Annual Report 2014
“Providing affluence and comfort to people
and society, with our unique technology”

2

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2014

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
08 Description of Business
10 Governance System

Based on Responsible Care
13 CSR
Concept
14 Ten-Years Summary
Discussion and
16 Management
Analysis of Operation
20 Financial Statements
56 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 income

302,136¥¥

million13,752
million12.1% Up

37.0% Up
Total assets

398,396¥
Net assets¥

242,193

million13.1% UpmillionROA

4.4%

0.5points Up

10.0% Up

Sales increased across all
segments

The recovery and resumption ofoperations at all Himeji plantsthat had ceased production asa result of the accident, andreinforced acrylic acid andsuperabsorbent polymers
production facilities inIndonesia leading to the startof commercial production from
October 2013.

The ongoing depreciation of
the yen brought greater salesof export sales and sales ofoverseas subsidiaries as a resultof foreign currency translation.

The effect of higher volumes andimproved spreads>
increased production expensesof new facilities and therecommencement of operations
at Himeji Plants.

The lower technology licensing
income and a decrease in equity
earnings>
improved foreign exchange
income“Gain on insurance adjustment ”
and “Insurance income”<
Expenses such as “Loss on
explosion and ﬁre”, “Loss on
liquidation of business” and“Income taxes”

01

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NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2014

Messages from President

To achieve the“Reborn Nippon Shokubai”

Masanori Ikeda
President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

Nippon Shokubai starts its new long-term business plan for the ﬁscal years 2014 to 2020,
entitled “Reborn Nippon Shokubai 2020,” along with the medium-term business plan, which
will specify an action plan for the initial three years of the period (ﬁscal 2014 to 2016).

We reconﬁrm our intention to follow our corporate credo: “Safety takes priority overproduction,” and we are making every effort to implement the preventive/corrective measureslearned from the accident that occurred at the Himeji Plant in 2012. We believe that only
through these actions, will we be able to regain the conﬁdence of stake holders as a chemicalcompany.
We will deliver the products and services that provide afﬂuence and comfort to people andsociety, and we will strive as a team to achieve the “Reborn Nippon Shokubai”̶ a company*)that everybody can be proud of.
*) A company that promotes work safety and peace of mind
A company that rewards people who make their best efforts and achieve results
A company that people can be proud to work for

We repositioned “” which was formerly our corporate mission,as the Group mission. This was done to ensure a greater focus on a coordinated group wide
effort to execute the corporate social mission expressed by this Group Mission statement.
We reconﬁrmed “Safety takes priority over production” as our corporate credo, and wepledge to maintain an awareness of the lessons learned from the Himeji accident. With thisemphasis on safety, we are now determined to ensure that a tragic accident such as the
explosion and ﬁre at the Himeji Plant never occurs again.
We are united in striving for measures to prevent the recurrence of such an accident withthe aim of truly achieving “to regain the conﬁdence of stake holders as chemical company”.
In April 2013, we established our Safety Reinforcement Team led by the director of the
Responsible Care Division with a cross-company membership drawn from specialist
departments, including the Environmental Safety Department and the Production Engineering
Department. The Safety Reinforcement Team is working to (1) develop measures to preventthe recurrence of such an accident (certain implementation of risk assessment/collection,

sharing and utilization of information on safety technology and enhancement of education andtraining); (2) strengthen the culture of safety ﬁrst; and (3) verify the implementation statusof safety measures (in-house veriﬁcation and third-party veriﬁcation by outside experts) as
it promotes measures to prevent a recurrence of the accident and veriﬁes implementation ofsuch measures.

Corporate Data

03

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NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2014

Special Feature

New Long-term Business Plan
“Reborn Nippon Shokubai 2020” andCorresponding Medium-term Business PlanTOKYO/OSAKA, April 17, 2014̶Nippon Shokubai today announced its new long-term business plan for the ﬁscal
years 2014 to 2020, entitled “Reborn Nippon Shokubai 2020,” along with the medium-term business plan, which
will specify an action plan for the initial three years of the period (ﬁscal 2014 to 2016).

1

Mission, Management
Commitment and Corporate Credo

Mission/Management Commitment

We repositioned “,” which wasformerly our corporate mission, as the Group mission. Thiswas done to ensure a greater focus on a coordinated groupwide effort to execute the corporate social mission expressedby this Group Mission statement.
We reconﬁrmed “Safety takes priority over production”
as our corporate credo, and we pledge to maintain anawareness of the lessons learned from the Himeji accident.
With this emphasis on safety, we are now determined toensure that a tragic accident such as the explosion and ﬁreat the Himeji Plant never occurs again.

Providing afﬂuence and comfort to people and society, with ourunique technology

Nippon Shokubai Group Mission

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 withthe environment.
We pursue technologies that will create the future.
We act on the global stage.

Corporate Credo

Safety takes priority overproduction.

Consolidated
Financial
Highlights

Messages fromPresident

Description ofSpecial Feature Business

CSR Based on
Responsible
Care Concept

Governance
SystemManagement
Discussion
and Analysis ofOperation

Ten-Years
Summary

Financial
Statements

Corporate Data

Business Activities

2“Reborn Nippon Shokubai 2020,”
the new long-term business plan

We reassessed the long-term 2025 Vision outlined in theprevious business plan and we have set the target 2020 as amilestone for the 2025 Vision.
“Reborn Nippon Shokubai 2020” is designed to ensure safe,
reliable production activities. The plan also highlights proﬁtability
over sales, setting goals for strengthening existing and corebusinesses, establishing new businesses as soon as possible,
and launching new products to the market quickly.

a) Positioning acrylic acid (AA) and superabsorbent polymers (SAP)
as its main businesses, ethylene oxide (EO) and other existing
businesses will be even stronger than today. Performance chemicals,
new energy materials, and/or health and medical materials will beestablished as the next drivers of business expansion. We will also be
germinating the seeds of new businesses continuously.
b) Accelerate business development continuously throughout the global
marketc) Employ our competencies in R&D, production technologies andmarketing and maximize the synergy from such activities

Targets for 2020
The targets for 2020 have been set as a milestone for the2025 Vision.
Management Indexes and Numerical Targets(Unit: Billion yen)

Vision for 2025

Sales

Ordinary
income

ROA1

Sales
for new
products2

FY2020 long-termtarget ﬁgures

500

50

9.5%

47

FY2016 mediumterm target ﬁgures

393

34

8.5%

29

An innovative chemical company that provides newvalue for peopleʼs lives
We;・Take on the challenge of creating new value by developing
new products and business through our advanced
technologies and our creativity
・Deliver the new values globally through our uniqueproducts and technologies
・Manufacture products that embody new value and feature
the highest safety and productivity
・Create new value that contributes to the global environment
・Create new value by promoting dynamism and diversity inthe workplace throughout all Group companies

1 Return of assets (ROA), ratio of ordinary income to total assets
2 Total sales of products launched within the last ﬁve years, excluding
SAP
Assumptions: Domestic naphtha price 65,000 yen/kl, exchange rate 100
yen/US$, 130 yen/EUR

Business Portfolio
Position AA and SAP as main businesses.
strengthen EO and other existing businesses

FY2020FY2013New energy
materials*New products
47 billion yen
New performancechemicals
Health/medical
materials
30 billion yen

Basic chemical
43%

302

*New products
14 billion yen

Environment/
catalysts
billion yen
8%Functional chemicals
49%

Establish performance chemicals, new energy
materials, and/or health and medical materials
as next drivers of business expansion

AA&SAP

Basic chemicals
34%

Environment/
catalysts
6%500

billion yen
Functional chemicals
60%

AA&SAP*New products
Total sales of products launched within the last five years,
excluding SAP

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NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2014

Strategies by Business area
In order to meet targets for 2020, we have adopted thefollowing basic strategies for each business area.

(1) Acrylic businessWe will work to maintain its top share of the
global market and world-class technologies in the
superabsorbent polymers business. We also aim to be aleading global player in the acrylic monomer business.
We will focus on maintaining and strengthening ourcompetitiveness̶a strength that will make sustainablegrowth and global business development possible.

(5) New businesses
We will add the health and medical materials sector as a
new business area that will provide growth opportunities.
We will establish a new business footprint by seeking out
business partnerships and/or mergers and acquisitions.
In working to create our next new businesses, we willcontinuously survey changes in the business environmentand customer needs in order to pursue potential
business opportunities where we can utilize and apply
our competencies.

(2) Performance chemicals businessWe aim to position ourselves as a top global supplier toexplore new markets and access growth markets throughour original products and technologies. We will focus on
expanding our line of unique chemicals, using materials
created in house, to form the next mainstay of corporate
proﬁts.

For ethylene oxide and its derivatives, we will strengthen
the foundation of this core business by changing the
product portfolio and entering growth markets, thereby
maintaining a steady cash ﬂow.

(4) New energy materials/catalyst businessWe will position new energy-related materials as one of
our next core businesses by accelerating the development
and marketing of these materials. We aim to develop amaterial that will become the de facto standard in the
new energy markets.

In order to further strengthen our core products and quickly
develop new businesses, we will actively pursue the following
investment strategies.
Long-Term Business Plan

CapitalStrategic
investment investment(3) Ethylene oxide business

Capital and Strategic Investment

Medium-Term Business Plan
FY2014-2016

FY2017-2020

60 billion yen

140 billion yen

50 billion yen

In the initial three years of our long-term business plan, we
will concentrate on further boosting the competitivenessof existing products. During this period, we will focus on
operating all plants at a high production rate, including the
new facilities that were planned and completed under theprevious business plan. At the same time, we will decide on
our next expansion plans.

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

Corporate-level challenges to be addressed forfurther growth(1) Enhance the conﬁdence of stakeholders
We will ensure that all of the safety measures areproperly in place and operated effectively, and we willreinforce our operational capacity, making sure thatappropriate resources are applied, promoting a safety
mindset among employees, and securing a sustainable,
environment-friendly supply chain. Furthermore,
we recognize the importance of maintaining goodcommunications with the stakeholders.

(2) Develop an active corporate team and organization
We believe that no sustainable growth can be madewithout having corporate management promote
peopleʼs talent. We launched the Corporate Culture
Renovation Committee in April, which will be responsiblefor implementing necessary actions to promote andaccelerate the education of people and the renovationof corporate culture. Concurrently, we will reinforce thefunctions and responsibilities of each business unit, andcross-functional projects will be delegated at various
work levels.

(3) Strengthen Group management
We recognize that it is even more important to strengthen
the business foundations of Group companies that areoperating under volatile business conditions, including
increasing competition in worldwide markets. We
will utilize the Groupʼs core competencies in order tomaximize the synergy of Group companies and boost
corporate value.

(4) Accelerate R&D and new business development
We recognize that there can be no further growth without
the development of new business and new products. Bothlong-term R&D, based on future needs, and shortandmedium-term development focusing on commercial
potential and marketability are necessary. We will always
seek open innovation opportunities to cooperate withpartners to develop and quickly launch new products.

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NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2014

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
increased signiﬁcantly, despite a slightdecline in sales volume, due to theongoing depreciation of the yen andsales prices that were revised upward inline with a rise in raw materials costs.
Sales of ethylene oxide and ethylene
glycol increased substantially. In addition
to higher sales volumes, this was theresult of the ongoing depreciation of the
yen and sales prices that were revised

higher due to increased raw materials
costs.
Sales of higher alcohol increased.
This was on account of revisions to sales
prices to reﬂect higher raw materials
costs, despite sales volumes that were
essentially ﬂat.
Sales of ethanolamine fell due
to lower sales volumes, despite sales
prices that were revised upwards to keep
track with higher raw materials costs.

•Maleic anhydride& Derivatives•Resins for paints& adhesives•Acrylic resin for
optical materials•Zirconia sheets& cells•Automotive
catalysts•De-Nox & dioxins
decomposition
catalysts

Consolidated
Financial
Highlights

Messages fromPresident

Special Feature

Description ofBusiness

As a result of the above, net sales inthe basic chemicals segment increased
14.0% year-on-year to 129,842 million
yen.

Governance
SystemCSR Based on
Responsible
Care Concept

Ten-Years
Summary

Operating income rose 55.0% yearon-year to 3,250 million yen. This was on
account of an increase in sales volumes,
as well as the impact of the depreciating

Management
Discussion
and Analysis ofOperation

Financial
Statements

Corporate Datayen and improved spreads, and it comes
despite increased processing costs due
to facility enhancements in Indonesia
and other factors.

Functional Chemicals
Sales of superabsorbent polymers
increased as the above-mentioned new
facilities in Indonesia and resumption ofsuspended operations at a plant in the
United States were able to recover to acertain extent, in terms of volume, fromthe impact of the suspended productionthat resulted from the accident at the
Himeji Plant. Other contributing factors
include the impact of the depreciating
yen and sales prices that were revised
upward in line with increased raw
materials costs.
Sales of polymer for concrete
admixture and special esters rose, despite
reduced sales volumes on the impact of
production suspension due to the Himeji
Plant accident, on account of the effect ofthe depreciating yen and sales prices thatwere revised upward to reﬂect higher raw
materials costs.
Sales of maleic anhydride,electronics information materials aswell as processed adhesive products andresins for paints increased on the backof growing sales volumes.
Sales of ethyleneimine derivatives,
resin modiﬁers and iodine compoundsrose on revised sales prices, even thoughsales volumes decreased.
Sales of water-soluble polymers for
raw materials of detergents fell due to asigniﬁcant decline in sales volumes on
account of the suspension of production
after the accident at the Himeji Plant,
though sales prices were tried to revise
upward.
Sales of processed adhesive
products declined because of lower
sales volumes.
As a result of the above, net sales in
the functional chemicals segment rose
7.2% year-on-year to 146,857 million
yen.
Operating income increased 21.5%
year-on-year to 8,239 million yen.

Environment & Catalysts
Sales of process catalysts, wet oxidation
catalysts, De-NOx catalysts, dioxins
decomposition catalysts, fuel cellmaterials and polymer for lithium-ion
batteries increased on higher sales
volumes.
Sales of automotive catalysts rosedue to increased sales volumes and saleprices that were set higher in line withrising precious metals costs.
As a result, sales in the environmentand catalysts segment rose 36.4% yearon-year to 25,436 million yen.
Operating income increased 42.8%
to 2,044 million yen year-on-year owing
to growth in sales volumes.

Despite the increase in processing costs
resulting from investment in the newfacilities in Indonesia and the resumptionof operations in the United States,
mentioned above, there was the effectof increased production that resulted
from these activities, as well as thedepreciating yen and improved spreads.

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NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2014

Governance System

We are working to improve our corporate culture and strengthen our competitiveness in order to respond to global trends.
Our approach to corporate governance therefore establishes our foundation. Using the system illustrated in the following
diagram, we are taking steps to revitalize our board of directors, strengthen our audit system, improve the efﬁciency of ourmanagement structure, and improve and strengthen our compliance system.

Our Corporate Governance System
General Meeting of Shareholders

Board ofAuditors
Reports

Board of Directors
AuditsPresident

Accounting
Auditors

Corporate Managing
Committee
AuditsRisk Management
Committee

Collaborates
Collaborates

ProvidessupportCSR Management Committee

Auditor Office

RC Promotion Committee
Compliance Committee

Internal Control Committee
Executive Officers

Internal
Audit
OfficeInternal
audit

Corporate
Planning

GeneralAdministration &Personnel

Purchasing &Logistics

Finance &Accounting

Information
Technology
Management
OfficeResponsible
Care

Investor &Public Relations

Research
Planning &Development

Sales

Production

Legal
Advisors
Consultation

Consolidated
Financial
Highlights

Messages fromPresident

Special Feature

Description ofBusiness

Governance
SystemCorporate Managing Committee
As an advisory body to the president, this committee
deliberates on basic management policies and related
matters. It also consults on the execution of important
divisional matters.

Risk Management Committee
Chaired by the president, this committee implements
periodic measures in response to various wide-ranging risks
to which the company is exposed.

CSR Based on
Responsible
Care Concept

Ten-Years
Summary

Management
Discussion
and Analysis ofOperation

Financial
Statements

Corporate Data

RC Promotion Committee
Chaired by the president, this committee promotes thecompanyʼs Responsible Care activities. It formulates the RC
Promotion Basic Plan and works to further improve safety,
quality, and environmental issues.

Compliance Committee
Chaired by the president, this committee improves andstrengthens the companyʼs overall corporate ethics andsystems for compliance with laws and regulations.

CSR Management Committee

Internal Control Committee

Chaired by the president, this committee determines thecompanyʼs CSR direction and promotes CSR initiatives that
contribute to the interests of stakeholders while maintaining
coordination with the other committees.

This committee, in full operation since April 2008 under thechairmanship of the president, has established a system toensure the reliability of ﬁnancial reporting as enforced by
the Financial Instruments and Exchange Act. It also seeks toprocess company operations more efﬁciently and effectively.

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NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2014

Outside Members of the Board and Outside Corporate Auditors

Hidetoshi Nakatani(Outside Member of the Board)
Mr. Hidetoshi Nakatani is Councilor of Osaka Gas Co., Ltd. He attended all 13 meetings of the Board that were held during theﬁscal year 2013. Due to his experience as an executive of a company that is a manufacturer and has a strong commitment topublic service, he provides useful advice concerning the Companyʼs management and supervises the Companyʼs managementfrom an independent perspective.

Koichi Miura(Outside Member of the Board)
Mr. Koichi Miura is Emeritus Professor of Kyoto University, Specially Appointed Professor of Institute of Advanced Energy, Kyoto
University. He attended all 9 meetings of the Board that were held during the ﬁscal year 2013 following his election as a Memberof the Board. 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.

Kozo Arao(Outside Corporate Auditor)
Mr. Kozo Arao is Attorney-at-law. He attended all 13 meetings of the Board that were held during the ﬁscal year 2013. At thesemeetings, he provides his views from the perspective of an attorney as required.
Mr. Arao also attended all 13 meetings of the Corporate Auditors that were held during the ﬁscal year, exchanged opinionswith respect to the results of audits and discussed important issues regarding such audits. Furthermore, he periodicallyexchanged opinions with the senior management.

Akira Omachi(Outside Corporate Auditor)
Mr. Akira Omachi is Director and Senior Vice President of JX Holdings, Inc. He attended 12 of the 13 meetings of the Board thatwere held during the ﬁscal year 2013. At these meetings, he provides his views from the perspective of a corporate executive as
required.
Mr. Omachi also attended all 13 meetings of the Corporate Auditors that were held during the ﬁscal year, exchanged
opinions with respect to the results of audits and discussed important issues regarding such audits. Furthermore, he periodicallyexchanged opinions with the senior management.

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

CSR Based on Responsible Care Concept

CSR Concept
In accordance with the Nippon Shokubai Group Mission,and the Corporate Credo, "Safety takes
priority over production", instituted in 1973, Nippon Shokubai established a Management Commitment and Code of Conduct tocomprehensively view our corporate conduct from economic, social and environmental perspectives, setting out our corporate
ethics, Responsible Care (RC), human rights and labor, information disclosure, social contribution and corporate governanceas our management's top priority issues and implementing our activities to enhance our corporate value via continuing dialogue
with various stakeholders, including our customers, business partners, shareholders/investors, public administration, employees
and local communities.
Based on this concept of CSR, we will strive to contribute to the development of a sustainable society by implementing ourlong-term management plan, "Reborn Nippon Shokubai 2020," as part of our efforts to achieve our vision for 2025.

CSR Implementation Structure
CSR Management Committee
RC Promotion Committee
Compliance Committee
Disclosure Committee
CSR Promotion Ofﬁce

Determines overall policy for CSR initiatives.
Determines overall policy for RC activities and implements the PDCA cycle.
Determines comprehensive policies for corporate ethics and implements the PDCA cycle.
Implements the PDCA cycle related to information disclosure in an effort to enhancecommunication with society.
Establishes a CSR implementation structure and implements the PDCA cycle for social
contribution initiatives.

Basic Policy on Responsible CareIn conformity with our Corporate mission, Management commitment and the Nippon Shokubai Code of Conduct, we rank it as animportant management measure to provide products and technologies that contribute to society and environmental protection.
In addition, while paying due respect to the principle of Sustainable Development, we are determined to conduct all activities inaccordance with the following policy related to environmental protection, safety and product quality that will bring our business
operations into harmony with the global environment.
Aim at environmental protection and reduction of negative environmental impact throughout the entire life cycle of a
1 product,from development to disposal.
the safety of our employees and our communities by targeting zero accidents and zero disasters with a commitment
2 Ensure
to the principle “Safety takes priority over production.”Conﬁrm the safety of chemical materials, intermediates and products, and consider the health of our customers,
3 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.

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NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2014

Ten-Years Summary

FY2004

FY2005

FY2006¥197,222
22,212
15,705¥232,441
23,22816,257¥266,513
19,42913,988249,349
144,660

291,564
164,631

323,675
179,368

22,161-16,934-861
24,16017,468-20,663-2,562
19,856

16,087-23,109
4,037
16,991

Operating 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
Net income (loss) .........................................................................................................
Net assets .....................................................................................................................
Cash dividends..............................................................................................................
Shareholders' equity ratio (%) .....................................................................................
ROE (%) ........................................................................................................................
ROA (%) ........................................................................................................................
Liquidity ratio (%) .........................................................................................................
PER (%) ........................................................................................................................
Dividend payout ratio (%) .............................................................................................

¥

81.37
757.72
13.0

¥

85.89
875.00
16.0

¥

74.92
948.34
16.0

58.02
11.4
10.1
176
11.92
16.0

56.46
10.5
9.7
156
16.29
18.6

54.08
8.2
7.4
146
16.98
21.4

107.5232,200
970
1,017
690

113.3542,400
1,399
1,426
851

117.0050,000
1,272
1,503
1,152

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

Consolidated
Financial
Highlights

Messages fromPresident

FY2007

Special Feature

Description ofBusiness

FY2008Governance
System

FY2009CSR Based on
Responsible
Care Concept

FY2010

Ten-Years
Summary

FY2011

Management
Discussion
and Analysis ofOperation

FY2012Financial
Statements

FY2013(Millions of yen)

Corporate Data

FY2013(Millions of U.S. dollars)¥302,669
18,37911,875¥289,102622-5,307¥244,317
13,881
10,832¥288,345
29,813
21,119¥320,704
31,10021,257¥269,520
10,0348,401¥302,136
13,752
10,503$2,936134102352,783
175,634

302,948
151,662

310,946
163,781329,332
194,266

356,407
209,070

352,373
220,248

398,396
242,193

3,871
2,353

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

17,613-16,675
8,099
29,45044,346-23,850-21,772
28,23431,706-16,696-3,05039,17443,857-21,747-9,67150,812

27,322-31,87881
47,801

16,992-25,141-2,51939,619

165
-244
-24
385

64.91
947.3416.0¥ -29.61
831.1115.5

110.30938.6722.0¥ 104.71
1,006.48
22.0¥ 41.38
1,059.85
16.0¥ 51.74
1,164.10
16.0

48.61
6.9
6.1
150
10.18
24.6

48.83
-3.3
0.2
159
−
−

51.43
7.0
4.9
155
13.89
23.0

57.86
12.1
9.7
197
9.45
19.9

57.33
10.8
9.7
174
9.16
21.0

61.05
4.0
3.9
189
19.94
38.7

59.31
4.7
4.4
168
23.56
30.9

−
−
−
−
−
−

114.3861,400
661
1,316
626

100.5858,900
622
866
442

92.88
41,200
845
920
600

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
1219
1286
791

−
654.0
11.8
12.5
7.7

¥

¥

60.85
898.33
14.0

¥

$

0.5
11.3
0.2

Notes: Conversions into USD are just for indication only. The exchange rate is the rate at March 31, 2014. (¥102.92 / $1.00) Figures are rounded off.

15

16

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2014

Management Discussion and Analysis of Operation

Fiscal 2013 Performance
In the current ﬁscal year , Japanʼs economy entered intoa gradual recovery, despite the impact of decelerating
growth in Chinaʼs economic expansion and concerns abouta downward swing in economies outside of Japan due tothe impact of ﬁnancial problems associated with indebted
countries in Europe and other factors. Further monetaryeasing and other economic and ﬁnancial policies were thebackdrop for a depreciating yen that led to signs of gradualincreases in production and improvements to corporate
earnings, and a return of growth in consumer consumption
owing to higher stock prices. In addition, economic recovery
trends in the United States gained momentum.
In the chemicals industry, the outlook remained unclear
due to elevated raw materials costs on the back of highcrude oil prices, a result of the tense situation in the Middle
East, and other factors.
On September 29, 2012, an explosion and ﬁre occurredat NIPPON SHOKUBAIʼs Himeji Plant. Accordingly, theCompany had received orders from the relevant authority tosuspend operation of all the facilities of hazardous materials
in the Himeji Plant and the facilities of an afﬁliated company

which was next to the Plant. Since November 1, 2012, theCompany had received some lifts of restrictions for related
facilities in the Plant from the relevant authority.
Accordingly, production of following items was started
at facilities in the Plant: automotive catalysts and othercatalysts, and resins for paints in November 2012; electronic
information materials and resin modiﬁers in December 2012;
maleic anhydride and polymer for concrete admixture in
January 2013. Entering into the ﬁscal year 2013, the Company
began a steady return to production. In June 2013, it once
again began to produce acrylic acid and superabsorbent
polymers, and in July 2013, it resumed production of special
esters and water-soluble polymers for raw materials of
detergents and then acrylates in August 2013.
On December 18, 2013, the Company received
notiﬁcation that all orders to suspend operations had been
lifted. Subsequently, in February 2014, the acrylic acidplant, which had maintained the suspension until the ﬁnal
notiﬁcation, went back online, marking the recovery andresumption of operations at all plants that had ceased
production as a result of the accident.

Segment Sales(¥billion)

8.4%
25.4

Total
302.1
48.6%

129.8

43.0%

146.9

■ Basic Chemicals■ Functional Chemicals■ Environment & Catalysts

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Corporate Data

Financial position
Under these conditions, the Groupʼs consolidated net salesrose 12.1% year-on-year, to 302,136 million yen (+32,616
million yen) in the current ﬁscal year. The above-mentioned
accident did have an impact, but other factors contributing
to this result included reinforced acrylic acid production
facilities in Indonesia, which also added new facilities to
produce superabsorbent polymers, leading to the start ofcommercial production from October 2013, as well as areturn to production, from December 2012 to November
2013, of superabsorbent polymers facilities in the Unites
States that had been suspended operation. These and otherfactors helped overseas-based Group companies contributeto tapering falling sales volumes. In addition, there was theongoing depreciation of the yen and revisions to sales prices
in line with the increased costs of raw materials.
With regard to proﬁts, operating income increased 37.0%
year-on-year to 13,752 million yen (+3,718 million yen).
Although the new facilities and the recommencement ofoperations mentioned above did lead to an increase in ﬁxed
costs, the effect of higher volumes, together with improved
spreads, contributed to this result.

Ordinary income rose 20.4% year-on-year to 16,647
million yen (+2,823 million yen). This result was due toimproved foreign exchange income as a result of thedepreciation of the yen, and it comes despite a non-operating
income decline of 894 million yen due to lower technology
licensing income and a decrease in equity earnings of
afﬁliates.
Extraordinary income and loss improved year-on-yearby 384 million yen. This was the result of 11,512 million yen
booked as insurance income related to the accident, while
ﬁxed costs during the plantʼs suspension were reclassiﬁed
as “suspension ﬁxed costs” and booked as an extraordinary
loss of 12,177 million yen.
Net income rose 25.0% year-on-year to 10,503 million
yen (+2,102 million yen).

Shareholdersʼ Equity and Total Assets(¥billion)

398.4

400
356.4

352.4

329.3

200

190.6

204.3

215.1

236.3

0
FY2010FY2011FY2012FY2013■ Shareholders’ Equity■ Total Assets

17

18

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2014

Cash Flows
Cash and cash equivalents at the end of the current ﬁscal
year decreased by 8,182 million yen over the end of theprevious ﬁscal year to 39,619 million yen, as cash ﬂow used
in investing activities (capital investment, etc.) and thepayment of dividends and other ﬁnancing activities exceededcash ﬂow provided by operating activities and the effect of
exchange rate change on cash and cash equivalents.
Net cash provided by operating activities totaled
16,992 million yen (27,322 million yen provided in theprevious ﬁscal year). This was due to a decline of 10,330
million yen from the previous ﬁscal year as a result of
increased outlays associated with trade notes and accounts
receivable, inventories, notes and accounts payable-trade,with accompanying the resumption of facility operations
at the Himeji Plant and improved earnings before taxes,
depreciation and amortization.

Net cash used in investing activities totaled 25,141
million yen (31,878 million yen used in the previous ﬁscalyear). This was due to a decline of 6,737 million yen inoutlays for the purchase of property, plant and equipment.
Net cash used in ﬁnancing activities totaled 2,519
million yen (81 million yen provided in the previous ﬁscalyear). Although there were the absenceno outlays for theredemption of bonds, lower proceeds from long-term loans
payable resulted in a decline of 2,600 million yen.

Cash Flows■ Operating activities■ Investing activities■ Free cash flows(¥billion)

50

43.9

40
30

31.7

27.3
22.1

20

17.0

15.0

10
0
-4.6

-10
-20

-16.7
-21.7

-25.1

-30
-40

-8.1

-31.9
FY2010FY2011FY2012FY2013

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Corporate Data

Basic Policy on the Distribution of Proﬁts, and Dividends
Nippon Shokubai has positioned the return of proﬁts toshareholders as an important management theme, 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
in consolidated earnings, while at the same time taking
an overall view to expand the business and strengthen thecorporate structure. In addition to dividend distributions, theCompany intends to continue stock buybacks to raise thevalue 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, R&D andother areas, with the need to accomplish these investments,

recognizing the importance of keeping on hand a sufﬁcientlevel of retained earnings.
The Company pays dividends twice a year, once at theend of the interim period and once at the end of the ﬁscal
year.
Based on the above basic policy, the Company plansto pay a year-end dividend of 8 yen per share for FY 2013,
taking into consideration the business environment, earnings
results and future prospects for business growth. As aresult, annual dividends will total 16 yen per share for a
consolidated payout ratio of 30.9%.
For FY 2014, the Company plans annual dividends of 22
yen per share, consisting of interim and year-end dividendsof 11 yen each, based on the above basic policy and taking
into consideration progress in achieving its forecasted proﬁts.

Fiscal 2014 Outlook
Projected earnings in the next ﬁscal year are based on
exchange rates of 100 yen to the U.S. dollar and 130 yen to
the euro, and naphtha prices of 65,000 yen/kl. With all plants
back on line and the full contributions of increased facilities
at subsidiaries based outside of Japan, sales volumes are
anticipated to increase, primarily in the functional chemicals
segment. We therefore forecast consolidated net sales toincrease 19.2% to 360,000 million yen (+57,864 million yen),with 170,000 million yen in the ﬁrst half.

With regard to proﬁts, the Company projects that
anticipated higher sales volumes will lead to an increase inoperating income by 89.1%, to 26,000 million yen (+12,248
million yen), with 9,500 million yen in the ﬁrst half, along withgrowth in ordinary income of 71.2%, to 28,500 million yen(+11,853 million yen), with 10,500 million yen in the ﬁrst half,
and an increase in net income of 90.4%, to 20,000 million yen(+9,497 million yen), with 7,000 million yen in the ﬁrst half.

19

20

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2014

Financial Statements
Consolidated Balance Sheet

Nippon Shokubai Co., Ltd. and Consolidated Subsidiaries

March 31,
2013

2014
AssetsCurrent assets:
Cash and cash equivalents (Note 4 ) …………………………………

Time deposits (Notes 4 and 9 ) ………………………………………

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

(Millions of yen)¥

39,619
3,636

2014

¥

47,801
2,046$

384,949
35,328Notes and accounts receivable (Notes 3 and 4 ):Unconsolidated subsidiaries and afﬁliates …………………………
Trade ………………………………………………………………

Allowance for doubtful receivables ………………………………

Inventories (Note 6 ) …………………………………………………
Deferred income taxes (Note 11 ) ……………………………………

Other current assets (Note 7 ) ………………………………………

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

Property, plant and equipment, at cost (Notes 8, 9 and 22 ):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 4 and 5 )……………………………
Investments in unconsolidated subsidiaries and afﬁliates …………
Deferred income taxes (Note 11 ) ……………………………………
Prepaid pension cost (Note 10 ) ………………………………………

Asset for retirement beneﬁts (Note 10 ) ……………………………

Other assets (Notes 9 ) ………………………………………………

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

Total assets ………………………………………………………………

¥

6,544
63,420(192)
58,624
4,377
10,315
186,343

6,382
46,197(49)
42,2092,918
11,548159,052

63,583
616,207(1,866)569,607
42,528100,225
1,810,561

32,392
94,610357,0528,657
711(341,284)
152,138

32,396
87,770313,622
25,321
616(321,224)
138,501

314,730
919,258
3,469,219
84,114
6,908(3,316,012)
1,478,217

25,292
22,924
2,458
–
2,507
6,734
59,91522,536
19,545
3,793
3,538
–
5,408
54,820245,744
222,736
23,883–24,35965,429582,151

352,373$ 3,870,929

398,396¥

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Corporate Data

Nippon Shokubai Co., Ltd. and Consolidated Subsidiaries

March 31,
2013

2014
Liabilities and Net Assets
Current liabilities:
Short-term bank loans (Notes 4 and 9 ) ………………………………

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

(Millions of yen)¥

Current portion of long-term debt (Notes 4 and 9 ) …………………

Notes and accounts payable (Notes 3 and 4 ):Unconsolidated subsidiaries and afﬁliates …………………………

Trade ……………………………………………………………………

Lease obligations (Notes 9 ) ……………………………………………

Accrued income taxes (Note 11 ) ………………………………………
Accrued bonuses to employees ………………………………………

Accrued bonuses to directors and corporate auditors ………………

Reserve for periodic repairs ……………………………………………

Reserve for loss on disaster ……………………………………………
Other current liabilities …………………………………………………

Total current liabilities ……………………………………………………
Long-term liabilities:
Long-term debt (Notes 4 and 9 ) ………………………………………

Lease obligations (Notes 9 ) ……………………………………………

Deferred income taxes (Note 11 ) ………………………………………
Accrued retirement beneﬁts for employees (Note 10 ) ………………

Liability for retirement beneﬁts (Note 10 ) ……………………………

Other ……………………………………………………………………

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

17,60418,0282014¥

14,53314,080$171,045
175,165

5,444
47,323
30
3,917
2,639
125
2,845
–
13,182
111,137

4,488
34,927
36
751
2,597
23
2,680
45
10,04884,20852,895459,804
291
38,05925,641
1,215
27,643–
128,081
1,079,839

32,716175
284–
10,8001,091
45,06636,060164
222
10,418–
1,053
47,917

317,878
1,700
2,759
–
104,936
10,601
437,874

25,03822,083
180,240(924)
226,437

25,03822,083
172,375(897)
218,599

243,276
214,565
1,751,263(8,978)2,200,126

4,454
6,344
9
(970)
9,837
5,919
242,193
398,396

2,846(6,309)1–(3,462)
5,111
220,248352,373

43,276
61,641
87(9,425)95,57957,511
2,353,216$ 3,870,929

Contingent liabilities (Note 19 )Net assets:
Shareholdersʼ equity (Note 12 ):Common stock:
Authorized – 636,000,000 shares
Issued – 204,000,000 shares in 2014 and 2013 ……………………
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 (loss), net ……………

Minority interests ………………………………………………………

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

See accompanying notes to consolidated ﬁnancial statements.

¥

¥

21

22

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2014

Consolidated Statement of Income

Nippon Shokubai Co., Ltd. and Consolidated Subsidiaries

Year ended March 31,
2013

2014

Net sales (Note 22 ) ………………………………………………………

¥

Gross proﬁt …………………………………………………………

Selling, general and administrative expenses (Note 13 ) ………………

Operating income (Note 22 ) ………………………………………

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

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

Loss on impairment of property and equipment(Notes 8 and 22 ) …………………………………………………………

Rent income from real estate …………………………………………
Gain on insurance claims (Note 14 ) ……………………………………
Gain on insurance adjustment …………………………………………

Loss on reduction of property, plant and equipment …………………

Loss on disposal of property, plant and equipment …………………
Loss on discontinued operations (Note 16 ) ……………………………
Loss on devaluation of investments in unconsolidated subsidiaries
and afﬁliates ……………………………………………………………

Loss on explosion and ﬁre accident (Note 15 ) ………………………
Loss on cancellation of retirement beneﬁt trust………………………
Loss on devaluation of investments in an unconsolidated subsidiary
Other, net ………………………………………………………………
Income before income taxes and minority interests………………

Income taxes (Note 11 ):Current …………………………………………………………………

Deferred …………………………………………………………………
Income before minority interests …………………………………

Minority interests …………………………………………………………

Net income …………………………………………………………

See accompanying notes to consolidated ﬁnancial statements.

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

(Millions of yen)

Cost of sales (Note 13 ) ……………………………………………………

¥

302,136
253,181
48,955

2014

269,520
224,901
44,619$ 2,935,639
2,459,978475,661

35,203
13,752

34,585
10,034

342,043
133,618

1,031
(599)
369
1,105

1,032
(674)
1,291
1,371

10,017(5,820)
3,585
10,736

(394)
1,112
9,179
2,275
(2,128)
(64)
(867)

(89)
1,066
8,231
–
(47)
(20)
–

(3,828)10,80589,186
22,105(20,676)(622)(8,424)–(8,323)
(414)
(50)
(2)
15,982(264)(8,882)––(274)
12,775–(80,869)(4,023)(486)(18)
155,286

5,489
(373)
5,116
10,866(363)
10,503

3,343
872
4,215
8,560
(159)
8,401

53,333(3,624)49,709105,577(3,527)102,050¥¥$

Consolidated
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Consolidated Statement of Comprehensive Income

Nippon Shokubai Co., Ltd. and Consolidated Subsidiaries

Year ended March 31,
2013

2014

Income before minority interests ………………………………………

¥

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

Other comprehensive income of equity method afﬁliates attributable
to the Company …………………………………………………………
Total other comprehensive income (Note 17):Comprehensive income …………………………………………………

¥Comprehensive income attributable to:Shareholders of the Company …………………………………………

¥Minority interests ………………………………………………………

See accompanying notes to consolidated ﬁnancial statements.

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

(Millions of yen)

Other comprehensive income
Net unrealized holding gain on securities ……………………………

10,866

2014

¥

8,560

$

105,577

1,602
8
10,736

1,486
3
3,911

15,56578
104,3142,301
14,64725,513

1,736
7,136
15,69622,357
142,314
247,891

24,663850¥¥

15,297399$$

239,633
8,258

23

24

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2014

Consolidated Statement of Changes in Net Assets

Nippon Shokubai Co., Ltd. and Consolidated Subsidiaries

Shareholdersʼ equity
Commonstock
Balance at April 1, 2012 ……………

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

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

Net income …………………………
Purchases of treasury stock ………
Disposition of treasury stock………
Net changes in items other thanshareholdersʼ equity ………………

Total changes during the year ……

Balance at March 31, 2013 …………

Capitalsurplus¥25,038¥22,083¥ 168,441

–
–
–
–

–
–
–
–

(4,467)
8,401
–
–

–
–
25,038––22,083–
3,934¥ 172,375¥¥(890) ¥ 214,672(4,467)
8,401
(7)
–

–
–
(7)
–

¥

–
–
(7)
3,927
(897) ¥ 218,599

Accumulated other comprehensive income (loss)

Balance at April 1, 2012 ……………

Net
unrealized
holding gain
on securities

RetirementNet
beneﬁtunrealized
liability
Translation deferred gain
adjustmentson hedges
adjustments¥¥ (11,721) ¥Changes during the year:
Cash dividends ……………………

–
–
–
–

Net income …………………………
Purchases of treasury stock ………
Disposition of treasury stock………
Net changes in items other thanshareholdersʼ equity ………………

Total changes during the year ………
Balance at March 31, 2013 …………

1,366

¥

1,480
1,480
2,846

¥

(Millions of yen)

Total accumulated
othercomprehensive
loss, net

(2) ¥

–

–
–
–
–

–
–
–
–

–
–
–
–

–
–
–
–

5,412
5,412
(6,309) ¥

3
3
1

–
–
–

6,895
6,895
(3,462) ¥¥¥ (10,357) ¥¥Minority
interests

Total net
assets4,755¥ 209,070––––(4,467)
8,401
(7)
–

356
356
5,111

7,251
11,178¥ 220,248

Consolidated
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Care Concept

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Discussion
and Analysis ofOperation

Ten-Years
Summary

Financial
Statements

Corporate Data

Nippon Shokubai Co., Ltd. and Consolidated Subsidiaries

Shareholdersʼ equity
Commonstock
Balance at April 1, 2013 ……………

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

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

Net income …………………………
Purchases of treasury stock ………
Disposition of treasury stock………

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

Total changes during the year ……

Balance at March 31, 2014 …………

Capitalsurplus¥25,038¥22,083¥ 172,375

–
–
–
–

–
–
–
0

(2,638)10,503––––25,038–0
22,083–7,865¥ 180,240¥¥(897) ¥ 218,599(2,638)10,503
(30)
3

–
–
(30)
3

¥

–
–
(27)
7,838
(924) ¥ 226,437

Accumulated other comprehensive income (loss)

Balance at April 1, 2013 ……………

Net
unrealized
holding gain
on securities

RetirementNet
beneﬁtunrealized
liability
Translation deferred gain
adjustmentson hedges
adjustments¥¥

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

Net income …………………………
Purchases of treasury stock ………
Disposition of treasury stock………
Net changes in items other thanshareholdersʼ equity ………………

Total changes during the year ……
Balance at March 31, 2014 …………

¥Total accumulated
othercomprehensive
loss, net

(Millions of yen)

(6,309) ¥

1

–
–
–
–

–
–
–
–

–
–
–
–

–
–
–
–

1,608
1,608
4,454

12,653
12,653
6,344

8
8
9

(970)
(970)
(970) ¥

2,846

¥

¥

¥

¥

–

¥

Minority
interests

Total net
assets5,111¥ 220,248

–
–
–
–

–
–
–
–

(2,638)10,503(30)
313,29913,299
9,837

808
808
5,919

14,107
21,945¥ 242,193(3,462) ¥

¥

25

26

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2014

Nippon Shokubai Co., Ltd. and Consolidated Subsidiaries

Shareholdersʼ equity
Commonstock

Capitalsurplus

Balance at April 1, 2013 …………… $ 243,276
Changes during the year:
Cash dividends ……………………

(Thousands of U.S. dollars) (Note 2)$ 214,565 $ 1,674,845 $

–
–
–
–

Net income …………………………
Purchases of treasury stock ………

Disposition of treasury stock………

Less treasury
Total
stock,
shareholdersʼ
at costequityRetainedearnings–––
0(25,632)
102,050––

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

–
–
–
–
0
76,418
Balance at March 31, 2014 ………… $ 243,276 $ 214,565 $ 1,751,263 $Total changes during the year ……

(8,716) $ 2,123,970(25,632)
102,050
(291)
29

–
–
(291)
29

–
–
(262)
76,156(8,978) $ 2,200,126

Accumulated other comprehensive income (loss)
Net
unrealized
holding gain
on securities
Balance at April 1, 2013 …………… $Changes during the year:
Cash dividends ……………………

Net income …………………………
Purchases of treasury stock ………
Disposition of treasury stock………
Net changes in items other thanshareholdersʼ equity ………………

Total changes during the year ……
Balance at March 31, 2014 ………… $RetirementNet
beneﬁtunrealized
liability
Translation deferred gain
adjustmentson hedges
adjustments

27,652 $(61,299) $

–
–
–
–

–
–
–
–

Total accumulated
othercomprehensive
loss, net

Minority
interests

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

15,624
122,940
15,624
122,940
43,276 $ 61,641 $See accompanying notes to consolidated ﬁnancial statements.

9 $

– $

–
–
–
–

–
–
–
–

78
78
87 $

(33,638) $––––(9,425)
129,217(9,425)
129,217(9,425) $ 95,579 $

49,660 $ 2,139,992––––(25,632)
102,050
(291)
29

7,851
137,068
7,851
213,224
57,511 $ 2,353,216

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,
2013

2014

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

(Millions of yen)

Operating activities:
Income before income taxes and minority interests ……………………

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

Loss on devaluation of investments in an unconsolidated subsidiary …
Loss on devaluation of investments in unconsolidated subsidiaries
and afﬁliates ……………………………………………………………

Loss on reduction of property, plant and equipment …………………

Loss on discontinued operations ………………………………………
Loss on impairment of property, plant and equipment ………………

Gain on insurance claims ………………………………………………
Gain on insurance adjustment …………………………………………

Increase in accrued retirement beneﬁts for employees ……………

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

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

Loss on disposal of property, plant and equipment …………………
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 insurance claims …………………………………………

Payment of income taxes …………………………………………………
Payment for liquidation of business ……………………………………
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 …………………………
Initiation of loans receivable………………………………………………
Collection of loans receivable ……………………………………………

Other, net …………………………………………………………………

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

¥

15,982

2014¥

12,775$

155,286

16,99550

15,402–

165,128
486

–
2,128
725
394
(9,192)(2,275)–232(1,031)599(1,105)64(2,441)

264
47
–
89
(8,231)–157–(1,032)674(1,371)
23(5,544)–
20,676
7,044
3,828(89,312)(22,105)–
2,254(10,017)
5,820(10,736)622(23,717)(16,215)(14,393)
12,386
(657)
2,246
1,953
(614)
14,639(1,226)(6)
16,992

26,9193,030(14,869)(269)
28,064
2,799
(691)
8,231
(11,081)–
27,322(157,550)(139,846)
120,346(6,384)
21,823
18,976(5,966)142,237(11,913)(58)
165,099(22,395)
109
(933)
(742)
328
(9)
(600)
184
(1,084)(25,142)(29,382)
12
(239)
(521)
216
(984)
(1,299)177
142(31,878)(217,596)
1,059(9,065)(7,209)3,187(87)(5,830)
1,788(10,533)(244,286)

¥

$

27

28

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2014

Nippon Shokubai Co., Ltd. and Consolidated Subsidiaries

Years ended March 31,
2013

2014

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

(Millions of yen)

Financing activities:
Increase (Decrease) in short-term bank loans, net ……………………

¥Proceeds from long-term debt …………………………………………
Repayment of long-term debt ……………………………………………
Repayments of bonds ……………………………………………………

Cash dividends paid ………………………………………………………

Proceeds from sales of treasury stock …………………………………
Purchases of treasury stock ……………………………………………

Other, net …………………………………………………………………

Net cash (used in) provided by ﬁnancing activities ……………………

Effect of exchange rate changes on cash and cash equivalents ………
Decrease in cash and cash equivalents …………………………………
Cash and cash equivalents at beginning of year ………………………

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

¥

2,918
11,400(14,100)–(2,639)3(30)(71)(2,519)2,487(8,182)47,801
39,619

2014

¥

¥

(299)
19,687(9,743)(5,000)(4,467)
–
(7)
(90)
81
1,464
(3,011)50,81247,801$$

28,352
110,766(137,000)–(25,641)
29
(291)
(690)
(24,475)
24,163(79,499)
464,448
384,949

Consolidated
Financial
Highlights

Messages fromPresident

Special Feature

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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

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

March 31, 2014
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, 2013 to the 2014 presentation. Such reclassiﬁcations had no effect on consolidated net income 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 atthe balance sheet date, except that the components of net assets excluding minority 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 net income but are reported as translation adjustments and minority interests in theaccompanying consolidated balance sheets at March 31, 2014 and 2013.
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 balance sheet date and gain or loss on each translation is credited or charged to income.
(d) Cash and cash equivalents
Cash and cash equivalents include cash on hand and in banks and other highly liquid investments with maturities of three months
or less when purchased.
(e) Allowance for doubtful receivables
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 2014(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 corporate auditors
Accrued bonuses to directors and corporate auditors are provided at an estimate of the amount to be paid in the following 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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Financial
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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 thestraight-line 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 24).
(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.
(s) Change in Accounting Policy
Accounting Standard for Retirement Beneﬁts
Effective March 31, 2014, the Company and its domestic consolidated subsidiaries adopted “Accounting Standard for
Retirement Beneﬁts” (Accounting Standards Board of Japan (“ASBJ”) Statement No. 26 issued on May 17, 2012) and “Guidanceon Accounting Standard for Retirement Beneﬁts” (ASBJ Guidance No. 25 issued on May 17, 2012), except provisions set forth inparagraph 35 of ASBJ Statement No. 26 and paragraph 67 of ASBJ Guidance No. 25.
In accordance with the adoption, the retirement beneﬁt obligations after the fair value of the pension plan assets are
deducted, actuarial gains and losses and prior service costs that have yet to be recognized in proﬁt or loss are recorded as “Liability
for retirement beneﬁts.”
The adoption of these standards follows transitional provisions set forth in paragraph 37 of ASBJ Statement No. 26, and theeffect of this change is included in accumulated other comprehensive income (loss) as “Retirement beneﬁt liability adjustments.”
As a result of this change, accumulated other comprehensive income decreased by ¥817 million ($7,938 thousand) andnet assets per share decreased by ¥4.03 ($0.04) as of March 31, 2014 from the corresponding amounts which would have been
decreased recorded under the previous method.
(t) Accounting standards issued but not yet effective(Accounting Standard for Retirement Beneﬁts)
On May 17, 2012, the ASBJ issued “Accounting Standard for Retirement Beneﬁts” (ASBJ Statement No. 26) and “Guidance on
Accounting Standard for Retirement Beneﬁts” (ASBJ Guidance No.25), which replaced the Accounting Standard for Retirement
Beneﬁts that had been issued by the Business Accounting Council in 1998 with an effective date of April 1, 2000 and the otherrelated practical guidance, being followed by partial amendments from time to time through 2009.
(1) Summary
These accounting standards were amended from the viewpoint of improvements to ﬁnancial reporting and international
convergence, mainly focusing on how actuarial gains or losses and prior service costs should be accounted for, howretirement beneﬁt obligations and current service costs should be determined, and enhancement of disclosures.

31

32

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2014

(2) Planned date of adoption
The revised accounting standard and guidance for the accounting for unrecognized actuarial gains or losses and unrecognizedprior service costs and enhancement of disclosures were adopted as of the end of the ﬁscal year ended March 31, 2014.
However, revisions to the calculation methods for the retirement beneﬁt obligation and service costs are scheduled to be
adopted from the beginning of the ﬁscal year ending March 31, 2015.
(3) Effect of adoption of these accounting standards
The impact of the adoption of these accounting standards is currently under assessment.
(Accounting Standards for Business Combinations)
On September 13, 2013, the ASBJ issued “Revised Accounting Standard for Business Combinations” (ASBJ Statement No.21),“Revised Accounting Standard for Consolidated Financial Statements” (ASBJ Statement No.22),“Revised Accounting Standard forBusiness Divestitures” (ASBJ Statement No.7), “Revised Accounting Standard for Earnings Per Share” (ASBJ Statement No.2),“Revised Guidance on Accounting Standard for Business Combinations and Accounting Standard for Business Divestitures” (ASBJ
Guidance No.10), and “Revised Guidance on Accounting Standard for Earnings Per Share” (ASBJ Guidance No.4).
Under these revised accounting standards, the accounting treatment for any changes in a parentʼs ownership interest in a
subsidiary when the parent retains control over the subsidiary and the corresponding accounting for acquisition-related costs
were revised. In addition, the presentation method of net income was amended, the reference to “minority interests” was changed
to “non-controlling interests,” and transitional provisions for these accounting standards were also deﬁned.
The Company expects to adopt these revised accounting standards and guidance from the beginning of the ﬁscal year ending
March 31, 2016.
The impact of the adoption of these accounting standards is currently under assessment.
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 ¥102.92 = U.S. $1.00, the approximate rate of exchange in effect on March 31, 2014. 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.

Notes Receivable and Notes Payable
The balance sheet date for the year ended March 31, 2013 fell on a bank holiday. Consequently, notes receivable, trade of ¥178
million, notes payable, trade of ¥152 million and notes payable of ¥110 million included in other current liabilities with maturity
dates of March 31, 2013 were included in the respective balances in the consolidated balance sheet at March 31, 2013 and weresettled on the next business day.

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.

Consolidated
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Governance
SystemCSR Based on
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Discussion
and Analysis ofOperation

Financial
Statements

Corporate Data

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
Group also 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 21.
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.
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.
ii)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.

33

34

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2014

(2) Fair value of ﬁnancial instruments
Carrying value, fair value, and unrealized gain or loss on ﬁnancial instruments at March 31, 2014 and 2013 are shown in thefollowing table. The following table does not include ﬁnancial instruments for which it is extremely difﬁcult to determine thefair value.
2014
2013
(Millions of yen)

Carrying
value

Fair
value

Unrealized
loss

43,255¥Carrying
value

Fair
value

Unrealized
gain

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

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

Total assets …………………………

43,255¥–¥–49,847¥

49,847¥–

69,96469,964

24,667¥ 137,886

24,667¥ 137,886

¥

–
–

¥

21,831
124,257¥

21,831
124,257

¥

–
–

¥

¥

¥

–

¥

39,415¥39,415¥–52,57952,579–Liabilities:iv) Notes andaccounts payable ………………
v) Short-term bankloans ……………………………

52,76752,767

17,604

17,604–

14,533

14,533–

Total liabilities ………………………

8,028
32,716¥ 111,115

8,006
32,637¥ 111,014

¥

(22)
(79)
(101)

¥

14,08026,06094,088¥14,15426,09094,192

¥

74
30
104

Derivatives …………………………

¥

¥

¥

–

¥

1

¥

1

¥

–

vi) Current portion of
long-term loans ………………

vii) Long-term loans ………………

14

14
2014

(Thousands of U.S. dollars)

Carrying value

Fair
value

i) Cash and cash
equivalents, and time deposits$ 420,277$ 420,277

ii) Notes andaccounts receivable ……………

679,790679,790239,672$1,339,739

239,672$1,339,739

Unrealized
loss

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

Total assets …………………………

$

–
–

$

–
–

Consolidated
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SystemCSR Based on
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Financial
Statements

Corporate Data

2014
(Thousands of U.S. dollars)

Carrying value

Fair
value

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

$ 512,699$ 512,699v) Short-term bankloans ……………………………

171,045

171,045–

Total liabilities ………………………

78,002
317,878$1,079,624

77,789317,110$1,078,643

$

(213)
(768)
(981)

Derivatives …………………………

$

$

$

–

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

vii) Long-term loans ………………

1)

136

136

$

–

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 byinterest-rate swap agreements and accounted for as loans with ﬁxed interest rates. The estimated fair value of
those long-term 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 undersimilar conditions.
Derivative transactions:
Please refer to Note 21.

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, 2014 and 2013 are presented as follows:
2014
2013
2014

Unlisted securities and other ……………

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

¥

625

¥

705

$

6,073

Since there is no market price for unlisted securities and it is difﬁcult to determine the fair value, they are not included in theabove iii), “Investments in securities” in the preceding table “(2) Fair value of ﬁnancial instruments.”

35

36

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 20143)

The redemption schedule for monetary assets with maturity dates as of March 31, 2014 and 2013 is as follows:
2014
2013
2014
(Thousands of
U.S. dollars)(Millions of yen)

Due within
one year
Cash and cash equivalents, and time
deposits ……………………………………

¥

43,25569,964113,219

Notes and accounts receivable …………

¥
5.

Due within
one year¥¥

Due within
one year$

420,277
679,790$ 1,100,067

49,84752,579102,426

Investments in Securities
Marketable securities classiﬁed as other securities at March 31, 2014 and 2013 are summarized as follows:
2014
2013
(Millions of yen)Book value (fairmarket value)
Securities whose fair market value
exceeds their cost:
Equity securities ……………………

¥Subtotal ………………………………

Securities whose cost exceeds theirfair market value:
Equity securities ……………………

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

¥

18,191
18,1916,476
6,476
24,667

Unrealized
gain (loss)

Book value (fairmarket value)¥¥

15,297
15,927(457)(457)
6,603 ¥

6,534
6,534
21,831

Cost¥

11,131
11,131

6,933
6,933
18,064

¥

¥

7,060
7,060

2014
(Thousands of U.S. dollars)

Securities whose fair market value
exceeds their cost:
Equity securities ……………………

Subtotal ………………………………

Securities whose cost exceeds theirfair market value:
Equity securities ……………………

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

Book value (fairmarket value)

Cost$ 176,749
176,749$ 108,152
108,152

62,92362,923$ 239,672

67,36367,363$ 175,515

Unrealized
gain (loss)$$

68,597
68,597(4,440)(4,440)64,157

Sales of other securities for the years ended March 31, 2014 and 2013 were as follows:
2014
2013
2014

Proceeds ……………………………
Gross realized loss …………………

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

¥
¥

93
–

¥
¥

2
0

$
$

904
–

Unrealized
gain (loss)

Cost

¥

¥

9,315
9,315

8,242
8,242
17,557

¥

¥

5,982
5,982

(1,708)(1,708)4,274

Consolidated
Financial
Highlights

6.

Messages fromPresident

Special Feature

Description ofBusiness

Governance
SystemCSR Based on
Responsible
Care Concept

Inventories
Inventories at March 31, 2014 and 2013 were as follows:
2014
2013

Merchandise and ﬁnished goods ………

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

Total …………………………………

¥

35,455
11,623
6,738
4,808
58,624¥¥

Ten-Years
Summary

Financial
Statements

Corporate Data

2014
(Thousands of
U.S. dollars)(Millions of yen)

Raw materials ………………………

Management
Discussion
and Analysis ofOperation

21,468
9,618
7,170
3,953
42,209$ 344,491
112,932
65,46846,716$ 569,607

7.

Other Current Assets
On September 29, 2012, there was an explosion and ﬁre at the Himeji factory in which inventories and property, plant andequipment were damaged or destroyed. The book value of these items and the repair cost of the property, plant and equipment
amounted to ¥2,176 million, and was accounted for under an suspense account included in other current assets since theCompany expects to receive insurance proceeds from the accident.

8.

Loss on Impairment of Property, Plant and Equipment
Property, plant and equipment are primarily grouped based on the business segment categories designated for management
control purposes.
For the year ended March 31, 2014, market value of equipment used to manufacture polymers for concrete admixture in at
a plant in China had decreased signiﬁcantly in line with decrease in market demand, and a loss on impairment of property andequipment was recognized. Accordingly, the Company has written down such assets to their respective net recoverable amounts.
The net recoverable amounts of these impaired assets were measured at net selling value in the amount of ¥394 million ($3,828
thousand).
For the year ended March 31, 2013, the electronic device material manufacturing equipment in the Suita plant that are
not intended to be used in the future and were classiﬁed as idle after the production of the manufacturing equipment was
discontinued. Accordingly, the Company has written down such assets to their respective net recoverable amounts. The net
recoverable amounts of these impaired assets were measured at net selling value in the amount of ¥89 million.
Details of the loss on impairment of property and equipment for the years ended March 31, 2014 and 2013 are summarized
as follows:
2014
Company

Nisshoku Chemical
Industry Co., Ltd.

Application

Classiﬁcation

Equipment to manufacture Machinery and equipment,
polymers for concrete
construction in progress,
admixturebuildings and structures

Total（Millions of yen）

(Thousands of U.S. dollars)

¥

394

$

3,828

¥

394

$

3,828

2013
Company

Nippon ShokubaiCo., Ltd.
Total

Application

Classiﬁcation

Electronic device
manufacturing equipment Machinery（Millions of yen）

¥

89

¥

89

37

38

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 20149.

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, 2014 and 2013 were 0.67% and 0.71%, respectively.
Long-term debt and lease obligations at March 31, 2014 and 2013 consisted of the following:
2014
2013
2014
(Thousands of
U.S. dollars)(Millions of yen)Unsecured bonds payable in Japanese yen, at rate of 1.66%, due
through 2014 …………………………………………………………

¥

10,000¥10,000$97,163

Unsecured loans from banks and insurance companies, payable inJapanese yen, at rates from 0.40% to 2.03%, due through 2019 …

15,337

24,709149,018

Unsecured loans from banks, payable in U.S. dollars, at rates
from 0.61% to 1.52%, due through 2020 ……………………………

25,29415,152245,764

Unsecured loans from banks, payable in Chinese yuan, at rates
from 5.54% to 5.65%, due through 2013 ……………………………

–

49

–

113
205
50,949(18,058)
32,891

230
200
50,340(14,116)
36,2241,098
1,991
495,034(175,456)
319,578

Secured loans from banks payable in Japanese yen, at rates from
1.24% to 1.55%, due through 2016 …………………………………
Lease obligations ……………………………………………………

Subtotal ………………………………………………………………

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

Total …………………………………………………………………

¥¥

The aggregate annual maturities of long-term debt subsequent to March 31, 2014 are summarized below:
Year ending March 31,
2015 …………………………………………………………………
2016 …………………………………………………………………

(Thousands of
U.S. dollars)(Millions of yen)¥2017 …………………………………………………………………
2018 …………………………………………………………………

2019 and thereafter …………………………………………………

¥

18,028
6,821
7,280
10,7457,870
50,744$$

175,165
66,27570,735
104,401
76,467493,043

The aggregate annual maturities of lease obligations to March 31, 2014 are summarized below:
Year ending March 31,
2015 …………………………………………………………………

(Thousands of
U.S. dollars)(Millions of yen)¥2016 …………………………………………………………………
2017 …………………………………………………………………
2018 …………………………………………………………………

2019 and thereafter …………………………………………………

¥

30
30
29
29
87
205

$

$

291
291
282
282
845
1,991

$

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

Assets pledged as collateral for short-term bank loans, long-term debt, including the current portion thereof, and notes andaccounts payable at March 31, 2014 and 2013 were as follows:
2014
2013
2014

Time deposits ………………………………………………………

¥

8
533
102
199
4
846

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

Other assets …………………………………………………………

Total …………………………………………………………………

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

¥

¥

–
533
119
214
12
878

¥

$

$

78
5,179
991
1,934
39
8,221

10. Retirement Beneﬁts(1) Outline of Retirement Beneﬁt Plans
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 beneﬁt. However, the Company has a cash
balance plan for a deﬁned beneﬁt pension plan and retirement lump-sum plan. Under the cash balance plan, each eligible
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.
Certain deﬁned beneﬁt corporate pension plans adopt an employeesʼ retirement beneﬁt trust. During the year ended
March 31, 2014, the Company contributed all assets in the employeesʼ retirement beneﬁt trust to the corporate pension fund andcancelled the employeesʼ retirement beneﬁt of the Company since the objective of the trust was achieved.
Certain consolidated subsidiaries calculate the retirement beneﬁt obligations and retirement beneﬁt expenses for theirdeﬁned beneﬁt corporate pension plans and lump-sum payments plans based on the amount which would be payable at the yearend 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.
(2) For the year ended March 31, 2014
Information on deﬁned beneﬁt pension plans for the year ended March 31, 2014 is as follows:
The change in retirement beneﬁt obligation is outlined as follows (excluding plans to which the simpliﬁed method is applied):
Millions of yen

Retirement beneﬁt obligation at April 1, 2013 ……………………

¥

Service cost …………………………………………………………

Interest cost …………………………………………………………
Actuarial gain…………………………………………………………

Beneﬁts paid …………………………………………………………

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

Retirement beneﬁt obligation at March 31, 2014 …………………

¥

2014
32,0961,362
613
29(1,828)87(6)32,353Thousands of
U.S. dollars$$

311,854
13,234
5,956
282(17,761)845(59)314,351

39

40

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2014

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

Plan assets at fair value at April 1, 2013…………………………

¥Expected return on plan assets ……………………………………

Actuarial gain ………………………………………………………
Contributions by the employer ……………………………………

Beneﬁts paid …………………………………………………………

Plan assets at fair value at March 31, 2014 ………………………

¥

2014
23,693
658
759
1,149
(1,185)25,074

Thousands of
U.S. dollars$$

230,208
6,393
7,375
11,164(11,514)
243,626

The change in liabilities for retirement beneﬁts calculated by the simpliﬁed method is outlined as follows:
Millions of yen

Liabilities for retirement beneﬁts at April 1, 2013 …………………

¥Retirement beneﬁt expenses ………………………………………
Beneﬁts paid …………………………………………………………

Other …………………………………………………………………

Liabilities for retirement beneﬁts at March 31, 2014………………

¥

2014
1,097
84
(108)
(58)
1,015

Thousands of
U.S. dollars$$

10,659816(1,049)
(564)
9,862

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 sheet is as follows:
Millions of yen

Thousands of
U.S. dollars

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

2014
23,792(25,847)(2,055)
10,348

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

8,293

80,577

10,800(2,507)104,936(24,359)

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

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

Liability for retirement beneﬁts ……………………………………
Asset for retirement beneﬁts ………………………………………

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

¥(8,293)Retirement beneﬁt calculated by the simpliﬁed method is included in the above table.

$$

231,170(251,137)(19,967)
100,544(80,577)

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

The components of retirement beneﬁt expenses for the year ended March 31, 2014 are outlined as follows:
Millions of yen

Service cost …………………………………………………………

¥Interest cost …………………………………………………………
Expected return on plan assets ……………………………………
Amortization:
Actuarial loss ………………………………………………………

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

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

¥

2014
1,362
613
(658)
224
17
84
1,642

Thousands of
U.S. dollars$$

13,234
5,956(6,393)
2,176
165
816
15,954

Loss on cancellation of the employeesʼ retirement beneﬁt trust of ¥414 million ($4,023 thousand) is not included in the abovetable and is recorded as an extraordinary loss in the consolidated statement of income for the year ended March 31, 2014.
Retirement beneﬁt liability adjustments included in accumulated other comprehensive income, before the tax effect, are outlined
as follows:
Millions of yen

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

¥Total …………………………………………………………………

¥Unrecognized actuarial loss …………………………………………

2014
84
1,243
1,327

Thousands of
U.S. dollars

$
$

816
12,077
12,893The breakdown of plan assets by major category is as follows:
Bonds …………………………………………………………………
Equities ………………………………………………………………

General accounts ……………………………………………………
Other …………………………………………………………………

Total …………………………………………………………………

2014
44%
35%
2%
19%
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) A portion of pension assets (0.4%) is in a retirement beneﬁt trust.
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.

41

42

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2014

The assumptions used in accounting for the deﬁned beneﬁt plans for the year ended March 31, 2014 are as follows:
2014
Discount rate ………………………………………………………… Principally 1.9%
Expected long-term rate of return on plan assets ……………… Principally 3.0%
The required contributions to deﬁned contribution pension plans for the year ended March 31, 2014 amounted to ¥219 million($2,128 thousand).
The following table sets forth the status of the multi-employer pension plan at March 31, 2013, the most recent date on whichsuch data was available:
Millions of yen

Plan assets……………………………………………………………
Beneﬁt obligation calculated under pension ﬁnancing ……………

Difference ……………………………………………………………

¥¥

465,230
497,125(31,895)

Thousands of
U.S. dollars$ 4,520,307
4,830,208$ (309,901)

The contribution ratio of the Company and consolidated subsidiaries to the multi-employer plan was 0.5% at March 31, 2014. This
percentage is not the same as the Company and consolidated subsidiariesʼ percentage of obligation.
Additional information
The difference of ¥31,895 million ($309,901 thousand) in the above table is the net amount of the balance of prior service
cost of ¥49,514 million ($481,092 thousand) calculated under pension ﬁnancing and the surplus of the plan of ¥17,618 million($171,182 thousand) at March 31, 2013. Prior service cost is amortized on a straight-line basis over 9 years as of April 1, 2013,
and the Company and consolidated subsidiaries expensed additional payments in the amount of ¥28 million ($272 thousand) for
amortization of prior service cost.
(3) For the year ended March 31, 2013
The following table sets forth the funded and accrued status of the pension plans and the amounts recognized in theaccompanying consolidated balance sheet at March 31, 2013 for the Companyʼs and the consolidated subsidiariesʼ deﬁned beneﬁt
pension plans:
2013
Retirement beneﬁt obligation at end of year ………………………

(Millions of yen)¥

Fair value of plan assets at end of year ……………………………
Unfunded retirement beneﬁt obligation ……………………………
Unrecognized actuarial loss …………………………………………

Unrecognized prior service cost ……………………………………

Net retirement beneﬁt obligation …………………………………
Prepaid pension cost…………………………………………………
Accrued retirement beneﬁts ………………………………………

¥(33,898)
24,394(9,504)2,611
13(6,880)
3,538(10,418)(Note) Certain consolidated subsidiaries have calculated their retirement beneﬁt obligation based on the simpliﬁed method.

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

The component of retirement beneﬁt expenses for the year ended March 31, 2013 is outlined as follows:2013
Service cost …………………………………………………………
Interest cost …………………………………………………………

(Millions of yen)

¥

1,498
605
(590)

Expected return on plan assets ……………………………………

Amortization:
Prior service cost ……………………………………………………

3
750
2,266

Actuarial loss …………………………………………………………

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

¥(Note) Service cost includes special premium retirement beneﬁt and retirement beneﬁt expenses under the simpliﬁed method.
The assumptions used in accounting for the deﬁned beneﬁt pension plans for the years ended March 31, 2013 were as follows:2013
Principally 1.9%
Discount rate …………………………………………………………
Principally 3.0%
Expected rate of return on plan assets ……………………………
11. Income Taxes
Income taxes applicable to the Company and its domestic consolidated subsidiaries consist of corporation, inhabitantsʼ
and enterprise taxes. The statutory tax rate in Japan for the years ended March 31, 2014 and 2013 was, in the aggregate,approximately 38.0%.
The effective tax rates reﬂected in the accompanying consolidated statements of income for the years ended March 31, 2014
and 2013 differed from the above statutory tax rate for the following reasons:
2014
2013
38.0 %
38.0 %
Statutory tax rate ……………………………………………………
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
Foreign tax credit …………………………………………………
Decrease in deferred income tax assets resulting from change
in the statutory tax rates …………………………………………

Other, net …………………………………………………………

Effective tax rates ……………………………………………………

5.3
(4.2)
(5.8)
(2.6)
(0.4)

1.7
(6.8)
(1.8)
(4.1)
(0.5)

1.5
0.2
32.0 %–
6.5
33.0 %43

44

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2014

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,
2014 and 2013 are summarized as follows:
2014
2013
2014
(Thousands of
U.S. dollars)(Millions of yen)

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

¥

Accrued retirement beneﬁts for employees ……………………

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 ………………………………………
Impairment 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 afﬁliate ………………………

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 ……………………………………………

¥

2,733
–
2,508
3,709

¥

3,041
2,501
–
2,936

$

26,55524,36836,038

1,440
903
1,042
1,013
421
2,702
16,471(5,006)
11,465

1,149
960
1,106
1,019
390
1,131
14,233(4,172)
10,061

13,991
8,774
10,1249,843
4,091
26,253160,037(48,640)
111,397(2,052)(1,130)
(320)
(291)
(11)
(1,110)(4,914)
6,551(1,312)
(879)
(322)
(277)
(14)
(768)
(3,572)
6,489(19,938)(10,979)(3,109)(2,827)(107)(10,785)(47,745)
63,652¥$The “Act for Partial Amendment of the Income Tax Act, etc.” (Act No.10 of 2014) was promulgated on March 31, 2014 and, as aresult, the Company is no longer subject to the Special Reconstruction Corporation Tax effective for ﬁscal years beginning on orafter April 1, 2014. In line with these revisions, the Company changed the statutory tax rate to calculate deferred tax assets andliabilities from 38.0% to 35.6% for temporary differences expected to be realized after April 1, 2014.
As a result of this change, net deferred tax assets (after netting deferred tax liabilities) decreased by ¥243 million ($2,361
thousand), income taxes-deferred increased by ¥243 million ($2,361 thousand), and net unrealized deferred loss on hedges
increased ¥0 million ($0 thousand) as of and for the year ended March 31, 2014.

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

12. 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 ($38,088 thousand) at March 31, 2014 and 2013.
Common stock and treasury stock
Movements in shares of common stock in issue and treasury stock during the years ended March 31, 2014 and 2013 aresummarized as follows:
2014
Number of shares(Thousands)

Common stock …………

Treasury stock …………

April 1, 2013

Increase

Decrease

March 31, 2014

204,000
1,010

–
25

–
2

204,000
1,033

2013
Number of shares(Thousands)

Common stock …………

Treasury stock …………

April 1, 2012

Increase

Decrease

March 31, 2013

204,000
1,001

–
9

–
–

204,000
1,010

13. 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, 2014 and 2013 totaled ¥11,161 million ($108,443 thousand) and ¥11,441 million, respectively.
14. Gain on Insurance Claims
During the year ended March 31, 2014 and 2013, the Company received insurance proceeds in the amount of ¥9,179 million ($89,186
thousand) and ¥8,231 million related to the explosion and ﬁre at the Himeji factory on September 29, 2012, respectively.
15. Loss on Explosion and Fire Accident
Loss on explosion and ﬁre accident for the years ended March 31, 2014 and 2013 in the amount of ¥8,323 million ($80,869
thousand) and in the amount of ¥8,882 million is mainly factory ﬁxed costs due to business suspension resulting from the
explosion and ﬁre at the Himeji factory on September 29, 2012, respectively.
16. Loss on Discontinued Operations
For the year ended March 31, 2014, the Company recorded a loss on discontinued operations consisting mainly of the following:

Removal costs ………………………………………………………

Loss on disposal of property, plant and equipment ………………
Loss on disposal of inventories ……………………………………

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

¥

204
205
311

$

1,982
1,992
3,022

45

46

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 201417. Other Comprehensive Income
The following table presents reclassiﬁcation adjustments and tax effects of components of other comprehensive income (loss) for
the years ended March 31, 2014 and 2013:
2014
2013
2014

Unrealized holding income (loss) on securities:
Amount arising during the year …………………………………

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

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

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

Tax effects …………………………………………………………

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

2,343
–
2,343
(741)
1,602

Deferred gain on hedges:
Amount arising during the year …………………………………

¥

2,211
0
2,211
(725)
1,486

$

22,765–22,765(7,200)15,565Net deferred gain on hedges ………………………………………

12
(4)
8

5
(2)
3

117
(39)
78

Translation adjustments:
Amount arising during the year …………………………………

10,736

3,911

104,3142,301
14,647

1,736
7,136

22,357
142,314

Tax effects …………………………………………………………

Other comprehensive income (loss) of equity method afﬁliates
attributable to the Company:
Amount arising during the year …………………………………

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

¥

¥

$

18. 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, 2014 and 2013 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:
2014
2013
2014
(Thousands of
U.S. dollars)(Millions of yen)Equipment:
Acquisition costs ……………………………………………………

¥

Net book value ……………………………………………………

¥

Accumulated depreciation/amortization …………………………

564
(361)
203

¥
¥

564
(303)
261

$
$

5,480
(3,508)
1,972

Lease payments of the Company and its domestic consolidated subsidiaries relating to ﬁnance leases amounted to ¥59 million($573 thousand) and ¥66 million for the years ended March 31, 2014 and 2013, respectively. Depreciation on these leased assets
calculated by the straight-line method would have amounted to ¥59 million ($573 thousand) and ¥66 million for the years ended
March 31, 2014 and 2013, respectively, if it had been reﬂected in the accompanying consolidated balance sheets.
Future minimum lease payments (including the interest portion thereon) subsequent to March 31, 2014 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,
2015 …………………………………………………………………

(Millions of yen)¥2016 and thereafter …………………………………………………

¥

57
146
203

(Thousands of
U.S. dollars)

$
$

554
1,418
1,972

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19. Contingent Liabilities
The Company and one consolidated subsidiary were contingently liable as guarantors of indebtedness of an afﬁliate at March 31,
2014 and 2013 as follows:
2014
2013
2014

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

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

¥

1,977
988

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

¥

1,995
903

$

19,2099,600

Two consolidated subsidiaries had contingent liabilities arising from notes discounted with banks and notes endorsed at March
31, 2014 and 2013 as follows:
2014
2013
2014

Notes discounted with banks ………………………………………

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

¥

261
3

Notes endorsed ………………………………………………………

¥

423
3

$

2,536
29

20. Amounts per Share2014
Net income ……………………………………………………………

2014

2013
(Yen)

¥

Cash dividends ………………………………………………………

Net assets ……………………………………………………………

51.74
16.00
1,164.10(U.S. dollars)

¥

41.38
16.00
1,059.85

$

0.50
0.16
11.31

Net income per share has been computed based on the net income available to shareholders of common stock and the weightedaverage number of shares of common stock outstanding during the year. Diluted net income per share has not been presented
for the years ended March 31, 2014 and 2013 since neither the Company nor any of the consolidated subsidiaries had any
potentially dilutive shares at March 31, 2014 and 2013.
The amounts per share of net assets have been computed based on the number of shares of common stock outstanding at
the year end.
Cash dividends per share represent the cash dividends declared as applicable to the respective years together with theinterim cash dividends paid.
The ﬁnancial data used in the computation of net income per share for the years ended March 31, 2014 and 2013 issummarized as follows:
2014
2013
2014

Net income ……………………………………………………………

¥Adjusted net income available to shareholders of common stock¥

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

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

10,503–
10,503202,981

¥
¥

8,401
–
8,401
202,995$$

102,050–
102,050

47

48

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2014

21. 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, 2014.
Derivative transactions to which hedge accounting is not applied as of March 31, 2013 are summarized as follows:
Millions of yen

2013
Contract value
Transaction

Maturing within
one year

Maturing after one
year

Fair value

Forward foreign currency
exchange contracts:
Sell

¥

¥

¥

Type
Over-the-countermarket

11

–

Loss

(1)

(1)

¥

(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, 2014
and 2013 are summarized as follows:
Currency-related transactions
Millions of yen

2014
Contract value
Method of hedge
accounting
Deferral hedge

Allocation method

Transaction

Major hedged item

Maturing within
one year

Maturing after
one year

Fair value

Forward foreign currency
exchange contracts:
Buy

Accounts payable, trade

¥

¥

¥

312

–

14

Forward foreign currency
exchange contracts:
Sell

Accounts receivable,
trade

Buy

Accounts payable, trade

8,334
26

(*)
(*)

–
–

Millions of yen

2013
Contract value
Method of hedge
accounting
Deferral hedge

Allocation method

Transaction

Major hedged item

Maturing within
one year

Maturing after
one year

Fair value

Forward foreign currency
exchange contracts:
Buy

Accounts payable, trade

¥

¥

¥

18

–

2

Forward foreign currency
exchange contracts:
Sell

Accounts receivable,
trade

Buy

Accounts payable, trade

1,114
19

–
–

(*)
(*)

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Thousands of U.S. dollars

2014
Contract value
Method of hedge
accounting
Deferral hedge

Allocation method

Transaction

Major hedged item

Forward foreign currency
exchange contracts:
Buy

Accounts payable, trade

Maturing within
one year$

3,031

Maturing after
one year$–

Fair value$

136

Forward foreign currency
exchange contracts:
Sell

Accounts receivable,
trade

Buy

Accounts payable, trade80,976
253

(*)
(*)

–
–

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
Millions of yen

2014
Contract value
Method of hedge
accounting
Swap rates applied tounderlying debt

Transaction

Interest rate swaps:

Major hedged item

Notional
amountMore than one
year

Fair value

Long-term debt,
including current
portionReceive / ﬂoating and pay/ ﬁxed

¥

5,000

¥

(*)

5,000

Millions of yen

2013
Contract value
Method of hedge
accounting
Swap rates applied tounderlying debt

Transaction

Interest rate swaps:
Receive / ﬂoating and pay/ ﬁxedMajor hedged item

Notional
amountMore than one
year

Fair value

Long-term debt,
including current
portion

¥

5,000

¥

5,000

(*)

49

50

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2014

Thousands of U.S. dollars

2014
Contract value
Method of hedge
accounting
Swap rates applied tounderlying debt

Transaction

Interest rate swaps:
Receive / ﬂoating and pay/ ﬁxedMajor hedged item

Notional
amountMore than one
year

Fair value

Long-term debt,
including current
portion$ 48,581$ 48,581(*)(*) 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 4.
22. 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:
Acrylic acids, acrylic ester, ethylene oxides, ethylene glycols, ethanolamine, higher-alcohol and glycol ether
Functional chemicals:Superabsorbent polymers, pharmaceutical intermediates, polymer for concrete admixture, electronic and information materials,
iodine, maleic anhydride, resins for adhesives and paints, plastic molded products and process adhesive products
Environment and catalysts:
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.

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(3) Information as to sales, income 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, 2014 and 2013 isoutlined as follows:Year ended March 31, 2014

Sales to third parties ………………

Basic
chemicals

Functional
chemicals

Environmentand catalysts

¥

¥

¥

Consolidated(Millions of yen)Amortization of goodwill …………

129,842
24,632
154,474
3,250
149,880
9,156–

Increases in property, plant andequipment and other assets ……

12,157Intragroup sales and transfers ……

Net sales …………………………
Segment income …………………

Total

Adjustments
andeliminations¥

Segment assets ……………………

Depreciation and amortization……

¥

146,857
2,980
149,837
8,239
189,052
7,934–¥

13,72425,437626
26,0632,044
26,010554–¥¥

302,136
28,238330,374
13,533364,942
17,644
–

228

¥

¥

26,109–(28,238)(28,238)
219
33,454
–
–

¥

¥

–

302,136–
302,136
13,752
398,396
17,644–
26,109Year ended March 31, 2013
Basic
chemicals
Sales to third parties ………………

Amortization of goodwill …………

113,862
20,132
133,994
2,097
134,056
8,634
468

¥

Increases in property, plant andequipment and other assets ……

13,334

Net sales …………………………
Segment assets ……………………

Depreciation and amortization……

Environmentand catalysts

Total

Adjustments
andeliminations

Consolidated(Millions of yen)

Intragroup sales and transfers ……
Segment income …………………

Functional
chemicals¥¥¥

137,0121,263
138,275
6,779
149,257
6,920
1

¥

¥

15,85818,646
1,649
20,295
1,431
23,742
556
–
350

¥

¥

269,520
23,044
292,564
10,307
307,055
16,110469¥¥

29,542–(23,044)(23,044)(273)
45,318–––¥¥269,520–
269,520
10,034352,373
16,110469
29,542

Year ended March 31, 2014
Basic
chemicals

Functional
chemicals

Environmentand catalysts$ 1,426,904
28,955
1,455,859$
80,052
1,836,883
77,089–$Amortization of goodwill …………

$ 1,261,582
239,3311,500,913$
31,5781,456,276
88,962–

Increases in property, plant andequipment and other assets ……

118,121

133,346

Sales to third parties ………………

Intragroup sales and transfers ……

Net sales …………………………
Segment income …………………
Segment assets ……………………

Depreciation and amortization……

Total

Adjustments
andeliminations

Consolidated(Thousands of U.S. dollars)$

247,153
6,082
253,235
19,860252,721
5,383–$ 2,935,639
274,368
3,210,007$ 131,490
3,545,880
171,434–

2,215

253,682$–(274,368)(274,368)$
2,128
325,049––$ 2,935,639–
2,935,639$ 133,618
3,870,929
171,434––

253,682

51

52

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2014

Note:

The adjustments in segment income 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:

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

(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, 2014
and 2013 are summarized as follows:
Millions of yen

2014
Japan

¥

Asia

159,211¥

Europe62,328¥Americas35,659¥Other

28,277¥

Total

16,661¥

302,136

Millions of yen

2013
Japan

¥

Asia

144,176¥

Europe54,519¥Americas39,038¥Other

21,376¥

Total

10,411¥

269,520

Thousands of U.S. dollars

2014
Japan

$

Asia

1,546,939$

Europe605,597$

Americas346,473

Other$ 274,747

$

Total

161,883$

2,935,639“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, 2014 and 2013 is summarized as follow:
Millions of yen

2014
Japan

¥

Asia

104,152¥

Europe32,623

Other

¥

4,373

¥

Total

10,990¥152,138

Millions of yen

2013
Japan

¥

Asia

100,631¥

Europe23,757

¥

Other

4,012

¥

Total

10,101¥

106,784$

138,501

Thousands of U.S. dollars

2014
Japan

$

1,011,970

Asia$

Europe316,974$

Other

42,489$Total

1,478,217

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(5) Information about loss on impairment
Millions of yen

2014
Reporting segments
Functional
chemicals

Basic chemicals
Loss onimpairment ………

¥

–

¥

Adjustments
andeliminations

Environment andcatalysts

394

¥

–

¥

Total

–

¥

394

Millions of yen

2013
Reporting segments
Functional
chemicals

Basic chemicals
Loss onimpairment ………

¥

–

¥

Adjustments
andeliminations

Environment andcatalysts

–

¥

–

¥

Total

89

¥

89

Thousands of U.S. dollars

2014
Reporting segments
Functional
chemicals

Basic chemicals
Loss onimpairment ………

$

–

$

3,828

Adjustments
andeliminations

Environment andcatalysts

$

–

$

Total

–

$

3,828

23. Related Party Transactions
Principal transactions between the Company and its related party for the years ended March 31, 2014 and 2013 are summarized
as follows:
2014
2013
2014
(Thousands of
U.S. dollars)(Millions of yen)

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

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

15,326
13,159¥The balances due from and to its related party at March 31, 2014 and 2013 were as follows:
2014

6,318
4,735

$

148,912
127,857

2014

2013

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

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

¥

5,593
3,678

¥

5,821
2,970

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.

$

54,34335,73653

54

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 201424. Subsequent Event
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, 2014, was approved at a shareholdersʼ meeting held on June 20, 2014:

Cash dividends (¥8.00 = $0.078 per share) ……………………………………………………

(Millions of yen)

¥

1,624

(Thousands of
U.S. dollars)$

15,779

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55

56

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2014

Corporate Data

NIPPON SHOKUBAI CO., LTD. (As of March 31, 2014)
Established: August 21, 1941
Common Stock (Paid in Capital): 25,038 million yen
Number of Shares Issued: 204,000,000 shares
Number of Shares Authorized: 636,000,000 shares
Number of Employees: : 3,955 (Consolidated)
2,029 (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: 10,827

Organization Chart (As of April 1, 2014)

DivisionInternal Audit Office
Corporate Planning
Health & Medical Business
Planning Office
General Administration & Personnel
Purchasing & Logistics
Finance & Accounting
Information Technology
Management Office
Investor & Public Relations Dept.
Responsible Care
Production
The Board

President
Corporate Managing
Committee

Engineering
ResearchResearch Planning & Development
Ethylene Oxide BusinessAcrylic BusinessSuperabsorbents Business
Performance Chemicals Business
Catalysis & Green Energy
Materials Business
Kawasaki Plant
Himeji Plant
Suita Plant

AuditorBoard of Auditors

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Major Shareholders (As of March 31, 2014)

Name

Sumitomo Chemical Company, Limited
JX Holdings, Inc.
Japan Trustee Services Bank, Ltd.
(Trust Account)
The Master Trust Bank of Japan, Ltd.
(Trust Account)
Resona Bank, Limited.
National Mutual Insurance Federation ofAgricultural Cooperatives
Sanyo Chemical Industries, Ltd.
Mizuho Bank, Ltd.
TOYO INK SC HOLDINGS CO., LTD.
NIPPONKOA INSURANCE CO., LTD.
(Note 1)
(Note 2)
(Note 3)

Number of Shares
Owned(thousand shares)

Ratio of capital
Contribution(%)

19,484
10,645

9.59
5.24

8,339

4.10

8,142

4.01

6,867

3.38

6,540

3.22

6,338
4,744
4,522
2,781

3.12
2.33
2.22
1.37

Individuals, others,
11.3%

Financial
Institutions
32.5%

Stock Brokers
0.6%

Foreign
Institutions,
etc,
24.8%
Other Corporate
Shareholders
30.8%

Other than the above, the Company holds 1,033 thousand shares as treasury stock.
Treasury stock is excluded from the calculation for “Shareholding Ratio of the Total Shares Outstanding” above.
Figures in “Number of Shares Owned” and “Shareholding Ratio of the Total Shares Outstanding” are truncated.

Share Price and Turnover (April 2013- March 2014)
Share Price(¥)

1,300
1‚200
1‚100
1,000
900
800
700
Trading volume(thousand shares)

40‚00030‚00020‚00010‚000
0

4

2013

5

6

7

8

9

10

11

12

1

2014

2

3

57

58

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2014

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, andphoto/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 tape 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

NIPPON POLYESTER CO., LTD.

2-8-33 Shibata, Kita-ku, Osaka 530-0012 Japan
TEL +81-6-6372-4551 FAX +81-6-6376-2079
Principle Business: Manufacture and sale of plastic products for construction, housing, and so on

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 and anti-freeze

NIHON JYORYU KOGYO CO., LTD

9-1 Koutani Shinmachi, Ichikawa, Chiba 272-0011 Japan
TEL +81-47-328-1185 FAX +81-47-328-1189
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 emulsions

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

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

Consolidated
Financial
Highlights

Messages fromPresident

Special Feature

Description ofBusiness

Governance
SystemCSR Based on
Responsible
Care Concept

Ten-Years
Summary

Management
Discussion
and Analysis ofOperation

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

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

Financial
Statements

Corporate Data

Overseas
NA 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 acidNIPPON 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

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 acrylic acid, acrylic esters and super absorbent polymers

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

27F One IFC, 10, Gukjegeumyung-ro, Yeongdeungpo-gu, Seoul 150-876, 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

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

Umicore Shokubai S.A.

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

59

60

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2014

Directory
Management
Member of the Board, President
Masanori Ikeda
Member of the Board,
Senior Managing Executive Ofﬁcer
Yosuke Ogata
Yasuhito Nishii
Haruhisa Yamamoto
Member of the Board,
Managing Executive Ofﬁcer
Masao Yamamoto
Yojiro Takahashi

Member of the Board
Koichi Miura
Takashi Sakai
Statutory Corporate Auditor
Shin-ichi Uchida
Masakazu Onishi
Kozo Arao
Akira Omachi

Executive Ofﬁcer
Kenji Rakutani
Nobuyuki Harada
Takumi Hatsuda
Kin-ya Nagasuna
Yujiro Goto
Masaya Yoshida
Kazukiyo Arakawa

Managing Executive Ofﬁcer
Hidetaka Yatagai
Koichiro Yamada

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

Overseas Ofﬁces
・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)

・Korea Ofﬁce
4F SH Energy Bldg., 26,
Hwangsaeul-ro 200beon-gil,
Bundang-gu, Seongnam-si,
Gyeonggi-Do, 463-825 Korea
TEL +82-31-718-9111
FAX +82-31-718-9693
Research Centers

・Suita Research Centerand Suita Plant
5-8 Nishi Otabi-cho, Suita, Osaka
564-8512 Japan
TEL +81-6-6317-2202 (Plant)+81-6-6317-2251(Research Center)・Tsukuba Research Center
1-25-12 Kannondai, Tsukuba, Ibaraki
305-0856 Japan
TEL +81-29-838-2561

・Strategic Technology ResearchCenter(Suita, Himeji,Tsukuba)
・Advanced Materials ResearchCenter(Suita, Himeji)
・GSC Catalysts Technology
Research Center(Himeji, Kawasaki)・Superabsorbents ResearchCenter(Himeji)
・Fine & Specialty Chemicals
Research Center(Suita)
・E&I & Performance Materials
Research Center(Suita, Himeji Tsukuba)
・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