NISSAN CHEMICAL Annual Report 2015

ANNUAL2015
REPORT
For the year ended March 31, 2015

Printed in JapanNISSAN CHEMICAL INDUSTRIES, LTD.

OUR BUSINESS FIELDS & CORPORATE POLICIESPerformance Materials

Corporate ethos

High performance materials thatare used in the cutting-edge
electronic field

Biologicalevaluation

We contribute to society in harmony with the environment, based on our excellent
technologies, products and services.

Fine
organicsynthesis

To take fulladvantage ofthe coretechnologies

Life Sciences

Ultrafineparticle
control

Functional
polymer
designChemicals

As a group growing with customers, we refine our brand power ina good-faith corporate culture and aim to improve our corporate
value through socially meaningful business activities.

Guidelines for action

Basic policies

Chemicals for wide rangeof fields including basic
chemicals that are
essential to the industry

Agrochemicals andpharmaceuticals that
contribute to existence andricher live of human beings

Basic policies

Corporateethos

1 We observe the laws in Japan and overseas, and conduct goodbusiness activities as a member of the international community
2 We appropriately disclose corporate information and secure thetransparency of business administration
3 We voluntarily and proactively engage in activities to protect theenvironment and secure safety
4 We deal with requests from all stakeholders in a sincere manner
5 We foster a cheerful and friendly working environment
6 We nurture the spirit of challenge with strong ambition
7 We cherish an attitude as a good corporate citizen and aworking person

Guidelines for action

Performance Materials
Display materials…Placing SUNEVER® (a polyimide resin for liquid-crystal glass) as our core product, we conduct sales and development of products in
response to the needs of the display market that is expanding mainly in Asia.
Semiconductor materials…We provide materials that are essential for semiconductor manufacturing process to our customers, with a focus on ARC® (a bottom
anti-reflective coating material) and multi layer process materials.
Inorganic colloid…We have been developing new uses of inorganic colloid for various industries over a long period of time. These days, we receive highrecognition in the fields of battery, hard coating agent for optical films, and polishing agent for silicon wafer.
ARC® is registered trade mark of Brewer Science, Inc.

Life Sciences
Agrochemicals…We enrich our product lineups through research anddevelopment of new agrochemicals for major crops across the world andbuying out the agents from other companies, and sell them in Japan andoverseas.
Pharmaceuticals…By making full use of the strategically establishedchemical library, cutting-edge evaluation function and precise organic
synthesis technology, we will keep challenging research anddevelopment of innovative new drugs.

Chemicals
Basic chemicals…We provide our products to a wide range of fields.
Our products are centered on industrial chemicals such as ammonia,
nitric acid and sulfuric acid as well as high-purity products forsemiconductor cleaning.
Fine chemicals…We conduct our business with a focus on chemicals tokeep environment such as special epoxy compound for sealant,
TEPIC®, and bactericide and disinfectant, HI-LITE®

Contents
RESEARCH AND DEVELOPMENTPRODUCTS THAT CONTRIBUTE TO THE SOCIETY
MESSAGE FROM THE PRESIDENTFINANCIAL HIGHLIGHTSVISTA 2015 STAGE ⅡREVIEW OF OPERATIONSCHEMICALS / PERFORMANCE MATERIALSAGROCHEMICALS / PHARMACEUTICALSTRADING / OTHER BUSINESSES
BUSINESS TOPICS

02
04
06
07
08
10
11
12
13

CSR
CSR MANAGEMENTCORPORATE GOVERNANCECOMPLIANCE / RISK MANAGEMENTRESPONSIBLE CARECSR TOPICS
FINANCIAL SECTION
INDEPENDENT AUDITORS’ REPORTOUR NETWORKORGANIZATION CHARTHISTORYCORPORATE PROFILESTOCK INFORMATION

Nissan Chemical Industries, Ltd.

14
15
16
17
18
19
36
37
38
39
40
41

Annual Report 2015

1

RESEARCH AND DEVELOPMENT
Chemical Research Laboratories

Materials Research Laboratories

This is the R&D center based on organic synthesis and material analysis technologies, and isdeveloping new products and technologies in cooperation with personnel inside and outside ourcompany. It not only researches and develops pesticides and medicine, but also functions as"Process Research Center" and "Advanced Analysis Center" of Nissan Chemical, andcontributes to the growth of all businesses.

Through the fusion of our core technologies and open innovation, it creates new unique materials,
swiftly responds to market needs, which are becoming sophisticated and diversified, andconcentrates on the R&D of next-generation materials with the aim of developing new markets.
[Major researches]-R&D of cutting-edge electronic materials, such as those for displays and semiconductors-R&D of inorganic nanoparticle products-R&D of next-generation materials in the fields of life science, environmental energy, optical electronics, etc.

[Major researches]-Creation of new "pesticides" and "medicines," and development of pesticide formulation and active
pharmaceutical ingredients-Search for synthesis routes and production process development for industrializing "candidates fordevelopment and new products" in all fields-Company-wide research support based on material analysis and computational science

Funabashi, Chiba

Fine
organicsynthesis

Funabashi, Chiba

Functional
polymer
designSodegaura, Chiba

Biologicalevaluation

We will keep striv ing to achieve the"dream of chemis try" and become"a value creating enterpri se" with great presence.

Ultrafineparticle
controlToyama, Toyama

Biological Research Laboratories
This conducts various biological evaluations and tests, for creating pesticides, pharmaceuticalproducts, and medical ingredients and putting them into practice.
It is developing environmentally friendly chemicals in the pesticide field and harmless medicines
in the pharmaceutical field, while emphasizing efficacy and safety.
[Major researches]
Pesticide field-Efficacy tests in greenhouses and agricultural fields-Safety tests, assessment of behavior and residue in the environment
Pharmaceutical field-Pathological test from the genetic level to the pathological model-Safety and disposition tests
Medical material field-Development of materials used for medicine creation, medical apparatus, and regenerative medicine
2

Nissan Chemical Industries, Ltd.

Annual Report 2015

Shiraoka, Saitama

Nissan Chemical Industries, Ltd.

Annual Report 2015

3

4

Nissan Chemical Industries, Ltd.

Annual Report 2015

Nissan Chemical Industries, Ltd.

Annual Report 20155

Message from the President

Dear shareholders,

FINANCIAL HIGHLIGHTS
Nissan Chemical Industries, Ltd. and its Consolidated Subsidiaries
Years ended March 31, 2015 and 2014

Financial Data
I would like to express my deep appreciation to all the stockholders

Moreover, this year, one new director was invited from outside,

Consolidated

for the consideration you have always shown for us.

which means two out of the 8 directors are outside directors. This

Net sales
Net income
EquityAmounts per share (in yen and U.S. dollars):
Net income
EquityAlthough personal spending has been weak due to a negativerebound from the last minute surge in demand before theconsumption tax increase and the price rise, the domestic businessenables us to more strictly supervise business execution and makethe management even healthier and more transparent.
Furthermore, under the corporate ethos of “we contribute toconditions in this term moderately recovered because corporate

society in harmony with the environment, based on our excellent

profits of, especially, companies related to export improved by thetechnologies, products and services,” we will promote sound andweak yen.

sincere business activities to gain confidence from all stakeholders

Speaking of the business of our corporate group, thechemicals division benefited from the decrease in crude oil prices
and the weak yen regardless of the sluggish domestic demand.
The performance materials division introduced products that met

through compliance (with laws and norms), further consideration
for the environment, social contribution activities, etc.
We would like to sincerely ask for further understanding andassistance of all stakeholders.

the market needs, which led to the increase of display andThousands of U.S.
Dollars

Millions of Yen

2014¥ 163,658
16,701
136,5522015¥ 171,206
18,199149,7822015$ 1,423,514
151,318
1,245,381¥ 102.11
850.91¥ 113.99
949.71$¥ 121,323
14,995
117,117¥ 128,625
16,496
127,372$ 1,069,469
137,158
1,059,050¥¥ 103.33
807.62

$

0.95
7.90

Non-Consolidated
Net sales
Net income
EquityAmounts per share (in yen and U.S. dollars):
Net income
Equity91.68
729.81

0.86
6.72

Note: The U.S. dollar amounts in this report are given for convenience only and represent translations of Japanese yen at the rate of ¥120.27 to U.S. $1,
the rate prevailing at the end of the term.

semiconductor materials. For the agrochemicals division, although
the increase in consumption taxes had a negative influence on
domestic sales, it was compensated by new paddy-field rice

Financial and Non-Financial Data

pesticides, etc. For overseas sales, in addition to the favorable
agricultural chemicals, Fluralaner (an active ingredient of vetarinary

Net Sales (Millions of Yen)

pharmaceutical) had a large contribution to profit. The

180,000

154,209

pharmaceuticals division was forced to undergo tough

150,000

circumstances due to the appearance of generic drugs of LIVALONet Income (Millions of Yen)

148,579 153,806

163,658

171,206

16,701
16,000Consequently, the sales for the 145 term were 171,206
million yen (an increase of 7,548 million yen from the previous

60,0004,000

30,000increase of 3,100 million yen from the previous term) which is arecord high. The term-end dividend is 22 yen/share, and the

2011

2012

2013

2014

Total Assets (Millions of Yen)

6 yen from the annual dividend of the previous term).
As the future outlook, although a decrease in raw fuel prices
is anticipated, we expect that the business environment including

210,000

customer trends in the electronic material field, increasing trends of

180,000

generic drugs, etc. remains unpredictable. Under these situations,

150,000

we, as a whole group, are going to make every effort to achieve

120,000

the profit goal by absolutely implementing the fundamental

90,000strategies established by “Vista 2015 Stage II,” a three-year mid-

60,000

Kojiro Kinoshita, President

183,399 190,113

207,999

223,854

90,000

2014

*

2015

111,31160.7

118,63162.4

125,568

63.0

136,552

149,782

100

80

65.7

66.9

60

60,00040

30,000

20

0
2012

2013

2014

2015

2011

2012

2013

2014

2015

Performance
Materials
23.1%

Total Sales
213,401*
million yen

Agrochemicals 21.4%: Before elimination of intersegment transaction

The proportion of men and women
working in full-time (2015)
Full-time employees (women)
9.8%
Newly hired
full-time
employees(women)20.0%

Full-time
employees
(men)
90.2%

Newly hired
full-time
employees
(men)
80.0%

30,0002011

Annual Report 20152013

150,000

120,000

0

Nissan Chemical Industries, Ltd.

2012

Equity (Millions of Yen) / Equity Ratio (%)

240,000

199,243

2011

2015

Chemicals
16.1%

Pharmaceuticals
4.1%

0

0

annual dividend including the interim dividend is 36 yen/share (up6Trading

25.5%

8,000

term), and the operating income was 25,347 million yen (anterm management plan, which is to see its last fiscal year.

Other Businesses
9.8%

10,97512,00090,000th

18,19913,87912,953120,000(an anti-cholesterol agent).

Sales Breakdown

20,0000Nissan Chemical Industries, Ltd.

Annual Report 2015

7

Vista 2015 StageⅡ
pharmaceutical additives by expanding our premixed productlineup mixed with other components.

Special topics: Medium-term business plan

Vista 2015 StageⅡ“Only challenge to change makes us keep winning!”

We will establish our status as a chemical products manufacturer withstability and growth capability by establishing the profit basis of ourchemical products and our affiliates on the two vehicles of growth:
functional materials (electronic, inorganic, organic) and life sciences(agrochemicals and pharmaceuticals).
This is exactly the status we envisioned to be in the fiscal year 2015
in the mid-term business plan, the “Vista 2015 Stage Ⅱ,” which wascommenced in April, 2013. Our corporate group has been executing
various steps based on the two fundamental strategies in order to achieve
this status.
As a result, the performance forecast of our group for the fiscal year
2015 is 181.0 billion yen in sales, and operating income of 26.5 billion yen,which are both above the target in the mid-term business plans. Also, ouroperating margin and ROE, which are the main indicators of business, areboth expected to achieve planned levels.

Profit plans(Billion yen)
27

Operating Income

ROE（%）
15

ROE

26.5

26.0

26

25.3
14

25

13.4

24
23

12.7

22

13

22.2
12

21
0

Results for 2013 Results for 2014

Forecast
for 2015

Target of 2015,
Business Plan

1. Changes to the raw material for ammonia
3. Cell biology related material

We decided to change the raw material for ammonia being

We develops materials that can contribute to advanced cell

produced in the Toyama Factory, from naphtha to natural gas

culture technology, such as 3-dimensional culture medium andas part of the structural changes to our ammonia business.

in vitro amplifying agent of platelets of iPS cells.
The in vitro amplifying agents of platelets are used towas started at the Toyama Factory in 1928. Afterwards,

produce large amounts of platelets with hemostatic effectproduction methods from coal, heavy oil and crude oil will befrom iPS cells. With the chronic deficiency of platelets,

introduced in stages according to the changes in the businessthe production of large amounts of platelets from iPS cells

environment. In 1967, the production method was switched tois expected to be a stable source of platelets for blood

the currently used naphtha method in order to expand the sizetransfusion treatment.

and rationalize our facilities.
After the completion of the planned construction in

4. ResearchAugust 2016, we will attempt to stabilize the profits of not

We revised our research structure last October in order toonly ammonia, but also urea, melamine, nitric acid, and otherincrease the efficiency and effectiveness of our materials

derivatives by switching the component from naphtha toresearch. We combined our electronics material research

natural gas, which has smaller cost fluctuation.

0

established the materials research laboratories. In addition,

2. Acceleration of overseas deployment

we newly established the advanced materials research- Overseas site

department and the next-generation materials research

In electronics materials, we have research and production

department, and they are conducting R & D on new materials

sites in South Korea which is our primary market, and alsothat will become the future core of our group.

research functions in Taiwan.

On the other hand, in life sciences, the complete renewal

For agrochemicals, we established a local subsidiary inplan of the biological research laboratories is being conducted

Shanghai, China last year, and targeting to expand sales in thesmoothly. Between the fiscal year 2011 to 2014, a research

expanding Chinese agrochemicals market by enhancing themain building that will be the center of pharmaceuticalmarket support and the promotion activities.

research, a library that will be able to store over 400 thousand- Nurturing of global personnel

First Strategy, "Creation of New
Business and New Products"

customers for anti-fingerprint purposes in the touch panelchemical compounds, artificial climate chamber that will be

We newly established an overseas education system since weindustry. We also have expectations for wide acceptance ofable to reproduce overseas climate, and new agrochemicals

believe that acquirement and nurturing of global personnel iselectroless plating nucleating agents. This material can cut

research building, were completed. We will start construction

essential for overseas business expansion. Last year, as its

1. Entry into veterinary pharmaceuticals field

down the amount of metals used in plating by a factor of ten,on the greenhouse and the cultivation management building,first term, we sent out four people to the U.K., Canada andWe invented Fluralaner, the active ingredient of the veterinaryand does not require vacuum equipment, and can lead to cost

pharmaceutical product, BRAVECTO® developed by MSD Animal

and this maintenance plan is to be completed in March 2017.

China. We will continue sending out about 5 to 10 people

reduction at the user side.

annually.

Health, the global animal health business division of Merck &Our group has always valued integrity as our corporate- “NANOFIBERGEL”

policy. We, as a whole, will enhance our ability to adapt"NANOFIBERGEL" has the touch close to water compared to

to market needs which are becoming even more diverse

other polymer gels, with very little stickiness. It is effective as

and advanced, and work to realize our corporate vision as

Fluralaner contributes significantly to our group profits.

a gel spray substrate, since it solates immediately by applying

BRAVECTO® is a registered trademark“a corporate group that will contribute to the survival andlight pressure with adevelopment offinger, will not clot thehumanity.”Co., Inc.
BRAVECTO® was introduced to the EU market in April 2014,
and the U. S. market in June 2014.

of Intervet International B.V.

3.8μm

nozzle, and will become

2. Coordination withmist when sprayed. It will

Kyushu University

solate immediately upon

- “HYPERTECH”

adhesion, and thus will not

We continued development of

drip.

surface modifier material andWe are fanning out

electroless plating nucleating

this product in cosmetics,

agents, and we obtained

8

The ammonia production through electrolysis of waterlaboratories and our inorganic material research, and newly

13.4

12.7

The Second Strategy, "The Advancementof The Business Structure Innovation"

Nissan Chemical Industries, Ltd.

Nickel wiring formed on glass surface

Annual Report 2015

pharmaceuticals, and

Spray

Cream

The biological research laboratories, agrochemicals research building

A view of the classroom during the overseas education

Nissan Chemical Industries, Ltd.

Annual Report 2015

9

REVIEW OF OPERATIONSNet Sales (Millions of Yen)

CHEMICALSREVIEW OF OPERATIONS

Operating Income

Net Sales (Millions of Yen)

(Millions of Yen)

34,50435,49334,263

1,894(Millions of Yen)

1,897

1,895
SALES RATIOBY SEGMENT

2013*

2014

2015

2013*

2014

2015

2013*:Former segmentation

16.1%

35,41839,130

2013

2014

9,244

45,628
5,042

2015

2013

6,229

2014

SALES RATIOBY SEGMENT

2015

Business Overview

Business Overview

Basic Chemicals operations are continuing to expand around the development of industrial
chemicals such as melamine, sulfuric acid, nitric acid and ammonia.
Fine Chemicals operations are mainly dealing with TEPIC and HI-LITE, which is antibacterial and disinfectant environmental chemicals for swimming pools and wastewater
treatment systems.

The agrochemicals business is based on the manufacturing of proprietary products generated from
Nissan’s discovery research and expanding distribution network for Japan and over 60 countries
throughout the world.

Business Performance

REVIEW OF OPERATIONSNet Sales (Millions of Yen)

“AdBlue” BIB (Bag In Box)PERFORMANCE MATERIALS
Operating Income(Millions of Yen)

37,3682013

42,832

49,371
7,170

2014

2015

2013

8,810

2014

SALES RATIOBY SEGMENT

23.1%

Business Overview®

SUNEVER, ARC and SNOWTEX, key products of our performance materials business,dominate the market in each area with a history of high quality market evaluations. We willcontinue to develop and provide high-value-added niche products in the fields of display,semiconductor and related boundary areas.

Business Performance
NCK Polyimide Factory 2
SUNEVER (LCD alignment coating) mainly for smartphone continued to have healthy sales
due to the transition to IPS. The demand for ARC® (bottom anti-reflective coating for semiconductors) and multi-layer process materials increased due to the miniaturization of semiconductors. The demands for ARC® and multi-layer process materials increased due to the miniaturization of semiconductors. The sales of SNOWTEX (silica sol for polishing electronic materials and non-polishing materials) exceeded previous year for polishing electronic materials.
As a result, the sales of this segment were 49,371 million yen (an increase of 6,538 million yen from the same term of the previous year).
Operating income was 12,019 million yen (an increase of 3,208 million yen).

Nissan Chemical Industries, Ltd.

Annual Report 2015

With regard to the domestic sales, the sales volume of ROUNDUP (non-selective herbicide) and ALTAIR(paddy rice herbicide) increased. Steady sales of TARGA (crop herbicide) and PERMIT (paddy rice and crop
herbicide) and especially the launch of veterinary medical product including Fluralaner in Europe and theUnited States of America contributed to the significant increase of overseas sales.
As a result, the sales of this segment were 45,682 million yen (an increase of 6,551 million yen from thesame term of the previous year). Operating income was 9,244 million yen (an increase of 3,015 million yen).

REVIEW OF OPERATIONSNet Sales (Millions of Yen)

12,67412,019

2015

21.4%

Business Performance

As for Basic Chemicals, the sales of melamine (adhesive agent for particle board) decreased
both domestically and internationally, while sales of high purity ammonia increased due tothe lower price of naphtha. As for Fine Chemicals, the sales of TEPIC (epoxy compound for LED sealants, solder resist, painting) increased
due to weaker yen, while HI-LITE (chlorinated isocyanuric acid for sterilizing) had a hard time with price-cutting competition.
As a result, the sales of this segment were 34,263 million yen (a decrease of 1,229 million yen from the same term of the previous year).
Operating income was 1,895 million yen (a decrease of 1 million yen).

10

AGROCHEMICALSOperating Income

PHARMACEUTICALSOperating Income(Millions of Yen)

11,550

8,812

5,260

4,940
2,308

2013*

ROUNDUP MAXLOAD ®AL

2014

2015

2013*

2014

2015

2013*:Former segmentation

SALES RATIOBY SEGMENT

4.1%

Business Overview
Nissan Chemical entered into the pharmaceutical business in 1982, we keep trying researchand development for innovative medicines by using the strategic chemical library, the stateof-the-art evaluation technology and precise organic synthesis technology.

Business Performance
Export LIVALO had healthy sales mainly in the United States of America and Asia. Domestic
LIVALO sales drastically decreased due to the influence of generic products. On the other
LIVALO ®
hand, “Custom Chemicals” (custom manufacturing and process researching services forpharmaceutical companies) had healthy sales.
As a result, the sales of this segment were 8,812 million yen (a decrease of 2,737 million yen from the same term of the previous year).
Operating income was 2,308 million yen (a decrease of 2,631 million yen).

Nissan Chemical Industries, Ltd.

Annual Report 201511

REVIEW OF OPERATIONSNet Sales (Millions of Yen)

TRADING

BUSINESS TOPICS

Operating Income(Millions of Yen)

46,55750,651

2013

2014

54,390

2015

1,350

1,495

2013

2014

1,679
SALES RATIOBY SEGMENT

2015

25.5%

Business Performance
The sales of display materials related products and agrochemicals products
increased.
As a result, the sales of this segment were 54,390 million yen (an increaseof 3,738 million yen from the same term of the previous year). Operating income was 1,679 million yen (an increase of 183 million yen).

Beijing Branch of Nissei (Shanghai)

REVIEW OF OPERATIONSNet Sales (Millions of Yen)

New Product For Pet Health
We invented Fluralaner, the active ingredient of MSD Animal Health’s BRAVECTO®. MSD Animal Health is a Merck & Co., Inc.’s global animal
health business division.
BRAVECTO® is a veterinary pharmaceutical product developed by MSD, with rapid effectiveness in eliminating ticks and fleas in dogs,
and unlike existing products that usually require monthly doses its effects last for three months. Sales already began in the EU in April 2014
and in the USA in June 2014, and it is now used in over 50 countries worldwide.
In Japan, MSD’s subsidiary Intervet K.K. (IVKK) received permission to sell in May of this year, and began sales in July.
Tick and flea treatment in the Japanese animal medicine is an area that is growing every year, with a market of around 6 billion JPY.
When dogs are infested by ticks, in addition to causing skin inflammation, anemia, and malnutrition, in recent years there have been reportsof human deaths from SFTS (severe fever with thrombocytopenia syndrome) which is carried by ticks, making effective elimination of ticks
important.
BRAVECTO® is 1) a tasty tablet that can 2) deal with both ticks and fleas for 3) up to 3 months, eliminating the need for monthly
administrations by owners. We together with IVKK, are contributing to improving the health of dogs, which are family members, and further
strengthening their bonds with owners through the sales of this tablet.

OTHER BUSINESSES

Operating Income(Millions of Yen)

21,2492013

21,446

2014

20,882

2015

685

2013

757

2014

580

2015

SALES RATIOBY SEGMENT

9.8%

Business Performance
The sales of this segment were 20,882 million yen (a decrease of 563 million yen from the same
term of the previous year). Operating loss was 580 million yen (a decrease of 177 million yen).

Landscaping business(Nissan Green & Landscape Co., Ltd.)

12

Nissan Chemical Industries, Ltd.

Annual Report 2015

Repurchase of our Own Shares
We repurchased our own shares in the market in November 2014, in order to execute a flexible capital strategy in response to changes in thebusiness environment.
1. Type of shares repurchased: Common share of the company
2. Total number of shares repurchased: 2,763,600 shares
3. Total cost of repurchase: 5,999,848,400 yen
4. Period of repurchase: From November 6, 2014, to December 8, 2014 (Trade date based)
5. Method of repurchase: Purchased on the Tokyo Stock Exchange
Furthermore, a total of 3,000,000 shares, including the shares repurchased, were cancelled at the end of January 2015 (1.86% of total numberof shares issued before cancellation).
(Reference) Total number of shares issued (including treasury shares)
As of January 30, 2015: 158,000,000 shares

Nissan Chemical Industries, Ltd.

Annual Report 201513

− CSR −− CSR −

Promotion of CSR

Corporate Governance

The foundation of our business activities is our corporate principle: “Contributing to the society in harmony with the environment based on our
excellent technologies, products, and services”, and we believe that implementation of this principle is our CSR activities.
In order to strengthen our CSR activities, we established the CSR Promotion Council. The Secretariat of the Council is in the Corporate
Planning Department.

The Company understands corporate governance as “the system for sound and efficient management to achieve sustainable and longterm profit for our stakeholders”. In order to achieve it, we are working on the acceleration of management decision-making, clarification ofmanagement and executive operation responsibilities and strengthening the auditing function of the management, compliance system, risk
management and internal control system.
By having directors and executive officers have one-year terms, the responsibility for management and business operations is made clear.

CSR MANAGEMENT

Corporate Governance

CSR Basic Policies
The Company defines the stakeholders as “customers, shareholders/investors, employees, communities/society, and business partners” anddecided the following basic policies in order to respond to the expectations of all stakeholders and strengthen their confidence in us.
1.To strengthen corporate governance and secure stability, soundness and transparency of management.
2.To further focus on appropriate chemical substance management and reduction in environmental load and try to protect global environment.
3.To place value on the communication with all stakeholders and disclose information appropriately.

Corporate Governance System
Corporate Governance System
General Shareholders’ Meeting
Accounting Auditor

ReportBoard of Directors’Meeting

Audit

Board of Auditors’Meeting

Financial Audit(Business Execution System)

Customers

Committee

We provide safe,
secure andexcellent products
and services.

Compliance Committee

Employees
We create a workplace
where individuals arerespected and they canfully demonstrate
their capacities.

14

Nissan Chemical Industries, Ltd.

Annual Report 2015

CorporateGroup

ReportCollaboration

Management
Meeting

Responsible Care Committee

Internal Audit
Department

Quality Assurance Committee

Communities/
Society

Shareholders/
Investors
We enhance corporate
value and provide
appropriate
profit return.

President and CEO

We proactively engage
in social contribution
and regional
interactions.

*GCP Committee
Security Trade Control Committee
Each Divisions &Department

Audit*GCP:Good Clinical Practice (Standard for clinical trials of pharmaceutical products)

Board of Directors’ Meeting
The Company’s board of directors is composedof 8 (including 2 outside directors) directors, andas a rule meetings are held once a month. In
addition to making important decisions regarding
management, by setting the terms for directors andexecutive officers as one year, the responsibility
for management and business operations is madeclear.
Internal Audit
The Company has the Internal Audit Unit, andbased on the Internal Auditing Regulations, fairand independent internal audit is carried out. The
business activities are checked by the Departmentsof Accounting, Legal Matters, Intellectual Property,
and Environment, Safety, and Quality Assurance
from the experts point of view.
Audit by Corporate Auditors
The Company’s board of auditors is composedof 4 (including 3 outside auditors) members, andauditors ensure appropriate cooperation fromstakeholders and carry out auditing plans decided
by the board of auditors, auditing not only the boardof directors, but also attending other important
meetings and auditing other executive actions.

Business
Partners
We establish good andconstructive relationships
through fair andequitable business.

Nissan Chemical Industries, Ltd.

Annual Report 201515

− CSR −− CSR −

Compliance

Responsible Care Activities and International Cooperation

COMPLIANCE / RISK MANAGEMENT

Responsible Care

The Company Group values the management that stresses compliance, because we believe that complying with law, regulations and social
norms are the conditions for survival and development of a corporation. Therefore, we created compliance guidelines and vigorously promotecompliance throughout our group companies. In addition, we have the “Compliance Committee” in place as an organization that maintains andimproves compliance. The chairperson of the Committee is the Company’s president and the members include experts from outside of theCompany.

Compliance Promotion System
Compliance Committee
Committee Chair: President
Committee Vice-Chair: Vice President
Secretariat: Legal Section

Outside Lawyer

Head of Environmental Safety/Quality Assurance Department

Responsible Care is a global initiative to protect the environment, safety, and health (ESH) carried out voluntarily andautonomously by chemical corporations in 58 countries and regions, covering the whole life cycle of chemicals from theirdevelopment to manufacture, shipping, use, and even disposal and recycling after final consumption. The Company has beena member of the Japan Chemical Industry Association’s Responsible Care Committee since its founding, and has signed therevised Responsible Care Global Charter, indicating its intention to cooperate internationally in Responsible Care activities.

Basic Principles concerning Responsible Care
AuditorHead of Corporate Planning Department

Head of Legal Section

The Compliance Committee creates manuals, revises guidelines, and makes decisions on compliance training, as well as receiving reports
from each department chief, section chief, related committees, and subsidiary presidents, periodically auditing the state of compliance, andproviding recommendations for improvements when necessary. The secretariat also holds seminars on various legal guidelines, ensuring
thorough education on obeying laws.
A “Consultation Hotline” was also made for making internal reports on employees of the Group, to receive reports and consultations aboutcompliance. There was one report received in fiscal 2014, but it was not a major legal infraction.

(1) To continuously improve the environment, safety and health performance over the entire lifecycle from development to disposal waste of our products.
(2) To manage our business activities so as to prevent adverse impact on people and environment as well as to take into account the environment, healthand safety during transporting, storing and disposing our products.D12(3) To examine the environment, health and safety aspects from the research and development stage, and to develop products and technologies withlower impact on the environment, health and safety.
(4) To promote conservation of resource and energy, to minimize waste emissions and to recycle waste effectively.
(5) To address the concerns of government officials and public regarding the influence of our products and operations on the environment, health andsafety, while disclosing relevant information and participating in dialogue to promote proper understanding of the issues.
(6) To ensure risk characterization and risk management based on sound scientific information in order to reinforce product stewardship.
(7) To comply laws, regulations and standards, and to promote and meet voluntary initiatives for improving the environment, health and safety.
(8) To ensure accountability in order to address the expectations of domestic and worldwide stakeholders for the promotion of the environment, health and safety.

Nissan Chemical Responsible Care Management System
Risk Management
The Company has established risk management guidelines with basic rules on risk management, in order to prevent the occurrence of various
risks facing the Group, and minimize the damage and impact of those risks that should occur.
In collaboration with the various Committees including Compliance Committee, they extract and evaluate risks of non-compliance of theirworkplace, check the implementation status of countermeasures against the risks, strengthen risk and emergency responses systems, anddevelop Business Continuity Plan (BCP).

Risk Management System
Board of Directors’ Meeting

Board of Directors’ Meeting

Risk Management Meeting
CRO
Risk Management
OfficeDivision or Risk
Department Head

Risk Manager

To achieve the mid-term goals, a management system has been built with PDCA used to manage goals, and it is continually improved. In order
for all plants, laboratories, business divisions and subsidiaries to achieve Responsible Care Mid-term Goals, each office has set mid-term
and annual goals for their Responsible Care activities. The Responsible Care Committee has been established to promote these activities.
The Chair of the committee is the Head of the Environment, Safety and Quality Assurance Department, and committee members include theEnvironment, Safety and Quality Assurance officer, Production Technology Department, Human Resources Department Head, Acquisitions
Department Head, all business department heads, and all office heads. The committee meets once a year, with reports on activities over theyear at each office, activities carried out by the company as a whole, and decisions on the Responsible Care goals for the next year. The
results are reported to the Management Meeting, and after a management review the next years’ Responsible Care goals are established.
All the Company’s plants acquired ISO 14001 (EMS), an international standard for environment management system, and they have been
maintaining and updating the certificate through the certifying body since then.

Compliance Committee
Responsible Care Committee
Quality Assurance Committee
GCP Committee
Security Trade Control Committee

President and Director [RC Chief Executive]
Responsible Care Committee

16

Nissan Chemical Industries, Ltd.

OfficeAnnual Report 2015

Implement inaccordance with theAnnual RC Plan

PLAN

Management Meeting
Management Review
ACT[Chair: Head of Environment, Safety
and Quality Assurance Department]

4 Codes of Responsible Care
Environmental Protection/
Process Safety and Disaster
Prevention/Occupational
Safety and Health/Chemicals
and Products Safety

DO

CHECK
ReportEach Department

Responsible Care Committee(RC report, Annual RC
Plan development)

Consolidated Subsidiary

PlantsLaboratories

Business
Divisions

Subsidiaries

Implementation of corrective actions
Annual RC results report

Nissan Chemical Industries, Ltd.

Implementation of RC
internal audit

Annual Report 201517

CSR TOPICS

FIVE-YEAR SUMMARY

Protect Biodiversity Nissan Biopark Nishi-hongo
Nissan Biopark Nishi-hongo, with the goal of “Creating a space with waterside and SATOYAMA forest biodiversity, as an area for plant
employees and locals to relax,” has had great success from cooperation between the Biopark Support Team, created by former employees of
the Company, and the neighboring Hanabatake Management Group.

Future of the Biopark
Currently, the biopark is in its second stage, and concentrates on two activities. One is expanding the
SATOYAMA forest, with trees seen in SATOYAMA planted in the southwest of the biopark this year. The
other is developing a space to entice creatures that live in SATOYAMA, such as fireflies. The Hotaru Koi
Project involves transplanting freshwater snails that fireflies use as prey, in order to bring fireflies to thestreams of the biopark. In 2014, Heike fireflies were spotted, and they have also been gently glowing thisyear. Now the plan is to also encourage Genji fireflies to come.
In addition to fireflies, dragonflies and birds are also seen more frequently, as a biodiverse space
is made near the waterside. Creating an environment for beetles and butterflies, representatives of
SATOYAMA, is the current plan.

Millions of Yen

Consolidated

2011

2012

2013

2014

2015

Net sales
Operating income
Net income
Total assets
EquityCapital expenditure
Depreciation expense¥ 154,209
19,817
12,953
183,399
111,312
9,588
10,439¥ 148,578
15,477
10,975
190,113
118,6318,251
10,459¥ 153,806
19,54813,879199,243
125,568
8,085
9,544

¥ 163,658
22,246
16,701
207,999
136,552
8,786
8,515

¥ 171,206
25,347
18,199223,854
149,782
9,796
8,452

Amounts per share (in yen):
Net income per share
Equity per share

¥

¥

¥

83.74
766.87¥ 102.11
850.91¥ 113.99
949.71

Financial ratios (%):
Equity ratio
Return on equity

Tulip
The expansive flower field to the north of the biopark has 13,000 tulip bulbs as the star this year, withapproximately 12,000 m². Five types were planted in November 2014 with cooperation from locals. After the
winter, in late April 2015, in cooperation with local preschools and elementary schools there were events
to see and pick the tulips which had blossomed (in order to fatten the bulbs). At the end of May, evenmore preschools and elementary schools helped to dig up the bulbs, and everyone brought home bulbs
separated by color, which had tripled in number since being planted. With comments about filling the fieldwith tulips, these activities will likely become even more active.

Responsible Care Award Grand Prix Ceremony
In fiscal 2013, the biopark received the grand prix of the Responsible Care (RC) Awards held by the Japan Chemical Industry Association. These awards were
newly established in 2013, and the biopark is the first recipient of the grand prix. At the time of screening,they highly evaluated the biopark’s activities for providing neighboring residents with recreation areas
while offering opportunities to learn biodiversity, based on the collaboration between community and thecompany. On Monday, November 9, 2014, local residents were also invited to the RC Award Grand Prix
Ceremony at Nissan Biopark Nishi-Hongo. This ceremony was celebrating the receipt of the RC grand prixon May 16 of the same year, in recognition of the Toyama plant’s efforts in creating and maintaining Nissan
Biopark Nishi-hongo. After the speech by the plant chief at the beginning, there were congratulations
from the chairpersons of the local Hongo Koizumi Region Promotion Association and the Usaka Furusato
Development Promotion Association. At the memorial tree planting afterwards, four representatives of theCompany and local area planted a Japanese yew. It is hoped that this tree will grow into a symbol of the
biopark, warmly watching those who gather in this place.

75.94
654.3364.52
697.36

60.7
11.9

62.4
9.5

63.0
11.4

65.7
12.7

66.9
12.7

¥ 115,643
16,735
12,344
163,955
98,535¥ 110,623
13,0959,980
169,080
105,002¥ 114,441
16,36911,755
175,032
109,155¥ 121,323
18,48914,995
180,971
117,117¥ 128,625
20,864
16,496
193,828
127,372

¥

¥

¥

¥

91.68
729.81
30.0¥ 103.33
807.6236.0

Non-Consolidated
Net sales
Operating income
Net income
Total assets
EquityAmounts per share (in yen):
Net income per share
Equity per share
Cash dividends per share
Financial ratios (%):
Equity ratio
Year-end statistics:
Number of shareholders
Number of employees

72.37
579.2324.0

58.67
617.2424.0

70.92
666.63
26.0

60.1

62.1

62.4

64.7

65.7

16,596
1,750

16,403
1,726

14,434
1,712

12,6891,707

11,877
1,721

Conclusion

The Toyama plant will continue to engage in communication with local residents through a variety of events, and actively work on
environmental conservation initiatives such as Nissan Biopark Nishi-hongo. We hope this biopark will be an oasis for plant workers
and local residents.

18

Nissan Chemical Industries, Ltd.

Annual Report 2015

Nissan Chemical Industries, Ltd.

Annual Report 2015

19

FINANCIAL REVIEW
Financial Review for the Year Ended March 31, 2015

Overview

product) was a big hit. As for Pharmaceutical Segment,

were 223,854 million yen (an increase of 15,855 million yen

During the year ended March 31, 2015 (from April 1, 2014 todomestic LIVALO (anti-cholesterol agent) sales decreased duefrom the previous year).

March 31, 2015), the domestic consumption was weak due toto the influence of generic products.

Due to the acquisitions on plant and equipment of
Performance Materials division, net cash used in investing

While liabilities with interest decreased, due to thethe price hike and the influence of a counter reaction to theincrease of deferred tax liability, total liabilities as of March 31,

activities for the year ended March 31, 2015 were 8,076 million
yen (13,471 million yen for the previous year).

rush demand before the consumption tax raise. However,Operating Results2015 were 72,590 million yen (an increase of 2,414 million yen

export related companies improved their earnings by weaker

As a result, the sales for this term were 171,206 million yen (anfrom the previous year).

yen and the domestic economy was on the gradual recovery

increase of 7,548 million yen from the same term of the previous

trend. With regard to our group business, Chemicals Segmentyear). All operating income, ordinary income and net income

was benefited by lower price fuels and weaker yen. As forwere highest ever. Operating income was 25,347 million yen (anPerformance Materials Segment, Display Materials andincrease of 3,100 million yen). Ordinary income was 26,391

Semiconductor Materials increased their sales due to themillion yen (an increase of 2,667 million yen). Net income wasproducts matched to the market needs.

18,199 million yen (an increase of 1,497 million yen).

As for Agrochemicals Segment, while domestic sales were

Due to the decrease in borrowings and dividends payment,

Net Assets as of March 31, 2015 were 151,263 million

net cash used in financing activities for the year ended Marchyen (an increase of 13,441 million yen from the previous year).

31, 2015 were 12,127 million yen (11,802 million yen for the
As a result, cash and cash equivalents at the end of thisfrom the previous year.

term were 31,343 million yen, reflecting 337 million yen effectCash Flow Analysisof exchange rate changes. It increased by 585 million yen from

Deducting income taxes paid from income before income taxes

the previous year (30,757 million yen for the previous year).

Financial Position

and minority interests, depreciation and gain and loss on

loss. As for overseas sales, pesticide had steady sales as well

Due to the increase of notes and accounts receivable-trade,working capital, net cash provided by operating activities for

as Fluralaner (the active ingredient of veterinary pharmaceuticalstocks and investment securities, assets as of March 31, 2015

the year ended March 31, 2015 were 20,452 million yen

Operating Income (Millions of Yen)

Net Income per Share (Yen)

30,000120

25,347100

20,00083.74

19,54880

183,399

190,113207,999
199,243

60.7

62.4

63.0

65.7

66.9

75.94

25

2012

2013

Nissan Chemical Industries, Ltd.

2014

2015

Annual Report 2015

0

24

26

11.9

50,000

9.5

11.4

12.7

12.7

10

2011

2012

2013

2014

2015

0

6,000

15
20

2011

24

9,000

9,796
9,544
8,786
8,515 8,452
8,251 8,085

30

100,000

0

9,588
30

20

20

10,439 10,459

40

40

5,000

12,00030

60

10,000403560

150,000

Capital Expenditures/
Depreciation Expense (Millions of Yen)
36

50

64.52

15,477

15,00070

223.854200,000

Dividends per Share (Yen)

Equity Ratio (%)
Return on Equity (%)

250,000

102.11

22,246
19,817

Total Assets (Millions of Yen)
113.99previous year).

As a result, equity ratio was 66.9%, an increase of 1.2%

affected by tax raise, new paddy rice herbicide recovered the

25,00020(23,759 million yen for the previous year).

2011

2012

2013

2014

2015

0

10

3,000

5

2011

2012

2013

2014

2015

0

2011

2012

2013

2014

2015

0

2011

2012

2013

Nissan Chemical Industries, Ltd.

2014

2015

Annual Report 2015

21

CONSOLIDATED BALANCE SHEETS
Nissan Chemical Industries, Ltd. and Consolidated Subsidiaries
For the years ended March 31, 2015 and 2014

(Thousands of
U.S. Dollars)(Millions of Yen)
As of
March 31, 2015

As ofMarch 31, 2014

As ofMarch 31, 2015

Current assets
Cash and deposits
Notes and accounts receivable-trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Accounts receivable-other
Short-term loans receivable
Deferred tax assets
Other
Allowance for doubtful accounts
Total current assets¥ 31,343
58,13328,123
59
7,885
2,097
841
3,102
1,890
(29)
133,448¥ 30,757
54,041
26,775
51
6,353
2,390
706
2,882
1,477
(22)
125,413$ 260,605
483,354
233,832491
65,561
17,436
6,993
25,792
15,715(241)
1,109,570

Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation and impairment loss
Buildings and structures, net
Machinery, equipment and vehicles
Accumulated depreciation and impairment loss
Machinery, equipment and vehicles, net
Tools, furniture and fixtures
Accumulated depreciation and impairment loss
Tools, furniture and fixtures, net
Land
Leased assets
Accumulated depreciation
Leased assets, net
Construction in progress
Total property, plant and equipment

58,217(35,514)22,702
114,888(104,548)
10,33930,704(26,876)
3,828
9,318
225
(150)
74
864
47,12853,393(33,873)
19,520110,022(101,402)
8,619
28,893(25,319)
3,573
9,374
261
(142)
118
3,768
44,975

484,053(295,286)
188,759955,251(869,277)
85,965
255,292(223,464)
31,82877,476
1,871(1,247)615
7,184
391,852ASSETS

Intangible assets
Goodwill
Software
Other
Total intangible assets
Investments and other assets
Investment securities
Long-term loans receivable
Deferred tax assets
Net defined benefit asset
Other
Allowance for doubtful accounts
Total Investments and other assets
Total non-current assets
Total assets

22

Nissan Chemical Industries, Ltd.

Annual Report 2015

4
308
361
674

481
342
427
1,251

33
2,561
3,002
5,604

38,711
21
52
2,064
1,940
(187)
42,60390,406¥ 223,854

33,57026

321,867175
432
17,161
16,130(1,555)354,228
751,692$ 1,861,262

As ofMarch 31, 2015

As ofMarch 31, 2014

As ofMarch 31, 2015

¥ 15,077¥ 16,067$ 125,360

Short-term loans payable

22,951

23,579190,829

Current portion of long-term loans payable

3,090

7,066

25,692

Income taxes payable

3,807

3,512

31,654

Provision for bonuses

1,827

1,754

15,191

24

27

200

Liabilities
Current liabilities
Notes and accounts payable-trade

Provision for directors' bonuses
Provision for environmental measures

315

-

2,619

Other

8,940

7,646

74,333

Total Current liabilities

56,03459,652465,902

Long-term loans payable

9,060

5,450

75,331

Deferred tax liabilities

4,621

2,863

38,422

704

-

5,853

Non-current liabilities

Provision for business structure improvement
Net defined benefit liability

174

244

1,447

Other

1,997

1,966

16,604

Total non-current liabilities

16,556

10,524

137,657

72,59070,176

603,559

Capital stock

18,942

18,942

157,496

Capital surplus

13,611

13,611

113,170

Retained earnings

105,602

98,121

878,041

(584)

(698)

(4,856)

137,572

129,975

1,143,860

10,676

6,138

88,767

Total liabilities

Net assets
Shareholders' equity

Treasury stocks
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities

55
1,265
1,681
(240)
36,35882,585¥ 207,999(Thousands of
U.S. Dollars)(Millions of Yen)

Foreign currency translation adjustment

894

20

7,433

Remeasurements of defined benefit plans

639

417

5,313

12,2106,576

101,522

Minority interests

1,481

1,269

12,314

Total net assets

151,263

137,822

1,257,695¥ 223,854¥ 207,999$ 1,861,262

Total accumulated other comprehensive income

Total liabilities and net assets

Nissan Chemical Industries, Ltd.

Annual Report 201523

CONSOLIDATED STATEMENTS OF INCOMECONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Nissan Chemical Industries, Ltd. and Consolidated Subsidiaries
For the years ended March 31, 2015 and 2014

Consolidated Statements of Income
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity method
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Loss on disposal of non-current assets
Plant stop loss
Environmental expenses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Extraordinary losses
Product compensation expense
Business structure improvement expenses
Total extraordinary losses
Income before income taxes and minority interests
Income taxes-current
Income taxes-deferred
Total income taxes
Income before minority interests
Minority interests in income
Net income

Income before minority interests
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to minority interests

As ofMarch 31, 2015

As ofMarch 31, 2014

As ofMarch 31, 2015

¥ 171,206
106,184
65,022
39,67525,347¥ 163,658
103,277
60,381
38,134
22,246$ 1,423,514
882,880
540,634
329,883
210,751

20
613
1,093
476
697
2,901

21
638
960
415
968
3,004

166
5,097
9,088
3,958
5,795
24,121

211
332
420
315
577
1,857
26,391
-

280
284
598
363
1,527
23,723
-

1,754
2,760
3,492
2,619
4,798
15,440219,431
-

390
704
1,095
25,296
7,265
(351)
6,914
18,381
182¥ 18,199

23,723
6,901
(64)
6,836
16,887

3,243
5,853
9,105
210,327
60,406(2,918)57,487
152,831186¥ 16,701

1,513$ 151,318

24

Nissan Chemical Industries, Ltd.

Annual Report 2015

(Thousands of
U.S. Dollars)(Millions of Yen)
As of
March 31, 2015

As ofMarch 31, 2014

As ofMarch 31, 2015

¥ 18,381¥ 16,887$ 152,831

4,538
952
221
0
5,712
24,094

2,598
924
(1)
3,521
20,40837,732
7,916
1,838
0
47,493200,333¥

23,832261

20,152¥

Nissan Chemical Industries, Ltd. and Consolidated Subsidiaries
For the years ended March 31, 2014

(Thousands of
U.S. Dollars)(Millions of Yen)

Consolidated Statements of Comprehensive Income

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

255$(Millions of Yen)
Shareholders' equity

Capital stock

Balance as of April 1, 2013

Capital surplus Retained earnings Treasury stocks

Total
shareholders'equity¥ 18,942¥ 13,611¥ 91,360¥ (1,053)¥ 122,861

18,942

13,611

91,360(1,053)

122,861

Cumulative effects of changes in accounting policies-

Restated balance
Changes of items during period
Dividends of surplus(4,584)(4,584)

Net income

16,701

16,701

Purchase of treasury stocks(5,001)(5,001)00

Disposal of treasury stocks

0

Retirement of treasury stocks(0)(5,355)

5,355

-

-

-

6,760

354

7,114

¥ 18,942¥ 13,611¥ 98,121¥ (698)¥ 129,975

Net changes of items other than shareholders' equity
Total changes of items during period
Balance as of March 31, 2014

Accumulated other comprehensive income
Total
Valuation
accumulateddifference on Foreign currency Remeasurements
otheravailable-for-saletranslationof defined benefit comprehensive
securities
adjustment
plansincomeMinority interests

Balance as of April 1, 2013

¥ 3,541¥ (834)¥-¥ 2,707¥ 1,132¥ 126,701-

Cumulative effects of changes in accounting policies
Restated balance

Total
net assets

3,541

(834)

-

2,707

1,132

126,701

Changes of items during period
Dividends of surplus(4,584)

Net income

16,701

Purchase of treasury stocks(5,001)

Disposal of treasury stocks

0

Retirement of treasury stocks-

Net changes of items other than shareholders’ equity
Total changes of items during period
Balance as of March 31, 2014

2,596

854

417

3,869

137

4,006

2,596

854

417

3,869

137

11,12120¥ 417¥ 6,576¥ 1,269¥ 137,822¥ 6,138¥

198,154
2,170

Nissan Chemical Industries, Ltd.

Annual Report 2015

25

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETSCONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

Nissan Chemical Industries, Ltd. and Consolidated Subsidiaries
For the years ended March 31, 2015

Nissan Chemical Industries, Ltd. and Consolidated Subsidiaries
For the years ended March 31, 2015

(Millions of Yen)

(Thousands of U.S. Dollars)

Shareholders' equity

Capital stock

Capital surplus Retained earnings Treasury stocks¥ 18,942

Balance as of April 1, 2014

Shareholders' equity¥ 13,611

Cumulative effects of changes in accounting policies¥ 98,121¥ (698)213

Restated balance

18,942

13,611

98,334

Total
shareholders'equity¥ 129,975
213

(698)

130,189

Changes of items during period

Capital stock$ 157,496

Balance as of April 1, 2014

$ 113,170

Cumulative effects of changes in accounting policies$ 815,839$ (5,804)

1,771

Restated balance

157,496

113,170817,610

Total
shareholders'equity$ 1,080,693
1,771(5,804)

1,082,473

Changes of items during period

Dividends of surplus(4,814)(4,814)

Dividends of surplus(40,027)(40,027)

Net income

18,19918,199Net income

151,318

151,318(6,001)(6,001)

Purchase of treasury stocks

00

Disposal of treasury stocks

0

6,116

-

Retirement of treasury stocks(1)$ 157,496

Purchase of treasury stocks
Disposal of treasury stocks

0

Retirement of treasury stocks(0)(6,116)

Net changes of items other than shareholders’ equity

Balance as of March 31, 2015

-

-

7,268

114

7,382

¥ 18,942¥ 13,611¥ 105,602¥ (584)¥ 137,572

Total changes of items during period
Balance as of March 31, 2015

Accumulated other comprehensive income¥ 6,138

¥ 20

¥ 417

¥ 6,576¥ 1,269

Cumulative effects of changes in accounting policies
Restated balance(49,896)00(50,852)

50,852--60,431

948

61,379$ 113,170$ 878,041$ (4,856)$ 1,143,860

Accumulated other comprehensive income

Total
Valuation
accumulateddifference on Foreign currency Remeasurements
otheravailable-for-saletranslationof defined benefit comprehensive
securities
adjustment
plansincomeMinority interests

Balance as of April 1, 2014

(49,896)

Net changes of items other than shareholders’ equity

Total changes of items during period

Total
Valuation
accumulateddifference on Foreign currency Remeasurements
otheravailable-for-saletranslationof defined benefit comprehensive
securities
adjustment
plansincomeMinority interests

Total
net assets¥ 137,822
213

6,138

20

417

6,576

1,269

138,035

Changes of items during period

Balance as of April 1, 2014

$ 51,035$ 166$ 3,467$ 54,677$ 10,551

Cumulative effects of changes in accounting policies
Restated balance

Total
net assets$ 1,145,938
1,771

51,035

166

3,467

54,677

10,551

1,147,709

Changes of items during period

Dividends of surplus(4,814)

Dividends of surplus(40,027)

Net income

18,199Net income

151,318

Purchase of treasury stocks(6,001)

Purchase of treasury stocks(49,896)

Disposal of treasury stocks

0

Disposal of treasury stocks

0

Retirement of treasury stocks-

Retirement of treasury stocks-

Net changes of items other than shareholders’ equity
Total changes of items during period
Balance as of March 31, 201526

Capital surplus Retained earnings Treasury stocks

Nissan Chemical Industries, Ltd.

Annual Report 2015

4,538

873

221

5,633

211

5,845

4,538

873

221

5,633

211

13,227¥10,676

¥ 894

¥ 639

¥ 12,210¥ 1,481¥ 151,263

Net changes of items other than shareholders’ equity
Total changes of items during period
Balance as of March 31, 2015

37,732

7,259

1,838

46,836

1,754

48,59937,732

7,259

1,838

46,836

1,754

109,978$ 88,767$ 7,433$ 5,313$ 101,522$ 12,314$ 1,257,695

Nissan Chemical Industries, Ltd.

Annual Report 201527

CONSOLIDATED STATEMENTS OF CASH FLOWS
Nissan Chemical Industries, Ltd. and Consolidated Subsidiaries
For the years ended March 31, 2015 and 2014

(Thousands of
U.S. Dollars)(Millions of Yen)

Cash flows from Operating Activities
Income (loss) before income taxes and minority interests

As ofMarch 31, 2015

As ofMarch 31, 2014

As ofMarch 31, 2015

¥ 25,296¥ 23,723$ 210,327

Depreciation

8,452

8,515

70,275Interest and dividends income

(633)

(660)

(5,263)

Interest expenses

211

280

1,754

Increase (decrease) in provision for business structure improvement

704

-

5,853

Loss (gain) on disposal of non-current assets

332

284

2,760

Decrease (increase) in notes and accounts receivable-trade(3,775)3,019(31,388)

Decrease (increase) in inventories(2,659)(2,281)(22,109)

Increase (decrease) in notes and accounts payable-trade(950)(1,529)(7,899)

Other

(714)

(1,898)(5,937)

Subtotal

26,26329,454

218,367Interest and dividends income received

1,386

1,620

11,524

Interest expenses paid

(223)

(287)

(1,854)

Income taxes paid

(6,974)(7,027)(57,986)

Net cash provided by (used in) operating activities

20,452

23,759170,051

Cash flows from Investing Activities
Purchase of investment securities(1,648)(918)(13,703)

Proceeds from sales of investment securities

3,077

245

25,584-(2,749)-(8,568)(8,999)(71,240)

Payments for retirement of property, plant and equipment

(253)

(170)

(2,104)

Net decrease (increase) in short-term loans receivable

(109)

(400)

(906)

Purchase of stocks of subsidiaries and affiliates
Purchase of property, plant and equipment

Other
Net cash provided by (used in) investing activities

(574)

(478)

(4,773)(8,076)(13,471)(67,149)

Cash flows from Financing Activities
Net increase (decrease) in short-term loans payable

(854)

(588)

(7,101)

Proceeds from long-term loans payable

6,700

4,000

55,708

Repayments of long-term loans payable(7,066)(5,533)(58,751)

Cash dividends paid

(4,814)(4,584)(40,027)

(50)

(48)

(416)

(6,001)(5,001)(49,896)

(40)

(45)

(333)

(12,127)(11,802)(100,831)

337

393

2,802

Cash dividends paid to minority shareholders
Purchase of treasury stock
Other
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

28

Nissan Chemical Industries, Ltd.

Annual Report 2015

585

(1,120)4,864

30,75731,878

255,733¥ 31,343¥ 30,757$ 260,605

Notes to Consolidated Financial Statements
1. Basis of presenting Consolidated Financial Statements
The accompanying consolidated financial statements have been
prepared in accordance with the provisions set forth in the Japanese
Financial Instruments and Exchange Act and its related accounting
regulations and in conformity with accounting principles gen erally
accepted in Japan (“J-GAAP”), which are different from applicationand disclosure requirements of accounting principles generally
accepted in the United States of America(“US -GAAP”) andInternational Financial Reporting Standards(“IFRS”) in certain
aspects.
The accompanying consolidated financial statements are
expressed in Japanese yen as of and for the year ended March 31,
2015, the currency of the country in which the Company operates.
The translation of Japanese yen amounts into United States dollar
amounts is included solely for the convenience of readers outside
Japan and has been made at the rate of ¥120.27 to $1, theapproximate closing rate of exchange reported by the Tokyo Foreign
Exchange Market on March 31, 2015. Such translation should not
be construed as a representation that the Japanese yen amounts
could be converted into U.S. Dollars at this or any other rate.
2. Summary of Significant Accounting Policies
a. Consolidation
The consolidated financial statements as of March 31, 2015, include
the account of the Company and its significant 9 subsidiaries (9 in2014). The Company does not consolidate other subsidiaries due t otheir immateriality in terms of consolidated total assets, net sales,
net income and retained earnings. Under th e control or influence
concept, those companies in which the Company, directly or
indirectly, is able to exercise control over operations are fully
consolidated, and those companies over which the Company has
the ability to exercise significant influence are accounted for by theequity method. Investments in 2 (2 in 2014) affiliated companies areaccounted for by the equity method. The assets and liabilities of the
newly consolidated subsidiaries are stated at fair value as of theirrespective dates of acquisition.
All significant inter-company balances and transactions havebeen eliminated in consolidation.
All material unrealized profits included in assets resulting fromtransactions within the Companies are eliminated.
b. Securities
The Company’s marketable securities are reported at fair value.
Unrealized holding gains and losses, net of the related tax effect, on
marketable securities are excluded from earnings and are reported
as a separate component of other comprehensive income until
realized. Realized gains and losses for securities are included inearnings and are derived using the moving average method for
determining the cost of securities sold.

Non-marketable securities in companies over which the Company
does not have the ability to exercise significant influence are statedat cost and reviewed periodically for impairment.
c. Inventories
Inventories are stated at the lower of cost or market. The cost isdetermined by the gross average method.
d. Property, Plant and Equipment (excluding Leased Assets)
Property, plant and equipment are stated at cost. Depreciation ofproperty, plant and equipment is computed principally by the
declining-balance method over the estimated useful lives of theseassets. The estimated useful life ranges from 2 years to 50 years forbuildings and structures, 2 years to 12 years for machinery andequipment.
e. Goodwill and other Intangible Assets
Goodwill is amortized by the straight-line method within 20 years.
Other intangible assets are also amortized using straight-line
method. The representative intangible asset is Software for internaluse, and its useful life is 5 years.
f. Leased Assets
Leased assets arising from finance lease transactions which do nottransfer ownership to the lessee are depreciated to a residual valueof zero by the straight-line method using the contract term as theuseful life.
g. Allowance for Doubtful Accounts
The allowance for doubtful accounts is the Company’s best estimateof the amount of probable credit losses in the Company’s existing
trade receivables.
An additional reserve for individual receivable is recorded when
the Company becomes aware of a customer’s inability to meet its
financial obligations, such as in the case of bankruptcy filing or
deterioration in a customer’s operating results or financial position. If
customer circumstances change, estimates of the recoverability ofreceivables would be further adjusted.
h. Provision for Bonuses
The Company provides accrued bonuses for employees based on
the estimated amounts to be paid in respect of the fiscal year.
i. Provision for Director’s Bonuses
The Company provides accrued bonuses for members of the Boardof Directors based on the estimated amounts to be paid in respect of
the fiscal year.

Nissan Chemical Industries, Ltd.

Annual Report 201529

j. Provision for Environmental Measures
The Company provides reserve at the estimated cost to deal withthe expenditures of Environmental Measures.
k. Provision for Business Structure Improvement
The Company provides reserve at the estimated amount to cover
the expenses and losses to be incurred in association with structural
improvement.
l. Provision for Retirement Benefits
The Company has a defined benefit pension plan and a retirement
plan covering substantially all of its employees. The method of
calculating the estimated amount of all retirement benefits to be paid
at future retirement dates is benefit formula basis. Actuarial gains
and losses are primarily amortized using the declining -balancemethod over the average of the estimated remaining service years(16 years) commencing from this accounting period. The certain
consolidated subsidiaries use a Simplified method for calculating
retirement benefit. In this method, retirement benefit obligation is thesame amount as necessary payment related to retirement benefit.
m. Translation of Foreign Currency
Assets and liabilities of the Company’s subsidiaries located outside
Japan are translated into Japanese yen at the rate of exchange in
effect at the balance sheet date. Revenue and expense items aretranslated at the average exchange rates prevailing during the year.
Gains and losses resulting from foreign currency transactions areincluded in other income (deductions), and those resulting fromtranslation of financial statements are excluded from the statements
of income and are accumulated in net assets as a component ofaccumulated other comprehensive income (loss).
n. Derivatives and Hedge Accounting
The Company enters into interest rate swap contracts to hedge therisk of changes in interest rates over borrowings. Derivatives arecarried at fair value with any change in unrealized gains and losses
charged to income, except for those which meet the criteria fordeferral hedge accounting under which unrealized gains or losses,
net of the applicable income taxes, is reported as a component ofaccumulated other comprehensive income (loss). If interest rates
swap contracts meet certain criteria, the net amount to be paid or
received under the interest rate swap contract is added to or
deducted from the interest on the assets or liabilities for which theswap contract is executed.

3. Change in Accounting Policy

Effective from the beginning of current consolidated financial year,
the Company adopted paragraph 35 of the “Accounting Standard for
Retirement Benefits” (ASBJ Statement No.26 on May 17, 2012) andparagraph 67 of the “Guidance on Accounting Standard for
Retirement Benefits” (ASBJ Guidance No.25 on Mar 26, 2015).
Affecting the above change, the Company reviewed thecalculation method of retirement benefit obligations and service
costs. The Company changed the method of attributing expected
benefit to periods primarily from straight-line attribution to benefit
formula basis as well as the decision method of the discount rate.
The term of bond which is the basis of the discount rate
determination was changed from calculating with years approximate
to employees’ average estimated remaining service years toweighted average discount rate reflecting the estimated payment
term of retirement benefits and its amount.
In accordance with transitional accounting as stipulated inparagraph 37 of the Accounting Standard for Retirement Benefits,
the effect of the changes in the calculation methods of retirement
benefit obligations and service costs were adjusted in retained
earnings at the beginning of current consolidated financial year.
As a result, asset for retirement benefit increased by ¥331 million
and retained earnings increased by ¥213 million at the beginning ofcurrent consolidated financial year. There was a slight effect on
operating income, ordinary income and net income before taxes forthe year ended March 31, 2015.

4. Reclassifications

Effective from the beginning of current consolidated fiscal year,“Rent income” is included in “Other”, which was displayed separately
in the previous fiscal year, since the amount becomes less than tenhundredth part of “Non-operating income”. In order to reflect thechange in the indication method, the company classify the
consolidated financial statement for the previous fiscal year. As aresult, ¥200 million of “Rent inc ome” and ¥768 million of “Other”
which were shown in “Non-operating income” in the previous
consolidated statement of income are reclassified to ¥968 million of“Other”.

5. Collateral Assets and Liabilities

Collateral assets and liabilities as of March 31, 2015 and 2014 wereas follows:(1) Collateral Assets
Thousands of
U.S. Dollars

Millions of Yen

2015
IInvestments in securities

2014

¥ 215

2015

(2) Collateral Liabilities
Thousands of
U.S. Dollars

2015
Liabilities

¥ 256

2014

2015

¥ 294

$ 2,129

6. Research and Development Expenses

Research and development expenses were ¥14,964 million($124,420 thousand) for the year ended March 31, 2015 and¥14,232 million for the year ended March 31, 2014.

2015

2014

2015

¥ 26,735¥ 18,765$ 222,292

Unlisted securities of affiliates

10,642

10,33388,484

Unlisted securities

1,334

4,470

11,092¥ 38,711¥ 33,570$ 321,867

Listed securities

9. Short-term Debt and Long-term Debt

Short-term Debt consisting of unsecured bank overdraft at March 31,
2015 were ¥22,951 million ($190,829 thousand).
The weighted average interest rate on short-term Debt outstanding at
March 31, 2015 was 0.66%.
Long-term Debt as of March 31, 2015 and 2014 were as follows:
The weighted average interest rate on Long-term Debt outstanding at
March 31, 2015 was 0.94%.
The weighted average interest rate on Current portion of Long -term
Debt outstanding at March 31, 2015 was 1.02%.

7. Common Stock(1)Dividends
Cash dividends charged to retained earnings during the years
ended March 31, 2015 and 2014 represent dividends paid out
during those years. The accompanying consolidated financial
statements do not include any provision for a dividend approved by
the Annual Shareholders Meeting of ¥22 ($0.18) per share
aggregating ¥3,469 million ($28,843 thousand) in respect of the year
ended March 31,2015.
(2)Retained Earnings
Retained earnings of consolidated basis consists of legal reserveand retained earnings. In accordance with provisions of theCompanies Act of Japan, the Compan y has provided a legal
reserve as an appropriation of retained earnings. The Code provides
that neither additional paid-in capital nor the legal reserve isavailable for dividends, but both may be used to reduce or eliminate
a deficit by resolution of the shareholders or may be transferred tostated capital common stock by resolution of the Board of Directors.
Legal reserve in the accompanying consolidated financial
statement includes only that of the Company. Retained earnings of
the Company and its consolidated subsidiaries include certain
special reserve for the purpose of obtaining tax benefits inaccordance with the Special Taxation Law of Japan.

Thousands of
U.S. Dollars

Millions of Yen$ 1,788¥ 166

Millions of Yen

8. Investment Securities

Thousands of
U.S. Dollars

Millions of Yen

Long-term Debt
Less current portion

2015

2014

2015

12,15012,516

101,023(3,090)(7,066)(25,692)¥ 9,060¥ 5,450$ 75,331

Long-term Debt fall due after March 31, 2015 were as follows:
Millions of Yen

Thousands of
U.S. Dollars

2016¥ 2,840$ 23,614

2017

2,740

22,782

2018

2,140

17,7932019 and thereafter

1,340

11,142¥ 9,060$ 75,331

Year ending March 31

o. Cash and Cash Equivalent
The Company and consolidated subsidiaries consider cash
equivalents include all highly liquid investments purchased withoriginal maturities of three months or less.

30

Nissan Chemical Industries, Ltd.

Annual Report 2015

Nissan Chemical Industries, Ltd.

Annual Report 201531

10. Retirement Benefits(1)The liability for retirement benefit as of March 31, 2015 and 2014
were as follows:
Thousands of
U.S. Dollars

Millions of Yen

Retirement benefit obligation
Plan asset
Unfunded Retirement benefit
obligation
Net Retirement benefit obligation
Liability for Retirement benefit(Provision for retirement
benefit for 2014)
Asset for Retirement benefit(Prepaid pension expenses for2014)
Net Retirement benefit obligation2015¥ 12,173(14,131)(1,958)2014¥ 12,180(13,234)(1,053)2015$ 101,214(117,494)(16,280)

67

32

557

(1,890)(1,021)(15,715)

174

244

1,447

(2,064)(1,265)(17,161)¥ (1,890)¥ (1,021)$ (15,715)(2)Actuarial assumptions
The principal actuarial assumption at March 31, 2015 and 2014
were as follows:
2015
0.8%
2.0%

Discount Rate
Long-term Expected rate of Return

2014
2.0%
2.0%

11. Income Taxes

The Company is subject to a number of taxes based on income,which resulted in a normal income tax of approximately 38.01% for
the year ended March 31, 2014, and 35.64% for the year ended
March 31, 2015 in the aggregate. The tax effects of significant
temporary differences which resulted in deferred tax assets andliabilities at March 31, 2014 and 2015 were as follows:
Thousands of
U.S. Dollars

Millions of Yen

2015
Deferred tax assets:
Inventory
Allowance for bonus
Impairment loss on securities
Prepaid expenses
OthersGross deferred tax assets
Less: Valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Unrealized gain on securities
Reserve for advanced
depreciation of fixed assets
Other
Total deferred tax liabilities
Net deferred tax assets

¥

2015

2014

732
601

¥ 648
622

$

6,086
4,997

453

500

3,767

483
2,603
4,872
(133)
4,739

463
2,349
4,582
(162)
4,420

4,016
21,64340,509(1,106)39,403(5,146)(3,402)(42,787)

(311)
(748)
(6,205)¥ (1,466)

(354)
(589)
(4,345)¥ 75(2,586)(6,219)(51,592)$ (12,189)

12. Segment Information(1) General Information about reportable segments
With respect to its reportable segments, the Company is able to obtain discrete financial data from among its component units. Accordingly, itssegments are subject to regular review in order to assist decision-making on allocation of managerial resources and evaluation of businessperformance by the Board of Directors.
Divisions by products and services are located in the head office, and each division works out a comprehensive strategy applicable to theirproducts and services and carries out their business activities.
The Company consists of segments based on divisions as follows:
Segment

Main Products

Chemicals

Basic Chemicals (melamine, sulfuric acid, nitric acid, ammonia, etc)
Fine Chemicals (epoxy compound for LED sealants, solder resist and painting,flame retardant, chlorinated isocyanuric acid for sterilizing, etc)

Performance Materials

Display Materials (LCD alignment coating, etc)
Semiconductor Materials (bottom anti-reflective coating, etc)
Inorganic Materials (hard coating materials, electronic information materials, polishing materials, etc)

Agricultural Chemicals

Agrochemicals (herbicide, insecticide, fungicide, fungicide and insecticide, plant growth regulator)
Animal health products

Pharmaceuticals

LIVALO (anti-cholesterol agent), etc
Custom Chemicals (custom manufacturing and process services for pharmaceutical companies)

Trading

Trading, etc

OthersTransportation, landscaping, engineering, fertilizer, etc(2) Basis of measurement of reported segment income or loss, segment assets and other material items
The accounting policies for the reportable segments are consistent with the Company’s accounting policies used in the preparation of its
consolidated financial statements. Inter-segment sales and income (loss) are recognized based on current market prices.
(3) Information on sales, income (loss), assets and other item amounts by reportable segment
Millions of Yen
2014

Sales
Sales to outside customers
inter-segment Sales
Total Sales
Segment income (loss)
Segment assets
Other items
Depreciation and amortization
Amortization of goodwill
Increase of property, plant andequipment and intangible assets

Chemicals

Performance
Materials

Agricultural
Chemicals

Pharmaceuticals

Trading

Other

Adjustment(Note)¥ 26,461
9,031
35,493
1,897
25,777¥ 37,617
5,214
42,832
8,810
37,980¥ 36,168
2,961
39,1306,229
48,569¥ 11,493
56
11,5504,940
12,699¥ 40,503
10,14850,651
1,495
18,109¥ 11,413
10,032
21,446
757
9,082

1,417
-

3,153
6

1,405
624

1,190
-

85
2

372
-

¥ 1,231¥ 4,275¥ 1,342

¥

624

¥

27

¥

377

¥

Consolidated
Total(37,445)(37,445)(1,883)55,778¥ 163,658
163,658
22,246
207,999

257
-

7,882
633

¥

906

¥

8,786

Notes: The adjustments are as follows:
1) The negative ¥1,883 million adjustment in segment income includes negative ¥398 million in inter-segment eliminations and negative ¥1,485
million corporate expenses not attributable to any reportable segment.
The corporate expenses are mainly group administrative expenses which do not belong to segments.
2) The ¥55,778 million adjustment in segment assets includes negative ¥9,738 million in inter-segment asset and liability eliminations and ¥65,516
million in corporate assets not attribute to any reportable segment.
The corporate assets are mainly group administrative assets which do not belong to segments.
3) The ¥257 million adjustment in depreciation and amortization is corporation expenses.
4) The ¥906 million adjustment in increase of property, plant and equipment and intangible assets is corporate assets.

The differences between the above statutory tax rate and theeffective tax rates were principally due to the effect of timing
differences. These differences were recognized mainly when certain
accounting expenses were not deductible from the taxable income.

32

Nissan Chemical Industries, Ltd.

Annual Report 2015

Nissan Chemical Industries, Ltd.

Annual Report 201533

Overseas operations, which represent sales to customers outside Japan for the years ended March 31, 2015 and 2014 were as follows:

Millions of Yen
2015

Chemicals

Sales
Sales to outside customers
inter-segment Sales
Total Sales
Segment income (loss)
Segment assets
Other items
Depreciation and amortization
Amortization of goodwill
Increase of property, plant andequipment and intangible assets

Performance
Materials

Agricultural
Chemicals

Pharmaceuticals

Trading

Other

Adjustment(Note)

Consolidated
Total¥ 25,072
9,190
34,263
1,895
25,173¥ 43,668
5,702
49,371
12,01943,926¥ 42,229
3,452
45,682
9,244
53,577¥ 8,759
53
8,812
2,308
11,426¥ 41,154
13,23554,3901,679
18,486¥ 10,321
10,561
20,882580
9,910¥ (42,195)(42,195)(2,380)61,353¥ 171,206
171,206
25,347
223,854

1,384
-

3,561
5

1,374
468

902
-

70
2

375
-

305
-

7,975
476

¥ 1,393¥ 5,244¥ 1,765

¥ 415

338

¥ 620

¥

19

¥

¥

9,796

Notes: The adjustments are as follows:1)The negative ¥2,380 million adjustment in segment income includes negative ¥386 million in inter-segment eliminations and negative ¥1,993
million corporate expenses not attributable to any reportable segment.
The corporate expenses are mainly group administrative expenses which do not belong to segments.
2) The ¥61,353 million adjustment in segment assets includes negative ¥ 11,165 million in inter-segment asset and liability eliminations and¥72,518 million in corporate assets not attribute to any reportable segment.
The corporate assets are mainly group administrative assets which do not belong to segments.
3) The ¥305 million adjustment in depreciation and amortization is corporati on expenses.
4) The ¥620 million adjustment in increase of property, plant and equipment and intangible assets is corporate assets.

2014

Japan

Millions of Yen
Europe and the Consolidated
Asia
United States
Total

Sales

¥ 110,002¥ 41,833

2015

Japan

Millions of Yen
Europe and the Consolidated
Asia
United States
Total

Sales

¥ 104,234¥ 49,597

2015

Japan

Thousands of U.S.Dollars
Europe and the Consolidated
Asia
United States
Total

Sales

$ 866,667$ 412,380¥ 11,823¥ 17,373¥ 163,658¥ 171,206$ 144,450 $ 1,423,514

13. Amounts per Share
Net income per share is based on the weighted average number of shares of common stock outstanding during the year. Cash dividends per
share attributable to the period represent dividends declared as applicable to the year. Amounts per share of net income and cash dividends forthe year ended March 31, 2015 and 2014 were as follows:
Yen

U.S. Dollars

Net income

2015¥ 113.99

2014¥ 102.11

2015$ 0.95

Cash dividends¥ 36.00¥ 30.00$ 0.30Thousands of U.S.Dollars
2015

Chemicals

Sales
Sales to outside customers
inter-segment Sales
Total Sales
Segment income (loss)
Segment assets
Other items
Depreciation and amortization
Amortization of goodwill
Increase of property, plant andequipment and intangible assets

Performance
Materials

Agricultural
Chemicals

Pharmaceuticals

Trading

Other

Adjustment(Note)

Consolidated
Total$- $ 1,423,514(350,836)(350,836) 1,423,514(19,789)
210,751
510,127
1,861,262$ 208,464
76,411
284,884
15,756
209,304$ 363,083
47,410410,501
99,933
365,228$ 351,118
28,702379,829
76,860445,473$ 72,828
441
73,26819,19095,003$ 342,180
110,044452,232
13,960153,704$ 85,815
87,811
173,626
4,822
82,398

11,507-29,60842

11,424
3,891

7,500
-

582
17

3,118
-

2,536
-

66,3093,958$ 11,582$ 43,602$ 14,675$ 3,451158$ 2,810$ 5,155 $

81,450$14. Significant Subsequent Events
The Company, at the board of Director’s meeting held on May 12, 2015, has decided to repurchase its shares in the market under Article 156of theCompanies Act, as applied pursuant to Article 165, Paragraph 3 of the Companies Act.
1. Purpose of repurchaseTo facilitate flexible implementation of capital policy in response to changes in the business environment.
2. Details of repurchase(1) Class of shares: Common shares of the company(2) Total number of shares: Up to 2,500,000 shares(Rate of the maximum shares to be acquired to the total outstanding shares: 1.59%)(3) Total amount: Up to 6,000,000,000 yen(4) Period of repurchase: From May 13, 2015 to August 31, 2015
(For reference)
Number of treasury stocks as of March 31, 2015
-Total number of shares issued (excluding treasury shares): 157,713,321 shares-Number of treasury shares: 286,679 shares

34

Nissan Chemical Industries, Ltd.

Annual Report 2015

Nissan Chemical Industries, Ltd.

Annual Report 2015

35

INDEPENDENT AUDITORS’ REPORTOur Network

Yaesu Audit Company
5-17, Yaesu 1-chome, Chuo-ku, Tokyo 103-0028, Japan
Phone: +(81)-3-3242-1351 Fax: +(81)-3-3242-1353

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❻
❹
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Independent Auditor’s Report❶

To the Board of Directors of
Nissan Chemical Industries, Ltd.
We have audited the accompanying consolidated financial statements of Nissan Chemical Industries,
Ltd. and consolidated subsidiaries, which comprise the consolidated balance sheets as of March 31,
2015, and the related consolidated statements of income, comprehensive income, changes in net assets,
and cash flows for the year then ended, and a summary of significant accounting policies and otherexplanatory information, all expressed in Japanese Yen.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial
statements in conformity with accounting principles generally accepted in Japan, and for such internal
control as management determines is necessary to enable the preparation of consolidated financial
statements that are free from material misstatements, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our
audit. We conducted our audit in conformity with auditing standards generally accepted in Japan.
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the consolidated financial statements. The procedures selected depend on our judgment, including theassessment of the risks of material misstatement of the consolidated financial statements, whether due
to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s
preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriatenessof accounting policies used and the reasonableness of accounting estimates made by management, as
well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion.
OpinionIn our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the consolidated financial position of Nissan Chemical Industries, Ltd. and consolidated subsidiaries as of March 31, 2015, and the consolidated results of their operations and their cash flows forthe year then ended in conformity with accounting principles generally accepted in Japan.
Convenience Translation
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year
ended March 31, 2015 are presented solely for convenience. Our audit also included the translation of
yen amounts into U.S. dollar amounts and, in our opinion, such translation has been made on the basis
described in Note 1 to the consolidated financial statements.
Yaesu Audit Company
Tokyo, Japan
June 25, 2015

Directory of Nissan ChemicalGroup Network

OfficesHead Office7-1, Kanda Nishiki-cho 3-chome,
Chiyoda-ku, Tokyo 101-0054
Tel: 03-3296-8111

Domestic Group
Nissei Corporation
1-10-5, Nihonbashihon-cho, Chuo-ku,
Tokyo 103-0023 Tel: 03-3241-2548◆Sales of chemical products and insurance

Sapporo Sales Office
Maruito Sapporo Building
1-1, Kita-Nijyo-Nishi, Chuo-ku,
Sapporo 060-0002 Tel: 011-251-0261
Sendai Sales Office
Greenwood Sendai Ichibancho Building
2-7-12, Ichibancho, Aoba-ku, Sendai
980-0811 Tel: 022-266-4311
Nagoya Sales Office
Nagoya KS Building
3-1-18, Taiko, Nakamura-ku, Nagoya
453-0801 Tel: 052-452-8623
Osaka Sales OfficeOsaka Daiichi Seimei Building
1-8-17 Umeda, Kita-ku, Osaka 530-0001
Tel: 06-6346-7200
Fukuoka Sales Office
JPR Hakata Building
1-4-4 Hakata Ekimae, Hakata-ku,
Fukuoka 812-0011 Tel: 092-432-3421

PlantsSodegaura Plant
11-1, Kitasode, Sodegaura,
Chiba 299-0266 Tel: 0438-63-2341
Sodegaura Plant Goi Works
12-17, Goiminamikaigan, Ichihara,
Chiba 290-0045 Tel: 0436-22-2110
Saitama Plant
235-1, Aza Nishidai, Oaza Jimbohara-machi,
Kamisato-machi, Saitama 369-0305
Tel: 0495-34-2810
Toyama Plant
635 Sasakura, Fuchu-machi,
Toyama 939-2753 Tel: 076-433-9602
Nagoya Plant
7, Tsukiji-cho, Minato-ku,
Nagoya 455-0045 Tel: 052-661-1676
Onoda Plant
6903-1, Oaza Onoda, Sanyo-Onoda,
Yamaguchi 756-0093
Tel: 0836-83-2800
Laboratories
Chemical Research Laboratories
10-1, Tsuboi-Nishi 2-chome, Funabashi,
Chiba 274-8507 Tel: 047-465-1112
Materials Research Laboratories
488-6, Suzumi-cho, Funabashi,
Chiba 274-0052 Tel: 047-774-0200
Biological Research Laboratories
1470, Shiraoka, Shiraoka,
Saitama 349-0294
Tel: 0480-92-2513

Nissan Butsuryu Co., Ltd.
1-10-5, Nihonbashihon-cho, Chuo-ku,
Tokyo 103-0023 Tel: 03-5255-6901◆Transportation
Nissan Green & Landscape Co., Ltd.
3-16-9, Utikanda, Chiyoda-ku,
Tokyo 101-0047 Tel: 03-3256-4031◆Landscaping and civil engineering
Nissan Engineering, Ltd.
1-28-6, Kameido, Koto-ku, Tokyo 136-0071
Tel: 03-3636-7578◆Plant engineering services
Environmental Technical Laboratory, Ltd.
2-11-7, Kohoku, Adachi-ku, Tokyo 123-0872
Tel: 03-3898-6643◆Environmental analysis
Nihon Hiryo Co., Ltd.
1-10-5, Nihonbashihon-cho, Chuo-ku,
Tokyo 103-0023 Tel: 03-3241-4231◆Fertilizers and agrochemicals

Overseas Group①Nissan Chemical America Corporation
10375 Richmond Avenue, Suite 1000, Houston,
Texas, 77042, U.S.A.
Tel: 1-713-532-4745■ Chemicals and Inorganic materials②Nissan Chemical Europe S.A.R.L
Parc d’affaires de Crecy, 2 rue Claude
Chappe, 69370 Saint Didier au Mont d’ Or,
FRANCE
Tel: 33-4-37-64-40-20■ Agrochemicals③NCK Co., Ltd.
127, Chupalsandan-ro, Paengseong-eup,
Pyeongtaek-si, Gyeonggi-do, 451-805, KOREA
Tel: 82-31-691-7044■ Electronic materials④Nissan Chemical Agro Korea Ltd.
Room 2001, Samjeong Building, 69-5,
Taepyeongro 2-ga, Jung-gu, Seoul 100-864,
KOREA
Tel:82-2-774-6470■ Agrochemicals⑤Nissan Chemical Taiwan Co., Ltd.
5F., No.67,Luke 2nd Rd., Luzhu Dist.,
Kaohsiung City 821, Taiwan(R.O.C.)
Tel:886-7-695-5252■ Electronic materials⑥Thin Materials GmbH
Elsterstraße 23, 82223 Eichenau, GERMANY
Tel:49-89-3929-4604■ Electronic materials⑦Nissan Chemical Product(Shanghai) Co., Ltd.
Room 1110, New Town Center 83, Lou Shan Guan
Road, Shanghai China 200336
Tel:+86-21-6236-8300■ Agrochemicals
Domestic Group (Under the Equity Method)
Sun Agro Co., Ltd.
1-10-5, Nihonbashihon-cho, Chuo-ku, Tokyo 103-0023
Tel: 03-3510-3601◆Fertilizers and agrochemicals
Clariant Catalysts(Japan)K.K.
Bunkyo Green Court, Center Office 9F, 2-28-8,
Honkomagome, Bunkyo-ku, Tokyo 113-0021
Tel: 03-5977-7300◆Catalysts for petrochemical and petroleum products

36

Nissan Chemical Industries, Ltd.

Annual Report 2015

Nissan Chemical Industries, Ltd.

Annual Report 201537

HISTORY

ORGANIZATION CHART

Based on calendar year

1887

Founded as Tokyo Jinzo Hiryo, later changed to Dainippon Jinzo Hiryo

1937

Changes corporate name to Nissan Chemical Industries, Ltd.

1951

Introduces SNOWTEX colloidal silica

1965

Introduces HILITE, a disinfectant germicide

1969

Opens Sodegaura Plant

1971

Opens Central Research Institute1978

Introduces TEPIC, a special epoxy compound

1984

Introduces TARGA, a grass herbicide for export use
Introduces SUNEVER, polyimide for LCD alignment coatings

1985

Enters pharmaceutical field with introduction on EPATEC
Introduces high-purity chemical line for the electronics industry

Intellectual Property Department

1989

Establishes Nissan Chemical America Corporation (NCA)

Advanced Materials & Planning Department

1990

Introduces SIRIUS, a rice paddy herbicide

1991

Introduces SANMITE, an acaricide

1994

Introduces LANDEL, an anti-hypertension agent
Introduces PERMIT, a herbicide for corn crops
Granted ISO 9002 certification for all plants and products

1996

Establishes Nissan Chemical Houston Corporation (NCH)

1998

Introduces ARC®, anti-reflective coating for semiconductors

1999

Introduces DAR, an intermediate for a superfiber

2001

Establishes NCK Co., Ltd.
Opens representative office in Taipei

2002

Acquires Monsanto Japan’s herbicide business
Establishes Nissan Chemical Europe S. A. R. L

2003

Introduces LIVALO, an anti-cholesterol agent
Opens representative office in Shanghai

2005

Establishes Nissan Chemical Agro Korea Ltd.

Onoda Plant

2007

Opens new Electronic Materials Research Laboratories

Chemical Research Laboratories

2008

Introduces LEIMAY, a fungicide

Materials Research Laboratories

2009

Introduces STARMITE, an acaricide

Biological Research Laboratories

2010

Acquires Dow AgroSciences’ Thifluzamide fungicide business
Established Nissan Chemical Taiwan Co., Ltd.

2013

Acquired Thin Materials GmbH
Merged NCH into NCA
Introduces ALTAIR, a rice paddy herbicide

2014

Established Nissan Chemical Product (Shanghai) Co., Ltd.

Internal Audit Department
Chemicals Division
Performance Materials Division
Agricultural Division
Pharmaceuticals Division
Research Planning Department

Purchasing Department

Board of Directors

Corporate Planning Department

Legal Office

Personnel Department

Secretarial OfficeFinance & Accounting Department

Information Systems Office

Production Technology Department

General Affairs Office

President

Environment, Safety & Quality Assurance Department
Sodegaura Plant
Saitama Plant
Toyama Plant
Nagoya Plant

38

Nissan Chemical Industries, Ltd.

Annual Report 2015

Nissan Chemical Industries, Ltd.

Annual Report 201539

CORPORATE PROFILESTOCK INFORMATION(As of March 31, 2015)(As of March 31, 2015)

Corporate Name
Head Office
FoundedCommon Stock
Number of Shareholders
Number of Employees
Stock Listing
Transfer Agent

Nissan Chemical Industries, Ltd.
7-1, Kanda Nishiki-cho 3-chome, Chiyoda-ku, Tokyo 101-0054, Japan TEL: 03-3296-8111
1887
158,000,000 shares ¥18,942 million
11,877
2,325
Tokyo Stock Exchange
Sumitomo Mitsui Trust Bank, Limited 4-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo 100-8233, Japan

Directors / Corporate Auditors / Executive Officers(As of June 25, 2015)

Representative Director,President & CEO

Kojiro Kinoshita

Director,Senior Executive Vice President

Jun-ichi Miyazaki

Director,Senior Managing Executive Officer

Kiminori Hirata

Director,Senior Managing Executive Officer

Hiroyoshi Fukuro

Director,Managing Executive Officer

Tsuneo Higuchi

Director,Managing Executive Officer

Kazuhiro Yagisawa

Outside Director

Tisato Kajiyama
Tadashi Ohe

Corporate Auditors

Katsumi Akita
Sumio Kondo
Yasuyuki Nakajima
Noriyuki Katayama

Executive Officers

Mitsuaki Sakashita
Katsuaki Miyaji
Satoru Hamamoto
Nobutomo Tsuruzoe
Jun-ichi Watanabe
Hidenori Takishita
Takeshi Iwata
Shuichiro Dobashi
Hiroshi Onitsuka
Hitoshi Suzuki
Masataka Hatanaka
Yuji Nishida
Takashi Honda
Hironori YoshidaTotal Number of Authorized Shares

360,000,000

Shares of Common Stock Issued

158,000,000

Shareholders

11,877

Major Shareholders (Top Five Companies)

Number ofshares held
(thousands)

Percentage of
total sharesin issue (%)

Japan Master Trust Bank, Ltd. (Trust Account)

15,083

9.5

Japan Trustee Services Bank, Ltd. (Trust Account)

11,513

7.3

Mizuho Trust & Banking Co., Ltd.
(Employee Retirement Benefit Trust of Mizuho Bank)
New trust custodian: Trust & Custody Services Bank, Ltd.

7,879

5.0

The Norinchukin Bank

4,800

3.0

Shareholding association of business partners of Nissan Chemical

4,023

2.5

Breakdown of Shareholders by Type

Breakdown by Number of Shares Held
Less than 1,000 shares 0.9%

Treasury stock
0.2%

Less than 10,000 shares
6.1%
Less than 100,000 shares
6.6%

Private individuals
and other groups
12.7%

Financial
institutions
45.0%

Non-Japanese nationals
23.6%

Less than 500,000 shares
15.0%

More than
500,000
shares71.3%

Securities firms 4.1%

Others, Japanese
14.4%

Stock Quote and Chart (April 2013-March 2015)
(¥)
2,600
2,400
2,200
2,000
1,800
1,600

(Thousands)

1,400

70,0001,200

60,0001,000

50,000800

40,000600

30,000400

20,000200

10,000
0

0
2013/
4

40

Nissan Chemical Industries, Ltd.

Annual Report 2015

5

6

7

8

9

10

11

2014/
12
1

2

3

4

5

6

7

8

9

10

11

2015/
12
1

2

Nissan Chemical Industries, Ltd.

3 (Month)Annual Report 2015

41

NISSAN CHEMICAL Annual Report 2015

ANNUAL2015
REPORT
For the year ended March 31, 2015

Printed in JapanNISSAN CHEMICAL INDUSTRIES, LTD.