reflecting the review and adjustment of data collected from affiliates during fiscal
2012 through 2015. In addition, our fiscal 2016 target for affiliates’ final landfill
waste is slightly up from the fiscal 2015 level due to increases in overseas silica
production and the resulting generation of waste silica. However, we will strive to
reduce waste generation and promote the effective utilization of recycled waste,
rallying Groupwide strength to maintain our zero-emission status.

8
Denka Group CSR Report 2016 References

6. SOx
In fiscal 2015, SOx emissions decreased approximately 22% year on year. This was
attributable to a decrease in the use of heavy oil resulting from the partial suspensionof the Chiba Plant’s boiler facility operations as well as changes in the compositionof waste accepted by the Omi Plant’s cement production facilities and raw materials
used by domestic affiliates. For fiscal 2016, we anticipate a slight increase in SOx
emissions volume, taking into account changes in the composition of waste used as
cement ingredients and a switchover to conventional fuels at domestic affiliates aswell as computational errors in exhaust gas measurements. Despite this projection,
we will endeavor to maintain the current emissions status.

7. NOxIn fiscal 2015, the NOx emissions intensity decreased thanks to the improved
combustion efficiency of the fused silica production process and a decrease inproduction loss at the Omuta Plant. For fiscal 2016, we anticipate a slight increasein NOx emissions due to a planned increase in overseas silica production, cement
production growth and a change in the composition of waste accepted by the Omi
Plant’s cement production facilities as well as computational errors in exhaust gas
measurements. Nevertheless, we will strive to maintain the current emissions status.

8. Soot and Dust
In fiscal 2015, soot and dust emissions increased approximately 18% year on year
due to an increase in dust emissions attributable to the presence of foreign
substances in limestone processed at the Omi Plant. In fiscal 2016, we will strive to
reduce emissions though the use of limestone with a lower foreign substance content
and the maintenance and reinforcement of dust collectors despite an expected
increase in cement and other production.
Note: Previously presented data of affiliates has been corrected as an error was
found in data collected from Denka Azumin Co., Ltd. over the fiscal 2013–2015
period.

9. COD（BOD）
In fiscal 2015, we successfully reduced COD (BOD) emissions from the Omi Plant,
the Group’s single largest COD (BOD) emitter, through the successful augmentationof wastewater treatment facilities for chloroprene production lines, thereby achieving
a 23% reduction in total emissions compared with the previous fiscal year. In fiscal
2016, we will systematically make further improvements through the efficient
operation of wastewater treatment facilities despite an expected increase inchloroprene production.

Scope of calculation: Figures presented above is based on data from the following production and R&D facilities.
1. 2. and 3.; Denka (six domestic plants); 4.: Denka (six domestic plants) and one domestic affiliate (Hinode Kagaku Kogyo Kaisha Ltd.)5. 6. 7. 8. and 9.: Denka (six domestic plants and Innovation Center), five domestic affiliates (Denka Polymer Co., Ltd., Denka Seiken Co., Ltd., CRK Co., Ltd.,
Hinode Kagaku Kogyo Kaisha Ltd., and Denka Azumin Co., Ltd.) and overseas bases (Merbau, Seraya, Tuas, Tuas South, Suzhou (production and researchsites) Tianjin, Dalian and Vietnam

9Denka Group CSR Report 2016 References

Fiscal 2015 PRTR Substances Emissions and Transfers
The following table shows PRTR substances emitted and transferred in amounts exceeding one ton.
Unit: tons (excluding dioxin)
PRTR Substances

No.

Emissions
Air

Water

Soil

Landfill

Total

Amount Transferred(to the outside)n-Butyl acrylate

7

0

0

0

0

0

1

Acrylonitrile

9

1

0

0

0

1

11

Acetaldehyde

12

0

5

0

0

5

0

Ethyl benzene

53

3

0

0

0

3

30

Ferric chloride

71

0

0

0

0

0

34

Vinyl acetate

134

5

0

0

0

5

0

N-Acetyl dimethylamine

213

0

0

0

0

0

9

N,N-Dimethylformamide

232

0

0

0

0

0

16

Styrene

240

19

0

0

0

19

111

Water soluble copper salt

272

0

5

0

0

5

12

Toluene

300

17

1

0

0

18

27

Bis (2-ethylhexyl) phthalate

355

0

0

0

0

0

1

Hydrogen fluoride and its watersoluble salt

374

0

0

0

0

0

22

n-Hexane

392

0

0

0

0

0

2

Boron compounds

405

0

9

0

0

9

19

2-Ethylhexyl methacrylate

416

0

0

0

0

0

1

Methyl methacrylate

420

2

0

0

0

2

11

47

20

0

0

67

306

26

39

0

0

65

0

Total (tons/year)
Dioxin (mg-TEQ/year)

243

10Denka Group CSR Report 2016 References

Fiscal 2015 Environmental Performance Data—Ratio of Each Business Site
in Overall Emissions
CO2 Emissions Intensity (from energy sources)

PRTR substance emissions

NOX emissions

SOX emissions

Soot and dust emissions

COD (BOD) discharges

Water used

Final landfill waste

11
Denka Group CSR Report 2016 References

Denka’s Policy on Biodiversity and Accomplishments
Policy on Biodiversity and Accomplishments
The Denka Group’s Basic Policy on Biodiversity
In recent years, the general public has voiced growing concerns with regard to such environmental issues as riverand ocean pollution, the micro-plastic contamination of marine environments, coral bleaching due to the global
warming and the possible extinction of some wild animal species (such as those on the “Red List”). Moreover, to
set rules for the handling of biological genetic resources, signatories to COP 10 signed the Nagoya Protocol on
Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization.
On the back of the signing of the Convention on Biological Diversity,* formulation of the UN’s Sustainable
Development Goals and other moves driven by ever stronger sense of urgency toward the preservation ofnatural resources, businesses have been called upon to give due consideration to the sustainable utilization of
resources by protecting biodiversity.
Meanwhile, the Japanese government has announced the “National Biodiversity Strategy of Japan 2012 –2020” based on the September 2012 Cabinet resolution, classifying possible causes of biodiversity crises into
the following four categories: (1) human activities, including development; (2) reduced environmental
conservation efforts; (3) artificially introduced factors, such as alien species and chemical substances; and (4)major changes in the global environment, including global warming and ocean acidification.
In addition, the government established a long-term target for 2050 stating “Through the maintenance andrecovery of biodiversity and the sustainable use of its components, the current biodiversity in Japan will beenriched further and a society in harmony with nature will be achieved where humans can benefit fromecosystem services into the future.” Furthermore, it also determined a short-term target for 2020 as follows;“In order to halt the loss of biodiversity, effective and urgent action will be taken with the aim of achieving theJapanese national targets towards the achievement of the Aichi Biodiversity Targets.”
Accordingly, Denka gives due consideration to these backgrounds and respects international protocols andtargets in the course of developing, producing and providing its products and services. Denka also works intandem with its supply chain to continuously reduce environmental burdens. In these ways, the Company
endeavors to protect biodiversity and thereby contribute to a sustainable society through its corporate activities.
*Convention on Biological Diversity: Based on a resolution at COP 10 in Aichi, signatories to the convention
agreed with 20 individual targets aimed at preventing the loss of biodiversity through effective and urgent
actions to be taken by 2020 and ensuring resilient ecosystems capable of providing basic services.
Fiscal 2015 Achievements
Denka is striving to augment its hydroelectric power generation facilities, which constitute a major renewableenergy source. Concrete initiatives include (1) the construction of the New Omigawa Power Plant (operational
kickoff scheduled for 2018) and (2) the planned construction of the New Himekawa Power Plant No. 6(preliminarily surveys are now under way; completion scheduled for 2022). To minimize the negative impact ofsuch construction, before launching any project Denka undertakes various surveys of the river that the proposedsite is on, the local landscape and the surrounding environment, including flora and fauna, and reflects the survey
results in its facility specifications. In particular, we work with external specialists to minimize the impact on
raptor species’ habitat.
In addition, we engage in cleanup activities covering beaches and rivers near the Omi Plant, removing floating
articles and other waste. We also clean water channels around the premises of the Shibukawa plant.
Future Initiatives
Looking ahead, we will give even more consideration to biodiversity in our planning and construction ofhydroelectric power plants. Simultaneously, we will promote ongoing initiatives to reduce environmental burdens
through the development, production and provision of products and services in collaboration with our supply
chain. We will also help provide environmental education aimed at raising employee awareness about thesignificance of biodiversity and the prudent use of natural resources. In these ways, we will ensure sustainablecorporate activities.

12
Denka Group CSR Report 2016 References

Topics on Our Environmental Activities
Climate Change: Risks and Opportunities
Climate change can affect business activities in various ways. The impact may be immediate and physical, likeflooding or drought, or less direct, for example, causing major disruptions in sources of raw materials, triggering
cost fluctuations or prompting new legislation or the tightening of regulations that restrict business activities.
With this in mind, Denka actively pursues a flexible and varied approach, for example, utilizing clean energy
through the augmentation of hydroelectric power plants, promoting facility upgrades to reduce production-related
energy consumption and introducing novel environment-friendly technologies. Moreover, the Company
implements countermeasures against flooding at its plants, making sure that its facilities are insulated from water
damage.
At the same time, Denka is acutely aware of potential business opportunities brought on by climate change.
For example, there are growing calls for the development and provision of products and technologies that help
save energy and reduce greenhouse gas emissions. With the aim of seizing such an opportunity, the Company
has established a new factory in China to produce thermally conductive substrates for the inverter circuitcomponents installed in high-speed rolling stock, a field where cutting-edge energy-saving technologies are now
being applied. Also, through such means as M&A, the Company is expanding its operations related to special
cement additives—which help realize resource- and time-saving construction methods and reduce repair costs—
in China and Southeast Asia. In line with the Denka100 management plan growth strategy, the Company isfocusing its management resources on these growth fields.

Achievements in Environmental Education
In November and December 2015, we provided training sessions on environmental issues at our six domestic
plants and Innovation Center. With specialists from Head Office’s Technology Division serving as lecturers, thesesessions involved briefings on our initiatives to counter global warming, such as those employing the CDP (Carbon
Disclosure project)* information disclosure scheme, and life cycle assessment (LCA) initiatives as well as thelatest trends in this area. The question and answer sessions following the lectures were brisk, attesting to a
growing awareness of the significance of environmental conservation among our employees.
*CDP: A London-based NPO run by an association of institutional investors from around the world with the aimof encouraging businesses to reduce GHG emissions and mitigate the risk of climate change. Once a year, CDP
compiles and publishes a report on participating companies’ strategies to counter climate change as well as thevolume of their GHG emissions.

Topic: CO2-SUICOM—Eco-Friendly Concrete
CO2-SUICOM is an epoch-making concrete jointly developed by Denka, The Chugoku Electric Power Co., Inc. andKajima Corporation with the aim of reducing the life cycle CO 2 emissions of concrete to zero. Since 2014, when
this development project was selected the Japanese government to receive a subsidy, the aforementioned threecompanies and LANDES Co., Ltd. have been striving to enhance the features and verify the effectiveness of thisproduct. Moreover, the co-development of CO2-SUICOM led to Denka’s inclusion among the winners of the 2014
Environment Minister’s for Global Warming Prevention Activity.

13
Denka Group CSR Report 2016 References

Product and Labor Safety Management Systems
We Consider Safety, Environmental Protection and Quality in All Our Processes, from Raw
Materials Procurement to Research, Production, Logistics, Consumption and Disposal.

Product Safety Management
We ensure product safety at each phase—from development andproduction to use by customers—while focusing on maintaining
and improving quality.
1. Verify the Safety of Raw Materials and Required Quality
Level and Engage in Production Process Design
We select and use raw materials for which safety can be verified
while developing products that conform with customer and legal
demands. We establish production processes that ensure
consistent quality and thus trust in the products we develop.

Flowchart

2. Green Procurement and Purchasing Specifications
We purchase and use raw materials based on the Negative List,
which takes into consideration Japanese and international
environmental management regulations, as well as purchasing
specifications that outline the required characteristics of purchased
raw materials. Consequently, we are striving to manufacture
superior products from quality raw materials and production
processes.
3 & 5. Manufacturing Vendor Audits
We outsource some raw material production processes and the
manufacture of semi-processed goods. We regularly audit
manufacturing vendors based on our in-house standards for
quality, logistics, environmental management and product safety.
4. Maintain/Improve Environmental Protection and Quality
We are undertaking environmental and quality management
operations; gradually expanding the scope of our efforts to include
new products; and working to maintain and improve quality,
environmental protection and safety.
6. Waste Contractor Audits
We commission waste contractors in line with the Waste
Management and Public Cleansing Law, requiring them to issue
manifests and confirm collection. We regularly evaluate the operations and financial positions of these vendors
and visit their waste processing sites.
7. Management of Environmentally Hazardous Substances in Products
We established the Negative List, which lists substances that are considered to be harmful to people and theenvironment. We are taking steps to ensure product quality and safety while reducing environmental load byplacing restrictions on usage during the raw material phase and by decreasing the residual volume of harmful
substances in our products. The Advanced Technologies Research Institute analyzes the amount of residual
substances harmful to the environment contained within raw materials and products. Analytical data verifyingthat the amount of such substances is below regulatory limits is shared with the production, sales, and analysis
and product management departments.
8. Displaying Yellow Cards and Yellow Card Container Labels
We require drivers to carry yellow cards that explain post-accident procedures. We also label containers to ensureswift and proper remediation. We regularly inform drivers of our requirements and conduct emergency drills.
9. Safety Data Sheets (SDS)
We produce these sheets for all products to ensure proper handling according to physical and chemical hazards
and health and environmental risks. The sheets inform customers and help educate employees. We have begun
disseminating information on environmentally hazardous substances contained in our products to customers
through the Material Safety Data Sheet plus (MSDS plus)—which supplements information conveyed on SDS
sheets—and Article Information Sheet (AIS) systems.

14
Denka Group CSR Report 2016 References

Quality Symposia and SQC Education
In line with Companywide quality policy, Denka aims to better employ the statistical quality control (SQC) method
to promote R&D and quality engineering. With this in mind, the Company implements education programs focusedon SQC while holding quality symposia aimed at sharing quality management techniques.
Employee Education on the SQC Method
For the last five years Denka has been focusing on providing practical training on statistical data analysis, and acumulative total of 86 employees have completed this training. Participants have included not only researchersand production staff members but also chiefs and assistant chiefs who are working on the manufacturing frontlines.
Consequently, the statistical quality control (SQC) method is firmly embraced at Group production sites.
We have also appointed SQC leaders at each business site to serve as trainers and are helping them acquire
advanced expertise through quarterly training sessions. In this way, we nurture personnel capable of teachingadvanced SQC application in such areas as experiment planning. Simultaneously, we make sure that personnel
at all business sites are equipped with adequate SQC skills through the preparation and sharing of uniform training
materials. We can see that a sufficient and growing number of employees have acquired strong data analysis
competencies. Going forward, we will work to further enhance our data collection and management systems.
Quality Symposia
On May 20, 2016, we held our sixth quality symposium, with representatives from
Denka plants’ manufacturing, R&D and quality assurance departments, the Denka
Innovation Center and affiliates attending. These representatives gave a total of ninepresentations on SQC application best practices. With the venue having been
relocated from Head Office to the Denka Innovation Center, this round involved
discussions that were particularly active thanks to the inclusion of a number ofyounger engineers among the attendees. In addition to the successful application ofbasic analysis methodologies for statistical process control, presentations included a
growing number of cases involving advanced SQC application in experiment planning.
As such, our efforts to facilitate the understanding and utilization of the SQC method
have steadily progressed.

Giving a presentation at
the quality symposium

Collaborating in Chemical Industry Initiatives
GPS/JIPS (Global Product Strategy/Japan Initiative of Product Stewardship)
The Japan Initiative of Product Stewardship (JIPS)*4 refers to a voluntary initiative undertaken by domestic
chemical manufacturers to control risk associated with chemical substances under the auspices of the Japan
Chemical Industry Association (JCIA). Based on the Global Product Strategy (GPS)*5 promoted by theInternational Council of Chemical Associations (ICCA), the aim of JIPS is to realize the “2020 goal for soundchemicals management” agreed upon at the World Summit on Sustainable Development (WSSD) by supporting
efforts to ensure that “chemicals are used and produced in ways that lead to the minimization of significant
adverse effects on human health and the environment” by 2020.
As a participant in this initiative, Denka is stepping up chemical substances risk assessment and management
operations with due consideration being paid to the entire supply chain. To this end, the Company is collecting
information on hazardous substances and assessing risk based on accurate data pertaining to the manufacture,sale and use of chemical substances. Based on the results of its assessments, Denka prepares and posts GPS/JIPS
Safety Summaries for five substances on the GPS portal site run by the JCIA.
The BIGDr website (a chemical risk assessment support portal) run by JCIA
http://www.jcia-bigdr.jp/jcia-bigdr/en/material/icca_company_list
GPS Chemicals Portal (a chemical information service website) run by ICCA
http://icca.cefic.org/en/Home/Global-Product-Strategy/global-product-strategy/chemical-information-search/
LRI（ Long-Range Research Initiative）
The JCIA, the American Chemistry Council and the European Chemical Industry Council oversee this program.
The program entails conducting long-term basic research to correctly determine if and/or in what mannerchemical substances affect human health and the environment. Based on scientific evidence, the LRI is aimed at
uncovering new insights and developing new assessment methods that will aid in the appropriate management
and risk assessment of chemical substances. The LRI also supports the establishment of international standards
and government policies on relevant matters. In fiscal 2016, we continue to participate in this initiative.
*1. Good Manufacturing Practices (GMP) refers to standards that Japan’s Ministry of Health, Labour and Welfare established in

15
Denka Group CSR Report 2016 Referencesits Ministerial Ordinance on Standards for Manufacturing Control and Quality Control for Drugs and Quasi-drugs.
*2. The Japan Chemical Industry Association created a labeling format to augment the Yellow Card system. The labels present
emergency guideline numbers and United Nations identification numbers for different chemicals transported
simultaneously in relatively small amounts on the same vehicle. The labels aid in the proper handling of these chemicals
in emergencies.
*3. The Joint Article Management Promotion-consortium (JAMP*)’s Material Safety Data Sheet plus (MSDSplus) and Article
Information Sheet (AIS) systems provide standardized formats for presenting information on substances subject tomanagement. MSDSplus is mainly for substances and agents that are upstream in the supply chain. Article manufacturers
produce AISs based on that information. JAMP aims to spread its systems throughout Japan and Southeast Asia.
* JAMP is a cross-industry association established in Japan in 2006 to encourage companies to properly manage
information on substances and compounds as well as on chemical substances in parts, plastics and other articles. JAMP
also establishes mechanisms to disclose and present information on supply-chain products.
*4. Japan Initiative of Product Stewardship (JIPS): Domestic chemical manufacturers’ voluntary initiative to control the risk
chemical substances pose encompassing their supply chains.
*5. Global Product Strategy (GPS): A voluntary initiative promoted by the International Council of Chemical Associations (ICCA)
to control the risk chemical substances pose.

Introducing a System for Handling Customer Complaints
In May 2014, we introduced a system for handling customer complaints on a Companywide basis. Employing acentralized database that contains such information as the content of customer complaints, our responses andsteps taken to prevent recurrences as well as the verification of steps taken, the system is helping us confirm thestatus of each complaint on a real-time basis, thereby speeding up information sharing and response time.
Moreover, we analyze the database to further enhance product quality and customer satisfaction
By addressing all negative customer feedback, including complaints, we are doing our best toaccommodate requests for even greater product quality.

16
Denka Group CSR Report 2016 References

Optimizing Logistics Operations
Response to the Revised Law Concerning the Rational Use of Energy
As a designated shipper,* we are continually working to further streamline such logistics operations as thetransportation and storage of products to reduce environmental burdens while striving to improve customer
satisfaction. In recent years, the domestic transportation industry has been facing a chronic manpower shortage
affecting trucking and coastal shipping operations. Moreover, burgeoning transactions through electroniccommerce triggered a rapid increase in small-lot transportation. These factors worsened the supply-demandbalance, making it difficult to maintain the usually high level of user convenience of our transport services. Denka
thus considers securing stable transportation channels as essential as the streamlining of its logistics operations.
In the three years since launching the Denka100 management plan in 2013, Denka has pursued a growthstrategy that has involved closely scrutinizing every cost element. Under this strategy, Denka has implemented
ongoing initiatives to review transport and storage methods, streamline packaging and optimize the overalllogistics process. Going forward, Denka will strive to further reduce cost and environmental burdens attributable
to its logistics structure without compromising customer satisfaction.
In fiscal 2015, the Company’s total shipment volume was approximately 530 million t-km, up 2.2% comparedwith fiscal 2014, with CO2 emissions attributable to transportation increasing 0.9% year on year. However, energy
consumption intensity decreased 1.4% year on year due to an increase in the shipping of styrene monomer,
which boasts superior transport efficiency. We will continue striving to reduce energy consumption intensity while
optimizing our logistics operations.
*Designated under the Revised Law Concerning the Rational Use of Energy: Business operators whose annual transportation
volume exceeds 30 million t-km are obligated to fulfill specific requirements under said law, including submitting reports on
their energy-saving targets and achievements.

Energy Saving Status* Crude oil equivalent divided by cargo volume
2011

（FY）

2012

2013

2014

2015

Shipment volume (1,000t-km)

521,131532,709567,484

518,700

530,019

Energy consumption intensity*

0.02500.02460.02440.02470.0244104.8%

98.3%

99.1%

101.6%

98.6%

34,70034,80036,70734,061

34,382Year-on-year
CO2 emissions （t-CO2）

Initiatives Undertaken by the Logistics Subcommittee
Logistics Safety Assurance Activities; “Yellow Card Drills” at the Omi Plant
Assuming an accident in the course of the transport of caustic soda, which is a hazardous substance, the Omi
Plant implemented a drill aimed at practicing procedures described in a yellow card attached to this product.
Using an actual container truck, the drill involved simulated reporting and the rehearsal of immediate fixing
measures.
1

4

2

5

3
1) Accident reporting and the provision of
instructions on countermeasures2) A driver checking the leak situation around thetruck3) Alerting passersby using a megaphone4) Reporting the completion of immediate
measures
5) A fire truck deployed in response to the driver’s
request6) Examining and evaluating how procedures
were practiced

6

17
Denka Group CSR Report 2016 ReferencesOccupational Safety and Health Management System／Our Structure forManaging Changes in Production Process
Occupational Safety and Health Management System
Denka conducts risk assessments to monitor the degree of risk at each plant. Based on assessment results, we
comprehensively manage risks and implement improvements. The status of certification acquisition from external
institutions is as in the following table.
Although the Shibukawa Plant has not acquired certification for its occupational safety and healthmanagement system, the plant is implementing safety management and promotion activities equivalent to thoseprescribed by a certified system.

Occupational Safety and Health Management System
Plant Name

Certification System

Certification Number

Acquisition Date

Chiba Plant

OHSAS18001

3444817

February 6, 2007

Omi Plant

OSHMS

10-15-6

March 8, 2010

OHSAS18001

SNG6011133

January 23, 2011

DSPL Seraya Plant

Our Structure for Managing Changes in Production ProcessThis encompasses establishing rules to assess
risks and implement measures where needed forchanges in the 4Ms* during production.
Preliminary safety assessments are importantwhen building plants that use new processes.
Change management comes into play when we
upgrade or modify facilities. Facilities andoperations departments conduct preliminary
safety assessments and meet with inhouse third
parties to discuss risks relating to fires, explosions
and worker safety. In particular, we emphasize
preventing key lapses in areas concerning
disaster prevention and occupational health.
* 4Ms: Man, Machines (facilities, equipment, tools),
Materials (raw materials and components) and Methods (including work methods/operations, processing conditions andformulas)18
Denka Group CSR Report 2016 References

Environment- and Energy-Related Subsidies
We Proactively Utilize Subsidy Programs to Develop Technologies That Lead to Ecological andEnergy-Saving Solutions.

Initiatives under the Government Subsidy Programs
As part of its activities to reduce the environmental burden as well as energy consumption, Denka actively utilizes
subsidy programs provided by the Japanese Ministry of the Environment (MOE) and the Ministry of Economy,
Trade and Industry (METI). It also utilizes subsidies aimed at facilitating public-private cooperation in advanced
technology pilot projects as well as at encouraging Japan-based production and R&D facility construction. During
the fiscal 2011 to 2015 period, Denka received subsidies and approvals for subsidies for 14 projects, all of whichhave proven effective in achieving their objectives. In fiscal 2015, the value of subsidies to which Denka wasentitled totaled ¥1,113 million. Here, we introduce details of projects subsidized during fiscal 2015.
Energy-Saving Initiatives
In fiscal 2015, a program for the rationalization of business operators’ energy use operating under the auspicesof Japan’s Ministry of Trade, Economy and Industry (METI) granted a subsidy to a project undertaken by the Omi
Plant. The project in question involves the introduction of energy-saving facilities at electrolysis plants and thermal
power generation facilities alongside improvements in the calcium carbide production process. The Omi Plant isalso promoting the introduction of high-performance freezing equipment for chloroprene rubber-related facilities
and the upgrading of cement production-related facilities. Meanwhile, the Chiba Plant is engaged in the
introduction of the latest steam and fuel consumption reduction technologies at petrochemical plants. Since fiscal
2014, the latter two projects have been the beneficiaries of the same METI-sponsored subsidy program. In
addition, the Omi Plant’s initiative to introduce high-performance burners for a cement kiln was featured at the40th exhibition of earth environment and energy harmonization (ENEX2016), held from January 27 to 29, 2016
at Tokyo Big Sight, as an example of subsidized projects that Denka is undertaking.
Environmental Load Reduction
Forming a consortium with The Chugoku Electric Power Co., Inc., Kajima Corporation and LANDES Co., Ltd.,
Denka’s Omi Plant launched a project aimed at facilitating the popularization of CO2-SUICOM environment-friendly
concrete. In 2014, this ongoing project was selected for METI’s subsidy program for the verification of carbon
dioxide capture and storage (CCS) technologies. In addition, the product won the 2014 Environment Minister’sAward for Global Warming Prevention Activity.
Advanced Technological Development, etc.
The Omuta Plant is developing SiC power modules by utilizing subsidies provided by METI under the Novel
Semiconductor Power Electronics Project Realizing Low Carbon Emission Society. Utilizing the Subsidy for
Domestic Location Promotion Projects, the Chiba Plant brought its ultra-pure acetylene black production facility
online in 2015.

19
Denka Group CSR Report 2016 References

Category
1

Energysaving2

Energysaving

3

Energysaving

4

EnergysavingProject
Introduction of energy-saving
burners for cement calcining, etc.
Introduction of the latest
technologies at petrochemical plants(styrene monomer-related facilities)
The improvement of heat recovery at
the Omi Plant’s POVAL production
facilities
The introduction of high-performanceburners for cement production
Introduction of high-performancefreezing equipment for chloroprenerubber-related facilities and upgradeof cement production-related
facilities
Introduction of the latest steam andfuel consumption reduction
technologies at petrochemical plants
Introduction of energy-saving
facilities at electrolysis plants andthermal power generation facilities
and the improvement of the calcium
carbide production process
Development of a method to recycle
slaked lime generated from acetylene
manufacture into cement products

Businesssite

Subsidy title,
relevant authority
Subsidy program for therationalization of business
operators’ energy use
Subsidy program for therationalization of business
operators’ energy use
Subsidy program for therationalization of business
operators’ energy use
Subsidy program for therationalization of business
operators’ energy use

Fiscal year

Omi Plant

METI

FY2011

Chiba Plant

METI

Omi Plant

METI

Omi Plant

METI

Omi Plant

METI

Subsidy program for therationalization of business
operators’ energy use

FY2014-2016

Chiba Plant

METI

Subsidy program for therationalization of business
operators’ energy use

FY2014-2016

Omi Plant

METI

Subsidy program for therationalization of business
operators’ energy use

FY2015-2018

Omuta Plant

MOE

FY2011FY2012FY2011-2013
FY2013

5

Energysaving

6

Energysaving

7

Energysaving

8The
environment

9The
environment

Promotion of CO2-SUICOM
environment-friendly concrete

Omi Plant

METI

10

Advanced
technology

Demonstration of a high-frequency
induction furnace for silicon nitride

Omuta Plant

METI

11

Advanced
technology

Demonstration of a boron nitride
production facility (for use in nextgeneration high-heat conductive
fillers)

Omuta Plant

METI

12

Advanced
technology

Establishment of an R&D facility fornext-generation LiBs

Advanced
Technologies
Research
Institute

METI

Program for Accelerating
Breakthrough Innovation for
Practical Applications

FY2014

13

Advanced
technology

Development of high-output andhigh-density SiC power modules
capable of withstanding high voltage

Omuta Plant

METI

Novel Semiconductor PowerElectronics Project Realizing
Low Carbon Emission
Society

FY2014-2016

14

Domestic
business
location

Establishment of a facility for
producing a high-performance
conductive agent (acetylene black)for use in lithium ion batteries

Chiba Plant

METI

Subsidy for Domestic
Location Promotion Projects

FY2013
FY2014

Environment Research andTechnology Development
Fund
Subsidy program forverification of carbon dioxide
capture and storage (CCS)
technologies
Subsidy for Advanced
Technology Demonstrationand Evaluation Facility
Development
Subsidy for Advanced
Technology Demonstrationand Evaluation Facility
Development

20
Denka Group CSR Report 2016 References

FY2011FY2012FY2014-Y2016

FY2012FY2013
FY2013
FY2014

Environmental Accounting
Conservation Costs
Conservation Cost Category

Conservation Costs(millions of yen)

Details

Investments

Expenses（Subtotal）

1,622

2,609

a) Pollution prevention

Environmental burden reduction

492

2,051

b) Environmental conservation

Energy saving

960

115

c) Recycling resources

Effective use of resources

171

443

1) Business site costs2) Upstream and downstream costs

Change of raw materials, etc.

003) Administrative costs

Educational activities

0504) R&D costs

Development of energy saving
products, etc.

380

1,012

5) Social activity costs

Educational activities

2156) Environmental damage costs

Community relations

0

90

0

0

2,004

3,777

7) Others
Total

The Company’s environmental
investments in fiscal 2015
were mainly accounted for bythefollowingitems:
implementationofenvironmental
burdenreduction measures (24%);
introduction of energy-saving
facilities (48%); R&D spending
focused on developing energysaving products (19%); andinvestments for the effective
use of resources (9%).

Conservation Effects
Units

FY2014
Results

FY2015Results

Effects

10,000t

229

210

19

SOx emissions

t

65

54

11

NOx emissions

t

4,252

4,148

104

Soot and dust emissions

t

72

88

-16

COD(BOD) discharges

t

760

578

182

70,363

66,539

3,824

t

79

74

5

1,000t

119

120

-1

t

156

153

3

1,000t34

34

0

Environmental Load
CO2 emissions(from energy and non-energy sources)

Water used

1,000tPRTR substance emissions
Waste
Final landfill waste
CO2 emissions from transportationWe
havecalculated
ourenvironmental load data. For
more details, please also referto the CSR Report 2016 (print
or online version) and site
reports.

Economic Effects
Category

Item

Details

Effects(millions of yen)

Profits

Proceeds from selling waste from core
operations and income from recycling waste

Sales profits

449

Lowering energy costs by conserving energy

Energy saving

407

Reducing waste treatment costs byconserving or recycling resources

Effective use ofresources

42

Cost
reductions

Total

898

21
Denka Group CSR Report 2016 References

To present the actual economic
effects of our environmental
conservation measures, we
calculated proceeds from selling
and recycling waste as well as
cost reductions in the form ofenergy savings and reductions
in waste treatment costs.

The CSR Procurement Policies & Guidelines／Customer Satisfaction Surveys
The CSR Procurement Policies
1. We will maintain respect for human rights
while striving to improve the workplaceenvironment and occupational safety andhealth.
2. We will pursue environment-conscious
procurement, striving to secure safety and to
reduce our impact on the earth’s environment.
3. We will undertake procurement activities basedon compliance with relevant laws, regulations
and corporate ethics.
4. We will purchase raw materials and equipment
and consign construction work bycomprehensively taking into account suchfactors as quality, prices and delivery time aswell as suppliers’ technological capabilities,
supply reliability and environmental
conservation initiatives.
5. We will sincerely engage with our suppliers andtreat them as important business partners,
fostering mutual understanding andtrustworthy relationships with them throughfair business transactions.
6. We will not accept from our suppliers nor
provide them with any gifts or entertainmentof value that are deemed in excess of social
norms or of an inappropriate nature.
7. We will not divulge any non-public informationacquired in confidence from our suppliers in
the course of procurement activities whileproperly managing and protecting theirintellectual property rights.
8. We will maintain an equal partnership with all
suppliers and provide them with equal
opportunities for competition in a fair manner.

The CSR Procurement Guidelines
1. Respect for Human Rights and Occupational
Safety and Health: A supplier is required toinclude respect for fundamental human rights andthe pursuit of occupational safety and health in its
corporate policy.
2. Compliance with Laws and Regulations: A
supplier is required to include compliance with law
and regulations, as well as fair corporate activities
in accordance with social ethics, in its corporate
policy.
3. CSR Promotion: A supplier is required torecognize CSR as being integral to its businessactivities. This entails including sustainable social
and business development in its corporate policy
and establishing an in-house CSR promotion
structure.
4. Environmental Conservation: A supplier isrequired to include environmental conservation
activities in its corporate policy and disclose thestatus of said activities to the general public. The
said activities include the appropriate
management of chemical substances contained inits products and green procurement.
5. Product Quality and Safety: A supplier isrequired to include quality and safety assurance inits corporate policy. Such activities are expected
to take place under an established product quality
management system.
6. Fair and Just Business Transactions: A supplieris required to include fair and just business
transactions in its corporate policy.
7. Risk Management: A supplier is required to makesure that any risk or contingencies it may confront
are managed and controlled through such means
as the appropriate and timely information
disclosure.
8. Contribution to Society: A supplier is required toinclude proactive contribution to local communities
and global society in its corporate policy.
9. Severing Ties with Antisocial Forces: A
supplier is required to not have any relationshipwith antisocial forces, whether they are individuals
or entities.

Customer Satisfaction Surveys
In line with its medium-term quality assurance policy, the Electronics & Innovative Products Division focuses on
securing greater customer satisfaction through superior products and services. Since fiscal 2010, the division has
been conducting periodic surveys of its entire product lineup, specifically, sending out questionnaires to ascertain
customer needs and expectations in a swift and accurate manner. These surveys also help us assess
whether customer feedback is properly reflected in our business operations.
The content of the questionnaires is revised annually. Reviewing the results of these surveys
since their inception, we see an overall improvement in customer feedback regarding theperformance of products and services, with a number of comments providing invaluable insights,
including helpful suggestions as to how partnerships could be deepened. Looking ahead, we will
carefully address customer concerns to improve our products and services.

22
Denka Group CSR Report 2016 References

Educational Support Initiatives
Major Educational Support Initiatives Undertaken by the Denka Group （FY2015）
Experimental
Science
Classes

The Innovation Centerand Head Office

The Summer Holiday Chemical Experiment Show for Children sponsoredby the “Dream Chemistry 21” committee

1

Omi Plant

Geomaru & Nuna to Omoshiro Science and Tazawa Elementary School2

Omuta Plant

Chemistry classes for children (Ecosanc Center in Omuta City and the
Omuta Ecotown Fair)

3

Machida Dai-Yon Elementary School

4

Omuta Plant

Saga University, Miike Technical High School and Omuta High School

5

Chiba Plant

Goi Elementary School (Jointly hosted by Maruzen Petrochemical Co., Ltd.
and Hitachi Chemical Company, Ltd.)

6

Shibukawa Plant

Shibukawa Technical High School and Maebashi Commerce High School

7

Machida Dai-Yon Elementary School

8

The Innovation Center
Plant Tours

The Innovation Center
Internship

Other
Initiatives

Omuta Plant

Toyohashi University of Technology, Miike Technical High School and Yame
Technical High School, National Institute of Technology Kagoshima College
and National Institute of Technology Sasebo College

Chiba Plant

Chiba Technical High School

Head OfficeSponsoring the Fureai Trio’s classical music concerts at elementary schools
nationwide

9Machida City’s Junior Football Tournament (the 35th Denka Cup)

10

The Innovation Center

Experimental Science Classes

Plant Tours

Other Initiatives

1

5

9

2

6

10

3

7

4

8

23
Denka Group CSR Report 2016 ReferencesCorporate Officers (as of June 22, 2016)
Board of Directors / Audit & Supervisory Board / Executive Officers[Executive Officers][Board of Directors]
Representative Director, President

Shinsuke Yoshitaka

President and Chief Executive
Officer

Shinsuke Yoshitaka

Representative Director

Mitsukuni Ayabe

Chief Operating Officer

Mitsukuni Ayabe

Director

Manabu Yamamoto

Senior Managing Executive Officer

Toshiharu Kano

Director

Kenji Nakano

Senior Managing Executive Officer

Hideyuki Udagawa

Director

Tetsuro Maeda

Senior Managing Executive Officer

Manabu Yamamoto

Managing Executive Officer

Norihiro Shimizu

Managing Executive Officer

Sanshiro Matsushita

Managing Executive Officer

Kenji Nakano

Managing Executive Officer

Masaharu Suzuki

Executive Officer

Ken Koizumi

Director
Director
Director

Yasuo Sato
(Outside)
Akio Yamamoto(Outside)
Tatsutsugu Fujihara(Outside)[Audit & Supervisory Board]
Audit & Supervisory Board Member

Shohei Tamaki

Executive Officer

Tetsuya Shinmura

Audit & Supervisory Board Member

Masanori Sakamoto

Executive Officer

Junichi Kimura

Tsunehiro Sasanami(Outside)
Toshio Kinoshita(Outside)

Executive Officer

Toshio Imai

Executive Officer

Hideki Hirano

Executive Officer

Koichi Taguchi

Executive Officer

Hideki Watanabe

Executive Officer

Toyoki Yokoyama

Executive Officer

Koki Tabuchi

Audit & Supervisory Board Member
Audit & Supervisory Board Member

Back row from the left: Tabuchi, Yokoyama, Watanabe, Taguchi, Imai, Shinmura, Suzuki, Shimizu, Kano,
Udagawa, Matsushita, Koizumi, Kimura, Hirano, Tamaki, Sakamoto、Sasanami, Kinoshita
Front row the left: A. Yamamoto, Maeda, M. Yamamoto, Yoshitaka, Ayabe, Nakano, Sato, Fujihara

24
Denka Group CSR Report 2016 References

Outside Directors’ Career Summaries
Yasuo Sato

(September 30, 1942)

April 1965
March 1987
April 1992
March 1999
January 2003
March 2005
June 2005
May 2006
June 2006
February 2008
June 2015

Joined TEIKOKU SANSO Co., Ltd. (present Air Liquide Japan Ltd.)
Director and Vice President of Electronics Div. of Air Liquide Japan Ltd.
Vice President of Worldwide Electronics Div. of L’Air Liquide S.A. (until March 1996)
Representative Director and President of Air Liquide Japan Ltd. (until January 2003)
Director and Chairman of Japan Air Gases Co., Ltd. (until March 2005)
Director and Advisor (part-time) of Air Liquide Japan Ltd. (until September 2007)
Outside Director of Denal Silane Co., Ltd. (until February 2008)
President & CEO of I.B. Associates Co., Ltd. (present)
Outside Auditor of Santen Pharmaceutical Co., Ltd. (until June 2014)
Auditor of Denal Silane Co., Ltd. (until June 2014)
Outside Director of the Company (present)

Akio Yamamoto
April 1974
April 1999
April 2004
Co., Ltd.
April 2007
Ltd.
April 2009
June 2014
June 2015(December 2, 1951)

Joined Mitsui & Co., Ltd.
President of Mitsui & Co., Benelux S.A./N.V.
Vice President of Synthetic Resin & Inorganic Chemical Products Business Unit of Mitsui &Executive officer of Mitsui & Co., Ltd. (until March 2010), President of Mitsui & Co. (Thailand)
Representative Director and President of Mitsui Bussan Plastic Trade Co., Ltd. (present Mitsui& Co. Plastics Ltd.) (until June 2014)
Counselor of Mitsui & Co. Plastics Ltd. (until June 2015)
Outside Director of the Company (present)

Tatsutsugu Fujihara
April 1976
May 2000
April 2002
March 2003
June 2003
April 2005
June 2007
June 2013
June 2014
April 2016
June 2016(November 23, 1952)

Joined The Dai-Ichi Kangyo Bank, Ltd.
General Manager, Osaka Sales Department of The Dai-Ichi Kangyo Bank, Ltd.
General Manager, Osaka Sales Department Ⅲ of Mizuho Corporate Bank, Limited
Executive officer of Mizuho Corporate Bank, Limited (until April 2003), General Manager,
Corporate DepartmentⅡ (until April 2003)
Managing Executive Officer of Orient Corporation (until March 2005)
Managing Executive Officer of Mizuho Corporate Bank, Limited (until March 2007)
Director and President of Mizuho Marketing Experts Co., Ltd. (until March 2013)
Representative Director and President of KSO Corporation
Representative Director and Chairman of KOO Corporation
Director of KSO Corporation (present)
Outside Director of the Company (present)

For detailed reasons for the appointment of each outside director, please visit our website and refer to the Corporate Governance Report posted on the page
entitled “Governance and CSR Promotion Structure” within the “Sustainability” section. The relevant information is also accessible from the notice ofconvocation for the annual General Stockholder’s Meeting, posted under the title “IR Information” in the “IR Information” section.

http://www.denka.co.jp/eng/sustainability/management/governance/pdf/cgreport.pdf
http://www.denka.co.jp/eng/news/pdf/160523_Notice%20of%20Convocation%20of%20the%20157th%20Ordinary%20General%20Meeting%2
0of%20Shareholders.pdf

25
Denka Group CSR Report 2016 References

Consolidated Financial Statements
Consolidated Balance Sheets (As of March 31, 2016)
Millions of yen
Account Item

(Ref.) 156th term

157th term

Assets445,569

443,864

Current assets

170,497

161,876

Cash and deposits

9,219

11,895

Notes and accounts receivable-trade83,17276,009Merchandise and finished goods

44,10343,981Work in process

2,725

3,279

Raw materials and supplies

17,687

16,839Deferred tax assets

1,994

1,753

Other

11,851

8,336

(256)

(218)

275,071

281,988

211,864

214,329

Buildings

36,95740,709Structures

18,125

20,350Machinery and equipment

74,19877,730438

647

Tools, furniture and fixtures

2,481

3,046

Land

63,30363,084344

371

16,014

8,388

1,509

11,131

Software574

917

Goodwill

-

6,401

934

3,813

61,69856,527

Investment securities

55,356

49,843Long-term loans receivable

1,430

1,293

Long-term prepaid expenses

1,463

1,581

915

1,210

2,573

3,368

(42)

(770)

445,569

443,864

Allowance for doubtful accounts
Non-current assets
Property, plant and equipment

VehiclesLease assets
Construction in progress
Intangible assets

Right of using patent
Investments and other assets

Deferred tax assets
Other
Allowance for doubtful accounts
Total
Note: Amounts are rounded down to the nearest million yen.

26
Denka Group CSR Report 2016 References

Millions of yen
Account Item

(Ref.) 156th term

157th term

Liabilities

234,771

227,793

Current liabilities

160,101

147,537

Notes and accounts payable–trade47,401

41,811

Short-term loans payable

47,45642,861

Commercial paper

9,000

5,000

Current portion of long-term loans payable

12,57018,225

Accounts payable–other

12,015

11,543

Income taxes payable

5,525

2,806

Accrued consumption taxes

1,799

1,433

Accrued expenses

8,095

8,972

Provision for bonuses

2,544

2,741

Other

13,692

12,142

Non-current liabilities

74,66980,255

Bonds payable

30,00030,000Long-term loans payable

23,50928,510

Deferred tax liabilities

6,114

3,984

Deferred tax liabilities for land revaluation

8,879

8,407

Net defined benefit liability

5,262

8,314

Other

903

1,039

Net Assets

210,798

216,071

Shareholders’ equity

182,722

190,647

Capital stock

36,99836,998

Capital surplus

49,28449,284Retained earnings

99,080112,335

Treasury stock(2,641)(7,971)

Accumulated other comprehensive income

26,04321,087

Valuation difference on available-for-salesecurities

13,231

10,775

Revaluation reserve for land

9,795

10,267

Foreign currency translation adjustment

3,174

2,739

Remeasurements of defined benefit plans(158)(2,695)

2,032

4,336

445,569

443,864

Non-controlling interests
Total
Note: Amounts are rounded down to the nearest million yen.

27
Denka Group CSR Report 2016 References

Consolidated Statements of Income (From April 1, 2015 to March 31, 2016)
Millions of yen
Account item

(Ref.) 156th term

157th term

Net sales

383,978

369,853

Cost of sales

302,381

278,064

81,596

91,78857,54961,15424,04730,634Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest and dividend income

1,254

1,210

Equity in earnings of affiliates

950

1,097

Other

2,169

4,374

850

3,158

Non-operating expense
Interest expense

962

Other

3,171

Ordinary income

860
4,133

5,909

24,2876,770
27,022Extraordinary income
Gain on sales of non-current assets

2,947

2,947

-

-

Extraordinary loss
Provision of allowance for doubtful accounts
Acquisition-related expenses

-

671

259

632

Difference on change from simple method toprincipled method for retirement benefits-

Income before income taxes

259

544

26,975

Income taxes–current

7,535

Income taxes–deferred

255

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

1,848
25,174

5,488
7,790

438

5,926

19,184

19,247162(225)

19,021

19,472

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

28
Denka Group CSR Report 2016 References

Consolidated Statement of Changes in Net Assets (From April 1, 2015 to March 31, 2016)
Millions of yen
Shareholders’ Equity
CapitalStock
Balance at the beginning of the fiscal year

36,998

CapitalSurplusRetained
Earnings

TreasuryStock

Total Shareholders’Equity49,284

99,080(2,641)

182,722

Change of items during the fiscal year
Dividends from surplus(6,139)(6,139)Profit attributable to owners of parent

19,472

19,472(78)(78)

Change of scope of consolidation
Purchase of treasury stock
Disposal of treasury stock

0(5,330)(5,330)00

Net changes of items other than shareholders’equity-Total changes of items during the fiscal year
Balance at the end of the fiscal year-

0

13,255(5,330)7,924

36,99849,284112,335(7,971)

190,647

Millions of yen
Accumulated Other Comprehensive Income
Valuation
Revaluation
Difference on
Reserve for
Available-for- Land
Sale Securities
Balance at the
beginning of the
fiscal year
Change of items
during the fiscal
year

13,231

9,795

Foreign
Remeasurements
Currency
of Defined Benefit
Translation
Plans
Adjustments
3,174

Total
Accumulated
Other
Comprehensive
Income(158)

Dividends from26,043

Minority
Interests

2,032

Total
Net
Assets

210,798-(6,139)-19,472-(78)-(5,330)-0

surplusProfit attributable toowners parent
Change of scope of
consolidation
Purchase of treasury
stock
Disposal of treasurystock
Net changes of items
other thanshareholders’ equity
Total changes of
items during the
fiscal year
Balance at the end of
the fiscal year

(2,455)

472

(434)

(2,537)(4,955)2,304(2,651)(2,455)

472

(434)

(2,537)(4,955)

2,304

5,273

10,775

10,267

2,739(2,695)21,087

4,336

216,071

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

29
Denka Group CSR Report 2016 ReferencesNon-consolidated Financial Statements
Non-consolidated Balance Sheets (As of March 31, 2016)
Millions of yen(Ref.) 156th term

Account Item
Assets157th term

353,026

345,893

110,729

103,015

Cash and deposits

2,280

4,476

Notes receivable–trade

2,364

3,157

Accounts receivable–trade52,99946,310

Merchandise and finished goods

32,20029,014

Raw materials and supplies

11,333

9,686

Prepaid expenses

960

944

Deferred tax assets

893

699

Short-term loans receivable

950

3,960

6,783

4,772

(36)

(6)

242,296

242,878

175,078

168,557

Buildings

28,35728,305Structures

15,06917,455

Machinery and equipment

55,68553,714363

464

Tools, furniture and fixtures

1,655

2,118

Land

60,15460,153

Construction in progress

13,792

6,344

1,058

1,048

Software423

481

Right of using patent

634

566

66,15973,272

Investment securities

31,501

27,580Stocks of subsidiaries and affiliates

30,29840,593Long-term loans receivable

1,440

2,412

Long-term prepaid expenses

1,201

950

Other investments

1,729

1,743

(12)

(7)

353,026

345,893

Current assets

Other
Allowance for doubtful accounts
Non-current assets
Property, plant and equipment

VehiclesIntangible assets

Investments and other assets

Allowance for doubtful accounts
Total
Note: Amounts are rounded down to the nearest million yen.

30
Denka Group CSR Report 2016 References

Millions of yen
Account Item

(Ref.) 156th term

157th term

Liabilities

194,928

190,142

Current liabilities

123,217

116,531

Accounts payable–trade30,28923,002

Short-term loans payable

27,67527,675

Commercial paper

9,000

5,000

Current portion of long-term loans payable

12,05818,058

Accounts payable–other

10,869

9,808

Income taxes payable

2,744

-

Accrued consumption taxes

1,193

1,012

Accrued expenses

5,995

5,557

Deposits received

21,50024,389Provision for bonuses

1,414

1,488

477

537

Non-current liabilities

71,71073,611

Bonds payable

30,00030,000Long-term loans payable

23,22927,637

Deferred tax liabilities

5,845

4,906

Deferred tax liabilities for land revaluation

8,879

8,407

Provision for retirement benefits

3,619

2,522

Long-term accounts payable–other13

13

Asset retirement obligation

124

125

Net Assets

158,098

155,750

Shareholders’ equity

136,543

135,840

Capital stock

36,99836,998

Capital surplus

49,28449,284

Legal capital surplus

49,28449,284

Other capital surplus-

052,89257,51952,89257,519Reserve for advanced depreciation of
non-current assets

3,781

3,854

Retained earnings brought forward

49,11153,665

Treasury stock(2,632)(7,962)

Valuation and translation adjustments

21,554

19,910

Valuation difference on available for-salesecurities

11,758

9,643

9,795

10,267353,026

345,893

Other

Retained earnings
Other retained earnings

Revaluation reserve for land
Total

31
Denka Group CSR Report 2016 ReferencesNon-consolidated Statements of Income (From April 1, 2015 to March 31, 2016)
Millions of yen
Account Item

(Ref.) 156th term

157th term

Net sales

240,359

225,823

Cost of sales

187,377

169,841

52,982

55,981

40,117

41,87912,864

14,101Gross profit
Selling, general and administrative
expenses
Operating income
Non-operating income
Interest and dividend income

2,996

Other

2,437

4,562
5,434

964

5,527

Non-operating expense
Interest expense
Other

779

702

3,021

Ordinary income

3,801

4,786

14,4985,488
14,140Extraordinary income
Gains on sales of non-current
assets

2,947

2,947

-

-

259

259

632

632

Extraordinary loss
Acquisition-related expenses
Income before income taxes

17,186

Income taxes–current

4,162

Income taxes–deferred

150

Net income

13,508
2,188

4,312

554

12,873

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

32
Denka Group CSR Report 2016 References

2,742
10,766

Non-consolidated Statement of Changes in Net Assets (From April 1, 2015 to March 31, 2016)
Millions of yen
Shareholders’ Equity
Capital Surplus

CapitalStock

Balance at the beginningof the fiscal year
Change of items during
the fiscal year
Provision of reserve foradvanced depreciationof non-current assets
Reversal of reserve foradvanced depreciationof non-current assets

36,998Retained Earnings
Other Retained Earnings

Total
Shareholders’Equity(2,632)

136,543

Other
CapitalSurplus

Total
CapitalSurplus49,284-49,284

3,781

49,111

52,892

-

99

(99)

-

-

-

(26)

26

-

-

Reserve forAdvanced
Depreciation of Noncurrent Assets

Retained
Earnings
Brought
Forward

Total
Retained
Earnings

Treasury
Stock

Legal
CapitalSurplusDividends from surplus-(6,139)(6,139)(6,139)Net income-

10,766

10,766

10,766

Purchase of treasury stock--(5,330)(5,330)

0

-

0

0

-

-

Retirement of treasurystock
Net changes of items
other than shareholders’equityTotal changes of items
during the fiscal year
Balance at the end of the
fiscal year

0

-

-

-

0

0

72

4,554

4,626

(5,330)(703)

36,99849,284049,284

3,854

53,66557,519(7,962)

135,840

Millions of yen
Valuation and Translation Adjustments
Valuation
Difference on
Available- for-Sale
Securities
Balance at the beginning of the fiscal year

11,758

Revaluation
Reserve for Land

9,795

Total Valuation
and Translation
Adjustments

Total
Net Assets

21,554

158,098

-

-

-

-

-

(6,139)-10,766-(5,330)-0Change of items during the fiscal year
Provision of reserve for advanced depreciation of
non-current assets
Reversal of reserve for advanced depreciation of
non-current assets
Dividends from surplus
Net income
Purchase of treasury stock
Disposal of treasury stock
Net changes of items other than shareholders’equity(2,115)472(1,643)(1,643)

Total changes of items during the fiscal year

(2,115)472(1,643)(2,347)

9,643

10,267

19,910155,750

Balance at the end of the fiscal year
Note: Amounts are rounded down to the nearest million yen.

33
Denka Group CSR Report 2016 References

Appendix １

Responsible Care (RC) Activities
Assessment code: A = Reached target B = Partially missed target C = Missed target

Fiscal 2015 RC Objectives and Achievements
Fiscal 2015 (the final year of the Fifth Medium-Term Environmental Plan)
Key Area

Goals●CO2 emissions intensity

Prevent global warming and (from energy sources) : 1.20t/t*●Energy consumption intensity
save(fiscal 2012 base) : 96% or lower*
energyAchievements●CO2 emissions intensity (from energy sources) : 1.17t/t●Energy consumption intensity (fiscal 2012 base) : 91%
・Achieved emissions intensity targets through the production decrease of cement
while systematically implementing improvement measures

Evalu
ation

Print P.20.21.22.23○*Non-consolidated basis

Environmental
Conservation

Prevent air and waterpollution●SOx : 69t●NOx : 4,040t●Soot and dust : 125t
●COD (BOD) : 770t
(Non-consolidated basis)●SOx : 54t●NOx : 4,148t●Soot and dust : 88t●COD (BOD) : 578t
・SOx emissions decreased 17% year on year due to a significant decline in the useof heavy oil, reflecting the partial suspension of boiler facility operations at the Chiba
Plant.
・NOx emissions decreased approximately 2% year on year thanks to the improved
combustion efficiency of the fused silica production process and a decrease inproduction loss, both of which, in turn, helped enhance emissions intensity at the
Omuta Plant.
・Soot and dust emissions increased approximately 18% year on year due to thepresence of foreign substances in limestone processed at the Omi Plant.
・COD (BOD) emissions decreased approximately 23% year on year thanks to the
Omi Plant’s augmentation of its wastewater treatment facilities.

●Total waste generated: 133,000t(Non-consolidated basis)●Total waste generated: 120,280t
・Achieved target by improving yield ratio and promoting resource recycling

Relevant
Pages

References
P.8,11,13,17,19,21

Print P.20,21,23○

References
P.8,11,21

Print P.20,21,23

Reduce waste(zero emissions)○

Print P.20,21,23●Final landfill waste:
Total: 176t
(Non-consolidated basis)●In-house and external landfill: 153t
・Maintained zero-emission status on a non-consolidated basis○

Use resources efficiently

Raise the amount of waste and byproducts used in
cement (recycled resource usage intensity) tocontribute to a recycling-oriented society (590kg/t infiscal 2014)●Recycled resource usage intensity: 541kg/t
・Recycled resource usage intensity decreased, reflecting a decline in cement
production△

Compliance with chemical
substance management
policies●Although a quality management system in conformance with the ISO 9001
standards is firmly in place, we recognize the need to upgrade said system to meet
revised ISO 9001 standards.
●Fiscal 2015 Companywide Quality Policy●Having discovered a shortfall in our compliance with regulations related to certain
1. Improve quality assurance levels Companywide
chemical substances used in some of our products, we undertook a review of all
2. Strengthen compliance with laws and regulations and products’ chemical content, thereby stepping up our chemical substanceenhance customer satisfaction
management.
3. Raise awareness of employees engaged in●We encountered no product liability-related quality problem or major customer
manufacturing
complaint. The total number of customer complaints decreased slightly (fiscal 2014:
4. Enhance technologies to ensure built-in quality
496; fiscal 2015: 359). In addition, we are stepping up measures to improve some
5. Facilitate the adoption of quality control technologies product lines that have been subject to recurring complaints.
and methods at each production site
●Although we strove to improve product quality through daily quality management
activities, small-group initiatives and the use of the SQC method, we recognize thatenhancing quality management practices at production and R&D frontlines is apriority issue.

Chemical substancemanagement and emission
reduction●Companywide emissions of PRTR substances （nonconsolidated basis）: 88t

Ensure safe transportation●Fiscal 2015 Policies for RC Activities
Promote collaboration between departments in charge●We continually implement cross-inspections between worksites in charge ofof logistics management and environment and safety at
logistics, with our affiliates participating in these initiatives from fiscal 2015.
Headquarters and each business site while:●We prepared standard procedure documents with regard to the handling of- Ensuring the safety of workers engaged in loading andaccidents in the course of transportation. In fiscal 2015, we recorded no logistics
unloading
accidents.
- Enhancing capabilities to handle transportation
accidents

Product Safety

References
P.8,11,21●74t (non-consolidated basis)
・Achieved target through the appropriate management of acrylonitrile, vinyl
acetate, toluene and other PRTR substances

References
P.8,11,21

Print P.20,21,23

Print P.28○
References P.7,14

Print P.20,21○
References P.8,10○

References P17

Major Initiatives and Goals for Fiscal 2016
●CO2 emissions intensity (from energy sources): 1.18t/t (non-consolidated basis)
・Strive to achieve a year-on-year 1% reduction through the optimization of utilities at the Chiba Plant
and other energy-saving initiatives despite a trend toward an increase in emissions intensity reflecting
a change in the composition of energy sources (a decline in the ratio of hydroelectric power generation
due to an overall production increase) as well as changes in production mix (an increase in the
production of cement and other products that entail greater CO 2 emissions intensity)●Energy consumption intensity (fiscal 2015 base): 97% or lower (non-consolidated basis)
・Execute facility upgrades to reduce energy consumption while enhancing the efficiency of our power
generation facilities; step up collaboration with other companies housed in the same industrial complex
with the Chiba Plant to optimize the use of utilities●SOx emissions: 60t (Denka); 93t (affiliates)
・Maintain the current level through appropriate emissions management and other ongoing initiatives
despite changes in the composition of recycled waste used as cement ingredients and the type of fuels
used by affiliates●NOx: 4,520t (Denka); 810t (affiliates)
・Pursue ongoing technological advancements to maintain and improve current emissions status
despite such factors as estimated increases in silica production in Singapore and the volume of waste
accepted as cement ingredients●Soot and dust: 78t (Denka); 10t (affiliates)
・Strive to reduce emissions through the use of limestone with a lower foreign substance content andthe maintenance and reinforcement of dust collectors despite an expected increase in cement andother production●COD (BOD): 580t (Denka); 9t (affiliates)
・Systematically reduce emissions by efficiently operating wastewater treatment facilities despite an
expected increase in chloroprene production●Total waste generated:
127,130t (Denka); 4,173t (affiliates)
・Increase yield ratios as well as the volume of waste sold, thereby reducing the volume of total waste
generated and promoting resource recycling●Total in-house and external landfill:
152t (Denka); 401t (affiliates)
・Maintain the zero-emissions status of the entire Group through reduction in waste generation andthe effective utilization of recycled resources despite an estimated increase in final disposal amount ataffiliates, reflecting a silica production increase in Singapore●Raise the recycled resource usage intensity, thereby contributing to the development of a recyclingoriented society●Fiscal 2016 Companywide Quality Policy
Appropriately respond to legal regulations in the course of product development and changes, placing
particular emphasis on the importance of product safety and quality assurance; stringently manage raw
materials and processes; and facilitate engineers’ awareness of built-in quality while helping them
improve their technological skills
0.Place particular emphasis on the importance of product safety and quality assurance
1.Strengthen compliance with laws and regulations and enhance customer satisfaction
2.Improve quality assurance levels Companywide
3. Raise awareness of employees engaged in manufacturing
4. Enhance technologies to ensure built-in quality
5.Utilize quality management technologies and methodologies to enhance our ability to resolve issues●Emissions of PRTR substances:
73t (Denka); 3t (Hinode Kagaku Kogyo)- Continue reducing VOC emissions at the Chiba Plant●Fiscal 2016 Policies for RC Activities
Promote collaboration between departments in charge of logistics management and environment andsafety at Headquarters and each business site while:- Ensuring the safety of workers engaged in loading and unloading- Enhancing capabilities to handle transportation accidentsOccupational
Safety and
HealthEliminate occupational
accidents

Manage employee health

DisasterPrevention

Community
RelationsEliminate major accidents

Maintain community trust●Companywide target: Eliminate major accidents while
continually
reducing the number of occupational accidents●Priority initiatives:
The number of occupational accidents at Denka and its subcontractors totaled 15
1) Create a lively and sound workplace(down seven year on year). Meanwhile, the number of occupational accidents at- Facilitate worksite communication to ensure thedomestic and overseas affiliates was 13 (up six year on year). Regarding someongoing reduction of potential dangers and eliminate
incidents, accident severity may have been exacerbated by workers’ own safety
accidents attributable to operator action
compliance failures.
- Promote safety activities in which each worker is able
to grasp the worth of their efforts●Accidents involving absence from work (fiscal 2014 data in parentheses)
2) Step up hazard prediction systems aimed at
・Denka: one (two); accident frequency: 0.36 (0.19)
preventing major accidents and facility-related
・Subcontractors: one (one); accident frequency: 0.35 (0.17)
incidents- Leverage case studies of accidents at Denka and othercompanies- Utilize systems developed by industrial associations toassist with safety assurance operations●Achieve zero sick leaves attributable to work

Provided mental health education programs at each plant while promoting the Mental
Health Promotion Plan as part of comprehensive countermeasures at Headquarters,
branches and the Innovation Center●Eliminate major accidents●We recorded no major facility accident during fiscal 2015. However, we
experienced two fires and one leak (the number of incidents is unchanged from theprevious fiscal year).
Having identified problems in the handling of combustible materials and the
management of forklifts, we quickly corrected current practices while taking steps
aimed at preventing recurrences.
・Endeavored to enhance our ability to prevent security incidents and disasters by
employing a security capability evaluation system developed by JSSE
・As we did in the previous fiscal year, we invited Dr. Masayoshi Nakamura, aprofessor at Tokyo Institute of Technology, to inspect and give guidance to oursafety countermeasures at calcium carbide and cement production facilities at theOmi Plant.

●Build and maintain relationship of trust with
community residents and local society by enhancing
communication●Actively engaged in such local events as festivals and cleanup activities incommunities surrounding each plant and business base while holding experimental
chemistry classes, thereby building on our relationships of trust with community
members
・Promoted initiatives to vitalize local communities through sports activities by, forexample, sponsoring events at Denka Big Swan Stadium, to which Denka holds thenaming rights, and by supporting the NIIGATA Albirex BB Rabbits
・Continued to dispatch volunteers to Minami Sanriku-cho, which was hit by theGreat East Japan Earthquake. As of August 2016, a total of 580 employees engaged
in volunteer activities on 65 occasions
・Strove to enhance information disclosure with regard to environmental, social andgovernance aspects of our operations by issuing a CSR report, utilizing the
CDP(Carbon Disclosure Project) scheme and participating in an environmental
information disclosure scheme sponsored by Japan’s Ministry of the Environment

Denka Group CSR Report2016 References

Step up the management of each improvement project by setting aside a dedicated budget for facility
improvements related to safety countermeasures, with the aim of ensuring the steady execution of
hazard prediction activities aimed at preventing major accidents and facility-related incidents as well as
initiatives to address potential dangers identified by employees through worksite communication●Companywide targets:
・Reduce the number of major accidents and disasters to zero・Continually improve the occupational safety record
Print P18,19△
References P18○

Print P.26,27

Print P.18,19△
References P.17,18○●Priority initiatives:(1) Step up hazard prediction systems to prevent major accidents (leverage case studies of accidents
at Denka and other companies and utilize assistance systems developed by industrial associations,etc.)(2) Create a lively and sound workplace (facilitate worksite communication to ensure the ongoing
reduction of potential dangers and the eradication of accidents attributable to operator action andpromote safety assurance activities in which every worker plays his/her roles and feels rewarded)(3) Step up the planning and management of facility improvement projects related to safety
countermeasures (conduct facility reviews to re-identify those in need of safety countermeasures,
formulate a three-year action plan, set aside budget and steadily execute said plan)
Promote comprehensive countermeasures against mental health issues through the provision of
employee training and the development of in-house structure
・Assess and improve the status of worksite environments by implementing the Mental Health
Promotion Plan and stress checks●Companywide target: Reduce major facility-related accidents to zero
●Priority initiatives: Step up hazard prediction systems to prevent major accidents and facility-related
incidents- Leverage case studies of accidents at Denka and other companies- Utilize systems developed by industrial associations to assist with safety assurance operations●Maintain robust communications with communities around business sites while contributing to therevitalization of local society●Continuously implement volunteer activities to meet the needs of disaster-stricken areas (Minami
Print P.14-17,29,50Sanriku-cho)
53,54●Support the restoration and reconstruction of areas hit by the Kumamoto Earthquake with the Omuta
Plant serving as a main contributor
References P.23
●Step up the disclosure of such non-financial information as environmental activity data and consider
measures to secure its reliability (e.g., commission a third-party audit to earn accreditation)

Appendix 2

GRI Guidelines
Please see below to find disclosure information listed in the Sustainability Reporting Guidelines Version 4 (G4).
(TheDenka Group CSR Report 2016 includes data related to disclosure standards set out in the GRI Sustainability Reporting Guidelines. However, the report is not fully compliant
with these guidelines.)

DMA and Indicators

Items

Location of Disclosure

General Standard Disclosures
Strategy and Analysis
G4-1

G4-2

a.Provide a statement from the most senior decision-maker of the organization (such as CEO, chair, or
equivalent senior position) about the relevance of sustainability to the organization and the organization's ・To Our Stakeholders (P.4-5)
strategy for addressing sustainability.

a.Provide a description of key impacts, risks, and opportunities.

・To Our Stakeholders (P.4-5)
・Denka's Healthcare-Related Operation (P.8-9)
・Denka Group's CSR (P.10-13)
・Our Business Strategies (P.34-47)
・Climate Change: Risks and Opportunities (Ref. P.13)
・Responsible Care (RC) Activities (Ref. Appendix 1)

Organizational Profile
G4-3

a.Report the name of the organization.

・Corporate Profile (P.6)

G4-4

a.Report the primary brands, products, and services.

・Denka’s Business Operations (P.7)

G4-5

a.Report the location of the organization's headquarters.

・Corporate Profile (P.6)

G4-6

a.Report the number of countries where the organization operates, and names of countries where either
the organization has significant operations or that are specifically relevant to the sustainability topics
covered in the report.

・Corporate Profile (P.6)
・Denka’s Overseas Expansion (P.6-7)
・Site Reports

G4-7

a.Report the nature of ownership and legal form.

・Corporate Profile (P.6)

a.Report the markets served (including geographic breakdown, sectors served, and types of customers
and beneficiaries).
a.Report the scale of the organization, including:‐Total number of employees‐Total number of operations‐Net sales (for private sector organizations) or net revenues(for public sector organizations)‐Total capitalization broken down in terms of debt and equity(for private sector organizations)‐Quantity of products or services provided

・Corporate Profile (P.6)
・Denka’s Overseas Expansion (P.6-7)

G4-8

G4-9

・Corporate Profile (P.6)
・Consolidated Financial Statements (P.26-29)

G4-10

a.Report the total number of employees by employment contract and gender.
b.Report the total number of permanent employees by employment type and gender.
c.Report the total workforce by employees and supervised workers and by gender.
d.Report the total workforce by region and gender.
e.Report whether a substantial portion of the organization's work is performed by workers who are・Developing Comfortable Workplaces (P.26-27)
legally recognized as self-employed, or by individuals other than employees or supervised workers,
including employees and supervised employees of contractors.
f.Report any significant variations in employment numbers (such as seasonal variations in employment in
the tourism or agricultural industries).

G4-11

a.Report the percentage of total employees covered by collective bargaining agreements.

-

G4-12

a.Describe the organization's supply chain.

-

G4-13

a.Report any significant changes during the reporting period regarding the organization's size, structure,
ownership, or its supply chain, including:‐Changes in the location of, or changes in, operations, including facility openings, closings, andexpansions‐Changes in the share capital structure and other capital formation, maintenance, andalteration operations(for private sector organizations)‐Changes in the location of suppliers, the structure of the supply chain, or in relationships
with suppliers,including selection and termination-

a.Report whether and how the precautionary approach or principle is addressed by the organization.

・Corporate Governance (P.30-31)
・Our initiatives to Maintain Safe Operations (P.18-19)
・Quality management:Working with Our Supply Chain (P.28)
・Compliance (Ref. P.4)
・Responsible Care (RC) Activities (Ref. Appendix 1)

G4-15

a.List externally developed economic, environmental and social charters, principles, or other initiatives towhich the organization subscribes or which it endorses.

・Caring for the Global Environment (P.20-21)
・ISO 14001 and 9001 Management Systems (Ref. P.7)
・Product and Labor Safety Management Systems(Ref. P.14-16)
・Occupational Safety and Health Management System(Ref. P.18)

G4-16

a.List memberships of associations (such as industry associations) and national or international advocacy
organizations in which the organization:‐Holds a position on the governance body・Occupational Safety and Health Management System‐Participates in projects or committees(Ref. P.14-16‐Provides substantive funding beyond routine membership dues
‐Views membership as strategic

G4-14

Identified Material Aspects and Boundaries

G4-17

a.List all entities included in the organization's consolidated financial statements or equivalent documents. ・Main Points of the 2016 Edition (P3)b.Whether any entity included in the organization's consolidated financial statements or equivalent・Denka's Business Operations (P7)
documents is not covered by the report.
・Site Reports

G4-18

a.Explain the process for defining the report content and the Aspect Boundaries.
b.Explain how the organization has implemented the Reporting Principles for Defining Report Content.

・Main points of the 2016 Edition (P3)・Denka Group's CSR (P10-13)
・Third-party Opinion (P55)

G4-19

a.List all the material Aspects identified in the process for defining report content.

・Denka Group's CSR (P10-13)

Denka Group CSR Report 2016 References

G4-20a.For each material Aspect,report the Aspect Boundary within the organization, as follows:‐Report whether the Aspect is material within the organization‐If the Aspect is not material for all entities within the organization(as described in G4-17), select one of the following two approaches andreport either:‐The list of entities or groups of entities included in G4-17 forwhich the Aspect is not material or‐The list of entities or groups of entities included in G4-17 forwhich the Aspects is material‐Report any Specific limitation regarding the Aspect Boundary within the organization

-

G4-21

a.For each material Aspect, report the Aspect Boundary outside the organization, as follows:‐Report whether the Aspect is material outside of the organization‐If the Aspect is material outside of the organization, identify theentities,groups of entities or elements for which the Aspect is material.
In addition, describe the geographical location where the Aspect is material
for the entities identified‐Report any specific limitation regarding the Aspect Boundary outside the organization

-

G4-22

a.Report the effect of any restatements of information provided in previous reports, and the reasons forsuch restatements.

・Fiscal 2015 Environmental Performance by Denka BusinessSites and Affiliates (Ref. P.9)

G4-23

a.Report significant changes from previous reporting periods in the Scope and Aspect Boundaries.

・Not applicable

Stakeholder Engagement
G4-24

a.Provide a list of stakeholder groups engaged by the organization.

・Local Communities (P.14-17)
・Engaging with Our Stakeholders (P.24-29)
・Our CSR Initiatives Overseas (P.54)
・Third-party Opinion (P.55)

G4-25

a.Report the Basis for identification and selection of stakeholders with whom to engage.

-a.Report the organization's approach to stakeholder engagement, including frequency of engagement by
type and by stakeholder group, and an indication of whether any of the engagement was undertaken
specifically as part of the report preparation process.

・Local Communities (P.14-17)・Human Resource Development (P.24-25)
・Developing Comfortable Workplaces (P.26-27)
・Quality management:Working with Our Supply Chain (P.28)
・Our CSR Initiatives Overseas (P.54)
・Third-party Opinion (.55)
・Customer Satisfaction Surveys (Ref. P.22)
・Educational Support Initiatives (Ref. P.23)

a.Report the key topics and concerns that have been raised through stakeholder engagement, and how
the organization has responded to those key topics and concerns, including through its reporting.
Stakeholder groups that raised each of the key topics and concerns.

・Denka Group's CSR (P.10-13)
・Local Communities (P.14-17)・Human Resource Development (P.24-25)
・Developing Comfortable Workplaces (P.26-27)
・Quality management:Working with Our Supply Chain (P.28)
・Our CSR Initiatives Overseas (P.54)
・Third-party Opinion (P.55)
・Customer Satisfaction Surveys (Ref. P.22)
・Educational Support Initiatives (Ref. P.23)

G4-26

G4-27

Report Profile
G4-28

a.Reporting period (such as fiscal or calendar year) for information provided.

・Coverage (P.3)

G4-29

a.Date of most recent previous report (if any).

・Back cover

G4-30

a.Reporting cycle (such as annual, biennial).

・Coverage (P.3)

G4-31

a.Provide the contact point for questions regarding the report or its contents.

・Inquiries (P.3)

G4-32

a.Report the'In accordance' option the organization has chosen.
b.Report the GRI Content Index for the chosen option (see tables below).
c.Report the reference to the External Assurance Report, if the report has been externally assured.

a. This table indicates the sections applicable to the Standard
Disclosures, but the report as a whole is not fully compliant
with the Guidelines.
b. GRI Guidelines

G4-33

a.Report the organization’s policy and current practice with regard to seeking external assurance for thereport.
b.If not included in the assurance report accompanying the sustainability report, report the scope andbasis of any external assurance provided.
c.Report the relationship between the organization and the assurance providers.
d.Report whether the highest governance body or senior executives are involved in seeking assurance forthe organization's sustainability report.

Governance
G4-34

a.Report the governance structure of the organization, including committees of the highest governancebody. Committees responsible for decision-making on economic, environmental and social impacts.

G4-35

a.Report the process for delegating authority for economic, environmental and social topics from thehighest governance body to senior executives and other employees.

G4-36

a.Report whether the organization has appointed an executive-level position or positions withresponsibility for economic, environmental and social topics, and whether post holders report directly tothe highest governance body.

G4-37

G4-38

G4-39

・Denka Group's CSR (P.10-13)
・Our initiatives to Maintain Safe Operations (P.18-19)
・Caring for the Global Enironment (P.20-21)
・Corporate Governance (P.30-31)
・Denka Group's CSR (P.10-13)
・Our initiatives to Maintain Safe Operations (P.18-19)
・Caring for the Global Enironment (P.20-21)
・Corporate Governance (P.30-31)
・Corporate Governance (P.30-31)

a.Report processes for consultation between stakeholders and the highest governance body on economic,
environmental and social topics. If consultation is delegated, describe to whom and any feedback
processes to the highest governance body.
a.Report the composition of the highest governance body and its committees by:‐Executive or non-executive‐Independence‐Tenure on the governance body
‐Number of each individual's other significant positions and commitments, and the nature of the・Corporate Governance (P.30-31)
commitments‐Gender‐Membership of under-represented social groups‐Competences relating to economic, environmental and social impacts‐Stakeholder representation
a.Report whether the Chair of the highest governance body is also an executive officer (and, if so, his or
her function within the organization's management and the reasons for this arrangement).

Denka Group CSR Report 2016 References

・Corporate Governance (P.30-31)
・Corporate Officers (Ref. P.24)

G4-40a.Report the Nomination and selection processes for the highest governance body and its committees,
and the criteria used for nominating and selecting highest governance body members, including:‐Whether and how diversity is considered‐Whether and how independence is considered‐Whether and how expertise and experience relating to economic, environmental and social
topics are considered‐Whether and how stakeholders (including shareholders) are involved

・Corporate Governance (P.30-31)

G4-41

a.Report processes for the highest governance body to ensure conflicts of interest are avoided andmanaged. Report whether conflicts of interest are disclosed to stakeholders, including, as a minimum:‐Cross-board membership‐Cross-shareholding with suppliers and other stakeholders‐Existence of controlling shareholder‐Related party disclosures

・Corporate Officers (Ref. P.24)

G4-42

a.Report the highest governance body's and senior executives' roles in the development, approval, andupdating of the organization's purpose, value or mission statements, strategies, policies, and goals
related to economic, environmental and social impacts.

・"Executives" and "Organization Chart" sections underCompany Profile page
http://www.denka.co.jp/eng/corporate/

G4-43

a.Report the measures taken to develop and enhance the highest governance body's collective knowledge
・Third-Party Opinion (P.55)
of economic, environmental and social topics.

G4-44

a.Report the processes for evaluation of the highest governance body’s performance with respect togovernance of economic, environmental and social topics. Report whether such evaluation is independent
or not, and its frequency. Report whether such evaluation is a self-assessment.
b.Report actions taken in response to evaluation of the highest governance body's performance withrespect to governance of economic, environmental and social topics, including, as a minimum, changes inmembership and organizational practice.

G4-45

a.Report the highest governance body’s role in the identification and management of economic,
environmental and social impacts, risks, and opportunities. Include the highest governance body’s role in・Denka Group's CSR (P.10-13)
the implementation of due diligence processes.
・Corporate Governance (P.30-31)
b.Report whether stakeholder consultation is used to support the highest governance body’s identificationand management of economic, environmental and social impacts, risks, and opportunities.

G4-46

a.Report the highest governance body's role in reviewing the effectiveness of the organization's risk
management processes for economic, environmental and social topics.

・Corporate Governance (P.30-31)

G4-47

a.Report the frequency of the highest governance body's review of economic, environmental and social
impacts, risks, and opportunities

・Corporate Governance (P.30-31)

G4-48

a.Report the highest committee or position that formally reviews and approves the organization's
sustainability report and ensures that all material Aspects are covered.

・Governance and CSR Promotion Structure
http://www.denka.co.jp/eng/sustainability/management/gove
rnance/index.html

G4-49
G4-50

G4-51

G4-52
G4-53
G4-54

G4-55

a.Report the process for communicating critical concerns to the highest governance bodya.Report the nature and total number of critical concerns that were communicated to the highest
governance body and the mechanism(s) used to address and resolve them.
a.Report the remuneration policies for the highest governance body and senior executives for the below
types of remuneration:‐Fixed pay and variable pay:
‐Performance-based pay‐Equity-based pay‐Bonuses‐Deferred or vested shares‐Sign-on bonuses or recruitment incentive payments‐Termination payments‐Clawbacks‐Retirement benefits, including the difference between benefit schemes and contribution rates
for the highest governance body, senior executives, and all other employees
b.Report how performance criteria in the remuneration policy relate to the highest governance body's andsenior executives' economic, environmental and social objectives.
a.Report the process for determining remuneration. Report whether remuneration consultants are
involved in determining remuneration and whether they are independent of management. Report anyother relationships which the remuneration consultants have with the organization.
a.Report how stakeholders' views are sought and taken into account regarding remuneration, including
the results of votes on remuneration policies and proposals, if applicable.
a.Report the ratio of the annual total compensation for the organization's highest-paid individual in eachcountry of significant operations to the median annual total compensation for all employees (excluding
the highest-paid individual) in the same country.

-

a.Report the ratio of percentage increase in annual total compensation for the organization's highest-paid
individual in each country of significant operations to the median percentage increase in annual totalcompensation for all employees (excluding the highest-paid individual) in the same country.

Ethics and Integrity
G4-56

a.Describe the organization's values, principles, standards and norms of behavior such as codes ofconduct and codes of ethics.

・Denka's Corporate Philosophy (P.1)
・Denka Principles / The Denka Group Guidelines (Ref. P.3)

G4-57

a.Report the internal and external mechanisms for seeking advice on ethical and lawful behavior, andmatters related to organizational integrity, such as helplines or advice lines.

・Compliance Hotline System (P.31)

G4-58

a.Report the internal and external mechanisms for reporting concerns about unethical or unlawful
behavior, and matters related to organizational integrity, such as escalation through line management,
whistleblowing mechanisms or hotlines.

・Compliance Hotline System (P.31)

Denka Group CSR Report 2016 References

Specific Standard Disclosures
DMA and Indicators

Location of Disclosure

ECONOMICDMA・To Our Stakeholder (P.4-5)
・Denka's Healthcare-Related Operation (P.8-9)
・Denka Group's CSR (P.10-13)
・Caring for the Global Environment (P.20-21)
・Denka 100 New Growth Strategies (P.34-35)

Management Approach

Economic Performance
EC1

Direct economic value generated and distributed・Engaing with Shareholders (P.29)

EC2

Financial implications and other risks and opportunities for the organization's activities due to climatechange・To Our Stakeholder (P.4-5)
・Denka 100 New Growth Strategies (P.34-35)
・Caring for the Global Environment (P.20-21)
・Initiatives to Secure Our Electricity Supply (P.22)
・Climate Change: Risks and Opportunities (Ref. P.13)

EC3

Coverage of the organization's defined benefit plan obligations-

EC4

Financial assistance received from government

・Environment- and Energy-Related Subsidies (Ref. P.19-20)

Market Presence
EC5

Ratios of standard entry level wage by gender compared to local minimum wage at significant locations ofoperation-

EC6

Proportion of senior management hired from the local community at significant locations of operation-

Indirect Economic Impacts
EC7

Development and impact of infrastructure investments and services supported

・Local Communities (P.14-17)
・Educational Support Initiatives (Ref. P.23)

EC8

Significant indirect economic impacts, including the extent of impacts-

ENVIRONMENTAL
EC9

Proportion of spending on local suppliers at significant locations of operation-

ENVIRONMENTAL

Management Approach

・To Our Stakeholder (P.4-5)
・Denka Group's CSR (P.10-13)
・Denka 100 New Growth Strategies (P.34-35)
・Caring for the Global Environment (P.20-21)

EN1

Materials used by weight or volume-

EN2

Percentage of materials used that are recycled input materials

・Overview of Environmental Impacts (P.21)
・Resource Recycling through Cement Production (P.23)

EN3

Energy consumption within the organization

・Overview of Environmental Impacts (P.21)

EN4

Energy consumption outside of the organization-

EN5

Energy intensity

・Fiscal 2015 Environmental Performance by Denka
Business Sites and Affiliates (Ref. P.8)

EN6

Reduction of energy consumption

・Caring for the Global Environment (P.20-21)
・Fiscal 2015 Environmental Performance by Denka
Business Sites and Affiliates (Ref. P.8)
・Optimizing Logistics Operations (Ref. P.17)

EN7

Reductions in energy requirements of products and services

・Caring for the Global Environment (P.20-21)
・Creating Shared Value (CSV): How Denka Products Help
Resolve Social Issues (P.46-49)

EN8

Total water withdrawal by source

・Overview of Environmental Impacts (P.21)
・Fiscal 2015 Environmental Performance Data—Ratio of
Each Business Site in Overall Emissions (Ref. P.11)
・Environmental Performance（Site Reports P.33-38)

EN9

Water sources significantly affected by withdrawal of water・Initiatives to Secure Our Electricity Supply (P.22)

EN10

Percentage and total volume of water recycled and reused-

DMA

Materials

EnergyWater

Biodiversity
EN11

Operational sites owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity
value outside protected areas

EN12

Description of significant impacts of activities, products, and services on biodiversity in protected areas and ・Denka’s Policy on Biodiversity and Accomplishments
areas of high biodiversity value outside protected areas(Ref. P.12)

EN13

Habitats protected or restored

EN14

Total number of IUCN Red List species and national conservation list species with habitats in areas affected ・Denka’s Policy on Biodiversity and Accomplishments
by operations, by level of extinction risk
(Ref. P.12)

・Denka’s Policy on Biodiversity and Accomplishments(Ref. P.12)

Denka Group CSR Report 2016 References

Emissions

Direct greenhouse gas (GHG) emissions (Scope 1)・Caring for the Global Environment (P.20-21)
・Fiscal 2015 Environmental Performance by Denka
Business Sites and Affiliates (Ref. P.8)
・Fiscal 2015 Environmental Performance Data—Ratio of
Each Business Site in Overall Emissions (Ref. P.11)
・Environmental Performance（Site Reports P.33-38)
・Responsible Care (RC) Activities (Ref. Appendix 1)

EN16Energy indirect greenhouse gas (GHG) emissions (Scope 2)・Caring for the Global Environment (P.20)
・Fiscal 2015 Environmental Performance by Denka
Business Sites and Affiliates (Ref. P.8)
・Fiscal 2015 Environmental Performance Data—Ratio of
Each Business Site in Overall Emissions (Ref. P.11)

EN17

Other indirect greenhouse gas (GHG) emissions (Scope 3)

・Optimizing Logistics Operations (Ref. P.17)

EN18

Greenhouse gas (GHG) emissions intensity

・Caring for the Global Environment (P.20-21)
・Fiscal 2015 Environmental Performance by Denka
Business Sites and Affiliates (Ref. P.8)
・Fiscal 2015 Environmental Performance Data—Ratio of
Each Business Site in Overall Emissions (Ref. P.11)
・Responsible Care (RC) Activities (Ref. Appendix 1)

EN19

Reduction of greenhouse gas (GHG) emissions

・Optimizing Logistics Operations (Ref. P.17)
・Responsible Care (RC) Activities (Ref. Appendix 1)

EN20

Emissions of ozone-depleting substances (ODS)

・Our Response to the Revised Act for Rationalized
Use and Proper Management of Fluorocarbons (P.21)

NOx, SOx, and other significant air emissions

・Caring for the Global Environment (P.20-21)
・Fiscal 2015 Environmental Performance by Denka
Business Sites and Affiliates (Ref. P.8)
・Fiscal 2015 Environmental Performance Data—Ratio of
Each Business Site in Overall Emissions (Ref. P.11)
・Responsible Care (RC) Activities (Ref. Appendix 1)・Environmental Performance（Site Reports P.33-38)

EN15

EN21

Effluents and Waste
EN22

Total water discharge by quality and destination

-

EN23

Total weight of waste by type and disposal method

・Caring for the Global Environment (P.20-21)
・Responsible Care (RC) Activities (Ref. Appendix 1)・Environmental Performance（Site Reports P.33-38)

EN24

Total number and volume of significant spills

・Our Initiatives to Maintain Safe Operations (P.18)

EN25

Weight of transported, imported, exported, or treated waste deemed hazardous under the terms of theBasel Convention2 Annex I, II, III, and VIII, and percentage of transported waste shipped internationally

-

EN26

Identity, size, protected status, and biodiversity value of water bodies and related habitats significantly
affected by the organization's discharges of water and runoff-

Products and Services
EN27

Extent of impact mitigation of environmental impacts of products and services

・Resource Recycling through Cement Production (P.23)
・Our Business Strategies (P.36-43)
・Creating Shared Value (CSV): How Denka Products Help
Resolve Social Issues (P.46-49)

EN28

Percentage of products sold and their packaging materials that are reclaimed by category-

Compliance
EN29

Monetary value of significant fines and total number of non-monetary sanctions for non-compliance withenvironmental laws and regulations-

Transport
EN30

Significant environmental impacts of transporting products and other goods and materials for theorganization’s operations, and transporting members of the workforce

・Optimizing Logistics Operations (Ref. P.17)

Total environmental protection expenditures and investments by type・Environmental Accounting (Ref. P.21)

Overall
EN31

Supplier Environmental Assessment
EN32

Percentage of new suppliers that were screened using environmental criteria

-

EN33

Significant actual and potential negative environmental impacts in the supply chain and actions taken-

Environmental Grievance Mechanisms
EN34

Number of grievances about environmental impacts filed, addressed, and resolved through formal
grievance mechanisms-

SOCIAL:LABOR PRACTICES AND DECENT WORKDMA

・Our Initiatives to Maintain Safe Operations (P.18-19)
・Human Resource Development (P.24-25)
・Developing Comfortable Workplaces (P.26-27)

Management Approach

Employment
LA1

Total number and rates of new employee hires and employee turnover by age group, gender, and region

・Developing Comfortable Workplaces (P.26-27)

LA2

Benefits provided to full-time employees that are not provided to temporary or part-time employees, bysignificant locations of operation

・Developing Comfortable Workplaces (P.26-27)

LA3

Return to work and retention rates after parental leave, by gender-

Labor/Management Relations
LA4

Minimum notice periods regarding operational changes, including whether these are specified in collective
agreements

Denka Group CSR Report 2016 References-Occupational Health and Safety
LA5
LA6

Percentage of total workforce represented in formal joint management-worker health and safetycommittees that help monitor and advise on occupational health and safety programs
Type of injury and rates of injury, occupational diseases, lost days, and absenteeism, and total number ofworkrelated fatalities, by region and by gender・Our Initiatives to Maintain Safe Operations (P.18-19)

LA7Workers with high incidence or high risk of diseases related to their occupation-

LA8

Health and safety topics covered in formal agreements with trade unions

・Developing Comfortable Workplaces (P.26-27)

Training and Education
LA9

Average hours of training per year per employee by gender, and by employee category

-

LA10

Programs for skills management and lifelong learning that support the continued employability of
employees and assist them in managing career endings

・Human Resource Development (P.24-25)

LA11

Percentage of employees receiving regular performance and career development reviews, by gender and by
employee category

Diversity and Equal Opportunity
LA12

Composition of governance bodies and breakdown of employees per employee category according togender, age group, minority group membership, and other indicators of diversity

・Developing Comfortable Workplaces (P.26-27)

Equal Remuneration for Women and Men
LA13

Ratio of basic salary and remuneration of women to men by employee category, by significant locations ofoperation-

Supplier Assessment for Labor Practices
LA14

Percentage of new suppliers that were screened using labor practices criteria

-

LA15

Significant actual and potential negative impacts for labor practices in the supply chain and actions taken-

Labor Practices Grievance Mechanisms
LA16

Number of grievances about labor practices filed, addressed, and resolved through formal grievancemechanisms-

SOCIAL:HUMAN RIGHTSDMA・Quality Management: Working with Our Supply Chain(P.28)
・The Denka Group Guidelines ((Ref. P.3)
・The CSR Procurement Policies & Guidelines (Ref. P.22)

Management Approach

Investment
HR1

Total number and percentage of significant investment agreements and contracts that include human rights
clauses or that underwent human rights screening

HR2

Total hours of employee training on human rights policies or procedures concerning aspects of humanrights that are relevant to operations, including the percentage of employees trained・Developing Comfortable Workplace: Our Initiatives toProtect Human Rights (P.26-27)

Non-discrimination
HR3

Total number of incidents of discrimination and corrective actions taken

・Compliance Hotline System (P.31)

Freedom of Association and Collective Bargaining
HR4

Operations and suppliers identified in which the right to exercise freedom of association and collective
bargaining may be violated or at significant risk, and measures taken to support these rights-

Child Labor
HR5

Operations and suppliers identified as having significant risk for incidents of child labor, and measurestaken to contribute to the effective abolition of child labor

・Quality Management: Working with Our Supply Chain(P.28)
・The CSR Procurement Policies & Guidelines (Ref. P.22)

Forced or Compulsory Labor
HR6

Operations and suppliers identified as having significant risk for incidents of forced or compulsory labor,
and measures to contribute to the elimination of all forms of forced or compulsory labor

・Quality Management: Working with Our Supply Chain(P.28)
・The CSR Procurement Policies & Guidelines (Ref. P.22)

Security Practices
HR7

Percentage of security personnel trained in the organization’s human rights policies or procedures that are
relevant to operations-

Indigenous Rights
HR8

Total number of incidents of violations involving rights of indigenous peoples and actions taken-

Assessment
HR9

Total number and percentage of operations that have been subject to human rights reviews or impact
assessments-

Supplier Human Rights Assessment
HR10

Percentage of new suppliers that were screened using human rights criteria

-

HR11

Significant actual and potential negative human rights impacts in the supply chain and actions taken-

Human Rights Grievance Mechanisms
HR12

Number of grievances about human rights impacts filed, addressed, and resolved through formal grievance・Compliance Hotline System (P.31)
mechanisms

Denka Group CSR Report 2016 References

SOCIAL:SOCIAL
DMA

・Our Initiatives to Maintain Safe Operations (P.18-19)
・Local Communities (P.14-17)
・Compliance (Ref. P.4)

Management Approach

Local Communities
SO1

Percentage of operations with implemented local community engagement, impact assessments, anddevelopment programs-

SO2

Operations with significant actual or potential negative impacts on local communities

・Our Initiatives to Maintain Safe Operations (P.18-19)

Anti-corruption
SO3

Total number and percentage of operations assessed for risks related to corruption and the significant risks
identified

SO4

Communication and training on anti-corruption policies and procedures・Compliance (Ref. P.4)

SO5

Confirmed incidents of corruption and actions taken-

Public Policy
SO6

Total value of political contributions by country and recipient/beneficiary-

Anti-competitive Behavior
SO7

Total number of legal actions for anti-competitive behavior, anti-trust, and monopoly practices and theiroutcomes

・Compliance (Ref. P.4)

Compliance
SO8

Monetary value of significant fines and total number of non-monetary sanctions for non-compliance withlaws and regulations-

Supplier Assessment for Impacts on Society
SO9Percentage of new suppliers that were screened using criteria for impacts on society

-

SO10

Significant actual and potential negative impacts on society in the supply chain and actions taken-

Grievance Mechanisms for Impacts on Society
SO11

Number of grievances about impacts on society filed, addressed, and resolved through formal grievancemechanisms-

SOCIAL:PRODUCT RESPONSIBILITY

DMA

・Quality Management: Working with Our Supply Chain(P.28)
・Information Security / Information Disclosure(Ref. P.5-6)
・ISO 9001 Management Systems (Ref. P.7)
・Product and Labor Safety Management Systems(Ref. P.14-16)

Management Approach

Customer Health and Safety
PR1

Percentage of significant product and service categories for which health and safety impacts are assessed
for improvement

・ISO 9001 Management Systems (Ref. P.7)
・Product and Labor Safety Management Systems(Ref. P.14-16)

PR2

Total number of incidents of non-compliance with regulations and voluntary codes concerning the healthand safety impacts of products and services during their life cycle, by type of outcomes・Quality Management: Working with Our Supply Chain(P.28)
・Product and Labor Safety Management Systems(Ref. P.14-16)

Product and Service Labeling
PR3

Type of product and service information required by the organization's procedures for product and service
information and labeling, and percentage of significant product and service categories subject to suchinformation requirements

・Product and Labor Safety Management Systems(Ref. P.14-16)

PR4Total number of incidents of non-compliance with regulations and voluntary codes concerning product andservice information and labeling, by type of outcomes・Quality Management: Working with Our Supply Chain(P.28)
・Product and Labor Safety Management Systems(Ref. P.14-16)

PR5

Results of surveys measuring customer satisfaction

・Customer Satisfaction Surveys (Ref. P.22)

Marketing Communications
PR6

Sale of banned or disputed products-

PR7

Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing
communications, including advertising, promotion, and sponsorship, by type of outcomes

・Information Disclosure (Ref. P.6)

Customer Privacy
PR8

Total number of substantiated complaints regarding breaches of customer privacy and losses of customer
data-

Compliance
PR9

Monetary value of significant fines for non-compliance with laws and regulations concerning the provisionand use of products and services

Denka Group CSR Report 2016 References-