NISSAN CHEMICALANNUAL REPORT 2016

ANNUAL REPORT 2016
For the year ended M arch 31, 2016

NISSAN CHEMICAL INDUSTRIES, LTD.
Printed in JapanA Fusion of Knowledge

Editorial Policy
In 1992, we introduced responsible care activities, which are
initiatives designed to ensure environmental friendliness, health andsafety throughout the entire lifecycle of each chemical. We havedisclosed the details of these activities via Environmental and Safety
Report since 1999 and via CSR Report since 2013.
In the CSR Report, we tried to provide our stakeholders witheasy-to-understand information regarding our CSR activities. In the
FY2016 issue we begin publishing this information as the Annual
Report, and add a business overview and financial highlights tomake our group’s business activities understood better. Detailed
financial information is provided in the Financial Section.
In addition, the Special Feature pages contain a summary of ourlong-term business plan and medium-term business plan that werelaunched in April this year. This summary describes that how we will help
to solve social issues through new business domains and strategies.
Moving forward, we will continue developing our CSR activities tocontribute to the realization of a sustainable society. We will also
improve the content of the report and make it a useful tool forcommunicating with our stakeholders.

Reporting period

The Nissan Chemical Group Helps to Build a Sustainable Society
through Our Business Activities.

FY2015 (April 2015 to March 2016)
The occupational accidents data is from January to December 2015 (P39).

＊

Scope of reporting
This report describes the initiatives of the Nissan Chemical Group, with a focus
on environmental and safety initiatives of Nissan Chemical Industries, Ltd.

◇The demand for new technologies and products is rising, as is the awareness of the need to preserve the global environment.
In response to this demand, we establish de-facto standard technology and create the most advanced materials that help to build asustainable development of society. At the same time, we offer affordable and fully functional products that meet the global market needs.
◇The population is growing and also rapidly aging globally.
There are growing concerns over food shortages and the declining number of farmers in the domestic agriculture. Faced with thesecircumstances, we are working to develop agrochemicals that will secure stable agricultural product yields, while also helping to streamlineof agricultural work and cut down on labor.
In addition, we also develop pharmaceuticals for healthier and more enriched lives for people.
◇As the changes of the times accelerate, various social issues are coming to light.
Moving forward, we will continue our pursuit of technological innovation by concentrating the expertise of in-house and fusing external
knowledge with our work to solve these issues.
01

Nissan Chemical Industries, Ltd. Annual Report 2016

The financial data includes the data of Nissan Chemical Industries, Ltd., its＊consolidated subsidiaries, and its Entities accounted for using equity method
The non-financial data only includes the data of Nissan Chemical Industries, Ltd.

＊

Consolidated subsidiaries:
Nissei Corporation, Nissan Butsuryu Co., Ltd., Nissan Green & LandscapeCo., Ltd., Nissan Engineering, Ltd., Environmental Technical Laboratories,
Ltd., Nihon Hiryo Co., Ltd., Nissan Chemical America Corporation (NCA),
Nissan Chemical Europe S.A.R.L. (NCE), NCK Co., Ltd. (NCK), and Thin
Materials GmbH.

CO NT E N T S
03 ・・・・・・・・・・・・・・・・Message from the President
04 ・・・・・・・・・・・・・・・・Corporate Ethos Structure
05 ・・・・・・・・・・・・・・・・Business Model
07 ・・・・・・・・・・・・・・・・Main Products
09 ・・・・・・・・・・・・・・・・Financial and Non-Financial Highlights
Special Feature
11 ・・・・・・・・・・・・・・・・“Progress2030” Long-Term Business Plan
13 ・・・・・・・・・・・・・・・・“Vista2021” Mid-Term Business Plan
Business Overview
15 ・・・・・・・・・・・・・・・・Performance Materials
17 ・・・・・・・・・・・・・・・・Agricultural Chemicals
19 ・・・・・・・・・・・・・・・・Pharmaceuticals
21 ・・・・・・・・・・・・・・・・Chemicals
23 ・・・・・・・・・・・・・・・・Advanced Materials & Planning
25 ・・・・・・・・・・・・・・・・Research and Development
CSR Management
27 ・・・・・・・・・・・・・・・・Promotion of CSR
28 ・・・・・・・・・・・・・・・・Corporate Governance
29 ・・・・・・・・・・・・・・・・Compliance
30 ・・・・・・・・・・・・・・・・Risk Management / Supply Chain Management
Responsible Care Activities
31 ・・・・・・・・・・・・・・・・Responsible Care Management
34 ・・・・・・・・・・・・・・・・Environment, Safety Safe and Climate Change Strategy
39 ・・・・・・・・・・・・・・・・Safety and Disaster Prevention, Occupational Safety
and Health
40 ・・・・・・・・・・・・・・・・Chemicals and Product Safety
With Stakeholders
41 ・・・・・・・・・・・・・・・・Relationships with Customers
43 ・・・・・・・・・・・・・・・・Relationships with Employees
45 ・・・・・・・・・・・・・・・・Relationships with Society
46 ・・・・・・・・・・・・・・・・Information Disclosure
47 ・・・・・・・・・・・・・・・・Financial Section
62 ・・・・・・・・・・・・・・・・Independent Auditor’s Report
Corporate Information
63 ・・・・・・・・・・・・・・・・Our Network
66 ・・・・・・・・・・・・・・・・Corporate History
67 ・・・・・・・・・・・・・・・・Corporate Profile / Directors
68 ・・・・・・・・・・・・・・・・Stock Information

Entities accounted for using equity method:
Sun Agro Co., Ltd., Clariant Catalysts (Japan) K.K.
Group companies:
The above consolidated subsidiaries and entities accounted for using equity
method, Nissan Chemical Taiwan Co., Ltd. (NCT), Nissan Chemical Product(Shanghai) Co., Ltd. (NCS), and Nissan Chemical Agro Korea Ltd. (NAK).

Nissan Chemical Industries, Ltd. Annual Report 201602

A Fusion of Knowledge

Editorial Policy
In 1992, we introduced responsible care activities, which are
initiatives designed to ensure environmental friendliness, health andsafety throughout the entire lifecycle of each chemical. We havedisclosed the details of these activities via Environmental and Safety
Report since 1999 and via CSR Report since 2013.
In the CSR Report, we tried to provide our stakeholders witheasy-to-understand information regarding our CSR activities. In the
FY2016 issue we begin publishing this information as the Annual
Report, and add a business overview and financial highlights tomake our group’s business activities understood better. Detailed
financial information is provided in the Financial Section.
In addition, the Special Feature pages contain a summary of ourlong-term business plan and medium-term business plan that werelaunched in April this year. This summary describes that how we will help
to solve social issues through new business domains and strategies.
Moving forward, we will continue developing our CSR activities tocontribute to the realization of a sustainable society. We will also
improve the content of the report and make it a useful tool forcommunicating with our stakeholders.

Reporting period

The Nissan Chemical Group Helps to Build a Sustainable Society
through Our Business Activities.

FY2015 (April 2015 to March 2016)
The occupational accidents data is from January to December 2015 (P39).

＊

Scope of reporting
This report describes the initiatives of the Nissan Chemical Group, with a focus
on environmental and safety initiatives of Nissan Chemical Industries, Ltd.

◇The demand for new technologies and products is rising, as is the awareness of the need to preserve the global environment.
In response to this demand, we establish de-facto standard technology and create the most advanced materials that help to build asustainable development of society. At the same time, we offer affordable and fully functional products that meet the global market needs.
◇The population is growing and also rapidly aging globally.
There are growing concerns over food shortages and the declining number of farmers in the domestic agriculture. Faced with thesecircumstances, we are working to develop agrochemicals that will secure stable agricultural product yields, while also helping to streamlineof agricultural work and cut down on labor.
In addition, we also develop pharmaceuticals for healthier and more enriched lives for people.
◇As the changes of the times accelerate, various social issues are coming to light.
Moving forward, we will continue our pursuit of technological innovation by concentrating the expertise of in-house and fusing external
knowledge with our work to solve these issues.
01

Nissan Chemical Industries, Ltd. Annual Report 2016

The financial data includes the data of Nissan Chemical Industries, Ltd., its＊consolidated subsidiaries, and its Entities accounted for using equity method
The non-financial data only includes the data of Nissan Chemical Industries, Ltd.

＊

Consolidated subsidiaries:
Nissei Corporation, Nissan Butsuryu Co., Ltd., Nissan Green & LandscapeCo., Ltd., Nissan Engineering, Ltd., Environmental Technical Laboratories,
Ltd., Nihon Hiryo Co., Ltd., Nissan Chemical America Corporation (NCA),
Nissan Chemical Europe S.A.R.L. (NCE), NCK Co., Ltd. (NCK), and Thin
Materials GmbH.

CO NT E N T S
03 ・・・・・・・・・・・・・・・・Message from the President
04 ・・・・・・・・・・・・・・・・Corporate Ethos Structure
05 ・・・・・・・・・・・・・・・・Business Model
07 ・・・・・・・・・・・・・・・・Main Products
09 ・・・・・・・・・・・・・・・・Financial and Non-Financial Highlights
Special Feature
11 ・・・・・・・・・・・・・・・・“Progress2030” Long-Term Business Plan
13 ・・・・・・・・・・・・・・・・“Vista2021” Mid-Term Business Plan
Business Overview
15 ・・・・・・・・・・・・・・・・Performance Materials
17 ・・・・・・・・・・・・・・・・Agricultural Chemicals
19 ・・・・・・・・・・・・・・・・Pharmaceuticals
21 ・・・・・・・・・・・・・・・・Chemicals
23 ・・・・・・・・・・・・・・・・Advanced Materials & Planning
25 ・・・・・・・・・・・・・・・・Research and Development
CSR Management
27 ・・・・・・・・・・・・・・・・Promotion of CSR
28 ・・・・・・・・・・・・・・・・Corporate Governance
29 ・・・・・・・・・・・・・・・・Compliance
30 ・・・・・・・・・・・・・・・・Risk Management / Supply Chain Management
Responsible Care Activities
31 ・・・・・・・・・・・・・・・・Responsible Care Management
34 ・・・・・・・・・・・・・・・・Environment, Safety Safe and Climate Change Strategy
39 ・・・・・・・・・・・・・・・・Safety and Disaster Prevention, Occupational Safety
and Health
40 ・・・・・・・・・・・・・・・・Chemicals and Product Safety
With Stakeholders
41 ・・・・・・・・・・・・・・・・Relationships with Customers
43 ・・・・・・・・・・・・・・・・Relationships with Employees
45 ・・・・・・・・・・・・・・・・Relationships with Society
46 ・・・・・・・・・・・・・・・・Information Disclosure
47 ・・・・・・・・・・・・・・・・Financial Section
62 ・・・・・・・・・・・・・・・・Independent Auditor’s Report
Corporate Information
63 ・・・・・・・・・・・・・・・・Our Network
66 ・・・・・・・・・・・・・・・・Corporate History
67 ・・・・・・・・・・・・・・・・Corporate Profile / Directors
68 ・・・・・・・・・・・・・・・・Stock Information

Entities accounted for using equity method:
Sun Agro Co., Ltd., Clariant Catalysts (Japan) K.K.
Group companies:
The above consolidated subsidiaries and entities accounted for using equity
method, Nissan Chemical Taiwan Co., Ltd. (NCT), Nissan Chemical Product(Shanghai) Co., Ltd. (NCS), and Nissan Chemical Agro Korea Ltd. (NAK).

Nissan Chemical Industries, Ltd. Annual Report 201602

Message from the President

We are pleased to release our Annual Report 2016.

President & CEO

Kojiro Kinoshita
We were founded in 1887 as Tokyo Jinzo Hiryo, Japan’s first manufacturer ofchemical fertilizers. Dr. Jokichi Takamine, who discovered the Taka-Diastase
digestive enzyme, was deeply impressed by the state-of-the-art technology
for manufacturing chemical fertilizers that he observed while he was studyingin Britain. This experience inspired him to found the company. After returning
to Japan, Dr. Takamine launched an innovative business that would
fundamentally change the nation’s agriculture, obtaining the support ofpeople such as Eiichi Shibusawa, one of the leaders in the Japanesebusiness world at that time. Food production in Japan increased significantly
as a result of repeated efforts made by pioneers, driven by the strong belief
that the widespread use of chemical fertilizers is essential for increasing crop
yield. We at the Nissan Chemical Group have inherited this strong pioneering
spirit, and have applied it to the creation of innovative technologies andbusinesses that will facilitate the progress of society. We have a deep-rooted
belief that corporate social responsibility lies in contributing to the sustainable
development of society through business.
03

Nissan Chemical Industries, Ltd. Annual Report 2016

At the Nissan Chemical Group, we promote responsible care activities byviewing the securing of the environment, health, and safety over the entire
product lifecycle-from R&D to manufacturing, distribution, sales, use, anddisposal—to be our most important task. We have set basic policies for ouractivities, have set goals, and take actions in the fields of environmental
protection, process safety & disaster prevention, occupational safety &health, and chemicals & product safety. At the same time, the departmentsin charge supervise the contents of these activities, handle problems thathave emerged or potential risks, and seek constant improvement.
We are also committed to interacting with local communities. We
regularly hold tours of our facilities and briefing sessions at all of our plants
to improve understanding and trust in our activities for environmental
protection and process safety & disaster prevention. For children who willgrow up to be responsible for the next generation, our laboratories provide
them with opportunities to learn about the hardships and pleasures ofworking, and the fun of chemistry through work experience and specialclasses given by visiting their schools.
For our employees, we have established programs related to work-lifebalance and enhanced mental health measures and other related initiatives
so that they can enjoy healthier, enriched lives. We have also been
focusing our efforts on creating a workplace environment that enables adiverse range of individuals to maximize their capabilities.
In addition, we have been strengthening our corporate governance, asystem for improving the soundness and efficiency of management, so that
our stakeholders can earn sustainable, long-term profits. We strive toensure that management decisions are made quickly, clarify the
management responsibility and business execution responsibility, andensure the soundness and transparency of management under the board
meeting and board of corporate auditors, whose members include highly
independent outside officers.
In April 2016, we launched two new business plans, the long-termbusiness plan “Progress2030” and mid-term business plan “Vista2021.” Indeveloping these plans, we defined our business model as“Future-Creating Enterprise that responds to social needs with unique,innovative technologies.” This model reflects our desire to create a better
future for human and environment. We aim to develop synergistically withsociety by helping to solve global issues such as global warming and foodand energy shortages.
Moving forward, we will continue to base our business activities on our
corporate philosophy which is “we contribute to the society in harmony withthe environment, based on our excellent technologies, products andservices.” And we will continue working to solve social issues and actively
fulfill our responsibility as a company by evolving, deepening, andexpanding our unique technologies so that we can achieve our corporate
vision of becoming “a corporate group that contributes to human survival
and development.”
We humbly ask for your continued understanding and support.

Corporate Ethos Structure
Mission Statement (Our Values)
Contribute to society with excellent technologies and products.
Promote prosperity and welfare through concerted efforts to constantly develop new areas.
Respect people who exhibit a sense of responsibility, originality and motivation.

Corporate Philosophy (Corporate Purpose)
We contribute to society in harmony with the environment,
based on our excellent technologies, products and services.

MissionStatement(Our Value

Corporate Vision

s)

Corpo
rate
Philosophy(Corpor

A corporate group that contributes to human survival and development.

ate Purpose)

Corpo

rate Vi

Basic

sion

CSR P

olicy

Basic CSR Policy(1) Conduct sensible business activities as a member of the international community
in compliance with laws and regulations.
(2) Enhance corporate value by providing safe and useful products and services.
(3) Strive to achieve no-accidents & no-disasters and protect the global environment.

(4) Disclose information appropriately with a focus on communication with stakeholders.
(5) Create a cheerful and pleasant workplace by respecting the individuality andpersonalities of employees.
(6) Conduct ourselves as good corporate citizens and decent members of society.

Nissan Chemical Industries, Ltd. Annual Report 201604

Message from the President

We are pleased to release our Annual Report 2016.

President & CEO

Kojiro Kinoshita
We were founded in 1887 as Tokyo Jinzo Hiryo, Japan’s first manufacturer ofchemical fertilizers. Dr. Jokichi Takamine, who discovered the Taka-Diastase
digestive enzyme, was deeply impressed by the state-of-the-art technology
for manufacturing chemical fertilizers that he observed while he was studyingin Britain. This experience inspired him to found the company. After returning
to Japan, Dr. Takamine launched an innovative business that would
fundamentally change the nation’s agriculture, obtaining the support ofpeople such as Eiichi Shibusawa, one of the leaders in the Japanesebusiness world at that time. Food production in Japan increased significantly
as a result of repeated efforts made by pioneers, driven by the strong belief
that the widespread use of chemical fertilizers is essential for increasing crop
yield. We at the Nissan Chemical Group have inherited this strong pioneering
spirit, and have applied it to the creation of innovative technologies andbusinesses that will facilitate the progress of society. We have a deep-rooted
belief that corporate social responsibility lies in contributing to the sustainable
development of society through business.
03

Nissan Chemical Industries, Ltd. Annual Report 2016

At the Nissan Chemical Group, we promote responsible care activities byviewing the securing of the environment, health, and safety over the entire
product lifecycle-from R&D to manufacturing, distribution, sales, use, anddisposal—to be our most important task. We have set basic policies for ouractivities, have set goals, and take actions in the fields of environmental
protection, process safety & disaster prevention, occupational safety &health, and chemicals & product safety. At the same time, the departmentsin charge supervise the contents of these activities, handle problems thathave emerged or potential risks, and seek constant improvement.
We are also committed to interacting with local communities. We
regularly hold tours of our facilities and briefing sessions at all of our plants
to improve understanding and trust in our activities for environmental
protection and process safety & disaster prevention. For children who willgrow up to be responsible for the next generation, our laboratories provide
them with opportunities to learn about the hardships and pleasures ofworking, and the fun of chemistry through work experience and specialclasses given by visiting their schools.
For our employees, we have established programs related to work-lifebalance and enhanced mental health measures and other related initiatives
so that they can enjoy healthier, enriched lives. We have also been
focusing our efforts on creating a workplace environment that enables adiverse range of individuals to maximize their capabilities.
In addition, we have been strengthening our corporate governance, asystem for improving the soundness and efficiency of management, so that
our stakeholders can earn sustainable, long-term profits. We strive toensure that management decisions are made quickly, clarify the
management responsibility and business execution responsibility, andensure the soundness and transparency of management under the board
meeting and board of corporate auditors, whose members include highly
independent outside officers.
In April 2016, we launched two new business plans, the long-termbusiness plan “Progress2030” and mid-term business plan “Vista2021.” Indeveloping these plans, we defined our business model as“Future-Creating Enterprise that responds to social needs with unique,innovative technologies.” This model reflects our desire to create a better
future for human and environment. We aim to develop synergistically withsociety by helping to solve global issues such as global warming and foodand energy shortages.
Moving forward, we will continue to base our business activities on our
corporate philosophy which is “we contribute to the society in harmony withthe environment, based on our excellent technologies, products andservices.” And we will continue working to solve social issues and actively
fulfill our responsibility as a company by evolving, deepening, andexpanding our unique technologies so that we can achieve our corporate
vision of becoming “a corporate group that contributes to human survival
and development.”
We humbly ask for your continued understanding and support.

Corporate Ethos Structure
Mission Statement (Our Values)
Contribute to society with excellent technologies and products.
Promote prosperity and welfare through concerted efforts to constantly develop new areas.
Respect people who exhibit a sense of responsibility, originality and motivation.

Corporate Philosophy (Corporate Purpose)
We contribute to society in harmony with the environment,
based on our excellent technologies, products and services.

MissionStatement(Our Value

Corporate Vision

s)

Corpo
rate
Philosophy(Corpor

A corporate group that contributes to human survival and development.

ate Purpose)

Corpo

rate Vi

Basic

sion

CSR P

olicy

Basic CSR Policy(1) Conduct sensible business activities as a member of the international community
in compliance with laws and regulations.
(2) Enhance corporate value by providing safe and useful products and services.
(3) Strive to achieve no-accidents & no-disasters and protect the global environment.

(4) Disclose information appropriately with a focus on communication with stakeholders.
(5) Create a cheerful and pleasant workplace by respecting the individuality andpersonalities of employees.
(6) Conduct ourselves as good corporate citizens and decent members of society.

Nissan Chemical Industries, Ltd. Annual Report 201604

Business Model―

Future-Creating Enterprise that Responds to Social Needs with

Unique, Innovative Technologies ―We, Nissan Chemical Group, conduct business activities in four business domains using our five core technologies, including opticalcontrol, which we added to the range of technologies we have accumulated over the years.
Based on our recognition of various social issues and changes, we aim to enhance our initiatives for addressing environmental problems
and achieve sustainable growth together with society. We will also work to provide new products through each business domain.

Social Issues and Changes

Our Objectives

Our Business Activities

Creating new technologies and products that respond toboth visible and potential needs

Business Domains

Core Technologies
Supplying display materials and semiconductor materials in responseto the technological innovations of customers

ICT Evolution

Fine Organic
Synthesis

Information &Communication

Providing sensor materials needed for IoT and healthcare
Development of interconnect materials that allow for the communicationof greater amounts of data at higher speeds

Functional Polymer
DesignSupplying agrochemicals that help boost crop yields and save on agricultural labor

Food Shortages
Enhance Well-being

Flexible display

Life Sciences

Chemicals &Affiliates

Ultrafine Particle
Control

Advanced Medical Care

Providing veterinary pharmaceuticals intended for companion
animals that comfort people
Creating pharmaceuticals that cater to medical needs
Developing biomedical materials that contribute to advanced medical care

Dialyzer

Biological Evaluation

Increasing Energy Demand
Reducing Environmental Load05

Providing battery materials that are compatible with batteries that deliver
a higher level of performance

Environment &EnergyOptical Control

Developing energy harvesting materials that help utilize unused energy
Creating thermal control materials that help improve theefficiency of energy use

Global Environmental Protection

Strengthening responsible care activities

Diversity

Respecting the individuality and personality of each person andcreating a pleasant workplace

Sensible business activities

Strengthening corporate governance and ensuring the appropriate disclosure

Nissan Chemical Industries, Ltd. Annual Report 2016

Photovoltaic generation

Nissan Chemical Industries, Ltd. Annual Report 201606

Business Model―

Future-Creating Enterprise that Responds to Social Needs with

Unique, Innovative Technologies ―We, Nissan Chemical Group, conduct business activities in four business domains using our five core technologies, including opticalcontrol, which we added to the range of technologies we have accumulated over the years.
Based on our recognition of various social issues and changes, we aim to enhance our initiatives for addressing environmental problems
and achieve sustainable growth together with society. We will also work to provide new products through each business domain.

Social Issues and Changes

Our Objectives

Our Business Activities

Creating new technologies and products that respond toboth visible and potential needs

Business Domains

Core Technologies
Supplying display materials and semiconductor materials in responseto the technological innovations of customers

ICT Evolution

Fine Organic
Synthesis

Information &Communication

Providing sensor materials needed for IoT and healthcare
Development of interconnect materials that allow for the communicationof greater amounts of data at higher speeds

Functional Polymer
DesignSupplying agrochemicals that help boost crop yields and save on agricultural labor

Food Shortages
Enhance Well-being

Flexible display

Life Sciences

Chemicals &Affiliates

Ultrafine Particle
Control

Advanced Medical Care

Providing veterinary pharmaceuticals intended for companion
animals that comfort people
Creating pharmaceuticals that cater to medical needs
Developing biomedical materials that contribute to advanced medical care

Dialyzer

Biological Evaluation

Increasing Energy Demand
Reducing Environmental Load05

Providing battery materials that are compatible with batteries that deliver
a higher level of performance

Environment &EnergyOptical Control

Developing energy harvesting materials that help utilize unused energy
Creating thermal control materials that help improve theefficiency of energy use

Global Environmental Protection

Strengthening responsible care activities

Diversity

Respecting the individuality and personality of each person andcreating a pleasant workplace

Sensible business activities

Strengthening corporate governance and ensuring the appropriate disclosure

Nissan Chemical Industries, Ltd. Annual Report 2016

Photovoltaic generation

Nissan Chemical Industries, Ltd. Annual Report 201606

Main Products

Nissan Chemical Products that Play an Active Role in Society
Here we introduce our three business domains and products used in various parts of society.

AdBlueTEPIC
SUNEVERROUNDUP MAXLOADLIVALO / LANDELMELAMINE

SNOWTEXARC
LEIMAY / ORACLE
HI-LITESTARMITE / SANMITE

Fluralaner

SIRIUS / ALTAIR

Per for manc e M ater ials
Display Materials●●

SUNEVER® (polyimide for LCD / flat panel displays)
NHC (insulating hard coating)®

Life Sc ienc es
Inorganic Materials

Semiconductor Materials●

ARC®＊ (bottom anti-reflective coating forsemiconductors)

ARC® is registered trade mark of Brewer Science, Inc.

＊

●

●

Agricultural Chemicals

SNOWTEX®
(semiconductor polishing, hard coating, etc.)
ORGANOSILICASOL(coating for anti-scratch, insulation, CTE
reduction)

Herbicide

Insecticide●

STARMITE®

●LEIMAY ®

●ALTAIR ®

●SANMITE ®

●ORACLE ®

●ROUNDUPMAXLOAD●PULSOR●TARGA ®

●PERMIT ®

●

Image

07

Nissan Chemical Industries, Ltd. Annual Report 2016

LCD TV

Image

Fungicide

SIRIUS ®

Veterinary Pharmaceuticals

Chemicals

Pharmaceuticals●®

Chemic als●

LIVALO® (anti-cholesterol agent)●

MELAMINE (plywood adhesive, etc.)●

LANDEL (anti-hypertension agent)●High purity agent●

High-grade urea solution (AdBlue®＊)®

Novel agent under development®

●

NIP-022 (platelet increasing agent)●

NT-702 (asthma care, arteriosclerosis
obliterans treatment agent)●

NTC-801 (anti-arrhythmic agent)●

FINE OXOCOL ®

AdBlue® is a registered trademark of Verband derAutomobilindustrie.

＊●

TEPIC ® (special epoxy compound forsealant)●

MELAMINE CYANYRATE (flame
retardant)●

HI-LITE ® (disinfectant)●

NISSAN REISHI (health food)

Fluralaner

Image

Nissan Chemical Industries, Ltd. Annual Report 201608

Main Products

Nissan Chemical Products that Play an Active Role in Society
Here we introduce our three business domains and products used in various parts of society.

AdBlueTEPIC
SUNEVERROUNDUP MAXLOADLIVALO / LANDELMELAMINE

SNOWTEXARC
LEIMAY / ORACLE
HI-LITESTARMITE / SANMITE

Fluralaner

SIRIUS / ALTAIR

Per for manc e M ater ials
Display Materials●●

SUNEVER® (polyimide for LCD / flat panel displays)
NHC (insulating hard coating)®

Life Sc ienc es
Inorganic Materials

Semiconductor Materials●

ARC®＊ (bottom anti-reflective coating forsemiconductors)

ARC® is registered trade mark of Brewer Science, Inc.

＊

●

●

Agricultural Chemicals

SNOWTEX®
(semiconductor polishing, hard coating, etc.)
ORGANOSILICASOL(coating for anti-scratch, insulation, CTE
reduction)

Herbicide

Insecticide●

STARMITE®

●LEIMAY ®

●ALTAIR ®

●SANMITE ®

●ORACLE ®

●ROUNDUPMAXLOAD●PULSOR●TARGA ®

●PERMIT ®

●

Image

07

Nissan Chemical Industries, Ltd. Annual Report 2016

LCD TV

Image

Fungicide

SIRIUS ®

Veterinary Pharmaceuticals

Chemicals

Pharmaceuticals●®

Chemic als●

LIVALO® (anti-cholesterol agent)●

MELAMINE (plywood adhesive, etc.)●

LANDEL (anti-hypertension agent)●High purity agent●

High-grade urea solution (AdBlue®＊)®

Novel agent under development®

●

NIP-022 (platelet increasing agent)●

NT-702 (asthma care, arteriosclerosis
obliterans treatment agent)●

NTC-801 (anti-arrhythmic agent)●

FINE OXOCOL ®

AdBlue® is a registered trademark of Verband derAutomobilindustrie.

＊●

TEPIC ® (special epoxy compound forsealant)●

MELAMINE CYANYRATE (flame
retardant)●

HI-LITE ® (disinfectant)●

NISSAN REISHI (health food)

Fluralaner

Image

Nissan Chemical Industries, Ltd. Annual Report 201608

Financial and Non-Financial Highlights
Operating income and Operating margin(100 million yen)
300

200

Financial Data (consolidated)

14.6
12.0
248
208

12.8

12.9

10.9

12.7
10.4

192

174

198

195

2006

2007

2008

2009

222

2010

2011

（%）
15.0

286

253

10.0

155

100

0

13.6

16.2

14.8

5.0

2012

2013

2015 (FY)

2014

0.0

Net income attributable to owners of parent / ROE(100 million yen)
200

14.7

14.6
12.6
10.3

150
100

15.6

140

11.9
9.5

155
128

11.4

12.7
167

139

130

12.7

15.0

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015 (FY)

60

67

56

53
80

47

50

37

32
28

50

59
50

37

36

38

41

41

41

43

49

2006

2007

2008

2009

2010

2011

2012

2013

(1,000 tons)

64
60
57
2014

71

1,769

253

286

Ordinary income

100 million yen

159

205

237

264

295

Net income attributable to owners of parent

100 million yen

110

139

167

182

224

EBITDA＊1

100 million yen

259

290

308

338

383

EPS

Yen/ Share

64.52

83.74

102.11113.99143.37

Dividend

Yen/ Share

24

26

30

36

44

%

37.2

31.0

29.4

31.6

30.7

Total assets

100 million yen

1,901

1,992

2,080

2,239

2,282

Net assets

100 million yen

1,196

1,267

1,378

1,513

1,569

Cash

100 million yen

279

319

308

313

353

Liabilities with interest

100 million yen

389

381

361

351

331

%

62.4

63.0

65.7

66.9

68.1
102

Capex

100 million yen

83

81

88

98

Depreciation

100 million yen

105

95

85

85

97

R&D expenses

100 million yen

136

137

142

150

158

%

9.2

8.9

8.7

8.7

8.9

Unit

FY2011FY2012FY2013

FY2014FY2015

481

499

180

190

75
226

2006

455

467

447

448

160

160

157

175

71

61

60

59

238

234

247

53

231

220

2007

2008

2009

Nissan Chemical Industries, Ltd. Annual Report 2016

Male

People

1,568

1,550

1,543

1,553

1,567

FemalePeople

158

162

164

168

172

%

9.2

9.5

9.6

9.8

9.9

Male

People

21

22

34

39

59

FemalePeople

5

3

7

10

6

%

19.2

12.0

17.1

20.4

9.2

90

Percentage of females among managerial staff

50

Re-employment of retired employees
Percentage of re-employment of retired employees

682015 (FY)

Percentage of employment of people with disabilities

437

458

462

462

140

153

172

152

49

55

53

55

248

250

237

2010

2011

2012

2013

CO2 emissions from non-energy use

2014

Dinitrogen monoxide (CO2 equivalent)

10

12

2.0

2.1

2.5

People

65

59

66

60

64

%

78

64

63

66

97

2.12

2.22

2.35

2.15

5

8

9

7

Male

People

0

0

0

1

2

FemalePeople

3

6

6

6

8

Male

People

0

0

0

0

0

FemalePeople

2

5

7

9

11

Hrs

15.8

16.8

18.0

18.8

19.0

Percentage of those who take annual leave

%

76.9

77.6

76.9

73.4

77.4

Leaving job within 3 years of employment

People

1

4

1

1

3

Percentage of employees leaving job within 3 years of employment

%

1.2

7.5

3.1

3.8

12.0

Amount of energy consumed (crude oil equivalent)＊3

1,000 kL

97

97

95

92

99

Waste generation

1,000 tons

26.3

26.8

26.3

33.0

33.4

Final disposal volume of waste

1,000 tons

2.3

2.5

1.5

2.3

2.2

Water resources input

Million m

41.6

40.3

41.3

39.0

40.7

＊4

2015 (FY)

9

2.0

4

Average overtime per month

255

9

1.8

1.96

Number of people who started of childcare leave

Total payout ratio (right axis)

Purchase of treasury shares (left axis)

8

%

%

Number of people who started maternity leave0

PeoplePeople＊2

Number of people who started shorter working hours for childcare

CO2 emissions from energy use

09

1,712

222

Female managers

100
0

1,637

195

Percentage of females among new employees

Greenhouse gas emissions

200

1,538

155

New employees（%）

Total amount of dividend (left axis)

300

1,486

100 million yen

Full-time employees

100

100

400

100 million yen

Operating income

Percentage of females among full-time employees

200

500

Sales

0.0

ROE (right axis)

118(100 million yen)0

FY2015R&D expenses / sales

Total amount of dividend / Purchase of treasury shares / Total payout ratio

50

FY2014

Non-Financial Data (non-consolidated)
Net income attributable to owners of parent (left axis)

150

FY2013

5.0

50
0

（%）

10.0

110

101

FY2012Equity ratio

224

182

FY2011Dividend payout ratio

Operating margin (right axis)

Operating income (left axis)

Unit

3

1: Operating margin + Depreciation 2: Statutory rate: 2.0% 3: Energy: Fuel, purchased electricity and purchased steam used for business activities 4: Water resources: Tap water, groundwater and industrial water used for business activities

＊

＊

＊

＊

Nissan Chemical Industries, Ltd. Annual Report 201610

Financial and Non-Financial Highlights
Operating income and Operating margin(100 million yen)
300

200

Financial Data (consolidated)

14.6
12.0
248
208

12.8

12.9

10.9

12.7
10.4

192

174

198

195

2006

2007

2008

2009

222

2010

2011

（%）
15.0

286

253

10.0

155

100

0

13.6

16.2

14.8

5.0

2012

2013

2015 (FY)

2014

0.0

Net income attributable to owners of parent / ROE(100 million yen)
200

14.7

14.6
12.6
10.3

150
100

15.6

140

11.9
9.5

155
128

11.4

12.7
167

139

130

12.7

15.0

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015 (FY)

60

67

56

53
80

47

50

37

32
28

50

59
50

37

36

38

41

41

41

43

49

2006

2007

2008

2009

2010

2011

2012

2013

(1,000 tons)

64
60
57
2014

71

1,769

253

286

Ordinary income

100 million yen

159

205

237

264

295

Net income attributable to owners of parent

100 million yen

110

139

167

182

224

EBITDA＊1

100 million yen

259

290

308

338

383

EPS

Yen/ Share

64.52

83.74

102.11113.99143.37

Dividend

Yen/ Share

24

26

30

36

44

%

37.2

31.0

29.4

31.6

30.7

Total assets

100 million yen

1,901

1,992

2,080

2,239

2,282

Net assets

100 million yen

1,196

1,267

1,378

1,513

1,569

Cash

100 million yen

279

319

308

313

353

Liabilities with interest

100 million yen

389

381

361

351

331

%

62.4

63.0

65.7

66.9

68.1
102

Capex

100 million yen

83

81

88

98

Depreciation

100 million yen

105

95

85

85

97

R&D expenses

100 million yen

136

137

142

150

158

%

9.2

8.9

8.7

8.7

8.9

Unit

FY2011FY2012FY2013

FY2014FY2015

481

499

180

190

75
226

2006

455

467

447

448

160

160

157

175

71

61

60

59

238

234

247

53

231

220

2007

2008

2009

Nissan Chemical Industries, Ltd. Annual Report 2016

Male

People

1,568

1,550

1,543

1,553

1,567

FemalePeople

158

162

164

168

172

%

9.2

9.5

9.6

9.8

9.9

Male

People

21

22

34

39

59

FemalePeople

5

3

7

10

6

%

19.2

12.0

17.1

20.4

9.2

90

Percentage of females among managerial staff

50

Re-employment of retired employees
Percentage of re-employment of retired employees

682015 (FY)

Percentage of employment of people with disabilities

437

458

462

462

140

153

172

152

49

55

53

55

248

250

237

2010

2011

2012

2013

CO2 emissions from non-energy use

2014

Dinitrogen monoxide (CO2 equivalent)

10

12

2.0

2.1

2.5

People

65

59

66

60

64

%

78

64

63

66

97

2.12

2.22

2.35

2.15

5

8

9

7

Male

People

0

0

0

1

2

FemalePeople

3

6

6

6

8

Male

People

0

0

0

0

0

FemalePeople

2

5

7

9

11

Hrs

15.8

16.8

18.0

18.8

19.0

Percentage of those who take annual leave

%

76.9

77.6

76.9

73.4

77.4

Leaving job within 3 years of employment

People

1

4

1

1

3

Percentage of employees leaving job within 3 years of employment

%

1.2

7.5

3.1

3.8

12.0

Amount of energy consumed (crude oil equivalent)＊3

1,000 kL

97

97

95

92

99

Waste generation

1,000 tons

26.3

26.8

26.3

33.0

33.4

Final disposal volume of waste

1,000 tons

2.3

2.5

1.5

2.3

2.2

Water resources input

Million m

41.6

40.3

41.3

39.0

40.7

＊4

2015 (FY)

9

2.0

4

Average overtime per month

255

9

1.8

1.96

Number of people who started of childcare leave

Total payout ratio (right axis)

Purchase of treasury shares (left axis)

8

%

%

Number of people who started maternity leave0

PeoplePeople＊2

Number of people who started shorter working hours for childcare

CO2 emissions from energy use

09

1,712

222

Female managers

100
0

1,637

195

Percentage of females among new employees

Greenhouse gas emissions

200

1,538

155

New employees（%）

Total amount of dividend (left axis)

300

1,486

100 million yen

Full-time employees

100

100

400

100 million yen

Operating income

Percentage of females among full-time employees

200

500

Sales

0.0

ROE (right axis)

118(100 million yen)0

FY2015R&D expenses / sales

Total amount of dividend / Purchase of treasury shares / Total payout ratio

50

FY2014

Non-Financial Data (non-consolidated)
Net income attributable to owners of parent (left axis)

150

FY2013

5.0

50
0

（%）

10.0

110

101

FY2012Equity ratio

224

182

FY2011Dividend payout ratio

Operating margin (right axis)

Operating income (left axis)

Unit

3

1: Operating margin + Depreciation 2: Statutory rate: 2.0% 3: Energy: Fuel, purchased electricity and purchased steam used for business activities 4: Water resources: Tap water, groundwater and industrial water used for business activities

＊

＊

＊

＊

Nissan Chemical Industries, Ltd. Annual Report 201610

Special
Feature―Start of “Progress2030” Long-Term Business Plan and “Vista2021” Medium-Term Business Plan

“Aiming to Be a Company that Creates the Future” ―growth, while the development of new materials such asorganic nanoparticle and three-dimensional cell culture media
have made progress. We have also steadily advanced thedevelopment of research infrastructures to accelerate thecreation of new materials, established a local subsidiary in
China, and pursued other initiatives. As a result of these
efforts, operating profit for the fiscal year 2015 reached 28.6
billion yen, exceeding the target by 2.6 billion yen.
While global economic trends are becoming increasingly
uncertain, we have identified that “foray into new businessdomains”, “development of new products that match market
trends”, and “enhancing R&D capability” as our tasks for
ensuring sustainable growth. To overcome these challenges
and secure growth, in April 2016, we launched“Progress2030,” a long-term business plan for the period to2030, and “Vista2021,” a six-year medium-term business plan
which shows our ideal situation of 2021.
In developing these plans, we adopted new businessmodel called “Future-Creating Enterprise that responds tosocial needs with unique, innovative technologies.” We will
strive to develop in synergy with society by helping to solve
social issues such as global warming, energy problems andfood shortages.

In April 2013, The Nissan Chemical Group launched“Vista2015 Stage II,” a three-year medium-term businessplan. Since then, we have been executing two basic
strategies which are “creating new products and new
businesses” and “pursuit of business structure reforms.”
Regarding new products, active ingredient of veterinary
pharmaceutical, display materials and others have enjoyed

Information &Communication

Life Sciences

Environment & Energy

Fine Organic
Synthesis

Functional
Polymer
DesignOpticalControlChemicals & Affiliates
UltrafineParticle
Control

Biological
Evaluation

1. Outline of “Progress2030” Long-Term Business Plan
1 The Company’s 2030 Vision
A corporate group which provides new values for helping to enrich people’s lives by integrating internal and external knowledge with facing
globally-changing society
A group of first-class pioneers who blaze a way to the future with enthusiasm by trusts they have built and skills they have cultivated

2 Business Domains“Information & Communication”, “Life Sciences”, “Environment & Energy” and “Chemicals & Affiliates” that are based on the five core technologies

3 Basic Strategies
Entering new fields by evolving, deepening and expanding unique technologies
1) Information & Communication (display, semiconductor, inorganic, optical functional and sensor materials)
For display, semiconductor and inorganic materials, we will provide products based on technological innovations in the market. We will also
create sensor materials by using our existing technologies and optical functional materials by establishing optical control technologies.
2) Life Sciences (agrochemicals, veterinary pharmaceuticals, pharmaceuticals and biomedical materials)
We will strengthen the pipeline for agrochemicals and pharmaceuticals, also develop new veterinary pharmaceuticals. In addition, we will create
biomedical materials that contribute to advanced medical care using accumulated technologies for biological evaluation and material design.
3) Environment & Energy (batteries, energy harvesting and thermal control materials)
We will establish a device evaluation technology then supply battery materials and materials that contribute to efficient use of energy.
4) Chemicals & Affiliates (basic chemicals, fine chemicals and affiliates)
In addition to responding to business environmental changes, we will introduce high-performance compounds related to TEPIC®, an epoxy compound.

4 Business Size
Net sales

Information & Communication 100 billion yen
Life Sciences

100 billion yen

Environment & Energy

50 billion yen

Chemicals & Affiliates

50 billion yen

Total

300 billion yen

Operating income

50 billion yen

Operating margin

16.7%

3,000

(100 million yen)

2,500
2,500

2,000

1,500

1,769

500

300

286
200

1,000

0

100

0

2015

2021
Net sales (left axis)

11

Nissan Chemical Industries, Ltd. Annual Report 2016

500

400

400

500

Core Technologies(100 million yen)

3,000

2030

(FY)

Operating income (right axis)

Nissan Chemical Industries, Ltd. Annual Report 201612

Special
Feature―Start of “Progress2030” Long-Term Business Plan and “Vista2021” Medium-Term Business Plan

“Aiming to Be a Company that Creates the Future” ―growth, while the development of new materials such asorganic nanoparticle and three-dimensional cell culture media
have made progress. We have also steadily advanced thedevelopment of research infrastructures to accelerate thecreation of new materials, established a local subsidiary in
China, and pursued other initiatives. As a result of these
efforts, operating profit for the fiscal year 2015 reached 28.6
billion yen, exceeding the target by 2.6 billion yen.
While global economic trends are becoming increasingly
uncertain, we have identified that “foray into new businessdomains”, “development of new products that match market
trends”, and “enhancing R&D capability” as our tasks for
ensuring sustainable growth. To overcome these challenges
and secure growth, in April 2016, we launched“Progress2030,” a long-term business plan for the period to2030, and “Vista2021,” a six-year medium-term business plan
which shows our ideal situation of 2021.
In developing these plans, we adopted new businessmodel called “Future-Creating Enterprise that responds tosocial needs with unique, innovative technologies.” We will
strive to develop in synergy with society by helping to solve
social issues such as global warming, energy problems andfood shortages.

In April 2013, The Nissan Chemical Group launched“Vista2015 Stage II,” a three-year medium-term businessplan. Since then, we have been executing two basic
strategies which are “creating new products and new
businesses” and “pursuit of business structure reforms.”
Regarding new products, active ingredient of veterinary
pharmaceutical, display materials and others have enjoyed

Information &Communication

Life Sciences

Environment & Energy

Fine Organic
Synthesis

Functional
Polymer
DesignOpticalControlChemicals & Affiliates
UltrafineParticle
Control

Biological
Evaluation

1. Outline of “Progress2030” Long-Term Business Plan
1 The Company’s 2030 Vision
A corporate group which provides new values for helping to enrich people’s lives by integrating internal and external knowledge with facing
globally-changing society
A group of first-class pioneers who blaze a way to the future with enthusiasm by trusts they have built and skills they have cultivated

2 Business Domains“Information & Communication”, “Life Sciences”, “Environment & Energy” and “Chemicals & Affiliates” that are based on the five core technologies

3 Basic Strategies
Entering new fields by evolving, deepening and expanding unique technologies
1) Information & Communication (display, semiconductor, inorganic, optical functional and sensor materials)
For display, semiconductor and inorganic materials, we will provide products based on technological innovations in the market. We will also
create sensor materials by using our existing technologies and optical functional materials by establishing optical control technologies.
2) Life Sciences (agrochemicals, veterinary pharmaceuticals, pharmaceuticals and biomedical materials)
We will strengthen the pipeline for agrochemicals and pharmaceuticals, also develop new veterinary pharmaceuticals. In addition, we will create
biomedical materials that contribute to advanced medical care using accumulated technologies for biological evaluation and material design.
3) Environment & Energy (batteries, energy harvesting and thermal control materials)
We will establish a device evaluation technology then supply battery materials and materials that contribute to efficient use of energy.
4) Chemicals & Affiliates (basic chemicals, fine chemicals and affiliates)
In addition to responding to business environmental changes, we will introduce high-performance compounds related to TEPIC®, an epoxy compound.

4 Business Size
Net sales

Information & Communication 100 billion yen
Life Sciences

100 billion yen

Environment & Energy

50 billion yen

Chemicals & Affiliates

50 billion yen

Total

300 billion yen

Operating income

50 billion yen

Operating margin

16.7%

3,000

(100 million yen)

2,500
2,500

2,000

1,500

1,769

500

300

286
200

1,000

0

100

0

2015

2021
Net sales (left axis)

11

Nissan Chemical Industries, Ltd. Annual Report 2016

500

400

400

500

Core Technologies(100 million yen)

3,000

2030

(FY)

Operating income (right axis)

Nissan Chemical Industries, Ltd. Annual Report 201612

Special
FeatureStart of “Progress2030” Long-Term Business Plan and “Vista2021” Medium-Term Business Plan―

2. Outline of “Vista2021” Medium-Term Business Plan

3. Outline of “Vista2021 Stage I”―A six-year plan starting in FY2016―

The plan is divided into the first three years (FY 2016 to 2018) as Stage I and the second three years (FY 2019 to 2021) as Stage II.

1 Basic strategies
1) Maximizing the profit from existing products Boosting the market shares of products for growing fields, driving overseas business expansion, and reducing costs

1 Ideal Situation of 2021●●

Information & Communication and Life Sciences are the driving force for growth while Chemicals & Affiliates achieve a stable profit.
Establish the foundation of Environment & Energy business and a position as a promising chemical manufacturer that keeps moving forward with a strong presence.

1. Sales / Operating income / Net income＊1 [100 million yen]
Operating income (right axis)

Chemicals

2,500

2,500

2. Operating income by segment [100 million yen]

Net income(right axis)
500

450

400

350

300

250

1,000

200

150

500

100

0

0

1,500

2,170

1,769

2,000

400

350

286

310

271

224

20

2018

2021

1 Net income attributable to owners of parent（FY）

Agricultural
Chemicals

20286

Pharmaceuticals

24

350 7

Others＊2
400

167

129

108

0
2015

Performance
Materials

184

120

154

39
▲1

40

2015

2018

▲20

2021

（FY）

＊

4 Financial Indicators (FY2018 target)

R&D Expenses / Capex [100 million yen]
FY2013-2015 total
600
500

Operating margin
ROE
R&D expenses/sales

FY2016-2018 total

538
450

427

＊2

400

288

300

0
1 Acceptance basis

R&D expenses
2 Production commencement basis

＊

Capex

（%）
80
60

Dividend payout ratio

37

67

40
20
0

13

Nissan Chemical Industries, Ltd. Annual Report 2016

37

2011

59

1) Chemicals
i. Increasing the sales of AdBlue, a high-grade urea solution, and high purity ammonia
ii. Creating actual demand for TEPIC in new grades
2) Performance Materials
i. Increasing sales of display materials for photo-alignment IPS and HYPERTECH®, multi-branched organic nanoparticles
ii. Expanding sales of anti-reflective coating materials for semiconductors (ARC®＊) and multilayer process materials (OptiStack®＊) and launching sensor materials
iii. Entering the oil & gas business fields with selling chemicals that enhance productivity of oil welliv. Developing materials for OLED and expanding sales
v. Enhancing production systems and customer services in overseas countries

64

71

Total payout ratio

70

40
31

29

32

31

2012

2013

2014

2015

3) Agricultural Chemicals
i. Expanding sales of ALTAIR, a paddy rice herbicide and launching a new product line of ROUNDUP, a non-selective herbicide
ii. Establishing overseas subsidiaries and increasing sales in overseas markets
iii. Expanding application of Fluralaner, an active ingredient of veterinary pharmaceutical, to “spot on” drugs for transdermal administration for dogs and cats4) Pharmaceuticals
i. Deriving new products and enhancing the pipeline
ii. Expanding the business of custom manufacturing service for active ingredients of generic drugs

1) Information & Communication
i. Developing heat-resistant lenses, light control film and optical interconnect materials
ii. Creating next-generation display and semiconductor materials

Gradually increase to
40% in FY2018
Maintain 70%

Total payout ratio

100

Improving existing technologies, establishing new technologies, and accelerating the development of new products

3 Initiatives for Stage II and Onward

5 Shareholder Return
Dividend payout ratio

200＊

Maintain above 15%
Maintain above 14%
Above 8%＊13) Enhancing R&D capability

ARC® and OptiStack® are registered trademarks of Brewer Science, Inc.

Naphtha（¥/kL）: FY2015 42,800 FY2016 35,400 FY2017 and onward 51,100 FX rate（¥/$）
: FY2015 1H 122 2H 118 FY2016 and onward 115

3 R&D Expenses, Capex

Identifying market needs by moving closer to customers and obtaining information about advanced materials＊

45

2 Others: trading, others and adjustment＊

2) Improving marketing power

2 Sources of Growth

2 Financial Target
Sales (left axis)“Aiming to Be a Company that Creates the Future” ―

2018
（FY）

2) Life Sciences
i. Developing NC-515 insecticide, new fungicides and paddy rice herbicides
ii. Jointly developing NIP-022, a platelet increasing agent and promoting the research collaboration of antifungal drugs
iii. Achieving global standardization of cell culture materials
3) Environment & Energy
i. Developing materials for secondary batteries and fuel cells
ii. Creating energy harvesting materials4) R&Di. Acquiring seeds in the field of biomedical materials
ii. Introducing cutting-edge technologies through open innovations
iii. Developing new business fields by strengthening and fusion of core technologies

Nissan Chemical Industries, Ltd. Annual Report 201614

Special
FeatureStart of “Progress2030” Long-Term Business Plan and “Vista2021” Medium-Term Business Plan―

2. Outline of “Vista2021” Medium-Term Business Plan

3. Outline of “Vista2021 Stage I”―A six-year plan starting in FY2016―

The plan is divided into the first three years (FY 2016 to 2018) as Stage I and the second three years (FY 2019 to 2021) as Stage II.

1 Basic strategies
1) Maximizing the profit from existing products Boosting the market shares of products for growing fields, driving overseas business expansion, and reducing costs

1 Ideal Situation of 2021●●

Information & Communication and Life Sciences are the driving force for growth while Chemicals & Affiliates achieve a stable profit.
Establish the foundation of Environment & Energy business and a position as a promising chemical manufacturer that keeps moving forward with a strong presence.

1. Sales / Operating income / Net income＊1 [100 million yen]
Operating income (right axis)

Chemicals

2,500

2,500

2. Operating income by segment [100 million yen]

Net income(right axis)
500

450

400

350

300

250

1,000

200

150

500

100

0

0

1,500

2,170

1,769

2,000

400

350

286

310

271

224

20

2018

2021

1 Net income attributable to owners of parent（FY）

Agricultural
Chemicals

20286

Pharmaceuticals

24

350 7

Others＊2
400

167

129

108

0
2015

Performance
Materials

184

120

154

39
▲1

40

2015

2018

▲20

2021

（FY）

＊

4 Financial Indicators (FY2018 target)

R&D Expenses / Capex [100 million yen]
FY2013-2015 total
600
500

Operating margin
ROE
R&D expenses/sales

FY2016-2018 total

538
450

427

＊2

400

288

300

0
1 Acceptance basis

R&D expenses
2 Production commencement basis

＊

Capex

（%）
80
60

Dividend payout ratio

37

67

40
20
0

13

Nissan Chemical Industries, Ltd. Annual Report 2016

37

2011

59

1) Chemicals
i. Increasing the sales of AdBlue, a high-grade urea solution, and high purity ammonia
ii. Creating actual demand for TEPIC in new grades
2) Performance Materials
i. Increasing sales of display materials for photo-alignment IPS and HYPERTECH®, multi-branched organic nanoparticles
ii. Expanding sales of anti-reflective coating materials for semiconductors (ARC®＊) and multilayer process materials (OptiStack®＊) and launching sensor materials
iii. Entering the oil & gas business fields with selling chemicals that enhance productivity of oil welliv. Developing materials for OLED and expanding sales
v. Enhancing production systems and customer services in overseas countries

64

71

Total payout ratio

70

40
31

29

32

31

2012

2013

2014

2015

3) Agricultural Chemicals
i. Expanding sales of ALTAIR, a paddy rice herbicide and launching a new product line of ROUNDUP, a non-selective herbicide
ii. Establishing overseas subsidiaries and increasing sales in overseas markets
iii. Expanding application of Fluralaner, an active ingredient of veterinary pharmaceutical, to “spot on” drugs for transdermal administration for dogs and cats4) Pharmaceuticals
i. Deriving new products and enhancing the pipeline
ii. Expanding the business of custom manufacturing service for active ingredients of generic drugs

1) Information & Communication
i. Developing heat-resistant lenses, light control film and optical interconnect materials
ii. Creating next-generation display and semiconductor materials

Gradually increase to
40% in FY2018
Maintain 70%

Total payout ratio

100

Improving existing technologies, establishing new technologies, and accelerating the development of new products

3 Initiatives for Stage II and Onward

5 Shareholder Return
Dividend payout ratio

200＊

Maintain above 15%
Maintain above 14%
Above 8%＊13) Enhancing R&D capability

ARC® and OptiStack® are registered trademarks of Brewer Science, Inc.

Naphtha（¥/kL）: FY2015 42,800 FY2016 35,400 FY2017 and onward 51,100 FX rate（¥/$）
: FY2015 1H 122 2H 118 FY2016 and onward 115

3 R&D Expenses, Capex

Identifying market needs by moving closer to customers and obtaining information about advanced materials＊

45

2 Others: trading, others and adjustment＊

2) Improving marketing power

2 Sources of Growth

2 Financial Target
Sales (left axis)“Aiming to Be a Company that Creates the Future” ―

2018
（FY）

2) Life Sciences
i. Developing NC-515 insecticide, new fungicides and paddy rice herbicides
ii. Jointly developing NIP-022, a platelet increasing agent and promoting the research collaboration of antifungal drugs
iii. Achieving global standardization of cell culture materials
3) Environment & Energy
i. Developing materials for secondary batteries and fuel cells
ii. Creating energy harvesting materials4) R&Di. Acquiring seeds in the field of biomedical materials
ii. Introducing cutting-edge technologies through open innovations
iii. Developing new business fields by strengthening and fusion of core technologies

Nissan Chemical Industries, Ltd. Annual Report 201614

Business Overview

Performance Materials
We will continue to expand the business by actively developing display, semiconductor, and inorganic materials, as well as
new materials for new fields.

Display Materials

Features of Our BusinessOur display materials business, led by SUNEVER® (polyimide for LCD / flat panel displays) and NHC® (insulating hard coating),
is developed by meeting the expanding display market needs in and around Asia.

Electronic Materials●●

Semiconductor Materials
We provide bottom anti-reflective coating (ARC®) materials necessary for semiconductor manufacturing process. We also work
to expand our business by developing multilayer process materials and temporary bonding materials.

Base

Promoting R&D in an integrated manner with customers in Japan and overseas countries
Bases established in Japan, Korea, Taiwan, and China that target the continuously growing field of electronicmaterials in the Asian market

Inorganic Materials

China : Shanghai (NCS)●

Development of a wide range of applications that take advantage of the features of high performance colloid products●

Prompt response to customers through collaboration between sales, manufacturing, and research teams

Inorganic Materials

Taiwan : Kaohsiung (NCT)

We have continuously developed nano-colloids to a variety of industries for many years using nanoparticle control technology,
one of our core technologies. We strive to supply our main product, SNOWTEX®, and other products.

Business Results and Outlook(100 million yen)

New Products

Sales (left axis)

500
400

374

300

Main Products

2000This is a coating material made from polyimide resin. It is used for glass substrates to align liquid crystal molecules in a particular
direction. We offer various grades of this product for small- and medium-sized screens, such as PCs, tablets and smartphones, inaddition to those for the latest flat-panel LCD TVs.

518

120

120

150

117

100

88
50

2012

2013

2014

2015

In FY2015, sales of SUNEVER® for small- and medium-sized
screens such as smartphones and those for large screens suchas TVs remained strong, but ARC® and other products wereaffected by the decline in operating rates of some customers.
Regarding inorganic materials, SNOWTEX® for polishing
agents for electronic materials struggled but other general uses
and ORGANOSILICASOL sales increased year on year.

0
2016(Outlook) (FY)Ｔ Ｏ ＰＩＣ Ｓ

Anti-reflective coating materials for semiconductors (ARC®)LCD TVSNOWTEX®
This is a colloid solution with nano-sized silica particles dispersed stably in water. Taking advantage of its diverse functions, it has
been used in a wide range of fields such as paper, fibers, iron and steel, foundry, and refractory. In recent years, we have developed
new applications for this product, such as those for batteries, catalyst binders, coating agents for ink-jet printing paper, and polishing
agents for electronic substrate materials and electronic recording media.
This is a colloid solution with nano-sized silica sols dispersed stably in an organic solvent. It can be applied for new uses and fields,such as compounding with resin, which is difficult to do with conventional water-based silica sols. It is used for organic-inorganic
composite materials and hard coating agents.

72

428

494

(100 million yen)

553

100

SUNEVER®

ORGANOSILICASOL

Operating income (right axis)

600

Our development focuses on next generation products that identify the future needs of customers.

This is a material that is developed for semiconductor lithography. It can be used to coat the part under photoresist to solve various
problems with lithographic exposure. We offer products that are compatible with a wide range of line widths, from the i-line to the
cutting-edge ArF, thereby contributing to technological innovation of semiconductor devices.

Korea : Pyeongtaek (NCK)

Silicon wafer

Development of OLED Related Materials

We work on the development of materials that support the technological innovation of
displays, such as OLED and flexible panels, and next-generation products related to
semiconductor materials and inorganic materials. Most importantly, we focus our efforts ondeveloping markets for OLED, which is expected to grow in the future as a next-generation
display material. In addition to coating hole-injection layer materials and TFT planarizing
film materials, we are currently moving forward with the development of distinctive
peripheral materials, such as bank materials that help ensure the uniformity of pixels during
inkjet application and optical alignment materials used for anti-reflective retardation films.

Hole injection layer materials (Elsource®)

These products are effective for improving the characteristics and reliability ofdevices. The optimized ink characteristics have made them applicable for various
coating methods. They help ensure lower costs and the improved reliability of panels.

TFT planarizing film materials (NPAR®)Light

Barrier layer (SIN)

Emission layer
Anode (reflective anode)

TFT array

Film substrate

Glass substrate

Polarizer(optical alignment material ＋
coating polarizer)
Retardation film
(optical alignment material ＋
coating liquid crystal)Light extraction layer
Sealing/planarizing materials
Bank (photosensitive liquid
repellent material)
Hole injection layer (HIL)
TFT planarization layer(photosensitive acrylic)
Release layer

The NPAR® series are positive-working photosensitive acrylic resins that feature low levels of outgas and high planarization. They are used in planarizing films for the
TFT array of OLED displays and other types of displays.

15

Nissan Chemical Industries, Ltd. Annual Report 2016

Nissan Chemical Industries, Ltd. Annual Report 201616

Business Overview

Performance Materials
We will continue to expand the business by actively developing display, semiconductor, and inorganic materials, as well as
new materials for new fields.

Display Materials

Features of Our BusinessOur display materials business, led by SUNEVER® (polyimide for LCD / flat panel displays) and NHC® (insulating hard coating),
is developed by meeting the expanding display market needs in and around Asia.

Electronic Materials●●

Semiconductor Materials
We provide bottom anti-reflective coating (ARC®) materials necessary for semiconductor manufacturing process. We also work
to expand our business by developing multilayer process materials and temporary bonding materials.

Base

Promoting R&D in an integrated manner with customers in Japan and overseas countries
Bases established in Japan, Korea, Taiwan, and China that target the continuously growing field of electronicmaterials in the Asian market

Inorganic Materials

China : Shanghai (NCS)●

Development of a wide range of applications that take advantage of the features of high performance colloid products●

Prompt response to customers through collaboration between sales, manufacturing, and research teams

Inorganic Materials

Taiwan : Kaohsiung (NCT)

We have continuously developed nano-colloids to a variety of industries for many years using nanoparticle control technology,
one of our core technologies. We strive to supply our main product, SNOWTEX®, and other products.

Business Results and Outlook(100 million yen)

New Products

Sales (left axis)

500
400

374

300

Main Products

2000This is a coating material made from polyimide resin. It is used for glass substrates to align liquid crystal molecules in a particular
direction. We offer various grades of this product for small- and medium-sized screens, such as PCs, tablets and smartphones, inaddition to those for the latest flat-panel LCD TVs.

518

120

120

150

117

100

88
50

2012

2013

2014

2015

In FY2015, sales of SUNEVER® for small- and medium-sized
screens such as smartphones and those for large screens suchas TVs remained strong, but ARC® and other products wereaffected by the decline in operating rates of some customers.
Regarding inorganic materials, SNOWTEX® for polishing
agents for electronic materials struggled but other general uses
and ORGANOSILICASOL sales increased year on year.

0
2016(Outlook) (FY)Ｔ Ｏ ＰＩＣ Ｓ

Anti-reflective coating materials for semiconductors (ARC®)LCD TVSNOWTEX®
This is a colloid solution with nano-sized silica particles dispersed stably in water. Taking advantage of its diverse functions, it has
been used in a wide range of fields such as paper, fibers, iron and steel, foundry, and refractory. In recent years, we have developed
new applications for this product, such as those for batteries, catalyst binders, coating agents for ink-jet printing paper, and polishing
agents for electronic substrate materials and electronic recording media.
This is a colloid solution with nano-sized silica sols dispersed stably in an organic solvent. It can be applied for new uses and fields,such as compounding with resin, which is difficult to do with conventional water-based silica sols. It is used for organic-inorganic
composite materials and hard coating agents.

72

428

494

(100 million yen)

553

100

SUNEVER®

ORGANOSILICASOL

Operating income (right axis)

600

Our development focuses on next generation products that identify the future needs of customers.

This is a material that is developed for semiconductor lithography. It can be used to coat the part under photoresist to solve various
problems with lithographic exposure. We offer products that are compatible with a wide range of line widths, from the i-line to the
cutting-edge ArF, thereby contributing to technological innovation of semiconductor devices.

Korea : Pyeongtaek (NCK)

Silicon wafer

Development of OLED Related Materials

We work on the development of materials that support the technological innovation of
displays, such as OLED and flexible panels, and next-generation products related to
semiconductor materials and inorganic materials. Most importantly, we focus our efforts ondeveloping markets for OLED, which is expected to grow in the future as a next-generation
display material. In addition to coating hole-injection layer materials and TFT planarizing
film materials, we are currently moving forward with the development of distinctive
peripheral materials, such as bank materials that help ensure the uniformity of pixels during
inkjet application and optical alignment materials used for anti-reflective retardation films.

Hole injection layer materials (Elsource®)

These products are effective for improving the characteristics and reliability ofdevices. The optimized ink characteristics have made them applicable for various
coating methods. They help ensure lower costs and the improved reliability of panels.

TFT planarizing film materials (NPAR®)Light

Barrier layer (SIN)

Emission layer
Anode (reflective anode)

TFT array

Film substrate

Glass substrate

Polarizer(optical alignment material ＋
coating polarizer)
Retardation film
(optical alignment material ＋
coating liquid crystal)Light extraction layer
Sealing/planarizing materials
Bank (photosensitive liquid
repellent material)
Hole injection layer (HIL)
TFT planarization layer(photosensitive acrylic)
Release layer

The NPAR® series are positive-working photosensitive acrylic resins that feature low levels of outgas and high planarization. They are used in planarizing films for the
TFT array of OLED displays and other types of displays.

15

Nissan Chemical Industries, Ltd. Annual Report 2016

Nissan Chemical Industries, Ltd. Annual Report 201616

Business Overview

Agricultural Chemicals
Provide a stable supply of food to people around the world
Provide agrochemicals that are environmentally friendly
This is what we aim to do.
We seek out and develop new agents for mainstay crops around the world as well as those in Japan. We also actively acquire other companies’
agents and jointly develop agents. We constantly work to expand our product lineup and sell our products in Japan and other countries.

Agrochemicals
We develop, manufacture, and sell herbicides, insecticides, fungicides, and other products used for the management of agricultural land and green land.

Features of Our Business
Integrated System from Exploratory Research, Development to Manufacture and Sales
Exploratory Research

Manufactureand Sales

Development

Veterinary Pharmaceuticals

Business division

We develop and manufacture active pharmaceutical ingredients used in ectoparasiticides for companion animals.

Research laboratories

Main ProductsPlantsSIRIUS®

Business Results and Outlook

To meet the needs of farmers, we develop and sell a large number of one-shot herbicides for rice paddies. The main component of these herbicides is
SIRIUS®, our proprietary active ingredient. We have been marketing these products in overseas markets as well in more than 20 countries for over 20 years.

ALTAIR®

ALTAIR®, an active ingredient in herbicides for rice paddies, is a wide-spectrum herbicide with that is highly effective in eliminating bulrush and cyperaceousperennial weeds. It is also effective for weeds that are resistant to conventional sulfonylurea- based herbicides. We market this product in Japan, Korea, and China.

ROUNDUP® MAXLOAD, ROUNDUP® MAXLOAD AL, ROUNDUP® MAXLOAD ALⅡ(100 million yen)
ALTAIR®

In 2002, we acquired the exclusive marketing rights to this product in Japan from Monsanto. While this herbicide kills most weeds, it has low toxicity tohumans and animals and does not remain in the soil or in the environment. Due to these benefits, this herbicide is popular all over the world. From 2011,
we added ROUNDUP® MAXLOAD AL to the product line-up. Created for general households, this product features a container with a shower head and canbe used without needing to be diluted.

100
ROUNDUP®
MAXLOAD ALⅡ

391

0

457

92
50
2012

475

108

150

113

In FY2015, sales of ALTAIR and Fluralaner remained steady.
Regarding ROUNDUP, we developed sales for generalhousehold use.

100

50

62

2013

(100 million yen)

521

2014

2015

0
2016(Outlook) (FY)Ｔ Ｏ ＰＩＣ ＳSTARMITE®

Entering the Field of Veterinary Pharmaceuticals

This acaricide prevents and eliminates spider mites from fruits, tea, and vegetables. It is extremely safe for the natural enemies of spider mites and useful
insects such as honey bees. It is also popular in overseas countries. In Korea it is used for fruits and vegetables, and in South America it is used for flowers.

SANMITE®

STARMITE®

LEIMAY®, ORACLE®

These fungicides have specific activity for diseases caused by oomycetes and myxomycetes. We sell LEIMAY®, which is used as an atomizing agent for
potatoes, grapes, and vegetables, and ORACLE® , which is used for preventing and eliminating the root-knot disease of cruciferous vegetables andsoil-borne diseases of potatoes, rice, vegetables, and lawns.

GREATUM®, PULSOR®

These products contain a fungicide that we acquired from Dow AgroSciences in 2010. We market GREATUM ® for the sheath blight disease that affects
wetland rice and IKARGA® for large patch lawn disease. We export and sell this product in overseas markets including China, Korea, India, and Brazil under
the trade name of PULSOR®.

354

200

TARGA

This insecticide/acaricide is effective against spider mites and rust mites in fruit trees, as well as spider mites and whiteflies in vegetables. We also market
this product in more than 30 overseas countries.

500

300

This herbicide controls gramineous weeds that affect broadleaf crops such as soy beans, rapeseed, beets, cotton, and sunflowers. It is used in more than
35 countries, including India and countries in the Americas and Europe.
Taking advantage of the fact that is extremely effective against cyperaceous weeds, we market this product in Japan under the trade names of HICUT®,
which is a herbicide for rice paddies in the mid to late term that is highly effective against the pesky weed Eleocharis kuroguwai, and INPOOL®, for lawn. We
also market it as PERMIT® in more than 20 overseas countries as an herbicide for rice paddies, corn fields, sugar cane fields, and lawns.

Operating income (right axis)

600

400

®

PERMIT®

Sales (left axis)

LEIMAY®

Fluralaner

Fluralaner is a chemical compound with an isoxazoline skeleton that we invented. It is an active ingredient found in BRAVECTO™＊, a veterinary pharmaceutical that was developed by
MSD Animal Health (MSD). We manufacture this product and supply it to MSD as an active ingredient for veterinary pharmaceuticals.

In conducting exploratory research on insecticides, we invented Fluralaner, a chemical compound that is
effective as an ectoparasiticide for companion animals. We began to manufacture and supply this compound
to veterinary pharmaceutical manufacturers, making our full-scale entry into the field of veterinary
pharmaceuticals.
Fluralaner is an active ingredient of BRAVECTO a veterinary pharmaceutical that was developed by MSD. It is a
new chemical compound with an isoxazoline skeleton, and exhibits a new action mechanism that is different
from that of other conventional ectoparasiticides. In February 2014, the European Union (EU) permitted themarketing of BRAVECTO chewable tablet (an orally administered drug), and MSD started selling it in major
European countries in April. In the United States, it was approved in May 2014 and began to be sold in June.
In Japan, it was registered in May 2015 and launched in July. Currently, it is marketed in more than 60
countries worldwide. The superior features of this product include not only the immediate effects on major
breeds of fleas and ticks on dogs, but also long-lasting effects which protect dogs from fleas and ticks for threemonths (eight-week protection against brown dog ticks), which is far longer than existing products that normally need to be given every month.
In addition, the EU permitted the marketing of BRAVECTO Spot-On (a transdermally administered drug) in May 2016. Unlike chewable tablet that was limited to use for dogs,
BRAVECTO Spot-On is intended for both cats and dogs. MSD is working to receive marketing approval in other countries, such as the United States and Japan.

BRAVECTO™ is a trademark of Intervet International B.V.

＊

17

Nissan Chemical Industries, Ltd. Annual Report 2016

Nissan Chemical Industries, Ltd. Annual Report 201618

Business Overview

Agricultural Chemicals
Provide a stable supply of food to people around the world
Provide agrochemicals that are environmentally friendly
This is what we aim to do.
We seek out and develop new agents for mainstay crops around the world as well as those in Japan. We also actively acquire other companies’
agents and jointly develop agents. We constantly work to expand our product lineup and sell our products in Japan and other countries.

Agrochemicals
We develop, manufacture, and sell herbicides, insecticides, fungicides, and other products used for the management of agricultural land and green land.

Features of Our Business
Integrated System from Exploratory Research, Development to Manufacture and Sales
Exploratory Research

Manufactureand Sales

Development

Veterinary Pharmaceuticals

Business division

We develop and manufacture active pharmaceutical ingredients used in ectoparasiticides for companion animals.

Research laboratories

Main ProductsPlantsSIRIUS®

Business Results and Outlook

To meet the needs of farmers, we develop and sell a large number of one-shot herbicides for rice paddies. The main component of these herbicides is
SIRIUS®, our proprietary active ingredient. We have been marketing these products in overseas markets as well in more than 20 countries for over 20 years.

ALTAIR®

ALTAIR®, an active ingredient in herbicides for rice paddies, is a wide-spectrum herbicide with that is highly effective in eliminating bulrush and cyperaceousperennial weeds. It is also effective for weeds that are resistant to conventional sulfonylurea- based herbicides. We market this product in Japan, Korea, and China.

ROUNDUP® MAXLOAD, ROUNDUP® MAXLOAD AL, ROUNDUP® MAXLOAD ALⅡ(100 million yen)
ALTAIR®

In 2002, we acquired the exclusive marketing rights to this product in Japan from Monsanto. While this herbicide kills most weeds, it has low toxicity tohumans and animals and does not remain in the soil or in the environment. Due to these benefits, this herbicide is popular all over the world. From 2011,
we added ROUNDUP® MAXLOAD AL to the product line-up. Created for general households, this product features a container with a shower head and canbe used without needing to be diluted.

100
ROUNDUP®
MAXLOAD ALⅡ

391

0

457

92
50
2012

475

108

150

113

In FY2015, sales of ALTAIR and Fluralaner remained steady.
Regarding ROUNDUP, we developed sales for generalhousehold use.

100

50

62

2013

(100 million yen)

521

2014

2015

0
2016(Outlook) (FY)Ｔ Ｏ ＰＩＣ ＳSTARMITE®

Entering the Field of Veterinary Pharmaceuticals

This acaricide prevents and eliminates spider mites from fruits, tea, and vegetables. It is extremely safe for the natural enemies of spider mites and useful
insects such as honey bees. It is also popular in overseas countries. In Korea it is used for fruits and vegetables, and in South America it is used for flowers.

SANMITE®

STARMITE®

LEIMAY®, ORACLE®

These fungicides have specific activity for diseases caused by oomycetes and myxomycetes. We sell LEIMAY®, which is used as an atomizing agent for
potatoes, grapes, and vegetables, and ORACLE® , which is used for preventing and eliminating the root-knot disease of cruciferous vegetables andsoil-borne diseases of potatoes, rice, vegetables, and lawns.

GREATUM®, PULSOR®

These products contain a fungicide that we acquired from Dow AgroSciences in 2010. We market GREATUM ® for the sheath blight disease that affects
wetland rice and IKARGA® for large patch lawn disease. We export and sell this product in overseas markets including China, Korea, India, and Brazil under
the trade name of PULSOR®.

354

200

TARGA

This insecticide/acaricide is effective against spider mites and rust mites in fruit trees, as well as spider mites and whiteflies in vegetables. We also market
this product in more than 30 overseas countries.

500

300

This herbicide controls gramineous weeds that affect broadleaf crops such as soy beans, rapeseed, beets, cotton, and sunflowers. It is used in more than
35 countries, including India and countries in the Americas and Europe.
Taking advantage of the fact that is extremely effective against cyperaceous weeds, we market this product in Japan under the trade names of HICUT®,
which is a herbicide for rice paddies in the mid to late term that is highly effective against the pesky weed Eleocharis kuroguwai, and INPOOL®, for lawn. We
also market it as PERMIT® in more than 20 overseas countries as an herbicide for rice paddies, corn fields, sugar cane fields, and lawns.

Operating income (right axis)

600

400

®

PERMIT®

Sales (left axis)

LEIMAY®

Fluralaner

Fluralaner is a chemical compound with an isoxazoline skeleton that we invented. It is an active ingredient found in BRAVECTO™＊, a veterinary pharmaceutical that was developed by
MSD Animal Health (MSD). We manufacture this product and supply it to MSD as an active ingredient for veterinary pharmaceuticals.

In conducting exploratory research on insecticides, we invented Fluralaner, a chemical compound that is
effective as an ectoparasiticide for companion animals. We began to manufacture and supply this compound
to veterinary pharmaceutical manufacturers, making our full-scale entry into the field of veterinary
pharmaceuticals.
Fluralaner is an active ingredient of BRAVECTO a veterinary pharmaceutical that was developed by MSD. It is a
new chemical compound with an isoxazoline skeleton, and exhibits a new action mechanism that is different
from that of other conventional ectoparasiticides. In February 2014, the European Union (EU) permitted themarketing of BRAVECTO chewable tablet (an orally administered drug), and MSD started selling it in major
European countries in April. In the United States, it was approved in May 2014 and began to be sold in June.
In Japan, it was registered in May 2015 and launched in July. Currently, it is marketed in more than 60
countries worldwide. The superior features of this product include not only the immediate effects on major
breeds of fleas and ticks on dogs, but also long-lasting effects which protect dogs from fleas and ticks for threemonths (eight-week protection against brown dog ticks), which is far longer than existing products that normally need to be given every month.
In addition, the EU permitted the marketing of BRAVECTO Spot-On (a transdermally administered drug) in May 2016. Unlike chewable tablet that was limited to use for dogs,
BRAVECTO Spot-On is intended for both cats and dogs. MSD is working to receive marketing approval in other countries, such as the United States and Japan.

BRAVECTO™ is a trademark of Intervet International B.V.

＊

17

Nissan Chemical Industries, Ltd. Annual Report 2016

Nissan Chemical Industries, Ltd. Annual Report 201618

Business Overview

Pharmaceuticals
We strive to develop better pharmaceuticals by making use of our accumulated technology. Our products help preserve
precious lives and deliver smiles to people around the world.

Private Drug Discovery
We first entered the pharmaceutical business in 1982. Since then, we have continued to tackle challenges in the R&D of innovative new drugs, making
full use of our strategically developed chemical compound library, our cutting-edge evaluation functions, and our fine organic synthesis technologies.

Features of Our Business
A Unique Business Model that Specializes in New Drug Discovery and the Manufacture of API without Sales ForceBusiness Model

Finetech®
This business provides total support to customers for their R&D of active pharmaceutical ingredients (API). Specifically, we engage in the contracted development of manufacturing
process in each one of the stages, from pre-clinical to commercial production stages, and the contracted manufacture of API and intermediates in compliance with GMP.

Main Products
Pitavastatin calcium (LIVALO ®)Efonidipine hydrochloride (LANDEL®, FINTE®)

NissanChemicalUpfront payment
Development milestone

License out

Drug discovery

This is a statin agent that greatly reduces LDL cholesterol and causes fewer drug-interactions. It is distributed by Kowa
Pharmaceutical Co. Ltd. in Japan. This agent is recognized as one of the “strong statins” in clinical practice. It has also beenreleased in the United States, as well as Latin American, European, and Asian countries. There are plans to release it in othercountries and territories in the future.
LIVALO®

This is a dual type Ca antagonist that blocks not only L-type calcium channels, but also T-type channels. LANDEL is distributed by Zeria Pharmaceutical Co., Ltd. andShionogi & Co., Ltd. in Japan, and FINTE ® is distributed by Green Cross Co. in South Korea. This agent has shown to have a positive effect on hypertension and angina
pectoris. In addition, the agent is expected to provide a renal-protective and cardio-protective benefits.

Novel Agent under Development
NIP-022 (platelet increasing agent)This is orally administrable drug increases the platelet count by activating the thrombopoietin receptor, which is a hematopoietic factor, to accelerate platelet production. It has
the potential to be a drug for treating every kind thrombocytopenia.

NT-702 (asthma care, arteriosclerosis obliterans treatment agent)This exhibits both a phosphodiesterase inhibitory effect and a thromboxane A2 synthetase inhibitory effect. It is expected to be used as a novel agent for asthma andintermittent claudication associated with peripheral arterial disease.

NTC-801 (anti-arrhythmic agent)This is a new antiarrhythmic agent that inhibits the acetylcholine-activated potassium channel current (IKACh). NTC-801 is expected to be used as an atrial selective agent for
the treatment of atrial fibrillation because IKACh channels are apparent in the atrium but not in the ventricle.

Finetech Business
Manufacturing of API and intermediates (from pre-clinical to commercial production satages and manufacturing in compliance with GMP)
We manufacture API and intermediates by establishing manufacturing methods that can be scaled up.

Process research (route scouting, optimization and scale-up)
We establish production processes that can be scaled-up through quantitative reaction analysis and confirming the stability data of every process. We suggest
cost-competitive synthesis routes by only disclosing the structural formula.

Supplying API of generics

After Launch

Before Launch
Major
PharmaNissanChemicalClinical trial

API production

Sales milestone
Royalty

Major
PharmaAPI shipment

Sales

Formulation
MarketingBusiness Results and Outlook(100 million yen)
150

Sales (left axis)

127

Operating income (right axis)

100

116
88

100

52
50

0

2012

(100 million yen)

87

74

49

2013

23

20

2014

2015

50

In FY2015, the sales of LIVALO® for overseas markets
remained strong, but conditions remained tough in thedomestic market. On the other hand, the sales of Finetech werestrong. We also had revenue from a lump-sum payment that
resulted from the joint development and conclusion of a license
agreement related to a platelet increasing agent (NIP-022).

14

0
2016(Outlook) (FY)Ｔ Ｏ ＰＩＣ Ｓ

Joint Development of a Novel Platelet Increasing Agent

In October 2015, we entered into a co-development and license agreement on
NIP-022, a novel platelet increasing agent that we discovered, with Yakult
Honsha Co., Ltd. (hereafter, “Yakult Honsha”). In July 2016, Yakult Honsha
began clinical trials on the agent. We are in charge of the development andmanufacture of the API and other processes, and will proceed with thedevelopment of this agent jointly with Yakult Honsha.

Joint Research of Novel Antifungal Drugs

In January 2016, we concluded a strategic research collaboration agreement withShionogi & Co., Ltd. (hereafter, “Shionogi”). This agreement is aimed at discoveringnovel antifungal drug candidates. Among areas of infection medications, there is
still a high level of medical needs that must be met in the area of antifungal
therapeutic drugs, and more effective and safer drugs are demanded. Shionogi has
strengths in small molecule drug discovery and focuses on the infectious disease
area, while we are highly capable of conducting structure-activity relationship (SAR)
study based on our sophisticated capabilities in the design and organic synthesis ofsmall molecule compounds. In cooperating with Shionogi, we will bolster thesynergies of the two companies’ capabilities and strive to discover candidate
compounds for the development of novel antifungal drugs.

We develop and sell API capable of high levels of activity in small amounts, such as the prostaglandin (PG) class of ingredients and vitamin D3 (VD3), by making use of ouraccumulated technologies for handling high active API and our column equipment capable of high levels of refinement.
19

Nissan Chemical Industries, Ltd. Annual Report 2016

Nissan Chemical Industries, Ltd. Annual Report 201620

Business Overview

Pharmaceuticals
We strive to develop better pharmaceuticals by making use of our accumulated technology. Our products help preserve
precious lives and deliver smiles to people around the world.

Private Drug Discovery
We first entered the pharmaceutical business in 1982. Since then, we have continued to tackle challenges in the R&D of innovative new drugs, making
full use of our strategically developed chemical compound library, our cutting-edge evaluation functions, and our fine organic synthesis technologies.

Features of Our Business
A Unique Business Model that Specializes in New Drug Discovery and the Manufacture of API without Sales ForceBusiness Model

Finetech®
This business provides total support to customers for their R&D of active pharmaceutical ingredients (API). Specifically, we engage in the contracted development of manufacturing
process in each one of the stages, from pre-clinical to commercial production stages, and the contracted manufacture of API and intermediates in compliance with GMP.

Main Products
Pitavastatin calcium (LIVALO ®)Efonidipine hydrochloride (LANDEL®, FINTE®)

NissanChemicalUpfront payment
Development milestone

License out

Drug discovery

This is a statin agent that greatly reduces LDL cholesterol and causes fewer drug-interactions. It is distributed by Kowa
Pharmaceutical Co. Ltd. in Japan. This agent is recognized as one of the “strong statins” in clinical practice. It has also beenreleased in the United States, as well as Latin American, European, and Asian countries. There are plans to release it in othercountries and territories in the future.
LIVALO®

This is a dual type Ca antagonist that blocks not only L-type calcium channels, but also T-type channels. LANDEL is distributed by Zeria Pharmaceutical Co., Ltd. andShionogi & Co., Ltd. in Japan, and FINTE ® is distributed by Green Cross Co. in South Korea. This agent has shown to have a positive effect on hypertension and angina
pectoris. In addition, the agent is expected to provide a renal-protective and cardio-protective benefits.

Novel Agent under Development
NIP-022 (platelet increasing agent)This is orally administrable drug increases the platelet count by activating the thrombopoietin receptor, which is a hematopoietic factor, to accelerate platelet production. It has
the potential to be a drug for treating every kind thrombocytopenia.

NT-702 (asthma care, arteriosclerosis obliterans treatment agent)This exhibits both a phosphodiesterase inhibitory effect and a thromboxane A2 synthetase inhibitory effect. It is expected to be used as a novel agent for asthma andintermittent claudication associated with peripheral arterial disease.

NTC-801 (anti-arrhythmic agent)This is a new antiarrhythmic agent that inhibits the acetylcholine-activated potassium channel current (IKACh). NTC-801 is expected to be used as an atrial selective agent for
the treatment of atrial fibrillation because IKACh channels are apparent in the atrium but not in the ventricle.

Finetech Business
Manufacturing of API and intermediates (from pre-clinical to commercial production satages and manufacturing in compliance with GMP)
We manufacture API and intermediates by establishing manufacturing methods that can be scaled up.

Process research (route scouting, optimization and scale-up)
We establish production processes that can be scaled-up through quantitative reaction analysis and confirming the stability data of every process. We suggest
cost-competitive synthesis routes by only disclosing the structural formula.

Supplying API of generics

After Launch

Before Launch
Major
PharmaNissanChemicalClinical trial

API production

Sales milestone
Royalty

Major
PharmaAPI shipment

Sales

Formulation
MarketingBusiness Results and Outlook(100 million yen)
150

Sales (left axis)

127

Operating income (right axis)

100

116
88

100

52
50

0

2012

(100 million yen)

87

74

49

2013

23

20

2014

2015

50

In FY2015, the sales of LIVALO® for overseas markets
remained strong, but conditions remained tough in thedomestic market. On the other hand, the sales of Finetech werestrong. We also had revenue from a lump-sum payment that
resulted from the joint development and conclusion of a license
agreement related to a platelet increasing agent (NIP-022).

14

0
2016(Outlook) (FY)Ｔ Ｏ ＰＩＣ Ｓ

Joint Development of a Novel Platelet Increasing Agent

In October 2015, we entered into a co-development and license agreement on
NIP-022, a novel platelet increasing agent that we discovered, with Yakult
Honsha Co., Ltd. (hereafter, “Yakult Honsha”). In July 2016, Yakult Honsha
began clinical trials on the agent. We are in charge of the development andmanufacture of the API and other processes, and will proceed with thedevelopment of this agent jointly with Yakult Honsha.

Joint Research of Novel Antifungal Drugs

In January 2016, we concluded a strategic research collaboration agreement withShionogi & Co., Ltd. (hereafter, “Shionogi”). This agreement is aimed at discoveringnovel antifungal drug candidates. Among areas of infection medications, there is
still a high level of medical needs that must be met in the area of antifungal
therapeutic drugs, and more effective and safer drugs are demanded. Shionogi has
strengths in small molecule drug discovery and focuses on the infectious disease
area, while we are highly capable of conducting structure-activity relationship (SAR)
study based on our sophisticated capabilities in the design and organic synthesis ofsmall molecule compounds. In cooperating with Shionogi, we will bolster thesynergies of the two companies’ capabilities and strive to discover candidate
compounds for the development of novel antifungal drugs.

We develop and sell API capable of high levels of activity in small amounts, such as the prostaglandin (PG) class of ingredients and vitamin D3 (VD3), by making use of ouraccumulated technologies for handling high active API and our column equipment capable of high levels of refinement.
19

Nissan Chemical Industries, Ltd. Annual Report 2016

Nissan Chemical Industries, Ltd. Annual Report 201620

Business Overview

Chemicals
The development of products focused on the high-level customer needs is another important mission.

Basic Chemicals

Features of Our BusinessWe provide products to meet a wide range of demands, focusing on melamine, sulfuric acid, nitric acid, ammonia and otherheavy chemicals. We also provide high-purity chemicals for washing semiconductors.

Supplying Derivatives that Use Ammonia as Main Raw Material
Nat ural gas

Ammoni a

AdBl ue

Urea
High purity liquid ammonia/
High purity aqueous ammonia

Fine Chemicals
This business focuses on environmental chemicals such as TEPIC®, a special epoxy compound for sealants, Melamine Cyanurate andPHOSMEL®, non-halogen flame retardants, phenylphosphonic acid, which is a surface modifier, and HI-LITE® sterilizing agent and disinfectant.

MELAMINECYANYRATEME LAMI NE

Ni t ri c aci d

Iso cyanuric acid
Onoda Pla nt

High purity nitric acid

TE PIC

Chl ori ne

New Products

Production flow of ammonia series products at Toyama Plant
Procurement from outside (as of August 2016)

To better meet customer needs, we are working to fully enhance our product lineup, which focuses on new grade TEPIC®.

Main Products

400This is widely used as an adhesive agent for plywood, laminated sheets, molded products, resin finish for fabric, paper and paint. It ishighly aesthetic and offers a substantial level of quality.

High-grade urea solution AdBlue®

100
Printed circuit board

LED bulb

MELAMINE CYANYRATE (MC)This is the compound of melamine and iso cyanuric acid. We provide high quality product by integrated production from raw materials. MC is nitrogen compound, which offers
superb thermal stability up to 300°C. It is used for various engineering plastics, such as nylon, as flame retardant or synergist. It also has exhibits outstanding flame
retardation when used with flame retardants such as phosphorus systems or metal hydroxide, and has been added to various plastics.

HI-LITE®
Chlorinated isocyanulate is the main ingredient in this product, which is used for sterilization and disinfection of swimming pools and water purification tanks.

Nissan Reishi is a safe Japanese-made health food created through the domestic processing of Reishi mushrooms grown in Japan.

21

Nissan Chemical Industries, Ltd. Annual Report 2016

343

343

0

354
49

39

19

19

19

2012

2013

2014

Ammonia Feedstock Change ProjectThis, Tris (2, 3-Epoxy propyl) Isocyanurate is a special tri-functional epoxy compound consisting of a triazine ring and three glycidyl groups. The triazine ring provides
excellent outdoor durability due to its low UV absorption, while the glycidyl groups provide outstanding heat resistance by densely cross-linking with resins.

Nissan Reishi

355(100 million yen)

50
40
30

In FY2015, export sales of MELAMINE were brisk in Basic
Chemicals dept. In Fine Chemicals dept., HI-LITE grew
positively. In addition, a decline in oil prices contributed to therise of the profit rate of the division.

20
10
2015

0
2016(Outlook) (FY)Ｔ Ｏ ＰＩＣ Ｓ

FINEOXOCOL®

TEPIC®

345

Operating income (right axis)

200

This is a solution of urea in demineralized water used as an operating fluid in diesel-powered freight trucks to improve emissions. We
have established and expanded our original supply system addressing customer needs.

This is our unique, highly branched, saturated fatty alcohols and acids with a long chain alkyl group consisting of carbon 16 to 20. It has
been used for various esters, lubricants, cosmetics, and ink modifiers.

Sales (left axis)

300

High Purity Chemicals
Our products used for semiconductors / LED require an extremely high level of purity. We provide sulfuric acid, nitric acid, and ammonia
to customers in this industry, who hold our products in high regard.

Business Results and Outlook(100 million yen)

MELAMINE

HI - LI TE

As a part of the structural reform of our ammonia business, we switched thefeedstock for ammonia produced at Toyama Plant from naphtha to natural gas. We
began producing ammonia from the new feedstock in August 2016. At Toyama
Plant, we began producing ammonia by means of water electrolysis in 1928. We
later introduced manufacturing methods featuring the use of coal, heavy oil, andcrude oil in response to changes in the business environment over the years. To
meet the rapid increase in demand for ammonia in the 1960s, we switched to anaphtha-based method in 1967 to increase the size of our facilities and streamlinethem.
In February 2015, we decided to switch the feedstock because the stableprocurement of natural gas had become a real possibility. By using natural gas, theprice of which fluctuates less than naphtha, we will try to generate stable income
from ammonia and various derivatives such as urea, MELAMINE, and nitric acid.

Natural gas pipeline
Nissan Chemical Toyama Plant
Sea of Japan

Ishikawa Prefecture

Niigata Prefecture
Itoigawa

Kanazawa

INPEX
Naoetsu LNG Terminal

ToyamaToyama Prefecture

Nissan Chemical Industries, Ltd. Annual Report 201622

Business Overview

Chemicals
The development of products focused on the high-level customer needs is another important mission.

Basic Chemicals

Features of Our BusinessWe provide products to meet a wide range of demands, focusing on melamine, sulfuric acid, nitric acid, ammonia and otherheavy chemicals. We also provide high-purity chemicals for washing semiconductors.

Supplying Derivatives that Use Ammonia as Main Raw Material
Nat ural gas

Ammoni a

AdBl ue

Urea
High purity liquid ammonia/
High purity aqueous ammonia

Fine Chemicals
This business focuses on environmental chemicals such as TEPIC®, a special epoxy compound for sealants, Melamine Cyanurate andPHOSMEL®, non-halogen flame retardants, phenylphosphonic acid, which is a surface modifier, and HI-LITE® sterilizing agent and disinfectant.

MELAMINECYANYRATEME LAMI NE

Ni t ri c aci d

Iso cyanuric acid
Onoda Pla nt

High purity nitric acid

TE PIC

Chl ori ne

New Products

Production flow of ammonia series products at Toyama Plant
Procurement from outside (as of August 2016)

To better meet customer needs, we are working to fully enhance our product lineup, which focuses on new grade TEPIC®.

Main Products

400This is widely used as an adhesive agent for plywood, laminated sheets, molded products, resin finish for fabric, paper and paint. It ishighly aesthetic and offers a substantial level of quality.

High-grade urea solution AdBlue®

100
Printed circuit board

LED bulb

MELAMINE CYANYRATE (MC)This is the compound of melamine and iso cyanuric acid. We provide high quality product by integrated production from raw materials. MC is nitrogen compound, which offers
superb thermal stability up to 300°C. It is used for various engineering plastics, such as nylon, as flame retardant or synergist. It also has exhibits outstanding flame
retardation when used with flame retardants such as phosphorus systems or metal hydroxide, and has been added to various plastics.

HI-LITE®
Chlorinated isocyanulate is the main ingredient in this product, which is used for sterilization and disinfection of swimming pools and water purification tanks.

Nissan Reishi is a safe Japanese-made health food created through the domestic processing of Reishi mushrooms grown in Japan.

21

Nissan Chemical Industries, Ltd. Annual Report 2016

343

343

0

354
49

39

19

19

19

2012

2013

2014

Ammonia Feedstock Change ProjectThis, Tris (2, 3-Epoxy propyl) Isocyanurate is a special tri-functional epoxy compound consisting of a triazine ring and three glycidyl groups. The triazine ring provides
excellent outdoor durability due to its low UV absorption, while the glycidyl groups provide outstanding heat resistance by densely cross-linking with resins.

Nissan Reishi

355(100 million yen)

50
40
30

In FY2015, export sales of MELAMINE were brisk in Basic
Chemicals dept. In Fine Chemicals dept., HI-LITE grew
positively. In addition, a decline in oil prices contributed to therise of the profit rate of the division.

20
10
2015

0
2016(Outlook) (FY)Ｔ Ｏ ＰＩＣ Ｓ

FINEOXOCOL®

TEPIC®

345

Operating income (right axis)

200

This is a solution of urea in demineralized water used as an operating fluid in diesel-powered freight trucks to improve emissions. We
have established and expanded our original supply system addressing customer needs.

This is our unique, highly branched, saturated fatty alcohols and acids with a long chain alkyl group consisting of carbon 16 to 20. It has
been used for various esters, lubricants, cosmetics, and ink modifiers.

Sales (left axis)

300

High Purity Chemicals
Our products used for semiconductors / LED require an extremely high level of purity. We provide sulfuric acid, nitric acid, and ammonia
to customers in this industry, who hold our products in high regard.

Business Results and Outlook(100 million yen)

MELAMINE

HI - LI TE

As a part of the structural reform of our ammonia business, we switched thefeedstock for ammonia produced at Toyama Plant from naphtha to natural gas. We
began producing ammonia from the new feedstock in August 2016. At Toyama
Plant, we began producing ammonia by means of water electrolysis in 1928. We
later introduced manufacturing methods featuring the use of coal, heavy oil, andcrude oil in response to changes in the business environment over the years. To
meet the rapid increase in demand for ammonia in the 1960s, we switched to anaphtha-based method in 1967 to increase the size of our facilities and streamlinethem.
In February 2015, we decided to switch the feedstock because the stableprocurement of natural gas had become a real possibility. By using natural gas, theprice of which fluctuates less than naphtha, we will try to generate stable income
from ammonia and various derivatives such as urea, MELAMINE, and nitric acid.

Natural gas pipeline
Nissan Chemical Toyama Plant
Sea of Japan

Ishikawa Prefecture

Niigata Prefecture
Itoigawa

Kanazawa

INPEX
Naoetsu LNG Terminal

ToyamaToyama Prefecture

Nissan Chemical Industries, Ltd. Annual Report 201622

Business Overview

Advanced Materials & Planning
Tackling challenges in new fields with an “undaunted spirit”
Our mission is to create new materials and businesses that will be our pillars for future growth of Performance Materials and Life Sciences businessdomains. We work on developing new materials that meet market needs by making full use of our core technologies, fine organic synthesis,
functional polymer design, ultra-fine particle control and biological evaluation. We also promote the collaboration between industry, government,
and academia, such as alliances with distinguished companies and joint research with universities, to create actual demand early.

Main ProductsLife Science Materials
Cell culture material
We offer the FCeM® series and SphereMax® as base materials for three-dimensional cell cultures. Usedto culture cells in a three-dimensional state, these products can adjust cells efficiently while mimicking
the in vivo environment.
The FCeM® series contains FP001, an additive for culture media whose main ingredient is gellan gum. It
can disperse and suspend spheres (clumps of cells) while exhibiting the same level of viscosity as that ofwater. It has been adapted for the evaluation of anticancer drugs because it is capable of culturing large
amounts of iPS / ES cells as well as cancer cells.
SphereMax® contains LA717 natural polymer, which is also used for food and pharmaceutical
additives. Just like the FCeM® series, it allows for the low adhesion culture of cancer cells.
Evenly dispersed spheres sink to the bottom, making it easy to collect the cultured cells. This
makes the SphereMax® useful for sphere formation assay and 3D imaging analysis.

Spray

Progress in the Development of HYPERTECH®, a Functional Coating

We are working on the market development of HYPERTECH®, a functional coating that contains our
proprietary multi-branched organic nanoparticles (hyperbranched polymers).
We have proceeded with the development of HYPERTECH® as follows:i. Antifouling hard coating material for films that offers superior abrasion resistanceii. Coating materials with ultra-high refractive index and low refractive index that can be applied in optics
areaiii. Printable electroless plating nucleating agents
And we have developed number of customers who use HYPERTECH® for smartphones, high-resolution TVs
and other devices.
In response, we transferred this business to the Performance Materials Division, which shares our main
customers, in April 2016 to further stimulate actual demand.

Application examples of HYPERTECH®

Ｔ Ｏ ＰＩＣ Ｓ

Development of prevelex™, a Material for Preventing the Adhesion of Biomolecules
FCeM® Series

NANOFIBERGEL®
This gelator comprises palmitic acid and dipeptide, and is friendly to people and theenvironment. It changes from a gel (solid) to sol (liquid) in response to stress. It can beprepared in different forms, such as a spray, cream, and stick. We offer this product as anagent for cosmetics, quasi-drugs, and pharmaceuticals.

Ｔ Ｏ ＰＩＣ Ｓ

CreamSticksSince 2011, we have been working to create novel life science materials by combining our core technologies for biological evaluation and functional polymer design.
Through these efforts we have succeeded in developing a material for preventing the adhesion of biomolecules that can be applied in various fields, fromexperiments and research to regenerative medicine. This material has
Experiment on preventing platelet adhesion
the following features, and is currently being evaluated by customers.
i. Ultra-thin film material with nanometer-level thickness, allowing forthe easy coating of objects of various shapes
ii. Can be coated without primer to PP, COP, PDMS and other basematerials that is difficult to coatiii. Ensures a high level of safety and prevents the adhesion of
biomolecules such as DNA as well as cell adhesion and protein(When prevelex™ is not used)(When prevelex™ is used) Significant reduction of platelet adhesion
adsorption

Environmental Harmony Materials
ECOPROMOTE® crystal nucleating agent for polylactate
It forms a stable crystal nucleus during the polylactate molding process to increase the speed of crystallization significantly. It produces fine, even crystals, helping to
improve the molding cycle and enhance the heat resistance and transparency of molded products.

Optical Materials
SUNCONNECT®
Liquid organic-inorganic hybrid resin materials that exhibit high thermal stability and transparency.
Suitable for imprinting methods, photo lithography, and other processes.
It can be applied to optical devices such as optical lens (camera module, heat-resistant and near-infrared transparent) and optical waveguide (optical interconnect).

Ｔ Ｏ ＰＩＣ Ｓ
Negative electrode (AI)Development of an Organic Thin-film Solar Cell Material

We are developing the hole collection layer of organic thin-film solar cells. The hole collection layer collects
holes from excitons generated in the active layer, and then transports them to the cathode. At the sametime, it blocks the inflow of electrons. It plays an important role in improving the power generation efficiency.
We will accelerate market development by taking advantage of the following features of our material.
i. Capable of forming highly flat thin films since it is a homogeneous solution
ii. Allows for preparation at the HOMO leveliii. Can be compatible with various printing methods

Electron collection layer
Active layer(power generation layer)
Hole collection layer
Positive electrode (ITO)

Light(Configuration example of organic thin-film solar cell)

23

Nissan Chemical Industries, Ltd. Annual Report 2016

Nissan Chemical Industries, Ltd. Annual Report 201624

Business Overview

Advanced Materials & Planning
Tackling challenges in new fields with an “undaunted spirit”
Our mission is to create new materials and businesses that will be our pillars for future growth of Performance Materials and Life Sciences businessdomains. We work on developing new materials that meet market needs by making full use of our core technologies, fine organic synthesis,
functional polymer design, ultra-fine particle control and biological evaluation. We also promote the collaboration between industry, government,
and academia, such as alliances with distinguished companies and joint research with universities, to create actual demand early.

Main ProductsLife Science Materials
Cell culture material
We offer the FCeM® series and SphereMax® as base materials for three-dimensional cell cultures. Usedto culture cells in a three-dimensional state, these products can adjust cells efficiently while mimicking
the in vivo environment.
The FCeM® series contains FP001, an additive for culture media whose main ingredient is gellan gum. It
can disperse and suspend spheres (clumps of cells) while exhibiting the same level of viscosity as that ofwater. It has been adapted for the evaluation of anticancer drugs because it is capable of culturing large
amounts of iPS / ES cells as well as cancer cells.
SphereMax® contains LA717 natural polymer, which is also used for food and pharmaceutical
additives. Just like the FCeM® series, it allows for the low adhesion culture of cancer cells.
Evenly dispersed spheres sink to the bottom, making it easy to collect the cultured cells. This
makes the SphereMax® useful for sphere formation assay and 3D imaging analysis.

Spray

Progress in the Development of HYPERTECH®, a Functional Coating

We are working on the market development of HYPERTECH®, a functional coating that contains our
proprietary multi-branched organic nanoparticles (hyperbranched polymers).
We have proceeded with the development of HYPERTECH® as follows:i. Antifouling hard coating material for films that offers superior abrasion resistanceii. Coating materials with ultra-high refractive index and low refractive index that can be applied in optics
areaiii. Printable electroless plating nucleating agents
And we have developed number of customers who use HYPERTECH® for smartphones, high-resolution TVs
and other devices.
In response, we transferred this business to the Performance Materials Division, which shares our main
customers, in April 2016 to further stimulate actual demand.

Application examples of HYPERTECH®

Ｔ Ｏ ＰＩＣ Ｓ

Development of prevelex™, a Material for Preventing the Adhesion of Biomolecules
FCeM® Series

NANOFIBERGEL®
This gelator comprises palmitic acid and dipeptide, and is friendly to people and theenvironment. It changes from a gel (solid) to sol (liquid) in response to stress. It can beprepared in different forms, such as a spray, cream, and stick. We offer this product as anagent for cosmetics, quasi-drugs, and pharmaceuticals.

Ｔ Ｏ ＰＩＣ Ｓ

CreamSticksSince 2011, we have been working to create novel life science materials by combining our core technologies for biological evaluation and functional polymer design.
Through these efforts we have succeeded in developing a material for preventing the adhesion of biomolecules that can be applied in various fields, fromexperiments and research to regenerative medicine. This material has
Experiment on preventing platelet adhesion
the following features, and is currently being evaluated by customers.
i. Ultra-thin film material with nanometer-level thickness, allowing forthe easy coating of objects of various shapes
ii. Can be coated without primer to PP, COP, PDMS and other basematerials that is difficult to coatiii. Ensures a high level of safety and prevents the adhesion of
biomolecules such as DNA as well as cell adhesion and protein(When prevelex™ is not used)(When prevelex™ is used) Significant reduction of platelet adhesion
adsorption

Environmental Harmony Materials
ECOPROMOTE® crystal nucleating agent for polylactate
It forms a stable crystal nucleus during the polylactate molding process to increase the speed of crystallization significantly. It produces fine, even crystals, helping to
improve the molding cycle and enhance the heat resistance and transparency of molded products.

Optical Materials
SUNCONNECT®
Liquid organic-inorganic hybrid resin materials that exhibit high thermal stability and transparency.
Suitable for imprinting methods, photo lithography, and other processes.
It can be applied to optical devices such as optical lens (camera module, heat-resistant and near-infrared transparent) and optical waveguide (optical interconnect).

Ｔ Ｏ ＰＩＣ Ｓ
Negative electrode (AI)Development of an Organic Thin-film Solar Cell Material

We are developing the hole collection layer of organic thin-film solar cells. The hole collection layer collects
holes from excitons generated in the active layer, and then transports them to the cathode. At the sametime, it blocks the inflow of electrons. It plays an important role in improving the power generation efficiency.
We will accelerate market development by taking advantage of the following features of our material.
i. Capable of forming highly flat thin films since it is a homogeneous solution
ii. Allows for preparation at the HOMO leveliii. Can be compatible with various printing methods

Electron collection layer
Active layer(power generation layer)
Hole collection layer
Positive electrode (ITO)

Light(Configuration example of organic thin-film solar cell)

23

Nissan Chemical Industries, Ltd. Annual Report 2016

Nissan Chemical Industries, Ltd. Annual Report 201624

Business Overview

Research and Development
We strive to further refine the core technology we have cultivated throughout our long history, and develop new products,
technologies, and businesses.
Ｔ Ｏ ＰＩＣ Ｓ

Chemical Research Laboratories

Promotion of Industry-government-academia Collaborations

Chemical Research Laboratories is Nissan Chemical's core R&D site, and is responsible for our corporate
research. It researches and develops agricultural chemicals and pharmaceuticals that utilize the fine organic
synthesis technology we have cultivated over the years, research on company-wide processes, and material
analysis research.

Major research contents
・Discovery of agrochemicals and pharmaceuticals, and the development of agrochemical formulations and active
pharmaceutical ingredients

Funabashi, Chiba

・Development of new organic materials and polymer materials
・Process development of new products and candidates・Material analysis and computational science that support research

While we deepen our proprietary technologies, we also promote the creation of new materials and introduction of new technologies
through industry-government-academia collaborations. As part of these activities, we participate in a project of the Japan Agency for
Medical Research and Development (AMED), which was founded in April 2015, and are working on the development of a cellmanufacturing and processing system for the industrialization of regenerative medicine. We are conducting joint development with
Kyoto University, and have discovered a technology that leads to the low-cost manufacturing of iPS cells. We will continue
contributing to the development of regenerative medicine while also proceeding with state-of-the-art research.
In the area of collaboration between industry and academia, we have been involved in research through comprehensive collaboration
with Kyushu University since April 2006. This collaboration aims to create new materials through functionalization and application
research, which is conducted by combining the seeds (materials) owned by us with advanced technologies owned by the university.
In addition to the previously described efforts, we engage in R&D activities around the world. We collaborate with overseas
universities and participate in an international consortium.

Collaboration with Kyushu University

Materials Research Laboratories
Materials Research Laboratories create highly unique new materials, allowing us to respond quickly to increasingly sophisticated and diverse market needs.
At the same time, the laboratories focus their efforts on researching next-generation materials in an effort to create new markets.

Major research contents
・Material development based on technologies for the design, synthesis, and evaluation of functional polymers and composite materials
・Development of new materials intended for new display technologies and semiconductor process technologies
・Manufacturing research and the application development of materials such as inorganic particulates

Funabashi, Chiba

Sodegaura, Chiba

Ｔ Ｏ ＰＩＣ Ｓ

Utilization of Intellectual Properties
Received the Minister of Economy, Trade and Industry Award at the fiscal 2016
Intellectual Property Achievement Awards.

We were selected for one of the fiscal 2016 Intellectual Property Achievement Awards＊ under the Minister of
Economy, Trade and Industry Award (Enterprises Excelling in Patent Utilization).
Technological innovations are growing increasingly sophisticated and diverse, and the protection of intellectual
property rights is being strengthened globally. We recognize that it is important to quickly acquire the rights tothe outcomes of R&D, apply them appropriately on a timely basis, carry out preliminary surveys, and confirm
that we have not infringed upon the rights of others.
We will continue striving to integrate our business strategies, R&D strategies, and intellectual property
strategies, aiming to create competitive new technologies and products and venture into new business domains.

Toyama, Toyama

Biological Research Laboratories
Biological Research Laboratories serve as a place for life science research, such as evaluation research related to the usefulness and safety of agriculturalchemicals, pharmaceutical products, and medical materials.

Ｔ Ｏ ＰＩＣ Ｓ
R&D Expenses
We consider R&D is the source of growth, and haveintensively invested our management resources in
R&D. The percentage of our expenses in
Performance Materials and Life Sciences(agricultural chemicals and pharmaceuticals) is
high, accounting for more than 85% of the total.

Major research contents
・Efficacy tests, safety tests, and residue tests of agrochemicals in greenhouses and on farmland・Pharmacological tests, safety tests and pharmacokinetics tests of pharmaceuticals, ranging from those on the gene levelto those based on pathological models
・Development of medical materials such as cell culture media, stem cell amplifiers, and coating materials for medical
equipment
Shiraoka, Saitama

2015

5

74

2014

5

67

2013

4

63

Nissan Chemical Industries, Ltd. Annual Report 2016

39

24

35

27

35

16
16

29

158

150

11 142■ Chemicals

2012

2011
(FY) 025

Awarding ceremony

4

65

30

26

12 137■ Performance Materials

8

62

28

25

13

■ Pharmaceuticals

50

100

■ Agricultural Chemicals

136■ Others
150(100 million yen)

Nissan Chemical Industries, Ltd. Annual Report 201626

Business Overview

Research and Development
We strive to further refine the core technology we have cultivated throughout our long history, and develop new products,
technologies, and businesses.
Ｔ Ｏ ＰＩＣ Ｓ

Chemical Research Laboratories

Promotion of Industry-government-academia Collaborations

Chemical Research Laboratories is Nissan Chemical's core R&D site, and is responsible for our corporate
research. It researches and develops agricultural chemicals and pharmaceuticals that utilize the fine organic
synthesis technology we have cultivated over the years, research on company-wide processes, and material
analysis research.

Major research contents
・Discovery of agrochemicals and pharmaceuticals, and the development of agrochemical formulations and active
pharmaceutical ingredients

Funabashi, Chiba

・Development of new organic materials and polymer materials
・Process development of new products and candidates・Material analysis and computational science that support research

While we deepen our proprietary technologies, we also promote the creation of new materials and introduction of new technologies
through industry-government-academia collaborations. As part of these activities, we participate in a project of the Japan Agency for
Medical Research and Development (AMED), which was founded in April 2015, and are working on the development of a cellmanufacturing and processing system for the industrialization of regenerative medicine. We are conducting joint development with
Kyoto University, and have discovered a technology that leads to the low-cost manufacturing of iPS cells. We will continue
contributing to the development of regenerative medicine while also proceeding with state-of-the-art research.
In the area of collaboration between industry and academia, we have been involved in research through comprehensive collaboration
with Kyushu University since April 2006. This collaboration aims to create new materials through functionalization and application
research, which is conducted by combining the seeds (materials) owned by us with advanced technologies owned by the university.
In addition to the previously described efforts, we engage in R&D activities around the world. We collaborate with overseas
universities and participate in an international consortium.

Collaboration with Kyushu University

Materials Research Laboratories
Materials Research Laboratories create highly unique new materials, allowing us to respond quickly to increasingly sophisticated and diverse market needs.
At the same time, the laboratories focus their efforts on researching next-generation materials in an effort to create new markets.

Major research contents
・Material development based on technologies for the design, synthesis, and evaluation of functional polymers and composite materials
・Development of new materials intended for new display technologies and semiconductor process technologies
・Manufacturing research and the application development of materials such as inorganic particulates

Funabashi, Chiba

Sodegaura, Chiba

Ｔ Ｏ ＰＩＣ Ｓ

Utilization of Intellectual Properties
Received the Minister of Economy, Trade and Industry Award at the fiscal 2016
Intellectual Property Achievement Awards.

We were selected for one of the fiscal 2016 Intellectual Property Achievement Awards＊ under the Minister of
Economy, Trade and Industry Award (Enterprises Excelling in Patent Utilization).
Technological innovations are growing increasingly sophisticated and diverse, and the protection of intellectual
property rights is being strengthened globally. We recognize that it is important to quickly acquire the rights tothe outcomes of R&D, apply them appropriately on a timely basis, carry out preliminary surveys, and confirm
that we have not infringed upon the rights of others.
We will continue striving to integrate our business strategies, R&D strategies, and intellectual property
strategies, aiming to create competitive new technologies and products and venture into new business domains.

Toyama, Toyama

Biological Research Laboratories
Biological Research Laboratories serve as a place for life science research, such as evaluation research related to the usefulness and safety of agriculturalchemicals, pharmaceutical products, and medical materials.

Ｔ Ｏ ＰＩＣ Ｓ
R&D Expenses
We consider R&D is the source of growth, and haveintensively invested our management resources in
R&D. The percentage of our expenses in
Performance Materials and Life Sciences(agricultural chemicals and pharmaceuticals) is
high, accounting for more than 85% of the total.

Major research contents
・Efficacy tests, safety tests, and residue tests of agrochemicals in greenhouses and on farmland・Pharmacological tests, safety tests and pharmacokinetics tests of pharmaceuticals, ranging from those on the gene levelto those based on pathological models
・Development of medical materials such as cell culture media, stem cell amplifiers, and coating materials for medical
equipment
Shiraoka, Saitama

2015

5

74

2014

5

67

2013

4

63

Nissan Chemical Industries, Ltd. Annual Report 2016

39

24

35

27

35

16
16

29

158

150

11 142■ Chemicals

2012

2011
(FY) 025

Awarding ceremony

4

65

30

26

12 137■ Performance Materials

8

62

28

25

13

■ Pharmaceuticals

50

100

■ Agricultural Chemicals

136■ Others
150(100 million yen)

Nissan Chemical Industries, Ltd. Annual Report 2016

26

CSR Management

Promotion of CSR

Corporate GovernanceOur business activities are based on our corporate philosophy, which states that we contribute to society in harmony with the environment, based

We think of corporate governance as a mechanism that ensures sound, efficient management to provide stakeholders with sustainable, long-term profits.

on our excellent technologies, products and services. Based on our recognition that CSR activities are meant for putting the corporate philosophy

Based on this idea, we strive to ensure management decisions are made promptly, and work to clarify the management responsibility and responsibility for

into practice, we reviewed our group’s code of conduct and revised our basic CSR policies in April 2016. We have also set up a CSR Promotion

executing operations. At the same time, we take initiatives for strengthening the management’s monitoring function, compliance system, risk management

Council, with the Corporate Planning Department serving as the secretariat. This council formulates action plans and checks activities on a regularsystem, and internal control system under our board meeting and board of corporate auditors, whose members include highly independent outside officers.

basis. It reports the results of its activities to top management twice a year.

Our Corporate Governance System

CSR Promotion System

Execution and supervision of operations
We clarify the management’s function for prompt decision-making and supervision and thefunction for executing operations, thereby strengthening both of functions. We also strive toimprove management’s capabilities for developing and implementing management strategies.

CSR Promotion Council

Board Meeting

Corporate Planning Department

Environment, Safety &Quality Assurance Department

Our board consists of nine members (including two outside directors), and meetsonce a month, in principle, to resolve important management matters. It alsosupervises the execution of operations by directors and executive officers.

Personnel Department

Our Commitment to and Communication with Stakeholders
Customers

Customers

Shareholders/
Investors

We provide safe, secureand excellent products
and services.

We enhance corporate
value and provide theappropriate profit
returns.

We create a workplace whereindividuals are respected andable to fully demonstrate
their abilities.

Shareholders/ Investors

Communities/
Society

We actively engage in social
contribution activities andregional interaction.

Our
Group

Employees

We identify customer needs through sales activities, and work to improve our products
and services.
At the general shareholders meeting, the president, who acts as the chairperson, gave
explanations about a business report and business plan. We also hold an IR briefing
meeting for institutional investors, analysts and the media every half year to explain theoverall conditions of our business.

Employees
Every year, the president visits offices, plants, and laboratories in Japan and overseas todeepen mutual understanding with employees.

Business
Partners

We establish good andconstructive relationships
through fair and equitablebusiness.

Business Partners
We promote supply chain management and check our partners’ CSR initiatives asnecessary.

Communities/ Society
We interact with local communities through measures such as plant tours and visits tolocal elementary schools to give special classes.

Internal Audit

General Shareholders’ Meeting
ReportAccounting
auditor

Board
Meeting

Audit

Board ofCorporate Auditors

Audit(Business execution
framework)

We have the Internal Audit Department, and conducts fair and independent internal
audits in accordance with the Internal Auditing Regulations. Business activities arechecked by the Accounting & Finance, Legal, Intellectual Property, andEnvironment, Safety & Quality Assurance Departments, with each applying its
respective expertise.

President andCEO

ReportManagement
Meeting

Committees

Cooperate

Compliance Committee
Responsible Care Committee

Audit by Corporate Auditors
Our board of corporate auditors consists of four auditors (including three outside
corporate auditors). Corporate auditors audit the execution of operations bydirectors by participating in the board meetings and other important meetings inaccordance with auditing plans formulated by the board of auditors. They also
ensure the appropriate level of cooperation with stakeholders.

Accounting Audit
We have appointed the Yaesu Audit Company as our accounting auditor. They audit
the company and our domestic subsidiaries at the end of each fiscal year, andduring the fiscal year when necessary.

Support for outside directors and corporate auditors
The Corporate Planning Department supports outside directors by giving them priorexplanations of the contents of the agenda and other matters to be discussed at the board
meeting, enabling them to give effective advice on management policies and management
improvement measures and supervise the management. For outside corporate auditors, wehave appointed audit assistants in response to requests from them. Audit assistants are
employees who help outside corporate auditors fulfill their duties efficiently and smoothly.
They serve as coordinators for holding internal audits, board meetings, and other meetings,
help outside corporate auditors conduct audits, and collect and provide information to them.

Internal Audit
Department

Quality Assurance Committee
GCP＊ Committee
Security Trade Control Committee

Each divisions &departments

Audit＊GCP : Standard for clinical trials of pharmaceutical products

Number of Major Meetings and Attendances (FY2015)
Board Meeting

27

Nissan Chemical Industries, Ltd. Annual Report 2016

13 times

Attendance of outside directors at board meetings

95.8%

Attendance of outside corporate auditors at board meetings

97.4%

Board of Corporate Auditors’ Meeting

12 times

Attendance of outside corporate auditors at board of auditors’ meetings

100%

Nissan Chemical Industries, Ltd. Annual Report 201628

CSR Management

Promotion of CSR

Corporate GovernanceOur business activities are based on our corporate philosophy, which states that we contribute to society in harmony with the environment, based

We think of corporate governance as a mechanism that ensures sound, efficient management to provide stakeholders with sustainable, long-term profits.

on our excellent technologies, products and services. Based on our recognition that CSR activities are meant for putting the corporate philosophy

Based on this idea, we strive to ensure management decisions are made promptly, and work to clarify the management responsibility and responsibility for

into practice, we reviewed our group’s code of conduct and revised our basic CSR policies in April 2016. We have also set up a CSR Promotion

executing operations. At the same time, we take initiatives for strengthening the management’s monitoring function, compliance system, risk management

Council, with the Corporate Planning Department serving as the secretariat. This council formulates action plans and checks activities on a regularsystem, and internal control system under our board meeting and board of corporate auditors, whose members include highly independent outside officers.

basis. It reports the results of its activities to top management twice a year.

Our Corporate Governance System

CSR Promotion System

Execution and supervision of operations
We clarify the management’s function for prompt decision-making and supervision and thefunction for executing operations, thereby strengthening both of functions. We also strive toimprove management’s capabilities for developing and implementing management strategies.

CSR Promotion Council

Board Meeting

Corporate Planning Department

Environment, Safety &Quality Assurance Department

Our board consists of nine members (including two outside directors), and meetsonce a month, in principle, to resolve important management matters. It alsosupervises the execution of operations by directors and executive officers.

Personnel Department

Our Commitment to and Communication with Stakeholders
Customers

Customers

Shareholders/
Investors

We provide safe, secureand excellent products
and services.

We enhance corporate
value and provide theappropriate profit
returns.

We create a workplace whereindividuals are respected andable to fully demonstrate
their abilities.

Shareholders/ Investors

Communities/
Society

We actively engage in social
contribution activities andregional interaction.

Our
Group

Employees

We identify customer needs through sales activities, and work to improve our products
and services.
At the general shareholders meeting, the president, who acts as the chairperson, gave
explanations about a business report and business plan. We also hold an IR briefing
meeting for institutional investors, analysts and the media every half year to explain theoverall conditions of our business.

Employees
Every year, the president visits offices, plants, and laboratories in Japan and overseas todeepen mutual understanding with employees.

Business
Partners

We establish good andconstructive relationships
through fair and equitablebusiness.

Business Partners
We promote supply chain management and check our partners’ CSR initiatives asnecessary.

Communities/ Society
We interact with local communities through measures such as plant tours and visits tolocal elementary schools to give special classes.

Internal Audit

General Shareholders’ Meeting
ReportAccounting
auditor

Board
Meeting

Audit

Board ofCorporate Auditors

Audit(Business execution
framework)

We have the Internal Audit Department, and conducts fair and independent internal
audits in accordance with the Internal Auditing Regulations. Business activities arechecked by the Accounting & Finance, Legal, Intellectual Property, andEnvironment, Safety & Quality Assurance Departments, with each applying its
respective expertise.

President andCEO

ReportManagement
Meeting

Committees

Cooperate

Compliance Committee
Responsible Care Committee

Audit by Corporate Auditors
Our board of corporate auditors consists of four auditors (including three outside
corporate auditors). Corporate auditors audit the execution of operations bydirectors by participating in the board meetings and other important meetings inaccordance with auditing plans formulated by the board of auditors. They also
ensure the appropriate level of cooperation with stakeholders.

Accounting Audit
We have appointed the Yaesu Audit Company as our accounting auditor. They audit
the company and our domestic subsidiaries at the end of each fiscal year, andduring the fiscal year when necessary.

Support for outside directors and corporate auditors
The Corporate Planning Department supports outside directors by giving them priorexplanations of the contents of the agenda and other matters to be discussed at the board
meeting, enabling them to give effective advice on management policies and management
improvement measures and supervise the management. For outside corporate auditors, wehave appointed audit assistants in response to requests from them. Audit assistants are
employees who help outside corporate auditors fulfill their duties efficiently and smoothly.
They serve as coordinators for holding internal audits, board meetings, and other meetings,
help outside corporate auditors conduct audits, and collect and provide information to them.

Internal Audit
Department

Quality Assurance Committee
GCP＊ Committee
Security Trade Control Committee

Each divisions &departments

Audit＊GCP : Standard for clinical trials of pharmaceutical products

Number of Major Meetings and Attendances (FY2015)
Board Meeting

27

Nissan Chemical Industries, Ltd. Annual Report 2016

13 times

Attendance of outside directors at board meetings

95.8%

Attendance of outside corporate auditors at board meetings

97.4%

Board of Corporate Auditors’ Meeting

12 times

Attendance of outside corporate auditors at board of auditors’ meetings

100%

Nissan Chemical Industries, Ltd. Annual Report 201628

CSR Management

Compliance

Risk Management

We place emphasis on compliance in our management, reflecting our belief that compliance with laws and regulations and social norms is essential

We have established risk management guidelines with basic rules on risk management to prevent the emergence of various risks to the Group, andfor the survival and development of any company. To this end, we actively promote compliance throughout the entire group, and have set up aminimize the damage and impact of these risks should they arise.

Compliance Committee as the organization for maintaining and improving compliance. It is chaired by the president and consists of members that
include external specialists.

1. Ensuring the safety of human resources

4. Maintaining trust of stakeholders

Compliance Promotion Framework

2. Surviving as a company

5. Optimizing business opportunities and opportunities to make achievements and avoiding the loss of these opportunities

3. Sound maintenance of assets

6. Ensuring compliance and pursuing efficiency, accuracy and effectiveness in the execution of operations

Compliance Committee

Chairman : President
Vice-chairman : Vice President
Secretariat : Legal OfficeOutside Lawyer

Corporate Auditor

Risk Management Framework
Board Meeting

Head of Environment, Safety &Quality Assurance Department

Head of Corporate
Planning Department

Risk Management
MeetingHead of Legal Office

The Compliance Committee creates manuals, revises guidelines, and train employees. It also receives reports from each division / department chief,CROplant / laboratory chief, related committees, and presidents of subsidiaries. In addition, it periodically audits the state of compliance and provides
recommendations for improvements when necessary.

Risk Management Office

The committee also specifies matters to be observed by Group’s employees, and encourages them to carry out daily activities more faithfully thanever so that we are highly esteemed by society as a good corporate citizen.

Division /Department Heads

Risk Managers

Compliance Committee
Responsible Care Committee
Quality Assurance Committee
GCP Committee
Security Trade Control Committee
ReportAs a Corporate Citizen

As a Public Company

As Members of the Workplace

Compliance with business laws
Restrictions on acts of endowment and political donations
Breaking off relations with antisocial forces
Compliance with the Antimonopoly Act
Ensuring fair transactions with suppliers and compliancewith the Subcontract Act
Prevention of unfair competition
Compliance with laws and regulations related tosecurity export control
Compliance with laws and regulations related toimport and export
Prohibition of excessive entertainment and gift-giving
Prohibition of bribery of foreign public officials
Ensuring appropriate advertisement

Disclosure of management information
Appropriate accounting

Compliance with the rules of employment
Respect for human rights and the prohibition of discrimination
Prohibition of sexual harassment
Protection of privacy
Ensuring workplace health and safety
Prohibition of political and religious activities

As a Manufacturer
Ensuring product safety
Conserving environment
Taking measures for process safety and disaster prevention

As Stakeholders of the Company

As Handlers of Business Information
Appropriate management of trade secrets
Appropriate use of information systems
Appropriate management of personal information
Protection of intellectual properties

Prohibition of conflict of interest
Appropriate use of the company’s assets
Prohibition of insider trading

Divisions /Departments

Plants /Laboratories

Group Companies

We appoint risk managers to divisions, departments, plants, laboratories and group companies under the overall control of the Chief Risk
Management Officer (CRO) appointed by the Board meeting, with the Corporate Planning Department serving as the Risk Management Office.
At the Risk Management Meeting, which consists of the CRO, risk managers and the Risk Management Office, we identify and assess risks inindividual organizations through cooperation with specialized committees such as the Compliance Committee. Based on the results of theidentification and assessment, we examine the status of the implementation of countermeasures, strengthen systems for handling crises andemergencies and formulate a business continuity plan (BCP). In addition, we share the risk management information of the entire group through theannual plan, the annual review of risk management activities and reports from all organizations.

Consultation Hotline
We have a system that permits direct whistleblowing to the Compliancethey think it is difficult to address the problem promptly and effectively, they can

Committee.

use the hotline to prevent compliance violations or resolve the problem early on.

When an employee discovers a compliance violation or potential compliance

Whistleblowers can remain anonymous and if they state their name, we makeviolation, they shall address the problem in normal operations, in principle,

sure that they are not disadvantaged by the use of the hotline.

Before outsourcing an operation such as the manufacture of important raw materials, intermediates and products, we ask the potential contractor toanswer a questionnaire on CSR. We give priority to companies which fulfill our standards when selecting business partners. We also conduct

through measures that include reporting the matter to their superior. However, if

Consultation Hotline Reports (Number)

Supply Chain Management

FY2011FY2012FY2013

FY2014FY2015

0

0

2

1

1

on-site audits of suppliers in Japan and overseas to check their initiatives for CSR activities in detail, with a particular focus on their activities related
to the environment, health and safety (EHS) in our efforts to promote supply chain management. In addition, we have made it our policy not to use
conflict minerals and raw materials containing such minerals related to inhumane armed groups in the Democratic Republic of the Congo andsurrounding countries, both internally and in our supply chain.

29

Nissan Chemical Industries, Ltd. Annual Report 2016

Nissan Chemical Industries, Ltd. Annual Report 201630

CSR Management

Compliance

Risk Management

We place emphasis on compliance in our management, reflecting our belief that compliance with laws and regulations and social norms is essential

We have established risk management guidelines with basic rules on risk management to prevent the emergence of various risks to the Group, andfor the survival and development of any company. To this end, we actively promote compliance throughout the entire group, and have set up aminimize the damage and impact of these risks should they arise.

Compliance Committee as the organization for maintaining and improving compliance. It is chaired by the president and consists of members that
include external specialists.

1. Ensuring the safety of human resources

4. Maintaining trust of stakeholders

Compliance Promotion Framework

2. Surviving as a company

5. Optimizing business opportunities and opportunities to make achievements and avoiding the loss of these opportunities

3. Sound maintenance of assets

6. Ensuring compliance and pursuing efficiency, accuracy and effectiveness in the execution of operations

Compliance Committee

Chairman : President
Vice-chairman : Vice President
Secretariat : Legal OfficeOutside Lawyer

Corporate Auditor

Risk Management Framework
Board Meeting

Head of Environment, Safety &Quality Assurance Department

Head of Corporate
Planning Department

Risk Management
MeetingHead of Legal Office

The Compliance Committee creates manuals, revises guidelines, and train employees. It also receives reports from each division / department chief,CROplant / laboratory chief, related committees, and presidents of subsidiaries. In addition, it periodically audits the state of compliance and provides
recommendations for improvements when necessary.

Risk Management Office

The committee also specifies matters to be observed by Group’s employees, and encourages them to carry out daily activities more faithfully thanever so that we are highly esteemed by society as a good corporate citizen.

Division /Department Heads

Risk Managers

Compliance Committee
Responsible Care Committee
Quality Assurance Committee
GCP Committee
Security Trade Control Committee
ReportAs a Corporate Citizen

As a Public Company

As Members of the Workplace

Compliance with business laws
Restrictions on acts of endowment and political donations
Breaking off relations with antisocial forces
Compliance with the Antimonopoly Act
Ensuring fair transactions with suppliers and compliancewith the Subcontract Act
Prevention of unfair competition
Compliance with laws and regulations related tosecurity export control
Compliance with laws and regulations related toimport and export
Prohibition of excessive entertainment and gift-giving
Prohibition of bribery of foreign public officials
Ensuring appropriate advertisement

Disclosure of management information
Appropriate accounting

Compliance with the rules of employment
Respect for human rights and the prohibition of discrimination
Prohibition of sexual harassment
Protection of privacy
Ensuring workplace health and safety
Prohibition of political and religious activities

As a Manufacturer
Ensuring product safety
Conserving environment
Taking measures for process safety and disaster prevention

As Stakeholders of the Company

As Handlers of Business Information
Appropriate management of trade secrets
Appropriate use of information systems
Appropriate management of personal information
Protection of intellectual properties

Prohibition of conflict of interest
Appropriate use of the company’s assets
Prohibition of insider trading

Divisions /Departments

Plants /Laboratories

Group Companies

We appoint risk managers to divisions, departments, plants, laboratories and group companies under the overall control of the Chief Risk
Management Officer (CRO) appointed by the Board meeting, with the Corporate Planning Department serving as the Risk Management Office.
At the Risk Management Meeting, which consists of the CRO, risk managers and the Risk Management Office, we identify and assess risks inindividual organizations through cooperation with specialized committees such as the Compliance Committee. Based on the results of theidentification and assessment, we examine the status of the implementation of countermeasures, strengthen systems for handling crises andemergencies and formulate a business continuity plan (BCP). In addition, we share the risk management information of the entire group through theannual plan, the annual review of risk management activities and reports from all organizations.

Consultation Hotline
We have a system that permits direct whistleblowing to the Compliancethey think it is difficult to address the problem promptly and effectively, they can

Committee.

use the hotline to prevent compliance violations or resolve the problem early on.

When an employee discovers a compliance violation or potential compliance

Whistleblowers can remain anonymous and if they state their name, we makeviolation, they shall address the problem in normal operations, in principle,

sure that they are not disadvantaged by the use of the hotline.

Before outsourcing an operation such as the manufacture of important raw materials, intermediates and products, we ask the potential contractor toanswer a questionnaire on CSR. We give priority to companies which fulfill our standards when selecting business partners. We also conduct

through measures that include reporting the matter to their superior. However, if

Consultation Hotline Reports (Number)

Supply Chain Management

FY2011FY2012FY2013

FY2014FY2015

0

0

2

1

1

on-site audits of suppliers in Japan and overseas to check their initiatives for CSR activities in detail, with a particular focus on their activities related
to the environment, health and safety (EHS) in our efforts to promote supply chain management. In addition, we have made it our policy not to use
conflict minerals and raw materials containing such minerals related to inhumane armed groups in the Democratic Republic of the Congo andsurrounding countries, both internally and in our supply chain.

29

Nissan Chemical Industries, Ltd. Annual Report 2016

Nissan Chemical Industries, Ltd. Annual Report 201630

Responsible Care(RC) Activities

Responsible Care Management
Responsible Care (RC) activities aim to secure environment, health and safety (EHS) performance on a voluntary basis throughout the entire
process, from the development of chemical substances, manufacture, distribution, use, final consumption and to disposal / recycle. These activities
also serve as a form of communication with society through the announcement of their results. Chemical companies in more than 60 countries andregions are working on RC activities.
The global expansion of RC activities was triggered by the establishment of the International Council of Chemical Associations (ICCA) in 1989. In Japan, theJapan Responsible Care Council (JRCC) was established by the Japan Chemical Industry Association (JCIA) in 1995. We are one of the original members of
JRCC. We have also signed the Responsible Care Global Charter, which was revised in 2014, and we are enhancing our efforts in RC activities.

Responsible Care Basic Policies

Promotion of the RC Mid-Term Plan (FY2016 – 2021)
We have set Responsible Care mid-term plan, a six-year plan that aims to steadily promote activities related to environmental protection and countermeasures toaddress climate change, safety and disaster prevention, occupational safety and health, and chemical and product safety. We will take specific forms of action by
drawing up a plan for each fiscal year based on the RC mid-term plan.
Responsible
Care Code

Mid-term plan (FY2016-2021)

FY2016 plan

Environmental
protection andcountermeasures
to address climatechange・Reducing the energy consumption rate (achieving a 20% reduction from the year 2011
level by 2021)
・Reducing GHG emissions and improving the GHG emission rate
- Reducing the total amount of emissions during the period of the mid-term plan (2016 to2021) by 100,000 tons compared to the period of the previous mid-term plan (2010 to 2015)- Improving the emission rate by 20% from the FY2011 level by FY2021
・Reducing industrial waste
・Establishing a CSR supply chain management (green procurement) system
・Strengthening measures for protecting biodiversity
・Promoting the development and sales of environmentally friendly products

・Energy conservation through the renewal of aging facilities
・Promoting the conversion of waste solvents into forms of fuel・Switching from naphtha to natural gas as the feedstock forammonia(Reducing GHG emissions by 10,000 tons)
・Promoting the reuse and recycling of waste
・Conducting EHS audits of important business partners
・Continuous activities based on biodiversity action guidelines
・Promoting the sale of environmentally friendly products

Safety anddisaster prevention

・Creating a safety culture and improving the safety capabilities
・Improving the effectiveness of the prior assessment systems for manufacturing,
construction work, and improving the effectiveness of research・Optimizing the method for evaluating the safety culture
・Enhancing the risk assessment performed in prior assessment

Occupationalsafety andhealth・Establishing an occupational safety and health management system based on
ISO45001
・Achieving zero accidents that require staff time off from work・Improving occupational safety through equipment improvement
・Publishing an occupational safety newspaper・Strengthening inspections for occupational safety and health in RC audits

Chemicals
and productsafety・Promoting risk-based management throughout the lifecycle of chemical substances
・Contributing to advanced research that examines the impact of chemical substanceson human health and the environment

・Creating internal standards for the risk assessment of chemical
substances and safety measures based on safety data
・Promoting the disclosure of safety summaries of chemical products
・Participating in LRI activities organized by the Japan
Chemical Industry Association

We have set priority matters related to the EHS in all stages of our business activities as our basic policies on RC. We have fully shared these basic
policies with all group companies.
(1) Strive to ensure the continuous improvement of the EHS throughout the entire product lifecycle, from development all the way to the final
disposal.
(2) Manage business activities and prevent them from affecting people and the environment, giving consideration to the EHS when transporting,storage and disposing products.
(3) Strive to develop products and technologies with a smaller environmental impact by considering the EHS aspects from R&D phase.
(4) Promote greater resource conservation and energy conservation to reduce the amount of waste and effectively use of the waste.
(5) Take note of the interest of administrative authorities and public interest concerning the impact of our products and operations on EHS, andstrive to communicate with them to ensure their correct and full understanding by disclosing sufficient information.
(6) Further enhance risk assessment and risk management based on scientific knowledge and strengthen proper management of chemical
substances.
(7) Observe laws and standards and promote voluntary initiatives to further improve the EHS performance.
(8) Fulfill accountability to further meet the expectations of stakeholders in Japan and overseas concerning our activities related to EHS.

Nissan Chemical RC Management System

Field

To achieve our RC mid-term plan (see right-hand page), we have established RC management system based on ISO14001, an international
standard on environmental management system. We carry out target management and continuous improvements based on PDCA. All of ourplants, laboratories, business divisions and group companies set their own mid-term plans and annual targets to achieve the plans. We have set up
the RC Committee as the organization in charge of promoting these activities. It is chaired by the head of Environment, Safety & Quality Assurance
Department, with its members being the officer in charge of Environment, Safety & Quality Assurance Department and heads of the Production
Technology Department, Personnel Department, Purchasing Department, business divisions, plants and laboratories. At the committee’s annual
meeting, the members discuss the results of all activities, and the RC targets for the next fiscal year. The results of the discussions are reported at
the management meeting and subject to management review before the RC targets for the next fiscal year are determined. In addition, all plants
have obtained third-party certificate under ISO14001. Business divisions, laboratories, and group companies confirm the effectiveness of their
management systems through internal RC audits.
Responsible Care Committee(Report, annual plan development)

Board Meeting
President and CEO(RC Chief Executive)
RC Committee(Chairman: Head of Environment, Safety &Quality Assurance Dept.)

Plants31

Laboratories

Nissan Chemical Industries, Ltd. Annual Report 2016

Business
DivisionsManagement
Meeting
Management
Review
Group
Companies

Assessment of the RC Mid-Term Plan (FY2013-2015)

PLAN
4 Codes of RC

ACT
Corrective actions
Report annual results

Environmental Protection/
Safety and Disaster Prevention
Occupational Safety and Health/Chemicals and Product Safety

Implement in accordancewith annual plan
DO

Environmental
protection

Process safety anddisaster prevention

Mid-term plan (FY2013-2015)☆☆

・ Achieve sustained reduction in the emissions of PRTR substances andhazardous substances☆☆

・ Continue to ensure safety and stable operations☆☆☆

Safe, stable operations were maintained・ Eliminate serious accidents at plants related to waste water or exhaust gas☆☆☆

There were no accidents related to waste water or exhaust gas☆☆☆

Safety culture was assessed at all plants

・ Keep the number of environmental accidents down to zero☆☆☆

No environmental accidents occurred・ Assess safety culture to for improve our process safety capability
Occupational safety
and healthAchievement assessment

・ Reduce the amount of energy consumption and improve energy
consumption rate - Ensure 1% reduction from the previous year

・ Achieve zero accidents that require staff time off from work
・ Continuously achieved zero occupational accidents caused by violationof rulesAlthough the amount of consumption increased, the energy
consumption rate declined by 3% over three years
Emissions remained unchanged☆

There were four cases of accidents that require staff time offfrom work☆

There were three cases of occupational accidents caused byviolation of rules

Chemicals andproduct safety

・ Upload GPS/JIPS Safety Summary
・ Respond to chemicals management regulations without delay

☆☆☆
☆☆☆

Started from FY2015
We have established risk assessment methods and internal systems

Compliance・ Make sure to obtain and share information about legal regulations
related to EHS☆☆☆

We obtained the information without delay and made itavailable throughout the company

・ Promote understanding of information about laws and regulations related
to EHS and ensure they are followed☆☆☆

We held an internal on-site seminar on the internal rules
There were no cases of serious accidents

CHECK
Internal audit

Nissan Chemical Industries, Ltd. Annual Report 201632

Responsible Care(RC) Activities

Responsible Care Management
Responsible Care (RC) activities aim to secure environment, health and safety (EHS) performance on a voluntary basis throughout the entire
process, from the development of chemical substances, manufacture, distribution, use, final consumption and to disposal / recycle. These activities
also serve as a form of communication with society through the announcement of their results. Chemical companies in more than 60 countries andregions are working on RC activities.
The global expansion of RC activities was triggered by the establishment of the International Council of Chemical Associations (ICCA) in 1989. In Japan, theJapan Responsible Care Council (JRCC) was established by the Japan Chemical Industry Association (JCIA) in 1995. We are one of the original members of
JRCC. We have also signed the Responsible Care Global Charter, which was revised in 2014, and we are enhancing our efforts in RC activities.

Responsible Care Basic Policies

Promotion of the RC Mid-Term Plan (FY2016 – 2021)
We have set Responsible Care mid-term plan, a six-year plan that aims to steadily promote activities related to environmental protection and countermeasures toaddress climate change, safety and disaster prevention, occupational safety and health, and chemical and product safety. We will take specific forms of action by
drawing up a plan for each fiscal year based on the RC mid-term plan.
Responsible
Care Code

Mid-term plan (FY2016-2021)

FY2016 plan

Environmental
protection andcountermeasures
to address climatechange・Reducing the energy consumption rate (achieving a 20% reduction from the year 2011
level by 2021)
・Reducing GHG emissions and improving the GHG emission rate
- Reducing the total amount of emissions during the period of the mid-term plan (2016 to2021) by 100,000 tons compared to the period of the previous mid-term plan (2010 to 2015)- Improving the emission rate by 20% from the FY2011 level by FY2021
・Reducing industrial waste
・Establishing a CSR supply chain management (green procurement) system
・Strengthening measures for protecting biodiversity
・Promoting the development and sales of environmentally friendly products

・Energy conservation through the renewal of aging facilities
・Promoting the conversion of waste solvents into forms of fuel・Switching from naphtha to natural gas as the feedstock forammonia(Reducing GHG emissions by 10,000 tons)
・Promoting the reuse and recycling of waste
・Conducting EHS audits of important business partners
・Continuous activities based on biodiversity action guidelines
・Promoting the sale of environmentally friendly products

Safety anddisaster prevention

・Creating a safety culture and improving the safety capabilities
・Improving the effectiveness of the prior assessment systems for manufacturing,
construction work, and improving the effectiveness of research・Optimizing the method for evaluating the safety culture
・Enhancing the risk assessment performed in prior assessment

Occupationalsafety andhealth・Establishing an occupational safety and health management system based on
ISO45001
・Achieving zero accidents that require staff time off from work・Improving occupational safety through equipment improvement
・Publishing an occupational safety newspaper・Strengthening inspections for occupational safety and health in RC audits

Chemicals
and productsafety・Promoting risk-based management throughout the lifecycle of chemical substances
・Contributing to advanced research that examines the impact of chemical substanceson human health and the environment

・Creating internal standards for the risk assessment of chemical
substances and safety measures based on safety data
・Promoting the disclosure of safety summaries of chemical products
・Participating in LRI activities organized by the Japan
Chemical Industry Association

We have set priority matters related to the EHS in all stages of our business activities as our basic policies on RC. We have fully shared these basic
policies with all group companies.
(1) Strive to ensure the continuous improvement of the EHS throughout the entire product lifecycle, from development all the way to the final
disposal.
(2) Manage business activities and prevent them from affecting people and the environment, giving consideration to the EHS when transporting,storage and disposing products.
(3) Strive to develop products and technologies with a smaller environmental impact by considering the EHS aspects from R&D phase.
(4) Promote greater resource conservation and energy conservation to reduce the amount of waste and effectively use of the waste.
(5) Take note of the interest of administrative authorities and public interest concerning the impact of our products and operations on EHS, andstrive to communicate with them to ensure their correct and full understanding by disclosing sufficient information.
(6) Further enhance risk assessment and risk management based on scientific knowledge and strengthen proper management of chemical
substances.
(7) Observe laws and standards and promote voluntary initiatives to further improve the EHS performance.
(8) Fulfill accountability to further meet the expectations of stakeholders in Japan and overseas concerning our activities related to EHS.

Nissan Chemical RC Management System

Field

To achieve our RC mid-term plan (see right-hand page), we have established RC management system based on ISO14001, an international
standard on environmental management system. We carry out target management and continuous improvements based on PDCA. All of ourplants, laboratories, business divisions and group companies set their own mid-term plans and annual targets to achieve the plans. We have set up
the RC Committee as the organization in charge of promoting these activities. It is chaired by the head of Environment, Safety & Quality Assurance
Department, with its members being the officer in charge of Environment, Safety & Quality Assurance Department and heads of the Production
Technology Department, Personnel Department, Purchasing Department, business divisions, plants and laboratories. At the committee’s annual
meeting, the members discuss the results of all activities, and the RC targets for the next fiscal year. The results of the discussions are reported at
the management meeting and subject to management review before the RC targets for the next fiscal year are determined. In addition, all plants
have obtained third-party certificate under ISO14001. Business divisions, laboratories, and group companies confirm the effectiveness of their
management systems through internal RC audits.
Responsible Care Committee(Report, annual plan development)

Board Meeting
President and CEO(RC Chief Executive)
RC Committee(Chairman: Head of Environment, Safety &Quality Assurance Dept.)

Plants31

Laboratories

Nissan Chemical Industries, Ltd. Annual Report 2016

Business
DivisionsManagement
Meeting
Management
Review
Group
Companies

Assessment of the RC Mid-Term Plan (FY2013-2015)

PLAN
4 Codes of RC

ACT
Corrective actions
Report annual results

Environmental Protection/
Safety and Disaster Prevention
Occupational Safety and Health/Chemicals and Product Safety

Implement in accordancewith annual plan
DO

Environmental
protection

Process safety anddisaster prevention

Mid-term plan (FY2013-2015)☆☆

・ Achieve sustained reduction in the emissions of PRTR substances andhazardous substances☆☆

・ Continue to ensure safety and stable operations☆☆☆

Safe, stable operations were maintained・ Eliminate serious accidents at plants related to waste water or exhaust gas☆☆☆

There were no accidents related to waste water or exhaust gas☆☆☆

Safety culture was assessed at all plants

・ Keep the number of environmental accidents down to zero☆☆☆

No environmental accidents occurred・ Assess safety culture to for improve our process safety capability
Occupational safety
and healthAchievement assessment

・ Reduce the amount of energy consumption and improve energy
consumption rate - Ensure 1% reduction from the previous year

・ Achieve zero accidents that require staff time off from work
・ Continuously achieved zero occupational accidents caused by violationof rulesAlthough the amount of consumption increased, the energy
consumption rate declined by 3% over three years
Emissions remained unchanged☆

There were four cases of accidents that require staff time offfrom work☆

There were three cases of occupational accidents caused byviolation of rules

Chemicals andproduct safety

・ Upload GPS/JIPS Safety Summary
・ Respond to chemicals management regulations without delay

☆☆☆
☆☆☆

Started from FY2015
We have established risk assessment methods and internal systems

Compliance・ Make sure to obtain and share information about legal regulations
related to EHS☆☆☆

We obtained the information without delay and made itavailable throughout the company

・ Promote understanding of information about laws and regulations related
to EHS and ensure they are followed☆☆☆

We held an internal on-site seminar on the internal rules
There were no cases of serious accidents

CHECK
Internal audit

Nissan Chemical Industries, Ltd. Annual Report 201632

Responsible Care (RC) Activities

Environment, Safety and Climate Change Strategy
Responsible Care Audits

Capital Investment for the Environment and Safety and its Economic Effects

RC audit checks whether the RC activities in offices are carried out appropriately, checks whether the PDCA cycle is
implemented without fail to clarify visible or potential problems related to the EHS and promotes improvements in response
after clarifying the problems if there are any. The audit is conducted by Environment, Safety & Quality Assurance Department
in accordance with the annual audit plan formulated at the beginning of each fiscal year, and in accordance with the RC audit
guidelines. In FY2015, a total of 36 audits were conducted as planned, the details of which are summarized below.

Investment:
We have made active capital investments such as changing the feedstock for
manufacturing ammonia at the Toyama Plant in our efforts to reduce GHG
emissions. We also renovate aging facilities in a well-planned manner toensure safety, disaster prevention and maintain safe operations.

Economic effects:
The measures we took for environmental protection, such as the reduction of
steam at Toyama Plant and conversion of waste organic solvents into fuels at
Onoda Plant, produced the following economic effects in FY2015.

Capex for environment and safety [million yen]

Date

Subject

Date

Subject

Date

Subject

Sodegaura Plant

6/16,12/1

Nissei Corporation

7/22

NCA [U.S.A.]

11/12,11/13

Saitama Plant

7/8,1/19

Nissan Engineering, Ltd. Head Office

5/14

NCE [France]

9/3

Toyama Plant

6/12,12/21,12/22

Nissan Engineering, Ltd. Toyama

5/12

NCK [Korea]

11/26

Nagoya Plant

6/26,2/5

Nihon Hiryo Co., Ltd. Shinmachi Plant

6/23,11/20

NCT [Taiwan]

2/24

Onoda Plant

6/12,1/29

Nihon Hiryo Co., Ltd. Handa Plant

6/5,12/4

Chemical Research Laboratories

7/10,2/10

Nissan Green & Landscape Co., Ltd.

5/19

Materials Research Laboratories Funabashi

8/6,1/22

Environmental Technical Laboratories, Ltd.

5/26

Materials Research Laboratories Toyama

8/4,2/16

Nissan Butsuryu Co., Ltd.

6/9,11/24,

Materials Research Laboratories Sodegaura

7/16,2/18

Biological Research Laboratories

8/21,2/3

1,000

0
(FY)

754
681

685

101

73

104

2011

2012

2013

581
480

Capex for environment

11/25,12/9

581

1,443
952

678

Amount [million yen]

Energy saving

173

Resource saving

49

Reuse and recycling

32

491

2014

2015

Capex for safety and disaster prevention

Energy Consumption and Energy Consumption Rate

The figure below shows the inputs of raw materials, energy and water for production and emissions to the atmosphere, waters, soil and waste.

FY2015 Environmental Load Results
INPUT

Water Resources Input

Energy Input

Raw Materials

40,671,000m3

98,830kl (Crude oil equivalent)
Energy : fuel, purchased electricity and purchased steam
used for business activities (fuel and purchased steam crude oil equivalent)

Water resources : tap water, ground waterand industrial water used for business activities

Production Activities(5 plants)
Emissions to the Atmosphere

Emissions to the waters

OUTPUT

310,000 tons-CO2
CO2
GHG other than CO2
152,000 tons-CO2
NOx
158 tons
SOx
391 tons
Dust
23 tons
PRTR substances
1.66 tons

15,120,000m3
Effluent
COD
279 tons
Total Nitrogen3,064 tons
Total Phosphorus
14 tons
PRTR substances 0.54 tons

Emissions to the AtmosphereCO2 : the amount of CO2 emitted frombusiness activities
GHG other than CO2 : the amount of CH4,
N2O, HFC and SF6
NOx, SOx, Dust: the amount of NOx, SOx andDust included in emissions from each facility

Emissions to the waters
COD, Total Nitrogen, Total
Phosphorus : volume that wascalculated by multiplying effluent to
the public waters by theconcentration of nitrogen,phosphorus and COD.

Nissan Chemical Industries, Ltd. Annual Report 2016

1,672
994

1,500

500

Environmental Load from Production Activities

33

Type of cost reduction

2,000

Emissions to the soil

PRTR substances

N/A

Waste

Total volume
33,418 tons
Recycled volume4,489 tons
External disposal volume 2,152 tons

Waste
Recycled volume : the amount ofwaste recycled
External disposal volume : the final
amount of landfill disposal bycontractor

Production and research:
In accordance with the Act on the Rational Use of Energy, we collect data on the amount ofenergy consumed at all of our business establishments and submit this data to the national
government, along with data on our energy consumption rate. The amount of energy weconsumed in FY2015 increased from the previous fiscal year by approximately a crude oil
equivalent of 7,000 kiloliters. This is attributed to an increase in the production volume of
products that consume a lot of energy. We have a product matrix that covers a wide rangeof products, from commodity chemicals to agrochemicals, pharmaceuticals and functional
products for electronic materials. This makes it difficult to evaluate the energy consumption
rate based on the simple quantity of production, which is why we calculate it based onsales. Our energy consumption rate had been improving over the last several years, but it
increased by 4.6% year on year in FY2015. This is thought to have been the result of
reducing the prices of our main products that we produce at our plants.
Logistics:
As a cargo owner, we work together with Nissan Butsuryu Co., Ltd., a groupcompany which handles our logistics operations, to promote the rational use ofenergy for transportation. In FY2015, our energy consumption rate improved
from the previous fiscal year, while the amount of energy consumption in
crude oil equivalent was almost unchanged from the previous fiscal year. We
will continue striving to improve our energy consumption rate throughmeasures such as promoting modal shifts, replacing vehicles withenergy-saving and practicing eco-driving.

Energy consumption (crude oil equivalent 1,000kl)
and energy consumption index (FY2011 as a base of 100) in production and research
100

100.0

96.4

89.1

86.1

81.5

80
60
40

96.9

96.7

94.8

2011

2012

2013

98.8
91.9

20
0
(FY)

2014

2015

Energy consumption index

Energy consumption

Energy consumption (left axis: crude oil equivalent 1,000kl)
and energy consumption rate (right axis: kl/1 million ton kilo) in logistics
8

35.4

35.9

36.5

36.5

36.3

6

30

4
2
0
(FY)

40

20

5.0

5.0

5.2

2011

2012

2013

Energy consumption

5.2

5.2

2014

2015

10
0

Energy consumption rate

Nissan Chemical Industries, Ltd. Annual Report 201634

Responsible Care (RC) Activities

Environment, Safety and Climate Change Strategy
Responsible Care Audits

Capital Investment for the Environment and Safety and its Economic Effects

RC audit checks whether the RC activities in offices are carried out appropriately, checks whether the PDCA cycle is
implemented without fail to clarify visible or potential problems related to the EHS and promotes improvements in response
after clarifying the problems if there are any. The audit is conducted by Environment, Safety & Quality Assurance Department
in accordance with the annual audit plan formulated at the beginning of each fiscal year, and in accordance with the RC audit
guidelines. In FY2015, a total of 36 audits were conducted as planned, the details of which are summarized below.

Investment:
We have made active capital investments such as changing the feedstock for
manufacturing ammonia at the Toyama Plant in our efforts to reduce GHG
emissions. We also renovate aging facilities in a well-planned manner toensure safety, disaster prevention and maintain safe operations.

Economic effects:
The measures we took for environmental protection, such as the reduction of
steam at Toyama Plant and conversion of waste organic solvents into fuels at
Onoda Plant, produced the following economic effects in FY2015.

Capex for environment and safety [million yen]

Date

Subject

Date

Subject

Date

Subject

Sodegaura Plant

6/16,12/1

Nissei Corporation

7/22

NCA [U.S.A.]

11/12,11/13

Saitama Plant

7/8,1/19

Nissan Engineering, Ltd. Head Office

5/14

NCE [France]

9/3

Toyama Plant

6/12,12/21,12/22

Nissan Engineering, Ltd. Toyama

5/12

NCK [Korea]

11/26

Nagoya Plant

6/26,2/5

Nihon Hiryo Co., Ltd. Shinmachi Plant

6/23,11/20

NCT [Taiwan]

2/24

Onoda Plant

6/12,1/29

Nihon Hiryo Co., Ltd. Handa Plant

6/5,12/4

Chemical Research Laboratories

7/10,2/10

Nissan Green & Landscape Co., Ltd.

5/19

Materials Research Laboratories Funabashi

8/6,1/22

Environmental Technical Laboratories, Ltd.

5/26

Materials Research Laboratories Toyama

8/4,2/16

Nissan Butsuryu Co., Ltd.

6/9,11/24,

Materials Research Laboratories Sodegaura

7/16,2/18

Biological Research Laboratories

8/21,2/3

1,000

0
(FY)

754
681

685

101

73

104

2011

2012

2013

581
480

Capex for environment

11/25,12/9

581

1,443
952

678

Amount [million yen]

Energy saving

173

Resource saving

49

Reuse and recycling

32

491

2014

2015

Capex for safety and disaster prevention

Energy Consumption and Energy Consumption Rate

The figure below shows the inputs of raw materials, energy and water for production and emissions to the atmosphere, waters, soil and waste.

FY2015 Environmental Load Results
INPUT

Water Resources Input

Energy Input

Raw Materials

40,671,000m3

98,830kl (Crude oil equivalent)
Energy : fuel, purchased electricity and purchased steam
used for business activities (fuel and purchased steam crude oil equivalent)

Water resources : tap water, ground waterand industrial water used for business activities

Production Activities(5 plants)
Emissions to the Atmosphere

Emissions to the waters

OUTPUT

310,000 tons-CO2
CO2
GHG other than CO2
152,000 tons-CO2
NOx
158 tons
SOx
391 tons
Dust
23 tons
PRTR substances
1.66 tons

15,120,000m3
Effluent
COD
279 tons
Total Nitrogen3,064 tons
Total Phosphorus
14 tons
PRTR substances 0.54 tons

Emissions to the AtmosphereCO2 : the amount of CO2 emitted frombusiness activities
GHG other than CO2 : the amount of CH4,
N2O, HFC and SF6
NOx, SOx, Dust: the amount of NOx, SOx andDust included in emissions from each facility

Emissions to the waters
COD, Total Nitrogen, Total
Phosphorus : volume that wascalculated by multiplying effluent to
the public waters by theconcentration of nitrogen,phosphorus and COD.

Nissan Chemical Industries, Ltd. Annual Report 2016

1,672
994

1,500

500

Environmental Load from Production Activities

33

Type of cost reduction

2,000

Emissions to the soil

PRTR substances

N/A

Waste

Total volume
33,418 tons
Recycled volume4,489 tons
External disposal volume 2,152 tons

Waste
Recycled volume : the amount ofwaste recycled
External disposal volume : the final
amount of landfill disposal bycontractor

Production and research:
In accordance with the Act on the Rational Use of Energy, we collect data on the amount ofenergy consumed at all of our business establishments and submit this data to the national
government, along with data on our energy consumption rate. The amount of energy weconsumed in FY2015 increased from the previous fiscal year by approximately a crude oil
equivalent of 7,000 kiloliters. This is attributed to an increase in the production volume of
products that consume a lot of energy. We have a product matrix that covers a wide rangeof products, from commodity chemicals to agrochemicals, pharmaceuticals and functional
products for electronic materials. This makes it difficult to evaluate the energy consumption
rate based on the simple quantity of production, which is why we calculate it based onsales. Our energy consumption rate had been improving over the last several years, but it
increased by 4.6% year on year in FY2015. This is thought to have been the result of
reducing the prices of our main products that we produce at our plants.
Logistics:
As a cargo owner, we work together with Nissan Butsuryu Co., Ltd., a groupcompany which handles our logistics operations, to promote the rational use ofenergy for transportation. In FY2015, our energy consumption rate improved
from the previous fiscal year, while the amount of energy consumption in
crude oil equivalent was almost unchanged from the previous fiscal year. We
will continue striving to improve our energy consumption rate throughmeasures such as promoting modal shifts, replacing vehicles withenergy-saving and practicing eco-driving.

Energy consumption (crude oil equivalent 1,000kl)
and energy consumption index (FY2011 as a base of 100) in production and research
100

100.0

96.4

89.1

86.1

81.5

80
60
40

96.9

96.7

94.8

2011

2012

2013

98.8
91.9

20
0
(FY)

2014

2015

Energy consumption index

Energy consumption

Energy consumption (left axis: crude oil equivalent 1,000kl)
and energy consumption rate (right axis: kl/1 million ton kilo) in logistics
8

35.4

35.9

36.5

36.5

36.3

6

30

4
2
0
(FY)

40

20

5.0

5.0

5.2

2011

2012

2013

Energy consumption

5.2

5.2

2014

2015

10
0

Energy consumption rate

Nissan Chemical Industries, Ltd. Annual Report 201634

Responsible Care(RC) Activities

Reduction of Greenhouse Gas Emissions

Control of Exhaust Gas

Reduction of Emissions of VOCs

In accordance with the Act on Promotion of Global Warming Countermeasures, we collect data on the emissions of carbon dioxide (CO2) and other greenhouse gases
from all of our business establishments, including our plants, laboratories, and head office, and report this data to the national government. In FY2015, our CO2
emissions increased from the previous fiscal year, but there was a decline in dinitrogen monoxide (nitrous oxide, or N2O) emissions, and overall greenhouse gas
emissions remained almost unchanged from the previous fiscal year. However, the GHG emission rate, which is calculated as the ratio between emissions and sales(emission/sales), fell steadily over the course of five years from FY2011 to FY2015. Compared to FY2011, the GHG emission rate was reduced by 13% in FY2015.

We control exhaust gas by observing the discharge standards stipulated in the
Air Pollution Control Act and regulatory values based on agreements with local
communities. We maintain the proper conditions in our desulfurization facilities
and denitrification facilities in an effort to control the emissions of air pollutants
such as sulfur oxide (SOx) and nitrogen oxide (NOx).

We regularly take initiatives to reduce emissions of volatile organic compounds(VOCs), which cause the formation of photochemical oxidants. We have not emitted
any 1,2-Dichloroethane into the atmosphere since 2006 due to the introduction of
VOC eliminators and other initiatives. Our emissions of other VOCs (benzene andformaldehyde) have also remained at around 25% of the level of 2006 and earlier.

GHG emissions [1,000 tons - CO2]

Index of the GHG emission rate (FY2011 as 100)

SOx emission / NOx emission [ton]Emissions of organic air pollutants [ton]

500

100

500

1.0

400

220
300

248

250

237

95

53
49

0
(FY)

391

345

2011

136

138

146

55

53

100

0
(FY)

94

55

140

153

2012

2013

172

2014

80
(FY)

2012

2013

2014

87

2015

CO2 emissions from non-energy use

Ｔ Ｏ ＰＩＣ Ｓ

In August 2016, the Toyama Plant switched from naphtha to natural gas
as the feedstock used for ammonia. It will also consider switching tonatural gas as the fuel for melamine furnaces and boilers.
Natural gas does not generate any sulfur oxide or soot dust when it isburned. The amount of CO2 and NOx (nitrogen oxide) emitted by natural
gas is 30% to 40% less than that of petroleum, thereby helping to protect
the global environment and prevent climate change.

2013

2014

0.2
0.0
(FY)

2015

1998

0.21 0.17

0.20 0.17

2011

2012

0.26

0.17

2013

NOx emission

0.27

0.17

0.20 0.17

2014
Benzene2015
Formaldehyde

Reduction of Waste

Reduction of Emissions of PRTR Substances

We thoroughly implement control measures to ensure the proper disposal of waste, while
also striving to reduce industrial waste. Where we outsource waste treatment, we conduct
on-site inspections of the waste disposer to confirm that our waste will be disposed
properly, and check the travel distance of waste, destinations, and other details with their
manifest. This approach enables us to monitor the entire process to the final disposal.
Waste water discharged in the manufacturing process accounts for the majority of ourindustrial waste. We treat this waste internally by means of combustion. As for solid
waste, we reuse sludge as feedstock for the base course material of roads and cement.
We also promote the recycling of waste plastics in an effort to reduce the final disposal
volume. The amount of waste generated began to rise in FY2014 due to an increase in
the production volume of organic fine chemicals and flame retardants.

In FY2015, we emitted 62 chemical substances whose emissions are must be
registered in accordance with the Act on Confirmation, etc. of Release Amountsof Specific Chemical Substances in the Environment and Promotion of
Improvements to the Management Thereof (PRTR law). The main substances
emitted were formaldehyde and n-hexane. Formaldehyde is used as a reaction
solvent, while n-hexane is found in naphtha, which is used as a fuel or feedstock.

40

2. Onoda Plant: Reuse of Waste Organic SolventsThe Onoda Plant, which mainly produces organic fine chemicals, takes
the waste organic solvents for column cleanup and the cleaning ofpharmaceuticals and agrochemicals and uses them as boiler fuel. The
waste organic solvents selected for reuse are those that pose no risk ofgenerating toxic gases, such as SOx and NOx, and are free of chlorine. In
the past, heavy oil was used as boiler fuel, and all waste organic solventswere incinerated by an industrial waste disposal operator. The reuse ofsolvents has not only reduced CO2 emissions from the plant but also
produced benefits in terms of cost.
We will continue to work patiently to tackle climate change.

30
20
10
0
(FY)

26.3

26.8

26.3

2011

2012

2013

33.0

33.4

2014

2015

Emissions of PRTR substances [ton]Substance

FY2012FY2013

FY2014FY2015

Formaldehyde

2.4

0.5

0.5

0.4

0.5

N-hexane

1.2

1.2

1.4

1.4

1.3

Others
Total

0.7
4.3

0.3
2.1

0.4
2.3

0.5
2.3

0.4
2.2

We emit a total of 2.2 tons of these substances, including1.7 tons to theatmosphere and 0.5 tons to the waters. Total emissions remained almost
unchanged from the previous fiscal year, but we have continued to take steps
to control them. We did not emit these substances into the soil.
Breakdown of emissions of PRTR substances [ton]

5

4

4

3

3
2
1
0
(FY)

3.1

2.3

2011

2.5 2.5
2012

2.4

Emissions

FY2011

5

Recycled volume / Final disposal volume [1,000 tons]

1.5

2013

3.1

2

4.5
2.3

2014

Recycled volume

Nissan Chemical Industries, Ltd. Annual Report 2016

0.4

Waste volume [1,000 tons]

Initiatives for Preventing Climate Change
1. Toyama Plant: Switching from Naphtha to Natural Gas

0.83 0.82

93
89

2011

2012

SOx emission

152

2015

2011

158

114

100

85

175

CO2 emissions from energy use
Dinitrogen monoxide(N2O)

35

0.8
0.6

200

255
90

100

381

379

300

400

200

390

2.2
2015
Final disposal volume

1.9
2.4

1
0
(FY)

2011

1.6
0.5
2012

1.8

1.9

1.7

0.5

0.4

0.5

2013

2014

2015
Atmosphere

WatersNissan Chemical Industries, Ltd. Annual Report 201636

Responsible Care(RC) Activities

Reduction of Greenhouse Gas Emissions

Control of Exhaust Gas

Reduction of Emissions of VOCs

In accordance with the Act on Promotion of Global Warming Countermeasures, we collect data on the emissions of carbon dioxide (CO2) and other greenhouse gases
from all of our business establishments, including our plants, laboratories, and head office, and report this data to the national government. In FY2015, our CO2
emissions increased from the previous fiscal year, but there was a decline in dinitrogen monoxide (nitrous oxide, or N2O) emissions, and overall greenhouse gas
emissions remained almost unchanged from the previous fiscal year. However, the GHG emission rate, which is calculated as the ratio between emissions and sales(emission/sales), fell steadily over the course of five years from FY2011 to FY2015. Compared to FY2011, the GHG emission rate was reduced by 13% in FY2015.

We control exhaust gas by observing the discharge standards stipulated in the
Air Pollution Control Act and regulatory values based on agreements with local
communities. We maintain the proper conditions in our desulfurization facilities
and denitrification facilities in an effort to control the emissions of air pollutants
such as sulfur oxide (SOx) and nitrogen oxide (NOx).

We regularly take initiatives to reduce emissions of volatile organic compounds(VOCs), which cause the formation of photochemical oxidants. We have not emitted
any 1,2-Dichloroethane into the atmosphere since 2006 due to the introduction of
VOC eliminators and other initiatives. Our emissions of other VOCs (benzene andformaldehyde) have also remained at around 25% of the level of 2006 and earlier.

GHG emissions [1,000 tons - CO2]

Index of the GHG emission rate (FY2011 as 100)

SOx emission / NOx emission [ton]Emissions of organic air pollutants [ton]

500

100

500

1.0

400

220
300

248

250

237

95

53
49

0
(FY)

391

345

2011

136

138

146

55

53

100

0
(FY)

94

55

140

153

2012

2013

172

2014

80
(FY)

2012

2013

2014

87

2015

CO2 emissions from non-energy use

Ｔ Ｏ ＰＩＣ Ｓ

In August 2016, the Toyama Plant switched from naphtha to natural gas
as the feedstock used for ammonia. It will also consider switching tonatural gas as the fuel for melamine furnaces and boilers.
Natural gas does not generate any sulfur oxide or soot dust when it isburned. The amount of CO2 and NOx (nitrogen oxide) emitted by natural
gas is 30% to 40% less than that of petroleum, thereby helping to protect
the global environment and prevent climate change.

2013

2014

0.2
0.0
(FY)

2015

1998

0.21 0.17

0.20 0.17

2011

2012

0.26

0.17

2013

NOx emission

0.27

0.17

0.20 0.17

2014
Benzene2015
Formaldehyde

Reduction of Waste

Reduction of Emissions of PRTR Substances

We thoroughly implement control measures to ensure the proper disposal of waste, while
also striving to reduce industrial waste. Where we outsource waste treatment, we conduct
on-site inspections of the waste disposer to confirm that our waste will be disposed
properly, and check the travel distance of waste, destinations, and other details with their
manifest. This approach enables us to monitor the entire process to the final disposal.
Waste water discharged in the manufacturing process accounts for the majority of ourindustrial waste. We treat this waste internally by means of combustion. As for solid
waste, we reuse sludge as feedstock for the base course material of roads and cement.
We also promote the recycling of waste plastics in an effort to reduce the final disposal
volume. The amount of waste generated began to rise in FY2014 due to an increase in
the production volume of organic fine chemicals and flame retardants.

In FY2015, we emitted 62 chemical substances whose emissions are must be
registered in accordance with the Act on Confirmation, etc. of Release Amountsof Specific Chemical Substances in the Environment and Promotion of
Improvements to the Management Thereof (PRTR law). The main substances
emitted were formaldehyde and n-hexane. Formaldehyde is used as a reaction
solvent, while n-hexane is found in naphtha, which is used as a fuel or feedstock.

40

2. Onoda Plant: Reuse of Waste Organic SolventsThe Onoda Plant, which mainly produces organic fine chemicals, takes
the waste organic solvents for column cleanup and the cleaning ofpharmaceuticals and agrochemicals and uses them as boiler fuel. The
waste organic solvents selected for reuse are those that pose no risk ofgenerating toxic gases, such as SOx and NOx, and are free of chlorine. In
the past, heavy oil was used as boiler fuel, and all waste organic solventswere incinerated by an industrial waste disposal operator. The reuse ofsolvents has not only reduced CO2 emissions from the plant but also
produced benefits in terms of cost.
We will continue to work patiently to tackle climate change.

30
20
10
0
(FY)

26.3

26.8

26.3

2011

2012

2013

33.0

33.4

2014

2015

Emissions of PRTR substances [ton]Substance

FY2012FY2013

FY2014FY2015

Formaldehyde

2.4

0.5

0.5

0.4

0.5

N-hexane

1.2

1.2

1.4

1.4

1.3

Others
Total

0.7
4.3

0.3
2.1

0.4
2.3

0.5
2.3

0.4
2.2

We emit a total of 2.2 tons of these substances, including1.7 tons to theatmosphere and 0.5 tons to the waters. Total emissions remained almost
unchanged from the previous fiscal year, but we have continued to take steps
to control them. We did not emit these substances into the soil.
Breakdown of emissions of PRTR substances [ton]

5

4

4

3

3
2
1
0
(FY)

3.1

2.3

2011

2.5 2.5
2012

2.4

Emissions

FY2011

5

Recycled volume / Final disposal volume [1,000 tons]

1.5

2013

3.1

2

4.5
2.3

2014

Recycled volume

Nissan Chemical Industries, Ltd. Annual Report 2016

0.4

Waste volume [1,000 tons]

Initiatives for Preventing Climate Change
1. Toyama Plant: Switching from Naphtha to Natural Gas

0.83 0.82

93
89

2011

2012

SOx emission

152

2015

2011

158

114

100

85

175

CO2 emissions from energy use
Dinitrogen monoxide(N2O)

35

0.8
0.6

200

255
90

100

381

379

300

400

200

390

2.2
2015
Final disposal volume

1.9
2.4

1
0
(FY)

2011

1.6
0.5
2012

1.8

1.9

1.7

0.5

0.4

0.5

2013

2014

2015
Atmosphere

WatersNissan Chemical Industries, Ltd. Annual Report 201636

Responsible Care(RC) Activities

Control of Waste Water

Biodiversity

Our plants observe the discharge standards stipulated in the Water Pollution Control Act andregulatory values based on agreements with local communities. We monitor the chemical
oxygen demand (COD) in waste water and the total nitrogen and total phosphorous
concentration. There was an increase in the amount of COD discharged in the previous
fiscal year due to the malfunction of water discharge facilities. However, improvements tothe facilities helped return the amount to normal levels in FY2015. On the other hand, while
there was a decrease in the amount of total nitrogen discharged in the previous fiscal year
due to the shutdown of the ammonia plant, the level returned to normal in FY2015.

At Nissan Chemical, we are fully aware of the fact that biodiversity serves as
an important foundation for sustainable society in the future. As a member ofinternational society, we intend to promote activities that contribute tobiodiversity by sharing roles and responsibilities with all the people andworking together with them. For this purpose, we have established the
Nissan Chemical Biodiversity Action Guidelines.
In addition, in October 2015 we participated in the Japan Business andBiodiversity Partnership to promote our initiatives for biodiversity.

COD (left axis) / Total phosphorus (left axis) / Total nitrogen (right axis) emission [ton]
400
300
200

4,000

3,166

3,100

3,123

3,000

279

249

243

221

3,064

359

2,000

2,294

100
0

1,000

18

19

11

13

14

2011

2012

2013

2014

2015

COD emission

0(FY)

Total nitrogen emission

Total phosphorus emission

Efficient Use of Water Resources
At Nissan Chemical plants, we carry out exhaustive water-saving activities by observing
environmental laws and regulations and cooperating with local organizations. These activities
ensure that our operations do not place a burden on natural water circulation. We also clean
waste water before returning it to nature to prevent negatively affecting the environment.
The Toyama Plant is located in the city of Toyama at the base of Mount Tate, beneath which
there is an abundance of groundwater. We have been promoting the rational use ofgroundwater as a member of the groundwater water use council in Toyama area, a local council
that works to protect the local natural environment and promote the sound development of local
communities. Prohibiting the use of groundwater for melting snow and the circulation of water ina cooling tower are some of the measures we employ for the rational use of groundwater.
The Onoda Plant is located in Sanyo-Onoda City facing the Seto Inland Sea (Suonada). We
have been taking measures to maintain the quality of waste water discharged from the plant inline with the Act on Special Measures concerning Conservation of the Environment of the Seto
Inland Sea. We also assist local measures to address the potential shortage of industrial water.
Water input / Effluent [Million m3]
45
30

41.6
15.9
0

41.3

40.3

15

2011

15.5
2012

40.7

39.0
15.3

2013

15.1
2014

Water resources input
37

Nissan Chemical Industries, Ltd. Annual Report 2016

15.1
2015

(FY)

Nissan Chemical Biodiversity Action Guidelines
Our corporate philosophy is to “contribute to society in harmony withthe environment, based on our excellent technologies, products, andservices.” We at the Nissan Chemical Group engage in businessactivities that take into account biodiversity and help protect the
global environment.
1) We will understand, analyze, and evaluate the impact of our
products on biodiversity throughout their lifecycle and strive to
reduce the impact. We will work to preserve biodiversity andensure the sustainable use of biological resources.
2) We will strive to raise each employee’s awareness of biodiversity
through responsible care activities.
3) We will continue to carry out social contribution activities that help
preserve biodiversity and earn us the high esteem and trust ofsociety.
4) We will disclose the results of these initiatives to deepen the levelof communication with society.

Ｔ Ｏ ＰＩＣ Ｓ
Clean-up Activities
The Nagoya Plant participates in clean-up activities organized by groups
such as the Fujimae-Higata wo Mamoru Kai, an NPO engaged in activities forprotecting Fujimae-Higata tidal flat. A tidal flat plays an important role as an
ecosystem for food chains of living organisms and natural purification. The
clean-up activities aim to maintain the tidal flat as an asset. Fujimae-Higata, atidal flat in Nagoya Port, is one of the largest stopovers for migratory birds inJapan and a wetland registered under the Ramsar Convention.

Ｔ Ｏ ＰＩＣ Ｓ
Nissan Bio-park Nishi-hongo
The development of the Nissan Bio-park Nishi-hongo, which is operated by
the Toyama Plant and received the RC Grand Prix Award from the Japan
Chemical Industry
Association in 2014, began
about 10 years ago on aplot of approximately two
hectares of land. It has turfareas, a wetland, a pond,
and a creek. Firefly larvae
were released in the parkas part of the Hotaru Koi
Project, an initiative which aims to nurture Japanese fireflies.
The pond is used for breeding Japanese rice fish, an endangered species. It
also serves as a balancing reservoir in the event of flooding. Tulips, sunflowers,
Japanese cherry trees, Japanese beech trees, and other plants are planted in
the park, which also has tables for cherry-blossom viewing. The Bio-park
Support Team, which is made up of former employees of Nissan Chemical, isworking together with agroup that manages theadjacent flower field toachieve the main objectiveof the Nissan Biopark
Nishi-hongo, which is to“create spaces withbiodiversity, mainly
waterfront andcommunity-based forests, to provide places where employees of the plant
and local residents can relax.”

Interview: Manager of Environment and Safety Section, Toyama
Plant
At the Nissan Biopark
Nishi-hongo of the Toyama
Plant, former employees of
Nissan Chemical who are
qualified as naturalists, or
nature guides certified by
the prefectural government
Manager of environment and safety section,of Toyama, serve as guides
Toyama Plant Isao Hinata
for visitors to the park.
The ground and square are open to the local residents, and families visit thepark to view the cherry blossoms when they are in bloom. We hope to see theplant continue to coexist in harmony with local residents through these
activities.

Promotion of Development and Sales ofEnvironmentally-Friendly Products
and Green Products
At Nissan Chemical, we have been working on the development ofenvironmentally-friendly products that diminish the effects of climate change
and the environmental impact.
Compact agrochemical products
We provide lightweight, compact agrochemical products that contain highconcentrations of active ingredients, such as granulated wettable powder. This enables
us to make a number of contributions, such as reducing CO2 emissions from packaging
materials, waste, manufacturing, and transportation.

AdBlue®, a high-grade urea solution
AdBlue® is a high-grade urea solution that is used for the urea SCR system, atechnology for purifying exhaust gas. AdBlue® helps reduce the environmental impact.
When it is sprayed on exhaust gas from a diesel vehicle, nitrogen oxide (NOx) is
decomposed into nitrogen and water, which are harmless. Demand for AdBlue® hasbeen increasing year by year due to the tightening of regulations on automobile
exhaust gas. This trend is expected to continue, so we have established bases for
supplying this product in the Kanto, Hokkaido, Hokuriku, Tokai, and Kyushu areas.

ECOPROMOTE®, nucleating agents for inducing the crystallization
speed of PLA.
The ECOPROMOTE® is a series of additives for polylactic acid (PLA), a bioplastic
derived from plants such as corn. While PLA is the leading biodegradable plastic in terms
of practical application, its uses have been limited because it is plagued by problems withmolding processability and heat
resistance. The ECOPROMOTE® has afunction for promoting the crystallization
growth of PLA, exhibits superior heat
resistance, and can be molded quickly.
Therefore, it is used widely formaterials that need to be durable, suchas electronic equipment materials andComposite printerthose of printers.

Nucleating agent for electroless plating
We promoted the application development of HYPERTECH®, a functional coating
material that contains hyperbranched nano-particles. As a result, we have developed
nucleating agents for electroless plating that allows for a more than 90% reduction of
the amount of metal used for wiring the touch panels of smartphones, tablet PCs, andother devices. Metal wires are created by making a metal film covering the entire
substrate in a vacuum vessel, andthen removing unwanted parts withacid. More than 90% of the metal isremoved in this process.
HYPERTECH® makes it possible todraw wiring patterns, with the metal
adhering to only the drawn lines. Thisin turn helps to minimize the area
covered with metal plating.
Touch panel

EﬄuentNissan Chemical Industries, Ltd. Annual Report 201638

Responsible Care(RC) Activities

Control of Waste Water

Biodiversity

Our plants observe the discharge standards stipulated in the Water Pollution Control Act andregulatory values based on agreements with local communities. We monitor the chemical
oxygen demand (COD) in waste water and the total nitrogen and total phosphorous
concentration. There was an increase in the amount of COD discharged in the previous
fiscal year due to the malfunction of water discharge facilities. However, improvements tothe facilities helped return the amount to normal levels in FY2015. On the other hand, while
there was a decrease in the amount of total nitrogen discharged in the previous fiscal year
due to the shutdown of the ammonia plant, the level returned to normal in FY2015.

At Nissan Chemical, we are fully aware of the fact that biodiversity serves as
an important foundation for sustainable society in the future. As a member ofinternational society, we intend to promote activities that contribute tobiodiversity by sharing roles and responsibilities with all the people andworking together with them. For this purpose, we have established the
Nissan Chemical Biodiversity Action Guidelines.
In addition, in October 2015 we participated in the Japan Business andBiodiversity Partnership to promote our initiatives for biodiversity.

COD (left axis) / Total phosphorus (left axis) / Total nitrogen (right axis) emission [ton]
400
300
200

4,000

3,166

3,100

3,123

3,000

279

249

243

221

3,064

359

2,000

2,294

100
0

1,000

18

19

11

13

14

2011

2012

2013

2014

2015

COD emission

0(FY)

Total nitrogen emission

Total phosphorus emission

Efficient Use of Water Resources
At Nissan Chemical plants, we carry out exhaustive water-saving activities by observing
environmental laws and regulations and cooperating with local organizations. These activities
ensure that our operations do not place a burden on natural water circulation. We also clean
waste water before returning it to nature to prevent negatively affecting the environment.
The Toyama Plant is located in the city of Toyama at the base of Mount Tate, beneath which
there is an abundance of groundwater. We have been promoting the rational use ofgroundwater as a member of the groundwater water use council in Toyama area, a local council
that works to protect the local natural environment and promote the sound development of local
communities. Prohibiting the use of groundwater for melting snow and the circulation of water ina cooling tower are some of the measures we employ for the rational use of groundwater.
The Onoda Plant is located in Sanyo-Onoda City facing the Seto Inland Sea (Suonada). We
have been taking measures to maintain the quality of waste water discharged from the plant inline with the Act on Special Measures concerning Conservation of the Environment of the Seto
Inland Sea. We also assist local measures to address the potential shortage of industrial water.
Water input / Effluent [Million m3]
45
30

41.6
15.9
0

41.3

40.3

15

2011

15.5
2012

40.7

39.0
15.3

2013

15.1
2014

Water resources input
37

Nissan Chemical Industries, Ltd. Annual Report 2016

15.1
2015

(FY)

Nissan Chemical Biodiversity Action Guidelines
Our corporate philosophy is to “contribute to society in harmony withthe environment, based on our excellent technologies, products, andservices.” We at the Nissan Chemical Group engage in businessactivities that take into account biodiversity and help protect the
global environment.
1) We will understand, analyze, and evaluate the impact of our
products on biodiversity throughout their lifecycle and strive to
reduce the impact. We will work to preserve biodiversity andensure the sustainable use of biological resources.
2) We will strive to raise each employee’s awareness of biodiversity
through responsible care activities.
3) We will continue to carry out social contribution activities that help
preserve biodiversity and earn us the high esteem and trust ofsociety.
4) We will disclose the results of these initiatives to deepen the levelof communication with society.

Ｔ Ｏ ＰＩＣ Ｓ
Clean-up Activities
The Nagoya Plant participates in clean-up activities organized by groups
such as the Fujimae-Higata wo Mamoru Kai, an NPO engaged in activities forprotecting Fujimae-Higata tidal flat. A tidal flat plays an important role as an
ecosystem for food chains of living organisms and natural purification. The
clean-up activities aim to maintain the tidal flat as an asset. Fujimae-Higata, atidal flat in Nagoya Port, is one of the largest stopovers for migratory birds inJapan and a wetland registered under the Ramsar Convention.

Ｔ Ｏ ＰＩＣ Ｓ
Nissan Bio-park Nishi-hongo
The development of the Nissan Bio-park Nishi-hongo, which is operated by
the Toyama Plant and received the RC Grand Prix Award from the Japan
Chemical Industry
Association in 2014, began
about 10 years ago on aplot of approximately two
hectares of land. It has turfareas, a wetland, a pond,
and a creek. Firefly larvae
were released in the parkas part of the Hotaru Koi
Project, an initiative which aims to nurture Japanese fireflies.
The pond is used for breeding Japanese rice fish, an endangered species. It
also serves as a balancing reservoir in the event of flooding. Tulips, sunflowers,
Japanese cherry trees, Japanese beech trees, and other plants are planted in
the park, which also has tables for cherry-blossom viewing. The Bio-park
Support Team, which is made up of former employees of Nissan Chemical, isworking together with agroup that manages theadjacent flower field toachieve the main objectiveof the Nissan Biopark
Nishi-hongo, which is to“create spaces withbiodiversity, mainly
waterfront andcommunity-based forests, to provide places where employees of the plant
and local residents can relax.”

Interview: Manager of Environment and Safety Section, Toyama
Plant
At the Nissan Biopark
Nishi-hongo of the Toyama
Plant, former employees of
Nissan Chemical who are
qualified as naturalists, or
nature guides certified by
the prefectural government
Manager of environment and safety section,of Toyama, serve as guides
Toyama Plant Isao Hinata
for visitors to the park.
The ground and square are open to the local residents, and families visit thepark to view the cherry blossoms when they are in bloom. We hope to see theplant continue to coexist in harmony with local residents through these
activities.

Promotion of Development and Sales ofEnvironmentally-Friendly Products
and Green Products
At Nissan Chemical, we have been working on the development ofenvironmentally-friendly products that diminish the effects of climate change
and the environmental impact.
Compact agrochemical products
We provide lightweight, compact agrochemical products that contain highconcentrations of active ingredients, such as granulated wettable powder. This enables
us to make a number of contributions, such as reducing CO2 emissions from packaging
materials, waste, manufacturing, and transportation.

AdBlue®, a high-grade urea solution
AdBlue® is a high-grade urea solution that is used for the urea SCR system, atechnology for purifying exhaust gas. AdBlue® helps reduce the environmental impact.
When it is sprayed on exhaust gas from a diesel vehicle, nitrogen oxide (NOx) is
decomposed into nitrogen and water, which are harmless. Demand for AdBlue® hasbeen increasing year by year due to the tightening of regulations on automobile
exhaust gas. This trend is expected to continue, so we have established bases for
supplying this product in the Kanto, Hokkaido, Hokuriku, Tokai, and Kyushu areas.

ECOPROMOTE®, nucleating agents for inducing the crystallization
speed of PLA.
The ECOPROMOTE® is a series of additives for polylactic acid (PLA), a bioplastic
derived from plants such as corn. While PLA is the leading biodegradable plastic in terms
of practical application, its uses have been limited because it is plagued by problems withmolding processability and heat
resistance. The ECOPROMOTE® has afunction for promoting the crystallization
growth of PLA, exhibits superior heat
resistance, and can be molded quickly.
Therefore, it is used widely formaterials that need to be durable, suchas electronic equipment materials andComposite printerthose of printers.

Nucleating agent for electroless plating
We promoted the application development of HYPERTECH®, a functional coating
material that contains hyperbranched nano-particles. As a result, we have developed
nucleating agents for electroless plating that allows for a more than 90% reduction of
the amount of metal used for wiring the touch panels of smartphones, tablet PCs, andother devices. Metal wires are created by making a metal film covering the entire
substrate in a vacuum vessel, andthen removing unwanted parts withacid. More than 90% of the metal isremoved in this process.
HYPERTECH® makes it possible todraw wiring patterns, with the metal
adhering to only the drawn lines. Thisin turn helps to minimize the area
covered with metal plating.
Touch panel

EﬄuentNissan Chemical Industries, Ltd. Annual Report 201638

Responsible Care(RC) Activities

Safety and Disaster Prevention, Occupational Safety and Health

Chemicals and Product Safety

Safety and Disaster Prevention

Chemicals Management

In FY2015, we thoroughly carried out pre-manufacturing evaluations, process risk predictions, and facility risk
predictions, aiming to ensure safety, achieve stable operations, and improve our process safety capability. As a result,
there were no fire, explosion, and leakage accidents. To maintain this zero serious accident level, we began toconsider the idea of assessing the safety culture of plants in FY2014, and started carrying out full scale evaluations at
all of our plants in FY2015. As a result, important issues, such as the communication gap between the management
team, managers, and workers, were identified. Moving forward, we will strive to overcome these issues and foster asafety culture at all of our plants. We will also extend these evaluations to laboratories and affiliates in FY2016.
Our plants, laboratories, and affiliates carry out various drills and training every year, such as comprehensive
disaster drills, earthquake drills, initial fire-fighting drills, and communication and reporting training. These drills andtraining sessions all take into the characteristics of the location and region, and are designed to make us ready torespond to emergencies or accidents in a reliable manner.

To achieve the 2020 targets＊1 on which agreement was reached at the World Summit on Sustainable Development (WSSD) in 2002, the Strategic Approach toInternational Chemicals Management (SAICM) for promoting risk reduction based on scientific risk assessment, collection and provision of information, and othermeasures were adopted at the International Conference on Chemicals Management (ICCM) in 2006. At Nissan Chemical, we strive to minimize the negative impact
of chemical products on people’s health and the environment during their lifecycle in line with the domestic SAICM implementation plan.
＊1 : “… aiming to achieve, by 2020, that chemicals are used and produced in ways that lead to the minimization of significant adverse effects on human health and the environment …”

Risk Assessment in Product Lifecycle
Disaster drill at petrochemical complex

We perform a risk assessment (prior assessment) of each step in handling chemical products, such as the research and development, manufacture, sales, andrevision. The assessment of risks to human health and the environment in the value chain is based on data performed by the Biological Research Laboratories,
either on its own or by outsourcing it, safety test data obtained from results of searching external databases such as literature, and checking things such as data on
physicochemical properties and work environment conditions. Based on the results of risk assessment, we avoid using chemicals of concern and study safe
alternatives. These results are reported to top management and made known to all the necessary people in the company. The results are also made known topeople in the value chain by means such as technology transfer documents and safety data sheets.
For our GPS＊2/ JIPS＊3 activities, which are promoted by ICCA and JCIA, we conduct risk assessments of our chemical products and provide an overview ofappropriate management based on risks and safety information in the GPS/JIPS Safety Summary. This information is disclosed and made available to the public.
We also participate in LRI＊4, an international initiative promoted by JCIA that seeks to provide long-term support for research on the impact of chemicals on humanhealth and the environment. The activities we engage in aim to advance research on the assessment of risks to human health and the environment.

Ｔ Ｏ ＰＩＣ Ｓ
Safety Training Center
We have established a Safety Training Center in the Toyama Plant. At this facility, employees whose length of service is ten years or shorter
learn how to safely conduct work related to machines, electricity, and instrumentation. Trainees take part in simulations in which they are
sandwiched and caught in machines, and receive instructions on how to wear and use protective gear properly and other safety matters. The
Safety Training Center also accepts trainees from other plants, thereby helping to raise the level of safety awareness of the entire company.

＊2 : Global Product Strategy ＊3 : Japan Initiative of Product Stewardship＊4 : Long-Range Research Initiative

Occupational Safety and Health

Safety Results

In regards to occupational safety and health, we make continuous improvements
by implementing a PDCA cycle in our RC management system. This system
helps to prevent work accidents, promote good health of staff, and build acomfortable workplace environment, supporting our efforts to improve the level ofsafety and health at the individual business locations. At locations where work
accidents occurred, we thoroughly investigate the causes, implement or plan
provisional or permanent measures, and submit a report to the Environment,
Safety & Quality Assurance Department and the Personnel Department as thefollowing example. The Environment, Safety & Quality Assurance Department
sends the report to all business locations to help prevent the occurrence of similar
accidents with the protection of the personal information of the accident victim(s).

In FY2015, there were four cases of accidents that require staff time off from work and six
cases of accidents that does not require staff time off from work. The number of accidents
requiring staff time off from work increased from the previous fiscal year. Unfortunately,
the frequency rate has also worsened for two consecutive years. The result comes frominsufficient risk assessment of potential hazards and the increased numbers of falls
attributed to old age of victims were especially prominent. We will make sure to perform
risk assessments and make risk predictions before doing work, taking into account aged
workers, and engage in safety activities further, aiming to achieve zero accidents.

Example of work accident report

Main Categories for Risk Assessment

2.0
1.48

1.15

1.11

1.0
0.5

0.43
0.0
(FY) 2006

0.00
2007

0.00
2008

2009

0.36

0.36

0.37

0.37

2010

2011

2012

2013

2014

2015

Chemical Industry

Nissan Chemical

Lost-work time severity rate
［%］
0.15

0.006

0.00
(FY) 2006

0.028
0.000

2007

2008

0.013
0.029
0.000

0.004

0.000

0.000

0.000

2009

2010

2011

2012

2013

Nissan Chemical

Nissan Chemical Industries, Ltd. Annual Report 2016

7 Reduction of disposal amount3 Occupational safety and health for workers

9 Environmental and safety aspects forcommissioning, purchasing, and sales

4 Safety of facilities and for operations

8 Quality assurance

5 Product safety and environmental impact

Department Responsible
for Assessment

FY2013

FY2014FY2015

Research andDevelopment

Laboratories

16

31

18

Industrialization
Test

Plants (Technical)

14

2

12

Manufacturing

Plants (Manufacturing)

110

96

116

Various forms of biological assessments are needed for the research and development of agrochemicals, pharmaceuticals, medical materials, and chemicalmaterials that are beneficial for society. It is difficult to perform this research without using laboratory animals when conducting tests. In regards to animal testing,our Biological Research Laboratories have established rules in accordance with laws and regulations, such as the Act on Welfare and Management of Animals, andthe basic 3R principles (Replacement, Reduction, and Refinement). Working in line with these rules, the Animal Experiment Committee decides whether to conduct
animal testing and checks how the tests are performed to ensure that animal testing is conducted appropriately, and that proper consideration is given to the welfareof animals.

Chemical Safety Evaluation

0.10

39

2 Chemical material safety, impact onhuman health and the environmentStage

Ｔ Ｏ ＰＩＣ Ｓ

0.20

0.05

6 Logistics safety and stability

Considerations for Animal Testing

Lost-work time accidents frequency rate［%］
1.5

1 Meeting laws, regulations, agreements

Prior risk assessment results

2014

2015

Chemical Industry

The Safety Research Department evaluates the safety of materials and intermediates used for products and processes, and provides safety
information, thereby ensuring product safety and occupational safety. It evaluates the health and environmental hazards using animals,
bacteria, aquatic organisms, and other creatures. It makes use of the results of the evaluations for appropriate risk control in the respective
phases of research and development, industrial feasibility tests, and manufacturing. At the same time, it makes daily efforts to secure thesafety of products so that customers can feel safe using them.

Nissan Chemical Industries, Ltd. Annual Report 201640

Responsible Care(RC) Activities

Safety and Disaster Prevention, Occupational Safety and Health

Chemicals and Product Safety

Safety and Disaster Prevention

Chemicals Management

In FY2015, we thoroughly carried out pre-manufacturing evaluations, process risk predictions, and facility risk
predictions, aiming to ensure safety, achieve stable operations, and improve our process safety capability. As a result,
there were no fire, explosion, and leakage accidents. To maintain this zero serious accident level, we began toconsider the idea of assessing the safety culture of plants in FY2014, and started carrying out full scale evaluations at
all of our plants in FY2015. As a result, important issues, such as the communication gap between the management
team, managers, and workers, were identified. Moving forward, we will strive to overcome these issues and foster asafety culture at all of our plants. We will also extend these evaluations to laboratories and affiliates in FY2016.
Our plants, laboratories, and affiliates carry out various drills and training every year, such as comprehensive
disaster drills, earthquake drills, initial fire-fighting drills, and communication and reporting training. These drills andtraining sessions all take into the characteristics of the location and region, and are designed to make us ready torespond to emergencies or accidents in a reliable manner.

To achieve the 2020 targets＊1 on which agreement was reached at the World Summit on Sustainable Development (WSSD) in 2002, the Strategic Approach toInternational Chemicals Management (SAICM) for promoting risk reduction based on scientific risk assessment, collection and provision of information, and othermeasures were adopted at the International Conference on Chemicals Management (ICCM) in 2006. At Nissan Chemical, we strive to minimize the negative impact
of chemical products on people’s health and the environment during their lifecycle in line with the domestic SAICM implementation plan.
＊1 : “… aiming to achieve, by 2020, that chemicals are used and produced in ways that lead to the minimization of significant adverse effects on human health and the environment …”

Risk Assessment in Product Lifecycle
Disaster drill at petrochemical complex

We perform a risk assessment (prior assessment) of each step in handling chemical products, such as the research and development, manufacture, sales, andrevision. The assessment of risks to human health and the environment in the value chain is based on data performed by the Biological Research Laboratories,
either on its own or by outsourcing it, safety test data obtained from results of searching external databases such as literature, and checking things such as data on
physicochemical properties and work environment conditions. Based on the results of risk assessment, we avoid using chemicals of concern and study safe
alternatives. These results are reported to top management and made known to all the necessary people in the company. The results are also made known topeople in the value chain by means such as technology transfer documents and safety data sheets.
For our GPS＊2/ JIPS＊3 activities, which are promoted by ICCA and JCIA, we conduct risk assessments of our chemical products and provide an overview ofappropriate management based on risks and safety information in the GPS/JIPS Safety Summary. This information is disclosed and made available to the public.
We also participate in LRI＊4, an international initiative promoted by JCIA that seeks to provide long-term support for research on the impact of chemicals on humanhealth and the environment. The activities we engage in aim to advance research on the assessment of risks to human health and the environment.

Ｔ Ｏ ＰＩＣ Ｓ
Safety Training Center
We have established a Safety Training Center in the Toyama Plant. At this facility, employees whose length of service is ten years or shorter
learn how to safely conduct work related to machines, electricity, and instrumentation. Trainees take part in simulations in which they are
sandwiched and caught in machines, and receive instructions on how to wear and use protective gear properly and other safety matters. The
Safety Training Center also accepts trainees from other plants, thereby helping to raise the level of safety awareness of the entire company.

＊2 : Global Product Strategy ＊3 : Japan Initiative of Product Stewardship＊4 : Long-Range Research Initiative

Occupational Safety and Health

Safety Results

In regards to occupational safety and health, we make continuous improvements
by implementing a PDCA cycle in our RC management system. This system
helps to prevent work accidents, promote good health of staff, and build acomfortable workplace environment, supporting our efforts to improve the level ofsafety and health at the individual business locations. At locations where work
accidents occurred, we thoroughly investigate the causes, implement or plan
provisional or permanent measures, and submit a report to the Environment,
Safety & Quality Assurance Department and the Personnel Department as thefollowing example. The Environment, Safety & Quality Assurance Department
sends the report to all business locations to help prevent the occurrence of similar
accidents with the protection of the personal information of the accident victim(s).

In FY2015, there were four cases of accidents that require staff time off from work and six
cases of accidents that does not require staff time off from work. The number of accidents
requiring staff time off from work increased from the previous fiscal year. Unfortunately,
the frequency rate has also worsened for two consecutive years. The result comes frominsufficient risk assessment of potential hazards and the increased numbers of falls
attributed to old age of victims were especially prominent. We will make sure to perform
risk assessments and make risk predictions before doing work, taking into account aged
workers, and engage in safety activities further, aiming to achieve zero accidents.

Example of work accident report

Main Categories for Risk Assessment

2.0
1.48

1.15

1.11

1.0
0.5

0.43
0.0
(FY) 2006

0.00
2007

0.00
2008

2009

0.36

0.36

0.37

0.37

2010

2011

2012

2013

2014

2015

Chemical Industry

Nissan Chemical

Lost-work time severity rate
［%］
0.15

0.006

0.00
(FY) 2006

0.028
0.000

2007

2008

0.013
0.029
0.000

0.004

0.000

0.000

0.000

2009

2010

2011

2012

2013

Nissan Chemical

Nissan Chemical Industries, Ltd. Annual Report 2016

7 Reduction of disposal amount3 Occupational safety and health for workers

9 Environmental and safety aspects forcommissioning, purchasing, and sales

4 Safety of facilities and for operations

8 Quality assurance

5 Product safety and environmental impact

Department Responsible
for Assessment

FY2013

FY2014FY2015

Research andDevelopment

Laboratories

16

31

18

Industrialization
Test

Plants (Technical)

14

2

12

Manufacturing

Plants (Manufacturing)

110

96

116

Various forms of biological assessments are needed for the research and development of agrochemicals, pharmaceuticals, medical materials, and chemicalmaterials that are beneficial for society. It is difficult to perform this research without using laboratory animals when conducting tests. In regards to animal testing,our Biological Research Laboratories have established rules in accordance with laws and regulations, such as the Act on Welfare and Management of Animals, andthe basic 3R principles (Replacement, Reduction, and Refinement). Working in line with these rules, the Animal Experiment Committee decides whether to conduct
animal testing and checks how the tests are performed to ensure that animal testing is conducted appropriately, and that proper consideration is given to the welfareof animals.

Chemical Safety Evaluation

0.10

39

2 Chemical material safety, impact onhuman health and the environmentStage

Ｔ Ｏ ＰＩＣ Ｓ

0.20

0.05

6 Logistics safety and stability

Considerations for Animal Testing

Lost-work time accidents frequency rate［%］
1.5

1 Meeting laws, regulations, agreements

Prior risk assessment results

2014

2015

Chemical Industry

The Safety Research Department evaluates the safety of materials and intermediates used for products and processes, and provides safety
information, thereby ensuring product safety and occupational safety. It evaluates the health and environmental hazards using animals,
bacteria, aquatic organisms, and other creatures. It makes use of the results of the evaluations for appropriate risk control in the respective
phases of research and development, industrial feasibility tests, and manufacturing. At the same time, it makes daily efforts to secure thesafety of products so that customers can feel safe using them.

Nissan Chemical Industries, Ltd. Annual Report 201640

With Stakeholders

Relationships with Customers
Quality Policy and Quality Targets

Quality Assurance Activities

Our quality policy is providing products and services that satisfy customers. Under this policy, we set mid-term quality targets and implement yearly schedules alongwith the PDCA cycle in an ongoing effort to improve our management system and operations every year.
Moving forward, we will continue to improve our capability of meeting market needs that are becoming more diverse and complex. We will thereby develop
ourselves further as a company that contributes to society.

By applying quality management system such as ISO9001, we conduct quality assurance activities that respond to laws, regulations and customer demands
throughout product’s lifecycle from development, commercialization to the use of customers.
We have a corporate network that makes us promptly collect customer opinions concerning products (complaints, product liability accident information, etc.),
evaluate them and take corrective actions if necessary.

Quality Assurance Activities at Each Stage

PDCA in Quality Assurance
Providing products and services
that satisfy customers●●

Customer demands

PLAN

Quality Targets (for Achieving the Quality Policy)●

Customer opinions concerning products (complaints, product liability accident information, etc.)

Quality Assurance Committee
Report, annual plandevelopment

Quality Policy

ACT

Quality assurance in all processes, from design and development toproduction, shipment, distribution, and delivery

Annual report(performance results)
Corrective actions

Taking corrective and preventive measures to address quality
abnormalities and problems
Strengthening supply chain management linked to business strategies

Operationof Quality
Assurance

Implement inaccordancewith annual plan

Business division(Planning Department)

CEO and President (General director for QM)
Management Meeting
Management Review
Quality Assurance Committee
Chairman: Head of Environment, Safety and Quality Assurance Depertment

Nissan Chemical Industries, Ltd. Annual Report 2016

Customer satisfaction

Plant

Scale-up
Practical use

Performance Materials

Acceptance of raw materials

Board Meeting

41

Production

Shipping

Chemicals

CHECK

Our quality assurance system is based on quality ISO at each plant. The system is held in high regard by our customers because it allows for the provision ofhigh-quality products and services in Japan and other countries.
We have set up a Quality Assurance Committee that promotes quality assurance activities. It is chaired by the head of the Environment, Safety & Quality Assurance
Department, and consists of the officer in charge of the Environment, Safety & Quality Assurance Department and the heads of Production Technology Department,
Purchasing Department, all the business departments, and all the offices. The committee meets regularly every year.
The matters reported during the committee meeting are the results of activities, audits, improvements made in response to audit results, information aboutcomplaints, and improvements made in response to the complaints at Nissan Chemical and affiliates in the fiscal year under review. The members also discuss
action policies related to quality assurance and other items for the following fiscal year. The results of the discussions are reported at the management meeting andsubject to management review before the quality targets for the following fiscal year are determined.
In addition, all of our plants have obtained certification under ISO9001 (QMS), an international standard on quality management system. They each maintain andupdate the certificate through the certifying body.

Business Divisions

Technology transfer

Production

Direction for use
Production method
Analysis method
Technology transfer

Nissan Chemical Quality Management System

Laboratories

Laboratory

DO

Activity report/ Internal audit

Plants

Product development

Group Companies

PassedProduct realization
Production control●Quality control●

PassedAgricultural Chemicals●

We produce products in accordance with ISO9001:2008, the international standard of quality management, besides we produce pharmaceuticals under thequality assurance system that meets the pharmaceutical Good Manufacturing Practice(GMP), standards for manufacturing control and quality control of drugs.

Pharmaceuticals

Ｔ Ｏ ＰＩＣ Ｓ

Acquisition of NSF/ANSI-60＊ Certification
We have obtained the NSF/ANSI-60 certification for HI-LITE® (trichloroisocyanuric acid, dichloroisocyanuric acid), which ismanufactured at our Toyama Plant.
NSF/ANSI-60 is a standard for chemicals that are intentionally added to drinking water. It is a standard under which certification is
granted by the NSF International of the United States. NSF International was established to create standards and requirements formaintaining good hygiene in places such as kitchens in the restaurant industry. NSF/ANSI-60 has been expanding globally and is
widely recognized all over the world as well as in the United States. The acquisition of NSF/ANSI-60 certification is essential for
supplying HI-LITE® to manufacturers of antimicrobials to prevent epidemics that may be caused by drinking water in areas withpoor hygiene control. It is believed that acquiring this certification will develop a new market of antimicrobials for drinking water, in
addition to markets of antimicrobials for swimming pools, SPA, and water-purifier tanks for which they were mainly used.
We will continue to make further improvements together with our plants to provide customers with safer products that offer ahigher level of quality.
＊NSF is an independent international organization involved in the development of standards, product certifications, tests, audits, educations, and the provision of risk management services related to public health and the environment.
The NSF certification mark on a product signifies that the product complies with all standard requirements. NSF periodically conducts unannounced inspections and product testing to verify that the product continues to comply with the standard.

Nissan Chemical Industries, Ltd. Annual Report 201642

With Stakeholders

Relationships with Customers
Quality Policy and Quality Targets

Quality Assurance Activities

Our quality policy is providing products and services that satisfy customers. Under this policy, we set mid-term quality targets and implement yearly schedules alongwith the PDCA cycle in an ongoing effort to improve our management system and operations every year.
Moving forward, we will continue to improve our capability of meeting market needs that are becoming more diverse and complex. We will thereby develop
ourselves further as a company that contributes to society.

By applying quality management system such as ISO9001, we conduct quality assurance activities that respond to laws, regulations and customer demands
throughout product’s lifecycle from development, commercialization to the use of customers.
We have a corporate network that makes us promptly collect customer opinions concerning products (complaints, product liability accident information, etc.),
evaluate them and take corrective actions if necessary.

Quality Assurance Activities at Each Stage

PDCA in Quality Assurance
Providing products and services
that satisfy customers●●

Customer demands

PLAN

Quality Targets (for Achieving the Quality Policy)●

Customer opinions concerning products (complaints, product liability accident information, etc.)

Quality Assurance Committee
Report, annual plandevelopment

Quality Policy

ACT

Quality assurance in all processes, from design and development toproduction, shipment, distribution, and delivery

Annual report(performance results)
Corrective actions

Taking corrective and preventive measures to address quality
abnormalities and problems
Strengthening supply chain management linked to business strategies

Operationof Quality
Assurance

Implement inaccordancewith annual plan

Business division(Planning Department)

CEO and President (General director for QM)
Management Meeting
Management Review
Quality Assurance Committee
Chairman: Head of Environment, Safety and Quality Assurance Depertment

Nissan Chemical Industries, Ltd. Annual Report 2016

Customer satisfaction

Plant

Scale-up
Practical use

Performance Materials

Acceptance of raw materials

Board Meeting

41

Production

Shipping

Chemicals

CHECK

Our quality assurance system is based on quality ISO at each plant. The system is held in high regard by our customers because it allows for the provision ofhigh-quality products and services in Japan and other countries.
We have set up a Quality Assurance Committee that promotes quality assurance activities. It is chaired by the head of the Environment, Safety & Quality Assurance
Department, and consists of the officer in charge of the Environment, Safety & Quality Assurance Department and the heads of Production Technology Department,
Purchasing Department, all the business departments, and all the offices. The committee meets regularly every year.
The matters reported during the committee meeting are the results of activities, audits, improvements made in response to audit results, information aboutcomplaints, and improvements made in response to the complaints at Nissan Chemical and affiliates in the fiscal year under review. The members also discuss
action policies related to quality assurance and other items for the following fiscal year. The results of the discussions are reported at the management meeting andsubject to management review before the quality targets for the following fiscal year are determined.
In addition, all of our plants have obtained certification under ISO9001 (QMS), an international standard on quality management system. They each maintain andupdate the certificate through the certifying body.

Business Divisions

Technology transfer

Production

Direction for use
Production method
Analysis method
Technology transfer

Nissan Chemical Quality Management System

Laboratories

Laboratory

DO

Activity report/ Internal audit

Plants

Product development

Group Companies

PassedProduct realization
Production control●Quality control●

PassedAgricultural Chemicals●

We produce products in accordance with ISO9001:2008, the international standard of quality management, besides we produce pharmaceuticals under thequality assurance system that meets the pharmaceutical Good Manufacturing Practice(GMP), standards for manufacturing control and quality control of drugs.

Pharmaceuticals

Ｔ Ｏ ＰＩＣ Ｓ

Acquisition of NSF/ANSI-60＊ Certification
We have obtained the NSF/ANSI-60 certification for HI-LITE® (trichloroisocyanuric acid, dichloroisocyanuric acid), which ismanufactured at our Toyama Plant.
NSF/ANSI-60 is a standard for chemicals that are intentionally added to drinking water. It is a standard under which certification is
granted by the NSF International of the United States. NSF International was established to create standards and requirements formaintaining good hygiene in places such as kitchens in the restaurant industry. NSF/ANSI-60 has been expanding globally and is
widely recognized all over the world as well as in the United States. The acquisition of NSF/ANSI-60 certification is essential for
supplying HI-LITE® to manufacturers of antimicrobials to prevent epidemics that may be caused by drinking water in areas withpoor hygiene control. It is believed that acquiring this certification will develop a new market of antimicrobials for drinking water, in
addition to markets of antimicrobials for swimming pools, SPA, and water-purifier tanks for which they were mainly used.
We will continue to make further improvements together with our plants to provide customers with safer products that offer ahigher level of quality.
＊NSF is an independent international organization involved in the development of standards, product certifications, tests, audits, educations, and the provision of risk management services related to public health and the environment.
The NSF certification mark on a product signifies that the product complies with all standard requirements. NSF periodically conducts unannounced inspections and product testing to verify that the product continues to comply with the standard.

Nissan Chemical Industries, Ltd. Annual Report 201642

With Stakeholders

Relationships with Employees
In the mid-term business plan “Vista2021,” transforming into an organization where excellent challengers are fostered and utilizing theideas of diverse range of individuals are described as the way our group should be. To bring these situations about, we intend to tackle arange of initiatives, such as the exchange of personnel between departments and the promotion of diversity. Also we will continue tointroduce systems for creating pleasant work environments. In FY2015, we provided the Self-Care Training to all employees as a mental
health measure. We will continue these initiatives in our efforts to ensure the sustainable growth of our employees and the company.

Fair Personnel Evaluation
Our personnel system is a structure that, through the interactive communication (dialogue) with their superiors, staff as an independent individual can work vibrantlywith high motivation, utilizing their creativity while feeling their own growth toward the ideal picture of who they want to be. We strive to improve the transparency
and persuasiveness of our personnel evaluation to make it fair, and ensure that it better reflects the achievements and contributions of employees.

Respect for Diversity, Personal Characteristics and Belief of Individuals
At Nissan Chemical, a diverse range of individuals have been actively contributing to the group with their excellent talents in a wide range of fields irrespective ofage, gender, and nationality. We intend to continue to promote the diversity of individuals. One thing that we are proud of is our high employee retention rate. We
believe that our workplace environment allows each individual employee to play an active part.

Training ProgramsContent

Name
New Employee Training

Trainees learn the importance of thinking and acting on their own as the first step fordeveloping their careers.

Training for Employees in the
Third Year after Entering Company

Trainees learn the importance of motivating themselves and how to remain highly motivated tocontinue tackling challenges.

Pre-Promotion Training

This training is aimed at improving the essential capabilities for setting agendas and formulating strategies. Trainees are made aware of
their roles and obligations as leaders who are responsible for the next generation, and formulate action plans for achieving visions.

Training for Improving
On-Site Capabilities

This training is aimed at improving the communication abilities of trainees. Trainees talk about the issues
they faced at work sites, and seek solutions for these issues together in order to obtain the insight they need.

Studying Overseas

This program is aimed at developing and securing individuals who can create new value and operate businesses globally. Trainees
are sent to overseas language schools to help accelerate process of making individuals in the company more globally-minded.

Evaluator Training

Trainees confirm the content of evaluation and learn the basics of personnel evaluation,
methods for competency evaluation and communication methods.

Coaching Skills Training

Trainees acquire communication skills for encouraging people to act on their own.

Business Improvement
Training

This training is aimed at clarifying the scope of business assignments, clarifying roles,
improving communication skills and the capacity to control motivation.

Correspondence
CourseThis is a tool for helping each employee formulate their career plan with a vision and working
towards self-actualization.

Strategic OJTSuperiors provide OJT face-to-face with their subordinates, aiming to create an organization that develops individuals and where
people develop themselves. This training aims to improve the ability to develop individuals and ability to handle businesses.

Human Resource Development
We believe that the essence of human resource development lies in having each individual employee continue to improve themselves aiming to have a further
personal growth. Based on this belief, we have introduced training programs intended for employees who desire to learn new things and develop as individuals.

Awards Program

Creation of Comfortable Workplace

Every year we grant awards to employees who have made beneficial inventions, devised improvement measures,or made remarkable achievements and contributions. Regarding intellectual properties, we also reward excellent
inventions selected from among patent-pending inventions at an early stage in an effort to create greater incentive
for R&D, discover excellent inventions and improve upon their quality and creativity.

We have introduced a wide variety of systems that enable employees to work in a highly productive manner and achieve a good work-life balance. In recent years
we have maintained a high rate of paid-leave use of more than 70%. In addition, we implement No Overtime Day and other measures to raise employee awarenesstoward work efficiency and help create a comfortable workplace.

Labor-Management Relationship Based on Open Dialogue and Mutual Understanding
Nissan Chemical and the Nissan Chemical Labor Union have built a good relationship based on mutual understanding and trust.
They strive to improve labor conditions as good partners to the management by taking various measures, such as holding
periodic meetings for reporting business results and initiatives for better work-life balance. In FY2015, a meeting for exchanging
opinions about employees’ health problems with the health insurance union also began to be held on a regular basis.

Presenter
President and CEO
Head of each division
Head of each office
Officer in charge of Intellectual
Property Department

Coaching Skills Training

Content
Commend employees who have made beneficial inventions,devised improvement measures, or made remarkableachievements and contributions
Reward excellent inventions at an early stage to promote theimprovement of R&D capabilities

Central Awards presentation ceremony

Systems for Promoting a Good Work-Life Balance
Name

Content

Flextime

This system has been introduced at the head office and laboratories.

Childcare Leave

Self-Care Training for Mental Health

Paternity Leave

If certain requirements are fulfilled, an employee may take childcare leave until their child is 1.5 years old or until the first April 20
after the child’s first birthday.
A male employee whose spouse gave birth to a child may take up to 7 days of paternity leave (paid leave) within 8 weeks of the child’s birth.

Nursing Care Leave

An employee may use up to 20 days per year of annual leave which has been saved up for childcare or spousal care and which is no longer valid.

Self-care refers to the actions that individuals take to maintain and improve their health on their own. We support the self-careof employees by providing training which helps them acquire basic knowledge about stress and learn skills for coping withstress. During the training, employees reflect on their own stressful experiences and learn how to change the ways they thinking
or perceive things in order to cope with stress appropriately.

Shorter Working Hours

Specified working hours may be shortened by units of 30 minutes and by up to 120 minutes for looking after children in third grade (elementary school) or younger.

Half-day Leave

An employee may take annual leave by units of half days, with an upper limit of 30 times per year.

Planned Leave

We recommend that 2 days of company-wide planned leave and 3 days of individually planned leave be taken every year.

A corporate officer explains new business plans at the union meeting

Nissan Chemical Industries, Ltd. Annual Report 2016

Refreshment Leave

An employee may save up a maximum of 40 days of annual leave that are invalid and use them as medical leave, leave for their own
sickness, leave to conduct a complete medical checkup, leave to look after elderly or sick family members, or for other similar purposes.
An employee may take 10 consecutive days of leave (paid leave) within 1 year after becoming 50 years old. Financial aid is also granted.

Re-employment Refreshment Leave

An employee may take 3 consecutive days of leave (paid leave) within 1 month before or after their mandatory retirement.

Annual Leave Accumulation

Self-Care Training

43

Name
Central Awards
Division Awards
Office Awards
Rewards for Excellent
Inventions

Pre-Promotion Training

Nissan Chemical Industries, Ltd. Annual Report 201644

With Stakeholders

Relationships with Employees
In the mid-term business plan “Vista2021,” transforming into an organization where excellent challengers are fostered and utilizing theideas of diverse range of individuals are described as the way our group should be. To bring these situations about, we intend to tackle arange of initiatives, such as the exchange of personnel between departments and the promotion of diversity. Also we will continue tointroduce systems for creating pleasant work environments. In FY2015, we provided the Self-Care Training to all employees as a mental
health measure. We will continue these initiatives in our efforts to ensure the sustainable growth of our employees and the company.

Fair Personnel Evaluation
Our personnel system is a structure that, through the interactive communication (dialogue) with their superiors, staff as an independent individual can work vibrantlywith high motivation, utilizing their creativity while feeling their own growth toward the ideal picture of who they want to be. We strive to improve the transparency
and persuasiveness of our personnel evaluation to make it fair, and ensure that it better reflects the achievements and contributions of employees.

Respect for Diversity, Personal Characteristics and Belief of Individuals
At Nissan Chemical, a diverse range of individuals have been actively contributing to the group with their excellent talents in a wide range of fields irrespective ofage, gender, and nationality. We intend to continue to promote the diversity of individuals. One thing that we are proud of is our high employee retention rate. We
believe that our workplace environment allows each individual employee to play an active part.

Training ProgramsContent

Name
New Employee Training

Trainees learn the importance of thinking and acting on their own as the first step fordeveloping their careers.

Training for Employees in the
Third Year after Entering Company

Trainees learn the importance of motivating themselves and how to remain highly motivated tocontinue tackling challenges.

Pre-Promotion Training

This training is aimed at improving the essential capabilities for setting agendas and formulating strategies. Trainees are made aware of
their roles and obligations as leaders who are responsible for the next generation, and formulate action plans for achieving visions.

Training for Improving
On-Site Capabilities

This training is aimed at improving the communication abilities of trainees. Trainees talk about the issues
they faced at work sites, and seek solutions for these issues together in order to obtain the insight they need.

Studying Overseas

This program is aimed at developing and securing individuals who can create new value and operate businesses globally. Trainees
are sent to overseas language schools to help accelerate process of making individuals in the company more globally-minded.

Evaluator Training

Trainees confirm the content of evaluation and learn the basics of personnel evaluation,
methods for competency evaluation and communication methods.

Coaching Skills Training

Trainees acquire communication skills for encouraging people to act on their own.

Business Improvement
Training

This training is aimed at clarifying the scope of business assignments, clarifying roles,
improving communication skills and the capacity to control motivation.

Correspondence
CourseThis is a tool for helping each employee formulate their career plan with a vision and working
towards self-actualization.

Strategic OJTSuperiors provide OJT face-to-face with their subordinates, aiming to create an organization that develops individuals and where
people develop themselves. This training aims to improve the ability to develop individuals and ability to handle businesses.

Human Resource Development
We believe that the essence of human resource development lies in having each individual employee continue to improve themselves aiming to have a further
personal growth. Based on this belief, we have introduced training programs intended for employees who desire to learn new things and develop as individuals.

Awards Program

Creation of Comfortable Workplace

Every year we grant awards to employees who have made beneficial inventions, devised improvement measures,or made remarkable achievements and contributions. Regarding intellectual properties, we also reward excellent
inventions selected from among patent-pending inventions at an early stage in an effort to create greater incentive
for R&D, discover excellent inventions and improve upon their quality and creativity.

We have introduced a wide variety of systems that enable employees to work in a highly productive manner and achieve a good work-life balance. In recent years
we have maintained a high rate of paid-leave use of more than 70%. In addition, we implement No Overtime Day and other measures to raise employee awarenesstoward work efficiency and help create a comfortable workplace.

Labor-Management Relationship Based on Open Dialogue and Mutual Understanding
Nissan Chemical and the Nissan Chemical Labor Union have built a good relationship based on mutual understanding and trust.
They strive to improve labor conditions as good partners to the management by taking various measures, such as holding
periodic meetings for reporting business results and initiatives for better work-life balance. In FY2015, a meeting for exchanging
opinions about employees’ health problems with the health insurance union also began to be held on a regular basis.

Presenter
President and CEO
Head of each division
Head of each office
Officer in charge of Intellectual
Property Department

Coaching Skills Training

Content
Commend employees who have made beneficial inventions,devised improvement measures, or made remarkableachievements and contributions
Reward excellent inventions at an early stage to promote theimprovement of R&D capabilities

Central Awards presentation ceremony

Systems for Promoting a Good Work-Life Balance
Name

Content

Flextime

This system has been introduced at the head office and laboratories.

Childcare Leave

Self-Care Training for Mental Health

Paternity Leave

If certain requirements are fulfilled, an employee may take childcare leave until their child is 1.5 years old or until the first April 20
after the child’s first birthday.
A male employee whose spouse gave birth to a child may take up to 7 days of paternity leave (paid leave) within 8 weeks of the child’s birth.

Nursing Care Leave

An employee may use up to 20 days per year of annual leave which has been saved up for childcare or spousal care and which is no longer valid.

Self-care refers to the actions that individuals take to maintain and improve their health on their own. We support the self-careof employees by providing training which helps them acquire basic knowledge about stress and learn skills for coping withstress. During the training, employees reflect on their own stressful experiences and learn how to change the ways they thinking
or perceive things in order to cope with stress appropriately.

Shorter Working Hours

Specified working hours may be shortened by units of 30 minutes and by up to 120 minutes for looking after children in third grade (elementary school) or younger.

Half-day Leave

An employee may take annual leave by units of half days, with an upper limit of 30 times per year.

Planned Leave

We recommend that 2 days of company-wide planned leave and 3 days of individually planned leave be taken every year.

A corporate officer explains new business plans at the union meeting

Nissan Chemical Industries, Ltd. Annual Report 2016

Refreshment Leave

An employee may save up a maximum of 40 days of annual leave that are invalid and use them as medical leave, leave for their own
sickness, leave to conduct a complete medical checkup, leave to look after elderly or sick family members, or for other similar purposes.
An employee may take 10 consecutive days of leave (paid leave) within 1 year after becoming 50 years old. Financial aid is also granted.

Re-employment Refreshment Leave

An employee may take 3 consecutive days of leave (paid leave) within 1 month before or after their mandatory retirement.

Annual Leave Accumulation

Self-Care Training

43

Name
Central Awards
Division Awards
Office Awards
Rewards for Excellent
Inventions

Pre-Promotion Training

Nissan Chemical Industries, Ltd. Annual Report 201644

With Stakeholders

Relationships with Society

Information Disclosure

We recognize that bringing about a sustainable society is essential for the growth and development of companies. As acorporate citizen, we engage in various social contribution activities through our products and services, and provide newvalues for helping to enrich people’s lives.

We have formulated a Disclosure Policy and disclose information in accordance with the rules on timely disclosure established by the Tokyo Stock Exchange, Inc., onwhich our shares are listed. In addition, we endeavor to disclose company information other than that which is required under the aforementioned rules on timely
disclosure, including presentation materials used in company briefing sessions, as proactively and impartially as possible on our website and through other media outlets.

Support for the Next Generation

Timely Disclosure System

In FY2015, we became involved with Tobitate! (Leap for Tomorrow) Young Ambassador Program, a joint government-industry project for supporting students whowish to study overseas. This program is aimed at fostering the individuals society seeks, mainly in the industrial world, and globally competitive individuals who will
demonstrate their capabilities on the world stage in the future. Japanese companies make donations
and regularly cooperate with the selection of students and other processes as judges to send high school
and university students, who are the potential future leaders of Japan, to various parts of the world.
Through this project, we will continue to contribute to the development of Japanese industry.
In addition, Chemical Research Laboratories and Materials Research Laboratories send their staff members to local elementary
schools to give special classes aimed at supporting science education. In FY2015, they visited three schools in the period from
November to January. Hoping to raise children’s interest in chemistry, they selected familiar themes and conducted two
experiments, “Dry ice magic” and “Let’s make micro-capsules.”Welfare FundWe have been engaged in welfare fund activities since 1997 as a part of our activities for contributing to local
communities. Employees save a certain amount of money from their monthly salaries, to which an equal amountof money is added by the company. The money collected this way is used to support the welfare of local
communities.
These activities are carried out individually at the head office and individual offices, plants, laboratories, andgroup companies. They are also conducted as joint projects. There are cases where staff members visit welfare
facilities and ask them what items they need before considering what to donate. Overall, the activities are carriedout in a community-based manner.

Delivery class

Received a certificate of appreciation

To support the development of synthetic organic chemistry, we established the Nissan Chemical Industries Award for Novel Reaction & Method in FY2009 as anaward presented by the Society of Synthetic Organic Chemistry, Japan. This award is granted to researchers who have made creative, excellent achievements inresearch related to novel reactions and methods. The research by research associate professor Yoshiaki Nishibayashi of the University of Tokyo, who is the FY2015
recipient of the award, is highly acclaimed in Japan and other countries as a creative research that will have an impact not only on organic synthetic chemistry, butalso related fields such as metalorganic chemistry, complex chemistry and catalytic chemistry.

Interaction with Local Residents

45

Nissan Chemical Industries, Ltd. Annual Report 2016

Board Meeting
President and CEO
Management Meeting

Tokyo Stock Exchange

Financial Results
Information

Head of Finance &Accounting Department

Judgment of necessity of timely disclosure

Head of Corporate
Planning Department(Chief Information Officer)

Head of Each
Division
Information that may
apply to facts
decided or occurredGroup Companies

IR Briefing Meeting

Industry Awards

We hold plant tours and explanatory meetings on a regular basis for local residents and schools. During thesemeetings we explain our initiatives for disaster prevention and environmental protection in an effort to show themthat the plants are safe and secure. We also participate in local beautification activities such as cleaning of
public roads around the plants and nearby stations, and activities for planting flowers together with local
residents. The Biological Research Laboratories hold the Harvest Festival and Memorial Service for Living
Organisms in November every year. This event is for paying respects to insects and laboratory animals thatwere sacrificed in the research and development of agrochemicals and pharmaceuticals. We invite local
residents to this event to make it an opportunity so that they can better understand what kind of facility the
Biological Research Laboratories is.

We promptly publish information that is required under theabove rules on timely disclosure by means of the Timely
Disclosure Network (TDnet) provided by Tokyo Stock
Exchange, Inc., as well as on our website.

We hold an IR briefing meeting for institutional investors, analysts, and the media every half year to explain the overall conditions of our business. This meeting is
attended by the officer in charge of IR and the managers responsible from individual divisions. We also hold tours of our facilities for institutional investors andanalysts as needed so that they can see our work sites in person and better understand our production and research.
In addition, every year the officer in charge of IR visits overseas investors and participates in conferences in Japan and other countries hosted by securities
companies.In FY2015, the officer visited Europe, the United States, and Asian countries, and our positive attitude towards overseas IR activities was highly
regarded.
We publish news releases, financial results, and materials for briefing sessions in Japanese and English, in principle, aiming to disclose information more promptly andfairly to investors in Japan and overseas.

Disclosure of Product SDS
To ensure our chemical products are used safely, we provide customers with safety data sheets (SDSs) of
all products. Customers and users can download the SDSs for all agrochemicals from our website. Our
employees can obtain product information, including information about their risks and hazards, laws andregulations, transportation, storage, and methods of disposal, from our internal SDS database.

Disclosure of GPS / JIPS Safety Summaries

A tour of the Biological Research Laboratories

We participate in the Global Product Strategy (GPS) / Japan Initiative of Product Stewardship (JIPS)
activities that are promoted by the International Council of Chemical Associations (ICCA) and the Japan
Chemical Industry Association (JCIA). In these activities, companies assess the risk of chemical products,
manage them properly, compile their safety information in the GPS / JIPS Safety Summary, and make itavailable to the public, including their customers. The disclosure of this information helps to minimize therisks of chemical substances throughout the entire supply chain.

Nissan Chemical Industries, Ltd. Annual Report 201646

With Stakeholders

Relationships with Society

Information Disclosure

We recognize that bringing about a sustainable society is essential for the growth and development of companies. As acorporate citizen, we engage in various social contribution activities through our products and services, and provide newvalues for helping to enrich people’s lives.

We have formulated a Disclosure Policy and disclose information in accordance with the rules on timely disclosure established by the Tokyo Stock Exchange, Inc., onwhich our shares are listed. In addition, we endeavor to disclose company information other than that which is required under the aforementioned rules on timely
disclosure, including presentation materials used in company briefing sessions, as proactively and impartially as possible on our website and through other media outlets.

Support for the Next Generation

Timely Disclosure System

In FY2015, we became involved with Tobitate! (Leap for Tomorrow) Young Ambassador Program, a joint government-industry project for supporting students whowish to study overseas. This program is aimed at fostering the individuals society seeks, mainly in the industrial world, and globally competitive individuals who will
demonstrate their capabilities on the world stage in the future. Japanese companies make donations
and regularly cooperate with the selection of students and other processes as judges to send high school
and university students, who are the potential future leaders of Japan, to various parts of the world.
Through this project, we will continue to contribute to the development of Japanese industry.
In addition, Chemical Research Laboratories and Materials Research Laboratories send their staff members to local elementary
schools to give special classes aimed at supporting science education. In FY2015, they visited three schools in the period from
November to January. Hoping to raise children’s interest in chemistry, they selected familiar themes and conducted two
experiments, “Dry ice magic” and “Let’s make micro-capsules.”Welfare FundWe have been engaged in welfare fund activities since 1997 as a part of our activities for contributing to local
communities. Employees save a certain amount of money from their monthly salaries, to which an equal amountof money is added by the company. The money collected this way is used to support the welfare of local
communities.
These activities are carried out individually at the head office and individual offices, plants, laboratories, andgroup companies. They are also conducted as joint projects. There are cases where staff members visit welfare
facilities and ask them what items they need before considering what to donate. Overall, the activities are carriedout in a community-based manner.

Delivery class

Received a certificate of appreciation

To support the development of synthetic organic chemistry, we established the Nissan Chemical Industries Award for Novel Reaction & Method in FY2009 as anaward presented by the Society of Synthetic Organic Chemistry, Japan. This award is granted to researchers who have made creative, excellent achievements inresearch related to novel reactions and methods. The research by research associate professor Yoshiaki Nishibayashi of the University of Tokyo, who is the FY2015
recipient of the award, is highly acclaimed in Japan and other countries as a creative research that will have an impact not only on organic synthetic chemistry, butalso related fields such as metalorganic chemistry, complex chemistry and catalytic chemistry.

Interaction with Local Residents

45

Nissan Chemical Industries, Ltd. Annual Report 2016

Board Meeting
President and CEO
Management Meeting

Tokyo Stock Exchange

Financial Results
Information

Head of Finance &Accounting Department

Judgment of necessity of timely disclosure

Head of Corporate
Planning Department(Chief Information Officer)

Head of Each
Division
Information that may
apply to facts
decided or occurredGroup Companies

IR Briefing Meeting

Industry Awards

We hold plant tours and explanatory meetings on a regular basis for local residents and schools. During thesemeetings we explain our initiatives for disaster prevention and environmental protection in an effort to show themthat the plants are safe and secure. We also participate in local beautification activities such as cleaning of
public roads around the plants and nearby stations, and activities for planting flowers together with local
residents. The Biological Research Laboratories hold the Harvest Festival and Memorial Service for Living
Organisms in November every year. This event is for paying respects to insects and laboratory animals thatwere sacrificed in the research and development of agrochemicals and pharmaceuticals. We invite local
residents to this event to make it an opportunity so that they can better understand what kind of facility the
Biological Research Laboratories is.

We promptly publish information that is required under theabove rules on timely disclosure by means of the Timely
Disclosure Network (TDnet) provided by Tokyo Stock
Exchange, Inc., as well as on our website.

We hold an IR briefing meeting for institutional investors, analysts, and the media every half year to explain the overall conditions of our business. This meeting is
attended by the officer in charge of IR and the managers responsible from individual divisions. We also hold tours of our facilities for institutional investors andanalysts as needed so that they can see our work sites in person and better understand our production and research.
In addition, every year the officer in charge of IR visits overseas investors and participates in conferences in Japan and other countries hosted by securities
companies.In FY2015, the officer visited Europe, the United States, and Asian countries, and our positive attitude towards overseas IR activities was highly
regarded.
We publish news releases, financial results, and materials for briefing sessions in Japanese and English, in principle, aiming to disclose information more promptly andfairly to investors in Japan and overseas.

Disclosure of Product SDS
To ensure our chemical products are used safely, we provide customers with safety data sheets (SDSs) of
all products. Customers and users can download the SDSs for all agrochemicals from our website. Our
employees can obtain product information, including information about their risks and hazards, laws andregulations, transportation, storage, and methods of disposal, from our internal SDS database.

Disclosure of GPS / JIPS Safety Summaries

A tour of the Biological Research Laboratories

We participate in the Global Product Strategy (GPS) / Japan Initiative of Product Stewardship (JIPS)
activities that are promoted by the International Council of Chemical Associations (ICCA) and the Japan
Chemical Industry Association (JCIA). In these activities, companies assess the risk of chemical products,
manage them properly, compile their safety information in the GPS / JIPS Safety Summary, and make itavailable to the public, including their customers. The disclosure of this information helps to minimize therisks of chemical substances throughout the entire supply chain.

Nissan Chemical Industries, Ltd. Annual Report 201646

Financial Section
Financial Review

Financial Review of the Year Ended March 31, 2016

Overview

Operating Results

71,244 million yen (a decrease of 1,346 million yen).

With the purchase of treasury shares, cash dividends paid and

The domestic economy slowly recovered in the year ended March 31,

As a result of previously mentioned factors, the sales for this period

Net assets as of March 31, 2016 were 156,924 million yen (anrepayment of long- term loans payable, net cash used in financing

2016 (from April 1, 2015 to March 31, 2016). However, lower individual

was 176,894 million yen (an increase of 5,688 million yen from theincrease of 5,660 million yen).

activities for the year ended March 31, 2016 was 17,317 million yen

consumption, the stagnation of economic growth in China, and thesame period of the previous year). Operating income was 28,606

As a result of these factors, equity ratio was 68.1%, represent-ing(12,127 million yen).

economic slowdown in emerging countries threaten the future of themillion yen (an increase of 3,258 million yen), and ordinary income wasan increase of 1.2% from the previous year.

As a result of these factors, cash and cash equivalents at the end of

global economy.

29,531 million yen (an increase of 3,140 million yen). Net income

In our group business, the profitability of Chemicals Segment

attributable to owners of parent was 22,350 million yen (an increase of

Position of Cash Flowyen effect of exchange rate changes and the 61 million yen increase

improved, driven by the lower prices of raw fuels, but there was4,151 million yen).

Net cash provided by operating activities for the year ended March 31,

from newly consolidated subsidiaries (31,343 million yen). Therefore,

2016 was 29,989 million yen (20,452 million yen for the previous year)

cash and cash equivalents at the end of this period increased 3,992
million yen when compared to the previous year.

also a decrease in domestic demand. In the Performance
Materials Segment, display materials have continued to grow due

Financial Position

after deducting income taxes paid from income before income taxes

in large part to products for smartphones. In the Agricultural

Due to the increase of cash and deposits, assets as of March 31, 2016

and non-controlling interests, depreciation, and gain and loss on

Chemicals Segment, both herbicides and Fluralaner both helped

were 228,169 million yen (an increase of 4,314 million yen from theworking capital.

to boost profit, while in the Pharmaceutical Segment, the domestic

previous year).

Due to the investment on plant and equipment, net cash used insales of “LIVALO” (anti-cholesterol drug) were adversely affected

While income taxes payable increased due to the decrease ininvesting activities for the year ended March 31, 2016 was 8,416

by generic medicines.

long-term loans payable, total liabilities as of March 31, 2016 weremillion yen (8,076 million yen).

Operating Income (Millions of Yen)
30,00028,60625,34725,00022,24615,000Net Income per Share (Yen)

Total Assets (Millions of Yen)

160

250,000

200,000

113.99

83.74

80

64.52
60

10,000190,113207,999
199,243

150,000

0

Nissan Chemical Industries, Ltd. Annual Report 2016

68.1

50

12,000

44
40

36

30

100,000

100

FY2011 FY2012 FY2013 FY2014 FY2015

010,45910,245
9,796
9,684
9,544
8,786
9,000
8,515 8,452
8,251 8,085

30

30

26

6,000

20

20

FY2011 FY2012 FY2013 FY2014 FY2015

66.9

24

20
0

65.7

60

50,000FY2011 FY2012 FY2013 FY2014 FY2015

63.0

40

40
5,000

62.4

Capital Expenditures
Depreciation Expense (Millions of Yen)

Dividends per Share (Yen)50

102.11100

15,477

223,854 228,169

143.37120

Equity Ratio (%)
Return on Equity (%)
70

140

19,54820,00047

this term were 35,335 million yen, reflecting the negative 324 million

9.5

11.4

12.7

12.7

14.6

FY2011 FY2012 FY2013 FY2014 FY2015

3,000
10

0

FY2011 FY2012 FY2013 FY2014 FY2015

0

FY2011 FY2012 FY2013 FY2014 FY2015

Nissan Chemical Industries, Ltd. Annual Report 201648

Financial Section
Financial Review

Financial Review of the Year Ended March 31, 2016

Overview

Operating Results

71,244 million yen (a decrease of 1,346 million yen).

With the purchase of treasury shares, cash dividends paid and

The domestic economy slowly recovered in the year ended March 31,

As a result of previously mentioned factors, the sales for this period

Net assets as of March 31, 2016 were 156,924 million yen (anrepayment of long- term loans payable, net cash used in financing

2016 (from April 1, 2015 to March 31, 2016). However, lower individual

was 176,894 million yen (an increase of 5,688 million yen from theincrease of 5,660 million yen).

activities for the year ended March 31, 2016 was 17,317 million yen

consumption, the stagnation of economic growth in China, and thesame period of the previous year). Operating income was 28,606

As a result of these factors, equity ratio was 68.1%, represent-ing(12,127 million yen).

economic slowdown in emerging countries threaten the future of themillion yen (an increase of 3,258 million yen), and ordinary income wasan increase of 1.2% from the previous year.

As a result of these factors, cash and cash equivalents at the end of

global economy.

29,531 million yen (an increase of 3,140 million yen). Net income

In our group business, the profitability of Chemicals Segment

attributable to owners of parent was 22,350 million yen (an increase of

Position of Cash Flowyen effect of exchange rate changes and the 61 million yen increase

improved, driven by the lower prices of raw fuels, but there was4,151 million yen).

Net cash provided by operating activities for the year ended March 31,

from newly consolidated subsidiaries (31,343 million yen). Therefore,

2016 was 29,989 million yen (20,452 million yen for the previous year)

cash and cash equivalents at the end of this period increased 3,992
million yen when compared to the previous year.

also a decrease in domestic demand. In the Performance
Materials Segment, display materials have continued to grow due

Financial Position

after deducting income taxes paid from income before income taxes

in large part to products for smartphones. In the Agricultural

Due to the increase of cash and deposits, assets as of March 31, 2016

and non-controlling interests, depreciation, and gain and loss on

Chemicals Segment, both herbicides and Fluralaner both helped

were 228,169 million yen (an increase of 4,314 million yen from theworking capital.

to boost profit, while in the Pharmaceutical Segment, the domestic

previous year).

Due to the investment on plant and equipment, net cash used insales of “LIVALO” (anti-cholesterol drug) were adversely affected

While income taxes payable increased due to the decrease ininvesting activities for the year ended March 31, 2016 was 8,416

by generic medicines.

long-term loans payable, total liabilities as of March 31, 2016 weremillion yen (8,076 million yen).

Operating Income (Millions of Yen)
30,00028,60625,34725,00022,24615,000Net Income per Share (Yen)

Total Assets (Millions of Yen)

160

250,000

200,000

113.99

83.74

80

64.52
60

10,000190,113207,999
199,243

150,000

0

Nissan Chemical Industries, Ltd. Annual Report 2016

68.1

50

12,000

44
40

36

30

100,000

100

FY2011 FY2012 FY2013 FY2014 FY2015

010,45910,245
9,796
9,684
9,544
8,786
9,000
8,515 8,452
8,251 8,085

30

30

26

6,000

20

20

FY2011 FY2012 FY2013 FY2014 FY2015

66.9

24

20
0

65.7

60

50,000FY2011 FY2012 FY2013 FY2014 FY2015

63.0

40

40
5,000

62.4

Capital Expenditures
Depreciation Expense (Millions of Yen)

Dividends per Share (Yen)50

102.11100

15,477

223,854 228,169

143.37120

Equity Ratio (%)
Return on Equity (%)
70

140

19,54820,00047

this term were 35,335 million yen, reflecting the negative 324 million

9.5

11.4

12.7

12.7

14.6

FY2011 FY2012 FY2013 FY2014 FY2015

3,000
10

0

FY2011 FY2012 FY2013 FY2014 FY2015

0

FY2011 FY2012 FY2013 FY2014 FY2015

Nissan Chemical Industries, Ltd. Annual Report 201648

Consolidated Balance Sheets
For FY2015 and FY2014(Thousands of
U.S. dollars)(Millions of Yen)

AssetsLiabilities

FY2015FY2014FY2015$ 313,559

Current assets

FY2015FY2014FY2015¥ 15,350¥ 15,077$ 136,214

Short-term loans payable

22,93822,951

203,550

Current portion of long-term loans payable

3,060

3,090

27,154Current liabilities¥ 35,335¥ 31,343

Notes and accounts receivable-trade57,606

58,133511,190

Merchandise and finished goods

30,19828,123267,974

43

59

382

Raw materials and supplies

8,266

7,885

73,352

Income taxes payable

4,576

3,807

40,607

Accounts receivable-other

4,726

2,097

41,938

Short-term loans receivable

1,039

841

9,220

Provision for bonuses

1,874

1,827

16,630

Deferred tax assets

2,968

3,102

26,338Provision for directors' bonuses

21

24

186

Other

2,030

1,890

18,014

Provision for environmental measures

350

315

3,106

(34)

(29)

(302)

Other

9,765

8,940

86,654142,181

133,448

1,261,700

Total current liabilities

57,93756,034514,127

Long-term loans payable

7,100

9,060

63,005

Cash and deposits

Work in process

Allowance for doubtful accounts
Total current assets
Non-current assets

Notes and accounts payable-tradeNon-current liabilities

Property, plant and equipment
59,662

58,217529,435

Accumulated depreciation and impairment loss

(37,027)(35,514)(328,574)

Deferred tax liabilities

3,095

4,621

27,465

Buildings and structures, net

22,63522,702200,861

Provision for business structure improvement

680

704

6,034

Provision for loss on business of subsidiaries and associates

309

-

2,742

Net defined benefit liability

102

174

905

Buildings and structures

116,267

114,888

1,031,742(107,181)(104,548)(951,114)

9,086

10,33980,62833,82830,704300,186

Other

2,020

1,997

17,925(28,819)(26,876)(255,737)

Total non-current liabilities

13,307

16,556

118,085

5,008

3,828

44,441

9,195

9,318

81,596

71,244

72,590632,212

116

225

1,029

Accumulated depreciation

(87)

(150)

(772)

Leased assets, net

28

74

248

Shareholders' equity
Capital stock

18,942

18,942

168,089

Capital surplus

13,611

13,611

120,783

Retained earnings

115,878

105,6021,028,290

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

Total liabilities

Net assets

Construction in progress

1,506

864

13,364

Total property, plant and equipment

47,461

47,128421,164

Goodwill

2

418

Software

476

308

4,224

Treasury shares(4,281)(584)(37,989)

Other

424

361

3,763

Total Shareholders' equity

144,151

137,572

1,279,182

Total intangible assets

903

674

8,013

Investment securities

33,251

38,711

295,066

10,515

10,67693,309Deferred tax assets

99

52

879

Foreign currency translation adjustment

171

894

1,517

Net defined benefit asset

2,086

2,064

18,511Remeasurements of defined benefit plans

554

639

4,916

Other

2,354

1,962

20,889Allowance for doubtful accounts

(167)

(187)

(1,482)

Total Accumulated other comprehensive income

11,241

12,21099,752

Total investments and other assets

37,62342,603

333,863

1,531

1,481

13,58685,98890,406

763,049

Total net assets

156,924

151,263

1,392,528¥ 228,169¥ 223,854$ 2,024,749

Total liabilities and net aseets¥ 228,169¥ 223,854$ 2,024,749

Intangible assets

Investments and other assets

Total non-current assets
Total assets

49(Thousands of
U.S. dollars)(Millions of Yen)

Nissan Chemical Industries, Ltd. Annual Report 2016

Accumulated other comprehensive income
Valuation difference on available-for-sale securities

Non-controlling interests

Nissan Chemical Industries, Ltd. Annual Report 201650

Consolidated Balance Sheets
For FY2015 and FY2014(Thousands of
U.S. dollars)(Millions of Yen)

AssetsLiabilities

FY2015FY2014FY2015$ 313,559

Current assets

FY2015FY2014FY2015¥ 15,350¥ 15,077$ 136,214

Short-term loans payable

22,93822,951

203,550

Current portion of long-term loans payable

3,060

3,090

27,154Current liabilities¥ 35,335¥ 31,343

Notes and accounts receivable-trade57,606

58,133511,190

Merchandise and finished goods

30,19828,123267,974

43

59

382

Raw materials and supplies

8,266

7,885

73,352

Income taxes payable

4,576

3,807

40,607

Accounts receivable-other

4,726

2,097

41,938

Short-term loans receivable

1,039

841

9,220

Provision for bonuses

1,874

1,827

16,630

Deferred tax assets

2,968

3,102

26,338Provision for directors' bonuses

21

24

186

Other

2,030

1,890

18,014

Provision for environmental measures

350

315

3,106

(34)

(29)

(302)

Other

9,765

8,940

86,654142,181

133,448

1,261,700

Total current liabilities

57,93756,034514,127

Long-term loans payable

7,100

9,060

63,005

Cash and deposits

Work in process

Allowance for doubtful accounts
Total current assets
Non-current assets

Notes and accounts payable-tradeNon-current liabilities

Property, plant and equipment
59,662

58,217529,435

Accumulated depreciation and impairment loss

(37,027)(35,514)(328,574)

Deferred tax liabilities

3,095

4,621

27,465

Buildings and structures, net

22,63522,702200,861

Provision for business structure improvement

680

704

6,034

Provision for loss on business of subsidiaries and associates

309

-

2,742

Net defined benefit liability

102

174

905

Buildings and structures

116,267

114,888

1,031,742(107,181)(104,548)(951,114)

9,086

10,33980,62833,82830,704300,186

Other

2,020

1,997

17,925(28,819)(26,876)(255,737)

Total non-current liabilities

13,307

16,556

118,085

5,008

3,828

44,441

9,195

9,318

81,596

71,244

72,590632,212

116

225

1,029

Accumulated depreciation

(87)

(150)

(772)

Leased assets, net

28

74

248

Shareholders' equity
Capital stock

18,942

18,942

168,089

Capital surplus

13,611

13,611

120,783

Retained earnings

115,878

105,6021,028,290

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

Total liabilities

Net assets

Construction in progress

1,506

864

13,364

Total property, plant and equipment

47,461

47,128421,164

Goodwill

2

418

Software

476

308

4,224

Treasury shares(4,281)(584)(37,989)

Other

424

361

3,763

Total Shareholders' equity

144,151

137,572

1,279,182

Total intangible assets

903

674

8,013

Investment securities

33,251

38,711

295,066

10,515

10,67693,309Deferred tax assets

99

52

879

Foreign currency translation adjustment

171

894

1,517

Net defined benefit asset

2,086

2,064

18,511Remeasurements of defined benefit plans

554

639

4,916

Other

2,354

1,962

20,889Allowance for doubtful accounts

(167)

(187)

(1,482)

Total Accumulated other comprehensive income

11,241

12,21099,752

Total investments and other assets

37,62342,603

333,863

1,531

1,481

13,58685,98890,406

763,049

Total net assets

156,924

151,263

1,392,528¥ 228,169¥ 223,854$ 2,024,749

Total liabilities and net aseets¥ 228,169¥ 223,854$ 2,024,749

Intangible assets

Investments and other assets

Total non-current assets
Total assets

49(Thousands of
U.S. dollars)(Millions of Yen)

Nissan Chemical Industries, Ltd. Annual Report 2016

Accumulated other comprehensive income
Valuation difference on available-for-sale securities

Non-controlling interests

Nissan Chemical Industries, Ltd. Annual Report 201650

Consolidated Statements of Income
Consolidated Statements of Comprehensive Income

Consolidated Statements of Changes in Net Assets
For FY2015

For FY2015 and FY2014(Millions of Yen)
Total shareholders' equity

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
Gain on sales of non-current assets
Foreign exchange gains
Other
Total Non-operating income
Non-operating expenses
Interest expenses
Loss on disposal of non-current assets
Plant stop losses
Product compensation expenses
Foreign exchange losses
Other
Total Non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of investment securities
Total Extraordinary income
Extraordinary losses
Impairment loss
Loss on business of subsidiaries and associates
Product compensation expenses
Business structure improvement expenses
Total Extraordinary losses
Income before income taxes and non-controlling interests
Income taxes-current
Income taxes-deferred
Total income taxes
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of parent(Millions of Yen)

51

Nissan Chemical Industries, Ltd. Annual Report 2016

Capital stock

Capital surplus Retained earnings Treasury shares

Total
shareholders'equityFY2015FY2014FY2015¥ 176,894
106,146
70,74842,14228,606¥ 171,206
106,184
65,022
39,67525,347$ 1,569,740
941,929
627,811
373,964
253,847

16
580
858
274
748
2,478

20
613
1,093
12
476
684
2,901

142
5,147
7,614
2,431
6,638
21,990

Dividends of surplus(6,269)(6,269)Net income attribute to owners of parent

22,35022,350

(500)

(500)

194
319
327
211
165
334
1,552
29,531

211
332
420
892
1,857
26,391

1,722
2,831
2,902
1,872
1,464
2,964
13,772
262,055

Disposal of treasury shares

0Cancellation of treasury shares(0)¥ 18,942

3,081
3,081

-

27,34027,340

3,941
311
4,253
28,3607,955(2,151)
5,804
22,556206¥ 22,350

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

34,972
2,760
37,741
251,664
70,592(19,088)
51,504200,160
1,828$ 198,332

Consolidated Statements of Comprehensive Income
Net income
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 attribute to)
Owners of parent
Non-controlling interests(Thousands of
U.S. dollars)(Thousands of
U.S. Dollars)(Millions of Yen)FY2015FY2014FY2015¥ 22,556¥ 18,381$ 200,160

(159)
(800)
(84)
(1)
(1,047)21,508

4,538
952
221
0
5,712
24,094(1,411)(7,099)(745)(9)(9,291)
190,860¥

21,380127¥

23,832261$

189,724
1,127

Balance at beginning of current period¥ 18,942¥ 13,611¥ 105,602

¥

(584)

¥ 137,572-

Cumulative effects of changes in accounting policies
Restated balance

18,942

13,611

105,602(584)

137,572

Changes of items during period

Change of scope of consolidation(9,001)(9,001)00(5,304)

5,304

-

-

10,276(3,696)

6,579¥ 13,611¥ 115,878¥ (4,281)¥ 144,151

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

Total
net assets¥ 1,481¥ 151,263

Purchase of treasury shares

Net changes of items other than shareholders' equity
Total changes of items during period
Balance at end of current period

Accumulated other comprehensive income

Balance at beginning of current period¥ 10,676

¥ 894

¥ 639

¥ 12,210-

Cumulative effects of changes in accounting policies
Restated balance

10,676894

639

12,2101,481

151,263

Changes of items during period
Dividends of surplus(6,269)Net income attribute to owners of parent

22,350Change of scope of consolidation(500)

Purchase of treasury shares(9,001)

Disposal of treasury shares

0Cancellation of treasury shares-

Net changes of items other than shareholders' equity
Total changes of items during period
Balance at end of current period

(161)

(722)

(84)

(969)

50

(918)

(161)

(722)

(84)

(969)

50

5,660

¥ 10,515

¥ 171

¥ 554

¥ 11,241¥ 1,531¥ 156,924

Nissan Chemical Industries, Ltd. Annual Report 201652

Consolidated Statements of Income
Consolidated Statements of Comprehensive Income

Consolidated Statements of Changes in Net Assets
For FY2015

For FY2015 and FY2014(Millions of Yen)
Total shareholders' equity

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
Gain on sales of non-current assets
Foreign exchange gains
Other
Total Non-operating income
Non-operating expenses
Interest expenses
Loss on disposal of non-current assets
Plant stop losses
Product compensation expenses
Foreign exchange losses
Other
Total Non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of investment securities
Total Extraordinary income
Extraordinary losses
Impairment loss
Loss on business of subsidiaries and associates
Product compensation expenses
Business structure improvement expenses
Total Extraordinary losses
Income before income taxes and non-controlling interests
Income taxes-current
Income taxes-deferred
Total income taxes
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of parent(Millions of Yen)

51

Nissan Chemical Industries, Ltd. Annual Report 2016

Capital stock

Capital surplus Retained earnings Treasury shares

Total
shareholders'equityFY2015FY2014FY2015¥ 176,894
106,146
70,74842,14228,606¥ 171,206
106,184
65,022
39,67525,347$ 1,569,740
941,929
627,811
373,964
253,847

16
580
858
274
748
2,478

20
613
1,093
12
476
684
2,901

142
5,147
7,614
2,431
6,638
21,990

Dividends of surplus(6,269)(6,269)Net income attribute to owners of parent

22,35022,350

(500)

(500)

194
319
327
211
165
334
1,552
29,531

211
332
420
892
1,857
26,391

1,722
2,831
2,902
1,872
1,464
2,964
13,772
262,055

Disposal of treasury shares

0Cancellation of treasury shares(0)¥ 18,942

3,081
3,081

-

27,34027,340

3,941
311
4,253
28,3607,955(2,151)
5,804
22,556206¥ 22,350

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

34,972
2,760
37,741
251,664
70,592(19,088)
51,504200,160
1,828$ 198,332

Consolidated Statements of Comprehensive Income
Net income
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 attribute to)
Owners of parent
Non-controlling interests(Thousands of
U.S. dollars)(Thousands of
U.S. Dollars)(Millions of Yen)FY2015FY2014FY2015¥ 22,556¥ 18,381$ 200,160

(159)
(800)
(84)
(1)
(1,047)21,508

4,538
952
221
0
5,712
24,094(1,411)(7,099)(745)(9)(9,291)
190,860¥

21,380127¥

23,832261$

189,724
1,127

Balance at beginning of current period¥ 18,942¥ 13,611¥ 105,602

¥

(584)

¥ 137,572-

Cumulative effects of changes in accounting policies
Restated balance

18,942

13,611

105,602(584)

137,572

Changes of items during period

Change of scope of consolidation(9,001)(9,001)00(5,304)

5,304

-

-

10,276(3,696)

6,579¥ 13,611¥ 115,878¥ (4,281)¥ 144,151

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

Total
net assets¥ 1,481¥ 151,263

Purchase of treasury shares

Net changes of items other than shareholders' equity
Total changes of items during period
Balance at end of current period

Accumulated other comprehensive income

Balance at beginning of current period¥ 10,676

¥ 894

¥ 639

¥ 12,210-

Cumulative effects of changes in accounting policies
Restated balance

10,676894

639

12,2101,481

151,263

Changes of items during period
Dividends of surplus(6,269)Net income attribute to owners of parent

22,350Change of scope of consolidation(500)

Purchase of treasury shares(9,001)

Disposal of treasury shares

0Cancellation of treasury shares-

Net changes of items other than shareholders' equity
Total changes of items during period
Balance at end of current period

(161)

(722)

(84)

(969)

50

(918)

(161)

(722)

(84)

(969)

50

5,660

¥ 10,515

¥ 171

¥ 554

¥ 11,241¥ 1,531¥ 156,924

Nissan Chemical Industries, Ltd. Annual Report 201652

Consolidated Statements of Changes In Net Assets
For FY2014

For FY2015(Millions of Yen)

(Thousands of U.S.dollars)

Total shareholders' equity
Capital stock

Balance at beginning of current period

Total shareholders' equity

Capital surplus Retained earnings Treasury shares¥ 18,942¥ 13,611¥ 98,121¥ (698)213

Cumulative effects of changes in accounting policies
Restated balance

18,942

13,611

98,334

Total
shareholders'equity¥ 129,975
213

(698)

130,189

Balance at beginning of current period

Capital surplus Retained earnings Treasury shares$ 168,089$ 120,783$ 937,102

Total
shareholders'equity$ (5,182) $ 1,220,800-

Cumulative effects of changes in accounting policies
Restated balance

168,089

120,783

937,102(5,182)

1,220,800

Changes of items during period

Changes of items during period
Dividends of surplus(4,814)(4,814)

Dividends of surplus(55,630)(55,630)

Net income attribute to owners of parent

18,19918,199Net income attribute to owners of parent

198,332

198,332

Change of scope of consolidation(4,437)(4,437)-

Change of scope of consolidation
Purchase of treasury shares
Disposal of treasury shares

0Cancellation of treasury shares(0)(6,116)(6,001)(6,001)

Purchase of treasury shares

00

Disposal of treasury shares

0

6,116

-

Cancellation of treasury shares(0)$ 168,089

Net changes of items other than shareholders' equity

Balance at end of current period

-

-

7,268

114

7,382

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

Total changes of items during period
Balance at end of current period

Accumulated other comprehensive income
Total
Valuation
accumulateddifference on Foreign currency Remeasurements
otheravailable-for-saletranslationof defined benefit comprehensive
securities
adjustment
plansincomeBalance at beginning of current period(79,874)00(47,067)

47,067--

91,188(32,798)

58,381$ 120,783$ 1,028,290¥ 6,138

¥ 20

¥ 417

¥ 6,576

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

Total
net assets¥ 1,269¥ 137,822
213

6,138

20

417

6,576

$ (37,989) $ 1,279,182

Accumulated other comprehensive income

Cumulative effects of changes in accounting policies
Restated balance(79,874)

Net changes of items other than shareholders' equity

Total changes of items during period

1,269

138,035

Balance at beginning of current period$ 94,738$ 7,933$ 5,670$ 108,350

Non-controllinginterests$ 13,142 $ 1,342,293-

Cumulative effects of changes in accounting policies
Restated balance

Total
net assets

94,738

7,933

5,670

108,350

13,142

1,342,293

Changes of items during period

Changes of items during period
Dividends of surplus(4,814)

Dividends of surplus(55,630)

Net income attribute to owners of parent

18,199Net income attribute to owners of parent

198,332

Change of scope of consolidation(4,437)-

Change of scope of consolidation
Purchase of treasury shares(6,001)

Purchase of treasury shares(79,874)

Disposal of treasury shares

0

Disposal of treasury shares

0Cancellation of treasury shares-

Cancellation of treasury shares-

Net changes of items other than shareholders' equity
Total changes of items during period
Balance at end of current period

53

Capital stock

Nissan Chemical Industries, Ltd. Annual Report 2016

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 at end of current period(1,429)(6,407)(745)(8,599)444(8,146)(1,429)(6,407)(745)(8,599)444

50,226$ 93,309$ 1,517$ 4,916$ 99,752$ 13,586 $ 1,392,528

Nissan Chemical Industries, Ltd. Annual Report 201654

Consolidated Statements of Changes In Net Assets
For FY2014

For FY2015(Millions of Yen)

(Thousands of U.S.dollars)

Total shareholders' equity
Capital stock

Balance at beginning of current period

Total shareholders' equity

Capital surplus Retained earnings Treasury shares¥ 18,942¥ 13,611¥ 98,121¥ (698)213

Cumulative effects of changes in accounting policies
Restated balance

18,942

13,611

98,334

Total
shareholders'equity¥ 129,975
213

(698)

130,189

Balance at beginning of current period

Capital surplus Retained earnings Treasury shares$ 168,089$ 120,783$ 937,102

Total
shareholders'equity$ (5,182) $ 1,220,800-

Cumulative effects of changes in accounting policies
Restated balance

168,089

120,783

937,102(5,182)

1,220,800

Changes of items during period

Changes of items during period
Dividends of surplus(4,814)(4,814)

Dividends of surplus(55,630)(55,630)

Net income attribute to owners of parent

18,19918,199Net income attribute to owners of parent

198,332

198,332

Change of scope of consolidation(4,437)(4,437)-

Change of scope of consolidation
Purchase of treasury shares
Disposal of treasury shares

0Cancellation of treasury shares(0)(6,116)(6,001)(6,001)

Purchase of treasury shares

00

Disposal of treasury shares

0

6,116

-

Cancellation of treasury shares(0)$ 168,089

Net changes of items other than shareholders' equity

Balance at end of current period

-

-

7,268

114

7,382

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

Total changes of items during period
Balance at end of current period

Accumulated other comprehensive income
Total
Valuation
accumulateddifference on Foreign currency Remeasurements
otheravailable-for-saletranslationof defined benefit comprehensive
securities
adjustment
plansincomeBalance at beginning of current period(79,874)00(47,067)

47,067--

91,188(32,798)

58,381$ 120,783$ 1,028,290¥ 6,138

¥ 20

¥ 417

¥ 6,576

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

Total
net assets¥ 1,269¥ 137,822
213

6,138

20

417

6,576

$ (37,989) $ 1,279,182

Accumulated other comprehensive income

Cumulative effects of changes in accounting policies
Restated balance(79,874)

Net changes of items other than shareholders' equity

Total changes of items during period

1,269

138,035

Balance at beginning of current period$ 94,738$ 7,933$ 5,670$ 108,350

Non-controllinginterests$ 13,142 $ 1,342,293-

Cumulative effects of changes in accounting policies
Restated balance

Total
net assets

94,738

7,933

5,670

108,350

13,142

1,342,293

Changes of items during period

Changes of items during period
Dividends of surplus(4,814)

Dividends of surplus(55,630)

Net income attribute to owners of parent

18,199Net income attribute to owners of parent

198,332

Change of scope of consolidation(4,437)-

Change of scope of consolidation
Purchase of treasury shares(6,001)

Purchase of treasury shares(79,874)

Disposal of treasury shares

0

Disposal of treasury shares

0Cancellation of treasury shares-

Cancellation of treasury shares-

Net changes of items other than shareholders' equity
Total changes of items during period
Balance at end of current period

53

Capital stock

Nissan Chemical Industries, Ltd. Annual Report 2016

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 at end of current period(1,429)(6,407)(745)(8,599)444(8,146)(1,429)(6,407)(745)(8,599)444

50,226$ 93,309$ 1,517$ 4,916$ 99,752$ 13,586 $ 1,392,528

Nissan Chemical Industries, Ltd. Annual Report 201654

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

For FY2015 and FY2014(Thousands of
U.S. dollars)(Millions of Yen)FY2015FY2014FY2015

Cash flows from operating activities¥ 28,360¥ 25,296$ 251,664

Depreciation

9,684

8,452

85,935

Impairment loss

3,941

-

34,972

Interest and dividend income

(597)

(633)

(5,298)Interest expenses

194

211

1,722

Increase (decrease) in provision for business structure improvement

(23)

704

(204)

Income before income taxes and non-controlling interests

309

-

2,742

Loss (gain) on sales of investment securities(3,081)-(27,340)

Loss (gain) on disposal of non-current assets

319

332

2,831

Increase (decrease) in provision for loss on business of subsidiaries and associates

143(3,775)

1,269(2,716)(2,659)(24,102)

Increase (decrease) in notes and accounts payable-trade

352

(950)

3,124

Other

(514)

(714)

(4,561)

Subtotal

36,372

26,263322,762Interest and dividend received

1,177

1,386

10,445Interest paid

(194)

(223)

(1,722)

Decrease (increase) in notes and accounts receivable-trade
Decrease (increase) in inventories

Income taxes paid

(7,366)(6,974)(65,365)

Net cash provided by (used in) operating activities

29,98920,452

266,119

Purchase of investment securities(331)(1,648)(2,937)

Proceeds from sales and redemption of investment securities

2,206

3,077

19,576

Purchase of property, plant and equipment(9,071)(8,568)(80,495)

Payments for retirement of property, plant and equipment

(262)

(253)

(2,325)Net decrease (increase) in short-term loans receivable

(216)

(109)

(1,917)

Other

(742)

(574)

(6,584)

Net cash provided by (used in) investing activities(8,416)(8,076)(74,683)

54

(854)

479

Cash flows from investing activities

Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable

1,100

6,700

9,761

Repayments of long-term loans payable(3,090)(7,066)(27,420)

Cash dividends paid

(6,269)(4,814)(55,630)

Dividends paid to non-controlling interests
Purchase of treasury shares
Other

(50)

(621)

(6,001)(79,874)

(40)

(40)

(355)

(17,317)(12,127)(153,669)

Effect of exchange rate change on cash and cash equivalents

(324)

337

(2,875)

Net increase (decrease) in cash and cash equivalents

3,931

585

34,883

Cash and cash equivalents at the beginning of period

31,34330,757278,135

61

-

541

¥ 35,335¥ 31,343$ 313,559

Net cash provided by (used in) financing activities

Increase in cash and cash equivalents from newly consolidated subsidiary
Cash and cash equivalents at the end of period

55

(70)
(9,001)

Nissan Chemical Industries, Ltd. Annual Report 2016

1. Basis for presenting consolidated financial statements
The accompanying consolidated financial statements have been preparedin accordance with the provisions set forth in the Japanese Financial
Instruments and Exchange Act, the related accounting regulations, and theaccounting principles generally accepted in Japan ("J-GAAP"), which differ
in certain aspects from the application and disclosure requirements of theaccounting principles generally accepted in the United States of America("US-GAAP") and International Financial Reporting Standards ("IFRS"). In
preparing these consolidated financial statements, certain reclassification
and rearrangements have been made to the consolidated financial
statements issued in Japan in order to present them in a form that is morefamiliar to readers in other countries.
2. Summary of Significant Accounting Policies
a. Consolidation
The consolidated financial statements as of March 31, 2016 include theaccount of Nissan Chemical Industries, Ltd.(the “Company”) and its ten
main (nine in FY2014)subsidiaries (together, the “Companies”). The
Company does not consolidate other subsidiaries due to their immateriality
in terms of consolidated total assets, net sales, net income, and retained
earnings. Under the control or influence concept, those companies inwhich the Company, either directly or indirectly, is able to exercise control
over operations are fully consolidated. Those companies over which theCompany has the ability to exercise significant influence are accounted forby the equity method. Investments in two affiliated companies (two in
FY2014) are accounted for by the equity method. The assets and liabilitiesof the newly consolidated subsidiaries are stated at fair value as of therespective dates on which they were acquired.
All significant inter-company balances and transactions have been
eliminated in consolidation.
All material unrealized profits included in assets resulting from transactions
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 marketablesecurities are excluded from earnings. Instead, they are reported as aseparate component of other comprehensive income until realized.
Realized gains and losses for securities are included in earnings, and arederived using the moving average method for determining the cost of
securities sold.
Non-marketable securities in companies over which the Company isincapable of exercising significant influence are stated at cost andreviewed periodically for impairment.
c. Inventories
Inventories are stated at the lower of cost or net realizable value. The costis determined by the average method.
.
d. Property, Plant and Equipment (excluding Leased Assets)
Property, plant and equipment are stated at cost. In general, the deprecia-tion of property, plant and equipment is computed by the declining-balancemethod over the estimated useful lives of these assets.
The estimated useful life ranges are two years to fifty years for buildings
and structures, and two years to twelve years for machinery and equipment.
e. Goodwill and other Intangible Assets
Goodwill is amortized by the straight-line method within 20 years. Other
intangible assets are also amortized the using straight-line method.
The most typical intangible asset is Software, and its useful life is five years.
f. Leased Assets
Leased assets arising from finance lease transactions which do nottransfer ownership to the lessee are depreciated to a residual value of zeroby the straight-line method, using the contract term as the useful life.
g. Allowance for Doubtful Accounts
The allowance for doubtful accounts is the Company’s best estimate forthe amount of probable credit losses in the Company’s existing tradereceivables.
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 when a customer files for bankruptcy or when the its
operating results or financial position deteriorates. If the customer's
circumstances change, estimates of the recoverability of receivables arefurther adjusted.
h. Provision for Bonuses
The Company provides accrued bonuses for employees based on theestimated amounts to be paid for the fiscal year.
i. Provision for Director's Bonuses
The Company provides accrued bonuses for members of the Board of
Directors based on the estimated amounts to be paid for the fiscal year.
j. Provision for Environmental Measures
The Company provides a reserve at the estimated cost to deal with theexpenditures of Environmental Measures.
k. Provision for Business Structural Improvement
The Company provides a reserve at the estimated amount to cover the
expenses and losses to be incurred in association with structure improvement.
l. Provision for Loss on Business of Subsidiaries and Associates
The Company provides a reserve at the estimated amount to cover thelosses in consideration of its financial position.
m. Provision for Retirement Benefits
The Company has a defined benefit pension plan and a retirement planthat substantially covers all of its employees.

Nissan Chemical Industries, Ltd. Annual Report 201656

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

For FY2015 and FY2014(Thousands of
U.S. dollars)(Millions of Yen)FY2015FY2014FY2015

Cash flows from operating activities¥ 28,360¥ 25,296$ 251,664

Depreciation

9,684

8,452

85,935

Impairment loss

3,941

-

34,972

Interest and dividend income

(597)

(633)

(5,298)Interest expenses

194

211

1,722

Increase (decrease) in provision for business structure improvement

(23)

704

(204)

Income before income taxes and non-controlling interests

309

-

2,742

Loss (gain) on sales of investment securities(3,081)-(27,340)

Loss (gain) on disposal of non-current assets

319

332

2,831

Increase (decrease) in provision for loss on business of subsidiaries and associates

143(3,775)

1,269(2,716)(2,659)(24,102)

Increase (decrease) in notes and accounts payable-trade

352

(950)

3,124

Other

(514)

(714)

(4,561)

Subtotal

36,372

26,263322,762Interest and dividend received

1,177

1,386

10,445Interest paid

(194)

(223)

(1,722)

Decrease (increase) in notes and accounts receivable-trade
Decrease (increase) in inventories

Income taxes paid

(7,366)(6,974)(65,365)

Net cash provided by (used in) operating activities

29,98920,452

266,119

Purchase of investment securities(331)(1,648)(2,937)

Proceeds from sales and redemption of investment securities

2,206

3,077

19,576

Purchase of property, plant and equipment(9,071)(8,568)(80,495)

Payments for retirement of property, plant and equipment

(262)

(253)

(2,325)Net decrease (increase) in short-term loans receivable

(216)

(109)

(1,917)

Other

(742)

(574)

(6,584)

Net cash provided by (used in) investing activities(8,416)(8,076)(74,683)

54

(854)

479

Cash flows from investing activities

Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable

1,100

6,700

9,761

Repayments of long-term loans payable(3,090)(7,066)(27,420)

Cash dividends paid

(6,269)(4,814)(55,630)

Dividends paid to non-controlling interests
Purchase of treasury shares
Other

(50)

(621)

(6,001)(79,874)

(40)

(40)

(355)

(17,317)(12,127)(153,669)

Effect of exchange rate change on cash and cash equivalents

(324)

337

(2,875)

Net increase (decrease) in cash and cash equivalents

3,931

585

34,883

Cash and cash equivalents at the beginning of period

31,34330,757278,135

61

-

541

¥ 35,335¥ 31,343$ 313,559

Net cash provided by (used in) financing activities

Increase in cash and cash equivalents from newly consolidated subsidiary
Cash and cash equivalents at the end of period

55

(70)
(9,001)

Nissan Chemical Industries, Ltd. Annual Report 2016

1. Basis for presenting consolidated financial statements
The accompanying consolidated financial statements have been preparedin accordance with the provisions set forth in the Japanese Financial
Instruments and Exchange Act, the related accounting regulations, and theaccounting principles generally accepted in Japan ("J-GAAP"), which differ
in certain aspects from the application and disclosure requirements of theaccounting principles generally accepted in the United States of America("US-GAAP") and International Financial Reporting Standards ("IFRS"). In
preparing these consolidated financial statements, certain reclassification
and rearrangements have been made to the consolidated financial
statements issued in Japan in order to present them in a form that is morefamiliar to readers in other countries.
2. Summary of Significant Accounting Policies
a. Consolidation
The consolidated financial statements as of March 31, 2016 include theaccount of Nissan Chemical Industries, Ltd.(the “Company”) and its ten
main (nine in FY2014)subsidiaries (together, the “Companies”). The
Company does not consolidate other subsidiaries due to their immateriality
in terms of consolidated total assets, net sales, net income, and retained
earnings. Under the control or influence concept, those companies inwhich the Company, either directly or indirectly, is able to exercise control
over operations are fully consolidated. Those companies over which theCompany has the ability to exercise significant influence are accounted forby the equity method. Investments in two affiliated companies (two in
FY2014) are accounted for by the equity method. The assets and liabilitiesof the newly consolidated subsidiaries are stated at fair value as of therespective dates on which they were acquired.
All significant inter-company balances and transactions have been
eliminated in consolidation.
All material unrealized profits included in assets resulting from transactions
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 marketablesecurities are excluded from earnings. Instead, they are reported as aseparate component of other comprehensive income until realized.
Realized gains and losses for securities are included in earnings, and arederived using the moving average method for determining the cost of
securities sold.
Non-marketable securities in companies over which the Company isincapable of exercising significant influence are stated at cost andreviewed periodically for impairment.
c. Inventories
Inventories are stated at the lower of cost or net realizable value. The costis determined by the average method.
.
d. Property, Plant and Equipment (excluding Leased Assets)
Property, plant and equipment are stated at cost. In general, the deprecia-tion of property, plant and equipment is computed by the declining-balancemethod over the estimated useful lives of these assets.
The estimated useful life ranges are two years to fifty years for buildings
and structures, and two years to twelve years for machinery and equipment.
e. Goodwill and other Intangible Assets
Goodwill is amortized by the straight-line method within 20 years. Other
intangible assets are also amortized the using straight-line method.
The most typical intangible asset is Software, and its useful life is five years.
f. Leased Assets
Leased assets arising from finance lease transactions which do nottransfer ownership to the lessee are depreciated to a residual value of zeroby the straight-line method, using the contract term as the useful life.
g. Allowance for Doubtful Accounts
The allowance for doubtful accounts is the Company’s best estimate forthe amount of probable credit losses in the Company’s existing tradereceivables.
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 when a customer files for bankruptcy or when the its
operating results or financial position deteriorates. If the customer's
circumstances change, estimates of the recoverability of receivables arefurther adjusted.
h. Provision for Bonuses
The Company provides accrued bonuses for employees based on theestimated amounts to be paid for the fiscal year.
i. Provision for Director's Bonuses
The Company provides accrued bonuses for members of the Board of
Directors based on the estimated amounts to be paid for the fiscal year.
j. Provision for Environmental Measures
The Company provides a reserve at the estimated cost to deal with theexpenditures of Environmental Measures.
k. Provision for Business Structural Improvement
The Company provides a reserve at the estimated amount to cover the
expenses and losses to be incurred in association with structure improvement.
l. Provision for Loss on Business of Subsidiaries and Associates
The Company provides a reserve at the estimated amount to cover thelosses in consideration of its financial position.
m. Provision for Retirement Benefits
The Company has a defined benefit pension plan and a retirement planthat substantially covers all of its employees.

Nissan Chemical Industries, Ltd. Annual Report 2016

56

The method for calculating the estimated amount of all retirement benefits
to be paid at future retirement dates is based on the benefit formula.
Actuarial gains and losses are primarily amortized using the decliningbalance method over the average of the estimated remaining service years(16 years) commencing from this accounting period.
Certain consolidated subsidiaries use a simplified method for calculating
retirement benefits.
In this method, the retirement benefit obligation is the same amount as thenecessary payment related to retirement benefits.
n. Translation of Foreign Currency
The assets and liabilities of the Company’s subsidiaries located outside
Japan are translated into Japanese yen at the exchange rate in effect on
the balance sheet date. Revenue and expense items are translated at theprevailing average exchange rates for the year. Gains and losses resulting
from foreign currency transactions are included in other income(deductions), and those resulting from the translation of financial
statements are excluded from the statements of income. Instead, they are
accumulated in net assets as a component of accumulated othercomprehensive income (loss).
o. Derivatives and Hedge Accounting
The Company enters into interest rate swap contracts to hedge the risk ofchanges in interest rates over borrowings.
Derivatives are carried at fair value with all changes 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 ofthe applicable income taxes, are reported as components of accumulated
other comprehensive income (loss). If interest rates swap contracts meetcertain 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 the swap contract is executed.
p. Cash and Cash Equivalent
The Company consider cash equivalents, include all highly fluid
investments,to have been purchased with original maturities of threemonths or less.
3. U.S. dollar Amounts
The accompanying consolidated financial statements are expressed inJapanese yen as of and for the year ended March 31, 2016 after being
converted from the currency of the country in which the Company operates.
The translation of Japanese yen amounts to United States dollar amounts is
included solely for the convenience of the readers outside Japan, and has
been made at the rate of ¥112.69 to US $1, which is the approximate
closing exchange rate reported by the Tokyo Foreign Exchange Market on
March 31, 2016. This translation should not be construed to indicate that theJapanese yen amounts shown can be converted to United States dollars at
the above rate.

4. Change in Accounting Policy
Effective from the beginning of the year ended March 31, 2016, theCompany has adopted the "Revised Accounting Standard for Business
Combinations"(Accounting Standards Board of Japan (ASBJ) Statement
No.21, issued on September 13, 2013, hereinafter referred to as the"Accounting Standard for Business Combinations"), "Revised AccountingStandard for Consolidated Financial Statements" (ASBJ Statement No.22,
issued on September 13, 2013, hereinafter referred to as the AccountingStandard for Consolidation), and "Revised Accounting Standard forBusiness Divestitures"(ASBJ Statement No.7, issued on September 13,
2013, hereinafter referred to as the "Accounting Standard for Business
Divestitures").
In applying these revised accounting standards, the Company records
differences arising from changes in equity interest in subsidiaries as capitalsurplus when it maintains control over its subsidiaries. The corresponding
acquisition-related costs are recognized as expenses when incurred.
In regards to business combinations conducted after the beginning of thefirst quarter of the current consolidated fiscal year, the disclosure method
was revised to reflect the retrospective adjustment of purchase priceallocation after determining the provisional accounting method in thequarterly consolidated financial statements of the fiscal period in which thebusiness combination occurred.
In addition, the presentation method of net income is amended, and thepresentation of "minority interests" is changed to "non-controlling interests".
To reflect these changes in presentation, the quarterly consolidated
financial statements and consolidated financial statements in the previous
fiscal year have been reclassified.
In regards to the application of the Accounting Standard for Business
Combinations and other standards, the Company is subject to the transitional
treatment set out in Section 58-2(4) of the Accounting Standard for Business
Combinations, the treatment set out in Section 44-5(4) of the AccountingStandard for Consolidation, and the treatment set out in Section 57-4(4) of
the Accounting Standard for business Divestitures.
These changes are effective from the beginning of the first quarter ofcurrent consolidated fiscal year. Likewise, they have no effect on profit andloss.
5. Reclassifications
Effective from the beginning of the current consolidated fiscal year,"Long-term loans receivable", which were displayed separately in "Investments and other assets" in the previous fiscal year, are now included in"Other" to improve the level of clarity.
In order to reflect the change in the indication method, the Company hasclassified the consolidated financial statement for the previous fiscal year.
As a result, ¥21 million of "Long-term loans receivable" and ¥1,940 millionof "Other", which were shown in "Investments and other assets" in theprevious consolidated balance sheets, are reclassified as ¥1,962 million of"Other".
Effective from the beginning of the current consolidated fiscal year, "Gain on
sales of non-current assets", which were included in "Other" of57

Nissan Chemical Industries, Ltd. Annual Report 2016

"Non-operating income" in the previous fiscal year, are displayed separately
since the amount exceeded the 10% of "Non-operating income".
In order to reflect the change in the indication method, the Company hasclassified the consolidated financial statement for the previous fiscal year.
As a result, ¥697 million of "Other" and ¥12 million of "Gain on sales of
non-current assets" in the previous consolidated statements of income arereclassified as ¥684 million of "Other".
Effective from the beginning of the current consolidated fiscal year,"Environmental expenses", which were displayed separately in"Non-operating expenses" in the previous fiscal year, are included in"Other" since the amount was lower than 10% of "Non-operating income".
In order to reflect the change in the indication method, the Company hasclassified the consolidated financial statement for the previous fiscal year.
As a result, ¥315 million of "Environmental expenses "and ¥577 million of"Other" in the previous consolidated statements of income are reclassified
as ¥892 million of "Other".
6. Collateral Assets and Liabilities
Collateral assets and liabilities as of FY2015 and FY2014 were as follows:(Thousands of
U.S. dollars)(Millions of Yen)FY2015FY2014FY2015Investment in securities

¥ 180

¥ 215

$ 1,597

Liabilities

¥ 270

¥ 256

$ 2,396

7. Research and Development Expenses
Research and development expenses included in selling, general andadministrative expenses for FY2015 and FY2014 were as follows:(Millions of Yen)FY2015¥ 15,778

FY2014¥ 14,964(Thousands of
U.S. dollars)
FY2015$ 140,012

8. Impairment Losses
The Company recognized impairment losses on the following asset groupfor FY2015.
Place

Use

Germany Three-dimensional packaging
material market(Millions of Yen)

(Thousands of
U.S. dollars)

Type

AmountAmountGoodwill andPatent¥ 3,941$ 34,972

In general, the Companies define division as the basis of grouping.
In the case of consolidated subsidiaries, the Company is also defined as
the basis of grouping in terms of its scale.
In regards to intangible assets, we deem each asset to be one group.
The book value of Goodwill and Patent of Thin Materials GmbH(consolidate subsidiary) is reduced to a recoverable amount,and is recognized as an impairment loss on an extraordinary loss.
The companies measure the recoverable amount of this asset group byvalue in use. It is calculated by discounting the future cash flow at 11%.

9. Comprehensive Income(Thousands of
U.S. dollars)(Millions of Yen)FY2015FY2015FY2014

Valuation difference on available-for-sale securities:
Gains (losses) arising during the year

¥ 2,426¥ 6,263$ 21,528

Reclassification adjustment(3,048)(21)(27,048)

Amount before tax effect

(621)

6,241

(5,511)

Tax effect461(1,703)

4,091

(159)

4,538

(1,411)(6,726)

Valuation difference on available-for-salesecurities, net of tax

Foreign currency translation adjustment
(758)

952

Reclassification adjustment

-

-

-

Amount before tax effect

(758)

952

(6,726)

Tax effect

(42)

-

(373)

(800)

952

(7,099)Gains (losses) arising during the year

Foreign currency translation adjustment,
net of tax

Remeasurements of defined benefit plans:
2

384

18

Reclassification adjustment

(148)

(87)

(1,313)

Amount before tax effect

(146)

297

(1,296)

61

(75)

541

(84)

221

(745)

Gains (losses) arising during the year

Tax effectRemeasurements of defined benefit plans,
net of tax

Share of other comprehensive income of entities accounted for using equity methods
Gains (losses) arising during the year
Total other comprehensive income

(1)

0

(9)

¥ (1,047)¥ 5,712$ (9,291)

10. Common Stock(1) Dividends
Cash dividends charged to retained earnings for the years ended March
31, 2015 and 2016 represent the dividends paid out during those years.
The accompanying consolidated financial statements do not include any
provisions for a dividend approved by the Annual Shareholders Meeting of¥26 ($0.23) per share with an aggregate ¥4,013 million ($35,611 thousand)for the year ended March 31, 2016.
(2) Retained Earnings
Retained earnings on a consolidated basis consist of legal reserve andretained earnings. In accordance with provisions of the Companies Act ofJapan, the Company has provided a legal reserve as an appropriation ofretained earnings. The Code states that while neither legal capital surplus nor
legal retained earnings are available for dividends, both may be used to reduceor eliminate a deficit by a resolution of the shareholders' meeting, or may betransferred to stated capital common stock by a 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 a certain special reserve for the purpose ofobtaining tax benefits in accordance with the Special Taxation Law of Japan.

Nissan Chemical Industries, Ltd. Annual Report 2016

58

The method for calculating the estimated amount of all retirement benefits
to be paid at future retirement dates is based on the benefit formula.
Actuarial gains and losses are primarily amortized using the decliningbalance method over the average of the estimated remaining service years(16 years) commencing from this accounting period.
Certain consolidated subsidiaries use a simplified method for calculating
retirement benefits.
In this method, the retirement benefit obligation is the same amount as thenecessary payment related to retirement benefits.
n. Translation of Foreign Currency
The assets and liabilities of the Company’s subsidiaries located outside
Japan are translated into Japanese yen at the exchange rate in effect on
the balance sheet date. Revenue and expense items are translated at theprevailing average exchange rates for the year. Gains and losses resulting
from foreign currency transactions are included in other income(deductions), and those resulting from the translation of financial
statements are excluded from the statements of income. Instead, they are
accumulated in net assets as a component of accumulated othercomprehensive income (loss).
o. Derivatives and Hedge Accounting
The Company enters into interest rate swap contracts to hedge the risk ofchanges in interest rates over borrowings.
Derivatives are carried at fair value with all changes 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 ofthe applicable income taxes, are reported as components of accumulated
other comprehensive income (loss). If interest rates swap contracts meetcertain 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 the swap contract is executed.
p. Cash and Cash Equivalent
The Company consider cash equivalents, include all highly fluid
investments,to have been purchased with original maturities of threemonths or less.
3. U.S. dollar Amounts
The accompanying consolidated financial statements are expressed inJapanese yen as of and for the year ended March 31, 2016 after being
converted from the currency of the country in which the Company operates.
The translation of Japanese yen amounts to United States dollar amounts is
included solely for the convenience of the readers outside Japan, and has
been made at the rate of ¥112.69 to US $1, which is the approximate
closing exchange rate reported by the Tokyo Foreign Exchange Market on
March 31, 2016. This translation should not be construed to indicate that theJapanese yen amounts shown can be converted to United States dollars at
the above rate.

4. Change in Accounting Policy
Effective from the beginning of the year ended March 31, 2016, theCompany has adopted the "Revised Accounting Standard for Business
Combinations"(Accounting Standards Board of Japan (ASBJ) Statement
No.21, issued on September 13, 2013, hereinafter referred to as the"Accounting Standard for Business Combinations"), "Revised AccountingStandard for Consolidated Financial Statements" (ASBJ Statement No.22,
issued on September 13, 2013, hereinafter referred to as the AccountingStandard for Consolidation), and "Revised Accounting Standard forBusiness Divestitures"(ASBJ Statement No.7, issued on September 13,
2013, hereinafter referred to as the "Accounting Standard for Business
Divestitures").
In applying these revised accounting standards, the Company records
differences arising from changes in equity interest in subsidiaries as capitalsurplus when it maintains control over its subsidiaries. The corresponding
acquisition-related costs are recognized as expenses when incurred.
In regards to business combinations conducted after the beginning of thefirst quarter of the current consolidated fiscal year, the disclosure method
was revised to reflect the retrospective adjustment of purchase priceallocation after determining the provisional accounting method in thequarterly consolidated financial statements of the fiscal period in which thebusiness combination occurred.
In addition, the presentation method of net income is amended, and thepresentation of "minority interests" is changed to "non-controlling interests".
To reflect these changes in presentation, the quarterly consolidated
financial statements and consolidated financial statements in the previous
fiscal year have been reclassified.
In regards to the application of the Accounting Standard for Business
Combinations and other standards, the Company is subject to the transitional
treatment set out in Section 58-2(4) of the Accounting Standard for Business
Combinations, the treatment set out in Section 44-5(4) of the AccountingStandard for Consolidation, and the treatment set out in Section 57-4(4) of
the Accounting Standard for business Divestitures.
These changes are effective from the beginning of the first quarter ofcurrent consolidated fiscal year. Likewise, they have no effect on profit andloss.
5. Reclassifications
Effective from the beginning of the current consolidated fiscal year,"Long-term loans receivable", which were displayed separately in "Investments and other assets" in the previous fiscal year, are now included in"Other" to improve the level of clarity.
In order to reflect the change in the indication method, the Company hasclassified the consolidated financial statement for the previous fiscal year.
As a result, ¥21 million of "Long-term loans receivable" and ¥1,940 millionof "Other", which were shown in "Investments and other assets" in theprevious consolidated balance sheets, are reclassified as ¥1,962 million of"Other".
Effective from the beginning of the current consolidated fiscal year, "Gain on
sales of non-current assets", which were included in "Other" of57

Nissan Chemical Industries, Ltd. Annual Report 2016

"Non-operating income" in the previous fiscal year, are displayed separately
since the amount exceeded the 10% of "Non-operating income".
In order to reflect the change in the indication method, the Company hasclassified the consolidated financial statement for the previous fiscal year.
As a result, ¥697 million of "Other" and ¥12 million of "Gain on sales of
non-current assets" in the previous consolidated statements of income arereclassified as ¥684 million of "Other".
Effective from the beginning of the current consolidated fiscal year,"Environmental expenses", which were displayed separately in"Non-operating expenses" in the previous fiscal year, are included in"Other" since the amount was lower than 10% of "Non-operating income".
In order to reflect the change in the indication method, the Company hasclassified the consolidated financial statement for the previous fiscal year.
As a result, ¥315 million of "Environmental expenses "and ¥577 million of"Other" in the previous consolidated statements of income are reclassified
as ¥892 million of "Other".
6. Collateral Assets and Liabilities
Collateral assets and liabilities as of FY2015 and FY2014 were as follows:(Thousands of
U.S. dollars)(Millions of Yen)FY2015FY2014FY2015Investment in securities

¥ 180

¥ 215

$ 1,597

Liabilities

¥ 270

¥ 256

$ 2,396

7. Research and Development Expenses
Research and development expenses included in selling, general andadministrative expenses for FY2015 and FY2014 were as follows:(Millions of Yen)FY2015¥ 15,778

FY2014¥ 14,964(Thousands of
U.S. dollars)
FY2015$ 140,012

8. Impairment Losses
The Company recognized impairment losses on the following asset groupfor FY2015.
Place

Use

Germany Three-dimensional packaging
material market(Millions of Yen)

(Thousands of
U.S. dollars)

Type

AmountAmountGoodwill andPatent¥ 3,941$ 34,972

In general, the Companies define division as the basis of grouping.
In the case of consolidated subsidiaries, the Company is also defined as
the basis of grouping in terms of its scale.
In regards to intangible assets, we deem each asset to be one group.
The book value of Goodwill and Patent of Thin Materials GmbH(consolidate subsidiary) is reduced to a recoverable amount,and is recognized as an impairment loss on an extraordinary loss.
The companies measure the recoverable amount of this asset group byvalue in use. It is calculated by discounting the future cash flow at 11%.

9. Comprehensive Income(Thousands of
U.S. dollars)(Millions of Yen)FY2015FY2015FY2014

Valuation difference on available-for-sale securities:
Gains (losses) arising during the year

¥ 2,426¥ 6,263$ 21,528

Reclassification adjustment(3,048)(21)(27,048)

Amount before tax effect

(621)

6,241

(5,511)

Tax effect461(1,703)

4,091

(159)

4,538

(1,411)(6,726)

Valuation difference on available-for-salesecurities, net of tax

Foreign currency translation adjustment
(758)

952

Reclassification adjustment

-

-

-

Amount before tax effect

(758)

952

(6,726)

Tax effect

(42)

-

(373)

(800)

952

(7,099)Gains (losses) arising during the year

Foreign currency translation adjustment,
net of tax

Remeasurements of defined benefit plans:
2

384

18

Reclassification adjustment

(148)

(87)

(1,313)

Amount before tax effect

(146)

297

(1,296)

61

(75)

541

(84)

221

(745)

Gains (losses) arising during the year

Tax effectRemeasurements of defined benefit plans,
net of tax

Share of other comprehensive income of entities accounted for using equity methods
Gains (losses) arising during the year
Total other comprehensive income

(1)

0

(9)

¥ (1,047)¥ 5,712$ (9,291)

10. Common Stock(1) Dividends
Cash dividends charged to retained earnings for the years ended March
31, 2015 and 2016 represent the dividends paid out during those years.
The accompanying consolidated financial statements do not include any
provisions for a dividend approved by the Annual Shareholders Meeting of¥26 ($0.23) per share with an aggregate ¥4,013 million ($35,611 thousand)for the year ended March 31, 2016.
(2) Retained Earnings
Retained earnings on a consolidated basis consist of legal reserve andretained earnings. In accordance with provisions of the Companies Act ofJapan, the Company has provided a legal reserve as an appropriation ofretained earnings. The Code states that while neither legal capital surplus nor
legal retained earnings are available for dividends, both may be used to reduceor eliminate a deficit by a resolution of the shareholders' meeting, or may betransferred to stated capital common stock by a 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 a certain special reserve for the purpose ofobtaining tax benefits in accordance with the Special Taxation Law of Japan.

Nissan Chemical Industries, Ltd. Annual Report 201658

11. Investment Securities(Thousands of
U.S. dollars)(Millions of Yen)FY2015FY2015FY2014¥ 24,559¥ 26,735$ 217,934

Unlisted securities of affiliates

7,244

10,64264,283

Unlisted securities

1,447

1,334

12,841¥ 33,251¥ 38,711$ 295,066

Equity securities

FY2015Long-term debt
Less current portion¥ 12,150$ 90,159(3,060)(3,090)(27,154)¥ 7,100¥ 9,060$ 63,005

Long-term debt payment due after FY2015 were as follows:(Millions of Yen)

(Thousands of
U.S. dollars)

FY2016¥ 2,960$ 26,267

FY20172,360

20,942FY20181,560

13,843

FY2019 and thereafter

220

1,952

¥ 7,100$ 63,005

Retirement benefit obligation
Plan asset

Net retirement benefit obligation

3.6 to 9.0%

3.7 to 9.0%

(Note) Expected rate of salary increase is calculated based on our point system.

Deferred tax assets:
The tax effect of investment on
subsidiary to be liquidated
Inventory
Provision for bonus
Unrealized profit of inventory
Business tax
OthersGross deferred tax assets
Less: Valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Unrealized gain on securities
Net defined benefit asset
Reserve for advanced
depreciation of fixed assets
OthersTotal deferred tax liabilities
Net deferred tax assets-$ 9,974

754
575
468
395
2,440
5,759
(41)
5,717

732
601
398
340
2,801
4,872
(133)
4,739

6,691
5,102
4,153
3,505
21,652
51,105(364)
50,732(4,751)
(631)
(285)

(5,146)
(614)
(311)

(42,160)(5,599)(2,529)(76)(5,745)¥ (27)(133)(6,205)¥ (1,466)(674)(50,981)$ (240)¥ 1,124

¥

2.45%

3.48%

0.67

1.10

0.59

0.66

Tax credit(7.74)(6.52)

Investment on subsidiaries to be liquidated(3.97)-(2.55)(3.81)(1.00)(1.54)

Difference of tax rate for foreign consolidated subsidiaries(0.60)(1.29)

Other, net(0.44)(0.38)

20.47%

27.34%(Reconciliation)
Change in statutory income tax rate

$ 106,469(14,055)(14,131)(124,723)(2,056)(1,958)(18,245)

72

67

639

(1,983)(1,890)(17,597)

Net defined benefit liability

102

174

905

Net defined benefit asset(2,086)(2,064)(18,511)

Net retirement benefit obligation¥ (1,983)¥ (1,890)$ (17,597)

FY201435.64%

Elimination of intercompany dividend income¥ 12,173

Nissan Chemical Industries, Ltd. Annual Report 2016

FY201533.06%

Entertainment and other permanently non-deductible
expenseDividend and other items excluded permanently fromtaxable income
Equity in earnings of entities accounted for using
equity method

Effective tax rate

59

(Thousands of
U.S. dollars)

FY2014

Statutory tax rate

FY2015¥ 11,998

Unfunded retirement benefit obligation

2.0%

Expected rate of salary increase

FY2015(Thousands of
U.S. dollars)

FY20142.0%

The differences between the statutory tax rate and the effective tax rate forthe year ended FY2015 and FY2014 were as follows:

13. Retirement Benefits(1) The liability for retirement benefits as of FY2015 and FY2014 were as
follows:

FY2015

0.8%

Long-term expected rate of return

FY2015FY2015(Millions of Yen)

0.8%

Discount rate

(Millions of Yen)

¥ 10,160

Year ending March 31

FY2014

14. Income Taxes
The Company is subject to a number of taxes based on income. The
statutory income tax rates were approximately 33.06% for the year ended
March 31,2016 and 35.64% for the year ended March 31, 2015.
The tax effects of significant temporary differences which resulted in deferred
tax assets and liabilities as of FY2015 and FY2014 were as follows:(Thousands of
U.S. dollars)

FY2014FY2015

15. Segment Information(1) General Information about reportable segments
In regard to reportable segments, the Company is able to obtain discrete financial data from its component units.
Accordingly, its segments are subject to regular review to help the Board of Directors decide how to allocate managerial resources and evaluate businessperformance.
Divisions by products and services are located at headquarters. Each division works out a comprehensive strategy applicable to their products and services andcarries out their business activities.
The Company consists of segments based on the following divisions:
Segment

12. Short-term Debt and Long-term Debt
Short-term debt consisting of an unsecured bank overdraft as of March 31,
2016 was ¥22,938 million ($203,549 thousand).
The weighted average interest rate on short-term debt outstanding as ofMarch 31, 2016 was 0.61%.
The weighted average interest rate on long-term debt outstanding as ofMarch 31, 2016 was 0.90%.
The weighted average interest rate on the current portion of long-term debt
outstanding as of March 31, 2016 was 0.93%.
Long-term debt as of March 31, 2015 and 2016 was as follows:(Millions of Yen)

(2) Actuarial assumptions
The principal actuarial assumptions as FY2015 and FY2014 were as
follows:

Chemicals
Performance Materials
Agricultural Chemicals

Main Products
Basic chemicals (melamine, sulfuric acid, nitric acid, ammonia, etc.)
Fine chemicals (epoxy compound for LED sealants, solder resist and painting,flame retardants, chlorinated cyanuric acidfor sterilizing, etc.)
Display materials (LCD alignment coating, etc.)
Semiconductor materials (bottom anti-reflective coating for semiconductors, etc.)
Inorganic materials (hard coating materials, electronic information materials, polishing materials, etc.)
Agrochemicals (herbicides, insecticides, fungicides, combination fungicide and insecticide, and plant growth regulators)
Veterinary pharmaceuticals

Pharmaceuticals

LIVALO (anti-cholesterol drugs), etc.
Finetech (custom manufacturing and process services for pharmaceutical companies)

Trading

Trading, etc.

OthersTransportation, landscaping, engineering, fertilizer, etc.

(2) Basis for the 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.
Intersegment 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
FY2014

Net 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)

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

¥

19

¥

338

¥

620

¥

9,796

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

Nissan Chemical Industries, Ltd. Annual Report 201660

11. Investment Securities(Thousands of
U.S. dollars)(Millions of Yen)FY2015FY2015FY2014¥ 24,559¥ 26,735$ 217,934

Unlisted securities of affiliates

7,244

10,64264,283

Unlisted securities

1,447

1,334

12,841¥ 33,251¥ 38,711$ 295,066

Equity securities

FY2015Long-term debt
Less current portion¥ 12,150$ 90,159(3,060)(3,090)(27,154)¥ 7,100¥ 9,060$ 63,005

Long-term debt payment due after FY2015 were as follows:(Millions of Yen)

(Thousands of
U.S. dollars)

FY2016¥ 2,960$ 26,267

FY20172,360

20,942FY20181,560

13,843

FY2019 and thereafter

220

1,952

¥ 7,100$ 63,005

Retirement benefit obligation
Plan asset

Net retirement benefit obligation

3.6 to 9.0%

3.7 to 9.0%

(Note) Expected rate of salary increase is calculated based on our point system.

Deferred tax assets:
The tax effect of investment on
subsidiary to be liquidated
Inventory
Provision for bonus
Unrealized profit of inventory
Business tax
OthersGross deferred tax assets
Less: Valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Unrealized gain on securities
Net defined benefit asset
Reserve for advanced
depreciation of fixed assets
OthersTotal deferred tax liabilities
Net deferred tax assets-$ 9,974

754
575
468
395
2,440
5,759
(41)
5,717

732
601
398
340
2,801
4,872
(133)
4,739

6,691
5,102
4,153
3,505
21,652
51,105(364)
50,732(4,751)
(631)
(285)

(5,146)
(614)
(311)

(42,160)(5,599)(2,529)(76)(5,745)¥ (27)(133)(6,205)¥ (1,466)(674)(50,981)$ (240)¥ 1,124

¥

2.45%

3.48%

0.67

1.10

0.59

0.66

Tax credit(7.74)(6.52)

Investment on subsidiaries to be liquidated(3.97)-(2.55)(3.81)(1.00)(1.54)

Difference of tax rate for foreign consolidated subsidiaries(0.60)(1.29)

Other, net(0.44)(0.38)

20.47%

27.34%(Reconciliation)
Change in statutory income tax rate

$ 106,469(14,055)(14,131)(124,723)(2,056)(1,958)(18,245)

72

67

639

(1,983)(1,890)(17,597)

Net defined benefit liability

102

174

905

Net defined benefit asset(2,086)(2,064)(18,511)

Net retirement benefit obligation¥ (1,983)¥ (1,890)$ (17,597)

FY201435.64%

Elimination of intercompany dividend income¥ 12,173

Nissan Chemical Industries, Ltd. Annual Report 2016

FY201533.06%

Entertainment and other permanently non-deductible
expenseDividend and other items excluded permanently fromtaxable income
Equity in earnings of entities accounted for using
equity method

Effective tax rate

59

(Thousands of
U.S. dollars)

FY2014

Statutory tax rate

FY2015¥ 11,998

Unfunded retirement benefit obligation

2.0%

Expected rate of salary increase

FY2015(Thousands of
U.S. dollars)

FY20142.0%

The differences between the statutory tax rate and the effective tax rate forthe year ended FY2015 and FY2014 were as follows:

13. Retirement Benefits(1) The liability for retirement benefits as of FY2015 and FY2014 were as
follows:

FY2015

0.8%

Long-term expected rate of return

FY2015FY2015(Millions of Yen)

0.8%

Discount rate

(Millions of Yen)

¥ 10,160

Year ending March 31

FY2014

14. Income Taxes
The Company is subject to a number of taxes based on income. The
statutory income tax rates were approximately 33.06% for the year ended
March 31,2016 and 35.64% for the year ended March 31, 2015.
The tax effects of significant temporary differences which resulted in deferred
tax assets and liabilities as of FY2015 and FY2014 were as follows:(Thousands of
U.S. dollars)

FY2014FY2015

15. Segment Information(1) General Information about reportable segments
In regard to reportable segments, the Company is able to obtain discrete financial data from its component units.
Accordingly, its segments are subject to regular review to help the Board of Directors decide how to allocate managerial resources and evaluate businessperformance.
Divisions by products and services are located at headquarters. Each division works out a comprehensive strategy applicable to their products and services andcarries out their business activities.
The Company consists of segments based on the following divisions:
Segment

12. Short-term Debt and Long-term Debt
Short-term debt consisting of an unsecured bank overdraft as of March 31,
2016 was ¥22,938 million ($203,549 thousand).
The weighted average interest rate on short-term debt outstanding as ofMarch 31, 2016 was 0.61%.
The weighted average interest rate on long-term debt outstanding as ofMarch 31, 2016 was 0.90%.
The weighted average interest rate on the current portion of long-term debt
outstanding as of March 31, 2016 was 0.93%.
Long-term debt as of March 31, 2015 and 2016 was as follows:(Millions of Yen)

(2) Actuarial assumptions
The principal actuarial assumptions as FY2015 and FY2014 were as
follows:

Chemicals
Performance Materials
Agricultural Chemicals

Main Products
Basic chemicals (melamine, sulfuric acid, nitric acid, ammonia, etc.)
Fine chemicals (epoxy compound for LED sealants, solder resist and painting,flame retardants, chlorinated cyanuric acidfor sterilizing, etc.)
Display materials (LCD alignment coating, etc.)
Semiconductor materials (bottom anti-reflective coating for semiconductors, etc.)
Inorganic materials (hard coating materials, electronic information materials, polishing materials, etc.)
Agrochemicals (herbicides, insecticides, fungicides, combination fungicide and insecticide, and plant growth regulators)
Veterinary pharmaceuticals

Pharmaceuticals

LIVALO (anti-cholesterol drugs), etc.
Finetech (custom manufacturing and process services for pharmaceutical companies)

Trading

Trading, etc.

OthersTransportation, landscaping, engineering, fertilizer, etc.

(2) Basis for the 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.
Intersegment 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
FY2014

Net 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)

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

¥

19

¥

338

¥

620

¥

9,796

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

Nissan Chemical Industries, Ltd. Annual Report 201660

Independent Auditor’s Report
Millions of Yen
Chemicals

Performance
Materials

Agricultural
Chemicals

Pharmaceuticals

Trading

Other¥ 25,159
9,187
34,347
3,927
26,643¥ 45,840
5,932
51,773
12,021
40,972¥ 43,695
3,792
47,487
10,831
52,917¥ 8,668
8,668
2,006
11,144¥ 43,014
12,63055,644
1,813
19,672¥ 10,516
10,362
20,879475
10,147

1,427
-

5,124
51

1,411
-

818
-

57
2

386
-

¥ 2,264¥ 5,405¥ 1,298¥ 438

FY2015Net sales
Sales to outside customers
Intersegment sales
Total sales
Segment income (loss)
Segment assets
Other items
Depreciation and amortization
Amortization of goodwill
Increase of property, plant andequipment, and intangible assets

¥

15

¥

441

Adjustment(Note)

Consolidated
total

¥

(41,905)(41,905)(2,469)66,671¥ 176,894
176,894
28,606228,169

403
-

9,629
54

381

¥ 10,245¥

Notes: The adjustments are as follows:
1) The ¥(2,469) million adjustment in segment income includes ¥(361) million in intersegment eliminations and ¥(2,107) million corporate expenses not attributable to any
reportable segment.
The corporate expenses are mainly group administrative expenses which do not belong to any segment.
2) The ¥66,671 million adjustment in segment assets includes ¥(11,172) million in inter-segment asset and liability eliminations and ¥77,843 million in corporate assets not
attributable to any reportable segment.
The corporate assets are mainly group administrative assets which do not belong to any segment.
3) The ¥403 million adjustment in depreciation and amortization is for corporate expenses.
4) The ¥381 million adjustment in increase of property, plant and equipment and intangible assets is for corporate assets.
Thousands of U.S. Dollars
Chemicals

Performance
Materials

Agricultural
Chemicals

Pharmaceuticals

Trading

Other$ 223,258
81,525
304,792
34,848236,427$ 406,780
52,640459,429
106,673363,582$ 387,745
33,650421,395
96,113
469,580$ 76,919
76,91917,801
98,891$ 381,702
112,077
493,779
16,088
174,567$ 93,318
91,951
185,278
4,215
90,043

12,663-45,470453

12,521
-

7,259
-

506
18

3,425
-

$ 20,091$ 47,963$ 11,518$ 3,887133$ 3,913

FY2015Net 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$

Overseas operations, which represent sales to customers outside Japan for FY2015 and FY2014 were as follows:
Millions of Yen
FY2014Japan

Net sales¥ 104,234

FY2015Japan

Net sales¥ 104,032

FY2015Japan

Net sales$ 923,170

Other Asia

Europe and theUnited States

Asia

Europe and theUnited States

Consolidated total

Thousands of U.S. dollars
Europe and the
Asia
United States

Consolidated total

Korea¥ 16,988¥ 32,609

Korea¥ 18,401

Korea$ 163,289¥ 34,398$ 305,244¥ 17,373¥ 20,062$ 178,028

Consolidated total¥ 171,206¥ 176,894$ 1,569,740

Adjustment(Note)

Consolidated
total(371,861)(371,861)(21,910)591,632$ 1,569,740
1,569,740
253,847
2,024,749

3,576-

85,447
479

$

$

3,381

$

90,913

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

Independent Auditor’s Report
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, 2016, 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 withaccounting principles generally accepted in Japan, and for such internal control as management determines is necessary to enable thepreparation 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 inconformity with auditing standards generally accepted in Japan. Those standards require that we plan and perform the audit to obtainreasonable 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 the assessment of the risks of material misstatement of theconsolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevantto the entity's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that areappropriate 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 appropriateness of accounting policies used and the reasonableness of accounting estimates madeby 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 for our 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, 2016, and the consolidated results of theiroperations and their cash flows for the 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, 2016 arepresented 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 28, 2016

16. 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 for FY2015 and FY2014 were as follows:Yen

Net income
Cash dividends

61

U.S. dollars

FY2015FY2014¥ 143.37¥ 44.00¥ 113.99¥ 36.00

Nissan Chemical Industries, Ltd. Annual Report 2016

FY2015$ 1.27$ 0.39Nissan Chemical Industries, Ltd. Annual Report 201662

Independent Auditor’s Report
Millions of Yen
Chemicals

Performance
Materials

Agricultural
Chemicals

Pharmaceuticals

Trading

Other¥ 25,159
9,187
34,347
3,927
26,643¥ 45,840
5,932
51,773
12,021
40,972¥ 43,695
3,792
47,487
10,831
52,917¥ 8,668
8,668
2,006
11,144¥ 43,014
12,63055,644
1,813
19,672¥ 10,516
10,362
20,879475
10,147

1,427
-

5,124
51

1,411
-

818
-

57
2

386
-

¥ 2,264¥ 5,405¥ 1,298¥ 438

FY2015Net sales
Sales to outside customers
Intersegment sales
Total sales
Segment income (loss)
Segment assets
Other items
Depreciation and amortization
Amortization of goodwill
Increase of property, plant andequipment, and intangible assets

¥

15

¥

441

Adjustment(Note)

Consolidated
total

¥

(41,905)(41,905)(2,469)66,671¥ 176,894
176,894
28,606228,169

403
-

9,629
54

381

¥ 10,245¥

Notes: The adjustments are as follows:
1) The ¥(2,469) million adjustment in segment income includes ¥(361) million in intersegment eliminations and ¥(2,107) million corporate expenses not attributable to any
reportable segment.
The corporate expenses are mainly group administrative expenses which do not belong to any segment.
2) The ¥66,671 million adjustment in segment assets includes ¥(11,172) million in inter-segment asset and liability eliminations and ¥77,843 million in corporate assets not
attributable to any reportable segment.
The corporate assets are mainly group administrative assets which do not belong to any segment.
3) The ¥403 million adjustment in depreciation and amortization is for corporate expenses.
4) The ¥381 million adjustment in increase of property, plant and equipment and intangible assets is for corporate assets.
Thousands of U.S. Dollars
Chemicals

Performance
Materials

Agricultural
Chemicals

Pharmaceuticals

Trading

Other$ 223,258
81,525
304,792
34,848236,427$ 406,780
52,640459,429
106,673363,582$ 387,745
33,650421,395
96,113
469,580$ 76,919
76,91917,801
98,891$ 381,702
112,077
493,779
16,088
174,567$ 93,318
91,951
185,278
4,215
90,043

12,663-45,470453

12,521
-

7,259
-

506
18

3,425
-

$ 20,091$ 47,963$ 11,518$ 3,887133$ 3,913

FY2015Net 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$

Overseas operations, which represent sales to customers outside Japan for FY2015 and FY2014 were as follows:
Millions of Yen
FY2014Japan

Net sales¥ 104,234

FY2015Japan

Net sales¥ 104,032

FY2015Japan

Net sales$ 923,170

Other Asia

Europe and theUnited States

Asia

Europe and theUnited States

Consolidated total

Thousands of U.S. dollars
Europe and the
Asia
United States

Consolidated total

Korea¥ 16,988¥ 32,609

Korea¥ 18,401

Korea$ 163,289¥ 34,398$ 305,244¥ 17,373¥ 20,062$ 178,028

Consolidated total¥ 171,206¥ 176,894$ 1,569,740

Adjustment(Note)

Consolidated
total(371,861)(371,861)(21,910)591,632$ 1,569,740
1,569,740
253,847
2,024,749

3,576-

85,447
479

$

$

3,381

$

90,913

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

Independent Auditor’s Report
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, 2016, 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 withaccounting principles generally accepted in Japan, and for such internal control as management determines is necessary to enable thepreparation 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 inconformity with auditing standards generally accepted in Japan. Those standards require that we plan and perform the audit to obtainreasonable 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 the assessment of the risks of material misstatement of theconsolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevantto the entity's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that areappropriate 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 appropriateness of accounting policies used and the reasonableness of accounting estimates madeby 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 for our 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, 2016, and the consolidated results of theiroperations and their cash flows for the 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, 2016 arepresented 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 28, 2016

16. 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 for FY2015 and FY2014 were as follows:Yen

Net income
Cash dividends

61

U.S. dollars

FY2015FY2014¥ 143.37¥ 44.00¥ 113.99¥ 36.00

Nissan Chemical Industries, Ltd. Annual Report 2016

FY2015$ 1.27$ 0.39Nissan Chemical Industries, Ltd. Annual Report 2016

62

Our Network

List of Offices, Plants and Laboratories
Offices

Domestic Production Bases
Nagoya Plant

This plant faces the Port of Nagoya. Here we
manufacture sulfuric acid and high-quality
urea aqueous solution, among other products.

Head Office

Sapporo OfficeSendai Office

Nagoya OfficeOsaka Office

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

Toyama Plant

Greenwood Sendai Ichibancho Building 2-7-12, Ichibancho, Aoba-ku, Sendai 980-0811
Tel: 022-266-4311

This plant is located in the center of Toyama
Plain. Here we manufacture various groups of
products, such as basic chemicals, environmental chemicals, and performance materials.

Osaka Daiichi Seimei Building 1-8-17 Umeda, Kita-ku, Osaka 530-0001
Tel: 06-6346-7200

Maruito Sapporo Building 1-1, Kita-Nijyo-Nishi, Chuo-ku, Sapporo 060-0002
Tel: 011-251-0261
Nagoya KS Building 3-1-18, Taiko, Nakamura-ku, Nagoya 453-0801
Tel: 052-452-8623
JPR Hakata Building 1-4-4 Hakata Ekimae, Hakata-ku, Fukuoka 812-0011
Tel: 092-432-3421

PlantsSodegaura Plant

Sodegaura Plant Goi Works

Saitama Plant

Toyama Plant

Nagoya Plant

Onoda Plant

11-1, Kitasode, Sodegaura, Chiba 299-0266
Tel: 0438-63-2341
235-1, Aza Nishidai, Oaza Jimbohara-machi, Kamisato-machi, Saitama 369-0305
Tel: 0495-34-2810

Onoda Plant

7, Tsukiji-cho, Minato-ku, Nagoya 455-0045
Tel: 052-661-1676

This plant is located in Sanyo-Onoda City,
Yamaguchi. It is our base for the production offine organic synthetic compounds, such as
agrochemicals and pharmaceuticals.

12-17, Goiminamikaigan, Ichihara, Chiba 290-0045
Tel: 0436-22-2110
635 Sasakura, Fuchu-machi, Toyama 939-2753
Tel: 076-433-9602
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

Biological Research Laboratories

1470, Shiraoka, Shiraoka, Saitama 349-0294
Tel: 0480-92-2513

Materials Research Laboratories
488-6, Suzumi-cho, Funabashi, Chiba 274-0052
Tel: 047-774-0200
11-1, Kitasode, Sodegaura, Chiba 299-0266
Tel: 0438-64-2881
635, Sasakura, Fuchu-machi, Toyama 939-2753
Tel: 076-465-7133

Nissan Chemical Group
Domestic Consolidated Subsidiaries
Nissei Corporation

Nissan Butsuryu Co., Ltd.

Nissan Green & Landscape Co., Ltd.

Nissan Engineering, Ltd.

Environmental Technical Laboratories, Ltd.

Nihon Hiryo Co., Ltd.

1-10-5, Nihonbashihon-cho, Chuo-ku, Tokyo 103-0023 Tel: 03-3241-2548■ Sales of chemical products and insurance, and real estate business
3-16-9, Uchikanda, Chiyoda-ku, Tokyo 101-0047 Tel: 03-3256-4031■ Landscaping and civil engineering
2-11-7, Kohoku, Adachi-ku, Tokyo 123-0872 Tel: 03-3898-6643■ Environmental analysis

1-10-5, Nihonbashihon-cho, Chuo-ku, Tokyo 103-0023 Tel: 03-5255-6901■ Transportation
1-28-6, Kameido, Koto-ku, Tokyo 136-0071 Tel: 03-3636-7578■ Plant engineering services
1-10-5, Nihonbashihon-cho, Chuo-ku, Tokyo 103-0023 Tel: 03-3241-4231■ Fertilizers and agrochemicals

Entities accounted for using Equity Method
Sun Agro Co., Ltd.

Saitama Plant

This plant is located in northern Saitama. Here
we manufacture agricultural formulations.
63

Nissan Chemical Industries, Ltd. Annual Report 2016

Sodegaura Plant Goi Works
This plant is located in the industrial area in
Sodegaura City, Chiba. It is our base for the
production of performance materials.

1-10-5, Nihonbashihon-cho, Chuo-ku, Tokyo 103-0023
Tel: 03-3510-3601■ Fertilizers and agrochemicals

Clariant Catalysts (Japan) K.K.

2-28-8, Honkomagome, Bunkyo-ku, Tokyo 113-0021
Tel: 03-5977-7300■ Catalysts for petrochemical and petroleum products

Nissan Chemical Industries, Ltd. Annual Report 201664

Our Network

List of Offices, Plants and Laboratories
Offices

Domestic Production Bases
Nagoya Plant

This plant faces the Port of Nagoya. Here we
manufacture sulfuric acid and high-quality
urea aqueous solution, among other products.

Head Office

Sapporo OfficeSendai Office

Nagoya OfficeOsaka Office

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

Toyama Plant

Greenwood Sendai Ichibancho Building 2-7-12, Ichibancho, Aoba-ku, Sendai 980-0811
Tel: 022-266-4311

This plant is located in the center of Toyama
Plain. Here we manufacture various groups of
products, such as basic chemicals, environmental chemicals, and performance materials.

Osaka Daiichi Seimei Building 1-8-17 Umeda, Kita-ku, Osaka 530-0001
Tel: 06-6346-7200

Maruito Sapporo Building 1-1, Kita-Nijyo-Nishi, Chuo-ku, Sapporo 060-0002
Tel: 011-251-0261
Nagoya KS Building 3-1-18, Taiko, Nakamura-ku, Nagoya 453-0801
Tel: 052-452-8623
JPR Hakata Building 1-4-4 Hakata Ekimae, Hakata-ku, Fukuoka 812-0011
Tel: 092-432-3421

PlantsSodegaura Plant

Sodegaura Plant Goi Works

Saitama Plant

Toyama Plant

Nagoya Plant

Onoda Plant

11-1, Kitasode, Sodegaura, Chiba 299-0266
Tel: 0438-63-2341
235-1, Aza Nishidai, Oaza Jimbohara-machi, Kamisato-machi, Saitama 369-0305
Tel: 0495-34-2810

Onoda Plant

7, Tsukiji-cho, Minato-ku, Nagoya 455-0045
Tel: 052-661-1676

This plant is located in Sanyo-Onoda City,
Yamaguchi. It is our base for the production offine organic synthetic compounds, such as
agrochemicals and pharmaceuticals.

12-17, Goiminamikaigan, Ichihara, Chiba 290-0045
Tel: 0436-22-2110
635 Sasakura, Fuchu-machi, Toyama 939-2753
Tel: 076-433-9602
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

Biological Research Laboratories

1470, Shiraoka, Shiraoka, Saitama 349-0294
Tel: 0480-92-2513

Materials Research Laboratories
488-6, Suzumi-cho, Funabashi, Chiba 274-0052
Tel: 047-774-0200
11-1, Kitasode, Sodegaura, Chiba 299-0266
Tel: 0438-64-2881
635, Sasakura, Fuchu-machi, Toyama 939-2753
Tel: 076-465-7133

Nissan Chemical Group
Domestic Consolidated Subsidiaries
Nissei Corporation

Nissan Butsuryu Co., Ltd.

Nissan Green & Landscape Co., Ltd.

Nissan Engineering, Ltd.

Environmental Technical Laboratories, Ltd.

Nihon Hiryo Co., Ltd.

1-10-5, Nihonbashihon-cho, Chuo-ku, Tokyo 103-0023 Tel: 03-3241-2548■ Sales of chemical products and insurance, and real estate business
3-16-9, Uchikanda, Chiyoda-ku, Tokyo 101-0047 Tel: 03-3256-4031■ Landscaping and civil engineering
2-11-7, Kohoku, Adachi-ku, Tokyo 123-0872 Tel: 03-3898-6643■ Environmental analysis

1-10-5, Nihonbashihon-cho, Chuo-ku, Tokyo 103-0023 Tel: 03-5255-6901■ Transportation
1-28-6, Kameido, Koto-ku, Tokyo 136-0071 Tel: 03-3636-7578■ Plant engineering services
1-10-5, Nihonbashihon-cho, Chuo-ku, Tokyo 103-0023 Tel: 03-3241-4231■ Fertilizers and agrochemicals

Entities accounted for using Equity Method
Sun Agro Co., Ltd.

Saitama Plant

This plant is located in northern Saitama. Here
we manufacture agricultural formulations.
63

Nissan Chemical Industries, Ltd. Annual Report 2016

Sodegaura Plant Goi Works
This plant is located in the industrial area in
Sodegaura City, Chiba. It is our base for the
production of performance materials.

1-10-5, Nihonbashihon-cho, Chuo-ku, Tokyo 103-0023
Tel: 03-3510-3601■ Fertilizers and agrochemicals

Clariant Catalysts (Japan) K.K.

2-28-8, Honkomagome, Bunkyo-ku, Tokyo 113-0021
Tel: 03-5977-7300■ Catalysts for petrochemical and petroleum products

Nissan Chemical Industries, Ltd. Annual Report 201664

Corporate History

Our Network

History of Nissan Chemical Industries, Ltd.

Overseas Bases (Consolidated Subsidiaries)

We were founded in 1887 as Tokyo Jinzo Hiryo, Japan's first manufacturer of chemical fertilizers, by visionaries of the Meiji Period, namely Jokichi
Takamine, Eiichi Shibusawa, Takashi Masuda, and others.
We later merged with Kanto Sanso, Nippon Kagaku Hiryo, and other companies, and eventually changed the company name to Dainippon Jinzo
Hiryo. In 1937, we made a comprehensive transfer of our assets, etc., to Nippon Kagaku Kogyo, which was affiliated with Nippon Sangyo Corporation,and then changed the company name to Nissan Chemical Industries, Ltd., the name by which we are known today (hereafter, the “Company”).

History

Nissan Chemical Europe S.A.R.L

Parc d'affaires de Crécy - 10A rue de la Voie Lactée
69370 Saint Didier au Mont d'Or, France
Tel: 33-4-37-64-40-20■ Sales of agrochemicals

NCK Co., Ltd.

127, Chupalsandan-ro, Paengseong-eup, Pyeongtaek-si,
Gyeonggi-do, 17998, Korea
Tel: 82-31-691-7044■ R&D, production and sales ofelectronic materials

February 1887
July 1889
March 1891
December 1895
November 1897
December 1907
July 1910
February 1919
June 1922
May 1923

April 1928
February 1931
October 1932
December 1937
April 1943
April 1945
May 1949
July 1949
January 1965
November 1968
August 1969
December 1969
June 1988
October 1989
July 1996
April 1998
April 2001
June 2001
October 2001

Nissan Chemical America Corporation
10333 Richmond Avenue, Suite 1100, Houston,
Texas 77042, U.S.A.
Tel: 1-713-532-4745■ R&D, production and sales of inorganic materials

65

Nissan Chemical Industries, Ltd. Annual Report 2016

July 2002
December 2002
February 2005
January 2010
October 2010
June 2013
October 2013
January 2014
October 2014

Tokyo Jinzo Hiryo is established .
Nippon Seimi Seizo (later renamed Nippon Kagaku Hiryo) is established.
The Onoda Plant of Nippon Seimi Seizo (now the Onoda Plant of the Company) is completed.
Oji Seizosho (later renamed Kanto Sanso) is established.
The Oji Plant of Kanto Sanso (which later becomes the Oji Plant of the Company) is completed.
The Komatsugawa Plant of Tokyo Jinzo Hiryo (which later becomes Tokyo Nissan Kagaku) is completed.
Tokyo Jinzo Hiryo is renamed Dainippon Jinzo Hiryo.
The Nagoya Plant (now the Nagoya Plant of the Company) of Nippon Jinzo Hiryo (later merged with Nippon Kagaku Hiryo) is completed.
Taisho Unsou (now Nissan Butsuryu Co., Ltd.) is established.
Dainippon Jinzo Hiryo merges with Kanto Sanso and Nippon Kagaku Hiryo.
The Research Section of the Engineering Department is established at the head office and the Research Group is established at the Oji Plant. They serve as theresearch and development departments.
The Toyama Plant of Dainippon Jinzo Hiryo (now the Toyama Plant of the Company) is completed.
The fertilizer testing station of Dainippon Jinzo Hiryo (Koyasu, Yokohama-shi) is relocated to Shiraoka (now the Biological Research Laboratories of theCompany).
Bunka Nohosha (now Nissei Corporation) is established.
Dainippon Jinzo Hiryo transfers assets, etc. to Nippon Kagaku Kogyo and then the latter is renamed Nissan Chemical Industries, Ltd.
Nissan Chemical Industries, Ltd. is acquired by Nippon Mining Co., Ltd. and becomes its chemical section.
Nippon Oil & Fats Co., Ltd. takes over the chemical section of Nippon Mining Co., Ltd. in a transfer of business and changes its name to Nissan Chemical
Industries, Ltd.
The Company is listed on the Japanese stock exchange after it resumes operation.
The Company spins off its oil and fats section (now NOF Corporation) in accordance with the Enterprise Reorganization Act.
The Company establishes Nissan Petrochemicals Ltd., thereby entering the petrochemical business.
Tokyo Nissan Kagaku relocates its plant to Kamisato-mura, Saitama (now the Saitama Plant of the Company).
The Company constructs the Sodegaura Plant following the formulation of a plan to close and relocate the Oji Plant.
Production at the Oji Plant is discontinued and the plant is closed.
The Company transfers its petrochemical section to Kyowa Hakko Kogyo Co., Ltd. (now KH Neochem Co., Ltd.) and withdraws from the petrochemical business.
The Company establishes Nissan Chemical America Corporation (NCA) in the United States.
The Company establishes Nissan Chemical Houston Corporation (NCH) in the United States.
The Company acquires Tokyo Nissan Kagaku as its Saitama Plant.
The Company establishes Nissan Chemical Korea Co. Ltd. (now, NCK Co. Ltd.) in South Korea.
The Company reorganizes its R&D facilities and sets up the Chemical Research Laboratories, Electronic Materials Research Laboratories, and Specialty
Materials Research Laboratories.
The Company establishes Nissan-Agri Co., Ltd. (now Sun Agro Co., Ltd.), thereby spinning off its fertilizer business and integrating group companies related tothe business.
The Company acquires the domestic herbicide business from Monsanto Japan Limited.
The Company establishes Nissan Chemical Europe S.A.R.L. (NCE) in France.
The Company establishes Nissan Chemical Agro Korea Ltd. (NAK) in South Korea.
The Company acquires a fungicide from Dow AgroSciences LLC of the United States.
The Company establishes Nissan Chemical Taiwan Co., Ltd. (NCT) in Taiwan.
The Company acquires Thin Materials GmbH (Germany).
The Company merges NCH into NCA.
The Company establishes Nissan Chemical Product (Shanghai) Co., Ltd. (NCS) in China.
The Company reorganizes the Electronic Materials Research Laboratories and Inorganic Materials Research Laboratories into the Materials ResearchLaboratories.

Nissan Chemical Industries, Ltd. Annual Report 201666

Corporate History

Our Network

History of Nissan Chemical Industries, Ltd.

Overseas Bases (Consolidated Subsidiaries)

We were founded in 1887 as Tokyo Jinzo Hiryo, Japan's first manufacturer of chemical fertilizers, by visionaries of the Meiji Period, namely Jokichi
Takamine, Eiichi Shibusawa, Takashi Masuda, and others.
We later merged with Kanto Sanso, Nippon Kagaku Hiryo, and other companies, and eventually changed the company name to Dainippon Jinzo
Hiryo. In 1937, we made a comprehensive transfer of our assets, etc., to Nippon Kagaku Kogyo, which was affiliated with Nippon Sangyo Corporation,and then changed the company name to Nissan Chemical Industries, Ltd., the name by which we are known today (hereafter, the “Company”).

History

Nissan Chemical Europe S.A.R.L

Parc d'affaires de Crécy - 10A rue de la Voie Lactée
69370 Saint Didier au Mont d'Or, France
Tel: 33-4-37-64-40-20■ Sales of agrochemicals

NCK Co., Ltd.

127, Chupalsandan-ro, Paengseong-eup, Pyeongtaek-si,
Gyeonggi-do, 17998, Korea
Tel: 82-31-691-7044■ R&D, production and sales ofelectronic materials

February 1887
July 1889
March 1891
December 1895
November 1897
December 1907
July 1910
February 1919
June 1922
May 1923

April 1928
February 1931
October 1932
December 1937
April 1943
April 1945
May 1949
July 1949
January 1965
November 1968
August 1969
December 1969
June 1988
October 1989
July 1996
April 1998
April 2001
June 2001
October 2001

Nissan Chemical America Corporation
10333 Richmond Avenue, Suite 1100, Houston,
Texas 77042, U.S.A.
Tel: 1-713-532-4745■ R&D, production and sales of inorganic materials

65

Nissan Chemical Industries, Ltd. Annual Report 2016

July 2002
December 2002
February 2005
January 2010
October 2010
June 2013
October 2013
January 2014
October 2014

Tokyo Jinzo Hiryo is established .
Nippon Seimi Seizo (later renamed Nippon Kagaku Hiryo) is established.
The Onoda Plant of Nippon Seimi Seizo (now the Onoda Plant of the Company) is completed.
Oji Seizosho (later renamed Kanto Sanso) is established.
The Oji Plant of Kanto Sanso (which later becomes the Oji Plant of the Company) is completed.
The Komatsugawa Plant of Tokyo Jinzo Hiryo (which later becomes Tokyo Nissan Kagaku) is completed.
Tokyo Jinzo Hiryo is renamed Dainippon Jinzo Hiryo.
The Nagoya Plant (now the Nagoya Plant of the Company) of Nippon Jinzo Hiryo (later merged with Nippon Kagaku Hiryo) is completed.
Taisho Unsou (now Nissan Butsuryu Co., Ltd.) is established.
Dainippon Jinzo Hiryo merges with Kanto Sanso and Nippon Kagaku Hiryo.
The Research Section of the Engineering Department is established at the head office and the Research Group is established at the Oji Plant. They serve as theresearch and development departments.
The Toyama Plant of Dainippon Jinzo Hiryo (now the Toyama Plant of the Company) is completed.
The fertilizer testing station of Dainippon Jinzo Hiryo (Koyasu, Yokohama-shi) is relocated to Shiraoka (now the Biological Research Laboratories of theCompany).
Bunka Nohosha (now Nissei Corporation) is established.
Dainippon Jinzo Hiryo transfers assets, etc. to Nippon Kagaku Kogyo and then the latter is renamed Nissan Chemical Industries, Ltd.
Nissan Chemical Industries, Ltd. is acquired by Nippon Mining Co., Ltd. and becomes its chemical section.
Nippon Oil & Fats Co., Ltd. takes over the chemical section of Nippon Mining Co., Ltd. in a transfer of business and changes its name to Nissan Chemical
Industries, Ltd.
The Company is listed on the Japanese stock exchange after it resumes operation.
The Company spins off its oil and fats section (now NOF Corporation) in accordance with the Enterprise Reorganization Act.
The Company establishes Nissan Petrochemicals Ltd., thereby entering the petrochemical business.
Tokyo Nissan Kagaku relocates its plant to Kamisato-mura, Saitama (now the Saitama Plant of the Company).
The Company constructs the Sodegaura Plant following the formulation of a plan to close and relocate the Oji Plant.
Production at the Oji Plant is discontinued and the plant is closed.
The Company transfers its petrochemical section to Kyowa Hakko Kogyo Co., Ltd. (now KH Neochem Co., Ltd.) and withdraws from the petrochemical business.
The Company establishes Nissan Chemical America Corporation (NCA) in the United States.
The Company establishes Nissan Chemical Houston Corporation (NCH) in the United States.
The Company acquires Tokyo Nissan Kagaku as its Saitama Plant.
The Company establishes Nissan Chemical Korea Co. Ltd. (now, NCK Co. Ltd.) in South Korea.
The Company reorganizes its R&D facilities and sets up the Chemical Research Laboratories, Electronic Materials Research Laboratories, and Specialty
Materials Research Laboratories.
The Company establishes Nissan-Agri Co., Ltd. (now Sun Agro Co., Ltd.), thereby spinning off its fertilizer business and integrating group companies related tothe business.
The Company acquires the domestic herbicide business from Monsanto Japan Limited.
The Company establishes Nissan Chemical Europe S.A.R.L. (NCE) in France.
The Company establishes Nissan Chemical Agro Korea Ltd. (NAK) in South Korea.
The Company acquires a fungicide from Dow AgroSciences LLC of the United States.
The Company establishes Nissan Chemical Taiwan Co., Ltd. (NCT) in Taiwan.
The Company acquires Thin Materials GmbH (Germany).
The Company merges NCH into NCA.
The Company establishes Nissan Chemical Product (Shanghai) Co., Ltd. (NCS) in China.
The Company reorganizes the Electronic Materials Research Laboratories and Inorganic Materials Research Laboratories into the Materials ResearchLaboratories.

Nissan Chemical Industries, Ltd. Annual Report 201666

Corporate Profile(As of March 31, 2016)
Corporate Name
Head Office
FoundedCommon Stock
Number of Employees
Stock Listing
Transfer Agent

Stock Information(As of March 31, 2016)
Nissan Chemical Industries, Ltd.
7-1, Kanda Nishiki-cho 3-chome, Chiyoda-ku, Tokyo 101-0054, Japan TEL : 03-3296-8111
1887
156,000,000 shares ¥18,942 million
Consolidated : 2,371
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 28, 2016)
Representative Director, President & CEO

Kojiro Kinoshita

Director, Senior Executive Vice President

Junichi Miyazaki

Director, Senior Managing Executive Officer

Kiminori Hirata

Total Number of Authorized Shares
Shares of Common Stock Issued
Shareholders

Major Shareholders (Top Five Companies)

Status of Distribution by Shareholder

Tsuneo Higuchi
Foreigners
18.1%

Katsuaki Miyaji
Tisato Kajiyama
Tadashi Ohe
Corporate Auditors

Sumio Kondo

Noriyuki Katayama
Executive Officers

Satoru Hamamoto
Nobutomo Tsuruzoe
Hidenori Takishita
Takeshi Iwata

14.1
7.9

7,769

5.0

4,800
3,982

3.1
2.6

Breakdown by Number of Shares Held
Less than 1,000 shares 1.0%

More than
500,000
shares72.6%

Other domestic corporations
14.0%
Securities companies
4.2%

Yasuyuki Nakajima
Norihiro Suzuki

21,69912,143

Treasury shares
Less than 10,000 shares
1.0%
5.8%
Less than 100,000 shares
6.6%
Less than
500,000 shares
Financial
14.0%
institutions
50.6%

Individuals / Other
12.1%

Masataka Hatanaka

Outside Director

Ratio of the number
Number ofof held shares to theshares held total
number of issued(1,000 shares)
shares (%)

The Master Trust Bank of Japan, Ltd. (Trust Account)
Japan Trustee Services Bank, Ltd. (Trust Account)
Trust & Custody Services Bank, Ltd.
as trustee for the Mizuho Trust & Banking Co., Ltd.
Retirement Benefit Trust
The Norinchukin Bank
Nissan Chemical Industries, Ltd. Customer Shareholders Association

Hiroyoshi Fukuro
Director, Managing Executive Officer

360,000,000
156,000,000
11,661

Stock Quote and Chart (April 2014-March 2016)
(¥)
3,500

3,000

2,500

Hiroshi Onitsuka
Hitoshi Suzuki
Yuji Nishida
Takashi Honda
Hironori Yoshida(Thousands)
30,0002,000

25,0001,500

20,00015,0001,000

Shinsuke Yagi
Motoaki Ishikawa
Kazuhiko Ohrai

67

Nissan Chemical Industries, Ltd. Annual Report 2016

10,000
500

0

5,000
2014/
4

5

6

7

8

9

10

11

12

2015/
1

2

3

4

5

6

7

8

9

10

11

12

2016/
1

2

3

0

Nissan Chemical Industries, Ltd. Annual Report 201668

Corporate Profile(As of March 31, 2016)
Corporate Name
Head Office
FoundedCommon Stock
Number of Employees
Stock Listing
Transfer Agent

Stock Information(As of March 31, 2016)
Nissan Chemical Industries, Ltd.
7-1, Kanda Nishiki-cho 3-chome, Chiyoda-ku, Tokyo 101-0054, Japan TEL : 03-3296-8111
1887
156,000,000 shares ¥18,942 million
Consolidated : 2,371
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 28, 2016)
Representative Director, President & CEO

Kojiro Kinoshita

Director, Senior Executive Vice President

Junichi Miyazaki

Director, Senior Managing Executive Officer

Kiminori Hirata

Total Number of Authorized Shares
Shares of Common Stock Issued
Shareholders

Major Shareholders (Top Five Companies)

Status of Distribution by Shareholder

Tsuneo Higuchi
Foreigners
18.1%

Katsuaki Miyaji
Tisato Kajiyama
Tadashi Ohe
Corporate Auditors

Sumio Kondo

Noriyuki Katayama
Executive Officers

Satoru Hamamoto
Nobutomo Tsuruzoe
Hidenori Takishita
Takeshi Iwata

14.1
7.9

7,769

5.0

4,800
3,982

3.1
2.6

Breakdown by Number of Shares Held
Less than 1,000 shares 1.0%

More than
500,000
shares72.6%

Other domestic corporations
14.0%
Securities companies
4.2%

Yasuyuki Nakajima
Norihiro Suzuki

21,69912,143

Treasury shares
Less than 10,000 shares
1.0%
5.8%
Less than 100,000 shares
6.6%
Less than
500,000 shares
Financial
14.0%
institutions
50.6%

Individuals / Other
12.1%

Masataka Hatanaka

Outside Director

Ratio of the number
Number ofof held shares to theshares held total
number of issued(1,000 shares)
shares (%)

The Master Trust Bank of Japan, Ltd. (Trust Account)
Japan Trustee Services Bank, Ltd. (Trust Account)
Trust & Custody Services Bank, Ltd.
as trustee for the Mizuho Trust & Banking Co., Ltd.
Retirement Benefit Trust
The Norinchukin Bank
Nissan Chemical Industries, Ltd. Customer Shareholders Association

Hiroyoshi Fukuro
Director, Managing Executive Officer

360,000,000
156,000,000
11,661

Stock Quote and Chart (April 2014-March 2016)
(¥)
3,500

3,000

2,500

Hiroshi Onitsuka
Hitoshi Suzuki
Yuji Nishida
Takashi Honda
Hironori Yoshida(Thousands)
30,0002,000

25,0001,500

20,00015,0001,000

Shinsuke Yagi
Motoaki Ishikawa
Kazuhiko Ohrai

67

Nissan Chemical Industries, Ltd. Annual Report 2016

10,000
500

0

5,000
2014/
4

5

6

7

8

9

10

11

12

2015/
1

2

3

4

5

6

7

8

9

10

11

12

2016/
1

2

3

0

Nissan Chemical Industries, Ltd. Annual Report 2016

68

NISSAN CHEMICALANNUAL REPORT 2016

ANNUAL REPORT 2016
For the year ended M arch 31, 2016

NISSAN CHEMICAL INDUSTRIES, LTD.
Printed in Japan