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

Annual Report

2016

B

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2016

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
03 Special Feature
04 Description of Business
06 Governance System

Based on Responsible Care
09 CSR
Concept
10 Ten-Years Summary
Discussion and
12 Management
Analysis of Operation
16 Financial Statements
52 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

323,124¥¥

million

31,234
million13.8% Down

19.5% Up
Total assets

407,997¥
Net assets¥

282,485

millionROA

2.8% Down

8.3%

million

1.0points Up

4.6% Up

Decrease in sales of basic
chemicals and functional
chemicals
increase in sales of environmentand catalyst segment

In environment andcatalyst segment,
decrease in sales
for process catalysts
while automobile
catalyst and fuel cellmaterials up

Decrease in sales of basic
chemicals due to lower sales
volume, in addition to lower
selling prices caused by adecrease in costs of raw
materials and a decline inoverseas product market
conditions

Decreases in processing
costs and selling, generaland administrative expenses,
increased production andsales volume, and an
expanded raw materials /selling price spreadIn functional chemicals, althoughsales volume increased primarily
in superabsorbent polymers, sales
decreased due to factors such as adecrease in selling prices in line with adecline in costs of raw materials and theexclusion of NIPPON POLYESTER CO.,LTD from the scope of consolidation.

Foreign exchange income
and loss worsened, andtechnology license-related
expenses increased
increase in share of proﬁtof entities accounted forusing equity method

Improvement in
extraordinary proﬁt/loss(recording of gain on salesof shares of subsidiaries
and associates, decreasein impairment loss, etc.),
decrease in income taxes

01

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NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2016

Messages from President

In fiscal 2015, Nippon Shokubai Group steadily proceeded its long-term businessplan 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). In fiscal 2016,
the final year of the current medium-term business plan, we will demonstrate oursteady efforts to address our important issues based on basic business investment
strategies. Also, we will define the following medium-term business plan for thelast four years of the period (fiscal 2017 to 2020).
We reconfirm our intention to follow our corporate credo: “Safety takes
priority over production,” endeavor to keep safe and stable operation in order
to become “A company gaining further public trust as a responsible chemicalcompany.” By delivering our product with confidence and pride, and by
developing new products that meet market needs, we practice our group mission- Providing affluence and comfort to people and“society, with our unique technology.”
We will strive as a team to achieve the “Reborn Nippon Shokubai”—a company*that everybody can be proud of.
President

Masanori Ikeda*1. A company that promotes work safety and peace of mind
2. ‌A company that rewards people who make their best efforts and achieve results
3. A company that people can be proud to work forConsolidated
Financial
Highlights

Messages fromPresident

Description ofSpecial Feature BusinessGovernance
SystemCSR Based on
Responsible
Care Concept

Management
Discussion
and Analysis ofOperation

Ten-Years
Summary

Financial
Statements

Corporate Data

Special Feature

Long-term Business Plan
"Reborn Nippon Shokubai 2020"
Nippon Shokubai started its long-term business plan for the ﬁscal years 2014 to 2020, entitled “Reborn Nippon
Shokubai 2020.”
We reconﬁrm our intention to follow our corporate credo: “Safety takes priority over production,” and we aremaking every effort to implement the preventive/corrective measures learned from the accident that occurredat the Himeji Plant in 2012. We believe that only through these actions will we be able to regain the conﬁdenceof stake holders as a chemical company.

Mission/Management Commitment

Nippon Shokubai Group Mission
Providing afﬂuence and comfort to people and society, with ourunique 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 withthe environment.
We pursue technologies that will create the future.
We act on the global stage.

Corporate Credo

Safety takes priority overproduction.

“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 core businesses,establishing new businesses assoon as possible, and launching new products to the market
quickly.
Management Indexes and Numerical Targets （Unit:Billion yen）
Sales Ordinary Income
FY2020 target figures 500.0
50.0

9.5%

FY2016 target figures 393.0

8.5%

Sales
（Billion yen）

Sales
Ordinary Income
ROA（%）

500.0
400.0
300.0

34.0

393.0

374.9
323.1
29.9

8.3

34.3

9.5

8.5
34.0

0

500.0
50.0

Ordinary Income（Billion yen）

50.0
40.0
30.0
20.0

200.0
100.0

ROA

7.3

FY2014
Results

10.0
FY2015Results

FY2016
mid-term target

0
FY2020lomg-term target

03

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NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2016

Description of Business

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

Basic Chemicals
Sales of acrylic acids and acrylates
decreased. In Japan, sales prices
dropped in line with declining raw
materials prices, while overseas, against
the backdrop of global oversupply, sales
prices fell following a decline in market
price in Southeast Asia, and sales
volume decreased.
Sales of ethylene oxide decreased
due to declining sales prices owing to
the drop in raw materials prices and adecrease in sales volume.
Sales of ethylene glycol decreased
due to declining overseas market
conditions, although sales volumes inexports increased.
Sales of ethanolamine andsecondary alcohol ethoxylates increasedin volume, but sales decreased due todeclining sales prices owing to the drop
in raw materials prices.
As a result of the above, net sales in•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 ofBusinessthe basic chemicals segment decreased
20.5% year-on-year to 117,643 million yen.
Operating income rose 13.2% year-

Governance
SystemCSR Based on
Responsible
Care Concept

Ten-Years
Summary

on-year to 8,851 million yen. This wason account of an expanded spreadin certain products and a decline in

Functional Chemicals
Sales of superabsorbent polymers fell
due to declining sales prices owing
to the drop in raw materials prices,
although they increased in sales volume.
Sales of resin modiﬁers andelectronics information materials
increased on the back of growing sales
volumes.
Sales of special acrylates increasedin sales volume, but sales decreased
due to declining sales prices owing to
the drop in raw materials prices anddeclining overseas market conditions.
Sales of ethyleneimine derivatives
increased as the sales volume increased
as well as the effects of the sales pricerevision.
Sales of maleic anhydride fell due toa decrease in sales volume, in addition
to declining sales prices owing to thedrop in raw materials prices.
Sales of polymers for concrete
admixture, water-soluble polymers for
raw materials of detergents, resins forpaints, processed adhesive products andiodine compounds fell due to a decline insales volumes.
As a result of the above and theexclusion of NIPPON POLYESTER CO.,LTD. from the scope of consolidation,
net sales in the functional chemicals
segment dropped 11.5% year-on-year to177,798 million yen.
Operating income increased 23.9%
year-on-year to 21,422 million yen.
Despite the compression of spread, theincreased sales volume and decreased
processing costs and selling, general,and administrative expenses contributed
to this result.

Environment & Catalysts
Sales of automotive catalysts increased
due to higher sales volume and productmix.
Sales of De-NOx catalysts, dioxins
decomposition catalysts, catalysts
for exhaust gas treatment, fuel cellmaterials and materials for lithiumion batteries increased on higher sales
volumes.
Sales of process catalysts
decreased as the sales volume declined

due to encountering a drop-off period for
replacement demand.
Sales of wet oxidation catalysts fell
due to decreased sales volumes.
As a result, sales in the environment& catalysts segment rose 6.8% year-onyear to 27,683 million yen.
Operating income decreased 51.5%
year-on-year to 620 million yen, owing
to decline in sales volumes of processcatalysts.

Management
Discussion
and Analysis ofOperation

Financial
Statements

Corporate Data

processing costs, and other factors,
despite a decrease in production andsales volume.

05

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2016

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(as of April 2016)

General Meeting of Shareholders

Board ofAuditors
Reports

Board of Directors

AuditsBoard of directors: 8 members in total(6 internal, 2 external)

Auditors:
4 in total(2 internal,
2 external)▲

President
ProvidessupportAccounting
Auditors

Collaborates

06

AuditsCorporate Managing
Committee

Legal
Advisors

Risk Management
Committee
CSR Management Committee

Collaborates

RC Promotion Committee

Auditor OfficeCompliance Committee
Internal Control Committee
Executive Officers

Internal
Audit OfficeInternal
audit

Administration &Finance

Sales &
MarketingResearch &Development

Production &Technology

Consultation

Consolidated
Financial
Highlights

Messages fromPresident

Special Feature

Description ofBusiness

Governance
SystemBoard of Directors
Supervises the execution of duties of each director andreports, deliberates on, and resolves matters related to
execution of duties. In general, the board of directors
convenes monthly.

Corporate 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.

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

CSR Based on
Responsible
Care Concept

Ten-Years
Summary

Management
Discussion
and Analysis ofOperation

Financial
Statements

Corporate Data

CSR Management 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.

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.

Risk Management Committee

Internal Control Committee

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

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.

07

08

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2016

Outside Members of the Board and Outside Corporate Auditors

Koichi Miura(Outside Member of the Board)
Mr. Koichi Miura attended 12 of the 13 meetings of the Board that were held during the ﬁscal year 2015. From his viewpoint as a
specialist in chemical engineering who is familiar with the chemical industry, he provides useful advice concerning the Companyʼs
management and supervises the Companyʼs management from an independent perspective.

Takashi Sakai(Outside Member of the Board)
Mr. Takashi Sakai attended all 13 meetings of the Board that were held during the ﬁscal year 2015. Due to his experience as
an executive of a company that is a manufacturer and has a strong commitment to public interest, he provides useful advice
concerning the Companyʼs management and supervises the Companyʼs management from an independent perspective.

Kozo Arao(Outside Corporate Auditor)
Mr. Kozo Arao attended all 13 meetings of the Board that were held during the ﬁscal year 2015. At these meetings, 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 2015, exchanged opinionswith respect to the results of audits and discussed important issues regarding such audits. Furthermore, he periodicallyexchanged opinions with the senior management.

Kunimitsu Oba(Outside Corporate Auditor)
Mr. Kunimitsu Oba attended 9 of the 10 meetings of the Board that were held during the ﬁscal year 2015 following his election asa Corporate Auditor. At these meetings, he provides his views from the perspective of a corporate executive as required.
Mr. Oba also attended 9 of the 10 meetings of the Corporate Auditors that were held during the ﬁscal year 2015 following hiselection as a Corporate Auditor, exchanged opinions with respect to the results of audits and discussed important issues
regarding such audits. Furthermore, he periodically exchanged 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 the Nippon Shokubai Group mission, Management commitment , Corporate credo and the Nippon Shokubai
Code of Conduct, we rank it as an important management measure to provide products and technologies that contribute tosociety and environmental protection. In addition, while paying due respect to the principle of Sustainable Development, weare determined to conduct all activities in accordance with the following policy related to environmental protection, safety andproduct quality that will bring our business operations into harmony with the global environment.
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.
We will implement this RC Policy in all our business operations by ensuring all employees have a thorough understanding andawareness of its importance. The president shall be the person with the ultimate responsibility for implementing this policy.

09

10

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2016

Ten-Years Summary

FY2006

FY2007

FY2008¥266,513
19,42913,988¥302,669
18,37911,875¥289,102622-5,307

323,675
179,368

352,783
175,634

302,948
151,662

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

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

17,613-16,675
8,099
29,45064.91
947.3416.0¥ -29.61
831.11
15.5

54.1
8.2
7.4
146
16.98
21.4

48.6
6.9
6.1
150
10.18
24.6

48.8
-3.3
0.2
159
−
−

117
50,000
1,272
1,503
1,152

114.3861,400
661
1,316
626

100.5858,900622
866
442

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
Earnings per share .......................................................................................................
Net assets .....................................................................................................................
Cash dividends..............................................................................................................
Shareholders' equity ratio (%) .....................................................................................
ROE (%) ........................................................................................................................
ROA (%) ........................................................................................................................
Liquidity ratio (%) .........................................................................................................
PER (%) ........................................................................................................................
Dividend payout ratio (%) .............................................................................................

¥

74.92
948.3416.0¥

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

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

Consolidated
Financial
Highlights

Messages fromPresident

FY2009Special Feature

FY2010Description ofBusiness

FY2011Governance
SystemCSR Based on
Responsible
Care Concept

FY2012

Ten-Years
Summary

FY2013

Management
Discussion
and Analysis ofOperation

FY2014

Financial
Statements

FY2015(Millions of yen)

Corporate Data

FY2015(Millions of U.S. dollars)¥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¥374,873
26,13319,089¥323,124
31,23426,003$2,868277
231

310,946
163,781329,332
194,266

356,407
209,070

352,373
220,248

398,396
242,193419,634
270,128

407,997
282,485

3,621
2,507

44,346-23,850-21,772
28,23431,706-16,696-3,05039,17443,857-21,747-9,67150,812

27,322-31,87881
47,801

16,992-25,141-2,51939,61932,697-18,941-10,237
44,33653,264-12,963-20,01264,055

473
-115
-178
568

60.85
898.3314.0¥ 110.30
938.6722.0¥ 104.71
1,006.48
22.0¥ 41.38
1,059.85
16.0¥ 51.74
1,164.10
16.0¥ 94.06
1,307.13
24.0¥ 640.69
6,870.84
150.0

51.4
7.0
4.9
155
13.89
23.0

57.9
12.1
9.7
197
9.45
19.9

57.3
10.8
9.7
174
9.16
21.0

61.1
4.0
3.9
189
19.94
38.7

59.3
4.7
4.4
168
23.56
30.9

63.2
7.6
7.3
205
18.74
25.5

68.3
9.6
8.3
241
8.94
23.4

−
−
−
−
−
−

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
1,219
1,286
791

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

120.1442,800
5,730
−
−

−
380.0
50.9
−
−

¥

$

5.7
61.0
1.3

Notes: Conversions into USD are just for indication only. The exchange rate is the rate at March 31, 2015. (¥120.17 / $1.00) Figures are rounded off.

11

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NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2016

Management Discussion and Analysis of Operation

Fiscal 2015 Performance
The global economy in the current ﬁscal year saw theUnited States economy continue to recover and the situationin Europe also began to come out of its slump, but adeceleration continued in the Asian emerging countries,
including China and resource-rich countries.
As for the Japanese economy, although there weretrends such as the yen appreciation and the drop in stock

prices in the beginning of the year, the country saw amoderate recovery trend due to steady corporate businessresults and employment conditions.
In the chemicals industry, the future outlook remains
unclear due to factors such as a slowdown in the exports to
Asia and sharp ﬂuctuations in raw material prices.

Segment Sales(¥billion)

8.6%
27.7
117.6

36.4%

Total
323.1
55.0%

177.8

■ Basic Chemicals■ Functional Chemicals■ Environment & Catalysts

Consolidated
Financial
Highlights

Messages fromPresident

Special Feature

Description ofBusiness

CSR Based on
Responsible
Care Concept

Governance
SystemManagement
Discussion
and Analysis ofOperation

Ten-Years
Summary

Financial
Statements

Corporate Data

Financial position
Under these conditions, the Groupʼs consolidated net sales
dropped 13.8% year-on-year, to 323,124 million yen (-51,749
million yen) in the current ﬁscal year. Factors contributing
to this result included drop in sales prices due to declines
in raw material prices and overseas market conditions,decreasing sales volume in certain products and theexclusion of NIPPON POLYESTER CO., LTD. from the scopeof consolidation following the transfer of all of its shares
during the current ﬁscal year.
With regard to proﬁts, operating income increased
19.5% year-on-year to 31,234 million yen (+5,101 millionyen). Contributing to this result were decreased ﬁxed
costs including processing costs, and selling, general, andadministrative expenses, as well as increased production
and sales volume.

Non-operating income decreased 700 million yen due todeterioration in foreign exchange gains/losses and increased
technology transfer study related expenses, although shareof proﬁt of entities accounted for using equity method
increased. As a result, ordinary income rose 14.7% year-onyear to 34,342 million yen (+4,401 million yen).
Extraordinary income and losses improved year-on-year
by 1,232 million yen. The main contributing factors for thiswere a recording of gain on sales of shares of subsidiaries
and associates, and the elimination of impairment loss thatwas recorded in the previous ﬁscal year. As a result, proﬁt
attributable to owners of parent rose 36.2% year-on-year to
26,003 million yen (+6,914 million yen).
The Company achieved new record highs in operating
income, ordinary income and proﬁt attributable to owners ofparent for the current ﬁscal year.

Shareholdersʼ Equity and Total Assets(¥billion)

419.6

398.4

400

408.0

352.4

265.3
215.1

278.8

236.3

200

0
FY2012FY2013

FY2014FY2015■ Shareholders’ Equity■ Total Assets

13

14

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2016

Cash Flows
Cash and cash equivalents at the end of the current
consolidated ﬁscal year (hereinafter the current ﬁscal year)
increased by 19,719 million yen over the end of the previous
ﬁscal year to 64,055 million yen, as cash ﬂow provided byoperating activities exceeded cash ﬂow used in investing
activities (capital investment, etc.), and cash ﬂow used inﬁnancing activities (a decrease in short-term loans payable,
repayments of long-term loans payable, etc.).
Net cash provided by operating activities totaled 53,264
million yen (compared to 32,697 million yen provided in theprevious ﬁscal year). This was due to an increase of 20,568
million yen from the previous ﬁscal year as a result of adecrease in notes and accounts receivable - trade owing
to declined sales prices per purchase and an increase inincome before income taxes.
Net cash used in investing activities totaled 12,963
million yen (compared to 18,941 million yen used in theprevious ﬁscal year). This was due to a decline of 5,978
million yen in outﬂows from the previous ﬁscal year asa result of decrease in purchase of property, plant andequipment including capital investments and a decrease in
the purchase of shares of subsidiaries and associates aswell as the purchase of investment securities, in spite ofa decrease in proceeds from sales of property, plant andequipment, due to sales of land in the previous ﬁscal year
which were not recorded in the current ﬁscal year.
Net cash used in ﬁnancing activities totaled 20,012
million yen (compared to 10,237 million yen used in theprevious ﬁscal year). Although redemption of bonds recordedin the previous ﬁscal year was not recognized for the current
ﬁscal year, a decrease in short-term loans payable and adecrease in proceeds from long-term loans payable resulted
in an increase of 9,775 million yen in outﬂows.

■ Operating activity■ Investments activity■ Free cash flows

Cash Flows(¥billion)

53.0
50
40.3

40
30

32.7
27.3

20

17.0

13.8

10
0
-4.6

-10

-8.1
-13.0

-20

-18.9
-25.1

-30
-40

-31.9
FY2012FY2013

FY2014FY2015

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and Analysis ofOperation

Financial
Statements

Corporate Data

Basic Policy on the Distribution of Proﬁts, and Dividends
Nippon Shokubai has positioned the return of proﬁts toshareholders as the most important management task,and, in consideration of the dividend payout ratio, distributes
dividends under a basic policy of aiming to improve mediumto long-term dividend levels in line with projected trends
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 consider stock buybacks as one of theoptions to raise the value per share.
The Company will continue to distribute proﬁts by taking
into careful consideration a balance between the criticalneed to maintain competitiveness and continue growth into
the future by aggressively investing in equipment, 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 the end of
the interim period and once at the end of the ﬁscal year.
Based on the above basic policy, the Company plans to pay a
year-end dividend of 85 yen (ordinary dividend of 75 yen andcommemorative dividend of 10 yen for the Companyʼs 75th
anniversary) per share for the record-high FY 2015 earnings,
taking into consideration the business environment, earnings
results and future prospects for business growth. The
Company conducted a reverse stock split at a ratio of one
share for every ﬁve shares on October 1, 2015. As a result,based on the calculation factoring in the reverse stock split,
annual dividends will total 150 yen per share, which will be arecord high, for a consolidated payout ratio of 23.4%.
For FY 2016, annual dividends are scheduled to be 150 yen(interim dividends of 75 yen and year-end dividends of 75yen) by incorporating the commemorative dividend of 10 yen
from FY 2015 into ordinary dividends.

Fiscal 2016 Outlook
The outlook for the Japanese economy is increasingly uncertain
due to such factors as yen appreciation and low stock prices,and trend in crude oil prices since the beginning of the year, in
addition to the stagnant demand both in Japan and overseas.
While the European economy is expected to be strong, theU.S. economy lacks vigor and a deceleration continues in
Asian emerging countries including China and resource-richcountries. Thus, the corporate management environment
surrounding the Company is expected to be unpredictable.
Under such conditions, projected earnings in the nextﬁscal year are based on exchange rates of 115 yen to the U.S.
dollar and 125 yen to the euro, and naphtha prices of 38,000
yen/kl. Although sales volumes are projected to increase
centered around functional chemicals, sales prices are
expected to decrease due to lower raw material prices andoverseas market conditions. We therefore forecast consolidated

net sales to decrease by 7.2% to 300,000 million yen (-23,124
million yen), with 147,000 million yen in the ﬁrst half.
With regard to proﬁts, although the Company projections
incorporate the expected effect of higher production and sales
volumes and decrease in processing costs, a contraction in
spread will lead to a decrease in operating income by 29.6%, to22,000 million yen (-9,234 million yen), with 8,000 million yen
in the ﬁrst half. The Company projects a decrease in ordinary
income by 27.2%, to 25,000 million yen (-9,342 million yen), with
9,500 million yen in the ﬁrst half, assuming a non-operating
income and expenses on par with the current ﬁscal year due tofactors such as elimination of foreign exchange losses despitea decrease in share of proﬁt of entities accounted for using
equity method, as well as a decrease in proﬁt attributable toowners of parent by 26.9%, to 19,000 million yen (-7,003 millionyen), with 7,500 million yen in the ﬁrst half.

15

16

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2016

Financial Statements
Consolidated Balance Sheet

Nippon Shokubai Co., Ltd. and Consolidated Subsidiaries

March 31,
2015

2016
AssetsCurrent assets:
Cash and cash equivalents (Note 3) …………………………………

Time deposits (Notes 3 and 7) ………………………………………

Notes and accounts receivable (Note 3) :Unconsolidated subsidiaries and afﬁliates …………………………
Trade ………………………………………………………………
Allowance for doubtful accounts …………………………………

Inventories (Note 5) …………………………………………………
Deferred income taxes (Note 9)……………………………………

Other current assets …………………………………………………

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

Property, plant and equipment, at cost (Notes 6, 7 and 21) :Land ………………………………………………………………………
Buildings and structures ………………………………………………

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

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

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

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

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

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

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

Total assets ………………………………………………………………

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

(Millions of yen)¥¥

64,055
5,117

2016

¥

44,336
4,919$

568,468
45,412

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

7,089
67,067(235)
56,303
3,706
13,362
196,547

69,604
506,683(160)
434,922
28,55983,1291,736,617

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

31,68098,318366,9822,250
696(350,279)
149,647

293,610873,0483,235,605
70,2085,467(3,177,015)
1,300,923

30,31823,851
1,341
3,529
6,688
65,727

34,797
23,973
1,995
5,476
7,199
73,440269,063
211,670
11,90131,31959,354583,307419,634$ 3,620,847

407,997¥

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Corporate Data

Nippon Shokubai Co., Ltd. and Consolidated Subsidiaries

March 31,
2015

2016
Liabilities and Net Assets
Current liabilities:
Short-term bank loans (Notes 3 and 7) ………………………………
Current portion of long-term debt (Notes 3 and 7)¥

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

Trade ……………………………………………………………………

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

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

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

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

Total current liabilities ……………………………………………………
Long-term liabilities:
Long-term debt (Notes 3 and 7) ………………………………………
Lease obligations (Note 7)(Thousands of U.S. dollars)(Note 2)

(Millions of yen)…………………

……………………………………………

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

Other ……………………………………………………………………

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

13,186
8,195

2016

¥

22,071
7,685$

117,02272,7286,350
32,960
25
4,507
3,273
188
2,436
9,934
81,054

5,962
41,553
28
4,839
3,075
152
2,485
8,177
96,02756,354
292,510
222
39,99829,047
1,668
21,61988,161
719,329

29,166
108
1,628
12,568989
44,45936,910149
3,607
11,755
1,058
53,479258,839
958
14,448111,537
8,778
394,560

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

25,03822,083
195,497(956)
241,662

222,204
198,749
1,918,912(8,963)2,330,902

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

10,652
13,09527(162)
23,612
4,854
270,128
419,634

67,572
101,828142(25,879)
143,663
32,3932,506,958$ 3,620,847

Contingent liabilities (Note 18)
Net assets:
Shareholdersʼ equity (Note 11) :Common stock:
Authorized – 127,200,000 shares in 2016 and 636,000,000 shares in 2015
Issued – 40,800,000 shares in 2016 and 204,000,000 shares in 2015 …
Capital surplus…………………………………………………………
Retained earnings ……………………………………………………

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

Total shareholdersʼ equity ………………………………………………
Accumulated other comprehensive income (loss):
Net unrealized holding gain on securities
Translation adjustments
Net unrealized deferred gain on hedges
Retirement beneﬁt liability adjustments
Total accumulated other comprehensive income, net
Non-controlling interests
Total net assets
Total liabilities and net assets

See accompanying notes to consolidated ﬁnancial statements.

¥

¥

17

18

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2016

Consolidated Statement of Income

Nippon Shokubai Co., Ltd. and Consolidated Subsidiaries

Year ended March 31,
2015

2016

Net sales (Note 21) ………………………………………………………

¥

Gross proﬁt …………………………………………………………

Selling, general and administrative expenses (Note 12) ………………
Operating income (Note 21) ………………………………………

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, plant and equipment(Notes 6 and 21) …………………………………………………………
Loss on reduction of non-current assets ………………………………

Rent income from real estate …………………………………………
Foreign exchange losses, net …………………………………………
Licensing of technology expenses ……………………………………

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

Loss on disposal of property, plant and equipment …………………
Loss on discontinued operations (Note 13) ……………………………

Gain on sales of investment in a subsidiary (Note 14) ………………

Other, net ………………………………………………………………
Proﬁt before income taxes …………………………………………

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

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

See accompanying notes to consolidated ﬁnancial statements.

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

(Millions of yen)

Cost of sales (Note 12)¥323,124
253,123
70,001

2016

374,873309,135
65,738$ 2,867,625
2,246,388
621,237

38,767
31,23439,605
26,133344,045
277,192

1,252
(440)
350
2,458

1,100
(602)
1,198
1,259

11,111(3,905)
3,106
21,814

–
(292)
1,176
(1,270)
(592)
318
(36)
–
620
210
34,988

(477)
–
1,129
–
(6)
–
(463)
(151)
–
235
29,355–(2,591)
10,437(11,271)(5,254)
2,822
(319)
–
5,502
1,864
310,508

7,430
1,445
8,875
26,113(110)
26,0038,333
1,752
10,085
19,270(181)
19,08965,93912,82478,763
231,745(976)
230,769¥¥$

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Corporate Data

Consolidated Statement of Comprehensive Income

Nippon Shokubai Co., Ltd. and Consolidated Subsidiaries

Year ended March 31,
2015

2016

Proﬁt ………………………………………………………………………

¥

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

Net unrealized deferred (loss) gain on hedges ………………………
Translation adjustments ………………………………………………

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

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

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

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

¥

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

See accompanying notes to consolidated ﬁnancial statements.

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

(Millions of yen)

Other comprehensive income (loss) (Note 16)

26,1132016¥

19,270$231,745(3,046)(11)(843)(2,777)

6,211
18
5,786
918

(27,032)(98)(7,481)(24,645)(765)(7,442)
18,671

1,058
13,99133,261(6,789)(66,045)
165,700

18,57992¥¥

32,863398$$

164,884
816

19

20

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2016

Consolidated Statement of Changes in Net Assets

Nippon Shokubai Co., Ltd. and Consolidated Subsidiaries

Shareholdersʼ equity
Commonstock

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

Balance at April 1, 2014,
as originally reported ………………

¥

25,038¥22,083¥ 180,240¥(924) ¥ 226,437

Cumulative effect of change inaccounting policy ……………………

–

–

25

–

25

Balance at April 1, 2014,as adjusted …………………………

25,03822,083

180,265(924)

226,462

Disposal of treasury stock …………

–
–
–
–

–
–
–
–

(3,857)
19,089
–
–

–
–
(32)
–

(3,857)
19,089(32)–

Change in equity resulting from transaction
with non-controlling shareholders ……

–

–

–

–

–

–
–
25,038––22,083–
15,232¥ 195,497

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

Proﬁt attributable to owners of parent …

Purchases of treasury stock ………

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

Total changes during the year ……

Balance at March 31, 2015 …………

¥

¥

¥

–
–
(32)
15,200(956) ¥ 241,662

Accumulated other comprehensive income (loss)
Net
unrealized
holding gain
on securities

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

Noncontrollinginterests

Total net
assets

¥5,919¥ 242,193(Millions of yen)

Balance at April 1, 2014,
as originally reported ………………

¥

4,454

¥

6,344

¥

9

¥

(970) ¥

9,837

Cumulative effect of change inaccounting policy ……………………

–

–

–

–

–

–

25

Balance at April 1, 2014,as adjusted …………………………

4,454

6,344

9

(970)

9,837

5,919

242,218

Disposal of treasury stock …………

–
–
–
–

–
–
–
–

–
–
–
–

–
–
–
–

–
–
–
–

–
–
–
–

(3,857)
19,089(32)–

Change in equity resulting from transaction
with non-controlling shareholders ……

–

–

–

–

–

–

–

6,198
6,198
10,652

6,751
6,751
13,095

18
18
27

808
808
(162) ¥

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

Proﬁt attributable to owners of parent …

Purchases of treasury stock ………

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

Total changes during the year ……
Balance at March 31, 2015 …………

¥

¥

¥

¥

13,775
13,77523,612¥(1,065)
12,710(1,065)27,9104,854 ¥ 270,128

Consolidated
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CSR Based on
Responsible
Care Concept

Governance
SystemManagement
Discussion
and Analysis ofOperation

Ten-Years
Summary

Financial
Statements

Corporate Data

Nippon Shokubai Co., Ltd. and Consolidated Subsidiaries

Shareholdersʼ equity
Commonstock

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

25,03822,083

195,497(956)

241,662

Disposal of treasury stock …………

–
–
–
–

–
–
–
0

(5,277)26,003
–
–

–
–
(54)
0

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

–

312

–

–

312

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

Balance at April 1, 2015 ……………
Changes during the year:
Cash dividends ……………………

Proﬁt attributable to owners of parent …

Purchases of treasury stock ………

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

Total changes during the year ……

Balance at March 31, 2016 …………

¥

¥

¥

–
–
(54)
20,984(1,010) ¥ 262,646

Accumulated other comprehensive income (loss)
Net
unrealized
holding gain
on securities

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

Noncontrollinginterests

Total net
assets(Millions of yen)

10,652

13,09527(162)

23,612

4,854

270,128

Disposal of treasury stock …………

–
–
–
–

–
–
–
–

–
–
–
–

–
–
–
–

–
–
–
–

–
–
–
–

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

–

–

–

–

–

–

312

(3,038)(3,038)7,614 ¥

(1,621)(1,621)
11,474 ¥

(11)
(11)
16 ¥

(2,754)(2,754)(2,916) ¥(7,424)(7,424)
16,188 ¥Balance at April 1, 2015 ……………
Changes during the year:
Cash dividends ……………………
Proﬁt attributable to owners of parent …

Purchases of treasury stock ………

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

Total changes during the year ……

Balance at March 31, 2016 …………

¥

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

21

22

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2016

Nippon Shokubai Co., Ltd. and Consolidated Subsidiaries

Shareholdersʼ equity
Less treasury
Total
stock,
shareholdersʼ
at costequityCommonstock

CapitalsurplusRetainedearnings

222,204

195,980

1,734,975(8,484)2,144,675

Disposal of treasury stock …………

–
–
–
–

–
–
–
0

(46,832)
230,769
–
–

–
–
(479)
0

(46,832)
230,769(479)
0Change in equity resulting from transaction
with non-controlling shareholders ……

–

2,769

–

–

2,769

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

Balance at April 1, 2015 ……………
Changes during the year:
Cash dividends ……………………

Proﬁt attributable to owners of parent …

Purchases of treasury stock ………

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

–
–
–
–
2,769
183,937
Balance at March 31, 2016 ………… $ 222,204 $ 198,749 $ 1,918,912 $Total changes during the year ……

–
–
(479)
186,227(8,963) $ 2,330,902

Accumulated other comprehensive income (loss)
Net
unrealized
holding gain
on securities

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

Noncontrollinginterests

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

94,533

116,214240(1,438)

209,549

43,0782,397,302

Disposal of treasury stock …………

–
–
–
–

–
–
–
–

–
–
–
–

–
–
–
–

–
–
–
–

–
–
–
–

(46,832)
230,769(479)
0Change in equity resulting from transaction
with non-controlling shareholders ……

–

–

–

–

–

–

2,769

Balance at April 1, 2015 ……………
Changes during the year:
Cash dividends ……………………
Proﬁt attributable to owners of parent …

Purchases of treasury stock ………

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

Total changes during the year ……

Balance at March 31, 2016 ………… $(26,961)(14,386)(26,961)(14,386)
67,572 $ 101,828 $See accompanying notes to consolidated ﬁnancial statements.

(98)
(98)
142 $

(24,441)(65,886)(24,441)(65,886)(25,879) $ 143,663 $(10,685)(76,571)(10,685)
109,656
32,393 $ 2,506,958

Consolidated
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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

Consolidated Statement of Cash Flows

Nippon Shokubai Co., Ltd. and Consolidated Subsidiaries

Year ended March 31,
2015

2016

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

(Millions of yen)

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

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

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

Loss on reduction of non-current assets ………………………………
Loss on impairment of property, plant and equipment ………………
Government subsidies …………………………………………………

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

Interest and dividend income …………………………………………

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

Gain on sales of investment in a subsidiary …………………………
Other, net ………………………………………………………………
Changes in operating assets and liabilities:
Notes and accounts receivable ………………………………………

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

Subtotal ………………………………………………………………

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

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

Proceeds from government subsidies …………………………………
Income taxes paid …………………………………………………………
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 …………………………
Proceeds from sales of shares of a subsidiary resulting in change inscope of consolidation ……………………………………………………

Collection of loans receivable ……………………………………………

Other, net …………………………………………………………………

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

¥

34,9882016¥

29,355$

310,508

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

18,971
(422)
–
477
–
(2,989)
1,629(1,100)602(1,259)–(2,254)

158,635–
2,591–(2,822)(12,735)
9(11,111)
3,905(21,814)(5,502)37,451

7,476
5,176(6,155)650
58,880
2,425
(431)
318
(7,928)–53,264(2,521)
3,874(6,278)451
38,536
2,366
(621)
–
(7,450)(134)
32,697

66,34745,935(54,624)
5,769
522,542
21,521(3,825)
2,822(70,359)–
472,701(13,311)
103
(495)
(730)
985
(22)

(17,629)
1,547
(986)
(1,108)1,267(1,285)(118,131)
914(4,393)(6,479)
8,742
(195)

211
736
(440)
(12,963)

–
140
(887)
(18,941)

1,873
6,532
(3,906)(115,043)

¥

$

23

24

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2016

Nippon Shokubai Co., Ltd. and Consolidated Subsidiaries

Years ended March 31,
2015

2016

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

(Millions of yen)

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

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

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

Purchase of investments in a subsidiary not resulting in change inscope of consolidation ……………………………………………………

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

Purchases of treasury stock ……………………………………………

Other, net …………………………………………………………………

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

Effect of exchange rate changes on cash and cash equivalents ………
Increase in cash and cash equivalents …………………………………
Cash and cash equivalents at beginning of year ………………………
Cash and cash equivalents at end of year¥

(7,179)1,000(7,491)–(5,277)
(952)
(32)
(54)
(27)
(20,012)(570)
19,71944,33664,055

2016

¥

¥

3,498
8,750
(8,537)(10,000)(3,857)
–
(30)
(32)
(30)
(10,238)
1,199
4,717
39,61944,336$$(63,711)
8,875(66,480)–(46,832)(8,449)
(284)
(479)
(240)
(177,600)(5,058)175,000
393,468
568,468

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

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

March 31, 2016
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, 2015 to the 2016 presentation. Such reclassiﬁcations had no effect on consolidated proﬁt or net
assets.
(b) Basis of consolidation
The accompanying consolidated ﬁnancial statements include the accounts of the Company and its signiﬁcant subsidiaries. All
signiﬁcant intercompany items have been eliminated in consolidation.
The overseas consolidated subsidiaries are consolidated on the basis of ﬁscal periods ending December 31, a date which
differs from the balance sheet date of the Company. As a result, adjustments have been made for any signiﬁcant intercompany
transactions which took place during the period between the year end of these overseas consolidated subsidiaries and the year
end of the Company.
Investments in an unconsolidated subsidiary and signiﬁcant afﬁliates are accounted for by the equity method.
Investments in unconsolidated subsidiaries and afﬁliates not accounted for by the equity method are carried at cost.
(c) Foreign currency translation
The ﬁnancial statements of the overseas consolidated subsidiaries are translated into yen at the rates of exchange in effect at thebalance sheet date, except that the components of net assets excluding non-controlling interests are translated at their historicalexchange rates. Differences resulting from translating the ﬁnancial statements of the overseas consolidated subsidiaries are
not included in the determination of proﬁt but are reported as translation adjustments and non-controlling interests in theaccompanying consolidated balance sheets at March 31, 2016 and 2015.
Revenue and expense items arising from transactions denominated in foreign currencies are generally translated into yen at
the rates of exchange in effect at the respective transaction dates.
All monetary assets and liabilities denominated in foreign currencies are translated into yen at the rates of exchange in effectat the consolidated balance sheet date and gain or loss on each translation is credited or charged to proﬁt.
(d) Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, cash in banks which can be withdrawn at any time and short-term
investments with a maturity of three months or less when purchased which can easily be converted to cash and are subject tolittle risk of change in value.
(e) Allowance for doubtful accounts
The Company and its consolidated subsidiaries provide an allowance for doubtful receivables at an amount calculated based on
their historical experience of bad debts on ordinary receivables plus an additional estimate of probable speciﬁc bad debts from
customers experiencing ﬁnancial difﬁculties.
(f) Inventories
Inventories are stated at the lower of cost or net selling value, cost being determined primarily by the moving average method.

25

26

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2016(g) Property, plant and equipment
Depreciation is computed principally by the straight-line method over the estimated useful lives of the respective assets except
for leased assets.
(h) Leases
Leased assets under ﬁnance lease transactions that do not transfer ownership to the lessee are depreciated to a residual value ofzero by the straight-line method using the contract term as the useful life.
For ﬁnance lease transactions that do not transfer ownership to the lessee, those that started on or before March 31, 2008
continue to be accounted for as operating lease transactions.
(i) Investments in securities
Securities are classiﬁed into three categories: trading securities, held-to-maturity debt securities and other securities. Trading
securities, consisting of debt and marketable equity securities, are carried at fair value. Gain and loss, both realized andunrealized, are credited and charged to income. Held-to-maturity debt securities are carried at amortized cost. Marketablesecurities classiﬁed as other securities are carried at fair value, with any changes in unrealized holding gain or loss, net ofthe applicable income taxes, reported as a separate component of net assets. Non-marketable securities classiﬁed as othersecurities are carried at cost. Cost of securities sold is determined by the moving average method.
(j) Research and development costs and computer software
Research and development costs are charged to income when incurred.
Expenditures relating to the development of computer software intended for internal use are charged to income as incurred,
except if these are deemed to contribute to the generation of future income or cost savings. Such expenditures are capitalized asassets and amortized by the straight-line method over their respective estimated useful lives, generally a period of 5 years.
(k) Income taxes
Income taxes are calculated based on taxable income and charged to income on an accrual basis. Deferred income tax assets
and liabilities are computed based on the temporary differences between ﬁnancial reporting and the tax bases of the assets andliabilities which will result in taxable or tax-deductible amounts in the future. The calculation of deferred income tax assets andliabilities is based on the enacted tax laws.
(l) Hedge accounting
Gain or loss on derivatives positions designated as hedges is deferred until the loss or gain on the respective underlying hedged
items is recognized. Interest rate swaps which meet certain conditions are accounted for as if the interest rates applied to theswaps had originally applied to the underlying debt.
Forward foreign currency exchange contracts which meet certain criteria are accounted for by the allocation method which
requires that recognized foreign currency receivables or payables be translated at the corresponding contract rates (“Allocation
method”).
(m) Accrued bonuses to employees
Accrued bonuses to employees are provided based on the estimated amount of bonuses to be paid to employees which is charged
to income in the current year.
(n) Accrued bonuses to directors and audit & supervisory board members
Accrued bonuses to directors and audit & supervisory board members are provided at an estimate of the amount to be paid in thefollowing year which has been allocated to the current ﬁscal year.
(o) Reserve for periodic repairs
The Company and certain consolidated subsidiaries provide a reserve for the cost of periodic repairs to production facilities atplants based on their estimates of the future cost of such repairs.

Consolidated
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(p) Retirement beneﬁts
The liability for retirement beneﬁts is provided based on the retirement beneﬁt obligation reduced by the pension plan assets atfair value at the end of the year.
The retirement beneﬁts are attributed to periods corresponding to the service years of eligible employees based on the
beneﬁt formula method.
Actuarial gain or loss is amortized in the year following the year in which the gain or loss is recognized by the straight-line
method principally over a period of 10 years, which is within the estimated average remaining years of service of the eligible
employees.
Prior service cost is amortized by the straight-line method principally over a period of 5 years, which is within the estimatedaverage remaining years of service of the eligible employees.
(q) Distribution of retained earnings
Under the Corporation Law of Japan, the distribution of retained earnings with respect to a given ﬁnancial period is made byresolution of the shareholders at a general meeting held subsequent to the close of the ﬁnancial period. The accounts for that
period do not, therefore, reﬂect such distributions (see Note 23).
(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 Business Combinations
The Company and its domestic consolidated subsidiaries adopted “Revised Accounting Standard for Business Combinations”(Accounting Standards Board of Japan (“ASBJ”) Statement No.21 of September 13, 2013), “Revised Accounting Standard forConsolidated Financial Statements” (ASBJ Statement No.22 of September 13, 2013), “Revised Accounting Standard for Business
Divestitures” (ASBJ Statement No.7 of September 13, 2013) effective from April 1, 2015. As a result, under these revised
accounting standards, differences arising from changes in the Companyʼs ownership interest are recorded in capital surplus when
the parent company continues to have control and acquisition expenses for business combinations are treated as expenses in the
consolidated ﬁnancial statements for the year in which they arise. Furthermore, effective for business combinations occurringon or after the beginning of the year ended March 31, 2016, any changes to the allocation of the acquisition price arising fromﬁnalization of the provisional accounting treatment are reﬂected in the consolidated ﬁnancial statements for the year in which
the business combination occurred. In addition, the previous accounting standard category of “net income” was changed, andthe category of “minority interests” was changed to “non-controlling interests.” The consolidated ﬁnancial statements for theprevious year have been reclassiﬁed to reﬂect these changes in presentation.
In accordance with the provisional treatment prescribed in Clause 58-2 (4) of the “Accounting Standard for Business
Combinations,” in Clause 44-5 (4) of the “Accounting Standard for Consolidated Financial Statements” and in Clause 57-4 (4) of
the “Accounting Standard for Business Divestitures,” the aforementioned accounting standards have been applied prospectively
from the beginning of the year ended March 31, 2016.
As result, capital surplus in the accompanying consolidated balance sheet and consolidated statement of changes in net
assets increased by ¥312 million ($2,769 thousand). Additionally, proﬁt before income taxes for the year ended March 31, 2016 in
the accompanying consolidated statement of income decreased by the same amount.
In the consolidated statement of cash ﬂows for the year ended March 31, 2016, cash ﬂows related to the purchase or saleof shares of a subsidiary not affecting the scope of consolidation were classiﬁed into “Cash ﬂows from ﬁnancing activities,”while cash ﬂows related to expenses arising from the purchase of shares of a subsidiary affecting the scope of consolidation or
expenses arising from the purchase or sale of shares of a subsidiary not affecting the scope of consolidation were classiﬁed into
“Cash ﬂows from operating activities.”
The impact of this change on net assets per share and proﬁt attributable to owners of parent per share is presented in Note 19.

27

28

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2016(t) Accounting standards issued but not yet effective(Implementation Guidance on Recoverability of Deferred Tax Assets)
On March 28, 2016, the ASBJ issued “Revised Implementation Guidance on Recoverability of Deferred Tax Assets” (ASBJ Guidance
No.26).
(1) Overview
Regarding the treatment of the recoverability of deferred tax assets, a review was conducted following the framework of
the Japanese Institute of Certiﬁed Public Accountants Audit Committee Report No.66 “Audit Treatment on Determining the
Recoverability of Deferred Tax Assets,” whereby companies are categorized into ﬁve categories and deferred tax assets arecalculated based on each of these categories.
1) Treatment of companies that do not satisfy any of the category requirements for (Category 1) through (Category 5)2) Category requirements for (Category 2) and (Category 3)3) Treatment related to future deductible temporary differences which cannot be scheduled in companies that qualify as(Category 2)4) Treatment related to the reasonable estimable period of future pre-adjusted taxable income in companies that qualify as(Category 3)5) Treatment in cases that companies that satisfy the category requirements for (Category 4) but qualify as (Category 2) or(Category 3)(2) Scheduled date of adoption
The Company expects to adopt the revised implementation guidance effective from April 1, 2016.
(3) Impact of adopting revised implementation guidance
The Company is currently evaluating the effect of adopting the revised implementation guidance on its consolidated ﬁnancial
statements.
2.

U.S. Dollar Amounts
The translation of yen amounts into U.S. dollar amounts is included solely for convenience, as a matter of arithmetic computation
only, at ¥112.68 = U.S. $1.00, the approximate rate of exchange in effect on March 31, 2016. 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.

Consolidated
Financial
Highlights

3.

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

Financial Instruments(1) Current status of ﬁnancial instruments
1) Policy for ﬁnancial instruments
The Group manages temporary surplus funds through short-term bank deposits. The Group raises funds through bankloans. The Group uses derivatives for the purpose of reducing foreign currency exchange rate ﬂuctuation risk or interest
rate ﬂuctuation risk, and does not enter into derivatives for speculative or trading purposes.
2) Types of ﬁnancial instruments and related risk
Notes and accounts receivable, trade are exposed to credit risk in relation to customers. Trade receivables in foreign
currencies, arising from export transactions for the global business, are exposed to foreign currency exchange rate
ﬂuctuation risk, which are hedged by forward foreign exchange contracts.
Investments in securities are composed of the shares of common stock of other companies with which the Grouphas business or capital relationships, which are also exposed to market price volatility risk.
Substantially all notes and accounts payable, trade have payment due dates within one year, which are also hedged
by forward foreign currency exchange contracts. The loans are taken out principally for the purpose of making capital
expenditures. The loans with variable interest rates are exposed to interest rate ﬂuctuation risk. However, the interest
rate ﬂuctuation risk is covered by interest rate swap transactions.
Regarding derivatives, the Group enters into forward foreign currency exchange transactions to avoid foreign currency
exchange rate ﬂuctuation risk related to trade receivables and trade payables denominated in foreign currencies. The
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 20.
3) Risk management for ﬁnancial instrumentsi) Monitoring for credit risk (the risk that customers or counterparties may default)With respect to trade receivables, each related division of the Company monitors the conditions of their main
customers periodically, monitors due dates and outstanding balances of individual customers, and evaluates credit
worthiness of their main customers semiannually. The consolidated subsidiaries also monitor trade receivables in asame manner.
The Group also believes that the credit risk of derivatives is insigniﬁcant as the Group enters into derivativetransactions only with ﬁnancial institutions with high credit ratings.
ii)

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

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

29

30

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2016

(2) Fair value of ﬁnancial instruments
Carrying value, fair value, and unrealized gain or loss on ﬁnancial instruments at March 31, 2016 and 2015 are shown in thefollowing table. The following table does not include ﬁnancial instruments for which it is extremely difﬁcult to determine thefair value.
2016
2015
(Millions of yen)

Carrying
value

Fair
value

Unrealized(loss) gain

69,172¥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 …………………………

69,172¥–¥–

49,255¥49,255¥–64,93664,93628,968¥ 163,076

28,968¥ 163,076

¥

–
–

¥

34,147
157,558¥

34,147
157,558

¥

–
–

¥

¥

¥

–

¥

47,515¥47,515¥–

74,15674,156–

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

39,31013,186

13,186–22,071

22,071–¥

8,180
29,26089,936

¥

(15)
94
79

¥

7,685
36,910114,181¥

7,741
37,028114,355

¥

56
118
174

¥

23

¥

–

¥

40

¥

40

¥

–

Total liabilities ………………………

¥

8,195
29,16689,857

Derivatives …………………………

¥

23vii) Long-term debt ………………

39,3102016(Thousands of U.S. dollars)

Carrying
value

Fair
value

i) Cash and cash
equivalents, and time deposits$ 613,880$ 613,880ii) Notes andaccounts receivable ……………

576,287

576,287

257,082$1,447,249

257,082$1,447,249

Unrealized(loss) gain

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

Total assets …………………………

$

–
–

$

–
–

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

2016
(Thousands of U.S. dollars)

Carrying
value

Fair
value

Unrealized(loss) gainiv) Notes andaccounts payable ………………

$ 348,864$ 348,864v) Short-termbank loans………………………

117,022

117,022–

Total liabilities ………………………

72,728258,839$ 797,453

72,595
259,673$ 798,154

$

(133)
834
701

Derivatives …………………………

$

$

$

–

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

vii) Long-term debt ………………

1)

204

204

$

–

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 20.

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, 2016 and 2015 are presented as follows:
2016
2015
2016

Unlisted securities and other ……………

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

¥

1,350

¥

650

$

11,981Since there is no market price for unlisted securities and it is difﬁcult to determine the fair value, they are not included in thepreceding table “(2) Fair value of ﬁnancial instruments.”

31

32

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 20163)

The redemption schedule for monetary assets with maturity dates as of March 31, 2016 and 2015 is as follows:
2016
2015
2016
(Thousands of
U.S. dollars)(Millions of yen)

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

Due within
one year

Due within
one year

Due within
one year¥¥$

69,17264,936
134,108

Notes and accounts receivable …………

¥
4.

¥

613,880
576,287$ 1,190,167

49,255
74,156
123,411

Investments in Securities
Marketable securities classiﬁed as other securities at March 31, 2016 and 2015 are summarized as follows:
2016
2015
(Millions of yen)

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

Carrying value

Acquisition
cost

Unrealized
gain (loss)

Carrying value

Acquisition
cost

¥

¥

¥

¥

33,24733,247

¥

(294)
(294)
10,313 ¥

900
900
34,147

Subtotal ………………………………

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

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

¥

27,031
27,031

1,937
1,937
28,96816,424
16,4242,231
2,231
18,655¥¥

10,607
10,607

2016(Thousands of U.S. dollars)

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

Subtotal ………………………………

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

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

Carrying value

Acquisition
cost

Unrealized
gain (loss)$ 239,892
239,892$ 145,758
145,758$

17,19017,190$ 257,082

19,79919,799$ 165,557$

94,134
94,134(2,609)(2,609)91,525

Sales of other securities for the years ended March 31, 2016 and 2015 were as follows:
2016
2015
2016

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

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

¥
¥

447
48

¥
¥

547
422

$
$

3,967
426

¥

18,08718,087960
960
19,047

Unrealized
gain (loss)¥¥

15,16015,160(60)(60)
15,100Consolidated
Financial
Highlights

5.

Messages fromPresident

Special Feature

Description ofBusiness

Governance
SystemCSR Based on
Responsible
Care Concept

Inventories
Inventories at March 31, 2016 and 2015 were as follows:
2016
2015

¥

Raw materials
Work in process
Supplies

¥

Total

6.

27,884
9,860
5,574
5,689
49,007¥¥

Financial
Statements

Corporate Data

2016
(Thousands of
U.S. dollars)(Millions of yen)

Merchandise and ﬁnished goods

Ten-Years
Summary

Management
Discussion
and Analysis ofOperation

33,76911,446
6,222
4,866
56,303$ 247,462
87,50449,46850,488$ 434,922

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.
There was no loss on impairment of property, plant and equipment recognized for the year ended March 31, 2016.
For the year ended March 31, 2015, growth of the polymer market for lithium-ion batteries was below expectations followed
by a decline in the price of the product. Based on these circumstances, as continuous loss hereafter was expected, a loss on
impairment in the amount of ¥181 million was recognized on equipment which was used to manufacture polymer for lithiumion batteries at the Kawasaki Plant in Kanagawa Prefecture. Accordingly, the Company has written down such assets to theirrespective net recoverable amounts. The net recoverable amounts of these impaired assets were measured at value in use basedon estimated future cash ﬂows discounted at a rate of 5%.
Sales of equipment to manufacture fuel cell materials had decreased and the growth of this market was not expected. Basedon these circumstances, as continuous loss hereafter was expected, a loss on impairment in the amount of ¥296 million wasrecognized on equipment which was used to manufacture fuel cell materials in Saga Prefecture. 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 value in use based on estimated future cash ﬂows discounted at a rate of 5%.
Details of the loss on impairment of property, plant and equipment for the year ended March 31, 2015 are summarized asfollows:
2015
Company

Application

Classiﬁcation(Millions of yen)

Kawasaki Plant(Kanagawa Prefecture)

Equipment to manufacture
polymer for lithium-ion batteries

Buildings and structures,
machinery and equipment¥181

Saga Prefecture

Equipment to manufacture fuelcell materials

Machinery and equipment

296

Total

¥477

33

34

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 20167.

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, 2016 and 2015 were 0.89% and 0.57%, respectively.
Long-term debt and lease obligations at March 31, 2016 and 2015 consisted of the following:
2016
2015
2016
(Thousands of
U.S. dollars)(Millions of yen)Unsecured loans from banks and insurance companies, payable inJapanese yen, at rates from 0.30% to 0.87%, due through 2021 …

¥

Unsecured loans from banks, payable in U.S. dollars, at rates
from 0.77% to 1.52%, due through 2020 ……………………………
Secured loans from banks, payable in Japanese yen, at rate of
1.24%, due through 2016 ……………………………………………

Lease obligations ……………………………………………………

Subtotal ………………………………………………………………
Less current portion …………………………………………………
Total …………………………………………………………………

¥

17,832¥

19,30425,240173,270

5
133
37,494(8,220)29,27451
177
44,772(7,713)37,059441,180
332,747(72,950)
259,797(Millions of yen)¥2018 …………………………………………………………………
2019 …………………………………………………………………
2020 …………………………………………………………………

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

¥

¥

8,195
11,749
4,696
8,796
3,925
37,361(Thousands of
U.S. dollars)$$

72,728104,269
41,67678,062
34,832
331,567

The aggregate annual maturities of lease obligations to March 31, 2016 are summarized below:
Year ending March 31,2017 …………………………………………………………………

(Millions of yen)¥2018 …………………………………………………………………
2019 …………………………………………………………………
2020 …………………………………………………………………

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

¥

158,253

19,524

The aggregate annual maturities of long-term debt subsequent to March 31, 2016 are summarized below:
Year ending March 31,2017 …………………………………………………………………

$

25
26
27
21
34
133

(Thousands of
U.S. dollars)

$

$

222
231
240
186
301
1,180

$

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Assets pledged as collateral for short-term bank loans, long-term debt, including the current portion thereof, and notes andaccounts payable at March 31, 2016 and 2015 were as follows:
2016
2015
2016

Time deposits ………………………………………………………

¥

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

Other assets …………………………………………………………

Total …………………………………………………………………

8.

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

¥

8
550
72
206
5
841

¥

¥

–
526
73
188
13
800

$

$

71
4,881
639
1,828
45
7,464

Retirement Beneﬁts
Outline of Retirement Beneﬁt Plan
Employees of the Company and consolidated subsidiaries are mainly covered by funded and unfunded deﬁned beneﬁt plans anddeﬁned contribution pension plans to provide for retirement beneﬁts. In funded deﬁned beneﬁt corporate pension plans, lumpsum payments or pensions at retirement based on salary and length of service are paid. In unfunded lump-sum payments plan,
lump-sum payments based on salary and length of service are paid as retirement beneﬁts. In addition, the Company has a cash
balance plan for a deﬁned beneﬁt corporate pension plan and a retirement lump-sum plan. Under the cash balance plan, eacheligible employee has a hypothetical account, which is equivalent to the funded amount as the basis for the pension payment. The
hypothetical accounts accumulate contribution credits based on salary level and interest credits based on market interest trends.
The Company also has the employeesʼ retirement beneﬁt trust.
Certain consolidated subsidiaries calculate the retirement beneﬁt obligations, retirement beneﬁt assets and retirement
beneﬁt expenses for their deﬁned beneﬁt corporate pension plans and lump-sum payments plans based on the amount which
would be payable at the year-end if all eligible employees terminated their services voluntarily (“the simpliﬁed method”).
Certain consolidated subsidiaries participate in a multi-employer pension plan. Since the portion of pension assets of theconsolidated subsidiaries held in the multi-employer pension plan could not be reasonably calculated, the required contribution
amount is recognized as retirement beneﬁt expense.
Information on deﬁned beneﬁt pension plans for the years ended March 31, 2016 and 2015 is as follows:
The change in retirement beneﬁt obligation is outlined as follows (excluding plans to which the simpliﬁed method is applied):
2016
2015
2016

Balance at the beginning of the year, as originally reported ……

¥

Cumulative effect of change in accounting principle ………………

Balance at the beginning of the year, as adjusted …………………

Service cost …………………………………………………………

Interest cost …………………………………………………………
Actuarial loss …………………………………………………………

Beneﬁts paid …………………………………………………………

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

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

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

36,412–
36,412
1,682
417
2,492
(1,977)(9)(29)
38,988¥¥32,353135
32,488
1,528
593
3,673
(1,884)3
11
36,412$$The change in plan assets at fair value is outlined as follows (excluding plans to which the simpliﬁed method is applied):

323,145–
323,145
14,927
3,701
22,116(17,545)(80)(257)
346,007

35

36

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 20162016

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

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

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

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

Beneﬁts paid …………………………………………………………

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

2016

2015

¥

31,122
911(1,590)1,702(1,138)31,007¥¥25,074
717
4,479
2,002
(1,150)31,122The change in liabilities for retirement beneﬁts calculated by the simpliﬁed method is outlined as follows:
2016
2015

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

¥Beneﬁts paid …………………………………………………………

Other …………………………………………………………………

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

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

¥

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

$

276,198
8,085(14,111)
15,105(10,099)
275,178

2016(Thousands of
U.S. dollars)(Millions of yen)

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

$

¥

¥

1,015
55
(21)
(61)
–
988

$

8,768
887
(994)
(115)
852
9,398

$

The reconciliation of the ending balance of the retirement beneﬁt obligation and plan assets to the asset and liability for
retirement beneﬁts recognized in the consolidated balance sheets were as follows:
2016
2015
2016

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

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

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

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

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

9,039

6,279

80,21812,568(3,529)11,755(5,476)

111,537(31,319)

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

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

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

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

¥

9,039

Retirement beneﬁt calculated by the simpliﬁed method is included in the above table.

¥¥

26,790(31,977)(5,187)
11,466

6,279

$

$

250,683(276,890)(26,207)
106,425

80,218

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The components of retirement beneﬁt expenses are outlined as follows:2016

Service cost …………………………………………………………

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

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

¥

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

Corporate Data

2016

2015

(Thousands of
U.S. dollars)(Millions of yen)Interest cost …………………………………………………………

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

Financial
Statements

¥

¥

1,528
593
(717)
549
40
55
2,048

$

$

14,9273,701(8,085)
1,544
142
879
13,108The components of retirement beneﬁts liability adjustments included in other comprehensive income, before the tax effect, areoutlined as follows:
2016
2015
2016
(Thousands of
U.S. dollars)(Millions of yen)

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

¥Total …………………………………………………………………

¥

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

25(3,909)(3,884)

¥
¥

37
1,355
1,392

$
$

222
(34,691)(34,469)

The components of retirement beneﬁt liability adjustments included in accumulated other comprehensive income, before the tax
effect, are outlined as follows:
2016
2015
2016
(Thousands of
U.S. dollars)(Millions of yen)

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

¥Total …………………………………………………………………

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

21
3,798
3,819

¥
¥

46
(111)
(65)

$
$

186
33,70633,892The breakdown of plan assets by major category is as follows:
2016
Bonds …………………………………………………………………
Equities ………………………………………………………………

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

Other …………………………………………………………………

Total …………………………………………………………………

2015
55%
23%
14%
8%
100%

40%
32%
12%
16%
100%

(Note) The breakdown of plan assets in the above table is determined based on the percentage of composition of the various
assets in the pension fund. Bonds include alternative investments that are approximately the same as bonds in terms oflevel of risk.
(Note) 0.4% of pension assets are part of a retirement beneﬁt trust for a corporate pension plan.

37

38

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2016

The assumptions used in accounting for the deﬁned beneﬁt plans for the year ended March 31, 2016 and 2015 are as follows:
2016
2015
Principally 0.4%
Principally 1.1%
Discount rates ………………………………………………………
Principally 3.0%
Principally 3.0%
Expected long-term rate of return on plan assets ………………
Principally 5.2%
Principally 5.2%
Rates of salary increase ……………………………………………
The expected long-term rate of return on plan assets is determined as a result of consideration of both the portfolio allocation atpresent and in the future, and long-term expected rates of return from multiple plan assets at present and in the future.
The required contributions to deﬁned contribution pension plans for the years ended March 31, 2016 and 2015 amounted to ¥175
million ($1,553 thousand) and ¥201 million, respectively.
The following table sets forth the status of the multi-employer pension plan at March 31, 2015 and 2014, the most recent date on
which such data was available:
2015
2014
2015
(Thousands of
U.S. dollars)(Millions of yen)

Plan assets……………………………………………………………

¥

571,380¥

512,489$ 5,070,820¥

561,736
9,644¥

522,290(9,801)$

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

Difference ……………………………………………………………

4,985,232
85,588The contribution ratio of the Company and consolidated subsidiaries to the multi-employer plan was 0.5% at March 31, 2016 and2015. This percentage is not the same as the Company and consolidated subsidiariesʼ percentage of obligation.
Additional information
The difference of ¥9,644 million ($85,588 thousand) in the above table is the net amount of the balance of prior service costof ¥40,107 million ($355,937 thousand) calculated under pension ﬁnancing, the general reserve of ¥35,441 million ($314,528
thousand) and the surplus of the plan of ¥14,311 million ($127,006 thousand) at March 31, 2015. Prior service cost is amortizedon a straight-line basis over 7 years as of March 31, 2015, and the Company and consolidated subsidiaries expensed additional
payments in the amount of ¥28 million ($248 thousand) for amortization of prior service cost.
The difference of ¥9,801 million in the above table was the net amount of the balance of prior service cost of ¥45,242 million
calculated under pension ﬁnancing, the general reserve of ¥17,618 million and the surplus of the plan of ¥17,823 million at March
31, 2014. Prior service cost was amortized on a straight-line basis over 8 years as of March 31, 2014, and the Company andconsolidated subsidiaries expensed additional payments in the amount of ¥28 million for amortization of prior service cost.
9.

Income Taxes
Income taxes applicable to the Company and its domestic consolidated subsidiaries consist of corporation, inhabitantsʼ
and enterprise taxes. The statutory tax rates in Japan for the years ended March 31, 2016 and 2015 were, in the aggregate,approximately 33.0% and 35.6%, respectively.
The effective tax rates reﬂected in the accompanying consolidated statements of income for the years ended March 31, 2016
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2016
33.0 %

2015
35.6 %

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

2.2
(4.2)
(2.9)
(1.5)
(0.1)

0.8
(1.6)
25.4 %

1.7
3.6
34.4 %

Effect of:Valuation allowance ………………………………………………

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

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

Equity in earnings of an unconsolidated subsidiary and afﬁliates
Other tax credit ……………………………………………………
Decrease in deferred income tax assets resulting from change
in the statutory tax rates …………………………………………

Other, net …………………………………………………………

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

Corporate Data

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,
2016 and 2015 are summarized as follows:
2016
2015
2016
(Thousands of
U.S. dollars)(Millions of yen)

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

¥

Liability for retirement beneﬁts for employees …………………
Tax loss carryforwards ……………………………………………
Intercompany proﬁt on inventories and property, plant andequipment …………………………………………………………
Accrued bonuses to employees …………………………………

Loss on impairment of land ………………………………………

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

Other ………………………………………………………………

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

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

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

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

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

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

¥

2,043
2,746
4,845

¥

2,249
2,179
5,097

$

18,131
24,37042,998

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

1,525
960
961
821
683
1,810
16,285(5,647)
10,638

6,470
8,546
7,863
6,656
5,724
9,994
130,752(43,824)
86,928(2,611)(945)(245)(1,342)(12)(1,709)(6,864)2,931(4,363)(1,156)
(288)
(996)
(8)
(1,733)(8,544)
2,094(23,172)(8,387)(2,174)(11,910)(106)(15,167)(60,916)
26,012

¥

$

39

40

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2016

The “Act to Partially Revise the Income Tax Act and Others” (Act No.15 of 2016) and the “Act to Partially Revise the Local Tax Act
and Others” (Act No.13 of 2016) were enacted during the Japanese Diet session on March 29, 2016. As a result, the effective
statutory tax rate used to measure the Companyʼs deferred tax assets and liabilities was changed from 32.2% to 30.08% for
temporary differences expected to be realized or settled in the period from April 1, 2016 to March 31, 2018 and to 30.6% for the
temporary differences expected to be realized or settled on April 1, 2018 or thereafter. The effect of the announced reduction of
the effective statutory tax rate was to decrease deferred tax assets, after offsetting deferred tax liabilities, by ¥198 million ($1,757
thousand), net retirement beneﬁts liability adjustments by ¥56 million ($497 thousand) and increase income taxes-deferred by¥279 million ($2,476 thousand), unrealized holding gain on securities by ¥136 million ($1,207 thousand) and unrealized gain on
hedges by ¥1 million ($9 thousand) as of and for the year ended March 31, 2016.
10. Business Combinations
Transactions under common control(1) Additional acquisition of subsidiaryʼs shares
On March 31, 2016, the Company acquired the shares of Nippoh Chemicals Co., Ltd. for ¥950 million ($8,431 thousand) in
cash. Nippoh Chemicals Co., Ltd. is a consolidated subsidiary of the Company, and manufactures and sells iodine, naturalgas, medicine, agrichemicals, and aroma chemicals. The purpose of the acquisition is to strengthen the Group management.
To achieve this purpose, the Company additionally acquired shares of Nippoh Chemicals Co., Ltd. from non-controllingshareholders and boosted its ownership ratio.
The Company applied ASBJ Statement No.21, “Revised Accounting Standard for Business Combinations,” and ASBJ
Guidance No.10, “Revised Guidance on Accounting Standard for Business Combinations and Accounting Standard forBusiness Divestitures,” and accounted for the business combination as a transaction with non-controlling shareholders undercommon control.
As result of the additional acquisition of the subsidiaryʼs shares, capital surplus increased by ¥312 million ($2,769
thousand).
(2) Business divestiture
On June 30, 2015, the Company transferred all shares of Nippon Polyester Co., Ltd., which was a former consolidated
subsidiary of the Company, to Takiron Co., Ltd. The nature of the divested business is the manufacture and sales ofcorrugated plastic plates and ﬂat plastic plates.
The domestic demand for Nippon Polyester Co., Ltd. is not expected to expand continuously in terms of building and civil
construction products in the domestic market. For further growth, technological strength for new product development andcost reduction and marketing strength for business expansion are required. Under such circumstances, Nippon Polyester
Co., Ltd. judged that synergies between Nippon Polyester Co., Ltd. and Takiron Co., Ltd. would enable further growth, because
Takiron Co., Ltd. has strong capabilities in technology and marketing as a synthetic plastic manufacturer.
The Company transferred shares and received a cash consideration. As result, the Company recognized a gain ontransfer from business divestiture of ¥620 million ($5,502 thousand). The difference between the amount received for thetransfer of shares and the amount of ownerʼs equity in the subsidiary whose shares were transferred was recognized in
proﬁt. This accounting method assumes that the investment in the subsidiary subject to the share transfer is liquidated.
The book value of assets pertaining to the transferred business is as follows:Year ended March 31, 2016
Current assets ………………………………………………………

Millions of yen¥

Non-current assets …………………………………………………

Total assets …………………………………………………………

¥

2,773
136
2,909

The divested business was included in functional chemical reportable segment.

Thousands of
U.S. dollars$$

24,6091,207
25,816

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11. 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 ($32,620 thousand) at March 31, 2016 and 2015.
Common stock and treasury stock
Movements in shares of common stock in issue and treasury stock during the years ended March 31, 2016 and 2015 aresummarized as follows:
2016
Number of shares(Thousands)

Common stock …………

Treasury stock …………

April 1, 2015

Increase

Decrease

March 31, 2016

204,000
1,056

–
14

163,200
853

40,800217

The Company completed a reverse stock split of its common stock at a ratio of 1 share for 5 shares on October 1, 2015 on thebasis of a resolution by the annual meeting of shareholders held on June 19, 2015. As a result, the number of issued shares
decreased by 163,200 thousand shares.
The increase in treasury stock of 14 thousand shares was due to the acquisition of fractional shares (14 thousand shares)
and the acquisition of shares less than one standard unit as a result of the reverse stock split (0 thousand shares).
The decrease in treasury stock of 853 thousand shares was due to the reverse stock split (853 thousand shares) and the saleof shares less than one standard unit (0 thousand shares).
2015
Number of shares(Thousands)

Common stock …………
Treasury stock …………

April 1, 2014

Increase

Decrease

March 31, 2015

204,000
1,033

–
23

–
–

204,000
1,056

The increase in treasury stock of 23 thousand shares was due to the acquisition of fractional shares.
12. 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, 2016 and 2015 totaled ¥12,303 million ($109,185 thousand) and ¥11,948 million, respectively.
13. Loss on Discontinued Operations
For the year ended March 31, 2015, the Company recorded a loss on discontinued operations due to termination of the
manufacturing business of resins for adhesives and paints in the Suita Factory. The main component is removal cost of ﬁxed
assets.
14. Gain on Sales of Investment in a Subsidiary
On June 30, 2015, the Company sold all shares of Nippon Polyester Co., Ltd. to Takiron Co., Ltd. As a result, the Company
recorded a gain on sales of investment in a subsidiary in the amount of ¥620 million ($5,502 thousand) for the year ended March
31, 2016.

41

42

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2016

15. Assets and Liabilities of a Subsidiary Excluded from Consolidation Following Sales of Its Shares
The assets and liabilities of Nippon Polyester Co., Ltd., a former subsidiary excluded from consolidation following the sales of its
shares, are as follows:(As of the acquisition date)Current assets ………………………………………………………

¥

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

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

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

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

Net proceeds …………………………………………………………

Thousands of
U.S. dollars

Millions of yen

¥

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

$

$

24,6091,207(23,314)(5,609)
0
5,502
2,395
(522)
1,873

16. Other Comprehensive Income
The following table presents reclassiﬁcation adjustments and tax effects of components of other comprehensive income for theyears ended March 31, 2016 and 2015:
2016
2015
2016

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

¥

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

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

Tax effects …………………………………………………………

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

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

Tax effects …………………………………………………………

Net deferred (loss) gain on hedges ………………………………
Translation adjustments:
Amount arising during the year …………………………………
Reclassiﬁcation adjustments ……………………………………

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

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

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

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

Tax effects …………………………………………………………

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

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

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

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

(4,750)(48)(4,798)1,752(3,046)

¥

8,944
(422)
8,522
(2,311)
6,211$(42,155)(426)(42,581)
15,549(27,032)

(17)
6
(11)

26
(8)
18

(151)
53
(98)

(843)
–
(843)

5,786
(0)
5,786

(7,481)–(7,481)(4,073)190(3,883)
1,106(2,777)

803
589
1,392
(474)
918

(36,147)
1,687(34,460)
9,815(24,645)

(785)
20

1,044
14

(6,967)178(765)(7,442)¥

1,058
13,991$(6,789)(66,045)

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17. 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, 2016 and 2015 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:
2016
2015
2016
(Thousands of
U.S. dollars)(Millions of yen)Equipment:
Acquisition costs ……………………………………………………

¥

Net book value ……………………………………………………

¥

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

532
(440)
92

¥
¥

532
(386)
146

$
$

4,721
(3,905)816

Lease payments of the Company and its domestic consolidated subsidiaries relating to ﬁnance leases amounted to ¥54 million($479 thousand) and ¥57 million for the years ended March 31, 2016 and 2015, respectively. Depreciation on these leased assets
calculated by the straight-line method would have amounted to ¥54 million ($479 thousand) and ¥57 million for the years ended
March 31, 2016 and 2015, respectively, if it had been reﬂected in the accompanying consolidated balance sheet.
Future minimum lease payments (including the interest portion thereon) subsequent to March 31, 2016 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,
2017(Thousands of
U.S. dollars)(Millions of yen)¥2018 and thereafter

¥

52
40
92

$
$

461
355
816

18. Contingent Liabilities
The Company and a consolidated subsidiary were contingently liable as guarantors of indebtedness of afﬁliates at March 31, 2016
and 2015 as follows:
2016
2015
2016

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

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

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

1,709
854

¥

2,308
1,154

$

15,167
7,579

The consolidated subsidiary had contingent liabilities arising from notes discounted with banks and notes endorsed at March 31,
2016 and 2015 as follows:
2016
2015
2016

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

Notes endorsed ………………………………………………………

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

¥

–
0

¥

476
0

$

–
0

43

44

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 201619. Amounts per Share2016
Proﬁt attributable to owners of parent ……………………………
Cash dividends ………………………………………………………

2016

2015
(Yen)

¥

Net assets ……………………………………………………………

640.6998.00
6,870.84(U.S. dollars)¥

470.2824.00
6,535.66

$

5.69
0.87
60.98

Proﬁt attributable to owners of parent per share has been computed based on the proﬁt attributable to owners of parent available
for distribution to shareholders of common stock and the weighted-average number of shares of common stock outstanding
during the year. Diluted proﬁt attributable to owners of parent per share has not been presented for the years ended March 31,
2016 and 2015 since neither the Company nor any of the consolidated subsidiaries had any potentially dilutive shares at March 31,
2016 and 2015.
As described in 1. Summary of Signiﬁcant Accounting Policies (s) Change in accounting policy, the Company and its domestic
consolidated subsidiaries adopted “Revised Accounting Standard for Business Combinations.” As a result, proﬁt attributable toowners of parent decreased by ¥7.70 ($0.07) for the year ended March 31, 2016.
The Company completed a reverse stock split of its common stock at a ratio of 1 share for 5 shares on October 1, 2015. The
amounts per share of net assets and proﬁt attributable to owners of parent have been computed based on the assumption thatthe reverse stock split had been completed at the beginning of the prior year.
Cash dividends per share represent the cash dividends declared as applicable to the respective years together with theinterim cash dividends paid.
The ﬁnancial data used in the computation of proﬁt attributable to owners of parent per share for the years ended March 31,
2016 and 2015 is summarized as follows:
2016
2015
2016
(Thousands of
U.S. dollars)(Millions of yen)Proﬁt attributable to owners of parent ……………………………

¥

26,003–¥19,089–$230,769–

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

¥

26,003¥19,089$230,769

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

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

40,58540,59020. 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, 2016 and 2015.
(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,
2016 and 2015 are summarized as follows:Consolidated
Financial
Highlights

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Governance
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Responsible
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Ten-Years
Summary

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Discussion
and Analysis ofOperation

Financial
Statements

Corporate Data

Currency-related transactions
2016
Contract value
Method of hedge
accounting

Transaction

Major hedged item

Maturing within
one year

Maturing after
one year

Fair value

Millions of yen

Deferral hedge

Allocation method

Forward foreign currency
exchange contracts:
Buy

Accounts payable, trade

Forward foreign currency
exchange contracts:
Sell

Accounts receivable, trade

Buy

Accounts payable, trade

¥

120

¥

1,977
25

–

¥

23

(*)
(*)

–
–

2015
Contract value
Method of hedge
accounting

Transaction

Major hedged item

Maturing within
one year

Maturing after
one year

Fair value

Millions of yen

Deferral hedge

Allocation method

Forward foreign currency
exchange contracts:
Buy

Accounts payable, trade

Forward foreign currency
exchange contracts:
Sell

Accounts receivable, trade

Buy

Accounts payable, trade

¥

222

¥

9,722
25

–

¥

40

(*)
(*)

–
–

2016
Contract value
Method of hedge
accounting

Transaction

Major hedged item

Maturing within
one year

Maturing after
one year

Fair value

Thousands of U.S. dollars

Deferral hedge

Forward foreign currency
exchange contracts:
Buy

Accounts payable, trade$ 1,065

Allocation method

Forward foreign currency
exchange contracts:
Sell

Accounts receivable, trade

Buy

Accounts payable, trade17,545
222

$

–

–
–

$

204

(*)
(*)

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.

45

46

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2016

Interest-rate related transactions
2016
Contract value
Method of hedge
accounting

Transaction

Major hedged item

Notional
amountMore than one
year

Fair value(Millions of yen)

Swap rates applied tounderlying debt

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

¥

5,000

¥

(*)

5,000

2015
Contract value
Method of hedge
accounting

Transaction

Major hedged item

Notional
amountMore than one
year

Fair value(Millions of yen)

Swap rates applied tounderlying debt

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

¥

5,000

¥

(*)

5,000

2016
Contract value
Method of hedge
accounting

Transaction

Major hedged item

Notional
amountMore than one
year

Fair value(Thousands of U.S. dollars)

Swap rates applied tounderlying debt

Interest rate swaps:
Receive / ﬂoating and pay/ ﬁxedLong-term debt,
including current
portion$ 44,373$ 44,373(*) Because interest rate swap agreements are accounted for by applying swap rates to underlying long-term debt, their fairvalue is included in that of the long-term debt disclosed in Note 3.

(*)

Consolidated
Financial
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Governance
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Responsible
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Management
Discussion
and Analysis ofOperation

Ten-Years
Summary

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Statements

Corporate Data

21. Segment Information(1) Outline of reporting segments
The Groupʼs reporting segments are divisions of the Group for which separate ﬁnancial information is available, and whose
operating results are reviewed regularly by the Board of Directors meeting of the Company in order to allocate management
resources and assess performance of operations.
The Groupʼs main business lines are divided based on similarities of function and nature and the Company prepares thecomprehensive strategy and conducts the business activities corresponding to the products handled by each business line.
Accordingly, the Group has three reporting segments based on product family: Basic chemicals, Functional chemicals, andEnvironment and catalysts.
Basic chemicals division is engaged in manufacturing and sales of acrylic acids, acrylic ester, ethylene oxides, ethylene
glycols, ethanolamine, higher-alcohol and glycol ether.
Functional chemicals division is engaged in manufacturing and sales of superabsorbent polymers, pharmaceuticalintermediates, polymer for concrete admixture, electronic and information materials, iodine, maleic anhydride, resins foradhesives and paints, and process adhesive products.
Environment and catalysts division is engaged in manufacturing and sales of automotive catalysts, De-NOx catalysts, dioxin
decomposition catalysts, industrial catalysts, exhaust gas treatment equipment and fuel cell material.
(2) Calculation methods used for sales, income or loss, assets, and other items on each reporting segment.
The accounting policies of the segments are substantially the same as those described in the signiﬁcant accounting policies inNote 1. Intersegment sales and transfers are recorded at the same prices used in transactions with third parties.
(3) Information as to sales, proﬁt or loss, assets, and other items on each reporting segment
The segment information of the Company and its consolidated subsidiaries for the years ended March 31, 2016 and 2015 isoutlined as follows:Year ended March 31, 2016
Basic
chemicals

Functional
chemicals

Environmentand catalysts

¥

¥

¥

Total

Adjustments
andeliminations

Consolidated(Millions of yen)

Depreciation and amortization

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

Increases in property, plant andequipment and other assets

4,585

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

¥
¥

¥
¥

177,798
5,010
182,808
21,422
207,886
8,425
10,830¥¥27,683746
28,429620
27,665
520
341

¥
¥
¥

323,124
40,109363,233
30,893369,672
18,38615,756¥¥¥–(40,109)(40,109)341
38,325––¥¥¥323,124–
323,124
31,234
407,997
18,38615,75647

48

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2016

Year ended March 31, 2015
Basic
chemicals

Functional
chemicals

Environmentand catalysts

¥

¥

¥

Total

Adjustments
andeliminations

Consolidated(Millions of yen)

Depreciation and amortization

147,976
44,032
192,008
7,820
149,225
9,469

Increases in property, plant andequipment and other assets

7,358

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

¥
¥

¥
¥

200,966
5,312
206,278
17,286
205,794
9,439

¥
¥

5,762

25,931
2,308
28,2391,277
26,111
602
518

¥
¥
¥

374,873
51,652426,525
26,383381,130
19,510¥¥¥13,638–(51,652)(51,652)(250)
38,504––¥¥¥

374,873–
374,873
26,133419,634
19,51013,638Year ended March 31, 2016
Basic
chemicals

Functional
chemicals

Environmentand catalysts$ 1,577,902
44,462$ 1,622,364$ 190,114
1,844,924
74,769$Depreciation and amortization$ 1,044,045
304,872$ 1,348,917$
78,5501,190,282
83,786

Increases in property, plant andequipment and other assets

40,69096,114

Total

Adjustments
andeliminations

Consolidated(Thousands of U.S. dollars)

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

245,678
6,621
252,299
5,502
245,518
4,615$ 2,867,625
355,955$ 3,223,580$ 274,166
3,280,724
163,170

3,026

139,830$–(355,955)$ (355,955)$
3,026
340,123–$ 2,867,625–$ 2,867,625$ 277,192
3,620,847
163,170–

139,830

Notes 1.

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

Note 2.

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

Consolidated
Financial
Highlights

Messages fromPresident

Special Feature

Description ofBusiness

CSR Based on
Responsible
Care Concept

Governance
SystemManagement
Discussion
and Analysis ofOperation

Ten-Years
Summary

Financial
Statements

Corporate Data

(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, 2016
and 2015 are summarized as follows:
2016(Millions of yen)

Japan

¥

Asia

162,192¥

63,531

EuropeAmericas¥¥46,902

Other

31,785¥

Total

18,714¥

323,1242015(Millions of yen)

Japan

¥

Asia

182,709¥

Europe81,155¥

Americas52,634¥

Other

39,724¥

Total

18,651¥

374,873

2016(Thousands of U.S. dollars)

Japan

$

Asia

1,439,404$

Europe563,818$

Americas416,241$

Other

282,082$

Total

166,080$

2,867,625“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, 2016 and 2015 is summarized as follow:
2016(Millions of yen)

Japan

¥

Asia

100,001

Europe¥30,457

¥

Other

5,839

¥

Total

10,291¥

11,553¥

146,588

2015(Millions of yen)

Japan

¥

Asia

100,802

Europe¥33,237

¥

Other

4,055

¥

Total

149,647

2016(Thousands of U.S. dollars)

Japan

$

Asia

887,478$

Europe270,296$

Other

51,819Total$

91,330

Environment andcatalysts

Adjustments
andeliminations$

1,300,923(5) Information about loss on impairment
2015(Millions of yen)

Reporting segments
Functional
chemicals

Basic chemicals
Loss onimpairment ………

¥

–

¥

–

¥

477

¥

Total

–

¥

477

49

50

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2016

22. Related Party Transactions
Principal transactions between the Company and its related party for the years ended March 31, 2016 and 2015 are summarized
as follows:
2016
2015
2016
(Thousands of
U.S. dollars)(Millions of yen)

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

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

19,888
17,844¥The balances due from and to its related party at March 31, 2016 and 2015 were as follows:
2016

18,242
16,146$

176,500
158,360

2016

2015

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

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

¥

6,970
4,947

¥

6,684
4,079

$

61,85743,903The 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.
23. Subsequent Events(1) Cash dividends
The following distribution of retained earnings of the Company, which has not been reﬂected in the accompanying
consolidated ﬁnancial statements for the year ended March 31, 2016, was approved at a shareholdersʼ meeting held on June21, 2016:

Cash dividends (¥85.00 = $0.754 per share) ………………………………………………

(Millions of yen)

¥

3,450

(Thousands of
U.S. dollars)$

30,618(2) Bonds
On June 16, 2016, pursuant to a resolution of the Board of Directors at a meeting held on May 10, 2016, the Company issued
the 8th unsecured domestic straight bonds in the amount of ¥10,000 million ($88,747 thousand) with an interest rate of 0.11%
per annum and a maturity date on June 16, 2021 for the purpose of business investment. The issuance price was ¥100 per¥100 face value.

Consolidated
Financial
Highlights

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Governance
SystemCSR Based on
Responsible
Care Concept

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Summary

Management
Discussion
and Analysis ofOperation

Financial
Statements

Corporate Data

51

52

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2016

Corporate Data

NIPPON SHOKUBAI CO., LTD. (As of March 31, 2016)
Established: August 21, 1941
Common Stock (Paid in Capital): 25,038 million yen
Number of Shares Issued: 40,800,000 shares
Number of Shares Authorized: 127,200,000 shares
Number of Employees: : 4,006 (Consolidated)
2,163 (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: 11,640

Organization Chart (As of June 21, 2016)

DivisionInternal Audit Office
Corporate Planning
Health & Medical Business
Development Office
General Administration & Personnel
Finance & Accounting
Information Technology
Management Office
Responsible Care
Production
Engineering
The Board

President
Corporate Managing
Committee

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

AuditorBoard of Auditors

Auditor OfficeConsolidated
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CSR Based on
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Governance
SystemTen-Years
Summary

Management
Discussion
and Analysis ofOperation

Financial
Statements

Corporate Data

Major Shareholders (As of March 31, 2016)

Name

Number of Shares
Owned(thousand shares)

Ratio of capital
Contribution
(%)

3,896

9.60

2,354

5.80

2,129
1,373

5.24
3.38

1,308

3.22

1,267

3.12

1,238

3.05

948

2.33

946

2.33

904

2.22

Sumitomo Chemical Company, Limited
Japan Trustee Services Bank, Ltd.
(Trust Account)
JX Holdings, Inc.
Resona Bank, Limited.
National Mutual Insurance Federation ofAgricultural Cooperatives
Sanyo Chemical Industries, Ltd.
The Master Trust Bank of Japan, Ltd.
(Trust Account)
Mizuho Bank, Ltd.
CHASE MANHATTAN BANK GTS CLIENTSACCOUNT ESCROW
Toyo Ink SC Holdings Co., Ltd.
(Note 1)
(Note 2)
(Note 3)

Individuals, others,
11.3％

Financial
Institutions
33.9％

Stock Brokers
3.6％

Foreign
Institutions,
etc.
20.6％
Other Corporate
Shareholders
30.6％

Other than the above, the Company holds 217 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 2015- March 2016)
Share Price(¥)

10,000
9,500
9,000
8,500
8,000
7,500
7,000
6,500
6,000
5,500
5,000

4

2015

(Note)

5

6

7

8

9

10

11

12

1

2016

2

3

The company conducted a reverse stock split at a ratio of one common share for every ﬁve common shares on October 1, 2015. The ﬁgures forshare price are amounts on the assumption that the company conducted the reverse stock split on April 1, 2015.

53

54

NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2016

Subsidiaries & AfﬁliatesJapan
NIPPOH CHEMICALS CO., LTD.

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

CHUGOKU KAKO CO., LTD.

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

Nisshoku Butsuryu Co., Ltd.

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

NIPPON NYUKAZAI CO., LTD.

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

Tokyo Fine Chemical CO., LTD.

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

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

NIPPON SHOKUBAI TRADING CO., LTD.

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

NIPPON POLYMER IND. Co., Ltd.

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

Japan Composite Co., Ltd.

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

Umicore Shokubai Japan Co. Ltd

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

NS Green Co., Ltd.

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

NISSHOKU ENGINEERING SERVICE CO.,LTD.

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

NIHON METHACRYL MONOMER CO. LTD.

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

Consolidated
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CATOX Co., Ltd.

Governance
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Care Concept

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Summary

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and Analysis ofOperation

Financial
Statements

Corporate Data

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

Overseas4631 Old Highway 146, Suite A, Pasadena, TX 77507, USA
TEL +1-832-284-4033
Nippon Shokubai America Industries, Inc.
Principle Business: Manufacture and sale of superabsorbent polymers, polymers for concrete admixture
and water soluble polymers

SINGAPORE ACRYLIC PTE LTD

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

PT.NIPPON SHOKUBAI INDONESIA

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

NIPPON SHOKUBAI (ASIA) PTE.LTD.

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

NIPPON SHOKUBAI EUROPE N.V.

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

NISSHOKU CHEMICAL INDUSTRY(ZHANGJIAGANG) CO., LTD.

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

SINO-JAPAN CHEMICAL CO.,LTD

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

LG MMA Corporation

27F One IFC, 10, Gukjegeumyung-ro, Yeongdeungpo-gu, Seoul 07326, Korea
TEL+82-2-6930-3800 FAX +82-2-6930-3801
Principle Business: Manufacture and sale of MAA and PMMA

American Acryl NA,LLC
American Acryl L.P.

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

Umicore Shokubai S.A.

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

NISSHOKU TRADING (SHANGHAI) CO.,LTD

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

NIPPON SHOKUBAI KOREA CO., LTD.

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

55

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NIPPON SHOKUBAI CO., ltd
ANNUAL REPORT 2016

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

Member of the Board, Executive
OfﬁcerYukihiro Matsumoto

Managing Executive Ofﬁcer
Koichiro Yamada
Nobuyuki Harada

Member of the Board
Koichi Miura
Takashi Sakai
Kozo Arao

Executive Ofﬁcer
Takumi Hatsuda
Kin-ya Nagasuna
Masaya Yoshida
Kazukiyo Arakawa
Teruo Kamei
Ren Hasebe

Statutory Corporate Auditor
Taizo Maruo
Yoshihiro Arita
Kunimitsu Oba
Yoichiro Komatsu* Representative

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

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