Annual Report 2017
“Providing affluence and comfort to people
and society, with our unique technology”

B

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2017

Nippon Shokubai Group Mission:
Providing afﬂuence and comfort to people and society, with our unique technology.

Management Commitment:
We conduct all of our corporate activities based upon a deep respect for humanity.
We aim at coexisting with society, and working in harmony with the environment.
We pursue technologies that will create the future.
We act on the global stage.

Corporate Credo
Safety takes priority over production.

Code of Conduct:
In the belief that it is our social responsibility to conduct business based upon the principles of complianceand self-responsibility for the sake of proper social development, we have set forth the following basic
corporate behavior guidelines in the "Nippon Shokubai Code of Conduct."
1. Guided by Nippon Shokubai Group Mission of", we will conduct all of our"actions as a good corporate citizen.
2. We will comply with relevant laws both inside andoutside of Japan, and act in accordance with in-house
regulations.
3. We will create and nurture a sound, vibrant workplace,where each individual can hone their professional
competence and ﬁnd fulﬁllment in their career.
4. We will develop and market products and services
that are both safe and useful, based upon an accurate
understanding of social demands.
5. We will commit ourselves to eliminating labor hazards
and accidents, and constantly strive to protect the
global environment.

6. We will conduct business based on fair and open
competition.
7. We will take a ﬁrm stance when dealing with unlawfulor antisocial groups.
8. We will ensure frequent communications with ourshareholders and members of society in general, andguarantee the appropriate disclosure of corporate
information.
9. With respect for the culture and customs of every
nation/region we serve, we will contribute to theirdevelopment and wellbeing through community-based
business undertakings.
10. We will ensure the solid and sustainable developmentof the company through business undertakings based
soundly upon the above action guidelines.

Contents

01 Consolidated Financial Highlights
02 Messages from President
04 Special Feature
06 Description of Business
08 Governance System

Based on Responsible Care
11 CSR
Concept
14 Ten-Years Summary
Discussion and
16 Management
Analysis of Operation
20 Financial Statements
54 Corporate Data

Consolidated
Financial
Highlights

Messages fromPresident

Special Feature

Description ofBusiness

Governance
SystemCSR Based on
Responsible
Care Concept

Management
Discussion
and Analysis ofOperation

Ten-Years
Summary

Financial
Statements

Corporate Data

Consolidated Financial Highlights
Nippon Shokubai Co., Ltd. and Consolidated Subsidiaries

Net sales

Operating proﬁt

293,970¥¥

million21,151
million9.0% Down

32.3% Down
Total assets

433,610¥

million

Net assets¥

292,275

6.3% Upmillion

5.9%

2.4 points Down

3.5% Up

Increase in sales of basic chemicals
and functional chemicals
decrease in sales of environment andcatalyst segment

Mainly, increase in sales volume

ROA

Net sales are projected to increase as sales volume is forecast
to increase, centered on functional chemicals, and due tohigher selling prices in line with higher costs of raw materials
in both basic chemicals and functional chemicals

Decrease in dividend income anddecrease in share of proﬁt of entities
accounted for using equity method

Increase in income taxes

01

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NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2017

Messages from President

The Nippon Shokubai Group has targeted the following goal in the run-up to fiscal 2025:
Becoming “An innovative chemical company that provides new value for people’s lives”
and has since been promoting our long-term business plan for the period between fiscal
2014 and 2020 called “Reborn Nippon Shokubai 2020”.
We renamed the latter-half medium-term business plan as “Reborn Nippon Shokubai
2020 NEXT” and is set for roll-out over four years: starting from fiscal 2017, expressing
our aspiration to accomplish our true regeneration toward transformation and leap forthe next generation, while leveraging the basic principle above.
Under the company credo: “Safety takes priority over production”, we will continue toadvocate a policy which cites safety and stable operation as our key management baseand aim to become “A company gaining further public trust as a responsible chemicalcompany”. While further reinforcing our existing business fields, we will also focus onsustained growth by challenging new fields where we can leverage our strength with asense of urgency as well as performance chemicals, green energy materials, health andmedical fields.

President

Yujiro Goto

Despite finding ourselves within the so-called era of uncertainty or one in which weare never sure what may happen, our Group will be strongly implementing our Groupmission: “– Providing affluence and comfort to people
and society, with our unique technology” by precisely grasping social needs and creating
new products and services to provide in a timely manner.
We would appreciate your continued understanding and cooperation.

Consolidated
Financial
Highlights

Messages fromPresident

Description ofSpecial Feature BusinessGovernance
SystemCSR Based on
Responsible
Care Concept

Ten-Years
Summary

Management
Discussion
and Analysis ofOperation

Financial
Statements

Special Feature

Mission/Management Commitment
Nippon Shokubai Group Mission

Providing afﬂuence and comfort to people and society, with our unique technology

Management Commitment
We conduct all of our corporate activities based upon a deep respect for humanity.
We aim at coexisting with society, and working in harmony with the environment.
We pursue technologies that will create the future.
We act on the global stage.

Corporate Credo

Safety takes priority over production.

Corporate Data

03

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NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2017

The 2nd Medium-term Business Plan: “Reborn Nippon Shokubai 2020 NEXT”

Implementing Our Vision for 2025
After reviewing our 1st Medium-term Business Plan and analyzing theongoing changes in the world around us, we have introduced our 2nd
Medium-term Business Plan titled “Reborn Nippon Shokubai 2020
NEXT.” This is a concrete action plan for achieving our “Targets for2020” in order to realize our “Vision for 2025.”
In order to achieve our targets for 2020, we are focused on adheringto the plans that will implement our established corporate strategy.
—
We intend to uphold our Group Mission of “Providing afﬂuence and comfort to people and society, with our unique
technology.” We will work on achieving the plan.
In terms of implementing this plan, all our employees will workto achieve our targets by maintaining a crisis consciousness andremaining aware of their responsibilities as the individuals in charge.
By encouraging all employees to think and act on their own with asense of duty, we are creating “a company that everybody can be proudof.”* By 2020, the ﬁnal ﬁscal year of our 2nd Medium-term Business
Plan, our aim is to make it possible to anticipate our Groupʼs assured
growth over the subsequent decade.
* A company that everybody can be proud of
1. A company that promotes work safety and peace of mind
2. A company that rewards people who make their best efforts and achieve results
3. A company that people can be proud to work for

Targets for

2020

2017
■ Corporate Strategy

In our 2nd Medium-term Business Plan, “Reborn Nippon Shokubai
2020 NEXT,” we will work on implementing our plan by adopting thefollowing Business Policies, Priority Challenge, and Basic Posture.
Business Policies○ Focusing on proﬁtability over sales○ Safe, reliable production activities■ The 2nd MTP (FY2017-2020) :Accelerate creation of new businesses and products
Considering potential market, familiarity to us and social issues, wechose 3 business sectors (8 business areas) as our new business ﬁeld.

Target sectors

Priority challenge○ Survival of SAP business○ Launch of new businesses in high-growthpotential markets for our future key driver

ICT

Basic Posture

Social issue

Life Sciences

・Semiconductor
・Imaging

Create products and services which market needs,
and provide the products and the services when market needs.

・Medical materials
・Healthcare
・Cosmetics

Market needs

・Mobility
・Energy conversion
・Water

SAP: Superabsorbent polymers

Energy & Environment

Policies to priority challenge○ Strengthen competitiveness of SAP business・Improve proﬁtability (Survival project） ・Strengthen R&D○ Accelerate creation of new businesses and products

Target to continuous growth○ Develop an active corporate team and organization○ Enhance the conﬁdence of stakeholders○ Strengthen Group management

Create new businesses with new technologies based on
our core technologies
Target○ Enter into each sector with core product by 2020
(sales amount by 1 billion yen each)○ Establish business in each sector by 2025
(sales amount by 10 billion yen each)*We promote O/I and M&A in order to achieve the target above.

Consolidated
Financial
Highlights

Messages fromPresident

Description ofSpecial Feature BusinessGovernance
SystemCSR Based on
Responsible
Care Concept

Ten-Years
Summary

Management
Discussion
and Analysis ofOperation

Financial
Statements

Corporate Data

Vision for2025

Vision for 2025

An innovative chemical company that provides
new value for peopleʼs lives
Segment: Existing businesses, such as EO, AA/SAP etc., will be strengthened more.
Reconﬁrmed

Area:

Performance chemicals, new energy materials, health and medical materials and/or any other new
businesses* will contribute more to corporate proﬁt. As a result, these expected businesses will be
expanded much more and be higher position in comparison to the existing businesses.
Accelerate business development continuously throughout the global market.

Strength: Employ our competencies in R&D, production technologies and marketing and maximize the synergy fromsuch activities.
*New businesses : businesses in the market which we could not enter into yet, or businesses in the market which is not formed yet.

■ Targets for 2020

Business portfolio

In keeping with our “Vision for 2025,” we adopted the concrete targets
shown below for 2020. We later reviewed our targets because thefacts on which we had based our initial assumptions for our long-termbusiness plan had deviated considerably, as seen in the signiﬁcantdecline in the naphtha price, for example.

New business

10%

Environment &Catalysts

Sales
400 billion yen（Incl. new products* (39 billion)
and new businesses (38 billion))

7.5%

9%

49%

Assumptions

65,000yen/kl

2nd MTP (FY2017-2020)

42,000yen/kl

Exchangerate(US$)90 billion yen

Basic
Chemicals

Exchangerate(EUR)

100 yen
110 yen

130 yen
115 yenManagement resources (4 years cumulative total)
Capital investment

37%

FY 2020

Functional
Chemicals

54%

Breakdown for sales deviation
Functional chemicals
billion yen

38

FY 2016

Basic chemicals
billion yen

19.4

Environment & Catalysts
billion yen

10.6

New businessbillion yen

38

Strategic investment

60 billion yen（New business includes health and medical business）

R&D expenses

Employees as of the end of FY2020

FY 2016

4-5% to sales

Employees as of the end of FY2016 : 4,161

294 billion yen

57 billion yen

Functional
Chemicals

Environment &Catalysts*Total sales of products launched within the last ﬁve years, excluding SAP

LTP (FY2014-2020)(established in 2014)

32%

ROA

Ordinary income
40 billion yen

Domestic
naphtha price

Basic
Chemicals

9%

Management indexes and numerical targets

4,600

Sales

+106 billion yen

FY 2020Sales

400 billion yen

05

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NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2017

Description of Business

Descriptionof Business•Ethylene oxide (EO)
•Ethylene glycol•Ethanolamine•Secondary alcohol
ethxylates•Polymers forconcrete admixture•Water-soluble
polymers•Acrylic acid
•Acrylates•Specialty acrylates•Specialty methacrylates•Superabsorbent
polymers•Process catalysts

Basic Chemicals
Sales of acrylic acids and acrylates
decreased due to a decline in sales
prices in Japan in line with a drop in
raw materials costs and a stronger
yen, and to falling sales prices outside
Japan caused by deteriorating market
conditions in Southeast Asia, amid astate where global supply continues
to exceed demand, despite heightenedsales volume.
Sales of ethylene oxide declined due

to a drop in sales prices accompanying
lower raw materials costs, despite
increased sales volume.
Sales of ethylene glycol decreased
due to effects such as a decline inoverseas market conditions and astronger yen, despite increased sales
volume.
Sales of ethanolamine increased due
to increased sales volume despite a dropin sales prices accompanying lower raw•Maleic anhydride& Derivatives•Resins for paints& adhesives•Acrylic resin for
optical materials•Electrolyte Sheets
for SOFC(Solid Oxide Fuel Cell)•Automotive catalysts•De-NOx & dioxins
decomposition
catalysts

Consolidated
Financial
Highlights

Messages fromPresident

Special Feature

Description ofBusinessmaterials costs.
Sales of secondary alcohol
ethoxylates declined due to declined
sales volume and falling sales prices
accompanying lower raw materials costs.

Governance
SystemCSR Based on
Responsible
Care Concept

Ten-Years
Summary

As a result of the above, net sales inthe basic chemicals segment decreased
8.6% year-on-year to 107,580 million yen.
Operating proﬁt fell 7.3% year-onyear, to 8,207 million yen. This was due

Management
Discussion
and Analysis ofOperation

Financial
Statements

Corporate Data

to factors such as a contraction in the
spread, which outweighed an increase inproduction and sales volume and lower
processing costs.

Functional Chemicals
Sales of superabsorbent polymers fell
due to the yen appreciation and lower
sales prices that reﬂected a decline
in raw materials costs, despite higher
sales volume.
Sales of electronic informationmaterial, ethyleneimine derivatives andadhesive products increased due tohigher sales volume.
Sales of special acrylates increased
due to higher sales volume, even thoughsales prices declined as a result ofeffects such as a decline in overseas
market conditions and a stronger yen.
Sales of maleic anhydride decreased
due to lower sales volume and a drop insales prices accompanying lower raw
materials costs.
Sales of resin modiﬁers fell due toa decline in sales prices that reﬂected

lower raw materials costs, even thoughsales volume increased.
Sales of iodine compounds declined
as a result of effects such as a decline inoverseas market conditions and a stronger
yen, despite increased sales volume.
Sales of polymers for concrete
admixture and water-soluble polymers
for raw materials of detergentsdecreased due to a lower sales volume
and the yen appreciation.
Sales of resins for paints declined
due to the product mix.
As a result, net sales in thefunctional chemicals segment fell 10.0%
year-on-year to 159,961 million yen.
Operating proﬁt decreased 43.4%
year-on-year to 12,119 million yen. Althoughproduction and sale volume increased andprocessing costs and selling, general,

Environment & Catalysts
Sales of automotive catalysts decreased
due to decreased sales prices thatreﬂected the depreciation of sales prices
of precious metals.
Sales of materials for lithium-ion
batteries, fuel cell materials and wet
oxidation catalysts rose due to higher
sales volume.
Sales of process catalysts, DeNOx catalysts, dioxins decomposition
catalysts and waste gas treatment

catalysts fell due to lower sales volume.
As a result of the above, net sales
in the environment & catalysts segment
fell 4.5% year-on-year to 26,429 million
yen.
Operating proﬁt in the segmentrose 20.6% year-on-year to 748 million
yen, on account of an increase in sales
volume of fuel cell materials and wet
oxidation catalysts.

and administrative expenses decreased,factors contributing to the results
included the effects of a contraction in
the spread exceeding the above.

07

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2017

Governance System

Under Nippon Shokubai Groupʼs Mission of— “Providing afﬂuence and comfort to people and society, with
our unique technology” — our goals are to emerge as an innovative chemical company that provides new value for peopleʼs lives,to earn the greater conﬁdence of the public as a responsible chemical company, and to become a company that all can take pridein, including our varied stakeholders. In this way we will increase our corporate value and achieve sustainable growth.
We consider the achievement of viable corporate governance as essential and have adopted initiatives toward that end: weare securing the rights and equality of shareholders and maintaining open dialogue; collaborating with various stakeholders as
appropriate; disclosing information as appropriate and ensuring transparency; ensuring the roles of the board of directors andmanagement teams related to their appropriate execution of duties; ensuring appropriate supervision of the execution of theseduties; and strengthening and enhancing internal control systems.

Our Corporate Governance System (as of April 2017)
General Meeting of Shareholders

Board ofAuditors

Board of Directors

Consults

Board of directors:
9 members in total(6 internal, 3 external)

Reports

Corporate Managing Committee
CSR-related committees(Chair: President)

RC Promotion Committee

Internal
ControlCommittee(Chair: President)

Risk Management Committee(Chair:President)(Chair: President)

Social Contribution
Promotion Committee

Auditor Office(Chair: President)

Disclosure Committee

Executive Officers

Internal
Audit OfficeInternal
audit

Administration &Finance

Sales &
MarketingInnovation &Business
Development

Production &Technology

CSR Promotion Council

Compliance Committee

AuditsCollaborates

Nominating andCompensation Committee

President▲

ProvidessupportAccounting
Auditors

AuditsAuditors:
4 in total(2 internal,
2 external)
Collaborates

Reports

08

Legal
Advisors

Consultation

Consolidated
Financial
Highlights

Messages fromPresident

Special Feature

Description ofBusiness

Governance
SystemCSR Based on
Responsible
Care Concept

Ten-Years
Summary

Management
Discussion
and Analysis ofOperation

Financial
Statements

Corporate Data

Board of Directors

Compliance Committee

Comprising the nine members, including three external
members, the board of directors supervises business
operations of each director through reports, deliberations,and resolutions regarding important matters. In general,
it convenes monthly under the chairmanship of a director
selected from the members of the board who are not executiveofﬁcers by a resolution of the board of directors. Four auditors— two external and two internal — also attend to give advice
and state their opinions as appropriate when necessary.

Chaired by the president, this committee addresses
company-wide corporate ethics issues as well as compliancewith laws and regulations.

RC Promotion Committee
Chaired by the president, this committee promotes thecompanyʼs Responsible Care initiatives. It formulates the
RC Promotion Basic Plan and focuses on further improving
safety and quality while addressing environmental issues.

Corporate Managing Committee
Comprising the president and executive ofﬁcers appointed by
the president, this committee generally convenes twice monthly(with all executive ofﬁcers in attendance at one of thesemeetings) to deliberate items related to the implementation ofbasic policies and important management issues. In addition,
regarding proposals discussed by the Corporate Managing
Committee, important issues involving those proposals areforwarded to the board of directors for their consideration.

Board of Auditors
Comprising two external auditors and two internal auditors,
this board convenes monthly in general, submits reports, andengages in discussions and deliberations on important matters.

Nominating and Compensation Committee
An advisory body of the board of directors, this is a voluntaryorganization comprising three or more members of the board of
directors (including a majority of external directors). It advises
on draft nominations of candidates for director and auditor
positions and on compensation and bonuses for directors.

Internal Control Committee
Under the chairmanship of the president, this committee
has established a system to ensure the reliability of ﬁnancial
reporting as enforced by the Financial Instruments andExchange Act. It also seeks to process company operations
more efﬁciently and effectively.

Risk Management Committee
Chaired by the president, this committee implements
measures as appropriate in response to various wideranging risks to which our Group is exposed.

Social Contribution Promotion Committee
Chaired by the president, this committee promotes social
contribution initiatives by focusing on further strengthening
company-wide social contribution policy and by formulating
annual, medium-term, and long-term activity plans.

Disclosure Committee
In order to contribute to management transparency andfulﬁll our social responsibilities while ensuring that all
stakeholders have a better understanding of our company,
this committee supports our efforts to disclose informationon our company and afﬁliated companies fairly andappropriately and in a timely manner.

CSR Promotion Council
This council investigates and discusses issues related to our
CSR, formulates plans, and organizes the progress of thevarious CSR-related committees.

09

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NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2017

Outside Members of the Board and Outside Corporate Auditors

Koichi Miura(Outside Member of the Board)
Mr. Koichi Miura attended all 14 meetings of the Board that were held during the ﬁscal year 2016. From his viewpoint as a specialist
in chemical engineering who is familiar with the chemical industry, he provides useful advice concerning the Companyʼs management
and supervises the Companyʼs management from an independent perspective.

Takashi Sakai(Outside Member of the Board)
Mr. Takashi Sakai attended all 14 meetings of the Board that were held during the ﬁscal year 2016. Due to his experience as
an executive of a company that is a manufacturer and has a strong commitment to public interest, he provides useful advice
concerning the Companyʼs management and supervises the Companyʼs management from an independent perspective.

Kozo Arao(Outside Corporate Auditor)
Mr. Kozo Arao attended all 11 meetings of the Board that were held during the ﬁscal year 2016 following his election as a Memberof the Board. Based on his highly professional expertise and a wealth of experience as attorney-at-law and achievements as
outside ofﬁcers of other companies, he provides useful advice concerning the Companyʼs management and supervises theCompanyʼs management from an independent perspective.

Yoichiro Komatsu(Outside Corporate Auditor)
Mr. Yoichiro Komatsu attended all 11 meetings of the Board that were held during the ﬁscal year 2016 following his election
as a Corporate Auditor. At these meetings, he provides his views from the perspective of an attorney as required. Mr. Komatsu
also attended all 10 meetings of the Corporate Auditors that were held during the ﬁscal year 2016 following his election as a
Corporate Auditor, exchanged opinions with respect to the results of audits and discussed important issues regarding suchaudits. Furthermore, he periodically exchanged opinions with the senior management.

Consolidated
Financial
Highlights

Messages fromPresident

Special Feature

Description ofBusiness

CSR Based on
Responsible
Care Concept

Governance
SystemManagement
Discussion
and Analysis ofOperation

Ten-Years
Summary

Financial
Statements

Corporate Data

CSR Based on Responsible Care Concept

CSR Concept
Nippon Shokubai has kept alive the spirit of our corporate credo, “Safety takes priority over production.” In accordance with ourGroup Mission of “,” we have established a Management Commitment and Code of Conduct to delineate
our corporate behavior comprehensively from economic, social, and environmental perspectives, setting out corporate ethics,
Responsible Care, risk management, human rights & labor, information disclosure, social contribution, and corporate governanceas priority management issues. At the same time, we have been implementing initiatives to enhance our corporate value by
maintaining dialogue with various stakeholders, including our customers, business partners, shareholders/investors, public
administrators, employees, and local communities.
In keeping with our approach to corporate social responsibility (CSR), we will continue to contribute to the emergence of asustainable society by implementing “Reborn Nippon Shokubai 2020,” our long-term business plan, with the goal of achieving our“Vision for 2025.”

Vision for 2025

“An innovative chemical company
that provides new value
for people’s lives”
Long-term Business Plan

Reborn Nippon Shokubai
2020

Society

Environment

EconomyCommunity

Government

Shareholders
Investors

Suppliers

Employees

Customers

Nippon Shokubai
Code of ConductGro
doManage up Mission
te Creament Corop
mmitme Cor
nt

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NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2017

Formulation of CSR Medium-term Targets and Initiatives (2017–2020)
Under “Reborn Nippon Shokubai 2020 NEXT” (2017–2020),
one priority issue that is intended to strengthen the companyʼs
management foundation is to become “a company gaining
further public trust as a responsible chemical company.”
Toward that end, we have highlighted the importance ofpromoting company-wide CSR activities; therefore, we haveformulated CSR medium-term targets and initiatives spanning
the same four years, envisioning this period as the age of the“Reborn Nippon Shokubai 2020 NEXT.”In the years ahead, we will do our best to achieve our CSR
medium-term targets and initiatives, and we will announce ourachievements and progress in our annual CSR Reports.

CSR Implementation Structure
Compliance Committee
RC Promotion Committee
Risk Management Committee

Implementing
CSR
Management

Social Contribution Promotion Committee
Disclosure Committee

CSR Medium-term Targets and Initiatives
Stakeholder

Companywide

Environment

Subject

Medium-term Targets & Initiatives

Corporate Ethics

To continue to emphasize corporate ethics while strengthening our regulatory compliance structure andenhancing various training programs

Risk Management

To endeavor to expand our risk management while regularly analyzing risk, including undertaking a review
of our current Business Continuity Plan

Corporate GovernanceTo further strengthen and enhance corporate governance, including improving the functioning of the Boardof Directors, in order to enhance corporate value and achieve sustainable growth

Preventing 1) To reduce energy consumption by an amount equivalent to 8,000 kL of crude oil (over 4 years)2) To reduce energy intensity by 5% from ﬁscal 2015 levels by ﬁscal 2020
Global3) To reduce fuel consumption intensity for road transport by 5% from ﬁscal 2015 levels byEnvironmental Warmingﬁscal 2020; to promote modal shift
Protection
Waste
To maintain zero emissions (Quantity of ﬁnal off-site landﬁll) ≤ (Total amount of waste generated × 0.1%)
PRTR

Customers

Suppliers
Shareholders& Investors

Community

Employees

Government

Quality

To reduce emissions of substances subject to the PRTR Law by 25% from ﬁscal 2015 levels by ﬁscal 2020
Promotion of company-wide quality initiatives
1) To improve customer satisfaction
2) To attain more trust from customers3) To achieve “Zero quality complaints”

Chemical Safety

To achieve zero problems related to chemical safety (legal or social problems)

Logistics Safety

To achieve zero accidents and disasters related to logistics

Procurement
Information Disclosure

To continue implementing green procurement
To continue to disclose information in accordance with our corporate governance code and to aim for more
relevant responses in order to maintain high-quality constructive dialogue with shareholders and investors.

Social Contribution

To enhance the social contribution initiatives of the Nippon Shokubai Group as a whole
To formulate and implement the Third-term Plan (ﬁscal 2018–ﬁscal 2022) addressing our forest
development initiatives

Process Safety andDisaster Prevention

To achieve zero severe process safety accidents

RC Communication

To promote dialogue on Responsible Care initiatives with local residents and implement appropriate
information disclosure

Human Resources

To identify and train leaders who can lead the organization; to promote Diversity & Inclusion

Occupational Safety

To achieve zero injuries with or without loss of workdays, including contractors

Occupational Health

To provide all workers with a supportive and ideal work environment; to promote a healthy work-lifebalanceCollaboration

To continue to cooperate with the administration through industrial associations and other avenues

Consolidated
Financial
Highlights

Messages fromPresident

Special Feature

Description ofBusiness

Governance
SystemCSR Based on
Responsible
Care Concept

Ten-Years
Summary

Management
Discussion
and Analysis ofOperation

Financial
Statements

Corporate Data

Basic Policy on Responsible CareIn conformity with the Nippon Shokubai Group mission, Management commitment , Corporate credo and the Nippon Shokubai
Code of Conduct, we rank it as an important management measure to provide products and technologies that contribute tosociety and environmental protection. In addition, while paying due respect to the principle of Sustainable Development, weare determined to conduct all activities in accordance with the following policy related to environmental protection, safety andproduct quality that will bring our business operations into harmony with the global environment.

1

Aim at environmental protection and reduction of negative environmental impact throughout the entire life cycle of a
product, from development to disposal.

2

Ensure the safety of our employees and our communities by targeting zero accidents and zero disasters with acommitment to the principle “Safety takes priority over production.”

3

Conﬁrm the safety of chemical materials, intermediates and products, and consider the health of our customers,
employees of our logistics subcontractors, our employees, and others.

4

Stably supply products and associated services that meet customer satisfaction and inspire their trust.

5

Publicly announce the results of these activities and make an effort to communicate for proper understanding.

We will implement this RC Policy in all our business operations by ensuring all employees have a thorough understanding andawareness of its importance. The president shall be the person with the ultimate responsibility for implementing this policy.

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NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2017

Ten-Years Summary

FY2007

FY2008FY2009¥302,669
18,37911,875¥289,102622-5,307¥244,317
13,881
10,832352,783
175,634

302,948
151,662

310,946
163,781

20,129-33,100
17,495
21,371

17,613-16,675
8,099
29,45044,346-23,850-21,772
28,23464.91
947.3416.0¥ -29.61
831.11
15.5

48.6
6.9
6.1
150
10.18
24.6

48.8
-3.3
0.2
159
－
－

51.4
7.0
4.9
155
13.89
23.0

114.3861,400
661
1,316
626

100.5858,900
622
866
442

92.88
41,200845
920
600Operating results
Net sales .......................................................................................................................
Operating income .........................................................................................................
Net income (loss) .........................................................................................................
Financial position
Total assets ...................................................................................................................
Net assets .....................................................................................................................
Cash ﬂows
Cash ﬂows from operating activities ...........................................................................
Cash ﬂows from investment activities .........................................................................
Cash ﬂows from ﬁnancing activities ............................................................................
Cash and cash equivalents ..........................................................................................
Per share
Earnings per share .......................................................................................................
Net assets .....................................................................................................................
Cash dividends..............................................................................................................
Shareholders' equity ratio (%) .....................................................................................
ROE (%) ........................................................................................................................
ROA (%) ........................................................................................................................
Liquidity ratio (%) .........................................................................................................
PER (%) ........................................................................................................................
Dividend payout ratio (%) .............................................................................................

¥

¥

60.85
898.3314.0

Market data
Exchange rate, average (¥/$) .......................................................................................
Naphtha price (¥/kl) .....................................................................................................
Share Price (¥) (Closing) .............................................................................................
(High) ......................................................................................................................
(Low) .......................................................................................................................

*As the Company conducted a reverse stock split at a ratio of one share for every ﬁve shares on October 1, 2015,
ﬁgures for the dividends per share for FY 2015 are amounts that take into account the reverse stock split.

Consolidated
Financial
Highlights

Messages fromPresident

FY2010Special Feature

FY2011

Description ofBusiness

FY2012Governance
SystemCSR Based on
Responsible
Care Concept

FY2013

Ten-Years
Summary

FY2014

Management
Discussion
and Analysis ofOperation

FY2015

Financial
Statements

FY2016(Millions of yen)

Corporate Data

FY2016(Millions of U.S. dollars)¥288,345
29,813
21,119¥320,704
31,10021,257¥269,520
10,0348,401¥302,136
13,752
10,503¥374,873
26,13319,089¥323,124
31,23426,003¥293,970
21,151
19,361$2,620189
173

329,332
194,266

356,407
209,070

352,373
220,248

398,396
242,193419,634
270,128

407,997
282,485433,610292,275

3,865
2,605

31,706-16,696-3,05039,17443,857-21,747-9,67150,812

27,322-31,87881
47,801

16,992-25,141-2,51939,61932,697-18,941-10,237
44,33653,264-12,963-20,01264,05537,474-44,515-3,53351,700

334
-397
-31
461

¥ 110.30
938.6722.0¥ 104.71
1,006.48
22.0¥ 41.38
1,059.85
16.0¥ 51.74
1,164.10
16.0¥ 94.06
1,307.13
24.0¥ 640.69
6,870.84
150.0¥ 478.36
7,238.33
150.0

57.9
12.1
9.7
197
9.45
19.9

57.3
10.8
9.7
174
9.16
21.0

61.1
4.0
3.9
189
19.94
38.7

59.3
4.7
4.4
168
23.56
30.9

63.2
7.6
7.3
205
18.74
25.5

68.3
9.6
8.3
241
8.94
23.4

66.6
6.8
5.9
212
15.85
31.4

−
−
−
−
−
−

85.72
47,500
1,042
1,047
682

79.07
54,900
959
1,100
764

83.09
57,500825
987
738

100.21
67,300
1,219
1,286
791

109.8863,500
1,763
1,832
1,093

120.1442,8005,730－－

108.36
34,700
7,580
8,020
5,140

−
309.3
67.6
71.5
45.8

$

4.3
64.5
1.3

Notes: Conversions into USD are just for indication only. The exchange rate is the rate at March 31, 2017. (¥112.19 / $1.00) Figures are rounded off.

15

16

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2017Management Discussion and Analysis of Operation

Fiscal 2016 Performance
The world economy in the current ﬁscal year saw the UnitedStates economy continuing to recover and the situationin Europe also recovering moderately, while economic
deceleration continued in China and resource-rich countries.
As for the Japanese economy, although there were signs
of weakness in personal consumption, the country saw amoderate recovery trend due primarily to steady employment
conditions.
In the chemicals industry, the future outlook remained
unclear including the trend of costs of raw materials andforeign exchange.

Segment Sales(¥billion)

9.0%
26.4
107.6

36.6%

Total
294.0
54.4%

160.0

■ Basic Chemicals■ Functional Chemicals■ Environment & Catalysts

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CSR Based on
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SystemManagement
Discussion
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Ten-Years
Summary

Financial
Statements

Corporate Data

Financial position
Under these conditions, the Groupʼs consolidated net sales in
the current ﬁscal year declined 9.0% year-on-year to 293,970
million yen, down 29,154 million yen. Contributing factors
included a drop in sales prices on account of falling raw
material costs and market conditions for products outside ofJapan, as well as the yen appreciation.
With regard to proﬁts, in spite of decreased processing
costs and increased production and sales volume resulting involume effects, a contraction in the spread owing to a decline
in market conditions for products in excess of the decreasein raw material costs led to lower operating proﬁt, which was
down 32.3% year-on-year to 21,151 million yen, down 10,083
million yen.

Non-operating income increased 405 million yen due toimproved foreign exchange losses and decreased technology
transfer study related expenses, although share of proﬁt ofentities accounted for using equity method decreased. As aresult, ordinary proﬁt was down 28.2% to 24,664 million yen,
9,678 million yen lower than the previous ﬁscal year.
Extraordinary income fell 838 million yen year-on-year due
to recording of loss on closing of laboratory and the absenceof gain on sales of shares of subsidiaries and associates,
while gain on sales of investment securities was posted. As
a result, proﬁt attributable to owners of parent fell 25.5% to19,361 million yen, down 6,642 million yen.

Shareholdersʼ Equity and Total Assets(¥billion)

419.6

398.4

400

265.3

433.6

408.0

278.8

288.7

236.3
200

0
FY2013

FY2014FY2015FY2016■ Shareholders’ Equity■ Total Assets

17

18

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2017

Cash Flows
Cash and cash equivalents at the end of the current ﬁscal
year decreased 12,355 million yen compared to the end of
the previous ﬁscal year to 51,700 million yen, as cash ﬂows
used in investing activities including capital investment andcash ﬂows used in ﬁnancing activities outweighed cash ﬂows
provided by operating activities.
Net cash provided by operating activities in the current
ﬁscal year amounted to 37,474 million yen (53,264 million
yen was provided in the previous ﬁscal year). This was due
primarily to decreased proﬁt before income taxes, which led
to decreased inﬂows of 15,790 million yen compared to theprevious ﬁscal year.

Net cash used in investing activities totaled 44,515
million yen (12,963 million yen was used in the previous ﬁscalyear). Outﬂows increased for the purchase of property, plantand equipment and the purchase of shares of subsidiaries
and associates, which led to increased outﬂows of 31,552
million yen compared to the previous ﬁscal year.
Net cash used in ﬁnancing activities amounted to 3,533
million yen (20,012 million yen was used in the previous
ﬁscal year). This was a decrease of 16,479 million yen in cash
outﬂows compared to the previous ﬁscal year. Contributing
factors included the issuance of bonds, despite the purchaseof treasury shares.

■ Operating activity■ Investments activity■ Free cash flows

Cash Flows(¥billion)

53.0
50
40.3

40

32.7

37.5

30
20

17.0

13.8

10
0
-10

-13.0

-20
-30

-7.0

-8.1
-18.9
-25.1

-40
-50

-44.5
FY2013

FY2014FY2015FY2016

Consolidated
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Special Feature

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Governance
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Management
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and Analysis ofOperation

Financial
Statements

Corporate Data

Basic Policy on the Distribution of Proﬁts, and Dividends
Nippon Shokubai has positioned the return of proﬁts toshareholders as the most important management task,and, in consideration of the dividend payout ratio, distributes
dividends under a basic policy of aiming to improve mediumto long-term dividend levels in line with projected trends inconsolidated earnings, while at the same time taking an overall
view to expand the business and strengthen the corporate
structure. In addition to dividend distributions, the Company
intends to consider stock buybacks as one of the options toraise the value per share.
The Company will continue to distribute proﬁts by taking
into careful consideration a balance between the criticalneed to maintain competitiveness and continue growth into
the future by aggressively investing in equipment, making
strategic investment, and investing in R&D and other areas,

with the need to accomplish these investments, recognizing
the importance of keeping on hand a sufﬁcient level of retained
earnings.
The Company pays dividends twice a year, once at the endof the interim period and once at the end of the ﬁscal year.
Based on the above basic policy, the Company plans to pay
a year-end dividend of 75 yen per share for FY 2016, taking
into consideration the business environment, earnings results
and future prospects for business growth. As a result, annual
dividends will total 150 yen per share, for a consolidated payout
ratio of 31.4%.
For FY 2017, based on the above basic policy, annual
dividends are scheduled to be 150 yen (interim dividends of 75
yen and year-end dividends of 75 yen), taking into consideration
the state of achievement of proﬁt forecasts.

Fiscal 2017 Outlook
he Japanese economy is expected to remain on a moderate
recovery trend, supported by an improvement in theemployment environment and capital and public investment.
Meanwhile, it is predicted that the management environment
surrounding the Company will be unpredictable, owing tofactors such as policy operation by the new administrationin the United States, uncertainty in the political situation in
Europe, and trends in the Chinese economy.
Under such conditions, projected earnings in the nextﬁscal year are based on exchange rates of 110 yen to the U.S.
dollar and 115 yen to the euro, and naphtha prices of 42,000
yen/kl. Sales volumes are projected to increase centeredaround functional chemicals, and sales prices are expected
to increase due to higher raw material prices. We therefore
forecast consolidated net sales to increase 5.5% to 310,000

million yen (+16,030 million yen), with 150,000 million yen in
the ﬁrst half.
With regard to proﬁts, the Company projections
incorporate the expected effect of higher sales volumes thatwill lead to an increase in operating proﬁt by 8.7%, to 23,000
million yen (+1,849 million yen), with 10,000 million yen in
the ﬁrst half. The Company projects an increase in ordinary
proﬁt by 5.4%, to 26,000 million yen (+1,336 million yen), with
12,000 million yen in the ﬁrst half, assuming deterioration in
non-operating proﬁt and expenses due to factors such as adecrease in dividend income and share of proﬁt of entities
accounted for using equity method, as well as an increasein proﬁt attributable to owners of parent by 0.7%, to 19,500
million yen (+139 million yen), with 9,000 million yen in theﬁrst half.

19

20

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2017

Financial Statements
Consolidated Balance Sheet

Nippon Shokubai Co., Ltd. and Consolidated Subsidiaries

March 31,
2016

2017
AssetsCurrent assets:
Cash and cash equivalents (Note 4) ……………………………………
Time deposits (Notes 4 and 7) ……………………………………

Notes and accounts receivable (Note 4) :Unconsolidated subsidiaries and afﬁliates ……………………
Trade …………………………………………………………………
Allowance for doubtful accounts …………………………………
Inventories (Note 6) …………………………………………………
Deferred income taxes (Note 9) ……………………………………
Other current assets …………………………………………………

Total current assets ………………………………………………………

Property, plant and equipment, at cost (Notes 7 and 23) :Land ………………………………………………………………………
Buildings and structures ………………………………………………

Machinery and equipment ………………………………………………
Construction in progress ………………………………………………

Leased assets ……………………………………………………………
Accumulated depreciation ………………………………………………

Property, plant and equipment, net………………………………………

Investments and other assets:
Investments in securities (Notes 3 and 4) ……………………………
Investments in unconsolidated subsidiaries and afﬁliates …………

Deferred income taxes (Note 9) ………………………………………

Asset for retirement beneﬁts (Note 8) …………………………………
Other assets (Note 7) ……………………………………………………

Total investments and other assets ……………………………………

Total assets ………………………………………………………………

(Thousands of U.S. dollars)(Note 2)

(Millions of yen)¥¥

51,700
4,439

2017

¥

64,055
5,117$

460,825
39,567

7,590
56,611(11)
51,1093,154
9,917
184,509

7,843
57,093(18)
49,007
3,218
9,367
195,682

67,653
504,599(98)455,558
28,11388,395
1,644,612

32,607
104,509
370,429
25,664580(370,629)
163,160

33,084
98,375364,5887,911
616(357,986)
146,588

290,641
931,5363,301,801
228,755
5,170(3,303,584)
1,454,319

37,48832,603
1,868
7,298
6,684
85,94130,31823,851
1,341
3,529
6,688
65,727334,147
290,605
16,65065,05059,578766,030

407,997$ 3,864,961

433,610¥

Consolidated
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Financial
Statements

Corporate Data

Nippon Shokubai Co., Ltd. and Consolidated Subsidiaries

March 31,
2016

2017
Liabilities and Net Assets
Current liabilities:
Short-term bank loans (Notes 4 and 7) ………………………………
Current portion of long-term debt (Notes 4 and 7)¥

Notes and accounts payable (Note 4) :Unconsolidated subsidiaries and afﬁliates …………………………

Trade ……………………………………………………………………

Lease obligations (Note 7)……………………………………………

Income taxes payable (Note 9) …………………………………………
Accrued bonuses to employees ………………………………………

Accrued bonuses to directors and audit & supervisory board members ……

Reserve for periodic repairs ……………………………………………
Other current liabilities …………………………………………………

Total current liabilities ……………………………………………………
Long-term liabilities:
Long-term debt (Notes 4 and 7) ………………………………………
Lease obligations (Note 7)(Thousands of U.S. dollars)(Note 2)

(Millions of yen)…………………

……………………………………………

Deferred income taxes (Note 9) ………………………………………
Liability for retirement beneﬁts (Note 8) ………………………………

Other ……………………………………………………………………

Total long-term liabilities …………………………………………………

9,976
11,5832017¥

13,186
8,195$

88,921
103,2445,758
38,857
25
3,378
3,065
159
2,525
11,51986,8456,350
32,960
25
4,507
3,273
188
2,436
9,934
81,054

51,324346,350223
30,11027,3201,417
22,506102,674
774,089

36,37483
4,971
12,072990
54,49029,166
108
1,628
12,568989
44,459324,218740
44,309107,603
8,824
485,694

25,03822,395229,091(6,249)270,275

25,03822,395216,223(1,010)262,646

223,175
199,617
2,041,991(55,700)
2,409,083

12,248
6,153
11
(16)
18,3963,604
292,275
433,610

7,614
11,47416(2,916)
16,1883,650
282,484
407,997

109,172
54,84498(143)
163,971
32,1242,605,178$ 3,864,961

Contingent liabilities (Note 20)
Net assets:
Shareholdersʼ equity (Note 10) :Common stock:
Authorized – 127,200,000 shares in 2017 and 127,200,000 shares in 2016
Issued – 40,800,000 shares in 2017 and 40,800,000 shares in 2016 …
Capital surplus…………………………………………………………
Retained earnings ……………………………………………………

Less treasury stock, at cost …………………………………………

Total shareholdersʼ equity ………………………………………………
Accumulated other comprehensive income (loss):
Net unrealized holding gain on securities …………………………

Translation adjustments ………………………………………………

Net unrealized deferred gain on hedges ……………………………
Retirement beneﬁt liability adjustments ……………………………

Total accumulated other comprehensive income, net ………………

Non-controlling interests ………………………………………………

Total net assets ……………………………………………………………
Total liabilities and net assets ……………………………………………

See accompanying notes to consolidated ﬁnancial statements.

¥

¥

21

22

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2017

Consolidated Statement of Income

Nippon Shokubai Co., Ltd. and Consolidated Subsidiaries

Year ended March 31,
2016

2017

Net sales (Note 23) ………………………………………………………

¥

Gross proﬁt …………………………………………………………

Selling, general and administrative expenses (Note 11) ………………
Operating income (Note 23) ………………………………………

Other income (expenses):
Interest and dividend income …………………………………………

Interest expense …………………………………………………………
Royalty income …………………………………………………………
Equity in earnings of an unconsolidated subsidiary and afﬁliates …

Rent income from real estate …………………………………………
Foreign exchange losses, net …………………………………………

Technology transfer study related expenses …………………………

Loss on disposal of property, plant and equipment …………………
Compensation expenses ………………………………………………
Gain on sales of investment securities ………………………………
Gain on sales of property, plant and equipment (Note 12)…………

Government subsidies …………………………………………………

Gain on sales of investment in a subsidiary (Note 13) ………………

Loss on closing of research center (Note 14) …………………………
Loss on liquidation of business (Note 15) ……………………………
Loss on devaluation of investments in other securities ………………

Loss on reduction of non-current assets ………………………………

Other, net (Note 16) ……………………………………………………
Proﬁt before income taxes …………………………………………

Income taxes (Note 9) :Current …………………………………………………………………

Deferred …………………………………………………………………
Proﬁt …………………………………………………………………

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

See accompanying notes to consolidated ﬁnancial statements.

(Thousands of U.S. dollars)(Note 2)

(Millions of yen)

Cost of sales (Note 11)¥

293,970
233,499
60,471

2017

323,124
253,123
70,001$ 2,620,287
2,081,282
539,005

39,32021,151

38,767
31,234350,477
188,528

1,456
(445)
347
2,150
1,108
(630)
(267)
(47)
(444)
1,199
136
3
–
(797)
(159)
(115)
(3)
(172)
24,471

1,252
(440)
350
2,458
1,176
(1,270)
(592)
(36)
–
–
–
318
620
–
–
–
(292)
210
34,988

12,978(3,966)
3,093
19,164
9,876(5,615)(2,380)(419)(3,958)
10,6871,212
27–(7,104)(1,417)(1,025)(27)(1,533)
218,121

5,631
(519)
5,112
19,3592
19,361

7,430
1,445
8,875
26,113(110)
26,00350,192(4,626)45,566
172,555
18
172,573¥¥$

Consolidated
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and Analysis ofOperation

Financial
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Corporate Data

Consolidated Statement of Comprehensive Income

Nippon Shokubai Co., Ltd. and Consolidated Subsidiaries

Year ended March 31,
2016

2017

Proﬁt ………………………………………………………………………

¥

Net unrealized holding gain (loss) on securities ……………………

Net unrealized deferred loss on hedges ………………………………
Translation adjustments ………………………………………………

Retirement beneﬁts liability adjustments ……………………………
Share of other comprehensive loss of an unconsolidated subsidiary
and afﬁliates accounted for by the equity method ……………………

Total other comprehensive income (loss) ……………………………

Comprehensive income …………………………………………………

¥Total comprehensive income attributable to:
Owners of parent ………………………………………………………

¥

Non-controlling interests ………………………………………………

See accompanying notes to consolidated ﬁnancial statements.

(Thousands of U.S. dollars)(Note 2)

(Millions of yen)

Other comprehensive income (loss) (Note 18)

19,3592017¥

26,113$

172,555

4,641(6)(4,526)
2,980(3,046)(11)(843)(2,777)41,367(53)(40,342)
26,562(913)
2,176
21,535(765)(7,442)
18,671(8,138)19,396
191,951

21,569(34)¥¥

18,57992$$

192,254
(303)

23

24

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2017

Consolidated Statement of Changes in Net Assets

Nippon Shokubai Co., Ltd. and Consolidated Subsidiaries

Shareholdersʼ equity
Commonstock
Balance at April 1, 2015 ……………

CapitalsurplusLess treasury
Total
stock,
shareholdersʼ
at costequityRetainedearnings(Millions of yen)¥

¥ 195,497

Disposal of treasury stock …………

–
–
–
–

–
–
–
0

(5,277)26,003
–
–

–
–
(54)
0

(5,277)26,003(54)
0Change in equity resulting from transaction
with non-controlling shareholders ………

–

312

–

–

312

–
–
25,038–312
22,395–
20,726¥ 216,223

Proﬁt attributable to owners of parent …

Purchases of treasury stock ………

Net changes in items other thanshareholdersʼ equity ………………

Total changes during the year ……

Balance at March 31, 2016 …………

¥

¥

¥

¥

(956) ¥ 241,662

22,083

Changes during the year:
Cash dividends ……………………

25,038¥––(54)
20,984(1,010) ¥ 262,646

Accumulated other comprehensive income (loss)

Balance at April 1, 2015 ……………

Net
unrealized
holding gain
on securities

Retirement Total accumulatedNet
beneﬁtunrealizedotherliability
Translation deferred gain
comprehensive
adjustmentson hedges
adjustments
income, net¥¥

Noncontrollinginterests

Total net
assets¥4,854¥ 270,128(Millions of yen)

Changes during the year:
Cash dividends ……………………

10,652

13,095¥27¥(162) ¥

23,612

Disposal of treasury stock …………

–
–
–
–

–
–
–
–

–
–
–
–

–
–
–
–

–
–
–
–

–
–
–
–

(5,277)26,003(54)
0Change in equity resulting from transaction
with non-controlling shareholders ……

–

–

–

–

–

–

312

(3,038)(3,038)7,614 ¥

(1,621)(1,621)
11,474 ¥

(11)
(11)
16 ¥

(2,754)(2,754)(2,916) ¥(7,424)(7,424)
16,188 ¥Proﬁt attributable to owners of parent …

Purchases of treasury stock ………

Net changes in items other thanshareholdersʼ equity ………………

Total changes during the year ……

Balance at March 31, 2016 …………

¥

(1,204)(8,628)(1,204)
12,3563,650 ¥ 282,484

Consolidated
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Messages fromPresident

Special Feature

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CSR Based on
Responsible
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Governance
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Discussion
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Summary

Financial
Statements

Corporate Data

Nippon Shokubai Co., Ltd. and Consolidated Subsidiaries

Shareholdersʼ equity
Commonstock
Balance at April 1, 2016 ……………

CapitalsurplusLess treasury
Total
stock,
shareholdersʼ
at costequityRetainedearnings(Millions of yen)¥

¥ 216,223

Disposal of treasury stock …………

–
–
–
–

–
–
–
0

(6,493)19,361––––(5,239)0(6,493)19,361(5,239)0Change in equity resulting from transaction
with non-controlling shareholders ……

–

–

–

–

–

–
–
25,038–0
22,395–
12,868¥ 229,091

Proﬁt attributable to owners of parent …

Purchases of treasury stock ………

Net changes in items other thanshareholdersʼ equity ………………

Total changes during the year ……

Balance at March 31, 2017 …………

¥

¥

¥

¥

(1,010) ¥ 262,646

22,395

Changes during the year:
Cash dividends ……………………

25,038¥––(5,239)7,629(6,249) ¥ 270,275

Accumulated other comprehensive income (loss)

Balance at April 1, 2016 ……………

Net
unrealized
holding gain
on securities

Retirement Total accumulatedNet
beneﬁtunrealizedotherliability
Translation deferred gain
comprehensive
adjustmentson hedges
adjustments
income, net¥¥

Noncontrollinginterests

Total net
assets¥3,650¥ 282,484(Millions of yen)

7,614

11,474¥16¥(2,916) ¥16,188Changes during the year:

Disposal of treasury stock …………

–
–
–
–

–
–
–
–

–
–
–
–

–
–
–
–

–
–
–
–

–
–
–
–

(6,493)19,361(5,239)0Change in equity resulting from transaction
with non-controlling shareholders ……

–

–

–

–

–

–

–

(5,321)(5,321)
6,153 ¥

(5)
(5)
11 ¥

2,900
2,900
(16) ¥Cash dividends ……………………

Proﬁt attributable to owners of parent …

Purchases of treasury stock ………

Net changes in items other thanshareholdersʼ equity ………………

Total changes during the year ……

Balance at March 31, 2017 …………

¥

4,634
4,634
12,248

¥

2,208
2,208
18,396

¥

(46)
2,162
(46)
9,791
3,604 ¥ 292,275

25

26

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2017

Nippon Shokubai Co., Ltd. and Consolidated Subsidiaries

Shareholdersʼ equity
Commonstock

Capitalsurplus

Balance at April 1, 2016 …………… $ 223,175
Changes during the year:
Cash dividends ……………………

Less treasury
Total
stock,
shareholdersʼ
at costequityRetainedearnings(Thousands of U.S. dollars) (Note 2)$ 199,617 $ 1,927,293 $(9,003) $ 2,341,082

Disposal of treasury stock …………

–
–
–
–

–
–
–
0

(57,875)
172,573––––(46,697)0(57,875)
172,573(46,697)0Change in equity resulting from transaction
with non-controlling shareholders ……

–

–

–

–

–

Proﬁt attributable to owners of parent …

Purchases of treasury stock ………

Net changes in items other thanshareholdersʼ equity ………………

–
–
–
–
0
114,698
Balance at March 31, 2017 ………… $ 223,175 $ 199,617 $ 2,041,991 $Total changes during the year ……

––(46,697)
68,001(55,700) $ 2,409,083

Accumulated other comprehensive income (loss)
Net
unrealized
holding gain
on securities
Balance at April 1, 2016 …………… $Changes during the year:
Cash dividends ……………………

Retirement Total accumulatedNet
beneﬁtunrealizedotherliability
Translation deferred gain
comprehensive
adjustmentson hedges
adjustments
income, net

Noncontrollinginterests

Total net
assets(Thousands of U.S. dollars) (Note 2)

67,867 $ 102,273 $143 $(25,992) $ 144,291 $

32,534 $ 2,517,907

Disposal of treasury stock …………

–
–
–
–

–
–
–
–

–
–
–
–

–
–
–
–

–
–
–
–

–
–
–
–

(57,875)
172,573(46,697)0Change in equity resulting from transaction
with non-controlling shareholders ……

–

–

–

–

–

–

–

(47,429)(47,429)54,844 $

(45)
(45)
98 $

Proﬁt attributable to owners of parent …

Purchases of treasury stock ………

Net changes in items other thanshareholdersʼ equity ………………

41,30541,305
Balance at March 31, 2017 ………… $ 109,172 $Total changes during the year ……

See accompanying notes to consolidated ﬁnancial statements.

25,84919,68025,84919,680(143) $ 163,971 $(410)
19,270(410)
87,271
32,124 $ 2,605,178

Consolidated
Financial
Highlights

Messages fromPresident

Special Feature

Description ofBusiness

Governance
SystemCSR Based on
Responsible
Care Concept

Ten-Years
Summary

Management
Discussion
and Analysis ofOperation

Financial
Statements

Corporate Data

Consolidated Statement of Cash Flows

Nippon Shokubai Co., Ltd. and Consolidated Subsidiaries

Year ended March 31,
2016

2017

(Thousands of U.S. dollars)(Note 2)

(Millions of yen)

Operating activities:
Proﬁt before income taxes ………………………………………………

¥Adjustments to reconcile proﬁt before income taxes to net cash
provided by operating activities:
Depreciation and amortization …………………………………………

Gain on sales of investments in securities ……………………………

Gain on sales of property, plant and equipment ………………………
Government subsidies …………………………………………………

Loss on closing of research center ……………………………………
Loss on liquidation of business …………………………………………

Loss on devaluation of investments in other securities ………………

Loss on reduction of non-current assets ………………………………
Gain on sales of investment in a subsidiary …………………………

Increase in asset for retirement beneﬁts ……………………………

Increase in liability for retirement beneﬁts ……………………………
Interest and dividend income …………………………………………

Interest expense …………………………………………………………
Equity in earnings of an unconsolidated subsidiary and afﬁliates …

Other, net ………………………………………………………………
Changes in operating assets and liabilities:
Notes and accounts receivable ………………………………………

Inventories ……………………………………………………………
Notes and accounts payable …………………………………………
Other current liabilities ………………………………………………

Subtotal ………………………………………………………………

Interest and dividends received …………………………………………

Interest paid ………………………………………………………………

Proceeds from government subsidies …………………………………
Income taxes paid …………………………………………………………
Net cash provided by operating activities ………………………………
Investing activities:
Purchases of property, plant and equipment ……………………………

Proceeds from sales of property, plant and equipment ………………
Purchase of intangible assets ……………………………………………
Purchases of investments in securities …………………………………

Proceeds from sales of investments in securities ………………………
Payments for purchases of shares of afﬁliates …………………………
Proceeds from sales of shares of a subsidiary resulting in change inscope of consolidation ……………………………………………………
Collection of loans receivable ……………………………………………

Other, net …………………………………………………………………

Net cash used in investing activities ……………………………………

¥

24,471

2017¥

34,988$218,121

17,957(1,199)
(136)
(3)
797
159
115
3
–
(1,153)245(1,456)445(2,150)563

17,875
–
–
(318)
–
–
–
292
(620)
(1,435)
1(1,252)440(2,458)4,220

160,059(10,687)(1,212)
(27)
7,104
1,417
1,025
27
–
(10,277)
2,184(12,978)
3,966(19,164)
5,018

53(2,796)
6,712(726)
41,901
2,847
(430)
3
(6,847)37,474

7,476
5,176(6,155)650
58,880
2,425
(431)
318
(7,928)53,264472(24,922)59,827(6,471)
373,482
25,377(3,833)
27(61,030)
334,023(36,228)
150
(320)
(558)
1,668
(9,588)(13,311)
103
(495)
(730)
985
(22)

(322,916)
1,337(2,852)(4,974)
14,868(85,462)–127
234(44,515)

211
736
(440)
(12,963)

–
1,132
2,085
(396,782)

¥

$

27

28

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2017

Nippon Shokubai Co., Ltd. and Consolidated Subsidiaries

Years ended March 31,
2016

2017

(Thousands of U.S. dollars)(Note 2)

(Millions of yen)

Financing activities:
Net decrease in short-term bank loans …………………………………

¥Proceeds from long-term debt …………………………………………
Repayment of long-term debt ……………………………………………
Issuance of bonds …………………………………………………………
Purchase of investments in a subsidiary not resulting in change inscope of consolidation ……………………………………………………

Purchases of treasury stock ……………………………………………
Cash dividends paid ………………………………………………………

Cash dividends paid to non-controlling shareholders …………………

Other, net …………………………………………………………………

Net cash used in ﬁnancing activities ……………………………………

Effect of exchange rate changes on cash and cash equivalents ………

(Decrease) Increase in cash and cash equivalents ……………………

Cash and cash equivalents at beginning of year ………………………
Cash and cash equivalents at end of year ………………………………

¥(3,035)
9,262(7,999)10,000–(5,239)(6,494)(13)(15)(3,533)(1,781)(12,355)
64,05551,7002017¥¥(7,179)1,000(7,491)
–
(952)
(54)
(5,277)(32)(27)(20,012)(570)
19,71944,33664,055$$(27,052)
82,556(71,299)
89,135–(46,698)(57,884)
(116)
(133)
(31,491)(15,876)(110,126)
570,951
460,825

Consolidated
Financial
Highlights

Messages fromPresident

Special Feature

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Governance
SystemCSR Based on
Responsible
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Ten-Years
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Management
Discussion
and Analysis ofOperation

Financial
Statements

Corporate Data

Notes to Consolidated Financial Statements
Nippon Shokubai Co., Ltd. and Consolidated Subsidiaries

March 31, 2017
1. Summary of Signiﬁcant Accounting Policies(a) Basis of presentation
The accompanying consolidated ﬁnancial statements of Nippon Shokubai Co., Ltd. (the “Company”) and its consolidated
subsidiaries are prepared on the basis of accounting principles generally accepted in Japan, which are different in certain respects
as to the application and disclosure requirements of International Financial Reporting Standards, and are compiled from theconsolidated ﬁnancial statements prepared by the Company as required by the Financial Instruments and Exchange Act of Japan.
In preparing the accompanying consolidated ﬁnancial statements, certain reclassiﬁcations and rearrangements have been
made to the consolidated ﬁnancial statements issued domestically in order to present them in a format which is more familiar toreaders outside Japan.
Certain reclassiﬁcations of previously reported amounts have been made to conform the consolidated ﬁnancial statements
for the year ended March 31, 2016 to the 2017 presentation. Such reclassiﬁcations had no effect on consolidated proﬁt or net
assets.
(b) Basis of consolidation
The accompanying consolidated ﬁnancial statements include the accounts of the Company and its signiﬁcant subsidiaries. All
signiﬁcant intercompany items have been eliminated in consolidation.
The overseas consolidated subsidiaries are consolidated on the basis of ﬁscal periods ending December 31, a date which
differs from the balance sheet date of the Company. As a result, adjustments have been made for any signiﬁcant intercompany
transactions which took place during the period between the year end of these overseas consolidated subsidiaries and the year
end of the Company.
Investments in an unconsolidated subsidiary and signiﬁcant afﬁliates are accounted for by the equity method.
Investments in unconsolidated subsidiaries and afﬁliates not accounted for by the equity method are carried at cost.
(c) Foreign currency translation
The ﬁnancial statements of the overseas consolidated subsidiaries are translated into yen at the rates of exchange in effect at thebalance sheet date, except that the components of net assets excluding non-controlling interests are translated at their historicalexchange rates. Differences resulting from translating the ﬁnancial statements of the overseas consolidated subsidiaries are
not included in the determination of proﬁt but are reported as translation adjustments and non-controlling interests in theaccompanying consolidated balance sheets at March 31, 2017 and 2016.
Revenue and expense items arising from transactions denominated in foreign currencies are generally translated into yen at
the rates of exchange in effect at the respective transaction dates.
All monetary assets and liabilities denominated in foreign currencies are translated into yen at the rates of exchange in effectat the consolidated balance sheet date and gain or loss on each translation is credited or charged to proﬁt.
(d) Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, cash in banks which can be withdrawn at any time and short-term
investments with a maturity of three months or less when purchased which can easily be converted to cash and are subject tolittle risk of change in value.
(e) Allowance for doubtful accounts
The Company and its consolidated subsidiaries provide an allowance for doubtful receivables at an amount calculated based on
their historical experience of bad debts on ordinary receivables plus an additional estimate of probable speciﬁc bad debts from
customers experiencing ﬁnancial difﬁculties.
(f) Inventories
Inventories are stated at the lower of cost or net selling value, cost being determined primarily by the moving average method.

29

30

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2017(g) Property, plant and equipment
Depreciation is computed principally by the straight-line method over the estimated useful lives of the respective assets except
for leased assets.
(h) Leases
Leased assets under ﬁnance lease transactions that do not transfer ownership to the lessee are depreciated to a residual value ofzero by the straight-line method using the contract term as the useful life.
For ﬁnance lease transactions that do not transfer ownership to the lessee, those that started on or before March 31, 2008
continue to be accounted for as operating lease transactions.
(i) Investments in securities
Securities are classiﬁed into three categories: trading securities, held-to-maturity debt securities and other securities. Trading
securities, consisting of debt and marketable equity securities, are carried at fair value. Gain and loss, both realized andunrealized, are credited and charged to income. Held-to-maturity debt securities are carried at amortized cost. Marketablesecurities classiﬁed as other securities are carried at fair value, with any changes in unrealized holding gain or loss, net ofthe applicable income taxes, reported as a separate component of net assets. Non-marketable securities classiﬁed as othersecurities are carried at cost. Cost of securities sold is determined by the moving average method.
(j) Research and development costs and computer software
Research and development costs are charged to income when incurred.
Expenditures relating to the development of computer software intended for internal use are charged to income as incurred,
except if these are deemed to contribute to the generation of future income or cost savings. Such expenditures are capitalized asassets and amortized by the straight-line method over their respective estimated useful lives, generally a period of 5 years.
(k) Income taxes
Income taxes are calculated based on taxable income and charged to income on an accrual basis. Deferred income tax assets
and liabilities are computed based on the temporary differences between ﬁnancial reporting and the tax bases of the assets andliabilities which will result in taxable or tax-deductible amounts in the future. The calculation of deferred income tax assets andliabilities is based on the enacted tax laws.
(l) Hedge accounting
Gain or loss on derivatives positions designated as hedges is deferred until the loss or gain on the respective underlying hedged
items is recognized. Interest rate swaps which meet certain conditions are accounted for as if the interest rates applied to theswaps had originally applied to the underlying debt.
Forward foreign currency exchange contracts which meet certain criteria are accounted for by the allocation method which
requires that recognized foreign currency receivables or payables be translated at the corresponding contract rates (“Allocation
method”).
(m) Accrued bonuses to employees
Accrued bonuses to employees are provided based on the estimated amount of bonuses to be paid to employees which is charged
to income in the current year.
(n) Accrued bonuses to directors and audit & supervisory board members
Accrued bonuses to directors and audit & supervisory board members are provided at an estimate of the amount to be paid in thefollowing year which has been allocated to the current ﬁscal year.
(o) Reserve for periodic repairs
The Company and certain consolidated subsidiaries provide a reserve for the cost of periodic repairs to production facilities atplants based on their estimates of the future cost of such repairs.

Consolidated
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Governance
SystemCSR Based on
Responsible
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Ten-Years
Summary

Management
Discussion
and Analysis ofOperation

Financial
Statements

Corporate Data(p) Retirement beneﬁts
The liability for retirement beneﬁts is provided based on the retirement beneﬁt obligation reduced by the pension plan assets atfair value at the end of the year.
The retirement beneﬁts are attributed to periods corresponding to the service years of eligible employees based on the
beneﬁt formula method.
Actuarial gain or loss is amortized in the year following the year in which the gain or loss is recognized by the straight-line
method principally over a period of 10 years, which is within the estimated average remaining years of service of the eligible
employees.
Prior service cost is amortized by the straight-line method principally over a period of 5 years, which is within the estimatedaverage remaining years of service of the eligible employees.
(q) Distribution of retained earnings
Under the Corporation Law of Japan, the distribution of retained earnings with respect to a given ﬁnancial period is made byresolution of the shareholders at a general meeting held subsequent to the close of the ﬁnancial period. The accounts for that
period do not, therefore, reﬂect such distributions (see Note 25).
(r) Recognition of contract revenue and cost
The Company recognizes revenue by applying the percentage-of-completion method for the construction projects for which
the outcome of the construction activity is deemed certain at the end of the reporting period. To estimate the progress of such
construction projects, the Company measures the percentage of completion by comparing costs incurred to date with the mostrecent estimate of total costs required to complete the project (cost to cost basis). For other construction projects where theoutcome cannot be reliably measured, the completed-contract method is applied.
2.

U.S. Dollar Amounts
The translation of yen amounts into U.S. dollar amounts is included solely for convenience, as a matter of arithmetic computation
only, at ¥112.19 = U.S. $1.00, the approximate rate of exchange in effect on March 31, 2017. This translation should not be
construed as a representation that yen have been, could have been, or could in the future be, converted into U.S. dollars at theabove or any other rate.

3.

Additional Information
Application of Implementation Guidance on Recoverability of Deferred Tax Assets
Effective from the year ended March 31, 2017, the Company and its consolidated domestic subsidiaries adopted“Implementation Guidance on Recoverability of Deferred Tax Assets” (Accounting Standards Board of Japan (“ASBJ”)) Guidance
No.26, issued on March 28, 2016.

31

32

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2017

4.

Financial Instruments(1) Current status of ﬁnancial instruments
1) Policy for ﬁnancial instruments
The Group manages temporary surplus funds through short-term bank deposits. The Group raises funds through bankloans. The Group uses derivatives for the purpose of reducing foreign currency exchange rate ﬂuctuation risk or interest
rate ﬂuctuation risk, and does not enter into derivatives for speculative or trading purposes.
2) Types of ﬁnancial instruments and related risk
Notes and accounts receivable, trade are exposed to credit risk in relation to customers. Trade receivables in foreign
currencies, arising from export transactions for the global business, are exposed to foreign currency exchange rate
ﬂuctuation risk, which are hedged by forward foreign exchange contracts.
Investments in securities are composed of the shares of common stock of other companies with which the Grouphas business or capital relationships, which are also exposed to market price volatility risk.
Substantially all notes and accounts payable, trade have payment due dates within one year, which are also hedged
by forward foreign currency exchange contracts. The loans are taken out principally for the purpose of making capital
expenditures. The loans with variable interest rates are exposed to interest rate ﬂuctuation risk. However, the interest
rate ﬂuctuation risk is covered by interest rate swap transactions.
Regarding derivatives, the Group enters into forward foreign currency exchange transactions to avoid foreign currency
exchange rate ﬂuctuation risk related to trade receivables and trade payables denominated in foreign currencies. The Groupalso enters into interest rate swap transactions to avoid interest rate ﬂuctuation risk related to the loans.
Further information regarding the method of hedge accounting, hedging instruments and hedged items, hedging
policy, and the assessment of the effectiveness of hedging activities can be found in Note 22.
3) Risk management for ﬁnancial instrumentsi) Monitoring for credit risk (the risk that customers or counterparties may default)With respect to trade receivables, each related division of the Company monitors the conditions of their main
customers periodically, monitors due dates and outstanding balances of individual customers, and evaluates credit
worthiness of their main customers semiannually. The consolidated subsidiaries also monitor trade receivables in asame manner.
The Group also believes that the credit risk of derivatives is insigniﬁcant as the Group enters into derivativetransactions only with ﬁnancial institutions with high credit ratings.
ii)

Monitoring of market risks (the risks arising from ﬂuctuations in foreign exchange rates, interest rates and others)
For trade receivables and trade payables in foreign currencies, the Group enters into forward foreign currency
exchange contracts.
For investments in securities, the Group periodically reviews the fair values of such ﬁnancial instruments andthe ﬁnancial position of the issuers. In addition, the Group continuously evaluates whether securities other thanthose classiﬁed as held-to-maturity should be maintained taking into account their fair values and relationships with
the issuers.
For derivative transactions, the ﬁnance department of the Company enters into and manages derivativetransactions. Results of derivative transactions are reported to the director in charge monthly.

iii) Monitoring of liquidity risk (the risk that the Group may not be able to meet its obligations on the scheduled due dates)
Based on reports from each division, the Group prepares and updates its cash ﬂow plans on a timely basis to
manage liquidity risk.
4) Supplementary explanation of the estimated fair value of ﬁnancial instruments
The notional amounts of derivatives in the following table are not necessarily indicative of the actual market risk involved
in derivative transactions.

Consolidated
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Corporate Data

(2) Fair value of ﬁnancial instruments
Carrying value, fair value, and unrealized gain or loss on ﬁnancial instruments at March 31, 2017 and 2016 are shown in thefollowing table. The following table does not include ﬁnancial instruments for which it is extremely difﬁcult to determine thefair value.
2017
2016
(Millions of yen)

Carrying
value

Fair
value

Unrealized
loss

56,139¥Carrying
value

Fair
value

Unrealized(loss) gain

Assets:i) Cash and cash equivalents,
and time deposits ……………

¥ii) Notes andaccounts receivable ……………
iii) Investments insecurities:
Other securities ………………

Total assets …………………………

56,139¥–¥–69,172¥

69,172¥–64,20164,201

36,274¥ 156,614

36,274¥ 156,614

¥

–
–

¥

28,968163,076¥

28,968163,076

¥

–
–

¥

¥

¥

–

¥

39,310¥39,310¥–64,93664,936–

Liabilities:iv) Notes andaccounts payable ………………
v) Short-termbank loans………………………
vi) Current portion of
long-term debt …………………

44,615
9,976

9,976

–

13,186

13,186–¥

11,565
26,21092,366

¥

(18)
(164)
(182)

¥

8,195
29,16689,857¥

8,180
29,26089,936

¥

(15)
94
79

¥

15

¥

–

¥

23

¥

23

¥

–

Total liabilities ………………………

¥

11,583
26,37492,548Derivatives …………………………

¥

15vii) Long-term debt ………………

44,615

2017(Thousands of U.S. dollars)

Carrying
value

Fair
value

i) Cash and cash equivalents,
and time deposits ………………

$ 500,392$ 500,392

ii) Notes andaccounts receivable ……………

572,252

572,252

323,326$1,395,970

323,326$1,395,970

Unrealized
loss

Assets:iii) Investments insecurities:
Other securities ………………

Total assets …………………………

$

–
–

$

–
–

33

34

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2017

2017
(Thousands of U.S. dollars)

Carrying
value

Fair
value

Unrealized
lossiv) Notes andaccounts payable ………………

$ 397,674$ 397,674v) Short-termbank loans………………………

88,921

88,921–

Total liabilities ………………………

103,244
235,083$ 824,922

103,084
233,622$ 823,301$(160)(1,462)(1,622)Derivatives …………………………

$

$

$

–

Liabilities:vi) Current portion of
long-term debt …………………

vii) Long-term debt ………………

1)

134

134

$

–

Calculation methods of fair value of ﬁnancial instruments, securities, and derivatives are as follows:
Assets:i) Cash and cash equivalents, time deposits, and ii) notes and accounts receivable
Since these items are settled in a short period of time, their carrying values approximate the fair value.
iii) Investments in securities
Please refer to Note 1(i).
Liabilities:iv) Notes and accounts payable, and v) short-term bank loans
Since these items are settled in a short period of time, their carrying values approximate the fair value.
vi) Current portion of long-term debt, and vii) long-term debt
The fair value of long-term debt is based on present value of the total amount including principal and interest,
discounted by the expected interest rate in the case of new borrowings under the same conditions and in the sameamount of the balance as of the end of the period. Long-term loans with ﬂoating interest rates were hedged by interestrate swap agreements and accounted for as loans with ﬁxed interest rates. The estimated fair value of those longterm loans is reasonably based on the present value of the total of principals, interests and net cash ﬂows of swap
agreements discounted by the interest rates, estimated reasonably, applicable to loans made under similar conditions.
Derivative transactions:
Please refer to Note 22.

2)

Financial instruments for which it is extremely difﬁcult to determine the fair value:
Other securities whose market value was not determinable at March 31, 2017 and 2016 are presented as follows:
2017
2016
2017

Unlisted securities and other ……………

(Thousands of
U.S. dollars)(Millions of yen)

¥

1,214

¥

1,350

$

10,821Since there is no market price for unlisted securities and it is difﬁcult to determine the fair value, they are not included in thepreceding table “(2) Fair value of ﬁnancial instruments.”
The impairment losses on investment in unlisted securities in the amount of ¥115 million ($1,025 thousand) wererecognized for the year ended March 31, 2017.

Consolidated
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3)

Special Feature

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CSR Based on
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Governance
SystemManagement
Discussion
and Analysis ofOperation

Ten-Years
Summary

Corporate Data

The redemption schedule for monetary assets with maturity dates as of March 31, 2017 and 2016 is as follows:
2017
2016
2017
(Thousands of
U.S. dollars)(Millions of yen)

Cash and cash equivalents, and time
deposits ……………………………………

Due within
one year

Due within
one year

Due within
one year¥¥$

56,13964,201
120,340

Notes and accounts receivable …………

¥
5.

Financial
Statements¥

500,392572,252$ 1,072,644

69,17264,936
134,108

Investments in Securities
Marketable securities classiﬁed as other securities at March 31, 2017 and 2016 are summarized as follows:
2017
2016
(Millions of yen)

Carrying
value
Securities whose carrying value
exceeds their acquisition cost:
Equity securities ……………………

¥

36,21436,214

Subtotal ………………………………

Securities whose acquisition costexceeds their carrying value:
Equity securities ……………………

60
60
36,274

Subtotal ………………………………
Total …………………………………

¥

Acquisition
cost

Unrealized
gain (loss)¥¥

19,01919,01985
85
19,104¥¥

17,195
17,195Carrying
value¥

27,031
27,031(25)(25)
17,170 ¥

1,937
1,937
28,968

2017(Thousands of U.S. dollars)

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

Subtotal ………………………………

Securities whose acquisition costexceeds their carrying value:
Equity securities ……………………

Subtotal ………………………………
Total …………………………………

Carrying
value

Acquisition
cost

Unrealized
gain (loss)$ 322,792
322,792$ 169,525
169,525$ 153,267
153,267535
535$ 323,327

758
758$ 170,283

(223)
(223)
$ 153,044

Sales of other securities for the years ended March 31, 2017 and 2016 were as follows:
2017
2016
2017

Proceeds ……………………………
Gross realized gain …………………

(Thousands of
U.S. dollars)(Millions of yen)

¥
¥

1,260
1,199

¥
¥

447
48

$
$

11,231
10,687

Acquisition
cost

¥

¥

16,424
16,4242,231
2,231
18,655

Unrealized
gain (loss)¥¥

10,607
10,607(294)(294)
10,31335

36

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2017

6.

Inventories
Inventories at March 31, 2017 and 2016 were as follows:
2017
2016

Merchandise and ﬁnished goods ……

¥Work in process ………………………
Supplies ………………………………

Total …………………………………

7.

(Thousands of
U.S. dollars)(Millions of yen)

Raw materials ………………………

¥

28,162
6,315
10,595
6,037
51,109¥¥2017

27,884
9,860
5,574
5,689
49,007$ 251,021
56,28894,43853,811$ 455,558

Short-Term Bank Loans, Long-Term Debt and Lease Obligations
Short-term bank loans consisted mainly of unsecured loans. The average interest rates on short-term bank loans outstanding at
March 31, 2017 and 2016 were 1.42% and 0.89%, respectively.
Long-term debt and lease obligations at March 31, 2017 and 2016 consisted of the following:
2017
2016

2017
(Thousands of
U.S. dollars)(Millions of yen)Unsecured bonds payable in Japanese yen, at rate of 0.11%,
due through 2021 ……………………………………………………

¥

10,000¥–$89,135

Unsecured loans from banks and insurance companies, payable inJapanese yen, at rates from 0.26% to 0.87%, due through 2022 …

17,271

17,832

153,944

Unsecured loans from banks, payable in U.S. dollars, at rates
from 1.44% to 1.62%, due through 2020 ……………………………

13,324

19,524

118,762

Unsecured loans from banks, payable in Euro, at rates from 0.24%
to 0.53%, due through 2023 …………………………………………

7,362

–

65,621–
108
48,065(11,608)
36,4575
133
37,494(8,220)29,274–963
428,425(103,467)
324,958

Secured loans from banks, payable in Japanese yen, at rate of
1.24%, due through 2016 ……………………………………………

Lease obligations ……………………………………………………
Subtotal ……………………………………………………………

Less current portion …………………………………………………

Total …………………………………………………………………

¥¥

The aggregate annual maturities of long-term debt subsequent to March 31, 2017 are summarized below:
Year ending March 31,2018 …………………………………………………………………

(Millions of yen)¥

2019 …………………………………………………………………
2020 …………………………………………………………………

2021 …………………………………………………………………
2022 and thereafter …………………………………………………

¥

11,583
5,192
9,431
2,271
19,48047,957(Thousands of
U.S. dollars)$$

103,244
46,27984,063
20,242
173,633
427,462$

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The aggregate annual maturities of lease obligations to March 31, 2017 are summarized below:
Year ending March 31,2018 …………………………………………………………………
2019 …………………………………………………………………

(Millions of yen)¥2020 …………………………………………………………………

2021 …………………………………………………………………
2022 and thereafter …………………………………………………

¥(Thousands of
U.S. dollars)

25
27
21
7
28
108

$

$

223
241
187
62
250
963

Assets pledged as collateral for short-term bank loans, long-term debt, including the current portion thereof, and notes andaccounts payable at March 31, 2017 and 2016 were as follows:
2017
2016
2017

Time deposits ………………………………………………………

¥

Land …………………………………………………………………
Buildings and structures ……………………………………………
Machinery and equipment …………………………………………

Other assets …………………………………………………………

Total …………………………………………………………………

8.

(Thousands of
U.S. dollars)(Millions of yen)

¥

8
550
105
175
5
843

¥

¥

8
550
72
206
5
841

$

$

71
4,902
936
1,560
45
7,514

Retirement Beneﬁts
Outline of Retirement Beneﬁt Plan
Employees of the Company and consolidated subsidiaries are mainly covered by funded and unfunded deﬁned beneﬁt plans anddeﬁned contribution pension plans to provide for retirement beneﬁts. In funded deﬁned beneﬁt corporate pension plans, lumpsum payments or pensions at retirement based on salary and length of service are paid. In unfunded lump-sum payments plan,
lump-sum payments based on salary and length of service are paid as retirement beneﬁts. In addition, the Company has a cash
balance plan for a deﬁned beneﬁt corporate pension plan and a retirement lump-sum plan. Under the cash balance plan, eacheligible employee has a hypothetical account, which is equivalent to the funded amount as the basis for the pension payment. The
hypothetical accounts accumulate contribution credits based on salary level and interest credits based on market interest trends.
The Company also has the employeesʼ retirement beneﬁt trust.
Certain consolidated subsidiaries calculate the retirement beneﬁt obligations, retirement beneﬁt assets and retirement
beneﬁt expenses for their deﬁned beneﬁt corporate pension plans and lump-sum payments plans based on the amount which
would be payable at the year-end if all eligible employees terminated their services voluntarily (“the simpliﬁed method”).
Certain consolidated subsidiaries participate in a multi-employer pension plan. Since the portion of pension assets of theconsolidated subsidiaries held in the multi-employer pension plan could not be reasonably calculated, the required contribution
amount is recognized as retirement beneﬁt expense.

37

38

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2017

Information on deﬁned beneﬁt pension plans for the years ended March 31, 2017 and 2016 is as follows:
The change in retirement beneﬁt obligation is outlined as follows (excluding plans to which the simpliﬁed method is applied):
2017
2016
2017

Balance at the beginning of the year ………………………………

¥

Service cost …………………………………………………………

Interest cost …………………………………………………………
Actuarial (gain) loss …………………………………………………
Beneﬁts paid …………………………………………………………

Prior service cost ……………………………………………………
Other …………………………………………………………………

Balance at the end of the year ………………………………………

(Thousands of
U.S. dollars)(Millions of yen)¥

38,9881,885
203(2,436)(1,793)–(1)
36,846¥¥36,412
1,682
417
2,492
(1,977)(9)(29)
38,988$$347,518
16,802
1,809(21,713)(15,982)–(9)
328,425

The change in plan assets at fair value is outlined as follows (excluding plans to which the simpliﬁed method is applied):
2017
2016
2017

Balance at the beginning of the year ………………………………

¥Expected return on plan assets ……………………………………
Actuarial (loss) gain …………………………………………………

Contributions by the employer………………………………………

Beneﬁts paid …………………………………………………………

Balance at the end of the year ………………………………………

(Thousands of
U.S. dollars)(Millions of yen)¥

31,007
607
914
1,720
(1,076)33,172¥¥

31,122
911(1,590)1,702(1,138)31,007The change in liabilities for retirement beneﬁts calculated by the simpliﬁed method is outlined as follows:
2017
2016

Balance at the beginning of the year ………………………………

¥Beneﬁts paid …………………………………………………………

Other …………………………………………………………………

Decrease resulting from exclusion of subsidiaries fromconsolidation …………………………………………………………

Balance at the end of the year ………………………………………

¥

1,059
85
(30)
(14)
–
1,100

$

276,379
5,410
8,147
15,332(9,591)
295,677

2017(Thousands of
U.S. dollars)(Millions of yen)

Retirement beneﬁt expenses ………………………………………

$

¥

¥

988
100
(112)
(13)
96
1,059

$

$

9,439
758
(267)
(125)
–
9,805

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The reconciliation of the ending balance of the retirement beneﬁt obligation and plan assets to the asset and liability for
retirement beneﬁts recognized in the consolidated balance sheets were as follows:
2017
2016
2017

Funded retirement beneﬁt obligation ………………………………

(Thousands of
U.S. dollars)(Millions of yen)¥

Unfunded retirement beneﬁt obligation ……………………………

26,412(33,387)(6,975)
11,749Net amount of liabilities and assets recognized in consolidatedbalance sheets ………………………………………………………

4,774

9,039

42,553Liability for retirement beneﬁts ……………………………………
Asset for retirement beneﬁts ………………………………………

12,072(7,298)12,568(3,529)107,603(65,050)

Plan assets at fair value ……………………………………………

Net amount of liabilities and assets recognized in consolidatedbalance sheets ………………………………………………………

¥

4,774

¥

28,247(31,200)(2,953)
11,992

¥

9,039

$

235,422(297,593)(62,171)
104,724$

42,553Retirement beneﬁt calculated by the simpliﬁed method is included in the above table.
The components of retirement beneﬁt expenses are outlined as follows:2017

Service cost …………………………………………………………

(Thousands of
U.S. dollars)(Millions of yen)¥Interest cost …………………………………………………………
Expected return on plan assets ……………………………………

Amortization:
Actuarial loss …………………………………………………………

Past service cost ……………………………………………………
Retirement beneﬁt expenses calculated by simpliﬁed method …

Retirement beneﬁt expenses ………………………………………

2017

2016

¥

1,886
203
(607)
836
14
84
2,416

¥

¥

1,682
417
(911)
174
16
99
1,477

$

$

16,8101,809(5,410)
7,452
125
749
21,535The components of retirement beneﬁts liability adjustments included in other comprehensive income, before the tax effect, areoutlined as follows:
2017
2016
2017
(Thousands of
U.S. dollars)(Millions of yen)

Prior service cost ……………………………………………………

¥Total …………………………………………………………………

¥

Actuarial gain (loss) …………………………………………………

14
4,187
4,201

¥
¥

25
(3,909)(3,884)$$125
37,32037,44539

40

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2017

The components of retirement beneﬁt liability adjustments included in accumulated other comprehensive income, before the tax
effect, are outlined as follows:
2017
2016
2017
(Thousands of
U.S. dollars)(Millions of yen)

Unrecognized past service cost ……………………………………

¥Total …………………………………………………………………

¥

7
(389)
(382)

Unrecognized actuarial (loss) gain …………………………………

¥

21
3,798
3,819

¥

$
$

62
(3,467)(3,405)The breakdown of plan assets by major category is as follows:
2017
Bonds …………………………………………………………………

2016
57%
24%
10%
9%
100%

Equities ………………………………………………………………

Cash and deposits ……………………………………………………

Other …………………………………………………………………

Total …………………………………………………………………

55%
23%
14%
8%
100%

(Note) The breakdown of plan assets in the above table is determined based on the percentage of composition of the various
assets in the pension fund. Bonds include alternative investments that are approximately the same as bonds in terms oflevel of risk.
(Note) 0.4% of pension assets are part of a retirement beneﬁt trust for a corporate pension plan.
The assumptions used in accounting for the deﬁned beneﬁt plans for the years ended March 31, 2017 and 2016 are as follows:
2017
2016
Principally 0.8%
Principally 0.4%
Discount rates ………………………………………………………
Principally 2.0%
Principally 3.0%
Expected long-term rate of return on plan assets ………………
Principally 5.2%
Principally 5.2%
Rates of salary increase ……………………………………………
The expected long-term rate of return on plan assets is determined as a result of consideration of both the portfolio allocation atpresent and in the future, and long-term expected rates of return from multiple plan assets at present and in the future.
The required contributions to deﬁned contribution pension plans for the years ended March 31, 2017 and 2016 amounted to ¥165
million ($1,471 thousand) and ¥175 million, respectively.
The following table sets forth the status of the multi-employer pension plan at March 31, 2016 and 2015 the most recent date on
which such data was available:
2016
2015
2016
(Thousands of
U.S. dollars)(Millions of yen)

Plan assets……………………………………………………………

¥

531,917¥571,380$ 4,741,216¥

538,161(6,244)¥

561,736
9,644$

Total amounts of actuarial liability calculated under pension
ﬁnancing and minimum actuarial reserve …………………………

Difference ……………………………………………………………

4,796,872(55,656)

The contribution ratio of the Company and consolidated subsidiaries to the multi-employer plan was 0.5% at March 31, 2017 and2016. This percentage is not the same as the Company and consolidated subsidiariesʼ percentage of obligation.

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Additional information
The difference of ¥6,244 million ($55,656 thousand) in the above table is the net amount of the balance of prior service cost of¥34,541 million ($307,879 thousand) calculated under pension ﬁnancing, the shortage of the plan of ¥21,455 million ($191,238
thousand) and the general reserve of ¥49,752 million ($443,462 thousand) at March 31, 2016. Prior service cost is amortizedon a straight-line basis over 6 years as of March 31, 2016, and the Company and consolidated subsidiaries expensed additional
payments in the amount of ¥29 million ($258 thousand) for amortization of prior service cost.
The difference of ¥9,644 million in the above table is the net amount of the balance of prior service cost of ¥40,107 million
calculated under pension ﬁnancing, the general reserve of ¥35,441 million and the surplus of the plan of ¥14,311 million at March
31, 2015. Prior service cost was amortized on a straight-line basis over 7 years as of March 31, 2015, and the Company andconsolidated subsidiaries expensed additional payments in the amount of ¥28 million for amortization of prior service cost.

9.

Income Taxes
Income taxes applicable to the Company and its domestic consolidated subsidiaries consist of corporation, inhabitantsʼ
and enterprise taxes. The statutory tax rates in Japan for the years ended March 31, 2017 and 2016 were, in the aggregate,approximately 30.8% and 33.0%, respectively.
The effective tax rates reﬂected in the accompanying consolidated statements of income for the years ended March 31, 2017and 2016 differed from the above statutory tax rates for the following reasons:
2017
2016
30.8 %
33.0 %
Statutory tax rates……………………………………………………
Effect of:Valuation allowance ………………………………………………

Different tax rate applicable to income of subsidiaries …………

Tax credit for research and development costs …………………

Equity in earnings of an unconsolidated subsidiary and afﬁliates …

Other tax credit ……………………………………………………

Decrease in deferred income tax assets resulting from change
in the statutory tax rates …………………………………………

Other, net …………………………………………………………
Effective tax rates ……………………………………………………

(1.4)
(0.7)
(4.5)
(2.7)
(1.6)

(1.8)
0.2
(2.6)
(2.3)
(0.3)

–
1.0
20.9 %

0.8(1.6)
25.4 %41

42

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2017

Deferred income taxes reﬂect the net tax effect of the temporary differences between the carrying amounts of the assets andliabilities calculated for ﬁnancial reporting purposes and the corresponding tax bases reported for income tax purposes. The
signiﬁcant components of the deferred tax assets and liabilities of the Company and its consolidated subsidiaries at March 31,2017 and 2016 are summarized as follows:
2017
2016
2017
(Thousands of
U.S. dollars)(Millions of yen)

Deferred tax assets:
Depreciation and amortization(including loss on impairment) ……………………………………

¥

Liability for retirement beneﬁts for employees …………………

Tax loss carryforwards ……………………………………………

Intercompany proﬁt on inventories and property, plant andequipment …………………………………………………………

Accrued bonuses to employees …………………………………
Loss on impairment of land ………………………………………

Reserve for periodic repairs ………………………………………
Loss on devaluation of investments in securities and other ……

Other ………………………………………………………………

Gross deferred tax assets …………………………………………
Less: Valuation allowance …………………………………………

Total deferred tax assets ……………………………………………
Deferred tax liabilities:
Net unrealized holding gain on securities ………………………
Equity in earnings of an overseas consolidated subsidiary ……

Deferred capital gain on property (in overseas subsidiaries) …
Depreciation and amortization ……………………………………

Reserve for depreciation for tax purposes ………………………
Other ………………………………………………………………

Total deferred tax liabilities …………………………………………

Net deferred tax assets ……………………………………………

¥

2,014
1,497
4,842

¥

2,043
2,746
4,845

$

17,952
13,34343,159

609
888
1,038
778
681
1,218
13,565(4,530)
9,035

729
963
886
750
645
1,126
14,733(4,938)
9,795

5,428
7,915
9,252
6,935
6,070
10,857
120,911(40,378)
80,533(4,775)(653)(245)(1,625)(9)(1,677)(8,984)51(2,611)(945)(245)(1,342)(12)(1,709)(6,864)
2,931(42,562)(5,820)(2,184)(14,484)(80)(14,949)(80,079)454¥$

10. Shareholdersʼ Equity
The Corporation Law of Japan (the “Law”) provides that an amount equal to 10% of the amount to be disbursed as distributions ofcapital surplus (other than the capital reserve) and retained earnings (other than the legal reserve) be transferred to the capitalreserve and the legal reserve, respectively, until the sum of the capital reserve and the legal reserve equals 25% of the capitalstock account. Such distributions can be made at any time by resolution of the shareholders, or by the Board of Directors if
certain conditions are met.
Retained earnings include the legal reserve provided in accordance with the provisions of the Law. The legal reserve of theCompany included in retained earnings amounted to ¥3,920 million ($34,940 thousand) at March 31, 2017 and 2016.

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Common stock and treasury stock
Movements in shares of common stock in issue and treasury stock during the years ended March 31, 2017 and 2016 aresummarized as follows:
2017
Number of shares(Thousands)

Common stock …………

Treasury stock …………

April 1, 2016

Increase

40,800217–
701

Decrease–
0

March 31, 201740,800919

The increase in treasury stock of 701 thousand shares was due to the acquisition of shares based on the articles of incorporationof the Company under Article 165 (2) of the Companies Act (700 thousand shares) and the acquisition of fractional shares (1thousand shares).
The decrease in treasury stock of 0 thousand shares was due to the sale of shares less than one standard unit (0 thousand
shares).
2016
Number of shares(Thousands)

Common stock …………

Treasury stock …………

April 1, 2015

Increase

Decrease

March 31, 2016

204,000
1,056

–
14

163,200
853

40,800217

The Company completed a reverse stock split of its common stock at a ratio of 1 share for 5 shares on October 1, 2015 on thebasis of a resolution by the annual meeting of shareholders held on June 19, 2015. As a result, the number of issued shares
decreased by 163,200 thousand shares.
The increase in treasury stock of 14 thousand shares was due to the acquisition of fractional shares (14 thousand shares)
and the acquisition of shares less than one standard unit as a result of the reverse stock split (0 thousand shares).
The decrease in treasury stock of 853 thousand shares was due to the reverse stock split (853 thousand shares) and the saleof shares less than one standard unit (0 thousand shares).
11. Research and Development Costs
Research and development costs included in cost of sales and selling, general and administrative expenses for the years ended
March 31, 2017 and 2016 totaled ¥13,283 million ($118,397 thousand) and ¥12,303 million, respectively.
12. Gain on Sales of Property, Plant and Equipment
Gain on sale of land was included in gain on sales of property, plant and equipment for the year ended March 31, 2017.
13. Gain on Sales of Investment in a Subsidiary
On June 30, 2015, the Company sold all shares of Nippon Polyester Co., Ltd. to Takiron Co., Ltd. As a result, the Company
recorded a gain on sales of investment in a subsidiary in the amount of ¥620 million for the year ended March 31, 2016.
14. Loss on Closing of Research Center
For the year ended March 31, 2017, the Company recorded a loss due to the closure of the Tsukuba Research Center. The main
component was loss on impairment.

43

44

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2017

Details of the loss on impairment of property, plant and equipment are summarized as follows:
2017
Company

Tsukuba Research Center(Tsukuba, Ibaraki Prefecture)

Application

Research base

Classiﬁcation(Millions of yen)(Thousands of
U.S. dollars )

¥ 217
2
497
1
¥ 717

Buildings and structures
Equipment
Land
Other

Total

$ 1,934
184,430
9$ 6,391

Assets are grouped by the smallest units generating largely independent cash ﬂows based on the business units. In addition,assets not expected to be utilized in the future are grouped individually.
During the year ended March 31, 2017, the Tsukuba Research Center, located in Tsukuba, Ibaraki Prefecture, has been closed
and related assets were written down to their respective net recoverable amounts, and a loss on impairment was recognized. The
net recoverable amounts of these impaired assets were measured at net selling value based on appraisal value by a real estateappraiser.
15. Loss on Liquidation of Business
For the year ended March 31, 2017, the Company recorded a loss on liquidation of business consisting mainly of impairment loss
on manufacturing equipment. Details of the loss on liquidation of business are as follows:

Fumaric acid business in Himeji plant …………………………………………………

¥

108
51
159

Ethylene glycol monoethyl ether business in Kawasaki plant …………………………

Total ………………………………………………………………………………………

(Thousands of
U.S. dollars)(Millions of yen)

¥

$
$

963
454
1,417

16. Other
For the year ended March 31, 2017, the Company recorded expenses in the amount of ¥457 million ($4,073 thousand) related toemergency dredging for the recovery of water depth around the port at the Himeji plant.
17. Assets and Liabilities of a Subsidiary Excluded from Consolidation Following Sales of Its Shares
The assets and liabilities of Nippon Polyester Co., Ltd., a former subsidiary excluded from consolidation following the sales of its
shares for the year ended March 31, 2016, are as follows:(As of the acquisition date)Current assets …………………………………………………………………………

(Millions of yen)¥

Non-current assets ……………………………………………………………………
Current liabilities ………………………………………………………………………

Non-current liabilities …………………………………………………………………
Non-controlling interests ………………………………………………………………

Gain on sales of shares…………………………………………………………………

Proceeds from sales of shares of common stock ……………………………………
Cash and cash equivalents held by the subsidiary …………………………………

Net proceeds ……………………………………………………………………………

¥

2,773
136
(2,627)
(632)
0
620
270
(59)
211

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18. Other Comprehensive Income
The following table presents reclassiﬁcation adjustments and tax effects of components of other comprehensive income for theyears ended March 31, 2017 and 2016:
2017
2016
2017

Net unrealized holding gain (loss) on securities:
Amount arising during the year …………………………………

¥

Reclassiﬁcation adjustments ……………………………………

Before tax effects …………………………………………………

Tax effects …………………………………………………………

Net unrealized holding gain (loss) on securities ………………
Net unrealized deferred loss on hedges:
Amount arising during the year …………………………………

Before tax effects …………………………………………………

Tax effects …………………………………………………………

Net deferred loss on hedges ………………………………………
Translation adjustments:
Amount arising during the year …………………………………

Translation adjustments …………………………………………

Retirement beneﬁts liability adjustments:
Amount arising during the year …………………………………
Reclassiﬁcation adjustments ……………………………………

Before tax effects …………………………………………………

Tax effects …………………………………………………………

Retirement beneﬁts liability adjustments ………………………
Share of other comprehensive loss of an unconsolidated
subsidiary and afﬁliates accounted for by the equity method:Amount arising during the year …………………………………

Reclassiﬁcation adjustments ……………………………………
Share of other comprehensive loss of an unconsolidated
subsidiary and afﬁliates accounted for by the equity method …

Total other comprehensive income (loss) …………………………

(Thousands of
U.S. dollars)(Millions of yen)

¥

7,872
(1,069)6,803(2,162)
4,641¥(4,750)(48)(4,798)1,752(3,046)$70,167(9,529)60,638(19,271)
41,367

(8)
(8)
2
(6)

(17)
(17)
6
(11)

(71)
(71)
18
(53)

(4,526)(4,526)

(843)
(843)

(40,342)(40,342)

3,350
851
4,201
(1,221)
2,980(4,073)190(3,883)
1,106(2,777)

29,8607,585
37,445(10,883)
26,562

(933)
20

(785)
20

(8,316)
178

(913)
2,176

¥

(765)
(7,442)$(8,138)19,396

19. Lease
The following pro forma amounts represent the acquisition cost, accumulated depreciation and net book value of property leased
to the Company and its domestic consolidated subsidiaries at March 31, 2017 and 2016 which would have been reﬂected in theaccompanying consolidated balance sheets if ﬁnance leases, other than those which transfer the ownership of the leased assets
to the Company or its domestic consolidated subsidiaries, that started on or before March 31, 2008 (which are currently accounted
for as operating leases) had been capitalized:
2017
2016
2017
(Thousands of
U.S. dollars)(Millions of yen)Equipment:
Acquisition costs ……………………………………………………

¥

Net book value ……………………………………………………

¥

Accumulated depreciation …………………………………………

491
(451)
40

¥
¥

532
(440)
92

$
$

4,377
(4,020)
357

45

46

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2017

Lease payments of the Company and its domestic consolidated subsidiaries relating to ﬁnance leases amounted to ¥52 million($463 thousand) and ¥54 million for the years ended March 31, 2017 and 2016, respectively. Depreciation on these leased assets
calculated by the straight-line method would have amounted to ¥52 million ($463 thousand) and ¥54 million for the years ended
March 31, 2017 and 2016, respectively, if it had been reﬂected in the accompanying consolidated balance sheet.
Future minimum lease payments (including the interest portion thereon) subsequent to March 31, 2017 under ﬁnance leasetransactions, other than those which transfer the ownership of the leased assets to the Company or its domestic consolidated
subsidiaries, that were entered into on or before March 31, 2008 are summarized as follows:Year ending March 31,
2018(Thousands of
U.S. dollars)(Millions of yen)

¥

40

$

357

20. Contingent Liabilities
The Company and a consolidated subsidiary were contingently liable as guarantors of indebtedness of afﬁliates at March 31, 2017and 2016 as follows:
2017
2016
2017

American Acryl L.P. …………………………………………………

(Thousands of
U.S. dollars)(Millions of yen)

¥

1,361
681

Re-guaranteed by Arkema Delaware Inc. …………………………

¥

1,709
854

$

12,131
6,070

21. Amounts per Share2017
Proﬁt attributable to owners of parent ……………………………

2017

2016
(Yen)

¥

Cash dividends ………………………………………………………

Net assets ……………………………………………………………

478.36150.007,238.33(U.S. dollars)¥

640.6998.00
6,870.84

$

4.26
1.34
64.52

Proﬁt attributable to owners of parent per share has been computed based on the proﬁt attributable to owners of parent available
for distribution to shareholders of common stock and the weighted-average number of shares of common stock outstanding
during the year. Diluted proﬁt attributable to owners of parent per share has not been presented for the years ended March 31,2017 and 2016 since neither the Company nor any of the consolidated subsidiaries had any potentially dilutive shares at March 31,2017 and 2016.
The Company completed a reverse stock split of its common stock at a ratio of 1 share for 5 shares on October 1, 2015. The
amounts per share of net assets and proﬁt attributable to owners of parent have been computed based on the assumption thatthe reverse stock split had been completed at the beginning of the prior year.
Cash dividends per share represent the cash dividends declared as applicable to the respective years together with theinterim cash dividends paid.
The ﬁnancial data used in the computation of proﬁt attributable to owners of parent per share for the years ended March 31,2017 and 2016 is summarized as follows:
2017
2016
2017
(Thousands of
U.S. dollars)(Millions of yen)Proﬁt attributable to owners of parent ……………………………

¥

19,361–¥

26,003–$

172,573–

Adjusted proﬁt attributable to owners of parent available toshareholders of common stock ……………………………………

¥

19,361¥

26,003$

172,573

Deductions from proﬁt attributable to owners of parent …………

Weighted-average number of shares of common stock outstanding
during the year (thousands of shares) ……………………………

40,474

40,585

Consolidated
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22. Derivatives(1) Derivative transactions to which hedge accounting is not applied
There were no derivative transactions to which hedge accounting was not applied as of March 31, 2017 and 2016.
(2) Derivative transactions to which hedge accounting is applied
The estimated fair value of the derivatives positions outstanding which qualify for deferral hedge accounting as of March 31,2017 and 2016 are summarized as follows:
Currency-related transactions
2017
Contract value
Method of hedge
accounting

Transaction

Major hedged item

Maturing within
one year

Maturing after
one year

Fair value

Millions of yen

Deferral hedge

Forward foreign currency
exchange contracts:
Buy

Accounts payable, trade

Allocation method

Forward foreign currency
exchange contracts:
Sell

Accounts receivable, trade

Buy

Accounts payable, trade

¥

71

¥

6,587
24

–

¥

15

(*)
(*)

–
–

2016
Contract value
Method of hedge
accounting

Transaction

Major hedged item

Maturing within
one year

Maturing after
one year

Fair value

Millions of yen

Deferral hedge

Allocation method

Forward foreign currency
exchange contracts:
Buy

Accounts payable, trade

Forward foreign currency
exchange contracts:
Sell

Accounts receivable, trade

Buy

Accounts payable, trade

¥

120

1,977
25

¥

–

–
–

¥

23

(*)
(*)

47

48

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 20172017
Contract value
Method of hedge
accounting

Transaction

Major hedged item

Maturing within
one year

Maturing after
one year

Fair value

Thousands of U.S. dollars

Deferral hedge

Allocation method

Forward foreign currency
exchange contracts:
Buy

Accounts payable, trade$

Forward foreign currency
exchange contracts:
Sell

Accounts receivable, trade

Buy

Accounts payable, trade

58,713
214

633

$

–

$

134

(*)
(*)

–
–

Fair value of forward foreign currency exchange contracts is computed using prices provided by counterparty ﬁnancial institutions.
(*) Fair value of forward foreign currency exchange contracts under the allocation method is included in accounts receivable,
trade or accounts payable, trade.

Interest-rate related transactions
2017
Contract value
Method of hedge
accounting

Transaction

Major hedged item

Notional
amountMore than one
year

Fair value(Millions of yen)

Swap rates applied tounderlying debt

Interest rate swaps:
Long-term debt,
Receive / ﬂoating and pay / ﬁxed including current portion

¥

5,000

¥

(*)

–

2016
Contract value
Method of hedge
accounting

Transaction

Major hedged item

Notional
amountMore than one
year

Fair value(Millions of yen)

Swap rates applied tounderlying debt

Interest rate swaps:
Long-term debt,
Receive / ﬂoating and pay / ﬁxed including current portion

¥

5,000

¥

(*)

5,000

2017
Contract value
Method of hedge
accounting

Transaction

Major hedged item

Notional
amountMore than one
year

Fair value(Thousands of U.S. dollars)

Swap rates applied tounderlying debt

Interest rate swaps:
Long-term debt,
Receive / ﬂoating and pay / ﬁxed including current portion$ 44,567$–(*) Because interest rate swap agreements are accounted for by applying swap rates to underlying long-term debt, their fairvalue is included in that of the long-term debt disclosed in Note 3.

(*)

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23. Segment Information(1) Outline of reporting segments
The Groupʼs reporting segments are divisions of the Group for which separate ﬁnancial information is available, and whose
operating results are reviewed regularly by the Board of Directors meeting of the Company in order to allocate management
resources and assess performance of operations.
The Groupʼs main business lines are divided based on similarities of function and nature and the Company prepares thecomprehensive strategy and conducts the business activities corresponding to the products handled by each business line.
Accordingly, the Group has three reporting segments based on product family: Basic chemicals, Functional chemicals, andEnvironment and catalysts.
Basic chemicals division is engaged in manufacturing and sales of acrylic acids, acrylic ester, ethylene oxides, ethylene
glycols, ethanolamine, higher-alcohol and glycol ether.
Functional chemicals division is engaged in manufacturing and sales of superabsorbent polymers, pharmaceuticalintermediates, polymer for concrete admixture, electronic and information materials, iodine, maleic anhydride, resins foradhesives and paints, and process adhesive products.
Environment and catalysts division is engaged in manufacturing and sales of automotive catalysts, De-NOx catalysts, dioxin
decomposition catalysts, industrial catalysts, exhaust gas treatment equipment and fuel cell material.
(2) Calculation methods used for sales, income or loss, assets, and other items on each reporting segment.
The accounting policies of the segments are substantially the same as those described in the signiﬁcant accounting policies inNote 1. Intersegment sales and transfers are recorded at the same prices used in transactions with third parties.
(3) Information as to sales, proﬁt or loss, assets, and other items on each reporting segment
The segment information of the Company and its consolidated subsidiaries for the years ended March 31, 2017 and 2016 isoutlined as follows:Year ended March 31, 2017
Basic
chemicals

Functional
chemicals

Environmentand catalysts

¥

¥

¥

Total

Adjustments
andeliminations

Consolidated(Millions of yen)

Depreciation and amortization

107,580
29,311
136,891
8,207
132,191
9,359

Increases in property, plant andequipment and other assets

6,905

Sales to third parties
Intragroup sales and transfers
Net sales
Segment proﬁt
Segment assets

¥
¥

¥
¥

159,961
4,877
164,838
12,119227,037
8,572
28,753¥¥

26,429725
27,154748
29,330
570
2,792

¥
¥
¥

293,970
34,913328,883
21,074
388,558
18,501
38,450¥¥¥–(34,913)(34,913)77
45,052––¥¥¥

293,970–
293,970
21,151
433,610
18,501
38,45049

50

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2017

Year ended March 31, 2016
Basic
chemicals

Functional
chemicals

Environmentand catalysts

¥

¥

¥

Total

Adjustments
andeliminations

Consolidated(Millions of yen)

Depreciation and amortization

117,643
34,353
151,996
8,851
134,121
9,441

Increases in property, plant andequipment and other assets

4,585

Sales to third parties
Intragroup sales and transfers
Net sales
Segment proﬁt¥¥

Segment assets¥¥

177,798
5,010
182,808
21,422
207,886
8,425¥¥

10,83027,683746
28,429620
27,665
520
341

¥
¥
¥

323,124
40,109363,233
30,893369,672
18,386¥¥¥15,756–(40,109)(40,109)341
38,325––¥¥¥323,124–
323,124
31,234
407,997
18,38615,756

Year ended March 31, 2017
Basic
chemicals

Functional
chemicals

Environmentand catalysts$$ 1,425,804
43,471$ 1,469,275$ 108,022
2,023,683
76,406$

Depreciation and amortization

958,909261,262$ 1,220,171$
73,153
1,178,278
83,421

Increases in property, plant andequipment and other assets

61,547

256,289

Total

Adjustments
andeliminations

Consolidated(Thousands of U.S. dollars)

Sales to third parties
Intragroup sales and transfers
Net sales
Segment proﬁt
Segment assets$$

235,574
6,462
242,036
6,667
261,431
5,081$ 2,620,287
311,195$ 2,913,482$ 187,842
3,463,392
164,908

24,886

342,722$–(311,195)$ (311,195)$
686
401,569–$ 2,620,287–$ 2,620,287$ 188,528
3,864,961
164,908–

342,722

Notes 1.

The adjustments in segment proﬁt are related to the elimination between inter segment transactions. The
adjustments in segment assets consist of inter segment elimination and the common properties of the group. The
common properties are the investments held by the Company, mainly cash and cash equivalents, and investments
in securities.

Note 2.

The amount of long-term prepaid expense and its amortized cost are included in increases in property, plant andequipment and other assets.

Consolidated
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(4) Related information
Geographical information
1) SalesSales categorized by countries and regions based on locations of customers of the Group for the years ended March 31, 2017and 2016 are summarized as follows:
2017(Millions of yen)

Japan

¥

149,943

Asia¥

62,473

EuropeAmericas¥¥36,89132,331

Other

¥

Total

12,332¥

293,970

2016(Millions of yen)

Japan

¥

162,192

Asia¥

Europe63,531¥

Americas46,902¥

31,785

Other

¥

Total

18,714¥

323,124

2017(Thousands of U.S. dollars)

Japan

$

1,336,509

Asia$

Europe556,850$

Americas328,826$

288,181

Other

$

Total

109,921$2,620,287“Asia” includes east and south-east Asia. “Americas” includes U.S.A. and Canada. “Other” includes areas except for Asia,
Europe, North America and Japan.
2)

Property, plant and equipment
Property, plant and equipment categorized by countries and regions as of March 31, 2017 and 2016 is summarized as follow:
2017(Millions of yen)

Japan

¥

103,648

Indonesia

Other Asia

Belgium¥¥¥

25,1082,645

23,047

Other

¥

Total

8,712

¥

10,290¥163,160

2016(Millions of yen)

Japan

¥

100,001

Indonesia

Other Asia

Belgium¥¥¥

28,228

2,230

5,839

Other

¥

Total

146,5882017(Thousands of U.S. dollars)

Japan

$

923,861

Indonesia

Other Asia

Belgium$$$

223,799

23,576

205,428

Other$

77,655

Total$

1,454,319

51

52

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2017(5) Information about loss on impairment
2017(Millions of yen)

Reporting segments
Basic chemicals
Loss onimpairment ………

¥

19

Functional
chemicals¥

Adjustments
andeliminations

Environment andcatalysts

108

¥

–

¥

Total

717

¥

844

2017
(Thousands of U.S. dollars)

Reporting segments
Basic chemicals
Loss onimpairment ………

$

169

Functional
chemicals$

Adjustments
andeliminations

Environment andcatalysts

963

$

–

$

Total

6,391

$

7,523

24. Related Party Transactions
Principal transactions between the Company and its related party for the years ended March 31, 2017 and 2016 are summarized
as follows:
2017
2016
2017
(Thousands of
U.S. dollars)(Millions of yen)

Umicore Shokubai Japan Co., Ltd.:Sales of ﬁnished goods ………………………………………………

¥Purchases of raw materials …………………………………………

18,84916,501¥The balances due from and to its related party at March 31, 2017 and 2016 were as follows:
2017$

19,888
17,844

168,010147,081

2017

2016

(Thousands of
U.S. dollars)(Millions of yen)

Umicore Shokubai Japan Co., Ltd.:
Notes and accounts receivable ………………………………………
Notes and accounts payable …………………………………………

¥

7,005
4,486

¥

$

6,970
4,947

62,43939,986

The prices for the above related party transactions were determined in reference to market value and cost.
Umicore Shokubai Co., Ltd. is a related company in which the Company indirectly owns 40% of the shares.
25. Subsequent Events
Cash dividends
The following distribution of retained earnings of the Company, which has not been reﬂected in the accompanying consolidated
ﬁnancial statements for the year ended March 31, 2017, was approved at a shareholdersʼ meeting held on June 21, 2017:

Cash dividends (¥75.00 = $0.669 per share) ………………………………………………

(Millions of yen)(Thousands of
U.S. dollars)

¥

$

2,991

26,660Consolidated
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53

54

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2017

Corporate Data

NIPPON SHOKUBAI CO., LTD. (As of March 31, 2017)
Established: August 21, 1941
Common Stock (Paid in Capital): 25,038 million yen
Number of Shares Issued: 40,800,000 shares
Number of Shares Authorized: 127,200,000 shares
Number of Employees: : 4,161 (Consolidated)
2,207 (Non-consolidated)
Markets listed: Tokyo Stock Exchange; Securities Code:4114;
ADR (The Bank of New York Mellon Bank);
Checker Symbol: NPSHY

Fiscal Year Ends: March 31
Auditors: Ernst & Young Shin Nihon LLC
Lead Managers (Securities): Nomura Securities Co., ltd.,
Mizuho Securities Co., Ltd.
Stock Transfer Agency: Mitsubishi UFJ Trust and Banking
Corporation
Banks: Resona Bank, Limited,
Mizuho Bank, Ltd.,The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Number of shareholders: 9,984

Organization Chart (As of June 21, 2017)

DivisionInternal Audit Office
Corporate Planning
Health & Medical Business
Development Office
Malonates Business
Development Office
General Affairs & HR
Finance & Accounting
Information Technology
Management Office
Responsible Care
Production
The Board

President

Engineering

Corporate Managing
Committee

Innovation & Business Development
Ethylene Oxide BusinessAcrylic BusinessSuperabsorbents Business
Performance Chemicals Business
Catalysis & Green Energy
Materials Business
Purchasing & Logistics
Kawasaki Plant
Himeji Plant

AuditorBoard of Auditors

Auditor OfficeConsolidated
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Corporate Data

Major Shareholders (As of March 31, 2017)

Name

Number of Shares
Owned(thousand shares)

Ratio of capital
Contribution
(%)

2,795

7.00

2,156

5.40

2,129
1,730
1,373

5.33
4.33
3.44

1,308

3.27

1,300

3.25

1,267

3.17

960

2.40

948

2.37

Sumitomo Chemical Company, Limited
Japan Trustee Services Bank, Ltd.
(Trust Account)
JX Holdings, Inc.
JP MORGAN CHASE BANK 385632
Resona Bank, Limited.
National Mutual Insurance Federation ofAgricultural Cooperatives
The Master Trust Bank of Japan, Ltd.
(Trust Account)
Sanyo Chemical Industries, Ltd.
Japan Trustee Services Bank, Ltd.
(Trust Account 9)
Mizuho Bank, Ltd.

Individuals, others,
11.7％

Financial
Institutions
33.5％

Stock Brokers
0.9％

Foreign
Institutions,
etc.
25.9％
Other Corporate
Shareholders
28.0％(Note 1) Other than the above, the Company holds 919 thousand shares as treasury stock.
(Note 2) Treasury stock is excluded from the calculation for “Shareholding Ratio of the Total Shares Outstanding” above.
(Note 3) Figures in “Number of Shares Owned” and “Shareholding Ratio of the Total Shares Outstanding” are truncated.
(Note 4) JX Holdings, Inc. has merged with TonenGeneral Sekiyu K.K. as of April 1, 2017 and changed its trade name to JXTG Holdings, Inc.

Share Price and Turnover (April 2016- March 2017)
Share Price(¥)

8,500
8,000
7,500
7,000
6,500
6,000
5,500
5,000

4

2016

5

6

7

8

9

10

11

12

1

2017

2

3

55

56

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2017

Subsidiaries & AfﬁliatesJapan
NIPPOH CHEMICALS CO., LTD.

Neo Kawai Bldg.,8-15,4-Chome,Nihonbashi-Honchou, Chuo-Ku, Tokyo 103-0023, Japan
TEL +81-3-3270-5341 FAX +81-3-3270-3401
Principle Business: Manufacture and sale of iodine, intermediates for API and agro-chemicals, ﬂame
retardants, and photo/electro chemicals

CHUGOKU KAKO CO., LTD.

1575 Mizue, Kurashiki, Okayama 710-0802 Japan
TEL +81-86-465-3555 FAX +81-86-465-7843
Principle Business: Manufacture and sale of adhesive-processed products and ﬁne sphere particles

Nisshoku Butsuryu Co., Ltd.

6F Kogin Bldg., 4-1-1 Koraibashi, Chuo-ku, Osaka 541-0043 Japan
TEL +81-6-6202-5267 FAX +81-6-6233-2475
Principle Business: Logistics of chemicals

NIPPON NYUKAZAI CO., LTD.

4-1 Nihonbashi Kobuna-cho, Chuo-ku, Tokyo 103-0024 Japan
TEL +81-3-5651-5631 FAX +81-3-5651-5639
Principle Business: Manufacture and sale of surfactant and other chemicals

Tokyo Fine Chemical CO., LTD.

3F Bussan Bldg., 1-4-14 Nishi Shinbashi, Minato-ku, Tokyo 105-0003 Japan
TEL +81-3-3506-7666 FAX +81-3-3506-7671
Principle Business: Manufacture and sale of stabilizer of vinyl chloride resin, antiseptics, antifoulingagents and antifreeze
9-1 Koutani Shinmachi, Ichikawa, Chiba 272-0011 Japan

NISSHOKU TECHNO FINE CHEMICAL CO., LTD. TEL +81-47-328-1185 FAX +81-47-328-1189(formerly NIHON JYORYU KOGYO CO., LTD) Principle Business: Manufacture and sale of polycyclic aromatic hydrocarbons, (meth)acrylic acidderivatives and photo/electro chemicals

NIPPON SHOKUBAI TRADING CO., LTD.

2F TT-1 Bldg., 1-14-8 Nihonbashi Ningyou-cho, Chuo-ku, Tokyo 103-0013 Japan
TEL +81-3-5695-4021 FAX +81-3-5695-4024
Principle Business: Sale of chemical products

NIPPON POLYMER IND. Co., Ltd.

2114 Okihama, Aboshi-ku, Himeji, Hyogo 671-1241 Japan
TEL +81-79-273-4121 FAX +81-79-273-4601
Principle Business: Manufacture and sale of acrylic resins

Japan Composite Co., Ltd.

3-2-13 Nihonbashi-Honcho, Chuo-ku, Tokyo 103-0023 Japan
TEL +81-3-3516-3002 FAX +81-3-3516-3090
Principle Business: Manufacture and sale of unsaturated polyester resins and plastic molded materials

Umicore Shokubai Japan Co. Ltd

1-25-19 Rinku-cho, Tokoname, Aichi 479-0882 Japan
TEL +81-569-38-7670 FAX +81-569-38-7678
Principle Business: Manufacture, R&D and sale of automotive catalysts

NS Green Co., Ltd.

992-1 Aza-Nishioki, Okihama, Aboshi-ku, Himeji, Hyogo 671-1241 Japan
TEL +81-79-273-4744 FAX +81-79-273-4744
Principle Business: Maintenance of green tract of land of plant site

NISSHOKU ENGINEERING SERVICE CO.,LTD.

992-1 Aza-Nishioki, Okihama, Aboshi-ku, Himeji, Hyogo 671-1241 Japan
TEL +81-79-272-0677 FAX +81-79-271-5188
Principle Business: Design, construction, repair and maintenance of production facilities

NIHON METHACRYL MONOMER CO. LTD.

Sumitomo Twin Bldg., 2-27-1 Shinkawa, Chuo-ku, Tokyo 104-0033 Japan
TEL +81-3-5543-5302 FAX +81-3-5543-5907
Principle Business: Manufacture and sale of MAA and MMA

CATOX Co., Ltd.

1-46 Higashi Kaigan-cho,Amagasaki, Hyogo 660-0843 Japan
TEL +81-6-6409-1301 FAX +81-6-6409-1302
Principle Business: Development and sale of plant control systems

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Overseas
Nippon Shokubai America Industries, Inc.

4631 Old Highway 146, Suite A, Pasadena, TX 77507, USA
TEL +1-832-284-4033
Principle Business: Manufacture and sale of superabsorbent polymers, polymers for concrete admixture
and water soluble polymers

SINGAPORE ACRYLIC PTE LTD

80 Robinson Road #18-02 Singapore 068898
TEL +65-6532-0078 FAX +65-6532-0079
Principle Business: Manufacture and sale of crude acrylic acid

PT.NIPPON SHOKUBAI INDONESIA

Kawasan Industri Panca Puri Jl. Raya Anyer Km. 122 Ciwandan, Cilegon 42447 Banten, Indonesia
TEL +62-254-600-660 FAX +62-254-600-657
Principle Business: Manufacture and sale of superabsorbent polymers, acrylic acid and acrylic esters

NIPPON SHOKUBAI (ASIA) PTE.LTD.

80 Robinson Road #18-02 Singapore 068898
TEL +65-6532-0078 FAX +65-6532-0079
Principle Business: Manufacture glacial acrylic acid, Sale of chemical products

NIPPON SHOKUBAI EUROPE N.V.

Haven 1053, Nieuwe Weg1, B-2070 Zwijndrecht, Belgium
TEL +32-3-250-3705 FAX +32-3-250-3712
Principle Business: Manufacture and sale of superabsorbent polymers

NISSHOKU CHEMICAL INDUSTRY(ZHANGJIAGANG) CO., LTD.

No.19 Changjiang Road (E),Yangtze River International Chemical Industrial Park, Zhangjiagang,
Jiangsu, China, 215635
TEL +86-512-5893-7910 FAX +86-512-5893-7912
Principle Business: Manufacture and sale of superabsorbent polymers, polymers for concrete admixture

SINO-JAPAN CHEMICAL CO.,LTD

14Fl, 99, Sec. 2, Jen Ai Rd., Taipei, Taiwan
TEL +886-2-2396-6223 FAX +886-2-2396-9076
Principle Business: Manufacture and sale of surfactant and other chemicals

LG MMA Corporation

23F, LG Seoulstation Building, 98, Huam-ro, Joong-gu, Seoul 04637, Korea
TEL +82-2-6930-3800 FAX +82-2-6930-3801
Principle Business: Manufacture and sale of MAA and PMMA

American Acryl NA,LLC
American Acryl L.P.

4631 Old Highway 146, Suite B, Pasadena, TX 77507, USA
Principle Business: Manufacture and sale of acrylic acid

Umicore Shokubai S.A.

L-4940, Bascharage, 5, rue Bommel, Luxembourg
Principle Business: Automotive catalyst

NISSHOKU TRADING (SHANGHAI) CO.,LTD

R/No.3604,The Center,989 Changle Road Shanghai, China, 200031
TEL +86-21-5407-5959 FAX +86-21-5407-5673
Principle Business: Sale of chemical products

SIRRUS, Inc.

422 Wards Corner Road, Loveland, OH 45140, USA
TEL +1-513-448-0308 FAX +1-513-448-0310
Principle Business: Manufacture and sale of Malonates

NIPPON SHOKUBAI KOREA CO., LTD.

4F 26, Hwangsaeul-ro 200beon-gil, Bundang-gu, Seongnam-si, Gyeonggi-Do, Korea, 13595
TEL +82-31-718-9111 FAX +82-31-718-9693
Principle Business: Marketing service of E&I materials and chemical products

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NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2017

Directory
Management
Member of the Board, Chairman
Masanori Ikeda ＊Member of the Board, President
Yujiro Goto ＊Member of the Board,
Senior Managing Executive Ofﬁcer
Haruhisa Yamamoto ＊Masao Yamamoto
Member of the Board,
Managing Executive Ofﬁcer
Yojiro Takahashi

Member of the Board,
Executive Ofﬁcer
Yukihiro Matsumoto
Member of the Board
Koichi Miura
Takashi Sakai
Kozo Arao
Statutory Corporate Auditor
Taizo Maruo
Yoshihiro Arita
Yoichiro Komatsu
Katsuyuki Ota

Managing Executive Ofﬁcer
Koichiro Yamada
Kin-ya Nagasuna
Masaya Yoshida
Executive Ofﬁcer
Nobuyuki Harada
Kazukiyo Arakawa
Teruo Kamei
Ren Hasebe
Gun Saito* Representative

Company Outline
Business establishments
・Osaka Ofﬁce
Kogin Bldg., 4-1-1 Koraibashi, Chuoku, Osaka 541-0043 Japan
TEL +81-6-6223-9111
FAX +81-6-6201-3716
・Tokyo Ofﬁce
Hibiya Dai Bldg., 1-2-2 Uchisaiwaicho, Chiyoda-ku, Tokyo 100-0011
Japan
TEL +81-3-3506-7475
FAX +81-3-3506-7598
・Kawasaki Plant and Kawasaki
Research Center[Chidori Plant]
14-1 Chidori-cho, Kawasaki-ku,
Kawasaki, Kanagawa 210-0865
Japan
TEL +81-44-288-7366[Ukishima Plant]
10-12 Ukishima-cho, Kawasakiku, Kawasaki, Kanagawa 210-0862
Japan
TEL +81-44-288-5715

Research Centers
・Himeji Plant and Himeji ResearchCenter992-1 Aza-Nishioki, Okihama,
Aboshi-ku, Himeji, Hyogo 671-1282
Japan
TEL +81-79-273-1131 (Plant)+81-79-273-1145(Research Center)
・Suita Research Center
5-8 Nishi Otabi-cho, Suita, Osaka
564-0034 Japan
TEL +81-6-6317-2202

・Research Center (Suita, Himeji)
・Analysis Technology Center(Suita, Himeji)
・Ethylene Oxide Business Div.
Research Dept. (Suita)
・Acrylic Business Div. Research
Dept. (Himeji)
・Superabsorbents Research Dept.
(Himeji)・Performance Chemicals BusinessDiv. Research Dept. (Suita, Himeji)
・Catalysts & Green Energy
Materials Business Div.
Research Dept. (Suita, Himeji)
・Process Technology Center(Suita, Himeji)

Osaka Ofﬁce
Kogin Bldg.
4-1-1 Koraibashi, Chuo-ku,
Osaka 541-0043, Japan
Telephone +81-6-6223-9111
Facsimile +81-6-6201-3716

Tokyo Ofﬁce
Hibiya Dai Bldg.
1-2-2 Uchisaiwai-cho, Chiyoda-ku,
Tokyo 100-0011, Japan
Telephone +81-3-3506-7475
Facsimile +81-3-3506-7598
Securities Code 4114
URL http://www.shokubai.co.jp